Managing Supply Chains

According to Wikipedia; “The US entered a recession at the end of 2007, and 2008 saw many other nations follow suit.” Many economists believe that the recession that started in late 2007 in the US was a direct consequence of (a) the Housing Market Correction and (b) the Subprime Mortgage Crisis . What followed was a very difficult operating environment for many businesses that depended on banks for credit to keep them afloat. Credit was tight and often in many instances was being revised down – not only for businesses but also for consumers. Businesses selling high ticket items started seeing a significant decline in customers who depended on “No/Low Interest Long Term Financing Options”. Businesses were now competing based on “who could save the consumer more money”. The old adage “Shop Till You Drop” was no longer valid. Consumers started pulling back on making purchases and “bargain hunting” had become commonplace. Consequently to match this decline in demand, b...

As a kid growing up in New Delhi, I remember that every Saturday morning at around 10am we had a vegetable hawker come by our house. He would bring every vegetable my mother wanted. He would always have sufficient quantity and the right quality. The hawker was the supplier for our street which probably had close to 30-35 families. When I think about it now a few things jump out at me: (1) The options available were limited . The hawker did not bring 4 different varieties of potatoes OR 3 different varieties of peppers. Even under these limitations my mother was a happy consumer! (2) The quality was predictable . He knew that his products had to meet the highest quality standard for a guaranteed business. (3) The quantity we bought from him was predictable . Unless we had guests coming over, we would always buy a predetermined amount of vegetables from the options available. Furthermore, he always carried safety stock. (4) If he did not have something, he would take down the request ...