H&S

Cloud-based Technology Empowers Supply Chains

The digital supply chain has now become the new normal, with technology supporting every step in logistics, from sourcing to delivery. Although cloud-based technology has been around for two decades now, supply chain organizations are still quite hesitant to make the traditional-to-tech switch. However, they need to start the migration given the ease of tracking a product through its entire life cycle through cloud computing. Moreover, It is the only solution where the disrupted supply chain ecosystem can be completely automated with minimal use of resources.

Imagine a seamlessly automated system to manage all of the supply chains through a single platform, while easily tracking inventory inflow and outflow. Cloud-based Technology (CBT) empowers the supply chain by providing this much-desired strategic approach for inventory deployment. Geoanalytics has eased the monitoring of the delivery networks and allowed quick prioritizing of the slow-moving shipments, remotely, from any location.

CBT has streamlined good visibility, agility, and resilience across the supply chain. It has adjusted well to the needs and changes in supply and demand, in real-time.

While traditional methods are more transactional and do not offer real-time accuracy, CBT helps companies enter the era of Supply Chain 4.0. The pros of CBT have helped in future-proofing the major elements of supply chains by overhauling integration, operations, purchasing, and distribution. Its influence can be measured through the benefits it has delivered after being integrated into supply chain management:

-   Agility of operations

CBT has allowed faster deployment of linear supply chain management solutions, which has created a faster return on investment. There are no more lags in IT project line-ups. With cloud hosting, processes can work seamlessly across the world, sans glitches that would otherwise lead to delays in shipments. It is the only way to keep up with the constantly changing requirements of the customer.

-   Cost-effectiveness and efficacy

CBT has added a wider range of features and pricing benefits for its users in supply chain management. Companies can now cut costs and expand their customer base with the support of the cloud. A full-scale data storage is now a dream to maintain as the cloud offers solutions to disperse the expenses across various users in small or large corporations. Moreover, it generates market opportunities for everyone regardless of the organization’s size.

-   Single source of truth

The real-time SaaS-based (Software as a Service) solutions, that can be accessed and easily shared throughout the network, have established quicker connectivity that takes the obsolete supply chain and converts it into an efficient supply chain network. The single-point origin allows easy transparency and traceability in any supply chain. Supply chains have become more dynamic, safe, and interactive to create end-to-end, in-sync functionality.

-   Scalability and flexibility

With the cloud, bottlenecks in a supply chain can be easily predicted. The supply network can be scaled to reach different suppliers and partners as and when the requirement arises. This has created flexibility with the usage-based model, network, and capacity which can adapt to the market as per its demands and conditions. This has resulted in maximum efficiency of the process through the integration of proper technology. Configuration of all the channels involves a lesser number of processes for organizations and hence supply chain can focus on individualized products and services.

-   The Future of Business

Supply chain organizations have successfully managed and upgraded their own supply chain processes over the years.  By adopting CBT, owners can now access supply chain data from anywhere, anytime. Businesses of all sizes can leverage this technology to reap benefits and upgrade to a revamped cloud management system.

CBT has forged faster planning and execution capabilities (supported by advanced analytics and in-memory computing), resulting in a faster turnaround and the use of minimal resources.

Equipped with a host of pros, there is no reason why logistics players should be skeptical about transitioning from traditional methods to cloud computing.

As 4.5PL solutions providers, H&S offers its complete infrastructure of top-notch IT support to its clients. With a hybrid system that combines the best of what both 3PL and 4PL have to offer. Our expertise in Supply Chain Management comes from the team’s 100+ years of accumulated experience in this practice.We believe that improvement in supply chain management can only be created by amalgamating the business processes and advanced technological methods like cloud-based technology to make our operations more advanced and aligned with the volatility of the market.

Rural to Urban Logistics: The Key to Connectivity

The growth of the logistics industry, in particular the supply chain management, is one of the main aspects of India’s development. Unfortunately, attention has mostly been skewed in favor of urban logistics over rural logistics. This can be attributed to a number of factors including population density, inequality of wealth, and the availability and quality of services such as communication, healthcare, and education

Yet, the juxtaposition of rapid globalization with the traditional mindset that still prevails in a huge part of the country, has created a unique customer base. Apart from that, there has been a rise in international and domestic demand for agricultural produce and traditional handicrafts. This has helped raise awareness about the importance of rural logistics.  

The advantages of building an efficient supply chain across the country would be numerous, from boosting connectivity to reducing poverty in rural areas.  

In this blog, we take a look at the issues faced by urban and rural logistics, potential improvements to the sector, and the advantages of developing rural to urban logistics.  

Urban and Rural Logistics: An Overview of the Market

The logistics industry has always been a vital link between urban and rural areas. Over 65% of India’s population, a staggering 890 million people, lives in rural India. The two main industries that compose the Indian rural market are the agricultural sector and the artisans industry.

Indian rural industries:

The agricultural sector in India is currently valued at Rs. 63,506 billion. Agriculture plays a vital role in the economy, from being the main source of employment to over 60% of the population to contributing to about 17% to the total GDP.

The second largest rural industry is handicrafts. It is a distinctive segment of the Indian economy, providing employment to over six million artisans. Traditional Indian handicrafts are coveted across the world, with the US and Europe receiving over 65% of the handicraft exports.

With the mechanization of processes, farmer subsidies, global demand, and government initiatives, the sectors should be booming. Yet, the rural supply chain suffers from multiple inefficiencies that lead to a supply-demand gap:

Infrastructure:

Several parts of the country remain inaccessible due to an undeveloped road network. This, along with the lack of necessary infrastructure between factories, storage areas, and delivery points, make it extremely difficult to plan out efficient routes or regular transportation. This increases distribution time, costs, and wastage of produce.

Organizational relationships:

It is becoming the norm to partner with vendors and carriers to ensure efficiency of the supply chain. However, in India, the markets are informal and disorganized, not connected to national or international markets. This leads to lack of awareness and knowledge about the details of the products, causing stagnation of the industries.

Middle-men:

Most rural dwellers in India are forced to depend on middle-men due to lack of market linkages. The common practice of middle-men is to buy products at an extremely low rate and resell them at multiples of the price, causing the farmers and artisans to invariably lose out.

Modern technology and communication:

Current trends in logistics, such as real-time tracking and blockchain technology, have not yet entered several parts of rural India. Even regular internet and connectivity is patchy, causing a gap between what should happen and what actually takes place.  

Improving Rural To Urban Logistics

In India, coordinated development between urban and rural logistics could be the key to removing the economic and social chasm that exists between the areas, achieving a reasonable allocation of resources, promoting responsible urbanization, and integrating urban-rural development.

Some current and potential ways of improving rural to urban logistics include:

Leveraging underutilized Assets:

Leveraging underutilized assets such as rural stores, department stores, and boutiques to develop a last-mile, entrepreneurial-led network.

Reverse logistics:

Gridding the country into equal parts and creating optimal routes for connecting the areas under each grid. Small and medium scale industries, such as farmers and artisans, are largely disconnected to the mainline markets. Current technology and ecommerce portals can be utilized to immediately bridge the gap between rural sectors and the consumers at a fair cost to all involved.

Rural distribution ecosystem:

Creation of a rural distribution ecosystem comprising a technology platform, daily route vehicles, and strong entrepreneur network. This will help improve access between rural and urban areas, including last-mile connectivity, introduce modern technology and infrastructure to the current supply chain, and assist in upskilling and providing employment to the rural areas.

Advantages of improving Rural to Urban Logistics

Millions of people stand to benefit from improving rural to urban logistics. Some of the main benefits include:

Reducing waste:

According to reports, the losses due to agricultural waste is Rs. 92, 651 crores. This staggering amount can be reduced exponentially with just a bit of effort.

Increasing rural tourism:

India is a unique country in terms of variety, culture, and biodiversity. Improving logistics will result in opening out the areas to tourism and increase employment opportunities. 

Improving healthcare and resilience against natural disasters:

Currently several parts of India are still inaccessible, which poses a huge problem in terms of healthcare and humanitarian aid. Developing rural infrastructure will allow improvement in health supply chains and transportation of basic goods during a disaster, potentially saving millions of lives.

Increasing education and overall satisfaction:

Providing education and upskilling opportunities to farmers and artisans will allow them to make informed decisions about their products and be aware of their rights. Improving rural logistics will allow producers to reap what they sow, increasing overall satisfaction

At H&S, our main aim is making a difference in the livelihoods of workers and micro-entrepreneurs across rural India through introducing modern technology in the supply chain and providing upskilling opportunities. We believe that everyone must be appreciated and properly compensated for their efforts in order for real development to occur. 

Supply Chain Dynamics in the Indian Retail Industry

India is a land where ancient culture meets modern technology — and the country’s retail sector is a reflection of that. The two main retail formats are modern/organized retail and traditional/unorganized retail. The former is defined as large-scale chain stores or e-stores that apply modern management techniques and principles to business, while traditional retail includes local department stores, street vendors, and markets that follow informal business practices.

Retail supply chain management, however, is essential to both these formats. It is the process of delivering goods to consumers as fast as possible, preferably without paying an outrageous amount. It must be optimized to be as efficient and affordable as can be managed.

In this blog, we aim to give you an insight into supply chain dynamics in the Indian retail industry, with an emphasis on challenges and complications faced by retailers, the role of technology in logistics, and the importance of collaboration.

What are the Main Challenges and Complications in the Retail Industry?

India is witnessing continuously changing lifestyles, increasing income, and rapid urbanization, resulting in insatiable customer demand. Although several advantages come with having access to such an enormous market, the retail industry does face its challenges.

Increasing competition

It’s a dog-eat-dog industry, and the massive increase in competition between similar or identical products and brands attests to that. To retain profitability and resilience, businesses are relentlessly trying to find cheaper goods and services, which often compromise quality.

Large corporations vs. smaller retailers
Another challenge is the undeniable advantage larger corporations have over smaller retailers, solely due to access to a huge amount of funds. This is unfortunate as although our beloved local mom-and-pop stores constitute the major portion of the Indian market, they are unable to maintain large inventories, use proper warehouses, or ensure quick delivery timings. This frequently results in larger companies swooping in and putting the local stores out of business entirely.

Network and transportation issues
Poor road network facilities and unavailability of regular transportation to remote areas also adversely affect both the retailers and customers. Since over 75% of people in India live outside cities and depend almost solely upon the small general retailers, both supply and demand remain unsatisfied.

Communication complications
Although communication services have improved tremendously over the last few years, a lack of information and awareness still exists in certain areas. This can lead to the selling of expired products, unhygienic storage facilities, and ineffective delivery and return systems, all symptoms of a failed supply chain. 

The Effect of Modern Technology on Logistics

We are in the midst of the tech era, with new innovations appearing almost daily. One industry that has been transformed by the storm of new technology is logistics. In a short amount of time, it has helped streamline and improve daily business processes and supply chain management.

The rise of 3PL and 4PL
One of the main benefits of technology in logistics is that it has improved efficiency and transparency by leaps and bounds. Third-party logistics providers (3PLs) and fourth-party logistics (4PLs) providers use wireless technologies and cloud computing to automate systems and improve accuracy. The use of Customer Relationship Management (CRM) allows 3PLs and 4PLs to streamline their client supply chain activity and improve client relations.

Technology in shipping
Technology in shipping comes in the form of radio-frequency identification (RFID) tags. They can be tacked onto inventory, allowing it to be traced through the entire process. Blockchain technology, a decentralized public ledger system that stores transactional records, documents all changes to a record in real-time, making it difficult to hack or cheat. 

Reduction of human error
Technology provides nearly impeccable data-capture which improves processes, identifies faster routes, pinpoints bottlenecks and mistakes, and provides analysis on areas of improvement. It reduces labor costs, manual errors, and streamlines data-capture and management. 

Having access to real-time information across the entire supply chain has been a game-changer, allowing companies to track their current operations and forecast business expectations.

Collaboration in Logistics: Building a Future Together
COVID-19 has shown us how vulnerable businesses are to disruptions in the supply chain. Hence, collaboration has become more important than ever before. It goes hand-in-hand with effective communication, ensuring efficiency and optimization of a supply chain.

Building an agile network
Collaborations include improving communication between and working with both internal stakeholders as well as external organizations. Businesses have realized that building agile networks and channels will allow them to navigate any sudden changes in their operations and environment.

An increasing number of organizations are reviewing their strategies and process, and have realized it is vital to build systems and teams that are flexible and able to adapt to a different world.

Sustainability through collaboration
With the rise in awareness and the need for sustainable and ethically-sourced products, businesses are also engaging with companies and individuals that help them reduce their impact on the environment.

Improving communication
In addition, collaboration is essential for strategic workforce management, helping employee productivity and boost morale. It helps personnel to feel more connected to the entire process, which increases the feeling of fulfilment. All this boils down to better customer service and increased satisfaction.

Suffice to say, for all businesses to stay up and running, it all comes down to how effective their supply chain management is. Government assistance, incorporation of modern technology, and continuing innovation are vital to successfully maintaining the unique Indian retail sector.

Top 10 Supply Chain Risk Management Strategies

Supply chains are the backbone of businesses. Effective management involves the flow of goods, right from storage to customers, and holds the key to revenue growth. Therefore, it is essential for businesses to prepare for any risks -- such as natural disasters, acts of war, theft, data breaches, or supplier bankruptcy -- that may disrupt their supply chains. Let’s look at some innovative tools that are effective in mitigating risks.

●     BitSight Discover (helps businesses map their digital supply chains)

●     Riskpulse (provides environmental risk management solutions)

●     IBM AppScan (delivers code verification solutions)

Businesses must develop contingency plans to cushion the impact that such disruptions could have on the bottom line. We are listing the top 10 tips to help companies do just that.

  1. Evaluate and identify current risks: It is important to take a critical look at the business and identify some possible high-risk events. Because the first step to being prepared is being aware of possible dangers.

  2. Prioritize by probability and impact: It is impossible to cover every scenario. That’s why it’s crucial to prioritize potential risks by predicting their impact on finances and brand image, probability of occurrence, or both. Once this has been prioritized, contingency plans can be worked on accordingly.

  3. Ensure supplier quality: Suppliers can hugely impact a company’s reputation. In addition to ensuring the quality of supplier goods, be aware of the source of materials and communication with all stakeholders. It is important to ensure long-term supplier viability to avoid any future complaints regarding quality. 

  4. Diversify suppliers: Depending on a single supplier is not advisable. It is wiser to source from low-cost locations around the world and establish reliable secondary suppliers in different regions to minimize the risk of delays. 

  5. Be aware of suppliers’ risks: It is crucial to be aware of all types of risks the suppliers face -- be it compliance or political/economic conditions that may impact their ability to serve. 

  6. Include partners in risk planning: It is important to work with suppliers, transportation carriers, data management centers, and customers to create a disaster recovery and business continuity plan that aligns with the supply chain.

  7. Purchase cargo insurance: Insurance is mandatory to protect in-transit shipments as well as warehoused goods against loss or damage anywhere in the world, whichever carrier or mode of transportation. 

  8. Be transparent with partners: Ensure consistent and clear two-way communication among stakeholders, especially around issues such as increased sales projections or major changes in the product. 

  9. Consider trade credit insurance: Slow-paying or no-paying customers can impact working capital. Trade credit insurance can help protect the bottom line, free up some capital, and help secure better financing options from lenders. 

  10. Review risks periodically: In order to avoid risks as much as possible, review risk scenarios regularly and identify changes in the supply chain. 

It is important to be a step ahead and have a contingency plan. These ten strategies can help businesses tide over crises and mitigate unforeseen disruptions. What’s more, technology has made it easier to follow these processes and model key risk scenarios. 

At H&S, we balance sustainability and profitability by building future-ready 4.PL solutions. We work with innovative technologies such as electric vehicles, blockchain, and AI  to create a digital supply chain. We also utilize techniques such as the weighted distance traveled method to optimize the use of transportation.  

Role of logistics industry in revival of post-Covid economy

COVID-19 has spread across the globe at a rapid pace, disrupting and debilitating the economy. India has faced several challenges due to the country-wide lockdown, with GDP plummeting to -8.9% as of November 12, 2020.  There have been labor shortages, cargo capacity challenges, a manufacturing slowdown, order delays, stuck shipments, as well as demand and supply shocks.

 The pause in manufacturing brought down demand for logistics services, which likely resulted in downward pressure on prices across warehousing, freight, and logistics. When countries around the world began locking down, minimal export-import movements amplified the crisis in the logistics space.

 The logistics industry contributes significantly to the national economy by creating employment and generating foreign investment influx. It connects various markets, suppliers and business areas such as material handling, warehousing, packaging, supply chain management, procurement, and customs services across the country. Now that lockdowns are being lifted, the industry can help revive the post-COVID economy.

Steps taken by the logistics industry for revival of economy

Rapid technological advancements, changing consumer preferences, government reforms, and shifts in service sourcing strategies are expected to lead the transformation of the Indian logistics ecosystem. In this new normal, there have been strong market trends towards the e-commerce segment, transforming interaction between brands and consumers.

India’s economy started to bottom out with lockdown getting lifted. During the festive season, India witnessed a strong surge in online shopping while consumers wanted to stay indoors. As per the Festive Shopping Index 2020 by the Retailers Association of India (RAI) and Litmus World, 75% of consumers have considered online shopping. Flipkart’s ‘Big Billion Days’ and Amazon’s ‘Great Indian Festival’ was a big success this year amid this global pandemic as these two organizations had ensured that the consumers get access to everything they need from the comfort of their homes at affordable prices. It was possible because of their 

The pandemic also brought an increase in the demand of essential items such as groceries, food, and pharmaceuticals. Many logistics companies catered to this demand while adhering to safety protocols with contactless delivery. In this situation, the logistics industry focused on increasing the efficiency of services and optimizing cost.

Another method adopted by the logistics industry was to help the MSMEs and align with the government’s self-reliant movement. For small-sellers who want to take their business online and increase their customer base, the logistics industry has become an all-inclusive solution. With automated warehousing and packaging services, the industry should ensure that there is minimal weight discrepancy and a seamless post-order experience.

A recent Mckinsey survey (October, 2020) on consumer sentiment across the globe reveals that consumers will continue to shop online even after the pandemic is contained. Those from metros and smaller towns have already started placing orders for non-essential goods and services. What’s more, the stimulus package too will play a crucial role in putting more cash in the hands of consumers for non-essential consumption.

While other sectors and industries may take more time to recover from the impact of COVID-19, the logistics sector will be one of the few that will continue to operate at an increased pace and bounce back. The discretionary spending that it may spur in due course of time will significantly contribute to the post-COVID  revival of the economy and unlock India’s economic growth potential in the post-pandemic world.

A country’s economic growth depends largely on the logistics companies and their ability to transform themselves. Thus, it is important to choose the right supply chain partner who can help elevate businesses post-COVID.

At H&S, we balance sustainability and profitability by building future-ready 4.5PL solutions. We work with innovative technologies such as electronic vehicles, blockchain, AI, etc to create a digital supply chain. We also utilize techniques such as the weighted distance traveled method to optimize the use of transportation.

Source: https://economictimes.indiatimes.com/industry/transportation/shipping-/-transport/indias-logistics-sector-to-reach-usd-215-bn-by-2020-survey/articleshow/62693817.cms?from=mdr

https://www.news18.com/news/buzz/how-micro-logistic-sector-can-become-a-critical-enabler-in-indias-economic-revival-post-covid-19-2685031.html

https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/a-global-view-of-how-consumer-behavior-is-changing-amid-covid-19

https://economictimes.indiatimes.com/news/economy/indicators/moodys-revises-india-forecast-for-the-calendar-year-2020-to-8-9/articleshow/79186213.cms

https://retail.economictimes.indiatimes.com/news/industry/majority-indian-consumers-consider-online-physical-stores-for-shopping-survey/78713603

Top Supply Chain Management Trends in 2021

The trends in supply chain management are evolving everyday, ranging from the availability of big data, supply chain digitization, and omni-channel marketing. This year is almost over, and it’s time we look at some of the latest supply chain trends of 2021.

Supply chains make up an essential aspect of most businesses today and have a direct impact on the economy. Thus, understanding the factors that affect supply chains is crucial. Against this backdrop, we can make a few predictions about the supply chain trends in the coming year. Technology is behind most of these trends and has a great effect on every business today with the supply chain as the backbone of all. In supply chain management, the use of such technology has grown beyond stock taking, order, and delivery. In times of the new normal, next year’s trends cover technological innovation at its best.

Let’s discuss each of the upcoming trends in detail. 

1. Agile Supply Chain

In 2021, for supply chains to function at its best, there is a need for more flexibility and agility. Throughout 2020, we have witnessed many unforeseen events like a pandemic or a cyclone that have caused disruptions in the supply chain. With more agility, such natural events are proved to be managed better, and an agile supply chain can help navigate scarcity and disruption.

2. Green Logistics

Green logistics describes all attempts to measure and minimize the ecological impact of logistics. A notable trend in supply chain management will be the advancement of eco-friendly logistics, which can also be cost-effective. The plan of switching to a sustainable supply chain has started with using minimum packaging material. In the coming year, more supply chain businesses will conduct environmental auditing and set sustainability targets.

3. Blockchain

Customers love same-day delivery, but this can be difficult in logistics. Blockchain technology can play a big role here by making it cost-effective and paperless. By cutting out middlemen in the supply chain, logistics reach straight to customers much quicker. Blockchain helps to dish out the digital data through a transparent and secure process by using an end-to-end encryption system to keep all data safe.

4. IoT and Big Data

As IoT advances, businesses can automatically manage their inventory and stock movement better. The system works by collecting big data into a central system for analysis. With the help of big data, supply chains can derive valuable insights and improve operations, hiring processes, and marketing strategies.

5. Omni-channel

The ultimate customer experience is what everyone expects. This entails providing them with a direct and convenient shopping experience. The business requires convenient omni-channel supply chains to enable customers to have a smooth experience.

6. AI and Machine Learning

AI and ML technology has brought about several new processes in supply chains, and large scale automation is one of them. Machine learning can read, identify, and replicate complex content, patterns, and procedures. Starting with inventory management and seamless communication, innovative technologies for improving supply chains can go a long way.

There's no doubt that processes have become faster, smarter, customer-centric, and sustainable. AI, blockchain, and IoT technologies will enable supply chains to automate and simplify operations. The trends on security, transparency, market prediction, big data analytics, and flexible and agile supply chain processes will continue to grow as the year closes. Being informed and ahead of supply chain trends will help minimize disruptions and enhance your business's productivity and efficiency.

At H&S, we balance sustainability and profitability by building future-ready 4.PL solutions. We work with innovative technologies such as electronic vehicles, blockchain, AI, etc by keeping us updated about the new and upcoming trends.

How Can Supply Chain Partners Help Retailers in the Festive Season?

India is a land well-known for its diverse culture and rich heritage. Despite diverse geographies, socio-economic factors, and consumer preferences, the country stands united in a common obsession — the festive season. The last quarter of the year is choc-a-bloc with festivities celebrated across faiths, and is therefore also known to be the busiest shopping period in the Indian calendar.

For retailers then, it’s no less than a chance to strike gold in terms of revenue. At the same time though, it is also a time when their supply chain processes and customer service will be pushed to their limits. Higher than usual demand for goods means that logistics need to be spot-on, day after day. In addition, retailers are challenged with the delicate task of maintaining the demand-supply balance through.

●     Forward planning
Retailers need to plan at least 3-4 months ahead of the festive season due to heavy demand of the product. It can be due to local preferences, traditions, and more. Same product sold across multiple locations could need a regional color packing option as a last-mile need creating pressure on the supply chain.

●     Better customer experience and higher profits
There is a need to reduce the reverse logistics of customer returns and low demand goods. Timely availability of size, model, color, or any other consumer preference at the retail level needs to be serviced to meet and improve the customer experience.

How to ensure a stable supply chain during the festive season

●     Timely delivery

It’s crucial to get products delivered to customers within the promised time frame as products might lose their value once the festive occasion has passed. To ensure zero misses in delivery times, logistics companies have adopted several capabilities such as multi-modal transportation, automated tracking, RFID, etc. They also have the capability to increase the number of delivery executives, vehicles, etc. to ensure timely delivery of products during these times.

●     Smart consolidation

While logistics plays a vital role in timely deliveries and boost retail, it is also an important expense that can impact the end profits. Logistics companies can easily consolidate shipments through centralized warehouses and optimize delivery dates and time -- a task far more difficult for small and medium scale businesses.

●     More warehousing space
During the festive season, the continuous flow of orders from customers can overwhelm the warehouses of businesses. In this scenario, partnering with a logistics provider is ideal since they have the capability to accommodate and rearrange shipments in their existing network of warehouses. Additionally, they can also lease new warehouses on a temporary basis at much lower costs than retailers.


To conclude, retail, from luxury to e-commerce, is an exceptionally price-sensitive business in the festive season as customers tend to buy products at a discounted price. So there’s always a price war between the retailers. Logistics, when utilized smartly, can prove to be a key factor in improving profits.

With H&S as your partner, you can focus on providing the best products, while we work on building and executing the optimal supply chain model. Get temporary manpower required to manage the deliveries on-time and in-full.

Our future-ready solutions help you improve service performance, minimize costs, deliver superior customer experiences —  and scale your business to new heights and keep you on-the-go in the festive season as well. We offer temporary warehousing space requirements for companies to accommodate the sudden splurge in orders during festival and e-commerce sale days. 

Source:

https://blog.locus.sh/how-your-supply-chain-can-accommodate-the-festive-season-rush/

https://www.logisticsinsider.in/managing-supply-chain-volatility-during-festive-season/

Is it possible to manage demand uncertainty, flexible supply chains, and high SCM costs?

Flexibility and efficiency are a trade-off that most companies make while building their supply chains. To make supply chains more cost-effective, companies often choose offshore production and sacrifice accessibility and visibility. The popular efficiency approaches such as just-in-time inventory or seeking the lowest cost supplier contributes to the illusion that efficiency is the only important aspect. However, the weakness of these popular approaches has become more apparent in the ongoing pandemic. These methods aren’t really capable of ensuring resilient supply chains because they aren’t built to tackle demand uncertainty. Demand uncertainty is a situation that can happen at any time with or without a pandemic -- and can leave businesses grasping at straws to keep their supply chains functioning.

What is demand uncertainty and how is it linked to high supply chain costs?

Demand uncertainty refers to the external factors that cause demand to unexpectedly increase or decrease. This situation can be caused by a public health crisis or even a sudden shift in the customers’ tastes. Many software help companies to forecast demand and develop relevant production and supply chain strategies. But most businesses account only regular demand and forget to include uncertainties in their production plans. This mistake can cost a fortune due to excess inventory, excess capacity, and expensive transportation that companies may need to resort to swiftly respond to demand shocks.

How to manage demand uncertainty while keeping costs in check?

Resilient and flexible supply chains that are capable of absorbing demand shocks require collaboration and agility among all players in the network. Some ways to manage demand uncertainty are as follows:

Adopting a variable cost approach

During periods of no demand or less demand, continuing to pay the same costs for warehousing dents the bottom line further. Hence, it’s important to collaborate with supply chain service providers that adopt a variable cost approach. H&S is the only company in India that helps enterprises save fixed costs by charging for services that are availed on the units sold. This works wonders in keeping supply chain costs to a minimum when sales fluctuate unexpectedly.

Enabling digital collaboration

Information sharing is the key to ensure that each node of the supply chain is aware of the current status of the operation. Companies can use cloud-based applications and collaborative platforms to assist every partner in the chain to access information quickly and securely. This enhances the speed and quality of decision making within the organization as critical information is shared with relevant parties as soon as it is received.

Real-time visibility and analytics

Control tower solutions refer to central command centers that integrate data from all supply chain partners using technologies such as 5G technology and blockchain. This enables companies and their distributors to know the exact location and state of the goods. With this data, organizations get visibility into the operations of all the partners in the chain. Furthermore, they receive real-time demand signals which enables them to reevaluate production. Companies can also adopt machine learning and artificial intelligence to generate early warning signals, simulate risk scenarios, and develop appropriate responses to disruptions in the supply chain.

Supplier assessment and inventory optimization

During a period of uncertain demand, it’s imperative to critically analyze every supplier in the chain. Some suppliers are more critical than others, hence different strategies must be developed to handle each segment. Additionally, companies must diversify and collaborate with local suppliers if their current partners are situated abroad and are inaccessible.

Lastly, manufacturers must keep track of inventory levels at different locations and re-route distribution to locations with high demand. As soon as there is a hint of demand uncertainty, companies must update their demand forecasts and revise their production schedules to meet the new estimates.

The strategies that once allowed companies to become efficient have now caused them to struggle during demand uncertainties. However, efficiency no longer has to come at the cost of flexibility. Increased output, reduced financial loss, and minimized product development cycles are just a few benefits of investing in resilient supply chains. The benefits, as well as the current instability in the global economy, are pretty good signs that the time to build nimble supply chains is here.

Sources

●      https://home.kpmg/in/en/home/insights/2020/05/ramping-up-the-supply-chain-post-covid-19.html

●      https://www.bain.com/insights/supply-chain-lessons-from-covid-19/

●      https://www2.deloitte.com/content/dam/Deloitte/ca/Documents/finance/Supply-Chain_POV_EN_FINAL-AODA.pdf

●      https://pdfs.semanticscholar.org/043f/02d995bfc37425b0b898e37920ee31477bd8.pdf

●      https://blogs.sas.com/content/hiddeninsights/2018/07/12/reducing-supply-chain-uncertainty-downstream/

4 layers of logistics services and the rise of 4.5PL

Back in the 1980s, trade restrictions made it difficult for companies to dive into the unknown territories of international markets. But once local markets began saturating and international trade started thriving, companies began exploring newer markets across the globe. The pace of globalization increased and companies needed to build an extensive supply network to support overseas expansion. This led to the development of third- and fourth-party logistics as we know today. However, before the evolution of these modern logistics services, first- and second-party logistics were the default choice of businesses.

What are 1PL and 2PL?

First-party logistics (1PL) refers to companies that retain complete control of their logistics. They use their own assets (trucks, warehouses, etc.) to store and deliver goods to their customers. Though, 1PL helps to keep a close eye on operations, the additional infrastructure and resources needed are a permanent cost to the business.

Companies might decide not to own any assets and outsource logistics to service providers with transport, handling, or storage capabilities. Such a service provider is known as a second-party logistics provider (2PL). This method provides the flexibility to outsource only a few components of the supply chain. Hence, it is only suitable for businesses that want partial control over their supply network.

What are 3PL and 4PL?

From warehousing to delivery, third-party logistics providers take care of the entire supply chain, using an asset-based model. 3PL enables companies to focus their time and resources on their core competencies while also reducing costs and delivery times. Since 3PL providers pool resources and generate economies of scale unlike any other logistics services, they are the go-to choice for businesses that want to reduce cost.

While 3PL takes care of the operational aspect, 4PL builds a customized model to increase the overall efficiency of the value chain. 4PL operates on an asset-free model to assist companies by enabling coordination among other service providers. However, the services of 4PL are limited to consultations -- they aren’t involved in the execution of the supply chain model. 4PL services are usually the ideal choice for businesses that are looking for custom solutions and value chain optimization.

The middle ground - 4.5 PL

4.5PL goes a step further than other service providers by integrating the operational excellence of 3PL with the technical and business expertise of 4PL. 4.5PL is a promising hybrid solution that is only provided by a handful of companies. In India, H&S continues to be the only 4.5PL company.

What makes 4.5PL unique?

●       Cost efficiency - A 4.5PL enables businesses to reduce their capital investments by taking over their entire supply chain operations. Economies of scale allow service providers to optimize cost for all their clients

●       Consultative partner - They consult businesses on every component of supply chain operations and devise strategies that can optimize the entire value chain

●       Customized solution - They build customized solutions to address the specific challenges of each business

●       Expertise - They have the industry expertise to understand the trends and upcoming technologies such as AI, ML, Blockchain, and IoT that can be implemented into the business

●       Technological prowess - They provide a well-developed IT structure and boast in-house technologies to enable supply chain visibility and foster collaboration

Since the advent of global supply chains, the world of logistics management has gone through several transformations. As customers demand and technologies continue to change, so will the logistical needs of companies. In this ever-changing industry, 4.5PL providers handle current supply chain needs and bring the agility needed to respond to any future opportunity or challenge. H&S is one such dedicated 4.5PL partner that can help you design and execute a cost-efficient, high-tech model to address your business concerns and to equip you for the future.

Sources:

●       https://www.tradegecko.com/supply-chain-management/what-is-4pl#:~:text=What%20is%204PL%3F,supply%20chain%20solutions%20for%20businesses.

●       https://beamberlin.com/logistics-101-1pl-2pl-3pl-4pl-5pl/

●       https://legacyscs.com/evolution-of-3pl-supply-chain-challenges/

The COVID shock to global supply chains and the path to recovery

Global supply chains form the backbone of modern economies. For years, these networks have helped us get products from across the world to our doorsteps. While this has definitely allowed us to live a quality life, the dark side of these interwoven networks has come to light in recent times. The limitations are such that if one link of the supply chain network happens to weaken, a domino effect is triggered that can lead to the complete collapse of economies. This is exactly what we are seeing in the wake of COVID-19. The destruction caused by the pandemic is rumbling through our world, disrupting supply chains and shutting down businesses.

Here’s a breakdown of the impact COVID-19 has had on every stage of the supply chain.

The Chinese effect on procurement and production

Considered to be the ‘de facto’ factory of the world and now the epicenter of the coronavirus, it’s no wonder that businesses that source or produce in China are the ones hit the hardest. China contributes around 17-20% to the world GDP — a statistic that showcases the damaging effect that this crisis has had on businesses that are reliant on China for their everyday operations. The hunt for lower-cost, efficient production has resulted in the consolidation of risk, which has caused industries to come to a standstill.

Global shortages

Modern logistics have made it easy for economies to engage in import manufacturing and exporting. However, since transporting raw materials and finished goods has become a herculean task in the COVID environment, there is a real possibility of global shortages of essentials. For instance, India is the leading global supplier of generic medicines. But, around 70% of raw materials for these pharmaceuticals are imported. With restrictions on transportation, the world may be on the edge of a global shortage of this life-saving commodity.

Distribution disruption

Lockdowns and curfews across nations have already led to labor shortages in warehouses. Additionally, fear and uncertainty have pushed customers to stockpile essentials, pressurizing supply chains that are not prepared for such spikes in demand.

The way forward: How supply chains can cope with COVID-19

The pandemic has brought the weaknesses of global supply chains to the forefront and made companies realize that a change was long overdue. Some of the ways companies can make their supply chains more resilient are:

Digitizing supply chains: Technologies such as IoT, blockchain, artificial intelligence/machine learning-enabled demand forecasting, AGVs, and drones, among others can help to reduce dependency on labor across the supply chain.

Enhancing risk management capabilities: Organizations must be prepared for all future contingencies that might lead to supply disruptions. Modeling cost structures, monitoring performance data, and providing visibility into value chains are some ways to minimize the risk.

Performing simulations: Simulating supply chain networks before implementation can help businesses identify the most efficient strategy. Companies must ensure that this strategy is adaptable to current and future constraints. Additionally, stress tests must be undertaken to make supply chains more flexible and resilient.

Diversifying operations: Companies must reduce their dependence on one country for sourcing or delivery, and explore other avenues so as to reduce the risk of failure. 

Although a pandemic is a grim situation for us all, it has shown us that there’s always room for improvement. During this time, businesses must reflect on the weaknesses of their supply chains and devise their future strategies accordingly. Yes, these situations are nearly impossible to predict but we can still learn lessons from our present and make the best of technology to ensure the robustness of supply chains even in the face of adversity.

Sources:

●      https://www.entrepreneur.com/article/349229

●      https://www.imd.org/research-knowledge/articles/supply-chains-adapting-to-covid-19/

●      https://www.thehindubusinessline.com/opinion/covid-19-exposes-indian-industrys-supply-chain-vulnerabilities/article31224928.ece