LP

Lesson Summary: Ecosystem Model

The Ecosystem Model

Overview

  • A framework to visualize all Operational, Strategic, Management, and Execution issues.

  • Ecosystems consist of:

    • Companies, countries, and governments

    • Social and political organizations

    • Natural, Industrial clusters, and Financial and Human resources

    • Delivery infrastructure (logistics and IT)

    • Connections and knowledge of the industrial environment.

Supply Chain Ecosystems Components

  1. Institutions

    • Customs, Export, and Other Government Regulators

    • Quality Control and Environmental issues

    • Social, Financial, and Trade issues

  2. Resources

    • Infrastructure (sea ports, airports, roads)

    • Industry clusters

    • Human, Financial, and Natural resources and labor unions

  3. Delivery Services Infrastructure

    • Logistics and IT companies

    • Transport (Rail, Air, Ship, Road)

    • Logistics parks, SEZs, Freight corridors

  4. Supply Chain

    • Retail chains

    • Distribution

    • Manufacturing

    • Suppliers

Drivers of Supply Chain Competitiveness

  • Resources: Labour, Materials, and Energy

  • Government: Policies and investments in institutional, environmental, and infrastructural elements

  • Delivery Mechanisms: Logistics and IT

SES Framework Applications

  • Governance

  • Risk

  • Innovation

  • Performance

The Five STERM Forces

  1. Science research

  2. New Technologies

  3. New Engineering materials

  4. Regulations and policies

  5. New Management techniques

Modular Approaches

  • Modular Product: Combines different modules, offering various options for customers.

  • Modular Process: Each module undergoes specified operations, allowing outsourcing.

  • Part Standardization: Common parts utilized across multiple processes.

  • Process Standardization: Standardizing processes to delay final assembly until customer orders are received.

Modular Organization Designs

  • Modularization of product designs promotes similar organization designs and activity coordination via an information structure rather than authority.

  • Codified knowledge and standardization facilitate vertical specialization replacing integration.

Types of Resources (Classical and Modern Views)

  • Classical: Natural resources, Human resources, Financial resources, Capital assets.

  • Modern: Knowledge, Intellectual property, Social capital, Management of high-value delivery processes.

Special Economic Zones (SEZs)

  • A geographical region with different economic laws (attracts foreign investments).

  • Established in various countries (e.g., China, India).

  • Indian SEZs less effective compared to China's focused approach.

Clusters

  • Geographic concentrations of interconnected companies and specialized suppliers associated with institutions (universities, training).

  • Allows companies to operate more productively in sourcing inputs and accessing information, technology, and human resources.