CXOToday has engaged in an exclusive interview with Nick Vyas, Executive Director of the USC Marshall Center for Global Supply Chain Management
Q1. What is India’s current standing in global trade growth, and how can it capitalize on its strengths, particularly by actively involving the MSME (Micro, Small & Medium Enterprises) sector?
India has surpassed China as the world’s most populous country and its growth is critical for the global economy. For the next several decades, India will be a substantial contributor to the global workforce. By 2030, its GDP is predicted to reach 7.3 trillion USD. With this rate of economic growth, India’s GDP will surpass that of Japan by 2030, making India the Asia-Pacific region’s second-largest economy.
Over the past ten years, India has demonstrated impressive growth in global trade, particularly in sectors like information technology, pharmaceuticals, textiles, chemicals, and automotive. The steady rise of foreign direct investment inflows into India during the last decade underlines the Indian economy’s high long-term growth prospects.
But challenges like regulatory constraints, infrastructural inadequacies, and market access issues have limited the overall potential.
To overcome these hurdles, the MSME sector, which contributes to 45% of total industrial employment, 50% of exports, and 95% of all industrial units, could play a pivotal role.
Implementing these strategies effectively can unlock a new growth phase for India in global trade:
▪ Encourage MSMEs to embrace digitization and technology upgrades. This can increase productivity, lower operational costs, and improve quality, allowing them to compete more successfully on a global scale.
▪ Reduce regulatory barriers, simplify the tax system, and streamline import and export procedures to create a favourable business environment.
▪ Improve MSMEs’ access to financial services. Collaboration between the government and financial organizations could help to solve the credit availability problem.
▪ Provide skill development programs and training to improve the capabilities of the workers in the MSME sector.
▪ Encourage innovation by encouraging and motivating MSMEs to create one-of-a-kind products and services.
▪ Ensure improved market access through favourable trade agreements with other countries and assist MSMEs in establishing connections with foreign customers and investors.
Q2.What are the key strategies and policies that India can implement to effectively maximize its position in the global supply chain, with a specific emphasis on empowering and integrating MSMEs?
To strengthen India’s position in the global supply chain and empower the MSME sector even more, the country should consider pursuing the following initiatives and policies:
● Strengthening Infrastructure: Infrastructure is the foundation of a well-functioning supply chain. Increased investments in road, rail, port, and digital infrastructure can boost India’s desirability as a supply chain partner. For MSMEs to participate in the global digital economy, a strong digital infrastructure is essential. Infrastructure development can enhance India’s Logistics Performance Index (LPI), a benchmarking tool created by the World Bank for identifying trade logistics obstacles and opportunities.
● Enhancing Regulatory Framework: Easing regulatory complexities, streamlining bureaucratic processes, and improving the overall business environment can help Indian and international enterprises run more smoothly. This is important for MSMEs that are having difficulty navigating the regulatory landscape. With an enhanced regulatory environment, the international community will experience a more inviting business climate.
● Promoting Digital Transformation: Encouraging digital transformation within the MSME sector can be transformative. Providing technical training, access to digital tools and technologies, and fostering digital literacy and innovation can equip these small and medium enterprises for participation in global supply chains.
● Developing Human Capital: Investing in supply chain management education and training might result in a more competitive workforce. This investment is particularly important for the MSME sector. Partnerships with academic institutions, both domestically and globally, could be beneficial in this effort. High-level programs, like USC’s M.S. in GSCM, serve as a good model for such initiatives. Furthermore, beyond focusing on higher education, some of the ongoing initiatives from the Ministry of Skill Development and Entrepreneurship can synergize with USC Kendrick Global Supply Chain Institute to offer certifications for life-long learning and professional development opportunities.
● Fostering Innovation and Entrepreneurship: Encouraging innovation and entrepreneurship, particularly within the MSME sector, can lead to unique solutions for supply chain challenges. This could involve funding support, facilitating incubation programs, and creating a supportive regulatory environment for startups.
● Improving Access to Finance: Streamlining access to finance for MSMEs can significantly aid their growth. This could involve simplifying lending norms, encouraging venture capital investments, and offering financial incentives for businesses that successfully integrate into global supply chains.
● Building Resilience: Given recent global supply chain disruptions, building resilience is a strategic goal. This process can be supported by promoting supply chain risk management strategies, encouraging diversification, and building crisis management capabilities.
● Promoting Sustainability: With global supply chains increasingly focusing on sustainability, India must ensure the sustainability of its supply chains. This includes supporting ecologically beneficial behaviours, encouraging the use of renewable energy, and enforcing stringent environmental regulations.
When implemented effectively, these strategies could help India boost its standing on global indices such as the LPI and the World Bank’s Doing Business ranking; not only would this signal a more attractive and conducive business environment, but it would also enable India’s MSMEs to effectively integrate into global supply chains, thereby driving India’s growth and prominence in the global supply chain ecosystem.
Q3. How has the post-pandemic supply chain crisis reshaped the priorities and strategies of industries in terms of supply chain management?
Businesses all throughout the world have encountered significant challenges because of the post-pandemic supply chain crisis. Lockdowns, transit restrictions, labour shortages, and increased demand for specific goods and services, among other issues, have created economic interruptions. These difficulties have had a significant impact on the supply chain management priorities and strategies of various sectors.
The global shift in supply chain strategy because of the post-pandemic crisis presents numerous opportunities for India. Now, let us concentrate on growth enablers, which would have a a significant impact on all economic sectors and help fuel the growth engine.
▪ Foreign Investment Attraction: India, with its sizable labour pool and expanding economy, might provide an attractive option to other manufacturing hubs as businesses diversify their supplier bases to lower risk, particularly for sectors like textiles, pharmaceuticals, auto components, and electronics.
▪ Regionalization and Nearshoring Opportunities: Regionalization trends may prompt more South Asian and Middle Eastern companies to consider India a closer and more viable supply source. Additionally, this could stimulate intra-regional trade and strengthen regional supply chains.
▪ Digital Adoption and Innovation: India’s IT sector is renowned worldwide. As global supply chains become more digital, India can provide innovative AI, blockchain, and IoT solutions. This could increase service exports and position India as a leader in digital supply chain management.
▪ Sustainable and Ethical Practices: With the increasing global emphasis on sustainability, India’s traditional and environmentally friendly practices in textiles and handicrafts can gain more value. Moreover, it compels Indian industries to adopt more sustainable and ethical business practices, enhancing global competitiveness.
▪ Inventory Management: Indian companies can take advantage of the shift away from lean inventory models. By offering reliable and flexible production capabilities, they can support global companies looking to maintain safety stocks or buffer inventories.
▪ Collaboration Opportunities: Increased collaboration in global supply chains could allow Indian businesses to form strategic partnerships with foreign companies, opening new markets and gaining access to advanced technologies and practices.
Again, to fully capitalize on these opportunities, India must continue to strengthen its infrastructure and business climate, cut down on red tape, invest in talent development, and guarantee ease of doing business. Supporting digital transformation and sustainability practices in the MSME sector may also be essential for taking advantage of these shifting dynamics in the global supply chain.
Q4. How does the MSME sector contribute to India’s supply chain, and what potential does it hold for fostering inclusive growth and driving innovation within the industry?
Removing friction from various segments of the supply chain is critical to redefining post-pandemic supply chain management techniques. Here is how addressing these frictions can benefit industries:
▪ Regulatory Burdens: The flow of products and services might be hampered by complex and restrictive restrictions. To enable better trade and supply chain operations, industries and governments may collaborate to reduce rules, eliminate needless bureaucracy, and adopt harmonized standards.
▪ Corruption Mitigation: Corruption in the supply chain can result in inefficiencies, higher costs, and lower quality. Transparency and accountability measures, as well as anti-corruption regulations, can help to mitigate these risks.
▪ Information Sharing and Visibility: Improved information exchange and data transparency can help organizations predict interruptions, enhance inventory management, and make informed decisions. Technologies such as IA, ML, IoT, and blockchain can be used to secure and communicate data among supply chain partners.
▪ Compliance and Quality Assurance: Ensuring compliance with regulations and maintaining high-quality standards is critical. Industries may invest in rigorous quality control processes, certifications, and auditing to enhance product integrity and consumer confidence.
▪ Digital Transformation: Embracing digitalization can help remove friction from manual processes and improve supply chain efficiency. Automated workflows, real-time tracking, and digital documentation can minimize delays and errors.
▪ Supplier Collaboration: Collaborative relationships with suppliers can foster open communication and trust, reducing the likelihood of disruptions caused by non-compliant or unreliable partners.
▪ Risk Management and Contingency Planning: Industries can develop comprehensive risk management strategies that address potential issues arising from regulatory changes, compliance failures, or quality-related challenges. Contingency plans can help businesses respond quickly to unforeseen events.
▪ Training and Education: Industries may invest in training programs for their supply chain workforce to improve knowledge and understanding of compliance requirements, quality standards, and ethical practices.
▪ Sustainable and Ethical Sourcing: Addressing regulatory and compliance issues can contribute to more sustainable and ethical sourcing practices, promoting social responsibility and environmental stewardship throughout the supply chain.
By resolving these frictions, industries may build more efficient, transparent, and resilient supply chains that are better prepared to face future difficulties. Furthermore, concentrating on reducing barriers and boosting compliance and quality can improve industries’ overall reputation and reliability in the eyes of consumers and stakeholders.
Q5. What factors are driving the inspiring trend of Indian students embracing globalization in their pursuit of supply chain studies? How does the exposure to diverse supply chain ecosystems through international education contribute to India’s readiness to actively participate in the global supply chain?
The University of Southern California’s (USC) Master of Science in Global Supply Chain Management (MS GSCM) program has made significant contributions to the field of global supply chains. The program, which has been ranked number one by U.S. News & World Report for the last five years, has been shaping the future leaders of supply chain management, including many students from India.
The USC MS GSCM program offers a comprehensive, end-to-end curriculum that covers all aspects of supply chain management. The curriculum is aimed to provide a thorough understanding of the intricacies and problems of global supply chains through a combination of theoretical knowledge and practical experience.
One of the program’s distinguishing characteristics is its focus on spearheading live projects with top industry partners. This helps students to apply what they have learned in the classroom to real-world business operations, honing their critical thinking abilities and comprehension of practical challenges. Our MS GSCM program is categorized as a STEM degree. This is a significant benefit for international students, particularly those from India because it allows them to work in the United States for up to three years after graduation under the Optional Practical Training (OPT) extension. This extended term allows for a more in-depth immersion in the US supply chain ecosystem, allowing students to gain significant professional experience and in-depth knowledge of the operations, challenges, and innovations prevalent in one of the world’s most advanced supply chain settings.
Given the fast-paced nature of supply chain management, which is fueled by variables such as technology, data analytics, and globalization, this practical job experience is priceless. It provides students with firsthand experience with cutting-edge technologies, best practices, and the skills to handle large-scale supply chains and their complexities. They will also get the opportunity to engage with various teams, learn the complexities of cross-cultural communication, and develop global professional networks, all of which are critical skills in today’s interconnected business world.
When these students return to India, they bring with them a wealth of information, advanced skill sets, and global perspectives gained throughout their studies and professional experience in the United States. They may use this knowledge to capitalize on opportunities in India’s expanding supply chain sector, dramatically shortening the industry’s learning curve.
By efficiently sharing acquired best practices, innovative methodologies, and practical experiences within India’s local supply chain landscape, these students improve India’s supply chain competitiveness. They operate as a vital link between India’s regional supply chain initiatives and global best practices, actively contributing to India’s readiness to succeed in the global supply chain ecosystem.
Another unique value of the USC MS GSCM program is the Industry Network Connect event (INC). INC supports students to engage and learn from industry professionals, gaining valuable insights, understanding trends, and developing key relationships that can lead to exciting career opportunities.
Finally, the program involves experiential trips to global trading hotspots such as Singapore and Vietnam. Students’ perspectives on international trade and supply chains are broadened by these educational travels, which expose them to a variety of corporate environments, methods, and cultures. They also offer a thorough awareness of these countries’ position in the global supply chain, as well as their unique challenges and innovative solutions.
Q6. Could you provide insights into the USC Marshall GSCM (Global Supply Chain Management) program? How does it stay at the forefront of the industry, offering the latest trends and best practices in global supply chain management?
Certainly! As the Founding Executive Director of USC Marshall’s MS Global Supply Chain Management (GSCM) program and the Kendrick GSCM Institute, I am excited to share insights on how we have developed and continue to sustain our industry leadership. Through Networks, Education, and Advanced Research (NEAR), we hoped to connect the world.
When we launched the MS GSCM program, we understood the critical importance of combining academic instruction with real-world experience. While our top research institution can provide challenging classroom instruction, we believe that a strong industry connection that provides practical experience for the remainder of the week is essential. This conviction has influenced our program to emphasize academic knowledge while also providing our students with an industry-oriented learning experience.
The generous endowment that enabled the establishment of the Kendrick GSCM Institute solidified our commitment to providing industry-relevant education. The Institute is a strong platform for research, innovation, and global outreach. Our professors are recognized experts in their domains, and they interact with industry partners and deliver world-class research to keep up with the latest trends and best practices in global supply chain management. These findings are integrated into our curriculum, ensuring that students acquire the most current and relevant information.
Our vision has been a significant aspect in driving the success of our program. We recognize the value of worldwide exposure in today’s interconnected world, particularly in supply chain management. We have been working hard to broaden our global influence, particularly in emerging markets such as India.
These factors contribute to the ability of USC Marshall’s GSCM program to keep ahead of industry trends. We are deeply committed to preserving this momentum by assessing and upgrading our curriculum on a regular basis, developing our industry partnerships, and expanding our global reach. I am glad that our students have the knowledge and abilities needed to navigate and lead in the complicated world of global supply chain management.
Q7.Could you provide some insights into the upcoming Global Supply Chain Summit at USC Marshall and its significance in fostering dialogue and collaboration among industry leaders, academics, and students? How does this summit contribute to shaping the future of global supply chain management and addressing the challenges of today’s interconnected business landscape?
This year’s Annual Global Supply Chain Excellence Summit theme, “Reprogramming Global Supply Chain DNA: Driving Strategies, Technologies, and Human Capital in a New World Disorder”, is both timely and significant. Over five hundred industry professionals gather to discuss best practices and micro/macro trends in global commerce and supply chains. It represents the tremendous transformations and uncertainties that are transforming the global supply chain landscape and highlights the importance of new strategies, technology, and human capital development.
I have written about “The New World Disorder,” which implies that global supply systems are becoming more complicated and unpredictable. From the COVID-19 pandemic to geopolitical conflicts and the ramifications of climate change, these complexities necessitate rethinking and reprogramming existing supply chain tactics. At the 11th Summit, top industry executives and academics will explore novel solutions to improve supply chain resilience, agility, and sustainability. Attendees learn strategic initiatives, exchange perspectives, and help shape the future of global supply chains.
The technology’s fast development is significantly impacting supply chains. AI, blockchain, and IoT are revolutionizing supply chain operations, providing more efficiency, transparency, and flexibility. The 11th Summit will delve into these technological developments, investigating how a triple-bottom-line mindset may be used to reprogram the global supply chain DNA and navigate the new world disorder.
The 11th Summit will yet again emphasize the importance of supply chain management education and skill development in nurturing a capable workforce. This year’s powerhouse panel sessions will help students understand the growing demands of the industry, encourage them to innovate, and become well-equipped future leaders in the global supply chain sector.
Finally, our incoming cohort of 130+ students from around the world will engage in intellectually stimulating conversations and network with industry experts throughout their first week of orientation.
Q8. Lastly, what are some of the key challenges and opportunities that lie ahead for India as it continues its journey toward becoming a key player in the supply chain industry?
With the wind in its sails, India continues its journey toward becoming a prominent player in the global supply chain industry. In less than a decade, the country is becoming the world’s third-largest economy, a tribute to its tremendous economic growth and vast potential. Global trust in India’s potential to play a key role in the global supply chain ecosystem is at an all-time high.
However, some of the following issues must be addressed:
▪ Infrastructure: Despite considerable progress, the need for additional logistics and transportation infrastructure development remains difficult. Investing in road, rail, and port infrastructure, as well as modernizing customs and import-export procedures, are crucial if India is to fully realize its potential.
▪ Regulatory Environment: The complexity of regulations and bureaucratic hurdles can still slow progress. Continued reforms to simplify business regulations and create a more conducive environment are essential to attract domestic and international businesses.
▪ Technology Adoption: While India has a burgeoning tech industry, applying advanced technologies like AI, IoT, and blockchain in supply chain operations remains limited, especially in the MSME sector. Enhancing technical skills and infrastructure is crucial.
▪ Sustainability and Ethical Challenges: In an era where businesses worldwide are prioritizing sustainability and ethical practices, Indian companies need to ensure their supply chains are compliant with these standards, which may require concerted efforts and investments.
While I discussed the challenges, let us highlight some of the opportunities:
▪ Diversification of Supply Chains: As global businesses seek to diversify their supply chains following the disruptions caused by the pandemic, India is positioned as a compelling alternative. Its burgeoning workforce, fast-growing economy, and strategic geographic location make it an attractive hub for businesses looking to mitigate supply chain risks.
▪ Digital Transformation: With its robust IT and digital services sector, India is well-placed to drive the digital transformation of supply chains, providing innovative solutions using AI, IoT, blockchain, and more.
▪ Rising Domestic Consumption: With its rapidly growing middle class and increased consumption levels, India is evolving into a significant end market in global supply chains. This trend extends beyond the traditional view of India as merely a source of inexpensive labour or raw materials.
▪ Government Initiatives: Government initiatives, such as ‘Make in India’ and ‘Atmanirbhar Bharat’ (Self-Reliant India), can bolster India’s position in global supply chains, highlighting the country’s manufacturing capabilities and fostering self-sufficiency.
▪ Robust Economic Growth: India’s projected ascendance to the position of the third-largest economy increases global confidence and optimism. This economic momentum is a huge opportunity for India to assert its role in the global supply chain landscape.
While there are limitations, India has numerous opportunities to play a key role in global supply chains. India is well-positioned to become a strong player in the global supply chain industry with strategic planning, ongoing investment, and a focus on maximizing its capabilities.
I believe that with sustained growth, strong global confidence, and continued focus on major initiatives, India is poised to become the world’s third-largest economy in the coming decades and establish itself as a significant global power beyond the service sector.