Partnering with Honda at Supply Chain World Conference in Singapore: a lot to learn about high-growth markets
The gathering was a mix of industry practitioners in supply chain from the high-growth markets of India, China, SE Asia and South Africa; as well as the developed markets of North America, Europe and Japan. I have termed these as "high-growth" markets.... since I could realize in the Conference that these "emerging" economies have actually emerged and evolved their unique strategies. We were invited to present on the vehicle supply chain à order and distribution management improvements carried out in India market, experiencing double-digit growth. The topic specifically delineated on the challenges faced in these markets and the supply chain strategies required for implementing late-customization, inventory optimization and reducing replenishment lead times. What was most interesting, were the types of questions asked by the audience, which reflected the nature of problems faced in their organizations.
There were questions on strategies which could be adopted for developing supply chain systems which would enable inventories to be slashed across the pipeline and in the stockyards of the channels, without allowing their channels to indulge in trading among themselves. These issues clearly demonstrated the prime focus on inventory reduction among the manufacturers in these high-growth markets. But what was also evident was the constraint among these manufacturers who would not take the benefit of trade among their dealers/ distributors to free up tons of inventory locked in individual dealer's stockyards. Unlike the developed markets where such practices are welcome by manufacturers, in these "high-growth" markets the perception that "allowing such operations is likely to reduce the manufacturer's control over these dealers" prevents accepting such dealer trade practices.
Another notable observation was the focus on reducing replenishment lead times across the supply chain through visibility. Though it is a no-brainer that visibility would reduce planning lead-times and slash supply and delivery lead-times, but was came out as an "outlier" observation was the questions on KPIs and risk-management methodologies which would enable developing early warnings for delays, escalations and exigency costs. What executives in supply chain were scouting for, were quick-deployable low-cost solutions which would enable them watch systems from remote and take decisions as early as possible in the problem-life-cycle.
It is evident, that the manufacturers and supply chain managers of these markets are not taken-away by the stupendous growth, but are more cautious that they don't fall into the trap which their counterparts in the developed markets ignored. They are still focused on inventories and replenishment lead times, to maintain the lean structure that they would like to retain. The only item they have to learn is sense the growing maturity among their channel partners and enable them support these goals, by giving greater autonomy; though it may be perceived as loosening their "traditional" grip on these partners
