Warehouses still waiting approvals cripple supply chain: Embassy Industrial Park

April 20, 2020: Embassy Industrial Park, in its guide for logistics companies how to tackle Covid-19 situation in India, expressed their concern over warehouses in the eastern part of the country waiting for approvals from the local governments.

"The Indian warehousing sector is confronted with challenges to keep the business going amidst the lockdown, even as ports get jammed with cargo. Some warehouses in the eastern part of the country are still awaiting approvals from local administration for more than a week. Usually, approvals come in two days. This is affecting the supply chain ecosystem, " says the release.

Aditya Virwani, COO, Embassy Group and spokesperson Embassy Industrial Parks added, “This crisis is a story with an uncertain ending. However, what is clear is covid-19 has introduced new challenges to the business environment which call for a measured, practical and informed approach from political and business leaders. We also need to realise covid-19 is likely to lead the new normal – being aware of and preparing for these shifts will help businesses and economies navigate in the post-covid-19 world. Business leaders today are confronting difficult challenges. The crisis can be characterized by unpredictability and uncertainty. Instead of dwelling on the past, they will have to look ahead and plan for a secured tomorrow. A predefined response plan can be less impactful than analysing the real threat and taking measures to minimize the risk for employees, as well as the organizations and business.”

Logistics sector
According to recent reports, the logistics sector in India employs more than 40 million people and contributes $200 billion to the economy. This sector is the lifeline of the country and holds critical importance as it connects markets, suppliers and customers across the country.

The warehousing company wants the government to encourage industrial parks developer with policies similar to IT parks and IT SEZ policies in the past.

"This means the sector needs more planning for future, warehousing is a critical component of logistic matrix hence it is important for them to be functional even during the lockdown, this phase has taught the business to be more prepared for the unseen and I predicted, " says the release.

Suggestions to the logistics companies include:

1. Stay in touch with stakeholders
Any disconnect with the stakeholders at this point has to be avoided, in fact consistently communicating with the landowners, IPCs, customers etc is mandatory. When the lockdown is lifted and people resume work from the office there should be new line ups like site visits, tenants meetings etc. The logistic sector needs functionality hence it is important to be active even in this crisis.

2. Document everything
Documentation work (up to execution versions), due diligence etc can be taken care of during the course of work from home

3. Stay in touch with your human resource
Frequent con calls, video calls need to happen to ensure that the work is being delivered in a timely manner.

4. Motivate people
It is a difficult time, release of video or a mail by top management will boost their motivation to work efficiently from home. Also, these crisis hours gives us an important lesson, creation of a reserve has to be there which can be a minuscule percent of the bottom line monthly/annually so that this percentage can be utilised in difficult times for employee salaries.

5. A team to fight Covid-19
Establishment of a crisis team/protection group at the head office location with teams at the regional level as a single point interface to ensure control and monitoring is necessary. This Group shall be made to ensure real-time monitoring of all preventive actions at all operational locations continue to liaison with local authorities and ensure information management especially preventing the spread of any rumours. For eg: Indian ports, as well as logistics services, form a part of the Essential Services Act and they are operational as of now, however, companies are facing challenges on a continuous basis due to lack of clarity from many local authorities

6. Capital repayment holidays
Going forward, we can request/put in our contract with financial institutions that a capital repayment holiday shall be provided in case of Covid-19 type situation.

Troubles of logistics companies
An outbreak of a pandemic of this scale has caught various industries off-guard with a shockwave tearing through supply chains and businesses. From a consumer point of view, many companies do not have a clear demand signal as the outbreak has completely revised the buying patterns.

Owing to the health risks manufacturers are facing difficulties to meet the requirement of staff in normal operating capacities and also facing temporary factory shutdowns. Many enterprises are facing disturbance in logistics hubs and delivery routes due to restricted location and closures.

Food processing and pharma companies are functional but they are not being supplied with raw materials, faced with transportation issue among many others. The material packaging industry is operating much below its bandwidth as it faces issues in the supply line and shortage in manpower during the lockdown.

The unprecedented complete lockdown has created chaos in supply chains because the government is providing passes for very small numbers compared to the manpower needed to operate. Also, labour shortage due to reverse migration has been a direct outcome of lockdown. It is these challenging situations that make us rework on our strategies that can help deal with a crisis situation better.

Homebound consumers are relying on online services for all essential supplies. Ecommerce players have emerged into last-mile delivery of essentials to households, hence they need their supply chain organised. While these online delivery platforms have seen an increase in cart value during this time but this also causes supply chain disruption and delivery delays. Undoubtedly the tasks ahead for companies are strenuous; however, there should be a clear understanding of how to plan for a better supply chain management when such a situation arises again in future.

How logistics companies must plan for the future:

1. Ensuring end to end supply chain risk assessments and prioritize on critical areas
For the current scenario being receptive and proactive is the key. Engaging supply chain ecosystem partners like logistics and supply chain partners to conduct a clear risk health assessment: It is important to recognize the evolving demand and the level of inventory to locate critical gaps in supply, production capacity, warehousing and transportation. Businesses must define common goals and short term flexible strategy that ensures a positive outcome for the supply chain ecosystem. It is important to conduct end-to-end supply chain risk assessments and primarily focus on critical areas. It is imperative to have a widespread network to efficiently control various supply pools, productions and distribution networks.

2. Development of a vigorous risk management protocol and expand supplier network
Organizations should map out a supply chain network from end consumers to tier- N suppliers. For every obstruction faced in the ecosystem like warehouse, factory, supplier or transportation mode, firms should come up with a strategy to measure the risk in future and have a plan in place. As these unforeseen situations do not come followed by an indication, so it is better to be planned and equipped for such crisis as this part of the business will have to go on despite any crisis for mankind to survive.

3. Being equipped with digital and automated manufacturing capabilities combined with robust manufacturing capabilities
A well-structured manufacturing excellence program which is supported by technology can simplify the daily work and job aids and prevent from dependence on people for operations to run. IoT capabilities can further boost a digital ecosystem providing users relevant and updated information to make practical decisions at times like this.

4. Invest in more collective and alert planning and fulfilment capabilities
Today technology can bring awareness and partnership within companies as well as other business partners. IoT devices to track demand and good movement also helps with advanced forecasting solutions. An IoT device adds a major advantage for all aspects of the supply chain business. Reassurance that goods are located where stakeholders inform they are, both at rest and in motion. It also helps in the early identification of issues with goods getting lost or delayed. It further helps in real-time shipment and inventory visibility and tracking. The capabilities are very crucial for business performance in normal business situations and they increase the supply chain resilience in pandemic events like the coronavirus outbreak we are living today.