It is important to identify and eliminate blackspots or blackholes in the supply chain process.How do we do this in the most efficient manner? Amit Kumar interacted with Pro MFG Media and shared his insights on the topic. Amit Kumar is an alumnus of IIM Ahmedabad and has done his B.E – Mechanical Engineering from IIT Kanpur share his insights on how to overcome these.. He is currently working at one of the big 4 global consulting firms with a focus on Supply Chain Performance Improvement and Business Transformation solutions.
The two constant and key challenges faced by supply chain heads are Traceability and Visibility. These two key challenges are also partly responsible for the blackspots that most people are not very certain about. Usually, Supply chain heads are unable to justify investment in technology that will ensure transparency and visibility. In theory, of course, they can always talk about how it will reduce the turnaround time, increase the flexibility, lower the lost sales in the system and help in meeting the demands. But the real question that remains is – How do they quantify this?
According to Amit, even the best of organizations have a restricted view when it comes to the losses in terms of sales that they have incurred due to the fact that their supply chain did not perform well. “If you have zero inventory, and a retailer places an order- that order won’t be written anywhere or get added to the system”,says Amit Kumar. This happens because the distributor did not note it down and this blackspot becomes a major point of contention for supply chain heads because they incur loss in sales. Now, this blackspot becomes a bright spot for supply chain heads as this is something that can back-up their need for technology that will increase transparency and visibility in the supply chain.
There are secondary level things that Supply-chain heads can use to predict loss in sales and one of them is having a warehouse store. But the issue with warehouse stores is that there are three tiers of warehousing: the manufacturer’s warehouse, the distributor’s warehouse and the retailer’s warehouse and a stock-out in one warehouse may not necessarily mean that there’s a stockout in the other two warehouses too. Thus, this becomes another blackspot- that supply chain heads don’t know what is available or where it is sitting in different tiers of warehouses. This is a blackspot because distributors are not transparent with their books, the last thing they would do is to open their books to the supply chain heads.
The solution to this blackspot is better application of technology and better digitization. Both of these things will help tackle the blackspot to some extent. A great example of this would be a chemical that can be easily used to create explosives, so the government mandates the supply chain head to be able to track every carton, every shipment of the chemical at any given point of time. Better application of technology and better digitization will make it easier to track the products and increase the transparency and visibility in the supply chain.
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