SUPPLYCHAINTRIBE.COM FEBRUARY 2024 Volume 8 Issue 2
Special Feature Dr. Arunachalam R, MD & CEO, IBOB & Board of Director, SF Logistics Pvt. Ltd.
Nikhil Agarwal, President, CJ Darcl Logistics Ltd.
MASTERING DEMAND PLANNING
A Comprehensive Guide to Accurate Forecasting Presenting a step-bystep approach for companies to achieve the perfect supplydemand matrix
Embracing Innovation, Diversity, and Global Insights Dear Readers, In the ever-evolving landscape of the value chain domain, our publication has steadfastly delivered unparalleled first-hand content, upholding a standard of excellence that has distinguished us in the field for over seven years. Our commitment to providing insightful analysis and forward-thinking perspectives has empowered professionals and enthusiasts alike, fostering a community of informed readers. However, as we reflect on our journey, we recognize an oversight in our coverage that merits attention. Despite our comprehensive exploration of various facets of the value chain, we have not adequately emphasized the critical role of demand planning. Our Cover Story aims to rectify this past oversight, by recognising Demand Planning as a cornerstone in the architecture of supply chain management, which ensures the balance between supply and demand dynamics. With invaluable inputs from senior practitioners and subject matter experts, we offer our readers a detailed exploration into demand planning practices that are not only best in class but also innovative and forward-looking. While we strive to fill knowledge gaps and enhance our coverage on essential topics, our commitment to promoting diversity within the industry remains unwavering. We bring you an interview with a lady Super Achiever. She shares her journey, challenges, and the unique perspectives that women bring to the table. We also turn our attention to the global stage, highlighting India’s significant presence at the 54th Annual Meeting of the World Economic Forum in Davos. Under the theme ‘Rebuilding Trust’, India showcased its commitment to global cooperation and sustainable development. Our coverage aims to bring our readers closer to the discussions that are shaping the future of economies and societies, reaffirming the importance of trust and inclusivity in forging paths towards recovery and resilience in a post-pandemic world. There is a lot more in this issue so read on. We look forward to hearing your thoughts and continuing to serve as your premier source for all things supply chain and beyond. Warm Regards,
Charulata Bansal Publisher Charulata.bansal@celerityin.com www.supplychaintribe.com
Published by Charulata Bansal on behalf of Celerity India Marketing Services Edited by: Prerna Lodaya • e-mail: prerna.lodaya@celerityin.com Designed by: Lakshminarayanan G • e-mail: lakshdesign@gmail.com Printed by: Xposures, A 210, Byculla Service Industrial Estate, D K Cross Road, Byculla, Mumbai- 400027. Logistics Partner: Blue Dart Express Limited
2 CELERITY February 2024
CONTENTS
FEBRUARY 2024 Volume 8 Issue 2
14 | COVER STORY
Mastering Demand Planning – A Comprehensive Guide to Accurate Forecasting Demand planning envisions achieving and maintaining an effectively lean supply equilibrium, one in which store inventories contain just as many products as demand dictates, but no more. While finding that perfect balance between sufficiency and surplus may prove to be complex, the right set of technology deployment can facilitate companies achieve the right equilibrium. Our Cover Story presents the ‘A to Z’ of Effective Demand Planning for Successful Forecasting wherein subject matter experts lay down a step-by-step approach for companies to achieve the perfect supply-demand matrix.
SPECIAL FEATURE
10 | FOCUS
6 | Trusted Partners in Progress
Indian Exports at Crossroads: Analysing the Impact of CBAM on Supply Chains
“Reliability, Consistency, and Effective Communication are three essential qualities that minimize supply chain disruptions, maintain service levels, and enhance performance,” emphasizes Dr. Arunachalam R, MD & CEO, IBOB & Board of Director, SF Logistics Pvt. Ltd. 8 | Striving to Thrive “The commitment to staying technologically adept positions CJ Darcl to not only meet current industry demands but also proactively adapt to the evolving landscape of logistics and supply chain management,” highlights Nikhil Agarwal, President, CJ Darcl Logistics Ltd. 32 | INTERVIEW
Women SCM Leaders – Connect and Lead people with Compassion and Empathy Arpita Srivastava, Supply Chain Planning & Logistics Leader, Schreiber Foods (India), avows that supply chain is a collaborative sport which represent huge, complex, and dynamic ecosystems.
Dr. Sourabh Bhattacharya, Professor – Operations & Supply Chain Management and Dr. Steven Raj Padakandla, Associate Professor, Institute of Management Technology, Hyderabad, highlight that navigating the future of global trade will require a comprehensive approach, integrating environmental considerations, governmental collaboration, and innovative financial frameworks. 37 | RECAP
Dialogues @ Davos 2024 The 54th Annual Meeting of the World Economic Forum in Davos, under the theme “Rebuilding Trust”, yet again proved to be a poised platform to focus on the fundamental principles driving trust, including transparency, consistency, and accountability. A recap on India’s stance at the global platform… Editor: Prerna Lodaya
DISCLAIMER: This magazine is being published on the condition and understanding that the information, comments and views it contains are merely for guidance and reference and must not be taken as having the authority of, or being binding in any way on, the author, editors, publishers who do not take any responsibility whatsoever for any loss, damage or distress to any person on account of any action taken or not taken on the basis of this publication. Despite all the care taken, errors or omissions may have crept inadvertently into this publication. The publisher shall be obliged if any such error or omission is brought to her notice for possible correction in the next edition. The views expressed here are solely those of the author in his private/professional capacity and do not in any way represent the views of the publisher. All trademarks, products, pictures, copyrights, registered marks, patents, logos, holograms and names belong to the respective owners. The publication will entertain no claims on the above. No part of this publication can be reproduced or transmitted in any form or by any means, without prior permission of the publisher. All disputes are subject to the exclusive jurisdiction of competent courts and forums in Mumbai only.
supplychaintribe.com
3
Show your
METTLE
and win this YOUR NAME HERE
METAL!
Share your success stories and start your journey towards Celerity awards and recogni�on www.supplychaintribe.events/awards
We are back to choose and honour the Best-of-the-Best in Supply Chain These Awards honour the excep onal TALENT, their accomplishments, and contribu ons towards cra�ing the future of supply chains. Nomina ons are open for the exclusive, impar al supply chain awards, dedicated to Indian professionals working globally.
Get your Celerity Stamp of Success! Proudly raise this award at the Celerity Supply Chain Tribe Conference & Awards 2024, scheduled for June 2024, in Mumbai. Exemplary Supply Chains (Corporate Awards) 40-under-40 Supply Chain Super Achievers 30-under-30 Supply Chain Superstars
Why nominate in the Celerity Supply Chain Tribe Awards? Establish a Standard of Excellence among your peers and contemporaries Celerity is unique in owning its magazine, online portal, and social media pla�orms. Seize the opportunity for widespread exposure across our channels and a possibility of being featured in our publica�ons. These awards stand out as the country's sole 'credible' and 'individual' honors, awarded strictly based on merit and not influenced by commercial interests.
Nomina�ons across all categories are open now. For more informa�on and to register your interest, visit www.supplychaintribe.events/awards or for further queries call us on +91 7977105913or write to us at tech@celerityin.com
SPECIAL FEATURE
Trusted Partners in Progress “Reliability, Consistency, and Effective Communication are the three essential qualities for being a preferred logistics partner. These qualities minimize supply chain disruptions, maintain service levels, and enhance performance,” emphasizes Dr. Arunachalam R, MD & CEO, IBOB & Board of Director, SF Logistics Pvt. Ltd., during this exclusive interaction… India is poised to be the Supply Chain Powerhouse of the world. What factors do you think will be driving this opportunity? India's rapidly expanding economy has been increasing the demand for goods and services, fostering a robust supply chain ecosystem in a consumer-driven market. Its geographical proximity to major global markets enables efficient logistics and shorter transit times. Propelling it with recent Investments in infrastructure, such as ports, rails, and roads, has been enhancing connectivity, thus reducing transportation bottlenecks domestically and internationally, as seen in the proposed India-Middle EastEurope Economic Corridor. Initiatives like the Goods and Services Tax (GST) have simplified the tax structure, hence, reducing complexities and improving the ease of doing business The burgeoning e-commerce sector in India is spurring innovations in last-mile deliveries and warehousing. Digitization has been encouraging investment in new technologies for a seamless supply chain flow. Further initiatives like "Make in India" and the "Startup India Initiative" contribute to a vibrant supply chain ecosystem. Participation in global and regional trade agreements has been smoothening cross-border goods movement, attracting international investment. A large, young, and skilled
6 CELERITY February 2024
workforce with Tech-savvy capabilities is adding to cost-effectiveness and efficiency.
How are 3PLs slated to play an enabling role in this growth metamorphosis? In today's world, Third-Party Logistics (3PL) companies have been significantly contributing to our nation’s economy. They have optimized logistics processes for businesses, allowing them to focus on their core competencies, which fosters overall growth. 3PLs have offered cost savings through established networks, economies of scale, and expert solutions. 3PLs, with their global infrastructure and expertise, efficiently manage complex global supply chains, navigating regulatory requirements (including 3PL, 4PL, 5PL relationships). They enhance company resilience against geopolitical issues, natural disasters, and other disruptions. The COVID-19 pandemic highlighted the importance of resilience and diversification showcased by 3PL organizations. Efficient order fulfilment, timely deliveries, and streamlined returns have helped businesses meet customer expectations with a seamless workflow. Moreover, 3PLs are actively engaged in environmentally sustainable practices, aligning with growing corporate social responsibility trends. As India focuses on becoming a global manufacturing and
logistics hub, 3PLs will serve as essential partners, bridging gaps and ensuring the seamless integration of businesses into the evolving supply chain ecosystem.
How is technology facilitating growth for 3PLs? Technology is crucial in a 3PL company's growth to stay competitive. It encompasses the Internet of Things (IoT), Artificial Intelligence (AI), robotics, drone technology, blockchain, fully-automated solutions, and cloud computing. Each technology significantly enhances organizational growth. IoT in logistics ensures transparency, condition monitoring, and better fleet management. AI algorithms and machine learning techniques aid in handling
SPECIAL FEATURE demand fluctuations, reducing operating costs, automating administrative tasks, and speeding up information-intensive operations. Collaborative robots and autonomous mobile robots increase supply chain speed and accuracy while reducing human dependency, making processes more predictable and timeefficient. Analyzing market data through these technologies optimizes supplier pricing, manages inventory levels, and mitigates potential market threats. Overall, technological advancements empower 3PLs to provide more agile, transparent, and cost-effective solutions, fostering their crucial role in the evolving landscape of global supply chains.
What are the top points that make you a preferred logistics partner for the growth of your clients? I believe that reliability, consistency, and effective communication are essential for being a preferred logistics partner. These qualities minimize supply chain disruptions, maintain service levels, and enhance performance. They also ensure process transparency and compliance with data protection, adhering to confidentiality requirements. Leveraging a vast collective experience, we bring a wealth of industry-specific knowledge that extends from Automotive, chemicals, E-commerce, and Pharma to Retail. The rich experience offers insights, ensuring a nuanced understanding of diverse logistics challenges and solutions for real-time results. Our commitment to fact-finding and transparency fosters trust. We believe in open communication, providing clients with accurate and truthful information, and facilitating informed decision-making. With a bend towards adaptability, we proactively embrace new technologies. Our team continually updates its skill set to provide clients with innovative and tailored solutions, ensuring they stay ahead in a dynamic market. A cohesive team with a resolve to solve problems ensures swift and effective resolutions. Our collaborative approach ensures that challenges are met with collective intelligence and problemsolving skills, one specific reason that has allowed us to expand to a 15+ Lac sq. ft of Warehousing reach in just 3 years. Our Strong employee base of over 3000 numbers authenticate that we prioritize a humane approach, recognizing the importance of relationships. Our
supplychaintribe.com
partnerships are built on trust, respect, and understanding, creating a network that values people as much as processes thus helping us reach more than 15000 trips a month. Our commitment is not just to meet but to better deliverables continually, ensuring our clients experience a level of service that goes beyond the ordinary, confirming a strong client base of over 30 valuable Global and Domestic Brands. We actively work on developing a network that promotes transparency and collaboration. We excel in deploying the right people at the right time, adhering to the National Apprenticeship Promotion Scheme (NAPS) and providing operational training across all staff levels. We ensure cross-client experience deployment without compromising data privacy. Our commercial models, like cost per unit, distinguish us in operational efficacy. Our adept leadership consistently evaluates and enhances our operational processes, integrating valuable insights from our clients. The global trend toward fostering foreign investments, exemplified by the successful Global Investors Meet-2024 in Gujarat and Chennai, underscores the potential for increased investments, many of which will be facilitated by thirdparty logistics providers, including our company. As trusted 3PL partners, we are enthusiastic about the prospect of providing unparalleled services to the logistics industry. We look forward to actively contributing to the advancement of our clients and the overall growth of our nation. In summary, our team stands out as a preferred logistics partner by combining extensive experience, a commitment to honesty and transparency, adaptability to new technologies, cohesive problemsolving, a human-centric approach, and a relentless pursuit of delightful deliverables to foster lasting and mutually beneficial relationships with our clients.
What are the pillars of success for new-age logistics service providers? The logistics industry today faces challenges that demand efficiency, innovation, and adaptability. Success hinges on market analysis, customercentric decisions, and continuous improvement. Investing in technology and innovation is crucial. Big Data analytics offers vital insights for supply chain performance optimization.
Significant investments in e-commerce, data-driven decision-making, and real-time visibility shall enhance communication and proactive problemsolving, thus, Prioritizing customer experience through transparent communication, quick responsiveness, and tailored services. . Additionally, strategic collaboration and partnerships within the supply chain ecosystem promote efficiency and agility. Keeping abreast of global supply chain trends is essential. A holistic approach is required to navigate the complexities of the modern supply chain, delivering value to customers and stakeholders.
What are the latent opportunities waiting to be tapped for LSPs? How will logistics marketplace look like in the next decade? By 2034, supply chains will be highly integrated, minimizing routine human intervention. Capability building will be crucial to meet diverse and customized requirements. The focus will be on reducing emissions and waste while optimizing for speed and costeffectiveness. Advanced data analytics, IoT, and predictive algorithms will drive hyper-efficient supply chains, enhancing decision-making and customer satisfaction. Autonomous vehicles and drones will revolutionize long-haul freight and last-mile deliveries, reducing labor costs, improving safety, and increasing efficiency. Zero-emission electric vehicles will become standard for deliveries. Businesses will focus on circular supply chain processes, emphasizing reduce, reuse, and recycle policies. Collaboration platforms connecting various stakeholders will emerge, enhancing coordination and reducing inefficiencies Smart facilities equipped with advanced robotics will manage picking, packing, and warehouse activities, allowing humans to focus on oversight and troubleshooting. Blockchain will significantly impact data transparency, traceability, and security in supply chain solutions. LSPs embracing these trends will thrive in India's evolving logistics landscape, characterized by digitalization, collaboration, and sustainability.
7
SPECIAL FEATURE
Striving to Thrive “The commitment to staying technologically adept positions CJ Darcl and other 3PL providers to not only meet current industry demands but also proactively adapt to the evolving landscape of logistics and supply chain management,” highlights Nikhil Agarwal, President, CJ Darcl Logistics Ltd., during this exclusive interview…
India is poised to be the Supply Chain Powerhouse of the world. What factors do you think will be driving this opportunity? Over the past decade, India's supply chain industry has undergone significant transformation, driven by technological advancements, policy reforms, and entrepreneurial initiatives. Positioned as a global supply chain powerhouse, India has proven itself trustworthy by assisting the world in times of need. With a substantial workforce, competitive cost structures, and government initiatives like Make-in-India and Production Linked Incentive (PLI) schemes, the country has become an attractive destination for efficient logistics practices. E-commerce has witnessed exponential growth, reaching tier 2 and tier 3 cities nationwide, driving parallel growth in the logistics sector to meet rising demand. The increasing e-commerce penetration and internet usage have spurred demand for warehouses and efficient logistical practices, enhancing nationwide connectivity. CJ DARCL Logistics aims to contribute positively to the logistics and supply chain market by offering comprehensive end-to-end solutions. Specializing in project logistics, freight forwarding, shipping & coastal, full truck load, warehousing and distribution, and air cargo, CJ DARCL Logistics aims to be a unique one-stop solution, supporting India's position as a global supply chain powerhouse.
8 CELERITY February 2024
How are 3PLs slated to play an enabling role in this growth metamorphosis? As e-commerce surges, driven by changing consumer behavior and government support, India's 3PL market is set to expand substantially. 3PLs play a crucial role in e-commerce and inventory management, facing the challenge of scaling operations. Utilizing advanced systems like Warehouse Management Systems (WMS), initiates streamlined operations, increased productivity, and automated logistics spanning order management to delivery. This scalable solution adapts to growing demands, aligning seamlessly with the expanding e-commerce landscape. Data analytics strategically applied enhances inventory control by analyzing historical sales and demand. In summary, 3PL is pivotal for the growth and efficiency of businesses, becoming integral to the evolving supply chain and logistics landscape CJ Darcl is strategically positioning itself in the logistics sector, providing comprehensive warehousing and distribution solutions to fortify the supply chain. Their multi-user warehouse facility incorporates advanced capabilities such as shelf-life maintenance, product mixing, packaging, cross-docking, barcode scanning, and order fulfillment. With specialized warehouses like climate-controlled and automated facilities, CJ Darcl optimizes layout for value-added services, enhancing accuracy and throughput. The company's vision includes end-to-end solutions,
exemplified by the launch of strategically located warehouses for efficient last-mile delivery, enhancing their overall supply chain management model.
How is technology facilitating growth for 3PLs? Technology has revolutionized India's logistics and supply chain industry, with 3PL leading this transformation. Specializing in transportation, warehousing, inventory, and supply chain management, 3PL allows firms to focus on core strengths while leveraging technology and extensive networks. From real-time tracking to advanced analytics, technology enhances operational efficiencies, reduces costs, and improves customer experiences. CJ Darcl Logistics embraces technology, employing an Inventory Management Dashboard for 3-D visualization, optimizing stock aging and resource productivity. Utilizing
SPECIAL FEATURE Warehouse Management Systems and AI-enabled safety technology, including smart safety dash cams, ensures road safety practices. Automation in CJ Darcl's warehouses, like automated picking systems and temperature control, increases operational efficiency. Electric and industrial material trucks facilitate in-house placement and arrangement, contributing to effective inventory management. Furthermore, the integration of emerging technologies like blockchain and the Internet of Things (IoT) enhances the transparency and traceability of goods throughout the supply chain. This not only minimizes the risk of errors but also strengthens compliance and accountability. CJ Darcl Logistics, in alignment with technological advancements, continues to explore and implement innovations to stay at the forefront of 3PL excellence. The commitment to staying technologically adept positions CJ Darcl and other 3PL providers to not only meet current industry demands but also proactively adapt to the evolving landscape of logistics and supply chain management.
What are the top points that make you a preferred logistics partner for the growth of your clients? CJ Darcl Logistics envisions leading the logistics service sector in India by 2027, driven by strategic investments in advanced technologies. The company's adoption of state-of-the-art transport management solutions, technologydriven freight management, digitization, and customer connectivity through portals surely ensures a competitive edge. CJ Darcl Logistics stands out by offering end-to-end logistics solutions tailored to its clients' needs, covering diverse sectors such as iron and steel, oil and gas, automobile, pharmaceutical, consumer durables, infrastructure, textile, and chemicals. Shifting operations from road to rail, road to coastal, and exploring innovative transportation routes further highlights our dedication to environmental responsibility. Verticals such as Project Cargo, Contract Logistics, Warehousing & Distribution and Air Cargo, combined with centralized fleet management, positions the company as a provider of cost-effective and innovative solutions. CJ Darcl Logistics is uniquely authorized
supplychaintribe.com
The industry’s success lies in continually improving its value proposition for shippers and customers, addressing industry challenges, and providing an enhanced customer experience. By staying informed about emerging trends and leveraging technological advancements, logistics service providers can position themselves as leaders in this dynamic and evolving landscape.
to book air cargo across any airline operating in India, offering unparalleled flexibility. The company's investments in special multi-dimensional containers for various cargo types and the provision of dedicated and multiuser warehousing facilities at strategic locations further contribute to our distinctive position in the market.
What are the pillars of success for new-age logistics service providers? Success for new-age logistics service providers is anchored in digital transformation, sustainability, trend awareness, supply chain agility, and effective complexity management. The adoption of Logistics 4.0 technology, which utilizes innovative technologies such as robotics, AI, digital twins, cloud computing and IoTs to bring about transformational change in logistics operations is necessary for building sustainable supply chain networks. Logistics companies must swiftly adapt to cutting-edge technologies, pioneering processes, and strategic approaches to thrive in a fiercely competitive environment. Start-ups are revolutionizing the logistics industry by offering innovative solutions that enhance transparency and optimize capacities. The industry's success lies in continually improving its value proposition for shippers and customers, addressing industry challenges, and providing an enhanced customer experience. By staying informed about emerging trends and leveraging technological advancements, logistics service providers can position themselves as leaders in this dynamic and evolving landscape.
What are the latent opportunities waiting to be tapped for LSPs? How will the logistics marketplace look like in the next decade? For logistics service providers (LSPs), untapped opportunities lie beneath established pathways. Data serves as a powerful analytical tool, allowing LSPs to optimize routes, manage warehouses efficiently, and anticipate future demand. This data-driven approach leads to significant cost savings and operational improvements. By cultivating expertise in domains like healthcare and e-commerce, they can differentiate themselves and attract different clientele. The growing emphasis on sustainability presents a unique opportunity for LSPs to embrace electric fleets, renewable energy-powered warehouses, and packaging. Establishing themselves as eco-conscious leaders allows the logistics service providers to navigate a future where profitability and environmental responsibility coexists. Building robust partnerships with technology providers, reliable freight forwarders, and dedicated last-mile delivery specialists enables LSPs to offer end-to-end solutions and cater to diverse customer needs. Ultimately, the customer-centric approach also plays a crucial role. Real-time tracking updates, proactive communication, and value-added services like packaging and assembly empower customers and enhance satisfaction, creating loyalty that flows through the marketplace. The logistics service providers are embracing data-driven insights, specialization, sustainability, collaboration, and customer-centricity that holds the keys to unlocking the future painting the landscape of efficiency and unparalleled customer satisfaction in the logistics industry.
9
FOCUS
INDIAN EXPORTS AT CROSSROADS: Analyzing the Impact of CBAM on Supply Chains
Recently, following the footsteps of the European Union (EU), the United Kingdom (UK) has also announced its intention to introduce the Carbon Border Adjustment Mechanism (CBAM) starting 2027. Although the specifics of its implementation are still under discussion, CBAM has elicited sharp reactions from both the Government of India (GOI) and Indian industry experts. The implementation of CBAM by the UK is projected to impose a tax ranging from 14% to 24% on approximately $775 million worth of Indian exports. On one hand, policies such as CBAM may render Indian products more costly in the EU markets, creating a competitive disadvantage. On the other hand, these policies present themselves as an opportunity to establish domestic market mechanisms for carbon trading, positioning India to adapt to the inevitable global transition toward carbon prices throughout the global value chains, highlight Dr. Sourabh Bhattacharya, Professor – Operations & Supply Chain Management and Dr Steven Raj Padakandla, Associate Professor, Institute of Management Technology, Hyderabad.
Dr Steven Raj Padakandla has worked in several corporates as Economist and Sr. Analyst and was associated with policy think-tanks. His research interests are economics of climate change and contemporary macroeconomics. He regularly contributes opinion based articles in various national and international newspapers and magazines.
10 CELERITY February 2024
Dr. Sourabh Bhattacharya studies the challenges of implementing Circular Economy and close-loop supply chains in emerging economies, especially focusing on the unorganized sectors. He also researches on the societal issues of Sustainable Innovation focusing on ethics and moral paradoxes Sustainable Innovation organizations face and navigate through. Dr Bhattacharya holds a Ph.D. in Supply Chain Management from ICFAI University, Dehradun and been part of the prestigious Executive Education Program of Harvard Business School, USA.
FOCUS
CBAM
is a strategy designed to mitigate the potential risk of "Carbon Leakage". Carbon leakage occurs when businesses within the EU relocate their carbonintensive production activities to countries with less stringent climate policies or when carbon-intensive imports replace EU products. CBAM addresses this issue by placing a price on the carbon emitted during the production and transportation of carbonintensive goods entering the EU. The goal is to incentivize cleaner industrial production in non-EU countries. By confirming that a price has been paid for the embedded carbon emissions in the production of specific imported goods, CBAM ensures that the carbon price of imports aligns with the carbon price of domestic production. Initially, the CBAM will be applicable to imports of specific goods characterized by carbon-intensive production and a heightened risk of carbon leakage. These include cement, iron and steel, aluminum, fertilizers, electricity, and hydrogen. Upon full implementation by January 2026, CBAM will require importers to declare the total quantities of goods imported and the corresponding embedded emissions, including the scope 3 emissions, in those goods during the preceding year. Importers will then be required to surrender an equivalent quantity of CBAM certificates as payment for the imposed carbon price. CBAM certificates can be purchased from
EU Emission Trading Systems (ETS), an EU carbon market which works on a “Cap and Trade” principle.
INDIA’S EXPOSURE TO CBAM Upon full implementation in January 2026, CBAM will encompass a restricted range of the most carbon-intensive goods, such as aluminum, cement, electricity, and iron and steel. In later years, the CBAM will likely be expanded to cover additional carbon-intensive goods. Certain non-EU countries export substantial quantities of these goods to the EU where the carbon emission intensity of these goods from non-EU sources notably exceeds that of EU countries. The contrast in carbon intensity between EU and non-EU countries places the latter at a disadvantage, as they are subject to higher carbon taxes than their EU counterparts. Within specific sectors, significant disparities in carbon emission intensity exist (see Figure-1). Within the four sectors, it is the iron and steel industry that significantly dominates the carbon emissions from non-EU countries. The non-EU countries' contribution to carbon emissions in the steel and iron sectors surpasses that of EU countries by over four times. This implies that despite potentially lower trade volumes, the high carbon emission intensity results in a substantial embodied carbon payment per dollar of exports to the EU. Figure-2 portrays the CBAM exposure for selected non-EU countries in the iron and steel sector, while Figure-3 presents the carbon emission intensity for these
same countries in the same sector. India demonstrates a significant exposure to CBAM, particularly in the iron and steel sector. Despite a relatively lower proportion of exports to the EU (23.5%) compared to countries like Zimbabwe, which boasts the highest export of iron and steel products to the EU (91.7%), India's exposure is notably higher. Clearly, the Indian iron and steel sector will bear the consequences of its elevated carbon emission intensity. Conversely, countries like Cambodia and Turkey with significantly low carbon emission intensity, will experience a competitive advantage in the iron and steel sector within EU markets. It's evident for EU importers, the higher their scope-3 upstream emissions, the more CBAM certificates they will have to purchase. Similarly, for Indian iron and steel exporters to maintain competitiveness in EU markets, substantial efforts are needed to decarbonize their supply chain.
DECARBONIZING INDIAN STEEL SUPPLY CHAIN India 's steel sector contributes approximately 12% to the country's carbon dioxide (CO2) emissions, exhibiting an emission intensity of 2.55 tonnes of CO2 per tonne of crude steel (tCO2/tcs). This is in contrast to the global average emission intensity of 1.85 tCO2/tcs. Annually, the steel industry in India is responsible for approximately 297 million tonnes of CO2 emissions, and this figure is anticipated to double by 2030, given the Indian government's ambitious target of increasing the
As we contemplate the implications of CBAM, it becomes evident that this is just the initiation of a broader global carbon taxation regime. Given the escalating severity of climate change, such mechanisms are poised to evolve into standard practices in global trade. Companies will be compelled to devise mechanisms for evaluating the environmental impacts of their operations, extending scrutiny beyond scope-1 and 2 emissions to encompass scope-3 emissions involving both upstream and downstream partners. Crucially, government support will play a pivotal role in facilitating the development of infrastructure and providing financial assistance to facilitate the transition toward greener production. supplychaintribe.com
11
FOCUS
Figure 1: Average Carbon Emission Intensity of Exports (EU vs. non-EU) (Source: World Bank)
Figure 2: CBAM Exposure for select non-EU countries in iron & steel sector (Source: IMF)
Figure 3: Carbon emission intensity of export of select non-EU countries in iron & steel sector (Source: World Bank)
12 CELERITY February 2024
steel production to 300 million tonnes annually from its current level of 120 million tonnes. The heightened emissions in India can be attributed to the fact that 50% of steel manufacturing employs the emission-intensive Blast Furnace-Basic Oxygen Furnace (BF-BOF) process. Moreover, the emission intensity of alternative steel production processes in India, such as coal-based Direct Reduced Iron (DRI) or gas-based DRI, exceeds the global average. The Government of India (GOI) has implemented measures to reduce carbon emissions in the steel sector, which include the Steel Scrap Recycling Policy 2019 to encourage enhanced resource efficiency and material circularity. Additionally, the Perform, Achieve and Trade (PAT) scheme has been introduced to boost energy efficiency. However, the pivotal initiative is the National Green Hydrogen Mission (NGHM), where the Ministry of Steel has been allotted 30% of the pilot project budget, amounting to Rs14.66 billion (US$177 million), with the aim of advancing the utilization of green hydrogen in the steelmaking process. In addition, carbon capture, usage, and storage (CCUS) is another area that holds significant promise to reduce the carbon emissions in the steel industry. CCUS entails capturing CO2 primarily from significant point sources like power generation or industrial facilities utilizing fossil fuels or biomass. When not utilized on-site, the compressed CO2 is transported via pipelines, ships, rail, or trucks for various applications or injected into deep geological formations like depleted oil and gas reservoirs or saline aquifers. Nevertheless, there are hurdles in expanding these approaches. Firstly, the cost associated with establishing these technologies are excessively high. According to an estimate by S&P Global, DRI plants incorporating upstream green hydrogen generation might incur costs of around $4000 per tonne. Likewise, the installation of a CCUS facility for an iron and steel plant with a capacity of 2 million tons per annum would necessitate an initial investment ranging between $340 million and $430 million. Furthermore, the effectiveness of CCUS (Carbon Capture, Utilization, and Storage) technology is a subject
FOCUS CBAM is the EU’s landmark tool to fight carbon leakage and one of the central pillars of the EU’s ambitious Fit for 55 Agenda. It will equalise the price of carbon between domestic products and imports. This will ensure that the EU’s climate policies are not undermined by production relocating to countries with less ambitious green standards or by the replacement of EU products by more carbon-intensive imports. CBAM is a WTO-compatible measure that encourages global industry to embrace greener and more sustainable technologies. Source: European Commission
Image courtesy: European Commission
of debate, with experts expressing scepticism about its capability to significantly reduce emissions. Secondly, the existing infrastructure to support these initiatives is presently insufficient. There is a substantial need for the expansion of network infrastructure to transport and store captured carbon.
COMBATING CBAM TO CREATE FAIR PLAYGROUND: Although the GOI’s endeavour to make Indian industries and their supply chains carbon neutral may take some time to come to fruition, the immediate challenge it faces is the CBAM which will render Indian exports to EU and UK costlier and less competitive. To combat this pressing problem the GOI has certain plans. m Carbon tax at the country of origin: Pointing to the perceived unfairness of applying the same carbon price in both India and Europe, the GOI is contemplating to implement carbon taxes domestically
supplychaintribe.com
by developing a domestic carbon credit trading system. The revenue generated from these taxes will be directed toward India's green energy transition. This strategy indirectly supports exporters, enabling them to transition to cleaner energy practices and subsequently reduce their carbon footprint. As a result, there won't be an additional Carbon Border Adjustment Mechanism (CBAM) tax imposed at the European border. m Negotiate the prices of imports to counterbalance the carbon tax: Another proposal under consideration involves negotiating and including in the ultimate price of a finished product (manufactured using the previously exported item) arriving from European Union nations, or on similar items, an amount equivalent to the imposed carbon tax on exports from India. This indirect approach aims to repatriate the tax collected from Indian companies back to the country.
m Carbon tax on imports: Imposition of a carbon tax on imports from nations with high per capita carbon emissions can be a possible response to combat CBAM. As we contemplate the implications of CBAM, it becomes evident that this is just the initiation of a broader global carbon taxation regime. Given the escalating severity of climate change, such mechanisms are poised to evolve into standard practices in global trade. Companies will be compelled to devise mechanisms for evaluating the environmental impacts of their operations, extending scrutiny beyond scope-1 and 2 emissions to encompass scope-3 emissions involving both upstream and downstream partners. Crucially, government support will play a pivotal role in facilitating the development of infrastructure and providing financial assistance to facilitate the transition toward greener production. Moreover, addressing the disparities arising from mechanisms like CBAM necessitates the establishment of a domestic carbon credit trading system. In essence, navigating the future of global trade will require a comprehensive approach, integrating environmental considerations, governmental collaboration, and innovative financial frameworks.
13
COVER STORY
Mastering Demand Planning: A Comprehensive Guide to Accurate Forecasting
14 CELERITY February 2024
COVER STORY Demand planning envisions achieving and maintaining an effectively lean supply equilibrium, one in which store inventories contain just as many products as demand dictates, but no more. While finding that perfect balance between sufficiency and surplus may prove to be complex, the right set of technology deployment can facilitate companies achieve the right equilibrium.“There is a big transformation in the demand planning space,” stated David Simchi-Levi, Professor – Engineering Systems, Massachusetts Institute of Technology (MIT) and Director, MIT Data Science Lab. “At a high level, companies are starting to use multiple sources of data to better understand and predict future demand.” This message emphasizes that effective demand planning warrants the use of demand forecasting techniques to accurately predict demand trends, which indirectly results in value-added benefits, such as heightened company efficiency and increased customer satisfaction. Our Cover Story this time presents the ‘A to Z’ of Effective Demand Planning for Successful Forecasting wherein subject-matter experts lay down a step-by-step approach for companies to achieve the perfect supply-demand matrix.
supplychaintribe.com
15
COVER STORY
Crucial elements of an effective Demand Planning process By combining these elements, businesses can not only predict and meet customer demands effectively but also build a demand planning process that is resilient, datadriven, and adaptable to the ever-changing business landscape.
Rayapati Srinath Reddy, Associate Director - Supply Chain Transformation, PepsiCo: Here's a distilled and refined perspective on the crucial elements of an effective demand planning process:
seamlessly with inventory management. s Employ techniques like safety stock for efficient stock levels.
DATA MASTERY:
s Develop scenarios for demand fluctuations and unexpected events. s Maintain adaptable plans for different outcomes.
s Begin with accurate historical data. s Prioritize data quality and cleanliness.
UNIFIED COLLABORATION: s Foster seamless communication across departments. s Create a unified approach to sharing insights and strategies.
MARKET SAVVY: s Analyze market dynamics and industry trends. s Stay agile and responsive to market changes.
SEGMENTATION PRECISION: s Segment markets strategically. s Tailor forecasting methods for each segment's unique characteristics.
ADVANCED FORECASTING: s Implement cutting-edge forecasting models. s Continuously refine models based on performance feedback.
LEAD TIME INTEGRATION: s Factor in lead times for procurement and production. s Evaluate and mitigate potential supply chain disruptions.
OPTIMIZED INVENTORY STRATEGIES: s Integrate
demand
planning
16 CELERITY February 2024
RESILIENT SCENARIO PLANNING:
TECH-DRIVEN EFFICIENCY: s Utilize advanced demand planning tools. s Integrate technology for smooth cross-functional coordination.
CONTINUOUS EVOLUTION MINDSET: s Regularly review and enhance the demand planning process. s Learn and grow from past forecasting errors.
PERFORMANCE EXCELLENCE METRICS: s Establish and monitor key performance indicators. s Metrics should include forecast accuracy and inventory optimization. Himanshu Maloo, VP – Supply Chain Planning, Diageo: Demand Planning process in any industry is the backbone of supply chain. It has implications in every element of supply chain and if managed effectively can help company to create edge over competition. Crucial elements of Demand Planning process include adherence to planning drumbeat (Planning calendar); accurate use of demand history; using right tool and methods for statistical forecasting;
bringing in market intelligence by following right set of demand drivers; aligning the demand plans with Marketing and Sales strategy; deploying demand sensing for even planning (e.g. big sale days, festival impact, etc.); building demand analytics for right decision making; and finally, aligning the numbers with all stakeholders. Hanuman Swami, Global Planning & Fulfillment Manager, ABB: Synchronization between sales and marketing team, suppliers, stake holders are the vital ones for effective demand planning. Ignorance shouldn’t be there for external and internal trends. External trends usually influence businesses even more intensively than internal ones. Various external factors can impact the ability of a business or investment to achieve its strategic goals and objectives. These external factors might include competition, socio-cultural, legal, technological changes, economy, and political environment. Since a slight change by either increase or decrease in demand has a corresponding effect on revenues and profits, it is crucial for any business to improve forecasts and increase planning accuracy. Yogesh Punde, Senior Industry Principal, Kinaxis: Supply chains are global with long lead times; however, customer demand remains volatile. Therefore, crucial elements of effective demand planning process include: s Forecasting to give desired level of visibility to suppliers. There are multiple demand signals from sales, marketing, distributors, and customers. These signals need to be reconciled to create bottom-up and top-down forecasts. s Advanced statistical forecasting techniques for configured item and option forecasting s As part of Sales & Operations Planning (S&OP), able to provide consensus Demand Plan s Aggregation and disaggregation of demand plan across different hierarchy levels s New product introduction incorporated with demand planning – ramp ups and ramp downs.
COVER STORY Guru Ananthanarayanan, Country Head – India, Blue Yonder: Blue Yonder highlights the following crucial components of a “multi-dimensional approach”: s Data integration: Integrating social media, weather, sales, and other external and internal data sources to provide comprehensive insights. s Machine Learning & AI: Using sophisticated algorithms to identify anomalies and forecast data accurately. s Scenario Planning: Modeling different scenarios to evaluate possibilities and hazards. s Collaboration & Consensus: Promoting buy-in and communication across departments (finance, marketing, sales, and so on).
are a few relevant questions that must be addressed, such as: s Marketing Vs Operations – Where does the Demand Planning function sit? My view is it should be marketing. They generate demand. They are closer to customers. s Centralized Vs Decentralized – Are demand planners aligned to markets or line of products or countries? Decentralized demand planning organizations are more effective. s Choice of Software – You can forecast with excel too If you have access to the models. Do not be so obsessed with your forecasting software. They all have more or less the same set of time series and regression models s Leverage the modern algorithms to classify, segment and cluster products for leveraging the power of
aggregation beyond ABC/XYZ/VED. Make it more dynamic. s Data Pipelines – Know the demand at point of sale. Leverage technology to record demand instantly. Do not make demand planning a ‘Monthly’ or weekly affair. s Understand that bad demand plans should not compromise the customer delivery service levels. You can always compensate for a bad demand plan with a more responsive supply plan(ners). s Know that whatever may be the accuracy of your forecast, you have a limited capacity and that too many SKUs, deplete capacity and utilization of capacity (e.g. machine output and human output) way sooner than you think.
s Continuous Improvement: Monitoring and modifying the procedure on a regular basis in accordance with feedback and realtime data. Rahul Vishwakarma, Co-Founder & CEO, Crest: The crucial elements of an effective Demand planning process are Appropriate product history; Internal trends; External trends; Events and promotions; Bottoms up Data Collection to enable Demand Sensing. Loknath Rao, Managing Partner, The Management Technician: Companies must first need to understand the objective of demand planning. Is it for planning better distribution planning (deployment of stocks in regional warehouses) or long-term production planning or better shelf availability at stores? They shouldn’t rely too much on the past sales data and have forward-looking data too. E.g. Market Research, Industry reports. Demand Elasticity. Demand planners should be able to calibrate the demand forecast with human input too, e.g. short-term sales targets, marketing forecasts at product line or brand level. Companies much have a process in place to capture everyone’s view on forecast. Demand Planner is just a moderator not the only decision maker. Besides, there
supplychaintribe.com
Tech Play in Demand Planning
Yogesh Punde, Senior Industry Principal, Kinaxis Accurate demand planning (Forecast) results in • Reduced costs due to manufacturing, transportation, temporary storage, product scrap/obsolescence, manpower. • Reduced inventory levels mean reduced carrying costs. • Improved customer service levels the right product at the right place at the right time (and in the right quantity). Demand planning assisted by AI, automated machine learning, analytics and heuristics will help detect shifting data patterns, predict changes in demand and automatically update and optimize forecasts. Day by day, supply chains are becoming complex, and handles huge data therefore with automated data transformation, ML model selection and manage by exception workflows, planners will be able to save time and focus only on exceptions. ML generated results have explainable algorithms to know which data features affect demand predictions and will help in better understanding of business.
17
COVER STORY
Factors impacting Demand Forecasting Effective demand forecasting integrates accurate data, market awareness, and adaptability to a dynamic landscape, treating these factors not as isolated components but as interconnected elements shaping a comprehensive forecasting strategy. Rayapati Srinath Reddy: These are some of the most important factors that impact demand forecasting… Accurate historical data is paramount: Data integrity is the bedrock; it determines the reliability of any forecast. Market trends shape future demand: A keen awareness of market dynamics ensures forecasts align with consumer preferences. Economic shifts influence consumer spending: Economic indicators act as critical signals for anticipating changes in demand. Seasonal changes impact buying behaviors: Specialized models, attuned to each season, ensure accurate predictions during peak times. A product's lifecycle stage affects demand: Strategic adjustments to forecasts based on lifecycle stages optimize planning. Competitor actions influence consumer choices: Integrating competitor strategies refines forecasting realism. Promotions can cause demand spikes: Integrating promotional data ensures models reflect market realities. Disruptions affect product availability: Building resilience and contingencies safeguards forecasting accuracy. Consumer insights refine understanding: Real-time integration
18 CELERITY February 2024
of customer feedback ensures forecasts mirror consumer expectations. Technology alters consumer interactions: Adapting forecasting models to technological shifts maintains relevance. Regulations influence production and distribution: Proactive anticipation and adjustment for regulatory shifts. Unforeseen events disrupt markets: Integrating risk management ensures adaptability to global uncertainties. Demographic shifts redefine target markets: Regular demographic updates maintain forecast accuracy. Some industries exhibit cyclical patterns: Recognizing and adjusting for cyclical trends enhances long-term forecast accuracy. Cultural shifts influence consumer behavior: Social awareness aids in adapting forecasts to evolving consumer values. Guru Ananthanarayanan: s Historical Sales Data: A baseline is provided by trends and seasonality patterns. s Promotions & Marketing Campaigns: Plan for demand spikes driven by marketing campaigns. s Economic Indicators: Consumer confidence, unemployment, and inflation are all having an impact on purchasing power.
s The competition: Adjustments to prices or the launch of new products might have an impact on demand. s External Events: Demand could be influenced by social media trends, weather, and natural disasters. Rahul Vishwakarma: According to me, there are two important factors that need to be looked upon. These include internal and external factors. Internal Factors encompass sales and marketing strategies; pricing strategies; product life cycle; new product introductions; inventory levels; production capacity; and quality control. External factors include economic conditions; seasonality; competitor actions; technology and innovation; regulatory changes; social and cultural trends; natural disasters and external shocks; and global events. Businesses that take a holistic approach, considering a broad range of influencing elements, are better equipped to adapt their strategies and operations to meet changing demand conditions. Advanced analytics and machine learning help in processing large datasets and identifying patterns to improve the accuracy of demand forecasts in the face of these dynamic factors.
COVER STORY
Challenges of Demand Forecasting and strategies to overcome them What people want today might not be what they want tomorrow, especially when it comes to products and services that are highly volatile. Forecasting those changes is complex and can result in unreliable demand predictions. Hanuman Swami: External factors include but are not limited to weather, competition and events, current macroeconomic conditions, social media buzz around products or services and many others. Forecasting those effects manually and including them in the forecasting process is a huge challenge. Data is not perfect in most of the businesses, this is quite challenging in demand planning and forecasting. We often struggle with long lead time. All our efforts go wrong when we don’t get supply due to long lead time. Some companies need to create forecasts for many individual items, services, and product variants. This makes demand forecasting more difficult. Demand forecasting at the SKU level is a very time-consuming and complicated process, which is why it makes sense to rely on machine learning. The final reason why demand forecasting can be difficult is that it's often hard to get everyone on-board. Demand planning is not an exact science. There will always be some uncertainty associated with it. This can make it difficult to convince people to use forecasts as a decision-making tool. We should always take expert opinion and avoid miscommunication between different departments within the supply chain. Also, I have seen that the sales team overpower the supply chain teams, which should be avoided. According to me, data clean-up is must before proceeding for any calculations. We should be considering input from experts, who works day in and day out with business/customers. There needs to be greater synchronization between supply chain departments, as well as sales and marketing. Yogesh Punde: The biggest challenge is demand uncertainty due to volatility in market, knowing trends and seasonality,
supplychaintribe.com
identifying outliers, and intermittent demand patterns. s Gathering demand input from all key stakeholders – including sales, marketing, finance, operations, and customers. Demand planning processes are slow, siloed, and inefficient. It takes weeks to make critical decisions when plans don’t align with reality. When changes do happen, communication between business functions often falters s Consideration of external digital signals like weather, holidays and economic indicators and its impact on demand changes s Improving short term and long term forecast accuracy. s Collaborating with various stakeholders and arriving at consensus demand plan. s With New product introduction, understanding the cannibalization of the forecast for a product or group of products. Strategies to overcome demand planning challenges could be the following: s Use of advanced statistical Forecasting techniques to gauge Forecast value add. s 100% forecast accuracy doesn’t exist, therefore, to manage the changes and volatility in demand, many companies are using ‘Concurrent Technique’ for planning to respond simultaneously and continuously when changes arise. s Segmentation: Categorize and prioritize customer demand based on
product complexity, manufacturing process, customer service needs, strategic importance. Segmentation helps decide the best forecasting and demand planning strategies. E.g. High Value low volatility items will drive towards Make-to-stock policy. The higher volatility products lead towards make-to-order design and postponement strategies. s Having a single source of truth for all planning functions including demand planning provides a platform for strong collaboration amongst all stakeholders and the team can respond quickly to market changes. • Usage of AI/ML in demand sensing, particularly for refining short term forecast is on rise. Guru Ananthanarayanan: Companies face difficulties because of: s Data Silos: Accurate forecasting is hindered by fragmented data across systems. s Market Volatility: Demand patterns are disrupted by unanticipated circumstances such as pandemics or economic disturbances. s Short Product Lifecycles: Agile forecasting changes are required for new products and trends. To overcome such challenges, there are wellestablished strategies such as… s Centralized Data Platform: Integrate data sources for an indepth analysis. s AI-driven Forecast Models: Identify emerging trends and adapt to changing market conditions. s Real-time Visibility & Collaboration: Exchange ideas and react quickly to arrive at informed choices. Rahul Vishwakarma: There are a lot of challenges in demand forecasting based on the size and complexity of the supply chain across industries such as adopting forecasting too soon in the product life cycle; depending heavily on external market data; not leveraging live
19
COVER STORY or near-live data to correct the plans, etc. However, solving them requires collaboration and Communication; scenario planning; risk management; technology enablement; improved flexibility and adaptability; feedback loops; and continuous improvement now also facilitated by technology. Loknath Rao: There are many challenges associated with demand planning. These are: s Gathering Data – The best proxy for customer/market demand. In most firms, the distribution demand is the easiest proxy for demand. s Understanding Product Life Cycle Stage – New Vs Not so new Vs Regular SKUs – Planners are often blinded here. They over-average at times. Sometimes they are not even aware the new products demand plan should have been in place three months ago. s Understanding that not all demand is for anonymous customers. Some customer segments are more important than others. So, you need to Plan demand for your key accounts separately from the ‘rest’. s Not able to agree on a calendar of Demand-Supply review meetings, esp. if demand forecast directly needs to drive production planning early. s Not having a clear understanding of lead times results in wrong ideas like ‘Frozen Horizon’. If you can change the forecast, you must. In most companies, the planners on the supply side are not happy with demand plan changes but most often there isn’t really a reason to panic. Both are servicing customers. Not penalizing each other.
Rayapati Srinath Reddy, Associate Director - Supply Chain Transformation, PepsiCo
Challenges of Demand Forecasting: Market Uncertainties: External factors introduce volatility in demand. Data Reliability Concerns: Inaccurate historical data undermines forecasting accuracy. Dynamic Industry Landscape: Swift industry changes impact forecasting precision. Seasonal Complexity: Accurately predicting demand during seasonal shifts is challenging. Product Life Cycle Disruptions: Introducing or phasing out products can disrupt forecasting. Supply Chain Vulnerabilities: Disruptions in the supply chain lead to inaccurate forecasts. Shifting Consumer Dynamics: Changes in consumer behavior impact demand unpredictably. Complex Product Portfolios: Managing diverse products with unique characteristics complicates forecasting.
Strategies to Overcome Demand Planning Challenges: Incorporate Advanced Analytics: Utilize advanced analytics, machine learning, and AI for more sophisticated and accurate forecasting. Promote Cross-Functional Collaboration: Foster collaboration among departments to leverage diverse insights and align strategies. Continuous Monitoring and Adaptability: Regularly monitor actual demand against forecasts and swiftly adapt strategies. Tailored Demand Segmentation: Segment markets strategically and customize forecasting approaches for each segment. Enhance Data Accuracy: Invest in continuous efforts to improve data quality, ensuring reliability and accuracy. Scenario-Based Planning: Develop scenarios for varied demand outcomes and establish proactive plans for each scenario. Holistic Integration Across Functions: Seamlessly integrate demand planning with sales, marketing, and supply chain functions for a comprehensive strategy. Regular Review and Continuous Improvement: Conduct frequent reviews of the demand planning process, learn from experiences, and refine strategies continuously. Customer-Centric Insights Integration: Integrate customer feedback and insights into forecasting models for a deeper understanding of demand drivers. Embrace Agile Methodologies: Adopt agile methodologies to respond quickly to market changes and unforeseen events. By addressing these challenges with a holistic and adaptive approach, organizations can elevate the precision and effectiveness of their demand planning processes.
20 CELERITY February 2024
COVER STORY
Tech play in Demand Planning Technology plays a crucial role in demand planning by providing businesses with the tools and insights needed to anticipate customer needs, optimize inventory levels, and enhance overall operational efficiency.
Rayapati Srinath Reddy: By combining insights from AI with the wisdom of experienced demand planners, businesses can unlock a level of foresight, agility, and responsiveness that was once unimaginable. Beyond Accuracy: Embracing the Uncertainty: Think of technology as a seer, not just a calculator. While accurate forecasts are vital, traditional methods often crumble under the weight of unpredictable markets and evolving customer behavior. This is where AI shines. Machine learning algorithms can uncover hidden patterns in diverse data, including social media sentiment, news trends, and weather forecasts, painting a richer picture of future demand. Imagine predicting a surge in sunscreen sales due to an unexpected heatwave - that's the power of technology transcending mere numbers. From Prediction to Prescription: Demand planning isn't just about knowing what's coming; it's about being ready for it. Technology goes beyond forecasting by offering prescriptive recommendations. AI can suggest production adjustments, inventory shifts, and even dynamic pricing strategies based on anticipated demand fluctuations. This proactive approach allows businesses to outmaneuver uncertainty and capitalize on emerging opportunities. The Agile Advantage: In today's fastpaced world, static plans are relics of the past. Technology injects agility into demand planning. Real-time dashboards provide transparent visibility into demand and inventory levels, enabling lightning-fast adjustments to the changing conditions. Imagine identifying a stockout threat hours before it happens and triggering automated replenishment
supplychaintribe.com
- that's the agility technology brings to the table. Collaboration Symphony: Demand planning isn't a solo act. It's a symphony of departments, all playing their instruments in harmony. Technology acts as the conductor, ensuring everyone operates from the same score. Cloud-based platforms create a single source of truth for data, fostering seamless collaboration between sales, marketing, operations, and even suppliers. This synchronized approach optimizes resource allocation and minimizes friction, turning silos into a unified orchestra. Himanshu Maloo: In today’s context, technology plays a crucial role in demand planning. While use of the right tool to drive end to end process is important, use of AI and ML has been increasing in demand planning process. AI bases tools can help in doing multivariate analysis with inputs from various demand drivers like festival planning, promotion impact, seasonal variations, pricing, and competitive landscape, etc. There are several tools available in the market depending on the level of complexity to manage, scope of work, budget, level of automation etc. Several tools now a days have inbuilt forecasting models with AI/ ML. Yogesh Punde: In many industries, demand planning processes are manual, siloed, and inefficient. Digital supply chain has a crucial role in demand planning. Latest tools as the notion of a digital supply chain, becomes the norm, not the exception. Organizations need technology that provides better information, faster analytics, and automation to keep pace. Technology based on the concurrent technique of planning provides specific capabilities
for effective demand planning plus the ability to connect data, process, and people. Guru Ananthanarayanan: Technology is essential for: s Automating manual tasks enables planners to focus on strategic analysis. s Identifying hidden patterns: Machine learning uncovers information that human analysts are unable to see. s Maintaining stock levels to avoid shortages or overstocking is part of optimizing inventory. s Boosting forecast accuracy: Models driven by AI are continuously evolving and adapting. Rahul Vishwakarma: One key aspect is the use of Enterprise Resource Planning (ERP) systems, which integrate various business processes and data into a unified platform. ERP systems enable real-time visibility into sales, inventory, and production data, allowing for more accurate demand forecasts. Order Management Systems (OMS) are essential for streamlining order processing, tracking, and fulfilment. OMS helps businesses manage customer orders efficiently, reducing lead times and ensuring timely deliveries. Warehouse Management Systems (WMS) play a pivotal role in demand planning by optimizing warehouse operations, improving inventory accuracy, and reducing order fulfilment errors. Additionally, advanced analytics and machine learning technologies are increasingly employed for predictive modelling and forecasting. These technologies analyze historical data, market trends, and external factors to predict future demand more accurately. Collaborative Planning, Forecasting, and Replenishment (CPFR) tools facilitate communication and collaboration between trading partners, ensuring a synchronized approach to demand planning. In our tech stack, we deploy robust ERP systems such as SAP or Oracle, OMS solutions like IBM Sterling Order Management, and WMS platforms such
21
COVER STORY as Manhattan Associates. Advanced analytics tools like Tableau or IBM Cognos enhance data-driven decision-making, while machine learning algorithms are employed for predictive analytics. This integrated tech stack ensures a comprehensive and efficient approach to demand planning, allowing businesses to respond swiftly to changing market dynamics and customer demands. Loknath Rao: Technology for demand forecasting hasn’t changed much. The basic time series and regression models were available even 20 years ago in most software. What has changed now is the data storage capacity and exploration of new data sources to refine your forecast. Calibrate your forecast. These days companies deploy apps to gather inputs from field sales. They do not need to ‘login’ to the ‘core’ application to ‘Enter’ their view of demand. Instead, they can simply typewrite it on the app that will then sync up with the demand planning books. So, a combination of off the shelf software for demand planning + Apps for collaborative planning + Access to relevant Data on Big Data Servers or third-party data providers forms the basis of needed ‘technology’ for forecasting. Additionally, the implementation of Machine Learning based Algorithms like LSTM, Neural Networks, SVM helps BOTH with prediction of time series as well as tools to ‘Group’ your products better for forecasting better. E.g. A, M, W and Z ‘belong together’ in the sense that there is a strong association between sales, though they do not necessarily belong to the same brands or product lines.
Himanshu Maloo, VP – Supply Chain Planning, Diageo Major challenges in Demand Forecasting are aligning the demand forecast with commercial team; people’s capability to do forecasting and develop analytics; incorrect demand history with outliers / external impacts; use of incorrect statistical tool; understanding external and internal demand drivers; incorporating risk and opportunity into process; managing Integration and disintegration of numbers over product hierarchy, etc. while challenges are many, there are also solutions to above issues. Companies can develop people capability with training & recruiting right resources and drive alignment through top management across the value chain. They can ensure data hygiene by creating the right demand history and selecting the right forecasting tool with multiple inbuild models.
Building Resilient Supply Chain through Demand Planning Guru Ananthanarayanan, Country Head – India, Blue Yonder:
To build resilient and agile supply chains in the upcoming years, demand planning will be essential. How to achieve it is as follows: Hyper-personalization: Allocating inventory and production based on demand to meet the unique demands of each consumer. Real-time Optimization: AI minimizes disruptions by reacting quickly to changes in supply and demand. Sustainability Focus: Reducing environmental impact can be achieved by optimizing transportation routes and inventory levels.
Demand Planning for customer centric supply chains Customer-centric supply chains are not just about reacting to demand; they are about proactively anticipating it and shaping it to your customers’ desires. By leveraging the power of demand planning, you can create a supply chain that delights customers, builds brand loyalty, and drives sustainable growth. 22 CELERITY February 2024
Rayapati Srinath Reddy: Demand planning plays a crucial role in creating customer-centric supply chains by putting the customer at the heart of every decision. Here's how:
ANTICIPATING CUSTOMER NEEDS: s Accurate forecasting: Precise demand predictions ensure you have the right products and quantities
COVER STORY available when customers need them. No more stockouts or overstocking, leading to happier customers and fewer lost sales. s Responding to trends: By analysing data and identifying emerging trends, you can adapt your product offerings and production plans to meet changing customer preferences. This proactive approach keeps you ahead of the curve and delivers what customers want before they even ask.
ENHANCING CUSTOMER EXPERIENCE: s Shorter lead times: Accurate demand planning allows for faster production and delivery, reducing lead times and getting products into customers' hands quicker. This translates to increased satisfaction and loyalty. s Improved product availability: By minimizing stockouts, you ensure customers can always find what they need, creating a seamless and frustration-free experience. s Personalized offerings: By understanding individual customer preferences and buying patterns, you can tailor your product offerings and promotions to their specific needs. This personalized touch builds deeper connections and fosters longterm loyalty.
OPTIMIZING SUPPLY CHAIN EFFICIENCY:
between different departments, like sales, marketing, and operations, ensuring everyone is working towards the same customer-centric goals. This seamless alignment leads to greater responsiveness and agility. Here are some additional ways demand planning can be used to create customer-centric supply chains: s Implementing customer feedback loops: Gather customer feedback on product offerings, delivery times, and overall experience to inform future demand planning decisions. s Utilizing customer segmentation: Tailor your demand planning strategies to different customer segments, catering to their unique needs and preferences. s Investing in technology: Utilize advanced data analytics and forecasting tools to gain deeper customer insights and improve demand planning accuracy. By embracing these strategies and leveraging the power of demand planning, companies can transform their supply chains from a cost center into a customer-centric engine of growth and success. Himanshu Maloo: By understanding demand patterns and ability to forecast accurately, demand planning can help in capturing the customer requirement more accurately and hence can help in meeting the demand.
s Reduced costs: Accurate demand planning minimizes unnecessary inventory holding costs and waste, leading to increased profitability. This allows you to offer competitive prices and better value to your customers.
Guru Ananthanarayanan: Precise demand forecasting allows businesses to: s Anticipate the needs of the customer: Make the right goods in the right quantities at the right times.
s Improved resource allocation: By aligning production with actual demand, you can optimize resource allocation and reduce waste. This leads to a more sustainable and environmentally friendly supply chain.
s Minimize stockouts and overstocking: Boost customer satisfaction and minimize inventory costs.
s Enhanced collaboration: Demand planning fosters collaboration
supplychaintribe.com
goods and services to meet the tastes of specific customers. Rahul Vishwakarma: Demand planning plays a pivotal role in creating customer-centric supply chains by aligning production, inventory, and distribution with customer demand. Here are several ways in which demand planning contributes to the development of customer-centric supply chains, such as customer Satisfaction, responsive inventory management; order fulfilment efficiency; reduced lead times; product availability and variety; dynamic supply chain adjustments; personalized customer experiences; optimized product launches; cost optimization; enhanced communication and collaboration; and continuous improvement. Businesses that prioritize accurate demand forecasting and align their operations with customer demand are better positioned to build strong, lasting relationships with their customers. Loknath Rao: Supply Chains ought to be customer centric. It always was but in the olden days when technology and communications were not mature, the firms depended on their distributors for the demand intelligence. Now with creative use of software, systems and data integration, you can build solutions to react to demand signals from both internal and external customers. At least in theory the use of the word Network in Supply Network intended. Because in a Network even your vendor can be your customer and your subcontractor can be your full-time vendor. With more mindful contracts between entities in a supply network, you can build customer centric supply chain solutions and processes. You need to talk to a consultant who is creative with solution ideas as the same software if implemented poorly can end up as a million dollar ‘typewriter’.
s React to trends and promotions: Fulfill spikes in customer demand driven by marketing campaigns. s Personalize offerings: Customize
23
COVER STORY
Demand Planning best practices By implementing these best practices and continuously learning and adapting, companies can create a more accurate, efficient, and customer-centric demand planning system. This will lead to improved profitability, increased customer satisfaction, and a more sustainable supply chain. Rayapati Srinath Reddy: Here are some key demand planning best practices companies can deploy:
EMBRACE DATA-DRIVEN INSIGHTS: s Go beyond gut feeling: Don't rely on intuition alone. Utilize data from sales, marketing, customer reviews, and external sources like weather trends to build accurate forecasts. s Invest in analytics tools: Leverage tools like Tableau or Power BI to visualize data and identify patterns, trends, and correlations. s Real-time monitoring: Implement real-time dashboards to track inventory levels, customer behaviour, and market changes, enabling quick adjustments to forecasts. Example: FMCG conglomerates used machine learning to analyze social media data and predict surges in demand for specific beauty products during seasonal events. This allowed them to optimize production and inventory levels, avoiding stockouts and maximizing sales.
FOSTER COLLABORATION AND COMMUNICATION: s Break down silos: Ensure seamless communication and collaboration between sales, marketing, operations, and finance. Share forecasts, analyse trends together, and make informed decisions as a team. s Integrate with suppliers: Build strong partnerships with suppliers and share demand forecasts to ensure timely deliveries and avoid production disruptions. s Leverage
technology:
24 CELERITY February 2024
Utilize
collaboration platforms like Slack or Microsoft Teams to facilitate communication and knowledge sharing across departments. EXAMPLE: Automobile giant implemented a collaborative demand planning system that allowed all stakeholders across the supply chain to access real-time data and insights. This led to a ~15% reduction in inventory carrying costs and improved responsiveness to market changes.
EMBRACE AGILITY AND SCENARIO PLANNING: s Prepare for the unexpected: Don't rely solely on a single forecast. Develop contingency plans for different scenarios, such as weather disruptions, competitor actions, or economic fluctuations. s Utilize scenario planning tools: Use tools that simulate different scenarios and their impact on demand and supply. This allows you to be prepared for any eventuality and adapt quickly. s Regularly review and update: Don't set your forecasts in stone. Regularly review and update them based on new data and market conditions. EXAMPLE: Sports good giant used scenario planning to anticipate the potential impact of the 2022 Beijing Olympics on demand for athletic apparel. This allowed them to adjust production and distribution plans, resulting in a 20% increase in sales during the event.
INVEST IN SUSTAINABILITY: s Optimize transportation routes:
Use technology to optimize delivery routes and reduce carbon footprint. s Implement sustainable sourcing practices: Source materials from local suppliers and prioritize environmentally friendly packaging. s Reduce waste and overproduction: Improve inventory management and production planning to minimize waste and unnecessary resource consumption. EXAMPLE: Streetwear giant implemented a closed-loop system for its fleece jackets, allowing customers to return worn-out jackets for recycling into new products. This reduced waste and improved brand loyalty among environmentally conscious consumers.
CONTINUOUSLY LEARN AND ADAPT: s Stay up to date with industry trends: Regularly attend conferences, workshops, and webinars to learn about new technologies and best practices in demand planning. s Invest in employee training: Train your employees on new forecasting techniques, data analysis tools, and collaborative communication skills. s Measure and track results: Regularly monitor the performance of your demand planning processes and identify areas for improvement. These are just a few examples, and the specific best practices will vary depending on the company's industry, size, and unique needs. However, by focusing on data-driven insights, collaboration, agility, sustainability, and continuous improvement, companies can build a demand planning system that helps them thrive in today's dynamic business environment. Himanshu Maloo: Some of the best practices in demand planning include: s Deploying Integrated business planning – which is about extending demand forecasting to include Risk & Opportunity, New product introduction planning, P&L impact
COVER STORY and demand-supply simulation. s Multi-horizon forecasting – from immediate demand to long-term demand forecasting s Even Planning - Assessing impact of various events on demand forecasting e.g. impact of New year, festivals, rain, weather change, financial budgets, e-commerce discount days, etc. s Point
of
consumption
demand
capturing – moving from primary sales data to actual consumption data to capture the demand in real time. s AI bases Impact assessment / forecasting based on demand of complementary / adjacent products. s AI bases Demand forecasting based on customer reviews, etc. Guru Ananthanarayanan: Regularly evaluating and updating forecast models;
Trends to Watch Out for…
Rahul Vishwakarma, Co-Founder & CEO, Crest While predicting the future with certainty is challenging, there are several emerging trends in demand planning that are expected to shape the landscape in the next few years. These trends are driven by advancements in technology, changing consumer behaviors, and the need for more agile and responsive supply chains. Here are some potential trends in demand planning that we may witness in the coming years: s Advanced Analytics and Artificial Intelligence (AI) s Predictive Analytics for Supply Chain Resilience s Real-Time Demand Sensing s Collaborative Planning Across Supply Chain Ecosystems
supplychaintribe.com
integrating data from other sources; and holding collaborative planning sessions are some of best practices. For instance, Supervalu, a supermarket store, reduced missed sales by 15% by using Blue Yonder's technology to achieve 98% prediction accuracy. Mahindra, a key player in the auto industry, increased revenue by 10% by utilizing Blue Yonder solutions to optimize inventory levels.
s s s s s s s
End-to-End Visibility Demand-Driven Supply Chains Scenario Planning and What-If Analysis Green and Sustainable Demand Planning Personalized Demand Forecasting IoT (Internet of Things) Integration Digital Twins for Supply Chain Optimization (The concept of digital twins, where a digital replica of the physical supply chain is created, will be increasingly utilized. This enables organizations to simulate and optimize supply chain processes for better performance.) s Human-Machine Collaboration It’s important to note that the adoption of these trends may vary across industries and regions. However, the overall direction suggests a continued emphasis on leveraging technology, data, and collaboration to create more agile, responsive, and customer-centric demand planning processes.
25
COVER STORY
Skillsets for Demand Planners The specific skillset required for a demand planner can vary depending on the company size, industry, and job complexity. However, the core skills mentioned below are essential for any successful demand planner.
Rayapati Srinath Reddy: Demand planners need a diverse skillset to navigate the complex world of forecasting and supply chain optimization. Here are some key areas:
TECHNICAL SKILLS:
COLLABORATION SKILLS: s Effective communication: Clearly communicating forecasts, insights, and recommendations to stakeholders across different departments.
s Data analysis: Familiarity with statistical tools, data visualization software, and the ability to interpret complex data sets is crucial.
s Collaboration: Working effectively with sales, marketing, operations, and other teams to ensure alignment and achieve common goals.
s Forecasting techniques: Understanding different forecasting models (ARIMA, exponential smoothing, etc.) and choosing the right one for specific situations is essential.
s Negotiation: Negotiating with suppliers and vendors to secure favorable terms and ensure timely deliveries.
s Inventory management: Knowledge of inventory control methods, safety stock calculations, and optimization techniques is important for efficient stock levels. s Software proficiency: Expertise in demand planning software, ERP systems, and other relevant tools is vital for day-to-day operations.
ANALYTICAL SKILLS: s Problem-solving: Identifying demand patterns, anomalies, and potential disruptions, and then developing solutions to mitigate them. s Critical thinking: Evaluating data objectively, questioning assumptions, and making informed decisions based on evidence. s Attention to detail: Accuracy and precision are paramount in demand planning, as even small errors can have significant consequences.
COMMUNICATION AND 26 CELERITY February 2024
ADDITIONAL SKILLS: s Business acumen: Understanding the overall business strategy and how demand planning fits into the bigger picture. s Industry knowledge: Familiarity with the specific trends and challenges of your industry is highly beneficial. s Adaptability and flexibility: The ability to adjust to changing market conditions and new technologies is crucial in a dynamic world. Here are some additional tips for developing your demand planning skillset: s Take online courses or workshops: Many online resources offer training in demand planning and related skills. s Get involved in professional organizations: Joining professional organizations can provide networking opportunities and access to valuable resources. s Read industry publications and blogs: Staying up-to-date on the latest trends and technologies in demand planning is essential.
s Volunteer or intern: Gaining practical experience through volunteer work or internships is a great way to develop your skills. By continuously honing your skills and staying ahead of the curve, you can become an asset in any organization and play a key role in optimizing your company's supply chain. Himanshu Maloo: Three important skillsets each demand planner must have are Strong data analytics and technology adoption; Ability for demand sensing by identifying and understanding demand drivers; and Commercial acumen to understand business impact and align commercial stakeholders. Hanuman Swami: A demand planner must be well versed with business and supply chain. Mare coding and ML expertise may not work for all the business. A demand planner must visit all the departments to see how those functions, this would help to be better in demand planning. Yogesh Punde: Demand Planning for the future requires planners to communicate with the stakeholder groups to enrich the forecast (the most important stakeholder being the end consumer). They must be ready to respond to any eventuality. Demand uncertainty will require more flexibility and speed from the planners. They should have base case, best case, worst case, etc., scenarios ready to be put into action. Companies must allow segmentation strategy to help prioritize time and effort spent on different activities. While planners have been traditionally well versed with MS Excel, being future ready will require adopting new technology platforms. Guru Ananthanarayanan: According to me, these skillsets hold immense importance for demand planners… s Analytical Skills: Data interpretation, trend identification, and statistical model expansion s Collaboration and communication: Working with cross-functional teams and sharing insights in an effective manner.
COVER STORY s Critical thinking and problemsolving skills: Adapting to unforeseen obstacles and coming up with innovative solutions. s Technological Acumen: Knowing how to use AI tools and demand planning software. Rahul Vishwakarma: Demand planners who possess a well-rounded combination of these skills are better equipped to navigate the complexities of demand forecasting, contribute to effective supply chain management, and add value to their organizations. Continuous learning and staying abreast of advancements in technology and industry trends are also important for staying competitive in this field. Some of the critical skillsets include:
TECHNICAL PROFICIENCY: s Forecasting Software: Familiarity with demand forecasting tools and software applications, such as statistical modelling software, Enterprise Resource Planning (ERP) systems, and advanced analytics platforms. s Excel and Spreadsheets: Proficiency in spreadsheet software, particularly Microsoft Excel, for data manipulation, analysis, and visualization. s Industry Knowledge: Understanding of the Industry: Knowledge of the specific industry in which the organization operates, including market dynamics, seasonality, and factors influencing demand. s Understanding Customer Behavior: Ability to understand and anticipate customer behavior, preferences, and buying patterns to create more accurate demand forecasts. s Adaptability to New Technologies: Willingness to learn and adapt to new technologies, including advanced analytics, machine learning, and demand planning software.
supplychaintribe.com
s Business Acumen: Understanding of Business Operations: Insight into broader business operations, including knowledge of supply chain processes, inventory management, and production planning. s Communication Skills: Effective Communication & Collaboration Analytical Skills, such as Statistical Analysis & Data Interpretation Problem-Solving Abilities, such as Critical Thinking; Adaptability; Precision and attention to detail are crucial for creating reliable demand forecasts and avoiding errors in data analysis; Time Management s Global Understanding: For organizations with a global presence, an understanding of different cultures and markets to account for regional variations in demand.
Loknath Rao: They must possess the ability to understand data and metrics. They should be able to view the data from different dimensions. Knowledge of basic ideas of descriptive and inferential statistics is important. The understanding that standard deviation can play in many ways – both good and bad. Apart from that, the planners must understand the markets and the larger Industry and competition in which the firm is operating. The ecosystem. E.g. if you are a demand planner for an alcohol manufacturing company, understand that your bottles and labels suppliers have only a fixed capacity and you cannot change your order quantity at a fag end. You need creative workarounds here, which involve buying additional capacity way in advance after comprehending the demand pattern.
Demand Planning Best Practices
Loknath Rao, Managing Partner, The Management Technician s If and where possible use market demand as a proxy for historical sales s Use litmus tests to understand data and its distribution. e, g, ratio between MAD and RMSE and Ratio between MAPE and Exponential smoothing constant s Commit Forecast to Supply all at once. Do not have one division forecast 5 days later. Else you will get the dependent demand wrong. There will be too many scheduling problems later on distribution, transportation and production plans. s Do not ‘Adjust’ your forecast to ‘match’ lot sizes of production. Let the planning algorithms do it Your you round up forecast to nearest 100 pcs, you supply plan will NOT adjust ‘accordingly. There are other parameters at work here. Like Safety stock, min stock, reorder point s Do not invent an ‘ultimate’ model to forecast. There is no such thing. Machine Learning models can probably be less accurate than say holt winters model for time series forecasting. s Know how much history to believe in. 10 years of history would have gone through probably 4 heteroscedastic cycles (sudden change in patterns) s Understand that population and markets are different things. Understand market segments and customer groups to predict better. s Leverage forward looking models like Regression model where possible. s Leverage Industry reports and market research data. s Calibrate your forecast against market shares and competition.
27
COVER STORY
Setting yourself up to remain flexible and agile Flexibility and agility are not one-time efforts. It’s a continuous process that requires commitment, investment, and a culture of adaptability. By implementing these strategies, companies are better equipped to navigate the ever-changing market landscape and optimize your demand planning for success. Rayapati Srinath Reddy: Remaining flexible and agile in demand planning requires a proactive approach that embraces both strategic and tactical measures. Here are some key strategies to consider:
DATA & ANALYTICS: s Invest in robust data infrastructure: Ensure you have access to real-time and accurate data from various sources, including sales, inventory, marketing, and external market trends. s Utilize diverse forecasting models: Don't rely solely on traditional methods like statistical forecasting. Explore advanced techniques like machine learning and scenario planning to incorporate external factors and handle uncertainty.
cycles with shorter forecasting horizons and frequent updates to adapt to market dynamics.
TECHNOLOGY & TOOLS: s Invest in demand planning software: Utilize specialized software to automate forecasting tasks, visualize data, and facilitate collaboration. s Leverage cloud-based solutions: Cloud-based platforms offer scalability and flexibility to adjust your forecasting needs as your business evolves. s Explore real-time visibility tools: Implement real-time visibility solutions to track inventory levels, order fulfilment, and potential disruptions across your supply chain.
ADDITIONAL TIPS:
s Track key metrics: Monitor key performance indicators (KPIs) like forecast accuracy, inventory levels, and lead times to identify areas for improvement and adjust your plans accordingly.
s Develop strong supplier relationships: Build partnerships with reliable suppliers who can adjust production schedules and delivery times to accommodate changing demand.
PEOPLE & PROCESSES:
s Focus on scenario planning: Regularly simulate different demand scenarios to test your planning process and identify potential vulnerabilities.
s Build a collaborative culture: Foster open communication and cross-functional collaboration between sales, marketing, operations, and finance teams. s Empower decision-making: Delegate decision-making authority to teams closest to the data and empower them to react quickly to changes. s Implement agile methodologies: Consider adopting agile planning
28 CELERITY February 2024
s Embrace continuous improvement: Continuously learn from your experiences and adapt your demand planning processes based on new data and insights. Yogesh Punde: To remain flexible and agile, organizations will need to move from siloed functional planning to
having end-to-end supply chain visibility. Concurrent planning bridges functional silos and connects all nodes in the supply chain. It provides the ability to plan, monitor and respond to supply chain changes in a harmonious environment simultaneously and continuously. This enables cross-functional collaboration and faster, more effective decisionmaking, resulting in improved analytics accuracy, reduced planning cycles, higher profitability, and quicker response times. Guru Ananthanarayanan: To remain flexible & agile, demand planners must possess the following strategies: s Make continued training investments: Equip planners with the latest technologies and skills for demand planning. s Build a culture that is driven by data: Encourage data analysis and sharing across departments. s Try out different technology and forecasting strategies to see what works best. s Build a culture of continuous improvement by assessing and improving the demand planning procedure on a regular basis. Loknath Rao: Leverage Technology and free tools to implement creative ideas for improving the quality of the forecast. You can be creative even on Excel. Do not freeze demand forecasts. Store the versions to compare later. Be more decentralized as a planning organization. Do not let Demand Planners alone decide the fate of customer service levels.
COVER STORY
Shaping the future of supply chain in the years to come Demand planning isn’t a rigid set of spells; it’s a dynamic art form, perpetually evolving with technology and consumer preferences. Experiment, collaborate, and unleash your inner sorcerer. By wielding data as your wand and foresight as your shield, you can redefine the future of your supply chain, transforming it from a cumbersome entity into a streamlined, agile, and sustainable marvel.
Rayapati Srinath Reddy: Say farewell to antiquated spreadsheets and crystal ball gazing; demand planning is undergoing a metamorphosis, evolving into the apprentice of supply chain sorcery, using data and foresight to reshape the logistics landscape. Here's how it unfolds: Transitioning from Murky Forecasts to Profound Precision: Bid farewell to peering through misty forecasting models. Artificial intelligence (AI) and machine learning now take on the role of oracles, intricately combining data, consumer insights, and even meteorological data to predict demand with remarkable precision. Envision inventories materializing precisely when needed, shelves brimming with soughtafter products before customers click "purchase," and promotions perfectly timed to spark viral trends. This newfound clairvoyance morphs your supply chain from a sluggish entity into an agile cheetah, foreseeing and seizing opportunities. Shifting from Segregated Strategies to Agile Alchemy: The era of silos is behind us. Demand planning has transformed into a collaborative crucible where sales, marketing, and operations collaborate, extracting potent insights from data cauldrons. Real-time dashboards act as crystalclear mirrors reflecting inventory levels, customer sentiment, and competitors' manoeuvres. Picture it as a Jedi Council of supply chains, strategizing in harmony, predicting disruptions before they occur, and adapting like water flowing around
supplychaintribe.com
obstacles. This united front ensures agility that paralyzes competitors, leaving them unable to respond to the ever-changing market dynamics. Moving from Global Giants to Hyperlocal Heroes: The era of onesize-fits-all globalization is encountering a rebellion of hobbit proportions. Hyperlocal production is on the upswing, with agile micro-factories sprouting up near consumers. Picture fresh dosa batter being churned in Chennai for breakfast and khadi scarves woven in Jaipur for evening strolls. This localized enchantment reduces lead times, strengthens communities, and caters to diverse regional preferences. Envision a network of these micro-factories, each a unique strand in the intricate tapestry of your supply chain, buzzing with local flair and efficiency. Transitioning from Cost-Cutting Wizards to Sustainability Magicians: Consumers are demanding eco-friendly products, and businesses are heeding the call. Demand planning is now infused with sustainability magic, optimizing routes, minimizing waste, and sourcing locally. Imagine solar-powered warehouses, electric delivery fleets, and packaging that vanishes like smoke and mirrors. This green alchemy not only diminishes your carbon footprint but also casts a potent spell on environmentally conscious customers, enhancing brand loyalty and sales. Himanshu Maloo: The most important and critical factor to drive supply chain
agility and reliability is to have the right demand planning process in place. With reducing lead times to fulfill customer orders, demand planning process should be flexible enough to capture very short-term demand factors which can have immediate implication of customer demand. With the evolution of technology, demand forecasting is moving towards the consumption point. This will help supply chains to be more responsive, reducing the bullwhip effect. Yogesh Punde: Accurate demand planning (Forecast) results in s Reduced costs due to manufacturing, transportation, temporary storage, product scrap/ obsolescence, manpower. s Reduced inventory levels mean reduced carrying costs. s Improved customer service levels the right product at the right place at the right time (and in the right quantity). Demand planning assisted by AI, automated machine learning, analytics and heuristics will help detect shifting data patterns, predict changes in demand and automatically update and optimize forecasts. Day by day, supply chains are becoming complex, and handles huge data therefore with automated data transformation, ML model selection and manage by exception workflows, planners will be able to save time and focus only on exceptions. ML generated results have explainable algorithms to know which data features affect demand predictions and will help in better understanding of business. Rahul Vishwakarma: Demand planning is poised to be a driving force in reshaping supply chains for the future. The emphasis on the following will guide the evolution of supply chain strategies, making them more resilient, efficient, and adaptable to the dynamic nature of global markets. These aspect include agile and responsive supply chains; real-time decision-making; end-to-end visibility; collaborative supply chain ecosystems; customer-centric supply chains; predictive and prescriptive analytics; sustainability integration; demand-driven supply chains; AIenhanced decision support; digital twins
29
COVER STORY for supply chain optimization; adaptive supply chain networks; and establishing a continuous improvement culture. Loknath Rao: By virtue of data availability, data storage costs, machine learning models availability, forecasting can be a real time activity. Systems can auto correct the forecast so that the supply Infra can respond faster. Advanced demand sensing models (e.g. ARIMA and Kalman Filters) are now able to predict extremely short-term demand (e.g. next 48 hours).
Hanuman Swami, Global Planning & Fulfillment Manager, ABB: Demand planning should cover entire supply chain to have a perfect prediction about the future. Data cleanup before using forecast modeling is very much needed. Past periods’ data is usually used as the basis for forecasting future data or trends. So, basically what was sold in the past may be a good indication of what we can sell in the future. But not all data is equally useful for creating demand forecast. It is essential to choose the right period and to find the relevant history depth. If you take historical data from that is too old and from periods which do not correlate with contemporary demands, you will have an inaccurate forecast. The same bad situation occurs if you are not using enough data to create a demand forecast, so the right amount of historical data is crucial.
Demand Planning trends to watch out for… Rayapati Srinath Reddy: The world of demand planning is constantly evolving, and the next few years are sure to bring even more exciting and innovative trends. Here are a few we can expect to see: Hyper-personalization: Demand planning will move beyond simple segmentation to hyper-personalization, tailoring forecasts and inventory to individual customer needs and preferences. This will involve leveraging AI and machine learning to analyze vast amounts of data on customer behavior, purchase history, and even social media activity. Imagine a world where a clothing store can predict your next clothing purchase based on your online browsing habits and automatically stock the item in your local store!! Real-time forecasting: Traditional forecasting methods based on historical data will be augmented by real-time data feeds from various sources. This includes things like weather patterns, social media trends, and even traffic data. By analyzing these real-time signals, businesses can make more accurate and agile demand predictions, adjusting inventory levels and production schedules on the fly.
30 CELERITY February 2024
The rise of the "demand chain": The traditional linear supply chain will be replaced by a more dynamic and interconnected "demand chain." This chain will blur the lines between planning, sourcing, production, and fulfilment, with all stages working together in real-time to respond to changing demand patterns. Think of it as a flexible ecosystem that can adapt to any situation, ensuring the right product is in the right place at the right time. The integration of sustainability: Demand planning will become increasingly integrated with sustainability goals. Businesses will use forecasting tools to optimize resource usage, reduce waste, and minimize the environmental impact of their operations. This could involve things like predicting the demand for eco-friendly products, optimizing packaging materials, and even forecasting the availability of renewable resources. The rise of the "citizen planner": With the increasing availability of userfriendly data visualization tools and AIpowered forecasting algorithms, even non-experts will be able to participate in demand planning. This democratization of data will lead to a more collaborative and informed planning process,
drawing insights from all levels of the organization. These are just a few of the exciting trends that are shaping the future of demand planning. As technology continues to evolve and businesses become more data-driven, we can expect even more innovative ways to predict and meet customer needs. Hanuman Swami: I believe these are some of the upcoming trends in demand planning… Sustainability & Ethical Sourcing: The main concerns would be ethical sourcing and focus on sustainability since it is going to be the next focus area primarily for all businesses. Supply chains are being compelled to adjust their strategies to accommodate this shift, ensuring that their offerings align with evolving ethical preferences and sustainable principles to conserve the planet's resources and ensure depletion at minimum. Since then, only we can stop the extinction of the planetary resources which are essential for keeping the balance of the planet's temperatures for sustainable life. Software integration with Intelligence: Currently we manage
COVER STORY
inventory on spreadsheets, advanced algorithms will quickly analyze historical data, market trends, and customer behavior's to improve demand forecasting accuracy. Demand Sensing: We use real-time data to sense future demand patterns. Demand sensing improves agility and responsiveness, reduces stock outs, optimizes inventory, and ultimately enhances customer satisfaction by aligning their operations with actual market demand. Following Market trends: Following market trends enable businesses to align their production, inventory, and supply chain strategies with evolving customer preferences. This approach optimizes resource allocation, reduces excess inventory, and minimizes stockouts. By analyzing trends, businesses can anticipate shifts in demand, adjust their forecasts, and introduce new products more effectively. This approach enhances overall operational efficiency and customer satisfaction. Relying solely on following and reacting to historical trends is slow and places you at a disadvantage compared to your competitors. The key is to not only follow trends but to also anticipate changes in demand and adjust before your competition.
supplychaintribe.com
Loknath Rao: For me, these are going to be some of the most defining trends in demand planning… s Dynamic grouping, classification, and clustering algorithms to identify the right levels of aggregation to forecast. s Use of models.
Short-term
forecasting
s Rea Time Forecasting. Always on forecasting s Use of market intelligence to adjust forecasts and hence supply plans (e.g. why make it when I can’t make money by selling it) s Development of new forecasting models specific to a particular industry / class of products by using data lakes that store data relevant to that Industry. s Data Federation technologies that give you data on demand. Perhaps this will be a completely different set of people outside of the organization.
Smarter demand planning that uses more and better data will soon be a mandatory part of an integrated business planning process. It will include tracking data signals indicative of trends on both supply and demand sides, simulating impacts on the supply chain, adjusting demand plans, and executing on them. The goal is to ensure that supply chains not only survive extreme disruption but are better aligned with emerging signals of demand from day to day. Source: SAP
31
INTERVIEW
WOMEN SCM LEADERS CONNECT AND LEAD PEOPLE WITH COMPASSION AND EMPATHY “More than any other discipline, supply chain is a collaborative sport which represent huge, complex, and dynamic ecosystems where collaborative thinking is critical. One can’t succeed alone. Key skills Operations domain demand is Collaboration, Creativity, Problem Solving and Multi-Tasking. Women intuitively think about the ecosystem working towards a win-win situation. Women have a strong determination, and they bring different perspectives to the table. Their ability to connect and lead people with compassion and empathy makes them stand out,” emphasizes Arpita Srivastava, Supply Chain Planning & Logistics Leader, Schreiber Foods (India), and winner of the Celerity Under-40 Supply Chain Super Achiever Award, during this exclusive interview…
Can you walk us through your journey as a woman supply chain leader across various industries? How was your experience in supply chain? Certainly. My journey as a Supply Chain Learner, I would say, has been dynamic and enriching. Post graduation as a Mechanical Engineer, I started my career in the Metal industry, where I learnt the basics of manufacturing and supply chain. That is where I believe my foundation of strong processes were laid. The transition to Pharma sector allowed me to navigate through stringent regulatory requirements while managing global supply chain. I have driven key digitalization projects that enabled me to understand what role technology plays in
32 CELERITY February 2024
An alumnus of NIT Allahabad and IIM Mumbai (formerly NITIE), Arpita Srivastava is an individual with an entrepreneurial mindset. She has worked with B2B & B2C global partners in supply chain and operations domain. In a professional journey spanning over a decade, she has been instrumental in leading process improvement and digital transformation projects. While working in the supply chain domain, her focus has always been on providing and enhancing visibility across the chain. “If it’s not visible, you can’t measure. If you can’t measure, you can’t improve.”
INTERVIEW
I strongly believe that “Planning is half Execution”. In the dynamic world of supply chain management, meticulous planning is crucial. While success hinges equally on effective execution, planning gives a direction for action. In the chain of events to meet customer demand, planning enables the very first step. strengthening supply chain. This further led me to explore opportunities in consulting domain where I worked on Supply chain solutioning with global partners across multiple sectors. This diverse experience equipped me with a holistic understanding of supply chain operations and technology. In my current role in the F&B industry, I lead and oversee the Planning and Logistics function. In my stint as a solopreneur, I ran a small-scale handicrafts enterprise. Managing endto-end operations, working directly with vendors and customers helped me build business sense and understand market demand. Now when I look back, it’s interesting to see how I started my career with products having service life of around 100 years and slowly transitioned to products with shelf life as low as 15 days : A journey from Hot Rolling Mill to Cold Chain. This exposed me to various complex supply chains, get better and quicker at decision making (Supply chain is full of trade off decisions!) and helped shape the professional that I am today. The journey has been great so far and I am thankful to my leaders (majorly male) that I was always treated as a professional and not a “Woman” Professional.
Please share with us one of the most cherished lessons you have learned in supply chain. I would say it’s still an ongoing journey of learning as this domain has so much to offer, considering the pace at which it has been evolving. I can share two key takeaways from my journey so far. Firstly, I strongly believe that “Planning is half Execution”. In the dynamic world of supply chain management, meticulous planning is crucial. While success hinges equally on effective execution, planning gives a direction for action. In the chain of events to meet customer demand, planning enables the very first step. And second, and quite crucial, over
supplychaintribe.com
the years, I learnt that “People are the most important pillar of the supply chain”. While technology and processes are integral, the human element remains the most critical one for translating plans into actionable results. Whether it's managing relationships with customers or suppliers, coordinating within organizations, or responding to unexpected situations, the competence of individuals within the supply chain is paramount. In the last few years, I have witnessed several instances where systems may have crashed, but it was “people” that shouldered the supply chain and ensured delivery despite disruptions. Hence, investing in this pillar of supply chain, and recognizing the value each team member brings becomes imperative.
You have worked in various functions within supply chain. Which one do you see as most critical and why? Yea, I have been in multiple verticals within supply chain, worked closely with customers as well as with manufacturing, and I understand the significance of various functions and how well interlinked they are. It’s a chain, so a weak link at any stage will impact overall performance. What can be assumed as critical for any supply chain depends on multiple factors like industry, business model, type of product or services being offered, supplier network, distribution channel, etc. From my experience, I consider strategic planning and demand forecasting to be the most critical and it goes back to my key takeaway “Planning is half execution.” Strategic planning sets the foundation for an efficient supply chain by aligning business objectives with supply chain capabilities and helps in optimizing the allocation of resources within the supply chain. Demand forecasting, closely intertwined with strategic planning, enables proactive decision-making, optimizing inventory levels and resource
planning at all levels. It directly impacts service level, customer satisfaction, and enhances efficiency.
What has been your biggest achievement so far? Over the course of my career, I've had the privilege of navigating diverse challenges and contributing to the success of various organizations. What I achieved as a fresher is at par with what I deliver as someone post a decade of experience, so choosing one event won’t be fair I believe. Building on skills to drive impactful results consistently, even when working with people across the length and breadth of organization coming with highly diverse background, is what I consider as one of my significant achievements. At different junctures, I've been fortunate to lead initiatives that contributed significantly to the efficiency and profitability and had a broader impact on the competitiveness of the organizations. What makes these achievements particularly meaningful is continuous learning, adaptability, and risk-taking ability that I've embraced throughout my career. Each success has been a stepping-stone, allowing me to refine my approach and bring fresh perspectives to subsequent challenges. Furthermore, in the year 2022, the Under 40 Supply chain Achiever Award by Celerity Supply Chain Tribe was a testimony to all my achievements till then.
What challenges do women face as leaders? Do they need to alter their management style depending on the gender of the team member? Women leaders do encounter biases and stereotypes that assume certain leadership traits are more naturally associated with men. A very basic difference I have seen is that men speaking firmly is often associated as assertiveness, for women, its aggression. And this leads to misconceptions about women’s potential, style, or decision-
33
INTERVIEW making abilities and adds to the constant pressure of proving oneself. Building professional relationships across genders can be challenging. A women leader calling team for a short break during office hours will not be viewed the same as when a male leader does. The scarcity of women in leadership positions within the supply chain industry can lead to isolation, making it challenging for female leaders to find relatable role models and mentors. As a leader one needs to understand and adapt to the unique strengths, preferences, and needs of each team member, regardless of gender. It's about creating a culture where everyone feels included, valued, and empowered to contribute their best to the team. So yes, one should adapt their working or management methods based on the team and the target audience.
An interesting report published by the Production and Operations Management Society (POMS) stated that women can help to maximize mutual benefits because they are more likely to collaborate. What do you have to say on this? Totally agree. The notion that women can help maximize mutual benefits through collaboration aligns with the positive attributes often associated with their leadership styles. Women have a strong determination, and they bring different perspectives to the table. Their ability to connect and lead people with compassion and empathy makes them stand out. Key skills Operations domain demand is collaboration, creativity, problem solving and multi-tasking. Many women happen to naturally possess these skills which improves employee engagement and enable smooth operations. Women are often perceived as more inclusive in decision-making processes, seeking diverse perspectives and valuing contributions from team members. They
34 CELERITY February 2024
happen to actively invest in team building and provide support to team members. This supportive style contributes to a positive work culture. More than any other discipline, supply chain is a collaborative sport which represent huge, complex, and dynamic ecosystems where collaborative thinking is critical. One can’t succeed alone. Women intuitively think about the ecosystem working towards a winwin situation.
What do you think could be the probable reason behind women not choosing supply chain as their preferred career stream? Do you see the role of women evolving in the supply chain field in India? Firstly, Supply chain has been operating in fragmented manner. Still there are companies who don’t see the entire function under same umbrella. For a college graduate navigating through different profiles, this may not appear as a profile. I was in Supply Chain even before I knew I was there. The function is being portrayed as one internally and externally now, that enables women to consider it as a career option. Also, earlier Supply Chain was viewed as a heavy industrial and physically exerting industry, creating an outlook that women cannot enter this field. The working conditions, such as the lack of separate washrooms and safety concerns, especially in warehouses in desolate areas act as a disadvantage to women. Supply chain runs round the
clock and demands immediate addressal to emergencies. Thus, flexibility in working hours becomes another challenge and this could be one of the many reasons why many are quitting/ changing domains at mid-level. Constant judgement, gender stereotyping and discrimination basis that can lead to a lack of confidence and /or unnecessary pressure. However, consolidated efforts by various organizations and technological advancements have led to improvements. Yes, I am witnessing a positive shift in the representation of women in industry overall as well as in supply chain roles as women are increasingly playing a larger role in business today. I am here because there is a shift. The ‘de-genderization’ of job roles has influenced the rise of women professionals to a greater extent. Organizations are investing not only in recruiting women but also solving for basic day to day job challenges to retain them. I am glad to be part of this change.
We hear so many inspiring stories of women in Supply chain field. What do you see has worked and what could have been different? If you can talk about some of the challenges, you encountered and how you overcame? I don’t recall any special treatment or getting away with mistakes just because I am a woman. Though I didn’t face any major gender-based challenges that most of my contemporaries did, I need to mention
INTERVIEW that lack of proper infrastructure and fair women’s representation has been an issue. I was also denied certain roles (when looking outside) because of my gender, or assigned certain activities at workplace as those were considered “womanly” tasks. Even my career aspirations were laid out by someone basis what they presume suits a woman. At times, in some corners, questions were raised on my capability, but I am good at my job and my work speaks for itself. There were other workplace issues, but I never viewed it from a gender lens, as in a male in my position was equally likely to face those. And in all those situations, being vocal about it has helped me, thanks to my managers. However, I know women who didn’t have a very pleasant experience in a male dominated industry /domain, and they had to call it quits. To sum it up, what worked is having the support of my family and having great leaders since day One of my career. Acceptance of women in position of authority at all levels is what needs to be worked upon.
Diversity and inclusion have become one of the key corporate strategy pillars. How is it shaping up in the supply chain and logistics domain? The relentless focus on diversity and inclusion in the last few decades, especially gender diversity, is bearing fruit. By promoting and supporting women’s inclusivity, companies are helping to break down gender stereotypes. Women are being identified as potential talent. Companies in the supply chain and logistics sector are focusing on diversified recruitment strategies to attract talent from diverse pool. Efforts are being made to address the gender gap in the industry by actively recruiting and promoting women in various roles across levels. In 2020 McKinsey report, it is stated that companies with greater gender diversity have higher likelihoods of positive financial performance. Organizations are keen to leverage the same. I see more women in Supply chain roles now compared to when I joined the industry. However, Gartner report (Women in Supply Chain Survey Data) points out that while growth 'has'
supplychaintribe.com
Over the years, I learnt that “People are the most important pillar of the supply chain”. While technology and processes are integral, the human element remains the most critical one for translating plans into actionable results. Whether it’s managing relationships with customers or suppliers, coordinating within organizations, or responding to unexpected situations, the competence of individuals within the supply chain is paramount. In the last few years, I have witnessed several instances where systems may have crashed, but it was “people” that shouldered the supply chain and ensured delivery despite disruptions. Hence, investing in this pillar of supply chain, and recognizing the value each team member brings becomes imperative. happened, it’s not the same at all levels. Overall proportion of women making it to the leadership roles is still very low. I couldn’t agree more, we have come a long way, still miles to go in terms of fair representation at all levels.
Moving towards a more inclusive supply chain ecosystem, how can women break the biases, address challenges, and build support systems for each other in this evolutionary journey? Depending on our backgrounds, the environment we are raised in, we tend to build perceptions. The only way to challenge is to go out and meet as many people from diverse background as possible. Thanks to social media, there are virtually no boundaries across the globe. Ask, reach out, explore the world outside. Find the right balance of rigidity and flexibility. Rigid enough to take a stand for what one believes in, flexible enough to challenge one’s own notions. Women need to stop being conscious of choices they make. They need to demonstrate competence in their role, unabashedly showcase their skills and success stories to inspire others and debunk preconceived notions. Trust me, at times, we are too self-critical to talk about our own achievements.
Such positive narratives help challenge stereotypes and showcase diverse role models. Women need to address and challenge microaggressions/unconscious bias when they occur. This involves calmly but assertively responding to comments or actions that reinforce stereotypes. You shouldn’t wait for the “right time and place” to call out. Women can form micro communities to support each other at local levels. Options like mentors, coaches, sponsors, champions, advocates, ledge buddies, and network connections can be explored. All involve developing relationships that help further a woman’s career through some combination of knowledge, expertise, advocacy, reputation, emotional support, personal growth, therapy, or access to key resources in the organization.
What steps can organizations take to empower women in supply chain? First and foremost, basic facilities like proper infrastructure, well-maintained washrooms, clean eating places are must haves. Creche and commute facility to work locations, if not well connected, would attract more women to supply chain roles. Next and equally important, in my opinion, is that organizations need to have a similar focus on educating men as on empowering women.
35
INTERVIEW
Women need to stop being conscious of choices they make. They need to demonstrate competence in their role, unabashedly showcase their skills and success stories to inspire others and debunk preconceived notions. Trust me, at times, we are too self-critical to talk about our own achievements. Such positive narratives help challenge stereotypes and showcase diverse role models. Women need to address and challenge microaggressions/unconscious bias when they occur. This involves calmly but assertively responding to comments or actions that reinforce stereotypes. You shouldn’t wait for the “right time and place” to call out. I heard someone that we as society are so busy empowering women that we totally miss to prepare men who work with the “empowered” women. And I find it very apt as I have seen men mocking diversity focused initiatives. Organizations need to encourage the active involvement of male allies in promoting gender diversity and inclusion, engage them in open conversations, share experiences, and advocate transparency in decisionmaking processes to eliminate biases. Organizations should build an inclusive culture and a safe and motivating workspace at all levels. You cannot just have some top-level policies, which are far from grassroot level. The message needs to be reiterated in as many ways as possible, through formal and informal channels. Another important step that needs to be taken is promote gender neutral language. We are so conditioned to use certain terms that we probably don’t mind unless called out. Another observation I had was that when it comes to annual appraisal/ promotions, it’s easy to exclude women on maternity break from the process. Once back, they are handed over whatever role is open that time. In such scenarios, organizations need to be mindful and build policies that aligns with the biological needs.
Do you have any woman role model that you look up to in your stream or otherwise?
36 CELERITY February 2024
While I don't have a single role model, I draw inspiration from various individuals whose journey and achievements resonate with me, irrespective of their gender. By observing and assimilating the positive qualities of different individuals, I aim to create my own style that would reflect a combination of technical aptitude, strategic acumen, collaboration, creativity and empathy at work. This approach allows me to adapt and incorporate the best practices from a variety of sources, contributing to my professional growth and development. And not just positives, I also observe what traits are not acceptable in general. This helps me prepare my list of Don’ts.
Where do you foresee Indian supply chain domain transforming from here on? What opportunities do you see in this space for women professionals? The supply chain landscape in India is undergoing a significant transformation driven by technological advancements, changing market dynamics, and increased focus on sustainability. With focus on Make in India, local network is strengthening. The demand for logistics services in India is expected to grow at 9.5% CAGR, driven by the exponential growth of the Indian economy. The booming buying capacity, Ecom penetration, multi-channel distribution, product customizations, increase in FMCC and electronic products demand will all contribute to high
demand of diverse talent in Supply Chain. All this will open new job opportunities at all levels across the country. We also see skilled talent pool available as supply chain focused degree/ diploma level courses are being offered by various institutes. This opens avenues for women professionals to contribute their skills across different verticals of supply chain. As the industry is becoming more results-oriented, gender diversity helps drive success.
Women leaders like you in this field are transforming the landscape and motivating other women to take up roles in supply chain. What message would you like to give to young women looking to build a career in supply chain? The same message I would pass on to my younger self. As women, we are not in the habit of asking. Ask for what you want, others might want to stereotype you in a certain role/ domain- it’s you who needs to change that perception. If you don’t speak for yourself, someone will. Communicating is the key here as it helps avoid assumptions on your behalf. Then, I would suggest investing in one’s learning. Don’t hesitate to roll up your sleeves and explore varied nonconventional roles. If you are good at what you do, after a point, nothing else matters. Develop technical skills as it is important to understand the complexity of the supply chain, transportation, and technology. With all the advancements going around, it is important to take courses and upskill oneself. I would encourage women professionals to seek guidance from experienced mentors and, in turn, consider becoming mentors themselves. Mentorship fosters a supportive environment and facilitates knowledge transfer and eventually build a community that everyone can leverage for their learning/growth/job opportunities. Lastly, I would quote Marshall Goldsmith “What Got You Here Won't Get You There”. The way I interpret it is that one needs to continuously upskill to move to next level. There will always be enough reasons to pull you down, but perseverance will help to navigate ahead. In the end, it’s you, your talent, and your potential.
RECAP
Trending GL BALLY Dialogues @ Davos 2024 The 54th Annual Meeting of the World Economic Forum in Davos, under the theme "Rebuilding Trust", yet again proved to be a poised platform to focus on the fundamental principles driving trust, including transparency, consistency, and accountability. The event emphasized the need for global cooperation and shared solutions in a world undergoing critical challenges like climate change, geopolitical issues, and more. A recap on India’s stance at the global platform…
D
EMONSTRATING proactive resilience amidst geopolitical tensions, increasing automation, and changing labour costs, was a key takeaway during a discussion on the ‘Supply Chains of the Future’, at the World Economic Forum Annual Meeting 2024, in Davos. In a world that is permanently changed following the global pandemic, along with growing instability due to international
journey and sustainability practices, and building a strong ecosystem of partners. “It first starts with your customer; how are you building that supply chain and its capabilities to be able to meet those needs in the next few years? We look at the supply chain design not only through the lens of operational efficiency, but also the risks we are facing as a supply chain.” Developing on the conversation of leveraging technology and skills, along
conflicts and supply chain disruptions, future-proofing the global supply chains is paramount. According to Kathy Wengel, Executive Vice-President, Johnson & Johnson, some of the factors that must steer present global supply chain strategies include incorporating proactive resilience, developing its digital
with the core development of global standards, Tobias Meyer, CEO, DHL Group, elaborated, “Governments must build on existing strength and commit to doing no harm. We must focus the interventions on clear incentives – tax carbon, for instance, and get to simple rules that are reliable and that investments can be based on, while not
supplychaintribe.com
creating additional risk for businesses with constantly changing regulations.” Commenting on companies now being accountable for the whole supply chain in the EU, he also highlighted that this was an example of well-intended regulation, but we must be mindful of the geopolitical impact of extra-territorial reach. “The West constitutes 10% of the world’s population, not 90% - it cannot describe to the rest of the global supply chain how things need to be done.” In another session, titled ‘TradeTech's Trillion-Dollar Promise’, the conversation moved towards how technology is not only revolutionising global commerce and investment, but also digitalizing the trade ecosystem, while holding the potential to increase trade by nearly $9 trillion by 2026 within the G7 alone. But the benefits of technological advancements to the supply chain do not translate uniformly. Deemah Al-Yahya, Secretary-General, Digital Cooperation Organization (DCO), Saudi Arabia provided context to this issue, “The digital divide is increasing between countries. The need to expediate the digital transformation across the supply chain requires a lot of investment and support. We need to move from an egocentric approach to an ecocentric approach, which in turn will increase knowledge-sharing between countries.” Vincent Clerc, CEO, A.P. MøllerMaersk, added, “Some of the challenges point to the global supply chain still being fragmented. There is no standard data interface and exchange between agencies in trade. There is a need for a multi-pronged effort here.”
37
RECAP
India’s Presence at Davos and overcome structural challenges to emerge as one of the world’s pre-eminent economies? Its actions this year, as it approaches the crucial general elections, could lay the groundwork for the country to 'become the world's third-largest economy in the next five years', wrote Sriram Gutta, Head, India and Deputy Head, South Asia at the World Economic Forum. It's also an opportunity to set an example of 'inclusive, sustainable economic growth, digital development and climate action.' Here’s a low down of the discussions that happened during the forum…
I
NDIA'S presence at WEF 2024 was inspired by the mantra ‘Engage, Experience, Invest’. Building on its successful G20 leadership, India championed the theme of ‘Vasudhaiva Kutumbakam’ – One Earth, One Family, One Future – acting as a unifying voice for the Global South. An assessment of Davos 2024 by consulting firm McKinsey and Company stated, “India is transforming rapidly as one of the fastest growing large economies in the world. When it comes to technology, talent, healthcare, and other areas, its future in 2024—and beyond—is worth paying attention to.” These sentiments were echoed by industrialist Gautam Adani, who said in a LinkedIn post, “If the first major theme at WEF 24 was about rebuilding trust, the second was about the rise of India.” India also made its presence felt in ways other than its economic potential. One of the ideas discussed at WEF this year was how investment in women’s health could boost the global economy by $1 trillion annually by 2040. According to the Press Information Bureau (PIB), “One of the key takeaways from the Forum meeting was the announcement of the launch of a Global Good Alliance for Gender Equity and Equality with the support and endorsement by WEF and Government of India. The idea of this alliance emerged from the G20 Leaders’ Declaration and India’s abiding commitment to the cause of women-led development as propounded by Prime Minister Shri Narendra Modi.” The objective of this Alliance is to bring together global best practices, knowledge sharing and investments in
38 CELERITY February 2024
the identified areas of women’s health, education, and enterprise,” the PIB said. Carmine Di Sibio, Global Chairman and CEO, EY, was quoted as saying, “Almost everyone I talked to is very bullish in terms of India,” at the World Economic Forum in Davos, Switzerland. Referring to a recent EY report projecting India's long-term GDP at $26 trillion by 2047, Di Sibio added, "When I talk to our clients from India, they say we should do better than that. We should do better than what we came out with. So, lots of tailwinds with India, in terms of obviously the demographics but also the opportunity to take on some of the supply chains away from China. We are seeing some of that. So, there's some real opportunities, and assuming nothing goes wrong, your political system in the long term." PwC Global Chairman, Bob Moritz, shared insights at the World Economic Forum in Davos, highlighting a shift towards optimism among CEOs globally. According to Moritz, India stands out as a beacon of confidence among CEOs. The survey focused on potential investment destinations beyond CEOs' home countries, and India emerged as a prominent choice. Moritz identified three key opportunities that are capturing global CEOs' attention: the rise of the Indian consumer market, supply chain prospects, and India's potential to serve the global market more expansively. ‘Can India seize its moment?’ That was the focus of a key sessions at Davos 2024. The bigger question? How can it maintain its momentum around economic resistance to global headwinds
On the BRICS expansion
T
HE expanding BRICS club of nations is calling for a united stand of emerging and developing countries, but a crucial question remains - how will it forge consensus among its diverse members and contribute to the reshaping of the global geopolitical and economic landscape? Smriti Zubin Irani, Minister of Women and Child Development, views BRICS as a ‘platform of consensus’ with India playing a pivotal role as ‘one of the bridges between the Global North and the Global South.’ “The celebration at BRICS about our mission, courtesy of ISRO (the space agency of India), when we landed on the dark side of the moon was not a celebration limited to India alone,” she says. “The cooperation in space technology is something that has been written about.” As for achieving consensus, she states: “If the agenda is growth, if the agenda is inclusion, if the agenda is servicing global aspirations, then India is well positioned to be a bridge, no matter the conversation or geography... because irrespective of how fractured or fragmented the world seems today, I proudly say as an Indian, that we can help become the democratic glue that brings everybody together.”
RECAP
On clean energy transition Photo by Kervin Edward Lara
I
N the face of escalating climate-related concerns, India plays a key leadership role in the global fight against climate change. The growing population and rising energy demand call for a delicate balance between economic advancement and ecological responsibility. “We are facing multiple crises. And for a country like India, which now has the largest population in the world, it requires a transition to sustainability without jeopardizing or undermining the need to deliver basic welfare to a large and growing population,” says Hardeep Singh Puri, Minister of Petroleum and Natural Gas and Housing & Urban Affairs. “If you look at the global scenario today, India's consumption is growing three times the global average. In the next 20 years or so, India will account for 25% of the world's energy demand.” For India to achieve net-zero emissions by 2070 as planned, it needs to pursue non-traditional methods for energy generation. Alongside a concerted push for Green Hydrogen and biofuels, the country has launched the International Solar Alliance and proposed a global grid for renewables. It ranks 67 out of 120 countries on the Forum’s Energy Transition Index (ETI) 2023, showcasing steady improvements across the three dimensions of the energy triangle over the past decade: equitable, sustainable and secure. India also emerged relatively less affected by the recent energy crisis, finds the report, largely due to the low share of natural gas in power generation and increased use of existing generation capacities. But can developing economies like
India follow the same pace of change as developed countries? In a ‘Transforming Energy Demand’ session, Dr. Anish Shah, the Group CEO and Managing Director at Mahindra Group, said developing nations could ‘actually create a better set of outcomes’. “If we look at renewable energy, India is putting in 600 gigawatts (GW) of renewable energy by 2030,” he says. “The beauty there is that the cost of solar energy in India is far lower than traditional energy… emerging countries
are going to, in some ways, show the way and rewrite the rules in terms of how energy can be used.” But he cautions against relying on a silver bullet and instead focusing on solutions for the long term. A skilled workforce, public-private collaboration in innovation, and investment in research and development in low-carbon technologies are necessary to enable India’s energy transition, as detailed in the Fostering Effective Energy Transition 2023 report.
On responsible use of AI
A
I has been a hot topic of discussion at the Meeting, with leaders highlighting its great potential but emphasizing the need for governance. António Guterres, the Secretary-General of the United Nations, called for enhanced efforts around AI governance while the United Kingdom's Chancellor of the Exchequer, Jeremy
supplychaintribe.com
Hunt, called for 'light touch' regulation and global collaboration on AI. The Indian delegation promoted responsible behavior regarding AI, insisting on convergence or a consensus on watermarking AI products ‘so that nations at large have a balanced approach towards emerging technologies’, as expressed by Smriti Irani during a
session. Arvind Krishna, Chairman & CEO, IBM, said, “Artificial intelligence (AI) will be equal or even bigger than the steam engine revolution and India is going be to at the forefront of AI deployment. Given the scale of India’s data sets, it will be remarkably useful. I must applaud the Indian Government’s in initiatives in AI
39
Photo by Pavel Danilyuk
RECAP and building AI centres of excellence. AI is going to be a global force for good. We are a firm believer that India will be massive beneficiary of AI. Workforce that is going to deploy AI will come from India.” For Debjani Ghosh, President, National Association of Software and Services Companies (NASSCOM) in India, trust and inclusion are crucial to building AI scalability. “And that's where
the world will benefit by looking at India and what we are doing with technology,” she says. But we cannot do it without talent that is inclined digitally, she added, referring to India's 'biggest differentiator' with the young population. "We can build in them the basics of responsible use of technology because we are building technology to solve problems."
On sustaining the growth momentum Image by pch.vector on Freepik
I
NDIA’S economy showed robust growth over the past year, IMF stated as it concluded its Article IV Consultation with India in December. “Growth is expected to remain strong, supported by macroeconomic and financial stability. Real GDP is projected to grow 6.3 per cent in FY2023/24 and FY2024/25.” "With a 95% confidence interval, we can all assess that India will be growing at 6 to 8% for the whole of next decade… with a moderate inflation of 4 to 6%," stressed Ashwini Vaishnaw, Minister of Railways, Communications; and Electronics and Information Technology. “Continued broad-based policy initiatives and structural changes focused on inclusive growth, sustained revival in domestic consumption demand, and rapid adoption of new and emerging technologies to enhance productivity will be critical,” highlighted Sriram.
“Additionally, India must continue to engage in multilateral forums to address global issues such as health crises, economic disparities and geopolitical tensions.” Reskilling and upskilling will
also play a crucial role in ensuring India’s demographics will benefit its growth story, which will require "broad labour market reforms and human development measures".
Leaders echoing positive outlook Dr. Anish Shah, Group Chief Executive
Officer and Managing Director, Mahindra Group, emphasized a significant change in perception over the years. Shah noted increased optimism about India as a long-term market and a supply chain hub. The focus has shifted from viewing India as an alternative to China to recognizing it as a standalone hub with unique opportunities. The question now is not whether to invest in India but how to make it work for long-term success. In the times to come, India will be seen as a torchbearer not just for progress on national climate goals, but also for
40 CELERITY February 2024
how government-business collaboration played a pivotal role in getting there.” Roshni Nadar Malhotra, Chairperson, HCLTech, echoed the sentiment, noting cautious optimism in the market. She highlighted a shift in perception, with India being seen not just as a hub for IT services but as a strategic location for investment. The growth in private organizations and industry activities is contributing to this positive outlook. During an interview, Gita Gopinath, Deputy Managing Director, International Monetary Fund, was quoted as saying, “India continues to be among the fastest-
growing major economies in the world, and we expect that to continue into 2024. So that's a very positive story. India will continue to be amongst the fastest-growing economies in the world in 2024, backed by two significant pillars of progress. Two big areas of progress have been physical infrastructure, roads, ports, airports and so on, but also digital infrastructure. I think both have been areas of remarkable progress, and that is beneficial to all parts of society, and not just the very rich.” This is a compiled version.
Celerity India Marketing Services Email: tech@celerityin.com | Mobile: 79771 05913 Website: www.supplychaintribe.com www.supplychaintribe.events www.supplychaintribe.jobs