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.