The telco supply chain: 'enabler' or risk to profitability?
Operators should get serious about their supply chains, which are increasingly complex given today's products and services
As companies come out of the recession, they increasingly ask what they can do with their supply chains to increase revenue, improve profitability and further differentiate from competitors. To answer those questions, supply chain professionals from Infosys Technologies, Oracle Corp., and Peerless Media Research will next week explore these challenges during a webcast entitled “Achieving Supply Chain Excellence in the High Technology Industry”—a topic relevant to telecom operators under pressure to increase product sophistication and complexity, while simultaneously having improve fulfillment efficiencies, and customer and supplier collaboration.
“Today, there is a need for connecting all functions, end-to-end, in a supply chain reference model that runs along business functions,” said Gopi Krishnan, head of supply chain management, Infosys. The company is one of India’s largest IT and software companies, well known for its systems integration work within large telcos like BT.
“In today’s market, you cannot afford to be detached from any part of the supply chain. You cannot afford the revenue loss of canceled orders all because you didn’t notice inventory levels were dropping, or because you did not adequately monitor back orders,” said Krishnan.
What’s needed is visibility of the entire supply chain, and tools that identify and then broadcast early warnings and alerts. Dynamic, intuitive dashboards should help key people see problems ahead of time and help them to act proactively, not only to better manage the customer experience, but also to better control carrier costs on the retail and B2B sides of their businesses.
“The key functions to automate in comprehensive frameworks include: planning, sourcing, procurement, warehouse management, transportation, order management and asset management—all part of the supply chain, and each relevant to the products carriers deploy and manage,” explained Krishnan.
He believes operators need frameworks and systems capable of managing the ‘buy side’ of their businesses, such as forecasting and planning, which are connected to procurement, transportation and warehouses. And the ‘sell side’ as well, where there are orders from different channels, whether retail stores, call centers or Web sites. Critical to this is supply chain collaboration, as collaborative relationships with large and small suppliers will increase in number with next-gen products. “Some partners will have sophisticated IT infrastructure and data exchange capabilities, while others may be small and unsophisticated, yet capable of disrupting the entire supply chain,” noted Krishnan.
The more operators can automate the entire chain, using efficient data exchange processes where possible, and possibly online and Web-based tools for smaller suppliers, then the better the chance they can reduce overhead and the number of resources used to manage processes. “To capture someone who comes into a store, a call center or an e-commerce site, operators need greater access to their inventories and broader fulfillment options to take orders from the entry point to delivery at the home or enterprise, and beyond,” said Krishnan.
Whatever can be done to make the turnaround faster will improve sales and cut costs. “You want to know how much to keep at stores, or in warehouses or supplier warehouses so that you can cut down on ‘holding costs’ and improve your number of ‘right-first-time’ orders, thus reducing your return orders or cancelations,” he added.
While much of the focus is on the chain of processes from inception of an order to its consumption and then decommissioning at the end of its life, there is a “beyond” to manage as well. “You have the four ‘R’s: Return, Repair, Refurbish, Resell,” said Krishnan, noting the potential for “green initiatives” if operators better manage and therefore extend the life of their products and services through re-use. “In telecommunications, end-of-life and product recycling times are pretty predictable [about every two years for example for cell phones], there can be more done to market new products to replace the ones that are on their way out, as well as to recycle and resell those that are being given up.”
If devices are to be returned or thrown away, service providers can do more to manage the lifecycle processes pertinent at the end of a device or service’s life, where it can be passed on to another. “There are so many components not only in a device, but in towers and other equipment, that, broken down. can have value if refurbished and enhanced rather than going to a landfill.” For that to be possible, Krishnan notes that service and order management, as well as sales, have to come together. “Worth noting is the fact returns and refurbishing on the retail side will be different than on the B2B side, where there can be multiple levels of procurement, transportation, logistics and order management to watch.”
In addition to presenting new opportunities for shortening lifecycle times for better customer satisfaction and operational efficiency, better supply chain management can also mean much better preventive maintenance. “For example, in managing towers in disparate locations, knowing the sequence of orders and the instrumentation used means preventive measures can be taken on equipment, regardless of location. If a tower is 100 kilometers away, you can better manage spare parts or work orders for better asset management and less manual intervention,” explained Krishnan.
In the end, this type of preventive maintenance, coupled with proactive monitoring and management of the entire lifecycle of products, services and equipment, gives operators a better chance of improving profitability and resiliency while reducing risk and unnecessary operational costs.
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© 2013 Penton Media Inc.
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