CELERITY SUPPLY CHAIN TRIBE APRIL '23

INSIDE

Special Report

Tracking India’s stance on bringing the transforming dynamics in Drug Distribution

Interview

Yogesh Sarin, Director – Supply Chain, South Asia Operations, Dell Technologies

INTELLIGENT SUPPLY CHAINS POWERED BY NEW AGE TECHNOLOGY

Deep dive into ensuing Digital Transformation driving supply chain & logistics performance and scaling digital capabilities of companies with nuanced insights of industry experts

Business Resilience

Dear Readers,

Resilient businesses recover faster with a higher rate of recovery from any form of volatility and disorder. According to a recent McKinsey article, resilience is more than just recovering back better; resilient organisations actually thrive in hostile or altered environments.

Our Cover Story takes a look at the strategies supply chain leaders have taken to build a resilient and intelligent supply chain, keeping in mind the ever-evolving customers.

Building risk also means creating risk mitigating strategies to combat inflation created by shortages of raw materials, components, and other critical services. In this issue we focus on the same given the current global geo-political situations. We also have a report by Kearney India and Pando on the top five megatrends that are slated to drive the Indian logistics industry.

As we enter into a new Financial Year, we are seeing that multiple global events may affect a slowdown in India too. However, the massive investments in infrastructure have helped kick-start the economy. India is slated to grow at 6-7 per cent, on the back of robust domestic demand.

So, here’s to a ‘Resilient’ and high-growth financial year 2023-24!

Charulata Bansal

Publisher

Charulata.bansal@celerityin.com

www.supplychaintribe.com

5th

Celerity Supply Chain Tribe Conference & Awards 2023

Theme - Creating Best Value Supply Chains

Date - 21st - 22nd June 2023

Venue - Novotel Int’l Airport Mumbai

For Delegate Registrations, Speaker Opportunities & Sponsorship Packages

Visit - http://bit.ly/3KekgeL

Nominations for Celerity Supply Chain Awards 2023 are Open!

Visit - http://bit.ly/3LWuFN9

All the winners will be felicitated at the ‘5th Celerity Supply Chain Tribe Conference & Awards’ to be held on 21st & 22nd June 2023 at Hotel Novotel, Int’l Airport Mumbai.

400+ CSCOs & CXOs

100+ Speakers

1 Gala Award Evening www.supplychaintribe.com

CONTENTS

Intelligent Supply Chains Powered by New Age Technologies

This Cover Story deep dives into ensuing Digital Transformation, which is driving supply chain and logistics performance, and scaling digital capabilities of companies. Encapsulating nuanced insights of industry experts from both the spectrums – users as well as logistics companies – we present to you a repository of sorts, which will facilitate you in carefully crafting as well as advancing your supply chain transformation journey.

Charting An Agile Tech-Enabled Supply Chain Growth Trajectory

Yogesh Sarin, Director – Supply Chain, South Asia Operations, Dell Technologies, shares the impactful traits of supply chain leaders.

Mitigating Inflation in Global Supply Chains

Vineetha Jayaram, Global Category Manager, nVent, focuses on potential solutions to reduce the impact of inflation for an enterprise.

26 | State of Logistics Tech: 2023

Pando-Kearney report offers top 5 megatrends that are slated to drive the Indian logistics industry in the years to come.

Drug Supply Chain Security Act: Improving the Integrity of Drug Distribution

This special report highlights the nuances of the Act along with tracking India’s stance on the same and how Indian companies and government bodies are slated to bring the transforming dynamics in drug distribution…

Empowering Sustainable Logisticsthe BMW Way

A sneak peek into the future of logistics at the BMW Group –Sustainable through Innovation

Editor: Prerna Lodaya

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

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

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

In with the TUNE TIMES

What are the peculiar challenges you see in managing last mile deliveries? How do you plan to mitigate them?

Till date, last mile operation is largely dependent upon untrained and unskilled resources. Our customers are well aware with the changing business dynamics and are up-to-date with advanced logistics offerings. In such scenarios, meeting up to their expectation levels is a bigger challenge for companies like us. Our emphasis has been on creating an organised & efficient way of working by skilling our workforce, which would help in meeting our clients’ delivery expectations.

Being in this industry for close to two decades, we have built checks and balances at every process. While on the one hand, our customers expect faster deliveries, and demand updated technology support, on the other, they want all these value-added services at reduced costs. Having said that, the highly competitive nature of the industry where we have new players entering the market every now and then, makes it more complex. Hence, last mile companies must always be on their toes as we can’t afford to commit even a minor error, which might result in a potential business loss. To mitigate such eventualities, we spend a lot of time and effort in training people and making our technology more inclusive and real-time.

How do you ensure Secure, Reliable and On-Time Delivery for your valued customers?

We have built robotic module where shipment cannot be held for more than 45-60 minutes at every last mile hub. The moment we receive a pick-up request for our customers, our backend work starts from there. Right from vehicle placement

to tracking and closing of trip, the entire process is mapped in system and the processes are defined. We have evolved from a people-dependent organization to a process-reliant enterprise. In case of any anomalies, the system itself raises the flag and there is an escalation matrix, which takes care from solving the problem to ensuring that the customer is informed in a timely manner. We also use digital locks on a need basis, which is our one-of-akind solution. Moreover, we have a 24x7 control tower, which is managed by our operations team where they track & trace every delivery from start till the end.

Warehousing has witnessed a huge transformation in the recent years. Your views on the changing paradigms and what’s in store for customers?

Logicarts is a Purely Small Network company and works on Zero Inventory module. We believe in ensuring quick processing and faster deliveries to our clients. We have a robust system in place, which is equipped with advanced monitoring technologies, but our biggest strength is our people. Our people have helped us to scale up from one Hub to 60 Last Mile Hubs and we take pride in it. We see the Western world developing robotics and the same is demanded frequently by our clients, but the load factor is very different. While e-commerce companies are using robotics because of smaller shipments, our major fastmoving categories are bulk and semibulk shipments. As we grow or migrate to smaller packages, we see potential in using robots. Currently, we are using a hybrid model of Men and MHEs (material handling equipment) and automation in WMS for picking and packing.

Your insights on the shaping up technology trends in supply chain… A few years back, visibility used to be a big thing, now it has become a need of the hour. We also understand that today’s technology will become obsolete in few years, but we see a bright future in tech adoption in this so-called traditional industry. We can think of a few like:

• Warehouse formats will completely change into one giant hub (FCs) supplying many small spokes (DCs) with greater adoption of Robotics.

• Last mile depots, with the help of Big Data, will move from supply-based organization to a demand-based enterprise where forecast for the next day will be generated by a program and not ordered by an individual.

• Vehicles will be routed with turn-byturn map navigation and the traditional drivers with proprietary knowledge will be a thing of past.

• Vehicles will be locked and/or unlocked remotely.

What is Logicarts’ vision to drive supply chain efficiency in the near future?

We are having a continued track record of good growth backed by a great team of people and technology, which is ingrained in the Logicarts philosophy and culture. Our vision is to touch every city and village pin code of our great country. Our strategy is to grow organically and make Logicarts a household name.

“We have evolved from a people-dependent organization to a process-reliant enterprise. Our strategy is to grow organically and make Logicarts a household name,” highlights Gangadhar Reddy Y, Founder & CEO, Logicarts.

Charting An Agile

TECH-ENABLED SUPPLY CHAIN Growth Trajectory

“I strongly believe that supply chain is recommended for passionate professionals seeking reasonable adventure and not scared of uncertainties. With that as a personality trait, you would get your kick or glam quotient with ease. If that is not you, there are still several ways by which supply chain managers can make their job interesting and rewarding,” enlightens Yogesh Sarin, Director – Supply Chain, South Asia Operations, Dell Technologies, during this interview…

You have been a close witness to the transformative landscape in the consumer electronics space. What have been some of the most defining change moments that have shaped the growth of the segment?

Consumer electronics is an extremely rapidly evolving industry and has been witnessing disruptive changes that are shaping the growth. Prominent ones are: x 5G Technology enabled fast internet speeds with lower latency. This has opened exciting opportunities for developing compatible devices like smartphones, tablets, and laptops. There is a fast development of newer devices like Augmented Reality/ Virtual Reality headset to experience a whole new world.

x Wearable Technology such as smartwatches & fitness trackers are enhancing functionalities with a range of purposes such as tracking fitness metrics & providing notifications.

x Internet of Things is enabling greater connectivity between devices with ease of larger & complex automations.

x Artificial Intelligence is becoming more advanced each day, allowing devices to offer more personalized and efficient experiences.

x Sustainability focus is driven by environmentally conscious customer values. Consumer electronics products developed these days are more energy efficient and use recycled materials.

What have been the greatest challenges in managing supply chains in tough times?

Covid crippled the supply chain and then the war in Ukraine knocked it to its knees. Building resilient supply chains with worst case scenarios are being developed to keep businesses on track. Unforeseen events are to be always expected in supply chain. The scale of the event might vary, but these incidents have ripple effects

Yogesh Sarin is an IMT Ghaziabad alumni with a BTech in Mechanical Engineering from University of Mysore. In over three decades of his illustrious career, he has established greenfield start-ups for consumer electronics and telecom products, developed agile supply chain operations for aftermarket services & manufacturing operations. Being the people’s leader, he has built & mentored crosscultural teams across multiple geographies, ensuring high standards of excellence & integrity to drive large diverse global collaborative engagements.

on supply chains and puts the spotlight on the need for granular visibility and network design. There is an obvious need to have systems in place that react to such events to reduce the impact and hasten recovery. May not be unique but simple options are always effective like nonmonopolistic suppliers no more limited to one country and having multimodal routes. Agile & resilient supply chain need to be developed such that your stock keeps moving from source to destination in minimum lead time with optimal cost.

Supply chain has always been considered a less-glamourous job. While it may sound jarring & fascinating at the same time, can it up the glam quotient? If yes, then how can supply chain managers work towards it?

I strongly believe that supply chain is recommended for passionate professionals seeking reasonable adventure and not scared of uncertainties. With that as a personality trait, you would get your kick or glam quotient with ease. If that is not you, there are still several ways by which supply chain managers can make their job interesting and rewarding. New technologies need to be embraced to optimize processes, reduce cost, and improve efficiency. Supply chain managers need to evolve new strategies to debottleneck existing problems in hand. Coming up with creative solutions for complex problems can be intellectually stimulating. Networking through industry conferences and joining professional organizations can be a mutually rewarding experience.

Kindly enlighten us on core drivers of transformation in supply chains.

Supply Chain transformations involve making significant changes to organization’s supply chain operation processes to achieve competitive advantage and align with changing customer demands. Some key drivers include…

x Digitization & technologies like IOT (Internet of Things), AI (Artificial Intelligence) and Blockchain can help streamline operations, improve visibility, and drive agility & responsiveness.

x Globalization has enormous merits but comes with its set of complexities, which need to be streamlines for endto-end processes.

x Risk management was always important but natural disasters, weather events, geopolitical instability and pandemics have further heightened the need for building resilient supply chain.

x Collaboration and partnership with suppliers, logistics partners and other stakeholders can help improve profitability and customer experience.

How can new age tech tools aid in attaining operational excellence while driving sustainability in supply chain?

There are several ways in which new age tech tools can help. Here are few dominant ones:

x Sustainable energy efficient technologies that also help reduce carbon footprint.

x Real-time tracking & visibility.

x Cloud-based collaboration between different stakeholders of supply chain.

x Data analytics & machine learning to improve inventory management and improve efficiency.

x Blockchain for transparent and secure supply chain.

How can companies work towards optimizing warehousing operations efficiency?

Improving warehouse efficiency can help business reduce cost, improve productivity and customer satisfaction. Here are some ways to do:

x Warehouse layout to be rearranged to reduce travel time and improve flow, clear labelling of all stocks.

x Automations like conveyor belt, robotics and Automated Storage & Retrieval System can increase efficiency & accuracy while also reducing labour cost.

x Optimize picking process with visual and audio aids.

x Use of RFID technology to improve accuracy and reduce picking time.

x Real-time performance monitoring for prompt course correction and feedback for improvement.

What are the aspects that will make India’s Supply Chain Future-Ready and Resilient?

India has the potential to be a major player in global supply chain. Here are some ongoing efforts towards the same:

x Infrastructure development towards roads, ports, airports & warehouses.

x Regulatory reforms to promote ease of doing business.

x Talent development building expertise in supply chain management.

Recommendations for new age supply chain professionals to chart their journey in this highly dynamic domain…

 Latest Technologies need to be embraced and deployed

 Agile and flexible attitude would help you sail through turbulent times

 Build relationships with all internal & external stakeholders. It would help develop trust and collaboration

 Diversify skillset to beyond supply chain…analytics, problem solving, effective communication & story telling

 Sustainability is increasingly important to drive organizational commitments besides stakeholders are already demanding environmentally responsible & ethical practices

 Embrace uncertainty and enjoy what you do

Mitigating Inflation in GLOBAL SUPPLY CHAINS

In the post-pandemic supply chain environment, both manufacturing and distribution sectors have faced an acute shortage of raw materials, components, resources, and transportation services. This created a ripple effect that led to severe inflation throughout the value chain, negatively impacting the end consumers with increased prices for finished goods & services and delayed global economic growth. Through this article, Vineetha Jayaram, Global Category Manager, nVent, focuses on potential solutions to reduce the impact of inflation for an enterprise by reviewing the primary sources and potential corrective actions including cost-avoidance measures.

TO determine the measures to control inflation, it is crucial to first provide a baseline on how government institutions track and report inflation in different countries. The most common inflation metrics in the United States are the Consumer Price Index (CPI) and the Producer Price Index (PPI), reported by the US Department of Labor’s Bureau of Labor Statistics. CPI is the average change over time in the prices paid by the urban consumers for a market basket of goods and services, while the PPI is the measure of the average change over time in the selling prices by producers for their output.

According to the January 2023 CPI, and PPI reports, all items’ CPI index increased 6.4% for the 12 months ending January. The energy index rose 8.7% for the 12 months ending January, and the food index increased 10.1% over the last year. Similarly, the PPI index for final demand rose 6% for the 12 months ending January. Also in January, a 1.2% rise in prices for final demand goods led to an advance in the final demand index. Prices for final demand services also moved higher, increasing by 0.4%.

India uses similar indices to measure inflation: the Consumer Price Index (CPI) and the Wholesale Price Index (WPI), which also measure the change in

prices of goods and services. According to a recent Forbes article, the CPI analyses the retail inflation of goods & services in the economy across 260 commodities. The WPI analyses the inflation of only wholesale price or bulk goods across 697 commodities. CPI data is provided by the Ministry of Statistics and Programme Implementation (MOSPI). The Office of Economic Adviser, Ministry of Commerce and Industry publishes the WPI data. According to the February 2023 data, annual consumer price inflation in India accelerated to 6.52% in January 2023, the highest in three months, compared to 5.72% in December and above the Reserve Bank of India target of 2-6%. The annual rate of inflation based on the WPI index was 4.73% in January 2023 (over January 2022) against 4.95% recorded in December 2022.

In the article, ‘What is supply chain inflation and why is it driving up consumer prices now?, professors from the University of Oxford highlighted, “The interconnectedness of global supply chains means that when one price goes up, others tend to follow.” According to the experts, three factors contribute to inflation: the increase in the price of goods and services, labor costs and energy costs.

“While consumer price inflation has been relatively low and stable for the last 20

years, the last few months have seen a big jump in price growth alongside lots of discussions about the role of supply chain disruptions,” said the authors.

The primary sources of inflation are all interrelated as these factors contribute to the final price of the finished products and services sold to end customers. The focus here is on potential solutions to reduce the impact of inflation for organisations in their supply chains by reviewing the primary sources and possible control measures, including cost-avoidance actions that can be implemented to limit inflation.

Vineetha Jayaram is a Supply Chain professional with over 12 years of experience overseeing global category management initiatives and driving cross-functional projects focused on supply risk mitigation. She holds an MS in Management –Operations Research & Supply Chain and an MBA from Case Western Reserve University in Cleveland, Ohio.

SOURCES OF INFLATION

Raw Materials and Packaging: Material prices, especially for base metals, plastic resins, and corrugated boxes, had increased over the last three years due to multiple events when current demand exceeded supply in the market. These include raw material shortages due to unforecasted increases in customer orders, rising energy and fuel costs, production disruptions related to the Covid pandemic, geopolitical events, and worker protests when manufacturers, critical materials distributors, and suppliers were forced to shut down operations, citing force majeure temporarily or permanently. Common packaging materials, including paper and plastic prices, correlate with the cost of the base materials, which have all increased significantly from 2020 levels for the same reasons.

Labor: The talent shortage in critical sectors such as retail, healthcare, energy, agriculture, and transportation has impacted global supply chains leading to higher labor costs. According to Deloitte’s 2022 Retail Industry Outlook, based on interviews with 50 senior retail executives, labor remained the primary challenge for 2023. The World Health Organization predicts 15 million healthcare workers worldwide shortfall in 2030. The International Centre on Nurse Migration projects that there will be a shortage of 13 million nurses alone by 2030, up from a lack of 6 million before the pandemic. The Association of American Medical Colleges (AAMC) predicts a shortage of between 37,800

and 124,000 physicians by 2034.

With severe labor shortages and increased demand, organizations are forced to raise wages to retain their current workers and attract new workers, significantly increasing the costs for skilled labor occupations across sectors. Supply chain disruptions also mean manufacturers may need to pay their existing workers for overtime hours to meet delivery expectations to end customers, increasing the organization's overall labor costs. These worker wage increases also impact lower-cost countries in the Asia Pacific region, such as China and India, which are considered the primary manufacturing hubs for major global corporations.

According to CNBC and the annual Salary Trends Report by data company ECA International, the Asia Pacific Region with India, Vietnam, and China will see the most significant increases in real wages in 2023 as compared to countries in other regions. Real wages are the wage growth number considering the inflation rate. According to a survey conducted by Aon plc, India is the country with the highest salary increase in 2022 which is 10.6%, as compared to other countries, including Germany (3.5%), UK (4%), USA (4.5%), China (6%), Brazil (5.6%), and Japan (3%). These outcomes force these same corporations to raise the prices of the finished goods and services to maintain profitability, thus increasing inflation across the value chain.

Transportation: The Inflation related issues in the transportation sector are more complex and multifold as these

impact modes across the ocean, air, and land, including railways and road transportation. Since the pandemic, the ports congestion and shutdowns in China, Europe, and the United States, the shortage in ocean cargo containers with increases in blank sailings, the low supply of trucks in the US, especially for full truckload shipments (FTL) and also the scarcity of truck drivers along with the rising fuel and diesel prices have all led to a sharp rise in freight costs for international shipping. However, these prices have fallen significantly since Q3 2022 due to a steep decline in consumer demand and reduced congestion at the ports, according to Freightos, the digital booking platform for international shipping. Freightos also reported that international air cargo - pre-pandemic rates typically ranged from approximately $2.50-$5.00 per kilogram, depending on the type of cargo and available space. Costs rose sharply during the pandemic, reaching $4.00-$8.00 per kilogram. As of early 2023, rates have dropped to around $3.00-$7.00 per kilogram, which is still higher than pre-pandemic rates.

Environmental Social and Governance (ESG) Impact Initiatives:

Investments in best-inclass practices and tools to ensure transparency and accountability within the end-to-end supply chain concerning ESG initiatives are top priorities for all organizations. However, organizations may need to increase the cost of their goods and services to account for these investments. In the current business environment, companies are focused on

Value engineering helps to reduce costs during the design stage of the products by reviewing all the lifecycle costs and benefits. Examining every step in the process of the conversion to the final finished part can lead to some significant cost savings in manufacturing critical components and assemblies, such as potential cheaper alternatives for materials, fewer finished goods offered through the process of rationalization that can significantly reduce labor and overhead costs and the use of more cost-efficient technologies and techniques to meet project goals.

investments based on multiple factors - ESG disclosure requirements based on laws and regulations by country and sector, ESG reporting methods such as Global Reporting Initiative (GRI) and Sustainability Accounting Standards Board (SASB) and reliable data management to gain investor trust and manage customers, suppliers, employees, and other stakeholders’ expectations to achieve sustainability goals and maintain a substantial brand value.

According to a 2022 Deloitte Sustainability ESG Executive Survey of 300 executives in key US public companies, 35% reported data quality as the primary challenge. Another 25% said access to ESG data was the next biggest challenge. Further investments will be necessary to ensure the availability of reliable data for ESG reporting. In addition, 99% of the executives reported that they are likely or very likely to invest in more technology and tools to accommodate future requirements in the next 12 months. These additional investments will further increase the cost of production of the final goods and services.

Geo-political events: A wave of unanticipated disruption events has shaken the global economy in the last three years, starting with the Covid-19 pandemic, including China’s Zero-Covid Policy, tensions between US and China, and the Russia-Ukraine conflict as the primary occurrences. These have all led

to significant supply chain disruptions with increased lead times which reduced the global supply of goods and services, leading to a sharp increase in customer prices.

Foreign Currency Exchange Rate

Price Fluctuations: It is important not to underestimate the role of currency exchange rates in impacting inflation. For example, the imported materials, goods, and services, especially from countries such as China, India, and Russia, became more expensive due to tariffs, additional duties, and trade sanctions, which weakened the currencies in these countries leading to inflation or an increase in the prices of goods and services in consumer countries.

CONTROL MEASURES

Digital Transformation: Organisations need to invest in supply chain demand visibility enabling technologies and process innovations to help reduce overhead costs, including labor needs for repetitive tasks, assembly, and packaging operations. These tools should also help identify and manage relevant and reliable data for analyzing leading market price indicators based on factors such as specialty material capacity trends and geo-political events, to minimize the impact of future inflation.

Supply Chain Diversification: Supply chain leaders must think out of the box to combat inflation by diversifying the

organization’s current supply base. This could be through allocating the current purchasing spend across multiple sources for critical parts and priority projects to reduce the impact of price increases or entering new low-cost supply markets for these services. This strategy applies to direct, and indirect purchasing spend categories and helps optimize costs across the value chain by sourcing alternatives for raw material manufacturers and logistics providers, including inland and ocean freight, packaging companies, and even staffing agencies used for permanent and temp hiring needs. The other forms of diversification could be through domestic manufacturing to mitigate the cost impact due to geopolitical and international trade events and insourcing by expanding internal capacity and capabilities to have better control and visibility into the total cost of doing business.

Effective Contract Management:

Contracts minimise unanticipated price increases with obligations defined for each party involved. These can be an efficient cost-avoidance tool and help mitigate inflation in numerous ways. First, a price lock agreement for materials based on market indices and an agreed market rate can help control raw material costs by reducing the impact of future price fluctuations. A standard supplier stocking agreement for products with steady demand can help define firm Minimum Order Quantities (MOQ)

It’s time for supply chain managers to take a closer look at contracts. We have been enjoying a period of very low inflation, which allowed some business leaders to become complacent with their cost structures. Now is a good time to assess, analyse, and target key elements of sales or external spend and see where adjustments can be made. Companies should focus on increasing their supply chain resilience to an even larger degree. Resilient supply chains offer visibility, predictability, and flexibility over three-time horizons: the short term (tactical), the mid-term (operational), and the long term (strategic), according to a resilience test developed by MIT and Accenture.

recognize and adjust operating plans to this change in market conditions. For example, higher material prices and interest rates dramatically increase the cost of discretionary inventory. This might result in a change to smaller production quantities for better balance between capacity and working capital economics. If there is concern about a looming recession that would result in significant stock devaluation, the higher cost of faster transportation modes may be justified in some cases. One of the most important attributes for supply chain planning to emphasize is transparency and forward visibility of projected supply costs for informed business decisions.

and provide price discounts based on volume to reduce overall inventory costs. Contracts can help control inflation while setting up new high-volume, highgrowth supply markets by keeping price fluctuations tied to volume, market indexes, and the increase in business over the long run.

Supply Chain Collaboration: Inflation mitigation requires cross-functional solid collaboration in the end-to-end supply chain process, which includes both internally within the organization at the executive levels and between suppliers, manufacturers, and distributors. These opportunities for collaboration could be in investments to mitigate inflation related to Environmental, Social, and Governance (ESG) goals, new manufacturing or warehouse locations, cost-efficient packaging configurations and alternatives, and automation or artificial intelligence technologies to reduce labor inefficiencies and maximize throughput. In addition, maintaining mutually beneficial partnerships and leveraging long-standing relationships that help control the inflationary shock across the value chain to maintain business profitability becomes necessary.

External Strategic Partnerships: Since inflation is a global issue, multinational organizations must take advantage of government measures to combat inflation, including monetary policies and community resources,

while engaging with external trade associations, non-profit and academic institutions, and government bodies to promote dialogue and solutions to keep prices down.

In many countries, the governments offer various subsidies to increase domestic manufacturing and combat inflation, especially in Agriculture, Energy, and Housing sectors, while reducing import duties for certain critical raw materials. It is essential for organizations to continuously monitor and engage with key government institutions to participate in these benefit programs. Potential solutions for labor cost increases would be strategic alliances with professional trade associations for skillset evaluations and academies for employment opportunities within skilled labor occupations to graduating students. Organizations could also partner with community organizations for training programs to upskill and retain their current employees instead of investing in new hiring resources.

Value Engineering Initiatives:

Value engineering helps to reduce costs during the design stage of the products by reviewing all the lifecycle costs and benefits. Examining every step in the process of the conversion to the final finished part can lead to some significant cost savings in manufacturing critical components and assemblies, such as potential cheaper alternatives for materials, fewer finished goods offered

through the process of rationalization that can significantly reduce labor and overhead costs and the use of more costefficient technologies and techniques to meet project goals.

In a nutshell, inflation implies a greater challenge for global supply chains. To avert this eventuality, stakeholders must enhance their stock visibility, improve their logistics planning and cut production costs to remain competitive. Companies must make bold moves in enhancing their digital capabilities to help enable improved forecasting, enhanced end-to-end supply chain visibility and help unleash the power of people. I would like to conclude this article by stating a very apt statement mentioned in an Accenture report, “The cycle of rising inflation requires a response that combines new technologies and the reskilling of people. This combination of human ingenuity and technology underpins a more resilient supply chain. It doesn’t just help companies manage inflation but can flex to support innovations that drive new sources of growth. To beat the inflation-disruption cycle, the time to act is now.”

High inflation is like severe weather in that it cannot be controlled or reduced. The supply chain planner’s role is to

Intelligent Supply Chains

The focus of running supply chains has always been on Enhancing Operational Efficiencies. In the post-pandemic world, many more variables have come into play such as Environment Sustainability and Customer Centricity. Creating and delivering a supply chain which is more resilient, integrated, innovative, hyper-personalized and forward thinking is key to gaining competitive advantage. The common thread among all these has been the seamless & fast paced adoption of new age technology tools to drive growth and establish Intelligent Supply Chain Networks. This Cover Story deep dives into ensuing Digital Transformation, which is driving supply chain and logistics performance, and scaling digital capabilities of companies. Encapsulating nuanced insights of industry experts from both the spectrums – users as well as logistics companies – we present to you a repository of sorts, which will facilitate you in carefully crafting as well as advancing your supply chain transformation journey…

BY now, we all have realised the drastic impact of the geopolitical crises, climate change, and pandemics on global supply chains, which has mandated global organizations to first resolve their own supply chain disruptions and make it more resilient to such contingencies. However,

Dharmendra Patwardhan, Executive Vice President, Global Head – Intelligent Supply Chain

Operations, Capgemini Business Services, in his foreword of a recent Capgemini report, emphasised that what we are facing now isn’t a supply chain crisis but rather a consumer crisis. “The expectations we, as consumers, have all been conditioned to demand, such as greater product customization,

ever shorter order fulfillment times, and immediate logistics management, have now been called into question. However, for organizations that can manage this new complex ecosystem, and continue to deliver on-demand service, huge opportunity awaits. To deliver on this challenge, organizations need to reimagine the traditional supply chain through holistic digital transformation and ecosystem collaboration, and in doing so roll out intelligent, end-to-end data-driven solutions for consumers,” he stated.

In tune with the fast shifting paradigms, the journey towards developing Intelligent Supply Chains warrants the implementation and leveraging of modern technologies to

optimise various facets of the supply chain. With an intelligent supply chain, companies leverage modern technologies to collect data and develop insights to better optimize their supply chain. This can save on costs, increase profitability, increase their speed to customers, and get ahead of their competition. Moving towards an intelligent supply chain requires significant and consistent investment. Not only in streamlining processes and implementing new technologies, but also supporting emerging roles and skillsets to respond to and stay ahead of the evolving nature of work within the supply chain. With this as the thread, let’s take a look at the thought-provoking opinions of industry experts…

What according to you are the key challenges being faced by supply chain managers?

We live in a continuously changing VUCA World where the customer expectations are also changing very quickly. Today's customers are spoilt for choice and hence it is imperative that the companies and their supply chains get equipped to handle & service the ever-changing customer needs. Being able to meet the ever-changing customer needs 'intime' and 'without incurring extra costs/ redundancy/obsolescence involved in doing so', are the key challenges for supply chain managers.

We before I - How do you see collaboration shaping the supply chain model especially post Covid? Please also share your insights on how data & technology can add value to a Supply Chain function. Supply chain managers have to be good at predicting customers’ expectations. They should also be able to take action in advance so as to serve the customers as per their expectations. In order to do so, they need to have a seamless & real time view of the entire chain from the customer's customer to the supplier's supplier. This can be done using the 3C Concept, coined by me, where the

3Cs stand for Connect, Communicate & Collaborate. In essence, sharing data across the chain and using the same to collaborate & make decisions is the key to a successful supply chain. Companies which are willing to collaborate with their channel partners and are also good at using data to build algorithms so as to predict/preempt customer behaviour will be the leaders in this day & age. Those who are secretive about their information and operate in silos will find it tough to stay relevant in the ever-changing business landscape.

What steps need to be taken so that the supply chain is able to

Supply chain managers need to unleash the power of 3Cs — Connect, Communicate and Collaborate to drive SCM efficiency.

Mohit Jauhari, Head – SCM, Shriram Pistons & Rings Ltd.

meet the ever-changing customer requirements?

As stated above, once the 3C state is achieved, companies will be able to leverage/mine the available end to end data so as to predict customers behaviour. They will be able to optimally plan execution in sync with the projected

customer behaviour. While doing so, they will also harness the benefits of optimal use of resources. Companies need to be aware of the importance of data - and should have teams to make use of the available data so as to make decisions towards ensuring customer delight. Integrated Planning based on projected

customer behaviour and optimized execution as per the same will be the key differentiator between companies.

What according to you are the key challenges being faced by Supply chain managers?

We have all seen the impact of the Covid-19 pandemic. The moment the first lockdown was announced on March 24, 2020, the operations at Amway India, like any other company, were stalled. That was the time when the Supply Chain division was at the fulcrum of every industry and business globally. The Supply chain managers became frontline warriors. Keeping global uncertainties in mind, we had to be ready with a mitigation plan for uninterrupted supplies, and that was the biggest challenge for any supply chain professional.

The last three years made us rethink on the key fundamentals of supply chain readiness to deal with such uncertainties, which also included the right talent in the team and the best practices in the supply chain processes. Additionally, we needed to ensure the right adoption of automation and technology, enabling delivery delight for our customers.

Today’s customers are more mature, informed, and evolved than they used to be a decade ago. They are aware of the

new-age technology dynamics shaping our industry. The customer evolution process has been so rapid that it has moved from ‘same day’ delivery to a‘10minute’ delivery concept today.

We need to strike the right balance between the customers’ expectations and the impact on the business to ensure ultimate ‘Delivery Delight’. The supply chain manager has a critical role to play here as business dynamics change with the advent of new technology innovations.

What are the challenges of integrating a supply chain end-toend?

As supply chain professionals, we constantly challenge ourselves to find ways towards enhancing the customer experience with improved operational efficiencies and cost- effectiveness. We are making strategic investments for transforming Amway’s business digitally, thereby, stepping-up manufacturing automation, home delivery, and strengthening digital capabilities. We are also looking at deploying technology for integrating the whole operations

to ensure the delivery of the customer experience that they seek from us.

There was a time when customers used to connect through call centres to check on the possible delivery timelines and take the delivery status update. To make it a seamless process, we tied up with a tech startup, which enabled us in providing real-time automated delivery updates to our customers. This is how we are integrating the front end with the back end. Secondly, when we are talking about planning, sales, or manufacturing operations, all of it is integrated through advanced technology tools. Even the warehouses are wi-fi enabled. We brought in newer dimensions to enhance warehousing efficiency by implementing the latest technology solutions that augment seamless connections between every process, meet delivery timelines, and optimize cost. These are some of the must-dos for a supply chain division in today’s times.

In the pre-Covid era, 30% of Amway’s sales happened through the company’s website and 70% of sales through retail stores. The onset of Covid-19 resulted in 100% online sales and currently, it

Technology is a great tool for improving the overall customer experience and increasing customer satisfaction levels.

Sanjeev Suri, Sr. VP Global Omni Channel and Logistics, Amway India

has stabilized to 70%+ Online sales. The company’s offline and online market presence has been helping us reach our customer base more efficiently in less time. We are reinvesting in technology and augmenting customer experiences through our retail stores, which encourages them to buy online.

A well-integrated business can help achieve customer delight through the use of technology. Please share your thoughts.

Today, customers are more informed and evolved. They expect a seamless buying experience at online and offline stores, fast and low-cost delivery of product and packaging experience, and a variety of other options. Technology is a great tool for improving the overall customer experience and increasing customer satisfaction levels.

Amway India recently launched its website in Hindi. This tech-enabled digital change will help and support our distributors to purchase and sell products efficiently in their regional language. A large chunk of our customer base prefers Hindi as a language and finds it easier to engage and connect with the brand.

Furthermore, technology and its integration with business processes help organizations:

 Improved communication for decision-making

 More transparency in supply chain visibility

 Greater efficiency in supply chain processes

 Improved access to information (Order Information)

 Improved market insights

 Improved agility

 Becoming a future-ready organisation

 Analysing customer buying behaviour

Since the Covid era, the supply chain has taken a centre stage in the business. As the businesses were hit hard, the leaders understood the importance of an agile and future-ready supply chain, and technology integrated into business processes made the sailing smoother.

Digitization can help add immense value to an organization. What are your views on this?

Please share some examples. Please also share your insights on how data & technology can add value to a supply chain function. Digitization has touched upon all aspects of supply chain management; it helps organizations transform their legacy processes, which include paper-based and manual, into more flexible, agile, and collaborative digital models.

Logistics data is one important source of information used for evaluating all major key performance indicators (KPIs). It plays a significant role in assessing the commercial aspects of logistics. Effective data and technology integration is enabling organisations to focus on the insights that help increase the customer experience. It helps organizations in better decision-making, improving operational efficiencies, endto-end customer engagement, and cost optimization.

What steps need to be taken so that the supply chain is able to meet the ever-changing customer requirements?

It is very important for organisations to be agile and keep pace with the latest trends in the market. A few steps which are important to meet the ever-changing customer requirements are as follows:

 Expand your supply chain visibility

 Develop a good relationship with your suppliers / vendors

 Automate your supply chain processes

 Implement latest technology, which supports any change at the front-end

 Develop a feedback mechanism followed by analysis which helps us to know customer expectations.

We before I - How do you see collaboration shaping the supply chain model especially postCovid?

Unprecedented corporate partnership is being seen with COVID-19. Supply chain collaboration is not something that comes naturally to businesses, nor can it be turned on with the flick of a switch. Gaining the cooperation and trust of upstream suppliers is a gradual process and will happen over time.

While the global pandemic forced

supply chain participants to collaborate, the partnerships that will be most successful in responding to the crisis are those where working connections already exist. This is since the channels for information and knowledge sharing have already been established, and the goals of upstream suppliers and downstream companies in the supply chain are already congruent.

What, according to you, are the best practices in Supply Chain?

Which ones have you deployed in your firm?

A few of the best practices for the supply chain are as follows…

 Identify risk and develop the strategy

 Manage the total cost of ownership

 Establish key supplier and vendor alliances

 Manage inventory

 Monitor the key metrics

 Focus on the customer experience

 Integrate the right technology.

At Amway India, we have deployed some best practices in supply chain management. Our primary focus is to achieve customer satisfaction and delight. We regularly monitor the key metrics and data points that help us find the root cause and then focus on corrective and preventive action. When it comes to technology integration, we have warehouse management software, an order management system along with a last-mile track and trace tool. This has enabled us to deliver unprecedented business outcomes, improve employee and customer experience and minimize operational risks.

What is your advice to companies going forward in this digitalization journey?

Be future-ready, that’s the success mantra. Organizations across industries enjoy the benefits of digital transformation: it enables businesses to modernize legacy processes, accelerate efficient workflows, strengthen security, and increase profitability. Organizations will need to integrate the latest technologies to be competitive in the market.

Your insights on the transformative landscape that you have witnessed in SCM…

India has been at the forefront of digital transformation in recent years and has been actively promoting the adoption of digital technologies across all sectors. The Indian Government has launched several initiatives and programs to support the digital transformation of business processes in the country, such as the Digital India program and the Startup India initiative. The widespread availability of affordable technology and the growth of internet and mobile penetration have also played a key role in driving the digital transformation of business processes in India. A significant number of businesses, especially small and medium-sized enterprises (SMEs), have embraced digital technologies and are leveraging them to improve their operational efficiency and reach new customers.

Additionally, the Covid-19 pandemic has accelerated the digital transformation of business processes in India. With lockdowns and restrictions in place, businesses have been forced to shift their operations online and have had to embrace digital technologies in order to survive and remain competitive. Industry 4.0 and Industry 5.0 are the next phases of industrial evolution that are characterized by advanced technologies such as artificial intelligence, the Internet of Things (IoT), and robotics. These technologies have the potential to greatly improve productivity, efficiency, and competitiveness, but there are also several enablers and barriers that must

be addressed in order to fully realize their benefits.

How has Haldiram done the transformation?

For us, it has been a conscious journey that we have embarked upon. We are taking incremental steps at a time. But more importantly, we are making these efforts at the right time. We are trying to break those changes into smaller milestones so that that helps us keep a track on our progress. In that sense, I would say digitization is a journey, which I’m not sure where it will end because it’s a continuous process as our businesses and the economy progress and we keep evolving to the customers’ needs.

How do you transform a company which has been for years into processes and is ready for the change?

I think supply chain, as a function, understands the way businesses operate. Supply chain encompasses almost every other business function, and they are able to bring the pain points on the table. Technology is proving to be a great enabler in streamlining supply chain bottlenecks. It’s helping companies in accurately carrying out demand predictions and analytics. It’s offering companies end-to-end visibility into the system. As we move along, tech-enabled supply chain is going to be a great asset for the companies. There are several ways in which India can accelerate its adoption of technology in supply chain and business operations to catch up with the Western countries:

Government support: The government can play a key role in promoting and supporting the adoption of technology in SCM and business operations. This can include providing tax incentives, subsidies, and other financial support for companies that invest in technology.

Talent development: India can develop a strong pool of talent in technology and SCM by investing in education and training programs. This can include providing scholarships, internships, and mentorship programs for students and professionals.

Infrastructure development: India can invest in infrastructure development to support the growth of technology in SCM and business operations. This can include building data centers, developing high-speed internet connectivity, and investing in energy and logistics infrastructure.

Collaboration between industry and academia: India can promote collaboration between industry and academia to drive innovation and the development of new technologies in SCM and business operations. This can include setting up research and development centers, co-creation initiatives, and technology incubators.

Digital transformation initiatives: Companies in India can take the lead in adopting digital transformation initiatives in their operations. This can include implementing digital systems, automating processes, and investing in

You must keep challenging the status quo. That’s how you try & find new ways of working and solutions to the problems.

Sanjeev Setia, VP – Supply Chain, Haldiram Snacks

technology infrastructure.

Encouraging entrepreneurship: India can encourage entrepreneurship in the technology and SCM space by providing support for start-ups and promoting innovation. This can include providing funding, mentorship programs, and access to networks and resources.

In a nutshell, there are several ways in which India can accelerate its adoption of technology in SCM and business operations. This can include government support, talent development, infrastructure development, collaboration between industry and academia, digital transformation initiatives, and encouraging entrepreneurship. By taking these steps, India can catch up with the Western countries and become a leader in technology and SCM.

How has innovation changed your story?

You must keep challenging the status quo and that’s how you try and find new ways of working and solutions to the problems. That’s the beauty of what humans bring to the table in terms of trying to have the same thing in a different way of place to bring in efficiencies. I recently read a quote somewhere that the laziest people are the biggest innovators because they find ways to cut down their times. Innovation is never ending.

The Covid-19 pandemic has had a significant impact on supply chain and has accelerated the need for innovation in supply chain platforms. Here are some of the forms of innovation we can expect to see in the post-Covid era:

Digital transformation: The pandemic has accelerated the shift towards digital transformation in supply chain management. We can expect to see a continued focus on digital solutions, such as cloud-based platforms, data analytics,

and automation technologies, to improve supply chain visibility and efficiency.

Resilience and agility: The Covid-19 pandemic has highlighted the need for supply chain resilience and agility. Supply chain platforms will need to be designed to quickly adapt to changing market conditions and unexpected disruptions. Collaboration and interconnectivity: Supply chain platforms will need to be designed to facilitate collaboration and interconnectivity across different stakeholders, including suppliers, manufacturers, and customers. This will enable real-time visibility and coordinated decision-making.

Sustainability and social responsibility: Companies are increasingly recognizing the importance of sustainability and social responsibility in their supply chains. Supply chain platforms will need to be designed to support sustainability initiatives, such as reducing carbon emissions, improving resource efficiency, and ensuring ethical sourcing practices.

Predictive analytics and AI: Predictive analytics and artificial intelligence (AI) will play a critical role in supply chain management. AI-powered platforms will be able to analyze large amounts of data to provide real-time insights and improve decision-making.

In effect, Covid-19 pandemic has accelerated the need for innovation in supply chain management. We can expect to see continued focus on digital transformation, resilience and agility, collaboration and interconnectivity, sustainability and social responsibility, and predictive analytics and AI in supply chain platforms. By adopting these innovations, companies will be better equipped to respond to future challenges and improve the efficiency

and effectiveness of their supply chains.

Please share your insights on how data & technology can add value to a Supply Chain function. Managing the availability of supply to meet volatile demand has never been easy. Even before unprecedented challenges created by Covid pandemic and war in Ukraine, synchronizing supply & demand was perennial struggle for most businesses. This is not because of lack of effort. Most businesses have made strides to strengthen their planning capabilities in recent years. IBP is a powerful process that could become central to how companies run their businesses. It is decades ahead of S&OP. The key differentiators are:

Full Business Scope: Beyond balancing demand & supply, this synchronizes all of a company’s mid & long-term plans including management of revenues, product pipeline & portfolios, strategic projects, capital investments, inventory policies, procurement strategies and joint capacity plans with external partners.

Risk Management along with Strategy & Performance Review: IBP uses scenario planning to drive decisions. There is varying degree of confidence about-

 how the future will play out,

 how much revenue is reasonably certain as a result of consistent consumption pattern,

 how much additional demand might emerge if certain events happen,

 how much unusual or extreme occurrences might affect additional demand…

These assumptions are assessed against business targets, options for mitigating actions and potential gap closure.

Real-time Financials: To ensure

Supply chain platforms will need to be designed to facilitate collaboration and interconnectivity across different stakeholders, including suppliers, manufacturers, and customers. This will enable real-time visibility and coordinated decision-making.

consistency between volume based planning and financial projections, IBP ensures strong linkage between operations and its impact on business. This helps eliminate surprises.

Effective IBP process consists of 5 building blocks:

Business backed Design

 P&L impact

 Covers short, mid & long-term

 Cadence reviews

High Quality Process Management

 Rhythm with meetings

 Cross functional decision makers

 Agile forums

 Single number

Accountability & Performance

Management

 Define, monitor forward looking matrices

 Tradeoff for conflicting KPIs

 Clear accountability for shared metrics

Effective use of Data & Analytics and Technology

 Right slice & dice of data

 Scenario planning

 Optimized operational execution

 Specialized Organizational roles and Capabilities

 Process owner

 Integrated role

 Cross functional collaboration

The mature IBP process significantly improves collaboration, pushing up Service Levels, bringing in efficiencies and higher productivity.

What are the best practices of the supply chain that you want to share with this audience? How do you go about implementing it? How important is upskilling of people in this journey?

The supply chain is all about ensuring Right Product in Right Quantity in Right Condition at Right Place in Right Time to Right Customer and at Right Price. In a nutshell, this manages Customer Service, Cost, Waste, and Inventories. Supply

Chain should be Agile & Responsive; Customer Centric; Automated & Digitized; Foster Collaboration; and lastly and most importantly it should be sustainable. As best practice, supply chain should be aligned to overall Organizational Objectives; Customer Focus; Should have the right talent; Capability Assessment & Skill Upgradation; Performance Management; Performance Driven Culture; Leverage Technology & Data Analytics.

What is your advice to companies going forward in this digitalisation journey?

We have overload of data, but how do we convert this data into actionable insights and act on this to ensure that we remain agile to the ever-changing business and customer needs will always be the key. For this, we need to ensure we have the required skill sets and mind sets for the teams. Upskilling on this will enable and fast track the digitization journey.

Pavel Mehta, Vice President and Head Supply Chain, Pernod-Ricard India

To what extent has India accepted and accelerated the digital transformation of business processes?

The acceptance, especially over the last few years, has happened, in my view, because of the huge supply chain crisis, which we all have faced during the pandemic. There was a huge volatility in demand, fast shifting consumer patterns

and preferences, a very big and a sudden push towards e-commerce and direct-toconsumer models and therefore there was a completely new way of looking at inventory. Traditionally models of inventory management were quickly relooked. Companies placed a lot of thrust on risk mitigation strategies. A greater emphasis on contactless manufacturing and warehousing operations offered a

huge fillip to robotics and automation within the manufacturing processes and similarly within warehouses. Another area which became clearly apparent during the pandemic is a huge focus on end-to-end supply chain visibility. Very quickly organizations realized that unless they invest heavily into building digital twins, it will be virtually impossible to manage any kind of crisis in the

You cannot have an underpinned digital process without inculcating a culture of innovation.

future, irrespective of its magnitude. Companies must build or strengthen their digital capabilities of getting endto-end visibility of their entire supply chain. These are some of the factors, which accelerated the appetite of many organizations to augment their digital journeys, not just in supply chain but in the overall business. The good news is that change is happening at all fronts… The government is doing a lot of fantastic work. Our 3PL and 4PL partners are also fast embracing the changes. We must realise that cost pressures are never going to go away and as the economy grows and as organizations grow, there is very little choice left for organizations to become more efficient to maximize profit than to invest far more heavily into the digital capabilities than they had before.

The new workforce is very techsavvy. Is the supply chain industry ready for accepting the new age thought processes, especially at the innovation level?

First of all, when you start a new company and you already have a very clear digital footprint and your entire digital model is based on the digitalization strategy, in my view, it’s much easier now. Over the last few years, I’ve driven a lot of digital transformations and it is much more difficult in organizations who are trying to adapt to it and there is a fundamental difference between the cultural aspects, which in digitalization journey drives and the inherent cultural aspects of an organization. I’ll give you a few examples… as soon as you start digitalizing your processes, decision making has to be decentralized. You cannot be in an environment where you will continue to follow standard hierarchical decision-making process and digitalize everything. It will fail miserably. You cannot have an underpinned digital process without inculcating a culture

of innovation, challenging everything, challenging the status quo and then having that hunger of finding new things. The level of collaboration that you need in a traditional environment and the level of collaboration that you need in a digitally enabled operation are remarkably different. The cultural aspects of driving a digital transformation, especially in a big organization having an inherent culture, in most cases, has not been understood and not been given the weightage it deserves. The other part that I would like to mention is on the workforce that we have in a traditional supply chain set up from the bottom to the top. A lot of it has grown in-house and has jumped the corporate ladder. They have grown up the ladder following set processes and ways of working and the appetite for change is obviously less. We must understand that, and we must drive the change. If we want to make our workplace attractive to new people and if we don’t have tech-enabled processes, we will not be able to attract people at all. They will simply go to the startups or e-commerce companies. I would say all these are intertwined because on one hand, it is difficult, on the other hand, if you don’t know the developing changes, you will miss out on a huge opportunity, both in terms of your processes and also in terms of attracting and retaining the right talent. There has to be a standardized supply chain accreditation certification process. There needs to be a program where supply chain professionals are accredited based on certain standards, which are defined in a collaborative way between institutions and industries. Additionally, at the pace and the scale with which supply chain is transforming in our country, we need more institutions such as NITIE who are prepping supply chain professionals of tomorrow to be future-ready and bring impressive changes on the job. Without

investing into technology or rather investing only into technology without investing into people is certainly not going to work. It has to be balanced. The need of supply chain professionals today is growing at an exponential pace. The need for standardized basic competencies and capabilities in supply chain is huge especially when you go down the line. Today, it’s very difficult to find people who possess the desired capabilities.

Do you see innovation happening at technology level or at a mindset level or at infrastructure level?

You have to be open and mentally active to anticipate the unforeseen changes that may come your way. I’ll give you a simple example… The kind of ecosystem that we are living in are starkly different than the traditional mindsets or the mindset that we used to have many years ago where there used to a dedicated innovation team, which only used to focus on innovative ideas and then drive the whole organization to follow that innovation pipeline, those days are now gone. There are innovation opportunities everywhere specially in supply chain. If I am going to sit in siloes and think that I will be able to identify innovation opportunities across the value chain, we would be going nowhere. We have to constantly keep looking for those opportunities and that’s the only way any organization or industry can keep pace with changes.

At the pace and the scale with which supply chain is transforming in our country, we need more institutions such as NITIE who are prepping supply chain professionals of tomorrow to be future-ready and bring impressive changes on the job.

What is going to be the inventory model be going forward?

A few years back, we used to perform comparative analysis of our manufacturing processes vis-à-vis our competitors and align our processes to be “best in class” with focused benchmarking in tune with the market & consumer demands. Some rapid changes around visibility, adoption of end-to-end visibility as a fulcrum, both supply & demand side was felt, not only for inter but intra organizational aspects as well. Intent was to continue to sharpen it, add tech layers where it was needed & develop some homogeneity to operational process. It was yet static whether resilient we didn’t know. Post-Covid, we all are witness to the kind of metamorphosis that inventory management has underwent. We all have been followers of the lean policy where it was ‘just in time’ and we were looking at connecting and disconnecting as consumer shifts were witnessed, but now we’re seeing even that linearity in supply chain also is being challenged. Companies’ supply chains today are being judged on the basis of agility they showcase during tough changes, their adaptiveness to changes, and building quick response mechanism basis the need.  Another important factor highlights the inventory strategies that companies implement. Purely from manufacturing or demand fulfilment perspective, we are probably more rapidly than ever embracing the visibility of digital platforms, which used to be an uncommon phenomenon earlier. What perhaps was a 5-year plan was achieved

in 5 months. Increasing visibility is helping companies in redefining their value chain. In this VUCA world, it’s extremely challenging to estimate the best-case scenario for businesses, in my view generically. In a nutshell, today inventories for an organization are divergent upon organization to organization. They are revamping and reimagining supply chains. They are looking at whether inventory consolidation can possibly help them. I think organizations post-Covid are still looking at what kind of inventories they need to carry whether it needs to be scattered or consolidated at one node point in time, how they would react to each of those multi-channel configurations, which has sprung due to an e-commerce boom. During lockdowns, we got quick response order fulfilment initiatives. Organizations are still trying to carry on with the conventional, I say with respect “statists” practices alongside finding newer and innovative ways to inventory management to serve customers’ ever-growing demands. Perhaps new alignments might resultantly appear.

In the pre-Covid era, inventory was oft being regarded as a necessary evil and there used to a lot of focus on reducing inventories across the board. Now the scenario has completely changed. What’s your take on this?

Honestly, inventory is never bad, it just needs to be in planned & desired constant motion. Inventory was a subjectivity of

maintaining an optimum throughput by turnaround time. This has put constant pressure on supply chain managers to rapidly increase throughput and ensure that the inventory is actually being targeted, available to serve customers’ demand. A recent survey has brought this to fore where even the visibility for some 62% of the organizations are restricted only to tier I suppliers & difficult beyond for tier II or III suppliers. Forecast needs to be as robust matching to the demand lead generations and in equilibrium, however what has changed owing to the disruption has pushed the boundaries beyond it as well. Having said that, inventories are bulging up in certain cases, the move now as we have seen is towards “just in case”. It’s further being pressured on external circumstances, be it interconnecting nodes of transportation capabilities of organizations to fulfil demand through stocking locations “near shoring” as we see or decoupling from off shoring locations to ensure inventories are available when needed. If you look at the manufacturers, I can distinctly bring out an example about the semiconductor chip shortages. There was a sole source supplier, there was a strategic association with the dominating countries manufacturing the same. There was a struggle in terms of getting of the first lot to be picked up because everything was on hold. Sensing the problem early on, suppliers had developed a dashboard, which offered enhanced visibility into the system of not only the primary suppliers, but also tier II & III suppliers, predicting their inventory. Through this innovative

We need to starkly differentiate between ‘Doing Digital and Being Digital’.

Abhishek Joshi, Country Lead - Ag-Business & Supply Chains, Transform Rural India

offering, organizations were able to handhold and support as to what level of inventories they can possibly manage for them. Looking at the speed of the emerging demand, increasing visibility, reducing the volatility of inventory, reducing the stock-out situations, were the best bets that supply chain managers took and worked towards turning these challenges into advantages. Going forward, I think we are still in the process of settling down. Three years down the line, we’ll probably be back to the same sequence of what we are doing currently, but with far better digital capabilities to predict, manoeuvre the supply side ambiguities and more sharply attuned to changing complex demand patterns. The investments and learning from these experiences would draw much better integration, however the model certainly will not be the same what we are accustomed to in terms of operating presently.

What, according to you, are the best practices in supply chain? Which ones have you deployed in your firm?

I come from services side of supply chain. However, to respond, I think we need to starkly differentiate between “doing digital and being digital”. Over the last few years, we have seen large organizations getting into an integrated Network Enterprises, trying to achieve a mature stage of operations. But to my view, & as we have seen, the more you are tightly integrated, the more fragile you become. You need to look at multifunctional enterprise solutions where people, processes and the implemented technology are orchestrated in such a way that there is a synchronicity in your supply chain. Additionally, Human element has also got lot of traction post Covid. I think organizations really need to look at the predictive

and the prescriptive side of the digital technology. If you have already identified a black hole and you are confident that that a particular technology can help you increase visibility, then probably that’s the way to go for it. Increasing visibility necessarily but does not mean it by default shall translate to a multisynchronicity for your supply chains. And that’s where I say, these are two overlapping at a glance but different in practice adaptation. In order of priority as to where the organizations are on the digital models, first one essentially is any tool, technology or adaptation of any processes is to answer key elements of it, is it reinforcing? is it expanding? is it generating value for the customers? or is it taking you away from your goalpost as defined to your objectives?

Basis these insights, companies need to reimagine their entire supply chain. Second important aspect is to have a resilient supply chain, which is able to foretell the risks, anticipate those risks and then develop digital adaptation strategy, which essentially can respond to questions such as whether my risk mitigation is creating resilient supply chain or not. Resilience is to navigate & be quick to respond to both internal & external risks. Not that you can absorb how much and wait for tide to turn over. Next pillar is going to be about the people and the skilling part. People need to be at the centre of the strategy and drive the change. Organisations will need to invest in upskilling and reskilling their biggest assets – People. The next pillar is Sustainability. Going ahead, ESG norms are going to be more rigorous and inclusive. I am confident and very pleased to say in this well attended forum, that supply chain professionals are going to lead this ESG drive for every organisation. No other corporate function on its own will be in a situation to lead this agenda.

What is your advice to companies going forward in this digitalisation journey?

Organizations need to look inwards. Randomness, the velocity and the vulnerability have actually altered the way the supply chains were structured till today. We are into a very different Universe and a very different world now altogether. Earlier supply chains used to be determined by a mindful constant, as closely as one could predict. The VUCA world has brought in a big shift in the way supply chains have been functioning today. They are changing within the organisation on a six-monthly basis depending on the business requirements. You just cannot be sitting on your laurels basis what’s your supply chain strategy is or how you are implementing digitalisation in your operations and how integrated they are. Companies must reinvent themselves to stay ahead of their competitors and survive any foreseen situations coming their way. I think the organisations really need to be a little more cognizant of the fact of ensuring that they are continuously doing a stress test on the supply chains and be a little ahead of the curve in understanding that even my existing supply chain or what I probably am ahead to my mind, for might also change. The digital twin needs are now a more firm embedment than ever before. The collaborative supply chain models are here to stay, organizations will have to alter their strategies of going alone, they just can’t now. Partnerships have to be built, sustained driven from the top and pockets of operational excellence between peers on noncompeting aspects will also have to be strongly built in and digital innovations, tools and technologies can lend a hand if boundaries are wilfully being expanded.

Companies must reinvent themselves to stay ahead of their competitors and survive any foreseen situations coming their way. Organisations really need to be cognizant of the fact of ensuring that they are continuously doing a stress test on the supply chains. The digital twin needs are now a more firm embedments than ever before.

Sahil Saini, Senior Director – Enterprise Sales, PandoCorp

Is there a shift from culture to transformation or transformation is a new culture now in the organization?

Whether it’s the culture driving digitization or vice versa, I think today’s culture is nothing but agility or the velocity of innovation we’ve seen around decades back. E-commerce, for instance, we wouldn’t have even heard of the name around a decade back, especially in India and now we are living in an era where brands are defined by their competent supply chains, for example, there would have not been a Blinkit today if people were not even thinking that a product can be delivered in 10 minutes. It’s not that only the new brands are driving this shift, even traditional brands are staying in tune with the changing times. When there is a new product launch or a new vertical launch, the first thing that a sales team does is align the strategy with the supply chain. This is to ensure that we are the fastest in whatever we are envisioning to bring to the market.

The Go-To-Market strategy has been the biggest catalyst of this transformation. For this to happen, the supply chain needs to be robust enough to meet the unforeseen or anticipated demand variabilities. I think even the adoption of change has become faster now. People are expecting the supply side to be more agile and faster to innovation because they can adapt to it quite quickly as well. That’s the key cultural difference to me.

How is AI and now openAI changing the face of logistics and

supply chain management (SCM)?

I can surely say that half the people today wouldn’t realize that we are already amid the transformative landscape of Industry 5.0. The speed of innovation is probably the next big thing, which is nothing new from an era when libraries used to be completely manual. The librarian would help us to pick up a particular book from the right shelf with the use of a manual record. The biggest change has come in the way humans think about technology and analyze data. It’s simply technology replicating that in some sense and then that technology helping itself to grow at a speed which humans would have grown. It’s simply a direct overlay of human thinking on technology, the way data can be analyzed and to put it on more impactful things. Without that, I think nothing else would work out. In India, we are trying to solve a different set of problems in some sense. We have a variety of problems to solve with the underlying infrastructure and even though manpower is there to support it, unless technology comes in and with open AI changing the technology game, playing the scale game of the people who are supporting it, it’s not going to work. It has a pivotal role to play as we move ahead.

How are the upcoming companies or startups shaping up?

Let me respond to this question with an interesting meeting that I had with a global Supply Chain head of a CPG company. During the conversation, he categorically mentioned that about two

decades ago, he had this idea of having a unified platform to solve anything related to supply chain. At that time, he did try and approach one of the largest companies who was on a mission to solve the maze. There’s a reason why West is fundamentally bent towards a points solution sort of approach because the innovation has happened with time with very biopic view on some of those problems to solve and that’s exactly what the startups today are trying to bring the change. India is at a stage where all the Indian brands are expanding globally from here, a phenomenon peculiar with the Western companies. They realized that how important it is to have that core infrastructure ready, imagine one company having 100 SKUs and at least five go-to-market channels. Now imagine a conglomerate having six business verticals with each having 100 SKUs to do the same thing. That’s where the problem arises and that’s what startups are now trying to solve from digital transformation perspective and they are offering an end-to-end spectrum of things that companies are looking for. This transformative landscape also offers companies a great head start to be ready for the big bang technology changes to be embraced in future such as AI or ML. companies need to understand that if their value chain is disjoint, then each of the disconnected parts can have leakages of their own and in today’s competition, no one can afford leakages anymore.

Is there a way to make students deconstruct the most complicated

The Go-To-Market strategy has been the biggest catalyst of transformation.

technologies as if we probably are trying to understand the ABCs of technology?

I think India has been that land of innovation much before even the word patents existed, and we have been doing it very frugally. We’ve heard a lot about companies like 3M who have dedicated

hours in the week to just innovate, be it a process or a product and they’ve come up with some fantastic ideas. I know a couple of Indian traditional organizations that ensure that there is a rotation of roles of everyone, just to have a different perspective to solve things. There was a large manufacturing company who had

transferred their senior sales personnel to their Horticulture Department of all the properties for one month and the kind of innovation it brought in to reduce the overall expenses on property management was simply remarkable.

Rajesh Kaushik,

Please share your insights on how data & technology can add value to a supply chain function. There are a few aspects that need to be considered while implementing digitalisation strategy in operations. Every organization is looking at optimising cost and improving the speed to market. The implementation of digitalization from upstream to downstream holds the key. I was part of implementation of improving the speed to reach our suppliers in terms of implementation of SAP ARIBA, from very simple models of sending the PO, getting the purchase order, and then working on the purchase order with the vendors, making sure that the entire upstream supply chain gets strengthened by implementation of SAP ARIBA. Through such exercise, we were able to reduce TAT by 20% in terms of sending the purchase order, acknowledgment of the purchase order, dispatch of products and then finally receive that product to the plant. Similarly for boosting supply chain, we implemented some of the aspects such as forecast using data and technology, and worked around

responding to questions such as is the forecast very close to the market or not, what are the constraints and then getting that information from the system using that information in S&OP to get the right integration and then work on the working capital management, ensuring that the product reaches to the customers using the optimum transportation route on time. Another very important aspect that technology helps in enhancing customer traction & satisfaction is the seamless communication where they get real-time update on the whereabouts of their products.

What are the barriers that companies typically face in this digitization journey?

In my previous organization, earlier we were operating with 25 warehouses across the country. The question we asked ourselves was, ‘Are we really efficient with 25 warehouses? The objective was to find out the optimum number of warehouses required in India to serve all the customers in timely manner.

In doing this exercise, we realised that our warehouses were not optimally

networked as to where they should be located to reach the customers faster. We performed the optimisation study as to where are our customers based, in which state, what is the logistics infrastructure available to reach the customers and then using some of the statistical inputs alongside supply chain planning, we were able to optimise and come to a conclusion that nine warehouses across the strategic locations will be able to better serve our customers instead of 25 warehouses, which have been located in a asymmetric fashion. This restructuring helped us achieve cost saving to the tune of 10% and also reduce the turnaround time by 60%. In turn, the chances of the business getting on a growth track also improve multifold, which is an intangible gain which we may not be able to quantify. Going one step further, we also decided the location of our central distribution center, our satellite distribution centers, the amount of inventory to be stored, our inventory quality ratio, etc. instead of increasing the inventory, most organisations have started focusing on searching alternate reliable vendor bases who can also cater to demands during

The implementation of digitalization from upstream to downstream holds the key.

Senior Supply Chain Professional

volatile and uncertain times.

The biggest barrier during the entire digitalisation journey was Change Management. When we started implementing digitalisation. We not only faced internal resistance, but our external partners such as vendors also were reluctant to this change. Through a round of meetings, we had to convince them and make them understand the impact that digitalisation would bring for everyone. The moment, we were able

to get a buy-in from all the stakeholders, the adaption rate got increased to 85%, which was earlier 40-45%. We were able to bring 80% of our vendor under SAP ARIBA platform.

What is your advice to companies going forward in this digitalisation journey?

Supply chain is a revenue generator now and had become a competitive advantage. Supply chain owns 50 – 55%

of the entire cost of goods sold. As we focus more on digitalization, which will increase the speed and reduce our cost. Tomorrow the organizations will start competing among themselves on the basis of a competent supply chain. Early adapters will have an edge over others in this evolutionary journey.

We would like to know from you supply chain transformation landscape you have witnessed over the years...

The whole ecosystem of the world is changing very fast. India became globalized more than two decades back and since then the organizations have been working with the attitude of an MNC culture. Added to that, if we see the pre and post covid transition, the speed of change has been too steep. Giving example of the telecom sector where I am involved extensively, the rate of transition from 1G to 2G to 3G to 4G and now 5G has been reducing day by day. As a matter of fact, we are not even used to the transitional changes that 5G has to offer, researchers have already given us the possible launch period for 6G and 7G. That’s how sharp the transition has

been shaping up. The government is also placing immense thrust on the technology implementation to drive growth. There have been various remarkable technological initiatives that have been achieved by the government in a highly seamless manner even during the Covid period, for example, implementation of FASTag technology at the National Highways across the country, or for that matter, the COVID dashboard. Such innovations have made everyone’s lives hassle-free and offered the government bodies a faster mechanism to deal with the crisis situation. FASTag, on the other hand, has brought in organized way of facilitating electronic toll collection across the country, thereby saving people’s time and efforts in the long run. UPI transaction have made e-commerce a hassle-free affair for consumers and

sellers alike. UPI payments are changing the way we send and receive money, reducing dependence on bank systems. It has simplified transactions, made them more secure, and made them easier. The popularity of UPI payments is not just limited to big merchants, the winds of change have been brought by small merchants, even the vegetable vendors are more comfortable using this mode of payment, irrespective of the volume of transaction. While these are some of the consumeric front examples, if I talk about supply chains, each and every process has been enamoured by the mask of digitalization and has made the processes integrated with each other and have ensured greater transparency within each node of the value chain.

The government is placing immense thrust on technology implementation to drive growth.

Ramkesh Jangra, Head – Supply Chain - SCC, Ericsson

STATE OF LOGISTICS TECH: 2023

In an environment with higher demands from consumers and a constant push to innovate, the logistics industry is undergoing major changes. Recently released Pando-Kearney report throws spotlight on top 5 megatrends that are slated to drive the Indian logistics industry in the years to come. Excerpts…

LOGISTICS in India is one of the world’s largest industries, valued at about $215 billion and contributing to about 14% of the nation’s economy with an annual growth rate of 10.5%. The industry is comprised of transportation (60%), warehousing (25%), freight forwarding (10%), and value-added logistics (5%). However, the COVID-19 pandemic triggered significant disruptions in the corporate landscape, and the logistics industry has not remained outside of the purview of these disruptions.

With the combined effect of consumers’ ever-higher demands, strong growth in the direct-to-consumer (D2C) start-up ecosystem (accelerated by the pandemic), and the constant push to innovate and adopt new technologies, the logistics industry is undergoing major changes. For example, India’s road transportation industry was unorganized before, but now, it is shifting toward contactless operations and digitalization.

With quick commerce and deliver-ondemand expected to be a game-changer for the industry, it’s time for shippers to embrace technology to build the capabilities they need to stay in the game in this fast-paced world.

ON THE CUSP OF A TRANSFORMATION

Five mega trends are unfolding to create a new logistics industry in India:

Trend 1: The Growing Shift from Multichannel

to Omnichannel

Companies with omnichannel strategies retain around 89% of their customers compared with the 33% that companies retain when using single or multichannel fulfillment. Customer emphasis on flexibility and convenience has led to the need for multiple channels working in unison with a seamless exchange of information. Today, with the support of innovative new technologies, omnichannel services have become the

go-to option for many brands. Implications for logistics: Delivery is now originating from multiple fragmented pick-up points. Logistics suppliers must not only offer rapid and personalized services while being closer to the customer but also have sufficient capacity to meet scattered demand and a growing culture of immediacy. The advent of dark stores for super-fast fulfillment mandates that companies or logistics suppliers build a strong backend supporting unified order fulfillment with an agile supply chain.

Trend 2: A Greater Need for Information Transparency and Visibility

Seventy-three% of consumers say they will pay more if they are assured transparency, while 39% say they would switch to a new brand if they were promised greater clarity, transparency, and visibility. Now that consumers have a plethora of options, businesses must gain and maintain customer trust—the one-

L to R: Shreyas Panse (Kearney), Prakash Ramnath (Pando), Prashant Gupta (Kearney), Ashok Vasan (Pando), Parvesh Ghai (Pando), Shammi Dua (Kearney)

way gate for information transparency and visibility to customers. Customer transparency means honesty and integrity in all customer communications, keeping them informed by asking for feedback and notifying them of improvements to products and services and treating their personal data as sacred.

Implications for logistics: To maintain transparency and visibility for consumers, businesses must establish a transparent and visible supply chain, covering all areas of concern in both inbound and outbound logistics. In post-pandemic times, this has gained importance as buying patterns are changing in unpredictable ways, carrier capacity availability is dynamic, and the need to expedite shipments is regular and at an all-time high. Companies are investing in technology such as transportation management systems and supply chain control towers to enhance visibility across their value chain. Efficient order orchestration for expedited fulfilment through real-time visibility is gaining traction to be a key supply chain objective for logistics majors. Other benefits include better on-time case fill performance, better customer experience, reduced operational costs and efficiencies, carrier performance visibility, and visibility to vendor partners on their bills processing and payments.

Trend 3: Volatile Demand with recent Uncertainties

Demand has always been volatile, but the pandemic made it change even more rapidly and unpredictably, mostly because of customers’ changing preferences. Consumers have come to expect companies to not only provide a wider variety of products but also make them readily available for purchase and provide them at their doorstep the very next day. Implications for logistics. For years, logistics and business planning have been working in silos, but now in order to manage the volatile environment, they need to collaborate not only with each other but also with the customers. Analytics-led forecasting, optimization in warehouse management, and having a seamless platform laced with AI, machine learning, and other technologies have become important for

logistics partners to cater to the modern consumer’s needs.

Trend 4: Rising Cost Pressure for Manufacturers

Under the commodity inflationary scenario, input costs are at an all-time high, and this is putting tremendous cost pressure on manufacturers. Raising the prices of their goods and services to protect both gross and profit margins means taking a hit on their consumer base, which will quickly move to a competitor and thus affect the company’s P&L even more. Thus, they need to curtail their input costs wherever possible to keep the prices of the end products similar to current prices.

Implications for logistics: This rising cost pressure for manufacturers is leading to a need for more efficiency from logistics partners Logistics has to ensure that the total cost to serve is at an optimum for companies. The expectation of cost control extends beyond supply chain expenses to waste and pilferable expenses along with an opportunity loss because of out-of-stock situations. With the growing expectation for immediacy and transparency, maintaining an optimal cost is a major challenge for logistics. Collaborative execution by logistics players is paving the way for optimized fulfillment.

Trend 5: A growing focus on sustainability, especially decarbonization

Following India’s announcement of a net zero target, businesses have a pivotal role to play in the climate fight, helped by the growing customer and investor focus on sustainability as well as the increasing regulatory and disclosure requirements. Consumer research shows that consumers are willing to pay a premium as high as 60% for environmentally friendly products. This sentiment is most prevalent among Gen-Z and higher-income shoppers, who are quickly becoming the dominant consumer cohorts globally.

Implications for logistics: Typical fastmoving consumer goods (FMCG) companies have a 4 to 6% contribution of upstream and downstream

transportation and distribution in their scope 3 emissions. Thus, it is no surprise that transportation optimization has become one of the keys to reduce the carbon footprint. More organizations are pledging to reduce their scope 3 emissions, generated upstream and downstream of the value chain and those embodied in transport and distribution. Slashing planet-warming gases produced by transport and logistics will be instrumental in helping nations and corporations hit their climate goals.

More companies are looking at sustainable options to reduce the carbon footprint in logistics. Some measures to ensure that operations are sustainable and eco-friendly are collaborating with an EV fleet (using e-2W and e-3W for last-mile delivery), hyperlocal delivery from stores to eliminate large shipping fees, and distribution costs. EV logistics tech delivery start-ups such as Zyngo EV, and Zypp Electric handle end-toend last-mile deliveries—from stores to customers’ homes—with a variety of differentiated tech-enabled solutions, including the use of e-vehicles, service timing fixes, and IoT-enabled battery swapping infrastructure.

To remain successful and to thrive in the market, logistic players must address these new trends in the industry and provide solutions that are agile, flexible, simple, and competitively priced. It is important for Indian logistics players to invest in upgrading technologies to help their systems become smarter and more efficient, even if it means reinventing their processes. Companies can work on developing services that create demand rather than restricting themselves to meeting current demand. To do this, logistics companies will need to maintain strong relationships with customers and the market so that they can be at the forefront of shaping the future. With more disruption in technology on the horizon, industries should be ready, to anticipate how their capabilities need to evolve and how they can partner with new-age logistics companies.

(To download the full report please visit - https://pando.ai/resources/industryreports/state-of-logistics-tech-2023)

DRUG SUPPLY CHAIN SECURITY ACT: Improving the Integrity of Drug Distribution

The pharmaceutical supply chain is gearing up for the final deadline of the Drug Supply Chain Security Act (DSCSA). On November 27, 2023, pharmaceutical supply chain entities such as manufacturers, distributors, and pharmacies will be required to provide serialized data in transaction information when a product changes ownership. The main purpose of the Drug Supply Chain Security Act is to protect the US domestic supply chain for prescription drugs and to make sure that bad actors and counterfeit products are kept out. This special report highlights the nuances of the Act along with tracking India’s stance on the same and how are Indian companies and government bodies are slated to bring the transforming dynamics in drug distribution…

OVER the past several years, life sciences companies have faced mounting pressure from many directions, including increasing regulatory requirements, nonstop technological advances, and intense pricing pressure. And the unprecedented events of the past year only provided more reason to modernize compliance and elevate the value and partnerships within your organizations and with external stakeholders, highlighted a Deloitte study.

This is not all… the counterfeit issue is one of the biggest concerns pharma sector has been facing globally. As shocking as it may sound, the World Health Organization stated that approximately 11% of medications sold in developing countries are counterfeit, resulting in 144,000 additional deaths annually from imitation antibiotics and anti-malarial drugs alone. According to

the Drug Enforcement Administration, the US confiscated 9.5 million counterfeit pills from April 2020 to April 2021 – more than the previous two years combined. This is a likely driver of the 100,306 drug overdose deaths in the US over that time.

Lack of traceability in the drug supply chain is a problem for companies as much as it is for consumers and the Food and Drug Administration (FDA). The tracing of pharmaceutical drugs to improve the visibility throughout the pharmaceutical supply chain is not a new concept. Turkey introduced serialization requirements in 2010 and other markets such as China, South Korea have regulations in place. Since last decade, China has required all the supply chain partners involved in the drugs distribution to record information of individual drug units in a traceability system. The importance of drug traceability has been increasingly emphasized and mandated by several

countries across the world.

The European Union introduced their Falsified Medicine Directive (EUFMD) in February 2019 to digitally trace each unit of medicine and counter illicit drugs in the European market. Therefore, government and regulatory bodies are making drug traceability an integral part of supply chain to establish authenticity and mitigate the risk of counterfeit product through digital drug verification. The Drug Supply Chain Security Act (DSCSA), as defined by the FDA, “outlines steps to achieve interoperable, electronic tracing of products at the lot, unit, and now package level to identify and trace certain prescription drugs as they are distributed in the United States. This will enhance the FDA’s ability to help protect consumers from exposure to drugs that may be counterfeit, stolen, contaminated, or otherwise harmful. These requirements will also improve

detection and removal of potentially dangerous drugs from the drug supply chain to protect US consumers.”

Giving insights into the Act, Pallikkara Viswanathan, Life Member of IIMM Bangalore, elaborated, “The Drug Supply Chain Security Act is likely to improve the detection of the possibility of the potential spurious or counterfeit drugs at time of manufacturing and distribution. This will also act as the mechanism for the government and pharmaceutical companies to bring about a concerted drive in protecting the consumer’s health conditions in supply chain.”

“The quality of the drugs manufactured & distributed is considered to be important under the Drug Supply Chain Security Act, as it was intended to give more important authority to regulate, manufacture, the drugs, products, on creation of a particular pharmaceuticals’ product, to fit into the unique type of patient’s requirement, in order to use the particular process type of active pharmaceuticals ingredients, also the right type of tools, as this is likely to become necessary to change to the required medication, either it may be in the tablet form, or in the form of syrup, (liquid) which may be necessarily convenient for usage, better digestion, also to avoid the use of necessary non-essential ingredients, in order to avoid the drug or product, causing allergy among patients, as some of the medicines sometimes are likely to cause harm if taken incorrectly, as by this intake, the patient become exhaustive, (fatigue) also lead to ill-health, which necessarily becomes important to obtain the correct doses needed, with the correct prescription liable to be obtained in supply chain,” he highlighted.

The Drug Supply Chain Security Act requires a stature that the products shall not be received at the receiver’s end, from the manufactures, until a complete transactional report with complete accuracy, history of information, in inventory is reconciled at the receivers’ end, before the shipping of the products. The Act had given preference to Post Covid-19 in terms of regular lead time of four to six weeks longer period, ensuring short term resilience, with disruption in raw materials, active pharmaceuticals

ingredient, with worldwide shortage on Personal Protecting Equipment in supply chain.

Adding further, Viswanathan stated that the Drug Supply Chain Security Act was to come under implementation from November 27th 2023, with the consent of the pharmaceutical manufacturing organisations and the government in order to include the unit level serial number into the transaction, the information of the prescription of drugs, products, also be commendable, to exchange data, electronically among the government and pharmaceutical organisations within the country.

“The Drug Supply Chain Security Act is envisioned to strengthen the security of the drug manufacturing & distribution, explore the current state of pharmaceutical in the supply chain, to add to the controls, such as tracking & traceability of the systems, feedback from customer, with Drug Controller of India working with local drug authorities, government and pharmaceuticals companies with a view to ensure patient safety. If the need arises, samples can be seized for further investigation and necessary action can be taken,” Viswanathan added.

What DSCSA Requirements are Coming into Effect in 2022-2023?

The pharmaceutical supply chain has had nearly 10 years to prepare for the full implementation of the DSCSA, but many stakeholders are still taking steps to comply with the final phase. The final phase is currently underway with penalties and fines beginning

Source: VISIOTT Technologie GmbH

November 27, 2023. At this point, the whole pharmaceutical supply chain will be required to ensure the interoperable, electronic tracing of products at the unit level.

Manufacturers, wholesalers, dispensers and other stakeholders won’t be permitted to continue operating within the supply chain unless they meet the following FDA requirements.

Interoperable exchange: Trading partners must exchange transaction information (TI) and statements in a secure, electronic format with the use of a product identifier (PI) at the unit level.

Interoperable verification: Partners are required to verify the unit level PI interoperably and electronically and validate shipments.

Interoperable tracing: Serialization, or unit-level traceability, is mandatory. Every item must be able to be tracked throughout the supply chain. Every PI must include an expiration date, lot number and standardized numerical identifier.

Together, these three requirements will make it easier to verify the legitimacy of a drug and ensure counterfeit medicines don’t enter the market.

VERIFICATION ROUTER SERVICES (VRS) – YEAR 2023

On September 24, 2019, FDA published the Wholesale Distributor Verification Requirement for Saleable Returned Drug Product—Compliance Policy. This

guidance addresses the readiness of wholesale distributors to comply with the requirement to verify the product identifier upon receipt of a returned product that the wholesale distributor intends to further distribute under section 582(c)(4)(D) of the FD&C Act. The requirement under section 582(c) (4)(D) of the FD&C Act for wholesale distributors to verify saleable returned products prior to redistribution.

DSCSA requires trading partners to exchange drug product tracing information when they take ownership of drugs, resulting in a tracing record that FDA and others can use to investigate suspect and illegitimate drugs. Under this act, wholesale distributors must have systems in place that will enable them to verify the product identifier, including the standardized numerical identifier, on each sealed homogeneous case of saleable returned product, or, if such product is not in a sealed homogeneous case, on each package of saleable returned product. A saleable returned product may not be further distributed by wholesaler/ distributor until the product identifier is verified. The product should be managed as suspect product and keep as quarantine stock if the product identifier is not successfully verified.

It’s estimated that approximately 2-4% of prescription drugs in the market are saleable returns. VRS will allow these units to be resold in a timely and secure manner while maintaining DSCSA traceability requirements.

The emerging barcode programme for domestic medicines represents a turning point for India in its battle against counterfeit variants. After several years of planning, the Ministry of Health and Family Welfare (MoHFW) has now issued a set of draft guidelines on how the pharmaceutical industry should proceed. The benefit to both government and the citizenry is immense if a national anti-counterfeiting programme is well constructed and then successfully deployed. Often overlooked in the creation of such regulatory mandates is the interest of the third pivotal stakeholder — the pharmaceutical industry. The assumption is that it will simply be a compliant participant because the laws shall compel them to do so. I reject that coercive approach to governance and instead believe that industry’s enthusiastic acceptance is essential to both engagement and sustenance.

INDIA’S STANCE

With industry and governments worldwide realising the importance of implementing product serialization, it becomes mandatory for all entities within the supply chain to comply with federal and/or state legislation of the countries in which they operate.

As stated in one of Control Print blogs, “Pharmaceutical companies must deal with challenges originating from supply chain security lapses (resulting in theft, diversion, and product recalls), counterfeiting and stringent regulations. In addition to unsettling safety concerns, these challenges also harm the industry’s health by adversely affecting profits, brand credibility and research initiatives.”

“India has been a major hub for the production and export of generic drugs for several decades. However, this has also made it vulnerable to the production and distribution of counterfeit drugs. Counterfeit drugs not only pose a threat to public health but also undermine the credibility of the Indian pharmaceutical industry,” elaborated Anubha Dixit, Founder & CEO, Tongadive. To combat this issue, “The Indian Government has put in place several regulations and measures. It has established the National Medical Products Anti-Counterfeiting Taskforce, which is responsible for coordinating efforts between various stakeholders to combat the production and distribution of counterfeit drugs. In addition to this, the government has mandated the use of barcodes on drug packages to enable

track and trace of drugs throughout the supply chain. This is aimed at reducing the scope for counterfeit drugs to enter the supply chain and making it easier to detect and remove them,” she added.

Despite these measures, the problem of counterfeit drugs continues to persist in India. According to a report by the World Health Organization (WHO), approximately one in ten medical products in low and middleincome countries, including India, are substandard or falsified. This highlights the need for continued efforts and investment to strengthen the regulatory framework and ensure the safety of drugs in India.

On this front, Anubha Dixit, “The Drug Security Act, set to come into effect by the end of this year, is a significant development in India's pharmaceutical industry. The government is establishing a unified digital portal to bring together all stakeholders, including regulators, manufacturers, distributors, state-run departments, and procurement agencies. This integration aims to address India's fragmented regulatory system, which poses a challenge for procurers and quality assurance.”

The portal will integrate existing IT systems, including the Sugam portal of the Central Drugs Standard Control Organisation (CDSCO), all Central Drug Laboratories, state drug controllers, and manufacturers. However, the manufacturers' changes to the source of active pharmaceutical ingredients (APIs) or even excipients are not

Dr. Avi Chaudhuri Founder, The Kulinda Consortium

DRUG SUPPLY CHAIN SECURITY ACT TIMELINE

Prescription drug traceability

January 1, 2015

• Manufacturers and distributors very suspect and illegitimate product

• Transact only with authorized trading partners

• PDMA

• State preemtion

July 1, 2015

November 2013

DSCSA Enactment

**Dispensers

• FDA guidance

• Dispensers** receive TH/TI/TS* and maintain for six years

• Dispensers** respond to requests for information

necessarily reported to state regulators, which may pose a challenge to drug quality and patient safety. Many Indian pharmaceutical companies have already implemented serialization and track and trace systems to comply with the regulation, but small and mediumsized companies may face difficulties in investing in the necessary technology and infrastructure. The implementation of the CDSCO is likely to increase the cost of production for pharmaceutical companies, resulting in higher drug prices in India, according to Dixit.

Viswanathan highlighted that the Drug Supply Chain Security Act, among the Indian origin pharmaceutical organisations, will create an end-toend verification system to validate the legitimacy of the medicines & drugs to the ultimate level on the way down to the package level system, in order to funnel out illegal or counterfeit drugs

JNovember 27, 2018

• Manufacturers serialize product

• TH/TITS* electronic

November 27, 2019

• Wholesale Distributors transact only serialized product

• Returns verified

JNovember 27, 2020

All dispensers** must be complying with all verification requirements

JNovember 27, 2023

Complete Unit level traceablity

Source: VISIOTT Technologie GmbH

and bring about greater transparency in supply chain. Many companies including drug manufacturers, packaging material suppliers, companies on contractual sourcing or the distribution companies are likely to come under constant pressure in order to comply with the regulation set by the government and pharmaceuticals organisations. These requirements may be conditionally strict to maintain high standards to in enhancing quality of products and ultimately safety of patients.

In tune with these fast shaping up developments, on June 16, 2022, the Health Ministry issued a draft Rule introducing amendments to the Drugs Rules, 1945 making QR codes mandatory on the packaging of 300 life-saving drugs from May 1, 2023 to prevent the sale of counterfeit drugs. The draft Rule mandated manufacturers to print or affix barcode or QR code on

its primary packaging label or, in the case of inadequate space in primary package label, on the secondary package label that stores data or information legible with software application to facilitate authentication. The store data or information shall include the particulars including unique product identification code, proper and generic name of the drug, brand name, name and address of the manufacturers, batch number, date of manufacturing and date of expiry along with the manufacturing license number.

Earlier the industry body in its representation to the ministry on the implementation of barcode or QR code on the label of top 300 brands of drugs pointed out shortcomings of the QR code and challenges faced by the drug manufacturers while implementing it.

“Technically QR code is a machinereadable label, used to store data. It

Anubha Dixit, Founder & CEO,

In India, the government has introduced several initiatives to improve the traceability of the pharmaceutical supply chain. The Indian Government has mandated that all pharmaceutical products must carry a unique identification number (UIN) or a barcode, which will allow the products to be tracked and traced throughout the supply chain. The implementation of serialization and track & trace systems is also being driven by technological advancements, such as blockchain, which can provide an immutable record of the drug supply chain. Blockchain technology can help to improve the security and transparency of the supply chain by providing a decentralized and secure platform for tracking and tracing products.

Tongadive

TH/TI/TS* Transaction History / Information / Statement

- Under DSCSA, dispensers include retail pharmacies and hospital pharmacies; groups of chain pharmacies under common ownership and control; any person authorized by law to dispense or administer prescription drugs and affliated warehouses or distribution centers of such entities under common ownership or control.

The Drug Supply Chain Security Act, among the Indian origin pharmaceutical organisations, will create an endto-end verification system to validate the legitimacy of the medicines & drugs to the ultimate level on the way down to the package level system, in order to funnel out illegal or counterfeit drugs and bring about greater transparency in supply chain. Many companies including drug manufacturers, packaging material suppliers, companies on contractual sourcing or the distribution companies are likely to come under constant pressure in order to comply with the regulation set by the government and pharmaceuticals organisations. These requirements may be conditionally strict to maintain high standards to in enhancing quality of products and ultimately safety of patients.

is not a tool for anti-counterfeiting applications. Anybody can generate and print a QR code. Additionally, if QR/ barcodes are printed on the secondary packaging like saleable cartons, and the cartons are not destroyed at the trade/ retail level, it can lead to counterfeiting without the knowledge of the manufacturer/marketer. Excluding the unique product identification code, all other information is already available on the label of the medicinal products as per the requirements of Rule 96. Typically, the unique product identification code is GTIN (Global Trade Item Number) taken from GS1. Hence this QR code cannot be claimed as a mechanism to facilitate authentication. For the top 300 brands, the manufacturers use combi-packs, that is multiple strip/blisters in one carton. It will be difficult to have codes printed on such packs and this will further hamper the aggregation process. In case each blister has to be put in a mono carton, to accommodate the QR codes, then there is a loss of productivity in manufacturing and excessive cost of the mono carton as well as the QR code infrastructure are incurred. The draft rule does specify that in case of inadequate space in the primary package label, the secondary package label can facilitate authentication,” stated Indian Drug Manufacturers’ Association (IDMA).

Pointing out the limitation for implementation in aluminium trips/ blisters which is primary packaging of drugs, it said, “The readability of the QR code is difficult and grading is not possible due to reflection and a knurled surface of aluminium strips/blister strips.” The industry body further said “The top 300 brands list is dynamic and existing brands may slip out of the list

or new products may be added every month. Hence there should be a periodic annual revision, effective April 1.”

It emphasised the need for creation of a Central Portal where manufacturers can upload the printed codes batch wise so that if there are issues with counterfeits the manufacturers can be absolved of the necessity to confirm that the counterfeit drug is not manufactured by them. Besides this, it also suggested that once these authentication measures are implemented, further label changes should be frozen for the next 5 years as continuous changes in the label requirements can cause confusion among companies, doctors, trade, as well as patients.

On the technology adoption front, the Indian pharma industry has been investing in digitalization and automation to improve the efficiency and transparency of the supply chain. Technologies such as blockchain, artificial intelligence, and the Internet of Things are being explored to improve the security and traceability of the pharmaceutical supply chain. In addition to technological investments, the industry is also focusing on collaboration to improve the efficiency of the supply chain. The Indian government has launched several initiatives, such as the Production Linked Incentive (PLI) scheme, to encourage collaboration and investment in the pharmaceutical industry, Dixit highlighted.

TECH AT PLAY

A recent study revealed that the global healthcare supply chain management market was worth US$2.2 billion in the year 2021. The market is projected to grow at a CAGR of 13.2%, earning revenues of around US$5.3 billion by the

end of 2028. Global Healthcare Supply Chain Management Market is growing at a high CAGR because of the emergence of cloud-based and mobile-based solutions along with the adoption of GS1 system of standard in the healthcare industry globally. The increased need to improve the operational efficiency, reduce the operating costs, improve the profitability and quality are also driving the global healthcare supply chain management market.

As the global concern about drug diversions, theft, and counterfeiting increases, governments and regulators are pushing for new laws and regulations to prevent these problems. Pharma businesses should invest in a track and trace system to mitigate supply chain risks, satisfy regulatory requirements, and enhance their bottom line.

Gavi, the vaccine alliance, highlighted that getting healthcare products to everyone isn't always easy. Barriers range from stock running out or expiring, and challenges with identifying who needs vaccines or medicines, to drug counterfeiting, which can cost an estimated US$30.5 billion each year. This poses a significant problem for the health of people and economies. A new digital system to verify and trace vaccines and medicines aims to tackle these concerns.

The premise is simple: to make sure vaccines reliably get where they're needed, you need to know where they are now, and where they've come from. This visibility is critical for a health system's ability to plan – helping to avoid stockouts and waste. To tackle these issues, Gavi provided seed funding of US $5 million in 2020 to kick start development and initial testing of a tool to verify the authenticity for vaccines, tests and

Pallikkara Viswanathan, Life Member – IIMM Bangalore

medicines and other health products –the Traceability and Verification System (TRVST).

It's as simple as scanning a barcode using a computer or smartphone app. When a manufacturer is ready to ship a batch of health products, they'll attach a digital barcode, known as a GS1 barcode, to the product and upload the barcode and important information –like destination, product type and expiry date – to a global database, accessible to countries using the programme. The information contained within the unique serial number on the barcode makes it easier to identify the product as genuine and track its location through GPS and unique geo location numbers. The government in that country, or a health professional on the ground, can then scan a box of the health products, such as COVID-19 vaccines, and get verification from the system that they are genuine and trace them through the supply chain.

Talking about technological interventions, Viswanathan stated that under the Drug Supply Chain Security Act, manufacturers of pharmaceutical products, government, suppliers within the state or the country adhering to the contract are required to serialise the individual packages, with Quick Response codes, Radio Frequency Identification, maximum price details, connected to cloud computing, to provide with the electronic proof of origin, as per government regulations, in order to maintain high standard patent, safety, quality, innovation, regulations, which are intended to reduce counterfeiting & spurious drugs and ensure quality of every product that travels through the value added chain in supply chain.

Dixit reaffirmed that the industry in India is adopting new technologies to mitigate the counterfeit issue. One such technology is blockchain, which has the potential to provide a secure and transparent supply chain. Blockchain can help prevent counterfeit drugs from entering the supply chain by providing end-to-end traceability and transparency. It can also help to ensure that drugs are being transported and stored under proper conditions.

In addition to blockchain, other technologies such as artificial intelligence (AI) and the Internet of Things (IoT)

are also being explored by the industry in India to improve the security and traceability of the pharmaceutical supply chain. AI can be used to analyze data from various sources to detect patterns that indicate counterfeit products, while IoT can be used to monitor the temperature and humidity levels of drugs during transportation and storage.

The adoption of these technologies is still in its early stages in India. However, according to a report by Accenture, the adoption of blockchain technology in the Indian pharmaceutical industry is expected to grow significantly in the coming years. The report estimates that the market for blockchain-based solutions in the Indian pharmaceutical industry will reach $200 million by 2025. Overall, the industry in India is recognizing the importance of adopting new technologies to mitigate the counterfeit issue and is investing in solutions that can improve the security and traceability of the pharmaceutical supply chain.

Dr Avi Chaudhuri, Founder, The Kulinda Consortium, highlighted, “The emerging barcode programme for domestic medicines represents a turning point for India in its battle against counterfeit variants. After several years of planning, the Ministry of Health, and Family Welfare (MoHFW) has now issued a set of draft guidelines on how the pharmaceutical industry should proceed. The benefit to both government and the citizenry is immense if a national anti-counterfeiting programme is well constructed and then successfully deployed. Often overlooked in the creation of such regulatory mandates is the interest of the third pivotal stakeholder — the pharmaceutical industry. The assumption is that it will simply be a compliant participant because the laws shall compel them to do so. I reject that coercive approach to governance and instead believe that industry’s enthusiastic acceptance is essential to both engagement and sustenance.”

The static content of the proposed barcode on a given medicine can be easily replicated by anyone with intent, thereby creating the ultimate nightmare scenario — providing false reassurance to helpless consumers that the fake

medicine they happened to purchase was actually genuine. To reduce that possibility, each package barcode should contain a unique serial number. Although it could be surmised that the agency intended to launch a serialization program, the draft regulation does not contain explicit language in this regard and therefore industry is left with a regulatory mandate that lacks clarity. A strong case was additionally made that India join other nations in ensuring that barcode content and format conform to recognized international standards to allow proper decipherability at the later reading stage by an empowered stakeholder.

According to Dr Chaudhuri, “The best-laid plans can get derailed in the absence of cost containment. India is a rising economic power, but it is also a fact that a large segment of the populace faces daily struggles in meeting life’s costs. Adding a further financial burden to that reality can be indefensible. And yet, the duty of protecting society against fake medicines makes for an equally compelling counter-argument, as now recognised by the Central Government.”

A ROADMAP FOR OPERATIONAL SUCCESS

Charting out the roadmap to success, Dr Chaudhuri offered insights into every single node of the value chain and ways to deal with the growing menace of counterfeits… A well-designed mass serialization programme can offer substantial protection. However, placing a unique number on a drug package is not a trivial task, compounded by the further challenge of ensuring seamless authentication outcomes. To ensure success, both drug companies and the MoHFW must be uncompromising in pledging that every saleable drug package covered under the mandate contains a readable barcoded, without exception or error.

DIRECT MARKING VERSUS LABEL APPLICATION

Placing a serialized barcode on each drug package can be undertaken in two ways — direct online coding or application of a coded label. Online coding is not new to the Indian pharmaceutical industry, where the practice has been undertaken

for a few years now for exported products. The cost factors here include procurement of high-resolution printers and vision systems to validate the print matter, both operationally integrated with online rejection systems.

Although ongoing operating cost is favourable with online coding, the economics of implementation and production impact also need to be considered. Brand owners must additionally ensure that vendor excellence is given the highest priority. Unlike India’s export serialization program, the MoHFW mandate is intended for the home market. Any deficiencies in print quality, data integration, or consumer authentication will reduce programme confidence and sully that brand owner’s public reputation. Companies taking the online coding approach should therefore

only recruit well-established solution providers with known technology prowess, a track record of implementation excellence, and commitment to ongoing support.

The second approach to serialization is to apply a barcoded label on the package. The deployment method here can involve online label printing and application. There are several excellent vendors that provide such print-andapply machinery. A significant advantage to this approach is that the drug package is endowed with a visually salient and identifiable token for authentication. Whereas a barcode printed directly on the package is likely to become lost in the midst of all the other print matter, a security label would stand out visually and also provide the further advantage of identifying any attempts at removal

due to the standard practice of procuring tamper-evident labels.

Label application would have a similar initial cost compared to online coding, though ongoing cost would certainly be higher. There is however one type of drug package for which label application represents the only viable approach. And as it turns out, a small amendment by the MoHFW to barcode content would even make it highly economical.

THE CHALLENGE OF CODING BLISTER PACKS — REVISITED

Currently, the legal requirement for placing batch number and expiry date on blisters is met by an overprinting process with low-cost dot-matrix printers. The MoHFW requirement can be met by applying a small security label that would contain a barcode with just two data items (GTIN and serial number) and possible agency branding, as shown in the left panel of Figure 1. It is not necessary for the barcode to contain additional content that will in any case be directly printed online by way of the dotmatrix printers, informed Dr Chaudhuri.

He further elucidated that label application on blister packs would offer several key advantages. The first is that brand owners can procure pre-printed rolls of barcoded labels in advance from a reputable supplier. This is because the data contents in the barcode are not dependent on production because both GTINs and serial numbers are predetermined. Second, any requirements to associate batch details or other data proposed by the MoHFW, as spelled out in the draft regulations, can be undertaken during production by electronic means in the backend without having to deploy an expensive online printing setup. The associated data would then be instantly accessible during authentication. Brand owners would need to recruit a worthy solution provider to work in conjunction with the label supplier and ensure that printed barcodes are correctly associated with MoHFW-mandated data on the packaging line, and then certify proper commissioning for later authentication in the market.

The third advantage is the substantial savings in capital expenditure because there is no need to procure expensive

print-and-apply systems. All that is needed is an applicator on each packaging line because only pre-printed labels have to be affixed. The only other machinery requirement is a standard barcode reader to commission (activate) the coded packages going to market.

Medicines that are especially sensitive or vulnerable to counterfeiting should require an additional protective nonclonable feature, such as a fingerprinted token. The purpose of this additive is to guarantee that any copied labels will be instantly flagged as being suspect so that not even a single authentication event would yield a false outcome. A label supplier with access to such technology can embed and deliver this additional security layer on the pre-printed labels when needed, as shown in the right panel of Figure 1. Taken together, a pre-printed label application scheme would provide all of the solution requirements for India, with the additional advantage of offering the most cost-effective approach to blister coding.

THE FINAL REQUIREMENT FOR SUCCESS

“It is important to re-emphasize the critical importance for attaining the widest possible consumer acceptance, and with it, a strong and wilful reception by the public to undertake product authentication. Consumer

acceptance will unfold automatically if the government can make the case that it has created an excellent and reliable platform for protection, with rapid verification outcomes that provide on-the-spot assurance at the time of purchase. Many of the design elements outlined in these articles have focused on creating a programme with exactly that purpose,” asserted Dr Chaudhuri.

According to him, the key challenge for both government and industry is to maximize drug authentications once the programme has been launched. It is therefore critically important to undertake extensive efforts at public awareness and motivate the highest level of authentication. A concerted effort at public education will undoubtedly have substantial success. Consumer authentications have a multiplicative impact due to the vast number of inspections across the marketplace. And that in turn would serve not only to detect counterfeit drugs but also deter their appearance.”

Dixit concluded that the drug supply chain traceability angle is becoming increasingly important as regulators and stakeholders demand greater transparency and accountability in the pharmaceutical supply chain. The implementation of regulations such as the Drug Supply Chain Security Act (DSCSA) in the United States and the Falsified

Medicines Directive (FMD) in Europe is driving the adoption of serialization and track and trace systems globally.

“In India, the government has also introduced several initiatives to improve the traceability of the pharmaceutical supply chain. The Indian Government has mandated that all pharmaceutical products must carry a unique identification number (UIN) or a barcode, which will allow the products to be tracked and traced throughout the supply chain. The implementation of serialization and track & trace systems is also being driven by technological advancements, such as blockchain, which can provide an immutable record of the drug supply chain. Blockchain technology can help to improve the security and transparency of the supply chain by providing a decentralized and secure platform for tracking and tracing products,” she highlighted.

Looking ahead, the drug supply chain traceability angle is expected to become increasingly important, with regulators and stakeholders demanding greater transparency and accountability in the pharmaceutical supply chain. The adoption of serialization and track & trace systems is likely to become more widespread globally, with emerging markets such as India playing a critical role in the implementation of these systems.

the BMW Way Empower Sustainable Logistics

A truck, powered by green hydrogen, carrying components secured with ultralight packaging made from renewable raw materials, driving along optimal transport routes – with CO2 emissions close to zero: This is the vision of the future of logistics at the BMW Group – sustainable through innovation.

THE BMW Group has set itself a very clear milestone: to reduce CO2 emissions throughout a vehicle’s entire value chain, from resources to recycling, by 40% from 2019 levels by 2030. This ambitious goal requires closely examining a vehicle's entire lifecycle and identifying potential for lowering emissions. Logistics plays an important role in a vehicle's value chain. It seamlessly and precisely connects all players involved in the supply and production process via a variety of transport routes. CO2 emissions are produced throughout this process: on plant grounds (intralogistics), as a result of supplying plants with parts and from shipping the finished vehicles for worldwide distribution (upstream

and downstream transport logistics). Karl-Friedrich Koch is responsible for all logistics planning at the BMW Group: “Logistics is definitely a relevant lever for reducing the BMW Group’s environmental footprint, also when considering the entire vehicle lifecycle.”

Technological innovations are needed for low-emission drive trains and resource-efficient packaging for global logistics. In recent years, the BMW Group has launched a variety of activities in these areas. Research and pilot projects, collaborations with service providers in its partner network and the principle of open technology are all part of these efforts. The BMW iFACTORY. LEAN. GREEN. DIGITAL. provides an overarching strategic vision for the global

production network – and therefore also for logistics. Flexibility, efficiency, sustainability and digitalisation are key to all processes.

EFFICIENT AND INNOVATIVE TRANSPORT LOGISTICS

“Keeping distances between the supplier and the production plant as short as possible, as well as regional availability of alternative drive technologies and fuels are important decision criteria for designing sustainable logistics concepts – always taking the basic requirements for logistics into account: being able to deliver the right quantity of the right products in the right condition at the right cost at the right time to the right

place,” according to Karl Volker Blume, head of Material Control, Transport, Delivery Assurance.

Location plays a major role. In addition to local sourcing of materials, the “production follows the market” principle also applies. Ideally, the production site should be located close to where customers for the finished vehicles are found. Wherever possible, longer transport journeys to supply plants and the markets should be carried out by rail, with overseas transport by sea. Trucks will remain a relevant aspect of overland transport in the future. For short distances within plant grounds or between plants located close to one another, a (still small) percentage of the trucks used today are already powered by sustainable drive trains, including pure electric motors. This is already being realised to a limited extent at Plants Munich, Landshut, Dingolfing, Spartanburg in the US and Shenyang in China. Second-generation biofuel is also being piloted for both road transportation and sea freight. The fuel is made from residual and waste materials and therefore not in competition with the food industry,

Eugen Schantini, head of global vehicle distribution, underlines: “For transporting finished vehicles, we choose the most efficient method of transport with the best-possible use of capacity and technologies that reduce CO2 emissions – across all modes of transport. In this way, we are shaping the transformation of the logistics sector together with our transport service providers.”

GREEN HYDROGEN AS THE FUEL OF THE FUTURE

Since the transport of goods will remain unavoidable in the future, using innovative, sustainable drive technologies for long distances is a central task. To this end, the BMW Group adopts a technology-open approach. The BMW Group believes hydrogen has great potential as a fuel and is engaged in intensive research in this area. Hydrogen is a promising energy source, due, among other factors, to its short filling time, versatility and attractive range. Green hydrogen, produced from renewable energies, should be prioritised. Plant Leipzig is a trailblazer in this respect, pursuing two research projects. Sustainability is deeply rooted in the plant structure and taken into account during the planning stage.

The aim of the “H2Haul” European research project is to develop and pilot electric fuel cell trucks. The scope of the German project includes two fuel cell trucks, which the BMW Group intends to use to transport goods between Plant Leipzig and Nuremberg. As the consortium leader of the second research project, “HyCET”, the BMW Group is directing development and testing of trucks with hydrogen combustion engines, with the aim of demonstrating their potential for transport logistics. The other issue for HyCET, alongside technology development, is the required infrastructure, such as publicly accessible hydrogen filling stations.

HYDROGEN: ALREADY STANDARD FOR

INTRALOGISTICS AT PLANT LEIPZIG

Hydrogen has played a major role in plant logistics for quite some time, especially at Plant Leipzig. With over 130 industrial trucks powered by fuel cells, the plant operates the largest fleet in Germany. Germany’s first indoor hydrogen filling station was set up on the grounds of Plant Leipzig, back in 2013, for refuelling forklift trucks and tugger trains used in intralogistics. There are five hydrogen filling stations on the plant grounds, the newest of which was just put into service and enables fully automated filling processes for the first time.

SUSTAINABLE, LIGHTWEIGHT PACKAGING LOGISTICS

Efficient transport logistics also includes sophisticated packaging logistics. Weight, volume and material play a key role in saving resources. Efficient recycling, reducing the amount of disposable packaging, using innovative packaging materials and space-saving lightweight packaging are all factors that can bring these numbers down. The BMW Group is working closely here with its supplier network and can track the impact of individual initiatives using a CO2 calculator. One of the criteria for selecting container suppliers, in consultation with materials purchasing, is availability of alternative fuels.

WHAT RECYCLED MATERIAL CAN DO

With increased recycling to reduce the use of resources, packaging logistics can

contribute to implementation of the strategic vision of the BMW iFACTORY and help realise the principles of the circular economy in the best possible way, initially at European plants. It is already having an effect: In 2022, the recycling rate, which measures the use of recycled plastics, was increased from around 20% to over 35% in new logistics contracts for reusable packaging. The use of recycled material for so-called EPP packaging is particularly promising. EPP, which stands for Expanded Polypropylene, is suitable for use as a malleable and adaptable packaging material, especially for components with delicate surfaces. The percentage of recycled material in newly-developed EPP packaging is already at 25% and avoids almost 280 tonnes of CO2 per year. The aim is to continue to expand the amount of secondary material used in packaging. Initial pilot runs with packaging made of 100% recycled material are already underway. The use of new large-load carriers has proved even more effective. Collapsible plastic containers made from over 90% recycled material will be used instead of steel lattice boxes from 2023 onwards. 15,000 of these innovative

containers, when empty and collapsed, not only save space, but also reduce CO2 by about 3,000 tonnes per year. Since this year, the BMW Group has also eliminated the protective film previously used when transporting vehicles. This significant reduction in plastic waste from in-house production and at retail partners will avoid about another 1,400 tonnes of CO2 emissions per year.

Packaging logistics opens up a whole range of future applications. There is still a lot of research to be done into the use of bio-based materials – but the possibilities are endless. The long-term goal of packaging logistics is to switch completely to alternative, resourceefficient raw materials (e.g. renewable materials).

LOGISTICS: CIRCULAR ECONOMY MAKES TRANSFORMATION ESSENTIAL

Karl-Friedrich Koch summarises: “With its focus on transport, packaging and intralogistics, logistics has huge potential to make a valuable contribution to the BMW Group’s sustainability goals. Carbon-neutral and low-emission drive

trains, resource-efficient packaging materials, sustainable and resilient global supply chains (“local for local”) and well-organised transportation are the key levers.”

The principle of sustainability that is enshrined in all areas of the BMW Group has also set a fundamental transformation in motion within logistics. Going forward, the growing importance of the circular economy will be a driving force for this change process. End-of-life vehicles will be used much more as a source of highquality secondary raw materials that can be fed back into the raw materials cycle in sophisticated ways. These are challenges that not only demand new infrastructures, but also the courage to innovate – and, in many areas, become pioneers.

Source: BMW Group