Supply Chains: From ‘behind the scenes’ organisational role to being a ‘prime driver’ of company business

Traditionally, supply chain management has been one of a number of processes designed to help each business realise its primary goals. The traditional model, however, is changing, the supply chain has become a main protagonist everywhere, it has moved from playing a ‘behind the scenes’ organisational role to being a ‘prime driver’ of the company business. The role of the traditional industrial model is to produce in volume, but as the world adapts to the post-COVID-19 reality, with heightened levels of economic, political and climatic uncertainty, manufacturers will need business and supply chain models that are truly agile if they are to remain profitable.  This will involve real-time supply chain monitoring, increased use of remote diagnostics and intervention where necessary by skilled managers; all of which will detract from the primary business goal. Senthil Kumar D, Lead- Sales, Distribution and Logistics – LCV Marketing, Ashok Leyland, in an interaction with Upamanyu Borah, talks aboutmodifying the supply chain as a key business driver and putting back the human asset as the most important factor for an agile business to succeed.

Automotive supply chains worked together to remain competitive, reliable and resilient amidst disruptions brought by the pandemic. In general, how did companies adapt their logistics strategies?

The India automotive industry has already seen a difficult past and the pandemic-led disruption couldn’t have been more ill-timed. However, a planned and concerted response, both immediate and medium- to long-term ensured a V-shaped recovery. As critical as industry action was the support needed from government and regulators to catalyse this revival. After all, the COVID situation was a call for action by one and all in these troubled times.

With significant port congestion, a significant decrease in air freight capacity, and truck driver shortages, there was a significant backlog in logistics that took time to resolve, as logistics operations gradually came back to normal. Companies worked to secure capacity with their logistics partners. In some cases, companies looked at alternate routes (e.g. Rail). In some exceptional cases, companies justified the economics of charter flights.

At the same time, the government had also focussed and insisted to use railways to manage the COVID situation, especially for logistics movement across SAARC countries. This, in turn, allowed companies to reduce their logistics, warehousing, and inventory carrying cost.

With an urgent need for manufacturers and suppliers to work together on new supply chain requirements, what would you highlight as the most important changes amid the headwinds blowing across the Indian market?

Collaboration and transparency has improved- The traditional view of a linear supply chain and optimising for one’s own business is transforming into digital supply networks (DSNs) where functional silos are broken down within an organisation and it is connected to its full supply network, thereby enabling end-to-end visibility, collaboration, responsiveness, agility, and optimisation. Increasingly, these digital supply networks are being built and designed to anticipate disruptions and reconfigure themselves appropriately to mitigate their respective impacts.

Supply chain was exhibited before COVID but executed operationally after COVID- For companies competing on a global scale, things can change quickly—and not just from unexpected breaks in the supply chain caused by a pandemic, but disruptive technologies or abrupt market shifts as well. All too often, supply chain strategy and business strategy have been kept separate. Driven by greater global complexity and the enormous stress that has been placed on networks—from higher customer expectations to dynamic delivery solutions—companies have started to challenge the long-held orthodoxy that supply chains exist simply to meet the commercial needs of the business. Instead, supply chain considerations are now beginning to be considered central to business strategy.

Redefined service delivery with utilisng on-demand networks – Data has become the new currency upon which success or failure can be measured. It has, therefore, become essential to determine how data and technology will enable business and supply chain objectives, and where it is critical to lease vs. buy these capabilities. Technology solutions have historically been expensive, housed on site, and difficult to replace without major capital outlay. Given the rise of cloud-based solutions, supply chain executives have access to lower-cost products from a range of innovative providers. Supply chain leaders are thus able to rethink their company’s technology strategy as a means of driving increased innovation and nimbleness at lower cost and faster speed to market.

How can supply chains in the sector use insights and lessons learnt for their risk management efforts?

Most significantly, through:

  • Realising the importance— from globalisation to regionalisation
  • Playing a prime role in rebalancing the global supply chain during crisis
  • Ensuring advance planning on material availability

How is the Indian market doing post-COVID and what is your outlook on supply chain performances?

Post-COVID, demand and expectation on delivery have improved, and accordingly, supply chain is playing a major role to meet the needs at both ends. Every sector from FMCG to auto product companies is exploring the option to meet higher customer satisfaction levels.

In India, the concept of supply chain has become the highlight amongst all set of businesses. For instance:

  • Online trading has become the new trend
  • Door-to-door delivery of all range of products
  • Purposeful shift to regional sourcing
  • From ‘behind the scenes’ organisational role to being a ‘prime driver’ of company business
  • Speed of customer service critical for the velocity (quickness of motion/movement) of enterprise IT

What are the benefits of multi-tier collaboration and how can those be achieved?

Real-time visibility into suppliers at every tier was once considered impossible, but now it is now fully achievable. The obstacles that used to exist have been removed; once sparse in many regions where sourcing was prevalent, internet access is widely available to factories that need to provide on-hand raw material levels, detailed production milestone events, and shipment readiness.

With cloud-based platforms in place and all of the parties in the supply chain accessing them, real-time visibility is no longer just a pipedream — market leaders in every industry segment have visibility not just into their important tier I suppliers, but also a limited cross-section of their tier II and III suppliers as well.

The benefits of multi-tier collaboration and visibility extend across the entire product life cycle:

  • 2-way collaboration with suppliers
  • Rapid communication on demand and changes
  • Responsiveness to meet the demand
  • More seamless product launches
  • Improved supplier performance
  • Reduced planning cycle
  • Taking necessary mitigating actions before a minor hiccup becomes a major disruption

Importantly, the top strategic actions for collaboration is the improvement of internal cross-departmental visibility and integration into supply chain transactions and costs, as well as streamlining processes for easier fleet monitoring, enhancing usability or efficiency. Apart from that, is the improvement of timeliness and accuracy of data exchange about supply chain transactions, and increased B2B connectivity/visibility into suppler side processes with suppliers, 3PLs, and trading partners.

Apart that, what are the challenges hampering India´s finished light commercial vehicles supply chain and distribution space?

Due to shortage of semiconductors worldwide, parts availability is the big challenge and an ongoing constraint in case of manufacturing across all OEMs.

Timely fulfilment of demand is another big challenge resulting from the same. Simply put, the demand is high and supply is limited.

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