It is been over a year since COVID-19 first hit the world, disrupting lives, livelihood, and economies. Since the very beginning, the pandemic hasn’t stopped surprising the world with its myriad of challenges. Alongside, the disruptions have presented certain opportunities and many learnings.
One of the major impacts of the pandemic which had affected all the sectors was the severe disruptions it had caused to the global supply chain. As per an Accenture study, around 75% of Fortune 1000 companies had experienced negative to a strongly negative impact on their businesses.
[1]Before 2020, India’s logistic cost accounted 14% of GDP, which is 6% higher than the global average.
[2] Thus, the country incurred a competitiveness gap of approximately USD 180 billion. However, the 2018 World Bank Logistics Performance Index ranked India in top 50, promising a strong potential for growth.
[3]During the first wave of the pandemic in 2020, the national lockdown had shocked the supply chain, revealing great inadequacies within the logistics industry. The manual way of supply chain management emerged as a major gap. Furthermore, the segment experienced weak demand owing to multiple factors such as depleting income and rise in unemployment, negative consumer sentiment, deferment of non-discriminatory purchases, disrupted developmental and economic activities, which overall had a cascading impact on the sector. Moreover, there were systemic challenges of curbs and restrictions, impacted transport and logistics sector, stunted supply of raw materials, single-source dependency, liquidity crunch, labour migration, and capacity underutilization.
A series of lockdowns during the second wave and its sheer debilitating impact on the nation, with the overwhelmed healthcare and frontline workforce, regional lockdowns and restrictions, and shortages of essentials presented a very complex mix of challenges shrouded by uncertainties. Thus, the state of the current supply chain ecosystem makes it essential for the sector to absorb key learnings and reimagine the supply chain management.
Globally, the supply chain management segment is estimated to reach $37.41 billion by 2027, recording an 11.2% CAGR growth since 2020. The segment has been a catalyst for industrialization and economic growth, driving sizeable impact across the globe.
In India, supply chain management forms the spine for industries. Amidst the challenges posed by the lockdown, the sector addressed various shortcomings by leveraging digital technology with remote monitoring of inventories, pre-empting the size of inventory required for the next few weeks, and using predictive analysis for allocation. With a surge in demand for online delivery, companies felt the need to invest in strengthening their supply chain network to ensure seamless operations.
Organisations have by and large realised the importance of transitioning the supply chain management into a digital ecosystem, harnessing limitless potential of 21st century technologies to enable end-to-end agility and performance for digital supply networks.
The redefined supply chain management now can leverage AI, IoT, automation, cloud computing, and other new-age technology to build robust, sustainable networks that drive value, reinforce mechanisms, optimize solutions and increase output and visibility. With big data and analytics, the sector is creating powerful, dynamic supply chain mechanisms that deliver greater insights and emphasise reliability, traceability, and security.
The integration of Internet of Things and cloud computing is improving operational efficiency, which is further optimizing asset utilization. Through the reduction of time and manual effort, service providers are able to make the delivery ecosystem more sustainable and flexible. The clean and sustainable technologies are establishing new ways of supply chain transformation, with the segment becoming complex and globalized, making them drive scalable outcomes for the future.
Backed by the central government’s visionary ‘Make in India’ and ‘Digital India’ initiatives, the supply chain management is bound to receive a progressive growth environment. Under the ‘Aatmanirbhar Bharat’ mission, there has been a renewed focus on modernising supply chain management with it being identified as one of the five key pillars, alongside economy, infrastructure, technology, and demography for the creation of a self-reliant India.
However, in the new normal, the mission to modernise supply chain management needs stronger public-private partnerships, with technology enabled experienced partners with proven capabilities to usher in digital transformation for the sector.
As a global leader in digital technologies, Schneider Electric had successfully reinvented itself during the pandemic to offer its customers rapid transformation with remote technologies such as factory acceptance tests and remote assisted field services, enabling us to remain agile, pivot fast, and be resilient during the lockdown. Furthermore, our technologies have tested capabilities to detect issues that generate predictive maintenance alerts, has cloud-based applications to deliver remote support facilitating inter-continental collaboration to remotely deploy predictive maintenance on a production line.
With sustainability at the core of all our efforts, we are invested in technologies that help us to reduce carbon footprint to net-zero carbon emissions, to build circular end-of-life processes to minimize resource wastage and conserve biodiversity through minimizing water and resource use.
Enabling digital transformation across operations and creating future-proof organizations is a critical business function, and has become a leadership priority for businesses to lead the next phase of growth and progress. Digitization has created the grounds for supply chain operations to optimize costs, reduce overheads, break down silos across stages and mitigate sudden disruptions.
[1] https://www.accenture.com/in-en/insights/consulting/coronavirus-supply-chain-disruption
[2] https://www.adlittle.com/en/insights/report/reimagining-india%E2%80%99s-supply-chain#:~:text=The%20logistics%20cost%20in%20India,by%20adopting%20Industry%204.0%20trends.
[3] https://lpi.worldbank.org/
