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2017

I interviewed Zeeshan Ahmed Ganatra who discussed Transportation Fleet Efficiency.

 

 

 

 

 

 

...Looking forward to discuss with you Transportation Fleet Efficiency. Before we start, can you provide a brief background of yourself?

 

Yeah. I'm sorry. This is Zeeshan [inaudible 00:00:17]. I'm currently heading the supply chain in one of the renowned [inaudible 00:00:23] Pakistan, [inaudible 00:00:24], and I have around 16+ year experience in the field of supply chain. That's [inaudible 00:00:31] production planning, [inaudible 00:00:33] planning, warehousing, transportation, procurement, and some sort of business [inaudible 00:00:39].

 

Out of this 16 years of experience, I have several different service industry and different manufacturing industry in which the banking system such as Citibank [inaudible 00:00:50] the hospitalization such as [inaudible 00:00:53] hospital. I entered the manufacturing [inaudible 00:00:56] one of the [inaudible 00:00:59] Pakistan. And then I served for a multinational company called [inaudible 00:01:05]. They're also, you can say, a market leader in [inaudible 00:01:10] business in Pakistan. And then add several [inaudible 00:01:14] head of logistics who's basically the top brand of cooking oil in the Pakistan market.

 

Currently I'm head of supply chain in one of the leading companies in the field of ketchup and juices and pickles, [inaudible 00:01:32]. I'm the head of supply chain. This is what [inaudible 00:01:35] as far as the experience and consent. Apart from this, I'm also associated with different academic institutions such as [inaudible 00:01:44], such as universities such as [inaudible 00:01:46] for supply chain management related courses. So this is what [inaudible 00:01:51] production is.

 

What is Transportation Fleet Efficiency?

 

Transportation fleet efficiency, especially in Pakistan, it matters a lot. Why? Because in Pakistan, the transportation costs is going high due to [inaudible 00:02:11], due to fuel [inaudible 00:02:14], due to different situations. Because in Pakistan, there's a huge supply and demand gap as well, because the demands of the transportation [inaudible 00:02:24] is much high, and the supply [inaudible 00:02:27] is much low. So the cost per trip is very high. That's why if you are not focusing on the efficiency of the trip, you will lose the money in terms of transportation.

 

Usually the transportation costs in [inaudible 00:02:42] sector or even in the agriculture sectors around 1.5% to 2% of the sales in terms of sales. So the transportation efficiency matters a lot of Pakistan because if you're not focused on transportation efficiency, you lose the money and not only do you lose the money, but you lose the customer's service level as well. Because you will not bring the material timely, and you will have chances of losing the [inaudible 00:03:08]. So that's why the transportation efficiency is very important in this arena or in the area of, you could say, in Pakistan.

 

As far as how to drive the efficiencies concern, there are lots of tools and gadgets, and you can see a technique required where people are following, adopting, in Pakistan to get out of efficient output of the transportation fleet.

 

Can you talk about where you've seen some good results?

 

Yeah. If I talk about cooking oil industry, even in ketchup industry, we have seen different [inaudible 00:03:46] by doing different things. One way, when I'm trying to tell you [inaudible 00:03:49]. But number one, we have entire tracking system. You can see it from the [inaudible 00:03:56] or the fleet. The fleet comes in and out of facility, inside the factory, so the time we issue the token system and the time start inside.

 

And there is the time tracking as well. Then there is the loading time tracking. And after the loading time, then documentation and dispatch time and then traffic time. You can say from one place to another place such as like the cities Karachi and then other cities Lahore, so what is the traffic time in between. And then the trans fleet reached over there in Lahore, so what will the loading time and [inaudible 00:04:31] time. So the entire tracking system with the, you could see a benchmark hours are mentioned.

 

[inaudible 00:04:40] from that particular benchmark hours what we decided for the loading time, for the target time, for the unloading time, so that the manager of operations who is looking after the transportation fleet directly, which [inaudible 00:04:55] his KPI.

 

So he start driving before that but there is something [inaudible 00:05:01]. So the entire channel, the entire movement of the [inaudible 00:05:04] will be monitored efficiently and [inaudible 00:05:08] with the benchmarking system that you need to be complete [inaudible 00:05:12] in that particular [inaudible 00:05:13] and if not, then your KPI and your reward system [inaudible 00:05:17]. Number one.

 

Number two would predict that in the [inaudible 00:05:23] time efficient especially in these two particular industries, we have developed a [inaudible 00:05:27] called double decker. Double decker means that we don't want to compromise [inaudible 00:05:32] of the cartons because [inaudible 00:05:35] quality and QMS system. So we introduced the double decker system in which the containers are modified. And we have two [inaudible 00:05:45] partition or you can [inaudible 00:05:46] on the ground floor we put some [inaudible 00:05:50] and after [inaudible 00:05:51] the [inaudible 00:05:53] we put wooden planks on that particular container. And then [inaudible 00:06:02] first floor of [inaudible 00:06:04] side of the container. So by doing this, we get efficiency of the space of the container because the movement is really costly. So we save the space even my not compromising the quality. Number two.

 

Number three is basically unloading time which is a gray area because in some of the [inaudible 00:06:23] when you are feeding to the unit. You can see a [inaudible 00:06:27] or [inaudible 00:06:29] because of the [inaudible 00:06:32] of external customers are not even in tight control in Pakistan. They are not so much professional. They are not so well established. Even then we have assigned the task that you to unload this vehicle if [inaudible 00:06:49] this time if you have the moderate or medium [inaudible 00:06:53], then you have this time, and you have the large weight and then you have this time of unloading.

 

So the way [inaudible 00:06:59] performance is also along with this that if you [inaudible 00:07:02] you're certain [inaudible 00:07:04] point system and reviews. And at the end of the fiscal year, your reward system will be according.

 

So the [inaudible 00:07:11] efficiency you can see [inaudible 00:07:14] Pakistan due to the high cost and due to the [inaudible 00:07:17] of the [inaudible 00:07:18]. So that's why people are doing the same.

 

The number four thing is basically that dedicated system. Because in Pakistan, there is different types of contracts. The number one is dedicated system, the number one. Number two is on-call system. And the number three is by having your own [inaudible 00:07:34]. But the dedicated [inaudible 00:07:35] system is that are assign the task order that this [inaudible 00:07:38] is assigned to us, and we will totally use this [inaudible 00:07:41] by doing efficiency, and we will get maximum [inaudible 00:07:44], and if we'll get maximum [inaudible 00:07:45], we'll give the rewards to the company and the driver as well. So by giving those reward system and by giving the benchmarking system of travel time and loading, unloading time, we are somehow managing efficiency.

 

And thank you for sharing today.

 

Yeah.

 

 

About Zeeshan Ahmed Ganatra

 

 

 

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Zeeshan Ahmed Ganatra

 

Executive Director at Tmh Enterprise

 

LinkedIn Profile

I interviewed Jerry Bendiner who discussed Solving Supply Chain Problems with Planning and Optimization Tools.

 

 

 

 

 

 

...Looking forward to discussing with you Solving Supply Chain Problems with Planning and Optimization Tools. Before we start, can you provide a brief background of yourself and your company?

 

Sure. Good morning, Dustin.

 

Technologix is based in Toronto, Canada. We also have offices in Mexico, Colombia, and Argentina. We've been developing planning and optimization solutions for over 25 years, since the early 1990s. I am one of the founding partners in the firm, and it is a relatively small and very stable organization.  We are basically a boutique firm that specializes in helping people solve problems that are too complex or too specific for out-of-the-box software solutions.

 

That is our strength - developing tailored solutions that focus on complex and unique planning and optimization problems.  

 

Thanks. Can you explain a bit more about what type of supply chain problems fall under your planning and optimization umbrella?

 

Sure - Planning and optimization tools focus on suggesting ways to utilize resources more efficiently or effectively.  So we model and optimize any supply chain headache or problem that is aiming to optimize the use of limited resources such as equipment, space, people, time, inventory, transportation units, capacity, or a combination of them. 

 

We have worked on a very wide range of topics, such as very strategic supply chain network designs, tactical planning and S&OP solutions and day-to-day operational issues, such as the routing of cargo vessels and the optimization of plant to depots replenishment processes.

 

The topics may vary quite a bit, but the common denominator to all of them is the challenge to find a way to utilize resources better and cost effectively. 

 

So you mentioned that one of your clients has been running your system for 25 years. What are the keys to success of a supply chain planning and optimization system?

 

Good question.

 

The client is a chemical company in Canada. They're one of the larger suppliers and distributors of sulfuric acid in North America. Back in 1991 we implemented one of our first supply chain optimization solutions using Opti-netTM, our supply chain planning and optimization development platform. They're still running the application, in it's 8th or 9th generation.

 

If I use them as a good example, I see three key success factors.

 

The first one is the ability of the tool or the solution to generate good quality results, results that are valid and also cost effective. That would be number one in my mind.  If the tool is unable to produce good quality results in a consistent basis, it really won’t matter how technologically advanced the application is, how smooth the interface, how colorful the graphs, or how powerful the analytics. 

 

Number two is to make life easier, not more complicated, for its users. Going back to the first point, let's say the system generates good quality results, but the user needs 10 hours to massage and manipulate data and then build, run and analyze a new scenario. No matter how good the solution, it's not going to succeed, because the user doesn't have that much time to spend. 

 

The challenge then is not only to generate good quality results, but to do so quickly. The way to accomplish this is by “surrounding” the model that actually generates the good quality solutions with the logic and interface required so that users can build, solve and analyze scenarios quickly and effectively.

 

The third element that I think is critical in all these type of projects is the ability of the application to adapt to two types of changes – during the project and once the app is fully implemented.

 

No matter how careful you are scoping these ‘monsters’, planning optimization projects are complex, and it's unrealistic to expect your clients to know or define exactly what they're looking for upfront. So typically you will define the scope and develop the application and the end product is going to be, probably, 70% of what you originally envisioned and the remaining 30% are adjustments that are incorporated during the development and implementation — things that we missed, restrictions or rules that were misinterpreted, new graphs, new charts, etc. The tool has to allow the users to incorporate change and adapt.

 

Once the app is up and running after two, three, four, 10 years, it also has to be able to allow client organizations to incorporate changes — new rules, new restrictions, new plans, new tendencies, etc. —and do it efficiently. I relate back to the second point above - making life easier for users.

 

Generating good quality results, simplifying life and adapting to change – these are the key elements of a successful supply chain planning and optimization implementation.  There are obviously other very important factors, but to me these are the main ones.

 

And if there's one piece of advice that you could offer organizations that are considering a planning and optimization system project, what would it be?

 

Get the foundation of the building right!

 

When you are planning a new house, a new building – if the foundation is not right you will end up with problems. The same applies to these, and for that matter any type of planning and optimization system implementation. Get the foundation right – make sure the purpose and scope of the new app are well defined.  That will determine the modeling, functionality, logic and features required for the new app to succeed.

 

When an organization is interested in planning and optimization solutions, we will always recommend starting with a workshop to define scope, needs, must haves and nice to have features before exploring any technological option.

 

A few weeks ago a LinkedIn colleague posted a question in the Supply Chain Optimization group, asking for recommendations of a good supply chain optimization software package. As expected, within hours, two dozen vendors were proposing their application as being the best for A, B, C, or D reasons.  One group participant, though, had the right answer.  In fact he replied with a question, asking our colleague what he actually meant by ;supply chain optimization’, and what were the questions he was actually looking to answer with the software package he was looking for. His message was - only after you define what you want you can start looking for the right tool to help you get there. I couldn’t agree more.

 

If there is one piece of advise for organizations that are considering a planning and optimization system project it would be to take the time to get the scope right.

 

Thanks, Jerry for sharing today.

 

You're very welcome, Dustin. It was a pleasure talking to you.

 

 

 

About Jerry Bendiner

 

 

 

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Jerry Bendiner

 

Partner & Solver of Planning Puzzles @ Technologix Decision Sciences Inc.

 

LinkedIn Profile

I interviewed Jason Bloomberg who discussed A Critical Look at the Bi-modal Supply Chain.

 

 

 

 

 

 

...Bloomberg, and we're going to discuss A Critical look at the Bi-modal Supply Chain. So, Jason, can you first provide a brief background of yourself?

 

Yeah, this is Jason Bloomberg. I'm president of Intellyx, and Intellyx is an industry analyst firm focused on agile digital transformation, which means that we cover, really, any disruptive topic within the enterprise IT space, so everything, obviously, from supply chains to mainframes to cloud computing to big data. If there's disruption, then we talk about it and try to help clear up a lot of the confusion in the space.

 

Can you talk about what is the bimodal supply chain?

 

Well, let's start with a discussion of what bimodal means. Essentially, bimodal is the idea that in large organizations, you have existing, traditional IT, which follows traditional practices and traditional policies and processes and leverages existing technology assets. And we call that mode one, or slow IT. And then mode two would be what you might call fast IT. It's more agile, more devop-centric, customer-centric, much more fast moving in addressing digital priorities.

 

So bimodal, essentially, is the recognition that many organizations, especially large ones, have this situation where they have slow moving IT and fast moving IT. And then the question then is, "Well, is that a problem?" Or, "What do we do about it?"

 

So what do you see as any weaknesses inherent in the bimodal area?

 

Well, the question really is what to do about bimodal. And Gardner, the large IT analyst firm, is basically advising their customers that it's a good idea to take a bimodal approach. In particular in the supply chain area.So they're advising a bimodal supply chain strategy for their customers. So what that means is that you want to go fast and slow at the same time. Have a slow-moving group doing traditional IT that's focused on keeping the lights on, focused on efficiency, focused on stability, as well as the fast-moving group that is focused on innovation, focused on meeting customer needs.

 

But from our perspective, we think that's really bad advice, that taking a bimodal approach on purpose is really problematic. So, yes, we all recognize that the bimodal pattern exists. That's not the question. And it's also pretty clear what it is. There's slow and fast at the same time in different groups at different speeds.

 

But from our perspective, really the question is what do you need to do with the traditional IT in order to support the changing needs of the business.

 

So as customers demand increasingly rapid supply chains, as customers demand greater personalization of their products that they're getting. So how do you support a mass-personalization and how do you deal with many of the different requirements that customers have in terms of real time capabilities. They want products and services much more quickly. And so now the supply chain has to respond more quickly. The question is does it make sense to have the slow part of what you were doing stay slow.

 

From our perspective, that just doesn't make sense. What you really need to do is understand how to take that slow part of the supply chain, that is the traditional technology as well as the traditional processes and policies and properly transform that in order to support this end-to-end requirement for speed, for customer focus, and for greater competitiveness in the modern, global environment that we find ourselves in.

 

Is there anything more you can say about the implications of following the bimodal approach or problems that you can still see?

 

There are a number of different things to consider. For example, how an organization budgets. If you take the bimodal approach, then you'll have separate budgets for the slow, the mode one activities, from the faster, mode two activities. So it will be separate budgets with separate management, separate ways of making decisions. And that will adversely impact your ability to coordinate a customer-focused effort.

 

So if you're trying to coordinate, you're trying to streamline your supply chain so that from the end customer at one end receiving products, and you have the suppliers at the other end and all the moving parts in between...If you're trying to streamline that, you're trying to drive costs out of that, you're trying to make that more flexible and meet customer needs, you don't want to have separate budgets and separate siloed management structures because they're going to be competing for resources. They won't be aligned with the overall goals of the organization. So that's one of the challenges.

 

Of course, another challenge is in recruitment and retention. If you are looking to... If you're an employee and you either have a job at a company somewhere in the supply chain environment or you're looking for a job — and this might be a company you're considering — the question is which of these groups would you want to be in. And nobody wants to be in the slow group. The fast group is the exciting, interesting, modern group. The slow group is the old-fashioned group that's using older technologies. And it's very hard to recruit for that mode one. And it's hard to retain people. If you have a bimodal strategy for your supply chain organization, you're going to be losing people from the mode one because they would much rather work in an organization who is transforming their traditional IT as opposed to one that just says, "Well, we're going to keep using that old software forever, because at least we know it works."

 

Well, that's not an interesting job relative to some of these other more rapid, customer-focused, digital dem-opts, agile...all the great buzzwords right now. If you're working not an organization like this, that's where the action is. So it's very hard to recruit and retain people if you have a bimodal strategy.

 

Do you have any recommendations on how professionals can work on transforming traditional IT?

 

Yeah.It's important to realize that it's not a black or white affair. It's not that you have to choose between a) leaving everything alone and don't monkey with it, not monkeying with it, or b) we going to replace all the old stuff and move old to new. It's rarely black and white like that. If you look at your existing environment and you're talking about technology as well as your processes and policies. So all the ways that IT meets the needs of business, all the governance approaches and all of the decision-making policies and processes, all of those elements that make up a running IT organization, you have to understand that certain things need to transform and other things may not. And different things will transform at different rates. And there's different priorities for transformation.

 

So a very important rule of thumb, if itain't broke, don't fix it. Just because we're saying that you should properly transform mode one doesn't mean that all of it transforms necessarily. You may have parts of it that are working just fine, and there's just no business reason to change those things. So that's a very important rule.

 

Another rule of thumb that sort of goes hand in hand with the ain't-broke-don't-fix-it rule is the avoid-shiny-things rule. Don't just do something new because it's the hot buzzword. I mentioned some of these hot buzzwords —dev-ops and agile and digital — but don't do them just because they're hot buzzwords or the next greatest thing or whatever the new language is or the new technology. That's not a good reason to do something. You want to do it because it meets the business needs which focuses on either strategic goals of the organization, increasing market share, increasing profitability, as well as maintaining increased focus on the customer and what the customer is demanding.

 

So the customers are demanding greater diversity of technology options. They're demanding more real-time behavior from the supply chain elements of the companies that serve them. And so that is now driving transformation across the board. But it doesn't mean that everything transforms all at once or at the same pace.

 

So transformation is always difficult and it's never a single thing that you have to focus on. But the bimodal pattern is really an excess oversimplification. You're not going to have really modes at all. It's not a question of having different modes, different speeds, but rather understanding that transformation is multi-faceted. It involves many different...changing different things in different contexts, depending on the priorities of the business.

 

Thank you, Jason. Did we cover all the points you wanted to make?

 

I suppose. I mean, we could go in depth into more of them, but it depends on how much time you have, I guess.

 

I think this is good for this interview. And we could do a follow up into more depth, if you would like, in the future.

 

That sounds good. Appreciate it.

 

Thanks for sharing.

 

Thanks a lot. Happy to help.

 

 

About Jason Bloomberg

 

 

 

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Jason Bloomberg

 

President of Intellyx & Contributor to Forbes ▶ Institute Analyst at the Institute for Digital Transformation

 

LinkedIn Profile

I interviewed Ashutosh Dekhene who discussed Global Sourcing Perspectives from a Corporate Supply Chain.

 

 

 

 

 

 

It's nice to speak with you today, Ashutosh. Today we're looking forward to hearing your views on global sourcing perspectives from a corporate supply chain. Can you first provide a brief background your yourself?

 

Hey, Dustin. It is great to be talking to you. Thank you for this opportunity, and looks like we're going to have a great conversation. As background, I am a supply chain professional with roughly two decades of experience in industry and consulting. On the industry side, my experience has been with an automotive OEM, a global bank, a large industrial manufacturer, and with a 3PL where I had a regional, North American P&L responsibility.

 

In addition, I have had consulting experience with the number one global management consulting firm where I lead their supply chain factors as a junior partner. Now I work at PepsiCo as the vice president of global operations and strategic logistics.

 

What is your experience with global sourcing?

 

My experience with global sourcing, most of my career has been in broad operations with a strong emphasis in sourcing. I've had experience with direct sourcing — commodities, parts, goods — and with almost all categories of indirect sourcing—for example, travel, fleet, tem labor, IT facilities, telecom, shared services, and the like.

 

I've had roughly 15+ years of logistic sourcing and operations experience. I want to talk about that. It's related to transportation, warehousing, and in general, supply chain or logistics ID. And I've had this experience across industries and globally.

 

As part of consulting, I've lead multiple procurement transformations, focusing on overall spend overhauls to resetting procurement organizations for medium and large or even Fortune 50, Fortune 100 companies. So that's it on my background.

 

Can you talk about some of the best practices that you can share?

 

Yeah.That's a great question on best practices. This is not really a silver bullet and the practices will vary from company to company. Based on my experience in working across industries as a shipper, as a 3PL, and as a management consultant globally, I will share some practices that I believe are key, that many companies are or should be adopting right now.

 

Some of these practices may lean slightly towards logistics but the applications are just as good for all global, direct and indirect, sourcing categories. Although, as you may know, each category does have its own nuances.

 

Starting with the first practice, I would call it you don't know what you buy. It sounds really simple, for many companies struggle to get their arms around what is being bought where, by whom, and at what price. Accuracy of having the spend base line is really important. Spend visibility is paramount to good sourcing outcomes.

 

Number two is spend analytics. Is time well spent? Companies don't spend sufficient time here. It's very important to analyze where the money was spent. Did we buy what we needed? What was the demand fragmentation? How many SKUs are we buying? If I give the example of transport, how many lanes? What are the requirements of what we are buying? Do we have the right level of spend information for ocean, air, for truckload, parcel? Do we know what the supply fragmentation looks like? So how fragmented is our supply really? Again, in some cases, fragmentation may be good. So it's not always a bad thing, but it's important to understand what fragmentation is today, how fragmented are our suppliers, and why we should or should not have that level of fragmentation.

 

And most importantly, with spend, it's focusing on the 80/20. What are the key or top 80 that will move the needle? Focus there, not having an analysis paralysis situation.

 

Point number three is category, strategy, and sourcing strategy are fundamental. We need to understand the dynamics of the category we are sourcing. What drives the supply? What drives or moves the market? Who are the key players, that is, the supplies? Are they regional or are they global? What capacity is this in the market by player? How do these players operate? How does the market operate? What are the influences of demand and how does our company work with regards to that?

 

In short, we need to assess the market, the players, the market forces, and the economics, all of which should lead to a strong, well-defined category strategy. But then we can't stop at that. You've got to define what the sourcing strategies are going to be. It is about how do you go to market for [inaudible 00:06:07]. What is the frequency or the contracting cycle? In general, sometimes we see companies fix the cycle and then hitting the repeat button all the time.

 

Each category needs to have a different sourcing frequency. Right? Even within a category, frequency will need to be adjusted. And you can't have one answer for the lifetime of the category. For example, in transportation, if you believe the market is heading towards an inflation, a longer contracting cycle, maybe a two-year's contract might be the right solution. If you're suspecting or if you're expecting a deflation, then you might go with a smaller length of contract, as small as you can. Now, again, we should be not naive enough to think that the suppliers are not aware of the market. So it's always going to be a negotiation on whether or not an eight, six month contract is something that the suppliers are willing to sign. But, again, that should be the goal, is to sign as short of a contract as possible, especially if you're foreseeing a deflation.

 

Point number four is stay true to your suppliers. Bring supplies along. Always be truthful. You don't need to play games. We've seen cases where we try to fool around or fool the suppliers. It's in nobody's interest. Short terms, we may see gains. But in the long-term, it's not sustainable. It's not a healthy relationship. More importantly, we've got to collaborate with the suppliers. So ask what we can do to help them become more efficient and really work on this. Don't just do it for the namesake.

 

Now that really leads to the next one which is the fifth point, focusing on the PCO, not only on the price or the rate. The rate is only about 50 to 60% of the total cost of the product or service. Now, there's several other things that are as or more important, sometimes, than the rate alone. What is the capacity commitment we're getting for it? What's the flex capacity? What about delivery commitments?On time delivery of [inaudible 00:08:46] deliveries and pickups? Will it help simplify the processing for us? Will our other systems become more efficient because of something that a supplier is willing to bring? Will our systems be better? Will they be more integrated and therefore we save time in other collateral activities, which are taking, bringing inefficiency? So there are many things that matter. The key here is don't just look at the tip of the iceberg. Look way below.

 

Point number six is set targets in advance. Companies use, for example, rules of thumb all the time. For example, some say we try to get a 3% reduction or we are just trying to be inflation neutral. That is really not the way to go. So it's important that we say aspirational. But that we are realistic. Do we really put should-cost models to use for target setting, and if not, why? What is stopping us? And how can we get there?

 

Point number seven is negotiate hard but fairly. Arm yourself with facts and data. It is not sufficient to just ask for a 5% lower price than what the supplier has quoted you. You should know why you should deserve 5%. Why not 8.5%? Know your facts well. Arm yourself with the facts. Stand your line, but be reasonable.

 

Point number eight, use technology, lots of advances in procurement, and many in logistics procurement tools. For example, we have e-procurement, ERFX, etc., tools like this should be integrated within the base systems, the spend management systems that you have within the company. Invest the time to link e-procurement tools to, say, in transportation, the TMS, the Transportation Management System. It will only help make data gathering, data analysis easier. But not only that, it will make the sourcing process so much more efficient.The sourcing of all outcomes could also be integrated by to the TMS for improved management of all contract carriers. You could link it to an automated route guide compliance model. So the possibilities of using and deploying technologies are just endless right now. We would be really stone age if we don't really accept technology and start using it to the best of our abilities for sourcing.

 

And finally, this one point, invest in building talent. Sourcing is a tool, a global function, and globalization has made it that much more challenging. We need to build capabilities and skills in all levels of the sourcing organization. It can just be, you're just getting people from somewhere and not putting into and investing in training and building the skill set. And skill set is not just how do you go and negotiate a contract and how do you [inaudible 00:12:23]. It's understand the category, understanding the market, understand the supply [inaudible 00:12:28], building relationships with them and using the power of data and power of analytics to have more meaningful conversations with the internal and external stakeholder and then following it through, throughout the entire sourcing process.

 

So again, this is one area where companies don't invest enough. It is extremely important that we do put in the effort if we want to have a sustainable, stronger fulfillment outcome year after year.

 

Do you have any suggestions of things that should not be done such as lessons learned?

 

So you asked this question on what should companies not do, almost lessons learned. I think by and large, we covered that as part of the best practices. Best practices to follow is basically, if you follow that, then you are trying to avoid the lessons learned. But there are three or four that I'd like the highlight here.

 

Number one is stakeholder alignment is key. Never leave them behind. Make them an integral part of the sourcing process. As you get them, negotiate with them in the right way, in respecting their needs of this requirement and insure they're fully aligned on what they really need. What's this? What is a pure want?

 

You don't always need a gold-plated screw to fix a picture frame. So what do we really need, and then go and source what is absolutely needed versus what people would just like to have. So don't fall prey to the ask. Investigate further. Go deep and dig deep there.

 

The next one is manage expectations and target. Don't over commit, but don't stand back for the next year either. Get all that you can now. Don't leave money on the table. It does not help us. It does not help companies. It is not good for long-term stakeholder value creation. And it's not the right thing to do for the employer, employers that we work for.

 

And next one is see through the entire process. Procurement should not only start with contacting. There is a big push around compliance and performance management — so metrics, KPIs,having the right performance dialogs with the suppliers. Procurement should lead, not just be engaged in, such dialogs throughout the entire length of the contract.

 

And lastly, one lesson learned is in an attempt to go after maximum value now, we tend to not consider risks that are out there. Risks are everywhere. We need to protect ourselves and the business. We cannot always predict how the market is moving accurately or how the demand will shape, or if there will be a catastrophe. Now as supply chain, we have to plan for these risks. We have to factor these risks in. So it's important to kind of assess the waters. What are important? And then build some sort of a premium for those types of risks in the contracts. So you're supply chains keep running the way it's intended to be.

 

Thank you, Dustin. It was a pleasure talking to you, and I hope the listeners and readers get some information out of this. And that's it. Have a good and a successful year ahead. Thanks. Bye.

 

 

About Ashutosh Dekhne

 

 

 

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Ashutosh Dekhne

 

Vice President - Global Operations & Strategic Logistics, PepsiCo

 

 

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