Supply chain in India has immense growth opportunities, but the industry experts believe that the opportunities we see are just the tip of an iceberg.
For a better understanding on supply chain during and post COVID-19, we came up with the series “David and Goliath”. The current scenarios in supply chain cannot be analysed better than Dr Debjit Roy, who is a Professor of Operations Management at IIM Ahmedabad. Dr. Roy holds a PhD from University of Wisconsin, Madison and an MSc from IISc, Bengaluru. Dr Roy has published 100 plus research papers. He is currently the Chairperson of Research and Publications office at IIM Ahmedabad and he has been a visiting faculty at top management institutes in USA and Europe. The young professor was kind enough to spare sometime for us and share his thoughts on “supply chain during and post COVID-19”.
- What is the major challenge in supply chain today?
Ans: Transportation is most affected; the reasons are the poor availability of the transport vehicles and the restrictions on the movement of the transport vehicles. Due to COVID-19, the truck drivers and labourers have left for their home towns, increasing the cost of manpower. The other factors affecting the cost of operations are diesel prices and healthcare facilities for the employees.
Today both the large corporates and small medium enterprises are forced to plan and execute full load transportation and improve truck utilization. The companies delay the dispatch until the demand is high enough, requiring full load truck dispatch. Part load dispatch would require collaboration to improve truck utilization.
- What will you suggest for sourcing?
Ans: Due to the restrictions on the movement of transport vehicles, the significance of local sourcing is now well understood. The companies with efficient local suppliers will have more sunny days.
The government has also taken note of the significance of sourcing, resulting in time bound relaxation on logistics and supply chain as per the norms.
- What is the way forward?
Ans: Companies now very well understand the importance of supply chain, earlier supply chain was considered a cost centre but now it is valued as the competitive strength. The efficient is the supply chain the larger is the reach. Companies are now looking at local solutions for long term business relationships.
If we talk about customers, they value safety, hygiene and quality in the products reaching their homes. In coming times companies that can promise safe and secure supply chain will be preferred. Live examples are food delivery apps with improvised delivery procedures.
India is a big economy and transportation is crucial, but the quality assurance is weak. The transporters only focus on margins, leading to extreme price wars and compromised delivery standards. There is no such mechanism that can validate the service deliveries of a transport company. Hence the need to ensure better service deliveries in the transport sector at maybe higher price is the need of the hour.