 Hello everyone, welcome to this course on supply chain digitization. This course is offered by IIM Mumbai and is taught by three faculty members including myself Professor Priyanka Verma and my colleagues Professor Sushmita and Professor Deva Brathadas. We are in the last week of this course and we are trying to understand the digital infrastructure which can be implemented in supply chain. We started our understanding about requirement for adopting a digital mindset which can be the first step to understand the requirement of digitalization and how this can be achieved. We actually extended our discussion for understanding the fourth industrial revolution that is industry 4.0 and their nine pillars which are attached with that. So, we have gone through all these nine pillars in detail and now we are going to discuss the next and very important feature of digitalization that is blockchain. Blockchain is a very important technology that has been introduced and we are going to see that what do you mean by blockchain and what are its possible application in any supply chain domain. When we look into the definition of blockchain obviously it is referring to a network. In terms of its connectivity with industry 4.0 this is an enabler for the various industry 4.0 initiators and that is why in some of the framework this is considered as an integral element of industry 4.0 and somewhere it is given as an enabler. Irrespective of that it is playing a critical role in making or introducing digitalization in your supply chains or in your any given processes. So, we are going to understand the blockchain in detail. Now, the definition of blockchain simply means that it is actually a distributed leisure technology and here when we talk about blockchain which is actually considered as a network here secure and transparent recording of transactions and data occurs across the network of the computers. Importantly please focus on these two keywords that is secure and transparent which are obviously to looks like two opposite features but these both features are attached with blockchain and that is why it is gaining importance in today's time when we talk about implementation of digitalization in any processes. The way it works is here the transactions are gathered into different blocks and they are being recorded as ledger. In terms of the role of the ledgers these ledgers can be assessed by different servers and these blocks are actually cryptographically chains the blocks but this chain is done or developed into a chronological order. So, this is a very simple step of understanding blockchain. Let us see that what happens in blockchain. So, here the three steps which are broadly associated with blockchain includes the recording of the transaction which is then converted into the blockchain formation and the last stage is immutability. So, what happens in transaction recording? Whenever a transaction occurs between the partners in a given network these transaction is getting recorded as a block of data. When we talk about what are the details which are getting recorded it includes everything or every information about the transaction which can include answers like who has done the transaction when it has been done for what purpose where it has been done how much and so many other questions which are attached with that particular transaction details. So, all these things are getting recorded in the first step and that is connected or that is getting converted into the form of a block of data. So, here the formation of block happens. Now, in this way we will have several blocks. The next step is about connecting these blocks one after each other and here a chain of these blocks are formed or in a way the chain of data is getting formed thus installing the foundational step of creating blockchain. But remember that whenever a block of data is getting added to the blockchain the validation of that block is required to be done and this validation is also confirmed by the network and this can be done through a consensus mechanism. So, it is a very interesting process as you can see which includes capturing the details about the transaction and how these transactions are getting confirmed validated and being added to your existing blockchain with the proper consensus mechanism. The last step you can see is referred as immutability here whenever we are adding any block to the blockchain in a way we are strengthening the blockchain and the verification of the previous block again ensure that the data which is being developed or the blockchain which is there is tamper evident and also it is immutable and that is why this holds the property of not tampering this particular blockchain by any malicious actor and finally you are able to build a ledger of transactions which can easily be trusted by all the network members. So, this is the process we can see which is referred to the blockchain formation starting with the transaction recording formation of the blockchain and ensuring that the blockchains which is being formed is strengthened enough which can be trusted by every network partner. Talking about its application the blockchain is gaining huge interest in the domain of finance, supply chain, healthcare, voting and many others like that. So, we will see these applications with more details in the future but importantly as we understand that in all these possible applications there are certain transactions which are happening between the different network members which can be easily recorded and can be converted in the form of a block covering all the details related to the transactions and these blocks can be verified, confirmed and agreed upon for adding on to the existing blockchain where these blocks are already existing and finally this can be trusted and can be used by all the network members thus making it immutable. So, these applications we can see very easily it can be implemented in the financial domain, in the supply chain domain, in the healthcare domain, in any voting system and so on. Talking about the different types of blockchain networks we have got primarily these four which are very well known and most probably used blockchain networks among the organizations but they can be other variant as well. So, we have picked up the most famous one, the first one is the public blockchain network. In this type of blockchain network we can see that anyone is free to join this network and also they can participate as well. So, in this blockchain network anyone can easily submit the transactions to the network and parallely they can also view the ledger. So, this type of network are actually more decentralized and that is why it is more secure but talking about its access it is relatively slower and hence it is less efficient. If you try to understand their usage it is used in cryptocurrency transactions and also in decentralized applications. The next type of blockchain network which is quite famous is the private blockchain network. These type of blockchain networks are primarily governed by a single organization and also they these are the organizations who is allowed to participate and also to decide on what transactions are allowed on the network. These blockchain networks are faster and also they are more efficient reason being that here the access is limited to single organization as compared to the public networks. These networks are also less decentralized and hence they are more secure. Private blockchain networks are primarily used for streamlining the internal processes of any organization and hence they always aims for improving their efficiency. The next type of blockchain network we can see is referred as permissioned blockchain networks. This is again a type of private blockchain network we can say. The difference of permissioned versus private is that in case of permissioned blockchain networks participants have to obtain a permission especially from a governing body for joining this type of network. Where you can see it is used basically in maintaining a high level control over their blockchain network is required there we can easily see these type of permissioned blockchain networks be implemented. The next one is the consortium blockchains which is governed by a group of pre-selected organizations. This can be typically used in the situations whenever the selected organizations need to collaborate together specifically on working on a common blockchain project and they are not ready to give up control of their data to a single governing body. So in such situation we can go for consortium blockchains. There is one more variant of blockchain network which is referred as the hybrid blockchain network. Here a combination of these possible blockchain networks can be selected depending upon the business needs. So you can see and you can also compare from this slide that what are these variants of blockchain network and in what scenario which particular blockchain network is suitable. So far we have discussed about all the industry open zero technologies blockchain and their possible challenges applications and many other things. Let us come back and try to understand their applications in supply chain domain. If you remember in the previous sessions we discussed about the different supply chain processes which includes your planning and forecasting, sourcing and procurement, production and manufacturing, inventory management, distribution and logistics and customer service. So depending upon these process requirements the appropriate type of industry 4.0 technologies or their strategies and maybe blockchain can be selected. So here we have attempted to check the possible application of these industry 4.0 technologies on these particular supply chain functions. So you can see that if I refer to let us say AI that is artificial intelligence or machine learning we can see that their applications in the different processes of supply chain. So in planning and forecasting yes AI can be implemented sourcing and procurement it can be done similarly production and manufacturing, inventory management, distribution, logistics, customer service and so on. Whereas if we talk about robotics maybe robotics is a industry 4.0 technology which is not so prominent or which is not very directly applicable for planning forecasting however in the other functions it can be applied or its application can be seen. Obviously this will depend on the respective business scenario. This is just a representation of the possible applications of the industry 4.0 technology it does not guarantee the final result. It is possible that the way these technologies are being mapped is missing some element and hence this can be developed depending upon the specific business requirement. So in this slide we are just trying to show a possible applications of industry 4.0 technology in the associated supply chain function. In order to strengthen this further we will try to explain this phenomena with the help of some of the cases in each industry 4.0 technology and the associated supply chain process. So wherever there is a mapping possible between the technology and between the supply chain process we will try to demonstrate it with the help of a possible case. So let us start understanding this with the first industry 4.0 pillar and that is IoT that is Internet of Things. We can see that this can be easily applied to the first five functions of supply chain that is excluding customer service. We can see an application of IoT in the other functions of supply chain. So to strengthen this discussion let us look into the cases which will confirm the applications of IoT technologies into the respective processes. The first process under IoT implementation for supply chain we are considering is planning and forecasting. Suppose the company names which are referred over here are all hypothetical and the cases have been developed based on the experience and based on the possible applications of the technology in the business scenario. These are all hypothetical cases and only for the learning purpose. So here the implementation of IoT can be seen in planning and forecasting through the case of omega foots. It is a company which is a grocery distributor and it is facing the difficulty for predicting the demand for the perishable items. As we know that perishable items if not forecasted well or if the demand is not known in advance it will obviously lead to spoilage which is your wastage and sometimes in your missed opportunity that is your back order. So from here we can say that the traditional forecasting method which is based on historical sales data is not sufficient or is it not useful in the scenario as it is not helping you in minimizing your spoilage or in ensuring that your back order is less. So to overcome this challenge the company omega foots has actually deployed an IoT network which is equipped with the smart sensors. Now the job of these sensors are to track the temperature also the stock levels of these products across the warehouses as well as the delivery trucks but this tracking is required to be done in a real-time basis. So now we can see that due to this tracking we have got the temperature data and also the stock level data of this product on a real-time basis. Now this real-time data can be analyzed with the proper analytics tools techniques algorithms and this can be used for predicting the consumption rate and also the shelf life for their perishable items. Now if you know the consumption rate and also the shelf life we can obviously do that mapping of these two decisions and based on that the delivery schedules can be adjusted and if required some targeted promotions can be implemented sometimes on certain specific locations which has got very high demand. So we can see from here a very interesting application of IoT in planning and forecasting supply chain process. The next application of IoT can be seen in sourcing and procurement. To understand this we are referring to a company called as ACME Pharmaceuticals which is a drug manufacturer and this company is frequently encountering these stockouts and delays in their operations and this is happening mainly due to the manual way of tracking the inventory. So we can see the challenges over here for this company that there is a stockout issue and also the delay is there in their operations and the reason that has been found is the manual inventory tracking methods. To overcome this challenge the company has implemented an IoT solution and in this there are certain smart sensors which has been embedded in the shelves and the materials which provided the real time stock data. This also helped you as in automatically triggering the purchase orders whenever the inventory levels deep flow. So obviously the continuous tracking of inventory helps you in avoiding the stockouts and that is possible due to the implementation of such smart sensors at the shelves and at the material tracking system. So this is nothing but this is the automated inventory management system which has been implemented in this case with the help of the appropriate IoT system and due to this the stockouts are easily eliminated and accordingly the whole or the complete procurement cycle is optimized. This is possible through the implementation of smart contracts and this will finally lead to reducing the cost of the overall system. The next application of IoT can be seen in the production and manufacturing. To understand this we have referred to a company called as Newton Instruments which is a manufacturer of a violin and we understand the nature of the product that this company is mainly struggling with maintaining the optimal humidity levels in the workshop. So depending upon the product characteristic this is one challenge which they are trying to see. Reason being the humidity levels affect the quality of the product over here. Because of these fluctuations of the humidity levels they can be cracks or unwapping in the delicate instruments. Boilin as you know is a very delicate instrument and is significantly affected by the humidity levels. So because of this it is leading to production delays and waste. So in order to avoid this an IoT solution is being implemented and the sensors which are embedded in this case are actually looking for the real time monitoring of the humidity in the wood. Accordingly the smart vents are adjusted airflow automatically. So the violins obviously they are being tried in the consistently regulated environment and this is leading to increase in production yield and the waste is being reduced due to the damaged in the instrument is being significantly reduced. So we can see very interesting way of implementation of IoT in planning and forecasting, in sourcing procurement decisions, in production and manufacturing. Everywhere we can see that the way these sensors or IoT networks are being implemented are for different reasons and the way it is being done and we can accordingly also track with the success feature attached to it. Then next supply chain function where IoT can be implemented is in the inventory management. Again we are referring to a company called as vendor guitars. Again these instruments are again very delicate and it is also noticed that during the shipping many instruments are lost. So we understand that this will directly affect the customer service and is also linked with the operational inefficiency. So here the solution was to implement an IoT system where the focus is more on location tracking sensors which are embedded in the guitar cases. So this is again an interesting application of IoT implementation. The purpose of these sensors is to provide the real-time visibility about the guitar throughout the supply chain. So this ultimately helped in eliminating the problem of lost guitars, the deliveries got expedited and ultimately the whole logistic systems got optimized. Proactive tracking is one of the benefit from here which we can see and because of that the delays are addressed promptly leading to increased customer service satisfaction level and also the indirect effect is on improving the brand reputation. The last application of IoT can be seen in the distribution and logistics processes of supply chain. Here we have a company called as best pharmaceuticals which is dealing with the challenge of spoilage of the medicines and delays particularly due to the inconsistent temperature conditions during the transport of the temperature sensitive medications. So here the focus is more on those medications which require a certain degree of temperature even during the transportation as well. So here IoT based coal chain monitoring system is implemented and the role of the sensors which are installed in the shipping containers is to look for the real-time temperature and humidity data. Obviously this type of data provided the visibility into the shipment condition and based on that many subsequent decisions can be appropriately taken like optimizing the routes and storage practices to see that the wastage are minimal. The quality of the medication is managed properly throughout the transportation and logistics decisions. The partnerships between the different players got improved and here by leading to improved global healthcare access. So in this way we have seen the implementation of IoT in the different supply chain processes with the help of different cases. These are just for demonstration purpose and does not guarantee the final solution for any particular industry but obviously it is interesting, indicative for anyone to understand that how these technologies can be applied in the appropriate supply chain processes and the associated decisions can be accordingly taken. With this we will be ending today's session. Thank you everyone. Have a nice day.