REDUCING GLOBAL CARBON FOOTPRINT THROUGH EFFICIENT SUPPLY CHAINS
“I strongly believe that once people are oriented towards a worthy objective and make the fruits of their efforts, there is a very little governance or oversight required afterwards”.
SELVAM VMS, CEO of H&S Supply Chain Services
In the B2B SCM space, H&S Supply Chain Services Pvt. Ltd. has created a profound and an enormous impact. With exemplary services to its clients, the company has made a mark for itself.
COMPANY PROFILE AND ITS OFFERINGS
H&S is a pioneer in 3.5PL services in India. The organization’s offerings are categorized into two phases: Consultative and Executional.
In the Consultative phase, it works with companies and helps them to build an ideal supply chain model that is optimal for their business needs and environment. The company ideates through several models, and’ zero in’ on the model that best fits the client’s requirements. It also costs the model out for the client (how much will it cost the client to run this model). Once the model is finalized, the company goes ahead, and executes the model for the client – it actually runs warehouses and transportation services, inventory management, etc. – at predefined prices that are fixed right at the beginning of year. In other words, H&S Supply Chain Services are not mere consultants who build a model and leave it to the client to execute. The company works with the client and takes over the entire executional responsibility as well, insulating the client from any variance between what’s built in a theoretical model and what is actually executed on the ground.
Selvam VMS, the Founder & CEO, states, “Through these offerings, we drive towards our vision of ‘Reducing Global Carbon Footprint through building Efficient Supply Chains.’”
To ensure an unbreakable faith of clients in the company, H&S Supply Chain Services follows an indispensable mantra which says, “Don’t just meet, beat client expectations.” To deliver exemplary services, the company spends a significant amount of time with clients to understand their real underlying problems, and after a deep analysis, work overtime to solve them. As a principle, the venture builds product features that clients really require, and directly affects clients’ deep needs.
This approach helps in accomplishing two essential things: it helps to address the biggest pain points of customers, and thereby ensuring highest levels of client satisfaction, and the company’s people are internally able to allocate resources (time, energy and money) to building solutions appropriately, thus avoiding wastage of resources on ‘low return’ areas.
As this cycle (spending time with clients, understanding client requirements, building solution, delivering value) stabilizes, the organization experiences an enormous trust build-up with clients and appropriate use of the resources as well.
The organization has been privileged to work with several industry leading clients. Over the past 4 years, it has worked with a multitude of several clients such as Butterfly Kitchen Appliances, one of the India’s topmost kitchen appliances brand, ITC Limited, Marico Limited, Medimix Soaps, Gold Winner Sunflower Oil, etc.
MATCHING UP WITH THE TECHNOLOGY
In today’s era of an advancing technology, H&S has invested a lot of resources in the domain.
The company has classified its technology initiatives into two buckets – client facing and internal efficiency building. Client facing initiatives involve significant Research & Development. Through a subsidiary called DiscoveryIoT, H&S is working on several path-breaking technologies including Internet of Things (IoT), Artificial Intelligence (AI), and Blockchain Technology.
H&S is India’s first and probably only Supply Chain Company to have piloted Blockchain and IoT technology in a warehouse setting. On the other hand, internal efficiency building tools provides an aid to achieve one or more of the three metrics of cost, quality, and time.
It is the one and only start up in this space to work on superior Business Intelligence Tools that help H&S to gain tremendous visibility into daily operations. It is the availability of such tools that has helped its scale from a meager 10,000 square ft. of operations in 2015 to more than 5Lakh square ft. today. These tools have helped the company to govern and monitor operations with no or minimal loss of efficiencies.
Vision based operations is another area of keen interest for the company, and it has invested a lot of resources in this direction. H&S foresees a time where operations will be completely controlled through vision based hardware like cameras, in conjunction with Machine Learning algorithms.
For a company to flourish there is a great team work involved. Selvam VMS, the founder, states, “Right from the beginning, I have been fortunate to have an exemplary team working alongside me. We are a bunch of young members (the average age of our team is less than 29 years).” As H&S expands, delegation and self-measurement have been two cornerstones of its evolution.
H&S pays a great heed to transparency; a lot of strenuous efforts the organization is putting to achieve. As a tightly knit organization, the reputed organization operates on the basis of trust, where literally everyone has an access to most of the information about all the aspects of company – its operations, clients, pricing models, cost structure, pipeline etc. “Once these principles are established, the team basically becomes self-driven, with very little supervision requirement. This also has built a culture of ownership throughout the team, which helps us to navigate market challenges with minimal turbulence.” –Margaret Ignatius, Sr Manager – HR
In every organization, there is a necessity to raise the energy levels of the employees through various interesting activities. On the same notion, H&S undertakes a host of employee engagement activities which include training sessions, team activities, annual employee conferences, family meet-ups, monthly outings, etc. At a professional level, ability to work independently without interference from the management side helps the team to maintain high levels of energy.
H&S also runs several unique and strong ‘Entrepreneur Building’ programs, which groom employees to become self-reliant in the long run. Pre-qualified team members go through several modules of training which helps them to become standalone entrepreneurs
CROSSES DURING COMMENCEMENT
Like other startups, H&S underwent through numerous obstacles during initial days of its inception. Each startup faces a three-pronged battle – customer, product and regulatory. The foremost challenge is whether the product fits a market requirement or not. When this organization was launched, the first thing that the company wanted to know was whether there are potential customers facing the problem that it set out to solve or not, and whether they were willing to pay for it. During the process, one very important learning was that in India, though there were numerous challenges faced by brands or companies in the SCM space, and despite the fact that the company’s solutions actually made their lives easier, but their willingness to pay was very low. Either customers couldn’t visualize how its solutions benefited them, or were not valuing the benefits offered. And given that SCM is a highly cost conscious space, H&S faced a lot of financial issues during the initial stage.
After a few customer meetings, the company decided to undertake a POC i.e. Proof of Concept approach. In this methodology, H&S took very small portions of the client’s SCM, and built solutions to optimize that portion. Once, the company was able to demonstrate the benefits to clients in the micro-environment, it turned out to be an ‘Aha! Moment’, resulting in increased acceptance of its solution.
Through this approach, the H&S was able to quickly establish its product market fit, and focus on growing the client base.
The CEO says, “The most indispensable learning in navigating through early challenges is to build a strong and trustworthy team that can support you during the initial turbulence. I would place a strong premium on candidates who are willing to stretch beyond regular job descriptions and beyond regular work hours. The key is to realize that one cannot navigate through early challenges alone, and needs support there.”
A prominent message by the serial entrepreneur, “You need at least one or two persons whom you can blindly trust to deliver tasks deployed to them, with zero malafide intentions.
Lacking this would severely handicap an early stage entrepreneur, and I would strongly urge novice entrepreneurs to build this support system in the initial days.”
Another prominent mistake that most entrepreneurs make is over engineering. In an effort to build something beautiful, companies end up adding extra features to the product that the customer does not value. At early stages, all companies face severe resource constraints. Hence this must be avoided at all costs.
“Only build what the customer needs, and is willing to pay for.” – Selvam VMS
At several times, H&S had a multitude of opportunities to achieve revenue traction at the cost of compromising its core value system of reducing global carbon footprint. H&S refused to undertake such revenue opportunities, and in retrospect, these are some of the best decisions that the organization made.
ADAPTED TO THE LATEST NEEDS OF MARKET
Over the years, the company has witnessed clients’ evolving from viewing SCM service providers as partners in business, rather than mere vendors. Clients’ expectations have moved from an Availability and Accuracy framework to a Partnership and Advice framework. Clients now look at their SCM partners to adapt quickly to the changing needs of their business environment, with minimal or zero disruption to operations.
The company has been extremely proactive and been ahead of the curve in handling such market dynamics changes. It continues to keep a very open view towards market changes in the near future, and is making necessary investments in infrastructure and talent to handle these changes efficiently.
One such case has been the growth of e-commerce as a channel for most of the clients. When the venture started in 2015, e-commerce as a channel represented less than 0.5% of the sales volume for clients. It has drastically increased to about 10-15% now. With this, all the associated complications in delivery requirements have also increased manifold. Prabhakaran Nambiar, the COO adds “We at H&S have built out exclusive verticals and talent pools to handle this requirement, and have consistently been delivering 99+% OTIF in the e-commerce vertical compared to 88-89% in the industry.”
THE NOBLE VISION
The visionary states “Right at the commencement, I made a promise to my employees that we would strive to be a bootstrapped and self-funded organization. Despite the significant long term financial investments that we have made, we have successfully remained self-funded.
While I personally do not have anything against raising VC/PE funds, my team and I would never do so at the cost of compromising on our core value systems. For us, the planet comes before profit, and our core vision of reducing global carbon footprint is non-negotiable. If our future course of action requires us to raise external funds, we would be open to partnering with like-minded VCs, who share our vision.”
TRANSFORMATION IN THE ENTREPRENEURIAL WORLD
There have been extremely significant changes in the entrepreneurial space over the past few years. One can easily correlate this with the volume of investment (Angel/ VC/PE) activity that has accompanied this dynamism.
Though the initial fervor of buying sales has died down, strong business models have continued to sustain successfully. One of the biggest changes that the company witnessed, and have rode through, was the shift from a service approach to a product approach. There has been a surge in activity in spaces that have tried to replace services with automated interfaces or product interfaces. Also, the appetite for alliances and partnerships among players has seen a significant improvement.
Books are the portals to an immense knowledge and information. Two of the best and inspirational books that Selvam learnt a lot from are “First, Break All the Rules” from Gallup; and “Work Rules!” from Laszlo Bock of Google.
The former book talks about creating great managers in the organizations who can inspire employees to deliver exemplary results for organizations.
The second book is a great insight into how Google operates, and how smaller organizations can adapt to the learning and principles into their daily operations, and transform themselves.