Continuous transformation in this unpredictable VUCA world will help us spring forward

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“Crisis is an opportunity riding on a dangerous wind”. In order to sail through this critical period as well as maintain innovation during these crisis conditions, companies have to be able to quickly setup up digitally-driven platforms and start harnessing the wisdom of their employees to tackle the headwinds. Dr Xavier Britto, Chairman, Kerry Indev Logistics in an inclusive conversation with Upamanyu Borah reveals about having the accurate methods and systems in place to collaborate around ideas and refine solutions to help safeguard the enterprise and also get ahead of the curve with embracing evolving market trends and reprioritisations.

What immediate effects did the coronavirus outbreak have on your operations and portfolio?

Initially, on-time clearances of imported commodities were affected with ports and terminals getting congested, causing complete supply chain disruption. The different inter-state policies also caused hiccups with detention at the state borders leading to longer turn-around-time.

Our teams including our ground staff across all divisions worked 24×7, maintaining open lines of communication vertically and horizontally across our organisation, both internal and external with timely updates and consistent support to our clients which became our lifeline.

Can you explain in detail about Kerry Indev’s change in strategies in project execution? How is your ground workforce helping ramp up your projects?

The pandemic crisis removed all vertical and horizontal barriers of internal/external communication which required team across divisions and locations, experiment, adapt, evolve and have open lines of interaction constantly moving onward amidst the crisis – building pliability on the way – Execution-As-Learning and the Power of Teaming were few of the adaptive solutions undertaken successfully.

Our ground workforce’s biggest strengths were commitment to their roles and responsibilities. As and when a new project arises, for example, movement for air freight station (AFS), all personnel responsible of the operations and communication were present at the scene ensuring smooth operations despite being day or night.

During the initial outbreak of the pandemic, there was heavy storage movement as a step to decongest port terminals. Our ICD and CFS teams including the management as well as the ground workforce put up in the office overnight to ensure completion of the operations.

What according to you has been the biggest shift in the way companies have been operating since the lockdown?

The biggest paradigm shift has been the ability of employees to work from home and the feasibility of successively coordinating and communicating internally to the organisation as well as externally to the stakeholders, which was thought to be not possible pre-COVID-19.

The pandemic has also expanded the technological ability to reach across to various stakeholders through video conferencing which will continue offsetting the need to travel for business which was a surprising positive outcome.

What is your outlook on the industry’s overall improvement in the coming quarters?

Restarting of the processes with clear emphasis on maximisation of capabilities, optimal capacity utilisation and appropriate allocation of resources is the present scenario.

The next quarters are expected to be a definite period for gaining a steady drive forward, with the industry reacting to the demand.

The logistics and warehousing sector is projected to be one of the first sectors to recover from the pandemic. By the fourth quarter of FY20, we also expect to generate revenues in boosted markets – the current market data reflects the same.

Multi-storey warehousing will gain momentum with more retailers and e-commerce players choosing commercial spaces within the city to cater to their consumers as peripheral warehouses proved their faults during the pandemic.

Pharmaceuticals are a major component of India’s trade expansion strategy, particularly with the country’s stated objective of a wider diversification of the export profile in terms of both products as well as destinations. Where does the life sciences business fit in the overall Kerry Indev Express’ operations? How have been the results?

Pharmaceuticals forms one of the major portfolios handled by us and wherein our customised services encompass international freight forwarding, global trade operations, customs clearances, obtaining the required statutory compliances, and adhering to safety regulations for safe transit.

We have built customer-specific cold storages and temperature-controlled rooms in our own warehousing space including the FTWZ, exclusively offering warehousing and distribution services with world-class infrastructure that meets stringent safety regulations with humidity and temperature control options.

Our AFS is also an advantage for the pharmaceutical sector, for speedy clearance of essentials without any delay, with storage options available within the same premises.

At present, what portion of Kerry Indev Express is dedicated to the textile and apparel value chain? How has been the contribution of SMEs to the fashion logistics industry as compared to the high profile fashion giants?

Textile and Apparel sector is one of the most diverse portfolios that are handled under the roof of KerryIndev. We handle a huge volume of business, ranging from traditional textile clients like Gokaldas to global retailers such as H&M pan-India.

Our vast network of warehouses and distribution centres are availed to our customers, with packaging, cash-on-delivery features for e-commerce retail also being supported by us.

There is a vast network of Small and Medium Enterprises (SMEs) belonging to the unorganised sector, who are vendors to big fashion giants. However, their lack of awareness of global trends, limited marketing efforts and lack of capital funds inhibit their global and domestic development.

The modern sector of the Indian SMEs, which uses latest state-of-the-art technologies, has already developed a niche in establishing sound subcontracting arrangements among large enterprises in India.

With multinational companies deciding to shift production and supply chains into India, meaning that Kerry Indev can benefit from global contracts with big names. How do you believe MNCs penetrating the market can impact your client portfolio?

With the advantage of our strategic alliance with Kerry, we will be able to cater to the global requirements of MNCs where cross selling of our services, domestic and International as well as penetration of the overseas market as single point LSP for managing the entire supply chain for MNCs will be viable and a favoured solution.

From the first-mile connectivity to the last-mile, every point of operational requirement will be satisfied by our global team transforming our overseas presence strategically.

As we are already expanding our (3PL) warehousing capacity and exploring new warehousing designs, we will be able to cater to our customers’ demands better.

What is the rationale behind Kerry Logistics Network’s investment in India and what is the importance of the affiliate within the strategy of the group?

Kerry Logistics, a member of Kuok Group is Asia’s leading premier logistics provider with growing capabilities and ambition to establish global presence especially in the Indian subcontinent. Investing in Indev Logistics was as step forward to gain a foothold in the fastest growing economy in the world.

This is where the strategic partnership of Kerry and Indev Logistics at 50:50 stakes became the key game-changer in both our portfolios, becoming mutually conducive and beneficial as we share similar interests and goals.

Kerry’s expertise in supply chain management with its extensive global operations that encompass integrated logistics, international freight forwarding, express, seaport management and operations as well as insurance brokerage is benefitting to Indev in our goals to establish our global presence by capitalising on Kerry’s global operations, infrastructure and customers.

As part of expansion plans with Kerry’s experience, aided in the launch of Kerry Indev Express (KIE) in 2019 – for exclusive first and last-mile delivery capabilities to serve the growing e-commerce market including express courier services.

For expanding our chain of warehouses, 4PL presence and developing cold storage facilities as well as building an information technology backbone, Kerry’s affiliation and investment is playing a key role in achieving our goals of expanding our warehousing capacity to 5 million sq ft.

Indev has become a key member of Kerry logistics on the Global board with our own representation for the Asian markets, after rebranding as Kerry Indev Logistics.

Kerry Indev logistics is a growing leader in project shipments and break bulk via association with PCL Shipping and PACC Line which is a part of the Kuok Group of Companies.

What are the ground breaking initiatives, logistics management methods and technology the company has adopted?

As part of our expansion plan and with sharp focus on becoming a top notch leader in the warehousing segment, we offer top of-the-line advanced infrastructural facilities – CFS, ICDs, custom bonded warehouse, 3PL warehouse, Free Trade Warehousing Zone – constituting an aggregate of 3 million sq ft. Kerry Indev is listed as one of the largest occupiers in the Chennai Warehousing Market in the Sriperumbudur – Oragadam cluster according to the Warehouse 2020 research report. We are now driving to achieve our pan-India target of 5 million sq ft. ICD facilities are equipped with bonding/de-bonding warehouse for FCL & LCL EXIM handling and value-added services.

As part of our automations and digitalisation drive, Timelapse Informatics and Solutions- an IT start-up was initiated in 2018 playing an essential role in developing and upgrading our IT infrastructure across all platforms to make it customer-centric with evolving technology to better suit to changing customer needs; as well as service customers across the globe, especially in logistics management, SCM, accounting and finance.

We have established our own transportation fleet, NVOCC with self-owned containers, ably supported by international freight forwarding and customs brokerage services.

As envisioned, we instituted India’s first Air Freight Station– a monumental step for the entire industry as transporting the essential commodities directly from the AAICLAS facilities to the AFS with immediate customs clearance and availability to the importer, paved the way for hassle-free clearance. This proved strategically successful during the pandemic, when all essentials were moved directly to the AFS to ease port congestions, highly supported by AAICLAS, Indian customs and our customers. This was one of our own value innovation measures.

Kerry Indev Express (KIE) was envisioned to be a door-to-door express distribution service brand with strong IT groundwork. The arm is now catering to prominent customers such as Samsung, Lenovo, Eureka Forbes, NetMeds, NSDL, Amazon, as well as private banking companies.

Services are active across surface, air and ocean modes of transport, connecting from the first till the last-mile with same-day and next-day delivery through our Priority Package Express and E-com Business Express as well as value-added services such as warehousing solutions, and ‘Critical Solution Express’ that handle sensitive and critical courier and cargo.

Shipping agency/chartering was also started as part of our strategy, through PACC line with a dedicated professional team handling exclusive project imports, break bulks, etc.

How can companies be more prepared, ready to respond and able to recover from crisis? How can they best plan for future events like COVID-19?

Vectors for building a resilient and sustainable organisation must be developed through efficient crisis management strategies consisting of contingency plans supported with specific measures, established communication flow. Most importantly, we have to allocate the time to build the system, and constantly review.

The companies must ensure resilience and sustainability is not restricted to only the operational flow rather layered through customer portfolio management, vendor management, supply chain management and process flow SOPs. This system will follow the three essential steps: Plan à Signal Alert à Proactive Response

  • Plan– for low likelihood high consequence event
  • Read and listen to the signals
  • React to the crisis immediately with proximate action plan by:  
    • Evaluating the situation
    • Establishing a Critical Incident Management Team (on stand-by) and setup the process
    • Assembling the right people
    • Engaging in iterative, agile problem solving activities

Cash conservation was one of the significant factors that decided on the survival as well as the revival of the company. Going forward, the plan for long term cash conservation and reserves is a must whilst in short term, it is vital to keep watchover lines of credit with stringent measures and streamline the business activity to reduce unjustified expenses and avoid unnecessary investments.

Singular digital capabilities alone will not help survive but continuous transformation in this unpredictable VUCA(Volatility, Uncertainty, Complexity and Ambiguity) world will help us spring forward.

In the long term, robotics and automated systems for warehouse operations, IT platforms for transportation management and control tower operations, and artificial intelligence-powered technology platforms for SCM/vendor/customer management will allow logistics companies to anticipate supply chain risk and promote sustainability goals with enhanced operational efficiency.

Customised SOPs involving current action plan and future vigilant measures must be primed by all pro-active organisations, with adoptive solutions in-built to best prepare for true crisis events – large scale, highly uncertain circumstances like the COVID-19 pandemic and it’s myriad of follow-on consequences affecting the whole community.

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