Supply Chain & Manufacturing: A Prescription For What Ails Our Industry

Pradeep Kumar Sharma, Senior General Manager- Supply Chain Management, SUN PHARMA | Monday, 14 October 2019, 05:58 IST

adeep Kumar Sharma, Senior General Manager- Supply Chain Management, SUN PHARMAThere's a lot of talk about how to "fix" manufacturing & Supply Chain issues. What's missing from these conversations is a focus on the costs associated with years of distrust between supply chain partners.

Changing how partners work together, and tearing down the walls of distrust, is essential to accelerating innovation, driving down costs and returning manufacturing to the economic engine it should be.

If you believe that time is money, then every time a

part waits, is reworked or is held, then money is wasted.

When We look at our operation, We see wasted money everywhere: from incoming material that's idle and rework on 0.2% of rejects to finished goods that are held and excess packaging on parts shipped.

This money is wasted because we don't trust our material suppliers, our employees or our customers. In most cases, a single instance of supply chain failure leads to an added expense to all future products.

Across our extended supply chain, We can see the same issues - amplified by a hundred or more suppliers. Each manufacturer adding inventory to smooth production; adding process steps from a long-forgotten corrective action; shuffling pallets because no one knows where exactly to place them; holding finished goods; over-packaging shipments, etc.

“A progressive & collaborative supply chain seeks to coordinate among and across its members to produce and distribute products at the lowest overall costs”

How do you build trust into the manufacturing relationship? It's not easy. Trust cannot be measured; metrics don't help in determining how trustworthy a partner or customer actually is today - or more importantly will be when trouble starts.

All too often, we buy promises, and when disappointed, our disillusion turns into punitive actions that exacerbate the issues we're trying to resolve.

We can change this vicious circle. One successful effort focused on value-stream mapping, and brought partners - both up and down the supply chain - together to work on issues. The effort showcases a model where trust among partners created a foundation for re-engineering the extended supply chain to accommodate lean principles and most importantly, illuminated the requirements for building, maintaining and repairing trust:

• Communication: Partners openly share plans, issues and objectives with one another so that all understand - and can work within - the constraints of all.

• Sincerity: How well partners keep promises is important, of course. The greater measure is how they respond and resolve missed commitments.

• Competence: Honest assessment of each partners' baseline for performance with the resources available to each ensures that expectations are realistic and can be met.

• Reliability: One win does not ensure a sustainable model. Repetition and recurrence must be demonstrated

• Honest Feedback: Regular and rigorous sessions where success -- and failure -- are reviewed and redressed are critical to maintaining mutual trust.

• Seeing the Overall Value Chain: We’re at a critical crossroads in our industry. In every extended supply chain, there's an opportunity for coordination and cooperation that can drive continuous improvement in Supply Chain for more value realization.

While Designing of Forecasting & Planning processes we have to take care.

The Customer Is Always Right

Traditional supply chain planning and execution, based on a static network definition, is reaching its end of life. Whether related to the omni-channel explosion or the sharing economy, the customer’s grip on the point-of-sale is disrupting the status quo, prompting many vigilant companies to rethink and strategize how they go to market. Such companies have been successful in capitalizing on e-commerce and delivering personalized services to consumers. This is in part due to early recognition and separation of their business-to-consumer (B2C) and business-to-business (B2B) models, as well as the fact that B2B customers have started exhibiting purchasing expectations similar to B2C customers.

Interestingly, along with this paradigm shift, has come a new business model defined entirely around customer-centricity. The model, focused on the “new consumer” whose sense of urgency is now, has redefined segmented supply chain planning as we know it. Much has been written about how the consumer’s desire for timeliness (think product availability and delivery) has influenced, and will continue to influence, supply chain operations. In fact, the “new consumer” impact has been so noteworthy that the business model could very well be named “B2Me-Now.”

Customer Expectations are changing

The transition to this B2Me-Now environment has driven by a significant change in how customers approach purchasing decisions. Today, decisions are often made and/or socially influenced on-the-fly, and are therefore not always a true reflection of the historical past. Customers’ decisions are increasingly influenced by the price-competitiveness of the offer & Transparent Supply Chain.

Additionally, the customer’s expectation for real-time visibility into the order lifecycle is soon to become a table stake. customer want to know at all times when their purchases are expected to ship, where they are in transit and when delivery is promised.

Flexible, Fast and Responsive Supply Chain is much needed

To better serve this B2Me-Now consumer & Rush opportunities, companies need to move away from the traditional bi-linear supply chain model and adopt a multi-dimensional supply chain grid model. This grid-based approach adapts traditional planning and execution constructs to better sense and respond to ever-shrinking lead times across the value network. To accomplish this, the traditional enterprise supply chain network can no longer be defined by static connections. Instead, it must be replaced with a dynamic network that can evolve with time and interface with the Internet of Things and emerging digital technologies. This supports real-time sensing and real-time responses, forming the foundation for informed, rapid and optimal-as well as profitable-decisions. The B2MeNow model also requires adaptable supply chain processes to meet the personalized Services.

The Demand Planning Process getting Redefined

The fundamental challenge now lies in how companies should direct their demand-sensing activities. Should it be focused on the product that is being bought, the attributes of the product (such as colour, size, etc.), on the purchaser, the region of consumption, or the price point of the product? This challenge goes beyond traditional forecasting methods; the process calls for additional artificial intelligence to sense and predict future demand across a continuous spectrum, potentially looking past purchasing history to include an increasing number of unstructured data inputs that could shape and enhance the near-term and short-term forecast.

Taking it to the next level Collaboration

High-speed, widely available Internet, cloud applications and mobile devices enable previously unconceived groups of products and services to be developed and offered. But there’s little value in an idea or product if the customer can’t receive it when and where they want it, and this requires an effective and flexible supply chain. New levels of collaboration and visibility are needed, and can be implemented as companies adopt a more mature, always-on supply chain mind-set. For instance:

• A traditional supply chain consists of interdependent organizations involved in the flow and transportation of goods and services from the point-of-origin to delivery to the end customer. Those supply chain partners must collaborate to plan and control the flow of goods and services to meet customer requirements. This calls for transparency to be established with both sell-side and buy-side trading partners.

• A progressive & collaborative supply chain seeks to coordinate among and across its members to produce and distribute products at the lowest overall costs.

• At the most advanced level of collaboration in Supply Chain, an inter-connected grid is utilized, where the related supply chain systems work together to gather, analyse and share real-time information on operations, product movement and resources from all supply chain nodes. This allows participants to order and make inventory movement decisions for a minimum overall cost, while continuously re-directing decisions based on prescriptive analytics as new data becomes available.

These proactive measures & new design will surely fix the current Issue. we will be able to gain more trust and value from our processes.