Tag: covid

According to the Logistics Performance Index issued by the World Bank, India ranked 44th in global logistics performance. Its logistics costs amount to a high 14 percent of GDP, 6 percent representing transportation (Arthur D. Little Analysis 2020). Despite being large and well-connected, India’s Supply Chain and Logistics sector is ripe with challenges. However, this can be transformed should we implement balanced logistics more and tackle the systemic issues around infrastructure and storage.

Setting Up Infrastructure
Road transportation, weighing around 64 percent of the country’s logistics infrastructure, has a necessitous transportation infrastructure. Not only is our rail and sea network infrastructure under-utilized and is wanting in terms of digital tech. Moreover, the cost of road transportation also stands higher than the latter. Better Inventory planning and demand forecasting could reduce the high indirect costs, amounting to USD 120 to 180 billion. India also has to set up more cold storage capacity that is 226.7 lakh tons, instead of the required 350 lt. As per the Indian Council of Food and Agriculture, this leads to a wastage of 30 percent of the total agricultural produce. India’s retail market comprises scattered micro-scale sellers, with a vast 90 percent of the total being kirana shops.

“Indian government’s reduction of global allocation of vaccine due domestic needs has created a gap between supply and demand, This has created imbalance in supply chain for third world countries dependent on India manufactured vaccines, further due infrastructure challenges mainly in cold chain supply chain and shortage of cold transportation equipment & trucks has added strain in entire vaccine supply chain,” says Karthi Baskar, Deputy Managing Director, Kintetsu World Express.

Covid-19 & Supply Chain
According to WHO, the ban, against the backdrop of the lethal second wave of Coronavirus, had affected around 91 countries as of June 1st. Adding to this predicament, with around 353 innovator drug contract manufacturing sites, Maharashtra saw a total 6 million Covid cases by June 15th. Apart from that, the inadequate capacity and an incompetent infrastructure of the cold chain supply adds to this disruption and is in need of urgent enhancement and augmentation with respect to the particular temperature requirements, and inventories for special equipments at airports. The lopsided distribution of cold supply prioritizing urban cities over other areas also needs to be recalibrated. Moreover, orders mandating the truck drivers to carry negative RT-PCR reports issued within the preceding 48 hours further added to the already struggling freight networks. However, despite these shortcomings, the Indian Pharmaceutical and healthcare supply chain has surprisingly shown significant potential in the post-covid scenario.

The Indian pharmaceutical sector, although previously underutilized, has now been pushed by the successive covid waves to become the sole means of allocating medicines, blood and plasma transfusions, oxygen concentrators, surgical kits, and vaccines. As per the health-tech report by IAMAI-Praxis, e-pharmacies and teleconsultation platforms witnessed an escalation of up to 200% and 300% in the frequency of orders in 2020. Despite critical infrastructural issues in the Indian healthcare chain, the covidian impact has catalyzed our health tech with disruption and technological intervention. We already benefit from an operative R&D and clinical trials framework. That, along with the recent ingenious solutions in R&D, owing to the rapid adaptation of AI, ML, deep science, and data analytics, make palpable India’s potential success in medical R&D based on tech.

With the preexisting Covid-19 outbreak along with the imposed nationwide lockdown, India also witnessed an increased exigency and frequency of orders. With respect to goods mobility, the logistics industry also encountered impediments concerning manpower, process visibility, accessibility to outlying areas as well as contactless delivery. Not only has the e-grocery industry tackled these obstacles, but it also further expanded the digitalization to small and medium business owners across categories such as consumer goods, grocery, fashion, electronics, books, and professional services. This led to both the augmentation of shopfloor digitalization in terms of its geographic operations as well as the widening of the merchants’ digital footprint.

“With the establishment of an effective infrastructure built upon cross-state standardized IT systems, interoperability and the adoption of global data standards, the Indian Supply Chain awaits an optimistic future,” says Sameer Khatri, Regional Director – Indian Subcontinent & MD India, DSV Air & Sea Pvt. Ltd.

“Post-covid, supply chains will be more localized, agile and flexible. At DICV, all these aspects have been amplified and accelerated, leading to enhanced transparency across the value chain and real time risk tracking,” says Managing Director & CEO, Daimler India Commercial Vehicles Pvt Ltd (DICV).

Cold Chains
The JLL report predicts the national cold chain sector to multiply at over 20% CAGR by 2025, owing to the reorganization of conventional cold storage into a modern storage facility. This can moreover give way to a proliferation of the same in both Tier-I cities like Mumbai, Bengaluru, Chennai, Pune, Kolkata, Delhi-NCR, and Hyderabad, along with Tier-II cities like Lucknow, Kanpur, Ranchi, and Patna. Both conventional and upcoming service providers now implement warehouse automation, digitally monitoring temperature-sensitive cargo, along with the incorporation of AI, ML, and IoT for medicine and vaccine transportation. With the expansion of cold supply chains and a gradual increase in organized logistics, the Indian startup ecosystem has also contributed tremendously by devising innovative services like digital solutions for tracking, payment, and dispatch. The government granted infrastructure status to the supply chain sector, leading to all this growth; this clears the sector for availing 100 percent foreign direct investment, enabling them to borrow vast amounts under the ECB.

Skill Development
A recurring obstacle in the refurbishment of the manufacturing and logistics sector appears to be the insufficiency of skilled workers. To this end, the Centre for Product Design and Manufacturing (CPDM) at the Indian Institute of Science, along with TalentSprint, has furthermore introduced a PG-level advanced certification program in digital manufacturing and smart factories. The program will aid management and small factory strategy professionals, along with IoT, FMCG, automotive aerospace pharma, and energy industry aspirants.

“On top of omni-channels providing seamless and cost-effective solutions, digitalization has added an extra edge to SCM,” says Vaibhav Vohra, Managing Director, Continental Carriers.

Owing to a multichannel approach to sales, it has been predicted that the Indian omni-channel and warehouse management systems’ market size will strengthen to USD 488 million by 2024 from USD 231 million in 2019 at a CAGR of 16.2%. Furthermore the CII Supply Chain Leadership Conclave (CPG & Pharma) held last year, examined the defects and limitations of the Indian Supply Chain Sector and devised a roadmap to “a resilient 21st century supply chain.” According to their Vision 2030, “India will be one of the top 20 countries in the World Bank Logistics Performance Index by 2030.” They aim to achieve these ends via optimization, digitalization, simplification of distribution systems, and adopting a sustainable, agile, and resilient supply chain. AI, ML, Blockchain, and IoT, Analytics, Robotics, AR, VR, Cyber Security, 3D Printing, and Additive Manufacturing are the means of revolutionizing the logistics industry. They would add to data management, traceability, security, end-to-end visibility, and analytical-based risk management. What seems to be next is the step towards Omni-channels to integrate virtual sales and in-store general sales.

“Government intervention is integral for promoting a fair competitive logistics market, balancing risk sharing between public and private sector, and avoiding creation of monopolie,” says Raaja Kanwar, Chairman and Managing Director, Apollo International.

As per Arthur D Little’s report, instituting regulatory and enabling policies is vital on the part of both the national as well as regional governments. Policies can be implemented pertaining to standardization of turnaround time, truck size, swifter license and permissions approvals as well as GST consolidation. Subsequently, SCM-friendly policies will also help expand logistics and broadband connectivity to relatively rural areas, thus working towards reimagining the Indian Supply Chain as a globally competitive one via “Atma Nirbhar Bharat” and “Make in India.”

“Since Logistics has a great environmental impact, it is crucial to work towards a Green Supply Chain by reducing emissions and eradicating waste,” says Sam Katgara, Partner, Jeena & Co.

With the integration of technology into the logistics sector, our next step to productivity should be optimizing transportation routes and adapting more renewable and durable models of transportation. Minimizing supply chain wastage and embracing recyclable means will further ensure compliance, profitability, and customer satisfaction.

“To ease digitalisation for small and medium sized retailers, access to dedicated, customised and affordable end-to-end integrated omni channel services is a game changer. At FM Logistic India, we have a complete portfolio of integrated services to facilitate this adaptation,” says Alexandre Amine Soufiani, MD & CEO, FM Logistic India.