Supply Chain Tribe magazine by Celerity September - October 2019

SUPPLYCHAINTRIBE.COM September - October 2019 Volume 3 Issue 5 For private circulation only

MAKING MORE POSSIBLE Successful people do what others are not willing to do

Celebrating UNDER-30 SUPERSTARS And UNDER-40 SUPER ACHIEVERS

CONTENTS

September - October 2019 Volume 3 Issue 5

20

COVER STORY Making More Possible!

Our maiden UNDER-30 and UNDER-40 Supply Chain Awards, delivered many firsts for the industry …these are the first ever Awards, which recognize and honor individual talent. Each nominee had to go through a rigorous nomination process right from filling up an exhaustive form to clarifications and finally strict scoring parameters from six very senior jury members. The award ceremony itself, hosted at Taj Santacruz, brought together stalwarts, leaders and the millennials, making it a great concoction of transformational ideas and innovative approaches.

6 SPECIAL STORY Connecting the Dots This special story reflects upon the views of both stakeholders - users as well as 3PLs — to decode the way ahead for the 3PL industry.

16 FOCUS The Digital Roadmap In the digital era, adopting non-traditional business strategies is the key to remain relevant, highlights Piyush Chowhan, VP & CIO, Arvind Lifestyle Brands, and identifies steps required to build an agile supply chain that will create differentiation for organizations to compete in the digital era.

INTERVIEW

12 ‘Flite’ to Success Vijay Wadhwani, Asst. Vice President – Supply Chain Management, Relaxo Footwears Ltd, shares their ‘SCM 2.0’ strategy, which includes co-innovation and supply chain design.

33 Efficiently Fresh According to Pawanexh Kohli, Chief Executive and Advisor, National Centre for Cold-chain Development (NCCD), cold chain must be looked upon afresh, as a mode that extends the selling range of the produce, and thus expands the farmers’ market footprint.

38 RECAP News & views trending globally.

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

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

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

4 CELERITY September - October 2019

PUBLISHER’S NOTE

Ahead of the Curve Dear Readers, The last few weeks have all been about a slowing economy, decreasing GDP growth and a negativity in the economy and measures being taken by the government to revive growth. Slowdowns bring challenges and added complexities for businesses. However, there are opportunities too. The opportunity to take a longer-term perspective and focus on being ahead of the curve, not just cost-cutting.

Another very important part of this mix are employees. If cost-cutting does not allow for better increments and bonuses, at least use this time to give due recognition to young talented employees. To counter the slowdown gloom and bring in enthusiasm, Celerity launched the UNDER-30 and UNDER-40 Supply Chain Awards. We had some issues when HR departments of certain organizations did not find merit in getting individual talent vetted and recognized. If appraisals are individualistic and not team based, then why not give industry recognition to individuals? I would urge the HR departments to re-look at their policies.

The final winners - the superstars and super achievers - were chosen after four months of a rigorous nomination process. Read all about it in the Cover Story.

For those who follow football, Jerry Rice (widely considered to be the greatest wide receiver in the history of the National Football League (NFL), once said, “Today I will do what others won’t, so tomorrow I can accomplish what others can’t”.

Urgency is a big factor in success. Companies should continuously strive towards innovation and not let their employees settle into a comfort zone. Likewise, it’s the young talent, the millennials who will bring in the restlessness to their jobs, they will be constantly on the lookout for smarter work processes, adopting technology to tide through routine, uninteresting work and bring in vitality to their organisations. The best ones should be allowed industry felicitation.

I rest my case.

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

supplychaintribe.com

5

SPECIAL STORY

SPECIAL STORY

Connecting THE DOTS

The 3PL sector in India has been experiencing a transformative phase with the introduction of several reforms and initiatives. With the implementation of GST to adopting new age technology solutions and innovating value-added services expanse, 3PLs have come of age. In order to stay ahead of the pack, they need to bring pathbreaking services. This discussion reflects upon views of the both the stakeholders – users as well as 3PLs to decode the way ahead for the industry… in 3PL and deployment of capital in better quality infrastructure as well as technology.

What are the visible changes shaping up in the logistics market?

Dr Arunachalam R, CEO, ProConnect Supply Chain Solutions: In logistics, we are living in the era where social, political, economic & technological changes are influencing the industry.

Regional consolidation of warehouses post GST, introduction of E-way bill reducing the hassles for transportation, technology implementation not only by 3PL players but by customers too, upcoming new-age starts ups, increasing M&As, Blockchain in logistics, are some of the transformations that the industry has witnessed in the recent past. Digitalization, software driven processes, automated machine-driven processes are also a trend now and will help in improving efficiency.

Dr Arunachalam R, CEO, ProConnect Supply Chain Solutions

Anand Maithani, Head- SCM & IT (APMEA) Asia Pacific, Middle East, Africa, Apollo Tyres: Perhaps the most significant change in the last few years have been the recognition and adoption by 3PLs of technology as a key pillar to improving customer service, efficiency and in some cases a competitive differentiator. GST has had its expected impact of infrastructure development.

The inflow of capital from more formal sources like institutions or PE funds has given rise to more organized players

6 CELERITY September - October 2019

Anand Maithani, Head- SCM & IT (APMEA) Asia Pacific, Middle East, Africa, Apollo Tyres

Laxmana Murthy, VP – Group India Strategic Projects, Novateur Electrical & Digital Systems Pvt Ltd, Legrand Group: Traditionally most of the organizations in India were managing their own warehouses. During the past five years, there is a gradual change in the business dynamics with organizations moving towards 3PL solutions. More and more professional organizations are evolving in this spectrum coupled with good focus and investment from reputed global 3PL players. We have seen significant investments and capacity additions by most of the global players in Indian market. Big facilities have come up in most of the Tier I cities. Mumbai, Chennai, Bengaluru and Delhi are the top to attract these new facilities. There is also a conscious shift in the mindset of the user industry in recognizing 3PL industry as an area of specialization and moving towards 3PL solutions. One factor which also has played a big role in the evolution of 3PL industry is the onset of GST regime.

This has opened new opportunities and possibilities for the warehousing industry. In our organization, we have brought down the number of warehouses from 25 to 6. GST regime led to the creation of centralized

warehouses serving wide customer bases. Operation of such facilities need a professional expertise, which can be offered by 3PL service providers. There is also now good scope and possibility to do more and more value additions by 3PL providers.

Shankar R, CEO – TVSLSL India: The logistics market in India is undergoing a sea change… the change is enabled by regulatory changes, technological adoption, need for an agile supply chain and by ‘organizing the unorganized’. The need for supply chain & logistics being a key lever for operational improvement and cost & market competitiveness, is understood by many companies including emerging and smaller sized organizations.

Adoption of technology to increase efficiency and reduce delivery cycle times has brought value in the last mile and significantly improved visibility across the supply chain. The granting of infrastructure status to the Logistics Industry is leading to high-quality warehouses of a good size, scale, and equipment being constructed. Multimodel movement of goods have started gaining traction. Digitization of the entire supply chain including the introduction of e- way bill is slowly making paperless transactions feasible.

Initiatives like ‘Make in India’ is giving thrust on manufacturing and exports, thereby having a higher demand for value-added supply chain & logistics services. Data Analytics is helping in the optimization of inventory, reduction of overall costs, ensuring that the demand is met on time and is also leading to better revenue generation as ever-changing customer needs are well understood and demand fulfilled. Lowcost automation in material handling in the warehouse is ensuring increased throughput and higher levels of accuracy in Storage and order execution.

The changes are ongoing and significant shifts are becoming a way of life for the industry.

TAB Barathi, Vice President (SCM), Wheels India Ltd: During the early days, logistics used to be just seen as the external service and was considered the service providers’ responsibility to move goods from one place to another. Over the last decade, it has transformed itself.

The understanding or the awareness

supplychaintribe.com

Laxmana Murthy, VP – Group India Strategic Projects, Novateur Electrical & Digital Systems Pvt Ltd, Legrand Group

of the core industry has changed over the last decade in the sense that they have understood that it’s better to focus on core competencies and delegate responsibilities to domain experts to move the goods and make it available to the customers in the most efficient and effective manner.

In the initial years, 3PLs were looked down as only services providers who were providing transport services.

Eventually organizations felt that these 3PLs can be upgraded to do better work. They can be taken to the next level imparting right intelligence and input and value to the total chain of activities, which made them a very important link of the value chain.

In fact, these companies have more information and data about customers’ preferences, market intelligence, etc., which are passed on to the companies for product enhancement. So, the value of 3PL providers have slowly expanded to be the external arm of the marketing system of the company.

How do these changes spell for your growth?

Shankar R, CEO – TVSLSL India

Companies have more information and data about customers’ preferences, market intelligence, etc., which are passed on to the companies for product enhancement.

Dr Arunachalam R: At ProConnect, we strive to ensure we keep up with the developments in the industry. As I mentioned earlier, software driven process and digitalization help in maintaining efficiency, better visibility and data transparency. E-Way bill has helped in reduction of idle time in the Trucking Industry. Tech enabled solutions, ERP implementation in warehousing & transportation provide one stop solution for the clients.

Acquisitions give us the necessary impetus in geo-expansion, tech enablement, penetration into new verticals and drive synergy.

Shankar R: The overall increase in demand has gone up as organizations have realized that it is better to ‘outsource’ their logistics and supply chain requirements to 3PL organizations who are specialists in this area. The adoption of technology & digitization and cloud-based technology has helped to start and scale up these solutions faster. Organizations are realizing the value of solutions approach rather than a transactional approach. This is increasing the demand for 3PL players as customer value the solutions 3PL players could provide to their

7

SPECIAL STORY

SPECIAL STORY

organizations.

Demand for value-added services are helping us to grow – Packaging bundled with transportation, reverse logistics, repairs management, vendor managed inventory and assembly services for in-bound Supply Chain are some of the services in high demand.

Use of technology – RFIDs, IoT, etc., are helping in optimization of warehouse space, leading to higher efficiencies.

This is also leading to growth for players like us as we have invested in these already.

What are the challenges still being faced in addressing customer needs and requirements and vice versa?

Dr Arunachalam R: With lot of advances in technology, customer expectations have increased. It is not just about providing customers with better storage warehouse or timely deliveries, it has gone way beyond that. The key challenge is to transform & adapt quickly with technology. Moreover, with these services, 3PL players needs to be cost effective as customer wants all these services but at a very competitive pricing.

Anand Maithani: One of the biggest constraints of 3PLs is the lack of good quality talent that they attract or retain.

They need to build a talent pool of cutting-edge professionals who can partner with industry to understand the nuances of each customer's business and delivery high quality solutions tailored to customer requirements.

3PLs need to build capabilities to deliver execution excellence in times of uncertainty. They need to handle the challenge of managing seamless customer experience despite volatility in demand. Safety culture in 3PLs is still primarily driven by customer requirements. They need to put a lot of sincere efforts in building a safety culture within their organizations which will have a positive rub off on their own businesses as well as customer satisfaction in the long run.

Laxmana Murthy: I believe 3PLs need to work on these core areas to gain growth and grow their businesses: COST COMPETITIVENESS – Building a solution which is affordable to the customers is going to be a big

TAB Barathi, Vice President (SCM), Wheels India Ltd

The understanding or the awareness of the core industry has changed over the last decade in the sense that they have understood that it’s better to focus on core competencies and delegate responsibilities to domain experts to move the goods and make it available to the customers in the most efficient and effective manner.

challenge. Most of the industries that operate on tough margins and SGA expenses are always under pressure. The challenge is in building a solution, which is cost competitive. Obviously, this gives an opportunity to the providers who can master this challenge.

SCALE OF OPERATION – To be

8 CELERITY September - October 2019

competitive, one must build facilities with bigger capacities, which can serve multiple clients. With the combination of bigger size and multi-clients, cost competitiveness can be targeted. From user industry perspective, the choice will be more and more towards multi-client facility. Multi-client facilities offer the advantage of compensating impacts in terms of volume fluctuations on the operations.

LOW COST PROCESS AUTOMATION – India is in a transition phase of moving from Manual mode to Auto Mode operations. To meet the service level expectations of user industry by meeting the expectations of cost competitiveness & Scale of operations, one has to explore this low-cost process automation. This is one area, which has great potential and needs exploitation.

Not all user industry can afford high end automation and the need of the hour is finding low cost automation, which can be done with good innovation. Future belongs to the players who understand and implement the same.

Shankar R: Change management, being a critical element of supply chain transformation, will define your growth in the market as it is the ability of employees across all levels of the organization to embrace change especially at some of the traditional organizations. Infrastructure bottlenecks do exist, leading to a higher cost of logistics as a percentage of GDP especially compared to advanced economies. Pilferage, shrinkage and wastage are some of the reasons for the overall costs being high. High level of volatility and uncertainty is leading to some buffers being created across the value chain, leading to cost penalties. Lack of skilled manpower across all levels is a very crucial challenge throughout an industry and organizational level where many actions are already being taken.

What are the emerging technologies you feel will make a positive impact in the years to come?

Dr Arunachalam R: Though we all talk about Uberization but still there is a long way to go in terms of channelizing it in long haul movements. But indeed, this will emerge as a positive impact with consolidation, route optimization,

supplychaintribe.com

9

SPECIAL STORY vendor aggregation, reverse haul and drive cost efficiency. Blockchain will help highly encrypted business transactions and distribution of data with multiple stakeholders. Tech enabled processes pave the way for an organized 3PL structure.

Shankar R: Real-time monitoring of goods with IoT and automation of repetitive processes, machines assisting labor-intensive work, implementation of cloud-based predictive analytics with real-time information will make a positive impact in the coming years.

Forecasting the demand and having the right inventory on hand by leveraging the data (big data) can help reduce the wastage and avoid unnecessary stock in the inventory. On-demand trucking as opposed to the traditional truck sourcing through agents/middlemen directly connects the fleet owners with the changing requirements. It helps in reducing the lead time, cost incurred on agents and prompts faster delivery of products.

Blockchain with its acceptance in the financial world is expected to expand in the supply chain industry by increasing the efficiencies and avoiding redundant activities. The transactions can be made simple as the data can’t be tampered with leading to optimization and visibility of process in the supply chain. Low-cost automation is in high demand, whereas for high precision and high throughput warehouses high-cost robotics are implemented.

Unlike the developed markets, India has an abundant workforce, hence the warehouse robotics will be focused on improving the overall efficiency of the warehouse rather than the replacement of labor.

How have the customers evolved since GST? Dr Arunachalam R: Customers now know that GST has enabled logistics with transformation with respect to lesser documentation and consolidation with unified tax system. Rapid deliveries with reduction in transit time have enabled customers to provide quicker services especially in ecommerce and meet the expectations of their end customers.

Customers are adapting towards hub & spoke model which is cost efficient for them.

Shankar R: The importance of supply chain and logistics has been very well understood by all customers post-GST. From optimizing their network and to be tax-efficient, organizations are moving to become network efficient.

Customers are opting for network redesign, reducing the number of warehouses through cost reduction, adopting the hub & spoke model and optimizing their entire supply chain. With the reduction in transit times, customers are realigning their inventories, reducing safety stocks and becoming more agile by producing products and variants at centralized locations rather than at multiple locations taking advantage of scale.

What are the opportunistic horizons waiting to be harnessed by the 3PLs? TAB Barathi: A 3PL still needs to integrate as a part of the company and given the due respect and preference.

Today customers are directly talking to 3PL companies about their demands and asking them to aggregate the products from different suppliers, which is a great step in itself. For this to happen at a larger scale, 3PL companies should transform themselves into a completely integrated entity.

Efficiency and execution levels of 3PLs need to be enhanced. We need to move from integrated logistics to intelligent logistics. It’s the human intelligence and skill levels behind the sophisticated machines that have come into play that help the entire system to work in the desired way and ultimately up the reputation of the industry. There needs to be a structured way of enhancing the skill levels of the people behind those machines to take timely decision. 3PLs are working with different industry verticals, which de-risk their ability to grow. Of course, it comes with responsibility. They need to develop required skills for catering to different industries. There would also be chances of cross-industry learning. There has to be a large spectrum of understanding in trying to capture the needs of different industry verticals and finetuning activities and execute operations accordingly.

Anand Maithani: As shippers increase replenishment frequency, shipment lot sizes will vary from truck loads to

10 CELERITY September - October 2019

case level going down to piece level.

3PLs with full stack capabilities to meet these requirements with increased efficiency will emerge winners. There is an opportunity for ‘vertical focused’ 3PLs who can move from service provider to partner. That, however, will be possible only when 3PLs have a stake in the ground by offering year on year improvements/cost reductions coupled with a long-term engagement. This would be a win-win scenario.

Laxmana Murthy: 3PLs need to provide a comprehensive solution. They need to move from being a simple warehouse operator to a solution provider. While most of the players claim these things, in reality, not all of them are able to bring the value to the customers.

Another key factor which even the strong players have to work on is building the domain expertise. 3PL providers should not only be good at meeting the basic service levels, but also be strong in terms of logistics analysis, inventory management, industrial engineering, etc. With this expertise, the 3PL providers can act as an extended arm of customer’s supply chain. This is clearly lacking today and should be worked upon.

Setting up global benchmarks in terms of service levels is another aspect to be worked upon. Consistent and sustainable performance is another key topic to be worked upon. With the changing business landscape and evolving customer expectations, there is an evolution happening in the people skill sets. Skill sets of yesteryears are no more enough to meet these changing needs. 3PL industry needs people who are very strong on analytical and digital skill sets in addition to functional expertise. Without this quality manpower, it will be difficult to meet the user industry needs.

ADVERTORIAL

Of Checks & Balances “We feel enhancing the E-way bill system is important with addition of transit hub, modification post expiry as well as introducing flexible labour laws according to market needs,” asserts Jasjit Sethi, CEO, TCI Supply Chain, Solutions.

What are the visible changes shaping up in logistics?

The country’s logistics market has seen some deep-seated changes in the past few years. Smaller players are facing issues in terms of scale, reach, GST compliances and IT. They are trying to get attached with larger LSPs to fit into as per their comfort and capacity. There has been reduction in transit times to the tune of 5-10% in some sectors owing to introduction of E-way bills and electronic toll gates. In warehousing sector, compliance to regulations and building norms has changed the market for the better.

The logistics fraternity is now banking big on advanced technologies like IoT, big data analytics, AI, reforming traditional ways of operating while driving their overall profitability. Many start-ups have also brought trucking and warehouse solutions to online e-commerce like portals. Although it is too early to judge how well these models will fare in the long run as many are looking for quick wins while the sector needs more investments. The government bodies too are in sync in realizing the paybacks of technology and are introducing innovative reforms like mandatory installation of AIS 140 certified GPS for all public and commercial vehicles, FasTag tolls and most importantly, improving road construction.

supplychaintribe.com

What are the challenges in addressing customer needs?

How have the customers evolved since GST?

Our partnership approach and detailed planning have been helping us to mitigate most of the challenges coming in the way of addressing our clients’ requirements. We have been delivering the same quality to our MNC clients that they would get in more developed countries, however, to deal with certain regulatory challenges, we need more support from the government, including in ease of doing business. Our laws need to provide for abnormality and practical situations, like the floods we are experiencing just now. In our view, enhancing the E-way bill system is important with addition of transit hub, modification post expiry as well as introducing flexible labour laws according to market needs. On the infrastructure front, policy support in the development of logistics parks at par with industrial parks and proper rest points at the exits of the highway network are important for safety.

With GST completing two years, initial turmoil around its implementation have subsided and all stakeholders are now warming up to the benefits.

Initial phase was IT and Accounting then came the Consolidation. We have already delivered 4 large scale projects around consolidation, yielding savings of tens of crores of rupees as well as marked improvement in leaner supply chain. In between, we have seen E-way bill come and stabilize. We have a direct integration for E-way bill and it is automated with our telematics.

Expectation of long haul trucking with larger trucks is also around the corner.

At the same time, GST alone can’t trigger such shifts as there are many other factors like changing demand pattern, customers’ expectations for faster delivery, market conditions, clients’ focus especially in FMCG/Retail sector to remain closer to consumption centres, etc. Key here is the vision of supply chain by the organization, which sets the leaders apart.

What are the emerging technology trends?

Automation in warehouses is fast moving to sorting systems and AGVs. The Warehouse Management System (WMS) is becoming smarter with deeper predictive analytics and connected cyber systems of suppliers, intermediaries and consumers. Vehicles are becoming safer and productive, we see Collusion Avoidance System – a pre-cursor to more automated driving on the journey to driverless for India. Sometimes we feel in India, lane driving may come only after driverless! Algorithms to Machine Learning to Artificial Intelligence (AI) looks closer. Early wins like IoT has helped a great deal in control and monitoring of our fleet with few utility sensors helping out in achieving improved safety standards and better fuel economy.

How do these changes spell for your growth?

We have always kept the customer at the CORE of our business (in the acronym CORE – the first C is for Customer) and have always built on present and future needs, satisfaction to wow factors and going that extra mile for them every time. We see the fruits of our ethos, infrastructure and technology trio in all business segments as visible from our financial results – a positive impact in trucking to warehousing to even industry verticals such as Auto which have nose-dived, but our numbers are even. We are hopeful that we shall be successfully developing, adapting and implementing the right strategies to continue serving our customers on global standards at Indian costs.

11

INTERVIEW

INTERVIEW

‘Flite’ To Success “We are working on ‘SCM 2.0’ strategy, which includes co-innovation and supply chain design. Digitalization is only one part of this growth phase, which has just begun, and we are only starting to see the impact that digital transformation will have on business. We will focus on technical capabilities and infrastructure in our supply chain as we move ahead,” shares Vijay Wadhwani, Asst. Vice President – Supply Chain Management, Relaxo Footwears Limited, during an exclusive interview…

From just a single product in 1976, Relaxo has come a long way today. How has supply chain contributed towards this growth?

There are many parameters a company may use to measure its growth. We at ‘Relaxo Footwears’, besides profitability and financial numbers, focus on physical expansion by having large number of variety footwear in different sizes and colors as well as in increasing market share. One of the most critical factors in driving profitable growth and expansion is customer service and most importantly, customer satisfaction.

Customer satisfaction is highly dependent on supply chain and to be successful, your business must manage its supply chain with that in mind.

Customer must be the primary focus when considering supply chain strategy, network design, and performance management.

The last 42 years has seen us growing from North India focussed sales to pan India with equal sales contribution and then going global to become Asia’s largest footwear manufacturing company. This growth has only been possible because of an exceptional supply chain, which has constantly been steering the company towards the fastest growth trajectory.

To enable such a fantastic growth, we introduced the concept of mother warehouse, FOR basis transportation in which we rationalized our number of transporters, started dealing with organized transporters direct from company and started delivering

goods at the customer’s doorstep.

Alongside, we also introduced RDCs (Regional Distribution Centres) for efficient and timely deliveries to distant states’ customers. We ensured better production planning and inventory management through effective SAP based computer software, inventory in and out through barcode scanning as well as introduced SAP based despatch and transport management modules.

How complex is the supply chain in this industry? How do you manage the supply chain complexities at Relaxo?

Supply chain complexity is relative to a variety of factors such as rising customers’ expectation for faster lead times, expanding products & services portfolio as well as ensuring a tailored experience. To deliver unique orders for each customer across the supply chain, greater collaboration with suppliers is needed, which calls for deeper visibility and control in the entire supply chain function.

With the expanding businesses and geographies, we are adding a ton of complexity in our supply chain. At Relaxo, we mainly deal with highvolume low-cost products, lightweight products, and our customers are spread in more than 600 towns across India.

So, timely delivery in the lowest possible cost to our distant customers is a big challenge because our production set up is in North India. Our plants are located in Bahadurgarh, Haryana, Bhiwadi, Rajasthan and Hardwar, Uttarakhand.

At present, we are dealing with large

12 CELERITY September - October 2019

number of SKUs, which are changing frequently as footwear business has become a part of the fashion industry.

Besides, sale of SKUs comes in 80:20 ratio i.e., 20% SKUs contribute 80% sales. As part of the continuous evolution process, we have decided to open RDCs to address the requirements of distant places at optimal cost and in the least possible time.

What are the pillars on which the success of Relaxo supply chain rests?

I would like to emphasize here that devoted employees and great teamwork is what successful organizations are made of. To harness these traits, we thrust a lot on values and culture, percolating from top to down. We are working towards capturing share of unorganized & semi-organized sectors, as well as expanding business through e-commerce platform, retails, omnichannel retail, etc. We are working on

what we call ‘SCM 2.0’ strategy, which includes co-innovation and supply chain design. The digitalization is one part of this growth phase, which has just begun, and we are only starting to see the impact that digital transformation will have on business. We will focus on technical capabilities and infrastructure in our supply chain as we move ahead.

crore to 2500 crore and expecting further increase considering our stronghold and the market potential.

The number of highly sophisticated manufacturing plants have expanded from three to ten, whereas the production capacity has increased to 7 lakh pairs per day and set to touch a million soon.

You have been a part of this fast-growing organization for more than a decade. How has been the transformation of Relaxo over the years?

How do you maintain a close connect with your partners – dealers & distributors to enhance your market share?

Transformation is a common term in business. Companies apply it loosely, to any form of change. Strategic transformation implies a change in the business model. The term transformation is also increasingly used for a digital reinvention. The most important starting point of a transformation and the best predictor of success is the CEO who recognizes that only a new approach will dramatically improve the company’s performance.

Here I would like to mention that the leadership style of our CEO, Mr Ramesh Kumar Dua, is a classic example of transformational leadership. His is the leadership style in which leaders encourage, inspire and motivate employees to innovate and create change that will help grow and shape the future success of the company. This is accomplished by setting an example at the executive level through a strong sense of corporate culture, employee ownership and independence in the workplace. He inspires and motivates workforce without micromanaging, he trusts trained employees to take authority over decisions in their assigned jobs. Employees on the leadership track are also prepared to become transformational leaders through continuous mentorship and training.

More than 80% of our business happens through wholesale dealers. We provide our dealers with mutually beneficial tools and resources that help them become stronger businesspeople, more knowledgeable brand experts and better sellers. As we continuously keep finding new markets, develop dealers’ network, we provide regular communication related to supplies and other related information. We provide them with all the possible sales support and arrange regular programmes at local and national levels. In line with this, we organize Hall of Fame, a platform for introducing new product developments, company schemes, etc. During this exercise, we also get the opportunity to talk to them on their grievances and suggestions with a view to further expand our reach.

What are the measures you have taken to streamline the supply chain?

In the present economic environment, what strategy you were adopting earlier

may not work in the future. Today supply chain managers are under tremendous pressure to contain costs and deliver results amid challenging circumstances. Considering the present circumstances, government policies, tax structure for footwear, we have decided to have mother warehouses within the state where the plant is located, and nearer to the plant to minimize cost. We have also reviewed the performance of RDCs. Post GST, as the state boundaries have practically vanished; we are thinking to merge the RDCs to achieve better operational cost.

What has been one of the most challenging projects for you at Relaxo?

In transportation, we are working with large number of transporters, some of them are organized, while some are semi-organized, including local players.

In my experience, there is no single transporter who can work pan-India for both PTL (part truckload) and FTL (full truckload). Today in numbers, we have approximately 120 transporters for outbound logistics, which includes local transports as well as upcountry transport.

For handling our entire transport service, we were using effective ‘Transport Module’, which is linked with SAP. We, however, were facing challenges in negotiating FTL rates, which keep on fluctuating basis seasons, demand and supply. We then introduced E-bidding process, which has been quite effective in reaching out to large number of vendors and getting

What are the major milestones you have achieved during the journey?

In my journey of 12 years at Relaxo, I have seen tremendous growth in the company in every function be it manufacturing, finance, sales & marketing, procurement, supply chain, etc., besides working on a highly effective IT network. During my stint, the annual sales has grown from 200

supplychaintribe.com

13

INTERVIEW

INTERVIEW

As a traditionally labor intensive sector, the footwear industry in India is currently transforming towards a more technological and innovation driven sector, with the increasing number of small and big footwear manufacturers focusing more on developing newer technologies and introducing better products. Today, India’s footwear industry has evolved into a highly specialized industry, where machine production with a systematic labor flow is facilitating the industry to an international level.

competitive rates.

How do you plan to take on the growing competition in this space on the back of an unparalleled supply chain?

Supply chains are no longer simple chains of a few vendors and customers.

They are often complex networks with many participants. Goods flow, right from the raw material to finished goods for end users, is not based on fixed long-term agreement, but on actual capability, capacity and cost.

Multi-plant planning has now become real-time. Visibility and transparency of all the supply chain activities are key to the successful delivery of the perfect order to the final customer. In the event of more connected supply chains to compete, we start with sensing and responding to real-time demand,

supply and delivery constraints. Bringing together data from different sources, our agile supply chain enables us to use data in real time to drive smarter decisions.

Is supply chain turning out to be attractive for new age professionals?

Supply chain is the single most important business discipline in the world today and has only gotten more interconnected. The importance of a well-run supply chain cannot be overstated, supply chain management today streamlines everything from product flow to unexpected natural disasters. Logistics of a large company is managed completely by supply chain managers. With an effective SCM, organizations can diagnose problems and disruptions correctly.

14 CELERITY September - October 2019

Many organizations lack in the risk management sector due to not being able to effectively deal with potential problems. Many potential saving opportunities open once an effective SCM gets integrated into a company or network of companies.

So, a wide variety of opportunities available throughout the supply chain stand out as a key reason for young professionals to study and be a part of this ever-evolving supply chain profession.

What are the existing gaps in the supply chain network of the country and how can they be resolved?

India is market overall, volatile

the fourth largest supply chain in the world. Indian industry, faces a fierce competitive and environment with globalization

of businesses. The infrastructural bottlenecks, increasing uncertainty of supply chain networks, shortening of product life cycles and issues related to choosing and working right supply chain partners, nurturing trust between them and designing the right system of measuring performance are some of the major aspects that demand urgent attention from the stakeholders. The globalized era and changing economies have made it essential for the supply chain organizations to develop strategies that make available differentiated value to the customer at the optimum cost. Varied & comprehensive logistics expertise and human resource is the need for the service providers.

A training and education curriculum needs to be set up at the management course level to meet pre-determined skill sets required by the industry.

Logistics, being service-oriented, can only be efficient with the efficiency of its lowest level employee. From the bottom to the top, a change in the efficiencies of personnel will drive the growth of the industry, and allow Indian businesses to excel to greater heights domestically and globally.

What’s the future plan of action for Relaxo and is supply chain being aligned with the objective?

With a view to further optimize our supply chain, at present we are working on two aspects – warehouse automation for our large-scale mother warehouse; and outsource our outbound logistics function. In warehouse automation, people have a very different

supplychaintribe.com

idea of what warehouse automation is.

From robots to automated processes, warehouse automation encompasses automated technologies that promise to increase productivity rapidly.

Secondly, outsourcing logistics functions helps in minimizing overall cost, as well as helps companies focus on its core competencies, meet customer demands more effectively and avail greater flexibility in maintaining and opening its supply chain. With outsourcing, if integration is taken care of and the third party has expertise and prior experience in managing the function of the organization, SCM can provide strategic advantage.

But in totality, in both the above requirements, we also understand that both should be optimally given priority basis our business requirements. In the sense that we can’t go for big bang automation techniques if they don’t suit our business requirements as they come at a certain cost. Similarly, for outsourcing, we understand that no one company can handle both warehousing and transportation together for panIndia, so we have to carefully examine and delegate the task to multi-vendors as per their expertise that can be zone wise.

What do you have to say about the government policies to boost the growth of the industry?

As a traditionally labor intensive sector, the footwear industry in India is currently transforming towards a more technological and innovation driven sector, with the increasing number of

small and big footwear manufacturers focusing more on developing newer technologies and introducing better products. Today, India’s footwear industry has evolved into a highly specialized industry, where machine production with a systematic labor flow is facilitating the industry to an international level.

The government support is another crucial factor for the future development in India’s footwear industry. More than 75% of the market is in the hands of unorganized sector that does not come under tax regime. Newly implemented GST is encouraging the organized sector.

Government earlier reduced rates of GST – 5% for product below `500; and 18% for products priced above `500.

This huge differential rate impacts the sales of branded footwear sellers. Now, government has announced 5% for `1000 WSP, which we feel, would be quite beneficial to the industry.

Vijay Wadhwani has over 27+ years’ successful professional career, with a vast experience in the field of supply chain operations, project management and procurement across diverse businesses and multicultural interfaces. He possesses expertise in developing souring strategies, encompassing vendor identification, development and analytical assessment to strengthen supply chain effectiveness.

He holds a Post Graduate degree in Management from IMT Ghaziabad, with a Specialization in Marketing. Vijay has also completed one year Executive General Management Program from IIM Lucknow.

15

FOCUS

FOCUS

The DIGITAL Roadmap

S

UPPLY Chains are the livelihood of any business and they impact the overall customer experience for any organization.

Modernization of Supply Chain remains key priority for lot of organizations, but the traditional structures are becoming a major roadblock in becoming an “Agile Supply Chain”.

We are now able to know exactly where our Ola or Uber cabs are, and they have provided high level of visibility of the vehicles to their customers. The digital e-commerce players are able to determine exact time of delivery of goods to the last minute and hour. We are now able to customize the products to our choice and still able to get very fast delivery of those customized products. These disruptions in B2C space are putting a lot of stress in the traditional supply chain structures. The only way to be able to survive in this on-demand economy where “instant gratification” is a given to transform the supply chain operations. It requires a very different approach to supply chain and old methods of managing supply chain need to be re-visited. The pressure on supply chain professionals is immense due to Sustainability, Cost Pressure, Disruption and Risk Mitigation, which have further escalated the complexities.

The disparate Supply chain Planning and Execution functions are adding to this complexity by creating barriers within the organizations to be agile towards the customer needs.

Traditional Businesses are disrupted by Digital Native Players and this has increased the pace of change at a speed that was never imagined.

The disruption is being done by not traditional competitors that were defined by Porter in its 5 Force model but from players who did not exist in the competitive landscape. This is the reality in this digital era and organizations need to adopt nontraditional business strategies to remain relevant.

So being agile and adapting to the changes in environment is the only way to be ahead. In this article, Piyush Chowhan, VP & CIO, Arvind Lifestyle Brands, highlights the challenges and identifies steps required to build a modern digital and agile Supply chain that will create differentiation for organizations to compete in the digital era.

The Pain Points There are various surveys conducted to understand the pain that the current supply chains suffer from and some of them are as follows: 

16 CELERITY September - October 2019

supplychaintribe.com

Lack of visibility of data across supply chain: We live in an information era where all decisionmaking requires availability of data on real-time basis. Unfortunately, traditional supply chain was built on silo structure hence end-toend visibility of data is also limited.

In one survey, 80+ supply chain professionals have cited that this







visibility of data is the biggest barrier for digitalization of supply chain.

Siloes in Supply Chain Planning and Execution Functions: The traditional functions of planning and execution are still in siloes causing a lag in decision making, thereby reducing agility. This requires a lot of efforts by various teams to reconcile the planning data with execution data leading to delays. Its quite important that technology platforms can integrate these silo pieces of data to generate meaningful insights.

Huge amounts of data handling: The supply chain processes are generating huge amounts of data across various processes. More than 80% of supply chain officers have highlighted that the amount of data is doubling in every two years, but the technology platforms are not ready to handle such data volumes to provide correct insights for decision-making. The old ERP solutions are not agile in their data handling capability, thereby constraining the fast decisionmaking.

Reactive Disruption Management: A lot of processes of supply chain are still working on the Reactive Paradigm because of the delayed availability of processed data. The modern supply chain requires proactive disruption management so that they can provide better customer service in case of events that are adversely impacting customer experience. This also requires building technology platforms that are agile and provide real-time visibility for fast changes to avert any exigencies in supply chain.

Digital Technology Landscape This advent of digital era has provided a plethora of technology choices that might be overwhelming at times and makes the decision to choose difficult.

The era of Automation by ERP has gone and transition towards the modern

17

FOCUS SMAC (Social, Mobile, Analytics & Cloud) era has happened very fast. Thus, the correct technology choice is critical for this digital transformation of supply chain. 



Rise of IOT and Sensing Technology: The cost of sensors has fallen drastically and the advent of IOT has opened up a new dimension of data visibility for the supply chain processes. While these technologies have been available for quite some time, the reduction in price of computing technology has been immensely aiding in the expanse of the sensing technologies.

The movement of goods can now be accurately monitored, and real time information is available with the adoption of RFID technology.

This provides huge power for supply chain teams to understand the events that cause disruption in the movement of goods. This technology, if implemented at scale, can give real-time corrective decision-making capability for any deviations.

Rise of Mobile and Edge Computing: Earlier most of the computing capability was hosted centrally and distributed edge computing was costly. The fall in prices of Edge Computing devices combined with Mobility solutions has provided a big power to the end users who are at the various points of the supply chain. The information processing at the various nodes of supply chain can now be available in real time to all the supply chain participants. This can help in getting the silo information across the various partners seamlessly.

FOCUS 





Rise of Big Data Technologies: The advent of Big Data Technologies has made ability to process large amounts of data very fast and derive meaningful insights in real time.

This helps supply chain players to collaborate and work on realtime data so that decisions can be accurate and faster. The challenge of delayed data, silo data can be resolved by the implementation of these new age data lake platforms, which process huge amounts of supply chain data in real time.

Rise of Robotics and Drones: The movement of goods across the supply chain has been the area that is required innovation if the customer experience needs to be enhanced. Rise of Drone and Robotics can help in the movement of goods faster without much human intervention, leading to lesser errors. This will help in touchless movement of goods, which ultimately increases supply chain turns. This will also lead to faster turnaround times for customer orders.

Rise of Artificial Intelligence (AI) and Machine Learning (ML) Models: Supply chain management processes have a lot of critical decision making, which is dependent on lot of data. The availability of data based on the above sensing technology needs to be processed using modern algorithm that are now possible with the help of AI and ML models. The processing power in both mobility and cloud solutions has now been made possible to run sophisticated models that was not possible earlier. Hence these models can now churn insights that can

allow fast decision making in the hands of supply chain professionals. 

Advent of Block chain for better collaboration: The biggest roadblock of efficient supply chain management has been the sharing of data across enterprises that are part of the extended supply chain.

The advent of distributed block chain networks can create wonders by sharing data across the entities in supply chain, thereby building trust and transparency across the various nodes. This can help in building smart contracts and financial reconciliation processes across entities smoothly, which helps in making a lot of mundane activities redundant across supply chains. This can also aid in making time available for supply chain professionals for value added activities.

We can now see that there are a lot of technologies, which can create a huge impact in the supply chain management processes. It’s important to understand that not everything can be applicable in the entire context, thus we have to do a proper assessment of the cost benefit analysis before looking at adopting the same in our enterprises.

There has to be a defined digital supply chain roadmap that needs to be crafted keeping all the various internal and external entities in mind. There has to be clearly defined strategic objectives for this transformation journey with clear distinction between automation and digitalization of processes.

There are certain challenges that organizations have faced while undergoing this transformation and we visit some of them in the next section.

Change is always tricky and poses unique problems for every organization.

Research shows that technology implementations fail rarely because the technology did not work but rather because people are not willing, or find it too difficult, to use them. Hence it is critical that organizations build capabilities across their ecosystems collaboratively with their employees and empower them to understand and extract information from connected assets and use it to drive informed decisions.

18 CELERITY September - October 2019

Supply chain transformations are more complex since they span not only within organization but also across entities. Organizations are still trying to find an optimal path that balances improving current operations with potential opportunities offered by digital technologies. Most of the disparity between potential and actual gains from supply chain digitization can be explained by technology gaps and management choices.

Transformation journey The right approach to digitizing supply chain requires integrating suitable leading-edge technologies with revamped operations. Challenges in unlocking these opportunities are described in more detail below: Digital Transformation Strategy: Though senior executives at organizations understand strategic importance of digital supply chains, they don’t necessarily understand the entire spectrum of strategic possibilities made possible by digital transformation. Many leaders find it difficult to keep up with the rapid pace of technological change, as well as obtain alignment on the new rules, challenges and operational risks that go along with it. This mindset— focus on digital transformation primarily for operational investments, coupled with a relatively smaller emphasis on profitability—suggests that, while most leaders may associate operational improvements with strategic growth, they do not necessarily associate them with revenue growth from R&D-driven new products or business models. This needs to be changed to harness financial benefits from these transformational initiatives.

Supply Chain Strategy and Alignment: Many organizations may consider supply chain as relatively important in digital transformation efforts, however they fail to see it as a driver of digital innovation, nor do they involve their leaders in strategic decisions. This seriously impacts future supply chain digital investments, resulting in suboptimal digital transformation results.

Organizations must ensure to elevate the status of this function to harness truly innovative and transformative uses of technology offered by digital supply chains in the areas of end-to-end

supplychaintribe.com

supply chain transparency, intelligent optimization, and flexible, intelligent decision making.

Approach towards Innovation: As organizations seek to adopt digitally transformative technologies within their organizations, they should recognize that using technology to drive innovation, rather than just improve current processes, offers strong prospects for growth. To make innovation a part of the digital transformation strategy, organizations must get comfortable with exploring new technologies and assessing their ability to yield strong ROIs. In addition, they should consciously limit the tendency to make technology investments only in productivity and operations areas to ensure they don’t miss out on new untapped opportunities and risk being left behind the competition.

Talent: Digitally enabled supply chains have talent requirements that can be quite different from those of conventional supply chains. Research shows that technology implementations fail rarely because the technology did not work but rather because people are not willing, or find it too difficult, to use them. Hence it is critical that organizations build capabilities across their ecosystems collaboratively with their employees and empower them to understand and extract information from connected assets and use it to drive informed decisions.

Organizational Culture and Structures: While the organization and IT landscape are established, an innovation environment with a start-up culture has to be created. Thinking Big, Starting Small and Scaling Fast are the three key tenants of digital organization building new technology capabilities.

This “incubator” needs to provide a high degree of organizational freedom and flexibility as well as state-of-theart IT systems (two-speed architecture independent of existing legacy systems) to enable rapid cycles of development, testing, and implementation of solutions. Fast realization of pilots is essential to get immediate business feedback on suitability and impact of the solutions, to create excitement and trust in innovations (e.g., new

planning algorithms), and to steer next development cycles. The “incubator” is the seed of Supply Chain 4.0 in the organization – fast, flexible, and efficient.

Connected Data Insights: In a connected digital supply chain, integration of digital information happens from many different sources and locations in an ongoing cycle.

Throughout this cycle, real-time access to data is driven by the continuous and cyclical flow of information and action between the physical and digital worlds. Organizations must possess capabilities to automate data creation, adopt cross-functional usage and most importantly make decisions based upon these insights. This ability to fully harness each stage of the physicaldigital-physical loop is crucial to the full realization of digital supply chain capabilities and benefits Digitalization of supply chains is required and once we take a holistic approach towards this transformation, we can really create a digital avenue for organizations to stay competitive in this fast changing world.

Piyush Chowhan has an MBA in Finance and Operations from Xavier Institute of Management (XIMB), Bhubaneswar. An experienced professional working in areas of retail strategy, business analytics, customer loyalty and CRM, retail business consulting and supply chain management, with a strong domain knowledge. He has worked for global retailers like Walmart, Target, Circuit City, Tesco, Best Buy etc. He has set up and managed competency centers/ teams for retail and supply chain as shared service or captive units. He also has exposure in building practice/ COE in business analytics and retail consulting.

19

COVER STORY

Making More

Possible Thomas Foxwell Burton once said, “With ordinary talent and extraordinary perseverance, all things are attainable.” August 6, 2019 was one such incredible night where we witnessed exceptional talents in the supply chain industry walking the red carpet and claiming their top spot. Our maiden awards ceremony, hosted at Taj Santacruz, delivered many firsts for the industry … it was indeed the first event where we recognized and honored young individual talent. These awards created inspirational benchmarks for the Millennials and inspired them to be a part of this exciting growth phase. Right from the top guns of the industry to the most novice managers, they were all part of this iconic platform making it a great concoction of transformational ideas and innovative approaches. Here’s presenting you the awe-inspiring Superstars & Super Achievers of Supply Chain…

COVER STORY

I

T was an evening to remember for all the delegates and winners present at the maiden 30-under-30 and 40-under-40 Supply Chain Awards by Celerity. A star-studded affair in the literal sense where the Superstars of supply chain gathered to script a golden chapter in the history of Indian supply chain.

A unique concept in supply chain Even though these are exciting times for the supply chain and logistics domain, with disruption, in traditional models of warehousing and transportation, continuous innovation through technology and automation, and a landscape more competitive than ever before, this domain is only just beginning to become attractive as a career option. Other functions like Marketing & Advertising, IT, Finance, etc., have evolved where younger generation take on larger roles. To enhance the appeal of supply chain & logistics amongst young talent, Celerity launched the 30-under-30 and 40-under-40 Supply Chain Awards. The platform was further strengthened by our partnership with A&M as our knowledge partners.

While awards in supply chain domain are a no big deal, what makes this platform unique is that each nominee had to go through a rigorous nomination process right from filling up an exhaustive form to clarifications from Jury members and finally strict scoring parameters from six very senior jury members. Given the breadth and depth of unique experiences which each Jury member brought, there were two further rounds of deliberations to arrive at a winner list.

Alvarez & Marsal (A&M) as our knowledge partners, helped through the entire nomination process. As Sudeep Mehrotra, Senior Director, A&M, recounts, “The process started with us soliciting nominations. After a slow start, it picked up really well. The quality of nomination was quite encouraging. Jury was formed keeping in mind various aspects to be evaluated. The involvement of jury and their commitment was quite exemplary. A big thanks to the jury for this.”

A distinguished jury panel What made this journey even more fulfilling was onboarding the eminent panel of judges, which included Prof Ashok Pundir of NITIE; Mr Royston Fernandes, Director- Analytics and Continuous Improvement; Mr Ravia Rodrigues, Director – Supply Chain, Alstom India; Mr Venkatesh Maheshwari, Sr VP – Supply Chain, Aditya Birla Fashion & Retail Ltd; Mr Ranjan Sharma, CIO & Head SCM, Bestseller India and Mr. Ravikant Parvataneni, CEO, Crimson & Co India. These experts have a lot to say about the innovations and exemplary work done by each nominee, which made it an arduous task for them to unanimously declare winners in each category.

20 CELERITY September - October 2019

supplychaintribe.com

21

COVER STORY

COVER STORY

Jury speak

Mr. Royston Fernandes, Director - Analytics and Continuous Improvement

on Success mantra for effective supply chain

Prof Ashok Pundir, NITIE

on Leadership

Supply chain is a fairly vast function which primarily involves 4 key areas — Plan, Source, Make, and Deliver. I know people who have spent entire careers building expertise in only one area because the body of knowledge residing in each area is so immense. But when you are looking at the whole supply chain, you want people who have worked across these areas. And I think it is challenging to find people who have a view across the end-to-end supply chain because many companies are not structured internally in that way. Take for instance a company that has three different verticals - a commercial vertical which covers distribution and sales, a manufacturing vertical which manages all the plants, and a sourcing vertical which handles suppliers and ensures material availability. Since they are structured separately, these three verticals will tend to take decisions independently, which may result in sub-optimal outcomes for the supply chain as a whole. The individual team members too will work within their respective verticals and may not be encouraged to be fungible across teams. Contrast this with another organization which has planning, procurement, manufacturing and distribution all rolling up within the same team. This second supply chain will be much more coherent and team members will learn to make more holistic decisions. The way an organization structures its supply chain impacts the way that the supply chain delivers and the perspectives of the team members who constitute that supply chain. So, I think that’s what I look for when recruiting people - someone who views supply chain in a holistic way, with a perspective right from suppliers’ suppliers to customers’ customers. If you don’t have people who see your own organization as one single supply chain, then you will face challenges both internally as well as externally. During the screening process of the award entries, what interested me the most was the candidates’ multidomain experience and the way they entwined those learnings to drive results in their present organizations. These young talented supply chain professionals will excel in their domains when given the right opportunity and I wish all of them the very best for their future endeavors.

Team management and people skills are very important and especially in supply chain because there are a number of parties involved in the entire process right from the raw material to processing till it reaches the last mile and when we say last mile it must reach in the most safe & secure manner with the same order that the customer has asked for and the desired quality. Unless there is greater commitment and strong leadership, we can’t achieve these goals. This event brought together the abundant leadership traits that these young managers have inculcated and have led not only their growth trajectory but have in fact left a lasting trail for their sub-ordinates to carry ahead the bandwagon. These awards are a true reflection of leading from the front and delivering stupendous results for the organizational growth. It’s the leadership streak which has helped them excel at all fronts and ultimately win the race.

Mr Venkatesh Maheshwari, Sr VP – Supply Chain, Aditya Birla Fashion & Retail Ltd

on Grooming the next-gen

25 years back, when I started my career in the retail industry, people really didn’t have an idea what organized retail was. People used to often assume you worked in a store. Similarly, SCM is not just about warehousing or logistics, people don’t know it’s about A.I., it’s about mechanization and automation in the warehouses, it’s about design and there’s so much more to it.

And having gone through this journey over the last 25 years, the onus is on us as senior leaders to groom the talent. There’s so much talent out there. At the supply chain forums or at industry awards, we only recognize either teams for what they have done or some company for some initiatives but somewhere we have failed to recognize individuals especially the young ones and that’s what appealed to me about these awards. I take pride in saying that within my own team of about 100 people, about 60 of them fall under the age of 30. Last year, I took two months off for my holidays and I didn’t get a single escalation mail or a call while I was away climbing Mt Everest. And that’s the kind of talent we have with us which we really need to recognize and encourage them to come out of their shells, seek opportunities and excel in their areas of interest and make their profession fulfilling. I don’t believe in the theory of people sticking to a job are better for organization or themselves. In fact, I tell HR while recruiting that don’t get me people who have been in their last jobs for more than 3 years because the learning stops and so does the adaptability and dynamism.

This event proved to be the real eye opener for us as industry experts and actually empowered us in motivating the right talent for them to be a part of this exciting growth story.

22 CELERITY September - October 2019

Mr Ravikant Parvataneni, CEO, Crimson & Co India

on The binding thought

I think it is important for us to understand that supply chain as a function has many inter-dependencies. Most important is to realize that one person can’t make a difference. It’s really important for the organization to set KRAs for the entire team. The KRAs should be set in a manner that fosters creativity and innovation. For each and every member of the team, it’s critical to understand business requirements and have the same objective and that can be the only thing which motivates them and binds them together. If that doesn’t happen, a project can’t succeed. All of the jury members unanimously found the Power of TEAMWORK as the most striking feature in the nomination forms. All the entries had this binding element, which actually is the foundation of any project success. We are pleased to see that new generation places immense thrust on this core value rather than just achieving their individual goals to succeed.

supplychaintribe.com

23

COVER STORY

COVER STORY Mr. Raviraj Rodrigues, Director Supply Chain-India, Alstom Transport

on Innovation & beyond

Steve Jobs once quoted that those who are crazy enough to change the world are the ones that usually do. Not all of us are Steve Jobs and that’s where usually organizations step in. I can just quote a couple of examples – 3M has a policy for certain functions for e.g. R&D where people need to devote 15% of their work time towards innovation, so they will give you some time off to work on innovation and in the process help 3M come up with innovative products.

At Alstom, there is a concept called ‘I Nove You’ where groups come together to give ideas which can help the organization globally. These ideas, if accepted, get recognized in terms of a proper Implementation Project and the idea generators are recognized in a R&R ceremony by the company CEO. More than anything else, I think it’s a pleasure to see your ideas taking shape.

The night of felicitation For the supply chain of any company to be effective, apart from people, the other three pillars of Infrastructure, Services and Technology need to be very strong. Taking cognizance of this fact, we honored three stalwarts who have been doing pioneering work in these fields. For his pioneering work in the field of Ports Infrastructure, Capt. Sandeep Mehta, President, Adani Ports and Special Economic Zone Ltd was felicitated. He has been responsible for development of Container Terminals, Private Rail Operations, Container Freight Stations & Inland Container Depots and grain storage facilities for the Adani Group in India. Mr. Anshuman Singh, Founder Chairman and Managing Director of Stellar Value Chain Solutions, was felicitated for his immense contribution in Supply Chain Services. At Stellar Value Chain Solutions, Mr. Anshuman Singh has embarked on the journey of 'Value Chain Transformation' and wishes to bring India to the top 5 of the Global Logistics Performance Index. In the field of technology, Mr. Venky Nayar, Co-founder, Autoplant India was felicitated. Autoplant India has developed an end-to-end cloud platform for supply chain management. The platform uses emerging technologies from machine learning and advanced data analytics to the Internet of Things and helps automate various processes in the entire supply chain.

Here is what they had to say.

Capt. Sandeep Mehta, President, Adani Ports and Special Economic Zone Ltd

So those are some of the things that organizations have begun to do. Organizations also tend to nominate and send people to courses where they meet with different people and there’s a lot of cross-pollination of ideas, which can be implemented in their respective organizations.

The most important thing I’ve seen is that recently in the last couple of years, a lot of organizations have begun to see supply chain as an enabler of the business and because of that, there’s a lot of openness to ideas and an idea which emanates from supply chain and has the potential to transform the industry, for example omnichannel is based on the promise of quick and responsive supply chain. This concept has its roots in supply chain. And this is something that I see happening more often.

Also, of late, I am seeing that organizations are giving more time for people to work on innovation and ensure that this is part of their objective setting for the year. While judging, we also looked for such strikingly innovative entries and as other jury members have pointed out, all the entries were high on innovation & creativity quotient, which is an extremely endearing aspect for the supply chain fraternity.

Mr Ranjan Sharma, CIO & Head SCM, Bestseller India

on Key enablers of growth

I think what's important when you start building a supply chain organization is to have the right people with the right intent, skills, cultural fitment and high motivation. Secondly, service orientation is far more important whether it's to an internal customer or external customer because both are equally demanding and equally challenging. So, I think that intent and motivation are far more important to pick up the right people, build the right organization. And then I think to be in supply chain means having to give enough opportunities for people to grow. So, the moment you start getting new opportunities, new things to do, that's what is going to keep you going. That's where you want to really move on and keep discovering new things, building new things for the organization. During the judging process, we came across many such skills and we were pleasantly surprised that we have exceptionally enthusiastic talent in the country. This platform has truly offered them wings beneath the wind.

24 CELERITY September - October 2019

It's very encouraging to see the supply chain now getting recognition and young people joining the industry and more importantly working together.

I do believe that we are on the right path. I think India will really create innovative solutions. The technology is already coming in right now. People have to work together. In fact, looking at blockchain and looking at other ways of doing international trade, we are becoming more competitive. I think with what is happening in the industry right now, we continue to look for good people. So, wherever you find good people, please encourage them to join and also network within the industry. I think Awards is one way by which we all can network and get together. But more importantly if we do it every year, we will also be able to create the kind of groups that will encourage innovation and growth.

I am humbled to receive this award and wish these young people the very best to excel and leave a lasting impression in their professional journey.

supplychaintribe.com

Mr. Venky Nayar, Co-founder, Autoplant India Logistics is typically viewed as a traditional and difficult industry; this cannot be further from the truth. Not just by embracing the latest technologies, but also incorporating new business practices and adopting innovative solutions, logistics in India has been through a profound transformation in the last few years. The good thing for us in the industry is that the future is equally exciting. Autoplant spotted this trend several years ago and has been committed in its approach of tackling only the most difficult logistics problems – eschewing the ordinary – and bringing about fundamental change. We have constantly pushed the boundaries and looked to solve those problems that have a profound impact on the industry. It is heartening & a validation of our strategy that many other companies have followed a similar path in the past couple of years. Even more heartening is to see young talent gravitate towards this space. The talent on display at the Celerity Under-30 and Under-40 awards are a testament to this fact.

25

COVER STORY

Winners take all

Pratyush Prateek, Senior Manager - Sourcing, Big Basket

The exuberance of the winners was all too evident and the positive energy that each of them radiated could have lit up the entire world. While we congratulate every one of them, here is an excerpt of what makes a winner, in their own words.

I am responsible for planning end-to-end National - sourcing and distribution of Strawberry.

Strawberry is hypersensitive seasonal fruit grown in select region and highly perishable.

Conventional method was to reduce farm harvest to market travel time; but the quality of the product till it reached end consumer continued to have challenges in terms of look & feel & taste & also business loss due to quality deterioration at various nodes exceeding 30%. Through technological interventions like use of Precooling Units, Reefer vehicles, Temperature controlled air shipments, last mile temperature monitored Shipper Boxed delivery, ICT backed backward farmer integration, initiatives on better packaging during transit as well as customized product packaging to end-consumer, we brought down wastage to sub 5%, achieved fill rates >99.9%, gave better returns to farmers and enhanced overall customer experience. I believe that passion, innovation, self-belief and learning agility help me overcome challenges and succeed.

(In this part I of a two-part cover story, we have covered 18 of the total 43 winners in both age groups)

UNDER-30 Aditya Virwani, COO, Embassy Industrial Parks (EIP) I have been exposed to the world of real estate and property development from a very early age of 15 years. I have been keenly involved with the strategy and operations of the Embassy Group and its diversified businesses, along with my father Mr. Jitu Virwani, Chairman & MD, Embassy Group. Currently I am responsible for managing the overall portfolio of the company and its operations. At EIP, I am responsible for development of large scale and fully managed industrial & logistics parks across India totaling to about approximately 15 mn sqft over the next three years. These are to be the first of its kind with international standards of quality and environment. We are the pioneers of the new lean model of building industrial and logistics parks nationally.

Being part of a bigger brand that is already present in all sectors of real estate we have insights in all areas related to construction, safety, cost efficiency, technology, innovation. We have a team of people who constantly work on R&D and data analytics to keep us ahead of our game coupled with an awareness of latest and future trends of industry.

Mihir Parekh, Vice President & Head – BubbleGUARD, Nilkamal Ltd We designed the Nilkamal PalletGUARD Sleeve System – India’s first pallet based collapsible and returnable packaging solution with sustainable logistics in mind. The solution is aimed to replace single use packaging and unsustainable materials like paper and wood with a complete plastic unit that is reusable over 1000 usage cycles and is 100% recyclable at end of life.

The PSS is engineered to optimize the freight cost by allowing for 80% reduction in return freight logistics, therefore deliver a lower per use cost and carbon footprint than conventional packaging to users.

With this focus on sustainability across all BubbleGUARD products, we have been the fastest growing division in our group and have been profitable within two years of operations. As Head of Nilkamal BubbleGUARD, I am responsible for the profit centre, manage B2B sales to institutions and corporates and lead the marketing strategy of the brand. I also spearhead Nilkamal’s social and sustainability efforts with products like Water Wheel and our social impact range of products.

Manoj Nolkha, Lead – Supply Planning & External Manufacturing, Janssen India (J&J Pharma) I am currently leading the Supply Planning & External Manufacturing Operation for India Manufacturing (Contributes 50% of India Business). I am responsible for developing and executing production planning, raw & packaging materials planning, driving S&OPs with third party manufacturing sites, inventory management and project management.

I was part of the Packaging Standardization Project which delivered huge savings in costs annually. I was also key contributor in implementing Anti-Counterfeit Pack for biggest brand of Janssen India in record 3 months’ time, with adoption of technologies i.e. Invisible Prints, Micro-Text, Guilloche Pattern. In my previous organization, I have also developed 70+ Vendor for greenfield project & setup the system & process for Sourcing. Currently I am co-leading E-Leaflet Project for India, which is a positive step towards Environment Sustainability.

I believe, in current corporate world, you can’t be lone achiever. We need to approach people with positive intent and include them to find the opportunity. When people from diverse function, background, experience come together with the intent of delivering value to business, they can do wonders.

Vikas Chandra, Assistant Manager, Demand & Distribution Planning, J&J During my very satisfying professional journey so far, I have supported to Implement Direct Dispatch Model for Distribution of Finished Goods (FG) from Factory to distributors, which resulted in savings on warehousing, transportation & manpower cost and improved time to serve customers. I also did Bottom up budgeting for Secondary distribution, which helped identify inefficiencies and improve accrual management.

Anirudh Mendiratta, GM – Operations, Cars24 I have successfully managed transition of warehousing to be GST ready by redesigning & executing the network redesigning for complete PepsiCo India portfolio (Beverages & Foods). I have been adjudged the best Lean Six Sigma project in AMENA for delivering 19% productivity via LLS tools and laying the automation blueprint for PepsiCo India warehousing. I had set up processes & metrics for Cars24 logistics operations to support “blitzscaling” pan-India distribution. The skill sets that I believe help in achieving the desired results are – Perseverance and a good ‘Friendship’ with data. The management mantra for planning is I believe in, “In God we trust, everyone else must bring data” and for post planning execution, “Karne se hi hoga, Baba nahi karwaega”.

26 CELERITY September - October 2019

I think clarity of goals and right mentors are key to have a successful career. We need to know what we need to achieve and through target setting, continuous measurement of progress against the clear targets and regular review to see and ensure you are moving in right direction.

Having right mentors or seniors who can guide you and coach you in difficult circumstances helps in career management and ensures you get right opportunities.

supplychaintribe.com

27

COVER STORY

COVER STORY

UNDER-40

Amit Singh, Divisional Manager Procurement, ITC Ltd (Food Division) Managing around 1880 materials for different F&B categories, developing supply chain and ensuring competitiveness has helped the organization in being among the top 3 in the industry in most of product categories. I have developed supply chain for each raw material in a manner which has helped the organization to diversify in various product categories. Some proprietary raw materials are developed in close coordination with R&D team, vendors and farmers to get the desired product so as to ensure timely launches. I have also been driving automation and digitization of systems & processes of procurement function to bring in transparency. I believe good planning and organizing skills along with creativity and multi-tasking ability furthers helps in achieving the desired objectives.

Saurabh Gupta, Regional Head Supply Chain Planning – South Asia, AkzoNobel Ltd It is overwhelming to receive a recognition like this. Over the last 15 years, I have had the privilege of working on different assignments covering various aspects of Integrated Supply Chain encompassing manufacturing, supply chain and other continuous improvement programs involving six sigma & other tools. I spearheaded a project involving cross-functional team to re-design the Supply Chain Network. We used globally recognized analytical tool to study the network design and arrived on various simulations. These simulations were tested in different scenarios & market complexities to finalize the most optimal network which helped to bring down our cost significantly. I have also been part of implementation of organization-wide Integrated Business Planning (IBP) in various sites and countries in South Asia Region. I feel the ability to learn, continuous improvement, innovation and sincerity in work are the key skill set for young managers to succeed. I like to work with team, provide them the necessary support to implement ideas/change. I encourage them to take initiatives and tell them to never hesitate from failures.

Kanishk Negi, Global Supply Sustainability Manager, ABB Ltd We have successfully demonstrated that sustainability and commercial benefits are not mutually exclusive. They are 2 sides of the same coin and this is something for which we don’t have many examples in supply chain.

General perception is that sustainability is the right thing to do…but it faces challenge of acceptance due to modifications required and its impact on the cost economics. ABB’s Supplier Sustainability Development Program (SSDP), documents cases that quantify the operational and business benefits helping the suppliers gain significant commercial advantage by implementing responsible business practices.

The cornerstone of this success is the collaboration with suppliers. Investing in training, using out of box thinking and deploying innovative approaches to solve challenges that are considered “unsolvable”, really demonstrate pioneering approach. The message is very clear, sustainability is the right thing to do and if done correctly, it can provide significant commercial advantage.

Tannistha Ganguly, IT Manager Global Supply Chain Procurement, Kimberly Clark My greatest achievement as a professional would be to enable companies to imbibe a technology centric behavior into their core business and build a technology-exploratory approach to solve common business problems. I have been able to pilot large scale projects in the fields of RPA, AI and dynamic analytics, and in the process establish myself as the most dependable source in the company’s transformational journey towards digital and process efficiency. From solution architects to the CXO teams, I have developed myself as a trusted business partner to realize the company’s digital roadmap and provide direction to otherwise legacy and manual process driven business units. With wide experience in working with large multinational FMCG and retail giants, I have not only been able to expand on my skills in the fields of IT & SCM, but also gained extensive on-the-job knowledge in finance, sales and CRM. I have been successful in transmitting these developed skills to the various teams that I have worked with and become a knowledge enabler, helping companies and their partners build best practices, benchmarks and quality related baselines.

Rajat Sharma, Head SCM, Hamilton Housewares Transitioning an order management function with 30% volumetric forecast at primary level, with a 42% forecast accuracy and 28% fidelity and no KPI to measure service level, holding 8 months of inventory, with a band of un-energetic and noninfluential members into a strong demand planning function establishing a secondary forecasting – channel inventory – primary replenishment based planning model with 88% volumetric forecast, achieving a 74% forecast accuracy and a 60% fidelity, 88% primary fill rate, 82% customer order service level, 4.5 months of inventory, 1.8% reduction in total outbound supply chain cost, and a strong high performance multicountry multi-origin & influential team of demand planners and logisticians: this was an extremely enriching journey of 4 years. It also encompasses setting up of endto-end supply chain control processes for 7 subsidiaries, experimenting with export/ import focused warehousing schemes across nations, running various cross functional projects across 4 continents and finally establishing a complete S&OP framework – the journey was full of learning across the building blocks of any business: People, Process, Infrastructure & Technology.

Vishwas R Kulkarni, DGM – Purchase, Legrand (Novateur Electrical & Digital System) My six sigma green belt has helped me to initiate and successfully implement projects championing change management. I have been a part of several digital initiatives like implementation of self-booking tool for business travel, e-auctions for scrap disposal, incentive tours, electrician loyalty program, etc. I have been involved in the introduction of Leave Management portal and many more such actions. Striking synergy and consolidation of service providers resulted into significant savings. A platform has been created to discuss ongoing actions, proactive measures and decide strategic actions with supplier & functional teams with the introduction of QBR (Quarterly Businessmen Review). We have extended concepts of the Legrand way, 3P to strategic suppliers for motivating them to contribute in value engineering, innovation and productivity projects. Additionally, daily express meeting with the team, monthly review of KPIs and collaborative approach have ensured first time right philosophy.

28 CELERITY September - October 2019

supplychaintribe.com

29

COVER STORY

COVER STORY

Atul Barve, GM – Supply Chain (B2B), Signify Innovations India (formerly Philips Lighting)

Vikas Gupta, CIO, Hiranandani Energy (H-Energy) My first reported project is a very large scale Digital Initiative involving world-wide delivery partners (vendors), request initiators, company stakeholders, internal consumers, logistics channel partners, etc. The project involved a full-fledged training, intermediary handholding, and post implementation support helpdesk for run-time issue resolution. It brought 25,000 vendors, 400 logistics partners, 2,000 employees and 1,000 customers on a single digital platform, which enabled on-line communication and imparted “Anytime” visibility, tracked and handled across multiple software applications, for the entire value chain right from material requisitioning, planning, procurement in SAP, to handling Post Order Management via custom software application.

Order execution TAT (order to Invoice) in B2B segment of Signify Innovations India Ltd (formerly known as Philips Lighting India Ltd) is brought down from 41 days to 15 days in span of 3 years. Robust S&OP process & immaculate demand planning are the key drivers for the same. This helped immensely in increasing customer satisfaction on delivery performance. Initiation and implementation of distribution network optimization projects in various companies like GE, Marico, wherein the Regional/National Distribution Centers are relocated provided significant positive impact on profits without compromising on customer deliverables.

Apart from analytical skills and strong functional knowledge, what really makes me successful is the positive attitude and collaborative approach. It helps me in winning trust of my peers and stakeholders. My management mantra is ‘Strive for Innovation to create value for customers’.

My second project is a maiden but successful attempt to create an end-to-end Hydrocarbon Accounting System by implementing comprehensive scalable systems which help in gas distribution. The solution is a complex and a hefty mix of half-a-dozen software applications interacting in tandem with each other at different points in time, besides the security framework applications/agents and infrastructure monitoring tools/agents. The application has interfaces with upstream and downstream applications to facilitate appropriate views for various internal, external and government stakeholders. All of this was designed while staying light on infrastructure requirements for application as it gives an edge and helps organization go a long way in terms of scalability and expandability.

Sreekanth Vancheeswaran, VP & Head – Planning, Logistics and Commodity Sourcing, GCPL We improved the stock availability for GCPL India from 96.7% to 98.5% for GT. This is significant achievement considering that the supply chain norms are designed considering a maximum possible 99% service level. We also redesigned the supply network for GCPL India post GST to maximize the saving. The overall savings led to the supply chain costs including transportation, warehousing and customer service reducing from 5.5% to 5.1% of sales value in 2 years, despite an inflationary increase in costs and volume growth being higher than value growth for business.

During the low commodity cycle of palm in Oct-Nov 2018, we structured a long commodity cover for our input materials which contributed towards the margin growth for our personal care category.

Key skills which have helped me are my analytical ability, to create & read across critical reports to identify priority of action. Another critical skill has been to connect with aspiring young managers through the right conversations on performance and development needs, to ensure the team continuously looks at raising the bar. Management by Exception is my mantra. This has not just helped in effective delegation and increasing by bandwidth, but also helped me identify outliers in the supply chain which need significant management attention.

Nikhil Puri, Global Head – Sourcing & Procurement (Optical Fiber Cables), Sterlite Technologies I had developed the key raw material, which helped in gaining business in new territories and increasing the revenue thereby. I had also implemented the Consignment Stocking Model (VMI) for some typical raw materials. The whole contract was drafted in a manner to suit both the parties and created a win-win scenario. After a series of discussions, many vendors came on board, which resulted in reducing the inventory and making sure that the raw material was always present. I have been driving the entire supply chain for the Optical Fiber Cables, which helps the company in achieving their vision, “Transforming Everyday Living by Delivering Smarter Networks”. Company’s growth & strategy is to have 15% global market share. I am increasing the supply base and bringing up more innovation and flexibility in supply chain, which will help in achieving the same. I am a certified Six Sigma Black Belt. I believe in my skills such as adaptability, result oriented approach and knowledge of products and commodities.

Ronit Verma, National Logistics Manager, Red Bull India I was involved in Supply Chain Network Optimization project, which included reshuffling of entire network design and aligning with stakeholder in proposed linkages along with financial & operational factors. depots, locations to serve. The project included all product movement from Port > Mother Warehouse > Regions > Customer in scope. We evaluated operations at micro-level for existing supply chain network with standardizing approach and improved supply chain operation process in planning, allocation and executions. We did network planning through linkage study at tier/city/town level with the help of developed tool for supply chain planning & operation. Without much of existing nodes and drop size changes, the first phase gave huge cost benefits and service level improvements and the second phase in line will be able to get 16% to 20% savings on supply chain cost. On the Primary Transportation lane, volume allocation & planning basis changed linkage also benefited in cost outcome along with standardizing the overall process of panel selection. We also streamlined primary PDP with optimum inventory levels across nodes and faster turnaround without increasing space in overall channel. Immediate improvement in service levels to different customers segments, achieving >75% for next day deliveries through robust network optimization & planning, savings of 10% -15% on Supply Chain operations cost.

30 CELERITY September - October 2019

Himanshu Maloo, Director – Supply Chain, Janssen India (J&J Pharma) Purpose that drives me at work is Customer and Patient Centricity. I have Implemented ‘End to End De-risking Tool’ methodology to proactively identify & mitigate the supply chain risk, which can disrupt the business. In the last three years, I have implemented more than 40 projects to proactively mitigate the risk. This has helped in substantially improving customer service levels while reducing inventory days. I was also instrumental in implementing NOOS (Never Out of Stock) tool for daily monitoring & future probability of stock out at CFAs. This has helped in ensuring correct distribution of stock and hence helped in avoiding sales losses.

We are working on E-leaflet for pharma products. This will help to reduce paper leaflet, which will save environment, cost and reduce complexity. I believe in Faster Forward Mindset, which is about End to End Thinking, Customer Centricity and Innovation. This helps organization to move together in the same direction with continuous improvement mindset.

supplychaintribe.com

31

COVER STORY

Successful people do what others are not willing to do While the endeavor of each supply chain and logistics professional is to ‘Make More Possible’, this event too realized this mantra in its own unique way. As Sudeep mentions, “Getting everyone together for the event along with leaders in the industry made it an experience for everyone.”

Sudeep further says, “I believe this year has been a good start to this journey. This association with Celerity has been quite rewarding to us. Celebrating achievements and recognizing them was the main objective for us. A&M stands committed to this cause. We congratulate Celerity for a successful launch of this ambitious journey. We look forward to an even better and bigger show next year”.

We promise to be back next year with more excitement and a higher level of participation.

(Editor’s note: This is the first of the two series article on the Celerity UNDER-30 and UNDER-40 Supply Chain Awards. Watch out this space in the next issue too as we conclude with highlighting some more exceptional talents in this fast-changing supply chain landscape!)

32 CELERITY September - October 2019

INTERVIEW

Efficiently Fresh “Cold chain has to be looked upon afresh, as a mode that extends the selling range of the produce, and thus expands the farmers’ market footprint. Efficient agri-logistics enhances market linkage and justifies efforts to produce more and brings overall growth to agriculture,” asserts Pawanexh Kohli, Chief Executive and Advisor, National Centre for Cold-chain Development (NCCD).

Your views on the transformation of the agriculture sector in India…

As the country develops and its citizens become more affluent and health aware, we are witnessing a shift in food preferences. Demand is no longer about carbohydrates & calories, but incorporates proteins, minerals and micro-nutrients. The shift in consumer orientation is effectively the prime driver in shaping an associated transformation of the agricultural sector. Many of these opportunities can only be tapped with required systemic and policy changes. These, however, need to be calibrated to suit the type of produce in demand and to empower the farmers to supply such demand. From the supply chain managers’ perspective, the systemic changes must cater to the requirements that are specific to the varied kind of produce that needs to be handled.

Pre- and post-independence, when focus was on cotton and grains, agri-markets were termed as assembly points, or zones where farmers would aggregate with their farm outputs, so that the flow of trade was monitored, regulated and taxed.

However, today’s farming eco-system generates surpluses, and while other markets have been liberalised, restrictive regulations have remained in case of famers’ markets. Under this system, the farmers are expected to monetise their produce at a near farm mandi, which has area demarcated market jurisdiction.

This market architecture essentially delinked the farmers from the best

supplychaintribe.com

possible valuation, which typically is seen at terminal destination. This is like forcing all factories to sell at factorygate, instead of being allowed direct consumer access.

The transformation of agricultural economy calls for evolving a new market architecture, one that endows the farmers with the tools to physically communicate their produce, in their name, to transact at terminal markets.

The forward connectivity will also require logistics infrastructure in the form of first mile aggregation hubs, co-located to villages. These would primarily bring immediate and gainful organisation in the post-production supply chain.

But can farmers manage this themselves?

The physical connectivity can be provided as a service, against revenue sharing or other service level agreements with farmers. It is a misnomer to imagine that farmers would manage the entire logistics chain which can run across geographies.

However, farmers will intrinsically be the key beneficiaries from such services. If you can courier a parcel to any location in the country today, why cannot a group of small farmers use services to dispatch their produce to a market location of choice?

Yes, to do so, the farmers will have to collaborate and generate sufficient load at source, so that their production can be transported by most viable mode. To do this, an aggregation hub is required at village level, or one

that covers a few villages. These hubs will also create employment for the rural communities, in jobs that are inherently linked to the core activity of farming. Such aggregation hubs or pack-houses will set off a virtuous cycle of economic growth. Without such back-end organisation, the agricultural eco-system will continue to face chaotic development.

Is it not easy for a farmer to vertically integrate with a food processing factory?

Sure, vertical integration with any agroprocessor is an easy option. And this is typical and already happening. However, their growth is not linked to their immediate effort, but on the growth of the factory they are vertically linked with. The only option is to expand their consumer from one nearby factory, into multiple factories and this again will require back-end aggregation of produce, in enough volumes to supply to far-away demand.

33

INTERVIEW

INTERVIEW produces’ usable life, retards loss of freshness, sustains nutritional value to the maximum and contributes enormously by extending the value chain system beyond traditional regions and limitations. The most phenomenal gain is drastic reduction in physical loss, through organised practices, when compared to the traditional multilayered logistics chain.

How can marketing enhance the reach of perishable food?

In case of high-value foods, such as fruits, vegetables, dairy, meat items, the Indian market is predominantly fresh. Here, the producers also could horizontally integrate, with multiple markets of choice. Especially as here, the markets have a more rapid, near daily, selling cycle. For example, a farmer group in Bihar, should be able to precondition and connect their litchi to terminal markets of Delhi, Mumbai or Chennai, of their own volition. Hence, their growth is not limited to the growth of the industry that they supply into, but by the scope of how they expand their market.

Food wastage has been one of the biggest challenges that the industry needs to circumvent.

How can we resolve the issue?

the marketable life span of whole produce, it also brings organisation and standardisation to post harvest food handling. This ensures that fresh produce is packaged and preconditioned to withstand road stress or damage, promotes modern material handling practices, provides relief from damage due to uncontrolled exposure and safety from external diseases. All of this allows for a larger quantum of farmers’ produce to reach consumers, thereby mitigating food loss. Key to reducing food loss is holistic development of agri-logistics to connect more food with more consumers, be it fresh or processed. All other aspects are secondary.

How does cold chain system maintain the safety and quality of produce at the desired level?

Palletization of a load facilitates safe multi-modal handling, whilst transporting and when in cold stores.

Pallet handling is best done by mechanized means, which ensures quick & easy operations, reducing the loss that occurs due to mishandling.

Cold stores are preferred when they are equipped to handle pallet-based cargoes, i.e. forklift types, roll-on/rolloff ramps, pallet based put away racks, etc.

At the last mile, retail shops also need strengthening to handle cold chain routed fresh produce. In all, the complete chain enhances the

An effective marketing and logistics network require developing an efficient link between an Origin (farm-source) with Destination (consumer-market) - ‘OD pair’. Lack of modern packhouses at points of origin, deflected the existing refrigerated transport and cold storage distribution hubs into the limited role of aiding the marketing of certain processed foods and the fresh imports arriving in the cold chain.

A common example of efficient source level aggregation is the milk pooling or collection point. This is the first step to value-realization though a chain of market linking logistical activities. Post-production activities that safeguard the value of the harvest and deliver the maximum quantity of produce to end-consumers without degradation of quality, would have a positive trickledown effect on farmers’

income.

An effective agri-logistics infrastructure network design is required for perishable produce, at first instance needing source points, as pack-houses to serve as aggregation or pre-conditioning centres, normally developed at village or farm-gate level, to organize an effective farm-to-fork supply system. However, the planning approach should follow an inverse flow from fork-to-farm.

Please highlight the Inverse Approach “From Fork-to-Farm”.

To function in agri-business mode, there is need to adapt to demand triggered supply chains. The farmto-fork connectivity tends to infer, that farmers or a producer will directly interact with the consumer. Adopting an inverse, FORK-to-FARM strategy, means to work out the demand from wholesale destination market, and accordingly work backwards to assess the requirement for distribution space, transport, aggregation at origin and where possible even harvesting and sowing. A well-designed strategy will plan to capture new markets so that subsequent ramping up of the production can be monetised optimally.

Effectively, there is need to work backwards from demand, providing information that can intelligently direct

the physical flow of foods to linked markets. The immediate concern is to connect the produce with as many markets as possible and the business model requires linking the source backward from the target markets to plan and organize a delivery or settlement mechanism after farm-gate procurement. Fork-to-farm strategy means that agriculture, like most other business enterprises is developed with sufficient agility to respond proactively to market demand and associated logistics.

What technologies are used in cold chain?

Technology in cold chain is primarily used to manage activities across the product’s life cycle, most being common to dry warehousing, such as management systems for warehousing, fleet, energy efficiency, tracking and tracing, asset upkeep, trade processes, etc. These include FEFO (first expire-first out) based inventory management viz FIFO or LIFO. The holding environment is also managed at a more precise scale since temperature, humidity, and at times atmospheric parameters (oxygen and other gases) are critical to safe custody. Energy load being higher than conventional warehousing, its use and leakage is also closely monitored.

Mere presence of cold chain infrastructure does not stop food loss.

Food loss occurs primarily because food or food product is not connected to consumption before is perishes. In case of fresh produce, this can happen when the time to reach market is beyond the marketable life of the food item. Most fresh fruits, vegetables, fish, meat do not have a long saleable life in normal conditions. They either should be harvested on demand (as usually in case of meat) and/or have to be sold quickly.

Unless, the selling cycle falls within their natural saleable life, cold chain intervention is required, especially when markets are concentrated across longer time-distance spans.

The cold chain not only extends

34 CELERITY September - October 2019

supplychaintribe.com

35

INTERVIEW Since a breach in the cold chain can impact the integrity of the good under care, monitoring can range from simple data loggers to thermo-chromatic labelling. Besides, cold chain deploys more stringent monitoring of its core technologies, ie., refrigeration, insulation and product packaging. Packaging can range from vacuum-sealed packs to breathable polymers to ventilated cartons. Since fresh produce is liable to external microbial and biological contamination, technologies like ozoning of closed spaces, fumigation, hypochlorite or vapour washes, etc., play an important role. Photocatalytic air recycling is also a technology that can be used to destroy microbes in cold rooms.

Industrial refrigeration technology itself is undergoing changes. Today, cooling systems include vapour absorption, vapour adsorption, peltier based; refrigerants are changing to more environmentally friendly gases.

Essentially, cold chain from its birthing has been about efficient management of the goods under care, staying dynamic enough to counter time distance matrices and maximizing on its inputs.

Can energy requirements for cold chains reduce using superior technology?

All technology-based applications can help reduce energy load in the cold chain. At first step, the insulation is an important barrier to heat load. Secondly, the type of refrigeration can reduce energy load. Technology that hastens operations and minimize breaches in thermal integrity like dock shelters also reduce energy consumption. Similarly,

INTERVIEW

various thermal barriers, automation and efficient facility designs also reduce energy requirement.

On the other hand, alternate energy sources cannot reduce the energy requirement. Usually dual energy sources are used for cold stores and diesel-based systems for periodic and/or transport based systems. At the moment, systems that deploy or hybridise with solar thermal, solar photo voltaic, geothermal energy, along with grid and generator-based electricity serve as energy sources. Capturing of stranded cold, such as during regasification of liquid natural gas (LNG), is another opportunity being explored.

How can companies unlock the potential of investment through structured cold chain implementation from harvest to retail?

In case of food grains and similar commodities, a modern warehouse is a safe supply point for onwards distribution to points of consumption

(food processors, consumers). Since this raw produce is amenable to bulk storage, the lots are stored in bulk format (silos, etc.). The infrastructure in the form of transport and storage for food grains is well recognized and future development is to modernize and follow advancements in storage technology. The required capacities may be reassessed, incorporating stock liquidation cycles.

Modernization of warehousing is needed to extend the holding life of the food grain inventory. This extended inventory holding period, needs to be fruitfully utilised, or else the stock will still perish at the end of holding period.

Along with infrastructure modernisation, efficient stock rotation into markets / distribution system has to be upgraded to ensure that the investment in modernisation has a gainful outcome.

How can we modernize Infrastructure for Agri-logistics?

With rapid technological developments, there is need to modernize our basic post-production infrastructure, especially those infrastructure components that help safeguard value (warehouses and cold chain) and provide an opportunity to spread the supply to suit the demand. The same would also apply to infrastructure that helps to recover value from the non-saleable produce or that makes the produce fit for consumption (processing units). There is need to modernize storage and movement of grains, by moving towards modern silos and containerization. Modernizing the storage and handling can double the

36 CELERITY September - October 2019

usable life of the inventory, though the eventual liquidation to market and PDS/ OWS, etc., will still be needed.

There is a greater need for hybrid systems that share the load with the grid, as well with other renewable energy sources. For large cold stores, the optimal option is to design for use with clean grid energy, to maintain improved viability in operations. In the milk chiller installations, a large number of units have also innovated with gobar-gas (bio gas) based electricity generators. Other possible technologies to generate cooling are solar thermal solutions, vapor absorption based systems and hybrids of electricity source inputs. Thermal storage (PCM – Phase Change Materials) also help reduce the energy risk in bulk milk chillers.

The use of program logic control (PLC) based systems has an immediate impact on energy used and is easily implementable. Similarly, upgrading the insulation of temperature-controlled spaces has high energy saving impact.

The ensuing automation of energy intensive applications can reduce operating costs upto 20-25% in old cold storage units.

Except for rail mode of transport, all other modes cannot be connected to the electricity grid; and the transport on road, ship and air are reliant on availability of fossil fuel. Therefore, technologies that can reduce the energy load in transport are equally, if not more important to the overall food chain.

supplychaintribe.com

What are NCCD’s recommendations to achieve the desired goalpost?

It is recommended that modern packhouses at village level be promoted as a priority infrastructure. The bane of Indian agriculture is not so much the fragmentation of farms, but that the output from the farms remains fragmented. Pack-house units can serve as signalling centres to decide the harvesting activities depending on market linkage. This signalling can be made robust by applicationbased information messaging to the registered farmers. To fulfil existing demand, the access and logistics connectivity for greater market outreach is the immediate priority for gainful production activities.

Integrated pack-houses are created at village level also called farm-gate aggregation hubs and are necessary if the farmers are to expand their reach into markets. A modern packhouse is the nerve centre of the fruit and vegetable supply chain. Initially, pack-houses were used for exports, but increasingly domestic market is also showing preference for good quality fresh whole produce. The main enabler for growth in imported fruits and vegetables is that source farms abroad, have recourse to modern pack-houses, to prepare and initiate the produce for the long travel to reach distant importing countries.

What are the plans to enhance the prospects of cold chain?

First & foremost, cold chain must be looked upon afresh, as a mode that extends the selling range of the produce, and thus expands the farmers’ market footprint. This extended marketing range allows for a higher throughput or traffic to the consumers and a matching growth in value realization and socio-economic development. As global population increases & nutritional security comes to the fore, making environmental security imperative, where cold chain helps to battle these concerns. Cold chain ensures that fresh whole produce reaches gainful end-use and therein mitigates food loss, minimizing thereby the negative impact of agriculture on climate and Earth’s depleting natural resources. Efficient agri-logistics enhances market linkage and justifies efforts to produce more and brings overall growth to agriculture.

During his three decades experience, Pawanexh Kohli has brought key concept level changes to agricultural logistics and the marketing system to guide government interventions and associated policies. Kohli seeks pragmatic & sustainable solutions and contributes as a thought leader and counsels various executive and steering committees of industry & government.

37

RECAP

RECAP

Trending GL BALLY

Leasing of warehousing spaces jumps 31% in 8 major cities in first half of 2019

Image: Biswarup Ganguly

IWAI aims 120MT inland waterways cargo movement by 2023

Inland Waterways Authority of India (IWAI) aims to increase cargo transportation through inland waterays mode to 120MT by 2023 from the current 72MT. IWAI officials said it continues to make crucial interventions that would pave the way for eco-friendly cargo movement on the national waterways. In this endeavor, the National Waterway-1 is important and IWAI is creating necessary infrastructure to facilitate private

investors to rope in the fuel-efficient transport mode.

Adani Logistics, as part of a pilot project, is carrying the largest container cargo in the NH-1 from Haldia to Patna.

Several cargo owners including PepsiCo, Emami Agrotech, IFFCO Fertilisers and Dabur India have already come on board inland waterways. IWAI has put a “robust ecosystem of fairway, berthing, pilotage, river information systems and night navigation facilities on river Ganga”, IWAI officials said.

“Maintenance dredging is being carried out on the NW-1 to ensure the least assured depth of three metres,” they said.

A Rs 517-crore multimodal terminal (MMT) at Haldia is being readied, while IWAI is likely to deliver a Rs 281-crore MMT at Sahibganj in Jharkhand soon.

Google pledges carbon-neutral shipping by 2020

38 CELERITY September - October 2019

According to the report, third-party logistic players contributed close to 56% of total absorption during H1 2019.

On supply side, about 11 million sq ft space was added in H1 2019, led by Mumbai, Chennai and Ahmedabad. "Domestic corporates drove demand with a share of about 85% of leasing as compared to about 67% in H1 2018," said Jasmine Singh, Executive Director, Advisory and Transaction Services, CBRE India.

On outlook, CBRE said that the logistics sector is experiencing unprecedented structural shifts in the form of automation, leading to blurring of lines with the retail sector, transformation of supply chains and growing investments. The trend of e-commerce platforms owning and operating their own facilities will result in more built-to-suit facilities, thereby taking off some “pure” leasing from the market.

Alternative pallet market grows 3%

in its distribution network, with air freight a significant contributor. As a result, the company has been upgrading emissions standards for its shipping partners and transferring more freight to ocean and rail shipping modes.

The market for alternatives to standard wood pallets is growing, rising by 3% year-over-year in 2019, according to a new report from Future Market Insights (FMI). Ecofriendly molded pallets can not only reduce the supply chain’s environmental impact but could save costs as they are lightweight and more efficient to ship and recycle than traditional wood pallets. According to the FMI report, pallet manufacturers are increasingly becoming stakeholders in the supply chain sustainability movement and are exploring ways to convert ‘wood waste, damaged logs, and even agriculture residues into molded wood pallets’ that are lightweight and custom fit for carrier loads.

While cutting down on timbre use, alternative pallets can be made more cheaply in smaller sizes, stack more efficiently and require less truck space to ship, which saves on logistics costs.

Furthermore, Ismail Sutaria, a principal at FMI, said, they are a far more sustainable option for one-time use, allowing endusers in the supply chain to recycle them instead of loading empty wooden pallets back onto trucks. The reduction in the number of trucks and return trips cuts down on fuel costs and is an added sustainability benefit.

supplychaintribe.com

This is now the future of the pallet industry and we are seeing more and more logistics and warehousing firms in Asia Pacific and other emerging markets increasingly seek out molded pallets, as they look to leapfrog past the traditional pallet model.

Image courtesy: Nilkamal Ltd

Google is committing to carbon-neutral shipping "to and from customers" by 2020 and to recycled materials in 100% of its products by 2022. The tech giant plans to achieve this by increasing the amount of hardware shipped via ocean freight (as opposed to air freight), which has already brought per-unit emissions down by 40% between 2017 and 2018, and by purchasing carbon credits from third parties.

Google's switch to ocean shipping marks progress as ocean freight is far less carbonintensive than air freight, emitting between 3.0 and 7.84 grams per ton-km of carbon compared to 435 for air, according to data from the World Shipping Council.

Other major firms have switched shipping modes to reduce their supply chains' carbon footprint as well. L'Oreal has committed to reducing its transportation emissions by 35% by 2030. In addition to reducing SKUs and taking other measures, the company found 1% of product weight shipped accounted for 30% of emissions

Leasing of warehousing spaces went up by 31% to over 13 million sq ft across eight major cities in the first half of this year, while investment of more than US$200 million was witnessed in the industrial and logistic real estate segment, according to CBRE. The demand for warehousing/logistics space was driven by third party logistic firms, which absorbed 56% of the total space. Mumbai, Chennai and Bengaluru accounted for more than 60% of leasing activity.

Logistics leasing in the country recorded a growth of 31% on a yearly basis, crossing 13 million sqft. The cities tracked in the report are – Delhi-NCR, Mumbai, Chennai, Kolkata, Bengaluru, Hyderabad, Pune and Ahmedabad. "We expect logistics leasing activity to strengthen owing to consolidation/ expansion by occupiers," said Anshuman Magazine, Chairman and CEO - India, South East Asia, Middle East and Africa at CBRE.

39