Emerging trends in supply chain management and its impact
on the Industry
The fierce and cut throat competition after globalization
among the industry players and availability of IT and process automation technology
applications to the industry has made
topic of supply chain management most relevant to the industry as never before.
Supply chain management is now a board level topic for the corporates as it
directly impacts their bottom-line and a better managed supply chain for a
company is a competitive advantage to them. Needless to say that it is a key to
their long term sustenance. It is as such important to have a look on the
rising trends in this vital area and its crucial impact on the modern business
so that industries realign their process and maximize their revenues and
ultimately their profits. I am as such
summarizing few bullet points so as to give a summary to these rising trends in
this most vital area.
·
Customer centric approach in the entire value
chain right from suppliers to manufacturing to warehouses to Retailers. Impact
on the industry is to match supply and demand resulting in lesser inventory
costs resulting in increased profits and more sales due to better customer
satisfaction. Example in industry are Dabur, HLL , Procter & Gamble,
Maruti, Mahendra & Mahendra, Future group and Tata group etc.
·
Trend of outsourcing functions like warehousing
and transportation giving rise to 3PL and 5PL service providers in the industry
with focus on cost reductions and better service to customers.
·
Suppliers are treated as partners resulting in
suppliers taking keen interest in supplying quality components to production
units well in time taking keen interest in order processing. Impact on the
industry is improvement in efficiency of production units manufacturing better
quality products with shorter delivery
time.
·
Logistics in manufacturing industry is getting
recognized most important function after product development as there is
significant volume of goods movement both inbound ( components and material
sourcing) and outbound ( product distribution ).
·
Trend is to emphasize on quality, Efficiency, speed,
Innovation and responsiveness to customers by all partners impacting the
availability of better products with increase in Sales volume of the industry
and more market share. The new Mantra is to provide right product at the right
price , at the right time and at right place.
·
New trend in supply chain management is to
insist on VISIBILITY from end to end in entire value chain. This is made
possible through introduction of information and communication technology with
help of ERP, RFID, GPS, EDI, VMI (vendor managed inventory) technologies
through internet. Industries are embracing ICT technology with ERP software
modules like WMS,TMS,CRM,SRM and CRM
·
With impact on visibility, 3PL service providers
are embracing ICT (Information and communication technology) offering tracing and tracking capabilities
monitoring carrier’s performance in terms of carrier’s pick ups and deliveries.
·
3PL service providers are becoming flexible in
accommodating emergency and contingency requirements of manufacturing
companies.
·
Rise of Cold chain management for agricultural
and horticulture products which are perishable and temperature sensitive impacting
emergence of new industries in FMCG sector.
·
Supply chain management concepts are equally
applied to service industry just like manufacturing in areas of healthcare,
hospitality, tourism and food chains impacting the industry with better
customer care giving rise to focus on customer relationship management.
·
Rising trend of green supply chain management to
create environmental friendly products by industries right from inception of
product up to its consumption.
·
Rise of ‘Big Data’ collected through information
technology in terms of large text and picture files, video clips and
transactional data of customer giving rise to predictive techniques about
customer behavior helping companies to cover up their lost sales and maximizing
capacity utilization of their process.
·
Innovation is being emphasized giving rise to
Industry-Academia interfacing to create better product developments and trained
manpower.
·
Manufacturing companies are changing the culture
of ‘push sales’ to ‘pull based production and supply systems with emerging
trends of SCM.
·
Introduction of Just in Time and KANBAN technique for pull based procurement
·
E-Tracking of transportation vehicles on Google
maps.
·
Introduction of lean manufacturing environment
with a total quality management approach throughout the production unit.
·
Industries are changing their culture in
different departments of manufacturing from ‘my department’ to ‘our customer’
approach.
·
With focus on supply chain management industries
are integrating all relevant departments under one banner.
·
Industries are embracing ‘change management’
involving changes in measure of performance, planning process, execution
process, ERP, MIS and communication systems.
·
Industries are focusing on reduction of costs
and product manufacturing time with increase in Sales and higher profits
due to cost reductions through new trends in supply chain management.
Written By
Professor Akhil Chandra
Consultant Logistics and supply chain management,
Institute of Logistics and Aviation Management
ICRI, Okhla Phase II,New Delhi
