Current challenges of supply-chain process and scope for improvement for driving the business value :-

In a de-verticalised and outsourced business model, supply chain process functions as an enterprise wide nervous system and ensures integration of both up-stream and down-stream process of the business value chain. The success of the business is squarely dependent on an efficient, agile, flexible and innovative supply chain process. It is imperative to have a well oiled supply chain machine for the business, where growth engines are to drive market share and brand building for achieving shareholder value.

Operating challenges of supply-chain in the present context :-

Number of product sku proliferation for enriching the revue mix and maximizing the product reach and presence in the market place.

Variable supply chain process at the product category level, threatening the supply chain infra-structure and the process to look for more and more flexibility, innovation and responsiveness. Leading to a creation of customized sub-process for these products in terms of stocking, stacking and delivery.

Further, the situation gets even more complicated due to variable market forces and practices, local trade practices and statute and expensive & inadequate infra-structure causing hindrance to the introduction of automation and modernization.

The toll on the process is further imposed due to non-availability of good quality professional people and service providers. The process stabilization effort is constantly getting mulled on the issues like people attrition, service providers SLA [ service level agreement] negotiation. Therefore, there is a substantial quantum of resource, energy and value of the business is getting wasted in training of the new people and service providers.

Interventions in the supply chain process for addressing these challenges :-

Storage hubs are created at the strategic locations for handling aberrations and blips in the demand – supply equations.

Outsourcing of the warehousing processes to third party service providers and performance based SLAs are negotiated

Supply chain process is enabled by IS [ information systems ] for ensuring transparency, traceability, tracking, control, data integrity, operating decision-support and management decision-support.

IT infrastructure in terms of Vsats connectivity for ensuring data acquisition efficiency at source.

Monthly internal audit for physical verification of the stock to ensure compliance of best practices in the areas of storing, stacking and delivery processes of warehouses.

Analysis of current areas of concern in supply chain

Storing, stacking, retrieval and delivery process :- the most critical aspect of supply chain – inventory management and inventory control are two areas concern in the present business context. The issues are
stock mismatch both in terms of excess / shortfall,
code date and remaining shelf life of the inventory
tracking of slow moving and fast moving sku for effective rotation and minimize obsolesces and write-off.
Customer delivery accuracies in terms of quantity, sku and code date
Inadequate storage space resulting in the delay of unloading, stacking and retrieval of the inventory.

People turnover and training :- due to non-variability of the process and fuelled with the increase in the number of sku & volume, the process knowledge management and training is increasing becoming a very daunting task. Further, for every introduction of new process and product, the field communications are not handled in a structured manner by way of training manual and SOP [ standard operating process] documents. The expectations from the field level resources including the service providers are sky high. This is resulting in a huge impact on the work-life balance of the individual resources leading to a huge dissent, resistance to change and leading to attrition. The formal reward and recognition system is also very unwieldy for the resources to draw any inferences for self motivation.

Change management of processes due to ERP implementation :- the mandated objective of the current ERP & its eco-system implementation is to address all supply chain processes comprehensively. The drive is to have an IS intervention to transform the system from transaction support to decision-support. This has resulted an increase in the data acquisition process, data coordination process and transaction process. The decision support systems always require data integrity and data authenticity. This has resulted in the system process design which is more robust and error proof and so-call erstwhile short cuts & compromises in the system have been done away with. These change managements were discussed with operations team at the time of the design but due to the issues of attritions, the same process faced a huge problem at the time of implementation and execution. Dueled by the issue of business scaling up, the entire focus of the supply chain got shifted to execution of the physical operations and in handling the scale. This has resulted in a complete negligence of the system process at the time of implementation in terms of master data, data migration, testing and roll-out by the members of the supply chain operations team. On contrary, the entire implementation was executed by the system support team to aid the physical execution process on ground. This has further created distance between the process operators and system process ownership. The change was never seen as a benefit in the process rather always being termed as hindrance and often labeled as show-stoppers. As a result the HODs of the various supply chain process never could get the change management implemented amongst operators effectively and efficiently. All interventions in the areas of making system usage effective become more and more sporadic and ad hoc. The decision –support reports are therefore by and large desktop driven and personalized.

Aggressive addition of new product sku, increase in volume and godown infra structure:- these are good sign of a progressive and growing business process. That is also an indication of stabilization of the existing processes and practices. Hence, the new product, increase in the volume and godown infra structure – are rollout and replication of the stabilized process. It should not create a stir and chaos in the system. However, the majority of the reasons causing stress on the supply chain process are due the aforesaid issues. The root cause of the same is due to the absence of a structure SOP documents defining clearly the roles and responsibilities of the various stakeholders of the supply chain. In the absence of clarity, it is re-invention or re-visit of the of the same process time and again by various stakeholders. This is further, aggravated by the fact the stakeholders are also at their different stages of their employment life-cycle and experience due to attrition, ineffective knowledge management and sub-optimal system process understanding.

Suggestion:-

In order to bring in efficiencies and effectiveness in the supply chain process – it is imperative that the operating resources must try to decipher the ‘must have’ and ‘nice to have’. Identify the gaps in the current process and then classify the same in their order of priority and intervention. The popular perception of addressing all process pains by introduction of IT [ information technology] must be replaced by the philosophy of ‘ people, process and then system’. The business process is business led and IS enabled.