EY Procurement global leader shares insights on building supply chain resiliency

Kuntha Chelvanathan joins the panel of judges in this year’s Asian Export Awards.

Kuntha Chelvanathan the EY supply chain and operations practice in Singapore and is the EY global leader for the procurement capability.

She specialises in supply chain, procurement and operations strategy, transformation programs, and related technology implementation.

Recently during this period of disruption, Kuntha has been focusing on driving awareness of and developing supply chain resiliency, automation and digitisation of procurement processes and immediate cost reduction activities for her key clients.

Her expertise includes operating model and organisational design, supply chain and procurement strategy, capability design and development, procurement savings identification and delivery of procurement savings, end-to-end procurement process design and implementation using digital tools, AI and advanced analytics to drive performance, efficiency and sustainability.

As one of the judges in the Asian Export Awards, Kuntha shares her insights on building resilience in the supply chain and on what companies can learn from the crisis.

Which particular markets or sectors are your main focus? Can you share with us your work experience or any backstory that has contributed to your professional career?

Whilst I have extensive experience in end-to-end supply chain, I specialise in the procurement part of the supply chain. EY has a global procurement organisation, which spans all the regions, and we have over 1200 procurement professionals, who cover all sectors such as consumer products, oil and gas, power and utilities, automotive, financial services, and technology amongst others.

As the global leader of the procurement capability, my objective is to grow and develop in each sector that EY provides advisory and technology services in. Personally, I have run large transformations in the consumer products, power and utilities, and the airline sectors. Starting as a hands on procurement professional in the telecom Industry, the natural transition was into consulting to help clients with their Procurement transformation journeys.

My career started in Australia, and then 10 years in Europe, and now in South East Asia for the last 7 years, all doing large transformations for companies who were on a journey to improve their operations, grow profitability, and drive efficiencies within their organisations.

Tell us about the biggest trends you've observed from Asia Pacific's regional export scene for the past six or 12 months.

If we look at the WTO press release on 8 October, “The trade decline in Asia of 4.5% for exports and 4.4% for imports in 2020 will be smaller than in other regions.” This indicates that whilst Asia has contracted, it has not been as badly impacted as other regions in the world. This differing performance of trade for each of the countries within Asia during the COVID-19 outbreak has much to do with the nature of the pandemic and the policies used to combat it.

Lockdowns and travel restrictions imposed significant supply-side constraints on national economies, drastically reducing output and employment in many sectors, particularly non-traded services. Monetary and fiscal policies have also impacted on incomes, and in turn driving consumption and imports accordingly.

What is the pandemic's impact on intra-regional trade, particularly on exports? Which industries are able to stay resilient in these trying times?

Export is just another word for demand for products. Procurement of one company is the export of it’s goods for another company. So they are all linked. Indeed over the last 6 months we have seen a significant drop in demand and therefore exports. Every country and industry has been impacted, but some more than others. Therefore the biggest necessity is the ability for companies to switch their portfolio of products to increase those products that were in demand and decrease those products that consumers indicated were non-essential.

This switch needed a very high level of planning, orchestration and change to the operations of a company, and not a lot of the companies were well prepared or set-up to make such a change in such a short time. The ones that were able to change quickly were able to survive and some even thrive in the last 6 months.

What can businesses learn from the crisis? For those who have been badly hit, what do they need to consider to become more profitable and sustainable in the future?

One of the biggest lessons for organisations is a lesson of resiliency. Resiliency in their product portfolio, their operations and their third party suppliers/partners. For far too long, companies have been focusing largely on cost optimisation and operational efficiency instead of planning for demand changes and strategising on different potential outcome scenarios.

One of the biggest areas of focus needs to be on supply chains.

Building resilience in supply chains is about understanding clearly the end to end supply chain of the organization and identifying critical gaps in the short term and conducting a more comprehensive end-to-end supply chain risk assessment. This assessment needs to include direct suppliers, intermediaries and raw material suppliers. Other than suppliers, production and operations need to be assessed across people, process and technology. They would then need to stress test the supply chain, identify critical risk scenarios and define potential responses. Once these scenarios and responses have been identified, the capability and mechanism to monitor and action these activities need to be developed.

Organisations will need to follow through by taking remedial actions to mitigate weak spots and invest in capabilities in-house to build and manage supply chain resilience. Creating network flexibility through investments in single or multi-site production, or through fully owned or contract manufacturing, can help to mitigate lengthy setup times and manage the costs of alternative sourcing. Many organisations may wish that they could turn back the clock to build in resiliency in their supply chains ahead of COVID-19. To be better prepared for what lies ahead, organisations will need to stop delaying and start building resiliency in their supply chains today.