The Post-Covid Supply Chain Management Scenario in India

Holding an MBA in Operations from Punjabi University, Rahul is seasoned industry professional with 25+ years of experience in commodity procurement, global sourcing, capex procurement, eSourcing, business partnering, contract manufacturing, supply chain planning, change management, risk management and managing global teams. Prior to joining Amway in 2007, he held the role of Sourcing Manager at GSK.

Siliconindia recently got a chance to interact with Rahul Gupta, Sr. VP - Procurement (Europe, India & Central Asia) & Planning (India), Amway about the current supply chain management industry in India and various aspects affecting the same. Below are a few select extracts from the exclusive interview

Tell us about a few key drivers for an effective SCM strategy and its impact on the organization’s overall performance.

The primary determinants that drive effective Supply Chain Management (SCM) include responsiveness to ever-evolving consumer needs, agility, greater transparency of data,  seamless integration across various stakeholders in the entire value chain and innovation. With robust SCM systems in place, supply chain managers get access to real-time accurate data which can be leveraged to improve forecasting and be more agile in responding to evolving consumer needs. Also, adopting the latest cutting-edge technologies helps in streamlining the supply chain. Companies that have a streamlined SCM can benefit greatly from optimized Supply Chain costs to expeditious transaction workflows and increase revenues. If this pandemic has taught us something it is that the Supply Chain is no longer a back-end function, it is as critical to the success of the organization as any other front-end function.  

How has the forecasting and demand planning in SCM evolved post covid?

Supply chain globally has undergone a paradigm shift in the post-pandemic era. As reported by Forbes, a significant majority of Global Supply Chain entities (65 percent) have amplified their investments in cutting-edge technology, with demand forecasting emerging as the primary function to reap substantial benefits. Data-driven demand forecasting has become more important than ever with the crucial role of AI and ML drawing insights from a wealth of real-time sales data. Furthermore, Demand Planning has grown beyond the realm of statistical analysis. It is important to consider extraneous factors like geopolitical developments, inflation, crude and commodity pricing and currency fluctuations, as these parameters have far-reaching consequences on demand patterns. Communication with customers, clients, vendors, and internal stakeholders is vital in the new reality to gather real-time intelligence which in turn will help refine demand plans on a daily basis. Maintaining daily touchpoints with a transparent and collaborative approach remains crucial for success.  

Briefly explain about the impact of Supplier Relationship Management (SRM) in the procurement process.

The overarching purpose of SRM is to develop a mutually beneficial relationship between the organization and its suppliers, especially those deemed most strategic to its effective functioning. If the organization develops a disciplined SRM approach, not only will it be able to optimize its supply chains, but also gain a competitive edge in the marketplace. SRM fosters increased collaboration with the vendors which helps in facilitating innovation and agility. SRM was especially helpful during the recent pandemic and the Russia-Ukraine war as it allowed us to navigate global challenges. To summarize, SRM has moved from an ‘arms-length’ to an ‘arms-around’ approach, thereby benefiting the entire ecosystem.

Tell us about the various types of supply chain risks and ways in which they can be mitigated.

Supply chains worldwide continue to face significant disruptions in global sourcing, manufacturing and logistics processes due to geopolitical scenario, fast-evolving regulatory landscape, volatility, inflation and many other aspects. Events such as the Russia-Ukraine war, its prolonged duration, and extended shutdowns in China have forced supply chains to expand their networks of suppliers and logistics service providers. With rising input costs directly impacting the profitability of organizations, supply chains are leading large-scale productivity and cost optimization initiatives to absorb most of the burden as well as support the cash flow management of the organization.

Resiliency and responsiveness form the core of any form of risk mitigation action. Supply Chain entities across the globe must invest in developing such capabilities and technology plays a major role in developing them with seamless visibility and integration across various nodes of end-to-end Supply Chain operations. To summarize, risk mitigation in the current environment is no longer ‘a nice to do’ aspect for Supply Chains but an activity that needs to be ‘seamlessly integrated’ and be an inherent part of the system.

What are some of the best sustainability practices that can be integrated into supply chain operations?

We adhere to a robust supplier selection process (Amway Global Supplier Qualification Program) in which our suppliers undergo thorough evaluation based on various parameters. The ‘Right First Time’ is not merely a transactional number, but our way of working with our partners to ensure consistent quality each time. Embracing sustainable practices within the Supply Chain is vital for safeguarding the future of our planet and fostering long-term sustainability.

Throw some light on a few of the latest measuring KPIs in SCM to address evolving challenges and opportunities.

Traditionally, supply chain has been focusing on measuring performance on thre primary pillars – Customer Service, Quality and Cost. While these KPIs are able to measure the efficiency of a supply chain, they do not reflect much on effectiveness in the face of disruptions. Therefore, there is an earnest need to develop KPIs that enable organizations to measure, monitor and build on focus areas like resiliency, agility, and sustainability. KPIs around time to recover from a major disruptive event, demand sensing, demand shaping, integrated planning, and flexibility in meeting demand variability would help build on aspects of resiliency and agility of the supply chain. These capabilities have far-reaching benefits not just for the supply chain system, but also for the organization as a whole.