Responsive supply chain: sensitive to customer requirements

A responsive supply chain is one that is designed to be sensitive to customer requirements, market changes, and other external factors that can impact the demand for a product or service. This type of supply chain is designed to quickly adapt to changes in demand, which allows businesses to better meet the needs of their customers and stay competitive in their industry.

To create a responsive supply chain, businesses need to implement several key strategies. These include:

Building strong relationships with suppliers: A responsive supply chain relies on a network of reliable suppliers that can quickly adapt to changes in demand. Businesses need to build strong relationships with these suppliers to ensure that they can quickly deliver the materials and products needed to meet customer demand.

Using real-time data and analytics: To be responsive, businesses need to have real-time data on customer demand, inventory levels, and other key factors that impact the supply chain. Using analytics tools can help businesses identify patterns and trends that can inform decisions about inventory management, production planning, and other key areas.

Emphasizing flexibility and agility: A responsive supply chain needs to be flexible and agile to quickly adapt to changes in demand. This means having the ability to ramp up production when demand is high and scale back when demand is low.

Leveraging technology: Technology can play a key role in creating a responsive supply chain. For example, using automation and robotics can help businesses streamline production and reduce lead times, while cloud-based platforms can provide real-time visibility into the supply chain.

Overall, a responsive supply chain is critical for businesses that want to stay competitive in today's fast-paced and ever-changing marketplace. By implementing the right strategies and leveraging technology, businesses can create a supply chain that is sensitive to customer requirements and able to quickly adapt to changes in demand.

1. Supply Chain Supply Chain Analytics Sensitive to customer requirements Responsive Tabassum Rangrej PRN073 Harender Singh PRN099 Indrajeet Hulyalkar PRN100 Ashwani Kumar PRN088 Yash Shrivastava PRN061 23 Team

2. Supply Chain Operating Model According to the nature of the product they are also of 2 types: Functional Product – Stable predictable demand and long-life cycle. Ex: Washing powder, Jam etc. Innovative Product Unstable and unpredictable demand and short life cycle. Ex: Fashion apparels, high end computers etc. Efficient SC ( COST Focus ) Focus on Cost reduction, asset utilization , efficiency, productivity, yield Capacity, utilization, scale etc. Responsive SC ( SPEED Focus) Focus on responding speedily to changes in customer delivery requirement Striking the right balance What are we going to understand ?? How can we emphasize on Creating of Demand Responsive Supply Chain Risk and mitigation factors Industrial frameworks Nike application of responsive supply chain And the advantages and loopholes in responsive supply chain model Functional Innovation

3. Outcome Increased speed. Flexibility, and Reduced cost Partnership based on Core competencies, Distributed network of partners, Integration by IT. Learning organization, Strategic alliances Strategies, Global Outsourcing. Strategic alliances, Technology, and Continuous Improvement Corporate and Business Automation and IT including E-commerce (B2B. B2C and B2A), Strategy formulation and Tactical management. Training and education. Learning organization. Information technology. Flexible workforce Knowledge and Information Technology Management Metrics Performance Measures Strategic Planning Virtual Enterprise Responsive Supply Chain Framework for developing responsive supply Chain Creation of Demand Responsive Supply Chain Objectives: To ensure availability of the right product at right time at right place To reduce lead time Lower inventory To cater to demand uncertainty Risk Mitigation Demand Uncertainity Building SC by assuming that demand will change. Product Variability Using Standard parts in different product. Forecasting Using Real Time data for shorter duration. Bullwhip Effect Collaboration with the trading partner. Mitigation Plan Factor essential in the framework of the Responsive Supply Chain model: Forecasting Range : Ford Aggregate forecast: e.g., Cadillac Standardization(product/part variability reduction) Using test batches data for the new product Collaboration with partners

4. ERP and application integration systems are of paramount importance for an RSC. Organizational structure is another important component of RSC Responsive Supply Chain Strategies: Global Supply chain Customer focus Low-cost production Agile(extensive distribution channel Integration with the extended supply chain(collaborative network) Using the IT technologies (ERP, CRM, web-based tools etc.) JIT, reduce Inventory Responsive Supply Chain is combination of AM and SCM The strategic planning of an RSC should include Global Outsourcing SCM Strategic alliances IT

5. Determinants for Supply Chain Responsiveness Supply Chain Responsiveness: conceptual framework Manufacturing flexibility Can directly reduce the production lead-times and changeover times for products in supply chains Inventory Product architecture / postponement Information integration Coordination and resource sharing Organizational integration: Often used as buffer against uncertainty Closely linked to the decoupling point , which is a common criterion for classifying supply chain strategies. Determines to a large extent where the decoupling point can be placed and thus how responsiveness can be achieved Determines manufacturability & internal product variety / complexity Can help reduce internal demand amplification and eliminate delays due to slow information flows Eliminating unnecessary demand uncertainty and variability facilitates a better focus on end customer demand Removes delays activities in supply chains and leverages synergies Reduces demand variability and uncertainty Particularly important impact on trust , which is required for a variety of interactions between supply chain members Spatial integration and logistics A reduction in transport lead-times directly increases the responsiveness of supply chains

6. In 2017 Nike announced a range of responsive and agile strategies While the focus on cheap production was a key to the brand’s early success, Nike looking for other ways to distinguish itself constant investment in innovation. Sustained investment in shoe design and mfg. techniques Nike’s Supply chain evolution Nike’s supply chain over the years Specific Market challenges Desired item is not in stock , most customers have no qualms about choosing a competitor brand. Purchases are increasingly shifting to digital channels , making competition more robust Purchasers typically make decisions at the point of sale Consumer is presenting an immediate and short-term demand Trends are a significant influence in buying decisions and these are often connected to recent sporting events. Nike’s original supply model, “Futures Order Model” was based on low-cost production and long lead times Long lead times started to become a problem One major downside of outsourcing is the extreme distances involved Company was exposed to import tariff and transport cost risk Time used to transport goods from one continent to another was a huge chunk of the lead time.

7. A Change of Direction Growth in Revenue In FY 2019, annual revenue saw an increase of 7.5% from previous year. Annual Revenues In FY 2019, Nike Inc. achieved record annual revenues of $39.1 billion Global Footwear Revenue In FY 2019, footwear revenue grew by 14.9%. Nike announced a “Direct to Consumer Offensive” (D2C) powerful new digital assets that would be used to drive sales and deliver products directly to the consumer A key to this strategy was a supply chain transformation that would see the adoption of a more agile and responsive supply model $39.1 Bn 7.5% 14.9% Reduction in Inventory In FY 2019, all the revenue growth figures were achieved with 2% reduction in inventory 2% Footwear Revenue- EMEA Region Nike saw a 21% increase in footwear revenue. 21%

8. Learnings Challenges in Implementing RSC in NIKE Collaboration & Partnership: Collaboration with the extended supply chain Flexible Production: Ability to meet the flexible production due to variable demand Integration: Co-ordination between the different teams in the organization Systems and Tool: Focus on IT and implementation of the virtual enterprise Mindset Shift: abandoning old KPIs and overcoming ingrained routines Size of the organization is a challenge in responsive supply Chain Other firms that are implementing RSC

9. Learnings Responsive supply chain features Responds quickly to unpredictable demand Invests in lead-time reduction & Prioritizes speed, flexibility, quality Has a lower utilization rate (maintains flexibility) Will minimize stock-outs & minimize overstock Focused on being adaptable to customer needs. Utilizes an excess buffer capacity & buffer stocks as needed Uses fast and responsive transport and logistics options Market/Industries RSC Good for ? The RSC is always an advantage, but Product when it is inherently novel or innovative Items where trend affect their demand Apt for items where competition is very strong Well adapted to face uncertain market conditions Products that are affected by weather or geopolitical influence

10. Thanks Do you have any questions? h arender.singh @ siom . in [phone]