Even with these advances in modern supply chain management, global supply chains add several layers of complexity to inventory control. This means that inventory management is vital to supply chain planning. In light of the logistical and cost challenges faced over the past year, companies need to do a better job stressing the importance of the discipline. Fortunately, initiatives toward leveraging Big Data, AI, and Machine Learning are empowering inventory management systems that enable supply chain managers to meet increased demand for production and speed of fulfilment. If the world had any doubts about the importance of a responsive and agile supply chain, the erratic demand variation associated with the COVID-19 pandemic removed them. Creating a responsive and agile supply chain and then creating benchmark inventory management capability where it must exist is vital to today’s supply chains. Vishwesh J Nair, Head of Strategy, Operations and Supply Chain at The Belgian Waffle Co. speaks in detail about how inventory optimisation has become the gold standard for today’s supply chain managers and that efficient inventory management has boosted his company’s profitability, enhanced supply chain visibility and improved operations by keeping a steady inventory flow. Excerpts by UPAMANYU BORAH…
Genesis and Operations
The Belgian Waffle Co. started out with one outlet in Mumbai and today is present in more than 100 cities in India and counting.
Taking the multichannel route, the brand, which was founded in 2015, now aims to be present across segments, including quick-service restaurant (QSR) outlets, e-commerce platforms, modern trade and A-list stores across the country. In fact, we intend to soon become the largest QSR player in the country in the dessert category.
As we continue to build our offline presence, we are guided by the same ethos we had in 2015 – simplicity, affordability and excellence in customer experience. We look to the future of making a shining example of an Indian QSR brand making its mark globally on the back of our patrons’ affection and love.
Unique and innovative strategies enabling service abilities
To ensure better supply of our products, we continuously assess and adapt stringent strategies to remain competitive and meet customer expectations. Benchmarking practices play a critical role in this ongoing process of improvement, helping us stay informed about global best practices and adapt to changing market conditions.
We focus on optimising the supply chain by leveraging advanced technologies, such as AI, IoT, and data analytics, to gain better visibility into operations. This helps in demand forecasting, inventory management, and order fulfilment.
We often strive to strike a balance between lean and agile supply chain strategies. While lean principles reduce waste and minimise costs, agile strategies enable quick responses to changing customer demands and market dynamics.
We are keen towards building strong relationships with vendors and suppliers. Collaborative partnerships, long-term contracts, and open communication help us to ensure a steady supply of high-quality products.
We also implement risk management strategies to identify, assess, and mitigate potential supply chain risks. This includes diversifying suppliers, assessing geopolitical and environmental risks, and having contingency plans in place.
Aligning distinct capabilities with a strategic Innovation Approach
For our core business, we have always had a pan-India focus and ensured our model is built to always fit that vision of scale while prioritising quality. Our products have a high shelf life and we provide our own custom products and flavours centrally to all our own and partner stores throughout the country and internationally through third-party logistics. Importantly, by maintaining a strong focus on food quality, we ensure that delivery orders meet the same high standards as in-store service.
Adapting to the demands of e-commerce and faster deliveries in the QSR industry requires a combination of technology, data-driven insights, process optimisation, and a customer-centric approach. By embracing digital transformation and focussing on efficient supply chain practices, we ably meet the evolving expectations of today’s consumers. We strive to implement an integrated digital ordering system that enables customers to place orders through various channels: mobile apps, websites, third-party delivery platforms, and in-store kiosks, ensuring seamless communication between the digital front-end and the back-end supply chain to optimise order processing.
Talking about inventory management, we continue to focus on implementing advanced inventory management systems to monitor and adjust inventory levels in real-time by leveraging demand forecasting tools to anticipate fluctuations in demand and optimise stock levels.
Enabling straightforward Value Generation
We are implementing cost optimisation measures to prevent additional costs for consumers. Our logistics partners also play a crucial role in streamlining operations to mitigate adversities.
In the current landscape of escalating input costs for various products, we have implemented a multifaceted strategy to ensure that the burden of these additional expenses is not passed on to the end consumer.
Our approach involves rigorous cost analysis and optimisation of our internal processes. We identify areas where we can reduce costs without compromising product quality or customer experience. This involves renegotiating contracts with suppliers, exploring alternative sourcing options, or enhancing our production efficiency.
Collaboratively, our company ensures efficient transportation, warehousing, and distribution, which minimises the overall cost of bringing products to the market. Our logistics partners work closely with us to identify opportunities for route optimisation, reduce transit times, and implement sustainable practices to save on fuel costs.
Additionally, technology and data-driven logistics solutions are leveraged to enhance visibility and responsiveness in the supply chain. This allows us to anticipate and address any logistical challenges promptly, avoiding delays and additional expenses.
Ensure technological prowess in a rapidly evolving system
In today’s fast-paced and dynamic business environment, we recognise the pivotal role that technology plays in ensuring efficiency, visibility, and responsiveness within our supply chain. Our commitment to leveraging advanced information technology solutions to fortify our supply chain operations has yielded significant success.
We use Custom Less than Truckload (LTL) Panel/Dashboard to track consignments on a Part Truck Load (PTL) basis. We are able to track freight charges, when will it reach, breakup of delivery cost and many other elements of delivery.
We use Advance Data Analytics tools to forecast the demand for every SKU which is used in our organisation.
We use a Transportation Management System (TMS) to plan and optimise our transportation routes. This helps us to reduce costs and improve delivery times. We are also committed to sustainability, and we are using information technology to reduce our environmental impact. For example, we use our TMS to optimise our transportation routes to reduce fuel consumption.
We use a Warehouse management system (WMS) to manage our inventory and automate tasks in our warehouses. This helps us to improve efficiency and reduce error as well as waste.
We use Big Data to optimise routes and space in the warehouse. Route optimisation helps in delivering raw material on time in minimum cost. Similarly, warehouse space optimisations help in accommodating more material, which leads to timely supply of goods to each and every outlet.
Tight-knit collab strategies to keep the engine running
To ensure smooth coordination between suppliers, distributors, and transporters/logistics service providers, we take the following steps:
Establishing clear communication channels: It is important to have clear communication channels in place so that all stakeholders can communicate with each other easily and efficiently. This includes establishing clear channels for order placement, tracking, and dispute resolution.
Sharing information regularly: It is also important to share information regularly with all stakeholders. This includes sharing information on inventory levels, order demand, and transportation schedules. This helps to ensure that everyone is on the same page and that potential problems can be identified and addressed early on.
Using technology to automate tasks: Technology can be used to automate many of the tasks involved in logistics coordination. This can free up time for stakeholders to focus on more strategic initiatives. For example, we use a TMS to optimise transportation routes and track shipments. We have also deployed a WMS to automate tasks in the warehouse.
Building relationships with key stakeholders: It is important to build relationships with key stakeholders, such as suppliers, distributors, and transporters. This helps to build trust and cooperation, which can lead to improved coordination. For example, we meet with our suppliers and distributors on a regular basis to discuss their needs and requirements. We also work with our transporters to develop contingency plans in case of disruptions.
Logistics—Essential to Strategy
We are one of the fastest growing QSR chains across India. We believe in only serving freshly baked, hot crunchy waffles to our customers, which is why we require our logistics team to supply the raw material to all our stores at regular intervals and on time.
We have our own in-house logistics arm as well as outsource to other logistics partners. We handle 80 per cent of logistics on our own and 20 per cent is managed by 3PLs. Following are some of key functions bestowed on our 3PL providers:
Transportation: 3PL providers help us to transport products from one location to another in the designated areas. They are responsible for timely dispatch of orders to the stores.
Warehousing: 3PL providers help us to store our products in the warehouse. This includes providing secure storage, inventory management, and order fulfilment services.
Direct Procurement: Some of the products are directly procured by the 3PL facility without interference of the mother warehouse.
Freight Forwarding: 3PL providers manage the entire shipping process, from booking transportation to handling customs clearance.
Value-added Services: 3PL providers offer a variety of value-added services, such as kitting, packaging, and assembly. This saves our business time and money, and helps us to improve the quality of our products.
Technology Solutions: Our 3PL providers offer us technology solutions that help our business to track our shipments, manage our inventory, and optimise the supply chain.
Few of the qualities we seek in a logistics service provider before choosing their services:
Experience and expertise: We look for LSPs with experience in transporting the types of goods we need to ship and in serving the Quick Service restaurant industry. We also look for LSPs with expertise in the specific transport modes and routes we need to use.
Reliability and good track record: We look for LSPs with a reputation for reliability and on- time delivery. We also look for LSPs with a good track record of customer service.
Competitive pricing: We compare the prices of different LSPs to get the best possible deal. However, we are willing to pay a premium for a reliable and experienced LSP.
Technologically-enabled: We look for LSPs that use technology to track shipments and provide real- time visibility. We also look for LSPs that offer web-based portals where we can manage my shipments and get quotes.
Flexibility and customisation: We look for LSPs that are flexible and can customise their services to meet specific needs.
In addition to the qualities listed above, we also look for LSPs that are committed to sustainability. We want to work with LSPs that are taking steps to reduce their environmental impact. For example, we look for LSPs that are using alternative fuels and investing in renewable energy.
Refined planning of Logistics
Some policies that we have implemented to streamline outsourcing of logistics services and the use of alternative transport modes and routes:
Developing a clear understanding of our logistics needs: This includes understanding the types of goods we need to transport (durable or non-durable goods, raw material or packaging material), the distances involved, and the delivery timeframes. Once we factor in these variables, we have a clear understanding of our needs. After that, we start to identify alternative transport modes and routes that can meet those needs.
We transport goods in urban areas, which is why we work with a logistics provider that specialises in last-mile delivery. This helps us to reduce congestion and emissions in urban areas
Work with a variety of logistics providers: We don’t rely on a single logistics provider for all of our needs, because that can make us vulnerable to disruptions and price increases. Instead, we work with a variety of logistics providers, including those that specialise in alternative transport modes and routes.
Negotiating contracts with logistics providers: This helps us to get the best possible prices and service levels. While negotiating contracts, we make sure to specify our requirements for alternative transport modes and routes.
Monitoring logistics operations and making adjustments as needed: It’s important to monitor logistics operations on an ongoing basis to identify areas where we can improve efficiency and reduce costs. This includes monitoring the use of alternative transport modes and routes. For example, we use data to identify shipments that are frequently delayed or that are costing too much to transport. Then, we work with our logistics partners to identify ways to improve the efficiency and cost-effectiveness of these shipments.
Warehousing strategies that alleviates the bottom-line
Some of the warehousing strategies we deploy are:
Hub and Spoke Model: We follow this model for the distribution of raw material across different warehouses and stores. We have four major hubs across India, i.e. Mumbai, Delhi, Kolkata and Bengaluru (which are our warehouses) and all our outlets are the spokes, which receive material from them.
Centralised Inventory Management: We maintain a centralised inventory management system that allows real-time visibility of stock levels at one warehouse. Mumbai is helmed as the mother warehouse which provides material to all the other warehouses. This ensures that we have a holistic view of inventory, enabling better decision-making and coordination.
Efficient Transportation Strategies: We implement efficient transportation strategies, such as route optimisation and consolidation, to minimise delivery costs and enhance delivery speed. This ensures that all stores receive stock promptly while reducing unnecessary expenses. Every store is allocated a particular time period for the delivery of raw material depending upon the locations. Further, we deploy multiple transportation vendors in order to put in place a cost-efficient and quick transportation system by ensuring:
Collaboration: This is the process of working together with suppliers, partners, stores and other stakeholders to optimise the supply chain. By collaborating with others, we share information and resources to improve efficiency and reduce costs.
Continuous Monitoring and Analysis: Our supply chain team constantly monitors inventory levels, sales performance, and logistics efficiency. Regular analysis of this data allows us to identify trends, opportunities, and areas for improvement in the supply chain.
Some of the other tactics that we deploy are:
Lean warehousing practices: Lean warehousing is a set of principles and practices that help QSRs to eliminate waste and improve efficiency in their warehouses. Lean warehousing practices help QSRs to reduce costs and improve customer service.
Vertical spaces: QSRs use vertical space to store more inventories in their warehouses. This helps QSRs to reduce their warehouse footprint and save money on rent.
Meeting the need for a viable backend infrastructure
Few of the other things we do to maximise the efficiency of our logistics and backend operations:
Use demand forecasting tools: These tools help us to forecast demand more accurately and ensure that we have enough transport resources to deploy on a regular basis to meet the demand.
Use technology: Technology helps us to automate tasks, improve visibility into the supply chain, and make better decisions. We use Custom LTL (Less than Truckload) Panel/ Dashboard to track consignments on a PTL (Part Truck Load) basis. We are able to track freight charges, when will it reach, breakup of delivery cost and many other elements of delivery.
Fast track Service: We understand that the business involves unprecedented circumstances which might create the need for last minute delivery of raw material which is why we also provide fast track service to all of our stores for delivery of raw material apart from its delivery schedule.
Stay up-to-date on compliance requirements: We try to stay up-to-date on compliance requirements so that we can ensure that our business is compliant.
Use data to improve your decision-making: We collect data on our logistics and backend operations and use it to identify areas where we can improve efficiency. For example, we use data to optimise our inventory levels and shipping routes.
Invest in people: We invest in training and development of employees so that they have the skills and knowledge they need to be successful. We also create a positive work environment where employees feel valued and supported.
Monitor and measure performance: We monitor and measure the performance of our logistics and backend operations on a regular basis. This allows us to identify areas where we can improve.
