A firm's competitiveness is a measure of its productivity. It is, therefore, imperative that effective use is made of our manufacturing resources man, material and machines. Pakistan is blessed with skilled and a large workforce which is capable of delivering excellent results provided the industry makes an effort to train and educate them on modern manufacturing practices. They need to be well looked after in terms of their pay and benefits. The reward should be performance based.

It must be recognised that our public sector organisations are our strategic national assets and not charitable institutions. Shedding the fat would improve the financial health and productivity.

In order to “buy - in” the ownership of the employees, these organisations need to undergo change management programmes aimed at bringing about an attitudinal change. Ideally, programmes like Total Quality Management need to be tailored to the requirements of a particular industry.

It is crucial to have synergy across all functions of an organisation to enhance productivity. The planning process is all encompassing in a supply chain and it is the accuracy of this process as well as implementation across the supply chain that help produce goods at lower costs and with a high degree of certainty.

Internationally, a well managed and integrated organisation works on a sales forecast or a sales plan with an accuracy of +/- 10 per cent. Anything greater than or lower than this will either cause inventory pile up of finished goods and raw materials as well as a sub-optimal manufacturing operation.

Accordingly, a wrong signal will be sent to the suppliers who will, in turn, either order higher materials when not needed and will go out of stock when the inventory is much needed.

Developing the legacy of stand-alone system will not take us anywhere and its maintenance cost will keep on increasing.

Supply chain issues One also needs to dwell on the problems associated with smooth and effective supply chains focusing on the state-run customs department and on the private custom brokerage houses, in addition to the logistics systems and in-land freight forwarders.

To facilitate importers and exporters, the lead times at the Karachi Port as well as the dry ports located in various cities needs to be reduced. Currently, it takes at least 4-5 days for a consignment to be cleared through various stages and finally transported. This means that equal number of day's inventory will be required to be added when ordering to ensure that the operations are smooth and that there is no stock-out.

While the money tied up in the inventories add to the cost of product and unnecessarily drains our foreign exchange. As a result, the process itself becomes sub-optimal.

Logistics Another key element of the supply chain is logistics/transportation. Integrated transport is an efficient transport system that provides physical door-to-door operations within the environment of a simple, streamlined documentation process and a single liability system. The objective of integrated transport is to provide a service that is completely reliable and predictable, and that fully meets the needs of the customer. However, the efficient operation of transport modes and nodal points is dependent on reduced barriers, fewer institutions, and a simplified legal regime. Support for integrated transport will facilitate national and international trade by ensuring an uninterrupted and smooth flow of cargo and by giving better control over the supply chain to manufacturers and traders.

Enhanced competitiveness Any service or manufacturing activity needs to be planned well in advance so that the sales forecasts should be accurate as almost all downstream activities, such as, inventory management, buying, manufacturing as well as movement or logistics hinge heavily on it. All these processes need to be mapped in detail so that non-value added activities are removed.

The cost associated with the physical movement of goods is a major component in any transaction. It is, therefore, a good management practice to work closely with suppliers, evaluate their process on international benchmarked criteria and highlight areas of opportunities which are then exploited for a win-win situation. Working closely with suppliers and considering them as part of extended enterprise will yield benefits.

Security Streamlining of the supply change helps in achieving 'Just-in-Time' mode of operation where inventories are bare minimum, the lead time short and the security of supply on the back of an efficient transportation system, assured.

However, the cost of road transportation is higher compared to the railways.

Work on some dual lines is underway but this has to be extended to the length and breadth of the country. Essentially, the railways' main focus should be on improving coaches as well as facilitating freight movement without adding additional cost.

For food grade items and pharmaceutical products and raw materials, the risk of contamination needs to be totally eradicated. The logistics system is not fool-proof and not free from thefts en-route. The thefts of goods while in-transit are rampant, forcing most companies to install tracking systems as well as pay for the armed guards together with higher insurance premium. This undoubtedly adds to the cost.

Securing the supply chain entails combining of technologies, coordinating processes across many functional areas within a company, coordinating systems and processes with trading partners, and even aligning entire industries to utilise standards-based approach.

Asian policymakers need to be aware of the importance of supply chain management and of how the integration of national supply chains into regional and global supply chains can contribute to sustainable trade growth with key trading partners.