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
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.”
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