[00:00] Andrei Palamariu:
Hello and welcome to the Leaders in Tech and Ecommerce podcast, and I am your host Andrei Palamariu and I am the APAC Director of Alcott Global Executive Search. Our mission is to connect the tech in the supply chain and eCommerce ecosystem in Asia and globally by bringing forward some of the most interesting stories about success and failure from leaders in the industry, I’m happy to have with us today is Ashish Pujari who leads solution management for SAP Digital Supply Chain in APJ and Greater China. A 28 year veteran in this space, Ash has seen it all. He has been a practitioner, consultant, entrepreneur, sales leader, and value engineer – all in the space of supply chain management. With SAP, Ash joined to lead the Digital Supply Chain and IoT line of business for the APJ region where he oversaw a triple-digit growth in the cloud business. His current mandate is to help set up an Industry4.0 Lab in Japan along with driving the “design to operate” solution portfolio in the region. Prior to SAP Ash was part of the Asia leadership teams for Manugistics/JDA, Cap Gemini & SSA Global (now called Infor).SAP in a few numbers: SAP has 100.000 employees and 437,000+ customers come in all sizes and work in every industry and geographic region you can imagine. They include 92% of the Forbes Global 2000 and 98% of the world’s top 100 most valued brands. The company’s revenue for 2019 was €27.553 billion euro. Ashish, a pleasure to have you with us today.
[01:41] Ashish Pujari:
Thank you for including me today. How are you doing?
[01:43] Andrei Palamariu:
Well, I’m good like everybody is trying to solve challenges left and right and supply chains are under a huge amount of stress. Governments are scrambling to inject cash into their economies, and companies are trying to stay afloat. Your company SAP works with thousands of clients around the world and you personally have been in the APAC, in industry roles for more than a decade. It’s impressive, and you mostly have focused on supply chain and manufacturing. I wanted to get your take on the current situation and then get some of the good case studies or some of the challenges and solutions that your client’s face during these times. So let’s start with the first question. At this moment globally, what are your perspectives on some ripple effects and issues that propagate within supply networks?
[02:35] Ashish Pujari:
Interesting question, Andrei. I will start now, try to stay away from stating the obvious. Everyone says the same thing these days. The moment as when you mentioned is an unprecedented situation and beyond all that. Global supply chains are broken algorithms, simulations and data can only do so much. Supply chain heads and chief procurement officers today are working twenty-four by seven to figure out supplies, allocate scarce supplies to plants, and order your customers to just crumble. So it’s a scrappy situation, but they are scrambling to make things happen. Ripple effects are multiple, but in the end, the customer will need to take the hit off. Non-availability of product hit off uncertain delivery and eventually the hit on price and I feel these are the ripple effects that are kind of going to permit for a very long time.
[03:37] Andrei Palamariu:
Yes, I think we haven’t yet felt price pressure, pain, and it’s still to come and is definitely coming. I don’t know how many people are aware of it and will expect it, especially the end consumer but it’s definitely out there. Maybe we can talk a bit about opportunities or silver linings that maybe you have seen in your portfolio of clients or partners. I know there is an estimated 70% of the global supply of raw materials that China can control. It seems like now China, it’s recovering, is doing better and has started some manufacturing facilities, if not most. What are the silver linings from your perspective and some opportunities that you see?
[04:23] Ashish Pujari:
I like your positive attitude on silver linings, I feel this situation is an alarm bell to corporations who took outsourcing and cost arbitrage to the maximum. So, they’re now thinking of redefining the network so that sourcing and manufacturing can be located near consumption points and when I talk to Chiefs supply chain officers, this is coming more and more, the silver lining for some logistics companies which I can see that as well. In fact, I was talking to a CEO, often an air cargo company who was beaming, since the demand on some of the lanes is at an all-time high and so are our rates. So, air freight is going through the roof for certain critical items, you could say, face masks and sanitizers, other medical equipment. The silver lining is also in the way we engage with customers. Online meetings are getting accepted in almost all cultures. Could you have imagined this Japanese customer having a zoom call, a face to face online call would ever work, but it is working. So, obviously this will reduce travel and ultimately benefit the environment as well and bring families much closer. So, I see all this as a silver lining truth through the situation now.
[05:48] Andrei Palamariu:
Yes, I think there are a lot of jokes because people are trying to make the best of how this Corona situation has done more or better for the environment than any other activists have been managing the situation. Definitely, we can look at it as the silver lining but, going back to the talks that you have with your client. So, air cargo and air freight they’re in a good spot for now. Good spot from a pricing perspective and a difficult spot from making everything happen because it’s a huge amount of pressure on them. You talk with quite a few leaders from different industries. What type of priorities do you advise your clients to focus on and how would you manage this?
[06:36] Ashish Pujari:
So, our advice to their customers is two-fold, customers really have scrambled so, while they are looking for advice, they’re not looking for sermons. In the near term, we’re advising to use a lightweight technology to do some scenario management for the mid long term creator robust and more for supply chain mitigation. SAP and our partners, we’re working on creating these low cost, low-risk packages to address the near term and made long term. So if you google to sap.com, for instance, you’ll be able to view three such offers from the digital supply chain portfolio wherein, at zero to minimal cost for a period of 90 days time. In this particular case, we are offering a certain service that is helping the customers to kind of assimilate their supply chains and have made some decisions, so we’re pleading those decisions support a kind of association and also creating visibility across the chain. In addition, the offers from an SAP Ariba and if you will go to sap.com you’ll see these as well. These further complement solutions that we’re talking about where customers can manage their upstream supply risks better. So you absolute regional, there is always a mix of how much short term and long term you want to push and discuss with customers at this point in time?
[08:13] Andrei Palamariu:
That’s a very good point and I think we have to come together and we have to come with solutions in a short time everybody’s fighting fires nowadays. Can you tell us when you say a minimal investment does this also imply a shorter implementation, duration, and complexity?
[08:42] Ashish Pujari:
These are very quick simulations that turn on and off the supply chain solutions. Also, our partner ecosystem has been enabled and geared to make these happen very quickly because if we wait for nine months, for these things to be delivered and the purpose is lost.
[09:03] Andrei Palamariu:
Correct, I agree. And, out of the clients that you already have work with, is there anyone that stands out and who has already been improving on their digital transformation and stands out as a good example of facing these challenges who has not been disrupted as much as the average organization when it comes to the supply chain?
[09:32] Ashish Pujari:
It’s a fine line. So, I’ll be careful when I articulate this Andrei and I’m sure you’ll appreciate that because the entire effect of this disruption is still not over. So, we need to make sure that what I’m saying does not have a bearing on the long tail of this disruption. So, I remember the 2011 earthquake in Japan and how overnight the supply chains of large corporations took a massive hit. There were talks about taking a hard look and creating redundancies in the supply chain to mitigate such disasters in the future. The whole discussion is happening with large consulting firms getting involved and they are taking a mid-long term view. However, after a few years, companies have fallen back to old practices and have been hit hard with the current destruction. Having said that, I believe the Japanese automotive companies, some of them, have worked out a mitigation strategy due to the earthquake and floods that they have applied in the current scenario. This includes coordinated sourcing strategies, flexible manufacturing with make forces by decisions on managing inbound and outbound logistics constraints. While I’m yet to get the final report from those customers that I’m talking about, I have been hearing that they have managed to weather the storm better than others, at least till this point in time.
[10:54] Andrei Palamariu:
It’s interesting, and definitely Japan is a market in a country that has been hit by the different crises in the last few years. I was reading somewhere that mapping your upstream supplier several years back and it takes such a long time depending on the complexity and of course, the scale and support for a big organization. Japan, took a few weeks for them to be able to finish that and after they had a clear perspective on their supplies, they could better prepare themselves for disruption. Do you see this mapping being an important aspect of fighting a crisis?
[11:40] Ashish Pujari:
Sure. One of the key things that these companies have done well in understanding these critical parts that they need and some of them are honestly-single-sourced. So, they needed to make those decisions of having multiple sources for these critical parts on going through another round off QA processes around these, which take not just weeks, sometimes takes months. So they have gone through those and that really has helped them, that they have visibility in towards alternate parks which are spread across different regions, geographies, and they also have different lead times as well. So yes, these are some of the strategies. Absolutely.
[12:32] Andrei Palamariu:
And because we’re talking about the technology aspect I actually read an article you wrote about the concept of intelligent enterprises and you were speaking there about organizations that effectively used data assets and machine learning to automate routine tasks or make better decisions. And my question would be how can a company use their huge volumes of data and the latest tech to translate them into actionable insights in this period? I don’t know if there are examples or maybe certain sectors that you see that are doing better than others with. Is this combination of a huge volume of data and machine learning working towards a better outcome during this period?
[13:17] Ashish Pujari:
I’m a big believer in the data-driven supply chain, so I completely endorse it but let me just get into the conversation on this data. So most companies, we engage with our obviously sitting on a huge pool of data and, they are customers of SAP, they used an SAP transaction system they used SAP extended systems on data keeps coming in. So this data could be customer data, customer’s customer data, asset usage data, human capital data, output data supplier data you just name it so, data is everywhere. So, let’s take a specific case to ask, let us say, that case of asset data so to give you an example. A large chemical company in this region in APJ was severely affected during this crisis as they’re still going through that process. Some of their products have seen demand that they haven’t ever seen before, it’s through the roof while some are sitting on zero demand, so certain categories absolutely, 200% demand. Consequently, the assets and production lines supporting these product lines are also in a very similar state. So, while some lines are being pushed to the limit, other lines are sitting and idling. So this company took all its data and used tools like asset strategy and performance management to decide on revising the maintenance schedules of their assets and tied that to their spare inventory as well. So, while they needed uptime of these assets that were running twenty-four by seven they needed to revise the entire maintenance on parts of the ones that are idling, so they had to make sure that the lines in demand didn’t break down. Hence, a predictive maintenance process was executed. For others, the standard maintenance was tweaked and all this honestly was used to be done using the A.I and analytics on this huge pool of data that they’re sitting on, so it absolutely works.
[15:21] Andrei Palamariu:
I think the important part here is that you really have the data at hand and the data is accurate and used reliably. That’s a different conversation, for sure. And when we talk about good examples and companies doing the right things, it’s also interesting to switch it around and then think about what not to do, because it’s even easier to criticize, but in this case, it’s always good to learn from mistakes. Are there certain things that you would like to advise to the different companies in terms of the things that we should or shouldn’t do as a company?
[16:15] Ashish Pujari:
There’s always an ideal situation and there’s always a situation on the ground. Crisis always leads to a lot of desperation and we all know that and sometimes decision making is clouded by pressure. Cost of operations becomes a key topic as well, in this whole crisis while companies need to figure out reason means of satisfying customer demands better, I think this is an opportunity to get closer to their suppliers, logistics providers, technology providers, and other ecosystems partners to ensure win-win or should I say, survive- survive for all. The more you’re transparent, the more you’re collaborating, the better those companies will understand the precious you are in and you understand them better and you kind of work out something that works for all. The other aspect that I see is people have the rather than taking knee jerk reactions and announcing mass layoffs, etc. Companies should have closer collaboration with employees and jointly figure out how to manage the spin. Employees are loyal employees, they want your own company to thrive so they will help you figure these things out better. If you have ideas, you bounce it past them and they will nine times out of ten, they will understand, and they’ll comply. If that means redeployment of your people or salary cuts, it’s still better than layoffs, isn’t it?
[17:47] Andrei Palamariu:
I think you’re touching on a very important aspect of crisis management, and this is how you treat and how you communicate with your employees. I saw some interesting news and I think it was last week from Grab and Go Jack, who is cutting 20% of their leadership teams salary to support their drivers, partners, merchants, and employees. I think that’s to be shared and I think it’s good to look up to these kinds of actions. What other things do you think leadership should do to promote this safety feeling and also to engage their employees and get their ideas to fight this crisis together?
[18:39] Ashish Pujari:
As I mentioned, companies should over-communicate and be transparent and be honest. You got to tell your employees your ecosystem, your partners in crime, that we are doing this. This is our current strategy to mitigate the effect of disruption like this in the near term so that they are better prepared. In my mind, surprises lead to issues and if we can minimize that because people are already surprised with this whole outbreak and you shouldn’t be making it worse. I would think the strategy is simple. Look at how quickly you can influence the masses, which is your own employees, your ecosystem and all that with certain ideas around the near term and a mid long term so that they understand that the company is not getting completely wound up with only solving the near term. And I think that that is a very effective way to mitigate the stress in the entire system.
[19:58] Andrei Palamariu:
Definitely over-communicating is one of making sure you say the same thing ten times and communication from leadership is what keeps people’s hopes high and the safety feeling. Of course, they engaged and we talked and you touched the point topic of partnering with partnerships in general. We saw some interesting examples, one of them came from Australia, where an airline who has been affected quite drastically has relocated some of their workforces towards one of their partnering on one of the largest retail groups in Australia. Are there other interesting examples in this partnership direction and what is your take on this?
[20:50] Ashish Pujari:
I firmly believe that, when you use the word “partner”, it is extremely powerful. You need to be careful about using the word “partner” in a loose form because it really defines a very symbiotic relationship between two entities that would share good and tough times together. Partnerships are often long term. In times like this, partnerships can help, provided there is complete honesty and transparency, and I think I’m repeating myself here. I have seen these work in certain countries in Asia between shippers and logistics providers. I was talking to a very large consumer goods company. It’s a global company, but the head of supplies, it’s in Singapore for this part of the world. His view was that in order to make sure that they kind of level out this whole demand-supply imbalance, they have been working very closely with better party logistics companies and making sure that neither capacities, price increases, and surge in demand are going to break the chain. They’re saying we are basically opened up completely saying for these categories in these locations that demand surges there and your lanes are constricted, can be worked together to see if you guys can go ahead and recruit another partner, and we don’t mind that and we can onboard them quickly together so that it’s a three-party consortium trying to address the supply chain logistics challenges that should work. And it seems that has worked very effectively for them this particular month of March. Again, partnerships during the difficult times are, it will work only if partners are honest and they want to work as a partner.
[22:54] Andrei Palamariu:
I think you’re right and it has to come from a past of working together and sharing both the successes and the failures and it’s easier to have the trust relationship where you can share information, plan together, share the workforce and so on. We also saw quite a number of companies shifting their production or shifting their product towards helping the efforts. Even, I think you shared about Zara shifting their production to a manufacturer hospital scrubs. Different manufacturers from folks going to sharp are changing a few things. Do you think more companies should make this a priority, given the fact that the crisis might take months, what do you think?
[23:46] Ashish Pujari:
It’s for the first time, honestly, in my working career, I have seen this agility of certain organizations to address the pressing need of the moment here. It’s really heartening. Obviously, this is a global crisis that every individual and company that cares would want to do their bit size of help and honestly, in this particular line, it doesn’t matter. Whether you call it a book, say LVMH doing something or Zara or Gap, and some of these are more leading names have joined this whole sharp folks corner, etc and helping and nothing wrong with that. Unless this is done for that sake of cheap publicity and we need to kind of make sure that this is done with genuinely feeling from the heart. It should be a priority? Now, from my point, this is debatable. Priority in my mind stays the same as before. Employees, customers, and shareholders. If the additional activity complements these and makes the world a better place and absolutely why not? You should go ahead and do that but the priority of an organization remains the same, whether there’s a crisis or not.
[25:15] Andrei Palamariu:
Correct. Let’s go to the team side of the topic. I wanted to ask if everybody’s working or a lot of people are working from home or working remotely and trying to be efficient. I know you have to manage both your team and clients all over the world through the tools, the internet boots at our disposal. How are you enabling your team and SAP to work from home, the challenges and the positive aspects that you see?
[25:56] Ashish Pujari:
Let me paint the scenario as of now. I live in a house in Singapore and there are four members in my family who are all online right now. I am connected in a room and talking to you over Zoom. My wife is on a different level in a different room and she’s doing her work so she is connected as well. My son who studies in the US is doing online classes and taking online classes as well because he teaches there as well. My daughter, who’s in school in Singapore is attending classes online. Life is very different and we have all adapted to that. SAP actually allows a whole lot of tools for online meetings as long as they’re concerned with our security staff. Microsoft team is something that is widely used along with Skype. To be honest, working from home for some of us is not a new concept because SAP has always had this flexible arrangement. Even before the crisis, a large chunk of the workforce worked from home as when the situation demanded. No additional tools have been discussed. Honestly speaking, obviously, some security standards have been installed and all that, but that’s about it. What we have been encouraging our teens is see if they need something to make their home office better, we’d say having a printer, be it having better chairs and all that, but that’s about it.
[27:49] Andrei Palamariu:
And it’s a good point. You have a history of working from home, it’s always good that you get these lessons learned and then you apply them now. A lot of companies are trying to figure things out as they go. You’re touching on security and I think even Zoom had some but publicity around that. How do you see the topic of cybersecurity? And I know it’s very connected to technology in this case, but have you seen clients strengthen their cybersecurity standards to guarantee a safer work from home policy?
[28:20] Ashish Pujari:
This is a topic completely beyond me. However, I am sure that’s happening. Sometimes when you work for large corporations, you take these things for granted. I have seen within SAP this happening we had to click on certain buttons to make sure that our computers were basic compliant to these new security standards and all that but, this is not my strength.
[28:56] Andrei Palamariu:
No, but as you said, I know SAP has so many layers, and you have to make sure everything is in order until you have the working from home policy and so on. And going through to the hiring topic I know there’s a lot of companies who have put hiring on hold or are delaying some decisions. How is hiring affected for SAP?
[29:21] Ashish Pujari:
Let’s talk about a business ten points. We are here if there is a business critical higher to be done, we would go ahead with it, and I’ll give you an example. I’ve lost six or eight months, I’ve been working on building what we call a lapse as supplies and innovation lab around the whole industry for other topics in Japan. And we had already secured headcounts for those and that we see as business critical for us because we have already engaged with customers. We have started some co-innovation with customers and we have started the process of making sure that there is a lot of adoption of our solutions in the customer environment there. We would not hold that back, we would go ahead and do that, we’ll hire those people. However, most companies I know or the ones I’m talking to are suggesting selective hiring, focus on talent retention rather than talent scouting and hiring. That’s something that I’m hearing and I’m seeing around myself with the emphasis on companies trying to kind of leap from the others and become a data driven enterprise. I’m seeing a small surge in demand forces, the analysts, its supply chain planners either science is kind of guys and I see that happened because we discuss that in the initial part of our discussion right now that we want to make these processes board data driven, more automated to make sure that there is a certain amount of resilience building for the future.
[31:17] Andrei Palamariu:
I know a lot of our clients, candidates at the same time are in a situation where you have a bit more flexibility working from home, where you can also take advantage of online education, and you can polish or even learn new skills. Do you think this data focus skills analytics business intelligence planning are the highest in demand at the moment and should learn or focus on?
[31:58] Ashish Pujari:
Absolutely, and I said it already that we were seeing that with the whole industry for all objectives kicking in with data driven supply chains, data driven enterprises kicking and intelligent technology is being deployed at scale, and it’s no more just testing. They are being deployed at scale now. We’re seeing more and more the requirement of experts who understand the management of data and usage of this data for superior outcomes. Absolutely, these are the skills that are in demand and will stay in demand as we try to build in redundancies in the supply chain out of these kinds of disruptions that keep hitting us.
[32:50] Andrei Palamariu:
As we get closer to the last questions. I wanted to ask a question, APAC as a whole is quite diverse. Do you see any of the APAC markets that are doing a better job both in economic terms with recovering better, higher demand or with the innovations compared to others?
[33:20] Ashish Pujari:
The crisis part of it is still not over. As I mentioned that, the tail end is going to be long, but from the early indications that we are getting the momentum that existed in 2019 or the tail end of 2019 seems to still go on. If you talk about, the mining and resources is in Australia and they’re trying to reinvent themselves, those discussions are still on. They haven’t pulled the plug out of depth or you talk over this big, large chemical companies or oil and gas companies in North Asia when they were looking at how can we help them make their assets. As you’re more intelligent, make sure that the cost of servicing of those assets are going down while the up time is managed and those discussions are still going on. I think if people have come out with certain ideas for a long term digital transformation, those are still on the map. Obviously, there is a scrambling going on and certain priorities that are being kind of shifted but, I would think as soon as things get into control, these initiatives will be back on the radar.
[34:55] Andrei Palamariu:
And I think Asia is in a better position to recover faster than, unfortunately, Europe and the U.S. were talking before the recording did the arrow in a bad shape for the moment. Hopefully it will be better. As the last thought from your side, what should we expect in the next few months and how should we prepare the supply chain professionals?
[35:19] Ashish Pujari:
Wow, that is a profound question. The threat of this deadly virus is very real. I mean, while governments all over the world are trying to contain the spread, the situation is extremely fluid. This is the time for supply chain heads to do some smart scenario planning using intelligent technologists. They should cover their entire cycle of design to operate. Starting with getting some really customer experience data, taking a hard look at product design, so that it’s in line with the customer expectations, improved planning and manufacturing to be more data driven, use networks to ensure smart logistic simulations and to invisibility and kind of take the time to make their assets smarter. Obviously, this will not happen simultaneously. But defining the vision to create supply chain resilience is key. You remember the old joke, Andrei? How do you eat an elephant? Then the answer being, “one bit at a time”. Companies need to privatize an act now. One step at a time, but a line to the vision of an entrance supplies resilience. For the longest time used to talk about supplies in excellence but this whole destruction that is staring at our face. I feel supply chain resilience takes center stage and I think that’s my parting statement.
[36:58] Andrei Palamariu:
Thank you very much. I have to agree with that statement that resilience is first priority and will be for a long time now. Everything around us is changing and thank you for sharing your wisdom with us. We will be happy to share the resources that SAP is promoting and try to use us tools to help at the moment. Let’s hope for the best.
[37:29] Ashish Pujari:
Thank you very much for having me on this podcast. I really appreciate your contribution as well, because I love this conversation and I look forward to hearing most of you. Thank You
[37:40] Andrei Palamariu:
My pleasure. Thank you. Thank you for listening to our podcast for all the show notes and information discussed in the episode, please follow alcottglobal.com/podcast also, if you found this interesting, please subscribe on iTunes, Spotify, Stitcher or wherever you get your podcasts from.