Supply Chain - "DevelopED Nations VS DevelopING Nations"

Is there any difference between supply chain between the developed nation like USA and developing nation like India? Of-course, there are lots of differences. The differences are in terms of flexibility, speed, innovation, the way the supply chain is designed etc..,

The major difference between the two economies is the GROWTH. India is growing in a faster rate when compared to USA. The GDP growth rate of India is 6.1% YoY. In case of USA is only 1.6% YoY. But the real GDP of USA is US$14.5 trillion and India is only US$1.73 trillion. USA market is almost reached the saturation point. Per capita income of USA is greater than India. Here, we can see the contradictory things. They are high per capita income versus slow growth rate and low per capita income versus high growth rate. So, obviously the supply chain approach is different for these two nations USA and India.  Source: http://www.tradingeconomics.com/

In case of USA, if the company wants to make money or to increase the margin, reducing the price of the product or cost cutting in the supply chain doesn't make any sense. The customers in the developed economies always seek for some innovative products that make some difference in the way they are living. Their main concern is no money. Their main concern is about the availability of brand new product. So, the supply chain in the developed nations should be agile enough to meet the demand of the customers. The supply chain should be efficient. 

Suppose, let’s take an example a brand new tablet enters the market. Customers want that tablet and the demand is so high for the tablet. At that time, if the company things of reducing the cost in supply chain, it will lead failure in meeting the demand. The company should think of how fast I can provide my new product to the customers. The customers are also willing to pay a premium for the new product. The only way for the company to make money is by charging more money to the customers by increasing their margin in case the demand is not high. But, in the above case of tablet, the demand is high and also the people are willing to pay a premium. The company will be beneficial if they increase the price and it ultimately leads to increase in the bottom line.

In case of India, the majority of the population always looks for a low cost product. The challenge for the companies in India is how they are going to provide products at low cost. Economies of scale play an important role. Apart from it, the other way of reducing the cost is by supply chain activities i.e., starting from the procurement of raw materials, logistics and distribution channels. In contrary to the developed nations, the bottom line can be increased not by increasing the price but by increasing the quantity of goods sold in developing nations.

Another important challenge the developing nations facing is predicting the demand. In case of developed nations, they don't have much difficulty in predicting the demand when compared to the developing nations. There are various reasons behind it. The most important thing is developed nations are technologically advanced. Everything is computerised and each and every activity that is happening in nook and corner of the supply chain are electronically recorded. They have inch by inch information about the business. In case of developing nations, nevertheless the technology is in developing stage.

Another important reason for the efficient supply chain in the developed countries is their transportation facilities. They have well laid roads, railways and frequent air transport. Developing nations are still lagging in it. 

"Supply Chain Changed"

SCM is one of the areas in an organization where about 60%-65% of money flow. In a typical supply chain there is always tradeoff between cost and delivery of the products. But in the current uncertain market scenario, cost and delivery of products won’t create any competitive advantage to the organization. Supply chain should be ‘agile’, to cope with the mismatch between supply and demand. And also an effective supply chain should be adaptable to the market condition. 

Supply chain of an organization should be adaptable to the fluctuations and uncertainties. The organizations should be flexible enough to change their supply chain strategy to meet the uncertainties and fluctuations. To be effective in supply chain management, an organization should align their interests with the customers and suppliers. 

Supply chain strategy depends on the type of product in which the organization is handling whether it is a functional or an innovative product. If it is a functional product, the organization should use the efficient supply chain i.e., it should focus on reducing the lead time unless it doesn’t affect the cost. If it is an innovative product, the organization should use the responsive supply chain i.e., fast enough to meet the demand.

Let’s see some of the examples for functional and innovative products. For functional product take the example of soft drinks (Pepsi, Coco-cola). These soft drinks are fast moving items. They should be in each and every shop whether it is a local kirana store or any big mall. It should be available in all the places. The reason behind this is people need them. Suppose I'm travelling in any rural area and suddenly I want to drink some soft drinks and I approach a store and asking for a soft drink of any brand. If the brand is not available in the shop, what will I do? I'll ask for some other brand and I'll quench my thirst. The supply chain of the soft drinks should be effective and make sure that it should be available in all the shops. At the same time, supply chain should be cost effective. Because replenishment of stocks will happen every day in each and every shop. If it is not cost effective, it will increase the operational cost and ultimately affects the bottom line.

For innovative products like Apple ipads or iphones responsive supply chain is the best. Ipad is an innovative product. It is new to the market. People are seeing the product for the first time. Demand for those products will be high. If the company can't meet the demand then it will lead backlog. Backlog is loss to the company. The supply chain should be fast enough to meet the consumer's demand. Another important thing here is the company should be good in forecasting the demand. If the forecasting is sceptical, it affects in both the ways i.e., it may lead to lots of inventory or backlog. Organisation should be conscientious about predicting the demand.

Reference: "Marshall L.Fisher, What is the right supply chain for your product? HBR, Reprint 97205"
                            "Hau L.Lee, The triple-A supply chain, HBR, page 102-112"

"Increase Your Visibility Through Internet Marketing"

Source of this picture:http://www.newyorkmarketingagency.org/wp-content/uploads/2012/01/Online-Marketing-New-York-City.jpg

If GOD comes in front of us and asks for a boon, many of us say "I want to be rich", "I want to go to moon", "I want to live 1000 years", "I want always to be young" and the list goes on. In that list, some of us will say "I want to be invisible". In this post, I'm going to write about "VISIBLENESS".

Zillions of things, Billions of people, millions of companies are there above the earth. How many people know about you? If you own a company, how many people know about your company? Only a few people and company will say millions of people know about me and my company. What about the rest?  They say "I don't know". It doesn't mean that the rest of people don't know the answer. They have an answer and that answer is 100% right. But, not up to the mark. Most of the time, it fails.

Those who know the meaning of the word 'internet' know what ‘GOOGLE’ is. It becomes a habit for everyone that if we want to know about something we search through Google. Whatever it is, it may be a word or person or company. We use Google. There are about 1 billion searches are done in Google. 


The real fact is lot of products, companies are available in the market. The bargaining power of the buyers is high. The buyers have choices. Unless and until the company or the product or the person position themselves, they won't get sold. I'm not going to talk about "Positioning". Before doing positioning we have to create awareness about the product or service among the buyers. How do the people know about the product or the service? How to bridge this gap? Internet marketing bridges this gap (between seller and buyer). 

Internet itself is another planet. There are various methods of doing internet marketing. By considering the current scenario, the most effective way to reach the people is "Social Media Marketing" i.e., creating traffic in your website through social media networks like Facebook, Twitter, Blogs, YouTube, LinkedIn etc.,

Each and every social media networks have their unique features, unique target segment and they offer unique benefits to each unique target segment. Depends on the product or services these social media networks should be utilized. 

The one thing which is common in all these social networks is creating relationships. Relationship can be created only when there is a two way communication exists i.e., synchronous communication. Sense of belonging can be created when we solve or provide solution or suggestion to others problems. This will create trust among the people. Once we are done with this bonding i.e., relationship through these social media networks. It will become very simple to sell the product or service to the customers because they trust the product or service.

There are various cluster of tools and techniques available like Google analytics (apart from it various services providers are also there), SEO (Search Engine Optimization). Along with this tools and techniques, the social networking sites should act in tandem then only we can see the results.

First make aware about the product or service to the customers. Make it visible. Tell them we also exist. In this commoditized market, the commodity which is top in the visibility will have an edge over the others.

All About Cloud Computing

'INNOVATION FROM THE GRASS ROOT LEVEL'- We are in the era which is transforming from real to virtual. Now, the emerging technology in IT is "Cloud Computing". It opened the way for the virtual space in the technology. The current market size of cloud computing is approximately US$ 40 billion. The future is like the rocket propelling by tearing the clouds against the gravity, the growth curve of cloud computing showing a tremendous upward movement against the current pandemonium in the world economy. By 2020, the size of the cloud computing is around US$ 240 billion.

What is "Cloud Computing"? Most of us know about this emerging technology. A simple example of cloud computing is GMail or hot mail or yahoo mail that we are logging in everyday by having a user name and password. We are accessing our e-mail account and also storing our information in the virtual space. Other examples are, accessing MS office, MS Excel in the online.

Accessing a product which is stored in the cloud and utilizing the services provided by the product through online is cloud computing. 

This cloud computing is very much helpful for the companies which need some sophisticated software. Most of the sophisticated software's prices are high. Some of the companies can't afford it. This cloud computing helps  those companies accessing those software at less cost.

If we want to see the cloud computing in a larger perspective, lets take an example a mechanical Pro-E software cost around 2.5 lakhs per license. For a company which is manufacturing sheet metal components having a very large design team of 20 design engineers. Even though they can afford 50 lakhs per annum for 20 licenses, it seems to be too costly. Suppose if that company goes for cloud computing, they can reduce their cost. There is a great future future for cloud computing.

Some of the companies providing cloud computing are IBM, Amazon, Microsoft, Apple(icloud)......

"Every coin has two sides and every gun has its own tune".

Another major issue with this cloud computing is SECURITY ISSUE. There may be a chance for the companies data hacked by others. This will put that company in greater risk. Suppose if any bank using this cloud computing, what will happen if someone access the data. This not only put the company into risk but also the customers of the company.

If the companies providing cloud computing service having a strong security, then cloud computing will grow in a much faster rate than it's growing now.

Every product and technology has its own life cycle. Cloud computing is in GROWING stage. It will MATURE and it will DIE.

Then??????? Seek for an another advanced technology!@#$%^&*()_+