Supply Chain Tribe by Celerity March - April 2022

SUPPLYCHAINTRIBE.COM March - April 2022 Volume 6 Issue 2 For private circulation only

THE ‘COLD CHANGE’ MAKERS The challenges and achievements of cold chain in the food and pharma value chain, firsthand account from experts Mr. Asheesh Fotedar, COO, NCCD, shares government’s strong thrust towards enhancing the cold chain infrastructure in the country

CELERITY WEBINAR SPECIAL

‘NEXT FRONTIER IN SUPPLY CHAIN VISIBILITY’

Captivating insights on the impact of visibility on business success in the pre & post Covid era

CONTENTS

March - April 2022 Volume 6 Issue 2

10 | COVER STORY

The ‘Cold Change’ Makers Always considered as laggards in terms of technology adoption, Indian cold chain segment proved to the world that small, yet meaningful changes can reap ‘transformative’ results. While much more remains to be achieved, our Cover Story unravels the hardships that food and pharma companies faced during pandemic and how they converted those challenges into opportunities.

Here’s an ode to these ‘Cold Change Makers’…

28 | SPECIAL REPORT

INTERVIEW 06 | Creating

a ‘FAB’ Future

Gaurav Davda, Head – Corporate Finance & Strategic Initiatives, Jindal Worldwide Ltd., shares Jindal’s Re-use and Re-cycle philosophy.

22 | Equipping

Growth

Asheesh Fotedar, COO, NCCD, shares, “The government’s initiative of incentivising the cold chain sector is one big step in pushing the growth of cold chain infrastructure.”

Next Frontier in Supply Chain Visibility Our recently held webinar, ‘Next Frontier in Supply Chain Visibility’, proved to be a great eye opener for companies across the spectrum in realising the potent benefits of Visibility and ways to empower processes & systems to bring about an overall change. Excerpts of the webinar through this Special Report…

37 | EVENT RECAP

SIOM Nashik’s ICOSCM – Decoding Next Generation Supply Chains SIOM, Nashik’s ICOSCM event provided an insightful display of extensive knowledge from across the globe.

42 | PERSPECTIVE

Revitalizing the ‘Nerve’ of Businesses The panel discussion, ‘Omnichannel Supply Chain,’ hosted during SIOM Nashik’s Tattv’22, deciphered how they circumvented the most unprecedented times and emerged successfully to not only survive but also thrive. A perspective of their thought-provoking discussion…

40 | The

‘Goodness’ Affair

Avinash Dhagat, Vice President – Operations, Honasa Consumer Pvt. Ltd., talks about three supply chain metrices that matter in CPG products.

46 | TRENDING GLOBALLY News & Views from around the globe

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.

2 CELERITY March - April 2022

Make Your

Supply Chain Intelligent Switch to our Multimodal Supply Chain Visibility platform to improve profitability, delight customers and grow your business.

to know more visit : www.intugine.com Indent Management

Control Tower

PTL/Consignment tracking

Vehicle Allocation & Planning

Track & Trace

Ocean Tracking

Inplant Tracking

E-POD

Rail Tracking

reachus@intugine.com + 91 6366436298

The Cold Players Dear Readers, With manufacturing and trade becoming increasingly global, any small – big incidents create a huge impact in the global power shifts between countries. These power shifts impact trade and supply chains the most. Now the Russia-Ukraine crisis is set to severely impact global trade flows, adding to the uncertainty faced by Indian exporters. With tough sanctions against Russia, and western powers insisting on sanctions on Russia-friendly countries too, the World may see a new divide and a Cold War 2.0.

With enough written about the impact of Coronavirus, it’s now a wait and watch for the consequences that the Russia-Ukraine war will have on India. On a very personal note, these global incidents should encourage Indian businessmen to reduce global trade dependencies as much as possible and work towards being a self-sufficient nation.

Focusing back on India, the summer months are upon us, and all eyes are on the cold chain industry.

Read on about the progress of the cold chain sector.

Our recently held webinar, ‘Next Frontier in Supply Chain Visibility’, saw a huge online participation. If you missed it read all about the firsthand experiences of the panelists as they implemented real-time visibility platforms across global value chains.

We have been steadily increasing the content pages in our digital version and we hope you are finding the content relevant and helpful.

On that note, wish you a prosperous new Indian Financial Year in April and may be achieve all our KPIs and targets.

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

4 CELERITY January - February 2022

INTERVIEW

CREATING A

‘FAB’ FUTURE “Irrespective of the business environment, the textile industry has always faced challenges pertaining to environmental sustainability. This is an inevitable issue for all industry players. However, the time is now apt for finding solutions through technology and innovation. Jindal, being a Denim fabric manufacturer, is at the forefront of Reuse and Re-cycle philosophy. We re-use commonly discarded fabric waste and blend it with traditional raw materials to produce denim fabric, which effectively reduces the impact on the environment. In addition, we are shifting to a renewable energy source for the functioning of our units. The contribution of sustainable products is continuously increasing in our portfolio, and we believe that such practices from every player in the sector would go a long way in mitigating the major challenge faced by the industry,” emphasizes Gaurav Davda, Head – Corporate Finance & Strategic Initiatives, Jindal Worldwide Ltd., during an interview…

Can you tell us the transformation journey of Jindal Worldwide?

Jindal Worldwide Ltd. began its course with fabric trading and steadily expanded into weaving, processing, and home textiles. Jindal went public in late 90s early 2000s, and since then, has continued to increase the scale and range of its operations. Today, Jindal Worldwide is one of the largest denim exporters and manufacturers. By capacity, we are the largest manufacturer of denim in Asia, and third largest globally. The Group specializes in manufacturing premium quality denim, printed shirting, dyed yarn, and bottom weights. Jindal does its spinning, weaving, and processing and hence the factories are all extremely well-equipped with the right types of machinery. In addition, we invest in laboratories to conduct textile testing and R&D. Jindal has traversed a long threedecade journey with its dedicated family of a strong workforce. As a company, we believe that growth is constant and that effectively means the journey never ends.

6 CELERITY March - April 2022

We will continue to strive harder to make our mark.

Textile industry post a brief slowdown is set to break the shackles and emerge as one of the highest value contributors to the GDP. What's your views on this?

Textile industry was going through challenging times since last few years.

The pandemic-led lockdown and restrictions impacted the financial health of most players terribly, which resulted in many unorganized players shutting down, which led to mass unemployment.

However, factors like revival in domestic demand and surge in export demand owing to ‘China + 1’ strategy has fuelled the industry with renewed hope. We believe this is not going to be temporary phenomenon and ‘China + 1’ strategy is actually going to provide a major boost to the industry, which has among the highest export contributions and has a major share in employment in the country. The intervention by government

Gaurav Davda is a seasoned Corporate Finance, Fund Raising, M&A and Strategy professional with more than 15 years of experience across multiple sectors. He is an MBA (Finance) from SP Jain Institute of Management & Research (SPJIMR). Gaurav has an enviable roster of investor & corporate connects both domestically as well as overseas. Over the span of his career, Gaurav has been involved in capital raising of more than US$500 mn and M&A transactions worth over US$750 mn. Gaurav has worked across IPOs, QIPs, Private Equity, Mezzanine Finance among other products. Gaurav holds Board level and advisory positions across various organizations both listed and unlisted. Gaurav is an early stage investor as well and mentors young startups and founders in the areas of strategy, fund raising, go to market plans and other organisational matters.

INTERVIEW

The pandemic has led many international players in the textile segment to think of a China plus strategy, which would not have been the case earlier. So, global and domestic brands have already started working on alternatives and with its existing infrastructure, India is a natural investment destination. Having said that, can we replace China completely? Probably no, but we can take a bite, which will be significant for the overall prospects of the Indian textile industry. For a quantum leap, the Indian textile sector must switch gears to export now. That is where the future growth lies. in terms of incentives and schemes will go a long way in helping the industry recover the lost ground.

How has been the performance of textile industry over the years especially the last 18 months?

The textile sector had been reeling under a lot of external stress even before the pandemic. The industry was facing severe cost and cash flow pressures, which was accentuated by the pandemic. However, past few quarters has seen improvement in EBITDA margins and cash flow. The working capital issues have started getting resolved and the organized players are now aiming at capacity addition in different verticals to capitalize on the export demand. This is where the future of the industry lies now. If we can continue the current momentum, then the Indian textile sector will be one of the top players in the world in the next few years.

How is Jindal Worldwide poised to position itself in the sector?

In a scenario where domestic demand is robust and exports are surging, we are

supplychaintribe.com

well poised to capitalize on the growth opportunities. In the last few years when the sector was facing challenging times, we prepared ourselves in terms of capabilities, capacities, and cost structure. Yes, we were going through period characterized by low margins and high capex costs, but we were confident that the investment and strategy that we are undertaking will provide us an ample room to outgrow the industry growth given the recent strength in demand both domestically and on the export side.

Even when our margins were low, due to our strategy, we were able to degrow less compared to industry. In the next 24 months, we are looking at a 20-25% capacity growth which will be primarily fuelled by the Company's strategy to expand its spinning capacity. The entire capex cost over next two phase will now go into value-added products primarily in denim, which will primarily help in boosting our margins. Our long-term vision is to be a one-stop fabric solution supplier for all the major brands.

Hence, it is crucial to add capacity with differentiation so that our customers have more options when they work with

us. It will help us to be cost-conscious and chart sustainable growth.

What are the USPs that set you apart from others?

Quality, trust, and diverse product range are the USPs, which sets us apart from our peers. Quality has been a constant companion of our brand while the trust fuels life into relations and has maintained & extended our relationships with our partners and loyal customers.

With a complete perspective of the industry and an in-depth experience of three decades, we take a holistic approach to offering multiple products on a single platform. Dealing with the widest range of fabrics, designs (600-700 SKUs), yarn (being vertically integrated) it becomes possible for us to innovate solutions and respond quickly to customer demands.

What are the innovations achieved

by Jindal Worldwide in the recent times?

We have added higher end denim fabric to our product mix, which has increased our realizations and will aid in increasing our margins. Additionally, we have

7

INTERVIEW

strengthened our in-house R&D team to work on textile chemicals and product innovation. This is yielding very strong results.

How did you tide through the pandemic?

The past year has been challenging and threw many organisations, including us, off balance. Some businesses have it easy adapting to a 'Work from Home' setup, but for many like ours in the manufacturing sector, it was an arduous task at first.

However, we didn't have the luxury of time and had to act swiftly to streamline work processes while working remotely.

We made sure all staff mandated to 'Work from Home' had resources to do so. We quickly strengthened or internal software to monitor attendance and work progress remotely. In addition, we started learning programs for all eligible employees to help them sharpen their skills. We also conducted various online sessions for employees to keep them updated on protocols and prevention measures about the pandemic. We are still conducting these sessions.

What are the learnings that you achieved during the Covid-19 pandemic?

The pandemic has been nothing like any crisis that the world has faced so far.

In these times, we realized that what matters the most is the physical and mental well-being of our employees.

To help our employees deal with the adversities of the COVID-19 infections, we have dedicated a helpline and

8 CELERITY March - April 2022

initiated programmes to help them destress. Also, every other weekend, we plan some virtual engagement activities for our employees. These are a few things that we will continue to implement even after the pandemic is over. The other learning, which probably every other industry has is to ensure proper manufacturing & supply chain to deal with such disruptions.

How has been the supply chain network in the last one year and how have you streamlined the same?

When the COVID-19 pandemic struck, it brought with it several unseen challenges in terms of lockdown and disruptions.

Raw material prices surged and caused a dislocation in the global supply chain.

To overcome this, we relied on our longtested strengths of using technology and our extensive network to steer past the rough quarters. What worked to our advantage was that we were not that dependent on imported raw materials and had lesser exposure to exports.

However, in the past year or so, we have not only streamlined our supply chain domestically but have also increased our export share.

How is the export market going on as far as your products are concerned?

Three years ago, export contribution to our total revenue was almost zero. However, we changed our strategy and started to focus on export markets post 2018. This was because we felt that it offered higher margins owing to subdued domestic demand. After the pandemic struck and

with global sentiments shifting towards ‘China + 1’ strategy, we started getting better value for our products and higher inquiries. As of second quarter, we have exports booked for next two months and contribution to total revenue is currently at around 25%. But we believe that China + 1 strategy is likely to pan out over a longer period and we expect our export contribution to jump to 40% over next two years. On the international front, we have collaborated with clients in north and South America, Europe, Africa and Middle East Asia. With a growing pool of customers our client dairies include the best brands in the country.

What are the challenges that the industry is facing and how do you plan to contribute to mitigate the same?

Irrespective of the business environment, the textile industry has always faced challenges pertaining to environmental sustainability. This is an inevitable issue for all industry players. However, the time is now apt for finding solutions through technology and innovation. Jindal, being a Denim fabric manufacturer, is at the forefront of Reuse and Recycle.

We reuse commonly discarded fabric waste and blend it with traditional raw materials to produce denim fabric, which effectively reduces the impact on the environment. The waste generated is treated, neutralized, and reused on a regular basis. In addition, we are shifting to a renewable energy source for the functioning of our units. The contribution of sustainable products is

INTERVIEW

If India has advantage in fabric manufacturing, Bangladesh excels in garment manufacturing, while Vietnam competes on both fronts. China, though, has much larger share of export pie for fabric and garment both and hence, there is no way India or Bangladesh, or Vietnam can fully compete with China soon, but we can keep pecking away at their business. continuously increasing in our portfolio, and we believe that such practices from every player in the sector would go a long way in mitigating the major challenge faced by the industry.

Would you like to tell us about Gujarat as the investment hub? What are the strategic advantages that it offers?

Gujarat is an investor's paradise. It gives resources, facility and talent to any sector looking to call it home. The conducive industrial policies and exposure to global markets and world-class technology make it a desired destination for businesses worldwide.

Where can we the industry headed from here on? How can the industry aid in India's 'Make in India' movement?

The textile industry is one of the largest employers in India. It has immense potential in not only creating livelihoods but also adding to the country's growth story. With PLI schemes for textile manufactures and the establishment of mega textile parks, the sector will be a driving force in realising the "Make in India" and "Atmanirbhar Bharat"

supplychaintribe.com

initiatives.

How are you planning to compete with Chinese players as it's by far one of the biggest markets?

The pandemic has led many international players in the textile segment to think of a China plus strategy, which would not have been the case earlier. So, global and domestic brands have already started working on alternatives and with its existing infrastructure, India is a natural investment destination. Having said that, can we replace China completely?

Probably no, but we can take a bite, which will be significant for the overall prospects of the Indian textile industry.

For a quantum leap, the Indian textile sector must switch gears to export now.

That is where the future growth lies.

Also, if one were to look at various markets outside China, they have their own competence. If India has advantage in fabric manufacturing, Bangladesh excels in garment manufacturing, while Vietnam competes on both fronts.

China, though, has much larger share of export pie for fabric and garment both and hence, there is no way India or Bangladesh, or Vietnam can fully

compete with China soon, but we can keep pecking away at their business.

What are your future plans?

We are currently working on expanding our capacity in Denim and other verticals in a phased manner. The two-phase capex is likely to cost around Rs700 crore and is expected to spread over next three years.

As far as denim goes, we are currently having capacity of 140 mn meters per annum (MMPA). We are planning to add 20 MMPA in 2022 and another 30 MMPA by 2024. Similarly, we are expanding our spinning capacity. In yarn, currently 30% of our capacity is for captive use.

However, due to higher cotton prices, we are in the process of increasing the share of captive usage to 70% by next 2-2.5 years. We believe, this would help us in reducing our import cost and thereby result in higher margins. For the capex, we are in the process of raising funds.

The capacity expansion will be funded by both – internal and external sources.

We are evaluating various options. This entire capex is expected to be brownfield in nature and hence the capital cost saving would be substantial.

9

COVER STORY

The

‘Cold Change’ MAKERS

10 CELERITY January - February 2022

COVER STORY

Unlike other industries, the impact of Covid-19 pandemic has been extremely positive with industry leaders quickly getting together and embracing tech-led innovative best practices. At a time when nation was reeling under lockdown, it was an impeccable cold chain infrastructure that made it possible to ensure that the fruit & vegetables, pharma products and other perishable goods reach the last mile with the utmost freshness and integrity. When the country launched nation-wide roll-out of Covid-19 vaccination, it was a sound cold chain system that again came to the rescue. But what made the Indian cold chain network on a ready-to-roll stage in times of adversities? Well, it was a perfect confluence of all the stakeholders – cold chain operators, government machinery and technology solution providers – that made the IMPOSSIBLE POSSIBLE! Always considered as the laggard in terms of technology adoption, Indian cold chain segment proved to the world that small, yet meaningful changes can reap ‘transformative’ results and our successful vaccine program has been a proof of it covering the length & breadth of the country. While much more remains to be achieved, our Cover Story unravels immense hardships that companies faced and how they converted those challenges into opportunities in no time and sustained the test of times. Here’s an ode to these ‘Cold Change Makers’…

supplychaintribe.com

11

COVER STORY

Vickram Srivastava, Head of Planning – Global Supply Chain, Sun Pharma

Rajeev Ranjan, Chief Operating Officer, McDonald’s India – North and East

Rahul Agarwal, Managing Director, Kool-Ex Cold Chain Ltd.

Mihir Mohanta, General Manager (SCM), Mother Dairy

Debashis Dutta, Director – Logistics and Industrial, JLL

Dr. Anju Bharti, Dep of Management, MBA, Maharaja Agrasen Institute of Technology, Delhi

COVID-19 PANDEMIC IMPACT ON COLD CHAIN Vickram Srivastava, Head of Planning – Global Supply Chain, Sun Pharma: Though the overall logistics sector (ambient and cool/cold chain) has been under stress in the last two years with unprecedented new challenges the sector has seen (availability-to-serviceabilityto-reliability-to-spiralling cost), the overall impact has been positive on the whole pharma logistics sector with the players rising to the occasion to ensure critical life-saving drugs were available to cater patient needs. With the launch of multiple vaccines over the last one year, the cold chain segment has seen further investments and developments along

12 CELERITY January - February 2022

with latest technology adoption.

Rajeev Ranjan, Chief Operating Officer, McDonald’s India – North and East: Covid led lockdowns have disrupted the supply chain of low shelf life products, leading to a significant increase in the (substitutable) demand for frozen packaged food. The global supply chains have faced reliability challenges due to COVID induced labour shortages, shipping line delays and product availability. This has pushed intermediaries to create cold chain distribution infrastructure to support the growing demand. The agility in the

supply chain needed to meet the needs of business in current VUCA environment has speedily driven cold chain integration to build real-time readiness to make stocks available to shelf/consumers swiftly.

Producers, farmers, manufacturers have seen the disruption of formal distribution structures. As a result, they have started investing in primary storage to realize the value of their proceed and to support temporary storage of chilled/ frozen products coming from retail due to covid led lockdowns. The need to trace food sources and create visibility during movement has become a critical part of

COVER STORY the food value chain. This has necessitated technology to play a vital role in the adoption of cold chains. The implications of these changes are significant to the business and call for government/policymakers/regulating agencies to support businesses by reducing food wastes through sector-specific interventions.

Rahul Agarwal, Managing Director, KoolEx Cold Chain Ltd.: The COVID pandemic has resulted in challenges and opportunities. The cold chain segment is manpower intensive.

In fleet operations, the driver is the key and the pandemic led to a lot of challenges on driver safety, driver availability and initial bottlenecks on free passage of trucks. Since the driver has to move across the country, he is the most impacted in term of risks. Hence his safety, monitoring & checking was the key. We took this challenge as an opportunity and continued 100% driver availability on our fleet, by taking care of driver safely and giving them Covid Cover and additional incentives. Many competitors were not able to achieve this, and this helped us add more volumes/ clients and better turnaround of our fleet. Additionally, being the market leaders for Covid Vaccine movement, we were able to further enhance our vehicle turnarounds, revenues, profits and enhance our brand value. The COVID-19 pandemic also led to the delay in construction of our upcoming cold chain facility in Khopoli and this is now expected to go live in January 2023.

Mihir Mohanta, General Manager (SCM), Mother Dairy: On the demand front, Covid-19 increased the demand of the frozen products particularly the snack foods.

Since the restaurants, hotels & various food junctions were shut down, the home consumption of these products got a thrust. The market value of the Indian frozen foods, which was at Rs74 billion in 2018 increased to Rs105.6 billion in 2020. Until 2019, it was growing at 15%; in 2020, it had an unusual growth of 23%, which can be attributed to changing consumer behaviour during the pandemic. The criticality of the cold chain was strongly realized when the government wanted to reach out to the

supplychaintribe.com

remote areas with Covid-19 vaccines. It did make a serious planning effort to make it happen. The cold supply chain, therefore, got appropriate attention, and got the requisite fund allocation for improvements.

On the food supply related cold chain development, the government is supporting the creation of infrastructure facilities along the entire supply chain viz. pre-cooling, weighing, sorting, grading, waxing facilities at farm level, multi-product/ multi-temperature cold storage, CA (Controlled Atmosphere) storage, packing facility, IQF (Individual Quick Freezing), blast freezing in the distribution hub and reefer vans, mobile cooling units for facilitating distribution of horticulture, organic produce, marine, dairy, meat, and poultry, etc. The scheme allows flexibility in project planning with special emphasis on the creation of cold chain infrastructure at the farm level. The component is demand/entrepreneurdriven, for which government assistance in the form of credit linked back-ended subsidy is available at the rate of 35% of the project cost in general areas and at the rate of 50% of the project cost in hilly and scheduled areas.

Debashis Dutta, Director – Logistics and Industrial, JLL: Cold chain is one of the most specialized and essential service requirements for perishable and other temperature sensitive cargo. The need of maintaining temperature and other environmental parameters, such as humidity, for select cargo is to maintain its value and use.

In cold chain segment, transportation and storage are the most important sub-segments, which need special focus to maintain controlled environment.

Accordingly, COVID-19 changed the supply chain pattern of different commodities within hinterland locations.

Cold chain operators have adopted decentralized model of storage to optimize their efficiency. The operators have initiated to expand the storage capacity to cater to their projected peak-demand in metro cities and new destinations for establishing supply chain network in tier-II locations. From commodity perspective, Covid-19 had a positive impact with rising demand of medicines and vaccine delivery, achieving

standard quality for storage/handling of consumables, predominantly in frozen food segment, which are distributed through e-commerce/3PL players.

Dr. Anju Bharti, Dep of Management, MBA, Maharaja Agrasen Institute of Technology, Delhi: The lockdowns due to covid-19 pandemic and the other kinds of restrictions imposed everywhere actually forced many businesses to revise their business models and switch to home delivery solutions. There were requirements of variety of household products mainly the edible products. That actually called for effective cold chain logistics solutions (D2C strategy). Along with the edibles and semi-frozen food, the cold chain was also used in the case of specific kind of medicines/vaccines to cater to chemist and the hospitals without spoilage under effective cold chain logistics solutions. There was only need to make awareness of D2C facility provided by the company maintaining the temperature of edibles wherever required. A PCM (Phase Change Material) based solutions has been introduced for temperature control. Research shows that severe disruption through the pandemic is driving enterprises to make their supply chains more resilient, collaborative and networked. The movements of goods from factories to CFAs and from there to distributors were taken care of quite well but most of the last mile delivery was either done in ambient conditions or with unsafe, unsustainable solutions resulting in product spoilage and wastage. There was a great challenge for India to produce vaccines to inoculate every citizen while ensuring delivery of vaccines without any spoilage. This was made possible only using effective cold chain solutions.

The pandemic situation led home delivery segment grow at a 65%. The actual cold chain penetration in this market is less than 40% in the food space and is going up with increased awareness of the consumers. According to various research reports, over the next five years, there will be increased focus on vaccine distribution, food processing will show peak, and retail & food delivery markets for perishables will also show increasing trend each year.

13

COVER STORY

EVOLUTION OF COLD CHAIN AND ITS TRANSFORMATION Vickram Srivastava: With e-pharmacy catching up, this segment is poised for further developments. Blockchain, latest track & trace technology for real-time tracking, and the advent of drone service is just the tip of iceberg, and it is expected to completely transform this sector and in a very eco-friendly sustainable fashion.

New developments on cool chain storage and transport technology in terms of portable cool chambers and dark stores with cold chain capabilities are expected to evolve to meet and serve the needs of patients and consumers.

PIC COURTESY: UNICEF

Rajeev Ranjan: There is significant effort to move towards a Green Cold chain, reducing carbon emissions, moving towards carbon neutrality by siting at optimal environment-friendly locations, efficient layouts, building structures with high thermal efficiency, highly efficient

14 CELERITY January - February 2022

refrigeration systems, water savings, use of renewable energy). IT is making inroads to drive a) end-to-end visibility from “farm to the point of consumption”; b) reduce order to fulfilment lead time.

IOT/ sensors help monitor efficiency and shelf life parameters to drive efficiency across the value chain. With a click, one can now get live updates of any temperature abuse across the chain irrespective of geography. Advent of prefabricated structures for cold chain, advancements to efficient vehicle designs, CNG-based systems, smaller vehicles (for intra-city movement), passive cooling/ Eutectic systems that work on biomass or Solar for precooling and distribution are few other areas.

Rahul Agarwal: Over the years, the need for quality cold chain integrated solutions has been growing. Kool-ex has

added warehousing to its portfolio and our first integrated cold chain facility is under construction at Khopoli, which will house 20000 pallets and will cater to the entire spectrum of cold chain users.

With our lead position in cold chain trucking & warehousing, we will emerge as one of the largest integrated cold chain solutions providers in the country.

Mihir Mohanta: According to a report, the frozen foods market in India was valued at Rs85.27 billion in 2019 and is expected to reach Rs192.96 billion by 2024, expanding at a CAGR of ~17.74% during the same period. In 2017, the cold storage industry was estimated to be worth Rs952 billion and has been projected to grow up to Rs2,293 billion by 2023. That’s over 120% in just five years. This shouldn’t come as a surprise, considering the rate at which India is

COVER STORY To ensure the adoption of digitalization in the cold supply chain and end-to-end visibility, all significant players in this segment are investing heavily in IT systems. This is a value addition for a customer and helps in food safety compliances. The advancement of artificial intelligence (AI) / Machine Learning (ML) systems to predict demand and automation of cold warehouses is a key focus area.

Passive cooling systems are also gaining traction in the fruit & vegetables (F&V) segment. growing as an exporter of food products.

As per the government report, on Oct 2012, over 6,488 cold stores with a capacity of 30.38 MMT were available. In September 2020, the numbers increased to 8186, and the capacity grew to 37.425 MMT. These are primarily meant for storing perishable horticulture produce like fruit & vegetables. A vast majority of these cold storages are owned by private players.

According to government data, the state-wise distribution of cold storages as of 2020, the north-eastern states noticeably had the lowest number of storage units and capacity. This is because 68% of India’s cold storage capacity is being used for storing potatoes, while 30% is being taken up by other multi-commodity cold storage like meat, seafood, dairy products, fruit & vegetables, and pharmaceuticals. The geography-wise government’s focus today is on northeast states & hilly and scheduled areas. On the type of cold store, multi-commodity stores are being promoted.

Debashis Dutta: India is one the leading country in consumption and production of different environment sensitive cargo including perishable cargo. This is due to the country’s geographical spread, agriculture linked economy and large population size. Historically, the storage and handling of these cargo, which are environment sensitive, stored and handled by local service providers. From 2010 onwards, multiple organized cold chain operators had taken initiatives to capture market attributable to cold chain segment. Though very nominal, these organized players could achieve ~10-15% of the market share in this unorganized and scattered segment till 2020. The Covid-19 scenario escalated to

supplychaintribe.com

re-visit and re-think the existing supply chain pattern and to frame strategy to capture market share from unorganized service providers of the segment. During last two years, the industry was shifted from more unorganized segment to palletized segment because of rising awareness, quality consciousness and dependency on e-commerce platforms in consumption pattern. All major cold chain operators in India are on their rapid expansion mode and few global players are also exploring suitable opportunity to enter India’s cold chain market. Apart from direct investment by the cold chain operators, other industries such industrial real estate developers, fund-houses, technology players are also exploring synergies to act as catalyst to be partner in this rapid and unexplored investment expansion.

Dr. Anju Bharti: The first cold store in India was reported to have been established in Calcutta in 1892.

During 1970s, this sector evolved as multiproduct cold stores, which began in Maharashtra and other states of India. It was mainly used for preserving potatoes initially. Later, in 1990s, it was followed by development in the food processing sector and freezing sector across the country. There was the huge requirement of cold storage. This need led to the shift of cold storage to the concept of cold chain. The motive was to preserve edibles from getting decomposed maintaining the entire food chain from farm to retail. After the globalization during 1990, the introduction of a wide range of sectors had led to favourable growth of the economy in the country.

Many companies introduced popularized frozen food varieties such as frozen peas, corn, mixed vegetables, okra, mango pulp, mango slices and dices, etc. This

concept was later followed by other private players and this process is still on even in the current scenario. Apart from the above normal frozen food varieties, they also came up with Ready-To-Eat (RTE) products like frozen parathas, samosas, etc., to serve the growing needs of customers.

The recent trends in cold chain industry in India highlight that apart from multiproduct cold stores, new types of cold chain facilities were also introduced such as Controlled Atmosphere (CA) stores, multi-purpose cold stores for storing multiple commodities, pack houses with processing and pre-cooling facility and ripening units. The potential is vast for frozen food production in the country and distribution facilities for the refrigerated foods. Food Distribution Centres (DCs) are designed to provide a variety of services including handling fresh, frozen, and even non-refrigerated foods, both in the veg and non-veg category. Refrigerated transport is an important link in the cold chain and has a great scope for increase in numbers. There is a potential for further development in cold chain management which are as follows: • Reefer vehicles: Existing vehicles – 10,000 nos. Estimated requirement, 61,800 nos. Hence the estimated gap is 51,800 nos.

• Ripening chambers: Existing – 900 nos. Estimated requirement – 9,100 nos. Hence, the estimated gap is 8,200 nos.

It is also a matter of experience that some of the existing cold stores are nonfunctional, and many others are based on old and outdated technology. These certainly must be upgraded with the modern technology and this itself is a huge business opportunity.

15

COVER STORY

CHALLENGES FACED AND MANAGED WITH GRIT Vickram Srivastava: ‘Track and Trace’ has been a pertinent challenge that the cold chain industry has been facing for years. Though the technology has been around for a few years (active RFIDs, active data loggers with real time information transmission) to track and monitor the cold chain integrity end-toend, its large scale adoption has been a challenge due to associated high cost.

However, with critical vaccine shipment whose effectiveness and efficacy, both, could be compromised with a broken cold chain, I believe keeping the cost factor aside distributors, suppliers and governments will need to do their best to maintain the cold chain integrity. The real challenge will be maintaining the cold chain in last mile delivery: factoryto-patient cool chain integrity.

Rajeev Ranjan: Our immediate and topmost priority was to ensure the safety of our direct & indirect employees and the safety of our consumers. We encouraged our staff to get vaccinated, financially supported the vaccination cost as well as ran a promotion to encourage our customers to get vaccinated. Additionally, we swiftly implemented the Safety Plus program at all of our restaurants to assure our customers that every step of our entire “source-make-deliver-service” chain is 100% safe.

For the safety of our customers & employees, we started contactless ordering in-store. We also started home delivery right at the beginning of the pandemic. Our Drive thru’s are designed to be fast-convenient and have minimal touchpoints. This was recognized and appreciated well by our esteemed guests.

Lockdowns brought huge uncertainty in demand and significant changes in buying behaviour. Accordingly, we activated third-party food delivery to meet our customer’s needs and reduce demand uncertainty led risks.

Rahul Agarwal: The industry which earlier had a fragmented approach is now looking for integrated service providers who can take care of the

16 CELERITY January - February 2022

entire supply chain end to end. There are hardly any known players today who have successfully demonstrated this, in the cold chain segment in India and this throws open a tremendous opportunity for companies looking to provide such services. With our two decades plus experience in supply chain logistics and our lead position in cold chain, we intend to be a market leader in such integrated services.

distance and hygiene.

The Agri-tech start-ups took this as an opportunity. As the physical brick & mortar retailing was constrained, their App-based home delivery models grew multifold. Suddenly, a large section of consumers shifted to home delivery. In order to maintain large scale distribution, the concept of “Dark Store” – a temperature-controlled space, got a boost in the supply chain.

Mihir Mohanta: During the 1st phase of Covid-19, fresh fruit & vegetables market (mandis) was not under any obligation to shut down, as these were considered essential services. But many of the operating middlemen (Adat), commission agents preferred to stay at home out of fear. Some left their operations to be managed by their Accountants (Munims). Consequently, a completely new market scenario emerged. Most mandis across the country operated at around 50% of their capacity. Some were closed completely. Most cash rich Adat/ Commission agents took the back seat, preferred not to operate during these hard times. The Munims/Mashakhors (small traders) /Petty-Adat whose credibility and credentials were unknown, were at the helm of the operation. The worst of it that the Munims/ Mashakhors /PettyAdat lacked the requisite operational credential to make a legal entry into these mandis, as the authorities’ seeked for credentials for entry. Hence, had troubles at security-checks.

Many of the states decided to shut down the local mandi, weekly bazaars or the rayatu (farmers) bazaars to avoid crowding. Small traders also failed to reach to such places in the want of the public transport. As a result of this, the consumer dependence on organized retail and e-commerce surged up dramatically.

Many of these organized players were quick to adopt the sanitization practices and restore their operation fast. Some of them marketed the hygiene features as their offerings to re-assure the customers. Many of the retailers came up with innovative ways to maintain social

Debashis Dutta: Key challenges faced by the cold chain industry was to service peak demand load during Covid period.

Due to restricted movement of goods, supply of labour (predominantly which depends on migrant labor), demandsupply mismatch of commodities in different micro markets, supply of vehicles for transportation. Since Indian cold chain industry is currently under manual or semi-mechanized model of loading/ unloading, storage and handling of cargo, the economic disruption due to covid impacted a lot in terms of cargo handling and distribution. Lack of availability of suitable buyer, disruption in manufacturing process, lesser consumptions during Covid impacted the supply chain pattern. However, majority of the cold chain operated with desired local license / permissions for full day operations during complete lockdown period. To operate in this phase, every operator explored additional security and hygiene arrangement in the facility / transport vehicles at a cost of additional operational expenses. In addition, majority had deployed significant efforts to restructure in operation and expansion strategies to cope with restriction and change in supply chain.

Dr. Anju Bharti: This pandemic has caused widespread concern and economic hardship for consumers, businesses, and communities across the globe. It disturbed the whole network of the supply chain and the logistics industry.

There was the shortage of available workforce and inadequate supply chain infrastructure during lockdown not

COVER STORY

only in India but worldwide. The main challenge was to maintain the cold chain till it gets used (Medicine or Vaccines) or consumed in case of edibles, that too in poorer areas where there was no regular supply of electricity. For example, maintaining temperature of Covid vaccine was a challenge as there were no mechanisms to keep vaccines at low temperatures. There are various ways to cope up with the problem and can maintain the temperature for longer period. For example, various kinds of chilled ice /dry ice/ gel packs, etc. are available.

Normally, companies face many problems with cold chain logistics management, such as equipment breakdown; excessive heat exposure; human errors; damaged goods; and higher cost. Many forms of medication and all perishable foods require proper packaging and cold packs for shipping. The need was to find the right combination ensuring that the deliveries do not end up damaged or spoiled when they reach their destination. Warmer weather offers

supplychaintribe.com

additional challenges when it comes to shipping items that need to stay cool.

For smaller edible orders, different types of Ice packs were used by fresh to home, BigBasket, More, etc., for D2C movement during covid. These included easy Ice plastic Reusable flexible chiller; reusable long lasting Freezer ice blocks; dry pack ice substitute; insulated cooler/ chiller ice special box; reusable hot and cold flexible gel packs; reusable ice packs; and refrigerators, which can also run by inverters.

The greatest was challenge faced during logistics of dispensing the vaccine to the vast population, a task that is extraordinarily difficult to accomplish.

The Indian administration launched the Electronic Vaccine Intelligence Network, a digital platform to manage its entire vaccine stock, logistics, and cold chain tracking of all the country’s vaccine storage levels. The National Cold Chain and Vaccine Management Resource Centre was set up to monitor the process.

Customized refrigerators are being manufactured to meet the demand for

Covid-19 vaccine storage locally. These fridges can hold temperatures at 2-8°C for several days in the event of a power outage. There are other types of cold packs which can provide 24 to 36 hrs. of effective cooling that can guarantee that all products arrive fresh and safe to the customers. These are advanced insulated cold packs, such as Re-Freez-R-Brix™ Cold Bricks; Ice-Brix™ Cold Packs; Tech Pack™ Moisture Resistant Cold Packs, etc.

17

COVER STORY

NEW AGE TECHNOLOGICAL INTERVENTIONS REVOLUTIONIZING COLD CHAIN Vickram Srivastava: Blockchain technology is catching up very fast and one of the early beneficiaries seem to be the logistics sector. It is expected to bring transparency and data accuracy to the sector, especially in the pharma cool chain logistics. Sustainable and carbon neutral initiatives are also expected to catch up along with automated pick and deliver service (AI/ML driven robotics and drones) will be a reality out of a scifi movie in the very near future.

Rahul Agarwal: There is a growing need for integrated technology in the entire supply chain. Additionally, government has mandated the need for QR coding in medicines at the strip level and the order was passed in January 22. This will lead to the emergence of integrating technology

platforms, such as Blockchain. The purpose of such platforms will be to securely capture data at every level of supply chain, right from manufacturing to consumption, in real-time. Koolex is working closely on this and is looking to co-develop Blockchain as an industry product, with several interested partners and will announce its foray into Blockchain very soon. Since majority of food & pharma requires cold chain, this will be a very important tool of the future in these segments.

Mihir Mohanta: As the ordering shifted to digital mode, the consumers’ as well the producers’ data is getting captured.

PIC COURTESY: KOOL-EX COLD CHAIN

Rajeev Ranjan: To ensure the adoption of digitalization in the cold supply chain and end-to-end visibility, all significant players in this segment are investing

heavily in IT systems. This is a value addition for a customer and helps in food safety compliances. The advancement of artificial intelligence (AI) / Machine Learning (ML) systems to predict demand and automation of cold warehouses is a key focus area. Passive cooling systems are also gaining traction in the fruit & vegetables (F&V) segment.

18 CELERITY January - February 2022

COVER STORY Owing to which the science of analytics stared play an enabling role in a big way. Since the consumers were directly interacting in the digital systems, the captured data backed with AI (Artificial Intelligence) started predicting the consumer behavior patterns. Payments to farmers shifted from cash & cheque to DBT (Direct Bank Transfer). The adoption of digital purchases resulted in simplified implementation of traceability systems. The use of barcodes, RFID tags or blockchain technologies gained fast prominence than anticipated. As the labor availability was erratic, there was a greater thrust to use of alternate options like automation & robotics. The pandemic fast forwarded such applications and the intensity of use. However, in fruits & vegetables supply chain, both digital & physital (physical delivery) go hand in hand. Those who were able to synchronize both had a quantum jump in their turnover.

Debashis Dutta: Cold chain industry is known as high Capex and Opex model of development and operation globally. As a result, the industry grew in scattered and unorganized pattern. In India, majority of cold space requirement is serviced by conventional cold storage space (8590%), which do not follow the desired standard and protocols for storage and handling to optimize cost to cargo owners.

Additionally, majority of reefer vehicles are designed without following desired standards for transporting palletised cargo. In this context, technology plays a suitable role to optimize cost through increase in efficiency. For storage destinations, probable technological interventions could be in identification of scale of development, racking pattern, automated material handling system, docking positions, inventory management system, etc. However, interventions of technology in cold storage space are capex sensitive components.

Use of technology has impact of the capex directly. As a result, planning of use of technology at the time of design is very important to optimize capex.

On the other side, there is severe need for inclusion of modern technology in reefer vehicle design in global standards.

Efficient design in reefer vehicle not only optimizes carrying capacity of the vehicle

supplychaintribe.com

but also minimizes risk of disruption/ damages due to mechanical fault during its journey. Use of desired MHE helps to optimize cost of operation, use of renewable energy optimizes cost power, automated inventory management system helps efficient in-box handling system, GPS-driven cargo monitoring system provides real-time monitoring.

However, the initial capex for these modern technologies shall only be viable when a desired level of cargo is achieved in operation.

Dr. Anju Bharti: The technology for construction and operation of cold chain projects has undergone a lot of change over the past few years. In construction of cold chain facilities, PEB structures are now replacing conventional construction practices. Pre-engineered steel buildings (PEBs) are those which are fully fabricated in the factory after designing, shipped to site in CKD (completely knocked down) condition. Use of eco-friendly materials in construction is increasing. Insulated panels technology has largely replaced the old and conventional insulation practice.

Sandwich insulation panels ensure highly thermal insulation properties and high structural strength and are being used for cold stores as well as process halls.

Manual or mechanized insulated doors for cold rooms and docks ensure least energy loss and effective temperature control. Use of eco-friendly refrigerants is now being promoted and practiced taking care of the environmental challenges.

Refrigeration machinery and systems are now designed with high energy efficiency for optimal use of power; thus, reducing operational costs and ensuring minimal water consumption.

As a latest development, Low Charge Ammonia systems are being developed and employed in the cold chain sector and the latest is addition of Ammonia DX systems, which have much smaller refrigerant charge and can have fully automatic operation like the HFC plants.

Cold chain operations are getting more and more automated with state-of-theart control systems. Capacity controls are used with compressors for energy savings. Energy efficient equipment are being used in electrical systems. These include IE2 or IE3 electric motors, LED lighting, alarm systems, PLC systems,

APFC panels and Solar PV panels. Use of renewable energy like solar, wind and other sources are finding their place in cold chain. Innovative products like solar roofs, energy generating systems with use of biogas and cow-dung cakes, etc., are being introduced in the market. The use of solar PV is getting popular, especially where net-metering is available. In material handling and storage systems, various modern storage systems are being implemented like racks for manual loading and unloading operation, racks with reach trucks, forklifts, BOPTs, etc. Software for e-tendering, cold storage management, cold logistics management, IoT sensors and tracking in reefer transport, mobile monitoring of remote operations, etc., are becoming increasingly popular. The upcoming trends that need to be fully embraced by companies are- RFIDs, Wireless sensor networks (WSN) and Internet of Things (IoT); Time-temperature indicators (TTI), etc.

WSN is a combination of sensors, microcontrollers, and RF handsets. These components communicate with each other at a local location. A wide range of WSN is connected through the Internet to act as sensory organs for IoT. IoT is an ideal platform for remotely monitoring and controlling the real-time status of perishable goods across the cold chain to enable the First expiry first-out (FEFO) system. TTIs are simple and inexpensive devices, which indicate the timetemperature history of the products they are applied on. These indicators can be configured on user portals, devices, and vehicles as per your requirements. TTIs can be specially modulated to indicate and correlate a specific food product safety and quality status at any point in the supply chain, thus providing an effective decision tool.

In adopting the latest monitoring, control mechanisms, and automation in data capturing, the Indian cold chain sector has a long way to go. The key to such transformation is to localize the technologies to suit the scale of Indian industries and by creating flexibility in the system to accommodate and modify the elements of complex supply chains.

19

COVER STORY

BUSINESS-FRIENDLY POLICIES – NEED OF THE HOUR Vickram Srivastava: The government is already helping set up logistics corridors and parks around the country and develop key ports (air and sea) to handle cool/cold chain shipments. More incentives and PLI schemes can provide another boost to this developing sector.

Rajeev Ranjan: According to estimates, in our country, ~30% of fresh produce (F&V) is wasted before reaching the consumers on account of post-harvest losses because farmers do not have access to cold chains. Setting up an efficient cold chain is capex intensive and requires government support in providing better avenues of funding and sharing through public and private partnerships.

Currently, most of the cold storage facilities are constructed near cities. To support their adoption in the rural areas and help farmers, land usage guidelines (agriculture to commercial usage) need to be more efficient. Additionally, it would be ideal for incentivizing the usage of passive (Eutectic) cold chains to promote green supply chains. These cold chains can be cost-effective and installed closer to farms.

In addition to the cold chain, supporting SMEs in rapidly increasing fruit & vegetables processing capacities at right locations will help minimize F&V wastage, reduce percentage of costs incurred through cold chain in the total value chain. This will bring muchneeded quality jobs in the rural economy and build capability to serve consumers (including export) looking for nutritious seasonal products around the year.

Rahul Agarwal: The government selectively offers subsidy on agriwarehousing, and this should be opened to all cold warehousing facilities, sector agnostic. Taxes on cold chain equipment, be it trucks, cold rooms, chemicals, panels, etc., need to be relooked at as this sector needs every possible incentive to grow.

Mihir Mohanta: Farm laws had allowed free flow of agriculture produce across

20 CELERITY January - February 2022

states. With the repeal of the three acts, many of the states reactivated old practices. This hinders the free-flow of goods. Similarly, many states re-imposed APMC taxes. As a result of this, there are restrictions on free-flow of goods across the border. The government needs to find ways to address this issue. Ministry of Food Processing Industries is implementing the Scheme for Integrated Cold Chain and Value Addition Infrastructure as one of the components of Pradhan Mantri Kisan Sampada Yojana (PMKSY) with the objective of reducing post-harvest losses of horticulture & non-horticulture produce and providing remunerative price to farmers for their produce. Under the scheme, the Ministry provides financial assistance in the form of grant-in-aid at the rate 35% for general areas and 50% for Northeast states, Himalayan states, ITDP areas and Islands for storage and transport infrastructure and at the rate of 50% and 75% respectively for value addition and processing infrastructure subject to a maximum of Rs10 crore per project for setting up Integrated Cold Chain projects including Irradiation facility. Standalone cold storages are not covered under the Scheme.

Debashis Dutta: Ministry of Food Processing Industries, Government of India, had published a detailed policy in the year 2008 for cold chain sector. The objective of the Scheme of Cold Chain, Value Addition and Preservation Infrastructure is to provide integrated cold chain and preservation infrastructure facilities, without any break, from the farm gate to the consumer. However, this policy needs significant change and amendment focusing large scale development in this sector. Apart from the cold chain specific policy interventions, couple of general policy interventions would have positive impact on future demand of cold chain segment. Some of these are: • Make In India / PLI Scheme to procure global technology and innovation in manufacturing of equipment and installations

•

•

•

•

Encouraging local produces in global marketing through innovative model of marketing Revamping SEZ platform to attract global manufacturers to capture need of Indian market Encouraging integrated logistics infrastructure development in different parts of the country India Rail plan to encourage multimodal logistics operation, etc.

However, policy document cannot resolve the inherent disadvantage in Indian cold chain segment. The actual need of this segment is to bring long term fund for setting up cold storage infrastructure; knowledge and knowhow on global operation to achieve maximum efficiency and enforcement of policy restriction on storage and movement of temperature sensitive cargo.

Dr. Anju Bharti: Ministry of Food Processing Industries (MOFPI) provides financial assistance (grant-in-aid) to the tune of 50% the total cost of plant and machinery and technical civil works in general areas and 75% for NE region including Sikkim and difficult areas (J&K, Himachal Pradesh, and Uttarakhand) subject to a maximum of Rs10 crore.

Further to increase investments and promote entrepreneurship and growth in this sector, the government is offering financial incentives. Throughout the country, states are offering various incentives for smooth setting up of infrastructure to deal with Covid-19 and are now paying attention to cold storage as a vital element in the battle.

The cold chain storage set up in Gujarat is of tremendous significance in India’s vaccine diplomacy and its strategic location provides impetus for the nation to link healthcare infrastructure and renewable energy, and further provide space for setting up of more chains in neighboring states like Rajasthan and coastal states like Goa where storage units can function in a cost effective and environment friendly manner while eyeing a 20% CAGR by 2025.

COVER STORY

FUTURE EXPANSE OF COLD CHAIN INFRASTRUCTURE Vickram Srivastava: The logistics market in India is expected to grow at a CAGR of 10+% over the next 5 years. With the infrastructure creation happening at the same pace and investments from both government and private players, we do not foresee a major challenge in terms of capacity to meet the pharma supply chain demand. In fact, storage at ports and logistics infrastructure (air/road) to handle in-transit movement, is available and capable of handling the load surge.

The real challenge, in my mind, will be last mile connectivity to far-flung locations across the wide geography of the country and how we are going to ensure cold chain integrity of the drugs and vaccine before it is finally administered to the patient. The efficacy and effectiveness of the drug must be ensured by having cold chain integrity across the value chain of the drug supply: factory-to-patient cold chain management.

Rajeev Ranjan: India has a massive shortfall in cold chain capacity considering our geography and diversity of crop patterns. During the early years, cold chain infrastructure was established in a discreet manner. However, the government’s push for an integrated approach has started bearing fruits.

The cold chain segment is expected to grow at a CAGR rate of ~22-23% until 2025 across India, focusing specifically on the pharma and F&B sectors. With convenience and health playing a critical factor in the consumers’ decision-making process, we are witnessing an increase in the investment in mobility. Additionally, movement by temperature control rail racks has been gradually picking pace for cross country movement of frozen food and F&V. With startups venturing into this domain, we expect the packhouses to move closer to farms and farmers getting better realization of their crops. Lastly, with food safety and compliance gaining momentum and an increase in consumer consciousness about food ingredients, we hope to see an increased momentum on the digitalization of the supply chain.

supplychaintribe.com

Rahul Agarwal: The demand for cold chain services is growing rapidly and there is tremendous opportunity for organized players to take strategic positioning. As per estimates, India needs at least half a million ton of additional cold storage capacity and another I lakh reefer trucks to plug the current gap, while demand continues to grow. Consumption in India is amongst the highest in the world and the need for such infrastructure will be directly proportional to the growing demand in consumption.

Mihir Mohanta: There needs to be a shift in focus towards end-to-end cold chain and not just storage. There should be emphasis on modernization of existing stores with better and more sophisticated machinery and equipment. As we move ahead, we will witness setting up of multipurpose cold storages as against conventional single commodity storage.

There will be tremendous growth in modern pack-houses, ripening Facilities, CA storage, reefers, IQF, farm-gate or source point cold storage. Companies will move towards deploying energy efficient technologies and new storage technologies. Alongside, integrated cargo complexes are being planned at major airports in India, which will be equipped to handle all kinds of goods, including perishables.

Debashis Dutta: Indian cold chain industry is currently passing through transformation phase. The transformation is happening in different areas related to cold chain segment.

Palletized cold storage is developing rather than conventional cold space.

There were several instances observed to conversion of conventional cold storage into palletized format in different micro markets. There is a greater awareness on procurement and consumption of cargo quality having environment sensitive impact. Industrial real estate developers and fund houses explore cold chain segment as one of their investment platforms. Knowledge and efficient

investor/ developer/ operators go beyond their local status to diverse geography to create business synergies. Leaders in panIndia cold chain market are exploring the market with improvised supply chain model, various value-added services and efficient handling/ monitoring systems.

However, key deficiency in this segment is enforcement of regulatory compulsion onto the cold chain operators to maintain temperature and other environmental pre-requisites between production point to consumption point and impose restrictions on marketability of any product having damage due to quality deterioration and non-maintenance of cold chain.

Dr. Anju Bharti: The cold chain industry in India is still at a nascent stage, which makes it one of the promising fields in the warehousing and logistics industry.

Though there is industrial shift towards a more integrated cold chain network and adequate cold storage facilities, the industry is still reeling under a deficient cold chain infrastructure. Without the preconditioning centers, the produce cannot be readied for the cold chain, and without transport, there are breaches in integrating the movement across the cold chain. Thus, large investments need to flow into rural India and the focus should be to develop and create new packhouses with associated transport capacity at the village level.

21

INTERVIEW

EQUIPPING

GROWTH

“The government’s initiative of incentivizing the cold chain sector is one big step in pushing the growth of cold chain infrastructure. The government further strengthened its intent by announcing India Cooling Action plan, which seeks to integrate all cooling efforts in technology, manufacturing, efficiency and environmental issues. The future developmental perspective should be based on the methods and ways of operating or controlling commercial refrigeration that will save energy. Cold store operators should think of ways and control strategies to save energy,” emphasizes Mr. Asheesh Fotedar, COO, NCCD, during an interview…

What has been the impact of Covid-19 pandemic on cold chain segment?

The outbreak of Covid-19 and its fallouts like lockdown and near zero human-tohuman interface led its onslaught on nations across the globe, with India being no exception. The pandemic’s threatening impact on the economic and industrial stability led to major distress in various sectors and deep disruption in the global supply chain system. The silver lining, however, was that the pandemic had created a positive impact on the cold chain sector.

It would be unfair to not point out that the rising distress affected the consumers. However, they became conscious of their eating habits and their awareness level towards health, wellness, and consumption of proteins, etc., to counter side effects of pandemic. This has resulted in increased consumption of milk and dairy products, fruits & green vegetables and products like meat, eggs, and seafood.

The consumption of fruit & vegetables, meat and eggs saw a major surge during these times. Owing to which, distributors and producers started to indulge in the process of understanding the importance of cold chain. It allowed

22 CELERITY March - April 2022

the cold chain segment to remodel itself and position itself as the major support system to people when everything looked in distress and jeopardy.

The industry also took a challenge within and with all its resources, they allowed timely pickups and deliveries of all food and perishable fruit, veggies, and meats. It allowed people safety and a system where deliveries were made at home with minimum or no risk. With increased pressure from the secondary markets, it became very evident and necessary to ramp up the storage capacity as well as the cold chain transport.

With increased pressure from healthcare system to allow and transport vaccines to the last mile in a controlled temperature condition, the demand for storage and cold chain logistics saw a major spike. The efficient management of cold chain transportation was essential for maintaining the integrity of the products and vaccines to be transported.

As per reports published by various market research organizations, the cold chain market is estimated to grow at a CAGR ranging between 10—14% in the Asia pacific region. India would surely feature in top countries in this robust growth due to its strong economic development and focus not

Mr. Asheesh Fotedar is a dynamic professional technocrat with over 22 years of comprehensive experience in designing and execution of turnkey refrigeration and cold chain projects; sales & marketing; revenue expansion, etc. He is an effective leader with distinguished abilities in leading technical designs & allied teams, ensuring effective delivery of solutions, building roadmaps, introducing new technologies which are in line with policies, which compliment both energy efficiency and climate in the Cold chain sector. Asheesh is a Mechanical Engineering with specialization in Refrigeration and air conditioning from Government College of Engineering, Pune.

only to counter economic setback due to pandemic but to grow at a faster pace to achieve its milestone of attaining a position among top three economies of the world.

INTERVIEW What were the challenges faced during Covid 19?

How has it evolved over the years and how is it slated to grow from here on?

The cold chain sector has evolved at a very dynamic speed over the years. Let me explain. Cold chain is a step-bystep process, and one mismanaged step can result in break in the chain. Its two very distinctive steps include stationary Cold storage and distribution through controlled temperature transport. The government started to understand the importance of storage way back in 60s and by 80s, the specific storages and capacity built up was notified in various

five-year plans.

In and around year 2000, the Cold chain was mostly cold storages and sector was mostly pumped by Hospitality and pharmaceutical research companies, dairy, and ice cream industry at that time. The government, by this time, understood the role of Cold chain and floated many incentive schemes for setting up of these types of facilities, which would allow farmers, traders to set up these types of cold stores for storing and processing their produce. In around 2003, with the arrival of fast food chains in India, the concept of walk-in coolers and walk-in freezers started to pick up pace and the concept of maintaining cold chain gathered steam as these groups maintained back-end kitchens, known as commissaries, from where fast food was transported in refer trucks and in case the walk-in cooler or freezer would become out of order at the store, the food would not be delivered and maintained under temperature-controlled condition in the refer vehicle.

With the advent of retail in 2004-05, it started to realize the amount of fruit &

PIC COURTESY- AGRIFARMING.IN

Due to mental distress and overall fear of getting infected by the deadly virus, I understand the dependence on packaged food, ready to eat (RTE), and soft beverages increased manyfold as it allowed people to store the products for longer period without venturing out. This, in turn, impacted the supply chain at back-end and due to multiple restrictions during the pandemic, the situation became very tense. It further impacted the back end as government started the initiatives of delivering free meals and food to migrant laborers. As the saying goes, ‘Necessity is the mother of all inventions’, the manufacturers introduced various products with increased shelf life, which allowed them to regulate the manufacturing system as well the supply chain. The result was that supplies were clubbed with other deliveries and a very well-oiled mechanism of mixed distribution was started based on the consumption pattern. It was also noted that dependence on organized retail and e-commerce took prudence,

which has been effectively providing the necessary spine strength to the whole system to encounter the most unexpected challenge that mankind had to face in last 100 years. These challenges created an opportunity for the development of food value chain backed by a robust cold chain model that allows storage of perishable and high value products for a longer time. These factors have propelled the growth of cold chain and its importance is now paramount.

supplychaintribe.com

23

INTERVIEW

The goal for every designer, every organization should be capacity built up, which ensures minimizing direct and indirect impacts of all types of refrigerants. Cold chain solutions should be addressed through improved design, use of modern technologies and better field commissioning laid out maintenance practices, its lifecycle, and decommissioning procedures. The agencies should be vigilant enough for the enforcement of local regulations and preventive checks should be initiated to ensure that the system is operating in desired conditions, and which don’t harm our goal of sustainable growth, clean environment, and reduced energy consumption. vegetables that was lost due to ineffective Cold chain infrastructure was equal to GDP of some countries. In addition, it was understood that this loss is loss to farmers and to prevent & safeguard the interest of farmers, a holistic approach was initiated within the sector. Major transformations started to happen, and every step of the Cold Chain process was given vital importance. Grading and Sorting, precooling, blast cooling, storing and creation of distribution hubs and then transporting the perishable cargo in controlled temperature conditions became essential part and supply chain transformed and evolved into a Value Chain.

The evolution has been sturdy & fast, and the best part of this growth journey is that the journey seems to have just begun though the case is different. The sector has an innate dynamic character, which will constantly propel it on the wings of growth and in the next thirty years, don’t be astonished if you see Cold Chain sector as one of the leading sectors in building a new Indian economy.

What are the latest technological interventions in this segment?

Cold chain is an engineering process, and all its subparts derive its work done with the basic principle of energy consumption. The question here is how much energy consumption? The next thing is how to derive energy efficiency out of the subparts to make the cold chain a part of sustainable growth. The answer lies in the use of modern technologies and designs.

In earlier days, the large industrial cold storages used to run on bunker coil system and technology & design was never considered important. To maintain the level of CO2 at particular level in

24 CELERITY March - April 2022

cold storages, doors were produced at the top of cold storage, which would be opened to infuse fresh air from top and at the ground, all the doors would be opened, which would allow the stale CO2 inhibited air to be flushed out. Whatever was available from a supplier was what a consumer had to be content with.

In the recent times, a lot of emphasis has been given on technology and designs. There are modern refrigeration technologies, which use compressors that can be controlled via microprocessors for effective energy conservation. These technologies effectively work on controls and electronic sensors, which command the refrigeration system to optimize the work done equivalent to the requirement of energy to cool the required area, which is holding the produce. In addition to the Controlled Atmosphere (CA), technologies have been adopted for the preservation and storage of apples up to more than 5 months. CA conditions enable the apples to remain as fresh and juicy as they are plucked from the trees. Besides, IQFs, spiral freezers, dehydration plants, grading & packing lines with optical graders, scientific ripening technologies, material handling systems, new racking designs, BOPTs, docking stations, refer containers with dual temperature systems working on hybrid mode, modern sliding door systems, sectional doors on docks, etc., are being widely used in today’s cold chain industry. With the intervention of these technologies, the cold chain segment is witnessing a very rapid phase change.

Give us a major overview of cold chain infrastructure and some processes. What, in your view, is the role and development of Refrigerants?

The main objective of cold chain is to keep the products safe and extend the shelf life of the perishable produce. It is the process of extending the holding life of those products, which cannot exist in natural conditions at the time of their harvest and are dependent upon conditions like controlled temperature, humidity, specific storage pattern, controlled flow of air inside the storage areas.

In a cold chain, the place where the produce is first brought and subjugated to conditions relevant in extending the holding life is known as PACK HOUSE. Depending upon the nature of produce and its specific requirements, a Pack house can be a normal shed, or it can be a place where essentially, produce undergoes curing if required, washing, grading, sorting, precooling and then shifting either to a cold storage or transported in refer truck to the market for sale and consumption.

The requirement of temperature and the process as defined above depends upon the produce and the product. For example, ice cream is manufactured in continuous freezers, which are derived from semi-solid mixture of milk and other ingredients at around –4 deg C. The packing is done at the outlet and the material is shifted to blast freezers where this semi-solid liquid is blasted in a high volume of air at -30 to -35 deg C for about four hours to prevent crystallization of ice cream. It further hardens the ice cream and allows the entrapment of air in the ice cream rapidly to prevent it from losing weight and shape both. This hardened ice cream is then shifted to freezers, which are run at -18 deg C with minimum air flows and pull-down time designed up to 18 hours and so. This ice cream is then loaded in refer containers,

PIC COURTESY- SAMUELL

INTERVIEW

which are maintained at -20 deg C and transported to retail outlets where the product is stored in chest freezers till, we consume it. In the same way, chicken freezing has a different process and to prevent rigor mortis, the chicken after slaughter must go under different processes before it’s chilled to reduce its core temperature of 40 deg c and then blasted at an air temperature of -35 deg c in 3 hours’ time before it is stored at –18 deg C to -20 deg C. In other instance, like citrus, it is important to precool the produce up to 80% of its storing temperature in max 5 hours’ time. The humidity level has to be near 95% and air flow level has to be maintained at around more than 100 CFM. Once the precooling is done to remove the farm heat, the shelf life of produce increases by 7 to 10 days.

This allows the produce to be shifted to a cold store where the remaining 20% of required temperature (1 deg C) is attained in around 16 hours’ time and humidity levels maintained at around

supplychaintribe.com

95%. Similarly, for different types of produce, different type of processes, temperature, and humidity levels along with control of gases and flow of air, are recommended and are to be followed to ensure that they are safeguarded against early ripening and deterioration.

Role and development of refrigerants The stratospheric ozone depletion and greenhouse effect due to refrigerant emissions have led to changes in the use of refrigerants. This has pushed for technological advancements in the refrigeration system and various companies have taken a leading role in the research and development of environment friendly refrigerant systems. The new challenges with chlorine free refrigerants is greenhouse effect. The aim must be the reduction of direct emissions. On a global level, the Kigali Amendment was adopted in year 2016 under the Montreal Protocol, in which phase down of HFCs was to start by 2019.

The effect of gases, which have high GWP, are being changed with alternatives with lower GWP. The use of naturally occurring substances will have to be used more. For HFC gases, phase down alternatives is possible with blends with high proportions of HFO and possibly hydrocarbons, however, the disadvantage is in flammability. In addition, the other disadvantage to these blends is that more GWP is reduced, more will be the reduced refrigerating capacity and distinct temperature glides. This will limit the applications and will require specific demand for design of heat exchangers.

The natural refrigerants like NH3 have been used for considerable time in industrial refrigeration plants. It does not deplete ozone and has no direct GWP. It’s an attractive option against HFCs but there are some negative aspects, which restrict the wider use in the commercial area. The major disadvantage is higher discharge temperatures and single stage compression after certain evaporating temperatures and its usage in smaller

25

INTERVIEW

The stratospheric ozone depletion and greenhouse effect due to refrigerant emissions have led to changes in the use of refrigerants. This has pushed for technological advancements in the refrigeration system and various companies have taken a leading role in the research and development of environment friendly refrigerant systems. The new challenges with chlorine free refrigerants is greenhouse effect. The aim must be the reduction of direct emissions. plants. The lubricants need to be separated with complex technology and limit the use of direct expansion due to deterioration in the heat transfer.

The CO2 is non-ozone depleting with negligible GWP of 1, non-toxic, non-flammable and chemically inactive.

In early days due to safety relevant characteristics, its widespread use was found in marine refrigeration systems.

However, the discharge pressure with CO2 is extremely high and critical temperature is essentially low. CO2 can be used in cascade systems in combination with a booster stage for lower evaporating temperature and very beneficial applications can be seen for industrial as well as commercial refrigeration projects.

What are the development perspectives and challenges for this sector in future?

The government’s initiative of incentivizing the cold chain sector is one big step in pushing the growth of cold chain infrastructure. The government further strengthened its intent by announcing India Cooling Action plan, which seeks to integrate all cooling efforts in technology, manufacturing, efficiency and environmental issues.

The future developmental perspective should be based on the methods and ways of operating or controlling commercial refrigeration that will save energy. Cold store operators should think of ways and control strategies to save energy. This can start with proper design of the system: Any cooling technology is not used to cool the spaces, but the main objective is to cool the produce stored into it. Every produce stored has a designed shelf life.

After harvesting when the produce is cut off from its normal supply of food, the living process continues through utilization of previously stored food

26 CELERITY March - April 2022

substances. To slow the living process by retarding its enzymic activity, it is preserved under conditions, which we know as Refrigeration.

Every produce has a specific heat above and below freezing, respiration load, entering temperature, etc., which determines how much energy would be required to remove its both sensible and latent heat for controlling its spoilage.

Then heat leaks, infiltration loads, heat produced by electric motors in cooling spaces put a lot of emphasis on calculation of heat loads. There must be focus on the reduction of energy consumption by cold stores and it can happen when we first know heat load calculations and then focus on three principal areas: Reducing heat loads on the store; Improved component design and its effectiveness in energy conservation and usage operations; and Cycled maintenance for improved operational efficiency of the refrigeration system.

In many instances, especially in frozen stores, temperatures are kept lower than necessary to provide a safety margin. Often operators apply strategies to save money by switching off the refrigeration systems during peak demand. During this period, the temperature within the room is allowed to rise and is then reduced back. The focus should be saving energy and money would be automatically saved.

The use of renewable energy sources such as wind and solar is likely to play a role in reducing the environmental impact of the energy used by cold stores. There should improvements in the form of changing equipment, which are not energy efficient and technically worn out. These improvements have very short payback times and should be done in accordance with latest laws and policies that govern the sector.

As stated earlier in October 2016,

the Kigali Amendment to the Montreal Protocol brought another dimension to the mandate of the Montreal Protocol by adding the control of production and usage of hydrofluorocarbons. This is the most challenging aspect of this sector, and it is important to ensure our focus is renewed every time on the control and phasing out of these of gases which have high GWP. This control will add to climate benefit. The emissions of HFCs are also listed within the group of GHGs (Greenhouse Gases) under the climate related conventions i.e., Paris Agreement and previously the Kyoto Protocol.

The impact of refrigerant is both direct and indirect. The direct impact arises from the fact that emissions contribute to Global Warming potential.

The indirect impact is associated with the energy consumption, which directly results in higher generation of power to run these equipment. This pushes for burning of more fossil fuel and which, in turn, adds lot of carbon footprint to environment, thus creating a gas chamber effect on this planet.

The goal for every designer, every organization should be capacity built up, which ensures minimizing direct and indirect impacts of all types of refrigerants. Cold chain solutions should be addressed through improved design, use of modern technologies and better field commissioning laid out maintenance practices, its lifecycle, and decommissioning procedures. The agencies should be vigilant enough for the enforcement of local regulations and preventive checks should be initiated to ensure that the system is operating in desired conditions, and which don’t harm our goal of sustainable growth, clean environment, and reduced energy consumption.

SPECIAL REPORT

NEXT FRONTIER IN

SUPPLY CHAIN VISIBILITY During Covid-19 crisis, one aspect that was noticeably clear was lack of visibility of companies’ Assets / People / Materials and Safety & Security of everyone. With more than two years into the pandemic, the organizations have learnt the lesson the hardest way, which has brought about a mindset change in the leadership globally. It is expected that by 2025, more than 50% of global product-centric companies will have implemented real-time visibility platforms across global value chains. Visibility is a (mixed) outcome of organizations’ process management capabilities, customer focused approach, and the key investment decisions that the management makes on a day-to-day basis. Our recently held webinar, ‘Next Frontier in Supply Chain Visibility’, proved to be a great eye opener for companies across the spectrum in realizing the potent benefits of Visibility and ways to empower processes & systems to bring about a systemic change. Ultimately, an agile supply chain is a supply chain of the future and to achieve this, supply chains must encompass the ability to achieve more in a shorter time, adopting new digital technologies and re-skilling / upskilling their workforce dynamically. This is where Visibility will have a greater role to play.

Excerpts from the Webinar…

We implemented Intugine visibility solutions a while back and over a period of time, we have been able to develop a Transport Control Tower, which is now becoming a broader Logistics Control Tower. It provides visibility of inventory across a desperate set of systems and enables us to even do revenue recognition.

Pramod Gupta

Chief Financial Officer and Head – Supply Chain & IT, Arvind Fashions

Are there any clear benefits if companies have visibility into their inventories, asset management and how deeper that visibility is required from financial reporting and audit controls perspective?

Visibility is the EYE of the organization.

One of the fundamental questions asked by audit Committees is ‘how do you know what risks you are carrying’. You cannot

28 CELERITY March - April 2022

know your risks unless you have visibility.

We are an inventory-based organization.

In fact, most of the organizations in the world have large physical assets.

Therefore, inventory visibility is one of the most important visibilities. Retailing aside, we are a design company and not a manufacturing company. We have either got inventory or debtors. Sometimes I even call debtors as inventories, on

SPECIAL REPORT which we have booked my profits, since our channel partners can contractually return 10-15% of inventories sold to them. Therefore, we need to have visibility not only of the inventories being carried at our stores or in transit or at warehouses. I would expand the scope of visibility even to the inventory lying at dealers’ places, their ageing, the rate of sale (what we can ROS in retailing) vs. the inventory that is being carried, etc.

Therefore, I would go beyond the classical need for inventory visibility from control viewpoint, like physical control of inventory or inventory reconciliation, Goods-in-Transit control, etc. We need to expand inventory visibility function style level for business planning – in our own system as well as in the channel, in a physical location vs in transit. We must do that cutting across the system in which the inventory is lying, and even relate it to other operating parameters (like ROS), to enable forward planning.

Does it help into your management of financial reporting, and which are those levellers that you can talk about?

Absolutely. As I said, without visibility, we cannot develop a view of inventory controls, reconciliations, GIT, leakages, ageing etc. And all of these are intrinsic parts of financial reporting. Without this, management will be in the dark for true operating performance and no auditor will allow financial results to be published. But in our case, we have taken it one step further. We have linked our systems for recognition of B2B sales

to our key channel partners like online players, department stores, multibrand stores etc. with our forward GIT monitoring, with electronic POD receipts getting checked before quarterly revenue cut-offs are done. So, visibility is now absolutely intrinsic to even our quarterly revenue recognition.

Is it sandwiched between the cost and value and what would happen if tomorrow organizations started to perceive visibility as a value generator or as a separator vs. a cost centre in the competition?

The value vs. cost has been an age-old debate in any organization. The way I look at it is that any organization incurs costs to derive a certain value. My cost is someone else’s revenue, and my revenue is someone else’s cost. Whether it’s me or someone else, we incur a cost to derive a value. Only if spend some monies but it’s not yielding a value, it’s a cost. If the cost is enabling you to drive productive outcomes, then it’s a value. For us, visibility has always been a Value Creator.

Today businesses are a lot more complex.

They are a lot more national and global.

In such scenarios, the importance of visibility gets even higher.

Can you explain how well integrated are the digital systems in your organizations? How have they impacted the organization?

Data resides in TMS, WMS, SAP, and so on and so forth. In our case, reverse logistics is also very important because some part of what we send to stores or

even sell to channel partners, comes back. Older inventories are typically sold to online players. But theirs is a long process of inventory selection. So, we offer them the likely available inventories irrespective of where they are located, or even when in-transit. So, having visibility of these inventories at any point in time across the chain, and linking it with their acceptance status by the online partners is of paramount importance – both for sales as well customer service. This requires visibility across disparate systems. Then there is POD tracking. Then there is a matter of making sure SLAs with vendor partners, whether warehouse partners or transport partners, are monitored.

Integrating so many different systems to drive desired outcomes gets very challenging. We implemented Intugine visibility solutions a while back and working with Intugine team, over a period, we have been able to develop a Transport Control Tower, which is now becoming a broader Logistics Control Tower. It provides visibility of inventory across a desperate set of systems. It enables us to even do revenue recognition. We have also been using the Transport Tower for GIT (Goodsin-Transit) reduction, for monitoring of ageing stocks, for shelf availability planning at the retail stores, digital POD mapping to enable GIT reconciliation and transporters SLA monitoring. All of this of course required lot of Change Management, brainstorming of right solution and internal problem solving to arrive at and implement such an impactdriven system.

About 6% of our GDP is stuck in inventory carrying costs. But with better visibility and better control, we can bring down this cost to less than 3%.

What do you think of Visibility?

Harshit Shrivastava

Founder & CEO, Intugine Technologies

supplychaintribe.com

Intugine is the supply chain visibility partner of 150+ customers across 7+ industries. For us, supply chain visibility is all about knowing where your products are at all points of time.

Right from its journey as raw materials which are purchased from suppliers to manufactured goods that are sold to end consumers. Supply chain visibility is an essential means of ensuring efficient

supply chain management. We see it in three different phases…

First phase is Transparency. Where we build a bird’s eye view of the entire supply chain network with the use of technology. Whether it is deploying GPSenabled vehicles or using IoT devices to track ocean freight containers. Whether it is using smart sensing beacons inside yard environments or capturing what is

29

SPECIAL REPORT happening at the loading and unloading locations. We collect data from across the supply chain network, integrate with dozens of ERPs, CRMs, and WMS systems to build a single unified platform. With such transparency, you can basically act on disruptions within a matter of minutes and sometimes you can even act before those disruptions occur with predictive visibility.

Once you have this visibility, the next thing to do is to Enable Intelligence. The idea is to analyze the data that we gather from supply chain visibility to keep tabs on KPIs like on-time percentage, OTIF, daily kilometres covered, route-wise performance of different transporters, and how they measure up to industry standards, etc.

Then comes the last phase, which is, Actionability. Based on all this data, we help supply chain teams make smart decisions like changing the business share of their carriers. They can improve their network design with actual data on the ground. They can plan their inventories and safety stocks in a way that saves cost and improves efficiency. Ultimately helping brands deliver a delightful customer experience and reduce their cost of doing business.

Assume that organizations have visibility into their end-to-end value chain. How should they utilize it and how would they benefit from it?

We’ve already discussed how well run supply chains can help delight customers.

In addition to that, visibility improves planning and execution of logistics processes across the supply chain. Today when we order food from Swiggy or Zomato, we get real-time visibility of where that rider is and when he/she is going to reach our location. This, in addition to delivering a good customer experience, helps Swiggy/Zomato manage deliveries better. Now imagine a B2B scenario where organizations and brands are moving millions of dollars of inventory. The need for visibility is even greater here when the scale of operation is much larger. So, the idea behind visibility is to deliver a Swiggylike delivery experience across the supply chain, at all nodes of the supply chain for enterprises.

For example, a distributor or a retail

30 CELERITY March - April 2022

store can plan their commitments to their customers better if they have visibility over when the goods are going to arrive. Auto manufacturers can manage their assembly line and their production better if they have visibility of incoming components. And if they know that a certain component is going to get missed, they can arrange an alternate immediately. Even a minute’s delay can cause lakhs and crores of losses. So, one area of benefit is customer experience and then helping customers manage their operations better.

Now, talking of more tangible benefits: Interestingly in India, like a lot of us know about 6% of our GDP is stuck in inventory carrying costs. This is the inventory, which left the manufacturing facility but hasn’t reached the customers’ hand. So, this inventory carrying cost is taking up ₹6 out of every ₹100 that all of us spend in India. But with better visibility and better control we can bring down this cost to less than 3%. That’s a major benefit of reducing and improving the efficiency of supply chains in order of a single digit percentage in national GDP. We have seen it first-hand that when organizations enable visibility across their supply chain, within a matter of 4 – 6 months, they see 40 to 50 crores of inventory disappearing from their system and their supply chains resulting in reduced cost of doing business.

Then there are a lot of industry specific benefits such as FMCG and FMCD industries seeing OTIF metric shooting up, in retail, companies see products landing at the shelf at the right time, which helps avoid loss of sale due to stock out. It can drive up the topline by 0.5 to 1% overall. In alco-beverages, massive detention costs will come down as you improve your monitoring with real-time visibility. So, these are some of the benefits that different industries are seeing. We believe that visibility is one of the most key components to enable and unlock all other digitalization capabilities.

It can help with revenue recognition; it can help with invoice discounting and proof of deliveries among others.

Beacon technology is used at Intugine Solutions. Isn’t it an overhead when you deploy thousands of devices in the operations that

have periodic battery related or maintenance needs? How do you overcome this challenge with the least possible costs?

This is one of the challenges that we have been solving in the last few years.

There was a time when IoT devices were expensive, bulky, and consumed too much power. But today, with advancement in technology, IoT devices are compact, affordable and energy efficient.

When you talk about beacons, they are used to enable yard visibility.

Basically, in a smaller area, in a warehouse or plant, when you are trying to manage and get visibility of your loading and unloading operations, right from getting inside Yard to the weighing points to loading & unloading, invoicing area, getout journey, etc., that is where we use beacons. The way we are trying to solve this problem is to keep the number of devices limited because we will have to only track those vehicles while they are inside the yard. At any point of time, there will be a maximum 50 – 60 vehicles inside the yard. All the technology is plug & play. The moment the vehicle reports at the loading point, you can just stick the magnetic beacon on the vehicle and when it goes out, you can just take out that beacon at the security gate.

This plug & play operation enables you to operate with a much lesser number of IoT devices and for each shipment as you don’t have to send out the device. The batteries that we use are designed in such a way that they last for 2-3 years, and the cost is fairly low. The logistics to manage this recharging, therefore, doesn’t come into picture.

When we talk about the larger portable GPS tracker or smart locks, then you need a comprehensive device management system, which can help you manage devices, make sure that you don’t lose them, you recharge them at the right time, etc. These aspects come complementary with all the device solutions.

What are the top 2-3 things that need to be kept in the mind while selecting a supply chain visibility platform? What would you advocate to your partners?

While you are evaluating supply chain visibility partners, you need to set an

SPECIAL REPORT expectation. That expectation depends on the different modes of transportation that your organization is using, how the operations of the organizations are structured. Depending on the complexity, choosing the right fit would work. Ours is not a ‘one solution fits all’ kind of space. Most large companies will have varied tracking needs. They would be handling distributor deliveries, D2C or direct-to-retail deliveries while at the same time importing a lot of raw materials. Sometimes this movement happens across modalities. Which means they might need to track ocean or air movements in addition to land transport. Such an organization therefore needs to find a vendor that can offer tracking across modalities. Irrespective of whether your movements happen via full truck loads, part truck loads, ocean freight or rail cargo. So that what companies end up with is an end-to-end integrated visibility platform.

Another thing to keep in mind is to ensure that your vendor has the tech competence to integrate with TMS, WMS or ERP systems that you use. This

will ensure that important logistics data never gets siloed. At the end, we must bring everything together because all systems should be communicating with each other. So, the idea is to evaluate the capability of the new partner in your existing environment of systems that you are using. The success of implementation is very important. Just having a platform doesn’t really work, every team should be able to work with different departments seamlessly. Transport operations teams with warehouses, plants, your other service providers. When you begin a trial with a vendor, try to evaluate if they can deliver at least 95% of visibility. These are some of the important criteria to evaluate your partners.

Where do you see the future of the new age and the government’s role in expanding the scope of these technologies?

I feel we are moving towards a digital age where the government is an important partner and catalyst in bringing about this change. Over the past few months, we have been working very closely with

the government. In this Budget session, members of parliament have talked about transit inventory, the importance of transparency, and how visibility can benefit the Indian logistics ecosystem.

I think the government is proactively coming up with programs that are aimed at driving change. For example, the country’s toll infrastructure is being digitized, vehicle databases and driver databases have been made accessible to businesses and even the Indian Railways APIs are being leveraged to bring down logistics costs in the country.

The Unified Logistics Interface Platform (ULIP), being built by the government, will provide for efficient movement of goods through different modes. It will greatly reduce logistics cost and save time, assisting just-in-time inventory management and eliminating tedious documentation. With the help of ULIP, organizations like ours will be able to provide real-time information to all stakeholders and improve efficiency of supply chain operations.

Visibility has become a hygiene factor for us today.

Customer demand is putting the pressure on order fulfilment and to ensure that we live up to the expectation of service levels of this order fulfilment, we need to have that visibility of information, which is required to measure the service level, optimize cost, plan our execution, and build trust & transparency in the entire system.

Hitesh Arya

people and inventory from a visibility perspective?

In your experience, for a B2B product like cement or any other product that you have handled before, how much industry has learnt a lesson in the last 2 years specifically taking Covid-19 as a catalyst whether it has really pushed organizations over the cliff to have a real integrated system in place so that you are able to manage your assets including your

Last 2 years, Covid-19 has accelerated our adoption of digitization in supply chain, which clearly gives us the edge for visibility part. Today visibility has become a hygiene factor for us. Everyone required a common standard visibility across organization whether it was our internal teams or external customers/channel partners. It has become so integral part of operations today that people cannot live without that level of visibility. Customer demand is putting the pressure on order fulfilment and to ensure that we live up

Senior General Manager, UltraTech Cement

supplychaintribe.com

to the expectation of service levels of this order fulfilment we need to have that visibility of information, which is required to measure the service level, optimize cost, plan our execution, and build trust & transparency in the entire system.

In the last 2 years, we have seen accelerated adoption of digital technology, which has improved visibility drastically, which in normal scenario would have taken 4-5 years to adopt all the processes.

Electronic Proof of Delivery, visibility of our assets, products, inventory, etc. which were earlier manual processes,

31

SPECIAL REPORT The next frontier that global leaders are working on is called Hyper-Automation!! It is named as the No. 1 trend in Gartner’s list of Top 10 Technology trends for year 2021-22.

Hyper-automation is an amalgamation of next generation technologies like Artificial Intelligence (AI), Machine Learning (ML), Robotic Process Automation (RPA), and Advanced analytics (AA).

have now been mostly digitized, and made paperless. Even all our freight bills including our invoices are now digitally signed and digital copies are submitted.

There is no handing over of hard copies, so we do not require our transporters to struggle with their billing processes and our commercial team for manually checking paper proof of delivery.

There was a compulsion for faster adoption to continue business while following the Covid-19 protocols. Slowly and steadily, people found clear value in going digital and enhancing visibility, the overall payment cycle of transporters came down, their cash flow improved.

We were able to take advantage of better freights. From that perspective, last 2 years have been wonderful for everyone.

Are there any basic differences in terms of the treatment that you have or in terms of the system or network setup you require at the back to manage that kind of visibility?

In cement industry, we have both B&B and B2C logistics because we deliver cement direct to our end consumer also.

There is a lot of similarity, but I would talk about the basic difference with which we manage the visibility. We have more than 50 plants across the country. There are thousands of orders, which flow to us in an hour, which gets distributed from different plants, different warehouses, etc. To manage the sheer scale, we require most of the processes to be digitized, and also that clear visibility to all the people in the supply chain whether we talk about our manufacturing counterparts, our logistics team who's dispatching through rails & road and through ships and to also our sales & Key accounts team and finally to our end consumers, which are our dealers, retailers and even the individual house owners. Connectivity

32 CELERITY March - April 2022

and common visibility are very critical to manage such a scale.

How do you make the information available, reliable, and closer to the truth?

Use of IoT devices will provide more reliable and transparent data because there is no manual intervention. For instance, GPS will give you real-time visibility into truck movement because no one can tamper with the GPS data.

Second aspect is the selection of system because different applications have different way of capturing the data and if we select the right kind of system, which suffices the need of the data information, which is required, that will we answer most of the questions. Third part, which I would like to emphasize on is process standardization because there are so many warehouses, plants, third party vendors, transporters, handling agents, etc. Processes at each of this node and in each geography must be standardized.

If there are not standard processes, no matter what data is given by IoT devices, there will be different datasets and everybody will make a different sense out of it, which will eventually lead to loss of reliability. These three aspects are extremely critical for any technology to deliver real difference. On top of this, when we get the information, the reliability and trust must be created among all the team members, all the departments, etc. The way we build trust is that when we get that information in the form of automated reports & dashboards, we don't have meetings with teams coming up with their own set of data points. We open live dashboard and discuss against those numbers only. If anyone has trust issues with the system data, they need to be resolved before the meeting. Trust will only come when everybody is working in

the same direction, everybody is going to use the same standard dataset and standard processes on the ground.

What happens if most of your operations are outsourced? What is the impact on visibility in that case and how do you do that integration?

In Cement industry, we broadly talk about two parts of outsourcing – one is the leased manufacturing setup and other is with respect to logistics and distribution network. I would again like to emphasize that our processes must be standardized across our vendors, suppliers, and partners. When we want to onboard our suppliers and partners, we also check how digital savvy are they, how comfortable are they with the digital environment because this will enable us to measure their performance in real-time from order allocation to indent management to truck placement to manufacturing of cement. All these key parameters should be available to us in real time at the click of a button. The thumb rule is to ensure process standardization and digitized processes. As we have a large scale of outsourcing, only with such digitized and standards processes, we will be able to control and review the performance on a regular basis. At the same time, it will also enable us to ensure the committed service levels to our customers are met.

The onboarding of vendors & suppliers must be done thoroughly with respect to digital readiness. Their working operations have to be digitally connected.

There is a lot of integration required, be it integration of our supplier system, integration of our logistics system, integration of our customer interfaces, etc. When all these parts are integrated, even with an outsourced model, we will be able to deliver service and the quality at the most optimum cost.

SPECIAL REPORT Supply chain is all about the flow. Visibility highlights the performance of keeping our promise to the consumer. If the flow is smooth, the consumer gets whatever he or she wants at the right time, right cost, in the right amount with the right quality. This then should be visible in the results.

Pankaj Kapoor Vice President Digital, Tata Consumer Goods

What is your view on visibility more from digitalization and analytics perspective?

For me, visibility is all about providing a complete picture. Visibility is also about equality of information availability across all stakeholders. Accessibility to accurate data is a key visibility trait which decides the quality of the decision for the business. Importance of Visibility is age old. Even Dhritarashtra had to use Sanjay during Mahabharata. Covid has catalyzed data democratization with Digital as the enabler. Since we are discussing this in the context of supply chain then visibility also helps you check the flow. For me Supply chain is all about the flow. Visibility highlights the performance of keeping our promise to the consumer. If the flow is smooth, the consumer gets whatever he or she wants at the right time, right cost, in the right amount with the right quality. This then should be visible in the results.

In the last two decades, supply chain networks have been very decentralized for various reasons. In this scenario, what level of visibility is possible for the organization – Is it siloed and is it disjointed that we need to try to make it into a centralized one?

Hybrid is the way to go. Certain set of business decisions are best left to the localized centre or the partner. This balance also requires a certain level of visibility to be extended to the centre or partner.

supplychaintribe.com

Every decision centre needs to have the right amount of data or information visible to them so that they can take a decision as per their operational boundaries that they are supposed to do and whatever they are designed to do. Data points across the Supply Chain should be stitched together, made visible to all, and should enable an impact similar to a domino effect. If one decision is taken in the right direction, the other decision centres should also move in the same direction. For me, visibility of that data, for creating decentralized and hybrid supply chains is very important.

Covid-19 has also given us an opportunity to rethink our processes. On the ground, every state had different variables influencing the localized decisions. They were all designed to enable business and safeguard the people working to deliver the promise. On the ground they were given the empowerment with certain datasets leading to a good supply. So, it's the balance, if you can get the balance right, the decentralized supply chain can unlock a lot of value potential and enable everybody with it.

While digitization helps improving the visibility, but at the same time, there are challenges getting these implemented. Can you address this?

Everybody's got a different challenge while digitizing. I can share a few which would enable higher adoption provided we are able to strike a good balance.

People Capability: People are the true drivers of change. They need to be upskilled with inhouse skill development programs on the latest elements. This will give them the confidence to identify as well as adopt new solutions.

Process Maturity: Digitization success is directly proportional to the maturity of the process to be digitized.

Fad vs need: The biggest challenge is saying NO to a digital product because everybody is in a hurry to digitize.

Companies need to realize the fact that every company has a unique challenge and basis that the technology adoption for each company would also be unique & different.

How critical is to have trust and transparency with your partners to ensure visibility? Is it true that if we have trust & transparency in place, then the visibility is also guaranteed?

For me, it’s a 2-way street. If I am providing visibility of my supply elements to all the third parties, they too need to provide full visibility of the stock availability at their units. This has to be enabled by Trust. Covid-19 has been a great teacher in the sense that all of us were on the same page to deliver goods to customers in the most challenging times of our lives.

Tool and Partner selection: Which digital tool to deploy is a positive headache companies are facing today. There are situations where you have evaluated 3 or 4 partners and you get approached by new players who bring some enhanced value added propositions. In that case, you are in a flux. Every Solution Partner has a different take on the way to solve the problem.

33

SPECIAL REPORT Through visibility, companies can take right decisions at the right time, which ultimately saves cost and offers customer delight.

Vaibhav Agarwal

National Manager (Head) - Logistics and Customer Service, Britannia Industries

What is your thought on visibility and how important it is for your organization?

Let me start by putting it through a story… Let's assume, you're feeling hungry and suddenly you get a call from your favourite pizza store asking whether you want to order your favourite pizza. You just give consent and in next 20 minutes, you have a piping hot pizza delivered at your doorstep at the cost of ₹50. How does it sound? Seems like a dream? It is possible through visibility. I am talking about three kinds of visibilities here… demand visibility, supply visibility and stock visibility.

Technology, of course, is enabling this. So, the consumer was wearing a smartwatch.

As soon as he started feeling hungry, the smartwatch actually picked up the signal from the changes in his body, from the reactions in his body and sent a signal to his favourite pizza store. The store received the signal and called the person immediately. By the customer’s ordering pattern, the store already knew the customer’s preference through machine learning and AI. The store person gives a couple of options from the consumer’s favourite pizza. Most probably customer will order one of them. Now as soon as, he ordered, they were sitting on minimal inventory because all the vendors also got the visibility into the system and the order that the customer has placed and immediately within no time, they were able to deliver what customer wanted.

Since everyone was holding minimal inventory, there were no major supply chain cost of inventory holding.

34 CELERITY March - April 2022

What was saved is Cost of Capital locked in inventory, Inventory holding cost, and obsolesce cost. Since obsolesce cost is a huge cost in the food industry, all this will perhaps enable a Rs300 pizza costed the customer only Rs50. This is the power of visibility. Again, disruptions that happen at the backend is a supply chain visibility. Through visibility, companies can take right decisions at the right time, which ultimately saves cost and offers customer delight.

We all agree that visibility is critical but how do you get that visibility?

What brings the data into the system?

First, I would divide the answer into two parts – first would be around generation of data itself and second is generating visibility out of that data. We all agree that 10 years back, IoT devices were really expensive. Not only they were expensive, but they were also hard to use because of their size and compatibility.

But with the technology getting more and more developed, the size of the IoT, the cost and the ease of use, everything is getting more and more adaptable. A lot of companies have started adapting to these IoTs, putting sensors in the right places, getting data out of it, feeding that data in the system has become much simpler and at minimal cost.

Now after you've put in sensors at the right place. For example, we put a simple temperature sensor in a temperaturecontrolled vehicle and that is connected to the GPS that automatically, after regular intervals, take the temperature of the vehicle and sends it back into the Cloud. The second part is how do you create visibility out of it as you have the data. Making sense out of this data is equally important as collection of data.

We would have a complete clarity on what data is needed and for what, what are exceptions and decision nodes. Putting a data analytics software/team/Control tower would also not be a bad idea. This will help everyone gaining visibility of what’s happening. Simple example can be a retail shelf stock out will no longer

be a sales concern, but an action point for entire organization.

What are the key challenges for supply mapping and the best ways to overcome? What are the advancements we have made in technology on this front so you can map the data, make it all inclusive into a decision-making software and then go ahead? What will happen to Job market due to this technology advancement?

I guess collecting the data and giving a visibility is one part of it and taking actionable decision on it is second part.

There are a lot of software like TMS systems, WMS systems, which are now widely adopted in India. In fact, what I feel is that putting the right TMS or DMS or WMS, in your business is a far more challenging problem that we're all facing rather than saying that we need visibility or not. So, to take full benefits of visibility, we need to deploy a TMS system. Now there are a lot of companies that are offering a similar kind of solution. It is getting more and more difficult for us to pick the right fit for the company.

Mapping visibility to the systems is not that challenging but selecting the right system is the challenge that at least I am facing today. This is a good problem to have. Technology is working to make my life easier.

From the job’s perspective, right now, technology is impacting the lower-level jobs of jobs, which are more mathematical / repetitive in nature. In the longer run, what technology will do is it will eliminate the lower-level jobs but will create a lot more higher level jobs.

Lot of people will get into creating these technologies. There will be emergence of lot of white collar jobs as we foresee the trends shaping up.

How 5G technology is going to be a gamechanger?

5G technology provides a far more seamless exchange of data. When we talk about visibility, we talk about large amount of data being transferred from

SPECIAL REPORT IoTs to Cloud, from Cloud to systems, from systems to AI/ML, etc. With the betterment of exchange of data, the visibility would be seamless and therefore decisions would be taken faster. Apart from that, the Cloud computing will become very important after 5G because everything will then go to Cloud. Then there will be greater involvement of blockchains to authenticate the data.

Then there would be AI and ML who would be able to take better decisions basis the filtered data. Apart from this, there would be a middleware, which will stitch together this entire data and make it a solution, which companies will

be able to provide to the customers who want to use it for further enablement.

Kindly share a case study…

A lot of FMCG companies have come together with the help of CII. We are trying to take the benefit of empty miles that transporters do across the country.

We have made a forum in which we are sharing our movements with the select third party. This third party will map all the movements across the country and the vehicles that are available for the reverse load. Through this exercise, the transporters will gain because it will minimize the empty miles and ultimately

the economy will gain. Second, Consignee will get benefited because he will get cheaper rates by reducing empty miles back, which was also somehow getting charged to him. It’s a Win-Win situation for everyone. We are trying to achieve this through visibility. There will be realtime vehicle movement from one place to another. A portal will be developed wherein users like us can log in and put in our specific requirements. The system will match what is available so that holistically things can be synchronized.

This is the right time for organizations to invest in people, process, technology to re-imagine their supply chain networks in an integrated manner to build visibility and sustainability in their operations.

Sanjay Desai

Co-founder & Regional Director, Humana International (S) Pte Ltd.

How do you describe “visibility” in supply chain management?

There can be many different definitions of visibility depending on who is answering this question. Some professionals call it the single most truth and facts on the ground. In simple English, visibility, essentially means, live information that allows an organization to monitor the movement of goods, information, and their assets. In more complex supply chain lingo…Visibility is the ability to track & trace individual components, subassemblies, and final products as they travel from layers of supplier to layers of manufacturer and to distributors / retailers and to final consumer.

In the current context, where supply chains are global, and they strive to excel on all parameters…has Visibility taken a back seat?

supplychaintribe.com

This is a very logical thought. While supply chains have evolved in last two decades, they have become incrementally focused on Cost, JIT, LEAN. As a result, during all these years, visibility shifted its priority, has been inherently tainted and finally resulting into an elusive dream. Most organizations want to achieve everything and crunch too many goals in their operations execution, such as (Achieve customer excellence; Reduce acquisition cost; Enhance working capital deployment; Optimize asset management so and so forth), etc. It is not possible to achieve everything. This is the right time for organizations to invest in people, process, technology to reimagine their supply chain networks in an integrated manner to build visibility and sustainability in their operations.

What do you think is the challenge for Indian organizations to make their value chains much more visible than what they are today?

India is a country of many small countries.

The GDP of some of some of our states is higher than many countries in the world combined. We have a huge geographical area, we are 4th largest in the world in terms of number of MSMEs, we have the highest start-up organizations rate, and all this is our leverage. This leverage

also brings in challenges like huge scale & variety, mixed baggage of quality & innovation, paradox in technology scale and advancement. What we need is rigorous implementation of ‘Integration from left to the right’ in our value chains across industries regardless of any traditional barriers. MSME and family organizations need to scale their game much more aggressively and embrace technology adoption in a consistent and sustainable manner. It is all about leadership!! It is a combination of years of efforts and strong mindsets to remain integrated and connected in as many small silos and structures that one can create. You cannot achieve this state of ‘connectedness’ by luck, you need to make conscious effort every time you think of developing a new process or decide to make investments in multi-echelon enterprise business architectures.

What is next frontier in supply chain development that will help organizations to increase the visibility aspect in their supply chain?

It’s a very pertinent question given the recent happenings around the globe.

Notwithstanding its calamities, the pandemic has forced organizations to act with clock speed. Companies are moving away from low-cost supply chains and

35

SPECIAL REPORT

towards a much more resilient and agile framework.

The next frontier that global leaders are working on is called Hyper-Automation!!

It is named as the No. 1 trend in Gartner’s list of Top 10 Technology trends for year 2021-22. Hyper-automation is an amalgamation of next generation technologies like Artificial Intelligence (AI), Machine Learning (ML), Robotic Process Automation (RPA), and Advanced analytics (AA). It will leverage AI driven process models to streamline the workflow between different departments, human workforce, RPA bots and other intelligent tools to drive higher decision making integration across entire network including partners outside of the ecosystem as long as they are integrated and have a skin in the game. It will drastically increase end-toend visibility and give accurate real-time information across the entire supply chain ecosystem 24x7.

Another technology, which will ensure visibility & traceability along end-to-end supply chain with complete ownership of the end consumer, is NonFungible Token (NFT). This is the most recent development on technology front.

This is being adopted aggressively by industries like fashion and luxury retail, painting /art effects to monetize value and exclusivity.

Quickly looking at another game changing technology is blockchain. It has become the subject of significant interest for its potential to overcome supply chain visibility issues. Blockchain technology can enable trusted data sharing amongst the participants while protecting

36 CELERITY March - April 2022

business sensitive information using advanced data encryption protocols. This information can help companies find multiple ways of executing their supply chains and continue to get visibility at the transaction level in with trust and transparency in an encrypted manner.

How would you describe the negative fallouts that an organization would likely to suffer due to lack of visibility?

What is important to understand is, organizations which do not have an integrated / connected supply chain, continue to work with siloed/ manual processes, thereby forcing themselves to work more than an organization which has certain amount of technological integration. This aspect of duplication is taken as ‘day to day operations’ for which the leaders hire resources as they are required. This mentality is so pervasive that the whole organization loses the ability to understand what they are losing since working manual and duplicating their processes becomes their order of the day. They lose the ability to step back and do the right things, which is Train People, build end-to-end processes and then use emerging technology to automate them.

You need to change the needle day by day and in order to achieve that change, leaders to need to do something ‘Today for Tomorrow’.

Such organizations loose heavily on many fronts and the worst part is they do not even realize what are they loosing!

They have delays, duplications, rampant loss of people due to low morale, lack of trust and transparency in their dealings.

They are not able to benchmark correct performance goals, they lose customers faster than they acquire and eventually they suffer loss of revenue and slowly competition takes them over.

How successful is a Control Tower in providing the require amount of visibility across the chain?

The Modern Control Towers are different from legacy solutions. A control tower is designed to provide real-time visibility across the supply chain. It is a centralized hub with the required processes, harnessed with proper use of technology, and supported by organizational processes needed to capture data from all stages of the supply chain live 24x7.

This data ensures end-to-end visibility and helps a business to make informed decisions those which align with its strategic objectives. By combining people, systems and processes, control towers are able to provide 360-degree supply chain visibility. The Western World adopted Control Towers technology many years back. India has been behind in terms of adoption and execution at the right level of engagement.

However, we must note that any technology solution is like ‘garbage in garbage out’ Control towers (If) built on loosely coupled legacy systems where data is locked in silos, will result in latency at the foundation resulting in bad decisions at the end. You need to scale and make progress in areas like productivity, waste, analytics, customer efficiencies, cost optimization on a consistent basis else, you will never be able to rip the full benefits of Control Tower Technology.

EVENT RECAP

SIOM ICOSCM

Decoding Next Generation Supply Chains The recently held edition of SIOM, Nashik’s ICOSCM was a revelation in not only bringing the next generations of operations & supply chain onto a single platform from across the country, it also offered innovative ways of dealing with the change and how supply chain can be a great enabler for businesses to tide through tough times. Through this platform, SIOM provided an insightful display of extensive knowledge from across the globe. A report…

T

HE COVID-19 aftermath has resulted in companies facing the ultimate challenge in operations and supply chain management. With over two years under the pandemic and the respite seems to be nowhere in sight, it is quite clear for businesses that a newer or an evolved form of supply chain is required to meet the demand. The fact that supply chain management itself has become an instrument for competitive advantage reiterates the need for better and smarter supply chains. The growing impact of big data, arrival of economically disruptive technologies, increased volatility of business environment, increasing customer base are few of the trends, which are driving the need for smarter supply chains.

Therefore, the need of the hour for business is the evolution of smarter and sustainable consumer centric supply chain. Next generation supply chain will be more data driven and will redefine the way leadership thinks about supply chain management. This drives the necessity for more academic and scholarly work on the theme “Next Generation Supply Chains: Closed loop, Humanitarian & Technology driven” for which the recently held International Conference on Supply Chain Management (ICOSCM)

by Symbiosis Institute of Operation Management (SIOM) proved to be a great platform.

supplychaintribe.com

This year’s edition, which was held digitally, provided an efficient platform for academicians, research scholars, and other stakeholders to put in their perspectives and ideas on the current supply chain scenario. The main objective of this conference was to intrigue deeper insights into the challenges and innovations that are taking place in the next generation of the supply chain.

Dr. Vandana Sonwaney, SIOM Director and Programme Convener, highlighted, “Operations management has always been a challenging and exciting effort owing to its turbulent and uncertain nature. The Covid-19 pandemic has forced companies to evolve and find more innovative techniques to restructure and manage their supply chains to alleviate the challenges for businesses across the globe. There is a need for an extensive and exhaustive display of scholarly work from the

greatest and accomplished minds under the gamut of Operations Management.

Based on this very philosophy, we are extremely elated to have garnered a strong response for this year’s edition of ICOSCM 2022. I am sure the innovative ideas presented in the form of research papers by students from across the country will prove an ignition point for the supply chain renaissance in the country. We are confident that initiatives like these by SIOM will aid the industry in taking the right steps in this ‘New Normal.’

On his part, Dr. Ramkrishna Manatkar, ICOSCM Co-Convener, stated, “The after-effects of Covid-19 have made businesses realize that an evolved and sustainable customercentric supply chain is the need of the hour. There is also a need to leverage data to achieve more efficiency in the supply chain. Staying true to the current

37

EVENT RECAP business dynamics, this year’s conference offered a gamut of next generation supply chains with the underlying principles of being closed loop, humanitarian, and technology-driven.”

“During the conference, the researchers and practitioners elaborated in depth on the scope of technology in the Next-gen Supply Chain and the various methods that the firms should implement to build a sustainable future.

The conference, just like every year, also reflected upon the growing importance of operations and supply chain as a field of research and practice. This International

Conference has always been a trendsetter and we believe that the future editions too would carry on with the same momentum,” Dr. Manatkar added.

The event saw the participation of global academicians such as Prof.

Constantin Blome, Professor & Associate Dean Research at University of Sussex; Professor Thanos Papadopoulos, Department Research & Innovation Lead, Department of Analytics, Operations, and Systems, Kent Business School, University of Kent; Kannan Govindan, Chair Professor of Operations & Supply Chain Management, Head,

Centre for Sustainable Supply Chain Engineering, Department of Technology and Innovation, University of Southern Denmark; Dr. Subodha Kumar, Paul R. Anderson Distinguished Professor of Marketing and Supply Chain Management, Temple University’s Fox School of Business. These renowned operations & supply chain academicians threw intriguing insights on how companies should prep themselves for the Next Normal and the role of future supply chain talents in driving the change.

This year’s ICOSCM showcased over 50 incredible ideas in the form of paper presentations by international researchers, developers, and professionals striving to add value to the field of Operations Management. Best papers under the faculty, research scholar and industry participant categories were awarded a cash prize and other participants were given participatory certificates. Here’s presenting two winning entries to dive deeper into their research area and their slated impact on the industry…

competitive. With the role of technology increasing in organizations and helping derive insights, studies have shown that this increase needs to be coupled with flexibility, i.e., the ability to act on these insights quickly, to obtain a competitive edge.

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

Modelling the factors affecting Organizational Flexibility in MSMEs Jude Jegan J, Alumnus, Symbiosis Institute of Operations Management, Nashik

What's the inspiration behind this winning paper? How did this idea strike you?

The idea for this study came from the observation that many MSMEs in India are currently reeling from the effects of the pandemic and are either suspending or closing their business. Recent studies have highlighted the role flexibility plays in helping an organization stay

38 CELERITY March - April 2022

Our research revolved around analyzing the challenges MSMEs face when it comes to flexibility. Our study can help develop culture and processes in organizations that would help the organization stay competitive, collaborate with the supply chain stakeholders, develop products and offer services that the market demands at that period, thereby increasing their revenues and profits.

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

The immediate challenges that organizations face currently as identified from our research are abrupt manpower

shortages, raw material unavailability, rising costs and lack of financing. Our study can be used to build an organization that is less prone to inertia and has set up a culture where changes are welcome.

This, in turn, would help an organization scour for alternate sources in times of such difficulties.

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

As per the study we had conducted, the presence of competitors has been the biggest critical factor for building a flexible organization. Every action that an organization takes, be it building their technological capabilities or developing stakeholder relationships, all seem to be primarily driven by the motive to outperform competitors.

Our study also identified building trust amongst the supply chain as a positive step towards attaining organizational flexibility. This implies that every supply chain participant must act in a way that is mutually beneficial to all the other participants, and this belief can be catalyzed through collaboration.

EVENT RECAP Also, an adequate amount of risk-taking and innovation is vital to ensure that organizations are constantly open to exploring new markets, increasing the end-user base in the current market, and developing new products.

Assessing sustainable productivity of sponge iron firm using Malmquist Productive Index: A double frontiers data envelopment analysis Avishek Pandey, Research Scholar, Industrial and Systems Engineering Department, Indian Institute of Technology, Kharagpur

What's the inspiration behind this winning paper? How did this idea strike you?

The steel sector contributes approximately 1.5% to India’s GDP. It is one of the core sectors shaping the backbone of the economy, which employs about 25 lakh persons directly and indirectly. According to the report, India is world's 2nd largest producer of crude steel, producing 111.245 million tons (provisional) (2019) of crude steel with a growth rate of 1.8% over the corresponding period last year. The government has been taking necessary steps such as National Steel Policy (NSP) in 2017 to encourage the industry's rapid development to meet worldwide benchmarks. Hence, making the steel production sustainable and efficient is the need of the hour.

Despite being the largest producer of iron ore, India produces lesser steel compared to its competitors, because of improper utilization of available resources. This inspired us to study

supplychaintribe.com

“Uncertainty is the only certainty there is,” mathematician John Allen Paulos once wrote. The procurement and supply chain management industries are no exception.

Procurement leaders need to build on newer capabilities to help them navigate the changing business landscape and adapt quickly.

the resource utilization in various steel industries and proposed a benchmarking technique to find out the best performing industry. We believe our proposed method will enhance the productivity in manufacturing sector and help India become Aatmanirbhar (self-reliant).

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

Indian manufacturing sector’s performance is inferior compared to its competitors, primarily because of the improper utilization of available resources, be it human resources or raw material. Inefficient usage of resources reduces the firm’s competitiveness.

Unsustainable performance is a significant barrier to the economic development of a country. Thus, the proposed research helps the firms to create an efficient frontier for benchmarking and guides them to increase their effectiveness.

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

Supply chain is very complex network and involves various organizations. Each of these organizations has different and sometimes conflicting interests, capabilities, and skills. Hence, choosing an appropriate parameter to measure the effectiveness of the supply chain can be quite challenging. The proposed benchmarking approach helps the

supply chain to assess its status, identify performance measure and analyze the processes for best practices and performance improvement.

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

Various factors could play a role in the future supply chain of the steel industries and enhance their growth to create a sustainable and win-win environment.

One of them is Benchmarking and Efficiency Frontier analysis. Effective collaboration, engaging purposefully & providing transparency are the approaches that need to be given due attention. Incorporating IoT based tool with benchmarking techniques will help improve the modern-day supply chain.

Merging tools like Productivity analysis, Benchmarking, CrossFunctional Process Mapping, Vendor Managed Inventory (VMI), and IT solutions like ERP (Enterprise Resource Planning), EDI (Electronic Data Interchange) across the supply chain could be the key to gear up the supply chain performance in coming days. Digital Twin supply chain models with uncertainty and risk along with productivity analysis and continuous improvement in each echelon will be the scope of futuristic supply chain.

39

INTERVIEW

The

‘GOODNESS’ Affair “From a consumer’s perspective, there are only three supply chain metrices that matter in CPG products – Availability, Freshness and Pricing (which is influenced to an extent by cost). Supply chains, which are designed around managing these metrices are the most efficient ones and has the most business impact. Here at Mamaearth, this is exactly what we are attempting to build,” shares Avinash Dhagat, Vice President – Operations, Honasa Consumer Pvt. Ltd., during an interview…

How has CPG space evolved over the years with the entry of new players?

The new entrants in the CPG space have made a dent on all the three areas of what the consumers are buying, why are they buying and how are they buying. If we look at Mamaearth as an example of the new age CPG player, “what” here is the natural ingredient led products, which addresses specific consumer needs. Being a purpose led brand answers “why” the consumers are preferring the brand and the D2C route to market is “how” the consumers are making their purchases.

How has technology helped in shaping up the changing dynamics?

Technology has been the key driver of this evolution and when we look at it from the D2C lens, the technology led ecosystem has acted as a catalyst in accelerating the growth of these brands.

This ecosystem comprises of technology led enablers around fulfilment including pick pack process and last mile, around data led demand & supply planning and enabling the entire buying process for the consumer.

During your initial years in the corporate world, how was supply chain scenario? How were the supply chain professionals considered/ treated? How has it transformed over the years?

Supply chain function for a long time was looked at as a logistics enabler. Over the years, it has moved as a business enabler function wherein lot of organizations are now able to leverage supply chain as a competitive advantage. The evolution of how consumers make their purchases has played an important role in bringing supply chain at the forefront of solving business problems and the Covid crisis has further accelerated this. Amongst different business problems where supply chain across industry has been playing a pivotal role, few recent interesting ones are the quick commerce or same day/ next day deliveries, physically enabling D2C & omnichannel platforms.

You have been a part of FMCG for quite a long time? How can supply chains of FMCG products be efficiently managed?

From a consumer’s perspective, there are

40 CELERITY March - April 2022

Avinash Dhagat is a seasoned professional with over 15 years of experience across automotive and FMCG sectors, most recently as head of the supply chain at Loreal India’s consumer division.

Over the years, he has gained an in depth understanding of Demand & Supply Planning, Inventory Management & Customer Service, in India and GCC markets. After graduating from NIT, Warangal, he pursued his Master’s in supply chain and Logistics. With his pragmatic approach, he has been instrumental in making supply chain processes coherent and orderly.

INTERVIEW

The business landscape will remain volatile & uncertain and supply chains will keep evolving at a fast pace to enable the changing business landscape. The 4 enablers in supply chain will be – more connected supply chains, sustainability will emerge as a key focus, technology and data will keep playing a pivotal role and the talent in supply chain will evolve with more cross-functional skills.

only three supply chain metrices that matter in CPG products – Availability, Freshness and Pricing (which is influenced to an extent by cost). Supply chains, which are designed around managing these metrices are the most efficient ones and has the most business impact.

Here at Mamaearth, this is exactly what we are attempting to build.

Any global supply chain best practices that you would like to share that you emulate?

Global optima vs local optimization as a supply chain practice is something that I really believe in and in my opinion, companies which can incorporate this have always an advantage over the long term. A classic example around this is – let’s say if an organization tries to optimize its inventory without considering its impact on either upstream (i.e., suppliers) or downstream (i.e., B2B customer partners), while it may achieve its results of working capital or revenue in short term but always has an impact over long term. While there is no ideal state, it’s a journey, which is worth taking.

Companies are focusing on sustainability these days more than ever. How is supply chain tuned to that change?

In a product’s life cycle, right from how the goods are produced to how they are stored and transported to how they are scrapped – has a significant impact on the sustainability roadmap for an organization. And supply chains can enable it at each of these stages of a product life cycle. This aside, sustainability has a much larger scope, for example, apart from the environmental impact, it also looks at the social, economic, and human impact and here at Mamaearth, this is

supplychaintribe.com

what we focus on. One such example is the Plant Goodness initiative.

How do you foresee the supply chain landscape few years from now?

The business landscape will remain volatile & uncertain and supply chains will keep evolving at a fast pace to enable the changing business landscape. The 4 enablers in supply chain will be – more connected supply chains, sustainability will emerge as a key focus, technology and data will keep playing a pivotal role and the talent in supply chain will evolve with more cross-functional skills.

What should be the traits of the new age supply chain managers who want to manage this change?

Supply chain roles have evolved over the years from a back-office logistics management role to now helping solve specific business problems around enabling the right route to market for any brand. And this would need the new managers to build more cross-functional skills around business understanding, data & analytics and at the same time, having a strong bias for execution.

41

PERSPECTIVE

Revitalizing the

‘NERVE’ OF BUSINESSES We are witnessing a clear shift from linear supply chains to more integrated networks connecting many players as an aftermath of the Covid-19 pandemic. As hailed by global supply chain experts, the supply chain of the future will need to be agile, flexible, efficient, resilient, and digitally networked. The recently held Tattv’22, the Annual Operations Summit – flagship event organized by SIOM, Nashik, dwelled on redefining the overall supply chain strategy, the need for increased visibility, and chartering new paths. The panel discussion, ‘Omnichannel Supply Chain,’ hosted during the summit, offered fascinating experiences of companies, and deciphered how they circumvented the most unprecedented times and emerged successfully to not only survive but also thrive. Here’s offering a perspective of their thought-provoking discussion...

Elon Musk

once stated a very interesting statement, “The supply chain stuff is really tricky.” But for me, I am a firm believer of the people who have stated that Impossible is Possible in the supply chain. For me, the supply chain is like nature, and it exists everywhere.

The past couple of years have thrown some unforeseen challenges and forced organizations to adopt omnichannel supply chain strategies. Citing the positives, the supply chain has helped us build resilience and the power to innovate. It has made us believe that sky is not the limit, especially looking at the e-commerce numbers, which have touched US$5,500 bn in 2021.

The COVID19 possibly was one of the worst pandemics in history that has successfully devastated the economy. It has uprooted the normal and forced industries to innovate and build resilience. Different industries demonstrated different impacts during and post the pandemic. While some reported negative growth, others went on to book record profits. But there

42 CELERITY March - April 2022

was one common point across the manufacturing and retail industries, i.e., a completely stressed supply chain with a shortage of resources. Under such circumstances where consumers were thoroughly confused, industries had some tough choices to make. Adopting to Omni-channel strategy became one of the recommended alternatives, while consumers expected trust, transparency, and experience at all channels. Delivering at customer location becomes a norm, even though the customer ordered through different channels such as web, in stores or via a call center, etc.

Organizations were forced to redefine their customer experience strategies, offering omnichannel experience, balancing supply and demand, and simultaneously remain profitable.

This provoked out of the box thinking not just at an industry level but also for individual organizations. I clearly observed five distinct actions taken by the organizations to ensure customer experience and profitability at the same time.

Dr. Samir Yerpude, Leader – Digital & Connected Customer, Tata Motors Ltd.

1. There was a clear disruption in demand and stress induced in the supply chain. Organizations segmented their product lines along with the customers identifying the most profitable ones that would induce stabilization and growth.

The skill set required was analyzed

PERSPECTIVE and regrouped to understand and build mitigation strategies for such disruptions.

2. The safety of the organizational human capital was secured by way of providing the necessary health services and vaccination coverages.

Physical health and mental wellbeing of the resources guaranteed the necessary support to the organization.

3. The entire ecosystem was reconfigured and new contracts were created across as required, with the players in the chain including the vendors suiting the omni-channel strategy.

4. Short- and long-term plans were

Mr. TK Balakumar, Chief Operating Officer, BigBasket

Ever since the pandemic has hit us, organizations have started looking out for alternatives to serve its customers. What measures did BigBasket take to sustain as well as improve the business performance?

When the PM announced the national lockdown in March 2020, the very next day, it was almost near collapse for us in terms of operations. Earlier we used to deliver about 2.5 lakh orders per day.

Once the lockdown was announced, next day the capacity depleted from 100% to about less than 20%. Even the 20% who were ready to come, were not able to reach office because of the strict lockdown and no availability of transport.

supplychaintribe.com

drawn to capitalize on the situation including re-deployment of resources as required to warrant flexibility and agility. Fail fast strategy adoption encompassing quick decision making across the different channels benefitted the organization.

5. Introduction and implementation of Digital Technologies in the IT landscape powered the businesses with data for the generation of insights. Systems were configured to deliver the omni-channel experience to the customers. The organization was equipped with cognitive capabilities, which in some cases, were also extended to automatic decision making with the help of AI

technologies.

To ensure longevity, organizations need to be foresighted. They should constantly validate the business operating model to assure continuity and growth. Future proofing of the supply chain to encompass agility and higher customer satisfaction levels is critical.

Superior customer experience is not accidental in an omnichannel ecosystem, but a result of constant efforts and a customer centric strategy interwoven with the organization DNA. Customer experience proves to be the new brand and will be the key driver for the growth of the organization.

In that scenario, we were left wondering how we should manage problem of such magnanimity. To top it all, customers’ expectations were quite high as we had come under essentials category. On one side, the demand was shooting up to the tune of 5X-6X with people also unable to venture out of homes, and on the other, the capacity was reduced to 1/5th of we used to have. It was an extremely tough situation. Additionally, there were newer and newer government directives every passing day, making the operations even more complex. Having said that, we quickly got into act. We started working on the mantra of ‘Doing More with Less’.

We revisited every aspect of our business starting from technology, server capacity, people capacity, inventory management, serving more customers, to name a few.

We had to even take a call to shut down online traffic for some time at some places where serving the last mile was not possible. In fact, in the cities we were operating, we had to say No to new customers because it was important for us to serve our existing customers first at that time. In about a couple of months, we were able to completely rebuild the capacity that surpassed our own numbers that we had thought of. There were various instances where we had to deploy our vehicles to pick up goods from our vendors because vendors didn’t have vehicles nor they had permissions. We had to collaborate at a very high level

to make sure that we turn these tough times into opportunities and ensure winwin for all. The first wave of pandemic was extremely challenging for us just like any other business. Thankfully, during the second wave, we had the expertise and the understanding to manage the unprecedented scenarios. We are happy to share that we have almost achieve 2X business till date than what we achieved in the year 2020.

Customers today are expecting convenience, low prices, quick delivery, and so on. How can businesses create a differentiated supply chain strategy that includes omnichannel fulfilment capability and the right omnichannel operating model?

In India, market size is a huge advantage as well as disadvantage. The disadvantage is that you can get lost in the process which is where I feel that while convenience is the key driver.

Companies who were earlier reluctant to take online route had no option but to switch to this channel at the onset of Covid-19 pandemic. The critical success factor for me is about segmenting the target groups and accordingly follow the key parameters required for the success of your business, which include assortment, clear communication with the consumers, and effective pricing.

Once the Covid-19 dust settles down,

43

PERSPECTIVE I believe there will be concerted focus on unit economics to drive sustainable growth. During this journey, one can’t overemphasize the importance of technology adoption and its role in an all-encompassing growth.

What do you have to say on multiechelon strategy in omnichannel supply chain?

The multi-echelon strategy is something that has today become the need of the

Mr. Jayanta Ghatak, Head – Supply Chain, Payed

Omnichannel shopping is becoming the new norm. it’s quintessential that the retail customers are expecting impeccable service. Doing so, what do you think is required to build a new supply chain?

When we talk of omnichannel, there are 2-3 things that come to our mind – is it a brick & mortar store, a website, a marketplace. I think there are lot more alternatives available today such as telecall, pop-up stores, retail DC, etc.

There are multiple channels through which retail companies look to ensure customer satisfaction. Key objective of any business is keeping the customers at the forefront and offer them the convenience they are looking for.

Customer looks for a seamless shopping experience, flexible delivery options, easy goods return policy, free delivery, so on and so forth. Keeping everything in mind, we need to keep in mind the

44 CELERITY March - April 2022

hour for omnichannel. For me, everything boils down on 3C principle – Customer Experience, Capacity Management and Cost Optimization. Keeping these three principles in mind, it’s necessary that we start consolidating omnichannel SCM strategy so that you can use the same to grow your scale with various suppliers and get the better on your margins.

Companies should deploy business analytics to gauge customer preferences, which will ultimately help in keeping the

right inventory in place. We need to focus on intelligent customer insights, data analytics to continuously finetune your supply chain strategy. Ultimately there are these key parameters that companies need to imbibe in order to sustain and survive in challenging times – Be nimble footed, continuously use technology; and draw insights regularly from consumer behaviour to action them to go after your business goals.

building blocks that organizations need to think through in order to offer a seamless omnichannel experience to customers. You need to also think about the information flow. You need to keep in mind the physical flow of the stocks or movement of products. You need to think through the process automation parameters that you are planning to build to serve the demands of customers.

You need to strategize the nodes of last mile delivery and how can you leverage the information flow and the partner assets. These are the key elements to consider while designing the supply chain network. We clearly understand that ‘One size doesn’t fit all’. One must keep in mind the category they are working in because an essential product might require the fastest delivery while a lifestyle product can wait for a day or two. Accordingly plan your supply chain network. It’s a barter between the cost and the convenience and to ensure that you mitigate them.

for returns. When a customer plans to return the goods received, that customer must be dissatisfied. It directly puts a question mark on the customer retention policy of the company. There are chances that the customers have received a wrong or damaged product, a wrong sized product, or the specifications mentioned on the website are not matching the product delivered. How can companies control these aspects?

First & foremost, companies need to work towards developing tamper-proof packaging to ensure that the goods reach to the customer in safe & undamaged condition. Inventory management and process automation must be in sync so that the wrong delivery of items can be avoided. Companies need to bring in warehouse management software so that there are checks & balances, and you are not shipping out the wrong product.

How do you plan for unforeseen circumstances of returns which directly impact customer experience?

We must determine the controllable and uncontrollable factors. In the logistics and ecommerce parlance, the returns are classified into two categories – nondelivered returns & delivered returns.

Companies need to deep dive into the reasons for returns. When you look at reasons associated with online platforms, we find that most of the orders are COD orders, therefore customers could return it, which are counted as non-delivered returns. In case of delivered returns, companies need to find out valid reasons

What do you think about Communication as a very important pillar of an omnichannel supply chain strategy?

One of the key facets of omnichannel is that the channels interact with each other. Otherwise, an omnichannel will not remain an omnichannel but will turn into a segmented multichannel approach. Communication is all about perfect integration between each other to harmonize the entire omnichannel ecosystem. This is where new age technologies have a major role to play.

PERSPECTIVE Digital technologies enable customization in a very effective way.

What is the role of technology in delivering an omnichannel experience keeping the sanity of the supply chain?

Omnichannel is no longer a corporate buzzword these days. It is just not a ‘Good to have’ business plan, it is a MUST to have to survive in the current times.

That’s the approach that Ecom Express Ltd., has also adopted. Omnichannel is a multichannel approach to sales that focuses on providing a seamless customer experience irrespective of where the customer is shopping from – online, offline or click & collect format, social media, etc. It is also about lead nurturing and user engagement approach. There are four basic tenets of a successful omnichannel strategy – it should have an integrated supply chain strategy; inventory transparency across all the channels; technology footprint; and right alignment of the operations strategy with the marketing strategy.

Omnichannel is not about shopping or ecommerce alone. It is also about enhancing customer service whether it is through chatbots, customer care number, email communication, or an in-person approach. It can also be a sales strategy or a marketing strategy. Omnichannel is a multifaceted coordinated approach to move products end-to-end. The purpose of omnichannel approach would be to strike a perfect balance between customer satisfaction and inventory management.

This requires an end-to-end visibility.

To get there, retailers will need to break their silos. They will have to merge and sync all their independent entities and be all-inclusive with the help of inventory management. The right approach requires technology that enables inventory to flow and be managed to enable complete visibility throughout the supply chain. To enable the change, brands will have to start early. They must ensure that their website, order management system, and warehouse management system merges with the logistics provider management system. Unless that happens, probably there will be several breaks along the path. For that to happen, there would be additional expenses for hardware and software. It requires advanced planning, consultation in terms of hardware &

supplychaintribe.com

software. Warehouses must be prepared to take care of stores and web-based orders, ensure that there are no gaps in fulfilment and delivery.

Organizations achieve high level of resilience and also survive large disruptions. Under such uncertain business environments, what do you think organizations should do to adopt to omnichannel supply chain and what role does technology play in the same?

To adopt omnichannel supply chain, retailers will have to remove the operating silos that exist today. The way forward is to gain efficiencies by combining all the elements of omnichannel supply chain together such as merging warehouses, locating warehouses from where the demand surges, in order to maintain inventories both in-store as well as ecommerce business platforms. It should constitute a distribution system that drives forward as well as backward logistics. In this journey, we need to ensure that we pick up the right product.

At Ecom Express, the entire process is App-enabled, which has all the features and capabilities to correctly identify the products to be picked up. It ensures a seamless process and a happy customer at the end of the spectrum, which is the very key of our businesses. Companies also need to accurately anticipate demand as far as possible to ensure availability, manage lead times across channels. Another very important aspect to manage in omnichannel business environment is inventory transparency.

It’s a cohesive multichannel approach and experience which ensures that customer has easy access to inventory. Companies also need to ensure that inventory at one of the channels is not over exceeding whereas the other channel is starved of that same product, which eventually also amounts to business loss. A robust data management system would enable a right balance between the channels and innovation across all business practices.

Companies need to be agile enough to move inventory from one channel to another and this is where technology plays an enabling role to help integrate product platforms, customer engagement channels and back-to-back supply chain.

Mr. Subhrajit Majumder, Vice President, Ecom Express

What is your view on segmented supply chain and its impact on omnichannel strategy?

Segmentation is about maximizing customer service and company profitability. Companies can achieve this by having different supply chain strategies in place for serving different customers associated with different channels and different products ultimately based on the value to the organization. This simply implies that ‘one can’t have one size fits all strategy’. The goal must be finding out the right supply chain process and policy to enhance customer experience.

A segmented approach helps companies to prioritize specific segments for customers.

45

RECAP

Trending GL BALLY Edible Garden Greenthumb™ Agtech solution drives sustainability impact for Walmart Project Gigaton Edible Garden AG Incorporated's patented Agtech solution, Greenthumb™ helped drive Walmart's Project Gigaton goals in 2021, leading Edible Garden to be named a Project Gigaton "Giga Guru." Project Gigaton is Walmart's initiative to remove emissions in the global value chain by 1 billion metric tons – a gigaton – by 2030.

Edible Garden's highlighted performance as a Project Gigaton "Giga Guru" included: recycling over 38 tons of cardboard, saving 21,000 gallons of gasoline and conserving over 500 barrels of oil while avoiding a total of 442 tons of CO2 in emissions.

The patented GreenThumb software application allows Edible Garden to reduce waste and spoilage, tightening the food chain while fulfilling customers' needs. Greenthumb is a tool that is used by Edible Garden's greenhouses and their partner farms to cut waste and build efficiencies into operations. "This is a full enterprise solution we've rolled out across our partnered greenhouses, where each greenhouse will cross reference each other," said Scott Prendergast, Chief Data Officer. "We continue to promote traceability, food safety, and reduction of food miles and this application optimizes all of these areas."

Scotch & Soda’s sustainable packaging drive In December 2021, Amsterdam-based men's and women's clothing brand Scotch & Soda announced plans to introduce sustainable packaging (for delivery packaging and in-store). The brand has said that, by the end of 2022, it will package at least 1 million of its garments globally with bioplastic bags – a form of biodegradable packaging made from corn starch and sugar cane that has been created in collaboration with sustainable packaging company TIPA. It is currently using plastic polybags and has already had of 1 million pieces packed in TIPA’s compostable packaging solution and continue to increase the number further for the following seasons. By 2025, it aims to eliminate the use of conventional plastic polybags from all product categories.

Jelle de Jong, sustainability director at Scotch & Soda, shared, “Last year, we partnered with TIPA – an innovator and manufacturer of compostable packaging. It has developed a material that is 20% bio-based and 80% fossil fuel-based, biodegradable, fully compostable and mimics the protective characteristics of plastic. In addition, we believe there is room for improvement when it comes to the collection and composting of bioplastic packaging in the fashion industry. By working with TIPA and local waste processors, we aim to promote the process of composting and make a selection of our stores part of a global infrastructure supporting this initiative.”

“We will encourage recycling of our compostable packaging at selected stores. We hope a product, traditionally considered waste will, through the composting process, return nutrients to the soil,” he explained.

46 CELERITY March - April 2022

Robots support Nike’s supply chain logistics Nike’s supply chain has been disrupted in the pandemic, but new ‘collaborative robots’ will help achieve sustainability ideals & hit customer expectations. Nike has installed over 1,000 robots to help ship out orders from its distribution centres. Nike has welcomed the robot fleet due to COVID-19’s disruption of the global supply chain.

Cobots are now supporting Nike’s factory employees with sorting and packing sportswear products, as some human employees remain too sick to work. “Our new Court Distribution Centre represents Nike’s continued investment in a fast and flexible supply chain to deliver the full range of our product to consumers when they want, where they want it,” commented Eric Sprunk, Chief Operating Officer, Nike. Nike has revealed that the robots have helped the company to triple its digital order capacity in North America, Europe, the Middle East, and Africa.

In a recent report, Nike admitted factory shutdowns in Vietnam and Indonesia due to Covid-19, caused the company to lose three months of production during the first quarter of fiscal 2022.

Vietnam supplies 51% of Nike footwear and 30% of its apparel.

In Indonesia, 24% of Nike’s footwear is manufactured alongside 12% of its apparel. The firm is determined to eradicate waste from its supply chain over the next five years and to become zero carbon by 2025.

RECAP A sustainable shipping supply chain must have low emissions With three-quarters of Green House Gas (GHG) emissions being associated with supply chains, the pressure is on for leading companies to find ways to drive down emissions beyond their own operations. According to the US Environmental Protection Agency, more than 75% of GHG emissions associated with most industry sectors come from their supply chain. It is a longstanding issue.

The mining and shipping industries in particular face major challenges in creating economically sustainable supply chains.

McKinsey reports that it would take 41 fully dedicated zeroemission vessels to decarbonise all iron-ore trade between Australia and Japan, for example, while the first Ammoniapowered ship is unlikely to enter service before 2025.

There are 90,000 ocean-going cargo ships travelling the ocean around the world, weighing up to 2,300 tonnes each. These ships bring retail items to their final destination, from computers to clothing, food to beverages. In the globalized age, items from a factory across the world can be on the shelf of your local supermarket after a few months at sea. The shipping sector accounts for an estimated 80% of all trade, but this comes at a cost: • Shipping is responsible for 18-30% of all the world's nitrogen oxide (NOx) pollution • 9% of the global sulphur oxide (SOx) pollution • Shipping is responsible for up to 4% of all climate change emissions But that is starting to change. Oldendorff Carriers, a German shipowner, has announced a trial voyage using biofuel on the Edwine Oldendorff, from Australia to Vietnam. This is expected to create 15% less emissions compared to traditional fossil fuels.

Green shipping lanes will create sustainable shipping As recently reported in Supply Chain, a report from McKinsey (which included contributions from maritime bodies) suggested that much-needed sustainability changes could be made in freight shipping, through the introduction of green shipping lanes.

The report ‘The next wave: Green corridors’, highlighted, “Green corridors could create secondary effects that reduce shipping emissions on other routes. For example, once the infrastructure to provide zero-emission fuel for one green corridor is in place, it can then be used for shipping on other, adjacent routes.”

But Australian mining giant BHP is beginning to make a dent in its supply chain GHG emissions, by reducing transport times for the shipping of supplies from Singapore to Western Australia by six days. This will cut GHG emissions by up to 75% on the route.

BHP has been trialling direct shipping through Singapore to Port Hedland in Western Australia since 2020. It will now ship 7.5% of the containerized supplies it receives into its Western Australian Iron Ore operations (WAIO).

Before the trial, BHP supplies for WAIO were shipped to the Port of Fremantle, before being transported 1,650kms by road to Hedland. The direct route is expected to keep around 900 trailers off the route from Fremantle to Port Hedland.

A recent report by leading independent economics advisory firm, ACIL Allen, estimated that near-port freight efficiencies could be worth around US$5mn a year, while imported cargo freight efficiencies are in the order of US$60mn per year.

supplychaintribe.com

Just 3% of organizations escaped supply chain disruption in 2021 The research, conducted by 3Gem, found that companies are unsure about what the future holds, with 37% of organizations concerned about the long-term implications of the COVID-19 pandemic on the supply chain. This is followed by Brexit (24%), a pressure to be more sustainable (19%), the changing regulatory landscape (12%) and a lack of investment (7%). Factors outside of company control and the resulting consequences varied from company to company, with organizations facing customer delays (59%), stalled production (44%) and staff shortages (40%).

As a result of this disruption, the supply chain has become a priority for nearly two thirds of businesses (63%).

“Businesses are right to feel concerned when it comes to their supply chain,” says Wayne Snyder, Vice President, Retail Industry Strategy, EMEA, Blue Yonder. “In 2021, we saw unprecedented disruption, and as we look ahead, several macro factors on the horizon are likely to drive further interference. To stay ahead of today’s supply chain complexities, organizations need to be able to plan intelligently, while having the visibility and flexibility to respond at pace. This can only be achieved by having a real-time, end-to-end view of the supply chain that leverages technologies such as artificial intelligence (AI) to recommend and optimize actions.”

The positive news is that organizations clearly understand the impact of disruption and are proactively managing concerns by investing time and resource in the supply chain. Blue Yonder’s research found an overwhelming majority (83%) of organizations have increased investment in the supply chain over the last 12 months, with one in 10 organisations (11%) investing more than $25m.

Technology is the common factor when it comes to spending this investment. When asked about how they invested budgets, 86% of organizations invested in technology, followed by developing new skills and defining a new supply chain strategy (60%). Interestingly, over half of organisations (58%) also invested in the sustainability of the supply chain.

When asked about the technology that would have the most significant impact in reducing disruption, 67% of organizations believe that having the ability to view and manage the supply chain from end-to-end will help them manage disruption better. This is followed by advancements in AI technology (53%), new types of delivery options powered by the likes of robots and drones (43%), and the use of technology to better manage their workforce (42%).

The study also showed that more than two-third (68%) companies state that planning, forecasting, and inventory management were their most important areas for technology investment, with end-to-end supply chain management and AI technology deemed critical by more than half (53%).

47

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