Building Resilient Supply Chain With Integrated Business Planning

Supply chains across the globe experienced fragility on an unprecedented scale due to the onslaught of the COVID-19 pandemic. No business was able to completely evade the wrath brought in by the pandemic. 

Though disruptions in supply chains are inevitable, the need of the hour is to plan and tackle the challenges in an intelligent manner and to build resiliency for the future. Enterprises are now bringing in processes, people and technology together to become flexible and adapt quickly to ever-changing conditions across supply chains.

In a recently concluded roundtable organised by SAP in association with BW Businessworld and CII, top leaders working in the world of supply chain management discussed several topics including the role of intelligent supply chains, increased online consumption of goods, changing consumer attitude, increasing demand from tier-II/tier-III cities, and challenges of reverse logistics. 

Need to successfully cater to increasing consumer expectations online: 

There has been a tectonic shift in the consumer’s shopping behaviour post-pandemic. While digital medium existed before the pandemic as a convenience, it has now turned into a necessity. 

“The consumer base has shifted from going to the nearby shopping store and buy daily-grocery to the online medium, this has put an immense strain on backend supply chain on meeting the demands of giants like Amazon or Flipkart,” said Head of Supply Chain Management at Himalaya Wellness, Neelanchal Panda.

“In terms of supply chain complexity what used to be x before, has now become 5x,” he added.
E-commerce logistics are now speeding up their delivery time to stay relevant as consumers are getting accustomed to quicker deliveries. 

“Sticking to the given timeline is a challenge, now we do not have the luxury of supplying products within days, we have to supply the same within hours,” Panda commented.

Consumers now have a lot of options to choose from while shopping online in comparison to shopping from a local store. 

“With most of us now working from home - which now seems to be the way forward, the consumer has a lot of time to browse around different platforms to select better discounts or quicker deliveries,” Panda highlighted.

Nowadays, online feedback also needs to be paid heed to as it can have a major impact on sales.  \

“The feedback and comments that we get on social media platforms and online channels have to be taken a lot more seriously,” Panda mentioned.

Need to create a future-ready supply chain: 

In order to be ready to tackle the known and unknown challenges of the future, companies need to have a plan in place to respond efficiently to possible exigencies.    

“Organisations which have already established internal processes and integrated supply chain planning or were quick and agile to do the same would have done a better job than those organisations which did nothing,” said AVP –Shared Services – Procurement and Supply Chain at Hindustan Coca-Cola Beverages, Rahul Ligade.

Organisations need to be ready to face any upcoming situation and cater to the demands appropriately.  

“Whether the third wave will come or not is a million-dollar question, but irrespective of that proper business planning should be done to fulfil the future demands,” Ligade said. 

Synchronisation within the organisation also plays a defining role while facing unknown challenges. 

He said, “The units within the organisation which were unsynchronised performed poorly in comparison to those units which are well synchronised. The better-synchronised units were able to deliver their numbers better than the rest.” 

Need to build intelligent supply chains:  

An intelligent supply chain calls for the implementation and leveraging of modern technologies to optimise the various facets of a supply chain. 

Digital Business and Industry Director – Discrete Manufacturing at SAP, Sudakshina Ghosh explained the six essential characteristics of an intelligent supply chain. 

“An intelligent supply chain should be demand-driven, agile, run on connected assets, supported by a connected workforce, embed traceability and should be sustainable in nature,” Ghosh said.

“The concepts of traditional time series, moving averages and historical trend based statistical modelling used for demand forecasting is now redundant as demand volatility increases,” she underlined.

“Demand planners should be able to forecast based on multiple variables such as promotions, seasonality, weather, competitive activities and macro-economic activities including PMI, inflation, etc.,” she added. 

Ghosh explained that the execution processes need to be realigned to cater to the changing and evolving market realities. 

“As changes in customer demands and demands emerging from different channels take place, the challenge is to service this demand while considering micro-market variations and unforeseen supply chain events such as weather-related events and disruptions,” Ghosh said.

She also mentioned that in an intelligent supply chain, the connected assets are enabled by Industry 4.0, and the connected workforce functions in tandem with the support of AR, VR technologies, higher automation and human-machine interfaces. 

Traceability and sustainability are also key elements of a proficient supply chain. Ghosh commented, “Technologies that track the last-mile delivery and capture the consumer experience is at the heart of a supply chain, also supply chains need to be energy efficient and work on reducing carbon footprint.” 

E-commerce boom in Tier-II & Tier-III cities: 

E-commerce growth in Tier-II and Tier-III cities is witnessing a massive surge and is even outpacing the demands of Tier-I cities.

“Demand generated from Tier-II, Tier-III cities is an opportunity for us as it gives us access to a greater consumer set,” said Director and Head Supply Chain at Godrej Consumer Projects Sreekanth Vancheeswaran.

Vancheeswaran though cautioned about the challenges too. He explained, “The new channels are demanding quicker services which, in turn, require better backward logistics to be in place.”  

 The shorter delivery time is also increasing the total cost. Vancheeswaran commented, “There are appointments that we take before deliveries that run into a couple of hours, the complexity of managing these deliveries are taking our cost up,”  

However, Vancheeswaran appeared positive about the future, he said, “We are going through a learning curve of managing partnership as of now, and combining it alongside scale in particular channels, we definitely will be able to lower the costs a bit.” 

“We need to adapt as required to cater to our consumer needs and stay ahead of our competition,” he added.    

Reverse logistics is a big challenge:

“In today’s date, e-commerce is booming, the market is huge, the customer is taking advantage of this fact,” said Supply Chain Operations Head – South India, Pernod Ricard India Harpreet Singh.  

Earlier, returning a product required the customer to go to the store, things have changed now. 

“Nowadays people try everything at their doorstep and can return it too, this is a big challenge for the supply chain as there is a huge cost involved,” Singh commented.

Singh mentioned that one needs to collaborate properly with stakeholders for a smooth process cycle.  

“We need to collaborate with key stakeholders in a manner that will help us improve the productivity and service levels, and also be cost-efficient. This will happen by collaborating and analysing the data and using new initiatives to reduce the entire process cycle,” he said.

Singh also suggested, “Reverse logistics and front logistics can be collaborated in a way to reduce costs and make it more effective for both company and the consumer.”  

Need of an integrated supply chain: 

“An integrated supply chain is of essential value in the current digital era of addressing customer demands, especially when demands are getting more distributed, and managing the logistics of handling and reversing the entire process including payment is challenging,” said Ghosh.

Ghosh mentioned the need to work in synchronisation. She said, “If solutions are disjointed, then the visibility will be lacking,” 

“Also, if there are quality issues or fulfilment issues either related to the vendor partner that we have chosen for the last mile delivery processes, or whether there is an overall logistics issue, we need to have a consolidated view on it,” she added. 

Distributor order management is another challenging aspect for a business.  

“The order can come from multiple and different channels, we need to be able to find the best possible timelines and stick to it. Also, pricing, applying the right offer bundle across various platforms is of key importance,” Ghosh highlighted.

Ensuring all of these above criteria are met requires a massive integration between the front end systems, the supply chain management and the transaction processing system at the back end.  

The panellists concluded the roundtable by stating that the top supply chain priorities in the coming years will be to ensure collaboration within the organisation, cost optimisation and harnessing technology more efficiently.