by WAF Think Tank
The automotive supply chain for manufacturing cars, trucks, buses and other vehicles is one of the most complex in the world. It’s becoming more global too, second only to the electronics sector for the spread of suppliers, manufacturers and other third parties around the world. Globalization adds some unique complexity to the automotive supply chain, and demands practical solutions from vehicle manufacturers and brands.
It’s not just globalization that creates difficulties for automotive suppliers and builders. Changes in manufacturing processes, consumer demands and new, disruptive trends – all impact on the vehicle supply chain network for raw materials, parts and finished automobiles. Both internal and external factors require automotive supply chain managers to minimize costs, optimize manufacturing and distribution, and ensure that parts and products get to the right organizations at the right time.
And so it was that the WAF Gurus Live Episode 25- was held virtually recently in which Gurus of the auto and mobility industry across discussed this very issue – How to Master Supply Chains in 2022, and they collectively explored some of the main challenges facing automobile manufacturers, together with the steps that can be taken to manage the automotive supply chain and minimize impact.
The panel comprised 1) Kalpesh Pathak, Automotive SCM Veteran, 2) Ram Kuppuswamy, Chief Procurement & Supply Chain Officer, Hero MotoCorp, 3) Vijay Kalra, Head- Mahindra Institute of Quality & Member- Central Safety Council, Mahindra Group, 4) Niilanjan Roy, Director- Purchasing, at Faurecia Group India, 5) Sanjiv Upadhyay, Co-Founder- Metal Pal and an SCM Veteran and 6) Anuj Guglani – the founder and CEO at World Auto Forum.
Anuj Guglani introduced the scope of the WAFINAR by stating that the pandemic had caused severe supply chain disruptions and the Chips shortage had a domino effect on the other products and services too.
When the un- lockdown process was initiated, the industry professionals had the following Action Plan:
- Digitise and Automate the Warehouses
- Retail Forecasting to be used instead of planning based on Wholesale Figures
- Access to low-cost Funds, Tech for Tier 2 Suppliers with the help of OEM and Tier 1
- Share knowledge in real time for running integrated, interdependent Supply Chains
He wished the panel to review how we fared on these points across 2021 and wanted to know the Action Plan for 2022 for agile, dynamic, flexible and resilient supply chains.
Kalpesh Pathak, an SCM Veteran spoke how digitisation has changed the entire supply chain management. He pointed out the challenges such as the freight congestion, the rising prices and stressed that now the leaders had much to unlearn and the need of the hour was a collaborative approach, close partnering and working with all the stakeholders like suppliers and dealers, and the entire ecosystem. He took the case of his organisation where he and his team have worked with not just tier 1, but tier 2 and tier 3 suppliers and addressed their problems. He commented on the beautiful concept of dynamically aligned supply chains.
Dr. Ram Kuppuswamy from Hero MotoCorp spoke of the importance of effective communication to be really close to people, to partners and listen to them; these are the opportunities of this pandemic. He quoted Dr. Pawan Munjal, Chairman & CEO of Hero MotoCorp- “Life before livelihood” that puts everything in the right perspective. He added, “the single biggest tool that we have, in these times is, Innovation.”
He called for envisaging or visualising the whole supply chain, the involvement of people and the impending need for better problem solving and maintain the continuous process of solving problems of the stakeholders. He felt that the way we have been taking decisions and balancing risk in the last few decades has all changed. Last 2-3 years have been completely disrupted, have made us innovative, ushered in a new way of thinking, and drawn us closer to people. He commented on the transparency, the integrated supply chains, and the role of technology.
Vijay Kalra from the Mahindra Group spoke of the spirit of Rise of the Mahindra Group which is based on 3 brand pillars: Accepting no limits, Alternative thinking and driving positive change. In the light of his initiatives, Quality Institute Initiatives or driving TQM across all the businesses of Mahindra Group, he said that if one looked at the top 20 companies in India from the 1980s, 1990s, then Mahindra has been around there because company has the DNA of “Ready for Change and Ready to Adapt as per 3 Rise brand pillars”. As for outsourcing, he said you can outsource the work but you cannot outsource responsibility and we should not be in a victim mode because of the pandemic. We should take it as an opportunity and rise. He recalled the story of The Hare and the Tortoise and said that successful hares/rabbits don’t nap. He said that 70% of the work that we do should be system driven, for better quality. We should apply more time to thinking and innovation.
Niilanjan Roy from the Faurecia Group said that whenever there is a supply chain glitch, the share price of a listed company goes down by 8%, that is the kind, that is the correlation. Mentioning the current chip shortage, he pointed out how the scheduled orders got cancelled and the same chips got diverted to gadget makers, and hence the entire supply chain in automotive went for a toss. He estimated the loss due to the pandemic in the industry being close to 170 billion dollars and cautioned us to be ready and better equipped as there could be pandemics, climate changes, typhoons or storms. Better stakeholder management, SCM based organisations and regulations cannot be overemphasized.
Sanjeev Upadhyay, an SCM Veteran showcased a digital tool called Metal Pal where there are several hundreds of suppliers enrolled with experts of various industries to enhance quality, reduce cost and turnaround time. They have a better quality of goods and services and something that he and his SCM teams have created, based on their decades of experience of working in supply chains in automotive and oil & gas. He also spoke about the need for better regulation and appreciated how the MSME-related regulations have empowered the sector and helped them keep afloat during the pandemic times.
Anuj Guglani summed it up by saying that while we are in the midst of the third wave, we might have to be physically distanced but socially we have to be closer than ever before. We have overcome the last two waves; we shall overcome this one too. There cannot be a better time than this, to really be together, be there for each other, and be considerate towards each other’s schedules and health. The new mantra was to think for the new innings for the industries, use better technology and action the 2022 points and take them to the next level.
Compiled by Kiran Misra
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