Forecasting and Supply Chain Performance: A Study of Telecom Sector in India

Abstract

Telecom sector plays a crucial role in infrastructure development of a country and its economy. Supply chain management is management of linkages of interrelated or inter-woven activities of businesses for providing products and services to end-customers in a supply chain. Both supply chains as a concept and telecom sector in India came into limelight in the last 15-20 years. This paper deals with challenges in demand forecasting of equipment required in networks of telecom sector. Organisations who forecast effectively can gain trust across functions as well as across organisations with suppliers, distributors and customers leading to an effective supply chain which gives competitive advantage. Forecasting challenges impact performance of the supply chain. The Paper involves review of pattern of forecasting in telecom sector with details on the challenges to forecasting such as regulatory scenario, competitive environment for telecom operators and equipment vendors and its impact on supply chain management. Due to the sudden growth of the sector and rising pressure on revenues, network growth, and expansion across multiple technologies, industry approach towards demand forecasting remained on reactive rather than proactive basis. Due to this, industry could not enjoy the fruits of optimization of supply chain management and due to urgencies organizations in sector concentrated on inventory built-up to address customer service prospects leading to non-realization of the best value from its supply chain. Customer facing teams forecast aggressively to meet business targets to facilitate more than sufficient inventories to meet customer requirements, but requirement changes abruptly in last minutes due to sudden changes in environment. As a result teams avoids long and mid-term forecasts which results in sudden order of goods without appreciable forecast time resulting in delayed deliveries and lost opportunities.