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Navigating global trade and supply chain challenges

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An extreme weather event; a flooded Sri Lankan paddy field.

This article aims to provide a comprehensive understanding of a major challenge to the smooth flow of the supply chain, “The stockouts”, their causes and most importantly, effective strategies to prevent them.

I strongly feel this topic is quite appropriate at a time where most of the companies struggle to eliminate bottlenecks in their supply chains.

In today’s fast-paced business environment, maintaining optimal inventory levels is crucial for success. As businesses strive to meet ever-changing consumer demands, the challenge of preventing stockouts becomes increasingly complex and a robust supply chain planning process with long, medium and short term strategies are key to the success of the supply chain.

Stockouts occur when a business runs out of inventory for a particular product, leaving them unable to fulfill customer requirements.

Let us understand common causes of stockouts. Inaccurate demand forecasting is a major cause as our markets depend on a demand-driven forecast. Poor inventory management is seen in many organizations with inefficient tracking systems or human errors in inventory counts, misleading stock levels, lead time. and sales/ stock miscalculations. Such supply chain disruptions interrupt the flow of goods.

In an increasingly unpredictable world, supply chain (S.C.) disruptions are no longer an exception but the rule. Factors such as natural disasters, geopolitical tensions, extreme weather events, pandemics, labour and raw material shortages, infrastructure challenges, logistical issues, seasonal fluctuations and long lead times due to unexpected conditions and holidays in supplier country have made supply chain professionals a more complex situation. Hence, the supply chain professionals at the customer end should be very knowledgeable in respect of the above conditions when forecasting and final planning as per correct demand.

Stockouts can have far-reaching consequences that extend beyond the immediate loss of sale and revenue. Other such consequences are decreased customer satisfaction, potentially damaging long-term loyalty, reduced brand reputation as frequent stockouts erode trust in your brand and increased operational costs rushing to restock items as a preventive measure.

(Agile supply chains at a higher cost of material and shipping) and market-share loss.

By recognizing these consequences, businesses should focus on implementing robust stockout prevention strategies and investing in effective inventory management solutions.

Let us now discuss as to how we should avoid stockouts and what the key strategies are?

Maintaining accurate inventory records is fundamental to preventing stockouts. Effective inventory management strategies and tools should provide real-time visibility into stock levels. For this, advanced inventory management software systems must be utilized for automated reordering and calculating re-order points.

However, inventory professionals should obtain information (data) with specific, timely, and a very accurate manner. This is why the organizations fail today in computing the correct re-order levels/points.

What to order, when to order, and how much to order depend on the accuracy of such data. If it fails, the entire supply chain will face lots of disruptions.

Further, regular cycle counts, ABC analysis based on consumption values and, VED/SDE/HML stock analysis are vital tools to avoid stockouts and excess stocks.

VED- Vital, Essential, Desired

SDE- Scarce, Difficult to obtain, Easy to obtain as per lead times.

HML -High, Medium, Lowpriced items

I would recommend staff training, utilizing barcode systems, and streamline receiving and issuing processes too to uplift the inventory management system.

Therefore, I wish to reiterate, that accurate Inventory data forms the foundation for effective demand forecasting & inventory optimization strategies.

Determining appropriate stock levels is one of the most challenging tasks faced by inventory managers. To mitigate the risk of stock outs due to uncertainties in supply or demand, Safety stock (or buffer stock) is maintained by stock controllers, which intends to cover any shortfall in cycle stock (moving stock) during the lead time period. It is an important element of the re-order point formula.

Reorder Point (ROP) = (Average consumption × Lead time) + Safety Stock

However, the stock should be balanced between overstock and stock-out situations. There are many methods of calculating the safety stock, such as fixed safety stock, time-based safety stock, and average/max calculations.

(Max. sales × Max. lead time) – (Average sales × Average lead time) = Projected Safety Stock

There are statistical calculations as well.

The performance of the supply chain should be monitored and reviewed. Supply chain manager should “keep an eye’ on the progress on an ongoing basis and gather formal and informal control information. KPI, balance score card, bench-marking( best in class strategy) ,TQM (continuous improvement) are some of the tools to assess the performance of the organization.

Digital transformation revolutionizing inventory management practices within supply chain is offering unprecedented opportunities and challenges for business worldwide. The digital technologies significantly enhance inventory visibility, improved accuracy, advanced demand forecasting and streamlined supply chain collaboration. Despite these benefits, challenges such as system integration complexities, high implementation costs data quality management, cyber security risks and regulatory compliance issues are prevalent.

In today’s world of pandemics, geopolitical shocks and extreme weather events,

efficiency alone is a fragile strategy, The goal is no longer, just resilience, it is ANTIFRAGILITY which means getting stronger from shocks rather than just surviving them.

(The writer is an experienced lecturer and consultant on Supply Chain Management)

E mail- suveentrading@yahoo.com

By Denver Brian Coorey



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Central Bank of Sri Lanka launches Sustainable Finance Roadmap 2.0

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The Central Bank of Sri Lanka (CBSL) launched the Sustainable Finance Roadmap 2.0 on 05 May 2025 at the Atrium of CBSL, marking a key milestone in its continued efforts to foster a climate-resilient and socially inclusive financial system.

Recognising the growing implications of climate-related risks on price stability and financial system stability, CBSL introduced the first Sustainable Finance Roadmap in 2019, which provided foundational guidance to financial institutions on managing environmental, social, and governance (ESG) risks while encouraging financing for green and inclusive economic activities.

In light of evolving global developments, increasing access to climate-focused financing, and broader recognition of the social dimension of sustainability, CBSL developed the Sustainable Finance Roadmap 2.0 for the period 2025–2029, with technical and financial support from the International Finance Corporation (IFC) in partnership with the European Union, under the Accelerating Climate-Smart and Inclusive Infrastructure in South Asia (EU-ACSIIS) programme.

The Roadmap 2.0 was crafted in close collaboration with key stakeholders, including Securities and Exchange Commission of Sri Lanka (SEC), the Insurance Regulatory Commission of Sri Lanka (IRCSL), the Colombo Stock Exchange (CSE), the Sri Lanka Banks’ Association (SLBA), The Finance Houses Association of Sri Lanka (FHA), financial institutions and government bodies.

Focusing on Sri Lanka’s financial sector, the Roadmap 2.0 outlines a comprehensive set of prioritised actions for banking, non-banking, capital market, and insurance sectors. These actions are geared toward financing sustainable development, strengthening the management of environmental and social risks, enhancing reporting and disclosures, and improving governance and coordination across institutions.

The launch event was attended by distinguished guests including Gevorg Sargsyan, Country Manager for World Bank and IFC in Sri Lanka; officials of IFC and EU; Ministerial secretaries and senior officials of government institutions; national and international experts on sustainability; representatives of financial institutions and partner agencies.

Communications Department 05.05.2025 2 Delivering the keynote address, Dr. P. Nandalal Weerasinghe, Governor of the Central Bank of Sri Lanka, emphasised that the launch of Sustainable Finance Roadmap 2.0 marks a vital step in strengthening the resilience and inclusiveness of Sri Lanka’s financial sector amid growing climate and social challenges. He highlighted the need for urgent, coordinated action to integrate climate risk into financial decision-making and called for strong stakeholder collaboration to ensure effective implementation of the Roadmap 2.0.

Speaking at the event, Gevorg Sargsyan, Country Manager for World Bank and IFC in Sri Lanka, noted that as Sri Lanka strives for resilient and inclusive growth, sustainable finance will be crucial in creating jobs and driving economic expansion, while also positioning the country to be investment ready. He further highlighted that building a truly sustainable financial ecosystem in Sri Lanka is a collective endeavor – one that IFC has been a part of from inception, and remains committed in working together with the Central Bank of Sri Lanka and industry stakeholders to bring the shared vision of the Sustainable Finance Roadmap 2.0 to fruition.

The keynote was followed by a session providing an overview of the Sustainable Finance Roadmap 2.0, led by Ms. W. A. Dilrukshini, Assistant Governor of CBSL, and Ms. Wei Yuan, ESG Officer of IFC. A panel discussion on “Rolling Out the Sustainable Finance Roadmap 2.0” featured Dr. Thusitha Sugathapala, National Technical Expert on Sustainability; Ms. S. Ketawala, Additional Director of the Bank Supervision Department of CBSL; Thimal Perera, Chief Executive Officer of DFCC Bank; and Ms. Nilupa Perera, Chief Regulatory Officer -Designate of CSE.

The Sustainable Finance Roadmap 2.0 can be accessed using the following link:

https://www.cbsl.gov.lk/sites/default/files/cbslweb_documents/sustainable_finance_roadmap_2.0.pdf

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Browns Investments expands plantation sector with another Lkr 4.8 billion acquisition

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Browns Investments PLC (BIL), the investment arm of the LOLC Group, has announced a significant expansion of its plantation portfolio with the acquisition of FLMC Plantations (Pvt) Ltd (FLMC). The acquisition was completed on May 5, 2025, through a Share Sale and Purchase Agreement with Damro Manufacturing (Pvt) Ltd and Piyestra Furniture (Pvt) Ltd, for a total consideration of LKR 4.8 billion.

FLMC Plantations serves as the holding company and managing agent for Pussellawa Plantations Ltd (PPL) and Melfort Green Teas (Pvt) Ltd. PPL operates over 11,500 hectares of land across 24 estates, managing 5,400 hectares of tea, 5,900 hectares of rubber, and 200 hectares of minor crops. The estates collectively produce 4.3 million kilograms of made tea and 2.3 million kilograms of rubber annually. Strategically located in Sri Lanka’s renowned tea-growing regions, including Pussellawa, Udupussellawa, Nuwara Eliya, Kandy, Ruhuna, and Sabaragamuwa, these estates will further enhance BIL’s presence in the country’s agricultural landscape.

Commenting on the acquisition, the Group Managing Director/ CEO of LOLC Holdings PLC, Kapila Jayawardena stated, “Over the past two decades, LOLC Group has been guided by a bold vision of expansion and diversification, positioning ourselves as a global powerhouse across multiple sectors. Our acquisition of FLMC Plantations through Browns Investments PLC is another key milestone in strengthening our leadership in agriculture and plantations. With the addition of Pussellawa Plantations and Melfort Green Teas, we are not only expanding our footprint in Sri Lanka’s premier tea-growing regions but also enhancing our ability to supply premium-quality tea to global markets.’’

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VFS Global acquires majority stake in CiX Citizen Experience to create a centre of excellence

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(From left) Sergio Rodrigues, Chief Executive Officer, CiX Citizen Services and Zubin Karkaria, Founder & Chief Executive Officer, VFS Global in Sao Paulo, Brazil.

Supercharged Growth: VFS Global’s partnership will accelerate CiX’s expansion across Brazil, Latin America, and beyond.

Global Powerhouse: With VFS Global’s capital, technology, talent and scale, CiX Citizen Experience will bring new products and technology to the global marketplace.

Quality of Life Commitment: Both companies are dedicated to innovative solutions, including the use of AI, that improve citizens’ quality of life

Local Impact with Wider Reach: Collaboration to modernise services for citizens of Brazil by creating a centre of excellence that stands as a global example.

VFS Global, the global leader in trusted technology services, empowering secure global mobility for governments and citizens, has completed the acquisition of a majority stake in CiX Citizen Experience, a leading provider of digital and physical citizen services based in Brazil. This strategic acquisition marks a pivotal step in VFS Global’s expansion journey—particularly across Latin America (LATAM)—as it continues to broaden its capabilities and deepen its impact in the public service delivery space.

With nearly two decades of pioneering innovation in citizen services, CiX has established a strong presence in Brazil. This success will be further scaled across LATAM and other global markets, leveraging VFS Global’s international reach and operational excellence.

This acquisition is centred on driving transformation through advanced digital technologies, including AI and data-driven platforms. By uniting CiX’s cutting-edge digital capabilities with VFS Global’s extensive global infrastructure and expertise in managing complex service ecosystems, we are positioned to deliver next-generation, integrated solutions to public and private sector clients around the world.

For both companies’ client governments and partners, this will lead to enhanced, tailored solutions that improve citizen engagement, access, and satisfaction.

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