The unprecedented lockdown imposed in March last year turned the supply chain of companies upside down, and the tyre companies were no exception. However, the intensity of disturbance was relatively high for Yokohama Off-Highway Tires (YOHT), which exports more than 90 percent of its production. According to Padmakumar G, Executive Vice President – SCM at YOHT, unprecedented lockdown led to unprecedented initiatives for YOHT. “Most importantly, we learned the importance of being able to react, adapt and set up crisis management mechanisms to weather situations of uncertainty,” says Padmakumar G.
Q) Was Yokohama Off-Highway Tires (YOHT) ready for the unprecedented lockdown?
Padmakumar G: The whole of 2020 was an extraordinary time when ‘business as usual’ was not an option. From the beginning of the year, it was clear that we were braced for a marathon and not a sprint.
At work, we had a unique period of simultaneous supply and demand shocks. Our plants in India were closed for a couple of weeks. As they (plants) were finally allowed to operate, we faced government-mandated operating restrictions and labour shortages that prevented us from running the plants at total capacity.
On the positive side, our plant in Israel was running at full capacity and continued shipments as planned. All sales and administrative employees at global locations were working from home and were doing their best to be accessible at all times. In North America, our network of national warehouses was open, stocked at historically high inventory levels and operating at full local, regional, and national distribution capacity to ensure continued deliveries to locations.
Our competitive position, market share, brand and diversification of our businesses in products and regions helped us see some all-time highs during these challenging times.
Q) Vendors and customers got panicked because of the uncertainties instilled by the lockdowns. How did you keep their morale and confidence intact in those tough times?
Padmakumar G: Unprecedented lockdown led to unprecedented initiatives for YOHT. The acute restrictions and lockdowns created many urgent situations that required immediate attention in the early days of the pandemic. At YOHT, we believe that no crisis should go to waste.
Adaptability, inventiveness and tenacity of our team paved the way to a ‘recovery mode’, and we started planning for the longer-term proactively. We did not face substantial business and operational disruptions – from mitigating the effects of reduced supply to managing disruptions to logistics suppliers and hurdles in meeting their contractual obligations to customers.
YOHT has an agile team that quickly reprioritised the customers’ requirement and ensured critical supply continuation through our multiple sourcing locations. We closely integrated with suppliers, vendors and customers to have better visibility. Consistent communication and streamlining the complexity helped us keep our commitments while keeping the morale and confidence in the most challenging times.
Q) YOHT is mainly into export of products and imports of raw materials? How did you cope up with the supply-demand situation?
Padmakumar G: Prioritisation of critical supply with effective utilisation of available inventories of finished goods, raw materials, and production capacities were the immediate focus in the lockdown situation. What also helped is that we have a wide base of sourcing raw material from multiple sources. We were able to keep our facility running at full efficiency to meet market requirement. We stepped up all measures to ensure that our customers get our products in the earliest shipments.
Q) ATG is now a part of Yokohama, a global giant in the tyre industry. What changes has Yokohama brought in the supply chain?
Padmakumar G: Yokohama has a strong legacy of quality, and its manufacturing and supply chain is very process-driven. The Kaizen processes and digitalisation of our daily supply chain activities helped us improve our process and culture.
Q) What did you learn from the pandemic?
Padmakumar G: The importance of supply chain resilience and risk management is more apparent than ever. Most importantly, we learned the importance of being able to react, adapt and set up crisis management mechanisms to weather situations of uncertainty.
Q) There has always been pressure to reduce cost and improve efficiency by shortening the order-to-delivery period. Could you share a couple of examples highlighting the company’s efforts that reduced the cost and enhanced supply chain efficiency?
Padmakumar G: To shorten the order to delivery, YOHT has initiated Strategic Inventory build-up through S&CP (Sales & Capacity Planning) and effective cost management through strategic buying of raw materials. We have also increased the manufacturing flexibility to reduce delivery in our business of handling 3500+SKU’s.
Q) What new ideas will the company implement at the Visakhapatnam plant to have better supply chain management?
Padmakumar G: Investment in technology that will gain data insights like MES & digitalisation, improving transparency and considerations on sustainability in the supply chain will be key focus areas of our SCM processes in the Visakhapatnam plant.
Q) What are the current challenges in the business?
Padmakumar G: Current situation of increased raw material cost, an aggressive demand for containers and increased shipping cost are some of the major challenges in SCM across industries.
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