Digitalisation And SOPs: How Is India Solving Its Supply Chain Woes Amid Coronavirus Pandemic?

As the Covid-19 pandemic continues to wreak havoc, the Indian government has extended the nationwide lockdown till May 3, 2020, which is absolutely necessary step to check the spread of the virus. This has inevitably resulted in an interruption of supply chain and access to food items, medicines and personal hygiene products in the country.

In the wake of the supply chain crisis caused by the viral outbreak, both central and state government authorities have swung into action to enable smooth movement of essential commodities, from factories to retail chains and kirana stores, and have enabled last-mile transportation continuity.

The current scenario has led to an unprecedented concerted effort from the government and private sector players, as well as the startup ecosystem.

Industry players, authorities and independent advisory committees have already begun discussing the way forward strategy following the end of the lockdown, with the issuance SOPs and enabling mechanisms to facilitate manufacturing and supply chain continuity.

These include strict implementation of hygiene and sanitation norms across the supply chain (from the manufacturing to distribution), a cap on the maximum number of workers allowed at a manufacturing plant, and more stringent self-distancing rules in factories.

Several states have deployed an e-pass system for essential service providers to enable a continued supply of daily use items like milk, vegetables, groceries, medicines and personal hygiene products. On a national level, various digital initiatives have been put in place to create awareness among citizens and prevent the contagion from spreading.

The government has recently launched Covid-19 tracking app, Aarogya Setu, proactively informs citizens about the best practices and relevant advisories about the containment of Covid-19.

The Post-Crisis Scenario: What The Future Holds?

While the pandemic had initially impacted India’s supply chain system severely, it also paved the way for digitalisation of the supply chain network. India is currently working together with industry bodies and tech-centric startups to incorporate advanced technologies such as data analytics, messaging and real-time GPS tracking to create a nationwide e-supply chain network for essential commodities.

Once implemented, this will enable faster movement of goods, starting from manufacturing plants to warehouses to distributors to finally the retailers and end consumers.

The Covid-19 pandemic brings forth challenges as well as opportunities. Even though we are amidst a global health emergency, new business models are emerging; companies are repurposing their services and reassessing their business strategies.

Collaboration Is The Key

With the traditional distribution system coming to a standstill due to manpower shortage, FMCG giants, as well as, retailers have realized the need to actively engage with third-party supply chain companies which have a robust digital infrastructure. As a result, the likes of tech-enabled logistics firm Delhivery are witnessing a heightened demand as they have ensured business continuity by deploying contact-less delivery options and contact tracing policies for its staff.

One of the main advantages these companies offer is they have in-house employees, unlike traditional distributors who typically rely on daily wage labourers. Moreover, third-party supply chain players have a tech stack in place to take orders digitally, make pin-point deliveries and even forecast customer demand based on AI-based data analysis. The entire process is digitised – starting from collection of orders to the distribution and last-mile delivery.

Ecommerce companies such as BigBasket and Flipkart have also explored new avenues to reinvent their supply chain. They are forging partnerships with food delivery platforms like Swiggy and Zomato and cab aggregators like Uber to leverage available fleet of delivery personnel and drivers, and maintain a continuous supply of essential commodities.

Hyperlocal Deliveries

While the concept is not new, hyper-local delivery of food and daily staples has made a strong comeback buoyed by the ongoing lockdown. FMCGs and ecommerce companies are partnering with local physical stores to meet increased customer demand. The partnership between Flipkart and Spencer’s Retail for home delivery of groceries and other essentials is a good example of this, besides FoodTech Unicorn Zomato which has launched Zomato Market to foray into hyperlocal delivery space.

According to Nielsen, India houses 6.65 million kirana stores which account for 90% of the country’s total trade. This means only 10% is occupied by supermarkets and organized grocery stores. The present crisis yet again exposes India’s need to on neighbourhood shops and small kiranas, which have stepped up their efforts to offer door-step deliveries of essential items.

Parallelly, larger online firms are offering game-changing technology such as PoS solutions to these offline stores to facilitate contactless, safe deliveries – a win-win situation for both parties.

While it is difficult to predict the pandemic’s long-term impact as yet, it will inspire new innovations in the supply chain. We will likely see more supply chain localizations and a complete digital overhaul of the country’s existing supply chain network – the possibilities are endless.

This may even lead to large-scale adoption of digital interfaces across retailers and kirana stores for last-mile deliveries. As history as shown previously, businesses are capable of reinventing themselves, often emerging stronger when faced with seemingly undefeatable challenges.

The scenario is quite similar to that of the 2009 global financial crisis, which also witnessed the birth of many high-value startups like WhatsApp, Pinterest, Slack and Uber, among others.