PepsiCo: A Global Food and Beverage Leader PepsiCo, Inc. is an American multinational food, snack, and beverage corporation headquartered in Purchase, New York. Its business spans all aspects of the food and beverage market, overseeing manufacturing, distribution, and marketing. Formed in 1965 by the merger of Pepsi-Cola Company and Frito-Lay, Inc., PepsiCo has grown from its original Pepsi Cola product to a diverse range of brands. Major acquisitions include Tropicana Products in 1998, Quaker Oats (adding Gatorade) in 2001, and Pioneer Foods in 2020 for $1.7 billion.
PepsiCo is a global leader in the food and beverage industry, with a portfolio that includes household brands like Pepsi, Mountain Dew, Gatorade, Lay’s, and Doritos. Operating in over 200 countries and territories, PepsiCo’s diverse product mix and international presence ensure a strong competitive stance. Its broad portfolio caters to varied consumer needs, from lifestyle drinks to favorite snacks, and benefits from cross-functional promotional opportunities. The extensive global distribution network leverages economies of scale and best practices across regions. In 2023, PepsiCo’s supply chain was consistently ranked among the top 10 in the FMCG sector.
Resilient Supply Chains in the F&B Sector Geographically, the growing markets of Asia and the Middle East have faced the challenges of unstable political environments, war-torn economies, and devaluing currencies, putting today’s brands under immense pressure to remain profitable. We live in a VUCA world (Volatile, Uncertain, Complex, and Ambiguous), where a brand’s success is often judged by its profitability. The cost and availability of crucial ingredients have become significant challenges, complicating the delivery of quality products consumers’ demand.
The F&B sector is evolving, driven by changing consumer preferences, technological advancements, and environmental concerns. Trends include the rise of convenience foods, a focus on health and wellness, demand for sustainable and ethically sourced products, and the increasing influence of technology. Today’s supply chains must demonstrate cost leadership through sustainable processes and innovations like upcycling food waste, which reduces costs and minimizes environmental impact. Sustainable packaging remains a priority, and achieving net zero status, especially given the industry’s significant water usage, is now critical.
Supply chains must become antifragile, effectively managing VUCA with resilience. Embracing uncertainties, designing robust supply chains, and executing flawlessly are essential. Educating all supply chain stakeholders on managing uncertainty is crucial for success.
Advancing Sustainable Supply Chains
Innovation and benchmarking form the bedrock of our supply chain processes. Our supply chains continuously learn and improve through internal and external references, incorporating cross-sector learnings at an unprecedented pace. Innovations span every facet of the supply chain, not just products. Sustainable manufacturing practices, including plant electrification, heat recovery, low-energy alternatives, advanced water reclamation, and reduction and reuse technologies, are being rapidly adopted globally.
Digitizing tasks enables effective daily operations, building towards a paperless, smart, and digital manufacturing environment. Next-gen process controls, like digital twins for optimizing equipment performance, are implemented across factories worldwide.
Significant strides are being made in sustainable logistics, with an increasing fleet of company-owned trucks using alternative fuels like CNG or electric vehicles. Third-party logistics providers are selected based on the net impact of their transportation activities. Initiatives such as using recycled packaging, converting potato slurry into biogas to power machinery, and other sustainability efforts are standardizing processes and enhancing product sustainability.
Transforming Logistics for Efficiency and Customer Delight
Logistics plays a crucial role in supply chain management, enhancing efficiency throughout the process. Its primary objective is to deliver products to customers on time, with the right quality and cost. Through strategic partnerships with suppliers, shippers, and warehouses, and integrating these services via automated systems such as WMS (Warehouse Management Systems) and TMS (Transport Management Systems), logistics operations are streamlined, reducing overhead costs and improving delivery speed. This enhances customer satisfaction, measurable through Fill Rate and On-Time In-Full KPIs, while optimizing costs. Efficient planning of warehousing and transportation activities is essential to reducing order fulfillment times. Implementing WMS improves Warehouse Turnaround Time (TAT) from order receipt to dispatch, while TMS optimizes transport planning, identifying cost-effective carrier routes and maximizing truck utilization. This transformation positions logistics as a value creator, delivering stakeholder value and customer satisfaction.
Strategic Partnerships
Logistics Service Providers (LSPs) play a crucial role in creating overall value within logistics. Shared visions and aligned goals from the outset foster a collaborative environment that benefits both parties. The choice of warehousing and transportation models depends heavily on political-economic dynamics, cost factors, and the supplier landscape. For LSPs, delivering orders at the lowest cost and highest efficiency is paramount, ranging from 3PL models to long-term leased, company-operated warehouses. In the fastmoving consumer goods segment, customer service is a primary KPI for success, requiring technologydriven logistics to ensure timely order fulfillment. Establishing a long-term shared vision with LSPs forms the foundation for achieving overall success.
We collaborate with a wide range of Logistics Service Providers (LSPs) across various regions. Our selection process emphasizes key criteria: 3PLs must prioritize customer satisfaction and maintain high service levels. A robust, well-documented, and repeatable process is fundamental to success. Safety is paramount, and a strong safety record is essential in our LSP partnerships. Digitization is increasingly vital, with 3PLs expected to adopt technology like Warehouse Management Systems (WMS) to enhance process efficiency in their operations. Technology-centric teams within 3PLs align with our organizational goals. Flexible business agreements that accommodate seasonal and market fluctuations rely on the financial stability of our partners, a critical evaluation criterion. Lastly, a proven track record and positive industry reputation ensure the long-term viability of our LSP relationships.
Warehousing Strategy
Our warehousing strategy is built on the following pillars:
a. Efficient Warehouse Design: We optimize labor-intensive operations by making informed decisions about warehouse layout, based on inventory demands and seasonal fluctuations. Effective slotting of goods ensures smooth material flow, minimizing nonvalue-added travel. Affordable automation further streamlines material handling, enhancing efficiency.
b. Outsourcing: We strategically outsource non-critical warehouses to realize financial and operational benefits while maintaining control. We ensure these warehouses meet our standards for capability and technology, supporting our commitment to yearon-year cost efficiency.
c. Technology Integration: Implementing Warehouse Management Systems (WMS) enables real-time decision-making and enhances operational visibility, driving performance management through KPI monitoring.
d. Labor Optimization: Leveraging digital solutions, we optimize resource allocation for each warehouse activity. Flexible labor arrangements, including long-term contracts, help achieve efficiency metrics such as cases handled per man-hour.
Driving Agility through Supply Chain Digitization and Mitigating Procurement Risks
In today’s volatile, uncertain, complex, and ambiguous (VUCA) world, effective demand forecasting is crucial for building an anti-fragile supply chain. Leveraging Point of Sales (POS) data and AI/ML forecasting models enhances forecast accuracy, particularly for high-priority SKUs (A/B Class). This approach integrates real-time signals into forecasting discussions, improving sales performance and overall revenue.
Revenue management strategies, driven by POS data, enable granular pricing policies down to the distributor level. This approach boosts sales productivity, increases market share, and facilitates efficient supply planning, thereby optimizing capital employed in inventory.
Supply chain digitization plays a pivotal role in creating an agile and responsive supply chain. By digitizing procurement, planning, transportation, and warehousing, companies can swiftly adapt to market changes and customer demands through rapid prototyping and iterative improvements.
To mitigate risks in procurement, robust strategies include building strong supplier relationships and implementing risk management protocols. Measures such as dual sourcing, inventory buffering, and exploring alternative sourcing options help mitigate disruptions. Strategic use of futures contracts for key raw materials like oils directly impacts the bottom line, ensuring stability amid uncertainties.
Control Tower Approach
A supply chain control tower, encompassing all functions from procurement to sales, is crucial for seamless coordination across stakeholders. Built on digital stacks for each function, it consolidates inputs into actionable insights. The control tower analyzes causal events, devises mitigation plans, and conducts scenario analyses to support decision-making. By integrating data from multiple sources, performing prescriptive and descriptive analytics, it serves as a collaborative tool to enhance visibility, optimize operations, mitigate risks, and drive continuous improvement throughout the supply chain network.
Enhancing Demand Planning Precision
Consumer expectations have surged post-COVID, fueled by the rise of E-commerce and quick commerce. Today’s consumers demand fresher, high-quality products delivered in less than a day. We’ve enhanced our demand planning strategy on two fronts: improving data granularity and increasing data refresh frequency. Forecasting algorithms now operate at a granular level, from Distributor-Parent SKU for Traditional Trade to PIN Code-Parent SKU for E-commerce, allowing tailored treatment across trade channels. This precision, coupled with optimized inventory management, enables faster product delivery.
We’ve moved beyond monthly forecasts to weekly updates, integrating AI/ML-based demand sensing models for real-time adjustments. These tactics align replenishment strategies with evolving customer preferences.
The Federation of Freight Forwarders’ Associations in India (FFFAI) held its 6th EC Meeting for the term 2021-23 on May 27 and 28 in Bengaluru. The meeting was attended by the Office Bearers and 28 Member Association representative of FFFAI from across the country, there were many issues discussed and updates provided concerning customs, CBLR, EDI, Service Tax/GST, logistics, air cargo, sea cargo, skill development,importance of social media which FFFAI has expanded recently, technology developments, etc. The special focus of the 6th EC meeting was the updates on forthcoming 24th Biennial Convention of FFFAI to be held from August 12 to 14, 2022 in Chennai with the theme LOGISTICS RESHAPE, EMBRACE AND SURGE IN THE DIGITAL ERA. At this EC meeting, FFFAI also implemented Digital Learning platform for members and next generation for e-learning. It has been decided that FFFAI would initiate FIATA eFBL here in India to benefit the trade, which empowers customs brokers, freight forwarders and logistics service providers. In addition, updates on the recently held FIATA HQ Meet was also provided by the concerned members of FFFAI. FFFAI members present at this EC meeting stressed upon enhancing productivity on ICEGATE for trade facilitation and Ease of Doing Business. The FFFAI members also urged for creating a dedicated portal for LSP integration. As regard to skill development initiatives, IIFF’s (training arm of FFFAI) past and forthcoming training programmes (both online and classroom/physical) for the entire logistics industry were presented at the EC meeting. In addition, FFFAI’s various initiatives on capacity building through technology/IT also discussed withadequate importance. Recent activities of FFFAI Women’s Wing including organising interactive meetings with Government of India officials and industry experts were highlighted at this meeting which drew huge appreciation from the members. The members committed to expand the activities of the Women’s Wing in all the 28 member association locations to empower/encourage the women logistics practitioners. At this EC meeting FFFAI has signed an MoU with the National Institute of Industrial Engineering (NITIE) with an objective of skilling the aspiring candidates looking for opportunities in the logistics sector. Notably, a special session was organised at this 6th EC Meeting where N Sivasailam, former Special Secretary (Logistics), Ministry of Commerce, Government of India was present to address the FFFAI members and highlight the recent initiatives of the government in strengthening the logistics infrastructure, thereby leading in increase of international trade through multimodal connectivity and faster cargo clearance. He projected the ambitious growth potential of the logistics industry in India with a strong collaboration between government and industry people. Also speaking on the occasion was Bani Bhattacharya, IRS, who interacted with members of FFFAI on various initiatives of CBIC for the trade facilitation without human intervention. FFFAI Chairman Shankar Shinde thanked all the 28 associations for their support and appreciated the contribution of CBIC/DG systems trade facilitation measures. FFFAI Member Associations are: 1. Ahmedabad Custom Brokers' Association2. Aurangabad Customs House Agents Association3. Association of Custom House Agents Thiruvanthapuram4. Bangalore Custom House Agents Association5. Brihnamumbai Custom Brokers Association6. Calcutta Customs House Agents Association7. Chennai Customs House Agents Association8. Cochin Customs Brokers' Association9. Coimbatore Customs House and Steamer Agents Association10. Custom Brokers Association Hyderabad11. Delhi Customs Brokers Association12. Goa Custom Brokers Association13.Indore Customs House Agents Association14. The Kakinada Customs Brokers Association15. Kandla Custom Brokers Association16. Kanpur Customs Brokers Association17. Ludhiana Customs House Agents Association18. Mangalore Customs House Agents Association19. Mundra Customs Brokers Association20. Nagpur Customs House Agents Association21. Nashik Customs House Agents Association22. Nadia Custom Brokers Association23. Pipavav Custom Brokers Association24. Pune Customs House Agents Association25. Rajasthan Customs House Agents Association26.Tuticorin Custom Brokers Association27.Visakhapatnam Cusotms Brokers' Association28.West Bengal Custom House Agents Society FFFAI welcomes Women in Logistics/Youth in Logistics to participate on FFFAI forums and also invites membership application form logistics service providers in industry as this is a big national and international forum to network.
Ecom Express Limited, India’s sole pure-play B2C e-commerce logistics provider as of the Financial Year 2024, has introduced a new brand identity, underscoring its commitment to customer-centricity. This rebranding reflects a focus on addressing specific customer needs, prioritising customer-facing metrics, and integrating innovative technology across its nationwide express logistics network. The goal is to enhance speed, agility, and network reach, ensuring a customer-focused approach. The rebranding includes a dynamic logo and a refreshed visual identity, symbolising Ecom Express’s pursuit of excellence. The new logo features a forward-moving arrow within a square, representing the company’s dedication to delivery. The letter "E" in the logo stands for Expression, Innovation, and Progress, while the bold magenta colour signifies bravery, self-expression, and strength. This vibrant magenta reintroduction reflects Ecom Express's renewed commitment to customers, partners, and team members, as the company aims to simplify and democratise logistics for all. Ajay Chitkara, CEO and MD of Ecom Express, elaborated on the transformation, stating, “Our refreshed brand identity reaffirms our customer-first approach as we continue to integrate technology and innovation to provide reliable, high-speed services with the widest network reach. This transformation also underscores our commitment to our employees and delivery partners, who are essential to our business.” The new logo embodies Ecom Express’s dedication to its core values, focusing on customer welfare and fostering a diverse, inclusive environment. This rebranding signifies a promise to redefine logistics through advanced technology, making life easier for all types of customers.
Delmos Aviation has transported the second lot of 300 units of oxygen concentrators from Russia to New Delhi for the Rajasthan state government. The consignment was airborne on an Aeroflot A333 aircraft (SU 232) and reached at 10:10 AM in New Delhi. The shipments were shipped by road and sent back to Swasthya Bhawan, Jaipur, Rajasthan Medical Services Corporation (RMSCL). RMSCL obtained oxygen concentrators from Russian companies together with Delmos Aviation. Delmos Aviation is procuring, transporting and supplying COVID-relied materials to the Rajasthan Medical Services Corporation with the mandate signed with the Rajasthan Government. There will shortly be two consignments with the remaining 800 oxygen concentrators. "We are ready to assist governments in the provision and delivery of any type of essential medical supplies, oxygen concentration and equipment as quickly as possible," said Dr Naveen Rao, Director, Delmos Aviation. "At this juncture, time-based deliveries are paramount. We can handle the airlift and deliver the shipment to the last point." In four lots, 100, 300, 450 and 400 units, a total of 1250 oxygen concentrations are ordered and continue to reach New Delhi in batches of shipments. On 14 and 16 May 2021, the remaining lots will arrive. Oxygen concentrators of Single flowmeter (0.5-10LPM Adjustable) and double flowmeter (0-5LPM Adjustable) are included in the delivery. The models are JAY-10A & LFY-I-5A. "The government of Rajasthan is working hard in this raging second wave of the pandemic to provide basic medical equipment to head Minister Ashok Gehlot and Minister of Health, Raghu Sharma. The government plans to import 1250 oxygen concentrators from Moscow, Russia, in partnership with Delmos Aviation, as part of its efforts to enhance medical oxygen in the state," said a spokesperson.
Mahindra World City Jaipur (MWC Jaipur), a joint venture between Mahindra Lifespace Developers Ltd (MLDL) and Rajasthan State Industrial Development and Investment Corporation (RIICO) announced it concluded 26 new lease agreements between April 2021 and June 2022. The new signings included both new customers and expansion of facilities by existing clients, together leasing about 137 acres of land. In the same period, MWC Jaipur and its constituent units' aggregated investments crossed Rs 721 crores, and cumulative exports by MWC Jaipur exceeded Rs 15,930 crores, of which Rs 3,321 crores were in the last 15 months. Over these fifteen months, a total of 69 companies have completed their facility buildout at MWC Jaipur and become operational. The new entrants to MWC Jaipur represent a variety of sectors, like Logistics and Warehousing, IT & ITeS, Engineering, Furniture Manufacturing, Solar Energy, Gems and Jewelry manufacturing. The newly added roster of clients at MWC Jaipur includes Wipro Hydraulics, Shakti Hormann, Renew Photovoltaics, Kerakoll India, Normet, Gulmohar Lane Lifestyle, Manor & Mews, J Atelier Pink City, Kamal Coach Works, Maxop Engineering, amongst others. Rajaram Pai, Chief Business Officer – Industrial, Mahindra Lifespaces said, “MWC Jaipur today is home to prestigious domestic and international manufacturing companies from across the world, who have established a manufacturing base in India for the first time. Enabling business acceleration for customers has always been our focus. We continue to deliver the highest urbanisation standards by leveraging innovation, thoughtful design, and a deep commitment to sustainability. MWC Jaipur contributes towards generating incremental employment and income for the state while creating world-class infrastructure which would serve the nation for many years to come. We are glad to be the enablers of Make-in-India and Make-for-India.” Becoming a preferred destination of choice for over 121 global and domestic companies, MWC Jaipur is enabling business growth for customers by crafting a conducive environment, with robust infrastructure and facilities that propagate ease of doing business. Mahindra World City Jaipur is the first project in Asia to receive Climate Positive Development Stage 2 Certification from the C40 Cities Climate Leadership Group (C40), a global network of large cities taking action to address climate change. With a focus on climate-positive development, MWC Jaipur is continuing its efforts on integrating sustainability within the city. Green, integrated developments is continuously being upgraded to mitigate the impact of business operations on the environment. As of March 31, 2022, a total of 59,955 trees have been planted in government-approved forest areas and rural areas under the Mahindra Group’s flagship program – Hariyali. Around 11,100 trees have been planted within the industrial park.
A significant milestone has been achieved in the Indo-Bangla railway project with the inauguration of the inaugural freight train connecting Bangladesh's Gangasagar to Tripura's Nischintanpur. This momentous event marks a significant step forward in strengthening the rail connectivity between the two neighboring countries. The new railway connection is set to enhance trade and commerce between India and Bangladesh, providing a more efficient and cost-effective mode of transportation for goods. It will not only boost bilateral trade but also promote economic development in the region by opening up new opportunities for businesses and industries. The Indo-Bangla railway project is part of a broader effort to improve connectivity and foster closer ties between the two nations. It is expected to play a vital role in facilitating the movement of goods and passengers, ultimately contributing to the economic growth and prosperity of both countries.
Addressing modern supply chain challenges requires a multi-faceted approach to enhance flexibility and efficiency. By adopting agile principles such as cross-functional teamwork, iterative planning, and continuous improvement, businesses can better navigate disruptions and meet market demands. Strategically aligning resources involves a comprehensive analysis of competitive and technological environments. Focussing on high-profit market segments and refining offerings to meet their specific needs are critical for achieving advantage in the business. Importantly, benchmarking innovation practices through structured methodologies helps organisations stay competitive. Investing in technology-driven solutions and advanced communication platforms is essential for improving collaboration and transparency. Leveraging digital tools such as predictive analytics, AI, and IoT enhances resilience and responsiveness to disruptions. Ultimately, the execution of strategic plans will bear fruit when combined with advanced technologies to ensure a resilient and efficient supply chain capable of adapting to evolving market conditions. At Omega Seiki Mobility (OSM), Manuj Malhotra, Vice President–Strategic Sourcing and Supply Chain, highlights that they are employing benchmarking approaches to support continuous improvement and adaptation. By integrating these practices with cutting-edge technologies and strategic planning, OSM is committed to maintaining a robust and agile supply chain that meets dynamic market demands and drives long-term success. OSM boasts five decades of manufacturing expertise, originating from the Anglian Omega Group. The group includes Omega Bright Steel, OBSC, OBSC Perfection, Yashdeep, Anglian Infra, Aditi Power, and ADM. Since its inception in 1971, the Anglian Omega Group has been involved in various sectors, including steel, auto components, cold chain logistics, and warehousing. With manufacturing facilities spread across India and global offices, the group generates over US$150 million in revenue and maintains a 10 per cent EBITDA. Rooted in automotive manufacturing, the company transitioned to electric vehicle production in 2018. OSM operates four manufacturing facilities across India, located in Faridabad and Pune. The company’s dealer network spans over 180 locations, and more than 7,000 satisfied users benefit from its products daily. The growing demand for affordable transportation, concerns about fuel efficiency, and last-mile logistics needs in emerging economies, along with the shift toward electric and hybrid vehicles driven by stricter emission regulations and government incentives, are key factors shaping the company’s trajectory. Building a Flexible Supply Chain One of the primary challenges is the insufficient number of charging stations, especially in rural areas. This leads to “range anxiety”, where individuals worry about running out of power without access to charging facilities. To address such challenges, agile supply chain methodologies are crucial. These methodologies focus on flexibility, responsiveness, and collaboration. By adopting agile principles like cross-functional teamwork, iterative planning, and continuous improvement, businesses can streamline their supply chain processes and quickly adapt to changes in demand or disruptions. Aligning Distinct Capabilities with New Novel Approaches An innovative strategy directs how resources are allocated to achieve business objectives related to innovation, value delivery, and competitive advantage. This strategy should begin with a comprehensive analysis of the business’s competitive and technological environment, including an evaluation of external challenges and opportunities. To effectively target and position your offerings, focus on market segments that promise the highest profitability. Ensure that your product or service meets the specific needs of these segments. Identifying and prioritising your most profitable customers and clearly defining your target market are crucial steps in this process. A well-rounded strategy also involves a market penetration approach, which aims to increase market share for existing products or services within current markets. This can be achieved through enhanced marketing efforts, better customer engagement, and refining product offerings to align more closely with market demands. Unique and Innovative Strategies Enabling Service Abilities Investing in technology solutions that support collaboration, such as unified procurement platforms, is one of our key strategies for enhancing supply chain efficiency. These platforms enable seamless data sharing across departments and facilitate real-time collaboration on sourcing, procurement, and payment processes. By integrating advanced communication technologies, organisations can achieve a higher level of coordination and transparency, which are essential for effective supply chain management. Effective supply chain collaboration depends on the strategic use of modern communication tools that enable real-time information sharing. These tools allow for better coordination and faster decision making, crucial for managing complex supply chains. Advanced communication technologies foster trust and transparency among partners, which are vital for maintaining strong relationships and addressing potential disruptions proactively. To improve supplier collaboration, organisations should focus on fostering open communication and establishing clear expectations. Regular information sharing, providing timely feedback, and addressing issues or concerns promptly are essential practices. By maintaining open lines of communication, organisations can ensure that all parties are aligned with the supply chain goals and can swiftly resolve any challenges that arise. Enabling Straightforward Value Generation Today, e-commerce has become a crucial component in modern supply chain management, offering platforms for seamless online ordering, payment processing, shipment tracking, and inventory management. This integration enhances the speed of order fulfilment and improves product visibility, making it easier for customers to locate and purchase products. Suppliers play a foundational role in the supply chain, providing the raw materials, components, and services essential for producing goods. Their reliability and the quality of their service are pivotal, as they directly influence the efficiency and effectiveness of the entire supply chain. Effective management of supplier relationships is therefore critical for maintaining a smooth and responsive supply chain. To optimise supply chain operations, it is important to facilitate collaboration and information sharing with suppliers. Sharing key supply chain information, such as order forecasts and inventory levels, fosters transparency and helps in better planning, reducing the risk of disruptions. Automation further enhances efficiency by streamlining requisition and purchase order creation, integrating payment processes, and minimising errors. This not only improves workflow but also boosts accuracy in order processing. Ensuring Technological Prowess in a Rapidly Evolving System Digital tools significantly enhance the resilience of supply chains by enabling companies to respond swiftly and effectively to disruptions. Technologies such as predictive analytics, Artificial Intelligence (AI) and Machine Learning (ML), the Internet of Things (IoT), Cloud Computing, and Advanced Robotics and Automation play a crucial role in this process. Predictive analytics allows businesses to foresee potential issues and develop proactive mitigation strategies. AI and ML algorithms can analyse vast amounts of data to identify patterns and predict disruptions before they occur. The IoT provides real-time visibility into supply chain operations, improving tracking and monitoring. Cloud Computing ensures scalability and flexibility in managing data and applications, while Advanced Robotics and Automation streamline operations and increase efficiency. Harnessing Innovation Benchmarking Innovation benchmarking offers numerous benefits, including evaluating your current innovation performance, identifying strengths and weaknesses, and learning from the best practices and mistakes of others. This process enables you to set both realistic and ambitious innovation goals and monitor progress effectively. Key sources of benchmarking data include industry reports, surveys, databases, publications, websites, associations, consultants, and direct interactions with other organisations. These sources provide valuable insights into industry standards and emerging trends. At OSM, we employ an eight-step approach to ensure effective benchmarking. This structured methodology helps keep our organisation aligned with its innovation objectives and enhances our ability to remain competitive and responsive to industry changes. Logistics—Essential to Strategy Logistics activities within a business organisation aim to meet customer demands by addressing time and location challenges, as well as optimising service cost and quality based on customers’ needs and purchasing power. To enhance supply chain efficiency, adopting logistics innovations, such as technology-driven third-party logistics (3PL) solutions, is essential. These advanced logistics management systems streamline warehousing, delivery, returns management, and procurement, significantly improving operational efficiency. By leveraging such innovations, organisations can better align their logistics capabilities with market demands and achieve a competitive edge in their supply chain operations. Warehousing Management to Alleviate the Bottom-Line Techniques such as 5S (Sort, Straighten, Shine, Standardise, and Sustain) and Just-in-Time (JIT) inventory management are effective in reducing lead times, enhancing order processing efficiency, and optimising supply chain operations. Standardising picking and packing procedures is crucial for minimising errors and reducing processing times. Additionally, comprehensive inventory management strategies should include stock classification, inventory control techniques, safety stock management, cycle counting, and warehouse space optimisation. Effective layout design and storage techniques are also essential for improving overall efficiency and maintaining a well-organised supply chain. By implementing these practices, organisations can streamline their operations, reduce costs, and better meet customer demands. New Frontiers pivotal to Evolution Advanced technologies are revolutionising the supply chain landscape. Emerging capabilities in generative AI, data analytics, automation, machine learning, the Internet of Things (IoT), blockchain, and other innovations are driving the evolution of ‘smart’ supply chains, setting new standards for efficiency and agility. At OSM, we are in the early stages of integrating these advanced technologies into our operations. We are adopting a Digital Work Management (DWM) approach to systematically incorporate these tools and ensure effective implementation. Through structured reviews and continuous evaluation, we are committed to embracing these innovations fully, aiming to transform our supply chain practices and maintain a competitive edge in the rapidly evolving market. “Adaptive” – tomorrow’s Supply Chain in one word Effective communication and exceptional customer service are crucial skills for success in supply chain management. Strong communication abilities facilitate successful negotiations with suppliers and stakeholders, while professional and courteous interactions build trust and foster long-term relationships with customers. To excel in supply chain management, it is essential to combine these skills with perseverance and a strong work ethic. Success requires not only generating innovative ideas but also executing them effectively. It is important to maintain integrity and patience throughout the process. While having a vision is important, the ability to implement and execute plans is what ultimately determines success in the dynamic field of supply chain management.
We’ve seen many instances of pharma companies quickly retooling manufacturing to start producing products that are in high demand. This ability to repurpose capacity provides a model for business agility going forward. End-to-end visibility across production and supply is essential. This includes real-time production monitoring systems and advanced planning and scheduling tools in manufacturing, as well as the ability to track and trace product – from materials to final product – as it passes along the supply chain. This requires an enterprise platform that connects the company with its suppliers, customers and partners to enable the real-time flow of information and transactions to create flexibility and robustness. However, accelerating product innovation and manufacturing requires more than identifying capacity; it also requires engineering, design, production, and distribution of resources. Overall, it is vital for patients to receive the medications they need without having to deal with stress or roadblocks along the way. Although the pharmaceutical supply chain face various challenges, companies like Mankind Pharma are taking the necessary steps to ensure a smooth process from manufacturing of products to delivery to patients. Excerpts from a recent interactionof Upamanyu Borah with Bharat Bhushan Rathi, Head of Logistics atone of India’s leading pharma company. Genesis and Market Position Mankind is the fastest growing pharmaceutical company from more than a decade and listed among top pharma companies in the Indian Formulation Market. In its 26 years of journey, since its inception, promoters (Juneja Brothers—R C Juneja and Rajeev Juneja) attached themselves to the market and customers, critically realising the need to provide solutions—filling the vacuum—by offering good quality pharma and medicinal products at affordable rates in a developing market like India, which is now the world’s third largest. The company’s approach reflects in its mission statement which states “to be able to provide cost-effective, innovation based on superior quality pharmaceutical products across the globe that improves the lives of the patients.” Racing towards a turnover of USD 1 Billion, Mankind’s success is attributed to the out-of-box thinking capabilities and strategies of its experienced management team and field force. COVID-19 and The Supply Chain This one-of-a-kind crisis that takes over countries and economies once in a century is so unanticipated. No one is aware or can prepare themselves for such a disruption. But, a company’s strength can be rightly judged in such abnormal situations when the need to evaluate market position and resiliency of operations is being adequately put to test. Mankind Pharma stands rock solid with the character of “Go Getter”—striving to diminish the gap between demand and supply in a volatile market. Our organisational behaviour to serve Mankind speaks volumes about our tireless commitment to quality that has earned the trust of our valued customers. Adaptability and Flexibility With each day passing, we are improving our system. It’s an on-going process. During and after the pandemic, we implemented the CONTROL TOWER system—a decentralised mechanism for each critical process objective to debottleneck show stopper processes. We implemented and embedded enhanced capability into the ERP system to make it robust, reliable, and efficient and help meet increased demand for personalisation and improve a broad range of business processes. There was also a focus on making systems ON LINE (i.e. minimum human intervention). To challenge current supply chain processes, we designed a WEB so that any vibration in the network can be cached immediately and action is taken with no time lag. Strategic Initiatives for Better Supply of Products We completely revamped our processes. In fact, process upgradation programmes are still going. Generally, in the case of pharma companies, there is a unidirectional feeding flow {Production > Depot > POS (CFA)}. But, since the pandemic have no demand pattern and we have peaks in different time across different regions, we developed a system where product can be moved from nearby POS (CFAs) if there is any non-catered demand. Significantly, this solution helped us in Linear Distribution of Inventory. During the pandemic, when companies were struggling to distribute their products in the market, we were in a comfortable situation, ensuring availability of our products even in remote areas. Mapping and Integrating Value We are not 100% done with improvements but certainly we come a long way in last 2 years. We are using so many IT solutions — almost in each function which is not only enabling us to achieve desirable results but also decreasing human efforts in doing repetitive/non-value added works. I believe, these are the footsteps towards creating a RESILIENT and FUTURISTIC supply chain. Establishing Coordination At present, we are connected with an ERP systems solution designed internally. Disruptions like the COVID pandemic didn’t affect much because we have integrated system which not only depends on the manpower but on processes that converge at one platform making it easy for us to control operations and not exhibit holistic decision making to achieve the desired result. Meeting the sense of Supply and Demand We work on throughput efficiency a lot (i.e. when there is a sudden jump in demand, we can cater without lag/delay/backlog. This is most importantly because we have designed the system on Theory of Constraints (TOC)—the scientific approach to improvement that helps us to identify the most important limiting factor (i.e., constraint) that stands in the way of achieving a goal and then systematically improving that constraint until it is no longer the limiting factor. Logistics—Essential to Strategy There is no question on whether logistics (Storing and Distribution) is the backbone of any company—with robust operations of distribution to capture market, backed by motivated and skilled sales teams. Planning, Distribution, Transportation and Warehousing are all part of logistics operations and they need to be in sync to maintain efficiency at all steps. I believe all decision-based work controlled by a company and all transactional (repeated) must be outsourced to experts to support value-focussed thinking for improving business and operations. Quantifying Logistics Services Whenever we are finalising any LSP, apart from commercials, we validate his capabilities (i.e. how his strengths can be useful for the company) and not only that, we also see and review testimonials of the service provider’s present customers (in some cases, we also discuss and consult with them). However, as a useful rule of thumb, we keep a back up of and for everything and anything required to support the continuity of logistics and delivery of products. Yes, it comes with cost but for all critical operations we have this policy. Guiding Backend Performance We are driving activities on Indicators (I mean KPIs) and their online monitoring (not post facto after a month), any deviation is corrected immediately. Not only that, we also have authority matrix which makes this even more agile, because decisions are taken quickly and enable fast execution. Trends that are Reshaping the Future Going forward, I believe Direct to Customer (D2C) will be a buzzword (i.e. anything and everything at doorsteps or Direct Selling which makes even the entire logistics network more complex. Direct-to-consumer marketing puts the control of the buying process back into the hands of the manufacturers. The company is responsible for creating a superior product, marketing it to their target audience, delivering the product or service to their customers and establishing a relationship with them. The end customer is probably not aware of the steps their product takes on its journey from warehouse to delivery. Now that next-day delivery is arguably the standard in retail as a whole, customers may not even realize how much D2C has disrupted the landscape. Additionally, success factor of a company depends on BIG DATA usage (i.e. how companies can use AI to predict demand in a region). To make this happen, fast information flow (Real-Time) and expedited decision making is required at each step of the supply chain. Most critically, any sector, regardless of Pharma, although it’s a highly governed/regulated market), will have to strengthen its customer feedback mechanism. Lastly, on a softer note, at the moment, there is high deficiency of skilled people in the industry, so to all youngsters I say ‘You have a bright future’. ALL THE BEST!!
OEMs and suppliers from all tiers are rethinking the supply chain model, from sourcing of raw materials to production of finished products to delivery of finished goods and everything in between. A proactive approach is critical, especially in these fluid situations. Companies have little choice but to pivot meaningfully and strategic planning is the key to survival. Increased attention to the status of inventory at the supplier location, supplier production schedules, and status of supplier shipments will provide early warning of shortages and allow upper tier suppliers to respond accordingly. Companies that are electronically connected to key direct suppliers and have real-time data on the inbound flow of products and materials can move quickly to implement programs to access data and enhance management and decision making capabilities. Om Vijayvargiya, Head – SCM & Logistics, Schaeffler India, informs Upamanyu Borah, on how their plans have included rigorous restructuring strategies, while also including developing solutions for their partners, and how forecasts and analytics have enabled to perform on contracts or other obligations. Genesis and operations Schaeffler is a German group known for high-precision components, system and bearing solutions. As a leading global supplier to the automotive and industrial sectors, along with innovative technologies, products and services for CO2 efficient drives, electric mobility, Industry 4.0 and renewable energies, Schaeffler has been driving forward ground-breaking inventions and developments in the fields of motion and mobility for over 70 years. For over five decades, Schaeffler has had a strong presence in India with four plants and eight sales offices. Its three major product brands- FAG, INA and LuK are well represented in India. The manufacturing plant in Vadodara of Gujarat produces a vast range of ball bearings, cylindrical roller bearings, spherical roller bearings and wheel bearings, sold under the brand name of FAG. The other plant in Vadodara at Savli produces next generation deep groove ball bearings and large size roller bearings, also sold under FAG. Schaeffler’s third state-of-the-art plant, located at Talegaon near Pune manufactures steel cages, pulleys, cam rollers, bushes, plastic cages and a wide range of precision engine components, sold under the brand name of INA. Its fourth manufacturing location is based out of Hosur, which manufactures clutch systems and dual mass flywheels for passenger cars, light commercial vehicles, heavy commercial vehicles and tractors, and are sold under the brand of LuK. In October 2019, Schaeffler merged its three entities to form one strong ‘Schaeffler India’ and consolidated the business among the largest industrial and automotive components and systems manufacturer in the country. COVID-19 and tackling disruptions Imports and exports constitute large parts of our supply chain, and the pandemic impacted the complete chain across the board. We observed significant delay in the clearance of imported cargo during lockdown period in India as an impact of COVID-19. Shipments accumulated at the port (from March last week to May first week) and its clearance posed to be the biggest challenge. CFSs were fully occupied and destuffing of new container was a challenge. Searching our cargo, loaded either as FCL or LCL, at the time of clearance was not easy. To overcome the prevailing challenges, we created a task force within our organisation along with CHAs and local transporters and gained control over the situation within a month’s time. Flexibility in times of supply chain uncertainty There was some level of flexibility in the supply chain in the pre-COVID period. But no one has imagined this extraordinary scale of disruption in the supply chain. Actions have already started from our side to revisit risk management policies and systems once again, and then update planning. While discussing new contracts for 2021 with our various business partners- freight forwarders, CHAs, 3PL service providers, domestic transporters, etc. who are involved in managing our supply chain, we are emphasising on mitigation strategies to minimise or eliminate threats that may arise from similar future situations. We are working with them to add agility and transparency in overall operations so that the supply chain bears minimum impact. These revised processes have become critical and we are making them part of our regular practice. We are also restructuring the distribution network to exploit network effect to achieve dominance, time to market, and maintain the desired service levels for customers. We are Consolidating and Distribution Centres (CDCs) at strategic business locations in India with the plan to keep the inventory close to the customer and deliver on shortest lead time. Apart from this, we are working on various other logistic projects comprising key elements with advanced capabilities to improve efficiencies around track and trace and monitoring systems. More focus on digitalising our existing manual processes in the supply chain to add transparency and improve supplies of our product. Hands off: tech at work Digitalisation is enabling our business to build end-to-end supply chain solutions which will help us to avoid bottlenecks in the supply chain. Interestingly, real-time or near real-time information is the key of success in supply chain management. We are focussing on increasing track and trace of our consignment under transport management system. Globally, Schaeffler has deployed advanced technology solutions to get information about imported consignments. It provides information on shipments from the point an invoice is generated at the origin plant to the goods receipt note at the receiving plant. Our teams are also working to automate the invoice and billing verification process using AI and ML, etc. Building virtual relationships Managing its massive global supply network is a tall task, so Schaeffler set out to automate business processes via EDI technologies and utilising tools to connect suppliers and transporters with its own systems and helping efficiently transfer information without added complexity. At present, few domestic suppliers are connected with our system, but we are soon going to add more of them. This will enable smooth data transfer from suppliers end to the Schaeffler SAP system, enabling real-time information on supplies and product shipments. Establishing coordination Schaeffler India caters to both automotive and industrial sector customers. On-time and in-full delivery is our goal. In order to meet customer requirements, the management puts a lot of focus for continuous improvement in logistics operations. Rejigging and redrawing the network for optimisation, digitalising key operational aspects, and adding the processes for agility and adaptability are part of our ongoing efforts towards order management strategy. It grants broader visibility over the movement of our materials from manufacturing sites to customer’s location, helping in smooth and reliable distribution solution. Major operational activities are with our value chain partners, starting from transporters, freight forwarders, warehouse operators and customs clearing agents. Schaeffler team is involved with the network partners to improve their services continually. We track the monthly KPIs and conduct ‘Quarterly Business Review” (QBR) with our service providers. Significance of logistics Most of our inbound and outbound supply chain activities are outsourced and managed by experts in the sector. In fact, the percentage of outsourcing of our activities has increased in the last three years. Our logistic partners are involved in transportation, CDC operations, freight forwarding, customs clearance, etc. We expect our partners to be agile, driven by modern day technology capabilities, offering cost-effective services, although consistently out performing all others in its class. Indian automotive market is quite volatile. Besides, in the current pandemic situation, agility in business processes would be considered the most important determinant of a service provider. Digitalisation is the key to making process faster and error-free. In this situation, we prefer partners who are tech savvy and provide maximum solutions based on data and smart solutions. In order to establish long-term business relationship, it is important for any supplier to demonstrate consistent performance over time. Over and above, supplier should always be cost-effective to achieve our logistics cost targets. Warehouse and distribution planning strategies Schaeffler India revised its warehousing strategy few years back and decided to restructure the entire storage and distribution network. The merger of three legal entities of Schaeffler India and GST regime also helped us to streamline and implement this plan. We defined the actions based on both warehousing and transportation to get the maximum advantage out of it. As per this strategy, we planned to close our many small warehouses and open the consolidated distribution centres in four directions of India. These locations were selected based on their reach to our end customer and approach to plants. The freight networks were reworked keeping in focus the continual improvement and inventories close to customers. Building systems efficiency It is very much necessary to have an internal logistics team to work on continual improvement of key supply chain function. This team has different verticals like warehousing, transportation, logistic, etc. to watch out for. The job of this team is to improvise the existing performance and work on new topics. Currently, we are more focussed towards digitalisation and attaining SCM 4.0. We have very strong support from the Schaeffler regional team in Singapore and team from global head quarters in Germany. All teams are well aligned, and new processes are implemented simultaneously at all places. For many upcoming solutions, India is in the pilot phase. Innovative approach to logistics management E-commerce companies have created the benchmark in track and trace. But similar kind of tracking and tracing is still not available for industrial goods movement. I personally wish to see this change in the coming days. Any kind of track and trace should be one click away. This will make the life of a logistic manager much easier. Another big trend is consolidation. Consolidation is not a new thing in logistics; transportation companies have been consolidating supply material in their own traditional ways since many decades. They hold the material for longer periods at their origin hub, and despatch after 2-3 days waiting period. When I say consolidation, I mean utilising technology to consolidate the material without any waiting period. Many startups are already working in this direction, but there is still room for improvement. I believe this will bring a big change in the coming years. Logistics processes generates lots of data every day. But there was no utilisation of this data to further improvise or work on ways to simplify the same. AI has emerged as a key trend and enabler in the logistics ecosystem to utilise this data and improve processes.
