Supply Chain Tribe by Celerity March - April 2021

SUPPLYCHAINTRIBE.COM March - April 2021 Volume 5 Issue 2 For private circulation only

INSIDE Learnings from HUMANITARIAN SUPPLY CHAINS for managing a pandemic or disaster related supply chain disruptions A BLUEPRINT for the future supply chain managers to move up the ladder Intriguing insights on DIGITAL TWIN from Digital Transformation experts in supply chain

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CONTENTS

March - April 2021 Volume 5 Issue 2

23 | COVER STORY

BIG BOX BOOM This pandemic has forced companies to go for digitalization sooner rather than later. Moreover, with the advent of always-on e-commerce, the demand for faster responses, and the need to manage a larger number of SKUs with fewer errors, warehouses need to scale up and meet the standards of an intelligent, efficient, and automated warehouse. This cover story essentially captures the aspects of the changing facets of New Age Warehouses in India…

06 | INTERVIEW

18 | EVENT RECAP

Supply Chains are OUT. Supply Networks are IN

Research & Practice in Operations Management

Supply chain is nothing but applying common sense to improve efficiency, shares Sachin Gupta, Country Planning Manager, Shell.

Collective thoughts of the Keynote speakers as well as the winners of the Best Research Papers Award during SIOM Nashik’s ICOSCM 2021 event.

32 | PERSPECTIVE

10 | OPINION

The ‘Latent’ Talent Radu Palamariu, MD Asia Pacific, Alcott Global and the Global Head of Supply Chain & Logistics Practice, presents a blueprint for the future supply chain managers to move up the ladder.

12 | FOCUS

Knight in the Shining Armor Sunil Banthiya, Chief Operating Officer, Aliaxis India, shares learnings from humanitarian supply chains for managing pandemic or disaster related supply chain disruptions.

Digital Twins in Supply Chains Intriguing insights from Digital Transformation experts in supply chain.

35 | INFOGRAPHIC

Warehousing Analytics opportunities for Connected Warehouses An infographic presentation by Kumar Singh, leading global supply chain consultant.

36 | BOOK NOOK

Solving the Demand Supply Maze Q&A with Procyon Mukherjee, Author, Supply Chain Leader, CXO-Advisor, Founder Prep-Gen, on his new book ‘The Search for Value in Supply Chains’.

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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Spotlights are on Supply Chain!

Dear Readers, Two months of this year are behind us. The vaccine is here, and so are the rising cases back in the news. It is unrealistic to think the pandemic would stop by the end of this year. The recent arrival of effective vaccines could at least help dramatically reduce hospitalisations and death.

We should all continue to follow the protocols to keep transmission rate as low as possible.

The Vaccine delivery and distribution drive has taken over the world. The biggest vaccination campaign in history is underway. According to data collected by Bloomberg, more than 245 million doses have been administered across 107 countries. It has been one of the biggest logistical challenges ever undertaken. Celerity is hosting a webinar on April 1st on ‘India’s vaccine leadership & supply chain challenges’, with eminent speakers sharing their experiences of being in the throes of this drive.

The pandemic has brought the limelight to supply chain professionals and the work we do. It has brought the word into the focus of many Governments from India to UK to now USA. The profound changes in world economy precipitated by COVID-19, are determining the changes in global value chains.

So, the spotlight, my friends, is now upon you! You are in a great place to be.

Happy reading.

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

SUPPLY CHAINS ARE OUT. SUPPLY NETWORKS ARE IN “Supply chain is nothing but applying Common Sense to improve efficiency. While sales and marketing functions of organization drive top line, supply chain and operations drive bottom line of the balance sheet. More and more companies are realizing the importance of having an efficient and agile supply chain to increase profitability. Beyond this, having a reliable supply chain is becoming a key competitive advantage to increase market share. Customers and consumers are expecting faster and convenient ways of getting the products,” shares Sachin Gupta, Country Planning Manager, Shell.

Your valued comments on the YEAR 2020 and what did it spell for the supply chain domain?

2020 was a real litmus test for supply chains and supply chain professionals.

COVID 19 has wrought unprecedented disruptions in supply chains, ranging from longer lead times, highly fluctuating demand, high raw material costs, lesser vessel space, etc. It showed how important it is to build a robust and agile supply chain to keep a tap on bottom line performance. I would like to summarize it as SOAR...

Shock – In March’20, COVID 19 evolved

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as a Black Swan, which no-one could predict. Suddenly entire world came to a halt and started having significant impact on earnings. It took us good 2-3 weeks to digest and understand what is happening around us.

Optimize – By April beginning, companies started realizing the impact of COVID. As companies estimated huge decline in sales. First and foremost, action was to reduce the cost and optimize the working capital to preserve the cash.

Assess – In this phase, companies started assessing actual demand from market

Sachin Gupta is a seasoned Supply Chain professional with decade long experience of leading complex supply chains of large scale Multinational Companies like J&J, Philips and Shell. Sachin has expertise in setting up and driving effective S&OP processes in organizations. Sachin has done PGDIE in Supply Chain Management & Operations from NITIE and holds an engineering degree from IET Lucknow.

and tried innovative ways to serve the customers keeping cost minimal.

Recover / Re-build – By Q4’20, most of the companies had started recovering the topline. Companies focused on rebuilding strong supply chains.

What are your views on demand planning & forecasting in the new normal?

In Post COVID era, many companies will have to re-adjust their forecasting models. COVID has driven changes in consumer behavior. This impact on supply chains and the lockdown, necessitated

INTERVIEW

by COVID-19, is changing consumer priorities and purchase patterns at a rapid and unanticipated scale and speed.

Concerns around health, basic needs, and loss of freedom are manifesting in different ways as consumers adopt new behaviors and lifestyles that might be here to stay beyond the short-term impact of the pandemic.

Digitization has taken the centerstage more so in times of Covid.

What striking changes have you witnessed in the industry that are worth emulating and will transform the shape of things to come in supply chain?

With manufacturing moving towards Industry 4.0, supply chain is also evolving as SCM 4.0. The re-organization of supply chains using advanced technologies, such as the Internet of Things (IoT), big data analytics, and autonomous robotics, is transforming the model of supply chain management from a linear one, in which instructions flow from supplier to producer to distributor to consumer, and back, to a more integrated model in which information flows in an omnidirectional manner to the supply chain. Adaptation of these new age tools will highly be driven by product and demography, but any organization who hasn’t started investing in these is already late in the race.

What are the top 5 aspects that CSCOs should focus on in the year 2021?

Building an Omni-Channel Supply Chain – If 2020 taught us anything, it demonstrated that to succeed, maximize resilience, and ensure business continuity, companies need to maximize every available channel – ecommerce, direct-to-consumer, retail, distributors,

and Amazon. That way, if one channel is disrupted, whether by natural or manmade causes, the show will go on.

Reaching out Direct to Customer – If you haven’t figured out how to maximize this channel for your business, you’re behind your peers. You’ll need to figure out “lot size 1” production and delivery, you’ll need last mile logistics, you’ll need a returns process, and e-commerce technology able to handle the proliferation of choice and SKUs that customers are demanding.

Investing in a next-gen Supply Chain Control Tower – Supply chain control towers are getting smarter. Visibility is more important than ever – but it’s not enough. What good is seeing a problem if you can’t resolve it, and do so in an optimal way? Solution providers are using AI and advanced algorithms to anticipate potential problems (predictive analytics) and provide resolutions (prescriptive analytics) in an automated, optimized fashion at regional and global scale. Some people call these “anticipate, sense, and respond” capabilities, and you’ll need them as you face the “next normal” in 2021.

Integrate your ERPs NOW – How many separate ERP instances does your company run – 5? 20? 100? More? In 2020, the massive inefficiencies of these self-imposed business barriers have come to light and firms have recognized that they need to be eliminated. These silos have artificially propped up costly inventory buffers, caused information delays, hurt service levels, and bring with them the enormous IT cost of interfaces, maintenance, and upgrades.

Who can afford that anymore? You likely inherited this problem, rather than

caused it and now it’s up to you to fix it.

The best solution is to move supply chain workflows onto a collaborative business network platform. This can be done in a way that matches each company’s unique priorities and generates value at each step along the way. It’s the only option for large enterprises saddled with stitched-together legacy systems, and in 2021 more and more global enterprises will see network solutions as the only viable way out of this costly situation.

Plus, it’s the fastest path forward.

Build a Robust Supply Chain Network – SUPPLY CHAINS ARE OUT. SUPPLY NETWORKS ARE IN. The importance of collaboration with suppliers, comanufacturers, customers, carriers, and distributors has never been more apparent, so companies will focus in 2021 on strengthening their business networks. In 2020, companies discovered that their legacy enterprise-centric systems no longer work “good enough”, so in 2021, they’ll need platforms to support tight collaborative workflows around plans, forecasts, orders, shipments, ETAs, and inventories in real time. As collaboration and improved information flows eliminate errors and inefficiencies, all sides can drive out costs and improve their competitiveness with business network strategies. And you’ll be able to on-board and off-board suppliers more quickly, as needed.

What would be your advice to professionals who want to build their career in supply chain?

Supply chain is nothing but applying Common Sense to improve efficiency.

While sales and marketing functions of organization drive top line, supply chain and operations drive bottom line of the balance sheet. More and more

One of the important ways to identify and review inefficiency is to have an open and robust S&OP culture. S&OP is a process which is quite comprehensive to cover end-to-end supply chain processes and gives periodic opportunity not only to look back and reflect but also to plan your future accordingly. Organizations should also focus on setting up a strong feedback loop from customers / consumers. This is the easiest way to identify the inefficiencies. supplychaintribe.com

7

INTERVIEW The importance of collaboration with suppliers, co-manufacturers, customers, carriers, and distributors has never been more apparent, so companies will focus in 2021 on strengthening their business networks. In 2020, companies discovered that their legacy enterprise-centric systems no longer work “good enough”, so in 2021, they’ll need platforms to support tight collaborative workflows around plans, forecasts, orders, shipments, ETAs, and inventories in real time.

As collaboration and improved information flows eliminate errors and inefficiencies, all sides can drive out costs and improve their competitiveness with business network strategies. And you’ll be able to on-board and off-board suppliers more quickly, as needed.

companies are realizing the importance of having an efficient and agile supply chain to increase profitability. Beyond this, having a reliable supply chain is becoming a key competitive advantage to increase market share. Customers and consumers are expecting faster and convenient ways of getting the products.

Supply chain professionals must focus on developing new age skills.

Concepts like AI, ML, IOT and Big Data are becoming foundational to grow in a modern age supply chain. Other than this, SCM professionals must acquire Project management, Financial Management and Accounting knowledge skillsets.

What are the skillsets they need to possess to survive & sustain in the new normal?

Supply chain professionals need to understand modern ways of forecasting and planning. Data analytics is going to play a major role there. Concept of descriptive analytics is now moving towards prescriptive analytics. If these are merged with supply chain fundamentals, it can be a super-combo to have.

8 CELERITY March - April 2021

As a supply chain planning professional, what has been the most challenging project you have worked on in the past?

In my decade long experience, I have led and managed several transformations and managed large scale changes. One of the most challenging one was Building an S&OP framework from scratch to take it to the maturity level. From convincing leadership colleagues about the need of a robust S&OP process to motivate teams to deal with this Change Management, it all came with a lot of experience and learning for myself.

What are the inventory management best practices that companies should imbibe?

Below are few practices, which are basic and easy to adopt – Inventory Classification – Not every SKU in a catalogue deserves same planning logics. There are many popular methods of classifying inventory and accordingly applying planning and forecasting logics. One of the widely used is ABC analysis (Based upon Valuation).

While A class inventory should have frequent replenishments, C class SKUs should be produced / replenished once in a month / quarter.

Pick SMART KPIs – Choose SCM KPIs wisely. These should be SMART (Simple, Measurable, Achievable, Relevant and Time-Bound). For inventory planning, KPIs which are relevant are – Inventory Turns, Inventory DOS, Write-off, Inventory Carrying Cost, Slow and Obsolete Stock as % of total inventory, etc.

Moving from MRP to DDMRP – DDMRP, as a methodology, focusses on placing strategic buffers to enable lead time compression and by leveraging daily planning to react to daily sales orders. MRP has been commercialized since 1970 and has had minimal improvements since.

DDMRP has its roots in lean thinking and moves away from forecasting and having safety stocks to utilizing buffers to absorb variability. This results in increased material availability as well as a reduction in working capital. This methodology has delivered phenomenal results in both service benefits and inventory reduction. Companies who have adopted DDMRP found that they are able to increase their service levels and sales with the same amount of inventory.

All that they are doing differently is leveraging strategically placed buffers to decouple the supply chain to react to only real demand orders.

Count your stocks effectively – It’s important to have an effective Cycle Stock process in place and also to adjust books as soon as possible with any known shortcomings. This will help in avoiding last minute shocks and would also drive correct and real time COGS adjustments.

Choose and Adopt one ERP system – Many organizations struggle with an in-effective ERP implementation, ERP should also be closely integrated with other products / tools. If ERP is not giving you desired results, it must be fixed. Also, any new implementation of ERP comes with aa huge change management, which has to be managed carefully.

Focus on TCO – Businesses gain a

INTERVIEW competitive advantage through total cost of ownership (TCO) because it allows them to better analyze the cost of their workforce. TCO considers direct and indirect costs to measure true cost. This is important in analyzing a workforce because HR now represents the largest variable costs for most organizations.

TCO is a concept that’s traditionally been applied to IT but has moved into almost every aspect of business operation.

Indian ports is only 1500 MMTPA. Under Sagarmala Program, government plans to expand it to 3300+ MMTPA by 2025 to cater to the growing traffic. This includes port operational efficiency improvement, capacity expansion of existing ports and new port development.

What do you have to say on the phased infrastructural development in the country and how it slated to give a fillip to the supply chain domain?

One important concern looming around companies in India as well as with Government of India, is our detreating relationship with China. Over last 3 decades, manufacturing supply chain in India has developed huge dependency over China and is growing YoY. India's imports from China rose from 13.7% in 2018-19 to 14.1% in 2019-20. India’s major imports from the neighbor include engineering goods, electronics, pharmaceuticals and automobile components. At a total value of over $18 billion, electronic imports formed a quarter of the total imports in a month.

Nuclear reactors, machinery and parts comprised another major chunk of the imports at $12 billion.

As tensions simmer at the border between India and China, what is more concerning is the economic fall-out of the souring relationship between the two countries. This is because the economic interdependence of the two neighbors is too deep to be ignored. China and the US are the largest two trading partners of India. While Indian exports to the US outnumber the imports from the country, the same is not true when it comes to China. And hence, to become friends-turned-foes with India would have business repercussions in China, too.

As per a Brookings India report, the total amount of current and planned Chinese investment in India has crossed $26 billion (around Rs 1,98,000 crore). China-based companies are also stepping up their investments in Indian companies, including startups, the report said. The numbers clearly show India's heavily reliance on Chinese imports and any disruption of trade ties between the two countries will substantially hurt Indian businesses.

Meanwhile, India changed its FDI

India is investing in building Next-gen supply chain infrastructure like never before, be it Expressways, Highways, Ports or Dedicated Freight Corridor.

Road Transport – Expressways are becoming backbone of long-distance transport in India. Government is planning to build 23 new expressways (With combined length of 7,800 km) in next 4 years spanning across length and breadth of the country. This massive development of new expressways is a much-needed departure from conventional mode of widening the existing highways. Currently Cargo vehicles in India cover about 400 Km a day (Post GST introduction), which is less than 50% of global standard. This is expected to increase to 650 Km a day by 2025.

Railways – Current railway network of India has become massively congested with continuous rise in passenger and freight trains over period of last 3-4 decades. Freight trains usually suffer from unpredictable running times and low speeds of around 25 km per hour.

With the development of Dedicated Freight Corridors, 70% of freight trains will shift to new network. This will not only increase avg. speed of freight trains to 60 kmph but will also open up tracks for faster passenger trains.

Ports – More than 90% of India's trade by volume is conducted via the country’s maritime route. India has 12 major ports and approximately 200 non-major ports. Current cargo handling capacity of

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What’s that one area that needs utmost attention from companies and the government as far as supply chain is concerned?

policy in April soon after the People's Bank of China decided to up its stake in India's HDFC bank to over 1%. As per the tweak, neighboring nations can invest in Indian firms only after getting the Centre's approval for the same. China retaliated saying India's new policy violated WTO's principle of non-discrimination and are against the general trend of free trade.

How can supply chain inefficiencies be addressed at company and industry level?

One of the important ways to identify and review inefficiency is to have an open and robust S&OP culture. S&OP is a process which is quite comprehensive to cover end-to-end supply chain processes and gives periodic opportunity not only to look back and reflect but also to plan your future accordingly. Organizations should also focus on setting up a strong feedback loop from customers / consumers. This is the easiest way to identify the inefficiencies.

Where do you see Indian supply chain transform from here on?

India is poised to take a center stage in the 21st Century. India’s GDP is expected to reach US$ 5 trillion by FY25 and achieve upper-middle income status on the back of digitization, globalization, favorable demographics, and reforms. India is also focusing on renewable sources to generate energy. It is planning to achieve 40% of its energy from non-fossil sources by 2030, which is currently 30%, and have plans to increase its renewable energy capacity from to 175 gigawatt (GW) by 2022.

India is expected to be the third largest consumer economy as its consumption may triple to US$ 4 trillion by 2025, owing to shift in consumer behavior and expenditure pattern, according to a Boston Consulting Group (BCG) report.

It is estimated to surpass USA to become the second largest economy in terms of purchasing power parity (PPP) by 2040 as per a report by PricewaterhouseCoopers.

These all estimates are worked out basis a strong supply chain foundation being built in India.

9

OPINION

The ‘Latent’ TALENT Year 2020, however difficult and chaotic, was the year that showed everyone how important the supply chain community is to keep the world running. The only reason we did not face food shortages under the widespread lockdowns was because the supply chain professions worked tirelessly, globally, to keep the supply chains running and ensure we get all the necessary goods for our daily livelihoods. We should all say a big thanks to all of them, and this opinion piece

by Radu Palamariu, MD Asia Pacific, Alcott Global and the Global Head of Supply Chain & Logistics Practice, presents a blueprint for the future supply chain managers to move up the ladder…

LEARNINGS THAT COVID-19 PANDEMIC HAS BROUGHT FOR THE SUPPLY CHAIN PROFESSIONALS… The need for an internal pre-existence BCP (Business Continuity Plan) team and Logistics Business Continuity Plan that supports overall company goals and objectives was quite evident and the most impactful lesson that Covid taught us. What this phase taught us is that supply chain managers should have the operational network readiness to change modes and routings flexibly to avoid transportation modes and routings constraints faced due to countries locked down/transport space capacity constraints. Covid taught us the importance of greater digitization and connectivity as more employees work from home and maintain social distancing. The enablement of an integrated visibility tool (eg: operations dashboards) will help facilitate decision makings in planning and execution remotely.

Besides, there are following pointers managers must consider: 1. There needs to be a greater diversity in supplier bases for critical parts.

2. Companies should consider dual sourcing/ localization strategies and

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build logistics support strategies around it.

3. Consider warehouse space buffers and scalability against supply chain disruptions (ie to cater for early pull - in of materials in anticipation of countries lockdown).

4.

Consider a more distributed manufacturing and warehousing strategy to reduce sole dependency on one site.

BIGGEST CHALLENGES THE INDUSTRY WILL FACE IN THE NEXT 5 YEARS… To me, attracting and retaining the right talent will be the main challenge.

We need to make supply chain a “sexy” profession to work in so that the young generation will want to be part of. The fight for the brightest minds is now across all industries. As one example, we all know “data is the new oil”. Everyone wants data scientists and analysts to make their businesses better. From Google, Facebook to logistics companies, to shipping companies, to manufacturing companies, the only way to beat technology companies is to improve your company and industry brand. Moreover, statistics showing the talent crunch in supply chain are numerous. Companies

Radu Palamariu has been working on C-level and top management executive search assignments with Top Fortune 500 companies and local Asia conglomerates, particularly for manufacturing, logistics, transportation, supply chain management and e-commerce. A frequent speaker at industry conferences across the region, he is a contributor on latest technologies shaping supply chains, as well as human resources trends and developments.

need to put in place talent development programmes, constantly upskills their people and give them opportunities to grow and develop. This way they will retain them. People stay where they get taken care of and developed!

TOP SKILLS THAT COMPANIES LOOK FOR HIRING SUPPLY CHAIN PROFESSIONALS Supply chain network design wizards:

freepik.com

OPINION With so many challenges in capacity in airfreight and seafreight, thinking out of the box and redesigning your networks is a must.

Data analytics skills to extract insights and know what to do Thunder fast implementation skills of digital technology: The implementation cycles have shorten from years to months and even weeks.

Swiss army knife skills: Versatile professionals that can think on their feet, adapt fast and weather any storm.

KEY SKILLSETS NEW AGE SUPPLY CHAIN MANAGERS NEED TO MAKE IT TO C-SUITE IN SUPPLY CHAIN… The key is the soft skills, supply chain executives need to focus on a number of essential areas: Communication and storytelling skills: We have extremely capable talent in the SCM community, that can get stuff done. The main challenge is that they sometimes are not that good in telling the story behind the value they bring to the organisation. How they help the company be more effective and serve

clients better. Why supply chain is so vital. This is key for the CEO, the board or any other executive in the company to understand the value of supply chain professional and for the supply chain professional to get promoted.

Leadership and team building skills: These are the basic, fundamental skills of any person in a managerial role. But again, many professionals need to work on this.

The only way to get things done in an executive role is by and through people, by building diverse and great teams.

It is not by being a great individual

contributor. That never works in a senior role!

Ability to be both hands-on and strategic: Forget the idea of a manager sitting in a fancy office and giving orders. That is not a leader. It has never been! To be effective in these chaotic times where a crisis is always on, you need to be in the field of battle, next to the team and show the way when necessary. Cheer and encourage from the front as well as have the ability to step back, see the big picture and act for the long-term benefit of the company.

Bridging the Talent Gap DEMAND for supply chain professionals exceeds supply by about 6 to 1, making it difficult to not only attract new employees, but to keep the ones already on board. Retaining top supply chain talent is an area of concern for executives, as researchers at Michigan State University in partnership with the APICS Supply Chain Council, found in their Supply Chain Management: Beyond the Horizon project.

Nick Little, Director of Railway Education in the Center for Railway Research and Education and former Assistant Director of Executive Development Programs at Michigan State University’s Broad College of Business, said, “We actually feel pretty good about succession plans for our replacements but it’s going down that next level and making sure we keep really good folks around to eventually move into other positions within the organization.”

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Companies should make retaining mid-level employees a priority because they reflect an organization’s future bench strength, and leaders need to spend time identifying potential successors. “You’ve got to make sure that if you’re going to keep people, you’ve got to look after them,” Little said, and that means more than offering a nice salary and bonus.

One way is to establish a career path that encourages employees to learn and grow in their current position or move into one that matches their capabilities. That could involve spending time in areas of supply chain outside of their expertise (e.g., a procurement specialist working in logistics), as well as other functions of the business (e.g., marketing or finance). Education is a great way for organizations to empower employees to devise solutions, Little said.

Source: Michigan State University

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FOCUS

KNIGHT In

SHINING ARMOR The COVID-19 pandemic has shone a bright spotlight to the field of humanitarian logistics and the wider global & local economies, and the supply chain associated with it. The outbreak has majorly impacted global manufacturing capacities and distribution of products & services locally and across borders. The response to the pandemic has been varied with some organizations having been able to quickly adapt and adjust to the new reality, while some have found it hard to survive. The dominant focus on minimizing costs, while following lean, just-in-time, and zeroinventory approaches while being hugely effective in normal times have several deficiencies in operating during a disaster or pandemic setting. Much can thus be learned from humanitarian supply chains for managing pandemic or disaster related supply chain disruptions, shares Sunil Banthiya, Chief Operating Officer, Aliaxis India, during the recently held Tattv’21 conclave by SIOM, Nashik.

T

HE World Economic Forum estimates that in the decades to come, epidemics will, on an average, cause an annual economic loss of ~ 0.7% of the global GDP, equal in scale to the global economic loss caused by climate change (WEF, 2019). The current coronavirus disease (COVID‐19) pandemic constitutes a global healthcare crisis with far‐reaching consequences on livelihoods and economies. The pandemic has had direct and indirect impacts and cascades on the supply chain.

Going by such striking estimates, this could not have been a more opportune time to talk about the importance of humanitarian logistics. What exactly is humanitarian logistics? The basic task of humanitarian logistics comprises planning, acquiring, and delivering requested supplies and services, at the places and times they are needed for the purpose of alleviating the suffering of vulnerable people. Humanitarian supply chains focus on saving lives and on

12 CELERITY March - April 2021

responding to disasters and emergencies and are therefore geared toward dealing with turbulence, uncertainties, and a complex dynamic environment.

The key difference between humanitarian logistics versus any business supply chain is in their strategic objectives. A business supply chain is centered around the fact that you want to achieve the most optimal cost to serve along with great customer satisfaction.

The objective of humanitarian logistics is to deliver a certain throughput in a race against time in most situations. The emphasis is more on throughput and not so much on optimizing the cost of service.

COMPLEXITY OF MANAGING SUPPLY CHAIN DURING A PANDEMIC Let me share some of the challenges that we faced in managing our supply chain during this COVID-19 pandemic.

A) Volatile Demand: The most talkedabout example of demand spike,

toilet paper, is ironically usually the go-to example of a perfectly forecastable product, since the end consumption, as you would imagine, is rather stable. The one thing which one quickly realized was that in this pandemic situation, no historical based statistical algorithms, the mainstay of most demand forecasting tools, are of much use.

A combination of “shortage gaming” and the “bullwhip effect”, results in unprecedented volatility in demand.

B) Supply Bottlenecks: The other challenge that we faced during the pandemic were the painful supply bottlenecks. Trade channels and our vendor operations got closed for a variety of reasons – shortages of labor, sickness, travel bans, or simply because they fell in containment zones. What this meant was that the ecosystem of suppliers, which you could rely on to support your manufacturing process was not

FOCUS available. Further the frequent plant start-up and shut down due to erratic material supply created a risk on operational performance and safety of the plant. All these factors along with availability of only a skeleton staff, due to COVID-19 infections, adversely impacted product supply.

warehouses closed because of their being in containment zones or otherwise - managing product shelf life and obsolescence further adds to the distribution complexity.

WHAT KIND OF SOLUTIONS SHOULD WE BE THINKING ABOUT?

C) Logistic Disruptions: The other key disruption was in terms of transport because the sudden lockdown meant that truckers in some cases abandoned their vehicles on highways. In many cases, import cargoes were stuck in customs due to the sheer amount of port congestion. Container shortages led to close to ~ 40 to 50% increase in ocean freight costs and all of this had truly little forward visibility, which meant that one hardly had the time to react, adjust and plan before the next crisis was on to you.

In a world accustomed to instant coffee, instant messaging and “click of a button” deliveries, there is, in this case, unfortunately no easy quick-fix solutions. One needs to build a unified playbook where you can set parameters, standardize with easy to replicate steps, which one could follow in a situation like this. This requires careful preparation; people capability build and an organizational ability to think and respond in an agile manner. As the old saying goes, “Amateurs study tactics, but professionals study logistics”.

D) Working Capital Crunch: What happens during any of these humanitarian disaster settings is also that there follows a working capital crunch, as businesses prioritize cash preservation in an uncertain world.

This translates to delayed vendor payments and therefore the inability of many small and mid-size vendors to stay afloat and be able to provide their services, resulting in a cascading impact of shortages and rising costs.

CRITICAL IMPORTANCE OF REVERSE SCHEDULING

E) Managing Inventory: This is more acute, if your product is shelf life managed and you happen to have

A) Reverse or Backwards Scheduling: The place to start would be the point of delivery or care and stretching back

Let us look at the challenge of the biggest public health undertaking of our times that we need to solve to mitigate the COVID-19 pandemic – getting needles to shoulder in the shortest period. In my point of view, what would make our journey from vaccine to vaccination successful is the implementation of some of the time-tested concepts of supply chain.

Facing and managing supply chain disruptions can be considered the new norm, considering other disruptive forces such as climate change, or financial or political crises. The lessons learned from humanitarian supply chains can help us to mitigate and overcome supply chain disruptions more effectively and help organizations, supply chains, and societies at large, to manage current and future disruptions. supplychaintribe.com

Sunil Banthiya is a versatile supply chain and operations leader with more than 25 years of experience across Plan, Source, Make & Deliver.

A passionate believer and practitioner of Supply Chain Excellence, Sunil has led several initiatives using appropriate technology & Lean Six Sigma tools across diverse product categories to achieve significant improvement in supply chain performance. Sunil holds a B.Tech in Chemical Engineering from Indian Institute of Technology Kanpur, India.

to the supply point of vaccine. Based on say what our goal on the number of vaccinations that we need to carry out per day or per week are, demand would get set. We now need to work backwards to map out the end-toend supply chain “flow” to fulfill that demand. The next step is to identify where the bottlenecks in the “flow” of vaccines is and to monitor and resolve them in real time. There are of course additional complexities – managing the vaccine shelf life, the requirement of a cold supply chain, reshuffling supplies based on fluctuating demand from one area to another, recording and managing a follow up schedule and delivery to the prioritized target group for vaccination, etc. The concept of “Reverse scheduling” is central in thinking through the capacity or throughput requirement in terms of volume, time and skill.

B) Debottlenecking Constraints: Most of us would be familiar with the theory of constraints. Simply put, you resolve one bottleneck, and another will get uncovered in the end to end supply chain. Organizations need to work towards eradicating those bottlenecks and see how they can manage all the pieces together be it sourcing, operations, logistics, and try to get a perfect “flow” from

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FOCUS the point of origin to the point of delivery.

LESSONS FOR BUSINESS SUPPLY CHAIN Let me share some of our own experience as we went through the pandemic and the lessons that we have learned from it…

A) Build redundancies in the supply chain: While it seems counterintuitive, one of the key learnings emerging from the pandemic is that one cannot afford to be only focused on Just in time deliveries, reducing inventory and taking costs out of your supply network. There is a tradeoff with these “lean models” and the level of preparedness or inventories required to combat a pandemic. Redundancy in terms of number of supply or distribution nodes becomes hyper critical to ensure business continuity and customer service. The reason I am saying this is that one of the key industry trends across the board, post the GST implementation has been one of consolidation of the distribution network footprint – merging or closure of warehouse operations in multiple states to sometimes a single large distribution center in a central location to prioritize scale synergies and reduce inventories and costs. Just imagine however if this single distribution center fell into a containment zone, what it would mean in terms of business continuity. Therefore, one of our key learnings was that some redundancies in the supply chain and the incremental cost because of it is essential as it can prove immensely useful to mitigate disruption in an emergency or a pandemic situation.

B) The Case for Diversification: A lot of companies have painfully learned the lesson of having all their “eggs in one basket” in how their supply chains are configured. Historically, large companies have sometime chased the cost arbitrage available of lower tax or labor rates and offshored a large part of their supply chain into a certain geography or country. For whatever reason, if that country

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One must communicate both upstream and downstream in terms of managing your internal and external stakeholders, employees, suppliers, and customers to ensure alignment.

Pandemics and disaster settings are fertile grounds for rumormongering, fueled by easy accessibility to social media. As in anything, nature abhors vacuum – an absence of transparent communication from you would quickly get filled with speculation and conspiracy theories. In most cases, it is better to OVERCOMMUNICATE than to COMMUNICATE LESS.

or region suffers a disaster or a health pandemic, you are looking at a large disruption in your supply chain. Companies with diversified supply chains during this COVID-19 pandemic were far better placed to mitigate the disruption due to the pandemic in one region by quickly ramping up production in a less impacted geography.

Let me give you an example of 3M, the industrial giant, which in no small way, was able to meet the spike in demand of their N95 masks because of their global manufacturing footprint and not being constrained by a single source of supply. For large organizations therefore, even if the complexity and costs are more, it makes sense to have a global footprint.

C) Agility: What the pandemic also taught us is the criticality of being nimble – operating systems which enable flexibility are the rights ones to invest in. Employees, being able to navigate and manage ambiguity, identify, and cope with workarounds (ramping up on virtual meetings for example!) and above all be resilient in the face of adversity. Adaptability is required whether it be in terms of a small change in being able to say ship directly from the plant to the customers or in managing a large

change of reformulating a product to accommodate an alternate source of supply. Again, when you build in flexibility to work in multiple ways in your supply chain, you also incur an additional cost. However, this flexibility may just be the critical difference to being able to survive and thrive or perish.

C) End-to-end Visibility: Having realtime visibility of your supply chain is key to agility. If there is one thing that this pandemic has taught us, it is the importance of digitization and being able to have an end-to-end visibility – right from where your raw materials are to the inventory your distributors are carrying. If you are running a cross-border supply chain, having visibility becomes even much more critical for you to be able the manage that entire flow of material from your vendors, logistic partners, to manufacturing and finally to your distributors and customers.

Digitizing the supply chain improves speed, accuracy, and flexibility and the ability to respond in real-time.

D)

Collaboration & Innovation: The COVID‐19 pandemic has accelerated business model innovations and brought it to the forefront. There are abundant cases of organizations donning a new avatar, for example, automotive and aerospace manufacturers producing

FOCUS ventilators; distilleries producing hand sanitizers, or, in transportation, stranded passenger planes being converted to cargo planes. The latter was important as much of medical transportation uses belly cargo; thus, stranded passenger planes hugely improved the overall cargo capacity.

For our organization as well, soon after the lockdown, we realized, that we could leverage our existing as well as forge new collaborative relationships with academia, hospitals and vendors to innovate in repurposing our manufacturing facilities in response to the pandemic.

Using our core manufacturing competency and expertise in plastic processing, we could initiate design and manufacture of PPEs such as face shields, safety goggles and hand sanitizers. By collaborating with academia & hospitals, we improved on our initial product

design, developed rapid prototypes to be able to scale up quickly for mass production. In all of this, an important part is the relationship with your suppliers and customers. Relationships are critical if you need quick access to more products from your vendor, for example, working capital support from your customers and given the fact that all suppliers and customers were facing a difficult time, such relationships became even much more critical.

ABOVE ALL, EXECUTION IS THE KEY… All this finally boils down to one simple fact of EXECUTION. As the saying goes, “Ideas are everywhere, it's finally the implementation which matters”. Good execution capability is a key characteristic of any great supply chain and let us look at some of the key enablers for good execution...

A) Centralized Co-ordinated approach: Executing in a dynamic fast changing external environment requires a centralized coordinated

approach. A patchwork approach rarely works. This is even more critical when there are multiple stakeholders you are having to deal with. One needs to co-ordinate both horizontally and vertically.

Let me explain what I mean by horizontal and vertical coordination.

When it comes to horizontal coordination, it’s all about suppliers in manufacturing and distribution, you need to get that coordination right.

Vertical co-ordination is essentially from a strategic or tactical point of view – what's the inventory required say at a certain point, where do you think the demand would emerge and how would you service that? Making choices, therefore in terms of what to prioritize is a key decision. One of the things, for example, that we did during the pandemic, knowing that we were constrained in terms of capacity due the fewer number of lines that we could run and the limited number of people we could get into our plants, we carefully chose which part of the product portfolio we should focus on and the SKUs that we should make and deliver.

B) Crisp & Clear Communication: The last thing that I cannot stop emphasizing is the importance of clear messaging in a crisis. One must communicate both upstream and downstream in terms of managing your internal and external stakeholders, employees, suppliers, and customers to ensure alignment.

Pandemics and disaster settings are fertile grounds for rumormongering, fueled by easy accessibility to social media. As in anything, nature abhors vacuum – an absence of transparent communication from you would quickly get filled with speculation and conspiracy theories. In most cases, it is better to overcommunicate than to communicate less.

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EVENT RECAP

Research and Practice in OPERATIONS MANAGEMENT We are living in unprecedented times and such times call for pathbreaking innovations and their implementation at rocket speed. Gone are the days when it used to take years in defining the need for change and then working on it. The last year, thanks to Covid19, taught us to be on our toes in bringing about change at the fastest pace ever to sustain and survive in the globally turbulent and dynamic marketplace. This was a strong message from the recently held e-Conference hosted by Symbiosis Institute of Operations Management Nashik with the theme, “Research and Practice in Operations Management: Lessons from COVID-19”.

The International Conference on Operations and Supply Chain Management (ICOSCM 2021) provided insights on challenges and shortcomings that Covid-19 has exposed in supply chains.

This report provides you a quick takeaway of the thoughts of the keynote speakers as well as the winners of the Best Research Papers Award, held during the day-long summit. We were especially thrilled to listen to the keynote speakers’ views on how operations management would shape up in the future and how can companies prepare themselves for the change.

I

n the words of Dr. Vandana Sonwaney, Director, SIOM, “The domain of Operations Management has always been a challenging endeavor owing to its turbulent and uncertain nature. But what it has been witnessing during the times of the COVID-19 pandemic is so unprecedented and drastic that it signals a distress call for immediate intervention by strategic revamping through well thought-out and prudent restructuring of supply chains to alleviate the challenges for businesses across the globe. This demands an extensive and exhaustive display of scholarly work from the greatest and

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accomplished minds under the gamut of Operations Management.”

Keeping these thought-provoking insights in mind, the main objective of SIOM’s International Conference on Operations and Supply Chain Management (ICOSCM 2021) was to aim for greater insights on the challenges and shortcomings that an unprecedented pandemic like COVID-19 has exposed in the world of operations, from the experts as well as the researchers. Let us hear it from the winners on their ideas and how they are going to transform the operations management domain…

EVENT RECAP What is the inspiration behind this winning paper?

How did this idea strike you?

Rofin T M, Assistant Professor, School of Management, National Institute of Technology, Surathkal:

In the COVID-19 era, all of us are hesitant to visit retail shops especially when they are crowded. This fear was intense during the country-wide lockdown period. Numerous customers switched their purchases into online channels even for essential items such as groceries and vegetables. It can be said that COVID-19 fostered the online buying behavior of customers, which was already established owing to the skyrocketing smartphone sales. This scenario inspired me to think of a supply chain configuration comprising only of online sales channels and that is the basis of my paper, “Optimal dual-online channel supply chain configuration of a manufacturer”.

Pushkar Chaturvedi, Senior Account Executive, FedEx Express TSCS Pvt. Ltd.:

I am working in the logistics industry from last 5 years and actively working with stakeholders of supply chain.

Covid-19 came up with lots of challenges and opportunities where we can work together. Post Covid-19, it was the time of reality check to understand as to why this industry got stuck for 2-3 months, what were the causes and what could be the strategies, which may be helpful for these types of situations going forward to tackle these firefighting situations.

This is what inspired me to work on my paper, “Third-Party Logistics Supply Chain in Covid-19: Challenges and Strategies”.

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According to you, what are the tangible gains companies can achieve with your proposed research?

Rofin T M: Online sales channels have created a level playing field enabling small players to compete with big established firms having deep pockets. Online channels also helped small manufacturers and sellers to avoid middlemen making the products available at a lower price for the customers. Most importantly, small manufacturers and sellers can enter the market without huge capital investment if they resort to the supply chain configuration proposed in the research.

Pushkar Chaturvedi: Endeavour of this research is to build an impactful plan for contingency situation. We are trying to build strategies, which will help this industry to build a strong action plan for challenging situations like Covid-19.

This research will provide guidance to 3PL organizations to train employees for emergency situations.

What are the immediate challenges that companies are facing in managing their supply chains and how does your research address the very challenge?

Rofin T M: The current challenge that supply chains are facing is the resiliency.

COVID-19 was an acid test for the supply chain resilience. Sudden demand disruptions and supply disruptions tested how quickly the supply chains can adapt to the changes in market conditions.

Online distribution channels were highly effective during the pandemic owing to the flexibility in operations. In that sense, the proposed supply chain configuration can be said to have a better resilience.

How should organizations work towards steering their supply chain in the right direction in the Next Normal?

Rofin T M: The organizations should identify the supply chain vulnerabilities as a first step to increase the supply chain resilience. Because of the increased frequency of supply chain disruptions, it is imperative for the organizations to diversify their supply base geographically i.e., adding more sources in locations not vulnerable to the same risks. Further, decisions on safety stock and positioning of safety stock in the value chain are also critical decisions to be made by supply chains in the next normal. It is also important for supply chains to take advantage of the new process technologies such as additive manufacturing and continuous flow manufacturing for improving the supply chain flexibility.

Pushkar Chaturvedi: Now organizations need to understand the importance of contingency plan. They should focus on building a robust flow of information among the supply chain stakeholders like suppliers, manufacturers, marketplaces, 3PL services & regulatory agencies to create a win-win situation for everyone.

They should work upon demand forecasting and planning of capabilities management based on information from other stakeholders. Organizations should now focus on technology development to work in emergency. They should also provide training to their employees to react promptly to these firefighting situations. Organizations should also focus on building infrastructure to cater to the booming demand, specially from e-commerce growth in India.

Pushkar Chaturvedi: As per my research, the immediate challenge in managing supply chain is demand forecasting due to lack of information flow between the supply chain stakeholders. My research findings indicated that 3PLs are facing challenges in managing capabilities due to lack of information about upcoming demand from customers. With the help of impacts information system, we can bridge this gap between customers and 3PL organizations.

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EVENT RECAP KEYNOTE 1

THE DIGITAL CONNECT

“Technological interventions are going to be the catalysts in the way we manage supply chain globally.”

A crystal gaze from Subodha Kumar, Anderson Distinguished Chair Professor of Supply Chain, Marketing, Information Systems, Statistics, Fox School of Business, Temple University…

Whenever you run with low inventory, lot of inefficiencies get exposed in the supply chain and the same challenge was evident during the COVID-19 period with the lockdown being imposed by countries. It’s a Wake Up call for all of us that we need to do a much better job in our operations and supply chain systems. With COVID-19, we are going to see a fundamental shift in the way supply chains have been functioning over the years.

I would like to bring to you a classic example of 3M as to how it took the situation in its control and quickly adapted to the New Normal. At the start of the pandemic in the early January 2020, demand for N95 masks and healthcare equipment was on the rise, while other items were seeing a demand slump. 3M responded to this with an operational pivot: significantly ramping up production in some areas but cutting inventory elsewhere.

The manufacturer developed surge capacity during the SARS outbreak in

the early 2000s — and two decades later, that experience enabled it to quickly accelerate production of high-priority SKUs during the COVID-19 pandemic.

The manufacturer began ramping up production of N95 respirators in January, from 22 million per month prepandemic to 26 million. By June 2020, 3M was making 50 million respirators per month. It added two new respirator lines at a Wisconsin plant in Q3. It dropped non-critical SKUs and refitted production lines for critical supplies.

All this was possible because of an enhanced technology system that the company invested in. 3M put its critical shipments on a renowned technology platform it has invested in to get realtime data in one place, which allows 3M to keep less buffer stock on hand. Getting parcel tracking live took less than one week. 3M's response does prove the value of real-time data and agility. Forecasting based on historical models was rendered ineffective during the pandemic, with real-time data proving more valuable. And demand shifted quickly at the consumer level, amplified the supply chain via the bullwhip effect and requiring suppliers to adjust on the fly.

With this example, I would like to

reiterate the fact that your uncertainty is much less because you exactly know where the item is. That data translates into aligning inventory orders closely with demand, allowing the lean operations and balance sheets many supply chains strive to achieve.

VACCINE DISTRIBUTION Now as we are into the pandemic situation for almost a year and the vaccine is already out, the next issue in front of us is vaccine distribution. Last mile distribution and storage are going to be bigger challenges in managing the supply chain. We have to look at all these issues from the new lens. Technological interventions are going to be the catalysts in the way we manage supply chain globally. Talking about digital transformation, we have AI, machine learning, business analytics, etc.

As far as business analytics is concerned, two things are emerging right now – we are witnessing a stream of data analytics, predictive model, etc. Another angle is from supply chain optimization perspective. Both have to work together to arrive at a holistic solution we need currently. It will lead to lot of interesting research and the academia will need to play an enabling role to solve such critical problems.

EMERGING TECHNOLOGIES If you think of digital innovations in healthcare, blockchain was clearly emerging as the next technology to bank on even before the pandemic. Blockchain in pharmacy is going to catch up faster than we could even imagine. Early

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EVENT RECAP movers will have the advantage in pulling this off. We shouldn’t be delusional that the life will be back to normal once the vaccination starts. We have to be ready for many such disruptions coming our way in the future as well. Blockchain technology could certainly provide an answer to these eventualities. Cold chain monitoring is a big deal and if blockchain can offer an end-to-end visibility into the system, then it will be a real gamechanger.

AI IN HEALTHCARE Virtual reality was another area that was already taking shape, but now owing to the lockdowns, this became the ultimate need of the hour. Chatbots also came as great alternative for solving customers’ immediate redressal. Now, with the COVID-19 pandemic and social distancing, telehealth is more useful than ever. Online question and answer (Q&A) forums where patients can

directly raise their questions or concerns to their doctors are one of the most efficient methods of telehealth. These forums are beneficial for many common medical issues that can be solved simply from a doctor’s response, rather than an in-person visit.

In countries like China and India, there is a huge gap between healthcare in rural and urban settings. The big cause for the emergence of these (telehealth) platforms was to solve inefficiency in the system. What we are seeing longterm is that hesitancy is gone. People have done it and they are comfortable with it now. It’s more convenient. These platforms also give patients the chance to provide feedback back to the doctors, a chance they would not typically have in the traditional healthcare system.

They are now able to provide their anonymous views and opinions, which can help improve the healthcare system

in general.

If we look at the big picture, systems like eBay are simply connecting the buyers and sellers. It is the same for these online healthcare platforms.

They are connecting people. The online connection between patients and doctors is proving to be more efficient and costeffective long-term, as well as beneficial for both the doctor and patient. As people are encouraged to reduce social interaction, this form of telehealth has a promising future to play a much bigger role in healthcare.

Going ahead, we will see a lot of convergence between traditional supply chains as well as emerging ways of managing supply chains to strike a perfect equilibrium and develop a futureready and efficient supply chain.

KEYNOTE 2

EMBRACING DIGITAL CHANGE

“Customer service and experience are going to drive businesses going forward.”

The first-hand account of Dr Samir Yerpude, Deputy General Manager, Tata Motors, where he talks about the muchneeded thrust on technology adoption in the operations management…

To start with, let me ask you a simple question… What was the biggest learning or the outcome of the Covid19 pandemic on organizations? It is significantly this…

We have developed resilience against unforeseen situations. Companies came up with the innovative ways to connect with the customers. Sectors such as e-commerce, healthcare, pharma, and education sector were the major traction points towards resurgence. We also saw agility in the adoption of digital technology. To bring to your notice, what was our 5-year agenda towards digital adoption, we could achieve that in just about one year, all thanks to the

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pandemic. We had to ensure business continuity even during pandemic to survive and sustain our market share.

This is where the thought leadership comes into picture. We have achieved a more collaborated and digital supply chain management where digital has touched every aspect of business.

TECHNOLOGY RENAISSANCE We are witnessing a great disruption happening in the operations management with lean manufacturing and IoT shaping up the pace of operations. All of these is leading to a better customer experience.

Digital transformation encompassing big data analytics and machine learning are redefining the way operations and supply chains have been functioning over the years.

Cyber-physical systems dictate the current Industrial revolution 4.0 while firms are embarking the Industry 5.0 journey. With the experts nowa-days talking about Industry 5.0, we are essentially speaking about personalization for the customer in every segment and that calls for a connected ecosystem with the highest collaboration.

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EVENT RECAP Characteristics such as small batches yet upholding the economies of scale is the Present. Innovations such as Internet of Things (IoT) help collaborate between the physical and virtual environments which assist the collaboration. Isolation between the systems is avoided and comprehensive view gets generated with the real time data emerging from the IoT landscape.

DELIVERING THE CUSTOMER EXPERIENCE Customer experience is the new brand image, and the longevity of organizations is dependent on the same. The great marketing guru, Phillip Kotler had once mentioned that key to customer retention is customer satisfaction. Statistics reveal that existing customer base supports 60% of the future business, therefore customer retention becomes vital for an organization. Best prices, agility and connectedness are some of the fundamental expectations from today's customer. Organization leaders will have

to align the strategies and view it in the light of the New Normal to retrieve business and gain back their positions which is a huge potential still to be tapped with emphasis on Make in India.

In my experience, customer experience is going to drive businesses going forward.

To accomplish this, the highest level of process efficiency is obligatory, and this is where operations management is expected to deliver.

CLOSING THOUGHT The proliferation of new business models will take place across most of the sectors in India. Business processes will undergo a significant change post the pandemic unleashing large number of opportunities. The New Normal can be visualized with all sectors having a strong Digital footprint. Businesses which were never visualized to be on the e-commerce platforms will mark their presence and flourish on Internet. A paradigm shift is waiting for all of us in the nearest future while the world will unlock in phases.

Businesses globally are currently under tremendous pressure and awaiting the lockdowns to be lifted. Supply chains are stressed with the equilibrium between demand and supply skewed. Anxiety and panic buying have resulted in a bullwhip effect in most of the categories, which will take a while to stabilize. Under such circumstances, Digital will play a vital role.

Businesses embracing Digital will have a much higher probability of survival.

The longevity of organizations not having Digital channels will be jeopardized. Real time customer data collated with the help of Internet of Things will enable businesses execute AI algorithms to predict the future. As organizations will change, consumers also must undergo a change. Organizations will look forward to innovating and co-create opportunities for consumers keeping in mind the personalization factor. In short, it is quite an exciting journey ahead for the bullish and grueling times for the bearish.

The supply chain: The new protagonist and the stress test SINCE the 2008 financial meltdown, regulated financial institutions globally have been forced to stress test their balance sheets to assure preparedness for an economic shock.

Governments would not have it any other way. Similarly, a series of large-scale cyber-attacks in the past 10 years has forced technology companies to institute penetration tests to scrutinize their cyber-security mechanisms. Boards of directors will not have it any other way.

In a post-COVID-19 world, supply chain stress tests will become a new norm. The distributed global business model, optimized for minimum cost, is finished. Tomorrow’s model demands new priorities in optimization.

The supply chain has become a main protagonist everywhere, it has moved from playing a “behind the scenes” organizational role to being a prime driver of the company business.

In the past, volume stability enabled the supply chain to deliver with a high level of service while lowering costs at the accepted quality. However, supply chains and manufacturing plants allow minimal flexibility in terms of volume – as the struggle to fulfill ventilator demand has exposed.

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As volumes become more variable, supply chains must become more adaptive, especially if, as forecasts suggest, large suppliers and logistics operators in the supply chain industry must prepare for major catastrophic events such as weather events (fires, flood, tsunami), lethal pandemic outbreaks, strikes, social unrest and associated disruptions.

To manoeuvre choppy waters, navigators need visibility.

In certain industries, such as microprocessor development or consumer technologies, advanced electronics manufacturers have already produced comprehensive dashboards that lay out the full status of production and shipment, down to the last detail. The dashboards refresh every 20 minutes to provide a real-time overview of the entire supply chain.

Such technology will inevitably emerge as the norm.

Consider the pharmaceutical industry, for example, where there is currently no single database, either centralized or distributed, from which to map the critical components for drug manufacturing. For suppliers, and ultimately, end-users, the visibility on sourcing is critical and must be upgraded.

Source: IMD

COVER STORY

BIG BOX

BOOM Once regarded as a backroom support function, warehousing and distribution are moving out of the shadows and getting into the spotlight. In the past few years, these have undergone a major identity shift. Now, warehouses hum with cutting-edge technology, and the C-suite is beginning to recognize the essential role it plays in driving profitability. This wide-reaching shift in how people buy goods & services has pushed more DCs into the direct-to-consumer fulfillment game and intensified the pressure to provide speedy service. The pandemic has brought forward the digitalization story. Moreover, with the advent of always-on e-commerce, the demand for faster responses, and the need to manage a larger number of SKUs with fewer errors, warehouses need to scale up and meet the standards of an intelligent, efficient, and automated warehouse. Looking ahead, a surge in the preference for digital transformation will bring fundamental changes in the way warehouses operate today and this cover story essentially captures the aspects of the changing facets of New Age Warehouses in India…

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COVER STORY

T

HE country’s warehousing sector gained prominence in the last 4-5 years as the ecosystem for efficient supply chain had been triggered by the implementation of GST in 2017. In the same year, the Central Government’s grant of ‘Infrastructure Status’ to the logistics sector including warehousing, had also proved to be a catalyst. Since then, this segment has undergone a rapid change towards institutionalization. From the supply side, the warehousing segment, earlier dominated by unorganized players, has increasingly attracted global players and accelerated formalization of the sector. The regulatory system is also offering a fillip to the sector with many state governments announcing dedicated logistics sector policies. On the demand side, occupier expectations in terms of compliant and quality warehousing space, have catapulted to the next level with increasing dominance of e-commerce, 3PL players and corporates with global operations, states a recent report by Knight Frank.

A recent JLL report stated that the Indian warehousing industry is in a three-dimensional growth path; growing by length across cities from suburban to urban areas, growing by breadth across India’s tier II and tier III cities along with tier I; and growing in height by venturing into multi-storey warehousing spaces. As we have seen in the last few years, particularly the warehousing sector has achieved new benchmarks on demand, supply, and investments. Noteworthy is the fact that these peaks have been achieved on an improving metric of quality – for both product and the enterprise. While Covid-19 has had a significant impact on the Indian economy, the warehousing sector provides hope considering it will be better placed compared to residential, retail and office. The Warehouse & Logistics Sector is limping back to a semblance of normalcy after a period of disruption due to the global pandemic.

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Experts also opine the same sentiments when it comes to warehousing uptick.

According to Balbirsingh Khalsa, National Director Industrial & Logistics, Knight Frank India, “The most important change the pandemic has brought about; mostly with warehousing pertaining to e-commerce is a push for in-city warehousing. As the pandemic and the subsequent lockdown pushed most demand for essential goods online, the pandemic has also brought about the use of live tracking to better track delivery status. Many 3PL companies have also started using UV lights and disinfectants to maintain better sanitation standards.

The DGCA (Directorate General of Civil Aviation) has also permitted the test of drones for delivery for 13 e-commerce companies, owing to the stress the sector was facing due to the lockdown.”

Giving 3PL perspective, R Shankar, CEO, TVS SCS, highlights that Covid impacted supply chain severely, hence the effects will be long lasting. The key ones are listed below: 1. Safety & Hygiene – For health and safety of workforce, some form of social distancing, sanitization and hygiene will be practiced.

2. Additional inventory stock – During Covid, lean inventory left manufacturers with production stoppage, hence practice of keeping buffer stock will be seen. This may lead to warehouse capacity expansion.

3. Warehouse automation & technology adoption – Shortage of labor and need for speedy deliveries both have stressed on the importance of automated warehousing infrastructure. Even technology investment will pick up higher momentum as the visibility of supply chain is essential to overcome the abrupt challenges. Inventory visibility will be the top-most need.

4. Revisiting supply chain network

– Many companies are bringing manufacturing closure to home for better control and are trying to be less reliant on the global supply chain practices. Another change is decentralized warehousing to meet same day/ next day deliveries. Being closer to the customer decreases transportation costs and reduces the risk of supply chain disruption.

Both these strategies will involve reassessing the existing supply chain network, making it more agile, accessible and technologically superior.

5. Adoption of E-commerce & Omnichannel distribution – e-commerce boom won’t subside post Covid.

Omni-channel will also exist to allow customer to buy in-store/ online. This change will impact the warehouse operations, material flow, processes and storage strategies.

Seconding his thoughts, Rajesh Makkolath – Head Business Development India, Godrej Storage Solutions, states, “Pandemic resulted in huge supply chain disruptions and all clients will try to de-risk themselves in the future by moving from ‘just-in-time’ to ‘just-in-case’ for stocking. The other prominent change was the shift towards online buying across all categories.

This will have a permanent effect on fulfilment models from pure online or offline to omnichannel models gaining traction.”

CHALLENGES IN BRINGING ABOUT TRANSFORMATION As distribution operations become increasingly complex and labor costs continue to climb, more supply chain executives will be looking to technology for help managing fulfillment operations.

According to the study, over the next 10 years, companies will increasingly implement robust software that can orchestrate their inventory, people, and automation requirements. Prior to the pandemic, the warehouses were labor

COVER STORY Nataraja Subramanian, MD, Miebach Consulting India Pvt. Ltd.

Warehouses in upstream supply chain (Factory warehouses, CDCs, etc.) are clearly going the AS/RS, pallet shuttle way for most industries. Thanks to increasing e-commerce adoption, warehouses in downstream supply chain are moving away from case handling to piece handling in a large way. Technologies enabling unit picking and sortation (from PTLs to sorters) would be quite relevant in our warehousing landscape in the days to come. WMS (to meet such operations complexity) would see big adoption. Besides, we clearly see a big shift towards automation in all aspects of DC design. While technology choice and applicability vary by industry, geography and scale, ‘Goods to Man’ technologies for pallet, case and unit handling like ASRS, pallet and case shuttles, conveyors and AGVs for movement, sorters (Piece / Carton) are becoming increasingly common place. We expect these trends to accelerate.

intensive in nature and there wasn’t any need felt to innovate or adopt big technological changes. However, the social distancing, health and safety protocols brought to fore due to the pandemic are pushing warehouses to accelerate automation and decrease human dependency. But what’s the ground reality and why was there such a resistance towards opting for automation before Covid struck us? Experts believe that the biggest lacuna comes from the mindset of people in adapting to the changes.

As Ravi Soni, CEO, Grus & Grade, states, “We have been associated with many small and medium industry leaders and found that the greatest bottleneck

in adoption of these technologies is the mindset. Many of these industry leaders, though acknowledge the need for change, but there is lack of willingness in them to either accept the change or adopt the change. Any new technological solution needs huge investment, and without a clarity on ROI or the actual benefit derived (used case) out of adopting these technological solutions, the mindset to invest for technological upgradation is not possible.”

The second major challenge is the technology itself. Most of these disruptive technologies are still in their nascent stages of development with extremely limited data to substantiate its actual value for the industry. Few

big players like Amazon or Walmart can absorb some sunk cost during research and development or experimentation phase. The same bandwidth is not available with small and medium players. The third major challenge is at the implementation of these solutions by early adopters as it requires a complete change management of the entire enterprise. Thus, this demands a cultural shift in existing company practice.

Unless the employees also see the benefit of these disruptive technologies or they are made the stakeholders in the change platform, there is going to be an internal resistance.

Next major challenge in bringing these solutions are the extraneous

As the Indian warehousing market moves towards formalization, many new formats on warehouse development and operations will be explored in the country. One such format prevalent in developed markets globally and in Asian cities like Hong Kong, Singapore and Shanghai is the multi-storey in-city warehouse format. At present in India, old makeshift industrial galas and other commercial spaces are being utilized for such storage requirements and in-city warehousing in true sense is yet to mark a beginning in the country. The in-city structures easily facilitate the short delivery timelines of e-commerce and fast-moving segments like retail, FMCG and perishables, thereby building a case for them in India too. A multi-storey in-city warehouse can be any structure with more than 2 storeys (G+1 upwards). While a 5-6 storey warehouse is more popular in Japan and Singapore, 12-storey warehouses are popular in Hong Kong. supplychaintribe.com

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COVER STORY

Mayur Tolia, Project Manager, Lafarge Holcim IT Asia

Automation in warehouses offers tangible gains such as improved capacity utilization, allowing sharing of underutilized space; improved man-machine coordination, leading to higher standards of compliance to safety and SOPs; improved throughput; better visibility allowing faster decision making on demandsupply and inventory level plans and reduced damages/ pilferages and better inventory cost. Indian warehousing space may see extensive and intelligent deployment of Artificial Intelligence & Robotics and Dynamic Shelf space in time to come. While the e-commerce industry is a frontrunner on this, the adaption of the technology in traditional manufacturing set-up especially capital-intensive segments like steel, cement, coal, etc., would be the next level adaptors.

challenges caused by political, cultural, and social factors. We often forget the role of extraneous reasons while adopting any change, be it company specific, sector specific or industry specific. “We need to establish a steady flow of communication before adopting any change in the existing system and integrate all the stakeholders in the information flow. The knowledge dissemination for adoption of disruptive technology and a steady flow of communication between all the layers of the value chain is a must for a revolutionary change in application of industry 4.0 solutions for advanced warehouse management,” Ravi adds.

According to Nataraja Subramanian, MD, Miebach Consulting India Pvt. Ltd., the foremost challenge is in establishing the business case for automation here. “We’ve a business case framework through which we seek information relevant for business case modelling from about 50 value streams within supply chain. Some of these value streams sit in other parts of supply chain (well beyond the DC) but would be positively impacted by an automation decision in DC. Most often people don’t see this. Trying to find a business case within one silo of supply chain, in our humble view, results in suboptimal decisions being made in most use cases. We at Miebach see this as an important responsibility of ecosystem partners to support business leaders with such enablers so that they could take right decisions.”

Other challenges in the transformation are the usual suspects – “On time, in budget, go live and

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demonstrating value delivery to business in near term. We at Miebach follow an internally developed holistic metrics framework called FOCUS (Finance, Operations, Customer Service, Safety) to measure DC operations efficacy.

We are seeing big performance leaps in all metrics, which fold into FOCUS (particularly storage density, productivity and accuracy) in all implementations over time,” states Subramanian.

Mayur Tolia highlights the following challenges: ◆ Lack of low-cost ready solutions/ technology know-how ◆ Buy-in of the workforce especially the laborers and the warehouse operators who had their own fears of losing jobs and investing in infrastructure respectively ◆ Design to deployment remained a complete FIRST TIMER experience for the typical cement warehouse automation ◆ Change management w.r.t. training the warehouse caretakers on technicalities of the conveyors (loading/unloading machines), keeping in mind both operational efficiency and safety remained a big challenge.

UPCOMING POLICY DEVELOPMENTS The government has been proactive and made necessary policy changes and put forth strategies to reinforce its manufacturing and logistics goals. A slew of initiatives was announced to aid the sector such as the National Investment

Grid, Central Single Window Clearance (industrial and warehousing) and PLI with Stakeholder perceptions, for instance among many others.

Upcoming policy developments are aiming to create single window e-logistics market to cut the logistics costs. “Policy will aim for seamless multi-modal freight transfer and make freight movement for key commodities cost-efficient. But policy should also facilitate alignment between the Centre and the states otherwise it will be hard to implement,” states R Shankar.

Here are a few suggestions by R Shankar for the policymakers: ◆ Logistics policy needs to be developed covering first mile and last mile linkage, post identification of potential multimodal corridors after mapping current infrastructure, industrial clusters and analysis of origin and destination cargo. ◆ Any infrastructure development should not be looked at in isolation, but as part of an integrated multimodal system of transport. ◆ Any new infrastructure such as port/ airport should not be developed without intermodal connectivity. ◆ Terminals and cargo handling facilities should be set up at strategic locations with adequate connectivity to road and rail. ◆ Last-mile connectivity should be encouraged through PPP in a timebound manner. ◆ Logistics Council should be set up in co-ordination with infrastructure service providers and 3PL service providers to facilitate effective

COVER STORY collaboration.

Rajesh Makkolath feels that all the 29 states should have the logistics and warehousing policy framework in place (currently 8 states have a valid one). This will aid both the occupier and the developer. There needs to be standardization in logistics as far as material handling equipment/warehouse spaces/racks/pallets etc., are concerned, which will help drive interoperability, compatibility, repeatability and quality.

NEW AGE WAREHOUSING PRACTICES Globally, e-commerce has caused a wave of technological innovation in warehousing.

It started with Warehouse Management Software (WMS) that reduced the burden of data entry and paper records, to conveyor belts and pick-to-light systems that helped increase the speed of sorting and picking. Globally, warehouses have come leap years ahead in a matter of just two decades. Smart warehouses, like smartphones, have become common parlance. Also referred to as intelligent warehouses or warehouses that think, all gadgets and devices within a smart warehouse are connected to each other via Internet and can effectively perform multiple operations simultaneously.

Another trending feature in global e-commerce warehouse is IoT, a system that connects and integrates electronic devices via Internet such that they can send and receive data from each other and perform their respective functions in sync with one another. One more important innovation is augmented reality, a real time integration of digital information

End to End inventory and warehouse management for Agri commodities used by NBHC with the existing environment, e.g., vision picking. Besides, there is 3D printing, robotics, self-driving vehicles, and drones that have greatly enhanced e-commerce warehousing efficiency in the West. The quest for innovation is ongoing and the new technologies continue to enter warehouses, as per the Knight Frank report on Warehousing.

According to Balbirsingh Khalsa, “At present, the Indian warehousing market is being driven by the expansionary business model adopted by most e-commerce companies in the country.

The rise in e-commerce activities has induced the use of certain innovative practices to improve efficiency in the supply chain process. Warehousing Management Software (WMS) was the first major technological breakthrough, as a replacement for the enormous paper trails that warehouses used to produce

for punching in and out. Then there came conveyor belts and pick-up machines that increased the speed of picking and sorting. Within two decades, global warehouses, adopting IoT (Internet of things), have become smart warehouses that have multiple gadgets/equipment connected through the internet and can perform multiple tasks simultaneously while constantly in sync with each other. Other innovations include the use of Augmented Reality (AR), 3D printing, robotics, drones, self-driving vehicles have all aided in the efficiency of warehouses.”

To increase both the speed and convenience of pickup and delivery, Walmart is planning to scale several stores, so that can serve as local fulfillment centers. The company describes these centers as compact, modular warehouses built within, or added to, a store. The

Ravi Soni, CEO, Grus & Grade

I see COVID-19 as a blessing in disguise. The biggest benefit of this pandemic is setting of the ‘New Abnormal’. I do not term it as a new normal. The greatest challenge in the adoption of new age technology by first- or second-generation industry leaders was the mindset. No one felt there is a need, even if there was a latent need, it was not given any prominence as there were no demonstrable benefit. Who wants to invest when things are normal? Warehouse management solutions are no exception to the positive impact of Covid. Industry has been forced to think beyond normal to satisfy the huge demand created by e-commerce players during Covid-19. This needed a complete transformation and industry is transforming to need created by the ‘new abnormal’.

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COVER STORY company will use these centers to store both fresh and frozen items, as well as consumables and electronics. But you will not see people in these centers.

Rather than an associate walking the store to fulfill an order from our shelves, automated bots retrieve the items from within the fulfillment center. Items are then brought to a picking workstation for the order to be assembled. Once the order is collected the system stores it until it is ready for a customer or delivery driver to collect. These are the Next Generation Warehousing practices we are talking about.

Today’s warehouses are being completely transformed by advances in technology. As e-commerce continues to grow, these changes are happening quickly, as stated by R Shankar… ◆ Automatic data collection – Use of barcodes and radio frequency identification (RFID) to expedite the data collection process and maintain accuracy. Barcode scanners are further being replaced with more innovative and easier scanning technology solutions such as mobile, wearable, and augmented reality, aiding better efficiency. ◆ Big Data – Large data sets collected with above automation can be analyzed computationally to reveal larger patterns and trends that might not be obvious to the human eye. These studies help to balance inventory turnover ratio and examine how operations could be streamlined to their fullest capacity. ◆ Warehouse automaton – Use of AS/RS increases the efficiency of

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picking and packing operations and reduces lost or misplaced materials and picking errors.

WMS – A good warehouse management solution will consolidate orders so that travel time is minimized during picking, increasing efficiency and throughput.

It can integrate with ERP / inventory management system so that inventory stays in sync, increasing accuracy and reducing costs. Further, companies can integrate AS/ RS and WMS solutions for increased efficiency and productivity.

Internet of Things (IoT) – IoT facilitates hands-free operation, realtime information access, reduced labor costs, increased speed, accurate shipping, and better information visibility.

Tablet Computers – Tablets are being replaced by PCs and help provide real-time information, improve communication, offer enhanced imaging capability that helps workers capture signatures, identify damaged products, and handle inspection checks.

Cloud computing – This enables remote access through multiple devices, including mobile devices and eliminates the need for internal IT infrastructure.

Robotics – Robotics reduces manpower intervention in repetitive and routine tasks, improves efficiency and TAT. e-Commerce boom demands fast logistics turnaround time (TAT), which drives the adoption

of augmented reality, automation, and autonomous vehicles within controlled environments.

According to Rajesh Makkolath, “More Grade A warehouses will certainly have a positive effect on the intra-logistics space within supply chain ecosystem. It aids in organized storage as clients looks for higher throughputs and accuracy.

Modern warehouses are also automated to de-risk manual operations.” Mayur Tolia shares that the Indian warehousing space may see extensive and intelligent deployment of Artificial Intelligence & Robotics and Dynamic Shelf space in time to come. While the e-commerce industry is a frontrunner on this, the adaption of the technology in traditional manufacturing set-up especially capitalintensive segments like steel, cement, coal, etc., would be the next level adaptors.

With the complexity and diversity in customer orders and preferences for quality and timely order deliveries, industry has felt the need for transformative change in warehouse management and operations. The entire supply chain is witnessing a revolutionary change due to customized orders, which tend to be of small batch size but with high variety. These customizations require that the new age warehouse should be equipped with real time data management solutions and contextual information.

Adds Ravi Soni, “We are witnessing an extremely high volatility in frequencies of customer requirements and to support this variability in demand over time

R Shankar, CEO, TVS SCS

TVS SCS operates more than 13 mn sq.ft. warehousing space in India, which are spread across all the states. This is mix of 300+ consolidated and dedicated facilities. Our strategy is to relook at strategic placement of consolidated facilities and well equip our consolidated (multi-customer) facilities with infra, technology and trained manpower. In tune with this, we are looking at the placement of the warehouse to bring more customers under the shared facility and optimize the cost passing benefit to customer. We are converting our consol facilities into state-of-art facilities with modern infrastructure leveraging vertical space. We have implemented WMS, TMS, IT dashboards with a view to achieve improved visibility and efficiency across all the stages of operations.

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COVER STORY Balbirsingh Khalsa, National Director Industrial & Logistics, Knight Frank India

Warehouses in India, compared to their global counterparts, are still far behind in terms of technology and penetration. The presence of technology is very minimal, and its nature is to serve basic tasks such as Radio Frequency Identification (RFID), scanners, conveyor belts, basic forklifts, and wearable technology such as smart glasses. Furthermore, this limited technology is used primarily by selected industries such as e-commerce and 3PLs. The unorganized nature of warehousing, paired with the availability of cheap labor, has largely been responsible for the lack of technology being adopted by warehouses in India. However, the entry of a few institutional players, organized and good quality warehouses are easy to find. Furthermore, the entry of organized players has also facilitated the entry of robots on Indian warehouses, albeit on a small scale. Nevertheless, the high dependency on human labor has been a prime reason for the slow technological evolution in the warehousing space.

requires a complete synchronization of purchase orders to support production process and on time-order fulfilment mechanism. If there are inefficiencies in order picking process, the entire supply chain is disrupted.”

The next generation warehouse management solution needs to be equipped with an inventory management system with a real-time data management tool supported by IoT technology. Application of real-time data management and analytical tools with advanced forecasting mechanism using artificial intelligence is being adopted by the industry. Application of robotics for inventory management and movement and augmented reality for identification and location of SKUs has transformed the traditional methods of organized inventory management system. The greatest challenge in the entire value chain is the problem of trust, authenticity, and genuineness of the goods. Smart contract and distributive ledger technology or in simpler words, blockchain technology has immense application for ensuring transparency and traceability of goods & services on a real-time basis.

Amazon, for instance, has adopted “Chaotic Storage” system for order management solution. As against the traditional system of an organized warehouse with neatly managed shelves stocked with similar products managed in alphabetical order of the SKUs, in the ‘Chaotic System’, incoming products are placed randomly on any available shelving

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space within a warehouse, irrespective of its itemized location. The ‘Chaotic System’ requires a lot of application of robotics and augmented reality technology in combination with advanced analytical tools to manage both the demand forecast and supply management.

These are not very structured array of inventory management solutions with any specific pattern for storage. These warehouses are however equipped with automated storage and retrieval system (AR-RS). These warehouses are equipped to store and retrieve inventory on demand. The AR-VS consists of shuttles, cranes, carousels, vertical lift modules (VLM), micro-loads, mini-loads, unitloads, robotic arms and conveyors, image processing & augmented reality toolkit, etc.

Impact of Industry 4.0 for modern warehouse management requires management of inventory through four parameters, viz. inventory process management system, inventory classification, inventory system parameters and inventory system review. All these four parameters need to be digitalized to have a real time data management and process accessible to all, anytime and every time. Cloud storage and cloud computing technologies are thus not just a necessity for survival but are also inevitable change that will be a reality across all the value chain in near future.

The other example pertains to Agri value chain and cold storage for perishable agricultural commodities. National Bulk

Handling Corporation (NBHC), for instance, has set a benchmark with a customized state-of-the-art warehouse management solution, wide service network and assurance of system, process, and quality. An integrated farm to fork inventory management is a must for modern agri commodities warehouse solution. This must be an end-to-end solution as depicted in the figure below: Four key aspects new age warehouse should have are Efficiency, Flexibility, Security and Sustainability, believes R Shankar: • Efficiency includes effective space utilization, automation and technology

EFFECTIVE SPACE UTILIZATION ◆ Larger facilities with increased cubic space utilization ◆ Higher bays with vertical storage with adequate circulation paths for personnel and MHEs

AUTOMATION ◆ Tighter inventory control through automation ◆ Use of MHEs, conveyer belts, AS/RS system to improve the accessibility of goods

TECHNOLOGY ◆ Use of RFID and barcode technology, WMS & TMS ◆ Further usage of new age technologies to drive analytics and inventory

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COVER STORY optimization ◆ Flexibility – This involves multiple options to customers; wide range of storage alternatives, picking alternatives and MHEs, addressing seasonal or permanent demand changes, value addition facilities across multiple sectors with sector specific racking, flexibility in pricing models (fixed/ variable) ◆ Security – Use of security systems for safekeeping of products (CCTV, RFID monitoring for high value, motion sensors) ◆ Sustainability – This includes health & fire safety provisions, proper ventilation, solar panels on the warehouse roof, use of motion sensors to only illuminate areas in use, intelligent electrical systems to take benefit of off-peak power, green warehousing with rainwater harvesting.

In line with this, Rajesh Makkolath avers, “New age warehouses will have minimal human interphases. It will use digital technology extensively for meeting the changing demands of fulfilment, that is placed on them.” There are some distinct dimensions, which will guide the new age warehouses: ◆ Connectivity: Real-time Information ◆ Choice: Customization ◆ Performance: Proactive actions ◆ Safety: Compliance ◆ Motivation: Engagement ◆ Flexibility: Storage & handling ◆ Reliability: Automation

◆ Scalability: Align business growth & peaks ◆ Security: Prevent variations Giving industry specific example, Mayur Tolia informs, “In my previous organization, a cement manufacturing company, warehouse automation has been an Industry First in India. Custom built mobile conveyor belts were deployed to automate the cement unloading/ storage and re-loading operations.”

Nataraja Subramanian is of the view that while innovation is a great thing, we feel India / APAC region needs three things more than innovation in its current maturity level: Metrics obsession; SOPs; and Rigor (to stay close to SOP’s with an eye on metrics every single day and day after day). “Our attempt in our engagements is to focus on building above foundations for our customers while leveraging the great innovations coming from supplier partners globally.”

STEP BY STEP APPROACH TO GO FOR MODERNIZATION Going for automation needs a lot of collaboration and expert advices from industry leaders. Offering a brilliant parallel, Nataraja Subramanian states, “Applied in automation decision context, we often take inspiration from the adage – one man’s meat could be another man’s poison! It is important to take a pragmatic ‘horses for the courses’ approach here and stay away from the temptation to automate for automation’s sake.” We follow a 3-step process as below:

◆ Step 1: Evaluate / Establish automation feasibility at high level.

It is important to be technology and supplier agnostic in this step.

Tabling a 3D decision making matrix (covering manual, mechanized and automated alternatives with relevant holistic business case) to business is an important enabler to a right decision. ◆- Step 2: Evaluate right supply / vendor partners for tech choices you have made in step 1. Project feasible project delivery timelines to leadership at this stage. ◆ Step 3: Invest in a strong PMO team which interfaces with multiple stakeholders (Civil, Electrical, F&S, IT, Storage, Handling suppliers) to ensure timely delivery.

Agrees Ravi Soni, “The modern warehouse needs a harmonization of physical and digital infrastructure. Often the legacy model neglected even the rudimentary application of technology.

The leapfrogging thus would need a lot of collaboration from various industries.

We need to identify the right mix of technology for a particular industry, sector, or company. Once, the need has been identified by the company, they need to plan the investment needed.

We all are resource constrained, and a capital expenditure with unknown return on investment has an intrinsic risk. Adoption of the technology by

Rajesh Makkolath – Head Business Development India, Godrej Storage Solutions

Increase in number of Grade A warehouses will certainly have a positive effect on the intra-logistics space within supply chain ecosystem. It aids in organized storage as clients looks for higher throughputs and accuracy.

Modern warehouses are also automated to de-risk manual operations. New age warehouses will have minimal human interphases. It will use digital technology extensively for meeting the changing demands of fulfilment, that is placed on them. As businesses transform in an economy of choice (personalization/time/ quantity, etc.); supply chain & warehouse space will align accordingly. This will be done by all activities being completely technology-enabled and digital will be the backbone.

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COVER STORY industry leaders with a demonstration of the benefits derived can motivate the small players. We need to find means to make the warehouse management technology solutions from being a onetime investment to a recurring operating cost for the small players. SaaS model can thus be another possible solution.”

Mayur Tolia lists step by step approach to go for incremental transformation in warehousing: ◆ Gather, analyze and define current operational efficiencies and improvement potential ◆ Set-up clear objectives on what is expected out of automation ◆ Identify right technology solution and partner. ◆ Warehouse automations would need continual tweaking and adaptations and hence important to have the supplier work along with the organization in the implementation and subsequent on-going support phase. ◆ Change management - involving all impacted stakeholders in design and development of the solution.

Quite often the most critical and important inputs which make or fail an automation initiative come from the often most ignored stake holder as low as the floor maids, security guard, labourer. ◆ Realign the existing processes and make amendments as required to accommodate and gel with the TO BE process post automation. A solution aimed only at automating existing processes without addressing the inherent inefficiencies would see a failure much sooner than later. ◆ Keep in mind the human factor and quality of work-life and safety aspects along with the commercial aspects while deploying an automation solution.

ADVANCEMENTS THE WAREHOUSING SPACE IS SET TO WITNESS… Technology continues to drive warehousing forward, with a wide range that enables warehouse workers to become more efficient and productive while also reducing picking and shipping errors. In fact, according to a 2020 Study,

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74% of warehouses are now providing staff with moderate to advanced technology, with these three types being the most common: Internet of Things (IoT): 72%; Tablet computers: 72%; Barcode scanning: 70%.

Like in any other industry, customization is taking centerstage in the modern warehouses too, which itself is offering warehousing service providers not only an edge but also a competitive advantage to gain first mover advantage.

To ensure that, modern warehouses are incorporating major trends to achieve operational success: enhancing the customer experience, implementing smart integrations across systems, and utilizing advanced planning tools to support sustainability.

Warehouses, and the supply chain, together are moving to a more integrated approach that supports transparency and visibility for the warehouse and across all key stakeholders. According to R Shankar, these are the top 5 advancements the warehousing will witness in the next few years… ◆ On-demand warehousing is a trend to emerge from the need for greater warehouse flexibility to accommodate temporary demand for additional capacity. This trend enables companies who have built their warehouse to handle their peak season demands to monetize unused space during quieter times of the year. ◆ Automation as a service is a fastgrowing business model where customers can deploy automation on an as needed basis. It is gaining prominence because it provides facilities with the ability to rapidly scale up and down as demand dictates and allows buyers to expand or experiment with technologies. ◆ Advances in tracking and visibility – IoT fosters better communication and collaboration between supply chain partners, plus greater accountability across the board. IoT adoption will continue to grow over the next decade as technology costs are now within reach for many warehouses and logistics operations. ◆ Mobility is also playing a significant role in the modern warehouse. The

proliferation of mobile devices, such as smartphones and tablets, means warehouse workers and logistics partners has a variety of tools and resources readily available. ◆ Big data and machine learning are poised to transform warehouse operations over the next few years. Order accuracy, fulfillment time and inventory accuracy are all KPIs that can be optimized using AI. It can be also applied to safety & productivity. AI can be used to automate tasks and decision-making.

According to Rajesh Makkolath, the upcoming changes include: Organized storages; Automation; Movement to tier II & III cities; Institutionalization of warehousing segment; and e-commerce to further expand its position as the key occupier group. “As businesses transform in an economy of choice (personalization/time/quantity, etc.); supply chain & warehouse space will align accordingly. This will be done by all activities being completely technologyenabled and digital will be the backbone,” believes Rajesh Makkolath. “In my view, the next wave of warehouse upgradation would be with the conventional industry segments especially the commodity segment,” adds Mayur Tolia. Ravi Soni forecasts that blockchain technologies have not been adopted by any of the warehousing companies or sector.

There is a huge gap as far as traceability and transparency in supply chain is concerned. Blockchain is the most apt technology with demonstrable use cases in the sector. Early adopters are going to be the key beneficiaries.

Warehouse digitalization is a reality that the warehousing industry must come to terms with, in order to sustain and thrive amongst increasing competition and market pressures. The smart warehouse, which appears only as a disruptive force as of now, is likely to become the norm within the next ten years.

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PERSPECTIVE

DIGITAL TWIN IN SUPPLY CHAINS AND WORK CULTURE A digital twin is a virtual supply chain replica that consists of hundreds of assets, warehouses, logistics and inventory positions. Using advanced analytics and artificial intelligence, the digital twin simulates the supply chain’s performance, including all the complexity that drives value loss and risks. It identifies where volatility and uncertainty exist, as well as where optimization is possible. A digital twin also enables scenario planning to allow a company to make decisions on the basis of business needs, rather than resolving issues as and when they arise. Pandemic has brought great learnings for companies at large in strengthening their supply chain networks and Digital Twin is surely the way forward to thrive in such tumultuous times. The recently held Tattv’21 by SIOM, Nashik presented many such intriguing aspects where leading industry experts shared their learnings and experiences with the audience.

This perspective brings out some of the most remarkable thoughts shared during the panel discussion…

Arindam Mukhopadhyay, VP and Global Head of Consulting COE, Gartner

Virupakshappa Hovale, Country GM, Bosch Rexroth

Can you help us understand what Digital Twin is and how can it help in enhancing supply chain efficiency?

Arindam Mukhopadhyay, VP and Global Head of Consulting COE, Gartner: A digital supply chain twin is the digital representation of the physical supply chain, which has benefits such as end-to-end planning

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Piyush Chowhan, Group CIO, LuLu Group International

and execution and visual representation of the real-life supply chain, which helps us in understanding the bottlenecks, planning of time and do scenario planning. Digital Twin technology has gained traction in last few years, and Gartner in a pre-Covid study found that almost 29% of global CEOs are already in the journey of implementing IoT and Digital Twins in their organizations

Pavan Sarda, Associate Director, Supply Excellence, Supply Chain Management, MSD Pharmaceuticals Pvt Ltd.

and another 30% CEOs are planning to implement it, which shows the significant business value it can drive.

If we talk about today, the scenario has changed due to two things and I believe we are sitting at the tipping point right now. The first one is the advent of 5G technology, which is going to be an important trigger for digital supply chain to reach to the next level. Second

PERSPECTIVE one is, of course, the pandemic and it has changed the way the supply chain operates and the value proposition for digital supply chain - how technology can make the supply chains more transparent and visible. What we have seen in the past, supply chain design is primarily focused on building efficiency rather than designing for resiliency, but pandemic has shown that an efficient supply chain can often be fragile specially in the events of major disruptions like this pandemic. Therefore, the key lesson learnt during pandemic is, ‘Next generation supply chain is going to be more resilient by building redundancies and ability to monitor end-to-end supply chain digitally.’

How can digital twin improve efficiency?

Virupakshappa Hovale, Country GM, Bosch Rexroth: Digital twin has moved from product to process set up today. In manufacturing setup, big data handling makes a huge difference.

With the evolution of Industry 4.0, data availability and data transparency, we can process large amount of data clubbed with artificial intelligence and different algorithms. The digital twin for the product has evolved to a great extent now. The process must integrate backward and forward. For instance, in a manufacturing setup, there is a CNC machine in the shop floor. Assume the product gets rejected, can the machine decide on its own? No, it cannot decide because right now when you are at a stage of digital twin from a product perspective, the machine as a standalone, cannot take a decision whether to continue to produce or take a cognitive

decision should I stop manufacturing now because rest of the periphery does not know what is happening there. So, what will it lead to? It will result in the stoppage of the whole line. We need to avoid that to happen and to do that, we need to bring both product and process as a digital twin where there is a good collaboration. In this way, the digital twin concept makes a big difference in ensuring availability and enhancing the agility of supply chain.

What are the advantages & challenging in implementing digitization?

Virupakshappa Hovale: Though we went through disruption by health issue, the whole digital transformation is disruptive right now. Talking about India, we were already on a digital transformation journey in manufacturing. This pandemic made it accelerate further. So, it is a big advantage.

Challenge is our readiness to make this happen. Do we have enough resources, technical know-how, implementation plan at the shop floor level in adding the data to the machine, machine to the network, network to the ERP system, ERP system to the interconnected plant?

Do I have the scalability and the skill set to make it happen? That continues to be a challenge. Though we talk about multiplatform, multi skillset in India, we still have a long way to go in implementing this change because data plays a highly critical role in digital transformation.

(The comments expressed are of individual assessments and perspectives based on experience and may not reflect as policy guideline from Bosch Rexroth)

How do you view rapid digitalization that is happening in the industry and how are we leveraging that?

Pavan Sarda, Associate Director, Supply Excellence, Supply Chain Management, MSD Pharmaceuticals Pvt Ltd.: Every industry has its own set of supply chain challenges and pharma industry is no exception. The most important thing to highlight is the regulation. We work under strict regulations and on top of that, different countries have different regulations that we have to adhere to. We must keep track of changing regulations across the globe.

Accordingly, we must adapt to it. We do not have an option of stockouts. We are in the business of life saving products. So even if there are some products, which are low volume low margin for us, we just cannot afford to be in a stock-out position. We have another problem of shelf life and cost reduction. Even some of our blockbuster medicines can come under drug control anytime, so we must still always look for an option to improve our supply chain. In that sense, we are always looking forward on improving or reshaping our supply chain.

We believe that the supply chain evolution is directly proportional to the technology evolution. Look at it like 20 years or 30 years back or even in 1980s, there was no possibility of having an ERP system because there was no technology to support that.

As technology has evolved, we have actually broken that wall between the department, between the organization and that is how the supply chain has been evolving. This rapid digitization or more precisely Industry 4.0 framework is giving us an opportunity and we are very

Despite 2020 being a cash-sensitive year, as per the recent Gartner survey, 39% of manufacturing businesses indicated that they had increased their technology investment beyond pre-COVID budgeted levels. CSCOs must make sure that any investment they are proposing aligns with their CEOs’ critical priorities – growth, financial stability, cost management and risk management. CSCOs must make clear that today’s digital progress secures the options of tomorrow. For example, supply chain organizations with the right digital capabilities can act as the central nervous system of the business that senses risks and opportunities and enables real-time action. supplychaintribe.com

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PERSPECTIVE much looking forward to improving our supply chain and address the problems.

This pandemic has actually also taught us that our supply chain should not only be able to reduce the cost, but it should be also to reduce the risk now. This is where all the new technologies such as blockchains, IoT, big data and many more have the capabilities to answer all the questions, which we are seeking for.

The entire industry has actually made a significant investment into this digital twin concepts or digital digitization is actually very popular since 2017.

Having said that, just investing into the technology will not help, we have to start working on evolving our processes and the people around it and the pandemic has definitely given us an opportunity to do that immediately.

Help us understand the scope of digital twin in planning and assessing risk in the pharma supply chain…

Pavan Sarda: As far as blockchain is concerned, we are looking for a solution to address the problem of e-leaflet. In pharma industry, we have to put leaflets in every box and that actually also leads to SKU proliferation. This means that we cannot sell the product, which is going from country A to the country B because it has different norms and different products. With the e-leaflet, we are avoiding this SKU proliferation and secondly, we are ensuring that the customer is always getting the up-to-date information by converting this leaflet from paper to the e-leaflets or digital leaflets. Second is counterfeiting. With the track & trace or the serialization requirements from the government, the blockchain is playing a big role for us. We are also working on the pilot projects on implementing the blockchains to address that. We are also looking at testing on importations with a view to reduce the lead time and improving the customer service. In terms of IoT, we are working towards building the control towers along with the different partners to get the real time data with the help of their IoT applications, which can give us the real time data immediately. We are building the visualization as well wherein we can get the visibility into the end-to-end supply chain. Now coming to big data, computational capacity allows us to run

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thousands and thousands of simulations in a truly short period. So, we could do the risk mitigations immediately by running the simulations and knowing where which part of the supply chain is having risk and immediately, we can take a decision on how to avoid those risks.

There are various ways we are currently working on and reducing the risk on our supply chain.

How is the advancement in digital technology enhancing risk mitigation and improving the performance of supply chain?

Pavan Sarda: In the year 2016-17, we encountered a major disruption in our supply chain. Even with the technology tools like ERP, it took us almost 2 weeks across the globe to understand the impact on our global supply chain as far as stock-outs are concerned. That triggered the need for real-time data in the value chain, which can help us determine the disruptions in our supply chain. Having implemented single system ERP across our manufacturing sites globally helped us in taking the digital journey forward a decade later.

We started with value chain financial modeling. With big data, we are running simulations. We have a global operating model, which helps us in building SOPs for the entire group. Additionally, we are heavily investing on people. We have made training mandatory for people involved in managing supply chains. By investing in technology, we can model our supply chains better, but there’s still long way to go. We have the concept of DATA to DASHBOARD to DECISIONS, which is helping us to mitigate the risk.

What are the best practices for minimizing digital twin project risk? How do we know that any digital twin analysis is complete and comprehensive?

Piyush Chowhan, Group CIO, LuLu Group International: Being a practitioner, I can see that these are exceedingly difficult concepts to implement. The reason is it has to be done in multiple layers. The first important aspect is how can you democratize and capture use of data. I think developed countries are also struggling as to how to consolidate data across various parts

such as a unit of product or process or unit. That kind of digitalization and collection of data is happening but when you try to marry these across, we are still in the journey to derive at the exact solution. Digital twin is not a one size fits all. When the pandemic struck us in the early 2020, we actually had no idea about how the countries would react to it. Some were under the lockdown, some were open. Export imports took a big hit.

We had to figure out alternate sourcing locations. If we had digital twin at that point in time, I feel we would be able to easily comprehend the situation and reduce shocks in our supply chains. But for that to happen, I would have to build data platforms, which are so efficient that we are able to replicate that in a simulation or lab environment. To me that realistically for an end-to-end digital supply chain to happen, it’s still about 7-8 years away. I feel that the amount of efforts that is needed to do it is so humongous in my view that it may take much longer than that.

What tools do you use when you go for digital twin strategy?

Piyush Chowhan: This is something, which is complementary to digital transformation journey. We should not look at them as a separate initiative, otherwise it will die its own death. To go for digital transformation, I believe in S2A formula – you have to work with SENSORS, you have to work with SOFTWARE and you have to work with ALGORITHMS. These are the three building blocks or broad rules that everybody should be working on.

For that to happen, you need to build a connected IoT platform. The real challenge lies in doing things at scale in a very uncontrolled environment and this is where the digitalization will help.

Secondly, one needs to implement the new age cloud-based solutions rather than the age-old ERP solutions. The algorithms stage is where the differentiation lies.

Have a clear understanding of what you want to achieve. Do not do a digital twin project because your competitors are doing it. This is not going to solve the problem.

INFOGRAPHIC

Warehousing Analytics Opportunities for

CONNECTED WAREHOUSES

Starting with this issue, we are introducing an Infographics section for easy to comprehend supply chain concepts. The infographics section will be presented by Kumar Singh, leading global supply chain consultant.

Kumar Singh is a Research Director with SAPinsider, a technology research company focused on SAP ecosystem. Prior to that, he founded Smart Supply Chain LLC and was an analytics consultant with Boston Consulting Group (BCG). Kumar has been working in Supply Chain analytics domain for 12+ years now and has helped companies across industries leverage analytics to transform their supply chains.

Many executives may not be aware that equipment and assets in their warehouses may have come pre-loaded with sensors. They are probably already capturing and relaying data and chances are that no one has ever looked at that data.

Even if your warehouse may not be a smart warehouse, your warehouse and yard operations may still be capturing a ton of data through sensors and digital track and trace devices.

Warehouse Analytics opportunities for connected warehouses Even if your warehouse may not be a smart warehouse, your warehouse and yard operations may still be capturing a ton of data through sensors and digital track and trace devices.

2021-2030 The Decade of Supply Chain Tech

Yard Data captured by sensors and digital track and trace devices in warehouses are treasure troves if you leverage analytics prudently

Sensors and Digital Track and Trace

/kumarssingh

Warehouse If you already have the infrastructure in place to collect and centralize this data, you can build a quick and dirty warehouse analytics platform in weeks, with open-source tools

Analy�cs opportuni�es Yard abound….few examples Warehouse Most of that data, inIf my opinion, is not leveraged to its potential.

I think thathas track and trace data,toinloads. combination your yard captures load numbers or full trailer numbers, your ERP product assigned You can with build sensor a If you already have the infrastructure in place to collect Data captured by sensors and digital real timebeyond tracker track of which Inbound loadgood is already in the yardhave generated data can be use and trace.

The part is, if you the skilled resources, you can build a warehouse and centralize this data, you can build a quick and dirty track and trace devices in warehouses A load dispatch time forinvestment an Inbound can calculate the Trace expected arrival time, based on an algorithm that has warehouse analytics platform in weeks, with open-source Sensors and Digital Track and are treasure troves if to you leverage analytics platform do all this with no in any tech solution, using open-source tools. “learned” transit time in the real world from historical data ( based on lane, carrier, product, tools dispatch time window, day of the week etc. etc.). You can plan your warehouse dock operations opportunities abound….few examples better since Inbound are Analytics the ones on which you don’t have much control.

analytics prudently

Within warehouse fouryard walls, if you are capturing theorright level of data, your you can symbiotic simulation modelYou thatcan willbuild be a a If your captures load numbers trailer numbers, ERPbuild has aproduct assigned to loads. near real time simulation of yourof warehouse operations.

Can be done entirely real time tracker which Inbound load is already in the yard with open-source tools or with off the shelf simulation tools and open-source programming tools.

A load dispatch time for an Inbound can calculate the expected arrival time, based on an algorithm that has You can also use the datatransit to runtime otherinforms of prescriptive analytics approaches. schedule optimization, flow “learned” the real world from historical data ( basedWarehouse on lane, carrier, product, optimization,dispatch Inventorytime planning etc.day Andof once these in piecemeal approaches, youdock can build one integrated window, the you weekmaster etc. etc.).

You can plan your warehouse operations betterthat since Inbound aretothe ones on which you don’t have much platform optimizes end end warehouse and yard operations.

Thiscontrol. end-to-end algorithm though will need to connect into other systems likefour Manufacturing systems.

Within warehouse walls, if youand aretransportation capturing theplanning right level of data, you can build a symbiotic simulation model that will be a

near real time simulation of your warehouse operations. Can be done entirely with open-source tools or with off the shelf simulation tools and open-source programming tools.

You can also use the data to run other forms of prescriptive analytics approaches. Warehouse schedule optimization, flow optimization, Inventory planning etc. And once you master these in piecemeal approaches, you can build one integrated platform that optimizes end to end warehouse and yard operations. This end-to-end algorithm though will need to connect into other systems like Manufacturing and transportation planning systems.

supplychaintribe.com

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BOOK NOOK

Solving the Demand

SUPPLY MAZE “My book, ‘The Search for Value in Supply Chains’ is a journey across different parts of the supply chain, of competing objective functions and KPIs, but at the end, an integration of several things that allows value to be created under different constraints. The current woes of supply chains and the new dimensions of disruptive change actually hold in fine balance as the world grapples with the demand side of the puzzle,” shares Procyon Mukherjee, Author, Supply Chain Leader, CXO-Advisor, Founder Prep-Gen, through this Q&A around his book…

Your book, “The Search for Value in Supply Chains” was released recently.

How is this book different from the many books on Supply Chain Management?

I have always thought about this question that readers of my book will ruminate and it is a very valid question that there

36 CELERITY March - April 2021

is no dearth of books on Supply Chain Management. In fact, the subject itself is being frequently refered to when management puzzles are being taught or are solved in the business domain, so the world is replete with articles, journal references and books that deal with several aspects of the supply chains.

My book is different because it is partially about my journey in the field of supply chain management and the puzzles I have taken in the book are drawn from my own personal examples and that of my teams. The experiences are real and the solutions are therefore coming from real life cases. The book

BOOK NOOK itself therefore took thirteen years to write as these experiences had to mature into meaningful conclusions and I had to wait for an all round exposure to and end to end supply chain journey. So it is truly an experiential treatment of the subject in my book.

My experiences in India and in Europe, both in the upstream and downstream part of the supply chain in several of the industries where I have worked, have come out in the chapters of the book. The chapters have been sequenced to start with the customer side of the puzzle and it ends with the supplier side.

However, it does not mean I have not referred to the best success stories that the world has seen and the book is also replete with these examples either on the demand side or on the supply side.

I have always believed that the subject needs a puzzle solving approach leading to the deeply embedded optimisers and mathematical algorithms fructifying into a modelling that will satisfy certain objective functions; the math part can be left to solvers, the real issue is find the right puzzles to solve. This is where my book is different from the normal text books on supply chains. So while there is no math in the book, it is about asking the questions that will lead us to the math.

What are some of the key lessons that practitioners and supply chain leaders can draw from this book?

Supply chains are filled with complexity and opacity, when some parts of the problems are known, some of the parts could be unknown and then we have known ones and unknown ones as well. This leads us to optimizing using certain rules. But even in a rule based system, we struggle to find the optima as KPIs clash with each other as different constituencies try to maximize their part of the objective function.

This is an interest puzzle to have but technologies are fast changing the organizational dimensions and more and more the boundaries that used to act as a barrier to flow of results to create value is fast receding and the integration of supply chain from end to end is becoming a reality. My book explores these parts of the puzzle how organizational interfaces and principles of leadership play a role in creating better solutions than algorithms can achieve.

Logistics and Procurement are two very important chapters of the book, in some ways, these two functions remain neglected to attract management attention in most organizations, but this is actually changing very fast. I have treated with respect these functions that will perhaps outlive many other functions that are being replaced with technology. The crucial construct here is that there is more to be discovered in these two, like the Tip of the Iceberg examples I have used in the book, to demonstrate that we actually see what we want to see and therefore 90% of

I have always believed that the subject needs a puzzle solving approach leading to the deeply embedded optimisers and mathematical algorithms fructifying into a modelling that will satisfy certain objective functions; the math part can be left to solvers, the real issue is find the right puzzles to solve. This is where my book is different from the normal text books on supply chains. So while there is no math in the book, it is about asking the questions that will lead us to the math. supplychaintribe.com

Procyon Mukherjee has been an industry leader in Supply Chain Management and Logistics. His career spans 34 years starting from Philips, Alcan Inc (Indian Aluminum Company), Hindalco, Novelis and LafargeHolcim. He has held senior leadership positions in manufacturing, logistics, supply chain and Procurement. He is currently Partner at Thought Arbitrage Transformation and Supply Chain Leader & Founder Prep-Gen: Preparing the Next Generation of Logistics Leaders. He is a Mechanical Engineer from Jadavpur University and did One Year Special Management Program from Indian Institute of Management, Calcutta and from Ivey Academy at Western University.

logistics and procurement remains in the domain of discovery, such is the scope of these functions.

Sustainability is also a subject I have dealt with in great depth. This is again a subject that we have a partial view of, which does not stretch that easily to the functions like logistics and procurement.

The demand side of the supply chain must align with the supply side and in most organizations, this is a job that is being steered by no other than the CEO himself. This shows the importance of the subject that actually all CEOs are in effect the Chief Supply Chain Officers of the company, trying to match demand with supply and simultaneously developing approaches for creating the next level of customer experience that will be selfsustainable. If I have been able to evince more interest in asking questions, I think I have been partially successful.

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Celerity India Marketing Services Email: tech@celerityin.com | Mobile: 79771 05913 Website: www.supplychaintribe.com