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620bf0d930a32_nitie_mumbai_team_prabal.pptx
- 1. TEAM PRABAL HARSH PARASHAR PRATIK NIMJE Changes needed to make India Inc.’s supply chain more Efficient and Responsive PROBLEM STATEMENT Work Experience: 13 Months | Manufacturing | TE Graduation: Mechanical Engineering Work Experience: 21 Months | Sales Operations | L&T Graduation: Mechanical Engineering
- 2. Recent Trends in Indian Supply Chain Logistics • Growth in 3PL & 4PL providers as manufacturing is growing • Emphasis on Cold Supply Chain • Affordable Road transport Warehousing • The warehousing strategy has built on supply chain efficiency rather than the consideration to benefit from tax saving. • Pandemic has pushed warehouses to accelerate automation and decrease human dependency Government Regulations • The new Consumer Protection rules has ensured fair-trade practices in the market • With the implementation of GST, manufacturers have shifted towards tailored supply chain models as per customer requirements. Consumer Behavior & Economic Trends • Almost half (83 percent) of people admit they never thought about how products were delivered prior to the pandemic but now, 77% considers the supply chain when making a purchase Comparisons with Other Supply Chains How is India different as a Supply Chain destination? Technology • Digital Transportation Management Systems are used for complete visibility and control over their transport operations • RFID is used across industries for real time control and transparency • Cloud Technology has made supply chains flexible and resilient Features of Indian Supply Chain Features of Chinese Supply Chain • There is a lack of logistics expertise in India. However, in recent times, companies are focusing on this sector as the critical backbone of economic development • Road transportation market is very fragmented with acute inefficiencies • Advanced logistics services such as supply chain management, inventory management, logistics consulting, and data analytics are still under-developed in India • Unfavorable government policies makes it unattractive for companies to make heavy investments in logistics • Special Economic Zones were created in China in 1980s which made sure that the cities willfully allowed foreign investment to enter China, resulting in the growth of the manufacturing sector • To meet this demand, China had to improve its supply chain, and the first thing they studied was how to bring technology in the logistics sector, which helped reduce the lead time for any shipment from China • China also focused on the Logistics of Everything, where they emphasized customer experience and last-mile delivery. • China articulated mass distribution of goods to various cities and countries. So much so that China can deliver over 140 million packages in a day
- 3. Teething Problems in India Inc’s Supply Chain Demand • Demand is affected in the post Covid era due to job losses, transport problems, weak consumer sentiments, etc. Supply Chain • Industries such as automotive & pharmaceuticals which depend on a single source for their requirements are facing supply chain disruptions Logistics & Transportation • Slow Transit networks • Unavailability of large carriers or large transportation companies with specialized services Warehousing Workforce & Labour Regulations Facility & Infrastructure • Replicating western facility designs pose challenges of working with local contractors • Complexity of a manual but high-volume operations can lead to service failures Investments • Small warehouses carrying only enough inventory to cater a closer customer base • Warehouse management systems are mostly manual with inefficiencies & complexities • The shortage of manpower & reduced working hours have affected the capacity utilization of industries • Skill gap between educated and uneducated people is high • The shortage of manpower & reduced working hours affect the capacity utilization of industries • Skill gap between educated and uneducated people is high • Bureaucratic approach provides hindrance to foreign investments • Corruption, lack of proper infrastructure, not so good labour laws affect foreign investments
- 4. Industry Wise Supply Chain Problems in India Automotive Logistics Agri-Business E-commerce FMCG Complicated Indian Tax Regulations Road Distribution Network Inventory Deployment Reverse Logistics Visibility of Supply Chain Cash On Delivery Availability across distribution channels Taxation woes for FMCG sector Threat of counterfeit goods Lack of proper infrastructure Entry of third-party logistic Close coordination and traceability Scarcity of resources Scope to improve yield Losses in the food chain Consumption moving towards F&V, pulses Multiple intermediaries & lack of traceability Increasing product proliferation Port And Shipping Problems Shortage Of Drivers And Delivery Staff Warehousing And Taxation Discrepancies High costs & Roadblocks in Transportation High Order Intensity Ratio Shortage of talent to fill key roles. Escalating costs of supply chain operations Long term secular growth and volatility High Order Intensity Ratio Growth of exports
- 5. Government Regulations ] Consumer Behavior & Economic Trends Changes needed to make India Inc.’s supply chain more Efficient and Responsive 1. Indian companies need to drive commercial growth from the supply chain 2. Fulfil environmental and social commitment 3. Enable real-time supply chain execution or automate Supply Capacity Visibility and Analysis 4. Provide flexible work experiences 5. Plan Inventory and Capacity Buffers • Transform supply chain into a customer-centric mindset • Develop supply Chain with customer-centric mindset • Measure performance against customer-experience outcomes •Adapt sustainability metrics and accounting methods •Develop the technology product portfolio strategically to incorporate sustainable technologies •Establish auditing procedures and extend them to suppliers and partners • Convert real-time data into real-time analytics • Accelerate investments to enable real-time analytics • Build agility into the strategy to continually adapt to innovative technology • Supply chain employees need to adapt and evolve the skills for a hybrid, flexible and technologically enabled workplace •Technology investments will aid operational execution, making physical processes less differentiating • The simplest way to enhance resilience. • Use contract manufacturers strategically to cater for surge demands • Buffers allow for variability in the planning to keep us flexible amidst uncertainty.
- 6. Government Regulations ] Consumer Behavior & Economic Trends Changes needed to make India Inc.’s supply chain more Efficient and Responsive 6. Manufacturing Network Diversification 7. Multi-sourcing 8. Nearshoring 9. Platform, Product or Plant Harmonization 10. Ecosystem Partnerships • Indian companies need to diversify their manufacturing bases out of specific countries. • The cost of retaining multiple supply chain locations needs to be considered as a cost of doing business rather • Supply chain leaders need to know their supply chain network to categorise suppliers by revenue impact. • Diversification can be achieved by awarding business to additional suppliers • Indian companies need to reduce geographic dependence in their global network and shorten cycle times • Local supply chains allow for more control over inventory and move products closer to the end consumer. • Standardising components can help in harmonisation • Harmonisation simplifies sourcing policies and creates opportunities multiple suppliers • Companies without the scale to support multiple locations on their own, strong relationships with contract manufacturers and global 3PLs can be vital in diversifying production and distribution to different countries. • Consumer demand is volatile and statistical forecasting models have their fundamental limitations.