Supply Chain Fundamental Rethinking

Customer needs drive Supply Chain to design its Products & Services. Over the years, customer quality needs have become tighter and tighter. Supply Chain, particularly the Supply side of Supply Chain, has initiated control measures to meet the new standards of performance.(e.g. from "Percentage" to "Parts Per Million" was a dramatic shift) Consistency of Quality is an extremely important measurement. Consistency in outcome is predominantly a function of "Processes & Systems". In Indian organizations, particularly the SME sector, the customer organizations demand of consistent high quality it often met with Supply side being stressed to meet those expectations. An example which I bumped into the other day offered a point to reflect on this phenomenon. A few years ago, when a customer bought an agri product, e.g. Watermelon, customer expectation of the product quality predominantly hinged on the "Appearance" (Red in colour) and Taste (sweet...

Demand is the trigger for the Supply side of the Supply Chain. Supply side Strategies, Tactical plans & Operational execution activities are predominantly a function of the Demand side of the Supply Chain. The sanctity of the demand figure goes a long way in determining the performance of the Supply side. When it comes to accountability though, in many instances the Demand subordinates itself to the dynamics (or chaos!!) of the market place while Supply side is always the one which bears the brunt of not being able to meet the demand. More often than not, Supply side of the organization has experiences similar to what the Indian Healthcare system is experiencing at this very moment. I see a lot of analogies which can be leveraged to improve enterprise Supply Chains holistically. a. Demand is random but Supply is a Structure - Demand arises randomly, particularly if its a New Product. Responding to such cases the Supply side very efficiently develops new sources of supply, creates...

From a low of 20,000 in mid- February 2021 to 3,50,000 by April week 3.  Demand surge of Covid+ new cases is what Indian Healthcare Supply Chain is coping up with to keep its Patients get what they need. Demand Planning which is the trigger for the entire Supply side of the Supply Chain to organize itself to meet the market within its SLA's again has been found wanting in its (in)accuracy! And as it stands today in India, the Demand Planning accuracy seems to have been much lower than desired. A few key insights from the current stage of Covid-19 viewed from the lenses of Demand Planning, a. Never underestimate the importance of History - "This time its different" is a misnomer. Human history is of similar behaviours exhibited over multiple instances spread over different time periods. Historical data is a goldmine for Demand Planning. e.g. Relating this to Covid-19 - No time in the history of past 400 years of Pandemics (just 400 years as I did only study those 400 yea...

Buzzword which existed AND got a lot louder over the past year or so is Supply Chain Resilience . From Supply Chain Leaders to Analysts, Executives in the Boardroom to executives in the front line seem to have drilled it down to their Strategic as well as Operating environments that Supply Chain which is Resilient is not only the need of the hour but also the future. Flexibility & Responsiveness in a scenario which didn't unfold as anticipated hence the need to help the system achieve its preconceived state through various mechanisms is typically what the industry appreciates as "Supply Chain Resilience". e.g. An event like Covid-19 occurred. The systems has to be restored to its optimum as soon as it can. Enterprises which have bee able to respond to that in the most efficient manner have been said to have a "Resilient Supply Chain". In short the disruption didn't create negative value for its stakeholders.  Resilience technically means the ability of t...

Supply Chain practices in India, since the term Supply Chain was coined in 1980s', have been moulded, designed & bench-marked with the Western Supply Chain. Most of the Indian enterprises, be local or international, have evolved with the thinking process of the structure, underlying cultural needs & perspectives which have been predominantly "Non-Indigenous". Once in a life time of a country comes, what I call it as, its "Japanese moment". If grabbed then it leads to what Japan achieved post WW II to create a Global Best Practice which has been replicated for over six decades across the world using various "Names" but with similar framework. Japanese, post the trauma it went through in late 1940s & 1950's, developed a World Class Manufacturing framework, which not only made Japanese companies be World leaders but also has been a bench-mark for Worlds Class Manufacturing since then. India has its Japanese moment for Supply Chain (which i...

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...