Supply and exchange of electricity between nepal and india
Table of Contents
Organizational Theories and supply chain management in Nepal 5
Some of the major challenges of the Supply chain 6
Introduction
Supply and exchange of electricity Between Nepal and India
Nepal and India, in 1971, signed the power exchange agreement. According to this agreement, both countries import and export electricity based on the requirement to meet the electricity demand-supply. Recently, Nepal has signed the power trade agreement. India will be importing electricity from a 220 kVA dhalkebar-Mujarrafpur Transition line from India's NVVN. Besides that, Nepal and India are known for exchanging electricity through the various transmission line (Center for International Private Enterprise, 2019). During the monsoon season, Nepal is known for exporting surplus electricity to India, when the production soars and electricity consumption decreases during the night. Usually, the surplus electricity is transported to Uttar Pradesh, Bihar and Uttarakhand. India has been paying Rupee 6 and 18 paise (Nepali currency). When they import electricity, then Nepal also pays the same amount when importing electricity. Nepal electricity authority claimed that around 291 MW of electricity had been exchanged between India & Nepal (Center for International Private Enterprise, 2019). Indian-Nepal is known for engaging in electricity exchange, as India is also helping Nepal build hydropower projects. Recently, Arun-III, which is considered the biggest hydropower project in Nepal, developed with Indian assistance, which is expected to electrify The Himalayan nation. Besides exchanging electricity, they are also known for exchanging electrical Equipment between the two countries. In the past ten years, the bilateral trade grew over six times around the US $ 5.89 billion in 2018-2019, around 4% of the machinery and other electrical parts from India are exported to Nepal. The production and manufacturing of electronics products have severely increased in India, as according to the study that was conducted by the Ministry of Electronics & Information Technology's annual report 2019-20, have claimed that production of electronics goods in India has increased by 185% in last six years, which is remarkable growth in the sector (Ghosh, 2021).
Supply chain movements of these electrical Equipment’s
The supply chain of electronics consists of many steps where there is a movement of goods from factories, the production of the product takes place, production refers to the capacity of the supply chain when it comes to manufacturing and storing the product. The main production activity is usually done in factories and warehouses. The manager takes the fundamental decision when deciding for production, especially when resolving the tradeoff between responsiveness and efficiency (Ghosh, 2021). As the products are globally exported, they can have global suppliers to access the raw material. These goods are carried to the warehouse. After the products are finalized, they will be stored in warehouses that are near to the market or where it is easier to transport. Usually, the warehouse's location depends upon the nearness of the market, and for the quick response, they are located near the market. Then they are further moved to the regional warehouse (RWH), after that there are the goods moved to CFA (carry and forward agents) then the goods are provided to the distributor, as the products are globally supplied, hence it is essential to have global distribution channels and tie-up with the retailers across the globe and finally to the end-users. The product flow is sequential. However, the information flow is automated due to the successful installation of the information system for planning across different supply chain points even before the goods' physical movement. Besides that, many companies have successfully integrated themselves with their distributors, which has successfully helped the company integrate distributors directly and distributors into the supply chain (Ghosh, 2021).
Organizational Theories and supply chain management in Nepal
Organizational Learning According to this theory, the organization can engage in 2 types of exploitative and exploratory learning. The alliance among the supply partners could serve as a potential learning opportunity. This theory believes that the alliance member could provide the knowledge that could be easily shared in the supply chain to build dynamic capabilities. Therefore, increasing attention is given to alliance members and suppliers to build to order supply chain management (Bhattarai, 2015).
Resource-Based View/Theory: According to this theory, which suggests that competitive advantage could be sustained by harnessing the resources which are considered valuable, imperfectly imitable, rare, and are considered inseparable, according to this theory it states that interlocking of the firms in the supply chain will become a prominent source of the competitive advantage which becomes unbreakable and are even more challenging to replace. Therefore, the actor does not want to leave the supply chain and continue with it (Bhattarai, 2015). It suggests that purchasing and supply chain management are considered a significant source of the competitive edge.
Some of the major challenges of the Supply chain
Landlocked and rugged terrain: one of the major issues during the supply of electronic products is that Nepal's geography and topology have severely impeded efficient supply chain management. Nepal has historically been predominantly dependent on India for sea access. However, Since October 2018, China has become an alternative to Nepal. Apart from that, due to its rugged terrain of Hills, mighty Himalayan rivers mountains which have made a transportation challenge, it very difficult to transport the product which is one of the significant challenges when supplying the products to Nepal. The geographical environment is susceptible to disasters such as floods and landslides, which is again a barrier to the efficient transportation of goods. It is one of Nepal's principal reasons to keep up with the growing interdependency between the modern supply chain component. Apart from that, Nepal is also facing storage problems as they are still stuck with the godown concept of storing the goods where there is no systematic segregation of the items. Therefore there is a crucial need for Nepal to shift towards increasing its visibility and availability (World Bank, 2019) since the Nepal government has not taken any specific step, which is the primary reason for growing issues in the supply chain.
Logistic challenge: logistic is one of the essential elements for the efficient supply chain management. According to the World Bank's latest global logistic performance report, Nepal is ranked 144th in 160 countries. According to the report, the logistic component is considered to be escalated in the ranking due to their lack of progress made in custom procedures, timeless delivery, trade logistic quality, and tracking and tracking the system. However due to the lack of systematic transportation routes, increase in traffic, especially at ports, and lack of inadequate full-fledged operation of check post and excessive documentation process are the primary reason behind which is responsible for dealing for exchanging the goods to the desired destination (World Bank, 2019), besides this these issues also tend to hinder the possibility of change as well as social economy and growth especially for the manufacturing industries.
References
Bhattarai, R., 2015. Supply Chain Development Under Conflict Conditions: Case of Nepal. Supply Chain Design and Management for Emerging Markets, pp.283-309.
Center for International Private Enterprise, 2019. Re-Engineering The Supply Chain In Nepal - Center For International Private Enterprise. [online] Center for International Private Enterprise. Available at: <https://www.cipe.org/resources/re-engineering-the-supply-chain-in-nepal/> [Accessed 15 January 2021].