Digitalization with Supply Chain Technologies
The pandemic has drawn an immense opportunity for the supply chain and manufacturing industry in India. In a recent interaction with the Editor of Siliconindia, Zurvan H. Marolia, Sr. Vice President, Godrej & Boyce, shared his insights on how digitalization is a significant facet that brings transparency to the supply chain.
How is technological adoption aiding in unlocking the potential of supply chain?
It is said that “Competition today is not between manufacturing capabilities competing companies, but between their Supply Chains.” Recent years have seen the introduction of various supply chain technologies. India is on the cusp of a supply chain transformation that may end up being nothing short of a major game changer. The pandemic created the need for reviewing supply chains and with it, an opportunity for remodelling it and enhancing the overall efficiency of the manufacturing industry. It is critically important that organizations understand the determinants of technology adoption by consumers.
Supply chain automation in the organization has aided more in improving efficiencies, connecting applications, and streamlining processes within supply chain. This automated process eliminates manual tasks and reduces operational costs by eliminating a huge number of avoidable emails per year through system integration.
If we gaze at artificial intelligence, self-diagnosis of systems is the most significant facet that brings transparency to the supply chain. And it also gives us lead indicators, which avoids any last-minute surprises. It fulfils the customers’ expectation of reliability, predictability and traceability in the system.
As an organization, we have been working on connecting supply chains, building operational efficiency, and creating the next-gen workspace. At the end of the day, it’s all about customer-centricity. Hence, the required actions need to be focused on the customer.
How is E-waste waste managed in the supply chain? Brief on its impact.
Transition in the IT and communication sectors have exponentially enhanced the usage of electronic equipment. Rapid up-gradation of electronic products forces consumers to scrap old electronic products very quickly, adding e-waste to the solid waste stream.
Almost all e-waste contains recyclable material, plastic, glass, and metals. However, these materials cannot be recycled for other purposes due to improper disposal methods and techniques. If e-waste is dismantled and processed crudely, its toxic components can wreak havoc on the environment and human life, in turn.
Home appliances are one of our products where we have done a lot of work with regard to E-waste recycling programs. The Company has in place well established processes for monitoring and managing different categories of waste generated from its operations. As a brand owner, G&B manages its extended responsibility for collection and channelization of e-waste through partnering with Producer Responsibility Organizations (PROs) by scientifically disposing equivalent quantity of e-waste generated due to sale of its products. G&B is also registered as a ‘brand owner’ with the Central Pollution Control Board (CPCB) under the Plastic Waste Management Rules 2016, amended in 2018. Till the end of FY 21-22, G&B has channelized and ensured proper recycling of 60,480 tons of e-waste.
Considering the adverse impacts caused by untreated e-waste on land, water, and air, the government should motivate new entrepreneurs by providing the necessary financial support and technological guidance. The establishment of start-ups connected with e-waste recycling and disposal should be encouraged by special concessions.
What is the business impact of digital tools in supply chain technologies?
Digital tools have a huge impact on a business’s speed and accuracy. Additionally, shop floor tasks that are repetitive and require low workforce expertise can be executed by digital tools. A digital tool can reduce the human resources in other sectors too. When we talk about digitization in manufacturing processes, the significant area would be within the transfer of information across the supply chain without manual intervention, as well as the monitoring of systems to spot exceptions and highlight the possibility of a deviation.
Operating digital tools requires investment, both in terms of capital and training; the decision of which has to be taken at the top level. To make accurate decisions, managers need access to real-time supply chain data. Deploying digital tools will allow companies to collect, analyze, integrate, and interpret high-quality, up-to-date data. This data can be used to build automation, forecasting, and robotics-all innovations that will replace traditional supply chain management.
While budgeting for investments, there are a few costs (cost leakage areas) generally overlooked. Digitalization provides data with facilitates business in sealing these cost leakage areas.
What are the challenges that digitization has brought in the supply chain?
Digitalization among MSME players is in its infancy, and in some instances, it is yet to take off. Although the pandemic has forced MSME players to digitize, there is a significant skill gap, and this needs to be addressed on priority. There is also a data risk, which the cyber security teams are working towards protecting data both in manufacturing and other components of the supply chain.
Godrej& Boyce had started working on its digitalization journey more than ten years ago. We started building it into our processes by taking time to move towards IOT and industry 4.0. Digitalization helped us to take suppliers along with us. As a result of this process, we can provide suppliers with fundamental management structures helping them enhance productivity, thus getting them to see its benefits and demonstrating automation and digitization could help them grow their businesses.
Data discipline is critical in order to have repeatability and consistency. The benefits of digitalization cannot be seen unless the entire data structure discipline is in place. This exercise will consume a considerable amount of time particularly for those still in the nacent stages of digitalization..
What could we expect in digitized supply chain in the future?
Various studies have anticipated that by 2024, >50% of supply chains will be digitized. The benefit is that we can pinpoint the focused actions. It is an acknowledged fact that competition doesn't happen between companies, it happens between supply chains. Supply chains can make or break a company’s competitiveness. Understanding the criticality of the supply chain and the potential benefits of digitalization is vital.
The future of supply chain digitalization will allow directing consumption shipments. Digitalization will be the cutting edge in enhancing competitiveness and allowing for redefinition of global supply chains. Artificial intelligence, machine learning, and Blockchain technologies will play a vital role in the future. This would enable maximum transparency in the supply chain.
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