A lot has been discussed and debated upon the future and fortune of India’s supply chain during & post-pandemic. While companies have devised innovative ways to deal with the pandemic of such magnitude, it’s their supply chain’s resilient nature that helped them sail through the tough times. During the Celerity Supply Chain e-conference & Awards 2021, our first panel discussion on ‘India’s Supply Chain Revolution,’ moderated by Sanjay Desai, Co-founder & Regional Director, Humana International, industry veterans brought out exciting facets of new-age supply chains, which are tech-driven, agile, sustainable and resilient to deal with any eventualities. A report…
Akhil Srivastava, Director Planning & Logistics, BU ISEA, Ab InBev India
“By choice, I entered the supply chain and chose to be a supply chain professional because this is where the next level of differentiation lies.”
According to you, what has this global disruption taught to the global supply chain, and what will the successful supply chain companies do to bankroll their capabilities and invest more in a sustainable business model?
We all struggled for existence for two years in various ways, whether on personal lives or at professional fronts of saving lives & businesses. Just like Oxygen in personal life, money was critical for the business to keep afloat during trying times. To me, sustainability is all about being relevant and being differentiated.
As we move towards the end game, having witnessed the worst on both the personal & professional fronts, it's time for businesses to think afresh. Companies need to think beyond cost and profits. It has to be a holistic gain where everyone has to start with the end game in mind, which means we are all looking forward to a unique start. We are looking for ability & ambitions. While most of us and every business will have a purpose, there is also the ability, which needs to be developed to continuously monitor our progress, delivering results, both profitably & sustainably. It's about the ability and the willingness to be sustainable.
Ability because we still are looking for innovative ways to be sustainable; and willingness because it becomes difficult to execute on the ground unless you don't have that willingness to look at the ability to deliver. It would then just be a whitepaper. Time is right for us to start thinking about disruptions, work on implementing them on the ground, and make this a better world for all of us to thrive for a million more years.
How will businesses accelerate from here, especially talking about their transformation journey in matching demand and supply? What does resilience mean in the business?
Believe it or not, it's a new world, and we need to come to terms with it. The supply chain doesn't exist alone. It exists as a part of the value chain. To me, today's best practices lead to a dead end. There will be new unexplored paths, untried practices which will spring up, and that's what we talk about resilience. Resilience means imbibing new practices, being open to change, and looking forward to doing things better than yesterday to evolve much faster. Customers wouldn't buy any technology. Customers want a straightforward thing – solve my problem in a superior way than how you are doing today. That's where new businesses stand a chance to gain market access and penetration. The changes will happen across the value chain and not in a piecemeal format. By choice, I entered the supply chain and chose to be a supply chain professional because this is where the next level of differentiation lies. This is where the relevance of the companies comes into being. It was proven the hard way in the last two years through COVID. These disruptions will enable us to strike more change, ask for more collaborative actions, and bring visibility together.
We all are the beacon of light for that resilience to the world. While the world grew dramatically in the last three to four decades with globalization, withCOVID, the urge is to localize the entire thing. This means new technologies and the new resilience will help us embark on a new journey to make us resilient, differentiated, and, most importantly, sustainably relevant for the future.
How will organizations manage massive variability in demand, including the long-time fences, and align to manufacturing and distribution capabilities?
Short-term demand management is the real challenge. I think not knowing what will happen tomorrow or the day after is the biggest challenge. If there is some level of certainty, one can plan for it. Flexibility is the key aspect organizations have started imbibing to the 'T' – flexibility in their approach; it is not about the destination. Instead, it's about the journey; how do you plan it for today and tomorrow. When a person visits the office the next day, there will be the next set of variabilities; the key lies in planning those adversities. While flexibility will cost you, but today it's not about the cost; it's about being able to achieve and deliver something. Think short-term, even in contract management, which offers companies the flexibility to make quick decisions during eventualities.
Organizations are trying to be more agile and flexible. These aspects need to be brought into their DNA, and it has to be imbibed in their day-to-day businesses. Enjoying the journey and don't plan for the destination should be the motto that companies should work on.
How does fulfillment complement the whole manufacturing wave and efficiency, and do you think automation can play an enabling role in all of these?
There is a lot of automation at display in manufacturing but much lesser automation in distribution, and there's a reason for that. For any automation to succeed, the endpoints must be fixed, making it highly efficient and fast. The SKUs and products keep changing, how to manage such changing SKUs makes the whole distribution process complex.
It's not only about the product but also about which channels a product flows through, which is the fundamental change that we will witness post pandemic. That also has a significant impact on automation. For instance, when we discuss the fulfillment of B2B products vs. B2C products, they are distinct and contrasting. The technology incorporation is different.
Another complexity is that even within B2C, the technology required for handling 5K orders per day or 20K orders per day is highly diverse. How can companies plan for such a shift? Companies need to understand their order profile and a clear channel strategy to plan the distribution well. Planning technology entirely based on B2C strategy may backfire as consumers' preferences change at warp speed, which requires companies to be highly agile in bringing the technological changes. Companies need to work around strategies that entail lesser investments in fixed costs. They need to be critical in making automation investment decisions.
Ranjan Sharma, CIO & Head – Supply Chain, captive eCommerce & Quality Assurance, Bestseller India
“It’s all about becoming selfreliant so that you can respond on time and fast. You are agile enough to change and modify the way you work and deliver services that have more relevance from customers’ perspectives.”
What do you think will be the impact of risk management in the new world when supply chain professionals start to design their supply chains again?
Risk is something that we had never thought of, which would be such a massive transformation in no time. One must monitor three risk areas from a business standpoint – political, technological, and societal aspects. There is a lot of upheaval happening in the political system within the government and bureaucracy at different levels. Moreover, everyone is empowered to take different decisions right from the Taluka or the district level. Every business must keep an eye on the changing policy decisions and their impact on the business.
We need to be careful that such disruptions will not disappear and are here for the long haul. These changes and political decisions will continue to impact all businesses in different ways. This will influence decisions regarding the supply side, demand side where markets will be shut, markets will be operational at different times. On the supply side, where factories and the supply chain will be impacted because of the product's availability or manufacturing cycle itself, people at the distribution unit are available to ensure that this is being fulfilled.
On the other hand, technology has taken center stage. We would have never imagined that we would have to work from home, and it's only through digital means we will be able to stay connected with our peers. Organizations should make their processes digital because you can't sustain with broken processes, which used to run well when it was a partially digital process and partially a process that was still manual where you could control certain aspects of business without any digital intervention.
Besides, if companies have already taken the digital route, they need to keep upgrading themselves and upskill resources. People's lives have changed completely. Society at large has changed in terms of how a person behaves and how they react to things. All these aspects will transform the whole concept of risks that people and organizations are taking. One must keep in mind that it will not remain the same where we all used to happily come to the office, meet up with people, network with them, work together, and deliver the stated objective. We must learn to work in these environments where few people will be online, few will be offline, and one needs to deliver within those constraints. There are a lot of unknowns which one can't plan for. Risk management has gone toa different level altogether.
What do you think organizations need to do differently pre vs. post-COVID to continue on the path of recovery, which will not be smooth?
In the current times, it is no more about thinking of being able to have a differentiated product by sourcing it from anywhere in the world because there is so much disruption, there is so much uncertainty, a lot more is moving towards localization and being self dependent, being relevant to the current context, reducing the lead times, be able to source a product, deliver a product or a service as and when it is needed rather than placing an order six months ahead because challenges are multifold and it is growing every day with so many uncertainties around us.
Because of these geopolitical situations, which are arising where different countries are behaving differently, other countries have their challenges; with newer challenges arising in terms of power shortages and many more to come, I believe this is just the beginning. It's all about becoming self reliant so that you can respond on time and fast. You are agile enough to change and modify how you work and deliver services that have more relevance from customers' perspectives.
Prof. Ashok Pundir, NITIE
“Companies need to devise new ways of building resilient supply chains, which are truly backed by technology.”
How do you play the technology adoption lever – should it be a nascent technology or a big bang approach?
Technology is a crucial aspect based on which supply chains of today and tomorrow will run efficiently. As other panelists mentioned, supply chain visibility is essential and can only be achieved by the right technology implementation. There are demand forecasting disruptions happening, so on and so forth. Customers these days are also demanding visibility about their orders. People today have so many alternatives that they would not wait for a particular product. Whatever is available on the shelf will be picked up by them if it suits their need. This requires agility from companies. By seamlessly connecting various "organs," or functional units, with the supply chain, a supply-chain nerve center becomes the "enterprise brain." Its promise stems from a new ability to assess threats and opportunities across the extended supply chain earlier, so they can be addressed quickly and collaboratively. It all depends on who takes the lead, who will take the first-mover advantage. Irrespective of the expenditure required, companies have no choice but to get going with technology implementation. We are witnessing a nearly 'V' shaped recovery. It has become difficult to predict the demand pattern of many products. This pandemic has brought behavioral shifts which are difficult to predict. There is a fear that post-pandemic can lead to a bull-whip effect, resulting in a sudden demand surge of some products while certain products will remain unsold. All these complexities necessitate companies to take the right steps when it comes to technology adoption. Companies need to devise new ways of building resilient supply chains, which are truly backed by technology.
Do you think the government needs to encourage localized manufacturing and take care of supply chain disruptions?
Localized manufacturing has become much more relevant today than it was yesterday. There have been disruptions in logistics and the movement of materials, and these are just some of the challenges that COVID has brought to the fore. The automotive industry is a classic example of localized manufacturing, which follows this process right from the beginning. OEMs always prefer having their suppliers located in the vicinity, making the process faster and efficient even in times of disruptions. These avenues cut down the risk of the movement of materials, spare parts, and other components. You will find a whole Maruti ecosystem situated in and around Gurgaon, which is also true for Tata Motors in Pune. During the pandemic, too, these companies could function properly, albeit with government norms and regulations, which halted production for quite some time due to the scare of the COVID breakout in factories. A great paradoxical analogy that we can very well establish here is the shortage of chips. If India had chipmaking capabilities, Indian automakers wouldn't have faced the chip shortage, and the product rollout would have become much easier and faster. This is how localization manufacturing comes to the rescue in times of crisis. The government's recent announcement about the Gati Shakti master plan to accelerate the development of transportation and logistics infrastructure couldn't have come at a more opportune time when we are talking about putting an impetus on localized manufacturing as a part of the Atmanirbhar Bharat initiative. A surge in infrastructure development would only add fuel to the much-needed growth trajectory.
“Data analytics plays a crucial role in demand planning, and many exciting innovations are shaping up in this space as we move ahead.”
What are those elements that we need to manage when the supply chain would be more elastic?
Elasticity is also one of the parameters, which we learned during the pandemic. There are different elements to the whole piece, from demand planning until reaching the product to the shelf.
One needs to gauge how is the elasticity of your catalog, to begin with. We shrunk our catalog in the first place to ensure that we manage inventory well and we can ensure that the correct channel gets the right priority SKU. From the supply planning perspective, how can one shift strategy from downstream to upstream and start thinking about inventory cover rather than working in siloes between raw material inventory vs. finished goods inventory vs. inventory at the depots and last mile? Using technology as an overarching theme because the first parameter that businesses need is transparency to achieve these goals. All these are good to talk about in the forums but aren't easy to implement because companies don't have information, intelligence, and investment on transparency and visibility, including trucks, track & trace, inventory, VMIs, etc. All these have a certain level of prerequisites, which one should be aware of, build a holistic strategy, and then question every element of the value chain whether it is elastic enough for businesses to make sure that it is resilient, which not only gives you cost but also service competitiveness.
Demand is changing daily. How are companies managing the back-end supply chain, especially in FMCG?
One big epiphany of the COVID-19 pandemic is that do companies need forecast because forecasting becomes next to impossible in such disruptive times. How exactly a supply chain team builds a process, which moves closer to replenishment? How can companies build coherent processes? Demand planning is not an easy subject in these times. Many disruptions have already started taking place, and the emergence of tech-led start-ups is an excellent sign for the future of the supply chain in the country. Data analytics plays a crucial role in demand planning, and many exciting innovations are shaping up in this space as we move ahead.
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