Maintaining Standards Amidst Market Changes: How Executives Handle Supply Chain Disruptions

In conversation with Prisila, a correspondent at Asia Business Outlook Magazine, Sanjiiv discusses strategies employed by business executives to guarantee suppliers' adherence to quality and compliance benchmarks, along with their approaches to managing supply chain disturbances arising from shifts in sourcing markets.

Sanjiv Chatterjee has had a career spanning 35 years career in supply chain. Starting off as a trainee commodities buyer (Tea)in Lipton India Ltd, he moved on to head various roles in Unilever South Asia including the F& R Exports portfolio, the Tea Excellence Centre, and was the Cluster Quality Director (South Asia). His last role before his current one as the Head of SC Operations (AMET) for Lipton Teas & Infusions, was as the Supply Chain Director (Foods & Refreshments) for Unilever South Asia.

Business executives ensure that suppliers meet quality and compliance standards, and to handle supply chain disruptions caused by changes in sourcing markets

Ensuring suppliers' adherence to quality and compliance standards is rooted in a comprehensive Supplier Selection and Qualification process. This entails evaluating suppliers based on their track record, capabilities, and quality control measures. While cost matters, prioritizing a supplier's long-term competitiveness is vital. Financial stability and regulatory compliance are baseline factors. Suppliers, crucial for innovation, should ideally invest in R&D in their supply domain.

Crafting advantageous Supplier Agreements and Contracts extends beyond financial aspects. These agreements must encompass explicit quality specifications, compliance mandates, and dual-sided penalties for non-compliance. This phase also cements expectations for support in innovation and value engineering.

Establishing a thriving supplier relationship surpasses transactional dealings. While audits and visits are integral, transparency and trust are the bedrock. Regular meetings, evaluating key Service Level Agreements (SLAs), and joint ventures in novel innovations are pivotal. Suppliers morph from mere providers into supply chain partners. The shared focus shifts to continual enhancement, driving suppliers to adopt quality management systems and invest in innovation and process optimization for heightened resilience.

These elements are pivotal for navigating today's VUCA landscape. A robust supply chain hinges on these factors:

1. Understanding Suppliers' Suppliers: This is essential to secure essential components and align with sustainability goals.

2. Diversifying the Supplier Base: Harmonizing trust-based associations with supplier diversity augments flexibility, especially for critical components.

3. Leveraging Technology and Data Analytics: Swift technology adoption and data analysis aid in gauging supplier performance, monitoring market trends, and anticipating disruptions.

4. Shorter Planning Cycles: Agility demands rapid planning cycles, adapting even weekly, encompassing internal and supplier supply chains.

5. Optimizing Inventory and Contingency Planning: Balancing optimal inventory with readiness for unforeseen scenarios is crucial. Flexibility and alternatives in processes and products buffer sudden supply interruptions.

At Lipton We constantly engage in cultivating enduring trust-based supplier relationships. Transparent exchanges, frequent interactions, and cost resilience are a result of this. Most critical suppliers have been localised or operate through VMI, streamlining operations. Collaborative feedstock management underscores our commitment to each other. Incorporating these principles fortifies our sourcing strategy, upholding stringent standards, and reinforcing the end-to-end supply chain's vigour and resilience.

Organizations optimize the manufacturing process to improve efficiency, reduce costs, and ensure worker safety and compliance with labour regulations in their factories

In today's rapidly evolving landscape, agility is paramount for organizations, needing a comprehensive, multifaceted, and agile approach to manufacturing processes. Every facet of the process must synchronize harmoniously to maintain competitiveness.

Prioritizing worker safety and local law compliance is the initial step in any optimization journey. This involves investing in employee training, empowering them with skills for modern manufacturing, implementing robust safety protocols, and providing personal protective equipment. Cultivating a culture that aligns with labor standards ensures regulatory compliance and a positive industry reputation, augmented by AI and cloud-based training platforms.

The core of optimization lies in integrating automation and robotics. Advanced robotics enhance product quality, operational efficiency, and safety metrics. More importantly, they allow reallocating high-quality resources to higher value areas, boosting morale.

Data, in today’s world, plays a vital role here. Upgrading legacy systems and leveraging data analytics and AI identifies bottlenecks, predicts maintenance needs, and fine-tunes production. Extending data beyond factory gates optimizes core manufacturing processes by improving planning and resource utilization.

Internal and external collaborations are pivotal. Partnering with academia and research institutions fosters intellectual curiosity, keeping organizations competitive through technological advancements.

Optimizing manufacturing processes is intricate and dynamic. Organizations must harness automation, data analytics, digitization, and lean principles while prioritizing worker safety and local compliance. Continuous technological engagement ensures future readiness, ultimately fostering competitiveness and social responsibility.

"Ensuring data security and privacy while integrating technology into the supply chain is paramount for maintaining trust among customers, consumers, and employees."

Professionals leveraged technology, such as IoT or AI, to enhance supply chain visibility and efficiency

In the dynamic contemporary landscape, organizations are strategically harnessing technology, including IIoT and AI, to revolutionize supply chain efficiency and visibility, collectively termed the Fourth Industrial Revolution (4IR).

There are several potential use cases for digitalizing supply chains exist and can be deployed:

Upstream:

• Smart Agriculture and Precision Farming: IIoT and AI optimize agricultural practices and resource use for sustainable tea leaf supply.
• Blockchain for Supply Chain Traceability: Utilizing blockchain enhances traceability, authenticity verification, and consumer trust.

Downstream:

• Personalized Marketing and Customer Engagement: AI and big data enable tailored marketing strategies.
• Dynamic Pricing and Demand Forecasting: AI analysis optimizes real-time pricing and product availability.
• Smart Packaging and Trackable Deliveries: IIoT-enabled packaging ensures product integrity and real-time tracking.
• Augmented Reality (AR) for Product Visualization: AR enhances customer engagement and understanding of products.
• Sustainable Packaging Solutions: Exploring eco-friendly packaging aligns with environmental concerns.

At Lipton Jebel Ali, we have used the SIRI (Sense-Integrate-Respond-Innovate) approach to drive  systematic transformation aligned with 4IR principles, while upskilling employees to operate and collaborate with these technologies as well:

• Real-time Performance Monitoring through IIoT: Integrating IIoT sensors to track performance metrics, waste, energy. & drive process improvements.
• Computer Vision for SHEQ: assures tea quality and monitors workplace safety.
• Machine Learning for Manning Optimization: In-house developed algorithms optimizes staffing based on real-time performance, boosting productivity.
• Predictive Maintenance and Quality Control: Statistical process controls predict issues, minimizing downtime and maintenance costs.
• Autonomous Work Requests through CMMS: Machine data feeds into our maintenance system, streamlining upkeep.
• Robotic Process Automation (RPA): RPAs automates manual tasks, enhancing efficiency.
• Automation: Robots, cobots, and AGVs eliminate repetitive tasks, allowing employees to focus on value-added work.

At Lipton, we are committed to combining IIoT data, AI analysis, and real-time monitoring to make data-driven decisions to maintain quality standards, reduce costs, and thus, thriving in the F&B industry's competitive landscape.

Organization handles data security and privacy concerns in the usage of technology in your supply chain

Ensuring data security and privacy while integrating technology into the supply chain is paramount for maintaining trust among customers, consumers, and employees. This entails good understanding of use cases, minimizing data exchange at interfaces, encrypting information, and diligent adherence to security standards such as ISO 27001. At Lipton, we follow guidelines by our Chief Information Security Officer and ensure security via Microsoft Azure cloud. Cloud hosting maintains robust security levels, with alerts and audits for deviations. On-premises servers are internet-restricted, and third-party access occurs through virtual machines with limited reach, post-NDA signing and regulatory compliance. Data security remains a cornerstone of our operations.