Supply Chain Management – A Guest Lecture by Mr. Rajeev Saxena, COO, Agility Logistics

Agility

1st August, 2014: TAPMI played host to Mr. Rajeev Saxena, Chief Operating Officer of Agility Logistics. Agility is today, one of the world’s largest logistics providers with operations in 100 countries. The company hires 20000 employees and is a pioneer in integrated logistics solutions, helping businesses create and run efficient supply chains. The company boasts of various accolades and several high profile clients.

Mr Saxena is a seasoned specialist in the Supply Chain domain, having worked for over eleven years with Agility and eleven years with L&T before that. He holds a post graduate degree in International Business. He also went through IIM Ahmedabad’s Management Development Programme (MDP), again specializing in Supply Chain Management (SCM). When he is not busy solving supply chain problems for Agility, he delves into teaching – Mr. Saxena is a visiting faculty in various colleges, and teaches Logistics and Supply Chain Management, Productivity Management and Business Process Re-engineering.

After introducing himself, Mr. Saxena posed a question: “why even talk about SCM?” He then explained that there are only two ways for a company to increase profits – one, to increase the top line that is revenue, and two, to impact the bottom line by reducing costs. And SCM does precisely that, it cuts costs! As per him, when the top line revenue enhancement by increased sales becomes difficult, invariably, cost optimization by designing and maintaining efficient supply chains becomes vital. He also highlighted that there is great opportunity in the Supply Chain domain in India, as logistics costs in India are significantly higher than the global average.

At this point, Mr. Saxena made an interesting analogy. He likened the Supply Chain to the human circulation system. The human circulation system, according to him is the “perfect” supply chain. It sends the right material in the right quantity at the right time to the right place, at all times, at the lowest cost! A very refreshing and unusual analogy, but it made perfect sense and drew appreciation from the TAPMIans.

He emphasized that a good Supply Chain design is all about a balance between level of customer service/response and the cost incurred to provide that level of service. The optimal balance varies between companies, and each company has to find its own optimal balance. He further deliberated on this point by highlighting the two types of Supply Chains: the Cheetahs which rely on high speed of response to customer needs and economies of scope, and the elephants, who do not require such a high level of responsiveness and instead rely on customer loyalty and economies of scale.

Mr. Saxena also some spent some time to talk about the outsourcing of logistics. He talked in particular about the emergence of third party logistics (3PL) providers and even mentioned about the latest trends, such as 4PL, 5PL, and 7PL. Regarding the decision to outsource the management of supply chain, he stated that the real challenge is the issue of trust – client companies find it very difficult to trust the service providers with such a critical aspect of their business.

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Mr. Saxena concluded the session with a Q&A session. The TAPMI students posed several questions, ranging from the challenges in managing international logistics to the impact of GST (Goods and Service Tax) on the Supply Chain industry, and even regarding the impact of 3D printing on the Supply Chain industry. Mr. Saxena answered all the questions with aplomb and clarified all the doubts.

To finish off, he talked to the students about the importance of EQ over IQ. IQ can help you get into an organization, but only EQ will keep you there! Also, Mr. Saxena gave an interesting insight into SQ i.e. Spiritual Quotient, which in his opinion was a good way to handle the stressful routine of a daily work life. He concluded the session to a generous round of applause from the TAPMIans.

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