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05-16-2014

Clarkson University Business Prof Targeting Solutions for Niche Market Challenges

High-end cars. Custom-made jewelry. Handmade clothing.

Niche markets present their own unique supply chain challenges -- from managing customer expectations to working with idiosyncratic suppliers.

Santosh MahapatraClarkson University School of Business Professor Santosh Mahapatra has a reputation for tackling tough operational challenges. His pioneering research in logistics provides solutions to tough problems across the globe.

The associate professor of operations & information systems has been working with companies overseas to improve logistics and supplier relations in Italy’s luxury vehicle manufacturing industry.

Teaming up with faculty at the University of Bologna’s School of Business, Mahapatra worked with luxury automotive company Lamborghini and high-end motorcycle manufacturer Ducati to improve supply chain operations.

In a niche market in which a car can cost upwards of $500,000 and a motorbike upwards of $40,000, demanding customers expect innovative features, lots of customization options and first-class service.

This poses unique challenges for supplier relations.

“The high-end components that go into these cars and motorcycles are very expensive and there are very few suppliers,” says Mahapatra. “The manufacturers cannot afford to hold too much inventory so they rely on their suppliers to have the materials ready to ship as they need them.”

Working with executives at Ducati, for example, Mahapatra helped develop an information system to manage data on suppliers, their facilities, characteristics and performance. “The goal is to improve information-based decision making to guarantee a smoother flow of materials to meet the highly unpredictable demand,” says Mahapatra.

Preserving Artistry in India’s Handloom Industry

In India, the handloom industry plays an important role in the country’s economy, employing hundreds of thousands of weavers who handloom fabrics and apparel for India’s domestic and international textile markets.

“Each product is really an artistic splendor, and therefore unique, which is the basis of its worth,” says Mahapatra. “So the challenge is how to maintain the integrity of the products while turning a reasonable profit.”

At the Xavier Institute of Management in Bhubaneswar, Mahapatra investigated the complex supply chain of the handloom sector firsthand. The weavers work with contract manufacturers who supply the materials they weave into saris and other apparel. An exclusive group of retailers sell the products at a good price to earn a profit and keep the industry financially viable.

“To preserve the artistry, the manufacturing is still household-based," says Mahapatra. “ The weavers are skilled artists, so supplier relationships are idiosyncratic. The retailers must motivate the weavers to turn out products to keep the supply up without adversely affecting their creativity. So it is not a typical supply chain problem.”

Clarkson University launches leaders into the global economy. One in five alumni already leads as a CEO, VP or equivalent senior executive of a company. Located just outside the Adirondack Park in Potsdam, N.Y., Clarkson is a nationally recognized research university for undergraduates with select graduate programs in signature areas of academic excellence directed toward the world's pressing issues. Through 50 rigorous programs of study in engineering, business, arts, sciences and health sciences, the entire learning-living community spans boundaries across disciplines, nations and cultures to build powers of observation, challenge the status quo, and connect discovery and engineering innovation with enterprise.

[A photograph for media use is available at http://www.clarkson.edu/news/photos/smahapatra-2.jpg .]

[News directors and editors: For more information, contact Michael P. Griffin, director of News & Digital Content Services, at 315-268-6716 or mgriffin@clarkson.edu.]

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