 OK, great. Hey, everyone. Hey, global supply chainers. How are you guys doing? Glad to have you on our first welcome live event of SE3X, Supply Chain Dynamics. My name is Alexis Bateman. I am a research associate at the MIT Center for Transportation and Logistics. I will be your course lead throughout this course. You've already received a couple updates for me. And I'll continue to be the lead throughout this. So whenever you have a question, you have this SE3X help email, and we'll just be leading you through this course on supply chain dynamics. Just a few updates on exactly how many there are of you. There's 17,682 enrolled, both audit and verified. 378 of you have verified. So you'll receive the Supply Chain Dynamics MITX certificate, which is a great value for professional application. Median learner age is 30. So we're falling right in the middle there. 178 countries are represented with US, India, and Brazil representing the top three. And 23.4% of you are women. Yes. All right. Women represent. There is a note that I want to bring to your attention. May have you, somebody who've already noticed that we did take down the practice problems and the greatest assignments. I sincerely apologize for that. We noticed it had an issue, and so we are working right now to update those. And put new problems in so they will be going live tomorrow, July 7 at 1,500 UTC. The deadline will be extended from July 19, 1,500 UTC to July 21, 1,500 UTC. So you'll get a two extra days as a result of the delay in putting it up there. So again, we apologize, but we just really want to make the material as good as possible for you and didn't want any errors to slip through. So that will be going live. And we're really happy to have you here at our first live event. We will be walking through how to become a verified student. If that's of interest to you, why it's of value, we'll be talking about some current events that represent supply chain dynamics. And then we'll be going out to some breakout room so that we can have some more discussion. I'll hand it over to Dr. Chris Kaplis, as all of you know very well. And let him take it over for a minute. All right. Thanks, Alexis. So as you guys can tell, Alexis and I are not in the same room. She's essentially in CTL West on the West Coast. And we're back in CTL East, I guess you'd call it. But Alexis has been with the center now for, my gosh, five years, six years now. Six years. And then she just wanted to move to the West Coast, couldn't take the winters anymore. Anyway, let me do two things. First, how does SC3X fit into the larger course? And then what are you going to be doing in SC3X? So of the five courses in the MicroMasters curriculum, SC0, 1, 2, 3, and 4, SC3X is on the higher end of the spectrum. So the first three courses, SC0X, which is supply chain analytics, SC1X, supply chain fundamentals, and SC2X design, they're more quantitative modeling-based. So you learn basic modeling tools in SC0, rather. SC1 is all about the fundamental trade-offs. And SC2, using those trade-offs and models to design a network. And then starting at the midterm of SC2X, things change. And we get a little more realistic. We start going into practical issues. And that's what SC3X is all about. So we're going to not lose our math completely, but we're going to start looking at those things that bring in complexity and make the models that we developed in 0, 1, and 2 a little more complicated. So we dive much deeper into the idea of complexity. And then in 4X, which hopefully you'll take in the fall, and that's all about how to use scale, the things that we've been doing is toy problems to real enterprise level. We'll talk about relational databases in that course. We'll talk about machine learning and talk about large-scale systems. But in SC3X, it's all about complexity. What makes supply chains more difficult? And what really does it, it's the introduction of reality. Anytime we introduce real conditions, things aren't as simple as the EOQ or the simple newsboy problem. They still apply, but there are nuances to it. And so the way the course is divided up, the first half is all about tools. How do I identify complexity? How do I handle it? We'll dive into system dynamics, which is a great tool for both visualizing a system and trying to understand how the different actors behave. We'll go into strategy, both for a firm and within a supply chain. So we'll dive into all these different tools that you can use to identify complexity, quantify it, minimize it, mitigate it, or maybe embrace it. And we'll talk more about that in a second. The second half, we dive deeper into the drivers of complexity. And we spend a lot of time with Dr. Bruce Arnson looking at global supply chains because whenever you cross a border, things get tricky. Whenever you cross, whether they're states in Brazil or countries in Europe or continents, whenever you cross a border and you have different government agencies, they have different rules, regulations, and priorities, it changes things. And so we'll spend two whole weeks, four lessons, on the impacts of global supply chains because it really drives supply chain design and operations on a global level. And Professor Yossi Sheffield is gonna come in and talk about disruptions. Because again, everything we've done for design assumes blue skies almost. The things are gonna be deterministic, demand is stable, known, and not changing. And the world doesn't operate that way. So looking at robustness and how do you design for robustness or flexibility with resilience? So we'll talk about all of that. And then we'll finish up. And Alexis will lead on the final discussion in how these other factors, whether it's regulations, government restrictions, social drive or any other factors, how these factors that you can't control influence supply chains and how you can address those. So the first half is all about identifying, measuring, and mitigating complexity, the tools. And the second half dives deeper into actual applications. So that's what we do in SC3X. And what we wanna talk about in this lesson is dive a little deeper on complexity itself. So in the first lesson, the video, I present three cases and you might have watched those, might not have yet, but that's okay. And the three cases are for Yulia Packard and then also, I believe it was Novartis. And what they faced for complexity was the idea that they had too many SKUs, stop keeping units. And so they addressed how they wanted to mitigate that. And this is something that anyone in supply chain is going to be, they're going to face this or encounter this. There's where you have too many SKUs, what do you do? How do I rationalize that? And so we go into detail on how these two companies did it and they have different ways because you can think about when SKUs get introduced, like we talked about in SC1X, when you talk about forecasting, everyone likes to introduce new products. Marketing loves new products. Why? Because they increase sales. Any marginal increase in sales is a good thing to them. Unfortunately, that kills supply chains because everyone likes new products, no one likes to kill existing products. They're always someone's baby. And so this is a challenge because you get something called SKU proliferation where you have more and more and more SKUs. So how do you rationalize this? How do you approach this? And there's many different ways you can do it. The two cases, look at some extreme examples. One is I can limit things coming in and make sure things only come in if they really make sense. I can naturally get rid of the long tail of the old ones and make sure I rationally do that. And then another way just to keep a top down approach, how I just want to keep a limit on the number of SKUs. But the third case is more interesting. And that's a company called Vista Printer. Actually, Sympress is the parent company. And they embraced complexity. They do customization on a one-to-one level of almost any kind of product. And so I talk about how they address this market and they embrace the complexity of it because they have a really interesting solution approach. So the lesson there is if you recognize complexity but you're able to handle it as an organization or a company, then that's a great thing. That's a competitive advantage. And that's something, if you can do it better than any competitor, then that's something you want to embrace and you want to actually leverage that complexity because you can handle it better than anyone else can. And so we'll go in those, but let me just recap where complexity comes from. And there's really only like five drivers. And so one is the number of things. A company that has one SKU is not as complex as a company that has 100 SKUs. That makes sense, right? Or one facility versus 20 facilities. The more employees I have, the more products I have, the more manufacturing plants, the more of whatever's I have, it gets inherently more complex. And it's not just linear, right? It gets non-linear. Also, it's not just the number, it's the variety. So if I have 100 SKUs, but they're not that different, they're just like color variations. Versus if I have 100 SKUs and they differ in size, weight, density, all these other dimensions, that's more complex. So as things differ from each other, as the variety increases, that also increases complexity. In addition to the number and the variety, how they interact. A good example of this is in the early days of e-commerce, most retailers would have separate channels. It was like Walmart would have, Walmart for traditional brick and mortar, and they'd have a separate e-commerce chain and they would have different facilities and different supply chains. In that case, there's no interaction generally between the two supply chains. However, companies are now bringing them together, and so you have a lot of interaction between the two channels. So as I increase the number of things, the variety of those things, and then as those things interact with each other through say a shared resource, a shared facility, like a DC, or maybe same people have to handle it, falls within the same organization. Whenever there's interaction between these different things, then it becomes more complex because what you do to this product influences something over here. So the number, the variety, the interactions, the opaqueness, and what this means is it transparent. Do I understand the interaction? Sometimes it's very hard to understand if I change something here, what will the effect be? And this is something actually we'll talk in week two with system dynamics. It's a way of modeling and trying to understand, okay, if I take this action, what are the different side effects that could have a ripple effect? And so the last one is the dynamics. Do they change over time? So these are the big drivers of complexity, but there's some other ones out there. And in fact, one of the ones that I wanna talk about, and we'll talk more about this in a few minutes, with examples, is the idea of reverse flow. And so what I wanna do is turn this back to you, Alexis, and talk about situations, other situations which add complexity to a supply chain and specifically focus on when the product, instead of coming from source to plant to DC customer, it starts now coming back. And so let me turn it back to you, Alexis. Yes, absolutely. Before I head into that, just a little quick plug I forgot to do in the very beginning would be to, if you're enjoying hanging out with us now to upgrade to verified student, I had some slides prepared, but I figure you guys see slides all day, so let's just give a recap. So if you like hanging out with us and you wanna see some additional material, obviously we try to give you a breadth of material in the audit course, but if you wanna see real supply chain thesis that are being offered or case studies or articles, that will be in the MicroMaster Supplemental Materials. So within each course, you can get a verified certificate for 150 at this point, and you get a certificate on that specialty, supply chain dynamics, supply chain technology and systems. I put a link almost in every email, so if this is kind of peaking your interest right now, I encourage you to verify, it's a great certificate for your professional value that you can post on your LinkedIn and it's starting to be very industry recognizable. So you can get that for each course and then that will lead up to the five courses which is the MITX MicroMasters Credential, and that is a credential that can really add value. You have to pass all five courses as a verified student and then also take the final exam at the end, but we already have some ambassadors out there that passed the first round and they're already seeing a lot of success from having this credential in their portfolio and their CVs. So I would encourage you guys to take a look into it. We've really enjoyed interacting with the students and I think that if the dynamics, especially in this course, learning about additional material, I encourage you to upgrade. If you have further questions, feel free to reach out to us. So back to what we were talking about with Chris and complexity, we traditionally think about a very linear supply chain as sort of the sourcing, making, you're procuring, you're making, and then you're delivering, but there's obviously an additional component that occurs at the end of the life of the supply chain and that can be in any different way. Once it's received the consumer's hand and it needs to be recalled, it could be a possibility of needing to recycle and recollected as regulatory and directives have been implemented for extended producer responsibility. It could be as many of you see these days, you get a product and you just don't want it anymore. It doesn't serve your needs and so you're returning it and those are becoming much easier with free returns or easy returns with suppliers, with companies like Amazon and others or in other case material needs to be returned and remanufactured to be reused again because it still has a lot of value. So just to highlight a current event that's actually happened in the news recently, yesterday, United States, nope, two days ago, excuse me, celebrated the Independence Day 4th of July and everyone likes to have a firework in some places that's allowed. So they do personal fireworks obviously in places like Boston, there's a fabulous firework display that's professionally run, but in some cases, some people want to set their own off, but it turns out some of those were faulty and they ended up actually exploding in a consumer's hand and causing injury. So American promotional events, the company realized they needed a major recall of that type of product. So that product has been manufactured and produced and now delivered to countless firework stands around the nation. And how do they go to obtain all those products so that they can reduce their liability? Because the longer that those products are on the shelf, they have liability for the impact that they may be on the consumers that get injured by that. So this is where you start to think about some of the complexity of things like customer relationship management. How are your products being sold? How, what is the agreement? What type of information do you have about them? Are you able to trace it down to the actual customers that are selling it? And are they actually being resold or is there a resale that other customers are selling that you aren't actually able to trace? Thinking about the amount of products that are on the shelf and how to actually collect them back gets quite, quite complex. And that's just the downstream component. American promotional events obviously wants to continue to sell fireworks. And so they have to look upstream to find out exactly what was faulty in their product. And so that needs to think about the transparency with their suppliers. Do they have information about the production, about the exact materials that they can find and identify what was happening in that product and cause it to explode? And this just isn't fireworks. I mean, there's a, in the United States in particular and around the world there are consumer product safety commissions that actually regulate when there is an issue with the product. And in the United States there's actually at least one recall every single day. So that can be in food products, could be your automobile, could be your kids toys. Actually in last year globally, I think, yes, globally it was 51 million vehicles where recall as a result of things like faulty airbags. And these are the magnitude of this is huge. So thinking about your traditional supply chain but then this additional, this factor that creates these flows taking back those products, identifying exactly where the issue lies in the supply chain and rectifying that so that you actually are able to have a more bulletproof supply chain in the next run. So the recalls are actually quite, they put your supply chain under the spotlight. They start to make a company think about how well do they know their customers and suppliers type of transparency. What is the chain of custody of that product? Is it documented through a paper trail? What type of control do they have on that product and where it's being moved along the chain and what happened to that product? This really puts the supply chain under a lens that they have to think about because it's on such a shortened timeline and because not only does your, commit your reputation rely on that, your finances and the impact on the company on your long-term consumer base. So this is quite kind of expedites the need to start thinking about the complexity. Yeah, so let me, Alexis, let me just add something in to that, yeah, because it's a great example. We did a project a long, 10 years ago with a medical device company and they had the exact same problem. So with the fireworks, you know, that was one thing, but this was a medical device and then people could die. And so the problem is they found these faults don't just come up all of a sudden and say they're a problem. Something just manifests itself slowly. So they have to make a decision on these recalls when to pull the trigger. And it's not just when, so one incident happens, a second one, is that just because a user error, especially it must be really hard to do with fireworks because a lot of times people doing fireworks, you know, they're not necessarily sober. If you go to New Hampshire, there's a lot of drunken fireworks going on on the 4th of July, it's a little crazy. But for some of these, so you don't always know when something went wrong and then if you say, okay, something is happening, you got to make a decision like Alexa said, going upstream, well, which run? How far do I go? Do I pull all my product out? So for the fireworks, they're certainly not going to pull all of their product. They have to identify, is it this factory, this batch, this run? And so the question is how big is the margins? Because the bigger the margins, the safer it is, but then the profit goes way down. So it's not an easy call. And then even with even more complicated, if you can figure out when it is, you have to go, you have to now look at the other end, okay, if we can identify it, where it happened, can I identify the products and where they went? So the whole idea of traceability and trackability, which we'll cover in more detail in SC4X, is so critical and it makes it so much more complicated. Now, because the products aren't fungible anymore, you need to know exactly where this product made in this run is at any one time. And one last thing, and I'll turn it back to you, Alexis, is the car, the 51 million vehicles were recalled. The interesting statistics in the note that you sent out, that's three times the number of cars that were sold in the US. So that's amazing that it's a 3X. And so this affects, it's only getting worse. Absolutely, yes. And actually thinking on sort of the control of how much impact it has just recently, Tanaka Auto in Japan actually bankrupt as a result of the compounding factors from the recall and the magnitude that they had recalled so many airbags. So this is a huge issue. And just to kind of continue on with that, reverse logistics topic beyond recalls because recalls isn't the only time that you actually have to collect product back. But in certain cases, there's actually regulation controlling the actual collection of end of life products. So we can think about this generally as recycling, but actually there is now regulation that requires producers to have extended producer responsibility. This is most prevalent in Europe where there are some directives that require companies to take back the products that they've sold and make sure that they're processed so that they have less environmental impact. This is also true in the United States. There's ones on batteries, carpet. So this is becoming more of a common thing. It's also becoming common in some factors for corporate social responsibility that companies want to take back their products so that they can make sure that they are recycled appropriately and they don't have negative environmental impact. So this can, you think about, yeah, we'll just take back those goods. That's super easy. We'll just ask for all our cell phones back around the world. Well, if you think about, I mean, even I who would consider myself environmentally friendly have a cell phone buried in the bottom of my drawer or have a laptop I haven't used in years and haven't really thought about how I'm gonna handle that. But if you're a major provider of these goods and you need to take those back, how do you get them back? So this is sort of even the first step of taking it back, not even processing it, which we think about the actual delivery of goods is extremely complex. But if you think about taking it back where the actual owner of that product has very little incentive to give it back, how do we design collection systems that actually get those products back? How do they get back in the hands of the producer? So once they've even designed a collection system, they may get a product back that is extremely hard to take apart. So you think about your laptop or your cell phone or any product that you own, think about how you could actually take it apart to process each of those materials. And it's extremely difficult. Any of these products now, whether they can be done or not, they then have to go through specific treatment and recycling processes so that those materials can be, so they are not actually, they don't end up in landfills or other places where they could be toxic or they could potentially materials could be reused again and go back into the supply chain, creating some sort of a closed loop supply chain where you can use materials again in your product. And to think about exactly what that entails is incredibly complex. So now we think about a company that may be realizing this isn't really difficult to break about their parts. So that actually may impact their design of future products. They say, well, if we're actually gonna take this apart, we might wanna design it. So the product design actually changes as a result of the collection and reverse logistics. So this is occurring globally, if you're interested to look in to extend a producer responsibility. And this is both on regulation and sort of a corporate social responsibility to take those materials back. In some cases even the material has high value. So it doesn't even have to be regulatory or corporate social responsibility. It could be that materials like copper or other metals and minerals are actually very expensive. So they actually need to be taken back and reused or there's also a finite amount. So actually that drives up the cost and they can use it in future products. So there's multiple reasons to essentially recycle or take back these materials to be reused again. Let me add into that though because it's not just you're much greener than I am. Obviously Alexis, I'm less green. But there's also a funny thing that you mentioned about copper. The joke that I heard is the biggest copper mine in the world right now is under New York City. It's collecting all the old copper cables that had been used because they're being replaced with optics. But it's not just recycling because end of life, you can think of an economic reason as well. And so it could be one for recouping that material whether it's aluminum or whatever. But also you might have a product where a piece of it constantly can be reused. So think of ink cartridges. I think of razor blades at this point. But ink cartridges especially for like Yula Packard, you send it back and they make it easy to send it back because it makes the production cost that much easier. Back when we had cameras, disposable cameras you would send those things back. Bottles, you send those back. So this introduces something that Alexis called the closed loop supply chains which we actually talked about if you took SC2X, I believe in week four of that second lesson we talked about different channels and we talked a little bit about closed loop for design. What we'll do in this class is talk more about the complexity that arises from it. But if you're okay with it Alexis, I was gonna turn it over to the breakout rooms at this point. Is that okay with you? Sure, yeah. Okay, so what we want you guys to do in your breakouts, we'll give you about 15, 20 minutes. And I wanted to have you answer the question where you can think of examples where a company or an organization that you work with or that you know of either reduce the complexity of their supply chain or even better if they embraced complexity as a competitive advantage. So think of examples where you worked or things that you've read where a company was faced with complexity and they either embraced it and use it as a competitive example or they came up with an approach to reduce it. So come up with that, talk about introduce yourself to the small group and then you can talk to each other about this and come up with an example and use the chat to let us know what it is. And then Alexis and I will talk about it after the break. So it's about 27 after the hour, so we'll start again at a quarter of. All right, see you in a few minutes. Okay.