Indian enterprises risk undermining supply chain transformation by focusing on software pricing

As PLI-led manufacturing growth accelerates, companies must invest in supply chain maturity, planning capabilities and business outcomes rather than treating technology decisions as procurement exercises, says Kinaxis CEO Razat Gaurav.

As India's manufacturing ambitions are growing rapidly, supported by government initiatives such as the Production Linked Incentive (PLI) scheme and increasing investments across sectors including pharmaceuticals, automotive and consumer manufacturing.

However, according to Razat Gaurav, chief executive officer of Kinaxis, organisations risk limiting the impact of those investments if they continue to prioritise software pricing over business outcomes.

Speaking to CRN India, Gaurav said the biggest challenge facing many Indian enterprises is not access to technology, but varying levels of organisational maturity, leadership readiness and supply chain capabilities required to unlock value from transformation initiatives.

The issue becomes important as manufacturers expand global operations and face growing supply chain complexity, volatility and operational risks.

Gaurav said Kinaxis views the government's efforts to strengthen India's manufacturing base as a positive development.

The company works across multiple manufacturing sectors globally and sees significant opportunities as Indian enterprises scale operations and become more integrated into global supply chains.

However, he cautioned that manufacturing expansion alone is not enough.

According to Gaurav, companies must also develop the planning, orchestration and operational capabilities needed to manage increasingly complex supply chain environments.

Global supply chains remain deeply interconnected, creating dependencies that can expose businesses to significant risks during disruptions.

He pointed to examples from the pharmaceutical industry, where India is a global leader in generic drug production and vaccine manufacturing but still relies on imports for many active pharmaceutical ingredients.

Similarly, automotive manufacturers continue to depend on global component ecosystems despite growing domestic production.

These dependencies create additional complexity and volatility that organisations must learn to manage effectively.

“The government's PLI incentives and efforts to strengthen manufacturing are very positive developments,” Gaurav said.

“However, success requires more than investment in manufacturing operations. Companies also need to build the supply chain capabilities that support those operations.”

Scenario planning is becoming a business necessity

As supply chains become global and interconnected, Gaurav believes planning capabilities are becoming important for enterprise competitiveness.

According to him, organisations need greater visibility into how supply networks operate and how disruptions could affect production, inventory and customer demand.

That requires continuous demand planning, supply planning, inventory planning and production planning rather than periodic operational reviews.

Gaurav said scenario planning has become particularly important as companies face increasing uncertainty across markets.

“When there is volatility in demand and supply, scenario planning becomes particularly important,” he said.

The ability to model different business scenarios and understand their impact on supply chain performance is becoming a strategic capability rather than an operational function, especially for manufacturers seeking to compete globally.

He added that many Indian companies are progressing on this journey as they scale beyond domestic markets and develop increasingly sophisticated supply chain networks.

The bigger challenge is mindset, not technology

While technology investments continue to increase, Gaurav believes one of the biggest obstacles remains how organisations evaluate those investments.

“In the Indian context, organisations are at very different levels of maturity,” he said.

That maturity, according to Gaurav, extends beyond technology infrastructure and includes management processes, data readiness and leadership capabilities.

He argued that many organisations continue to approach transformation initiatives primarily through a procurement lens, focusing heavily on pricing rather than business value.

“The objective should not be securing the lowest price. The objective should be achieving the best business outcomes,” he said.

According to Gaurav, the real questions enterprises should be asking involve revenue growth, customer service levels, inventory optimisation and working capital improvements rather than contract negotiations.

“How do you better match demand with supply? How do you drive revenue growth? How do you reduce inventory levels and working capital requirements?” he said.

“Those are far more important outcomes than negotiating the lowest possible deal with a software vendor.”

CIOs need to shift from cost conversations to outcome conversations

Gaurav was particularly candid about what he sees as a common enterprise technology buying behaviour in India.

He argued that many organisations continue to measure success based on how much they negotiated off a software contract rather than the business value delivered after implementation.

“You can secure the lowest possible price and still deliver poor outcomes. That's not a win,” he said.

According to Gaurav, enterprise leaders need to recognise the scale of value trapped within supply chains compared with the cost of technology investments.

“Our pricing is a rounding error compared with the value tied up in inventory across supply chains,” he said.

He believes CIOs and business leaders need to work together more closely when evaluating transformation initiatives and focus on the outcomes they are trying to achieve rather than purely on procurement metrics.

The goal, he argued, should be long-term operational improvement and business performance rather than short-term cost savings.

Global manufacturers offer a blueprint

Gaurav pointed to several Indian manufacturers that have successfully combined manufacturing scale with global supply chain capabilities.

Companies in pharmaceuticals and automotive have demonstrated that long-term competitiveness depends not only on production capacity but also on the ability to manage complex global networks efficiently.

These organisations, he said, tend to focus on process maturity, operational excellence and business outcomes rather than treating technology investments as isolated purchasing decisions.

As Indian manufacturers continue to expand globally, Gaurav believes the next phase of growth will depend on how effectively organisations develop the supply chain capabilities surrounding their manufacturing operations.

For enterprises pursuing large-scale transformation initiatives, the challenge is no longer simply adopting new technology. It is ensuring that leadership teams, processes, data foundations and decision-making frameworks evolve alongside those investments.

Without that shift, companies may continue investing in transformation while falling short of the business outcomes they are ultimately trying to achieve.