Building a Resilient Supply Chain

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Building a Resilient Supply Chain

“Building a resilient supply chain is as important, if not more, as building and running an efficient supply chain. So far investments and efforts have been in building efficiency, with resilience at the back burner. Business costs of events like Covid and other unforeseen events in recent past, has made it clear that investing in resilient supply chain is an absolute must,” believes Rajeev Ranjan, Supply Chain & Route to Market (RTM) Consultant.

You have wide & varied experience in managing F&B supply chain. What are the peculiar complexities you have observed?

Rajeev Ranjan

The needs and wants of consumers have changed. Consumer toady is asking for speed, convenience, variety as well as flexibility. In F&B space, the customer is looking for healthy, fresh, natural, no preservative, high shelf life, organic, non-GMO, environment-friendly, farm to fork visibility and more. The challenge (and opportunity) is to provide all these at prices sustainable to organizations and affordable to consumers. Progressive organizations are reassessing and realigning supply chain and business models to meet these emerging needs of consumers in the best possible way. For organizations servicing cross-border markets of US, Europe, Asia, frequent changes and increasing stringency in regulatory requirements of different countries, especially on permitted ingredients and certifications of facilities, pose other set of complexities on supply chain.

How can companies successfully overcome these challenges and design a full-proof supply chain?

Businesses strategy outlines which brand pack of the portfolio is to be sold at what price thru which channel to which profile of consumers for what consumption occasions. Supply chains are designed to enable this price-pack-channel architecture with best in class cost to serve, delivered product quality and delightful consumer experience. Assessing suitability of existing supply chain (with respect to footprint, flow, capacities, processes, technology, and people capability) to be able to profitably and sustainably meet the above needs provides the opportunity map. Meticulous planning and effective execution of transformation initiatives laser focused on tailoring different supply chain for meeting needs of different Brand Pack Price Channel (BPPC) segments of consumers is how these challenges can be met in a robust, sustainable, and agile manner. The tailored supply chains would differ on service levels, order to delivery lead times, inventory levels, product freshness, cost to serve, extent of customization, etc.

You have got an extensive experience in managing supply chain in India and overseas. What are the major differences you have witnessed in these countries in efficiently managing supply chains?

While each geography has its own set of strengths and opportunities, I observed following differences: 

  • Upfront investment in high quality supply chain infrastructure as a cost of doing business overseas Vs a much more calibrated nuanced short period ROI driven proved investments in supply chain infrastructure and technology in India
  • Premium on deep knowledge of few specialized skills in overseas market Vs Premium on overall knowledge of a wider canvas of skillsets back home in India
  • Substantially higher focus on innovation, new product development and effort on sustainability along with a culture that encourages intelligent and bold risk taking
  • Sourcing contracts (incl few commodities) inked for reasonably long term in overseas market I had the opportunity to work for. Both parties take associated risks and honor contract terms, irrespective.
  • Robust, well-functioning reliable 3PL ecosystem with clear deliverable and symbiotic working relationships, which leads to higher adoption of 3PL services by companies. 

What are the supply chain best practices being implemented by leading South East Asian companies?

  1. Leading South East Asian (SEA) companies have figured out the secret sauce of optimally managing scale and complexity in supply chain. SKU addition to portfolio is done only till and only if it is helping in demand dis-aggregation. Well established SKU rationalization protocols are in place, which run annually.
  2. Inventory management is done by aggressively looking at all ways to reduce lead times not so much thru inventory norming.
  3. These markets are gradually shifting from demand forecasting to increased frequency of planning and faster speed of and agility in execution processes. This is achieved through frequent synchronization of demand signal with sourcing, production, distribution plans and execution.
  4. Brand owners manufacture and supply products directly from factory to retail outlets in markets like Singapore with full control on outlet relationships, order generation, merchandizing, delivery and collection, thereby sustaining healthy margins.
  5. Volume aggregation driven long-term sourcing contracts. 

How complex and difficult are the import and export scenarios?

Since a significant portion of economy in many SEA countries is dependent on cross-border movement, import & export processes and procedures are much simpler. They are online and require fewer form filling and intervention from government machinery is usually not a worry. Government machineries’ speed of action and efficiency of execution is superb and is designed to ease and speed up trade.

How can companies achieve significant cost savings on the back of an efficient supply chain?

At a strategic level, critical review of the following levers has served me well in leveraging big cost opportunities:

  • Product flow path optimization - Which factory should make which SKU and supply to which market so that total cost to serve is optimal.
  • Production and distribution footprint analysis – How many suppliers, factories, warehouses, distributors, trucks, etc., should be there, what should be their capacities and where geographically should these be located.
  • Demand segmentation and inventory right-sizing – How much inventory must be kept at each node and location in the supply chain to deliver the desired service level at the lowest cost factoring in the inherent variability at demand and supply nodes.
  • Transportation and distribution route optimization – Algorithms to minimize the cost of inbound or outbound shipments, while considering realistic cost and constraints.

However, often these levers are tough painful decisions, it requires first principle approach and significant reallocation of capital and changes in operating models.

How is technology aiding the growth of supply chain? What are the latest tech tools that are slated to dominate the segment?

Technology is helping supply chain primarily in following four areas:

  • Providing visibility across the supply chain
  • Helping execution team improve efficiency using Real-time, Actionable Data
  • Enhancing Customer Communication, improving consumer experience and
  • Simplifying Supply Chain processes by automating/reducing/optimizing number of nodes/ transactions/ players in end to end supply chain.

We have multiple supply chains tech tools today viz., no touch order processing tool, transport management systems with track & trace and shipping status alerts, control tower, dynamic routing, supply chain network design tools, warehouse management and control systems, lean inventory tools, digital factory, bid & spend tools, supplier management, integrated planning tools, collaboration portals, etc. One needs to pick the ones basis value it can add to their respective businesses.

Share your views on ‘Efficient Supply Chain and route to market design for competitive advantage’.

Route-to-Market (RTM)

  • Direct distribution, maximizing reach and numeric availability
  • Pull based replenishment of real consumption demand
  • Order generation / merchandizing to be in direct control of organization
  • Sustainable, best in class, margin to efficiency run dedicated channel partners, ensuring low attrition.

In addition to the supply chain design levers (product flow, footprint, demand segmentation, inventory rightsizing and transport optimization), which we spoke earlier, specifically for F&B supply chain, differentiation can be achieved from

1. Strong product and packaging development capability; and

2. Capability to telescopically track health, safety, and inventory of food products across all nodes of supply chain real-time and ability to execute with speed basis insights gathered from data analytics.

What is the mantra to meet high demands in peak seasons and how can companies ready their supply chains to meet the same?

Pre-building inventory in pre-season periods, factoring in the freshness of products as desired by consumers, food safety and costs, keeping inventories at one or two nodes before the last point of sale/consumption, building flexibility to move/sell inventories to multiple consumption points quickly with little or no incremental costs, smart and flexible data driven planning of consumer promotions to flatten the likely peak requirement curve, changing SKU mix while balancing market share & profitability needs, investing in flexible manufacturing lines that can make two or more category of products with different seasonality and dedicating them for respective category’s peak period demand and a process of daily/weekly/frequent gauging of real demand and synchronization of sourcing-production-shipping cycle to speedy replenishment, are some of the potential ways that come to my mind. Of course, these would need customization in specific business context. In addition, there are, at times, opportunities to collaborate with partners outside the organization with respect to uberization of manufacturing, storage, and distribution capacity.

What are the upcoming trends in supply chain in general and F&B supply chain in particular?

F&B supply chains:



  • Low to No use of three S – Sugar, Salt, Saturated fat
  • Low to no preservatives
  • Health and nutrition taking precedence over taste
  • Packaging aesthetics and convenience taking back seat over low/no harm to environment
  • Clean label with honest and complete declarations
  • More and more plant-based products and ingredients vs animal-based sources.


  • Reducing lot size of production, faster changeover times, lower losses
  • Flexible capacities capable to make multiple SKUs per line/plant
  • Increasing manufacturing complexity and customization, increasing automation and controls, shorter in-plant quarantine quantities


  • Supplier role changing from provider of a bill of material (BoM) to strategic contributor in new product formulation
  • Supplier reliability, quality and traceability will take precedence over cost/unit


  • Speed to reach destination and real time status en-route
  • No breach (of temperature, pressure, humidity, etc.) will be basic non-negotiable
  • Time stamp wise digital visibility all through delivery chain


  • Multiple in and out SKUs, lower product life cycles
  • Premium on personalization
  • Sustainable packaging

Besides these trends, the differentiating factors would be product innovation, speedy & agile execution and segmented supply chains.

What are the sustainable supply chain initiatives that we can look forward to?

Sustainable supply chain initiatives are focused on reducing energy, water and carbon intensity. This is being achieved through absolute and production-adjusted reductions in waste, water, energy, and greenhouse gas emissions. Solar panels on majority of factories and warehouses, higher % of renewables in energy mix, super-efficient lighting, reduce-reuse-recycle initiatives, non-hazardous ETP waste, higher % of electric delivery vans, recycling of returns is becoming norm. Some of the trends that I can foresee include: Gradual re-emergence of glass (lowest carbon footprint vis-à-vis PET, Tetra, can) as primary packaging, massive thin gauging of PET and Cans+lids primary containers, increasing percentage of recycled resin in Preforms, very high collection of used PET/Cans/tetra containers for recycling, biodegradable straws, bagasse based caps replacing PP caps, fully recyclable and/or compostable fiber cup solutions, primary packaging redesigned to lower/eliminate secondary packaging Ex. Tide -Eco-Box.

How do you see Supply Chain 4.0 catapulting the domain in years to come?

Undoubtedly Supply Chain 4.0 has immense potential. In short term,

1. Machine Learning (ML) based planning algorithms will help significantly understand and reduce demand supply variability, smarter changeovers, optimal lot size of manufacturing and reliable predictive shipping will reduce replenishment times, thereby helping improve inventories significantly.

2. Cross-functionally integrated Supply chain planning will become automated, granular and decisions will be based on multiple what ifs and scenarios with execution monitored and adjusted real time.

3. Track and trace, dynamic routing and uberization in transport, efficiently minimizing touch points, gaining item level visibility, faster TAT of pick-pack-ship-thru smart automation in warehousing and algorithm-led supply chain footprint and supply network redesign to meet emerging needs of customers will help chisel out costs significantly.

What are the necessary aspects that companies need to imbibe to enhance their supply chain game?

Supply chains need to be agile enough to orchestrate a profitable response to frequently changing demands, personalize offering at scale and quickly offer products & services to consumers. The challenges supply chains face today, be it ensuring food safety across end-to-end extended supply chain, plastic waste, carbon footprint, etc., cannot be solved within the four walls of company alone. In addition to leadership commitment, co-working with an ecosystem of external partners, governments, nongovernmental organizations (NGOs), academia, start-ups and solution providers is an absolute must. Solution driven boundaryless collaboration mindset is a growing need. Building a team that believe in ‘There is always a better way of doing things’ and supporting them with a culture of bold intelligent risk taking and constant introspection around are we doing enough to make our supply chain a source of competitive advantage for the business.

Are the global supply chains prepared for unforeseen disruptions? If not, then how can companies work towards the same?

Building a resilient supply chain is as important, if not more, as building and running an efficient supply chain. So far investments and efforts have been in building efficiency with resilience at the back burner. Business costs of events like Covid and other unforeseen events in recent past, has made it clear that investing in resilient supply chain is an absolute must.

Comprehensive understanding of risks (in parent organization and their suppliers’ supply chain), their significance, and their likelihood is key to start with. Decisions on which all risks one is ok to live with is a tough but an unavoidable business leadership decision. Working on multiple what ifs scenarios on each of the risks and possible ways to offset those, along with diversification in manufacturing facilities, diversification in supplier base, building capability to move production among plants by using interchangeable and generic ingredients/components and processes, flexibility in using standard packaging combinations, multi-skilling of talent, agile planning and fulfilment capabilities and a culture of distributed decision making power are directionally some of the ways we work towards building resilient supply chain while balancing cost to serve.


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