Supply Chain Optimization

Given the flurry of news articles about different responses to tariffs (especially as the end date for the 90-day pause on reciprocal tariffs approaches), I'm sure many folks (both in industry and academia) are struggling to wrap their heads around this topic. To aid in developing collective understanding, Yao J., David L. Ortega, and I worked together to coauthor a study titled, "Shock and Awe: A Theoretical Framework and Data Sources for Studying the Impact of 2025 Tariffs on Global Supply Chains" that can be freely downloaded from Journal of Supply Chain Management at this link: https://lnkd.in/gFHEpsdp. Below I've reproduced the diagram central to the framework we advance. A few words: •The crux of our framework is that changes in tariff levels cause firms to experience demand or supply shocks, which in turn can trigger a variety of behaviors (e.g., exporters reducing prices or shifting goods to other markets). These behaviors can be legal or represent misconduct (e.g., falsifying country of origin). While certainly not encouraging such behaviors, they will need studied (e.g., as in https://lnkd.in/gw5gQtPH). •Different actions result as importers make tradeoffs between (i) adjustment costs [e.g., the cost of shifting tooling from one country to another], (ii) transaction costs [e.g., the cost of teaching new suppliers how to produce your goods], (iii) adjustment costs for early action [e.g., reduced conformance quality while new suppliers move down the learning curve], and (iv) opportunity costs for late response [e.g., failing to shift production results in available capacity in alternative sourcing locations being captured by rivals]. •In general, I've been very pleased with how well subsequent news stories (e.g., https://lnkd.in/guMCCgrm) can be mapped to the theory we advanced. Implication: For anyone interested in understanding how firms are responding to tariffs in industry or academia, I suggest giving this paper a read. It's nontechnical and provides, to the best of my knowledge, the most holistic framework yet advanced for understanding this complex topic. #supplychain #shipsandshipping #supplychainmanagement #markets #economics #logistics #transportation

Calling all supply chain enthusiasts, again! The #AgenticAI Supply Chain Map has been updated (v2.0)! We’ve expanded the landscape to include more companies that have publicly announced and launched AI agents across planning, sourcing, manufacturing, logistics, and execution - we followed the SCOR model to make it easier. The focus? Real product capabilities and market adoption, not buzzwords. This update reflects how quickly Agentic AI is moving from experimentation into live, customer-facing supply chain use cases. That said, this remains a living map. We know there’s more happening on the ground. Always happy to get your inputs on how to improve it. We need YOUR feedback to make it more complete - Who are we missing? - Where are the case studies? (If you have a real-world example of an agent fixing a problem, I want to hear about it). Submit a company or suggest an update at the link in the first comment! You will also find all the details on each of the companies in the map - website, case studies, funding data, agentic ai maturity etc. Your input helps keep this resource accurate, practical, and grounded in reality. Thank you for the help Supplify and Alcott Global teams for putting this together! #SupplyChain #AIMap #Innovation #SupplyChainManagement

Monthly review meeting. Sales Director walked in smiling. “We closed a big order. It would increase our usual monthly volume several times.” The room felt proud. Applause across the table. Machines would run full. People imagined higher profit. Next monthly review meeting. Finance Manager walked into the same room. “Margins dropped drastically.” Everyone looked confused. Volume had grown fourfold. But three things had quietly changed on the shopfloor: • Two machines crossed safe capacity → overtime and breakdown maintenance increased. • Raw material had to be bought from a secondary supplier at a higher price. • Dispatch shifted to partial truckloads to meet the customer’s schedule. The factory was busy. But each unit was now more expensive to produce. Same product. Higher volume. Lower margin. That day the team learnt something uncomfortable. Volume doesn’t guarantee profit. Only contribution margin does. Factories don’t fail because they are idle. Many fail because they are busy in the wrong way. Before celebrating a large order, run a simple 3-Gate Factory Check. 1️⃣ Capacity Gate - Will the factory behave differently at this volume? Check whether the order pushes any resource beyond its stable operating range. • Will machines move into overtime or weekend shifts? • Will maintenance intervals shorten? • Will temporary labour or subcontracting be required? If yes, the cost structure has already changed. 2️⃣ Supply Gate - Will input economics remain stable? Higher volume often breaks normal sourcing patterns. • Can the same supplier support the increased volume? • Will alternate suppliers or spot purchases be required? • Will raw material price tiers change? Material economics must remain stable for margin to hold. 3️⃣ Logistics Gate - Will delivery behaviour change? Large orders often distort dispatch patterns. • Will shipment sizes reduce? • Will dispatch frequency increase? • Will premium freight or additional handling be required? Logistics deviations quietly erode contribution margin. Before celebrating volume, ask one question: After these three gates, does the unit contribution remain intact? If the answer is no, the order is not growth. It is a busy factory producing negative economics. #ManufacturingLeadership #FactoryOperations #OperationalExcellence #ContributionMargin #IndustrialLeadership

Early in my career, I sent a supplier a brutal email. Price is too high. Competitor offers 12% less. Match it or we move on. I was proud of it. I thought that's what tough procurement looked like. The supplier's response came the next morning. He didn't negotiate. He just sent me a breakdown. Raw material cost. Energy cost. Packaging. Freight. Quality testing. His margin: 4.2%. And then one line at the bottom: "We'd like to continue the relationship. But I want you to understand what you're asking us to cut." I stared at that email for a long time. That supplier had been delivering zero-defect material for 4 years. His lead times were the most reliable in our panel. When we had an emergency, he'd rearranged his production schedule for us — twice. And I had sent him a threat based on a competitor quote I hadn't even fully verified. I called him. Apologised. Asked if we could work on cost together instead of against each other. We found 6% savings over the next quarter — through packaging redesign, order consolidation, and a longer-term commitment that gave him planning certainty. No threats needed. That email taught me the most important thing about negotiation in this industry: Suppliers are not your opponents. They are your extended supply chain. The best negotiations I've been part of in 25 years weren't won. They were built. If you're early in your career and your instinct is to push hard on price — I understand. The pressure is real. But learn to ask "how can we create value together" before you ask "how low can you go." The results will surprise you. What's a negotiation lesson you learned the hard way? I'd love to hear it. 👇 #Negotiation #ProcurementLife #SupplierRelationships #ChemicalIndustry #YoungProfessionals #StrategicSourcing

Fruits & vegetables fetch quick commerce platforms 2x margins than packaged foods (only if they solve 1 critical problem) Zepto is investing heavily in cold chain logistics like refrigerated trucks while partnering with the Transport Corporation of India to expand its storage and distribution capabilities in the south. Cold chain logistics isn't new. The USA and Japan have had it since the 1950s, with over 70% coverage of perishable goods like dairy, meat, fruits, and vegetables. But India’s coverage remains just 4%. This is why we lose 15% of our total produce between harvest and consumption, amounting to an estimated economic value of ₹926 billion (USD 11.1 billion). For example, mangoes from Malihabad often lose 30% of their value before reaching Delhi markets just 500km away. The cold chain approach involves maintaining consistent temperatures across the entire journey, from farm sorting to dark store to doorstep delivery. While packaged goods offer 14-15% margins, fresh produce can deliver up to 30%. India's challenge remains substantial. For logistics companies, this creates 3 major opportunities: 📍 Temperature-controlled last-mile delivery networks that can maintain freshness for 10-minute deliveries 📍 Tech-enabled quality monitoring systems that reduce rejections and returns 📍 Specialized warehousing solutions near consumption centers to minimize handling Zepto is already processing 20 lakh+ units of fresh produce daily, but they're not alone in this race: 👉 Blinkit is leveraging Zomato's logistics network for perishables  👉 Instamart is integrating AI-powered cold storage into its micro-warehouses  👉 bigbasket's BB Now is using Tata's supply chain expertise to strengthen their fresh produce operations. The cold chain market in India is projected to grow from $14.5B to $53B by 2032. Early movers will capture the most value. Cold chain masters win on both margins and sustainability, making speed to market the only real question. Are you noticing a difference in produce quality between quick commerce apps? #QuickCommerce #ColdChainLogistics #FreshProduce

Reducing Steel Logistics Costs in India: Strategic Framework Logistics accounts for 10–20% of steel’s delivered cost and up to 28% of factory cost. Reducing this burden is key to improving competitiveness. A multi-pronged strategy involving infrastructure, modal shifts, digital tools, and policy reforms can yield significant savings. 1. Shift to Rail, Water, and Pipelines Road transport, though flexible, is 2–3x costlier. Rail movement via rakes and sidings can cut costs by 20–30%. Inland waterways (e.g., Ganga, Brahmaputra) save 40–60% for long-haul bulk cargo. Slurry pipelines, at Rs. 80–100/tonne for 250 km, are vastly cheaper than rail or road and must be expanded for inland plants. 2. Leverage PFTs and DFCs Private Freight Terminals reduce first/last-mile costs. Eastern and Western DFCs offer faster, reliable movement. Time-tabled rakes and rake-sharing improve predictability and lower costs. 3. Improve First & Last-Mile Efficiency Rail sidings, Ro-Ro services, and containerization reduce handling loss and costs. Better road access to ports via PPPs boosts multimodal efficiency. 4. Upgrade Infrastructure Developing dedicated rail/road corridors and multimodal logistics parks under Bharatmala and Sagarmala enhances connectivity. Coastal hubs at Vizag, Kandla, Paradip allow direct port loading, avoiding double handling. 5. Adopt Technology Use of Transport Management Systems (TMS), GPS tracking, and AI-based route optimization improves asset utilization and reduces fuel use. Automation in loading/unloading cuts turnaround time and damages. 6. Streamline Supply Chain Set up regional hubs near consumption centers. Aggregate demand to enable full-rake dispatch. Just-in-Time (JIT) inventory models cut warehousing and demurrage. Collaborate with 3PLs for cost-effective delivery and tracking. 7. Align with Policy & Incentives Leverage the National Logistics Policy’s aim to reduce logistics costs to 5–6% of GDP. Tap freight subsidies, tax incentives for logistics infra, GST pass-through, and single-window clearance for sidings and terminals. 8. Optimize Last-Mile & Maintenance Route planning tools reduce last-mile costs. Strategically located warehouses shorten delivery time. Preventive maintenance of fleets improves uptime and fuel efficiency. Impact Snapshot Rail over road: 20–30% cost saving Waterways: 40–60% Route optimization/backhauling: 10–15% Terminal/siding access: 5–10% Conclusion Combining modal shift, infrastructure upgrades, tech adoption, and policy alignment can reduce logistics costs by up to 40%. This is critical to meeting India’s steel production target of 255–300 million tonnes by 2030 and boosting global competitiveness.

Procurement: Treat suppliers as extensions of your enterprise, not transactions. Procurement Excellence | 23 NOV 2025 - In complex global markets, resilient supply chains demand partnerships built on shared destiny, not just contracts. Here are 9 Steps to Create Long-Term Supplier Partnerships: #1. Transparent Communication ↳ Co-develop comms protocols e.g. QBR ↳ Clearly share expectations, goals & challenges #2. Long-Term Contracts ↳ Replace short-term with multi year agreements. ↳ Share long-term roadmaps & cost-savings initiatives. #3. Shared Performance Metrics ↳ Jointly agree and track SMART KPIs. ↳ Define escalation paths & RCA templates #4. Early Supplier Involvement ↳ Involve and recognize vendor’s contributions. ↳ Include key suppliers in product development cycles. #5. Guarantee Timely Payments ↳ Automate payment & consider early payment discounts. ↳ Audit internal processes for bottlenecks. #6. Co-Create Innovation ↳ Create supplier ideation portals & protect IP collaboratively. ↳ Fund joint proof-of-concept projects. #7. Recognize & Reward Excellence ↳Formally acknowledge & reward outstanding suppliers. ↳Bronze (Operational Excellence), Silver (Innovation), Gold (Strategic Impact). #8. Uphold Fairness & Ethics ↳ Interactions & contractual terms are mutually beneficial. ↳ Ensure cost pressures don't force unethical labor. #9. Jointly Manage Risks ↳ Jointly identify risks & develop contingency plans. ↳ Map tier-2/3 suppliers collaboratively. In today's volatile market, Resilient supply chains are built on deep, strategic supplier partnerships. Achieving lasting, mutually beneficial supplier partnerships requires: ✅️ Deliberate strategy ✅️ Centered on trust ✅️ Shared objectives ✅️ Continuous collaboration ♻️ Repost if you find this helpful. ➕️ Follow Frederick for Procurement insights. #ProcurementExcellence #SupplierCollaboration

Inventory is the silent killer of consumer brands. Too much stock? Your cash is stuck. Too little? Customers walk away. There’s no perfect forecast — you’ll either overstock or run out of something critical. Last year we had a horrid quarter with overstocking on all the slow moving and OOS on all fast moving walking into festive with very less fuel.  We have been building this first off excel sheets and now in what looks like a system (built off Replit). Here’s what worked for us at Koparo: 1. Move Beyond Gut Feel For a long time, reorder decisions were instinct-based or working off plain averages. That stopped working as we scaled. We introduced formulas: ReorderPoint=(AverageDailyDemand×LeadTime)+SafetyStockReorder Point = (Average Daily Demand × Lead Time) + Safety StockReorderPoint=(AverageDailyDemand×LeadTime)+SafetyStock This one change helped us avoid both empty shelves and excess stock. 2. Get the Order Size Right Knowing when to reorder isn’t enough. You need to know how much: To be honest this is still hard but if your unit costs don’t fall too much based on order volume then just be conservative on this with a very accurate handle on actual vendor lead times and not just average but in season time. This helped us strike a balance between ordering frequently and locking cash in inventory. 3. Safety Stock That Makes Sense Earlier, we’d just add 20% “for safety.” Now, buffers are calculated based on actual demand variability and service levels. No more guesswork. 4. Lead Times Aren’t Assumptions We learned the hard way that vendor timelines on paper don’t match reality. Our system now tracks actual lead times — which changed planning dramatically and yes also our vendors. 5. Automate the Triggers We built an in-house system (on Replit) with auto-replenishment triggers. When stock hits ROP, it suggests orders. No manual chasing, no panic buying. What’s the impact? ✔ Fewer stock-outs ✔ Lower working capital ✔ Predictable operations We’re still evolving this — and have built a simple system on Replit. It’s far from sophisticated, but it has improved our decision-making, forced us to make assumptions real, and saved at least 10 hours per week. Curious: How are you managing inventory? DIY system, off-the-shelf software, or still spreadsheets? #InventoryManagement #SupplyChain #D2C #Koparo Kshitij Ranjan Vishal Singh Saurabh Nidar Abhishek Sharma Rahul Gaur

Decision-dependent uncertainty The prestigious journal Mathematical Programming Series B just announced they were soliciting papers for  stochastic programming with “decision-dependent uncertainties.”  For the uninitiated, the field of stochastic programming likes to generate samples of “scenarios” of what might happen in the future - these are represented as “scenario trees” that are then used to plan for the future to make a decision now.  This is an idea that dates back to a 1955 paper by George Dantzig who invented the simplex method.  There are *thousands* of papers on this topic written every year, but I like to repeat the question asked of me by Ed Rothberg (he is the “Ro” in the Gurobi optimization library): “Warren, does anyone actually use stochastic programming?” Scenario trees have to be generated in advance, which means that the random events do not reflect what decisions have been made.  Even with this simplification, stochastic programming (with scenario trees) creates problems that are much harder than the more familiar deterministic lookahead policies, which is a reason why this approach is rarely used. Now they want to address the problem of making the uncertainty depend on previous decisions.  One example of where this happens is in truckload trucking, where the appearance of random loads to be moved might depend on whether a truck is in a region. There are several ways to handle decision-dependent uncertainty: Use a parameterized, deterministic lookahead - I call this a “cost function approximation” … start with a deterministic lookahead, then introduce parameters to make the deterministic solution more robust (schedule slack, buffer stocks, discounts on uncertain forecasts).  Finally, tune the parameters in a stochastic simulator that captures (if you wish) state or decision-dependent uncertainties.  The tuning of the parameters picks up this behavior.  See https://lnkd.in/eEcpM4Ex for an introduction to this approach, and chapter 13 (or section 19.6) of https://lnkd.in/dB99tHtM for a more thorough description. If you really need a stochastic lookahead and want to have state- or decision-dependent uncertainties, consider stochastic lookaheads that use simulation, such as ADP-based methods (section 19.7 of https://lnkd.in/dB99tHtM for a discussion of stochastic lookaheads). Monte Carlo tree search (section 19.8) solves a full stochastic lookahead where it is quite easy to introduce state or decision-dependent uncertainties, but MCTS only works for scalar decisions. Take a look at optimistic MCTS in section 19.8.4. Make sure you evaluate your policy in a proper simulator.  More sophisticated lookahead models do not always translate to better policies.    I strongly recommend making a parameterized deterministic lookahead your base policy for comparison (strategy 1 above).  Your results will be highly problem-dependent, so make sure you have an application where this really matters.

The Covid pandemic and the microchip crisis have dramatically transformed how we perceive supply chains, turning logistics into a major focus for many businesses. Indeed, Global supply chains face mounting challenges from geopolitical tensions, climate change, rising costs, and stricter regulations like the upcoming EU Digital Passport. But amidst these challenges lies an opportunity: a new generation of supply chains is emerging in 2025, leveraging cutting-edge technology and fostering unprecedented collaboration. According to our research, 70% of executives across industries and geographies rank new-generation supply chains among the top #trends for 2025 . We see more and more organizations embracing AI-powered automation together with IOT, Digital twins, Cloud and sometimes Blockchain to improve demand forecasting, risk management, and operational efficiency. For instance: Amazon’s advanced robotics and #AI in their Shreveport fulfillment center have increased order processing speed by 25% while reducing packaging waste. Honeywell uses robotics and data analytics to optimize warehouse operations. Pfizer leverages AI for supply chain optimization, enhancing drug distribution and vaccine rollouts. In 2025 and beyond, I believe that the convergence of AI, sustainability, and collaboration will redefine what supply chains can achieve. Beyond simply improving efficiency, we can also empower businesses to meet consumer demands for transparency, resilience, and eco-conscious practices. So the question is not whether your organization will embrace this transformation — it’s whether it can afford not to. Emmanuelle BISCHOFFE CLUZEL🌍 https://lnkd.in/e3SWs4iN #top5techtrends