“The airfreight segment is very challenging as we not only handle the temperature sensitive products, which is time sensitive too, but the social obligation of carrying lifesaving drugs is much more critical. Training the team to handle cold chain shipments is also a big challenge. Ensuring no shipments are offloaded at the last minute and if at all it happens, how to maintain the cold chain is very critical. One lesson learnt during this period was vaccines moving at subzero temperature, which need Dry Ice. As Dry ice is a hazardous cargo, it is not allowed beyond a certain weight in the aircraft. This is when we started looking at PCM (Phase Change Material) as coolant. The challenges are now almost worked upon, for which the opportunities ahead are tremendous. The cold chain industry is in focus now,” informs Mr. Nihar Parida, Senior Consultant, SpiceJet Ltd., during an exclusive interview…
How would you describe the last two years in the purview of supply chain?
The pandemic has been the worst that could have happened and with many disruptions in supply chain. I feel myself lucky to be a part of a period, which taught us more about supply chain. We, in all our projections or risk managements, had never thought a disruption beyond may be a month. This pandemic taught us how things can change. Many other factors and geopolitical issues also changed the supply chain of the future. The biggest being, ‘Looking beyond China, it also gave a push for technology. I am happy that I became a part of AI and ML as a domain knowledge expert. The supply chain will be more resilient now and has pushed us to think beyond the box.
How has technology enhanced the operational efficiencies during these times with respect to supply chain?
The biggest example of this is our e-commerce industry. It showed how technology helps during these situations. Otherwise, to tell the truth, the focus of our technology was postponement of manufacturing by reading the demand better. That has fallen flat. This pandemic showed us how tight roped inventory management laid to disaster in most of the industry verticals. I agree many a company bore the loss for high inventory too. The best thing that happened due to technology during this period is, many things went online. GOI also looked at putting all stakeholders of supply chain under one platform.
As you are associated with SpiceJet, kindly share some inspiring insights that you have witnessed during the last couple of years in the context of support being offered by the airline industry in vaccine delivery.
Using Airfreight is still a crime for lot of supply chain professionals due to the cost involved. But I had always been of the idea that if you take a holistic view of the cost and faster ROI, Airfreight is not that high. We saw how Airfreight saved many lives during the pandemic by moving the tests, consumables, and vaccines to reach the corners of the world. But at the same time, it was a worst hit industry during the pandemic. We used our passenger planes for cargo movement. We were the first ones to move into Cargo-on-Seat. We also leased wide body planes with seats taken off to use it as Preighters (Passenger+Freighter).
Times when everyone was pondering what to do, we were working round the clock to get the RTPCR kits, gloves, Oxygen Concentrators, and many other, things from different parts of the globe for India. The way the team worked and coordinated with different authorities across the globe to land and take off with cargo was really very interesting. The resilience of the team (Covid Warriors) helped us in distributing the first batch of vaccines from Pune and Hyderabad.
Kindly enlighten us on the airfreight dynamics along with the challenges and the opportunities that exist in the segment.
This segment is very challenging as we not only handle the temperature sensitive products, which is time sensitive, but the social obligation of carrying lifesaving drugs is much more critical. Training the team to handle cold chain shipments is also a big challenge. Ensuring no shipments are offloaded at the last minute and if at all it happens, how to maintain the cold chain is very critical. One lesson learnt during this period was vaccines moving at subzero temperature, which need Dry Ice. As Dry ice is a hazardous cargo, it is not allowed beyond a certain weight in the aircraft. This is when we started looking at PCM (Phase Change Material) as coolant. The challenges have now been almost worked upon, for which the opportunities ahead are tremendous. The cold chain industry is in focus now. There is a huge amount of public awareness. Hence, the companies will try and use airfreight more to be within the time.
LEARNINGS TO IMBIBE
Supply Chain is vulnerable, and changes are the only constant in Supply Chain
Back to old school of holding inventory at different points and for a longer period
Adapt technology as fast as possible
The vendor relationship must improve, and the Supply Chain Partners should be inclusive
How do you view the cold chain segment taking a big leap and what are the opportunities?
Yes, it is now poised to take a huge leap. Covid has made people aware of cold chain. Government of India has realized the lack of facilities and how our healthcare has been neglected due to poor cold chain infrastructure. Today we have a wastage of 30% or more to the cold chain products. This is a highly capex intensive segment. With the government realizing the ground reality of supply chain hurdles of the largest producer of vaccine and other lifesaving products, I am sure it will take certain initiatives to ensure this vertical has proper infrastructure.
Reusable refrigerated packaging solutions are proving to be a solution for the future for minimizing the environmental impact of transporting cold chain healthcare products and reducing costs. Kindly elaborate on the new age solutions…
I have been working on this for the last few months. My realization is that this is the segment, which all of us should look at. Till now, we have been using methods, which are not validated and are not the right ways to carry our life saving drugs and reagents. Through such measures, we are spoiling the environment by using one-time packaging solutions. We can give a much better cost saving solution to our pharmaceutical companies. We can save our wastage. We can challenge the world with our pharma supply chain.
Kindly enlighten us on the recent news of SpiceJet’s customized cargo warehouse at India's first and only airport based Free Trade Warehousing Zone (FTWZ). How is it slated to transform the airfreight landscape?
Free Trade Zone is not a new concept to India. We already have few FTZs running across India. Our initiative was to create one on the airport side as all of them have been in the wet port because of the sheer volume. We, being the airline, wanted to ensure how we can take advantage of this. This is when we realized that e-commerce, pharma, aerospace, and perishables moving via airfreight, need a place like this to hold and do some value addition to their cargo. Today we are looking at creating a transshipment hub in the country along the airport. We have been losing Southeast and neighboring country cargo to Dubai or Singapore. In turn, we had been helping their freighter industry. By creating a transshipment hub, we can consolidate and offer many value additions to the Sri Lanka, Myanmar, Bangladesh, and few other countries’ cargo in India. This will not only help us but will also help our freight forwarders and packaging companies. Foreign customers can get their consolidation centers upstream in their supply chain. By remaining closer to the source, they can plan things much better and save money while changing their supply chain in short time.
Please share with us India’s potential as far as transshipment is concerned.
This is a huge subject and an old subject when it comes to India. Yes, we have been in the center for ages when it comes to logistics. But, unfortunately, the laws of our land and our attitude have never paid heed to the facts. We have a huge hinterland with great population too. But look at UAE and Singapore. These countries are surviving by being transshipment hubs. We are losing our business and our foreign exchange to these two countries mainly. Transshipment hubs are a core to any supply chain. Government of India has been talking about logistics hubs, but majorly domestic. Yes, we do need them. But our exporters and importers are looking at earning more foreign exchange. How much are we helping them? Look at the Colombo Port. It does more business than our ports because of its ease of transshipment. We have a huge scope, and we have enough ports and land to build one. We just need to define our policy well for it.
A while back, you had written a piece on ‘Where do I keep My Inventory to Reach My Customers Faster and How’. The subject holds immense importance in today’s times. Kindly share with us the right way to go about it as ‘Inventory on the Go’ is a hot topic in today’s scenario?
What I meant and I understand about ‘Inventory on the Go’ is use of AI driven data analysis to ensure when and where to keep how much inventory. Today the inventory is everywhere and, in some places, aging of certain inventory at certain places are very high while the same inventory is in short supply somewhere else. This is happening due to wrong assumptions within the inventory management team who currently work in siloes. Most of us are target driven and in our hunger to achieve targets, we forget about inventory management and most of the time give wrong projections. The market behavior to your products can be analyzed and right inventory can be predicted by AI. Even if there is a shortage of it, can be fed in by Air within 48 hours. This also can be well predicted by AI. Today most of the companies are dying because of wrong predictions, which leads to over production. I will not say low production because none of us predict low sale from the previous month. This, in turn, leads to over production, overspending and many more. Use AI to predict. If it says low sale, AI will also give you the reason. Pay heed to the reason and it will make your decision making stronger. But a word of caution here is, hire proper domain knowledge experts to tell your coders what to include in your analysis.
What’s your take on recent government policies and where do you feel the government should put more emphasis on?
Government is doing as much as possible. Things are moving in the right direction. From my side, I would like the government to look at the transshipment hub with FTZs and ensure we facilitate our logistics and packaging companies to grow together.
How can companies shield themselves from such unforeseen events, which have now become a way of life?
The best part of Supply Chain, which is close to life’s learning, is unforeseen events. You can never forecast everything but yes you can always forecast a few…
Be innovative. They say “Crisis is the mother of all innovation”
Expect the unexpected
Don’t run on a tight rope expecting cost reduction
Have good relationship with every vendor or supplier because at the time of crisis the team always work. One disgruntled vendor or supplier can ruin the whole chain
Lead the team with empathy
Be resilient by designing from your heart and owning your narrative
Embrace technology and have a better forecast
UPCOMING TRENDS IN SUPPLY CHAIN
Supply Chain Digitization will give better visibility and analysis
Embrace AI and ML to a larger extent but keep using Human Brain as a decision maker
Collaborate better and strongly with all your Supply chain partners and set the process
Focus more on resilience through visibility and better risk management