The document discusses supply chain governance and changing times. It covers the following key points in 3 sentences: Recent technology trends like mobile internet, IoT, 3D printing and driverless cars are disrupting traditional supply chains. Governance of future supply chains will involve adaptive digital networks that can select partners, coordinate tasks, and respond to uncertainties. The document proposes a framework for supply chain governance that uses big data, sensors and algorithms to monitor partners, coordinate plans, and ensure execution for each customer order.

1. Supply Chain Governance in
Changing Uncertain Times
N. Viswanadham
Computer Science and Automation
Indian Institute of Science
Bangalore- 560012
n.viswanadham@gmail.com
Feb13, 2015
5th Annual Manufacturing
CIO Summit

2. Contents
 Risk & Volatility in SCNs
 Recent Technology Trends
 What is the Take away
 Design of Future Supply Chains
– Governance
– Partner Selection, Coordination & Execution
 Conclusions
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3. Risk & Volatility in SCNs
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4. Risk & Volatility in SCNs
 Modern businesses are globalized, interconnected &
interdependent, both vertically and horizontally.
Volatility is the new norm in supply chains.
 These networks face risk from partners, partner ‘s
partners & Governments.
 Disruptions and Disasters happen : Resource shortages,
Longer multimodal routes, Customs & regulations, Port
congestion, Quality, Safety & Environmental
compliance, Weather & Natural disasters, Terrorism,
Political and/or economic instability, Exchange rate
fluctuations, etc
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5. Drop in Oil Prices
 Drop in oil prices is good for importing countries:
China, India etc
 Disastrous to the exporting economies
 Causes for fall in Oil prices
– Rise in unconventional oil (Shale , Sand) & Bio fuel production.
– Decline in oil intensity in China and Germany
– OPEC trying to maintain market share rather than oil price
 Shale gas is not economical below $60
 Global businesses partnered by Oil rich Countries
may crash
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6. N.Viswanadham

7. Political Changes
 New Government in Centre, States
 New Initiatives: Make in India, Digitization, Smart
Cities, Good Governance, Affordable housing, etc
 Relationships with Foreign countries
 Eight ordinances in 225 days : Land acquisition act,
FDI in insurance , Facilitating coal auctions, lifetime
Indian visas for persons of Indian origin, etc.
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8. Equities Surge to Record Highs
Rupee vs. US$
Sensex & Foreign Purchases
of Indian Equities
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9. Recent Technology Trends
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10. Technology Changes
 Mobile Internet
 IOT
 3D printing
 BitCoin
 Drones
 Driverless Cars & Trucks
 New start ups: One a day in Bangalore: Uber, Ola Cabs,
Doctorie.com, MGaadi, Dosa King, Mobile apps, ..
 Cyber security: Estimated annual cost of computer crimes in
US— phishing, identity theft — is presently at over $100 B.
 New technologies emerge not from new discoveries but from
the recombination of existing technologies into new systems.

11. Mobile Technologies Drive a Trillion-
Dollar Impact
 Mobile Companies invested $1.8 trillion in infrastructure & R&D
from 2009--13 & generated in 2014, $3.3T revenue &11 M jobs.
 3 B connections now (3G ,4G) & projected to 8 B by 2020.
 Mobile has been a driving force for the success of Apple,
Google, China Mobile, Alibaba, Facebook, and Verizon which
have grown 35 % annually in revenue.
 Mobile has become a growth engine for several countries,
contributing about $1.2 T in GDP (2 - 4 % GDP for some
countries & 11% for South Korea)
 Major waves of innovation are on the way
– mobile will be the supercomputer in our pockets interacting
with smart objects on our person, in homes & in our offices.
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12. Game Changing Disruptive Innovations
 Ecommerce is disrupting traditional distribution.
 Uber and Ola are upending radio and yellow taxis.
 Airbnb has hotels very concerned and Bitcoin is future currency
 Robotic doctors are a reality, a solution to doctor shortage
 Amazon , Alibaba and DHL are testing package delivery drones.
 Driverless cars are a boon in traffic congestion & bad drivers
 Flipkart, Amazon, Ebay.in, Snapdeal, Shopclues, Myntra,
Yebhi, Tradus, Pepperfry , Homeshop18 are on rise.
 BigBasket.com, ZopNow.com, EkStop.com , LocalBanya.com
are competing with their own brands for fruits, vegetables, rice.
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13. Rise of Algorithmic Governance
 Rise of the Machine Reporters
 Digital Chef: An algorithm sorts through hundreds of
thousands of recipes & comes up with one to our taste.
 An Algorithm is on Board of Directors of a Venture Capital
Firm Deep Knowledge Ventures with voting rights
 GE can predict failure of gas turbines weeks in advance
(IOT) no need for scheduled or reactive maintenance
 In Retail, focus is shifting from Sales & Marketing to
Predictive Analytics using Industry Knowledge, Consumer
preferences, Social media analytics & Recommender systems
 Machine Intelligence substituting Human Brain
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14. Cognitive Factories
 In cognitive factories, human beings, machines, robots,
AGVs and other resources communicate with each other.
They have collaborative decisioning capabilities
 Smart products know the details of how they were
manufactured and how they are intended to be used.
 Smart Products answer questions such as Which
parameters should be used to process me? , When
should I be made? , Where should I be delivered ?, etc.
 The factory can orchestrate the manufacturing process
depending the real time needs.

15. Big Data in Logistics Applications
 Trucks are equipped with radio transmitters and GPSs.
Vehicle Tracking and Dispatch keeps track of the location
and inventory on every vehicle.
 Firms use data from sensors—monitoring fuel levels, location
and capacity, driver behaviour, etc. For optimization.
 Annual traffic density figures are used to generate the most
efficient routes to minimize the cost of transporting goods.
 Warehouse Operations and Cross docking use information
system that dynamically coordinate trucks & the dock
 Generation of routes and manifests for the trucks dynamically
based on their inventory loads and tracking & monitoring the
delivery.
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16. Augmented Reality in the logistics industry
 Augmented Reality (AR) is the
expansion of physical reality by
adding layers of computer-
generated information .
 Information could be any kind of
virtual object or content,
including text, graphics, video,
sound, & GPS data.
 AR is a new type of real-time
natural user interface for human
interaction with objects and
digital devices
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17. Test tube Baby Production Factory
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18. Trillion Dollar Club
 Over the past decade, six technology-led companies Amazon,
Apple, Face book, Google, Netflix, and Pandora have
collectively generated more than $1 trillion market value
 Nokia, Motorola, Borders, Barnes & Noble, AOL,
Blockbuster, Tower Records, and HMV—lost more than
90% of their 2003 enterprise values.
 The common denominator of the business models of the
Trillion-Dollar Club: the digital information that surrounds
the product and company (the virtual self), can generate more
value than the physical entity alone.
 Companies need to master the new rules of the digital
economy to win.
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19. What is the Takeaway
 Same product is sold by two retailers: One is able to sell other
goes bankrupt
 Same brand is manufactured in two countries, it make profit in
one and losses in another
 Decision making once in the hands of humans is now done by
machines using wireless sensor networks
 Digital upstarts are threatening bottom lines, growth prospects
&business models of traditional service providers
Digitization, Consumerisation, Governance &
Labour productivity make the difference
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20. Black Swans
 Nicholas Taleb introduced the Black Swan Theory in his
book: “Fooled by randomness”.
 The “black swan” are high impact events unthinkable based on
past information.
 The impact of such events can be either positive or negative.
– Positive black swan event has favourable consequences like the
discovery of a new Vaccine, Internet, Mobile phone.
– Negative black swan events come with catastrophic consequences : the
economic crisis or September 11 attacks or Tsunamis or Oil Price drop
 The world is more random than it is commonly assumed and
our understanding of it is even more deficient.
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21. Design of Future Supply Chains
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22. Adaptive Digital Supply Chains
 Supply chain are inter-organizational networks
collaborating to deliver high value products and
services under normal conditions and also adapt and
respond to changing customer requirements and
environmental uncertainties such as
– Market, political and economic conditions
– Innovations &disruptions in Resources and Technologies
– New business models: Omni Channel Retail, Mobile Sensor
networks in logistics, Combinatorial supply chain
innovations,...
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23. N. Viswanadham

24. Supply Chains
DeliveryServicesInfrastructure
Resources
Institutions
The Basic Ecosystem
Investment Climate
Co-Evolution, Conflict, Risk Propagation

25. Governance: Partner Selection
Coordination & Execution
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26. Governance Functions
 Governance concerns the exercise of authority, direction,
control and management
 Identifies and manages relations with government, trade &
social groups, labour, resources and B2B and B2C delivery
 Builds systems for effective communication, collaboration and
coordination among the network partners
 Identifies the risks from various ecosystem sources and puts in
place risk mitigation strategies in operational readiness
 For every customer order, selects the partners, allocates the
tasks and responsibilities & forms the network .
 Manages a control room for monitoring and execution of the
planned activities in a timely manner
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27. Governance: Partner selection,
Coordination & Execution
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Other
Agencies
Coordination
Partner Selection

28. Partner Selection
 Partner selection based on Current State of Ecosystem
– Innovations in products and processes
– Business friendliness of supplier location
– Locations of plants, customers & transportation lanes
– Asset specificity, capabilities, Depth & Width of ties ( Govt.,
cluster managements, etc.)
– Alerts of natural disasters, strikes and protests, infrastructure
failure, etc.
– Digital efficiencies of the suppliers (Traceability) and 3PLs(
AR, GPS, Tracking )

29. Coordination
 Coordination brings different organizations into a
harmonious relationship.
 Coordination involves: For every order,
– selection of suppliers : Identifying product specification,
technology , tolerances and process standards and the
production schedules;
– Selection of logistics players, determining their delivery
schedules , etc
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30. Execution
 Monitors the flow of goods and services for each
order as per the coordinated guide
 In case of a malfunction or failure takes appropriate
action to mitigate the risk
 Manages all exceptions through a control Tower
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31. Conclusion
 During the last decade ERP, CRP etc analyzed
internal data – sales, shipments, inventory, etc .
 Now companies need to analyze external data to
gain insights into customer fancies, markets, partner
ecosystem and possible risks & consequences, etc
and design an adaptive SCN
 Our framework enables such a design. Technology
plays a Major Role
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32. N.Viswanadham
Orchestrator Business Model
Supplier Contract Mfg 3PL
Execution
Supplier Contract Mfg 3PL
3PL
3PL
End Customer
Material Flow
Operational
Status
Plans
Payment
Planning, Coordination and Overall Responsibility
Orders
Orchestrator

33. China Wants To Build a Rail Line to USA
Big Data Public Lecture N. Viswanadham
'China-Russia-Canada-America line' would run for 13,000 km
across Siberia and pass under Bering Strait through 200km tunnel

34. Self driving car
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The car is equipped with a battery of cameras, radar, and
sensors that give the car a 360° knowledge of the surrounding
environment and allowing it to react proactively to obstacles.