I interviewed Akhil Srivastava who discussed Collaborative Commerce with Supply Chain 4.0.
Digitization brings transparency across value chain which will enable companies not just to react to disruptions but to anticipate them, modeling the network, and adjusting the supply chain immediately as conditions change. Additionally, Digitization helps onboard suppliers and customers across end-end supply chain enabling firms ability to pioneer Collaborative Commerce.
In a future Digitize economy, I envision creation of single platform of digitized foot print for physical goods will serve as a single source of truth empowering all stakeholders to make realtime efficient decisions. Steps in this direction would eliminate lack of trust and build resilent and transparent supply chains which would be both Agile and resilient. Once the integration is complete it will lead to lower costs and faster delivery by elimination of Inefficiencies resulting in Improved Customer Service and optimized Total Cost of Ownership thus increasing profits in a collaborative world.
Can you first provide a brief background of yourself?
Hi, Dustin. The pleasure is all mine. My name is Akhil. I have been working across the Fortune 500 companies as well as several successful startups in the area of supply chain for over 12 years. During this 12-year stint, I have covered end-to-end supply chain, including planning, distribution, manufacturing, customer service, and procurement. I see myself as having gone through the supply chain at various industries and companies at pretty different levels of involvement as well as engagement.
Can you discuss some of the issues in supply chain and some of the bottlenecks that are happening?
That's a pretty interesting topic, because when I see supply chain as a very, very new field, a lot of function within the business verticals, we have been hearing about sales, marketing through the early 19th Century. However, supply just evolved pretty decently. It was, in fact, [inaudible 1:21] years old concept when people said...and the word “supply chain” is actually coined then. Ever since the supply chain being a function has evolved, supply chain has been considered as a cost center by most of the organizations, including leading organizations, and that's where it is supposed to be more like a supporting function and a supporting role, unlike the core functions like sales and marketing. And this has led to a pretty limited development of supply chains over a period of time.
However, what we realize in the recent past of, say, the last 15, 20 years, that supply chain has enormous capabilities of transforming a company's bottom line, especially in terms of transforming the original investments because it is all about how beneficially you can turn around the assets, how effectively and efficiently you can service your customers, how are you able to quantify yourself across four basic parameters. One being customer service; second being cost; third being quality; and fourth being reliability. Most companies consider supply chain as a bottleneck because of the lack of transparency and visibility in the system. And that has been because our systems within this function has been pretty dated, and it has not evolved. However, as we see, there is been a lot of current emphasis in the transformational journey for supply chain.
There has been a lot of evolution in regards to what is happening, and I'm sure it will lead to supply chain being a leading function, especially in the new e-commerce world and the digital economy.
Is there any more you can say about bringing supply chain into being a profit center?
Right. In the current context, as I said, generally, companies imagine sales and marketing to be the profit center. However, sales and marketing is only bringing in the customer inside and bringing in your profits. However, supply chain is the function which controls most of the costs, including procurement, operations, manufacturing, logistics, distribution, and also hidden costs like total cost of ownership, which includes customer service over a long period of time and building a reliable infrastructure for servicing the customers.
Having said that, what I see is, in today's supply chain, there are bottlenecks because, A, the supply chain, unlike other functions, is a very, very collaborative role. It cuts across almost every function within the organization. It requires a lot more cross-functional interfaces, which means it requires a lot more visibility and transparency across different functions. However, at times, we that supply chains are basically working on their silos because it's pretty difficult to have a real-time information map across various functions.
That's what is one of the most limiting factors and, in fact, one of the most frustrating factors for many top-level executives to take a call on, because they don't know where exactly the inventory lies, how much inventory is in place, what is in transit, who are the vendors and supplies, are they all abiding by the code of conduct. In total, there is a huge issue in terms of overall visibility and the real-time information flow.
So let me back up a bit and also explain as to what is happening in the world of supply chain. Supply chain eventually is moving into a pretty fast transition game, especially with the onset of ecommerce.
There was not much talk of companies within the ecommerce space five to ten years ago, which means there something changed over the last 10 years. And what changed is about the flow of information using the Internet of Things. What we have seen is there are a lot of technology transfer. or information flow, which started happening across the value chain using the Internet of Things. And these IoT technologies are scaling up on an everyday basis, assumed to be to a tune of 30 billion pieces of IoT devices by the end of 2022, which means almost everything you touch, you are providing some signals, some information, through the cloud or the internet, to the service providers. This means the technologies exist to digitize the entire supply chain.
So in a version of 4.0, which we say is digital economy, we are looking at the supply chains today, would actually evolves to the next levels wherein people will have a lot more visibility and a lot more transparency. That is because, as supply chain players, we would be looking at digital footprints of physical assets. So today, for example, we are discussing what is the media right now, and we are recording it across... This is a digital footprint of what we are actually trying to communicate. A similar thing can happen as a digital footprint for a flow of material. Imagine a material being... Imagine a case of an Airbus which is getting made in France.
Now, Airbus requires more than a million particles to be assembled from various vendors globally, so they buy products from China, India, Asia, Australia, and all other places, and they come all together and assemble it in a particular location or a factory. Today, the biggest probably for any of the manufacturing plants is that their inventories don't have visibility. They don't know how much of the inventory is in transit, what amount of the inventory would be available to them, and whether that inventory qualifies to be fitting into the specifications. Hence, if everything gets digitized, which is when we're talking of digital supply chain, we are talking [inaudible 8:42] eventually of smart manufacturing.
We're talking of digital products. And we're talking of data analytics, which becomes part of the core competency. Evolving all of this together would help make the supply chain more resilient and responsive and will be really helpful for the leadership of the organization to take decisions on time and thus orchestrate a supply chain design, network design, which is pretty much more responsive and more agile to fulfill customer requirements. [Inaudible 9:23] I believe this leads into collaborative commerce and how that happens is the digital supply chains, once they're digitized...
Let's me back up a bit. The current systems on supply chains are pretty desperate. Some of the suppliers have an Oracle system; some of the suppliers have an SAP system; others have a different ERP enterprise system. These enterprise systems don't talk to each other, and hence, it results in a broken system of records, because of which there are several examples where the supply chain gets defunct. In a digitized world, which will get enabled, the supply chains will really help across, work at building collaborative commerce, because now you have a real-time inventory visible [inaudible 10:21] your vendor.
You have a real-time visibility in transit, and you have a real-time visibility across your own locations and places. That would really impact a new set of organizational design for supply chain which will help enable virtualized processes and involve flexible and integrated [inaudible 10:45], thus making collaborative commerce a reality maybe by 2025. [Inaudible 10:58]
About Akhil Srivastava
(B.Sc., M.B.A in Agribusiness and M.S. in Management, JN TATA & Forbes Marshall Scholar) - An Agripreneur and Supply Chain professional with over 12 years of progressive E-2-E Supply Chain experience with fortune 500 firms and successful startups. My experience of working and collaborating across end to end business domains - in conjugation with innovative technology and systems automation by utilizing skills of change management and design thinking has been of help in building successful and scaleable businesses globally. I visualize that in today’s competitive business ecosystem, consumer-oriented companies have an incredible opportunity to redefine their supply chain models and extract synergy across businesses by embracing innovative technologies as cornerstone in corporate business strategy. I aspire to establish scalable integration models helping transform Supply Chain as a profit generating function leading to onset of Collaborative Commerce….
|About Akhil Srivastava|
Strategy,Sales,Supply Chain,Product Management