supply$chain$management in$emerging$markets:$...
TRANSCRIPT
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Supply Chain Management in Emerging Markets: New Perspec=ves
July 23 2010
Edgar E Blanco [email protected] Research Director Executive Director MIT SCALE Latin America
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Tradi=onal Supply Chain Leaders
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SCM Lessons learned… • Supply Chain Management is a long-‐term source of compe==ve advantage – Physical flows – Informa=on flows – Financial flows
• Process innova=ons are as important as technology innova=ons
• Informa=on sharing & visibility enables collabora=on
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Why are Emerging Markets important?
Source: Wikipedia, World Bank 2006 Database
China 1,314M - $2k
India 1,113M - $0.8k
USA 300M - $45k
Mexico 104M - $8k
Brazil 187M - $4.7k
Nigeria 149M - $0.6k
Egypt 75M - $1.3k
Germany 82M - $36k
Russia 142M - $5.8k
Vietnam 84M - $0.6k
Japan 128M – $38k
Philippines 87M – $1.4k
Indonesia 222M - $1.4k
Pakistan 155M - $0.7k
Bangladesh 144M - $0.4k
Country Population – GNI per Capita
EU 459M - $34k
World 6,440M - $7.5k
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MIT Global SCALE Network Supply Chain And Logis=cs Excellence
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Interna=onal Supply Chain Management Curriculum taught across the globe (Master & PhD)
Pla]orm for coopera=ve interna=onal exchange
Support mul=-‐na=onal research collabora=on
Create professional networks of alumni, industry and academics
3-‐5 More Centers to be added (Asia, Africa, Middle East)
Acknowledgements first…
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SECRETARÍA DE DESARROLLO ECONÓMICO
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Urbaniza7on • High density • Mega-‐ci=es • Conges=on • Environmental impact
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Pu;ng density in Perspec7ve
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Localidad / Caracterís7cas Chapinero Ciudad Bolívar
Población 131.027 616.455
Ingreso >9.720.000 >324.000 Diario
< 560.000 – 796.000 <18.700 – 26.600
Estado Vías Vías Principales y alternas pavimentadas
Pocas vías principales / dijcil acceso
Transporte Automóvil /masivo No motorizados / Masivo
Hurtos personas Hurtos establecimientos Hurtos Vehículos
742 397 134
135 39 46
Comercio Grandes cadenas Autoservicios formales
Tiendas de Barrio Mercado informal
Diverse Ci=es
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Fuentes: CCB + DANE
Fragmented Channels
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Diverse Channel Breakdown
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Unique Partners • Fragmenta=on • Informality • Low working capital
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Infrastructure • Rural • Limited investment • Low coverage • Regula=on • Burocracy
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Risk • Poli=cal instability • Vola=lity • Tax complexity • Corrup=on
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Tailored Products
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Mobile Technology Adop=on • ~4 Billion mobile accounts worldwide
– Fastest technology adopted in the history
• 2011 Forecast: 5 Billion accounts, 6.8 Billion humans
Source: Interna-onal Telecommunica-ons Union
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Highest Growth in Emerging Markets
Fuente: The Economist
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Innova=ve research that will impact logis=cs
… driven by needs in emerging markets….
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Principal Inves-gators: Jhonatan Rotberg, Edgar Blanco
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Hammock
• Mobile Logis=cs Planning
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Sana
• Mobile Care for Remote Diagnosis and Screening – Open source pla]orm – Links nurses in the field with doctors
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Principal Inves-gators: Leo Celi
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Human Mobility
Marta Gonzalez @ MIT
CarTel • CSAIL
• Distributed mobile sensor network – Cars, smartphones
• Commute & traffic modeling – Portal – Hardware – High-‐speed databases – Stochas=c modeling
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PIs -‐ Hari Balakrishnan , Sam Madden
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Feeding a City
Source: J. Carulla, 2009
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Cartagena Market
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How to make the world flat?
Global Health Supply Chains Prof. Prashant Yadav @ ZLC
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Health: The World is Not Flat
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Most diseases are treatable with exis=ng medicines
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Many of these medicines are however not available
Average availability was only 34.9% in the public sector and 63.2% in the private sector
Source: WHO, Health Ac=on Interna=onal, United Na=ons MDG8 Report
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Points of access for medicines in the private sector
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Points of access for medicines in the private sector
Non fixed structure retail store
Fixed structure retail store Drug store Licensed pharmacy
Drug hawker
Source: MMV
Structurally different supply chains serve each of these end retail points
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Source: Yadav, CHAI and UNZA in Zambia
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Forecast Driven
Drug Substance Manufacturing
Current Push-‐Pull Boundary in Global Health Supply Chains
Co-formulating and Packaging
Pre-delivery Inspection
Shipping and Transport
Drug Substance Inventory
Final Product Inventory
Order Driven
Inventory /Order Interface
Source : Yadav, Sekhri and Curtis (2006)
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Risk Sharing shius the Push-‐Pull Boundary
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Source: Existing McKinsey and JSI Deliver analysis; Dalberg analysis
Minimum Volume Guarantee Institution
Country Manufacturers Donor
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Donors and countries estimate annual purchasing volume for specified products
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MVG decides on volume of product and amount of risk to assume
Establishes master contracts with manufacturer based on volume / risk tolerance
3 Countries and/or donors each place individual orders under master contract
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Manufacturer ships products directly to countries
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Manufacturer informs MVG of unused volume
Secondary Markets?
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Sale or storage of unused product; potentially waste
Source: Yadav & Dalberg Global Development Advisors
So what?
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Research Vision
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Economy SC Elements
Developed (US/Europe Centric)
Emerging (China/India/LatAm/Africa)
Basic (Cost, Service, Assets)
“Tradi=onal” Supply Chain
“Innova=ve” Supply Chain
Extended (Environment/Development)
“Sustainable” Supply Chains
“Sustainable & Innova=ve” Supply Chain
E. Blanco, MIT-‐CTL, Adapted from H. Lee, 2009
Success stories …
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Nestle: “Venta Directa a Changarros”
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Complete logis=cs re-‐design • 24 months: 13 ci=es, 140.000
“changarros” a, 500 trucks
• Structure • Processes • Technology • EBIT = 19%
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The Wonder Of Dabbawallas Unfolded NUTAN MUMBAI TIFFIN BOX SUPPLIERS ASSOCIATION
Web Site : mumbaidabbawala.org
Sant Dnyaneshwar Lord Ganesha
Late Shri Mahadu H. Bachhe Founder Late Shri Dhondiba Medge
Sr. Member
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ABOUT NMTBSA History : Started in 1890 Charitable trust : Registered in 1956 Employee Strength : 5000 Avg. Literacy Rate : 8th Grade Schooling Total area coverage : 60 Kms to 70 Kms Number of Tiffins : 2,00,000 Tiffin Boxes 400,000 transac=ons every day (including return) i.e. 400,000*25 days*12 months= 120,000,000 (120 million or 12 crore transac=ons per year) Time taken : 8 to 9 Hours Morning 3 Hours War=me
(9 A.M. to 12 P.M. for the Collec7on and Delivery)
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Thank you!
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Edgar E Blanco [email protected]