Supply Chain Fundamental Rethinking

Strategist consider scenarios of Static, Dynamic, Complex & Chaotic environments in which industries operate.  The parameters for determining the same are – number of variables in the environment & the rate of change of those variables. A chaotic environment is one when the rate of change is high & the number of variables in the environment are large. The industry context for that period of industry life cycle is a ‘Chaotic’ environment. The current industry is passing through a phase like that with no surety if that is a permanent change in the way it will need to operate for years to come. Supply Chains are structures which support a random event called ‘sales’. Each Supply Chain supports a systemic component of demand & a random component of demand. The state of Supply Chains in Chaotic industry context makes the component of ‘random’ness increase. While enterprises may engage in the creation of their Strategic Plans, most of t...

It looks like the world has got frenzied about the 'customer' & the customer is believed to need everything 'cheaper' today than what is was 'yesterday'. Supply Chains of the world undergo a structural to meet the challenge of cost reduction. China being the 'Plant of the World' & India being the 'Back office of the world' made the western geographies set their supply chain nodes in these countries. These countries thrived on the export of work from the West to these countries. As  inflation in these countries coupled with the infrastructure bottlenecks increase over a period of time the competitive lever of 'cost' would move to some other geographies as these countries may not be the 'least' cost provider of goods & services. Particularly in India where the policies have been such that the cost of electricity, gas or oil along-with the real estate in many parts is more than the cost in US of A. It looks appar...