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BW Businessworld

Demand For Supply

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A discussion thread on a famous MBA forum finds a concerned student posing a succinct and pertinent question: Why aren't there enough enthusiasts for Supply Chain Management (SCM) as compared to Finance and Marketing? His query isn’t voiced in isolation since it is only a part of the chorus of perplexed, conflicted and curious opinions on the prospect of opting for supply chain management as a career option,  that populate the webpage.  Even as someone with ‘vision’ elaborates on the specificities of supply chain profiles being offered at top league B-schools, explaining why the subject itself enamours few is a matter beyond his ambit of expertise, presumably.

The fact that SCM isn’t quite the most appealing industry from neither a recruitment perspective nor the top tier attraction for the best B-schools in India is not news to companies such as DHL who are stalwarts in this sector. However, with the idea of ingratiating students to take up roles in the field of SCM and logistics, DHL Supply Chain, in collaboration with IIT Mumbai, launched a white paper’ contest among some of the B-schools in India and Dubai —Narsee Monjee Institute Of Management Studies (NMIMS), SP Jain, Wellingkar, BITS Pilani, among others —towards the end of February this year. “One of our initiatives was to make students aware about the complexities of the supply chain and create excitement so that we can get the best students into our industry as well,” explains Prakash Rochlani, VP, Business Development - India, South Asia and Southeast Asia at DHL Supply Chain who hopes to make this exercise an annual event and expand the circle of participating b-schools successively.

The white papers presented were on the auto, retail and life sciences sectors and the winning team from S.P Jain School of Global Management, Dubai (comprising R. Sriram, Vivek Mehta, Srikanth Palle and Hari Babu), studied the current supply chain models being followed by the Indian e-commerce industry. “To understand the issues faced by the industry, we interviewed experts from the e-commerce industry and then evaluated best practices in supply chain followed across the world. Finally we conducted a survey with 250 respondents to understand customer needs and futuristic expectations,” say the members of the winning team. 

Their report goes on to establish how the growth in tier II and tier III cities in India for ecommerce is phenomenal and since there is still a large portion of the market still untapped the opportunity is ripe for SCM and logistics players. “Development of strategies and plans for local/international sourcing, e-procurement strategies and leveraging third party logistic partners for efficiency and profits,” is one of the chief recommendations by the students of S.P Jain when it comes to supply chain optimisation.

The E-volutionary Chain

At DHL, the supply chain division is paying attention to the exponential boom in e-commerce with a “dedicated amount of sizeable investment which will go into IT for a complete e-commerce supply chain network which will be ready in the next 6-7,” says Rochlani. The e-commerce industry in India is still in a mushrooming stage. Nevertheless the revenue is targeted at Rs 25,000 crore in next three years from the current figure of Rs 5,000 crore. “Earlier SCM was manageable, but with the boom in e-commerce, businesses are growing 20-30 per cent YoY: small businesses which were 300 million dollar are now over a billion 1.5 billion in 5 years. Therefore, supply chain is no longer just about simple warehousing and transportation; there are a lot of things that get added to it such as demand planning, supply planning , inventory and order management., forecasting,”  Rochlani continues.

DHl’s sister concern Blue Dart has been touching millions of households in India, every month,  but the company is in the process of developing a strategy on how to bring the whole end to end supply chain closer: right from warehousing to postponing customisation into the distribution centre, and improving packaging.  Even with the steady mushrooming of dedicated e-commerce logistics players such as Delhivery, and the relatively new ZotDot, Rochlani is militant in advocating that the “market requires a large mnc player who can bring the best of international technology.” To substantiate his point Rochlani cites the example of Flipkart: “They have invested in their own supply chain but then are experiencing a cash crunch; where do they invest in the front end or back end? We want to take care of their logistics (ideally) so that they can focus on their core competencies of front end merchandising and front end marketing and spend on that instead of training people for supply chain.”

Towards the end of last year DHL made a public announcement stating how the company plans to invest close to 100 million euros in India across multiple operations from warehouse automation, training and development to transportation which would include OEMs bringing new vehicles into the market which will be GPRS enabled. “Modern retailers have peculiar demands. With GST coming in hopefully in the next 2 years will lead to a lot of consolidation in supply chain as well, says Rochlani. Earlier this year PwC published a survey report titled, Next-generation Supply Chains-Efficient, fast and tailored, which states that leading companies reap competitive advantage from managing their supply chains as a strategic asset and hence supply chains are significantly going to impact bottomlines and drive growth. Traditional supply chains will change dramatically in the next 24-36 months, Rochlani predicts which is why DHL is investing ahead of the curve in state of the art multi user distribution centres(part of the 100 million euros investment).

From Curricula To Career
In addition to a cash prize, the winners of DHL’s whitepaper contest will be offered a chance to be a part of the training programmes at DHL. The company is hiring 18 management trainees for the supply chain division, of whom about 12 have already been hired from colleges such as NITIE and Delhi College of Engineering (DCE). “With the evolution of modern retail, DHL is expanding the retail sector in a big way: creating supply chains for them is  big opportunity for us and we are recruiting a lot of people —  64 per cent of the e-commerce buyers are less than 34 years old so we need younger people, fresh graduates,” explains Rochlani. At DHL, students can look for roles in their lead logistics programme(LLP) working on modernising supply chains for the first 2-3 years and then explore wider roles within the organisation.

According to Vidhu Shekhar Jha, Professor in Strategy and Operations Management at Lal Bahadur Shastri Institute of Management, “Most of the business schools in India are offering an elective course on Supply Chain Management in their curriculum. Many Universities in USA, UK, Australia and Newzealand and other foreign countries are also offering Bachelors and Masters Programs in Supply Chain Management as well as many universities and Institutions in India as well as abroad give doctoral programs (Ph.D.).”  While ISB and IIM Calcutta have a certificate course and advanced programme in SCM(respectively), the subject  is starting to become a part of the core MBA curriculum as well, as is the case with NMIMS, Rochlani points out.

While as per Jha, the corporate roles, a student specialising in SCM can look forward to range from SCM Consultant, Business Process Consultant, Enterprise Resource Planning (ERP) Consultant, in Purchasing Function, New Product Development, Global Sourcing, Inventory control, Total Quality Management processes, the students from S.P. Jain Dubai  are optimistic about the opportunity to work as supply chain analysts. “The use of analytics in supply chain will drive the future of this industry. As a manager in supply chain analytics, you should be responsible for gathering data, analysing the performance and developing recommendations which support SCM planning and operations.  What is essential in this role is to decipher business knowledge behind the numbers. Know-how of various statistics packages like SPSS, MiniTab will be an added advantage for managing supply chain analytics,” they believe.

In India Automotive and hardware IT industry have a n evolved supply chain ; generally that is the trend world over. This is followed by the consumer industry which starts replicating these aspects into their supply chain with the healthcare industry catching up rapidly.  The discussion on the MBA platform, with students to glean a clearer picture of a career in SCM calls for a stronger nexus between industry demands and the expectations of management graduates.