Celerity, in business through Supply Chain November - December 2017 by Celerity Supply Chain Tribe

SUPPLYCHAIN.CELERITYIN.COM November-December 2017 Volume 1 Issue 6 For private circulation only

GAMECHANGER How logistics is changing with new-age B2B marketplaces

LEADERSHIP RS Sachdeva, COO, VECV, talks about ‘Delivering More with Less’ as their innovation mantra

MISSION SUN

Kunwer Sachdev, Founder & MD, Su-Kam, is envisioning every Indian household to be powered by solar energy

K N O W L E D G E PA RT N E R

PUBLISHER’S NOTE

Well Begun is Half Done Dear Readers, It is heartening to see a lot of action in the transportation space. Uberisation in trucking has happened with many start-ups in this space. Many innovations are also taking place at Volvo Eicher Commercial Vehicles (VECV) to make their vehicles efficient and technologically superior in every aspect. VECV pioneered the Driver Training concept. However, much more needs to be done for the truck drivers. According to American Trucking Associations Chief Economist Bob Costello, the trucking industry could be short 50,000 drivers by the end of 2017. India too is seeing a severe shortage of drivers though there is no verified number. Factors like lack of hygienic food and sanitation facilities along the routes, delayed payments and irregular hours are discouraging young people from getting into this occupation. Employers must give the required attention to improving the drivers’ conditions across all these factors. Users of the service must recognize drivers as an important part of the equation and force the fleet owners to conduct and share drivers’ satisfaction ratings and their plans on improving the same. It’s not just the drivers, an additional 11.7 million jobs will be created over a nine-year period in Transportation, Logistics, Warehousing & Packaging sectors, according to a recent NSDC report. Skill gaps across levels will have to be plugged by giving sufficient time and effort towards skilling and training programs. Technology will have to be used effectively to create short on-demand courses. Talking about Uberisation in trucking, a global giant in specialty chemicals, Dow, is working towards offering an ‘Amazon-like experience’ in terms of chemical logistics, where customers will be able to place orders, track and reorder only in a matter of few clicks. At the recently held 11th Express Logistics & Supply Chain Conclave held in Mumbai, I got the opportunity to meet up with many of our readers and contributors. I would like to thank each one of you to have made this magazine, the most widely read within a span of one year. Yes, with this issue we will have published 6 issues in the year. We look forward to your suggestions in helping us improve the same.

Charulata Bansal Publisher Charulata.bansal@celerityin.com

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

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CONTENTS

November-December 2017 Volume 1 Issue 6

COVER STORY

POWERED BY THE SUN The success story of Su-Kam is the biggest example of ‘Make in India’. Kunwer Sachdev, Founder & MD, Su-Kam’s vision is to see every single household powered by solar. Interesting revelations inside…

OUTLOOK

Logistics – From periphery to the boardroom The SCM industry needs to harness the right talent and impart them with the best in class training to drive growth, writes Manish Saigal, MD, Alvarez & Marsal (A&M).

INTERVIEW

GAMECHANGER

B2B Marketplaces – In the business of helping businesses The new age entrepreneurs’ risk-taking appetite and the rejig of logistics companies towards more organized operations would greatly aid in the success of B2B marketplaces in times to come.

Delivering chemicals responsibly Alok Gautam, Country Logistics and Supply Chain Leader, Dow Chemical International Pvt Ltd (Dow India), envisions about offering an ‘Amazon – like experience’ in chemical logistics.

LEADERSHIP

Driving frugal innovations in trucking RS Sachdeva, COO, VECV, shares as to how innovations at Volvo-Eicher are giving their customers relevant upgradations at best pricing.

FOCUS

PERSPECTIVE

e-procuring success With Procurement 4.0 as the theme, the CPO Forum offered various paradigms of procurement in the digital age and how can companies align their operations with changing times.

33 A latent opportunity E-learning modules, compatible with smaller screens and creating compelling content will bring training out of the classroom and into the hands of each employee, believes Sanjay Tiwari, CEO, 21CC Education.

EDITOR: Prerna Lodaya

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RECAP

ELSC: Supply chain future & fortunes decoded The 11th edition of ELSC Conclave was yet again successful in bringing together the great minds in the SCM space.

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

Regional OďŹ&#x192;ces: Kolkata, Delhi, Bangalore & Mumbai

OUTLOOK

From PERIPHERY to the BOARDROOM With logistics as the epicenter of growth, companies are diverting their attention towards streamlining their once so-called supply chain as a cost center to turn it into a profit center. But for this to happen, the industry needs to harness the right talent and impart them with the best in class training as well as a boost in infrastructure is what is needed to ensure holistic growth.

or a long time, logistics as a function has remained a responsibility of team disconnected to core business, working in isolation, given an ad hoc task of reducing costs for every movement and storage the company outsources. This treatment for the function has been because of following reasons: » Limited control over external factors like infrastructure and hence limited control over outcomes » Limited opportunities to innovate due to lack of differentiated scalable service providers » Lack of standardization and consistency in operations leading to numerous ad hoc and mechanical tasks » Evolving business models of the company resulting in ad hoc requirements

» Maintaining compliance and operating standards extremely difficult and hence companies prefer to turn a blind eye. Logistics remains one of the key functions to service any customer from real sectors like coal and steel to modern new age industries like e-commerce and organized retail. This approach towards logistics function has resulted in lack of creativity, standardization and innovation. Insufficient infrastructure and lack of focus on logistics has resulted in costs which are higher than most global benchmarks. The lack of focus has been largely due to company’s intent to solve other parts of the puzzle first – markets, products, sales, marketing, customer service etc. However, in recent past there has been significant effort to

bring back vitality in supply chain and logistics function. The reasons can be attributed to demand and supply side both: » Cost of exception has gone up significantly – delays, detention, demurrage, pilferage, spoilage » Business models of companies have become stable and logistics is considered important to improve market share » Technology is available to improve reliability and control external vendors » Quality of service providers has gone up significantly. In a research conducted by a reputed research organization in June 2017, over 40% of companies have logistics KPIs now linked to reliability and service levels. Around 15% have KPIs linked to

OUTLOOK It now becomes imperative that professionals are available to deliver the expectations of the business. Logistics needs to come out from its dark image and needs to be projected as a ‘cool’ career for youngsters. What can be more exciting than jetting around the globe to finalize delivery partners, or supervise installation of new automation machinery in a warehouse or designing delivery models to the most modern stores. As the country grows, logistics knowledge infrastructure needs to improve.

carbon footprint. Safety, Health and Environment (SHE) are increasingly being focused by logistics team and implemented for internal functions and external vendors. It is expected that logistics team’s KPI will increasingly shift from cost to reliability and market availability. According to another research conducted on manufacturing sector in India, supply chain officers control 50% of company’s annual spend and 66% of employees directly report to the role.

big reputational risk. Hence, supply chain is increasingly becoming an important discussion point in board meetings. » Exposure to logistics and supply chain creates a well-rounded professional with understanding of both customer needs and operation complexity. Improvement in professional intake in logistics vertical has created pool of leaders who are increasingly assuming roles in the boardrooms.

Growing recognition of supply chain

Sourcing young talent

The trend of supply chain and logistics increasingly controlling more and more resources is expected to continue. This can be explained as follows: » Growing industries like ecommerce and retail thrive on supply chain. Some of these industries operate at very low margins and logistics is the most complicated function to drive profitability and customer experience. Supply chain excellence is a source of competitive advantage. » Companies are increasingly practicing lean and reducing delivery time for customers simultaneously. This could lead to business continuity risks. Logistics and supply chain increasingly needs to rely on science and technology to mitigate the risk. Supply chain disruption is a

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Given the above, it now becomes imperative that professionals are available to deliver the expectations of the business. Logistics needs to come out from its dark image and needs to be projected as a ‘cool’ career for youngsters. What can be more exciting than jetting around the globe to finalize delivery partners, or supervise installation of new automation machinery in a warehouse or designing delivery models to the most modern stores. As the country grows, logistics knowledge infrastructure needs to improve. This sector has more than 20 million people working. Some of the key initiatives required are as follows: » Inclusion of logistics curriculum in mainstream business institutes » Investments by companies to improve and train logistics team capabilities

» Vocational training for drivers, equipment handlers and warehouse operators » Government sponsored initiatives for integration and information sharing between various infrastructure bodies. According to one research, 48% of supply chain and logistics company’s heads feel that non-availability of talent is the biggest gap. Logistics fraternity needs to come together to address this challenge and keep the engine moving, which is one of the most important puzzle piece for the country to grow. Manish Saigal leads strategy, market entry, commercial and operational diligence, and post-merger integration offerings for A&M in India. He brings more than 17 years of rich experience in strategy, operations, private equity (PE) and M&A consulting. He specializes in market entry strategy, business planning, commercial and operational diligence, integration and separation advisory and bid advisory for PPP projects. Before A&M, he spent 11 years with KPMG India, where he most recently served as Partner in their Transactions and Restructuring group.

COVER STORY

THE SUN “In order to realise the dream of becoming ‘Renewable Energy Capital of the World’ as envisioned by the Hon’ble Prime Minister of India, the country needs to take a leadership role to support the sector growth and address critical challenges in its technological and operational implementation,” elucidates Kunwer Sachdev, Founder & Managing Director, Su-Kam. Today the success story of Su-Kam is the biggest example of ‘Make in India’. Kunwer’s vision is to see every single household powered by solar. Clearly, his mantra is ‘I innovate therefore I am’. Here’s a motivating excerpt of interaction with the visionary himself…

How is the power sector dynamics shaping up in the country? Availability of power has improved in the country. In the coming years, power will be available in most of the states 24x7. Losses of transmission and distribution losses have been reduced to 5% in Haryana; these losses contribute mostly to power cuts. As of 2017, the utility power sector in India has one national grid with an installed capacity of 330.15 GW out of which, 30.8% of total installed capacity is renewable power plants. India generated the 1,236.39 TWh of gross power by utilities during the fiscal year 2016-17. The total power generation (utilities and nonutilities) in the country was 1,433.4 TWh and for the same year, the gross power consumption was 1,122 kWh per capita. India is the world’s third largest producer and fourth largest consumer of power. Solar power is playing an important role in augmenting the power available, with the continuous developments in the technology in the solar segment; it will be the cheapest available power in the next 10 years. India has set a target of having 100 GW of solar energy and 60 GW of wind power capacities by 2022. As of June 30, 2017, the country’s solar grid had a cumulative capacity of 13.11 GW. India

quadrupled its solar-generation capacity from 2,650 MW in 2014 to 12,289 MW by March 2017. The country added 3.01 GW of solar capacity in 2015-2016 and 5.525 GW in 2016-2017, the highest for any year.

Energy conservation is at the helm of your vision & mission. How do you aim to achieve that? Now, as India’s power requirement is slated to grow at an average of 5.2% between 2014 and 2024, the Narendra Modi administration is increasingly turning its focus towards saving more power. In January 2015, the government had launched the National Programme for light emitting diode (LED)-based home and street lighting. Under this, conventional lamps, which typically use more power, will be replaced by LED lamps that consume 80% less energy. Government bodies like Bureau of Energy Efficiency (BEE) have taken out the power ratings for electronics and household equipment. Inverters should also be brought under the ambit to ensure that companies manufacture energy efficient devices. Currently, only one inverter has received a 4-star rating, which belongs to Su-Kam. We aim to bring in more of our products under the ambit along with providing LED based solutions

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for homes that will conserve more energy. Automatic voltage regulators/ stabilizers must be brought under the ambit too as at times, the product is energy efficient but the stabilizer that is connected guzzles a lot of energy, which brings down the efficiency, hence it is important to bring in accessories as well under the umbrella.

You have very rightly said in your message that ‘change the market before it changes you’. How do you plan to do that with your experience, expertise and teamwork? We are bringing in newer technologies which are more efficient, customer friendly and offered at a lower price, for example, all the new inverters and UPS are solar compatible so they can be converted to the solar inverter by attaching charge controllers with the existing product at any time after the purchase. This can be done at a marginal increase in cost at the convenience of the customer. Secondly, we have combined inverter and UPS in one product, which provides zeroswitch over time, hence eliminating the need for additional UPSs in homes and offices for IT equipments. Our aim is to constantly innovate and strive for excellence.

Even after government’s thrust on this sector, there exist many gaps. How can private sector bridge those gaps? Eliminating this gap will require alternative delivery models. This presents a significant opportunity for the private sector. By creating viable models for delivery, the private sector can complement government efforts, bridge the power gap and drive socioeconomic development in rural India. The private firms must make energy efficient products, these seem expensive but in the long term, are cheaper for the customer as they reduce the energy bills and consume power more efficiently. It is our responsibility as well along with the government to create awareness about these products. At present, there is 8.73 GW of gridconnected installed solar capacity in the India, out of which rooftop solar is barely around 500 MW. To accelerate the development of Solar Rooftop projects, which have been otherwise slow, Solar Energy Corporation of India (SECI) has allotted a mega tender of 500 MW among hundreds of solar developers early this month. SECI has also announced a scheme for allocating 1,000 MW of rooftop solar capacity on

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various government buildings. MNRE is providing a subsidy of 25% for government buildings and giving stiff targets to government departments for rooftop adoption. Such initiatives are expected to increase the scale, lower the cost and make it more viable for the private sector to participate.

You have been doing lot of work in solar power space. Kindly elaborate on the game changing propositions that this segment offers? Su-Kam will be launching a new product that will combine 4 products in one- Off grid inverter, on grid inverter, normal inverter and UPS. When there is a power cut, a normal inverter will provide back-up UPS to ensure uninterrupted functioning of IT equipment by providing zero switch over time, off grid inverter provides back up by storing power in batteries and providing when the sun is not available and on-grid inverter will supplement the existing need of power and selling excess power back to the grid for which government will pay the customer. This product will bring in a paradigm shift in the market.

How do we see India occupying the leadership position in solar powered products? Solar modules are being produced indigenously; the quality of these panels has been consistently good, in comparison to Chinese products. This is creating a brand image in the international market and people prefer products made in India rather than Chinese products. In inverter and UPS segment, we have already brought about the change and going forward I see Indian products ruling the African and Middle Eastern markets. India now wants to start positioning itself as a key global solar market and not just another name in the list of emerging solar markets. Over the past months, both Prime Minister Modi and the Minister for Power have used the phrase ‘renewable energy capital of the world’ to describe India’s future role in the sector. While one may dismiss that as empty grandiloquence, there is definitely a sense that India has got the most to gain from renewable energy amongst major economies in the world. The country, therefore, needs to take a leadership role to support the sector growth and address critical challenges in its technological and operational

COVER STORY implementation.

What are the challenges in operating in such a policy driven sector? The policy to provide subsidies on the installation of solar power units should be made hassle free; at the moment, it is very cumbersome. The government should also provide subsidy by local state electricity board on generation instead on the installation of a solar system. This change will simplify the installation process and claiming of the benefits much easier. The implementation issues of netmetering with DISCOMs are adding to the challenges. Long waiting in the installation of a net meter (up to 100 days), passive opposition from DISCOMs and lack of training and process protocols at utilities are some of the implementation challenges, which further add up to the issue. The successful implementation of net metering policy is critical for solar roof-top to grow in the commercial and industrial segment. The grid parity of solar rooftop project in residential areas will still take next 4-5 years. Policy interventions by MNRE such as offering rooftop solar power a higher Renewable Purchase Obligation (RPO) credit can incentivize the DISCOMs to fulfill more of their RPO requirement. This can ease the implementation challenges in net metering.

How do you think the entire entrepreneurial stride happening in India? I usually hear people say that entrepreneurship is all about taking the risk, but I disagree with the thought. The risk is not the only factor; one must have a business sense which includes many things, a few of them being products planning and testing, efficient functioning of the organization, aligning the whole organization to the common goals. Unexpected financial risks can cause a collapse in your business’ revenue stream if your company hasn’t made appropriate preparations by creating a risk management strategy; this is what happens these days.

What are key aspects that one needs to consider before taking the big bang leap? Products and services need to be

planned extremely well and to be tested thoroughly before launching into the market. One needs to be thorough at the bootstrapping stage.

What do you think of recent government policies and how do you feel that they will fare in the long run? The government is, fortunately, providing a slew of incentives for the solar sector. But a lot more needs to be done. The implementation of reforms like GST will spell a turnaround for the sector. The reform will have a positive impact on cash flows due to change in the rate of taxes. It will also help us move towards a common market, boost the investment in the country and create a clean environment where entrepreneurs will not be harassed by state government. Other initiatives in the power sector reforms will have a long-term impact on power availability. Improvisation of infrastructure like building the new railway corridor will create increased employment, and provide a better environment for exports and reduce the transportation time, hence boosting business. However, a lot of people are still not aware of the benefits of solar energy. What we require is a strong and focused push by the government towards solarizing India by taking further initiatives of educating people about renewable energy. We also need more schemes geared to promote the use of solar energy.

How are the supply chain complexities being managed in this sector? Infrastructure improvement like the building of the rail corridors and other developments will definitely provide a boost to the sector by reducing transportation time. GST will improve efficiency in the supply chain; time taken to deliver goods has reduced due to a unified tax system.

What are the key initiatives taken by Su-Kam in streamlining supply chain? Company performance is effective only if suppliers’ operations are running smooth. No matter how advanced your own production capabilities are, if a supplier misses a delivery or produces sub-standard goods, one will feel the

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cost. If a supplier is failing to meet his standards, you need to have a process to quickly remedy the issue. The better and faster this can be communicated, the quicker the problem can be solved. Any company supplier relationship management program must include tools to improve misfiring suppliers. After GST kicked in, we are outsourcing supply chain except for (JYoti).

How has technology been a differentiator for your company? Technology implies knowledge and utilization of tools, techniques and systems in order to serve a bigger purpose like solving problems or making life easier and better. Its significance on humans is tremendous because technology helps them adapt to the environment. It has been the driving force behind Su-Kam, hence our focus is always to provide solutions to the problems faced by customers, that’s how we kept building products with newer technological updates and advancements. Su-Kam understands the need of the customer and focuses on innovation. The company manufactures products having high-end technology at affordable prices and constantly evolving features, keeping customer comfort and safety in mind. I am fond of saying that we built this company on three planks: technology, technology and technology. Our engineers not only use the latest, most promising technologies, but they are constantly encouraged to develop new products, experiment with new processes, even think new ideas.

Please tell the other side of Kunwer Sachdev which probably no one knows about? I believe that I am a simple man who follows a strict regime to maintain physical and mental fitness. I believe that exercise is a key to an individual’s efficiency at work. So, one should never neglect exercise at the cost of work. I really enjoy my workouts, be it swimming, running or yoga. Apart from work, I cannot live without spending my energy on physical fitness.

You are an innovation guru. What have been some path breaking innovations in your journey and how those learnings have you helped you innovate better products for the

consumers and the markets? MOSFET Inverters were the first innovation that led us to a trail of many innovations like sine wave inverters with various capacities going up to 100 KW, all designed indigenously, high frequency inverter, bi-directional inverter and latest being the off-grid & on-grid inverter combined in one product. Each time I kept pushing the goal post ahead for myself and my team. This taught us to keep innovating and thinking big. Su-Kam has been involved in making innovative solar products to suit needs of everyone from a small house in the remote village to big industries.

My advice to entrepreneurs would be to follow your passion because when one does that, he is able to come up with products and services that are worthwhile and are able to leave a mark in the market. Such products aim at solving the problems faced by customers and the sole aim should never be creating only the valuation for the company. Instead, focus on creating value through your product, rest will follow.

Please enlighten us on your foray into other countries and how has it been operating in those countries vis-Ă -vis India? We are currently exporting to over 80 countries and Su-Kam is a wellrecognized brand in the African and Middle East markets. Most of these countries have power situation similar to the Indian subcontinent, hence it makes it easier to provide solutions. Apart from that, we also build customized products for a few geographies depending on the product specifications.

Where do we see Su-Kam going ahead when there is lots of competition building up? Su-Kam is into solar domain and inverters will play a major role here by creating a substitute for imported inverters for both off grid and on grid inverters. Our competition is not from indigenous manufacturers but from inferior quality Chinese products. By manufacturing quality technology at an affordable cost, we can succeed in weeding out these inferior Chinese products from the Indian market.

Whatâ&#x20AC;&#x2122;s your growth plan for future? We are making highly efficient solar products that will enable the return on investment to be reduced to 3 years from 5 years since we are providing solutions that can convert normal inverters to a solar inverter at a very low cost. At the same time, our Grid tie inverters will not only fulfill the energy requirements of the home where they are installed but they will be able to feed excess power back to the grid,

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hence enabling earnings as well. Solar along with storage will be the next big thing worldwide, so Su-Kam will be a company selling power rather than selling products.

Your message to the government to doing business in India a conducive propositionâ&#x20AC;Ś The lesser interference of government in the industrial domain will be more beneficial, for example- digitalization of services is a big step in the direction. Although the government is encouraging the use of solar energy, we require a more proactive approach like the framing of strong policies especially geared to promote the solar energy. We also need to educate more people about the benefits of solar energy. Sufficient incentives should be provided to households to go solar. Net metering should be actively promoted. Although the net metering policy is in place, lack of adequate financial incentives acts

as an impediment. It may take 3-4 months from the date of application to receiving a grant of connectivity even for a residential rooftop solar system. There are further shared approvals and clearances between multiple departments such as the regulatory commission, state nodal agencies, DISCOMs, urban local bodies, etc., which may cause delays. The process of obtaining clearances should be made unified, centralized and hassle-free. Another major challenge is the non-availability of skilled and trained manpower. This couples with loosely drafted rooftop leasing agreement and sharing of roles and responsibilities between the developer and the rooftop owner. Though subsidies are available, the government needs to make it more easily accessible and encourage people to use it. Overall, the government should launch more schemes relating to solar power to reduce the cost of solar power generation in the country.

COVER STORY We, at Su-Kam have always stressed on innovation and the need to evolve superior technologies. Commitment to our core values, willingness to take risks and implement the seemingly impossible ideas remain our uniqueness. Khushboo Sachdev

UP, CLOSE & PERSONAL

What drives you? Providing solutions in the form of products and technology drives me. I can foresee the future problems and this helps me build solutions for them.

Do you take a day off from work or ideation? How important is it to take some time off from your regular work schedule? It is of utmost importance to take some time off from everyday work since this helps me to unwind and recharge and be ready for newer challenges. If it were to me, I would like to take a couple of days off every 3 months but somehow that doesn’t happen, so I try and make the most of the weekends with my family and friends.

What do you do to disconnect yourself from work and start with a fresh thought? Taking a short vacation where I prefer to go offline, spending time in nature and just letting loose freshens me up and fills me with a new stream of thoughts.

What’s your leadership style? I like to give a free hand to my team, I like them to develop their own style and bring their uniqueness to the table.

What’s success, according to you? For me, success is to overcome challenges and problems one after the other, it is a continuous process out of one into the other. Overcoming obstacles, no matter how big, is a true measure of success for me. It is rightly said that success is not measured by the position you attain but by overcoming hurdles in your journey.

What’s that one proverb or thought that has stayed with you for years and has helped you in emerging a better leader? The thought that I always wanted to be somebody, that thought persists today

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as well in my mind as it was 30 years back.

Recent book that you have read and has left a lasting impact. ‘Too Soon Old, Too Late Smart: Thirty True Things You Need to Know Now – Gordon Livingstone’. The book is full of wisdom; this is a collection of pithy observations on how we deal with the hard stuff in life. It was touching and heartbreaking. Livingston lost two children, one to Leukemia and one to suicide, and he shares the lessons he learnt from those losses as well as his knowledge as a psychiatrist. It’s a truly wonderful read.

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INTERVIEW

DELIVERING CHEMICALS RESPONSIBLY “Our global vision is to offer an ‘Amazon – like experience’ in terms of chemical logistics, where customers will be able to place orders, track and reorder only in a matter of few clicks. Our global initiatives, that we tailor to suit the needs of local market, are our steps in the direction of fulfilling this vision,” shares Alok Gautam, Country Logistics and Supply Chain Leader, Dow Chemical International Pvt Ltd (Dow India), during an exclusive interview. Excerpts… How have been the dynamics of chemical industry changing over the years?

What are the challenges plaguing chemical industry in India and how can they be overcome?

The chemical industry has experienced steady growth over the last five years with a CAGR of 7%. The improvement in the manufacturing and increased sophistication in the products and processes has been the primary booster for this growth. Logistics and supply chain for the industry are changing demand patterns and trade trends within countries, increase in logistics costs, and focus on Environment, Health & Safety (EHS). Imports of chemicals is gradually balancing from complete Middle East focus to SouthEast Asia. This has given rise to the development of ports on the East-Coast of the country like Vizag, Paradip and Cuddalore. Ever-improving road infrastructure, use of railroads to transport chemicals and better awareness & implementation of safety best-practices in movement of hazardous goods are good signs for the industry. We also see in recent years a trend towards significant investments in high-end vehicles for road transportation by Logistics Service Partners (LSPs). These activities are raising the bar on safety and sustainability of operations for chemical industry in India.

While the spend on logistics is about 4-5% of the revenue in developed countries, in emerging economies like India, we spend about 10-11% to reach similar scale and efficiency. This discrepancy can be attributed to challenges such as inadequate infrastructure as against increased scale of industries, intermittent adoption of multi-modal transportation, longer lead-time, demand variability, pilferage and theft, and absence of guidelines for storage and transportation of dangerous goods. Recent government initiatives such as diesel de-regulation, thrust on building highways, dedicated freight corridors and adoption of GST will enable immense potential to bring logistics in the front-and-center of business operations.

How is the GST impact changing the course of action for Dow India? Over the last quarter, Dow India has worked closely with its partners and vendors to educate them about compliance requirements, cost advantages, warehouse consolidation and documentation to adopt the biggest taxation reform in a seamless

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manner. So far, GST is delivering on its promise of redesigning supply chains and centralizing hub operations to enable scale of economies. It is also aiding industry-efficient practices such as bulk-breaking and cross-docking from a central location. In the first two months of the implementation, we have witnessed a decrease in transitlead times, focus on consolidation of shipping points for the industry and ease of operations due to decrease in

INTERVIEW taxation and documentation. Going forward, the chemical industry is collaborating with the government to ease teething issues as streamlining of e-challans for every state, service tax in freight, HS code requirement from fragmented industry, etc.

With such a huge volume to cover and with supplies across the globe, how do you enhance visibility of each value chain? Our vision is to be partners in sustainable business solutions. We have significantly ramped-up our logistics infrastructure to take products seamlessly into the market. Dow India S4TAR program in 2013 is one such mutually beneficial initiative, which promotes business growth and encourages sustainability excellence with supply chain partners. The S4TAR initiative ensures alignment to the company standards with respect to safety, pollution and environment, and provides a specific framework to recognize and incentivize our partners who exhibit exceptional performance. As we progress, the performance goals are raised every year to keep pace with the highest standards in the industry. By sharing the best practices with our supply chain partners, we hope to achieve performance and sustainability excellence.

Safety is a key concern in chemical industry. How do you ensure the same? Procurement, storage and transportation of chemicals and dangerous goods are

To ensure that the growth is sustainable, we need to concentrate on increasing the efficiency of the industry. The first step in this would be to reduce noise from the system. Reducing the vestigial elements from the value chain would lead to a significant reduction of costs. The reduced cost benefit can be transferred to the end consumer. Lean and smart organizations will become the foundation of a better performing industry.

rolled out in line with SOPs. Right from loading points, en-route transportation to unloading at customer locations, we have checks and balances across the entire chain. For hazardous goods specifically, we conduct Distribution Risk Review (DRR) and the entire route is mapped by experts for any new location. It also includes assessment of unloading facility and, if required, includes training to personnel at different nodes. To counter the menace of pilferage on bulk movement, we are taking steps to share properties of chemicals being transported at loading stations, ensuring the info sheets are with drivers. Today, Dow India transports all hazardous material only in ISO tanks, reducing safety risk on the road considerably. We were the first to introduce ADR (formally, the European Agreement concerning the International Carriage of Dangerous Goods by Road) in the

country for hazardous chemicals transportation. We also have imposed restrictions on night driving and work with our partners to ensure drivers are adequately rested on long journeys. GPS tracking of the vehicles is done by LSPs and reports are shared on daily basis to ensure their safe movement on the road. At Dow India, we are proud to be one of the leading companies for Responsible CareÂŽ standard in chemical industry and supporting initiatives such as Nicer GlobeÂŽ that aim to reform the transportation of chemicals in the country. Nicer Globe is an initiative on transportation safety under the Responsible CareÂŽ by Indian Chemical Council. This voluntary chemical community initiative is fostering collaboration on transport distribution safety, emergency response and transport security. It also routinely evaluates and improves transport safety capabilities while sharing the bestpractices in the industry.

How complex is the supply chain at Dow India and how do you manage the same? The complexity of the supply chain arises from the plethora of industry that we are catering to. As a global chemical conglomerate, we are servicing customers from industries as diverse as agriculture to infrastructure and pharmaceuticals to personal care. We supply packed and bulk chemicals to core manufacturers and OEMs in the country. Transportation of a mix of hazardous and non-hazardous. If we were to categorize complexity of this

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INTERVIEW supply of products. b. Ensure maximum visibility in the supply chain by creating real time tracking avenues. c. Impart skills training to drivers, who form the bottom the pyramid of the supply chain universe, to ply hazardous & non-hazardous material and regulate emergency response behavior. d. Create robust internal systems to get visibility on internal warehousing and inventory in real-time.

How is supply chain revolutionizing Dow India at each step of its growth?

industry, it would be under three broad pillars – Infrastructure, Compliance and Emergency Response. I. INFRASTRUCTURE a. Fragmented transport industry – The transport industry in India is largely unorganized as compared to the developed countries. The fragmentation often leads to a scarcity in the availability of skilled drivers that impacts the supply chain significantly. The high attrition rate of the drivers adds to the woe of having untrained workforce carrying the risk of transporting hazardous goods and therefore probable emergency response management. b. Under-utilized rail transport – The plying of hazardous and non-hazardous goods is majorly dependent on roadways with 60% of the total transportation taking place through this medium. Only 15–20% of the total logistics based transportation is carried out by rail. In a country, which has one of the most robust rail network, the emphasis on using it for commercial plying of chemicals is considerably low and under-utilized as there is no dedicated route or infrastructure support that makes plying chemicals via railways safe. II. COMPLIANCE a. Dow India is very stringent about the regulatory compliances that we adhere to ensure that all safety guidelines are met and business is

smooth. As per our global mandate, we are to follow either global or country standards, whichever is higher to maintain superlative product and service quality. b. The lack of definitive guidelines for logistics and warehousing in the chemical industry makes it difficult to maintain uniform standards across all our offerings. c. Additionally, finding a logistics service partner that has the capabilities to incorporate highquality standards is tough in the country that is still in its nascent stages of logistics improvement. III. DELAYED EMERGENCY RESPONSE a. Plying hazardous chemicals always carries a significant amount of risk, even after the implementation of the most stringent safety standards. It is not only transporting chemicals, but also the storage of these materials that adds to the risk. b. Since the industry is fragmented, the channels through which the safety guidelines can be communicated up to the last member of the value chain. With the limitation on the availability of knowledge, skills and capabilities, the probability of a delay in emergency response increases. A robust, seamless supply chain is very critical to the growth of chemical industry. To ensure that we convert these obstacles into growth boosters, we can – a. Understand customer behavior and demand patterns to manage timely

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India is one of the priority markets for the company globally. Supply chain has been an integral part of our business strategy in the country and we believe the business growth is directly proportional to the efficiency of supply chain. In any chemical industry, the key differentiators, traditionally, have been- product quality, service quality and delivery. While product quality is not unique to bulk chemicals, it is the service and delivery quality that act as gamechangers in the competitive market. Ensuring a smooth, timely delivery thus is critical. Improvement in supply chain is a two-pronged journey: Reducing the time to delivery; and Reducing the cost of delivery. Reduction in the cost and time of delivery has direct impact on the final product, making it extremely crucial for a pricesensitive market like ours. We are continuously in the process of ramping up our logistics infrastructure to take products seamlessly into the market, given the increase in the quantum of bulk movement. This includes chalking-out the supply chain models, enhancing warehouses capacities, terminals, storage-tanks and lining-up C&F agents, identifying hub locations for storage and supply of packed and bulk material. We also launched the S4TAR program, to improve performance of service providers such as warehouse operators, packed and bulk transporters and customs house agent and ensure alignment to Dow standards with respect to Safety, Pollution and environment.

How crucial is the role of supply chain in enhancing the

INTERVIEW For an industry that is innovating at an unimaginable pace, it is imperative that the laws and policies evolve along with to suit the market needs. Our first ask would be to have definitive set of regulations for logistics in the chemicals industry. The government and law makers should be taking cues from industry to understand what is of utmost importance to propel growth and channelize their efforts towards bringing about changes accordingly. performance of the industry? Nowadays, the scale of operations of chemical plants is becoming bigger. This means that globally the demand is met from fewer plants around the world. This has obviously, led to rapid increase in the amount of material flow worldwide and therefore, the volume of traffic as well. However, to ensure that the growth is sustainable, we need to concentrate on increasing the efficiency of the industry. The first step in this would be to reduce noise from the system. Reducing the vestigial elements from the value chain would lead to a significant reduction of costs. The reduced cost benefit can be transferred to the end consumer. Lean and smart organizations will become the foundation of a better performing industry, in my opinion.

How aligned are the practices globally vis-à-vis India? As a multinational company, with presence in over 160 countries of the world, there is a constant learning and sharing of best practices from various markets to translate value to our wide spectrum of customers. Some of the key initiatives in supply chain that we have implemented in India, taking a cue from our global counterparts are: A. S4TAR PROGRAM - THE S4TAR program is designed to encourage sustainability excellence in DCIPL’s supply chain partners. It provides a specific framework to recognize our partners who exhibit exceptional performance. Each year, through fair and transparent quarterly and yearly evaluations (which are based on pre-set measurements that are communicated to our partners), the

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S4TAR awards is presented to the Best Carrier, Best Warehouse, and Best Freight Forwarding Service. Doing this, we hope to achieve performance and sustainability excellence. B. DP2F PROGRAM – Recently implemented, the Demand Planning to Fulfilment Program utilizes real time tracking of inventory (internal and customers’) to ensure that there is no delay in the delivery of materials. Not only does the program give us a complete visibility of the customers’ inventory, it also uses data analytics to predict future demand. Our global vision is to offer an ‘Amazon – like experience ‘in terms of chemical logistics, where customers will be able to place orders, track and reorder only in a matter of few clicks. Our global initiatives, that we tailor to suit the needs of local market are our steps in the direction of fulfilling this vision.

How is technology playing an enabling role in enhancing supply chain efficiency at Dow India? I believe that technology forms the backbone of our overall industrial progress, that has fueled the growth of our industry inadvertently. Some of the technology innovations that are unique to Dow and are enhancing the way supply chain has traditionally been functioning are: a. Data analytics – We have invested in robust big data analytics to understand our customers better and cater to their demand ahead of time

b. DP2F Program – This gives us a real-time visibility into the inventory, thus enabling us in managing the supply efficiently c. Unified platform for merged entities – In an ecosystem where mergers & acquisitions are getting robust day by day, we are using it to our advantage by creating one single platform for all our entities to interact with their customers. They can now place orders, using one single interface, thus ensuring that the value imparted remains constant throughout the chain.

What’s your opinion on the current policy initiatives and what more do you expect from the government for the betterment of the industry? Some of the recently implemented initiatives like GST have created a level playing field in the industry. The most important change that this tax reform has brought in is the elimination of multiple players from the value chain – since not all of them are tax compliant. This adds to the value transferred to the end consumer. For an industry that is innovating at an unimaginable pace, it is imperative that the laws and policies evolve along with to suit the market needs. Our first ask would be to have definitive set of regulations for logistics in the chemicals industry. The government and law makers should be taking cues from industry to understand what is of utmost importance to propel growth and channelize their efforts towards bringing about changes accordingly. Alok Gautam is a Chemical Engineer from Manipal Institute of Technology with Post Graduation in Management from XLRI Jamshedpur. He has over 20 years of multifunctional experience in chemical and oil & gas industry. He is a transformational leader able to lead by influence, aligning people to reach their maximum potential.

LEADERSHIP

Driving Frugal Innovations In

TRUCKING

â&#x20AC;&#x153;Across organization, we have frugal mind-set and always believe in delivering more with less. We are extremely lean and probably we have the most compact trucking plant in the world, which can produce 80,000 trucks out of 75 acres of land. We offer relevant modernization to our customers in the best economic pricing,â&#x20AC;? shares RS Sachdeva, Chief Operating Officer, VE Commercial Vehicles Ltd (VECV), during an exclusive interview. VECV has become an iconic brand in bringing breakthrough technology in commercial vehicles. What are the latest innovations that the industry is witnessing? Fuel efficiency enhancement is number one area where every company is making rapid strides in commercial vehicle space. This is aimed at reducing the parasitic losses as well as enhancing engine efficiency. This is achieved through extensive electronic features

in vehicles because with the BS-IV emission norms implementation on the vehicles, all the engines need to have the Electronic Management System (EMS). Companies are deploying means to use engine management systems and ensure that engine auxiliary features work only when it is required. By doing so, you conserve engine power and improve fuel efficiency. Secondly, companies are working towards enhancing product reliability and improvising the cabin for drivers so

that they can ride for longer period of time without any discomfort. We believe ergonomics has a bigger role to play in improving the turn-around time for the vehicles.

How is the automotive commercial vehicle growth shaping up in the country? What are the challenges in its growth? If I look at the performance in last one year, the industry was hit by three major challenges. One was

LEADERSHIP Demonetization in November 2016, then came the product upgradation from BS-III to BS-IV. The Supreme Court suddenly gave a verdict that BS-III vehicles can’t be sold post April 2017, which had hurt initial sentiments of the organizations as we were not ready at that point in time and on top of that, we had BS-III inventory, which was not allowed to be sold post April 2017. And now that GST has been rolled out, it has also imposed some initial hiccups. These three disruptions slightly slowed the growth pendulum of the industry. After de-stocking in June, and then re-stocking post July 2017, the CV sales have picked up tremendously well. Although there were apprehensions of such a growth, however industry was able to achieve 35% growth in September’17. October also augured well for us. Looking at such a performance, we are now highly bullish about growth in the next 6 months because GST is getting stabilized. GDP growth is also growing as per estimates. There are newer policies which are on the anvil to be announced by the government, which would shape the things to come. For instance, Vehicle scrappage policy will also be a turnaround for us. This would essentially mean that vehicles older than 15 years would need to be scrapped. All in all, yes there are challenges, but with government’s continued thrust and industry’s foresightedness towards opting for new technologies and the ability to adapt quickly, things are moving in the right direction for the industry.

Sir, you have been a part of this organization since past 25 years. What has made you stick with the organization for so long and how has been the transformation in the industry over the years? It has been the empowerment and excitement in the role given to me and the ability to contribute towards organizational growth. These are the enablers, which have helped me to be a part of this organization for 25 years now. We have seen major transformation in this industry over this period. Power to weight ratio of the vehicle has improved tremendously. It has become much higher today. About a decade back, 25-ton vehicle was driven by only 120hp engine.

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UP, CLOSE & PERSONAL What’s your leadership style? I believe in team building, delegating task to them and ensuring that they execute to the best of their capabilities. Collaboration at execution is my key leadership mantra. What’s success, according to you? Success, to me, is being able to align and contribute towards the organizational success. What’s your favourite book? The recent book that I have read is ‘Paradigms: Business of Discovering the Future’. This explains as to how to spot future trends and shift in the way of doing things and how to be prepared to take advantage of them. It delves on three key concepts that are vital for an organization’s future. These are Excellence, Innovation and Anticipation. Excellence is the essential base ingredient for success. Innovation keeps a business alive, takes it into new directions and prevents it from becoming stagnant. Anticipation is the ability to spot potential changes and be prepared to take advantage of them. Your mentors Bill Gates & Steve Jobs are two great leaders that admire the most because they believed in thinking beyond and innovating continuously. When not working, how do you destress yourself? I love sports and music. So, I like playing Badminton in my free time.

LEADERSHIP

Today the same capacity vehicle is being run by 230hp engine. Secondly, the driver comfort has been improved tremendously. Earlier it was always doubtful that vehicles traveling from Delhi to Mumbai and back will return in 2 weeks or not, but these days, it’s the certainty that instead of monitoring vehicles for weeks, they monitor it in hours. That’s a huge change that is shaping the growth of CV industry in the country. The turn-around time has improved in addition to power to weight ratio and driver comfort. Emission level improvement is also one of the biggest differentiators these days and in parallel, fuel efficiency of vehicles has also enhanced dramatically. A decade back, 16-ton truck used to give an average fuel efficiency of 3kmpl and today it’s not less than 5kmpl even with the BS-IV emission norms. The reason for this transformation is because our fleet owners have become much more organized. They are more productivity focused and tolerance for poor durability and reliability has drastically reduced because their customers are also asking for stricter provisions to be followed.

The entire value chain has become much more visible now-a-days. We have become much more integrated than we were earlier as an entire ecosystem and that’s perhaps the biggest transformation we have seen.

After-sales service has a major role to play in your growth. Your insights on the same… It’s only customers’ satisfaction through aftermarket, which will be the differentiator in times to come. The industry in unison is working towards that. After-sales service has also seen a dramatic shift over the period. For instance, at VECV itself, there are now 280 touch points across the country where our vehicles can be serviced and repaired. Automation has entered in the aftermarket industry in a big way. Our dealers are also better equipped now. In future, you will find JD Power surveys also getting conducted in the CV space, thereby increasing competitiveness in the product quality. Lot of innovations are happening in the space and this is the best time to be in the commercial vehicle industry. With the invention of

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telematics, vehicle tracking has now become a reality and anyone can trace and track the vehicles. Volvo Trucks in India is the first truck manufacturer to introduce the European design, high performance trucks with the latest technologies. To provide the complete solution, Volvo Trucks in India pioneered the Driver Training concept in commercial vehicles segment. We also thrust a lot on the continual improvement of our dealers & drivers to drive efficiency. We have got ‘vehicle installation process (VIP)’, which intends to educate drivers and customers on the maintenance aspect, how to drive safely and in turn enhance fuel efficiency. Driving habits lead to better fuel efficiency. Periodically, we keep on sending them the mailers on the technological upgradations, any new dealer addition in our portfolio, and new schemes of warranty because this plays a very important role in commercial vehicle selection. Today, there is 5-year warranty on drivetrain & powertrains, which used to be just 1-year earlier. So, things are really shaping up well in the

LEADERSHIP Today we are on the threshold of conversion of our supply chain into a world-class supply chain. We are making sure that our suppliers are situated in the vicinity. Thankfully, we have been able to achieve our objective. Total 39 suppliers have set up their base in Pithampur, adjacent to our factory. Some of them are global players. With this, we have been able to create an unparalleled supply chain ecosystem, which is quite responsive and cost wise effective.

after-sales service space in the country.

Kindly elaborate on the frugal innovation initiatives by VECV. Across organization, we always believe in delivering more with less across the organizational initiatives. We are extremely lean and probably we are the smallest trucking plant in the world, which can produce 80,000 trucks out of 75 acres of land. We ensure that we offer relevant upgradation or enhancements to our customers in the best economic pricing. We have adapted Volvo Group technology for VECV products at the Indian cost after fully localizing technologies.

Kindly share with us the technology roadmap for commercial vehicle industry. Technology roadmap in this industry is quite centred on fuel efficiency enhancements. Enormous thrust has been placed on the fuel efficiency because in India fuel cost is about 45% of the total operating cost, whereas in Europe, it’s just 10%. From that perspective, the operators’ profitability lies in conserving fuel. Second, we are working on light-weighting of vehicles. For the same load vehicle, how much payload you can increase by reducing the curb weight of the vehicle. We are trying various new age materials such as composites and exploring the use of plastics, aluminium and other nonferrous materials, we ensure that the curb weight continues to be the lowest. Additionally, we are working extensively towards electro-mobility and connected vehicle technologies. We are trying ways as to how fast we can convert our buses & trucks in electric vehicles as there has been a government push to electrify the vehicle fleets over next couple of years. We have also prepared our roadmap for conversion from BS-IV to BS-VI, which

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is slated to happen from April 2020. Lot of investments have been planned towards that initiative. We have recently introduced AMT (Automated Manual Transmission) technology in the complete range of LMD and HD buses and Medium Duty haulage truck application in the first phase and the same will be extended to other applications later on. This technology has been adapted based on the OptiDrive technology designed and developed by Wabco. Innovative trucks and buses bring competitive advantage in India’s growing commercial vehicle market. VECV is deploying ‘Modular, Global and Secure’ industry solution experience for an integrated approach to product development that accommodates regional requirements. The deployment is part of the company’s ‘Integrated Data Management’ initiative, which aims to improve quality, streamline the product development process, and deliver business value across the organization by integrating the processes, data and systems of its engineering and manufacturing value chain. Adopting a product strategy to meet diverse regional demands and to localize the development of differentiating technologies is a key concern for many original equipment manufacturers. The 3DEXPERIENCE platform provides digital continuity to accelerate innovation, improve product quality and performance, and reduce engineering lead time and costs. More and more commercial vehicle manufacturers are recognizing the value that it can bring to their business.

How does the technology transfer take place from your JV company? Europeans are far ahead in bringing technology

and how are you adopting the same or indigenizing the same for the Indian companies? The Volvo Group has been in India for almost 20 years and has set up three production bases in the country to manufacture trucks, buses and construction equipment. With this JV, we have taken all the technology support from Volvo. We implement the relevant technology, which will be adopted by the Indian market. Owing to Volvo group technology prowess, we are also exporting our engines back to Europe. Technology transfer has been really smooth over the last 8-9 years and both the JV partners are happy with the progress made by the VECV.

How much is the export volume from India and how is India considered in your foreign counterparts’ overall strategic goals? India is already the exclusive manufacturing hub for the MD 5-8 litre, medium-duty Euro VI long blocks for automotive applications for Volvo's home base in Europe. Volvo Group plans to make India the main base for manufacturing engines for industrial applications. We also export around 8~9000 vehicles every year from the VECV plants. Going forward, we are looking at new markets also such as Middle East, Indonesia, South Africa, Europe, etc., over a period of time, we will introduce products in these markets as well.

How can supply chain be a crucial enabler in the holistic growth of the industry. How is VECV working on enhancing supply chain efficiency to gain competitive advantage? Supply chain is notably one of the very important elements. We have been able

LEADERSHIP GST has been one area, which initially was a hitch, but the longterm impact would be extremely favorable for our industry and we have already seen the results of the past two months, which also point towards good times ahead. We have passed on the cost reduction to our customers. Our trucks have become cheaper post GST. To top it all, the rollout of GST has resulted in 30% faster logistics. Additionally, we are also eagerly waiting for the scrappage policy. This policy can enhance the volume by 20%.

to manage our supply chain extremely well owing to extensive technology support and ensuring know-how to the distributors. Today we are on the threshold of conversion of our supply chain into a world-class supply chain. We are making sure that our suppliers are situated in the vicinity. Thankfully, we have been able to achieve our objective. Total 39 suppliers have set up their base in Pithampur, adjacent to our factory. Some of them are global players. With this, we have been able to create an unparalleled supply chain ecosystem, which is quite responsive and cost wise economical. Complete automation of the change management system along with the suppliers has also been attained. Additionally, we do innovative sourcing, which ensures that our cost structure remains one of the best in the industry. Our endeavor has always been to achieve innovative sourcing, which is most efficient. Secondly, with GST coming in, irrespective of the location of the suppliers, our cost remains the most competitive. With these parameters, we ensure quality, cost & delivery from our suppliers.

What are your views on the dynamics of surface transportation industry? How are the developmental activities shaping up in this arena? There are two-three levels of development in the surface transportation industry. After GST, we have seen that there has been migration from lower tonnage vehicle to higher tonnage vehicle. Multi-axle vehicles are becoming more popular. With e-commerce expansion, there has been a lot of focus on turnaround time. As mentioned earlier, people have

started monitoring time in hours than weeks. Today overall operating economy has been enhanced as fleet owners and drivers are educated. They are ready to adopt new technology so that they are in control of the vehicles and vehicles remains more on-the-road and less time is being spent at the dealers’ side or the service side. Everyone knows that the railway is still not able to harness its full potential and in lieu to that, the trucking industry would continue to thrive. The government’s much needed emphasis on industrial corridors would further set the growth agenda ahead. With these developments shaping up, multimodal transportation system would become a reality. This would provide seamless movement of trucks in the shortest possible time with improved road conditions. The government of late has been placing a lot of emphasis on multimodal system – from port to road and road to rail. If that happens, then efficiency and the cost structure can greatly be enhanced in the future. This situation will be win-win for all be it fleet owners, distributors or the OEMs.

What do you have to say about the government’s policy initiatives and how are they going to be an enabler for your business proposition? GST has been one area, which initially was a hitch, but the long-term impact would be extremely favorable for our industry and we have already seen the results of the past two months, which also point towards good times ahead. We have passed on the cost reduction to our customers. Our trucks have become cheaper post GST. To top it all, the rollout of GST has resulted in 30% faster logistics. Secondly, we are also eagerly waiting for the scrappage policy.

22 CELERITY November-December 2017

This policy can enhance the volume by 20%. Going ahead, electromobility will be the gamechanger. This initiative can take the industry to ensure zero emission levels. Having said that, the government should give sufficient time to ensure conversion. Government is also talking about some alternative fuel systems. We are exploring these newer avenues to get ready for the future. All in all, things are moving in the right direction. The government is doing its best to facilitate growth. Road infrastructure is becoming better. In short, there’s no stopping the commercial vehicle industry in the country from hereon.

What are your future plans in place? The country is moving towards building smarter cities with smarter transportation systems. Efficient and smarter commercial vehicles will be the backbone of such an economy. We are fully equipped to take on the demand from the technology side & product side, etc. Last year, we sold 58,000 trucks. This year, we are planning to sell 65,000 trucks. We are geared up to sell 1,00,000 trucks already over the next 2~3 years. Our market share is improving in all segments and we are all set to take advantage of the burgeoning growth waiting to be tapped.

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FOCUS

A Latent

OPPORTUNITY Within the fast-paced development chaos, we have almost forgotten the critical role played by employees in attaining desired goals. Without talented & skilled people, no company can achieve success. It’s the people power because of which no goal is bigger and things can be attained in harmony. Yet, continuously honing their skillsets is what we are still lacking. Like every other sector, technology can play a key role in bridging the talent gap and open up immense possibilities to drive their skills to the best of companies’ leading to performance, writes Sanjay Tiwari, CEO, 21CC Education.

hen India celebrated its 70th year of independence in August, there wasn’t just a reflection on the past seventy years, but also a look ahead at what the next thirty years would bring. The consensus of economists was that India would grow to become an $18 trillion economy by the time that it celebrates its 100th year of independence and would by then be the second or third largest economy in the world. What that means in terms of our domain, that of supply chains, is incredible. Here’s a stab at what I think the future holds. On the export front, large Indian corporates such as the Tata, Reliance, Mahindra, Birla and Jindal are each

already serving up to sixty countries across the globe with their products, from the Far East to Africa and Latin America, and of course the OECD countries. That activity is only going to increase with many more Indian companies joining the fray and making inroads in global markets. That large global footprint is going to call for specialized staff capable of planning and managing these exports and everything that it entails in terms of vendor relationships or the optimization of inventories at customer locations. The novelty factor of Indian exports will rapidly wear off and customers in Chile or Spain or Algeria will demand the same level of service from an

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Indian vendor that they do today from a Japanese or Korean company. They will expect instruction manuals and local service centres addressing their concerns in Spanish or French or Arabic. The parent companies too will grow increasingly dependent on exports and will want to monitor the revenue from each market and will want to offset that against the cost of servicing a particular market. That will require detailed knowledge of the cost of each component in the supply chain, something often missing today. On the import front, the trends that we’re just beginning to see are going to explode. The e-commerce giants such as Amazon, Alibaba and

FOCUS Flipkart (here’s hoping they or another Indian e-commerce platform are still around thirty years from now) will have their own end to end supply chains, stringing together air and ocean carriers, warehouses and trucking companies to source goods from global origins and deliver them to an Indian consumer or business entity. Indian tastes and consumption will grow more refined, in terms of clothing, food and electronics. An $18 trillion economy will be a magnet for producers from around the world, seeking to deliver their ice creams and chocolates, handbags and driverless cars to consumers in India’s hinterland. Some of us will continue our trend of becoming unhealthier and so the need to deliver insulin and other disease management medication into many corners of the country will only increase.

Merging boundaries Domestic trade will form a big part of the $18 trillion economy. The painful introduction of GST will be a distant memory and goods will move freely from the North East to the South West on eight lane highways or inland waterways or air bridges. Cold storage facilities will finally make it easy to consume apples from Kashmir or Himachal Pradesh in the quality in which they were intended to be consumed. Regional trade will take off. North and West India will become a distribution center for Central Asia, servicing countries from Afghanistan onwards to the West. The NorthEastern states will house DCs for servicing countries such as Bangladesh, Myanmar and the north of Thailand. So why this preamble about the future of Indian supply chains in an article about skilling? Well, you know what they say about a chain right, that it’s only as strong as its weakest link? As it happens that’s true about supply chains as well.

Skill development – a great asset All this international expansion, this domestic consumption and domestic trade isn’t going to be possible, or is going to be very painful, without the right men and women running the show. Industry estimates that 10 – 15 million people will need to be trained for the transportation, logistics and supply chain industry. Customers will

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Domestic trade will form a big part of the $18 trillion economy. The painful introduction of GST will be a distant memory and goods will move freely from the North East to the South West on eight lane highways or inland waterways or air bridges. Cold storage facilities will finally make it easy to consume apples from Kashmir or Himachal Pradesh in the quality in which they were intended to be consumed. Regional trade will take off.

be more demanding, less forgiving and more price conscious. That means getting it right the first time. For certain tasks, automation is already making rapid inroads and that will only continue, especially in picker packer type jobs, but there’s quite a bit of ground to cover between the India of now, 2017, and the India of 2047. Today, and for the next several years, those people are still needed. Managing automation is going to require skilled people in their own right. Will we have our groceries delivered by driverless bots ten years from now? If so then someone will be planning the loading of those bots before they set off into the housing estates where we will live.

Skilling requirements The skilling requirements of entry-level workers are different from those of lower level white collar workers. There are differences in terms of the topics

to cover, languages of instruction and medium of instruction.

Topics Fixing or strengthening the weakest links of our interlinked supply chains calls for covering topics as diverse as: warehouse picking, packing and labeling; express package pickup and delivery; operation of cold storage facilities; truck driving; knowledge of the handling properties of various types of cargo; (air) cargo loading and unloading; container stuffing and un-stuffing; managing of container yards; handling and administration of dangerous goods; forklift driving; and inventory management (systems). In addition to ensuring knowledge of these very elementary but crucial skills for a resilient supply chain, the audience that is being trained for these tasks is often semi-literate which means that there is a huge need for bridging skills.

FOCUS We have a simple formula at 21CC Education that we believe in: RETENTION (r) = FREQUENCY(f) of REPETITION X TIME (t) With training, we’re trying to change the behavior of employees such that behaviour changes for the better, and permanently, that mistakes are (almost) never made. The deployment of compelling training content via personal devices such as smartphones and tablets means that we now have the capability to drive that behavioural change and to successfully bring very large numbers of people into the exciting world of transportation, logistics and supply chain management. People end up having to be trained in topics such as: hundred basic words in English that are critical to their job; soft skills such as meeting and greeting customers in person or on the phone; punctuality; personal hygiene; Indian and world geography; and maintaining records on an electronic device.

The Place and method of instruction One of the biggest reasons why companies don’t actually spend more time and resources on training of their staff is that the logistics of training itself is a huge hurdle. How on earth do you get 5,000 employees spread across your network into classrooms and trained for two or three days at a time? Which operation can afford that kind of disruption? Faced with this alternative, many companies, except for the most process-centric and quality conscious ones, opt for the ‘we’ll deal with it when we get there’ option, an attitude that leads to overturned petrochemical tankers, cold storage facilities switched off in the middle of a hot summer’s night, toppled stacks of containers and mislabeled and thus misrouted shipments. If you do manage to get the teams into a classroom then the training delivery is at the mercy of the individual trainer. With luck, he or she is an enlightened soul who makes the session as interactive as possible, but more often than not the trainer broadcasts, working her way through a fixed program, and ending with a ‘Any questions?’ at the end of eight hours. Thankfully there is a convergence of trends that is bringing a huge change to the world of learning, and thus of skilling.

» Driven by the hugely disruptive introduction of Reliance Jio, the price of 4G data consumption in India is crashing, making 3G and Edge even cheaper. This means very simply that all but the poorest of our fellow citizens can afford and are thus consuming huge amounts of data via their mobile phones. » E-learning modules, traditionally disseminated via laptops and PCs in classrooms, are being designed specifically for the small screen format. That means shorter modules, less on-screen text, more images, simpler Q&A with the trainee. » There is a move towards gamification of learning content, converting e-learning modules into compelling stories whose outcome is dictated by the trainee herself. The implications of these three trends are huge. Think about it: » We can now reach trainees and employees while they are yet to join the company or while they are out on the job, or on a break. » We can reach them with shorter content that each time is built around a specific topic. Instead of teaching them everything about cold storage in one go we can cover modules on Individual commodities (potatoes, onions, apples, carrots, etc.), switching the equipment on and off, maintaining temperature, servicing the unit, calling for assistance, etc. » We can test their retention of knowledge at a specific moment in time, but also over time, which tells the manager how the knowledge level of his teams is developing, real time.

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» The gamification of content if done well leads to compelling content, greater adoption and releases data on what people didn’t get right, which is almost more valuable than knowing what they did get right.

Recipe to success We have a simple formula at 21CC Education that we believe in: RETENTION (r) = FREQUENCY(f) of REPETITION X TIME (t) With training, we’re trying to change the behavior of employees such that behaviour changes for the better, and permanently, that mistakes are (almost) never made. The deployment of compelling training content via personal devices such as smartphones and tablets means that we now have the capability to drive that behavioural change and to successfully bring very large numbers of people into the exciting world of transportation, logistics and supply chain management. With India’s role in global supply chains only set to increase, the skilling and development of our workforce is at a critical juncture. The future is here. Sanjay Tiwari is the CEO of 21CC Education, a training content development company for the transportation and logistics industry. He is also the Head of Sales for Maersk Trade Finance, a financial startup within the 111 - year old shipping company. He began his career as a steel trader with Van Leeuwen Pipe and Tube in The Netherlands and South-East Asia.

GAMECHANGER

In the Business of

HELPING BUSINESSES

The onset of GST, the government’s continued thrust on infrastructure development and the companies’ renewed confidence on streamlining supply chain bottlenecks are all giving rise to B2B marketplace in the country. Yes, the initial glitches remain, but the new age entrepreneurs’ risk-taking appetite and logistics companies rejig towards more organized operations would greatly aid in the success of B2B marketplaces in Indian supply chain domain.

ndia’s B2B e-commerce market potential was valued at $300 billion in 2014, and is expected to reach $700 billion by 2020, according to a joint report by the Confederation of Indian Industry and Deloitte. B2B e-commerce is also lucrative, partly because marketplaces do not necessarily have to give heavy discounts to increase

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transactions. About 259 start-ups have been founded in this sector since 2015, according to data from Tracxn, a startup tracker. These firms have raised $103 million in funding so far. Recognizing the large potential, a number of global e-commerce firms which sell to consumers have stepped up their focus on the B2B commerce space in India.

The government has allowed 100% FDI in B2B e-commerce, which has also helped these firms enter India. Currently, the market for logistics is exploding. The more the world of e-commerce grows, the more logistics companies find growth. According to Logistics Market in India 2015-2020, a study conducted by market researcher

GAMECHANGER Novonous, the country’s logistics industry is worth $300 billion and expected to grow at a CAGR of 12.17 percent by 2020. Comparing yesteryear activities to today’s tech-enabled horizons, Srishti Lakhotia, Co-founder, Logistics Junction, quips that with technology at its heart, e-commerce has seen nerve-breaking growth in this age, no one could have ever imagined to get grocery delivered at the click of a button. “I have experienced how the logistics industry is one of the most unorganized sectors in today’s modern times. India as a nation is revolutionizing, so logistics being the heart of all industries is bound to join the race in digitalization.” Logistics companies in India are moving from traditional setups towards integration of IT and technology and this is expected to reduce the costs incurred and meet service demands.

Gaining momentum B2B e-commerce has been gaining steam on the back of the success of B2C marketplaces such as Amazon & Flipkart. Sachin Agrawal, COO & Cofounder, Bizongo, informs that B2B e-commerce segment has helped a lot of businessmen to operate with big and organized players which was not really possible otherwise. Initially, these businesses were operational in their territories and unable to tap the larger Indian market due to lack of technology. But since e-commerce players have entered the B2B segment, there is a lot of scope for learning on how to use the right technology and tap potential markets anywhere in the country. But, yes, a huge credit goes to players like Amazon & Flipkart who broke the much needed, proverbial ‘ice’ when it came to online purchasing. Anand Agarwal, CEO & Founder, EZMove also states that B2B

Chitransh Sahai, Director for Corporate Relations, GoComet GoComet is a marketplace for connecting freight service providers with the exporters or importers. By building this, we increase information symmetry in the entire supply chain across a fragmented set of Vendors. The opportunities that can be captured are around aggregating these vendors, building transparency in information, ensuring service quality.

e-commerce has grown exponentially. However, India’s rising consumer demand – both online and offline can only succeed with logistics infrastructure support in terms of rails, roads, airports, ports and warehouses. Despite all these shortcomings, companies like Amazon and Flipkart are helping to change the logistics landscape. More focus has to be given on building road networks, integrated rail corridors and creation of logistics parks much like Special Economic Zones or SEZs, to ensure continued growth. Talking about the growing B2B marketplace landscape, Chitransh Sahai, Director for Corporate Relations, GoComet, remarks that this is certainly great for the logistics sector, since we would perhaps need some more vertically distinct logistics solutions for rising e commerce. Giving a perspective into the changing market dynamics, Anjani Mandal, CEO & Co-founder, Fortigo Network, said that rapid changes in the environment necessitate the need for every successful and forward-looking organization to have an integrated demand and supply chain that is characterized, on one side, by seamless flow of information from the customer

through the sales and distribution channel to the supply chain and, on the other, a responsive supply chain that provides complete supply chain visibility and minimized cycle of response to changing demand in order to maximize organization cash flow and profitability. Deployment of technology facilitates: (a) rapid and near instantaneous flow of information on demand quantum and customer feedback through the demand and supply chains; (b) Assessment of changes in trends of demand – in terms of quantity and characteristics; and (c) Supply chain visibility to assess potential risks to servicing customer orders and requirement and undertake pro-active actions.

Surmounting challenges Realizing the full benefits of today’s global B2B marketplace demands flexibility, responsiveness, and innovation. Yet most organizations struggle to achieve the core technical infrastructure, operational expertise, and foresight necessary to truly maximize their B2B e-commerce potential. B2B practices in India are supremely traditional unfortunately, and a transition towards digital age

Srishti Lakhotia, Co-founder, Logistics Junction My strategy goes in hand with the KISS policy - ‘Keep it stupid simple’. Once you understand your consumers, you can revolutionize a market and create need for a product that even the consumers sometimes might not be aware if they need it or not. In case of SCM, the consumers are welcoming technology with open hands. I believe with change in time, you should also welcome upgradation; we are too upgrading a far more superior & user-friendly e-portal in 2 months time from now, which will revolutionize the logistics industry.

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GAMECHANGER Anjani Mandal, CEO and Co-Founder, Fortigo Network An integrated demand and supply chain is ideal for responding to the rapid changes in supply and demand on account of the changes in the economy and regulatory environment as well as the rapidly evolving customer preferences. This is now possible with the availability of (a) low-cost nation-wide Mobile Computing technology combined with (b) an integrated technology platform that spans across the complete demand chain from customer touch-points thru’ retailers, distributors, C&F agents, warehouse, manufacturing facility to the corporate office as well as across the supply chain from manufacturing, warehouses, suppliers. The elimination of inefficiencies and the value-add of seamless flow of information in both directions across the various legal entities across the demand and supply chain makes the deployment of these platforms help organizations increase revenue as well as save on costs, thereby boosting profitability in a substantial fashion.

Realizing the full benefits of today’s global B2B marketplace demands flexibility, responsiveness, and innovation. Yet most organizations struggle to achieve the core technical infrastructure, operational expertise, and foresight necessary to truly maximize their B2B e-commerce potential. is a slow process. B2B marketplace is all about adaptability. The concept of one product fits all will definitely result in failure in this segment, warns Sachin Agarwal. Every business has a different style, aspiration and requirements, the fulfillment of which cannot be compromised on. For any B2B marketplace, this is expected to be focus. Stepping into the B2B marketplace, one has to be readily accept the challenge of solving industry’s or customer’s problem, one after another, day after day. Lot of B2B players who stop thinking this way, are eventually left with limited business. Sahai also feels that marketplaces are in general extremely difficult to create initially since there is a network effect on both supply and demand ends, and it is further difficult to marry them both. Now, with B2B the business development, servicing and discovery become further complicated due to the presence of a corporate, which has a complicated organizational structure. Supply chain is increasingly getting digitalised, which is driving the foray of many innovative companies into the market. Sahai avers, “Digitization initiatives are focussing on Information Symmetry across the entire supply

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chain. Using ERPs and other tech tools, people are able to build these symmetries at the Enterprise Level. However, there is a very large portion of stakeholders in a supply chain, which are fragmented and not owned directly by the enterprise (for eg 3PL players) and as a result non-digitised. So, the aggregation and empowerment of these players still remains a weak link yet to be solved.” Talking about the weak links in supply chain, Lakhotia, highlights that the weak links are lack of a global network; especially in on-road logistics, there is no organized medium to help connect companies with a trucker to provide a vehicle & additionally no source to track the whereabouts of their material. The second one is route optimization, there is no better tool then technology to create a planned movement of these trucks and ensure that the clients load is loaded & executed timely. The third major issue is driver management. “We have created a database for the same and are launching an app soon to help drivers map their location easily. Also, we provide pit stops in remote areas to ensure the drivers can experience a safe & comfortable resting place.”

According to Anand Agarwal, ERP and SCM have been contributing to make the logistics sector somewhat manageable. However, the transportation industry is India is highly fragmented and unorganized with huge number of players operating independently with regional or national permits. They carry freight with small fleet sizes of one or two trucks. Poor infrastructure, archaic trade regulations, poor warehousing and lack of R&D in this industry are preventing the logistics sector from growing exponentially. Moreover, entry barriers in B2B are also high. Firms need to integrate technology, put in place complex logistics fulfilment processes and, most importantly, convince businesses to go online. Lakhotia believes that in this day and age of technology, the logistics industry in India needs to undergo fundamental changes in order to be more efficient and more advanced in every context. But merely addressing the operational and structural flaws will be of little avail until and unless we also improve the mindset towards drivers and service providers. Besides a latent lack of respect towards them, the community also suffers from challenges like delayed payments and difficult working conditions.

Marrying technology with supply chain Traditionally erratic power outages and use of cheap and untrained labor has resulted in low dependence on technology and more manual outlook to operation. Use of increased IT, at lower or well as at higher strategic levels will

GAMECHANGER Sachin Agrawal, COO & Co-founder, Bizongo It is very important to understand the entire supply chain from the customer and process point of view and not what is convenient for your own business. The processes adopted by us are very simple but robust. The ultimate aim is to integrate every step of our supply chain with customer ERP, thus bringing complete transparency and ease for inventory management. The integration resolves distribution issues like tracking of the truck, time of truck and more. Similarly, during vendor selection, we give more advantage to their problem-solving capabilities than brand name. We may choose a smaller player who can offer customized services that are well suited to the client’s needs. Finding these untapped potentials, makes it easier for us to attain lower delivery schedule breach percentages. Our ultimate aim is to build a B2B ecosystem, starting with packaging. From technology to customization and supply chain ownership, there are a lot of factors that enable the entire value chain.

Logistics market in India is sized at US$300 to US$320 billion and is developing at a very rapid rate to the tune of 10 to 12%. However, logistics costs including inventory holding, transportation, warehousing, packaging and such administration costs have been estimated at 13-14% of Indian GDP, which is higher than the 8% of USA’s – almost double. IT ventures like Ezmove are aiming to reduce the logistics costs in India, while at the same time trying to capture a slice of this very lucrative market. go a long way to changing the logistics dynamics in India, according to Anand Agarwal. The growth of logistics as a sector is deeply intertwined with the use of technology. “Technology in logistics is slowly, but surely being upgraded and that is where we come in – bringing better visibility on customer off-takes. The introduction of more efficient transport technology and mobile communication has the potential of changing the logistics practices in the industry,” quips Anand Agarwal. Logistics Junction envisions the entire on road truck transportation to be organized through technology and bring more efficiency & respect to the industry. For GoComet, international trade is one of the major drivers of GDP for a country. “We are focussing on international logistics, which still remains largely opaque and in efficient, and is a major challenge in making international trade simpler,” informs Sahai. While Mandal feels that the deployment of technology in India across a supply chain that is dominated by a fragmented road transport industry is minimal. However, the rapid proliferation of low-cost mobile computing now presents us the

opportunity to create an integrated supply chain that provides complete transparency and visibility and moves information across the layers and links of the chain of retail, distributor, C&F agent, warehouses and factories seamlessly and in both direction. Going ahead, IoT and Big Data will herald in a new supply chain management innovation system much like a SCM 2.0. IoT will bring greater visibility into customer plans, accurate forecasting, shortened order-to-delivery cycle times. Together improved cost to serve are some ways that technological solutions are going to boost logistics as a sector.

Land of promising possibilities Logistics market in India is sized at US$300 to US$320 billion and is developing at a very rapid rate to the tune of 10 to 12%. However, logistics costs including inventory holding, transportation, warehousing, packaging and such administration costs have been estimated at 13-14% of Indian GDP, which is higher than the 8% of USA’s – almost double. IT ventures like Ezmove are aiming to reduce the logistics costs

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in India, while at the same time trying to capture a slice of this very lucrative market. According to Fortigo, the combination of (a) size – rapidly heading to $300 Bill; (b) growth rate – at an average of 12-15% annually; (c) the rapidly changing demand that necessitates market responsiveness and hence a supply chain that provides complete visibility and a platform for responsiveness; and (d) the availability of low-cost mobile computing technology across the country present a uniquely promising opportunity to facilitate change in the Indian supply chain. This would create substantial value for the customers as well as those serving the cause of facilitating such a transformation. Digitalization will allow seamless logistics by connecting people, processes, data, and things via devices and sensors much more intelligently. It will enhance in-transit visibility, which is currently missing. The logistics ecosystem has many players, and thus, many parts which can be brought together well to prevent leakages and reduce costs with deployment of technology.

PERSPECTIVE

E-PROCURING SUCCESS From big data and advanced analytics to robotic process automation and artificial intelligence – there’s a lot of buzz around them. But are they worth the hype? What real benefits can they provide for your procurement team? All these and more profound thoughts were a part of the recently held two-day CPO Forum in Mumbai on September 14-15, 2017 organized by Conference Asia. With Procurement 4.0 as the theme, the summit offered various paradigms of procurement in the digital age and how can companies align their operations with changing times…

any CPOs who have already applied more well-established commercial and demand levers are convinced that big data and advanced analytics hold the key for future improvements in procurement performance. The conference further

testified these very sentiments and dived deeper into the finer nuances of digital procurement. Here’s what our key speakers at the conference delved into and provided a way ahead for the procurement officers to prepare for the tech ride…

KRISHAN K BATRA, President & CEO, Institute for Supply Management India (ISM) By 2022, most of procurement & supply chain execution systems expenditure in large companies will be for cloud-based applications, while supply chain planning applications will remain on-premise, according to Gartner. Additionally, new technologies will appear such as Blockchain for Gross Weight Verification, the IoT and advanced (predictive) analytics for condition analysis and prediction. Digital Transformation

will become a key focus to capitalize on the available value of these technologies in the supply chain. In essence, digital technologies will help procurement increase collaboration, analytics, and engagement using a spectrum of tools along the entire procurement value chain, from planning and sourcing to contract negotiations, order delivery, payment, and supplier management.

CDR BRAHM SWAROOP (IN VETERAN), Senior GM, Head – Purchase, TCS Large number of manual processes were taking up the minds and attention of the leadership in the procurement industry. Procurement team is responsible for sourcing from subvendors, vendors and procuring assembly for delivery to customers. Since past one decade wherein gradually manual processes were getting automated but automation was not reaching the customers’ premises. It was just an internal function of an organization. It was then perceived by the management stalwarts and the IT industry that why can’t we cross these traditional organizational boundaries, merge them and go beyond. That’s how the digital revolution started happening. Today we have come a long way in the sense that the leadership and the top management of organizations have got end-to-end visibility of processes on all the inputs that are coming to the organization whether material and power,

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efforts at what cost, quantity and time, how are they being processed, who are the process managers, at what levels of processing are these subject to and what will be the delivery, when will it get into an output stage and reach the customers’ premise. So, this entire IoT model is nothing but procurement which is transitioning into a digital space. The digital procurement is the efficient way of streamlining the entire supply chain and enhance visibility & transparency.

PERSPECTIVE MC KUMARALINGAM, Director – Global Procurement Centers, IBM India Pvt Ltd Procurement is rapidly evolving worldwide. In the past, procurement was viewed as back office function which over time transformed into a service provider. In future, procurement will be viewed as value creators which is a significant shift for the procurement fraternity. As we head into the digital era, procurement is very well positioned as we have access to wealth of data – historic purchase orders, invoices, supplier details, market intelligence, etc.,

analyzing this data, making meaningful insights from the trends will clearly differentiate procurement. The digital tools will not only aid procurement professionals to take informed fact based decisions but is also expected to take procurement outcomes to new level of excellence.

PROCUREMENT 4.0 FRAMEWORK Trends / drivers Technology Competition Suppliers

Changing Competitive landscape Globalization

Shareholder expectations Other functions Megatrends

1. New procurement value proposition Procurement as service provider to key suppliers and customers Monetization of filed application data with suppliers 2. Digital category and service procurement

3. Digital supply chain and supplier management

4. Innovative procurement data utilization

New categories

Supplier risk management and key performence indicators

Big data analytics

(e.g., software, hardware, new services) Innovative contracting of services Technologies, markets, suppliers

Integrated supply chain Supplier co-creation Differentiated supply chains

Prodictive market and supplier analysis

Digital procurement revolution

Digital procurement evolution

Field application data analysis to improve design and performance

5. Digital processes and tools Digitization of purchase-to-pay process

Business process outsourcing and shared-services center

Digital tools and interfaces Procurement IT architecture

Base for successful digital procurement

6. Organization and capabilities Digital skills and talents Experts for new categories

Digital culture and transparency

New media partners in hiring Source: Strategy & analysis @PwC.

Companies should start building the required talent and exploring the promises of digital procurement solutions today. Many tools are still in their infancy. Ultimately, only by experimenting and building on their initial successes can CPOs determine which digital procurement solutions will help them create the next level of value for the company. A great example of this was shared by a globally leading retail company during the conference. It highlighted that with the fashion trends changing extremely quickly, by automating procurement systems, it becomes easier to replenish the store.

There is a lot of focus specifically in the retail industry on chatbots, artificial intelligence to get the consumer trends about their likes and dislikes. This is how retailers can replenish the products quickly at their stores and enhance sales. There is a lot of innovation happening in technology space which is very new for sourcing because this segment always used to be peopledependent. Today it’s more about intelligence and analytics to gauge and understand the changing demand trends and how to deliver those demands in the smartest way and the shortest timeframe.

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As the recent research by PwC remarks aptly that the introduction of Procurement 4.0 will mean developing new value propositions, meeting new business needs, and integrating data across functions and value chains. It will call for using this data proactively and intelligently, while introducing digital processes and tools. Perhaps most important, it will require fundamentally reshaping the procurement organization and its capabilities to take on the challenges and opportunities of the expanding global digital revolution.

RECAP

ELSC: SUPPLY CHAIN

Future & Fortunes Decoded

With Supply Chain 4.0 as the key theme, the 11th edition of Express Logistics & Supply Chain Conclave (ELSC) organized by Kamikaze Media, has once again brought together great minds in supply chain and logistics to deliberate upon the promising opportunities waiting to be tapped for the industry at large and how is it going to be a true enabler in times to come…

ttendees in unison were loud & clear about the positive outcome that the ELSC event brought forth during the two-day power-packed conference held in Mumbai on October 4 & 5, 2017. From the start to finish, the event was successful in harping on exceptionally well thought and

Matthew Quinn, Country General Manager, CHEP India To address the growing complexities of the supply chain industry, companies today have to work towards Standardization, Mechanization, Automation and Innovation.

Ravindra Lalas, Head - Marketing, TAP™ - Procure to Pay, TCS Platform Solutions Indirect procurement has witnessed dramatic changes in the past few years. From the technology standpoint, organizations world over are moving on to the cloud very fast. More and more companies are opting for ‘Cloud First’ strategy. Customers these days want to work with “unified procure to pay solutions” for a single window experience, eliminating the need to work across multiple disjoint systems. They are looking for highly user-friendly solutions, for easy buying experience. I personally feel that in the next 3-4 years, indirect procurement would go through a phenomenal transformation. TCS, at a larger level has been investing in digital products and platforms, like TAP™, for sometime now, to help global organizations stay ahead in their digital transformation journey. We were looking for a right forum for TAP™, TCS’ proprietary cloud solution for procure to pay functions, and a dedicated track for procurement makes the ELSC Conclave a relevant event for us. We are geared up to serve our customers in the best possible way and the response has been heartening. We look forward to engaging actively with procurement leaders in order to assist them with their transformation goals.

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attention-grabbing topics encompassing industry verticals such as pharma, retail, FMCG, procurement, automotive, etc. The key note address was delivered by Crispin Mair, Director & Co-founder, Crimson & Co. During his speech, he delved as to how technology is going to be the real gamechanger in near future. He also enlisted on the various aspects that companies need to take to shape the future course of supply chain in organizations. Various parallel tracks vis-àvis automotive, procurement, retail, FMCG, food & pharma, kept their focus intact on the industry specific supply chain trends. These panel discussions deliberated upon the strategies that need to be adopted in order to drive collective growth in each sector and iron out supply chain inefficiencies.

RECAP

Vishal Dhawan, Vice President - ASEAN & India, JDA Software Digitization is becoming a competitive edge and a front running discussing topic in the boardrooms. Companies who are leveraging this smartly are going to see the results taking shape for them. Inertia basically is a choice for disaster, so, doing something in supply chain from a technology standpoint, ensuring that there is a seamless connective, agile flexible supply chain is table stakes. ELSC I think is the best supply chain event. It draws the right audience at the right levels across multiple sectors of the industry. They are going strong and wishing them the very best in the future editions to come.

Pearls of wisdom During these two days, various pathbreaking initiatives taken by the companies were discussed and offered a learning or two for attendees. Some of the most interesting topics during these two days was ‘Thinking about the future: What will happen in 2020 in the Logistics & Supply Chain Industry?’ and ‘The New Generation Customer Centric Supply Chain’. Some of the clear messages that came to the fore were: Technology has opened up a world of omni-channel opportunities. Supply chain is all about enabling business with the help of automation. Companies need to work on data and integrate it into demand planning to augment holistic growth. For companies to sustain lead, they need to bring customers at the centre and analyze their demands to bring out the best products with the best in class supply chain services. While during one of the panel discussions, Alok Gautam, Country Logistics Leader, Dow Chemical International, shared a very interesting anecdote and said, “We want to give Amazon like experience to our customers by offering end-to-end visibility of processes”. Additionally, smart inventory prediction also grabbed people’s attention to bring dynamism in supply chain. Offering a third-party logistics fraternity perspective, Sarini Sachdeva, CEO, Ardour Worldwide Logistics, informed that infrastructure, technology, taxation, uberization (sharing facilities) and education are some of the key aspects that will shape up future of things to come. Brijesh Jadia, Head – Supply Chain & Commercial, Zee Learn, aptly remarked, “Companies need to think of long-term prospects and not short-term to gain growth.” Additionally, with changing times, supply chain

experts highlighted that unlike previous years, the focus is no more on mass customization. People these days are moving towards personalization and that’s where companies can derive their competitive edge. Kapil Maini highlighted that yes challenges are huge in front of us. “It we don’t ensure timely delivery, then we will need to face lost sales situation. And for a mobile company like ours, one can imagine the peak cycle is always 3-4 months post launch of a smartphone. In such trying times, if your supply chain is agile & responsive, we can definitely win over customers’ on-time demand and convert them into our loyalists. This is where supply chain can be a real enabler.” Ankit Gupta, Senior Director – SCM, Adidas India Marketing, averred, “Going forward, speed & visibility will drive growth”. Sebin Thomas, Head – Supply Chain Management, Hypercity Retail (India), said, “Earlier experience didn’t matter. With evolving customers, a sense of urgency is becoming critical. Lead times are becoming shorter. Information visibility at every part of the chain will see us through in such times.” Devendra Jain, Head – Supply Chain & Procurement, Bajaj Corp, while delving on how can companies service customer demands, said, “In order to be ready, we need to enhance

end-to-end supply chain.” For Vineet Jain, cost, convenience & time are the three critical parameters to enhance customer centricity. Describing key levers of supply chain, Mohit Raman Bhargava, Associate Director – Strategy & Deployment, J&J Consumer India, elaborated, “The key driving aspects of supply chain excellence include one’s intent to listen to customers, then decoding customers’ requirements, and lastly but most important, responding to those requirements to ensure our path to victory.” Rajeev Ranjan, VP – Business Transformation, Hindustan Coca Cola Beverages, remarked that cost vs contribution trade-off should be taken into consideration else agility will suffer. Supply chain shouldn’t be seen as a cost centre rather it should be a profit centre. These were just some of the guiding lights shared during the forum.

Looking forward to techenabled growth The last leg of the event saw a whitepaper launch by LogiNext on ‘Disrupting distribution with technology backed analytics, planning & execution’. This decodes the scope & expanse of technology in supply chain. The key learning is summarized as, disruptive applications of technology hold the key to turnaround the entire distribution structure of companies to create a world where implementing consumer feedback within the product and putting this updated product back on the shelfs, all within a fortnight, is a reality.

The Awards Night Day one of the conference was followed by an awards ceremony. 80 companies walked away with honours across 65 categories. The high-octane night ended with cocktails and dinner.

Thanutcha Akkarawongwarit, Director, Winner Technoplast Pvt Ltd We look at India as a strategic market for our product offerings. Participating at ELSC has offered us a much-needed platform to gain access to our prospective customers as well as showcase our products to the industry. We have tied up with Winner Technoplast Pvt. Ltd. (WTPL) in India. Our products are sold under the brand ‘Dino pallets’. Dino pallets are manufactured using injection molding process that allows maximum pallet structural design, which makes Dino Pallets strong and durable. They are perfectly recyclable and can be manufactured from 100% recycled material.

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