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Part - XVI

To answer those questions, the companies need to move beyond the traditional supply chain. Handing information from partner to partner in a sequential, linear fashion just isn’t good enough in the new Economy. It’s too slow, too inaccurate, and too costly - and it makes the company vulnerable to competitors that do have responsive supply chains.

Instead, the companies need to create collaborative communities of networked supply chains in which suppliers; manufacturers, distributors and customers share information dynamically up and down the supply chain and work together seamlessly toward a common goal.

Today, supply chain management is beginning to tap into the power of online marketplaces to create supply chain exchanges, or private exchanges, that support collaborative commerce communities. A supply chain exchange uses an e-marketplace infrastructure to link an enterprise and its supply chain partners into a network. A supply chain exchange gives the supply chain partners a way to collaborate on design, procurement, demand and supply management, and a host of other supply chain activities. Synchronization of execution and logistical efforts is improved, meaning less downtime for assets. Supply chain partners can work with common forecasts. Planning and optimization are more efficient. And information-sharing friction is reduced both internally and externally.

An Indian Case of successful Supply Chain Management: Mahindra & Mahindra (M&M)

M&M's farm equipment division, which is one of two main operating divisions, produced approximately 80,000 tractors in the year 2000. The division's launch of high- performance tractors played a vital role in the mechanization of Indian agriculture, directly impacting the lives of some 6 million Indian farmers. It is also the third largest producer of tractors in the world (measured by units sold). It also exports to the United States, where it has an assembly plant, and to several other countries in South Asia and Africa. M&M also plans to enter several European countries in the near future. The company has been the market leader in farm equipment machinery in the highly competitive Indian market since 1986.

Just as M&M wants to compete for more global business, international competitors want a piece of the Indian business as well. When the Indian market opened in the mid-1990s, the global players came to India to compete against them. M&M felt that, to really compete and win, they needed to build up the skills and benchmark their processes against these global leaders, becoming better than them at managing the business. That way we would not only compete with them effectively in the domestic market, but could also challenge them for market share globally.

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* Contributed by -
Amit Mishra,
PGP 19188,
Indian Institute Of Management, Lucknow.