With consumers growing more and more accustomed to receiving their orders the next day—or even the same day—supply chains have been more and more focused on the delivery portion of their processes. These constantly changing dynamics have made On time Delivery (OTD) a very powerful and decisive metric for any industry or organization. Analyzing OTD facilitates decision makers to evaluate the delivery performance and efficiency of the supply chain. While keeping customers happy will remain a top priority for companies, they must realize that OTD is not just about deadlines, company reputation, and maintaining successful business relations. It’s critical to understand that not meeting expectations can dramatically impact the entire business functions, including its financial stability. This necessitates accurate monitoring and optimizing processes that can lead to significant operational cost improvements. In tune with the changing times, ‘Lie’ is a pun on the act of not telling the truth as well as being in a state of rest. The panel discussion ‘From Dispatch to Delivery – Where Does the Parcel Lie?’ hosted during our Digital Supply Chain event in New Delhi, decoded the journey of a parcel through multiple modes and touchpoints and the challenges of an OTIF delivery by leveraging the right technology, utilizing data to create better experiences and improve overall efficiency. Excerpts…
What is the changing scenario of customer expectations over the last decade? What do we expect in times to come?
Mayur Chhabra, Head – Logistics & Planning, JK Cement Ltd.:
Over the last decade, there has been a huge change in the customer demand. When I started my career in the year 2002, we were all part of the shipping department in the company because our job was to ship the consignment. From then to now, there has been a huge transformation, be it evolution from the godown to a warehouse or a distribution centre.
Now we are also looking at hub & spoke model of distribution. Customers can be end-consumers, last mile, distributors, retailer, etc., and there have been changes in all these legs of the ecosystem. We are witnessing that distributors are not ready to store lot of inventory on our behalf. That’s where companies are exploring the hub & spoke model to be closer to the customers and are opening more warehouses, which is again a debatable issue. When I joined JK Cement, we were having 75 warehouses in the country and as on date, we have got 140 warehouses. The intent was to devise our competitive strategy for the market, and we realised that we need to enhance our reach in the hinterland as well and ways to reduce our turnaround time (TAT). In doing so, we registered over 18-20 terminals in country, and we use them as hubs. When you supply materials through railways, we realised that railways don’t offer us real-time updates and the updates were as delayed as 6-10 hours. We worked on a project for about six months where we tied up with the US-based firm and started using portable devices for railway tracking. We used to stick that device on the racks and used to track the shipment. But we encountered another challenge on the way that it was a battery-enabled device. When there was long shipment time of 6-10 days, the tracking would stop enroute. There was no route mapping visibility.
After this experiment, we came up with a solar device, which has been successfully empowering us with enhanced visibility along the supply chain. That’s how swift the changes have been, and we have ensured that we remain ahead of the curve.
Vikrant Tyagi, Director – Logistics, Global Supply Chain - International, Schneider Electric India Pvt Ltd.:
Customer buying behaviour has changed a lot in last decade and they are quite lean in terms of supply chain models and want lower working capital in operations. They want faster inventory turns, reliable and sustainable supply chain flows, green packaging, etc.
Shonik Goyal, President & Head – Supply Chain Management, Sheela Foam Ltd.:
Post pandemic, I believe that the customer has become impatient. Everyone wants everything as on yesterday and no one is willing to wait. Such a situation has put a lot of pressure on supply chain professionals. The good part about the government’s enabling policies is that the road infrastructure has seen a huge fillip and transformation of sorts in the recent years. There are expressways being constructed in some of the darkest corners of the country, which are aimed at reducing the distance travelled and time taken, imagine traveling from Gurgaon to Sohna a decade back. Today we have an expressway passing through the same, connecting major trade hubs. If such impressive infrastructural landscapes are being developed at a pace we are witnessing today, we can also think of having central warehouses. Second important aspect as far as customers are concerned is that today they have become more demanding in terms of getting the exact status as to where does their parcel lie. This is an extremely crucial aspect that we, as supply chain fraternity, needs to work towards. These are two very important fundamental shifts that supply chains have undergone in the last few years.
Anirban Sanyal, Sr. GM – Supply Chain & National Logistics, Century Ply:
The era of one-solution-fits-all is long gone. This is the era of customised solution, which is carefully crafted after thoroughly understanding customers’ requirements.
This is an interesting shift from earlier days. To me, there are three clear changes in customer behaviour…
a) Today’s customers are more impatient.
b) They need the delivery faster, better, and more economical.
c) For them, service quality is a given. If it is not up to the mark, the shift to another service provider will be swift. There will be customers at every price point.
Given the various customer touch points (from order enquiry to material delivery), where do you see Technology a must have and where it is good to have? Also, areas, where we don’t need Tech intervention?
Mohan Ramaswamy: I feel that tech intervention has two facets – One on the front end, which is customer facing. This needs to be least intrusive, limited to Must-Have functions and as far as possible, single touch option. For example, exemplary UX at Ordering or Checkout. The back-end options should take care of providing the customer an exclusive experience unlike any other, for example – critical visibility, settlement of issues, smart choices, etc.
Are these new technologies really delivering on-ground with respect to customer experience, planning, driving efficiency (reduce losses or returns) and visibility?
Mohan Ramaswamy: I would say a mixed bag when it comes to performance vs claim. I believe that there are three stages to any tech development:
Digitisation: Enabling the current on-paper process to digital avatar, say order processing, price discovery, end-to-end operations, in-transit visibility, etc.
Automation: Enabling automation of repetitive processes, which empowers faster and efficient operations, say indent generation, fleet and space availability, automated matching of demand and supply.
Intelligence: Enabling AI and ML in the tech development, thereby providing predictive as well as intelligent solutions, say route / load optimization, predictive ordering, and pricing, assess customer behaviour and provide solutions.
Given the above background, I do believe that most of our technological interventions are still in stage 1 and very few in stage 2. Hence, for us, to see a step change in efficiency and customer experience, is still a journey.
What are the technological interventions shaping up?
Vikrant Tyagi: Schneider Electric’s supply chain is an orchestration of multiple business functions such as procurement, manufacturing, planning, logistics, customer satisfaction and quality. All these functions coordinate within a framework of standards and processes to ensure efficiency. Although these parameters help Schneider boost its efficiency, they can also become a hindrance and inefficient if they are not regularly tuned to optimal values.
Digitization provides the answer to building a customer centric supply chain. All are looking for efficiency, productivity, and quality. Unless operating processes are connected, systems and tools cannot truly support the needs of customers or the business. Connection allows us to control, monitor, and optimize every part of the process. It creates the desired end-to-end view, which can be visualized at control towers located at key points around the world, to provide on-site, real-time knowledge driven by data analytics. Such connectivity creates the ability to make better sense and predict demand with customers, triggering a reaction along the links and activating frontline teams to address needs more efficiently. Together, connectivity and artificial intelligence can eliminate downtime by continually running tests to improve performance, detect issues and create diagnosis before outages occur. This enables predictive and preventative maintenance. Thanks to digitization, suppliers can be fully integrated into an ‘extended supply chain’, encouraging transparency and traceability. Digitization becomes a foundation for circularity. It opens manufacturing to all shareholders and changes the relationship between suppliers.
Globally, Schneider’s supply chain includes numerous business functions, more than 35 enterprise resource planning (ERP) applications, more than 1,000 master data parameters and 150,000 order lines per day. It relies on hundreds of performance-related data parameters. In tune to changing times, we recently deployed a ‘self-healing’ supply chain platform, which is driven by adaptive machine learning (ML) to optimize performance-related parameters, such as safety stock quantity, minimum order quantities and lead times on a real-time basis. The self healing digital supply chain platform uses adaptive ML, big data, the Internet of Things (IoT) and other digital tools to help performance parameters adapt to changing business environments and maintain optimum supply chain performance autonomously, in real time.
For instance, the safety stock quantity parameter was traditionally updated quarterly and didn’t reflect changing sales and supply trends constantly. With the new adaptive platform, sales, purchase and forecast data are taken from ERPs, where distributions are analysed by ML algorithms, and optimum safety stocks are recommended at the distribution center and SKU level in near real time.
The customers today are fussy about the tracking of their shipment. Transporters in India have a robust network and are offering the track & trace facility to their clients.
Every year we do almost 250000 deliveries to our customers. Every delivery is followed by a customer delivery survey based on 6-7 key parameters. We are evaluating our performance on monthly basis and analysing these scores to improvise further. These are customer feedback survey, which help us to improve our time to market, packaging quality, product quality, professionalism of carrier, etc.
What are the advancements shaping up in planning?
Shonik Goyal: Planning is the fulcrum of supply chain. Gone are the days when we used to perform monthly S&OP exercise. Today it has become a weekly affair. The centralised planning team needs to be agile because today inventory is treated as the cost centre. Inventory has to be lean. We used to get lot of various mattress sizes orders in the morning, we would produce them by the evening and ship them out. The very next day, the customer gets the delivery.
The problem lies in the customised mattresses. Extrapolating that demand pattern is the key in our business. You need to work on your strengths and your customers’ needs and not run behind implementing new age technology tools, which might be of no use to your business. In the mattress industry, an inch of a difference makes the product redundant for the customers and for us as well because we can’t sell a customised product to anyone. Additionally, a wrong product dispatch would result in loss of trust among customers and brand equity too.
Can you elaborate on the tech puzzle in NLP?
Shonik Goyal: While I feel that the launch of NLP has been delayed by two years, which may be due to the onset of Covid-19 pandemic, things are falling in place one after another, be it fast-paced infrastructure development, advancements in warehousing, multimodal parks, dedicated freight corridors, ULIP, technology upgradation, and the list will go on. With the government putting an impetus on technology, it’s bound to grow by leaps & bounds. History is being created in our country today and I am proud to be living this moment as a supply chain professional.
What challenges do you see in mass adoption of new age technologies across industries?
Shonik Goyal: I believe the aspects mentioned below are some of the challenges that come on the way of mass adoption of new age technologies:
Lack of organizational change management strategy
Lack of required expertise
Ever changing customer needs
Internal resistance to change as people are comfortable with legacy ad hoc ways
Security concerns given that data infiltration / leakages / spyware attacks are becoming more and more common with each passing day
Budget constraints as profitability is becoming a major concern given the overall high inflation environment.
Anirban Sanyal: The game of cost and service always plays a major role. Every industry’s needs are different, and one can’t replicate the successful model of other industry without customizing to its own specific requirements. This will also lead to unwarranted cost escalations. We met around top 400 customers as part of Voice of Customers initiative and asked them their specific requirements. Once we have the exact understanding about the customers’ expectations, basis that we need to work towards the service level and the technological solution that would help us enable the same. We need to differentiate between a ‘Good to Have’ or a ‘Must Have’ technology and implement the same to bring in value proposition. In the rat race of implementing the fancy technology tools, we end up investing in multiple technology solutions, only to realise later that not all were the right fit for the business.
Besides Technology, what are the other tectonic changes that will shift the way we do business in Dispatch to Delivery?
Mayur Chhabra: I think while technology is an important ingredient, but at the same time technology needs trained manpower as well. Additionally, there are certain things, which can’t be left alone to technology part only, hence the success of the organisation will also be dependent on the trained / highly skilled resources. At the same time, organisations should also ensure regular training of the manpower to have a competitive edge over the competitors.
Vikrant Tyagi: Organisations that lay the foundation for a data driven, technology – enabled, scalable and sustainable supply chain are the ones that will reap the most impressive returns in coming years.
Shonik Goyal: Infrastructure development especially highway is the biggest tectonic change that will shift the way we do business in Dispatch to Delivery. The Highway Network is undergoing a paradigm shift across the country through initiatives like GatiShakti & Bharatmala and that is not only reducing the overall distance but also optimizing the overall TAT for each and every shipment to reach the customer. Moreover, lot of airports are getting equipped with handling the cargo shipments, which is helping in making the overall supply chain nimble footed.
New ports are also changing the way we operate. Dedicated freight corridors (DFCs) are also going to optimize the cost and improve the speed from Dispatch to Delivery. The total capacity of Indian ports has increased significantly, and the average turn-around time of container vessels has come down from 44 hours to 26 hours.
Mohan Ramaswamy: I feel the investment in infrastructure, energy efficiency, compliance and taxation environment, human capital will play a great role in the way we do business in logistics. We, as logistics actors, need to leverage the following ‘Capital’ to grow exponentially.
Working Capital: Leverage various fintech opportunities, e-currency opportunities.
Human Capital: Leverage India’s democratic dividend intelligently and with compassion to take logistics industry to next level. While automation is key to run efficiently, we need to identify processes, where human intervention is indispensable and develop skilled labour for the same.
Political Capital: Today, government is extending its arm to Industry like never before. We should leverage all the available government resources (Infrastructure, ULIP, ONDC, etc.) to deliver more, better and economically.
It will provide the impetus to government to invest more.
How do you see D2C model developing to drive customer experience? What would be role of Technology in D2C?
Mayur Chhabra: Direct to Customer (D2C) model of supply chain is going to be the future because with the everincreasing expectations from customers, brand loyalty taking back seat and a strong hunch to try new products will require a robust D2C model of value chain. Technology will be a big enabler to augment overall SCM capabilities as one can’t even think of dealing with heavy order book without technology. Additionally, the warehouse needs to be enabled accordingly for put-away & picking to ensure First Time Right approach.
Shonik Goyal: D2C is super critical and is going to be the way of life. The pandemic has been a gamechanger for the consumer behaviour. People just don’t want to buy from the market and carry the product home. Rather Direct to Consumer Delivery is the way of life. Technology can play a significant role in enhancing the consumer experience in terms of giving regular updates through SMS. Customer should be allowed to track his shipment end-to-end. Even preferred time of delivery can be mapped customer-wise through Artificial intelligence. And above all, customer feedback should be captured so that continuous improvement keeps happening.
What are the things that logistics service providers should do to stay focused on the journey and to remain upskilled? What should be the 3 areas that they should focus on?
Mayur Chhabra: ADAPTABILITY is the key to success, one can’t even think of survival unless being acclimatized to the surroundings, therefore the 3PL partners need to keep sharpening the saw and should keep moulding themselves as per the industry needs & trends. There should not be any legacy or baggage system as any hindrance to change can lead the road to complete failure. For me, the top three areas to focus upon are:
Adapt to the changing needs of the organisation;
Focus on regular training of the staff as per the new value chain ecosystem;
Focus on creating new value propositions for the organisation.
Vikrant Tyagi: Barring top 5-10 LSPs in the domain, there are umpteen number of players in the unorganised space who have to start taking the digital route to stay relevant. They need to work on upskilling their employees. They must keep pace with the developments shaping up in the country. otherwise, it will be a challenge for survival.
Shonik Goyal: LSPs need to innovate. The LSPs should be able to enable efficiency building for us, which involves route planning. It’s the right time for all the service providers to deep dive into their customers’ evolving expectations from them. The more efficiency they bring to the table, lot of cost pressures will get neutralized.
Anirban Sanyal: Providing superior service at a reasonable cost is a key criterion that LSPs need to work upon to stay relevant, competent in this highly dynamic environ. They need to have the risk-taking appetite to serve their customers. They should take care of three elements rather than be only operational / manpower service provider…
Bring cost effective solution to offer better service at lesser cost;
Give the true benefit of shared service rather than charge each customer full and try to have maximum benefit in their side;
Be a proactive solution provider and show flexibility rather being only reactive and showing cost for each change being requested for.
Delivery Modes – Are we seeing a change from single mode to multimode operations? How fast or how soon, would India’s multi-modal operations mature, similar to the US/China?
Mayur Chhabra: At JK Cement, we are not just working towards delivering goods on time, but we are also trying to do it in a sustainable way. Sea route is considered as the greenest way. We have got private terminals at both our plants. From these private freight terminals, we supply these materials through multimodal and intermodal ways to various parts of the country. For instance, from my plant in Rajasthan, I load my material on railways to Mundra port. From there, it is loaded onto the vessels, which are catering to inland waterways. From there, it travels down South. It then gets offloaded from the vessels, gets loaded onto the trailers and are dispatched to our warehouses in the South. Besides we also take a collaborative approach wherein we receive materials from other companies at our docks and work on a club-route strategy. Here the companies will just need to pay terminal usage charges.
We are into arrangements with leading companies such as CONCOR, Adani, etc., where we do milk routing for railways. With the National Logistics Policy coming in and policy initiatives such as GatiShakti picking up pace, future looks promising for multimodal cargo in the country. Our vision is that by the end of 2023, our company will have 70% rail co-efficient, and we can progress towards the path of sustainability.
Shonik Goyal: I feel that with the remarkable upgradation in logistics infrastructure is going to reduce the overall TAT for the customer. Even the costing will move southwards as the freight cost gets optimised. Multimodal operations are going to enhance ease of doing business and the speed to delivery. Logistics parks are going to make sure that the product reaches the customer in good shape as multiple handling shall reduce significantly and the customer shall get a WOW Delivery experience.
Highways, Railways, Waterways and Airways – All modes are undergoing tremendous upgradation. Initiatives like Sagarmala, Bharatmala, GatiShakti, ULIP and E-Logs are going to transform the supply chain capabilities of India in the next 2–3 years and the Make In India dream and the journey of converting India into a US$5 Trillion economy shall become a reality.
Mohan Ramaswamy: The game is on for reducing the overall logistics costs in India. Going by the experiences and use cases of the US, Germany, and China, it will be very soon that India will own its multimodal network. The initial spade work has begun through identifying at least 27 multimodal logistics parks. Work has begun in a couple of them in the earnest. It would be another 3-4 years when customers, in India, will have a choice of options to choose from. Having said that the cost of multi-mode operations may still be a question mark as the road network continues to grow and it’s of a much higher quality. At the same time, the efficient commercial vehicles will always pose a challenge to other modes of transport. Today, a few of the bulk items have found a more economical modes to transport like coal and iron ore, etc. But to make a commodity modeneutral, is some distance away!
Vikrant Tyagi: Multimodal will bring efficiency into operations and speed of delivery will be fast. In short, it will be win-win situation for customers and organisations.
Anirban Sanyal: Cost effective honest transportation model is going to work in all the above-mentioned arena. Sharing and leveraging economics of scale are going to be the game changer initiatives in coming days.
Government has initiated programs like ONDC, ULIP to propagate tech intervention in Logistics at mass scale? Do you see these programs’ goodness flowing to Customers? How soon or late?
Shonik Goyal: The launch of National Logistics Policy is a revolutionary step in the field of logistics and supply Chain. All initiatives like ONDC, ULIP, DFCs and multimodal operations, etc., are going to transform the overall supply chain dynamics across the country. However, my belief is that due to pandemic, we are still two years behind and all these initiatives will take at least another 12-18 months to come to fruition and start becoming value preposition for the businesses.
Vikrant Tyagi: With the launch of NLP, we are moving in the right direction to eradicate logistical bottlenecks. With such reformative policy measures, we can expect to have matured systems in place by 2030 or even before that. Having said that, our customers’ expectations are far outreaching these paradigm shifts as well. With customers demanding deliveries in 15 minutes, as supply chain professionals, we need to come up with innovative ideas. We have lean warehousing footprint in country with just about six warehouses. At Schneider, we develop tailored SCM solutions basis customers’ behaviour or business demands, for instance, some companies need 100% deliveries together, while some prefer staggered delivery, or some require agile supplies between 1-4 hours.
Mohan Ramaswamy: Over the last one decade, Government of India has consciously put Logistics at the forefront of development. While Infra push was inevitable, GoI has stepped up the pedal on digital interventions. Having gained confidence from the success of UPI, UIDAI programs, it has ventured to structural changes in logistics through ULIP and ONDC. Both these programs are in their infancy at the moment but will be a gamechanger in the near future. I believe another 5-7 years; these programs will be impacting the logistics landscape immensely. The services being offered to customers in about 5 years’ time will be personalised, filtered from multitude of choices, priced as per reputation.
Any Advice to students who wish to pursue ‘Logistics as a specialisation’…
Mayur Chhabra: Over the last 22 years of my career in SCM, one thing which I had been advising is that GOD LIES IN DETAILING, therefore any successful SCM professional needs to have complete control on his numbers. Moreover, SCM as a function, is actually an adventurous journey, wherein there are surprises very often and hence you should have an acumen to anticipate future as much as possible & should always have a plan B for certain disruptions. As we all know that we live in a VUCA world, sharpening the saw, thereby preserving & enhancing the greatest asset one acquires is the only way to sail through seamlessly in today’s competitive environment. It is just like driving the car, one needs to keep pushing the speed pedal to gain momentum & accelerate speed, the moment acceleration is stopped, the vehicle comes to halt with a jerky motion & thereafter the vehicle needs to be restarted, similarly the moment we STOP adapting to new ways /methods as per the ecosystem around, we are bound to FAIL.
Vikrant Tyagi: Instead of minor courses, they should consider supply chain as a specialisation field. Additionally, during their internship tenure, they should work on the floor instead of going by the book theory. This would substantially help them in learning the finer nuances of supply chain and make them future ready to manage any critical supply chain project. Last year, we launched ‘Innovate to Inspire’ – a supply chain hackathon for start-ups. The hackathon was focused on finding solutions specific to the global supply chain challenges.
Future-ready platforms powered by new technologies and start-ups built on innovation are the keys to solving today’s business obstacles. The hackathon brought industry leaders and enthusiasts from across the country together to co-create innovative supply chain solutions. In line with recent advances, the supply chain industry has an immense potential to grow further, powered by new-age technologies. Through this initiative, start-ups got an opportunity to partner and collaborate with us by competing to solve industrial use cases and providing the best solutions. Alongside, we also offer e-learning courses to graduates to up their supply chain nuances to be in tune with the changing dynamics.
Shonik Goyal: Logistics and supply chain today is the heart of any manufacturing or service industry. Pandemic has taught us the importance of having a robust supply chain and nimble footed logistics network that can respond faster to the customer requirements. Today supply chain is driving the consumer demand across industries. Supply Chain is determining which products are to be produced in the factories. My belief is that, going forward, lot of CEOs are going to come from Supply Chain, Logistics and Operations background. For Students, we often follow a program ‘Campus to Corporate’, but for Logistics and Supply Chain Students it is going to be called ‘Campus to Boardroom’.
Anirban Sanyal: I truly feel that our country has a dearth of supply chain institutes. While we may see the executive programs being offered by Ivy league colleges such as IIMs, but we are yet to have a dedicated stream of supply chain in such institutes. The talent we are hiring currently is hybrid, which might be an operations or technology graduate. The industry needs hardcore supply chain graduates, which very few colleges such as NITIE are delivering. With the times we are living in currently, there’s hardly any time left for us to train the new supply chain professionals on these basics. If they get honed by b-schools on these basics, half of our jobs are done.