Five strategies from McNulty to manage Supply Chain in India
India’s economy has shown a steady growth (it grew at a rate of 6.8% in 2008, and is expected to dip only slightly to 5.5% in 2009). As a result, many global manufacturers are being attracted to the country and are even adjusting their supply chain operations to meet the specific needs of the Indian economy.
“To keep pace with India’s growth rate, companies have been focused on building production capabilities, distribution networks and retail outlets, resulting in complex supply chains with long lead times,” explains Stephen McNulty, regional vice president, Asia Pacific, with supply chain solutions provider JDA Software. “As the market continues to mature, companies must focus on optimizing operations to become more efficient. More frequent operational reviews are now essential to meet increased demand, adapt to varying fuel prices and account for fluctuating currency valuations.”
Stephen lays down five basic points for the manufacturers in order to manage the supply chain in India’s emerging market:
1. Stephen feels that the manufacturers should have a clear view of the local principles, customs and barriers apart from the tariff structures, road taxes, patent legislation and labor laws of India. “Knowing the limitations of India’s transportation infrastructure is critical in adjusting distribution strategies and having the flexibility to adapt to the varying restrictions and needs that exist within India,” McNulty explains.
2. As India still does not have a very well-developed communication system to match the global needs, companies need to emphasize more on constant communication and rely on more traditional means of information sharing to ensure that manufacturers, suppliers and retailers are all on the same page. McNulty says, “Many large manufacturing companies are allowing their partners, vendors and dealers to have direct access to their internal supply chain management systems in order to increase visibility with minimal investment.”
3. Manufacturers need to streamline supply chain functions, as well as sales and marketing operations, so that they can ensure a standardized process and a structured base for demand forecasting. They also need to keep track of the effect of pricing and promotions on overall customer demand, so that they can forecast accurately and lower supply chain costs. “By synchronizing the multiple dynamics of demand planning and production planning, companies will have the ability to reduce over-stocks and stock-out situations,” notes McNulty.
4. Get hold of actual demand data by investing in collaboration, planning, forecasting and replenishment (CPFR) and sales & operations planning (S&OP) solutions, so that you can plan accordingly. Suggests McNulty, “By enabling suppliers and retailers joint visibility into inventory management, current and expectant inventory levels and requirements can be continually updated and merchandising, inventory, logistics and transportation needs are synchronized.”
5. Get the right professionals and ensure co-operation and healthy team spirit among them. “The scarcity of a skilled, knowledgeable and committed workforce is a challenge facing Indian companies,” McNulty points out. “With an increased number of mergers and acquisitions and management takeovers, remote reporting is becoming a mainstream part of corporate life. Combining logistics and procurement personnel into a supply chain team with shared responsibilities enables companies to utilize individual strengths and strategically map skill sets to help lower operational costs and bring in efficient customer management and sustainability.”
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