During Covid-19 crisis, one aspect that was noticeably clear was lack of visibility of companies’ Assets / People / Materials and Safety & Security of everyone. With more than two years into the pandemic, the organizations have learnt the lesson the hardest way, which has brought about a mindset change in the leadership globally. It is expected that by 2025, more than 50% of global product-centric companies will have implemented real-time visibility platforms across global value chains. Visibility is a (mixed) outcome of organizations’ process management capabilities, customer focused approach, and the key investment decisions that the management makes on a day-to-day basis. Our recently held webinar, ‘Next Frontier in Supply Chain Visibility’, proved to be a great eye opener for companies across the spectrum in realizing the potent benefits of Visibility and ways to empower processes & systems to bring about a systemic change. Ultimately, an agile supply chain is a supply chain of the future and to achieve this, supply chains must encompass the ability to achieve more in a shorter time, adopting new digital technologies and re-skilling / upskilling their workforce dynamically. This is where Visibility will have a greater role to play. Excerpts from the Webinar…
Pramod Gupta, Chief Financial Officer and Head – Supply Chain & IT, Arvind Fashions
"We implemented Intugine visibility solutions a while back and over a period of time, we have been able to develop a Transport Control Tower, which is now becoming a broader Logistics Control Tower. It provides visibility of inventory across a desperate set of systems and enables us to even do revenue recognition."
Are there any clear benefits if companies have visibility into their inventories, asset management and how deeper that visibility is required from financial reporting and audit controls perspective?
Pramod Gupta - Visibility is the EYE of the organization. One of the fundamental questions asked by audit Committees is ‘how do you know what risks you are carrying’. You cannot know your risks unless you have visibility. We are an inventory-based organization. In fact, most of the organizations in the world have large physical assets. Therefore, inventory visibility is one of the most important visibilities. Retailing aside, we are a design compan and not a manufacturing company. We have either got inventory or debtors. Sometimes I even call debtors as inventories, on which we have booked my profits, since your channel partners can contractually return 10-15% of inventories sold to them. Therefore, we need to have visibility not only of the inventories being carried at our stores or in transit or at warehouses. I would expand the scope of visibility even to the inventory lying at dealers’ places, their ageing, the rate of sale (what we can ROS in retailing) vs. the inventory that is being carried, etc. Therefore, I would go beyond the classical need for inventory visibility from control viewpoint, like physical control of inventory or inventory reconciliation, Goods-in-Transit control, etc. We need to expand inventory visibility function style level for business planning – in our own system as well as in the channel, in a physical location vs in transit. We must do that cutting across the system in which the inventory is lying, and even relate it to other operating parameters (like ROS), to enable forward planning.
Does it help into your management of financial reporting, and which are those levellers that you can talk about?
Pramod Gupta - Absolutely. As I said, without visibility, we cannot develop a view of inventory controls, reconciliations, GIT, leakages, ageing etc. And all of these are intrinsic parts of financial reporting. Without this, management will be in the dark for true operating performance and no auditor will allow financial results to be published. But in our case, we have taken it one step further. We have linked our systems for recognition of B2B sales to our key channel partners like online players, department stores, multibrand stores etc. with our forward GIT monitoring, with electronic POD receipts getting checked before quarterly revenue cut-offs are done. So, visibility is now absolutely intrinsic to even our quarterly revenue recognition.
Is it sandwiched between the cost and value and what would happen if tomorrow organizations started to perceive visibility as a value generator or as a separator vs. a cost centre in the competition?
Pramod Gupta - The value vs. cost has been an age-old debate in any organization. The way I look at it is that any organization incurs costs to derive a certain value. My cost is someone else’s revenue, and my revenue is someone else’s cost. Whether it’s me or someone else, we incur a cost to derive a value. Only if spend some monies but it’s not yielding a value, it’s a cost. If the cost is enabling you to drive productive outcomes, then it’s a value. For us, visibility has always been a Value Creator. Today businesses are a lot more complex. They are a lot more national and global. In such scenarios, the importance of visibility gets even higher.
Can you explain how well integrated are the digital systems in your organizations? How have they impacted the organization?
Pramod Gupta - Data resides in TMS, WMS, SAP, and so on and so forth. In our case, reverse logistics is also very important because some part of what we send to stores or even sell to channel partners, comes back. Older inventories are typically sold to online players. But theirs is a long process of inventory selection. So, we offer them the likely available inventories irrespective of where they are located, or even when in-transit. So, having visibility of these inventories at any point in time across the chain, and linking it with their acceptance status by the online partners is of paramount importance – both for sales as well customer service. This requires visibility across disparate systems. Then there is POD tracking. Then there is a matter of making sure SLAs with vendor partners, whether warehouse partners or transport partners, are monitored. Integrating so many different systems to drive desired outcomes gets very challenging. We implemented Intugine visibility solutions a while back and working with Intugine team, over a period, we have been able to develop a Transport Control Tower, which is now becoming a broader Logistics Control Tower. It provides visibility of inventory across a desperate set of systems. It enables us to even do revenue recognition. We have also been using the Transport Tower for GIT (Goodsin-Transit) reduction, for monitoring of ageing stocks, for shelf availability planning at the retail stores, digital POD mapping to enable GIT reconciliation and transporters SLA monitoring. All of this of course required lot of Change Management, brainstorming of right solution and internal problem solving to arrive at and implement such an impact driven system.
"About 6% of our GDP is stuck in inventory carrying costs. But with better visibility and better control, we can bring down this cost to less than 3%."
What do you think of Visibility?
Harshit Shrivastava - Intugine is the supply chain visibility partner of 150+ customers across 7+ industries. For us, supply chain visibility is all about knowing where your products are at all points of time. Right from its journey as raw materials which are purchased from suppliers to manufactured goods that are sold to end consumers. Supply chain visibility is an essential means of ensuring efficient supply chain management. We see it in three different phases…
First phase is Transparency. Where we build a bird’s eye view of the entire supply chain network with the use of technology. Whether it is deploying GPSenabled vehicles or using IoT devices to track ocean freight containers. Whether it is using smart sensing beacons inside yard environments or capturing what is happening at the loading and unloading locations. We collect data from acros the supply chain network, integrate with dozens of ERPs, CRMs, and WMS systems to build a single unified platform. With such transparency, you can basically act on disruptions within a matter of minutes and sometimes you can even act before those disruptions occur with predictive visibility. Once you have this visibility, the next thing to do is to Enable Intelligence. The idea is to analyze the data that we gather from supply chain visibility to keep tabs on KPIs like on-time percentage, OTIF, daily kilometres covered, route-wise performance of different transporters, and how they measure up to industry standards, etc.
Then comes the last phase, which is, Actionability. Based on all this data, we help supply chain teams make smart decisions like changing the business share of their carriers. They can improve their network design with actual data on the ground. They can plan their inventories and safety stocks in a way that saves cost and improves efficiency. Ultimately helping brands deliver a delightful customer experience and reduce their cost of doing business.
Assume that organizations have visibility into their end-to-end value chain. How should they utilize it and how would they benefit from it?
Harshit Shrivastava - We’ve already discussed how well run supply chains can help delight customers. In addition to that, visibility improves planning and execution of logistics processes across the supply chain. Today when we order food from Swiggy or Zomato, we get real-time visibility of where that rider is and when he/she is going to reach our location. This, in addition to delivering a good customer experience, helps Swiggy/Zomato manage deliveries better. Now imagine a B2B scenario where organizations and brands are moving millions of dollars of inventory. The need for visibility is even greater here when the scale of operation is much larger. So, the idea behind visibility is to deliver a Swiggylike delivery experience across the supplychain, at all nodes of the supply chain for enterprises.
For example, a distributor or a retail store can plan their commitments to their customers better if they have visibility over when the goods are going to arrive. Auto manufacturers can manage their assembly line and their production better if they have visibility of incoming components. And if they know that a certain component is going to get missed, they can arrange an alternate immediately. Even a minute’s delay can cause lakhs and crores of losses. So, one area of benefit is customer experience and then helping customers manage their operations better.
Now, talking of more tangible benefits: Interestingly in India, like a lot of us know about 6% of our GDP is stuck in inventory carrying costs. This is the inventory, which left the manufacturing facility but hasn’t reached the customers’ hand. So, this inventory carrying cost is taking up ?6 out of every ?100 that all of us spend in India. But with better visibility and better control we can bring down this cost to less than 3%. That’s a major benefit of reducing and improving the efficiency of supply chains in order of a single digit percentage in national GDP. We have seen it first-hand that when organizations enable visibility across their supply chain, within a matter of 4 – 6 months, they see 40 to 50 crores of inventory disappearing from their system and their supply chains resulting in reduced cost of doing business.
Then there are a lot of industry specific benefits such as FMCG and FMCD industries seeing OTIF metric shooting up, in retail, companies see products landing at the shelf at the right time, which helps avoid loss of sale due to stock out. It can drive up the topline by 0.5 to 1% overall. In alco-beverages, massive detention costs will come down as you improve your monitoring with real-time visibility. So, these are some of the benefits that different industries are seeing. We believe that visibility is one of the most key components to enable and unlock all other digitalization capabilities. It can help with revenue recognition; it can help with invoice discounting and proof of deliveries among others.
Beacon technology is used at Intugine Solutions. Isn’t it an overhead when you deploy thousands of devices in the operations that have periodic battery related or maintenance needs? How do you overcome this challenge with the least possible costs?
Harshit Shrivastava - This is one of the challenges that we have been solving in the last few years. There was a time when IoT devices were expensive, bulky, and consumed too much power. But today, with advancement in technology, IoT devices are compact, affordable and energy efficient.
When you talk about beacons, they are used to enable yard visibility. Basically, in a smaller area, in a warehouse or plant, when you are trying to manage and get visibility of your loading and unloading operations, right from getting inside Yard to the weighing points to loading & unloading, invoicing area, getout journey, etc., that is where we use beacons. The way we are trying to solve this problem is to keep the number of devices limited because we will have to only track those vehicles while they are inside the yard. At any point of time, there will be a maximum 50 – 60 vehicles inside the yard. All the technology is plug & play. The moment the vehicle reports at the loading point, you can just stick the magnetic beacon on the vehicle and when it goes out, you can just take out that beacon at the security gate. This plug & play operation enables you to operate with a much lesser number of IoT devices and for each shipment as you don’t have to send out the device. The batteries that we use are designed in such a way that they last for 2-3 years, and the cost is fairly low. The logistics to manage this recharging, therefore, doesn’t come into picture.
When we talk about the larger portable GPS tracker or smart locks, then you need a comprehensive device management system, which can help you manage devices, make sure that you don’t lose them, you recharge them at the right time, etc. These aspects come complementary with all the device solutions.
What are the top 2-3 things that need to be kept in the mind while selecting a supply chain visibility platform? What would you advocate to your partners?
Harshit Shrivastava - While you are evaluating supply chain visibility partners, you need to set an expectation. That expectation depends on the different modes of transportation that your organization is using, how the operations of the organizations are structured. Depending on the complexity, choosing the right fit would work. Ours is not a ‘one solution fits all’ kind of space. Most large companies will have varied tracking needs. They would be handling distributor deliveries, D2C or direct-to-retail deliveries while at the same time importing a lot of raw materials. Sometimes this movement happens across modalities. Which means they might need to track ocean or air movements in addition to land transport. Such an organization therefore needs to find a vendor that can offer tracking across modalities. Irrespective of whether your movements happen via full truck loads, part truck loads, ocean freight or rail cargo. So that what companies end up with is an end-to-end integrated visibility platform.
Another thing to keep in mind is to ensure that your vendor has the tech competence to integrate with TMS, WMS or ERP systems that you use. This will ensure that important logistics data never gets siloed. At the end, we must bring everything together because all systems should be communicating with each other. So, the idea is to evaluate the capability of the new partner in your existing environment of systems that you are using. The success of implementation is very important. Just having a platform doesn’t really work, every team should be able to work with different departments seamlessly. Transport operations teams with warehouses, plants, your other service providers. When you begin a trial with a vendor, try to evaluate if they can deliver at least 95% of visibility. These are some of the important criteria to evaluate your partners.
Where do you see the future of the new age and the government’s role in expanding the scope of these technologies?
Harshit Shrivastava - I feel we are moving towards a digital age where the government is an important partner and catalyst in bringing about this change. Over the past few months, we have been working very closely with the government. In this Budget session, members of parliament have talked about transit inventory, the importance of transparency, and how visibility can benefit the Indian logistics ecosystem. I think the government is proactively coming up with programs that are aimed at driving change. For example,the country’s toll infrastructure is being digitized, vehicle databases and driver databases have been made accessible to businesses and even the Indian Railways APIs are being leveraged to bring down logistics costs in the country.
The Unified Logistics Interface Platform (ULIP), being built by the government, will provide for efficient movement of goods through different modes. It will greatly reduce logistics cost and save time, assisting just-in-time inventory management and eliminating tedious documentation. With the help of ULIP, organizations like ours will be able to provide real-time information to all stakeholders and improve efficiency of supply chain operations.
Hitesh Arya Senior General Manager, UltraTech Cement
"Visibility has become a hygiene factor for us today. Customer demand is putting the pressure on order fulfilment and to ensure that we live up to the expectation of service levels of this order fulfilment, we need to have that visibility of information, which is required to measure the service level, optimize cost, plan our execution, and build trust & transparency in the entire system."
In your experience, for a B2B product like cement or any other product that you have handled before, how much industry has learnt a lesson in the last 2 years specifically taking Covid-19 as a catalyst whether it has really pushed organizations over the cliff to have a real integrated system in place so that you are able to manage your assets including your people and inventory from a visibility perspective?
Hitesh Arya - Last 2 years, Covid-19 has accelerated our adoption of digitization in supply chain, which clearly gives us the edge for visibility part. Today visibility has become a hygiene factor for us. Everyone required a common standard visibility across organization whether it was our internal teams or external customers/channel partners. It has become so integral part of operations today that people cannot live without that level of visibility. Customer demand is putting the pressure on order fulfilment and to ensure that we live up to the expectation of service levels of this order fulfilment we need to have that visibility of information, which is required to measure the service level, optimize cost, plan our execution, and build trust & transparency in the entire system.
In the last 2 years, we have seen accelerated adoption of digital technology, which has improved visibility drastically, which in normal scenario would have taken 4-5 years to adopt all the processes. Electronic Proof of Delivery, visibility of our assets, products, inventory, etc. which were earlier manual processes, have now been mostly digitized, and made paperless. Even all our freight bills including our invoices are now digitally signed and digital copies are submitted. There is no handing over of hard copies, so we do not require our transporters to struggle with their billing processes and our commercial team for manually checking paper proof of delivery.
There was a compulsion for faster adoption to continue business while following the Covid-19 protocols. Slowly and steadily, people found clear value in going digital and enhancing visibility, the overall payment cycle of transporters came down, their cash flow improved. We were able to take advantage of better freights. From that perspective, last 2 years have been wonderful for everyone.
Are there any basic differences in terms of the treatment that you have or in terms of the system or network setup you require at the back to manage that kind of visibility?
Hitesh Arya - In cement industry, we have both B&B and B2C logistics because we deliver cement direct to our end consumer also. There is a lot of similarity, but I would talk about the basic difference with which we manage the visibility. We have more than 50 plants across the country. There are thousands of orders, which flow to us in an hour, which gets distributed from different plants, different warehouses, etc. To manage the sheer scale, we require most of the processes to be digitized, and also that clear visibility to all the people in the supply chain whether we talk about our manufacturing counterparts, our logistics team who's dispatching through rails & road and through ships and to also our sales & Key accounts team and finally to our end consumers, which are our dealers, retailers and even the individual house owners. Connectivity and common visibility are very critical to manage such a scale.
How do you make the information available, reliable, and closer to the truth?
Hitesh Arya - Use of IoT devices will provide more reliable and transparent data because there is no manual intervention. For instance, GPS will give you real-time visibility into truck movement because no one can tamper with the GPS data. Second aspect is the selection of system because different applications have different way of capturing the data and if we select the right kind of system, which suffices the need of the data information, which is required, that will we answer most of the questions. Third part, which I would like to emphasize on is process standardization because there are so many warehouses, plants, third party vendors, transporters, handling agents, etc. Processes at each of this node and in each geography must be standardized. If there are not standard processes, no matter what data is given by IoT devices, there will be different datasets and everybody will make a different sense out of it, which will eventually lead to loss of reliability. These three aspects are extremely critical for any technology to deliver real difference. On top of this, when we get the information, the reliability and trust must be created among all the team members, all the departments, etc. The way we build trust is that when we get that information in the form of automated reports & dashboards, we don't have meetings with teams coming up with their own set of data points. We open live dashboard and discuss against those numbers only. If anyone has trust issues with the system data, they need to be resolved before the meeting. Trust will only come when everybody is working in the same direction, everybody is going to use the same standard dataset and standard processes on the ground.
What happens if most of your operations are outsourced? What is the impact on visibility in that case and how do you do that integration?
Hitesh Arya - In Cement industry, we broadly talk about two parts of outsourcing – one is the leased manufacturing setup and other is with respect to logistics and distribution network. I would again like to emphasize that our processes must be standardized across our vendors, suppliers, and partners. When we want to onboard our suppliers and partners, we also check how digital savvy are they, how comfortable are they with the digital environment because this will enable us to measure their performance in real-time from order allocation to indent management to truck placement to manufacturing of cement. All these key parameters should be available to us in real time at the click of a button. The thumb rule is to ensure process standardization and digitized processes. As we have a large scale of outsourcing, only with such digitized and standards processes, we will be able to control and review the performance on regular basis. At the same time, it will also enable us to ensure the committed service levels to our customers are met. The onboarding of vendors & suppliers must be done thoroughly with respect to digital readiness. Their working operations have to be digitally connected. There is a lot of integration required, be it integration of our supplier system, integration of our logistics system, integration of our customer interfaces, etc. When all these parts are integrated, even with an outsourced model, we will be able to deliver service and the quality at the most optimum cost.
Pankaj Kapoor - Vice President Digital, Tata Consumer Goods
"Supply chain is all about the flow. Visibility highlights the performance of keeping our promise to the consumer. If the flow is smooth, the consumer gets whatever he or she wants at the right time, right cost, in the right amount with the right quality. This then should be visible in the results."
What is your view on visibility more from digitalization and analytics perspective?
Pankaj Kapoor - For me, visibility is all about providing a complete picture. Visibility is also about equality of information availability across all stakeholders. Accessibility to accurate data is a key visibility trait which decides the quality of the decision for the business. Importance of Visibility is age old. Even Dhritarashtra had to use Sanjay during Mahabharata. Covid has catalyzed data democratization with Digital as the enabler. Since we are discussing this in the context of supply chain then visibility also helps you check the flow. For me Supply chain is all about the flow. Visibility highlights the performance of keeping our promise to the consumer. If the flow is smooth, the consumer gets whatever he or she wants at the right time, right cost, in the right amount with the right quality. This then should be visible in the results.
In the last two decades, supply chain networks have been very decentralized for various reasons. In this scenario, what level of visibility is possible for the organization – Is it siloed and is it disjointed that we need to try to make it into a centralized one?
Pankaj Kapoor - Hybrid is the way to go. Certain set of business decisions are best left to the localized centre or the partner. This balance also requires a certain level of visibility to be extended to the centre or partner. Every decision centre needs to have the right amount of data or information visible to them so that they can take a decision as per their operational boundaries that they are supposed to do and whatever they are designed to do. Data points across the Supply Chain should be stitched together, made visible to all, and should enable an impact similar to a domino effect. If one decision is taken in the right direction, the other decision centres should also move in the same direction. For me, visibility of that data, for creating decentralized and hybrid supply chains is very important.
Covid-19 has also given us an opportunity to rethink our processes. On the ground, every state had different variables influencing the localized decisions. They were all designed to enable business and safeguard the people working to deliver the promise. On the ground they were given the empowerment with certain datasets leading to a good supply. So, it's the balance, if you can get the balance right, the decentralized supply chain can unlock a lot of value potential and enable everybody with it.
While digitization helps improving the visibility, but at the same time, there are challenges getting these implemented. Can you address this?
Pankaj Kapoor - Everybody's got a different challenge while digitizing. I can share a few which would enable higher adoption provided we are able to strike a good balance.
Tool and Partner selection: Which digital tool to deploy is a positive headache companies are facing today. There are situations where you have evaluated 3 or 4 partners and you get approached by new players who bring some enhanced value added propositions. In that case, you are in a flux. Every Solution Partner has a different take on the way to solve the problem.
People Capability: People are the true drivers of change. They need to be upskilled with inhouse skill development programs on the latest elements. This will give them the confidence to identify as well as adopt new solutions.
Process Maturity: Digitization success is directly proportional to the maturity of the process to be digitized.
Fad vs need: The biggest challenge is saying NO to a digital product because everybody is in a hurry to digitize. Companies need to realize the fact that every company has a unique challenge and basis that the technology adoption for each company would also be unique & different.
How critical is to have trust and transparency with your partners to ensure visibility? Is it true that if we have trust & transparency in place, then the visibility is also guaranteed?
Pankaj Kapoor - For me, it’s a 2-way street. If I am providing visibility of my supply elements to all the third parties, they too need to provide full visibility of the stock availability at their units. This has to be enabled by Trust. Covid-19 has been a great teacher in the sense that all of us were on the same page to deliver goods to customers in the most challenging times of our lives.
Vaibhav Agarwal National Manager (Head) - Logistics and Customer Service, Britannia Industries
"Through visibility, companies can take right decisions at the right time, which ultimately saves cost and offers customer delight."
What is your thought on visibility and how important it is for your organization?
Vaibhav Agarwal - Let me start by putting it through a story… Let's assume, you're feeling hungry and suddenly you get a call from your favourite pizza store asking whether you want to order your favourite pizza. You just give consent and in next 20 minutes, you have a piping hot pizza delivered at your doorstep at the cost of ?50. How does it sound? Seems like a dream? It is possible through visibility. I am talking about three kinds of visibilities here… demand visibility, supply visibility and stock visibility. Technology, of course, is enabling this. So, the consumer was wearing a smartwatch.As soon as he started feeling hungry, the smartwatch actually picked up the signal from the changes in his body, from the reactions in his body and sent a signal to his favourite pizza store. The store received the signal and called the person immediately. By the customer’s ordering pattern, the store already knew the customer’s preference through machine learning and AI. The store person gives a couple of options from the consumer’s favourite pizza. Most probably customer will order one of them. Now as soon as, he ordered, they were sitting on minimal inventory because all the vendors also got the visibility into the system and the order that the customer has placed and immediately within no time, they were able to deliver what customer wanted. Since everyone was holding minimal inventory, there were no major supply chain cost of inventory holding.
What was saved is Cost of Capital locked in inventory, Inventory holding cost, and obsolesce cost. Since obsolesce cost is a huge cost in the food industry, all this will perhaps enable a Rs300 pizza costed the customer only Rs50. This is the power of visibility. Again, disruptions that happen at the backend is a supply chain visibility. Through visibility, companies can take right decisions at the right time, which ultimately saves cost and offers customer delight.
We all agree that visibility is critical but how do you get that visibility? What brings the data into the system?
Vaibhav Agarwal - First, I would divide the answer into two parts – first would be around generation of data itself and second is generating visibility out of that data. We all agree that 10 years back, IoT devices were really expensive. Not only they were expensive, but they were also hard to use because of their size and compatibility. But with the technology getting more and more developed, the size of the IoT, the cost and the ease of use, everything is getting more and more adaptable. A lot of companies have started adapting to these IoTs, putting sensors in the right places, getting data out of it, feeding that data in the system has become much simpler and at minimal cost.
Now after you've put in sensors at the right place. For example, we put a simple temperature sensor in a temperature controlled vehicle and that is connected to the GPS that automatically, after regular intervals, take the temperature of the vehicle and sends it back into the Cloud. The second part is how do you create visibility out of it as you have the data. Making sense out of this data is equally important as collection of data. We would have a complete clarity on what data is needed and for what, what are exceptions and decision nodes. Putting a data analytics software/team/Control tower would also not be a bad idea. This will help everyone gaining visibility of what’s happening. Simple example can be a retail shelf stock out will no longer be a sales concern, but an action point for entire organization.
What are the key challenges for supply mapping and the best ways to overcome? What are the advancements we have made in technology on this front so you can map the data, make it all inclusive into a decision-making software and then go ahead? What will happen to Job market due to this technology advancement?
Vaibhav Agarwal - I guess collecting the data and giving a visibility is one part of it and taking actionable decision on it is second part. There are a lot of software like TMS systems, WMS systems, which are now widely adopted in India. In fact, what I feel is that putting the right TMS or DMS or WMS, in your business is a far more challenging problem that we're all facing rather than saying that we need visibility or not. So, to take full benefits of visibility, we need to deploy a TMS system. Now there are a lot of companies that are offering a similar kind of solution. It is getting more and more difficult for us to pick the right fit for the company. Mapping visibility to the systems is not that challenging but selecting the right system is the challenge that at least I am facing today. This is a good problem to have. Technology is working to make my life easier.
From the job’s perspective, right now, technology is impacting the lower-level jobs of jobs, which are more mathematical / repetitive in nature. In the longer run, what technology will do is it will eliminate the lower-level jobs but will create a lot more higher level jobs. Lot of people will get into creating these technologies. There will be emergence of lot of white collar jobs as we foresee the trends shaping up.
How 5G technology is going to be a gamechanger?
Vaibhav Agarwal - 5G technology provides a far more seamless exchange of data. When we talk about visibility, we talk about large amount of data being transferred from IoTs to Cloud, from Cloud to systems, from systems to AI/ML, etc. With the betterment of exchange of data, the visibility would be seamless and therefore decisions would be taken faster. Apart from that, the Cloud computing will become very important after 5G because everything will then go to Cloud. Then there will be greater involvement of blockchains to authenticate the data. Then there would be AI and ML who would be able to take better decisions basis the filtered data. Apart from this, there would be a middleware, which will stitch together this entire data and make it a solution, which companies will be able to provide to the customers who want to use it for further enablement.
Kindly share a case study…
Vaibhav Agarwal - A lot of FMCG companies have come together with the help of CII. We are trying to take the benefit of empty miles that transporters do across the country. We have made a forum in which we are sharing our movements with the select third party. This third party will map all the movements across the country and the vehicles that are available for the reverse load. Through this exercise, the transporters will gain because it will minimize the empty miles and ultimately the economy will gain. Second, Consignee will get benefited because he will get cheaper rates by reducing empty miles back, which was also somehow getting charged to him. It’s a Win-Win situation for everyone. We are trying to achieve this through visibility. There will be realtime vehicle movement from one place to another. A portal will be developed wherein users like us can log in and put in our specific requirements. The system will match what is available so that holistically things can be synchronized.
Sanjay Desai, Co-founder & Regional Director, Humana International (S) Pte Ltd
"This is the right time for organizations to invest in people, process, technology to re-imagine their supply chain networks in an integrated manner to build visibility and sustainability in their operations."
How do you describe “visibility” in supply chain management?
Sanjay Desai - There can be many different definitions of visibility depending on who is answering this question. Some professionals call it the single most truth and facts on the ground. In simple English, visibility, essentially means, live information that allows an organization to monitor the movement of goods, information, and their assets. In more complex supply chain lingo…Visibility is the ability to track & trace individual components, subassemblies, and final products as they travel from layers of supplier to layers of manufacturer and to distributors / retailers and to final consumer.
In the current context, where supply chains are global, and they strive to excel on all parameters…has Visibility taken a back seat?
Sanjay Desai - This is a very logical thought. While supply chains have evolved in last two decades, they have become incrementally focused on Cost, JIT, LEAN. As a result, during all these years, visibility shifted its priority, has been inherently tainted and finally resulting into an elusive dream. Most organizations want to achieve everything and crunch too many goals in their operations execution, such as (Achieve customer excellence; Reduce acquisition cost; Enhance working capital deployment; Optimize asset management so and so forth), etc. It is not possible to achieve everything. This is the right time for organizations to invest in people, process, technology to reimagine their supply chain networks in an integrated manner to build visibility and sustainability in their operations.
What do you think is the challenge for Indian organizations to make their value chains much more visible than what they are today?
Sanjay Desai - India is a country of many small countries. The GDP of some of our states is higher than many countries in the world combined. We have a huge geographical area, we are 4th largest in the world in terms of number of MSMEs, we have the highest start-up organizations rate, and all this is our leverage. This leverage also brings in challenges like huge scale & variety, mixed baggage of quality & innovation, paradox in technology scale and advancement. What we need is rigorous implementation of ‘Integration from left to the right’ in our value chains across industries regardless of any traditional barriers. MSME and family organizations need to scale their game much more aggressively and embrace technology adoption in a consistent and sustainable manner. It is all about leadership!! It is a combination of years of efforts and strong mindsets to remain integrated and connected in as many small silos and structures that one can create. You cannot achieve this state of ‘connectedness’ by luck, you need to make conscious effort every time you think of developing a new process or decide to make investments in multi-echelon enterprise business architectures.
What is next frontier in supply chain development that will help organizations to increase the visibility aspect in their supply chain?
Sanjay Desai - It’s a very pertinent question given the recent happenings around the globe. Notwithstanding its calamities, the pandemic has forced organizations to act with clock speed. Companies are moving away from low-cost supply chains and towards a much more resilient and agile framework.
The next frontier that global leaders are working on is called Hyper-Automation!! It is named as the No. 1 trend in Gartner’s list of Top 10 Technology trends for year 2021-22. Hyper-automation is an amalgamation of next generation technologies like Artificial Intelligence (AI), Machine Learning (ML), Robotic Process Automation (RPA), and Advanced analytics (AA). It will leverage AI driven process models to streamline he workflow between different departments, human workforce, RPA bots and other intelligent tools to drive higher decision making integration across entire network including partners outside of the ecosystem as long as they are integrated and have a skin in the game. It will drastically increase end-toend visibility and give accurate real-time information across the entire supply chain ecosystem 24x7.
Another technology, which will ensure visibility & traceability along end-to-end supply chain with complete ownership of the end consumer, is NonFungible Token (NFT). This is the most recent development on technology front. This is being adopted aggressively by industries like fashion and luxury retail, painting /art effects to monetize value and exclusivity.
Quickly looking at another game changing technology is blockchain. It has become the subject of significant interest for its potential to overcome supply chain visibility issues. Blockchain technology can enable trusted data sharing amongst the participants while protecting business sensitive information using advanced data encryption protocols. This information can help companies find multiple ways of executing their supply chains and continue to get visibility at the transaction level in with trust and transparency in an encrypted manner.
How would you describe the negative fallouts that an organization would likely to suffer due to lack of visibility?
Sanjay Desai - What is important to understand is, organizations which do not have an integrated / connected supply chain, continue to work with siloed/ manual processes, thereby forcing themselves to work more than an organization which has certain amount of technological integration. This aspect of duplication is taken as ‘day to day operations’ for which the leaders hire resources as they are required. This mentality is so pervasive that the whole organization loses the ability to understand what they are losing since working manual and duplicating their processes becomes their order of the day. They lose the ability to step back and do the right things, which is Train People, build end-to-end processes and then use emerging technology to automate them. You need to change the needle day by day and in order to achieve that change, leaders to need to do something ‘Today for Tomorrow’.
Such organizations lose heavily on many fronts and the worst part is they do not even realize what are they loosing! They have delays, duplications, rampant loss of people due to low morale, lack of trust and transparency in their dealings. They are not able to benchmark correct performance goals, they lose customers faster than they acquire and eventually they suffer loss of revenue and slowly competition takes them over.
How successful is a Control Tower in providing the require amount of visibility across the chain?
Sanjay Desai - The Modern Control Towers are different from legacy solutions. A control tower is designed to provide real-time visibility across the supply chain. It is a centralized hub with the required processes, harnessed with proper use of technology, and supported by organizational processes needed to capture data from all stages of the supply chain live 24x7. This data ensures end-to-end visibilityand helps a business to make informed decisions those which align with its strategic objectives. By combining people, systems and processes, control towers are able to provide 360-degree supply chain visibility. The Western World adopted Control Towers technology many years back. India has been behind in terms of adoption and execution at the right level of engagement.
However, we must note that any technology solution is like ‘garbage in garbage out’ Control towers (If) built on loosely coupled legacy systems where data is locked in silos, will result in latency at the foundation resulting in bad decisions at the end. You need to scale and make progress in areas like productivity, waste, analytics, customer efficiencies, cost optimization on a consistent basis else, you will never be able to rip the full benefits of Control Tower Technology.