Impact of lockdown on the supply chain system in India

Supply chain system in India takes a hit during the lockdown

Supply chain takes a hit during the lockdown

While many of us had huge plans for the year 2020, the year apparently had a different plan for us. India went under lockdown from 25th March to contain the spread of the coronavirus outbreak which lead to restricted movement of goods and put a hold on the functioning of industries. As a result, companies that sell fast moving consumer goods (FMCG), as well as retailers of such goods, saw severe disruptions across the value chain.

Companies are struggling to keep pace with new shifts and disruptions in the procurement and supply chain processes.

Businesses are being shut, and the supply chain is disrupted. Industries are either closed or operating at sub-optimal utilization (with 8-10% of staff).

Companies in the healthcare, logistics, technology and media sectors are witnessing an increase in spending because these companies had to invest in unplanned remote workforces which became functional virtually overnight. Retailer supply chain happens to be one of the most crucial ones to be impacted by the pandemic and the on-going lockdown.

While many are losing jobs and many retail stores have reached the verge of shutting down, the lockdown is probably proving to be boon for the food retailers. Grocery as well as medical stores have seen a sharp rise in demand but due to the situations they were facing severe constraints of stock replenishment as company salesperson visits were severely hit.

While the online food and grocery stores are stepping up their operations to supply essentials to the masses, the overall food supply chain is battling a number of challenges to stay functional.

Retailers reported changes in the demand profiles of specific products, as shoppers’ behavior changed in response to the outbreak of COVID-19.

Supply chain takes a hit during the lockdown
Supply chain takes a hit during the lockdown

How the lockdown has affected the supply chain?

• Sourcing challenges
• Fewer sales channels for the raw material producers and farmers
• Capacity constraints
• Operational disruption

While various factors are forcing logistics and supply chain networks to adapt and rise to the challenges, going forward in order to ensure that if a situation like this pandemic is to rise again, companies across all sectors will be working on innovative ways with use of technology to smoothen the supply chain disruptions and have better visibility and communication.

The end goal ideally would be to ensure that the customer regardless of the situation should have access to the products they need.

Unfortunately, the road to recovery is not as straight forward as we expect.

Interested in more market-specific insights on the impact of Covid 19 on the supply chain system?

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