“Forethought, Planning, and Flexibility are the top three levers of a successful supply chain. Ultimately, it is the Resilient Supply Chain, which can ensure effectiveness for the sustainable period.” These were the enthralling thoughts that perfectly sum up the keynote address delivered by Lt Gen Balbir Singh Sandhu (Retd), and set the tone of the day, during our maiden Digital Supply Chain & Logistics Conclave held in New Delhi recently. Excerpts…
Earlier, the Supply chain was an outhouse function be it in the industry or the armed forces. With changing economic, social, and technological dynamics, it has occupied centerstage for mission accomplishment, both in the industry and the military. I firmly believe that something which clearly needs a critical leadership is Supply Chain. For supply chain leaders, things are never to be delivered ‘tomorrow’, they are always ‘Just-In-Time’. During my service in the Army, delivering results in time was critical because operations can only start when logistics support is in place, so one was trained to deliver it a day prior. That’s the criticality of supply chain that we need to adhere to.
Supply chain, as a function, is the key to the industry and the military operations. Today it has become a central function, going beyond operations and manufacturing. The axe of cutting costs always falls on supply chain. During the onset of Covid-19 pandemic, countries started realising that the imbalanced supply chain at one part of the country had wrecked the whole world. That’s the power of supply chain that was working in siloes for decades till now. Long back, we used to equate supply chain to transportation. While the reality is that it is part of each and every operational process, be it inward or outward movement of the product.
Technology in supply chain has been in news for many reasons as people have started demanding deliveries even before they have left the dispatch warehouse which again has brought supply chain to centerstage. This requires thorough planning at the back end while at the same time managing costs. The global economy has been transformed by the innovations in supply chain. Countries and companies who aren’t able to adapt to these changes have been either shutting their shops or are lagging behind their counterparts with a huge margin. India is being acknowledged globally as a potential global supply chain hub with the kind of measures taken by the government recently. Though we may not be getting a bigger chunk of the global pie, but we are getting a consolidated, solid value-based share of pie. If we build on that, we will achieve the goal.
CHOOSE TECH WISELY
We sometimes get obsessed with new terminologies such as AI, IoT, robotics, etc. It needs to be understood that technology is no longer an exclusive domain of the technocrats. It is as much integral to the generalist as to the technocrats. Companies need to be critical in underpinning the importance of a particular technology tool in their operational process rather than following a ‘herd’ mentality. They need to weigh in all these tech tools vis-à-vis the potential benefits they can bring for their respective organisations. Technology must be carefully chosen and integrated into your organisational goals. Using technology to deliver basic results should be the mantra for all rather than using technology to throw buzzwords.
SUSTAINABILITY
A company’s supply chain is responsible for substantial environmental impacts. Last year, CDP found that GHG emissions in a company’s supply chain are, on average, 11.4 times higher than its operational emissions. On climate change, 75% of suppliers reported their Scope 1 and 2 emissions and took actions to reduce these emissions by a total of 231 million tons CO2e. India is well on its way to enhance sustainable expanse. During the recently concluded COP27 event, India reiterated its stance towards sustainability and highlighted that the country has embarked on far-reaching new initiatives in renewable energy, e-mobility, ethanol blended fuels, and green hydrogen as an alternate energy source. At COP27, India submitted its Long-Term Low Emission Development Strategy (LT LEDS) to UNFCCC, which included plans for rapid expansion of green hydrogen production, three-fold increase in nuclear capacity by 2032, 20% ethanol blending in petrol by 2025, and more. These are highly praiseworthy goals, which need particular attention by every Indian corporate, which will eventually help the country reach these impressive goalposts sooner than later.
TOLERANCE FOR AMBIGUITY
All of us, by now, have realised that we are living in uncertain times or the VUCA (Vulnerability, Uncertainty, Complexity and Ambiguity) world. Pandemics, wars, supply chain disruptions, and even just the networked and highly inter-connected nature of the modern digital business environment suggest that predictions can never be perfect.
Tolerance for ambiguity of the military officers determines their professional potential. Tackling situations that are complicated, working effectively in unpredictable circumstances, dealing with uncertainty in a positive and constructive manner, feeling comfortable in unfamiliar situations — all of these confirm the individual’s tolerance for ambiguity, which is a major prerequisite to be qualified to be a Senior Army Officer. Let me share with you a great military insight… the so-called Acid Test of an army is during a war. A soldier blindly follows the orders of his officer – he is even prepared to lay down his life on the orders of his superior. This daring action by the soldiers signifies the leader led relationship.
In the supply chain context, as leaders, we must understand that global supply chains might be “successful”, but they are not resilient. Volatility, uncertainty, complexity, and ambiguity are real, whatever the pandemic or war. The key here is not about being better prepared; it is about thinking strategically, leading contextually, and developing the capacity to analyse possible vulnerability-and response options. It is about being resilient, not just successful.
Rather than deciding to act, we should consider acting to decide. Instead of committing to one “best” option based on available data, we should invest in the many small actions that help improve our understanding of the current situation and foster the discovery and development of all options, the possibilities, available to us.
The Covid-19 pandemic has presented to us various case studies where some highly innovative organisations were struggling to decide what to do. They froze, battened down the hatches— suspending operations and furloughing employees—hoping that the trouble would soon pass. On the other hand, there were some nimble organisations, who made small incremental changes in their operations such as fostering new relationships (new partners, suppliers, and even customers) and exploring new opportunities, developing the possibilities available to them, some of which crystalised into actualities. As a result, they were the ones who stood the test of times.
Supply chain leaders must have the ability to Think Ahead, which in the Army context, is known as Contingency Planning or in the corporate terminology – Risk Management. Contingency planning is always much longer than the strategic plans in the case of Military. The biggest principle of war is Selection and Maintenance of AIM. Companies need to keep their goals in mind and derive ways and means to attain that aim every day. We must not lose sight of our aim because of something more attractive or innovative coming our way. Remember there are no 'Runners-up in War', therefore success remains the only denominator for victory.
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