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2017

I interviewed Arun Sharma who discussed Cold Supply Chain.

 

 

 

 

 

 

Today we're speaking with Arun Sharma, and we're going to discuss the cold supply chain. So, Arun, can you first provide a brief background of yourself?

 

I've been working in the supply chain field since the last, say, 25 years. And I've been working in different types of supply chain like FMCG or automotive products and consumer durables ever since then but primarily in the cold supply chain. And I've been handling the cold supply chain of Mother Dairy, which is one of India's biggest companies in terms of cold chains. For example, this company is dealing with the ice cream and frozen products. So I have taken care of the supply chain of Mother Dairy for movement of materials, storage of materials, and production of all cold-chain products, like ice cream, frozen peas, frozen corn, and frozen, etc. There are multiple frozen products which we have moved from our central warehouse and production to various regional distribution centers across India.

 

Can you talk about some of the challenges you face with the cold supply chain?

 

One of the most prominent challenges, which I have, the seasonality of the product. In India, there is extreme temperature condition in the month of summers. It starts from the month of March, and it ends in September. So during this period, the conventional frozen products is extremely high. So production units are not running with their...they aren't even running through their complete production capacity. There is a lot of short days of production during this time. And we cannot enhance the production capacity to the maximum limit.

 

So for making this requirement, we need to produce in the month of lean seasons. So in the month of lean seasons, which starts from the month of October and November, December, January, and February -- for four months we need to produce the frozen products in such a manner so that it can fulfill the requirements of the products in the months of extreme season, just starting from the month of March and after. So this is the challenge. And once you pre-produce the product, there is a shortage of space for keeping these frozen products. And the storage cost is also very, very high. So we need to keep all those stocks stored in the warehouses for three months, and we need to start liquidating from the month of March. This is one of the most important challenges. We start [inaudible 0:03:03] all frozen product companies.

 

What changes do you see happening for the future of cold supply chain in India?

 

Infrastructure. Now gradually the infrastructure is improving in all segments of cold chain. The warehousing capacity is increasing. The material movement capacity is increasing. So as the normal consumption of frozen products are increasing, the infrastructure is also gradually increasing, though it's not equal to what is actually needed as a requirement, but still the infrastructure is gradually increasing. The government of India has also started giving subsidies on the cold chain warehouses, and people are [inaudible 0:04:01] warehouses. So they're just gradually increasing.

 

Do you have any final recommendations for managing the cold supply chain?

 

As infrastructure is very, very low, external industries need to come forward for getting this opportunity in this particular field. There are a lot of scope in the field of cold chain for movement of materials, for storage of materials, for repacking of the materials, for branding of the materials, and selling it to the various regions too. So there is a huge opportunity in the field of supply chain of cold products, first.

 

Second is there are a lot of food products. Almost 35% of the food products are wasted because of extreme weather condition. So if companies can chip in and then they can enroll themselves for improvement of infrastructure, they can actually get the benefit out of the poor infrastructure, and they can get a very high level of the bottom line for them.

 

Thanks for sharing today, Arun.

 

Thanks very much, Dustin.

 

About Arun Sharma

 

 

 

 

 

 

Arun Sharma

 

Head-India Supply Chain at MI-India

 

LinkedIn Profile

I interviewed Ben Liu who discussed order fulfillment.

 

 

 

 

 

 

Today we're speaking with Ben Liu, and we're going to discuss order fulfillment. Ben, can you first provide a brief background of yourself?

 

My background actually is purely supply chain logistics. In my early career, actually, I was working with the Chinese state-owned company Sinotrans for international freight forwarding. Then, followed by a Japanese big ocean shipping company, Yusen Logistics, for briefly one year. Most recently, actually, I was working in Shanghai for more comprehensive supply chain logistics. And our services mainly covered B2B transportation and also end-customer deliver. So most of my experience, actually working with those multinational companies who have a manufacturing investment in China. So our business, actually most recently, is not only focusing on B2B by also lately we were also looking at B2C because some consumer goods — electronics — the market change and the consumer orders type changed. So we're also following on that. So that's basically my background. Mainly B2B and B2C order fulfillment.

 

Can you talk a little bit more and share some of your experience with order fulfillment?

 

We are doing the distribution order, both to the channel, resellers and for those electronic companies like laptop makers Hewlett Packard, Lenovo, as well as a couple of Taiwanese laptops makers such as Acer and Asus. Our destination is mostly to big dealers and some electronics markets. We also fulfill orders to supermarkets, electronics specialists, and electronic chain stores.

 

Why is order fulfillment important?

 

First of all, older fulfillment importance is very closely related to our life. Everybody's daily life and our entertainment, our enjoyment of time and also of very important support of our work efficiency. That is my understanding.

 

How is order fulfillment done effectively?

 

For order fulfillment effectiveness, I think the most important is technology. There is the material flows, the process is very critically managed by the system and guided by the system. Also, all the work is maintained by a system database. Therefore, I think technology is the most important part.

 

 

 

About Ben Liu

 

 

 

 

 

 

Ben Liu

 

Logistics & Supply Chain I Business Development I Team Leadership

 

LinkedIn Profile

I interviewed Kunal Gupta who discussed Food Supply Chain.

 

 

 

 

 

 

1. Please provide a brief background of yourself

 

Professionally - A specialist in Food and Beverage Supply Chain Management, I head the Global Supply Chain of Bateel Group that has operations in 15 countries from US to Middle East to South East Asia.

 

I have been instrumental in opening and managing almost 200 F&B outlets (amongst Bateel, Godiva, Tim Hortons, Coldstone Creamery and Sbarro Pizza) across Middle East and UK region over past 6-7 years.

 

Academically – I am an Engineer by first qualification and then MBA.

 

Personally – Happily married for about 10 years with 5-year-old twins based in Dubai. Travel and food continue to be my greatest passion that gets me going every morning

 

2. What is the food supply chain?

 

Supply Chain is Supply Chain – Weather for food or non-food.

 

As per Wikipedia

 

A supply chain is a system of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer.

 

Food Supply Chain has a few additional parameters which make it challenging and more interesting at the same time.

 

  - Temperature

  - Humidity

  - Shelf Life

  - Health Regulatory Requirements -

 

Starts with Planning and goes into every node of Supply Chain like Logistics, Storage and Distribution.

 

3. What are the challenges and opportunities?

 

Various challenges mainly resulting in Food Fraud

As per PricewaterhouseCoopers 2016 report, food fraud is estimated to be a $40 billion a year problem.

World Health Organization estimates that nearly 1 in 10 people become ill every year from eating contaminated food.

 

Some of the Challenges and their corresponding opportunities are 

 

a) 1stChallenge - Lack of transparency and communications

Trace your hamburger from farm to fork may involve tracing your lettuce back to the farm in which it was grown, tracing the beef back to the cattle (with no guarantee, that the end product is 100% beef)

 

Opportunities –

 

     - IOT Devices that provide real time traceability for shipments. These provide information on not only Location but also Temperature, Humidity, Jerks, other variations, alerts etc

 

     - More notably the blockchain, highlights the potential to introduce more trust in our food supply chain. Blockchain is a transformative tool in the fight against food fraud, allowing an open and transparent ledger of our food products journey.

 

 

   b)     2nd Challenge - Traceability

Can we trace the roots of our food and how authentic are the claims by food producers and distributors

 

Opportunities –

 

     -Global Certifications and Standardisation Bodies – Halal Certification in this part of the world, SGS, Ecolabels for sea food etc

 

   c)  3rd Challenge - Not common Food Regulations globally

 

Dubai Municipality in UAE, SFDA in KSA to FDA in US. All have different and varying requirements which makes movement of products very difficult globally.

 

Opportunities –

 

     -Legislation regarding food labelling could also be more stringent,

 

     -Tighter legislation, leading to significant punitive measures taken against defaulters found to be committing fraud, would be a vital catalyst in ensuring that food in our supply chain is as secure as possible.

 

4. Do you have any success stories for effectively managing the food supply chain?

 

Measure of Success in Supply Chain – Food Supply Chain – Especially in F&B sector

 

     - Operate perfectly between 2 variables

     - a) Under-supply/ Product Run-out – Loss of sales – Top line

     - b) Over-Supply -/ Expiry – Hits your bottom line as it is additional cost

 

     1) Tim Hortons – 4.

 

       - Very massive expansion plans in 2012/2013 – Over 50 restaurants in GCC

       - Issue was to match up inventory management to rapid growth– Under and over stock problem

 

     Success - Within one quarter with planning and forecasting changes, achieved 99.9% fill rate and minimal expiry

 

    2) Godiva –

 

    Issue - Chocolate too sensitive for transportation. Most by Air shipments from Belgium to ME Region

    Success – Demand Planning Cycle change and Finding right Equipment ( Sea Containers with Humidity control and tracking)

    Air to Sea project – Save a few hundred thousand dollars annually on freight cost

 

 

About Kunal Gupta

 

 

 

 

 

 

Kunal Gupta

 

Director of Supply Chain for Bateel's Global Operations

 

LinkedIn Profile

I interviewed Christoph Szakowski who discussed Winning in CIS-Logistics market despite the complexity in its supply chain.

 

 

 

 

 

 

 

 

Introduction and my experience

 

My name is Christoph Szakowski and I have been acting for a couple of years – as Managing Partner of LogCon East- as consultant and interim manager mainly for logistics providers in Central and Eastern Europe and Emerging Markets. Prior to that I learned how to develop, transform, restructure business of 3 PL providers in commercial, operational and general management roles with DB Schenker and Logwin AG. It was also DB Schenker where I had my first responsibility for Russia, it was back in 2004.

 

Russia belonged at that time to one of the trade lanes in Eastern Europe I had the target to significantly develop together with commercial and key account teams. This role was based in Frankfurt, Germany. Then a few years later after I accomplished this task I have received the new invitation for the same company, this time for joining the Directors Board in Russia, in Moscow.There for 3 years I was in charge for the strategy, operations and commercial leadership of a diversified business unit. This unit was providing several blue chip companies and local clients with cross-border transportation, customs brokerage, project cargo solutions, rail service, global sport events solutions in Russia and in the trade lanes to/from Russia. And my last experience let’s say in this CIS environment I gained as interim Chief Operating Officer at AsstrA AG, which a Switzerland based logistics provider with strong background in countries of the region we are talking about today and an remarkable footprint in the East-West transportation.

 

Description of the CIS logistics market

 

First of all a remark. I use the word CIS just to give a short description to a region consisting of several countries like Russia, Ukraine, Kazakhstan, Belarus, Azerbaijan, Armenia and others. I know some people might have another wording for the region but let us agree here to use this description for countries where Russian is the language spoken and which are located in Eurasia. OK. The total logistics market value for this region is estimated at 105 billion euro. Very important is that out of this only about 20% is outsourced transportation services. So only a fifth of the market is in hand of logistics providers and transportation companies. This is quite a huge market potential to be captured. In the European market, about 65% is outsourced and in China about 50%. So this creates space for developing services even though there are constraints to growth, something, I come back to later.

 

How about looking at the Russian logistics market in comparison to another Emerging Markets?

 

So considering the Agility Emerging Market Logistics 2017 index Russia is In position 10th out of 50 countries and scores about 23 % less than China which is the leader. So apparently business environment there, infrastructure, regulations, market size make for you as a company in the Russian business maybe by 20% harder to be successful than in China. But actually the ranking of Russia in on the same level as for the Turkish market for example which is currently rather popular with logistics companies and investors.

 

Last but not least – if you consider the CIS markets, you need to see that having established as a player there you have a great position in the transit corridor from China to Europe and Europe to China. So you can win not only in the traditionally strong domestic transportation market in countries like Russia but also cross-border transportation by road and by rail offers you a huge potential in many industries like Consumer

 

– Industrials

– Automotive

– Electronics

– Chemicals

– Oil & Gas for project business

 

What makes supply chains in this region so complex and challenging?

 

There are 3 aspects I would like to underline here on the example of Russia. The first reason for the complexity is there that is – in long-term – high probability of economic crises, energy prices turbulences, strong currencies instabilities. Actually, in a long-term of let us say 7 to 10 years you can simply anticipate such turbulence. Your supply chain strategy as retailer, for example, needs to consider that consumption might be pushed down dramatically as first reaction. On the other side real estate infrastructure for example in region of Moscow might become or is becoming now by far cheaper compared to the situation before the last crisis. So you can significantly save your real estate costs whether you have your own distribution facilities or you have outsourced to your provider.

 

And in the meantime, the consumption is increasing when the economy stabilizes. And then you might end up with higher operational efficiency, streamlined networks and transportation operations. But this advantage you only will gain if you have the patience to stay long enough on this market.

 

The second point which makes managing your supply chain, managing your cost and time really hard is that there is only a small number of high-quality logistics providers and thousands of low-cost carriers. So let us say your decision whether and to whom outsource your supply chain operations might be restricted to a few players (if you want to achieve a high-level service, reliable delivery times, value added services etc.) or you have a huge selection once you want to go for the cheapest company with all the risk of cargo damage or loss, no information, bad customer service or transit delays which might be huge in the largest country of the world.

 

The third point which has a strong impact on managing supply chain is the human factor. Something I mentioned in earlier discussions and which might require to make it a special topic again. To put it in a nutshell. you need to build up a very trustful hierarchy and a chain of decision and command for people in the supply chain, including different official authorities, your partners, your suppliers, your 3 PLs your carriers. Actually then and only then you will win finally managing successfully your supply chain

 

What should cooperation between retailers or manufactories and 3 PL providers base on?

 

The basic thing is from the point of view of a 3 PL provider that they are well prepared for the discussion and negotiations with their client. They should know in which areas they can partner within outsourcing project to increase the operational efficiency of the network, improve the delivery KPis etc. According to some research and also our projects 3 PLs can, for example, shorten the time from an order to delivery by 20% and save by 15% the total logistics costs. But it needs first of all an open discussion and also the readiness of the retailer or the manufacturer to create an evaluation system of the 3 PL providers,, decide on their priority areas and then define a standard service level agreement.

 

What is also needed is quite an amount of contractual paperwork and agreement at the end of the negotiation process and then, of course, a steady control and professional evaluation on both sides. So a good, profitable cooperation needs here to follow a systematic approach and openness to discuss the whole aspects of supply chain and logistics

 

Personal stories and recommendations

 

Yes. Quite good here will be probably not one specific story but just a reflection on my time in being directly involved in the Russian or CIS logistics markets. I believe that has been a huge lesson about dealing with a large market with its big changes and an absolute amazing spectrum of people you meet or work with. I think as long as you consult or steer from a head office abroad or so you can apply your skills and your brain and that is enough but once you start to be living and working in the CIS markets you need to apply quite a large amount of emotions and people understanding and personal leadership.

 

I made my lessons and I feel with any new similar project which might be coming now how important those skills, those experiences, those successes and drawbacks have been. My recommendation is, despite the complexity of the supply chain and further challenges, to really dive into these markets. This is probably one of the best leadership lessons you can have in real business. Companies interested in the CIS market and seeking for advice in any particular areas of logistics and management can, of course, contact me on LinkedIn.

 

 

I would be looking forward to support.

 

 

 

About Christoph Szakowski

 

 

 

 

 

 

Christoph Szakowski

 

CEO / COO / MD / VP /Logistics / General and Interim Manager in CEE, CIS, Asia, Emerging Markets

 

LinkedIn Profile