 Dear participants, welcome to the course on Supply Chain Digitization. It is jointly being taught by Professor Piyanka Burma, Professor Sushmita Narayana and Professor Devav Brathadas from IIM Mumbai. In today's session, I will continue the discussion from the previous session that is supply chain digital twin from network optimization point of view. And specifically, we will see if we have capacity constraint, then how the network optimization work. And towards the end of this session, we will also talk about supply chain control tower. And if you look into this optimization model, which we have discussed in the last class and specifically, if you pay your attention in this highlighted portion, you will see that factory 1 as well as factory 2 has unlimited capacity. Similarly, distribution center 1 and distribution center 2 has unlimited capacity. Why I am saying unlimited? Because of this value m. So, it is present both in constraint this as well as this constraint. And m is a very large value. We have done this modification. So, in this constraint, we have replaced m with capacity of factory i. That means, actual capacity of factory i. We have also replaced m in this constraint by capacity of DC j. So, this is my actual capacity. This is my actual capacity of factory i. And this is my actual capacity of DC j. So, in place of m, I need to replace cap F ac i. That means, actual capacity of factory i in place of m in this constraint, I should replace capacity of DC j. So, if we do this modification, then my network optimization model would be able to handle the capacity constant. And it will give me a different solution. So, with this small modification, we can solve the network optimization model. Then we will get the result. Now, let us do the hands on and see one case study. So, we will continue the previous case study. Only thing we will do some modification in terms of capacity constant. So, assume that the Orangovat factory has capacity constant for each SQ. So, we know that we have 4 SQs. SQ is 1, 2, 3, 4. And these are my markets Pune, Mumbai, Surat and Amadabad. And each of this market, I have 4 SQs and demand for these SQs are given in the last column. So, this is same as the previous case we discussed in the last lecture. Now, this is the new thing. This is the capacity constant. If you see factory Orangovat has capacity constant. So, for SQ 1, minimum throughput per year, it has to be 10000. For SQ 1, maximum throughput per year is 25000. Similarly, for SQ 2, I have to make sure that from that factory, minimum throughput per year is 10000, maximum throughput per year is 25000. Same for SQ 3 and same for SQ 4. So, what we are adding? We are adding a capacity constant in Orangovat factory. So, Nasik factory does not have any capacity constant. Now, similarly in distribution centers also, we do not have capacity constant, but we are putting capacity constant only in Orangovat factory just to see how the results will change. So, now the question is what should be the optimized supply chain network in this scenario? Since we have added capacity constant at Orangovat, we wanted to study what is the optimized supply chain network? Will it be same as the previous scenario or will it change? If it changes, how will it impact the overall profitability? So, if I want to study all of these and answer this question, we need to run the revised network optimization model on any logistics. So, let us go to the analogistics and run this, but if you do not have any logistics installed in your laptop, please visit this website, download any logistics software and then enter the relevant data in analogistics specifically in the network optimization model. And if you are a starter, if you do not have any idea of developing model in analogistics, I strongly recommend you to go to this website and they have given all the study material relevant to this, you would be able to reproduce the similar results. So, now let us move to the analogistic software. So, what we will do? We will first look network optimization with constant and if you see the data, I will specifically focus on production data. And Orangovat factory, I have 4 SQ, SQ 1, 2, 3, 4 and if I move to the right hand side, you will see minimum throughput is 1004 SQ 1 and maximum throughput is 25000 for SQ 1. For SQ 2, minimum throughput is 10000, maximum is 25000, for SQ 3 and 4 the same value. So, what we are doing? We are adding a capacity constraint in the Orangovat factory, whereas if you see Nasik factory does not have any capacity constraint, the minimum is 0, maximum throughput is also not given. So, it is blank, that means there is no capacity constraint in Nasik factory. Similarly, if you look into the distribution center, it will also not have any minimum throughput or maximum throughput, it will also not have any capacity constraint. So, only thing we are adding extra capacity constraint in Orangovat factory and rest of the part remains same like the previous network optimization model. So, now if I focus over here and enlarge the scheme, you will see right now if I just put the level, yes. So, my possible location of factories Nasik and Orangovat, possible location of distribution center is Bapi and V1D and the customers are located in Amdabad, Surat, Mumbai and Pune. So, this is my prospective location of factory, prospective location of distribution center and these are my demand points. Now, I need to find out what is the optimized supply chain network. So, for that I will go to the network optimization, I will run the model. So, if you run the model, you will see the output. Now, I have got the output and if I focus on connector. So, now if you see in the optimized supply chain network, I have Orangovat factory and Nasik factory. So, both the factory are opened and both from these two factory, the finished code will move to the Vapi distribution center. Although I had option of V1D distribution center, the model is suggesting do not open this year V1D, only one this year Vapi is good enough. So, once the product comes to Vapi, then from Vapi distribution center, you send it to Surat, Amdabad, Mumbai and Pune depending upon the demand of the finished code. So, now this is the result which you get using any logistics. So, if I want to look into more detail, we can also see the results of the flow details. You can see over here, what is the movement of products from Orangovat to Vapi, then Nasik to Vapi and so on. So, all the movement of products are given over here. So, if I want to find out from which SKUs, from which factory to which TC, how much products are flowing, like in this case from Orangovat to Vapi, SKU 1, 25000 products are moving per year. Then I can also see the results, overall stats if I see, default view, yes. So, overall stat it is giving me, my objective function is 1417010, 1.4 million dollar is my profit. So, if I add capacity constant, my profit will become 1.417 million dollar. So, now if I move to the PPT and compare the performance of this revised model with the previous one. So, this was the model supply chain network without capacity constant. So, when we ran this in the last class, we got total supply chain profit as 5.9 million dollar. And if you see only Orangovat factory was opened that time, then from Orangovat factory products were moving to Vapi DC and from Vapi distribution center, all the demands were satisfied. Now, if we add capacity constant, if we add capacity constant, then just now we run the model in analytics, you can see one new factory has been proposed. So, earlier in this case I had one factory at Orangovat. Now, the model is suggesting to open two factories, one in Orangovat and second one is in Nasik. Why it is suggesting so? Because at Orangovat factory, I have added some capacity constant. So, therefore, to fulfill the demand, it needs to open another factory at Nasik. So, now two factories are opened, one at Orangovat, another one is Nasik. So, from these two factories, Finiskud will move to Vapi distribution center. And from Vapi distribution centers, product will move to Surat, product will move to Amadabad, product will move to Mumbai, product will move to Pune to satisfy the demand at these respective locations. And if we see the total supply chain profit, it is 1.417 million. The same value we have observed in the analytics software as well. So, now by adding capacity constant, you can see your profit has reduced from 5.9 million to 1.4 million dollars, a huge deduction in profit. Since, we have added the capacity constant in Orangovat factory. So, now let us see the summary of week 11 till now. We have understood what is digital twin. We have also discussed various types of digital twin in supply chain and operations management point of view, like product level digital twin, process level digital twin, enterprise level digital twin, supply chain network level digital twin and network of networks level digital twin. We also discussed digital twin framework from supply chain point of view. Then, we developed supply chain digital twins from scratch using any logistic software. So, specifically we did one case study on green field analysis and explain how to develop supply chain digital twin for green field analysis. First, we developed an optimization model to determine the optimal location of distribution centers. So, the transportation cost is minimized and then we perform green field analysis using an elastic software. So, that helped us to develop a digital twin specifically from green field analysis point of view. Then, we moved into supply chain network optimization and we took one case study and developed an optimization model to determine the optimal location of factory as well as DC and also we found out what is the optimal movement of products from factory to DC, from DC to various demand points. So, that overall supply chain profit is maximized. So, we developed an optimization model and then we also solved the model in excel and finally, we performed the network optimization using any logistic software and compared the performance of the overall supply chain. First, we performed the network optimization without capacity constant and then we performed network optimization with capacity constant and we compared the results of both the scenarios. So, that helped us to develop a supply chain digital twins from network optimizations point of view and we showed on analytics how to do this green field analysis as well as network optimization. So, now what we will do? We will focus on supply chain control tower and how it benefits the decision maker using some use cases. So, let us assume this is my control tower. It connects with consumer, retailers, distributors, manufacturers, suppliers and raw materials. So, it is a centralized hub that offers real time visibility and command of every facet of supply chain. It enables business to oversee and govern their extensive supply chain activities through a unified platform end to end integrated with all information management system. So, supply chain control tower will have end to end visibility and it is integrated with all information management systems for better visibility and better traceability. Now let us see few use cases so that you understand like where supply chain control tower can be applied and how it benefits different industries. So, let us take an example of a consumer goods company that specializes in producing and distributing snacks and packaged food. One of the critical raw material they require is high quality sunflower oil, a key ingredient for various products in their portfolio. So, one of their raw material is sunflower oil. The company sources sunflower oil from multiple suppliers each located in different regions. So, somebody is located in north, somewhere is located in south, some may be located in other country and continent. So, there are multiple suppliers who are giving you sunflower oil and you need this raw material to produce snacks and packaged foods. Now coordinating with these suppliers and ensuring a steady supply chain is complex because they are sitting in multiple locations, different regions, different time zones. So, how can I coordinate with them smoothly? The company's products experience seasonal demand requiring agility in procurement and production. Suppliers have varying lead times and unforeseen disruption in transport can cause leakage. Like some supplier will have lead time less, some suppliers will have lead time more and then sometimes disruptions might happen in transportation that will cause delay and therefore, I will not get the raw material on time which will eventually impact my production. So, how to address these challenges? So, for that supply chain control tower will be useful. It provides real time visibility into the entire sunflower oil supply chain. You can track the movement of raw materials from suppliers to the manufacturing plant. This visibility allows you to identify any bottleneck or potential disruptions. The control tower integrates data from suppliers, transportation provider and internal systems. In the case of unforeseen disruptions such as truck breakdown or a weather related delays, the control tower enables quick decision making. For instance, let us assume that a delivery truck is delayed due to traffic accident. The system can automatically, it can automatically re-root the shipment or expedite another shipment to avoid production stoppage. So, that is the kind of decision making power it has. By optimizing transportation routes, reducing excess inventory and minimizing the impact of disruptions, the control tower significantly reduces the transportation and holding cost. So, it is reducing my cost, it is increasing my efficiency, it is giving me the power to track the movement of raw material. It is also giving me better decision making power on a real time basis. So, these are the advantages of control tower. Then let us take another use case and understand how it benefits that company. So, again it is a consumer goods company that produces wide range of perishable food products like such as dairy items and fresh products, fresh produces. The company has a national distribution network with multiple distribution centers. They have distribution centers located in various locations and vast fleet of refrigerated trucks to ensure product freshness. Since these products are perishable, I have to make sure that my truck is refrigerated. What is the challenge? With the vast network of distribution centers and delivery routes, optimizing routes and delivery schedule to meet customer demand is complex. So, how do I, how do I optimize my delivery route? How do I optimize my supply chain networks? So, that I can meet the customers demand one time and I am on schedule. So, since I have lot of distribution centers located across the region and lot of refrigerated trucks are moving. So, therefore, the maintaining the delivery schedule sometimes becomes challenging. So, lack of real time visibility into the location and condition of the shipment makes it challenging to respond to unexpected delays or issues promptly. Since I do not have any real time visibility, I do not know where my delivery truck is. What is the condition of the shipments? Because the shipment has to be refrigerated and it has to be monitored continuity. I need to monitor what is the temperature, what is the humidity inside the truck, so that product does not get waste. So, therefore, I need real time visibility about the location of the truck as well as condition of the shipment. So, how to address these challenges? So, let us see what this particular company did, they integrated with EIML and real time traffic data. So, they have a control tower, they integrated the control tower with EIML model and real time traffic data. Then that control tower optimizes the delivery routes and schedules. So, they are using optimization technique, they are taking the real time traffic data as well as they are using EIML model to make sure that delivery is happening on time and schedule is maintained. It considers factors like traffic, weather condition and order volume to ensure on time deliveries while minimizing the fuel consumption. For example, it can read out trucks to avoid traffic jam or road closure. So, this control tower which has EIML integrated and real time traffic data is given as an input, the control tower will tell you if there is a traffic, how to avoid that, if there is road closure, how to avoid that, what would be my alternate route, so that I can meet the schedule and reach to the customers location on time. Through data analytics and visualization tools, the control tower offers real time visibility into the location and condition of all shipments. So, I can have a better visualization tool in the control tower and I can give real time visibility about the location of the truck as well as condition of the shipments within the represented truck. The dispatchers and customer service teams can track shipments. Suppose I am dispatching on product from one location to another location, I have another customer service team who can actually track the shipment where it is located, what is the condition of the shipment and it can provide accurate delivery estimates to customers and address inquiries properly. Suppose one customer is complaining why my products have not reached to my location, then you can quickly see the control tower and find out where the truck is located, why there is a delay and what is the condition of the shipment within the truck, all can be easily captured through the control tower and then you can quickly pass this information to your customers and give them the exact location and exact condition of the shipment. So, now let us take another example of control tower, another use cases. So, in this case I am taking example of paint manufacturing company with a diverse range of products, colors and packaging option. So, how they have used control tower and how that control tower benefited that organization we will see. The company operates multiple production facilities across the country. So, they have production facilities located across the countries east, west, north, south to meet regional demand. They face several complex challenges in central planning and production. So, their challenge is related to the planning and production. Managing inventory across various production facilities and distribution center is complex. So, since they have multiple production facilities, they have multiple distribution center, how much inventory should they keep at these production facilities as well as distribution centers. So, that they have optimum level of inventory. If I have more inventory, then I have to pay more inventory holding cost. If I have less inventory, then I will lose the demand. So, sometimes I may have over stocking, sometimes I may have under stocking. So, I need to balance this both and find out what should be my optimum level of inventory in this production facilities across different regions and which is very complex. So, how to do this? And then what are the other challenges? Coordinating production schedules and resource allocation across multiple facilities while maintaining quality standard is a difficult task. So, first I need to find out what is the optimal level of inventory across different production facilities and across different distribution centers. So, that my under stocking and over stocking cost is minimized and customer satisfaction is improved. I also need to coordinate the production schedules and resource allocation across multiple facilities because I have limited resource. So, I need to coordinate production schedules, I also need to allocate resources across multiple facilities. So, that I can maintain quality standards and get good quality output and overall production becomes efficient. Then sometimes suppliers and production facilities may experience lead time variations. Like some suppliers give you the product at a lower lead time, some suppliers may give you the products or raw materials with high lead time, but I need to have the raw materials with me, so that my production schedule is maintained. So, then how can I coordinate with the suppliers? How can I coordinate with the production facilities? So, that my production timeline is maintained and my efficiency of production facilities is increased. So, to do this, this particular company use control tower, it provides real time visibility into production and inventory levels at all the facilities. So, if I have multiple facilities located in multiple regions, I know exactly at which facility, at which region, at what at which DC, how much inventory I have, I will get the complete visibility using this control tower. Then production managers and planners can collaborate. So, there is production manager who are in the shop floor, there is planner who is sitting in the head office, they can collaborate and make informed decision to address production issues, such as equipment breakdown, if some equipment is broken down, then what should I do? If there is a material shortage, if the supplier has not given you the products or components or raw material on time, what should you do? And adjust production schedules in real time. The control tower extends visibility to suppliers performance and raw materials availability. So, it not only limited to your company, it is also giving visibility to suppliers performance and availability of raw materials at supplier side. It can automatically adjust production plans based on real time information about raw material availability or lead time change from supplier. Suppose, suddenly there is change in lead time from the supplier, it will take more time to deliver the raw material to you, then automatically the production plan is adjusted. So, these were the few advantages of control tower and we have discussed few use cases, there are multiple such use cases of supply chain control tower. So, in the last few slides, we have seen various use cases of supply chain control tower. So, now, let us see various capabilities it has. So, first of all, it helps you to give real time visibility. If you have a supply chain control tower with you, you will have end to end visibility at a real time. It also helps you to integrate data from different sources of supply chain. It also helps you to automate different processes. So, if you have supply chain control tower, it will help you to automate various processes. It analyzes the data and gives you insights which are valuable to the organization. It has the capability of forecasting, both demand forecasting as well as supply forecasting. It also helps you for production planning and control. So, as we have seen in one of the use cases, suppose you have various factories located across various regions and I want to find out in which factory how much quantity should I produce, in which DC how much quantity of inventory should I keep, so that my customers demand is satisfied. However, the inventory holding cost is minimized. So, I should not have overstocking. I should not also have understocking. It helps you, the supply chain control tower helps you to optimize the inventory at various DCs. It also has the capability of exception management. So, let us take this example. Suppose, one of your truck is traveling from distribution center to customer's location and it is carrying finished goods which customers require immediately and the usual route which the truck takes is having blockage. So, the truck cannot move ahead. So, if you have supply chain control tower, the control tower will get notification that the road is blocked. If you have supply chain control tower with you, it will automatically reroute your truck and reaches the customer's location at a quickest time. It also has performance monitoring and KPI tracking system. So, what it does? It monitors the important key performance indicator matrices continuously. So, if you have supply chain control tower, you will be able to track your main KPI all the time and you will have better visibility. If sub KPI is not performing well, you will be able to track it and find out the reason. It also has decision making support system. So, it not only has the visibility and traceability power, it also gives you the power of decision making on a real time basis. Then what are the important benefits it has? It helps you to improve service level. It helps you to minimize the overall cost. It also tries to maximize revenue. It increases efficiency. So, if you have supply chain control tower with you, it will do all of this. It will minimize the cost, maximize revenue, maximize efficiency, maximize service level. It will also help you to collaborate in a better way with different supply chain partners. And one of the important part is compliance and governance. If you have supply chain control tower, it will help you to maintain compliance. If there is some regulatory requirement, then it will make sure that you are following the norms and regulations. If you do not follow debate permit, it will give you some signal. It also helps you to do continuous improvements. Since you are having real time visibility and you are continuously tracking some important KPI, so if you have supply chain control tower, it will help you to improve continuously and your efficiency will improve. Your overall supply chain performance will be improved. Then it also has the capability to respond fast in disruption. So, let us say at supply location, some disruption happens and supply is not able to supply the raw material which you need for production purpose. So, if you have supply chain control tower, automatically it will take a decision and it will find out who should be alternative supplier. So, that supplier can gives me the raw material which I require, so that my production is not halted. So, these were the various benefits of supply chain control tower. These are the main benefits. There are different kinds of benefits. What are the benefits which are important? We are discussing over here. And these are the important capabilities a supply chain control tower is having. Now, let us see what are the different kind of technologies we require to develop a control tower at the same time to maintain the supply chain control tower for a long term. So, first thing we need data integration platforms such as ERP system, WMS system, TMS system, IoT sensors, GPS tracking device. So, if you have all of these data integration platform, it will help you to collect data from various sources. So, therefore, if you want to build supply chain control tower, you make sure that you have these technologies, so that data can be collected from various sources. Then I need technology related to collaboration and communication. So, if you have technologies which helps you to collaborate and communicate, if these kind of platforms are there with you, it will help you to facilitate seamless communication and information sharing among supply chain stakeholders. So, for better planning, communication and collaboration, we need these kind of technology which will help me to communicate and collaborate in a better way across different stakeholders in the supply chain. Then we need blockchain technology. So, if you have this technology, it enhances transparency, it enhances traceability and security in supply chain transactions and data exchanges. Then we need data analytics and visualization tool, because one of the capabilities of supply chain control tower is it can take decision automatically on a real time basis. So, to take decision automatically in a real time basis, I need some good data analytics tools and technique, good data visualization tools, so that I can take this decision. If I do not have data analytics capability, I would not be able to take decision. So, therefore, I need dashboard which will give me visualization of what is happening, visualization of important KPIs, I will be able to monitor on a real time basis. Then I need AI and ML algorithms, because these are the algorithms which will help me to predict for the future, what will happen in future, what will be the demand, what will be the supply. If some disruption happen at supply location, what should be my alternative plan? If truck is broken down on the road, what should be my alternative plan? How much inventory should I keep at DC? How much inventory should I keep at factory location? How much raw material should I keep at factory location? What should be the optimal production plan? So, all of this can be calculated if I have AI ML and optimization algorithm. So, if you want to develop better supplies in control tower, you need to make sure that you have a dashboard which gives you better visualization of the data, important KPIs, you have AI ML algorithm integrated with it, you have optimization algorithm integrated with it, so that it can take decision automatically and in a analytical way. Then I need cloud infrastructure. So, it provides real time access to information from anywhere, anytime and support collaborative workflows among different teams and partners. Since I need to collaborate with different partners situated at different countries, different location, different region, different time zones, so I need good cloud infrastructure, so that anybody can collaborate with anyone, anytime and I have real time access of information from anywhere in the world. So, therefore, if I have good cloud infrastructure, I will be able to do. Moreover, the amount of data which are being generated now, I need good cloud infrastructure to store it, because most of the decisions will be taken based on the data. So, if I have huge amount of data, I need to store it first to take the decision. So, if I have cloud infrastructure, I can store this data and then if I have cloud computing facilities also, I will be able to do AI ML optimization algorithm in the cloud and we will be able to take decisions out of it. So, these are the important technologies which we require to develop a solid supply chain control tool. These are the few list. So, now we have understood what are the various technologies required to build supply chain control tower, what are its advantages, what are the benefits of having supply chain control tower. We also have seen some huge cases from supply chain and operations management point of view. So, with this we will stop this lecture and look forward to seeing you in our next video. Thank you so much.