I interviewed Vikram Gupta who discussed Logistics Trends.
Vikram, today I’m looking forward to hearing your views on logistics trends and some specific things regarding uncertainty in logistics. My first question is: Can you explain why there is so much uncertainty across the supply chain considering that we have so many tools available?
One of the reasons why there is so much uncertainty is the business cycle. While we have so many tools available, it’s the constant dynamism of business which is causing this impact. Everybody’s aware of what is going on in the world financial market. These small impacts can really cause a lot of divisions in supply chain because what happens is, as we all know, the U.S. is not the only country providing growth. The growth is coming from emerging markets, like China, India, et cetera.
These kinds of economic cycles in the Asian market are really starting to impact the Western world. The result of that is, Okay, I had planned for X. Now, because of this, I need to plan for extremely volatile demand.. The result of that demand fluctuation is is not always easy to plan because everybody wants to make sure that the customer gets the product from their vendor the quickest. The result is, it’s always in a hyperventilated mode that, okay, you and I had a plan; let’s execute it as soon as possible.
That is what is causing, I believe, is one of the factors why, even after so many tools, it’s always in a state of flux. It’s always trying to adjust, and it’s going to grow further, I believe, because of these external factors, which not everybody has control over.
Do you have any examples that you can share?
Yes. I cannot take names of the customer because of confidentiality agreement , but, certainly, I can share customers’ examples. There are examples of retailers who always do that. We are constantly working very closely with some retailers where what happens is the demand changes and the result of that is, okay, let me pick up the phone and order (insert a quantity here). Let me order Quantity B. The result of that is: The customer is happy but what is the impact on the logistics side, the demand side, and deliver side?
Those are the key factors. Sometimes those factors may not be the key decision makers because you don’t want to lose your market share. I’ve seen that in retailers.
Can you talk about how this uncertainty can be addressed?
Yes, this uncertainty can be addressed several ways. Firstly, I think the level of ownership—particularly on the supply chain side—has to increase. Cost of deploying solutions or the cost of managing has to reduce. By that, what I mean is that, let’s say you’re doing planning for two weeks out. You need to not sit on that plan; you need to constantly adjust that plan on a daily basis.
Yes, there are a lot of tools available, and I don’t want to get into specific tools and this tool is better than that. Every tool has its own pluses and minuses, but at the end of the day, whichever tool we’re
implementing, it’s only the value and ease of solution and analyzing the result, which is critical. That, I believe, is becoming complex day by day.
There are several factors which contribute to that. If somebody starts owning this problem and trying to analyze it on a daily basis, that one will become easier to manage. What that will result into is that you will have the ability to react in a positive manner instead of in an unplanned manner. In the real world you’re taking decisions on the fly. Of course, you had intentions to manage everything perfectly and, but will not be the best able to respect those intentions always.
In summary what i wanted to tell is that the business value of logistics is becoming extremely complicated because we don't work in a constrained world where resources are in scare supply. We have a supply chain that is extremely congested. The example are available across all industry vertical starting from Oil & Gas to consumer goods too. The business problem is not about optimizing the resources as before because they are in great supply . The result is to make sure the supply chain is not running into loss is to use the over supply of resources and use it optimally so that utilization is better and the information collected is useful to take better decision for the business.
Thank you for sharing today. Can you provide a brief background of yourself?
Yes, I am a senior enterprise architect). I’ve been doing this work—supply chain consulting—for the past 15 years. One of the key—and I’ve worked across various industry vertical trying to address the core supply chain problems across all these industries to make sure these problems which I just spoke about are defined and addressed in a manner in which everybody’s happy. By that, I mean the customer is happy and the business value from a customer perspective is attained
Thanks again for sharing.
About Vikram Gupta
Enterprise Solution Architect at i2 Technologies