Track B - Evaluating Supply Chain Strains in their Race to Robustness, Flexibility & Resilience

Summary

在这段演讲稿中，演讲者Rajiv Gupta先生，一位资深的数据科学家，讨论了供应链韧性的重要性。他指出，在全球化和外包成为主流的背景下，公司往往只关注成本效率，而忽视了潜在的风险。2020年的疫情和近年来的政治冲突，如俄乌战争，暴露了这种集中化供应链的脆弱性。Gupta先生强调，企业需要在成本和韧性之间找到平衡，通过多元化供应商、建立强有力的生态系统伙伴关系、增强企业风险管理流程，以及实现端到端供应链控制来构建韧性。他还提到，一些国家如日本、澳大利亚和印度已经开始采取行动，通过政府间的合作来增强供应链的韧性。最后，Gupta先生通过可口可乐公司在印度的芒果供应链管理案例，展示了如何通过前瞻性规划和合作伙伴关系来应对潜在的供应链风险。

Takeaways

• 👤 **个人简介**：Rajiv Gupta先生是一位数据科学家，拥有CFE、CA和SISA资格，专注于新兴技术、风险管理、高级数据分析、内部控制、治理以及推动组织文化变革。
• 📚 **专业成就**：Gupta先生是《内部审计技术指南：饮料行业》一书的作者，被评为印度审计和治理领域前20名思想领袖之一。
• 🌐 **供应链韧性**：Gupta先生讨论了供应链韧性的重要性，强调在面对如COVID-19和俄乌战争等黑天鹅事件时，企业如何维持运营的重要性。
• 🔄 **风险与效率**：他指出，过去企业倾向于将成本效率作为唯一驱动力，但现在意识到必须在成本和供应链的韧性之间取得平衡。
• 🌱 **供应链多元化**：Gupta先生提到了供应链多元化的重要性，包括“中国+1”政策，即在中国以外寻找另一个生产基地，以减少对单一供应商的依赖。
• 🤝 **生态系统合作**：他强调了与供应商建立合作伙伴关系的重要性，而不仅仅是将他们视为简单的供应商，这有助于提高整个供应链的质量。
• 🔍 **端到端控制**：企业正在加强对供应链的端到端控制，从原材料的来源到最终产品，以确保能够快速检测和响应潜在风险。
• 📈 **风险管理**：Gupta先生讨论了企业如何通过加强企业风险管理流程来提高对潜在风险的检测、响应和恢复能力。
• 🌟 **前瞻性投资**：他提到了可口可乐公司如何通过投资创新技术和支持初创企业来减少对单一供应商的依赖，展示了企业如何通过前瞻性投资来增强供应链韧性。
• ⏱️ **及时行动**：Gupta先生强调了在面对潜在的供应链风险时，企业需要迅速采取行动，以避免长期的运营中断。
• 🌍 **地缘政治考量**：他讨论了地缘政治因素如何影响全球供应链，以及企业如何需要将这些因素纳入风险管理策略中。

Q & A

如何定义供应链韧性？

供应链韧性可以定义为在遇到意外事件（如COVID-19疫情或俄乌战争）对供应链产生负面影响时，企业能够确保业务持续，并尽快恢复至满负荷生产能力的能力。

为什么过去企业更倾向于外包和集中化生产？

过去，企业更倾向于外包和集中化生产，因为这种方式成本效益最高，能够最大限度地减少成本。企业会将所有生产外包给世界上成本最低的国家，如中国，而只保留管理层。

在供应链管理中，什么是“中国+1”政策？

“中国+1”政策是指企业除了在中国有主要供应商外，还会在其他国家设立一个或多个备用供应商，以减少对单一国家供应链的依赖，提高供应链的韧性。

企业如何通过建立供应链韧性来应对潜在风险？

企业通过进行强项和弱点分析，了解哪些环节在控制之内，哪些不在控制之内。此外，企业还会进行压力测试，确保有多个供应商可以支持关键供应，并通过建立端到端的供应链控制来了解整个供应链的情况。

为什么说供应链韧性的建立不仅仅是成本问题？

供应链韧性的建立虽然可能会增加一些成本，如维持多个供应地点的费用，但这应该被视为一种投资，它有助于确保企业的长期可持续发展，而不仅仅是短期的成本效率。

如何理解企业风险管理（ERM）在供应链韧性中的作用？

企业风险管理（ERM）在供应链韧性中的作用是快速检测潜在风险，及时响应，并确保企业能够从影响中恢复。ERM团队需要有能力识别、评估和优先处理各种潜在风险。

为什么说审计师在供应链韧性中扮演重要角色？

审计师在供应链韧性中扮演重要角色，因为他们负责评估和确认企业是否已经建立了有效的供应链韧性政策，并且这些政策是否得到了适当的执行和维护。审计师还需要确保企业的风险管理措施是透明和可追溯的。

在供应链韧性建设中，政府的角色是什么？

政府在供应链韧性建设中扮演着关键角色，通过政策支持和国际合作，政府可以帮助企业减少对单一供应链的依赖，提高整个国家供应链的韧性。例如，日本、澳大利亚和印度之间的供应链韧性倡议。

如何通过投资创新来减少对单一供应商的依赖？

企业可以通过投资创新和技术发展来减少对单一供应商的依赖。例如，可口可乐公司通过投资支持那些致力于开发新技术的初创企业，以减少对特定供应商或国家的依赖。

为什么说供应链中的“双重检查”是重要的？

“双重检查”是指企业不仅要了解自己的直接供应商，还要了解供应商的供应商，这样可以更全面地了解供应链，识别潜在的风险点，并采取相应的措施来缓解这些风险。

企业如何通过地理政治关系来评估供应链风险？

企业需要考虑供应链中各个环节的地理政治关系，特别是那些与本国政治关系紧张的国家。通过评估这些关系，企业可以识别潜在的供应链中断风险，并采取措施来缓解这些风险。

Outlines

00:00

😀 介绍嘉宾与会议主题

本段落介绍了会议的开场，提及了会议的主题是供应链的韧性，特别是在数字化时代的重要性。同时，对主讲人Mr. Rajiv Gupta进行了简要介绍，他是一位数据科学家，拥有丰富的经验，并在审计和治理领域是印度前20名思想领袖之一。此外，还提到了组织在面对如COVID-19这样的黑天鹅事件时，如何维持连续性的问题。

05:01

🤔 供应链集中化的风险与反思

这段落讨论了过去20年间，组织倾向于将供应链外包给成本效益最高的国家，如中国，以此实现组织的精简和成本效率最大化。然而，这种做法在遇到COVID-19疫情这样的全球性事件时显得脆弱。企业开始意识到，过度依赖单一供应商或国家会带来风险，需要重新考虑供应链的地理分布和韧性。

10:01

📈 供应链韧性的定义与实施

Mr. Gupta在这一段落中定义了供应链韧性，即在面对如COVID-19和俄乌战争等意外事件时，企业如何确保业务能够持续进行，并尽快恢复至满负荷运作。他提出了进行强项和弱点分析，以及如何在可控范围内构建韧性。

15:02

🔍 深入分析供应链的控制与风险

这一段讲述了企业如何通过深入分析供应链来识别自身的强项和弱点，以及如何控制那些可控的因素。举例说明了如Maruti这样的公司如何通过地理上靠近的供应链来增强控制力，并且强调了了解供应商的供应商（二级供应商）的重要性。

20:03

🛠️ 供应链风险管理与压力测试

本段落讨论了企业如何通过建立压力测试来评估供应链的韧性，确保在主要供应商出现问题时，次要供应商能够补足供应缺口。同时，强调了成本不仅仅是做生意的成本，而是对企业长期可持续性的一种投资。

25:04

🌐 供应链地理分布的多样化

Mr. Gupta在这一段中提到了供应链地理分布的多样化，如'中国+1'政策，以及如何通过建立更接近本土的供应商网络来减少风险。他还提到了企业如何通过增强风险管理流程来快速检测、响应和恢复潜在风险。

30:06

📝 审计视角下的供应链风险管理

在这一段落中，从审计的角度讨论了供应链风险管理的重要性。强调了审计团队在评估供应链韧性政策时，需要检查企业是否能够及时检测风险、采取行动，并确保能够迅速恢复至满负荷运作。

35:07

🌟 可口可乐公司的供应链前瞻性

通过可口可乐公司的Maza品牌案例，展示了企业如何通过前瞻性规划来应对潜在的供应链风险。公司通过预测未来的芒果需求，并与印度和非洲的研究机构合作，采用超高密度种植技术，以确保供应链的稳定性和增长。

40:07

🤝 国家间的供应链韧性合作

本段落讨论了日本、澳大利亚和印度之间的供应链韧性倡议，这是由日本发起的，旨在减少对中国和美国的依赖，并增强三国之间的相互支持和合作。

45:08

🏢 企业风险管理与审计的角色

最后，Mr. Gupta讨论了企业风险管理(ERM)在审计过程中的作用，强调了ERM团队在识别、评估和管理供应链风险中的重要性，以及审计团队如何通过审查这些过程来确保企业的风险管理措施得到妥善执行。

Keywords

💡数据科学家

数据科学家是指那些专注于使用数据挖掘技术、统计分析和机器学习算法来提取数据中的洞见和模式的专业人士。在视频中，Rajiv Gupta先生被介绍为一位数据科学家，这强调了他在数据分析和利用数据来驱动组织变革方面的专业能力。

💡供应链韧性

供应链韧性指的是在面对意外事件或干扰时，供应链能够维持其功能、迅速恢复并继续运作的能力。视频中讨论了供应链韧性的重要性，特别是在全球事件如COVID-19和俄乌战争对全球供应链造成冲击的背景下。

💡风险管理

风险管理是一个识别、评估和优先处理风险以及采取经济有效的措施以最小化和规避风险的过程。在视频中，Rajiv Gupta先生讨论了风险管理在构建供应链韧性中的作用，特别是在企业如何通过风险管理来应对潜在的供应链中断。

💡精益组织

精益组织是一种管理哲学，旨在通过消除浪费、优化流程和提高效率来实现组织的精简。视频中提到，过去许多组织追求精益组织模式，将一切外包到成本最低的国家，但这种做法在面对全球性事件时显示出了其脆弱性。

💡黑天鹅事件

黑天鹅事件是指那些发生概率很低但一旦发生会带来巨大影响的不可预测事件。视频中提到了黑天鹅事件，如COVID-19疫情，对全球供应链产生了深远的影响，迫使组织重新考虑其供应链策略。

💡地缘政治

地缘政治是指国家间基于地理位置、政治利益和权力关系而形成的相互作用和影响。视频中提到了地缘政治事件，如俄乌战争，对全球供应链产生了直接和间接的影响，导致企业重新评估其供应链的地理分布。

💡多源采购

多源采购是一种供应链策略，企业不依赖单一供应商，而是从多个来源采购关键物资或服务，以降低风险和提高灵活性。视频中强调了多源采购作为提高供应链韧性的一种方法。

💡端到端供应链控制

端到端供应链控制指的是对整个供应链流程的全面管理和控制，从原材料采购到最终产品交付给消费者。视频中提到，企业通过端到端的供应链控制来增强其对供应链中断的应对能力。

💡企业风险管理(ERM)

企业风险管理是一个战略性的方法，用于识别潜在的风险，并制定相应的策略来管理这些风险，以支持企业的目标。视频中讨论了ERM在帮助企业快速检测、响应和恢复供应链中断中的重要性。

💡供应链区域化

供应链区域化是指企业将供应链网络分布在特定的地理区域内，以减少对单一地区或国家的依赖。视频中提到，一些国家和企业正在采取供应链区域化的策略，以提高供应链的韧性和减少地缘政治风险。

💡供应链透明度

供应链透明度指的是企业能够清晰地了解和追踪其供应链中的各个环节，包括原材料来源、生产过程和分销渠道。视频中提到，提高供应链透明度是企业构建韧性的关键，这有助于企业识别潜在的风险点并采取相应措施。

Highlights

Rajiv Gupta 被介绍为一位心怀数据科学，拥有 CFE CA 和 SISA 资格的数据科学家，他在新兴技术、风险管理、高级数据分析、内部控制、治理以及推动组织文化变革方面拥有丰富的经验。

Gupta 是《内部审计技术指南：饮料行业》一书的作者，被列为印度审计和治理领域前20名思想领袖之一。

演讲强调了供应链韧性的重要性，特别是在数字化时代，组织如何在面临挑战时保持连续性。

讨论了过去20年中，组织倾向于外包和集中化以提高成本效率，而没有充分考虑韧性。

提到了2020年的全球事件和黑天鹅事件，以及它们对全球供应链的影响。

强调了地缘政治事件，如俄罗斯和乌克兰的战争，对供应链的直接影响，以及这些事件如何迫使组织重新考虑其供应链策略。

Gupta 提出了组织如何通过建立冗余和接受一定程度的低效率来增强其供应链的韧性。

引用了一项研究，指出单一长时间的冲击可能对公司的 EBITDA 产生高达30-50%的影响。

讨论了组织如何通过多源采购、近岸采购和制造网络多样化来构建供应链韧性。

提到了企业风险管理(ERM)在快速检测、响应和恢复潜在风险方面的重要性。

Gupta 举例说明了可口可乐公司如何通过超密集种植技术来确保其Maza品牌所需的芒果供应。

强调了供应链中端到端控制的重要性，以及如何通过合作伙伴关系和技术支持来增强供应链。

提到了日本、澳大利亚和印度之间的供应链韧性倡议，展示了政府如何积极参与确保供应链的稳定性。

讨论了审计员在评估组织供应链韧性政策时的角色，以及如何识别和评估设计上的差距。

强调了在供应链决策中，基于研究的判断和决策过程的文档化的重要性。

Gupta 建议公司投资于初创企业，以减少对单一供应商的依赖，并支持技术创新。

提到了可口可乐的神秘配方“7x”，并强调了其保密的重要性。

Transcripts

uh with the interest of time I think

I'll request Mr Rajiv Gupta to come over

and start with the session I would like

to quickly introduce Mr Gupta so Mr

Gupta is a data scientist by heart

and he's a CFE CA and sisa qualified

with experiencing an emerging technology

risk Advanced data analytics internal

controls governance and driving

organizational cultural change he's an

author of a book a technical guide on

internal audit on beverage industry and

is one of the top 20 thought leaders in

India in the domain in audit and

governance I will not take much more

time and hand over to Mr Gupta right now

thank you so much so good afternoon

everyone I Am The Last Man Standing now

between you and and the lunch so even

before riddhi requested me to see if I

can shorten the session I myself propose

that which was very well accepted and

I'm sure you all will also accept that

so uh today I unlike my routine session

where I talk about data and Technology

this time me being from e-commerce I'm

speaking on supply chain resilience yeah

since the

since the theme of the

conferences digital resilience it

includes everything why digital because

today no organization runs without

technology and hence uh digital has to

be there and resilience is to make sure

that the organization continues even if

something goes wrong so for example ABI

you know there was electricity cut but I

didn't wait for the slide and we started

the session right so so that way how

organizations continue even though there

is whatever technology or whatever

suppliers they are reliant dependent on

they have there is some problem on that

but why why we are even talking about

supply chain resilience whereas around

20 years ago if you if all of you

remember

maybe around here around 10 to 20 years

ago

every organization in every country used

to feel

that the right approach for any con any

company is lean organization

Outsource everything to one country in

the world

why because it is the most cost

effective it is the most cost effective

approach and keep only the management

with them

so firstly that country was China and

then a few more countries came up uh

Vietnam came up India was also there

Philippines was there and nobody talked

thought of resilience

everybody was appreciated I mean when I

say everybody every CEO was appreciated

and was rewarded for outsourcing

everything yeah to one place and that

could be any one of these these

countries

because the focus was single

cost

efficiency

there was no other factor which was

considered in doing uh in bringing this

centralization globalization whatever

word you can say or lean organization

and I myself remember reading

many books on how to make your

organizations lean yeah

and nobody thought that the world will

face the situation which we faced in

2020 and as you know harsh was also

referring that yes there will be some

Black Swan events and there's the second

register where you can document those

things the probability of which

happening is very low but the impact

would be high and unfortunately the the

challenge which we face is when we put

something as low on one quarter on side

of the quadrant and another even if it

is high when you multiply it becomes

low or medium only

because only when something is medium

multiplied by high or medium multiplied

by medium only then in our whatever

rating scale

practically that's what happens and

hence many of these events which may

probably have higher impact but since

the probability is low many times

management doesn't invest time money and

efforts into it

and that's what happened with all the

organizations in the world who had super

super centralized right and

a lot of study was made that to what

extent because of the centralization

the companies got impacted yeah whether

it is uh there were difficulties in

getting supply chain above

even companies had no idea or even they

even then think of

going to a stage where

they double click on who actually is my

supplier you know harsh made that point

subtle in a subtle manner in his last

presentation

we knew from whom we are buying

but we had no idea from where he is

getting his supplies

and we never felt the need also

business is growing business is working

fine there was no problem in the past on

the continuity and hence whether he is

buying it from China Vietnam or whether

getting produced in India had we had no

issues with that yeah and all these

double clicking the companies were able

to do when kovid hit us

was getting our supply from where China

and we never thought to even check that

why there was no need we all thought and

that's a very important point we all

thought

that the countries will keep their

political issues independent of their

business issues or business relations we

always thought that

but that's not what happens when this

Russia Ukraine war happened they

immediately got cut of supplies to all

the countries fortunately not you know

against India because we are you know

closer mind we we are not absolutely

against Russia but those

who even though had much bigger business

relation with Russia for example Europe

yeah we were very small for Russia in

terms of oil I think one or two percent

of their total sub oil sale Europe

though I mean runs on Russia

so they immediately cut why because

political you know issues came

nobody thought it that way they thought

our business relation will continue even

if whatever happens at the political

level

all countries learned that and that's

why if you even you know uh I am a big

fan of our current external affairs

minister the gentleman

you hear him how diplomatically he you

know tosses tosses of these questions

which are enough uh thrown to him he you

know are you supporting War you know

because you have increased your by you

know purchase of oil from Russia this

and that how in a very balanced manner

he explains the or justifies our stand

as an organization keeping everything

balanced not going uh you know either of

the Extremes in his narrative yeah and

that's where

we all all the ordinary not only or all

the organizations and countries are

learning that the geopolitical issues

are also uh relations are also connected

with

our business relations they cannot be

seen uh in isolation uh so these were

some of the some of the learnings which

the companies and countries had uh from

the war and uh then the same same

happened with in case of Russia Ukraine

is happening in case of Russia Ukraine

war as well so what were some of the

realizations yeah realizations

which company had were number one

cost cannot be the only driver of how we

run the organization there has to be a

balance of resilience

how we are bringing a sort of tarazu

which makes sure that we are building

some

facts as well in our system you know

some inefficiencies also in our system

so that in case our key supplier or key

suppliers key supplier

does something which is not in our

interest our business stops all together

or we have some way to continue our

business so that was the uh one

realization of

there has to be some trade-off to

balance it out rather than just being uh

uh too focused on the on the cost part

and there were some surveys which were

done and interestingly

what it found that for companies in most

sector and this was done in U.S

a single prolonged shock can have impact

of up to 30 to 50 percent of their

ebitda

only single event yeah this was done in

U.S but I am sure very similar outcome

will be there if the same study is done

in India as well yeah

so realization is okay we all understood

that yes this is the risk in which we

are living so now what to do

there are various options then I will

talk about first option is

it's okay yeah we realized but we'll

still do ad hoc

we'll do fire fighting which means

Russia Ukraine war will keep happening I

mean today it's Russia Ukraine war

tomorrow

there will be another War

if it happens it will happen and then

we'll see what the you know how we will

manage as an organization so that is one

option

which is there with the com companies

yeah maybe some smaller companies may

think it is a viable option but I think

bigger organizations listed companies

who have

a lot at stake and lot many stakeholders

to be managed they can't go with this

fire fighting approach yeah so another

approach

which obviously most of the

organizations are now looking at is how

they can build resilience in their

supply chain and then when I say thought

that okay we have to talk about

supply chain resilience then what

exactly it means so let's simplify let's

simplify the meaning of supply chain

resilience so I just you know made few

underlines of the four keywords number

one

is

if there is an unexpected event yeah

which for example kovit you this Russia

Ukraine war and which can impact your

supply chain

negatively

and what are your what do you want to do

you want to make sure that the business

continues so there is an unexpected

event

it is going to impact your supply chain

uh negatively but your job because you

are running a business your job is to

make sure that the show must go on right

and recover back to your full capacity

as soon as possible is the very simple

definition or meaning of supply chain

resilience yeah no nothing complex about

that

so

what does that involve so it's

definition okay clear so what that does

that involve How We Do It

what the organizations have started

doing they have started doing strength

and weakness analysis strengthen

weakness analysis means what is in my

control and what is in not not my

control you know what that in our

various leadership programs we learn

about circle of influence right there

are two circles one is circle of

influence and what is another is circle

of concern concern

influence and circle of concern let me

just you know help you recap circle of

influence means those things which I can

influence for example uh I can influence

the output of my team my own employees

but the consultants if I have you know

taken some Consultants as well I I can

share my concern with the Consulting

partner

but can I really influence my

Consultants not to that extent the the

extent to which I control my employees

so there's some circle of concern and

circle of influence another example of

Circle of concern is

I know in many countries the politicians

are not doing exactly what they're

supposed to do I am very worried and

especially you know over in the evening

over drinks we talk a lot about it array

this is

but can we really do anything about it

at least in what we are doing the way we

are in our current role as a

professional no

if we really want to do we have to

become a politician right a better

politician so when we are having those

evening sessions over drinks and sharing

our concern it is circle of concern only

we can share our grief pains but we

can't really change anything

circle of influences when you are one of

those politicians and I as a audit

leader I am sharing my concerns with you

and you say oh you're talking about

something which relates to oil and gas

and I am the minister of petroleum

so as a minister of petroleum I can

definitely influence that

so if we are discussing those things we

are one of the participant has the power

and authority that is circle of

influence

and we as professionals

we are expected to focus on circle of

influence and not much on Circle of

concern because circle of concerns

because none of you have the authority

to solve that problem

circle of influence may you are in

making sure that at least one of the

person in that room has the authority

also and hence

if you share your concerns with him or

her something can happen yeah

and that's what companies started doing

when they learned about supply chain

resilience when they learned about this

you know erratic Supply let me see what

is in my control and what is in inner

control those things which you are for

example manufacturing yourself

what is not in your control and what are

your weakness where you are dependent

upon multiple line chains yeah for

example

companies like maruti and others if you

would have seen

they have done some things amazingly

well

the entire ecosystem of their suppliers

are in few kilometers in you know of

their Factory

and with the amazing EDI electronic data

interchange set up the this established

around 20 25 years ago

they are amazingly well they are

managing their cost also they are

absolutely jit just in time yeah the

trucks come exactly on time they don't

keep too much of inventory but they have

made sure that the ecosystem for their

suppliers here for their supplies is

very well in their control yeah they are

so if some if for example strike happens

outside of gurgaon or outside of haryana

and maruti may not be that much impacted

because their supplies are you know

nearby either gurgaon me or in

Manchester you know most of them yeah

and hence as long as locally the trucks

can move they are fine

but if something has to come say from

Karnataka or maybe from Tamil Nadu then

they may have problem if there is a

national strike yeah so that way

companies started doing strength and

weakness SWOT analysis that what is in

my control and what is not in my control

and one very interesting thing they

started doing and you know that's the

double clicking which no company no very

few companies were doing so far

was understanding

from who all are the suppliers of my

supplier

that's very important point which many

companies were not focusing earlier they

were only worried about their suppliers

and if they are having good relation

with their suppliers they were happy but

now many many reputed companies have

started double clicking on mirror

supplier

and how reliable that supplier supplier

is

and

with whom who means with which country

that supplier supplier has close

proximity or close relation

for example

if your supplier is buying most of his

products from a country

from a country with which your country

doesn't have great political

relationship

while your supplier is basically

Incorporated in India only yeah

but if your supplier supplier is

Incorporated in one of these troubled

country where your political you know uh

relations are not great

you are living in a big risk which

earlier companies were not really you

know that much bothered

so that's another thing which they have

now started double clicking yeah

and

they have started doing the stress test

you know and harsh also gave examples

relating to his uh you know prior

experience of nbfc

how you are checking that whatever these

resilience which you are building and

how you are building resilience by

making sure that yes your primary

supplier Remains the Same

but you have just like you know people

started saying China plus one policy

right yeah uh similarly how you are

making sure

that for key supplies for your key

supplies you have one primary supplier

and have and then you have secondary

smaller supplier as well

who is ready to support you with the

same quality product and that's why if

you remember ladies and gentlemen

in when we audit procurement process

by default

we want to make sure that if there were

three quotations taken for purchase for

some high value purchase

the lowest quotation wins correct and we

buy everything from that from that

supplier yes or no

any no in this room

L1 anybody who want to say no L1 and L2

and L3 L3 also only one sir two three

sir fours one madame also

even if the answer is wrong this is not

a test right so you are absolutely right

so maybe sir since you raise your hand

first sir why Madam is saying only L1

and many agreed including me but you

said no L2 L3 also you will prefer why

sir

let's presume sir let's presume all

three have no capacity constraint then

what

let's presume no locational disadvantage

then what then what

absolutely you both are right sir

and we as Auditors had a hard time let

me share with you hard time accepting it

many times yeah and many times my own

audit team came to me with this as a

high risk eraser what is this one

supplier was selling something to us for

30 rupees while we bought from him

our company bought from someone who also

was selling us at 35 and some someone

who was selling at 40. it's the rule

coach

no no we have don't worry lunch may have

a Time

absolutely

absolutely and this exactly is the

reason uh why many companies are doing

it and they are doing it before kovit I

mean this is not something which uh

covet taught us company learned it that

they if they are fully dependent on only

one or you know very few

suppliers today they are in our favor

tomorrow they can arm twist us as well

and hence uh different companies so as

you said 40 40 20 different companies

had decide different percentages to

allocate just to make sure that they

have working relation working relation

with multiple suppliers yeah and that is

one very important stress test which

many companies were doing earlier as

well and those who were not doing uh

because of the cost factor that no let

me buy only from that seller supplier

who's selling me for 30 rupees so those

companies have also started doing this

stress test that if my primary supplier

30 rupees me who is giving me if he goes

out of business then 35 and 40 Wala

would be able to provide me for full

capacity or not yeah so they have made

sure the companies have made sure they

are now consistently uh doing this

stress test so that their

their business is not impacted for a

long for a long duration yeah

and then you know Gartner just tried to

summarize this point very well and they

said the cost of retaining multiple

Supply locations must be seen more as a

cost of doing business rather than

inefficiency very simple but very very

important point and I I love this

statement because many times when you go

into you know that purchasing committee

yeah there are many uh who challenge the

fact that why we are wasting money uh by

buying from 20 or 40 percent from the

expensive suppliers uh so this message

actually has to be reiterated simple

Point uh but it has to be reiterated

that that extra five rupees your extra

Trend Rupees is not inefficiency it's

not a loss it's an investment we are

doing on the long term uh sustainability

of our business so it has to be seen as

an investment rather than an adverse

impact on your p l in short term yeah so

that's that's an very very important

point which many companies are learning

now

there are three things broadly you know

uh when uh when Gartner did that this

study with the

with many high profile companies which

were significantly impacted you know

during covet that what exactly you did

to come back I mean obviously see year

2020 was a big shock for everyone yeah

everybody went down but now

all the companies yeah almost all the

companies they are back

no so that's when Gartner did this study

with them

asking what did you do to come back yeah

and

they were there are two ways to look at

it so on the left hand side are six

points in which Gartner summarized it I

further summarize it into three yeah so

that it becomes easy for us to remember

and uh how Gartner said they uh

summarize they said the companies moved

into multi-sourcing we were discussing

near showing near Shoring means in case

your C because if you remember and that

was an interesting thing which I uh you

know saw on Google Google Maps Google

Map yeah Google Maps last year if you

would have seen the satellite view you

have two options now in Google one is

the road view another is where you see

the green and the buildings as well

there are there were many ports in the

world where there were traffic jam

traffic jam off

of ships

there were many reasons one reason was

there were no drivers

why there were no divers everybody was

jobless then why there were no drivers

why there were no drivers any idea

in India the reason were different in

U.S the reason was different

any idea why there were no drivers and

because there were no drivers the ships

could not be unloaded

yeah in India the reason was all the

drivers went back to their villages

to do

farming why because they had no Surety

when the economy will open up because

everybody every place there was locked

down and I mean labor class they they

are dependent upon their monthly or

daily wages hence they thought key in

city will we are not getting anything so

let's go back to our village there at

least we can do farming and you know

make our living so in India this was the

reason all the all the drivers they went

back to the Villages but in U.S that was

not the reason

any idea

in U.S

drivers realized

that the amount of money they were

making as a driver was less than the

amount of money they were getting as

minimum that Social Security they get

what they call

Dole okay the the bear government gives

them right so U.S government print its

6X the money right something like that

during covert times and distributed to

everyone and that's why they are in the

mess where in which they are right now

that's a different story but

the drivers were not there why because

they said

I am earning more

than working in as a driver and hence

there was no driver

and hence the worst traffic jam of the

ships on all the European and U.S ports

I think now it's have got cleared

that was the near Shoring thing so

that's when companies some of the

companies realize that the farther my

material comes from

the more the risk because then I am

dependent on ships trucks this that and

hence let me do near Shoring the nearer

is the source of my material better it

is for me beautiful example is maruti

yeah so they they had done it I mean 20

25 years ago which many companies

learned now uh then ecosystem

partnership again I think harsh was also

you know making that point that how you

are strengthening the ecosystem around

you rather than just treating them as

your supplier because when you think of

them as a supplier versus as your

ecosystem partner the quality of

qualitative relationship changes yeah

and that's what companies learned uh and

they improved their relationship with

their supplier so many companies they

are not calling suppliers as suppliers

now they are calling as business

partners yeah and just the change of

this world also changes the quality of

relation

if you say vendor supplier versus

business partner yeah just a change of

what but it it changes your psychology

yeah

uh manufacturing Network diversification

so what essentially they did

they said

can we enhance our Enterprise risk

management process

yeah

by which we will be able to rapidly

detect

any such future event which may impact

my company

and respond also quickly detection is

not a big thing even our CIA U.S Central

Intelligence Agency they also detect a

lot of potential you know those

terrorist events very well in advance

but they don't respond they don't action

take action in many of them yeah the

response is slow so detection plus

response and then recovery also because

you made sure that you're not becoming

zero but then you have to come back to

your 100 capacity as well so

companies started enhancing their

Enterprise risk management process to

make sure these three things are

happening faster yeah that was one

second end-to-end supply chain control

very important uh many companies were

not doing it this is the same point

where I said companies were very uh

Limited in their in terms of their

control on who is my supplier now they

are saying no who is my supplier

supplier and who's whose supplier

supplier so that I understand end to end

from ultimately where my material is

coming and let me give you one very

beautiful example I'm an ex Coca-Cola so

I will be slightly biased towards the

company uh excuse me for that but let me

share one very interesting point

um Coca-Cola company makes uh Maza as

well yeah

and I worked on one leadership project

where

in 2008 or so we had to work on let me

firstly do time check so I have time

till 1 30 so we are very good at 130

will not go beyond yeah because 136

lunch is not there yeah so

and T is also anyway is not there right

so you can't do much outside before 130

yeah so let me share this

Coca-Cola Company

detected

somewhere in 2007 2008

that

the the vision they have for Maza brand

the growth plan which they have for Maza

brand

if they are able to succeed with that

growth plan then quantity of mangoes

they need

to produce Maza will be much more than

the quantity of mangoes produced in

India

that we are not eating uh mango and only

a company is getting the entire mango

Supply

so a leadership team was formed I was

from audit site Enterprises

to study

mango cultivation in different countries

and suggest to the

mango Farmers how they can increase

their production in India just think

about it I had no clue that how many

types of mangoes are there in India that

time I learned 250. 2008. and another

important thing which I Learned was

that any variety of 250 mango goes into

Maza

a particular variety plus Alfonso

goes into Maza

another important thing I learned that

time that's not Alfonso from any place

he suppose you know outside this hotel

suppose they have somebody has a

agricultural Farm

Alfonso is very expensive thousand

rupees 1200 rupees kg so let me you know

put mango tree here no

from only three belts in India

three out of many belts on in which

Alfonso mango is uh cultivated only

there are three barrels

Alfonso goes into Maza

and why it is so because the Coca-Cola

Company in Atlanta

certified that if you get mang Alfonso

mango from these three cities or not

City villages

The Taste is consistent

in other places if you get Alfonso The

Taste is varying every season or every

no season trala you know that trala you

know that tractor open that container is

called trala with every tala The Taste

varies and Company wanted consistency so

three belts

and that is when

me along with some other leaders we flew

to Africa and some other countries

to learn ultra high density farming

just to give you some more clue Indian

trees Indian mango trees used to take

around 20 years if you plant them now

anywhere between 15 to 25 years they

will take to fully mature and then they

will give you mangoes like anything you

know whatever you see your in

advertisements

with ultra high ultra high density

farming it is ready in four to six years

yeah fully yeah

and that's what we learned we went to

Pusa Institute it's in Delhi we went to

Jain irrigation a company in Pune uh

somewhere around Pune Pune nagpur

and then

company partnered with them

yet technology

partnership and company gave training to

the farmers this and that ultra high

density I mean among other things you

bring the trees closer as well yeah

among other things which you do uh and

that's what was done in 2010 why because

company in 2020 there is going to be

shortage

and why they started in 2010 because we

said if you don't do now then the margin

of error is very less because four to

six years

so if you if you saw the see the seeds

today in 2010 2016 chaos pass the tree

will be mature and if something goes

wrong you know you still have three four

years margin otherwise uh you know

neither the uh I mean none of the

factories will get the mango for Maza so

this is a beautiful example of how

company looked at two things yeah

rapidly detecting what is going to

happen how the short potentially

potential shortfall will come around 10

12 years later and how to look at the

entire supply chain so they didn't only

look at

those companies because

Coke and Pepsi and even Dabber yeah who

makes the mazat this mango drink we get

pulp from companies like Goodrich so who

is our supplier godrej

so company didn't stop at godrej level

godrej do we have the capacity of God

to convert mango into pulp

but company double clicks

production is sufficient or not in the

country is something they looked at and

that is a beautiful example of the

second point they looked at end-to-end

supply chain risk

capacity is

the mangoes yeah

this goes back around 10 12 years ago

but that's a good example of how some of

the companies

were anyways taking care of it and many

other companies who were bit

short-sighted they learned their lessons

in last three to four years yeah

so what then what what's the ultimate

outcome what's happening because of you

know when the companies are building

their supply chain resilience

they are Distributing they are taking

advantage of distributed supply chain

yeah and some companies or some

countries say China plus one you know

some are saying we are uh regionalizing

yeah they are using the word we are

regionalizing our supply chain so they

are not only saying one plus one so they

are not saying will become will have two

suppliers they are saying we'll bring it

closer to our home yeah

and

this is against the original

opposite to the original principle of

having lean organizations uh having only

the managers with us and everything

outsourced to the low cost Nation low

cost country this is you know in

contrast to that and the idea is

the most important thing is how as an

organization

I have empowered my Enterprise risk

management team

to make sure they are quickly detecting

any such potential risk a beautiful

example is this mango mango example

which I gave respond respond is you know

in this example people like me we all

were brought together so the beauty is

there was a team of six or seven of us

who were formed usme I was the from the

audit side there was CFO of Sri Lanka

the second team member

supply chain one leader

planning planning a company which do

this not capacity planning

inventory planner inventory planner uh

so the company was very mindful that

jitrebi

who can influence both from the finance

as well as operations angle they are

brought together otherwise the easiest

option would have been supplies though

yeah no supply chain one planner one CFO

one auditor one

uh there was one more procurement team

procurement say one

company was not very sure how everybody

will contribute but we all contributed

yeah in making sure that so for example

I am looking at it from the numbers

somebody is looking at from operation

somebody looking at from you know all

the documentation thing which has to be

taken care so it is not only about

quickly detecting but also responding to

the uh to the problem and then

when we submitted our report

we told the India and Southwest Asia CEO

you have only three months to act why

because I mean every year you can sow

that seeds in a particular cycle

otherwise one year lost next year so we

said you have only two to three months

to decide yes or no either you can put a

report in garbage because anyways we are

not uh agriculture scientists we were

Chartered Accountants and operations and

finance guys so you have both the

options

and within three months the mou was

signed with Jain irrigation it is in

Google you can search it in 2010 it was

signed why it was signed it shows the

companies you know intent on number

three that how we can quickly recover

also with this potential problem which

will come uh so that's how many

companies are have now started you know

empowering their Enterprise risk

management teams as well

last point on my slide uh very good very

much on time I just I just wanted to

share uh well uh this aspect that three

countries yeah Japan Australia and India

around uh yeah one and a half two years

ago they entered into a joint project

which they named as a supply chain

resilience initiative this was actually

launched by Japan yeah why Japan because

Japan had

the highest dependency on China and U.S

for their Imports Japan exports as well

but import also very important from

China and America China's I think around

25 percent of the total Imports come

and when kovit came

U.S

had put in lot of these what you call

sanctions on China

now Japan was very close to both the

countries because of their dependence

now Japan was in a in a problem

because U.S was saying we have put in

sanction on China how you can purchase

from China

whatever it was buying from China it has

to buy from China you it was not

available in U.S

so somehow Japan survived that problem

but then their lies Baba it's a very big

risk for me and then they said okay

dushman dushman bye bye

so strategically Japan identified two

countries India and Australia for

different geopolitical reasons

why I think uh when you know some those

racist attacks happened in Australia

China made a very open

advisory to Chinese students

Australia please re-evaluate your

decision of studying in Australia

which obviously Australia didn't like

because Australia said

those are one of events because of that

you are generalizing us as a country

being racist

and hence those political challenges you

know tension came between Australia and

there was one more reason I think

Australia or China or Japanese

and that's when they invited India and

Australia

and we will make sure that whatever

happens outside in other countries we

will support each other for Xyz

materials yeah uh Japan said yes

and India agreed because

one very important reason

India maintains close relation with

Japan because I think it is fourth or

seventh biggest investor in India it

means Japan yeah and uh non-exploitative

it gives it makes investments in India

at almost zero uh interest almost zero

uh and and that's the quality of

relation which India and China uh enjoys

and hence India immediately agreed

because

and that's the reason uh this initiative

was uh launched and this oh 130c both

start and end uh at the right time so um

they are making sure that uh the

governments are also pretty proactive so

in my previous slides I talked about the

private sector but this last slide is

about that government is also very

proactive in making sure that their

supplies are not that much impacted or

if it is impacted it's in short term and

hence there are many initiatives which

they are taking so maybe thank you so

much I will take one or two question in

case there is any

[Applause]

please

okay no no so recipe full recipe nobody

in the okay but let me tell you this is

outside of my context so any I will

answer that uh any other any other

question yeah madam

go ahead

very good point

if the supply chain resilience process

is not there in the organization I think

we should stop at their level that level

itself as a design Gap

as something which is missing percent

for me I would by default rate it as a

high risk now how exactly that policy

will look like in my role as auditor I

can't I can't Define or advise exactly

but if I'm erm

I can help them Define based on how my

what my competitors are doing what other

com companies in similar industry are

doing

uh but if a company has defined their

this resilience policy then we can

check it evaluate it from two angles

number one

two three things you know the the things

which were on my slide number one

whether they have defined all the three

things number one how they will timely

detect it

what action they will take and how they

will make sure that after that action

because whenever something will happen

it will reduce their capacity right how

they are making sure it will will it

will be back to 100 percent secondly are

they creating a end-to-end view of the

supply chain this is the most important

thing

how to do it again if I'm an auditor I

will not go into it if they have not

defined it I will raise it as a design

Gap yeah

um and if they have defined it

again not being a expert of the supply

chain I will look at the rational which

they have documented

that we are going to this level but not

Beyond this level because of XYZ reasons

now whether that x y z reason makes

sense to me or not if it makes sense

very good if not I would you know then I

would raise a as a risk but if I am in

other seed which is ERM then I will play

a bigger role where maybe I will hire

some Consultants who are experts in uh

you know creating this resilience and

I'm sure there are many organizations

and we'll see how our competitors or

other companies in the industry are

doing so that way

we will make take care of that uh and

yeah I hope that answers yeah superb any

any other question yes sir

in case of commodity training

see more often than not

there are some research Works which are

used by almost all these big companies

before making these you know commodity

related calls yeah

because otherwise how they will get to

know

that tomorrow the price is going to

increase so let me hedge it yeah and

vice versa

um and based on those research papers

because those are very high level

research

then how you are taking the call of how

you will distribute for example Your

Capacity is say

uh say

100 ton

now you saw research which which you

used for your bases now whether you are

taking a call taking a position today

for 100 ton itself or you are

Distributing between 40 40 20 or 50 50

that's the decision which the those that

procurement teams they they have to or

the treasury team I mean whichever team

does takes care of that they have to

make some

judgments so these two things have to be

documented number one that what's the

base on which you decided that you will

do this number one number two

how you made that distribution what was

your rationale for that both the things

have to be documented now if you are

auditing that process for the first time

it you will hardly find it documented

and hence uh that audit has to fail uh

normally where you find lot of high risk

you report as a design app second time

onwards they understand that you know

Auditors need this rationale as the as a

base because otherwise how you will know

uh whether it was an ad hoc decision or

a judgment now judgment can go wrong as

well and that's the beauty ladies and

Gentlemen please understand

and that amazes me

the research report which he will be

using the same research report he will

also be getting

now when he is putting a

position that I want to buy to today

sugar is at say 30 rupees

uh I want to buy at 35 but you also had

the same research report

you are ready to sell at 35 are you

getting my point he's seeing a risk that

the sugar price will increase Beyond 35

and hence he want to block it at 35

using something similar report

you are making a decision that no

price will fall below 35 so my base

number 35 so you are selling he is

buying but the beauty is you are living

in the same world in the same age of

misinformation

and hence hence I say it's a judgment

and judgment can fail so we as auditors

we should not be penalizing the one of

you who failed as long as you had a

rational

not rational can go wrong the same thing

is

no I mean he took a decision right uh

judgment so as long as that judgment is

well documented rational is documented I

think we as Auditors we have to be yeah

considerate of that but that's my

opinion yeah

absolutely man

yes yes absolutely no doubt

absolutely and that has to be part of

the design and many companies they have

you know documented in their chart of

authority and all those things

that who can authorize what type of

actions in the company so I fully agree

Madam yes absolutely

yes you wanted to ask them yeah man yeah

yes so names can be different yeah and

if you ever come to Flipkart you may get

heart attack with the amount number of

Chrono names and the different names we

use I struggle my my colleague is here

um

I struggle for six to eight months in so

many acronym and different terms which

are used so that can be different but as

long as as ma'am you said

um

proper design is there approvals

appropriate approvals are there that

that should be fine yeah

very good point only one very big

uh

space where we can influence that is

Enterprise risk management be a part of

that committee

and two things as part of that committee

number one understand

whether all these geopolitical risks are

also getting you know captured in there

number one number two

what is their process to identify these

risks that's very important

how they are

picking those risks

it's a tukkah means oh you know our

neighboring company has also put it in

or for example I went to a conference I

saw Rajiv has put in that to maybe put

girl what if there is no conference on

next one year

so then how would La identify so what is

your process to identify uh the the

potential risk for your business so

having that process is very important to

give you one very you know relevant

example yesterday I was reviewing uh you

know a process with my team and they

said Rajiv

X process have just made there were 1200

people who are having access

and we were not happy obviously as an

auditor so oh they slashed it and now it

is 300 and my team was pretty much happy

about the achievement but I asked one

thing I said tell me the process which

was followed to reduce 1200 to 300 and

my team was clueless what does that mean

I said two options are there number one

just because Auditors have pointed out

that 1200 is too much

they close their eyes

employee number one silica 900. yeah

they bucketed them into who is a manager

who is a executive I mean a team member

so manager pass they retained the access

and by chance managers are 300 and the

staff

they were 900 and their access got

removed now the second approach is

better because then it means they have

set up a process by which staff any new

staff coming in he will not get access

of that particular transaction and a

manager only will get access so

having a process becomes very important

uh in making sure that this uh you know

this ERM process is rightfully capturing

the right risks at the right time

yeah

please

really is

how does your

work no very very relevant point and

those of you who are from you know these

manufacturing side for example I'm an

ex-coke so I can very easily connect

with you because there are many uh high

speed production lines we also purchased

from Germany still purchase there is one

German company I'm sure many of you

would be knowing the name uh uh sort of

that company has Monopoly on the uh on

that technology which produces uh 720

bottles per minute BPM can you just

think about it 720 Coke bottles are

getting produced in one minute and that

in normal season that factory runs for

two shifts 16 hours so 720 multiply by

number of production lines multiply by

60 Minutes multiply by 16 hours that

many Coke bottles only one Factory can

produce but the company is dependent on

that German company or in your case it

may be China

what we saw

my boss that time recommended

that can you allocate a portion of

company money

to invest in startups

support those startups who say we will

create a similar technology

that's the Fantastic advice my boss who

was cie of coke that time he gave to the

company and Company loved it so

Coca-Cola company even today

earmark some fun so that these type of

startups who who want to uh you know try

something in the technology space these

production uh you know lines and all

those we support them now it's like 50

50 sometimes they fail sometimes they

pass but that's a investment which the

company is doing to reduce their

dependence on these monopolies but till

the time those uh

second third fourth player you know

becomes big yes the challenge is there

absolutely but this is one very good way

by which which you can support the

ecosystem of of having the your plus one

suppliers yeah yeah

all done already for for for lunch and

last uh with this question uh nobody in

this world knows the complete formula of

Coca-Cola nobody in this world even and

that's called 7x the formula is called

7x earlier it was in the museum uh of uh

Coca-Cola Atlanta and then they somehow

felt I believe ERM may have said that so

they moved it to uh SunTrust Bank so if

you really want the formula you have to

hack into the or physically you have to

break into SunTrust bank which is in

Atlanta if you do that you will learn

the formula and please tell me also what

is the formula here

yeah but this uh when that when it was

in uh Museum even as an egg you can go

and touch the formula no I it's it's

involved yeah so it was in a wall and

then they said why to take so much risk

because they moved it back to the bank

yeah thank you so much guys thank you