In today’s technology-driven world, by standardising resource management processes, companies can improve visibility and control, which in turn can lead to significant benefits for their business. As companies manage a network of projects, they must be able to allocate the resources available in the most efficient way possible, always bearing in mind that they have to achieve the final goal- optimised service levels and enhanced customer satisfaction. Bhupendra Kumar, Head– Logistics, IOL Chemicals & Pharmaceuticals (IOLCP) informs Upamanyu Borah, about the tools and techniques they adopt for resource optimisation which are strictly linked to the systemic vision of their company so as to achieve desired results within a set time-frame.
Organisational background
Established in 1986, IOLCP is India’s leading generic pharmaceutical company and a major manufacturer in the speciality organic chemical space. The company has a wide presence across various therapeutic categories like pain management, anti-diabetic, anti-hypertensive, anti-convulsants, etc. Its products also cater to key industrial sectors- flexible packaging, paint and lamination, ink, pesticides, etc.
IOLCP’s success is built on the strong pillars of innovation, quality, and dedicated customer service. By incorporating these and other business strengths, the company has boosted its capabilities to maintain the leading edge in the industry and earn the loyalty of customers by responding to their diverse requirements.
IOLCP’s production capabilities are nurtured by pursuing and implementing high standards of excellence. The company’s operations are in compliance with US & EUFDA standards and follows good manufacturing practices at its manufacturing facilities.
Efficient teamwork and strong associations have guided IOLCP to new heights of success. The company has earned the admiration of industry stakeholders, and accolades for its environmental policies have come from the highest levels of authority. The company has been consistently acknowledged and conferred National Energy Conservation Award (Drug/Pharma/Chemical sector) multiple times by India’s Ministry of Power.
Best practices for optimising SCM
Building efficiency is the key mantra to benefit operations in the longer term. Right processes, practices and tools can help in achieving the goal of supply chain management.
Organisations should strongly focus on the below parameters in order to succeed:
- Setting up a team of experienced supply chain professionals to lead
- Structured staffing of experienced people with interpersonal skills
- Right technology to improve and streamline processes
- Total cost approach instead of the product price
- Healthy supplier collaboration
- Inventory optimisation
- Regular review and verification
- Implementing new process trainings
- Assessing and addressing social responsibilities
Task management techniques
As a part of a growing economy, resource optimisation has always been IOLCP’s key focus area and results are achieved by following:
- Focus on technology and database creation– guide to research, review and follow up
- Real-time tracking and control over processes for smooth operations and more visibility
- Value-based services provider collaboration
- Infrastructure and optimisation by restructuring the supply chain model
- Risk and security management
Project management and coordination
Proper planning and integrated approach to the supply chain ensures smooth coordination. The integration of the logistics model with a company’s financial and procurement system helps in resource optimisation, ensuring smooth coordination between suppliers, transporters, and other departments.
Efficient and technology-based data pool helps in assessing and evaluating every perspective. Regular staff training on operations and safety measures is key to ensuring smooth workflow. Transparency, record keeping, tracking, and considering safety as a priority are the other important components.
Creating value for customers
Needs and demands vary from sector to sector. Customising the supply chain network based on service requirement and profitability of customers ensures long-term sustainable relationships.
Alignment of demand and supply planning according to market trends analysis helps in real-time decision making and service optimisation.
Continuous satisfaction leads to value creation. Ensuring consistent forecasts derived from data insights and optimising resource allocation helps in fulfiling customer demands on time.
Overcoming challenges
The major issue we face is geographical location disadvantage. Being situated far from transportation hubs, we usually face challenges in the availability of on-time part-load options and special equipment like standard and specialty ISO containers. Therefore, we keep ourselves efficient with proper advance planning and multiple service provider resources as back up.
Besides, constant change in the market (demand and supply), political agendas, global sourcing, and unprecedented situations like COVID-19 cause major setbacks. We are always prepared with a risk management plan and long-term contracts with service providers. The integration of modes of transport to single-source helps us to better coordinate and plan.
Building systems efficiency
As part of building up supply chain efficiencies, we are exploring and developing an alternative multi-modal transport model for our bulk liquid movements from port to factory which needs to be eco-friendly, energy-efficient and sustainable. The current model for inbound bulk liquid products totally depends on surface transport as we are far away from the ports, while procurement is being done in bulk and break-bulk vessels.
In the same connection, while aggressively exploring the possibilities, we recently hired an entire train, loaded 90 ISO containers with liquid cargo at Mundra Port and transported them to Ludhiana in Punjab. A train carrying about 2000 MT can potentially replace about 100 tanker trucks plying on the road, helping clearing up congestion apart from increasing efficiency and reducing pollution.
This multimodal transport system will prove beneficial to the industries situated far away from seaports and inland logistics centers. The concept can definitely help many industries to secure supply of raw materials in time, with end-to-end cost-optimisation while mitigating seasonal constraints in road transportation.
Outsourcing logistics
This is an industry where manufacturers, importers and exporters, the port authorities- terminal operators, Customs, customs agents, CFSs, ICDs, LSPs and freight forwarders (ground, air and maritime), airlines, shipping lines, and finally end-users co-exist.
LSPs play an important role in moving supplies to/from our valuable customers/suppliers. Maintaining the quality of products during transit and delivering them safely to our customers/factories is purely in their hands. It is mandatory for service providers to follow the assigned SOPs while regular vendor evaluations play an important role in keeping service levels at par with the standards.
We have a mix of vendors including multinational and domestic and accordingly outsource our export-import requirements based on their strengths. We work on long-term contracts with both on major routes as well as on the basis of spot freight procurement.
LSPs as partners
Reduced turnaround time and improved process efficiency are key expectations from LSPs. As the global supply chain moves towards an integrated model, LSPs should focus on effective ownership of the work assigned to create value. They should leverage their people, technology, processes and knowledge to tap into complex warehousing and shipping solutions.
Infrastructural strength, cost efficiency, and service reliability are the factors we look for when choosing an LSP. Besides, tax due diligence, financial sustainability, customer due diligence, geographical and strategic fit are the other major parameters we evaluate while selecting any service provider.
Special commodities demand more planning and experienced handling. As a manufacturer of pharmaceutical and chemical goods, we expect our LSPs to be more efficient and build services based on transportation management systems and business intelligence.
Future innovation pathways
Automation and infrastructure strengthening is the main focus now. However, building brands through customer satisfaction is something that major industries in India still need to look into.
The past half-decade has been a time of turbulent change in the supply chain and logistics industry. There has been an increased demand for accuracy, timeliness, convenience, responsiveness, quality and reliability. The industry is eventually reshaping towards perfection.
The major differentiator in logistics is meeting customer expectations through technology deployment, transportation competitiveness, and human resource management. But lack of focus on them as a whole makes companies more vulnerable to situations like COVID-19. Companies should create a holistic approach to resilience and take all aspects of the business into consideration, from employees to external partners.