Chas­ing the big pic­ture

Global dy­nam­ics and in­ter­nal busi­ness process changes are com­pelling man­u­fac­tur­ers and re­tail­ers to chal­lenge the sta­tus quo and rein­vent their sup­ply chains. Vis­i­bil­ity is gain­ing mo­men­tum as this en­ables sup­ply chain man­agers to op­er­ate more ef­fi­ciently

Cargo Talk - - Front Page - KAL­PANA LOHUMI

In to­day’s mul­ti­fac­eted sup­ply chain en­vi­ron­ment, Cus­tomer Fo­cussed Sup­ply Chain Man­age­ment (CFSCM) is a strate­gic ap­proach to ac­quir­ing goods and ser­vices. It is based on the idea that en­hanc­ing the cus­tomer’s over­all sat­is­fac­tion with the prod­uct or ser­vice in the long run will im­prove the prof­itabil­ity and ef­fi­ciency of the en­tire en­ter­prise. And this in­cludes re­la­tion­ships with sup­ply chain part­ners.

The strat­egy of CFSCM is to es­tab­lish col­lab­o­ra­tive re­la­tion­ships up and down the sup­ply chain, from up­stream raw ma­te­rial sup­pli­ers to down­stream fi­nal users of the prod­uct or ser­vice. With CFSCM, com­pa­nies can seek new and bet­ter ways to ac­quire goods and ser­vices that will in­crease their cus­tomer’s sat­is­fac­tion and im­prove prof­itabil­ity. Shar­ing Peter Drucker’s fa­mous quote ‘The pur­pose of any busi­ness is to cre­ate a cus­tomer’, Mans­ingh Jaswal, Di­rec­tor & CEO, Genex Lo­gis­tics, says, “Busi­nesses to­day have re­alised that in or­der to be suc­cess­ful in the mar­ket­place, they need to strengthen the cus­tomer fo­cussed or out­side-in sup­ply chain model.”

“Out­side-in sup­ply chain can­not be suc­cess­ful if the bridge be­tween the en­ter­prise and the cus­tomer con­tin­ues to be man­ual and slow. As a re­sult, the cor­po­ra­tions which were largely driven by en­ter­prise fo­cussed sup­ply chain have to mod­ify them­selves into cus­tomer fo­cussed plat­forms where in­for­ma­tion from cus­tomers can be sensed through the plat­form and ploughed back into the sys­tem to en­hance the speed of de­liv­ery and the over­all cus­tomer de­liv­ery ex­pe­ri­ence. This trend has started show­ing more in e-com­merce sup­ply chains and would soon fol­low in other seg­ments of B2B sup­ply chains.”

Shar­ing his ex­pe­ri­ence, R. Jayaku­mar, Chair­man, Jayem Lo­gis­tics says, “Over the years I have seen a big swing in this in­dus­try, SCM has evolved as a niche depart­ment in ev­ery in­dus­try and peo­ple are fo­cussed to­wards bet­ter lead times. They de­mand plan­ning, fore­cast ac­cu­racy, fill rate, in­ven­tory util­i­sa­tion and cost anal­y­sis. There has been a com­plete change in the way things are done to­day. Cus­tomer ser­vice is now more of cus­tomer re­la­tion­ship man­age­ment. Ad­ver­sar­ial re­la­tion­ship has changed to col­lab­o­ra­tive re­la­tion­ship. Func­tional fo­cus has lead to process in­te­gra­tion, ab­so­lute value for the com­pany to rel­a­tive value for cus­tomer. Train­ings have trans­formed to knowl­edge based learn­ing’s and man­age­rial ac­count­ing to val­ue­based man­age­ment.”

Talk­ing about trends, Malay Shankar, North Zonal Head, DIESL, shares, “New trends like The­ory of Con­straint ( TOC) and lean have started gain­ing ac­cep­tance with proven ben­e­fits. At DIESL, we con­duct a study of the ex­ist­ing sup­ply chain net­work of the cus­tomer and there­after sug­gest the op­ti­mum so­lu­tion keep­ing in mind the de­sired ser­vice level agree­ment and the pain ar­eas in the sys­tem.”

Ac­cord­ing to Ajay Khosla, DGM – Sales (Delhi-NCR), Jaipur Golden Trans­port, “The SCM con­cept has be­come rooted in the be­lief of many com­pa­nies in re­cent few years but ac­tu­ally the con­cept was in­tro­duced in the early 1980s. It is im­por­tant to recog­nise that all sup­ply chains have their own unique char­ac­ter­is­tic in terms of mar­ket, prod­uct, peo­ple and sur­round­ing coun­try cul­ture.”

“To­day com­pa­nies keep on in­creas­ing SCM com­po­nents to com­pete and stretch their mar­ket share. Their spend­ing and ac­tiv­i­ties in this area are re­mark­ably on the up-swing,” he adds.

Step­ping up the game

3PLs and car­ri­ers are re­spond­ing to in­creased ship­per de­mands by push­ing cus­tomer ser­vice to the fore­front. Many providers have adopted ser­vice-cen­tric cul­tures to en­sure they meet ship­pers’ ser­vice re­quire­ments and to gain a com­pet­i­tive ad­van­tage in the crowded out­sourced lo­gis­tics and trans­porta­tion field. The moot ques­tion is what are the tech­niques that a ser­vice provider should adopt to se­cure ag­ile and re­spon­sive sup­ply chain part­ner­ships that con­sider the cus­tomer at ev­ery level to avoid lost sales, ex­cess in­ven­tory and missed in­no­va­tion op­por­tu­ni­ties? Here’s what the lo­gis­tics ser­vice providers say:

“It is a mix of strat­egy, tech­nol­ogy, peo­ple and sys­tems that would cre­ate an ag­ile and re­spon­sive sup­ply chain. In an en­vi­ron­ment of con­tin­u­ous change, it would re­quire strong co­or­di­na­tion among par­tic­i­pants to lev­er­age the im­pact of peo­ple and tech­nol­ogy to ul­ti­mately en­rich the con­sumer,” points Jaswal.

Com­ment­ing on the tech­niques, Shankar shares, “We tend to al­ways do an ‘As Is’ study, un­der­stand the pain points, do ‘cross – pol­li­na­tion’ of best prac­tises from dif­fer­ent in­dus­tries (be­ing a 3PL adds to the ad­van­tage) and then try and work out a so­lu­tion for the cus­tomer.”

Busi­nesses have re­alised that to be suc­cess­ful in the mar­ket­place, they need to strengthen the cus­tomer fo­cussed or out­side-in sup­ply chain model To be ef­fi­cient, ba­sic tech­nique to be kept in mind while de­sign­ing a so­lu­tion or rolling out a new pro­ject is to know your cus­tomer

In the cur­rent com­pet­i­tive en­vi­ron­ment, com­pa­nies must em­brace ex­cel­lence in sup­ply chain man­age­ment tech­nol­ogy as core com­pe­tency at all lev­els through­out the com­pany laid process

“We suc­cess­fully con­ducted a study for an Auto Com­po­nent Ma­jor for their OEM sup­plies and in the process we were able to re­duce the turn­around time. For con­duct­ing this study, the cus­tomer needs to open up and truth­fully ex­plain the var­i­ous SCM pro­cesses in­clud­ing the flow of Man­age­ment In­for­ma­tion Sys­tem (MIS) apart from the phys­i­cal flow of goods,” he in­forms.

Jayaku­mar says, “For bet­ter ef­fi­cien­cies, ba­sic tech­niques have to be kept in mind while de­sign­ing a so­lu­tion or rolling out a new pro­ject that is, know your cus­tomer and un­der­stand his busi­ness model. It is nec­es­sary to iden­tify flaws and re­design the model, bring in ro­bust IT and max­imise the au­to­ma­tion, re­duce man­ual work, de­fine each process and set func­tional SLAs. Make lay­out sim­ple which will be vis­i­ble to work­force, de­fine in­ven­tory al­lo­ca­tion to min­imise ef­forts and last but not least have pe­ri­odic re­views.”

From man­u­fac­turer to user

“As mar­kets are chang­ing from pre­dictable de­mand state to highly un­pre­dictable de­mand state, a fully in­te­grated sup­ply chain is the need of the hour. But the un­der­stand­ing of the sub­ject within the prac­ti­tioner’s fra­ter­nity is lim­ited.

Peo­ple and or­gan­i­sa­tions are busy op­er­at­ing in their si­los. But this op­er­at­ing style may not sus­tain it­self for long, es­pe­cially in a cus­tomer fo­cussed era. An­a­lyt­ics is be­com­ing in­stru­men­tal in iden­ti­fy­ing de-cou­pling points for or­gan­i­sa­tions and de­ploy­ment of tech­nol­ogy is, to a large ex­tent, help­ing or­gan­i­sa­tions bridge the gap and cre­ate a uni­fied net­work which is bring­ing the man­u­fac­turer and con­sumer closer,” ex­plained Jaswal.

Echo­ing sim­i­lar views, Jayakumr no­ti­fies, “End-to-end sup­ply chain re­duces the in­ef­fi­cien­cies of var­i­ous ser­vices but gives bet­ter con­trol over plan­ning and ex­e­cu­tion. Deal­ing with process au­to­ma­tion and sin­gle ser­vice providers has its own ad­van­tages and dis­ad­van­tages but to bring uni­for­mity and dis­ci­pline in to the sys­tem, one should in­te­grate his sup­ply chain with a trusted part­ner.”

Ac­cord­ing to Shankar, “For ev­ery or­gan­i­sa­tion, there is thresh­old be­yond which they should out­source their SCM which when fully in­te­grated end to end, re­sults in mul­ti­ple ben­e­fits both in terms of cost, con­trol and agility.”

Go Tech

Tech­nol­ogy is bridg­ing the gap be­tween the en­ter­prise and the cus­tomer that is de­mand and sup­ply. It is not only en­hanc­ing the

New trends like The­ory of Con­straint (TOC) and lean are gain­ing ac­cep­tance with proven ben­e­fits. Pain ar­eas are be­ing iden­ti­fied

ef­fi­ciency of sup­ply chains but also en­hanc­ing the speed of de­liv­ery and mak­ing it more re­spon­sive. This will go a long way in en­hanc­ing the over­all de­liv­ery ex­pe­ri­ence to the cus­tomer. Rather than cre­at­ing sup­port­ive or­gan­i­sa­tional and in­teror­gan­i­sa­tional struc­tures, firms need to in­te­grate tech­nol­ogy to share real-time in­for­ma­tion.

As tech­nol­ogy has be­come eas­ier to ac­quire and de­velop,

3PLs and car­ri­ers are re­spond­ing to in­creased ship­per de­mands by push­ing cus­tomer ser­vice. Tech­nol­ogy play an im­por­tant role too

it has be­come a ne­ces­sity for in­te­grated end-to-end sup­ply chain. Com­ment­ing on the same, Khosla says, “In­te­grat­ing tech­nol­ogy that as­sists in reg­u­la­tory ob­ser­vance in to in­ter­na­tion­ally de­fined lo­gis­tics process is an­other as­pect which can­not be over­looked. To suc­ceed in to­day’s com­pet­i­tive en­vi­ron­ment, com­pa­nies must em­brace ex­cel­lence in sup­ply chain man­age­ment as core com­pe­tency at all level through­out the com­pany laid process.”

“From a tech­nol­ogy per­spec­tive, SCM in In­dia is still largely at the stage of Web 1.0 or less which means a huge op­por­tu­nity ex­ists as far as in­no­va­tion in sup­ply chain is con­cerned. Whether it is the de­ploy­ment of tech­nol­ogy, col­lab­o­rat­ing with the part­ners and cus­tomers or re-hash­ing de­liv­ery mod­els, there ex­ists a great deal of op­por­tu­nity at ev­ery level. Web 2.0 tech­nol­ogy is mak­ing its in­roads into sup­ply chains es­pe­cially in e-com­merce busi­nesses and it will have ma­jor im­pact on the sup­ply chain mod­els pre­vail­ing cur­rently. The jour­ney from Web 1.0 to Web 3.0 would be phe­nom­e­nal to watch,” enu­mer­ates Jaswal.

“To bring ef­fi­cien­cies in to SCM, tech­nol­ogy has to play a vi­tal role not only in ware­house man­age­ment but in freight for­ward­ing, cus­toms, trans­porta­tion and in­fra­struc­ture. Man­ual work has to be min­imised and fully au­to­mated sys­tems have to be brought in. We are still lag­ging be­hind de­vel­oped coun­tries in tech­nol­ogy and process atom­i­sa­tion and this is the right time for our govern­ment to digi­tise the in­dus­try,” notes Jayaku­mar.

“Tech­nol­ogy is an en­abler to ef­fi­cient sup­ply chain; it touches and af­fects ev­ery as­pect of SCM. With the on­set of e-com­merce, tech­nol­ogy plays an even more crit­i­cal role in main­tain­ing vis­i­bil­ity, trace­abil­ity and in­ven­tory man­age­ment to name a few. This en­hances cus­tomer sat­is­fac­tion. The tech­nol­ogy and knowl­edge for its ap­pli­ca­tion for more ef­fi­ciency is def­i­nitely avail­able in In­dia but due to the high cost of cap­i­tal and thin LSP mar­gins, its adop­tion is slow,” says Shankar.

“DIESL has keenly im­ple­mented many tech­nol­ogy so­lu­tions for en­sur­ing op­er­a­tionally sound pro­cesses like Trans­port Man­age­ment Sys­tem, Ware­house Man­age­ment Sys­tem (WMS), Or­der Man­age­ment Sys­tem

It is im­por­tant to recog­nise that all sup­ply chains have their own unique char­ac­ter­is­tics in terms of mar­ket, prod­uct, peo­ple and coun­try cul­ture

(OMS), Doc­u­ment Man­age­ment Sys­tem, and Cus­tomer Com­plaint Man­age­ment (CCM) Sys­tem,” he adds.

Mans­ingh Jaswal Di­rec­tor & CEO Genex Lo­gis­tics

R. Jayaku­mar Chair­man Jayem Lo­gis­tics

Ajay Khosla DGM Sales Delhi-NCR , Jaipur Golden Trans­port

Malay Shankar North Zonal Head DIESL

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