Citizens of Chennai are not likely to ever forget the deluge that inundated the city and its environs in the first week of December 2015. It was as if an enraged and furious Nature chose Chennai to vent to its pent-up anger on.
In 24 hours, the city received nearly half a metre (20 inches) of rain — about as much as San Francisco gets in an entire year!
Classic logistics problem
The modern metropolis was simply paralysed by the inundation. Completely unprepared, the city lost several hundred people, including some who drowned in their own homes and office buildings. Thousands lost property and lakhs rendered homeless overnight. The full impact on the businesses is still to be assessed.
Chennai was resilient and quick on its feet, and massive rescue and relief efforts were undertaken by the government, Defence forces and the incredibly service-spirited individuals who jumped into action without a second thought. It is unfortunate that some volunteers lost their lives in their efforts to help others.
Taking to social media, workers sent out on-the-ground requirement requests that reached all over the world; essentials like food, milk, blankets, and medicines poured in from various quarters; large stores and many businessmen came forward with supplies, but needed help for collection and distribution.
The challenge was in efficient coordination, storage and timely and proper distribution of relief materials — a classic logistics problem that can create chaos and confusion in place of collaboration and coordination.
Back in time
Flashback to 2005, when New Orleans was devastated by Hurricane Katrina: the role that Walmart played in the relief efforts is noteworthy. The company has since been looked up to as a model for logistical efficiency and nimble disaster planning.
During the catastrophe, it had quickly delivered staples such as water, fuel and toilet paper to thousands of evacuees. The company’s sophisticated supply chain delivered 1,500 truckloads of free merchandise and food for 100,000 meals, during this crisis. As one of America's leading retailers, Walmart employs a large number of supply chain professionals to manage its operations. And these skills came in handy during the Hurricane Katrina crisis.
Supply chain as a profession
We live in a globally integrated economy and enjoy the benefits of seamless supply chains. A modern Indian consumer will use a laptop manufactured in China, own an automobile with components manufactured in Thailand, wear a pair of Levi Strauss jeans produced in Vietnam, and enjoy sushi and sashimi imported from Japan. All these are made possible by sophisticated supply chains.
As they say, life is a mixed blessing; such a tight integration means any disruption in one part of the supply chain is likely to have global repercussions. The long drawn floods in Bangkok in 2011, that resulted in major environment and economic damages, are a case in point.
Robust planning and preparation are required to cope with the destruction and damage caused by natural calamities. The emergence of supply chain as an important function for any large corporation is one such step towards being adequately equipped.
Strategically important
What was once considered a ‘boring and dull’ function, comprising dead-end jobs, is now increasingly becoming strategically important for organisations. Apart from securing a seat at the table, operations and supply chain professionals are staking a claim to the coveted corner office.
Tim Cook, the head honcho of iconic company Apple, started his innings in Apple as an Operations Executive. He focussed not only on reducing inventories from months to days, but also replacing factories and warehouses with contract manufacturers.
Cook made long-term investments, which resulted in guaranteeing a stable supply of key components for the iPod, iPad and iPhone. His actions were credited with keeping costs under control. His focus on numbers, combined with the company’s design and marketing expertise, generated huge profits which ultimately resulted in his elevation as the CEO of Apple. It is significant to note that Apple, apart from Amazon and McDonald’s, consistently figures in the top five supply chain leaders.
The e-commerce angle
The explosive growth of the e-commerce industry has opened up enormous opportunities and complex challenges to supply chain professionals. Effective supply chain management is a key differentiator for companies like Amazon.
The massive fulfilment centres of the company and the technological innovations are well documented. Amazon has gained a patent for what it calls “anticipatory shipping”: a method to start delivering packages even before customers click on “buy”. In deciding what to ship, Amazon says it may consider previous orders, product searches, wishlists, shopping-cart contents, and returns. Amazon is even said to consider how long an Internet user’s cursor hovers over an item!
Other unique challenges
The huge CoD (Cash on Delivery) model, which is wildly popular in countries like India and China, poses unique challenges. The e-commerce industry is also beset with “returns”; many companies follow the no-questions-asked return policy, an allowance much exploited by many unscrupulous customers.
There have been instances of people ordering apparel, using the clothes for weekend parties and then returning them. Sports shoes are a commonly returned item as well, with runners often buying shoes for weekend events and returning them later.
Handling returns is a huge challenge and e-commerce companies lose heavily in the process. Therefore, companies need to handle these issues creatively without losing genuine customers, who return products due to a genuine grievance.
Employees' market
You can see there are so many aspects and functions in supply chain model. This has led to a huge growth in job opportunities. The pace of growth is nearly three times the country’s growth and it is clearly an employees' market.
Only in the last few years has the academic world recognised this opportunity and started offering specialised courses, diplomas and degrees in the supply chain domain. Many business schools offer courses in supply chain, and the industry is keen on recruiting such trained talent.
Today’s India’s supply chain sector can be compared with the advertising industry of the 1960s and 1970s. It is an emerging sector; there is enormous potential and people who are associated with the sector are likely to grow with it. The supply chain sector needs good talent and the rewards are excellent. You could be the next Tim Cook!
Single support system
It is ironic that a robust supply chain system can be built to increase buying capacity, enhance lifestyle and multiply business profits, but when it comes to dealing with adversities, we grope blindly. The ability to quickly leverage on the existing system and adapt it to cater to current requirements is the differentiator. Again, Walmart is a good example here.
Fires, quakes and floods throw us back to our primitive mode of struggle for sheer survival. We become dependent on a support system. Volunteers, NGOs, the government, the whole nation and the entire world can come to rescue. All one needs to know is where, when and how to start and accomplish the mission.
A simple but strong supply chain can be this single support system.
(This article is dedicated to the wonderful volunteers who, in the absence of an available supply chain system, did their remarkable best to help, save and support the people of Chennai. The worst is over but the disaster highlights the need to be prepared from the start!)
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