Covid-19 – Demand is up – supply chain is still recovering!
Could the Covid-19 pandemic'southward unprecedented hit be the blackness swan event that pushes the FMCG, food, and pharma industry to rethink and make structural changes in its global supply chain model? Without a uncertainty, the pandemic has already exposed the vulnerabilities of many organizations, especially those with full dependency on Mainland china for raw materials or finished goods.
On 27 November 2020, Reed Manch Exhibitions organized a webinar titled "Irresolute Face of Manufacture – Leveraging the supply concatenation to boost your company's bottom line." The webinar witnessed the participation of supply chain experts from the FMCG, food, and pharma industries. The panel moderated past Vivek Dahiya, managing manager, Logistics and Industrial, Cushman and Wakefield , highlighted the industry'due south pregnant challenges during the pandemic and the approach followed to overcome those challenges.
Pavel Mehta of Nestle gave a quick overview of the overall supply chain industry over the past few months. "In the kickoff phase of the lockdown, there was a swift response by the consumer industry in terms of stocking. Speaking of the pandemic'south bear on," he said. "At that place was a big shift from a certain size or SKUs. On the other paw, the industry was facing a huge challenge in the logistics movement and labor availability."
According to him, even though it was a shock initially, most consumer product industries tin can at present tackle disruptions created past the Covid-xix pandemic. "Earlier, the supply chain was only looked at equally a cost center. Its primary objective was to deliver the quantity while the quality was taken for granted. During the terminal few months, there is an increased focus on the safer supply chain. Safety in basically two broad areas – Condom from Covid, and to ensure that continuity despite disruptions."
Mehta believes that now in that location is a much bigger focus on scenario planning. Companies are looking at investments differently. "In the side by side iii to four years, warehousing has to evolve, and that is what nosotros are doing at Nestle. We accept invested in the warehousing operations in the Southward which is scalable and just right for the current scenario."
Ajith Gopinath of Mondelez International agreed with Mehta and added, "The integration betwixt the supply concatenation and our businesses has increased manifold due to Covid-nineteen. Many of the earlier conversations nosotros were having internally as supply concatenation practitioners were fast-forwarded and brought to the nowadays. Whereas many of these processes were a part of the long term pipeline before, they now seem essential. For instance, the eCommerce need has been shifted from offline to online."
While eCommerce was always growing as a percentage of the business, it has shifted to fast forwards due to the Covid, according to Gopinath, "Logistic automation was already in the pipeline in the coming three to five-twelvemonth plans." He also believes that the SKU rationalization trend is here to stay.
Vickram Srivastava of Ipca Laboratories said that in the beginning phase of Covid-19, everyone was empathizing with the service partners. "Presently when people realized that there are alternative means to bring production to the marketplace that emotion inverse expectations. People wanted to get their product out irrespective of the situation on the footing." Co-ordinate to him, during the pandemic, human capital took precedence in terms of quality and quantity. "Everything that has happened around digitization and automation is fundamentally because of the understanding and the realization about human capital and its importance on the shop floor has gone up manifold."
Commenting on the demand during the pandemic, Mehta added, "The pandemic had a direct touch on on need. At the beginning of the pandemic, at that place was a certain pull of our portfolio's products, such as milk-based products and Maggi, a huge business organisation for us. The segment which remained unaffected due to the major disruptions was the food concern because of the nature and the kind of products nosotros are making."
Nonetheless, he observed in Nestle's previous months' sales that consumers bought much less chocolate during the initial phase of the pandemic." Chocolate has a very unique and dissimilar route to market. Ane of the businesses that accept seen a drib is the 'out of home' business where nosotros supply tailor-made products to businesses, hotels, hostels, and restaurants that took a big dip and continues to be a big challenge."
Co-ordinate to Mehta, Covid has exaggerated the structural issues in many companies. "As far as the demand is concerned," he said, "nosotros are back to the pre-Covid situation. Although on the supply chain forepart, we need a lot of piece of work to recover back to that level."
Srivastava explained that the pharma sector besides faced challenges initially, but somewhen, came out of the situation. "Challenges, as I saw them in the pharma sector, included an impact on procurement (sourcing of goods) and product. Yet, the demand has recovered, but information technology is nowhere nearly the numbers we were projecting earlier pre-Covid."
Source: https://packagingsouthasia.com/supply-chain-function/supply-chain-is-still/
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