Mandeep J Sachdeva, Chief Supply Chain Management Officer, Indus Towers
By definition, supply chain management (SCM) is the combination of art and science that improves the way an organization finds the raw materials it needs to prepare a consumer-oriented service or product. Simple it may sound, but it is not. Imagine managing the SCM for a company that requires hundreds of components for its finished product, where for each component, there might be a different supplier. Adding more to the existing complexity is the fact that the product has to be assembled at sites, which are spread across the country, at places ranging from urban cities to the remotest of villages. And although this may sound overwhelming to many of us, this is how telecom tower companies operate. These are the same companies that set up red and white colored towers that can be noticed atop building rooftops, along the highways, on top of a hill, or in the midst of sprawling farmlands.
Now building these telecom towers is just one part of the SCM challenge for telecom tower companies. The other part constitutes managing these towers to keep them functional under all circumstances, so as to ensure an uninterrupted network connectivity and coverage. This is not only important for various mobile network operators whose business relies on these towers, but for the entire nation as the towers ultimately form the very backbone of mobile communication in India.
With changing times, the business models of the telecom tower industry's players have also undergone colossal changes. Increasing competition and the need to be compatible with the ever-changing technologies have pushed the telecom tower industry to pursue leaner business models in order to maintain positive margins. This has resulted in adoption of best practices for the SCM process to bring more value proposition to the complete supply and delivery chain of constructing and maintaining telecom towers.
The entire supply chain in telecom tower industry is divided into three key elements - procurement of infrastructure equipment, building the towers, and managing the towers. The procurement of infrastructure equipment involves construction of the physical tower along with the equipment that goes into the telecom tower site such as diesel generators, power management sets, batteries, air conditioners, etc. On the other hand, managing a telecom tower involves service providers who help in upkeep and proper functioning of the tower. The supply chain for these two key elements of a telecom tower can be made more efficient by reducing inventory, lead times, and related costs in order to assure reliable and more on-time service delivery. Though the adoption of best practices and business models can optimize the SCM process, they cannot guarantee success. As supply is the initial step of the SCM process, the foundation of success of the process starts at establishing a healthy relationship with the suppliers. It is not concepts and models that can help in building relationships with suppliers, but the human element of the organization that engages in business with them.
The telecom tower industry-has focused on following a people first approach. It prioritizes people over performance as great performance can be achieved only when people are happy, thus implying a happy supplier would be more committed toward delivering a good-quality job.
For a start, everyone associated with the telecom tower industry is referred to as business partner, and not as a or vendor supplier. The telecom tower companies have developed a healthy relationship with their business partners as that is the key to success to not just one project, but to the entire business. As these partner relationships go beyond being just one-time transaction associations to become more long-termâ€¨and meaningful relationships, the partners know that they too have an important role to play in holding together the country's mobile telecom communication. The telecom tower industry outsources majority of its work, and thus connects hundreds of component suppliers, logistics, and manufacturing and service providers from across the country. These partners ensure that the expectations and standards set by the tower industry are delivered -â€¨both reliably and on-time.
Ensuring partner satisfaction is important to build long-lasting relationships. Therefore, the tower industry studied and identified the communication gaps that can crop up between the partners and the industry. As an outcome, the industry has incorporated programs that resolve key issues pertaining to contract governance and payment process. In fact, the contract governance program has been devised to ensure effective contract delivery and monitor its effectiveness to increase partner satisfaction. Delayed payment to partners was another major cause of dissatisfaction amongst the partners, and had led to difficulties in the management of working capital and constraints on business expansion. For instance, to ensure on-time payment to their partners, Indus Towers, a leading telecom infrastructure provider, has initiated a practice to pay interest on delayed payments. By prioritizing partner issues and implementing the corrective and procedural changes to resolve them, the tower industry has set the benchmark for other industries for building trust and garnering goodwill with their partner community.
The infrastructure equipment suppliers vary from multi-nationals that provide telecommunication equipment for the tower to small-scale suppliers that source local materials and provide logistics for constructing the tower. The tower industry works closely with each of them to on-board them as trusted partners. The small-and medium-scale suppliers generally do not invest in implementing best practices for their manufacturing processes. Hence, at times they are not able to comply with the quality standards defined by the telecom tower industry. The need of the hour for such small- and medium-scale suppliers, who play a critical role in optimizing the supply chain of the tower industry, is that they should start investing in improving their manufacturing processes to deliver the best in quality while optimizing costs.
Erecting a telecom tower is a one-time activity, and hence partner engagement is for a limited duration. On the other hand, maintaining the tower is an on-going engagement that involves service providers in activities such as ensuring power supply, maintaining the functioning of the tower, and security of the tower site. The technicians provided by these service providers are the main touch-points on the ground for the tower industry. These technicians visit the tower site on regular basis to ensure that the quality of service for the tower customers, i.e., the network operators, is kept uninterrupted. As these technicians are in disparate locations across the country and are managed remotely through the Tower Operations Center (TOC), the back-end practices followed by the service partners is what makes this operation very critical. Over the last few years, the telecom tower industry has put in a lot of practices and systems in place to ensure that the maintenance personnel get training in safety, best practices for maintenance, and trouble-shooting, so that their skills are upgraded to the latest processes and technologies.
Safety is another key aspect that the tower industry has stressed upon its partners to follow as a continuous exercise. Often, it was noticed that the ground staff at sites would ignore the set rules and guidelines for various maintenance tasks, which would lead to accidents that could have been easily avoided. Making the workers more safety-conscious has brought a â€¨much-needed change in the working culture of maintenance personnel. When they are conscious about their safety, the personnel naturally follow the safety rules.
By supporting the partner community with best practices, the telecom tower industry has helped them in business growth and opened new avenues for them as they progress forward with the industry. By empowering the business partners, the tower industry has not only been able to optimize their own supply chain processes, but have also set an example to aim for partner satisfaction among the entire B2B industry. With business partners who are satisfied with their relationship with the tower industry operators, and are dedicated to avail their resources to help bring out innovative concepts and latest technologies, we can certainly expect to see a robust and technologically advanced telecommunications infrastructure in India.