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Next Generation Supply Chain 2020 @ CII
Next Generation
Supply Chain 2020
R. HarikumarVice President
Supply Chain
Maruti Suzuki India Ltd
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Next Generation Supply Chain 2020 @ CII
• Current Challenges
• Macro Factors to Reshape 2020
• Way Forward
Topics covered
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Next Generation Supply Chain 2020 @ CII
Uttarakhand
Disaster
Difficult times
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Next Generation Supply Chain 2020 @ CII
Volatility in
Commodityprices
Supplier Risk
Foreign Exchange
Fluctuation
Logistics Congestion
Current Challenges & pain areas
http://www.google.co.in/url?sa=i&rct=j&q=supply+chain&source=images&cd=&cad=rja&docid=AhKHyGGwtnVTHM&tbnid=wITU5Gd2tWzHeM:&ved=0CAUQjRw&url=http://www.indiamart.com/shalubai-logistics/services.html&ei=M4NBUZe-He-ImQW87IGgCw&bvm=bv.43287494,d.ZWU&psig=AFQjCNGGDwbmg-9dV5oG-L5mMDAOTE5O8A&ust=1363334050376994
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Next Generation Supply Chain 2020 @ CII
Earlier Business
Scenario
Current Challenging
Environment
Cost Plus Target costing
Build to printOwn Design
Capability
Local suppliersGlobal suppliers &
Follow Sourcing
Lifetime Volume
commitment
No Volume
commitment
Shifting trends of Cost Challenges
Volatile MarketStable Market
Rising Commodity priceStable Commodity price
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MSIL Inbound Logistics Overview
EMS Presentation
MSIL
WAREHOUSES AT GURGAON ~ 4-6 KM
PORTPORT
70 TRUCKS/ WEEK
NORTH
242PLANTS
WEST
36 PLANTS
SOUTH44 PLANTS
EAST
5 PLANTS
Line Feed
MTL TO MSIL
MTL TO W/H
NO MILK-RUN
NO MILK-RUN
NO MILK-RUN
M S I L A s s y .
L i n e
http://e/My%20Documents/OUT%20SATION%20VENDORS.ppt
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Risk exposure & Supply Chain Vulnerability
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OEMs
Supplier
Vendor
Vendor OEMsSupplier
Working in isolation its difficult to handle the Challenges
Working together in Harmony and Long Term Relationship is the key to
success
Key to success in difficult times
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Macro Factors That Will Reshape 2020
Logistics
2020
Volatility of OilPrices
New TransportCorridors
GST
PervasivePowerful
Technologies
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Supply Chain Ecosystems
Assets
• Location• Infrastructure
• Industry
• Supply ChainCapability
Supply Chain
Ecosystems• Collaboration
• StrategicAllignment
• Partnerships
Outcomes
• Lower Cost• Reduced Time
• Reduced Risk
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India’s Third Party Logistics (3PL)
More Than 50% of Logistics Market in Developed
Countries is 3PL
0%
5%
10%
15%
Western Europe North America India
Logistics Cost % of its GDP
Transport & Logistics Industry in India grew at CAGR of
more than 16% from 2007 to 2010
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Way Forward
Adopting Advanced IT Application
Addition of New Freight Corridors
Next Generation Logistics (Ships/ Trailers)
Lean Manufacturing
Resource Optimization
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Major IT Applications Adopted by
Logistics Globally
Global
PositioningSystems
BarcodeSystems
Electronic
DataInterchange
RadioFrequency
Identification
AutomatedSortingSystem
ElectronicOrderingSystem
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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 withPick-up Sheets
Check-calls
Controlled material
collection with
Pick-up SheetsSupplier
Plant
Delivery
to MSILEmpty Container Return
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 StepIllustration
Adopt and implement a philosophy which shortens the time line between the customer
order and the product shipment by eliminating waste.
Conversion Time
Saleable
Start of activity
Non saleable + Waste
Wait TimeMove Time Down Time
Total Lead Time
End of activity
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Lean Chain-MSIL Approach
“Sho , sho, Kei, Tan, Bi”
“Smaller, Fewer, Lighter, Shorter, Neater”
R O i i i I i i i f K il i
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F o r w a r d J o u r n
e y : E x p o r t s C a r s
f r o m s
t o c k y a r d t o P o r t
R e t u r n J o u r n e y : S t e e l C o i l s f r o m
p o r t t o
S t o c k y a r d
3 Coils: 54 MT5 Cars
xxMulti-purpose Container - KOILTAINER
Benefits: Optimal Rake Utilization, Reduction in Truck load in MSIL
Forward Journey -> Export Cars; Return Journey -> Steel Coils:
Resource Optimization: Initiative of Koiltainer
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Thank you R Harikumar
Vice President
Supply Chain
Maruti Suzuki India Limited
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Ericsson Inputs
Tej Nirmal Singh
Head of Supply – Region India
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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
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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
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CII MEETING
25
INPUTS FROM THE FASHION RETAIL SPACE
ABHIK SAHA
DIRECTOR – SUPPLY CHAIN
BENETTON INDIA PRIVATE LIMITED
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Supply Chain : Functional Journey
• Historically, largely non-existent as a practice.
• Clubbed under the overall umbrella ofManufacturing.
• 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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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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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 ofBalance Sheet.
• Value of SCM vs. just Cost being increasingly important.
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INPUTS FROMMONDELEZ INTERNATIONAL
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Next Generation Supply Chain 2020 @ CII
Currently, 3 Distribution Centers still servingwithin a radius of 90kms. due to taxes on
inter-state sales
India is expected to finally move to GSTby 2014, with implications on the supply
chain
FARIDABAD
DELHI
GHAZIABAD
U.P
HARYANATrade has undergone atransformation, with Modern Retail still
growing at a tremendous pace
Need to be responsive to high service levelsand product freshness demanded by
modern trade
Competition is intensifying, challengingdominance of Market Leaders
Supply Chain‟s Strategic Imperative: To continually support high growth trajectory and
simultaneously respond to rapid changes in its customer, competitor and regulatory environment
27%Sales (USD Mil.) andCAGR (2006 – 2012)
Company is continuously growing
130
190
260
345
430
570
700
2006 2007 2008 2009 2010 2011 2012
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Next Generation Supply Chain 2020 @ CII
• Regulatory• Economic
• Affordability
• Customer Plans
• Sales Resources
• Distribution Plans
• Product plans
• Price
• Size, growth and share
• Consumer insight
• Strategic goals
• Business Plan• Brand Plans
Strategy Market
ExternalCustomer
To support a continuous growth agenda, Demand cannot be an SCM domain alone
If Sales & Marketing is Akbar “the King”, SCM has to be the Birbal “the Counsel”
Demand is a multidimensional view
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Next Generation Supply Chain 2020 @ CII
Product Portfolio keeps competition “aside”
• New Products
• New Channels
• Product
changes, improvementsand rationalization
• Repositioning
Sufficiently Plan „NEW‟ in business to counter competition and continually fuel growth
Sales
Ambition ofcontinuous growth
Keeping your bets onpresent portfolio
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Customer Delight demands a different Supply Chain focussed on
serving them rather than itself
Shift from “own” KPI focussed supply chain to an Integrated Supply Chain walking the tight rope
Optimize OPERATINGCOSTS
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Need of Business 2020
Move from Demand - Supply matching S&OP ofnext three months at SKU level
to
Integrated Business Planning whichlinks Strategy to Execution
(Demand, Product and Supply
interwoven financially)for next twenty four months atProduct Family Level