Zubin PoonawallaCEO – GreenLogiNXT Pvt Ltd

SUPPLY CHAINA FUTURE APPROACH…….

Copyright © 2011. All Rights Reserved

SCM Concept

When deciding a SCM plan, a company needs to consider warehousing, transportation, environmental conditions, cost to the business and potential profit.

Key Factors For Success

Route & vehicle OptimizationCustomer serviceInventory managementTransportationWarehousingTechnologyPackagingLogistics providers

Demand driven Value NetworkIntegrative Improvement System - can be

defined as a standard system that simultaneously and interdependently drives operational improvement across all functions and processes

Three key structural componentsMaturity- and process-based

transformationFunctional integration Sustainability through a three-tier

system 

Integrative Improvement System

Maturity- and process-based transformationTransferring process improvement ownership from technical

experts to front-line teams requires structural reorganization around lateral processes.

Functional integration  The integrative approach is an organization primarily designed around processes, products, and customers, not functions.

Sustainability through a three-tier system  Sustainable improvement does not result from the mere application of improvement tools and processes for example  Lean, Six Sigma, autonomous maintenance, one point lessons etc. Sustainable change requires a three-tier system – management principles, operating systems, and tools

Supply Chain Maturity Matrix

Inventory optimization

The need to better control and optimize inventory levels across the network has never been greater. A newer set of technology tools, generally referred to as Inventory Optimization technology, are helping companies to gain competitive advantage, reduce costs, and increase service levels through significantly enhanced inventory management

Inventory optimization Benefits

• Reductions of 20-40% in inventories of finished goods, components and raw materials trough inventory parameter optimisation.

• Increases of 5-10% in order fulfillment rates and on-time deliveries by network optimisation.

• Reductions in planning effort as a result of the implementation of reliable, automated processes

Different Planning Needs

PLANNING

The companies with effective Planning Process typically have well defined steps, responsibilities for each step and a monthly time table of when the various steps are expected to be completed. Today it is well defined and connected with the help of sophisticated systems to define and analyze.

Talent Management

Analyst research has proven that organizations using talent management strategies and solutions exhibit higher performance than their direct competitors and the market in general. From Fortune 100 global enterprise recruiting and performance management to small and medium business e-recruiting, leading companies invest in talent management to select the best person for each job because they know success is powered by the total talent quality of their workforce

Asset Management

Asset Management helps in tracking each asset and what asset the company owns, who is using them and in which department /location using wide range of handheld devises with bar-coding technology. This is also widely used by retail outlets to help maintain inventory.

Principles Of Asset Management

Set a vision for how your utility will manage assets in the future;

Understand best practices, to apply and to attain the vision;

Define achievable strategies, projects and measures to guide you from where you are now to where you want to be in the future;

Determine what business processes and technologies will be affected by adopting best practices;

Optimize your organization for high efficiency.Identify how information systems can support your

strategies and goals.Prioritize and sequence projects required to attain your

program

Technology & LogisticsIntegrated technology, consulting and

logistics solutions, are providing businesses with a comprehensive range of business solutions to all facets of the supply-chain pipeline; from procurement, order fulfillment, product Lifecycle management, end-to-end logistics and program management through to analysis and reporting.

Besides technology also helps in labor management, route tracking, warehouse maintenance ,inventory ,transport management, customer & order management and demand planning

Technology & logistics

Technology & Route OptimizationRoute Planning is a transport route optimization software

for Logistics and BPO industry. Route Planning utilizes state of the art

technology to help BPO companies optimize routes and generate huge cost savings and operational efficiency.

Using a GIS based map of the city, Route Planning deploys proven

proprietary algorithms to generate the most efficient routes,

customized to your business needs. It provides optimum fleet

utilization, efficient information flow, what-if analysis and detailed

reports. More & More logistic players are using technology to get value for fleet management.

Packaging & technology Despite a global recession, emphasis is on innovation in design, choice of

materials, processing, and life cycle logistics. The future of packaging is in sustainability. Environmentally conscious decisions are being prevalent today and more and

more importance given to it being environmentally friendly. Walmart continues to be on the forefront of sustainable packaging in the retail

arena.  Although the retail giant has achieved many of its environmental goals such as plastic bag reduction, it continues to be unable to eliminate PVC from private-label packaging. As sustainable packaging evolves, Walmart will continue to strive in achieving its PVC elimination goals.

Many other large companies are following suit including Proctor & Gamble. Very recently, they announced plans to use sugarcane-derived plastic on selected packaging for its Pantene Pro-V, Covergirl and Max Factor brands to increase its sustainability credentials. The strategy by P&G is completely consumer-driven.

Transportation• The road freight segment in India is gradually evolving from being a pure transportation business to a complete, service-based, end-to-end logistics solutions industry.

• Increase in competition and private investments happening getting more players

• Many players have tied up with large clients, particularly in the automotive, pharmaceutical, and retail sector to provide complete supply chain solutions.

• Large fleet operators have been looking at providing multi-model logistics solutions via a combination of rail and road network and exploring opportunities in this area through:

(a) JVs / partners with container cargo movers

(b) long-term rake hire contracts with the railways.

 

Transportation - Shipping

The skills on fleet management are centered in port operations ,warehousing and cost effectiveness, but also on how to cope with incidents, thus realizing safe and environmental friendly operations

Transportation - Air

Source: World Market Forecast

RPK billions

Transportation - RailwaysThe importance of railways to port logistics creates a dependence of the ports upon highly reliable railway service.

i) Lower transportation costii) Higher reliabilityiii) Relatively safer and secureiv) Very environmentally friendlyv) Reduced accidents.

The freight segment accounts for roughly two thirds of railway’s revenues.

Transportation -Emerging concepts

The Companies in logistics for procurement, manufacturing, and sales, aiming to reduce CO2 emissions and costs. For example, the monthly transportation volume of products and parts from China to Japan is enough to fill 400 40-foot containers. To the Americas and Europe, products and parts of a volume equivalent to 1,000 40-foot containers are shipped from China each month. Given these volumes, efficiency improvement in logistics is an important issue in promoting business on a global scale.

Importance is now given to cargo carrying efficiency through reviewing packaging materials and mixed packing, modal shifts among warehouses, direct deliveries to customers, and by optimizing transportation routes through the introduction of the milk run system. The aim is to reduce wastage related to packaging materials, transportation, space, trans-shipment, and storage.

Warehousing One of the most important element of supply chain management is warehousing. The proper storage and tracking of inventory ensures that delivery times are met and asset management Services costs are reduced.

Warehousing facilities are completely equipped to handle all kinds of cargo. They are well guarded and spacious, provide complete safety of the goods. Keeping the goods intact and impervious to any kind of damage. Outsourcing the warehouses has become more and more competitive

Warehouse Management

The selection of location of ware house has long term repercussions in reducing the operating cost and smooth running of operations

The store layout are easy movement of material, good housekeeping, sufficient space for men and material handling equipment, and optimum utilization of available storage space.

Depending upon the type of material to be stored in the warehouse, number of people involved in the handling operation, design the infrastructure and facilities of warehouse.

 Today letting out warehouses are building one has become lucrative business

SCM FutureSegment customers based on the service needs Analysis can be used to segment customers

based on "buying behaviors," and network models can be used to calculate the cost-to-serve of each segment under varying scenarios.

Strategic sourcing analyses should be undertaken, followed by the installation of e-procurement software to sustain the savings identified, on an ongoing basis.

Supply chain planning technology should be implemented - it is the critical link between supply chain strategy and supply chain operations.

3 Party Logistics

It has been found that 64 percent of the study’s respondents are using more 3PL-based services, with 42 percent of total logistics expenditures allocated for outsourcing and another 58 percent citing how they are reducing or consolidating their 3PL partners.

Private investors are getting more and more involved and play a role in getting into all areas of logistics and thus affecting nature of the global economy continues to impact buyers of logistics services.

Information technologies are a necessary element of 3PL expertise and are becoming a must with the 3PL providers. In recent years the gap has narrowed, with 93 percent viewing IT as a necessary element of 3PL expertise and 54 percent of shippers indicating they are satisfied with 3PL IT capabilities.

ecommerceThe trend of outsourcing logistics solutions has

led companies Internet based e-commerce outsourcing solutions.

They have formed an alliance with all the players in the logistics sphere have global coverage.

E-commerce already is substantially influencing business in Asia. More and more people are using it to get to the core of supply chain and minimize the time of response to the end customer and have real time inventory system

The Future Of Supply Chain

The three A’S

AGILEADAPTABLEALIGNED

Future of Supply Chain Market Sensitive - The company should be able to read and

understand the demand in the market as well as being able to respond to it.

Virtual Supply Chain-This is information-based. By using information technology applications, such as electronic data interchange (EDI), all parties through the supply chain have access to real and same demand information, and the data will not be distorted by being transferred from one stop to another, through the supply chain

Process Integration - more companies outsource every functions, except their core competencies, these kind of integration and trust-based relationships become more crucial. Collaboration has become the key word

Network –It is important to empower all the parties in the supply chain, and applying better relationship management, structure and co-ordination

Challenges Today The main challenges facing manufacturing companies, both now

and increasingly in the future are: increasing competition, changing relationships with business stakeholders, increasingly demanding customers growth in new technology global distribution of design and production environmental legislation political and economic factors.

Manufacturing companies need to respond in the following ways: be more responsive to changing markets be more customer focused be adaptable to new situations form alliances and partnerships manage the strategic supply chain minimize the time-to-market of new products utilize the developing technologies for global communication

Future of Supply ChainBusiness Performance Consulting:Business Performance Consulting

services to continuously monitor and review the overall performance of the business operations, processes, and results against set standards and metrics. Assist customers to keep track of their long-term and short-term operational goals, both quantitatively and qualitatively.

Corporate Performance Management Key Methodologies

Balanced ScorecardSix Sigma, EFQMEVA, Intangible Asset ManagementActivity based Costing / ManagementBenchmarking

Key TechnologiesPoint Solutions, CPM SuitesData WarehousingBusiness IntelligenceDashboards & Scorecards

Process Consulting Business Process Consulting services include BPR,

Package Assessment and Remediation, CRM processes

and Supply Chain processes.

Business Process Re-engineering (BPR) Services Business Process Re-engineering services focus on these areas and strive to achieve a radical improvement by using comprehensive process analysis and redesign techniques.Assessment and DiagnosticsTransformation and InnovationChange Management is an integral part of this methodology.

Business Process Re-engineering Methodology

Drivers for Supply Chain Change

Key Measures for success

A ‘transparent’ supply chain in which information is made visible across your organization, and to appropriate partners, to enable better planning and resource allocation

Procurement sourcing strategies and systems that create lower acquisition costs

Demand planning and sales-and-order processes for better forecasting, loading and delivery performance

Lean strategies for asset and inventory optimization Supplier and customer relationship management strategies to

sustain the trading network and improve purchase-to-payment management

Green initiatives to ensure the cost effectiveness, regulatory compliance and corporate credibility of the supply network

Risk management and contingency strategies to ensure that your supply network never lets you down

Cost of Logistics Today

THANK - YOU