Celerity July - August 2020 by Celerity Supply Chain Tribe

SUPPLYCHAINTRIBE.COM July - August 2020 Volume 4 Issue 4 For private circulation only

LEADERSHIP SERIES RS Sodhi, MD, Gujarat Cooperative Milk Marketing Federation (GCMMF) on Delivering Taste Across India Dr. Varun Chaudhary, Executive Director, CG Corp Global on the Rise of Convenience Food Pawanexh Kohli on Shifting Dynamics – Vaccine Preparedness & Food Supply

THE TECH’TONIC SHIFT Post-Covid era will belong to companies which have Digitalization leading their way

CONTENTS

PUBLISHER’S NOTE July - August 2020 Volume 4 Issue 4

COVER STORY

THE TECH’TONIC SHIFT We take a deep dive into the technology adoption among supply chain fraternity and how this New Normal is going to bring a ‘Tech’tonic Shift for customers and suppliers alike. Industry leaders from all walks of profession – be it users, consultants and the solution providers have voiced their insightful opinions on the technology landscape that is slowly seeping into the supply chain domain and transforming it for the GOOD, the BETTER and the BEST…

INTERVIEW

13 Catering to the New Normal

Pankaj Bansal, Director, Supply Chain and Quality Systems, McDonald’s India (North and East), shares the new normal for its customers in the way McDonald’s delivers restaurant experience.

14 Shifting Dynamics - Vaccination Preparedness & Food Supply

Pawanexh Kohli asserts that going ahead supply chains will not merely need re-engineering but would have to be redesigned to the changed status.

46 SCM 4.0 - ADAPT or Perish

Prof. Guilherme Frederico, Associate Professor of Operations and Supply Chain Management, School of Management Federal University of Paraná – UFPR – Brazil, stresses that Supply Chain 4.0 will become a reality for companies wanting to compete effectively in the global markets.

LEADERSHIP

8 Delivering the Taste Across India

RS Sodhi, MD, Gujarat Cooperative Milk Marketing Federation (GCMMF), is of the firm belief that this is the time to build and maintain relationship with supply chain partners.

‘New Normal’ or ‘Next Normal’ Dear Readers, As I write this note, there does not seem to be any respite from Covid-19 any time soon, Therefore, companies have already started defining their ‘New Normal’ or the ‘Next Normal’.

FOCUS

4 A Generational Opportunity

Dr John Gattorna, Global Supply Chain ‘thought leader’ and Author, states that we must move back along the efficiency spectrum and accept that we may need some level of in-built redundancy, in the cause of increased resilience.

39 Pandemic proof Fulfillment Operations

Even in the current situation, there are digitalization and automation solutions that can be easily implemented in no time, shares Rupesh Narkar, Director – Sales for Logistics Automation MNC.

35 FEATURE

4-point Agenda for the Post-Covid Era The four point Action Plan by CBRE Global Research team is your quick guide to revival and survival in the Post-Covid Era.

42 PERSPECTIVE

All the attention is on Food, FMCG, Pharma and Healthcare. The rest being non-essentials have been left to struggle in the worst possible way. While Unlock 1.0 led to some revival, GST collections in June rose sharply from May and issuance of e-way bills, also rose to almost the same levels as March, indicating pace in goods movement. The rising Covid cases in states such as Maharashtra, Tamil Nadu and Jharkhand have led to extending lockdowns, delaying economic recovery in these states. Companies have re-started production and seeing an improvement in capacity utilisation. Demand needs to be revived so that the improved levels of capacity utilization can be maintained. Our issue has experts and senior supply chain practitioners showing the way forward on revival and survival in the current as well as the times to come. We are sure that this would help you create your own strategies for these ‘new normal’ times. Be Safe. Keep Distance.

Braving the Covid Odd Leading Log Tech start-ups share their strategies to prep for the post-Covid era.

30 Rise of Convenience Food

Dr. Varun Chaudhary, Executive Director, CG Corp Global, emphasizes the most important aspect that entrepreneurs are focused on is to evolve their businesses with the rapidly changing landscape, triggered by the disruptions from COVID.

Charulata Bansal Publisher Charulata.bansal@celerityin.com www.supplychaintribe.com

Editor: Prerna Lodaya DISCLAIMER: This magazine is being published on the condition and understanding that the information, comments and views it contains are merely for guidance and reference and must not be taken as having the authority of, or being binding in any way on, the author, editors, publishers who do not take any responsibility whatsoever for any loss, damage or distress to any person on account of any action taken or not taken on the basis of this publication. Despite all the care taken, errors or omissions may have crept inadvertently into this publication. The publisher shall be obliged if any such error or omission is brought to her notice for possible correction in the next edition. The views expressed here are solely those of the author in his private/professional capacity and do not in any way represent the views of the publisher. All trademarks, products, pictures, copyrights, registered marks, patents, logos, holograms and names belong to the respective owners. The publication will entertain no claims on the above. No part of this publication can be reproduced or transmitted in any form or by any means, without prior permission of the publisher. All disputes are subject to the exclusive jurisdiction of competent courts and forums in Mumbai only.

2 CELERITY July - August 2020

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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FOCUS

A Generational Opportunity

FUNDAMENTAL REDESIGN OF ENTERPRISE SUPPLY CHAINS

Undoubtably, we have gone too far in the relentless pursuit of cost efficiencies, and in the process made our supply chains overly brittle, unable to withstand sudden unexpected disruptions – or surges in demand! Now we must move back along the efficiency spectrum and accept that we may need some level of in-built redundancy, in the cause of increased resilience, states Dr John Gattorna, Global Supply Chain ‘thought leader’ and Author.

HE modern supply chain has faced several major disruptions in its short 50-year history, but nothing like the Covid-19 virus, which has brought the global economy to its knees in a few short months. The health impact has been unprecedented across the world, and so has the knockon effect on national economies as governments have struggled to arrest the spread of the virus to safeguard their people, and healthcare systems, which have been near breaking point. The immediate and only remedy has been to shut down industry and commerce, and isolate people in their homes, which in turn has put their economies into reverse gear. This is truly a ‘1 in 100’ year event that we are all involved in as active participants.

4 CELERITY July - August 2020

GOVERNMENTS CAUGHT OUT Governments around the world have been caught unprepared for the scale and speed of this latest disruption. Many governments have not had strategic stocks of personal protective equipment (PPE) available for their healthcare workers, which has led to a somewhat unseemly rush to acquire stocks, with governments bidding against each other for the available stock. Government procurement departments are not good at expediting purchases at the best of times, and the current crisis has again showed up the failings in conventional procurement processes. New protocols for emergency situations will have to be introduced in the future. In Australia we saw the

growth, propelled by globalization. Now governments and private enterprises must pull back, reset, and seek more regional and local solutions in order to dampen down the likely effects of future disruptions.

WHAT WENT WRONG?

Dr. Gattorna is Executive Chairman of Gattorna Alignment, a Sydney based specialist supply chain advisory firm. He has held a number of professorships, with the most recent being Adjunct Professor at the University of Technology, Sydney, the SP Jain School of Global Management, and Foundation Professor to CIPS Australia. Dr Gattorna has been a relentless contributor to shaping the thinking, understanding and practice of logistics and supply chain management, globally, for more than 40 years. Today, Dr. Gattorna continues to inspire future supply chain leaders on the ‘fast clock-speed’ capabilities that organizations need to develop for the volatile and rapidly changing business environments they face.

ridiculous situation where the federal government was unable to buy stocks of testing kits because of their inability to pay quickly. Instead, a billionaire businessman stepped in, paid cash up front and secured 10 million test kits, which he then handed over to government. Hopefully, governments everywhere will learn from these types of failures and take pre-emptive steps to establish full-time Emergency Agencies in the near future, dedicated to preparing for the next major disruption, wherever it comes from and whenever it occurs. Ports and airports have been closed in many countries, reducing the flow of urgent freight across borders. It seems as if we have all been lulled into a false sense of security by the previous decades of almost uninterrupted

Governments and business enterprises alike have gone about their business as if the growth wave powered by globalization would go on forever. This growth mentality pushed everything else aside in its path in the name of prosperity through corporate profits. We must now turn this mentality around and seek more modest growth targets, growth that is sustainable in light of the finite resources’ planet Earth has to offer.

LIVING ECOSYSTEMS Supply chains are pervasive in our lives, driven by people distributed all along the chains- people called customers and consumers at the front end; people called suppliers at the back end; and people in the middle called employees and management of enterprises. The common thread? They are all human. Therefore, much of the activity that takes place in supply chains is driven by human behaviour and decision-making, enabled by technology of course. But technology on its own cannot save the world. Human intervention of the appropriate kind must also be present. The problem is that designers of enterprise supply chains are still largely in denial about the pivotal role of humans and their behaviour, and until this situation is rectified, we will always find ourselves in reactive mode.

ONSET OF COVID-19 The Covid-19 virus started in Wuhan, China, and due to strict containment measure taken by the Chinese Government, many factories were closed, so the initial impact was supply shortages. For customers worldwide, the short-term questions that have to be addressed in these circumstances were: a. Are you a preferred customer with key suppliers, and if so, will they find a way to fulfil my orders? If you are not a preferred customer, you have little hope of receiving the stock you ordered. b. Which products should you prioritize? c. On the demand-side, how should you allocate scare products to your customers? Are there customers who deserve priority over others? d. Do you have a system in place to monitor the progress of your orders along the supply chain? In the longer-term, and postCovid-19, companies have to significantly change the way they do business. No longer can a single source of supply be relied on, even if this is the lowest cost source. Procurement functions must seek to reduce risk by spreading orders across multiple suppliers and geographies, especially for critical items. Pharmaceutical companies, in particular, are going to have to wean themselves off China as the primary source of active ingredients. We will have to pull back from designing supply chains for lowest cost only, because we have gone too far in that direction. To cope with future volatility and indeed major disruptions, we will have to build-in some degree

of redundant capacity in the form of extra inventory, machine capacity, and manpower. The resulting additional resilience will have the effect of increasing the cost-to-serve, which no one wants to hear, but there are no other options. Ultimately, we need to better understand our demand and supply markets and tie them together with digital systems that provide continuous end-to-end (E2E) visibility. I will explain how to do this in the residual of the article.

START AT THE CUSTOMER END: THINK ‘OUTSIDE-IN’ Supply chain designs to date have predominantly followed an ‘insideout’ approach, where personnel inside the business take a view of what they think customers’ needs are, and proceed to build out the corresponding infrastructure, processes, technology. When times are good, and growth is positive, everything you do in this respect seems to work. But as we move into more volatile operating environments, and customers become more vocal and empowered, it becomes obvious that a single ‘ideal’ supply chain configuration will be unable to service the full spread of customer requirements, and the extra dynamism in customer demands. Our research over three decades indicates that four (4) behavioural segments can explain up to 80% of the buying behaviours of customers in a given market, for a given product/ service category. This principle holds true irrespective of nationality. The only thing that changes is the mix

We will have to pull back from designing supply chains for lowest cost only, because we have gone too far in that direction. To cope with future volatility and indeed major disruptions, we will have to build-in some degree of redundant capacity in the form of extra inventory, machine capacity, and manpower. The resulting additional resilience will have the effect of increasing the cost-to-serve, which no one wants to hear, but there are no other options. supplychaintribe.com

FOCUS

Collaborative

Transactional

Project Accumulation

Dynamic

Close working relationships for mutual gain

Consistent low-cost response to largely predictable demands

Delivery to project site on time and complete

Rapid response to unpredictable supply and demand conditions

 Mostly predictable  Regular delivery  Mature or augmented products

 Predictable demand within contract  Regular delivery  Efficiency, low-cost focus

 Primary source of supply

 Multiple sources of supply

 Trusting relationship

 Little sharing of information

 Teamwork/partnership

 More adversarial

 Information sharing

 Standard processes

 Joint development

 Transactional

 Forgiving

 Very price sensitive

SC response

COLLABORATIVE SUPPLY CHAIN™

 Unpredictable demand

Very unpredictable demand

 Stock reservation

 Commodity relationship

Higher risk

 Completed deliveries

 Time priority/urgency

Flexible delivery response

 Expedite if necessary

 Opportunity focus

Innovation focus

 Accumulation off-site

 Ad hoc source of supply

Rapid change

 Special packaging

 Low loyalty, impersonal

Individual decision making

 Special transport if necessary

 Fewer processes

Solutions oriented

 Fixed price

 Outcome oriented

Management of IP

 Delay avoidance

 Commercial deals based on pragmatism

Incentives/ego

 Systematic and detailed supervision

LEAN SUPPLY CHAIN

Supplier-led development and Delivery of new ideas

 Time-specific deliveries

 Risk mitigation

 Less price sensitive

Innovative Solutions

CAMPAIGN SUPPLY CHAIN™

to learn to manage a parallel universe of two main capabilities, i.e., BAU , with the ability to flex up to 40 percent in day-to-day demand; supplemented by a further special capability that is able to find innovative solutions, fast, to sudden and unexpected disruptions coming from any source, and cope with quantum changes in demand. This latter capability will most likely entail setting up long-term alliances with external parties that will facilitate rapid access to required resources to supplement internal efforts. In effect, we are talking about a significant change in organization design, something that most companies have been unwilling to contemplate until now. But it has to happen if we are to step into the future. Some more advanced companies in fast fashion and electronic high-tech are already there and flourishing because of it.

E2E VISIBILITY THE KEY

A FINAL WORD

With the new architecture as described

The old saying: ‘there will be no change unless there is pressure for change’ is very appropriate to the current global crisis caused by the Covid-19 virus. Even just a few months into the crisis, managements of major companies around the world report a greater willingness to change than ever before. Therefore, let’s make the most of this new, receptive attitude to change, and make the necessary changes

 Price aware

AGILE SUPPLY CHAIN

FUTURE-PROOF DESIGNS Going forward, enterprise supply chain designs will have to have the capability to flex under ‘business as usual’ (BAU) operating conditions to service customer demand patterns ranging from stable (baseload), through to say plus or minus 30-40% of that base load; it’s called volatility! This objective must be achieved by more precisely managing capacity requirements of each supply chain type, without pushing costs inordinately high. The way to do this is to hardwire a portfolio of customerfacing supply chain configurations (up to four as suggested above), each with a different combination of processes,

6 CELERITY July - August 2020

technologies, KPIs, and teams. Different combinations of standard components lead to supply chain configurations which are unique in their operating capacity. In addition to these ‘business as usual‘ teams driving supply chain configurations focused on day-to-day operations, it is recommended that enterprises raise a small dedicated ‘Smart’ team(s) that will focus on finding and deploying innovative solutions to unresolved and urgent problems, including emergencies. This is in effect the Fully Flexible SC referred to earlier. Both the BAU and Smart teams will have demand and supply side in their scope of operations, with Procurement personnel represented on both. In this way procurement practices at the backend of the organization will be brought into synch with the demand signals emanating from customers at the front-end. So, going forward, companies have

Even for the best run companies, some of the biggest impacts of the coronavirus crisis have been felt on the supply-side. Globalization, coupled with the conventional KPIs that drive the behavior of Procurement personnel, have led inevitably towards many instances of dependence on single, remote sources. This can work for stable businesses in stable times but can be a hindrance if the market is dynamic – and is disastrous in times of severe disruption such as that which we are experiencing now. above in place, the next step is to map each supply chain type in terms of the specific data required to run it; this is quite a different approach to simply collecting every bit of data possible (Big Data), because that way you run the danger of getting lost. One way of approaching this task is to go through the steps of building a network optimization model of your entire supply chain infrastructure, because in the process the specific data you need to collect will become obvious. It then becomes a case of installing sensors and tracking devices as required to collect this data on an ongoing basis. By installing real-time data collection systems along your enterprise supply chains, powered by tracking devices/sensors like Trackster, which also has a contactless ‘Proof-ofdelivery’ capability, you will be in a position to collect and analyze this data, ideally in a Control Tower environment. The Control Tower can either be your own or outsourced to a Logistics Provider (4PL). In turn, you will then have the means to make faster decisions and get ahead of developments. At the aggregate level, this same data will be useful in planning future changes in your company’s strategic supply chain infrastructure.

No price sensitivity

FULLY FLEXIBLE SUPPLY CHAIN™

Source: Adapted from Gattorna (2015) p.58 and Gattorna & Ellis (2020), p. 35

of behaviors, influenced by country cultures. On that basis, we concluded that it will be necessary to design four (4) matching supply chain pathways to precisely align with these segments, i.e., Collaborative SC™ ; Lean SC; Campaign SC™; and Agile SC. There is a fifth segment which customers move into in times of great uncertainty and extreme disruption, and the corresponding supply chain configuration then is what we called the Fully Flexible SC™. This is the configuration that is especially relevant to the current crisis caused by Covid-19. All five (5) segments and their matching supply chain types are depicted in Figure 1 above.

The five most common behavioral segments and equivalent supply chains

Sharing knowledge and improving the education of the profession has been a strong motivation for Dr. Gattorna. He is a prolific author with at least 11 books, which have been translated into 10 languages. His latest book is “Transforming Supply Chains: Realign your business to better serve customers in a disruptive world (Financial Times Series)”, a guide to designing supply chains that fit, and adapt, and bring competitive advantage – whatever your business is and whoever your customers are.

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for the good of future generations. What enterprises everywhere have to remember is that if supply chains stop, the world stops. That’s how important they are to our modern lifestyle.

Rationalize Procurement Thinking

We need to think about where Procurement personnel sit in the organization and the degree to which their decision-making is integrated. We know theoretically that strategic decision-making in silos is not optimal, but this crisis has highlighted just how dangerous it can be – whether it be sourcing strategy, cost optimisation, risk management or inventory policy – only an end-to-end view of the trade-offs gives us a chance of weathering significant disruptions.

Here are some specific items to consider:

• Change your organisation design and bring the Procurement function under the CSCO; this will increase internal co-ordination. Some of the best companies have already made this key adjustment. • If you are a global manufacturer, divide your world up into regions, and review sourcing lines within the region. Are they/can they, be self-supporting? And can you engineer a greater overall diversity of your supply-base by having options across regions? • In each region, segment your supplier base along behavioral and capability lines, e.g., which suppliers do I wish to develop strong collaborative relationships with that will be sustainable through difficult times? Which suppliers can provide lowest cost for large quantities of product or components, albeit with long lead times? Which suppliers have excess capacity and could supply our requirements at short notice, albeit at a higher cost? Which suppliers are noticeably more innovative and will always find creative ways to meet our inbound supply requirements? A portfolio of capabilities increases flexibility in the supply base. • For some manufacturers, the solution will be to become more vertically integrated, by taking control of some materials and components supply back in-house. If the business has found itself competing for scarce supply during this crisis, the balance of insource vs outsource might need to be reviewed, and a new balance struck. In some exceptional cases where the danger of being starved of key supplies has become apparent, it may be worthwhile to buy out or JV with selected suppliers of critical inputs to your manufacturing process. In this way your control is increased, and risk reduced. But none of this can happen without strong, overt leadership from the top. Leaders will need to be fearless in adopting new modes of operation in the future, and the climate for making major change will never be better than in the next two years. At the individual, business, and government levels we have found that the paradigm can be changed overnight – so we need to apply the lessons learned, quickly, and not let them get lost in the depths of the long-term strategy stockpile.

LEADERSHIP

Delivering THE TASTE ACROSS INDIA

While everyone is saying that lockdown was announced in a very haphazard way. But when we look at your preparedness, it set a leading example for others to emulate. How did you make this happen with such a humungous supply chain in place managing varied SKUs?

“I am of the firm belief that this is the time to build and maintain relationship with the supply chain partners. You should involve them right from the planning stage. Speedy communication is the key so that everyone is on the same page. You need to treat your supply chain partners as your family members. You shouldn’t stop communicating with them because they are under distress or you are under distress,” highlights RS Sodhi, MD, Gujarat Cooperative Milk Marketing Federation (GCMMF), during an exclusive interview. At a time when companies across the country are finding it difficult to reach to customers, Amul is leading from the front. How has that been possible? As you are aware that the dairy supply chain is C – C (Cow to Consumer). There are no holidays in the dairy business. The supply chain of milk cannot stop unless you tell the cattle to stop producing milk. From day one of the lockdown, milk was given the status of an essential product. If you are unable to provide food and essential items to people during lockdown, then the whole efficacy and intention of the lockdown goes waste and there can be food riots. More importantly, we have no option or rather intent to stop our supply chain in times of crisis because firstly we are dealing with a perishable product which is a source of livelihood from 3.6 million landless and marginal farmers, which has a shelf life of 4-5 hours and this is also an undeniable fact that milk and milk products such as Dahi or buttermilk are essential parts of every households’ daily diet in our country. Right from the start of the value chain – be it Cows or buffalos

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producing milk daily to the last mile distributor who is ready to go that extra mile to serve the end consumer – our supply chain can’t stop at any time. We must ensure that our supply chain from Cow to Consumers functions uninterrupted. Rather, in such times, the capacities have been quickly ramped up to serve a greater number of people as within a few days of the lockdown, we realized the demand of such products have risen substantially. In turn, this had put tremendous pressure on our supply chains as the volumes increased. In the initial phases, there was panic buying. Sales increased for the first three-four days of the lockdown and on the fourth-day fresh milk sales declined by 30%. However, now the consumption of dairy and value-added dairy products has increased by 20-50%. Within a few days of the lockdown, we realized that the demand for our products such as Butter, Ghee, Cheese, etc., increased by 15 – 40%. On the contrary, ice cream demands witnessed dip because of sheer

inertia. In order to cater to the growing demand of other products, we made a conscious decision of stopping the ice cream production lines and scaled up operations of other products. During Covid-19, everyone is talking about supply chain as this is the only sector which is moving albeit with its own set of challenges to bring essential products to the last mile. To tell you the fact, the vehicle movement for essential services faced problems only during the first week of the lockdown. Having said that Milk was the only commodity, which didn’t face any trouble in the movement right from the day One. Yes, there were certain challenges in some parts of the country, but they were also resolved with the help of the local authorities in no time.

You need to understand that the lockdown was an Emergency situation and one can’t plan for such unforeseen situations. For instance, if some emergency comes in your family, you simply cannot take a day or two to plan things. You have to immediately attend to the medical needs to curtail the problem. What we did was we communicated with all our supply chain partners right from farmers, transporters, dealers, C&Fs, employees, drivers, etc., and asked them one single question that what’s the purpose for which we all are working. On March 25, we communicated to everyone in our system that their job is not just a job but is a national cause. I spoke to them and informed them the brevity of the situation as any person would really not want to put ones’ life into danger. We made sure that they are rewarded for their performance in such times and immediately announced 15-40% hardship allowance over their salaries. We also empowered them with all the safety measures, be it procuring masks, PPEs, gloves, sanitizers, etc. Simultaneously we also took care of their food requirements as nobody can work hungry. We made sure all our drivers are given food packets and milk bottles for their voyage as none of

the highway dhabas were functioning. We have ongoing langar for everybody associated with us, which serves three meals daily to everyone. We announced incentive schemes for all our supply chain partners and everyone involved in the seamless functioning of the value chain. There were implementational challenges at the ground level as someone allowed Milk but they didn’t allow Dahi or buttermilk. At some places, Butter was allowed but not cheese. We had to really explain them the importance of the seamless supply, but in the end, all went well. It was our duty to take everyone in the loop. You must understand in business such things are normal and one must carry on their businesses by outpacing such minor issues. I would also like to bring to your notice that in these three months of crisis, ie., March, April, May 2020, we didn’t experience degrowth. In fact, some of our SKUs registered higher sales. These are challenging times and we must prepare ourselves to sustain the changing dynamics.

How did you manage Supply Chain Conundrum? Amul managed almost seamlessly to continue pick-up twice a day from its 3.6 million dairy farmers across 18,700 village cooperatives and supply to its eventual users in 1,000 cities and towns. New protocols had to be followed: of washing hands and social distancing for the dairy farmers, of sanitizing trucks for the drivers, and of sorting out the curfew passes especially for inter-state travel. Who’s been in Amul for 38 years, we are used to working in curfews during riots and natural disasters, especially in Gujarat. Just the scale of it was nationwide this time. Amul, with the huge network of around 5000 tanker drivers, is collecting over 25 million litres of milk per day from the villages and transporting it to over a thousand cities and towns across the country. Right from milk collection to the delivery of milk, we are taking all the precautionary sanitation measures in the wake of Covid 19. To ensure the milk provided to people is hygienic and uncontaminated, all the farmers

We need to be agile enough in efficiently managing our supply chains with or without crisis. In achieving this, supply chain needs to be technology driven to start with. Everyone understands the importance of supply chain today. We need to quickly bridge the technological gaps in our supply chain. Secondly, our supply chains shouldn’t be dependent on one product or one business or one big buyer. It should be driven on the basis of multi-segments, multi-channels, multi-products, etc. Lastly, you need to be ready for any eventualities coming your way so that the planning becomes easier in trying times. supplychaintribe.com

LEADERSHIP

and workers have been instructed to wear masks and sanitize their hands frequently. All the workers are also checked by the doctors while entering the Amul premises. We implemented social distancing measures at all our plants, milk collection centres, etc. Health hygiene, masks and every desired safety measure was followed right from the word go. Our drivers were well trained to ensure there is no lapse in hygiene. Our tankers are being sanitized before and after the movement. Thermal screening is being done for our workers at our plants. We have also deployed sanitizing tunnels to ensure safety of every employee. Our dairy plants are mostly automated. There are very few places where we have to deploy human labor such as packaging line. With a view to maintain social distancing in the packaging line, we had to slow down the speed of the line. We also made sure that our truck trailers have Essential Product Delivery stickers on all the sides of the vehicles so that there’s no unnecessary stoppages on the way. Technology played a tremendous role in seeing us through this crisis as GPS-enabled trucks could show us in real-time as to which truck is being halted where and we could immediately take that matter to the concerned officials and get the delivery channel going unstopped. Additionally, our milk collection societies are connected with the automatic milk collection platform where we get the real-time information on the quantity of milk being procured and consumed by the respective societies and that’s how we could map the demand pattern.

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LEADERSHIP

How did you the bridge the challenging gaps? Well, there were many challenges to start with. While our onward movement had hardly faced any travel issues, we realized that the empty trucks coming back to the plants were being stopped initially. We approached the Ministry of Home Affairs to allow plying of empty Amul trucks and they immediately passed the directive to not halt the movement of empty trucks. Another issue that we faced was of packaging material as we only keep 7-day inventory of packaging materials. As per the directives of the government, the packaging plants were closed. We again took up the matters with the Ministry of Animal Husbandry and Ministry of Home Affairs. They immediately issued the directive that the packaging material required for essential services should be allowed to function. Similarly plant maintenance services needed to be allowed to operate as we can’t operate a plant without frequent and timely maintenance. Container movement wasn’t allowed for exports initially. We requested Ministry of Commerce, APEDA as well as other supportive ministries to provide us relaxation for the exports of perishable food products. We realized that Customs Houses Agents (CHA) were not functioning, so whatever online permissions we could have procured, we did that. I would like to bring to your notice that it’s wrong perception that the exports of goods was completely on halt. It was not the case. In fact, barring few container ships, everything started within a week or 10-days of the lockdown. In some parts of the country, we realized

that not more than 20 workers were allowed to work at a time in a factory of essential products and we were unable to run our operations in those areas, so we again contacted the respective authorities and got the operations running without any delay. On 25th March when the first lockdown started, I myself received calls from the office of Ministry of Home Affairs, Chief Minister of Gujarat, Chief Secretaries, Ministry of Animal Husbandry, etc., to request me that the Milk & milk products supplies shouldn’t get hampered during lockdown and wherever there is any challenge faced, don’t hesitate to call. You wouldn’t believe that within a week, I had spoken to almost 200 officials to manage the challenges faced.

How have you been keeping your team motivated in times of human crisis at hand as the disease we are fighting is extremely contagious? Let me explain this to you with an example. In the late 80s and early 90s, I was posted in Ahmedabad. At that point in time, the city was under curfew for months because of ongoing riots. Those experiences helped us sail through times like these. In the early 90s, we never used to have mobiles and it was only one landline with which we used to operate. There were no high-end computers. Today at least, most of the people can work from home. So, you can imagine the tumultuous times we have sailed through. The only difference was at that time, Section 144 was imposed only in Ahmedabad, but today the entire nation is under lockdown. Having said that, bad times prepare you for the worst and we have been witness to such days, which really made us more resilient and stronger to surmount such challenging times. Additionally, the implementation of latest technology also aided in ensuring a seamless supply chain. Technology has enabled us to monitor milk supplies — sitting in our homes or offices – (we could monitor the) amount of milk supplied at 18,500 milk collection centres, which village is supplying how much milk and we are able to evaluate the reason behind the rise and drop in milk supply. Moreover, a technology like GPS has enabled us to track the movement of 20,000 trucks that carry Amul products. It has helped

Amul is

us to monitor supplies at the retail level as well.

What supply chain strategies worked out by you in making sure that the milk products reach last mile even in the containment zones? Let me explain this to you briefly, we are managing three different types of supply chains. One is of perishable products such as Milk, dahi, paneer, etc. The second is of milk products such as butter, cheese and ghee. The third one is of frozen goods such as ice creams. The biggest challenge in front of us was that the shops across the country were merely opening for 3-4 hours a day. It was practically impossible for us to supply all these products in different vehicles at the same time at all the shops as all these products require varied transport vehicles. We also realized that our ice cream infrastructure was lying idle. We spoke to our ice cream and hotel distributors where the supply was shelved during the crisis, as they were not having any business due to demand drops, we asked them to utilize their idle manpower and vehicles to transport dairy products so that we could service our retailers within that short window. Our distributors were happy with this alternate arrangement as they started getting some monies in their hands and we were happy as we could reach out to our customers. So, it was a win-win situation for both of us. In this arrangement, we also met with challenges as certain shops were not allowed to open due to containment areas. With the view to service all the demands in the same window, we came up with the idea of selling milk products directly to Resident Welfare Associations (RWAs) of residential societies in various cities of the country. We told the society secretaries that they would get 8-10% margin on the products they sell. This way they also started earning some money and there were many volunteers who came on-board as all of the people were working from home. Direct supply of milk and milk products to residents proved to be a profitable business model. Today we supply to over 500 residential societies in Mumbai, Pune, Delhi, Ahmedabad and some other cities.

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3.6 million farmers twice every day by using 5, 000 road milk tankers, from 18,500 milk collection centres, coming to around 82 dairy plants or chilling stations

procuring milk from

Milk is converted into packaged milk, milk products or frozen milk products.

10000 milk vans to carry packed milk. 10000 trucks to carry dairy products other than milk. 20000 distributors’ van carrying products to various parts of the country. At any given time, around

50000 Amul dedicated

vehicles have been plying on the road in today’ time as well. Working with around 1 lakh supply chain partners to ensure that our supply chain is working efficiently.

How did technology play its part? For us at Amul, it is imperative that the entire supply chain is efficiently working to ensure uninterrupted supply of products across the country. To give you sense of our operations, we procure, on an average, 25 million litres of milk daily from 3.6 million farmers across 18,500 villages of Gujarat. This milk is processed into packaged milk and almost 750 SKUs of a wide range of products (fresh, ambient, chilled and frozen) at our 82 plant locations across India, and supplied to million-plus outlets through a network of 68 branch offices, 250 warehouses and 10,000 distributors. Amul has been able to service all our markets efficiently because all supply chain members have been working with commitment, as well as safety, to ensure that the consumers get their favorite brand, every morning. The important aspects where technology helped us immensely included:  Our entire milk is collected through common software at all 18,500 village societies. Data of all 3.6



million producers, who provide (cow and buffalo) milk, twice a day, is recorded and monitored in the system. The entire fleet of 5,000 tankers collecting milk from village societies to 82-plus dairy plants is tracked continuously on GPS to monitor and resolve disruptions, if any. All 10,000 distributors place their retailer-wise orders and do billing on our common DMS software. The lat-long of all (one million) outlets, along with several products billed in the last seven, 15, 30 days, is available for all sales team and trade partners for regular monitoring on our 'LocateAmul' app. We have a dedicated app 'AmulCart' for placing orders. There are 8,000 Amul parlors and top retailers across India. So, even if the salesmen could not reach them due to lockdown, the orders are seamlessly transferred to the distributor. This ensures that the distribution is efficient, and also closely monitored by the team.

LEADERSHIP Where does the government play a crucial role in giving dairy market a greater push? Milk is the source of livelihood for 100 million people of the country. We have seen most of migrants coming back to their villages. My suggestion to the government would be to create opportunities for these migrants in their respective villages and towns. Rural India has the potential to drive Indian economy at a fast pace and the government, I am sure, has been taking right steps through the reform measures announced just recently to address their concerns. Dairy and animal husbandry are some of the biggest employment generators in the country as you can’t deploy resources on the already overloaded agriculture sector.

How do you view the supply chain expansion shaping up in the years to come? We need to be agile enough in efficiently managing our supply chains with or without crisis. In achieving this, supply chain needs to be technology driven to start with. Everyone understands the importance of supply chain today. We need to quickly bridge the technological gaps in our supply chain. Secondly, our supply chains shouldn’t be dependent on one product or one business or one big buyer. It should be driven on the basis of multi-segments, multi-channels, multi-products, etc. Lastly, you need to be ready for any eventualities coming your way so that the planning becomes easier in trying times.

Where is the growth heading for the dairy sector in the country? In India, milk production is growing at the rate of 5%. Meanwhile, the organized sector is growing at a rate of 9-10%. Organized sector will grow further, post Coronavirus. Due to the crisis, farmers and customers have realized that they can rely on the organized sector compared to the unorganized sector. All cooperatives across India purchased 20-50% more milk from farmers, during this lockdown period. This procurement didn't impact milk prices at all. Meanwhile, Amul has seen a 15% increase in procurement during this time. We are indeed the blessed lot as not only have our procurement registered

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an appreciable increase but also the farmers are getting better rates for their produce. Amul collects milk from 18700 village cooperative societies and brings them to 82 dairy plants spread across the country. Last year, Amul procured 23 million litres per day milk but in the span of next five years, we are planning to enhance our milk procurement to 32 million liters per day. Our milk procurement registered 9% growth in the last 10 years and we will continue it in the coming years. Besides, Amul is investing in making sweets like Pedha, Barfi and other items. For the last ten years, Amul has been growing at a CAGR of 17-18% and it hopes to grow further. We are confident that we will grow by 15% this fiscal despite the problems caused by the corona pandemic. As I said earlier, household consumption of milk and other dairy products will increase and making up the losses of sales caused by closure of hotels, restaurants and cafeterias during lockdown period. The company’s ‘multi-pronged’ approach –multiple production bases, multiple brands, multiple products for varied consumer segments and multiple distribution channels will ensure that steady supply of products are maintained.

How do you foresee the Indian economy shaping up from hereon post pandemic? I am of the firm belief that Indian economy will bounce back rather quickly than any other country in the country

as we are very resilient and we have many inherent factors in our favor which help us tide through tough times. We are a country of 1.38 bn populations having our own resources, skilled manpower, a highly growing market and most importantly the determination to bounce back in tough times. I am highly optimistic about the growth of food products category as going forward, consumers will demand for more affordable and healthy food products. There will be huge lifestyle changes that we will witness in the near future and the country is well placed to cater to such growing demands.

Advice to companies to tide through tough times This is the time to build and maintain relationship with the supply chain partners. You should involve them right from the planning stage. Communication is the key so that everyone is on the same page. They understand your pain points and vice versa. Together companies can solve the problems they are facing and devise a workable solution. Following this strategy, we have not only doubled our communication with our partners through advertising, but also reached out to them personally to get this going. You need to treat your supply chain partners as your family members. You shouldn’t stop communicating with them because they are under distress or you are under distress.

INTERVIEW

Catering to the

NEW NORMAL

“There is no doubt that Covid-19 has left a lasting impact on our business, our supply chain and our supplier partners. We also see a new normal for our customers, in the way we deliver our restaurant experience, the best and safest way possible for them to enjoy our unique McDonald’s menu,” highlights Pankaj Bansal, Director, Supply Chain and Quality Systems, McDonald’s India (North and East). What have been the implications on supply chain at McDonald’s?

How are you bracing for these changing times?

The Covid-19 situation has presented unique challenges for the entire supply chain industry, as both supply and demand have been constrained. Our supply chain has been severely impacted as most of our restaurants remained shut or have been limited to Delivery service only. As a global industry player, we have strict standards for ensuring quality and food safety throughout our supply chain, but the current situation required introducing additional health and safety measures such as temperature monitoring, social distancing, frequent handwashing, enhanced sanitization protocols, etc. The situation has also triggered immediate requirement of PPE materials like masks, gloves, face shields and cleaning/ sanitization chemicals to ensure safety of our employees and customers. With majority of our restaurants either closed or opened for deliveries only, there has been a severe impact on our business. With many of our ingredients having limited shelf-life, this sudden business disruption has also led to a significant risk of inventory shrinkage throughout the supply chain. Covid-19 can pose a great risk to the entire supply chain, so our contingency measures are reviewed and tested across our supply chain to ensure assured supplies to our restaurants.

At McDonald’s India (North and East), our top-most priority has been the safety of our customers and employees. We have implemented number of additional safety measures such as temperature monitoring, frequent handwashing, stringent sickness reporting policy across our supply chain to ensure food safety. We have also put in place a graded response action plan across the supply chain to tackle any positive coronavirus case. On the supply front, we have focused on ensuring a resilient supply chain, minimizing the cost impact and risk mitigation by working closely with all our suppliers as well as our distribution center. With this collaborative approach, we have been able to activate the supplies of all PPE and cleaning/sanitization chemicals quickly through our globally approved suppliers. To ensure a sustained supply chain, we have been reviewing our contingency plan regularly with our suppliers including our distribution center to be prepared in case of any disruption.

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How do you see the situation changing in the future?

regulations. Since our supply chain has been in a ready state, we do not see any challenge in scaling up our operations as and when the reopening of the economy picks up pace.

As the leading QSR company in India and globally, how are you prepping up to serve the customers again? Will there be any supply chain implications in the future? To ensure the safety of our people and our customers, we have taken several steps to ensure good hygiene and sanitation standards in our restaurants; along with stringent social/physical distancing measures. We are providing easy and ready access to hand sanitizers (with 70% alcohol) to all our visitors including delivery riders and service providers. The cleaning and sanitation SOPs have been stepped up to ensure proper and regular sanitation of frequently touched points/surfaces. There is no doubt that Covid-19 has left a lasting impact on our business, our supply chain, and our supplier partners. We also see a new normal for our customers, in the way we deliver our restaurant experience, the best and safest way possible for them to enjoy our unique McDonald’s menu.

We expect our business to reopen gradually and in a phased manner, guided by government guidelines and

INTERVIEW

Shifting Dynamics VACCINATION PREPAREDNESS & FOOD SUPPLY “A good supply chain is demand driven; right from provisioning the inputs, to support production, and to distribute the product to final buyer; and the urge to remain competitive drives its optimization. But thanks to the pandemic, demand itself is disrupted and will not be the same for years. Hence, when a very basic detail has changed, supply chains will not merely be in need of reengineering but have to be re-designed to the changed status,” highlights Pawanexh Kohli.

Pawanexh Kohli was laterally inducted in 2012 to incubate India’s PPP modelled think-tank, the National Centre for Cold-chain Development (NCCD). Until 2020, he headed NCCD as its founding CEO and doubled as Chief Advisor on supply chain to the Ministry of Agriculture. Besides shaping the national roadmap for coldchain development, as member of the Committee for Doubling Farmers Income, he brought a paradigm shift in how agricultural supply chains are approached. Professionally a mariner and ship captain, he was also conferred honorary title of Professor. He is currently on the Global Advisory Committee of the International Solar Initiative (ISA) and Chairs its Select Group on Solar Cooling.

Your view on the current pandemic and how quickly will supply chains recover?

transmission, use transformers and last mile lines to deliver to consumers. This supply chain could be entirely owned by a company, or involve a network of independent business entities. Each has a customer-client relationship with the other but exists because of demand from terminal-consumer. When terminal demand changes, as is periodically the case with electricity, the supply chain remains alert to adjust production, transmission and distribution. If it fails to do so, inefficiencies result… various activity components fail… and black-outs or long term damage can occur. The supply chain need not only coordinate the raw material inputs, but can also cater for manpower, tools and more; in this example the logistics it uses is coal carrying ships and railways, water pipelines, electricity transmission lines, transformer-distributors, and maybe even batteries to store the electricity. With Covid19, the earning capacity of billions across the world is discomposed, and consumer demand for various products is affected – maybe dampened for a prolonged period. Risk of livelihoods and uncertainty of health makes people rationalize the distinction between needs and wants. The erstwhile overlaps between the essential and the aspirational is getting delineated and

Just 6 months back, the average individual could not have imagined these dramatic turns of events where the world would be forced to pause, suffering a pandemic of the likes from a hundred years ago. Even now, all that mankind can do is to hide and distance itself from the virus. India, apparently averting a higher order of debilitation, has gone through more than 60 days of strictures in the normal movement of people and goods. This coronavirus has made humans aware of their own fragility and the impact is utter disruption or shut down of interdependent supply chains, of every trade. With no cure nor a preventive vaccine in hand, the talk now is of a new ‘normal’, of learning to live with the risk of disease. This is made necessary, because besides the risk to life from the virus, the ensuing global economic hiatus has also put livelihoods and economies at risk. The temporary collapse of our economic order can be put back on a sound footing, provided the supply chain community collaborates to adjust to the circumstances at hand. While there will be much talk of relocating factories

14 CELERITY July - August 2020

and restructuring of procurement and marketing models, these are not simple matters and such re-engineering of the supply chain is not readily executable. In fact, these opinions imagine that rebalancing of sourcing and logistics is all the adjustment needed, with the rest of the eco-system remaining the same. A good supply chain is demand driven; right from provisioning the inputs, to support production, and to distribute the product to final buyer; and the urge to remain competitive drives its optimization. But thanks to the pandemic, truth-be-spoke, demand itself is disrupted and will not be the same for years. Hence, when a very basic detail has changed, supply chains will not merely be in need of re-engineering but have to be re-designed to the changed status. Most people assume the supply chain to mean logistics. Actually, it means optimally deploying resources to create value, said value being expressed though an assessment of demand, and deliver the value to where it can fetch optimal return. To explain, the supply chain of an electric power producer cum distributor, can be seen as the sourcing of coal at mines, delivering coal and water to the steam turbine plants, connecting with the high voltage grid for long haul

some businesses and their supply chains may never recover. What one is surer about, is that we will see more attention directed on agricultural supply chains, particularly the post-production supply chain, something I urged for more than a decade. Agriculture will regain its importance, and it should not have taken a virus to force this logic. For most aspirational products, demand is currently unsettled, and may slowly settle into altered patterns – a different normal. Will as many people wish to as frequently, replace their mobile phones or refurbish their wardrobe or go out for a movie or a meal? Given the facts today, unlikely! The situation may change, a vaccine may get discovered post-haste, and then instead of creating entirely new supply chain networks, we may only need to tweak our existing ones.

What if a vaccine is developed, what will be needed from the supply chains? If one is developed, across the world its supply chain should take priority with all else put aside! After R&D, trials and validation, the final product will need to be produced and then delivered to end-consumer. That will be a herculean task globally, and entails planning ahead to produce large quantities and for an extensive and assured delivery mechanism. If 65% of the global population must be vaccinated to achieve herd immunity, we are looking at 5 billion vaccinations across geographies. The worrisome part is, even today, for the well-mapped range of viruses, the existing vaccination system does not even reach every

person in need. This state of affairs of the healthcare system to deliver vaccines is not sufficient. Given the characteristics of this pandemic, countries must start to plan now, much in advance, on their vaccine delivery system. While today we worry about hospital equipment & beds, and hence work to dampen the curve, very shortly it will be about ensuring the vaccine is made available, at every remote hamlet and village, globally. Though now we work to slow the spread of the virus, then, we will have to consciously hasten the spread of the vaccine faster than the virus. Time to plan is NOW!

Can the existing supply chain handle the load to take the vaccine to billion and quickly, within months… is the most relevant question that the industry must ask and respond to quickly. Hopefully, the vaccine will be once in a lifetime shot, and not a seasonal requirement. No matter what, we cannot afford to ignore that the next trouble spot will be executing a globally networked delivery mechanism for the COVID-19 vaccine. It may be the only way to stop this virus in its track and get society and economy back on its feet. It will also relate to some extent if a curative drug is developed.

This appears vital and interesting. Explain some more, if a curative drug or a vaccine is made possible? Let us broadly assess what would be the expectations, if either a cure, or a vaccine is readied, from the perspective

of supply chains. The cure will target the infected, the vaccine will target the uninfected. First let us evaluate the demand for the curative medicine. Assuming it is viable for all age and health brackets, this will amount to a dozen million consumers (maybe a couple of hundred million) only. The demand will only total the number infected. This is assuming that any drug for a novel virus would have to be prescribed and administered by doctors. This will define the supply chain of inputs, the active product ingredients, to medicine manufacturer, and the output supply chain to reach the drug to those suffering. The material quantity of inputs, as well the output volume to deliver is determined from total demand, i.e. confirmed Covid19 cases. The delivery locations would be existing hospitals or special clinics. The supply of drugs would range from a few hundred in some countries to a few hundred thousand in others, and the supply chain will weigh the cost of production with each requirement to decide whether a new domestic manufacturing base is needed, or whether sourcing elsewhere makes better sense. The fact that this is only a curative drug, and not a preventive, would also have ramifications. It means, the virus will remain and keep infecting others, but those infected can be cured with this drug. That also infers that the demand of the medicine will be regular, until a vaccine stops the spread of the virus. The supply chain will also consider to pre-empt, that with the presence of such a drug, more people will take more risks and the number of ill will multiply. A regular and possibly increased demand

This global crisis has highlighted that the most essential of goods is food! It has inched nations closer to the understanding that having a robust agricultural supply chain is of utmost importance to their geo-political and geostrategic strengths. That there is no smart city or urbanized world, without linkages with a resilient agricultural sector. This sector has the opportunity to regain its glory, if planned and implemented with proper perspective. supplychaintribe.com

INTERVIEW

To initiate mental calisthenics in supply chain planners, here are some quick numbers. In my assessment, India will need around 1.8 lakh vaccine givers, located in clusters of 5000 people, two in each, to vaccinate 65% of the population in 21 days. The vaccine givers can be volunteers inducted from society at large, each given a short training. This, also allows the existing routine immunisation program to continue with the regular work. We must avoid thousands thronging at hospitals for a vaccine, as they will instead catch the virus. Besides we cannot burden our already overwhelmed health centres, and medical practitioners. for the drug, might warrant setting up regional or national level manufacturing units. This will help the supply chain adjust to sudden flare-ups in number of infections, etc. Now let us similarly examine the supply chain in case of a vaccine and narrow it down to India’s backdrop. If 65% of our population needs to be immunized for herd immunity, that means producing and administering 900 million doses. Furthermore, to stop the virus in its track, herd immunity must be achieved as soon as possible through a cluster-based approach. There is talk of selectively administering vaccine first to special categories like essential workers, and the rest later. Such thinking has to change, as piecemeal immunization will run the risk of allowing the virus to mutate against the vaccine. Such thinking is from mindsets that imagine the task is impossible. It is not! The supply chain can cope with the task. To initiate mental calisthenics in supply chain planners, here are some quick numbers. In my assessment, India will need around 1.8 lakh vaccine givers, located in clusters of 5000 people, two in each, to vaccinate 65% of the population in 21 days. The vaccine givers can be volunteers inducted from society

16 CELERITY July - August 2020

at large, each given a short training. This also allows the existing routine immunisation program to continue with the regular work. We must avoid thousands thronging at hospitals for a vaccine, as they will instead catch the virus. Besides, we cannot burden our already overwhelmed health centres, and medical practitioners. For health reasons, vaccine should not be administered to people at risk or already exposed to the virus. Care must also be taken to ensure that any person is not vaccinated twice, as it would be akin to giving a higher dose of the disease. Hence, the Aarogya Setu data would need to be compulsory and linked with unique ID of citizens. Not only to monitor the immunization process but also for probity and safety. The App should be in use for weeks, and not just installed a day before. Those who still have issues with such Apps and Aadhaar should seriously rethink their stand. The authorities must develop an appropriate software platform to keep track of vaccine delivery into each locality. At various population centres, volunteers can be identified to undergo a short training to administer and maintain vaccination records. A cold chain would be required for the vaccine. The existing food cold-

chain network can be enlisted to quickly share capacity, so there is no excuse or delay in setting up new network. In India, the vaccination program could be staggered, so that it is administered to 900 million within 4 months. Longer timelines may only defeat the concept of herd immunity and even can even create strife within people. Once an area has been immunized, that cluster can take up all economic activities after a 3-day period (assuming the duration for immunity to come into effect). Intermingling of the immunized with others will need to be dissuaded to prevent any chance of the virus to mutate. By end of 4 months, the whole country can revert to normal economic, back on its feet and running. True, vaccines for Covid-19 are still under trials, but the supply chain cannot sit back, unplanned for the eventuality. Supply chains must be thought out holistically, have measurable outcomes and sensibly bring into use all available resources. This vaccine supply chain will have to be owned by the government, partnered with volunteers and the private sector.

How well is the cold-chain mechanism in our country slated to take on such a mammoth exercise? How can the cold-chain operators prep themselves for the task in hand? Most vaccines need to be handled, after production to end-use, within specified temperature ranges. In all probability, the protocols will require it be kept between 2°C and 8°C, while in transport and storage until delivery. Such protocols are well established. But the public health network is limited in capacity. Luckily, the food cold-chain has synergistic use for this purpose and should assist in this battle. Existing cold-chain enterprises may need to allocate specific resources in their network. The food cold-chain has the maximum reach, with an extensive last mile connectivity. It will require minor redesign to designate storage space and transport load for this purpose. Most importantly, such private operators will have to be prepared to safely process the vaccine loads as they connect them with points of delivery. Vaccines are fragile cargo, requiring strict adherence to the handling protocols, especially

in temperature maintenance. Nonstandardized care will be disastrous and some training will be needed here as well. Almost every cold-chain owner I have spoken to, is willing to contribute space and assets towards this, should the need arise. Though they do not handle medical supplies normally, such cold-chain operators can quickly familiarize themselves with vaccine handling, identify a few in their team and be ready to roll into action. If they need additional equipment or monitoring tools, they should prepare a list in advance and inform the government.

Cold chain operators gear up to serve to counter a real threat... humankind's biggest! It appears speed will be of essence, so what more can be done for vaccination? You are right, it is not a matter of adding vaccine refrigerators or creating brand new vaccination centres. We must

restructure with purpose to start and finish the immunisation program within a short time period to be effective. Hence, even is the vaccine is ready, the program should not be commenced until the last-mile for administering the vaccine is prepared. The bulk supply of vaccine from producer is easily managed, but the assured reach to each identified vaccinator has to be coordinated so that each geographical cluster is fully covered in a short time. For such an extensive and time limited reach, the number of delivery points must be extensive. For this, a vaccine giver must be identified at each colony, village, RWA, building complex and provided a vaccine fridge. Maybe even the outlets in shopping malls, one in each office block, or at local post offices. Even hamburger and pizzeria outlets have functional cold rooms can be used in this network. Local pharmaceutical outlets could be enabled to store and administer the vaccine. By multiplying the delivery points of the vaccine, there will be less crowding, and the process will be more controlled and

A cold-chain would be required for the vaccine. The existing food cold-chain network can be enlisted to quickly share capacity, so there is no excuse or delay in setting up new network. In India, the vaccination program could be staggered, so that it is administered to 900 million within 4 months. Longer timelines may only defeat the concept of herd immunity and even can even create strife within people. Once an area has been immunized, that cluster can take up all economic activities after a 3-day period (assuming that duration for immunity to come into effect). Intermingling of the immunized with others will need to be dissuaded to prevent any chance of the virus to mutate. By end of 4 months, the whole country can revert back to normal economic, back on its feet and running. supplychaintribe.com

faster. Citizen participation will be important, both as volunteers as well in maintaining discipline. Each should get an alert with date and time, on their Aarogya Setu App, to go for their vaccination and must follow the schedule. India does a similar exercise, in regional clusters for its elections where not a single voter is denied. A similar exercise in mobilization will be needed – the vaccine, when developed, will need to reach every citizen, irrespective. This exercise cannot be left entirely to private enterprise and individuals should be denied the vaccine for want of private funds. Across the world, responsible governments will have to ensure that each of its citizens is inoculated. Public funds have to be allocated and this public service will have to be well planned. Government offices that deal in cold-chain and healthcare services will need to converge and partner more than they ever have before. It is going to require forging of dependable public-private partnerships, at a scale never seen before.

How do you think the agriculture sector will change here-on? Unless the virus mutates into a benign form, or dies out on its own, a vaccine looks to be the only safeguard for the global population. Till then, physical distancing is the primary tool in our armoury, to keep some modicum of control on the spread of COVID-19. So, like all activities, the agricultural supply chain will also need to maintain these practices. To bring more sense to it, there is the option to calculate the radius of risk for physical movement – risk of exposure in relation to radius of travel – and in the long run, I think that will be worked out. For example, if there is no incident of coronavirus within a radius of 10 kilometres, then that is your risk-free radius and distancing practices can be eased. However, if one incident is within range of 500 metres, then a lockdown could be justified. This nevertheless will also require more extensive testing. The risk radius in agrarian areas is naturally higher and most of farming operations could be continued normally. The post production supply chain, however, would require breaking the safe zone. The human actors would

INTERVIEW

True, vaccines for Covid-19 are still under trials, but the supply chain cannot sit back, unplanned for the eventuality. Supply chains must be thought out holistically, have measurable outcomes and sensibly bring into use all available resources. This vaccine supply chain will have to be owned by the government, partnered with volunteers and the private sector. naturally need to follow safe anti-covid practices. However, the organized agricultural supply chain is seeing boosted attention, thanks to this pandemic. The first change here, one hopes, is greater organization of the included logistics, especially at the first-mile. When it is said that the agricultural supply chain is fragmented, the obvious answer is make efforts to consolidate. The question is consolidate what, the people, the farms, the equipment or the goods is handled by the supply chain. This last is the most sensible priority and whether a pandemic or otherwise, will be the only way our agricultural sector will thrive and grow. I repeatedly use the phrase agricultural instead of agriculture because the latter largely relates to foodgrains, whereas the former includes fisheries, animal husbandry, horticulture, forestry, etc. The supply chain will also have to shift from pre-dated focus on staple grains, cotton and sugar, and look at the unique requirements of the other high value produce. This global crisis has highlighted that the most essential of goods is food! It has inched nations closer to the understanding that having a robust agricultural supply chain is of utmost importance to their geo-political and geo-strategic strengths. That there is no smart city or urbanized world, without linkages with a resilient agricultural sector. This sector has the opportunity to regain its glory, if planned and implemented with proper perspective.

What are the standard protocols that will need to be adopted in times to come? Well, until a cure or a preventive vaccine comes about, there are but two options. Willingly risk the disease or actively avoid the virus. For most individuals, the

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latter will mean making the abnormal normal. Restarting the economy will be phased and if a new wave of spread happens, lockdowns would need to recur. The lockdown merely restricted non-essential physical movement of people and it does not mean the virus is defeated. Easing restrictions will mean following precautionary guidelines to keep physical distance from others, handwashing, etc. This would need to continue. It is selfish, even evil, to be individually fatalistic and expose oneself to the disease, as it puts others at risk as well. If the world can shun smoking because it can passively hurt others around, then that same logic should apply even more stringently to this active disease. I fail to understand the news from America… it ostracises smoking because passive smoke might be harmful, yet they will not stop beach parties while this virus is out & about. The relaxation of restrictions on movement can be calibrated depending on the situational analysis in areas. A data driven approach is possible, keeping it simple and with transparent, so that the general public can be willing participants. The risk assessment can be attempted by correlating with population density, the virulence in the region, vulnerability factor, post-disease immunity, etc. As mentioned earlier, safe radius or risk radius can be mapped geo-spatially, which can define the protocol level and the personal practices within such geographies. This is already done in a fashion, for example when traveling by plane. Extra precautions are taken, since extra exposure is being risked, while if only staying at home even wearing a face mask can be unnecessary. Meanwhile, I also failed to see

the logic in sprinkling people with disinfectants, which was started at some agricultural markets. The virus resides in the respiratory system in an infected person. Irrespective of external chemical spraying, the virus will be shed with that person’s very next breathe. It is nice to see the observation was noted and the practice is stopped at Mandis. However, various such experimentation in protocols will follow and various course corrections can be expected. Spraying of street gutters and roadside trees also seem to be a waste of resources. Risk-reward-action assessments will be the name of the game, and until everyone understands it fully, social practices may have to be enforced through law. However, if the virus does fade off quickly, then all above is speculation and we can go back to our independently anarchistic and democratically enabled behaviors.

How do you foresee the scenario penning out? I see a shift in demand for various products and in development targets. A large section of employable workforce has shifted to rural India and may fall prey to social evils. Hence, more development works can be initiated where the workforce exists. I think there is a good chance that this will end with the resurgence of Rural India. It is time for Stand-up Rural India.

COVER STORY

THE TECH’TONIC SHIFT The subject matter experts have aptly termed the current decade (2020-30) as the “Decade of Supply Chain” because in the next ten years, we will see supply chain evolving and taking its rightful place at the heart of business organization worldwide. And if you look at the current environment, the Corona virus pandemic has forced the global leadership and policy makers to think about supply chain more seriously than ever before. This pandemic has been a wake-up call for the industry at large to adopt not just incremental ways but big bang technology solutions & services to set the ball rolling for the future. The Cover Story this time takes a deep dive into the technology adoption among supply chain fraternity and how this New Normal is going to bring a ‘Tech’tonic Shift for customers and suppliers alike. Industry leaders from all walks of profession – be it users, consultants and the solution providers have voiced their insightful opinions on the technological landscape that is slowly seeping into the supply chain domain and transforming it for the GOOD, the BETTER and the BEST…

Vivek Sarbhai, Ex-Director Customer Service & Logistics, Mondelez Middle East & Africa

supplychaintribe.com

Anshuj Rathi, Master Principal Sales Consultant, Oracle

Nikhil S Gurjar, President, Consulting Connoisseurs

Dharmesh Rathod, Independent IT & Cyber Security Advisor

Sanjay Desai, Advisory Consultant Supply Chain

COVER STORY

Technology aided supply chain keeping itself afloat during the current pandemic It is going to be an acid test for the industry in terms of how they would be able to service the clients quickly. On the other hand, those who are not into social distancing-based technologies or rely on traditional ‘contact-based’ technologies are likely to see huge setbacks in the days to come. The pandemic has actually offered great opportunity to leaders of the industry for making the most of technology now and draw plans to embrace automation as much as possible in coming times. Vivek Sarbhai, Ex-Director Customer Service & Logistics, Mondelez Middle East & Africa: Technology enabled supply chain has helped a lot in preparing and withstanding the onslaught of the pandemic. In other words, it has made supply chain highly resilient. With minimal human involvement, we can manage information, physical flow of goods and cash supply chain. Imagine, this pandemic in 2010 or say 2015 – how much we, as a society, not just in India but globally would have struggled. In a way this pandemic opened our eyes that how much supply chain have become prepared already for an inevitable contact less economy of the future. Noteworthy amongst many tech enabled interventions that helped all of us are: (i) Unprecedented scale of work from home and e-education (ii) Track & trace capability to trace patients and quarantine them (iii) Digital transfer of money directly into the account of people (iv) More enhanced usage of digital payments (v) E-commerce supply chain for essentials, (vi) Aarogya setu App

Anshuj Rathi, Master Principal Sales Consultant, Oracle: Technology is helping companies to reimagine and remodel their supply chain. Companies which have so far done business using traditional face to face customer interaction are moving to digital

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platforms for receiving & shipping customer orders. Technology is helping workers to maintain social distancing in industrial environment by using wearables. Increasing use for Robotics process automation is becoming more prevalent. Emphasis on touchless processing in supply chain is getting more steam in all sectors. It is quite evident that most of the companies will now remodel their supply chain to consider this kind of calamities. Almost every industry would still like to take advantages of global supply chain but will create alternate supply chains as well as some local supply chains to keep minimum required services on.

Nikhil S Gurjar, President, Consulting Connoisseurs: All technology players are likely to expect a sudden surge in demands post the lifting of the current lockdown. The demand would largely be driven by regulatory as well as epidemiological concerns and would be in the areas of contactless SCMs, SCM visibility solutions, etc. In all, it’s going to be an acid tests for the industry in terms of how they would be able to service the clients quickly. On the other hand, those who aren’t into social distancing-based technologies, or rely on traditional ‘contact-based’ technologies are likely to see huge setbacks in the days to come.

Dharmesh Rathod, Independent IT & Cyber Security Advisor: Through

the advent of Digitization, we have seen technology in the driving seat and prominently leading supply chain functions across several industry segments, be it large enterprises, government enterprises/PSUs and SMEs. Automation in supply chain has been around since past few years, which has offered several vital value-added features such as remote handling, consolidated operations handling, well integrated with other business functions, etc. Pandemic has restricted human movements and thus the controllers of technology. The Pandemic has actually offered great opportunity to leaders of the industry for making the most of technology now and draw plans to embrace automation as much as possible in coming times.

Sanjay Desai, Advisory Consultant Supply Chain: This is an opportunity for global supply chain leaders and decisions makers to make use of available technology in our social and professional lives and prepare for counter measures during the pandemic period. Indicated below are some of the technology capabilities that came in limelight adding their value during current pandemic period:

A.I. Enabled and/ Machine Learning capabilities: With such severe disruption in supply /demand chains, it’s essential to have accurate data like connected inventory and order status to drive business decisions. AI-enabled solutions

will provide use of real-time intelligence and optimize supply chain performance in various parameters as required. As global supply chains face high level of volatility & disruptions, ensuring right product, at right time, at right place will be challenging. It may take substantial time to re-structure the broken supply lanes, built buffers, and fix broken chains. Secured PTP/ File Transfer: It is critical that organizations provide secured point-to-point data transfers, html / flat file transfer protocols to their workforce based in remote locations and making it easy for them to execute their deliverables. Digitally driven service platform: Today as nations are coming together to fight the pandemic, what we need are medical supplies of all types, ranging from critical to complex to simple (ventilators /face masks). We need companies to

collaborate with each other and transfer critical data, which will allow us to develop an interim supply network. This interim supply network will be much faster, easier, and legally compliant to support increasing volumes & complexity coming from various nations with varying degrees of pandemic infections. A technologically driven digitized service onboarding platform or supplier diversity program is the need of the hour.

key deliverable of technology. “Keep the Lights On” people and processes to keep the lights on in critical IT / Support functions particularly call centres, control towers, and customer service functions. During such difficult times, a seamless flow of communication to keep employees, customers, regulatory authorities is so much critical. There are various forms of advanced communication we can use these days to communicate (e.g. Facebook, Twitter).

Automate data integration using Cloud: Without the Cloud technology, companies would struggle to share critical data, access analytics and much more. Even short physical distances would present a challenge for collaboration between organizations, suppliers, co-workers without the cloud. Real-time wouldn’t be as easy, smart phones wouldn’t be smart, and managing rapid data would be impossible. Use of Cloud is becoming a

Inherent challenges in technology adoption Service providers need to work hard to get into the circle of trust with organizations. Most are strategic partners, but few are in the ‘circle-of-trust’ when it comes to strategic direction. In such conditions, simulation-based proofs and offline development of technologies using a partnership approach is required.

Vivek Sarbhai: Despite almost all business leadership teams now wanting to tech enable supply chain and drive strong data and analytics enabled decision making, organizations struggle in what I term as “pilot purgatory”. This happens due to not having a clear strategy in place, not a well-defined value proposition and hence confusion around the right enablers. So, there are multitude of pilots, which stresses the organizations without resulting in welldefined strategy to pursue technology enablement. Another mistake that organizations commit is to hire and depute modelling teams, which soon get frustrated with

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the lack of alignment and acceptance and end up leaving. While there is no clear way that can be suggested to service providers, my recommendation would be to first assess the ability and willingness of the organization to change and transform. Once established, a small “proof of concept” study is a good start. But once POC is successful, then scaling it up is essential and not to fall into the trap of another POC. Secondly, another parallel track should be to ensure how the capability will be either embedded in the organization or outsourced. Net, a full plan should be decided first before entering into a POC and then get stuck.

Anshuj Rathi: There are quite a few challenges industry has been facing for several decades like complexity of solution, heavy cost and long ROI, long implementation time frame, skilled user base to manage several of more complex solution like demand / supply planning. Internet availability in some of the remote area like mines, project sites add problems to solution adoption. Service providers need to focus on solutions, which are easy to implement, provide faster return on investment, ease of scaling up and down based on actual requirement. These solutions should have some capability to work in offline mode for at least

COVER STORY sometimes when internet connectivity is available.

Nikhil S Gurjar: Cost prudence is going to be a top concern or priority for most companies. This is true for any company. However, this would also mean a huge challenge when it comes to adoption. And late adoption would mean less optimal levels of operations as the regulatory environment will keep tightening the modes of operation. The hesitance to allocate budgets would also be due to the lack of a ready proof of concept that the buying organizations often ask for. To top it, surges in demands due to massive bullwhips created by the lockdown lifting and imposing, would force organizations to push technology to the backburners for sometime. Lastly, lack of knowledge of how new technologies work would also hurt companies at such times. Service providers have to work hard to get into the circle of trust with organizations. Most are strategic partners, but few are in the ‘circle-of-trust’ when it comes to strategic direction. In such conditions, simulation-based proofs and offline development of technologies using a partnership approach is required. Additionally, if companies are not involving their service providers using the right tools and ecosystems, they are already losing out on opportunity. And this could have serious repercussions.

Dharmesh Rathod: Technology adoption has never been an easy show. In fact, long way to go, the journey of technology adoption through

COVER STORY Digitalization journey has started few years back and sufficiently I believe will drive itself for few years more as far as coverage is concerned. This implies brown-field landscapes with existing old technologies, primitive SOPs, integration with other human/technological functions pose various challenges during the technology adoption journey. Service providers, I understand, by now have their right sense of adoption and are taking leverage of large contractor/vendor community ready to help attain their technology adoption goals. However, SP's native challenges such as budget, adoption drive, cultural shift, etc., are the ones that I assume matter more. An organized engagement of technology adoption with well thought and outcome-oriented project management can ensure SP’s’ achieving all these goals.

Sanjay Desai: While the benefits of embracing new technology in business are well known, there is a still a large proportion of organizations, which are unsure and hence lagging in technology adoption. A large proportion of these organizations belong to MSMEs. Captured are few major reasons below: a. Must have or nice to have: Most organizations fail to read correctly if a technology is “nice” to have or is a “must” have. A must have technology will help your business to stay ahead in a competitive market. b. New technology can be complex: New technology must be integrated into

current business to realize the full potential and the cost as well. If, new technology is not implemented correctly, then chances are high that it would go waste and fail to offer competitive edge. c. Fear of unknown: This is possibly the biggest reason that many organizations are averse to implement new technology. Usually organizations hire a consultant to get over this fear factor. d. Lack of skills within the organization: If an organization lacks necessary skills to decipher and implement technology correctly then it becomes even more difficult and most likely the efforts of implementation results into failure. Fear of failure is a huge factor in leadership decision making. e. Fear of Obsolescence: Many organizations usually fear that in today’s world, technology can be a moving sand, meaning it evolves very quickly. Within a short span, existing technology can be replaced by much advanced & more efficient technology. This is a huge cost to the company. f. Previous bad experience: Surprising but a true phenomenon is historical experience from a previous technology implementation, which was a failure and the organizations were ripped off very badly.

Requirements of customers from their service providers in deploying technology solutions Traditionally, companies ask for ‘Proven Track Record’ and ‘Proof of Concept’ from their service providers. Customers need to de-risk themselves using advanced methods like simulation-based assessments. This would ensure adequate reliability and good deployments. What is important from service providers is flexible pricing, quick deployment, high uptime, easy adaptation and strategic extensions of service offerings at regular intervals. Vivek Sarbhai: There are three main requirements: Clear Value proposition and link to competitive advantage: This will help in establishing an organization wide acceptance to the change and collaboration needed to transform. Importantly, it will help in identifying where to first begin and clear end state. It will help in ensuring the right enablers right through the path of this change journey. Cost model – fixed or variable: I would recommend that service providers need to show flexibility here. While they should protect their base level cost, the profits should get somehow linked to value or gain that gets created and generated over period of time. The more variable the component, more likely are the chances of success. Sustainability and embedding: It is very important to engage the organizations on the plan of embedding and sustaining the capability. Who will do what, and what will be roles and responsibilities of the service provider and customer. What is the level of governance needed and most importantly how continuous evolution needs to happen is very important.

Anshuj Rathi: Most of the customers are looking for solutions which are fast to implement, easy to maintain and reduce capital investment. The solution should use latest technology

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so that these can be assessed anywhere anytime but still be very secure. Customers are also looking for solutions, which support Industry 4.0 targets like connected supply chain, digital twins. Every industry has different requirements such as banking industry is looking for faster, secure online transactions for their customers, whereas Industrial manufacturer may look for predictive maintenance for better plant utilization. Besides product functionality, customer will look for better support and delayed payment from service providers to meet the current situation.

Nikhil S Gurjar: Traditionally, companies ask for ‘Proven Track Record’ and ‘Proof of Concept’ from their service providers. Often times, the proven track record is less reliable as solutions require significant modifications before they can be applied. Moreover, innovative solutions are, often times, untested in production environments. The proof of concept using pilots is an expensive proposition in itself. Hence, both these would delay their implementation without significantly adding value. Customers need to de-risk themselves using advanced methods like simulation-based assessments. This would ensure adequate reliability and good deployments. What’s important from service providers is flexible pricing, quick deployment, high uptime, easy adaptation and strategic extensions of service offerings at regular intervals.

Dharmesh Rathod: Value of services, ease of usage, comprehensive coverage instead of partial service deliverable and finally most important, privacy of their data/information – Customers in today's times are well adverse with these expectations from their service providers and these can be certainly achieved through technology solutions. Sanjay Desai: Since last 10 years, the landscape of third-party logistics (3PL) has changed in many ways and is poised to grow and modify with emerging ‘smart’ working practices and mobile technologies. Global organizations have realized that logistics service providers can improve their bottom line by allowing them to focus on their own core competencies. 3PLs offer a lot of benefits to mainstream organizations like flexibility in the network, value added service in warehouse, kitting, labelling, boxing, and postponement strategies. With the rising complexity and competition to serve customers, client organizations’ expectations from 3PL are also growing with time. Let us cover a few major expectations below: 1. Form long term partnerships, which will motivate 3PL service providers to invest large capital in technology as well as other fulfilment applications & efficiencies. Generally, the clients are willing to pay additional costs if these are embedded in monthly service Invoice over a longer period.

COVER STORY 2. Bring in those skill sets and efficiencies that the principle client has a clear lack. Expectation is that the 3PL service provider will complement the client’s capabilities, which will allow the client to build solutions for their own customers. 3. Invest in advanced technologies like Robotics, Autonomous Vehicles, Drone deliveries, AR/VR in their fulfilment centres, which will enhance fulfilment service performance to the customers at large. For example, transportation management systems type software solutions will lower inefficiency and costs while saving valuable time in preparing for deliveries and logistics services.

COVER STORY 4. Make use of Big Data analytics to help them understand shipping alternatives, assessments of trade lanes & origin-destination pairing in terms of cost and service scenarios. With increased transparency, clients will be able to better serve seasonal trends efficiently and meet flexible operation demands. Sharing of such information will help item track and tracing throughout the supply chain. 5. Operate in more sustainable manner adhering to environment friendly greenhouse emission norms and reduce carbon emission. This is one of the most stringent requirements that clients want to synergize with their own efforts. This is the norm today as it has huge impact on global warming & carbon emissions laws.

6. Participate in “Sharing of Economy” in selective manner and provide low-cost personalized service with real-time visibility into fulfilment deliveries to customers. 3PLs will employ holistic approaches for their supply chains and emphasize external visibility by collaborating with manufacturers on production schedules and delivery plans. 7. Seamless co-ordination in “Last Mile Delivery”: Last mile delivery performance contributes a big deal to end user satisfaction since the end users will judge a company based on its last mile delivery efforts. It is indeed the most essential part of the supply chain besides being the most challenging and cost / value additive.

Harnessing the tech muscle Technology adoption and their value within any supply chain company generally is geared by uplift shift within its automation landscape, end to end integration with seamless and flawless results, cost effective budgets enriched by higher ROI. When all these factors achieve their end goals, the real power of technology can be felt by supply chain businesses. Vivek Sarbhai: Organizations need to first change their strategy and insert technology enablement as an intrinsic part of the strategy. To me, three words are truly relevant to be included that reflect the insertion of technology mindset. They are “Interconnected, Asset Lite and Intelligent”. Interconnected reflects the desire to make products / services as accessible, asset lite reflects the plethora of choices available without capex and intelligent reflects the willingness to step up AI/ML in data and analytics driven business decision making. Secondly, it is important to identify where is the maximum value – is it in the front end i.e. commercial and marketing or middle of the organization – procurement, manufacturing and logistics or back end – Financial analysis, talent analytics, shared services, etc. Lastly, it is important to visualize the capability needed in an intertwined

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triangle of Business, Analytics and Technology. There needs to be the creation of Centre of Excellence team comprising of Business Translator (intersection of Business skills and Analytical skills), Data Architect (intersection of Technology and Business skills) and Data Scientist (intersection of Analytics and Technology). Together these three would drive the technology enablement under a strong sponsorship of business leadership teams.

Anshuj Rathi: Industry should start looking for solutions, which are agile, quick to implement and easy to reconfigure in case of changes. These solutions should quickly provide analytics on ‘what if’ scenarios. Industry must quickly look for solutions, which help it to achieve Industry 4.0 objective. It should try to adopt new technologies like Internet of Things, Blockchain, Machine Learning, Artificial Intelligence

& Data Science to complement their supply chain solution. Industry needs to start looking for solution, which needs minimal human intervention and needs to reduce human interaction for every event.

Nikhil S Gurjar: In the rapidly changing SCM landscape, static roadmaps extending over long horizons of 3-5 years is now history. One is going to see an increase in integrated systems that are fluid, in the sense, they go with the flow and easily embrace technology. Having extendable solutions is the key; whereby systems would need to gear up for easy enhancement or new functionality integration. Modularization and the ability to harness data would be vital, as a wide range of solutions would be used in the interplay at each stage. The other key area is to ensure the right choice of architecture and the solution

so as to integrate agility and the ability to enhance their systems. Company executives need to continuously explore value adding opportunities from their existing systems and from their buyer landscape.

Dharmesh Rathod: Technology adoption and their value within any supply chain company generally is geared by uplift shift within its automation landscape, end to end integration with seamless and flawless results, cost effective budgets enriched by higher ROI. When all these factors achieve their end goals, the real power of technology can be felt by supply chain businesses. Sanjay Desai: Digital technologies are redefining and reinventing new trends and models in consumerism. The pace of change is accelerating, and industry leaders are imbibing digital DNA to drive exciting new business models, which have been truly transformational. In this environment, an interesting shift has happened. In recent years, traditionally product-based companies are shifting or expanding in their use of service-based revenue models and the service-based organizations are selling their service and skills. With the fundamental shift in the role of a CSCO, supply chains need to focus on 3Ps – People, Platform and Process. They need to make use of technology to build robust processes, which will enhance their performance further. Let us address major efficiencies that supply chain leaders need to exploit fully: 1. Digital Innovation: Supply Chain leaders should develop a “dual” approach to innovation. They should use innovative capabilities to drive efficiency & optimization in supply chain ecosystem to drive cost out and improve quality and customer experience. 2. Use Case, agile approach: It is important to adopt an incrementally agile, case study-based approach, whereby using case studies within or outside the industry will complement the creative innovations. It is critical to bring in more contextual & impactful use cases for prototype study and learnings.

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3. Increased elasticity & customer centricity: Customer centricity helps to create global business models, which drives supply chains to be flexible and elastic. Great organizations leverage use of technology like IoT, Big Data coupled with AI to build predictive and prescriptive scenarios in demand and supply management as well as enable efficient insights into quality and manufacturing yield management. 4. Improved visibility in end to end supply chain: Cloud-based tracking and shipping technology paired with RFID technology and IoT help in enhancing the visibility of demand and supply in Tier II and even Tier III supply network / and demand channels. 5. Improved demand supply forecasting using Machine Learning: Many F100 FMCG companies have started to use machine learning capabilities to realize significant improvement in their working capital. Machine learning has the capability to provide predictive & prescriptive analysis in relation to variations in demand forecast in advance, providing valuable decision support for supply chain leaders. 6. Demand driven planning model: Using AI coupled with Big Data can create right predictions for risks such as suppliers’ delays, political instability, natural calamities, etc. Companies can adjust their manufacturing, pricing, and promotions to shape the changes in demand and supply accordingly. 7. DLT (Distributed Ledger) or Blockchain: Blockchains are public and private ledgers with a decentralized data structure. It is an extremely efficient way of distributing the process of verification for large applications e.g. from financial transactions to logging and shipping information. Blockchain can track supply chain flow from start to finish including security, visibility, transparency in an encrypted manner.

8. Site based intelligent demand sensing: Demand sensing is a next generation forecasting methodology that greatly improves current levels of forecasting by employing a set of mathematical techniques, which are designed to analyze daily demand information, thereby creating a much more accurate forecast of near-term demand based on the current realities of consumer sell through. This is lot different than traditional statistical forecast method using smoothen or MAD into future forecast. 9. Advanced weighing technology: Modern technology includes the ingenious onboard truck scales, which allow for seamless operations when access to platform scales is not available. They enhance productivity by ensuring a truck carries the maximum weight right from the point of loading while also saving time and money. 10. Control Tower structure: A control tower is a hub for visibility, decision-making, and action, based on real-time analytics. A control tower allows you to focus on transparency, get visibility into the order to reduce the risk of potential issues as well as gain data on how to better manage orders, pre-alerts, and customer communication. 11. Drone deliveries: Drones have terrific uses across multiple sectors from delivering parcels, advertising, cinematography, site surveying, mining, humanitarian projects, environmental projects, and other areas. Besides the Pharmaceutical industry, other industries which will use drone as vehicle for last mile delivery to customers are agriculture, construction, exploration, etc. 12. Automated guided vehicles (AGV): Most 3PL operators agree that the controlled environment of large warehouses are perfect locations to bring in automated guided vehicles for loading / unloading operations. AGVs were introduced in Netherlands by Maritime logistics in Rotterdam Port. In the last 5 years, there has been significant demand from open market.

COVER STORY

Transforming the shape of things to come for the small players Tech adoption is not always profitable. In fact, one needs to ensure that adoption is for the right reasons. Therefore, those who would have a calibrated plan would succeed, others might burn cash and even perish. Smaller players who use tech to directly connect with end-users or consumers would certainly have an edge over the others.

Vivek Sarbhai: Small players have the biggest opportunity to compete with large players. The advantage of scale enjoyed by large companies is no more that significant due to higher accessibility, lower IT cost and availability of shared networks, resulting in overall lower costs. There are now start-ups that are offering data intelligence services in the field of procurement, commercial spend and that again will help the small companies. Small companies are now going to be constrained mainly by their own mindset and courage to run an ambitious enterprise.

Anshuj Rathi: Cloud technologies make level playing field for big and small players looking for technology adoption. Smaller companies don’t need to incur massive capital expenditure to benefit from latest technologies. For most of cloud providers, every customer is very important, and they understand the value of every customer. In the times when nothing is certain, a decent size company can suddenly become big and household name like Zoom to make them very attractive customer for cloud technology providers.

Dharmesh Rathod: Thanks to the start-up industry, most of the valueadded factors do not get restricted to big enterprises, rather they are very much in reach of small players as well. Cloud Computing has made them available to be utilized from any corner of the world. In fact, for small players, majority of them can afford greenfield implementation of technology due to lesser existing investments and thus less adoption challenges. Sanjay Desai: It is a known fact that for small players, the first initiative to digitalize a part of the business is the most challenging, but once this has been accomplished, incremental improvements come more naturally and easily thereafter. The first step

to support MSMEs’ digitalization is to deliver proper information on digital technologies, level of effort and % success in implementation of these technologies including benefits of these technologies to MSMEs. To provide up-to-date and varied content, the governments’ best approach would be to partner with digital platformers. They are in direct contact with many MSMEs and they are knowledgeable about types of MSMEs that have successfully utilized their services to digitalize businesses operations. Another thought process is to provide financial support to MSMEs that are considering embracing digital technologies, can be an effective way to encourage them to move forward if it is properly designed.

Trends set to rule the supply chain domain Advanced Edge Computing, Machine Learning/Artificial Intelligence, Cognitive computing, IOT/Smart Technologies and Cyber Security ensuring secured end to end solution are the major upcoming trends that supply chain domain is in fact embracing now and long way to go for coming times. Vivek Sarbhai: There will be majorly two trends – there will be an enhanced adoption of technology to prepare for upcoming contactless economy. The execution domain, management of people in the execution processes will be the target of automation. Digital payments will get more and more accepted and that will provide another fillip to this trend. The second trend would be use of technology in data and analytics. Eventually, organizations will tend to outsource more and more and stick to finetune and sharpen their own core competence. Another trend that has started to emerge and will gain momentum is the development of shared networks. Pooling will become easier and will gain importance.

Anshuj Rathi: Industry will keep adopting digital supply chains at faster pace. Supply chain will be dominated by use of Artificial Intelligence, Internet of Things, Blockchain and Robotics process automation. Industry will heavily rely on machine learning and analytics to understand future predictions. Increasing use of 3D printing in supply chain is becoming evident in several industries where customer requirements are highly customized. We will see mashing of data from customer ERP, Planning, Warehousing, Transportation systems with real time sensor data to get better operational efficiency & machine utilization.

Nikhil S Gurjar: Tech adoption is not

Nikhil S Gurjar: Contactless

always profitable. In fact, one needs to ensure that adoption is for the right reasons. Therefore, those who would have a calibrated plan would succeed, others might burn cash and even perish. Smaller players who use tech to directly connect with end-users or consumers would certainly have an edge over the others.

manufacturing and contactless supply chains would hold the key. Distribution challenges would prove vital for most retail organizations. The reach to the end customer will need to be focused on. More and more companies will integrate with e-commerce companies or set up their own e-commerce Apps. This would be extremely important

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for survival. It’s going to be a digital world, with a greater centering around the customer. And digitally seamless supply chains would be the winning formula for most. Some technological shifts would also be on the anvil. For instance, automotive companies making ventilators, cosmetic and chemical companies making sanitizers, building automation companies making thermal scanners, etc., all mean that their core businesses have shifted from mere products to capabilities. This would be the degree of automation required in the near future.

Sanjay Desai: Let us see some of the newer supply chain trends that will shape the way for new normal:  Digital Twins: A digital twin is an end-to-end virtual model of the physical processes and/or objects that make up your supply chain. Digital twins can stretch across multiple companies to include suppliers, resellers, and any other external providers.  Increased importance to reduce wastage and cost control: Disruptions of all kinds are becoming the new normal like trade wars, climate change & pandemics added to that are slow economic growth making life very difficult. In response, smart leaders are scouring every corner of the business for cost savings and strong focus on disposing-off obsolete assets.  High focus on “value chain” instead of supply chain: Effectively, supply chain is the business; it connects everything from customer demand through raw materials and manufacturing to fulfilment. However, many great F500

companies are shifting from seeing supply chain as a linear process (raw materials -> manufacturing -> inventory -> customer order -> fulfilment) to a web of relationships between the customer, multiple internal departments, and even any external companies. The value chain (or value network) is a concept that’s been gaining more traction since last couple of years or so. Matured organizations look beyond their own enterprise to form partnerships / collaboration with their customers, suppliers, and vendors.  Green supply chain / circular economy: There has been a rising trend towards ethical sourcing, sustainable procurement, and sustainable logistics to control carbon emissions in the environment. Concerns over issues like climate change, conflict minerals, and labour slavery are forcing businesses to rethink their supply chains network strategy including their Tier II and Tier III suppliers.  Procurement as a function will transition: Procurement function is slowly transitioning into primary channel for finding new ways to create value from the global supply base, whether by streamlining new product development or outsourcing non-core functions. Key expectations from procurement functions are: o Prioritize value creation over price management o Supplier relationship management as a core competency o Transfer of innovative strategy for supply chain success o Align internal and external collaboration.

COVER STORY  Alternate revenue models will be on the rise: Many companies today handle their supply chain activities inhouse. Still, we may see more businesses adopting ‘Supply Chain as a Service’ {SaaS} business model by outsourcing activities like manufacturing, logistics, and inventory management. The new revenue models are gaining prominence with the use of Cloud are (PaaS) Platform as a Service and (IaaS) Infrastructure as a Service. These are alternate revenue models which allow companies to reduce

COVER STORY overhead spending by avoiding fixed costs in infrastructure, upgrades, and maintenance.  The rise of Elastic Logistics: Supply chains need to be flexible and responsive to market fluctuations as well. As a result, more businesses are adopting a flexible approach to logistics. “Elastic logistics” allows the supply chain to easily expand or shrink logistics capacities according to current market demands. Technologies such as artificial intelligence, machine learning allow

supply chains to adjust as needed with minimal disruptions in their fulfilment operation in Warehouse. Elastic logistics provides flexibility to many variables in the supply chain, including warehouse space usage, pick and pack schedule, carrier space, container usage, and route optimization.

Opportunities for service providers and customers Leverage solutions with comprehensive coverage and end to end integration without any hassles with existing technology – this is the baseline to be tapped for any service providers who depend on supply chain domain. Vivek Sarbhai: The opportunities are in driving synergies and synthesis around the theme of interconnection, asset lite and intelligence. It is very important for organizations to decide where they will focus and where they will enter into long term relationships with service providers who will use technology to sharpen their core competence. Technology enablement will be not just the responsibility of an organization but its partners as well. Creating this mesh of capability is what will eventually succeed.

Anshuj Rathi: There are massive opportunities for both service provider and customers as supply chains get redesigned due to pandemic. Countries may still depend on global supply chains for near future but will start building up supply chain, which will be resilient to these kinds of pandemics. Rather than depending on single source of supply, industry will work on alternative supply

chains and to a certain extend more local supply chains. This will provide new opportunities for service providers to meet new customers’ requirement.

Nikhil S Gurjar: There needs to be a growing partnership. Dedicated partners are required to ensure success. Many companies believe in diversifying their tech portfolios with a wide range or service providers. These operate well if the effect is largely localized and the costs or the margins are below 2% of their operational expenses. Anything above 2% would need a reasonable overhaul and a good teamwork with good contracting practices and trust building. It’s important for both companies and service providers to realize that they have to work on winwin paradigms that work on leveraging capabilities, pivoting profits using competence, transparent solutions and shared ownership. Many vertical integrations are likely to happen in the

next few quarters, if the partnerships don’t succeed in practice.

Sanjay Desai: The 3PL sector is rapidly changing and evolving into a major collaborative & service enhancing function by adapting to logistics demands of today’s business. At the core of this evolution is a realization by companies of the need to provide a service that adds real value to client’s business. The core services provided by 3PL companies include warehousing, transportation, orders fulfilment and track tracing last mile. However, high impact third-party logistics companies are going beyond this traditional role to add extra value to their services aimed at providing a service that far exceeds clients’ expectations.

THE LAST WORD On the changing dynamics, Sanjay Desai concludes, “New technologies should never drive the adoption of a new business model or strategy. It is just the opposite; the business strategy must drive the adoption of new technologies. Instead of racing to adopt the latest technology, businesses first need to adopt a top-down approach that looks at the business model first, and then acquires the capabilities, skillsets and people needed to create that change. In doing so, businesses greatly reduce the risk of making heavy investments in technology solutions that later need to be completely rebuilt. It’s taking a step back to look at the “WHY” and “HOW”, instead of just the “WHAT.” A company might arguably lose ground by waiting to adopt technology, but a slightly cautious approach reduces the risk until it becomes more acceptable. The trick is not to be left too far behind!!!

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LEADERSHIP

RISE OF CONVENIENCE FOOD “The most important aspect that entrepreneurs are focused on is to evolve their businesses with the rapidly changing landscape, triggered by the disruptions from COVID. Given the need for complete digitization, we must look towards more collaborative, solution-oriented approach to the challenges we are facing. During these trying times, it is critical to keep your teams motivated to not lose hope and rise to this challenge,” emphasizes Dr. Varun Chaudhary, Executive Director, CG Corp Global.

How are you prepared to break the Covid chain and sustain the business? The unprecedented spread of COVID 19 saw governments declaring a lockdown to contain the further spread of the virus across the world. Being a provider of essential goods, some FMCG brands, specially the packaged food segment,

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took the paramount responsibility of ensuring continuity of supply of products through the different phases of lockdown in India. The sector has clocked the most phenomenal journey through these different phases and has now started witnessing a gradual but steady movement to almost normalcy.

During the initial phase when our operations almost came to a standstill, our business priorities were very clearly defined – Safety of our employees and ensuring our products reach the people of this nation. Like all other consumer giants, we implemented ‘Work from Home’ for roles that do not require employees to be physically

present at their workplace and have been driving work digitally. As for our manufacturing workforce, we deployed stringent changes in standard operating procedures. Thermal scanning has been installed in each of our factories. Awareness campaigns are being driven to sensitize our employees as all employees have been trained to adapt the required measures such as wearing masks, social distancing, regular hygiene, and sanitization. Given that the FMCG sector is labor intensive, labor availability was a major challenge in addition to the hampered distribution & supply chain. With the restriction in movement, we were unable to increase our capacity beyond 20% capacity utilization and were in constant touch with concerned authorities in different states to push for required permission of movement for our products. During that point in time, we were strategizing solutions to the best of our ability for each of the 10 manufacturing lines we have in India and were utilizing our stocks to ensure we can meet the market demands. The relaxations announced by the government on 20th April provided support to address the various challenges being previously faced. Companies gradually resumed manufacturing operations as currently CG Foods has been able to increase the capacity utilization to 60-65%. Most FMCG brands have swiftly studied the external and internal environment to deploy innovative strategies aligned to the new reality. New trends are being initiated to serve the changing consumer needs and operational challenges. A prominent example would be exploring new ways of distribution via non-traditional groceries e-commerce platforms, who in turn have innovated to ensure no-contact delivery to consumers at their doorstep. With good demand for consumer staples, the FMCG business is gradually coming back to normal. The sector is focused on intently studying the changing consumer behavior, look at long-term sustainable business strategies and turn this crisis around into an opportunity.

and the consumer behavior, various changes in the food industry are visibly setting in. I believe that the new habits formed now will endure beyond crisis, permanently changing the lens through which consumers view products and brands. The convenience foods industry will come out stronger in the post Covid era. Noodles as a market has been growing in double digits and we expect it to continue the same, if not more. It is expected that the penetration of the category will increase faster across stratums and we would like to play a key role in the same. Certain other trends that will dominate the industry include a rise in conscious consumption, whereby consumers will be more mindful of the products they are investing in with an ever-increasing focus on health. Furthermore, there will be higher demand for affordable convenience foods in the FMCG segment. Also, with more awareness and importance given to hygiene and safety, branding will enhance customer re-assurance and build loyalty. To manage isolation and ensure safety, consumers are moving to digital platforms to shop and connect, and they will continue doing so. Moving forward, we will also see an increase in virtual workforces as it will help companies reduce their expenditure while allowing people to work from the convenience of their homes.

Besides FMCG, you have a wide & varied portfolio. How did it all start? How does such a diversified portfolio shield you amid crisis or is it otherwise? CG Foods is the FMCG vertical of CG Corp Global. WAI WAI was first introduced in India via exports in the 1990s. We started as a packet of Ready to Eat noodles loved by boarders and travelers which can be eaten raw and went on to making our way into the homes of more than 48 countries across the globe. Wai Wai travelled through the hearts and minds of college-going students, and its growth has been enhanced through word of mouth and its unique flavor. We opened our first international noodle operation line in India in 2006 with a unit in Sikkim, which established a convenient supply network for the region. Wai Wai became an instant and massive success in North East India. Along with factories in our foothold North East India market (in Sikkim, Guwahati, Silchar), we have also set up units in Rudrapur (Uttarakhand), Chittoor (Andhra Pradesh) and Purnea (Bihar). We recently expanded our Silchar production line and set up a new factory in Rajasthan. Prior to the pandemic, all our factories operated at 95% capacity, which is a testimony of our India growth story. Already having established ourselves as a market leader in most of the North East regions,

How do you view the scenario in the post-Covid era? With the current pandemic completely changing both the business ecosystems

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LEADERSHIP

LEADERSHIP at home, which will lead to an increase in the demand for convenience food. However, there will be a possible fatigue factor in the existing product portfolio available in the market, which will lead to the need to innovate variants, flavors, and new products. To ensure this demand is met without having the luxury of moving out in the lockdown will be a challenge. Products with a diverse range are likely to gain from this shift in consumer behavior. We have a large portfolio of noodles under the CG Foods brand in India, which caters to the diverse taste preferences of our consumers across regions.

Even before the pandemic, our international business approach has been ‘Glocalization’, which means to think global and act local. The spread of the pandemic has more so given rise to a growing love for local products. This shift in consumer behavior is reflected both in the products they are buying and the way they are shopping. Also, with safety becoming the new luxury, home grown products instead of imported products is the logical choice dominating the market. we are now focusing on expansion in Southern and Western India to increase our market penetration. Today, we have manufacturing plants based in Nepal, India, Serbia, Kazakhstan and Bangladesh and own 3% of the global market share in the noodle segment as we work towards becoming a leader in the segment. CG Food expansion and global growth have been continued by CAGR 12%. CG Food Nepal is one of the largest Noodle Production Centre in the South East Asia Region. Currently, CG foods Nepal portfolio consists of more than 20 flavors of noodles, extruded snacks, potato chips, fried snacks, chocolate enrobed wafer, beer, juice, bottled water

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and cigarette. Having a diverse FMCG portfolio is definitely an added advantage during this pandemic, given we have the flexibility to focus on products that are more in demand and distribute the revenues to sustain our other business.

Where do you think will be the key challenges and how will companies tackle them? Apart from the logistical challenges faced by the FMCG sector collectively, the major shift in the consumer behavior is a critical change that needs to be strategically dealt with. Eating out will be almost non-existent for a while at-least. This will mean a rise in eating

Operating in international borders, what are the inherent challenges you see and how do you manage them? Having manufacturing units established in multiple countries across the world is challenging in times of COVID. Managing our internal processes within the factory is not an issue given we are a mature company with predefined manufacturing protocols. The challenge in this regard is that every country has deployed different set of rules for businesses, to mitigate the spread of the pandemic. For example, in Serbia it is relatively easy to ensure continuity given they never declared a complete lockdown. Hence, in every country, the set of challenges we face for raw material procurement, labor availability and logistics is different given rise to varying impacts. We are strategizing ways to overcome the issues on a case to case basis while adopting to the changing circumstances in lieu of government directives. Our focus is on optimizing the production and distribution.

What has been your distribution strategy and how will it change now? The food supply chain is a complex ecosystem, which requires the coordinated functioning of various elements such as the raw material suppliers, producers, transportation, storage, distribution, etc. With the unprecedented spread of COVID 19 and the stern measures being taken to curb the spread, there are innumerable ways in which this ecosystem is getting impacted. Logistical challenges are making

The new age entrepreneurs will need to be prepared to change modules overnight. In fact, I believe, opportunities to capitalize on the rampant disruption are going to peak, whereby start-ups are going to be flooded with ideas as they lead the way. However, they will need to be agile and open to new business module evolutions. Another important aspect that needs to be focused on is brand building during this period – this is the ideal time to connect with consumers with relatable online content and offerings. This approach will go a long way in building consumer trust, impacting their purchasing behavior and thereby building a solid brand story. We are faced with a crisis that has no blueprint that will help us navigate our way through. Today, the new age entrepreneurs and seasoned businessmen as well need to adopt flexibility, resilience and courage to work together across all businesses and make this our finest hour. life difficult for most FMCG players in terms of distribution. Having said that, the situation in last 15 days is far better than the previous 45 - 50 days of the lockdown. Transportation is available, though costlier. Even within the city, there were roadblocks, restrictions on movement, grocers shop timings, etc., which is easing off quite a bit as we come to the end of the 4th lockdown period and move towards staggered phase wise lifting of the lockdown. We, as have many others, taken the route to e-commerce. It’s a very small part of the FMCG business currently. These channels have typically been small for us till now, but we see a big opportunity in the same in the coming months/years. Amazon and Flipkart have also joined the grocery part of the business in a more serious way. FMCG companies continue to grapple with logistical challenges as we try to meet with the market demands and resume supply of goods. There are no shortcuts here. Every factory location had its own set of challenges, which commonly involves labor availability and coordination/permissions from the local authorities. We have continually been engaging with the local authorities with lengthy internal communications to address our challenges and the situation has improved now.

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What are crucial learnings that you have gained during such trying times? Having a debt free organization has been the biggest blessing for us as I believe that debt free companies will come out of this crisis better. This pandemic has forced us to re-look at the cost structures more closely. A lot of strategizing is being dedicated on how to manage the costs more efficiently. That being said, the strength of every organization is its employee force and a crisis does tend to bring people together. Our teams have come together and displayed a sense of urgency in responding to every crisis – be it at the factories, or logistics or sales. I am so proud of the way my teams have supported each other as they unite and take complete ownership to manage the situation on an hour to hour basis. There was a strong ‘can do’ spirit and bias for action. Also, the lockdown across countries forced companies to adapt to a new method of working, which is going digital. As the world has discovered over the past few months, this method has turned out to be an effective way of operating without having to travel across countries for business.

What are the aspects that entrepreneurs need to be cautious

about? The most important aspect that entrepreneurs are focused on is to evolve their businesses with the rapidly changing landscape, triggered by the disruptions from COVID. Given the need for complete digitization, we must look towards more collaborative, solutionoriented approach to the challenges we are facing. During these trying times, it is critical to keep your teams motivated to not lose hope and rise to this challenge. Also, as the governments are gradually increasing flexibility and we come to the realization that we need to live with COVID to sustain the economic machinery, we must, as business leaders, be extremely cautious of the safety protocols deployed in our companies. Also, we must focus on studying our environment to understand the changes that are underway in our employees, government legislation, customers, and business ecosystem. Our approach must be aligned to these fastmoving changes to sustain and ensure business continuity.

What would be your advice to new age entrepreneurs who are worried about their future in such trying times? The new age entrepreneurs will need to be prepared to change modules overnight. In fact, I believe,

LEADERSHIP these lines, there is a fond saying that resonates with my sales teams ‘Anokha aur best, WAI WAI hai India ka taste’.

How do you foresee changes in the way supply chains are being operated?

opportunities to capitalize on the rampant disruption are going to peak, whereby start-ups are going to be flooded with ideas as they lead the way. However, they will need to be agile and open to new business module evolutions. Another important aspect that needs to be focused on is brand building during this period – this is the ideal time to connect with consumers with relatable online content and offerings. This approach will go a long way in building consumer trust, impacting their purchasing behavior and thereby building a solid brand story. We are faced with a crisis that has no blueprint that will help us navigate our way through. Today, the new age entrepreneurs and seasoned businessmen as well need to adopt flexibility, resilience and courage to work together across all businesses and make this our finest hour.

Earlier we used to talk about globalization of businesses. Looking at the current scenario, companies are toiling with the idea of strong localization. What are your thoughts on this? Even before the pandemic, our

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international business approach has been ‘Glocalization’, which means to think global and act local. The spread of the pandemic has more so given rise to a growing love for local products. This shift in consumer behavior is reflected both in the products they are buying and the way they are shopping. Also, with safety becoming the new luxury, home grown products instead of imported products is the logical choice dominating the market. India, for many foreign business groups, is no less than a continent in itself with the diverse culture, complex regional preferences, climatic conditions and varied palate offerings. In this regard, CG Foods India has a very localized portfolio, whereby our flavors and offerings are customized in accordance to the preferences of a given market/region. Also, with the hon’ble PM Narendra Modi, recently having addressed the nation and encouraging increased consumption of locally manufactured products, CG Foods, as a brand, is fully aligned to the ‘Make in India’ initiative. We have a strong manufacturing footprint of 7 plants strategically spread from North to South India to cater to the local markets. On

FMCG companies continue battling supply constrains along with the struggle to meet with market demand. With our traditional supply chains being hampered, we are breaking away from the traditional routes and looking at new strategies to ensure continued supply. CG Foods is deploying new strategies to ensure uninterrupted supply of products to our consumers such as collaboration with e-commerce platforms. E-commerce platforms are emerging as a solution to directly service consumers without making them step out of homes, thereby complying with the rules of lockdown. Recognizing this, CG Foods has partnered with popular online delivery service providers of the country namely Swiggy, Bigbasket & Flipkart, to make our products easily available. We have been able to supply about 60%-65% of the average in last few weeks and are growing better by the day.

Can you cite one of the most successful business stories that hold true in current times as well? In the current case scenario with COVID changing the way business ecosystem works, the brands that will clock successful stories are the ones that are quickly adapting to the changes and making themselves relevant. Given CG is collaborating with e-commerce platforms that are proving to be the most preferred medium for consumers, there are a few brands in this pace that are truly innovating their business approach. For example, DMart has started doorstep delivery across all their 200 stores in a noticeably short span of time. This step will help them ensure continuity of business given the uncertainty of when stores will see normalcy in consumers coming in physically to buy goods at a store. Furthermore, another name that has impressively created a strong brand story for itself is Dunzo. The delivery App that specializes in pick up and drops has quickly adapted to the situation and started digital brand stores.

FEATURE

4 Point Agenda for the

POST-COVID ERA Time has come for the global economies to thoroughly relook at their supply chains, which will help them tide over unprecedented times like these in a more resilient manner. The 4 Point Action Plan by CBRE Global Research team is your quick guide to revival and survival in the Post-Covid Era.

UPPLY chain disruptions historically arose on the supply or demand side but tended to be relatively short lived and were generally confined to individual companies, industries and sub markets, thereby creating supportive conditions for a quick rebound from any short term shocks that may have occurred. However, the deep and prolonged disruption caused by the COVID 19 pandemic, which caused a simultaneous disruption in global supply and demand within the space of a few months has uncovered serious flaws in supply chain organizations and raised questions as to the viability of long accepted supply chain practices. This paradigm shift is prompting companies to review and transform their supply chain models as they attempt to recover from the current phase of the crisis while looking to mitigate the impact of similar shocks that may occur in future. This ViewPoint by CBRE identifies the main supply chain priorities and strategies for companies preparing to operate in a world in which the movement of goods and people will be fundamentally different to the previous norm. These include:

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EXPAND NETWORK RESILIENCY The severe disruption caused by COVID 19 has exposed the danger of overreliance on a single base of production. A PwC survey of CFOs published in May found that 51% of respondents identified developing alternate options for sourcing as their top planned change to supply chain strategy. At the same time, “re shoring” is already a key topic in boardrooms and governments with manufacturing and sourcing links to Asia. In May, Taiwan Semiconductor Manufacturing Co. (TSMC) announced plans to build a US$12 billion semiconductor production plant in Arizona in the US. Across key industries such as automotive, electronics, technology and consumer goods, nearly all supply chains can be traced to China, still the world’s dominant global manufacturer. While leading manufacturers and retailers with global visibility systems were made aware of initial Chinese supplier disruptions in the final months of 2019 enabling them to trigger the ramp up of secondary supplier sources and mitigate some of the impacts smaller firms with more regional and local suppliers and lacking the resources to invest in supplier visibility and resiliency were

unable to do so. With US-China trade conflict and rising labor costs already prompting many companies to move out of China in what has come to be known as a ‘China Plus One’ strategy, CBRE expects the pandemic to add impetus to plans to reduce supply chain dependency on China, and potentially any other single market. Brand owners’ and manufacturers’ shift out of China will form part of an overarching theme of a move away from centralized supply and towards greater diversification. Wistron a major supplier of smartphone parts expects its non-China production capacity to increase to 50% by 2021, more than double current levels. While it is still too early to identify the market beneficiaries of supply chain diversification, the growing focus on reorienting supply chains and diversifying manufacturing locations means that those countries that are already investing in new infrastructure and are more open to attracting industry will likely receive the lion’s share of relocations. Vietnam has already emerged as a popular destination. Samsung has shifted much of its smartphone production to Vietnam over the past

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FEATURE mile delivery, and several e commerce platforms utilizing neighborhood store networks for order collection. While millennials in Asia have displayed a stronger preference for the delivery of online orders to their offices compared to their European and American peers, the accelerated adoption of home working could potentially boost demand for home delivery across the region. This will influence last mile delivery network design and site selection and is also likely to necessitate a creative approach towards leveraging existing brick and mortar retail networks.

India offers low labor costs, improving infrastructure, Special Economic Zones (SEZs) offering duty free exports and other policies supportive of business attributes that have already secured significant investment in manufacturing facilities from Foxconn, amongst others.

decade and now manufactures 50% of its phones in the country. Other recent relocations include Taiwan’s Pegatron, which earlier this year announced plans to set up a US$150 million plant. The north of the country is a keenly sought-after location owing to its multimodal shipping channels via N ộ i Bài International Airport in Hanoi; Hai Phong Port; and road network linked to China. Other preferred locations include Thailand, already a regional automotive production hub. The Thai government is attempting to attract foreign investment in key manufacturing industries via the introduction of tax incentives and deductions along with measures to make it easier to do business. Nissan recently announced a THB 10 billion expansion of its production facilities in the country. India offers low labor costs, improving infrastructure, Special Economic Zones (SEZs) offering duty free exports and other policies supportive of business attributes that have already secured significant investment in manufacturing facilities from Foxconn, amongst others. Indonesia and the Philippines round out the list of potential sites. In the former, the government in May

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appointed PT Persero Wijayakusuma Industrial Estate (KIW) as the developer of the Brebes Industrial Estate (KIB) in Central Java, which has reportedly been earmarked to accommodate the relocation of US factories from China. Several Taiwanese textile and garment manufacturers including Eclat Textile one of Nike’s top suppliers recently confirmed plans to establish new plants in Indonesia. Although this focus on diversifying supply chains is already visible in selected industries particularly among technology firms, many of which decided some time ago that branching out from China centric production should be a strategic priority more will follow suit as part of a broader shift towards strengthening global network resiliency against future shocks. For most firms choosing to rebalance, the relocation process will be expensive and involve considerably more than uplifting a factory, since supply ecosystems and downstream fulfilment networks in China have evolved over a period of several decades. Ideally, companies must reorient supply chains, so they can withstand disruption and outperform the competition when such events occur, thereby ensuring their business can quickly adapt to, and even thrive on, disorder.

BOOST LOCAL INVENTORY One of the most instantaneous and visible impacts of the spread of COVID 19 has been the rapid depletion of inventory – a trend that has seen supermarket shelves left empty as consumers panic buy large quantities of daily necessities in anticipation of potential quarantine measures, and

automotive manufacturing plants forced to halt production due to a lack of intermediate parts and materials. This has highlighted the downside of supply chains reliant on just in time principles and the long established practice of maintaining lean inventory levels. In order to maintain sales as supply chains are reset, CBRE believes brands and manufacturers, especially those engaged in the production of necessities, may tend to store more stock and keep inventory closer to consumption points and service locations. Maintaining higher stock levels in country is set to generate more warehousing demand and will transform how companies store goods, plan infrastructure and serve their local customers. E-commerce adoption is expected to continue after the pandemic has been contained. The future may also see governments identify certain foodstuffs and medical supplies as strategic commodities and keep large quantities of these items in stock to ensure sustainable supply. This may lead to stronger demand for last mile logistics and warehousing space, especially in locations near consumers. Online marketplaces and other fulfilment businesses with immediate delivery requirements will need fulfilment centres in and around cities, particularly smaller warehouses able to accommodate numerous delivery vehicles in locations that can expedite the time required to get an order into the hands of the consumer. However, most major cities in Asia possess limited cost-effective urban infill real estate options to support the rapid growth in e-commerce

ADAPT TO THE NEW RETAIL LANDSCAPE

To maintain sales as supply chains are reset, brands and manufacturers, especially those engaged in the production of necessities, may tend to store more stock and keep inventory closer to consumption points and service locations. Maintaining higher stock levels in country is set to generate more warehousing demand and will transform how companies store goods, plan infrastructure and serve their local customers. home delivery particularly for goods that consumers expect to be delivered immediately. This may provide opportunities for property owners and investors to consider upgrading or redeveloping dated industrial facilities to improve efficiency. Although many cities in Asia suffer from a scarcity of industrial land, along with increasing restrictions and congestion, several markets have managed to organically develop solutions over time by utilizing a combination of big distribution centres outside major ring roads together with a larger number of smaller locations inside cities where orders can be subdivided

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for delivery by small vehicles such as motorbikes and runner vans. Leading examples include the rapid penetration of the Go Jek network and its competitors to serve the Greater Jakarta area and across Java with reduced delivery rates, even in the face of uneven road infrastructure, incessant traffic and persistent flooding. In Hong Kong, online grocery platform HKTVMall has utilized its delivery vans as mobile pick up stations as an ad hoc solution to the surge in orders. New distribution channels have emerged in India during the lockdown, with FMCG company ITC Ltd partnering with Domino’s Pizza and food delivery apps like Zomato for last

Although e-commerce was already seeing widespread use by regional consumers, the COVID 19 pandemic has accelerated adoption as social distancing and stay at home orders force people to go online to purchase daily necessities. More demographic groups that had not purchased products online before are now doing so regularly and have come to realize that e-commerce ordering and delivery is both convenient and safe. CBRE believes that even after the pandemic has been contained, a large volume of purchases will continue to be fulfilled by e commerce, particularly in countries where there is limited retail infrastructure. In some particularly underdeveloped markets, e-commerce may even overtake less efficient multitier distribution and brick & mortar retail networks. This may create delivery challenges and in some situations create demand for centralized pickup and delivery centres, of which some may be 24/7 and automated. Despite registering rapid growth in sales, many e-commerce platforms have struggled to keep up with the surge in orders due to labor shortages and inventory related bottlenecks. This situation has been compounded by the fact that many e-commerce fulfillment centres were designed to handle seasonal demand spikes and much lower volumes at other times. If further outbreaks occur, leading to the closure of part of or all affected markets, such facilities may struggle to keep up with demand. Although hiring more staff, introducing automation and taking

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While manpower was already a challenge when economies were booming, COVID 19 has heightened manufacturers’ and logistics providers’ concerns around labor supply. Health concerns have exposed labor as a risk in the warehouse whether people fall ill or call in sick for fear of potential disease transmission in the workplace. Automation is being viewed as a solution to these new labor risks, with flexible automation and robotics solutions capable of yielding significant benefits. on additional space may provide short term solutions, some operators appear to have succeeded in catering to surging demand by leveraging existing infrastructure such as using a designated area of a retail store to coordinate order delivery and collection and investing in software platforms or partnering with logistics teams to track stock and maintain good visibility of inventory, no matter where it is located or who owns it. Demand for food delivery has surged since the pandemic as people have been unable or hesitant to dine in. Occupier demand for cloud kitchens serving orders from online delivery apps has increased, leading to additional demand for industrial space. Recent years have already seen many landlords raise the proportion of F&B tenants in their portfolios as part of a broader shift towards “retailtainment” a trend expected to maintain momentum in the years ahead. From a supply chain perspective, restaurants especially quick serve outlets are far more demanding than other retail categories due to their almost daily requirements for fresh ingredients and multi-channel complexity linked to a physical location that serves dine in clients as well as a platform to serve a growing volume of home delivery and self pickup orders from the same location. A stronger emphasis on F&B as the focal point of shopping malls will necessitate far more efficient and resilient supply chains than those which have traditionally served larger format, static brick & mortar stores in other retail categories.

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LEVERAGE NEW AND LOW COST TECHNOLOGY While manpower was already a challenge when economies were booming, COVID 19 has heightened manufacturers’ and logistics providers’ concerns around labor supply. Health concerns have exposed labor as a risk in the warehouse whether people fall ill or call in sick for fear of potential disease transmission in the workplace. Automation is being viewed as a solution to these new labor risks, with flexible automation and robotics solutions capable of yielding significant benefits. For example, not only can companies keep operating even during severe labor shortages, they can also more closely and efficiently adhere to hygiene protocols when products are only handled by robots. Automation can also be used to scale capability and drive down cost per delivery. For logistics networks, this will have a big impact on the last mile, where automation will require fewer employees. CBRE expects flexible automation solutions and lean reconfigurable technology to gradually replace people, thereby ensuring remote and continual control over this aspect of supply chain operations. These requirements are likely to be integrated with and may in some cases replace many of the functions typically fulfilled by high cost storage systems like Automated Storage and Retrieval Systems (ASRS) and other legacy machinery, such as cross belt conveyors, still in widespread use. The latest solutions utilize robotics applications, Automatic Guided vehicles (AGVs) and Internet of Things (IoT) technology supported by cloud software to adapt to changing warehouse

configurations and product flows. These systems can be acquired at a fraction of the cost of those that require larger infrastructure and can be easily relocated or physically replicated in almost any market. Automation will also be adopted in last mile delivery. With COVID 19 spurring consumer demand for contactless last mile delivery, delivery by drones or AGVs may even emerge as a selling point for companies seeking to reassure shoppers that no human handled their order at any stage of the supply chain.

CONCLUSION COVID 19 has exposed the vulnerabilities in global supply chains and is challenging the conventional wisdom around many long established supply chain practices. Over reliance upon a single market is untenable, while maintaining lean inventory leaves companies exposed to sudden shocks. People only based solutions even those in markets with low labor costs are no longer viable in the medium to long term. Brands and manufacturers along with the developers that build the industrial and logistics infrastructure on the real estate to fulfil their requirements must act now to address these supply chain challenges. Those that do will possess a significant advantage as economic activity resumes and companies prepare to compete in the post pandemic world, ready to adapt and thrive with the next shock.

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Pandemic-proof

FULFILLMENT OPERATIONS

The silver lining of hope for recovery through the prevailing challenges lies in adopting digitalization and automation solutions. An ideal combination in this scenario would be to couple the scanty labor resources with automation. This will be a symbiotic partnership that will bring reliability, efficiency, and safety in operations. Even in the current situation, there are digitalization and automation solutions that can be easily implemented in no time, shares Rupesh Narkar, Director – Sales for Logistics Automation MNC.

COVID-19

caused a whirl wind globally and pushed the businesses worldwide into an unforeseen crisis. In a matter of weeks, the otherwise optimistic outlook and aggressive earnings guidance for 2020 by businesses were brought to almost a screeching halt. Situation is same on the investment inflows, which is worrying. As per the estimation by United Nations Conference on Trade and Development (UNCTAD), the COVID-19 outbreak could cause global FDI to shrink by 5%-15%, due to the downfall in manufacturing sector coupled with factory shutdown. The negative effects of COVID-19 on FDI investments are expected to be high in the energy, automotive and airlines industries.

THE COVID-19 IMPACT ON OPERATIONS, WAREHOUSING & FULFILLMENT As highlighted by Interact Analysis, different warehousing sectors are feeling the effects in different ways. General merchandizing, for example, is seeing a massive short-term spike in e-commerce demand. It is appearing that this demand is largely being unmet by retailers on account

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of social distancing restrictions. Crisis management and capital preservation is also leading these retailers to pause their capacity enhancement plans. An Accenture Report highlights that while in the short-term, supply disruption will reduce manufacturing and assembly capacity, plant reopening will be further delayed by lags in component supply. Travel bans will exacerbate workforce shortages, ultimately affecting the operations and fulfillment capacities of businesses. Due to the epidemics of COVID-19 across the globe, the manufacturers of the automobile, chemical, electronics, and aircraft are facing concerns regarding the availability of raw material. In the electronics sector, smartphones and consumer electronics companies have commenced a reduction in production operations and postponed the introduction of new products coupled with the COVID-19 outbreak, which in turn has interrupted the supply of components.

SURVIVAL & THRIVING OF TECH While almost all businesses were hampered by COVID-19, the e-commerce sector worldwide saw record growth numbers. Revenues, user

Rupesh Narkar is a seasoned professional with extensive experience in the field of logistics automation. He has a Master’s in Engineering Management (USA) with a bachelors in Mechanical Engineering (India). He is currently the Director of Sales for Logistics Automation MNC. His interest includes designing, selling and implementing logistics automation solutions throughout America. He has authored articles and spoken at events for logistics automation industry in USA.

additions, sales were growing rapidly. E-com businesses reported revenue numbers to the tune of entire quarter being achieved in a matter of weeks. For many customers, buying habits have already changed. Not just for the short term, but for long term too. Driven by the popularity, convenience and safety, more and more consumers will move to e-shopping platforms. Business are transforming their sales model to cater these new class of consumers, which is nurturing their growth and survival.

NEW NORMAL AND ITS CHALLENGES FOR BUSINESSES With E-commerce booming worldwide, online businesses are witnessing a large inflow of user additions. “Buy it online” is becoming the new normal. But growth for these businesses could not have come at a more inopportune time. Most of them, still in the nascent stage or establishing operationally, are now experiencing massive challenges to fulfill these orders, thanks to the absence of labor, lockdowns, and resource challenges. With reputation at stake in a cutthroat competitive environment, they are experiencing downpour of issues on several fronts. It is a perfect doubleedged sword that brought massive

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growth on one hand and dauting fulfilment challenges on the other, that too at unprecedented levels. The silver lining though is this COVID situation exposing issues and vulnerabilities by poking holes in their operations strategy, early in the game. They now have an excellent opportunity to learn, improve and build resilient, future ready operational setup that will not only recover from the pandemics but, also survive and sustain next challenges that disruptions like COVID might throw at them. Hi-tech companies are set up for remote work more than other industries and so will suffer less of a disturbance. But, for warehousing and fulfillment operations work from home option does not apply. For that matter, any operational setup (especially manual warehousing and fulfillment) has elements where people have to interact face to face, be closer in confined space and may even need to operate together in a group. Receiving, picking, packaging, and shipping are some of the examples. Yet, businesses have tried to re-invent their operations following the prescribed cautious and safe distancing practices while resuming operations. But it could still easily expose their staff to infection risks, not to mention the hampered productivity levels and steep additions to operations costs.

PATH TO RECOVERY Though it may seem like an uncertain future and no light at the end of tunnel, some economies and their subsequent businesses are meticulously working on a path to recovery. The focus now is

shifting towards coping up and living with the “new normal”. Companies in China, Germany, few parts of USA are already resuming day to day life gradually with extreme caution. The social distancing and isolation has taught us an important lesson, that no matter how plentiful the labor resource pool may be; situations like COVID-19 could put the operations in jeopardy, especially the ones that heavily rely on labor. Warehousing and fulfillment operations in India, even today, heavily rely on labor and are largely driven by manual processes. Since these operations are considered essential services, there is very little that businesses can do as their resource are unavailable and under isolation. This is a wake-up call. The silver lining of hope for recovery through these challenges lies in adopting digitalization and automation solutions. An ideal combination in this scenario would be to couple the scanty labor resources with automation. This will be a symbiotic partnership that will bring reliability, efficiency, and safety in operations. Even in the current situation, there are digitalization and automation solutions that can be easily implemented in no time. Most of the operations have already implemented sanitizing protocols, personal protective equipment, outdoor meetings, staggered shifts & lunches, and social distancing rules, below are some additional quick transformations that can be adopted to recover operations using a combination of labor and automation:

Reducing the need for face to face social interaction: While it is true that warehousing operations need plenty of interactions, there are many opportunities to cut down the amount of face to face interactions drastically. We are very used to seeing resources operating in groups through the processes. These group interactions are driven by the need to discuss, seek answers or instructions when processes are manual. The need exists as the manual processes fail to create clarity, definite instructions and smooth procedures. A simple error in the description or qty of goods on a receipt can result into discrepancies which will drive the need for someone on the floor to walk to the supervisor and interact. Now, imagine a Warehouse Management System (WMS/WM) that can take over all the process management. Let us rethink the receiving operations with a WMS. There could be few in-line label scanners, or handheld RF scanners with display that can send and receive information direct to a control station (supervisor). This control station broadcasts and receives all the information to relevant points in processes. Also, it has the capability to respond back with resolutions for any issues arising. Not only you are digitalization your processes, but essentially eradicating the possible human errors out of processes which is eliminating any need for any face to face interaction. Additionally, since the WM is coordinating the show, be assured of efficient error free operations. The software is controlling all the flow of information, instructions,

Even in the warehousing operations, it is possible to practice safe distancing. By adopting some base level automation technologies that are easy to deploy, and when used in addition to above WMS, adherence to safe distancing protocol can be easily achieved. Assembly lines in automotive, mechanized production in pharmaceutical manufacturing, beverage bottling, dairy lines have already adopted and implemented these automation solutions. We have seen that there is little to no human interaction needed for these setups. 40 CELERITY July - August 2020

Practicing safe distancing, avoiding crowding, and working in isolation may very well become the new normal. Businesses will have to innovate and implement advance technological solutions with an eye out to the future. Digitalization & automation of processes is the building block of future ready resilient and sustainable operations. feedback throughout the processes. With digitization, the inherent need to interact face to face has been removed. Safe operations with distancing: Even in the warehousing operations, it is possible to practice safe distancing. By adopting some base level automation technologies that are easy to deploy, and when used in addition to above WMS, adherence to safe distancing protocol can be easily achieved. Assembly lines in automotive, mechanized production in pharmaceutical manufacturing, beverage bottling, dairy lines have already adopted and implemented these automation solutions. We have seen that there is little to no human interaction needed for these setups. By implementing simple automation solutions like conveyors, Automated Storage and Retrieval for inventory, wrapping, labelling, etc., the need for people to work in groups or crowd together can be reduced. Fewer people executing the processes means better chances of distancing. Also means a well spread out workforce that is interacting only if necessary, that too mostly digitally. Supervision, error recovery, control, verification, accountability is now moved to the digital platform that controls this automation. And in turn the automation executes the processes. By merely touching few buttons on the HMI (Human Machine Interface) or with a click of mouse, these systems can be kept operational and processes moving. Reducing the number of touches: The fundamentals of improving warehouse efficiency rely heavily on the concept of reducing the number of touches. Automation solutions are based on this principal. And with COVID, this will be the most relevant topic in warehousing operations.

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With solutions like Automated Storage and Retrieval, goods-toperson; the number of touches in the processes are vastly reduced. No more people shuttling goods around multiple times. Interaction of humans with goods only occurs when needed and with high precision & control. This is also tying back to the point of safe operations with distancing. Take such an example of goods picking process. By deploying goods to person technology and making the goods automatically travel to person, pickers can be placed at a safe distance in picking stations, zones or at pick ports. Add some shields and sanitization at these spots and now the operations can quickly ramp up execution adhering to the new distancing norms. This setup is high flexible and configurable. So as the volumes increase or decrease in future, the setup can be scaled or altered. Additionally, with a WMS/ WM controlling all this, a very high operational efficiency is achievable at elevated throughput rates. Imagine doing this in a manual picking setup abiding the social distancing guidelines. Just setting up such safe distance pick stations would mean additional resources to shuttle the goods back and forth, multiple touch points not to mention the impact on efficiency and operations cost.

The shift to working from home with the help of digital collaboration tools is likely to drive demand for hightech solution categories. Similarly, an equivalent high-tech solution is the need of the future to keep the economy pumping and operations running. By automating processes like receiving, conveyance, storage retrieval, packing and loading; operations can establish compliance with social distancing norms without compromising on productivity. One may debate that capital conservation is prime and upfront capital cost of implementing any such solutions is high but, it may very well turn out that this is the only economical alternative to building a future ready, resilient and reliable operations capability that will sustain challenges like COVID-19. Businesses that figure out a way to cope up, adjust and adopt early to the new normal will emerge as winners. We may never be able to go back to running operations like pre COVID era but, the future, by compelling business to transform, will unlock new potential and overall advancement of the industry.

BUILDING FUTURE READY RESILIENT AND SUSTAINABLE FULFILLMENT OPERATIONS Practicing safe distancing, avoiding crowding and working in isolation may very well become the new normal. Businesses will have to innovate and implement advance technological solutions with an eye out to the future. Digitalization & automation of processes is the building block of future ready resilient and sustainable operations.

PERSPECTIVE

Braving the

Being from the supply chain industry, we know while human movement

COVID ODD Starting March 2020, companies started feeling the brunt of the Covid reality in the country. The stringent lockdown to contain the Covid spread further proved catastrophic for the Indian economy. While the logistics & supply chain activities were functioning for the essential items, albeit slowly, companies which were not tuned with the technological advances have had to face the major brunt. As they say, there’s always light at the end of the tunnel, our logistics tech start-ups have slowly and steadily started spreading their wings, offering companies the much-needed fuel to drive growth. Through this perspective story, we asked some of the leading Log Tech Start-ups as to how they are braving the Covid odd and prepping for the post-Covid era…

SOHAM CHOKSHI, CEO & Co-Founder, Shipsy

around the world may reduce, cargo movement just cannot. Having said that, we are indeed moving to a new normal in terms of how we work in our daily lives. Through our interaction with the 500+ exporters and importers processing over 80,000 containers per month on our platform, we have identified three key themes:  Reduced dependence on "physical" especially documentation and other files which will allow the workforce to work from home  Tighter cost controls through:  Eliminating detention, demurrage  Tighter inventory levels with eye on transit time adherence  Enhancing vendor base of Freight Forwarders / Shipping lines with digital bidding  Moving to a "spot" driven world, with shorter rate contracts  Effective task management across diverse teams so that everyone knows their tasks, deadlines and can thus work from home. From a domestic distribution perspective, one key theme, which is coming around is retailers rapidly moving to Omnichannel model. The belief is that customers will not go as much to stores / malls and instead, these store locations would become mini warehouse points for home deliveries. The local / hyperlocal models form the major discussion points with both players – retailers and 3PLs trying to adopt technology to adapt to this new normal.

Adoption of technology in the supply chain post-COVID19

CHITRANSH SAHAI, Director & Co-Founder, GoComet

MANISH BALANI, Business Head – GST, Vayana Network

AYUSH AGRAWAL, Co-Founder, IntuGine Technologies

The

onset and adoption of virtual communication in our day to day lives will seep into the business process. Enterprises will begin to replace legacy processes especially those that involve the exchange of paper-based documents with electronic forms of the same. We see a surge in demand for digital invoicing and electronic proof of deliveries going forward. These new-age methods will not only improve the efficiency and effectiveness of processes but also ensure safety mandates such as social distancing. Apart from the digitization of paperbased processes, we think the remote work culture will promote the adoption of digitization for end-to-end processes than just for specific processes.

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Large

Corporates have always been very open to using best practices, processes and technology in reducing the overall costs of their supply chain. These companies develop supply chains, so they can reduce their costs and remain competitive in the business landscape. However, with the present Covid 19 situation, there will be more thrust given to keep the supply chain running even in such never-seen-before situations like a pandemic. More emphasis will be given on business continuity planning, which was never the case earlier. Technology will play a very pivotal role in this. There will be a lot more importance given to supply chain credit and finance, technology and continuity of business than ever before. Smaller businesses are also not staying back and are innovating and adopting new digital tools to minimize disruptions. Although, efforts are being put presently and will continue to be put, to digitalize everything from customs to ports to customers to deliveries, shipping lines and airlines, but it will be difficult to completely digitalize the process of flow and documentation.

The supply chain industry's reluctance to break free from the traditional, obsolete ways of managing logistics has stifled its growth for ages. The present crisis has only brought the vulnerabilities and inefficiencies of the industry into sharp focus. Supply chain professionals have treated digitization as a choice for decades. However, today digital transformation has become critical to the survival of companies. For instance, the present market is spot rates driven as freight forwarders have been revoking existing contracts in the wake of the crisis. For organizations with hundreds of shipments per month, suddenly having to manually create, compare and negotiate each rate to ensure they have secured the best deal is impossible. At GoComet, we noticed that in recent times, our clients have rapidly extended our software to their other businesses across countries. This seldom reflects the kind of impetus the pandemic has been for businesses to opt for digital transformation. To say the least, today and in the post-COVID world, companies will either evolve by adopting digital solutions or become extinct.

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DIVAY KUMAR, CEO & MD, O4S The current pandemic has exposed the underlying vulnerabilities of supply chains, leaving businesses across the world paralyzed during the imposed lockdowns. Limitations of transportation, physical contacts, and touch points have widened the demand and supply gap further. Towards this, companies across verticals are now rethinking and revising their strategies to deal with the current situation and envisaging investment in technology as well as automation to optimize supply chains. This will further support them in the days to come as organizations will have to work on reducing their reliance on traditional methods and labor intensive norms, be it during procurement, manufacturing, warehousing and distribution, to recover and bounce back. In the quest to optimize costs and reduce losses, all stakeholders will need to be brought on to a common platform so there is visibility of operations across the supply chain. This will enable stakeholders to closely monitor stocks across supply chains and take immediate corrective measures to mitigate any untoward scenarios.

PERSPECTIVE

PERSPECTIVE Ayush Agrawal,

Over the last 2 months, I have observed all the supply chain & logistics related challenges through multiple industry forums. One thing is very clear; our current supply chain and logistics needs lot more collaboration and we all need to work together for 10X improvement. Just like the industry fragmentation, the supply chain tech is also not interconnected in many cases. Technology driven companies have a robust supply chain system, which offers them clear visibility, hence they can change their strategies in case of any crisis situations like lockdown or quickly re-align their strategies to sail through difficult times. Right from the customer demand to ordering to manufacturing to shipping to selling / delivering to end customers, we see more tech collaborations in the future to make this chain seamless and get the complete visibility of goods and information to predict the data trends. CXOs and supply chain heads are always keeping abreast of new developments disrupting their industries, to stay updated on the available opportunities. During the lockdown, most of them would have re-looked at their existing supply chain operations, identified the gaps and explored possible areas for improvement. Technology has the biggest role to play here, at the same time, one cannot do everything. Adapting to new business models, plug-in right solutions, end-to-end integrations are going to be the primary focus. To make better and quicker decisions, companies should have the information they need to adjust their strategies in real time. Covid exposed the current challenges as well as possible opportunities to strengthen the supply chain ecosystem.

Co-Founder, IntuGine Technologies

We, as an enterprise, have made full use of the opportunity presented to us by the pandemic. We have revamped our internal processes, developed more solution offerings, and have made necessary changes to our current products. We think the pandemic has really made enterprises more aware

MOHAMMED ZAKKIRIA, Founder, FreightBro Logistics

Manish Balani,

of the fact that digitized infrastructure is a key factor in retaining stability during uncertain times and so we expect a surge in demand for end-to-end process digitization requirements and we are very well prepared for that.

Business Head – GST, Vayana Network

With the changing times, Vayana, as the largest 3rd party supply chain finance network in India, is keen to explore newer sub-sectors for extending credit in the logistics sector. Also, as the largest GSP in the ecosystem, providing GST and e-way bill pass through APIs, Vayana can help logistics as well as logtech players in automating their e-way bill creation and allied activities. Since the year 2018 when eWay Bill compliance became effective nationwide,

Vayana GSP is working with several solution providers [ASPs] to address the requirements of corporates, logistic firms and SMEs for enabling an easier and integrated eWay Bill compliance experience. These APIs are envisaged to be consumed by large taxpayers and logistic firms/platforms who have substantially large volume of transactions. We have integration with NIC and have been enabling several solution providers to integrate to NIC through Vayana GSP.

Chitransh Sahai, Director & Co-Founder, GoComet

GEARING UP FOR THE CHANGING TIMES Soham Chokshi, CEO & Co-Founder, Shipsy At Shipsy, we are offering end to end technology solutions that help:

Importers and exporters reduce freight costs by 5-6% through:  Digital rate procurement and e-bidding  Digital document and task management  Automated tracking and ETA refresh through Shipping Line integration  Invoice reconciliation and auto deviation indication from contracted rates

Retailers reduce distribution/logistics costs by 9-10% through:  Automated route planning and system suggested procurement of market vehicles  Integration with hyperlocal delivery players  Integration with courier partners for unified booking and tracking  Digital POD and Zero Contact Delivery Overall, COVID has accelerated the adoption of technology all around, to ensure that unnecessary costs can be reduced and there is no dependency of physical presence in offices. For players that can offer a SaaS based platform with no large upfront fees, no need to do setup, an easy free trial – this is a tremendous opportunity to partner with all the players across the supply chain.

Divay Kumar, CEO & MD, O4S O4S is helping over 35 clients across industry verticals get visibility into their supply chain and subsequently help optimize them. Our team consists of experts from across industries who with the help of learnings from these clients have developed multiple products that are focused on brining all stakeholders of complex supply chains on a common

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platform. In accordance to asking of the coming times, we have designed the entire suite of offerings on an easy to deploy, highly scalable SaaS platform available to clients across industries. The solution doesn’t warrant any capital expenditure as the costing is based on a ‘pay as you use’ model.

At present, our focus is on keeping a close eye on the market trends and developing products that equip supply chain professionals to navigate the new normal. For example, in response to the COVID-19 disruptions, we developed the GoComet port delay module. Through this module, we are freely sharing our live global freight visibility data with companies around the world. The user has to simply search for the port of his choice in the search field and the module instantly displays the average and maximum delay for that port. The idea is to keep coming up with innovative solutions to help companies in this time of crisis and beyond. The impact of COVID-19 has triggered an unprecedented demand

for smarter, automated solutions. As every company would want to invest in building agile supply chains, now is the perfect time for tech players in the logistics space to tap into this demand. To give an example, the industry is sure to witness a surge in adoption of cloud-based systems as they offer scalability, easy integration with existing systems and reliability for businesses across borders. As cost-saving strategies have become important to companies more than ever today, there is going to be immense scope for any service or product that is going to help companies drive cost savings. In a nutshell, those with unique solutions to actual problems are sure to win in the post-COVID world.

Mohammed Zakkiria, Founder, FreightBro Logistics At FreightBro, we are digitizing the freight forwarding companies, not just in India but globally now. This particular segment in the supply chain requires the highest level of digital transformation, data standardization and tech collaboration. For a single shipment, there are dozens of parties involved and it requires hundreds of e-mail exchange, phone communications and someone has to physically carry the documents both at origin and destination. The systems are siloed and the processes followed are mostly analog, due to which the overall operations become less productive and creating inefficiencies across the supply chain. Post COVID-19, many freight forwarding companies will accelerate their digital transformation in order to adhere

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contactless sales, better customer engagement or make more business sense. Also, we expect significant investments in customer facing platforms / new solutions, which can help them to digitize faster and stay competitive. We see a huge potential here as the demand for such solutions has been on the rise since the first lockdown. Covid-19 has opened up opportunities for many logtech players. There is a huge mindset shift towards digital solutions, which can make supply chain more agile and well connected. Technologies like Big Data, Artificial Intelligence, IoT, Warehouse automation, robotics will make bigger impact and reshape the future.

INTERVIEW

SCM 4.0

ADAPT OR PERISH “Much more than only a wish by companies, Supply Chain 4.0 will become a reality in terms of a transformation required. It is a strategic issue. Companies which do not put efforts on the implementation of Disruptive Technologies, will not be able to compete in the global market,” emphasizes Prof. Guilherme Frederico is Associate Professor of Operations and Supply Chain Management at School of Management - Federal University of Paraná – UFPR – Brazil.

What exactly is Supply Chain 4.0? Supply Chain 4.0 is a new way about how the supply chain can be viewed and managed. It is an evolution of traditional supply chains into the context of the Industry 4.0’s trend. This new supply chain is formed by its processes (plan, source, make, delivery and return) fully interconnected in both horizontally and vertically structure. Supply Chain 4.0 is much more than only technologies implementation. Indeed, it is a managerial framework, which considers four main perspectives: Managerial and Capabilities Supporters, Technology Levers, Supply Chain Processes and Strategic Outcomes.

How can companies globally work towards attaining SCM 4.0? The first thing companies should consider is that Supply Chain 4.0 must be a strong Strategic Driver. Operations and Supply Chain Strategy has changed now. Technologies have been seen in the past as the tool in order to improve supply chain processes. These technologies will continue to accomplish this role. However, with the

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4th Industrial Revolution, companies must be able to understand which technologies will allow them to be ahead of their rivals and transform supply chain’s operations in order to foster competitive advantages. High collaboration with global technologies companies will be required with the aim of getting this transformation.

What are the new technologies that will aid in making it a reality? There are a set of disruptive technologies continuously being launched in the market from the beginning of Industry 4.0 ware. However, it is important to first correctly understand which technologies must be prioritized and implemented for each supply chain. The main technologies, which are shaping the Supply Chain 4.0 include Internet of Things, Big Data Analytics, Cloud Computing, Robotics, Additive Manufacturing, Artificial Intelligence and Cyber Security Systems. All those technologies must be interoperable with each order with the aim to

Prof. Frederico is also the Visiting Research Professor of Centre for Supply Chain Improvement at University of Derby. He is the author of the Book “Operations and Supply Chain Strategy in the Industry 4.0 Era” and has published articles in International Journals and Conferences. His research interests are related to Supply Chain 4.0, Industry 4.0, Maturity in Supply Chain and Operations Management, Performance Measurement in Supply Chains, Knowledge and Information Management and Supply Chain and Operations Strategy.

transform a traditional supply chain in a Cyber-Physical Supply Chain. Interoperability is the key factor towards the success of a Supply Chain 4.0 program. These Disruptive Technologies provide a breakthrough in the supply chain processes. Performance aspects such as collaboration, transparency, efficiency, flexibility, integration and responsiveness might be significantly improved with the use of these technologies. These improvements on the supply chain processes will directly influence the strategic outcomes of organizations, improving the customers, suppliers and other stakeholders’ satisfaction, reducing costs, increasing profitability and positioning of companies on the leadership scale in the global marketplace.

The first thing companies should consider is that Supply Chain 4.0 must be a strong Strategic Driver. Operations and Supply Chain Strategy has changed now. Technologies have been seen in the past as the tool in order to improve supply chain processes. These technologies will continue to accomplish this role. However, with the 4th Industrial Revolution, companies must be able to understand which technologies will allow them to be ahead of their rivals and transform supply chain’s operations in order to foster competitive advantages. High collaboration with global technologies companies will be required with the aim of getting this transformation. to get a Supply Chain 4.0 program succeed. As already mentioned, the first thing is to put Supply Chain 4.0 as a Strategic driver fully supported by the higher leadership on its deployment. Also, Organization Awareness regarding the importance of Supply Chain 4.0’s initiative and its benefits should be deployed to the organizational people. Training and Education Programs are also other important aspects to make people more capable and impart them with the desired skillsets to implement and conduct these new technologies. On the technical side, a robust IT infrastructure in terms of network, hardware and software should be implemented in properly supporting the Disruptive Technologies requirements.

Compliance issues must be also observed. All these new technologies and processes must be compliant with global and regional regulations in order to guarantee the success of global supply chain processes. All these issues presented must be coordinated with adequate project management methods and orientation across the whole supply chain members.

How do you foresee global supply chains shaping up in the years to come? Much more than only a wish by companies, Supply Chain 4.0 will become a reality in terms of a transformation required. It is a strategic issue. Companies which do not put

efforts on the implementation of disruptive technologies, will not be able to compete in the global market. The integration, collaboration and transparency on the planning, sourcing, manufacturing and transportation processes fully interconnected will be something common for those companies, which will have successfully implemented a Supply Chain 4.0 program. Obviously, Supply Chain 4.0 strategy is a long-term horizon. However, it is important to begin now; implementing the steps required in the sense of the aspects and properly manage the maturity of these aspects during this strategic path will hold the key to the future.

What can be the obstacles in this transition and how can companies brace for the same? In the Supply Chain 4.0 framework, the first element to be considered is related to the Managerial and Capabilities Supporters. These elements must be properly developed and implemented

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INTERVIEW

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

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