Nuances of supply chain
Making the supply chain proficient is a much required task in today’s competitive scenario. CARGOTALK discusses the effective ways to simplify the supply chain management in an organisation.
Supply Chain Management (SCM) has always been a rough task. There was a time when supply chain was treated as a tiny part of a bigger function within the organisations and did not even exist as a separate function itself. Secondly, the representation of supply chain has never been done at the highest level in the organisational hierarchy due to which it has hardly been part of the core strategy of firms. Supply chain has always considered as a support function represented by a junior staff and a firm generally consider sourcing, finance, marketing and sales as core part of the strategy.
But slowly and gradually, the importance has been realised and it’s growing increasingly important for business of all sizes to clean up their supply chains, go green and eliminate any questionable practices.
CARGOTALK discusses the intricacies of supply chain with the veterans to know how to take control of the segment. Explaining the importance of supply chain in an organisation, Ashish Asaf, MD & CEO, SA Consultants & Forwarders, says, “The best way to ensure a smoothly running supply chain is to make sure that everyone collaborates and keeps a track of valuable assets at every stage like track of inventory diligently and periodic assessment which would give access to accurate logging of information to achieve higher levels of efficiency.”
“We have started a multi user facility to benefit us as well as the customers, as they are cost friendly and flexible as per the requirements. Having a tight grip on the inventory and stopping the revenue leakages that are happening due to multiple handlings got added to our benefits,” shares Duttprasad Kapur, Country Head - Supply Chain Management, Jeena & Co.
According to Nitin S Bharal, CEO, Committed Cargo Care, the practices varies depending upon the need. He listed the best practices which has to be followed for a seamless SCM thereby increasing profitability as an end result:
Develop Strategy: We need to define the need and opportunity and accordingly coming up with a game plan that allows for the ability to optimise the team, processes and technology within the organisation to deliver the optimum value.
Aligning Supply Chain: SCM needs to define its strategic role and start executing value added activities across all aspects of supply chain.
Recruit professionals in Supply Chain: Committing to hire best skill and talented people who are strategic thinkers, analytical and team player.
Sourcing Strategy: Plan in such a manner to eliminate redundancies, refining the business process, and continuous improvement. This will help in lower cost, higher quality, an improved customer service leading to more predictable and positive outcomes.
Manage total cost of ownership: Study the processes and understand all key areas to control unseen cost. Though, it is
To ensure a smoothly running supply chain, make sure that everyone collaborates and keep a track of valuable assets S&OP helps in gaining the visibility and agility to improve product management and promotional planning S&OP is helpful for having a lean logistics resulting a positive impact on inventory cost, and inventory carrying cost The benefits of this systematic approach impacts areas ranging from product quality to order turn-around times
a cumbersome process but it is important to go through the complete process meticulously. Supplier Management Process: Lot of emphasis on proactively managing supplier/vendor relationship to stay vibrant and healthy. Fund flow management: Keeping a constant vigil how the money flows in a complete chain helps you mitigate challenges and leverage opportunities.
“Deploying a software solution that streamlines business processes to save time, efforts and simplifies procedure to eliminate miscommunication and would cut cost, while improving accuracy and productivity. The tools and techniques implemented to supply support system should be updated by embedding sustainability. And additionally, it is imperative to keep a constant check on all the monetary transfers made within the supply chain system. By that you can adjust your pricing plans, promotional strategies to create demand of the service you offer; monitoring cash flows gives you a foresight needed to mitigate challenges and leverages opportunities,” informs Asaf. “By implementing SCM systems, business are able to reduce waste, overhead costs and shipping delays in a scientific way. The benefits of this systematic approach impacts areas ranging from product quality to order turnaround times,” enlightens Piyush Kumar Singh, CEO, Indus B2B Solutions.
“To streamline the SCM, there is a need to bring new ideas to the workplace that improve profits and productivity. Expand your knowledge and remain current with supply chain trends and developments. Promote a common supply chain language across your entire organisation. And, demonstrate your long-term commitment to the supply chain clients,” adds Singh.
“First of all, a supply chain strategy is required which aligns with your business strategy and helps you to achieve the desired results. Break the strategy into an actionable plan. Then, make someone responsible for executing this strategy and plan; the person should be senior and qualified, reporting directly to the CEO and be a part of the top management team. Followed by this, a competent team working in the supply chain organisation, that understands supply chain and has necessary skills to deliver results. Depending upon the complexity and scale of operations, the organisation must have the right IT systems to support the flow of supply chain data and to help in decision making,” notes Rahul S Dogar, Director – Strategy & Business Development, Holisol Logistics.
“Moreover, develop longterm relationship with key components of your supply chain, i.e. suppliers of goods and services both. Understand and decide on trade-offs that you are willing to make (driven by your business strategy), use the concept of total cost of ownership (TCO) instead of individual components. It is always important to regularly optimise instead of optimising once in a while – SCM is highly operational in nature and is an everyday job. Lastly, define and decide performance metrics, measure it regularly (daily, weekly, monthly) and act on areas needing importance,” he adds.
With some more doing, Malay Shankar, Head Business Development, TVSLSL DIESL - 3PL Division, continues, “One should look at the SCM chain holistically rather than in pieces. Also, outsourcing to one stop solution providers saves cost overall and offers better accountability and outsource only if you have reached a critical mass.” “Always enter into KPI-based agreement rather than cost-based for enhanced control over operations. Not to forget, deploy and embrace technology in an integrated manner; this requires initial capital investment, but streamlines supply chain to provide better visibility, increased efficiencies and reduced costs in the long run,” he adds. S&OP is imperative
Sales and operations planning (S&OP) process must be viewed as one of the primary processes used to run the business, if one wants to have smooth supply chain. Echoing similar views, Asaf says, “S&OP provides a ‘window into the future’, to see potential problems ahead of time; so that one would be aware about the decisions they have to make, take proactive and corrective action and prevent potential issues from becoming problems that spiral out of control. Moreover, it is all about determining whether future demand can be met with projected supply in a way that meets financial objectives and customer desired service levels.” Explaining the role of S&OP process, Singh, elucidates, “The process is built upon stakeholder agreement and an approved consensus plan. To help stakeholders agree
on a plan of action based on real-time data, S&OP software products include dashboards that display data related to equipment, labour, facilities, material and finance. The purpose of the dashboards is to provide the stakeholders with a single, shared view of the data.”
“S&OP is highly helpful for having a lean logistics resulting a positive impact on inventory cost, inventory carrying cost, and the ageing of stocks,” points Kapur. Believing that the role of S&OP is very essential in the present scenario, Bharal tells, “The process helps in gaining the visibility and agility to improve product management and promotional planning. S&OP is a vehicle for communication that puts the vision, strategy, financial and tactical plans of business into one unified operating plan in order to optimise the allocation of resources.” Says, Dogar, “S&OP’s plays a big role in achieving this much-desired balance by bringing lot of data intelligence and organisation functions together and preparing a plan which balances not just the demand and supply, but a lot of other factors which are important in delivering the desired results. It also becomes an iterative process where this balance is achieved with the optimal outcome for the business.” From the 3PL perspective, Shankar notifies, “Many 3PL organisations have started being a part of their customers’ S&OP processes which allows them to scale up the physical aspects of deploying the SCM strategies. S&OP supports sanitisation of the input data so as to avoid GIGO, collaboration between the operations team and commercial team apart from sales and marketing and defining action items across time horizons.” Technology, a key driver for SCM?
Expressing his thoughts, Asaf says, “In today’s supply chain landscape, technology is becoming the key driver of an organisation’s success, innovation and competitive edge. Initially, changes are difficult but at the end they are beautiful and an effective supply chain requires the ability to be responsive and open to change.” “Technology is a boon as far as SCM is concerned but it has brought in some kind of stress too. The interesting side effect is that it drove competition into markets. This competition drove costs and prices down. The fact that small businesses now had access to computing power, while the internet drove other changes to what we now consider as the supply chain; small manufacturers discovered that they could effectively focus on their core products and competencies and outsource the rest, thus increase profits. Companies recognised that data needed to be shared if supply chains were to work effectively,” explains Kapur. Bharal expresses, “Technology has become a key driver for an organisation success nowadays. The supply chain is becoming increasing lean in its operations. We are always looking for ways to improve service, reduce cost and increase return on investment. Effective supply chain are defined by the efficiency of their processes, as well as their flexibility and reliability, and new technologies are proving valuable in achieving these goals.”
“The choice of sourcing and selling anywhere globally and domestically has created a very complex web of supply chains – it’s unimaginable to manage this complexity without using technology. There are many cutting-edge tech-solutions available these days with successful cases globally and locally.” points Dogar.
There is both yes and no to technology. Explaining further, Shankar says, “Yes, it has created stress to SCM because the expectations from teams have increased owing to transparency and visibility at every stage. And, no because in its absence, it would have been difficult to manage the ever increasing complexities in the business environment and fulfilling the customer demands.”
As per the complexity & scale of operations, the organisation must have the right IT systems to support the flow of supply chain data One should look at the SCM chain holistically rather than in pieces. Outsourcing saves cost and offers better accountability
Duttprasad Kapur Country Head - Supply Chain Management Jeena & Co.
Nitin S Bharal CEO Committed Cargo Care
Ashish Asaf MD & CEO SA Consultants & Forwarders
Piyush Kumar Singh CEO Indus B2B Solutions.
Rahul S Dogar Director – Strategy & Business Development Holisol Logistics
Malay Shankar Head Business Development, TVSLSL DIESL - 3PL Division