On a whole, modern day supply chains have gone through a sea of change after the pandemic, and are further put to test in light of the ongoing economic and geo-political situations. Amid such ups and downs of the industry graph, it is important for supply chain managers to apply their best tactics towards handling all the challenges thrown at them, while also grabbing even the miniscule opportunities of growth. After all, there is a lot to take care of apart from simple demand and supply balance – and a brand is judged by each of these parameters. We asked Abhinav Kumar Sinha, Head of Control Tower & Supply Operations (Africa India Middle East), Michelin Tyres, about such an assortment of parameters and what it takes to excel as a supply chain manager.
Q] How has Integrated Business Planning (IBP) emerged as an essential for successful supply chains?
The world of supply chain is all about being dynamic and holistic while taking decisions and being resilient while executing the same. IBP as a process is designed to break the functional silos and drive the decision making with a data driven approach. There are five key components of IBP, namely:
1. Demand Planning: Helps capture unconstrained demand
2. Supply planning: Plots the capacity view over the demand
3. Integrated reconciliation: Brings in the financial view to the demand and supply exercise with scenario planning
4. Management business review: Leadership overview and steering using inputs
5. Product management review: Providing the futuristic view on portfolio bridging the journey to strategic targets.
This provides a governance model to ensure that the key components which need to be linked up for business steering are in place and the entire organisation is aligned on the same. The process has a good mix of short and long term views required for any healthy business steering. Having a digital backbone to integrate this process is an essential piece in the jigsaw as it’s virtually impossible to manually correlate numerous data points to come up with decision making insights. This backbone can also act as a collaborative tool which essential to break the various silos.
Q] How can one ensure balance between tech and cultural transformation in order to create a seamless end-to-end supply chain?
For any transformation to succeed, the ‘People’ aspect has to be of utmost consideration. Tech transformation has a functional side to it. For this to happen, complete participation and ownership from the teams which will live with the outcome is a necessity. Most common reasons for tech transformations to fail is the improper configuration or misfit of the solution to the business. If we go one step further into the reasons, it will be incomplete participation of functional experts which could be coming out of lack of cultural transformation.
Another aspect necessary is complete trust between different stakeholders of the chain that allows to build a data democratised organisation which in turn is key for a successful tech transformation creating a seamless end to end supply chain.
Q] In your words, “Business decisions need to be filtered through the concept of Circular Economy”. Please elaborate this in the context of supply chain.
Sustainability has both a business case and an ethical case. Circular economy stands on a principle of sustainable sourcing, product design which makes sure that the lifecycle of the product has a lower carbon footprint, recycling and/or reusing to the extent possible. Supply chain, being closely involved in the product design, development, sourcing, manufacturing, storage and movement, has to play a key role in ensuring that the concept of circular economy lies at the heart of all the decision making process.
This is an abridged version of the interview published in the January 2023 issue of Logistics Insider magazine. To read the full interview, click here.