CELERITY SUPPLY CHAIN TRIBE DECEMBER 2022

These are special times

Dear Readers,

2022 has been an interesting year. Covid-19 has been receding in India. As most of us started joining back offices physically, moonlighting and the gig economy were the new buzzwords. While moonlighting has been a cause for concern, the gig economy is expected to grow at a CAGR of 17% globally.

5G is being rolled out aggressively. 5G connectivity means a speed which is 20 times faster than 4G and lower latency. Implications for logistics technology companies driving real time data delivery and visibility is huge. The mega speed of 5G will help to connect more users, lower the lag time, and provide coverage in larger areas. Technology will get smarter, faster, and more connected than ever.

Metaverse is here to stay and slated to become the Oxford Word of The Year 2022. According to a new Deloitte report, awareness about metaverse in India is at 80 per cent - higher than the world average. The technologies in Metaverse have been around for a few years now – AI, ML, digital twins – these technologies are now maturing, and their increased usage is set to change the way supply chains work.

While Science & Technology is galloping at 5G speeds, the Government of India is pushing ‘ESG for Atmanirbhar Bharat’ very aggressively to ensure that India is in line with the global compliance norms. Securities and Exchange Board of India introduced new requirements for sustainability reporting called Business Responsibility and Sustainability Report (BRSR). It is applicable to the top 1,000 listed entities by mar-cap, and BRSR reporting will become mandatory from FY2022–23.

With one more month to go before we bid adieu to 2022, here’s wishing you all a Merry Christmas, and Happy Holidays, we will see you in 2023.

Charulata Bansal

Publisher

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

Published by Charulata Bansal on behalf of Celerity India Marketing Services

Edited by: Prerna Lodaya • e-mail: prerna.lodaya@celerityin.com

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Logistics Partner: Blue Dart Express Limited

14 | National Logistics Policy – The REFORMIST AGENDA

Warehousing Association of India (WAI) recently hosted a conference on National Logistics Policy (NLP): The Road Ahead for Integrated Best-In-Class Infrastructure Development. With Celerity as the content and media partner, this power-packed conference brought together the who’s who from the industry – policy makers, academia, consultants, and the industry stakeholders to discuss and dwell upon the changing landscape of warehousing in the country and the role that the National Logistics Policy (NLP) is slated to play. An insightful report, brought together by WAI and EY laid strong thrust on the policy imperatives needed to strengthen the overall warehousing landscape in the country and enhance ease of doing warehousing business in India. Here are snippets of key recommendations made to bolster warehousing growth along with the stimulating insights from the visionaries…

PERSPECTIVE

Emerging Trends in Procurement & Sourcing – Setting the Priorities Right

The panel discussion on Emerging Trends in Procurement & Sourcing offered impactful strategies as to how CPOs are working to optimise costs, enhance supplier performance while proactively managing risk and building resilience into their supply networks.

Term Wise Planning – Accountability & Solution Horizon

To sustain & succeed, companies MUST define planning horizons that match the pace of the business and set up regular review meetings to support each planning cycle, writes Anirudh Mendiratta, Growth Head – Dealer Retail Lending, CARS24…

Contract Logistics – Challenges and Opportunities

The panel discussion, hosted on the sidelines of the Celerity Supply Chain Tribe Conference & Awards, discussed the competencies and approach required by Contract Logistics companies to support Industry 4.0. Excerpts…

RECAP

THE YEAR THAT WAS 2022

Here we recapture some of the most captivating insights of industry veterans that will kickstart your Year 2023 perfectly…

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Editor: Prerna Lodaya

Emerging Trends in Procurement & Sourcing PRIORITIES RIGHT Setting

Global business disruptions have offered immense opportunities for procurement leaders to refocus on supporting critical business operations and supplier relationships, pivot towards cost reduction, and supply assurance. In these fast-changing times, companies need to remember that it pays to build resilient supplier relationships that can stand the test of time. This is where a robust procurement strategy comes to fore. A Gartner study has aptly highlighted that supply chain sourcing and procurement leaders must move beyond shortterm cost management to leverage supplier capabilities to their maximum advantage in a structured and segmented fashion. This involves aligning supply chain sourcing strategies, driving stakeholder engagement, and setting & communicating the right metrics internally and externally to drive the right behaviour. The panel discussion on Emerging Trends in Procurement & Sourcing offered impactful strategies as to how CPOs are working to optimise costs, enhance supplier performance while proactively managing risk and building resilience into their supply networks. Excerpts…

How can sourcing teams work towards achieving sourcing optimisation opportunities when they are working on multi-country set up?

Krishna Barad, Partner / Customs & International Trade, BDO India: Sourcing optimisation is one of the best ways to reduce spending and increase the efficiency in the sourcing process. Sourcing optimisation will enable the companies to find the most cost-effective supplier

or carrier, given a set of resources, cost, quality or time restrictions, especially when operating in a multi-country setup. This will enable the companies to gain a competitive advantage in the global market and ensure timely delivery of the products to the ultimate consumers. The companies can adopt following key strategies to optimise sourcing:

• Perform supply market analysis to identify relevant suppliers which can be beneficial for the company

• Analyse current sourcing process, identify gaps and develop a robust strategy to determine ways to minimize costs and risks

• Maintaining effective supplier relationship

• Digitalization of sourcing process

• Logistics & Transportation costs

• Packing & innovative ideas of cargo consolidation

• Utilization of Free Trade Zones for warehouse operations

• Taxation – Duty Exemptions & Free Trade Agreements opportunities

What are the key aspects of sourcing when you choose your supplier as well as the country of sourcing? How do you look at the packing requirements or

the compliances during sourcing pharma ingredients or APIs?

Vickram Srivastava, Head of Planning – Global Supply Chain, Sun Pharma: Pharma and Procurement have a love hate relationship. Supply chain executives in pharma always complain as to how to source and where do we source from. India is the Pharmacy to the world. We are making almost about 40-45% of the generic drugs, which are consumed globally. Unfortunately, right now around 60-65% of our active ingredients are being sourced from outside India and a majority of it is coming from one geography – China. China has positioned itself as the factory to the world over the last 10-15 years. Pharma supply chain is like an elephant where things move at a slow pace. Over the last two decades, China has done a complete reversal of how the sourcing happens across the industry spectrum. Covid-19 pandemic had a lot to learn when it came to China being the sole supplier where everything came to a grinding halt. The Government of India, at that point of time, realised that we are very heavily dependent on a lot of sourcing elements. Capitalising on the untapped opportunities, the government has started offering

production linked incentives (PLIs) to incentivise vendors and suppliers to set up manufacturing units in India so that we can start sourcing locally. A lot of globalisation is now turning into localisation or deglobalisation, but as pharma is heavily regulated and very slow in terms of adopting any changes, it's not going to happen overnight, but the trend has definitely started because even if I talk about pre-pandemic, probably 3040% of Fortune 500 companies were already looking at China Plus strategy of sourcing. It's not just about where I'm sourcing from and who is my vendor, it's also about how I can partner with them and how I can bring that visibility into the supply chain.

What are the disruptive trends you have witnessed and imbibed in sourcing during the last few critical years?

Sandeep Pratap, Global Procurement Data Steward & Regional RM Lead - India, Asia & ASEANZ, UPL Ltd.:

Agrochemicals is probably the closest industry to pharma because we share the similar active ingredients (AIs) and have to abide by similar regulations. UPL, being the fifth largest agrochemical company,

we have a presence in more than 140 countries with manufacturing bases in more than 20 countries across the globe. The paradox of globalisation and localisation is very difficult to manage. When you are working in multiple geographies, you have to standardise the number of suppliers and limit the sourcing strategy to a few specific geographies. At the same time, you need to stay closer to your manufacturing location because of the logistical challenges.

How can companies keep a tab on changing regulatory compliance measures while sourcing from global partners?

Krishna Barad: In today’s era of industrialisation and cross-border trade, regulatory changes are one of the most challenging aspects to keep up with. Regulations relating to sourcing are constantly changing across the globe. However, for companies operating in a regulatory framework, it is now more than imperative to keep themselves updated about regulatory changes. Obviously, it is not easy to keep monitoring the constantly changing regulations, however, non-compliance of the same can pose a great threat to the companies. Few of the best worked strategies that companies can use to keep up with regulatory changes may include: • Keep a tab of regulatory changes by

monitoring website of government and regulatory bodies, attend conferences and events, deploy automated tools allowing to monitor compliances in real-time, etc.

• Build a strong internal compliance team to keep track of regulatory changes

• Appoint a consultant/ compliance officer providing regular updates on regulatory changes.

What initiatives have you taken to involve suppliers to build that longterm relationship?

Vickram Srivastava: ‘Conscious Collaboration’ – this, in my opinion, is the key mantra to bring suppliers onboard and treat them not just as your ‘vendors’ but business partners. This is especially true for pharma procurement strategy as we are often dependent on a single source. In today’s VUCA world, we have to rely on supplier relationships to ensure both parties provide and demand end-to-end supply chain visibility.

Amol Kulkarni, VP – Contracts & Procurement, Think Gas Distribution:

The basis of any relationship to be fruitful for long term is Trust. Building trust with your business partners is very important and for building the trust, you need to address their basic concerns on priority. The basic concerns of any vendor are to get Timely Decision from client, Necessary Information in transparent way and most importantly timely payments & its visibility. We have addressed all these aspects by way of improved & frequent way of Formal Communication, Business Partner Approach & Digital Invoice Management System. This has laid the foundation of Trust with our vendors and conducting a Business Partner Meet to provide an open platform for discussions, which has further built the strong bond of long-term relationship.

Sandeep Pratap: Long Term Relationship is highly overrated. We need to focus on Relationship as per nature of supplier and material. Absence of relationship is one of most underrated supplier

relationship strategy. That is how you can leverage the part of your spend base. We need to be very careful about what type of relationship we are choosing with our suppliers.

How can sourcing and procurement reap the benefit of digital transformation in any organization?

Krishna Barad: Digital transformation is entering every process of business and procurement is no exception. Few of the digital transformation taking place in procurement includes artificial intelligence (AI), robotics process automation, cloud computing, etc. Digital transformation in the procurement process can cut costs, save time, and better inform strategy and decisionmaking providing edge to businesses in the competitive world. Further, digital transformation can play a vital role in enhancing the relationship with the supplier and also an opportunity to resolve some of procurement’s biggest challenges, streamlining processes, driving value, and improving transparency. The government systems, in this regard, have also undergone significant digital advancements. Nowa-days, many governments across the globe are aggressively moving to the cloud to scale their services to support digital procurement initiatives. However, there is still a long way ahead for the government to bring in complete digitalisation.

Vickram Srivastava: Both digital transformation and digitisation are going to help procurement professionals going forward. AI/ML, blockchain, RPA are going to make the function faster, seamless, and transparent. Both Buyers and Suppliers are expected to benefit

going forward with the end-to-end visibility across systems that we expect digital transformation to drive into processes.

Tannistha Ganguly – Global Head, Warehouse Management, IT Delivery, Kimberly-Clark: Supplier risk management is one area, irrespective of the industry you are operating in, has got renewed attention from the stakeholders. When I look at the whole procurement process, implementing a solution is just one area. Let's say I'm just trying to make my P2P standardised and seamless, but I am not looking into the supplier risk management area, then the whole effort would go futile. I have seen in many companies that systems or digitisation efforts and investments are put in those silos and that is where the benefit of implementing a digital solution is not really achieved. One of the key focus areas at Kimberly Clark is endto-end procurement. We spent a good amount of time with external consultants and partners to understand the gaps in the whole procurement landscape. The process made us realise that we had deployed multiple tech systems catering to different procurement teams across the globe. Now we have moved out of this scattered landscape and have implemented one central platform. The second part that we are really focusing on is Data. We are trying to ensure the data flow within systems and that there is seamless communication between all the digital solutions, be it ERP or invoicing system or the financing system or the supplier data from external sources.

The word “next” is a term with endless potential. Leading procurement functions will become part of an organisation’s value stream and will be more influential in contributing to the overall business strategy, growth agenda and competitive advantage. Procurement leaders will be expanding their remit from a focus on cost leadership to enabling innovation, agility, and supply certainty.

There is a lot of data available even for procurement and there are companies or third-party vendors who provide the necessary data. The main challenge, as a procurement team, is to devise a strategy to use that data. This especially becomes critical when you have tier II & III suppliers, bringing them onto one platform and getting insights out of that data for decision making is the key.

Amol Kulkarni: This is the digital era and Digital Transformation is the future. Every organisation, in some or other way, is looking for imbibing the digital technology to drive its growth story. However, when it comes to Sourcing & Procurement, the reach of technology has been limited only to e-Procurement, Reverse Auctions and ERP. But the newer and available technologies like chatbots based on Artificial Intelligence Technologies like Machine Learning or Blockchain are really fascinating and will be used for applications like Vendor Registration, Information Flow Automation, etc. Also, the flow of information on Payments, which is the most concerned area of vendors, can also be digitised and transparency of information on payments can be achieved, which in turn, helps improve Trust by way of improved and reliable communication. We have already implemented the Digital Invoice Processing System and are exploring other possible & feasible systems as per business needs.

Sandeep Pratap: We have started focusing on Data Analytics when it comes to procurement. I believe procurement data is at a very nascent stage in many organisations. People think that just creating vendor codes and material codes does the work, but that’s not all. The scenario is even more complex in global organisations where you would find duplicate codes in different geographies, which would sometimes result in high inventory of same item in one geography and scarcity of the same material in another geography. Such irregularities can be efficiently managed with the help of analytics. We must understand that disruption is happening in every part of the world and at a very high speed. We must be familiar with our entire chain

of suppliers to keep our businesses least impacted by external factors.

Akshay Rana, Head - Caustic & HFO Procurement, Vedanta Ltd.: When you picture the future of work in supply chains, concepts such as robotics, Internet of Things (IoT), machine learning, 3D printing and blockchain probably come to mind. In the future, data will be continually cleansed and improved using machine learning techniques that leverage process outcomes to automatically identify and remedy data anomalies within systems. For example, the vendor master will be continually maintained using data from contracts as well as those used in pay runs. Similarly, maintenance work orders, which drive purchase orders, will be informed by the actual usage of materials in completed jobs. This will create a “virtual cycle of digital,” where data will continually improve, and organisations will mostly use machines for periodic data cleansing. The data captured from the Internet of Things (IoT) will enable real-time tracking and monitoring of outcomes through continuous feedback loops across assets. Asset-intensive industries will effectively link this data across the enterprise and connect it to suppliers, enabling touchless procurement in the next 24 months. This process will ultimately create an enhanced data platform to inform decision-making around spend and purchasing patterns,

catalogue content, supplier portfolios and contract fulfilment.

Supplier Relationship and Managing Supply Risk go hand in hand. What are the strategies deployed by you in the new environment and how are they different from the earlier strategies?

Vickram Srivastava: We need to be more ‘strategic’ than ‘transactional’ and start treating our vendors/suppliers more like our business partners. This will instill confidence and build a greater degree of trust and collaboration between both parties. This deep-rooted collaboration is important to mitigate demand and supply shocks we are seeing in current business paradigm. Also, near sourcing or localisation is an important lever we are seeing to manage supply chain risk and disruptions going forward.

Amol Kulkarni: In today’s times, if you don’t have the visibility of the entire value chain and the suppliers, for me, it is a sure shot recipe for disaster to happen because we are dealing with highly uncertain times and any unforeseen situation in any part of the world will definitely impact your business in some way. As a matter of fact, we were shocked to realise the impact of Ukraine-Russia war on our business because we only deal with domestic suppliers and there was no way it could have impacted our business. The moment we started backtracking the value chain, we realized that it was not even our immediate suppliers’ supplier that had a connect with the Ukraine supply chain pressures, it was the tertiary

We need to be more ‘strategic’ than ‘transactional’ and start treating our vendors/suppliers more like our business partners. This will instill confidence and build a greater degree of trust and collaboration between both parties. This deep-rooted collaboration is important to mitigate demand and supply shocks we are seeing in current business paradigm. Also, near sourcing or localisation is an important lever we are seeing to manage supply chain risk and disruptions going forward.

or the fourth link in the value chain, which was importing a very minute but a significant part of the product from Ukraine. For our dispensers, all the suppliers are based out of India. Their suppliers are also based out of India, but they are importing the steel tubing from China. Later, we realised that China is importing the specific grade of Steel –the molybdenum – from Ukraine. When we learned this, we started exploring the possible alternatives. To tell you the fact, there were no other options available, we had to suffer for that particular period. Later on, our Chinese suppliers managed the alternative option and the value chain started getting back on track. This essentially means that your supply chain is as strong as the weakest link of the chain. You have to first identify the links into the complete supply chain and then make the weakest link the strongest part. When we come to the weakest link, the most ignored aspect of the supply chain is the Supplier. Most of the time, organisations don’t pay attention to their side of the problems, be it financial or otherwise. The pandemic has offered us an opportunity to re-look at the importance of the supplier. In fact, when I started my career, procurement was just regarded as the support function, but now things have evolved. Time has come to work on strengthening supplier relationships to reap tangible gains.

Sandeep Pratap: We try to gauge the required relationship for each kind of material and use strategy, which suits our product mix.

What should be the future sourcing strategy to reduce the supply chain risk? What are the cost saving opportunities that can be leveraged?

Tannistha Ganguly: There is no onesize-fits-all strategy for supply chain risk management. It mainly depends on the industry in which the company operates, the strength and vision of the company, etc. However, one of the areas which most manufacturing companies are focusing on today is supply chain network diversification. What people have also referred to as the 'China +1 strategy', essentially means that we spread out and reach out to multiple

of the cost saving opportunities to be leveraged will be via strategic use of technology. Automation will be key in reducing inefficiencies in many process areas, reducing headcount or redeployment of the team in more productive work. The use of targeted solutions will help in bringing in business focus in the required areas. Some examples like eliminating maverick spending, building clear visibility into operational costs, supplier performance management etc., are places where use of correct technology can help reduce costs.

procurement sources located in multiple geographical locations. For procurement, it can mean multi-sourcing, nearshoring, strategic partnerships, strong supplier integration and integration with tier II & III suppliers or even further. Building visibility via supplier integration will be critical in managing supply chain risk in the procurement area.

One of the cost saving opportunities to be leveraged will be via strategic use of technology. Automation will be key in reducing inefficiencies in many process areas, reducing headcount or redeployment of the team in more productive work. The use of targeted solutions will help in bringing in business focus in the required areas. Some examples like eliminating maverick spending, building clear visibility into operational costs, supplier performance management etc., are places where use of correct technology can help reduce costs.

Vickram Srivastava: Sharing this with an example, imagine I have a vendor based in Germany and I am not able to source material from him because gas supplies from Russia have been stopped to Germany. My vendor is not able to run his factory. In today's VUCA world, as supply chain executives, we need to develop our alternate vendor base. We can build more inventory or collaborate further with our suppliers. Developing a new vendor in pharma is a very difficult, long, and expensive process and in many cases, we don't even have alternate vendor. Having a single source making more inventory is not really healthy for

the supply chain, so what it leaves us on the table for us is doing conscious collaboration with our suppliers, making them your business partners and not just treating them as suppliers. Sensing demand patterns early on and passing that on to your critical suppliers will eventually help companies stay resilient.

Amol Kulkarni: Whenever we are inducting a new supplier or developing any indigenous supplier in support of any foreign supplier, while we are definitely looking at the capabilities, but now-adays, we have also started analysing their ‘Cope-ability’. This ultimately helps us gauge his ability to cope under external pressures and the looming uncertainties. We also analyse their ESG goals because for us sustainability takes centerstage. Once we have that, then definitely we support the supplier and make him a business partner so that we both can prosper together. Also, when it comes to cost, the Total Cost of Ownership is evaluated on the basis of Life Cycle Cost and should not be evaluated in isolation. The aim should be to reduce the total cost of ownership and not just the price. Such efforts in cost reduction are also appreciated by Strategic Business Partners. Further, if you convey the merits of such a case very transparently to the Business Partners, they can provide meaningful inputs and food for thought so that the cost saving opportunities are identified and leveraged.

Sandeep Pratap: Considering all these complexities, we initiated ‘Project

One

Independence’ even before the onset of Covid-19, which is very similar to China + One strategy, which really helped us in staying resilient in the last few years. We started developing supply bases in each region and worked on a hybrid model where we make certain part of APIs in China and India and then the do the formulation very close to market. Procurement has played a critical role in this Delaying Differentiation strategy.

Akshay Rana: At Sterlite, we are hugely dependent on the crude derivative products, the way crude prices have gone up has adversely increased our input cost whereas the same cannot be passed on to the customers as we have a long-term contract in place with them. In lieu of such circumstances, we started working towards taking cost optimization measures towards the value engineering. To achieve that, we performed the benchmarking exercise for not only the base raw materials but the input materials also to produce our raw material. We implemented TCO based approach to bring in the factor of the scrap reduction and cost optimization. Next thing we focused on was the market intelligence, and AI, which helped us in getting timely data alerts. Earlier, we never used to talk to the supplier of our supplier, but now understanding the paucity of the situation and the impact that they have in the value chain, we started communicating with them. Essentially, we started doing backward integration of our supply chain. We started getting the materials at our own cost and negotiated with those suppliers’ suppliers. This helped us in curtailing cost pressures and build a sustainable relationship with our suppliers. Another major initiative was the value creation, which entailed that irrespective of the expensive material that we are buying, we tried to find ways to reduce cost, which can also be in form of the consumption reduction, efficiency improvement and reduction in lead time. One of the most important things in the current sourcing strategy that we have implemented is enhanced Localisation. Earlier we used to import around 70% of the raw material. Right now, we are just importing 38-40%, which we are attempting to bring down further. All these measures put together

have helped us mitigate risk and build the future supply chain.

What is that next procurement move that we could see in times to come?

Krishna Barad: Supply chain is one of the most crucial aspects for most of the businesses today. To keep up with the ever-increasing consumer demand, supply chain components should run as smoothly as possible. Procurement and sourcing trends are constantly changing across the globe. Few of the upcoming trends which may be noticed in procurement and sourcing process may include:

Digitalisation: Creating a digital network and IT-enabled solutions aligning shippers, forwarders, and third-party logistics on real-time basis to enable seamless procurement and sourcing functions

Transparency and visibility: Creating transparency and visibility of all our trading partners, including manufacturers, shippers, forwarders, and others to mitigate supply chain disruptions

Ethical and Sustainable sourcing: Adopting sustainable procurement and sourcing process and investment into Environmental, Social and Governance (ESG) to gain more in terms of profit and customer loyalty

Smart procurement: Adopting smart procurement process to cut down traditional procurement cost and achieve a competitive advantage in the market

Workforce globalisation: Handling complex procurement and sourcing processes will press the demand for workforce globalisation.

Tannistha Ganguly: Although there are many areas in which the procurement teams have started putting their focus on, one crucial area is specific targeted solutions for specific areas. Although the chief procurement processes will still be serviced via big software solutions such as ERPs, there are many specific business

problem areas, which will be increasingly serviced via start-up solutions, for example, solutions for spend analytics, tail spend management, category management, etc. There are big software solutions, which provide features/ solutions for these areas but most often, these solutions either don't fully meet the business needs or are too complex for a particular business model. On the other hand, we see many start-ups coming up with excellent solutions for specific areas within the S2P process, which are easy and fast to implement as well as userfriendly and pocket friendly. So, I feel the industry will become more open and acceptable to incorporate such targeted solutions in their digital journey.

Sandeep Pratap: The Focus will be on visibility to see beyond your tier I supplier. Tier II and Higher Tier supply can impact your entire business. Currently visibility is nearly absent.

Akshay Rana: The word “next” is a term with endless potential. Leading procurement functions will become part of an organisation’s value stream and will be more influential in contributing to the overall business strategy, growth agenda and competitive advantage. Procurement leaders will be expanding their remit from a focus on cost leadership to enabling innovation, agility, and supply certainty. It would take an extremely stubborn procurement team to plough ahead with business-as-usual after the disaster that was 2020. Thankfully, most teams have adjusted their ways of working, with some changes intended to last for the duration of the crisis, while others will be permanent. These include becoming faster, more flexible, and more responsive, Increasing the focus on risk, Shifting away from JIT (Just-in-Time). Procurement Team will increasingly leverage AI, the artificial intelligence revolution in procurement is well underway, but machine learning takes time. This means that AI that was as clever as a four-year-old in 2019 could be as smart as a 10-year-old by 2021 as it gets better and better at tasks and procurement team would be leveraging it.

Term Wise Planning ACCOUNTABILITY & SOLUTION HORIZON!

We often hear people saying, “In these fast changing horizons, it’s very challenging to plan even for short term horizon, leave aside long term planning.” While this may sound true for most of us, but at the same time, the importance of a carefully designed planning process, can’t be undermined in any circumstance, more so during such adverse times. To sustain & succeed, companies MUST define planning horizons that match the pace of the business and set up regular review meetings to support each planning cycle. This will not only strengthen your companies’ ability to scale up, but will keep People enthused to work up the ladder, writes Anirudh Mendiratta, Growth Head – Dealer Retail Lending, CARS24…

DAVID M COTE, former CEO of Honeywell, wrote, in his book, ‘Winning Now, Winning Later’, “It is never Short Term vs Long Term. You can always balance both & a business that is able to do it, inevitably succeeds.” There’s a lot of talk about Short Term – Mid Term – Long Term planning. An array of solutions from deploying brute force, putting in chasers (more manpower), adopting technology or upgrading your technology to solve for your business issues are advocated. But can business planning be boxed into simple categories?

Supply Chain, as a business function, needs immaculate planning with impeccable solution. But Rome was not built in a day & can never be. To achieve the holy grail, term wise planning with ‘Solution Horizon’ is key. Just like education & wealth creation, problem solving, too, is a journey. It all depends on where you are in the journey. If you are in the nascent stages of your business setup, you seek growth by optimising for the immediate term. Once you are in a matured phase, growth is driven by optimising for the long term. Let me try

and elaborate what a solution horizon means with respect to planning.

I remember during my MBA, without even realising, the answer to each Supply Chain problem statement was deploying ERP (funny that I now realise how important it is). An ERP, irrespective of deployment lead time, has the longest solution horizon as it will, in all likelihood, outlive the team that conceptualised & deployed it in the first place. The conceptualisation phase of the ERP will incorporate a lot of short horizon initiatives. Iterated over time, these solutions, albeit short lived, will form the bases for logical building blocks of the ERP.

Let me take an example to explain this further. Assume you want to create a simple ‘Order Management’ module for your product. While the basics of order processing like order placement, warehousing operations, shipping operations, invoicing & customer delivery operations are standard across, the customisations needed to address your product behaviour require a lot of initiatives that need to be tested over short periods of time.

Anirudh Mendiratta is an avid reader and a curious management thinker. He is also the recipient of Celerity SCT Under-30 awards. He did his Master’s in Supply Chain & Operations from NITIE. He summarises books on his YouTube channel while applying supply chain & operations principles for business problem solving.

If you are processing a gold ornament, the number of steps & checks during warehousing, shipping & customer handover journey will be very different from order processing of FMCG products like detergents or soap. Food & Beverage will need a very different SOP keeping in mind food handling guidelines for customer experience & safety. It is also essential to note here that the tools used for different solutions horizons vary significantly. Extending our example of the ERP, the smaller horizon initiatives might be led by cheaper, sometimes even patchy technology, that may not be a seamless solution for the user. It may be run on a host of shared sheets (Google Sheets) or manual checks over mails. Feedback or handshakes could be done over Google Forms that may not be scalable. But as you reach the ideal solution, you choose a robust technology stack, which is able to handle multiple users doing real-time information sharing with logical locks driving the flow. This will definitely come at a cost. For Example, the gold ornament warehousing operation may begin by the warehouse operator pushing mails or Google Forms with images of packaged condition of the goods to the shipping partner with a manual POD for handshake. This is a cumbersome process, but much needed for desired visibility in the value chain.

Once the feedback for tweaks in the handshake process are incorporated to drive discipline, it can be replicated as a module on the ERP or even an app with multiple access controlled user interfaces.

TAKING THE RIGHT STEP

It begins from brute force for process adoption, to adding people for process adherence, and then eventually getting technology for process standardisation & stabilisation. Does this mean your term wise plan with specific solutions identified over their tenure would help you achieve desired results? Maybe not! The most important driver for this approach, just like any other in business, is People. People, at various levels, in your organisation will drive different solution horizons. This brings us to ‘Accountability Horizon’.

As a business stakeholder, you don’t really get to choose the term for which you’re seeking a solution. It effectively depends on your Accountability horizon. The diagram below illustrates my take on this.

If you’re in the Lower Management, in all likelihood, you are chasing daily/ weekly targets. Here, you can only optimise for the short term. At best, stretch to Mid-term but that won’t really help your cause as you are measured on daily/weekly targets. Brute force is the

best fit for this. Establish a process, follow it diligently & make sure you make others around you stick to the same. If you are a city in-charge for warehouse operations for the gold ornament org, you only optimise for dispatch turnaround based on your volumes, so that you don’t miss out on promised timelines. Your localised processes are created for your own warehouse team. This process will have to be followed for every order received. You may penalise the deviations. This is solving by Brute Force.

If you are in the Middle Management, your accountability horizon shifts to a monthly/quarterly cycle. You have a specific type of comfort that the previous cohort did not have. A couple of weeks of performance dip for a brighter quarter can help your case. Here, you make sure you deploy brute force to sustain current levels of performance & then add in chasers (more people to support the growth/process adherence) while redesigning processes. In my view, the life of chasers cannot exceed beyond a quarter. If you are the regional in-charge for warehousing operations for the gold ornament org, you may add a layer of process designers that will review the current hits & misses of each different warehouse & will help you create a standard best practice play book your region. These chasers, with incremental process changes, then also help drive the change with daily reporting on adherence.

Your next overlap comes with the long term solution to make sure a sustainable process is born. Technology comes to the fore here. A structure that can run the current scale in Auto-Pilot & then the next cycle of Brute Force/Chasers can take your KPIs beyond current levels.

MAKING THE RIGHT MOVE

Making yourself and your team redundant for current levels of business is the key output metric if you want your business & your professional career to grow. This is the accountability horizon that gives you the maximum flexibility in order to plan your solution horizons. You will need to run both Short Term & Long Term programs as your personal growth depends on the same. However, at the same time, this is where most people make or break their careers. Those who

Supply Chain, as a business function, needs immaculate planning with impeccable solution. But Rome was not built in a day & can never be. To achieve the holy grail, term wise planning with ‘Solution Horizon’ is key. Just like education & wealth creation, problem solving, too, is a journey. It all depends on where you are in the journey. If you are in the nascent stages of your business setup, you seek growth by optimising for the immediate term. Once you are in a matured phase, growth is driven by optimising for the long term.

are able to pull off this balancing act over a sustained period of time get to the next stage. For those who don’t, well, they don’t perish but get stuck.

The manager of the ornament organisation, if she/he is able to maintain performance levels while contributing to the design of the ‘Order Management’ module, she/he will move to the next level of the accountability horizon.

If you are a Senior/C-suite Manager, your accountability horizon HAS TO BE Long term. Immaculate Long Term planning will ensure all the short term results are in order. As David Cote put it, current quarter results should have been planned a year ago! You need to ensure your business stays relevant over the next 3-5 years. The comfort here of a quarterly dip for a good year is present, but it takes a huge effort to convince the board for the same. Indra Nooyi’s vision of Performance with Purpose to cut sugar & salt levels in the portfolio of PepsiCo products was to make sure the company made relevant products for the next decade, not the next quarter.

The next quarter would only get a good performance by selling more of the same products. But will the same portfolio be relevant for the next decade? This question led her to invest heavily for a portfolio redesign while keeping the core of the brands same. It was still, maybe the best salty snacks or potato

chips, but with a lot less salt & sodium. It was still the joy of opening a good fizzy soft drink, but with a lot less sugar. The transition in the portfolio could not happen overnight. It has as much to do with the consumer’s ability to accept

change (in terms of taste & portfolio) as with the organisation’s internal capability to deliver this change at the right cost.

THE RIGHT FIT

Defining milestones, like % value & volume share, to capture the directional change, is a key management deliverable here. Here, what is desired is as follows…

w Technology based solutions

w Redesigning org structures

w Rethinking accountabilities of functions

Designing conflicting KPIs that expand the organisational web out of the current comfort zone is also needed. Entire functions could be made redundant with redirected focus towards chasing untapped value. If you are the CXO in the gold ornament organisation, maybe you need to figure out how to disrupt the current order management flow to stay relevant! Now, it is time to figure out your organisation’s needs and where you fit in to deliver growth!

National Logistics Policy

The REFORMIST AGENDA

Adequate infrastructure creation (including warehousing and transportation) is the need of the hour to make India a US$5 trillion economy. To accelerate investments and help achieve the creation of better warehousing facilities in the country, it is crucial to attract businesses and institutions in the sector. With this as the background, Warehousing Association of India (WAI) recently hosted a conference on National Logistics Policy (NLP): The Road Ahead For Integrated Best-In-Class Infrastructure Development. With Celerity as the content and media partner, this power-packed conference brought together the who’s who from the industry –policy makers, academia, consultants, and the industry stakeholders to discuss and dwell upon the changing landscape of warehousing in the country and the poised role that the National Logistics Policy (NLP) is slated to play. The conference also propagated the adoption of the e-Handbook on Warehousing Standards, which was drafted by WAI and was launched as part of NLP, with a view to pave the way for global competitiveness of the Indian warehousing sector. On the side-lines of the conference, an insightful report, brought together by WAI and EY laid strong thrust on the policy imperatives needed to strengthen the overall warehousing landscape in the country and enhance ease of doing warehousing business in India. Here are snippets of key recommendations made to bolster warehousing growth along with the stimulating insights from the visionaries…

THE role played by the warehousing and logistics sector during the Covid-19 pandemic is a testament to the importance of this sector in the economy. Adequate warehousing facilities coupled with an efficient logistics mechanism is the key to sustain the flow of goods and meeting consumer demand across the spectrum of the country. The critical role played by the warehousing sector has also been recognized in the National Logistics Policy (‘NLP’) and is being given due credence by the Central as well as State governments wherein NLP is expected to augment warehousing capacity and enable faster communication to take products closer to their consumption points.

With the advent of e-commerce and a push towards the revamp of supply chains across the globe in a post pandemic world, the need for adequate and quality warehousing that is sustainable and resilient is critically acknowledged more than ever. It is thus imperative that the warehousing sector be developed to cater to the requirements of a rapidly growing economy and address the need for adequate facilities to serve the increased economic activity alongside ancillary demand arising out of it. Also, the need of the hour is to evaluate the emerging trends in warehousing, adoption of technology and the policy initiatives that can help realize the true potential of the sector in India.

The warehousing sector has witnessed strong growth in the past five years growing at a CAGR of roughly 23% and is further expected to grow at 19% by FY 2026. Increase in online retail coupled with in increased consumer demand has paved the way for companies to ensure efficient availability of goods, thereby warranting availability of efficient quality warehouses, hereinafter referred to as Grade A warehouses. In addition to this, development of transportation and infrastructure facilities has resulted in increased demand of such Grade A warehouses. The entry of corporates and resultant formalization of the sector is likely to result in higher demand for such Grade A warehouses.

THE NEED OF THE HOUR

Considering India’s aim to be in top 25 rankings in LPI, significant policy thrust, and reforms are the need of the hour for improving the rankings. This shall also include policy efforts towards warehousing sector given that it forms an integral and important part of the logistics industry. Reforms and incentives that help augment the next phase of growth in warehousing are the need of the hour. To add on to this, the Logistics Ease Across Different States (‘LEADS’) report also ranks Indian states and union territories to increase competitiveness, to boost efficiency and promote healthy competition amongst them in logistics sector. This is likely to bring further efficiencies and catalyse the achievement of a US$5 trillion economy for India.

The Central Government launched NLP with an aim at introducing reforms to the logistics and warehousing sector and to introduce various policy measures to catalyse the efficiency of operations while reducing cost of logistics simultaneously. As per Ministry of Commerce & Industry, the vision of NLP is to drive economic growth and business competitiveness of the country through an integrated, seamless, efficient, reliable, green, sustainable, and cost-effective logistics network leveraging best in class technology, processes, and skilled manpower. Further, the NLP seeks to reduce the logistics cost from 16% of GDP to a global average of 8% by 2030. The NLP thus aims to promote seamless movement of goods and enhances the competitiveness of Indian industries. Further, the NLP is also cognizant of the warehousing sector as a sub-set of logistics and recognizes the importance of the sector. Focus will be on enabling adequate development of warehouses with optimal spatial planning, promotion of standards, digitization and automation across the logistics value chain and better track and trace mechanisms.

While NLP has provided the muchneeded thrust and policy focus on the logistics and warehousing sector, various states are also in the process of launching their own logistics policy within the broad contours of the NLP. To provide a fillip to the warehousing sector, various states have implemented measures that are

conducive to the business environment, enables quicker set-up of facilities and aims to provide speedy resolution of grievances. At present, 13 states have put in place respective policies governing logistics and warehousing.

For India to harness the potential of warehousing sector, it is imminent that both Central Government and the State Governments must work towards removal of bottlenecks and resolution of issues hindering the growth of the sector. The launch of the NLP is that step in the right direction to ensure cooperative federalism.

KEY RECOMMENDATIONS AND ACTION PLAN

Collaborative and active participation from all stakeholders including the government is fundamental to meet and maintain demands from industry and consumers. The recommendations stated below are aimed at strengthening and improving existing warehousing facilities and serve as good guidelines for the states that are formulating logistics policies.

 SIMPLIFY LAND RELATED APPROVALS

The recommendations for land approvals can be divided into two parts, namely, approvals related to government owned lands and those related to privately owned lands. The respective recommendations are as under:

w For government owned lands, i.e., the government procures itself and allots the land for industry use. In this regard, it is recommended that such land should also be permitted to be allotted to warehousing sector treating it on par with industry.

w For privately owned lands that are notified and on which an industry can be set up, CLU compliance shall be treated as a procedural formality only for the purpose of recording and shall be deemed to be granted within defined timeline.

w For other type of privately-owned lands such as agricultural land that are not notified, where CLU is mandatory, the timeline for obtaining CLU must be specified. A deemed approval shall ensure timebound disposal of applications and

streamline the commencement of activities on the land.

 RATIONALISE PERMITS AND REGULATIONS GOVERNING WAREHOUSING

The number of permits and approvals required to build and operate a warehouse needs to be radically re-looked at with an aim to prune the redundant and irrelevant requirements. The need of the hour is to ensure we have a uniform list of approvals with standardized documentation requirements transparently available to enable industry players to acquire, build and/or operate warehouses quickly. This shall go a long way in ensuring policy certainty and attract investments in warehousing on a large scale. With the launch of NLP, the time is opportune to re-look at all permits and approvals and undertake a complete overhaul of the processes to revitalize the sector.

 TIME-BOUND APPROVALS

While pruning the long list of approvals is a key ask, an equally important priority shall be to ensure time-bound approval process. Timelines must be prescribed in respective laws or policies to provide policy certainty to industry. The need of the hour is to implement a time limit with a deemed approval process if such limits are not being adhered to. A policy environment where industry is assured of timelines shall go a long way in attracting global investors and open up the sector to large scale investments needed for catalysing the next phase of growth.

 CREATION OF A SINGLE WINDOW FOR ALL PERMISSIONS AND PERMITS

Alongside the rationalization of number of permits and approvals, it is equally important to have a single window mechanism at the state that is transparent, shows progress status online and enables time-bound clearances. Single window mechanism shall be done with an aim to bring all departments, agencies or authorities under a unified umbrella and remove the time and cost involved in liaison with them individually. It is imperative to create a nodal agency/

empowered group that is authorized to grant all approvals by itself and truly acts as a single window than being a liaison office merely. This shall significantly enhance the Ease of Doing Business and also reduce the time involved in the process significantly.

 PERMITTING USE OF INDUSTRIAL FACILITIES FOR WAREHOUSING

Industrial facilities have a reasonably developed infrastructure and is equipped with basic facilities such as water, drainage, electricity, roads etc. At present, warehousing is either not allowed or at best, permitted with a restrictive ceiling vis-à-vis overall area.

This hinders the setting up of warehousing units in industrial areas and adversely impacts the cost of operations due to set-up in non-urban centers and at farther distance from demand hubs. With industries being one of the major demand centers for warehouses, reserving at least 15-20% of the available area for warehousing is expected to generate better synergies and unlock the potential for the sector. Adequate amendments to laws should be made to explicitly permit setting up of warehouses in industrial areas.

 ALLOW GST CREDIT ON CONSTRUCTION

Being one of the most significant expenditure, denial of GST credit on

construction material and services critically impacts the cash flow for the industry and leads to increased costs resulting in higher rentals. Construction of a warehouse takes anywhere between 1 to 3 years and blockage of credit on such expenditure has an ominous impact on the overall costs and returns of a project.

To spur growth and investment in warehousing sector, the government should immediately amend Section 17 (c) and (d) of Central Goods and Services Tax Act, 2017 (‘CGST Act’) and respective state GST laws to allow ITC on goods/ services procured for construction of a warehouse.

For this purpose, a proviso to the aforesaid clauses may be added to create an exception for warehousing sector. Assuming impact of 18% on costs (being median GST rate), it shall help augment the cash flows to warehousing sector and result in better returns while ensuring that cost escalations are also mitigated to a large extent.

 ENABLING WAREHOUSING IN CORE VICINITY OF TIER I & II CITIES

One of the major problems faced by the market players in warehousing sector has been availability of adequate land closer to the consumer demand centers. Due to the high population density in the Tier 1 and Tier 2 cities, they tend to be the ideal demand centers. However, availability

of land in Tier 1 and Tier 2 cities have been a major concern since heavy cost is incurred in case of buying such land.

In-city spaces such as Bus Depots / Terminals, metro stations, etc., can be leveraged as distribution nodes. It is also suggested that the Government consider organizing a consultation process with industry members who can collaboratively work with the government in identifying the most suitable land parcel for such investments. Sub-hubs, being smaller than MMLPs within the core vicinity of such tier I & II cities in India, may be setup to reduce lead time for demand fulfilment.

The implementation of the above recommendations shall go a long way in the development of warehousing sector, enabling capacity and scale, and help achieve the Hon’ble Prime Minister’s objective of reducing cost of logistics to global standard by 2030. This shall propel the growth of warehouses, bring in the much-needed efficiencies and remove the bottlenecks to help spur the next phase of growth that is formalized, creates job and contributes to the economic development of the country.

The time is opportune when the states are in the process of or have already launched a logistics policy in tandem with NLP. The policy focus on the logistics sector merits a deep-dive into the warehousing sector and prioritizing the implementation of solutions at Central as well as State level.

WAREHOUSING ASSOCIATION

OF INDIA (WAI) RECENTLY HOSTED A CONFERENCE ON NATIONAL LOGISTICS POLICY (NLP): THE ROAD AHEAD FOR INTEGRATED BEST-IN-CLASS INFRASTRUCTURE DEVELOPMENT

MANU BHALLA PRESIDENT, WAREHOUSING ASSOCIATION OF INDIA

The Warehousing Association of India (WAI) was formed as a company under Section 8 on November 08, 2021, with the mission to promote the interest of the Warehousing Industry in India.

In sync with the PM Gati Shakti National Master Plan, the key objective of WAI is to facilitate the ease of setting up and operating world class warehouses in India, make supply chains more efficient and bring overall Logistics Costs down by improving productivity and turnaround times, reducing damages, shortages through automation and deployment of new technologies coupled with the modern multi modal connectivity of Road, Rail and Waterways.

WAI was privileged to be entrusted by the Department for Promotion of Industry and Internal Trade (DPIIT) to update and publish the e-Handbook on Warehousing Standards. This e-Handbook will benefit all the stakeholders of the industry and go a long way toward standardisation and facilitate the development of world class warehousing infrastructure in India. We will continue to update this document annually and it will be our endeavour to include

the latest developments, practices, and technologies in the Warehousing Industry from time to time.

In order to actualise the benefits of the National Logistics Policy, WAI has undertaken a Pilot study on the Ease of Establishing and Operating Warehousing Business in the three states of Maharashtra, Haryana, and Uttar Pradesh. This report has been published in partnership with Ernst & Young.

In addition to this, WAI is undertaking a Project on Diversity & Inclusion with Asian Development Bank and also undertaking a study on rating and grading of warehouses in India with Indian Institute of Management, Ahmedabad.

WAI is already connected on the E-LogS: Ease of Logistics Services for quick dissemination of Information on Logistics.

As President of WAI, I would request all stakeholders of the Warehousing Industry to join hands with Warehousing Association of India to ensure that India has world class warehousing Infrastructure in India which will dove-tail into Make in India, Atmarnirbhar Bharat and the PM Gati Shakti Project. This will improve India’s competitiveness in the world, making India a preferred sourcing country and an excellent investment destination.

THE POLICY MAKERS

Aspecial division on logistics has been created under the Ministry of Commerce & Industry with an intent to offer an impetus to logistics in the country, to assist them and ensure the enhancement of logistics efficiency. This would ultimately result in reducing the logistics cost, which in turn, would enhance the LPI ranking of the country in the global arena. On October 13, 2021, the Government of India launched the most ambitious PM Gati Shakti Masterplan. This breakthrough initiative was launched for integrated planning of

infrastructure and synchronized project implementation across all concerned Central Ministries, Departments and State Governments.

PM Gati Shakti is a transformative approach for integrated and holistic planning across concerned Ministries/ Departments to improve multimodal connectivity, and logistics efficiency and address critical gaps for the seamless movement of people, and goods, with a focus on minimising disruptions and ensuring timely completion of works.

In PM Gati Shakti Master Plan, 600 layers of all different ministries of state

S. BHARDWAJ

Dy. Director-General, Ministry of Commerce & Industry, Government of India

governments are integrated on digital platform for better coordination and early resolution. Gaps are identified and taken up on priority basis regarding transportation to eliminate unnecessary congestion. Currently it is confined to government offices only. We are thinking of opening the window to private stakeholders very soon.

We also recently launched National Logistics Policy, which is an endeavour to improve the competitiveness of Indian goods, enhance economic growth and increase employment opportunities. National Logistics Policy is a comprehensive effort to address issues of high cost and inefficiency by laying down an overarching interdisciplinary, cross-sectoral, and multi-jurisdictional framework for the development of the entire logistics ecosystem.

Moreover, Unified Logistics Interface Platform (ULIP), launched as part of the ‘National Logistics Policy (NLP)’, is the promising initiative in the logistics sector that aims to bring ease of doing business in the logistics sector by simplifying the logistics processes, improving its efficiency, bringing in transparency and visibility, and reducing logistics cost & time.

With democratisation of the information, ULIP aims to enable the industry players for creating a market for revenue generation as well as abolition of monopoly and un-levelled advantage. Achieving positive results at granular and individual level will have a tremendous constructive impact on the overall logistics sector of India along with Logistics Cost percentage of GDP and enhancement in the global logistics indices of India.

NLP envisions to reduce the logistics cost on priority and enhance the logistical efficiency. In partnership with consultants, we are creating a framework to assess the logistics cost of India.

Alongside, we will also assess the logistics cost that our freight forwarders have to incur when they transport cargo to different countries. Besides World Bank’s Logistics Performance Index, we are also planning to develop our own index –National Logistics Performance Index. We are engaging with the Indian freight forwarder community to communicate with their global counterparts to showcase our logistical prowess to the world.

Through all these measures, we are placing immense thrust on technology adoption. To implement this, we have also devised a comprehensive Logistics Action Plan. We are engaging with state governments and UTs to enhance Easy of Doing Business. The good news is that around 13-14 states have formulated their own State Logistics Policy to facilitate growth.

To fulfil the vision of developing a robust and cost-efficient logistics ecosystem, the logistics division of DPIIT, Ministry of Commerce & Industry also undertakes an annual “Logistics Ease Across Different States (LEADS)” survey in all States/ UTs to assess and suggest various improvements in logistics sector of the country. The LEADS survey assesses viewpoints of various users and stakeholders across value chain (Shippers, Terminal Infrastructure Service Providers, Logistics Service Providers, Transporters and Government agencies) to understand the ‘enabler’ and ‘impediments’ to logistics ecosystem in the country.

The LEADS 2022 survey report would assist PM Gati Shakti National Master Plan (PMGS-NMP) and National Logistics Policy (NLP) to perform a network mapping of logistics infrastructure, services, and regulatory environment, enabling state governments to identify and fill the gaps and achieve data-driven multimodal connectivity.

For India to harness the potential of warehousing sector, it is imminent that both Central Government and the State Governments must work towards removal of bottlenecks and resolution of issues hindering the growth of the sector. The launch of the NLP is that step in the right direction to ensure cooperative federalism.

Through all these initiatives, we also want to showcase the government’s intent to augment logistical competitiveness to the global companies who are looking to do business in the country or are in the business of freight forwarding. We are organising meeting with the Indian freight forwarders. Such measures are taken to disseminate the information through these channels to their global counterparts on the measures being taken by the government to streamline supply chains. This will also enable us to achieve better rankings on the logistics index globally. We are also pushing states to take concerted measures in ironing out inefficiencies from the system and I am happy to share with you that most states have already uploaded at least 25-28 mandatory layers on the PM Gati Shakti portal suo moto. Central teams have assisted these state authorities to understand the nuances of such data and ways to work towards it. We are actively interacting with industry participants to understand their challenges and working towards removing bottlenecks.

TO start any industrial or warehousing unit, these four parameters – Land, Infrastructure, Forward & Backward Linkages and Skilled Manpower – hold prudent importance. Maharashtra already has a Logistics Policy in place, which facilitates the development of logistics parks across the state. We also have reserved land parcels

SHRI SURESH KAKANI IAS

Managing Director, Maharashtra Industrial Township Ltd.

We all must understand that supply chain needs to be resilient, and it needs to be moving continuously. The governing authorities must develop City Logistics Plan to avoid any supply chain disturbances. We must need to lay emphasis on in-city warehousing

and proper land availability needs to be looked into. We also really need to push multimodal logistics to cater to the length and breadth of the country in a seamless and cost-effective manner.

for setting up of logistics parks at various industrial areas. Maharashtra has a huge land parcel owned by Maharashtra Industrial Development Corporation (MIDC). We have reserved around 30% of the land available for the establishment of logistics parks. If any additional land is required, MIDC is committed to facilitate the same. Secondly, we are placing immense thrust on developing state-of-the-art infrastructure across the state, be it road, rail, ports or air connectivity. We have chalked out a detailed plan for developing greenfield corridors / super expressways to further enhance the infrastructure in the state. The intent is to connect every district of the state through these corridors and reinforce mobility of goods from one place to another. We have very good

rail connectivity across the state. We need intervention from the Ministry of Railways to prioritise the movement of freight from one place to another because currently the priority is on passenger traffic. We have two mega ports, and one mega port is in the development stage alongside 48 smaller ports. We have three international airports in the state with state-of-the-art cargo handling facilities. Out of the 13 smaller airports, we are in the process of converting some of them into cargo airports to enhance the movement of goods. We are blessed with a huge network of academic institutions across the state. We have tied up with CII to assess the needs of these institutions in developing a forward-looking training module. This is aimed at honing the skills of the future talent. We are targeting to

develop over 25 multimodal logistics parks and around 100 small logistics parks across the state by 2025. As far as the linkages are concerned, we have partnered with World Bank to assess the potential of every district of Maharashtra, which will give a fairly good idea to enable an all-inclusive development. Through this initiative, we are targeting tier II & III cities to ensure sustainable growth expanse. We are confident that all these factors put together will help us create an exceptional business-friendly landscape in the state. If each one of us, including the Centre, the state machinery and the industry stakeholders collaborate, the result is not only superior, but also fastpaced and sustainable in the long run.

ACADEMIA & CONSULTANTS

WE, as industry, need to understand that we have with us great policy initiatives from the government’s side. PM

Gati Shakti envisions to integrate the country’s logistics industry. We now have a National Logistics Policy whose importance shouldn’t be understated. With all these measures, the government’s intent is clear – to facilitate holistic growth. Warehousing has become a key element of the National Logistics Policy. We are also witnessing a healthy competition between states to achieve higher LEADS ranking, which will ultimately enhance logistical infrastructure. To the investors, it provides a far simpler and easier access to decide on the states to set up and

expand business. States need a lot of support from Warehousing Association of India (WAI) to understand industry’s partner and further assist them in removing any potential bottlenecks and devising the right roadmap on the policy landscape. Organisations like WAI are the critical connect between the industry and the government. To progress further, I believe there is a need for a national level body, which can integrate with the states to bring their policy initiatives on a single platform. They also need to work towards developing an incentive mechanism, which will further encourage investors. There also needs to be central nodal body that can streamline the documents needed for business facilitation.

I would also like to bring your focus

BIPIN SAPRA

Sr Partner, Ernst & Young

to one of the most reformative policy measures taken by the government –GST, which has completed 5 years of its existence recently. The ‘one tax’ framework and digitalization of tax processes have triggered several seminal benefits for businesses. GST triggered an uptick in logistics efficiencies. Transportation and logistics infrastructure, such as warehousing, are witnessing increased innovation and investment. Digitalization of compliances has made high-quality granular data available not only to the tax administration but also businesses, economists, policymakers, and other stakeholders. These are certain aspects, which can go a long way in terms of ease of doing business.

country in PPP model. Development Banks can work with such agencies to create a line of low-interest funding that will support in developing the super structure. This will reduce the overall development cost, the cost of acquiring a particular warehouse in an MMLP will be much lower. ADB has been working closely with the Logistics Division for the last four years supporting key initiatives, including the National Logistics Policy.

NLP is focused on some critical objectives that are central to transforming the logistics ecosystem. These include targeted interventions for the optimization of capacity utilisation of logistics infrastructure and driving greater standardisation in logistics equipment and facilities that will lead to enhanced interoperability across the logistics chain, especially between different modes.

States play a critical role in the development of modern logistics agglomeration centres such as MultiModal Logistics Parks and warehousing zones. The process of cooperative federalism envisaged in the NLP will help drive greater standardisation in administrative processes and enforcement across States.

speedy and efficient adoption of these standards across the industry. This is where WAI has a major role to play in bringing together the entire warehousing and wider logistics fraternity and sensitize them on the potential gains of such standardization. WAI should also take the lead in discussions with GoI and financial institutions and push for fiscal incentives or reduced cost of lending for warehouse projects that adhere to these standards.

PRITAM BANERJEE

Logistics Specialist Consultant, Asian Development Bank

MULTILATERAL Banks like ADB and other development finance institutions are working closely with the government to design programs that can bring down the overall cost of logistics related infrastructure projects. An illustrative example is National Highways Logistics Management Ltd., (NHLML) that has been tasked to develop 35 multimodal logistics parks (MMLPs) across the

The NLP also institutionalises an independent ranking of logistics performance of States in the form of the annual Logistics Ease Across Different States (LEADS). This would be a perfect nudge to States to bring greater focus on logistics related issues. Another important element in the NLP is the commitment to develop State and cityspecific master logistics plans. These would be critical to complement the national master plan development in the PMGS Master Plan. All of these would help improve ease of doing business on the ground.

While bringing out warehousing standards by Warehousing Association of India (WAI), in partnership with Logistics Division, is the great first step, the question remains how to ensure

An important reform for ease of doing business in warehousing creating a genuine single window for all warehouse related approvals. ADB hopes to be able to do some good work in this area in partnership with Logistics Division and State governments. State governments need to play an active role in integrating land parcel information on the PM Gati Shakti portal so that potential investors can get the desired information under one single platform. Additionally, PSUs also own a substantial amount of land, which is perhaps under-utilised. Even major ports have huge land parcels, which are still unutilized. GoI is actively considering the monetization of such assets, and this will help create a large pool of competitively priced land for warehouse and logistics park development.

PM Gati Shakti program can efficiently manage these aspects. There are lot of infrastructure restructuring possibilities that exist in every part of the country. Proper planning, designing and sound implementation will be the key in achieving these objectives. There is urgent need to have robust methodologies to capture the true essence of logistics costs and efficiency, and not depend only on perception-based studies. In that context, India should take the lead in developing a methodology to measure our own logistics cost in partnership with the industry. This can become a global benchmark which is not just applied by us in India, but is followed and implemented globally as well.

The LEADS 2022 survey report would assist PM Gati Shakti National Master Plan (PMGSNMP) and National Logistics Policy (NLP) to perform a network mapping of logistics infrastructure, services, and regulatory environment, enabling state governments to identify and fill the gaps and achieve data-driven multimodal connectivity.

DUTT

THE logistics ecosystem (particularly warehousing) has many stakeholders such as financing partners, insurance partners, operators, builders, architects, academia, regulators, and each playing a crucial role in the value chain and support of the ecosystem. Also, startups, SMEs and corporates have to join the ecosystem in a meaningful way together and complement each other. I foresee a strong value proposition if scalable technology solutions (demand, supply, operations, forecasting, etc.) can be developed for warehousing in the country. startup ecosystem has not been able to join the warehousing bandwagon. There is an opportunity for the industry to collaborate with startups in a meaningful manner and the government can facilitate this development. There

are a lot of non-capex technology-based products which can be designed and developed by the startups. This is how a holistic warehousing development can take shape in the country. Academia has a major role to play in streamlining these policy measures and ascertaining that they are channelized in a manner that yields a holistic and sustainable development.

The current Indian Government policy initiatives such as National Logistics Policy or PM Gati Shakti masterplan is the first step to get the ecosystem together and provide them a guideline for smooth enablement of the Indian logistics. We need to think from the perspective of logistics as a flow concept with agility, transformation at its core.

The ‘one tax’ framework and digitalization of tax processes have triggered several seminal benefits for businesses. GST triggered an uptick in logistics efficiencies. Transportation and logistics infrastructure, such as warehousing, are witnessing increased innovation and investment. Digitalization of compliances has made highquality granular data available not only to the tax administration but also businesses, economists, policymakers, and other stakeholders

INDUSTRY VOICE

DEVAN MITRA CHENOY Public Policy Manager, Amazon

E-COMMERCE captures about 30% of total warehousing space in the country, as per the Frank Knight study on warehousing, and the overall warehousing industry is growing at about 15-16% per annum. As per the EY-WAI report on warehousing this industry is set to grow by about 8-15 billion dollars over the next decade. We greatly appreciate immense thrust being laid on warehousing standardization, building quality warehouses. Today we have moved away from ‘godowns’ to ‘fulfilment centres, which is a huge revolution in itself. Grade A warehouses today occupy about 35-40% of total warehousing space and the number is only set to grow. We witnessed warehousing growth in eight primary markets in the first ten years of

development. Those were the main urban cities. But today, the demand pattern is also coming from tier II & III cities, necessitating a holistic development of warehousing in those cities as well. I am excited to witness the growth that unfolds on the back of e-commerce boom. ULIP is first-of-its-kind initiative that has the potential to be a great WIN for India. It really amazes me as the citizen of India to see the vision of the governing authorities to bring to light such path-breaking policy measures. The biggest caveat of this policy is that it has put Logistics at the fulcrum of the economy. It has changed the mindset of people towards logistics industry. i-GOT platform is another great tool that NLP has launched.

We all must understand that supply

AVI

AVP, Centre for Transportation and Logistics, Indian Institute of Management Ahmedabad

chain needs to be resilient, and it needs to be moving continuously. The governing authorities must develop City Logistics Plan to avoid any supply chain disturbances. We must need to lay emphasis on in-city warehousing and proper land availability needs to be looked into. We also really need to push multimodal logistics to cater to the length and breadth of the country in a seamless and cost-effective manner.

The complexity surmounts the moment private equities start investing into it and expects a double-digit profit. The problem aggravates when we are talking about reducing logistics cost as it directly involves reducing warehousing input costs, which can be in the form of taxation, regulation, so on and so forth. Land cost comes through time where time value money is of essence. Availability, accessibility, and affordability of land is a big maze we have to deal with. Newer policy implementation can only happen we start operating. Imagine one year delay in land acquisition for a Rs1000 crore project can have a huge strain on operational margins (due to the high carrying cost about Rs100 crore at 10% cost of funding). We request the Central governing bodies to enable faster access of land to developers. This is one area where the government and the Warehousing Association of India needs to work closely and aggressively. Before this, we can’t really achieve the target of cost reduction.

WHEN we talk about bringing down logistics cost to single digit, with global average being 8%, a 6% margin reduction from we stand today at about 14%, entails 300 billion dollars saving, considering the vision of achieving 5 trillion-dollar economy by 2025. It further entails 6% saving for the Indian economy, which translates into 1.5% growth in the GDP. We have witnessed humungous progress being made by the warehousing industry in the country in the recent years. We have reached 300 million sqft and slowly advancing towards becoming an organised sector. But I want to bring in a different perspective here… what if the warehousing industry fails to deliver this?

While there are incredible opportunities waiting to be tapped, there are immense bottlenecks as well. As developer, we are facing huge challenge in terms of land acquisition. Warehousing is a low margin business.

Additionally, policy formulation is one thing. What we really need to look at is the effective implementation of that policy by respective departments and creating awareness among the industry on the accrued benefits of the same. We need to imbibe policy implementation in true spirit so that we really don’t have to go from pillar to post for every single approval. In my opinion, single window only opens multiple doors. For us, there is practically no ‘single window clearance’.

Moreover, I believe we need to promote multi-tier warehousing, which a big miss today. Gati Shakti is all about bringing speed in the development of necessary infrastructure. We must work on these measures at speed to harness potent benefits. It is heartening to see the government’s increased engagement with the private sector and that it is taking efforts to understand the industry’s pain points. Government can also look into the tax implications so that there is greater revenue generation. We don’t just need to look at reducing logistics cost, we need to also look at lowering input cost or taxation. This is my take on the whole expanse of warehousing in the country.

EVERY element of the National Logistics Policy has a special feature; it has offered us the flexibility to make and implement amendments based on industry. Moreover, it is highly stakeholder-friendly and simplified. There are tremendous business opportunities waiting to be tapped from initiatives such as NLP and PM Gatishakti Masterplan. The fact that it is talked about every corner of the country itself reflects its ability to reach the last mile. Industry stakeholders are enthusiastic about reaping the tangible benefits and supporting the government’s endeavour to bring logistics to the spotlight. An impeccable integration has been the biggest plus of this policy. We are bullish about the unfolding possibilities coming our way.

PRASANTA BISWAL

LOKANATHAN NADAR Advisor on Public Policy, Regulatory & Government Affairs, Horizon Industrial Parks

SVP & National Head – Corporate Affairs, Welspun One Logistics Parks

Contract Logistics Challenges and Opportunities

Contract logistics companies, since their emergence, have been playing an able role of a great aide to the user industries in not only offering logistics services in an organized and efficient manner, but have also been able to transform the logistical landscape over the years. While the road to success and sustenance was never easy, their ability to adapt to changes faster and bring in latest technological advancements and value-added propositions, has helped them steer the tide in their favour. Current times call for a close collaboration between contract logistics companies and the user fraternity to bring the equilibrium needed to refuel the economic growth wheels. This seminar, hosted on the sidelines of the Celerity Supply Chain Tribe Awards, discussed the competencies and approach required by Contract Logistics companies to support Industry 4.0. Excerpts…

DR ASHVINI JAKHAR

PAWAN CHANDRA

RAVIKANT PARVATANENI

MOHANDAS MENON,

DILIP SHARMA

JAYANTA GHATAK

Founder & CEO, Prozo

Vice President – Supply Chain, Pidilite

CEO India, Argon & Co. Consultant, Stellar Value Chain

COO, ProConnect Supply Chain Solutions

Head – SCM, Payed International Freemoney Ltd.

SETTING the tone of the discussion in the right context, the moderator of the panel, Jayanta Ghatak, Head –SCM, Payed International Freemoney Ltd., elaborated on the nuances of Industry 4.0 in procurement parlance. “Industry 4.0 is a thought process, which is perceived to be put in action by players who have already reached a certain level and go to the next level via implementing the smart technology levers. Here the Data remains the constant. While we have been analysing data and been taking decisions based on that. The biggest change that has happened over the years is on the predictive abilities that the companies are going to have. Industry 4.0 is essentially that approach which augments a company’s capabilities in building a more robust mechanism in place that aids them in finetuning decisions based on Predictive Data Analytics.”

He added, “Logistics and supply chain has a crucial role in enabling this approach because here we are talking about enhancing the efficiency of production systems. Next gen supply chains are truly embedded with new age technology solutions that facilitate companies in streamlining operations. Let me share with you the example of an often heard 10-minute delivery promise. There is a lot of science behind this 10-minute delivery. Companies need to first understand the demographics of the warehousing location vis-à-vis the target audience they are wanting to cater to. They chalk out the preferred shortest routes for delivery that is possible without breaching any speed limit. There is also a lot of science at play at the fulfilment centers as well and that’s where predictive analytics gains prominence. Today companies such as Swiggy and Zepto are able to predict a consumer’s behavioral pattern and basis that, they design their fulfilment centers. That’s the evolution that Industry 4.0 has brought to the fore.”

As a user or a provider or an enabler of logistics services, it is important to decide on the right level of autonomy and intelligence to make it more

efficient, effective, connected and yet remain flexible. Kindly share your stance on this.

Pawan Chandra, Vice President –Supply Chain, Pidilite: Data is not something new. Every company, which is in the business of either production or delivery or distribution or service, will have loads of Data. The only thing that has changed is that shift which has happened. Around 20 years back, companies were managing the logistics service whether it is warehousing or the transportation on their own or through small service providers. The shift started happening when companies realized that this function can be delegated to specialists so that they can focus on their core businesses. The idea was that these 3PL partners would invest in new technologies, bring in new ways of working, ensure upskilling and ultimately provide better efficiencies in terms of cost competitiveness, flexibility and service experience. How does the Data come into play here? Well, new age logistics service providers have thoroughly analysed the impact that Data Analytics has in the entire supply chain. When they meet their prospective clients, they are able to showcase their capabilities on the back of a strong predictive analytics that has been developed by these 3PLs. This is where a competitive streak lies. While this is one side of the picture, I would like to give you a user side challenge that we are facing currently. While we have no problem in sharing the valued Data generated during the operational cycle, the complexity arises the moment the Data starts leaking from the system, no matter how fool-proof a contract is. The element of TRUST is a big miss. Besides, as a user, we are looking a Service Delight Factor from our logistics service provider. In the sense that they can offer us an alternate service route that is more efficient to serve our customers and can service a bigger geographic expanse in a single trip. In short, we are looking for flexibility in logistics while in-transit. This can only be possible if our LSP is backed by a sound Data Analytics capability.

Ravikant Parvataneni, CEO India, Argon & Co.: While multiple stake holders are involved in deciding on the

level of autonomy and intelligence, it is actually the customer who decides what is to be done. All other stakeholders are enablers and influencers, but the customer is the one who decides what level of autonomy is to be achieved basis the balance between efficiency, effectiveness and flexibility required in the business.

Jayanta Ghatak: The aspect of data, turned into actionable intelligence and ultimately (autonomous, semiautonomous and human) actions, is key to smart supply chain management and logistics in Industry 4.0. The road ahead is one of more autonomy across logistics components such as inbound logistics, warehouse management, intra logistics or line feeding, outbound logistics and logistics routing. It is also important to understand the criticality to enable secure data exchange between its participants while at the same time ensuring data sovereignty for the participating data owners. As a user, it is critical to evaluate the capabilities, scalability and adaptability of the provider and accordingly undertake to share data and pain points to enable the provider to provide a solution or work around. As it is for the provider to provide confidence to the user about its unflinching resolve on data security, demonstrate key use cases relevant to the user's expectations and be aligned to the deliverables. These exchanges provide the platform for both the user and enabler to work seamlessly on the desired objective and provide the required level of service or output.

Flexibility and agility are the key to future supply chains. The supply chains of tomorrow will be more outward-looking, where a 3PL partner will be responsive to the needs of their client’s customers in a real-time.

How can 3PL companies stand out in the crowd and strike the deal?

Jayanta Ghatak: It is imperative for 3PL companies to position themselves as extended arm of the user organisations and in order to do that they should focus both on the relationship front as well as advancement in technological front and demonstrable execution capabilities. It is important to build a trustworthy relationship with its vendor and clients and a key inclination to show that data and key business inputs are guarded fiercely by them like their own data. Transparency in data sharing in terms of efficiency improvement and relevant benefits thereof gives a huge boost for the service relationship. Keeping oneself abreast with the latest technological advancements, leveraging the power of collected data to shore up logistics efficiency and having the right resources to take benefit of them and provide a specialized service, attracts the interest of the customer. Transparency in the operating processes and sharing performance dashboards further cements the relationship. All these help in building use cases for the 3PL to make their go-to market strategy and

help them stand out not only in terms of specialised offering but providing efficient services and more importantly building a trustworthy relationship.

Mohandas Menon, Consultant, Stellar Value Chain: 3PL companies survive on proven track record. 3PL selection process is akin to traditional marriage proposals. Except for horoscope, companies check all other aspects like industry expertise, type of projects / customers managed, team strength and pedigree, financial position, etc. As the scope of outsourcing is expanding, the yardsticks for 3PL selection are also getting stringent. It is important or even imperative for 3PLs to walk the talk consistently. In my view, any 3PL company, which can demonstrate consistent delivery of KPIs with existing customers and offer customer references without hesitation, stands out in the crowd.

Dr Ashvini Jakhar, Founder & CEO, Prozo: We live in a world where it is supply chains that compete, and not brands. Enhanced supply chain capabilities are a key competitive advantage in today’s world. At Prozo, we follow a three-part formula to win clients:

w Understanding the clients’ needs better than anyone else through data, interviews, and as-is visits.

w Building supply chain solutions keeping in mind the clients’ current needs and challenges but at the same time developing a solution that will help them build their supply chain as a competitive advantage. Therefore, our solutions are cost as well as working capital efficient, and act as revenue enablers for our clients.

w Serving existing clients well, so as to ensure that our clients have superior trust in our capabilities.

Ravikant Parvataneni: A very difficult question to answer…. unless customers start to differentiate the service and cost and start valuing service levels with the same tenacity as costs, 3PLs will always be fighting on cost. On the other hand, 3PLs have to focus on value addition and stick to their customer acquisition strategy and refuse anything, which does not form part of the strategy.

Dilip Sharma, COO, ProConnect Supply Chain Solutions: If you look at the entire Logistics space in totality, we can largely divide it into three parts – first as to how

the order management cycle behaves. I think there's great effort by the industry across and lots of these analytics have happened there to know our customer and the order better. The second part, which is the large piece, could be again subdivided – how do you warehouse the product and then after warehousing, how do you transport the product, that could be into First or Last Mile. In the last mile cycle, companies generate an abundance of data and there has been analytics. These are in the maturity cycle as of now. The trust part is also being factored into. Coming back to the mid part, which is largely a 3PL, is further segmented into warehousing. It's still at a nascent stage. How do we create the differentiating factor and optimize the entire experience into the warehouse? We are the custodians of an inventory in a warehouse. It’s our responsibility to efficiently manage this part of the business in order to optimise an order and optimise the entire value chain of keeping the product for a life cycle and to have less dependency on the workforce. Our differentiator has been as to how do we develop analytics to understand the life cycle of an in-bound, the life cycle of an efficiency as to how do you produce the pick and how do you make a warehouse very efficient without adopting much of a hardware. We can further break that now into the last mile, mid mile and the first mile of transport. Here we know lots of work has happened in Last Mile but if you translate that into mid mile again, there's a data scarcity. One part is the usage of the vehicle, the second part is efficiently securing the inventory in the warehouse. I think, as a differentiator, the next step is to secure the inventory. I can share with you one use case where we have been able to solve this puzzle. The industry has been deploying the track & trace of the shipment inside the vehicle. One of the resolve that we tried doing and we have been successful in doing is that that beyond putting the e-locks into the vehicle, tracking the driver's SIM card and geofencing of the routes, we have deployed RFID chips into the packets inside the vehicle and then do a seamless transaction of tracking A, B and C where A is the driver, B is the vehicle and C is the goods inside the vehicle. Here the game is to triangulate that information by

factoring in all possible inefficiencies, be it theft, pilferages, etc. Once companies are able to identify the right mix, they are creating the DIFFERENCE.

What are the actions that the companies are taking on upskilling to ensure that the human involvement remains?

Mohandas Menon: Nowadays you are living in a world where the products are not competing, the supply chains are competing. There comes the relevance of outsourcing. Whom to Outsource has become a million-dollar question today. There are innumerable 3PLs in the market who can bid for services. The selection of a 3PL is extremely important in contract logistics and this is where companies need to perform due diligence about their financial background, their past record, and reputations of the clients, etc. The biggest differentiator in any company is the People Power. In our particular industry where we buy from people, we sell to people, we don't have a product to go and sell, we are talking about Service Selling or a Solution Selling, so the importance of people is Paramount in this business. The Covid-19 pandemic has only heightened the crucial importance of People in supply chain.

Besides, I would also like to mention another very important aspect that supply chain fraternity has been facing since ages and that is we are never involved in supply chain planning. We need to be made part of planning too so that we can play an active role in deciding the right storage quantity instead of just offering storage solutions. In a crux, Collaboration is the order of the day, be it with the vendors or the service providers. This will make Supply chains more resilient, more robust, and more effective.

How would you define the criticality of data analytics in Contract Logistics?

Dr Ashvini Jakhar: While outsourcing their supply chain, brands seek to achieve one or more of the following key business objectives:

w Cost Reduction

w Enabling Faster Fulfillment

w Professionalisation of the supply chain/making it more resilient

In order to achieve these objectives, data plays an integral role as there are numerous service touch points in contract logistics. Understanding each variable is crucial for serving customers in the most seamless manner. Some of these variables include SKU spread; Number of line items; Quantity in a typical order; Types of end clients being served (B2C, B2B, GT, MT, CSD, CPC or Marketplace wholesalers); Type of deliveries (standard or appointments); TATs and SLAs expected; Type of inwards (supplier spread) and type of outwards (customer spread); Inventory holding strategy, etc.

On one hand, availability of client data, capturing all these aspects and more, can help the 3PL partner plan storage strategy, capex deployment, processes, industrial design and material flows besides manpower planning, in order to handle the supply chain in the most efficient manner. On the other hand, the very same data can be used to determine as-is state of the client so that future performance can be easily benchmarked against the current performance levels.

3PL partners who follow a data analytics-led solution approach are likely to serve the client much better, and therefore are likely to get rewarded with a higher supply chain share of the wallet from the client’s side.

Ravikant Parvataneni: I would say that the data in the last 10 years has not just grown 1x – 2x, it has gone up by 100x. Managing such a huge Data has become a greater threat these days. When we talk about data, three things need to be answered in this context… What data is required and for What Purpose. I think that's very important before you start churning the data and start analysing it. Secondly, we need to examine Who's going to do that analysis – is it the operations team or the management team because the objectives for both the parties are quite different from the same Data. The last and the most critical aspect that we need to focus on is, the frequency in which the data needs to be analysed. Some companies tend to do it just once when they are building a big warehouse. By the time that particular DC starts functioning, the same Data is already

possibly 18 months old. Hence, it is very important to keep analysing the Data on a periodic basis. This factor is also of a critical importance in case when we have varied number of SKUs where some of them would be fast-moving, and some would be slow moving.

As far as the confidentiality of Data is concerned, I believe that over the next five years, things will definitely change. There would come a time when companies wouldn’t have to fight and do a 10-page agreement just for the NDA to get that data and it will get more democratised. Without the right Data, even the clients cannot expect the 3PLs to come up with a great solution(s) because then it will be a like a Copy Book template. Data analysis is a discovery when you're actually doing solutioning, hence giving enough time to analyse that is critical too.

How do 3PL companies play their part in the omnichannel revolution or this multichannel revolution? What are the key innovations that you're working on to highly efficient processing within your fulfilment center?

Dr Ashvini Jakhar: Supply chains are becoming more and more complex with every passing day. Three interesting phenomena are happening currently:

w Demand side for the companies is getting more and more fragmented because of an ever-increasing number of demand channels; offline, B2B online (Udaan, Industry Buying etc.), D2C and B2C marketplaces (20+ including Amazon, Flipkart etc.). Soon, we will be entering an era of super-apps where giants like Tata, Reliance, Facebook and Google would be launching their apps.

w Customers' expectations from supply chains are on the rise. Both B2B and B2C customers want OTIF (On-Time, In-Full) fast-delivery, more visibility in delivery and seamless returns.

w Pricing pressure is showing up on consumer’s side because of two reasons:

w Product differentiation is diminishing day by day, and more pricing information symmetry is being enabled by new-age demand channels.

w Cost of serving the customer is ever-increasing because of increased expectations and competition.

How can we solve this interesting puzzle?

Dr Ashvini Jakhar: Traditional modelbased supply chains will struggle to handle this new reality and we need omni-channel and multi-channel-

enabled supply chains. Supply chains that aggregate demand side, help a brand leverage the same pool of inventory for all demand channels and seamless, unified management of shipping needs for all kinds of customers. Control Towers that can drive performance of such multichannel supply chains will become the new normal, going forward.

At Prozo, we have invested heavily in creating multi-channel fulfilment capabilities at three key touch points in the supply chain - Warehousing, Technology & Logistics. Our warehouses are multichannel, our order management and warehouse management software are multi-channel enabled and our logistics platform can handle multi-channel transportation requirements. Moreover, our control tower can also manage all aspects of multi-channel operations.

What’s your take on the growing importance of Supply Chain Control Towers to enhance supply chain efficiency?

Ravikant Parvataneni: There are two aspects to it – Data Overload and Multiplicity of systems, which you manage within an organisation. Earlier it was just an ERP, then WMS arrived, which was followed by TMS, and the list kept on increasing. Unless we have one place

where we take all these solutions to the supply chain Highway and unless we take this information from all these sources, put it in place and then just provide relevant information to the specific team, we can’t bring that difference. This is where Control Tower enables to seamlessly connect all the dots through a simple BI dashboard. Additionally, it's equally important that all the required data comes to a single place and then gets to where it's required and in the required format. Gartner has aptly defined a supply chain control tower as a concept that results in combining People, Process, Data, Organization and Technology. Control towers capture and use (close to) real-time operational data from across the business ecosystem to provide enhanced visibility and improve decision making. Working in orchestration with the existing technologies and systems, Control Tower capabilities can assist in proactively managing supply chains in right time, allowing companies to focus on other pressing issues, while the rest of the supply chain can continue functioning, business-as-usual—driving maximum value without a large-scale implementation.

Jayanta Ghatak: The very essence of control tower is to give real-time visibility across the supply chain network of any organisation, pre-empt breaches through predictive alerts, give inputs for nuanced actionable insights and enable collaborative actions on these insights to ensure faster and seamless resolution, thereby minimising the impact on the operations. Ideally a digital infrastructure in combination with physical control tower serves best in increasing the supply chain efficiency with the key focus being unifying data silos, visualise decision support, maximise resources, weaponise response time and optimise operations. Various components of the control tower activity work in unison to increase efficiency, which include notifications, alerts and exceptions, simulation, collaboration within systems, capacity evaluation, performance dashboards, identifying key process improvements and system integration. Expectation setting for both internal and external stakeholders are better managed through and executed

with the help of supply chain control tower.

Dr. Ashvini Jakhar: Control tower on the warehousing as well as logistics side is going to be the new normal. Without control towers, it is near impossible for 3PL companies to serve the TAT and SLA needs of their clients’ customers in a consistent manner. Also, control towers allow 3PL companies to take preventive actions rather than only remedial or reactive solutions to the operational escalations. Future control towers will also back-integrate and help clients plan their replenishment better and help them drive projects to further enhance efficiency in their supply chains.

Mohandas Menon: Supply chains without end-to-end visibility can be a real challenge to manage. Any real time endto-end visibility solution needs strong IT support. Control tower exhibits relevant key information from various stages of the supply chain namely planning, vendors, 2PL and 3PL service providers, etc. All information from the Control Tower would help decision making and hence should be accurate. Collaboration and IT interface among all stakeholders in the supply chain are imperative for a Control Tower for supply chain management to function efficiently.

Where do you see the expanse of contract logistics shaping up from here on?

Jayanta Ghatak: The 3PL sector in India is poised for robust growth, sustained by new technological advancement and enabling infrastructure. E-Commerce, digitisation and infrastructure modernisation are the key growth drivers for the 3PL sector in India. Greater acceptance of demand driven logistics practices brings forth a plethora of complexities into the supply chain and generate the need for contract logistics service providers to deliver more expertise driven services. Adaptability, transparency, service specialisation, asset & resource collaboration would be the key for the 3PL logistics players to be relevant, sustainable and expand their horizons. Furthermore, with India intending to move towards zero net emissions across industrial sectors, green

logistics will likely become an important segment as more companies will adopt corporate strategies where they are able to reduce their carbon footprint, integrate sustainable solutions and ensure competitive operations. Some e-commerce giants and LSPs have also pledged to go electric, and these trends align with India's own government supported push for greater adoption of electric mobility. I believe there are exciting times ahead for us.

Ravikant Parvataneni: Contract logistics is bound to grow as more and more clients will start to outsource their logistics/SC activities in the time to come so that they can focus on their core business. As the pressure to grow the business increases, companies will start to realise the importance of the value 3PLs bring in and outsource more and more. I believe outsourcing to 3PLs will transform from a mere transactional event to something more strategic in nature.

Mohandas Menon: Contract Logistics or in other words outsourcing of supply chain activities is becoming essential rather than optional. The erstwhile popular arguments in favour of insourcing are fading away against the likely risk awareness. In the post covid era, the appetite for risk taking has diminished and companies are opting for increased outsourcing. Therefore, there are several opportunities on offer for 3PL companies other than the conventional warehousing and distribution services. Vendor Managed Inventory (VMI), Control Tower solutions, integrated logistics solutions (warehousing and secondary distribution under strict SLAs) are some of the latest visible trends. Capabilities (especially IT capability) of individual 3PL companies will play a key role in conversion of some of these opportunities.

Dr. Ashvini Jakhar: Contract logistics will become more and more comprehensive in scope. Clients will seek pay-per-use solutions that can easily help them experiment and scale at the same time. Access to high-quality contract logistics services will be democratised by players like Prozo in the ecosystem.

THE YEAR THAT WAS 2022

The year 2022 proved to be an incredible year for all of us… with the Indian economy quickly getting back on track, the government rolling out logistics-friendly policy measures or the fast-developing infrastructure in the country, the reasons are many to rejoice. This year, Celerity also achieved many milestones… starting with hosting month-on-month path-breaking insightful webinars where the industry experts offered nuances into each facet of supply chain. Recently we also successfully concluded our maiden day-long conference, an offshoot of our highly successful Supply Chain Tribe Awards. September 2022 also saw our magazine getting monthly. What an eventful year! Here we recapture some of the most captivating insights of industry veterans that will kickstart your Year 2023 perfectly…

Yogesh Bellani Founder, Uttishta Partners

I believe there is no secret sauce to success. All brands that make it big are brands that stay relevant to the consumers’ needs. As long as companies are solving problems in a manner that consumers are looking for, they will stay in the game and rule the market. Brands need to build trust among their consumers and trust is an outcome of consistently delivering on set expectations, at the same time, brands need to stay relevant to changing times by bringing about changes to their products & processes. Brands that consistently deliver and exceed the expectations of their consumers are the ones that survive and sustain in the long run.

WAREHOUSING INFRA

Hemaraju Vasanthakumar, Leader, Udaan

Grade A warehousing holds promise from an end user viewpoint. The requirement of such advanced and sustainable warehouses is paramount across the industry. If you look at the e-commerce industry, automation is quite prevalent there. In that case, quality of the floor or levelling is not that important, whereas for FMCG players or other manufacturers, quality of floor is extremely important because they use pallet trucks. The moment they start using industrial pallet trucks of 17m height, quality of floor becomes crucial. Otherwise, throughout the life of the warehouse, occupiers of the warehouse suffer due to suboptimal quality. That’s the reason we have to educate investors who are getting into warehousing as a developer. They need to build warehouses as per special industrial needs. What used to be the scenario two decades back has completely transformed today and we need to move ahead and not behind if we want to be in the race to survive and sustain our market share.

Warehousing is on a three-dimensional growth path. The three dimensions are length, breadth, and height. In terms of length, growth across the length of the city – suburban to urban. In terms of breadth – growth across the breadth of the nation from Tier I to Tier II & III cities. In terms of height, it is the increasing importance of mezzanine floors in warehouses and development of multi-storey warehousing facilities. Over the last 10 – 15 years, India has evolved from going-down era or ‘Go-down Era’ to modern ‘Grade-A Era’ in warehousing. India is growing its portfolio of world-class Grade A warehouses in the past 4-6 yeas. A correlation with the global markets shows the potential for growth is even higher. If we compare the warehousing stock of the USA, we are talking about a total stock in excess of 13 billion sqft. Chicago as a city has 1.2 billion sqft. of warehousing supply. It implies that the potential of warehousing in India is humungous.

Chandranath Dey, Head - Operations, Business Development, Industrial Consulting & PAGI India, JLL

STRATEGY

The multi-echelon strategy has today become the need of the hour for omnichannel. For me, everything boils down to the 3C principle – Customer Experience, Capacity Management, and Cost Optimization. Keeping these three principles in mind, it’s necessary that we start consolidating omnichannel SCM strategy so that you can use the same to grow your scale with various suppliers and get the better on your margins. Companies should deploy business analytics to gauge customer preferences, which will ultimately help in keeping the right inventory in place. We need to focus on intelligent customer insights and data analytics to continuously finetune your supply chain strategy. Ultimately there are these key parameters that companies need to imbibe in order to sustain and survive in challenging times – Be nimble footed, continuously use technology; and draw insights regularly from consumer behaviour to action them to go after your business goals.

From a consumer’s perspective, there are only three supply chain metrices that matter in CPG products – Availability, Freshness and Pricing (which is influenced to an extent by cost). Supply chains, which are designed around managing these metrices are the most efficient ones and have the most business impact. Global optima vs local optimization as a supply chain practice is something that I really believe in and in my opinion, companies which can incorporate this always have an advantage over the long term. A classic example around this is – let’s say if an organization tries to optimize its inventory without considering its impact on either upstream (i.e., suppliers) or downstream (i.e., B2B customer partners), while it may achieve its results of working capital or revenue in short term but always has an impact over long term. While there is no ideal state, it’s a journey, which is worth taking.

Elon Musk once stated a very interesting statement, “The supply chain stuff is really tricky.” For me, the supply chain is like nature, and it exists everywhere. To ensure longevity, organizations need to be foresighted. They should constantly validate the business operating model to assure continuity and growth. Future proofing of the supply chain to encompass agility and higher customer satisfaction levels is critical. Superior customer experience is not accidental in an omnichannel ecosystem, but a result of constant efforts and a customer centric strategy interwoven with the organization DNA. Customer experience proves to be the new brand and will be the key driver for the growth of the organization.

The pandemic has led many international players in the textile segment to think of a China plus strategy, which would not have been the case earlier. So, global, and domestic brands have already started working on alternatives and with its existing infrastructure, India is a natural investment destination. Having said that, can we replace China completely? Probably no, but we can take a bite, which will be significant for the overall prospects of the Indian textile industry. For a quantum leap, the Indian textile sector must switch gears to export now. That is where future growth lies.

TK Balakumar, Chief Operating Officer, BigBasket

Gaurav Davda, Head – Corporate Finance & Strategic Initiatives, Jindal Worldwide Ltd.

Avinash Dhagat, Vice President – Operations, Honasa Consumer Pvt. Ltd.

Dr. Samir Yerpude, Leader – Digital & Connected Customer, Tata Motors Ltd.

Subhrajit Majumder, Vice President, Ecom Express

Omnichannel is no longer a corporate buzzword these days. It is just not a ‘Good to have’ business plan, it is a MUST to have to survive in the current times. Omnichannel is not about shopping or ecommerce alone. It is also about enhancing customer service whether it is through chatbots, customer care numbers, email communication, or an in-person approach. Omnichannel is a multifaceted coordinated approach to move products end-to-end. There are four basic tenets of a successful omnichannel strategy – it should have an integrated supply chain strategy; inventory transparency across all the channels; technology footprint; and right alignment of the operations strategy with the marketing strategy.

Prof. Subodha Kumar, Paul R. Anderson Distinguished Chair Professor of Marketing and Supply Chain Management and the Founding Director of the Center for Business Analytics and Disruptive Technologies, Temple University’s Fox School of Business

Organizations should stop thinking of AI as a one-off solution. Instead, leaders should drive using analytics and AI. Indeed, the path to implementing AI-centric SCM function is not without challenges, but none of the hardships are unique to AI. For instance, lack of quality data is one of the top impediments that often prevent firms from implementing AI. You can either fix the core data problems that plague your organization and implement advanced analytics or stay behind the AI-centered innovation. The modern-day’s AI algorithms, coupled with cheap and efficient cloud processing power, have created a ripe environment for SCM function to democratize AI across all supply chain pain points.

This is very important for supply chain managers to understand that data is the new oil. In order to build resilient, responsible, and sustainable supply chains, companies need to (i) collect real-time data from various courses (e.g., sales data, reviews, social media data, images, videos, etc.) both within the organization and from outside organizations, (ii) analyze them rigorously using machine learning methods, and (iii) develop prescriptive analytics-based solutions. To collect more real-time data, companies need to move more towards blockchains, sensors, IoT, etc. Similarly, to develop meaningful solutions based on prescriptive analytics, companies need to change their objective functions by including reverse logistics, carbon footprint, landfills, life saved, etc. Companies should also work on sharing data in an effective manner so that both the response time, and the safety stock, can be reduced at the same time.

Aswini Thota, Analytics and AI leader, Bose Corporation

COLD CHAIN

The government’s initiative of incentivizing the cold chain sector is one big step in pushing the growth of cold chain infrastructure. The government further strengthened its intent by announcing India Cooling Action plan, which seeks to integrate all cooling efforts in technology, manufacturing, efficiency, and environmental issues. The future developmental perspective should be based on the methods and ways of operating or controlling commercial refrigeration that will save energy. Cold store operators should think of ways and control strategies to save energy. The use of renewable energy sources such as wind and solar is likely to play a role in reducing the environmental impact of the energy used by cold stores. There should be improvements in the form of changing equipment, which are not energy efficient and technically worn out. These improvements have very short payback times and should be done in accordance with the latest laws and policies that govern the sector.

There is significant effort to move towards a Green cold chain, reducing carbon emissions, moving towards carbon neutrality by siting at optimal environment-friendly locations, efficient layouts, building structures with high thermal efficiency, highly efficient refrigeration systems, water savings, use of renewable energy). IT is making inroads to drive a) end-to-end visibility from “farm to the point of consumption”; b) reduce order to fulfilment lead time. IOT/ sensors help monitor efficiency and shelf-life parameters to drive efficiency across the value chain. With a click, one can now get live updates of any temperature abuse across the chain irrespective of geography. Advent of prefabricated structures for cold chain, advancements to efficient vehicle designs, CNG-based systems, smaller vehicles (for intra-city movement), passive cooling/ Eutectic systems that work on biomass or Solar for precooling and distribution are few other areas.

In adopting the latest monitoring, control mechanisms, and automation in data capturing, the Indian cold chain sector has a long way to go. The key to such transformation is to localize the technologies to suit the scale of Indian industries and by creating flexibility in the system to accommodate and modify the elements of complex supply chains. The upcoming trends that need to be fully embraced by companies are- RFIDs, Wireless sensor networks (WSN) and Internet of Things (IoT); Time-temperature indicators (TTI), etc.

The demand for cold chain services is growing rapidly and there is tremendous opportunity for organized players to take strategic positioning. As per estimates, India needs at least half a million ton of additional cold storage capacity and another I lakh reefer trucks to plug the current gap, while demand continues to grow. Consumption in India is amongst the highest in the world and the need for such infrastructure will be directly proportional to the growing demand in consumption. Kool-ex has added warehousing to its portfolio and our first integrated cold chain facility is under construction at Khopoli, which will house 20000 pallets and will cater to the entire spectrum of cold chain users. With our lead position in cold chain trucking & warehousing, we will emerge as one of the largest integrated cold chain solutions providers in the country.

Asheesh Fotedar, COO, NCCD

Rajeev Ranjan, Managing Director, McDonald’s India North and East

Dr. Anju Bharti, Dep of Management, MBA, Maharaja Agrasen Institute of Technology, Delhi

Rahul Agarwal, Managing Director, Kool-Ex Cold Chain Ltd.

SUPPLY CHAIN VISIBILITY

For me, visibility is all about providing a complete picture. Visibility is also about equality of information availability across all stakeholders. Accessibility to accurate data is a key visibility trait which decides the quality of the decision for the business. Importance of Visibility is age old. Even Dhritarashtra had to use Sanjay during Mahabharata. Covid has catalyzed data democratization with Digital as the enabler. Since we are discussing this in the context of supply chain then visibility also helps you check the flow. For me, the supply chain is all about the flow. Visibility highlights the performance of keeping our promise to the consumer. If the flow is smooth, the consumer gets whatever he or she wants at the right time, right cost, in the right amount with the right quality. This then should be visible in the results.

In the last 2 years, we have seen accelerated adoption of digital technology, which has improved visibility drastically, which in normal scenario would have taken 4-5 years to adopt all the processes. Today visibility has become a hygiene factor for us. Everyone required a common standard of visibility across organization whether it was our internal teams or external customers/channel partners. It has become such an integral part of operations today that people cannot live without that level of visibility. Customer demand is putting the pressure on order fulfilment and to ensure that we live up to the expectation of service levels of this order fulfilment, we need to have that visibility of information, which is required to measure the service level, optimize cost, plan our execution, and build trust & transparency in the entire system.

Gaining visibility into the supply chain supply chain ecosystems is large, multilayered, and complex. It is necessary, however, to fully understand third-party vendors beyond the first tier or most critical suppliers. Companies should drive supplier risk-reduction activity by building constructive support for suppliers into their third-party cyber risk management program. They should alert the vendor when new risks emerge and provide practical steps for them to follow to solve the problem. Until third-party cyber risk is a clearly defined mandate at the executive level, it is difficult to effectively coordinate resources and define clear strategies. Companies must integrate continuous supply chain monitoring with appropriate reporting to the board and senior executives.

We are moving towards a digital age where the government is an important partner and catalyst in bringing about this change. Over the past few months, we have been working very closely with the government. For example, the country’s toll infrastructure is being digitized, vehicle databases and driver databases have been made accessible to businesses and even the Indian Railways APIs are being leveraged to bring down logistics costs in the country. The Unified Logistics Interface Platform (ULIP) is slated to provide for efficient movement of goods through different modes. It will greatly reduce logistics costs and save time, assisting just-in-time inventory management and eliminating tedious documentation. With the help of ULIP, organizations like ours will be able to provide real-time information to all stakeholders and improve efficiency of supply chain operations.

Pankaj Kapoor, Vice President Digital, Tata Consumer Goods

Hitesh Arya, Senior General Manager, UltraTech Cement

Anil Kumar Pandey, PhD Candidate (Finance & Economics), National Institute of Industrial Engineering (NITIE)

Harshit Shrivastava, Founder & CEO, Intugine Technologies

The value vs. cost has been an age-old debate in any organization. The way I look at it is that any organization incurs costs to derive a certain value. My cost is someone else’s revenue, and my revenue is someone else’s cost. Whether it’s me or someone else, we incur a cost to derive a value. Only if spend some monies but it’s not yielding a value, it’s a cost. If the cost is enabling you to drive productive outcomes, then it’s a value. For us, visibility has always been a Value Creator. Today businesses are a lot more complex. They are a lot more national and global. In such scenarios, the importance of visibility gets even higher.

ELECTRIC MOBILITY

We are cognizant that the benefits of a sustainable business far outweigh the cost of transition. Transitioning to EVs will not only have environmental benefits but will also reduce delivery costs with time owing to the fluctuating fuel prices. We also believe that EV bikes and low-speed scooters will enable the participation and improve productivity of diverse segments - such as women and existing cycle owners - in the mobility economy. Over 95% of Zomato’s emissions are classified as Scope 3 and within that category, Packaging and Transportation are the main sources of emissions. Electrifying our fleet can help us reduce our emissions from delivery operations by an estimated 27%, which implies transportation is a significant contributor to our vision of sustainable growth.

The EV market is in an acceleration mode. The future of EVs is great. We are seeing exceedingly good demand in the electric three-wheeler segment; we have an order book of up to 50,000 vehicles already. Over the next five years, 75 to 80% of three wheelers will be electric and we strive to be a big part of it. Building the products that will give efficiency, range, and safety as well as lower cost of ownership is suited best for the e-commerce and delivery Market. The logistics players are now looking for end-to-end solutions and we at OSM are delivering exactly that through our electric three-wheeler fleet and technology.

The surge in demand for ecommerce and intra-city logistics which is expected to grow four times from $84 billion in 2021 to $350 billion by 2030 has enabled the logistics industry to shift towards EVs. Some of the largest e-commerce businesses are now actively electrifying their delivery fleets. Another key market driver for EVs is the booming demand from the retail segment; EV retail sales in 2021-22 reached 429K units, a threefold increase from 134K units in 2020-21, according to data gathered by automotive dealers’ group FADA. As India moves towards sustainable mobility, EVs are taking centre stage, led by a thriving EV ecosystem led by start-ups as well as government support and incentivization in the sector. EVs will be mainstream in the coming years, given their lower TCO and maintenance benefits over ICEs.

Pramod Gupta, Chief Financial Officer, and Head – Supply Chain & IT, Arvind Fashions

Anjalli Ravi Kumar, Chief Sustainability Officer, Zomato

Uday Narang, Founder & Chairman, Omega Seiki Mobility

Vani Rikhy Mehra, AVP, Sales & Mobility, Euler Motors

We need to change the way people perceive electric vehicles, specifically electric three wheelers. When one mentions the word ‘electric vehicles’, people tend to think of the Tesla and similar brands, not realizing that electric three wheelers are already ferrying people daily across the country. There needs to be more awareness regarding the Made in India three wheelers segment. Electric vehicles’ running cost is up to 70% less than the IC engines, and they also incur much lower maintenance costs due to fewer running parts. The cost of the battery is also expected to decrease over the next few years as adoption of electric vehicles increases. Also, the upfront costs for electric three wheelers are lower when compared to their four-wheeler counterparts.

While the EV space is still at a nascent stage in India, it is developing at a fast pace. While, on the one hand, there are many OEMs like old auto companies working on EV development in the country, at the same time there are start-ups entering this area. Companies are also working with customers by putting a lot of R&D to improve the models. We, at Dabur, are committed to moving ahead with early adoption of these green vehicles in our supply chain for last-mile distribution. Transportation is one of the major pillars of the FMCG industry with hundreds of vehicles being used for distributing everyday-use products across the length and breadth of the country. Vehicular emissions are one of the largest contributors to pollution and EVs are the future to not just keep pollution levels in check but also reduce our carbon footprint, as a nation. It is a matter of great pride for Dabur to take the lead in driving low emissions transportation in the FMCG industry.

PROCUREMENT AND SUPPLIER MANAGEMENT

Parida, Senior Consultant, SpiceJet Ltd.

The best part of Supply Chain, which is close to life’s learning, is unforeseen events. You can never forecast everything but yes you can always forecast a few. Companies need to be innovative. They say, “Crisis is the mother of all innovation”. They need to expect the unexpected. Companies shouldn’t run on a tight rope expecting cost reduction. They need to have a good relationship with every vendor or supplier because at the time of crisis, the team always works. One disgruntled vendor or supplier can ruin the whole chain. Leaders need to lead the team with empathy. They need to be resilient by designing from the heart and owning the narrative. Lastly, companies MUST embrace technology and have a better forecast. They should focus more on resilience through visibility and better risk management.

Digitization is now as essential as a mobile, which has replaced landline phones. Whenever we talk about suppliers, we should have a visibility of partners we are working with and whom we can further get on-boarded. Supplier on-boarding process must be able to facilitate companies to investigate the compliances of vendors, their risk management, extending existing suppliers, better data quality, self-service capability in the system as well as transparency & speed. In short, supplier on-boarding is the first software that one should start with when they think of digitization of procurement.

Hansveer Chandok, Promoter, Syndicate Motors

Samrat Sehgal, Head – Supply Chain, Dabur India Ltd.

Saurabh Palsania Executive Director, Dalmia Cement (Bharat) Ltd.

Nihar

Kanishk Negi, Sustainable Procurement Director, Schneider Electric

Keeping sustainability lens helps the leadership take a long-term horizon in decision making. It helps to identify the future trends at an early stage, so to enable early preparation. Another important consideration is the drastic evolution of environmental regulation globally, over the past decade. Several new regulations have been introduced that mandate the corporations who are operating global supply chains responsible for the actions of their suppliers and to require sustainability due diligence, public report on the hot spots and remedial actions. In many cases, countries link these disclosures to financial instruments. All these regulatory shifts are making sustainability a baseline now for procurement operations. On circularity, we are working with our raw material suppliers on material innovation and development, to make the materials more sustainable, for example, with lower environmental footprint, throughout their whole life cycle including when being disposed. We are also revamping our packaging to make sure that we phase out all the single use plastics and use only recycled cardboards in packaging by end of 2025.

Ethical & responsible focus can be very wide from company to company and industry to industry. What is important to succeed in this area is to have a top-down approach from the leaders of the company. They need to set an example as to how they view the company should be doing, taking the cue from not only within the leadership or the company but also taking the cue from the customers’ requirements. Some customers mandate that you do certain things in the area of ethical and responsible. So, you take the queue from there to deliver what the customer expects and sometimes also take leadership to demonstrate to the customer that you also are doing it as your own initiative. You have to start off with the basics first because the range of suppliers’ maturity is very wide, creating awareness, what is your scope and your program, what’s important to your company, how is it important to your company and to your supply base, you need to emphasize whether is it climate change, deforestation or decarbonization or whichever aspect that you choose and then you have to prioritize as you can’t really tackle all at once. The process needs to be step by step, starting from basic and graduating till advanced level. Companies need to learn how to crawl first before they start walking, learn how to walk first before running. Only then are you able to measure your emissions target.

Digitization really solves not just a procurement problem, but also a traceability and compliance problem. By digitizing, we have a single source of the truth, and we have the ability to trace the steps and that for a lot of organizations is the key for digitization. Besides, we also enhance our knowledge because the information is available in one single system. We can have that information shared with different departments across the globe and of course, we can start comparing side by side in a much easier way. All of that used to happen on paper earlier, through the right deployment of technology, we have the vision about it but between that kind of comparisons, global knowledge basis and really being able to communicate as a team internally and of course to extend it out to supplier networks that’s where the digitization fits in. If I extend that to an overall supply chain network and digitization, the extended benefit is the ability to get supplier pools where you can have people joining into a network and you can start sourcing for suppliers.

Peter Woon, Senior Director – Supply Chain, Cushman & Wakefield

Derek Lee, VP – Pharma & Healthcare APAC, JAS Worldwide