Celerity November - December 2019

SUPPLYCHAINTRIBE.COM November - December 2019 Volume 3 Issue 6 For private circulation only

SPECIAL STORY Crack the Deal Decoding the dynamic M&A horizons in Supply Chain

PERSPECTIVE Big Data Analytics Experts help decode Big Data Analytics in Supply Chain and how to make the most of it

R E N N WI STAMP OF SUCCESS

An ode to the stellar performance of the winners and their perseverance in Making More Possible

PUBLISHER’S NOTE

Rewarding Talent Dear Readers, For the past few years, Logistics has been in the news because of GST and many other government initiatives.

One major benefit of this has been investments in the sector, primarily in technology and acquisitions by large 3PLs for expanding services and geographies.

This issue’s Special Story looks at how freight & logistics (F&L) companies are pursuing their growth agendas inorganically, with M&As becoming increasingly attractive as an option.

Much is also being written about the Automotive sector slowdown. However, challenges for OEMs in managing the parts business are always there. Here is an interesting perspective on managing parts supply chain.

Continuing from our last issue, we bring to you the remaining Superstars & Super Achievers of Supply Chainfrom our maiden CELERITY Under-30 and Under-40 Supply Chain Awards 2019. These are the only Jury-based awards where nominees have been evaluated on innovation and impact, they have created in their respective organisations. As we start planning for the 2nd edition of the Celerity UNDER-30 and UNDER-40 Awards for next year, I take this opportunity once again to request Supply Chain department heads and HR heads to nominate individual talents and let them get recognized and receive industry felicitation. This will not just help motivate existing talent, but also motivate the yet-to-enter-the-corporate-world to look at supply chain as a career. Food for thought for the new year.

Here’s to a more productive and rewarding 2020!

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

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CONTENTS

Pallet Guard 210_mm x 260_mm AD November - December 2019 Volume 3 Issue 6

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COVER STORY Stamp of Success Taking forward from the Cover Story of the last issue, we conclude by showcasing the remainder winners who brought significant value for their respective organizations. As we start planning for the next year’s awards, here’s an ode to the stellar performance of this year’s winners and their perseverance in Making More Possible…

09 SPECIAL STORY Crack the Deal This Special Story analyzes the current M&A dynamics for Indian companies and their key strategies to drive growth

INTERVIEWS

06 Small Parts, Big Impact

Managing parts business for an OEM is a tight rope walk, shares K Venkateswarlu, Senior Vice President – Parts Business, TVS Motor Company Ltd.

25 Landing Sustainable Infrastructure Prospects

The government’s aim to integrate fragmented warehousing capacities through a national warehousing grid is a massive step, believes Rajesh Jaggi, Managing Partner, Real Estate, Everstone Group

28 The Hard Pill

Pharmaceutical SCM must be quick to detect and respond to changes in supply and demand, asserts Sandeep Chudgar, General Manager – SCM – Logistics & Distribution, Wallace Pharmaceuticals Pvt. Ltd.

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PERSPECTIVE

Big Data Analytics For big data and advanced analytical tools to deliver greater benefits for more companies, the organizations need a more systematic approach to their adoption. Experts share their views on how to make the most of it

32 EVENT RECAP

A roundup of the 13th Express Logistics & Supply Chain Conclave 2019

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RECAP

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

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

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

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INTERVIEW

INTERVIEW

Small Parts,

dealers and distributors’ network seamlessly pan-India?

Keeping the customer as the focus of our business, we align all operations at our dealerships and APS. One of the important tools that our dealerships use is the Net Promoter Score (NPS). NPS provides an insight into the customer perception towards the operations of our dealerships. We have instituted a programme called Quality Leadership through Quality Dealership (QLQD) through which we rate every dealership on critical performance parameters.

The scores provide deep insights into the dealer operations which in turn help us co-create training modules and improvement plans. All the above processes have helped TVSM achieve Number 1 position in Dealer Satisfaction survey conducted by JD Power for consecutive four years.

Big Impact “Managing parts business for an OEM is a tight rope walk. While the primary focus remains customer delight through timely availability at the right price and quality, the contribution of this vertical to the bottom line of the business cannot be ignored. However, the usage of the pricing lever to improve the bottom line in our regular parts range is restricted to the extent of customer’s value perception and hence we constantly explore projects of waste elimination, cost optimisation and profit improvement,” highlights K Venkateswarlu, Senior Vice President – Parts Business, TVS Motor Company Ltd, during an exclusive interaction.

How crucial is the role of supply chain in the effective functioning of any industry? With varied number of SKUs and the dealer diversity, how do you ensure that it is managed effectively?

As the adage goes ‘the proof of the pudding is in the eating’, evidence of an effective supply chain lies in the ability of an organization to serve its customers in a timely manner with the right quality and at the right price. Our suppliers are a critical cog in this wheel. Aided by the ability to forecast accurately, our suppliers ensure adequate capacities are in place to meet the demand of our customers at the SKU level. Toward this, we are leveraging technology and best industry practices such as Theory of Constraints to ensure we have the right quality of the right part.

Our network, which interacts with our customers, plays an important role by stocking the right mix of parts. In this journey, our Dealer Management System (DMS) plays a pivotal role of capturing data and plotting trends to serve as effective inputs to the

supply chain. Basis the historical trend of consumption of parts over the previous 6 months, the stock norms at dealerships is updated every quarter which helps the dealer place the right order periodically and stock right parts at all times. Further, possibility of pile up of slow-moving stock is significantly reduced. This ensures that no customer needs to wait / return without the right part most of the time.

Automotive parts supply chain is fraught with varied inherent challenges. What are those and how have you tackled them?

Ensuring reach and range is the biggest challenge. For instance, the sale of Mopeds in certain locations such as North East is relatively low and the retailers mostly stock fast-moving SKUs as it is not viable to stock the slow moving SKUs. To serve such needs, we have implemented “Parts on Call” using which any customer can dial in directly using the Toll free number. To draw a parallel, at a traffic signal when the timer displays the wait time, we are relatively relaxed and take a break,

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similarly, when the customer is made aware of the specific delivery time for a part, it provides great relief to the customer and helps him focus on other important things in his routine.

In the meanwhile, our representatives make arrangements to supply the part through the nearest dealer at the specified time.

Safeguarding our customers from counterfeit parts menace: Presence of counterfeit parts affects the performance of products and compromises safety. We have institutionalized a brand protection cell, which liaises with professional agencies to identify counterfeit component

What have been crucial learnings during your journey of over two decades in managing supply chain? manufacturers, wholesalers and retailers involved in stocking and trading. To keep this menace under check with the help of police conducted raids panIndia and within the last 12 months have confiscated a sizeable value of counterfeits.

Servicing of parts beyond the specified norm: There are many passionate brand loyalists for TVS products and there is naturally a demand for parts where the regular production of that model may have stopped. To meet such requirements, our central warehouse ensures adequate stocking of stranger parts. Despite that if we are still unable to fulfil such orders, we aid the customer to locate the part using “Parts on Call.” In the rare event that the order is still not serviced, we exchange the vehicles with special offers to seek the customer delight.

Spare parts management has been one of the keys to survive and sustain in the auto business.

How do you manage that?

Definitely. A customer who is considering purchase of a vehicle would give very high weightage to cost of service and the periodicity, either through his own experience or through word-of-mouth. We, at TVS Motor, consider pricing of spare parts to be

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a strategic tool to ensure that cost of service is value for money. Further in the 2W industry, other than our authorized network, most vehicles in the post-warranty period are serviced

by Private Garage Mechanics (PGMs) who are scattered over every nook & corner and availability of the parts close to these PGMs play a vital role in ensuring that our customers are serviced in the shortest span of time without going too far from their neighborhoods.

Toward this, the hub & spoke model of distribution ensures that we reach out to all retailers, big or small, through our APS who are able to service their order within 48 hours.

How do you strengthen your

Managing parts business for an OEM is a tight rope walk. While the primary focus remains customer delight through timely availability at the right price and quality, the contribution of this vertical to the bottom line of the business cannot be ignored. However, the usage of the pricing lever to improve the bottom line in our regular parts range is restricted to the extent of customer’s value perception and hence we constantly explore projects of waste elimination, cost optimisation and profit improvement. To illustrate profit improvement, as an adjacency, TVSM indigenously developed a line of engine lubricants under the brand name TRU4. TVSM was the first ever OEM in the world to obtain the JASO

Auto parts management best practices • • • •

App based order generation Consumption trigger-based material procurement and order execution Streamlined distribution strategy through Hub & Spoke model of distribution Training resources on advanced statistical tools for process improvements and Operations Research techniques for system efficiencies • Trade through e–commerce • Cloud based integrated ERP systems which require zero manual intervention.

Our TRU4 oil business is managed by a single person from the company through complete integration with IT. For this business model, TVSM accredited with an international award ‘PM 100, Innovation award’ in 2007-08.

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INTERVIEW

Achieving Zero defect against customer order is the target. Every inward component is affixed with a barcode for traceability purpose. Scanning the barcode, MRP label is generated to ensure Zero error. Packaging plays a major role in today’s business.

Our qualified expert ensures continuous upgradation of packaging to achieve optimum tolerance levels and costs. “Auto case feature” developed in-house suggests the secondary packing material based on the dimensions of the components to achieve least cost of packaging. An intelligent simulation-based software helped us in optimizing the load for the trucks thus reducing the outward freight cost.

MA2 certification with API-SL 20W40 grade back in 2006. What began as an in-house project has today grown into a standalone business which is serving the needs of our customers and also improving business profitability.

Keeping abreast with evolving technologies and reducing dependence on manual processes is critical for organizations to stay in the race.

In the context of warehousing, today we have Automated Guided Vehicles (AGVs), automated sorting conveyors, automated sealing and packing machines aided by digital dashboards. Further, there has been a transformation in the order obtainment process as well. Today we have provided our customer the convenience of ordering with the visual aid of an E-Catalogue. Therefore, importance of embracing technology evolution in business cannot be over emphasized.

What has been the transformation over the years?

With the introduction of integrated DMS at our dealerships, we were able to gather crucial consumption patterns, which formed the base for future planning both for material procurement as well as formulation of business growth models. With respect to distribution strategy, we have evolved from dispatches from TVSM to

over a 1000+ outlets including main dealers, sub-dealers and stockists to a more efficient hub & spoke model of distribution through just 100+ APS who play the role of mini warehouses in their respective territories. This has benefited us to cut lead times to delivery and benefit from economies of scale.

Supply chain has evolved a great deal as well. Today, the vendors are intelligently guided by E-Kanban and Theory of Constraints which have brought in great levels of transparency between the OEM and the supplier as well as eliminated a great deal of non-value added work content.

Every component dispatched from our warehouse can be identified for genuineness. A QR code is printed on every component, scanning which the customer is directed to our main server, through which genuineness of the part is ascertained. Skilled manpower is the basis for seamless operations. Focus of training and development to resources has evolved from immediate rolereadiness to facilitating managers to solve problems and shaping leaders.

What are the warehousing best practices implemented by you?

Achieving Zero defect against customer order is the target. Every inward component is affixed with a barcode for traceability purpose. Scanning the

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barcode, MRP label is generated to ensure Zero error. Packaging plays a major role in today’s business. Our qualified expert ensures continuous upgradation of packaging to achieve optimum tolerance levels and costs.

“Auto case feature” developed inhouse suggests the secondary packing material based on the dimensions of the components to achieve least cost of packaging. An intelligent simulationbased software helped us in optimizing the load for the trucks, thus reducing the outward freight cost.

What are the policy imperatives that you suggest the government to look into?

We have initiated actions in a big way toward Brand Protection. Clamping down on the perpetrators is the need of the hour keeping the safety of the customer in mind. This also leads to a significant revenue loss for both the government and the OEMs.

SPECIAL STORY

Crack the DEAL

With cost reduction and performance improvement as their focus for a long time, freight & logistics (F&L) companies have started pursuing their growth agendas by evaluating inorganic growth options to achieve their financial targets. In their journey to excel, M&As have today become a critical part of their growth strategy. Yet the economic climate remains challenging and the environment for organic growth is competitive. In lieu to this, these companies need to develop a compelling and credible value creation agenda that will convince investor communities they have the right vision and plan for growth.

This article analyzes the current M&A dynamics for Indian companies and their key strategies to drive growth…

I

n pursuing inorganic growth, companies typically have three routes available to them: joint ventures (JVs), strategic alliances, and M&A. Each has its advantages and disadvantages, and the appropriateness of each varies by context. As reported by Accenture, in the current economic climate, M&A is the most relevant and increasingly attractive option for F&L companies to pursue inorganic growth.

Agrees Sudeep Mehrotra, Senior Director, Alvarez & Marsal, “Logistics industry is close to USD 150bn per annum now. Efficiency is driving share of logistics to GDP come down year after year. Hence, the growth of industry is lower than the economy.

However, substitution of organized industry over inorganic is driving more than 20% CAGR for most subcomponents of industry for private organized participants.” PEs have participated in various waves of logistics in India: o Early 2000s – Capacity creation led to PE investments in ports and infrastructure. Ports like Krishnapatnam, Gangavaram, Mundra, Pipavav were attractive targets (more than USD 2bn PE

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investments in ports). o Mid 2000s – Privatization of rail services resulted in PE investments in logistics parks and rail operators like Allcargo and Gateway distriparks (more than USD 2bn PE investments in asset heavy companies). o Late 2000s – Penetration of 3PL services led to emergence

of companies like TVS Logistics, Mahindra Logistics and FSC. All of them have attracted investors (more than USD 1.5bn PE investments in services-led 3PL companies). o Early 2010s – Specialized logistics verticals like cold chain, tank farms, coastal capacity, cargo specific services have attracted PE investments (more than USD 2bn PE

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SPECIAL STORY

SPECIAL STORY Prateek Jhawar, Director & Head, Infrastructure & Real Assets Investment Banking, Avendus Capital

Dr Arunachalam R, CEO, ProConnect Integrated Logistics India has always witnessed interest from Private Equity investors in the past.

However, we now find a lot of interest from strategic buyers. This adds a lot of credibility to the India growth story. Indian companies have historically owned and managed assets. However, the trend is now changing. Specifically, in the Logistics space, global funds are on an asset acquisition spree and will probably own a majority of the assets in the next 5-10 years. Indian companies will probably hold a minority in asset ownership and focus more on managing them.

investments in cargo specific asset class companies). o Mid 2010s – Emergence of warehouses as an asset class has attracted investments of more than USD 2bn from PE funds.

E-commerce as a segment has created new companies like E-com express and Delhivery, which have attracted more than USD 1bn in the last 4-5 years. o Late 2010s – Technology adoption and affordability has led to disruption across the value chain.

Companies like Rivigo and Blackbuck have demonstrated impact of new business models on costs and experience for a user of logistics services.

There is still more than 75% of industry, which is unorganized. Also, further wave of privatization is expected in key modes – air, sea, rail. Industry is still well positioned to absorb and attract PE investments for the next few years.

Deven Pabaru – CEO, Patel Roadways (Stellar Group), states that

for supply chain logistics companies, their inorganic growth is driven by several needs. He highlights these 11 pointers:  Network Expansion to offer reach in hitherto unserviceable or ODA locations  Ability to service a wider client base through an acquisition  Significantly reduce the time to market and save on client acquisition costs  Addition of Brand Goodwill to the company portfolio if the acquired company has a strong vintage and client stickiness  Geographical expansion to new territories that have significant impediments to growth for a new player  Structural growth in top line whilst retaining conservativism in the asset purchase  Aiding profitability by leveraging on the network and client reach to offer complimentary services  Creation of new segment offerings within the firm to deliver holistic client services  Addition of IP, Software capabilities, etc., to enhance the suite offerings

 Establishment of new vendor relationships  Ability to reduce costs whilst leveraging on network effects and combined large scale of operations.

Dr Arunachalam R, CEO, ProConnect Supply Chain Solutions, informs, “M&A in logistics space continues to be buoyant both globally and in India.

A couple of years ago, the logistics industry saw a lot of consolidation in the ocean and air transportation. There is no dearth of such consolidation opportunities in the sector, especially in the case of trucking companies. The market is highly fragmented with a mix of large players, innumerable mom and pop shops and those in-between vying to strike the right deal. Also, there is a lot of buzz around some niche sectors like cold chain in pharma & food sector, e-commerce and mission critical services across segments. These high margin verticals are always of interest as they add a lot of value.”

Prasanna Pahade, Chief Strategy Officer, Mahindra Logistics Ltd., validates, “The logistics industry is on the threshold of unprecedented development with various government

We are witnessing significant interest from global investors in the Indian warehousing space in recent times with major players partnering with developers to create large platforms. The highly unorganized and underdeveloped Indian industrial warehousing sector is expected to undergo an unforeseen transformation owing to rapid changes in business environment such as rise the of e-commerce, GST implementation, changing costs and Make-in-India movement. The anticipated demand-supply gap of Grade ‘A’ warehousing is expected to open up numerous investment opportunities in the future.

initiatives starting with the GST in 2017 to various investments in infrastructure like Sagarmala, Bharatmala, Udan schemes, to the dedicated freight corridors and opening up of multimodal transportation within the country. This, in addition to the aim of the government to bring down cost of logistics in the country, has led to supply chains getting redesigned.”

These changes have impacted incumbents and have also given rise to new opportunities. There are players not able to manage this and therefore wanting to cash out and there are others who are waiting to join the bandwagon. Players, in general, are bullish about the sector and want to expand their territories. This is seen almost all sectors like EXIM logistics, domestic transportation, e-commerce logistics, warehousing, etc. Tech-led disruptions and startups with newer business models are also being actively part of the game. The incumbents are looking up to the startups to fast-track their capabilities and skillsets.

THE BURGEONING MARKET Some of the trends that are emerging

indicate certain sectors to be ripe for M&A activities, as highlighted by Puneet Renjhen, Executive Director, Investment Banking, Avendus Capital, are: Exiting non-core assets: Large corporates and conglomerates have, over the last few decades, built presence in various sectors which have little or no synergies with large group companies.

With evolving capital structure and business strategies, we are beginning to see some of the “non-core” assets being divested as they neither meet return metrics nor have market leadership potential. We expect this business churn to continue from the larger business groups especially in industrials and infrastructure segments.

The “Big is better” approach will change to “Relentless focus on Return on Equity (RoE) and Return on Capital Employed (RoCE)” across all business segments.

Separation of asset ownership from operating businesses: Indian companies have always believed in asset ownership and management. However, in the last 10-15 years, creating assets across roads, power generation and

transmission, telecom infrastructure, hospitality, real estate and logistics entailed significant capital investment, complex regulatory approvals and substantial offtake risks. This led to stressed balance sheets, with limited capital to expand. Holding operating assets for an INR 10-12% yield is feasible for global funds with lower cost of capital not corporates where cost of equity is at least 500- 1000 bps higher than operating yields.

Consumption growth: India is poised to be the fifth largest economy and the third largest consumption economy in the world in next two years. These buoyant macros will drive investment and consolidation activity in the retail, consumer and technology space, driven by both Indian and global consumer players filling up their white spaces in food & grocery as well as the fashion & lifestyle categories because of convergence of digital and brick & mortar models. Many online businesses will need to have offline footprints while several offline businesses will need to jump on to the online bandwagon to capture burgeoning demand, for e.g.

Prasanna Pahade, Chief Strategy Officer, Mahindra Logistics Ltd.

Sudeep Mehrotra, Senior Director, Alvarez & Marsal on Key Trends in M&A Activities

Tech-startups are continuing to get investments in the logistics space. In the recent past, we have seen transactions related to capability gaps being filled in.

For example, EXIM related companies entering into end-to-end logistics like multi-modal transaction or strategic infrastructure. A trend which is slowly getting momentum is the interest shown by companies from far-east like Japan and China to buy assets in India.

o Significant interest in new companies disrupting business models and achieving reasonable scale o More interest in service delivery models than asset heavy companies for conventional PEs o Emergence of prop-opco models across the value chain – interest from investors eyeing yields for Propco companies o More focus on quality of governance of companies

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SPECIAL STORY

SPECIAL STORY Deven Pabaru – CEO, Patel Roadways (Stellar Group) on challenges faced in striking a deal: • Deal negotiations can continue from start till the end with both parties stuck adamantly on valuations • Acquired company refusing to share some key information prior to negotiations that may impact the deal negatively • Not having designated SPOCs (Single Points of Contact) in the firms to channelize effective information flow • Constant changes to the Data Room thereby impacting confidence of the Buyer • Client specific information being withheld by Seller • Not able to agree to the Deal contours beforehand during Term Sheet stage itself • Due diligence throwing up some unknown negative surprises that effectively scuttle the deal

Walmart’s acquisition of Flipkart, Future Group’s acquisition of Koovs.com, Amazon’s minority stake in Shoppers Stop and the proposed stake acquisition in Aditya Birla Group’s More are early M&A trends of this sector. Global funds will keep pouring money into Indian technology companies as India remains an attractive battleground given the high growth prospects. Berkshire Hathaway’s investment in PayTM platform, Softbank’s investment in Ola, Uber and OYO and Ant Financial’s stake buy in Zomato signal the intent of the global funds.

Private Equity investors in the past.

However, we now find a lot of interest from strategic buyers. This adds a lot of credibility to the India growth story.

Indian companies have historically owned and managed assets. However, the trend is now changing. Specifically, in the logistics space, global funds are on an asset acquisition spree and will probably own a majority of the assets in the next 5-10 years. Indian companies will probably hold a minority in asset ownership and focus more on managing them.”

Resolution of stress in the system: Arguably, the most important trend will continue to be the resolution of the stressed assets. Thermal power sector, where assets of the value greater than INR 2 trillion are stressed is likely to see strategic players with strong balance sheets and relatively easier access to capital cherry picking assets, which have certainty of offtake and fuel and can be acquired at near replacement cost.

Similarly, I see a great deal of M&A activity in the real estate sector during the months and years ahead. Stressed developers will sell land parcels and inventory stuck for last mile finding.

Special situation funds are actively scouting the stressed space for quality assets but are more likely to partner with strategics given operational expertise required to turn around the assets.

Dr Arunachalam R shares, “India has always witnessed interest from

For Sudeep Mehrotra, scale of operations is still a challenge in multiple sub-segments. Then comes the demonstration of value propositions, which are not people or customer specific and the companies’ capability to embrace technology and leverage it. Adding on these, Dr Arunachalam R elaborates that digitization is a major push in M&A. Technology disruption has begun in many sectors and logistics is no different. However, tech startups are a completely different breed and

MYRIAD CHALLENGES

valuations are different when compared to the traditional logistics players. So, there always exists the challenge of not overpaying for such tech startups, which sell more of an idea than a business.

With growth on the executive agenda at most companies around the world, F&L companies face a considerable challenge, as stated in an Accenture report: identifying how and where to capture growth to satisfy investors’ expectations. They could move into new markets or segments, choose to serve a new customer base, decide to augment their product or service portfolio, or expand into new geographies. All of these actions are potentially viable and could help F&L companies gain access to new revenuegenerating “white spaces” that would complement their existing core markets and offerings. In many cases, though, organically making these moves would be impractical. Building the necessary assets, technology, expertise and other capabilities to, for instance, expand into a fast-growing emerging market or evolve from an air carrier to an endto-end supply chain solution provider

Total M&A activity in India has remained buoyant from 2015 well into 2019 with more than 3,600 M&A deals with an aggregate value of more than $310 billion.

During this period, several developments led to an unprecedented re-organization of asset ownership in corporate India. The present landscape offers a tremendous opportunity for well-managed businesses with a strong deal thesis, looking for new avenues of growth and/or improving profitability.

Source: Bain & Co India report

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With India gearing for a rapid rise in e-commerce business, there is an increased demand for warehousing. Many global players, both strategic and private equity players, are eyeing the Indian market for partnerships and entering in a big way. Especially, the B2B space has invited interest from investors as they are employing cutting edge technologies like AI, ML, IoT, robotics and automation to bring efficiency & gains and disrupt the logistics market.

would be too time consuming, costly and risky for the vast majority of F&L companies.

DEVELOPING THE RIGHT M&A STRATEGY Given the current and anticipated dynamics in the F&L industry and overall global economy, companies should confirm they have a robust M&A strategy that articulates how and why they will approach M&A. Such a strategy will help F&L companies target M&A deals that strongly contribute to their near- and long-term pursuit of overall corporate objectives and to fulfil their commitments to investors. Agrees Dr Arunachalam R, “There is no one rule that fits all. Each company needs to find answers to some basic questions to develop the right M&A strategy for themselves.” Some key areas that needs to be addressed include: Identifying the right target; Synergy / Cultural Evaluation; Competitor Evaluation; Right decision making at the right time; and Speed in execution and integration.

According to Prasanna Pahade, the right strategy should be based on capability and capacity fit rather than just buying for turnover and profits.

Once it has developed its M&A strategy, a company should confirm it has the right capabilities in place to effectively execute the strategy. Accenture has identified three main drivers of M&A success: value-driven target screening, thorough due diligence and effective merger integration. For Deven Pabaru, these are the striking aspects that can help companies in developing the right M&A strategy:  Buyer M&A companies should be clear of what they are currently lacking in their own firms.

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 Their understanding of the market should be deep and also before even approaching any prospective seller they should have first-hand knowledge of the advantages / disadvantages that will accrue to them because of such a deal happening.  Have a dedicated in-house M&A team that constantly sources and evaluates deals in-line with the company strategy and requirements.  For deal to be successful, companies should have in-house post acquisition integration processes / teams for aligning cultures & people to the buyer firm.

GROWTH PASTURES With India gearing for a rapid rise in e-commerce business, there is an increased demand for warehousing.

Many global players, both strategic and private equity players, are eyeing the Indian market for partnerships and entering in a big way. Especially, the B2B space has invited interest from investors as they are employing cutting edge technologies like AI, ML, IoT, robotics and automation to bring efficiency & gains and disrupt the logistics market. “There is abundant opportunity in both the debt and equity market. 3PLs need to evaluate how much to leverage and how much equity to divest and combine the available capital to strike the right M&A deals.

PEs fundamentally look at asset-light quality companies. 3PLs will continue to efficiently run their business and be on the lookout for the right technology to enhance their core offering,” avers Dr Arunachalam R. For Prasanna Pahade, like in other industries, for 3PL logistics companies

as well, there are generally some companies that look promising for M&A than others. These potential companies either have a line of business that one wants to expand to, a geography that one wants to explore to or fill up a gap in certain end-use sectors that one already exists.

Deven Pabaru, offering insights into the promising prospects, shares that in logistics space, there is a lot of fund interest in the fast growing segments of Contract Logistics and Express Transportation. Very few companies of scale are present in India in both these sectors, each of them growing at 15%+ p.a. The returns on investment in each of the above sectors is trending towards 20%+, which is very lucrative for any acquiring firm. The logistics sector, as a whole, is undergoing transformation and adapting digital initiative in a fairly large way by providing opportunities for last mile / always-accessible tracking, warehouse automation services, reduced FTL times by effective technology use, reduction in costs, etc.

In a nutshell, the key to success in this endeavor is having a robust M&A strategy that clearly articulates how M&A supports the company’s overall corporate strategy, as well as the capabilities necessary to execute M&A deals in a way that minimizes risk and maximizes speed and returns. Without both of these elements, a company is at risk of, at best, not fully capitalizing on the growth opportunities before it and, at worst, being left behind as more able competitors make their moves.

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COVER STORY

COVER STORY

Stamp of

Success

This is the second part of our two-part series of the coverage of Celerity Supply Chain Superstars and Super Achievers Awards, the first part was published in the September-October 2019 issue. These Awards were held at Taj Santacruz in August 2019.

With Alvarez & Marsal as Knowledge Partners and six jury members who are very senior supply chain practitioners across industry verticals, these awards have become the only credible platform for recognizing the true super performers.

Taking forward from the last issue, we present to you the rest of the winners who have brought significant value for their respective organizations. As we start planning for the next year’s awards, here’s an ode to the stellar performance of this year’s winners and their perseverance in Making More Possible and leading by example…

Winning formula The exuberance of the winners was all too evident and the positive energy that each of them radiated could have lit up the entire world. While we congratulate every one of them, here is an excerpt of whatmakes a winner, in their own words.

(In this part 2 of cover story, we have covered 23 of the total 43 winners in both age groups)

UNDER-30 Kamal Kishore Kumawat, Co-founder, Edgistify During my professional stint so far, I have been successful in raising Seed Funding for Dealwithus, as well as raising 2 Rounds of funding for Edgistify. In terms of revenue, we scaled 22 times in a year’s time. I am currently working on growth hacking activities for scaling up fast as well as creating a world-class product and raising funds. Problem Solving and Adaptability are my key skillsets. “Keeping it simple and breaking every complex problem into smaller ones and taking it head-on” is the mantra I work with.

Tushar Ghai, Assistant Manager – Supply Chain Management, Aurobindo Pharma Ltd. We were able to analyze each SKU and understand the freight comparisons on air vs sea mode.

This has helped in reducing the air tonnages substantially, thereby reducing the risks in supply chain and hence improving savings in international logistics. We also went into the packaging modeling of the various SKUs in order to optimize the loads for both air and sea dispatches. I can analyze lot of unstructured data sets and bring out meaningful insights to aid management decisions in view of international logistics. As a result of all this, we were able to implement a few projects related to load optimization and cost savings. Upon the successful implementation of these projects, we are able to reap the benefits and thereby have been quite successful to increase the product or inventory efficiency in SEA Mode by 50%, and subsequently reducing the number of containers and able to bring down the freight component by approx. 30%. This has helped us achieve savings of over 5.5 crore annually.

Ankita Kumari, AM – Procurement, ITC Limited- Foods Division Potato is grown in mainly northern & central part of India. However, ITC has manufacturing locations PAN India and the largest volume is manufactured in South & East, hence daily requirement is also huge with a lead time of 6-7 days. Potato, being a perishable commodity, cannot tolerate environmental changes in transit and hence wide quality deviations were observed at plants compared to loading points. To overcome this problem, we used perforated pipes at the bottom of potato bags in the vehicles for proper aeration, which could remove excess heat, CO2, thus stopping development of sugar in material, thereby maintaining quality for a longer period. Strategic mindset, leading change & leadership help me in the path of success.

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Sangeeta Venkataramani, Assistant Manager, Hindalco Industries Ltd.

Sahil Sahotra, Manager – Customer Account Management, Future Supply Chain Solutions I have designed and implemented supply chain for one of the leading consumer durables MNC. Consolidating their operations from 3 different states to a single state led to inventory reduction, visibility of stocks, reduction in storage cost, optimizing operations, etc. Along with the implementation of WMS & TMS, order processing and inventory accuracy has been improved to 96% and 100%, which earlier was 73% and 98.9% respectively. With the consolidation of 3 different warehouses not only inventory reduction has happened but also the storage area has been reduced by 30%, leading to reduction in storage cost.

With the addition of value-added services like “QC” and “labelling”, stock visibility and order execution TAT has improved, with WMS in place “dock to put-away” and “picking to loading” time has drastically decreased, and as a result manpower cost has reduced by 17%.

At Hindalco Industries, Corporate Logistics is at a nascent stage with more focus on the operational aspects, though a cost centre. As a Business Finance manager, I have singlehandedly swung the focus of logistics towards cost and conceptualized a framework to track and analyze end-to-end logistics cost for all commodities, inbound as well as outbound. This provided an in-depth analysis for the top management of logistics costs Vs Benchmarks to identify inefficiencies and plug costs. This was done in absence of systems (no ERP/analytical tool available) though encompassing all parameters such as Mode Mix, Source Mix, Market corrections, Diesel Impact, Rail freight discounts, etc.

Besides, legacy mechanism of cost tracking in Hindalco involved only publishing the volume and cost for few major commodities. This simple MIS of publishing numbers was replaced by the TLC Tally (Total Logistics Cost) project I undertook, which is an exhaustive cost analysis.

The innovation introduced here was the framework to identify every Rupee spent to move per ton of material and its impact on account of Mix change as well as inefficiencies in the system.

The logic skeleton was built by way of reports, setting up process for data accrual, conducting workshops with logistics teams of every plant, mapping the costs against budgeted costs and identifying gaps in cost per weight as well as value. This has resulted in a comprehensive view to understand current scheme of working and mitigate cost overruns wherever possible.

Aura Bhattacharjee, Planning Support – Enterprise Architecture, Mondelēz International We worked on implementing Intelligent Control Tower based on fit-gap analysis for endto-end streamlining and visibility of supply chain functions which were otherwise being managed in-silos. This aimed at getting Business Units and IT on the same page, and various vendors (providing packaged software as well as tool-agnostic solutions) were allowed to pitch. POCs are run on selected vendors and final decision is taken based on alignment of Enterprise Architecture, Business Unit leads and IT leads. Currently I have the single-handed ownership of Enterprise Architecture (EA) Collaborative tool, leading initiatives like Automation, Integration with Portfolio process, handling crucial, exclusive and highest-level access with the Chief Architect to Digitalization, Innovation, Digitization and E-commerce projects across the organization. I believe in “Never stop working on bettering yourself”, which helps me take the challenges head on.

Akshay Khatri, Demand & Distribution Planner, Johnson & Johnson Pvt. Ltd. Needle-Suture Attachment technology was manual (Human-dependent) across Asia-Pacific sites of J&J. As a result, the number of customer complaints for needle pull-offs/ detached needles were significantly high. We were exploring solutions to automate this process, but most of these were capital intensive and not suitable for a market like India. At the same time, to consolidate J&J’s manufacturing footprint, it was decided to decommission the manufacturing facility in Kirkton, Scotland. This facility had the automated attachment technology for Sutures.

I took this opportunity to lead the decommissioning of FAS machines at Kirkton manufacturing facility & repurpose these for India. This was a challenging assignment not only involving transferring the assets to our sites, Installation & Commissioning activities, Hiring & Onboarding the right talent to maintain such high-end automation, etc., but also, the crosscultural people dynamics associated with decommissioning a manufacturing facility and laying off people.

With the help of TMS, now their dealer/ distributors have a runtime visibility of stock movement, which is a revolution in the consumer durable sector. Our comprehensive solution resulted in end-to-end visibility from order till delivery of product. With consolidation, we have been able to maintain the SLAs of “Ontime Dispatches” from warehouse of 99.2%, which was earlier 72% – 75%. SLAs for “Ontime Deliveries” is at 96%, which was 68% before consolidation.

UNDER-40 Sourabh Raghuvanshi, Vice President & Head – Supply Chain, Lava International Ltd. My Management mantra is to “work as if there is no Boss over you”. This mantra signifies to me an “entrepreneurial” spirit and intends to say that no one should be required to tell you or follow up with you for your current tasks or future roadmap. Don’t wait for commands, build your own path while acting within the realms of value and culture of your organization. Be a professional where you can be blindly trusted and then live up to that expectation.

One of the major accomplishments comes on secondary logistics front, which is generally part load shipment and hence goods are shipped through courier to distributors. Cost of courier shipments is obviously high. We came up with a solution to deploy small vehicles in cities where we have fulfilment centers as well as a chunk of 5 to 10 distributors to serve. Such “milk route optimization” is possible for us in areas such as Delhi-NCR, Lucknow, Chennai and few others.

This helped us reduce delivery costs to the tune of 50%. Also, while earlier delivery turnaround time was 2 days, now we can deliver on the same day. As a top up, we are also planning to get these vehicles painted with company branding to provide additional brand/marketing leverage.

Additionally, on primary logistics front, there has been significant increase in service levels as well as cost optimization owing to use of different models of transport (air, road, rail). Besides, transitioning from partial truck loads to full truck loads, we also enhanced our express delivery service as well as introduced “consolidation runs”.

We are continuously evolving our logistics platforms. With these change innovations and route optimizations, we are now serving our customers with far more agility and with enhanced effectiveness.

We recently completed the first validation batches and quality control results indicate a significant improvement in process capability results. We anticipate 70% reduction in needle pull customer complaints in the Indian market. This was a significant achievement for us where we collaborated globally to deliver value for our customers.

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Umesh Madhyan, Associate Vice President Logistics, Hindustan Coca-Cola Beverages Pvt Ltd. We have designed the country’s best warehouse in Ahmedabad, which is an automatic storage and retrieval system that delivers 406 pallets per hour. It not only manages high throughput for a bulk supply chain but also helps supply chain to be nimble by having a design to make mixed pallets for direct customer deliveries. And above all, it can load any market truck in less than 3 minutes with one button (as against 90 minutes and 4 people industry average). Besides, I have designed a strategy that works to achieve significant reduction in logistics costs as a percentage of net revenue.

I have transformed the face of the industry through innovative solutions as well as transformed customer service with more collaboration with key customers. We are probably the only ones using transformational technology like IoT and AI in Logistics in this country.

Pritam Shimpi, Deputy General Manager – Supply Chain, Schindler India Pvt. Ltd. Over the last 16 years, I have had the privilege of working on different assignments covering various aspects of supply chain like manufacturing, production planning, material planning, purchasing, distribution, domestic logistics, EXIM & warehouse management. I played crucial role in greenfield project, SAP, & quality process implementation when the new manufacturing facility at Chakan, Pune was being set up. I spearheaded a warehouse and transportation network designing projects, which has helped to establish effective supply chain network.

Vickram Srivastava, GM (Global Demand and Supply Organization), Zydus Cadila Health Care Ltd An SCM innovation we drove at Zydus was digitization and digital transformation of the entire S&OP process – PACE (Planning and Collaboration Excellence), which was executed with the help of one of the Big4 consulting firms. I was at forefront of this SCM transformation journey as PACE champion ensuring change adaptation with respect to both tools/technology and behavioral change. Digitization helped automate and speed up the process and improved traceability and visibility across the entire S&OP process. The digital transformation further helped us redefine the process, cut non-value add activities and make the process lean. Besides, I have managed inventory of Rs600+ crore and helped reduce inventory to consumption ratio from 5.3 at start of 2017 to 4.4 (current) using levers like better consensus planning for demand generation, return-to-vendor/sell-off nonmoving inventory and campaign planning to improve consumption of material. We have also been able to achieve 99%+ availability in key markets at Zydus for last 8 quarters, driving top line sales of $1.2 billion+ and bottom line of $250 million+.

Sandeep Chatterjee, Senior Manager, Deloitte Touche Tohmatsu Services, Inc. A Supply Chain Network Design done for an FMCG Major resulted in total cost savings of Rs10 crores in 2 years. The company had 15 factories, 55 warehouses and was losing money. This was the first of its kind in the world where we did a strategic network optimization with integrated data from ERP into Oracle SNO. The exercise involved a Business Process Reengineering and Linear Programming Modelling to arrive at the optimized network. I am a Certified Demand Driven Planner and work closely with Demand Driven Institute (DDI) namely Carol Ptak and Chad Smith in developing the next generation Demand Driven MRP algorithms. Demand Driven Material Requirements Planning (DDMRP) is a formal multi-echelon planning and execution method to protect and promote the flow of relevant information through the establishment and management of strategically placed decoupling point stock buffers. DDMRP combines some of the still relevant aspects of Material Requirements Planning (MRP) and Distribution Requirements Planning (DRP) with the pull and visibility emphases found in Lean and the Theory of Constraints and the variability reduction emphasis of Six Sigma. These elements are successfully blended through key points of innovation in the DDMRP method.

Along with my team, I have taken various initiatives like, replacement of heavy wooden packaging usage to corrugated and returnable packing. This has supported our dream to be an environmentally friendly organization.

We achieved reduction of 125% delivery lead time, which has become a business enabler initiative. Our inventory turnover ratio has significantly improved by 161%. This has been achieved by forecasting process improvement, reduction of safety stock and increase of ordering frequency and processes improvement at supplier’s end. “People development, supplier and customer management” are the key skill sets contributing to my achievement.

Neha M Parekh, General Manager – Planning, Godrej Consumer Products Ltd. The challenge for us was to develop a leaner and agile supply chain system wherein planning played a key role in driving improvement in service level, inventory and cost KPIs. Secondly, GCPL works on unique replenishment strategy, which is pull-based rather than traditional push-based system. To leverage the benefits, we had designed a centralized planning and procurement cell. We got benefits of this phase one wherein we had received drastic reduction of 28% in stock-out, however our inventory kept on oscillating and the challenge given to us was to have a leaner supply chain and gain significant reduction in inventory as well. The team came up with innovative integrated approach in system design which helped us achieve this goal. The Planning team played a key role as most of the ready solutions come with forecast based approach wherein, we had to tailor make them to suit our replenishment philosophy.

We modified the system to penalize on service miss over cost and thus made them service optimizer over cost optimization. As a result, our net inventory reduced by 22% from 44.80 days to 35 days in two years 2018-19 and stock-out was reduced by 51% to touch a record low of 1.40% in 2018-19.

Mohit Agarwal, General Manager – Demand, Distribution and Channel Management, Johnson and Johnson I have led Regional Plan Transformation Initiative to drive Planning Maturity Improvement from the Stage of “Integrated” to “Collaboration” within 2019 and propose a pathway to reach “Orchestrated” Stage. As one of the most innovative projects, we conceptualized and implemented Direct Ship in 2017 with the aim of bringing in agility to react to customer requirements faster and reduce inventory cost for the company. Direct Ship Initiative was thought and conceptualized keeping J&J Credo in mind where our First Responsibility is towards Patients and how we can be more responsive towards their needs. Cutting lead times to serve them ensures we can be more agile to their needs when required. Owing to this initiative, we were able to achieve inventory reduction of 3M USD/year, Lead Time reduction of 14 days and IFU cost removal of 180K USD. This ensures that the products are shipped from factory to Key AP markets direct and bypass key distribution centre.

My management mantra has been three steps process: Kaizen, Karma and Kudos. Kaizen – continuously improve self; Karma – be part of larger goal and do good; Kudos – always give recognition where due. These three-steps make me strive for improvements year-on-year and push me to excel further.

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Hiren Ladva, National Head, Business Development – Contract Logistics, Future Supply Chain Solutions I believe my responses and my work demonstrate the consultative approach adopted by me and my team at FSC. Case in point is an assignment where we were able to help a leading consumer foods MNC to simplify its supply chain operations outside their plant. Even with multiple warehouses around the plant for raw materials as well as finished goods, they were running short of storage space every few months due to rapid business growth. When they approached us, my team and I came up with a customized solution with a single warehouse that provided an efficient and de-bottlenecked process to enable speedy movement of goods from the plant to the warehouse, thereby freeing up buffer storage area at the plant. As a leader, I had to channelize all possible resources and align them to the strategic objectives of the customer. We successfully designed a process leveraging cross-functional and collaborative approach with the customer using new ideas and initiatives across multiple areas like layout planning, storage design, material handling, transportation, packaging, documentation and even security checks processes.

I have been deeply inspired by Simon Sinek’s quote - “It’s better to feel uncomfortable pushing for the better than feel uncomfortable settling for less”. It is only because my team and I believed in this philosophy that we were able to solve this challenge for the customer and become a trusted partner for them!

Rijin Malayattil, Sr Manager, Novateur Electrical and Digital Systems Pvt Ltd. I implemented a forecasting dashboard, which provided clear business insights at three levels – total business outlook, evolution of estimates in comparison with previous months and product family level performance. Decision making by top management during forecast validation meeting was made easier with the enhanced analysis and highlights on key statistics: Sale vs Forecast (quantity, %); Forecast error (%); Year till Date vs Year to Go; Quarterly growth-weightage; Current month progress; and Sales plan vs estimate. This has been appreciated by the Legrand group VP - SCM and has taken this as an input for consideration while development of new tools by central forecasting team in France.

Currently I am responsible for forecasting of four group entities: Legrand, IndoAsian, Numeric and Valrack, ensuring forecast accuracy and development/ training of team. I am also responsible for traded finished goods management, ensuring service level and inventory optimization. I firmly believe that improving processes and optimization is the key to enhance customer experience.

Poorvi Kumar, Manager – Operations, Future Supply Chain Solutions I managed 1 lac sqft apparel distribution center, which delivered a 2x increase in DC throughput within 2 years in conjunction with a GRN completion rate of 98% within same/ next day and Order fulfilment of 99.9%. I set a precedent as a DC in-charge by inducting women in the warehouse operator workforce in a high throughput operation, increasing operational stability and man-hr output. We inducted a large number of women specifically for inward and picking operation, that involves tasks to be completed on a piece level and found them to be more efficient and accurate in their work. In addition to operating staff, women have also been inducted as data entry operators and supervisors, some of them being promoted from the operator level owing to their capability and interest levels. The percentage of errors, process deviations as well as attrition has reduced over time, with some of the women being with the operation over 2 years. We have also developed a crossfunctional implementation and operational stabilization team consisting of FTE as well as contract staff, starting with apparel expertise and extending it to food/FMCG and furniture. I like to “Start with a slog, end with a flourish!”

Manoj V. Bhatia, Deputy General Manager, Commercial, Raymond Ltd. I played a pivotal role by spearheading the successful launch of Indirect Procurement Team at Raymond (for its PAN India locations) with the aid of following three building blocks: •

People: Setting-up a centralized Indirect Procurement SSC for Sourcing & Procurement to cater to all the BU’s across locations. Along with this, a Center of Excellence team was formed to support on Market Intelligence, Spend Management, Contract Management, Vendor Management, CSAT, MIS & Cost initiative projects.

•

Process: Implementation of Standard Procurement Processes & Guidelines (SOP, SLA, RACI, etc.) across Bus, which led to transformation from a traditional to a process-centric organization.

•

Technology: Implementation of an eProcurement tool that facilitated standalone solution for P2P process. It enabled greater visibility, transparency, enhanced accountability, control, improved process uniformity & cost efficiencies.

The new centralized team structure proved to be more agile, productive & flexible to support the business growth. Overall, this procurement transformation has helped to create immense value by managing change without business disruption; signing-up for stretched targets & cost optimization; embedding of processes in technology; leveraging intelligence & reducing overall procurement lead time.

Nanda Kumar A G, Performance & Transformation Manager, India Supply Chain, Alstom Transport According to me, it is the success that I demonstrated moving through the diverged and challenging work environment. “Every Challenge is an Opportunity” is my management mantra to explore endless possibilities and to be a successful professional. My willingness to take diverged / cross-functional assignments was a real challenge, which not only helped to enhance my knowledge & competency but to win recognitions both internal & external. Aiming at business ramp-up, my current role is to build strong Supply Chain Culture by establishing the process maturity, enhancing people skills & competency.

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Satyam Tiwari, Founding Member, Head Logistics Practice, Thoucentric We consulted on Program Management and System & Process design for warehousing automation at the greenfield plants for the largest paint manufacturer in India aimed at doubling the production capacity. We also established Thoucentric (being a start-up) as dependable consulting partner for strategic supply chain initiative for several Fortune 500 clients along with exceptional delivery (in a scenario where experts had doubts on the feasibility of expected delivery with the new team and in an aggressive timeline) on the assignment. The key outcome of the project was successful delivery in sacrosanct & stringent timeline of 16 months from Business Blueprint to Stabilization for: • eWM Implementation along with integration with 10 different OEM for Storage (Multi-deep, Single Deep) Movement (Conveyor, EMS, STV) and automated loading (Gantry, Robots) & Unloading (Stakes).

• Reduction in the Manpower requirement by almost 75% compared to same capacity semiautomated facilities.

We have designed and implemented the process of servicing Gourmet and Precious goods for the largest e-commerce platform in India. In the initiative, I worked very closely with 3PL service providers to develop the capability and with the internal stakeholders in understanding that nuances of handling the products from these categories and ensuring that the products are delivered to the customers in committed time and in perfect condition. The initiative enabled the platform to start servicing new categories and add 3% - 4% to the GMV.

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COVER STORY Danish Taneja, Manager, Bestseller India Pvt Ltd. We have successfully delivered two big projects in 2 years, which added positively to company’s bottom-line. We created complete visibility through reports and dashboards (Order to pick, pick to ship, ship to deliver) giving visibility at every supply chain stage. I am working on marketplace model with business team, which is getting implemented very soon.

It would overall improve the sale thru of online business and so effectively improve the % sale from online business for the company. I have also successfully handled setting up supply chain processes and tech platform for various online partners like Myntra, Amazon, Flipkart, etc., and also helped warehouse set up processes for our own captive websites and omnichannel initiatives. We ensured effective liquidation of old season merchandizes with online partners almost 7 lac pieces in 3 months’ time. Besides, we improved inventory utilization by integrating with order management system as well as developed and implemented quality check parameters and inventory accuracy to improve the fill rate to 99.95%.

Poonam Bareja, General Manager – Strategy & Deployment (Supply Chain), Johnson & Johnson (Pharma division) Being a supply chain professional, I have always believed in power of Digitization & Analytics in transforming the way operations are run. This has enabled continuous process improvement to deliver operational excellence in terms of Best in Class KPIs. In my J&J Pharma stint, I have led multiple initiatives where we used Digital & Analytics to transform our day to day operations and made it more scalable, sustainable and user-friendly.

One such initiative is related to our distributors where we have used digitization to smoothen the claim management process. This process had emerged as significant pain area during our Voice of Customer survey. The initiative involved mapping of As-Is and designing To-Be process along with digitization to bring more efficiencies and visibility in the overall Order to Cash cycle process for distributors. This and other initiatives led under this program have resulted in significant improvement in feedback received during customer survey results last year vs this year.

I have also been using digital and analytics to create impact beyond supply chain as well. In my earlier role in Marico prior to J&J, I was responsible for setting up of Analytics Centre of Excellence as the first Head – Analytics. I have built processes, recruited and mentored the Analytics team from scratch and delivered many revenue generating predictive analytics initiatives in Sales, Marketing, Finance and Supply Chain apart from Revamping the Dashboards for all functions. In J&J Pharma also, I have continued the Analytics journey and set the trend by engaging in sales related Digital and Analytics Initiatives for pharma operations.

Sudhakar. P, Senior Manager, Hyundai Motor India Limited I was involved in Auto Sequence Feeding improvement through Supply Logistics Vehicle Flow Optimization, which resulted in Logistics Idle Time minimization of 2.26 Hrs/Day; Truck Travelling Distance Reduction of 61.48 Km/Day (Truck Requirement Reduction) and Logistics Cost Saving of over 16 Lakhs/Year. As part of my KRA, I have to ensure Vehicle Assembly Line Stop with a target of 30 Minutes/Year. I achieved 100% result with Zero Line Stop. Production Line Efficiency Through Model Change Frequency Reduction is 2% and lastly, logistics improvement, which resulted in Movement/Distance Reduction & Cost Saving of 65 Km/Day and 32 Lakhs/Year respectively.

A much larger platform As we start planning for the 2nd edition of the Celerity UNDER-30 and UNDER-40 Awards for next year, we promise to create this as a much larger recognition platform for the super performers through use of digitization.

We close this year’s chapter with a huge thank you to Sudeep Mehrotra and Varun Agrawal of Alvarez & Marsal and our jury members, Prof Ashok Pundir, Mr. Venkatesh Maheshwari, Mr. Raviraj Rodrigues, Mr. Royston Fernandes, Mr. Ravikant Parvataneni and Mr. Ranjan Sharma.

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PERSPECTIVE

BIG DATA ANALYTICS Big data is surely becoming one of the most powerful tools to help leading organizations transform the performance of their supply chains. However, technology experts sight that lack of capabilities and the lack of a structured approach to supply chain big data is holding many companies back. For big data and advanced analytical tools to deliver greater benefits for more companies, the organizations need a more systematic approach to their adoption. This perspective story aims to empower readers on the criticality of BIG DATA in SUPPLY CHAIN and how to make the most of it…

Devadas Nair, Chief Supply Chain Officer, Shoppers Stop

Effective SCM operations are those that react quickly to business demand in the least possible time, faster movement of merchandise from source to end point, that too with the cost effective solution. To achieve these objectives, Data analytics will be very effective in following areas:  To drive volatility management by accurately forecasting business cycles. To predict Demand cycles for a geography, Time Cycle and

by Merchandise so that Material and SCM operations are well planned  To ensure right merchandise is present in right quantum in an appropriate Retail outlets in a given time cycle  To identify weak links in terms of external sources like trading partners, any logistics operator, also internal links like our own DCs / Retail outlets, specific personnel within our SCM operations. Information will come with facts and figures so that effective measures can be

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taken to tackle that issues from root cause.  Eliminate huge inventory holding, thereby reducing blocking of cash, eliminate margin reduction to a great extent due to discount offerings  For an effective Suppliers Risk Management and providing incoming goods projection  For an effective Warehouse management, which includes picking and storing space allocation, manpower allocation to pick zones, proper replenishment of primary and storing locations, workload optimization, optimum utilization of Space, infrastructure and manpower  For an effective transportation by mapping delivery schedules as per customer / retail outlet order patterns, dynamic routing, etc.  Possible out-of-stock detection, shelf space optimization, employee scheduling, to name a few.

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Pradeep Chaudhary, Domain Consultant, Tata Consultancy Services Ltd

Manav Verma, Chief Marketing Officer, DHL SmarTrucking India

Manjunath SR, Senior Director, Industrial Supply Chain Consulting, JLL India

Data is the oil, which makes businesses work. High speed GPUs, availability of cloud environment, competitive costs of cloud processing and storage are some of the leading factors, which are driving the rapid adoption of Machine learning based data analytics. Today it is not about analyzing past data alone. We are moving from reactive to predictive to prescriptive analytics. Reactive analytics is just post mortem. It is good to analyze past data to learn from it. But now, we are seeing adoption of predictive and prescriptive analytics, which tell a business what will happen and what should one do to mitigate a potential problem. This is a real value add as it helps in nipping potential problems

in the bud. Imagine a reefer container carrying goods worth lakhs of rupees. If the temperature readings in the reefer unit were analyzed on realtime basis (along with orthogonal data) while the trailer is on the move, it is possible to predict what will be the temperature – say after 30 minutes. If any fluctuations are observed and the predictive algorithm detects a trend in the fluctuation, then an alert could be sent to the concerned personnel and the driver to look into the matter. So, real time data analytics can actually prevent a problem from becoming a full blown problem. In our case, the refrigerated cargo worth lakhs of rupees can be saved through timely intervention.

Big Data, and the ability to interpret it, has the potential to optimize supply chains in many ways. Analyzing this data can help companies in planning and scheduling shipments, monitoring goods throughout the process, responding quickly to unforeseen events, managing seasonal and variations in inventory, streamlining ordering and inventory replenishment, forecasting and planning demand, and making other vital decisions quickly and correctly.

DHL SmarTrucking has been in operation for a year now. During this time, we have accumulated a lot of data as well as learnings. We have real-

time visibility of our fleet. We are able to analyze the overall operations performance on a regular basis, and compare it to the performance at any point in the past. Data analytics helps us highlight operational gaps that can be plugged with monitoring and data-driven governance. Insights gleaned from the accumulating data, and our learnings, together have helped us see and analyze demand patterns, and predict the availability of our fleet in the near future. These insights also facilitate reduction in time between orders, and help our teams plan effective sales and operational strategies.

Supply Chain is a tricky business. One missing entity or a lack of synchronization can break the entire chain and mean millions in losses for a company. One of the main drivers of collecting and analysing data for companies today remains cost reduction. However, the use of analytics in the supply chain is resolving several pain points in supply chain management at the strategic, tactical and operational levels. Supply Chain Analytics brings data-driven intelligence to business, reducing the overall cost to serve and improving service levels. For supply chain professionals, it can only mean one thing – to upskill to be able to use advanced analytics to improve operational efficiency and make data-driven decisions Supply chain analytics turn data into real insights.

Solid operational knowledge allows an analyst to understand or interpret the results of the analysis

and to communicate those findings in a manner that would allow the findings to be actionable.

Three ingredients are key to getting an advanced analytics initiative underway: having the right people; collecting high quality data and; obtaining the best tools at the right price.

Data analytics can enhance customer satisfaction dramatically, as it allows supervisors to pick the ideal shipping methods, utilize the best carriers, reduce the potential for damage and halt delays – all leading to improved service. The trend will continue to expand, and the cost-savings alone in efficiently re-structuring supply chains are potentially enough for not only significant additional profit but also for efficient, streamlined operations moving forward.

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INTERVIEW

Land’ing

Sustainable Infrastructure Prospects

“The government is planning to introduce various measures including the implementation of an Integrated National Logistics Action Plan to streamline the sector and as a result bring the cost down to less than 10% by 2022. The government’s aim to integrate fragmented warehousing capacities through a national warehousing grid is a massive step towards streamlining the industry,” believes Rajesh Jaggi, Managing Partner, Real Estate, Everstone Group.

You have been a part of infrastructure sector for over two decades. How has the sector transformed over the years?

As the Indian economy has grown, the infrastructure sector has moved out of its nascent stage over the past two decades. The Indian Government has identified this sector as one of the major growth drivers for the economy. In the 2019 Union Budget, the government has made a commitment of about Rs100 crore for infrastructure upgradation along with diverse schemes to strengthen networking and connectivity. India has the second largest road networks in the world, spanning over a total of 5.5 million kms.

Highway construction has received a major push by the government. Also,

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other initiatives such as Bharatmala and Sagarmala are also going to help continue the transformation of the sector going forward.

How do you see logistics infrastructure and specifically warehousing infrastructure shaping up in the country?

The logistics cost in our country is around 14% of GDP, which is one of the highest in the world. One of the main reasons being the highly fragmented nature of this business. The government is planning to introduce various measures including the implementation of an Integrated National Logistics Action Plan to streamline the sector and as a result bring the cost down to less than 10% by 2022. The logistics

and warehousing sector has witnessed tremendous boost subsequent to Goods and Services Tax (GST). With the introduction of GST, the focus has turned to having logistics infrastructure across strategic locations, which helps increase overall efficiency.

Manufacturing sector and logistics service providers are increasingly looking at large organized pan-India partners who can provide Grade A infrastructure at strategic locations closer to consumer markets. The distinction between Grade A and Grade B is made on the basis of quality of construction, location, amenities, etc. According to a JLL study, the share of Grade A warehouses will increase on a regular basis and is expected to reach around 85 Mn sqft in 2019. This shows that an increasing

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INTERVIEW

INTERVIEW

The major bottleneck for the warehousing industry is the availability of attainable land parcels. Land is one of the largest components of a project but securing and buying land can take anywhere between 100 days to 1 year. Another challenge is having clear land title of the land parcel, as not having proper land title may lead to litigations. Acquiring large aggregated land banks and tax parity are also some challenges impacting the growth of the sector.

surge. Storage facilities are critical to sustain this. Thus, with infrastructural upgradation and easy transportation facilities, the government has taken a step towards boosting growth for the entire logistics and warehousing sector.

Where do you see logistics infrastructure segment five years from now? What crucial role is IndoSpace slated to play in making government’s vision a reality?

number of customers are opting for Grade A warehouses over Grade B.

What are the bottlenecks that exist in the developing state-ofthe-art logistics space?

The major bottleneck for the warehousing industry is the availability of attainable land parcels. Land is one of the largest components of a project but securing and buying land can take anywhere between 100 days to 1 year.

Another challenge is having clear land title of the land parcel, as not having proper land title may lead to litigations.

Acquiring large aggregated land banks and tax parity are also some challenges impacting the growth of the sector.

How has GST impacted the developmental process of warehousing infrastructure in the country now that we are already two years post GST implementation, how has been the difference in the pre-& post GST era?

The Goods and Services Tax (GST), which came into effect two years ago, was one of the most significant

reform measures taken towards the transformation of the country as it helped create a ‘single national market’. The Indian warehousing industry is largely unorganized but, as a result of GST, there have been more organized players coming into fray due to increased demand. GST is enabling companies to strategically plan their manufacturing and distribution locations. This is leading to consolidation of warehouses into bigger spaces and greater overall efficiency, especially among larger and modern firms. GST is also helping companies in better inventory management as companies are taking advantage of economies of scale. The overall trend is to have large-format, modern industrial and logistics infrastructure spread across key warehousing hubs resulting in overall cost benefits for the customers.

A JLL report estimates that GST will usher in a new era for the warehousing and logistics sector that could see at least 100% growth by 2021.

What are the peculiar requirements of your clients and how do you meet them

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efficiently?

IndoSpace has a proven track-record in providing modern, large and bestin-class warehouses that cater to the customized requirements of Indian, as well as multinational companies looking to expand in India. IndoSpace parks are strategically located with optimised design and layout. In addition to ready spaces, we also offer ‘build-to-suit’ options for clients – facilities that are completely customised as per client specifications, be it with refrigeration rooms or automation.

One of IndoSpace’s valued clients is Swedish telecommunications major Ericsson. Ericsson decided to set up a manufacturing unit at the IndoSpace Industrial Park at Chakan in Pune. The manufacturing facility serves as an export hub for the company’s exports into South East Asia, West Asia and Sub Saharan Africa. IndoSpace designed the ‘Build-to-Suit’ ‘green’ building keeping in mind Ericsson’s efforts to reduce their carbon footprint by controlling energyuse in their facilities and re-engineering product transportation to be as efficient as possible.

We understand client requirements

and provide seamless solutions accordingly. We handle land acquisitions, statutory compliances and clearances, making it easier for clients. All they have to do is sign the lease and begin operations.

What are the factors that make this space one of the most lucrative sectors for PEs to invest in?

The warehousing sector is growing rapidly and has seen a strong buildup in the last two years due to the structured reforms including the infrastructure status and the implementation of Goods & Services Act, which has led to greater interest from Private Equity players in the sector. The growth of e-commerce sector has also contributed towards this. Between Q1 2017 to Q1 2019, Private equity (PE) funds have invested over USD 1.1 billion in the logistics and warehousing sectors according to an industry report. In fact, we closed India’s largest ever real estate logistics fund IndoSpace Logistics Park III at $580 million last year which, post leverage will create a corpus of more than US$ 1.2 billion. Given the interest

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and backing of investors from across the globe, the sector is on right track.

What do you have to say on the governmental push and policies associated with the development of infrastructure in the company?

The government’s infrastructure development initiatives have boosted growth of the logistics sector. Under the first phase of the Bharatmala project, 34,800 km of national highways, including 10,000 km of residual National Highways Development Project (NHDP) stretches, have been approved. Sagarmala, the project to harness India’s 7,500-km coastline, 14,500 km of potentially navigable waterways, strategic locations on key international maritime trade routes as well as other infrastructure schemes such as dedicated freight corridors, will be advantageous for the sector.

The government’s aim to integrate fragmented warehousing capacities through a national warehousing grid is a massive step towards streamlining the industry. As the nation grows, demand for goods and commodities will

According to a Knight Frank estimate, total warehousing space estimated to be 68 million sqm (739 million sq. ft) in 2019 for the manufacturing sector, is projected to grow at a compounded annual growth rate (CAGR) of 5% in the next five years to 86 million sqm (922 million sq. ft) by 2024. We expect this demand will continue to be strong and a lot more companies are going to expand, thereby increasing the requirements and subsequently absorption of Grade A facilities. There is a significant amount of bullishness on India and its growth story.

With the increase in demand for quality warehouses, IndoSpace, being the only national network, largest and most modern player in industrial real estate in India, has an expertise in providing modern, large warehouses to global as well as Indian companies.

We intend to maintain our premier position with continuous innovation and improvements, which enables us to grow further.

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INTERVIEW

INTERVIEW

The Hard Pill

“The right processes, practices and tools can help in building a robust supply chain.

Pharmaceutical supply chain management must be quick to detect and respond to changes in supply and demand. In line with this, Wallace Pharma’s supply chain focus has always been on strong integration of people, systems and core processes,” shares Sandeep Chudgar, General Manager – SCM – Logistics & Distribution, Wallace Pharmaceuticals Pvt. Ltd.

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Pharmaceutical industry has been one of the most complex industries when it comes to adhering to stringent norms.

Please highlight some of the challenges faced.

India is the third largest manufacturer of pharmaceutical products in terms of volume and it is growing steadily.

The market has seen the entry of many foreign players as well as rise of many domestic manufacturers.

Historically pharmaceutical industry has been dealing with malpractices across the value chain ranging from improper branding to masking safety information and disregarding quality manufacturing standards. This has led to regulators keeping a strict watch on the pharma companies. Any violation of regulatory methods or noncompliance of standards could tarnish a company’s reputation, risking its future.

Enforcement agencies the world over have become more active. This for the pharma sector is a very positive sign but there are certain speed breakers on the road for the companies. The challenges faced by the companies are: Compliance issues and Good Manufacturing Practices: This has somehow always been a problem for the companies. Approval of USFDA is very important for pharmaceutical manufacturing in India and regular inspections help maintain quality / GMP standards. The opinion of the USFDA is the standard in the sector as well. Companies are trying to improve their standards and this issue can be solved by having officials who are more stringent and inspections on a regular basis can be done.

Spurious Medicine: Fake versions of high value and/or high-volume brands of the pharmaceutical companies in India are adversely affecting their business performance, posing another major challenge, more than that it has a negative impact on the end consumer and ultimately a huge health hazard.

Low margin of profits due to government pricing policies: The main issue raised by most of the pharma companies is that the profits which they earn are basically peanuts and this income is not enough.

Companies cite that government reforms for the essential medicines have resulted in companies lowering the prices of drugs. This has been done by the government for the betterment

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of the public. So, the government must think of a way to promote the pharma companies as well. Funding for the pharma companies might be a way to move forward.

In pharma, it’s all about reaching customers on time on demand. How do you ensure that the same is followed without any error?

Most of the pharma companies now have moved from traditional module of one or two supply to replenishment driven module and have made hub & spoke model within all the four regions of India. Multi-plants production is carried out at own manufacturing plants, loan licensing plants and on principle to principle basis, hence it is supplied to nearest central warehouse/ hub within region and from hub daily replenishment is made to selling points or state wise warehouses. This helps in the reduction of turn-around time and companies can act faster in reaching products during change in marketing dynamics /seasonality requirements.

Companies are also trying digital platforms to get daily shelf stocks at wholesalers’ and retailers’ end so that the end user gets the medicine on time and the demand is met.

How do you make your supply chain foolproof?

The right processes, practices and tools can help in building a robust supply chain. Adopting demand-driven planning and business operating model based on real-time demand can be useful in demand shaping. Building

an adaptive and agile supply chain with rapid planning and integrated execution can be another factor in creating full proof supply chain.

Optimizing product designs and product management for supply, manufacturing, and sustainability accelerate profitable innovation. Additionally, aligning supply chain with business goals by integrating sales and operations planning with corporate business planning can ultimately bring sustainability into supply chain operations and ensure reliable and predictable supply.

What are the key pillars on which Wallace Pharma’s supply chain is based?

Wallace Pharma’s supply chain focus is on strong integration of people, systems and core processes. Strategy applied is capability assessment, goal setting and timely evaluation of skill metrics of people. Wallace is having multi-location manufacturing with a strong presence pan-India. We have warehouses across all states and our products are available with 2000+ stockists and more than 5000 retailers. Manufacturing and supply chain team works with latest tools and techniques to make quality products available to our patients.

Wallace has implemented a digital business network, which is the foundation of a multi-enterprise supply chain. This connects all the supply chain partners electronically. When pharmaceutical supply chain partners are connected, it allows them to work together in sync. This provides endto-end visibility and an opportunity to collaborate with different business

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INTERVIEW

INTERVIEW

I think service chain will become more important than product chain going ahead.

Investment into India’s supply chain infrastructure is gaining momentum. The introduction of GST, liberalizing FDI rules, and increased government spending have helped spur growth in the sector. India’s aspiration to become a global manufacturing powerhouse and the government’s spotlight on ‘Make in India’ has also propelled nationwide supply chain reform, prompting several federal and state-based schemes. The time is right for first movers to benefit from the changing landscape of India’s supply chain ecosystem. With greater participation from the private sector and increased government spending, opportunities for foreign investors in the country’s supply chain are on the rise. interactions. As a pharmaceutical company, you must ensure end-to-end traceability. Pharmaceutical supply chain management must be quick to detect and respond to changes in supply and demand. We have implemented robust planning and forecasting tools, end to end process for procurement, quality check, production, distribution and execution through ERP SAP S4 HANA.

How can one achieve supply chain network optimization?

Supply chain network optimization empowers companies to compare the current state of their supply chains to multiple “what-if” scenarios. The essence of supply chain optimization exercise is to provide results that enable companies to move forward in a secure manner. There are various ways to achieve supply chain network optimization. It can be achieved through strategic planning, focus on core strengths and outsource all other activities, improve collaboration between manufacturer/supplier and retailer for demand data driven forecasting and inventory management.

How is technology enhancing the supply chain network?

Technology would be the key enabler to achieve the goals of logistics efficiency and will play a crucial role across efficiencies in ports, warehouses and transport. Supply chain technology enables to create greater visibility within your supply chain network, improved visibility and accountability, gain more control over your inventory, reduce operating costs, and, ultimately, outpace the competition. Technology has led the way enabling supply chain to become faster and more efficient.

With technology, through warehouse

and transport systems, businesses are able to provide data-capture, improve labor management, monitor resource and reduce stock losses with real-time stock checking.

With improved technology and systems now, pharmaceutical industry is having more control on storage and transportation. We can have real-time data of temperature monitoring system whether at pan-India warehouses or during transportation. Refrigerated Vans are having temperature monitoring systems. One can see on mobile at any moment whether in office or while traveling the temperature at which the medicines are stored or transported, which help us in adhering to compliances.

What’s that one mantra you follow to stay ahead of your competitors?

A simple mantra we follow is to know our internal and external customers.

Customers’ expectation can change dramatically. Supply chain is all about flow of goods and communication.

Response time to our internal and external customers is extremely important in this competitive era and apart from service levels for supply chain they need quick response.

Our sales team is meeting doctors across India to generate demand of prescription, thereby pushing sales and ultimately growth for the company.

Please share with us one of the most crucial projects managed by you at Wallace Pharma.

To make our supply chain more agile, we initiated “Project Eagle” at Wallace Pharmaceuticals. This project was to increase the availability of all products by placing the right inventory at the

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right place at the right time by redesigning and optimizing the supply chain processes to achieve higher levels of operational excellence and ensuring a smooth and harmonious inter-departmental relationship. This project achieved success in improving availability or products in the market and also contributing to the increase in sales of the company.

What are the international best practices that our country can imbibe within pharma domain?

I feel that Good Manufacturing Practices (GMP) and Good Distribution Practices (GDP) in pharmaceutical supply chain are better in other countries and India needs to fast catch up to them to stay ahead. GMP regulations require a quality approach to manufacturing, enabling companies to minimize or eliminate instances of contamination, mix-ups, and errors. This protects the consumer from purchasing a product which is ineffective or even dangerous.

Failure of firms to comply with GMP regulations can result in very serious consequences including recall, seizure, fines, and jail time. GMP regulations address issues including record keeping, personnel qualifications, sanitation, cleanliness, equipment verification, process validation, and complaint handling. Most GMP requirements are very general and open-ended, allowing each manufacturer to decide individually how to best implement the necessary controls. This provides much flexibility, but also requires that the manufacturer interprets the requirements in a manner which makes sense for each individual business.

Managing quality of medicines during distribution is a challenging operation. The challenges of the

pharmaceutical products supply chain are due to their specified shelf life and storage conditions. The various dosage forms tablets, syrups, injectables, etc., are to be transported and stored at different environmental conditions, hence all medicines cannot be handled with a general rule. viz., the requirement of handling tablets, syrups and injectables shall widely vary.

Cold chain product range of medicines are stored at temperatures between 2o to 8oC. For cold chain products, therefore the degree of carefulness shall be more due to the fear of product failures during quality control testing by customers. The GDP guidelines are intended to be applicable to all persons and outlets involved in any aspect of the storage and distribution of pharmaceutical products from the premises of the manufacturer of the product to the person dispensing or providing pharmaceutical products directly to a patient or his or her agent.

This scheme ensures that consistent quality management systems are in place throughout your entire supply chain from the early delivery of raw materials to the manufacturing plants, to the final shipment of finished drugs to the end user.

Does reverse logistics form big part of the supply chain?

Yes, reverse logistics forms a major part of the supply chain. Reverse logistics refers to the monitoring the life cycle of products after they arrive at the end consumer. This includes how your product could potentially be reused, how it should be properly disposed of after use, and any other way where your expired product to be collected back. The reverse logistics that directly impacts supply chains the most is the return of products from the end consumer back to the manufacturer.

To ensure FDA and regulatory norms of any expired or breakage medicine stocks returned as per industry norm by stockist or retailer, all companies need to collect back across India and send it for destruction. Any leakage in reverse supply chain can prove risky for a company since medicines are to be discarded after expiry.

What inventory management strategies should be followed?

An effective inventory management

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system enables a company to react quickly to market demands and stops them from falling into either having too much or too little stock: both highly undesirable scenarios. Below are few strategies which can help: Automation of inventory management system: Manual inventory counts are time consuming and drain precious manpower resources that could be dedicated to more productive work.

An automated inventory management system can take care of this arduous task with much greater precision and efficiency. Inventory levels are tracked and provided in real-time, entailing that a customer query about whether a product is in stock can be answered immediately. Modern inventory management systems can incorporate barcode technology, using wireless technology to transmit information to a central computer and store data in the cloud.

Using data analytics: Having access to real-time inventory data and analytics enables you to have accurate product and sales forecasts instantly. The data can be used to predict market demand, helping a business to scale its inventory up or down at the correct time, resulting in increased profits. It helps in • Improving customer service by providing more accurate availability of merchandise • Predicting the appropriate amount of inventory necessary to meet demand • Improving profit margins by limiting the discounting or scrapping of old stock Once you have the data for your sales forecasts available, you can use this to market your business to specific areas of your audience/customer base. This means you can refine your approach with each campaign that you run, evolving your strategy at each stage and making sure that your available inventory matches the demand of your customer base.

How do you keep your team motivated amid such pressure conditions?

There are several reasons why employee motivation is important mainly because it allows management to meet the company’s goals. Motivated employees can lead to increased productivity and allow an organization to achieve higher levels of output. We keep motivating

the team by giving them equal opportunity for self -development, collaboration within the team, set clear goals and never micromanage them. Leaders who appreciate the work performed by their employees build confidence in them and motivate them to improve their performance. No one In the system thinks about individual KRAs, everyone is working towards one common organization goal and that’s what has been driving team seamlessly.

How do you view the supply chain landscape of the country going ahead?

I think service chain will become more important than product chain going ahead. Technology to support SCM will primarily be the top priority.

Investment into India’s supply chain infrastructure is gaining momentum.

The introduction of GST, liberalizing FDI rules, and increased government spending have helped spur growth in the sector. India’s aspiration to become a global manufacturing powerhouse and the government’s spotlight on ‘Make in India’ has also propelled nationwide supply chain reform, prompting several federal and state-based schemes. The time is right for first movers to benefit from the changing landscape of India’s supply chain ecosystem. With greater participation from the private sector and increased government spending, opportunities for foreign investors in the country’s supply chain are on the rise.

This includes the steady transformation of India’s digital infrastructure as well, with federal campaigns like Digital India working to promote the growth of technology startups and enterprises.

Foreign firms with little knowledge of the Indian landscape can benefit from partnerships with established Indian firms in the sector to make it easier to do business in the country.

Sandeep Chudgar is a seasoned supply chain professional having rich experience over 25 years in paints, tires, automotive batteries and Pharmaceutical Domain. His large stint is with pharmaceutical companies wherein he has contributed on process development and optimization of supply chain cost.

He has also worked on demand driven replenishment model and implemented strategies to rationalize inventories and network optimization.

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EVENT RECAP

EVENT RECAP

Competitive.

Capable. Connected.

The 13th edition of Express Logistics & Supply Chain Conclave resonated well with the sentiments of the supply chain community with the underlying theme of ‘Competitive, Capable and Connected’. The 2-day event yet again succeeded in gathering meeting of the minds, channelizing the efforts of the industry in the right direction and in offering a plethora of opportunities amid dark clouds. A recap…

O

CTOBER 3 & 4 witnessed the gamechangers of the supply chain industry getting together in Mumbai to share success stories and best practices to collectively lead the growth trajectory, which is exuberating with tremendous prospects. With over 240 industry leaders sharing their thoughts with an audience of around 600+, the two-day extravaganza was no less than the Supply Chain Annual Fest. The presence of global speakers added momentum to the already exciting crowd who came

to unfurl potential opportunities for their respective organizations. The event kick-started with an intriguing presentation by Richard Lloyd, Director, 09 Solutions UK who spoke in-depth on ‘Enlightenment in Supply Chain’.

Lloyd sounded quite optimistic about ‘Experience Economy’ and how logistics players can prepare themselves to serve the growing demands of the consumers with technology as an enabler. He stated that the industry today is more encouraging of independent decisions.

This comes from the sentiment that you

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cannot make individuals do exactly what you want them to do. People carry their own individualism into the directives, which flows into the job.

THE POWER PANEL The trending buzzwords at the event were Data Analytics, Interconnected Supply Chain, Sustainability and techenabled last-mile delivery. This formed the basis of the first Leadership track panel discussion which had veterans such as Suparna Singh, Head – Corporate Strategy, Special Projects, L&T

Ltd., Deepak Sharma, Chief Commercial Officer, Connectivity Solutions, Global Procurement & Supply Chain, Sterlite Technologies Ltd.; Prasad Shidhaye, Director – India, Deliver Asia Pacific Supply Chain, Johnson & Johnson Pvt. Ltd.; Jagadeesh Kunchey, VP – Supply Chain & Logistics, ITC Ltd.; Kunal Shah, Head Solution Engineering ERPM, Oracle, etc.

Harping on innovation as the key, Jagadeesh Kunchey added, “I believe, to drive innovation, a good strategic move would be to follow the 3 Cs – Competition, Customers and Cost. Supply chain strategy must be in line with the business strategy and competition must play a big role in the planning. Customers in this industry are evolving and their tastes are changing.

Solutions have to be tailor-made for them, which means traditional solutions won’t do. And finally, the cost has to be optimized to ensure a win-win situation”.

Deepak Sharma decoded the strategy to drive an all-encompassing growth – people, partner, technology and customers, which he coined as ADMIRE – Analytics, Digital, Modular, Integrated, Rapid & Responsive, and Extendable ie., adaptive. Highlighting the importance of digitalization, Suparna Singh said that digitalization is evolving faster than anticipated. Today, the customers want faster delivery, single window solutions, cost effective service and higher value proposition. The supply chain industry is moving fast to cater to these demands. It has become all about disintermediation and consolidation.

According to Kunal Shah, “Thanks to the fast-evolving industry, supply chain is not just about delivery of products anymore. It is now also about the delivery of information. Now, with the advent of Industry 4.0, all the unexplored areas of improvement can be unleashed such as visibility, analysis, automation, sustainability and more”.

Sougato Shome, VP – CAM, Future Supply Chain Solutions Ltd., raised a very pertinent question to companies – do you have the technology for the sake of technology or do you deploy technology solutions for the sake of customer satisfaction? Companies need to take a thorough look at what would they want to achieve by implementing new age technology solutions rather than blindly following the trend. For

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To drive innovation, a good strategic move would be to follow the 3 Cs – Competition, Customers and Cost.

Supply chain strategy must be in line with the business strategy and competition must play a big role in the planning. Customers in this industry are evolving and their tastes are changing. Solutions have to be tailormade for them, which means traditional solutions won’t do. And finally, the cost has to be optimized to ensure a win-win situation. him, IoT, sensor-based tracking for cold chain and 3D printing are going to be the key differentiators in the times to come.

In tune with times, during one of the panel discussions, Anand Maithani, Head – SCM, Apollo Tyres Ltd., enlightened people as to how anticipating global & domestic economic upheavals can help companies navigate the downturn in their favor rather than getting trapped in the slowdown wave.

Apollo has been quick to this idea and has downturn planning in place which helped it to wade through domestic slowdown by focusing on the exports markets.

The two-day forum had several industry specific parallel tracks running simultaneously to offer audience an

in-depth analysis of their respective verticals and gain valuable insights from veterans. These tracks included Chemical, Automotive & Aftermarket and Procurement on Day One, while Day Two had FMCG, Retail & E-commerce, Pharma & Temperature Controlled Supply Chain Track.

THE AWARDS NIGHT Manoj George, who is a Grammy Award winner Indian Violin Maestro, mesmerised the audience with his distinguished style of performance. On this enthralling evening, a whopping 92 awards were given away to deserving companies working across industry verticals and service sectors.

Key Takeaways 1. Customer Centricity is the key to sustain the tag of a ‘Superbrand’.

2. Vendor engagement on frequent intervals helps companies understand trends and develop products on the basis of customers’ needs.

3. Companies need to focus on Cost Championship by way of devising a sound supply network efficiency to drive ultimate value.

4. Communication, Collaboration and Change Management will be the driving factors.

5. Companies can no longer work in siloes to ensure holistic growth. They need to break barriers between functions and geographies and work coherently to meet the ever-evolving needs of the consumers. In short, there needs to be network centricity from supply chain to demand chain.

6. Making the best use of new age technology tools will define companies’ future course of action and how they need to agile and nimble to drive these changes.

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RECAP

RECAP

Trending GL BALLY Unilever pledges to halve use of virgin plastic by 2025

Unilever has committed to halving its virgin plastic use by 2025 by increasing the amount of recycled plastic in the packaging for its products and developing alternative packaging materials. The company will also boost its collection and recycling of plastic packaging, aiming for 600,000 metric tons per year by 2025 — slightly less than the 700,000 metric tons the company produces, the company announced in a press release.

“This demands a fundamental rethink in our approach to our packaging and products. It requires us to introduce new

and innovative packaging materials and scale up new business models, like re-use and re-fill formats, at an unprecedented speed and intensity. Our starting point has to be design, reducing the amount of plastic we use, and then making sure that what we do use increasingly comes from recycled sources.

We are also committed to ensuring all our plastic packaging is reusable, recyclable or compostable,” Unilever CEO Alan Jope said in a statement.

In collaboration with global partners, along with the UN Development Programme, Unilever has driven more effective recycling infrastructure in India. Alongside these efforts, it has established 3,000 waste banks in Indonesia and thereby enabled 400,000 people to recycle their plastics in the absence of dedicated collections.

Unilever is not alone in making drastic plastic reductions.

PepsiCo pledged to reduce virgin plastic in its products by 35% by 2025. Walmart, with its private-label brands, and Keurig Dr. Pepper are working toward full recyclability. Recycling players like Terracycle, with its waste-free e-commerce platform Loop (Unilever and PepsiCo are partners) are working on solutions for reducing single-use or non-recyclable plastic packaging, but so far, no radical solutions have scaled.

Nike launches new renewable energy distribution centre The sportswear apparel giants, Nike, has launched a new distribution centre that runs on renewable energy and recycles 95% of its waste generated on site. The new 1.5mn sq.ft. centre in Ham, Belgium, is set to accelerate Nike’s logistics capabilities in order to meet the increasing consumer demand whilst advancing sustainability at scale.

Eric Sprunk, Nike Chief Operating Officer, commented, “This state-of-the-art facility will increase our responsiveness as we accelerate our digital growth and better serve millions of consumers across Europe, Africa and the Middle East.” With Nike aiming to achieve its goal of becoming zero carbon by 2025, the firm is determined to eradicate waste from its supply chain over the next five years.

According to Nike’s estimation, the centre’s location is close to a network of canals enabling “99% of inbound containers to reach the local container park by water,” reducing 14,000 truck journeys every year. The centre, known as the Court, runs on 100% clean energy sourced from five local sources; wind, solar, geothermal, hydroelectric and biomass.

Nike is working hard to enhance the sustainability of the materials in its products. Ranked among the top five

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Amazon India unveils long term sustainable packaging initiatives; aims to eliminate single use plastic packaging by June 2020 Amazon India recently announced its commitment to eliminate single use plastic from its packaging by June 2020. A significant step towards this change is the introduction of ‘paper cushions’, which will replace plastic dunnage like air pillows and bubble wraps across its fulfilment centers in India. Paper cushions will be used to fill the void space inside packages to ensure that the product is well protected in transit. This environment friendly and fully recyclable packaging solution has already been launched in select fulfilment centers (FC) and will be extended across all FCs of Amazon in the country by the end of the year.

The company has ensured that its packaging material in the form of corrugate boxes and paper cushions contains as high as 100% recycled content and is also fully recyclable. The plastic currently used in packaging mailers and bubble bags is made of 20% recycled content and is also recyclable. Amazon India is aggressively developing plastic free alternatives for packaging mailers, bubble bags, stretch wrap and tape used in the packaging which will help the company eliminate all forms of plastic used in its packaging.

Amazon continues to be committed to collection and recycling of plastic packaging material. The company has pledged to collect plastic, equivalent to all the plastic packaging material used by the Amazon Fulfilment network in the country from September 2019. This is an extension of the initiative which has been underway in the State of Maharashtra for a year.

In line with its commitment to sustainability, Amazon India launched Packaging-Free Shipments (PFS) last year and has expanded to 13 cities in less than a year. With packagingfree shipments, the company minimizes secondary packaging required for individual shipments by securing multiple shipments together in a reusable crate or a corrugate box. This was introduced to reduce waste generated from secondary packaging of customer orders. With the introduction of paper dunnage and PFS, Amazon India aims to minimize plastic generated throughout its supply chain and ensure secure

deliveries of its customer orders.

Eco-friendly Packaging initiatives: All plastic dunnage across the Amazon fulfilment centres in India will be replaced with paper cushions by end of the year.

60% of the Amazon Pantry orders are now delivered in totes which has enabled the removal of secondary packaging.

Packaging free shipment (PFS) now expanded to 13 cities within a year.

We have partnered with brands to develop e-commerce friendly packaging. As of July 2019, we doubled the number of instances where products were shipped with only the manufacturer’s packaging.

In 2018, we doubled the instances of a customer receiving a box with multiple products in it, thus reducing packaging material used.

These initiatives are a part of Amazon’s global sustainability goal to help achieve Shipment Zero, the company’s vision to make all Amazon shipments net zero carbon, with 50% of all shipments net zero carbon by 2030.

Gujarat tops the perception based national logistics index once more

companies in the Better Cotton Leaderboard, the standings showcase the sustainable and ethical cotton sourcing practices.

In 2018, Nike and Gap were revealed to be “fast movers” for sourcing 20% more Better Cotton than in 2017.

Gujarat has one again topped a perception-based index of mobility of goods and efficiency of logistics chain, closely followed by Punjab and Andhra Pradesh. The state has been ranked the highest in the second edition of the Logistics Ease Across Different States (LEADS) index, which is based on indicators such as infrastructure, services, timelines, traceability, competitiveness, security, operating environment and efficiency of regulation. The index is developed by the commerce and industry ministry along with Deloitte.

Commerce and industry minister Piyush Goyal released the report recently.

“The LEADS Index is an effort by the commerce and industry ministry to establish the base line of performance in the logistics sector based on the perception of users and stakeholders at the state level,” the ministry said in a statement. Himachal Pradesh stood last on the chart. Bihar ranked at 20th position.

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Among the union territories, Chandigarh occupied the top position followed by Delhi and Puducherry. Chandigarh has replaced Daman and Diu in the latest logistics performance index. With regards to the hilly states, Tripura retained the top spot. It was followed by Sikkim and Arunachal Pradesh.

The study pointed to specific road links that need widening in Gujarat, rail network capacities that require enhancement and issues around security of cargo on specific stretches, power tariffs, toll rates and terminal capacity of Ahmedabad airport.

For Maharashtra, which ranks fourth, it said the problems with respect to road congestion around JNPT, inefficient toll points and Mathadi labour remain significant. While Punjab has enabled connectivity with key gateway ports, it has a resultant impact on the cost of transit due to toll taxes. It also needs to improve internal connectivity within the state – that is to its terminals, industrial areas and markets.

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