Leaders in Supply Chain and Logistics

#49: Vikram Agarwal Chief Supply Chain Officer of Avon

July 23, 2019 Radu Palamariu Season 1 Episode 49
Leaders in Supply Chain and Logistics
#49: Vikram Agarwal Chief Supply Chain Officer of Avon
Chapters
Leaders in Supply Chain and Logistics
#49: Vikram Agarwal Chief Supply Chain Officer of Avon
Jul 23, 2019 Season 1 Episode 49
Radu Palamariu

Vikram is a seasoned supply chain professional with a career spanning 30 years in the industry. He is responsible for leading the continued roll-out of Avon’s new Supply Chain transformation plan, aimed at delivering improved service and significant savings to fuel company growth.

Discover more details here.

Some of the highlights of the episode:

  • The difference between direct selling and FMCG supply chains
  • How Avon successfully reduced its total number of SKU by 35%
  • Reducing inventory by 20% while improving service to 800 basis points
  • Differences between Avon supply chains in different parts of the world
  • How Avon transformed from one-day delivery to one-hour delivery in certain markets
  • Global trends shaping supply chains in different parts of the world
  • Gender diversity in the organization and generating better livelihood for women.


Follow us on:

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Show Notes Transcript

Vikram is a seasoned supply chain professional with a career spanning 30 years in the industry. He is responsible for leading the continued roll-out of Avon’s new Supply Chain transformation plan, aimed at delivering improved service and significant savings to fuel company growth.

Discover more details here.

Some of the highlights of the episode:

  • The difference between direct selling and FMCG supply chains
  • How Avon successfully reduced its total number of SKU by 35%
  • Reducing inventory by 20% while improving service to 800 basis points
  • Differences between Avon supply chains in different parts of the world
  • How Avon transformed from one-day delivery to one-hour delivery in certain markets
  • Global trends shaping supply chains in different parts of the world
  • Gender diversity in the organization and generating better livelihood for women.


Follow us on:

Instagram: http://bit.ly/2Wba8v7
Twitter: http://bit.ly/2WeulzX
Linkedin: http://bit.ly/2w9YSQX
Facebook: http://bit.ly/2HtryLd

Radu Palamariu:   0:00
Hello and welcome to the leaders in supply chain podcast. I'm your host, Rod a problem. Are you managing director of elk? It global. Our mission is to connect the supply chain ecosystem globally by bringing forward the most interesting leaders in the industry. And it's my pleasure to have with us today. Vikram Agarwal was the president. The chief supply chain officer of Avon Become is a season supply chain professional, with the career spending 30 years in the industry. He is responsible for leaving the continued roll out of a van's new supply chain transformation plan aimed at delivering improved service and significant savings to fuel the company's growth. Since joining Avon in early 2019 Vikram has successfully overhauled the company's customer and representative Proposition Service, offering functional processes and cost management. This part of the business touches more than 10,000 associates in the supply chain function as well as a van's footprint of in more than 50 countries. Globally is eight manufacturing sites and 50 distribution centers. Vikram joined even from Unilever, where he served his executive vice presidents flights in Africa and was responsible for a multibillion dollar regional business, including entrance splashing across 15 countries, 14 factories and 25,000 employees. And prior to this, he was also group vice president, Global home care supply genital liver, where he was responsible for direct business planning with country and regional leadership become thank you for taking the time and joining us today.

Vikram Agarwal:   1:24
Thank you. Like to be here

Radu Palamariu:   1:27
Super. So let's start the little bit, you know, a little bit the in terms of the businessman because even, obviously, is quite a different type of ah business. You have 10,000 associates that basically help you sell and distribute your products. How is managing even supply chain operations different in this respect from Unilever? And how is it similar? Maybe let's start there

Vikram Agarwal:   1:50
siding. The first thing is that if I just step back and look ATT conceptually it how everyone is organized compared to other consumer goods or maybe beautiful ex companies is that the channel is largely owned by us through our representatives who are not our associates, but certainly they represent us, and that's a force off if you like millions off sales people in our sales force around the world. So in one hand we're a channel owner, like the retailers may be, on the other hand, were a branded good stuff me like any other beauty rendered goods company. Maybe so, I think the unique thing about a one. It brings the this front end and the back and together in a sort of convergent model which, if you look at it, very few companies around the world are in that space. Either you find the retail retailers or you find the FMC G Cos. As you say, but very few were encompassing boat. Now that brings in the supply jin its own challenges because that customer base off millions of prep sedated Sze is also always Germany, unlike 1/5 CD company, where you can say that the customer base is largely static. So when you look at just as an example at forecasting, it adds another variable in the forecasting process, which is about the number off representatives you have in a particular area or region or city or country, and you're to factor that in as you plan to give your service because that becomes a very important input variables into your depart for Castaic in. In addition, this is not about serving the warehouses off a large modern trade retailer in Europe. This is about making the boxes reach people's homes. So this is about making sure that each one off the millions of absent taters with the place an order in a campaign and the campaign typically last three weeks. So every campaign every three weeks here, what millions of Replicators around the world placing their orders off, maybe $20.30 dollars, $40 equivalent consisting off 20 to 30 units. And each box has to be absolutely perfect in terms off the accuracy off, the items that they have ordered and the address to which it is delivered and on the time it is delivered. So, in a sense, everyone is around delivering boxes to the customer's homes. There is any other large Defense City company would be about delivering a track or part off a truck to a customer, And that's what really brings the complexity that short shifts the no in a one supply chain operation to really the pick and pack operations that we have A rather than any other back and operations. If you don't get that, that one right, this sort of business could never succeed NYC. Elsa, if you could get that right, that that is what you could really build as a competitive advantage. So really, I believe that the operative is wanted on the model of this country is our ability to deliver that box accurately to the customer again and again every three weeks in every part of the world.

Radu Palamariu:   5:15
And obviously the brand has been there for 130 years. So, yeah, for sure, for sure there's that. There's a high level of success, and I wanted to bring the discussion a little bit to the transformation project that you've been having for the last. The last couple of, uh, or for the last couple of writing gets months And this. I think it started last year with the open up strategy or on the focus on digital transformation, and you picked it up when you joined on the 10 2000 2019 Andi, you started with Evan. But I was curious because digital transformation is kind of like the buzzword right quick. It used to be. It still is, but you're already seeing some results in some notable projects coming to fruition within Eben and maybe you can give us an example to in terms of specifically in the splash in world what you've done and what are some of the results that you're you're getting?

Vikram Agarwal:   6:07
Yeah. So I think the first thing richer which we identify needs to be done is I would put it loosely under the banner of simplification, making ourselves simpler and leaner. Our that means is, I think we have got far too many issues. We had too many excuse. We have reduced about qualified person off our Stu count in the last since the beginning of this year, but I think we still have too many. We've got a largely to go over there, and the reason for that is once again the business model. We have around 1/3 off rescues being turned around every year as newness or invasions. I need to be careful that when you're doing that kind of situation charm that you have an absolute religion around one in one out. Otherwise you can make your portfolio absolutely too complex for anybody to comprehend on the sales side as toward the show itself and how so the first part is around. Simply think about full you're reducing a rescue. You count as a set that we have successfully reduced it by about 25% in the past eight months. The 2nd 1 is around making the whole supply chain much leader. And as soon as me and my colleagues think off a lean supply teaching, the first thing we're where our mind goes is inventory. More than mentally, you have less, more off a lag. You haven't introducing Eunice because you've got a pipeline over there that you need to exhaust before anything you can come in and more the risk you run off hurting the penal to write offs and shore. So I think the first thing which one does in order to make the supply chain Maura jail is to bring the inventory onto a level which is optimum. It can still drive service, and at the same time it's it's something which is fast moving. The trick is not about having a large wintry. The trick is about having the right inventory. So in the past one here or so, we have managed to reduce our wintry by around 20% off very rare waas. But at the same time, we've also improved ourselves by almost 800 basis points. So, really, the myth that larger and wintry means better service does not really stand writing. Wintry meets needs better service rather than a large in Madrid. So that's the second part of simplification. And the third part of simplification again in the supply chain is about having a lead foot print. What needs to be absolutely sure that which other assets in the supply chain which I were strategic merit, either on account of the geography, the country where they located all the technology or the skill, whatever the criteria, baby. But what needs to constantly keep evaluating what is really strategic in terms of the competitive edge which your supply chain has and one is non strategic and constantly they used to be a process off simplifying this and keeping to yourself or is really important and letting others do what is not. Some strategy. Yeah, and there are enough high class service for it. Isn't the world beat contract manufacturers be planning experts, so who can do the job for you as efficient manner as you can? A CZ, long as you're not dealing with proprietary technology or a geographical strategy can package. So that's about simplification, I think. Besides that, if I just drew back to open up strategy, JJ, it is also about I would call it very simply the making. Sure everything is available everywhere and every time. What guns you want when she wants it. Now, when I say every time an example of this is that we have always operated on what we call a bill plan between the representative can order only once during a given campaign off three weeks and order will be delivered. Now, we have been working on constraining that, and we've been saying that you can order it any time. So you don't need to just place an order once in a campaign on a particular day or a particle a week. Order any time and we will deliver anytime. And in fact, we have increased our what we call out off meal plan excess Bye bye. 50%. It's gonna buy 1.5 times to where it stood in 2080. The second part is everywhere, and this is about saying that we will deliver to the last consumer in her home if she wants it in a number of cases. It's the safe leaders who want her to deliver themselves or their representatives wanted to be delivered. Fine, but we need to give that optionality tow the customers that order. She want the delivery to happen and I'll come back on that. Why? I'm saying that why that is so important. But let me finish with the 3rd 1 which is everything in a portfolio which is. As for Blix, with a huge number of rescues, it is important that as far as the customer is concerned, every box she receives is complete. So we call it shorts and what we have successfully launched internally, we call it a war on shots is that we may be saying that there is only one S k you out off 4000 in a given country which is run short but right and that too a representative was received one shot out of 12 items which he had ordered. So I think it's it's very important that we get this right and we deliver every single item in time no different than the time tested principles are what we call in service as on time in full. Essentially, it's Ah exploded version of that because we're dealing directly. It's so many customers. So that's what I would have in terms off. How we're opening up strategy. Maybe just one more point is that it's the in addition, and maybe it fits in there. The part off everywhere is that we're now starting to develop business models for delivering. So the customers, even in countries where we do know power direct selling presents, meaning we do not have Brexit that countries. But still we have customers were interested in getting up products because there is a very strong brand awareness, or maybe because historically, a one used to do business in that country. So we have a welding business models to really make sure that this sort of offshore trade can still help us make up for actually those customers, I said, I will come down, come back toe everywhere and about making the deliveries to the customers directly at their choice. And the heart off the AC is an intent to make sure that our representatives are not very carriers off boxes. They're not Korea's. They're really beauti advisors. We wantto well, you add to the proposition off the representative, where 100 role is not just about ordering the box on on behalf off customers as delivering a box to her and then she carrying the individual items to the customers who had ordered in the first place. We can do that. We can do that more effectively that Earth's and more effortlessly than her. So therefore, why make their ability to do it? And if she so chooses, we would be happy to deliver the box to her customers rather than to her, so that the legwork, the physical effort out of that is taken out. And she focuses more on being a beauty adviser, properly trained as a consultant. If you like, who could go into people, which products are good for them and home? So really, that's next to me from a supply chain Lens is what open up means. Yeah, simplify and then deliver everything everywhere every time.

Radu Palamariu:   14:15
No, but it's a huge. It's a huge shift, and it's it's one. It's paradigm shift the second. The second part is obviously, if the representative no longer has to or has the option of not delivering, I think it takes a lot of hassle away a same time. That's a she was challenge for, you know, for for the selection of even to into implement. And I imagine that you've gone through it through quite a bit of of challenges to get there, and I'm sure that you're probably still in the journey. And I wanted to touch a little bit. Also on the ever increasing expectations of customers of the end customer that the delivery gets to them. Foster and Foster was in the coma swirled. You have next day at one hour you have benchmarks that are getting smaller and smaller, driven by Amazon and and and all the You know, Alibaba's of the world. How do you and what's your kind of, you know, benchmark? It's I was with a strategy right in terms of fulfillment last month. Cheap pushing those You know the envelope faster and faster to make sure that your clients and customers get the products fast.

Vikram Agarwal:   15:20
Yeah, I think the first thing is you rightly called it out is that the expectation off the customer today is that if she places an order online, let us say, then the rescue, the production be reaching there as soon as possible because remember, in her mind she's exercising an option to order online rather than walk to the nearest brick and mortar retail store and buy it from there. And she needs to be absolutely satisfying with the option that she has taken off ordering it online compared to having walked into a store and picked up tight. And therefore, if the online ordering system like ours does not deliver in time, if it is not prompt, if it is not responsive, then obviously we will adversely affect the choice. So I think if I just look at the numbers, I must first of all say that we are not with We would want to be in this aspect, but it has been improving. Between 2018 and 19 we will be shrinking our average delivery time by two days. So we used to be six days on the average globally, and I do hope that this year will be achieving four days. So that's Ah, a 30% of delivery time improvement if you like to put it that way. But within that, I think it is important to look at options which gives same day delivery or for US delivery or one hour delivery, depending on what the expectation offer consumers is over there. So why do you have this overall picture of reduction in the number of days? But within that, we've also introduced express service ists. For examples way have a one our delivery pilot, which is now operational in Brazil and Colombia, which, if if an online order is placed within one hour, we can have the product directly at the doorstep of the consumer. And this is working in a scented Brazil, which is one of our biggest beauty markets around the world. But in addition to that, we have also elated that, uh, let's say, a four hour delivery in one of the Metro's in India. In the UK, we have had a 24 express service model which traditionally has has have X challenges. We have re went the complete morals, and now at least we can say that it would be a 12 our deliveries and having sent the systems and having set the mechanism for the delivery in place, I'm sure we can now keep on pushing that line further and say how control was complete out of full hours at short. For there are solutions, their solutions which are available out of the market. You can either set up that capability awesome, or you can go to somebody else to provide it. But it's not straightforward. And it's not easy for somebody who's manufacturing and distributing their products because it has to get integrated with the way that you manufacture for Maxime, our factory, there has to be sufficient flexibility over there. It has to have its way into how you plan for your demand and they force applied to it. How do you What do you keep in your warehouse? Is that what you don't know how far your hero should be from the consumer on? Maybe you need even more warehouses, distribution centers that we have, how efficient of your picking back capability. So it has. Ah, when you start with a mission off at the same day delivery or a few hours delivery, it is not just about putting a truck or a van and making it rather out because you was where you want to be, who you want to deliver. Probably It has an implication of that. Upstream supply chips as I described,

Radu Palamariu:   19:20
and I'd love to actually had left because one hour deliver in Brazil, to me is mind boggling. I mean, it's just like it's It's an incredible achievement, Andi. I mean, and I think we should stress it to the listeners because maybe not Everybody knows. And I mean, I am aware that and some people are aware, the foot, the footprint that you have, which is which is amazing in Brazil and is probably one of your largest market, if not the largest. But still one hour deliveries is enormously fast or is incredibly fast. So maybe let's go a little bit into that particular one. And I know maybe two. If you can share some insights into how did you get there? I mean, you know, cause also, I mean, I imagine before it maybe, maybe one day, a few days, What was the process of thinking? Get what was some of the things that you did? Maybe some lessons, you know, some practical. If somebody was listening to this podcast and wanted to take something practical away from, you know, from this major achievement of delivering within one hour using your own kind of network. How did you do it?

Vikram Agarwal:   20:19
So I think 1st 1st thing was a relation. We cannot do it alone. And we entered into a partnership for the company, which is a local delivery company with approximately one million subscribers in Brazilian or so. Therefore, it's not just our products. If we had tried to set it up in our products, the cost himself would have been astronomy ical because we would not have had a scale to carry off an operation like this. So therefore, way had toe get into a partnership, but somebody who who's usedto get not in our industry but in other industries that therefore they have the lanes, they have the reach they have the network, which is already optimized for the local scale used to carry. The second part is that this is an operation which you cannot do in a large country like Brazil, everywhere into everyone. One has to segment the representatives and saying that each other once from whom you can really get value out of this so it can't be somebody who places an order once in a year because because she's not really concerned about with the productive is reaching her directly. And she may be a consumer herself rather than a seller approach, which means that if she doesn't have a promise off delivery Toby bet downstream in the same jail. So rep segmentation. Full list of the service is another angle, and the turn is about Where do we do it? Although I said Brazil, but we were so far piloted is in the Metro's because Brazil is a huge country and I would be I would be imagining if I said that it can be done anything, anywhere, it's in the presence, but where we have been able to do it is a metro. So I would say that there. So Foster's a partnership. Second is a segmentation off your customer population and maybe combined with the segmentation or some off a productive for you. Also, because some of the things like color cosmetics can be delivered instantaneously and some others people may be prepared to wait for it. So segmentation, which is the 2nd 1 and about being very focused on the center's at the geography, is where you're freaked the sounds because, you know, once you advertise this service, it's a promise. And then then a customer would measure you against that. And you better be sure when you're promising this that you will be able to deliver it.

Radu Palamariu:   22:43
Absolutely. I'm in customer. Satisfaction is is key. Andi, if you want to think now, in terms of and and I'm sure that you're already thinking and you mentioned a couple of examples is, you know, in high density areas in India or in UK, what would be your steps in terms of in terms of other markets, Right. How would you decide? Okay, let's Let's this short inaugurations in this particular market cause your present in 50 countries, right, Sir, I'm assuming Is there like also a kind of ah ah hierarchy of Okay, Because we have it's usually based on the volume of business or density of business. How would you make the decision? Okay, let's let's go into shortening the situations for delivery in this country. That country versus this country.

Vikram Agarwal:   23:26
Yeah, I think one of the one of the barrel meters for that would be how well penetrated his e commerce in that country. Because more the penetration off e commerce more than customer expectations off a quick and prompt delivery so So that's the first criteria which I would use is that how strong is the customer expectations? Because there is a cost attached to it and therefore other customers prepared to pay for this kind of a service. Does it really matter to them to an extent that you can charge a dollar more or whatever in every delivery? So that would be the first barrel meter which I would use to get this. The 2nd 1 would, of course, be the the practicality and being able to do it, which are the cities where you can really offer this promise and live up to it. If you try toe, offer it in just for an example, the eastern part of Russia that probably you will never get there you'll probably never be able to fulfill. The promise on the third is very loosely speaking, is this expectation is much more prevalent in the developed countries. I would say that geographically speaking, I would look at either are big business is like letting like Brazil, which I mentioned, or I would look at Europe with where the customer really wants this and they're used to this kind of for servants. So they're they're overlapping criteria. I would please The penetration of e commerce, which is a first. Then the stage of development off the country took off its economic development on the size of our business and way could be really achieve it practically speaking at the recon knock. Yeah, I will. Would want to introduce this kind of a service if I had even a m percent probability off not being able to beat

Radu Palamariu:   25:19
it. Yes, and maybe let's discuss a little bit the challenges that you're facing in the different markets because you sit and you have a global position being the chicks fledge an officer and you have very good visibility in the different markets. And you have let in America, which is which is a very large for you. I think it's both 6 to 60% of the business I was reading. You have Europe. You have Asia. You have. You have Africa as well, right in South Africa. And this and this is first maybe we can I think, North America. You you divest that business. So, um, maybe you can tell us among this four regions let America, Europe, Africa, Asia, what would be certain challenges may be specific to each Onda little bit on how you're addressing.

Vikram Agarwal:   26:03
Yes, so let me take Europe first. Europe is all about a good product, high rate of innovation, an outstanding service. So it's about making sure that your operations are as efficient as you as they can be, even if it comes at a cost, because there is the ability to charge a price for this. So Europe is about perfection. If I put it simply that it's about supplies in perfection, it's about having outstanding productions and delivering them out. Strategy Isha is more about with issue. I would also maybe cut it up into a country where we have a strong business, which is Philippines and in the Philippines. I would just look at making sure that we keep expanding our geographical footprint. Keep opening more of more and more stores because that is the model over there. We're the lips come to Shaw and around a very efficient supply chain with very affordable for much, so affordability and reach would be the key to grow our business in Philip. It's if I look at the big Croat engines off the world not just for us, which is for everybody, which is China and India. And they indeed are defined growth engines. That is about growing a business from a very, very small size, given the magnitude of these countries into something which is really meaningful languages, which is which has got skills. So it's a bet could come through a combination of factors. Usually it is about geography and putting a developing more representatives in the wider areas of the country so that we have more channels. We have greater concerns, customer network and saw so so therefore, India and China, as the road agents, are about increasing the size off the front end and having the supply chain capability to deliver to them again at an affordable cost. You'll see that the affordability team is something which runs all across Asia and Africa. Where is if I look at developed markets like Europe? Like what I already said. It is the rate off innovation and your ability to land newness with speed, which starts battering more if I come to Africa, which is which, which is a very, very interesting proposition, because our African business is largely centered around South Africa and the whole sub Saharan Africa is there to really be able to penetrate and the makeup rocks teacher what they're effectively and all the more. It hasn't even greater focus on affordability that the other markets Richard, which I talked about So Africa is all about being able to put a good, affordable product on wheels and making it reached the last customer who wants it. So therefore, it's it's a slightly different going all around and Latin America. I would say that Brazil is closer to the way that we would operate in the Europe. Where is the rest of the country's? The Brazil in Mexico are closer to the European supply chain. The philosophy Where's the other countries? Columbia and and that the sudden corn they are closer to the issue philosophy, like the Philippines on which I described. So there's a always ruins is that for the developed market, you focus on efficiency. So is Eunice Adjourn off innovations, and for the developing markets, you focus on increase off your reach, a broader network while keeping your affordability of production. Chick

Radu Palamariu:   29:50
I This this question just can't fresh into my mind. And I was just curious because on one side you have different markets and different needs for each of the markets on the other side. I'm sure that there's global initiatives, and it might be from a technology perspective, it might be from the system's perspective, it might be from an integration perspective. It would they be certain tools or certain specific platforms, Or, I mean, you don't necessarily need to name them in particular. But I'm just curious. For even as a is a global brand, would there be something that globally you implemented and rolled out in the different in the different, uh, subregions are or continents and it made a lot of a lot of impact in display. Shin operation.

Vikram Agarwal:   30:33
I think one thing which I would call out is is machine learning and demand forecasting, particularly in the European markets where we have deployed a tool which was built in house, which is, let's, say, an artificial intelligence tool for for fine tuning your demand plan, demand forecast campaign after campaigns so it loves based on the previous scenes that you touch. And it's a very complex algorithm which lives behind the engine, which primarily looks at all kinds of factors, the weather, the the economic situation, off a town and so on and so forth. And you factor all of that and you get out Put over there, which is reasonably accurate. When we started with this tool a few months ago, we were getting results, which were I'm saying, complete duster. But that is the very nature of the cool is that can be enough to compete. It loves and it starts becoming more and more accurate. So I think that is a tool which we have already started between rolled out and in four markets around the world. And that's one thing which I'm quite confident that very soon we'll be able to roll it out globally. We need to, of course, be careful because in a while, into the cool which loves itself. But as I described to you that I was a cute the markets there are always winces on how urinated, how you operated, how trained on your people, how people understand the input and output off the pool. Because any artificial intelligence to get very soon fall prey to what they call garbage in garbage out absolutely need to be careful of the quality of the important that you're able to provide a good also. So I think that is 1111 global to let way airport to give place. And my commission colleagues that are also now predicted a similar tool but different but also based on artificial intelligence and being able to project the number of representatives new and old and they live in Newport Representative that were like to seal the team are coming in. So if you combine these 21 is predicting that important variable off number of rights and status, and the 2nd 1 is predicting the demand for representative. And if you combine that that you can't reasonably or if progressively record demand forecast

Radu Palamariu:   32:56
yes. Um, and in terms of them I wanted to ask you the question from a perspective of, let's say, a medium sized manufacturer within from Sergio cosmetics or or are you know, similar industries because even is a big brand. And before that, you were with Unilever. Um uh, this this brands and these companies are built over many, many years and they have big budgets. But let's say you were put in a position where you were leading this place and function in a smaller company that may don't have the same type of budgets. Azaz Avon has what would be some of the low hanging fruits you would focus on first optimizer splashing in today's world.

Vikram Agarwal:   33:39
Yeah, I can assure you, I don't have a big budget.

Radu Palamariu:   33:46
Maybe I didn't frame the question for all of

Vikram Agarwal:   33:50
us. But I think coming to your question, they're cool. Three things which afterward minds first, is that any medium scale or a smaller enterprise needs to keep its fixed costs as low as possible, even if it comes at the cost of higher variable cost. One can always increase the fixed cost. My mystic more capital, for example. Building your factory. You're only a warehouse or something, but the starting point, as you're trying to expand, is to keep those six Costello. The second, I would say is, is about keeping the portfolio very sharp and very targeted, and they need to be a very good understanding of good complexity and bad complexity in the business. For example, having 10 types off fragrances um, offer may actually be a good thing because it is subjective and the consumers of preferences that they may choose one over the other same thing about colors in a in a lipstick or on a nail varnish, for instance. But there may be other complexity around. For example, in in Queens yeah, you may not need as much complexity as you would in the other two examples, which I cooked it. So I would say, for a company which is smaller, it is extremely important to keep the portfolio focused with the right consumer. Insides of mortars, good complexity, borders, structural complexity, so fixed costs, complexity of the portfolio. And the third thing, which I would call out, is, if I were in that position, I would not hesitate to develop more and more partnerships in the areas of distribution, logistics, even manufacturing through contract manufacturers. That storm just to leverage the greater scale off somebody ends ultimately in the supply chain, whether you should go on your own or you should go and collaboration. Our partnership with somebody is a function off whether the other person could create more skill across different customers, or you can create more still across every type of food here. The same applies to buying, so therefore, I would I would. I'm a strong believer in the strategic partnerships be they beat across may be outsourced operations being across buying, beat across manufacturing beat across distribution. So that's the turn element, which I will bring it to it toe. Not hesitate to develop some bull partnerships in the in supplies you devious

Radu Palamariu:   36:23
on. That's an excellent point. It brings to my prince my mind. An example of one of our one of our clients is in the appliances industry, and basically I won't name them. But was simplest to say that I just say that they acquired a company that had in the range of 150 stuff and they were making us, ah, two or three appliances for the for the kitchen. That's all they were making two or three, but really, really innovative products. And all the stuff that those guys had were around 152 100 stuff because they mostly only did the RND side and a little bit on the marketing side. But even that was mostly outsourced. The contract manufacturing I mean, it was done through that met the protocols manufactured through through contract manufacturing. Logistics were outsource. Everything was so Basically, they bare boned the business. Only to the unique selling proposition was which was the Peyton's there in the development. And the company bought them over so that they can learn from them how to transform, um, that the company was a bigger compliment how to transform themselves. So that kind of goes with your very well with your point of view. No build partnerships wherever, Wherever you can keep the core, keep the keep what's unique and keep what's your added value and an advantage to the market. But other than that, if you can outsource so you can work with partners that easier

Vikram Agarwal:   37:43
And I think without naming it, Aiken gets the company which you're talking about. And if I'm right on my guest, this company has gone by who 100% in the last five years.

Radu Palamariu:   37:53
Yeah, yeah or more. Yeah, something like that. So s Oh, yeah, we share separately, But, uh, I wanted also to bring the discussion to the talent and human resources side. And then, you know, the supply chain function is a function off people like Michael cos actually an old functions at the end of today, I'd love I'd love to get your thoughts also in terms of attracting people and attracting the right talent and skill set to the supply chain world, which is like all the other functions changing. And there's a lot of transformation going on. How do we owe you in particular? Managed to attract the right type of talent in your team and the right type of skills as well, because also the skills that is kind of blending now you have, you know, the technical, the course ablation skills, the digital skills, the technology types of skill sets. How do you you know, how do you keep this mix well and and balanced in the team?

Vikram Agarwal:   38:52
See, I think first of all, for me, when they were hiring any new talent, the top line is, Does the person have the business acumen? Because the days when supply ching it could operate as a silo are my mind no longer their supply. Teen people have to be businessmen. If you look at the three imperatives off supply Ching, as I always keep saying it of service and that is the wardrobe, it is course and that is the word profitability and it is working capital and kid picks, which is the boat cash. And really, if you connect the these three imperatives off the supply itchy with the three imperatives off any business which is growth, profitability and cash cash flow, we're not doing anything in the supply chain, which is different from what the business history. And if we are doing something which is supply teaching for the sake of supply chain, I think we should stop it. But if it is not aligned with any of the business imperatives, so therefore in terms of talent by first and foremost criteria for anybody who's joining the supply jail is to say is to ask the question, Show me How are you a business leader? If you work your ridiculous being asked to run the business in a particular country with full Quindel pl responsibility. Do you have what it takes to be able to run it? Yeah, so that's maybe I'm saying a little differently than what my supply jin colleagues have been usedto, I have been used to myself in the past, but really this world with all the connectivity, with all the growth criteria, with all the boom and bust off companies coming in and company is going out unless of the supply chain. Be behavior, screw businessmen. We will not be able to understand what we can do with the scratch. Yeah, and that that, you know that immediately introduces well, lose like entrepreneurship, practical creativity, partnering the business and being an enabler rather than a CZ one often hears the world. It's a supply chain constraint. I hate that freeze when it comes to me and said, Why am I a straight talking? I changed that. So that's the 1st 1 about being a businessman, and the 2nd 1 is not to forget is that supply chain is an area which requires skills. It requires skins to understand how our sloop process should be working. How did my planning should be done? How happy you should be. What can you do in a back office? What do you need to do with the front of the markets? How do you optimize your structures and buying? How do you mitigate for ex vulnerability, particularly when you're operating on developing markets on your incoming materials? Are you cooperate with the most optimum manufacturing for print? Neither do centralized, not a fragmented so If that is there for in the end, I would call it in the box off skills, off supply, chain skills. But that to me, after the business equipment, if you have the business acumen, do you know exactly what skills you should be learning? And one can start picking them up pretty soon and the 3rd 1 If it's not just about hiring one person, the person who you hire should be a catalyst off our own model, who bring more people like themselves and to develop more and more people down the line who think and who behave and wept. The the same superlative skill sets as a zone you hired the company would have, and that's about munitions. First about business acumen. It's about functional skills and Rex, about your ability to develop a team who can really work with the same level of enterprise and creativity as you want to work.

Radu Palamariu:   42:52
None. And I love to also pick your brains a little bit in terms of the future, like 5 10 20 years online, they say 5 to 10 years and land not to go too far off, Um, and in terms of the skills functional skills. No, the sausages with the function of technical skills because again, technology is changing rapidly. Everything. And you mentioned machine learning. You mentioned the true that you have developed on on that side. There's more and more towards being developed in different, uh, tech angles of the business. Do you see Ah, shift also in the type of skill sets that people will need to pick up in the supply chain function in on top of, you know, the S and L. P. The demand planning that you know, the usual what have been s so far. Are there certain blends that you see coming in in the next 5 to 10 years or some other new things that may be coming in or useful things for people to pick up,

Vikram Agarwal:   43:45
see anything you already named it? The single biggest transformational megatrend that we're sitting on today is technology. I mean, you just have to look back five years ago and here to think that what what a state was e commerce in it. That how many products could be ordered to your smartphone? How many people indeed had smartphones by any other goals and that predicts you into the future is that water becoming is there perhaps something which we cannot completely even comprehend. But we know that it will be in the space off off technology. Increasingly, consumers will want personalize for Lux, and we're working on a thought process on that Is that if somebody says that I want a fragrance which should be custom designed by me, I want a little bit more off this kind of notes and a little less off floral lords and storm. Then we should be able to co opt it for her in a bottle design off a choice and a cap off, a choice in the decoration off a choice and probably even her name monogrammed on it. Yeah, that manufacturing flexibility that level of customization is, I would foresee, if I just look into the future is something which will become which will start driving consumer preference and the technology to enable that is already there in parts. Yeah, it's it's It's just that the deployment of that Balaji hasn't happened on a large scale. Yeah, so So the related areas of technology Perak personalization are clearly things which I see coming up in the future. The other one, which I see is the around sustainable corrupts on this whole thing around plastic packaging, for instance, which is, ofcourse already a very important driver of preference on how do we make a planet more sustainable through products which are more sustainable? If you look at the footprint of products of postal care around the world, then I would say around 60% of the impact of the environment comes to the product itself, and the rest is through distribution, manufacturing or the raw materials and sore. So, therefore, how you design your products to be more sustainable more differently or they were biodegradable, et cetera, is suddenly becoming a bigger and bigger driver You can see in food. For Lux, Howard is driving preference that you was increasingly want to know where the ingredients in my in my food product had been sourced from and have been so stress. Possibly we know about the bomb, while debate for its tends to be know about the cocoa debate and so on, and therefore the whole sustainability proposition in the production's going to become an increasing driver, and that even goes back and links to the technology point, which I was making earlier, which is blocked Chance really originate from where did the last ingredient in it originate from? Was it source responsibly and block chains are bringing that visibility more and more. 01 operates, You know, In in Russia there is now a new legislation. This is all really start happening now whereby every product needs to carry out. You are cool, which is unique. Not that s Q but that particular product that piece that escape that that item it is unique to that needs to carry a Q are cornered. That you are cold is traced through the through the life journey off that productive from the time you make it in a factory and you start to get outwards. So these are all really prayed. So principally the sustainability technology linked word block chains is the other team which is developing in a major in the 3rd 1 which I will call out is around or I call the rise off the second year cities so amusingly organization off a population coming from rural areas, particularly in the developing markets, beat in Africa and Asia and parts of leaded America. I will not be about the London or the Shanghai or the other daily or moved by your Manila's of the world. It is the rice off the second, plus a second tier. Cities. Sorry. Attract increasing organization off customers. Consumers who are as digitally savvy as technology as as a politically connected as any of the customers in the mega cities of the world and therefore the ability to create distribution models in this second tier cities, which are increasingly coming up in every signal country off the world would be the key driver from a supply chain point of view on how we see people quote so digital sustainably. The megatrend off suburban suburbanization, if I may call it that, are the ones which are really to my mind what I can see five or 10 years don't lie.

Radu Palamariu:   49:03
And also, I wanted to bring forward another another big trend, which has, uh and and and I like that through the throat, the discussion that we've we've been having. You you keep mentioning always her her, and obviously it is declines they was. The customers that you have is a company, but at the same time diversity in general and and supporting women and promoting diversity has become, ah, a big theme across organizations across multinationals. Um, and I was also, you know, also across the workforce, obviously. And I was I wanted to ask you because I know that you have a couple of projects around this table. T ask you to share some of this with us and maybe also to share how it impacts the company's vision and strategy.

Vikram Agarwal:   49:50
Yeah, so I think a first of all, we pride ourselves in being one of the biggest livelihood generators or women around the world. And as I go around the world and I talked to representatives, I feel very humbled when a representative comes to me and she says, is that Look, uh, she had a problem with the husband, and then she was left. Probably got three Children alone. And because she was uneven representative, she could get her earnings. And now the three Children evals going to school. They have graduated, and they're now good citizens. They're earning well, she's built a house, and so on and so forth. It's when when you're dealing with millions of representatives like that whose livelihood depends on youse. But it is not just about the supply chain in about making sure that you're perfect in a supply cheese than what hits you is that look, if in a box there is one item which is missing, then actually, what you're done is not just to satisfy the customer but actually hit her own. It's because every production cells she gets that earnings out of that. So I think the first and foremost thing in this company is this from sense of purpose in generating earnings, generating lively hoods for millions of women who work for us around. And I think emancipation starts from economic emancipation, and this is what my mind we contribute towards that off course. We have a lot of programs we have programs around. The women's health were programmed around at a women's group, and they're sorting from the minute the predators and sore. But I think the fundamental thing which we do at this company is to be of service toe to women for earning their own livelihood, said doing them economic emancipation, uh, connected with that and the larger theme off. Diversity as you as you, as you rightly called out, is also question off. How weak. And how how insightful are we? About what? We've been? One about the product preferences and about the shifting trains, which of course, will be very different from the UK to a Philippines through China. And how do you really get those departs? How are the whole well are they already celeb in beauty products, which will be very different from any ball beauty market like, let's say, Korea compay toe one of the markets in Africa? And how do you really get it to her needs towards about understanding the women consumer and understand for understanding of women? Consumer you need. We did in the organization to be able to relate to the better. So therefore, Toby, how anyone would address the diversity question or is already addressing his first fall developing its first of all generated earnings for millions of women. And second is about investing in our own organization or our reps to make them understand women better. And I think that is also where the rule of the game on account of me comes in because that is our training centers. That's where way Hope toe continue training, increasing number off weapon into being beauty consultants and beauty advisers and other than careers of beauty products.

Radu Palamariu:   53:21
That's, Ah, that's great. And that's that. That's a very good That's a very good analogy, their advisors and partners and basically beauty, beauty advises rather than careers. It's a yeah, it's a great way of putting it, um, final question from us. Ah become, um, what would be the best piece of advice that he would share with somebody that maybe one day wants to achieve what you've achieved in your career to become a chick supply chain officer? What would be that one piece of advice that stuck with you most and helped you most in your area.

Vikram Agarwal:   53:56
Always keep connected with the business. Think business before you think of the supply chain. Be in being be on the ball, absolutely. With trends which are developing on technology, don't be afraid to learn from others. There are enough global Fuhrer like yourselves in beer, in sharing their knowledge and learning from what others are doing and be creative. There's something you can make it as Draba function as you want it to be, and you you can make it as creative as you want her to be In fact, I love people who are people in my team who go to my marketing colleagues and say that, Hey, why don't you think of this? I can actually do this for you rather than waiting on the sides and then having someone come to me and and ask me Can you do this? And then I say yes or no. So beyond the front four b business collector, be creative and be completely connected with the developments in the supply chain around the world.

Radu Palamariu:   55:04
Thank you. Very good. Very good advice and become thank you for for all the sharing for the good of the good case studies and for the good examples that you have imparted with us today and wishing you ah, continued success in the in the transformation and you know many more markets in which you bring the one hour delivery available. You make one hour delivery available and the end all the other challenges that you've set yourself up for and hopefully we we share again in a few ah, few years in a few months and you can tell us how you did it.

Vikram Agarwal:   55:35
Yeah, absolutely. Greg liketo be speaking about this brother and look forward to collecting again.

Radu Palamariu:   55:42
Super many things.

Vikram Agarwal:   55:44
Thank you for listening to a podcast. If you like what you heard, be sure to follow us on Radha Palamar you dot com slash podcast For all the show notes, links and extra tips covered in the interview, make sure also to subscribe to our e mailing list to get the news in the nick of time. If you're listening through a stream

Radu Palamariu:   55:58
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Vikram Agarwal:   56:00
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Radu Palamariu:   56:21
next episode, where we will be having a few other sea level and top

Vikram Agarwal:   56:25
leaders in supply chain joining US Stadium