E-Visible Magazine 7th Edition August 2021

E-VISSIuBLpEpSlUyPPCLYhCaHiAnINMMAaGgAaZIzNiEnAeUGAUSpTr2il0221021 11

2 E-VISIBLE SUPPLY CHAIN MAGAZINE AUGUST 2021

E-VISIBLE SUPPLY CHAIN MAGAZINE AUGUST 2021 3

THE IMPORTANCE The gulf that separates industry and academia in Sri
Lanka is quite profound in many fields. While some
OF SUPPLY CHAIN practitioners often believe theories have little val-
COLLABORATION ue in the real-world, some academics lament at the
BETWEEN INDUSTRY reluctance of practitioners in supporting academic
research and education. This is not so different in
AND ACADEMIA. the domains of operations and supply chains. Many
developed countries have a thriving relationship be-
?WHAT CAN THE INDUSTRY OFFER tween universities and the industry. This provides a
symbiotic relationship that supports growth of the
national economy. The best evidence comes from the
most cited scientific journal article in supply chain
management which was in fact supported by data
from Walmart, Proctor & Gamble and Hewlett-Pack-
ard. It’s high time to build such a culture in Sri Lanka
and that requires both academics and practitioners
to think with a fresh mind.

Industry is the playing field where many problems arise. In a rapidly globalizing and dynamic business environment, there is little time to learn new
theories and to stay on top of the state-of-the-art practices. Practitioners are driven by the expectation of optimizing performance and increasing
profits. Numerous contextual applications as well as experience and intuition play a prime role in achieving these expectations. Having said that,
companies have numerous problems that they would love to solve since the sky’s the limit. Some problems that are less urgent often get pushed
into the backburner. While capacity often hinders solving all problems, solutions ostensibly lead to maximizing profits. Questions such as, How
much inventory to hold? How many units to manufacture and how many units to outsource? When to rollout promotions and how to build up
inventory for that? What is the ideal forecasting model for a specific product family?, are frequently raised.

?WHAT ACADEMIA CAN OFFER

Academics are often blessed with theoretical expertise. Generally, university academics tend to be bright sparks and most of them have obtained
qualifications in top-ranked universities around the globe. Something what’s seldom known is that most academics with foreign PhDs have often
collaborated very successfully with the industry while overseas. This has provided them comprehension on the sensitivity of data and how to ef-
fectively handle them. Moreover, many academics have an international network with connections spanning across the globe. This often provides
them a solid base of the state-of-the-art. For instance, University of Moratuwa has academics with a large international network and background
in implementing new technologies such as artificial intelligence and machine learning, internet of things, blockchain technology, smart production
and various other technologies that constitute Industry 4.0.

BENEFITS OF DEVELOPING A SYMBIOTIC RELATIONSHIP.

Combining these two sides of the coin provides ample opportunities. Companies can often engage with bright minds in the university system to
solve their problems. This also provides an opportunity to train potential future recruits especially when getting undergraduate or postgraduate
students connected with these projects. It also outsources companies’ key pain points to an external team equipped with the skills to solve it with-
out bothering the company’s internal staff and their day-to-day work.
If the outcome of the collaboration is published in public domain, in one form or the other, the company may get good publicity. Many international
companies have become part of famous case studies and journal articles published in academic literature. This is not just limited to developed
countries. If the company is reluctant to put their name out there, the company can opt to use a pseudonym to maintain anonymity. This is some-
thing that I have done regularly with several collaborative projects.

?HOW TO GET THERE

One of the common complaints we get when we discuss a collaboration relates to data sensitivity. Many corporates seem to assume that academics
will leak their data or make their data publicly available. This is far from the truth, although there are exceptions. Especially in our team, we would
seek the consent of the collaborative firm if research outcomes are to be published. Moreover, we always tend to transform the data before we
publish any scientific papers so that sensitive data cannot be deciphered. For instance, if the stock count is 100, we would multiply that by a random
number to scale up or down the count. If the company expects further discretion, we may transform the value using logarithms.

As a developing country, Sri Lanka occasionally has a trust deficit where one cannot always expect either party to hold each end of the bargain.
While developing an ideal climate based on mutual trust is desirable, non-disclosure agreements (NDAs) are often a valuable option in ensuring
that sensitive data is maintained discreetly. This also supports the timely transfer of the pre-agreed deliverables between both parties.
Some companies have a misguided impression that they can pick the brains of university academics for free or at a cheap rate. This idea should
also be shelved. Any collaboration needs to be mutually beneficial in order for them to be successful. Deliverables being directly connected to the
transactions is a good way to ensure each side delivers their end of the bargain.

1 E-VISIBLE SUPPLY CHAIN MAGAZINE AUGUST 2021

The purpose of this article is to highlight that both academics and industry practi-
tioners need to take more effort to work with one another in developing symbiotic
relationships. It is imperative that this is mutually benefcial. Academics can apply their
expertise, knowhow, and international network in solving a complex problem while
companies would support the growth of local universities as well as students while
solving its extant problems. Sri Lanka would be hugely benefited if we can connect
academia and industry to work more closely by bridging the existing gulf.

DR. NILES PERERA

Senior Lecturer
Department of Transport & Logistics Management

Faculty of Engineering
University of Moratuwa

[email protected]

E-VISIBLE SUPPLY CHAIN MAGAZINE AUGUST 2021 2

The editor of the magazine sat down with In view of such losses, an emergency board meeting was convened in
Mr. Fazal who is the Managing Director which ALPS represented by Saeed Amidi; NDB represented by Steven En-
of American Premium Holdings and the derby ; Anura Kumarasinghe represented by Pride International (Pvt) Ltd
Chairman of the Trend group to discover and myself participated. The board of directors requested me to take full
his journey of success as an entrepreneur control of the management of the company.
and the challenges which he faced during I requested that the interest accumulated against the NDB loan of LKR
the COVID-19 pandemic. 20-mn be waived off if I were to take over, to which the NDB board direc-
tor Steven Enderby and others unanimously agreed. From that point of
Q COULD YOU LET US KNOW YOUR BACKGROUND time onwards, I took over the operations and made a turnaround, and,
within a year, covered the losses and thereafter the company emerged as
BEFORE YOU VENTURED OUT INTO FOUNDING a profitable entity.
AMERICAN WATER?
Q WHAT DOES YOUR TYPICAL WORKING DAY
A After completing my studies in 1975 at age seventeen, I joined
LOOK LIKE?
my dad’s business, which fell within the First Ten logistics companies
in Sri Lanka, and which operated a fleet of 60-trucks in the market. A I wake up daily at 5-am, offer my prayers, and move out for a
Key customers included Lever Brothers, BCC, and Ceylon Petroleum
Corporation, now CEYPETCO. jog, and thereafter I’m in office by 9-am, setting an example in punctual-
Under the government’s open economic policy in July, 1977, in my first ity to the staff members, and which practice has continued over the last
import order under LC of 100-Nos electronic radios via air freight from 40-years.
Singapore, I ignorantly stated the incorrect HS code, incurring a loss Every Monday morning a meeting is held with the HODs for 2-hours to
of LKR 50K. My next order for 200-pieces earned a profit of LKR 150K. discuss the achievement versus that which are planned in the preceding
After 1980, our country developed to receive containerized cargo, week and the plan for the forthcoming week, where the short-term plan
which was of great benefit to me in that of a tremendous saving on the would help me to achieve my long-term company goals and objectives.
freight charge compared with the airfreight charge I was paying. The Based on the outcome of such meetings, we as a team make strategic
saving of approximately 75% on freight significantly boosted my profit. decisions with the involvement of the HODs.
Also, shipment time was delayed by only a week compared with one I also make a personal visit to the factories on occasion, and, when re-
day via airfreight. quired, discuss matters of importance with the respective managers.
In 1985, I focused directly on trading and ventured into the garment
export industry, establishing trading offices in Hong Kong, Singapore, Q WHAT ARE SOME OF THE KEY TRAITS YOU LOOK
and a buying office in New York in the U.S., manned by our local staff.
FOR IN NEW HIRES?

In 1986, I purchased a 180-acre tea plantation called Bunyan Estate A Innovative inputs, new thinking out-of-the-box, and
abutting the Maskeliya dam in the Maskeliya district. I found 90% of the
plantation was some 125-years old, while only 10% had been replant- commitment to work are key features which would contrib-
ed, producing a yield of 100,000kg per annum. At present, 80% has ute towards greater growth. I expect punctuality at atten-
been replanted and the annual yield has been increased to 600,000kg. dance and at appointments, maintenance of work ethics
and professionalism, would signify an organized and disci-
Q WHAT WERE THE ADVERSITIES IN THE INITIAL plined life.
Professionalism in carrying out one’s duties portrays the
STAGES OF YOUR COMPANY AND HOW DID YOU OVER- quality of education and experience one has gained. Well
COME THEM? attired and good manners reflect the degree of one’s back-
ground at school and at home. Good health and cleanliness
A At American Premium, it was the only company in which we reveal a sound body and mind, which qualities contribute
towards concentration at work. Honesty, loyalty, and dedi-
lost some LKR 20 million within two years in 1996/98, in which the cation to work are essential ingredients. Finally, possessing
Americans and a local professional team managed the business, while a pleasing disposition towards seniors, peers and subordi-
at that time I was not directly involved. I proposed that I’m prepared to nates is vital.
quit the company and forgo my investment because of the high losses
which were being incurred by the American Liquid Packaging Systems,
Inc., (ALPS) management.

3 ENTREPRENEURSHIP

E-VISIBLE SUPPLY CHAIN MAGAZINE AUGUST 2021

MR MHM FAZAL

MANAGING DIRECTOR/CEO,
AMERICAN PREMIUM GROUP OF COMPANIES

Q HAS COVID-19 CHANGED THE WAY IN WHICH YOU

CONDUCT YOUR BUSINESS AND, IF SO, WHAT STEPS
HAVE YOU TAKEN TO MITIGATE IT?

A This development was an entirely new situation in corporate life.

With curfews and lockdowns affecting mobility, I took a positive step and
summoned the HODs on the following day.

I put forward such strategies on how to remain active with my HODs. Brain-
storming sessions evoked new ideas. It was urged amongst employees to
dispel negative vibes and look forward to meeting this obstacle as a chal-
lenge with a positive mindset. Curfew passes were procured for the team,
including for those in the plastic industry.

Factories continued with production, with workers boarded within its prem-
ises, and meals provided. It was decided not to close the factories but to
operate even at a protracted pace.

Operations, which were an essential service, ensured our local customer’s
products continued to be delivered at their doorsteps in excellence and to
their satisfaction without experiencing a state of being out-of-water.

Collections officers went about their rounds picking up payments from cus-
tomers, who also settled invoices via direct banking.

Q IN A COMPETITIVE MARKET, WHAT ADVICE

WOULD YOU GIVE ASPIRING ENTREPRENEURS TODAY?

A HODs should give solid leadership to their staff by being present and

create courage in them to face any setback. Take calculated risks as had been
done during this dangerous period in which no one got affected.Encourage-
ment and motivation of your team is essential to maintain commitment to
work by going that extra mile as against work-to-rule. Strike a balance be-
tween existing rules and commonsense in an emergency. Vertical and hor-
izontal communication is a key factor not only with HODs but also those at
the grassroots level who will feel valued and be motivated to work when
their ideas are welcomed and considered important. Maintain sustainability
of the group under any circumstances, as experienced during this Covid-19
pandemic period. Work with integrity and transparency, while adhering to
confidentiality where required. Take calculated risks via innovation and cre-
ativity. All employees should work as team but in different hierarchies within
the same team, where team effort supersedes individual effort, and thereby,
as a company, we achieve long term effects. We should work as a team irre-
spective of gender discrimination or racial disparity.

ENTREPRENEURSHIP 4

E-VISIBLE SUPPLY CHAIN MAGAZINE AUGUST 2021

5 COVID BROUGHT US LOCKDOWNS,
UNCERTAINTY, MONTHS OF WAITING,
VACCINES, LONG LINES, AND REPEAT

TALYA FERNANDO

B.Sc.(Hons), MBA,
Manager Strategic Planning
Trade Promoters (Pvt) Limited

E-VISIBLE SUPPLY CHAIN MAGAZINE AUGUST 2021

WE NEED 6

SUPPLY CHAIN
IMMUNITY

Our world is continually facing unpredictable threats from climate change, cyber-attacks, terrorism and now
pandemics.
Immunity is defined by Merriam-Webster in their dictionary as “a condition of being able to resist a particular
disease especially through preventing development of a pathogenic microorganism or by counteracting the
effects of its products.”
Dr. Rob Handfield (PhD), Bank of America Distinguished Professor of Supply Chain Management at North
Carolina State University, USA relates the concept of immunity to Supply Chain. He states that a Supply Chain
system has to be built to withstand and bounce forward from a threat or disruption. In the event of future
disruptions, we need to learn how to prevent failures of the supply chain process. He advises “what we need
is a plan for ongoing and persistent immunity.”

PLANNING FOR IMMUNITY

Trade Promoters Pvt Limited (TPL) is the sole authorized distributor for global entities Cummins Inc. (diesel generators and
engines for marine, construction and industrial applications) for Sri Lanka and the Maldives, and Schindler (elevators and
escalators) for Sri Lanka.
Having been in business since 1976, the company has navigated through a 30-year conflict and economic downturns due
to financial crises and the COVID-19 pandemic.
We have come to learn that our foundation must be strong, but flexible. We not only have to be resilient, but also immune.

VACCINE DOSE 1: THE SUPPLY CHAIN TEAM

This team is a vital cog in the business wheel. Managing time, cost and quality is what is expected from them. The ideal
team should be able to manage relationships with stakeholders successfully. The team should have the skill set to deliver
these expectations. Performance can be measured by setting relevant Key Performance Indicators (KPIs).

VACCINE DOSE 2: TECHNOLOGY

Technology can help proactively manage inventory and support strategic sourcing. Real-time information can be made
available irrespective of where you are. This has become particularly important with our expansion into the Maldives mar-
ket, as well as during the COVID-19 pandemic. ERP software can help streamline processes and increase synergy between
departments. We use SAP Business One, ERP software to facilitate our business.
Booster Vaccine: Preventing recurrence
We use KPIs to drive our strategic decisions and conduct regular reviews to ensure we meet our targets and achieve our
business objectives. Having established the ISO 9001:2015 Quality Management System at TPL, we ensure that potential
risks are reviewed, and risk mitigation strategies are implemented.

Establishing immunity is a journey, and no strategy is foolproof. Building persistent supply chain immunity will help us
navigate future disruptions and ensure business continuity.

PREVENTION IS BETTER THAN CURE.
STAY SAFE.

E-VISIBLE SUPPLY CHAIN MAGAZINE AUGUST 2021

THE NEW NORMAL
AND LEAN SUPPLY CHAINS.

RUVINI THARANGA

MBA, ESBM, GDPSM, HDQ&P
Part-time Lecture & trainer
Supply Chain Practitioner

The second is to move from a conventional system to a digital support
system. The supply chain operation needs to be highly digitized for the
future, further flexibility and strong integration were required.

7 Over the past 40 years, we have seen dramatic growth in many orga- Working together with customers and suppliers of the organization
nizations’ supply chains and how it has become a more complex and eliminates the supply chain waste. The collaboration increases the
complicated process and makes it more difficult to manage. In orga- visibility of the supply chain process among the stakeholders and de-
nizations, the Senior Management and Finance managers are always livers an efficient service. Further Electronic Data Interchange, e-com-
putting pressure on Logistics and Supply Chain Managers by chanting merce, efficient customer response, quick response system, collabora-
the mantra cost-cutting. They have been very vigilant on the cost fac- tive planning, forecasting, and replenishment enhanced the efficiency
tor of the logistics operation. The last four decades have seen supply of the supply chain. Among all the others the Vendor Managed Inven-
chain management change rapidly mainly with the introduction of tory (VMI) was the most vigorous tool used to achieve leanness in the
two paradigms such as Lean Supply Chain Management and Agile supply chain process. The Vendor Management Inventory (VMI) is a
Supply Chain. system where the suppliers were given the authority to manage the
inventory of customers with the agreed stock levels at the customer
In 2020, around the world the entire supply chain got disrupted due premises. In the Sri Lankan context seldomly executing the VMI even
to COVID – 19. The management around the world started to rethink through the system can support maintaining smooth and effective
their supply chain strategies and their stability and reliability with supply chain operations. With the support of VMI supply chain man-
the uncertain future. As the pandemic crisis intensified the countries agers can control the inventory however VMI systems require a sub-
throughout the world suddenly announced lockdowns which is a stantial amount of capital investment, however in the long term, it is
new experience to the supply chains. The sudden decisions taken by an effective decision and a very good investment to reduce the Inven-
the governments of numerous countries put a stop to the ever-active tory Holding Cost.
supply chain and it took a few days to arrange security clearance for
essential services and arrange the required employees to get back The Integrated Supply Chain removes the barriers between customer
to their organization. Many manufacturers closed their production and supplier and strengthens the relationship. Further, this is a great
operation completely and some reduced to minimum capacity. The way to increase the productivity and the efficiency of the Supply Chain
business process had to be re-engineered as to which operations operation because the integration brings as many as possible links in
could be carried out from home and which operations had to be car- the Supply Chain to a closer working relationship with each other. The
ried out at the organization. The necessary infrastructure had to be Supply Chain contains activities such as ordering and receiving materi-
mobilized within no time. The organizations had to survive under als needed for manufacturing and storing, distribution, and delivering
this new normal condition more than the normal situation therefore to the customers. Taking the Supply Chain process partially and trying
the cost reduction became the most essential feature in the busi- to improve each unit may not be significant when comparing with the
ness operation to sustain in the market and the supply chain was improvement of the integrated operation as a whole. This will encour-
playing the major role in these organizations. In this disruption situ- age improved response time, production time and reduce the cost and
ation, two major objectives had to be considered, the first ensuring waste.
the sustainability of operations, the resources, and the safety and Furthermore, to establish a lean culture and integrated supply chain
well-being of the employees. management in the supply chain system: training plays a vital and es-
sential position. Because with the introduction of new computer sys-
EE--VVISISIBIBLLEESSUUPPPPLLYYCCHHAAININMMAAGGAAZZININEEAAUUGGUUSSTT22002211 tems the processes have been streamlined and automated and work
teams are reorganized and redeployed. Therefore, the management
of the organization must ensure the job security of existing employ-
ees, because with the implementation of new systems some workers
feel insecure about their jobs. The reason for this is because they feel
the employees might try to destroy the setup or may not cooperate to
achieve the set objectives, which will generate an immense monetary
loss as well as damage to the organization’s reputation. Employees
must understand that change is inevitable.

Tharanga - NIBM

NFTS IN LOGISTICS
Redefining Transparency and Security

in the Industry

Earlier in March this year Jack Dors- NFTs also have an inherent capa-
ey’s first ever tweet sold for 2.9$ bility to be programmed with more
Million dollars to a Malaysian Busi- complex functions, for example: an
nessman. At first glance this may NFT can be programmed to initiate
seem almost like fiction, how does transferring ownership once certain
one sell a tweet and why? What payment conditions have been met
does this mean for Businesses in or a certain time has passed. Unlike
general? The answer is the block- banking institutions there is no fear
chain and an emerging phenom- of human error or intermediate fees
enon associated with blockchains and parties, the process is more di-
that has the potential to reshape rect between the involved parties
businesses and supply chains for and there is more information par-
decades to come: NFTs. ity.

VIKASHAN MURUGANANDHAN Operations and Logistics Major MELWA

You have probably heard of the Blockchain but what’s the deal with Transparency around high value goods have an additional level of security
an NFT? when pegged to an NFT. A business that creates an NFT along with every
batch or unit it produces can electronically update details of its produc-
NFTs stand for Non-Fungible Tokens, ‘Non-Fungible’ meaning some- tion and provide this information to its customers. The blockchain en-
thing that is irreplaceable and has a unique identity, The Mona Lisa is sures that customers can be assured of the product’s authenticity and if it
Non-Fungible while a Nike T-shirt is fungible i.e there are many similar has been tampered with. With a clear record of the products movement
T-shirts and a person may not require a specific serialized T-shirt. ‘To- this may become the norm to production processes.
ken’ meaning a digital certificate that directly corresponds or refers to Much unlike QR codes, serial numbers or barcodes issued for either raw
the item associated with the NFT. In the case of the 2.9 Million dollar materials or finished goods in a supply chain, NFTs have significantly less
Jack Dorsey tweet, the Malaysian Businessman who bought it was giv- costs associated with them. Besides the initial setup costs in the organi-
en a digital certificate which signified that he was now the new ‘owner’ zation there are no licensing costs or high server maintenance costs. In
of the tweet. Because NFTs are based on Blockchain tech this trans- addition, the blockchain cannot be hacked giving enterprises the high-
action is decentralized and on the public ledger, this transaction has end security expected of them.
been publicly authenticated by being recorded and stored on multiple As business professionals we have an invested interest to future-proof
computers participating in the Blockchain. Unlike the traditional system our businesses and ourselves in the face of disruptive technologies. With
of maintaining a centralized server to keep a record of something, NFTs new standards for authentication, privacy and security the expectations
carry with them a rather unique property of safety and authenticity. of individuals involved in the field become radically different and compa-
The decentralized nature of the Blockchain means that ownership of nies that are able to adapt to these changes set themselves apart from
an NFT can’t be stolen or changed illegally without it being manipu- the competition. The scope of NFTs are only expected to grow exponen-
lated on every single computer in the Blockchain, on the other hand a tially and with it our understanding of the Logistics industry, the only re-
physical record can be forged or a bank system can be hacked. Where maining question is how quickly this will happen and if we are ready to
an NFT goes further than the standard Blockchain is that the token can embrace this change.
be programmed with additional functions opening up various appli-
cations, for example: an NFT can be programmed in such a way that
everytime it is transferred the original creator is given a percentage of
that transaction.

So what does digital art have to do with the Supply Chain industry? E-VISIBLE SUPPLY CHAIN MAGAZINE AUGUST 2021 8
While currently NFTs are used to transfer ownership of art, at its core
it is a decentralized and transparent digital authentication system. The
possibilities and potential applications for the technology in supply
chains are limitless and grow by the day NFTs can be assigned to Let-
ters of Credit and programmed to release funds depending on terms
negotiated by the involved parties. Traditionally this process would in-
volve multiple banks and regional institutions but by leveraging the LCs
against the Blockchain, the uncertainty of dealing with unfamiliar par-
ties is mitigated by the transparent and decentralized public ledger of
transactions Capital Equipment can have NFTs created and pegged to
them. With an NFT record it becomes transparent as to who and where
this equipment has been transferred. It also can record other details
around manufacturing, dispatches and in the case of second-hand
equipment without relying on another system of authentication which
can be tampered with. NFTs prove to be a “better” middleman than
traditional institutions because of the removal of the human element.

There is no argument that global travel Out of the 5 M’s engaged in the aircraft main- SUPPLY CHAIN
tenance activity, the material component is RESILIENCE
is a hard hit of the COVID outbreak where significant since the maintenance cost per
the airline industry is at the forefront. The aircraft is about $3.3M (IATA IMTG) where- UNDER A VUCA
virus outbreaks are no surprise to this in- in which direct material cost of in-house WORLD
dustry where contingency plans are de- maintenance (Subcontracted maintenance
signed as part of the business continuity excluded) is around 59%. Supply Chain Man- A REVIEW OF THE
agenda. But a pandemic at this scale is agement plays a crucial role in this industry COMMERCIAL
something that airlines have never expe- not only because of its contribution towards AIRLINE
rienced since the evolution of commercial the direct costs and but also due to its’ stra- INDUSTRY AND
aviation. tegic importance in making the operation AIRCRAFT
In 2019, IATA forecasted a 3.8% YOY CAGR resilient to external forces. This article aims MAINTENANCE
for air travel up to 2039 but slumped in to briefly discuss Aircraft Maintenance, its’ SUPPLY CHAIN
2020 owing to COVID. At the peak, 4.5bil- Supply Chain, how Supply Chain resilience
lion people about 60% of the global popu- helps airlines to beat the VUCA world and to An aircraft consists of millions of parts
lation have travelled in one of the 128,000 share some success stories from the context (e.g., An Airbus A380 aircraft compris-
aircraft operated daily. The adjusted CAGR of Emirates Airline. es 4M parts) ranging from rivets to en-
forecast is 3.2% with a delay of two years. gines and costs airlines in keeping an
Most importantly, the industry rebound is AIRCRAFT MAINTENANCE adequate inventory (Approx. $300M
not expected at least until 2024. The com- SUPPLY CHAIN AND COVID IMPACT per hull) to meet planned and un-
mercial airline industry has always been Aircraft maintenance involves the upkeep planned demands. Most of the planned
operating at low-profit levels with a world- of the aircraft through various maintenance materials are make-to-stock products
wide EBITDA margin of 5-9% irrespective programmes. The maintenance tasks are de- while others can be make-to-order
of the airlines are state-owned or privately rived based on the number of flight cycles, produces where the supply lead-times
held. The grounding of aircraft has reversed flight hours (FH) or periods. Predominantly, can be extremely high. Before an air-
the growth plans of the airlines. These as- aircraft maintenance is broken down into craft type enters the airline, a careful
set-heavy companies are now looking at two segments - “Line Maintenance” and review is executed by the supply chain
numerous ways to cut costs, optimise the “Base Maintenance”. The former involves trades to provide a balanced inventory
operation, preserve cash, and remain com- maintaining the aircraft on the tarmac (e.g., that meets the airline’s maintenance
petitive until the game resumes. Transit Checks – after each flight cycle) while plans and dispatch-reliability. The Rec-
the latter involves carrying out planned ac- ommended Spare Parts List provided
The sheer amount of primary and support tivity inside an aircraft hangar (e.g., A and by the manufacturers, information
activities that go into operating an airline C Checks of Airbus A380 are carried out at gathered from other carriers operat-
leads to a cobweb of Supply Chains oper- 2000FH and 36months/18000FH intervals ing the same fleet and data obtained
ating within and outside while the airlines respectively). Apart from the planned mainte from Industry Experts are analysed in
themselves are performing as a cogwheel nance activities, aircraft undergo repairs and detail. Usually, the supply chain trades
of the global economy. Out of many sup- modifications based on airworthiness direc- maintain a fair balance of the inventory,
port activities that contribute to an air- tives, manufacturer recommendations and availability, and cost by employing var-
line’s operations equation, fleet mainte- airline requirements. A maintenance pro- ious supply chain planning/operation
nance is significant due to its’ strategic gramme consists of various inputs - mainly tools. However,
importance to the business of meeting the methods, resources, and materials. Orches-
regulatory responsibility and having a safe, trating these inputs and adhering to the
reliable, and efficient aircraft operation. In plan is a complex symphony even during a
concept, the maintenance of aircraft is no lean period. It had been mostly the material
different to the other assets, but the com- supply chains that have been attributed for
plexity, cost and governance make all the disruptions to the plans. Typically, a large/
difference. Primarily, aircraft maintenance full-service airline has functional depart-
is a responsibility of the airline while the ments to oversee various supply chain trades
accomplishment can be achieved through such as planning, provisioning, procurement,
in-house or outsourced Maintenance, Re- contracting, inventory management, logis-
pair and Overhaul (MRO) organisations. tics, and warehousing while smaller/bud-
The MRO setup is a strategic decision for get airlines choose to have a leaner/matrix
structure. Generally, both the models are
9 an airline due to the infrastructure, cost, effective in their context and aim to Plan,
capacity, and other considerations where Source, Make and Deliver by having an effec-
Supply Chain Management considerations tive supply chain framework from upstream
are also pivotal. The larger airlines prefer to downstream.
to keep the major maintenance activities
within the organisation while outsourcing
specific maintenance or other tasks.

E-VISIBLE SUPPLY CHAIN MAGAZINE AUGUST 2021

the unpreceded times of COVID have de- The parked aircraft is still be maintained vative and being prepared made them cope
graded the performance of the supply to avoid corrosions, to maintain reliability/ with the situation better than the others
chains due to factors beyond the control of operability of aircraft systems and to make and bounce back fast. For market leaders,
these organisations. the return to service as effective as possi- resilience is not just about managing the
ble. Usually, airlines do keep a few aircraft risk but being competitive at the same time.
In contrary to a well-organized supply chain, parked during lull periods, but the post- Within a few weeks of the total lockdown in
a known exception exists. It is the Aircraft on COVID era is outrageous and created an 2020, a few airlines have realised the vul-
Ground (AOG) scenario where a technical additional workload to the aircraft mainte- nerability and have come up with innova-
issue often resulting in immediate sourcing nance supply chains. tive solutions and to minimize the loss and
and supply of aircraft parts to the geograph- SUPPLY CHAIN RESILIENCE IN to introduce new revenue streams.
ic location where the aircraft is grounded. A VUCA WORLD AND SUCCESS Emirates Airline (EK) was at the forefront in
Usually, the aircraft operating stations are STORY OF EMIRATES this game and exemplified the industry as
maintained with an inventory of No-Go the largest international airline in the world.
items. If the required material is not avail- It is difficult to judge when you operate in EK was one of the first airlines to introduce
able, the spare parts pooling arrangements unknown territory and when you have many passenger freighters (using passenger air-
(IATP), borrows, exchanges or robbing from unknown unknowns. The situation with craft to carry cargo in aircraft cabins) and
donor aircraft are used in addition to sourc- COVID is no different where the organisa- mini-freighters (EK converted 10 Boeing
ing. However, an AOG is a very costly affair tions had to pilot through dark clouds where 777-300ER aircraft to makeshift freighters)
to an airline due to the scale of disruption the Volatility, Uncertainty, Complexity and thus providing increased freight options in
it creates not limited to customer compen- Ambiguity (VUCA) was fearsome. Initially, 135 freighter routes. Also, the fast-tracking
sation, crew management, AOG supplies, lo- industries were ambiguous about the situ- of customer refunds, introducing free insur-
gistics, lost revenue, and the knock-on effect ation since there was no precedence or not ance schemes, joining the global vaccines
on the airline schedules. known about the consequences of disrup- distribution program, and using new tech-
A well-planned supply chain network that tion at this scale. Then the companies start- nology to maintain hygiene in the aircraft
employs AOG sourcing options, logistics, in- ed innovating and challenging the tradition- assured travellers and encouraged global
ventory management and contingency plan- al mindsets by experimenting. This helped travel to pick up faster. The most debunked
ning often helps airlines to combat these the organisations to come into a realisation Airbus A380 operation has also resumed
disruptions to a greater extent (An AOG inci- of the VUCA and learned how to predict and after a few months and being operated to
dent is estimated to cost about USD 100,000 react in worsening conditions having been more than 11 destinations at this time out
an hour). The AOG handling is also impacted under the clouds for over a year. of the 40 destinations operated before
by COVID due to restrictions in sourcing, in- Supply Chain Resilience is rather an emerg- COVID.showing a strong resilience over the
creased response time and logistical bottle- ing concept and part of the risk manage- other players.
necks. ment strategy of an organisation that has
not been considered by some organisations VISUDDHA PIYATHILAKE
The golden objective of an airline is to mi- until 2020. The importance of this con-
nimise the ground time and maximise the cept is to have organisational readiness to Supply Chain Professional
flying time. However, COVID led to ground- face similar events in the future by having Emirates Airline
ing over 70% of the global fleet owing to responsiveness, efficiency, and recovery
cross-border travel restrictions and a slump mechanisms to get out of the situation and 10
in passenger volume. This necessitated long- to minimise the adverse effects. The sup-
term parking of the aircraft. The wide-body ply chains are known to have often faced
aircraft were worst affected due to the seat disruptions arising from situations like nat-
load factor and the slow rebounding of the ural perils, political turmoil, and terrorist
passenger volumes. The long-term parking attacks. McKinsey & Company in its’ report
of aircraft also demands certain climate con- on Risk, resilience, and rebalancing in glob-
ditions, not all the countries are gifted and al value chains (2020) highlights that there
adding to the cost over the lost revenue. are four types of shocks that can disrupt
Airlines are not relieved from their commit- operations and supply chains – Catastro-
ments to the financial institutions (e.g., les- phe, Disruptions, Unanticipated Disruptions
sors), regulatory bodies or the aircraft and Less-frequent disruptions (Outliers) and
maintenance plan while aircraft are in stor- states that the latter leads to a bigger threat
age. to the companies, as happened with COVID.
Resilience is the name of the game and the
trait that the organisations that steered
through COVID shocks have used in their de-
fence over the others. Being agile, inno

E-VISIBLE SUPPLY CHAIN MAGAZINE AUGUST 2021

Logistics & Services industry is among the evolving industries in the present world. Although the pace of development within the industry is less
compared to other industries such as Apparel, Construction & Finance, there are aggressive changes happening of which the drive towards digita-
lization is most significant. Most logistics and services organizations are taking the initiative to move towards digitalization beginning with the core
product they offer. Most Multinational organizations are now taking up a heftier challenge to change the strategy further, to expand into a fully
digitized end to end (E2E) logistics and services platform.
The fact that 3PL/4PL providers contribute to the highest market share of 58% in the industry, further highlights the opportunity for logistics and
services organizations to look at E2E expansion. Drawbacks of traditional methods adopted by 3PL/4PL providers show potential supply chain dis-
ruptions through high costs, human error, delay, poor information sharing, less transparency with stagnated improvement. This has increased the
attention towards Supply Chain Integration within the logistics and services industry.
The Concept of Supply Chain Integration (SCI) is a close derivative of the concept of supply chain uncertainty. It is a situation of failure to perform
appropriate decision making on supply chain activities. Many organizations attempt to reduce uncertainty in their operations by improving the
ability to obtain, filter and analyse information to facilitate decision making within or external to the supply chain. This can be elaborated through
the famous Michael Porter’s concept of value chain as a tool to disaggregate a firm into strategic stages with the purpose of value creation.
Thus, supply chain uncertainties that arise in various levels of value chain activi-
ties can be reduced by redesigning the operation processes to improve informa-
tion sharing with stakeholders. Thus, supply chain uncertainties that arise in var-
ious levels of value chain activities can be reduced by redesigning the operation
processes to improve information sharing with stakeholders.
From an effective procurement perspective there are a series of measures to
undertake in both the short and long term. Through conducting internal needs
analysis, conducting assessments of the supplier’s market, collecting supplier in-
formation, developing a sourcing/outsourcing strategy, negotiating with suppliers
and finalizing winning bids, and implementing a transition plan or contractual
supply chain improvement. While it is widely known that Business to business
(B2B) integration in logistics builds supplier relationships through collaboration,
current low levels of system interoperability continue to cause high investment
costs which have resulted in missing out on the potential benefits. It is important
for logistics and services organizations to strive towards a long-term stable plan
and adopt the right strategy, although it may involve investment costs on tech-
nology From a people, process & system excellence perspective in supply chain
integration, it is important to clearly define organizational structure, job descrip-
tions and performance management systems. Need for re-planning and coordi-
nating in terms of process mapping and streamlining to improve productivity and
optimum utilization of resources. As a further step, cross-functional integration
of teams having a partial mediating effect between the mechanical organization
is also a benefit. Process excellence is Operational excellence, it is about process
effectiveness and efficiency. It requires processes to be designed and improved
for consistent delivery with minimum variation and minimum waste.
The Logistics management information systems (LMIS) from an internal environ-
mental context includes Logistics operating systems (LOS) and Logistics planning
systems (LPS) which handles transactional applications and coordinating applica-
tions respectively. LMIS is an integrated system to support 3PL/4PL providers to
better manage the customer’s supply chain by automation. It enhances decision
making from strategic to operational facilitating business transactions. Logistics
information systems is essentially a key enabler of satisfactory delivery of logistics
and services by increasing data management through information accessibility
and reducing supply chain uncertainties.

NADEERA WIJEWICKRAMA

Principal Acccount Manager
Maersk Lanka

11 E-VISIBLE SUPPLY CHAIN MAGAZINE AUGUST 2021

Importance

of Supply Chain Integration within a
Logistics and Service Organization, Sri Lanka

RISE OF E-LOGISTICS & SERVICES – END TO END IS THE
FUTURE

In conclusion, the existing operations which involve a lot of
manual procedures, and are inefficient, unreliable and inse-
cure. It could result in loss, duplication, incorrect distribution
or unauthorized disclosure of business information and pro-
cesses which in turn will impact revenue generation of the
organization negatively. It therefore reflects the need of au-
tomation to address the issues in the corresponding business
functions. Through launching digital initiatives to accelerate
the transformation of the industry from a typical paper-based,
to digital customer-centric processes and services.

From a CUSTOMER RELATIONSHIP MANAGEMENT perspective supply chain in- A total of 04 recommendations can be summarized. The First
tegration shows the importance of relating to the customer without straining the recommendation is for the organization to take a step back,
customer and constantly operating under a customer’s perspective as customer re-evaluate the logistics and services market in terms of an
satisfaction is a key indicator of logistics and services quality. Goal of extensive external environmental analysis benchmarking against other
investment on Information and communication technology in the logistics and organizations as well as industries, re-evaluate the company
services industry is to have the right product at the right place at the right time. potential and current standing in terms of an internal envi-
Research proves significantly improved customer satisfaction as a key benefit of ronmental analysis.The Second recommendation is to build an
Logistics service quality (LSQ). Potential negative impacts are higher investment effective procurement strategy post an internal need analysis
costs in terms of technology and risk of higher dependency on technology, re- and vendor evaluation in order to attract the relevant and po-
sistance to change or implementation, reduced human centricity, minimal ne- tential vendors (eg: floating a RFP). The third recommendation
gotiation skills, inability to identify customer loyalty, barriered machine learning is to structure the people in to relevant teams with KPI and ob-
during inception as there is no past data. However, all of which with globalization jectives clearly communicated and assigned, focus on capabil-
is evidently changing. ity building of relevant teams (eg: procurement – negotiation
skills, contracting skills / sales – pitching skills / designing solu-
THE CONCEPT OF SUPPLY CHAIN EFFICIENCY (SCE) is tions ), map the relevant processes for execution of Logistics
utilizing the combined resources of the supply chain in the and services internally, plan out how existing systems can be
best way possible to provide competitive and cost-effective enhanced and integrated further. The Fourth recommendation
services. This in the service sector is difficult to evaluate is to build strong and long-lasting customer relationships at the
because it is difficult to standardize the inputs and outputs inception through methods like e-rate sheets but eventually to
which are highly heterogeneous. When it comes to the in- provide E2E logistics and services on the E-Platform.
puts of the service sector it is labour-intensive and technical.
Quality is the most important output of the service sector as
it is the key variable customers evaluate service providers on.
Unlike the manufacturing sector, which measures its outputs
by quantity and increases/decreases the same by increasing/
decreasing the inputs by quantity, the service sector output
revolves less around the quantity aspect and more by pro-
viding a higher quality service to the customers by increasing
customer satisfaction.

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E-VISIBLE SUPPLY CHAIN MAGAZINE AUGUST 2021 1144
E-VISIBLE SUPPLY CHAIN MAGAZINE AUGUST 2021

STRATEGIC

Operations Management
in the Modern Supply Chain Industry

The competitive and global environment in today’s complicated business culture commands that the direction and transformation of operations
management takes place in a manner that is as effective and efficient as possible. Currently, factors such as due time, cost and quality develop-
ments have improved the requirement to coordinate and cooperate with business partners everywhere in the world to accomplish goals that allow
customers to be effective. Therefore, the operations management process emphasizes the integration of actions across a number of businesses
to handle the flow of products, services, people, tools, facilities and other essential resources. Globalization has slowed or even stopped for many
companies. But companies with international ambitions need strategies for competing in the new global reality. Therefore, companies have set
Visions & Missions which align with their future short term & long-term targets.

DECISION AREAS IN OPERATION MANAGEMENT
In any organization the need to have a mission for effective operation management is imperative & operation strategies need to be precise on how
to achieve its mission. At the very core of this mission is to satisfy a customer’s needs & wants. The mission must also be integrated across each &
every department of the organization in order to fulfil the mission target.

As per Haizer, there are 10 decision areas as mentioned below.

• Supply Chain Management • Inventory Management
• Product Design • Quality Management.
• Process Design • Layout Design
• Human Resources • Location Design
• Scheduling • Maintenance.
15
E-VISIBLE SUPPLY CHAIN MAGAZINE AUGUST 2021

Considering any organization, we can observe all or many of the above Global Strategy
decision areas across various departments. International strategy
Multi domestic strategy
WHAT IS THE OPERATION STRATEGY? Transnational strategy.
Cost Reduction is relatively high in global & transnational strategy com-
Haizer describes successful operations management under 3 distinc- pared to the other two strategies. In terms of local responsiveness, this
tive features. strategy is relatively high in multi domestic & transnational strategy com-
Differentiate. pared to other two.
Cost leadership.
Responsiveness. IMPROVEMENTS & RECOMMENDATION IN STRATE-
GIES IN OPERATION MANAGEMENT
DIFFERENTIATION should be thought of going beyond the physi- Improving effectiveness of the Operations by using trade –
offs.
cal characteristics and service attributes to hold everything about the
product or service that will influence the potential customer. Focusing on variety & cost efficiency can increase the
Hard rock café established at London is famous for its mouthwatering company’s effectiveness. Producing products for the pro-
meals with rock music. This strategy was successful & they opened fessional market & producing products for the domestic
40 locations across the US & many in Europe & the strategy used was market should be differentiated.
differentiation from the existing market. They have achieved their tar-
gets & today they own over 100 outlets to prove they are able to win DISINTERMEDIATION
the orders of the customers. Differentiation is one of vital strategies Negotiate with Tier 2 suppliers (Supplier’s supplier)
to win the order of the customer, achieve the mission of the organi- & give bench marked prices to suppliers to produce
zation. the goods with conversion cost. With that, any orga-
nization will be able to get a cost advantage as well
COST LEADERSHIP as quality of the product with standardization of the
materials.
When an organization can beat their competition by offering low costs
to their customer it can be identified as a cost leadership strategy.
Anyone can differentiate their business through the pricing strategy.
By reducing the pricing of their products & services the organization
can enlarge their customer base through the collection of their com-
petitor’s customers.
The restaurant industry is known for margins that can make it difficult
to compete with a cost leadership marketing strategy. McDonald’s has
been extremely successful with this strategy by offering basic fast-food
meals at low prices. They are able to keep prices low through a divi-
sion of labor that allows it to hire and train inexperienced employees
rather than trained cooks. With that McDonalds is able to get a com-
petitive advantage through their Cost leadership strategy. If people
need to order a burger & if they have two options- KFC & McDonalds,
and prices are lower at McDonalds than KFC & the client focuses on
the cost of the burger McDonalds is able to secure this order.

RESPONSIVENESS is similar to flexible, reliable feedback.(Heizer

2017). Considering the customer requirements and litigation require-
ments of the country due to various reasons, the market needs may
change. If any organization is able to react to a particular change in a
positive way he will win the order at the same occasion. It shows the
importance of the strategy of responsiveness. Market change can be
Volumes, Design, or delivery etc.
Here we need to consider the seven wastes of supply chain manage-
ment. How to eliminate transport time, Motion effects etc.. Because
those are factors which directly impact fast delivery. Even by achieving
competitive advantage of responsiveness we need to think about how
to reduce the waste in SCM. Identifying organization demand patterns
is vital in this strategy because knowing the current status will help to
identify changes which need to be done.

GLOBAL OPERATION STRATEGIES SUDESH GOMES
Manager - Purchase
Globalization is an important concept in any business model. Through Hafele India
globalization, the whole world gathers together & with that custom-
ers, organizations and suppliers work as partners. The Impact of glo- 16
balization falls on quality, variety, customization, time lines & cost. It
leads to efficiency, adding value to goods & services. (Heizer et al.,
2017)
Global operation strategies can be identified as,

E-VISIBLE SUPPLY CHAIN MAGAZINE AUGUST 2021

The fundamental objective of any business entity entre- According to Peter Drucker “ Marketing is so basic
preneurship is to bring the required revenue to the or- that it cannot be considered a separate function. It is
ganization by keeping the cost structure as low to make the whole business seen from the point of view of its
profits which sustain the business or the entrepreneur- final results, that is, from the customer point of view.
ship. Hence the focal point of satisfying customer needs Business success is not determined by the producer
& wants is the center for any business entity, if not the but by the Customer.”
survival would be questionable.
Thereby we are all in agreement that whether we are It’s an eternal truth that people need goods & services
an extra large business organization or even a micro or to fulfill their needs & wants. In simple terms it can be
home based entrepreneurship or have world-class and said that humans require goods & services to live. So,
respected brands or just selling commodities, the focal business entities have been established to produce
point should be customer satisfaction. So, the custom- goods & services to fulfill the aspiration of customers.
er is the cornerstone, thus understanding customer Hence as elaborated, the key focus of any business ven-
behavior is very much essential to the survival of the ture is to generate surplus to keep the business going
business. by managing both the top line & bottom line. In this
By looking at the world today, according to Alvin Toffler, journey Supply Chain Management (SCM) would play a
human civilization can be divided into three waves of key role to fulfill the aspiration of Marketers to satisfy
the economy. The first wave is the agricultural age the customer’s needs & wants.
which focuses on land as the most important capital Supply chain management (SCM) is the management
for agriculture. The second wave is the Industrial age of supply chain activities from product development,
where machines & factories were essential capital. sourcing, production, logistics & information systems
This has happened due to the industrial revolution in in any organization which is driving their business ven-
England & the rest of Europe. The third wave which tures to maximize customer value & achieve a sustain-
we are experiencing now is the information age. The able competitive advantage.
essential capital is the mind, information & high tech
which is required to succeed. It’s said that we are mov-
ing towards the fourth age with the orientation of cre-
ativity, culture, heritage & environment.

Today we are living in a highly unpredictable environ- SURANJITH SWARIS
ment, which has been challenging all norms of life as
well as the business world. We define this prevailing VICE PRESIDENT
environment in the current context as a VUCA environ- COLOMBO BUSINESS ASSOCIATION
ment. VUCA is a concept that originated with students
at the U.S. Army War College to describe the world af-
ter the Cold War.

VUCA means a Volatile, Uncertain, Complex & Ambigu- SIGNIFICANT OF SUPPLY
ous environment. It describes the current state of nor- CHAIN MANAGEMENT
mal & unexpected changes in parts of the industrial & FOR MARKETER
commercial world.
By reviewing all these points which I highlighted above, Dr. Muddassir Ahmed (@muddassirism), a supply chain thought leader states, “Supply
you can see the reality is that we live in a time which is chain management is an important tool for managing products or services from its raw
highly VUCA & thus customer satisfaction is far more state to finished state and managing after sales services. It is principally concerned with
challenging than ever. the flow of products and information between supply chain partners”

So the situation is where nothing is ever quick enough. SCM represents a conscious & meticulous effort taken by the organization to develop
Everyone wants faster machines, faster service & quick- & run supply chains in the most effective & efficient ways to minimize the cost es-
er response from everyone & everything to fulfill their calation as well as satisfy customer needs. Organizations are critically evaluating &
needs & wants. reviewing their supply chain activities rigorously to reduce the cost structure to face
the competition and also meet the customer demand for competitive price offers
Thus you can see the impact these macro environment for goods & services they purchased. On the other hand, Marketers are always on
changes have on a marketer’s role as they represent the mission of satisfying the ever demanding customer needs & wants in this VUCA
the face of an organisation. These challenges arise world.
because the customer whom we attempt to satisfy to Thus SCM has a very strong & direct connection with Marketers to fulfill customer as-
keep the business venture afloat is so “demanding” and pirations. Customers are always looking for value for their expenses on the products
also so “confused”. & services they obtain to consume whereas the organization is looking to maximize
the profits for organization survival by managing cost structures while keeping cus-
Marketer is a person who focuses critically on con- tomers happy.
sumer insights & experience by leveraging technolo-
gy to build brands & offer products to fulfill customer Thus this shows how SCM is important for any organization where a Marketer is in a
needs & wants which drive the organization for surviv- position to satisfy demanding customers while protecting the company.
al. Therefore the financial success of any organization
depends on marketing ability.
Finance, Operations, and other business operations
will not matter if there is not enough demand for its
products and services, which is taken care of by the
marketer.

17 E-VISIBLE SUPPLY CHAIN MAGAZINE AUGUST 2021

AELIAN GUNAWARDENE

FOUNDER AND MANAGING
DIRECTOR

JAT HOLDINGS

WHAT ARE THE TOP 3 THINGS THAT TEAM MEMBERS LOOK FOR IN AN OR-
GANIZATION ?

For me it’s quite simple- the stability of the organization is something team members look at. We be-
lieve that if the organization is not stable then that’s a big issue. At JAT we’ve been in operation for 28
years. We’ve been growing year on year, which is something I believe that our team looks at and stability
is very important for them.
The next thing would be the culture of the organization. If the organization has a great culture the
values that we share and believe in is something that is very important. Recently, we had this whole
session about the culture of the organization and how the senior team needs to really buy into it to help
the overall operations of the organization.
The third factor which people look for in an organization is recognition over remuneration. If they are
recognized and if people believe in them and give them the credit for what they have achieved as op-
posed to the senior teams trying to take credit and then pass the blame on to the junior teams- that is
something that we believe in, and it is a big part of our culture.

HOW DO YOU RETAIN AND TAKE CARE OF TALENT ?

This question flows with the first question. If you recognize employees for their work and if you give
them the right culture to work in along with compensating them well and trusting them with delicate
work, we find that employees tend to be retained. We believe in delegating work to the next team and
the next team delegating to the next. It’s not necessarily micro-managing but giving them faith and
trust that most employees require. So, if you can show that you really have faith in them, and that you
really trust them then it becomes much easier to retain talent. You must also recognize good work
and compensate them adequately. If you are a top-tier company in the industry, how you compensate
your employees must be in line with the recognition your company is known for. If these conditions are
prevalent, most good talent would appreciate it and stay with you.

WHAT WOULD YOU SAY HAVE BEEN THE MOST DEFINING MOMENT IN
YOUR CAREER ?

The most defining moment in my entrepreneurial life would be the day that I decided to leave my
employment and start my own business. I was 25 years old in 1993 when I made that decision. I was
married with 2 kids, and I had a steady job in a conglomerate in Sri Lanka. The usual thing at 25 those
days was if you had a car, a good salary, and a good job you were generally content. I also saw a clear
path to go up the ladder in the company, but I thought to myself the company itself was constraining
how I wanted to expand. I had mentioned the concepts at JAT to my previous chairman before I left. 10
-15 years down the line he recognized the fact that I put it to him and he was telling his wife at a dinner
that he invited me to that this young man bought this idea to us and we couldn’t follow up on
it and at that time 15 years down the line- we were bigger than that conglomerate was. He was humble and gracious enough to recognize this and
I would regard it as a defining moment. Another moment would be in 1998 when we introduced water- based coating to the Sri Lankan and Asian
market. In 2002, we went into the Bangladesh market which was equally massive for us. Everybody that I knew- all my principles, all my suppliers,
all my team members asked me whether I was mad to go into Bangladesh. Bangladesh at that time had what they called a wed and polish system
which used 8 coats of polish on furniture to get a decent finish on wood. I went and introduced a 3-coat system and that really revolutionized the
whole industry in Bangladesh and today 18 years down the line, we are known as the company that has really helped them with technology. These
to me are some of the most important time frames in our journey. In 2010 we brought in some good shareholders, good new shareholders who
brought a lot of value to the company. More than the money they bought in they really brought in a new culture and corporate governance which
was in line with all publicly held companies. Today JAT Holdings is ready to go public any day as our corporate governance is compliant with every
SEC regulation.

E-VISIBLE SUPPLY CHAIN MAGAZINE AUGUST 2021 18

THE CARGO FREIGHTER
INDUSTRY AND THE
COVID-19 PANDEMIC

Cargo Freight containers have become a
scarce resource over the last one and a half
years with the uproar of the COVID-19 pan-
demic. The editor sat down with Hilshan
Rodrigo of Turkish Airlines in Colombo to
discuss how he and his team have over-
come these obstacles and persevered with
their business operations.

IN THE EYES OF

HILSHAN RODRIGO

Cargo Manager
Turkish Airlines

The COVID-19 restrictions in Sri Lanka began on the 20th of
March 2020. The last flight which we had scheduled was on
the 22nd of March. During this period, the government had
shutdown the Bandaranaike International Airport and had pro-
hibited in-bound flights containing passengers into Sri Lanka.
This forced many airlines to suspend their operations. This had
lessened the demand for passenger flights but had put severe
pressure on the demand for cargo flights. After meeting with
several trade officials, we realized that there was a huge de- In the month of June, we were once again able to operate with
mand for cargo flights to Europe and USA but there was no our dedicated freighter aircrafts. During this period, the demand
space to cater to this demand. Turkish Airlines operates with for PPE goods were extremely high due to the COVID-19 Pan-
around 18 dedicated freighter aircrafts in our global network. demic. As the end of the first wave came to a close, our loads
However, these aircrafts were also heavily busy fulfilling the doubled with the inclusion of food items and the resuming of
global demand. Unfortunately, Colombo was ignored due its operations in factories meant that we now also once again dealt
low volumes. Due to this, from the 22nd of March to around with garments as well.

mid-April, we had a period in which we were unable to find Even as of now, mid-2021, we still operate Cargo Loading Cabin Air-
space except for in small quantities via Qatar and Sri Lankan crafts due the space crunch. COVID-19 has taken its toll on the Cargo
airlines. This created a backlog in our operations as we were and Freight Industry. The increase in demand has elevated cargo rates
unable to clear our goods on time. The main challenge which and created a space crunch giving us fewer options than we had before.
we faced in all of this is the fact that passenger aircrafts were Turkish Airlines has been able to mitigate these challenges primarily be-
not operating with passengers who would have contributed cause of its hub in Istanbul which takes 4 hours to Europe and 10 hours
close to $250,000 of the transportation cost. to USA, making it a central point. Also, we were fast to adapt to the
conditions which helped us to succeed faster and enabled us to have
processes in place to handle the next few waves of COVID-19.
We had to adapt fast. We needed to find a way to mitigate this
gap. After doing our SOP’s and consulting all officials such as the
Sri Lankan Civil Aviation Authority, we became the first company
in Sri Lanka to operate with a Cabin loaded aircraft from Colombo
to Istanbul on the 12th of April 2020. We started off with 1 flight
per week, but on the observation that each flight was bringing in a
healthy revenue, we increased this to two flights per week. While
conducting our operations in this manner, we realized that there
was a niche market with much demand from Colombo to Lahore.
This enabled us to increase our fleet by an extra 2 to 3 flights per
week, and at the time, we operated close to 800 tons per month.
19
E-VISIBLE SUPPLY CHAIN MAGAZINE AUGUST 2021

TUMAL KARUNARATNE
DIRECTOR

TSL HOLDINGS

WHAT ARE THE TOP 3 THINGS THAT TEAM MEMBERS LOOK FOR IN AN OR-
GANIZATION ?

My number one factor is inspirational leadership. It is very important that the leaders are
inspiring and motivational, so the team members would want to put that 110% or 200% to
create growth within the company. Number 2 would be to get to work for a company which
gives a sense of security that the company and the leaders and the management shows that
the company will take care of you no matter what. That security provides the team member
the safety net that this company will be there for us.
The last factor would be personal growth. A company that helps the team member or the
employee to personally grow and leaders who push team members to grow makes a big dif-
ference.

HOW DO YOU RETAIN AND TAKE CARE OF TALENT ?

Firstly, appropriate incentivizing and remuneration is very important. Remuneration based on
their skills and performance is very important to retain talent and the other factor that we
really push is identifying the right talent, the skill and then creating a platform for that individ-
ual- for them to grow that skill and help the growth of the organization. Last but not least is
that training is very critical in retaining talent for the sustainable growth of the organization.

WHAT WOULD YOU SAY HAVE BEEN THE MOST DEFINING MOMENT IN
YOUR CAREER ?

I started off as a civil engineer. I am trained and certified as a civil engineer and a design
engineer, but then I decided when I was working in the US to move back to Sri Lanka to join
the family business and the most defining moment was that transition from engineering to
logistics, real estate, manufacturing, and the things we do to grow the company. I think it truly
hit me during the pandemic because working closely with our team from our front line to the
upper management to get through the pandemic to keep the lights on and to make sure ev-
erybody is taken care off made me feel what I am doing Is very important both for the growth
of our company and for the Growth of Sri Lanka as a whole.

ONE CHANGE ON SUPPLY CHAIN THAT HAS TAKEN PLACE AT THE TIME OF COVID – 19 IN YOUR COMPANY
SUPPLY CHAIN ?

The advice that I can share for a very career-oriented person is that respecting the company that you work for is very important
despite the remuneration, the incentives and so on. Respect and care for the company you work for is very critical because when
you give that to the company the company respects you back and takes care of you. That bond between the team member and the
company is very critical to that level of loyalty. That helps the company grow and the individual grow and that is what Sri Lankan
businesses need to grow to become better and bigger multinational companies.

WHAT ADVICE YOU WOULD LIKE TO SHARE WITH PEOPLE ASPIRING TO BE A SUPPLY CHAIN PROFESSIONAL
?

For anybody who wants to step into the shoes of a supply chain professional- some advice that I can share with you all is that learn-
ing is a very core aspect of it. Understanding the theoretical part is important, but beyond that, applying the theoretical part in the
field is very critical and the rapid adaptability is a keyword you need to be able to use. The theoretical knowledge you have, your
intuitiveness, your logic to come up with a solution that matches the very dynamic ecosystem that we work in. You must be able to
think beyond the 9 dots to become a supply chain professional. It is not

E-VISIBLE SUPPLY CHAIN MAGAZINE AUGUST 2021 20

NEW OFFICE MOVED TO 281 R. A. DE MEL
MAWATHA, COLOMBO 03.

2211 E-VISIBLESUPPLYCHAINMAGAZINEAUGUST2021
E-VISIBLE SUPPLY CHAIN MAGAZINE AUGUST 2021

strategies related
to supply chain

to mitigate the impact
of COVID 19

The Organization of Profes-
sional Associations of Sri Lanka
organized a webinar on “strat-
egies related to supply chain to
mitigate the impact of COVID
19” on Friday, 13th of August
from 6 pm to 8 pm. Industry
experts selected by the com-
mittee of Supply Chain , Logis-
tics and transport will address
gathering to create awareness
on making the right decisions
on day-to-day supply chain
issues by uplifting the overall
productivity in operations.

E-VISIBLE SUPPLY CHAIN MAGAZINE AUGUST 2021 22

QUALITY QUALITY IN
SUPPLY CHAIN
MANAGEMENT

Rasika Weerakoon

Maga Engineering

The term “quality” had been defined in different ways by many experts against those available in original specifications, quotations against
in the past. The most updated and accepted definition, today, is giv- requests, purchase requisition against quotations, purchase orders
en by the international organization for standardization (ISO) in its ISO against purchase requisitions, invoices against purchase orders and fi-
9000 : 2015 standard. Quality is defined as “degree to which inherent nally goods received against purchase orders placed is mandatory to
characteristics of an object fulfills requirements”, where the object is be carried out. Carrying out these checks assures the quality of goods
defined as anything perceivable or conceivable. A characteristic is a dis- on par with customer requirements. It is not only those engaged in
tinguishable feature which can be physical, sensory, behavioral, tem- the supply chain or quality department who bears responsibility over
poral, ergonomic or functional. Requirement is defined as “need or an quality. All parties involved along the supply chain pertaining to a prod-
expectation that is stated, generally implied or obligatory” in interna- uct delivery, including the customer who determines quality require-
tional standards. This reveals that anyone who is willing to meet quali- ments and communicates to the supplier bears an equal responsibility
ty, should have a deep understanding about almost all distinguishable of maintaining expected quality levels.
features pertaining to their customer’s needs as well as expectations. Requirements need to be clear, understandable and realistic. Further-
A supply chain professional who links the Marketing / tendering / mer- more it should be able to be fulfilled with the available budget from
chandising department which identifies the customer needs and pro- available and accessible sources by means of reasonably available
duction / manufacturing department which fulfills the order bears a modes of transportation. These need to be paid attention in order to
huge responsibility in quality. maintain and improve mutually beneficial supplier relationships which
The following article summarizes how a supply chain and its counter- is another quality principle.
parts are to be tailored in meeting quality requirements and ensuring
customer satisfaction. Supply chain members, especially the leaders, need to possess soft skills
The party who collects the customer’s needs must review customer re- such as teamwork, negotiation and analytical skills in achieving quality
quirements prior to acceptance at the very inception. Queries need to goals. More importantly the top management of any organization do
be raised to the customer or the client and get clarified prior to placing have a responsibility for having the right person at the right place rath-
a bid. Proper understanding and communication play a vital role in de- er than mere recruitments. The performance of members to be prop-
termining client requirements. The supply chain professional who gets erly evaluated with the view of competency development in order to
involved in supplying the entities must collect relevant information achieve perceived quality.
and develop a better understanding about the entity in hand and pass
along the remainder of the chain. Reference to specifications, sam- Quality is not a constant. It is constantly
ples is mandatory under these circumstances. The information should evolving and improving with time.
not be limited to stated requirements but also to implied terms. This
applies to “product preservation” during storage and transportation, Supply chain is subjected to quality improvements with time. Automa-
post-delivery activities and so on. Therefore a well-established channel tion, Enterprise Resource Planning (ERP) systems are amongst trending
of a communication which facilitates traceability is an integral part of tools in the supply chain which can be utilized to improve quality.
a successful supply chain in order to ensure a seamless flow of correct Automation and ERP system compliance avoids repetitions, non-con-
information to the correct party. formities arising out of human errors. A proper check-up carried out
All personnel involved in supplies including, but not limited to purchas- at the first entry may reduce administrative time and cost drastically.
ers, loaders, operators, transporters, unloaders, storekeepers, store However, full automation may not be a solution for many organiza-
helpers have a significant role to play. Skills, attitude and experience tions. A hybrid system in which the proportion of the blend determined
of the personnel are very much important in this case transforming by product, process, industry, availability of technology, affordability as
requirements into action. well as the organizational culture can be recommended as a measure
Identification and communication of requirements along the supply of improvement.
chain and compliance is not merely sufficient but it needs to be in- Quality is not a miracle. It is a planned process with a targeted out-
spected and tested at different milestones. Uniformity of information come. It is not a responsibility of one “department” and it is proven
that it is a joint effort of many parties. The right quality is an outcome
23along downstream and compliance of goods along upstream to be of an endless effort of a chain of people at the expense of time and
checked.Comparing information found in “request for quotations” or resources. It doesn’t mean that the quality of the supply chain depart-
“invitation to bid”, ment has been relaxed. They have the prime responsibility while others
E-VISIBLE SUPPLY CHAIN MAGAZINE AUGUST 2021 have secondary, tertiary level responsibilities to assure customer
satisfaction. The breakdown of even a single link of this long chain can
compromise the customer satisfaction and business in the long run.
Therefore paying the fullest attention on the accuracy and precision of
communication, role of supply chain members, competencies of per-
sonnel involved, inspection & testing, individual responsibility in quality
assurance, support of automation and ERP in quality improvements
with the expectation of a shift of the paradigm at an individual level
towards quality culture is very much important in today’s context as
the competition exists between supply chains but people or individual
companies.

T.SAYANDHAN

CHIEF EXECUTIVE OFFICER

SUNSHINE HEALTHCARE LANKA

WHAT ARE THE TOP 3 THINGS THAT TEAM MEMBERS LOOK FOR IN AN OR-
GANIZATION ?

First, would be the stability of an organization, especially in the current environment. I will look at the
financial stability of an organization. The second factor I would look for would be growth. Growth in the
sense that I would want to work for an organization which grows in the industry and thus which enables
my growth. I am sure anyone working in an organization would like to learn and progress.
The third factor I always promote would be happiness at work. Today there are accredited programs
where organizations are verified as a great place to work.

HOW DO YOU RETAIN AND TAKE CARE OF TALENT ?

It is very important that you give the suitable job to the suitable person so when there is a match be-
tween suitability, I am sure that is one way to retain employees. Most importantly you should recognize
employees, you should delegate work to them, you should empower employees, you should motivate
them, inspire them, and reward them. If all these words which I mentioned in an organization are put
into action, it is one way in which we can retain great talent.

WHAT WOULD YOU SAY HAVE BEEN THE MOST DEFINING MOMENT IN
YOUR CAREER ?

There are 3 major steps which I made in my career. If I could take you through the last 30 years, the first
step was when I joined Glaxo Ceylon as a medical representative where I worked as a category manager
for 10 years and after working for Glaxo, I took the first step to move to Hemas Pharmaceuticals as a
country manager. The simple reason is that I wanted to develop my career and here I went and worked
as a country manager for 10 years and after being there for 10 years I felt the need to move again. I
needed to grow further. This time I moved in as a CEO at Delmege to further enhance my career. At
this point I was missing my favorite industry which was the healthcare industry and to further establish
myself I made a move to join a financially stable and a great place to work at Sunshine Healthcare as a
CEO. These are the 3 key decision which I made in my life simply to enhance myself for me to grow in
my career.

ONE CHANGE ON SUPPLY CHAIN THAT HAS TAKEN PLACE AT THE TIME OF
COVID – 19 IN YOUR COMPANY SUPPLY CHAIN ?

To overcome the COVID-19 situation- from a supply chain perspective- we needed to do a couple of things because things were not normal, and
we were operating in the new normal. One of the key steps we had to do is increase our stock because we deal in essential medication so we can’t
allow a product to go out of stock. If a person is taking insulin we can’t afford to go out of stock as the patient would suffer. In this situation we
had to increase the stock from the normal stock holding. We had to reconfirm the orders from our principals and our suppliers. The third thing
we did, was for the very first time we looked at the stock position at the customer point because our orders are placed at the customer based on
their balance stock. We generally wait till the order comes and then we supply them, so for the very first time, based on the situation, we looked
at what the customer’s balance was, and we started catering to them. So, these are some of the steps we took to manage the COVID-19 situation

WHAT ADVICE YOU WOULD LIKE TO SHARE WITH PEOPLE ASPIRING TO BE A SUPPLY CHAIN PROFESSION-
AL ?

My personal advice is to improve on 3 things starting from increasing your experience. If you want to grow yourself in the supply chain, work for a
supply chain organization or work for a supply chain division/department and have that firsthand experience. Secondly, increase your knowledge
by working and by following accredited courses which can increase your knowledge. The third factor would be to increase your competency in
these areas. In conclusion, if you want to be successful in the supply chain industry, EXPERIENCE, KNOWLEDGE, and COMPETENCY is very import-
ant. If you can focus on these 3 areas, I am sure you are going to improve yourself in this industry.

E-VISIBLE SUPPLY CHAIN MAGAZINE AUGUST 2021 24

The times we are living in have become more uncertain than ever. If anything, this pandemic world has taught
us the importance of ensuring our businesses are safe, secure, and insured. Therefore, when it comes to
supply chain, sometimes the smallest oversight can manifest into the biggest threat. These risks can dam-
age your cargo at any time, from source to destination. In this regard insurance is an important aspect, no
matter which industry you belong to, and the marine sector is no different. Marine Insurance is a type of
insurance that covers cargo losses or damage caused to ships, cargo vessels, terminals, and any transport
in which goods are transferred or acquired between different points of origin and their final destination.
Hence marine insurance becomes a requirement for any business engaged in logistics and supply chain

management.

THIS IS WHERE WE STEP IN

Orient Insurance Sri Lanka

opened its doors to business in 2011 and offers all classes of general insurance, including motor,
marine, property, liability and medical amongst others. The company was formed with the vision of
becoming the premier insurer of choice in Sri Lanka, by building mutual trust and confidence in ev-
erything we do. Within a very short span of time, the company has to a greater extent achieved our

vision and become one of the fastest growing General insurance companies in Sri Lanka.

CARGO IMPORTS/EXPORTS GOODS-IN-TRANSIT PRODUCE IN TRANSIT
INSURANCE INSURANCE
Marine transit insurance is essen-
tial for protection of your valuable Goods-In-Transit is a form of in- Generally covers Tea, Rubber and
import or export cargo consign- surance covering risks associat- Coconuts whilst in transit and
ments. Movement of all kinds of ed whilst transporting goods on stored at various locations is-
goods irrespective of their mode land. This insurance may also be land wide. Cover begins from the
of conveyance, i.e. Sea / Land / Air arranged on the basis of certain time of plucking and/ or tapping
may be insured either on the basis Cargo Clauses which fall under and/or purchased and/ or col-
of values of individual shipments lection from suppliers in various
or on the value of annual or pe- marine cargo insurance. locations and ends with buyer’s
riodic shipments. The commonly warehouses and/ or retail outlets
used insurances for cargo are in- anywhere in Sri Lanka and/ or to
dividual marine policies or open
Colombo Port until FOB.
covers or open policies.

2255 076-3312277/ 070-3322277 or email us at [email protected]
E-VEIS-VIBILSEIBSLUEPSPULPYPCLYHACIHNAMINAMGAZGIANZEINAEUGAUUSGTU2ST0221021

HOW TEAM SPORTS CAN
HELP YOU IN YOUR CAREER

HR

Playing a team sport can help you contribute better to team AW
at work. Team sports requires communication, trust and com-
promise – all skills that are useful in professional situations as
well. Applying these skills in the office can make you a better
player in your department. Team sports like basketball teach
us important life skills which can translate into business life.
In whatever career we choose, we need to understand people,
establish friendships, motivate others and work together. Ev-
erybody has a role to play in their job

LEADERSHIP

Taking charge of a company project can be hard, but it’s not so
different from captaining a team. Being a leader on the field or
in the office requires many of the same skills. You have to know
everyone’s strengths and weakness so you can assign them to
the position where they can make the best contribution. You also
have to know when to delegate and let someone else score the
goal so you can all share the glory.

COACHING
Whether it’s helping a teammate improve their free kicks or train-
ing a new colleague, you need to know how to be a good coach.
Showing that you can be patient and give constructive feedback
without being patronizing will certainly get any manager’s atten-
tion.

PERSEVERANCE ASANGA WEERACKODY
Every project has its obstacles, just as every team has a story about CEO
the time it came from behind to win. It takes the same mental
skills to remain motivated when you’re trailing by three goals as E-VISIBLE
it does to push ahead when you come up against a major setback
in a project. Playing sport can teach you how to focus on the goal 26
and keep your teammates motivated.
TEAM SPIRIT
Team spirit is one of those intangible qualities that’s nearly im-
possible to talk about – unless you can offer examples from your
sports team. Cheering your teammates on can demonstrate your
capacity for enthusing and encouraging your colleagues. Celebrat-
ing wins is also important, so make sure you take the time to ac-
knowledge success on and off the pitch.

E-VISIBLE SUPPLY CHAIN MAGAZINE AUGUST 2021

IS YOUR ORGANIZATION READY
TO MOVE WITH INDUSTRY 4.0?

The new era of the industrial revolution is seen as Industry 4.0. With this, many
questions come to our mind. What is industry 4.0 and what is the impact of industry
4.0 on Supply Chain Management? Can organizations ignore this and be left behind?
Do companies have resources to face these developments and challenges? How long
will the benefits of Industry 4.0 investments last? Will this industrial revolution last
for 100s of years or what will be the next? With globalization customers have be-
come more demanding, choosy, and seek value for money and customization.

WHAT IS INDUSTRY 4.0?

In history, Industrial Revolutions were hot topics. Why? It impacts the entire world, the
behavior, the social life of people, the supply chains and the manufacturing systems.
The first Industrial revolution started in the United Kingdom in the 1750s, transforming
agriculture, handicrafts and textile manufacturing into economies based on large scale
production quantities, using machine manufacturing and new power sources, such as
water and steam to power the factories and transportation, which resulted in more pro-
ductive and efficient industries. The second industrial revolution in the mid 1800s was
based on automation and advances in electricity, to power the mass scale industrial pro-
cesses. For example, the improvements in the assembly lines of Ford Motor Company
by Henry Ford to provide mass scale, low priced standardized cars. The third was related
to electronics, computers and the internet to automate manufacturing and distribution
in the late 1900s.
In the 21st century, the fourth Industrial Revolution comes with Digitalization, Cloud
Technology, Internet of Things ((IoT), CAD (computer aided designing), 3D printing, ro-
botics, AI (artificial Intelligence), data analytics and other technologies connecting differ-
ent complex supply chain processes.
With each industrial revolution the society gains more benefits such as high standard of
living, improved production, increase of wealth, and knowledge enhancement.

IMPACT OF INDUSTRY 4.0

The organizations have to redesign their supply chains to match with industry 4.0, “The
Digital Supply Chains”. Organizations are moving towards joining industry 4.0 connecting
complex supply chain processes to gain competitive advantage and to be more success-
ful in the future. Re-designing supply chains with interconnected devices, speedy net-
works, and the use of artificial intelligence & robotics in supply chains. Automation and
execution of routine tasks with robots, enable to gain speed and time savings, thus save
human capacity for wisdom-based decisions.
The information value chain in figure 1.1 illustrates the relationship between the people,
machines and IT (Information Technology) in the supply chain.

CHAPA REFAIE
Consultant, Lecturer and Supply Chain
Professional MBA (SCM), B.Sc., CIMA, Int.l
Dip. In SCM, Council Member of ISMM

Figure 1.1: Information Value Chain

According to the information value chain, computers or machines are to be used to process high volumes of data efficiently, accurately, timely and
cheaper. Human resources are to be used to deal with complex decisions with wisdom and knowledge. Information gathering with big data and
supply chain analytics will be the tools used to monitor and manage supply chains.
IoT is connecting different devices with the internet and operating as a closed loop system, so that the system can take decisions independently
to meet the end output. For example, Supply Chain systems such as automated warehouses, robotics, voice recognition picking, tracing the ship-
ments, smart factory equipment, home connected appliances such as coffee machines, smart home security systems such as voice recognition
systems, autonomous farming equipment such as watering systems, and wearable health monitors such as arm bands.

27Organizations implement data analytics for automatic replenishments, demand forecasting and to access real time information for rapid decision
making to gain competitive advantages.
E-VISIBLE SUPPLY CHAIN MAGAZINE AUGUST 2021

Artificial Intelligence is used in many sectors such as healthcare for di- For example, Mercedes Benz is expanding their genuine spare parts
agnosis, testing medicine, in radiology, and in dermatology with more replacement range with the use of 3D printing technology. The advan-
accuracy. tage of this is that they could print from one unit to many units and the
The infrastructure of supply chain changes as the industry 4.0 results in MOQ (minimum order quantity) is not required. Further, they could
massive reductions in wastages, increase in safety and quality. In the long close the replacement parts supply gap of classic vehicles too.
term, this not only generates high profit margins and productivity but Thus, organizations join industry 4.0 to be competitive, creative, la-
also will result in high value careers as the jobs change with the infra- bour efficient, faster, flexible, cost effective, accurate and to operate
structure changes. For example, with CAD (computer aided design) the with efficient processes with rapid decision making.
draftsman jobs are no longer demanding jobs.
Why join Industry 4.0? Challenges
Supply chains are to create value for customers. For customers to spend
their hard-earned money they need to see value for money in the prod- Some of the management, staff, and customers may not accept the
uct or service they intend to buy. Customers value the quality, speed, concept of digitalization with a positive note. Lack of expertise, com-
customized service, flexibility, accuracy, efficiency, new developments, mitted and skilled staff may hinder the transition to industry 4.0. Cus-
and the new features etc. tomers have different views on moving towards digitalization or au-
By joining industry 4.0, dramatic improvements and efficiencies can be tomation. Some would prefer to test the latest technology and new
achieved while experiencing a rapid growth in the market with competi- lifestyle, whereas others may think of the impacts of labour being
tive advantages. Big data provides good sensors to identify which scenar- replaced with automation, loss of job opportunities, change of so-
ios are in action and can create supply chain analytics to make efficient cial life etc. In investing in digitalization, organizations may face major
and prompt decisions. challenges such as management and employees’ competences, train-
The process improvements with digitalization and automation enable ing, gaining insights on the latest developments, mastering the digital
companies to produce high quality products at low costs, sophisticated transformation and the confidence to invest etc. Further, lack of exper-
features, optimum use of resources with minimized wastages and de- tise and skilled staff may hinder the implementation.
sign changing capabilities. For example, the tools, spare parts, products The service providers such as government departments and banks
etc., manufactured using 3D printing avoids almost 100% of raw material have to be updated with the latest technology in order to match with
wastage as it uses the additive manufacturing technology than subtrac- the digitized organizations. Rules and regulations have to be updated
tive manufacturing technology. Additive manufacturing technology uses to provide insights to new technology, which may not be in-line and
only the exact quantity of raw materials thus has a direct cost saving in takes time. Moreover, high investment cost, expenditure, and risk will
the final product. be the barriers creating more challenges such as difficulties and uncer-
Moreover, flexibility and speed with reliable digitized processes enable to tainties in quantifying the benefits, payback period and modifications
provide more freedom for different design changes and customization, to infrastructure.
while providing the goods and services with less lead time and thus be-
ing able to meet the ever-changing customer requirements and provide Can we ignore industry 4.0?
customization. For example, the organizations can easily create and sup-
ply different types of designs as customer requests. Further, rather than New technologies chase away industries which are not up to date, as
producing the products and storing as inventory, the organization can the customers prefer to have the flexibility, convenience, optimal pric-
produce(print) the product using 3D printers after finalizing the required es etc. For example, in the 1980s Ice production was dominating and
design and receiving the customer’s order. was the 2nd highest export in the USA. However, with the evolution
Moving with industry 4.0 opens the path to increased globalization, new of the refrigeration technology the ice industry, which was a break-
business models etc., which in turn, enables a world of markets to sell through, was completely evacuated from the market, destroying all
the products and flexibility to face the unforeseen issues. For example, the employment related to the industry. Further, in order to market
say that a project is implemented in a country with less facilities and sud- the product or service, organizations need to be competitive and the
denly realized that a particular item or a tool is not available and without competitive advantage is the secret to high margins. Thus, we cannot
which the project cannot proceed further. Solution lies with digitaliza- ignore the latest trends or the changes in the commercial environ-
tion, 3D printing. By providing a 3D printer for the project and thereafter ment, thus industry 4.0.
any short fall of an item, can be amended by simply sending a CAD file
through the internet which can get the tool or item printed using the 3D Conclusion
printing machine. This saves time and the cost of air freight, while meet-
ing the project deadlines, objective and the budget. We are in a dynamic environment and constant
As shown in figure 1.2, 3D printing is operational in the Mercedes-Benz changes are not a surprise. To be in the business
metal spare parts printing process. world, not only do we need to adapt to changes
but also need to have sensors to identify where
and what type of change happens. The fastest re-
actor will get the biggest share of the profit and the
way to survive. Thus, industry 4.0 or any change is
not to be surprised, it is the way of life. So, rede-
sign your Supply Chain with Industry 4.0- The Digi-
tal Supply Chain.
What will be the next industrial revolution? When?
Is it already in action?
Is it already in action?

Figure 1.2: Metal auto parts 3D printing – 28
Mercedes Benz Trucks

E-VISIBLE SUPPLY CHAIN MAGAZINE AUGUST 2021

PRIYANJITH PERERA Companies often make decisions about each of these elements in
Life member ISMM /Secretary SLSTL isolation, without considering the others. However, it’s critical to
treat each element as part of an integrated whole. Nevertheless,
KNOW YOUR SCM this article emphasizes the importance of the Supply chain oper-
OPERATIONAL ational strategy and procurement strategy for an organization to
STRATEGY AND achieve its corporate objective in a profitable manner.
PROCUREMENT Operating Models
STRATEGY The decisions about how a company produces goods and services
constitutes its operating model. These decisions affect more than
manufacturing. They shape how planning, order management,
procurement and physical delivery are handled as well. There are
four types of operating models.
Make to stock. This is the most broadly used approach for stan-
dardized products that sells in high volumes. A plant produces
goods in advance of receiving customer orders; finish products
are stored to await a customer order. The large production batch-
es keep production cost down, and the redly available inventory
means customer demand can be met quickly.

Make to order. This is the preferred model for customized prod-
ucts or products that are in infrequent demand. Companies pro-
duce the service or product only when they have a customer order
in hand. This approach keeps inventory levels low while allowing
for a wide range of product option.
Configure to order. This is a hybrid model in which a product is
partially completed, to generic level, and then finish when an or-
der is received. This is the preferred model when there are many
variations of the end product and it’s important to have a shorter
customer lead time than is possible with the make-to-order mod-
el. A variant of the configure-to-order model is assemble-to-order
model produce component parts in response to sales forecast and
then finalize assembly upon receipt of a customer order.
Engineer to order. This model shares many of the characteristics
of the make-to-order model. It is used in industries that create
complex products and services with specification that are unique
to a particular customer. In the final step of the customer’s order-
ing process. The manufacturer’s engineering function defines the
specifications and develops a list of needed materials unique to
that customer’s order.
Operations Strategy-Summary

SUPPLY CHAIN OPERATIONAL STRATEGY

The global nature of the markets and competition has forced many compa-
nies to revisit their operations strategy. A supply chain strategy involves many
interlocking activities and decisions, large and small. According to Michael Por-
ter, strategy guru and author of Competitive Advantage, successful business
strategy relies on the concept of “fit’’-that is, a group of activities that support
a chosen competitive strategy. Although any single activity can be copied, the
activities taken together form a system that is virtually impossible to duplicate.

Porter’s concept of fitness holds equally true for supply chain strategy. There
are five elements of your business and the choices you make regarding these
elements are fundamental:
1) Customer service 2) Sales Channels 3) Value System
4) Operating Model
295) Asset footprint
E-VISIBLE SUPPLY CHAIN MAGAZINE AUGUST 2021

PROCUREMENT STRATEGY

When goods have a direct impact on the company result, the influence on company results is considered high. These are important
products for a company. The products have a great share in the end product. A producer of juice needs fresh fruit to make his prod-
uct. It’s also possible that the quality of the end product is highly dependent on the product. A tailor needs high quality fabrics to
make high quality suits. These examples both have a high impact on the company result. The office chairs who need to be replaced
are an example of less influence on the company result. The juice and suits can still be produced by the company when the old chairs
are being used a bit longer. Supply risk is the complexity of the market; how hard is it to buy the product. It is about the availability
of the products and if it is possible to substitute the product. How many vendors are able to supply the product? What about the
political situation in the region of origin? What is the pace of technological development of the product and what are the costs and
complexities of transport?

Bottleneck items (Low influence on company result, high supply risk)
Bottleneck items are not easily purchasable and not replaceable, there are big risks in the market. The influ-
ence on company results is, at first, not very large. These items are, for example, technological innovations,
specific knowledge or spare parts which are hard to get.

Non-critical items (Low influence on company results, low supply risk). Non-critical items have a low
influence on company results and are easy to get. Purchases are subject of the vagaries of the market. Work
with local suppliers at a good price. No detailed forecasting is necessary.

Strategic Items (High influence on company result, high supply risk) The products in this quadrant should
be under direct supervision of the purchase managers. The influence on the company result is large and the
purchase risk is high. Try to lower the risk by starting long term relationships with the vendor, close on con-
tracts and agreements. Look for possibilities to make the product ‘in house’ to be ‘in control’ and exclude
external parties and risks

Leverage Items (High influence on company result, low supply risk) These products are having a great
influence on the company result, but are easy to purchase and there are no difficulties in the market. The
products or vendors are easily replaceable. This gives the purchaser the power to negotiate for better pric-
es or make demands. Try to get lower prices, high volume orders or accurate invoicing.

E-VISIBLE SUPPLY CHAIN MAGAZINE AUGUST 2021 30

1 WHAT IS THE FIRST THING MR. THUSITH GUNAWARNASURIYA
YOU DO WHEN YOU WAKE UP serves as the Director of Procurement and
IN THE MORNING? Logistics at INSEE Cement Sri Lanka. As an
Open my eyes Alumni of Dharmaraja College Kandy and
the University of Colombo, Mr. Thusith has
ARE YOU A MORNING PERSON worked in top positions in the Supply Chain
Industry across some of Sri Lanka’s largest
2 OR A NIGHT OWL? conglomerates. Here’s his Pep Talk
Night Owl
COFFEE PERSON OR 3
6 WHAT IS YOUR FAVORITE PERSONAL TEA GUY?
POSSESSION?
My memories with loved ones Coffee person

4 WHAT IS THE
FIRST EVER CAR
YOU OWNED?
Daihatsu Charade GT

HOW DO YOU RUN A MEETING? WHAT IS YOUR FAVORITE
WORKDAY TIMEWASTER?
7 Brief, Punctual, and Focused Walk around the office

5

NAME ONE TRAIT YOU LOOK
FOR IN NEW HIRES.

Humility 8

WHAT IS THE BEST PROFESSIONAL WHAT IS THE MOST USED APP
ADVICE YOU HAVE BEEN GIVEN? ON YOUR SMARTPHONE?

Don’t let others manage your career. 10WhatsApp
Do it yourself.

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WHY ARE OCEAN FREIGHT RATES SO HIGH?

If you’ve shipped a container lately, you know that ocean freight rates are soaring. A container that might have cost $3,000 to ship from East
Asia to Europe a year ago could now cost as much as $15,000. And that’s assuming you actually can find a container and book space on a
vessel.
What’s going on with shipping lines these days?

FEWER SAILINGS

As we all know, the COVID-19 pandemic has shaken global trade. The trouble started in the first weeks of 2020, when China locked down parts of
the country to curb the spread of infection. Chinese factories that supply businesses around the world went dark, and shipping volumes fell.
Then the virus spread across the globe. Economies slowed, and demand for many products and commodities dropped, leaving ocean carriers with
even more empty space. So steamship lines did the logical thing. Rather than pay to operate half-empty vessels, they canceled sailings, cutting
capacity to match the decreased demand.

That decision made good economic sense. But then the global economy recovered. Factories re-opened, and consumers went shopping. Demand
for space on container vessels climbed. Nevertheless, the steamship lines continued to announce “blank sailings.” That is, they told shippers their
vessels would not call certain ports or would skip some sailings altogether. For example, in early June, the group of carriers known as THE Alliance
(Hapag-Lloyd, Ocean Network Express, Yang Ming and HMM) and the 2M Alliance (Maersk and Mediterranean Shipping Co.) said they would cancel
75 sailings through September, according to the Journal of Commerce. Similar announcements have followed.

Apparently, carriers aren’t confident that demand will stay strong. They have restored some capacity, but not enough to prevent shortages that
drive up rates. The cost of shipping from Asia to the US has risen the most, but rates for shipments between Europe and the US have gone up as
well.Blank sailings have also bred uncertainty. When you’re ready to ship a container, you might have to wait longer than before to get space on a
vessel. Or you might book space and then get bumped if the line cancels the sailing.

RANGANA PERERA CONTAINER SHORTAGE

General Manager Not only has shipping grown more expensive, but it’s harder these days to secure empty con-
Eagle Freight tainers in the US.
The reason? Chinese factories are once more churning out products for the world, swelling de-
mand for outbound capacity from Far East ports. But carriers are still canceling sailings, pushing
up rates for scarce space on the Far East to US lanes.
A carrier can charge a lot more to ship a loaded container from Shenzhen to Los Angeles, for
example, than from Los Angeles to Shenzhen. Transporting containers from China to the US, or
from China to Europe, is such good business, the lines want to ship empties back to Asia right
away, rather than lose time getting those boxes filled in the US. So as soon as US receivers un-
load and return their containers, many of those boxes go empty right back on vessels bound for
the Far East. Something similar is happening in trade between Europe and China.
The container shortage in the US is so acute, in late 2020 the Federal Maritime Commission
(FMC) started looking into whether the steamship lines were violating the Shipping Act of 1984.

LINES ADD SURCHARGES TO OCEAN FREIGHT RATES

While cutting sailings and speeding empty containers back to the Far East, some steamship
lines have also imposed new surcharges. In December 2020, for example, OOCL added what it
calls a Container Retention Surcharge of $300 for each 20’ container and $500 for each 40’ or
45’ container, on dry container shipments between Northern Europe and the US. In January,
Hapag-Lloyd implemented an Equipment Imbalance Surcharge of $200 per 40’ container on
exports from Northern Europe to the US.
Ocean carriers say the container shortage (which they themselves helped to create) prompted
the new charges. Whatever cause you blame, the effect is the same: you pay more to transport
your cargo.

WHEN THE DECK IS STACKED AGAINST YOU, HOW CAN YOU WIN?

Surviving in the current environment takes patience and careful planning. Make no mistake –
you will pay more to ship containers than you used to. And you won’t always get a sailing as
soon as you want one. If you can arrange your shipments well in advance, that might help. But
steamship lines set limits on how early they let you book. Those limits vary from one line to the
next. And there’s no guarantee that your cargo won’t get bumped off one sailing and resched-
uled on a later one.Bottom line: it’s complicated. But it’s not impossible. The more flexible you
can be, and the more options you have available, the better the chance that you can ship on a
schedule that fits your needs, at a price that fits your budget. That’s why it pays to entrust your
cargo to a global freight forwarder that’s an expert in containerized shipping. A forwarder that

32works with all the steamship lines, day after day, can offer a wealth of alternatives. If carrier A

can’t provide the right solution, your forwarder can put you in touch with carrier B, C, D, E or F
E-VISIBLE SUPPLY CHAIN MAGAZINE AUGUST 2021

ia

CHAMIKA

KARUNARATHNE

Manager Procurement
MVIVO

HIRANTHI ANURA

RATNAYAKA SILVA

Director Procurement Mana
SYNERGY LIFE HEALTH ReeBonn La

CHAMIKA

ABEYKOON

Manager - Supply Chain
Sierra Cables

CHANEKYA KASUN MA

LIYANAGE ABEYSINGHE ABEY

Commercial Manager - Supply Chain General Manager Supply C
Lanka Special Steel Variosys
Strategic Alliances and Business Development
33 E-VEIS-VIBILSEIBSLUEPSPULPYPCLYHACIHNAMINAMGAZGIANZEINAEUGAUUSGTU2ST0221021
Morison

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HANNAN

Manager Commercial
Star Garments

DILASHINI

PERERA

Manager Supply Chain
Global Sports Lanka

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CHANATH

Manager Supply Chain
JF & I Packaging

AHESH USHANKA

YRATNE RATHNAYAKE

Chain Manager Procurement Manager
stems Revlon Lanka

ERNEST E-VISEI-BVLIESISBULPEPSLUYPCPHLYAICNHMAAINGMAZAIGNAEZAINUEGUASUTGU2S0T212021 34

DE ALWIS

Manager Commercial
Edna Group

SHIPPING DURING COVID - 19

When the Ever Given megaship blocked traffic in the Suez Canal for almost a week in
March, it triggered a new surge in container spot freight rates, which had finally started
to settle from the all-time highs reached during the COVID-19 pandemic. Shipping rates
are a major component of trade costs, so the new hike poses an additional challenge to
the world economy as it struggles to recover from the worst global crisis since the Great
Depression.

“The Ever Given incident reminded the world just how much we rely on shipping,” said
Jan Hoffmann, head of UNCTAD’s trade and logistics branch. “About 80% of the goods we
consume are carried by ships, but we easily forget this.” Container rates have a particular
impact on global trade, since almost all manufactured goods – including clothes, medi-
cines and processed food products – are shipped in containers.
“The ripples will hit most consumers,” Mr. Hoffmann said. “Many businesses won’t be
able to bear the brunt of the higher rates and will pass them on to their customers.” A
new UNCTAD policy brief examines why freight rates surged during the pandemic and
what must be done to avoid a similar situation in the future.
JAN HOFFMANN

Head, Trade Logistics Branch

Unprecedented shortage UNCTAD

Contrary to expectations, demand for container shipping has grown during the pandemic, bouncing back quickly from an initial slowdown.
“Changes in consumption and shopping patterns triggered by the pandemic, including a surge in electronic commerce, as well as lockdown mea-
sures, have in fact led to increased import demand for manufactured consumer goods, a large part of which is moved in shipping containers,”
the UNCTAD policy brief says.
Maritime trade flows further increased as some governments eased lockdowns and approved national stimulus packages, and businesses stocked
up in anticipation of new waves of the pandemic.
“The increase in demand was stronger than expected and not met with a sufficient supply of shipping capacity,” the UNCTAD policy brief says,
adding that the subsequent shortage of empty containers “is unprecedented.”
“Carriers, ports and shippers were all taken by surprise,” it says. “Empty boxes were left in places where they were not needed, and repositioning
had not been planned for.”
The underlying causes are complex and include changing trade patterns and imbalances, capacity management by carriers at the beginning of the
crisis and ongoing COVID-19-related delays in transport connection points, such as ports.

Rates to developing regions skyrocket
The impact on freight rates has been greatest on trade routes to developing regions, where consumers and businesses can least afford it.
Currently, rates to South America and western Africa are higher than to any other major trade region. By early 2021, for example, freight rates from
China to South America had jumped 443% compared with 63% on the route between Asia and North America’s eastern coast.
Part of the explanation lies in the fact that routes from China to countries in South America and Africa are often longer. More ships are required for
weekly service on these routes, meaning many containers are also “stuck” on these routes.
“When empty containers are scarce, an importer in Brazil or Nigeria must pay not only for the transport of the full import container but also for the
inventory holding cost of the empty container,” the policy brief says.
Another factor is the lack of return cargo. South American and western African nations import more manufactured goods than they export, and it’s
costly for carriers to return empty boxes to China on long routes.

How to avoid future shortages
To help reduce the likelihood of a similar situation in the future, the UNCTAD policy brief highlights three issues that need attention: advancing
trade facilitation reforms, improving maritime trade tracking and forecasting, and strengthening national competition authorities.
First, policymakers need to implement reforms to make trade easier and less costly, many of which are enshrined in the World Trade Organization’s
Trade Facilitation Agreement.
By reducing physical contact between workers in the shipping industry, such reforms, which rely on modernizing trade procedures, would also make
supply chains more resilient and protect employees better.
Shortly after COVID-19 struck, UNCTAD provided A 10-point action plan to keep ships moving, ports open and trade flowing during the pandemic.
The organization has also joined forces with the UN’s regional commissions to help developing countries fast-track such reforms and tackle trade
and transport challenges made evident by the pandemic.
Second, policymakers need to promote transparency and encourage collaboration along the maritime supply chain to improve how port calls and
liner schedules are monitored.
And governments must ensure competition authorities have the resources and expertise needed to investigate potentially abusive practices in the
shipping industry.
Although the pandemic’s disruptive nature is at the core of the container shortage, certain strategies by carriers may have delayed the repositioning
of containers at the beginning of the crisis.
Providing the necessary oversight is more challenging for authorities in developing countries, who often lack resources and expertise in interna-
tional container shipping.

35 SOURCE - unctad

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