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.

Cargo Talk - - Front Page - KALPANA LOHUMI

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

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