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Shifting Paradigms of
Global Supply Chains The overall supply landscape is undergoing a significant change today with multiple unforeseen events and changing consumer mindset that expects product availability at much higher speeds. The mantra for supply chains is to transform itself with agility, flexibility & resilience, which would differentiate itself in the marketplace tomorrow. A key enabler to catalyze the transformation would be the effective integration of data assimilation and analytics and embedding efficiency improvement in each step of the value chain, write Prof. V G Venkatesh, Associate Professor, EM Normandie Business School, France and Rohit Menon, GlaxoSmithKline, Switzerland.
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N the last few decades, the focus on an end-to-end supply chain involved a global network of low-cost origins supported by inter-continental logistic networks that fed into regional distribution networks to help bring customization closest to end consumers. However, a few black swan events in recent years have significantly tested the resilience of the supply networks and exposed those weakest links across multiple industries and geographies. A combination of headwinds such as the Russia - Ukraine conflict, pandemic driven backlogs, commodity price inflation, and imbalance in sea-freight capacity across continents puts significant pressure on maintaining the cost to serve end consumers, be it technology, consumer goods, or the pharma sector. Not long ago, there was a point in time when the supply chain function was viewed as an organizational cost center. However, today’s perfect storm of global challenges has catapulted the
12 CELERITY July - August 2022
supply chain from a supportive function role to boardroom discussions as more and more consumers experience empty shelves, increased prices, and unsure delivery timelines. There are various examples today where innovative and first-mover actions by supply networks, be it demand-supply planning, inventory management, or logistics, have been decisive who attaining the pole position in meeting consumer needs. From a classic supply model, there is ongoing transformation among value streams to digitize processes to organize & collaborate from the source to delivery stages. Adopting IT as a driver helps automate production processes, improve vendor engagement for materials, embed smart warehousing, and optimize logistics planning for end consumers. As part of navigating the headwinds, the e-commerce giant Amazon took some long-term decisions during the pandemic year that witnessed up to 14% of its portfolio out of stocks and cost increases as high as 25%. On the
V G Venkatesh is also a Senior Associate – Latin America with NextPort Inc, Colombia. His teaching and research interests are in global procurement, international logistics, and digital transformation. He is a Certified Supply Chain Professional (CSCP) from APICS-USA and has over two decades of industry and academic experience in global supply chain practices in different geographies such as Honduras (Central America), Sri Lanka, Hong Kong, and Bangladesh, and New Zealand.
Rohit Menon is a supply chain professional in the fast-moving consumer healthcare sector, currently based in Switzerland. He oversees the supply planning of multiple site clusters in Europe for market leading consumer brands. He holds an MBA in Operations Management from SIBM Pune, Mechanical Engineering from NIT Calicut and is an APICS certified CSCP & CPIM professional. His geographic experience includes Europe, Middle East Africa and Indian Subcontinent supply chain networks.
