SUPPLYCHAINTRIBE.COM May - June 2021 Volume 5 Issue 3 For private circulation only
Celerity Webinar on
VACCINE SUPPLY CHAIN & CHALLENGES – INDIA & GLOBALLY Leaving no room to absorb disruptions, COVID-19 became the last straw that broke the lean supply chain back. The world-wide vaccination drive itself has been one of the largest ever. Experts share their first-hand experience from the ground.
INSIDE Preparing for resilience and future shocks Muthu Maruthachalam.C, Vice President – Supplier Management & Logistics, Daimler India Commercial Vehicles Pvt. Ltd. (DICV) Aniruddha Banerjee, Sr. Vice President – Supply Chain, Spencer’s Retail Ltd. & Nature’s Basket Ltd.
A Second Wave of Resilience Dear Readers, The second wave has hit me too as it has so many others. My core vital readings are fine though and the doctor has assured that my first vaccine dose will help me fight it. The biggest vaccination campaign in history is underway in India. When the vaccination drive opened, people showed a lot of reluctance. Our Cover Story talks about the challenges that a vaccination drive of such humongous proportions brought in India and globally. Do read through to understand first-hand from experts in the field and what lessons can be learnt from earlier drives and the current one. Sustainability in transportation is gaining popularity. Companies like DICV are rolling out BSVIcompliant portfolio of commercial vehicles. They have also launched Reefer containers which can be assembled and dismantled easily, as an answer to vaccine delivery challenges. Nominations for the Celerity 40-under-40 and 30-under-30 Supply Chain awards are now open. We have introduced a new category – ‘The Exemplars’, where the jury will choose the best-ofthe-best. To give a voice to our earlier under-40 winners, we have started Celerity Supply Chain Super Achievers’ column. These voices are truly making a difference in their organizations and we would like to get their insights. It is very heartening that many companies have learnt well from last year and have prepared their supply chains well against future shocks. Read our sections to know everything. Happy reading.
Charulata Bansal Publisher Charulata.bansal@celerityin.com www.supplychaintribe.com
Published by Charulata Bansal on behalf of Celerity India Marketing Services Edited by: Prerna Lodaya • e-mail: prerna.lodaya@celerityin.com Designed by: Lakshminarayanan G • e-mail: lakshdesign@gmail.com Printed by: Xposures, A 210, Byculla Service Industrial Estate, D K Cross Road, Byculla, Mumbai- 400027. Logistics Partner: Blue Dart Express Limited
2 CELERITY May - June 2021
CONTENTS
May - June 2021 Volume 5 Issue 3
17 | COVER STORY
India’s Vaccination Drive: Beginning of the Endgame? Our recent webinar, ‘Vaccine Supply Chain & Leadership Challenges’ dwelled on the imperatives that are needed from all quarters to ensure effective & efficient vaccination drive. Our august panelists highlighted and elaborated on the global vaccination efforts, India’s vaccination strategy, our logistical prowess and people participation that will ultimately aid in the success of the Vaccination Drive. This Cover Story brings you the excerpts of the expert panel and the humungous task that is there upon us all individuals to make it succeed – TO GET VACCINATED! INTERVIEW 6 | Trucking
with an ‘X’ Factor
“We will continue to focus on providing safer and more modernized trucks, ensuring industry-leading fuel efficiency, safety, comfort and reliability,” highlights Muthu Maruthachalam. C, Vice President – Supplier Management & Logistics, Daimler India Commercial Vehicles Pvt. Ltd. (DICV). 10 |
Disrupting the Disruptors
“Understanding the supply chain vulnerabilities that emerged during lockdown plays an important role in helping us prepare for the future shocks,” shares Aniruddha Banerjee, Sr. Vice President – Supply Chain, Spencer’s Retail Ltd. & Nature’s Basket Ltd. 29 | Be
Sure
“We have adopted a clean, lean and green approach to creating a responsible supply chain,” shares Nikhil Puri, Global SCM Head – Communication Cabling Solution, Sterlite Technologies Ltd. (STL).
UNDER-40 SUPER ACHIEVERS 14 | Augmenting
to Boost Export
Infrastructure Facilities
Dr Abhijit Singh, Executive Director, Indian Ports Association, writes about the initiatives undertaken at Major Ports to transform them into world class facilities and to boost exports. 15 | Digital
Strategies in Procurement
Prachi Misra, Senior Director, Refinitiv Ltd., highlights how new technologies are shaping digital procurement strategies and transforming the function. 33 | SPECIAL REPORT
Press the Reset Lever Supply chain leaders need to STRESS TEST their existing supply networks and accordingly devise a comprehensive supply chain strategy to lead organizational growth. This special story offers you the strategies to prep up for the future. 37 | INFOGRAPHICS
Manufacturing Systems Hierarchy and Associated Analytics Opportunities
Editor: Prerna Lodaya
An effective Manufacturing Analytics program design needs to extend beyond the factory floor. Afterall, one of the key obstacles Supply Chains face is siloed planning and optimization, presents Kumar Singh, leading global supply chain consultant.
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.
supplychaintribe.com
3
INTERVIEW
TRUCKING
‘X’factor
with an
“The lockdown gave us the chance to take a step back from our daily operations and take a fresh look at our core functions. We have taken the opportunity to improve efficiencies in our business processes and have started our operations in a safe, sustainable manner. One of the most important lessons was that we need to build more self-reliant supply chains as we continue to work towards achieving higher localization levels. Moving on, we will continue to focus on providing safer and more modernized trucks, ensuring industry-leading fuel efficiency, safety, comfort and reliability,” highlights Muthu Maruthachalam.C, Vice President – Supplier Management & Logistics, Daimler India Commercial Vehicles Pvt. Ltd. (DICV).
How was the year 2020 in a nutshell? What are the biggest learnings that Covid-19 taught us? The worst is behind us. We continue to make DICV even more resilient and have used the crisis as an opportunity to emerge even stronger. For us, it was important that during the crisis, we had full transparency with our suppliers during the pandemic. We also focused on strategic inventory placing; this allowed us to have a more flexible supply chain despite the uncertainties. It was also crucial to understand the end-to-end supply chain up to Tier ‘n’ and identify potential risk (if any) & hence work on the mitigation plan.
What were the innovations that took
6 CELERITY May - June 2021
the shape at DICV during the last year? We transitioned to BSVI and were able to ramp-up our operations smoothly. Our prime focus during this time was to continue our journey towards process improvements, Digitalization, Transparency etc. As part of this, we implemented SAP - Warehouse Management, which helps us to improve our warehousing operations and also improves the accuracy of inventory apart from creating transparency. We also created lot of engagement platforms with our supplier partners like “Partner connect” and “Supplier spotlight”. Partner connect is a platform where we share our performance in the market, our expectations, understand
Muthu took over Supplier Management Logistics in February 2020. He is an integral member of the Senior Management team currently responsible for leading & transforming the E2E Supplier Management & Logistics. He has actively guided the supplier management task force to ensure smooth ramp up of the entire supplier base during the global pandemic of Covid 19. In addition to the responsibility of domestic exports of our trucks, he heads the CKD, CC business in DICV & the Commercial vehicles business of Indonesia Daimler Commercial Vehicles Manufacturing Indonesia (DCMVI). With 23 years of work experience in the automotive sector covering Tier 1 and OEMs, Muthu believes in leading a team to success with high focus of people development. Muthu is a Mechanical Engineer with post graduate diploma & Masters in Quality Management.
the perspective of our supplier partners & hence improve our collaboration further. DICV Supplier Spotlight is a strategic engagement platform with selected partners to discuss long-term business strategies.
Kindly enlighten us on BharatBenz ‘BSafe Express’ and how is it going to address India’s cold chain infrastructure challenge going ahead? The biggest challenge faced by the government is seamless and safe transportation of vaccines via an adequate number of advanced reefer trucks. One of the most critical challenges is to ensure that the vaccines are maintained at the exact correct temperature for the entire journey. Daimler India Commercial
INTERVIEW
Vehicles (DICV) is committed to supporting our government’s plan to ensure timely and secure transportation of the COVID-19 vaccine to India’s population. DICV has been a steady partner of India’s self-reliant journey and further in line with our endeavors to support the government, we have launched BSafe Express’, a specialized reefer truck for safe transportation of vaccines. The combination of a strong, reliable chassis with a lightweight, insulated reefer and state-of-the-art connectivity device makes BharatBenz’s ‘BSafe Express’ the perfect solution to India’s cold-chain infrastructure challenge. Unique feature of our Reefer containers is that it can assemble locally in maximum 96 hours. One can easily unpack and assemble it conveniently. With this truck, we can deliver vaccines in perfect condition to even the most remote destinations, bringing hope of a return to normalcy to over 1.3 billion people.
During the last year, companies survived majorly on trusted partnerships between dealers and
supplychaintribe.com
distributors and vice versa. What’s your take on this? What were the measures that DICV take to ascertain that your partners also progress in tough times or otherwise? We work with over 400 suppliers and are in a position to optimize their capacity and our capacity. It’s a win-win situation. And by doing what we do — which is believe in our suppliers — we have access to the entire knowledge of India. Our collaborative approach, transparency has helped us tide this pandemic together. We learnt to look at supply chain as E2E Value chain starting from raw material. We realized that our focus has to be also on the tier ‘n’ suppliers for a smooth business operation.
What are the German best practices that DICV has brought into the Indian market? As part of the global powerhouse of Daimler Truck, DICV has full access to Daimler’s vast array of state-of-the-art technologies. This means that we are able to cater to emerging new business opportunities in a very fast and focused manner, as evidenced by our quick
localization and roll-out of an all-new, BSVI-compliant portfolio earlier this year.
How can companies move towards sustainable pastures? What’s DICV’s strategy towards the same? The transport transformation requires sophisticated vehicle technology with the quality, reliability and durability that commercial vehicle customers expect. In addition, it requires economic efficiency and the necessary infrastructure: Customers must be able to earn money with CO2-neutral vehicles and, of course, be able to charge them and use them in everyday transport without complications. Vehicle technology, economy, and infrastructure - all three factors must be present in order for a market for CO2-neutral vehicles to emerge.
Please share with us your strategy, ‘Make in India, Make for the World’. DICV serves not only the growing domestic demand but also more than 60 export destinations across the globe including markets in Africa, Asia, Latin
7
INTERVIEW
America and the Middle East. Since the start of its export operation in 2013, DICV has exported more than 32,000 trucks and 3,500 buses. In October 2020, DICV reached important milestone with over 35,000 commercial vehicles and 150 million parts exported. We also added Malaysia as a new CKD market. DICV is the only Daimler location worldwide that produces engines, transmissions, trucks and buses at the same site under four brands – BharatBenz, FUSO, Mercedes-Benz and Freightliner. By shipping more and more Indian-made products to an increasing number of overseas markets, DICV is helping India become an international manufacturing hub.
One of the most important lessons was that we need to build more self-reliant supply chains as we continue to work towards achieving higher localization levels. Going forward, supply chains will need to turn digital with more usage of Robotics, Internet of Things, Artificial Intelligence and other technologies that will help make them more resilient. Moving on, we will continue to focus on providing safer and more modernized trucks, ensuring industry-leading fuel efficiency, safety, comfort and reliability. We will also further increase our focus on digitalization for our customers.
Were there any challenges faced in terms of inbound supply chain during COVID? How did you manage them?
Our warehouse plays an important role in supply management and logistics. It already handles more than one million transactions a year – that is about 2 transactions every single minute and aims to improve its efficiency further by adapting modern measures. The kitting concept and internal sequencing operation has brought positive results in the way we feed parts from warehouse to the line. It actually helped a lot in handling BSVI ramp-up and complexity seamlessly. The upgraded WMS will also enable tracking of parts in the warehouse until the bin level including
The lockdown gave us the chance to take a step back from our daily operations and take a fresh look at our core functions. We have taken the opportunity to improve efficiencies in our business processes and have started our operations in a safe, sustainable manner. At DICV, localization has been a high priority since the introduction of our vehicles in 2012. We currently source around 80-90% of our parts locally and hence were resilient in the current situation.
8 CELERITY May - June 2021
We would like to know more about DICV’s warehouse modernization journey.
pre-defined storage locations, storage levels and optimize the material flow using advanced put-away and picking techniques.
How do you foresee the economy to move from here on? We strongly believe the challenges we are seeing lately are short to mediumterm challenges and India offers a huge potential for growth as economic revival happens and CV market matures in its dynamics, efficiency, and business models. One reason we are so confident about this is India’s size. There is a strong correlation between a country’s population and the number of trucks sold. Compared to other economies like the US and Germany, India has far fewer trucks per person. So, there is clear room for the market to grow.
What are the latest and upcoming products that we can look forward to? How are they slated to enhance the transportation infrastructure of the country? BharatBenz is known for offering solutions to the dynamic needs of customers and society. BharatBenz just recently introduced eight new models including the BSafe Express (Intelligent Reefer for vaccine transport), 1917R, 4228R Tanker, 1015R+, 42T M-Cab,
INTERVIEW The combination of a strong, reliable chassis with a lightweight, insulated reefer and state-of-the-art connectivity device makes BharatBenz’s ‘BSafe Express’ the perfect solution to India’s cold-chain infrastructure challenge. Unique feature of our Reefer containers is that it can assemble locally in maximum 96 hours. One can easily unpack and assemble it conveniently. With this truck, we can deliver vaccines in perfect condition to even the most remote destinations, bringing hope of a return to normalcy to over 1.3 billion people.
and 2828 Construction vehicle. The two new BharatBenz buses to hit the road soon are the wide-body 1017 variant with a seating capacity of up to 50, and the 1624 chassis available with a parabolic suspension. Additionally, we also introduced the BSafe Pack, a range of features available across the entire portfolio that will enhance safety for drivers and passengers. BharatBenz vehicles are characterized by top-most safety, high performance, fuel efficiency, excellent reliability, and low maintenance cost. The new portfolio is DICV’s solutions that help our customers to excel in their businesses
supplychaintribe.com
and benefit the society.
What are DICV’s future plans for the Indian market?
classification. Instead, we will focus on creating ‘the best truck for every need’, customizing vehicles for use applications that target specific sectors.
DICV is a long-term partner in driving India’s economic growth and automotive expertise. DICV is the only facility across Daimler producing four brands – BharatBenz, FUSO, Mercedes-Benz, and Freightliner. We have seen overwhelming demand for BharatBenz, and we are absolutely prepared to benefit from this recovery and continue to grow profitably in this market. With the new generation of BharatBenz portfolio, we are looking to move away from the traditional tonnage
9
INTERVIEW
DISRUPTING THE DISRUPTORS “Learning never stops. Flexibility, agility, resilience, adaptability, and effective collaboration are essential to meet the challenges of doing business during a period of significant disruption. Digitalization of supply chain supports these requirements. Understanding the supply chain vulnerabilities that emerged during lockdown plays an important role in helping us prepare for the future shocks, including a potential second wave of Covid-19,” shares Aniruddha Banerjee, Sr. Vice President – Supply Chain, Spencer’s Retail Ltd. & Nature’s Basket Ltd., during an exclusive interview…
How was the year 2020 for Spencer’s Retail? What innovative idea made its way to reach consumers? Evolution and change are the only constant – a philosophy that was exemplified during the pandemic, made companies to think differently. Retail sectors (both food and non-food) having Omni-channel presence had to evolve and so did Spencer’s as an organization. Curbing the primitive thought processes and harping on the old normal of scheduling, planning, and forecasting, Spencer’s took initiatives that were not only nimble and flexible but also involved a lot of dynamism. Every function in the organization played their own part in developing newer and leaner ways of achieving objectives. Right from customer feedback-based forecasting algorithm to capacity planning based on sale outlier normalization to developing robust mechanisms for inventory load balancing, and planned increase of
10 CELERITY May - June 2021
DC throughput, Spencer’s has done it all. The approach was simple yet efficient. Everything evolved from the vision – Makes fine living affordable and convenient. Keeping customer at the helm, Spencer’s as an organization has treated each business case with equal importance, and the results are encouraging. Spencer’s hopes to be always with their customer.
How has FMCG sector been performing over the years? The main trends for this sector have been growing awareness, easier access and changing lifestyles of millennials. The sector's primary growth drivers have been rising wages and increasing youth populations. Also, brand recognition has helped demand. Demand for quality products and services in rural areas is on an upward trajectory on the back of increased manufacturing and FMCG distribution networks. The increasing
Aniruddha Banerjee is leading the supply chain effort for Spencer’s Retail & Nature’s Basket with key focus on enhancing operational efficiencies and scale to accelerate profitable growth. Aniruddha’s expertise lies in driving large scale analytics & technology-driven disruptive initiatives aimed at sustainable, tangible improvements across the supply chain. After finishing his Graduation from University of Calcutta and M.Com. from Annamalai University, he has pursued Post Graduation in Sales & Marketing. He has completed an MDP in Strategic Management while working with Tata in a joint programme with IIM-Ahmedabad. Recently he has done his Post Graduation in Digital Marketing from DMI Ireland – NIIT, to keep pace with the fast changing digital & analytics field.
youth population, especially in urban regions, is another major factor driving the need and demand for food services in India. India has a large base of young consumers who make up majority of the workforce, and hardly get time for cooking because of time constraints. Growing internet penetration and increasing digital maturity in India, along with infrastructure growth, have helped improve online transactions. Around 72% of Indian customers are most likely to shop online for premium items locally. FMCG companies are launching products online before making them available in traditional retail stores with e-commerce sales recording 56% growth in the first quarter of 2020 and 38% increase in June 2020. Because of the direct cash transfer system, disposable income has increased in rural India. Another rising category is exports. By 2030, the e-commerce segment is projected to contribute 11% to total FMCG revenue. Stock availability
INTERVIEW has become much simpler because the internet and multiple distribution outlets have made it easier for consumers to access the desired product at the right time and location. Post pandemic, the consumer behaviour had been brand agnostic for a few days. But the ones adhering to the MT section has come back to look for product width rather than depth.
to panic and buying patterns are based on market feedback. The evolution of the second strain may entice in hoarding even if not like the last one. Learning from the past, panic buying might be a little more structured if planned on the criticality scale.
What are the crucial learnings gained from the pandemic?
We started off with Residential Welfare Association list preparation for essential SKUs of FMCG, Staples & General Merchandise by identifying high throughput essential SKUs so that it can be shared with manufacturers and distributors to plan their production and distribution. This helped us in ensuring the supply connect for the essentials demand. To ensure the business continuity in hotspot, virus-stricken areas and to avoid disruption owing to this, the large format store was chosen as the as a hub for cluster with the smaller ones as spokes, enabling a pseudo-DC and catering to the demands. Strategic tieup with Omni-channel delivery partners was an important lever, especially down South. We have implemented staggered shift working at warehouses for DC manpower to mitigate the risk of virus spread, promote social distancing and to cope up with manpower crunch. We focused on phone delivery model, Spencer’s App and WhatsApp enabling
COVID-19 has taught us many lessons. COVID-19 has dramatically and suddenly shifted more customer traffic to digital channels. The growth in e-commerce is irreversible and will continue to witness traction. Owing to the rising trend of internet consumption and the sheer ease of disposal at the end of the customer, the purchase paradigm has moved towards Omni-channel delivery services. COVID-19 has taught businesses to embrace an agile operating model. The ability to move fast and adapt is a clear characteristic of winning businesses & retailers throughout this ongoing crisis. Health and safety of employees & customers remains the first and foremost priority and customer and community engagement remains vital. Digital, convenience, speed, cleanliness, health, trust and community are all keywords that will become the future foundations upon which retailing rebuilds. Consumers tend
What were the strategies adopted to mitigate risks and ensure Business Continuity?
the consumers to get the products delivered to their homes.
How did the inventory planning happen during the same time? When supply is restricted or lead times are unreliable, it’s important to identify stock items that are critical to your business and build an inventory plan to alleviate the risks. We identified focus articles across each category along the ones which are fast movers and have set stocking policies to help secure their supply and the optimum inventories. To ensure that stocks don’t pile up at warehouses during this period, a case lotbased allocation model was developed which helped in efficient picking in case lot, thereby reducing the warehouses turnaround time. A unique hub & spoke model for stock replenishment was made where a unique store had been chosen as the back-up or alternate hub location, which acted as a DC and catered to the essentials SKUs supplies with strategic tie-up with Omni-channel delivery partners for the delivery.
Please share with us Spencer’s technology transformation story with respect to supply chain. There was a misrepresentation of the Average Daily Sales due to sales spikes due to bulk/liquation sales at the stores. This in turn provided a wrong average daily sale number, which is a driver in
Companies are aggressively digitizing their supply chains to boost annual growth of earnings before interest and taxes. New Omni-channel supply chain engagement models such as Buy online Pick up at store (BOPIS) are becoming increasingly popular. Technological development is transforming the last mile delivery. Congestion, emission, and delivery cost are three key challenges in the last mile delivery operation and digital infrastructure will help in addressing these challenges. The uberization of last mile will become a significant factor in meeting the e-commerce and digital surge. Last mile delivery is the most deconsolidated form of shipping strategy, implying it is multiple deliveries at numerous locations. Digital transformation would ensure that last-mile distribution operations are flexible and scalable, allowing for the rapid accommodation of shifts in demand for e-commerce shipping. supplychaintribe.com
11
INTERVIEW inventory planning, computation of Manual, Gap Fill PO calculation or affixing DOH norms. This computation considers the ADS comprising bulk sales and hence, excess stocks gets triggered, thereby resulting in higher inventory as required. So, it is required to reduce the effect of outlier sale spikes (bulk/liquidation sale) from stores, misrepresenting the ADS (average daily sale numbers). We developed sale outlier normalization model on SAP ABAP. The model encompassed identifying the effect of outlier sale on the time frame of D-91 days. Comparing the daily sale number with the moving segment of 91 days prior to the sale day, if an outlier was recognized by the model, based on the z-score on the curve, the rationalization takes place in the form of a replacement value. On implementation of the project, skewed and outlier sale numbers were eliminated. The data became useful and gave exact scenario to merge forecasted inventory phasing with capacity planning. Average daily sale reduced by 8-12%, days of inventory holding reduced by 13-18%.
What peculiar consumer behavioural shifts have you observed during the last year till now? The trust towards the efficacy and authenticity of digital platform has increase many folds. More and more consumers now prefer to opt for internet shopping. About 40% customers now intend to increment spends on diversion and tech empowering agents - Apps, OTT, DTH, and WIFI. Customers now prefer to have less discretionary spend on leisurely activities and lifestyle while
the focus towards health, hygiene and financial security has increased. The focus on quality and efficacy – hygiene and immunity has increased many folds since the onset of the pandemic. New products introduction with focus on quality and efficacy are on surge as Indian consumers are highly adaptable to new and innovative products. Purchasing power for consumers are same, but brand preference for FMCG is steadily making its way into the basket, e.g.: demand for Maggi across retail chains. For staples, the region-wise preference still plays a dominant role. But the new normal has shifted towards a bullish few than towards a bearish many. Online retail has become the mainstay today with the onset of pandemic and prolong lockdowns. How aligned was your business before the lockdown was imposed? If not, how did you reach your consumers to get the business rolling? We initially focused to plug the gap for essential SKUs supplies by focusing on Essentials Needs. To ensure the hassle and risk-free deliveries for these essential SKUs, we also moved ahead in diversifying the delivery services with strategic tie-up with Omni-channel delivery partners with Uber and Swiggy. WhatsApp Bot Deliveries and Phone Delivery for bulk essential deliveries for societies have been a rescue lifeboat for us and that is how we kept on reaching our consumers to get the business rolling.
As a supply chain professional, what do you think were the most important classroom lessons that helped you take the right decision during tough times and especially the
covid-19 pandemic? Learning never stops. Flexibility, agility, resilience, adaptability and effective collaboration are essential to meet the challenges of doing business during a period of significant disruption. Digitalization of supply chain supports these requirements. Understanding the supply chain vulnerabilities that emerged during lockdown plays an important role in helping us prepare for the future shocks, including a potential second wave of Covid-19.
What are the upcoming trends in FMCG supply chain that we would witness in the years to come? Increase in disposable income in rural India and low penetration level in rural market offers room for growth for FMCG supply chain logistics portfolio. Many multinational FMCG players are seeing India as a strategic sourcing hub for cost-competitive product development, high performance supply chain and manufacturing to cater to international markets. Also, the number of online users in India is likely to cross 850 million by 2025. 1 in 3 FMCG shoppers goes online first and then to stores. Trends such as research online purchase offline are becoming quite common and it is expected that 40% of all FMCG purchases in India will be online by 2020, thereby making it a US$ 5-6 billion business opportunity. Companies are aggressively digitizing their supply chains to boost annual growth of earnings before interest and taxes. New Omni-channel supply chain engagement models such as Buy online Pick up at store (BOPIS) are becoming increasingly popular.
Most traditional and modern supply chains do not have the capability to be very resilient or flex with a major disruption due to their linear nature. If there is one thing that the companies need to learn from the ongoing pandemic, it is the agility in the supply chain. Companies can make their supply chain future proof and pandemic proof by designing their supply chain in such a way that it is flexible enough to absorb shocks, major or minor, which come along its ways. Today’s supply chains need to be highly resilient, scalable, and flexible to meet the challenges of doing business during a period of significant disruption. 12 CELERITY May - June 2021
INTERVIEW When supply is restricted or lead times are unreliable, it’s important to identify stock items that are critical to your business and build an inventory plan to alleviate the risks. We identified focus articles across each category along the ones which are fast movers and have set stocking policies to help secure their supply and the optimum inventories. To ensure that stocks don’t pile up at warehouses during this period, a case lot-based allocation model was developed which helped in efficient picking in case lot, thereby reducing the warehouses turnaround time.
Technological development is transforming the last mile delivery. Congestion, emission, and delivery cost are three key challenges in the last mile delivery operation and digital infrastructure will help in addressing these challenges. The uberization of last mile will become a significant factor in meeting the e-commerce and digital surge. Last mile delivery is the most deconsolidated form of shipping strategy, implying it is multiple deliveries at numerous locations. Digital transformation would ensure that lastmile distribution operations are flexible and scalable, allowing for the rapid accommodation of shifts in demand for e-commerce shipping.
How can companies make their supply chains future proof and pandemic proof? Most traditional and modern supply chains do not have the capability to be very resilient or flex with a major disruption due to their linear nature. If there is one thing that the companies need to learn from the ongoing pandemic, it is the agility in the supply chain. Companies can make their supply chain future proof and pandemic proof by designing their supply chain in such a way that it is flexible enough to absorb shocks, major or minor, which come along its ways. Today’s supply chains need to be highly resilient, scalable, and flexible to meet the challenges of doing business during a period of significant disruption.
How should the new age supply chain network design happen? The unorganized retail sector in India has a huge untapped potential for adopting digital mode of payments as 63% of
supplychaintribe.com
the retailers are interested in using digital payments like mobile and card payments. Companies should delve into ways to interact and deliver directly to consumers. We need to focus on Omnichannel and flexible online delivery models. Also the focus should be on investing more towards infrastructure development for strong last mile delivery setup and on personalization of shipments. FMCG Players need to build infrastructure that allows customization of orders within the supply chain, without adding any cost. Smart supply chain control tower are the need of hour, which can anticipate potential problems in an automated and optimized fashion at a regional and global level. More and more companies are trying to transform their traditional supply chain models to digital supply networks (DSN). It is seen as a long-term solution to build a more resilient supply chain that can withstand disruptions like COVID-19.
What are the five aspects that are needed to make Indian supply chain network efficient? Agility in the network: Quickly responding to disruption necessitates a flexible network of vendors and stakeholders capable of handling unexpected shortfalls or even developing new goods. Setting up alternate manufacturing sites and assembly points, as well as using resources to reduce costs, would increase network efficiency.
capacity data with real-time market signals, businesses can better balance supply with projected demand. Digital Collaboration: The Supply Chain Network would be more effective as a result of digital collaboration between internal and external supply chain associates, retailers, and distributors. Knowledge collaboration can be supported by cloud-based supply chain systems and shared networks and software. It will also boost the quality and speed of decision-making within a company, as well as with suppliers and other stakeholders. Automation: Manufacturers have requested better insight into their vendors' supply chains in the wake of the Covid-19 pandemic, a trend that should be continued. To maintain business sustainability, companies are using automation and robotics to make their supply chains more autonomous. Decentralized Workflow: Decentralized teams will adapt rapidly to applied analytics insights and develop the rapid-recovery tools that can help businesses move during periods of disruption.
Network visibility and monitoring in real time: Real-time insight is provided by control tower solutions that incorporate data across the whole supply chain, 5G technologies, and blockchain. By comparing internal production
13
UNDER-40 SUPER ACHIEVERS
Augmenting Infrastructure Facilities to Boost Export Dr Abhijit Singh, Executive Director, Indian Ports Association, writes about the initiatives undertaken at Major Ports to transform them into world class facilities and to boost exports.
A
S part of Maritime India Vision (MIV) 2030, recently published by Ministry of Ports, Shipping and Waterways, globally benchmarked targets have been defined to help India develop best-in-class port infrastructure. The development of Indian Ports is estimated to drive cost savings to the tune of Rs6,000-7,000 crore per annum for EXIM clients and help unlock Rs70,000 75,000 crore worth of potential revenue. MIV 2030 targets 423 MTPA of capacity addition at Major Ports for the next 10 years. A total investment cost of over Rs33,400 crore has been envisaged for this capacity expansion. Out of this, approximately 95% capacity expansion is likely to be planned under Public Private Partnership (PPP)/ Captive mode by Major Ports. Currently, India has 5 Major Ports and 2 Non-Major Ports with greater than 100 MTPA capacity. There is a significant opportunity for India to setup Mega Ports and compete with global ports. In MIV 2030, based on detailed evaluation across key criteria for Mega Ports and emerging growth potential of clusters, 3 Mega Ports - Vadhavan-JNPT Cluster, Paradip Port, and Deendayal Port have been identified to be developed into Mega Ports with >300 MTPA capacity and Kamarajar is to be further evaluated in next 1-2 years for additional Mega Port on the East Coast. These Mega Ports on both East and West Coasts will be able to cater to high traffic potential in the next decade and develop Indian Port’s strategic importance in the South Asian region. Further, in order to modernize the infrastructure at ports, landlord model adoption for berth operations is being
14 CELERITY May - June 2021
promoted at Major Ports. As part of the long-term strategic interventions, Major ports need to move to a landlord model and bring in more private sector participation to drive operational efficiency. Apart from physical infrastructure, there is a strong focus on strengthening the digital infrastructure of ports. Several initiatives have been undertaken in recent times to improve Ease of Doing Business in Indian Maritime sector. For instance, The Port Community System (PCS) 1X has been operationalized in 19 port communities across 27 stakeholder types, thus enabling vessel related message exchange between ports and customs. Enterprise Business System (EBS) is under implementation at 6 Major Ports (Mumbai, Chennai, Deendayal, Paradip, V.O. Chidambaranar, and SMP Kolkata) and will be extended to other ports in the future. Moreover, Indian ports have adopted some digital initiatives such as on-road examination of containers, automated gate processing enablement, online berthing systems, etc. Further, Ministry of Ports, Shipping and Waterways (MoPSW) is leading charge to create a unified logistics system – National Logistics Portal (NLP) – integrating all supply chain elements in India across various modes of transport like roads, railways, etc. As a part of the same, a National Logistics Portal (NLP) Marine has been envisaged to solve many current EXIM challenges. This step is aligned with the global trend of building end-to-end supply chain solutions in shipping. NLP Marine will be developed in conjunction with the existing PCS1x platform and will provide API integration facility with various Port Operating Systems, Terminal Operating Systems,
Dr Abhijit Singh is an accomplished maritime professional and passionate educationist with multifaceted work experience in shipping, on-shore and as well “at sea”. He attained the distinction of becoming the youngest senior officer, equivalent to Deputy Chairman of Major Port at the age of 34 years. In the past, he sailed onboard ship and worked onshore in senior capacity with UK based oil major shipping company. He is closely involved in the policy decision-making process to bring sectoral reforms by making ports as drivers of economic change, saving logistic cost & time, easing port congestion, enhancing employability, capacity building and digitalizing & modernizing of ports.
and other stakeholder(s) systems. This entire ecosystem will be built on open standards with plug-and-play capabilities to allow changes at sub-system levels without affecting other parts and enable a heterogeneous multi-stakeholder environment to collaborate seamlessly.
Ed’s Note: What started as an initiative in the year 2019 to honor excellence of the young under-40 talents in supply chain, has today become a movement. We are now providing them a voice by way of this newly launched Celerity Supply Chain Super Achievers’ column. These voices are truly making a difference in the way supply chains function today and we would like to get their insights. Dr Abhijit Singh is a Celerity Supply Chain Super Achiever 2020
UNDER-40 SUPER ACHIEVERS
Digital Strategies in Procurement Procurement is adopting new digital strategies to infuse and analyze data models to enrich day-to-day operations and decision making. This, in turn, transforms how buyers interact with suppliers as these digital platforms have introduced new levels and types of collaboration, writes Prachi Misra, Senior Director, Refinitiv Ltd. (A Blackstone Operating Company)
P
ROCUREMENT is actively endorsing new innovative technologies and is enabling a progressive digitization of labor through automation of existing routine processes, thereby enhancing levels of performance at every stage of the procurement process. Robotics Process Automation (RPA), Machine Learning, Natural-language-processing (NLP) and Cognitive Technologies are automating the process and improving efficiency by more than 50%.
BENEFITS OF DIGITAL PROCUREMENT Digital procurement is actively reducing the time to launch bidding events and hence more events can be conducted. Earlier only high spend threshold events were being auctioned but now even project spend can be bid and auctioned for best results. Additional benefits that digital procurement strategies are driving are mentioned below: • Increased spend under management to drive both cost savings and cost avoidance, leading to improved bottom line • Improved risk mitigation over factors such as cost volatility, supply disruptions and regulatory compliances issues • Better resource management, including the ability to manage a contingent workforce and address skill shortages • Greater spend visibility and spend management across categories with better ways to look at spend through technological enhancements
supplychaintribe.com
• Better management of spend as all events are stored in an electronic format in the systems • Improved performance by suppliers as in a global ecosystem, even their other clients can see rankings provided by a given company for their services. Also based on cumulative ranking, suppliers will automatically be recommended to new organizations in the market who are scanning the market for similar services. • More active tail spend management by companies as now more supplier spend can be managed by tools, thus freeing up resources. • Enhanced supplier innovation and collaboration to both retain and increase the value driven by strategic supplier relationships • Faster growth as now procurement has access to many more global suppliers. Here are many digital strategies that are aiding procurement professionals in bringing the fine balance: Contract Management: Automated programs assess contracts and compare them against best in-class templates, flags terms and conditions that are nonstandard. They also map the buy side contracts to sell side contracts for greater visibility. Transactional Procurement: Robotics Process Automation has been deployed to emulate repetitive tasks, which do not require much human interpretation such
Prachi Misra is an Oxford university graduate and is part of Procurement Leadership Team of Refinitiv (a Blackstone Operating Company). She has worked in IT Strategy, Procurement Strategy, Business Change Management in leadership positions. She is an ardent supporter of innovative technologies in the marketplace, which are instrumental in reducing bottom line in today’s business world.
as invoice upload and approval. Strategic Sourcing: Natural-languageprocessing (NLP) technologies process textual data and provide a convenient way for purchasers to document requirements without resorting to dropdown menus or structured lists. Realtime question and answer process are introduced so that specifications are precisely refined, and organizations can engage with qualified suppliers promptly for better results and faster time to market. Machine Learning Algorithms can handle tasks that involve complex rules and require some form of pattern recognition to be executed correctly. Based on multiple sourcing events executed, machine learning algorithms learn from them and provide recommendations for
15
UNDER-40 SUPER ACHIEVERS negotiation strategies to deliver the best outcome for a bidding event. Support Processes: Smart workflow technologies link tasks conducted by different people and machines into a coherent process with well-defined handoffs — for example different routes can be followed for payment for transactional suppliers and strategic suppliers. For strategic suppliers due to higher spend limit more approvals may be required including finance approvals whereas for transactional suppliers, we have shorter approval processes owing to lower spend thresholds. Category Management: Machine Digital Procurement learning can be used to identify category assignments based on requisition text, hence streamlining the categorization of purchases. This, in turn, helps assigning accurate categories to various requisitions and helps determining accurate spend across categories.
Supplier Management: Automated programs conduct supplier diligence across several risk categories to process, review and score supplier data related to key risk indicators. Another application is in bidding events. After each bidding event, suppliers are ranked based on price competitiveness and ability to deliver, which in turn, is available to all other companies who are registered on that platform. Self Service Procurement: By adopting artificial intelligence, organizations can immediately source price competitive services from any location. This platform also enables effective collaboration among business users, procurement, and suppliers, thus ensuring smooth coordinated hand-offs during bidding events and when evaluating proposals received from suppliers. Cognitive agents and chatbots are actively being deployed whenever a deep knowledge base must be quickly
Bringing It All Together
searched to recommend the correct course of action. The chatbots that several service organizations now use in assisting contact-centre staff can answer a wide range of customer queries by selecting appropriate responses from a previously documented set of answers. In the source-to-pay process, vendor and business-procurement help desks often require similar sets of interactions, suggesting that a similar solution can be implemented. As the capabilities of cognitive agents enhance, they can also handle more complex tasks, such as evaluating an item’s global-sourcing potential by assessing its cost, quality, and technology requirements with records of similar products and sourcing decisions. By scrutinizing supplier capabilities, cognitive agents may even be able to provide recommendations on the selection of specific suppliers.
Digital procurement solutions (figure 3) are allowing for many more physical and digital inputs to be connected, driving better decision making and improving efficiency, and ultimately producing results in the form of: • Improved insights and strategies, leading to accelerated cost leadership
Digital Procurement capabilities work together to drive results • Enhanced process excellence, leading to greater organizational efficiency and effectiveness • Better assurance of supply and improved risk mitigation
Figure 3: Digital procurement capabilities work together to drive results
IMPROVED INPUTS Physical Data Files
IMPROVED DECISION MAKING & EFFICIENCY EXTRACT DATA FROM PHYSICAL DOCUMENTS
• Contracts • Specs • Bills of Materials
Unstructured Databases
Movement of Goods Tracking
Intelligent Content
Cognitive Computing
Advanced Should Costing
Cognitive Computing DETECT MOVEMENT OF GOODS
• Deliveries • Demand • Material Consumption • Receipt of Goods
Third-Party Data
DECISION SUPPORT
CATEGORIZE UNSTRUCTURED DATA
• Supplier Spend • Accts Payable
Sensors
Digital Solutions …which grow in value when used together
Predictive S2C Insights and strategies Decision support Cost leadership
Cyber Tracking
Collaboration Networks
Automated P2P Process excellence Efficiency and effectiveness
Advanced Visualization
ENRICH WITH EXTERNAL DATA
• Supplier Data • Social Media • Commodity Trends • Duties & Tariffs • Country Risk • Third-party Payment Clearing
RESULTS
Blockchain Robotics
AUTOMATION
Proactive SRM Assurance of supplies Risk mitigation strategies Supplier and category strategies
Source: Deloitte Whitepaper ‘Digital Procurement: New Capabilities from Disruptive Technologies’
16 CELERITY May - June 2021
COVER STORY
INDIA’s VACCINE DRIVE:
BEGINNING of the
ENDGAME? Being seen as the endgame of the Covid-19 pandemic, India’s vaccination drive has been hailed as one of the largest vaccinations drives in the world with it being the second most populous country in the world. While there are mixed reactions from the industrial diaspora on the extent with which the vaccination is being conducted in the country, the ultimate truth remains that for a country with 1.39 billion population, there are bound to be teething challenges. Our recent webinar, ‘Vaccine Supply Chain & Challenges – India & Globally’ dwelled on the imperatives that are needed from all the quarters to ensure effective & efficient vaccination drive. Our august panelists highlighted and elaborated on the global vaccination efforts, India’s vaccination strategy, our logistical prowess and people participation that will ultimately aid in the success of the Vaccination Drive. This Cover Story brings you the excerpts of the expert panel and the humungous task that is there upon us all individuals to make it succeed – TO GET VACCINATED!
COVER STORY
For a supply chain professional, there was never a ‘Normal” and there never will be one. “In the 21st Century, companies do not compete, but their supply chains compete. If everything being equal (Product, Specs, Service, Price, Features), what separates organizations from each other is their Supply Chain prowess, capability, and efficiency. What we call “Globalization” had forced companies to move their supply chains across international borders making the chains more “Interconnected” but at the same time making them more “decentralized” and hence more “fragile,” emphasizes Sanjay Desai, Regional Director – Talent Development, Humana International Singapore.
Your view on status of global supply chains and the impacts that Covid-19 has had on them so far. Corona virus has had far reaching ramifications on the world economy, supply chains/ financial stability including people health. As of mid-April 2021, we have more than 136 million cases of infections & close to 3 million deaths across the globe. There was never a worst calamity in the world (other than Spanish flu) of this magnitude. Specifically for emerging markets, this could be the worst phase as well as a gamechanger over the next 5 years. The scars of year 2020 will be etched in our memory for lifetime. In the 21st Century, companies do not compete, but their supply chains compete. If everything being equal (Product, Specs, Service, Price, Features), what separates organizations from each other is their Supply Chain prowess, capability, and efficiency. What we call “Globalization” had forced companies to move their supply chains across international borders making the chains more “Interconnected” but at the same time making them more “decentralized” and hence more “fragile”. Over last three decades, organizations and their supply chain are trying to find new paths, new ways to gain advantage over their competitors in the pursuit of making their products cheaper and available at greater speed to Customers at the same time. And in this penchant, Cost superseded Quality in all aspects of the Value Chain…Supply Chains became leaner and leaner over the years, leaving no room to absorb any disruptions.
18 CELERITY May - June 2021
Eventually Corona Virus was the “Last Straw that broke the Camel’s back”.
A lot has been talked about “new normal” for supply chain in post covid period. As a Supply Chain professional of over 30 years and having run supply chains in 11 different organizations, what are your thoughts? Personally, I do not like the word “New Normal” if this is being used purely from a supply chain point of view, may be from a colloquial and business dynamics perspective the “new normal” may make some sense. I would rather address this as BC = Before Covid and AD = After Disease for supply chain organizations. For a supply chain professional, there was never a ‘Normal’ and there never will be one. Almost everything is dynamic in supply chain and that is the way it should be, else we will not be able to develop supply chain leaders. Businesses evolve every 3 to 4 years, so does supply chain professionals and with them the supply chain models too evolve. In supply chain, “change” is one “mantra” that drives efficiency, scale, creativity & eventually achieving better customer experience or satisfaction. As a leader, one needs to hedge working capital costs in multiple ways from time to time as the dynamics of the business demands. If you take a good look at organizations with world class supply chains, these supply chains are “tailormade” for their customers / markets/ geographies, often, you will find one common factor and that is supply chain thought leadership. These leaders have honed their ability to see into the
future, they are willing to invest in people, processes, and tools (In that exact order) as a driving force. In these organizations, the senior executives/ board members understand & acknowledge the value that supply chain brings to the table.
India is called “The Pharmacy of the World”. What efforts Indian government and companies are taking to ensure that India will be able to support the huge requirements of vaccines all over the world? India produces 20% of all pharmaceuticals consumed worldwide, making the country the largest manufacturer and supplier of drugs globally. At present, India is using two vaccines (AstraZeneca’s COVISHIELD and Bharat Biotech’s COVAXIN. Besides taking care of the domestic needs, India has already started to export vaccines to many countries like Bangladesh, Bhutan, Nepal, and Maldives as “neighbourhood first” policy. Serum Institute of India is geared up to produce 100 million doses of the AstraZeneca COVID vaccine each month. Plus, we have 5 to 6 more vaccines in the pipeline expected to be available by October / November 2021, for manufacture and domestic use. Some of these are (Zydus Cadila, Dr Reddy’s, HDT Biotech (US), and Biological E). However, considering the scale of these manufacturing requirements, India would require huge quantities of raw materials needed to make these vaccines possible. India is working with the US to address this key factor. We must recognize the effort of Bharat Biotech and Serum Institute for working 24/7
COVER STORY Almost everything is dynamic in supply chain and that is the way it should be, else we will not be able to develop supply chain leaders. Businesses evolve every 3 to 4 years, so does supply chain professionals and with them the supply chain models too evolve. In supply chain, “change” is one “mantra” that drives efficiency, scale, creativity & eventually achieving better customer experience or satisfaction.
even during shutdown periods with prior government approvals and assistance. As a supply chain professional, I strongly feel that India’s supply chain was “bent/ tested aggressively, but not broken” during the pandemic.
Covid-19 vaccines are relatively new to the world. What differences do you see in handling requirements in relation to the vaccines (non-Covid types) of the past? Both COVISHIELD and COVAXIN are easy to store as they require to be kept at 2-8 degree Celsius. Most vaccines commonly used in India are kept at this temperature range. This makes transport and local storage of both Covid-19 vaccines safe and easy for all parts of the country. There are two more vaccines, which are being administered globally are 1) Pfizer and 2) Moderna. Indian Government is still debating whether to allow these vaccines to be used in India. Both vaccines use mRNA technology, which involves using genetic material from the virus called mRNA, which directs the body’s cells to stimulate the immune system. This method has not been used to create a vaccine so far. While this method is simple, once you have the RNA Platform available, to manufacture on a large scale, both vaccines require stringent temperature requirements, and the range also varies considerably. Moderna’s vaccine needs long-term storage at minus 20-degrees Celsius (minus 4 Fahrenheit), while the Pfizer vaccine requires minus 70-degree Celsius (minus 94 degrees Fahrenheit) or even lower – one of the coldest temperatures ever seen in a vaccine. Given our infrastructure especially in
supplychaintribe.com
tier 3 and 4 cities and in rural areas, these two vaccines are not ideal to be used. However, we do have sufficient infrastructure available in our main metro and mini metro cities where we are able to store and transport (20-degrees Celsius and -70 degree Celsius).
As global economies are slowly finding their feet in a murky environment, which are the enablers of success to fight such a huge disaster? What have we (the industry) learnt from this experience to apply them? There are many lessons that we can articulate but I prefer to talk about these top 3-4 which can be industry agnostic: • First lesson was about conducting Risk Assessment. A significant learning from Corona virus that most global and world class organizations carried is to build “Risk Assessment” right upstream in your value chain. Incorporating risk management, upstream in value chain will drive a mindset of “engineering the supply chain” v/s engineering the quarterly Balance-Sheet”. • Second lesson learnt is to increase visibility in your entire value chain like your 3rd and 4th Tier suppliers, your employees, your inventories, major customers, and their demand / supply exigencies. If you have visibility of your entire supply and demand networks, your ability to be agile as well as resilient increases many times over. • Third lesson learnt, there is a certain benefit in “collaborating” across your value chain starting from left (your customers) all the way to right (your suppliers) creating value
driven collaborative strategies like demand sensing, integrated business planning, demand drive inventory planning, segregation of customers and finally a multi-source “Integrated Supply Network” of smaller supply networks across geographies. • Fourth lesson learnt is to “optimize your order management and fulfilment capabilities” to be able to fulfil your customers from anywhere to anywhere. Proactive customer engagement, adding huge value to customers P&L and speed of operations will be of prime importance as highlighted never before. • Finally, organizations realized that investment in technology, re-skilling your employees helping them to be comfortable with new tool sets and using advanced communication tools are critical success factors in future. The only way to improve in such situations, is to leverage your most valuable asset “Your People”.
19
COVER STORY
We are taking help from the representatives of the community to drive immunization in rural areas. “Believing in ‘One size doesn’t fit all’ strategy, we have observed that self-registration mechanism is pretty less in rural areas, therefore we have adopted facilitated cohort approach to increase the coverage. Strong leadership from the expert group, election model approach, learnings from Universal Immunization program, an efficient IT system and robust IEC strategy have been the strong pillars for the effective roll-out of the vaccination drive,” shares Dr. Mohan Lata, Surveillance Medical Officer at World Health Organization.
What are the key strategies in the effective roll-out of vaccines? The Government of India is using the experience of Universal Immunization Program dovetailed with the election model approach. MoHFW develops Operational guidelines whenever there is new vaccine introduction so that uniform practices are being followed across the country. Similarly, for COVID-19 vaccination as well operational guidelines have been developed and followed across the country. As enumerated in these guidelines, a covid-19 vaccination center needs to be prepared, which should have three dedicated areas: waiting area, vaccination area and the observation area. Each vaccination center is deployed with the dedicated trained vaccination team. This team comprises of one security personnel at the entrance, one verifier who checks for the identity and is also using Co-Win portal, this is the portal developed by MoHfW, which is being used for the registration, appointment and vaccination. then one vaccinator and the last 2 team members work in the observation room and also overall manages the session site. This dedication structure with the dedicated team is the adaptation of the election booth model. This adaptation has been
taken from the election booth model. We have also adopted some practices of universal immunization program and these practices are like development of micro-plans, information, education and communication materials and capacity building of healthcare workers on topics such as injection technique, cold chain maintenance, adverse event following immunization, four key messages and biomedical waste management. These are some of the protocols we are deploying for scaling up the vaccination drive. Along with this, the vaccination primarily is targeted for three major groups. These groups were identified by the National Expert Group on Vaccine Administration for Covid (NEGVAC). The first group was healthcare workers, then frontline workers and the priority age group which was earlier above 60 years and people above 45 years with selected comorbidities but now it is above 45 years. The list of healthcare workers was uploaded at the district level using the Co-Win portal and for every session, there was an automated generation of the due list. Beneficiaries receive messages regarding the time and place for the vaccination. The similar process was followed in the second phase as well. For the priority age group, Co-Win
2.0 which is the upgraded version of the earlier portal is being used where we no longer must upload a list of beneficiaries for registration and vaccination. The beneficiaries now can self-register themselves using Co-Win portal or Aarogya Setu app; or can also choose for on the spot registration. As you know health is a State subject, we have undertaken some targeted approach like campaign for women on women’s day, mobilization of pensioners, inclusion of Panchayati Raj representatives, retired government people etc. As one size does not fit all, we have also observed that the selfregistration mechanism is less in rural areas. Therefore, we have adopted facilitated cohort approach which included mass mobilization and on-thespot registration cum vaccination of the beneficiaries. Strong leadership from Expert groups, Election model approach, learnings from Universal Immunization Program, efficient IT system and robust IEC have been strong pillars for effective rollout and implementation for COVID-19 vaccination.
Is the current vaccination drive as successful as any other
This largest vaccination drive is effective through concerted and tireless efforts of the health workers, along with the gaiety inter-sector and inter-department coordination. For any mass drive to be effective, a definite structure with demarcation of roles and responsibilities is vital, which was done through the guidance of NEGVAC and development of operational guidelines. 20 CELERITY May - June 2021
COVER STORY immunization drives that India has been doing over the years? Usually in mass vaccination drives, we introduce vaccines at one go for the selected regions. But for Covid-19 vaccination, we have broken down the drive into phased manner. I believe we are keeping up pace with the planned roll-out and achieving the target. For elderly age group, different approaches have been deployed for the effective roll-out and implementation. Learnings from past vaccination drives and UIP is helping us.
How has supply chain been maintained from the vaccination drive? Has the government of India formed any public private partnership or any secondary distribution mechanism? Supply in India includes delivery of the vaccines from Government Medical Store Depots (GMSDs). In total, we have 4 GMSDs in the country – Karnal, Mumbai, Chennai, and Kolkata. From GMSDs, the vaccines come to state vaccine stores followed by the Regional Vaccine Stores or Divisional Vaccine Stores. From there, the vaccines are delivered to District Vaccine Stores. From these district vaccines stores, the vaccines reach to Cold Chain Points and these are usually situated at Block level i.e., community health centers or primary health centers. During this entire cycle of supply, the cold chain of the vaccine is maintained through usage of the insulated vaccine vans and cold boxes. From these cold chain points to the session sites situated at the last mile, the vaccines are sent on the same day i.e., the vaccination day in the vaccine carriers. These vaccine carriers are usually accompanied by the conditioned ice packs in order to maintain the ambient temperature of +2 to +8 degrees. To track the entire system of supply chain, we have electronic vaccine intelligence Network (EVIN) system. This helps in temperature monitoring and tracking of stock of vaccines and expiry date. The concept of FIFO is used to avoid vaccine wastage. For any unopened vaccine vial at the sessions site, we maintain the reverse cold chain using the same prescribed conditions. Covid-19 vaccination is also done at the private hospitals, so GoI has
supplychaintribe.com
also acknowledged that if these private hospitals have sufficient capacity for storage or they can function as cold chain points, they can stock vaccines for their own consumption. This is the kind of PPP model the government is following as far as Covid-19 vaccination is concerned.
What is the role of NEGVAC? A National Expert Group on Vaccine Administration for COVID-19 (NEGVAC) has been established, which provides guidance on all aspects of COVID-19 vaccination including prioritization of population groups, procurement and inventory management, vaccine selection, vaccine delivery and tracking mechanism, etc. NEGVAC is chaired by Member (Health), NITI Aayog and cochaired by Secretary (H&FW). NEGVAC has representation of Secretaries from Ministry of External Affairs, Department of Expenditure, Dept. of Biotechnology, Dept. of Health Research, Dept. of Pharmaceuticals, Ministry of Electronics and Information Technology, representative from five State Governments and technical experts. The government is utilizing the experience of elections and universal immunization program and ensure that there will be no compromise on scientific and regulatory norms and other Standard Operating Procedures (SOPs). The group also ascertains equitable distribution of vaccines to other nations. The group also provides guidelines on the vaccine candidates’ selection, procurement mechanisms, prioritization of population group, financial resources requirement of vaccine procurement and logistics. The group guides the MoHFW on the vaccine safety, AEFI, and guides the department on creating awareness regarding the vaccination drive.
following in the rural areas. Likewise, teachers can be the role models for parents so that they can come forward for vaccination. We are using FAQs developed by MoHFW to give answers to the doubts and queries of people. As mentioned earlier, strong advocacy and interdepartmental coordination is our key of successful implementation.
What are the lessons learnt from the vaccination drive? What are the opportunities that it has presented? This largest vaccination drive is effective through concerted and tireless efforts of the health workers, along with the gaiety inter-sector and inter-department coordination. For any mass drive to be effective, a definite structure with demarcation of roles and responsibilities is vital, which was done through the guidance of NEGVAC and development of operational guidelines. IT and IEC are the two pivots for this vaccination drive which are also the opportunities to see forward. The strengthening of IT component of immunization system and robust IEC (like FAQs for citizens, regularly busting fake news) is yielding good results.
How are you motivating people to come out and get vaccinated? One size does not fit all. Strategies could be different for everyone be it state or a district. We are taking help from the people who are the representatives of the community. These practices have been replicated from the experience of previous vaccination drives. We are reaching out to panchayat level elderly people to motivate others by taking the vaccine jab. This is one strategy we are
21
COVER STORY
In our war against the Covid 19 pandemic, the battle is now. “We will win the battle against Covid eventually. Establishing a secure supply of vaccines, augmenting disease surveillance and scaling up social mobilization will be key to how soon we win the battle.” asserts Dr. Raj Shankar Ghosh, Senior Advisor – Vaccine Delivery, Bill & Melinda Gates Foundation.
Which are the factors that are critical for vaccination planning perspective? Which are the roles that you see technology can play in this? Before answering this question, let me take you three decades back. I was working for an NGO delivering Primary Health care in one of the desert districts of India in Rajasthan. One day when we were planning on improving coverage in far flung villages in the district, a health worker told us that planning for vaccination basically required a 3P fulcrum. Sufficient & stable supply of Vaccines. Product Enough vaccination centers. Improved access. Places Empowered People. People who are aware of the vaccine. People who are trained to vaccinate. And people who will mobilize the population for vaccination. The 3P fulcrum is relevant in routine immunization or large campaigns like Polio eradication or adult vaccinations like Covid vaccination. As we plan for scaling up vaccination coverage in routine program and campaigns, we must answer the following questions. • What is the production capacity of vaccines currently being used in the
program? What is the committed supply to India? We can only do as much as the product supply to our program is. • Are centers evenly distributed? Numbers & equity. Map the centers. Find out vacant spots. Are both public and private sectors being effectively utilized? • How many trained people do we have? Have we engaged the full potential of health care workers in both public and private sectors to vaccinate our people? India and many other countries in the region have prepared early for Covid vaccination program. Following 3 P principle. (i) Committed vaccine availability. Domestic and global supply. (ii) Covid-vaccination appropriate delivery infrastructure available in public and private sectors. (iii) Trained manpower available in public and private sectors. Completed their training through a mix of online and face to face trainings and demonstrations. Prioritized population based on local clinical and epidemiological data. Now let me address how India planned its Covid vaccination program. Before I come to planning, let me tell you an anecdote. About 20 years back in a district in Jharkhand State where I was in-charge of India’s National Polio Surveillance Program, there was one district which was a poor performer for many rounds.
A new district magistrate joined the district a few months prior to Pulse Polio program. In just about 2 months vaccination coverage improved. I went to meet him and asked him what has changed in the last 2 months. He told me that there were gaps in the program, and he had met the gaps with the GAP strategy. The GAP strategy is: Governance; Accountability and Planning. If we have a strong governance, if we have clear roles and responsibilities and make people accountable for their activities, and if we have a good microplan in place, then a program is destined to succeed. In India for Covid vaccination program, we have seen governance executed well by the NEGVAC committee which is a high level inter-departmental committee formed at the apex reporting to the highest authority in the Country. Principal accountability lies only with few people – at Central level, State land at district level. At district level District Magistrate is overall in-charge of the program coordinating all locally available resources for implementation. Micro-planning has been done by frontline workers at Primary health centers. As they have done for other programs like Mission Indradhanush and National Immunization Days. There is a 4th P – Partners. Partnership in vaccine delivery has always been strong
Surveillance both in terms of reporting, testing and action following availability of relevant data is critical to identify hot spots of transmission. Immediate action – both in terms of preventing transmission and protecting the population with vaccines must be deployed immediately. 22 CELERITY May - June 2021
COVER STORY in India. With Covid vaccination new partners like World Bank and ADB have come forward to support vaccine delivery in South Asia Region. Existing partners in India include WHO, UNICEF, UNDP, JSI, PATH, GAVI, CHAI, the Technical Support Units in the States and BMGF to name a few.
Is there any technology case study to manage the entire value chain in a cost effective and secure manner? For every successful technology, primarily in healthcare, there have been four attributes that we have to acknowledge: 1. Technology was developed because there was a demand. There was a problem or an aspiration that present solutions could not solve and therefore there was a need to design and introduce a new technology solution. 2. Technology must adapt to current health systems. This means it can be scaled up in the system with efficiency, speed, and minimal investment. 3. Technology needs to be affordable for the government to scale up in public health programs. 4. Technology must be user-friendly. One example that I would like to quote here is of Vaccine Vial Monitors (VVMs). A VVM is a label containing a heat sensitive material which is placed on a vaccine vial to register cumulative heat exposure over time. The combined effects of time and temperature cause the inner square of the VVM to darken, gradually and irreversibly. A direct relationship exists between the rate of color change and temperature: The lower the temperature, the slower the color change. The higher the temperature, the faster the color change. The VVM is a circle with a small square inside it. It can be printed on a product label, attached to the vaccine vial or tube, or attached to the neck of an ampoule. VVM is the only tool among all time temperature indicators that is available at any time in the process of distribution and at the time a vaccine is administered indicating whether the vaccine has been exposed to excessive heat over time and whether it is likely to have been damaged.
supplychaintribe.com
VVM along with the expiry date on the vial clearly indicates to health workers whether a vaccine can be used at any given point of time. I was a primary health officer about 25 years back. In the vaccination program that my PHC implemented, one of the rigorous and mandatory tasks was to ship back random vaccine vials from our remote primary health center to a centralized laboratory in Kasauli in Himachal Pradesh. This whole process was both costly and complex. From across India, everyone had to send back random vaccine samples in reverse cold chain for the Central Research Institute laboratory at Kasauli to check efficacy and the potency and the cold chain status of the vaccine. By the time the PHC would receive the status report back from Kasauli, the vaccine would have been administered. In 1995 India launched Pulse Polio program. A nationwide vaccination campaign with Oral Polio vaccine. In such campaigns a clear understanding of cold chain status of the vaccine would be critical to the quality of the program. There was no way one could understand whether cold chain had been effectively maintained during supply of the vaccine. Therefore, a technology was introduced in the form of vaccine vial monitor. This boosted confidence not only for vaccinators but also for general public. It was so easy to distinguish the two colors that parents themselves could understand whether the vaccine being delivered to their children was of good quality. A good technology in public health programs should be easily interpreted. A second example of an effective technology would be the Co-Win platform that has been launched for Covid vaccination. It was clear in early stages of planning that in order to address this large cohort of the adult population, the program had to have a very systematic pathway from registration to tracking to recording of any adverse impact to certification process. And all of these needed to be delivered through a single window application. Based on principles of a successful existing supply chain technology in Routine immunization, eVIN technology, an application was developed for this
purpose. This application is CoWIN technology. A technology that registers all beneficiaries, tracks them, records all serious adverse events and on completion of the vaccination schedule provides a certificate that records the individual’s Covid vaccination program.
What are the lessons learnt from the vaccination drive? What are the opportunities that it has presented? In my career spanning 30 years in public health, there have been 3 defining moments attached to three vaccination programs. These programs taught me some fundamentals of vaccination like a teacher patiently. Pulse polio taught me the intricacies of partnerships in vaccination programs. Japanese Encephalitis vaccination taught me the intricacies of planning a campaign & the pathway from a public health problem to policy to program. Rota vaccination taught me the value of meticulous evidence collation for an effective vaccination program. My debt to these 3 programs is lifelong. Coming back to the current scenario, one thing that we need to be very clear is that the world is ultimately one big village. One of the things that I am very proud of is the Vaccine Maitri initiative of Government of India as they opened up its vaccine supply for its neighbors and other Low- and Middle-Income Countries across the globe. This initiative truly manifests everything that the spirit of India stands for in its recognition of every life having equal value. Vaccine Maitri that has served more than 80 countries worldwide is truly a very bright colored feather in India’s shining cap. The second lesson that we need to look at is the importance of social mobilization in the program. When the vaccination program began, we felt that there would be a massive vaccine eagerness. However, when the vaccination program rolled out, a few were hesitant to accept the vaccine. Initial coverage took time to accelerate. There were multiple appeals from Health Ministry and other Ministries, leading medical professionals as well as from various leaders of the society. Soon
23
COVER STORY the coverage picked up and now we are seeing 3-4 million doses being delivered every day. Third thing we need to keep in mind is that technology is a very good solution, but we need to be prepared for back-up plan. If sometimes technology solutions perform below expectations albeit temporarily, we can quickly have an alternate plan in place. There always needs to be a mitigation plan. For example, when Covid vaccination program was launched in India, at some places media reported that the Co-Win app was not working to its full potential. The States however did not allow that to slow down the program. They immediately took help of Google sheet and captured data. Within a short time CoWIN was
functioning at its full potential and the States adopted CoWIN application fully. Such mitigation plans are very important for large scale programs. Countries will have to prioritize three things presently. The 3 Ss. Supply security of Vaccines Surveillance Social mobilization The three are self-explanatory. Vaccination must reach maximum number of people both in terms of eligibility criteria by age and coverage. To do that, the world needs to have enough vaccines. To have enough vaccines, production must be ramped up. And vaccines must be distributed equitably, so that no Nation, no segment of population is deprived of benefit of
vaccines. Surveillance both in terms of reporting, testing and action following availability of relevant data is critical to identify hot spots of transmission. Immediate action – both in terms of preventing transmission and protecting the population with vaccines must be deployed immediately. Effective Social mobilization is imperative to achieve victory against the virus. Social mobilization will ensure that more and more people adopt Covid appropriate public health practices and extend their arm for vaccination. India and the world will win the battle against the virus eventually. The speed to victory will depend on the speed and extent to which we embrace the 3S tools.
Technology has been playing the role of an enabler in solving infrastructure problems. “While the world was focused on Covid-19 vaccines, we turned our sights on another key problem: proper storage and delivery. We built and delivered efficient medical coolers & freezers that precisely cool and store vaccines for days, even without regular power. Because if there is anything better than keeping India safe, it’s to keep India safer,” asserts Jaishankar Natarajan, Associate Vice President, Head New Business Development - Appliances Division, Godrej & Boyce Mfg. Co. Ltd.
What challenges do you see with respect to wide geographies that India possesses in terms of vaccine delivery? There are many challenges that we face in the urban, peri-urban and the rural areas. The first challenge is scale. The entire immunization program if you look at the scale at which it was operating was meant to cater to around 27 million population. For COVID vaccinations its over 10 times this figure. It is mindboggling scale, which needed to be immediately deployed. That is the kind of pace we are talking about. Government is going to co-opt many more centers which are hospital facilities, healthcare centers, which are currently available for various other activities into this vaccination program. Establishing protocols, ensuring the same rigor and procedures
24 CELERITY May - June 2021
to follow in all these co-opted healthcare spaces is of paramount importance. Cold chain is a big challenge. The scale of vaccine movement between the urban set up would require large depot to depot transfer either through mobile, refrigerator vans or through temperature-controlled cartons, which are currently being developed and scaled up in the country. It is not available at a scale which is required. There are last mile challenges as well, in terms of delivering and distributing vaccines, which needs to be undertaken at a large scale. Large amount of planning of where exactly the vaccines are required and how fast it needs to be delivered daily needs to be done a continuous basis to understand and deliver the coverage we are looking at. This is about urban side. The rural side has got several challenges in terms
of physical infrastructure not being available. Instead of people coming to hospitals, there is a need to set up camps closer to villages and then motivate people to visit the camps. Availability of healthcare workers, mobile cold chain solutions and ensuring that the right kind of solution is available so that you have large coverage possible in each of the outreach programs is of paramount importance. COVID-19 vaccines are extremely temperature sensitive. Under- or over cooling can affect vaccine potency, leading to compromising its efficacy. This has a direct implication on citizen health and as well cost overrun of the vaccination program. Given the huge economic implication of the vaccination drive, any wastage or inefficiency in the vaccination process due to logistical issues related to
COVER STORY Given the huge economic implication of the vaccination drive, any wastage or inefficiency in the vaccination process due to logistical issues related to cold chain must be avoided. Our medical refrigerators are designed to deliver such precision cooling despite power cuts and have qualified tough international WHO PQS certification standards. Currently, to meet the increasing demand, we have enhanced our production capacity of these specialized products by 250%. cold chain must be avoided. Our medical refrigerators are designed to deliver such precision cooling despite power cuts and have qualified tough international WHO PQS certification standards. Currently, to meet the increasing demand, we have enhanced our production capacity of these specialized products by 250%.
Will we be able to keep pace with the infrastructure development and the quick roll-out that is needed for the vaccine? Technology has been playing the role of an enabler in solving infrastructure problems. Let me give you an example, Continuous Power availability & to a large extent when available, the quality is inconsistent in peri urban and rural areas. Outside of India, it is a major challenge in most of the African countries. So, when we came into picture 5 years back, we did due diligence in understanding the issue with the supply of power. We came across several challenges. Firstly, there were power deficient areas. In those areas, we attempted the adoption of alternate energy sources such as solar. The second challenge was where power was available, the quality of power was lacking in terms of voltage capacity, surge protection, huge amounts of spikes, etc. We found out something very unique that wherever the stabilizers were given separately along with the equipment for running cold chain, we found that either the stabilizers were defunct, or they had been taken off for general use for other purposes. We came up with a solution to provide in-built voltage stabilizers within the unit itself. We made it very powerful to withstand the surges of voltage of 2-4kv and ensure that the product reliability is taken care of in such adverse quality conditions. In case of non-availability
supplychaintribe.com
of power, we devised solutions which are not dependent on battery because the battery itself reduces the life of the equipment. We developed equipment which can run directly on solar power. A lot of technology innovations happened in that area. In many rural areas, service intervention is extremely challenging. In case, something does go wrong, one needs to have the ability to acknowledge that there is something wrong, and it quickly needs fixing. Remote diagnostics need to be built in. Second is to reach to the equipment itself and fix the issue so that vaccine storage or supply does not get hampered. We had to come out with solutions which had hold over time of maintaining the required temperature within the equipment of about 2-8 degrees for over 3-4 days and in some cases where accessibility is very remote, we ensured that technology provides solutions that our refrigerators can maintain the desired temperature without any power and can remain stabilized for over 15-16 days. These are the interventions which led to lot of innovations in the equipment. There is one more example of us deploying such solutions for delivering vaccines across Brahamputra riverbanks. So, accessibility to several villages went up because of such deployment.
There is a feeling that India has not stepped up the gear on the vaccination drive. What interventions had to be quickly taken to bolster capacities for an active response? When we talk about infrastructure for COVID response, we need to also look at the manufacturers’ infrastructure who have designed the entire plant to serve certain capacity requirement. This
requirement has suddenly gone up 10X. While we have seen this coming last year, we have preempted by proactively investing in developing extra tools, augmenting machinery well in time, etc., to cater to this surge in demand. We also went back to our suppliers to get their toolings in place. There are several aspects of reaching the vaccine to the last mile and I feel that we still need to catch up on that front. Having said that, there are companies who are willing to come up with temperature controlled cold boxes, quickly deploy them to ensure that distribution does not get hampered, there are mobile solutions coming up, which will enable smooth last mile delivery. Pace of augment would need to be reviewed by the concerned authorities. As India takes the immunization drive to the hinterland, there will be a big challenge—to store vaccines and deliver them. We are trying a concept called Mobile Clinic. We ran a similar program in Assam, called Boat Clinic where our refrigerators were mounted on boats and they moved from island to island. Once on the field, they come back only after a week or so. The equipment should hold the precise temperature for a week or 10 days. We have taken the same concept in the Covid-19 immunization drive. We did a pilot in Maharashtra with a 25-litre refrigerator in a van and our R&D team took the van to the hinterland of Maharashtra and ran it successfully for three days consecutively without any electric supply. We are now ready to offer the mobile van solution to various health organizations and governments to take forward the entire immunization program across the country. Godrej is also running a training program to educate healthcare workers
25
COVER STORY on proper use and maintenance of their equipment, temperature monitoring and troubleshooting. It has already trained 600 frontline workers. The company has an extended network of 680 service centres across the country and 5,000 feet-on-street technicians.
What are the possibilities of deploying the current distribution network for vaccine distribution? What kind of technology augmentation we require? From the tracing point of view, whether there have been any breaches. There are several interventions which are being put in place. From distribution point of view, RFID tracking, remote monitoring of cold chain temperature of each box is maintained. It is relayed as the vehicle moves along the journey. Any breach is recorded. There are protocols in place such as how many hours of breach is acceptable, what kind of breaches are allowed. From a point of view of taking a call if any compromise has happened during the vaccine movement, that can be ascertained and has already been put in place. Most of the distribution chains have already deployed such technology. In terms of storage, there are close to around 1 lakh units and several more have been deployed recently. The Central Government has connected all of these devices in their EVIN portal, which constantly monitors temperature. Each of the devices have their own dataloggers to ensure alternate set of data is available at any point in time. This also ensures that local level data monitoring is also not compromised. The area where we still lag is in the last mile delivery. Currently vaccine carriers are cold boxes which currently don’t have any mechanism by which we can ascertain the last 8-9 hours of journey of vaccine is able to sustain itself in terms of temperature. There have been devices which have now developed across the globe to address the challenge, which used remote monitoring mechanisms to ensure that even the last mile is covered. WHO is putting together a testing and governance protocol to ensure these devices are certified. Once those devices hit the market, we can confidently say that the entire journey from the pharma company till the last mile is completely monitored and reviewed and the vaccine
26 CELERITY May - June 2021
efficacy is ascertained without any breaches.
What are the remedial plans in place if any temperature exertion is reported during the last mile transport? How do we analyze whether the product has lost its efficacy or not? Till now, one of the standard practices that government followed for breaches, include vaccine vial stickers. These tend to discolour or become black if it is exposed beyond a certain time over 8 or 10 degrees. That is one very good indication whether the vaccine vial has been breached over a longer period of time. But on the freezing side, the sticker doesn’t work. In that case, the medical practitioners need to shake and check for cloud formation of liquid to detect breach. Bulk of the problem in the supply chain, as per our experience, is that lot of vaccines are actually freezing rather than breaching on the higher temperature side. Of late, there are real time monitoring solutions being deployed in terms of cloud-based visualization of what’s happening on a real-time basis. During every outreach program, the district supervisor will be able to see what exactly is happening to the cold box during movement. This is more at a pilot stage. I am sure conversion will gain pace given the scale at which we need to deliver the vaccines. These solutions are applicable across the length and the breadth of the country. In fact, we are providing global sim cards by way of which it can be deployed in Africa also and can be monitored from here.
What is Vaccine Vial wastage roughly and at what stages it may occur and how to control that? One is vaccine wastage because of temperature breach. The second is when a vaccine vial has been opened and the entire vial doses could not be administered. While returning the vial to stock, a proper protocol needs to be ensured. If this is not maintained, then the vial could go wasted. Then there are some wastages when vaccines are returned, and reverse logistics scenarios aren’t up to the mark. Planning can be one major issue which can iron out these challenges. Deployment of digital technology to track & monitor and
ensure proper planning tools, so CoWin platform itself is being used to ensure that you have only that many doses’ vaccines delivered basis the requirement so that it is evenly distributed, and it is available everywhere. Now there are no pockets of high dosages and the pockets of scarcity. So those aspects can be well managed by the deployment of technology and I think we are in the right direction of ascertaining that. Government of India has laid out clear guidelines and protocols on how vials should be used and how they should be maintained back into the cold chain when it isn’t fully used. There is always difference between planning and practice, which needs to be followed to ensure that what we set out to do is accomplished.
What are the lessons learnt from the vaccination drive in terms of logistics? What are the opportunities that it has presented? Technology deployment to overcome infrastructure barriers to facilitate wider outreach. Training to standardize practices across states/ vaccination centers. Building scale to meet Covid vaccination coverage plans. Planning & Distribution to reduce wastage and ensure vaccine availability at all centers.
COVER STORY
We need to continue to promote local pharma manufacturing instead of flying vaccines from far off countries. “India is one of the largest vaccines producers in the world. Almost 2 out of 3 children globally receive vaccines made in India. The supply chain and quality control standards are already well laid in the country. What needs to happen is that the countries outside India need to come up with more localized solutions. We are witnessing increased joint ventures in this direction lately. Having the ability to produce vaccines locally offers many advantages and is the right way to go,” states Michael Culme-Seymour, Vice President and Managing Director APAC at Roambee, Former Consultant to the World Health Organization.
Is there any specific success formula in terms of the roll-out that other nations can emulate? As we know that first country to roll-out vaccination was the US and, in my view, it was orchestrated in a very organized manner. The credit for this goes to public private partnership. I remember watching the interview process at the Senate hearing where UPS and FedEx had to present their strategies on the effective delivery mechanism that they have planned for the vaccine. Does the packaging work? Do the temperature monitors work? On the international community, Israel and the UK picked up speed, however quickly things in Europe the roll out has not been so successful. The reason for this was more inclined towards political disagreements coupled with delays from Pfizer and AstraZeneca. Efficacy questions were being raised on the AstraZeneca. This hampered the confidence of populace to come out and get vaccinated. I believe the logistics industry has played its part well in reaching the vaccines to the last mile in the most secure manner. Countries have stepped up their vaccinations drive, and the kind of euphoria being witnessed during the arrival of the vaccines is tremendous confidence booster. India is sourcing within India and it seems to work well where most countries have to fly their vaccines from other nations. Moreover, it was pleasing to see the action that COVAX and UNICEF took. UNICEF (tasked with the largest delivery of COVAX to 20% of the world population) coordinates the logistics of 2 billion vaccines against all kinds of
supplychaintribe.com
diseases every year, and that this is really nothing new! The infrastructure is there, the science is there. They are experts in managing this having very qualified partners with the logistics industry supporting them. COVAX is something that has never been tried before. COVAX is the vaccines pillar of the Access to COVID-19 Tools (ACT) Accelerator. The ACT Accelerator is a ground-breaking global collaboration to accelerate the development, production, and equitable access to COVID-19 tests, treatments, and vaccines. COVAX is co-led by Gavi, the Coalition for Epidemic Preparedness Innovations (CEPI) and WHO. Its aim is to accelerate the development and manufacture of COVID-19 vaccines, and to guarantee fair and equitable access for every country in the world. It is a monumental effort. I believe we have to got off to a good start, but there is a long way to go.
What else do you think we need to do so that the campaign becomes successful? I think we need to be realistic that Covid would be around for many years. The Covid-19 vaccine may later be combined with the annual normal influenza vaccination. We need to consider looking at the long-term aspects and not just the one-off mass vaccination that we are witnessing currently. For example, if you are using a school for vaccination purpose, it’s not sustainable. We need to start looking at different locations with a fixed infrastructure. The focus has really been on vaccines, but there are lot of ancillaries around the entire vaccination drive, which need to work in
tandem. I feel most of those aspects are still untouched such as PPE kits, disposal of biomedical waste, so on and so forth. It’s very important for governments and private actors to think these through in its entirety. Logistically a lot of these supplies are going by sea freight. For every pallet of vaccine, there is at least 5-10 pallets of ancillary supply. It is voluminous and has a high value. We do have an issue with the global sea freight right now with the disproportionate amount of sea containers not being available. Finally, I think waste management is vital. Medical waste needs to be disposed in a professional way. The process is normally managed through incineration and must adhered to strict WHO guidelines. We also need to draw our attention on the rise of counterfeit vaccines, which is one of the largest challenges we are facing right now. Fake vaccines and fake pharmaceuticals have been in the market for the past 20 years. We must make sure that the public and private partnership ensures the safe storage and transportation of all pharmaceuticals to protect patient safety. That requires serialization of the vaccines, combined with the digitalization of logistics. In short, we need to build a sustainable supply chain around vaccines.
What level of governance do we really require in terms of manufacturing, transportation and also deploying it on the tier III & IV cities? India is one of the largest vaccine producers in the world. Almost 2 out
27
COVER STORY We must make sure that the public and private partnership ensures the safe storage and transportation of all pharmaceuticals to protect patient safety. That requires serialization of the vaccines, combined with the digitalization of logistics. In short, we need to build a sustainable supply chain around vaccines.
of 3 children receive vaccines made in India. The supply chain and quality control standards are already well laid in the country. What needs to happen is that the countries outside India need to come up with more localized solutions. We are witnessing increased joint ventures in this direction lately. Having the ability to produce vaccines offers many advantages and is the right way to go. Governments have to make sure that the corners are not cut because here we are talking about patients’ safety. I also think there is going to be a demand in direct to patient services to help reduce the stress on the medical centers and hospitals. There are already massive backlogs of people who require urgent medical assistance. We have to think about permanent vaccination centers. This must be managed and governed by the Ministry of Health together with private partnerships.
What do you have to say on the pricing of the vaccines globally? Let’s not talk about the profit margins of pharmaceutical companies. Right now, our focus should be to make sure that every human being has the equitable access to vaccines around the globe. That is what Gavi, WHO, COVAX and other global associations have been doing. We have to continue in that direction as we can’t be held hostage because of pricing hike or political interferences. We have seen the kind of pressure the export ban by certain countries on PPEs had created. Similarly, as the vaccine was being produced, the EU threatened to stop exports to make sure their population gets vaccines. That can’t happen. No country should politicize vaccine distribution. Lot of financing mechanisms are in place for countries who can’t afford to buy vaccines from the other countries. We need private donations and co-operations need to hold
28 CELERITY May - June 2021
hands and come forward to vaccinate a particular country’s population who are deprived of vaccines owing to financing issues.
What is QUAD and is India going to be one of the major beneficiaries here? QUAD is an alliance between Australia, India, Japan and the US. QUAD can play an important role in four key areas going forward: maritime security, supply chain security, technology and diplomacy. The latest announcement is that the QUAD has decided as a group that that they will produce 1 billion doses of vaccines in India at the Biological E facility in Hyderabad and this is this is not only a massive boost for India but it's great for the region. This this is a very good demonstration of what private public partnership can do on other regional level. We need to become less dependent on the super nations for pharma supply chains. India has proven that it has the ability to produce world-class pharma products for the global supplies, so I think QUAD has made a strategically important decision here.
What are the lessons learnt from the vaccination drive? What are the opportunities that it has presented? The pandemic has created other bottlenecks that should be addressed: the fact that while the world was focused on Covid-19, there were many other diseases out there not being treated as they should, due to lack of staff, infrastructure, and lock-down regulations. In addition to the medical knock-on effect, there was the economic one for so many industries reliant on free movement of people and goods. Three challenges are also worth mentioning: 1) Local manufacture of vaccines: the closer to home, vaccines can be
made available, the better, 2) Counterfeit: from fake Covid-19 test results to fake vaccines – a robust blockchain solution needs to be in place to ensure authenticity and trustworthiness. The end-user should be able to check via an encrypted confirmation of the vaccine via their smartphone, that do have the bonafide product. 3) The growing issue of bio-medical waste through the increase in PPE, needles, and other Covid-19 related refuse: not all locations have the facilities for incineration, and could the logistics therefore play a part in removing and helping to destroy this waste? I think these are the three key questions that need to be resolved at the earliest.
INTERVIEW
BE SURE “We have adopted a clean, lean and green approach to creating a responsible supply chain. Our Sustainability, User-Friendly, Reliable and Efficient (S.U.R.E) packaging is just one initiative to achieving our vision. Driven by a firm belief in the 5Rs (Remove, Refuse, Reduce, Reuse and Recycle), we designed a process to sustain this environmentally responsible supply chain. The welldefined process included forming a focused team with internal and external members; applying scientific techniques; implementing ideas and actions across locations and finally verifying results and continuously improving outcomes,” shares Nikhil Puri, Global SCM Head – Communication Cabling Solution, Sterlite Technologies Ltd. (STL).
Why was circular economy an important pillar for your organization? In the linear economy, raw natural resources are taken, transformed into products and get disposed of. On the contrary, a circular economy model aims to close the gap between the production and the natural ecosystems’ cycles – on which humans ultimately depend upon. This means, on one hand, eliminating waste – composting biodegradable waste or, if it’s a transformed and non-biodegradable waste, reusing, remanufacturing and finally recycling it. On the other hand, it also means cutting off the use of chemical substances (a way to help regenerate natural systems). Additionally, people are getting more vocal, criticizing companies involved in (or staying quiet on) deforestation, pollution, or using unsustainable materials. Brands selling poor-quality products use non-recyclable packaging or allowing ecosystem destruction is being ‘called-out’ on social media. There are certain reasons why circular economy is important pillar for our organization. We need to secure the
supplychaintribe.com
resources. Working out which materials are critical for our business, and which are most at risk, was a great starting point for this approach. Is future demand likely to exceed supply? Are there geopolitical factors at play, likely to affect price or access? Swapping from finite, potentially risky or under-pressure resources to safe, sustainable materials provides resource security and price stability. We focused on regeneration; applying the circular economy mantra that ‘all waste = food’ for resources used for the product and the production process might involve regenerating our own resources or partnering with a specialist recycler. Resource security and regeneration have the additional benefit of reducing business risks, and diversifying both the locations and materials in our supply chain also helped. Circular economy approaches build stronger brand reputations, by doing things better and doing better things.
What were the challenges that came your way in implementing S.U.R.E? The major challenge was the type of materials that we use. Traditionally these
An alumnus of IIM Ahmedabad, Nikhil Puri has over 16 years of experience with large multinationals & Indian businesses in developing and managing Responsible, Safe & Sustainable Supply Chain and Procurement. His areas of expertise in end-to-end supply chain & procurement includes automation, manufacturing ecosystems, global & local strategic sourcing & procurement, direct & indirect services, contract management, supplier relationship management, environmental, health and safety, risk, legal and regulatory material/inventory management, and customer fulfilment. He has a leadership track record on business turnaround assignments, handling bigger portfolios, executing challenging projects, bringing innovation to disrupt market within Sterlite, General Motors & Honda.
materials are not easily recyclable and we had to apply a different approach to counter this challenge. These are special materials. In line with the same, we came up with recycling of at least 100% of packaging materials. We wanted to create value for our Company, Customers and the Society through environmentally conscious initiatives. We called this initiative as S.U.R.E (Sustainable, UserFriendly, Reliable, Efficient) Packaging. The approach that we followed up for this was of 5R i.e Remove, Refuse, Reduce, Reuse, and Recycle.
Please highlight the technical aspects of S.U.R.E. What does it take to save 8000 trees every year? It turns out, just a small shift in perspective. It’s no surprise that our resources are under threat from overuse, though you might not know that a major player contributing to this phenomenon is industrial packaging, that uses onetime use cardboard packaging. Alarmed by the increasingly dire reports of the far-reaching environmental impact of packaging across the globe, STL has
29
INTERVIEW STL S.U.R.E initiatives across all units have:
made a move towards being part of the solution instead of the problem, moving away from traditional packaging for our products towards more sustainable options. To this end, STL has already replaced the norm of one-time-use corrugated cardboard boxes with high-density polyethylene corrugated (HDPE) ones, which are continuously recycled. We go a step further to ensure that the boxes are returned and reused. As the materials that we use were not easily recyclable, so we needed to work internally as well as externally. We formed a CFT comprising of Internal (Supply Chain, Design, Quality, and Production) & External (Customers, Experts, and Supply Partners) stakeholders and this whole project was driven under Supply Chain umbrella. We interacted with IIP (Indian Institute of Packaging) for this initiative. We applied scientific techniques like Brainstorming, Value Engineering, Value Analysis, Mechanical Testing, Simulation, and Environmental Impact & Testing. The various teams
went back to drawing board and devised solutions which were in sync with the ideology of S.U.R.E. The ideas were to think out of the box and not some conventional ways of packaging.
What are the tangible benefits gained from the innovations? To ensure a long-term impact, we identified initiative through external collaboration. Together with our external partners, we diagnosed the problems with materials, subsequently changed materials and process and finally improved packaging practices and better utilization of resources. We optimized the design of spools to reduce the weight and re-foaming for reuse to reduce the annual consumption of plastic. Furthermore, all our wood or paper-based packaging is recycled. And the results show. Our combined cross plant initiatives have thus far saved 4,300 metric tonnes of wood and paper, and 830 metric tonnes of plastic – the equivalent of saving approximately 8000 trees. We have also succeeded in reducing
the emission of CO2 by 5,300 metric tonnes. The tangible benefits that derived from these innovations were to the tune of 20-25% in cost. Also, direct impact to Mother Nature was that we were able to save 2000 trees. With this also there was an impact on shipments wherein we were able to save 31% reduction in shipments. Another feather in our cap is two of our units reporting 100% sustainable packaging (reuse and recycle) for inbound materials and we are not done yet. Our next move is to work with our customers to bring in 100% sustainability for outbound packaging. At STL, we are continuously working on new methods to foster sustainability and create more value for our customers.
How can companies strike a balance between business goals and sustainability simultaneously? Companies need to understand very quickly that sustainability is also a business goal. The companies which are sustainable will be able to deliver consistent goals. Long gone are the days
Businesses must become more adaptive with the change in environment. We are living in a VUCA (Volatile, Uncertain, Complex, Ambiguous) world. Supply Chain Management will be the fulcrum around which the businesses will flourish. It will all boil down to the scenarios wherein more agile, and more adaptive to change supply chains will drive the businesses forward. Businesses must become more predictive rather than reactive. 30 CELERITY May - June 2021
INTERVIEW We want electronics ‘Made in China’, so we can buy them cheap. However, rapid political developments, a shift towards consumers buying niche products and now, this pandemic has revealed the weakness that lies at the heart of this model of manufacturing. The hidden costs of single-source dependencies and poor flexibility in adapting to real-time shocks have been laid bare. Today, we will tolerate higher prices for certain goods, if it means we get them faster and more in line with our aspirations. As a result, the change that had already begun, towards more flexibility and multilevel sourcing, will accelerate tremendously. Over the next years, we can expect to see a broad overhaul of our supply chain infrastructure.
wherein you can sit on your laurels and enjoy the success. With fast changing technology, you never know when your business model may become redundant. To keep pace with the fast-changing paradigms, you need to continuously evolve and sustain. By definition, “Sustainability is a business approach to creating long-term value by taking into consideration how a given organization operates in the ecological, social and economic environment.” To do this, the culture must change and culture in my sense is always top driven. Sustainability cannot be the KPI of one department. It must be mapped in every department individual goals.
How is Sterlite (Cabling Solutions) focusing on new age innovations? Sterlite has already been nominated Top
supplychaintribe.com
25 Innovative Industrial companies in India. Sterlite gives a lot of impetus on innovation. We have a COE (Centre of Excellence) across all our manufacturing units. Our R&D teams have the best talent pool from across the globe and they have been delivering new solutions for our customers continuously. We have a lot of programs that are running in the company. Innovation is being driven by the top management wherein the thought process and the culture have been changed. Now Innovation is not only thought by the R&D department but by all functions equally. Innovation is the one of the KPIs of each department.
Year 2020, though adverse on all counts, proved to be highly innovative for corporates in many aspects. What is your view on this
and enlist some of the innovations done in supply chain? For me, being resilient is as important as being innovative. In fact, the supply chains have to become more resilient. Supply Chains across the globe should be more agile, more collaborative. Supply Chain should develop their supply base strategy; need to inculcate the Risk Management culture. There are risks in decision making and that need to be identified using Market Intelligence. The companies need to be future ready. Some of the key things that we have done in Supply Chain are: ♦ Cloud Based Data Management in Supply Chain ♦ Implementation of Integrated Business Planning ♦ Implementation of SURE packaging ♦ Adoption of Procurement platform
31
INTERVIEW
which has reduced a lot of NVAs (Non-Value Activity)
Where do you see supply chain changing the shape of things to come? Today’s globalized supply chain network has been optimized to identify minimum lead times at the lowest possible price. We want electronics ‘Made in China’, so we can buy them cheap. However, rapid political developments, a shift towards consumers buying niche products and now, this pandemic has revealed the weakness that lies at the heart of this model of manufacturing. The hidden costs of single-source dependencies and poor flexibility in adapting to real-time shocks have been laid bare. Today, we will tolerate higher prices for certain goods, if it means we get them faster and more in line with our aspirations. As a result, the change that had already begun, towards more flexibility and multi-level sourcing, will accelerate tremendously. Over the next years, we can expect to see a broad overhaul of our supply chain infrastructure.
GLOBALIZATION TO GLOCALIZATION Logistics hubs will re-emerge at the regional level. To eliminate single-source dependencies, and to establish a flexible and adaptable supply chain, sub-system suppliers and component suppliers will source, assemble, and deliver from their
32 CELERITY May - June 2021
own backyards. The supply chain has become a main protagonist everywhere, it has moved from playing a “behind the scenes” organizational role to being a prime driver of the company business. As volumes become more variable, supply chains must become more adaptive, especially if, as forecasts suggest, large suppliers and logistics operators in the supply chain industry must prepare for major catastrophic events such as weather events (fires, flood, tsunami), lethal pandemic outbreaks, strikes, social unrest and associated disruptions. Businesses in general are looking at their whole supply chain ecosystem. There are dependencies on some partners in the value chain which are called as Sole Suppliers. Traditionally businesses have been comfortable with these sole suppliers as the risk was averted due to the strategic partnership with these suppliers. But now with pandemic, these sole suppliers are posing risk as pandemic has not left anyone untouched. Businesses are moving to develop alternate supply chain to mitigate these risks. Companies are making sure that their resilience plans are in place. In fact, the supply chains must become more resilient. Supply Chains across the globe should be more agile, more collaborative. Supply Chain should develop their supply base strategy, need to inculcate the Risk Management culture. There are risk in decision making and that needs to be identified using Market Intelligence.
Businesses must become more adaptive with the change in environment. We are living in a VUCA (Volatile, Uncertain, Complex, Ambiguous) world. Supply Chain Management will be the fulcrum around which the businesses will flourish. It will all boil down to the scenarios wherein more agile, and more adaptive to change supply chains will drive the businesses forward. Businesses must become more predictive rather than reactive.
What are the upcoming trends that we can look forward to? The upcoming trends which we should really watch out for are AI (Artificial Intelligence), ML (Machine Learning), Industry 4.0. Blockchain is also gaining widespread recognition progressively. All these are part of IoT (Internet of Things). In supply chain, the digitization is coming up wherein we need to work on the following: ♦ Match dynamically demand and supply. Differentiate for products and consolidate for platforms. ♦ Contain multi-sourcing complexity ♦ Stop RFI/RFP. Co-create more to achieve best solutions, risk reductions and risk sharing ♦ Move from static sourcing to dynamic sourcing
SPECIAL REPORT
PRESS THE
RESET LEVER With more than a year into the pandemic and no respite in sight, supply chain leaders must have by now embraced the NEXT NORMAL. While the situation demanded an immediate redressal without taking a pause, isn’t it the right time to reset the supply chain to be better prepared for such unforeseen shocks? Supply chain leaders of the organizations need to STRESS TEST their existing supply networks and accordingly devise a comprehensive supply chain strategy to lead organizational growth. This special story offers you the strategies to prep up for the future.
I
N 2020, the COVID-19 pandemic hastened and intensified changes to the consumer and customer landscape. Beyond business growth, supply chains became more important than ever, helping save lives by getting critical supplies to the people who need them. Companies with robust supply chains have been resilient enough through this crisis, combined with a responsibility not just to the business, but also to the greater good of society. In the aftermath of COVID-19, customers
supplychaintribe.com
will continue to demand an experience in which supply chains respond with a higher purpose. Accenture research, titled “A License for Growth: Customercentric supply chains,” identifies major supply chain challenges that have only been magnified by the ongoing COVID-19 global crisis including inflexibility to deliver undifferentiated customer offerings; poor ecosystem design lacking the right partners; and a siloed technology architecture that stifles collaboration and co-innovation.
The companies, in the report, have invested US$153 million, on average, over the past two years to transform their supply chains. However, it is just a small group — 10% of those surveyed — that are effectively using their investments to transform their supply chains to meet increasing and evolving customer experience demands. The Accenture analysis found that these leading companies follow four key practices that cement them as leaders among their peers:
33
SPECIAL REPORT
Begin with the customer in mind: Base supply chain strategy on what the customer values, which is a more complex endeavor than ever before because customer experiences are now purposeled and personalized. More than twothirds (71%) of the leading companies build supply chain strategies to deliver experiences linked to key customer value propositions, such as sustainability, data privacy/security and customized delivery and service. Turn insight into innovation: Invest in building analytical, assetlight collaboration architectures, which could significantly increase the supply chain’s impact on revenue and shared success within and outside their ecosystems. In fact, more than half of the average revenue growth that the leading companies experienced came from collaboration tools and data-driven insight technologies. Develop targeted capabilities: All these leading companies, whether B2B or B2C, have built capabilities to segment customers and products in real-time. They have partnered with procurement to design products and services and identify potential suppliers to achieve target margins. They also invest in advanced cybersecurity capabilities to address the growing security threats from data breaches and data theft. Engage the CEO beyond conversation: Support from the top is key to true supply chain transformation. The CEOs of these leading companies are more likely to drive supply chain discussions with their boards and translate those discussions into results. More than half (53%) of these CEOs allocate funding to drive supply chain innovation, and 49% allocate top talent to accelerate supply
chain transformation “As we continue to navigate the uncertainty of fast-changing shifts in customer behaviors, a customer-centric supply chain is essential to the well-being of companies and society as a whole,” said Mark George, managing director and North America lead for supply chain and operations at Accenture Strategy. “The good news is that the approaches that leaders are taking is an imitable formula that all companies can follow to transform their supply chains and sustain the operations that serve their customers and communities, as well as Main Street and Wall Street, with purpose and growth.” “The supply chain has always been the lifeline to humanity. The COVID-19 health crisis has brought to light the critical need for a resilient supply chain that produces and delivers all essential goods and services quickly, safely and securely,” said Kris Timmermans, senior managing director and global supply chain and operations lead at Accenture, in a release. “Companies have moved quickly to prioritize transparency and enable faster decision-making. Now they must double down on building more customer-centric, purposeful supply chains that will lead to growth as economies rebound.”
THE SUPPLY-CHAIN RESILIENCE STRESS TEST “The COVID-19 pandemic exposed considerable weaknesses, resulting in severe disruptions in supply chains around the globe, shedding light on the need for intelligent supply chains that prioritize transparency, anticipate new risks and enable faster decisionmaking,” said Timmermans. “Our stress test enables companies to run more than 40 scenarios at one time, providing unprecedented visibility into where and how their supply chains will
be impacted during a major disruption.” The stress test, jointly developed by Accenture and the Massachusetts Institute of Technology (MIT), begins with the creation of a “digital twin” of an organization’s supply chain. This enables the subsequent modeling of various combinations of scenarios and impact that would significantly disrupt the organization’s ability to serve customers, shareholders, employees, and society. Such scenarios could include sudden spikes or drops in demand, the shutdown of a major supplier or facility, scarcity of a critical raw material, or disruption of a key port. The stress test can identify both the time it would take for a particular node in the supply chain to be restored to full functionality after a disruption (i.e., “time to recover”) and the maximum duration the supply chain can match supply with demand after a disruption (i.e., “time to survive”). This approach to supply chain risk management has been introduced and discussed by MIT Professor David Simchi-Levi and his PhD students in their article, “From Superstorms to Factory Fires: Managing Unpredictable Supply-Chain Disruptions”. McKinsey research and analysis also emphasized on the supply chain stress test. Maintaining the delicate balance between supply chains’ cost and risk requires companies to be vigilant. They must understand the risks facing their supply chains, as well as the mitigation strategies available to minimize those risks. Many categories are highly susceptible for supply-chain disruption. Companies can often choose from a range of risk-mitigation options. For example, certain industrial companies have found that shifting component-production locations can result in a 20% decrease in cost, as well as reductions in logistics and trade risks. Alternatively, the same parts can be manufactured domestically with only a 5% cost increase by leveraging
The pandemic has pushed businesses all over to adapt to the changing consumer demands, market dynamics, and stand strong amidst the crisis with innovative offerings. Resilience and agility are much needed for enterprises in the supply chain to remain competitive and face the new world. Faster, smarter, and more efficient logistics is the true differentiator for modern supply chains. 34 CELERITY May - June 2021
SPECIAL REPORT Industry 4.0. And because supply-chain risks are always changing, this stress test cannot be a one-off exercise. To minimize this risk, companies can focus on critical suppliers, using supply-chain mapping tools to identify lower-tier suppliers from publicly available information, asking them to share information on their own critical suppliers, or encouraging suppliers to conduct their own resilience stress tests. Where the stress test reveals potential vulnerabilities in the supply chain, companies can identify appropriate mitigation steps. This calls for a combination of short- and medium- or long-term actions that are tailored to the specific issues that have been identified. Response levers can be structured across five themes: securing supply, agile manufacturing, diversifying manufacturing locations, optimizing design, and optimizing financials. Short-term no-regret actions might include increasing safety stocks of vulnerable parts, changes to contract terms to ensure the financial security of key partners, or investing in new skills and capabilities, such as the adoption of digital tools to improve supply-chain visibility and provide early warning of potential problems.
Medium- and long-term actions might include diversification of the supply base; location diversification and vertical integration to reduce reliance on single suppliers; or automation and digitization in manufacturing to increase production agility. Companies can also consider changes to product designs to optimize complexity or reduce dependence on specialized components with limited availability.
comprehensive database of thousands of its suppliers and the hundreds of thousands of parts to quickly identify how to shift components across sites when needed, so that disruptions at one location would not affect global operations. When earthquakes again struck Japan in 2016 and 2019, Toyota kept production stoppages to two weeks or less and avoided disruptions in its worldwide operations.
Here is the way to reimagine supply chains and increase resilience: Shocks are probable, but disruption can be manageable Supply chain disruptions are not new, but shocks are increasing in frequency and severity. Supply chain executives report that their industries have experienced material disruptions lasting a month or longer every 3.7 years on average. Shorter disruptions have occurred even more frequently. When a tsunami hit Japan in 2011, all of Toyota’s operations in Japan were shut down for nearly two months after a magnitude-9 earthquake. Production in the United States declined by 30% due to a shortage of parts produced. To become more resilient, the company used a combination of tactics, notably the construction of a
Sustainable resilience requires digital Companies have historically been reluctant to invest in this sort of resilience before a shock occurs, believing that the benefit simply was not worth the cost. Certainly, more frequent shocks help change that cost-benefit calculation. But there is another reason to re-examine that equation: new technologies are changing the economics of supply-chain resilience. Investing in resilience with digital capabilities at the core can pay off not only in the long term, but also in the short term. Most important, digital tools can enable business leaders to build agile and structural resiliency measures into their operational models regardless of where, how and when a shock occurs. Automation can increase efficiency by
One critical lesson from the COVID-19 experience is that a focus on self-reliance can be a recipe for failure if disaster strikes. Many of the trends accelerated by COVID-19 have roots in improving connectedness, whether it’s IoT delivering critical insights through data or mobile devices or collaboration apps that link people to people, anywhere, at any time. Improved connections enable visibility, remote management, and working from home while giving companies the flexibility and agility they need to deal with disrupted supply and demand and to capture long-term global opportunities. Although COVID-19 may have exposed the fragile links lurking in the global economy, it also accelerated the adoption of a great many technologies and practices that will make the global economy more robust over time. The result is the new (ab)normal supply chain. (Excerpt from ‘The New (AB)normal: Reshaping Business and Supply Chain Strategy Beyond COVID-19’ by Yossi Sheffi, director of the MIT Center for Transportation and Logistics)
supplychaintribe.com
35
SPECIAL REPORT The time to reimagine supply chains and invest in enhanced capabilities is now, with opportunities for companies to capture first-mover advantages. In a complex, fast-changing, and unpredictable environment, this is no simple task—and, based on the value at stake, the C-level will need to be in the driver’s seat. But a resilience stress test provides an important first step in assessing risk and helping develop a blueprint.
reducing input costs and increasing productivity, while also giving companies more, and in some cases new, options to maintain workforce productivity in the event of closures from a severe weather event, or a pandemic. To respond to changing demand forecasts at the start of the crisis, a chemical manufacturer increased its suite of digital tools and dashboards by 30%. They provided staff with realtime visibility into material shortages and the ability to respond to changing demand forecasts. The company’s digital order-tracking system also allowed it to spot problems and rapidly identify the root causes of non-delivery. Those tools allowed the organization to increase its output during the pandemic. Most of the forward looking organizations have been making such innovative efforts to tide over crisis and in turn building a highly resilient supply chain to circumvent any such unforeseen complexities. To minimize this risk, companies can pre-qualify critical suppliers by using supply-chain mapping tools to identify lower-tier suppliers from publicly available information, asking them to share information on their own critical suppliers, or encouraging suppliers to conduct their own resilience stress tests. To run a successful supply-chain resilience stress test and agree on a path forward, these four conditions need to be in place: 1. Cross-functional collaboration to support the holistic assessment across factors. 2. Ability to challenge the business units on maintaining status quo and set high aspirations. 3. Project-based, agile execution of the stress test in six- to eight-week time frame. 4. Assessment of skills and capabilities,
36 CELERITY May - June 2021
51% 73%
of supply chain professionals expect that the focus on their circular economy strategies will increase over the next two years
of the supply chain executives said they had encountered problems in their supplier base as a result of COVID-19
including acceleration of digital and automation capabilities. Use cases will arise in every step of the value chain—for example, digital procurement approaches in purchasing, demand sensing and forecasting in the planning phase, connected shopfloor and performance management during manufacturing, or order-to-cash processes in the downstream supply chain. As the experts right point out, “We have an opportunity to redefine resilience and write a new narrative where resiliency and efficiency can occur simultaneously, with minimal cost. In a complex, fast-changing, and unpredictable environment, the time to enhance digital capabilities and build supply chain resilience is now.” Accenture analysts also echo the same sentiments that ensuring resiliency now for success in the future means companies need to prepare supply chains and production networks to balance reliability with responsiveness. Businesses must not only act now but also plan for future disruptions to protect COGS and margins in the Never Normal world. Giving the real-life example, in a panel discussion on ‘Data in Coronavirus Times’ hosted by the National Council
Gartner 2020
93%
plan to increase resilience across the supply chain McKinsey 2020
of Applied Economic Research (NCAER), CEO of NITI Aayog, Amitabh Kant stated, “Real-time data has been a valuable resource in battling COVID-19 and preventing it from spreading in several countries, and in some Indian states so far. But, overall, the availability of data in real-time is a challenge. The state governments of Kerala and Karnataka for putting out accurate real-time data quickly. Even during COVID-19, I have seen Karnataka share contact tracing information. Kerala shared demographic information. This has made it easier to target vulnerable populations and plan containment strategies.” Data is indeed a superpower in today’s tough times. Accurate data can help not only welfare authorities with the containment of the disease but can also navigate businesses across varied sectors towards better days in a postpandemic world. Organizations that take long-run transformational views, supplemented with digital technologies capabilities, will quickly leapfrog competitors. What’s more, as normality returns, they will have a unique opportunity to reimagine their supply chains with a redoubled focus on agility, resilience, social responsibility and humancentric needs.
INFOGRAPHIC
Manufacturing systems hierarchy and
ASSOCIATED ANALYTICS OPPORTUNITIES An effective Manufacturing Analytics program design needs to extend beyond the factory floor. Afterall, one of the key obstacles Supply Chains face is siloed planning and optimization, presents Kumar Singh, leading global supply chain consultant.
A fundamental first step to understand how analytics need to extend beyond the factory floors is to understand the hierarchy of Manufacturing & pertaining systems. Once you develop that understanding, you can combine that with the understanding of analytics requirement for each level of hierarchy, and then develop the Analytics system that integrates analytics across all hierarchies. /kumarssingh /kumarssingh
System System Description Description
Analytics Analytics Opportunities Opportunities
Kumar Singh is a Research Director with SAPinsider, a technology research company focused on SAP ecosystem. Prior to that, he founded Smart Supply Chain LLC and was an analytics consultant with Boston Consulting Group (BCG). Kumar has been working in Supply Chain analytics domain for 12+ years now and has helped companies across industries leverage analytics to transform their supply chains.
While there is no defined methodology out there to think about this Analytics integration, you can use this categorization and Analytics examples slide to structure your Manufacturing Analytics program accordingly.
Manufacturing systems hierarchy and associated analytics opportunities Manufacturing systems hierarchy and associated analytics opportunities
Lowest level in automation hierarchy includes actuators, sensors, and other hardware components (together these devices constitute the machine level). These devices are combined into the individual control loops of the machine (ex: control of one joint on an industrial robot).
Machine level is essentially an assembly of device level hardware. Examples are industrial robots, powered conveyors and AGVs. Control functions at this level include performing sequence of steps in the program of instructions in the correct order and making sure that each step is properly executed.
Cell level is a grouping of machines or workstations connected and supported by material handling systems, computer and other equipment appropriate to the manufacturing process. Production lines, part dispatching etc. are examples of cell or system level.
This is the factory level system. It receives data from enterprise level systems and converts them into production plans. Likely function of system at this level are order processing, process planning, inventory control, MRP, shop floor and quality control.
This This highest highestlevel level consists of consists of corporate corporate This highest level information information systems.It It consists of systems. corporate is primarily on is primarilyfocused focused onIt information systems. functions necessary toto functions necessary is primarily focused on manage the business, manage business, functionsthe necessary to like marketing and like marketing and manage the business, sales, design, research, sales, design, research, like marketing and accounting, aggregate accounting, aggregate sales, design, research, planning, MPS etc.
-
-
-
-
- Capacity optimization - S&OP Analytics
-
Operating parameters analysis Parameters optimization
- Quality Analytics
supplychaintribe.com
OEE RUL Reliability Preventive & predictive maintenance
-
System capacity utilization and rate System flow optimization Labor optimization
-
Demand driven manufacturing Plant flow optimization Capacity utilization Rate optimization Plant labor optimization
planning, MPS etc. accounting, aggregate planning, MPS etc.
37
INFOGRAPHIC
Celerity India Marketing Services Email: tech@celerityin.com | Mobile: 79771 05913 Website: www.supplychaintribe.com
38 CELERITY March - April 2021
