Digitalizing The Business of Water
Mr. N K Ranganath, Managing Director, Grundfos Pumps India shares his views on making supply chain more agile, responsive and efficient.
Tell us about your overall digitalization strategy. Are you digitalizing your supply chain to increase operational efficiency or to bring competitive edge?
We are ambitious with our digital journey. We believe that digitalization holds huge potential to create additional value for our customers and vendors, to build new businesses for Grundfos and make us a company easy to do business with. We want to interact and connect to our vendors, customers and end-users in a more relevant, simple, seamless and effective way across entire value chains. Through digitalization we intend to improve our supply chain for it to be more agile, responsive and efficient. The idea is to ensure that we lower lead times and stocks both at our end and at our vendors’ end and get rid of non-value adding manual processes.
What are the key challenges that you are facing while digitizing your financial supply chain?
The inability to ensure all processes are digitized from end to end is the biggest challenge. There is always some area in which manual work and interference is necessary. We also see challenges in communication between the different kinds or type of systems and platforms our customers and vendors use.
Some of the examples are;
Demand Drafts /Pay orders for a few government orders are still required as physical instruments and needs to be collected manually at branches, even though all the formalities are compiled online.
Bank Guarantees are still issued in manual form and this should be moved to digital platform, perhaps a demat form.
It’s difficult to use Electronic Data Interchange (EDI) when our vendors or customers are operating on a different platform for which we have created an extranet but it means keying in orders/data twice, once in their own ERP and once in our extranet which the customers are reluctant to do as it is non-value added work.
Online account reconciliation is also an issue when platforms differ and when companies do not allow other companies’ access through their firewall due to security reasons. This means a lot of manual work.
What are the issues that you face in payments and collections? How have you tried to address them through technology?
The situation is better here. We have moved most of our channel partners/customers and vendors to online payment. Here the main challenge we have faced is lack of diligence. For example, the reference number of invoices when not tagged with payments, hampers reconciliation and needs to have manual offline data collection and entry into the ERP system.
Though most banks offer an online platform for import payments there is still a requirement for physical documents. It would be good to see if the entire process is digitized.
Can you tell us some of the benefits that you have derived from the digitalization of your supply chain?
The few that I can think of are, improvement of end-to-end supply chain visibility and an agile supply chain system.
Our value chain is fully digitally enabled to deliver better and faster services to enhance our competitive advantage.
Digitalization has improved our data analytics and that has significantly improved our decision making ability and quality.
Customers through the extranet can track the progress of their orders. Through Track and Trace facility our customers can track the whereabouts of the products when it is dispatched from our factories.
How is digitalization helping in cost optimization and increasing operational efficiency of manufacturing for you?
First, with a clear overview and analysis of costs including purchase costs we are able to easily save costs and be efficient. Secondly, the planning process has improved with better visibility of expected orders, existing stock and goods ordered which enables us to reduce our stocks thereby reducing the net working capital. We are on the journey to create a “Factory of the Future” mainly to improve the consistency of quality in our products, create visibility and transparency in the manufacturing process and make the work place a much safer one for our employees. Digitalization has also improved productivity and the flexibility of our assembly lines. We also see an improvement in quality and process reliability with reduced human errors.