Supply Chain Fundamental Rethinking

Amul is an exemplary example of a Milk business portfolio. The characteristic of that Supply Chain is predominantly standardized products, variety to a limited extent and more importantly, customers not being demanding about a personalized experience from the product consumption. Supply Chain is tuned to being a Push Supply Chain.   A Push Supply Chain Strategy is characterized by standardized SKUs made available in anticipation of demand. The strategy is deployed when the total lead time of Supply Chain is longer than the wait time available with the customer. Amul launched Pizza close to two decades back. Probably the total number of cities where Amul launched Amul Pizza (as a pilot) may have exceeded the total number of operational outlets that closest competitor may have had across the country.This was the scale of launch. Since then Pizza business has come to along way in India.  I have met so many people whom I ask this question - Do you know Amul sells Pizza? And ove...

"The felt need" of Supply Chain agility has been much lesser than "the perceived need of agility". Covid-19 is a black swan event which has provided the context for "perceived need to meet the felt need". Indigenous Supply Chains have done a fantastic job with that.   My research (from the published data) gives a soothing perspective that Indigenous Supply Chains have exhibited agility of great sorts. I appreciate the Supply Chain agility on the below parameters, a. Capacity alterations - Indian Supply Chains have shifted the existing production line to produce a completely different product. e.g. In case of India's largest FMCG company, the plant which used to produce "Perfumes" before Covid-19, has transformed itself into producing "Hand Sanitizers". Assuming that flexibility in production technology being the basis for the shift also needs to be viewed in the context on the Supply side of the Supply Chain being able to "fee...

A rethinking of Supply Chain Competitive Levers is the need of building the Supply Chain of future..In this short video new way of thinking the same the timeless Levers of Time, Cost, Quality & Service has been envisaged by me    

Over the past few months, Covid-19 halted many a Supply Chains. At an, apparent, slow speed the MSME's are attempting to reboot & commence the business activities.  Supply Chains need to be put back on wheels. For MSMEs Supply Chain the question which needs immediate attention is - What would the enterprise need to ensure while rebooting its Supply Chain during these uncertain times. While operating the Supply Chain the objective is that it handles the period of uncertainty without being adversely impacted. The first and foremost checklist item is a continuous review of "Cash flows" . The demand side of Supply Chain being so uncertain, customers of MSME may have a delayed "Sales cycle", which naturally shall impact the MSME customers cash flow cycle. In turn, that can lead to delay in receiving Customer payments for the MSME. On the other hand, the Suppliers from whom the MSME may be procuring is likely to reduce the credit periods. This shall stretch "...

Supply Chains need data driven decision making. This has been the hypothesis basis which Supply Chain Intelligence has been the "core" area. Supply Chain Intelligence naturally can be enhanced through better Software application, Digitization initiatives & Organization process architecture which ensures improves MIS systems. Supply Chain data analytics is an evolving domain with a lot of Management focus. All the efforts are to improve Supply Chain "Intelligence". While there is nothing inappropriate in attempting to improve "Intelligence" the primary assumption is Supply Chain decisions can be an outcome of "Modeling" the data using "all the parameters" needed for decision making. Second, implied assumption also is that the Supply Chain Professional may lack the needed insight of the dynamic situation hence may not make the right decision. Situations like Covid-19 change this permanently. And till a new system of modeling is not ev...

An opportunity of a life time knocks only once in a life time! So when it knocks, making less than a dramatic use of the opportunity is a "Waste". Ones response to Covid-19 needs to be on those lines as a country or as an organization. Over the years, as opportunities for livelihood did rise in Urban areas, Rural population has come to Urban areas & settled down, in not so much of a great comfort but with some assurance of income. The demand on Urban infrastructure & the Supply Chain designs to meet that demand have kept increasing all the time. The World over and particularly in India, there has always been a talk about De-congesting the Urban area. In the pre-Covid-19 days this remained as an aspirational thought. There has been no great success with that thinking. The imbalances of Urban & Rural livelihood opportunities, which have been in favour of Urban, didn't create an ecosystem which makes a person leave the Urban land.  Covid-19 probably has offered t...

In the quest of "Livelihood", humans have always kept moving. In some cases the movement has been natural and in some it has been forced by the circumstances. History shows that "Productivity" gain is an important outcome of such migrations. A country or a State and Industry in particular have benefited from the efficiency gains of such migrations. Once established as a base case, the migrant workers lay down a benchmark which rest of the community has to meet up, else it looses its employment opportunities to the migrant class. Various Indian States are reference examples of such incidences. There is no denial that the benefits have accrued over a period of time. During Covid-19 migrants have migrated again. In the short term, result of this migration, naturally, is mismatch of demand of skills against the supply of skills, particularly in the Manufacturing & Logistics sector where labour is trained with certain skills such that he performs the tasks efficientl...

Over the years, Supply Chains have focused on creating Management Systems & Structures, Policies & Processes, KPIs & IT systems to ensure its efficient functioning. I call it as the "Hard" (not as an adjective!) aspect of Supply Chain. People focused Supply Chain has assumed subordinate role as People focused seems to be synonymous to "Hero" model. In a Hero model, the person who drives the outcomes is the central point of attention & performance. No enterprise will be scalable with that model. Hence the focus on Hero model is not preferred. By proposing a "People" focused Supply Chain, I have no intention to create a "Hero" model. Supply Chains are real "Living" things. The beliefs of people who make the Supply Chain operate matters the most in designing & implementing the "Hard" aspects of Supply Chain. e.g. What is the Supply Chain teams belief about its Market Place dynamics shall drive the initiatives ...

When I inquire with professionals in the industry of what do they think is the objective of an enterprise. I always hear - It's Profits . Can't agree more than that as it is pretty much commonsense that Profits is an important goal to achieve. I always believe that a company can have Profits but still go bankrupt. The thin line of difference is a Supply Chain effect on company. The heart of running an enterprise is - Cash flow . An enterprise needs money to pay for its Current Liabilities which naturally it desires to pay from its Current Assets. Supply Chain activities are a great contributor to both the side of the balance sheet hence on the cash flow of an enterprise. e.g. Inventory as a Current Asset looks fine as long as its liquidated in time to generate funds before the cash outflow of the Vendor payment is due. No Asset ever got created without an corresponding Liability, isn't it? So Inventory being an asset is to be funded with Vendor offering credit. This balan...

In the evolution of enterprises, there comes a point in time when the circumstances lead to rethink the future course. I think Covid-19 has offered that, for those who wish to chart that course. Covid-19 has proven that the frequency at which Supply Chains are being impacted, due to unforeseen events, has increased to almost once every decade on a large scale. Coupled with the fact that Industry cycles have shrunk. With all the uncertainty arisen out of Covid-19, I am sure many enterprises have been working on how much would the Key Performance Indicators (KPI's) be impacted. Why enterprises? Even a country like China is thinking of its most important KPI - GDP growth rate - to be a number or a landscape / direction to be shared. In short, the stakeholders of Supply Chains are predominantly drawing on the KPI achievements factoring in for variations based on how Covid-19 unfolds. As a Supply Chain practitioner, I appreciate enterprises have spent lot of resources in designing the ...

Supply Chains have evolved with the "West" as an anchor. It probably has its roots in Supply Chain as a term being coined in the West. Also over the years, Supply Chain leading practices have emerged out of the West as well as the Supply Chain thought leadership has rested with the West. A mix of all these & many more things has led the Indian thinking of Supply Chain be overshadowed by the West. And that has been a very contrasting story till NOW. Indians by nature are heuristically driven & most of the Indian Supply Chain professionals that I have met over my career have exhibited that they can handle the "state of flux" much better. Rather Indian Supply Chain professionals have less liking towards deterministic way of working. Contrasting to that over the decades, all efforts have been to move towards "planning for enhanced flexibility, responsiveness & agility". This has been through practices of planning systems, adoption of technolo...

A predominant feature being observed during Covid-19 is ingenious solutions being worked out to tide over the situation. A lot of Supply Chains from various sectors have found temporary ways to overcome the challenges. While solutions have been undertaken as a measure to respond to Covid-19, the history of Supply Chain responses to events like that tend to indicate that Temporary responses have a tendency to stay Permanent. I wish if that is thought through by the Traditional next door retailer outlet. A case in point is consumer side of the Retail Supply Chain. The "Brick & Mortar" Supply Chain is back with the next door retail shop returning to be the primary (rather the only) place of buying stuff. In India, over the years while the "e" platforms or organized retail formats have been rolled out over the years, they have co-existed with the traditional retail shops. During Covid-19 situation this seems to be a blessing in disguise. The existence of the n...

As Covid - 19 impact on Supply Chain evolves, Supply Chain practitioners are figuring it out for themselves that its "Relationships" which are keeping the flow upright.The unprecedented disruption which has been caused & we are still not out of the woods as yet, has seen dramatic changes to Supply Chains.  Initial fury to stock up was followed by some sudden brakes which now is evolving into a demand pattern with some increased clarity into a more visible action plan. In all this journey of the past few months, the Supply Chain Practitioner in the industry came to grasp a reality which always stayed but was opaque for a while - It's the "Supply Chain Relationships" which will tide you over. I have been a practitioner who has been surrounded by Senior Management professionals of the industry who, over the past few years, have been crystal clear that its the "Technology" which will drive the Supply Chain of future. With AI/ML/RPA/IOT and ...

Supply Chains have experienced the Wave 1 (http://blog.think-spark.com/2020/04/wave-effect-of-covid-19-on-supply-chain.html )& Wave 2 (http://blog.think-spark.com/2020/04/wave-effect-of-covid-19-on-supply-chain_14.html) impact of Covid-19. The delayed impacts of various nodes of Supply Chains leading into next waves of impact will commence here onward. Futuristic statements dampening the negative ramification of the event probably will be vociferously communicated with balancing pessimistic outlook statements. In my opinion making any forecasts can only make astrology be a respectable profession. Hence let those be made by the people who have to live off those professions. We are in the middle of Wave 3 & Supply Chain professionals need to only model the events which have occurred so far & navigate the Supply Chain going forward. The importance of being able to connect the various events into a logical analysis will be the key for most of the Supply Chain Professi...