What measures is your organisation taking to ensure that your SCM strategy is in alignment with your overall business goals?
According to me supply chain management (SCM) needs to be efficient for any manufacturing organisation. It plays an important role in the success of manufacturing organisation. At Varroc, we have developed a robust Supply Chain strategy to streamline the supply chain process for sustainable improvement by removing all the foundation blocks.
We re-structured our Corporate SCM team into Category focus, and now each category head is majorly linked to one of our Business Units (based on spend). We further increased quality weightage from 60 percent to 75 percent in our new vendor ratings to align SCM with our business goals. Currently specific performance objectives of SCM are helping us in achieving both top-line and bottom line results.
For smoothness and efficiency we have made strategic tieups with our main suppliers, which have ensured us timely delivery of input materials to our plants in cost effective ways. Currently we have started system upgradation of our suppliers and the process of creating adequate outsourcing capacities to ensure best and first time right products for plants and customers. We are also giving special focus on first time right and on time component development. We are also implementing various IT initiatives through our ERP (SAP) across our plants for seamless and critical information sharing.
In nutshell we are working towards a lean, responsive and flexible supply chain which is in alignment with our overall business goals.
How will the implementation of GST impact the overall supply chain scenario in the country and how will your organisation leverage on this reform?
GST was a long awaited change for the automotive industry. In automotive industry, supply chain network design is dependent on indirect taxes. Implementation of GST with elimination of CST (Central Sales Tax) will reduce the necessity of having warehouses in each state and supply chain network design will become strong.
GST will simplify state border crossing and improve the transportation by reducing the delivery time. Due to complex tax regimes and poor infrastructure logistics is expensive in India and GST will eliminate multiple state taxes and encourage logistics companies to consolidate warehouses. GST's implementation will reduce overall logistics cost and idle time of trucks (30 percent total travel time) at various check posts for CST/Octroi to make supply chain network efficient and profitable.
Implementation of GST will provide a window of opportunity to Tier1-suppliers and logistics service providers to address the tax-driven incompetence in our supply chain. GST implementation will make larger impact on our supply chain re-engineering and redesigning and there will be alliance of supply and storage points followed by well-defined freight routes and investments in warehouses and stocking facilities.
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