“There could not have been a better time to be in the supply chain industry…”

There has been an unprecedented focus on supply chains since early 2020. Resilience and agility of supply chains have defined the world in the last couple of years. And not only CEOs, but world leaders too have been speaking of supply chains, which underlines its importance. India is uniquely poised to not only deal with recent challenges but also capitalise on opportunities provided by changing global perspectives for resilient supply chains. In this conversation with Anoop Bansal, Former Vice President – Supply Chain, Jubilant FoodWorks – Domino’s, we touch base on topics covering diverse aspects of the supply chain, leveraging his experience of 25 years. Mr Bansal has worked across various functions of the supply chain in global firms such as Domino’s, McCormick, PepsiCo, Colgate-Palmolive and Fiat Auto, and has recently co-founded UNPAUSE Consulting to provide services to the industry in various areas of the supply chain.

What are top priorities for any chief procurement officer?

With my previous experiences as supply chain leader and recent interactions with industry leaders as cofounder of UNPAUSE Consulting, I would define top priorities for any chief procurement officer (CPO) as below –

High focus on costs – Cost is a very important focus area. Any cost increase can not be simply passed on as pricing to customer or consumer. There has been significant volatility in various commodities driven by many uncontrollable factors – weather disturbances, macro-economic environment, & unexpected geopolitical events, which has a direct impact on the most significant part of any organisation’s cost i.e. direct materials.

CPO needs to focus on reducing buying price volatility and no disadvantage in buying, compared to market prices and competition. This becomes even more challenging in India as there are limited hedging options for many commodities.

Productivity Initiatives – Delivering year on year productivity on cost is equally important. To deliver this effectively requires engaging with various stakeholders – internal (R&D, manufacturing, sales & marketing, finance) and external (suppliers and other ecosystem partners)

Innovations – Ensuring supporting innovations for products and processes. This requires keeping pace with what is happening across industries – technological advancements and various emerging trends. It requires building and nurturing great relationships with suppliers and other ecosystem partners.

Resilient Supply Chain for Business Continuity– Ensuring business continuity in a highly volatile environment. We have seen that the source of volatility can be both internal and external. There can be volatility from demand & from external environments – Strike, Lockdowns, War and any other disruptions. Hence building a resilient supply chain is extremely important.

As can be seen, all above mentioned areas require strong relationships with external ecosystems including suppliers, hence, relationship management or developing partnership with supplier community and ecosystem partners is an important enabler to be focused on by the CPO.

How did COVID-19 bring business continuity into the limelight?

Covid-19 has brought business continuity at centre stage for all supply chains across industries and companies. All CEOs, CSCOs/ CPOs are now focused on business continuity in addition to cost optimisation while ensuring desired service levels which was always the primary objective of Supply Chain functions.

Whole world is now looking at supply chain risks in a structured way and putting a framework to deal with all potential risks and mitigation plans. All industries and companies are evaluating various alternatives for business continuity and are ready to find variation to global supply chain optimisation & single source strategy used till recently.

How important has sustainable sourcing become for companies today? How does it impact their procurement costs?

Increased focus & discussion on ESG has put a very clear focus on sustainability as it is becoming important with all stakeholders. Therefore, it is imperative for all functions of the company and supply chain to focus on this. It is very important to build on responsible and sustainable sourcing as it deals with a large set of external stakeholders and business partners. Companies are looking to source their materials from suppliers who are sustainable and responsible in addition to being large-scale and competitive.

Sustainability includes not only environmental sustainability but also human sustainability. While companies are focusing on environmental sustainability by reducing carbon footprint, water and energy reduction, organisations are also focusing on human sustainability by reducing fat, salts, preservatives etc. in their products.

Consumers are even expecting traceability of the supply chain – knowing which area and farms the product/ingredient has come from. The companies with high priority for ESG are working on all dimensions of sustainability.

 Procurement costs may increase in the short-term at times depending on specific material or commodity, however, this gets normalised over a period of time as every company starts insisting on the same practice from all vendors and this becomes standard industry practice and economies of scale comes into play.

This is an abridged version of the interview published in the January issue of the Logistics Insider Magazine. To read the full interview click here.

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