Celerity January - February 2020

SUPPLYCHAINTRIBE.COM January - February 2020 Volume 4 Issue 1 For private circulation only

IN CONVERSATION WITH Akhil Srivastava, Director – South Asia, AB InBev

ACE YOUR PACE The Highs & Highs of Implementing Automation in your Value Chain

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CONTENTS

January - February 2020 Volume 4 Issue 1

14

COVER STORY

Big Bang Transformation or Incremental Approach?

Supply chain automation needs to be approached with focus, commitment to achieve scale, and with a long-term and enterprise-wide strategy to get the best RoI. This Cover Story delves into this very aspect and questions the very fundamental if there needs to be big bang transformation or an incremental approach for companies going for automation.

9 OPINION Wading through Uncharted Waters

24 Harnessing the Sun

Anish Tripathi, Entrepreneur and Management Advisor, decodes what’s in store for the Supply Chain community in 2020, and onwards!

K Shridhar, Head Supply Chain Management, L&T Construction, Solar International BU, Sharjah, UAE, shares that a well-knit network and strong integrity & collaboration can ease the complexity.

10 LEADERSHIP

28 PERSPECTIVE

Orchestrating the Value Chain

According to Akhil Srivastava, Director – South Asia, AB InBev and Venture Partner - Agroecology, there is a need to foster Triple-A Supply Chain.

INTERVIEWS

6 On a Nimble Footing

Dr. Rakesh Sinha, Head – Global Supply Chain, Manufacturing and Information Technology, GCPL, highlights the importance of demand-drive supply chains.

A Symbiotic Relationship

Views & opinions on the Industry-Academia connect & beyond

30 FOCUS Automation in 3PL

The conventional wisdom that automation is not the first thing that you think of in 3PL, is changing rapidly, writes Lionel Stanton.

34 RECAP News and Views Trending Globally

Editor: Prerna Lodaya DISCLAIMER: This magazine is being published on the condition and understanding that the information, comments and views it contains are merely for guidance and reference and must not be taken as having the authority of, or being binding in any way on, the author, editors, publishers who do not take any responsibility whatsoever for any loss, damage or distress to any person on account of any action taken or not taken on the basis of this publication. Despite all the care taken, errors or omissions may have crept inadvertently into this publication. The publisher shall be obliged if any such error or omission is brought to her notice for possible correction in the next edition.

The views expressed here are solely those of the author in his private/professional capacity and do not in any way represent the views of the publisher. All trademarks, products, pictures, copyrights, registered marks, patents, logos, holograms and names belong to the respective owners. The publication will entertain no claims on the above.

No part of this publication can be reproduced or transmitted in any form or by any means, without prior permission of the publisher. All disputes are subject to the exclusive jurisdiction of competent courts and forums in Mumbai only.

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PUBLISHER’S NOTE

VISION 2020 Dear Readers, The Year 2020 is going to be a watershed year for many corporates big and small. In the early part of the 2010 decade, many had articulated their Vision 2020. This year will show the vision versus achievement.

Just to quote some numbers, the world economy will only grow 3% this year. This happens to be the slowest rate of expansion since the global financial crisis started in 2008. The International Monetary Fund was a little more optimistic in its latest World Economic Outlook, forecasting 2020 growth of 3.4 per cent but warning nevertheless of a “synchronised slowdown and uncertain recovery”.

With political uncertainties, trade tensions, populism and protests around the world, the world economy has never had so many detractors.

What is speeding ahead uninterrupted though is the rise of technology and data. Digital giants like Google, Amazon and Facebook are re-shaping the world with their AI algorithms exploiting mountains of data residing with them.

Whatever it may be, the companies who have effectively deployed technology and embraced digitalization will be able to better withstand economic uncertainties.

Wishing you all a successful 2020 and a better decade ahead!

Charulata Bansal Publisher Charulata.bansal@celerityin.com www.supplychaintribe.com

Published by Charulata Bansal on behalf of Celerity India Marketing Services Edited by: Prerna Lodaya • e-mail: prerna.lodaya@celerityin.com Designed by: Lakshminarayanan G • e-mail: lakshdesign@gmail.com Printed by: Xposures, A 210, Byculla Service Industrial Estate, D K Cross Road, Byculla, Mumbai- 400027.

Logistics Partner: Blue Dart Express Limited

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5

INTERVIEW

INTERVIEW

On a

meet variations in demand. Our agility comes from the fact that we resize the buffers every day. We are also strong proponents of daily end-to-end planning, which is possible due to a strong heuristics-based replenishment system. Finally, flawless execution on a daily basis is the key to fast response.

NIMBLE FOOTING “Supply chains have come a long way from being reactive to responsive, moving now towards agile.

As the consumers’ tolerance time comes down, supply chains need to respond to changing demand patterns in real time, which requires demand-driven working. Supply chains are getting more automated and digitized with the specific objective of being more flexible and move faster,” shares Dr. Rakesh Sinha, Head – Global Supply Chain, Manufacturing and Information Technology, Godrej Consumer Products Limited (GCPL).

Retail has been one of the most significant industries to watch out for in the last few years. Coupled with FMCG, the possibilities are immense.

How would you like to describe the transformational journey?

FMCG and Retail make a formidable combination to serve the consumers better. A win-win partnership approach helps take out unnecessary transaction costs and delays in the system, thereby benefitting the consumers. Initiatives like ECR (Efficient Consumer Response) have helped the ecosystem develop a symbiotic relationship between them.

How has supply chain revolutionized over the years?

Supply chains have come a long way from being reactive to responsive, moving now towards agile. As the consumers’ tolerance time comes down, supply chains need to respond to changing demand patterns in real time, which requires demand-driven working. Supply chains are getting

6 CELERITY January - February 2020

more automated and digitized with the specific objective of being more flexible and move faster. Of late, I also see more awareness building up towards sustainability in every facet of supply chain.

What are the USPs that define the supply chain of Godrej?

We are strong proponents of demanddriven planning instead of being forecast-driven. Our focus continues to be on better demand sensing, getting more flexible in fulfilling demand and improving our response time on a continuous basis. Being demand-driven also requires good collaboration with our vendors and customers. Our customer order fill rates are amongst the highest in the industry.

What are the challenges that come your way knowing that you manage such a large SKU? Portfolio complexity has gone up in recent times, which requires us to

What are the prerequisites of creating a best-in-class supply chain network? How has Godrej achieved the mean feat?

Dr. Rakesh Sinha has headed several functions in Godrej Soaps including Strategic Planning, Information Systems and Marketing. He has also served on the Board of Governors of the Institute of Chartered Financial Analysts of India (ICFAI) and is actively involved in several key initiatives within the company like E-Commerce and Efficient Consumer Response (ECR). He has completed his B. Tech. in Mechanical Engineering from I.T., BHU and postgraduation in Industrial Management from NITIE. Dr. Sinha enjoys trekking and music.

be even more flexible and nimble in meeting consumer demand. Evolution of alternate delivery channels has made the fulfilment process a bit more complex and requires us to operate at even higher levels of agility. Our focus on demand-driven planning, flexibility and fast execution has definitely helped in meeting these challenges.

Please enlighten us on the transformational supply chain spectrum of Godrej Consumer Products.

We have redesigned our entire end-toend supply chain to maximize agility.

Our supply chain differentiator is the planning process, which is integrated across sourcing, manufacturing and delivery. It takes actual demand signals from the market as an input and converts it to distribution plan, production schedule and procurement orders. As a part of the design, we do keep strategic inventory buffers at select nodes of the supply chain to

The first and the most critical prerequisite is to change the mindset from forecast-based planning to demand-driven planning. The entire supply chain should be designed for agility, based on the principles of TOC and Demand-driven Material Requirements Planning (DDMRP). Supply chain design and planning heuristics should be built to ensure concurrent response from all the nodes rather than a sequential response.

Frequency of planning is another key parameter, which should be maximized.

If fresh demand signals are picked up on a daily basis, planning frequency should also match it. Flawless execution and managing by exception are the other principles to keep in mind. Flexibility in every operation goes a long way in making the supply chain more agile.

You have been quite vocal about the importance of TOC. Can you share with us as to how it has helped Godrej?

TOC has helped us in creating new industry benchmarks in customer service levels. Our product availability metric continues to be the best in the industry. TOC has also helped in improving product freshness and bringing obsolescence under control.

Finally, TOC has been the key behind our capacity debottlecking and flexibility enhancement initiatives.

Please share with us one of the challenging projects managed by you at Godrej?

We were the first adopters of TOC in the country, way back in 2004.

We improved upon several standard heuristics of TOC to bring in better co-ordination, smoother operations and faster response. It was a challenge to map these heuristics in a standard ERP. We used several workarounds to

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map the routines in MFG/PRO, the ERP in use in 2004. It was quite a complex process. When we moved to SAP in 2007, we had to remap the routines to standard SAP functionalities. We faced several challenges again in the APO implementation due to our specific requirement of DDMRP processes, daily buckets and daily replanning, which aren’t standard functionalities in APO. It has been a challenging journey, but I am quite happy that we accomplished what we wanted to, despite all these obstacles in the way.

What are the parameters on the basis of which you select a 3PL? The two parameters which decide the choice of a 3PL are flexibility and response time. Other parameters like financial stability, sustainability and operational cost serve as the base filter criteria.

How has technology been a key enabler in making sure that your products reach the end consumers at the right time and right place?

Technology is at the centre of our agile operations. Since daily demand sensing is the starting point of our planning

and execution system, our distributor salesmen use hand-held terminals to capture pristine retail orders. Our TOC based replenishment heuristics built in SAP and APO use this demand signal to plan distribution, production and procurement on a daily basis. We also use the emerging demand trend to resize our inventory buffers every day. Industry 4.0 technologies like IOT, Computer vision, Drones and Robotics find their place in relevant areas to improve flexibility and response time.

We use Analytics to track the health of our supply chain, identify exceptions and take corrective actions on a daily basis.

How can companies develop an agile supply chain?

Companies wanting an agile supply chain have to first change their mindset and move away from forecast-based planning to demand-driven planning.

It will be futile to take up the agility journey without the mindset change.

Designing an agile supply chain requires us to go back to the drawing board and work out the new planning system afresh. Location of strategic inventory buffers and their sizing is an important

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INTERVIEW

We have redesigned our entire end-to-end supply chain to maximize agility. Our supply chain differentiator is the planning process, which is integrated across sourcing, manufacturing and delivery. It takes actual demand signals from the market as an input and converts it to distribution plan, production schedule and procurement orders.

As a part of the design, we do keep strategic inventory buffers at select nodes of the supply chain to meet variations in demand. Our agility comes from the fact that we resize the buffers every day. part of this exercise. Once these are in place, replenishment heuristics would run the supply chain quite efficiently.

Improving flexibility and response time in all parts of the supply chain (sourcing, production and distribution) are parts of the POOGI (Process of Ongoing Improvement). Agile supply chains would encounter new constraints from time to time. TOC Focusing Steps help us in identifying and dealing with these constraints in a timely manner.

We have been hearing a lot about digitalization in supply chain. How progressive are the Indian companies in implementing the same?

There is a lot of buzz about digitalization and many companies are trying it out. It’s quite important to pick and choose the specific areas where digitalization would make a real difference. In our context, IOT, Computer vision, Drones and Robotics help in improving flexibility and response time in several legs of the supply chain.

Which have been some of the most striking supply chain models you have seen and admired across the globe?

The earliest and most talked about case was the Walmart – P&G model of replenishment-based supplies, which helped both of them considerably. I have personally found TOC model to be quite robust for managing FMCG supply

8 CELERITY January - February 2020

chains. DDMRP is now catching on.

How is Godrej working on supply chain sustainability?

Godrej is committed to the concept of Shared Value and focus on the triple bottom line – People, Planet and Profits. We have an ongoing program called Good & Green, focusing on five key parameters – increased usage of renewable energy and reduction in energy consumption, water consumption, GHG emission, waste generation. We have made excellent progress on all these fronts. We have also extended our sustainability focus to the vendors.

The nemesis of any forecastbased supply chain is mismatch of stocks – shortage at some locations and excess at others. These excess stocks sometimes need relocation requiring additional transportation and consequent adverse environmental impact. Agile supply chains working on TOC principles don’t generate excess stocks and are, therefore, more sustainable by design. We are committed to make our entire extended supply chain sustainable.

What are the trends we will be witnessing in times to come?

Consumer demand is expected to get even more volatile with faster and omnichannel delivery requirements.

These trends will force supply chains to become more agile in future. Focus

on sustainability is also expected to improve with stricter compliance norms.

You have been a part of the industry for over 25 years, what are the crucial learnings you have gained and what would be your advice to the new age supply chain managers?

Being consumer-centric has been the biggest learning for me. If we are focused on serving the consumers better, everything else falls in place.

I have also seen that optimizing for agility is far superior to optimizing for cost. Finally, we should concentrate our efforts on focused improvements which would make the maximum impact - it is an ongoing journey and the focus should point to whatever is constraining the flow at that point in time. New age supply chain managers should first get emotionally invested into the business and focus on consumers. There is no one-size-fits-all supply chain solution.

It has to be custom designed for each company based on its unique context.

If not a supply chain professional, where would you have been or would like to be today?

If not a supply chain professional, I would have probably been a nuclear physicist. Laws of mathematics and physics, governing the entire universe, fascinate me. Many of these laws are quite useful in modelling our supply chains.

OPINION

Wading through

UNCHARTED WATERS

The potential convergence between contract manufacturers and 4PL logistics providers can fundamentally change the way manufacturing supply chains are structured in times to come. Through this opinion piece, Anish Tripathi, Entrepreneur and Management Advisor, decodes what’s in store for the Supply Chain community in 2020, and onwards!

T

HE Indian supply chain community stands on the cusp of momentous change as the year 2019 ends. The last three years have brought about transformational changes in the Indian economy, from Demonetization and GST, to IBC, the effects of which are still playing out. This, combined with the impact of the massively disruptive changes that technology is bringing about (AI, autonomous driving, disintermediation, fractional ownership, etc), will have a major impact on the supply chains of companies. The effects of these changes may play out in the Indian economy in ways that we cannot even imagine now.

The removal of state-level barriers to movement in the form of checkposts brought about by GST has not only sped up the movement of goods, but also increased the utilization of trucks and other transportation vehicles. Demonetization combined with GST-linked E-way bills has broken the back of fly-by-night, cash-only, off-the-record transportation service providers. This will increasingly facilitate the formalization and scaling up of the logistics sector. Doing away of constraints that forced companies to maintain wasteful warehouse presence in multiple states just to get CST benefits, will lead to a consolidation of the supply chain. Big data and data analytics will drive supply chain decisions, thereby creating the need for a qualitative shift in the skills profile of the manpower involved in the logistics sector.

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Unless supply chain efficiency is a core competence or strategic imperative (like in FMCG or Retail), companies should start preferring to outsource their logistics operations to 3PL / 4PL operators – frankly there are really no 5PL operators around) and stick to their core competence. Companies will also realize that the core strategic processes that you should definitely not outsource are customer acquisition/experience, and product design & development.

Increasingly, more and more of everything else will get outsourced to aggregated service providers. The potential convergence between contract manufacturers and 4PL logistics providers can fundamentally change the way manufacturing supply chains are structured.

What remains to be done?

One under-appreciated area is the need for reviewing and restructuring contracts between customers and vendors. The nature of the relationship itself is likely to change, where it will almost become difficult to define who the customer, or who the vendor is, or whether it is a principal-principal, or principal-agent relationship. Besides the end-consumer, everything else will become hazy, and most likely take on the characteristics of a consortium, collectively servicing the consumer, and sharing the pie proportionately. Given that the contract act itself is an underappreciated and often misunderstood law in India, lawyers will need to develop new skills in drafting complex

Anish Tripathi is a Mechanical Engineer (from Hyderabad) by Qualification and has nearly 30 years of experience across multiple sectors and geographies. He is presently working as an independent consultant, while also actively working in a start-up in the field of gene-tech and diagnostic healthcare.

He has worked in areas like Supply Chain, Strategy, Business Process Engineering (BPR), JIT, TQM, Kaizen, Kanban, IT Strategy, GST, Post- merger integration, Performance measurement, Balanced scorecard, etc.

He has specifically helped companies in improving manufacturing flexibility, inventory reduction, production planning and control, capacity enhancement and optimization, cost reduction, order fulfilment planning and customer-centricity initiatives.

yet watertight contracts. Simple linear supply chains are likely to take on the shape of networks. Unfortunately, despite the positive pressure of GST, every transaction might not see the flow of money, despite the flow of value. The one-to-one flow of money correlating with every transaction might morph into a one-to-many distribution of money, based on who collects money from the end-consumer, who all have contributed to value creation, and what is the proportion in which they will split revenue amongst themselves.

These are not problems that we have grappled with before. Supply chain professionals have not really educated themselves on tax optimization, let alone legal optimization through efficient contract drafting. These are uncharted waters and supply chains need help from a wide variety of professionals to manage the challenges that are likely to be thrown by technologies of the future. The industry would be well advised to go back and re-read that old management classic – “Lateral Thinking” by Edward DeBono, as a lot of lateral thinking would be required to survive in this new world.

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LEADERSHIP

LEADERSHIP

ORCHESTRATING THE VALUE CHAIN “While strong management is needed to foster a Triple-A supply chain, technologies such as IoTbased solutions can play a role in improving the monitoring and orchestration of supply chains.

There is an opportunity for nascent and yet undeveloped technologies to facilitate traceability, finance, logistics, trade, and other activities across the value chain to improve system orchestration,” asserts Akhil Srivastava, Director – South Asia, AB InBev and Venture Partner, Agroecology.

You have been pioneering supply chain domain for over a decade by bringing innovative practices. What prompted you to join this industry?

The use of new technology in supply chain is necessary to move the business to a more productive path. Over the next few decades, a rising global population will put great pressure across resources and existing systems.

Technological innovation in supply chain is one lever that can address some of the environmental, social, and economic challenges and opportunities in the growing industry. As has historically been the case, advancements in technical applications within supply chain can serve as an enabler for improvements in business models to build productivity and welfare in smarter ways.

To me, the world is navigating fast from conventional pipeline models of business to digitally native business models. While servicing on the sales side early on during my career, I envisioned that the most successful business models will be those which embrace innovative disruptive initiatives to build agile and responsive value chain.

While FAV (Freshness, Availability and Visibility) is the spirit to build and scale successful business, I saw businesses flounder/deaccelerate when the focus is only on sales and visibility. Those businesses, which took a holistic approach of building agile supply chain, flourished both in profitability and customer loyalty by being more responsive and following the FAV spirit in totality. These early insights influenced my decision to gravitate from

10 CELERITY January - February 2020

Akhil Srivastava is B.Sc., M.B.A in Agribusiness and M.S. in Management and is also JN TATA & Forbes Marshal Scholar at Graduate School of Business, Stanford University. He is an Agripreneur and supply chain professional with over 12 years of progressive E-2-E supply chain experience with fortune 500 firms and successful startups. His experience of working and collaborating across end-to-end business domains, in conjugation with innovative technology and systems automation by utilizing skills of change management and design thinking, has been of help in building successful and scalable businesses globally.

pure sales to build customer centric business models with focus on supply chain.

How complex is the supply chain in India and how can it be synchronized by effectively utilizing all the channels?

India is a growing and focus market for any and every global MNC. Anything (product or service) which can strike a chord with masses has an enormous opportunity to scale and become high grossing venture when one puts 1.4 Bn multiplier to the ventures. So purely, it is the scale which puts India on top of business footprint for any business.

A substantial Promise is a degrowing world for several ventures. Having said that India has several limiting factors including but not limited to

ease of doing business, transparency in operations, infrastructure and semiskilled workforce. The latter two are being addressed with Private Public Partnership models but these are not at scale. Hence India has an opportunity to leapfrog from its current status to delivering the promise at scale.

The current challenges in today’s business often surround value drivers in operational excellence (i.e., improving productivity, efficiency and quality).

Supply Chain is thus being critical lever to synchronize functionalities across internal and external circle of influence for business to create winning models.

Leveraging technologies such as AI, IoT, Blockchain, Cloud Computing, can evolve Intelligent Supply Chain for monitoring raw materials, production, distribution, consumers and circular economy. These will help in increased performance, efficient manufacturing, higher consumer engagement or even evolve new industries.

You have recently authored an interesting piece on “Blockchain Redefining Identity Preservation across Supply Chain”. Could you share some more insights into the same?

The use of new technology is necessary to move the world’s agriculture to a more productive path. Over the next few decades, a rising global population will put great pressure on food systems.

While the overall demand for food is expected to be met over this timeframe, it is unclear whether it can be met in a sustainable manner. Technological innovation is one lever that can address some of the environmental, social, and economic challenges and opportunities in the growing food and beverage industry. As has historically been the case, technology can serve as an enabler

for improvements in food system productivity and welfare.

Creating an efficient supply chain involves fostering an efficient flow of information, materials, and money between suppliers and customers.

Efficiency is only one element of supply chain performance. Research has shown that Agility, Adaptability, and Alignment of supply chain actors are more critical in developing a competitive advantage for firms. While strong management is needed to foster a Triple-A supply chain, technologies such as IoT-based solutions can play a role in improving the monitoring and orchestration of supply chains.

There is an opportunity for nascent and yet undeveloped technologies to facilitate traceability, finance, logistics, trade, and other activities across the value chain to improve system orchestration. Blockchain is one technology that has the potential to be applied to improve system orchestration in several areas. Initially used as a key component of the digital currency system known as Bitcoin, blockchain works as a decentralized database with a shared distributed ledger. Digital transactions are stored in sequentially ordered and cryptographically protected blocks, building traceability across the value chain and reducing the need for intermediaries. Companies in agribusiness have begun to use blockchain to create systems that will record the journey taken by food through the supply chain. Given that transactions are unchangeable under blockchain, it can play a key role in getting trusted information to end consumers.

Trade transactions can be complex and cumbersome, involving numerous entities, including buyers, sellers,

logistics providers, banks, customs offices, and other third parties. Lack of trust, long shipment distances, and slow feedback loops add cost, complexity, and time to the process.

Trade transactions are largely still paper-based, with original documents forwarded around the world. Blockchain has the potential to be applied for monitoring social and environmental responsibility, improving provenance information, facilitating mobile payments, credits and financing, decreasing transaction fees, and facilitating real-time management of supply chain transactions in a secure and trustworthy way. Firms in Blockchain are working on tracking and tracing systems for agribusiness companies to build trusted relationships between stakeholders.

How have consumer preferences changed over the years and how are companies quickly aligning themselves to meet the ever-evolving consumer expectations?

I would say a food supply chain in a typical context right now is a prehistoric or a pre-dated system. For example, when the system was made, initially we had the infrastructure of rails and roads through which the food system, which is grown by the farmers, goes to the aggregation points, which we call elevators. On these elevators, the system then goes across and mixes all the grains together and then get distributed globally.

So the food system as of now is pretty complex in terms of supply chain.

As I say, it goes from farmers’ field to various intermediaries in between, which could include holders, processors, manufacturers, or even just storage agencies and traders. And from there,

I visualize that in today’s competitive business ecosystem, consumer-oriented companies have an incredible opportunity to redefine their supply chain models and extract synergy across businesses by embracing innovative technologies as cornerstone in corporate business strategy. I aspire to establish scalable integration models helping transform Supply Chain as a profit generating function leading to onset of Collaborative Commerce. supplychaintribe.com

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LEADERSHIP

LEADERSHIP

Chief Supply Chain Officers (CSCOs) increasingly control 50% or more of a company’s annual budget, responsible for cost leadership and optimization of operations. More importantly, CSCOs play a vital role in strategy development, product and service innovation, and even sales by virtue of collaborations, which gets ingrained in their leadership style collaborating diligently across organizational footprint. They know the business (inside out) by virtue of their supply chain functional leadership. These leaders, with holistic business knowledge actively influencing organizational outcome by optimizing internal and external stakeholders, are best suited for CEO roles. I personally envision CSCO elevation to CEO roles provides organization with a sustainable growth trajectory for building and scaling GREAT COMPANIES banking on SUPPLY CHAINS OF FUTURE!

it goes and travels across the global value chain going all the way to the end consumer after passing 7-8 steps, which means our food system is more like a pipe system and is not a platform or digitized system.

This entails that there is a very limited flow of information or, as we call, information symmetry. And that has been the prime cause in terms of high inflation and changes in the commodity prices ever since the trading platforms have come up. This information system has been becoming more ubiquitous, and that has resulted in lots of consolidation recently within the agriculture value chain. We recently have seen a merger between Dow and Dupont, a merger between Bayer and BASF. But we have also seen that within the trading vertical, which was predominantly dominated with A, B, C, Ds of the world, which is Archer Daniels Midland, Bunge, Cargill, and Louis Dreyfus is also consolidating.

Eventually, that means the supply chain for agriculture, both at the upper stream and at the trading window, which is down the stream, is becoming a monopolistic scenario.

As I told, in short, we will need a complete overhaul to meet the requirement efficiently and sustainably.

The food grown today is not being consumed in the same local economy. It travels half the globe. What’s produced in China comes all the way to US. What’s produced in the US goes all the way to China and vice versa, across globe. So the issue, which is happening right now is the movement of food through the supply chain: A – efficient and effective? B – sustainable?

What I see is we are at a verge of another green revolution. And this time, it will come with an onset of infusion of technology, which will help solve issues with higher operational efficiency, building up supply chain orchestration, and higher level of transparency in the system.

The technology in itself, of course, is somewhat value-neutral, and hence there is to be a lot of work which has to be done in terms of integrating this technology with the activity, which is involved with people across the value chain. Which means, we are looking at more analytics and automation. We are looking at efficient and effective business management, maybe no more individual farms but probably business farms, which are much more analytical & automated and capable in terms of infrastructure with their own marketplace and an overall innovation system with the help of new age

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technologies. That is what I am seeing in agricultural supply chain. That is what is happening as we see more and more innovative companies coming up to disrupt this value chain, again, from these existing inefficiencies across the system.

You have been quite vocal on driving change through sustainability. Can you kindly cite some examples that can help logisticians drive holistic benefits for the organizations?

The next 10-15 years will likely see rapid changes in the food system, driven by changing consumer demand, technological advances, trade dynamics, and other factors. To achieve the United Nations Sustainable Development Goal (UNSDG) Number 2, to “end hunger, achieve food security and improved nutrition, and promote sustainable agriculture” by 2030, the FAO is calling for more productive, efficient, sustainable, inclusive, transparent, and resilient food systems. The FAO has discussed promoting agribusiness development through various initiatives aimed at resolving critical factors across the agriculture value chain to mobilize private sector investment that improves productivity and efficiency.

These have helped evolve entirely new ways of designing food value

While FAV (Freshness, Availability and Visibility) is the spirit to build and scale successful business, I saw businesses flounder/deaccelerate when the focus is only on sales and visibility.

Those businesses, which took a holistic approach of building agile supply chain, flourished both in profitability and customer loyalty by being more responsive and following the FAV spirit in totality.

These early insights influenced my decision to gravitate from pure sales to build customer centric business models with focus on supply chain.

chain, with technologies such as cellular agriculture and gene editing evolving quickly. Examples of cellular agriculture involves producing agricultural food products from cell cultures. Firms such as Impossible Foods, Memphis Meat, Motif Ingredients, have been transforming the landscape for labbased meat and food production by designing food producing systems that use fewer natural resources. Gene editing, which involves modifying DNA in a particular cell or organism, is being explored to improve the sustainability of food, feed, fiber, and fuel.

How do you envision supply chain network of tomorrow? What are the upcoming trends that we are to witness in times to come?

The next step would be, in terms of getting the new age technologies like artificial intelligence, machine learning, blockchain to get infused into the pre-dated agricultural system. And that would help provide a chain of custody for building:  Operational efficiency  A much more efficient, orchestrated supply chain because, as we said, it’s about the global value chains, and  Build a lot of transformational symmetry for information as well as transparency of the overall value chain right from the farm to the consumer.

I see an opportunity, which persists to cultivate a more comprehensive food system that can be designed for optimally meeting demand. So, the higher public and private investments in developing countries will be happening right now as we see a lot of investments happening in Asia and Africa. These activities will help close the gaps between these low-productivity areas.

Technology investments will also boost up in both, developed and developing countries and will be part of a multipronged approach to sustainably feed a growing population with a more productive, efficient, inclusive, transparent, and resilient value chain.

chains through innovative business models. By the way, they do not own product but have the most evolved supply chain. Tim Cook and Mary Barra, on the other hand, evolved careers from supply chain leadership to successful CEOs. So, what is the common cord here?!

Chief Supply Chain Officers (CSCOs) increasingly control 50% or more of a company’s annual budget, responsible for cost leadership and optimization of operations. More importantly, CSCOs play a vital role in strategy development, product and service innovation, and even sales by virtue of collaborations, which gets ingrained in their leadership style collaborating diligently across organizational footprint.

They know the business (inside out) by virtue of their supply chain functional leadership. These leaders, with holistic business knowledge actively influencing organizational outcome by optimizing internal and external stakeholders, are best suited for CEO roles. I personally envision CSCO elevation to CEO roles provides organization with a sustainable growth trajectory for building and scaling GREAT COMPANIES banking on SUPPLY CHAINS OF FUTURE!

Would be really interested in knowing from you, “Why is supply chain the new pathway to CEO?” Two of the most powerful leaders in the world – Jeff Bezos and Jack Ma own the biggest e-commerce companies, which have fundamentally disrupted supply

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COVER STORY

COVER STORY

Big Bang Transformation or

Incremental Approach?

SPEED is what defines the growing proliferation of automation in supply chain in India and globally as well. The word aptly connotes the essence of what automation delivers to companies going for automation as it stands for S – Speed; P – Productivity; E – Efficiency; E – Excellence; and D – Differentiation. Having said that, experts have rightly pointed out that supply chain automation needs to be approached with focus, commitment to achieve scale, and with a long-term and enterprise-wide strategy if they want to get best RoI. This Cover Story delves into this very aspect and questions the very fundamental if there needs to be big bang transformation or an incremental approach for companies going for automation…

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HE Global Logistics Automation Market is forecast to reach US$120.08 billion by 2026, according to a new report by Reports and Data. The logistics automation market is rising rapidly in the global market owing to the proliferation of the adoption rate of automation in the logistics chains globally. The convenience of lesser human effort and enhanced overall operational improvement is fueling up the market growth of logistics automation.

McKinsey Global Institute estimates that the transportationand-warehousing industry has the third-highest automation potential of any sector. Similarly, Capgemini Global Digital Supply Chain survey found that automation initiatives in procurement

and supply chain functions deliver the highest returns as compared to any other function. Automation delivers an ROI in the supply chain of 18%, three percentage points more than for HR and four percentage points more than for IT. For other functions, including finance and accounting, research and development, and customer service, the difference was even greater.

Towards this, Rupesh Narkar, Director – Sales, Swisslog Logistics, Inc., shares, “With the onset of warehouse space consolidation, Indian warehousing industry is witnessing rapid emergence of large warehousing spaces. Larger spaces are driving the need for efficient warehousing operations. With a smaller setup, operating efficiencies and costs were not a priority since the loss or impact of inefficiencies was bearable.

As per the research by Knight and

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Frank, the future will see reduced needs to carry inventories thus substantially reducing number of small warehouses.

With the progressing of this trend, warehouse operators are aiming on reaching higher capacities in terms of better space utilization, higher productivity in terms of maximum goods inbound/outbound and improved efficiency in terms of better resource utilization.”

“The other factor gaining prominence is to gain a competitive edge in market. With the everincreasing number of warehouse operators entering markets each day, customers today have a wide choice to shop the most economical warehousing and fulfillment vendor. For the warehouse operators, their existing and new customer are demanding faster fulfillment times, competitive

rate contracts and error free operations.

This is pushing them (mostly running manual operations) to rethinking their ability to extract full capacity and efficiency out of the current setup.

This is where automation is helping in providing a great solution meeting all these needs,” adds Narkar.

According to him, another major factor is digitalization of processes, which is the cornerstone of next generation of supply chain. Intelligent, reactive, data-driven and flexible solutions or warehouse management system forms the backbone of digitalization. Automated receiving, accurate identification, easy tracking in the process, optimization, inventory control, assured order fulfillment and reliable operations are all made possible at a finger’s click using automation systems.

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Dheeraj Shah, Head – Supply Chain Management – Retail Business Group, TCS, categorizes the drivers of automation in three parts: The Need: As the customer expectations are getting tremendously more demanding on the supply chain, there is a need to accelerate the whole promise fulfilment proposition for supply chain. "Fast" is the new normal. So, the paradigm in which we are today is “What I want today is what I needed yesterday, however I am not late, but your supply chain is slow!” The other dimension is productivity and efficiency to drive costs down is extremely important with tremendous amount of pressures on balance sheets of organizations. Hence Supply Chain has to end its role of being an onlooker to active driver of

a key "value" enhancer through cost reduction for the stakeholders and shareholders of the company. In some cases, the availability of workforce and the variations in learning curves, trade unions, expectations of accuracies and quality as well as dependency on casual and contract labor which makes managing supply chain very difficult is driving the growth of automation.

Some of the industry functions in supply chain exhibit characteristics which need very high level of accuracies, quality and repetitiveness for e.g. Healthcare, Automotive, Hi-Tech. The Supply Chain in these industries, therefore, have mandated the need to embrace automation.

The Aspiration: Indian organizations aspire to be globally competitive and demonstrate that their operations,

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COVER STORY Mihir Contractor, Senior Vice President, Nilkamal Ltd. Factors driving the growth of automation in supply chain • Higher mix of varieties as consumption grows & consumer tastes evolve • Lower tolerance for shipping mistakes as consumers mature • GST enabling consolidation & creation of larger warehouses • Improvements in our road infrastructure making long-distance logistics economical thereby making larger factories & warehouses viable • Higher throughputs of raw materials, work-in-process inventory, and finished goods • Increasing land prices making high-rise warehouses with automated storage & retrieval more viable • Increase in labor costs • Decrease in the weighted average cost of capital from either debt or equity to fund automation projects • Economies of scale & local manufacturing of automation in India, which lowers cost & timelines.

functions and supply chain processes are on par or even better than the global practices. While this might be a qualitative view, the quantitative dimension to this is that the aspirations of growths or efficiencies are exponentially higher and to realize those Supply Chains cannot leverage traditional approaches and hence need to embrace automation or even at times hyper automation. The other key factor is “Differentiation” through “first mover advantage” which organizations want to bring into their Supply Chain.

The Access and abundance: As we say, Supply Chain 4.0 is about harvesting abundance and leveraging the ecosystems. The advent of technology, research in automation and development automation solutions has sizeably increased. With this access and availability, it is easy for Supply Chains to adopt from the plethora of options at their disposal the best that suites their needs and objectives. In addition, in India there is now adequate availability of infrastructure including electric power etc. which makes the business case more palatable over what it was earlier.

Seconding his views, Jitender Lalit, Lead Commercial - Logistics (Lifestyle Business), Raymond Ltd., adds, “Freight Management System (FMS) works closely on principles of Supply Chain

4.0 and has tremendous potential in automating the distribution in supply chain. It breaks the traditional ways in which distribution is currently done.

According to him, use of FMS will bring visibility in distribution process, mitigate risks, and reallocate the existing manual freight bills checking resources to various other core tasks. This set of innovative digital technology that it offers could help companies reduce lost sales by 50 – 65% and cut distribution costs by 15 – 30%. Improved planning would make inventory reductions of 35 – 75% possible and supply chain administrative costs could be 80 –

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120% lower.”

Ashok Kumar, Head-Intralogistics Solutions, Godrej & Boyce Mfg. Co. Ltd., informs that the choices available to the customer is a major factor that is influencing automation decisions. The market is highly competitive irrespective of the Industry, and hence the need to provide the client a superior product and delivery experience are proving to be very critical. This necessitates companies to look at various technologies, systems and methods to create a unique value proposition.

Besides the need for competitiveness, the introduction of

GST has led to growth of Grade A warehouses that are bigger and taller.

Manual operations are no longer adequate to meet client expectations in terms of variety, volume and speed from such warehouses. Managing higher varieties and lower batch volumes are impossible for manufacturing from the economies of scale point of view. And hence, warehouses are expected to intervene and deliver these expectations.

In such a scenario, organizations have no choice but to look at automation technologies in warehousing too.

For Umesh Madhyan, Associate Vice President Logistics, Hindustan Coca-Cola Beverages Pvt Ltd., the biggest factor in the Indian supply chain is the growing startup phenomenon. This is not only creating new solutions; it is also helping localize a lot of automation hardware.

Organizations have realized over a period of time that it is important to embrace new ideas and startups.

Solutions which used to cost a bomb half a decade ago have suddenly become payback intensive. This also helps create competition and lets the

user organizations experiment and win. On the other hand, technology is evolving at a rapid pace. Application of any technology including Industry 4.0 has started to make sense because they are complementing each other.

Mobility spreading faster and making mobile device the most commonly used technology makes it easier to apply new age technology for easing out processes. The biggest realization of replacing manually executed jobs Vs. machine getting more closer to accurate is defining the change. There

Jitender Lalit, Lead Commercial - Logistics (Lifestyle Business), Raymond Ltd. The major reason for technological transformation across various industries especially supply chain is due to VUCA world and the efforts to reduce human dependency especially for labor intensive activities. Supply chain stakeholders have a common pressing need to automate the distribution processes, thereby reduce direct as well as indirect costs, improve operational efficiency, reduce the nuances in tracking and confirming consignments, increase the percentage in adherence of SLAs, and reduce the loss in sale for non-availability of material.

Ashok Kumar, Head-Intralogistics Solutions, Godrej & Boyce Mfg. Co. Ltd. Data Management Technologies are already seen as mandatory. Material movement with or without Intelligence is an area that will experience more and more automation in near future. Loading and unloading operations are other aspects of warehousing that will see more mechanization or automation. Largely, mundane manual operations will be replaced with automation. supplychaintribe.com

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Umesh Madhyan, Associate Vice President Logistics, Hindustan Coca-Cola Beverages Pvt Ltd. Automation and technology are the very core of the Logistics disruption, not only in India but globally. Of course, the biggest push it is going to create is multi-skilling of people. This will be the critical need as we move on with our journey on automation. The other most important element would be the intervention from the government. Fortunately, so far for us the government has been extremely responsive on the changes, we are the first ones to create a policy on drones. This will really help us going forward. Today is the need to embrace this change, embrace every startup and technology. If these happen at the right time with the right intent, there would be a day when logistics will become a strategy and a technology job rather than placing trucks. are accuracies beyond execution and analytics possible with implementing smarter technology solutions.

Indian companies’ receptiveness towards automation Logistics companies are intrigued by the potential of automation but wary of the risks. Accordingly, they are investing conservatively. McKinsey research estimates investment in warehouse automation will grow the slowest in logistics, at about 3 – 5% per year to 2025. That’s about half the rate of logistics companies’ customers, such as retail and automotive (6 – 8%) and pharmaceuticals (8 – 10%). Offering insights from equipment manufacturers’ perspective, Mihir Contractor, Senior Vice President, Nilkamal Ltd., asserts that automation should be viewed as a return on investment and not as a cost.

Multiple factors are considered while estimating the return on investment in an automation project. Typical savings arise from improving labor productivity, minimizing manual mistakes, & maximizing floor-space utilization.

Since the interest cost to borrow funds is relatively high & labor costs relatively low in India vs. developed countries, the return on investment in India is comparatively low.

However, many businesses with highthroughputs-&-mix are warming up to the overall benefits of automating their material handling processes. In many such operations, there is no choice but to automate. Other than costs and savings, there is also a moral question: Should successful Indian businesses

deploy automation to eliminate labor, or continue providing opportunities to the millions of un-employed so wealth trickles down & we can eliminate poverty?

He adds, “Not every project requires automation. And not all customers are receptive right away to the benefits of automation. The main challenge is of acceptance by leaders who envision the change, as well as the implementation team who have to accept & execute the change. The other challenge is selecting vendors who have successfully implemented similar automation projects in India.”

Ashok Kumar seconds, “Across the Industry segments, there is indeed a realization that automation would ultimately benefit them. But the investment decisions are very much mixed. At this moment, we note that the e-commerce sector finds it imperative to automate functions within their warehouses, whereas the other sectors are in the experimentation mode. Current complexities seem to force some interim investments but automation for future readiness is yet to gain momentum.”

He adds that it has proven to be very challenging so far. While the enhanced productivity levels are the only measurable parameter for an automated operation, the qualitative improvements are very difficult to assess on an immediate basis. For example, how do you measure the cost of a delivery error and justify against an investment for automation?

And that too when there is either

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inadequate legal systems to protect a consumer or lack of awareness of such legal systems? Also, the clients most often look at automating only a part of their functions. How do you assess and attach a customer benefit to a small investment in operation automation, when the client satisfaction or experience is linked to the overall performance of the organization?

Customers not having complete visibility of their future operations and resultant complications is another hurdle. They expect the solutions to be scalable and flexible. Building robust, comprehensive automation solutions with flexibility to meet future complications is very challenging and the solutions get expensive. Often, we hear customer expectation of a ROI in the range of 3-4 years. Considering that we have largely managed our warehouse operations with relatively economical manpower and with absence of cost of error measurements, meeting such a ROI expectation has indeed been very difficult.

According to Ashok Kumar, hurdles to automation are multifold: a. Addition of Manufacturing / Warehousing Infrastructure in an unsystematic manner over time has led to cramped up spaces and chaotic material movement within and across facilities. Automation requires certain amount of discipline and consistency in material movement. b. The skill level of people to adopt newer technologies. Automation will always come with certain rigidity.

DIGITAL FITNESS

“Planning is everything in automation for the solution to last long, sustain the rigour of operations, and achieve the required throughput along with ensuring highest safety standards,” highlights Sangeet Kumar, CEO & Founder, Addverb Technologies.

How is automation shaping the future of logistics?

Driven by increasing customer expectations on faster time-to-markets, delivery accuracy & smaller and customized deliveries, many companies are resorting to automation powered with technological advances. ‘Digital fitness’ is a guiding force in exploiting a whole range of new technologies, from data analytics to automation and platform solutions.

How difficult has it been for you to convince customers on automation advantages?

One of the biggest challenges has been the resistance from customers to adopt the latest technology. So, our team changed their approach and started “Educating the Customer”. This helped build credibility and change the very way in which people think about warehousing; for instance, typically, Indian customers talk about warehouse space in Sq. Ft. terms, but once you start targeting to utilize the height of the warehouse, storage space is measured in Cubic Feet & there is more space utilisation in your existing warehouse. This leads to value unlocking for customers in the same space. As the customer could see their productivity and space utilization going up by 200-300%, adoption eventually became easier.

Another biggest challenge was in building a stable and reliable supplier base across the country and globally.

Manufacturing of these high-tech industrial products require lot of spare parts from across the globe and procuring them at the right time and right quality significantly impacts a project delivery & performance. But with time, business expansion and streamlining of our operations, we overcame that challenge.

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What have been the challenges in implementing automation in the already up & running platform?

Limitation with Solution Engineering: It is very important to understand that automation is not merely application of some products, but it involves detailed engineering determining the flow of material, unit of handling, storage mechanism etc. While doing a greenfield project, you can innovate with these parameters, but while doing a brownfield project, you have relatively less freedom and it is not a wise idea to disrupt the ongoing operation. It becomes critical to integrate the existing operation with the new automated operation. Also, many a times, infrastructure becomes a challenge as it is difficult to change any infrastructure in an ongoing operation.

Integration with Software Platforms: Integration in case of a greenfield project is much easier. With a brownfield expansion project, the software layer like a WCS or WES must be integrated in such a way that it does not hamper the ongoing operations or change the existing software integration drastically. Also, in many cases, this leads to higher number of touch points and as such increases the complexity of the software integration. We address this problem through our modular software architecture.

What’s the step by step approach to go for incremental automation in logistics?

Planning is everything in automation for the solution to last long, sustain the rigour of operations, and achieve the required throughput along with ensuring highest safety standards. Identifying the need for an automation or drawbacks of the existing systems is the first step towards automation journey.

However, to get the right automation

solution, one should be clear about the objectives. Because one objective can be achieved through multiple solutions and there is a plethora of technologies available today, so choosing which one to opt for is a daunting task & requires both business understanding as well as process understanding backed by data analysis.

Some of the critical parameters to be considered are: • Maturity of the technology that is being proposed • Process dependencies – What are the systems to which the output of this automation will be going to and what are the input feeding systems to it and any special details to be considered • Criticality of the solution – What are the performance expectations in terms of capacities creation, SKUs to be handled, orders to be processed, productivity to be achieved. etc • Existing infrastructure – How flexible are existing systems, processes and their capability to support this automation, sometimes a semi-automated solution might yield better results compared to a fully automated system.

• Automation Strategy – Knowing where your facility is on the automation path and determining where you would eventually like to be. It will help in determining where and when to start/upgrade automation.

• Budgets & ROI expectations – One of the first parameters to be evaluated. Comparison of existing total operational costs with the estimated cost of an automated solution will help in better decision making.

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COVER STORY Switching over to such systems that offer very little flexibility has been difficult for the workforce to accept and adopt. c. The misconception that the automation is there to reduce the dependency on people. This has led to poor adoption, misuse of systems and hence the organizations not truly benefiting from their investments. Automation decisions need to be positioned better within the organization.

Giving a real life example, Jitender Lalit shares that most of the time automation projects require high investment with high risk and uncertainty w.r.t ROI, however, we have explored various avenues and taken the conscious decision to invest in automation. We have started involving the stakeholder from day 1 & make equal responsibility for the success of the overall project. Due to the involvement of stakeholders from Day 1, it also helps in identifying the complexity in the operations and simplification of the same.

According to Umesh Madhyan, the biggest challenge faced by every Supply Chain Leader to implement technology has been payback. Some of the ideas and solutions are so new that it is nearly impossible to estimate the payback because you are doing it for the first time. The best way to overcome them is to go through a proof of concept. Once there are a few successes on this road, the journey becomes a lot easier.

The second biggest challenge is change management. It is obvious for users to resist change and not trust something new. The process they have been performing manually for ages - how can it be done in seconds by a machine? There is a need to work harder on managing people and training them to accept these changes. There is no point in implementing new age solutions which take 6 months to get accepted. This not only delays payback - it also puts the implementation partners success at risk. “We are the most advanced technology driven supply chains & logistics in the country today & we have learned the hard way.

Today - our biggest priority is to train people and make the entire supply chain system future ready,” adds Umesh Madhyan.

COVER STORY Going for automation According to Rupesh Narkar, the core of warehouse automation is to gain the control of process, better manage the inventory and efficiently move goods between different processes.

Automation fits well in process that are monotonous, require high operating efficiency and high throughput.

Also, processes that are demanding a lot of resources with fairly basic to moderate skill levels are good cases of automation (e.g. receiving, conveyance, picking, packing, storage/ retrieval, etc.). Also, cases which need solutions on productivity issues are the best candidates for automation.

The fundamentals for unlocking productivity and improving operations in warehousing lies in the basic concept of gaining more visibility, improving tracking and thus gaining a control on processes. Only after you track, you can control. Only after you control you can optimize. Automation technologies that offer positive inventory control, intelligent material flow, flexibility and tracking form the ideal mix of material handling solutions in the plant or warehouse.

Umesh Madhyan cautiously highlights that the worst that could happen to automation is doing it for the sake of it. “I see organizations talking about AI or IoT without a business case. Technology solutions should be implemented to solve a business problem or upgrade a process. One should use a technology to leapfrog into the destination strategy of supply

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chain. To me, each and every problem that one could think of has a solution.

A problem as simple as inventory count can be resolved by a drone counting your cases in the warehouse, without production stop and without sales getting any impact. One has to first spend time in building a strategy that defines the problems to be resolved.

Technology solutions are to be a result of that strategy,” he adds.

Step by step approach to go for incremental automation The key is to determine objectives of automation and align it with the business strategy. Example, an objective could be to double the throughput flow in the existing warehouse or maximize the space utilization or achieve a 24x7 operation with improved productivity etc. It is very important to think through the end-to-end objectives of automation. There is no point automating one process only to create further bottle necks. A classic example is automating the internal inventory storage without considering what bottlenecks would be generated in dispatch process and subsequent conveyance of goods to shipping docks.

The investments that have been made in transforming the warehouses have paid dividends. However, in some cases, just transforming without alignment to long term strategy has resulted in diminished returns. By automating a process, you will generate plenty of capacity but shift the bottle neck further down the process. For this, break

the processes down into distinct areas.

You achieve a first-cut result by tackling only part of the larger problem and then work your way through. Always first go for the low hanging fruits resolve the issues with it and then proceed with higher up fruits, all in alignment with the long-term strategy, quips Rupesh Narkar.

Mihir Contractor believes the best way to start thinking about automation is by inviting a few large automation vendors to walk through & assess existing operations where-in the leadership & operations team believe there is scope for improvement. It is important to select vendors who have successfully executed projects in India vs. elsewhere in the world.

The leadership and operations team can then evaluate the proposal from each vendor. The vendor can also arrange visits to similar successful implementations. The return on investment based on each vendor’s proposal can subsequently be assessed.

And then the customer has to make that leap-of-faith, especially if it is their first automation project.

Ashok Kumar feels that if we don’t map our value streams, operations, systems/infrastructure and understand the inter connectivity, incremental automation decisions can never be taken or justified. Cross-functional team discussions will be very crucial in identifying the correct bottlenecks that slow down the entire flow of materials or require huge amount of energy. These areas will be the ideal

Rupesh Narkar, Director – Sales, Swisslog Logistics, Inc.

candidates for automation. Automation can’t happen in isolation. Strong process orientation, appropriate investment in support systems would be essential.

Seconds Jitender Lalit, “Automation is not a single solution which can fit all, it varies from situation to situation and most important how the solution is contributing to meet the Mission, Vision, and goal of the organization.

In the case of complex operations, it is better to design solutions on the go, considering the complexity, however implementation should happen in phased manner. It will help in on-going fine-tuning across various process & deliver goods results.”

On the similar note, Umesh Madhyan also remarks that there could be solutions which are important but may not provide an immediate payback or return on investment. It is extremely important to consider a phase wise approach where efficiency improves gradually, and the solution can be upgraded to the destination design. Illustrating an example, he adds that from a conventional block storage warehousing, one can move to a high density and throughput solution by implementing manually operated shuttle racks. The next step to a shuttle rack is ASRS (Automated Storage and Retrieval System). This could be a higher payback for now depending on the base business case cost. So, what one can do is implement an ASRS design without the automatic lifts. The putaway and retrieval can be done temporarily by material handling equipment, we called

this HDRS (Hi Density Racking System).

While the radio shuttle racking system costs around `10,000 per pallet and ASRS may cost `28,000 per pallet, the HDRS is a good mid-way option with `20,000 per pallet. This only means that the automation is getting more flexible and modular, still solving the purpose.

Dheeraj Shah adds, “The most important question that Chief Supply Chain Officers should address today when it comes to automation is, not what automation can do but where should it be used? While there is a plethora and abundance of automation solutions across the value chain i.e. from point solutions to integrated solutions to a sophisticated hyper automated robotic solution. These options involve MHEs, sortation, pick to voice, pick to light, palletizers, sortation, robotics, AGVs, multi-bots, drones, swarm of smart machines, etc. Since automation is capex heavy and comes with a longer time ROI dimension, there is an extensive list of considerations and factors which need to be evaluated and explored. However, here are the few, which for sure, are “Must Haves”:  The Objective / Purpose  Harmonization capability with the overall ecosystem  Human machine collaboration and co-performance  Seamless coupling potential with upstream and downstream process  Intrusion and disruption in BAU during implementation/ installation Scalability

Dheeraj Shah, Head – Supply Chain Management – Retail Business Group, TCS

The fundamentals for unlocking productivity and improving operations in warehousing lies in the basic concept of gaining more visibility, improving tracking and thus gaining a control on processes. Only after you track, you can control. Only after you control you can optimize. Automation technologies that offer positive inventory control, intelligent material flow, flexibility and tracking form the ideal mix of material handling solutions in the plant or warehouse.

The most important question that Chief Supply Chain Officers should address today when it comes to automation is, not what automation can do but where should it be used? While there is a plethora and abundance of automation solutions across the value chain i.e. from point solutions to integrated solutions to a sophisticated hyper automated robotic solution. These options involve MHEs, sortation, pick to voice, pick to light, palletizers, sortation, robotics, AGVs, multi-bots, drones, swarm of smart machines, etc. Since automation is capex heavy and comes with a longer time ROI dimension, there is an extensive list of considerations and factors which need to be evaluated and explored.

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COVER STORY Sangeet Kumar, CEO & Founder, Addverb Technologies To reach the highest levels of efficiency & performance expectations, many companies are resorting to automation powered with technological advances. Automation is changing every aspect of supply chain starting from raw material procurement, warehousing, distribution, customer service & reverse logistics & Industry 4.0 technologies are leading this change. In the intra-logistics sector, the use of robots for material movement, dense storage solutions like AS/RS to utilize the height of warehouses, wearables and Augmented Reality in order picking, and powerful softwares like WES to guide and monitor the entire activities will help in streamlining order fulfilment with accuracy, reduction in delays, operational efficiency and increased resource utilization. Cloud based systems, Block chain, IoT solutions, remote control systems, etc., are leading inter-logistics systems to dramatically affect shipper costs, improve supply chain transparency, last mile delivery, and customer service levels.

 Adaptability to future needs (new products, varying products, new business, new network design etc.)  Will it undo something good that we have today (e.g. might lose the flexibility of running operations)  Safety  The cost  Scalability Benefits and ROI And the most important question is “will this matter to my customer”, which essentially means whether it will be able to make a material impact on my customer facing KPIs as well. I have seen many times the supply chain leaders feel automation could solve the problems they have but there are lots of leaders with whom I have interacted and observed that many “automation promises are unfulfilled”. Also, many times the answers might lie in improving processes and systems to get the results and benefits which might not be intuitive.

Shaping the future of logistics Automation is redefining the way we manage our precious resources/ equipment and machinery, materials and operations. It is giving us tremendous control over enormous amount of data. It is redefining the way we identify our goods, retrieve them, process them for value add, deliver to clients and maintain control all through.

It gives the organizations the ability to

meet a wider client base with varying needs, in the shortest duration, at the lowest cost of delivery. With the availability of quality of manpower increasingly becoming difficult, automation is seen as an essential activity to meet client expectations.

Automation is minimizing various leakages in the system such as Free of Cost deliveries against wrong or part deliveries, handling damages and pilferage etc., and make organizations more competitive. For the buyers, significant improvement in visibility of orders and error free deliveries are the added benefits, states Ashok Kumar.

According to Mihir Contractor, prior to GST, businesses with countrywide sales & distribution were relying on smaller fragmented depots to invoice locally within each state. Post GST, it makes economic sense for businesses to invest in larger warehouses with higher throughputs. This trend coupled with ongoing improvements in our road-infrastructure, increase in landprices, & increase in consumption of a higher product mix will all necessitate investments in automation in material handling & logistics. Ergo, Automation will continue to enable efficient logistics.

For Rupesh Narkar, automation can transform your warehouse into a facility that does exactly what you want when you want. Today, warehouse operators are aiming on reaching

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higher capacities in terms of better space utilization, higher productivity in terms of maximum goods inbound/ outbound and improved efficiency in terms of better resource utilization.

However, with the current manual processes, achieving a reliable, efficient and quick material flow within the warehouse remains a challenge. This is where automation provides the perfect solution. The developed world has been on the forefront implementing advance automation technologies in warehousing operations.

Next gen supply chain technology is driven by automation that will implement intelligent software, flexible solutions and cutting-edge robotics that will create competitive advantage by reducing costs, increasing efficiencies, throughput and responding faster to changes in market demand.

Dheeraj strongly believes that the “the future is now” and as automation becomes all pervasive we are getting into a where humans will co-exist. “I would call it the world of “Hubotics”.

And if we eventually look at the aspirations of supply chains and what we are doing in innovation space I think “Lights Out” warehouses and supply chain nodes are closer in the future than they appear.”

EYEING SUSTAINABLE PARADIGMS “As automation for increased throughput & efficiency is already gearing up, now the thrust will be towards sustainable & safer automated solutions,” opines Jasjit Sethi, CEO, TCI Supply Chain Solutions AUTOMATION SHAPING THE FUTURE OF LOGISTICS Automation is touching all aspects of logistics from production to finished goods logistics encompassing scheduling, warehousing to value added services. In production logistics, we can visualize automated information exchange between OEM, supplier & TCI (3PL) starting from order placement till delivery. In fleet, automated trip settlement, fuel indent to pump along with already operational automated toll gates, enables faster documentation & movement of vehicle, giving speed & efficiency to entire supply chain.

In outbound logistics, auto-routing, auto POD, interactive web portal will contribute to enhanced visibility of the entire supply chain. Many companies are also working on self-loading for faster handling of cargo. The vehicles will become safer for both driver & cargo with introduction of new technologies like automated collision avoidance systems, alerts/alarm for sleep, unauthorized access, geo-fencing for any deviation/non-compliance en-route, etc. In warehousing, almost all aspects have already seen some degree of automation across industries, and fulfilment centres have employed autonomous robots implementing material to man concept, enhancing the throughput significantly. The valueadded services like packing have also seen higher degree of automation with the entire packing line being automated followed by automated labelling, weighing, etc.

CHALLENGES IN IMPLEMENTING AUTOMATION IN THE ALREADY UP & supplychaintribe.com

RUNNING PLATFORM In brownfield projects, implementing automation needs meticulous planning to ensure that the user experience is not hampered. The greatest challenge here remains disrupting the smooth flow of a fully functional process as, if it is not executed adequately, it can impact the entire supply chain. Hence, successful pilots and simulations need to be carried out to ensure a full-fledged streamlining of automation along with the entire operation flow. It is advisable to have regular PDCA (Plan-Do-CheckAct/Adjust) cycles in place to tweak in automation gradually into the system.

INDIAN COMPANIES’ RECEPTIVENESS Based on our experience, we have had a mixed feedback. We found e-commerce clients highly receptive to automation, followed by retail and auto. Given, if the payoffs of introducing automation are well justified, organizations consider getting automated solution into their system irrespective of the initial premium cost. To share an instance, about 10 years back, we had constructed a 15 m -high modern warehouse with the thought that we will operate fully automated operation for our clients deploying ASRS (Automated Storage & Retrieval Systems). Though we could not get clients to buy-in into the plan then, now we are getting due appreciation for the thought to implement latest automated solutions. We also have a handful of highly automated projects using sortation, AGVs (Autonomous Guided Vehicles) that are fully functional or are due for rollout soon. The gaps usually remain around the high cost involved & uncertainty on its actual

performance. The high cost factor can be dealt with adequate collaboration on the investment between both the parties.

STRIKING THE RIGHT EQUILIBRIUM In a country where labour is available at reasonable cost, deciding to invest in a newer foreign technology over traditional ways requires proper validation of the ROI. All organizations have their unique strategies in place with their own checks & balances to adopt & implement based on their cost benefit analysis. Thus, when investment is made with clear and tangible goals, the success of automation co-existing with manual processes is higher.

STEP BY STEP APPROACH TO GO FOR INCREMENTAL AUTOMATION Though there is no one rule that fits all, however, one can go about by beginning with highly labour-intensive & nonvalue-added activity, where introducing automation can assure enhanced efficiency while bringing down operating cost significantly. The automation can then be extended/scaled up gradually to the core activity after careful examinations on its feasibility and ROI.

TRENDS TO WATCH OUT FOR… As automation for increased throughput & efficiency is already gearing up, now the thrust will be towards sustainable & safer automated solutions. The impetus to automation provided by the connected ecosystem created by IoT, will keep evolving and supported by big data analytics will provide deeper insights.

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Harnessing

THE SUN “Ensuring the process and due diligence in terms of engineering, selection of vendors and equipment, ensuring the risk mitigation of the project and having a detailed contract obligation with client / end user is crucial to have an edge on the projects,” asserts K Shridhar, Head Supply Chain Management, L&T Construction, Solar International BU, Sharjah, UAE.

What are the basics of solar supply chain?

Solar projects are expanding very quickly around the world, paving way for many opportunities for investors, developers and Solar EPC contractors. Capacity has multiplied 150 times with a trend of increase in size of the PV plants totaling to hundreds of megawatts, which require components and suppliers from different parts of the world for different projects. This has become the norm in large scale projects with implementation of solar panels from Chinese PV module manufacturers, inverters & other components suppliers from European / Indian / Chinese / Japanese brands, EPC contractors from around the globe illustrating the big challenges of geographical distribution logistics and expected quality standards for solar projects. The plants across the globe need a standard design life of 30 years and the required warranty and Guarantee for the plants.

What are the complexities that arise in managing an efficient supply chain?

Supply chain is not as complex as we feel, it’s the perception that matters at the end of the day. Proper planning, coordination of data in terms of both technical and commercial clarity, having

efficient contract management both with vendors and end clients, timely sourcing, having strategic plans and strategy in place will help build the best supply chain. A well knitted network and strong integrity and collaboration will lead to ease the complexity.

How do you ensure that you manage your supply chain amid challenges?

Project owners, lenders, investors and other parties involved in large scale PV projects need to be sure that the ordered products are in line with the given specifications, full life cycle requirements and perform as expected.

This has to be managed by effective supply chain by selection of reliable suppliers and products that meet the project-specific needs, having frequent factory audits, process and quality management by way of on-line and pre-shipment inspections and last but not the least to have all round Risk Management throughout the supply chain.

This must begin right from the planning stage that includes selection of suppliers that are truly suitable for the solar power plant as well as conducting tests and inspections before and after shipments and extending right up to monitoring and installation.

Everyone involved in the value chain

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K Shridhar has over three decades’ experience having started his career at TVS Whirlpool Ltd., Pondicherry in Automatic Washing machines. He holds BE in Mechanical Engineering and an MBA. His expertise lies in risk mitigation, planning and analysis for critical supply items; effective logistics (domestic / imports) movement with seamless flow and digital tracking; new product development and optimization of supply plan, etc.

of such a big solar power project facility is exposed to different kinds of risks.

This includes from site access – ground levelling – vegetations management – climatic conditions – logistics aspects – financial / political stability – and of course the design and installation itself.

Large scale solar projects involve a huge amount of material and many construction workers. In order to minimize costs, avoid installation penalties all difference components must arrive on schedule. Installation is a very critical portion in solar projects as it consumes huge labor and other costs for successful commissioning of the plant. To have low overheads and mitigate the cost runs, we need to ensure all the supply materials arrive on time as per the planned schedule of execution agreed to avoid the delays and the project penalty (as per the agreed contractual terms).

Another important aspect is the Insurance of the supply equipment in terms of Generation Warranty / Guarantee from the vendors or approved third party reliable bankable parties on back to back terms for critical equipment. Not only this, the insurance for workmen, entire solar plant and taking care of the contractual obligations is a big challenge to deal with.

Transmission and distribution infrastructure: Scaling up of renewable projects need electric grid expansion and upgrades to support the additional power capacity of the utility scale systems.

Financing: Utility scale solar projects need huge financial resources, long construction and payback periods, especially in undeveloped financial market, which becomes a daunting task. Of late, it’s important for the shareholders to have a good relationship with international banks that are often responsible for financing of major percentage of utility scale solar projects.

What has been one of the most challenging tasks managed by you?

The most challenging task is the logistics management and handling of the shipments at the ports. The cargo being 80% more fragile in nature for the solar projects, critical care must be taken in terms of the packaging, transportation, etc. Moreover, additional care needs to be taken during inland movement inside Indian regions.

Having said that, the road conditions are becoming better these days, but to reach the remote place of installations on ground requires special types of vehicles and extra care for the last mile.

How progressive is India in managing such complex tasks?

Today with the experience in Mega Solar projects with Solar parks being developed, India is in the matured stage

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Supply chain is not as complex as we feel, it’s the perception that matters at the end of the day.

Proper planning, coordination of data in terms of both technical and commercial clarity, having efficient contract management both with vendors and end clients, timely sourcing, having strategic plans and strategy in place will help build the best supply chain. A well knitted network and strong integrity and collaboration will lead to ease the complexity. in terms of ranking in solar projects installation with ambition to reach 125 GW by 2022. Having said that, challenges are multifold in terms of the not only complexity of the projects in executing the project in a shorter duration, but also managing external factors such as changing dynamics of the market prices and the product technology itself leading to a huge competition in this solar world.

Solar being an immense potential, the R&D and product development plays a vital role in the selection of the technology and equipment. Every year

there are new products being launched in the market by various equipment manufacturers and the first-comefirst will have the fruit and benefit of the same in terms of advantage of the costs and utilization factors be it land, resource, labor, etc.

A well-balanced micro-planning from the project conception stage, making detailed site layouts, detailed topographical & geological studies of the project sites, detailed design engineering studies and selection of the supply equipment will play a vital role in securing solar projects.

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How can we secure supply chain for solar projects?

Today with the experience in Mega Solar projects with Solar parks being developed, India is in a matured stage in terms of ranking in solar projects installation with ambition to reach 125 GW by 2022. Challenges are multifold in terms of the not only complexity of the projects executing in a shorter duration, but also managing external factors such as changing dynamics of the market prices and the product technology itself leading to a huge competition in this solar world.

What is the peculiar operational difference in India vs international geographies?

While earlier I have discussed about challenges of operating in the Indian subcontinent, the challenges are multifold in the international geographies as well with scale and size of the projects involved, which call for huge force of manpower, execution challenges, climatic conditions of the regions and in specific the soil conditions and data management of the field. Also, another differentiator is the capacity, capability of the supplier partners to supply such huge volumes by keeping the commitment of cost, quality, delivery and reliability, and last but not the least, the Warranty & Guarantee of the supply equipment, and ensuring proper operations and maintenance for the equipment and projects.

But there are positives as well.

These include the ease of handling, high level technology in handling and placement of goods, faster cycle time of clearance, operations and mobilization of manpower and equipment at shorter time span with reliable cost and quality considerations.

How do you ensure vendor and parts management?

Selection of vendors plays a vital role.

Before finalizing any long-term partner, we also need to see how the vendor can work as an extended support partner and being an integral team of the supply chain into the business

26 CELERITY January - February 2020

Today solar being the focus on many platforms and also expanding into domestic and international acumen, the supply chain is secured with keeping abreast of the technology, the product life and design life cycle of the equipment, maximum utilization of the land and using automation and robotics as needed both in the product and the labor force needed. Further, a detailed Risk analysis and capacity & capability analysis will help secure the solar projects.

What are the demand opportunities you foresee over the next 10 years?

Demand opportunity is aplenty in the next 10 years to come. The thrust is now more on the solar and globally also this being a green sustainable energy coming in par with coal and gas, etc., is the way forward on the roadmap.

What are your recommendations for domestic players towards harnessing the impact of supply chain?

With large scale projects being constructed more focus on IOT, automation, Big Data analytics will play a vital role. The mushrooming of the projects in terms of solar parks and focus on the roof top and other segments will play a vital role.

That YEAR 2 0 1 9 Was

The

will help achieve the milestone. The parts management also has to be stringent in processes, raw materials and finished goods inspection to meet with the standards. Additionally, vendors’ commitment on the warranty and guarantee of the parts supported by insurance and fallback plan is also crucial in such large-scale projects.

Here’s a collective presentation of some of the most striking quotes of industry leaders covered in the 2019 issues of Celerity…

Arshad Saiyed, AVP and Head – Supply Chain, Godrej Nature’s Basket Given the fast-paced dynamics of the business environment and VUCA environment we all operate in, the organizations that will thrive will be those who are adaptive, agile and responsive as they will be able to accommodate and innovate for their customers’ needs faster. Organizations would need people who can think ahead from customers’ perspective and work backwards to bring changes for enhanced customer experience in efficient manner. For this to happen, young supply chain professionals or managers would need to have end-to-end view of business, understand and absorb value chain well and take ownership for customers. Young professionals need to take efforts to learn the tricks of trade and stay curious. They need to continue to invest in building expertise and functional depth by gaining exposure either through their network, relevant workshops or build specific skill set which they are interested in.

Praveen Jain, General Manager – Supply Chain, Adani Wilmar Ltd. For any business, supply chain is associated as the backbone of the company especially in the FMCG industry where the crest and trough could be so pitched that the single decision regarding the same could change the view & version of the scenario. People still need to understand that SCM does not restrict itself in pushing sales for any company. The term itself caters to various departments, which could lead any genre of business to its apex. The departments like procurement, warehousing, production & dispatch planning and specially logistics can add so much value to the system. Exploring the depth of such certainties could easily develop business acumen, which is required to be ahead of others in this brutal game of competition.

Samir Chaturvedi, AVP & Head of Supply Chain – Patanjali Ayurved Ltd. 3PL is the backbone for any business to run smoothly through hub & spoke model for scalability in operations. As we indulge ourselves in different channels of sale, it is a prerequisite that prospective service provider has versatility in operations. Post GST, a lot of consolidation is ongoing to match the pace of business as we are moving towards mother warehouses/hubs, which are equipped with technology and automation with the flexibility to expand. Hence, service partners should also be matching the pace with us.

Rituraj Saha, Head – SCM, Pernod Ricard India Introducing flexibility across the supply chain requires closer relationship with customers and suppliers enabled with better information and product flow. Agility in the upstream can be achieved by collaborating with your vendors, involving them in new product commercialization process, through Vendor Managed Inventory and by sharing information on a continuous basis.

Our experience says that new product introduction time can be dramatically reduced through the involvement of suppliers in the innovation process. Agility in manufacturing is also about determining capacity flex, relevant capacities based on market and product characteristics.

Lalit Malik, Chief Financial Officer, Dabur India Ltd. Supply chain efficiency is the key backbone of any industry to have a competitive edge, especially in case of FMCG Companies. Post GST, the networking optimization has become extremely important and considering e-commerce evaluation on the back of technological development and growth potential, supply chain investment has become a key strategic area of importance. In tune with changing times, technological advancement, better control and reduction in time are the key drivers of financial value creation in the entire value chain. Optimizing supply chain network and use of technology will help companies gain competitive advantage and supply chain finance has the ability to build on these and drive exceptional performance for organizations.

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PERSPECTIVE

PERSPECTIVE

A SYMBIOTIC

RELATIONSHIP A lot has been debated over the dire need of a strong and coherent industry-academia partnership in order to pave way for an all-encompassing growth of supply chain in the country. With the desired impetus coming from the government, the onus is now on the new age professionals to steer the growth in the right direction. The recent NITIE annual conclave Avartan’19 reflected some striking aspects with a view to harness this symbiotic relationship…

Mr. Alagu Balaraman, Partner & Managing Director – India Operations, CGN Global India is transitioning to an economy that is increasingly driven by consumer demand.

Simultaneously, a stronger environment supporting entrepreneurship has increased competitive pressures on existing businesses. In this context, business growth is no longer guaranteed, and businesses need deeper expertise to thrive. Such expertise is available in our academic institutions but is poorly tapped into at present. In many cases, academic institutions do not see the importance of industry relationships beyond getting students placed.

Creating unique business models suited to the needs of a unique country requires work on both sides of the industry-academia line. This is increasingly taking place. Alumni are playing an important role in this, as are special programs happening as joint efforts between academia and industry.

With complexity and unpredictability rising in the business environment, supply chains need to be more responsive while also focusing on cost efficiency. Today’s supply chain management teams are excessively focused on cost. The supply chain manager needed today has to know when to focus on cost and when to focus on revenue opportunity exploitation. This requires a better understanding of business challenges of the day and to be able to assess & articulate how the supply chain team can contribute, beyond controlling costs.

Prof. Ashok Pundir, NITIE Industry-Academic partnership is a symbiotic relationship, which needs to be leveraged for the benefit of all. The academia forms an important part of any new research and innovation happening in the domain of supply chain management.

Universities play a crucial role in achieving economic growth in today’s knowledgebased societies. The industry benefits from highly qualified human resources such as researchers and students by gaining access to technology and knowledge. The universities in turn benefit from access to industry set ups and real time cases, which have a wide domain and an extensive scope of implementation.

In case of the next-gen supply chain managers, the skill sets required have undergone a transformational change. With the advent of new age disruptive technologies and the inflow of data analytics, one needs to be equipped with the requisite domain knowledge that is changing at a very fast pace. A supply chain manager must be prepared to face the changes that are happening in various sectors ranging from FMCG, Manufacturing to E-commerce. Embracing the novel techniques of problem solving and adapting to the highly dynamic supply chain demands is the need of the hour.

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Hardeep Singh, CEO, 7- Eleven India I have been associated with campuses in the capacity of guest lecturer or speaker in area of Supply Chain (SC) for last decade or so. My area of focus has been around emerging retail and supply chain practices covering a wide canvas – supply chain networks, infrastructure, big data & technology in supply chain, B2C practices, etc. As I look back, two clear trends emerge: • The participation levels have exponentially grown. What used to be a discussion/lecture to a small group of interested students in supply chain has now become a lecture and Q&A session with a group of at least a 100+.

• The topic that I cover within supply chain has rapidly changed, thereby possibly indicting the advancement of interests and techniques used in supply chain (This also implies that no longer can I use older presentation decks!).

Not only these interactions with campuses and students have been gratifying and thought provoking for me, (without sounding selfish) these have personally helped me a lot in my professional space. It has helped me draw and understand some of the latest theoretical frameworks, which then get used in strategy discussions in corporate office.

Also, high quality discussions and incisive Q&A sessions keep me thinking of better responses and solutions even when I am not with students.

Based on my discussions with students and faculty, I get encouraging feedbacks on how some of these lectures have helped them get clear industry perspective and understand what’s most current and relevant. Fundamentals of supply chain have obviously not changed – every professional outside continues to strive to create new age Aligned, Agile and Adaptive supply chain in their respective industry space. However, the focus has quickly moved to more B2C practices, high end-customer centricity and deploying big data & AI across the entire SC value chain. From an age of building reliable backend and speedier front end, we have quickly moved on to creating Agile and Predictive SC networks & services. It is important for students and academia to understand these fast-changing trends.

These changes around us also influence how industry now looks at supply chain talent emerging from campuses.

Curiosity, approach towards solving unstructured and unsolved problems, ability to learn/un-learn and relearn are some of the important softer factors that need more attention than the grades in the classroom. Artificial Intelligence & big data is winning on one-hand, knocking off many conventional SC roles. On the other hand, it is also creating new and interesting career options where the new age supply chain manager must decide areas of deployment of AI, resource allocation and developing more cross-functional skills and EQ.

Nandkumar Kulkarni, Director – Integrated Supply Chain, Mondelez India As we embrace Industry 4.0 with cutting edge technology and re-imagining the future, industries are constantly evolving to become more consumer-centric to deliver superior quality, improved variety, at a right cost and convenience. While industries across India have been collaborating across entire value chain to deliver superior value to the consumers, they have also begun augmenting partnership beyond the conventional methods of Summer/Winter Internship projects and pre-placement offers. The tech world has shown us that innovation fosters with an open source and decentralized culture where ideas are welcome from across the board, across the hierarchies and beyond the defined limits of an organization (For example Hackathons/ Ideathons). Mondelez India recently launched an inter B-School Supply Chain Strategy Case Study competition called “The New Normal” across Top 10 B-Schools in India. Through this case study, we are aiming to establish stronger partnership with academia to help us spot new global industry trends, which can transform our supply chain to Best In Class. This will pave the way for Mondelez India to tap into a wide as well as deep ecosystem of academia including students, faculty members, research associates, etc., to help us create a future ready supply chain. In the process, we will also be able to spot the next gen talent who thinks creatively and who has ambitious vision to not just create value for her/his organization but also the industry as a whole.

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FOCUS

AUTOMATION IN 3PL The conventional wisdom that automation is not the first thing that you think of in third party logistics, is changing rapidly.

The belief that customers do not give long term contracts, long enough to recover the investment, is not changing, but the way that 3PL companies charge for the service, and the spectrum of application, and re-application, with flexibility of design, is changing, believes Lionel Stanton.

A

recent McKinsey report predicts that 57% of functions in warehousing will eventually become automated. Robots have expanded their repertoire of capabilities and are becoming cheaper and more standardized. Integrated with 3D vision and vacuum grippers they are capable of picking, placing and automatically packing, sealing, printing labels and applying to the parcel.

Picking and packing are the two most expensive operations in the warehouse. At the same time, the high-speed growth of Internet shopping has led to customer demanding less than 24-hour turnarounds. Couple this with the roll out of 5G, this will increase the speed of mobile Internet, and a surge in e-commerce demand.

These developments and the flexibility of robotic solutions will double process speeds with lower costs, reduced errors, and doubling of order processing efficiency. Equally, collaborative robots (cobots) also give small distribution centres with low demand, the ability to manage shifting demand peaks and troughs.

IMPROVING PROCESS EFFICIENCY A recent survey of UK, Europe and North America shows some interesting, if not surprising results. The main reason for investing in robotics is to increase efficiency, and to provide a cost-effective solution. Around 4 out of 5 people believe that robotics will become mainstream in the next 2 to 5 years.

Logistics and supply chain is an industry that will benefit the most from robotics, followed by FMCG, automotive, transport and pharmaceuticals.

Manufacturing is seen as already using the most robotics, especially automotive. In all surveys, Picking and Packing came out as the top application, followed by sortation, loading/ unloading, warehouse vehicles (AGVs), and inventory management, as areas of application, ranked in that order.

AI is used by only a few and there are no immediate plans for application. It may be considered in the future in the areas of inventory management, warehouse vehicles, procurement, transportation, customer service, picking and packing being top

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Lionel Stanton has 45 years’ experience in warehouse planning and design, in consultancy and line management. He has been responsible for design, build and start-up project management in companies like, ASDA, New Look, Mothercare, as well as companies in Portugal, Netherlands, and Russia. Lionel started his career as a Chartered Engineer in the auto industry, gaining his Masters from Warwick Business School, before going into consultancy. He progressed from there into senior executive roles, before returning to consultancy.

SIGNIFICANCE FOR THE INDIAN MARKET It has been said that robots could transform 3rd Party Logistics. The high cost of automation has always been a bit of a problem for 3PLs, which need an ROI within the life of a contract.

Robotics could be changing that. All of a sudden, technologies are becoming available that can give competitive advantage as well as flexibility to be re-usable. ROI periods start to become a lot more realistic. One of the most popular applications of new technology is the use of very flexible ‘cobots’ or collaborative robots. These machines work with and alongside humans, doing repetitive movement tasks, leaving the human to do the intricate tasks, without having to move around. They have a range of grasping mechanisms, from vacuum heads to finger grips. They can assist workers in picking, packing and sorting applications, making the human more productive. Cobots can carry out tasks quickly and accurately and are easy to re-programme using AI

in conjunction with demonstrating the task.

Robotic arms are light and flexible enough to be moved around and applied in many tasks. Robots can also be rolled out to help with peak times, reducing the number of temporary workers. This could be a boon for 3PLs in India. Other technologies under consideration are vehicle bay doors with built-in sensors, autonomous vehicles, and automated cleaning robots. Exo-skeletal suits for workers is another innovation. A bit like “Iron Man” without the rocket suit, but a strap on skeleton. This allows the worker to move freely, but the external skeleton provides the muscle to enable him to lift heavy loads easily. Eg white goods, engines, etc.

BITO Storage Systems advocate their BITO Leo internal driverless transporter, which is low cost and does not require wi-fi or IT. It can carry totes, for instance, between picking locations, from picking to packing, from packing to dispatch. Cobots can pick from a tote and pack in cartons or boxes, passing

to a closing and sealing machine with automatic print and apply.

Dematic Robotics, Knapp, PSB, Vanderlande, Shaefer, Beumer, all have AGV systems, conveyor systems, sorting machines, shuttle systems and automated picking machines. Kiva system or Falcon Automation’s Butler system bring a rack of SKUs to a fixed picking station. These are ideal for high number of slow- moving SKUs, goods to the picker, like e-commerce or automotive spares. All high-speed picking systems bring goods to man, reducing lost time in walking. Cobots can work alongside the pickers. Cobots can feed induction lines to sorters and they can pack as well.

In India, think about how many picking assistants and “spiders” are used in warehouses. Cobots and autonomous vehicles could replace the picking assistants and spidermen in our operations.

Toshiba is developing wearable technology and has launched its dynaEdge Assisted Reality Smart

of the list again. In terms of future trends, robotic pickers and packers is number one, followed by innovations in autonomous delivery vehicles.

The third most highly rated trend was robotics combined with artificial intelligence. Autonomous or driverless vehicles are already beginning to appear on our roads in trials. Although it is difficult to see how this could work in the Indian city environment, with current infrastructure, and traffic conditions.

Robotic drones did not appear to be of any great interest, along with truck platooning. Truck platooning is being trialed by DHL, TESCO, Sainsbury, on the UK motorways. This involves a convoy of trucks with the lead truck driving the convoy. The lead driver controls the convoy with the other trucks very close behind. The convoy is controlled through RF - accelerating, braking, steering is automated from the front truck. The purpose is slip-streaming to save fuel. There are, of course, severe safety concerns, and there are practical issues of running a train on busy road networks.

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FOCUS

FOCUS replaced completely with autonomous vehicles for put away and from picking to outbound gate.

It has been said that robots could transform 3rd party logistics. The high cost of automation has always been a bit of a problem for 3PLs, which need an ROI within the life of a contract. Robotics could be changing that. All of a sudden, technologies are becoming available that can give competitive advantage as well as flexibility to be re-usable. ROI periods start to become a lot more realistic. One of the most popular applications of new technology is the use of very flexible ‘cobots’ or collaborative robots. These machines work with and alongside humans, doing repetitive movement tasks, leaving the human to do the intricate tasks, without having to move around.

Glasses to improve picking accuracy and efficiency using “hands Free” technology with voice controls. Workers can use smart glasses to pick by vision to scan bar codes and use voice confirmation to run through check lists. The German company Picavi also has smart glasses to guide the picker through the process.

In solutions design, we need to keep up to date on the technologies available, and their applications. We have an opportunity to get ahead of the curve in 3PL in India. These robotic technologies can be retro fitted to existing operations.

THE IMPLICATIONS

FURNITURE AND HEAVY BULKY: The picking is a 2-man operation but supposing…. The picker has smart glasses, aided by voice, plus a picking cobot assistant on an autonomous vehicle following alongside, then taking the order to dispatch. The whole process would require only one man, while additionally saving the BOPT driver. This is highly accurate and overcomes the issue of the serial number matching for Jaipur furniture. Much of the criss-cross movement on the inbound/outbound dock could be carried out autonomously, with assistance to load and unload.

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LUGGAGE: Vehicle unloading, and loading is a problem to get the first row of cartons out, stacked to the roof of the truck. A cobot arm could swing out from the side of the door, with a suction pad to pick out the cartons safely from the top of the container.

It could then place the carton onto a pallet directly for an autonomous vehicle to take the pallet to de-nesting or put away. The same can happen in reverse for loading outbound. This could be simpler and cleaner than conveyors.

De-nesting could be entirely automated with cobots, picking can be done with smart glasses, and spider men can be

GARMENTS: There is a requirement to fold and pack singles into trade packs, and trade packs into master packs.

Cobots could assist the packer to fold the garments, then automatically pack.

Volumes might require something faster to pack, in which case we need to look at automatic carton machines. Inbound and outbound can be automated with boom conveyors coupled to shuttle systems and high-speed picking machines, assisted by cobots.

FOOTWEAR: Smart glasses and autonomous vehicles, BOPTs and HPT movement can be replaced faster, saving in manpower, and resulting in greater efficiency.

PHARMA: The application entirely depends on volumes and unit of pick.

Automated “A:” frame picking machines are conventional technology, Knapp is expert on automation in this industry and on robotics.

AUTOMOTIVE: The most labor-intensive process is the UC repacking for branded items. Put to light is to be deployed, but cobots could be a game changer to assist the packers. Something similar could be deployed for reverse logistics inbound re-packing. Autonomous vehicles are an obvious application along with smart glasses.

A note of caution… automation is not necessary for everything, but items like smart glasses with voice can be universal. Cobots can be deployed even for simple tasks if it makes the worker more efficient, especially to overcome peaks. The beauty of these new technologies is that they are transferrable and re-usable.

Robotics is a big subject. XPO Logistics Europe has identified 19 innovations for consideration. There are at least the same number of vendors for different technologies.

TWO THINGS TO REMEMBER:  The main global 3PLs are already deploying robotics  Robotics has already arrived in India, with a service support organization.

It is essential for the warehouse to have a good WMS to drive

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Space is the biggest single cost in the warehouse. Most small and medium product warehouses utilize multiple floor mezzanine shelving, fed with reach trucks and pallet gates, with staging areas.

Automated pallet lifts linked to the AGVs can eliminate the need for reach trucks and drivers. automation and robotics. This is in terms of functionality, capacity, and the necessary drivers. Whilst we can treat the automation control system a bit like a black box, the necessary drivers and interfaces are required. For instance, when we use RF hand-held laser scanners, the WMS has a driver.

Also, the WMS needs enough capacity to handle the number of devices in use at one time i.e., the peak time, without a reduction in service, or a slowdown in response time.

This is a major point for the choice of WMS, you need to ask a set of questions to test their capability.

1. Can the WMS track every movement in the warehouse, and can it allow extra pallet movements to be added, without losing any information on that pallet? (some WMS will lose the pallet ID when it is placed into a location. You then have to scan every carton back onto the pallet to move it again).

2. Does the WMS have drivers to interface with robotics, autonomous devices and automated processes?

3. Does it have the required bandwidth and capacity for growth in throughput?

Robotics can offer competitive advantage over their competition to the customer by using these systems and processes. Additionally, it offers advantages like faster speed to market, reduced work in progress and reduced stock, lower costs especially at peak times because we are less labor dependent, better service levels and accuracy. Cobots and autonomous vehicles can speed up and synchronize processes, like inbound and outbound, where traditional staging areas can

be eliminated by allowing ‘one-piece flow’ lean productivity processes to be effectively controlled.

Space is the biggest single cost in the warehouse. Most small and medium product warehouses utilize multiple floor mezzanine shelving, fed with reach trucks and pallet gates, with staging areas. Automated pallet lifts linked to the AGVs can eliminate the need for reach trucks and drivers.

CO-CREATE A BETTER FUTURE There are 3 ways a company can adopt new technologies; • Follow others, but this means always being behind • Adopt cutting edge technology, getting ahead but running risks of poor reliability • Use proven technology, but in unique or advanced applications.

The 3rd way gives competitive edge, without taking all the risk on reliability.

The products now available in the market is mainly proven technology.

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Trending GL BALLY Supply chains could be the key to a gigaton of emissions savings

A new report has found that 1bn metric tonnes of emissions savings could be achieved if key suppliers to 125 of the world’s biggest corporate purchasers increased their proportion of renewable electricity by 20 percentage points.

The report, CDP’s Changing the Chain, saw environmental data analyzed from almost 7,000 supplier companies collected on behalf of their customers. The 125 big purchasers include major companies such as: Walmart, L’Oreal and Samsung Electronics. The data found that the average proportion of renewable electricity suppliers purchase consists of 11% of their total electricity. By increasing the proportion of total electricity they purchase by 20 percentage points next year, it is expected to reduce greenhouse gas emissions by a gigaton in one year.

It was found that the average proportion of renewable electricity suppliers purchase consists of around 11% of their total electricity. It was also revealed that supply chain emissions are around five and a half times as high as a corporation’s direct emissions. 1bn metric tons is equivalent to the emissions of Brazil and Mexico combined.

“As world leaders gather in Madrid this week, we stand at a critical crossroads,” commented Sonya Bhonsle, Global Director of Supply Chains at CDP. “With supply chain emissions being on average over five times as high as a corporation’s direct emissions, this makes the trillions in procurement spend by large corporate buyers a critical leverage tool for driving climate action at scale. Our analysis shows a gigaton of emissions savings up for grabs if suppliers increase their proportion of renewable power by 20 percentage points on average. This would be a big step, but it is achievable.

However, with just 4% of suppliers reporting a renewable energy target we’re not seeing that level of ambition yet. We need to see all buyers engaging proactively with their suppliers to unlock this huge opportunity.”

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BMW Group driving zero emissions within its logistics When it comes to BMW Group’s international network and its global distribution of vehicles, maritime transport is crucial. As a result, the group has joined the ‘Getting to Zero Coalition’ alliance that strives to accelerate decarbonization within the maritime shipping industry. The Getting to Zero Coalition is a partnership between the Global Maritime Forum, the Friends of Ocean Action and the World Economic Forum. BMW Group’s recent commitments include:  Decarbonization of its logistics  Continuing to push its sustainability strategy  Using resource-friendly production methods  Further developing electric mobility “We see the Getting to Zero Coalition of various governments, companies and other cross-sector stakeholders as a unique opportunity to continuously minimize carbon emissions in the maritime sector as well,” emphasises Jürgen Maidl, Senior Vice President Production Network and Supply Chain Management at the BMW Group. “We are delighted to be the first carmaker to join this coalition and thus lead the way towards more sustainability.”

Bentley Motors driving smart supply Following its significant reductions in key environmental areas, Bentley is the first UK automotive manufacturer to be awarded the Carbon Trust Standards. In addition, Bentley has achieved ISO 14001 (2015) environmental and ISO 50001 energy management standards. With 100 years of trading and manufacturing luxury cars under its belt, Bentley Motors founding vision was “to build a fast car, a good car, the best in its class” and is still true today. When it comes to responsible manufacturing Bentley Motors focuses on smart supply and sustainability.

Smart Supply: By incorporating its logistics centre to be adjacent to the main supply hall, Bentley Motors has achieved a 30% reduction when it comes to parts handling. Being part of the Volkswagen Group, Bentley is able to combine its worldwide component and material suppliers.

Solar Power: 100% of Bentley’s onsite electricity is produced by solar panels or is certified green energy. Bentley’s total

Ralph Lauren to boost supply chain visibility, fight counterfeits Ralph Lauren Corporation recently announced the launch of Digital Product Identities (IDs) for tens of millions of Ralph Lauren products, starting with the Polo brand, as it continues to deliver on its strategic priority to Lead with Digital. As an iconic global luxury brand, Ralph Lauren’s Digital Product IDs give consumers the reassurance of authenticity paired with a connected product experience. By scanning the Digital Product ID on the product label with a smartphone, consumers can confirm whether their purchase is authentically Ralph Lauren, learn about the product detail and receive styling tips and recommendations. Equally, the technology provides insight into the supply chain that helps drive efficiency around orders and inventory. Ralph Lauren Corporation (RLC) is the first global retail brand to apply this technology at this scale and in unprecedented ways.

“The launch of Digital Product IDs demonstrates how we continue to use technology to deliver more for our consumers

and ensure the integrity of our products throughout their lifecycle,” says David Lauren, Chief Innovation Officer. “The application of this technology means every Polo product will be ‘born-digital’ which represents a new milestone in data intelligence innovation in our sector.”

The new technology gives consumers the power to authenticate Polo products themselves – simply and immediately, helping to combat counterfeits, grey market items and trademark infringement that can confuse the market. Digital Product IDs provide consumers with the reassurance that they have purchased an authentic Polo product.

Across the supply chain, Digital Product IDs enable realtime visibility to track product from the point of manufacture and improve inventory management.

on-site capacity is now 7.7MW, the system could reduce CO2 emissions by 3,300 tons per year.

Water usage: Bentley has replaced its original intensive water processes on site with circulating systems to avoid unnecessary waste. Water usage was reduced from 20.91m3 per vehicle in 2010, to 11.00m3 per vehicle in 2016.

Zero landfill: Bentley strives to maximize its recycling potential and divert landfill waste. Utilizing recycling facilities both in offices and on the production line Bentley has increased its recycling rates, with several months achieving zero-to-landfill waste levels.

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