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.
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