In Conversation: The Secret Sauce to Managing Efficient Hyperlocal Food Delivery Chains

In today’s rapidly evolving landscape of food retail and quick commerce, the role of supply chain management has become pivotal in ensuring the seamless flow of goods. This industry, characterized by its dynamic nature and ever-changing consumer demands, relies heavily on the expertise of professionals who can navigate its complexities. We delve into the world of supply chain management within the food retail and quick commerce sector through this interview with Sandip Balakrishnan, Director of Supply Chain at Swiggy who brings a wealth of cross-industry exposure and experience to the table, making him well-equipped to address the unique challenges and opportunities within the domain.

With your cross-industry exposure, what are the challenges you typically encounter when it comes to supply chain management in the food retail, manufacturing, and quick commerce industry, and how can they be addressed to ensure customer satisfaction?

The reality is, that it is no longer a VUCA world which is Volatile, Uncertain, Complex, and Ambiguous but a BANI world which is Brittle, Anxious, Non-linear, and Incomprehensible. The understanding of the source, the hedge on the prices, the relationships with vendors and internal customers, the play of supply chain, and the rationale of the new age buying have left organizations to deconstruct and reconstruct the premise of planning for the annum.

Uncertainty is on the rise. Risks in the supply chain primarily arise from volatility in the markets. Changing consumer demand, trade wars, raw material shortages, climate change, stricter environmental regulations, economic uncertainties and policy changes, industrial unrest, etc., contribute to supply chain management risks and challenges. Global supply chains inevitably involve large distances and many steps, making them vulnerable to delays. Long lead times for goods make the shipments susceptible to unexpected delays. Costs of raw materials, energy, freight, and labor have seen a spike around the globe.

To ensure operations without production interruptions and continued delivery of quality goods at reasonable rates – businesses must tighten cost control. Access to supply chain data is key to the efficient management of supply chains. Due to the multitude of data points in global supply chains, data management is a key challenge in supply chain management. The rise in energy prices and the increased demand for container shipping have pushed freight prices. Container shipping demand experienced an increase from the e-commerce surge seen during the pandemic. The pandemic and the consequent supply chain disruption made demand forecasting difficult and nearly impossible to estimate numbers for manufacturing and the inventory to be stocked. Digital transformation through adopting technologies such as IoT, AI, drones and robotics is necessary to improve supply chain operations. However, the major challenge of supply chain management lies in implementing these technologies across existing supply chain operations. The last 4 years have changed how we look at the world as a consumer market, as well as a resource centre, believed in working with the times. Have believed in the concept of SKID – Speed, Know How, Integrity, and Discipline as the formula to sustain success in robust supply chain management in all my roles. Customer satisfaction is a result of synchronized efforts of various functions including Operations, Marketing, Manufacturing, Growth, Quality Assurance, and Supply Chain. The key to great supply chain management lies in pre-emptive procurement decisions, immaculate inventory management, flawless logistics, efficient Warehousing, and quick new product delivery.

With your experience, what specific focus areas would you emphasize to ensure cost optimization, On-Time-In-Full (OTIF) deliveries, and overall logistical efficiencies during peak demand periods?

The inventory management techniques have to be flexible to the industry as they play a pertinent role in cost optimization. The play of stock holding and an evolved distribution mechanism will help in improving efficiencies.

There is a lot of juice to be extracted in the chain here as the line between safe and optimum is paramount in inventory planning. Be it retail, manufacturing, or e-commerce systems have been evolving for the right demand planning, movement planning, and replenishment.

Hedging with a great understanding of raw material market trends is another important area of cost optimization. Buyers have to have an eagle-eye view of the landscape to utilize the best opportunity to buy strategically. The need for upskilling the current workforce has never been more magnified. With progress in analytics and information systems, the focus is on improving supply chain decision-making. Proximity to customer metrics and CX ratings have now become an area of observation by the Supply Chain team too as many of the sourcing and replenishment decisions are impacted by customer feedback. We have seen this extensively in Retail, Manufacturing, and E-commerce.

Two major developments that have helped the supply chain to optimize and improve its delivery are the utilization of third-party acumen in procurement, warehousing and logistics. Increased logistics efficiency often means improved fulfilment times as well. Customers who receive their orders promptly are more likely to feel pleased with your services. Their increased satisfaction also makes them more likely to become repeat customers. By using your efficient logistics to give your customers exemplary service, you can build an extensive, loyal client base and set yourself up for continuing success and profits. We have built systems that are economical because we have focussed on trimming waste and excess. More efficient transportation routes decrease driving times and fuel costs, for instance, and more efficient warehousing strategies allow you to fit more inventory into a space and reduce your storage costs.

This is an abridged version of the complete interview published in the October edition of the Logistics Insider Magazine. To read the complete interview, click here.

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