Systems Society-Task 1

Saurabh Singh

MBA-FT 2017-19

What is Supply Chain Management?

A network that allows the flow of physical and information flows between producer and end
consumer. The most basic structure of a supply chain network involves flow of products from
supplier to producer and finally reaching the end consumer (PRIMARY PRODUCT FLOW). This
flow of physical goods is complemented by a secondary flow of information across this network
(invoices, sales data, receipts, orders etc). The primary cash flow also occurs that flows in the
reverse complementary direction. Another type of flow common to supply chain is reverse
product flow where goods sent for replacements and recycling are seen.

Each component of the supply chain has unique functions, the seller is usually responsible for
supplying raw materials, services and Energy requirements to the Producer. The producer
delivers the furnished goods and services to the end consumer.

A supply chain can be stable, reactive, or efficient reactive. A stable chain is efficient and cost
efficient. They have little to no need to real time information so they use dedicated capital
assets to ensure execution. Reactive strategy works when the supply chain is responding to
demand from partners, example being a sports jersey supplier being driven by game results.
Efficient reactive focusses on efficiency coupled with cost management. This is also a reactive
approach but with greater focus on cooperation.

There are two approaches to pursue supply chain management i.e vertical and horizontal
integration. In vertical the ownership rests with one company, and produces different products
to service one need, this ensures control and helps reduce costs. An example being a car
company that owns mines, mills, transport, plants and even showrooms. Horizontal implies
company producing different products to service one product, ensuring the advantage of
economies of scale. Common in case of mergers and acquisitions, ensuring monopoly in the
sector along with diversification.
The stages of supply chain network are stable, multiple dysfunction, semi-functional enterprise
and integrated enterprise followed by extended enterprise. As we move further in stage there
is greater integration seen in network.

Understanding the Mobile Payments Landscape

The mobile payments landscape as it stands can be categorized on the basis that consumer
phone is required for achieving said transaction. If a phone is not required then it acts as a
mobile point of sale solution. These act as a terminal for credit cards and the largest player in
this sector is Square.

Further categorization is done on the basis of if the security is in the phone or not. NFC based
system that allow contactless transfers are phone centric. These are common in the London
tube and have found a market in Japan.

However, there is another type that encourages the security to be in the cloud. These cloud
based platforms can be free or brought. For the former, these are usually the mobile banking
solutions like the UPI that has come to the fore in the developing world.

The latter type represent the true mobile commerce solutions. These are categorized on the
basis of who holds the customer account. If a bank holds it, then it is typical card payment like
visa and mastercard. In some cases a carrier might allow billing, in such a case charges would go
to the bill. Bank transfers are associated with funding all of these operations. Alternative
payment gateways like paypal also allow accounts to share information. These gateways usually
charge a fee and thus are in direct completion with bank transfers. Another type of transfer
mechanism uses virtual currency like bitcoins that are neither tied to a bank or a currency.
These operate within their own sphere.
Beyond uber- How the Platform Model Connects the World

Software at best is a commodity. It is very easy in todays environment for competitors to copy
features and present a solution that is cheaper and faster. Weve seen this trend repeat over
several times. Complicated enterprise solutions have been replaced by software as service
models which have now been replaced by open source solution. In such an environment your
technology cannot be a competitive advantage that would sustain your business over long.

Unlike software however, Networks arent commoditized. It is undoubted that the biggest
opportunity of the 21st century lies in networks. A network based model focusses on creating
value by facilitating transactions between two or more independent groups i.e consumers and
products. This model can be equated to a bazaar of ancient times, and is more commonly
referred as the Platform business model.

Alibaba is valued because it brings registered SMEs to consumers. Android and IOS derive their
value over competitors because they connect app developers to users. Facebook and twitter
connect producers of content to users. Uber connects drivers with passengers. The parallels are
clear, the stronger is this chain; the more productive and valued an ecosystem is.

Traditional Linear business owned one side of business, supply. Platform facilitates and allows
transactions that add network value derived from scale. An example would be IOS where, more
developers on the system allow for more apps that encourage more users to sign up.

In this system platform only serves to facilitate and coordinate, not organize and control. The
platform model can be segregated into two halves one is the Core Transaction (primary activity
users need to do create value). This includes producers who create in order to connect with
consumers which consume that inventory allowing for the creation of value for producers. It
clear a cycle is formed that cannot be replicated using this system.

Secondary activities undertaken by platform include-Audience building to allow supply demand

overlap, Matchmaking right consumers to right producers, Rules for what is allowed or
encouraged-curating access who gets to join, improve content over time. Combined these two
serve as a clear pathway to build a platform ecosystem.
It is clear that platforms have higher margins and are more valued. Percentage of platforms as
share of unicorn startups is close to 80 in India and China. They also have higher valuation and
funding on average. There are opportunities in the tech sector going forward and most of them
rely on the use of Platforms.