Kartik Nagarajan in conversation Bhavesh Shah
Kartik Nagarajan is the Managing Director of Business Consulting and Global Business Services at Nexdigm.
Bhavesh Shah is the Vice President of Finance and Operation Excellence for Global Emerging Markets as well as the Commercial Leader for North Asia at ConvaTec.
This feature is a CFO’s take on the underlying factors that bring value to supply chains. Bhavesh Shah highlights factors such as supplier loyalty, interconnected ecosystems, balancing costs, guiding principles, and versatility that is required to build and run a robust supply chain.
Change and communication have been one of your focus areas. How have you been able to manage relationships and yet have regular communication with the customer in the virtual world?
“COVID-19 has taught us many things that we had not envisaged in the past few decades. The virtual world has opened up a lot of avenues in the digital space, and we must capitalize on the same. One of the things that we have today is a connection through technology, the way we are connecting today without having physical contact. We must ensure our ecosystem is well connected. Customers can connect to us via phone, email, websites, or log in to our webinars…” said Bhavesh.
He also emphasized how grabbing every opportunity to meet the client in person is important and mentioned that one should not merely depend upon virtual interactions.
If you had a chance to travel back in time to January 2020, what would you have done differently?
“I have thought about it a couple of times! At Convatec, we had embarked on a major transformation, and for that purpose, we aligned ourselves to a few key principles. We call those principles FISBE – F as in Focus, so focus on a few things. I as in, Innovate – people think innovation is only left to R&D, but one can innovate in the supply chain, marketing, and even in finance. S – Continue to Simplify. B – Build capabilities and finally, E – Execute excellence. Lastly, keep a keen eye on talent. Motivating associates and connecting with them by trying to find a common sense of purpose would be something I would have done differently.”
Recently, we’ve seen a huge surge in global supply chain costs. How have you and your organization been able to cope with the change, and what measures have you taken to maintain a healthy balance between inventory, stock-outs, and other cost factors?
“Supply chain and logistics costs are a nightmare. I think the payments that we are making are not merely 10%-15% higher, but some of the payments are 20x higher than what we made a few months back. Not only that, even after paying so much, there are not many suppliers available. For us at ConvaTec, we held on to the FISBE model, focused on a few markets, and protected them. Besides that, it is important to invest in end-to-end visibility tools. Ensure end-to-end visibility right from your end-customer to your intermediary, to your sales representative, to your ERP, and your sourcing and procurement. This ensures a top-level view, and any change in one leg of the whole value chain is immediately known to the other side of the value chain. Another important aspect is to constantly work with supply chain and procurement stakeholders on any gaps that could be resolved. One has to be careful about the allocation process across markets. Last but not least, simplify the portfolio to the extent possible. Try and eliminate small-value SKUs so that you focus on big items.”
What are the things you’ve been able to do as a leader and through ConvaTec to increase or invest in supplier loyalty? What aspects would you recommend to build supplier loyalty?
“Suppliers are our partners, and we work with them on anything that we want to do, whether it’s improving compliance, quality, processes – we are as much a part of their improvement process. So we treat them as partners in all respects; we treat them fairly by ensuring that they are paid well for anything they did and paid on time. We also recognize and reward them periodically. It’s the smaller things that are sometimes even non-material that impact how they want to partner with us in the future.”
What is your opinion on the emerging role of data analytics in inventory management?
“It can play a huge role! The amount of data analytics that we have today is something that we’ve never seen before in our lifetime. There are two or three things I would encourage all companies to do.
The first is to ensure data analytics is endorsed by the CFO and the CEO of the company because it needs to come from the top. The second is to invest in resources, whether it is infrastructure, talent, or the analytics culture, to showcase the value of analytics to everybody because not everybody is a big fan. People are used to doing things manually, and we need to show them that analytics helps you drive better decisions through the enhanced use of data. You can unlock value; you can reduce inventory; you can drive pricing; you can prevent leakages; you can create all these pilots. Analytics would be where companies will be able to differentiate themselves from others.”