An­swer in col­lab­o­ra­tion

To make the sup­ply chain pro­fi­cient, ser­vice providers and end users need to come to­gether, as in­di­vid­ual busi­ness mod­els no longer work.

Cargo Talk - - Front Page - KAL­PANA LOHUMI

There was a time when sup­ply chain was not the most im­por­tant func­tion in any man­u­fac­tur­ing or­gan­i­sa­tion. But now stream­lin­ing it is a must-do task for gaps can lead to loss in sales. It is nec­es­sary to know the gaps that need to be bridged be­tween the end users and lo­gis­tics ser­vice providers. Ex­perts say that ev­ery com­mu­ni­ca­tion be­tween the ser­vice provider and the end user must be es­tab­lished elec­tron­i­cally over the email. This de­liv­ery method al­lows sup­ply chain part­ners to in­te­grate the doc­u­men­ta­tion data with their sys­tems, elim­i­nat­ing man­ual data en­try er­rors and de­lays. There is a need of ex­pe­ri­enced work­force in the sec­tor add ex­perts as it en­sures ef­fort­less eval­u­a­tion of a ship­ment in a most cost-ef­fec­tive and ex­pe­di­tious mode. Oth­ers share what makes it a must-do task.

Mans­ingh Jaswal, Di­rec­tor & CEO, Genex Lo­gis­tics, says. “His­tor­i­cally, sup­ply chain or lo­gis­tics ex­isted as a tiny part of a big­ger func­tion within the or­gan­i­sa­tions and did not ex­ist as a sep­a­rate func­tion it­self. The dis­tance of this func­tion from strate­gic lead­er­ship has caused a non-uni­form flow of in­for­ma­tion. Sup­ply chain de­part­ments have been the tra­di­tional in­ter­faces of the lo­gis­tics ser­vice providers/3PLs. As a re­sult, the ser­vice providers have been more re­ac­tive to events within the firms rather than lead­ing the changes through in­no­va­tive busi­ness mod­els or process re-en­gi­neer­ings.”

Conit­n­u­ing with the need for SCM, Jaswal adds, “Tech­nol­ogy has also re­sulted in the in­creased num­ber of cus­tomers but the in­creased cus­tomers are largely spread across a broader geog­ra­phy, in­creas­ing the dis­tance of back-end and front-end of firms and thus, have brought in ad­di­tional stress on sup­ply chain.”

Link­ing the front and back end of the or­gan­i­sa­tions is one of the key roles of sup­ply chain that has be­come in­creas­ingly dif­fi­cult.

And in­ef­fi­cien­cies in th­ese link­ages that is op­er­a­tions, are a drag on the prof­itabil­ity of firms.

Com­ment­ing on the need of the hour, Su­nil Kohli, Man­ag­ing Di­rec­tor, Ra­hat Cargo, says, “For a bet­ter un­der­stand­ing by the ser­vice provider and the end user, it is im­per­a­tive that a staff mem­ber of the com­pany is read­ily avail­able round-the clock as any prob­lem can emerge any time. The end user also needs to look be­yond the ob­vi­ous uses of his prod­uct to an­tic­i­pate any ex­tra com­pli­ance re­spon­si­bil­i­ties and the ser­vice provideer should be briefed ac­cord­ingly.”

Be­ing fully aware of the gov­ern­men­tal agen­cies’ re­quire­ments by the ser­vice provider is ex­tremely vi­tal so that the user could be made aware of the doc­u­men­ta­tion to avert any bot­tle­necks dur­ing the fi­nal stages of ex­port/ import for­mal­i­ties.

Vi­neet Agar­wal, MD, TCIL Group elu­ci­dates, “The rea­son be­hind it may be the com­plex­ity of this cross func­tional process. It in­volves a num­ber of man­age­ment chal­lenges which in­cludes ware­house and dis­tri­bu­tion man­age­ment, trans­porta­tion man­age­ment, in­ven­tory, de­liv­ery man­age­ment, staff man­age­ment, and so on. LSP, by be­ing part of plan­ning process of the end user, will en­able them to ex­e­cute the or­ders much ef­fi­ciently. Hence, the key to LSP suc­cess runs from Fore­cast-to-Or­der man­age­ment de­liv­ery as per agreed TAT and most im­por­tantly man­ag­ing en­tire re­verse lo­gis­tics pro­cesses. Value adds such as per­mit man­age­ment, cash/cheque col­lec­tion, re­turn­able and ser­vice man­age­ment also be­ing crit­i­cal ar­eas for a LSP.” He goes on to stress upon the fact that ro­bust tech­nol­ogy plat­form through an EDI re­mains one of the key ini­tia­tives for seam­less flow of in­for­ma­tion through­out SCM. And not ev­ery­one has adopted this in In­dia as yet.

But Ni­har Parida, Di­rec­tor– Sup­ply Chain, Uni­world Lo­gis­tics, points out a few gaps:

The peo­ple in­volved on both sides–from the ship­per side the in­for­ma­tion to the ser­vice provider is al­ways given keep­ing in mind cost re­duc­tion. Hence most of the time they give higher vol­ume pro­jec­tion to en­sure bet­ter rates.

Se­condly the com­plete scope of work is never dis­closed. The gener­ics are given but ex­cep­tions or finer de­liv­er­ables are never high­lighted. The changes within the com­pany are never dis­cussed in length.

With all this the ini­tial cost­ing pro­vided by the ser­vice provider goes hay­wire as the vol­umes never match, the de­liv­er­ables are more, the changes over a pe­riod of time are taken for granted.

Ac­cord­ing to Parida, ser­vice providers are the peo­ple who are han­dling a mul­ti­ple port­fo­lio of cus­tomers and they know dif­fer­ent ways to cut down the cost. “Cur­rently the ma­jor con­straint is the trust fac­tor and in­di­vid­u­als or com­pa­nies de­vis­ing their own solutions with­out tak­ing the ser­vice providers into con­fi­dence.

Not to men­tion the typ­i­cal month end sce­nario of In­dian mar­kets–80 per cent of lo­gis­tics hap­pens at the month end and there is an im­bal­ance of de­mand and sup­ply dur­ing this pe­riod. Ser­vice providers in lo­gis­tics are given the low­est pri­or­ity when it comes to pay­ment. This puts a very high strain on their cash flow. They bor­row to re­main in the mar­ket.”

Shric­hand Chim­nani, Di­rec­tor –Lo­gis­tics (In­dia), Schenker In­dia feels that with busi­ness mod­els sup­port­ing ex­tended col­lab­o­ra­tion be­tween lo­gis­tics ser­vice provider and con­sumers, there is large amount of data that needs to be pro­cessed ef­fi­ciently and timely.

“To make the turn­around time faster for the end con­sumers, we need to have a uni­fied or­der-to-ful­fill­ment process across the part­ner­ships with ven­dors and op­er­a­tions, in­creased vis­i­bil­ity and co­or­di­na­tion of ship­ments, re­duced trans­port and de­liv­ery costs and en­hanced cus­tomer ser­vice,” says Chim­nani.

“By adopt­ing vis­i­bil­ity and con­trol tower tech­nol­ogy, com­pa­nies en­able trade and cross­chan­nel, multi-party, end-to-end ef­fi­ciency and agility. A greater fo­cus on sup­ply and dis­trib­u­tor re­la­tion­ships, man­ag­ing the ‘nuts and bolts’ to get prod­uct to end cus­tomer ef­fi­ciently/ef­fec­tively and ef­fi­cient in­te­gra­tion of ac­tiv­i­ties and pro­cesses are a few steps to bridge this gap.”

Sup­ply chain or lo­gis­tics ex­isted as a tiny part of a big­ger func­tion within the or­gan­i­sa­tions and did not ex­ist as a sep­a­rate func­tion The end user also needs to look be­yond the ob­vi­ous uses of his prod­uct to an­tic­i­pate any ex­tra com­pli­ance re­spon­si­bil­i­ties The key to LSP suc­cess runs from Fore­castto-Or­der man­age­ment de­liv­ery as per agreed TAT and man­ag­ing the en­tire re­verse lo­gis­tics pro­cesses The com­plete scope of work is never dis­closed. The gener­ics are given but ex­cep­tions or finer de­liv­er­ables are never high­lighted To make the turn­around times faster for the end user, we need uni­fied or­der-to-ful­fill­ment process across the part­ner­ships with ven­dors and op­er­a­tions

Mans­ingh Jaswal Di­rec­tor & CEO Genex Lo­gis­tics

Vi­neet Agar­wal MD, TCIL Group

Ni­har Parida Di­rec­tor - Sup­ply Chain Uni­world Lo­gis­tics

Shric­hand Chim­nani Di­rec­tor – Lo­gis­tics (In­dia) Schenker In­dia

Su­nil Kohli Man­ag­ing Di­rec­tor Ra­hat Cargo

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