Supply chain activities have often been disrupted internally and externally due to unpredictable events like the Covid-19 pandemic. The economic activities across the world also came to standstill due to lockdowns. India imposed a strict lockdown to stop the spread of Covid-19 in 2020. Lockdown policies have disrupted the supply of raw materials and the demand for finished goods. The manufacturing industry is one of the sectors that has suffered the most in this situation, and they have struggled to reconfigure their internal and external supply chain network and partnership.
Supply chains are highly vulnerable to FMCG firms because of a substantial drop in consumption for the initial period of Covid. The pandemic has disrupted the manufacturing supply chain network, increased the lead time, and resulted in high uncertainties in supply and demand. The bullwhip effect, due to raw material supply disruptions, has made customers face scarcities of finished products. Manufacturing companies are trying to fulfil product demand quickly by increasing the number of products.
FMCG's high margin products like beauty and grooming products went down as fewer people moved out of the home. Some products like edible oils and oats saw a huge rise in consumer demand which required internal resource management including digital ordering and associated issues. Hygiene products/sanitisers saw sustained high demands. Packaged food and branded goods consumption went up. Demand for smaller packs increased as incomes drop. FMCG companies introduced the healthcare, personal care and household hygiene range of products for the first time.
Innovation & flexibility: Innovations in the supply chain are conducted by updating technology to be integrated with partners to provide an agile and fast response. Innovation is a way companies use to maintain competition in the market. The companies made innovations by adopting the technology in process innovation and product innovation flexible delivery following the customer demands. The company sets boundaries between one employee and another to keep enough distance during a pandemic disruption, the use of information technology for coordinating between departments, and supply chain partners. HUL launched 'Together We Can’ — Kaun Banega Champion (KBC) programme. This programme helped in innovative solutions for accelerated development of alternative packaging and associated supply chain capability to move away from single-use plastic ensures a deforestation-free supply chain.
Marico created a special app for retailers for placing orders through WhatsApp. Firms activated their call centre to receive orders directly from retailers. Firms joined hands with online delivery service providers like Swiggy, Dunzo, etc., to ensure uninterrupted supplies of their products to retail outlets and consumer households. Marico rolled out the ‘Immunity at your Doorsteps’ programme to reach out directly to consumer households across the country and provide them easy access to a range of immunity-building and hygiene products during the lockdown.
Dabur’s HR team started using predictive analytics for its dispersed workforce using the tableau tool. Dabur upgraded its web-based PULSE (Platform Used for Learning, Sharing and Engaging) to the latest RAMCO Magna 2.3 version. With this upgrade, QSS (Quick Self Service) a new interactive user interface replaced the earlier home portlet screens on PULSE. Dabur leveraged e-learning for its employee training initiatives.
During lockdown around 9600 FMCG products were launched and the success of the supply chain depends on the firms’ resilience and ability to meet the challenges of the internal and external environment. The capacity for adapting to the changes and coping with disruptions to ensure uninterrupted operations by making fast adjustments to the SC is referred to as supply chain resilience.
(Dr Prashant Salwan is Professor of strategy at IIM Indore; Dr Srinivasan R Iyengar is Director at JBIMS and professor in the area of Marketing & Strategy)
