1. Presented by
Anupam Sharma
TAPMI, Manipal

2.  Latest technologies at use
 Dysfunctional industry practices
 Poor coordination among supply chain nodes
 Too much dependence on Forecasting
 High lead times
 Frequent stock outs
It all boils down to one question:
What is the nature of the demand?

3.  Functional product
 Demand can be forecasted
 Lower contribution margins
 Low product variance
 Less or no clearance sales
 PLC of 2 or more years
 Innovative Product
 Unpredictable Demand
 Higher contribution margins
 Often millions of variants per category
 Stock out rate of 10%-40%
 PLC of 3 months to 1 year

4.  Step 1
Is your product functional or innovative?
 Step 2
What is the nature of the current practices followed at
every node of the supply chain?
 Step 3
Identifying, based on step 2, whether the supply chain
is physically efficient or is market responsive

6.  What should I consider doing?
 Do I make my product functional ?
 Do I make my processes more market responsive?
 What factors should I consider?
 Would I make more by investing in the processes to
increase their responsiveness?
 Or does a functional product’s consistent, no-risk
offering sound more lucrative?

7.  Age old practice of supplying an innovative product
with a high lead time
 Over emphasis on making the supply chain efficient
 ‘If a customer really wanted it, he would wait’
 Product availability still a problem at large though
product innovations continue to increase in number
 Overcome the schizophrenia by making some of the
products functional and the rest innovative

8.  Having a match does not solve all the problems
 How do I supply my products efficiently?
 The Campbell mess
 Efficient processes at all nodes of the supply chain
 EDI links with retailer
 Slashed delivery lead time by continuous
replenishment
 Intensive price promotions lead to chaos

9.  Step 1
Accept the uncertainty
 Step 2
Strive to reduce uncertainty
 Step 3
Avoid uncertainty
 Step 4
Hedge against the residual uncertainty

10.  Accepted the uncertainty
 The product provided 2 million options to choose from
 Reduce uncertainty
 Demand became more predictable with proper
communication channels established
 Avoid Uncertainty
 A lead time of 2 weeks was promised to the customers
 Hedge Against Uncertainty
 Produce to order system allows National to match
supply with demand

11.  The nature of demand for your product offerings is to
be considered before devising a supply chain
 Following efficient practices need not necessarily
imply that you are doing all the right things
 Functional products require an efficient process
 Innovative products require a market responsive
process
 You, a manufacturer, can increase your share of the pie
by cooperating with the retailers by cutting costs
throughout the system