COVID has exposed the underlying weaknesses of companies across the globe and many of them are feeling the pain of supply chain disruptions caused by this pandemic. “One vulnerability that some Indian sectors share with supply chains worldwide is increasing dependence on Chinese imports,” says Sunny Nandwani, Founder and Managing Partner of Acuver Consulting, which is a leading supply chain management IT solutions company with customers globally spread across Sweden, Australia, US, Singapore and India. In an email interaction with CXO Outlook, Sunny talks about the impacts of COVID on global supply chain industry, lessons every company must learn from this period, and many more. Here are the excerpts.
What are the major impacts of COVID 19 on the global economy and supply chain sector? How it will affect businesses in India?
The COVID19 outbreak is a black swan event of a kind never seen before in its trifold impact on demand, supply and markets. Demand has been forcefully constrained to essentials and the lockdowns worldwide have brought supply and markets to a screeching halt. With China as the world’s manufacturing hub, the effects of supply chain disruptions manifested in countries even before coronavirus had reached them. Currently, all Indian retailers and most MSMEs involved in non-essentials are not doing any business. As per a UNCTAD report, coronavirus could impact Indian economy for about US$348 million, among the top 15 worst-affected countries. The spillover would show in reduced growth until the last quarter of this fiscal year, and if the virus spread continues, the growth would likely be sluggish in the first quarter of 2021 as well.
How is Acuver Consulting and technology platforms helping customers manage the current supply chain disruptions?
Acuver is currently on an all-hands-on-deck mode for agile innovations and repurposing existing resources, IT Solutions to answer the changing consumer demands. Adverse effects on consumer sentiment are likely to linger post the lockdown, inducing more cautioned behaviour. The upside is that digital shopping will take precedence over physical for this period. We are helping our customers ready their IT solutions for omni-forward. The supply chain disruption has alerted our customers to loopholes in certain systems like last minute delivery and opaque vendor trails. Acuver is helping customers prioritize critical focus areas.
Besides evaluating and adapting strategic priorities, we are helping customers optimize Support & Maintenance IT spends by leveraging technology to reduce fixed costs since currently all retailers are looking to optimize each penny spent.
What are the things retailers doing differently as a response to the COVID 19? How is it affecting the operations of Acuver Consulting?
There are a variety of responses from retailers. Some are looking to move into the essentials category while using their existing digital infrastructure. Store-only operations are moving online, or newly rolling out ship-from-store modules. Lockdowns in specific areas have made certain businesses investigate selling to different geographies and partnering with vendors and delivery partners in several locations. Given hygiene and safety concerns, certain businesses are deploying curbside delivery to ensure no human contact. Despite working from home, our dedicated customer managers and teams are constantly working with customers to address these needs in the nick of time. We anticipate a surge in demand for digital commerce and we are upskilling our employees to be ready for it.
In your opinion, has this ongoing crisis exposed any of the underlying weaknesses of the Indian supply chain system? What are the lessons every company must learn from this period?
One vulnerability that some Indian sectors share with supply chains worldwide is increasing dependence on Chinese imports. The value of diversification and localization couldn’t be any clearer than it is now. Opaque supply chains are frustrating producers with no answers in sight. Strategies that focused on minimizing costs by planning for just-in-time deliveries and left no buffer in inventory are falling flat on their face. Also, traditionally, demand forecasting relied heavily on previous sales histories, which don’t tell you anything about what will happen in the event of a natural disaster.
A crisis is a learning opportunity like no other, and one would be foolish to lose it. Companies need to remember that all their systems designed for business-as-usual will not stand erect when unforeseen change comes abruptly – the only way it does! We need to always assess risks, whether imminent or distant and design a handful of alternative modes of functioning to tackle them.
In the supply chain industry, what has been the role of technologies like AI, Machine Learning and so on in controlling the damage due to the COVID 19?
AI & ML are doing a great deal in helping manufactures rapidly scale up production of masks and PPEs for the medical community. AI-enabled automated workflows are helping companies ensure employee safety while aiding them to execute new tasks like home-delivery or drop-to-location. Procurement difficulties and logistics complexities are also being eased by data-driven decisions.
How can the supply chain be more prepared to handle a crisis like COVID 19?
Supply chains need to diversify their logistics and supplier network and build in redundancy. Another important aspect is relationships – you have to know your last-mile partner and other staggered tier partners. In times of crisis, the collaboration will keep you afloat but only if you have active communication channels in place beforehand. Further, supply chains should devise variable cost-models that flexible to adapt to drastic changes.
What is the future supply chain market looks like? Please tell us some of the major developments in this sector that everyone needs to look forward to.
Interestingly, coronavirus seems to only be making pre-existing trends emerge stronger. We will see more of a shift towards localization following protectionist attitudes, especially in critical goods and services. Buying and spending will be more digital. I think brands which can build a TRUST for end consumers to create safe, hygiene shopping experience would be the key. Clean use of AI and Technology would certainly benefit.
What is your advice to businesses that are impacted by COVID-19 or trying to mitigate supply chain disruptions?
If you haven’t already, first get together and map out your challenges. Put together a task response team and communicate clearly with internal as well as external stakeholders. Put on an agile and adaptable mindset and reassess your priorities. If you cannot do what you wanted to before all this, find out what is the next best thing possible right now ensuring business continuity. Repurpose your product, design a new service or devote time to those long-overdue tasks that were too disruptive to tackle when things were normal. When the going gets tough, the tough get going!
More about Sunny Nandwani and Acuver Consulting
Sunny Nandwani is the Founder and Managing Partner of Acuver Consulting. Here he has been instrumental in conceptualizing and scaling Acuver to a 100 strong company today along with his two cofounders. His strong domain knowledge supported by his business acumen aided him to scale the company from the ground up. He plays the role of the CEO at Acuver and is responsible for its overall operations and growth. Sunny an IIM Bangalore alumnus also holds an engineering degree from Bharati Vidyapeeth. An ardent family man, he spends his free time reading and staying up to date on the industry.
Acuver launched in 2013, is headquartered in New Delhi and has branch offices in Bengaluru and Singapore. Acuver has grown rapidly ever since its inception from an original 3-member founding team to a team strength of 100 plus today within a few years. The company now delivers IT products and related services covering the entire lifecycle of Supply Chain spanning Order Management, Warehouse Management, Inventory, Implementation to Reporting and Analytics. In addition, Acuver is also actively working towards harnessing and integrating AI, Machine Learning, Blockchain and Robotics in their solutions. Their client list includes prominent brands in retailing such as Gati, Godrej Interio and Croma to name a few.