In an in-depth interview with Biztech2.0, Tony Murphy, Solutions Head (Manufacturing), Datacraft, talks about the business imperatives of a successful and smooth functioning supply chain.

Could you tell us something about the global evolution of SCM?

SCM, as we know it today, is a supply chain driven by information. The role of Internet has driven connectivity across the entire supply chain, right down to the customer. In the context of today’s modern supply chain, we are looking at how a customer can give feedback on his/her requirements and expectations directly to the manufacturer. The manufacturer can then translate that into what he needs to do to produce goods and services his customers want. That really ties the entire supply chain together, from raw materials to the point of consumption. That’s really the modern supply chain: it’s driven by information, it’s global in nature, and it extends all the way down to the end user.

What are the business imperatives of SCM?

We’ve identified five key business imperatives that CIOs are adopting. The first relates to how they manage limited resources. The CIO with key partners determines which part of IT should remain within the organisation and build those up as skill-sets and competencies that are core to the business, and also decide which functions need to be outsourced. When we talk about costs, it’s interesting to look at the statistics. India's IT spend is expected to double over the next 2-3 years, from a base of about $1.5 billion to $3 billion within manufacturing – and that’s huge because we don’t see that kind of growth anywhere else in Asia outside of Japan. It’s even higher than what we see currently in China. This gives an idea as to how a manufacturer looks at IT as a catalyst for enabling his manufacturing process, but then also looking at multisourcing as a way to overcome resource constraints.

The second area is supply chain connectivity. India faces tremendous challenges; we have distributed manufacturing all over the country, dealerships, and we have connected partners all over the country and perhaps into the region as well. Supply chain connectivity – the need to share information and business processes, and provide a stable secure environment so that the supply chain itself can continue to function – is important.

The third area is about how we look at the supply chain from the perspective of real-time management. Technologies like RFID make the supply chain visible in real-time. A lot of decision-making can be done by collecting data from various points along the production line, on the shop floor, in to the back office enterprise systems and ERP, and we can bring that onto multiple dashboards to allow decision makers to be better informed and understand how to optimise their business in real-time. That’s really a key area that we see emerging.

The fourth area revolves around initiatives like six sigma or lean manufacturing. Companies in India have embraced these technologies. Regardless of the verticals we’ve worked in, we’ve seen this in automotive, electronics, CPG and in other service-related industries such as telecommunications and healthcare. Lean is the way to go, and IT plays a major role in this.

The fifth area is an all-embracing area, regarding security. Many global companies that wish to do business with Indian manufacturers and trading partners insist on compliance with international standards. This drives CIOs to keep security on the top of the agenda in terms of what happens to intellectual property, which could be in the form of CAD drawings, a particular manufacturing process or information on a particular kind of R&D. How do we protect that? On the one hand we have to share the information with our trading partners and on the other we have to protect it. Physical security, managing assets within the manufacturing arena itself, securing data and a convergence of technologies have taken place, creating complexities. But yet we need to embrace these technologies in order to comply with international standards.

What is the role of IT in SCM?

In the context of the supply chain, IT will basically offer a service. The CIO will be measured on the services that he offers to his business customers. Financial management is going to be a key area within a 2-3 year strategic plan that the CIO will draw up. I see a lot of innovation coming into that space. We like to call it lean IT, where we adopt best practices in six sigma and other initiatives like lean manufacturing, but from an IT perspective we are always looking at ways to consolidate, reduce costs wherever possible, look to optimise through better management and data collection, better monitoring and reporting capabilities, and the ability to integrate breakthrough technologies when they become available.