Infosys held a customer roundtable earlier this year where they invited customers, partners, and industry analysts to talk about the issues facing supply chains today.
It was a really interesting event with some fascinating learnings, so I invited Infosys executives Ramesh J Chougule, and Srinivas Krishnamoorthy to come on the podcast to share what they heard.
We had a fascinating conversation discussing overcoming the pandemic's effects on inventory, risk management, and demand shifts amongst other topics. I learned loads. I hope you do too.
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One of the important learnings that we have had over the course of not only this roundtable but not our customer discussion is at the earlier they digitize their supply chain and start using some latest tools and platforms. It helps them better navigate through some of these crisis.Tom Raftery:
Good morning, good afternoon or good evening wherever you are in the world. This is the digital supply chain podcast, the number one podcast focusing on the digitization of supply chain. And I'm your host, global vice president of SAP. Tom Raftery. Hi, everyone. Welcome to the digital supply chain podcast. My name is Tom Raftery with SAP and with me on the show today I have my two special guests Srini and Ramesh, throny. And Ramesh, would you like to introduce yourselves?Ramesh J Chougule:
Sure. Thanks, Tom. Hi, this is Ramesh Chougule from Infosys. I am the leader for SAP digital and cloud service offerings from Infosys for North America. And Tom, very glad to be here. Talking on supply chain disruptions today.Tom Raftery:
Thank you, And Srini.Srinivas Krishnamoorthy:
Hi Tom Srini. Kay from Infosys. I lead the SAP digital supply chain practice, but specifically for the North America lead the IBP intelligent asset management practice as well as warehouse management practice. Also the old technology like APO, so I take care of the overall supply chain practice and also I'm part of the COE.Tom Raftery:
Okay, and for people who might not be aware of Infosys, can you tell us a few words about the organization? Sure, Tom.Ramesh J Chougule:
Yeah, Infosys is a very large technology firm technology services firm globally operating in 200, plus countries, 40 plus nationalities 275,000 people and 16 billion plus dollars of revenue. Typically, you operate per top 1500 clients. And we have various service lines on which we operate, because AP has been one very predominant and very large service line, passage impact, very large practice, more than $1.5 billion of revenue comes out of our SAP services. And our partnership with SAP has been very deep, and very long. In fact, last 20 plus years, we are partner together on developing multiple solutions, serving our market clients on SAP products, and made multiple implementations very successful together.Tom Raftery:
Fantastic. And this is the supply chain digital supply chain podcast. So what kind of things are you seeing happening in the supply chain at the moment?Ramesh J Chougule:
Oh, very interesting time. In fact, you know, Tom pandemic has disrupted the global supply chain, and every organization out there is impacted in certain way. As we hear shipments are held up at the port, labor capacity is insufficient for transportation, production lines are stretched, and warehouses are waiting for materials as well as vehicles. So probably very unprecedented kind of situation in the supply chain of these global organizations. And you know, at this time, multiple companies are trying out various strategies to solve this problem. Very importantly, I think, is a big topic within Infosys within Infosys customers. And we have been talking all across our customer base to how Infosys can come forward along with SAP solutions to solve this problem.Tom Raftery:
Okay. And you guys held a roundtable in January of this year with some of your customers. Is that right?Ramesh J Chougule:
Absolutely. It was on 28th of January.Tom Raftery:
And can you talk to me about some of the outcomes from the roundtable? Oh, sure.Ramesh J Chougule:
Absolutely. Let me first give you a brief about what roundtable was. So it was about addressing the supply chain disruptions with SAP solutions. Our focus was about what kind of issues are there in the supply chain because of today's disruption, and how we can actually bring SAP solutions to the foray to solve some of those issues. So we started with a case study from one of our candy companies, where we actually brought the balance between supply and demand in the supply chain by EDI reinventing their material location engine with SAP technology. Then we spoke up spoke about supply chain planning trains from very popular analyst firm. Then we had a panel discussion about pandemic disruptions and roll up SAP solutions where the panel members from Microsoft, from invent and from Tyson Foods came together. And they discussed in their own context, how this disruption is being addressed. And in the end, we had a very provocative presentation from SAP about the intelligent solutions for predictive and responsive supply chain as such. The outcome has been great. In fact, there are common themes were emerging on how companies are responding to these disruptions. There have been some innovations, companies applied on supply chain planning certain innovations on fulfillment innovations on material locations, some of the changes they made in the logistics and transportation as well as warehousing. So it was a great learning sh.Tom Raftery:
Okay. And Srini Do you want to tell us a little more detail about some of those sessions, maybe the, I think Ramesh mentioned a candy company, for example.Srinivas Krishnamoorthy:
So the candy company is a very popular company in the US, known for a lot of brands such as Girl Scout cookies, also Gabler and jelly beans. So this company was facing a lot of challenges even before pandemics. So they wanted to set up an allocation and ATP engine, specifically for their seasonal skills. And then for the non seasonal skills, the seasonal skills are defined as skills that you typically tend to produce for a season. So for example, it could be, you know, the tax giving season, or it could be the Easter season or a Valentine's season or a Christmas season. So you tend to produce a finite amount of skills, you want to make sure that after the season, you have least amount of residual inventory remaining. So to ensure that the inventory is are kind of positioned correctly in the network, you want to kind of also use your allocation engine correctly. So we set up the whole allocation engine, help them kind of optimize the whole distribution and customer allocation to ensure that the optimize on the case will rate and also kind of minimize on the restaurant inventory. So that was the overall purpose of the project. But, you know, it helped in the fact that the pandemic also kind of disrupted a lot of their supply chain, there are supply shocks and as well as demand shocks in the network. And due to that, you could see the bullwhip effect kind of run through the network. And we use the same concept even for the non seasonal skews, or the turn skews, which doesn't see, you know, which is kind of produce on a daily basis. So we use the same concept adjusted the whole allocation engine to kind of conform to their non seasonal business, and it worked out to be much fine. So that was a good outcome of, you know, that project and which is what, you know, we highlighted in the round table.Tom Raftery:
And are there any specific results you can speak to, you know, I don't know, turnaround time reduced or anything like that,Srinivas Krishnamoorthy:
at present, we are seeing great improvements in their planner productivity. So something that planners used to spend, you know, inordinate amount of time, kind of managing allocations on the Excel sheet are able to kind of dramatically kind of reduce the time, they're able to do it in the in the system itself. So from planner productivity, productivity perspective, they definitely kind of have seen a phi x kind of an improvement. But at this point of time, I cannot speak exactly to how much inventory you know got reduced, or how much the CFRs got improved. So that is something that the customer is still kind of, you know, collecting all the data and figuring out the outcome. So I'm pretty sure it will be positive.Tom Raftery:
Okay, very good. Very good. And you mentioned or at least Ramesh mentioned, as well, that there was an analyst at the event to deliver the an address, what kind of insights did they provide?Srinivas Krishnamoorthy:
Oh, the couple of insights that the form provided around supply chain. So one thing I mean, and going back to the earlier discussion, you know, in terms of the disruptions that you were talking about, so pandemic is one layer of disruption that happened, you know, it caused port conditions, and it caused so many other, you know, issues in terms of shortages around Labor specifically, there are many other issues, you know, side effects of that. I mean, this is the first time you could see a US administration talking about executive orders and supply chain as an example. So they opened up, for example, the the third shift in Los Angeles port to kind of process all the imports, because earlier, they used to have only two shifts. At the same time, they reduced the trucker age requirements from 21 to 18. So that they could get fresh new truckers because now you see, like 60 or 70,000 deficit of truckers, at least in the US, and you're seeing some of the supply chain disruptions happening almost on a daily basis. You can see some issues being caused in Canada right now with the protests going on for the truckers, again, kind of caused a lot of supply chain disruptions. Last year in Texas, we had a supply chain disruption due to the freeze, a unusual freeze that happens once in 10 years or 20 years, which caused you know, a lot of disruption particularly for the oil and gas industry where some of the pipes you know got completely clogged because of you know, a new cold temperatures which it was not designed to hold. And as a result, you had sudden shortage of plastic. And to add to that you had the power shortages also going on. So all these issues have been going on. And, you know, it becomes very important for the supply chains to become resilient. And this was kind of talked about by the analyst team as well, that now supply chain has to focus more on resiliency. And that includes visibility, intelligence and agility. Because earlier, it used to be more of an lean supply chain, where any non value added activity in the supply chain used to be removed. So it could be like excess inventory in the network, or any kind of padding or buffers in the network was all removed. And unfortunately, all these got tested out in the stress test that happened with the pandemic. And we could see that the focus suddenly shifted from being lean towards being resilient. And the other important thing that the research analyst firm mentioned to us was the supply chain risk management, and specific specific focus to the response execution. Particularly, I mean, this sounds pretty unrelated. But you could see that there were so many cyber attacks that happened, it brought down some of the food companies as well, like GBX foods, then Colonial Pipeline was the other one impacted, there are many unreported ones as well. And suddenly, you could see an awful it, you know, I don't know, if you have been following up, there was a cream cheese factory in the US that got disrupted, and you could see a shortage of cream cheeses across the board, again, due to cyber attacks. So again, risk management is what was highlighted upon the other aspect that the form mentioned to us was about the, you know, concept of the digital twin. So you want the technology to play a greater role. So the overall physical supply chain is minute into the digital world. And you want to see the concept of control tower, AI ml, and all these kind of capabilities are brought in in a consistent format and a consistent platform where you can not only use some native algorithms that were already available, but as well as New Age algorithms, particularly machine learning relevant algorithms, and, and bring it into force, wherever the number of variables kind of explodes to kind of manage them. So all these become a critical and of course, you know, we spoke about the recent supply chain, and how data and analytics is making this whole supply chain, you know, live and breathe as a living organism. So these were the highlights the research analysts brought to us and which were reinforced by some of our customer experiences as well.Tom Raftery:
Sure, sure, sure, sure. Just a bit of a left field question. I mean, I know that supply chains up until the pandemic were optimized to be lean. And then suddenly, they became very brittle when everything kind of fell apart. And now we're heading towards supply chains that are more resilient and more sustainable. That seems to be where we're headed. No. But what I mean, what about in like, five years time, if there hasn't been another pandemic? Do you think we'll start optimizing for Lean again? And will the pattern repeat itself in other 1015 years time?Srinivas Krishnamoorthy:
It's a very interesting question. And I had a very engaging discussion on this topic with some of my friends in the academic world. So there are two schools of thoughts, the first school of thought is that this this will be like a permanent learning for us that supply chains has to become resilient, there was another school of thought that people tend to go back to their old habits. So once we figured out that, okay, these shocks don't happen anymore, and we have good coverage around it, you will get back to leaning up the whole supply chain making it as thin as possible, you know, I feel personally that the answer is somewhere in between, you cannot have a full fledged lean supply chain or a full fledged agile supply chain, which will be very expensive to kind of maintain and manage. So, there has to be kind of a balance of the two fires out and you know, you have to constantly have this new function in your organization, which kind of constantly assesses the risk, the supply chain risk is very important, because now due to concentration of lot of vendors will become competent over a period of time in a specific area. For example, when you talk about high end chips, the only you know there are few companies that come into the mind TSM TSM is one and you know Samsung the other. So, you have everything concentrated at one place and you tend to see this concentration going on in different areas. But in areas where you know you have fairly distributed kind of sourcing going on, maybe you can think towards, you know, leaning towards the Lean end of the The Spectrum instead of the big island, but wherever it is not possible, you may still want to continue to kind of look at the Agile. So the answer is, unfortunately, it's a it's a kind of a consultant answer, which is like it depends. Leave it is somewhere in between is what I feel for yourself.Tom Raftery:
Okay. Okay, good. Good. And I mean, the the panel discussion, what kind of findings came out from that? Because that's a panel of different customers I'm thinking, so obviously, you'd have different perspectives from different industries, what what was the the highlights coming out of that.Srinivas Krishnamoorthy:
So we had representation from CPG, industry, high tech industry and manufacturing, it was a interesting set of, you know, views that came out of the discussion, but one common theme, or other two common themes in that discussion was that, you know, we have to go to back to basics planning, not sophisticated, the supply chain planning too much. And work towards SOP process a lot, because SOP is kind of an amalgamation of long range, as well as tactical kind of planning, you want to have that sales and operations planning two years out done correctly. And you have to have a SN OE process as well, which is the execution piece. So this was the common theme. And but he each of them mentioned about some shortage of some issues coming out, you know, something that used to happen before got amplified with the whole pandemic. So for example, the labor shortages, the poor conditions, meat making company mentioned about the trucker shortages, component shortages going on specifically for the high tech. And then you had situations where some of these companies faced a shift in the demand itself. So for example, one of the CPG companies that we spoke about the food CPG company, they saw saw a sudden shift of demand during the pandemic, from food service to retail as an example. So they used to constantly provide, you know, their products to the restaurants, but that industry constantly, they got completely disrupted with the pandemic, and you could see that people are changing their food habits, and they had to reposition the overall inventory very quickly. So these were some of the nuggets of information that came out with the panel discussion.Tom Raftery:
And you mentioned that there was a provocative SAP presentation at the round table, do you want to talk a little bit about that, and, you know, I'm sure people would be interested to hear provocative presentation was made by SAP.Ramesh J Chougule:
Absolutely. So that presentation actually highlighted about how SAP products are addressing these kinds of supply chain disruptions in multiple ways. The presentation actually came across as how SAP, bringing in agility, productivity, connectivity, and sustainability. And as you can see, as Srini has been talking, all of these four parameters are extremely important in the supply chain arena today, to actually prepare your organization against disruptions such as this. So SAP, its pitch about agility to synchronize planning and execution. Very, very important came out extremely well prepared productivity improvement by reinventing production and services through some of the SAP products around manufacturing and planning, again, very important connectivity page around redefining trading partner collaboration using business networks, which is a very, very hot product today, was again on the spot. And the sustainability, I don't even need to emphasize the importance of sustainability today, that how really, SAP will help operationalizing sustainability elements per an organization was again, very important. So all of this went through to the cycle of designing, planning, manufacturing, delivering and operating processes for an organization and how really, the SAP digital supply chain products are weaving all of these components together to help client organizations to build that resilience, which we have been talking about. Very interesting presentation.Tom Raftery:
Very good. Very good. Very good. Okay, we are coming towards the end of the podcast. Now, is there any question I have not asked that you wish I had? Or is there any aspect of this that you know, we haven't addressed that you think would be important for people to be aware of some, some learning maybe from the round table or some advice you'd have to customers or potential customers on how to make their supply chains more resilient or sustainable? For example,Ramesh J Chougule:
I think we covered most of it. Tom, I would say my final words that you know, supply chain is going to be the focus point for many organizations for years to come. I certainly mentioned In fact, our president of USA is talking about supply chain and the initiatives around it. So that just states the kind of importance it's gaining organizations are going to strengthen their processes and systems around supply chain, and Infosys and sa P will help immensely to sort of navigate their next journey into the supply chain arena. Sh. So we are here to help. And let's work together.Tom Raftery:
Fantastic. And Stephanie, for yourself.Srinivas Krishnamoorthy:
Yeah. And just to add to Ramesh, his comments, I mean, supply chain has become part of the media lexicon right now, I mean, any business show, depending on your political inclination, it could be CNBC or Fox Business doesn't matter. But both of them are talking about supply chain and every session, and then you could see that in every quarterly report of the top, top 25 supply chains, companies, they are talking more and more of supply chain doesn't mention our supply chain. In the investor reports, it's way more frequent than it used to be before. I mean, that itself tells that supply chain that used to be perceived as a backend function now is a completely like a front end function. It cannot hide behind the scenes. This pandemic has kind of helped it kind of amplify it's important. So one of the important learnings that we have had over the course of not only this roundtable, but a lot of customer discussion is at the earlier they digitize their supply chain and start using some latest tools and platforms. It helps them better navigate through some of these crisis.Tom Raftery:
Sure, sure. Sure. Sure. Supply chain is becoming a strategic differentiator now rather than a cost center as it was in the past.Srinivas Krishnamoorthy:
Absolutely. It's a core competency.Tom Raftery:
Fantastic. Okay, Sweeney Ramesh, that's been great. If people want to know more about yourselves, or about Infosys, or any of the topics we discussed on the podcast today, where would you have me direct themRamesh J Chougule:
shirt on, please go to infosys.com and search for ASAP and supply chain these two keywords, you will go to a specific web page which will tell you about our service offerings on supply chain as well as our service offerings and SAP. I think the best way to contact there is just put in your basic information and click Submit. Email will come to me and see me and we'll quickly get in touch with you.Tom Raftery:
Okay, superb. Gentlemen. That's been great. Thanks a million for coming on the podcast today.Ramesh J Chougule:
Thank you, Tom. It has been a pleasure talking to you and talk to you again very soon.Tom Raftery:
Thank you. Okay, we've come to the end of the show. Thanks, everyone for listening. If you'd like to know more about digital supply chains, head on over to sa p.com/digital supply chain or, or simply drop me an email to Tom email@example.com. If you'd like to show please don't forget to subscribe to it and your podcast application of choice to get new episodes as soon as they're published. Also, please don't forget to rate and review the podcast. It really does help new people to find the show. Thanks. catch you all next time.