Views - The Forum on Supply Chain Risk + Compliance Management 2016
"The standards and certifications must be made mandatory for supply chain ecosystem.It is the need of the day and we don’t have any choice other than implementing the same."
Mr. M Narayan, Head Supply Chain Management, Indus Towers Limited
Highly experienced supply chain professional with 30+ years of working in various industriesStarting from electronics field , then automotive, electrical , agriculture, garments, process and finally in telecom.
Worked companies like GE, Ashokleyland, Eicher ,Sanmar, Gokaldas images and finally in Indus towers ltd.Worked in supply chain, logistics, warehousing , sourcing , planning etc.Achievements - 2005 -06 Best Manager service departments in Gokaldas images.
2015-16 best SCM head award in Indus towers ltd .Area of specialization - Negotiation , inventory reduction and cost saving.
Q. May we request you to highlight the areas of Supply Chain Risks?
External supply chain risks
Demand risks - caused by unpredictable or misunderstood customer or end-customer demand. This a risk which need be managed from the word go of start of business with any customer or supplier. Also the risk looms once the expectation of the customer and supplier pulls on either side. This has to be managed with accurate and precise communications and costing.
Supply risks - caused by any interruptions to the flow of product, whether raw material or parts, within your supply chain. Supply chain team need to be proactively keep itself abreast of the development that are taking place in the input and out put market to align the stocks. We also need to remain at the helm of information and sharing the same with in-house production agency and Business Heads informed to align production or seek other avenues to utilise the capacities.
Environmental risks - from outside the supply chain; usually related to economic, social, governmental, and climate factors, including the threat of terrorism. SCM team shall build capabilities to adapt to the changing needs on statutory and develop partners accordingly. We need to be looking forward for the stringent quality, processes and financial need change. In the current scenario it is the right time to gear up our systems to transit to GST from various taxations. We shall look at strategically positioning warehouse, transport model, document formats, and training of people at all levels to handle the forthcoming big change in Indian economy.
Business risks - caused by factors such as a supplier's financial or management stability, or purchase and sale of supplier companies. We all do look at the suppliers economic and management ability while starting the business. While the ability to management the same constantly remain under review through the performance monitoring, there exist a strong need to keep an eye on the balance sheets or changing financial abilities of the partners to avoid surprises.
Physical plant risks - caused by the condition of a supplier's physical facility and regulatory compliance.Though there is a little control that Supply Chain team can effect. However, along with other verticals from the Internal organization’s various checks and audit mechanism shall be put in place and be monitored to mitigate the risks in supplies.
Internal supply chain risks
- Manufacturing risks - caused by disruptions of internal operations or processes, leading to over or under production including incomplete production. An everyday review of each production state and stock and continuous corrective measure is the solution for the same.
- Business risks - caused by changes in key personnel, management, reporting structures or business processes, such as the way purchasers communicate to suppliers and customers. Supply Chain shall be made a process driven agency than the person driven. While deciding the processes an inclusive approach shall be taken while implementing the same it be practiced without a deviation and exclusively. Process shall not be allowed to be tweaked for short term benefit.
- Planning and control risks - caused by inadequate assessment and planning, which amount to ineffective management
- Mitigation and contingency risks - caused by not putting contingencies (or alternative solutions) in place in case something goes wrong. A process matured and developed over a period of time will ensure that the planning gaps are not their and their shall be minimal need for seeking deviations. Thus it shall not only reduce the risk but aid speed of work.
- Cultural risks - caused by a business's cultural tendency to hide or delay negative information. Such businesses are generally slower to react when impacted by unexpected events.To combat the same in the unknown geography and competitive world, there exist a need to develop relations and emotional connects at all levels and same shall be utilized for timely action for benefit of both the sides simultaneously. This shall at times help in taking harsh decisions too.
Q. The Supply Chain Risk: Who owns it? Compliance Management Program: What drives it?
Mr. Narayan: Absolutely it should be owned by supply chain team only.While a Supply Chain Head owns the accountability for the Organization, the responsibility to ensure the suppliers and partners are also compliant, is inevitable. And this also translates into a SC Risk.
Compliance management will eliminate certain portion of Business risk in supply chain management. With extensive outsourcing both locally and globally, alongside introduces an even more significance of compliance with regulatory bodies. The scope is not any more confined to your own organization or region, but nationally and globally.A compliance management program will ensure two aspects, one process driven supply line of resources, second any variation in the compliance shall indicate on the direction supplier or vendor partner is moving and to provide correction well in time without making management lapses translate into huge manpower unrest or penalties impositions by regulators thus keeping the Supply Chain intact and stable.
Q. What do you think are the areas of improvement in transforming Supply Chain in India?
Mr. Narayan: Standardization, usage of cutting edge technology, ware housing and logistics
Q. How can stakeholders develop a Risk Based Action Plan for Supply Chain Security?
Mr. Narayan: To manage supply chain risk in company, we have to develop processes to Identify, prioritize, and mitigate risk. Supply chain strategy team should set aside time to evaluate the risks facing by Supply chain. Risks come into focus once you have determined Internal and externalcustomers ‘needs and capabilities, completed an internal best practice evaluation, and assessed competition and technology. You should be in a good position to do that, assuming you have established a good foundation to place those risks in perspective. To manage the risk in global sourcing process looks far beyond unit cost to the total cost picture.
Q. Your views on Standards & Certifications in mitigating Supply Chain Risks. Should the Standards & Certifications be made mandatory for the Supply Chain ecosystem? How do you think it is achievable?
Mr. Narayan: Yes standardization is important aspect of supply chain, this will give leverage in global sourcing, optimumcosting, bulk purchase etc.
Yes standards and certifications to be made mandatory for supply chain ecosystem.
It is need of the day and we don’t have any choice other than implementing the same.
Q. Do you think the stakeholders from Supply Chain ecosystem at any and all levels whether in public and/or private and/or the national and global top professional and trade associations and organizations should come forward and utilize such a forum/platform such as, ‘The Forum on Supply Chain Risk + Compliance Management ‘, and encourage and support such forums?
Mr. Narayan: Yes, Absolutely and this forum will really help to have better network among the organizations and as a team we can come up with lot of ideas which will be mutually beneficial to all of us.
Q. What discussion topics would you like the forum to cover and deliver? And, what would you like to take away from ‘The Forum on Supply Chain Risk + Compliance Management in 2016?
Mr. Narayan: Ideally this form covers some case studies and experienced professionals sharing their issues and best practices which they have implemented in their organization to overcome the supply chain risks. Also the forum should update the audience by sharing the latest requirements in compliance management at periodic intervals. I expect the forum to also table the issues and challenges being faced from the time of connecting to a potential supplier to Customer including internal management conflicts with respect to supply chain management for to seek open views and solutions thereby. Also some of the projects can be identified to run in different business houses to come to standardization of processes thus Industry guiding the statutory bodies.
- Supply Chain RISK + COMPLIANCE MANAGEMENT – What it really means to MANUFACTURERS?
- Transforming the Supply Chain with National and Global STANDARDS to manage RISK and COMPLIANCE.
- IMPORTANCE & ROLE of STANDARDS & CERTIFICATIONS in Supply Chain RISK MANAGEMENT + COMPLIANCE.
- Best Practices Case Studies + Use Cases in Supply Chain Risk + Compliance Management.
- Securing the Supply Chain ECO-SYSTEM and the role and responsibilities of the STAKEHOLDERS;
- Logistics Providers
- Freight Carriers
- Law Enforcement Agencies
- Government Agencies
- Security Professionals
- Logistics Professionals
- Freight Services Industry Companies
- Insurance Companies
- Audit Companies
- Technology Companies
- The IMPORTANCE & ROLE of TECHNOLOGY in STANDARDS Development
- TELEMATICS for Cargo + Driver Safety and Security
- Cargo Safety & Security - Explore how telematics is used for combating hijackings, thefts and robberies
- Driver Safety & Security - Explore how telematics technologies can help enhance the driver safety and security by real time monitoring of driver behavior and driver fatigue
- Fleet Performance and Fuel Efficiency - The impact of telematics and fleet management technology on insurance
- Cold Chain Management - temperature-controlled supply chain:
- Life Sciences: Clinical Trials - Hospitals and Blood - Pharmaceuticals - Vaccines,
- Fresh and Processed Food - Produce - Seafood - Meat and Poultry - Dairy - Floral
- Technology Solutions for Warehouse Safety & Security
- Physical Security Information Management (PSIM) - An Integrated Approach to Warehouse Security for simplifying the command and control - at-a-glance snapshot of all operations, enhancing their situational awareness and increasing their ability to react to any security infringements within the warehouse environment - Witness how a PSIM platform that seamlessly brings together otherwise disparate solutions - Access Control, CCTV, RFID, Intruder detection and Fire systems.
- TELEMATICS for Cargo + Driver Safety and Security