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ACHIEVING THE INCLUSIVE AND SUSTAINABLE GROWTH THE ROLE OF SUPPLY CHAIN
A Synopsis by Rahul Jain & Ageet Kumar Team BSES Yamuna Power Ltd

The theme & Points of Discussion

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Introduction What is Supply Chain? What is Customer Services? How Efficient Supply Chain affect Growth? A Case Study BSES Yamuna Power Limited

Personal Profile
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Rahul Jain Senior Manager Procurement BSES Yamuna Power Limited CA by Education, Negotiator by Profession. CA, CSCM, B.Com (H) , LL.B

Ageet Kumar Manager Business Accounting BSES Yamuna Power Limited CA by Education, Management Accountant by Profession. CA, MBA (PM), B.Sc

WHAT IS SUPPLY CHAIN?

Supply Chain (SC) Definition

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Modern SC View An effective SC ensures high level of Customer Service at optimum level of working capital and cost! So simple yet extremly demamding...... Business SC view an efficient supply chain that ensures products are on the shelf, available for sale, when Shoppers come to buy them ... all the time!

Supply Chain Management Evolution

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From


disconnected.

Exclusively focus on growth/cost.  Separately managed functions.

To


integrated.

End-to-end process approach.  Customer focus, profitable growth, liquidity, functional integration.

Why implementing a Supply Chain approach?

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Poor service

Not 1st. in class

Its all about Managing Expectations..

Empty shelves Poor forecasting

Key Operational Functions under One Umbrella & Streamlined

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Supply Chain Concept

Demand & Supply Planning

Data Integrity

Order & Query Mgmt

Stock Mgmt

POS & Display

W-housing & Delivery

Invoicing & Cash Collection

CUSTOMER FOCUSSED
Supply Chain is integration of our business processes and organisations around the entire demand and supply chain in servicing our customers and managing our inventories

Customer Execution Planning

Demand Planning
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Demand Planning Supply Planning

Order to Cash

Business Information Management Warehousing

& Distribution

Supplier

Creation of a Base Forecast

Based on distributor stock, GIT, Lead times & Market/Sales intelligence Ensuring forecast is cleansed and integrity in terms of coding, quantities and market relevance is achieved. Ensuring through planning that the forecast is consistent across lags to get to stable and accurate forecast. Reporting DP KPIs Major Variances Detailed Variance Reportings with root cause analysis

Ensuring Forecast Integrity

Ensuring Forecast Consistency

Reporting

Customer Execution

Supply Planning
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Planning

Demand Planning Supply Planning

Order to Cash

Business Information Management Warehousing

& Distribution

Supplier

Inventory Management Planning promotions Planning product customisation New Products co-ordination Avoiding Excess stock Phase-in/phase-outs MPS - master production scheduling Stock allocation

S&OP is Joint Accountability

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S&OP Disconnected vs. Integrated

13 Marketing: Customer Development: Financial Planning Demand Forecasting & Planning

the promotion will sell 400

Debtor mgmt

we can sell 200

Supplier mgmt

one consensus plan

Customer Development

Category

Manufacturing Manufacturing:

they will only sell 150

Finance:

Customer Service & Distribution

we have budget of 300

An Efficient Supply Chain for Efficient Customer Service

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We have understand what is Supply Chain & its main components An Efficient Supply Chain through Effective Sales & Operations Planning Effective Supply Chain will result into Best Customer Service Better Customer Service will result into Inclusive & Sustainable Growth Resultant will be increase in Net-worth of the Organization with integration and synchronization of interests of all the Stakeholders

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WHAT IS CUSTOMER SERVICE?

Our customer's are not

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NOT this
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But more like this

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What is customer service

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CS Operations

Business Planning

Exceed customers expectations In all areas Consistently every time Exceed customers expectations In a few areas Consistently every time
Meeting the Customers Expectations - every time

CS Strategy

UNDERSTAND what your customer wants And what you can give them

To enhance Customer Service and align demand with supply

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Responsiveness (Reliability; Quickness; Flexibility; e.g., Dell, Overnight Delivery Services)

Competitive Advantage through which the company market share is attracted Cost Leadership (Price; e.g., Wal-Mart

Differentiation (Quality; Uniqueness; e.g., Luxury cars, Fashion Industry, Branded v/s Generic Drugs

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WHAT IMPACT SCM MAKE ON SUSTAINABLE & INCLUSIVE GROWTH?

Inclusive & Sustainable Growth Role of Supply Chain Management

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Impact of Efficient SCM on Organizational Growth

Financial Impact Sustainable Increase in Demand Increase in Profitability Efficient Working Capital Availability of More Cash in Supply Chain

Non-Financial Impact Forecast Accuracy Order Accuracy Invoice Accuracy On-time Shipment & Delivery Customer Satisfaction Brand reliability Goodwill

Inclusive & Sustainable Growth - Role of Supply Chain Management

Financial Impact Sustainable Increase in Demand

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Meeting the Customer Expectations Every Times

Exceeding the Customer Expectations in few Area Every Times

Exceeding the Customer Expectations in All Areas Every Times

Customer Satisfaction

Sustainable Increase in Demand for the Product/Service

Increase in Revenue

Inclusive & Sustainable Growth - Role of Supply Chain Management

Financial Impact Increase in Profitability

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Efficient Supply Chain increase the profitability in two ways On one side it increase the revenue by increase in the demand with Efficient CS (we already discussed) On the other side, by reducing the Cost to Serve; as-a-whole, thru bringing the efficiency in pre, post & production cycle of the product. Efficient SCM reduce the VC of Production, which directly impact the Profitability The Sole Object of SCM is all about providing the Right Product at Right Time & Place to the Right Person

Inclusive & Sustainable Growth - Role of Supply Chain Management

Financial Impact Efficient Working Capital

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S&OP optimise demand & supply

Managed Inventory

Ease the pressure by lowering the overall weighted cost of capital Reduce pressure on AR/AP & Cash Management

Inclusive & Sustainable Growth - Role of Supply Chain Management

Financial Impact Availability of More Cash in Chain

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An Efficient Supply Chain Means: Managed Inventory Minimum Investment in Inventory, more liquidity Just-in-time Cash Thru Efficient SCM, organization can forecast the availability of cash from sales more accurately. Reduce Cash-to-Cash Cycle Efficient Procurement, Production, Ordering, Delivery reduce the Cash-to Cash Conversion cycle

Inclusive & Sustainable Growth - Role of Supply Chain Management

Non- Financial Impact

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Forecast Accuracy Order Accuracy

Brand Reliability

Invoice Accuracy

Customer Satisfaction

On Time Shipment & Delivery

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This Growth will NOT be Sustainable? UNLESS

The Sustainable Growth

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Technological Innovations

Environmental Protection

KEYS to make the Growth SUSTAINABLE

Safety Measures

CSR Green Procurement

Keys to Sustainable Growth

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Environmental Protection - Implementation & Maintenance of International Standards in Environmental Protection; e.g.  Implementation of ISO 14001:2004; to provide a framework for a holistic, strategic approach to the organization's environmental policy, plans and actions.  Implementation of ISO 14004:2004 provides guidelines on the elements of an environmental management system and its implementation, and discusses principal issues involved Safety Measures - Implementation & Maintenance of International Standards in Safety & Occupational Hazard; e.g.  Implementation of OHSMS (ISO 18001) promotes a safe and healthy working environment to consistently identify and control its health and safety risks, reduce the potential for accidents, aid legislative compliance and improve overall performance.

Keys to Sustainable Growth

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Green Procurement Procurement of Environmentally preferable goods and services; like those good and services that have a lesser or reduced impact on the environment over the life cycle of the good or service, when compared with competing goods or services serving the same purpose. Environmental performance considerations include, among other things:  The reduction of greenhouse gas emissions and air contaminants  Improved energy and water efficiency;  Reduced waste and support reuse and recycling;  The use of renewable resources;  Reduced hazardous waste;  Reduced toxic and hazardous substances.

Keys to Sustainable Growth

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Corporate Social Responsibility- Business affects many different people employees, customers, suppliers and the local community. We should limit to just cutting the costs and boosting the sales. We should think about the Society as a Whole.

Technological innovations Automation is to be promoted.

Implementation of new technology will improve/speed up the processes and it put the organization ahead of its competitors. But implementation of new technology must be subject to its cost & benefit analysis.

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ROLE OF SCM IN UTILITY INDUSTRY? CASE STUDY BSES YAMUNA POWER LTD
(INTO THE BUSINESS OF ELECTRICITY DISTRIBUTION IN CENTRAL & EAST DELHI)

Case Study: Role of SCM in Utility Industry BSES Yamuna Power Limited
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1. BSES Yamuna Power Limited; a subsidiary of Reliance Infrastructure Limited, took over the business of Electricity Distribution in East & Central Part of the Delhi in July 2002. It was a PPP model, a joint venture between Reliance Infrastructure & Delhi Government, with management in the control of Reliance Infrastructure Ltd. 2. Here, in the case study we are presenting the growth BSES Yamuna Power Ltd (referred as BYPL hereinafter) has witnessed. This growth is a true example of implementation of SCM, efficiently in a Utility Business. 3. Implementation of Efficient SCM has given manifold growth to the business, which can be summarized into following two main categories:

Power Supply to Consumers

Internal Operations & Maintenance

Case Study: Role of SCM in Utility Industry BSES Yamuna Power Limited Power Supply to Consumers
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Power Supply Condition; before BYPL took-over:

1.At-least 10-12 Hrs of power cut daily. 2.Poor Power Quality (i.e. Low Voltage, Voltage Fluctuations etc); which caused the damages to Consumers Electric Equipment. 3.No Process for Demand Forecasting. 4.No open market procurement. 5.Lack of Integration/coordination between Power Procurement and Power Distribution Departments. 6.No Integration among Power Supply Grids/Sub-stations.

Case Study: Role of SCM in Utility Industry BSES Yamuna Power Limited Power Supply to Consumers
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Power Supply Condition; before BYPL took-over leads to following situations:

1.Long Power Cuts leads to Consumer Dissatisfaction resulting into huge No-Supply Complains 2.Commercial/Industrial consumers were forced to arrange alternatives; e.g. DG-sets, which also resulting into Air as-well-as Noise Pollution. 3.On the same line. Domestic Consumers were also forced to arrange the Invertors/ battery operated appliances for light, fans etc. 4.Huge Technical & Commercial Losses, which was burden on the exchequers. Ultimately all these situations were the basic reasons for the lack of Industrial growth in the region & also the living standard & general living satisfaction of the residents.

Case Study: Role of SCM in Utility Industry BSES Yamuna Power Limited Power Supply to Consumers
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Power Supply Condition; Implementation of Efficient SCM by BYPL:

1.Power Procurement and Power Distribution Departments were Integrated for better Planning & Coordination. 2.A Demand Forecasting System was developed & successfully implemented, on the basis of Historical data & Planned Future Projections. 3.A process was developed for Short-Terms/open market Power Purchase, to meet additional demand.

Case Study: Role of SCM in Utility Industry BSES Yamuna Power Limited Power Supply to Consumers
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Power Supply Condition; Implementation of Efficient SCM and How it Turnaround the Business?:
1. Accuracy in Demand Forecasting 2. Efficient / In-time arrangement of Power Supply 3. Gradual Reductions in Power Cuts resulting the Reduction in Consumer Complain 4. Noise of DG-sets vanished. 5. Industrial Growth in terms of Expansion and Set-up of new Units. 6. Improvement in the Status of the Society as General

Although it has Negatively Impacted the Followings too: 1. Negative Growth in DG/Inverter/Stabilizer Manufacturing Industries 2. Increase in Electricity Consumption led to High Electricity Bills

Case Study: Role of SCM in Utility Industry BSES Yamuna Power Limited Operations
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Operational Conditions; before BYPL took-over:

1.Indefinite Time for replacement for Burnt Transformers/Meters/Cables etc. 2.Recurring Break-downs in electricity supply due to lack in replacement of Old Conductors on Time. 3.Delay in the Augmentation of Transformers & related equipment due to improper planning of material availability 4.Huge No-Supply Complains due to Faults 5.Meters Installation Cycle was long due to shortage of Equipments.

Case Study: Role of SCM in Utility Industry BSES Yamuna Power Limited Operations
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Operational Conditions; Implementation of Efficient SCM by BYPL:

1.Integration of O&M Departments with Stores Department with implementation of ERP Tools. 2.Efficient MRP System was installed

&

Procurement

3.Levels of Inventory was set-out for the Essential Equipments; e.g. Transformers, Cables, Meters etc. 4.Periodic Review of Stores and Demands from O&M Department 5.Implementation of VMS at Procurement Department

Case Study: Role of SCM in Utility Industry BSES Yamuna Power Limited Operations
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Operational Conditions; Implementation of Efficient SCM and How it Turnaround the Operational Conditions?:

1.Prompt replacement of Burnt/ Defective Transformers/Conductors /Meters etc. 2.Seasonal Preventive Maintenance Drives was undertaken to prevent breakdowns, faults. 3.Planned Augmentation of the System based on the demand forecast. 4.Prompt Installation of the meters for new connections. 5.Drastic reduction in the consumers complains

Case Study: Role of SCM in Utility Industry BSES Yamuna Power Limited Operations
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Contribution of BYPL towards green environmentMore availability of power reduced air and noise pollution Sending bills on emails accepting payments through credit card and internet banking Acknowledging complaints over emails and call centre and sending resolutions through e-mails and sms to reduce footfalls.

Case Study: Role of SCM in Utility Industry BSES Yamuna Power Limited
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How SCM impacted the Growth

1.The Sales of the Company has increased more than 5 Times 2.The AT&C Losses has reduced by 65%

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