‘Startups to drive higher digitalization in supply chain of manufacturing sector’

Published: July 30, 2020 4:49 PM

An analysis of the bottlenecks facing India’s manufacturing supply chain shows that technology startups can partner with them to plug in the gaps to affect a rebound.

Startups can enable manufacturers to switch to a digitized workflow for non-core functions in the supply chain.
  • By Rahul Garg

The Indian economy recently crossed 100 days of living with the new normal of the lockdown and its gradual reopening in small steps amidst the Covid-19 pandemic. The Covid-19 pandemic has caused collateral damage to all stakeholders in global manufacturing, a void has emerged and manufacturing enterprises are searching for new reliable partners to pivot their supply chain on the guiding principles of supplier collaboration, transparency, scalability, and efficiency. Manufacturing enterprises in India have an opportunity to seize the initiative and fill this void in the global supply chain by leveraging the ability of Indian startup enterprises to provide cutting edge supply chain digitization solutions. 

Solving supply chain challenges 

An analysis of the bottlenecks facing India’s manufacturing supply chain shows that technology startups can partner with them to plug in the gaps to affect a rebound in the short-run while joining the dots to the long term goal of repositioning India in the global supply chain. 

Countering labour Shortages 

The lockdown necessitated a cold turkey approach to immediately contain the spread of the contagion. As we continue to “walk off the seatbelt”, enterprises are having to make do with sub-optimal workforces that are impacting various supply chain processes and consequently, total output. Startups can enable manufacturers to switch to a digitized workflow for non-core functions in the supply chain by using robotic process automation (RPA) and reallocate scarce manpower where it is needed the most, to unlock new avenues of efficiency.

Addressing local risks

In the aftermath of the decentralized approach to the lockdown, manufacturers whose operations are spread across geographies are faced with localized supply chain challenges due to the diverse rates of spread of the virus and the consequent downtime of local suppliers. Digital vendor consolidation can enable agile procurement at scale for manufacturing enterprises and allow them to lean on a digitally connected supplier ecosystem to ensure timely deliveries and safe operations.

Lack of visibility

With the ground situation evolving continuously, the offline workflow for supplier collaboration is impairing the visibility of manufacturing enterprises into supplier performance indicators of cost, quality, and delivery. In geographies where public healthcare risks continue to be volatile, lack of information on the plausible time-to-recover (TTR) for suppliers facing downtime in production poses a challenge. Startups can collaborate with manufacturers to provide artificial intelligence and machine-learning enabled supply chain solutions to leverage data of record for past behavior regression analysis, spot supplier risks, and trigger actions to pivot supply chain decisions on analytics and move towards strategic sourcing.

Also read: Now MSMEs can apply for credit, check CIBIL score and loan eligibility, more on SIDBI’s latest portal

Spurring sales and distribution of OEMs

Given the freeze on commuter logistics during the initial days of the lockdown and with travel advisory still being in place, offline models of sales and distribution of OEMs have taken a hit. While the traditional model of sales shall continue to be dominant, OEMs need to unlock the potential of omnichannel sales. Technology startups can partner with OEMs to create and operate digital B2B commerce models to open new avenues of distribution and revenue enablement for OEMs. 

Bridging trust deficit

As Indian manufacturing enterprises explore the proverbial silver lining in the dark clouds of the pandemic, they shall have to build cost competitiveness capabilities and build trust. Integral to achieving these two goals shall be the way manufacturers create, manage, and conclude contracts. AI and ML-driven contract lifecycle management solutions can provide crucial contract analytics, spot deviations in contract KPI trajectories from status quo levels, and provide valuable insights on inflationary factors, sub-optimal uses of resources, materials, and time. These insights can reduce project overrun costs, delays in execution, and wastage of materials and lead to greater economic and technical efficiency; the competitive edge that Indian manufacturers need. 

Creating new global supply chain

Certain industry verticals in Indian manufacturing such as textiles and chemical industry verticals have stepped up to position India as a global leader in the PPE supply chain. While a vaccine is still some time away, the Indian pharmaceutical industry with its manufacturing capabilities will be integral to any plan for the mass production and distribution of a Covid-19 vaccine. Opportunity is knocking at the door of Indian manufacturers and they need to be more digitally prepared than ever before to create the supply chain of the future. 

Rahul Garg is the Founder of Moglix. Views expressed are the author’s own.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1‘Digital channel goes beyond payments for MSMEs to fill gaps in transparency, offer business insights’
2Is data localization compatible with Atmanirbhar Bharat? Here’s what govt must do to make it successful
3‘For old fashioned MSMEs, Covid is a chance to change dramatically, transform business models’