“INDIVIDUAL ASSIGNMENT

Post Graduate Diploma in Management (General)

2019-21

Submitted by:

Rachit Rathi
PGFC1925

Under the guidance of:

Dr. Keshav Sharma

Assistant Professor
JIM, Noida

6th Oct, 2020

 Supply Chain disruptions due covid-19 pandemic

 COVID-19 has impacted the supply chains across the world. According to a report by
Accenture Out of fortune 1000 companies ,94% are facing supply chain disruption even
many firms struggled to maintain the constant flow of goods and services which are
required by customer this is due to suppliers temporarily stopped the production and
logistics providers are facing difficulty in transporting goods seamlessly.

 Supply chains constantly facing many barriers whether in frozen foods. Groceries or
services. In automobile sector also many companies like Fiat, Hyundai temporarily
stopped their production in cars in many countries because they are not getting
automotive parts from china who manufactured more than 30% automotive parts.

What remedial measures companies should take to build capabilities in their

Supply Chain 
Immediate measures which companies can take:

Source: Accenture report

1. Put people first: Keep workforce safe and productive by encouraging innovative ways of working.
2. Leverage data to improve visibility: Maximize visibility across the ecosystem for demand,
inventory, capacity, supply and finance.
3. Define segmentation to prioritize demand: Carefully evaluate the demand and define
micro-segments.
4. Build a sales and ops SWAT team: Mobilize specialized preparation and implementation
teams capable of effectively undertaking various interventions and organizing responses.
5. Evaluate supply chain scenarios: Simulations are conducted to forecast when and where
excesses and shortages are likely to occur and to conducted end-to - end simulations to gain
actionable insights that maximize operational metrics.

Long term action:

1. Perform end-to - end risk assessments of the supply chain and prioritize critical
focus areas:
o Recognize: Changing levels of demand and inventory to find essential
availability, production capability, warehousing and transportation gaps.
o Define:  An actionable short-term and outcome-driven resilience strategy with
supply chain ecosystem breakdown activities aimed at efficiently and effectively
utilizing additional networks between the development and distribution networks
of different suppliers.
 o Deploy: In order to limit the effects of disasters, leading organizations create
action plans based on scenario analyses. A fact-based dashboard, including
aligned key KPIs, helps to create visibility within the organisation and ecosystem.
This can assist a business to dynamically re-prioritize its plans as needed.

2. Establish a comprehensive risk management process and diversify the network of

suppliers: Enterprises should map supply chain networks to Tier-N suppliers from end
consumers. Companies should develop a methodology to quantify risk for each supply
chain node / arc-like channel, warehouse, factory, supplier, or transportation mode.

3. Implement digital and automated manufacturing capabilities coupled with strong

excellence in manufacturing: Leverage automation and IoT solutions to mitigate
dependency on labor intensive processes for smart manufacturing operations. A strong
manufacturing excellence programme enabled by digital technology will allow daily
work and job help to be streamlined, relieving the burden of relying on individual people
to conduct an activity. IoT capabilities can help foster a digital connected systems
ecosystem that offers appropriate and updated data to users to make the most informed
decision at any given time. Automated manufacturing capability would allow a company
to use interchangeable staff to operate a manufacturing operation and reduce labor
requirements.

4. Evaluate and adjust procurement category strategic priorities: Transform

procurement into a value generation function via timely reviews and adjust category
strategic priorities to define new business relationships with suppliers to meet the
company’s overall supply chain objectives. An agile procurement operations system
enabled by various technologies and factoring category strategic priorities across
variables such as cost, quality, delivery, innovation, etc. will also help drive resiliency.
Companies can introduce digital procurement technology to benefit from supplier social
networks. Implementing a supplier social network in sourcing and supplier lifecycle
management can strengthen sourcing capability and supplier collaboration in challenging
circumstances.
 5. Estimation of Available inventory: Estimating the available inventory also can reduce
supply chain disruptions.

Source: McKinsey & Company

Impact of GST implementation on Indian Logistics sector

Indian Logistic sector before GST: To understand the post-GST system, it is important to give
a glimpse of the pre-GST logistical scenario in India. Inbound, outbound output segments and
the supply chain in India constitute the logistics industry. Value added logistics, freight
forwarding, warehousing, transportation, further divided into rail, road, air and water, are the
different segments of this industry. In India, the logistic cost was higher than in many countries
for different serious problems. The complex tax system was one of these issues; five taxes were
in place, namely Excise Duty, Service Tax, Sales Tax / VAT / CST, Customs Duty and Entry
Tax / Entertainment Tax. In addition, any freight that travelled to 29 Indian states was taxed
multiple times according to different geographical locations.

The Indian Logistic sector after GST: GST is going to have a greater impact on India's
logistics industry in the following fields:

Burden of interstate tax: The pre-GST complex tax system had previously been a major burden
for transporters as they were required to pay indirect taxes at different rates in all of India's 29
states. In addition, in every inter-state good move, 2% corporate tax was collected. However,
GST, irrespective of any geographical differences, has brought a single tax structure across all
nations. Thus, the previous tax burden has, comparatively, reduced to a large extent.

Moving towards an organized sector: GST inspires the major players in the industry to build
and manage the entire supply chain. This new tax system discourages small and medium-sized
market players but turns the logistics industry into an organized structure at the same time.

Logistics can become faster: Because of to the complex indirect tax system, the trucks were
delayed to arrive at their destinations on time prior to the introduction of the GST. But the GST 's
standardized tax structure has reduced the time needed for transport. For transporters, the
responsibility of border inspection posts is no longer a headache. This, along with quick
deliveries and low logistics costs, improves the industry's operational performance. The World
Bank reported that by removing tolls and check posts, India can save up to 30-40 percent of
logistic costs.

Change in warehousing pattern: The messy supply chain is made easier than ever by
centralized warehousing and an integrated tax system. The framework for warehouse
optimization minimizes both inventory and logistical costs. This logistical expense is projected
to be reduced by 1.5-2.00 percent.
The GST tax rate is 18 percent for air freight (export), warehousing and e-commerce, while the
indirect slab pre-GST was 15 percent. The 5% GST slab is chosen for road transport and ocean
freight services. An e-way bill for smooth truck movement has been introduced by the
government. In accordance with GST, industry players are updating their supply chain strategies.
For an unorganized such as logistics, the difference between compliance needs and operations
takes a lot of handholding to understand. An optimal time for the industry to move on to an
entirely new tax system, such as GST, is a minimum of six months.

Differentiate between 3PL, 4PL and 5PL logistics service providers

Third party logistics: 3PL is a service that enables you to outsource warehousing operational
logistics, all the way to delivery, and eventually allows you to concentrate on other areas of your
business. Any number of services related to the logistics of the supply chain are offered by third
party logistics firms. This involves shipping, warehousing, picking and packing, forecasting of
inventory, fulfilment of orders, packaging and freight forwarding.

Advantages of 3PL:

3PL results in Cost savings, for ex-No need to maintain a warehouse or staff to track supply
chain activities, are the key advantage of using a 3PL service to manage logistics, such as
packaging, storage, delivery and distribution. A 3PL service is likely to deliver better results on
efforts such as shipping while also enjoying a smoother option to scale its activities. If, in the
above case, the publishing company unexpectedly wants to ship more copies of a famous title, it
would be easier for a distribution center to satisfy the demand than if the publisher itself had to
ship extra copies of the book.

4PL: Fourth-party logistics differs in the following ways from third-party logistics:
 o 4PL is mostly a separate entity established by a joint venture or other long-term contract
between a client and one or more partners.
o 4PL is an intermediary between the client and various providers of logistics services;
o preferably, all aspects of the supply chain of the customer are handled by 4PL.

Advantages:
For a long time, the outsourcing of transport through the 3PL route has been an effective way to
minimize costs, leverage knowledge and enhance processes. Although this continues to provide
advantages for many companies, as multi-service providers, 4PLs are growing in popularity,
allowing a company to outsource its entire transport operation, from planning through to
reporting.

5PL:
5PL is a new concept circulated within the supply chain industry, almost the same as 4PL. On
behalf of the contracting organisation, a 5PL will prepare, coordinate and execute logistics
strategies with a focus on using the most suitable technologies. Basically, a 5PL manages supply
chain networks with a broad e-business focus for all logistics activities, other than 3PLs and the
parent company.