Supply Chain Fundamental Rethinking

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...