Scripting a New Age Supply Chain Story

Sunil Bharadwaj is a passionate supply chain and operations professional with over 20 years of experience in diverse industries. He has handled supply chain strategy, planning, logistics and distribution, operations excellence, and automation projects during his stints with L&T, Wipro, Nitco, Pidilite, Abunayyan Holding, Raymond, Future Consumer and most recently, Qwixpert Consulting. He is an APICS CSCP (Certified Supply Chain Professional) and CLTD (Certified in Logistics, Transportation and Distribution).

When the whole world came to a grinding halt, supply chain proved its mettle and became the talking point across the corporates’ boardrooms. What used to be at back burner for decades took the front seat in tough times. On the back of technology, automation, talent and most importantly resilience, supply chains around the globe worked exceptionally well and kept the economic wheels going. As the aftereffects of pandemic are still lingering, it’s time now to make the supply chain stronger and even more futureproof. Sunil Bharadwaj, Experienced Supply Chain and Operations Management Professional, through this opinion piece, offers the changing landscape of supply chain that we will witness in the next few years…

WE owe it to the Covid-19 pandemic that struck a couple of years ago and brought the world to its feet. The supply chain management function has gained centrestage since then. Logistics and supply chain professionals came to the fore and used all their experience, innovative spirit and situational awareness to ensure that essential items such as groceries, masks, sanitizers, cleaning products, medicines, etc., reached every nook and corner of the country.

The term ‘Supply Chain’ was increasingly being mentioned everywhere. More and more people wanted to understand what we did for a living and began to appreciate the nuances around making the right product available to the end consumer/ customer at the right time in the most cost-effective manner. We saw images of empty store shelves that ran out of tissue paper, drinking water, etc., bringing to light the hitherto ‘taken for granted’ role of supply chain operations professionals globally.

EVOLVING LANDSCAPE

When we talk of an evolving landscape, it means that our function and different industries at large, are in a constant

state of change and flux. Modern supply chain management is as much an art as it is a science. Key global trends and developments such as inflation, recession, rising input costs, currency depreciation, climate change, weather events, geopolitical tensions (The Ukraine war), trade disputes (USAChina), food and energy crisis, etc., have made sure that supply chains are in a constant state of vigil and that they need to continuously evolve in the light of local and global developments that shape our industry. The term, VUCA, would become the norm rather than the exception going forward. I really don’t think we could ever witness a pre-Covid era that was fairly stable and predictable.

NOTABLE SUPPLY CHAIN TRENDS AND DEVELOPMENTS

Now that I have set the context, it would be relevant and worthwhile to provide an overview on the major trends and developments influencing our practice…

De-globalization: The jury is still out in this. All these decades, supply chain networks were designed to take advantage of lower operating costs and therefore tended to get more diversified and global. Materials travelled long distances through different geographies along their journey till they reached the final customer/consumer. However, we have began to notice the potential risks with respect to this approach.

In certain industries, such as semiconductor chips, fertilizers, minerals and metals, edible oils etc., supply shortages have wreaked havoc on production and delivery schedules. Terms such as near-shoring, re-shoring, and friend-shoring have become common place. Companies in various sectors have been moving manufacturing and sourcing out of China to countries such as India, Vietnam, Bangladesh, Malaysia, and Indonesia. However, this is easier said than done and would take considerable amount of time and investments. Developing regional and local value networks would not be easy. But we are on that journey – thanks to enabling policies such as Production Linked Incentive schemes (PLI), the National Logistics Policy (NLP), ‘Make in India’, and the GatiShakti National Master Plan in addition to ‘Bharatmala’ and ‘Sagarmala’ projects.

Flexibility and Resilience: Another supply chain strategy that is gaining traction is ‘Flexibility’ within the supply chain system. Building redundancies aids in superior capacity management. The need to react and respond nimbly to changing market dynamics and customer expectations is of paramount importance and would provide competitive advantages to businesses competing in the same sector or industry. This would require supporting strategies and initiatives that result in shorter reaction times without compromising on product/ service quality and customer service.

The resilience of supply chain and logistics networks has been tested severely in the last decade or so given the scale and frequency of global weather events and other disasters across the globe. Supply chains today are constantly looking at ways and means to become more resilient – in terms of their ability to bounce back and restore operations as quickly as possible.

Risk Management: Supply chain vulnerability has never been higher than it is now. Therefore, there is a need to devise and deploy suitable people practices, policies, processes, procedures, tools, and systems to enable supply chains to predict, manage and mitigate various risks that emanate from the upstream side all the way to the last mile journey. In this context, the seminal work done by leading supply chain and operations

The new age business models entail significant investments in the forward as well as reverse supply chain networks and related infrastructure. The birth of ‘Dark Warehouses’ that were created by quick commerce food and grocery players has modified the customer service paradigm. However, not all businesses have been successful, and some service providers have had to relook at their dark warehouse network from a profitability standpoint. The growth of e-commerce and quick commerce has also led to a manifold increase in warehousing and transportation infrastructure. Several technology-enabled logistics startups are collaborating with D2C, B2B, C2C, B2C and B2B2C brands to ensure timely availability of products through intelligent and efficient last mile delivery networks.