Imperatives for Indian Supply Chain 2013 & Beyond
The
dynamic (i think almost chaotic) nature of the operating environment in India has created a need to identify new set of parameters to succeed in future.
Actually the term 'Success' is also being redefined. Although to leverage
global experience is useful, the success in managing Supply Chain comes from
possession of knowledge of indigenous practices of Supply Chain. India by
many means represents unique set of evolving parameters in Strategically
aligning & Operationalising Supply Chains to deliver the Goals of enterprise.
It
looks like a set of parameters need to be appreciated for making success in the
times to come. My imperatives for Indian Supply Chains are (& far from being all!),
- Adopt a Supply Chain Excellence Model - Businesses have long been developing practices of Business Excellence predominantly around Quality & Productivity. Life needs to move further up where the money is & Supply Chain is where the money is. This is the period of time to think & lay down the Supply Chain Excellence Model.
- Product out v/s Market in philosophy - Move away from the syndrome of producing & (trying to ) moving out to the customer. This has been successful in the past. Product out syndrome is a great way to loose faster in future. Make Supply Chains integral part of customer interaction. Let Supply Chain allow the Market to be synced into it.
- Know your Risks Exposure across Supply Chain - Running a Supply Chain inherently means taking risks. Enterprise needs to appreciate the Risk appetite it has before any thing else. Risk Appetite & Risk Culture would determine the buffers your Supply Chains need to protect itself from disruption. Else you are in for a misaligned Best Practice adoption with your own reality.
- People Supply Chain – The success or failure of the Supply Chain is a function of the people operating the supply chain. You can never train enough. Train, Retrain & Retrain. There is no other way to succeed except highly skilled, motivated & competent people.
- Every person is a Sales Person – Make every person feel like (s)he is a Sales person. Be it internal customer or external customer. Every person needs to feel the imperative to show value addition for the next in the chain. Purchase has to sell itself to Production. Production to Sales. It has nothing to do with the lip service of being a ‘Profit Centre’ v/s ‘ Cost Centre’.
- Innovation led model is in, Cost arbitrage model is over (& almost dead) – With the dramatic rise in wages & operating costs in India, Cost arbitrage model for Supply Chain success is over. So focus on Innovation led Supply Chain model. Innovation in Services. Innovation in Supply Chain design. Innovation in Product.
- Supply Chains need to cater to Demand Polarization market place – I am not saying ‘Fragmented Market. I think it is a ‘Polarized’ market. The income polarization in India would create two different market with distinct behaviours. Supply Chain designs would need to know how to cater to the polarized markets.
Also 2 more aspects which I feel should be brought to more focus;
ReplyDelete1. Flexibility : Supply Chain should bring more focus for flexibility owing to the volatility that is prevailing the market
2. Visibility : It is extremely important to have complete visibility of Inventory, Turn Around Time, at all points in Supply Chain
The effective & efficient supply chain will be the one which manages well the variants in smooth material flow throughout the chain.Here I am talking about velocity of material.How fast it moves in the entire supply chain will determine the efficiency & effectiveness of that supply chain.Any slowdown or stoppage of this movement will incur cost.Hence design a model which ensures minimal cost.It's not easy.The product marketing & sales functions needs to be very strong and aggressive to ensure that the product is sold as forecast-ed.In manufacturing set-up the line should be balanced.Materials managers to ensure input of materials/components in time to feed the line accordingly.Logistics has to be planned effectively.Communication & information in the entire supply chain has to be sensitive to the time.The Input in the ERP system should be accurate & on time.
ReplyDeleteThe vital factors are: 1.Product design 2.Product quality 3.Central storage & Distribution network 4.Customer care & services 5.strong suppliers 6.Excellent teamwork 7.Process oriented set up 8.Open culture & good working environment. Ultimately people is the most important factor. they only can make things happen.
Reg- Deshpande A B
Risk Appetite eh!
ReplyDeleteThanks Pinak for sharing your thoughts.
ReplyDeleteI agree on polarization of demand. I think corporations are painting everybody by the same brush when it comes to customer service and still lecture on value of loyalty and rewards for loyalty without ever getting to know who the loyal customer is.
The supply chain infrastructure and the architecture has been blind to this very need to be competitive. Some customers are profitable, some are not. Some buy on web, some buy in malls. some buy from used market some buy from kirana shops. Some switch some dont. Some use you as a back up and some expect reward for being loyal. A model for incentiving customers is missing. Customers can be incentivized to buy from x, y, z channels so that supply chain remains stable and also profitable. Managers are short sighted and scared about experiementing this massive change. They are following leaders. They are awaiting the first movers. No matter what "Professionals" says, I find Kishore Biyani has understood this very well.