Certain sectors in the industry have always been highly cost-competitive. Where growth and sustainability used to be the primary business drivers, now, cost management and long-term resilience represent a new organizational focus. Senthil Kumar KK, National Manager SCM at Hindustan Coca-Cola Beverages Pvt Ltd shares with Pro MFG Media, the significance of optimization of supply chain costs, and the emergence of out-of-box thinkers in the industry.
Cost optimization and reduction have always been key to profitability for manufacturers. However, the COVID-19 crisis has sharpened this focus and seen the emergence of new cost resilience trends. Enabled by digital, these are likely to change the competitive landscape for the long term.
The organization commenced the business strategies and financial plan, but COVID 19 changed the course of the entire business model. The whole uncertainty compelled the management to relook into the strategy and restructure the long-term as well as short-term goals. On account of the ensuing pandemic, a lot of organizations were able to bring control over the variable cost as a component of their total cost of operations. However, the bigger challenge lies in reducing the impact of the fixed cost, which creates massive pressure on every supply chain management.
The challenge needs to be dealt with out-of-the-box ideas, and apparently, several leaders are nowadays becoming unconventional thinkers. They are bringing in transformational ideas in the organization. The Hindustan Coca-Cola Beverages Private Limited implemented several real transformational ideas that have bought productive changes in the organization. The unconventional ideas helped us to rethink the skills management or re-drafting the existing demand planning. While several organizations were successful in optimizing the cost, there were numerous organizations and other industries such as the hospitality industry that were severely impacted due to the pandemic. The FMCG industry also faced enormous effects due to the nationwide lockdown and, since the major consumptions are derived from hotels or malls, the closure of all such entities created chaos. Although the industry always focuses on cost optimization, the organizations across the industries accelerated their emphasis on reducing the cost. The Hindustan Coca-Cola Beverages Private Limited did sail swiftly in the storm and managed to minimize the disruptions.
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