RECAP

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…

LEADERSHIP

WAREHOUSING INFRA

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.

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.

Hemaraju Vasanthakumar, Leader, Udaan

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

STRATEGY

TK Balakumar, Chief Operating Officer, BigBasket

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

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

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

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.

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.

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

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

COLD CHAIN

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.

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.

SUPPLY CHAIN VISIBILITY

Pankaj Kapoor, Vice President Digital, Tata Consumer Goods

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.

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

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

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.

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.

ELECTRIC MOBILITY

Anjalli Ravi Kumar, Chief Sustainability Officer, Zomato

Uday Narang, Founder & Chairman, Omega Seiki Mobility

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

Hansveer Chandok, Promoter, Syndicate Motors

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

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.

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.

PROCUREMENT AND SUPPLIER MANAGEMENT

Nihar 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.

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

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.

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

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

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.

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