Understanding AI and Demand Forecasting in Supply Chain
Summary
TLDRIn this episode of 'Decoding the Industrial Revolution,' host Arvin Serim engages in a deep dive with Rahul Ganguli, Chief Supply Chain Officer at Tricord International. They explore the challenges faced by small to midsize enterprises (SMEs) in the global economy, emphasizing the importance of supply chain management for SME survival and growth. Ganguli shares insights on leveraging technology like AI for cost modeling and TMS for visibility, while addressing risks and sustainability in supply chains. The conversation underscores the value of agility, innovation, and resilience for supply chain excellence.
Takeaways
- 🌐 Small to midsize firms make up 90% of companies globally and contribute to 70% of the world's GDP, yet 67% face challenges with survival and expansion, including profitability, funding, and access to technology.
- 🛠️ Rahul Ganguli, the chief supply chain officer at Tricord International, emphasizes the importance of process improvement and risk management in transforming challenges into opportunities in the business world.
- 📈 The integration of AI in cost modeling has become a valuable tool for startups, helping to develop accurate sector-specific cost benchmarks and improve gross margin and COGS management.
- 🚚 Advancements in Transportation Management Systems (TMS) enhance visibility in the supply chain, allowing for better planning and customer satisfaction through real-time tracking and monitoring.
- 🔮 Demand forecasting is being revolutionized by AI, moving towards more accurate predictions that can greatly benefit retail and other industries sensitive to market demands.
- 🌟 For small to midsize businesses, AI solutions can level the playing field by providing access to sophisticated analytics and modeling without the need for an in-house team of data scientists.
- 🔄 The importance of effective communication in supply chain management cannot be overstated, as it directly impacts inventory levels and the efficiency of the supply network.
- 🌳 Sustainability in supply chain operations is becoming increasingly important, with strategies such as nearshoring, 3D printing, and improving SME efficiency playing key roles.
- 🛡️ Risk management is a critical component of supply chain strategy, requiring companies to assess geopolitical, cost, and other risks, and develop mitigation strategies accordingly.
- 📊 ERP systems, when integrated with AI, can significantly improve supply chain efficiency by providing real-time adjustments to demand and supply, reducing waste and improving sustainability.
- 🚀 Entrepreneurs in the supply chain domain are encouraged to fail fast, validate市场需求, and ensure that any technology developed addresses a real-world problem, rather than the other way around.
Q & A
What percentage of companies globally are small to midsize firms, and how much of the global GDP do they drive?
-90% of companies around the world are small to midsize firms, and they drive 70% of the global GDP.
What issues do a majority of small to midsize companies face in terms of survival and expansion?
-About 67% of small to midsize companies face issues of survival and expansion, which include profitability, access to funding, access to technology, and the inability to scale operationally.
What is Rahul Ganguli's role at Tricord International and what is the company's focus?
-Rahul Ganguli is the chief supply chain officer at Tricord International. The company focuses on supporting small to midsize enterprises by leveraging best practices of supply chain management, aiming to bring global supply chain tools and abilities to their doorstep.
How did Rahul Ganguli's career journey in global supply chain and operations management begin?
-Rahul Ganguli's career began about 28 years ago when he moved to the United States as a young graduate student. His first foray into supply chain management came when he was selected to be one of the first cohorts of Six Sigma Black belts, working on a project to solve an inventory working capital issue.
What are the four key pieces of supply chain management that Rahul Ganguli mentioned?
-The four key pieces of supply chain management mentioned by Rahul Ganguli are plan, source, make, and deliver, utilizing the supply chain operations reference model.
How has artificial intelligence (AI) transformed supply chain management in recent years?
-AI has transformed supply chain management by helping in cost modeling, improving visibility in transportation management solutions (TMS), and enhancing demand forecasting. It also aids in creating more accurate and real-time benchmarks for cost criteria across different sectors.
What is the significance of ERP systems in supply chain management and how are they evolving?
-ERP systems are crucial in supply chain management as they help in planning and managing resources effectively. They are evolving by integrating AI capabilities, which allows for real-time adjustments and better connectivity with partner systems, ultimately improving sustainability and reducing waste.
What are some emerging technologies or trends that could revolutionize supply chain management in the near future?
-Emerging technologies that could revolutionize supply chain management include advanced ERP systems with AI integration, 3D printing, and nearshoring. These technologies and trends focus on improving efficiency, reducing waste, and enhancing communication and connectivity in the supply chain.
How can small to midsize businesses leverage AI solutions despite having limited resources?
-Small to midsize businesses can leverage AI solutions by utilizing platforms and tools developed by experts in the field, focusing on specific areas like demand forecasting, cost modeling, and transportation management. They can also adopt AI-enabled ERP systems to improve their operations without needing a large in-house technology team.
What advice does Rahul Ganguli have for young entrepreneurs looking to make an impact in the supply chain domain?
-Rahul Ganguli advises young entrepreneurs to fail fast, iterate quickly, and focus on solving real problems rather than inventing technology first. He also emphasizes the importance of understanding the cross-functional nature of supply chain management and the value of market validation.
Outlines
🌐 Global Impact of Small to Midsize Enterprises
This paragraph highlights the significant role small to midsize enterprises play in the global economy, contributing to 70% of the world's GDP. It emphasizes the challenges these businesses face, such as profitability, access to funding, technology, and operational scaling. The introduction of the podcast 'Decoding the Industrial Revolution' is made, with the host Arvin Serim welcoming the audience and introducing the guest, Rahul Ganguli, a seasoned professional in global supply chain and operations management.
📈 Career Evolution in Supply Chain Management
Rahul Ganguli shares his career journey, starting as a graduate student in industrial engineering and evolving through various roles in manufacturing, Six Sigma, and supply chain management. His accidental entry into supply chain through a project at Case New Holland led to a deep interest in the field. The paragraph also touches on his work in designing supply networks, implementing ERP systems, and engaging with AI in supply chain operations.
💡 Tricord International: Supporting SMEs with Supply Chain Best Practices
The focus shifts to Tricord International, a startup aimed at supporting small to midsize enterprises by leveraging supply chain best practices. Rahul discusses the company's mission to bring global supply chain tools to businesses that may not have the resources to access them. The discussion highlights the importance of addressing survival and growth issues in SMEs, such as profitability, access to technology, and operational scaling.
🔍 Engaging with SMEs: Typical Challenges and Solutions
Rahul elaborates on the types of engagements he has with SMEs, which can range from reducing cost of goods to managing sensitivity to commodity pricing. He discusses strategies such as global sourcing, supply agreement structuring, and redefining logistics networks. The paragraph also touches on the use of AI in cost modeling and the importance of risk-adjusted best cost rather than the lowest cost.
🚀 Technology's Role in Transforming Supply Chain Management
The conversation delves into how technology, particularly AI, has transformed supply chain management. Rahul mentions the use of AI in cost modeling, transportation management solutions (TMS), and demand forecasting. He also discusses the importance of visibility in supply chains and the potential for AI to democratize access to sophisticated analytics and modeling, benefiting smaller businesses.
🌐 Geopolitical and Climate Risks in Global Supply Chains
Rahul addresses the risks facing global supply chains, focusing on geopolitical and climate risks. He discusses the challenges of decoupling from major trade partners like China and the importance of developing strategies to mitigate these risks. The paragraph also touches on the impact of climate change, such as water levels in the Panama Canal, and the need for businesses to be prepared for such disruptions.
📊 Risk Management Strategies in Supply Chain
The discussion turns to risk management, with Rahul sharing his experience in the pharmaceutical industry and the importance of viewing every business KPI through a risk lens. He emphasizes the need to define risk appetite and develop strategies accordingly. The paragraph also introduces the concept of failure modes and effects analysis (FMEA) as a tool for managing risks in supply chains.
🌿 Sustainability in Supply Chain Operations
Rahul discusses the importance of sustainability in supply chain operations, highlighting the tradeoffs between global supply chains and environmental impact. He mentions the rise of nearshoring, 3D printing, and the efficiency of SMEs as key factors in promoting sustainability. The paragraph emphasizes the need for businesses to adopt practices that reduce waste and energy consumption.
📚 Best Practices for Managing Inventory and Emerging Technologies
The final paragraph covers best practices for managing inventory, emphasizing the importance of supply network design and communication with supply partners. Rahul also discusses emerging technologies that could revolutionize supply chain management, such as advanced ERP systems with AI capabilities, autonomous driving, electric trucks, and robotics in warehouse management.
🚀 Encouraging Innovation and Resilience in Supply Chain Entrepreneurs
In conclusion, Rahul offers advice to young entrepreneurs in the supply chain domain, encouraging them to fail fast, validate market needs before developing technology, and focus on cross-functional approaches. The paragraph wraps up the podcast with a reflection on the importance of agility, innovation, and resilience in the dynamic world of industry.
Mindmap
Keywords
💡Supply Chain Management
💡Global GDP
💡Operational Excellence
💡Six Sigma
💡ERP Systems
💡Risk Management
💡Sustainability
💡Innovation
💡Agility
💡Resilience
💡Nearshoring
Highlights
90% of companies globally are small to midsize firms, contributing to 70% of the world's GDP.
67% of small to midsize companies face survival and expansion challenges, including profitability and access to funding and technology.
Rahul Ganguli, Chief Supply Chain Officer at Tricord International, discusses his journey in global supply chain and operations management.
Supply chain management is a synthesis of multiple disciplines, including engineering, business, economics, and finance.
Tricord International supports small to midsize enterprises by leveraging best practices in supply chain management to access global supply chains.
Engagements with businesses often involve cost reduction, supply agreement structuring, and logistics network redefinition.
Artificial intelligence is transforming cost modeling and enhancing visibility in supply chain management.
Technology like Transportation Management Systems (TMS) is key for improving delivery transparency and efficiency.
Demand forecasting is evolving with AI, moving towards more accurate predictions in the next 10 to 15 years.
AI solutions make advanced analytics more accessible to small and midsize businesses without the need for large data science teams.
Staying ahead in supply chain management involves continuous learning and adaptation to new technologies.
Risk management in supply chain is about identifying, strategizing, and executing upon risks to mitigate potential disruptions.
Sustainability in supply chain operations is enhanced by nearshoring, technological advancements like 3D printing, and efficiency improvements.
Effective inventory management relies on robust supply network design, strong communication with supply partners, and efficient demand planning.
ERP systems with integrated AI capabilities are becoming essential for real-time supply chain optimization and sustainability.
Entrepreneurs in the supply chain domain should focus on solving real problems with technology rather than inventing technology first.
Supply chain is an interdisciplinary field offering vast opportunities for those who love a cross-functional approach.
Adaptability, innovation, and resilience are key principles for success in the dynamic world of industry.
Transcripts
90% of companies around the world are
small to midsize firms and 70% of the
global GDP is driven by uh these small
to midsized Enterprises and what we find
is about
67% of the total population of the small
to midsize companies face issues of
survival and expansion when I talk about
survival I'm talking in terms of profit
ability access to funding access to
technology and when I talk about um I
also talk about growth because it is
their inability to scale operationally
that you know prevents de Pro hello
everyone welcome to another episode of
decoding the Industrial Revolution where
we dive into the minds of The
Visionaries transforming the landscape
of industry and Innovation I'm Arvin
serim and today we have a special guest
who brings over two decades of expertise
in global supply chain and operations
management he's a master at process
Improvement and risk management turning
challenges into opportunities for some
of the biggest names and rising stars in
the business World he's the chief supply
chain officer at tricord International
and an executive member of international
leap Network without further Ado please
join me in welcoming the remarkable
Rahul ganguli welcome to the podcast
Rahul and thank you for joining us today
thank you for having me Arvin it's a
pleasure wonderful yes um this is super
exciting we've had a lot of
conversations already even before doing
this podcast and I'm super excited to be
um you know sharing some really
inspiring stories and some insights with
our audience I think um there's going to
be a lot of Buzz around this podcast so
super excited let's start with um
understanding your career Journey with
us and what inspired you to pursue a
career in global supply chain and
operations management and what are some
of the key Milestones along the way to
explain my career Journey let's go back
about 28 years ago and this started we
uh with me crossing the shores of India
to come to the United States as a very
young graduate student in the midwest uh
for a master's degree in industrial
engineering at that point in time I had
no clue of what Supply Chain management
is or was because there was no formal
topic called Supply Chain management
which in today's day and age is actually
taught around colleges as a formal you
know a formal degree after I graduated I
joined a a company called case New
Holland which is part of the Fiat group
in their manufacturing leadership
program and I was rotated through
multiple functions uh production
supervision product engineering Etc
however my first foray into Supply Chain
management
game came in the picture when I was
selected to be one of the first cohorts
of Six Sigma Black belts which was a
very very New Concept uh in terms of
product and process Improvement uh that
was taking the industrial World by storm
and one of my first projects I
distinctly remember was to solve an
inventory working capital issue
associated with uh certain components so
that was a little bit of an informal
entry into the world of supply chain and
the world of supply chain actually
intrigued me started to Intrigue me at
that point today because I thought it
was a wildly collaborative and a cross
functional topic where you need not have
a a master in any single topic but it is
a synthesis of multiple disciplines
which was in engineering business
economics Finance so on and so forth and
that really interested me a lot and from
that point on my career began to evolve
not directly into supply chain but
functions supporting supply chain from
there I went into recreational Marine
building Yachts where I served in their
operational excellence team trying to
improve processes not only internal to
the company but also Alo in the supply
base so as you can see uh my Evolution
was beginning so I say my foray into
supply chain was more accidental than it
was a wellth thought out career journey
and then from that point on I went on to
multiple different Industries uh
starting with uh wind turbin to medical
devices to Pharma now all of these post
recreational Marine were very very
focused on supply chain and when I talk
about supply chain I talk about the four
key pieces that folks may know know of
which is plan Source make and deliver
utilizing the supply chain operations
reference model and I had the privilege
then uh to not only design Supply
networks establish the technology site
such as Erp
implementations as well as in the recent
uh recent Years also we have been in
working with organizations to help us
the with the AI movement that has come
into the picture so this is me in a
nutshell in terms of my journey through
the world of supply chain please feel
free to ask away if you have any
questions or any clarifying questions no
that's fantastic quite a journey and I
think there are a lot of similarities as
we've talked about in um my journey as
well I you know that's how I came to the
United States to get my masters that was
20 years ago and I think um you you were
in Midwest and you know I came here
where
telecommunication is is key in Dallas
for Worth area and started working with
Fujitsu and then um you know got my MBA
from UT Austin and that's when I started
a company building Mobile Solutions but
eventually transformed that into
full-blown digital transformation
initiatives across the board for various
Industries and of course that's how I
ended up there so uh it's it's a
fascinating story and looks like um you
know you're saying that it was by chance
but I'm I'm sure there were seeds
planted along the way and it was uh just
meant to be so tell us more about your
current role at Tri cord International
and also about the company what sets it
apart in terms of your approach to
supply chain and operations management
so Trier International is a startup and
the core idea behind the startup is I'll
start off with some facts
90% of companies around the world are
small to midsize funds and 70% of the
global GDP is driven by uh these small
to midsized Enterprises and what we find
is about
67% of the total population of the small
to midsize companies face issues of
survival and expansion when I talk about
survival and talking in terms of
profitability access to funding access
to technology and when I talk about um I
also talk about growth because it is
their inability to scale operationally
that you know prevents their growth so
frod
International was an idea which was
developed to support these small to
midsized
Enterprises Leverage
the best practices of Supply Chain
management where you could bring the
world closer to the's door step so that
they now have the tools and the ability
to enjoy the fruits of a global supply
chain which large companies like the one
that I had been part of seamons M casley
Holland the Fiat group have always had
this at part of their footprint so this
is what sets us apart so you have
companies uh if you take a look at the
big 10 consulting firms starting from
mckin to deoy to everybody all have
phenomenal Supply Chain Solutions that
they bring to bear but they work they're
clientele basis people that already have
the the tools and the resources
necessary us we are trying to get it to
the doorsteps of the folks that
necessarily A do not have that awareness
B they do not know how both in terms of
Technology Pro process and capability so
that's that's who we are and that's what
we are trying to do love it that's
fantastic that you chose this um Market
segment because of course for any
economy small medium businesses are so
so important in fact small businesses
specifically the number of companies uh
that are around that are small
businesses um is is exorbitant and I
think partly because of the reasons that
you described we also Target small
mediumsized compan companies where um
you know they may not have the resources
to have a full-blown team um internally
so they would leverage a partner a
technology partner and utilize our help
and our expertise to build those
solutions that are world class and a lot
of times um you know just only for the
longest time the large companies could
dream of having but we're able to give
them those um Solutions those platforms
those custom applications that they can
then utilize and I I've seen that the
learning is is next level when we work
with them as well so in your experience
what have you like what are majority of
your engagements like what do you what
are the types of areas that you help
these small medium siiz businesses with
like what would be a typical engagement
for you so first of all let's talk about
uh let let's talk about the the size of
the company right and when I talk about
a small to
midsize Enterprise you know as defined
by the world economic Forum it is
anywhere from uh half a million dollars
to you know 45 million is your typical
small to midsize uh firm but we extend
that definition to include about half a
billion dollars as well you know up to
up to that uh up to that level so our
engagements uh can fall into many
different areas for instance it could be
uh helping a company reduce their cost
of goods and as we all know in a typical
Manufacturing Company especially when
you're manufacturing a product about
roughly 70% of your cogs is associated
with the material side of it and about
30% is labor so this is one very typical
area what we try to do is to kind of
find the levers associated with Supply
Chain management to help lower the cost
of that uh of the material cost and the
way we do that is either through Global
sourcing finding partners for these
companies across the world which could
be in Vietnam India is very much for
Rising manufacturing power it could be
India it could be turkey whatever makes
the best sense for this company in terms
of what we call is risk adjusted best
cost so not necessarily the lowest cost
but the risk adjusted best cost for that
that's one the other one could be
helping these companies with uh managing
their uh uh managing their sensitivity
to changing commodity pricing by
structuring their uh Supply agreements
as such the other way could be also
helping them redefine their supply net
uh their their Logistics networks where
does it make sense to create a hub how
do you consolidate loads who should you
be developing a relationship with even
if it's a multi-billion organization
such as CH Robinson and so on and so
forth um if they need access to
Innovation so for instance if you have a
company that requires certain innovation
in their electronic manufacturing but
they don't have access to Nvidia then
are there alternate players such as in
Taiwan or in Vietnam or even in India to
help open that access channel for them
so these are our typical engagement
and depending on the complexity it takes
anywhere from you know it can be
anywhere from 3 months to 12 months now
we also have engagements with larger
organizations uh you know very recently
we finished an engagement with a half a
billion dollar organization where it had
nothing to do with the cost side it had
to do with opening up their supply
channels because they were so badly
impacted by the availability of solid
state devices coming out of covid-19
that they were completely hamstrung in
terms of the ability to ship the
products on time to their customers so
which was at a risk of almost destroying
the product in the marketplace so these
are the kind of engagements that we work
with so got it that gives me a good idea
on what are the kinds of problems you're
helping your customers with uh what
about utilizing technology um Can can
you tell me about how has technology
transformed Supply Chain management in
the recent years and if you can provide
some examples of technological
innovations that have given um you know
that edge or have significantly impacted
your work so first of all uh because
artificial intelligence is on
everybody's mind right I mean everybody
everything everyone talks about AI now
for a startup company we have to
bootstrap right so uh we don't have we
want to spend our resources very very
expeditiously as a supposed to larger
companies that have very much Deep
Pockets right so one area that we have
found is when we are doing cost modeling
artificial intelligence has come in
really handy in terms of helping us
develop cost models and I would say by
sectors so for instance when we because
we deal with the world of gross margin
and cogs quite a bit for instance uh
when I am looking at a life sciences
product versus an industrial product the
cost structure is very very different
and so the data pooling we get out of AI
helps us get very close to the Benchmark
cost criteria associated with these
sectors that's one the second area of
technology that we see is and and really
um we see evolving and we help our
clients with is in terms of uh the
visibility side as it pertains to
delivery which is the transportation
Management Solutions TMS so TMS is very
very key because once you get into the
last mile or once even if it's Shi out
of your suppliers what you call doors
you have serious de uh you have a lot of
visibility in where that given Viet that
part or the subsystem is which allows
your customers to have good visibility
in terms of not only what is coming but
they can plan their production around it
much much easier it's also the number
one Trend it's also the number one Trend
like transparency I know there are so
many companies that are working on this
initiative on how to have that next
level transparency and you know create
um a a a platform where they can see
exactly where the product is you know
when it was shipped and even we work for
an organization uh that TR site they are
the largest in the United States and do
um real um Freight um you know type
stuff and they have temperature
controlled um you know Goods that they
have to supply so that's why they help
their customers know the exact
temperature within that carriage and of
course they help with the GPS monitoring
so you know exactly where the uh Supply
is and of course you know you talked
about AI
that's I mean extremely critical and I I
understand you know cost modeling could
be uh an important thing for your
customers and that's where you're
utilizing AI I'm I'm very fascinated to
hear that um you know we've only done uh
a handful of use cases of course the
most popular one is in demand
forecasting so you are absolutely right
I was going to add to that that and it's
it's very interesting you bring that up
because demand for casting especially
when you start talking about independent
demand not necessarily the dependent
side but the independent demand where uh
you know you're selling retail and in
the past even know up until like five
six years ago you would take the past
demands build some amount of build some
amount of you know uh cycle factors into
it and develop a regressive model but
now with the Advent of of uh competi
capability afforded by eii I think that
area is going to continue to really
develop not to the extent it becomes a
crystal ball but it'll be close to a
crystal ball in the next 10 to 15 years
that that's my absolute guess absolutely
no I think it's uh going to be like that
but what about some of the smaller
organizations like that have maybe only
a dozen trucks and if they cannot afford
to have you know a five people
technology team to create that model um
I mean how are those people the small
mediumsized businesses going to take
advantage of these AI Solutions but that
is that is exactly what AI affords you
is you don't you don't have I mean as
the word suggest AI right so I think it
is the adoption of the technology and I
can see AI becoming more and more
powerful as a as a word suggests I mean
you could make an analyst I mean you
could have Avatar like me becoming an
analyst I mean and in in fact I can see
AI helping small to midsize businesses
more than hurting them you know I mean
we talk about it because you're you're
making the calculations the modeling
much more accessible without the need
for phds to come and do this modeling
for you I agree with you that it's not
statistics and it's AI so you don't need
those modelers to come in and do the
forecasting and pretend like they have a
crystal ball but what about an
organization that doesn't understand the
capabilities of AI an organization
that's so small they can't afford to
even have some data science Engineers
right I mean they're they're not cheap
so and and I guess the it's a little bit
of a rhetorical question of course you
know they can contact you yeah and you
know leverage that type of um expertise
of course you know if they want to build
something custom they can contact us you
know we've built tons of platforms like
that where we can use different
parameters and try to model that and and
but what I'm even talking like I think
in the coming years even a pizzeria a
oneman shop can then predict that this
is the kind of pizza demand I'm going to
have on such and such day you know on
Super Bowl on sport to July on you know
such and such day if it's a Tuesday if
it's a Wednesday and then that's what we
were able to do as well for one of our
customers we created a platform and fed
the weather data um into it so they
could predict the number of calls they
were getting for air conditioning
repairs and they're a nationwide company
and I mean you will be astounded with
the accuracy that it it presents so the
pace of innovation is like amazing and
especially in manufacturing and
Logistics but how do you stay ahead of
the curve I think that's the question
that I want to get to so
the that that that's really the AI level
question right how do you stay ahead of
the curve to some extent you have to
keep yourself the rest of the technology
that is out there so there are no two
ways that you have to be a student of
the subject so to continue to study keep
yourself uh plugged in with various
conference
uh various networking forums and working
with futurists such as yourself as well
I these are all all networking right you
learn from each other it's your openness
to learning and it is your ability to
learn and then look at a situation and
connect the two dots that mean that's
the simplest answer I can provide
there's a Magic Bullet you know as as
such I think it's a great answer I think
it is your mindset to try new things I
mean we have so many different tools
that our marketing department our sales
department uses across the board for
different geographies but they're still
asking and getting new tools and they're
like Marvin um you know there's a new
tool that's come it's called you know
mail blusters like okay well we already
have seamless we already have zoom info
we already have this but no this is a
brand new tool so being open to trying
new products in the market running those
small experiments and learning from it
and understanding that every few months
there's going to be this breakthrough
that's going to happen and there's going
to be new tools that if you're not
leveraging your competitors are and
they're going to have that Competitive
Edge so you know you want to always be
looking to um find ways to increase
Revenue decrease cost of course create
that better experience for your end user
um but what about the risk management
strategies and what are the key risks
facing the global supply chain today and
how can companies effectively mitigate
some those risks uh it's a great
question uh risk is a uh let me uh let
me first give credit to a company that
really taught me risk and which was my
background in Pharmaceuticals uh working
with Merc pharmaceutical companies by
their very nature are extremely risk
ofous and extremely conservative now
when we think about risk or when we
always think about risk in terms of A
disruption of Supply that that's
typically what Supply as supply chain
practitioners or even manufacturing
practitioners we think but that was the
first company which takes every business
kpi pro looks at every business K from
the lens of a risk is it a cost risk is
it a compliance risk is it a delivery
risk is it a capacity risk so that is
where I learn and then you formulate
your strategy based on
one how much is the risk and what is
your risk appetite so you have to
develop those bands how much you know
how much can that rubber band basically
stretch before you break is how they
Define the risk appetite and then from
that point that you try to tighten it
depending on how much you want to
tighten it so some of the key risks for
for example in today's DNA that I'm
talking a little bit holistically I'm
looking at number one we look at uh
geopolitical risk and the big
geopolitical risk today is associated
with the Far East we all know without
mentioning uh to give you a context
United States Imports about half a
trillion dollars from the People's
Republic of China and there is a huge
Sho and cry in the United States oh my
God we have to decouple you cannot you
cannot just decouple half a trillion
dollars worth of trade in two days but
to some extent then what you can do is
determine what is most critical for your
National infrastructure what is very
critical for your security
infrastructure and then decouple those
in fact even though I am not a proponent
of decoupling I hate it because I think
create B makes Nations come closer as
opposed to when you decouple but looking
at that then you take a look at okay the
the the small uh the the smaller less
riskier to the geopolitical risk and
then you develop your strategy is your
strategy now to go to a third country
such as India or to go to Vietnam or to
go to Taiwan so how you take that risk
and how you determine your capital
investment strategies is one way to
blunt that geopolitical risk then in
terms of cost risk which I think has
been practiced for a very long time is
how well have you established your
supply agreement are your contracts sure
they can blunt that risk you know these
are not really uh rocket size it's a
displine of identifying and putting the
strategy and then executing upon them is
how you're able to manage a risk risk is
always going to be there absolutely
moment you think about a for-profit
model means risk absolutely the moment
you step out of the house means it's
risk absolutely no I like the idea of
decoupling of course you got to have
Alternatives right you can't put all of
your eggs in one basket um of course
when you do that and if you're going to
have an alternative um manufacturer
let's say now not in China but now in
India or Taiwan or um you know Vietnam
then there's going to be some costs and
of course there's going to be that
overhead of you know managing two or
three different manufacturing plants or
suppliers and but but that offsets the
risk So Def what's your tradeoff right
which ones are your trade tring up right
I mean it's it's like you're saving some
but you're doing something else I mean
what is more important to your business
at that point in time is going to help
you uh Define that trade all true and
act on it um and I think in different
parts like in Middle East too now like
the SE canal and um you know then the
attacking of those ships in those routes
by HTI rebal I mean sometimes it feels
like the world is on fire and you know
I'm a content creator as well and I
sometimes create content around that and
it's um it's it's crazy it's it's so
hard to predict but I guess what you're
saying is that's why you create those
bands and and um you know develop your
strategy you know I'll give you you you
mentioned now Jam say something very
similar by the way you know hey don't
think that recession is not gonna happen
it is gonna happen of course it's gonna
happen and and how well planned you are
how how how well you could look at you
know and cover for all those possible
scenarios it's good however for a
startup I mean you want to be
risk-seeking and you know me personally
as well like I I am very risk-seeking
I'm I'm I'm you know at times um you
know inviting New Opportunities and I
know that something might not work out
but I'm still wanting to learn from it
and I think learning from that is
extremely important as well sorry I
didn't interject you were saying no so
two two key points yeah two key points
you made and I'll come to this latter
point you just made too you mentioned
the SS Canal SS Canal is a function of a
geopolitical risk but you also forget
climate risk so exactly the same thing
the situation happened in the Panama
Panama Canal where the water level got
so down that you were barely able to get
your ships across it's you know the
world is indeed on fire right so now you
have to think now you have to think now
the second and I talk about risk taking
that we are as entrepreneurs it is also
uh the severity of failing right a large
corporation when they take a risk and
they fail the impact is is is you know
of Epic Proportion but whereas in a
smaller initiatives you fail it's not as
impactful yeah you get a little bit hurt
you get up and you run right so I always
use word so we are much more nimbler so
you know so it's a function of how big
you are I mean it's too big to fail
right kind of thing absolutely because
you know first of all um like most
things most like there's there's this
example in this book like write down
what's the worst that can happen and
make a list of all the you know terrible
things that can happen this is from
four-hour work read by Tim Ferris you
know one of the very first books that I
read um and and and then he says and
then look at that list and say none of
that is going to really happen like what
is the probability of that happening I
mean that's one because of course if if
it's it's it's because of the scale and
that's why the startups can take you
know so much risk because what doesn't
kill you makes you stronger I mean but I
think uh it's it's so true there's a
very good tool actually mention the book
that you and I have been both exposed to
and probably we have utilized it
significantly for risk management I go
back to a very simple tool called
failure modes and effects analysis right
so we have both been coached and we have
FMEA I mean you talk about each one that
cost quality delivery compliance you
write them down and say all the things
that can what do you call uh all the
risks associated with this and then you
determine based on your risk score which
ones you want to go after some of the
risks you don't even need to go after
because you have enough appetite to
absorb it basically absolutely
absolutely no and that's a good
discussion on risk so from risk to
sustainability now I guess how important
is sustainability in today's supply
chain operations and what steps can
company ensure uh can take to ensure um
their supply chains are both efficient
but also environmentally responsible
yeah and you know it's actually a good
question right um by definition by
definition when you the more Global your
supply chains are the less sustainable
it is because you are going to be
polluting
the enine I mean you know again it's
it's a it's a tradeoff right however I
think I think as we look to the Future
there are few things that are already
happening I think there is a healthy
amount of near Shoring happening which
is not completely decoupling a supply
chain so I think near Shoring is not
only a good idea to hedge your risk
against geopolitics but it's also a good
idea to help support the sustainability
initiatives I think that's one uh the uh
the the second key area there is a rise
of manufacturing technology and it's
going to become more and more mainstream
which is 3D printing 3D printing was
quite Limited in terms of the type of
materials it could handle and the speed
with which you could produce I think
this is also point to it has developed
quite a bit now you have people you have
companies that are are 3D printing whole
houses so I think this is going to blunt
the effect of sustainability and also
from a sustainability perspective it's a
near zero waste process so you know so
you're not throwing energy of anytime
you produce you're actually using energy
right what percentage of that energy
you're throwing away is your scrap
Factor basically right so I think this
is a key area uh of of sustainability
and then the last but not the the least
at least in my mind is the very fact if
you help these small to midsize
businesses get more efficient it makes
it more makes it more sustainable too
right because because they don't have to
utilize inefficient methods to develop
the product now you they are develop
utilizing more efficient methods to
produce uh so these all kind of weigh
into sustainability this is how you know
I think about it I think it's super
comprehensive and especially in the
supply chain operations I think um I
didn't put that two and two together
until you mentioned it that yes I think
near Shoring or um having alternative
facilities or you know the 3D printing
that cuts huge costs of
Transportation um so I think um so
that's why it's extremely important and
then tying it with the small mediumsized
businesses and making them efficient I
think is also uh very very cool um what
about um some of the best practices in
managing inventory effectively uh you
know especially in this rapidly changing
business environment what tips do you
have for that uh I think I always go
back to how well you design your supply
network with that number one and and
when I talk about a supply network what
I'm not saying is that everything should
be near short because just by the
mathematical definition the shter the
lead time the lower the inventory you're
having a pipeline that's not what I
mentioned what I meant what I really
mean is how well how much time have you
spent in picking the right partner for
your business because the more robust
your partner is the more efficient their
processes are the less your inventory
burden right number one the second key
aspect is communication between you and
your partners which is your supply
Partners the more you communicate I
think the less is the inventory uh less
of the amount of inventory you have to
come you have to carry in your pipeline
and when I talk about communication more
specifically it is your demand planning
the greater you communicate your demand
plan or the change to your demand plan
the
more and almost in real time the more
your partners are able to vary their
supply according to your demand
and if we this is the best practice
really I've seen what sets the good from
the bad is is the communication and a
formal channel of of of communicating
and the process used to manage the
inventory is what really makes it so
that's that's really really very key
lovely and utilizing technology for that
is going to make it uh super efficient
so yeah um I guess then moving to
technology from your perspective what
are some emerging Technologies or trends
that have the potential to really
revolutionize Supply Chain management in
the near future so we already I think
touched base on it a little bit uh early
on during our conversation I mean if you
take a look at any good Erp system today
right uh I mean sap saps Hannah
everything has a very good Advanced
planning tool if utilized effectively
and each of these modules are also now
bringing to bear with them the the AI
capabilities as well which are able to
flex the the parameters in real time I
think we have to see more and more of
this and again this also kind of impacts
your sustainability right the the seven
wayte the the the more you're able to
communicate the more you are able to be
closer to the market requirements the
less you produce and the less is the
amount of waste so I think this is a
very Rising so the more connected you
are with the the the partners
systems the connectivity of the partner
system how well they talk with each
other and also from a governance
standpoint how closely connected you are
is what's going to determine so in my
mind it's your Erp it's your erps how
well they communicate talk to each other
so it's very interesting that you say
that because um of course I think I
understand the importance of Erp but
that's just so essential but I think
that's why maybe um some people may not
give as much importance to continuously
integrating that with AI and I think
that's that makes sense um you know I
was also expecting to um you know at
times when I'm talking to uh smart
people like yourself in in this field
I'm expecting to hear about autonomous
driving or you know uh like electric
trucks and I think um you know some of
those Technologies or Robotics and you
know managing the warehouses and um or
the route planning you know that can
happen as well I think some of that is
is also what comes to mind but I think
your your um take on that is you know
get get focus on the Erp you know focus
on the get the basics right right so
really the single biggest thing the
single biggest draw I mean the weight on
your supply chain is the amount of
inventory you carry in your supply chain
and the more efficient you are in terms
of projecting and meeting that
projection as closely you're narrowing
that band really helps a company with
its uh working capital requirements
towards the end what you're making is
you're making the warehousing process
more efficient so agbs Etc yes they have
but I think the larger Capital uh you're
tying up lot more capital in your
inventory uh pipeline inventory than on
the warehousing side of it you know
that's already happened basically so so
understood understood well great uh
fantastic Rahul and so what advice would
you offer to the young entrepreneurs to
people who are trying to have an impact
in the supply chain domain um or you
know even companies that are uh looking
at all of these disruptive Technologies
in this space what advice would you have
um looking ahead for them so first of
all to all upand cominging oers fail
fast try it doesn't work p it try it
yeah that that's the iteration you have
to do um and the second advice is not my
original but it is um Steve Jobs who
said don't invent a technology and then
try to find a solution for it so uncover
a real problem and find a technology to
support that need that really helps the
you know that really
will reverberate with the customer
because if you develop the technology
first which would be a great technology
but it would be a shame if you don't
find a real world application for it to
be applied to so that is what I would do
and then from a realistic all those of
uh you as entrepreneurs uh from a supply
it's a it's a mindblowing field again if
you love the cross functional approach I
mean it's it's one of the best fields to
be in it's it's highly yeah the cross
functional so it's it's wonderful
interdisciplinary love that of course um
you know that's something that um I've
learned um across many different domains
of course by making mistakes myself but
even during my MBA at UT Austin we had a
professor Rob he actually wrote a book
on it that said if you build it they
would come and he had this Capstone
program uh for the entire duration of
two years that we were getting our MBA
where uh we would have lectures every
semester but the focus was on spending a
lot of time on Market validation on
finding that problem that you want to
solve instead of just you know of course
you know if you build it they would come
you can't think like that you can't have
that mindset um no so definitely great
advice and uh thank you for that and
with that said folks we're wrapping up
another riveting exploration Into the
Heart of Industry with Rahul gang we
extend our heartfelt gratitude for Rahul
for generously sharing his in valuable
insights as we bid Ado let's reflect on
the gems he's imparted the essence of
agility Innovation and resilience that
drive the wheels of supply chain
Excellence remember in the dynamic world
of Industry adaptability is key
Innovation is fuel and resilience is
armor so let's harness these principles
as we chart our course towards a future
defined by efficiency sustainability and
success until next time stay inspired
stay informed and stay ahead of the
curve thank you Rahul thank you bye-bye
bye-bye
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