Celerity, in business through Supply Chain January - February 2018

SUPPLYCHAIN.CELERITYIN.COM January - February 2018 Volume 2 Issue 1 For private circulation only

INTERVIEW Devadas Nair, Customer Care Associate & Head-Supply Chain, Shoppers Stop Ltd., shares his company’s vision of being truly omni-channel.

THE DRIVING FORCE

PERSPECTIVE Initiatives being taken to provide a sustainable supply chain

In this analytical piece, Celerity team tracks the journey of auto components and spare parts in the automotive value chain.

PUBLISHER’S NOTE

A Buoyant Outlook Dear Readers, The year gone by was full of disruptions, a heady mix of doubts, solutions and adapting to the rapid changes in policies. All Indian enterprises rallied around and went with the GST implementation flow.

Logistics and supply chain got more news mileage in the last one year than in the earlier years put together. The news ranged from GST impact on logistics to IPOs of 3PL companies to news about various logistics start-ups getting funded from a range of a small ticket-size of $10 Mn to over $90 Mn this year.

And towards the end of the year, logistics sector got further recognition with the appointment of a Special Secretary (Logistics) in the Ministry of Commerce and infrastructure status. This unprecedented importance will attract further funding in the industry.

The government has been showing further aggression in implementing new processes, a case in point being the e-waybill to be implemented from February. There has been a lot of noise created regarding lack of clarity and time to adapt, however, the sector is hopeful that clarity will come in time and it is to our advantage how quickly we adapt and comply.

To enable our readers keep up in such dynamic times, we have also changed our cover story format.

We would be taking up one industry vertical and analyzing the supply chain and logistics of it. This issue looks at the automotive components and spare parts industry. We hope our readers from other industries will co-relate and enjoy the read. Please do spare time to write to us on what else you would like us to cover.

As another exciting year is unfolding, we hope that in all companies this aspect of business will now attract better investments and talent from within the company and supply chain & logistics heads become a key part of every board-room decision.

Amen!

Charulata Bansal Publisher Charulata.bansal@celerityin.com

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

Logistics Partner: Blue Dart Express Limited

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CONTENTS

January - February 2018 Volume 2 Issue 1

18 COVER STORY THE DRIVING FORCE

In this analytical piece, we cover the entire facet of auto components supply chain, taking the holistic perspective from the manufacturers to the service providers.

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FOCUS

Gauging the distressed affair of cold chain Mihir Mohanta, General Manager (SCM), Mother Dairy, asserts that in order to bring change, the key stakeholders of farmers and traders have to join hands to grow in protected condition & transport in cold chain.

INTERVIEWS

10 All for ONE Devadas Nair, Customer Care Associate & Head-Supply Chain, Shoppers Stop Ltd., shares the power of collaboration in the changing retail dynamics with supply chain as the nerve centre.

PERSPECTIVE

14 Mission Zero Emission Ketan Kulkarni, Senior Vice President & Head – Marketing, Corporate Communications and Sustainability, remarks that greening of the logistics sector in India needs a holistic strategy to make a decisive shift to green transport.

15 Sustainable supply chain: performance enabler Kanishk Negi, Global Supply Chain Sustainability, Manager, ABB (ASEA Brown Boveri), decodes ABB’s sustainable initiatives.

29 OPINION The art of being an effective follower Karuna Shankar Pande, Director Supply and Logistics, AB Inbev India, believes that to be an effective leader one needs to be an effective follower first.

31 RECAP Trending @ Celerity

25 Milling a fine supply chain For Vivek Gaurav, Head – Planning, Customer Service & Logistics, General Mills India Business, this is the golden era to be a part of a challenging supply chain journey.

As we step into 2018, here’s stopping and looking back at some insightful remarks of 2017, which are universal to all of us.

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

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

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

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FOCUS

Gauging the Distressed affair of

COLD CHAIN

India has about 7100 cold stores with a holding capacity of 33 million MT. But the challenging state of affairs of cold chain infrastructure in the country needs to transform to be more reliable, capable & technically competent in order to reap benefits of India being famously known as the agrarian state.

The standards and practices have to be evolved & percolated down, even to the levels of truck drivers. The key stakeholders of farmers and traders have to join hands to grow in protected condition & transport in cold chain to drive the change, believes Mihir Mohanta, General Manager (SCM), Mother Dairy.

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ndia is one amongst the world’s largest producers of several Fruits & Vegetable (F&V). It is second only to China in terms of total production.

It is number one producer of Mango, Banana, Okra and number two in Potato & Tomato. With a total production of about 270 million MT of F&V, it even surpasses the combined volume of rice & wheat together. But if you look at the extent of processing, it processes just about 2% of the production, while for China it is 40%, US 65% & Malaysia 85%. Hence, most of the F&V that is produced in India, is consumed in fresh form.

The large quantity production is also associated with a very large quantity of wastage. As per Central Institute of Post-Harvest Engineering and Technology (CIPHE), 18% of India's F&V production - valued at Rs13,300 crore, is wasted annually. The commodities contributing to major losses are Grapes, Apples, Mango, Potato, Tomato and Onion. Of these, Potato, Onion, Tomato & Mango alone contribute to an extent of 63%. While the reasons of losses are many, one of the simple & easiest explanation given is that the postharvest losses are due to lack of the cold chain facilities in India. Some of the cold chain facts about India are as

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below: According to industry estimates, approximately 104 million metric tons of perishables are transported between cities each year.

Of this figure, about 100 million metric tons moves via non–reefer mode and only four million metric tons is transported by reefer.

Of this, majority of the refrigerated vehicles (>80%) are utilized for milk and milk products transportation.

The percentage movement of F&V through cold chain is negligible, while in USA it is around 80-85%, in Thailand 30-40%.

Potato which occupies 75% of the volume of the cold store does not use refer transport either for inward or outward movement from the cold stores.

Reasons of low cold chain engagement Now the million-dollar question is that despite the huge wastage, why is the cold chain engagement is so low in India? India with its diverse climate can produce any kind of F&V at any point of time at some location or other. To cater to the fresh demand, the crops are grown round the year, but the production geographies keep changing

as per the crop-climate requirements.

Typically, any consumption point has to undergo 3-4 season/supply arrangements during a year for the same crop. From a perspective of logistics, simple transportation is a nightmare for such a situation, leave alone the cold chain. The cost of the cold chain transportation becomes prohibitively higher (about 2-3 times) than the ambient transport. One of the reason for high freight is also because of the non-availability of the reverse load. The other issue with cold chain is

YAWAR NAZIR/GETTY IMAGES

FOCUS

The cold chain must appreciate the product shelf-life, storage requirements, demand & supply situation. These can provide price stability, reduce volatility & wastage which would benefit both consumer & farmers, but these will come at a cost. The consumers should be willing to pay for the additional cost required to manage the cold chain, least these cannot be sustained. that, inadequacy of the first and the last mile connecting infrastructure. These are almost non-existence. We grossly lack pre-cooling facilities at the farms.

Similarly, our vegetable vendors lack temperature controlled outlets. So, there are question marks around the cold chain integrity for movement till the consumer.

Status of cold chain in India India has about 7100 cold stores with holding capacity of 33million MT. Potato occupies 75% of volume of these but, it generates only about 20% of revenue.

Whereas the multi-commodity stores which account for 23% of capacity generate 54% of revenue. Technically speaking single commodity potato cold stores are not viable. But their survivals are owing largely to the potato trading

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& money lending business rather than rental on storage. The farmer’s stored potato serves as collateral to Banks for financing the cold stores owner. The cold store owner uses the finance to buy & stock potato or lend it to the farmers against his potato stock. As the stocks move to the cold stores, it gets consolidated at a fewer hands who happens to be owners of the cold store. These handful of people are in a position to influence the price.

This leads to volatility in potato prices despite maximum cold store utilization and even for normal production year.

Onion not only brings tears to the eyes of the house wife but also has history of bringing down the government. The story is quite the opposite here. There is lack of right kind of technically sound, ventilated &

air circulated cold stores. Most of the storage done in Nashik, Bhavnagar or Indore are not the cold stores but open Chaals, which allows free flow of natural air. Although most widely used, these stores do not provide enough confidence for safe storage. These kind of storage is subject to environment conditions.

With the passage of time from May to Oct the deterioration increases at an increasing rate. The losses could be as high as 35% in Oct. Significant investments do not come for Onion storage as the capacity utilization is less than 6 months & it has to compete with very low cost Chaals. Unless there is abnormal price increase, the normal years would not support cold storage of onion.

For Tomato, cold chains are not in operation. It is transported basis stage

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FOCUS Any cold chain for Fruits & Vegetable has to be a viable cold link between farmers & consumers. Both the production centers & consumption points need to be planned for appropriate crop, season, price, quality & freight.

Need a tech arm

of maturity at the time of harvest. If tomato is in green stage, it is sent to the distant market, if red consumed in nearby market & extreme red goes for processing. With more than 90% of water content, the shelf-life of the product is less than 7days. So, the trade does not retain its ownership for long, instead it is preferred for early disposal.

If the cold chain is to be worked out for the same, it needs to start from the seed varieties which have less water, higher dry matter & longer shelf–life.

This means that the orientation of the existing supply chain has to shift completely. The key stake holders of farmers and traders have to join hands to grow in protected condition & transport in cold chain. Here the consumer should be willing to pay for the additional cost. The abnormal price of Rs100/- per kg during the monsoon can be reined in if cold chain is resorted to.

For F&V, the cold chain is not just bringing temperature down but it also has to manage an entire range of the other parameters, which could impact its life. F&V in general are live products and they continue to respire. There are a host of parameters like Humidity, Ethylene, Carbon dioxide, Oxygen &

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Nitrogen, which can impact the life of a particular item. Certain items may need multiple parameter management while for many investments cannot be justified on the back of the low product value. But for the products like Apples which are single season, such Controlled Atmosphere (C.A.) management is beneficial as it can improve the shelf life up to 10 months as against life of 2-3 months in ordinary cold store. The constraint in apple is that there are not adequate cold stores available in the major growing areas like Jammu & Kashmir, which has the production to the tune of 17Lakh MT whereas the available storage is just 70K MT, similarly in Himachal, the production is 7Lakh MT & the storage available is 53K MT. The CA storage capacity is even much less.

Products sensitive to ethylene should not be stored together with products producing ethylene. Exposure to ethylene may soften the flesh, adding bitter taste to the product or/ and accelerate ripening. Each of the fruits & vegetable have different storage requirement, it may not be feasible to club two items together for cold chain unless both items have similar storage requirements.

Building cold chain for F&V is not just adding fleets of refer trucks or adding cold store capacities. There is a lot of technology involved in managing & maintaining the temperature & other parameters. The frozen F&V segment of the refer transport even today falters in maintain the required -18deg C temperature. The existing cold chain industry also has to transform to more reliable, capable & technically competent. The standards and practices have to be evolved & percolated down, even to the levels of truck drivers.

Any cold chain for Fruits & Vegetable has to be a viable cold link between farmers & consumers.

Both the production centers & consumption points need to be planned for appropriate crop, season, price, quality & freight. The cold chain must appreciate the product shelf-life, storage requirements, demand & supply situation. These can provide price stability, reduce volatility & wastage which would benefit both consumer & farmers, but these will come at a cost. The consumers should be willing to pay for the additional cost required to manage the cold chain, least these cannot be sustained.

Mihir Mohanta has worked for more than 25 years in the sourcing & supply chain function in the agri-food industry. He has a varied experience in the entire foodchain from crop production, procurement, food processing as well as food retailing.

He has rich organizational understanding as he worked in multinational companies, cooperative, private as well as quasigovernment organizations. His latest & most challenging assignment is in fresh produce, working directly with farmers across India.

The views expressed here are personal in nature and are not the views of the organization.

41A, AJC Bose Road, Kolkata- 700017. Tel.: 91 33 22640046. Email: mailus@innovativelogistics.in. www.innovativelogistics.in

Regional OďŹƒces: Kolkata, Delhi, Bangalore & Mumbai

INTERVIEW

ALL FOR ONE “We want to become a truly omni-channel company, which we will achieve in the next 3 months’ timeframe. With this initiative, we would want to achieve our vision of ONE Customer Identity, ONE inventory view, ONE Order history, ONE Customer experience,” envisions Devadas Nair, Customer Care Associate & Head-Supply Chain, Shoppers Stop Ltd. In this free-wheeling interaction, he shared the broader spectrum of retail and how collaboration can change the entire retail dynamics with supply chain as the nerve centre. Excerpts…

You have witnessed Indian retail revolution from close quarters.

Kindly highlight some of the changing dynamics. How was the scenario then & now? What critical role has the supply chain played in this revolution?

Supply chain management is the top management priority for retailers in today’s business scenario. Fierce competition is forcing retailers to respond to changes in the market quickly. This highlights the

growing importance of supply chain management in managing stock availability, supplier relationships, new added value services and cost cutting.

SCM is a key management function viewed to enable profitable growth in line with company’s strategic growth planning. The SCM function at Shoppers Stop coordinates and integrate all activities associated with moving products, services and information into seamless processes. This is facilitated by embracing all the partners in the chain

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including various departments, vendors, transporters and other service providers and necessary information system to monitor the SCM activities facilitates this.

SCM at Shoppers Stop begins and ends with customer. The guiding philosophy is to improve the organization’s performance by managing constraints and uncertainty inherent in the prevailing system. The focus is to use new tools and technique and change of mindset to manage the constraints and uncertainty.

When we started in 1991, organized retailing never existed in India. We are the pioneers of retail revolution in the country. We had nothing to benchmark our performance on. We have learned tricks of the trade on the go and built from thereon. Global best practices were not available for Indian companies at that point in time. For the first five years, we were only learning retailing and it took us that much time to open our second store. We were not even able to hire sales staff because retail was never a very respected profession then. Today the scenario has changed completely. You can see the best talent in Retail industry today.

At that point in time, we even had hard time convincing suppliers to provide us goods to sell. There was no tech-support. Then we took two major decisions in 1998. First, we implemented a Retail ERP package and implemented Merchandise Management System and that was one of the turning point for us.

Secondly, we decided to have Regional Distribution Centres, rather than dedicated DCs for each store, which is not an efficient model.

INTERVIEW How has outsourcing of logistics services aided in organizational transformation?

In 1995, we also took the decision of outsourcing our logistics services.

Today, all our warehouses are managed by 3PLs. We are extremely happy with their performance and association with us because we feel that if one takes the ownership of any job, the outcome is always better. We have close to 500,000 sqft warehousing spread among 4 DCs and all have been managed by 3PL partners. We have laid strong SOPs for clear understanding and guidelines so that there are no chances of mistake. With 85 Shoppers Stop stores and 15 Home Stop stores, we have been able to manage logistics extremely efficiently. It’s been close to two decades that all of these partners are still onboard. In supply chain, every day is a new day with something or the other new challenge coming to us. It is up to us to continuously keep upgrading the skillsets of the logistics team & impart training and move them to the next level of efficiency.

From the start, we were very clear that we are retailers and let us channelize all our energies into our core area of retailing, hence we have decided to outsource the logistics operation and use the expertise of the 3PL companies, who have expertise in managing the Distribution Centre operation better than us. To make the outsourcing operation success, one needs to have very high-level transparency with the logistics partners and also impart continuous training to the team to raise to the expectation. Every person in the value chain needs to take the ownership of the job they are supposed to deliver.

Today everyone strives for achieving the best and is always ready to take new initiatives. Recently we have implemented warehousing management system at all our DCs from JDA Red Prairie. There is no manual process

supplychain.celerityin.com

Being in the business for close to three decades, I can surely say that every day will pose a new challenge in retail. We will have a lot of good days & bad days but there wouldn’t be any boring days in the life of supply chain professionals in retail industry. Sky is the limit for us to take any new initiative and be a part of the change. When you have that kind of scope to play with, you would always enjoy that work. There is lot to do and achieve. now while receiving and replenishing stocks as we do 100% scanning now.

Once the merchandise is scanned, it is automatically uploaded in the system.

We also have Perpetual Inventory Count system for stock takes. Earlier we used to do this exercise yearly, which has now come down to quarterly and it has greatly benefitted us in ensuring higher level of inventory accuracy and thereby enhancing the inventory replenishments to our stores. The stock take is done for few brands every day and within 3 months we complete the entire cycle, which is helping us in a big way. We have an Auto-allocation module running from DCs to store, replenishment happens almost every day to Local stores and we deliver the merchandise in the morning hours to ensure that the stocks are displayed before the First Customer walks in to our store.

If you look at the external factors, mall boom is itself a revolution.

Disposable income is increasing, and people are spending more these days.

These changing dynamics have inspired us to go beyond metros, which used to be the case earlier. Now we are really looking forward to service tier II & III cities. The introduction of wide and varied product ranges and the growth

of competitive pressures have been the driving force behind the development of logistics systems in the retail environment. The challenge for the retailer has been to maintain control of a supply chain which has grown in complexity.

How can a truly omni-channel market be developed?

Lot of technological interventions have been taking place in the company, which would aid us in attaining our vision of omni-channel. With online expansion, we also want to tap into unexplored regions to mark our presence. We want to offer them the whole inventory, which is available instore. In short, omnichannel integration is aimed at achieving three things: single view of customer, single view of order to know his shopping history and preferences and single view of the stock across 85 stores, 4 Distribution Centres.

What are the tech tools you are implementing in enhancing supply chain?

For the company, digital evolution relates to the application of digital technologies across three main functions: Customer Experience and service (both online and offline), Merchandise and Supply Chain Management and Customer Analytics.

We have made significant investments in multiple technologies such as Warehouse Management System(WMS), Order Management System, CRM, Master Data Management, etc., to enable single view of the customers. This will allow us to provide our customers with a

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INTERVIEW in retail. We will have a lot of good days & bad days but there wouldn’t be any boring days in the life of supply chain professionals in retail industry.

Sky is the limit for us to take any new initiative and be a part of the change.

When you have that kind of scope to play with, you would always enjoy that work. There is lot to do and achieve.

Every day is a new day in retail and for me, it’s a thrilling job.

How do you empower talent and what do qualities do you expect in supply chain professionals for hiring?

contextual, targeted, personalized and integrated shopping experience. With warehouses in Mumbai, Bangalore, Kolkata, and Delhi, we wanted to build certain capabilities for the digital future. We had a powerful warehousing solution that met the demands of the varied distribution environment in which we operate. But we wanted an integrated, optimized and feature-rich WMS to help achieve our omnichannel vision. So, we deployed the new WMS solution in January 2017. The project has reduced warehouse operating costs, 24x7 warehousing operations have reduced the store replenishment cycle time drastically, systemized putaway has ensured a 30% increase in order picking accuracy while also leading to an overall inventory accuracy.

Earlier this year, we implemented a Master Data Management solution.

The procurement process will gather data and digital content from Shoppers Stop’s vendors through a standardized process; merchandizing will be able to quickly grow the portfolio of private and exclusive brands with rich content for every product feature. Between the Warehouse Management System, the Order Management System, Master Data Management, and Customer Relationship Management – there are multiple data points and data flows that need to be streamlined and unified across the channel. An Enterprise Service Bus was needed to process this data swiftly and accurately across channels. In order to address this requirement, we are adopting Enterprise Service Bus. We have last 2 decades’ data with us as far as demand planning is concerned. We exactly know

customers’ requirements based on the past data. We also can calculate like-tolike growth for each store.

You have been a part of Shoppers Stop since the initial years. What has kept you going for many years when people believe in switching jobs?

When I joined supply chain industry around three decades back, Distribution Centres were regarded as ‘godowns’ and everything used to be manual be it tagging, packing, shipping, which used to take 3-4 days. We were 100% people-dependent. There were days when we couldn’t dispatch stocks owing to the absence of that particular person managing the task.

Today everything is tech supported and is completely fool-proof. Having said that, we need skilled manpower.

Owing to people dependency, there were chances of mistakes. These days systems will prompt people if they have picked up the wrong size or stock. Accuracy results have drastically increased. Technology has evolved at a very fast pace that no one can imagine. Moreover, warehousing has seen a transformation. The structure, flooring, equipment, height and the nuances of distribution centres have changed. There are multiple entry & exit points at DCs which used to be only one in earlier days. Supply chain has also evolved through the technological advancements. Today one will find logistics parks built with all the amenities in every region.

Being in the business for close to three decades, I can surely say that every day will pose a new challenge

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Manpower requirement is really high in the retail industry now. Today in DCs also you would find women taking charge, which was hardly the case earlier. In older times, we were unable to find institutes in this country, which trains manpower as per industry requirements. These days, thankfully owing to the awareness about the industry and the latent opportunities that it presents, MBA institutes have started including supply chain as a dedicated course. I can get enough and more supply chain professionals today to join us as trainees. Retail supply chain is really growing well. As far as hiring is concerned, we definitely look for prior experience be it retail or supply chain. When it comes to on the job skill enhancement, we host a lot of internal trainings and send the employees to external conferences to hone their skillsets. At Shoppers Stop, we have a very defined SOP, which leaves no scope of error and no employee can actually go wrong if they follow those procedures dedicatedly.

Kindly share with us the most challenging project managed by you.

Prior to 2006, we would generate proprietary product codes, print barcodes at our end and dispatch to hundreds of our suppliers through the country. This required ensuring that correct barcodes were generated for thousands/lakhs of their merchandise.

It entailed substantial costs besides delays in receipt/dispatch of labels by partners with consequent delay in receipt of merchandises. It also resulted in inaccuracies and mismatches between orders placed and supplies received due to proprietary product coding practices followed by SSL and its partners.

INTERVIEW

Shoppers Stop has cracked the code on the personalized shopping experience. The lifestyle retail chain has launched a program called ‘Personal Shopper’ to provide a great shopping experience to customers, by attaching an in-store expert who accompanies customers during their visit, provides suggestions and style tips, and attends to all their shopping requirements.

Since 2006, we have switched from internal, proprietary product (SKU) coding to GS1 product identification standards in barcoding of all our merchandise, in line with global best practices. This change has enabled us to realize significant benefits from seamless information exchange with our trading partners and improve data quality through unambiguous and unique identification of merchandise across product categories, saving time, effort and associated costs to us.

For Shoppers Stop, GS1 standards have brought together companies representing all parts of the supply chain – manufacturers, distributors, retailers, and more. Today, GS1 standards mean much more than the barcode and include standards for electronic business messaging, data synchronization and RFID-based identification and solutions to a range of business issues related supply chain operations. These standards enable businesses to manage the supply chain more efficiently and to respond to challenges of a globalized supply chain by increasing their efficiency and maximizing profitability. In today’s global economy, an efficient supply chain is a must and GS1 standards help us to achieve the same.

What are the aspects that can develop a seamless supply chain network in the country?

I believe that for change to happen, the entire industry needs to unite. Push needs to happen from the industry side.

Support is needed from all spheres to attain a holistic development. We have been taking lot of first-time initiatives in the supply chain domain. If there is support from the service providers, distributors and the retailing fraternity

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at large, the magnitude of impact would be much higher.

We need a common platform where all of us can discuss and deliberate upon the challenges faced and come to a consensus to drive the growth ahead.

Until and unless that happens, it would be extremely challenging to change the dynamics of the industry. There are finer nuances that need to be ironed out. Supply chain has to be play an enabling role because the expectations are what’s sold today need to get replenished tomorrow. If that’s the kind of commitment we are desiring, we need to have systems & processes and a common goal in mind to achieve the same. For me, this is one of the biggest challenges leave aside the government side bottlenecks be it infrastructure or anything. We as an industry first need to play our part.

What are the industry-wide initiatives that are needed to achieve holistic growth?

We have a strong connectivity with our vendors through B2B portal. We provide all the information to our vendors on a daily basis. This is still a one-way traffic and we want it to actually develop a two-way traffic. What we desire from our suppliers is to give us the exact information and use data to further simplify the process by coming to us and telling us that this is what they can offer us more. There should be complete visibility of their processes as well. When a supplier can see everything online, they can always come to us that we can produce these many pieces more for you. This is the reason we are providing so much information to our vendors. Any information available has to be take due cognizance of. It has to be win-win for all. Today sky

is the limit in retail but it just can’t be one person or one company driving the whole revolution, it has to be holistic. It’s time for manufacturers and retailers to sit together, do a milk run. The goods can come in containers for 4-5 retailers so that the cost can be shared and there can be a better use of vehicle instead of four different vehicles plying on roads. Similarly, when it comes to reverse logistics, there should be a mechanism where no empty vehicles move on the road. In fact, the quotations can also be negotiated well with the transporter as going alone, he can quote any random amount, but if five people go together, he might give a better deal. We are pushing this initiative through different channels.

Currently any transporter can come any time of the day to pick the stuff at our DCs, which is not the case overseas. We have some cut-off time of accepting goods and after that time, we don’t accept any product at our DCs. Still people don’t adhere to those guidelines. If the transporter can take prior appointment and come to our distribution centre, things would be much more organized. A proper delivery schedule should be followed and adhered to. Can we have better collaboration is a question to ponder.

Can we have the visibility of inventory lying in your distribution centres? If you are technologically connected, every point in the value chain can be seen and desired action can be taken beforehand.

That’s what we are trying to project and focus on.

How do you see the impact of GST on your industry?

In the long run, GST is really going to be a gamechanger. Yes, implementation challenges are going to impact you, but it would ease our processes going ahead. Transportation time has also reduced a bit but the toll nakas are still going to be a challenge. Speed to market will definitely improve.

Devadas Nair has 30 years’ experience in retail supply chain. He has worked with Weekender for 8 years as Head of Logistics.

Since the last 22 years, he has been working with Shoppers Stop Limited as Head of Supply Chain and Logistics. His educational qualifications include Bachelor of Commerce from Calicut University, Kerala and PGDBM from Alagappa University.

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PERSPECTIVE

Mission Zero Emission “Investing in ‘green’ assets pays for itself over and over, both economically and environmentally,” asserts Ketan Kulkarni, Senior Vice President & Head – Marketing, Corporate Communications and Sustainability, during an interaction.

What crucial importance does sustainability hold in the current economic scenario?

Greening of the logistics sector in India needs a holistic strategy that involves planned interventions to make a decisive shift to green transport.

Massive investments are required in the form of infrastructure development and upgradation, fuel & system efficiency improvements and mobility management. The spatial arrangement of the various land uses or activities across the city is a very important factor in determining the intra-city travel demand. Therefore, any efforts towards integrated land-use and transport planning can significantly help in reducing the need to travel and lead to reduction in associated costs.

Upgradation in terms of fuel quality and fuel efficiency can promote cleaner fuel by reducing sulphur content and can lead to significant reduction in emissions. Electric vehicles are effective as a green growth intervention yield with multiple benefits, including reduced air pollution. The Government of India recently announced the Faster Adoption and Manufacture of Electric Vehicles in India Scheme, which is a step in the right direction. However, in order to accelerate the uptake of this green technology, it is recommended that the scheme be further augmented with substantial additional funding and provisions.

The awareness on the importance of environmental performance (e.g. reduce carbon emission and waste) has made green logistics more significant since the 1990s. The logistics industry must be supportive towards upholding social concerns and making an effort towards the betterment of society, thus focusing on Triple Bottom Line (TBL), prospering while allowing society to prosper.

What aspects according to you make up for the perfect green/ sustainable supply chain?

 Growing consumer awareness: Consumer awareness of productspecific carbon footprints will increase pressure that results in new regulation.

What are your sustainable strategies in place?

There is an ever-growing sensitivity among customers to opt for a green supply chain service provider and Blue Dart is aligned to their requirements.

The ultimate logistics challenge is to find ways, in which ‘green’ can increase revenue, reduce costs and nurture the environment.

Some trends that will transform logistics operations, particularly in emerging markets:  Creative, collaborative planning with customers: Find simple ways to better manage schedule requirements and supply chain planning.  Emerging markets and infrastructure: India needs to adopt cleaner, more efficient trucking.

Build better roads, quicker delivery, higher quality, lower environmental impact, and increased fleet regulation.  Industry, government, and civil society working together: Develop standards for measuring, reporting, and managing environmental impact in supply chain and logistics operations.  Regulations enabling positive change and good business: The logistics sector can play a role in crafting and enacting sensible legislation that will enable business, and reduce supply chain environmental impact.  Automated vehicles: In cities, smart trucks and electric vehicles to be used on a larger scale.

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At Blue Dart, GoGreen isn’t just a pillar under the Living Responsibility credo; it’s something we want to execute relentlessly to make a difference to the huge national green deficit. The company drives greater awareness about environmental stewardship and encourages its employees and stakeholders to live and behave in an environmentally responsible manner.

As part of Deutsche Post DHL (DPDHL) group, Blue Dart aims to follow the mandate of Mission 2050. From now until 2050, the Group’s mission will be to drive business towards zero emissions logistics by setting the standard for the future of the transport sector and doing its part to help the world community reach its goal of limiting global warming to less than two degrees Celsius. The new climate protection goal ‘Zero Emissions 2050’ includes four interim goals that we want to achieve by 2025 as per the DPDHL Sustainable Strategy:  On a global level, an increase of carbon efficiency by 50% as compared to the 2007 baseline.  On a local level, operate 70% of first and last mile services with clean pick-up and delivery solutions, such as bicycles and electric vehicles.  More than 50% of sales to incorporate Green Solutions, making customers’ supply chains greener.  As the success of these sustainability measures depends to a large degree on employee commitment and expertise, we will train 80% of our employees to become certified GoGreen specialists and actively involve them in the Group’s environmental protection activities.

PERSPECTIVE

Sustainable Supply Chain Performance Enabler “We have implemented a dedicated Supplier Sustainability Development Program (SSDP) to raise awareness and take our engagement forward in the area of sustainability. SSDP follows the approach of training, onsite assessment to identify areas of improvement and continuous monitoring,� highlights Kanishk Negi, Global Supply Chain Sustainability Manager, ABB (ASEA Brown Boveri).

What aspects, according to you, make up for the sustainable supply chain?

Sustainable supply chain means having suppliers who share the same vision as you when it comes to doing business.

It means having business partners who operate in an ethical manner, respect human rights and fair labor practices, operate in a safe and environmentally sound manner, the materials used are conflict free and in compliance with various international legislations and also communicate same standards to their sub-suppliers. Sustainability a way of operating and inextricably linked to how business is done.

What crucial importance does this hold in the current economic scenario? Can it be a roadblock to growth?

We are living in a changed world today and cannot follow economic model that drove growth engine in the past. Today, there is greater awareness about the impact of unbridled economic growth and excessive resource consumption.

It is clear beyond doubt that we have breached nature’s carrying capacity and if we do not change the way we operate, the life on the planet will be significantly and irreversibly impacted.

There is also huge focus on how we treat our fellow colleagues. People who work with us in the factories, shop floors, etc., and are the spokes of the wheel of progress. Whether they get the dignity, respect and rights, they are entitled for or get trampled under the giant bubble of economic growth.

These realizations have led to

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several stakeholders relooking at the way things are done. On the regulatory side, we are seeing increasingly stringent laws being introduced which extend the scope of responsibility of a corporation from the boundaries of its factories to further into supply chain and product use phase.

Some such recent regulations include the UK Modern Slavery Act, French Corporate Duty of Vigilance Law, Dutch Child Labor Due Diligence Law, Anti Trafficking Provisions of US Federal Acquisition Regulation, Dodd Frank Act-US, European Conflict Minerals Regulation, several country specific legislations around use of materials (similar to REACH and ROHS) etc. These regulations have global implications and make it extremely crucial for companies to take ownership of not just their own operations but also be on top of how their suppliers operate.

Increasing pollution levels have led to severe crackdown by public agencies on companies who violate or operate without proper consents and approvals.

We are seeing increased instances,

especially in emerging markets, where there was traditionally greater tolerance for these practices. In the past few months, several companies have been shut down or penalized for not adhering to local regulatory requirements. Such instances have not only impacted these local companies but also the supply chain of the global companies to whom they were supplying.

It is wrong to say that focus on sustainability will be a roadblock to growth. On the contrary, it will ensure better, stronger and more robust growth by reviewing focus on often ignored areas, leading to discovery of newer areas of efficiency for companies and to take on challenges that we are seeing now in business operating environment.

These developments are also changing the priorities of business. Investors and customers are now introducing several sustainability requirements as a pre-requisite to do business. It is clear that going forward only businesses that are factoring these requirements and integrating safeguards into their operations will have preference in the global market space and those who do not will see increasingly shrinking demand. Sustainability can be a strong pull for efficiency improvement and newer business relationships.

How can such initiatives be the real game changer for the industry as a whole?

Sustainability essentially means doing things in a better, resource efficient and compliant way. Usually in the blind rush of financial growth, the question of how it is achieved and the cost

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PERSPECTIVE

Increasing pollution levels have led to severe crackdown by public agencies on companies who violate or operate without proper consents and approvals. We are seeing increased instances, especially in emerging markets, where there was traditionally greater tolerance for these practices.

In the past few months, several companies have been shut down or penalized for not adhering to local regulatory requirements. Such instances have not only impacted these local companies but also the supply chain of the global companies to whom they were supplying. at which it is achieved gets ignored.

Several malpractices gain acceptance, like operating without proper permits or licenses, violating statutory parameters etc. Now with focus on stricter performance, especially in areas of labor, environment and health & safety, these malpractices are no longer a way of doing business. The stricter operating environment presents an opportunity of improvement by forcing an internal review, identifying inefficiencies and using innovative approaches to address them. More so since it is driven by external forces like customer, public agencies, etc., it is business critical and cannot be pushed back or ignored.

Some approaches that have proven useful include review of capacity utilization, workforce deployment, synergies of value chain within the organization, safety indicators, waste management, etc. To better understand: ad-hoc planning, casual management of shop floor and high safety incidents not only hurt employees but also impact delivery schedules and erode productive man-hours.

This increases stress on lead time and potential quality issues. When

addressed, these can result in more efficient processes and lesser disruptions leading to improved productivity and better cost management. In a similar way, monitoring working hours to prevent working beyond legal limits and correlating it with the production schedule and output can help identify bottlenecks in skills, machines or planning that need improvement.

Similarly investing in cleaner technologies can significantly improve resource efficiency and have significant financial incentives. These benefits can be easily quantified leading to better economics and a robust manufacturing sector.

Kindly highlight some of the initiatives taken by you to make the supply chain sustainable.

In our supplier relationships, sustainability performance is as important as commercial performance.

We strongly believe that one leads to the other and they can’t be separated.

Emphasis is given throughout the supplier lifecycle on upholding the sustainability performance. Our Supplier Code of Conduct (SCoC) communicates these expectations to existing and potential business partners. It is even part of our contractual agreements. In addition to English, the SCoC is available in 15 major international languages.

However, a policy is only as strong as the implementation. In order to ensure that principles of our SCoC are adhered in practice, the sustainability performance of potential business partners is evaluated at the stage of initial selection along with other business parameters. Any scope of improvement is communicated accordingly and in case of serious observations the suppliers may have

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to undergo an extensive sustainability evaluation. The performance on sustainability parameters has implication on the overall decision, whether the supplier can be part of ABB supply chain or not. To ensure that focus on sustainability does not change during business lifecycle, it is part of our routine evaluation of supplier performance. Hence, emphasizing on the continued adherence. The outcome of these evaluations impact the overall decision on business and strategic partnership.

We have also implemented a dedicated Supplier Sustainability Development Program (SSDP) to raise awareness and take our engagement forward in the area of sustainability.

SSDP follows the approach of training, onsite assessment to identify areas of improvement and continuous monitoring. It assesses business performance on 42 parameters, linked to our Supplier Code of Conduct, broadly classified under the areas of general management, working conditions, health, safety and environment and associated key local regulatory requirements. Special training material is developed, which correlates local regulatory requirements with the 42 parameters. The suppliers are trained through a variety of face to face or remote training sessions. They are then visited to identify areas of improvement and remedial actions are implemented. Suppliers are also supported by a variety of specialized training and coaching sessions including topical trainings associated with some chronic challenges. Combination of all these measures make sure that supplier sustainability performance is always in focus and adherence is never compromised.

COVER STORY

THE DRIVING FORCE

While they may seem to be mere tiny components of a giant vehicle, they have to power to break or make the performance and then entire value chain. One component lost or damaged can jeopardize the entire vehicle manufacturing process and can even shackle the brand image if the after-sales service is not up to the mark.

In this analytical piece, we aim to cover facets of auto components supply chain, taking the holistic perspective from the manufacturers to the service providers…

A

round 75% of automotive parts are not designed or built by car manufacturers themselves but by their suppliers, implying that car manufacturing is no longer a job of a single enterprise but of a complex ecosystem of supply chain partners.

In that regard, for companies in the automotive spare parts industry, growth depends on the success or failure of your supply chain management. “In a global, volatile, and variant-rich industry, the ability to seamlessly move products from the production floor to your customers’ door is top priority for supply chain planners and managers, and companies that achieve it, are able to leverage significant advantages over others”, avers Yevgen Sokolnikov, CEO & Co-founder, Boodmo.

Talking about the figures, the Indian auto components industry expanded by 14.3% to Rs2.92 lakh crore last fiscal on the back of robust growth

in aftermarket sales. According to the latest data by Automotive Component Manufacturers Association of India (ACMA), the aftermarket segment grew by 25.6% to Rs56,096 crore last fiscal from Rs44,660 crore in the preceding year.

Underpinning hopes on the longterm benefits of GST on the entire value chain, Ayush Lohia, CEO, Lohia Auto Industries, states, “Every automobile is developed by assembling more than 1000 components. Delivering on-time has a crucial role in this entire value chain. Stock of inventory maintained at the OEM level is very low. GST is going to play a key role in supply chain.

Warehouse consolidation has been one of the key areas where companies are focussing currently. Yes, there are implementational challenges, but you can’t undermine the long-term advantages that the GST is going to bring forth. Education and awareness would play a major role in simplifying the GST implementation. Collaboration

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among industry players would greatly aid in harnessing supply chain network.”

Various policy interventions have had a substantial impact on the dynamics of the auto components supply chain. Highlighting the goods & bads of the supply chain, TA Barathi, VP – SCM, Wheels India Ltd, said, “GST has been both good and bad for the auto components industry. We are in transitional stage as we are just four months post implementation. Let’s talk of positives first… we have become borderless state but how true it is a question mark. But again, it’s a learning phase. Hassles of crossing one state have been cut short to a great level.

There is an ease in the movement of goods. It has reduced time in terms of commercial taxation activity. Toll is still a worrisome factor for the industry as a whole and the government really needs to take a hard look at the same.

It’s not a matter of a few minutes, it gets stopped for hours, so imagine the amount of time we are wasting on

the go. Yes, the government has been taking due cognizance of the issues and they have been simplifying the process, yet a lot needs to be done but at a faster pace. It’s very easy to make a product today but very difficult to pass the entire value chain.”

Talking about the complexities posed by GST, L Venkat Madhav, Executive Vice President, Group SCM, Amara Raja Batteries Ltd, elaborates, “Because some of the clauses in the GST are not clear and if at all we want to bring in hub & spoke model by rationalizing the warehouses, cost has really gone up be it rental space or warehouses. Besides this, you really need to build a strong dealer network and keep the momentum going irrespective of these sudden shocks because no one would really be keen to work with you if there is no mutual benefit. For months, containers are being held up in Chennai port, which just doesn’t eat up our cost, but also hampers margins. People have no choice

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to clear the 7.5% duty paid. predicting business in such volatile market is extremely uncertain.”

Giving perspective from service side, R Shankar, CEO, TVS Logistics Services Ltd – India, shares, “Customers are in the process of realigning their supply chain post GST. We have adapted our systems and processes to meet the demands of quick delivery and tight service level agreements in line with this. There are a lot of opportunities that are opening up for us in terms of handling consolidated Vendor Managed Inventory (VMI) in warehouses close to their plants; and supplying it to our customers just in time.”

Sougato Shome, Sr VP, Future Supply Chain, adds, “Kitting (spare parts) is a differentiated value- added service (VAS) that we offer to our customers. We believe that the demand for kitting is picking up and the industry is going the ‘kit’ way to ensure the usage of genuine spare parts. Since we have already built up a strength in

this area, we are in a good position to exploit the rising opportunities here.”

Going deep into technicalities, Ravikant Parvataneni, CEO, Crimson & Co India, states, “Inbound to the plant supply chain, I think is pretty evolved with auto companies making vendor parks in and around the plant to ensure minimum inventory on hand.

In contrast, the outbound part, which is aftermarket spare parts has been given the least importance. I think it is probably because traditionally there has been a monopoly or a duopoly in most segments within auto industry, so the focus on aftermarket supply chain has not been there. If you see their factory warehouses and see their aftermarket Distribution Centres, there is a huge difference in the infrastructure setup, use of technology automation and systems.” Technology is nothing new in auto supply chain. It’s just that in assembly line it is easier to feed single unique parts through automation. But in a DC, the parts are in thousands and

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Ayush Lohia, CEO, Lohia Auto Industries If you can control supply chain well, you can reduce material holding time and the turnaround time for both inbound and outbound value chain. When we talk about global deliveries, then the supply chain holds all the more importance. The industry is already getting matured and going ahead, it will bring in world-class supply chain best practices to garner better results. Electric vehicle has huge growth potential and the government is also supporting the industry in a big way.

these SKUs are only multiplying since companies have to stock parts of even those vehicles which have been out of production; so, multiplicity of SKUs makes the situation that much more complex. All the large players have used ASRS, mini-load systems, VLMs, carousels, put-to-light technology etc. but none of it is being used in aftermarket spare parts space and there is no reason why it can’t be used. It’s all about getting the focus right, says Parvataneni.

PLAGUING CONCERNS Though things look positive at this juncture, the supply chain players and the OEMs fight the inadequacies in infrastructure. While on one hand, the policymakers speak about the multimodal-logistics park, the stakeholders raise their concern about the existing infrastructure. Be it road, rail, sea or air, congestion around these points are a nightmare. India is much away from seeing the multi-modal infrastructure a reality. Venkat informs, “The challenge lies in forecasting in terms of freight cost, GST scenarios as we are not able to really budget our cost of supply chain into the business.

We, being in the battery industry, with lead being the most critical material, suddenly the dynamics have changed because of the environmental issues of China. The country has stopped lead production and as a result, a huge supply is being exported to China with inflated rates for domestic consumption.

Additionally, in case of sea logistics, four liners have formed a consortium to control the entire freight movement.

Owing to which, for every supply, freight has shot up by almost 40%.

Consecutively, budgets have shot up by 20-25%. Port congestion is also a worrisome factor for us and lot of cost gets eaten up by not being able to load & unload products at the docks on time.”

The foremost pain areas of the logistics industry in India, according to Shankar, are infrastructure challenges, unavailability of skilled talent pool; disparate processes /practices; and impact on environment. These are concerns that we should be collectively discussing as an industry and finding solutions for. The government and industry are partnering at various levels to ensure better multi-modal, road, rail corridors, and warehousing infrastructure. Lack of industry standards and vast differences in even basics like size of pallets; and the size of trucks, the industry uses – has a large impact on supply chain efficiency and cost. In comparison, the US has probably 1 long haul truck size and 2-3 short haul truck sizes, which then make it easier to design infrastructure around these standards and measure performance. This apart, Indian Logistics ails from lack of IT standards and poor systems integration.

Aptly defining supply chain as the mover & shaker of any industry, Venkat says that supply chain takes care of 6570% of revenues. There are only two verticals that can make an organisation shake: supply chain & finance. Having said that, there is no industry wide forum to understand our concerns and make it heard to the government.

Big players are the only ones who rule the market and major challenges have to be faced by MSMEs and SMEs.

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Responsiveness is also another concern that needs urgent attention from the industry. The government and the industry on their part should stringently make it mandatory for every vehicle to be GPS enabled. Implementation of any new system should be uniform but that’s not happening currently.

Consolidation is a miss big time. While we are ensuring the newer systems are updated with the new mandate, we aren’t really talking about the existing and old systems, which is also the need of the hour, otherwise you aren’t completing the loop.

Highlighting challenging scenarios, Sougato Shome indicates that the auto supply chain in general has been hampered by visibility issues across the chain and variability in demand vis-à-vis the plans. Vehicles are staying out longer on the roads now and that leads to a higher demand for spares and focus on faster replenishments. Another challenge facing the auto industry is the omni present grey market. “As far as we are concerned, the demand for visibility from the clients is more on the stocks inside the DC and in transit. This helps them to plan their inventories better and improve service levels. This was always our strong point as our systems are integrated and we provide web based visibility at all points to our clients,” The other need gap is in terms of the required skill sets on the floor and on the data analytics part, which more and more, clients are looking at us to do,” adds Shome.

AFTER-SALES SERVICE CONCERNS As far as aftersales network is concerned, the spare parts business is considered the main driver to enhance customer satisfaction and generate

repurchase opportunities. Now, customers have begun asking more to the quality of after-sales services, which directly affect their purchase decisions.

The importance of after-sales service and spare parts operations to overall automotive sales is becoming extremely important.

Spare parts supply chain management is more complicated than that of finished products. The life cycle of spare parts is longer than that of vehicles and the total number of SKUs is very huge. Additionally, the demand for parts is relatively unstable and difficult to forecast. All of the above pose enormous challenges to parts’ planning, purchasing, ordering, and logistics, among other operations.

The complexities also lie in planning capabilities, stability of parts supply, supplier collaboration, information systems, data management, and supply chain visibility.

For Parvataneni, another challenge is pre-packing / unit packaging activity.

Typically, the parts come bare from the vendor and the unit packaging activity is done inside the DC. Apart from the problem of ‘multi-touch’, there is a lot of wastage of master cartons also since they cannot be re-used for packaged parts. “I feel there is a huge waste of time and effort going in this activity.

While the requirement from the OEMs to production line is to come bare, but the requirement for aftermarket spares is to go packed. The overall supply chain cost and time may improve if vendors are educated to package spare parts at

their end for aftermarket requirements.

I have also heard about MRP labelling being a challenge.”

MANAGING TURNAROUND TIME Various companies have been taking initiatives to reduce turnaround time.

Amara Raja, for instance, has adopted reverse logistics. “We have deployed GPS-enabled vehicles. We have rationalized our warehouses and are trying to bring in hub & spoke model to control overall freight cost and also minimizing efficiencies of having so many warehouses in order to distribute materials. We have come up with SCOR product planning. We are also coming up with high tonnage vehicles that can handle more materials safely.

Additionally, we are attempting to completely abolish the intermediaries from the system in order to save on time & cost and are planning to work with the transporters or fleet owners directly. We are also training the drivers and are working towards making them as our partners and making them accountable in terms of the lead time on the basis of monthly review mechanism. It’s really bringing down our logistics cost. It’s all about strategic alliance to attain win-win proposition.

They have to get me better TAT and I will make sure that they are my longterm partners. Sense of ownership needs to be instilled among stakeholders.”

According to Barathi, forecasting accuracy is extremely important because we are all driving towards keeping less

inventory. It’s eating on margins. If the forecast is accurate, it helps the entire value chain. Today the consumer is highly discerning consumer. Unless and until he finds value in the new product, he wouldn’t buy. Time to market has to be reciprocative to higher value. “We have started deploying trackers. All our warehouses are connected online, real time information is available for us. We are also attempting to use multimodal transportation as well. Now it’s not just road but also rails that can help us track our products,” says Barathi.

Parvataneni crisply reflects the core of enhancing TATs… The key is to get the supply chain network design right. What parts need to be at which locations. “Mostly I have seen auto companies largely using one of the two models – a centralized location from where parts get shipped all across the world or its regional. The answer could be to look at a hybrid model. Low value parts and/ bulky parts where cost of transporting single part is prohibitively high, can be kept close to customer locations; parts which are very high on variability or high value could be at centralized location. Here, the demand variability as compared to an FMCG, etc., is very high. A lot of analytics is happening to predict part’s failure with respect to time and based on that demand can be predicted. With GST, there is even more reason to do a network analysis and get the network right. In any scenario, any industry, 70% of cost and 90% of lead time is fixed with network,” he elaborates.

Yevgen Sokolnikov, CEO & Co-founder, Boodmo Business-to-business marketplace is gradually maturing across the world, whereas in India it is still at a nascent stage. According to SME finance companies, this online industry is six times bigger than business-to-consumer (B2C) in India. Auto component marketplace has made the job of procuring genuine spare parts easier for sellers and making them available to customers at competitive prices. India’s yet-to-mature B2B e-commerce industry with untapped potential of growth, presents a great opportunity to companies who want to enter this market.

Any marketplace aims to shrink the supply chain as much as possible, to decrease the time and efforts required to find and sale/purchase the product.

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R Shankar, CEO, TVS Logistics Services Limited (India) Advanced supply chain models based on multi-tier, multisupplier collaboration can lead the way where visibility and analytics are the key decision making tools; and offer collective benefits. Agile and scalable solutions, which are co-created by relevant stakeholders can help manage volatility and mitigate risks both upstream and downstream in the value chain.

EXPECTATIONS VS REALITY Often considered as one of the most crucial link of the entire value chain, 3PL companies haven’t been able to win over the trust of the industry.

Organizations in unison are of the view that 3PLs aren’t ready to take up ownership and that’s where the gap lies. As Barathi informs, “3PLs aren’t playing the part that they should. They aren’t having the sense of ownership. If I have an excellent 3PL partner, I don’t need the service or marketing people in my team because they could very well manage this task. But sadly, that’s not the case. 3PLs are just the aggregators and on the other hand, the transporter owns the vehicle and understands his responsibility well. 3PL today has got multiple choices. The avenues are big for them. To integrate them into the organisation saves network.”

Highlighting similar views, Venkat says, “3PL doesn’t work in this country. 4PL is what will work. They need to have a sense of ownership than just managing the deliveries. They need to be responsive throughout the value chain.

Accountability is lacking big time in this industry.” Similar is the case with Lohia too… 3PL providers need to work on shared platforms or infrastructure rather than working in silos. This way cost can be reduced drastically.

Shome differs, “Worldwide trend is to use bigger 3 PLs to handle transportation and warehousing across auto companies in the same geography.

Once the industry is able to collaborate on this front, we will see the costs of supply chain getting optimized. We believe this is the way ahead and are working with our clients to engender this change.”

UNORGANIZED TO ORGANIZED MARKET WITH DIGITIZATION Automotive spare parts market in India is largely unorganized. The unavailability of spare parts with original cost and getting the genuine products are

Ravikant Parvataneni, CEO, Crimson & Co India The key is to get the supply chain network design right.

Mostly I have seen auto companies largely using one of the two models – a centralized location from where parts get shipped all across the world or its regional. The answer could be to look at a hybrid model. A lot of analytics is happening to predict part’s failure with respect to time and based on that demand can be predicted. With GST, there is even more reason to do a network analysis and get the network right. In any scenario, any industry, 70% of cost and 90% of lead time is fixed with network.

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two basic problems being faced by customers, currently. As there are not much alternatives available in an offline market, digitally enabled automotive spare part sector could successfully resolve these problems, while offering a plethora of choices. Digitization will lead to transition of this large unorganized sector into an organized one, creating a win-win situation for both auto players as well end customers.

In India, online sales, executed directly by original manufacturers of auto spare parts and a few online marketplaces, is still a niche area.

However, to expand business and cater to the increasing demand of customers, the industry players need to embark on this journey. Shifting the market online will not just lead to increased margins from disintermediation, but also help build a closer relationship with customers, leading to better profitability and retention.

For Barathi, technology in supply chain is truly revolutionizing. The changes are faster and versatile. It has greatly eased the movement of goods in terms of tracking, monitoring, reverse logistics. “It gives us leverage

The auto component industry is looking at more than doubling its investments in the next 9 years to clock a targeted turnover of $200 billion by 2026. Exports are expected to grow from $11 billion now to $70-80 billion while aftermarket will grow from $8.5 billion to $32 billion. to redesign product, redesign packages as well as logistical requirements.

Internet of Things has helped us in a much bigger way. Earlier we couldn’t track the exact date of delivery, so dealers or suppliers used to take the advantages of the situations to increase their credit availability, but due to technology intervention, it’s completely visible,” he highlights. Similarly, for Lohia, technology has greatly evolved in the auto industry. Automation has made loading-unloading possible in the shortest and safest means possible.

We can ensure real time tracking of goods from one place to another.

Barcoding and scanning systems have revolutionized the inventory management. Smartphones have also augmented this growth bandwagon with data available at your fingertips.

While Venkat is of the view that supply chain executives need to ensure the accuracy of data so that there is lesser dependency on manpower. One needs to think of long-term perspective than the present scenario. Lot of digitalization is happening in terms of

GPS, barcoding, but all these initiatives are still at nascent stages.

Offering insights into futuristic landscape, Sokolnikov remarks that today’s automotive spare parts supply chain is driven by technology and the ways in which companies deploy software solutions. Companies must leverage multiple solutions at any given time for a variety of tasks and then, integrating these solutions into one unified platform, could help enterprises to streamline business operations. This is an important step in reducing technology costs also it helps in bringing greater visibility to the viability and efficiency of a company’s technology solutions. Integrating various supply chain technology platforms helps automotive companies immensely, to view their supply stream in a more holistic way than several disparate parts.

RSM US LLP shares its understanding that the changes in automotive technology will affect the component FIT (failure in time) rates and service requirements in the auto aftermarket in the years ahead. All of this activity challenges both OEM suppliers and auto aftermarket service providers to prepare now for the new service requirements to come. On the operational side, auto

suppliers have implemented or plan to implement a range of technologies, including supply chain tracking and monitoring, enterprise resource planning and the internet of things technologies.

Social and economic shifts are also set to reshape many aspects of the sales and distribution market, including an increase in shared mobility and mobility services and shopping offered through connected cars. Sensor-based parts and equipment will increase visibility and data; more advanced robotics, autonomous driving and machine learning will support new levels of automation and flexibility; predictive analytics could increase the accuracy of supply chain forecasting and planning.

ENHANCING PERFORMANCE While a lot has been done and lot remains to be done, the key lies in getting together to garner benefits.

According to Venkat, there is no forum that can bring challenges at the forefront. There is a need for category specific consortium to reach to the bigger audience. Even the government isn’t meeting us regularly to review industry performance. The government should have a grievance cell or a platform to understand the pain points of industry and come out with solutions because today lot many MNCs are finding India as their preferred ancillary hub but for that to happen, we as an industry really need to take concrete steps.

Shankar asserts that visibility, trust and collaboration in the entire ecosystem will be game changers and enablers of an efficiently streamlined and adaptive value chain. Advanced

TA Barathi, VP – SCM, Wheels India Ltd People is the key to drive change. Automation is there at our disposal but it’s the people who can harness the true potential of such tools. At the same time, they need to be passionate towards their job. Supply chain person is a jack of all traits and master of all. Unfortunately, not sufficient training is taking place in the industry. We are doing lot of work in this field. We are working closely with Automotive Skill Development Council (ASDC). MSMEs are our major targets because they are the ones who will bring in benefits. supplychain.celerityin.com

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Sougato Shome, Sr VP, Future Supply Chain The industry needs to look at a higher degree of collaboration at the back end. The whole concept of individual supply chains needs to merge at some point to pave the way for an integrated supply chain that leads to cost optimization by unlocking the synergies of capacity utilization. Worldwide the trend is to use bigger 3PLs to handle transportation and warehousing across auto companies in the same geography. Once the industry is able to collaborate on this front, we will see the costs of supply chain getting optimized.

supply chain models based on multitier, multi-supplier collaboration can lead the way where visibility and analytics are the key decision making tools; and offer collective benefits.

Agile and scalable solutions, which are co-created by relevant stakeholders can help manage volatility and mitigate risks both upstream and downstream in the value chain.

SHIFTING GEARS Technavio’s market research analysts have predicted that the auto component market in India will grow steadily at a moderate CAGR of around 19% by 2020. Production capacity expansion outpacing domestic consumption will drive export-oriented growth in the coming years and will be one of the major factors that will have a positive impact on the growth of the automobile component market in the coming years. Cost-efficient operations and acceptable quality have increased export volumes for the auto components to global OEMs (original equipment manufacturer). Moreover, recent regulations that facilitate 100% FDI in the automobile industry will attract more joint ventures and wholly owned subsidiaries. This will augment export growth to OEMs in global markets.

Factors such as the rising vendor consolidation, faster replacement market growth, increasing localization, export-oriented growth, and growing electronic content per vehicle have induced the Indian auto component segment to continue to grow much faster than the OEM segment. This, in turn, will invite more exports to OEMs from auto component manufacturers.

The OEM segment will dominate the

auto component market in India and account for about 89% of the total market share by 2020. As a result of improvements in the perceived quality of Indian products, the industry has transitioned from supplying primarily to the aftermarkets to catering to OEMs across the globe. This shift toward OEMs will continue to fuel the growth of the automobile component market in the coming years as well.

Staying optimistic about the potential, Shome asserts that the industry is looking towards more collaboration surely both upstream and downstream. The ideal state of seamless information systems and hence real-time visibility is what all industry players are working towards.

This leads to exciting opportunities of developing integrated and collaborative supply chains. This means looking at common information platforms with high capabilities of real time data capture and data processing to give a new meaning to ‘agile supply chains’.

A ‘SMART’er supply chain is taking shape in the backdrop of connected data where all data streams are being captured and channelized into centralized systems, leading to smarter responses to and from customers, vendors, manufacturing points and sales networks. “We see this development

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accelerating now and this opens up huge opportunities for technology based supply chain players like us,” believes Shome.

The key opportunity that exists and the direction in which the industry is headed is the use of cloud data to link the supply chain, so the entire supply chain becomes a single, integrated global manufacturing operation, rather than discrete operations joined by logistics, enabling a lot more to happen in real-time. The emergence of ‘Smart Factories’ is dependent on the implementation of ‘Smart Logistics’, which provides real-time analysis of supply routes such as potential bottlenecks and the ability to react immediately to changes in demand, inventories and manufacturing and logistics capacity. Such trends point to the need for more premium freight, more expertise, more flexibility, more responsiveness, more contingency planning and more strategic use of built-in emergency logistics as a proactive safeguard of highly responsive, high-risk supply-chain operations.

Fundamentally, the supply chain always will rely on components leaving one location and arriving at another, we just have to ensure this process is as swift and foolproof as possible.

KEY LEVERS  Data integration will make logistics a cohesive element of the manufacturing process, allowing more customization with no impact on lead times.  The need to accommodate more bespoke orders will intensify the need for responsiveness, which means logistics providers and suppliers must be able to accommodate very late changes.  A greater level of visibility will be required to enable customization without jeopardizing robustness of supply.

INTERVIEW

MILLING A FINE SUPPLY CHAIN “Our supreme goal is to remain highly cost efficient and asset-light, through network optimization & striking partnerships for technology-driven efficiency.

With the kind of technology buzz in the market at present, this is the golden era to be a part of a challenging supply chain journey,” asserts Vivek Gaurav, Head – Planning, Customer Service & Logistics, General Mills India Business, during an exclusive interview. Excerpts…

What have been the focus areas for General Mills to make their products most preferred by the consumers?

For the past 150 years, General Mills, as a global organization, has been living its purpose of serving the world by making food people love. India is no different where, in order to drive growth, we are focused on our consumer first strategy where we work to gain a deep understanding of customer needs and respond quickly to offer what they want, whether it’s our retail FMCG portfolio or our Bakeries and Food Service business.

With food preferences changing faster than ever, we remain focused on understanding and responding in ways that will grow our business. We are focusing on newer & bigger categories across business verticals and the biggest challenge would be to synergize our growth with the right channel strategy, while ensuring rapid distribution expansion.

You have been a part of the growing FMCG businesses. What essential transformations have you witnessed in these years?

I got an opportunity to work with some of the most reputed companies viz., Asian Paints, Colgate Palmolive, Marico Kaya & now General Mills.

And when you are a part of such great organizations, you become an integral part of the paradigm shifts which the organizations bring. All of them being consumer-driven growth-

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oriented companies, have always kept challenging their boundaries of existing product segments and opened newer yet logical avenues. e.g., Asian Paints transformed itself into a complete home solutions company by venturing into modular kitchens, bath fittings, wall coverings, etc.

Similarly, I was a part of the core team when Kaya stepped on the gas to go closer to its customer through new channels like Kaya Skin Bar (the retail format) and e-commerce (both by building our own website & by partnering with key e-commerce players).

Indian-grown FMCG companies have shown immense appetite to grow globally through strategic acquisitions as well as through organic growth. Last few years also saw the world moving from generic to specialized as well as customized offerings. We witnessed Asian Paints moving deep into Kids paint segment and Kaya lining up formulations specifically focused on men’s grooming. These are just some of the instances of revolution that actually set the growth of FMCG sector on a truly impressive landscape.

How complex is the supply chain at General Mills and how do you plan to take it forward towards excellence?

Complexity of supply chain is a direct function of how diverse is your product portfolio, how diverse are your business channels, depth & width of

your logistics operations, and finally it boils down to the ultimate goals that a supply chain organization sets for itself.

Diverse product portfolio: Talking specifically about India, General Mills has an extremely varied product portfolio. This includes ready-to-eat range, cake mixes, wheat flour & top channel brands such as HäagenDazs and Nature Valley. To give you a sneak peek: Atta is a branded commodity. While brand equity always is a key driver, the topline & bottom line are significantly influenced by competitive scenario & minute

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INTERVIEW fluctuations in wheat pricing. Hence the need for responsiveness & leanness of manufacturing & planning, and extremely tight control on logistics cost adds to the complexity.

When it comes to Nature Valley & Häagen-Dazs, which are imported from Europe, the international supply chain challenges w.r.t. high lead times along with very tight shelf lives add to the complexity and reduce flexibility. Apart from this, there is a high seasonality factor across our verticals, which forces us to stretch our transactional and infrastructural capacities.

Business channels & verticals: Apart from diverse product portfolio, we have a heady mix of channels & verticals viz. traditional trade, modern trade, e-commerce, B2B, food services, exports, imports, etc. Different streams have very different realities w.r.t. visibility of demand, seasonality, inventory planning & visibility, customer service and above all, the freshness expectations.

Goals: At a strategic level, our task is cut out to build our supply chain capability w.r.t. talent, processes, footprint & tools in line with our growth vision. In terms of supply chain excellence, we actually aim to enhance customer service by developing a very responsive, integrated and agile supply chain network, which is highly efficient and lean. Additionally, one goal we are chasing single-mindedly is that the entire supply chain should be extremely visible for all stakeholders to take timely decisions and hence drive business predictability. Among all this, our supreme goal is to remain highly cost efficient and asset-light, through network optimization & striking partnerships for technology-driven efficiency.

What are the USPs of your SCM? We believe that efforts aimed at improving technology-driven-efficiency, safety, sustainability, integration and traceability are key drivers for improving the overall effectiveness of our global supply chain. Driving progress in these areas is critical to operating excellence and ensuring the promise of our brands to our consumers. For us, highly energetic team where trust & transparency is in the DNA, has been our biggest strength. Through people power and their undeterred attention

At General Mills, we believe that efforts aimed at improving technology-drivenefficiency, safety, sustainability, integration and traceability are key drivers for improving the overall effectiveness of our global supply chain. Driving progress in these areas is critical to operating excellence and ensuring the promise of our brands to our consumers.

For us, highly energetic team where trust & transparency is in the DNA, has been our biggest strength.

towards detailing and rigor to drive home value is what is setting General Mills apart from the rest. Additionally, a sustainable and ever-improving customer service in a highly complex and growing product and channel portfolio is what is driving our growth in the country.

How do you think e-commerce is changing the dynamics of Food & FMCG companies in the country?

E-commerce has been opening bigger avenues of growth for each and every sector and Food & FMCG is no different. Three key success factors in e-commerce are price competitiveness, reach & speed. This is where supply chain and distribution become the USP of your business. Lean, flexible and responsive logistics along with the distribution strategy, like direct from warehouse or through distributor model, are very crucial factors.

When it comes to food, complexities further aggravate due to freshness expectations and perishability. In that sense, we have to be highly flexible as well as responsive to customers’ requirements. This also boils down to reducing lead times because the one who can deliver goods to customers in the shortest time will win the ultimate race. This is one part of the e-commerce business. Reverse logistics poses a big challenge. Moreover, when it comes to e-commerce, your supply chain gets directly exposed to the end consumer because there’s no intermediary in between and

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that’s when responsiveness comes into play. No company would like to get trapped under the inefficiencies of logistical glitches and lose brand image. If you factor in all these, no doubt, e-commerce offers lot many opportunities, but it also has its share of challenges, which first need to be addressed before taking the big leap.

How do you see placing an important thrust on technology to enhance supply chain efficiency in entirety? Kindly elaborate.

Today the biggest dilemma for an organization is whether to invest in its own technology infrastructure or to partner with relevant service providers because both have merits and demerits.

Scale and Investment are the two key deciding factors. If you do not have scale, you thrive on partnerships and collaborations for building technology muscle. We are currently exploring partnerships with tech service providers to test the wicket and find synergies between our vision and their core strengths. Big data and Internet of Things (IoT) for last mile tracking, supply chain integration & omnichannel philosophy is in my radar. This paradigm shift also calls for educating and partnering with our logistics partners to improve their capability for real-time last mile tracking because going solo wouldn’t do any good. We are also planning initiatives around secondary freight optimization to further enhance network optimization.

INTERVIEW

Globally, leading companies are also offering Freight Rate Benchmarking services to help customers in optimizing supply chain costs and we are seeing signs of such offerings in India too, though at a very nascent stage.

Besides this, we are planning to exploit technology towards seamless integration of demand planning, production planning & dispatch requirement planning, etc. In essence, with the kind of technology buzz in the market at present, this is the golden era to be a part of a challenging supply chain journey.

As General Mills is a global brand, how different and complex is the supply chain in India and overseas?

Being the 6th largest food company in the world, GM is a highly respected company globally and our product portfolio globally is very wide and deep as compared to India. Local Demographics, growth trajectory and brand awareness vary among geographies in each product category.

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Hence, the supply chain complexities are bound to be very different in every region. Each geography is at a different stage of supply chain maturity and systems. But at the same time, there is a consistent effort to drive standardization and synergies among various geographies through various global initiatives.

How essential is it to strike a healthy relation with your vendors & 3PL partners and how do you manage the same?

I have a firm belief that if you want your supply chain to keep winning, you can’t afford to leave your partners whining. If supply chain organization is the mind, the Vendors and 3PL partners are your limbs. So they need to be very healthy, seamlessly connected & trustworthy in order to effectively respond & go all out to drive your business goals. You are just as strong or weak as your partners which means you need to step out to strengthen them.

I am currently aiming to partner with key vendors to help them stay abreast

with paradigm shifts in technology and business models so that they can help us transform our responsiveness and customer service. We are also in the process of putting into place a vendor performance framework, which will help us provide constructive critique to our partners on their performance. It adds immensely to the mutual trust if you help your partners increase their business. Hence, I am trying to go out of the way to connect our partners with my peer industry leaders for business opportunities. This is how leaders can drive the change in the entire industry.

The more collaborated we are, the better are the results.

Sustainable sourcing is at the top of agenda for corporates.

Your inputs on the same‌ There are various stages of driving sustainability. Companies are giving back to society by partnering with community. e.g., community sourcing.

Another view is that if you are not able to give back to society, at least do not take away from society. Rising activism

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INTERVIEW

E-commerce has been opening bigger avenues of growth for each and every sector and food & FMCG is no different.

Three key success factors in e-commerce are price competitiveness, reach & speed.

This is where supply chain and distribution become the USP of your business. Lean, flexible and responsive logistics along with the distribution strategy, like direct from warehouse or through distributor model, are very crucial factors.

is giving rise to regulatory tightening, hence it’s always better to be proactive & stay ahead of the peers in sustainability initiatives. In the process, it becomes a big competitive advantage for the organizations.

Kindly share with us some of the most critical initiative beings managed by you currently.

Looking at our ambitious growth plans, the entire organization is looking at new ways of working. Hence my top priority has been to coach my team to consistently align them with the strategic intent and the new ways of working. I have been leading the initiative on carving out Demand Planning as a separate function, driving immense focus on cross-functional processes, reviews & reliability. We are grooming a high-energy team to take the planning & logistics to its next level.

Having various businesses like retail, bakeries & food services, we are working tirelessly to integrate the customer service for all these businesses under one core team in order to enhance synergies, stock availability, operational reliability, visibility and effective capacity utilization. As mentioned earlier, technology will be the greatest driver for us to achieve most of this.

What are the three main attributes that a 3PL should have for efficient logistics & supply chain management?

First and foremost, a 3PL must know its strong and weak areas and be candid

about it to its customers. Secondly, a successful 3PL will always be open to change and transformation with respect to the shifting business dynamics.

Third and probably the most important aspect is that a 3PL should have infinite proactiveness to bring new ideas to table for their customers’ growth.

What’s your perspective on GST and how is it slated to impact trade dynamics?

In simplified terms, it is one market one tax. I believe that going ahead, customer service & total delivered cost would be only key driving factors because taxation factor is out of the window now. In near future, we would see optimization & consolidation of warehousing space. One interesting fact which I have studied is that the consolidation will make sense only if your warehousing cost is at least 25% to 30% of your overall logistics cost.

Logistics efficiency would be enhanced in most of the key routes due to improved mobility and reduced waiting times. There would be positive impact on margins. The commercial viability of a route depends a lot on transporter’s capability to ensure maximum truck utilization in both onward and return transportation. With certain routes experiencing disruption due to reduction in unorganized or kuccha trade post GST, transporters are feeling the heat and hence trying to pass this to their clients. However, this phenomenon seems to be temporary till they find alternate options. In the

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long run, GST will give a big boost to government’s vision of creating multimodal logistics hubs across the country.

What are the qualities that impress you the most in new age supply chain professionals and what are the areas they need to work upon?

Today’s supply chain professionals are quite open to change and are quick learners. This is one of the biggest pluses that I have been observing. They are always passionate about doing something new and bring value to the table in their individual capacities and as teams. For them to enter into supply chain as a profession, this is one of the best times as the domain is set to witness a paradigm shift with the government’s continued thrust on holistic infrastructure development, the accelerated pace of development as far as dedicated freight corridors are concerned, the emergence of B2B supply chain marketplaces, global bestpractices and above all, mushrooming of well-funded technology startups. Having said that, they need to understand the finer nuances of the entire value chain to deliver actionoriented results and not just focus on their core competencies because supply chain is that crucial link, which binds the entire value chain together. Finally, it’s all about holding your head high while keeping your feet firm to the ground. If you know the operational processes well, you can make better business decisions.

Vivek Gaurav has 12 years of rich experience in companies like Asian Paints, Colgate Palmolive, Kaya Skin Clinic & General Mills across areas like S&OP, demand & supply planning, customer service, logistics, warehousing & manufacturing. His expertise lies in setting up, integrating and operating multi-channel supply chains viz., retail, modern trade, clinics, e-commerce, exports & imports. He has done B.Tech in Industrial Engineering and MBA in Supply Chain from NITIE.

OPINION

The ART of Being

EFFECTIVE FOLLOWER Bad leaders could have good followers and good leaders could have bad followers but the success in both cases is dependent on follower and they become the deciding factor of team performance. If one chooses the right team, one could be successful even if one is not a great leader and vice versa is true as well. One never becomes a leader without being a follower and to be a great leader, one needs to be an effective follower, shares Karuna Shankar Pande, Director Supply and Logistics, AB Inbev India, in his recently released book ‘Effective Follower Today, Great Leader Tomorrow’.

‘Followership’ when practiced ‘Effectively’ helps in taking organizations to greater heights and this becomes a stepping stone for a follower to become a greater leader himself or herself. The clearer we become about our end of the relationship with a leader, the more effectively we can approach ‘the other’ end.

There are two distinct roles that executives and managers are called upon to play. One is the role of a leader and the other is the role of a follower.

Endless attention is paid to leadership qualities of individuals in evaluation during selection process and as gaps for training & development later on.

However, in reality, no leader can be successful without having effective followers.

Bosses are not necessarily good leaders and subordinates are not necessarily effective followers.

Sometimes individuals take the roles given to them but do not own it fully and perform badly and that is when the chain of performance gets broken more often by poor followers rather than poor leaders. But leadership has

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the attraction and charm whereas, on other side, followership is seen as subordination and something inferior.

The fact of the matter is that we are (at least majority of us) more often followers than leaders and therefore the relevance of effective followership is much more and should ideally have more airtime in organizations and a respected virtue. Remember even if we have large team of subordinates, we still have bosses. So whilst followership

dominates our lives but not our thinking, as we are always pre-occupied with aiming higher leadership roles in life rather than doing an effective followership, which will always make us a better leader tomorrow. If the central idea of getting a higher leadership role is not about getting it but succeeding in that role, being an effective follower becomes a ‘practice period’ with lesser pressure of performance.

The link between leadership, management and enterprise performance is widely understood and accepted. The other side of leadership is followership. But curiously, followership gets only a small fraction of attention that leadership does. If one aspires to be at senior leadership positions, one needs to learn to take risks and as follower, one gets that opportunity of practicing it.

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OPINION

Followership is not about passive plodders, dragging along but it is an intensely active state, where followers drive towards mission success, supporting their leader and team.

It is about mindful, constructive behaviours that immerse, engage and fully own and resolve problems that arise along the way.

Followership means taking an active pride in the success of your team.

Learning the art Followership and leadership is a role being played by same individual at different points in their careers, in different settings and many times playing both the roles at different hours of the day though seldom equally well.

Most organizations think that leadership has to be taught but that everyone knows how to follow, an erroneous assumption that following is simply doing what one is being told to do.

The link between leadership, management and enterprise performance is widely understood and accepted. The other side of leadership is followership. But curiously, followership gets only a small fraction of attention that leadership does.

If one aspires to be at senior leadership positions, one needs to learn to take risks and as follower, one gets that opportunity of practicing it.

Be a self-starter Effective followers may derive their motivation from either seeing this as their main role at work or seeing it as a road to leadership and fueling their ambition. Some people see followership as unattractive and therefore just perform the task assigned to them and wait for next task to be given.

Whilst there are some who think for themselves and carry out their duties with enthusiasm and energy always striving for more – they are selfstarters and problem solvers rather than problem escalators. Effective followers are clear about the goals

and opportunities and they do things when no one is noticing them and they work without any close supervision.

Ineffective followers give into the hierarchy, escalate every problem and do just enough to survive in organizations and they expect training and development to come to them, always complaining and moaning.

Effective followers always gladly accept tasks/goals outside their comfort zone and scale up to the challenge. They are credible, honest, courageous, diligent, motivated, committed, insightful, pay attention to detail and make the extra effort.

Achieve desired goals Followership is not about passive plodders, dragging along but it is an intensely active state, where followers drive towards mission success, supporting their leader and team. It is about mindful, constructive behaviours that immerse, engage and fully own and resolve problems that arise along the way. Followership means taking an active pride in the success of your team. It is also a humble form of self-leadership for followers — your teammates. When teams have right combination of leadership and followership, greater achievement is accomplished. Similarly, when an individual achieves right amalgamation of followership and leadership, unparalleled personal success is achieved.

An ineffective follower when in leadership role talks ill about

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their leaders and their direction in inappropriate ways, this breaks the chain of organizational progress.

An effective follower courageously dissents when necessary, shares credit, admits mistakes, and habitually exercises superior judgment. They coach, lead, mentor, and collaborate to accomplish the mission. They are committed to constant improvement and are change agents. They know what is expected, strive to be the best, and derive satisfaction from applying the highest personal standards. To them, work is integral to life. They work hard, long and smart to accomplish the task on hand. They move fluidly between leading and following. Followership means pointing out things your leader cannot see, at appropriate times, in appropriate ways having courage to give feedback to your leader, even to challenge him if required.

‘Followers are more important to leaders than leaders are to followers.’ — Barbara Kellerman Karuna Pande has more than 25 years of rich experience with Blue chip MNCs and Indian giants like ITC Ltd, PepsiCo India Holdings, JK Tyres and SABMiller India. He strives for excellence through continuous improvement and inspirational leadership.

He believes in the philosophy – ‘Change’ is the order of the business & innovation is what drives him. He is a Mechanical Engineer from NIT, Warangal and has done MBA in operations from ICFAI University.

RECAP

Trending @ CELERITY The year 2017 was unique in more ways than one. The country witnessed major economic shuffle be it demonetisation or GST, but the companies remained undeterred and devised their business strategies according to the changing times. This was also the time to test their supply chain capabilities and reflect its true importance when it came to growth. Certain companies shared with us the robustness they had in their supply chains which helped them not just be resilient to such economic shocks but actually pushed them to be the frontrunners. As we step into another year of promising opportunities, we stop and look back at some insightful remarks which we believe are universal to all of us.

Nadia Chauhan, Joint Managing Director & Chief Marketing Officer, Parle Agro Pvt Ltd A leader must give vision and courage to the team, and empower the members to bring the vision to life. I believe everyone should have a voice and everyone definitely has a point of view and I feel as a leader, it is important to ensure that everyone’s point of view is addressed and heard. It doesn’t matter if you agree with it but it’s important that the point of view is out there because that leads to healthier decision making and team building. Empowering people and respecting them is very important because everyone has ambitions & passion and it is important to nurture that.

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Rakesh Biyani, Joint Managing Director, Future Retail Ltd As ‘thought leaders’ in the retail business, we haven’t shied away from pushing the envelope further or redefining the conventional ways of working, in order to pave newer paths that spell efficiency and excellence. At times, these decisions have not worked out the way we hoped they would, while at other times, they have made history; but that’s a part of the game.

In the end, we have always learnt something valuable that has empowered us to create the next game-changing idea. With the fast-evolving consumer mindset in today’s global world, it’s imperative that we know our customers and their needs, sometimes even well in advance.

Pankaj Munjal, Chairman & MD, Hero Cycles It is always difficult to create a niche for yourself in a highly competitive market, and it requires a high degree of passion and commitment to your business. It requires constant thinking and re-thinking of ideas and objectives, constant innovation, a far-reaching vision that takes several horizons into account and a regular tab on the pulse of the global market. You can never be complacent and rest on your laurels. If you have a strong lineage, expectations are even higher.

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RECAP

Krish Iyer, President & CEO, Walmart India This is truly India’s time. India is the sole bright spot on the global economic landscape. There is a lot of focus in India today on the fast-growing retail/ wholesale sector. Experts see it as India’s next big opportunity in terms of investment, employment, supply chain growth and lifestyle changes.

Through the last two decades, economic liberalization in India has opened up new avenues for every economic class, albeit in varying degrees. India is an extremely attractive market for organized retail industry to service the traditional retail and also the endconsumers. As per the report titled, ‘Retail 2020: Retrospect, Reinvent, Rewrite’ by Retailer Association of India, the overall retail market is slated to grow at 12% per annum, modern trade will grow twice as fast at 20% per annum, and traditional trade at 10%. e-Retail is undeniably a very big change and is here to stay. Understandably, that is where the consumer is going. We believe the next five years will belong to those who commit to provide the omnichannel experience to customers.

Manan Bansal, Director, Liberty Shoes Till the time, you have that confidence in the product you are offering in the market, it is not difficult for entrepreneurs to start a new venture.

Yes, challenges are there in terms of price points and competition, but I believe if there are no hurdles then there is no gain and change. One has to be honest and hard working on what we are trying to achieve. We have to set our goals clearly and not compromise on the quality, value and comfort, which our product should offer to our customers.

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Kunwer Sachdev, Founder & MD, Su-Kam Company performance is effective only if suppliers’ operations are running smooth. No matter how advanced your own production capabilities are, if a supplier misses a delivery or produces sub-standard goods, one will feel the cost. If a supplier is failing to meet his standards, you need to have a process to quickly remedy the issue. The better and faster this can be communicated, the quicker the problem can be solved.

Any company supplier relationship management program must include tools to improve misfiring suppliers.

RS Sachdeva, Chief Operating Officer, VE Commercial Vehicles Ltd (VECV) GST has been one area, which initially was a hitch, but the long-term impact would be extremely favorable for our industry and we have already seen the results of the past two months, which also point towards good times ahead.

We have passed on the cost reduction to our customers. Our trucks have become cheaper post GST. To top it all, the rollout of GST has resulted in 30% faster logistics. We are also eagerly waiting for the scrappage policy. This policy can enhance the volume by 20%.

Going ahead, electromobility will be the gamechanger. This initiative can take the industry to ensure zero emission levels.

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Jatinder Panjwani, AVP - Logistics & Warehouse, Micromax informatics Ltd Today’s day & age demands a highly responsive 3PL service provider who could devise strategies based on any situation and can adapt to any unknown or uncalled-for complexities arising out of turbulent economic scenarios.

I think, this would be one of the biggest performance enhancers for any 3PL to gain an edge over others.

This aspect also involves inclusion and deployment of new age technology tools to enhance the entire process and can aid in offering a transparent system. A 3PL needs to position itself in such a competitive way that no user company can think of rejecting their offer by providing a very comprehensive mix of all the aspects that hold immense importance for the success of the entire value chain.

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Alok Gautam, Country Logistics and Supply Chain Leader, Dow Chemical International Pvt Ltd (Dow India) Nowadays, the scale of operations of chemical plants is becoming bigger.

This means that globally the demand is met from fewer plants around the world. This has obviously, led to rapid increase in the amount of material flow worldwide and therefore, the volume of traffic as well. However, to ensure that the growth is sustainable, we need to concentrate on increasing the efficiency of the industry. The first step in this would be to reduce noise from the system. Reducing the vestigial elements from the value chain would lead to a significant reduction of costs. The reduced cost benefit can be transferred to the end consumer. Lean and smart organizations will become the foundation of a better performing industry, in my opinion.

Anshu Budhraja, GM, Amway India We are aiming to engage different stakeholders on what drives entrepreneurship in India and contribute to the on-going discussions on the role of skill development and selfemployment in improving employability of the youth. Entrepreneurship is a way for people to realize a better life for themselves and their families.

Entrepreneurs also create jobs and encourage competition. They spur economic growth and bring opportunities to communities. So, it’s important that businesses like Amway know how entrepreneurs think and act in order to better support and encourage them.

Raviraj Rodrigues, SCM Head and part of Leadership Team, Wildcraft India The traditional belief that supply chain is a cost centre is no longer correct. We are the horse at the helm of the buggy. Our complete value chain, from start to finish, depends on our ability to move material to where it needs to be, on time, every time. wWe have certain critical seasons that wwe need to meet in market, so there is immense pressure on planning our inward inventory stocks well. We also connect the finished goods to counter shelves across our many channels – modern trade, general trade, owned retail stores and online partners. Supply chain provides the competitive advantage to the business by providing solutions that enable our channel partners and sales teams to sell better.

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RECAP

Sudip Gupta, Director – Customer Supply Chain, Carlsberg India Pvt Ltd End to end supply chain integration gives complete visibility of business to make informed decisions and help the team work better internally. It also helps in aligning cross-functional teams to achieve business goals. The integration has helped significantly in reducing waste. It further improves nimbleness and speed to market.

Ankit Gupta, Senior Director, SCM, adidas Group India We should make sure that our organizations don’t look at supply chain as a cost center rather as an enabler, spending some extra bucks here will only give you an added advantage in selling the product better but if in order to save cost, we miss connecting the product to the consumer in time, it is an opportunity loss which is extremely difficult to regain. In the retail industry, winners are going to be those that focus on controlling the inventory flow and reducing cycle times.

We need to borrow from manufacturing-centric supply chains that have historically been focused on decreasing lead times and eliminating waste (Lean thinking).

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