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2018

I interviewed Bipul Kumar Singh who discussed Supply Chain Planning.

 

 

 

 

 

 

Can you first talk about what is supply chain planning and why is it important?

 

Basically, the supply chain is to manage to entire movement of the goods from the supplier to the end customer. And why planning is important is because over the period that the supply chain has evolved in many ways by [inaudible 00:00:46]. It is important because on this [inaudible 00:00:54] plan, you have a better planning [inaudible 00:00:57] forecast for your forecasting. If you don't do the proper forecasting method, you won't be able to mastermind the requirement.

 

If you go back in the history, if you go backward in time, once upon a time, the customer was happy with a black hat, whereas today, the customer is far more demanding, less loyal, and less patient as well. So they don't want to wait. Considering now all these things, planning is extremely important for any supply chain. And that becomes one of the key areas because the one thing which is the challenging one is the reduced life cycle. Nowadays customers want to buy frequently, not like when they were buying the new product when the older one was unusable.

 

So this opportunity makes the supply chain challenging, and that is why this planning has now become very, very important.

 

Can you talk about how supply chain planning is done effectively?

 

What we have been doing in this company is that we have been collecting the data from the point of sale, and then we are analyzing those data, and then we're doing the inventory management using the various methods of forecasting. By doing that, we are mitigating the risk of the bullwhip effect — what happens when the individual that is the members of the supply that do the forecasting on their own, they always give us inflated data. So to avoid that, we have started collecting the data from the point of sale. And that's helped us immensely in eliminating the extra inventory. And that also helps us to minimize the inventory, which makes us [inaudible 00:03:56]. So we are lean as well as [inaudible 00:03:59].

 

You talk about the method we have. We have products which has [inaudible 00:04:08] products which [inaudible 00:04:12] there are some products with seasonality. So we use all those methods now [inaudible 00:04:17] exponential [inaudible 00:04:19]. So those [inaudible 00:04:25] we use when doing the forecasting.

 

Do you have any final recommendations about supply chain planning?

 

A recommendation would be to have a better system in place to have the visibility, clarity about [inaudible 00:04:48]. So that is one thing all of the supply chain wants to be there in the system. So to have a proper tracking with the [inaudible 00:05:04] which has been used properly [inaudible 00:05:07]. There is a lack of proper training in all that. So that's a use requirement of the training and all that [inaudible 00:05:29]. So the [inaudible 00:05:32] recommendation.

 

Can you provide us with a brief background about yourself?

 

I have done my post [inaudible 00:05:46] supply chain. I started working with a custom clearing and freight forwarding company. And then I was moved on to work on our [inaudible 00:06:01], which was a [inaudible 00:06:03] class manufacturing plant. And here I was basically in this company, I was the [inaudible 00:06:12] redesigning the process and the supply chain at work. So basically I'm into what I have done. It's basically the inventory planning network we're designing, the forecasting, demand planning. So this is what I do. And this is a brief summary about my experience and the various roles which I have had in the past.

 

 

About Bipul Kumar Singh

 

 

 

 

 

Bipul Kumar Singh

 

Supply Chain Manager

 

LinkedIn Profile

I interviewed Aleksandar Maric who discussed Supply Chain Ecosystem.

 

 

 

 

 

 

1. What is this Supply Chain Ecosystem and why is it important?

 

Regards for you Mr Dustin at the beginning. Before I say what is Suppy Chain Ecosystem we have to know what is the major question we have to answer. Every person who wants to run a business has to have some kind of wish to do some business in a certain way. That certain way means, in that sense, to have a track of what are businesses are and what are connections with other industries, resources, etc. In that sense, in short, the ecosystem model is a framework to visualize all operational, strategic, management and execution issues. That will be in short, but to really understand the supply chain ecosystem we have to be in some kind of reasoning that, if we want to design supply chain we have to think globaly. And if we want to design globaly supply chain we have to do two major steps. Those steps are Global supply chain formation, and the second major step is Building governance mechanisms or frameworks for partner selection, coordination and control. When we talk about first step – Global supply chain formation, that step has additional five steps, and the first step of those is to Map the supply chain ecosystem for the Industry vertical. Now, when we know what is Supply chain ecosystem in global, we can say what it is in a certain way. So, Supply chain ecosystem consist of four major parts, and those are Supply Chain, Resourses, Institutions and Delivery services mechanisms. So every person who wants to run a business have to think about those four major parts, if he (she) wants to mitigate risks. And that would be in some kind in short said.

 

 

2. How it’s implemented and what are some other risks involved?

 

Well, anybody who wants to implement (steps of) Suplly chain (ecosystem) in their business should think about those four steps, expecially micro and middle scale organisations, and this (interview) is intented for them, because large companies have teams of people who work on those issues, but micro and middle scale companies don’t have that experience and those questions are here to help them to mitigate their own risks. But not only for them, large company can do better with this Supply Chain ecosystem as well.

Risk are in those four parts I mentioned. If we talk about resources, what are the risks? Risks are, for example, what kind of talents do we have, or, what kind of financilal or natural resources (do we have). When we talk about natural resources – do we have enough iron, for example, for doing our job. In that sense, we have to make a framework to really understand where our risks can pop up, and we have to identified those risks, by maping our supply chain ecosystem, then to mitigate it and finally to manage those risks.

 

 

3. Where are some the results you can expect from supply chain ecosystem?

 

Results are huge. I will mentioned (one) example (what happens when you do not do your homework). Some companies haven’t done their homework and they failed. One example is Land Rover. That company has Contract manufacturer and that manufacturer bring them chasis for their cars. They (Land Rover) didn’t realised that in a Contract they made one mistake and that mistake was if there is a sole manufacturer who gives them a chasis and that manufacturer broke down the Land Rover must give them a money so they can work in future. In that sense, what is a mistake of Land Rover? Land Rover didn’t read the Contract and they made mistake. We have to understand that every problem appears among people we are doing with and of course in a way that we are doing. I just want to mentioned it in a way that we should be really aware of what we are doing and in a what way. Our Supply chain ecosystem just gives us an idea where that problem could be. So, if anybody wants additional explanation of any system that person should employ some specialist in that service.

So, that be the most general answer.

 

 

4. Can you provide us with a brief background of yourself?

 

 

Well, I am Logistics and Supply Chain professionalist.

 

Finished:

Military academy – Logistics Department;

Global Supply Chain Management, with NPTEL – National Programme on Technology Enhanced Learning, Indian Institute of Science, Bangalore

Supply Chain Management – A Learning Perspective, with KAIST – Korea Advanced Institute of Science & Technology, Daedeok Innopolis

 

 

About Aleksandar Maric

 

 

 

 

 

Aleksandar Maric

 

Logistics | Supply Chain Management | IoT | Blockchain | Cloud | OH&S | Training

 

LinkedIn Profile

I interviewed Prashant Sinha who discussed Warehouse Management.

 

 

 

 

 

Can you provide a brief background of yourself?

 

First of all, I actually completed graduations with honors. After that, I completed a diploma in computer education. And then I started my career with the manufacturing industries, the steel industry. There, my role was a store executive. There I was managing automobile spare parts and mobile, etc.

 

I spent almost five years in this company. Then I joined the warehousing industry, like DHL. At DHL, I was handling telecom. I was handling warehouse operations, interaction with the customer to discuss our day to day issues, transport management, and vendor development.

 

After DHL I moved to Mahindra logistics. I have handled some big warehouse operations, transport management, and vendor development. For this, in transport development, I have managed 30 transporters with the company. These are the main achievements for me.

 

 

Can you share with us what you see as some of the challenges involved with warehouse management?

 

Actually, in my last company, before Mahindra, I designed my warehouse according to me, like the layout development. So truly, I would stack material according to our design. And I have allocated alphabetical order in the warehouse. The same, I would display that layout in the main gate as well as in the entrance. So this is the management which I've got in my last company.

 

Do you have any recommendations for dealing with and overcoming challenges in warehouse management?

 

Building transportation. Actually, when I was in Deli, I found challenges in transportation because we had communicated with the customer to deliver the material on time. So this challenges we had traced in Deli, sometimes we have public involvement and all. So we have faced the customer transporter, and there is always with the help of the customer

 

What about opportunities in warehouse management? Can you see any opportunities in the future?

 

There are a lot of opportunities that are in warehouse management. You can see in the supply chain, opportunities and challenges are coming.

 

 

Is there anything else you wanted to discuss regarding this topic?

 

I want to discuss in warehousing, the main thing is your visibility.Your material visibility is very important in warehousing like in the layout, in location mapping, racks. How to display your material in the warehouse, this is the main issue in a warehouse. You need to link to your systems. What material you put in what location, what material you have to put in B location, etc. So this will have to link to your system. You can share data with the salespeople, colleagues, and customers.

 

About Prashant Sinha

 

 

 

 

 

Prashant Sinha

 

Logistics Supply Chain

 

LinkedIn Profile

I interviewed Jit Hinchman who discussed Impact of Transportation Management on Supply Chain Performance during Digital Transformation.

 

 

 

 

 

 

1.   What is Supply Chain Performance?

 

Supply Chain can be viewed as a network of interconnected trading relationships between business organizations across industries and disperse throughout the world in this global economy.

 

Transportation, either through Water carrier, air, pipeline, rail, truck, van, or mixed mode as Intermodal, is the moving part in the supply chain network that physically links between those trading partners, bridging the gap of physical distance to deliver goods between buyers and sellers, and it is one of key enablers of International Trade that helpsbusiness to reach beyond its local home market.

 

Supply Chain Performance can be considered in terms of responsiveness and efficiency of how well its Supply Chain activities to function and meet end-customer needs and requirements while achieving sound financial profitability.

 

2.   What are key drivers that impact Supply Chain Performance?

 

The right Supply Chain performance outcomes that suit each individual organization business need is directly the result from the interactions and right trade-off between key Supply Chain Performance cross-functional drivers that affect one another, these are: Facility, Inventory, Transportation, Information, Sourcing of trading partners, and its Pricing. So, transportation is one of the key drivers that directly impacts Supply Chain Performance.Transportation management is the art and science of coordinating transportation activities to achieve its organization and Supply Chain objectives in terms of delivering the right products with the right cost to, where and when it is needed with the right conditions. Quality of Transportation management impacts Supply Chain Performance directly in terms of service level, customer satisfaction, cost, and speed. It doesn’t matter how excellent the product is in its markets, if organizations fail to deliver it on time, right place, and right conditions, it also fails its Supply Chain Performance and negatively impacts the relationships and trust between trading partners in the network.

 

3.   Why Supply Chain Performance is important?

 

Supply Chain Performance affects nearly 35% of financial performance of apparel retailers. Represents 10-30% of Sales & lost Sales. Represents 5-10% of Sales. Supply Chain Performance is one of a key drivers of retailer’s financial performance. Transportation represents 2-5% of sales. Warehousing represents 3-5%, Store handling represents 3-5%, and Inventory costs 2-5% of sales. While precise fraction will vary for different supply chains, it is evident that supply chain performance along the right mix of six key drivers we mentioned above, has significance on a firm’s financial performance. It deserves attention to take a closer look for ways to improve performance and profitability.

 

4.    What are the challenges Transportation Industry facing in this digital transformation?

 

Digital transformation refers to the changing process associated with the use of applications and integration of digital technology into all areas of a business, fundamentally changing how organizations operate and deliver value to customers. It’s influenced by the incoming of real-time or digital economy, Industry 4.0, the use of Automation, and AI, with the beliefs that Digital Supply Chain can provide the solutions that many organizations nowadays are struggling in terms of real-time demand feedback from customers to smart manufacturers, ready to view dashboard with KPI and insights that has been analyzed from almost real-time data, with the use of Blockchain technology provides more visibility, improve transparency, payments process and cash flow cycle, in turns it helps improving business’s financial performance.

 

Transportation & Logistics Industry has revenue over $100 Billion, it has been hit hard in many areas, in terms of resource scarcity, outdated technology, cost in operations to stay competitive in its market. Trucking dominates transportation industry. The high fuel price, and lacking industry capacity is intensified with time and amount of natural disasters. Almost 3,000 trucking companies gone bankrupt during economy downturn in 2008, eliminated 16% of total industry capacity permanently, majority of ageing driver population that will retire in the next decade or two, ATA mentioned that the US has driver shortage of 100,000 drivers per year to keep up with freight volume growth due to economics needs.High cost of safety and insurance can vary from over $20,000 up to $7 Millions per accident on the road. Difficulty to retain drivers is not new as Traffic World mentioned about this issue on December 12, 1914, and as of now in 2018, trucking companies are still facing the same issue.

 

Many business elements in Transportation Industry are counterproductive, fragmented complexity and interconnected by its nature, it represents the industry’s challenges in its highly competitive market.In the US alone about 6 Million of workforce are in Transportation & Logistics. American Truckers make up to 2% of workforce, 3 Million Drivers, 2.5 Million Trucking Companies, 90% of those fleets operate with less than 6 trucks, 50% are single owner operator, 13,000 companies are brokers, 67% of shippers are still using paper and manual documentation that increases time consuming in each business processes, 20% of truck on the road is empty that is inefficiency in asset utilization. Transportation can be over 40%of the total cost in Logistics function in Supply Chain, represents one the largest cost components, organizations look closely to cut this cost down and often times, Transportation & Logistics found to be one of the weaker links in Supply Chain. The wages of workforce in the transportation and logistics is one of the lower pays compare to other industries, this preventing more attraction to workforce.

 

5.    Is there any recommendation to the industry?

 

Organization and its Supply Chain is aimed to meet customer’s needs and requirements in which, it changes with time while achieving profitability. Today, customers want speed and increased expectations. Transportation & Logistics Industry during digital transformation and beginning of Digital Supply Chain, is challenged with near real-time expectation, increasing in government regulations and control, new competitor entrants, evolving business models, needing of technology savvy workforce, investment in technology and mobile device, improving working conditions and pay incentives, these represent challenges of the industry.

 

With my humble opinion, the industry capacity constraint and driver shortage makes transportation & logistics industry becomes a bottle neck in Supply Chain. To cope with challenges, besides from having automation & AI to help simplifies the complexity and interconnected processes and, the needs to shift into digital transformation, the industry needs to find innovative ways to improve profitability, this includes drive off inefficiency in manual processes and cost, shorten cash-to-cash cycle with more effective billing process, ability to adapt to change, increase visibility and transparency, solutions to cope with driver shortage and available funds to invest in needed technology, the industry might need to consider merging and coordinating those fragmented companies to gain size and strength in the market, taking creative initiatives in using of data analysis platform, similarly to Uber application that can match and map out Driver locations, required Routes of origin and destination points, pickup/drop off locations and time both one way or round trip freight transportation to eliminate empty miles, increase asset utilization, improve customer satisfaction and revenue growth to remain competitive. In the long term, to attract millennials workforce, organizations need to know what value it’s contributed to the business communities, and organizations need to be good and transparent as well to thrive and earn respect in this digital economy where information is shared instantly around the world through social medias.

 

Successful of any business rely mainly on its people. Great mixed of open minded people who well equipped with global knowledge base collectively create a winning organizational culture consciously and unconsciously. People are the seeds to grow the continuing success for business. It’s a universal language once we are cared truly and deeply, we are at our best stage and give our best back in return. Same concept applies in business as business is a set of people, and they will give long lasting drive and will power to help business to prosper in good time and in bad time.

 

Thank you,

 

Jit

 

 

About Jit Hinchman

 

 

 

 

 

Jit Hinchman

 

Engineering and Supply Chain Professional

 

LinkedIn Profile

I interviewed Viliam Kovac who discussed Digital Supply Chain During the Last Mile Distribution.

 

 

 

 

 

 

My first question is can you talk about what is the process involved with this digital supply chain in the last mile distribution?

 

Thank you very much. I'm happy to have the chance to talk about such an exciting topic like the digital supply chain within the last distribution. Yes, of course. When I speak about a process, I'm talking about visibility and traceability during the last mile distribution. And I'm talking about the data, which we're using for compliance, and for efficiency purposes same way.

So usually, the process starts with a product categorisation using the fixed data, like item number, storage conditions or product name etc. With these set data we can build a category — how we transport the product.  Then, using the historical forecasting data for planning,  we define what quantity to be carried to our customers.

 

After that, we add flexible product data from product Serialisation or UDI like batch or lot numbers. Combining this data is going to be a legal requirement in the nearly future as well.

 

Last but not least, we from  Globalworx GmbH, support this process with an Internet of Things, like Intelligent Box, equipped with sensors, and Bluetooth monitors. On this way  — monitors collecting not only the data like temperature but also box sensors gathering data like the pressure, humidity, speed, location, etc..

 

While combining all these data in clouds — fixed data, flexible data and additional data we can use them for further supply chain process management to increase visibility and efficiency.   That means we are more productive from both sides — from compliance as well as from an efficiency point of view. That's the process [inaudible 00:02:11].

 

What about the bottlenecks? Can you talk about bottlenecks that might be faced?

 

Of course. Bottlenecks — what does it mean? For example, If we're handling the data, it means that the data might be wrong, the data might be false or straightforward we do not have enough data to perform the analysis. The bottleneck is also hardware as an interface, e.g. if UDI data are not transmitted correctly, so the conclusion is wrong. That's very critical, and it might cause losing the data, creating a gap, and finally making a different conclusion and data interpretation. The additional bottleneck might be humanity himself or herself. If a man does not understand how to deal with the data and how to interpret the collected data, it is very critical. So that's probably the two-three essential bottlenecks which we're facing too.

 

Can you talk about the opportunities?

 

That's probably the fascinating piece in the discussion. As we are collecting additional data which are available in the process but never have been obtained before with available monitoring tools, now we can move preventive actions in front instead of being only reactive. Now we can be more deterrent regarding product quality as well as process efficiency. We can be more customer-oriented due to be able to better control the process limits and process conditions like speed, weather, location,

 

So I do believe that that's the future, and we need to learn how to use the data collected in the past much more efficient than we're doing now in the future.

 

Can you provide us with a brief background of yourself?

 

Of course. I grew up in Germany. I  have graduated from two universities after then I worked for big multinational companies like Henkel, GSK, Roche. Now I'm running with my partners Globalworx GmbH to help companies to explore digital supply chain compliance and efficiency solutions within the Pharma and Diagnosis industry.

 

 

 

About Viliam Kovac

 

 

 

 

 

Viliam Kovac

 

Global Supply Chain Compliance

 

LinkedIn Profile

I interviewed Suneel Aiyar who discussed Behavioral Economics and its Relations to Supply Chain.

 

 

 

 

 

 

Nice speaking with you today, Suneel. This is going to be an interesting topic on behavioral economics and its relations to supply chain. Can you first provide us with a brief background of yourself?

 

Thanks, Dustin. It's indeed a very exciting subject. I can assure you that. I have worked, I am and my team have worked for decades in the supply chain space helping organizations build their supply chain and operational capabilities in emerging markets, in growth markets, where there has been a [inaudible 0:39] growth, there has been all the uncertainties of inflation, bottleneck infrastructure — all the variables which you can think of. [Inaudible 0:49] availability of skilled people to manage this. We have been extremely proud that we have been able to do a tremendous amount of work and improve the capabilities of organizations. Some of them are multinational corporations, big business houses, and family-owned companies [inaudible 1:12].

 

One thing which comes up [inaudible 1:18] all of this, was a fact they were addressing only the rational part of the supply chain, which means only [inaudible 1:24] in the supply chain. How do you optimize inventory? How do you optimize freight? How do you increase the service levels? This was also about intensive mathematical modeling and process improvements.

 

One thing which caught my attention was that they're only talking about the rational [inaudible 1:45]. How about the emotional part of people in this sector, gamut of things?[Inaudible 1:52]. Today I work with a team of my peers [inaudible 1:58] in different consulting organizations. I’m one of the cofounders of a company called worxogo, which is into the space of managing and improving performance behavior of people using artificial intelligence, AI, and it's tool, specifically focusing on behavior [inaudible 2:20].

 

What is behavioral economics in its relation to supply chain?

 

Let me give a few examples of this. Perhaps that will help you understand. Like I said earlier when we talked about supply chain and its improvement, we talked about optimization, trade-offs, process part of it.

 

There are certain things which [inaudible 2:51] very well across the different initiatives which happen in [inaudible 2:55].It's a very strange phenomenon that when we talk about retail stores stocking for a season, generally there is a tendency to understock the high-margin, high-contribution SKUs and overstock the low-contribution SKUs. It's a very strange phenomenon.

 

So when we look into it, we realize that decisions are being taken by focusing on only one variable... For instance, if it's a high-priced, high-contribution item, the [inaudible 3:33] goes to, "Hey look. I got to [inaudible 3:38]." This is a very, very high-contribution stock.

 

So the payoff between ordering costs and carrying costs is not taken optimally. Well, I consider the low-value items, low [inaudible 3:52] SKUs, people think, "Let's [inaudible 3:53]. Let me order this in bunch. Let me [inaudible 3:56]."

 

So as a tendency, there is a huge [inaudible 4:00] leakage during seasons. And surprisingly, the human behavior is very different. The [inaudible 4:07].

 

The second intriguing [inaudible 4:12] when we look at the projects.A large number of projects [inaudible 4:17] delayed for some reason or another. Of course, there is been [inaudible 4:20] improvement to [inaudible 4:22] these projects better. One thing which stands out is how do people estimate time taken for a project.

 

Project after project, there is this over-confidence bias. If I am given, how much time will it take? I've been [inaudible 4:37] the times, being very optimistic about it. And there is wishful thinking which creates it. So [inaudible 4:44].

 

The third aspect is a lot of these organizations that I've dealt with talk about global sourcing. But when it comes to moving beyond the current suppliers, they're suppliers. For example, all Chinese suppliers, they're going to be low-cost. But we really don't know about quality, which is really not the [inaudible 5:10] in the market. There is a certain confirmation bias [inaudible 5:13] in the mind. So there is a humongous applicability of all this is the supply chain — demand forecasting, [inaudible 5:20] marrying supply relationship [inaudible 5:22] managing new products.

 

How is this relevant to supplier relationships?

 

Let me talk about a case. Supplier relationship itself is a large areas, starting from how I identify a supplier, how do I distinguish between whether he's a performing or a potential performing supplier. But let me take a case of execution.

 

Invariably all organizations, [inaudible 5:55] who played a major role in expediting the outsource items. So there are tools today available, a simple ERP tool, like I said, [inaudible 6:10] which gives a [inaudible 6:11] to people.

 

But ask most of them what will they do, how do they follow? [Inaudible 6:17] for them to follow.Generally,it's not a plan. The trigger for them is a shortage which [inaudible 6:25] organization where they work. Why is it so? Why don't they look into the plan? Why do they focus so much on the shortages?

 

One of the reasons is in terms of my mental effort and physical effort as an [inaudible 6:39], the least effort job is to go check through the stores of the [inaudible 6:45], organization and find out where the shortage is. I don't have to focus on millions of thousands of parts. All I need to do is what do I need to do today. And if I succeed in getting that today, I am treated as a hero.

 

So this behavior, this [inaudible 7:02] along with the behavior of [inaudible 7:04], this creates it. So this is very detrimental for managing a plant relationship because it's a most inefficient way of managing things. So what do you do here?

 

The first thing and foremost thing is establish a formal commitment date. A simple formal commitment date between the vendor and the principal organization.But usually, it doesn't happen. Why doesn't it happen?

 

One of the reasons is the companies very often ignore what is their contracted lead time for supplies. There is always a shortage. There is always a [inaudible 7:50] companies [inaudible 7:51] There is always a reason for a part [inaudible 7:54] yesterday. So the commitment dates are not at all followed.

 

So once...Which is a very rational behavior if you look into it — why commitment dates are not followed. Why don't they don't want to follow the commitment behavior? They believe that this is the least risky option of not following commitments.

 

So once you shift to a commitment offer, it induces a great resistance which has to be [inaudible 8:22]. Once you move towards commitment-based behavior just of the schedule-line items, we saw tremendous improvement in supply chain organizations because a factor of trust between the suppliers and the principal increased exponentially. This is just one example of how it can be applied. I won't say that this is only one in thousand for an example, [inaudible 8:48] supplier relationship.

 

Can you share where you've seen some success in putting these concepts into practice?

 

As I spoke to you that my startup, which focuses on various performance behavior engine, we have [inaudible 9:09] around nearly a [inaudible 9:11] users across 25 organizations. We have seen a steep change in performance in the area of sales coming in, revenue growth. We have seen improvement up to 20%, reduction in supply chain lead times, throughput improvement. We have seen the lead times crashing by as high as 50%. Believe it or not, in one case, it crashed [inaudible 9:36] by 70%. The lead times.The supply lead times. Because once they [inaudible 9:41], the waste in the supply chain and the [inaudible 9:44] lead times goes away.

 

We have seen improvement in throughput. We have seen improvement in sales revenue, in productivity. You can name it. We have seen everywhere with confirmed numbers hitting the company's bottom line.

 

And thank you, Suneel, for sharing today.

 

My pleasure. My pleasure.

 

 

 

About Suneel Aiyar

 

 

 

 

 

Suneel Aiyar

 

Behavior / Choice architecture in Operations & Supply Chains - Predictably Irrational

 

LinkedIn Profile

I interviewed Richard Schrader who discussed Supply Chain and Sustainability.

 

 

 

 

 

 

Can you talk about what is supply chain sustainability?

 

Thanks for reaching out. Supply chain and sustainability kind of walk hand in hand. Supply chain sustainability, as we know it right now, is really related to the supply chain principles — the efficient use of resources, maintaining a customer service level, and risk mitigation. Sustainability inside the supply chain is really being pushed by a couple of things. First, you've got global population increase. We're going from 7 billion to 9 billion people. Climate change is increasingly placing pressure on our resources. And since supply chain is the efficient use of resources, we need to be able to respond to that.

 

Things like water. An example would be Cape Town in South Africa is expected to run out of water. The city is expected to run out of water later that month. Electricity and manufacturing, as it's related to population density. Air quality is a critical issue in China, in many Chinese cities right now. And how it impacts our commodities.

 

Commodities, especially crops, are impacted by weather patterns, such as the drought that we saw in southern Europe last year. And supply chain professionals need to be able to meet these challenges and should be ready to basically focus on adaption. If it's going to happen, then how are we going to adapt to it from a supply chain perspective?

 

You need to think about what's your risk mitigation strategy or what's your adaption strategy. Things like can you reduce corporate consumption of water and electricity? Are you in the right location? We here in the United States saw the Los Angeles fires pop up. It's because the population is in an area that is a chaparral. It's really designed to catch on fire, and those trees basically grow based on the fire. The seeds are released, and the carbon is the fertilizer. So we're seeing things like that that make us wonder whether we're in the correct location.

 

Will the increase in weather extremes such as the hurricanes impact your business? I'm in Dallas, Texas, so we saw Houston get hit hard. Puerto Rico got hit multiple times. Again, to kind of wrap it up, we need to take a look at where we're at and how we're going to use our resources and do risk mitigations, especially in industries like the wine industry. Tabasco sauce is made in Louisiana, but there is encroachment based on the sea level increase. Or the Houston hurricane that we had here — is that going to increase? Are the hurricane frequencies going to increase? Are their intensities going to increase? And how is that going to impact our supply chains? Are we able to move things around? And how do we deal with cities that may be under water for several days?

 

Can you share why this is important?

 

The impacts of climate change on supply chain can shut you down. We saw it when I was at Nokia. A lot of our product came over from Europe. There was a volcano, for example. It erupted, and it disrupted our supply chain. We couldn't get our components. So sustainability is very similar to the same thing.

 

In Houston, for example, when the hurricane hit, I work in a health care company, and we make beds for hospitals, but we also rent beds to senior care centers. So when the hurricane, we needed to be able to get rental equipment out to disrupted people. We also needed to be able to take care of our employees since we had people in their locations. That's kind of a double whammy that we ran into because of those situations.

 

But more importantly, customers are increasingly expecting companies to display corporate responsibility on social and environmental matters. So the customers are really asking companies to do that. And it's a supply chain responsibility often because of our imprint, our importance, in supply chain.

 

Supply chain professionals in the future need to ensure they've examined their processes and make sure their suppliers' processes ensure that customer trust is really ensured. You don't want to find out that your suppliers are cutting corners — similar to the issue we had in China with melamine in the milk — or let your supplier's gambles bring you down, like Foxconn had with Apple.

 

Metrics — you need to really implement metrics and confirm your locations so that you don't take impacts to your brand or your business, which can cost millions. Nike, for example, found that out recently — well, not recently —but found that out when they had some switch-out labor issues. You can really use it to your advantage.

 

Some examples are REI — they're known for their supply chain focus, their corporate responsibility — Starbucks; Patagonia, especially; Panera. Companies like that build their brands with their corporate and social responsibility programs.

 

Can you talk more about how it's done effectively?

 

Sustainability and implementing sustainability? Sure. There are a lot of initiatives you hear about. I'll call them topical. Energy, for example. You'll hear about people implementing solar, putting solar on top of the buildings. From a personal perspective and an ROI perspective, it takes a good chunk, maybe 20 years, to receive the benefit of that. If you're a sustainable corporation, then you're thinking a little longer term, and you can recognize that you can get the benefit because you're going to be in business, or you're expecting to be in business for longer than 20 years.

 

Really, what we're seeing now is a lot of focus from the financial organizations. Companies such as BlackRock are requiring their companies... BlackRock has — I don't know — $6 trillion worth of business that they own. And they're reaching into their companies and asking them to respond with corporate responsibility, responses such as diversity — making sure that there's diversity in the corporations, making sure that they're dealing with gender balance. Those are increasingly measured. The global reporting initiative, GRI, releases sustainability reports. So there are metrics in place. And companies' performance and effectiveness, to your question, are being metric-ed and measured and balanced against each other. So really, a lot of the most recent push we've seen is from the financial sector — the investors and the shareholders, because often they have shared values with sustainability — are expecting that of corporations going forward.

 

A lot of it is maybe different than what we've typically done in the supply chain, which is supply chain optimization —how do we do things cheaper, faster; how do we do it better —and really expecting us to lean forward and take a leadership position and make sure that our footprint and our impact as supply chain professionals is consistent with what our shareholders and the financial community is expecting because they're influenced by the consumers. And we've seen that younger generations are increasingly focused on these environmental issues and social justice issues and making sure that the environment is taken in consideration. That also has to be balanced with the running a business, being financially responsible, and making sure that there is an ROI on that implementation.

 

Can you provide a brief background of yourself?

 

I did my undergrad in international studies and realized that you really couldn't find a job after getting a BA in international studies except with the CIA. That didn't really appeal to me. So I got my MBA in operations and ended up in supply chain for 20 years. I worked with companies like Gillette up in Boston. I went to Corning out in Toledo, Ohio. Nokia and Samsung — I was in telecommunications for about 10 years. And currently, I'm in health care here at Joerns as director of purchasing and inventory. Most recently, I decided to expand.

 

One of the reasons that I got interested in supply chain is because it's a big problem. It's got a lot of moving pieces. And after 20 years, you start to see the pieces come today, and you start looking for where is the innovation and where is the bigger problem. And climate change seems to be a big problem, so I went back to school. I'm in the back half of getting a second master’s at Harvard University right now. So that's a little bit about my background.

 

Well, thanks again for sharing today, Richard.

 

Thanks again, Dustin. Thanks for calling.

 

 

 

About Richard Schrader

 

 

 

 

 

Richard Schrader

 

Director Supply Chain Planning

 

LinkedIn Profile

I interviewed Akhil Srivastava who discussed Blockchain as an Enterprise for Supply Chain.

 

 

 

 

 

How will blockchainimpact the supply chain?

 

That's an amazing topic, Dustin. In fact, there is so much excitement, exuberance in the world right now regarding blockchain technology, how it's going to change the world, how blockchain is moving the things around. And if you look at Bitcoin, Ethereum, and all the ICOs coming around, it definitely in the talk of the town, every place.

 

How I see blockchain going forward is it adds a lot of value to the supply chain in particular. The reason is because in our traditional system of supply chains, the value chain across the suppliers is pretty broken. That means every supplier has their own individual or independent system of records. They manage their own systems using different ERP systems. Some of them SAP; some of them use an Oracle; some of them still work on Excel sheets. And there's a lot of paperwork which comes across when you translate the value from one channel partner or one supplier down the stream. This results in a broken chain of records. And hence, the problem is not having a seamless information flow across the various [inaudible 1:35] of the value chain. That's what blockchain brings as a value of unifying the entire value chain, having one system of records.

 

What does blockchain bring, uniquely, as value?

 

That's, again, a very interesting question because blockchain is a pretty nascent concept wherein we see blockchain brings four requisite features which will enable all those facilities of track and trace, facilities of one system of records. And those four features are, A, the blockchain is a pretty asset-light facility. You don't need additional infrastructure or anything. It's only cloud. It's a pretty internet-savvy thing, and you just get the things from the internet onto the blockchain. So that's one.

 

Second, the blockchain brings immutability with it, which means if one of the stakeholders writes something on the blockchain, it goes by the chain of custody, and it cannot be edited or deleted. And hence, the verification is pretty, pretty easy in the blockchain.

 

Third, it's a pretty iron-clad system of custody, which is, if you look into, it's a pretty, pretty robust system which cannot be broken across because it goes from one channel partner to another in a very crypted way. It's encrypted messages. And hence, they're hack-proof.

 

The fourth and the most importatn thing is these are all online real-time business information flow accredited across various stakeholders. And hence, the system of records is pretty much on-time and real-time basis. All these features enable blockchain to help democratize the flow of information and, hence, help receive and provide people information on a real-time basis, which is both verifiable as well as, at the same time, secure because it's encrypted.

 

What fundamentals have changed that blockchain has become so much of a limelight?

 

I believe 2008 onwards, the crisis itself was a great understanding of why information flow on a real-time basis is so important. So, for example, [inaudible 4:04], which the world saw in the 2008 economic [inaudible 4:10] meltdown was that the information was in various silos, in various buckets, and not available to everyone at the same time.

 

So what blockchain brings is it brings single-proof of concept. It brings a single platform to have every information in one place. And that's where it [inaudible 4:35] the typical problem of [inaudible 4:37] spend, which is what we saw when the economic crisis happened — that the same asset was being leveraged two to three times to get loans on it. And hence, the liability and asset had a mismatch. That's one fundamental change.

 

Second is the world is moving pretty much fast on having a lot of Internet of Things as the instruments across...So we'll have close to 30 billion IoT devices. These devices are all on the cloud. The cloud system, per se, has improved, and when we say one world and network, one connected network, it's what has helped blockchain enable and reach every nook and corner by using the power of internet.

 

What will be the future of supply chain in advent of blockchain technology?

 

As we discussed in our previous series, the supply chain 4.0 where we were looking at digitization, well, blockchain will enable digital flow of information, which is one source of truth, which is available to everyone to make a decision and which awaits any fraudulent claims or any biases in the system, and hence, dissolves disputes then and there. [Inaudible 5:55] because everyone who is involved as a stakeholder has the same level of verified and secure information.

 

That in itself is a very, very empowering thing for the stakeholders to make and take course.

 

 

About Christoph Szakowski

 

 

 

 

 

 

Akhil Srivastava

 

Strategy,Sales,Supply Chain,Product Management

 

LinkedIn Profile

I interviewed Jayanandhan Vasudevan who discussed Transformation of Large-scale Consumer Goods Distribution.

 

 

 

 

 

 

I've been in supply chain for close to 15 years now. I've handled roles across front-end distribution supply chain and the manufacturing supply chain. My span of experience has been in the Petrochemicals and Consumer Goods industry, predominantly from the consumer goods industry.I've handled large-scale distribution of food and non-food operations. That's the background. We deal with close to 4,000+ active SKUs, and we ship it to the customers.

 

So my experience encompasses front-end distribution and the manufacturing. And it's been in two markets – in India and in the Middle East.

 

Can you talk about what you've done regarding the transformation of large-scale consumer goods distribution?

 

What we've done here is mainly transformation of large scale logistics operation. The objective of the transformation was to optimize the cost across different businesses because of the changing business environment in the Middle East:

 

-There is a stagnation of business growth and profitability is to be secured.

-Change of Regulatory guidelines has forced business to rethink the logistics operations processes.

 

We have built a large distribution center to manage all of the businesses from one area. Earlier, each business had its own traditional warehouse set up; they were working in multiple silos. We have moved all these operations to one central distribution center. This has given us a huge synergy from an operations standpoint. We have been able to integrate the business into a modern operation, and have been able to save costs by close to 20%.

 

How we have been able to achieve this – Consolidation of demand and centralized distribution to customers. Earlier, each business would have its own logistics operation, but it's not optimal due to lack of “Economies of Scale”. By moving to the central distribution center, we have been able to consolidate the demand across different businesses, and we've been able to service our customers in a more efficient and productive manner.

 

And how we have been able to do this...I would say that Technology has enabled this change in a big way.We have used a mix of SAP warehouse management system and Mechanisation of our logistics operation-Introduction of Reach trucks, High Density Storage racks (Mobile/Shuttle) ,and usage of hand-held terminals for all the Putaway/Pick operations has enabled us to gain efficiency improvements.

 

Do you have any other recommendations? Any final recommendations regarding the transformation of supply chains?

 

I can talk from a Middle East standpoint. When you go for a supply chain transformation, first, you need to understand your baseline very effectively. Most of the companies go wrong on that front. They don't know what the objective of the transformation is. In our case, we had cost as an objective. It had to be in line with the regulatory requirement and also to meet the service level objective. Companies need to define their baseline very effectively. What are the long-term requirements from the current setup to the future setup?

 

It can either be a setup of large distribution center or Change the processes to receive and distribute the goods to the downstream demand center. They need to have a clear, long-term roadmap or at least an objective; this is a must to realize benefits from any transformation exercise.

 

So once you have the roadmap, then you need to build the blocks as to what can take me there. There can be multiple options that can go for assessment, the best option in line with the market scenarios is to be taken up for implementation.

 

Thanks for sharing today on this important topic of transformation of the supply chain. Did we cover all the points that you wanted to discuss?

 

  1. No.I have few points on IT systems.In modern supply chain, IT is a key enabler for large scale Logistics operations. It can be in the use of Mobility/Use of RFID/Hand held terminal for distribution center.

 

Most of the technologies are still in its nascent stage, but one needs to adopt the best technology in line with their business requirement. So here in the Middle East, RFID is not used in a big way, but we are extensively using barcode technology and mobility tools to gain efficiency in our operation.

 

Movement to mobility has enabled us to crash the “Order to Pick lead time” and enables us to serve customer demands in a faster manner.

 

We have been the pioneers to adapt technology for large scale logistics operation in our region, this has enabled us to improve our service and win in the market place.

 

 

 

About Jayanandhan Vasudevan

 

 

 

Jayanandhan Vasudevan

 

Head-Supply Chain at Khimji Ramdas LLC

 

LinkedIn Profile