SCMPro September 2015

SUPPLY CHAIN MANAGEMENT PROFESSIONAL 10thSep 2015 | Volume 1- No.6 | Rs.200

Supply Chain Analytics – Making Sense of Data LSP FOCUS

TECH TALK

HUMAN RESOURCE

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Technology Alignment – Creating Synergies for Business

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editorial Three Problems – One Solution We are bu eted by three ma or challenges the rst is the looming drought in many parts of India. This is the second straight drought year for India not a good sign. Expect in ation to rise. The other is a slowdown in China. This has some bene ts for India in terms of lower commodity prices.

And the third is the imminent rate hike by the ed, which may cause a u er in our stock markets. Three problems one solution Make in India It is high time we reali ed that India cannot a ord to keep focusing on agriculture as a The structural means of employment. The only sure way to reduce poverty imbalances that and improve the lot of the farmers is by creating a vibrant manufacturing sector unleashing the animal spirits of the face us cannot Indian entrepreneur. be resolved

with short term measures. Hope the government stays true to the course.

That is what China did moved its population from rural heartland to cities and provided them employment in the manufacturing sector. nfortunately, we spend more time in focusing on the gibberish of the fringe elements, ignoring the more pressing ma ers. We need to reali e that as we industriali e, these fringe elements will lose their relevance and will be marginali ed. y focusing on them, we are encouraging them.

This issue we are carrying a report on the rst Rural and Agricultural Supply Chain Summit we organi ed. And next month we are having the rst SP summit and Awards 2015.

Hope to see you there Please see our website for more details.

Happy Reading

GIRISH V S

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content Feature

Sept 2015 | Volume 1 | No. 6

06 SCM News

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28 LSP Focus

To save more, you need to invest more

38 Tech Talk

Technology Alignment – Creating Synergies for Business

Lead story Supply Chain Analytics – Making Sense of Data

Feature Technology - An Important factor to protect your Supply Chain from Fire and Security threats Gopinath Kozhissery

24 SME Corner Disrupt Yourself Before Someone Else Disrupts You Vinay Goyal

26 Event Rural and Agricultural Supply Chain Summit

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42 Tech Talk

RASS

A Strategist’s Guide to the Internet of Things

44 Human Resource Hone your sales pitch Job Seekers

48 SCM Updates 4

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SCM News

APICS SCC Study Defines People and Partner Impact on Supply Chain Complexity Supply chain excellence depends on the alignment of physical resources and social relationships for optimal performance.

APICS Supply Chain Council (APICS SCC)recently released its latest industry report that sheds further insight on the intersection of supply chains and complexity theory. Complexity Theory, Sentiment and Supply Chain Organizational Behavior discusses the human perspective and the individual and trading partner relationships that are sometimes not sufficiently visible in supply chain management.

“We see supply chains in terms of intricate but predictable flows of products, process, information, and finance,” said Peter Bolstorff, APICS SCC executive director. “However social relationships (both personal and organizational) between suppliers, producers, distributors, and customers—all of whom have their own needs, goals and strategies—create another dimension in an already complex supply chain system. These factors can ultimately result in unpredictable challenges that need to be overcome.”

The APICS SCC report describes the difference between complicated and complex supply chains as follows: Complicated: If supply chains were fully automated machines, then the flows of products (or services), information and finance would merely be complicated.

Complicated systems have many moving parts that interact with each other in fixed or tightly defined and predictable ways. Should a breakdown occur, it is typically possible to make repairs by restoring the broken component. Examples of complicated systems are

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mechanical wristwatches or jet engines.

Complex: Complex systems have many moving parts that interact, but these parts do not have fixed interactions and dependencies.

In most supply chains, partners and stakeholders do not behave like gears in a machine. Their behavior and decision-making processes are not fixed. Changes in relationships can produce subsequent changes in decisions, plans, trust, and confidence that can produce effects elsewhere along the supply chain.

Managing complexity across the supply chain ecosystem Today’s supply chain professionals must thrive in complex systems and add value by working with, not against, complexity, which calls for a combination of supply chain management and leadership, as well as insight into supply chain organizational behavior.

The report identifies sentiment as a means to manage complexity, which it defines as enduring but not permanent attitudes toward partners and practices in a supply chain system. It is a tool for learning ways complexity and relationships may be evolving, capturing human opinions, changing confidences and identifying perceived challenges and new variables among supply chain partners.

Effective supply chain professionals watch for potential causes of changing relationships.

Capturing supply chain sentiment on a regular basis can offer early warnings of this potential and allow for communications with partners, and analysis of potential impact to supply chain performance.

“Fundamental to APICS is the understanding of both the supply chain professional and the supply chain organization; we try to add

to that body of knowledge every day,” said Bolstorff. “Today’s report allows us to better define the impact of relationships on supply chain performance and use the tenets’ of complexity theory to more effectively manage to desired outcomes.”

(Source: www.apics.org/sites/ apics-supply-chain-council) Geo-Political Developments cause for a Pull Back from Outsourcing Recent global turmoil – from Europe, to China to Latin America is fueling the trend to near-shoring. A survey conducted by Alix Partners among US respondents reveal that the stability and security of some popular (read China) or potentially promising locations are in decline. The survey shows that 32% have already nearshored or are in the process of doing so to meet end-market demand. Of the company leaders surveyed, 48% said nearshoring activities are likely within the next one to three years. According to the report, “ even with clearly sustained North American and western European interest in nearshoring, levels of enthusiasm are tempered by concerns about stability and security in both established nearshoring locations—such as Mexico—and emergent regions, such as North Africa and the Middle East. Those worries dampen efforts by North American companies that want to make use of Mexico’s developing infrastructure, and they could squelch western European companies’ growing interest in North Africa and the Middle East as potential sources of attractive labor rates and capable workers.

Eastern Europe clearly benefits as the preferred nearshoring destination for Europe-bound goods.”

(Source: a report at www. alixpartners.com)

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Feature Lead Story

Supply Chain Analytics –

Making Sense of Data

All large Indian firms and most of the SME firms have implemented some kind of enterprise solutions.

Some have invested millions in state of the art solutions, while others have home grown solutions. The end result – they have a whole lot of data sitting in their databases – data which can give them an insight into their supply chain. Add to that the proliferation of social media, and we have suddenly zoomed from less data to too much data. For this month’s theme, we chose the area of supply chain analytics – an area that holds a lot of promise, but is quite complex to implement. Where everyone seems to have a program going, but few are seeing major benefits. As an introduction to the series, we bring you a few success stories from across the world – stories that we hope will enthuse you to begin your own analytics practice.

Supply Chain Analytics Saves Tesco GBP 100 Milliion In 2013, Tesco embarked on an ambitious plan to use supply chain analytics to reduce costs. For a retailer, the biggest cost is inventory.

Reducing inventory can bring in huge

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savings. Tesco has listed three ways in which it has saved GBP 100 million over a year. Using a readily available toolkit, and demand forecast data, Tesco saved GBP 50 million by optimizing inventory. Similarly, Tesco used weather data and sales patterns to identify the effects of changes in weather on demand for products, creating a savings of GBP 6 million. Similar algorithms were used to understand demand patterns to sale offers. Another area where Tesco used algorithms was on end of shelf-life products – the systems automatically marks down products near the end of their shelf life, cutting wastage by GBP 30 million.

Improving Sustainability through Analytics – The Unilever Experience

Other areas where Tesco has used the power of analytics is in understanding their supply chain.

Tesco created a model of their supply chain and simulates the impact of changes in supply chain on their sales, to figure out what works and what does not. Simulation is also used for assessing the impact of best practices within a store. Clearly one store which has harnessed the power of analytics in a big way.

Apart from its own internal goals, Unilever has to abide by the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) regulations by the European Union. To achieve these twin objectives, Unilever needs a robust, well run and highly visible supply chain. Unilever has implemented a supply chain analytics platform that enables line managers to track their supply chain efficiency in real time. One

Unilever, the Euro 50 Billion firm believes that sustainable growth is the only true growth. As a part of its Sustainable Living Plan, it has set itself three goals to be achieved by 2020. They are: • Help more than a billion people to improve their health and wellbeing.

• Halve the environmental footprint of our products.

• Source 100% of our agricultural raw materials sustainably and enhance the livelihoods of people across our value chain.

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of the fall out of this was the 80 percent reduction in tracking efforts.

Unilever uses real time transaction data (reported to be around 30,000 transactions per second across its value chain) to make operational decisions on product pricing and profitability.

clinical data, it’s exploring the possibilities. The health system is first looking to integrate data analytics processes more deeply into the financials, budgets and capital project management” says Kimberly Martin, manager of application development.

Analytics in a Hospital Supply Chain

Analytics in Supplier Relationship Management

Catholic Health East (CHE) runs a chain of 32 Hospitals in the US. CHE uses supply chain analytics to fine tune its supply chain and keep tabs on its vendors in real time, across its network. CHS uses business intelligence to human resources, supply chain and financial information to create efficiencies.

The system collects supply chain data from across the network hospitals and assigns them to its vendors distribution centers based on timely delivery and completeness of fulfillment. The system also helps the users check if there is any discriminatory pricing between the various hospitals.

Supplier Relationship management is one of the triad of a supply chain macro process. This is a complex issue for even a medium sized firm.

The scope of SRM spans product development, capacity planning, quality of deliveries, risk assessment, pricing, commercial terms, timeliness of delivery and ability to innovate. This calls for a flexible system which can use structured and unstructured data from disparate sources. Spend analytics is a branch of supply chain analytics that can identify cost saving opportunities, supply risks, and non-conformance to contract and payment terms.

“While Catholic Health East hasn’t yet embarked on applying its supply chain data analytics methods on

Apart from these specific examples, there are numerous examples of the use of analytics in supply chain. An article from Ingram Micro Advisor

mentions the case of a manufacturer using big data to reduce risk in delivery of raw materials, no matter what happens in the supply chain. Using big data analytics, the company has overlaid potential delays on a map, analyzing weather statistics for tornadoes, earthquakes, hurricanes, etc. Predictive analytics allow the company to calculate the probabilities of delays. The company uses the analytics findings to identify backup suppliers and develop contingency plans to make sure production isn’t interrupted by natural disaster.

As you read through the articles we have collected for you in this issue, we hope, we can convey to you the power of analytics. As a parting comment, analytics does not need investments in huge solutions. The best way to begin exploring the power of analytics is to start with the humble spreadsheet, and once you master the nuances of analytics, then look for a powerful tool. Else, the tool will be underutilized and the power of analytics under-utilized.

Happy reading..

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Lead Story

Business Intelligence and Supply Chain Analytics

An Epidemic called DRIP From being data poor to data rich – the Indian supply chain sector has come a long way. Along the way, we seem to have lost the ability of making sense of the data. We are now moving on to an interesting phase of our evolution – an era where powerful computing and sound business sense will drive our ability to convert the data into information. Vikram Mansukhani; Head Business Development & Corporate Services; Drive India Enterprise Solutions Limited writes about this new phase.

Vikram Mansukhani Head Business Development & Corporate Services Drive India Enterprise Solutions Limited

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A large number of organizations today suffer from an epidemic called DRIP (Data Rich Information Poor).

With a huge increase in the volume of transactions and the availability of cloud storage, there are terabytes of data doing cartwheels in front of

supposed decision makers who quite often have no time or the ability to make any business call based on this endless barrage of floating, erratic, changing data. Let’s look at the classical definition of information Data that is (1) accurate and timely,

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Lead Story (2) specific and organized for a purpose, (3) presented within a context that gives it meaning and relevance, and (4) can lead to an increase in understanding and decrease in uncertainty can be termed as information.

Information is invaluable because it can significantly affect behavior, a decision, or even an outcome depending on when the intervention is done. Taking cue from the basic traits of information needing to be accurate and timely, specific and organized it requires a discerning eye to distinguish between meaningful and “dump� data so that it can then be channelized towards business intelligence and analytics. The obvious question then is, do I know what drives my business and which levers I need to constantly pull in order to get the desired results?

A defined set of key performance metrics needs to be decided upon so that these are regularly recorded, reviewed and reinvented as the needs of the organization change.

Some additional fundamental decisions to be taken are what platform will be used to capture this information, would this be information that is based on human input or scan based activity or high speed sensors capturing every movement that happens.

In the supply chain arena, every 1 % of cost saved could well be a game changer in the market shares for a customer and for the service provider. This saving beyond a point cannot be driven based on past experience, legendary knowledge or pure gut. It requires a dynamic optimization of resources based on seasonal, geographical, SKU level trends preferably with some level of forecasting capabilities attached to it. Optimum utilization of manpower, machine, vehicle, space,

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infrastructure and electricity are the key ingredients of providing the most cost effective solution to get the product to market. If any of these key ingredients is left unattended,

the impact on cost and service levels could be lethal. Just as in the ecommerce world of e-tailing, the consumer experience has shifted from brick and mortar interactions to the swish of a finger, logistics is increasingly moving towards electronically remote controlling activity on the ground. Quite clearly, this electronic web of order issuance, order picking, transportation and tracking on the last mile, leaves very little in the hands of the ground operator to decide based on his willingness or capability. If an order is directed onto the handheld device the operator must ensure the pick is done and that too in an acceptable amount of time. If a geo fencing based route is set for a truck to travel from Mumbai to Delhi, the truck driver needs to follow that route or run the risk of penalties being levied for deviation. All of these cutting edge technologies that have been introduced into the logistics space in the last few years ride on the back of a very high level of information availability and sharp analytics of trends and forecasts. Without a doubt this precise direction to operators, minimizes time to train and execute while ensuring that reliance on process triumphs over

reliance on people.

On the last mile delivery piece of supply chain especially in the B2C segment, data analytics has proved to be a massive boon on how orders are dispatched to the customers in terms of time of the day, packaging quality, capability and tools provided to the delivery staff, size of vehicle to be used, recording of COD transactions, pre alerts sent to the consignee, setting up of pick up points and using crowd delivery techniques.

All of these data analytics continue to upscale the user experience by trying to make it more and more convenient to shop from anywhere there is internet connectivity and incessantly increasing the choices available. Based on the preference shown by customers, sellers / marketplaces have now also started charging premiums for the service rendered especially during peak periods.

To summarize, Big Data in Logistics and Supply Chain management is here to stay and the dominant service providers will be the ones that harness this big data to provide higher levels of operating efficiency, increased range of services based on customer feedback analysis and faster speed to market while ensuring that costs do not increase in the same ratio. Smart data converted to actionable information through real time and deep analytics will continue to change the way the logistics industry grows across geographies where service performance is increasingly become a hygiene factor which does not command a premium unless expectations are regularly surpassed.

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Lead Story

The

Business Case

for

Supply Chain Analytics India has yet to evolve a credible, reliable, resilient supply chain. Large section of the Indian logistics service providers have under invested in IT assets. We still confuse reporting with analytics. Our IT infrastructure and data collection is sub optimal. Amidst all these, speaking of supply chain analytics may seem ambitious. Yet, to respond to market opportunities, firms need to invest in supply chain analytics. Vinod Mathur Senior Strategic Services Director, JDA Software writes on the possibilities that analytics can bring to a supply chain.

Vinod Mathur Senior Strategic Services Director, JDA

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Supply chain has been the backbone of any business, and market leaders have been able to convert it into their competitive differentiator. The first step in the Supply Chain journey is supply chain visibility. A large percentage of Indian businesses has been slow in adopting technologies that can enable supply chain visibility. Our experience at JDA is that top down push is required as there is a fear of loss of control. Once businesses have taken the first steps of basic IT infrastructure to capture transaction data and advanced planning systems, they start realizing significant business benefits. Over a

period of time, the benefits reach a plateau and planners seek the next breakthrough improvement.

The transaction and planning systems capture and generate large volume of data. The question that business stakeholders seek answers to is ‘Can we leverage this large volume of data to give us insights that are not so apparent?’ This is when the business is ready for their journey on Supply Chain Analytics. This is a complex field and the easiest way to understand supply chain analytics is to look at the Gartner framework. The

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Gartner framework is a four stage model starting with a Descriptive part – which is more about reporting, moving to the next stage which is Diagnostic – to understand what is happening and why is it happening. The third stage is Predictive analytics – which based on past experience, will generate possible scenarios for the future. The fourth stage is Prescriptive analytics.

Prescriptive analytics starts from the organization’s goals.

It builds on insights gained from learnings from the past, predictions made and from the different scenarios developed, to prepare a roadmap which will help the firm achieve its goals.

Most firms get stuck on the first level – which is reporting. As a bare minimum, reports tell the management what is happening in to the supply chain. There are quite a few firms who have moved to the second stage – where they get insights into why things are happening the way they are. An interesting case we worked on was of a consumer electronics firm. They had around 8-9 months of inventory on their books. This is huge by any standards, more so in an ultra-fast moving goods market with a very high rate of obsolescence. They needed to understand where they were going wrong. The reports reflected the true picture, but were not able to answer why they had such high inventory. JDA ran an inventory diagnostics to understand what was causing this inventory pile up. Apart from other factors, it was found that around 3 months inventory was due to obsolescence. The root cause analysis showed that there was no End of Life information captured in the system and Demand/ Supply planning continued to forecast,

procure and produce these items where Marketing had already marked those as EOL. This was a case where a firm was able to identify a problem based on the report and then pinpoint the cause for it.

The first critical factor on the Supply Chain Analytics journey is that firms need to think clearly about the objective of going in for an analytics team/ engagement. Some of these objectives will evolve as the firm matures in the analytics process.

Firms usually start analytics around business tangibles - like inventory, stock outs and loss of sales. These

at it, forecast accuracy by itself is not the end goal. The end goal is to meet the customer needs efficiently with low inventories. It is advisable to start from supply chain objectives and its effectiveness in meeting the firm’s goals. That is where we would want to tie in analytics. For example, if the firm is competing on cost, analytics should be able to provide a breakup of how cost elements in the chain stack up. Starting from the reports, firms could investigate the underlying causes, and slowly move to the predictive stage.

The second factor is people skills –

This means there are multiple scenarios that can play out - a high confidence scenario, and other scenarios depending on the numbers achieved business symptoms which impact the financials are a good place to start.

We have seen firms say – forecast accuracy is a problem and let us analyze why it is so. But, if you look

analytics need people who can link business problems/ scenarios with the underlying mathematical and statistical methods. This skillset is very difficult to find. The third factor SCMPr

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Lead Story is organizational commitment to analytics programs. We have seen some very interesting organizational structures, where the analytics team was created within the finance function. This helped the organization correlate everything with finance. In this firm, the supply chain metrics like inventory turns, dispatch compliance, capacity utilization, and forecast accuracy was easily tied in with the financial impact of these numbers to the firm.

As organizations mature in their analytic capability, they can move to the predictive stage. The first thing that comes to mind in predictive analytics is forecasting. That is the start. The real issue is to predict the

that, predict the impact on supply chains. The plan itself comes with a probability. Based on this, the planners will produce their supply chain plan operational, tactical and strategic – like capacity investments, contract negotiations etc. – to those scenarios. However the capability to draw a distribution pattern is lacking. Instead of defining 20 or 30 scenarios, they would like to define a pattern and the supply chains will be aligned to it. This is a paradigm shift from the existing process.

Further, as we move to prescriptive analysis, we were engaged with a firm that wanted us to analyze the impact of an impending labor strike. They wanted help to minimize

There are quite a few firms who have moved to the second stage – where they want insights into why things are happening impact on entire supply chain. Some of the ideas at mature companies is that the old concept of driving supply chain to a plan - create a forecast and schedule every action to achieve that forecast, including buffers at specific points in the supply chain – needs to change. Planners want to have a range for their forecast - a high confidence number the firm will definitely meet and a figure which the firm is pushing for, but there is a lower probability to that.

They want to drive to a range - not one number. This means there are multiple scenarios that can play out - a high confidence scenario, and other scenarios depending on the numbers achieved. The analytics should be able to visualize if the supply chain can deliver across all these scenarios. From here, firms want to attach a probability range to these scenarios. Companies wish to develop a probability distribution of these scenarios and based on

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the impact and meet the original business plan. The first response of the planners was to figure product categories where production could be cut. This meant that inventory across the supply chain would go down, setting off a panic among distributors who would increase their orders to tide over potential disruptions, artificially boosting demand. When we were called in, we looked at the assumptions underlying the production cuts. In the process we found that there were some earlier generation machines lying at a different location, which could be pressed in to production, if people were trained to operate them.

We ran some of the optimization and response calculations we found that if people were trained to use the older machines, the overall impact of the disruption would be around 5 percent, as opposed to the 30 percent the company anticipated.

The firm realigned their operations

accordingly. This was a different type of analytics that was done.

This type of analytics supports supply chain risk management and is still an informal art in most companies. In the above example, after realigning production, the company realized that risk management is very important. They put together a process around it – today someone is monitoring the risks or disruptions, and preparing a plan B or plan C. This is crucial in today’s globally connected supply chain. This is an essential area, but sadly neglected.

In India, most of the analytics is done informally and is highly people centric. Every firm typically has one person who is the trusted right hand of the management/ supply chain head. He/ she can assess such impacts – mostly using experience and gut feel. It is not process driven or codified as a science. It is more of an art. That is a gap that exists today.

Companies need to understand the potential of supply chain analytics – what it can deliver in business value, and have the right sponsorship for it. Else it will be akin to rowing an anchored boat – there will be huge efforts expended, but no tangible results. All the analytics that a company does needs to be tied to a tangible outcome. That is what key stakeholders would look at. They would like to know the return on investments – to the top line or bottom line. Market leading companies usually have a smart set of planners who understand analytics. They need an enabling environment, top management sponsorship and focus on the right problem to be solved. Possibilities with analytics are as many and benefits are significant. The catch is the organization’s ability to harness the power of analytics and having a set of people who can do it.

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Lead Story

Is Analytics the new Succor for supply chain?

As Indian companies accelerate IP adoption in their enterprise, a huge amount of data will be generated. Add to it the impending roll out of IoT, there will be a deluge of data.

The next big wave for supply chain will be to make sense – actionable sense – of this data. Nilmadhab, a supply chain analytics professional shares his view on supply chain analytics.

Is it the beginning of a new era? : There can’t be a better time for Indian Manufacturing! With government hard selling the ‘Make in India’ campaign and focus on congenial policy changes manufacturing is poised to take the center stage. However, decade of volatility in business environment with swings in consumer mood brings the legacy of uncertainty in today’s decision making. Decision makers are relying more on data and objective evaluation both for strategic and executional purpose.

As a result data driven forecasting is gaining ground which need to crunch huge amount of data coming out of business processes and macroeconomic environment.

Parallel to ‘Make in India’, another campaign namely ‘Zero Effect and Defect’ (ZED) put supply chain practice into focus. As mentioned in the article “Manufacturing needs a quality boost” (C. Banerjee, Director General, CII), quality is a holistic concept that “...would aim to transform methodologies, processes and systems across the value chain.

It would revitalize the manufacturing tools and techniques...”

Nilmadhab Mandal Supply Chain Analytics Professional

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Why we are even talking of analytics here?

Looking at the IT landscape, majority of Indian manufacturing units

have already invested in enterprise application suites and ERP programs as the backbone of organization’s technology infrastructure. These systems automate and support a range of support for operational business processes and core supply chain functions. However, the key is in unlocking business value from the huge amount of data that existing systems accumulates. The forth coming wave of Internet of Things (IOT) will usher Big Data paradigm for Indian manufacturers.

That brings that brings Analytics as a relevant discussion point.

Companies are increasingly aware that data is a potential asset for them impacting bottom line and strategic initiative. For example : state of the art statistical forecasting can combine data from all demand and replenishment planning processes and generates accurate weekly forecasts for setting sales goals, production levels and distribution plans. Importantly, true demand forecasting tool should come with the capability of incorporating the effects of sales promotions, marketing events, and other external events (e.g., holidays, severe weather, govt policy etc.). Another example where analytics can add value will be delivering higher accuracy in new product forecast.

Intelligent data mining methods builds a forecast using the historical

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data of groups of existing products with similar attributes. In pursuit of efficient supply chain and increased customer satisfaction mathematical constraint based optimization can calculate optimal inventory levels and replenishment policies based on user-specified constraints such as required lead times, costs and targeted service levels.

On the quality front, practitioners have searched for decades for a silver bullet. Following advice from gurus such as Deming, Juran and initiatives like TPM, the industry has made tremendous strides toward higher quality. But with game changers like

variations and isolating the factors it reduces cost of production critical to high profitability. Similarly, predictive models can be used to achieve advanced process control (APC) and predicting events that can cause outages, the solution can help reduce the amount of unplanned maintenance and maintenance costs. Again downstream quality issues also can lead to significantly reduced customer satisfaction rates.

This is especially true when problems appear after the product has been manufactured and sold. Analytics and other supporting business intelligence technology integrates

the Web and mobile devices to get information to decision makers when decision makers need it.

As supply chain executives stand at the edge of this new era of big data and look forward, what they see is a new world of opportunities.

Big data applications will shape our lives in ways that are hard to comprehend; but one thing is certain, the processes, analytics, and technology requirements of big data will undoubtedly transform business and society. An integrated approach towards analytics will make manufacturers more competitive by enabling them to exploit existing value chains to the greatest extent possible (i.e., shaping demand for their goods or services) and generate new value chains that can drive substantial profit or significantly cut costs (i.e., leveraging embedded sensor information to accurately predict failures and then creating service contracts that will return high margin with low risk).

Indian manufacturing is poised to embrace analytics to chart new horizon

Illustrative advanced analytics output

IOT and social media, the bar is being raised faster than manufacturers can keep up. Quality-centric predictive analytic and visualization technologies can provide a holistic view of quality across the enterprise and throughout the entire product life cycle. Advanced analytics drive continuous quality increases, improved reliability and higher yields. With tighter controls and more efficient processes, rework rates and scrap rates will decrease.

For example deploying Statistical Process Control (SPC) a process manufacturing organization can identify the reasons for large variations in end product quality by plant, item and specification. By identifying the reasons for these

text and structured data across the service chain, and provides the information and tools necessary to issue early warnings of problems, reduce time to identify root cause and minimize the size and scope of recalls.

Analytics is NOT a project but a journey: As opposed to niche tool approach, an enterprise-wise analytics framework helps in organization’s strategic transformation making it easy to use data assets for value creation. Data management takes the information that you have from multiple sources and prepares it in such a way that analytics can be applied and insights derived.

These insights can be reported on

Indian manufacturers have a golden chance to emerge from the shadow of the country’s services sector and seize more of the global market.

A McKinsey study (“Fulfilling the promise of India’s manufacturing sector”) shows Indian manufacturers lag behind their global peers in key operational areas that includes production planning, supply chain management, quality systems and process. As a practitioner in this field for more than 12 years my recommendations to the supply chain leadership in India would be to unlock the value hidden in the data and exploit big data analytics to unshackle bottleneck to drastically reduce the operating cost. High-Performance Analytics brings actionable insights from data sources like sensors, RFID, telemetry or even hosts of macro-economic indicators at breakthrough speeds, which enables you to extract more value and insight for a fulfilling supply chain journey.

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Lead Story

Business Intelligence and Supply Chain Analytics the Service Supply Chain perspective

Vasu Ramanujam, Senior Director – India Operations, Entercoms

According to independent published research, after-market service and support often impact customer satisfaction as much or more than the product itself, making it critical that the service supply chain meet or exceed post-sale expectations. Operational analytics and service network design that accurately predicts product failure rates, reliability of equipment, life expectancy and product usage are critical, and cannot be captured effectively without the right mix of technology, analytics and execution expertise.

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In addition to the operational impact, failure to deliver against warranties and service contracts carries significant financial implications, including penalties that grow exponentially with incremental increases in downtime. Failure to deliver also impacts reputation, as word spreads that equipment does not perform as promised, when in fact the root cause may lie in the service supply chain.

The service supply chain functions to ensure that products and components continue to work over their intended life spans and expensive capital equipment continues to perform at optimal efficiency, productivity and uptime throughout its life cycle. Post-sale commitments to customers, delivered through warranty or service contracts, form the basis for customer experience and satisfaction ratings that drive current profitability and future purchases. Vasu Ramanujam Senior Director – India Operations, Entercoms, writes about the role of analytics in the after market.

different from product supply chains and where complexities and challenges arise due to a lack of predictive analytics. Each of these five areas has a direct impact on customer satisfaction, and the lack of predictive analytics must be effectively addressed to drive meaningful, measurable results.

1.

Capacity management – Service demand forecasts based solely on historical data do not account for multiple factors involved in failures, creating a lack of clarity as to when service demand events will occur.

2.

Resource flexibility – With multiple installed base locations, service resources must be flexible in order to manage demand fluctuations, which is difficult to predict based on historical rather than predictive data.

3.

Information flow – The reach and complexity of the service supply chain is far greater than in the product supply chain, often involving multiple levels of customers, the customers’

So why do service supply chains continue to lag so far behind product supply chains in terms of investment, integration strategy and maturity?

One might argue that this is due to historical lack of sophistication in available tools and expertise to tackle issues of variability that has made it too daunting a task to effectively accomplish. Yet, an integrated execution model that incorporates service across the entire supply chain ecosystem by combining data and technology with people and expertise is essential to driving desired business outcomes.

There are five areas where service supply chains are distinctly

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customers, other third-party providers, warehouses and enduser consumers. Information must effectively flow across this complex network and its multiple systems.

4.

5.

Service performance –Service performance must address more than failures. Consideration must be given to response time, whether service was conducted on-time or ahead of time, and whether the correct parts were sent on time and at the same time to ensure all aspects of service are effectively addressed.

Cash flow management – Service may occur as part of a warranty, service contract or in response to a customer call, so there is no specific set of events that can be tracked to predict cash flow. Fluctuations in demand and variability as to whether service results in a profit or loss increases the difficulty of cash flow management and the ability to plan for investments in infrastructure.

How can global organizations successfully integrate service supply chains within their supply chain ecosystems and leverage them to drive business outcomes?

Numerous technologies, tools and predictive analytics capabilities that effectively standardize integration exist for product supply chains.

However, because service supply chains have evolved to include multiple systems and parties, both inside and outside the ecosystem, there is no single system or integration strategy to connect the service ecosystem.

An answer may lie in the introduction of a control tower platform into the service supply chain. An advanced set of control tower analytics spanning an organization’s core service operations, coupled with multidimensional skill sets to analyze data, write equations, manage algorithms and define

metrics, enables the service supply chain to connect with and extract data from multiple systems seamlessly across the ecosystem.

Done effectively, this combination of technology and execution can provide critical predictive analytics, integration capabilities, visibility and actionable intelligence. Yet most organizations lack this full complement of internal capabilities and technologies. Identifying a partner with the right mix of IP technology and specialized expertise is often the best approach to bridge the gap.

Aligning the service supply chain with financial and operational objectives Customer experience and customer satisfaction are commonly mentioned as top strategic initiatives for most organizations. However, when explored further, many customer experience programs often prove to be shallow, shortlived, focused on the wrong metrics or more concerned with PR value than with delivering quantifiable and sustainable results. This is unfortunate, as the most successful programs in service supply chain operations have customer satisfaction at their core. Moreover, service revenue, cost to serve and contribution margin can be fundamentally impacted when the six key pillars of the service supply chain are directly linked to operating metrics.

Organizations that lack an integrated service supply chain strategy often view these six pillars in isolation. However, when each pillar is depicted on one side of a “service cube,” one can start to see the interrelationships and ideal integration between the six pillars and an organization’s financial and operational objectives.

Install Base – includes asset uptime, impacting customer satisfaction and cost to serve Service Contracts – includes contract coverage and SLAs, impacting

service revenue, cost to serve and contribution margin Warranty – includes warranty claims, impacting affect service revenue, cost to serve and customer satisfaction Parts – includes inventory turnover, backorders, excess and obsolete inventory, impacting service revenue, cost to serve, customer satisfaction and contribution margin Field Service – includes field service efficiency, responsiveness and productivity, impacting service revenue, cost to serve, customer satisfaction and contribution margin Returns – includes return and defect rates, impacting cost to serve, customer satisfaction and contribution margin Understanding the importance, complexities and specific linkages across these six pillars is essential to an organization’s ability to create an integrated service supply chain that achieves business and financial objectives. Without it, no organization can effectively determine whether infrastructure investment is consistent with committed service levels or implicit customer promises. Visibility across key metrics is also critical and is achieved by aggregating data from disparate sources and formats across the ecosystem and applying advanced analytics to uncover predictive insights.

Properly incorporated into operations, these predictive insights can drive specific actions that impact the highest priority outcomes.

Astute executives that view the service supply chain as a critical component of the overall supply chain ecosystem and invest the resources to truly understand the complex interrelationships and power of integrated execution can realize significant financial, operational and strategic benefits from an area of the business that for many organizations has remained overlooked and underleveraged.

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Tech LeadTalk Story

Frontiers in Supply Chain Analytics Supply chains are expected to add value to the companies. A fair amount of effort and expenses are devoted to ensuring this happens. As we move up the capability and maturity ladder, it is time to check if there are newer tools and methods out there that can dive deeper into the supply chain and come up with a pot of gold. Across the developed world, companies are devoting more attention to these emerging paradigms. Editor of SCMPro, Girish V S takes a look at the frontiers of supply chains to see if these waves will break shore in the near future.

Companies in the developed world have invested in an array of IT solutions to optimize their operations. CRM, ERP, MRP, SRM – the options are endless. These solutions have helped companies gather huge amounts of data – data which can be leveraged to provide deeper insights into the supply chain. Slowly predictive analytics is gaining ground. India is a laggard when it comes to IT adoption as far as supply chains go. However, it is worthwhile to take a look at some of the emerging areas and innovative applications that can be developed in and around analytics. Admittedly, these are more used in the western world – but we have the capability to leapfrog into the emerging frontier if need be. We will examine some of the interesting applications of analytics in supply chains.

new baseline price, or discover the price for a modified new product, parametric cost estimates come into play. PCE will help the company identify the changed parameters of the part, and help come up with a shadow price which can be used in tendering and price negotiations.

A distinct improvement over the conventional pricing methodologies.

would have to build infrastructure across an entire city. Incorporating data from multiple sources, including social media, and using Big Data, the firm identified specific locality where new infrastructure should be located.

Extrapolate this to warehouses – and companies will be able to optimize their warehouse location. Subject to the passing of GST bill!

Location Identification

Managing Volatility

Location of a resource – a new plant, a warehouse, a distribution center can be a tough task. Customers want things faster, cheaper and better.

This means locating resources correctly. For example, a telco in the West used advanced analytics to build new towers. Earlier the telco

Global business has entered what is popularly called VUCA times – an acronym for Volatility, Uncertainty, Complexity and Ambiguity.

Unexpected ecosystem changes can affect profits. These changes affect everything – from prices of input materials to downstream

Parametric Cost Estimation (PCE) Parametric cost estimation is a rules based methodology to estimate the cost of a product. This method can be used to assess the “should be” price of a new component or part.

Companies routinely come out with new products – incorporating new parts. In many instances, these new parts are essentially the old part with a few minor modifications.

When firms need to establish a

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effects – like packaging and transport. Apparel industry is a classic example.

Trends change very quickly, and the manufacturer has to be really agile to catch the trend, else end up holding large inventory of unsold products – to be later on sold at huge mark downs. Powerful analytics, incorporating elements of social media, in-store conversations, and other unstructured sources can help the manufacturer to identify a trend and gear up the supply chains accordingly. Studies in the west have shown that such analytics helps firms to reduce obsolescence and thereby improve profits.

Counterfeit Prevention Counterfeits are a huge challenge to firms. Poor quality products dent the reputation of a brand. Supply chain analytics can be used to spot the fake. By using market data and tracking the movement of products through its supply chains, firms will be able to counter fakes. An example is Consorzio del Formaggio Parmigiano Reggiano — a consortium of Italian cheese makers have used supply chain analytics to telling effect, identifying the source of raw materials (milk in this case) to spot counterfeits. Products with a GI tag are especially suited to this type of analytics.

Prescriptive Analytics The final frontier in analytics, as on date is the move to prescriptive analysis. Prescriptive analytics uses unstructured data elementscalled Big Data, business rules and constraints – like the number of production centers and distribution centers, and using cutting edge mathematical models and computation tools to evaluate the options a company has for its supply chain, and then suggest decision options that will allow the company to capitalize on the options in front

of it.

The move is from descriptive analysis – which tells the company what has happened and why it happened.

The next phase is predictive analysis which tells the firm, with a degree of confidence what will happen. Prescriptive analytics can tell a firm what can happen, how it can happen and what the company needs to do to capitalize on it. Based on the choice, it will re-assess the predictions, suggesting further actions.

Prescriptive analytics can continually assess incoming data, predict and prescribe the action points in real time. Prescriptive analytics has been around 2003, when it was first

coined by IBM. However, it is not used in supply chain domain.

(Insert image of Prescriptive analytics here) Analytics in any form is yet to take root in Indian firms – with the exception of financial services.

Supply chain analytics is still more remote from corporate mindshare.

However, as we integrate into the global trade, Indian companies will have to invest in analytics. Else, agile new generation tech savvy startups will run away with the business.

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Feature Feature

Technology An Important Factor to Protect Your Supply Chain from Fire and Security Threats Supply chain and logistics industry play a very important role in today competitive economy and increasingly complex and sophisticated trade routes. Technology plays a very important role in enhancing efficiency of the industry and to prevent supply chain losses, protect infrastructure and ensure the safety of personnel. Gopinath Kozhissery, GM, Integrated Fire and Security Solutions, Tyco India deals with fire and safety threats to a supply chain.

Gopinath Kozhissery GM, Integrated Fire and Security Solutions, Tyco India

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Risk based approach for supply chain management has been widely discussed but very few companies are seen implementing it. Common knowledge of risk is that it is a function of threats, vulnerabilities and consequences.

Outsourcing processes and products by companies have helped them focus on their core activities and also save costs, here one of the business strategies today is just-intime inventory management. One may argue that risk of storage is transferred from one company to other and most often the company which supplies would have limited knowledge on the risk of storage and thereby increasing the risk in the supply chain. One of the underestimated risks is that of fire, underestimated because it takes

many incidents within the company to increase its visibility and many smaller incidents elsewhere fail to underline the consequence.

While much progress has been made in the western world on studying effectiveness of solutions to mitigate the risk of fire, India is yet to take any significant step forward.

Detection of fire in its incipient stage is the key to prevent damages. Based on the severity of hazard, advanced technologies are available for early detection and control. Sprinklers are most widely used for fire protection in warehouses and hence it is critical to understand the importance of using right type of sprinklers based on the commodity stored. Hypoxic air systems, which maintain the level of oxygen below points of ignition,

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could be an effective solution in cold storages.

The question is – are we effectively mitigating the fire risk by having an insurance policy and a good fire protection system installed? May be not – preventing fires should be the goal. For example, using grooved fittings to connect pipes instead of welding should be considered in a hazardous environment. Separating the fuel from sources of ignition should be ingrained in the minds of everyone involved.

Standards and codes of practice are being re-written to increase awareness and enhance safety of warehouses. Some recent changes in the Indian standards for warehouses include incentives in terms of increased height and access width if automatic sprinklers are used. The intent is to differentiate well protected buildings from unprotected ones. To prevent the fire from spreading into neighboring buildings, increased separation distances are recommended.

Material of construction of racks, shelves and pallets in addition to the commodity stores are extremely critical in designing the sprinkler systems. Leading insurance companies in the western world have sponsored research on commodity classification, methods of storage etc., and the findings of these programs have led formation of new guidelines, codes and standards.

With global thought leaders in fire protection having a strong presence in India and new test facilities being built, the SCM community can leverage their expertise to industry’s benefit. To have uninterrupted supply chain, mitigating fire risks in storage should be at the core of activities, there is a dire need for well-understood and effective requirements on fire safety to be

included in the procedures for qualifying sub-contractors and here the onus is on the industry leaders to set an example.

The other key element is security of facilities. Fire and security solutions encompass programs, systems, procedures, technology and solutions applied to address threats to supply chain. A holistic approach needs to be taken when we implement technology in supply chain industry as the entire logistic process begins with the producer and ends with the consumer. In today’s era you can effectively track the mobile assets in real time and keep your employees safe, through customized solutions which include access control, video surveillance, 24/7 monitoring services and integrated solutions that meet safety, procedure and building automation challenges. Organizations must identify/ understand threats, assess vulnerabilities, and determine potential impacts and consequences to detect, deter and mitigate threats and safeguard people, critical infrastructure and property with ability to manage and coordinate responses to emergency security alerts apart from having ability to manage efforts to restore operations following a crime or other emergency.

The latest technology can be seen in parcel and vehicle tracking, which enables us monitor and view package information and receive immediate status updates about parcel locations using an AWB or shipment number. This is applicable across large hubs, multi-purpose facilities and automated warehouses to keep track of parcels until the point of dispatch.

Vehicle tracking for freight being transported by road faces the highest

threat levels. Uninterrupted journeys are unlikely due to break downs, parking, and changes of weather conditions, ferries or cross- bordertraffic. Road movement is also more risky due to the absence of guards, lack of secured parking and long queues at ferries or borders. With technology like integrated real time location services (RLTS) using RFID to operate within facilities with high volume entries and exits. Utilizing radio frequency identification (RFID) technology, these security systems automate the tracking of shipments and goods, pallets and products — with alert notifications, administrative reports and more.

GPS location based services show the movement and usage of physical assets, and their exact location in near real time. From GPS–based asset tracking tags, to software and web-based solutions, the industry can harness GPS and RFID technology to keep their customers on top of their mobile assets.

Biometric access control with vein recognition is another quick, easy and cost effective system which is nearly impossible to forge. Vein recognition is a contactless, hygienic and non-invasive security measure, currently the most secure biometric access control system on the market with worldwide unique optical hand positioning. The system can be fully integrated into existing systems and of user management software.

Mitigating fire and safety risks needs a strong partner. Through operational efficiency and situational awareness, Tyco helps reduce traffic delays, increase vehicle capacities and ensure safer transport. Our global network of research and development Centers of Excellence drive innovation and cutting-edge technology to integrate transportation platforms.

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SME Corner

Disrupt Yourself

Before Someone Else

Disrupts You

Every month, SCMPro looks at an issue that affects SME or profiles an SME that promises to redefine the way we do business. In this issue of, we bring you an interaction with Vinay Goyal – Founder and CEO of Instavans – a Bengaluru based on-demand platform that offers intra city logistics connectivity – bringing shippers and service providers on to a single on-line platform, increasing efficiencies and better earnings for the service providers.

Vinay Goyal, Founder and CEO Instavans

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The logistics service providers in India are a dispersed lot. According to studies, around 90 percent of the trucks are owned by small and medium sized enterprises, with up to 15 trucks. The buyers, on the other hand are organized. The diffuse ownership of trucking denies them a fair chance at price discovery.

There is always that outlier who will crash prices. Way back in 2002, Vinay tried to promote India’s first freight exchange – called National Freight Exchange of India. The idea was to bring the transporters and shippers together on to a platform, akin to a stock exchange. It was also obvious that brokers have a key role and cannot be eliminated. When we start looking at inter-city transportation, we start thinking of technology, disintermediation, and an assertion that everyone is redundant. That if we connect the truck owner to the shipper, that is it. No one else has a role to play. And this is a huge mistake. Especially in a country like in India. We have 29 states, huge number of languages and dialects, thousands of rules and regulations, some specific to a city or district.

We need to understand the value that a transporter brings to the table.

When a shipper wants to send a FTL, he approaches a transporter, who in turn contacts a broker and procures a truck. What is the value add in this – strangely, it has nothing to do with transport! The truck driver needs advance for the trip – which is provided by the transport firm. The value comes from financing – the credit extended by the transporter, and then insurance. The shipper will not insure the goods, but under the carriage of goods act, goods have to be insured. In a FTL, the only value add by a transporter is financing and insurance. In FTL, if you have working capital, you are the kingyou can do 1000 trucks easily, but the net profit here is two percent.

When we do a LTL, we have our networks, operational models like hub and spoke. Here the margins are better – since we aggregate

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the load. You collect goods from across a geographic location, bring them to a central point, and consolidate the load. You aggregate and disaggregate. Here you need a network – you need to store goods.

Then comes the broker- what is the value the broker adds? The real value of a broker is something different. Imagine a driver from Hosiarpur in Punjab, trying to deliver a consignment to a factory in Tuticorin, Tamil Nadu. Rest assured, we will not be able to locate the factory. The language barriers is real. The locals do not speak Hindi or English. You have a semi-literate truck driver from Punjab trying to find the factory. He can navigate the highways easily – and reaches Tuticorin. Also, let us accept the fact that he wants a return load too. The broker is not just for the return load.

The broker is the local guardian of the truck driver. The truck driver goes to the broker in Tuticorin. The broker most often operates from a dabha on the highway. There a local driver, who knows the place hops on to the truck and makes the last mile.

This is the real value of the broker.

And it cannot be dis-intermediated away. And in case of the return load, even the pick up is done by the local driver. This is the number one value.

The second aspect is that the broker is also a financier. Assume Sterlite needs 10 trucks from Tuticorin. The logistics firm may not have a branch in Tuticorin. The broker steps in and lends the amount to the drivers.

Later on he bills the logistics firm a percentage to cover his costs.

And till the truck is loaded for the return trip, the driver is resting and recuperating.

Similarly, the owner of the truck would have made arrangements with a few enroute fuel stations from where the driver can get an advance.

Remember, carrying large amounts of cash is dangerous. To top it, there are no pit stops or lay about where the driver can rest. If you see the over all ecosystem, you will realize that there is very little room for

disintermediation. The idea behind National Freight Exchange was to connect truckers and shippers to the best broker. And, truth e told, in the last 13 years or so nothing has changed. But we hope it will change – sooner than later. We will not be able to develop a platform which connects a trucker to a shipper today. The building blocks are being built. We have the Aadhar card by which the driver antecedents can be verified, we need to solve the problem of credit and the local touch that the broker provides. Probably, in a decade or so we may see some resolution. Driver pay is also an issue – if we start paying drivers real wages, we will be able to attract better quality of people to drive, and then technology disintermediation can help.

tragedy of intra-city transport is the excess capacity. You can find drivers hanging around in almost every junction. Every trip is a one a way trip and there is no need for a broker.

There is no language barrier, there is no difficulty in locating a place and it is not economically viable for a broker. A broker typically makes 4 percent on a deal. The average intracity rate is Rs. 2000. The broker is not interested in making Rs. 80/- on this.

On intra city routes, one way will be empty. In reality the shipper is paying for both the trips. And he is unhappy.

On the other hand, the driver, who is presumably earning for both ways is also unhappy. He can barely make enough to stay afloat. This deep unhappiness points to a malaise in the present system. And that is what Instavans sets out to change.

Cut to 2014. According to me, we are still rehashing the old story. Let us take freight forwarding – this business will be blown away by technology. The capacity of each air line or ship will soon be on-line.

Something like what Redbus did to bus operators. Redbus enabled the bus operators to put their inventory on-line, allowing it to be sold. Once you have your capacity on-line, shippers can engage you. Similar disintermediation will happen in freight forwarding. The whole process of getting the best rate can move to an on-line platform. One thing is clear – we need to disrupt the way we operate before someone else disrupts us.

The business model of Instavans is to be an Ola to the intra-city transport. We believe we can do a 5X destruction within the intra-city market. The idea is not to effect incremental savings – the idea is can we take a trucker who is earning Rs. 10000 a month and within a year increase his earnings to Rs. 50,000 a month. The shipper broadcasts his requirement, the drivers respond, pick-up and deliver. Instavans will provide the back end support, with the transaction flowing through it.

Instavans will pay the driver on a weekly basis and collect from the shipper on a monthly basis. The driver is a verified driver. The quality of truck is verified. And the entire process is visible to the shipper.

Which brings us to the concept behind Instavans. In the inter city transport space, the driver will get a return load – if not to the place of origin, somewhere close by. The scene in intra state is a bit different. Taking Bengaluru – Hubli as an example, 700 trucks will go to Hubli a day, but there will be enough load for only 500 trucks from Hubli. The difference is adjusted in the pricing, with trucks from Bengaluru commanding a premium.

The inefficiency here is about 30 percent. Moving to inter-city – the

The core was launched in November 2014 and by March 2015, we had done around 500 transactions to test the system – our pilot run.

Instavans will be an intra-city player and not move out of it. Why get into a business where the net is two percent. Instavans hopes to harness the capacity of the intra-city transport, enable price discovery and help the trucker earn 5 times the current. All with a set of state-ofthe-art technology. Watch us as we disrupt the intra-city space.

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LSP Focus

To save more,

you need to invest more

The LSP focus turns the spotlight on one logistics service provider – bringing out the opinions and views of the CEO of a LSP. The Indian supply chain professional moves into the profession by default or compulsion. Historically, a non-productive person would be assigned to “distribution”.

From there we have come a long way. Today, Employee Health and Safety (EHS), IT integration, low involvement in strategic issues are the challenges Indian LSPs face.

In a freewheeling chat with the Editor of SCMPro, Girish V S and the CEO of Rhenus Logistics Pvt. Ltd., Vivek Arya speaks about the challenges to the Indian LSP.

Vivek Arya CEO Rhenus Logistics

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Logistics services is an area where we can drive efficiencies and reduce costs. There are three broad segments within logistics – strategic, tactical and operational. Most of the connect between the user and

service provider is at the operational level. And till they connect with each other on strategic and tactical levels, there will not be any upgradation of skill sets. It is a taboo in India to be seen talking to a transport service

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provider. You can speak to a small packaging material provider – who supplies one tenth or one twentieth of freight services in value, would be looked at in a much better light than the service provider. To top it, the service taker is not trained in logistics –the purchase personnel negotiate based on prices – an argument built around money. If you go to a negotiation meeting overseas, you will spend the first 95 percent of the time discussing the scope, deliverables, the expectations, the KPIs and so on. If all these match, they will look at the commercials. In India, the first 95 percent is spent discussing commercials and the rest all is assumed to be understood.

In India, we give commercials and money more importance. We do not match quality and price, instead opting for cheap. The discussions in India are not focused on efficiencies – they are about costs. To save more, you need to invest more. We cannot keep scraping the direct costs – there is a limit. Beyond which we begin under paying the driver, the loader –everybody. And sacrifice quality. We are into this vicious circle at the moment.

On the other hand, in the Indian trucking sector, there is no value for life. The concerns of EHS for trucking professionals are absent – because firms are not willing to pay for it.

But most often, the challenge is to get the customer talking about these pain points – something which they do not wish to acknowledge If you look at the transportation of hazardous chemicals in India – one of the most difficult goods to

transport – the rates are at par with any normal commodity. Overseas, a person involved in moving hazardous chemicals commands a premium – of up to 100 percent. If we do not pay a premium for a premium service, what kind of services will we get? It comes back to the old adage – if you pay peanuts, you get monkeys. We talk of supply chain and logistics, but the essence is missing.

This is where we, at Rhenus, wish to make a difference. Our focus is on people, IT and EHS. The conversation with the customer begins by the identification of the pain points and challenges. From there a solution is worked out. But most often, the challenge is to get the customer talking about these pain points – something which they do not wish to acknowledge. When customers believe they have no challenges in the logistics function, one can imagine the state of our LSP sector!

Value Added Services Value added services are the future of LSP. Rhenus offers a service called “Connect Europe” – under this, we collect the auto components from the Indian manufacturers, move them to own warehouses nearby in India, consolidate, stuff them into containers, ship them to Europe, move them to our warehouse in Europe, and deliver the products to the customers customer, anywhere in Europe – either just-in-time or just-in-sequence. All activities will be managed by Rhenus, giving the customer complete visibility of the product. Apart from visibility, exception reporting as per the KPI’s fixed is also a part of the offer.

Rhenus also builds customized fleets (subject to long term contracts being in place) to suit specific requirements. Rhenus also trains its drivers in defensive driving. Rhenus offers a high efficiency movement of goods, resulting in a low per unit cost of transport, compared to others.

Supply Chain Risk Management India does not have a true 3PL service culture. Most of the contracts are broken down into multiple pieces – you end up with a trucking contract, a customs clearing contract, a warehouse contract and so on. By doing this, the customer is de-risking the service from the service provider’s point of view.

By doing so, most of the risk is retained by the customer. Which is good for the service provider, but not so for the industry. With the type of services we provide, most of the risks are connected to delays or damage of goods enroute. Procurement, timely delivery, just-in-time are seldom expected of a service provider. Unless there are contracts with liabilities for line stoppage, delayed delivery, consequential loss provisions, the risk is retained with the customer.

Can LSPs provide such services – absolutely. For example, at Rhenus, for the Connect Europe product, the customer keeps adequate stock with Rhenus, and accordingly it is built in time. If Rhenus has to deliver form its warehouse to the customer’s customer, on a schedule, Rhenus takes care of it. If Rhenus delays the shipment, it is liable for line stoppage damages. We are seeing such contracts being discussed in India too. It is driven by the large MNC firms. Today, the logistics cost in India is high due to the inefficiencies in the system.

We tend to blame everyone and everything for the high costs – but the real cause is the inefficiencies of the industry. The LSPs too share a part of the blame – not many of them invest in the business – IT systems, fleet, warehouses, people etc. And if investments are made, the ROI is poor. Unless there is adequate returns, LSP’s will not want to invest in value addition. The net result is an industry that is being stifled. We need to be able to sit across and discuss these issues – so that we can realize our true potential.

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Event

RASS

Rural and Agricultural Supply Chain Summit 2015 Held on 21st August 2015, The Orchid

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WAREHOUSE COMPENDIUM 2015

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Event

Rural and Agricultural Supply Chain Summit 2015 Agri Value Chain – A Curtain Raiser A clear understanding of the genesis of the agri supply chain challenges is critical to coming up with a solution to the challenges. For the past sixty years we have been trying to find a solution by focusing on probably the wrong side of the picture. We have moved from 60 million tons to 130 million to 265 million tons of food grain production. We are the world’s largest producers of quite a number of food items. Despite this, our entire focus is on increasing production.

But we do not speak of preservation.

Around 40 percent of what we have grown with investments in seeds, fertilizers and toil by our farmers gets wasted. It is believed that one percent of our GDP is wasted in agri commodities. We waste as much wheat as Australia grows. And yet we import wheat from Australia. We waste the same quantity of vegetables consumed in the UK. And we have the second largest arable land – after USA. If we are able to preserve what we have grown, not a single Indian will remain hungry. We are a food surplus country.

Along with the steps to eliminate wastage, we need to create market places where the farmers can trade their produce. Today, trade in agri products is not efficient. The farmers are not getting the benefit of the prices the consumer pays.

Since the enactment of the APMC act in India in the 1950’s billions of rupees have been invested into building infrastructure for trade in agri products. The question we need to ask is – do we do away with them or do we enable them to be more efficient. The challenge we face is to unlock the potential of the investments already made.

A farmer spends five rupees to grow a kilo of tomatoes, which in a glut period, she is forced to sell at one rupee, and the end consumer ends up paying 25 rupees for it.

Our problem is creation of a chain where the farmer, the consumer and the processor can trade easily. In India, the farmer gets 25 percent of what a consumer pays,

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Rural markets provide a vast opportunity for corporate in India. In the past companies have been flirting with rural markets without much commitment. There are three important flows in rural markets: urban to rural for consumables and expendables, urban to rural for agricultural inputs and rural to urban for agricultural produce. Rural and Agricultural

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while in the US it is 75 percent. If we can tackle the wastage of agri products, the farmer will realize a far higher return. We need to improve our agri value chain. An efficient agri value chain will add 10 percent more to the farmer’s pocket. We need to create a “Grow in India” and “Process in India” too. Remember, Agriculture has a multiplicand of 2.4 – a Rs. 100 increase in agri will boost the GDP by Rs. 240 in manufacturing.

India

has 110,000 markets where agri produce are traded – 7200 regulated markets, 22,000 regular yards and close to 44,000 Haats – the core around which the village economy revolves. And these markets are bleeding. The Government collects a cess on the produce – but there is no infrastructure – from roads to warehouses. We need to improve the infrastructure at these markets. Add to that a skew in priorities. A study found that 85 percent of cold storages were for potatoes. And Six years and billions of rupees in investment later, that figure rose to 87 percent.

Unfortunately no one saw fit to create cold storages for other perishable commodities!

Another issue that we need to flag off is the MSP – a single price for a produce, ignoring quality of the produce. There are 128 institutions to protect farmers. And yet the farmer is in distress. Production is free – but markets are controlled.

Investment is not the end all. We need to have a benign regulatory regime and identifying the underutilized assets and enabling them.

The solution to the Agri value chain challenge is not investment – but unlocking the value of the investments already made and improving its efficiency.

Out of the Box Strategies for Agri Value Chain A panel discussion: Mr. Tarun Arora – Director – Finance and Operations, IG International; Mr. Prabhat Ranjan Vice President in the Operational Risk Management Department, NCDEX; Prasad P, Group Executive Vice President, Food and Agribusiness Research Management, YES Bank; Dr. Rakesh Singh, Director IMT Dubai. Moderator Girish VS Editor SCMPro. In a very interesting theme – Out of the Box Strategies for Agri Value Chain – saw four senior industry professionals share their inputs on how to meet the challenges in agri value chain. Tarun Arora spelt out his wish list for the value chain – infrastructure first. According to Tarun, subsides skew infrastructure development, by channeling investments where it is not really needed. Infrastructure investments need to make business sense on a standalone basis. The second issue is the mindset of the people in the industry – we need to change our traditional mindset. Another problem we need to solve is of fragmented landholdings. Creating cooperatives would be a good beginning. This could create economies of scale for investing in the right technology. We need collaboration and scalability as integral to the solutions we create. The industry has to realize this and integrate the entire value chain.

A concern shared by many is farmer suicides. Are we doing the right things as far as financing agri loans are

marketing suffers from infrastructure and credit constraints, making cost of reaching rural markets high. Farmers on another do not find access to markets directly leading to lower realization for their products. Add to this the challenge of crop diversification.

The Rural and Agri Supply Chain Summit explored the evolution of Agri retail, logistic challenges, lack of access to credit and risk management. We bring you edited excerpts from the summit.

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Event concerned? According to Prasad, the solution lies in farmer cooperatives – the peer pressure of lending to a group keeps defaults to a minimum. Unfortunately we have not seen any innovations in the financial products to the agri sector. But what has changed is the delivery mechanism has changed considerably. Technology has enabled payments to be made easily and automatically, without any leakage.

Prabhat Ranjan,

NCDEX believes that we cannot remove the intermediaries overnight. We need to take the intermediaries along, get them on board, show them the benefits, once they see the benefits, they will start participating.

Empowering the farmer by allowing him to control sales is a major step forward in improving incomes. The farmer usually sells his produce within 60 days of harvest. Today, it is possible for him to store it in a warehouse for sales later. Banks are now willing release the produce before the farmer pays back the loan. This will allow the farmer to sell at the right time and realize a better price.

We forget two things in India – one we are trying to provide solutions to a sector that is grossly degenerating, where people do not want to work in agriculture, profitability of the farmer is reducing. Fundamental to the wellbeing of the farmer is robust economy. Dr. Rakesh Singh believes that three are only three things that will enable an economy to provide scope for everybody to innovate. One – we need to diversify our crops. MSP has destroyed our capacity to exploit our advantages – we have become a rice and wheat economy. Second, while we speak of risk management and credit, we do not have the basic infrastructure in place – like warehouses, rail and roads. There has been no efforts to consolidate our growth. Third, we have innovated too fast, without the basic requirements being met – for example, we do not have crop insurance. We need to ensure that agriculture that provides employment to 60 percent of our citizens becomes profitable.

Challenges of supply chain and Logistics in Agri & Rural Markets Dr. Rakesh Singh, Director IMT Dubai Agri and rural supply chain consists of three flows – from urban to rural for consumer products, urban to rural for agri inputs and rural to urban for agri produce. These three flows are important. But, there is no synergy between them. All the experiments in the agri ecosystem in India – the ITC e-Choupal, Hariyali Kisan Kendra, Tata Kisan Kendra, Agrocel and Mahindra Shubh Labh, have not been successful. We need to understand why these experiments failed. Taking one such example – the ITC e-Choupal model – we can see how brilliantly the three flows have been integrated, with a very strong understanding of rural India. This was an overarching solution to the challenges of the rural markets, given the macroeconomic landscape of Indian agriculture. ITC e-Choupal tackled the business and infrastructure issues in rural markets. It also tackled the larger macroeconomic frameworks in which agri businesses and commodity markets operate.

Indian farmers, like anywhere else, need the right information to produce the right product. We need to provide them information of new opportunities across the globe. ITC created a portal for this. They became the first agri exchange by aggregating buyer and supplier. They wanted to create the right kind of information flows between farmers and processors. And having created this infrastructure, they modified it to a marketplace. They became a portal for

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information, a market maker like NCDEX and a product and service provider like e-Bay. This is the true beauty of this model. This showed that these services cannot act in silos, but need to integrate. ITC e-Choupal was a portal to procure cheap soya for the world market and earn huge profits. In the bargain they reduced the transaction costs for themselves and the farmers. They were able to source soya at30 percent less price and offer farmers 50 percent more.

In India, the fundamental process we need is to identify the risk of the farmer – not an exchange or a yard. The three risks are – farmer does not know the price he will realize for the quality, and will he be able to sell all his produce. The processor has similar risks – can he get the best quality, at the best rate and the quantity required. If we are able to map these two, we have solves the problem.

This is the simple contract farming – which across the globe has integrated the buyer and seller. This is why is should be a success.

Yet it failed – because when they moved beyond transactions, when they created assets specific to the product – portals, warehouses, connectivity and even roads, it encroached on Governments role. Any business which takes on the role of the government is bound to fail. The result – even after 10 years they have not broken even. They failed because the larger macro economy has failed them, not because of the business model. The business model is a winner. And the business as a whole within the economy is a failure.

This is a great lesson for India. We can have one Anna Hazare or one Tarun Arora, as a winner, but we cannot have all winners because the space in which they operate is not scalable. India needs huge investments in the development aspects of infrastructure. We have Whatsap that reaches, mobile reaches, only roads do not reach. Technology has preceded development – and that is the fundamental challenge for India. India is a traditional economy with a modern outlook.

The challenge is to make the traditional modern. This is why these experiments failed.

There is another reason why these experiments failed. Take Hindustan Unilever – 21 percent of their top line comes from rural, and they are known as a rural firm. But they are hardly rural. These experiments tried to reach the rural markets directly. But in India, the model that works is the super stockist. But beyond the super-stockist, the rest of rural India is a black box. Take the example of Grarih Detergents – in the aggregate the demand exceeds the supply for their product. But they have stockouts at some places and surplus at other. They do not have traceability. Creating the classic bullwhip in supply chain. They end up serving a low price market at a high cost. Companies do not commit to rural markets because they do not the vision to integrate these markets. They are happy with tier II or III cities.

We need three things – a great landscape where agriculture acquires dominance in the mind-space of the government and people. Two, great infrastructure development thrust, where MNREGA focuses on asset creation.

Three, banks to reach these villages and become aggregators of these people, along with rural retail like the e-choupal. India needs a push – a PPP push. India needs a mindset change.

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Event

Vijay Iyer VP- Enterprise Revenue, Reuters Market Light Delivering his address on Empowering Farmers Through Mobile Technology

Nirupama Pendurkar Managing Director CNX Corporation Limited

RASS 2015

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Veerendra Jamdade Founder Director and CEO, Vritti Solutions Delivering his address on Leveraging Technology in Agri Value Chain

Rajesh Aithal Associate Professor -Marketing at Indian Institute of Management, Lucknow Delivering his address around issues related to reaching out to rural markets, including rural retail & distribution realities

Jitendra Singh Hardawat (CNX), Ashish Vichare(CNX), Prof. Amit Shrivastava(DSIMS) at the Rural Summit

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Tech Talk

Technology Alignment – Creating Synergies for Business

India has charmed the world with the mouse. We are the de-facto software destination of the world. The world’s software scene is dominated by India and Indians. But this is not the case with supply chain. IT adoption in this sector lags the other sectors. SCMPro Editor, Girish V S in an interaction with Amar More, CEO - Kale Logistics Solutions to speak about the role of information technology in supply chain industry.

The third flow in a supply chainapart from products and money – is information. What is your assessment of the state of IT in Indian Supply Chains?

Technology has evolved in its role in the logistics industry from being “Nice to Have” to being “Necessary Evil” to a “Business Driver”. Since by the very definition Logistics means management of goods and INFORMATION across the supply chain, technology can become a differentiator for many logistics companies. We have already seen that with integrators like FedEx, DHL.

logistics companies need to upgrade their systems. The key word is “Integration”. They have to integrate the functioning of their internal departments through new generation web based ERP systems and then most importantly they need to integrate with their supply chain partners through EDI for creating a seamless supply chain. The areas in which logistics companies need to invest is ERP, EDI (stakeholder connectivity), Business Intelligence, Mobile apps. We had conducted a technology survey for the Indian Logistics industry and found that our logistics companies invest 0.6% of

Supply chain integration and emphasis on removal of paper from the transportation process are the best practices that the world is focusing on at present

Amar More CEO, Kale Logistics Solutions

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In India, most logistics companies have some systems or the others.

However we are now experiencing a wave in which due to compliance, security and efficiency reasons,

their revenues in IT systems whereas the global average is around 3% and most successful logistics companies invest upwards of 6% on technology.

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What would be the technology challenges you foresee for Supply Chain services firms in India? Is it different from global challenges?

I think technology has to be aligned to the processes which in turn have to be aligned with the organization’s strategy. If this alignment is not correct, then any change of technology will result in failure. This is true for any organization globally.

The adoption of cloud based solutions is the norm of the day and a strategy for success. However in some parts of India the internet connectivity is not great, the speed could become an issue. Similarly in some remote parts near ports etc power outages can become an issue.

Yet, in India we have opportunity to leapfrog a few generations of technological change. Since the western world automated early and the technology has moved pretty fast for them constantly upgrading the systems to keep pace with technology has been a challenge whereas people in our country can straight away move to the latest mobile based, cloud based generations without much ado.

However, in an Indian context the

business functions through an ERP system.

After this they need to focus on connectivity to supply chain partners via electronic data interchange or EDI to ensure visibility of incoming and outgoing shipments for planning purposes.

As a next step on top of this, they can have a business intelligence tool to get a real time view of their business. Finally they can use other value adds such as Mobile apps and other technologies in IOT (Internet of Things).

What are the best practices you have observed across the globe?

I think supply chain integration and emphasis on removal of paper from the transportation process are the best practices that the world is focusing on at present. There is a massive drive towards integrating with business partners via EDI and when the information is moving digitally that creates the necessary digital infrastructure for removal of unnecessary paper from the supply chain. We are fascinated by these trends and are committed to make significant contributions to these not just in India but globally.

SMAC will have a multiplying effect on businesses and increase productivity across the organization complexity is multiplied due to the existence of diverse entities across the length and breadth of the entire supply chain. This combined with changing regulatory norms and bureaucracy makes it challenging to drive technological reforms.

How would you prioritize areas within a supply chain for IT enablement? Can you establish a road map?

In our view the organizations first have to get their house in order or in other words, automate their in-house

What are the next game changers for IT in Supply Chain services?

The internet of things has a definitive impact on future supply chains.

The Internet of Things allows objects to be sensed and controlled remotely across existing network infrastructure, creating opportunities for more direct integration between the physical world and computerbased systems, and resulting in improved efficiency, accuracy and economic benefit. In the logistics industry visibility and security are two very critical parameters with

IOT the ability to control / track shipments increases dramatically.

The process bottlenecks like queues for scanning, gating in etc. can be potentially eliminated and we could have much more efficient and secure supply chains with IOT. What should be the top IT priorities for a Supply Chain Service Provider?

Supply chain firms shall first of all have clarity of objectives in changing the technology. The IT projects should be aligned to the overall strategy of the organization.

It could be pure compliance, competitiveness, efficiency, customer satisfaction etc. Then they should have realistic budgets for such projects. They have to understand that they will need to have an internal team committed to the project. Management commitment is equally important.

They should consider the Total Cost of Ownership of the system and the tangible, intangible benefits associated with the change. They have to choose the technology partner based on credibility, proven experience, innovation capabilities, and domain expertise. Finally they have to be open to adopting the modern processes brought about by new technology and not insist on recreating the old system out of the new system that they select.

How can we improve collaboration – both within and outside the firms – specifically in the Supply Chain services sector? What are the benefits?

Collaboration is the only way businesses can grow today. Kale has the unique distinction of being provider of ERP systems that help several logistics players automate their internal businesses and it provides multi-modal cargo community systems that help the stakeholders in the supply chain do business with each other digitally.

While we have heard about cargo Community Systems worldwide, they SCMPr

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Tech Talk do little beyond simple message exchange. To bring in collaboration in reality industry needs to adopt collaborative platform solutions that meet certain key parameters, likeForming Digital Communities- In India, we have already created India’s first Cargo Community Platform – UPLIFT, which essentially is a digital cargo community of importers, exporters, forwarders, customs brokers, airports, airlines, freight stations, customs, chambers of commerce and banks.

Innovative models of Technology Adoption- The collaborative platforms that we are referring have several fulfillment mechanisms including web portals, system to system integration and bureau service.

Neutrality- Most CCSes across the world are not neutral, these have their parentage to either carriers or airports or forwarder networks so there is an inherent conflict of interest. Keeping this in mind and working closely with associations like ACAAI, we developed UPLIFTwhich is a completely neutral platform so there is no conflict of interest. A neutral CCS solution is not transaction centric but is stakeholder centric who focusses on the end users across the supply chain as opposed to just one entity like a forwarder or an airline or an airport.

Low Investment and high returnsOur community systems are available on Software as a Service (SaaS) basis and companies can just pay as they use using just any device with an internet connection.

Accessibility- A collaborative solution needs to be available across multiple platforms like PC, mobile phones. This ensures that users have tools to prevent service failures rather than report service failures, which is the case in most ordinary systems.

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What are the advantages and disadvantages of SaaS in supply Chains?

SaaS based supply chain solutions enable firms to adopt technology at minimal investment. SaaS is much more agile, flexible, cost effective and efficient. It has innate ability of alleviating the burden of investing in in-house hardware, system software and maintenance service. It actually brings to fore many more layers of security as opposed to the meager security measures that individual companies can take. Most importantly, it helps in creating a partner community in supply chain and delivering a visible supply chain. In the traditional inhouse supply chain models, there is limited scalability, flexibility, compartmentalization and higher costs.

Some of our own next generation cloud based/ SaaS supply chain solutions are offered via innovative payment models which cost as low as INR 3,000 per month which is less than the salary of the lowest grade employees that organizations can think of. Such models of technology adoption help SME players in the supply chain take advantage of modern technology without significant CAPITAL investment.

Do you have any examples of how real time information has helped supply chain performance?

There are several examples to cite here. Let’s say there are people who export grapes from India to UK. It is important that their grapes reach the UK retail stores on time to beat the competition from grapes from say Latin America. Now in the absence of real time visibility, the exporter would not know where exactly his grapes are and if these don’t reach the stores in UK in time then he will lose the order and a lot of money.

A connected supply chain system giving real time visibility can help him take necessary actions to move the goods faster especially if these are stuck at any transit hubs.

Another example would be a car manufacturing company importing auto parts from let’s say- Germany.

In the absence of visibility of where the shipment is, in order to make sure that there is no shortage of raw material at the assembly line, the car company will have to stack up a lot of inventory in the supply chain which increases the product cost. A system giving real time visibility of the shipment can actually help the company in keeping the inventory costs low.

What is the impact of SMAC in supply chains?

Social. Mobile. Analytics and Cloud is affecting every business on this planet today irrespective of size.

So much so that, even if you are a big conglomerate, your business is at risk, if your neighboring Harrys store is reaching out to his customer more actively, regularly and with the solution that he seeks.

Technology companies will have to embed the SMAC abilities in to their system in times to come. Experts predict that by 2020, as many as 100 billion computing devices will be connected to the Web in turn doubling the data management efforts of all businesses. So SMAC will have a multiplying effect on businesses and increase productivity across the organization.

How to Measure ROI on IT Investments in Supply Chain?

The benefits of IT investments can be measured in reduction of direct costs, indirect costs in manpower, reduction of administrative work, reduction in paper handling, reduction in regulatory compliance costs (our customers actually save over 70% in customs declaration costs by using IT systems), reduction in turnaround time, and reduction in inventory. There are several models available but each organization has to tailor these to their own business.

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Tech Tech Talk Talk

A Strategist’s

Guide to the Internet of Things

Frank Burkitt is a Senior Executive Advisor with Strategy& based in Los Angeles. He leads the Internet of Things and digital operations services for Strategy &’s Digital Services. He was formerly the CEO and founder of Release Plan, a cloud-based enterprise software company. This is the concluding part of this series. This article was originally carried in the Strategist. Reprinted with permission from Business Standard.

Frontiers in Supply Chain Analytics

Frank Burkitt Senior Executive Advisor with Strategy& based in Los Angeles

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The Enhancers emerging today will develop new types of services, many of which will undoubtedly disrupt or leapfrog past today’s business models. Companies with the potential to act as Enhancers would do well to begin planning for that future now. They can position themselves by focusing attention on the experience they provide their customers. They should start looking

into technological and business issues, such as how to share data with existing hubs and services, and how to structure business partnerships. They will also need to develop a strong innovation capability, oriented around developing and continually updating their suite of services connected to the Internet of Things.

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Your Company’s IoT Strategy A wealth of opportunities exist for each of the three types of IoT strategy models: Enablers, Engagers, and Enhancers. Entering the fray, however, should not be undertaken lightly. The IoT market’s newness and heterogeneity will make it difficult to negotiate, even by those companies with the strongest capabilities and the clearest, most compelling value propositions.

Many challenging issues remain.

Customer demands and expectations are still hard to discern, and the hardware and software standards for the IoT are still evolving. Billions of endpoints and intelligent devices must be integrated. The data they produce must be managed and analyzed. This is no small task, especially given increasing concerns about security and reliability.

Consumers are coming to expect greater control over their personal data, issues surrounding the privacy of tracked information and sensitive data (such as e-health records) are ongoing, and it is unclear how vulnerable many of the devices and clouds that make up the IoT are to hackers and malicious code.

We expect some companies, and perhaps some entire industries, to be reluctant to share data with other enterprises in an IoT context, especially given these unknowns about stability and security.

If your company wants to stake a claim with the Internet of Things, you first need to develop a distinctive “way to play”—a clear value proposition that you can offer customers. This should be consistent with your enterprise’s overall capabilities system: the things you do best when you go to market, aligned with most or all of the products and services you sell.

With those elements in place, if you tread carefully and methodically, the time is right. To develop a strategy for the IoT, you could proceed by addressing, in order:

1. Your own role in the IoT. Given your existing value proposition and capabilities, are you best suited to be an Enabler, Engager, or Enhancer?

2. Industries and markets. Assess how your business environment is being (or could be) transformed by the IoT. If you are an Engager or Enhancer, what endpoints, hubs, and services are already being sold in your market? How are they expected to combine? What sense do you have of the demand for them? The more IoT activity that already exists in your industry, as it does in healthcare, automotive, manufacturing, and home related sectors, the more rapidly you will have to move.

3. Customer or business engagement. Because value in the IoT will be created through the transformation of customer experience, you need strong capabilities in experience design.

Even if you are an Enabler, without direct customer contact, or if opportunities for engagement appear limited in your industry, the IoT could eventually transform your business. What capabilities do you already have in this area, and what will you need to develop?

4. Connected products and services.

Assess your current lineup of offerings to determine which can be enhanced through IoT connectivity, and what new ones could be developed expressly for the IoT. For new launches and innovations, take into account how connectivity will be established, how your company will analyze and use the resulting data, and which other companies you might collaborate with—all set against the proposed revenue model and income stream.

5. An enhanced connection. Most Engagers will deploy an initial wave of basic connected devices and services. Then they will build further services by using analytics to gain insights from the wealth of new data that the IoT provides them. As these deployments unfold, Engagers will look for ways to increase value. This

is where Enhancers will come in.

What new business models might emerge? Would you want to develop any of them, or do you want to partner with other companies that can help serve this need?

6. Your organization’s capabilities.

Your company will need to distinguish itself in this space. What will you do that no other company does as well (or at all)? What improvements and investments will you need to make? Where will the necessary time, money, and attention come from; what activities will you need to divest or downplay so their resources can move here?

You may also need to develop some “table stakes” capabilities that all IoT companies must have. These include the ability to manage and analyze huge quantities of data, to integrate diverse portfolios of services, and to build business relationships with other IoT-related companies, some of which may have very different cultures. You probably already have innovation processes in place, but they may not be customer-centric enough. You may also need to foster more opportunities for people in your company to experiment and learn rapidly about what works and what doesn’t.

One virtue of the IoT is the degree to which companies lacking in technological expertise can lean on the devices and platforms that others build. Even so, the creation and delivery of IoT services will require you to design and prototype their new services, to manage them once implemented, and to analyze the resulting wealth of data.

As new and challenging as today’s IoT is, it offers a large and wide-open playing field. The companies that gain the right to win in this sphere will be those that understand just how disruptive the IoT will be, and that create a value proposition to take advantage of the opportunities.

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Human Resource

Hone your sales pitch Job Seekers!

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How to simplify a resume and creatively pitch your wares.

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The first step to landing that dream job is writing a resume that will attract the attention of the recruiter – something that stands out from the clutter. Writing a resume is a vital step in the recruitment process. Darryl Judd, COO of Logistics Executive writes on the art of resume writing.

Darryl Judd COO, Logistics Executive

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Over the 25 years that I have been in executive search, I have covered a range of different roles in various levels and different technical functions. It never ceases to surprise me at how difficult resume writing is for candidates. In this age when the recruitment business moves at a much faster pace and is a much more competitive industry, I can understand that many candidates must feel a bit overwhelmed coming to terms with how to express their lives in a resume.However, it is not as hard as it seems. It just takes a bit of creativity – good grammar and a clear purpose. I might add that a dose of confidence in your ability and aiming for the right level of role helps a lot with the process.

It is important to understand exactly what you have to offer the

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marketplace. It is also important to know where your interest and strengths lie. However, ascertaining these attributes is a completely different article, so for this exercise let us assume you are very clear on that.

No matter which level of position whether it is an executive applying for a CEO role or a mid-level Manager or even a graduate, it is important to follow some basic guidelines.

Remembering that your audience, who will read your resume -including HR and Line Managers -, will need to sift through lots of resumes. Your mission therefore it is to make their job easy whilst making your resume stand out. Think of your resume as your sales document. It needs to sell all your fantastic tributes in an easy

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Human Resource to follow comprehensive manner in a clear format, which anyone can follow as follows:The simpler you can keep your resume to better. It is important to denote any reference that will validate the information you provide. ● Start your resume with your personal information, include of course, you are name location and brief introduction. ● Your next section would outline your academic achievement. ● The third section would be titled to plan history and briefly that would be expressed as follows: Name of company Years of tenure Responsibilities Achievements With each of the sections, you need to supply clear information that will include metrics, which validate your information. In the responsibility section, you can include the breadth of your role; your experience and you can layout any projects, which highlight special skills.The “Responsibilities” section allows you to set the scene so to speak by outlining the plot and detailing the background. In the “Achievement section you have the opportunity to describe how you actually went about succeeding in meeting all the requirements of your responsibilities and fulfilling the scope of your role to a satisfaction level or above.

It is always important once again, with any information offer lots concise clear metrics that easily validate your achievements. This is the most powerful section of your resume.

Some people include a lot of information right at the beginning of the resume about how they have many different skills but they do not offer any context. Recruiters will tell you that in many instances this is a waste of information and effort in a résumé. Unless you can set that skill with in the setting of a workplace

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that will then give us a reference of the scope of your role and the level of your challenge, it is impossible to workout the level of your ability at your job. So setting the scene is incredibly important. Of course, this allows you to really shine and express your achievements because there is a clear understanding of the challenge and well-defined idea of the metrics on how you achieved.

Now that we have undertaken a brief understanding of what is required in a resume, let us look at that creative aspect. As mentioned earlier, in today’s marketplace recruitment is no different to any other field in that it is change dramatically and is continuing to do so at a very rapid pace. It is very competitive out there.

So how do you get in the traffic to be noticed?Of course, there are various ways of being noticed. Nina Mufleh in her recent article “What a Year of Job Rejections Taught Me about Pitching Myself” in the Harvard business review, described how she followed the traditional path of job search. Coming from the Middle East, she decided to hit the job market in Silicon Valley. After an entire year with no success she realised she had to try something different.

She ingeniously decided to write a report for Airbnb about the promise and potential of expanding to the Middle East as it was an area that she knew well. She did her research and wrote a report, which she then disseminated via her twitter account.

As well as distributing it to her personal and professional contacts.

Within a few hours, she found she had a request for an interview and within a few days, she had many interviews with the top companies she was targeting. This was followed by success in a few weeks with the exact role she been looking for.

Therefore, creativity pays off!Going back to what we were talking about the start of this article it is important to know your strengths and interests.

However, it is also important to know what Employers and recruiters my think are your weaknesses. By

understanding where your skill gaps or experience gaps might be you can take measures that will counter any negatively perceived impact off confidence. In Nina’s case, after one year of being on the job market without success, she realise that it was her lack of experience in Silicon Valley that was inhibiting confidence and stopping her being selected for interview. This disadvantage meant that she was perceived as someone who did not have a strong local network and her previous company in the Middle East was not widely known. This meant that recruiters could not correctly assess her ability because they could not understand the context of her role. If you recall in the example of employment history, we talked about setting the scene and putting together the story.

If we are talking about a company like Microsoft, we are imagining a certain kind of individual who would work there. If we are talking about McDonald’s, obviously we have a completely different culture and style of employee. In this case, recruiters did not know Nina’s company name and so they did not take the chance of assessing her further. They also assumed that she would not be able to undertake one of the key essential things that were required in her role, which was to professionally network because once again due to her lack of local experience.Nina’s comeback, upon realising these shortcomings, was ingenious! In such a short time, she manages to completely turn around her situation. A perceived negative was completely sidestepped and by demonstrating her skills through social media, she achieved real notice in her chosen field.So these days not only do you have to get it that piece of paper right by way of your sales document/resume, you also need to find a special way of standing out. This may or may not include your resume however it’s this sales document as we call it that will ultimately get you across the line.

So, get writing!

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Join India’s Premier Community of Supply Chain Professionals ISCM and SCM Pro announce the launch of India’s first exclusive community for supply chain management and logistics professionals.

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29-Sep-15 2:51:49 PM

SCM SCM Updates Updates

Technology advances in logistics sector necessary to meet increasing delivery demands DHL Express Sub-Saharan Africa has launched pocket-sized, all-touch computers that capitalize on the latest technological advancements The rise of e-commerce and increased competition are driving the demand for real-time supply chain visibility. This is according to Oliver Facey, Vice President of Operations for DHL Express Sub-Saharan Africa, who says that supply chain operators should increasingly invest in transportation management systems and solutions to improve the quality, speed and precision of service. He says that these improvements will not only enhance customer experience, but also reduce operating costs and give operators a competitive advantage.

It is for this reason that DHL Express Sub-Saharan Africa has launched pocket-sized, all-touch computers that capitalize on the latest technological advancements, and ensure customers on the continent benefit from increased visibility and an enhanced experience. The TC55 scanners operate on an Android platform and in addition to ease of use; they also have built-in location services and GPS navigation capabilities.

“We operate across 51 markets in Sub-Saharan Africa, servicing over 40,000 customers; therefore delivery efficiency is key for us. As a network business, we need to ensure that our shipment data is captured accurately and in realtime. Our growth plans and improvements are driven by the voice of our customer, and in challenging and competitive global environments, they need us to provide accurate and real-time information to ensure that they maintain their competitive edge and speed to market,” says Facey “The new technology increases the speed at which we can process shipments at both customer locations and DHL facilities and also empowers our frontline employees with access to real-time shipment information which will assist them with workload management. Unlike consumer-grade counterparts, these devices have integrated data-capture capabilities, and are also built to endure the wear and tear of industrial environments,” adds Facey.

Benefits for DHL customers include real-time shipment visibility, enhanced electronic proof of delivery, and on-time billing.

DHL Express has introduced 400 TC55 units in four of their largest markets in Sub-Saharan Africa: South Africa, Nigeria, Kenya and Mauritius. Further deployment to their top 20 markets across the region will take place in the coming months.

“We want to simplify the lives of our customers and ensure that we remain the provider of choice for international express. Our relentless focus on new capabilities ensures that we are well positioned to support our customers’ business,” concludes Facey.

Maini Launches Maini Mobile Express – an Innovative Customer Connect Exercise Maini Express is a mobile experience center showcasing comprehensive material handling and warehousing solutions. This is a first in the industry initiative by Maini Materials Movement in association with NACCO Materials Handling Group (NMHG), USA .It’s an all India campaign covering more than 50 cities and 200 + industrial hubs. Maini Express was unveiled in Gurgaon by August end and we have been receiving great responses everywhere we went.

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SCM Updates

JDA Creates a More Profitable Omni-Channel Supply Chain JDA Software Group, Inc. has announced new integrated fulfillment capabilities that combine the power of JDA Intelligent Fulfillment™ and Labor Productivity solutions with Order Management solutions from IBM Commerce. By leveraging this powerful technology collaboration, companies can process orders more intelligently and profitably across sales channels in real-time to ensure customers have a flawless end-to-end buying experience.

“The convergence of physical and digital retail has changed how you need to deliver on the customer buying experience. The customer is the new boss and they want their product, at their moment, at their price, delivered their way. As a result, companies need to offer personalized, differentiated customer experience while delivering the order as promised,” noted Wayne Usie, senior vice president of retail, at JDA. “In the past, retailers made fulfillment decisions without a holistic view of inventory, labor and transportation availability and costs, and have historically sacrificed profit margins to deliver customer satisfaction. With this release, we have bridged that gap and provided the foundation to solve this problem by integrating with IBM to provide the necessary visibility in execution to labor and demand impacts -- allowing companies to begin improving profitability with each omni-channel order.”

“Many retailers force shoppers to choose between convenience, product selection and price as they shop across channels. In fact, some shoppers that select the ‘pick up in store’ option might need to visit multiple store locations to fulfill their entire order, which ultimately tarnishes their brand experience,” said John Mesberg, General Manager, Offering Management and Strategy, IBM Commerce. “By leveraging the combined expertise of IBM and JDA, retailers can present order fulfillment options in real-time that delight demanding customers and ensure that a great experience lasts from the first click to when they have their purchase in hand.”

“As omni-channel retailing continues to advance, we believe that integration between physical and digital channels is vital, as is tighter integration between eCommerce, Order management and all elements within the supply chain.

This will be key to driving better customer service through increased responsiveness and at the same time, improve business efficiency, said Peter Swann, operations director, Debenhams. ”We believe customer expectations will continue to increase and that the collaboration between IBM and JDA in developing their Intelligent Fulfillment suite of solutions, could provide companies with the platform to meet those expectations but also do it in the most profitable manner.”

“Today, only 16 percent of companies are able to serve multiple channels profitably, in part because their order fulfillment systems are not integrated with other key systems. Most retailers cannot see the true cost of fulfilling a specific order, including inventory, labor and transportation costs,” said Usie. “For the first time, JDA’s collaboration with IBM balances a customized buying experience for shoppers with a realistic cost-to-serve model. This unique capability creates an opportunity to balance high levels of service with high levels of profitability, even in today’s challenging omni-channel environment.”

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