The pandemic has disrupted supply chains around the world. It presents vast logistics challenges everywhere. In India the issue is more pocketed and the ongoing phased lockdowns and its varying restrictions all across the country has been a problem for the logistics and transportation industry.
Direct to 2 consumer deliveries have become the new normal – large brands have also pivoted from a store only approach to a more omnichannel presence. “COVID-19 has caused a big disruption across the supply chain in terms of manpower, logistics & production of goods. Organization who has been able to solve it on war footing are the ones to have survived. In retail inventory management became a big problem as plants starting shutting down and there was scarcity at some places and surpluses on the other. Additionally, manpower disruption was the biggest, owing to fear, migration and uncertainty created in pandemic. Having said that supply chains were forced to optimize and ensure minimal waste across the value chain. This has resulted into better efficiency across the board. Organisation and consolidation of entire supply chain manpower, logistics, warehousing is the biggest change since pandemic. Small players were not able to survive the disruption owing to working capital needs and has led to organized players capture a higher market share across the board. Additionally, on the demand front, people have started considering safety as a factor and are preferring brands with good hygiene standards. This has also led for a more structured and compliant way of working across supply chain,” Sankar Bora – Founder & Chief Operating Officer – DealShare.in mentions.
Safety first
Ishu Bansal, Co-Founder, TruckSuvidha mentions that the on-ground people handling warehouse or responsible for unloading or loading are the ones who with limited information has been the main point of concern for the supply chain. TruckSuvidha is an online marketplace for transporters, truck owners, brokers, industrialist and other related entities. All through the lockdown, from educating the truck drivers to informing and making the entire supply chain aware of the shortcomings or lockdown related information, Ishu and his team has been prompt.
“To handle then crisis from our side, our first move was safety for the drivers. From proper sanitization to making sure that their rides are smooth all across India, we have been very conscious of the on-ground problems at the junctions were our trucks were going. From panchayats to local government, we had to tackle the restrictions very carefully without delaying the process of deliveries. Today, taking in the learnings from the lockdown and the pandemic related losses, we are more equipped to handle the crisis and even though the learning curve or quick adaptation of technology among the drivers are slow, but we are working alongside the entire ecosystem to make them more prepared to handle situations independently,” Ishu further added.
Optimising approaches
“Majorly FMCG supply chains have started working on optimisations across the board, inventory, warehousing, manpower and logistics. Working capital cycles have also been tweaked a lot and the credit system which was going on in market has been disrupted owing to business uncertainties. Capacity management has been biggest learning during the pandemic in terms of warehousing space, manpower, logistics, and management team. Also building an agile supply chain which can rapidly change as per need of market/consumer is also important Along with that focus on building technology has also become necessary during the pandemic,” Sankar adds.
Technology as is said is simplifying problems by bringing in controls, accuracy and real time visibility of business. Inventory management, bread and butter of a retail business has to be the first thing that should be technically driven and any retailer/brand should think of. The landscape is rapidly changing and in no time we’ll see drones and robots part of the supply chain at huge scale. “From the demand front warehousing requirements have already gone manifolds. Owing to implementation of GST, increasing consumer needs for faster deliveries supply chains are already trying to be closer to consumers via micro-warehouses. Additionally, there is technology and automation like robots taking over warehousing making it more efficient and cost effective. Supply chains in future will be more technology driven and work in a globally integrated environment. E-Commerce is already aiding that and it’s bound to go up. Additionally, the unorganized sector will be disrupted by tech enablement as well as takeovers from bigger organized and capital efficient players,” Sankar points out.
“Through our pharma and healthcare muscle, world has taken a note of our ability to compete China in developing supply chain as per global standards, ability to scale and ramp up solutions quickly and become a global leader. These benefits are extending to retail with several global brands considering India as an alternative for manufacturing as well as consumption. Additionally, the PLI schemes by government and focus on developing ports are also aiding our entrepreneurs to be part of global ecosystem. India being a huge consumption market, give us an edge to be a strong regional hub for Asia too,” he sums up.
Focus shift
According to McKinsey reports, in the traditional supply chain model, companies often choose a purely quantitative approach to model the perfect fulfillment network needed for the service offering. This generally involves a rather rigid and time-consuming approach: three months of data collection, six months of modeling, and three months of decision making before implementation. This traditional approach leads to a onetime strategy and long implementation times. However, in an ever-volatile environment with constantly changing customer needs, evolving partnerships, and newly developing competition, reacting quickly is critical to ensure that the supply chain network is responsive, flexible, and efficient.
“A nimble supply chain, which lets the industry supply and fulfil customer orders with ease has become the need of the hour and companies who actually had an inventory focused supply chain, were more prepared to face the pandemic. On the other hand, the ones lagging behind has lost a major market share owing to their traditional approaches. It is all about making the inventory ready for the customer and keeping them agile,” Satish Chandra, Head of Operations, Captain Fresh mentions. Captain Fresh is a B2B platform leveraging technology to deliver the fastest harvest-to-retail in the industry. Catering to the need gap prevailing in the market, pertaining to the scarcity of fresh fish, this company with its stringent supply chain approach looks to solve the problem in retail.
Echoing Satish’s thoughts, Dr Anil Chinnabhandar, Senior VP – Supply Chain, Max highlights, and “Supply chain as a function has now taken the centre stage of every retail conversation. Gone are the days when supply chain was treated as a backend operation, which was always brought into conversation only at the end of every discussion. Today, the senior management in every company all across retail, understands the value of supply chain and how it can make or break the way the company fulfills customer requirement. From inventory to warehousing and fulfilment, everything has become the heart of every retailer’s agenda today”.
To optimise inventory replenishment across the supply chain, at various touch points for retail, supply chain strategies are getting relooked at. The idea is to tighten the inventory and reduce stock wastage. That is why, the top trends in supply chain at the moment is inventory management and fulfilment. “Demand for grade A warehouses have increased owing to the pandemic. Even though most brands using warehouses have penetrated deeper into the Tier-II cities even to increase their warehouse network, but the concept of a hi-tech top-notch warehouse is still a scarcity. Alongside this the adaption of AI/ML and big data is increasing. This apart, captive distribution is going to be the game changer from here on. Supply chain will decide the future of companies who are here to build a robust network. Moreover, efficient supply chains, irrespective of industries can actually result into freeing up of capital and further help companies tighten their grip over other functions,” Satish informs.
Future aligned
“Supply chain pivoted a big change in apparel retail since the pandemic. This is because of the diversification of touch points. Today customers can order from anywhere and they do like to access their products from a touchpoint closer to them, which is safe. Keeping these parameters in mind the supply chain was reoriented to make inventory accessible all across touchpoints, be it a normal e-commerce delivery or WhatsApp orders, or orders placed at a store that needs to be delivered to the customer’s home. A lot of integration and re-orientation had to be brought in. Moreover, the time taken to deliver orders and fulfill them even in Tier-II or III cities had to be brought down, to suit the need of the hour. These alterations have now made supply chain the hero of retail business,” Dr Anil adds.
As per reports 41 per cent of consumers using two or more channels during the buying process, achieving flawless fulfillment has become more of a challenge than ever. According to Zebra’s 2018 Shopper Vision Study, 53 per cent of in-store and 51 per cent of online shoppers are not satisfied with the returns/exchange process. So, tightening the process through a streamlined supply chain is very important now.
He further mentions, “Converting the local brick and mortar stores into a warehouse to reduce the time of delivery for tier-II or III orders looks like a forward looking model and that has helped us take care of orders and fulfill them in the shortest time even to the most interior cities of India. Central warehouse will now shift to local stores. This is going to be the norm and partnering with 3PL partners to complete fulfilments faster and directly from the local stores will also help with cost optimisation. After all, saving on cost is prudent, given the pandemic and its related rise in expenses”.
Further mentioning India’s advantage on the global map in terms of supply chain, Dr Anil mentions that the country is in a sweet spot and the domain will progress by maintaining a balance between automation, skilled manpower, and steady technology support. These parameters will be balanced out with customer demands and omnichannel growth across the industry, pushing India ahead on the supply chain matrix.
The idea of a robust supply chain that ensures splitting orders for optimized fulfillment, managing multiple suppliers or fulfillment locations, managing Dropshipping and much more is now on the cards for almost all retailers. This will slowly turn the wheel of the industry and help the brands and retailers to get closer to their customers.
