Post Date : January 21, 2021
In Conversation With Kartik Shah
For the past 75 years, Sennheiser has been shaping the future of the audio industry – that has been the ambition that the company live from day to day. They strive to constantly innovate so as to provide its consumers with clutter-breaking products that offer the best audio quality. To take a glimpse of the supply chain of the company, whose culture is defined by its passion for audio, we reached out to Kartik Shah, Head – Supply Chain & Customer Service, Sennheiser India, who sheds light on the supply chain challenges faced in the electronic space, management of counterfeit products in the segment, importance of collaboration, technological trends and much more. Edited excerpts:
What are some of the challenges involved in managing supply chains in the electronics space? Did the pandemic further exposed these challenges and how?
Supply chains are challenging in today’s world more than ever. There are endless things to consider such as a reduction in cost, safety measures in warehouse and transportation, track and trace, and most importantly, deliver products faster. The key challenges in the consumer electronics industry are:
- Short product life cycle: With the emergence of online platforms and changes in consumer behaviour, you will find new products that turn obsolete faster than ever. The supply chain plays a critical role in making products available on the shelf faster with proper planning and execution.
- Planning & Risk Management: In a normal scenario, inventory for premium products used to be less which resulted in a loss of sales due to COVID-19. This was the time when we realised the importance of the transport mode. We put efforts into streamlining the inventory issue with back to back planning along with firm projection. This helped us in Q2 & Q3 sales realization.
- Cost Control: This is one of the measures which were taken by several organisations during COVID-19. We consolidated shipment while importing- moving them via sea instead of air, segmented our customers for route optimisation, amongst others. This helped us in bringing costs under control to some extent- which in turn helped us in improving efficiency.
What impact did the sudden boom in demand for high-quality audio devices (due to the rise in virtual meetings) had on the distribution and inventory planning of such products?
We usually have low inventories for premium products. We initially lost some orders but promptly acted on it by checking where can we get demand in months to come and accordingly import products through air. We further planned movements via sea in a way that inventories are available MOM. For some products, we realised that production capacity was an issue due to the sudden spike in demand. However, we were fortunate as we provided our forecast well on time. Hence, the overall learning is to have proper planning and projection in place which can only happen with regular interactions between Sales, Marketing & Supply chain.
There is a huge market for counterfeit and fake products, especially when it comes to audio devices. What steps are being taken to ensure that such products do not enter the supply chain?
Every brand wants to protect its consumers from harm. Unfortunately, the internet is replete with counterfeit goods. Not only do fake brands eat into authentic brand revenues, but they also pose risks to consumers. Although it is rare for us as we follow a few stringent practices like exclusive partners network, educate the team across the organisation, and monitoring & enforcement.
How can internal and external collaboration help in achieving an efficient supply chain with better on-shelf availability, customer satisfaction, and increased sales?
This is the space where blockchain and AI will play a big role going forward. All partners would work in sync which will help in giving accurate status and availability. This will not only help in timely availability but would also help in reducing inventories at each stage of the value chain due to transparency.
Organizations need to be agile to be able to respond to short-term changes in the demand or supply quickly. They need to be adaptable as different products use the same components and production processes. They need to be aligned to provide access to all the partners about forecasts, sales data, and plans, and most importantly incentivise them.
This is an abridged version of the original interview that was published in the January edition of the Logistics Insider. Click here to read the full interview.