Yuva - India

Supply Chain – From Disruption to Opportunity

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“One of the only ways to get out of a tight box is to invent your way out.”  – Jeff Bezos

 

The demand and supply graph of almost all the countries of the globe has seen a tremendous shift in its behaviour after the virus occupied the space. Covid 19 came like a pausal revolution into our lives and proved that there must be some way out of the lazy processes that we have adopted since ages. Digitization, Digitalization, Sustainability, Security, Visibility are few of those visions that we have to command on in the very near future.

As we are aware that China has been deeply hit by the US-China trade war, and then the pandemic, Covid 19 acted like the salt in the burn. Also, since many countries of the world are directly dependent on China for essential commodities like the raw materials of pharmaceuticals and others. Big fluctuations in the demand-supply and thus the supply chain of China has become a problem not only for them, but also has hit the larger portions of the globe. Also, the bad reputation of China has inclined the countries to shift their procurement from China to some other countries.

But as one rightly says, in the difficulties lies the real opportunities. These disruptions have opened the doors for India to take the global position in the near future. India needs to look on how to increase the efficiency, visibility, and the responsiveness of its supply chain. good news for India that came a very few months back is that Japan has mooted the Supply Chain Resilience Initiative (SCRI) as a Trilateral approach to Trade, with India and Australia as the other two partners. Japan proposed this initiative to mitigate its supply risk and reduce its dependency on China. Japan imported goods worth $169 Billion from China, which accounts for 24% of its total imports in the FY19. But due to the pandemic, this import came down by 47.1%. This huge decrease in imports and the SCRI initiative becomes a great opportunity for India to bridge the gap between the supply and demand of Japan. Also, India does not hold much trade with Australia till today but can witness a positive relation with it in near future. Also, being the part of another Informal grouping, i.e., Quadrilateral Security Dialogue or the Quad which include the US as the fourth member, and other three being the same (India, Japan, and Australia) would be a boon for India to rise and expand its virtue in the ASEAN nations.

 

But then again raises the basic question, from where to start? The answer is Digital Transformation. Maintaining the records digitally (Digitization), supporting an application that could support the entries of both the point of production and the point of purchase needs to be developed. To cater to these needs, sourcing rightly, processing quickly, and packaging correctly has gained paramount importance. There is a high need for building a holistic digitised retail ecosystem, and this strategy has already been adopted by many giants.

 

When talking about agriculture and the allied sectors that managed to see a growth of 3.4% even when all other sectors got hampered, there is a ray of hope and great opportunity that lies in this field. Looking at the health conscious India, small and marginal farmers could easily be benefitted by growing vegetables. Vegetables could be easily used in the evening snacks of veggie tacos and others. A great example is Subway in that matter which uses healthy dietary products for its snacks, and we can witness its appreciable growth in a very short period of time within India as well as the world. Hence, the procurement strategy needs to be changed. The other benefits for sowing vegetable crops is it has high economic value, the prices of seeds are low, can be harvested thrice to four times within an year, and hence can be easily adopted by the Indian farmers whose average land holding is only 1-2 hectares.

Now, let us consider the recent trend of sustainability widely accepted by the European countries that stands at 87% acceptance, then comes the global giants that have accepted it to 47%, and at last stands the Asian countries that follow sustainability to just a mere 28%. European nations have introduced Carbon Border Adjustment Mechanism so as to decrease their part of depletion caused to the earth. Another big step involves penalising the corporates that are involved in GreenHouse Gas emission in any way. Europe is constantly trying to fulfil its promise made to Paris Climate Communities to decrease its emission to 45% by 2030 which earlier stood at 55%. And do we realise what could be the consequences if we do not shift ourselves (India and other Asian nations) towards sustainability? Asia exports 15% of its total to the European countries, which stands at $146 Billion. Now, if we do not follow their norms, they could anytime ban our products entering into their states, thereby decreasing our net exports considerably. The big players, although look at sustainability and economy side by side, like Coca-Cola, Pepsi Co, Red Bull, Unilever and others have worked jointly with Refrigerants Naturally so as to develop sustainable refrigeration technologies and combat climate change and ozone depletion.

Sustainable supply chain actually means the Venn diagram of People, Planet and Prosperity (Economic). Also could be termed as the idea of Natural, Human, Industrial and Technological systems working in connection to create a better world. Sustainable supply chain adopted by Unilever is also one of its kinds that took the strategic vision of long term positive effects. It broke down its supply chain in operational and tactical goals which are connected at individual levels. So, we realize that there are many macroeconomic and microeconomic factors present that affect our supply chain strategy to a very high extent. The aim is to build a system that can bring high economic growth within limited resources.

Author: Irashi Jha

Intern, Goa Chronicle
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