Spearheading digital transformation at on India’s leading liquor manufacturers to bring in more productivity, transparency and value, veteran IT leader Farhan Khan opens up on his experience, the journey and how technology is changing the face of business.
Digitization is not just improving productivity, but also infusing complete transparency starting right from the vendor where we are acquiring the raw material to the finished goods going out of the factory.”
Farhan Khan, Senior Vice President IT, Radico Khaitan
What are your takeaways from recent digital transformation initiatives at Radico Khaitan?
Digitization has signaled a new era in how business is done. It is touching not just the customers, but also the vendors, the internal partners, and external partners. It is also changing the life of manufacturer. At Radico we manufacture our own brand. As far as digital goes for the manufacturing side, technical skill sets are inadequate. We have to train the workforce on different levels. For example, a simple scanning of bottles is a technical task for manufacturing workforce. They don’t entirely understand what scanning means and what the machine is actually doing. So we have to tell them where to scan, where the button is and where is the case number. I believe digitization is not just improving productivity, but also infusing complete transparency starting right from the vendor where we are acquiring the raw material to the finished goods going out of the factory.
How are you leveraging technologies like AI and Blockchain in your organization?
Our industry is largely driven by foreign companies like Diageo and Pernord. Blockchain is a type of customer ledger or vendor ledger. Because of the aspect that blockchain promises transparency, most of the companies will embrace it. The liquor industry is one of the most unorganized industries. Technologies like AI and Blockchain are going to push it towards being organized and bring a revolution in the industry.
We are running a Blockchain pilot for the export division which will span from the sales to registered reports of luxury products that we are selling in Europe and Americas. Blockchain will help us give transparency to foreign clients. It will give clear insight into aspects such as where the material is from, what kind of transportation route the products take, and compliance with government policies. We have also started a pilot around AI at one of our factories in Rampur. It is Asia’s largest liquor factory, where we produce our premium alcohol brands to be sold in India and abroad.
How critical is technology in today’s business scenario?
Every industry is ready to accept the kind of technology change that is coming in the twenty first century. The reason for this is that business and technology are two sides of the same coin today. Business cannot run without technology and technology has no value if there’s no business. Technology supports business today starting from employee to the customer, vendor, and partners touch all aspects of the transaction. New technologies like Blockchain, AI, Analytics, and Robotics will push us towards Manufacturing 5.0. This will not just improve business, but help us grow on a different level.
What are your future technology expectations and vision for the industry?
As I mentioned, we are a highly unorganized industry. At the manufacturing level, our current skill-set isn’t up to the mark of someone like an FMCG player. The success of any technology adoption is based on the people that are using it. It is about the kind of UI we have and the ease-of-use. Any digitization initiative can be divided into three aspects. Firstly, it is about understanding the kind of technology we are going to use. Next is the process that the initiative will help us embark. Third is the people who are going to use the technology in the processes. Now if you look at these aspects, in all three the digitization itself is not mature enough for technologies like blockchain and AI to fulfill their potential. It is similar to the ERP story which started 20 years back and today has reached a stage of sure shot success for any organization. It is going to be the same growth curve with digitization. Of course there are going to be some failures. The people need to move forward with the technology. The process has to be improved to a level that reaches at par with the management expectations. So in short, you can say it is a three pronged approach with technology, process and people.
What is your advice on successful IT initiatives?
Every IT leader should have a clear understanding of buzz words, which come into play and heavily influence our technology approach. Earlier, Cloud was the buzzword and now it is a reality. We being in IT should understand the difference between the buzz words and when they are an actual reality. A CIO should be able to clearly segregate these two and use that understanding as much as possible because that is where the value of any technology lies.
What are your projects in pipeline moving forward in 2019?
We have an increased focus on Security. It needs to be ever evolving and highly dynamic. Earlier, you had to secure your network and you’d be okay. Today, there are hundreds of devices, mobiles, and laptops and suddenly the approach to security needs to be very different. This is one of the key challenges right now. We are working on some projects and collaborating with a lot of partners to help us revamp security for current and future threat scenarios.
Another area that we are looking at as an organization is mobility. Our mobility initiatives have reached a certain level and have returned some benefit. We are in the process of adding more functionality so that we can get data out of the applications and use it for core purposes such as optimizing ERP etc. We are also planning to optimize our entire supply chain and inventory. We need to be at a level where for example, if working capital is going up, we are able to find out what is the reason and pinpoint accountability. With the success of AI pilot, we are taking our business analytics prowess to the next level. The successful project will send back more data which will need a change in the roadmap and consequently the business analytics strategy as well
