COVID-19 has exposed the vulnerabilities of complex global supply chains built on lean manufacturing principles. The impact of China’s lockdown and its dominance in key areas of manufacturing further highlighted the problem with modern supply chains. Vikash Khatri, Founder and CEO, Aviral Consulting, in a brief conversation with Upamanyu Borah, elaborates the transition to a new model for supply chains which will be underpinned by a decentralisation of manufacturing capacity and wholesale digitisation of the paperwork that accompanies global trade.
vikash khatri
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hat do you feel are the biggest challenges companies in the supply chain space face and how is risk monitored and overcome? Currently, the vulnerability of supply chains along with the unavailability of manpower is the biggest challenge the industry is facing. The historical timeseries analysis of movement and inventory is no longer valid; the ability of supply chains to consume internal and hyper local data on a real-time basis has accelerated. Traditionally, all supply chains were designed for cost efficiency, but in the new normal, this objective is being superseded with the KPI of serviceability. The supremacy of planning function is now being challenged with the function of supply chain visibility/ control tower to monitor the risk and take real-time tactical decisions. Even if we exclude the unforeseen circumstances due to COVID, there are some perpetual challenges for supply chain functions. One of biggest challenge has been to create a balance between lowest possible cost and flexibility of capacity as per demand variation. On one side of the supply chain, increasing expectations of customers is posing challenge. Another challenge is the lack of talent. Challenges of talent exist on white collar and blue collar. Besides, poor level of standardisation across the supply chain is also a challenge, leading to inefficiency, rigidity, weak portability, and ultimately increased cost. As a consultancy, there is a high value placed on empowering companies to make better decisions, how important is keeping up with the latest trends to ensure you are delivering exactly what your customers need? Supply chain consulting requires the ability to assimilate and operate in either presence or absence of specific data sets. A multivariate optimisation problem is both a design as well as a computational challenge. Consulting today has undergone transformation; it has moved away from 64 |
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We would see a movement towards localisation just advisory services based on past knowledge from engagements with clients. Today, most clients expect the advisor to be part of the journey and hence looking for recommendations to be executed for them. In such a scenario, we need to remain domain focussed and connected with the industry to keep on updating our knowledge base. However, the satisfaction of daily execution and results is what drives this niche practice of consulting across our clients.
In order to assess inefficiencies of logistics in any organisation, what practices or tools are available? In order to assess and optimise inefficiencies, there are multiple simulationbased tools but none provide one stop holistic assessment of logistics efficiency. At Aviral, we have introduced ‘Logistics Audit’- a comprehensive audit of processes, practices, and network. The objective is to examine competitiveness and robustness of logistics operations, efficiency and cost. Optimisation is the next step to it. This activity also provides recommendations and guidelines on logistics management to improve overall efficiency. As industries restart with constrained liquidity and cost pressures, how can organisations drive initiatives to cut supply chain complexity?
In the past few months, we have witnessed a change in demand patterns, challenges in maintaining supplies, liquidity, and pressure of cost optimisation. Across the world, supply chains have connected source of lowest cost manufacturing to the centers of consumption. The crisis has exposed the risks and vulnerabilities of the cross-border supply chain with single-source dependence, which is now expected to realign. As we redesign/redirect the global supply chain, we would see a movement towards localisation, distributed manufacturing, and the cross-border supply chain problem will morph into smaller localised problems like links in a chain.
What do you envision for the future of the Indian supply chain industry to look like? Maturity of supply chain industry depends on infrastructure, technology and volumes to support sustainability. Almost all the indications on these parameters are favourable for India. With rapid investments by the government in rail freight corridors, airports, expressways, and adoption of more digitalisation, the future for supply chain industry is very bright. Additionally, there will be manifold opportunities in the market with the shifting of global supply chains from China.
