Leveraging Data Analytics & Technology for Supply Chain Improvement

Leveraging Data Analytics & Technology for Supply Chain Improvement

By: Pallavi Chaudhuri, Procurement Services Director, Perfetti Van Melle

Pallavi Chaudhuri comes armed with 17 years of experience. Her previous organizations include big-wigs such as including roles at Schlumberger, KPMG, and Accenture. She currently leads Procurement automation, Analytics, and Process design for Perfetti globally. She holds an MBA from IIT Kharagpur and a Bachelor's in Electronics Engineering from NIT Allahabad.

In a recent interaction with Women Entrepreneur India, Pallavi shares her thoughts on various aspects of Data analytics and technology to drive supply chain efficiency.

What are some of the key strategies implemented by companies to optimize costs in the supply chain and procurement process?

Companies employ various strategies to reduce costs across different aspects of their operations. One primary lever for cost reduction is through price adjustments for their direct and indirect spending, achieved by consolidating volumes, seeking better terms from both existing vendors and introducing new vendors, and indexing prices with market movements for paper, plastics, energy, agri-commodities, etc.

Innovation plays a crucial role too, as companies can adopt novel materials or ingredients that yield similar product outcomes while trimming expenses. For instance, by using thinner packaging materials or substituting manufacturing components. Additionally, digitalization drives process efficiency enhancements, aided by automation and AI-driven solutions for tasks like approvals and communication. Technology platforms are being leveraged to collaborate with vendors to develop innovative solutions. Efficient working capital management contributes to the bottom line, with tactics such as inventory reduction, optimized payment terms, and dynamic discounting with early vendor payments.

Strategies extend beyond cost containment, embracing broader value enhancement. Sustainability initiatives exemplify this, where companies prioritize eco-friendly choices over cheaper alternatives, exemplifying their commitment to the environment and society. Although such moves may incur higher costs, they align with societal needs and convey a sense of responsible corporate citizenship.

Moreover, organizational policies guide actions to prevent unnecessary cost escalations. This holistic approach acknowledges that value delivery goes beyond mere pricing, as companies strive to meet environmental, social, and ethical goals. In the ever-evolving business landscape, these multifaceted strategies empower companies to not only curtail costs but also augment their overall value proposition.

How do Data analytics and technology help to improve supply chain efficiency and decision-making processes?

In modern supply chains, technology plays a pivotal role across various stages. Beginning with planning, specialized tools consider historical sales, seasonality, and promotions for informed projections. E-procurement solutions facilitate supplier discovery and selection through competitive bidding, followed by contracting and operational purchase.

Enterprise Resource Planning (ERP) systems streamline finance, sales, supply chain, and procurement activities. These digital platforms offer automated reporting, eliminating manual efforts. For manufacturing, product configuration tools ensure accurate material sourcing and alternate options. Logistics encompassing warehousing, transport, and tracking benefit from advanced solutions, ensuring timely deliveries and compliance with storage conditions. Across the supply chain, diverse software solutions enhance visibility, automation, and efficiency, enabling seamless operations.

How do organizations incorporate sustainability and social responsibility initiatives into their supply chain and procurement practices?

In today's landscape, the significance of sustainability is paramount, with a dual focus on social and environmental aspects. Social sustainability encompasses fair labor practices, humane working conditions, and responsible treatment of animals. Notable certifying bodies like SEDEX and ECOVADIS evaluate and endorse organizations and their suppliers for adhering to these standards. Furthermore, specific sectors such as palm oil and sugar adhere to certifications that ensure ethical practices, forest conservation, and protection of wildlife.

Environmental sustainability gains prominence through organizations like the Science Based Targets Institute (SBTI), a global force combating climate change. SBTI aids companies in curbing carbon emissions by setting stringent reduction targets for greenhouse gases, spanning scopes 1, 2, and 3. Companies, especially in Europe and India, are increasingly mandated to disclose these goals and track progress, fostering compliance and goodwill. This drive towards sustainability not only fulfills regulatory demands but also underscores a commitment to the environment and society at large.

What strategies are implemented to optimize inventory management and reduce costs without compromising on quality?

Achieving optimal inventory levels and a balance between excess and scarcity is a paramount concern in supply chain management. The "just-in-time" trend, once prevalent, has shifted due to lessons from COVID-induced disruptions. Companies now prioritize maintaining sufficient inventory to prevent manufacturing halts during supply chain interruptions. Striking the right balance is a meticulous endeavor as firms plan for the optimal inventory threshold.

Moreover, safeguarding storage conditions is vital to preserve product quality. Precise temperature and moisture controls are imperative to prevent spoilage or degradation. Preventing obsolescence is equally critical. For instance, packaging materials can become obsolete due to shifting promotions necessitating updated printing information. Such inventory holds no value and incurs costs. Companies embrace strategies like vendor-managed inventory to enhance cost-effectiveness and streamline inventory management. This dual focus on optimal inventory and efficient management strategies underscores the evolving landscape of inventory practices.

Can you highlight the latest trends and developments in the supply chain and procurement industry?

A wealth of resources empowers professionals to stay informed and improve their supply chain practices. Renowned organizations like McKinsey share supply chain insights through comprehensive documents. Publications such as The Economist delve into specific industry nuances, providing detailed solutions for emerging challenges. Industry-specific magazines like Logistics Insider focus on logistics within regions like India. Solution providers like Coupa, SAP, and Oracle offer use cases and process optimization practices. Industry seminars, which bring together industry experts, offer valuable insights and best practices. However, learning isn't limited to external sources. Collaborating across functions within an organization unveils interdependencies, highlighting how changes in one area impact others. Participating in internal forums enriches professionals with vital cross-functional insights, contributing to a holistic understanding of industry dynamics.


Driving Supply Chain sustainability and resilience are two key aspects organizations, and their suppliers are focusing on. Digital platforms are enabling end-to-end real-time visibility and collaboration across supply chains, providing traceability of ingredients and risk-monitoring capabilities. Analytics of the data is allowing companies to optimize and simplify their supply networks and allow automated and faster fulfillment operations.