Post Date : September 21, 2021
With the emergence of an unforeseen crisis as the pandemic, the global economy tailspinned into chaos and unrest owing to the subsequent supply and demand shocks, in addition to the lockdowns that brought businesses to a screeching halt. Supply Chain Resilience alone will stand up as the only resolute force that can wield resistance to unforeseen disruptions. Much as resilience has been at the tip of priorities for businesses in every nook and cranny of the globe, what are some less talked critical points that often go missed? We find out in this issue’s Cover Story.
With the COVID pandemic unfolding, priorities changed across the industries. Supply chain Resilience became a catchphrase for an industry that was trying to make its way out of the choppy waters.
Resilience is reaction, resistance and unwavering grit in the face of an unfathomable crisis. It is the only power factor that can help withstand, predict and overcome disruptions for an unbroken supply chain.
The face of the world changed with the onset of the coronavirus pandemic; leading to a supply shock in China and the subsequent demand shocks everywhere across the world with the collapse and halt of the global economy. Resilience now became the most talked about, delved into topic and concept that suddenly became a priority for organisations, coping under an unforeseen situation.
But what are the salient standalone points that best define resilience for organisations?
- Maintaining unwavering service levels at times of disruptions:
The true mark of resilience lies in offering uninterrupted services at the face of adversity. It is all about maintaining satisfactory to unparalleled service levels even during disruptions.
“To gain a strategic advantage in a competitive environment, firms need to provide satisfactory service levels even in times of disruption, notwithstanding the pandemic we are enduring. What a company does to mitigate such risks reflects the resilience of the organization and supply chain as a whole.”~Lt Colonel Vijay Nair (Veteran), Vice President, Head- Distribution and Logistics, Reliance Retail Ltd (Integrated Electronic SCM)
- Uncovering Supply interruption risks
Supply chain interruptions throw a wrench into the works of an oiled machine. It is crucial to identify and mitigate any risks that are related to delivery of goods from your suppliers whilst analysing the viability of your suppliers. With respect to regulatory and compliance risks, while GST may have provided a respite to a certain extent, FDI regulations and restrictions, however, on cross border e-commerce, compliance rules for labeling and packaging continue to impede smooth flow within the Supply Chain. Thus, it is crucial to uncover underlying risks in the supply chain.
- Building buffer Stock:
Building buffer stock can also help organisations to get ahead and will be particularly important for complex inputs that require collaboration with multiple suppliers, shares Pankaj Kumar Patodi, Head of Supply Chain Management, Godfrey Phillips India. Use of bonded warehouse is today looks unexplored area and knowledge on this front would be helpful to maintain working capital on payment of duty.
“If your supply chain can manage to respond and recover quickly to disruptions by returning to the original situation, or by changing to a new and more desirable situation, you have achieved a mature state of supply chain.”~Pankaj Kumar Patodi, Head of Supply Chain Management, Godfrey Phillips India
- Investing in a robust IT infrastructure:
The importance of investing in a robust IT infrastructure cannot be further stressed at a time when digitalisation has taken centre stage during the pandemic.
“To tackle unexpected and uncertain situations, the sector needs to be well equipped with robust and well-connected IT systems, improved real-time visibility, trained resources, accurate data analysis and a strong risk management system capable of risk identifications and mitigation solutions.”~ Manoj Singh, Senior Vice President & Head – Cargo & Express, Mumbai International Airport Pvt. Ltd(MIAL)
Needless to say, it is critical to adapt planning, alternative processes and risk analysis in the operational SOPs to deal with evolving changes and customer demands in the supply chain.
- The fundamental mantra: Knowing your organisation
The fundamental mantra to building resilience starts from knowing one’s organisation through and through.
“Building resilience fundamentally begins with knowing the value chain and the organisation’s industry dynamics, discovering the inherent risks, putting in systems and technology to detect disruptions as early as possible, channelising the same with agility to the right set decision makers, who can activate the right responses and finally having the operational flexibility to execute the responses in the physical world.”~ Harish Lade, Vice President- Supply Chain, Asian Paints
A well-designed risk management approach would have given lot of supply chains a window to contain the initial disruptions – however, at one point, all known buffers would have exhausted and that is when the key aspect of how the teams come together to find solutions through collaboration and personal commitment is what starts mattering.
- Stronger in a team:
Teamwork will always form one of the core pillars of resilience.
“Teamwork, not just at the organizational level, but the industry itself working as one unit against the common challenge/enemy, interconnectivity between people, places (for example, the offices and warehouses), and vehicles.”~ Vivek Juneja, Founder and Managing Director, Varuna Group
- Partnering with multiple suppliers
One of the critical points that is often overlooked is the importance of partnering with multiple suppliers to ensure safety ahead. Tushar Jani, Group Chairman, Cargo Service Centre Pvt Ltd lends more light and thought to this.
“Partnering with multiple suppliers or manufacturing options ensures that you are not left at risk or without replenishment when your primary supplier is unable to deliver during shortages, shutdowns, or trade restrictions.”~ Tushar Jani, Group Chairman, Cargo Service Centre Pvt Ltd
- Understanding your data
In today’s digital age, data is everything. Having real-time visibility into your supply chain can help build resilience in a number of ways, such as better inventory control, the ability to track supply chain performance, and access to historical inventory and order data. Another way data can secure logistics operations is to measure supply chain performance throughout every stage.
- Having a diverse workforce
In the midst of all adversities, teamwork in the midst of diversity appears to be a power factor that can help triumph over any obstacle. This is the backdrop of why having a united as well as a diverse workforce is crucial to nip the challenges in the bud.
“Organizational resilience is a direct result of having access to a myriad of voices included in decision-making. Diverse backgrounds bring forth different perspectives that help the organization prepare an action plan that negates potential risks in the future.”~ Ketan Kulkarni, CMO and Head- Business Development, Blue Dart
Resilience builds when creative solutions are offered to diffuse complex and unprecedented issues such as the pandemic.
Resilience in the Aviation Sector
When it comes to the aviation sector, what should organisations keep in mind while bringing about supply chain flexibility to weather future supply and demand shocks?
Imagining an airport without traffic for months would simply have been a peculiar thought that would be brushed away to a remote corner of our minds, in the second decade of this digitally connected century. But the worst fears came true last year March 2020 when airports, airlines and passenger traffic, all came to a screeching halt as an immediate consequence of the covid-led lockdowns.
Aviation contributes nearly 4 per cent of the global gross domestic product (GDP) and supports more than 65 million jobs around the world.
The fallout has been unprecedented, with the consequences for the industry already much worse than anything witnessed in recent history.
The travel and tourism industry is expected to lose more than USD1 trillion in revenues this year and close to 200 million jobs, considering the impact not just on business travel but on global tourism as well.
“It is often seen that in matters pertaining to the Supply Chain, one tends to focus more on commercial and contractual clauses from customer-vendor perspective rather than prioritising and co-developing required procedures, plans and facilities for de-risking air cargo supply chains.”~ Saurabh Kumar, CEO, GMR Hyderabad Air Cargo and Logistics
How to Future-proof warehouses
Undeniably so, warehouse remains the most important and usually undermined organ of the supply chain. It is the confluence point of inventory, distribution and data. Warehouses are central to any company’s reputation, as it creates and fulfils customer orders.
Warehouse management systems can help reap immense benefits, especially in simplifying and standardizing processes that lead to increased efficiency and decrease the chance of errors, especially in inbound and outbound fulfilment. With real-time inventory and transaction visibility, WMS is truly the answer to bolstering supply chain resilience in the face of possible disruptions.
Warehouse automation: Changing the landscape
Warehouse automation is the use of various technologies—robotics, conveyors, cloud-based applications, etc.—to eliminate human error from operations. Automated tasks can include the retrieval, sorting, and packaging of inventory while humans replace low-level responsibilities for the management of tech solutions.
“This is the most tech-focused strategy for future-proofing warehousing and distribution.”~Viral Shah – Executive Director, V-Trans (India) Ltd. and Special Incharge, V-Logis
“While most tech investments will have to be rethought as innovative solutions emerge, warehouse automation will set you up for ongoing success”, shares Mr Shah.
Understanding the right approach
Supply chains have always been looked at from the vantage point of ensuring efficiency. Between striving for cost-reduction and seeking an agile supply chain, the question remains that which one reigns supreme.
“While demanding a flexible or agile supply chains is the new buzz word, we should always keep in mind that the specific industry or customer needs a specific supply chain – as each variant comes with its own cost structures, process and technology maturity”, suggests Mr Lade.
This is an abridged version of the article. To read the complete article, click This is an abridged version of the original article that was first published in the September issue of the Logistics Insider magazine. To access the complete unabridged version, get your digital copy now!