The Golden Sparrow

Covid era has come as a blessing in disguise for the supply chain community. When the entire country was put under the world’s most stringent lockdown for almost 70 days, it was only the supply chain that kept the wheels of the economy moving, albeit with many teething issues be it inter-state movement, non-availability of labour or various check posts on the way. The incumbent times call for a dramatic shift in the way supply chains function and gear up for the promising times ahead and prove its stance as the Golden Sparrow of the Industries, which had so far been neglected by most CEOs. This perspective segment captures intriguing voices of the user fraternity as to how did they fight the Covid pandemic and brings to you a crystal clear path to lead the growth graph…

Raviraj Rodrigues, Director Supply Chain-India, Alstom Transport India Limited

Supply Chain Managers are called upon to build systems that have two distinct capabilities viz. To be able to “Anticipate better” the future needs of the business and to “React faster” to changes in the environment. Each organization has built over a period of time Structure and Processes to manage both these capabilities though not necessarily equal. The COVID-19 pandemic and the resulting lockdowns in India and abroad brought out sharply each organization’s capability to handle the changes that came with it. The supply chains were no different and largely a manifestation of the organization’s capability to handle VUCA situations. The current situation is a unique case of VUCA, in that for the first time, we have seen a simultaneous drop in both demand and supply at the same time. The pandemic imposed VUCA played out in three parts across most organizations:

Phase 1-The Shock & Awe Phase: At Alstom, this was from Mid-January to February end. This was when news of a pandemic in China and the ensuing lockdown began to get international attention. During this time, we were unclear on what would be the long term effect of the pandemic and how it would pan out. Our efforts were largely in drawing out various scenarios and potential solutions.

Phase 2- The React Phase: Once the pandemic began to spread to Europe and our supplies in Europe got affected, we understood that this pandemic will result in mid-term disruption to our supplies. We immediately set up a War Room in the Office (which moved on to become a virtual War Room by end March) and we created two Control Towers for end to end visibility viz. Supplier Control Tower to ensure prioritize supplies from International Vendors to our four sites in India and a Logistics Control for End-to- End Visibility of shipments from our consolidation centres. We also created a Peer Network group of all Supply Chain Heads across the Alstom group to review our challenges and find solutions together. As a result, we did not have our sites shut down for a single day to non-availability of materials.

Phase 3-Build Resilience: After 2 months of Lockdown and all the challenges associated with the Lockdown, we were increasingly clear that this is a new normal and we set about revisiting our Supply Chain Structure, Processes and Controls. This is born out of the need to create an agile supply chain capable of handling similar situations in the future. In the short term, we have embarked upon initiatives like Complete Procurement Diagnostics, Review Supplier Vulnerability and building of Collaborative Inventory. Next, we will work on our Sourcing Strategy, Collaborative Planning-Forecasting & Replenishment with key partners and Virtual Co-location & Information Sharing to create planned redundancies. In the long run, we will need to drive Digitalization, Predictive Supply Planning and SMART Logistics to get a complete End to End Transparency in our Supply Chain. This is the only way we believe we can make our Supply Chains more predictive and agile at the same time. The most important contributor here would be our people. Here, our focus on building a Strong Supply Chain team across all our sites over the last 2 years has paid off and we now have an incredibly talented team ready for the future and capable of handling any challenge together.

Dr Anil Chinnabhandar, Senior Vice President – Retail Planning & Supply Chain, Landmark Group

Did we ever imagine that our lives would hit a PAUSE button the way we are experiencing right now. Retail businesses used to enjoy 30% y-o-y growth rate in the country before it nosedived to near zero in April 2020 be it online or offline. There was no respite to be seen soon as we are already 4 months into the lockdown. So how are retail companies managing such a dramatic shift in fortunes? Changed customer preferences: During the lockdown times, retailers realized that the customers’ buying intent has become refined. Their shopping preferences have changed from fashionable & stylish to casual & comfortable. Customers are asking for Retail Stores to come @ their doors. Fashion on Wheels became common, just the way we have been seeing Food on Wheels for some years. Customers are becoming wary of trials and returns, which never used to be the case earlier. We are seeing appointment-based stores in the country to disallow any crowd in the shops. The era of Window Shopping has gone is what we believe. Today it’s completely selective and refined way of shopping. It has become truly Omni Retail NOW. We are seeing the trend of WhatsApp buying, digital buying, contactless shopping as the new Norm.

What has changed for supply chain in these times? We are facing serious staffing problems when it comes to floating population or migrant laborers who are not ready to get back to their workplaces. Inventory management has become a bigger challenge with retail stores closed for more than 100 days. Additionally, we cannot buy new inventory from suppliers because of cash crunch. Online demand is surging day by day. Amid all these cost escalations need to be kept in check. We are opting for newer ways of retail to customers such as hyper local distribution, WhatsApp, Store2door, venue sales, etc. This has all been possible due to technology enablement in the shortest time to suit customer needs. In the end, it’s all about customer centricity and being close to them to understand their preferences. Customer engagement is the key. Understand your customer expectations and sell them what exactly they want. With this, I believe we will fully adjust to the NEW NORMAL and NEW OPPORTUNITIES.

Ashutosh Dhar, Director-Supply Chain, BD India

Top challenge faced by any organization in the last 5 months was to ensure business continuity amidst lockdown announcements. Warehouse closures, restricted road/rail logistics movement to containment zones across the country and no passenger flights (domestic as well international) severely restricted transportation of our products during this period. One of the great learnings and our success to manage the crisis was to have a refreshed Business Continuity Plan ready when the pandemic hit the country. We had multiple scenarios basis assumptions on lead indicators that were simulated as table-top exercises to assess the progress of pandemic and linking it to business performance for rest of the year.

Another learning during the crisis was to map the end to end supply chain i.e. from our supplier’s supplier to our customer’s customer. This was crucial to ensure that all raw material risks were mitigated for manufacturing and we made best use of the Control Tower to track and trace stocks through the entire value chain. Since most of our team members were working from home, we ensured that we connected daily through the entire period to be able to guide, support, acknowledge and thank the team during this unprecedented situation.

Sanjay Agarwal, President & Chief Procurement Officer, Hindalco Ltd.

The Covid-19 lockdown came with a complete disruption of the entire supply chain allowing no time to secure supplies. Here is story of a great challenge faced by Hindalco, that got entire team of stakeholders to align together to respond quickly, make alternative/innovative strategies and achieve one common goal of “No production loss on account of raw material or spares.” We were faced with a situation where overnight many of key suppliers had to shut down operations as they were not classified under “essential” category and were not even able to move their already stock up product. Transport came to a complete halt in the first week, as we saw state borders sealing their operations and ports unable to operate due to lack of manpower. Ground authorities in different states, borders were interpreting the rules laid out by Government in different ways. A situation of panic was emerging as all the movement from domestic and import seemed to come to a standstill along with an acute shortage of manpower.

We responded to this by deploying 4 key strategies:

• Communication, communication, communication: A fortnight before the lockdown, the team geared up by getting the resources from people to work from home and started testing the virtual meeting platform. As the crisis continued, the most important thing that emerged was ‘close communication to keep up the morale of the team. All levels were conducting communication meetings and daily meeting was chaired by MD with all plants as well. In the time of need, we reached out to all our clients and key suppliers through video calls to let them know that we are in this together.
• Focused Approach with close collaboration amongst all stakeholders: A task force comprising of Procurement, Logistics, Operations, Legal and other were put together.
• Close collaboration with suppliers and on-ground monitoring of the situation by the team helped us stay abreast of the situation and react quickly.
• Quick decision making: This came out to be the cornerstone of getting things back to normal. Exceedingly difficult but quick decisions had to be made looking at the cost vs. the criticality.
• Alternate scenario building & risk mitigation plan: As soon as the crisis was controlled and stocks brought back to at least 15 days, the focus was changed to ensure business continuity and supply resilience going forward. With this view, multiple plan alternate plans were made and executed which included ordering supplies from different geographies, onboarding multiple new suppliers.