Perfecting the Right Balance between Cost and Performance in a Supply Chain

Canon India Pvt Ltd., a 100% subsidiary of Canon Singapore Pte. Ltd. was set up in 1997 and aims to ‘delight customers always’. Canon India supply chain management has adopted high standards of safety and security practices to ensure an unparalleled process of product handling. The company currently has warehouses in 14 different cities and taps 18,026 pin codes across India. Ashutosh Varshney, Head-SCM & Logistics, Canon India Pvt Ltd. in a candid interview with Logistics Insider talks about the company’s corporate philosophy of ‘Kyosei’, their strategy to manage cost and agility, the technologies used and much more. Excerpts follow:

Consumer durable items are expensive and risky to handle. At Canon, how do you keep check on the security and safety of products in your supply chain?

With supply chain management being the backbone at Canon India, we have adopted high standards of safety and security practices, thereby ensuring an unparalleled process of product handling. We achieve this by selecting the best shipping routes and partners to improve the shipping quality. Additionally, we ensure excellent packaging techniques, taking into account storage and shipping conditions to minimise any possibility of damage. Our methodology enables us in safe and secure transportation of our products, without any hindrance.

The trend of free one day last mile deliveries has increased the last mile cost which is borne by the supplier. So, how do you strategise your supply chain while keeping a check on the cost of the product and the agility?

Asset utilisation helps in keeping a check on our costs while ensuring faster deliveries. As a thumb rule, we try to use more assets within a 24-hour period. Underutilised assets, such as vehicle fleets, facilities, or inventory, mean inefficiency and poor return on investment. Having said that, when it comes to managing costs for logistics, it’s important to remember that efficient performance and timely delivery are as significant as reducing logistics costs. Companies must consider both cost and performance and balance them against each other.

Managing inventories are complex and the major peaks in demand and supply of products make it even more challenging. How do you strike the right balance between demand and supply?

Our marketing and sales teams coordinate very well with the supply chain because our demand forecast accuracy remains fairly high. We have a very strong, robust and visible system to forecast on which models are moving fast in markets across India. We also have a very strong and integrated information system across all our supply chain, factory channels, our sales and the distributor. We are well connected through the online system. This makes supply chain management the backbone of operations at Canon India, as it ensures that the product is delivered at the right time, at the right place to the right customer.

What technologies has the supply chain of Canon India adopted and is further looking to adopt in order to stay ahead in the game and keep their customers satisfied?

Canon India’s Supply Chain and Logistics Management keeps evolving in line with our customer and business needs. Our guiding principle is ‘Customer Delight’ and hence we use best in class technology for our supply chain management. Automated information exchange with suppliers and vendors, deliveries as per customer preferred schedule, world class warehouses, advanced MHEs in warehouses, same day delivery etc. are some of the examples of our best in class innovations we use in this domain. We will continue to work towards bringing innovative work methods to contribute to the organisation’s growth.

Canon India serves over 578 towns covering 18,026 pin codes in India. In such a big supply chain network, how do you ensure end-toend shipment visibility in your supply chain?

Our Integrated Information System (IIS) has supported us in serving to over 578 towns and delivering delight to our customers. Visibility of the customer requirements, incoming supplies, transit flow etc. enables us to provide accurate updates to our sales team as well as customers. It also helps us plan the required infra well in advance to execute the deliveries to the customers.

It allows us to increase the volume and complexity of information which needs to be communicated with the inter-trading partners. Secondly, it allows us to provide real-time supply-chain information. Increased access to real-time information enables Canon India to synchronise its inventory level, delivery status, and production planning and scheduling which enables firms to manage and control its supply chain activities. Additionally, it also facilitates the alignment of forecasting and scheduling of operations between Canon India and its supply chain partners, allowing better inter-firms coordination. Exchange of information has revolutionised most of Canon India’s operation leading to greater visibility of end to end shipment.

What steps have canon inculcated in order to move towards green logistics and minimise the environmental burden?

Guided by its corporate philosophy of ‘Kyosei’, Canon India has been conducting environmental conservation activities. One of these activities is green procurement, in which procurement and purchasing of environmentfriendly materials, parts, and products are prioritised when necessary resources are procured and purchased. Canon India would like to proceed with ‘maximisation of Resource Efficiency’ together with suppliers to realise global environment conservation. To attain this objective, the Canon Green Procurement Standards prescribe the conditions for starting dealings with suppliers.

Each supplier is asked to develop and operate an environmental management system related to business activities and the system for management of chemical substances in products to achieve the expected performance level based on the requirements stipulated in the Canon Green Procurement Standards. Based on that, we then evaluate our suppliers.

You are a seasoned professional with an experience of over 3-decades in the industry. What words of wisdom would you like to pass on to the new age professionals stepping in to the world of logistics and supply chain?

Efficiency, productivity and optimisation are the three things every new age professional should focus on before stepping into the world of logistics and supply chain.

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