HOW TO UNLOCK CASH AND ENHANCE SUPPLY CHAIN …

HOW TO UNLOCK CASH AND ENHANCE SUPPLY CHAIN RESILIENCE POST COVID-19

Anirban Bhattacharyya Ravi Prasad

DISCLAIMER: The statistics and opinions expressed in this power point presentation are based exclusively on information provided by invitees and speakers who participated in the [How to Unlock Cash and Enhance Supply Chain Resilience] webinar. Intueri Consulting – Trinamix - Amplo Global have not verified the accuracy of such statistics and opinions and expressly disclaims any responsibility or liability for doing so. Intueri Consulting – Trinamix – AmploGlobal cautions readers not to consider the information and statistics in this presentation as factual or accurately correct.

Ambarish Dasgupta


AGENDA

• Introduction & Format• Polling process

• Major Topics

• Risks and Challenges Arising Due to Demand Slump• Role of People and Technology in Building Resilience• Enabling the Value chain using Technology and Way

Forward

• Cycle of Revival – A Structured Approach to Unlock Cash and Build a Resilient Supply Chain

• Q&A and Key Takeaways

Please disable your popup blocker


Webinar Hygiene Factors

• For minimal disruption we have disabled the Video and Audio for all attendees – apologies for the inconvenience caused !

• Please direct all questions through the Q&A option

• Poll Questions – Each poll question will be visible for 60 seconds – the results will be consolidated and shared at the end

Please disable your popup blocker


Our Speakers in this Webinar

Pulak GhoshProfessor

Decision Sciences and Center of Public Policy

IIM Bangalore

Rajesh UppalSr. Executive Director (HR&IT)

Maruti Suzuki India Ltd

Prosenjit SenguptaExecutive Vice President and

Chief Digital OfficerThermax Group


Dr. Pulak Ghosh

ProfessorDecision Sciences and Center of Public Policy

IIM Bangalore

Dr. Pulak Ghosh is currently a faculty of Decision Sciences andCenter of Public Policy of the Indian Institute of ManagementBangalore (IIMB). He also holds the IIMB Chair Professor of

Excellence. Prof. Ghosh serves as a Distinguished fellow at Niti-Aayog (Govt of India’s highest policy making body), member ofNational statistics Commission, and consults corporates andGovt. on various issues of policies relating to Finance,Economics, Big Data, AI and emerging technologies andfintech.

Dr. Ghosh was the Advisory group member of Big data at theUnited Nations (UN) Global Pulse, a big data initiative by UN.He is a member of the prestigious Karnataka KnowledgeCommission and Chairman of the big data initiative. Prof.Ghosh was a senior advisor of McKinsey Global for big data,analytics and emerging technologies. He serves in the advisoryboard of various organizations, and member of various nationaland international committees on economics, big data, AI andfintech including serving in the National AI task forcecommittee.


Risks and Challenges Arising

from Demand SlumpDr Pulak Ghosh

ProfessorDecision Sciences and Center of Public Policy

IIM Bangalore

DISCLAIMER: The statistics and opinions expressed in this power point presentation are based exclusively on information provided by invitees and speakers who participated in the [How to Unlock Cash and Enhance Supply ChainResilience] webinar. Intueri Consulting – Trinamix - Amplo Global have not verified the accuracy of such statistics and opinions and expressly disclaims any responsibility or liability for doing so. Intueri Consulting – Trinamix –Amplo Global cautions readers not to consider the information and statistics in this presentation as factual or accurately correct.

PROTECTING EMPLOYEES

RISK IN THE BUSINESS

SUPPLY CHAIN DISRUPTIONS

DEMAND SLUMP

Key Areas in Focus Today



Supply Chain

• Some companies are better prepared than others to mitigate the impact

• Some companies are better prepared than others to respond to this event

• Other companies are scrambling

• Confusion on Essential

• Suppliers plant may be near hotspot

• May not be able to arrange raw material and labour



Produce something which you can sell within your border

1

Undertake scenario planning to better understand how much cash you’ll need and for how long

2

Focus on the cash-to-cash conversion cycle

3

Revisit your variable costs

4

Extend payables, intelligently

5

5-Point Approach



• Companies that have sought to manage supply chain risk through a diversified vendor base and/or strategic stock may fare better– Jugaad

• Most supply chains in India are not lean, and they tend to have bloated inventories

• A key challenge is loss of capacity due to labour shortage

• loss of capacity can be reduced by temporarily reducing product variety.

• The shortage of trucks and drivers means delays in the movement of goods, though the silver lining is that there are fewer goods to move

Observations from Conversations with the Industry



Economy and Demand falling

• Consumption will be come very minimal for next few months- Buying pattern shifts




• Consumer will hold onto the cash

• Inflation going up

• Food shortage

• Retail Non-Performing Assets going up

Pain Points in the Economy


• Fiscal Support is a must to speed up economic recovery

• Encourage Banks to extend credit to businesses

• Fiscal Package- SME/MSME

• GST Refund

Possible way out




Thanks



Rajesh Uppal

Sr. Executive Director (HR&IT)Maruti Suzuki India Ltd

Rajesh Uppal is a Technology professional and IT evangelist,who is a futurist at heart. He drives both the IT and HR

functions at Maruti Suzuki India Limited. He has over 35 yearsof experience in corporate world, spanning diverse roles andresponsibilities ranging from IT, logistics, business analytics,digital transformation, HR, learning & development and CSR.

A thought leader in Information technology and the Auto-business, he’s always taking a long-term vision, recognizestrends, and shifts quickly.

He is a keen student of global best practices and he adaptsthem, whenever possible, to suit local contexts and needs.


Role of People and Technology

in Building ResilienceRajesh Uppal

Sr. Executive Director (HR&IT)Maruti Suzuki India Ltd


Prosenjit Sengupta

Executive Vice President and Chief Digital OfficerThermax Group

Prosenjit Sengupta is the Executive Vice President and Chief Digital Officerof Thermax Group. He is also a member of the Executive Council of ThermaxGroup since 2018.

Prior to Thermax, he held the CIO position in the Volkswagen Group(Volkswagen, Audi, Porsche, Lamborghini) and also headed the group’s Steeringand Governance for Asia Pacific since 2012. He also had a 14 years stint withTata Motors.

A graduate in Electronics Engineering, Prosenjit also has a BusinessManagement degree from Jamnalal Bajaj Institute of Management Studies.He also boasts of several certifications in CRM and digitalization, as well as

numerous felicitations including National Level CIO awards.

A thought leader in the sphere of Digitalization of Business, Prosenjitimplemented multi-country, multi-portfolio operations by implementingstrategic projects like Robotic Process Automation, Business Analytics andIntelligence, PLM, ERP, organisation wide digitalisation and deployment ofCRM and DMS systems to achieve transactional uniformity and processconformity.


Enabling Your Value Chain Using

Technology and Way ForwardProsenjit Sengupta

Executive Vice President and Chief Digital OfficerThermax Group


Remote Working Coverage

Manufac-turing

SupplyChain

EPC ServiceSales ProposalEngineer-

ing

HR

Finance

Collaboration

Online Learning Performance Appraisals FY21 Goals

Invoice / GRN Financial year closing Procurement

Meetings / Reviews Public address Ideation & Sharing


Technology Platform Enablers

Business Functions Technology enablers

Sales

Proposal

Engineering

Manufacturing

Supply chain

EPC

Services

HR, Corporate

Finance

Collaboration


Way Forward

• Identify BU wise functions

• Categorise into 3 WFH buckets – Full, Partial, Zero

• Automate processes

• Simplify workflows

• Digital signature / approvals

• Remote management

• New industry categories

• New product categories

• BYOD setup and policy

• Reimbursement inclusions

• Flexi seats / offices

• Travels and meetings

• Teams, VC, online events

Flexi Office Smart Operations New Business


HOW TO UNLOCK CASH AND ENHANCE SUPPLY CHAIN RESILIENCE POST COVID-19

Ambarish Dasgupta

Senior Partner Intueri Consulting


Insights from our previous webinar

a No, we are facing a demand side problem

b No, we are already highly leveraged

c Yes, we need to finance our working capital

d Yes, but not sure about making the repayments

Supply chain financing or trade financing, which of these

are organizations seeking now given the crunch in

cashflows?

11.2

58.2

5.1

25.5

Has the creation of a nerve center/war room helped you in

managing the crisis effectively? If yes, how are you

reshaping strategies for post COVID-19 era?

a Focus on IP Protection and New product development

b Postponement

c Sister skilling (Group capabilities)

d Delivery restructuring

e No war room created 20.7

44.6

25

16.3

28.3

Will data-driven prediction become more important in

Post-COVID era? If yes, which areas of supply chain will

these predictive insights impact the most?

a Forecasting using AI

bProcurement using AI (identifying sustainable source of supply)

c ML in Production scheduling & Quality management

d All of the above

e None of the above 0.9

68.8

7.1

10.7

12.5

Multiple choices allowed therefore total will not equal 100%

Cycle of Revival

Sustain

Stabilize

Grow



Versatile 4-Point Framework to Guide Cycles of Revival

Sustain the present crisis

Steadiness and Stability

in the new normal

Growth get back into

bold, aggressive moves

Sustain

Stabilize

Grow

Supply Chain Risk

Management

Financial Planning & Cash Flow

Capital Investment


Supply Chain Risk

Management


Capital Investment

4-Point Framework to Resolve Interrelated Business Challenges

Unclear Cash Positions

Cash Collection Issues –Struggling Customers seeking

more credit

Managing stakeholders demanding financial liquidity

Decision making paralysis due to insufficient data

Decline in sales and Covenant Issues

Reduced resilience in key functions, infrastructure, and

services

Challenges Symptoms Effects

Managing interrelated symptoms and effects is a BALANCING ACT

Inefficient capital usage - High DPO, DSO, DIO

Loss of Morale – Stakeholders unrest

Debt Trap

Cash

Capital

Losing customersInability of suppliers to pay

Poor return on assets

Increasing WIP Inventory

Illustrative and not exhaustive


Accomplish “Sustain” in a 3-Phased Approach led by the 4-Point Framework

Set Baseline

Create Cash War Room

Supply Chain Resilience

1

2

3

• Credit rating of Trade

partners

• Alternate Sources of

procurement

• Terms Negotiation

• Supplier financing

• Portfolio rationalization

• Buyer Financing &

credit • Dynamic Discounting

• Budgeting

• Rolling forecast of cash flow

• Simulation & scenario

planning

• Cash to cash cycle

• Setting norms of payables,

• WIP reduction,

• Dispute resolution &

settlement, borrowing vs

internal surplus

• Divestitures

• Asset monetization

• Borrowing vs internal

surplus

• Debt structuring

• Revisit capital

investment plan

Data insight across the supply chain | Digitization transparency | Optimization Algorithm | Forecasting | AI/ML | Automations in factories | Combinatorial technologies

Supply Chain Risk

Management


Capital Investment

Digitally Enabled

Juniper Business Use Only

Set BASELINE

1

Set the Baseline Create a Cash war room Supply Chain Resilience

Sustain

Stabilize

Grow


Develop Baseline Liquidity Levels and Create Cash-Flow Visibility

Cash-Flow Forecasting• Short Term 1-3

month• Mid Term 3-6

month• Long Term >6

month

Identify the Supply Chain Risks and Critical Cost Drivers

Classify them into essential and non-essential expenses

1


A

Model the impact on various scenarios that can play out due to Covid-19

Run Stress tests to identify bottlenecks

Engage with the internal and external stakeholders

Set-up a central point of control (War Room)

Identify performance measurement metrics

Revaluate your reporting/decision making structure

Identify and Forecast Scenario Simulation Prepare War Room B C

Juniper Business Use Only

Create a CASH WAR ROOM

2

Sustain

Stabilize

Grow

Set the Baseline Create a Cash war room Digital Resilience


Sub Levers within 4-point Framework with focus on WC

• Reduce Non-essential Expenses• Reduce Freight/transportation

expenses

• Improve sales efficiency • Reduce transaction costs• Improve productivity

• Delay or Defer interest payments • Renegotiate covenants• Improve credit availability

• Decrease the outstanding receivables

• Increase number of days payables

• Reduce inventory

COGS

Interest Payments

SG&A

Depreciation Disinvestments

Net Income

Working Capital• Revisit Capital

Investment plans


Supply Chain Risk

Management


Capital Investment

Inflow Outflow


WORKING CAPITAL Optimisation is the Quickest Way to Unlock Cash Trapped in the System

Payables

Process

Receivables Inventories

Tactical

Digital

Discipline in enacting changes – Continuous monitoring

Reduce number of payments runs

Establish guidelines / KPI’s

Renegotiate Payment terms

Invoke Force Majeure clauses

Total Working Capital Reduction Potential

Introducing RPA – tendering and supplier selection

Tender Platforms with integrated analytics

Contract Analytics

3% to 8%

4% to 9%

2% to 7%

Levers Actions



Levers

Tactical

Digital

Automatic debit - for larger accounts

Align payment terms with production (Made-to-order, Made-to-stock etc)

Customer-Segmentation

Extend Terms based on customers financial situation and credit score

Renegotiate terms


Prediction / Analytics on customer data

5%

10% to 70%Depends on aggressiveness

3%

Establish guidelines / KPI’s

Order-splitting as per delivery vs customer order

Process

Actions

Dynamic-Discounting



Payables Receivables Inventories


Tactical

Digital

Scenario Planning and Data Based decision making

Daily inventory control measures

Regional/Local supply chain planning

Order as per demand and stop good inflow


Scenario Analysis – What-if scenarios

ERP Parameter Optimisation and safety stock reduction

Demand Analytics

8% to 25%

5% to 20%

7% to 15%

Product Portfolio Optimisation

Revisit reorder level

Process

Levers Actions



Payables Receivables Inventories

Build SUPPLY CHAIN RESILIENCE

3


Sustain

Stabilize

Grow

While a transformation may be a while away – adopting digital solutions NOW will ensure resilience and survival of your supply chain in times to come


Demand PlanningProcurement

/Sourcing

Inbound Logistics

OperationsOutbound Logistics

Inventory Fulfillment

Technological Solutions to build a resilient supply chain with tangible benefits3

Sourcing and Cost Optimization

• Sourcing Strategy & Cost analysis

• Sourcing cost simulation & strategy

• Landed Cost management & optimization

Inventory Distribution & Optimization

• Rapid replenishment• Backlog optimization• Multi Echelon postponement• Cross docking & stock

optimization

Transportation Planning & Asset Monitoring

• Transportation & Freight optimization

• Fleet Monitoring & Route prediction

• Delivery enhancements

MFG visibility Collaboration and Blockchain

• B2B manufacturing collaboration

• B2B procurement collaboration• Multi-Tier Trading Community

collaboration for visibility , tracking and alerts

Demand Sensing & Prediction

• Causal driven forecasting• Promotions Management and

planning• Buffer optimization

Supplier Analysis & Risk Assessment

• Supplier reliability analysis• Supplier risk analysis &

mitigation• Alternate source& Supplier

onboarding

90% Reduction in Cycle Time

33%Increase in New Sales

6% Gross ProfitGrowth

35%Lower Total Cost of Ownership



Colours correspond to the respective organizations

Our Approach and Methodology to deliver the 4-point framework


AQModerator – Ravi Prasad


Key Takeaways

050402

Capacity

shortage

remedied in the

short term by

reducing

product variety

and mix.

Shift ing from

Modular to

standardized

manufacturing

processes.

40,000 Feet

Most players

are focusing on

quick f ixes such

as:

• Diversif ied

vendor base

• Strategic

stock

management

The “Jugaad”

• Support co-

participants

in the supply

chain

• Smart

contracts

with vendors

not relational

interactions

• Incorporate

technology to

enable value

chain

The Solution

• Invest in a

strong

foundation

today, for a

business

transformati

on tomorrow

• Create a

system that

lasts

through the

next cris is

Digital

Resil ience4 – Point

Framework

implemented in

a 3 – Phase

Approach

• Set Baseline

• Create a War

Room

• Create

Supply Chain

Resil ience

through

Technology

Delivery

01 03

CONTACT USGroup Email Id

[email protected]

Phone number(US) Molly Chakraborty +1 510-449-8254(Asia) Ambarish Dasgupta +91 9830037200(Europe) Anirban Bhattacharyya +1 732-575-9230

Documents

HOW TO UNLOCK CASH AND ENHANCE SUPPLY CHAIN …