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Next Generation

Supply Chain 2020

R. Harikumar
Vice President
Supply Chain
Maruti Suzuki India Ltd
Next Generation Supply Chain 2020 @ CII

Topics covered

Current Challenges
Macro Factors to Reshape 2020
Way Forward

Next Generation Supply Chain 2020 @ CII

Difficult times

Uttarakhand
Disaster

Next Generation Supply Chain 2020 @ CII

Current Challenges & pain areas


Volatility in
Commodity
prices

Supplier Risk

Foreign Exchange
Fluctuation

Logistics Congestion

Next Generation Supply Chain 2020 @ CII

Shi fti ng trends ofCostChallenges


Earlier Business
Scenario

Current Challenging
Environment

Cost Plus

Target costing

Build to print

Own Design
Capability

Local suppliers

No Volume
commitment

Global suppliers &


Follow Sourcing
Lifetime Volume
commitment

Stable Market

Volatile Market

Stable Commodity price

Rising Commodity price

Next Generation Supply Chain 2020 @ CII

MSIL Inbound Logistics Overview


NO MILK-RUN
NORTH
242PLANTS

Line Feed

WAREHOUSES AT GURGAON ~ 4-6 KM

MSIL

MSIL Assy. Line

PORT

EAST
5 PLANTS
PORT

WEST
36 PLANTS

70 TRUCKS/ WEEK

NO MILK-RUN

MTL TO MSIL

NO MILK-RUN
MTL TO W/H

EMS Presentation

Next Generation Supply Chain 2020 @ CII

SOUTH
44 PLANTS

Risk exposure & Supply Chain Vulnerability

Next Generation Supply Chain 2020 @ CII

Key to success in difficult times

Supplier

OEMs

Vendor

Working in isolation its difficult to handle the Challenges

Vendor

Supplier

OEMs
Working together in Harmony and Long Term Relationship is the key to
success
Next Generation Supply Chain 2020 @ CII

Macro Factors That Will Reshape 2020


Volatility of Oil
Prices

Pervasive
Powerful
Technologies

Logistics
2020

New Transport
Corridors

GST
Next Generation Supply Chain 2020 @ CII

Supply Chain Ecosystems

Assets

Location
Infrastructure
Industry
Supply Chain
Capability

Supply Chain
Ecosystems
Collaboration
Strategic
Allignment
Partnerships

Outcomes
Lower Cost
Reduced Time
Reduced Risk

Next Generation Supply Chain 2020 @ CII

Indias Third Party Logistics (3PL)


More Than 50% of Logistics Market in Developed
Countries is 3PL
Transport & Logistics Industry in India grew at CAGR of
more than 16% from 2007 to 2010
Logistics Cost % of its GDP
15%
10%
5%
0%

Western Europe

North America

Next Generation Supply Chain 2020 @ CII

India

Way Forward
Adopting Advanced IT Application
Addition of New Freight Corridors

Next Generation Logistics (Ships/ Trailers)


Lean Manufacturing
Resource Optimization
Next Generation Supply Chain 2020 @ CII

Major IT Applications Adopted by


Logistics Globally
Global
Positioning
Systems

Barcode
Systems

Electronic
Data
Interchange

Radio
Frequency
Identification

Automated
Sorting
System

Electronic
Ordering
System

Next Generation Supply Chain 2020 @ CII

Addition of New Freight Corridors

Golden Quadrilateral along with its Diagonals spans a


route length of 10,122 kms.
Need for addition of New Freight Corridors to expand
Transport Volumes.
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New Generation Logistics

New Generation Ships & Trailers required for Reduced


Emission & Reduced Fuel Consumption
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Milk Run System

Supplier

Controlled material
collection with
Pick-up Sheets

Controlled material
collection with
Pick-up Sheets

Check-calls

Supplier

Empty Container Return

Delivery
to MSIL
Plant

Benefits Achieved:
No of trucks coming to MSIL reduced by 20%
Decongestion in MSIL & Timely Supplies
Reduced follow-up and Real Time Tracking of Trucks
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Lean Manufacturing- Reduce lead time


at every Step
Illustration

Start of activity

Conversion Time

Saleable

End of activity

Move Time

Wait Time

Down Time

Non saleable + Waste


Total Lead Time

Adopt and implement a philosophy which shortens the time line between the customer
order and the product shipment by eliminating waste.
Next Generation Supply Chain 2020 @ CII

Lean Chain-MSIL Approach

Sho , sho, Kei,


Tan,
Bi
Smaller, Fewer, Lighter, Shorter, Neater
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Resource Optimization: Initiative of Koiltainer

x
Forward Journey: Exports Cars
from stockyard to Port

Return Journey: Steel Coils from


port to Stockyard

Multi-purpose Container - KOILTAINER

5 Cars

3 Coils: 54 MT

Benefits: Optimal Rake Utilization, Reduction in Truck load in MSIL


Forward Journey -> Export Cars; Return Journey -> Steel Coils:
Next Generation Supply Chain 2020 @ CII

Thank you
R Harikumar
Vice President
Supply Chain
Maruti Suzuki India Limited
Next Generation Supply Chain 2020 @ CII

Ericsson Inputs
Tej Nirmal Singh
Head of Supply Region India

Next Generation Supply Chain 2020 @ CII

Market outlook 2015


Growth Mobile Broadband
50 billion connections

Network Modernization
Live networks - Technology upgrade

Technology Change
4G, 5G .
Cloud

Use of connectivity in Unconventional items


Utilities
Transport, etc
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Supply chain opportunities


Reverse Logistics
Controlled flow
Synchronized deliveries & Removals

Inventory Management
Robust Warehouse Management System
Mobile/ handheld device Operations

Skilled Resources
Organized Trainings & Skill building
Control attrition

Professional Service Providers


Resource Providers
Transport Companies
Next Generation Supply Chain 2020 @ CII

Supply chain opportunities.contd


E2E Service Provider
With Strong Processes & Controls

Hub & Spoke setup for Project Logistics


Efficient Distribution Park

Product Customization/ Configuration

Productive Infrastructure
Roads & Rails
Warehouses
Next Generation Supply Chain 2020 @ CII

CII MEETING
INPUTS FROM THE FASHION RETAIL SPACE

ABHIK SAHA
DIRECTOR SUPPLY CHAIN
BENETTON INDIA PRIVATE LIMITED
25

Next Generation Supply Chain 2020 @ CII

Supply Chain : Functional Journey


Historically, largely non-existent as a practice.
Clubbed under the overall umbrella of
Manufacturing.
Coming to Age of Demand Planning and PPC.

Increasingly finding CEO and Board relevance.


Shift from forecast based to replenishment based.
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Next Generation Supply Chain 2020 @ CII

Supply Chain : Current Strategy


CEOs are increasingly de-coupling the front end.
Split focus between inventory and customer experience.

SCM increasingly responsible for managing the demand.


Accountable for excess as well as shortage of inventory.
Availability no longer an issue of Sales Forecast.

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Next Generation Supply Chain 2020 @ CII

Supply Chain : Impact


Lean SCMs dynamically responding to consumer tastes.
Revenue growth through reduced stock-outs.

Reduced discounting through managing a smaller tail.


Spearheading strategy on Cash Flow and quality of
Balance Sheet.
Value of SCM vs. just Cost being increasingly important.

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Next Generation Supply Chain 2020 @ CII

INPUTS FROM
MONDELEZ INTERNATIONAL

Next Generation Supply Chain 2020 @ CII

Supply Chains Strategic Imperative: To continually support high growth trajectory and
simultaneously respond to rapid changes in its customer, competitor and regulatory environment
Company is continuously growing
700

Sales (USD Mil.) and


CAGR (2006 2012)

27%
570

Competition is intensifying, challenging


dominance of Market Leaders

430
345

260
190
130

2006

2007

2008

2009

2010

2011

2012

Trade has undergone a


transformation, with Modern Retail still
growing at a tremendous pace
Need to be responsive to high service levels
and product freshness demanded by
modern trade

India is expected to finally move to GST


by 2014, with implications on the supply
chain
HARYANA
DELHI
GHAZIABAD
FARIDABAD
U.P

Currently, 3 Distribution Centers still serving


within a radius of 90kms. due to taxes on
inter-state sales

Next Generation Supply Chain 2020 @ CII

Demand is a multidimensional view


To support a continuous growth agenda, Demand cannot be an SCM domain alone
Product plans
Price
Size, growth and share
Consumer insight

Strategic goals
Business Plan
Brand Plans

Customer Plans
Sales Resources
Distribution Plans

Strategy

Market

Customer

External
Regulatory
Economic
Affordability

If Sales & Marketing is Akbar the King, SCM has to be the Birbal the Counsel
Next Generation Supply Chain 2020 @ CII

Product Portfolio keeps competition aside


Ambition of
continuous growth

New Products
New Channels
Product
changes, improvemen
ts
and rationalization

Sales

Keeping your bets on


present portfolio

Repositioning

Sufficiently Plan NEW in business to counter competition and continually fuel growth

Next Generation Supply Chain 2020 @ CII

Customer Delight demands a different Supply Chain focussed on


serving them rather than itself

Optimize OPERATING COSTS


Shift from own KPI focussed supply chain to an Integrated Supply Chain walking the tight rope
Next Generation Supply Chain 2020 @ CII

Need of Business 2020


Move from Demand - Supply matching S&OP of
next three months at SKU level
to
Integrated Business Planning which
links Strategy to Execution
(Demand, Product and Supply
interwoven financially)
for next twenty four months at
Product Family Level
Next Generation Supply Chain 2020 @ CII