How covid-19 is speeding up the modernization of the supply chain
The outbreak of Covid-19 is prompting companies to increase their dependency on both emerging and existing tech solutions, even before Prime Minister Modi called for the country to modernize the chain.
“One clear trend I’ve witnessed is that clients who were already invested in technology are able to manage the current situation much better,” said Ashish Nanda, Supply Chain Leader, EY.
He explained that the pandemic has set physical constraints on companies, and access to digital solutions allow them to have visibility not only within their organization, but across the value chain.
Traditional planning models do not apply due to the pandemic, say experts. Companies could set forecasts for months in advance earlier, but now they have to work on much more real time models. For this, traditional technology tools aren’t always feasible either.
“What is happening now is that companies are investing in low cost add-ons or hold ons, which are helping them monitor the constraints on a real-time basis,” Nanda said, adding that emerging technologies, like artificial intelligence and blockchain will play a crucial role.
“Covid has taught us to look at new ways of patternization, understanding demand and supply and fulfillment,” said Easwaran PS, Partner, Deloitte India. “One of the big applications that’s coming up is artificial intelligence (AI) and cloud-based inventory optimization,” he added.
Food products brand Parle and IBM are working together to create an “Intelligent supply chain”. The company will be making use of IBM’s Watson AI solution to predict demand, reduce time to market and right-size its inventory across the supply chain.
In the fast moving consumer goods (FMCG) sector, firms have rushed to tie-up with delivery platforms like Zomato, Swiggy and Dunzo to ensure their goods keep moving. These are companies who have traditionally depended on traditional mom and pop stores to meet the market’s demand.
Early last month, Britannia Industries partnered with hyperlocal delivery firm, Dunzo. This allows customers to order products like cakes, biscuits etc. directly from Dunzo’s app and the company’s riders can pick up products directly from Britannia’s warehouses. Before the pandemic, users could have used Dunzo to order such products, but they would be ordering from neighbourhood stores.
Similarly, delivery platform Swiggy has collaborated with HUL, P&G, Godrej, Dabur, Marico, Cipla, Vishal Mega Mart and more to deliver essentials to customers. It’s also worth noting that Swiggy and Zomato both sped up their grocery delivery efforts post the pandemic. The two platforms were predominantly used for food delivery before that.
Digital trucking platform Mavyn, said it has gained new clients in companies Reliance Fresh, Baxter, Kuehne+Nagel, Cadbury and Reckitt Benckiser during the pandemic.
But big companies aside, digital transformation extends right to the lowest levels of the supply chain right now. According to Pankaj Ghodde, CEO of Agro10X, he added over one lakh new farmers to its platform in the past month and a half. It had taken the platform six months to add the same number before the pandemic. “We had to actually put a load balance on our server because of the load coming from the platform,” he said.
Agro10X is a virtual platform that uses AI and blockchain in order to connect farmers to buyers, eliminating the middle-man to some extent. The company uses data from various sources, and AI software, to determine market prices and allows farmers to sell their products directly to prospective buyers, be it consumers or traders.
“All in all, I think it’s (the pandemic) is going to accelerate the adoption of digital technologies, but also bring about a fundamental level change in the manner in which companies are managing their end-to-end supply chain,” said EY’s Nanda.