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2017

The Future of Supply Chains

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I interviewed Christianto Widjaja who discussed Supply Chain Solutions and Optimization.

 

 

 

 

 

Today we're speaking with Christianto Widjaja, and we're going to talk about supply chain solutions and optimization. Christianto, can you first provide us with a background of yourself?

 

Sure. I have been in the supply chain industry for 16 years, originally part of the Manhattan Associates Professional Services team, and later being one of the initial team members at LogFire, just acquired by Oracle a couple of months back. Building on those experiences, my current partners and I decided to create a supply chain company that helped provide the latest automation solutions within the warehouse itself. Soon thereafter, VCO Systems was born, and now we have a supply chain optimization solution that e-commerce companies have been leveraging for awhile.

 

Can you talk about warehouse automation for ecommerce?

 

Amazon has obviously changed the supply chain industry, anunprecedented complex Supply Chain efficiency supported by state of the art Supply Chain end to end solutions to provide a better e-commerce experience for both their sellers and customers alike. They pioneered the two-day shipping standard which everybody is now trying to beat.

 

Considering the latest technology, we could provide a cost-effective ecommerce fulfillment optimization solution to help ecommerce retailers better compete. The latest technology provides very powerful hardware at an affordable cost. When we started to really peel back what was happening with two-day shipping, to make that happen, the need is to fulfill and ship out the order within the same day. Looking at the trend of optimization within the warehouse, the cost-effective technology that can be used by any type of e-commerce warehouses — either tier one, tier two, or tier three — are light solutions. We recognized this could be a form of automation that could be implemented in a very short time, and with a quick return on investment.

 

So, we set out to develop a light solution — which is not a new concept itself — that would be mobile in such a way that it could be powered by battery, and available on carts where it can be easily re-positioned or re-allocated anywhere in the warehouse on the fly. We utilize the latest technology to allow complex intelligence with a quick development time. As far as the infrastructure cost itself, it's very low because our app is working off of mobile hardware such as the Android operating system or iOS.

 

The whole concept of the light sortation that we came up with is designed to expedite order packing. With high-volume e-commerce retailers, there is a need to batch pick these multi-line orders. Then, with our light sortation, such as a putwall or putwall on cart, these items will be sorted back into individual orders and eventually packed and shipped. The results have been significant; increasing efficiency by 49%, with packing accuracy of 99.9%. All in a solution that can be implemented within six weeks.

 

There are certainly other options for optimization, for example, using a conveyor system, or possibly robotics. However, the cost and length of implementation is well beyond a light sortation system.

 

How is this done effectively in practice?

 

One of our clients is the leading children's apparel brand in the U.S., who came to us for help managing throughput of 50,000 units/day during seasonal peak. We discussed the effectiveness of batch picking and utilizing our putwall to sort items into these orders. We then came up with a very slim solution, a putwall with light that also works as a button, utilizing a booted scanner connected to a mobile iPod that cost them far less than an RF scanner. We came up with eight walls, four of them actually permanent, with the other four mobile, to meet their 50,000 unit throughput requirement.

 

Do you have any final recommendations regarding supply chain solutions and optimization?

 

From what we're seeing in the industry today, the trend has been focused on intelligence and automation. For the latter, I just described a light sortation solution. For the former, there's also what's called a warehouse execution system (WES), which provides automation on top of a warehouse management system, a labor management system (LMS), mechanical handling (MHE) and business intelligence. We provide a combined decade of experience implementing these warehouse execution systems for enterprise clients from retailers & eCommerce. WES allows our clients to operate warehouses with automation, limited system interaction & health dashboards.

 

Thank you for sharing today, Christianto.

 

My pleasure. Thanks for the opportunity.

 

 

About Christianto Widjaja

 

 

 

 

 

Christianto Widjaja

 

Managing Partner at VCO Systems

 

LinkedIn Profile

I interviewed Peter Katai who discussed Capacity Constraints as it Pertains to Brokers.

 

 

 

 

 

 

Today we'll be speaking with Peter Katai, and the topic is capacity constraints and how it pertains to brokers in this industry of brokerage. Peter, can you first provide a brief background of yourself?

 

Yes, sure.I on an about 45-million-dollar operation.We're part of a $375 millionr middle market for a brokerage headquartered out of Montreal, Quebec. We have ten offices in the U.S. and Canada.

 

First question is, What are capacity constraints, pertaining to your industry?

 

Currently, we're having capacity constrains in and around the areas of Texas and Florida strictly due to what's been happening with hurricanes in those areas, as well as -- there's been an uptick in volume in going into the third and fourth quarter after Labor Day. We're going into Christmas season; in terms of shipping.It's going to be pretty busy up until, I would say, the middle of December.

 

As of right now, due to the fact we have two hurricanes that hit two major states of the country, plus we're in the middle of the [inaudible 00:01:29] season, it's adding to a lot of uptick in volume, as well as pricing -- it's being driven up, as well, due to either fuel in the marketplace.

 

How do you address these constraints effectively?

 

We're just communicating back to the client on what's been happening with pricing, as well as, maybe, even moving some things around and giving more -- We've been asking for more leeway, either with their product, or potentially, more lead time with their products, if possible.

 

Do you have any success stories you could share, or examples of how things are done?

 

Sure. Technically, what's been happening with certain customers -- We have a truck parts customer that were shipping product out of either Arkansas or Tennessee, some of those areas, and Tennessee and the Southeast was hit by hurricane Irma. But what's been happening is we've been able to do some capacity constraints, and we've been able to push some of that pricing back out of the customer.The customers agreed to move the product.

 

They understand that these are exceptions to the rule and not normal. So what we've been able to do, is we've been able to deadhead trucks into certain areas in order to get their product in order to make sure it's been delivered on time.

 

Do you have any final recommendations on how to deal with capacity constraints?

 

Not really. The more lead time and the more flexibility that your client has, the better off you're going to be. Desperate times, I would say, call for desperate measures. And in these times -- and especially with the electronical odd devices and requirements that are coming on board here in the next -- They're going to go into effect at the middle of December.

 

We're trying to make sure the costumers are informed that there will continue to be capacity constraints [unintelligible 00:03:54] they need to drive a pricing over the long-term.

 

Peter, for sharing today.

 

Thank you.

 

 

About Peter Katai

 

 

 

 

 

Peter Katai

 

Senior Director of Branch Operations at FLS Transportation Services, Inc

 

LinkedIn Profile

I interviewed Bruno Roman who discussed Supply Chain Process.

 

 

 

 

 

Can you provide a brief background of yourself?

 

Okay. I'm in Brazil and an executive in supply chain. I have about 30 years’ experience in the supply chain area. I have been working all my life in companies which are the leader or top-tier in your segment, like [inaudible 0:00:46] tobacco for 16 years. Then I moved to a logistics company in another state here in Brazil. In fast food, like KFC in Pizza Hut in Brazil, a beverage company. Then the last company, AT&T, Sky in Brazil.

 

In all of those companies, I'm [inaudible 0:01:28] like a head of supply chain, but my focus was, every time, in the advertising area. That I considered the most important area when you talk about supply chain.

 

It's that good for you, Dustin, about my experience?

 

That's great. So my first question is what is supply chain process?

 

I can divide supply chain paralysis in four main areas. First of all, we need planning where I can include the main process, S&OP. Then we have purchasing area, of course, responsible for all needs that the company requires. Then we have a logistical area and distribution. That's my simple definition about supply chain. Of course, we're have one in each area, different characteristics of the process and of the people who are working there. But I consider supply chain the heart of the companies because supply chain is exactly in the middle of all that you need to work well in the companies in general.

 

We are connected with the sales area, financial, when you talk about S&OP, to discuss all the sales planning of the company, what are the objectives, the main targets that the company is looking for. And then you use the planning area, more specific S&OP cycle planning to define all that you need. And then you put your needs for purchasing area.

 

I consider purchasing the most intelligent area for the supply chain, the companies. When you talk about your raw material or investments, when you need to apply the best of strategic resourcing, [inaudible 0:04:44] to do the best sourcing. And when you need to save other money that the companies spend...

 

For example, the last company where I worked, we had more than $1.5 billion dollars a year as [inaudible 0:05:08]. And my team used to save something around $100 million dollars a year. It's impacted directly in the result of the company in the yields that you send for the stakeholders. So that's the reason what your consider the supply chain area the heart of the companies.

 

Can you share your experience with supply chain process?

 

For example, I will talk about the cycle planning in Sky. Sky, the first most became Direct TV in the US, but as you know, was bought by AT&T, and you have a cycle with five meetings per month to define how we will supply the company based on the [inaudible 0:06:47] of the sales department. So of course, we have our year targets. So you have a month to sell, and their sales area told you that we will sell 100,000 new clients. So what do you need to turn on 100,000 clients in our base? And then, of course, you explode the S&OP planning for all the mtls using, of course, the ABC curve. And I think we discussed in the [inaudible 0:07:52] of the president of the company directors and myself, of course, and B and C are things in the [inaudible 0:08:04] operational team. But everyone has a method to have the best supply with the best price. That's [inaudible 0:08:24] the last company. It was very difficult because a company like Sky, it's a service company, not an industry. In an industry, it's a little bit easier because you have your raw mtl and packaging, and it's much more easy then with a service. But we can apply the concepts, the best practice, and do a good job, of course. That's it.

 

Can you talk a little bit about how to implement, to put this into practice?

 

Well, in using Sky, again — I keep using Sky as an example — we implement all the processes when I started there in 2011. On that occasion, we had only methodology to support the AI things in the curve. They basically have no treatment for the B & C [inaudible 0:10:19] things. I was in charge to create in the purchasing area much more strategy than operational. And of course putting intelligence in the area, not only simple buyers to make a purchase, and nothing more, nothing intelligent in that area, completely automatic using SAP system to support all the intelligence of the company.

 

I used to make this implementation during the first two years of the company to achieve the high level of the intelligence and strategy. I made deals with great success.

 

Thanks, Bruno, for sharing today.

 

Thank you.

 

 

About Bruno Roman

 

 

 

 

Bruno Roman

 

Senior Supply Chain Executive | Compras | Logística | Planejamento | Distribuição

 

LinkedIn Profile

I interviewed Ruy Martins who discussed Supply Chain Risk Management.

 

 

 

 

 

 

Can you provide a brief background of yourself?

 

So nice to talk to you, Dustin.It's a pleasure for me. I'm a professional with 20 years of experience in management and executive positions in big companies in Europe, Brazil, and the U.S. Also, I work with training, and I'm a consultant trainer and training manager for some big German consulting companies.

 

My first question regarding risk management, can you talk about what is the usual process of risk assessment?

 

Sure.Thinking about the timeline, first, usually, we start with planning the role, supplies that we have. So classifying those suppliers and regular suppliers, preferred suppliers, and also departments. So doing that, we can prioritize better the way we are going to organize their assessments. And another important point in the planning phase is create the risk assessment team, to organize a team, and to have people with different abilities, with different skills, to add value to the process.

 

After that, after having the map of the work, a very important point is when you're going to start, or what is the trigger for the process to start. So one important point is that we can have a regular schedule for their assessment for sure, but you can also have a trigger, like a natural disaster or an environmental issue, poor performance of the supply, but also a natural issue. So for [inaudible 0:02:33] for example, I made this process in India. We left it there for one month, evaluating Indian companies, and it was very important to first, for sure... By the way, the supply chain [inaudible 0:02:53] of the risk. So possibilities of shortage and the tier one and the tier two or three. And the possibilities that we can have some stops in our production line regarded to that, related to shortage of raw materials for the supply and so on.

 

Another very important aspect of the risk assessment is they also evaluate the financial stability, the actual points of the level of [inaudible 0:03:31] that they have, those kinds of things. The environmental points and how is the satisfaction of [inaudible 0:03:43]. So all this range of aspects of the company, we have to evaluate, but for sure, putting more [inaudible 0:03:50] in the supply chain [inaudible 0:03:54] risks.

 

After that, I think it's very important that also you have... One important point is to know what they are going to do [inaudible 0:04:12]. ... After the work, after the risk assessment, we do a kind of classification of the risks that we've found. So it's something like [inaudible 0:04:28] when we put in the X or Y, the [inaudible 0:04:37] probability level that is the multiply, we multiply the probability [inaudible 0:04:44]. So in doing that, we can identify what are the size of the risks, the most probable risks, and what is the [inaudible 0:04:55] and how they can [inaudible 0:04:57] about any kind of perception from the supply. So this is the X or Y.

 

In the [inaudible 0:05:06], we put something that we call the perceived impact [inaudible 0:05:11]. So it was the [inaudible 0:05:14] what can happen with the plan and what'sthe damage it can cause,and also, the reputation impact. So what a company like [inaudible 0:05:25] for example, here in Brazil, what a company in Germany like [inaudible 0:05:31], for example, that is a truck manufacture, can have impacted his image related to that. So multiply those two aspects. Have the X [inaudible 0:05:45] graph can show us how can we prioritize the actions after the risk assessment took place.

 

...supply chain risk so important?

 

Yes, I think this is the most important part of the risk assessment is to find what are the supply chain risks. So what are the risks of shortage, for example. So usually, we not only visit the tier one, but we also visit the tier two and three. What are the raw material providers for the tier one for that [inaudible 0:06:36] supplies. And what is the risk? What is the dependency, the financial and the supply chain dependency of the supplies, for this supply [inaudible 0:06:48] tier one and tier two and three. And so, what is the dependency of these supplies from other [inaudible 0:06:54], how much they depend on us, on the primary company?What's the person [inaudible 0:07:03] of the revenue that you're buying is, things like that. So it's an evaluation of the supply chain's stability.

 

My last question is where have you applied this and had success?

 

I applied it very much for [inaudible 0:07:29] takes care of their image too much because we are one of the only aircraft companies in the world that never had a fall of aircraft. So it's very important for us, and we depend a lot on parts and pieces from other countries to not stop the line. So it's a [inaudible 0:07:56] point. And I also train at some companies. I made some trainings for companies like [inaudible 0:08:04], companies like [inaudible 0:08:06] that are chip for German companies. And, on behalf of one of the [inaudible 0:08:13] for consulting companies. And I realize that those companies are very worried about their risks, not only natural disaster but they also, now, [inaudible 0:08:27] the supply chain risks. So they'll stop lines, and they're putting a lot of [inaudible 0:08:32] and a lot of money to reduce those risks.

 

Thanks for sharing today on the topic of supply chain risk management.

 

Thank you, Dustin, for the invite. It was a pleasure for me.

 

Great. Thank you. 

 

 

About Ruy Martins

 

 

 

 

Ruy Martins

 

Head of Supply Chain Management and Facilities at ITW

 

LinkedIn Profile

I interviewed Brenda Gallagher who discussed Project Management Tips You Won't Get In a Book.

 

 

 

 

 

 

Today we're speaking with Branda Gallagher, and she's going to discuss project management tips that you won't get in a book. So, Brenda, before we start, can you provide a brief background of yourself?

 

I have about 20 years operational experience in transport, distribution management, and also project management. Since we're talking about project management, I've project managed the operational Go Live of a 42,000-square-meter, multi-chamber distribution center. I've also done Go Live’s commissioning of 50,000-square-meter distribution centers down to SAPW MISCO lives and brownfield sties.

 

Great. If we dive right into the topic, can you talk about some of the things that aren't covered in project management textbooks?

 

They cover, in project management textbooks, in my opinion, about communication plans, about managing your project plan, but there's other aspects, more so the softer aspects, that they don't cover so much in a textbook about project management. The first one is getting the culture right. So even though there's a fixed end date of a project deliverable, you still need to make sure that they team can work together, that you share similar values, and that your goals are aligned, which is obviously about delivering that project. If you don't get that culture right, you're not going to achieve your project within the scope in terms of time, quality, or cost.

 

Another one is that people throw up their arms about [inaudible 0:01:42]. That isn't always a dirty word. For an example, when I was commissioning that 42,000-square-meter distribution center, it was only supposed to be two chambers. Towards the end of the project, the client decided that they were going to add another chamber for confectionery which was very different from a chilled zero-to-four degrees or a frozen, which was the -18. It made really strong operational sense in terms of synergies and efficiencies and being in Queensland, where it's very humid and hot at times, it did make sense to put the confectionery in the ambient DC. So the scope was changed to include that chamber for the confectionery there.

 

Another one is you're going to have bad days. Even though you have your plan, and everybody may be on the same page, and you're all working together really well and achieving your goals, sometimes things aren't going to go how you expect them to, whether that be that you're testing doesn't seem to go to plan or somebody might leave the team or the project. Some days are going to be really, really hard.

 

Another item is – and this is particularly getting towards the pointy end of a project --there's going to be doubts. People get tired. They're under pressure, and you're thinking to yourself, "I'm not going to get this done on time. This is going to fail." It can be quite tempting to see if you can push back to project. I think you need to take a breath and actually look at it from a logical, systematic point of view in terms of the project, rather than from that emotional or fatigued aspect. There will be doubts, whether that's you doubting the effectiveness of the project or somebody from outside the team questioning whether you can actually achieve this.

 

Finally, delivering a project can be intoxicating. So it's a really, really exciting high-energy time when you're going live in a project. And people come out of the woodwork because they want to be a part of it. It could be for political reasons. It could be things in terms of just sharing or communicating that project. I remember I was commissioning our 5,000-square-meter distribution center, and I had very poor internet connectivity. I had brand new team members, a brand new process, and I had the communications manager from Interstate wanting me to send her photos of the site so that she could put it in the newsletter. It was totally a priority for her but not for me. But she really wanted to be involved in the project from that point of view. It's important to [inaudible 0:05:09] and understand your priority at the time.

 

And for me, that's all the topics that really aren't covered in a textbook about project management.

 

Thanks, Brenda, for sharing today.

 

Thank you.

 

 

 

About Brenda Gallagher

 

 

 

 

Brenda Gallagher

 

Supply Chain | Logistics | CoR Compliance | Lean | Project Management | Demand Planning

 

LinkedIn Profile

I interviewed Keith Gaskin who discussed Dealing With Disruptions to Supply Chain When Ocean Shipping.

 

 

 

 

 

 

Before we start this interview, can you provide a brief background of yourself?

 

I've been involved in logistics and supply chain now for 20-plus years in roles varying from operations, sales and running a branch prior to setting up SEKO with my business partners. 13 years ago, my partners and I started SEKO UK, really with the remit of working around client's supply chains with a technology-based solution in mind. At the time we were an independent forwarder but we joined with SEKO within six months of start up. SEKO globally started in 1976 as a US domestic forwarder but the last 15-20 years has seen a big shift to the international market and we’re now turning around about 750-800 million US dollars globally with the majority of revenue based on international business. Just under two and a half years ago, we did a recapitalization of the business with a US venture capitalist company called Greenbriar. Greenbriar who are based in the UShave given us a fantastic platform for growth and we’re looking to reach a billion dollars globally within the next couple of years.

 

My background more latterly has been to head up the group ocean procurement for SEKO Europe as well as a strong involvement in the sales process for the ocean product.

 

Great. Well, my first question is, can you provide an overview of what's happening in the market for ocean?

 

Well, it’s certainly not dull in an ever-changing market on ocean!! Around 3-4 years ago, there were approximately 18 to 20 global carriers and most started to expand very heavily, increasing the capacity on the ships as well as the number of vessels within their fleet. Unfortunately, due to the global financial crisis, demand wasn’t matching the increased capacity and with the substantial overcapacity, the freight pricing dropped. Subsequently, there's been more than a few price wars as the carriers bought new larger vessels into the fleet and looked to fill them with cargo. Approximately 10 years ago, Maersk launched the 13,000 TEU vessel called the Emma Maersk (one TEU is a 20-foot equipment unit, so a 40-foot is two TEUs) which was the largest container ship in the world at that time but now the largest vessels regularly being launched are over 20,000 TEU’s on the Asia to Europe trade route.

 

During these price wars and overcapacity in the market, it drove some of the carriers to run very dry on cash and they were forced to recapitalize the business or go to shareholders looking for more money. Due to some of these sustained losses, over the last 18 months there's been a lot of consolidation between the carriers to try to reduce costs and some very well-known names are starting to disappear from the market. The biggest casualty was around about a year ago, when one of the Korean carriers, Hanjin, went into liquidation.

 

The loss of Hanjincaused a lot of disruption to business’ supply chains as vessels were held under arrest by various ports around the world as they looked to recover outstanding debts. While the ports looked to regain some of their money, it meant shippers weren't able to access their goods within the containers causing huge disruption to transit times as well as additional costs. So talking of risk to supply chains, that was a huge issue which saw people wait four to six weeks (or more in some cases) before they were able to gain access to their own inventory.

 

The consolation within the industry means we're potentially going to be down to 8 to 10 carriers within the next 6-8 months. The three Japanese carriers NYK, K-Line and MOLwill be merging all their operations globally outside of Japan in March next year, which is a huge exercise, potentially causing issues and risks for shippers within the supply chain. Although there are potential risks during this period, they’re being forced to consolidate to reach a scale that will allow them to compete against the largest carriers like Maersk and MSC.

 

The idea has been to change the way that the freight is being procured meaning people are moving to longer-term contracts to ensure some surety on the freight rates and avoid the recent peaks and troughs. It’s the hope that consolidation will stop the carriers losing money via the practice of offering extremely cheap freight rates to gain more traffic. Clients cannot risk to have another carrier go out of business like it did with Hanjin and this period of consolidation is set to continue for the next 12-18 months.

 

As long as the capacity doesn't become too great again, they should be able to control freight rates to a better extent and stop them dropping to sustained loss-making levels. So there's currently a great deal of change within the industry driven by losses and consolidation.

 

How can companies react to these disruptions in the supply chain?

 

Companies being the shippers?

 

Yes.

 

If you have a large import or export company, they'll normally diversify across different shipping alliances and carriers to de-risk their business from a transit point of view in case of service reliability issues. In addition now though, shippers are reviewing the balance sheets of the carriers to check their financial viability. One carrier has sustained losses of just over $110 million US dollars in the last quarter and that was while the freight rates were higher compared to last year.

 

So there is some nervousness amongst the shippers and balance-sheet checking is certainly one area they will look at when reviewing the carriers. Whereas previously shippers may have looked to procure the cheapest freight rates, they're now looking for continuity in service, schedule reliability, receiving guaranteed space on each vessel whilst ensuring that the carrier is financially sound. It’s forced people to realise that procuring the cheapest freight rate isn't the best long-term solution for anybody - because if another carrier goes out of business, that could mean less competition on routes and long term higher prices. It’s now a case of mitigating your risk amongst different carriers whilst ensuring you're working with a carrier with good financial standing and robust schedule reliability.

 

Do you have any final insights you'd like to share for the shippers?

 

I think it's a case that stable rates are actually a good thing for the market because if there were only five global carriers (the head of Maersk, Mr. Skou, has recently announced that he believes in the next 5 to 10 years, they'll only be five global carriers) that would lean to a sustained period of higher freight rates.

 

Any final recommendations or insights?

 

I think a big one would beto pair the schedules of the carrier with your end to end transit requirements and that the cheapest freight rate isn't necessarily saving you money. If you suffer delays in your supply chain, the freight rate can become irrelevant if your goods are late into store or your DC which in turn, could cost a lot more money in the long term against a few freight dollars saved. From our perspective, the freight rates are very much a commodity which are transparent on indices like the SCFI (Shanghai Container Freight Index). Most of the carriers offer similar pricing models now so it comes down to supply chain value. Can we look to save cost and efficiency in your supply chain by introducing relevant technology and by reviewing your processes at origin and destination?

 

I think for the shippers, it's looking at the entire ocean freight market whilst making sure that you're not trying to push the carrier to a point where the rate level is so low, that your business is of no interest to them because they're not making any margin from it. The carriers are becoming ever more focused on margin now (They are in business to make profit!) so they're restricting capacity when rate levels are low to push the rates up and if you have a cheap freight rate, they may not give you the volume that you require in the peak season. So coming into the Christmas rush - which would be August through to November –space availability could well be key as the carriers seek control it. You need to ensure that your freight rate is at the right level so that every container you look to ship, moves on the specified vessel at the agreed rate. It’s also worth looking at taking advantage of some of the spot pricing opportunities available at present so that not 100% of your business is contracted at a set rate. Whatever strategy a shipper chooses, it’s important that they are willing to stick to that strategy and where possible, enter into a contract with either the shipping line or logistics company so that all parties have a clear understanding and will support their requirements. By contracting the business, it also ensures that all parties view the business as a long term partnership and are willing to invest in it.

 

Thanks for sharing today, Keith.

 

You’re welcome and thank you.  The market is certainly ever changing as are the carriers which has brought strong client interest. Thankfully it's taken the focus for a lot of the clients away from pricing on a freight port-to-port element and bring into consideration all the additional value-add components and commitments that you require. From our side of the fence, ever more emphasis is being placed on our technology, innovation and how we can save money for clients in the whole supply chain rather than an individual port-to-port cost. As pricing is now readily available on major routes from Asia into the US and Europe on shipping indices, freight rates are now a commodity which means pricing is ever more transparent. Clients are now looking beyond price and into what value the solutions will provide to them across the supply chain.

 

 

 

About Keith Gaskin

 

 

 

 

 

Keith Gaskin

 

Owner, Group Commercial Director - SEKO Logistics

 

LinkedIn Profile

I interviewed Milan Vyas who discussed Supply Chain 4.0 – Time for Supply Chain Transformation.

 

 

 

 

 

 

1. Please provide a brief background of yourself.

 

Hi, Dustin, Thank you for your time & providing an opportunity to introduce my professional experience, and knowledge base.It is a pleasure and great honor to share insights of Supply Chain Management with you.

 

My name is Milan Vyas. Originally I am from India but currently I am working at Kenyain Africa. I have an excellent track record to build a globally integrated end to end Supply Chain that will add value and provide an competitive edge to the organization and delivered growth for more than 18 years through progressive multi-cultural work experience in all field of ERP based Lean & Agile Supply Chain in multiple Industries like FMCG – Food & Beverages, Building Materials & Consumer Goods, Manufacturing, ICT and Telecom – GSM & CDMA.

 

I have demonstrated results in maximizing customer service levels and company’s profitability through managing all aspects of Supply chain including Strategic Procurement & Contracts management based on Categorization & Spend Analysis, Total Cost of Ownership (TCO) Model, robust S&OP & Continuous process improvements, Inventory Management & Control, Strategic Supplier Relationship Management, Warehousing & Distribution and achieve stake holder’s satisfaction by providing an efficient, responsive and reliable Logistic Solutions.

 

I am fortunate to associate with big brands & industry leaders like BIDCO Africa Ltd. in East & Central Africa and progressive and performance driven organizations like Formica Group owned by Fletcher Building, TATA DOCOMO and Vodafone in India during my professional journey till date. Build credibility by being consistent, showing competence, commitment and concern for people.

 

I am a “SAP Power User” for SAP R/3 MM Module & End User of ORACLE 11i ERP System. Played a lead role in designing & implementation of SAP ERP system at pan India level at TATA DOCOMO.

 

I have completed Bachelor of Engineering (B.E.) in Production and also did PG Diploma in International Business Management. On quality front, I am certified “Supply Chain & Materials Management Professional” and also life member of IIMM - Indian Institute of Materials Management & IFPSM - The International Federation of Purchasing and Supply Management.

 

My aim is to spread the knowledge & updates about Supply Chain Management among the supply chain professionals; which helps them to improve their businesses as well. I am driven by this vision and I am inspired by what I am doing.I have contributed my domain expertise & experience of Supply Chain Management in form of articles in various publications of IIMM.

 

Going through my professional experience and profile, you find that I am very passionate Supply Chain Professional and I am looking forward to contribute more and make a difference in this profession.

 

2. What is Supply Chain 4.0 and what experience do you have with it?

 

Disrupt or be disrupted…. That is the reality facing businesses and their supply chain organizations in this digital era, where business models change as quickly as new competitors or new market opportunities emerge.

 

Digitization creates a disruption and requires companies to rethink the way they design their supply chain; in order to maintain and grow market share. At the same time, globalization, market volatility, and customer’s demands are growing and continue to become more complex. A recent online trends in e-commerce; have led to strong growth of SKU Portfolio and increase service expectations combined with customized orders and multiple last mile delivery options.Most company’s fulfillment models seem to be static and not flexible; so struggling to manage the cost and complexity of the new omnichannel world.

 

Experts would usually claim that supply chain management is about delivering The Right product, at the Right place, at the Right time at the lowest cost, with the agreed service level, right? Well not anymore now. Until recently, we were used to looking at supply chains as cost drivers, not sales drivers. Now it is about increasing sales& profits, creating more value and capturing it.

 

Ensuring the supply chain can consistently meet business objectives in this increasingly complex environment is becoming more and more difficult through traditional operational structures and mindsets. It’s critical that there is not only an alignment of the supply chain strategy to a Company’s overall growth strategy, but also consideration of the direction in which the world is heading.

 

With complexity growing, an evolution of the supply chain needs to begin now. So Welcome to Supply Chain 4.0.

 

Roughly it is a broad vision of tomorrow's Supply Chain. The ultimate goal for Supply Chain 4.0 is to create a blueprint of the next generation of supply chain that will drive a company’s business in the future.

 

Supply Chain 4.0 provides a framework of capabilities that can help companies profitably meet future demands with increasing market complexity and customer expectations.

 

This ecosystem is based on implementation of a wide range of digital technologies like Big Data & Prescriptive Analytics, the Internet of Things, Cloud Computing, 3D printing, augmented reality, robotics, smart sensors, track & trace solutions, Drones, and others. The goal of the digital supply chain is to fully integrate and make visible every aspect of the movement of goods.

 

Digitization leads to Supply Chain 4.0 which becomes:

 

  • More Faster & Responsive
  • More Flexible, Agile & Scalable
  • More Smart & Intelligent
  • More Accurate with real time visibility
  • More Efficient

 

Supply Chain 4.0 will affect all areas of supply-chain management. I would like to share my experience of two important links of Digital Supply Chain – Smart Warehousing and Logistic Visibility. Your distribution center DC and Logistic operations promise to become a strategic tool in how companies operate and generate value for their customers. Here, the aim is to improve efficiency and safety through the automation of virtually every ordinary warehousing activity.

 

Currently I am working with our CIO to implement latest technologies of Smart Warehousing - WMS &Logistic Visibility - TMS and integrate with our SAP ERP System with the goal of pleasing consumers and increasing sales.

 

Leveraging digitization in the warehouse will provide you agility for omnichannel order fulfillment with real time inventory visibility & accuracy, reduce cycle time, improve productivity, optimized put away, minimize returns, intelligent & error free picking, increase throughput and decrease lost sales — delivering real business advantage.

 

Not only will the integration of Transportation Management System (TMS) with your WMS & ERP, improve the overall operational efficiency of your supply chain in terms of load & route optimization, dock appointment scheduling, end to end process visibility, real time updates, and reduce shipping errors but, it will also greatly enhance the customer experience by providing full visibility to consumers about their shipments and auto alert can be set up based on specific customer needs.

 

By integrating modern technologies into your warehouse & logistics operations, you can greatly increase your productivity, maximize efficiency and drive down costs - empowering operational excellence, on-time customer orders fulfillment and, ultimately achieve customer satisfaction.

 

We are entering the age of “experience” economies. This means that the way companies deliver customer value is different, and the customer experience is the new battlefield for competitive differentiation. The new competitive differentiator is understanding what customers want before they ask for it, sometimes solving problems customers didn’t realize they had. Amazon is best example for it. Customers today are focused on getting what they want and when they want it.

 

McDonald's, for example, is more a supply chain company than it is a food company. What it does logistically is remarkable.

 

At other companies such as Apple, where product is excellent, but an efficient supply chain allows the business model to operate at a much higher level.

 

In order to improve as a business, it’s essential to continually adapt to emerging supply chain technology applications to create better visibility within your supply chain, which will enable you to have more control over your business and stay ahead of the competition.

 

We have a lot of tools to understand supply chain costs, like “total cost of ownership”, “spend analysis” or “total landed cost”, but none about increasing sales. However, technology is bringing about a fundamental change and Supply Chain 4.0 requires a very different view – focusing on increasing sales through a better understanding of how customers behave.

 

3. How is it done effectively?

 

The transformation from current supply chain operating models to Supply Chain 4.0 isn’t simple, but not addressing these challenges will be an equation for losing market share in a growing competitive market.

 

“Getting to the future of supply chain capabilities would require breaking down functional silos, redefining priorities, and building synchronized planning and fulfillment capabilities.”

 

There is no “one-size-fits-all” supply-chain operating model.

 

1. First step is Make a detailed strategic plan. Evaluate your own digital maturity now and set a clear targets for the next five years. Prioritize the measures that will bring the most value to your business and make sure these are aligned with your overall strategy.

 

2. Second step is define the capabilities you need.To implement a new capability, you’ll need to consider three strategic dimensions: people, process and technology.

 

  • Focusing on people: Develop strategies for attracting people with the right digital skills. Your success with Supply Chain 4.0 will depend on skills and knowledge. Your biggest constraints may well be your ability to recruit new employees or train existing ones who can put digitization into place.
  • Integration of processes: One of the most important changes is to focus on an end-to-end process perspective. That will foster new collaboration models.
  • Implementing New Technology: Digital Technologies and Supply Chains are converging to create a new Digital Supply Chain Network, driving greater business value.

 

3. Third step is transform into a Digital Enterprise: Foster a digital culture, where all your employees will need to think and act like digital natives, willing to experiment with new technologies and learn new ways of operating.

 

4. Fourth & last step is Actively Plan an ecosystem approach: Real breakthroughs in performance happen when you actively understand consumer behavior and can orchestrate your company’s role within the future ecosystem of partners, suppliers and customers.

 

Once Bill Gates said that:

 

“The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.”

 

So “Technology will only deliver the intended positive results if it is implemented with strategy and operations that adhere to best practice in supply chain management. Get basics right first. Not even the smartest technology can compensate for less-than-best practices,”

 

4. Where have you seen good results?

 

The degree of transformation for supply chains will depend on the industry sector and company, but this will change radically over the next three to five years, with different industries implementing Supply Chain 4.0 at different speeds.

 

I strongly believe that companies may achieve exponential gains by acting on some of the supply chain digital levers not presently judged as creating revolutionary change over the next three years.

 

On average, companies expect to reduce operational costs by 3.6% per year, while increasing efficiency by 4.1% annually.

 

Supply chain professionals expect big benefits from continued digitalization in their supply chains including greater transparency and flexibility, reduction in inventories and delivery times, efficient customer service, reduce operational cost and increase sale & profits.

 

In short, the digital supply chain will offer a new degree of resiliency and responsiveness enabling companies that get there first to beat the competition in the effort to provide customers with the most efficient and transparent service delivery.

 

 

About Milan Vyas

 

 

 

 

Milan Vyas

 

dsddA Certified Supply Chain Professional | Strategic Sourcing | Warehouse & Logistic | Transformation & Process Improvement

 

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