Special Report
Strengthening the PACT between 3PLs & Users
Interview
Dhritiman Chakraborty, Director Operations, Ingram Micro India Ltd.
Railways expert Lalit Chandra Trivedi
Dear Readers,
As the pulse of India’s commerce quickens, the role of our supply chain and logistics sector becomes even more paramount. This edition underscores some pivotal facets that are shaping the future of our industry.
Firstly, with the surge in digital transformation, technologies empowering proactive decision-making are no longer a luxury but a necessity. Advanced analytics, artificial intelligence, and real-time data tracking are revolutionizing how businesses predict disruptions, optimize routes, and manage resources. These tools not only provide a competitive edge but also ensure that the supply chain is agile, responsive, and ahead of the curve.
The synergy between Third-Party Logistics (3PL) service providers and their clients stands at the crux of this revolution. A robust, trust-filled partnership ensures both parties benefit from enhanced operational efficiencies and shared growth. As these relationships deepen, both 3PLs and their clients are set to gain from collaborative innovation, shared insights, and streamlined processes.
Lastly, it’s time we amplify our advocacy for rail freight. Railways, a backbone of our great nation, present an eco-friendly, cost-effective, and efficient alternative. As road congestion and environmental concerns amplify, promoting rail freight not only addresses these issues but also unlocks new growth avenues.
Join us and the conversations as we delve deep into these subjects, celebrating the innovations and partnerships driving India’s logistical prowess. Together, let’s shape a future that’s sustainable, efficient, and poised for growth.
Warm Regards,
Charulata Bansal Publisher Charulata.bansal@celerityin.com
As per Gartner, 95% of supply chains must quickly react to changing conditions, but only 7% are able to execute decisions in real time. Our panel discussion on ‘Decision Centric Supply Chain’ explored the impact of technologies such as digital twins, AI and ML, advanced analytics, etc., for realtime decision execution roadmap. Our panelists unequivocally emphasized that decision centric supply chain unlocks a new opportunity for supply-chain planners by giving them the ability to automate decisions based on business rules and strategy.
Our panel discussion on 3PL and CEOs discussed topics encompassing strategies on talent management, sustainability practices, and ways to meet customers’ expectations and provided a poised platform to both parties where the user companies discussed their concerns and 3PLs responded to them with the right solutions for them to drive growth. Staying relevant and true to their customer requirements, 3PLs are determined to change the course in their favor and strike a win-win deal for both – USERS & 3PLs.
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Through this article, Sanjay Desai, Co-founder & Regional Director, Humana International (S) Pte Ltd., offers key elements that companies need to consider while developing an efficient and effective cold chain distribution network…
Industry veteran Lalit Chandra Trivedi asserts that there is a need to develop an ecosystem, which promotes private participation in Railways.
Dhritiman Chakraborty, Director Operations, Ingram Micro India Ltd., states that planning for the future of the supply chain is like making a map of a huge, everchanging ocean, where each wave could change the way an organization works.
Editor: Prerna LodayaDISCLAIMER: This magazine is being published on the condition and understanding that the information, comments and views it contains are merely for guidance and reference and must not be taken as having the authority of, or being binding in any way on, the author, editors, publishers who do not take any responsibility whatsoever for any loss, damage or distress to any person on account of any action taken or not taken on the basis of this publication. Despite all the care taken, errors or omissions may have crept inadvertently into this publication. The publisher shall be obliged if any such error or omission is brought to her notice for possible correction in the next edition.
The views expressed here are solely those of the author in his private/professional capacity and do not in any way represent the views of the publisher. All trademarks, products, pictures, copyrights, registered marks, patents, logos, holograms and names belong to the respective owners. The publication will entertain no claims on the above. No
form or by any means, without prior permission of the publisher. All disputes are subject to the exclusive jurisdiction of competent courts
“Presently Railways is largely a government operated organization, that inherently limits its growth. As we have seen in the case of sectors such as Airlines, Telecom, Banking, etc., post the entry of private players, the sectors have witnessed an explosive growth. To have similar experience in Railways, there is a need to develop an ecosystem, which promotes private participation in Railways. Railways is a capital-intensive sector. Leasing of Railway’s resources and assets will be an important enabling measure to promote private participation in the Railway sector and its consequent desired growth,” highlights industry veteran Lalit Chandra Trivedi…
We would like to understand from you the transformational landscape that rail freight has witnessed over the years as you have been a part of this journey for the past four decades.
L C Trivedi is an expert on Indian Railways. After spending 38 years in various executive positions, he superannuated as General Manager (East Central Railway) as its executive head in Secy to Government of India’s grade. He had postings in multiple geographical areas of Indian Railways. His main contribution in Railways are commencing production of Vande Bharat coaches and other highspeed coaches in ICF Chennai as Principal Chief Mechanical Engineer for Indian Railways and many foreign Railways. Currently he is CEO of his firm LCT Engineers engaged in providing consultancy services to corporates in India and abroad. He has done Railway centric management courses from HEC Paris and Carnegie Mellon university Pittsburg, specially designed for Top Railway executives from multiple countries.
In the last four decades, Railways globally and particularly in India have undergone radical changes. Plain bearing, vacuum braked rolling stock has been replaced by Roller bearing, stainless steel, air braked stock. Mechanical signaling systems have given way to advanced electronically interlocked signaling systems. Implementation of state-ofthe-art anticollision system KAVACH is underway on Indian Railways. Project Unigauge has improved efficiency of transportation with MG and NG sections (except for mountain trains for tourism & heritage) having been converted into BG. It may be noted that at the time of independence, 40% of Indian Railways track was either MG or NG.
Soon IR will boast of the first major Railway system to have 100% electrification of tracks, leading to seamless runs of locomotives. In 1983, the year I joined Railways, IR’s total originating loading was around 200
million tons, which today is around 1600 million tons. ICF coaches have been replaced by high speed LHB and Vande Bharat coaches. Terminals have become bigger. Container traffic has grown in a big way. Trains are longer and faster. Every day around 15km of new track is being laid, from a single metro system at Kolkata, today 15 cities boast of their own metro with another 30-40 aspiring.
In the last few years globally, environmental concerns have given a big push to the Railways as it’s fuel consumption is 1/7th as compared to Roadways and 1/15th as compared to Airways. In fact, countries like France are not permitting domestic flights between cities, which can be covered by trains within 4 hours. In a nutshell, we have come a long way.
What are the challenges plaguing the growth of cargo transportation through inland waterways in the country?
Growth of Inland waterways in India has been affected by problems like low draft, presence of old bridges which do not permit passage of bigger ships, and locally erected pontoon bridges which
block through movement and are erected by local administration at number of places to facilitate the movement of local population in the absence of regular bridges. The only worthwhile movement is in the Northeast region where mighty Brahmaputra has facilitated cargo movement. Coastal movement, however, both along the West and East coastline, is flourishing for facilitating movement of commodities like coal, cement, etc.
What are Kisan Rails? Why couldn’t they take off?
Kisan Rails were introduced to help farmers to transport their produce to markets. They were started during the Covid period when the passenger train services across India were suspended. This resulted in empty passenger platforms where the Kisan trains could be received, and their consignments could be unloaded. This well-conceived move faced difficulties with the resumption of passenger trains post Covid as neither slots were available on platforms to receive these trains nor the place to unload their consignments. To revive them, there is a need to develop
a complete ecosystem on a timetabled basis with dedicated sidings, rail head warehouses for perishables farm goods, etc.
How could Kisan Rails have helped to handle the tomato crisis and what is needed to revive them?
Kisan Rails can be an excellent logistical input to transport perishables. They can transport huge quantities of perishable goods in double quick time. Following models can be followed:
b Running Refrigerated container trains for transport of perishable goods, which can drop off loaded containers and pick up empty ones from time tabled stations which can be distribution hubs. These refrigerated containers can also act as temporary warehouses for places where currently cold warehouses are not available.
b IR has large numbers of Airconditioned ICF coaches which are being condemned on account of their replacement by LHB/VB trains.
b Just as non-AC ICF coaches have been successfully converted as automobile carriers, opening a new revenue stream for IR, old ICF design AC coaches can be converted into Refrigerated Parcel Vans for transporting perishables. This will also add a new traffic stream to the revenues of the Railways.
In addition to the above, there is a need to set up cold storages at Rail heads. Till such time regular cold houses can be set up, refrigerated containers can be kept at Rail heads, which can double up as transportation cum warehouse modules for perishables. Kisan Trains need to run as timetabled express trains with first and last mile connectivity to Kisan Mandis. All these need to be done by private enterprise by suitable enabling measures and support system.
Why is the speed of execution of Highways by NHAI (National Highway authority of India) faster than the execution speed of Railway’s Dedicated Freight corridor by DFCCIL (Dedicated Freight corridor
Measures to be taken to push more traffic through clogged Rail arteries of Indian Railway system…
b De-bottlenecking the congested routes
b Entry of Private players in a big way to improve productivity and bring down cost as experienced in Road and Airlines sector
b Expansion of terminals
b Expeditious commissioning of multimodal cargo terminals
b Improvements in the design of wagons
b Increasing speeds and lengths of freight trains by longer loops increased powering
b Early commissioning of DFCC
b Expansion of network
b Improvement in asset reliability
b Relook at freight train braking system, which has forced Railways to put restrictions on speed
The first and foremost reason has been Railway’s inability to facilitate entry of private players / entrepreneurs in Railways in a manner that led to the explosive growth of Road and airlines sector. A dialogue with the logistics industry needs to be initiated to find ways and means for participation of private sector in Railways.
The construction of Railway lines is basically more complex than construction of highways. The associated engineering, involving advanced signaling and overhead electrical equipment adds to the complexity. Through tolling of its assets, NHAI has been able to build a successful model to finance its projects. It’s possible for road projects to undertake minor changes in alignment midway in Road projects, which are amenable to sharper curves and gradients.
The land acquisition process was much simpler in NHAI on account of the fact that it is easier for a road network to undertake minor changes in alignment during the course of execution on account of unforeseen ground situation. For
DFCC an original decision was taken to build it alongside existing Rail alignment. Historically the land alongside railway tracks was inhabited with authorized as well as unauthorized construction. Clearing this land for DFCC’s alignment proved to be difficult.
What’s your take on electric train for freight? How do you the feasibility in India?
Electric Trains are best for Railways. Electricity is cheaper, produced locally, and electric locomotives are very powerful (12000 HP), enabling the running of heavier trains at higher speeds. Going further, it will also be possible to provide renewable sourced electricity for running electric locomotives. Electric trains, are in my opinion, should be the most preferred way of running trains in India. 100% electrification of IR tracks has enabled seamless runs of freight trains leading to higher average speeds. By electrically coupling multiple locomotives it has been possible for Indian Railways to run 1100 T trains on regular basis and occasionally even 1500+ T trains.
With the commissioning of a large portion of DFCC corridor, the problem of path has also been resolved to a great extent. Another noteworthy improvement is the running of double stack container trains on the Western DFCC corridor providing through connectivity to ports on western coast like Mundra, Pipavav, Hazira, etc., giving a push to EXIM traffic.
You have recently voiced your opinion on the use of hydrogen for running Road Trucks is more difficult than running Railway Trains with Hydrogen. Can you elaborate on this? Use of hydrogen for running Road Trucks, in my opinion, is more difficult than running Railway Trains with Hydrogen. Unlike a train, which has to remain confined to railway tracks, a road truck should have unhindered access to every mile of road. India has the world’s 2nd longest road network at 6.3 million kms. Even presuming that a hydrogen powered truck can run for 500 kms before next fueling, we need around 12000 fueling points served by extremely costly fleet of road tankers for hydrogen replenishment. Transportation
of Hydrogen needs to be done either by compressing it or liquefying it. Both require special costly paraphernalia. Special arrangements have to be made for storing it. The whole ecosystem of storage and distribution across India is not a financially option. There are safety issues too associated with handling hydrogen. As we know India is likely to use coal for production of electricity for minimum 2-3 decades more, till then to divert renewable electricity for hydrogen production will not be in the national interest.
The first priority for green hydrogen should be for points where the points of production and consumption are same, like fertilizer plant, steel plants, hydrogenation of food items like oil, etc. How much will a green engine cost? Using $160,000 as the baseline for representative vehicle costs for a long-haul Class 8 truck, DOE projected the following purchase costs: $457,000 (186% higher) for a battery-electric heavy truck, $324,000 for a plug-in hybrid version (up 103%) and $265,500 for a hydrogen fuel cell-powered one (66% more). Since the German company which produced first Hydrogen train has decided to discontinue their production on viability account, viability of hydrogen powered internal combustion engine for truck also looks remote.
There are many reasons why green hydrogen cannot be a fuel for the Railways in India. Some of them are:
b Electricity produced from Renewable source of energy required for producing green hydrogen should first needs to be used for replacing electricity presently being produced from burning coal and other fossil fuels. Diversion of electricity produced from renewables for any other activity will be sinful before eliminating fossil fuel consumption for electricity production.
b After ensuring 100% production of electricity by renewables, green hydrogen needs to be utilized for industries where it can be consumed at the place of production to avoid prohibitively costly transportation and storage involved with Hydrogen. Railway by nature needs its fuel
Five strong statements that claim the usage of Railways for transportation as one of the safest and efficient means…
b Railways has already electrified 100% of its tracks (few leftover sections will be electrified by the end of current financial year). This, besides improved efficiency of Rail transport, has made it cheaper and amenable to harness renewable based electricity. Electric Trains can be stopped from a remote location by switching off electricity supply leading to safety enhancements.
b Double stack containers on the Western DFCC have revolutionized EXIM transport.
b Railway energy consumption is 1/7th that of Road and 1/15th that of Air, making it environment friendly.
b Railway shoots up manpower productivity as 1 train is provided with 1 set of crew replacing close to 200+ trucks with as many crew sets.
b The safety record of Railways as compared to Roadways is way better.
distribution network to serve hundreds of points spread all over the length and breadth of the network.
b Indian Railways will shortly achieve 100% electrification of its tracks. It can easily use directly renewable sourced electricity. This will ensure that no change in locomotive design and other equipment and parameters of Railway ecosystem is required which otherwise can be a costly
exercise. This will also avoid major loss of energy which takes place in producing, transporting, and distributing green H2L.
b Locomotives on account of vehicle design requirements has to be around 20 m long with width and height determined by the envelope of maximum moving dimensions permissible on Indian Railways. The special arrangements required for
storing onboard liquid hydrogen onboard a 6000/9000 HP locomotive the standard locomotive on Indian Railways doesn’t appear to be feasible.
b Energy cost of IR will increase minimum 3 folds if it uses Liquid Hydrogen directly even if all other issues are taken care of.
You have raised a pertinent concern in your statement – why should it cost 50$ to transport a ton of steel from Jamshedpur to Mumbai over Rail? For every ton of steel produced, 3 tons of raw material needs to be transported. The problem becomes worse as most of the steel plants are land locked and depend for 80% of their transportation on Railways. Steel and Coal are among those commodities, which majorly depend upon Railways for their logistics needs.
Transportation by Road almost costs double. Further frequently wagons earmarked for iron ore are diverted for coal transportation which takes priority over requirements of steel industry whenever coal stocks dwindle
Image by aleksandarlittlewolf on Freepikin thermal power plants who target to maintain a coal stock for around 14 days consumption working at full capacity.
Movement through slurry in pipelines or waterways have not been established in India. Waterways otherwise the most eco-friendly transportation system, suffer in India from pontoon bridges, low draft and have not emerged in India as dependable means for bulk transport. Higher transportation costs is becoming a handicap for Indian steel sector.
IR segregates commodities through a classification table for tariff purposes resulting in different rates for different commodities for same tonnage and distance. Commodities like food grain, salt, fertilizers cost less while transportation of some others like oil/ coal /steel cost more. So, while cost for transporting 1 ton of salt over 1000 km is ₹ 931, for oil/ steel it is $₹1670 per ton, for coal, it will be 1891/-.
In comparison, road transportation rates are fixed for an identical truck load between same destinations. The unstated strategy in Railways is to charge more for a commodity with inelastic demand for transportation by rail as alternatives are not feasible to maximize freight earnings. IR’s problem is empty haulage
Corporates using Railways for transport of their goods should be able to claim carbon credits as the carbon footprints of Railways are 15% of Roadways, so a corporate switching from Road to rail should be able to claim carbon credits.
Recommended strategy:
b Cut down staff cost presently costing 60-70% of the total input cost
b Use of technology to optimize wagon utilization by eliminating empty running
b Expeditious completion of DFCC, particularly commencing work on Son Nagar - Dankuni (Kolkata) 500 kms stretch where even tendering process is awaited
b Mechanizing loading and unloading processes to cut down terminal detentions
b Action plan for increasing permissible axle loads
b Increasing average speeds of good trains from 25kmph to 50 kmph
of wagons like BOXN wagons in return direction, unlike covered wagons used for transportation of cement / food grain, etc., which are loaded in both directions.
There is a need to bring down the cost of Rail Transportation. This is possible and is needed to attract cargo to Railway. With 15% fuel consumption as compared to Road, higher staff productivity (a train with one set of crew replaces around 200 trucks with as many sets of crew), it is feasible to bring down costs of Rail Transport in a significant manner.
Making asset leasing market for Railway Transportation system in India… pls share your stance… Railway is a capital-intensive mode of transportation. To ensure wider participation of logistics players, it is essential to develop leasing markets for paths, Rolling stock, Terminals/ yards, repair depots and workshops so that with marginal capital a company is able to obtain on lease each and every resource needed to complete cycle of rail transportation chain from A terminal to
Photo by Thomas Thompson on UnsplashTerminal B and further either back to Terminal A or to a new Terminal C for self-use or for handing over to a third party at any point in the supply chain. Just as Toll based financing of highways has resulted in explosive growth of highway network, leasing market can do the same for expansion of Railways.
There is a need for parking depots where at nominal charges, trains / rolling stocks, not required for any reason, can be parked safely till such a time they are in demand again. Parking slots will be required for rolling stock to be scrapped where these will be cut and auctioned like ship breaking yards.
There is a need for agencies to trade in paths, freight, passenger trains, warehouses, stacking areas, breakdown services, rolling stock maintenance depots and for other assets with the rates displayed on exchanges fluctuating by the demand supply pulls and pressures. Leasing will ensure productive utilization of Railway resources with a consequent increase in Rail-borne cargo.
Railway needs to leverage its environment friendly nature. While electric road trucks are nowhere to be seen, Indian Railways are nearing 100% electrification of tracks, leading complete switchover to renewables for running trains. Commissioning of major portion of DFCCs has established connectivity to major ports on Gujrat coast like Mundra, Pipavav, Hazira with double stack container trains, which has led to productivity gains, also needs to be leveraged.
Similarly commissioning of Eastern DFCC up to Son Nagar has resulted in the diversion of coal traffic from CIC area (BCCL, CCL, NCL) to DFC, relieving IR network to run more trains.
All this leads to only one conclusion that decline in IR traffic is due to lack of entrepreneurial attitude of bureaucracy in attracting cargo to make Railways lucrative to logistics players. Developing Rly resources leasing markets is essential to propel Railways into higher orbit by unleashing entrepreneurial spirits of logistics players.
How can private players play an equal role in bringing rail freight to equilibrium with other modes of transportation?
As stated earlier, private players have played a major role in exponential expansion of banking, telecom, road, airlines, and other sectors. Enabling policy guidelines which facilitate unhindered entry of private players into Railway transportation will result in similar growth trajectory for Railways. The private sector needs to be encouraged to acquire special purpose freight trains. We have already seen significant improvement in rail-borne automobile traffic, fly ash movement, food grain movement, consequent upon entry of privately owned trains by entrepreneurs. Recently AP Moller acquired 10 trains on lease and synchronized their movement with sea lines with terrific results. There is a need to encourage the setting up of private sidings to overcome the Railway’s handicap of first and last mile connectivity. Participation of the private sector in setting up Gati Shakti Terminals is already being encouraged by the government with suitable enabling policy guidelines.
Development of locally developed anti-collision system, ‘Kavach’ was also done with the active collaboration of Research Designs and Standards Organisation (RDSO) and private industry players. Recently mega orders for the acquisition of wagons, locomotives, and Railway coaches (Train sets) have been placed with private
players. The only discouraging move recently has been to put a temporary ban on Wagon manufacturers to accept orders from private sector. Hopefully these instructions will be withdrawn shortly. How do you foresee India becoming a transportation giant in the future?
Current transportation volume in India is around 5000 million tons. Railway currently accounts for 1500+ million tons and the remaining is contributed mainly by Road. There is some contribution of coastal shipping too. Inland waterways, as discussed earlier, contribute very little. The National Railway Plan envisages increasing Railways’ share to 45% from present levels of around 27%. It is expected that by 2050 the total transportation volume will be around 16000 million tons with Railway contributing around 7500 million tons almost five times the current volume. Similarly, the share of roads is expected to be around 8000 million tons, i.e., more than twice the current figure. With Indian economy growing at 6%+ and daily average addition of 15+ kms of railway track and highways at 50+ km, the forecasted volume is likely to be achieved. 100% electrification of Railway tracks is already giving a major push. Running of double stack container trains on the Western DFCC will help environment and productivity.
The government has realized the importance of logistics sector as indicated in the comprehensive Gati Shakti Policy. Government has resolved to bring down logistics cost of 15% presently borne by India Inc. to 8-9% at par with the cost in developed world. Towards this objective, the government has taken multiple actions to strengthen the logistics sector of the country. The important ones are:
b Major fund infusion in Railways
b Setting up 100 + Gati Shakti terminals, towards this end, land lease charges for utilization of Railway land for terminals has been substantially brought down. The lease period has been extended to 35 years and annual lease charges have been brought down to 1.5%.
b Administrative powers of field officers have been increased to enable expeditious execution of projects.
b Expansion of highways and Railway network is going at breakneck speed.
b Mega tenders for acquisition of rolling stock acquisition have been floated.
b An excellent financing model to commission highways has been put in place through tolling and viability gap funding.
b GST policy, UPI based transactions, Aadhar based identification, and several other measures to digitize the economy have enhanced transparency and improved efficiency.
Third party logistics service providers and the user companies have had the love-hate relationship since eons. While on one hand, user companies need to have a long-lasting partnership in place with the logistics specialists, it’s their unfulfilled wish lists that come in the way of establishing a strong connect. Thanks to the advent and advancement of new age technological solutions and 3PL companies’ innovative service basket, the scenario is fast shaping up in the right direction. Our panel discussion on 3PL and CEOs discussed this very topic in detail with topics encompassing strategies on talent management, sustainability practices, and ways to meet customers’ expectations. This forum provided a poised platform to both parties where the user companies discussed their concerns and 3PLs responded them with the right solutions for them to drive growth. Staying relevant and true to their customer requirements, 3PLs are determined to change the course in their favor and strike a win-win deal for both – USERS & 3PLs. Excerpts…
What are your expectations around from 3PLs in terms of building scale, investing in digitization and how are they keeping up with sustainability objectives?
Umesh Madhyan, Vice President – Logistics, Hindustan Coca-Cola Beverages Pvt. Ltd.: Our expectations from 3PLs are very extreme because at Coca Cola, we deal with fast moving beverages. The number one expectation which we today are struggling with is how do 3PLs handle scale. Our warehouses handle 400 to 500 trucks in a day, right now there is no such warehouse we have in this country, which is run by a professional 3PL. Not that we have not tried, we've tried multiple times, but we have struggled in achieving the desired efficiency while managing a large-scale warehouse. The way India is growing and the way the per capita is growing in India, we see that this business might double in the next three to five years and there will be a day soon when we will have
to handle 800 trucks a day from those warehouses. Obviously there will be more consolidation because the strategy will be more tuned towards singlet-touch where the goods will reach directly to the consumers. How exactly do we have an operation which is so efficient for a very large-scale throughput and take care of safety because when there are 400 trucks at a time, there is a huge risk of people with material handling equipment running here and there and a lot of handling happening within the warehouse, which creates a lot of pressure. Next is if you travel abroad, there are large multi-user ASRSs built and invested by 3PLs, which is a scalable 3PL operation. Lastly, there is a great challenge posed by attrition of people. If you have a good 3PL as your partner, most of these challenges get resolved to a great extent. These are basically 3-4 problems we are struggling, and we are expecting 3PLs to evolve to that level where we can actually try such experiments and we are still open for
evaluating anyone who claims that they can solve all of these.
Akhil Srivastava, Director – Supply Chain Operations, AB InBev: There are a lot of opportunities in the supply chains of today and hence our expectations have also heightened with time. Supply chains are evolving, and we place immense emphasis on Customer Centricity where we are looking at rolling back the cost so that I can pass on the benefits to the customers as well and hence looking at Cost, Quality, Service and Efficiency as the four levers based on which we select our 3PL partners. The supply chains of yesterday's and as of today work on a concept of KPIs. I don't think the supply chains of tomorrow will be that. I was in Boston recently at MIT and learned a concept called KLI (Key Learning Indicator), which means the supply chains of tomorrow need to be anticipatory in nature so that they are resilient and agile. Hence, we expect the
3PL providers to help us make our supply chain more agile and resilient with KLIs –Real-Time Insights. Another interesting concept that I would like to bring to fore is 3V –
1. Everyone wants to Increase Velocity to serve to the customers from Zepto delivering in 10 minutes to a 30-minute Domino's promised delivery.
2. The second V is about Reduced Variability because you want to give customers the same standard product – quality, service and other measurement metrics on order by order.
3. The third V is Increasing Visibility. I think that's where the digitization of the supply chain comes into picture in helping companies to bring the 3V Concepts alive and to really look
at KLI so that we are a continuous improving Machinery. I think these are the latent opportunities for 3PLs of today.
Binu Vijay Kumar, GM - Supply Chain, Thermofisher Scientific: We are looking for 3PLs who could scale up/down at short notices in these uncertain demand scenarios. Digitization is the future, but this should be customized based on client requirements. Sustainability is the key and to achieve this, I believe the usage of solar power, LED lights, tree plantation in the campus, EV deliveries and lesser fuel consumption should all be the key areas.
What are you looking from your 3PL partners?
Umesh Madhyan: We are not looking at cost reduction opportunities, for us it’s more about building and sustaining
right partnerships. We are looking for a partner who can tell us how we can bring down cost of our supply chains in a timely manner. We want someone who comes and says that if you give me your inventory, your inventory guarantee stands with me. The partner doesn't go on limited liability or any such clause in his agreement. We are looking for someone who can ensure 99.5% fulfilment of all orders I get every day by deploying the best techniques, technological tools, automations, etc. I believe that technology will play a major role in making that happen. For instance, if we get partners who are increasing cost by 3-4% and guaranteeing service and cost reduction, we will be happy to have them onboard.
Akhil Srivastava: I strongly support Peter Drucker’s famous quote, “Do what you do best, outsource the rest”. What
UMESH MADHYAN, Vice President – Logistics, Hindustan Coca-Cola Beverages Pvt. Ltd.
CHETAN KUMRIA, MD, XCELL Supply Chain Solutions Pvt. Ltd.
DR ARUNACHALAM R, MD & CEO, IBOB & Board of Director, SF Logistics Pvt. Ltd.
AJIT JANGLE, MD, FM Logistic
AKHIL SRIVASTAVA, Director – Supply Chain Operations, AB InBev
BINU VIJAY KUMAR, GM - Supply Chain, Thermofisher Scientific
The gap in striking the right balance can come in two ways, either in the form of cost or service. If the users do not pay the right cost to the 3PL, there can be gaps in providing the desired service and similarly if the 3PLs do not provide the right service, then there can be gap in expectations from the users. These gaps can be eliminated in the beginning of the relationship by agreeing to the right service at the right cost and then by doing structured and timely reviews between the user and 3PLs to eliminate any gaps that may arise during the course of relationship.
I see and how the future for supply chain unfolds is that supply chain will become a competitive Advantage going forward. We are witnessing a transition where now with different channels to serve whether it's e-commerce, modern trade, or other RTM markets, the cost factor would not be the most important factor because there are more important pillars to address such as the customer centricity and service level agreements. Added to that, capacity and capability will start emerging as crucial decisionmaking aspects because if we are looking at our supply chains to be competitive advantage and we are still looking to outsource it to achieve scalability and flexibility, we would like to have a 3PL partner who has the competitive advantage in achieving these two critical parameters, which means deeper pockets to serve as well. This is how user companies should approach their 3PL partners.
Binu Vijay Kumar: The KLI directly impacts the KPI. I see a lot of people coming up with very good facility, setting up very good infrastructure but what truly distinguishes a CFA from a 3PL is the mindset – a culture of continuous improvement. They should be able to solve our problems. It’s not just about service level agreements and we deliver the desired outcomes. We really need to partner with them in order to achieve the desired outcomes. We deal with high value equipment, and we don’t have repeat
customers or unlimited customers. Our target segment is very limited owing to the segment we deal in. In that scenario, if someone has purchased a million-dollar instrument and that instrument requires a spare part replacement, I can’t go back to the customer quickly. You would be surprised to know that the spare part from the factory to the warehouse just takes close to 48 hours. Once it reaches the warehouse, it used to take 5-6 days to reach the customer. To solve this problem and reduce the TAT, we brainstormed with our 3PL partners and the result of this is that we can now deliver the part in just about a day. It’s all about effective partnership. Our partner felt committed towards achieving the objective that we had set out for ourselves, they started contributing on their own and the result has been phenomenal after that. The collaboration increased to such an extent that they have taken all the KPIs to an alltime high. The crux of the matter is that it’s not about the cost, it’s more about the extent to which the 3PL partner is willing to go to solve a particular problem faced by the users. In the end, if you have a 3PL partner who deliver you the desired result, they deserve a premium because at the end of the day, it should be a winwin situation for both.
Where do you think 3PL companies are lagging in terms of meeting customers’ expectations? How can they overcome new obstacles faced by users?
Akhil Srivastava: We must lay an immense thrust on long-term partnership with co-investment to create and share efficiency from operations. 3PLs should look at bringing technology framework with WMS, TMS, FMS and automation to lead and grow the digitization for building businesses of tomorrow. The new age tech of AI and ML would be an added layer along with RPA and RTTVP to enable insights and analytics based demand servicing for profitable and sustainable business. Most important is mindset for long-term and shared goals so that the association grows from transactional to long term partnership. Only with that view can we expect synergies and strategic association as an extended enterprise.
Binu Vijay Kumar: I firmly believe that partnership is lacking, which further results in lack of trust. We should collectively do things together and deliver exceptional results…recognize teams involved and that builds trust and partnership. Technology is crucial but the ability to spot where technology can make a difference is more important. They relationship needs to transition from Transactional to Value addition. Otherwise, the discussion would only be around costs.
Chetan Kumria, MD, XCELL Supply Chain Solutions Pvt. Ltd.: As trusted business partners, 3PLs can play a major role in overcoming obstacles that are faced by customers in the areas of service, cost and managing working capital. The customer needs to work with 3PLs as a partner, share key details with them and take their inputs on key factors that would be used to overcome obstacles faced by them.
How can user companies align their expectations and goals with their 3PL provider and monitor their progress?
Akhil Srivastava: User companies require to develop 3PL as partners of choice (choose wisely basis capacity, capability and progressive mindsets), then work with these suppliers for long term shared vision to grow and share the value. The relationship should be symbiotic and synergistic with shared common goals, KPI and success metrics. Companies should also use their global expertise to benchmark and learn from
As modern supply chains can be intricate and involve multiple stakeholders, coordinating and managing these complexities can be challenging for 3PLs. Witnessing the crucial role of technology, implementing new technologies can be tedious and time-consuming. Due to the increase in data sharing and connectivity, data security and privacy are significant concerns to protect the user sensitive information from potential breaches. Keeping up with the various regulations and compliance standards of different regions can be challenging and Time-sensitive. Meeting the demands of fast and reliable last-mile delivery, especially in urban areas, poses challenges related to traffic congestion, limited delivery windows, and rising customer expectations on Sustainable Supply chain solutions. Overcoming these obstacles demands a combination of innovative solutions, strategic planning, eco-friendly practices, and a customercentric approach.
global best practices to emulate with pride successful case studies to build an optimisation operations excellence. Going forward optimization is working on deep tech for real-time insights and digitization. The future is about debottlenecking the unknown to realtime alerts for immediate intervention and action. Companies must move from firefighting to responsive and agile supply chains through the effective use of automation and digitization.
Binu Vijay Kumar: Once you partner with a 3PL, consider them as an extended Team. Motivate and recognize them to go above and beyond to achieve larger interests of the organization.
Chetan Kumria: Any long-term business partnership is based on trust and that can be gained by providing a cost-effective, high-performance service by the 3PLs. In order to align their goals with 3PLs, user companies must set up joint realistic goals and then track the progress through a structured KPI metrics review system. While doing this, use of technology and digital tools is key to success. It is important to have a long-term business partnership with customers for 3PL companies and to manage this relationship, performance and trust are the two key pillars on which this relationship grows. At the same time, providing high standards of service at the right Cost to Serve will drive this relationship to new levels.
Dr Arunachalam R, MD & CEO, IBOB & Board of Director, SF Logistics Pvt. Ltd.: For a successful partnership, aligning expectations and goals with a 3PL provider is essential. Recognize that the logistics landscape is dynamic. Be prepared to adjust expectations and goals as market conditions change or new opportunities arise. On this standard, the user companies must have a clear goal and objective along with an open and Transparent communication. Collaborative planning of the parties can improve better visibility and lead to favourable outcomes. A defined KPI and metrics adhering with the goals of the company should be used to measure the success of the partnership. Regular Review meetings to discuss the progress, challenges and opportunities emphasis on the continuous Improvement culture should be MUST.
What are the key performance matrices based on which you select a 3PL partner?
Akhil Srivastava: Here are seven of the most useful KPIs for supply chain leaders to consider when determining whether their 3PL is delivering services that are in line with their company's expectations:
Dock-to-stock time: One of the duties of a logistics service is receiving products into the warehouse and placing them in the correct storage areas, so the dockto-stock KPI measures the length of time between taking the items into the
We are witnessing a transition where now with different channels to serve whether it’s e-commerce, modern trade, or other RTM markets, the cost factor would not be the most important factor because there are more important pillars to address such as the customer centricity and service level agreements. Added to that, capacity and capability will start emerging as crucial decision-making aspects because if we are looking at our supply chains to be competitive advantage and we are still looking to outsource it to achieve scalability and flexibility, we would like to have a 3PL partner who has the competitive advantage in achieving these two critical parameters, which means deeper pockets to serve as well. This is how user companies should approach their 3PL partners.
warehouse dock and adding them to inventory storage. Warehouse workers cannot pick and dispatch products until they are put into stock and become available for order fulfilment. A fast dock-to-stock time increases product availability and helps avoid the need for order cancellation because items are out of stock.
Cost per unit shipped: Cost per unit shipped indicates how much it costs the company to fulfil orders. Although supply chain leaders can measure and segment this KPI in various ways, it most commonly indicates the end-toend cost to pick, pack and ship a product to its destination. This KPI can consider the price of storage, labor, packaging materials and other factors to indicate an all-in cost. It's most useful to companies for tracking costs over time and managing order fulfilment expenses that negatively affect profit margins.
Inventory accuracy: Inventory accuracy is a comparison of physical stock levels in warehouse storage to the expected stock levels in the 3PL's warehouse management system software. WMS inventory levels can vary depending on the number of products received at the warehouse and order fulfilment, among other factors. Processing products can lead to errors, so 3PL providers use physical counts of inventory to ensure that their WMS software accurately reflects actual stock levels. Any difference between WMS and physical stock will negatively affect inventory accuracy. Companies and their 3PL provider can use the inventory accuracy KPI to identify inventory shrinkage. Some of the causes of inventory shrinkage are inaccurate picking and packing, problems when receiving goods and theft, among other factors. A 3PL can then investigate
the cause of the shrinkage. Order accuracy: Order accuracy is the percentage of orders that workers picked and packed correctly. That process begins with the picker selecting the correct products based on the WMS's request. The picker then packs those items, secures the packaging and prepares the product for distribution. Order accuracy is an important KPI because customers will likely lose trust in a company over time if they receive the wrong item. In addition, replacing an item costs the company more money because workers must repackage and replace the erroneous order.
Shipping accuracy: A shipping accuracy KPI is the percentage of products and packages that are delivered to the correct destination. Missing products can lead to significant frustration for customers, so shipping accuracy is critical for minimizing wastage, costs and customer dissatisfaction. If shipping accuracy is too low, a 3PL provider will likely work with the distribution and transportation departments to reduce errors.
On-time shipping and delivery: The ontime shipping KPI typically indicates the length of time between the 3PL provider receiving the order and the time when the product is dispatched to its destination, while on-time delivery usually indicates the amount of time it takes for the customer to receive their product. Some 3PL providers combine these two factors into one KPI, while others measure them separately. These KPIs are crucial for meeting customer expectations. Companies are under more pressure than ever to provide fast order fulfilment and delivery, so supply chain leaders must closely track their organization's shipping and delivery processes.
Reverse logistics and return processing: Part of selling products is dealing with customer returns, and the process of returning goods to a 3PL is known as reverse logistics.
These KPIs enable businesses to turn around, seamlessly build KPO and systems for reducing waste, move from inefficient to optimized working.
Chetan Kumria: In my view, the selection criteria on which companies select 3PLs are based on their experience, team, cost effectiveness, service performance, capability and technology. Apart from this, other factors are geographical footprint and capacity for future expansion.
What are the challenges faced by 3PLs in addressing the demands of users?
Ajit Jangle, MD, FM Logistic: Despite growing demand, logistics in India is plagued by numerous challenges that can vary depending on the industry, location, and specific user requirements. These challenges include cost pressures, high returns and poor infrastructure.
Businesses today often have intricate supply chain requirements that involve multiple suppliers, carriers, and distribution channels. Managing and optimizing these complex networks is one the biggest challenge faced by the industry today. Additionally, there is insufficient integration of transport networks, information technology and warehousing & distribution facilities. At FM Logistic India, we have an efficient and well-connected distribution network. We have a wide-spread transportation network having 20+ branches across India with 100+ dedicated vehicles. Our WMS and TMS are well-equipped to track all material movement activities
and provide stage-wise information to our customers.
Recently we introduced our 1st Control Tower facility in India. In India, we are among the top contract logistics companies that offer this technologydriven supply chain service that will enable our customers to significantly optimize their logistics cost through FM’s gain share mechanism. Through this new offering, FM Logistic provides our customers all across the country with centralized transportation control tower services that offer end-to-end visibility.
Our new offering provides consolidation, optimisation and efficiency – all the prerequisites for a robust supply chain. In today’s volatile business environment, it is imperative to build and maintain robust and resilient supply chains. Through this new service, we are certain that we ensure the future readiness of our customers’ supply chains. By means of this technologydriven solution, we will efficiently enable our customers to expand their business horizons.”
Trained manpower is essential both for the third-party logistics sector as well as manufacturing and retailing sectors, which is very weak at a practical level, i.e., IT, driving and warehouse as well as at a higher strategic level. The disorganized nature of the logistics sector in India, its perception as a manpower-heavy industry and its lack of adequate training institutions have led to a shortfall in skilled management and client service personnel.
At the warehouse level, FM Logistic India has deployed the Supervisor Development Program through which existing warehouse associates can become Team Leaders. The eligible associates are evaluated based on their performance.
FM Logistic in India has also invested in the digitalization of its various functions, notably WMS (Warehouse Management System) and TMS (Transport Management System) which offer high-quality service and realtime visibility to customers. Our WMS, known as Trariti, is 100% customizable and integrated with our TMS.
Poor facilities and management are the reason for high levels of loss, damage and deterioration of stock, mainly in the perishables sector. Part of the problem is insufficient specialist equipment, i.e., proper refrigerated storage and containers, but it is also partly due to a
lack of training.
Through NG Concept, FM Logistic’s sister concern, FM Logistic India is developing state-of-the-art MultiClient Facilities (MCF) to cater to the growing logistics industry in India. Our first owned MCF in India is located in Farrukh Nagar, Gurugram and is spread across 7 lakh sq.ft. This Grade A facility is the first in India to receive LEED Gold-certified warehouse in India and the best LEED-rated logistic facility in the country. The facility enjoys strategic access to Kundali, Manesar and Palwal expressways for faster connectivity to all major consumption centres in the North. The MCF has a storage capacity of 100,000 pallet positions and provides a dedicated area for co-packing and other value-added services. Furnished with best-in-class safety and security features, the MCF offers cost-efficient quality, storage and handling services. We also operate Grade A MCFs in Mumbai and Bengaluru. All our facilities are built on par with international standards and are equipped with the best-in-class infrastructure. Every care is taken at these facilities to ensure the safety and security of our collaborators
Where does the gap lie in striking the right balance between the 3PLs and the users’ expectations? How can they be removed?
Chetan Kumria: The gap in striking the right balance can come in two ways, either in the form cost or service. If the users do not pay the right cost to the 3Pls there can be gaps in providing the desired service and similarly if the 3PLs do not provide the right service, then there can be gap in expectations from
the users. These gaps can be eliminated in the beginning of the relationship by agreeing to the right service at the right cost and then by doing structured and timely reviews between the user and 3PLs to eliminate any gaps that may arise during the course of relationship.
Dr Arunachalam R: To strike the right balance and remove the gaps between the 3PLs and the users’ expectations, comprehensive Service Level Agreement (SLA) that outlines responsibilities, KPIs, reporting formats, and penalties for non-compliance should be followed. The parties should share insights, feedback, and concerns to improve visibility and decision-making. Evolve rapidly to the changing business environment and embrace change management practices. Build trust through consistent performance, transparency, and accountability. Implement robust performance monitoring mechanisms, by providing insights into key metrics and identify areas for improvement. Acknowledge and respect cultural differences, whether they pertain to business practices, communication styles, or work expectations. Encourage cross-functional collaboration between the user and the 3PL. Set realistic and achievable expectations by allocating sufficient resources, both in terms of time and personnel, to manage the partnership effectively. Invest and concentrate in training, technology, and strategic support to ensure the success of the collaboration.
Ajit Jangle: Striking the right balance between 3PLs and users' expectations can be challenging, and the gap can emerge
Global trade, increased competition, and the desire for improved logistics efficiency have necessitated organisations to re-examine their competitive strategies. Organisations have realised that their supply chain and logistics function form a critical part of their business operations. This increasing awareness that competitive advantage does not only come from product offerings but also through the upgrade of the delivery system has been critical in the evolution of logistics from its former supporting role to a more strategic role in recent years. To keep up with these ever-changing requirements of customers, 3PL service providers need to continuously evolve and enhance their service offerings.
in several areas. Here are some common issues and ways to address them:
Communication and Transparency: Lack of effective communication and transparency between 3PLs and their clients can lead to misunderstandings and unmet expectations. At FM Logistic India, we ensure to maintain operational transparency through real-time tracking systems. We conduct regular review meetings with our customers on a monthly basis to ensure that our offerings are in line with the requirements and that operational gaps, if any, are taken care of. Regular, open communication is key. Both parties should maintain clear lines of communication and share information regarding inventory levels, order status, and potential issues. Technology, such as real-time tracking systems, can enhance transparency.
Service Level Agreements (SLAs): Misaligned SLAs can lead to discrepancies in performance expectations. Customers may expect faster service than what the 3PL can provide. At FM Logistic, our team of legal experts ensure that every SLA is well-defined, realistic, and mutually agreed upon. We regularly review and update them to reflect changing business needs and market conditions.
Scalability and Flexibility: Owing to the e-commerce boom fuelled by the Covid-19 pandemic, customers' business needs change rapidly. Oftentimes, 3PLs might struggle to adapt quickly to these changes. At FM Logistic, we draft flexible
agreements that allow for scalability. We possess the capability to adjust staffing, resources, and infrastructure to accommodate the needs of our customers’ business requirements.
Technology Integration: Incompatibility between the 3PL's systems and the user's systems can lead to inefficiencies and errors. FM Logistic India has implemented paperless operations with barcode scanning and GPS tracking at our warehouses. We have also invested in the digitalisation of our various functions, notably WMS and TMS that offer high-quality service and real-time visibility to our customers.
Quality Control and Compliance: Logistics, being an indispensable function of any business operation, it is imperative to ensure that the highest level of quality is delivered while strictly adhering to compliance requirements. At FM Logistic India, we are committed to providing logistics services as per our customer requirements. We strive for excellence and our guiding values are recognition of the individual, commitment and credibility.
Data Security and Privacy: As a 3PL service provider, we are legally obliged to protect our customers’ data from being lost or misused. Data cybersecurity is also crucial to preventing the reputational risk that accompanies a data breach. At FM Logistic, we implement robust data security measures and ensure compliance with data protection laws.
User companies require to develop 3PL as partners of choice (choose wisely basis capacity, capability and progressive mindsets), then work with these suppliers for long term shared vision to grow and share the value. The relationship should be symbiotic and synergistic with shared common goals, KPI and success metrics. Companies should also use their global expertise to benchmark and learn from global best practices to emulate with pride successful case studies to build an optimisation operations excellence. Going forward optimization is working on deep tech for real-time insights and digitization. The future is about debottlenecking the unknown to real-time alerts for immediate intervention and action. Companies must move from firefighting to responsive and agile supply chains through the effective use of automation and digitization.
Closing the gap between 3PLs and users' expectations requires ongoing collaboration, communication, and a willingness to adapt to changing circumstances. It's essential for both parties to work together to identify and address any issues that arise and to continuously strive for improvements in their logistics partnership.
Dr Arunachalam R: 3PL companies have made significant progress in meeting customers' expectations, but there are areas which requires strategic improvement. The system faces gaps in providing real-time, end-to-end visibility of information, easy data sharing and integration and flexible operations across the entire supply chain which is expected by the customers. Timely and clear communication regarding their shipments, delays, and other supply chain events, retaining skilled logistics professionals, especially those well-versed in technology and data analytics also plays a vital role in leading to dissatisfaction. In this current era, Sustainability and Ethical concerns in commitment to eco-friendly practices, may involve challenges related to sourcing, transportation modes, and reducing carbon footprint.
To overcome these obstacles and continue meeting customers' expectations, 3PL companies must develop agile supply chain strategies, Develop strong partnerships and work towards seamless integration of systems. Prioritize effective and transparent communication with customers, providing proactive updates and solutions to address any disruptions. Explore innovative ideas in Sustainable Logistics sector. Flexibly address the challenges and focus on customer-centric solutions.
How are 3PL companies in India catching up with their global counterparts in meeting the everevolving expectations of customers?
Dr Arunachalam R: There are various strategic measures that 3PLs have adopted and are continuously working on to serve to the ever-evolving expectations of customers. These include:
• Help moving towards doing business digitally: Cut down the cash collections from Kirana stores or avoiding the cash on delivery - As India is moving into digital world, we took the responsibilities of making that happen. We ensure the delivery team
carries the required means for getting the digital payments. We have been effectively doing this for the past two years.
• Extremely fast deliveries: Another customer asked us to pick the product from the warehouse within a minute and reach to their customers in 10 to 15 minutes. We have been doing this for many months across India.
• Help India moving to Electric Vehicles: There has been a growing demand to reduce diesel trucks and increase the EV deployment. We have been able to successfully participate in this movement on a pan-India basis and deployed about 50 such trucks. By these cases, we want to bring to fore our tailormade solution proposition for our customers as we don’t believe in offering run of the mill services. Our solutions are always based on our customers’ specific requirements.
Three years back I visited a large distribution centre of our group outside India. The facility is about 500,000 sqft, certainly a gigantic one. Only 10 operators are working in that facility because everything is controlled through technology. This certainly gives speed, accuracy and less operating cost. Whether India needs such an advanced technology, decision is purely based on the usage.
Ajit Jangle: Global trade, increased competition, and the desire for improved logistics efficiency have necessitated organisations to re-examine their competitive strategies. Organisations have realised that their supply chain and logistics function form a critical part of their business operations. This increasing awareness that competitive advantage does not only come from product offerings but also through the upgrade of the delivery system has been critical in the evolution of logistics from its former supporting role to a more strategic role in recent years. To keep up with these ever-changing requirements of customers, 3PL service providers need to continuously evolve and enhance their service offerings. 3PLs can meet the everevolving customer expectations in the ways below:
Advanced Technology Integration: 3PLs are investing in advanced technology, including warehouse management
systems (WMS), transportation management systems (TMS), and realtime tracking tools. These technologies improve visibility, efficiency, and accuracy in logistics operations, meeting users' demands for transparency and reliability.
FM Logistic India has implemented paperless operations with bar code scanning and GPS tracking at its warehouses. We have also invested in the digitalisation of our various functions, notably WMS and TMS that offer highquality service and real-time visibility to our customers. Our WMS, known as Trariti, is 100% customizable and integrated with our TMS.
Data Analytics and Predictive Analytics: 3PLs use data analytics to optimize supply chain operations. They analyze historical data to identify trends and patterns, enabling better demand forecasting, inventory management, and route optimization. This helps users reduce costs and improve service levels.
Customised Solutions: In today’s dynamic business scenario, it is imperative for 3PL to provide tailored logistics solutions to meet the unique needs of each user. This involves creating customized logistics solutions, such as multi-modal transportation options, value-added services, and flexible warehousing solutions.
Green logistics: Environmental sustainability is a growing concern. 3PLs today need to implement ecofriendly practices, such as optimising transportation routes to reduce emissions and using energy-efficient warehouse technologies, to align with users' sustainability goals. Sustainability is at the heart of our DNA at FM Logistic. We are consistently working towards various sustainable development initiatives, which include diversity & inclusion at the workplace, use of green energy sources for power generation, minimal use of plastic packaging materials at the warehouse, etc. At the global level, we are a proud member of the United Nations Global Compact Network.
Value-Added Services: 3PLs are increasingly offering value-added services beyond traditional logistics, such as kitting, assembly, and quality control. These services provide users with additional support in managing their supply chain
processes.
Omni-channel Logistics: The next generation of business requires logistics networks tailored to the needs of each and every channel. Omni-channel services are the need of the hour and companies are realigning supply chains to cater to omni-channel from the same warehouses.
By addressing these demands and continuously adapting to changing market dynamics, 3PLs aim to provide value-added services that help users optimize their supply chains, reduce costs, enhance customer satisfaction, and achieve their business objectives.
What is the crucial role of technology in achieving the right equilibrium between the users’ demands?
Dr Arunachalam R: Technology plays a vital and transformative role in supply chain. By leveraging technology effectively, 3PLs and users can create a supply chain ecosystem that is agile, responsive, and capable of delivering optimal outcomes while meeting and exceeding user expectations. Users can proactively manage exceptions and disruptions, making informed decisions to mitigate risks by real-time tracking of inventory, shipments and other supply chain activities. Technology facilitates tailored solutions by enabling dynamic routing, adaptive scheduling, and personalized order fulfilment which leads to improved efficiency and cost savings. Automation technologies, such as robotics and AI, streamline warehouse operations benefitting to faster order cycle times, reduced errors, and improved efficiency in meeting demand fluctuations. Predictive analytics and machine learning can anticipate user demand patterns, enabling proactive inventory management and replenishment strategies. Technology platforms and software facilitate seamless communication and optimize stock levels which reduces the risk of stockouts or excess inventory. These systems identify trends, bottlenecks and areas of improvement, contributing to continuous enhancement. In essence, technology serves as the backbone that empowers 3PLs and users to synchronize their operations, share information, and adapt to evolving demands.
The fundamentals of supply chain planning have been around for a long time. They were designed in a way that makes the process the focal point for decisions — whether through strategic planning, sales and operations planning (S&OP), or sales and operations execution (S&OE). Supply chains today need a model that aligns with the demands being placed on their organization. In response, forward-thinking supply chains are turning to decision-centric planning (DCP) for business decision-making. As per Gartner, 95% of supply chains must quickly react to changing conditions, but only 7% are able to execute decisions in real time. Our panel discussion on ‘Decision Centric Supply Chain’ explored the impact of technologies such as digital twins, AI and ML, advanced analytics, etc., for real-time decision execution roadmap. Our panelists emphasized that decision centric supply chain unlocks a new opportunity for supply-chain planners by giving them the ability to automate decisions based on business rules and strategy. Excerpts…
AN interesting research by MIT Centre for Transportation & Logistics highlighted that to harness the full potential of supply chain design, organizations can rely on huge amounts of data and employ decision-making tools of various degrees of sophistication. However, that collected data is not always used to support supply chain decision-making, and that the decisionmaking tools that are employed vary widely across organizations. At the most basic level of decision-making maturity, relevant data is dispersed throughout the organization and basic tools (such as spreadsheet analysis) are employed. The decision-making process is typically siloed and limited to the supply chain functions.
As the decision-making maturity grows, organizations recognize the need for end-to-end decisions and crossfunctional collaboration. They invest in tools that allow them to gain visibility across the organization and enable collaboration between different teams.
In highly mature decision-making environments, the research found a move toward a single data repository, which serves as a common source of truth and is embedded into more sophisticated and widely distributed planning tools. These serve as a major enabler of collaboration between different teams. Supply chain design decisions are no longer confined to one part of the organization, but instead emerge from a multi-stakeholder decision-making process.
Being decision-centric means that
processes are designed to create the best possible outcome for the business, involving decision-makers and other stakeholders. Decision-centric planning requires a rethink of traditional supply chain planning. Organizations must get better at taking advantage of available data, as well as advanced algorithms and other aspects of modern technologies that promise to make them more flexible and adaptable to change.
A BCG study also highlighted the power of decision centric supply chain and stated that for companies to succeed, decision-led planning must become the organization’s drumbeat—optimizing decisions across the supply chain and orchestrating activities across functions (finance, R&D, sales and marketing, operations). Technology platforms
Data-driven decision-making is itself a best practice in the industry, especially in the Supply Chain area. The key aspects that we should keep in mind while building a data-driven decision-making system in our companies are as follows:
• It’s not about just building a tool, its more about the adoption of the philosophy or change in mindset where decision-making at all stages are backed by trustable data
• More often than not, we use our gut-feeling rather than use the data available with us when we have to take a decision. While this is not wrong (because we must use our human intuition and past experiences in our decision-making process) we tend to neglect data because we do not always trust the data. So, the first step is always to get data which is massaged enough for use, and which can be trusted
• The systems we build that use this data is the second step which ensures that we are presented with a data that we can draw insights from when we make decision.
• The next step will be building a framework of which decision can be made by what data. Finally, ensure that we have the flexibility of building a balance between system-driven decisions and human intuition and past experiences. Over-dependence on either can give us less optimal results.
Tannistha Gangulyhave enabled better transparency and connectivity across functions and locations; however, these enhancements are often approached as a systems transformation that is too seldom viewed as a business transformation (which needs to yield financial benefits). At the same time, digital and AI-driven algorithms hold amazing promise when it comes to driving insight to patterns and enabling faster optimization of plans but can be overwhelming in terms of the need for talent.
A Gartner study stated that decision centric planning should be supported by modern, supply chain planning technology that enables the following four capabilities:
Continuous monitoring: In order to make decisions in a timelier manner, companies must be able to quickly detect when an event occurs that requires them to act. A triggering event can be anything that has the potential to disrupt planning and requires replanning, as opposed to cyclic or batch planning that occurs at a regular frequency.
Event impact assessment: When a change in demand or supply occurs, companies must be able to assess its impact. That will guide them in deciding which process to initiate, and which people to involve.
•
• Connect with process owners and stakeholders to understand pain points and easy identification of pain points.
• Mindset to break departmental siloes and make it more data driven than process driven
• Exploring new technologies and thought process how it can be used to used to improve supply chain or procurement process
• Build teams with the right mix of technical and business understanding. It is this combination which can bring the maximum benefit.
Factors to consider in the evaluation include the decision category affected, the impact radius on the supply chain, and performance targets affected by the event in question.
Impact-driven decisions: Next, consideration must be given to whether or not a change is needed — and if so, when. Companies need to weigh business policies, rules, targets and thresholds to guide their decisions about when to take action. Based on an assessment of the decision’s urgency, they might need to initiate a process immediately — or, if the urgency level is lower, wait until a new, formal process cycle starts.
A decision-driven composable process: To increase decision-making agility and speed, processes must become more flexible as well as more frequent. This requires breaking down larger processes such as S&OP and S&OE into smaller pieces, so that new processes can be constructed. Most of these processes created on the fly will only have a lifetime equal to that of the specific decision.
According to KPMG research, Data is the key to better decision-making and there’s certainly no shortage of it. It flows in ever-greater abundance from suppliers, logistics providers, point of sale, warehouse operations, production
lines and inventories, and increasingly from Internet of Things (IoT) sensors on assets and products, large or small. Some supply chain data is well structured, but much is unstructured and can overwhelm decision-makers.
Rather than receiving timely insights, they are deluged by information, which is often peripheral or irrelevant to the key decisions that drive value. On top of this, processing such a huge volume of data can also slow down systems. Cognitive decision centers (CDCs) are data rich environments that make decisionmaking as effortless and effective as possible. They go beyond historical visualization of the supply chain to predict performance across products, suppliers, distributors, customers and more. They enable organizations to balance customer service, risk, cost and working capital decisions, using advanced simulations and modeling to identify the optimum performance trade-offs.
CDCs are focused on wide organizational goals, so that decisions — and the incentives of decisionmakers — are based on what is best for the enterprise. Leaders are able to gain complete supply chain visibility and the ability to make rapid informed decisions to better respond to customer needs and manage performance.
To understand the nuances better
There are a lot of thought process which are evolving today on the practices for data driven decision making. Few of which I can think of and is worth trying and emulating are
An eye and mindset to provide insights to existing process so that it can improve from current.
and bring to our readers a holistic guide towards adopting and deploying decision centric supply chains, we reached out to domain experts on the criticality of decision-centric supply chain. Here’s what they said…
Anand Sharma, Transportation Technology Lead North America CS&L, Mondelez: New age solution requires integration of technologies. In the world of supply chain, any organization must deal with ERP, TMS, Planning systems like APO, Track and trace solution, Dock scheduling, Yard management, etc. For most companies, it is tough to integrate all the solutions seamlessly. It requires very careful, agile processes and small steps at a time to succeed. Change management is a big challenge and leadership should drive the technology adoption and such initiatives shouldn’t be considered IT initiatives, else there are high chances of failures.
Tannistha Ganguly, Global HeadSupply Chain WMS, Kimberly-Clark: Data-driven decision-making is itself a best practice in the industry, especially in the Supply Chain area. The key aspects that we should keep in mind while building a data-driven decision-making system in our companies are as follows:
w It’s not about just building a tool,
its more about the adoption of the philosophy or change in mindset where decision-making at all stages are backed by trustable data.
w Often, we use our gut-feeling rather than use the data available with us when we must take a decision. While this is not wrong (because we must use our human intuition and past experiences in our decision-making process) we tend to neglect data because we do not always trust the data. So, the first step is always to get data which is massaged enough for use, and which can be trusted.
w The systems we build that use this data is the second step which ensures that we are presented with a data that we can draw insights from when we make decision.
w The next step will be building a framework of which decision can be made by what data. Finally, ensure that we have the flexibility of building a balance between system-driven decisions and human intuition and past experiences. Over-dependence on either can give us less optimal results.
Arnab Banerjee, Director – Supply Chain, Smart Manufacturing & AI, Micron Technology: The key tenets of decision centric supply chain revolve around people, process, and technology. They individually have a key role to play
for successful decision making. Apart from these three, access and ability to get clean and quality data and a proficient change management strategy plays a key role. All these must seamlessly come together to provide a successful and well-oiled supply chain to function and transform for further improvements. It is to be noted that people, process, and technology should not be considered separate but rather be made as a part of a holistic methodology or approach as it works out.
Mohammed Arafat Khan, Strategic Alliances and Partnerships, Intugine Technologies: A successful decisioncentric supply chain hinges on strategic management of goods, information, and resources. Key principles include datadriven choices, end-to-end visibility, collaborative integration, risk mitigation, and accurate demand forecasting. Efficient inventory practices, agility, and technology adoption enhance adaptability. Ethical considerations, customer-centricity, and continuous improvement boost sustainability. Performance metrics, scenario planning, and skill development refine operations. This approach forms a dynamic, customer-focused supply chain, driven by data and adaptability.
Irfan Mulla - National Sales Head, Allcargo Supply Chain: Well, a successful decision-centric supply chain encourages cross-functional collaboration, prioritizes agility and
Data-based decision making ensures better collaboration, better and accurate decisions, generate actionable insights, etc. In transport operations, you can automate the detention and demurrage invoices based on the real time events coming from carriers and track and trace solutions like Elixia, Four Kites, P44, etc. Real-time ETA can predict what order or shipment is at risk of getting timely pick up or delivery. Business partners’ performance can be measured and any agreement breach can be predicted.
enables data-driven decision-making.
Real-time visibility supported by cutting-edge analytics and decision support technologies enables quick responses to changing market conditions. Resilience and performance optimization are guaranteed through continuous improvement, proactive risk management and metric alignment with strategic objectives. This strategy prioritizes customer demand, harmonizes procedures, fosters a culture of learning and encourages cross-functional alignment, laying the groundwork for a flexible, customercentric, and productive decision-centric supply chain.
Vaideeswaran Sethuraman, Founder, Param Network: A vital foundation for a successful decision-centric supply chain is digital collaboration among the ecosystem’s various participants. By creating a robust digital backbone, data collection becomes not just efficient but integral to every aspect of supply chain management.
Param embodies this philosophy, offering tools to build multi-enterprise workflows for systematic data sharing. This approach ensures that every entity within the supply chain can access realtime insights and act in unison, paving the way for intelligent automation and cohesive decision-making. It’s not merely about gathering data; it’s about weaving
a network that connects, informs, and empowers every part of the supply chain. This synergy transforms traditional operations into an agile, adaptive, and proactive system where decisions are not reactions but strategic responses, driven by accurate, real-time information.
Anand Sharma: Data-based decision making ensures better collaboration, better and accurate decisions, generate actionable insights, etc. In transport operations, you can automate the detention and demurrage invoices based on the real time events coming from carriers and track and trace solutions like Elixia, Four Kites, P44, etc. Real-time ETA can predict what order or shipment is at risk of getting timely pick up or delivery. Business partners’ performance can be measured, and any agreement breach can be predicted.
Tannistha Ganguly: There are several benefits of data-driven decision-making in supply chain & Procurement. It helps us to understand our customer needs better; understand the changes in customer behavior over a period faster; allows us to unearth leakages in supply chain and helps us to optimize end-toend supply chain and reduce supply
chain risks and have early warnings for any future risks/threats. It improves transparency in supply chain processes and seam-less data flow within the supply chain systems/processes. All the above contribute to better customer servicing and better customer satisfaction.
Arnab Banerjee: There are multiple benefits like:
• Easy and early identification of problem.
• The data provides insights, anomalies, and trends which normal human eyes cannot catch.
- Use of these trends or anomalies in business decision making
- Machines do most of the bull work and help the humans in decision making.
• Helps the management by exception cause where human intervention is only needed to manage the exception.
• Helps to control fraud in procurement area.
• Help to reduce costs or inventory in supply chain area.
• Help to mitigate risk in procurement or manufacturing.
• With the bull work being done by machines and humans managing by exception, it frees up bandwidth for employees to improve and think of next.
Vaideeswaran Sethuraman Founder, Param NetworkA vital foundation for a successful decision-centric supply chain is digital collaboration among the ecosystem’s various participants. By creating a robust digital backbone, data collection becomes not just efficient but integral to every aspect of supply chain management. Param embodies this philosophy, offering tools to build multienterprise workflows for systematic data sharing. This approach ensures that every entity within the supply chain can access real-time insights and act in unison, paving the way for intelligent automation and cohesive decisionmaking. It’s not merely about gathering data; it’s about weaving a network that connects, informs, and empowers every part of the supply chain. This synergy transforms traditional operations into an agile, adaptive, and proactive system where decisions are not reactions but strategic responses, driven by accurate, real-time information.
Mohammed Arafat Khan: Data-based decisions are transforming supply chain and procurement dynamics. Accurate demand forecasting minimizes excess stock, as seen in retailers aligning stocks with seasonal trends. Insights refine transporter relationships and mitigate risks, demonstrated by manufacturers meticulously tracking on-time deliveries to fortify partnerships and manage uncertainties. Inventory management precision is achieved through data analytics, exemplified by e-commerce platforms tailoring reorder points for optimal turnover.
Accelerated procurement processes are observed in the auto industry, where data-driven adjustments curtail lead times. Negotiation strategies reach new heights of precision through supplier cost insights, a strategic practice employed in healthcare procurement. Real-time insights into processes and inventory via data systems ensure transparency, a valuable asset in logistics achieved through GPS tracking. Route optimization significantly cuts shipping costs, as the distribution sector strategically deploys route optimization software for streamlined deliveries. Market agility finds its expression in fashion retail, aligning procurement with emergent trends. Continuous improvement, driven by data insights, elevates product quality in the electronics sector. In sum, data-
A vital foundation for a successful decision-centric supply chain is digital collaboration among the ecosystem’s various participants. By creating a robust digital backbone, data collection becomes not just efficient but integral to every aspect of supply chain management. Param embodies this philosophy, offering tools to build multienterprise workflows for systematic data sharing. This approach ensures that every entity within the supply chain can access real-time insights and act in unison, paving the way for intelligent automation and cohesive decisionmaking. It’s not merely about gathering data; it’s about weaving a network that connects, informs, and empowers every part of the supply chain. This synergy transforms traditional operations into an agile, adaptive, and proactive system where decisions are not reactions but strategic responses, driven by accurate, real-time information.
driven decisions revolutionize supply chains, harmonizing costs, amplifying efficiency, and nurturing innovation.
Vaideeswaran Sethuraman: Param is pioneering a transformation in digital collaboration across the supply chain ecosystem. Through our multi-enterprise workflow builder, a low-code tool designed for efficiency and flexibility, we’re empowering participants to share critical information via a unified digital backbone.
By allowing individual entities to build their own decentralized data lakes, param is laying the foundation for robust analytics and data-driven decision automation. This innovative approach ensures real-time insights and actionable intelligence, connecting every part of the supply chain in a cohesive, responsive network. It’s not just about making decisions faster; it’s about making them smarter, more informed, and more aligned with the ever-changing dynamics of the business landscape.
Technologies like predictive analytics enable demand forecasting with precision, reducing overstock or shortages. Real-time tracking using IoT enhances visibility, while digital twins allow simulations and optimizations without risk. These technologies have led to concrete improvements in inventory management, delivery efficiency, and
overall agility, providing a modernized, effective approach to traditional supply chain functions.
Using predictive analytics to identify potential equipment failures or demand trends leads to proactive measures and cost reductions. Real-time data in procurement ensures optimal vendor selection, dynamic pricing, and precise planning. These data-driven strategies have transformed procurement and supply chain operations, making them more streamlined, cost-effective, and adaptable to evolving business needs.
According to the University of University of Tennessee, there are several key decision-making skills that senior supply chain professionals need to be successful. This checklist of thirteen skills provides guidance in the decision-making process as a key stakeholder in the global supply chain:
The ability to identify problems in the supply chain: The best supply chain professionals can spot potential problems before they arise and act before they cause a major rupture in the supply chain. Since it’s not
possible to see every problem in advance, you also need to be able to define problems in real time, then quickly formulate and implement solutions.
The ability to develop and communicate solutions: As a supply chain leader in your organization, you not only need to develop solutions to problems that arise, but also communicate changes in supply chain operations to all parties involved. That may mean informing and educating your team members on changes to the process. It can also mean coordinating with outside suppliers in manufacturing, transportation or warehousing. Your aptitude for clearly communicating your decisions is a key asset to your role in supply chain management.
The ability to identify trends and opportunities for greater efficiency, quality and cost savings: Supply chains are dynamic, and your leadership and decision-making process should be as well. Rather than waiting for a challenging situation to arise, keep an eye on trends in supply chain management to make sure you’re aware of current best practices. If you can spot opportunities to improve supply chain operations and create plans to take advantage of those opportunities, your team can behave proactively rather than responding reactively.
The ability to leverage data and technology to analyze problems and opportunities in the supply chain: Data is your friend in supply chain management. When your decision-making process is based on good data, you’re able to make better choices. Supply chain leaders need to stay abreast of the latest software innovations that can improve job performance and help ensure that supply chains run seamlessly. The ability to generate or source the data you need to make well-informed decisions: Data collection is a key asset for effective decision-making and for developing longterm goals. You’ll want to set up systems that consistently collect and analyze data on the performance of various elements in your supply chain. Accurate and upto-date information is crucial to the problem-solving process and effective allocation of team resources.
The ability to incorporate legal and regulatory considerations into your decision making: Supply chain management is affected by numerous factors outside your operations and often outside your control. As a top supply chain management professional, part of your job is to stay informed about potential and actual changes to the legal and regulatory framework within which each supply chain function. Your longterm goals need to account for actual and potential legal and regulatory
developments, so your operations are ready to adapt to them.
The ability to synthesize ideas generated by a team and put them into action: Your team is a key asset to your decision-making process, if you know how to use it. The leadership to elicit ideas from your team, to develop the best ideas into actionable plans, and to get all team members on board with operational changes are highlevel skills that will be appreciated by your colleagues.
The ability to elicit collaboration from external elements in a supply chain: Your internal team members aren’t the only piece of the puzzle. As a supply chain professional, your skill at effectively communicating and collaborating with manufacturers, freight carriers, and fulfilment service providers is important to your success in management. People at every stage of a supply chain can be resources to help you with problemsolving and implementing your decisions. Leverage your experience with thirdparty partners to create a more robust supply chain for your organization.
The ability to recognize the relative importance of competing priorities: Supply chain managers are called upon to address more problems than they have
Managing the global supply chain calls for the ability to identify trends and opportunities for greater efficiency, quality and cost efficiency and understanding of geopolitical scenarios. Astute decision-making skills are paramount, encompassing strategic foresight to anticipate global market shifts and identify growth opportunities. Agility and adaptability are non-negotiable, enabling rapid response to disruptions and changing demand patterns across international markets. Adept risk management skills are crucial to proactively identify vulnerabilities and devise contingency plans. Lastly, a comprehensive understanding of technological advancements and their application in supply chain optimization is indispensable for maintaining a competitive edge in the global arena.
Irfan Mullatime to resolve. That is why prioritizing is so essential to making decisions in supply chain management. You’ll have to assign relative value to competing factors in your problem-solving process. The expertise to juggle all the elements of a complex supply chain when you are weighing the pros and cons of a decision is an essential skill as a leader.
The ability to leverage information from past successes and failures to guide future supply chain management decisions: A clear-eyed assessment of past failures as well as successes will help you make betterinformed decisions about the future. It’s the key advantage of experience and will serve your team well the better you are able to draw from your professional history. But it’s important to track problems at every level of the supply chain, even those that can be fixed in the moment, so you can take steps to prevent the same issues from arising again.
The ability to be flexible to events: Thinking on your feet is a huge asset for effective decision-making. When problems arise, nimble thinking and quick decisions may be the only way to avoid interruptions in your operations that can cost money and time. Unpredictability is what makes supply chain management jobs both exciting and challenging. The better you are at making decisions on the fly, the better you can utilize the efforts of your staff and safeguard the goals of the organization.
The ability to know when to stand by a decision and when to change course: A key leadership and decision-making skill in supply chain management is discernment. The willingness to stand by a decision when you feel it’s the right one, even in the face of opposition, is an important asset in supply chain management. However, while understanding when
you’ve made the wrong decision and correcting course is not always easy, it’s vital to keeping your operations running smoothly. Those who look to you for guidance will respect your ability to deal openly and honestly.
The ability to build uncertainty and contingencies into your decision-making: Disruption is, always, a fact of life. When you’re making decisions about supply chain management, the best practice is to build in margin to allow for the unforeseen. Each decision should include a backup plan in case circumstances that you can’t predict render your original plan unworkable or inefficient.
Tannistha Ganguly: Key decisionmaking skills for any professional in the supply chain domain will be the ability to identify gaps in the end-to-end supply chain of the company; identify gaps within each specific area of the company’s supply chain, i.e., procurement, planning, logistics etc., identify how the gap or inefficiency in one specific area is affecting the efficiency or KPIs of another area within the company’s supply chain; identify trends & opportunities in supply chain; use data & technology to build solution for increased efficiency; leverage data from various sources (both internal & external) to facilitate decision-making and make well-informed decisions; engage with the human capital employed in the supply chain for improving efficiency; train & retrain/ skill and upskill the human capital in supply chain; build collaboration with external partners and build extended supply chain; build strong relations with supply chain partners; leverage advanced technology to build system that will guide future supply chain management decisions; and build uncertainty and contingencies into the decision-making process, build a flexible and agile decision-making process with
added ability to change course with changing environment.
Arnab Banerjee: There are several skills which are crucial for professionals overseeing deployment of decision centric supply chain solutions, these are listed below:
• Deep understanding of supply chain concepts
• Knowledge and insights of business process and its pain areas
• Comfort with data and analysis of data
• Comfort and broad understanding of how technology can help a process.
• Curiosity and willingness to explore and not afraid of failure
• Ability to reframe a problem
• Problem solving mindset
• Excellent written and verbal communication skills
• Transparency with all stakeholders
• Mindset to change and reorient
• Aware of new technology and current trends
Irfan Mulla: Driving supply chain excellence requires robust decisionmaking capabilities across various aspects of the supply chain process. Operational excellence is one of the important aspects. Operational excellence is about creating a lean, agile, and adaptable organization capable of quickly responding to changing customer demands, market conditions, and industry trends. It is a continuous journey towards perfection, rather than a one-time achievement. Developing an effective inventory management system can optimize inventory levels while considering demand variability and lead times. It is important to adopt technologies like IoT, AI, and block-chain which enhance visibility, traceability, and decision-making. Real-time data collection and analytics enable quicker and more informed decisions. To achieve
Being decision-centric means that processes and activities are designed to make the best possible decisions for the business, involving the right decision makers, the right stakeholders, which may vary quite a lot depending on the decision being made. The decision itself thereby becomes the focal point for all the decisionmaking activities.
supply chain excellence, organizations should invest in technology, data analytics, talent development, and crossfunctional collaboration to enhance their decision-making capabilities across these key areas.
Mohammed Arafat Khan: Professionals overseeing a global supply chain require a multifaceted skill set. They must embrace systems thinking to grasp complex interdependencies and make holistic decisions. Geo-political awareness is crucial, as global politics and trade dynamics can ripple through supply chains. End-to-end visibility, scenario planning, and diversified strategies are vital amid uncertainties. Environmental concerns mandate carbon footprint and sustainability considerations, reflecting evolving consumer preferences. Balancing local and centralized decisions, adept relationship management across cultures, and navigating diverse regulatory landscapes are imperative. Ethical sourcing, digital integration, and resilience-versus-efficiency deliberations shape modern strategies. Feedback loops drive continuous improvement. In essence, global supply chain leaders blend strategy, geopolitics, technology, and human relations to orchestrate success.
Vaideeswaran Sethuraman: Skills like analytical thinking, adaptability, strategic planning, and technology leverage are essential in global supply chain management. Effective decision-making requires a blend of traditional business understanding with modern tools like AI and predictive analytics. Balancing global market navigation with core business values ensures leadership that’s both visionary and grounded, reflecting the complex dynamics of modern supply chain management. Achieving excellence involves integrating real-time analysis, technology, actionable strategies, and core business values. The use of predictive analytics, real-time monitoring, and digital twins fosters a supply chain that’s both forward-thinking and grounded. These capabilities enable businesses to be resilient, efficient, and aligned with local and global dynamics, paving the way for supply chain excellence that’s adaptable, informed, and responsive.
Anand Sharma: There are various technologies that are at play today. Some of them are:
Digital Twins: Digital twins create virtual replicas of physical assets, processes, or systems. They facilitate seamless visibility of the whole supply chain network without jeopardizing the base ERP or any operation systems of company.
Blockchain for Supply Chain: Blockchain technology can enhance transparency and trust in supply chains. It enables secure digital records of transactions and movements within the supply chain. It also enables the corporate and its business partner to have same view of the raw material sourcing to the vendor payment.
Supplier and customer Collaboration
Portals: Many organizations use dedicated portals or platforms to communicate and collaborate with business partners.
Natural Language Processing (NLP): It is a branch of artificial intelligence (AI) that enables computers to comprehend, generate, and manipulate human language. NLP can analyze customer reviews, social media, and other textual data to extract insights about customer sentiment, preferences, and emerging trends. This information can then be used to refine demand forecasting models and adjust inventory levels, order processing, and optimize transportation accordingly.
IoT Platforms: Internet of Things (IoT) platforms enable real-time monitoring of assets like trucks, products, and equipment.
RDBMS to GRAPH database: It’s a new revolution in managing the originations database which enables millions of records to be analyzed in microseconds without having any latency issue.
Tannistha Ganguly: There are many advanced analytics technologies that are available in the market today that can be used to help us build a structured user-friendly data-driven decision-
making platform. We can choose from many Out-Of-The-Box (OOTB) software that is available in the market and use those as-is in our companies or tweak those to suit our needs. We can also build the capability in-house completely. This decision depends on company to company depending on their priorities and capabilities. There is no right or wrong answer here. Few examples will be using the SAP suite of tools or the Oracle suite of tools. Or if we choose to use build inhouse, we can use analytics tools such as AWS suite, Power BI, Tableau, R, Python etc. The fundamental building blocks will be building a data warehouse and business intelligence solutions on top of it. Key point to remember is that we need to build an enterprise platform instead of point-2-point solutions. Hence, the first step will always be to build a supply chain analytics strategy before we build the tools themselves.
Arnab Banerjee: There are a lot of decision centric technologies being adopted today in supply chain. Most of it is used for data driven decision making and improvements. There are three aspects to it:
• Intelligent automation of manual process or workflow using robotic bots is quite popular. This is popularly known as Robotic Process Automation also. This can be as simple as to check whether the report is refreshed after a scheduled job run or automation of process which were dependent on mails from one process owner to another or automation of KPI calculations.
• Data driven approach is helping us drive many decisions based on descriptive analytics. It also helps in diagnostics purpose to find details on inventory aging or returns analysis, process throughput drops or help in disposing off unwanted inventory. The data approach is also being used with Machine Learning algorithms to predict inventory availability in downstream processes, detect patterns and anomaly in demand or historical sales or providing guidance in optimizing revenue based on available supply.
• Use of Natural language processing to identify the right set of data in unstructured data set or for development of chat bots for internal partner interactions are some of the other areas.
Mohammed Arafat Khan: Intugine empowers decision-centric supply chains by offering real-time shipment visibility. Intugine enhances efficiency and responsiveness for agile supply chains. The platform connects with ecosystem systems and provides:
• Predictive Analytics: Forecasts events using historical and real-time data, aiding demand, inventory, and risk management.
• IoT: Collects real-time data via IoT devices for inventory and asset monitoring.
• Cloud Computing: Facilitates real-time collaboration and data sharing across partners.
In the realm of supply chain, decisioncentric technologies yield impactful outcomes. Consider these instances:
• Accurate ETA System: A prominent agrochemical manufacturer grappled with production delays and goods spoilage due to unreliable Estimated Time of Arrival (ETA). Intugine’s precise ETA system transformed their operations. With exact ETAs, the manufacturer now activates furnaces timely, reducing spoilage and optimizing production.
• Detention Management: A leading glass company battled transportation delays and detention charges. Intugine intervened by ensuring SLA compliance and monitoring detention time. This data-driven approach led to a penalty system, streamlining vehicle flow within the plant and boosting efficiency.
Intugine’s data-driven insights empowered these organizations. From precise ETAs to robust detention
management, the technologies ushered in efficiency and effectiveness, exemplifying the potential of decisioncentric supply chains.
Irfan Mulla: Best practices for implementing data-driven procurement strategies include collecting and managing data effectively, analyzing data, ensuring data quality, leveraging technology, establishing key performance indicators (KPIs), and building a datadriven culture.
Vaideeswaran Sethuraman: Ensuring data integrity, embracing AI analytics, fostering collaboration, and continuous evaluation are essential. Practices like using Generative AI for complex data interpretation lead to nuanced insights and adaptable strategies. These practices form the blueprint for a responsive, visionary approach to decision-making that respects core business values while embracing modern efficiency.
Arnab Banerjee: Any technology driven transformation comes with its challenges and the decision centric supply chain solutions are no different. I find there are several challenges which must be overcome for successful deployment of these solutions. These are listed below and have no order of importance:
• Communication, clarity on purpose and people onboarding: Communication with stakeholder, having a transparency and making them a partner in the process of change is key. Similarly sharing the vision with all team members, making them feel a part of the journey and having them all to act in unison is key to success. This is possible when the shared vision and the path to achieve the vision is clear to everyone involved.
• Breaking the siloes: Ability to break the silo and finding partnership across departments to form one team is an important aspect to bring success.
• Data and data security: As we explore decision centric technology for solving problem or improving process, it uses more and more data to learn and aide in decision making. Access and understanding of data are very important. With open-source platforms the data compliance risk, data privacy risk and data security risk (breaches or exposures) are real threats to be cognizant of while solutioning. So, in our solutions security is predominant and uncompromisable.
• Agility to reorient: The decision centric solution and the problem statement tend to reorient as the data analysis and patterns starts to emerge. The team needs to have the agility in the mindset to be able to re-orient, restrategize and re-group to solve the actual problem which will benefit the cause.
• People: Identifying the right skilled and mindset people in the team is extremely important for success. This can be achieved through coaching
or mentoring, training and above all respecting the team members. Employee care and mindfulness are aspects which should not be ignored and is an important key for success.
Irfan Mulla: Upskilling and training would be required for new-age technology adoption and deployment. Thus, investing in digital talent and building a pool of talent with strong prowess in technology and solutions are the need of the hour. Successful integration of new age solutions requires a transformation of security, which is a top-most challenge faced by many organizations embarking on a digital transformation journey. When we talk about new age technology solutions, we are addressing three pillars – volatility, alignment and visibility. There is anxiety within demand planning or volatility that businesses are experiencing. So, cross-functional teams need to be aligned to deploy technology for better efficiency and effectiveness. Unless all these factors are addressed on a single platform, the challenges will persist.
Recently we have faced a problem while managing in-city deliveries and the problem was related to the resistance to change when it comes to opting for a mode of transport. Because there was apprehension about delivering bad experiences to their end customers. When we started analyzing the data, we found out that 50% of their deliveries were only contributing 1% to their revenue. Rest 29 distributors were contributing 41%. That’s the power of data we are talking about. One of the biggest findings which I have seen in my 3PL career of around 18 years is that we need to have a lot of integration and standardization of the processes which will help us plan better, design better and be futuristic.
Traditional cyclic planning has played an important role in helping companies in the early stages of maturity to create processes that are leaner, faster, standardized and less resource heavy. But the ultimate goal is even more ambitious. In today’s volatile environment, companies need planning concepts powered by strong technology support and focused on decisions. By
using decision centric planning, supply chains can become more resistant to volatility and changing conditions.
As Mohammed Arafat Khan highlights, “In the realm of supply chain and procurement, data-driven decisionmaking is underpinned by essential practices. Clear objectives guide efforts, while relevant data types inform choices. Data integrity is key, demanding robust validation. Integration synthesizes insights, and advanced analytics techniques uncover hidden patterns. Real-time monitoring of indicators ensures agility, and visual dashboards aid comprehension. Cross-functional collaboration enhances decision quality. Segmentation tailors strategies, and scenario planning charts diverse paths. A culture of refinement and data security are vital. Skill development equips teams, while validation and outcome monitoring refine strategies. Aligning decisions with business strategy ensures coherence. These practices empower organizations to harness data’s transformative potential, elevate operations, foster innovation, and secure a competitive edge.”
As more companies begin to augment and automate supply chain decision making, they’ll begin to see the benefits throughout their enterprise ecosystem — with a level of visibility that goes beyond planning. This investment can scale beyond the business to enable resource optimization, waste reduction, improved customer service and more.
Companies will benefit within mere weeks by reducing complexity and accelerating their decision cycles, while simultaneously reducing their reliance on multiple people, processes, data models and disconnected niche technology investments. Early adoption of decision intelligence will pay dividends by enabling companies to address problems and make decisions they couldn’t consider before or didn’t think were possible with the status quo.
“Planning for the future of the supply chain is like making a map of a huge, ever-changing ocean, where each wave could change the way an organization works. We’re on the verge of some big changes in the way things are going to be in the future. For example, Blockchain isn’t just a buzzword in the finance industry; it also offers a level of traceability in the supply chain that has never been seen before, making sure that products are real and trustworthy. Imagine a world where drones not only take pictures of beautiful scenes but also bring packages right to your doorstep. With the power of predictive analytics, companies won’t just respond to customer needs; they’ll also predict them, making sure they’re always one step ahead. But even with all these advancements in technology, the supply chain will still have the same main goal – to Provide VALUE,” asserts Dhritiman Chakraborty, Director Operations, Ingram Micro India Ltd…
During your stint in the supply chain over the past two decades, how have you seen the distribution and procurement landscape transforming over the years?
The Distribution and Procurement world has changed a lot in the past two decades. When I started in the pharmaceutical industry, everything was separate, and processes were mostly carried out in siloes. Now, in my IT Distribution job, things are more connected and modern.
Today, these areas are clear and flexible, and organizations are also mindful of environmental impact. Clarity means everyone knows what's happening, which is good for trust and communication. Being flexible is important because the market and people's needs are constantly changing at a fast pace. And being mindful of the environment means we're thinking about our planet and being responsible in every decision we take around the Supply Chain.
A lot of these changes come from new technology. Further, as people want things faster, we use more technology, and at the same time, care about the environment. Over the years, Distribution and Procurement have adapted to these changing needs. We're now focused on meeting these modern needs in a professional way.
What used to be the challenges earlier and what are the challenging scenarios now that you deal with while managing supply chain ops? In the early stages of my career in supply chain management, the challenges were primarily operational. I frequently dealt with the intricacies of daily transactions involving logistics service providers and internal stakeholders. Tracking shipment delivery status and ensuring they reached their destinations on time was a routine concern. The central focus back then was to develop a process that was efficient, to build trustworthy networks, and to consistently deliver without hiccups.
Fast forward to today, the supply chain realm has expanded and with it, the challenges have become multifaceted. As supply chains stretch across borders, their complexity has grown exponentially. Now, it isn't just about tracking shipments but ensuring that the entire system can adapt swiftly. Unexpected disruptions, whether due to geopolitical factors, natural disasters, or global pandemics, have become the new norm. Managing these sudden changes, while still ensuring that goods flow smoothly, is a significant challenge. Additionally, businesses are evolving at a pace never seen before. Aligning the supply chain with rapidly changing business models, therefore, is another significant challenge
we face. The landscape has shifted from merely operational concerns to a blend of adaptability, foresight, and strategic alignment with broader business goals.
You have had a successful career progression in varied industry verticals starting from FMCG to Pharma to Chemicals. What striking differences have you witnessed in managing such starkly different sectors?
Navigating through different industry sectors such as FMCG, Pharma, and Chemicals has given me a comprehensive perspective on the nuances of each. Here's what I've observed:
In the FMCG sector, everything moves at a lightning-fast pace. The market demands quick turnarounds. It's about managing vast quantities of products and ensuring they get to shelves rapidly to meet consumer needs. Speed and volume are of the essence here.
Switching to Pharma, the pace may vary, but the stakes are incredibly high. This sector is governed by stringent regulations, ensuring that products meet health and safety standards. Traceability, ensuring every product's origin and distribution can be tracked, is a crucial element.
Then we have the Chemicals industry, which comes with its own set of challenges. The focus here is on safety. Given the nature of the products, adherence to strict safety guidelines is not just important; it's imperative.
While each industry presents distinct challenges, some fundamentals never change. Regardless of the sector, the goals are always efficiency, trustworthiness, and delivering value to both the customer and the organization. Success, in my experience, hinges on the capacity to swiftly adapt and modify strategies according to the specific requirements of each industry.
You have strongly voiced your opinion on the impact of internal change to resistance on supply chain performance. Can you enlighten us on the same…
Certainly, the topic of how internal change resistance impacts supply chain performance is close to my heart.
At the core of any successful supply
chain operation is the organization's internal culture. It's a fundamental building block that determines how efficiently and effectively processes run. However, what many might overlook is the resistance to change inherent in most organizations. This resistance, often fuelled by fear of the unknown or comfort with current processes, can significantly impede progress.
From my experiences, especially in businesses that underwent Mergers & Acquisitions, the effects of such resistance become glaringly evident. These scenarios typically require the supply chain to navigate substantial disruptions. When faced with these challenges, an organization's adaptability, and willingness to evolve can make or break the situation.
Therefore, it's imperative to foster a workplace culture rooted in continuous learning and agility. This doesn't merely mean introducing new tools or processes. It's about engaging every employee in the transformation journey. When individuals feel involved and understand the reasons for change, the transition not only becomes smoother but also results in more lasting and effective improvements. It's about creating an ecosystem where change is welcomed and viewed as an opportunity rather than a threat.
What’s your take on the ensuing supply chain digitalization wave? Are companies able to embrace it fully or are there still challenges that need to be addressed?
Digitalization is not solely a temporary industry trend that will fade over time. Rather, it represents a monumental shift in the way that enterprises operate. In today's competitive environment, tools such as artificial intelligence (AI), data analytics, and the Internet of Things (IoT) are no longer luxuries but rather necessities that businesses must employ in order to remain competitive.
Indeed, many organizations have recognized this and are rapidly implementing digital strategies into their supply chains. However, not everything is sailing smoothly. Their difficulties are numerous. Many enterprises, for instance, have legacy systems that are incompatible with new technologies.
Integrating these ageing systems with cutting-edge tools can be a challenging endeavor.
In addition, as technology advances, there is an increasing need to upskill the workforce. Employees must be trained and outfitted with the skills necessary to effectively navigate and administer these digital tools. Another important issue is cybersecurity. Increasing reliance on digital platforms increases the risk of cyberattacks. It is essential that comprehensive security measures are in place. Even though digitalization offers numerous benefits and opportunities, embracing it is not without its difficulties. Adapting to this digital surge, however, is not merely a strategic decision; it is a necessity for future success.
Please share with us how automation and digitalization are reshaping the distribution industry…
I would be happy to talk more about how automation and digitalization have changed the distribution business. The way we think about transportation is changing because of both automation and digitalization. At the most basic level, these changes are making it easier for warehouse workers to do their jobs. Automated systems, for example, can do repetitive jobs faster and more accurately than people can, which cuts down on mistakes and boosts productivity.
From my job at Ingram Micro India, I have been able to see directly how powerful and useful, real-time data analytics can be. These tools can sort through huge amounts of data quickly and provide meaningful interpretation for making better business decisions. The way people make decisions is no longer just based on what they feel would be right but rather on a true assessment of scenarios based on real time data analytics.
Inventory control, which has always been a difficult part of distribution, is getting easier. With the help of real-time analytics, it's now possible to better predict how demand will change, which helps make sure that the right amount of stock is always on hand.
Also, these digital tools are making it easier for businesses to customize the customer path. We can now better understand what our customers want
and need, which lets us customize their experiences, make them happier, and, in the end, make them more loyal. Automation and digitalization aren't just making the distribution business better; they're also changing it to be more customer-focused and efficient.
What are the key tenets of customercentric supply chain? How can companies work towards developing the same?
Businesses that want to do well in today's market need to know what a customer-centric supply chain looks like. A customer-centered supply chain is built on three main pillars: Flexibility, Openness, and Personalization.
Agility & Flexibility: This means that the supply chain can respond quickly to changes. Whether it's a change in what the market wants or something that comes up out of the blue, a supply chain that focuses on the customer must be flexible enough to react and adapt in real time.
Transparency: Customers want to know what's going on these days. They want to know where their goods come from, how they are made, and when they will be shipped. Giving this information builds confidence and trust.
Personalization: It is about knowing what a person wants and anticipating what they might want, sometimes even before they do. This makes sure that the goods and services offered are close to what each person wants and expects.
A few important tactics can help companies build this kind of supply chain. First, it's important to build in feedback loops from customers. Asking for and acting on customer feedback on a regular basis can help you find ways to
improve. Second, using data analytics can give companies a lot of information about how customers act and what they like, which helps them predict demand correctly and tailor their products. Lastly, the supply chain should be built around new ideas. The environment is always changing, and businesses need to be the first to adopt new technologies and strategies if they want to stay relevant and customer focused.’
Sustainability is taking centerstage across business operations. How can supply chain work towards developing an eco-expanse?
Sustainability is becoming a big part of how businesses run, so it's very important that it's built into their supply chains. So, how can supply chains build a more environmentally friendly reach?
First of all, sustainability isn't just a buzzword; it's a big change in how businesses think about how they affect the world. Since the supply chain is an important part of any business, it could make a big difference in this change. One way to do this is to adopt the ideas of a circular economy. In the traditional linear model, goods are thrown away after they are used. In a circular economy, on the other hand, the focus is on reuse, repair, and recycling, which extend the life of the product and reduce waste.
Getting rid of waste is another important idea. This is true not only for products but also for the energy, water, and materials that are used in the supply chain. Efforts like streamlining production processes to use less raw materials and planning transportation routes to use less fuel can go a long way.
When it comes to energy, the use of green sources is getting more and more attention. For example, warehouses can switch to solar or wind power, wherever it is feasible for business to do so. This cuts down on carbon emissions and often has
long-term financial benefits as well, even though in the short term, it may look like a lot of investment. Also, the packaging materials we use can have a big impact on our world. Supply chains can have a much smaller effect on the environment if they choose packing options that are good for the environment.
Lastly, collaborative distribution models, in which various businesses share distribution resources, can lead to fewer vehicles on the road and lower emissions. In the end, the supply chain can be a leader in the movement toward a more sustainable business environment if it is properly worked out and planned ahead.
What are your views on the government’s enabling policy framework towards enhancing logistics and warehousing efficiency? The government's policy framework has a big effect on the logistics and storage industries, and I have a few things to say about this. A lot of time, the infrastructure that powers logistics and warehousing operations is what makes them work well. Infrastructure growth can be driven by governments, which have the power and resources to do multiple things, such as building better roads and ports and setting up advanced communication networks. These improvements to infrastructure will make logistics processes run more smoothly, faster, and more reliably. The good news is that recently we have seen very good progress in this area. The government is truly taking up some serious initiatives to develop the infrastructure for the betterment of the logistics industry, covering both physical and digital infrastructure.
In the world we live in now, sustainability is a major issue. Government policies that reward green and environmentally friendly practices
In the world we live in now, sustainability is a major issue. Government policies that reward green and environmentally friendly practices can help logistics and warehousing businesses become more sustainable. In this area, it is really encouraging to see the Government of India’s net zero target by 2070 through various policy decisions like bringing zeroemission trucks (ZETs), which include battery electric trucks (BETs) and fuel cell electric trucks (FCETs).
can help logistics and warehousing businesses become more sustainable. In this area as well, it is really encouraging to see the Government of India’s net zero target by 2070 through various policy decisions like bringing zero-emission trucks (ZETs), which include battery electric trucks (BETs) and fuel cell electric trucks (FCETs).
Cross-border trade rules are also very important. Simplifying these rules can speed up international logistics by a lot, making operations run more smoothly and saving money.
But for programs to really work, people need to work together on them. A relationship between the industry's most important players and the government makes sure that policies are based on facts and can solve the industry's biggest problems. It is good to see today that various Industry bodies in India are coming together and contributing towards Logistics policy decisions in collaboration with government authorities.
In this regard, the National Logistics Policy (NLP), launched in September 2022, is a monumental step from government towards improving India’s Logistics industry. One of the primary objectives of the National Logistics Policy (NLP) is to bring down the logistics cost from 14% to 8% of the GDP, aligning it with global benchmarks such as the USA, which already operates at an 8% logistics cost.
What’s your advice to new age supply chain professionals in honing their skills and taking part in supply chain extravaganza waiting to unfold?
The future of the supply chain looks bright, and people who are just starting out in the field have a lot to look forward to. First of all, the supply chain is dynamic. Given how quickly things change, one of the best things an aspirant can do is be willing to keep learning. Stay up to date by attending classes and webinars. This makes sure you're always on the cutting edge of changes in your field. Continuous learning goes hand in hand with being able to change. It's a valuable skill to be able to change plans or strategies based on new knowledge or problems. It makes problem-solving and making plans more flexible.
The future of the supply chain looks bright, and people who are just starting out in the field have a lot to look forward to. First of all, the supply chain is dynamic. Given how quickly things change, one of the best things an aspirant can do is be willing to keep learning. Stay up to date by attending classes and webinars. This makes sure you’re always on the cutting edge of changes in your field. Continuous learning goes hand in hand with being able to change. It’s a valuable skill to be able to change plans or strategies based on new knowledge or problems. It makes problem-solving and making plans more flexible.
Technology is, of course, changing the world. Learning about data analytics, artificial intelligence, and other cuttingedge tools will give you skills that are in high demand. These tools don't just improve how things work; they also give information and predictions that can be used to guide business plans.
But in all this talk about technology, don't forget about the people. Some jobs are being done by machines and algorithms, but human interactions, relationships, and networks are still the most important parts of a successful business. Find mentors and take advantage of chances to be coached. They give you advice and insights from people who have been in your situation before. Last but not least, don't undervalue soft skills. Communication, working as a team, and being able to lead will always be important. As a supply chain worker, these skills make sure that you are not only good at the technical side of things but also great at managing and leading teams to success.
How do you foresee the expanse of supply chain shaping from hereon and becoming a Value enhancer for organizations? What are the upcoming trends that we are yet to witness?
Planning for the future of the supply chain is like making a map of a huge, ever-changing ocean, where each wave could change the way, an organization works.
People have usually thought of the supply chain as just a way to get things done, which is important but not necessarily a game changer. I think that's about to change, though. The supply chain will go from being in the background to being the most important part of a business's strategy. This change will be driven by a mix of technology, environmentally friendly practices, and a constant focus on the end customer.
We're on the verge of some big changes in the way things are going to be in the future. For example, Blockchain isn't just a buzzword in the finance industry; it also offers a level of traceability in the supply chain that has never been seen before, making sure that products are real and trustworthy. Imagine a world where drones not only take pictures of beautiful scenes but also bring packages right to your doorstep. With the power of predictive analytics, companies won't just respond to customer needs; they'll also predict them, making sure they're always one step ahead.
But even with all these advancements in technology, the supply chain will still have the same main goal: to provide value. As these innovations become part of the fabric of supply chain operations, we'll see not only more efficient operations but also an environment where innovation thrives and brings real value to companies. The future of the supply chain is not just about moving things; it is also about going forward with a plan and a goal.
Cold chain systems are vital for supplying healthcare and food & beverage products. Looking at the growing expanse of these two critical sectors, the demand for cold chain transportation solutions such as refrigerated containers and vehicles to safely transport temperature-sensitive goods is expected to drive the transportation segment’s growth in the future. A recent Grand View research estimated the global cold chain market size at US$ 233.2 billion in 2022, which is expected to grow at a CAGR of 18.6% from 2023 to 2030. In order to achieve this growth projection, several challenges need to be ironed out. Through this article, Sanjay Desai, Co-founder & Regional Director, Humana International (S) Pte Ltd., offers key elements that companies need to consider while developing an efficient and effective cold chain distribution network…
Acold chain is a temperaturecontrolled supply chain where all links and events in the end-to-end chain must remain unbroken to maintain product efficacy and its quality. In order for the cold chain to remain unbroken, the storage temperature must remain controlled from production to packaging while in-transportation to storage until distributed to a department store, a pharmacist or given as treatment to a patient/consumer.
Traditionally, facilities used manual methods to keep an ongoing record of temperatures whereby a designated staff would record the temperature at a set time each day. These days, data loggers are available that continuously read the temperature from the probes in the refrigerators to store the readings. Users can view the data from an IT device at any time.
Currently, the demand for cold chain products & its infrastructure is rising consistently, creating a major challenge not just to run the infrastructure but to maintain the ecological and environmental balance like climate change, energy consumption / greenhouse gas emissions. Reason for such incremental volume growth in Cold Chain products across global regions are: Increasing demand for vaccines; Increasing consumption in processed food and the need for its preservation; and Huge penetration of e-commerce in food and beverage industry especially in growing markets (Asia).
Besides the usual demand for temperature sensitive products, there will be huge demand for residential and commercial
air conditioning to rise significantly over the next 7-8 years. This is largely due to economic / structural growth associated in emerging markets all over the regions. For example, residential AC (Airconditioning) alone accounts for twothirds of the installed capacity of cooling infrastructure, making it a significant contributor to global emissions. Secondly, demand for perishable food, vaccines, and other biopharmaceutical products is growing rapidly, requiring expansion in infrastructure (Warehousing / Transportation) for temperaturecontrolled supply chains across the globe. Thirdly, various sectors like Automotive, Aviation, Energy and Technology, which are on growth trajectory, will continue to consume more energy, generate
Sanjay Desai is a seasoned Supply Chain professional who runs his own advisory consulting practice based out of Singapore. He sits as an Advisory board member for multiple startups and SMEs located in Asia. He also runs Humana international handling Talent Development & Executive Placements in supply chain domain across the region. He holds a Bachelor of Commerce and a Postgraduate in Materials Management from premier Indian business school. He is a Certified Logistics Professional from The Logistics Society, Singapore. He is a certified (CPIM) practitioner from APICS, USA. He has completed formal Executive Leadership management courses at INSEAD, Singapore.more carbon emissions, and contribute negatively to global warming.
The manufacturers of cold chain products continue to face many challenges like rising costs, tight container capacity, and decreasing quality warehouse space. Retailers, food supply distributors, shippers, and freight operators, all have been stretched by the escalating demand more so in the last couple of years due to global pandemic situation.
Shifting demand patters: Consumer demand is shifting from traditional frozen to fresh, organic, exotic meat / fish and vegetables further accentuated by emergency situation in distribution of Covid Vaccines. This is driving the demand up for building additional space & capacities in Refrigerated Warehouses/ distribution networks globally.
Lack of a global uniform infrastructure: One cannot assume to find a uniform cold chain infrastructure across international markets. Even the most advanced and energy-efficient active cooling technology would not work without a proper power & correct adapter meeting the voltage requirement in a specific country.
Ecological impact on environment / carbon footprint: In addition to high power consumption, (that is combustion of fossil fuels) refrigerant gases such as Hydrofluorocarbons (HFCs) used in cold chains are responsible for high (GHG) greenhouse gas emissions, which hurt the environment in a great deal over longer periods.
Impact of increased & non-standard regulations across borders: Different countries may have diverse guidelines in place that govern the movement of cargo and its components. Problems arise because there is no single global Good Distribution Practices (GDP), and even existing frameworks keep changing, adding to the complexities of compliance.
Risks in storage and/ or transportation: While the storage aspect of cold chain is
improving great deal over last 5 years, temperature management while intransportation has not made similar progress in the same period. There are multiple areas that can go wrong i.e. hardware failure, vehicle breakdown, monitoring devices breakdown.
Human error while loading & unloading: A lack of understanding about cold chain products and the exposure areas associated with it, will create exposure risks for the quality of cold chain products. The way workers approach preservation & safety aspects as well as the measures they take to reduce exposure, breakages/ spoilage will determine the final outcome & quality.
1. Invest in advanced technology which will develop energy efficient infrastructure & natural cooling colling methods for industries and consumers at large.
a. Smart buildings are able to automate energy use through A.I. controlled sensors. These systems can regulate cooling and control the refrigeration energy used to reduce indirect emissions.
b. Evaporative cooling is also an alternative, in which evaporating water into the air provides a natural
and energy-efficient means of cooling, reducing energy use significantly in this process
c. Augmented and virtual reality (AR/VR) can be deployed for remote maintenance of cold chain warehouses so experts from one location can guide and help local teams with the help of AR tools to immediately rectify a problem or even prevent it.
2. To drive for a globally consistent regulatory regime, effectively controlling some of the most common refrigerants used in A/Cs and freezers. Efforts should also be made to replace refrigerants with lower emissions & find alternatives.
3. Seriously cater to the energyintensive requirements of products while minimizing the pressure on natural resources. They need to offer “Thermal Storage” technology, which is 100% fuel-free and environmentally friendly as well.
4. Location Intelligence will be a gamechanger in the optimization of critical last-mile and large supply networks, especially significant in rural markets that do not have access to the kind of technology usually found in urban centres.
5. Focused Employee Training which
Temperature-sensitive products rely on support infrastructure to maintain their efficacy, and adherence to safety & relevant regulatory requirements. A well organised and sustainable Cold Chain distribution & logistics network is essential to supply the products continuously at minimum wastage/ loss and be able to reach / feed consumers across global regions. Besides providing a good quality and consistent supply, it is our responsibility to use clean energy, increase food safety and simultaneously improve the livelihoods of nearly half a billion small farmers all over global locations. We must acknowledge that these farmers are essential to today’s global food system and a major stakeholder in its future.
will develop understanding of the Cold Chain products and likely effects of excursions on product efficacy should be made mandatory. Organizations may use technology like AR/VR for training of professionals who may not have the experience of handling / delivery of cold chain products.
These are the vital elements and must haves in your cold chain distribution infrastructure.
Cooling systems: These systems are used to reduce the temperature of the goods. Once the appropriate temperature is achieved, the commodities are taken for further processing.
Cold storage: Having a quality Cold storage facility becomes extremely important for storing cold chain products for longer periods. These storage systems ensure that the perishable products are fresh and safe for usage and consumption over a certain period.
Monitoring systems: In the case of Cold Chain products, it becomes vital to ensure the item’s integrity is not compromised. Hence having reliable temperature monitoring systems reduces the chance of spoilage/ exposure. Based on the data proactive measures can be taken to avert any likely temperature excursions
Cold chain processing and distribution infrastructure: Cold processing and distribution facilities consolidate loads from multiple suppliers and distribute them to various destinations to meet
customer demand. These facilities help businesses become more efficient by reducing transportation costs, improving inventory management systems, and increasing productivity.
Cold Chain transportation infrastructure: It is another crucial element in the cold chain supply chain that helps the frozen items to move between locations. It helps to transport the goods to the desired destination while maintaining the suitable temperature and the integrity of the commodity.
Temperature-sensitive products rely on support infrastructure to maintain their efficacy, and adherence to safety & relevant regulatory requirements. A well organised and sustainable Cold Chain distribution & logistics network is essential to supply the products continuously at minimum wastage/ loss and be able to reach / feed consumers across global regions. Besides providing a good quality and consistent supply, it is our responsibility to use clean energy, increase food safety and simultaneously improve the livelihoods of nearly half a billion small farmers all over global locations. We must acknowledge that these farmers are essential to today’s global food system and a major stakeholder in its future.
If designed correctly & with using advanced technologies such as solar or wind powered refrigeration, and cryogenic cooling, we can also reduce harmful pollution and degrading energy exploitation in cold chain storage / warehouse handling and transportation of products.
