Agenda - Indian Institute of Science › ~nv › 72EmergingMarketSCNs13012012.… · Workshop on Network Science in EECS c ellence Agenda zEmerging Market Networks zSupply Chain Networks

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Emerging Market Network ChainsN. Viswanadham

Indian Institute of ScienceBangalore-560 012, India

January 13 2012

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AgendaAgendaEmerging Market NetworksSupply Chain Networks

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pp yEcosystem based Supply Chain DesignApplications: Co-evolution, Risk transmission, BenchmarkingRisks due to Lack Ecosystem Awareness

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yThree applications: Global trade network design, Food Security, Indian General ElectionsConclusions

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Emerging Market NetworksEmerging Market Networks

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What are Emerging Markets?Emerging markets are countries with increasing disposable incomes, large young populations and high-growth, high-potential, and high-risk, markets

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Exc high growth, high potential, and high risk, markets

Infrastructure is weak & Governments attract FDI via Initiatives such as PPP & SEZs. Rural development is largely done by the government.Some EM Countries are on the periphery of

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bal Some EM Countries are on the periphery of industrially advanced continents (Mexico, Eastern Europe) and others are independent production and consumption spaces (China and India)

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Emerging MarketsEmerging MarketsSu

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Emerging Market Networks

Deliver products and services for consumption by the populations (less educated)

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play a big role for product successSocietal & Environmental concerns to be addressedCoordination with both State and Central

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Ecosystem

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eRisks in Emerging Markets

Fast growth with Poor infrastructureMultiple regulations with Ambiguous & Diversified

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p g gimplementationsEasy commitment but Implementation crisisCenter- state government regulatory dilemmaCommunity risk……

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Monitoring and Control of the Execution of the Network events (Governance) is important

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Supply Chain NetworksSupply Chain Networks

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The Supply Chain NetworkThe Supply Chain Network

A sequential network with several actors each t ki t i l i i t f

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upstream, add value and passing on downstreamA very rich subject generally taught under OR.

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Behind every product or service there is a SCN

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Two Kinds of Supply Chain Networks

Local or Indian Supply Chains

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Exc – Products produced and consumed in India

Food, Apparel, auto etc.

Global Supply Chains– Production distributed globally including

India & final consumers are also global

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gAuto components, Apparel, Leather, Dolls

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The Plough-Plate Food Supply ChainSu

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The supply chain/ social network involves Farmers,

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pp ySeed & Fertilizer producers , Banks, Millers, Hawkers, Governments, Mandis, Warehouses, Ration shops, Kirana shops, Railways, Truck Cos, etc.Can India be the Food Basket for the world? Can India be the Food Basket for the world? December 2005. (A very frequently cited report and was reprinted several times by the magazines)

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WebsiteOrder

ProcessingSystem

CustomerConfigured

Order

Industry Supply Chain

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Time ofDelivery

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SuppliersWarehouse

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Assembler

Logistics Service ProvidersGlobal Transportation & Logistics

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Vertically Specialized Global Supply Chain Network

Transport hub Inventory hub

ChinaSu

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Singapore

Malaysia

USA

USAIndia

Demand

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ManufacturingDistribution

Retail

Malaysia

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UK

Europe

Suppliers

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Integrated Manufacturing-Service Networks

Manufacturer

Information Network

Enterprise System or Web-site

Supply Network Demand Network

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Supplier Distributor

Supplier Retailer

Logistics Network

Logistics Hub

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Service Provider

Financial Network

Banks

Service Network

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Flows, Business Processes & Flows, Business Processes & PlayersPlayers

Three Flows: Goods, Information Su

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xc and FundsThree Local or Global Business Processes: Procurement, Manufacturing Distribution

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Network of Six Dominant Players

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The Six Dominant PlayersThe Six Dominant Players

Suppliers

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Contract manufacturersOriginal Equipment ManufacturersDistributors

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They are independent companies globally distributed & highly connected

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Ecosystem based Supply Chain Design

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The Supply Chain Ecosystem

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EcosystemsEcosystems comprise of the networks of comprise of the networks of Companies, Countries and their Governments, Companies, Countries and their Governments, Social and Political organizations, Natural , Social and Political organizations, Natural , Industrial (clusters) and Financial Resources, Industrial (clusters) and Financial Resources, Human resources , Connections, and Knowledge Human resources , Connections, and Knowledge

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, , g, , gof the industrial environment, interacting of the industrial environment, interacting together with the landscape ( Vertical space) and together with the landscape ( Vertical space) and Climate (Economic & Industrial)Climate (Economic & Industrial)

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Logistics & IT companies 

Infrastructure, FIIPorts, Airports, Roads 

Customs , Export, FTAs & Other Govt. Regulators

INSTITUTIONS

Quality Control & Environmental Issues

Social, Financial & Trade issues

SUPPLYCHAIN

ECOSYSTEM

DELIV

ERY  SERVICE 

INFRA

STURE 

Logistics Parks, SEZs, Freight Corridors

TransportRail, Air, Ship, Road 

RESOURCES

Industry Clusters

Human, Financial & Natural  Resources & labor  productivity and 

Unions

INDUSTRY VALUE CHAINS

Retail Chains Distribution Manufacturing Suppliers

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Global Indices Global Indices

The Global Competitiveness Report

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Exc The Global Competitiveness Report

Global Information Technology Report Investment ClimateTrade Logistics IndexGlobal Retail Development Index

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pCountry Based Not Vertical Based

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ApplicationsApplications

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Virtuous Co-evolution.Product and process modularization had led to outsourcing to low cost countries. Countries liberalized their economies and reduced the tariffs to encourage outsourcing

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Exc to encourage outsourcing.

The logistics content in manufacturing has increased by 50%. – Ports, Airports have been developed for transport of

people and also freight– Trade facilitation helped rapid processing of goods transfer

across the borders.

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bal – Trade financing through LCs boomedContract Manufacturers & Third party logistics providers have sprung upGlobal Supply Chains have proliferated

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GSNs as Risk Transmitters & Amplifiers

The same factors that contributed to the efficiency of GSNs have turned as Risk factors: International Logistics, Internet,

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Exc have turned as Risk factors: International Logistics, Internet,

Credit through LCsThe cause of the global crisis is clearly financial. – Credit squeeze has throttled the B2B business– Demands fell and this caused synchronized decline of orders

Suppliers were starved of business – Countries became protectionist

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p– CMs and 3Pls had no business

Synchronized decline in trade has enhanced fears of Globalization

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Sudden and SynchronisedSudden and Synchronised

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Trade flows dropped by more than 20% from 2008Q2 to 2009Q2. The synchronization was due to the connectivity of global supply chains that reacted “just in time” to the collapse in demand

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Ranking of Indian StatesSu

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Benchmarking Indian Food ChainEconomic Integration

Economic PoliciesTrade TariffsPackaging Duties High Protectionist

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Resources &

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FOOD SUPPLY CHAIN

No Cold Chain Abundant

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Product & Value Chain Innovation

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Resources Management

Supply ChainProduct Offering

Information TechnologyNo Supply Chain Visibility

Too many intermediariesFew Processed Products/Labs

Inefficient and Fragmented

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Lack Ecosystem Awareness Can Lack Ecosystem Awareness Can Affect the Company or CountryAffect the Company or Country

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Organized Retail runs into stiff opposition from vested social Groups

Reliance Fresh outlets ransacked in Orissa

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CM Mayawatiordered shutdown of Reliance Fresh StoresHawkers Demonstrate Before Metro

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Bangalore Wholesalers Protest against MCC

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Dr Hans_Joachim Korber, Chairman and CEO, Metro AG,

at the opening ceremony of Metro Cash & Carry Distribution centre in Bangalore on Monday

Oct20, 2003

Bangalore Traders Action Committee and Swadeshi

Jagran Manch activists protesting against opening of

Metro centre at APMC Yard

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nce Tata Motors a case point:

•Land acquisitions for j t f b t 920

Location Decision: Conflict with Farmers

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Exc projects of about 920 acres

were stalled by protests launched mainly by farmers •Wicked Problems

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A Global Supply Design A Global Supply Design ExampleExample

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Vertically Specialized Global Supply Chain Network

Transport hub Inventory hub

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Supplier

RetailStore

DistributionCenter

Supplier

Singapore

Malaysia

USA

USA

India

Demand

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ManufacturingDistribution

Retail

Malaysia

UK

UK

Europe

Suppliers

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eProblem StatementProblem Statement

Let S1, S2,…, SN, be N stages of a supply h i

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Let A1, A2,…, AK, be K different FDI/outsourcing alternatives associated with each stage.A 0-1 strategy is obtained by choosing

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exactly one alternative for each stage. sil = 1 if for stage i, alternative l is chosen, sil = 0, otherwise

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Objective: Minimize the Total Landed CostObjective: Minimize the Total Landed Cost

Distance Shipping Cost

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Processing

Total Time (Freight + Ports)

Trade-Related Costs

Inventory Cost(In-Transit)

Total Landed

Cost

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Resource Uncertainty

Inventory Cost(Safety Stock)

Product Cost

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eCosts considered in the Base ModelCosts considered in the Base Model

Inventory costProduction cost

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(i,l) Stage i with alternative l

Transport mode 1

Transport cost correspondingto various mode

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(i,l) (j,m)

Transport mode 1

Transport mode 2

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Model for Single Product Scenario Model for Single Product Scenario (Base Model)(Base Model)

Number of days of inventory that need

to be held

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Exactly one mode of transport is chosen

Sum of % of demandsourced through

various alternatives equals 100%

Inbound lead time of alternative m

for stage j is at leastthe outbound lead time

of alternatives and stages that it is dependent on and

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G - Supply chain G, A(G) - Arcs (dependencies), D – demand, PLS – Production lot size, TLS –Transport lot size, IHLS – Inventory holding lot size, PC – Production cost per lot, TC – Transport cost per lot, IHC- Inventory holding cost per lot, PLT – Production lead time, OLT – Outbound lead time, ILT -Inbound lead time, TT – Transport time, - smallest integer greater than x, y, ILT – Decision variables. PLS is equal for all stages and divides IHLS and TLS.⎡ ⎤α α

transport time from them

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eTax Integrated Model (TIM)Tax Integrated Model (TIM)

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N. Viswanadham and Kannan Balaji, A Tax Integrated Approach for Global Supply Chain Network Planning, IEEE Trans on Automation Science & Engineering, Vol.5,No.4, Oct 2008,

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el Food Security NetworkFood Security Network

Service Science and Engineering & STERM models, Agenda for the Third

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upp Service Science and Engineering & STERM models, Agenda for the Third Service Revolution in India, Report to SACPM, July 2010

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eWhat Is Food Security?

The World Food Summit of 1996 defined food security as existing “when all people at “when all people at

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y g p pp pall times have access to sufficient, safe, all times have access to sufficient, safe, nutritious food to maintain a healthy and nutritious food to maintain a healthy and active life”. active life”. Thus food security implies both physical and economic access to food that meets their

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dietary needs and food preferences.

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Current Efforts by the Government and NGOs

The Government has launched several initiatives– Public distribution scheme– The mid day meal program for school children

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xcel The mid day meal program for school children

– National rural employment scheme (NREGAS)– Food security Bill Just approved by Union Cabinet

Millions of hawkers in all major cities are self employed and serve the needy cause of Urban poorAkshaya Patra reaches out to 1,281,664 children in

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upp y , ,8,208 schools in 18 locations across 8 states of India, providing them with freshly cooked meal packed in stainless steel containers. Other efforts exist in Other states of India

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Food Security : To Serve 100M Urban  PoorFood Security : To Serve 100M Urban  Poor

Vocational Training using Government programs 

Kitchen

Mid Day Meals

Households

Hawkers

Consumers 

Processed Food 

Products

Meat & Diary

Grains(PDS)

Distribution Center

Distribution Center

Kitchen

HawkersGPS

Meat & Diary Products Distribution 

Center

Control Room  on Cloud Control Room  on Cloud 

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Governance of Food Security SystemIndustry 

CEOs/Technology Officers

Restaurant Chains

Government

City Governance Advisory Board

Business Development

Executive Director

Quality Control Board

Manager Sourcing

DataMonitoring & ExecutionCall Center

Stakeholders

Manager Services

M

PDSMeat

Diary Vegetables and Fruits

ICT Hygiene, Quality

Waste Management

Vocational Training

Manager Food 

Preparation

Warehouses

Kitchens

Food Processing

Manager Distribution

Hawkers School

Food Courts Transporta

tion

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e Orchestrating Orchestrating the World’s Largest the World’s Largest Democratic Activity: The Indian Democratic Activity: The Indian

GeneralGeneral ElectionsElections

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Agenda for ORMS PractitionersAgenda for ORMS Practitioners

N Viswanadham, S Kameshwaran, Somya Saxena, I V Subba Rao

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Informs 2010, Austin, Texas, USANov 9, 2010

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The electoral process endeavors to The electoral process endeavors to deliver free, fair, electionsdeliver free, fair, elections

The General Elections in India is the largest democratic election in the world.

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xcel In the 15th General Elections conducted in 2009, 714 million

electorate used 13,68,430 electronic voting machines in 8,28,804 polling stations around the country to elect 543 members. The election was conducted in five phases, spanning over 50 days to trade-off the security versus logistics of this massive

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upp event. Around 4.1 million civilian staff members and 2.1 million security personnel were deployed and transported using 119 special trains. The total budget was INR 1,120 Crores ($250M)

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eIndian Sub Continent Indian Sub Continent

• 28 States• 7 Union Territories

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• 1.2 billion people• 800,000 Villages• 364 Political parties• 6000 Candidates

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• 13,68,430 EVMs• 8,28,804 polling

stations

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Electoral turn outNumber of Political Parties & Candidates

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Voters Candidates

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ElectorateParties

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StationsDuration and number

of phasespl

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Phases

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Days

Social Groups

Political PartiesGovernments & 

Judiciary 

Institutions

Election CommissionMedia & Social 

Groups 

Voting Lists & Announcing To Citizens

ElectionsEcosystem

Service Chain Visibility

Storage, Security

Delivery  ServiceInfrastructure

Resources

Volunteers For Conducting Polls & 

Training 

Security Management ‐‐Police & Border   

Political Parties & Candidates

Announcing To Citizens

Voting Booths & EVMs, Counting

Security Forces

Election Service Chain

Counting & Results Declaration

Secure Storage of EVMs

Conducting Polls

Nominations & Schedules

Election Service Chain Formation

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eSTERM ModelsSTERM Models

Science: Political science, Democracy, Governance, Constitution, Project management, Risk, Ethics, Law

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Blogs, Face book, Electronic voting, storage, Media, Ink

Engineering: Polling boxes, EVMs, Advertising,

Regulations: Pre, during and post poll behavior, Media, Citizens, Volunteers, Political parties, role of courts, Exceptions

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Management: Information, Material , Personal and Process management, Governance, Dealing with exceptions, Innovations, Performance measurement

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Indian electionsIndian elections

Complexity of the Indian elections given its size and scale is understandable.

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– The scheduling of elections is constrained by the availability of the border security force.

– More social responsibility by the political parties, Citizens and the officials can save time and money

Systematic methodology development with li d d l ili b h

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upp streamlined , modular , resilient processes by the Academic communities could help other democratic countries as well

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eConclusionConclusion

Future Emerging market Networks are to be socially responsible, environmentally friendly and audio-

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p , y yvisual technologically advanced collaborative company networks delivering high quality products at affordable prices to aware customers.GRIP Framework for design of EMSCNsModels are often wicked and require

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mathematics + …..

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