Supply Chain #RiskMitigation Learnings from my Personal Experience

Hi Friends,

I hope all of you are #safe and taking necessary #care of near and dear ones. My best wishes to all of you for safe and healthy days ahead. Take care and follow the Covid Safety #Protocols.

This would be an interesting read especially for #SupplyChain folks and functions such as #Sales, #Operations who are depended directly on Supply Chain #Performance.

This would be an interesting read especially for #SupplyChain folks and functions such as #Sales, #Operations who are depended directly on Supply Chain #Performance.

I am sharing with you one of my #experience from day-to-day personal activity wherein the final outcome and response from my internal #customer pondered me to think on #SourcingStrategy & #RiskMitigation.

Currently due to challenging situation of Covid19 Pandemic in India, There are strong rumors everyday about strict lockdown and with kids at home I came under pressure from my family especially #HomeMinister to ensure sufficient stocking of #essential items.

I immediately went out (Following all #safety of SMS #Sanitization, #Mask & #SocialDistancing) to nearby marketplace Street and approached first available shop. Items were #StockOut at his place, I went to 2 more shops & got same response. At 4th shop, Shop guy told me he has few numbers left and if I want, I should take them immediately & at #higherPrice. There were few more shops which I could approach but time was #constraint & above all fear of Stock out (A bird in hand is better than two on Bush).

I took a decision and Immediately bought the items paying #HigherCost. While coming back I took other route enquiring at other shops and found that items were available ( though stock were moving fast and everybody was selling at higher price) and but fact is I could have #negotiated to get #BetterValue.

I came back home and shared with my wife, she immediately declared that I had a #PoorDeal. I was also demotivated that I went out in this #critical situation, took a #bold decision and #achieved the end #objective of stocking inspite of availability constraints. It was a more of humiliation as I am a Supply Chain professional and my #CoreCompetency was doubted by my family whom I believed that they have lesser #expertise than me.

It's common for any Supply chain guy to get this kind of #ExpertComments in hindsight from unhappy Stakeholders.

I started thinking and then came up with factors which #influenced this outcome as well as #DissatisfiedStakeholder and how it could be avoided?

After #analyzing the situation, I came up with Factors which influenced were as below

1.Unreliable #Intelligence / Sudden surge in Demand - This can also be considered as unpredictable demand. It would have been helpful to have better visibility which could have helped in better actions. #CrossFunctional teams play a crucial role in enabling Supply Chain actions in right direction if demand visibility is improved. 

2.False Alarm / #Panic - Can be linked to first point but as this was pertaining to kids/family safety I was panicking more. Same would be happening if you are dealing with high revenue generating product / critical customers wherein we Panic more and end up taking #ShortTerm decision. Other dimension to this aspect is getting exact requirement to be covered first and then take more risk for balance quantity. In this factor also cross functional teams have a crucial role to play & directly influences the #RiskAppetite (High Risk High Gain)

3.Unreliable #Vendor base / Transactional Relationship - My Suppliers/vendors wanted to exploit the opportunity and as I had no existing #SuppplierRelationship they did not extend me fair deal. This can be improved by regular transaction, #engagement initiative and significant business #proposition with suppliers which must be constantly focused.

4.Lack of faster visibility of availability and commercials - I had no #technology or tool wherein at single screen or single click I could get best availability, understand market dynamics and plan the strategy. Organisation wide #strategy with upfront #investment even if at longer #payback will be needed but definitely help in improving #Resilience during such crisis moments.

5.Ignorance of Certain categories for Strategic Sourcing approach - Usually we have #focus on high value categories wherein we try to build relationships and have better #planning & backup plan. E.g. households maintain good relationship with Gold retailors as compared to daily groceries as later is low value and easily available. Same is the case in commercial operations where focus is on A Class category but #disruptions can occur due to C Class categories also.

So, if we see that there were #factors ranging from #Internal Supply Chain gaps as well as lack of proper inputs/supports from #External factors of Supply Chain. A more #comprehensive approach, #collaboration and better #preparedness with help of #Technology could have helped in getting a fair deal. 

I am sure we all go through this # VUCA challenges in our daily professional routines which are created due to Price #volatility, single source limitation, #urgent requirement, #DemandSupply gap, Geographical or Political restrictions and so on so forth wherein Supply Chain colleagues take various such decisions under #complex circumstances but get response from internal users that it was a #badDeal or poor #SourcingStrategy / #ProcurementFailure / #SupplyChainGap etc.

What is your take on above situation & #findings? I would like to hear if you have faced such situations and what #learnings you had? Please #share your #comments so that we can have #collective learning and sharing.

(Some situations mentioned above have been exaggerated to create an ideal case study though most of it is true and my actual experience)

Thanks,

Chandan Shirbhayye

https://www.dhirubhai.net/in/chandanshirbhayye