20/04/2020 - Indian Economy

KEY POINTS

·         Supply chain challenges in a situation of a long nationwide lockdown are immense, and complex. While maintaining the flow of essential supplies, it is equally important that people across the country have access to them, preferably while remaining within their homes.

·         Maintenance of a supply chain is a complex process, and can be interrupted, or clogged in many ways—manufacturing shutdowns, transport restrictions, speculative behaviour and panic buying, issues in last-mile delivery, etc.

·         With suitable logistical linkages and clarity of respective roles, and support from government agencies, it can facilitate coordination between local FMCG enterprises and traditional kirana outlets, dynamically connect centres of supply and demand with modern tools of technology, and maintain, if not create, jobs at the same time.

·         An online platform like Zomato is being used to connect with brick-and-mortar restaurants to deliver food. This way, you are not only helping local businesses survive, but also providing a link for food to those who may not be in a position to cook.

·         Both online, and offline channels can use the network of logistics firms that provide last-mile connectivity to consumers. Both can collaborate during these times in the interest of efficiency, speed, and consumer welfare.

·         In the medium term, this throws up the importance of strengthening the IT infrastructure across the length and breadth of the country, encouraging innovations among our youth, and augmenting the architecture for boosting various applications of e-commerce in different sectors.

·         If we look into history, it was the SARS virus of 2003 that impelled the enormous growth of e-commerce in China. The emergence of Alibaba, JD.com, Taobao, Tmall, etc, witnessed explosive growth of e-commerce, on-demand, ultramodern delivery, as well as logistics infrastructure which overtook global trade and commerce.

·         These had an overall positive effect by generating millions of jobs (estimated 30 million in China) and sources of livelihood for micro-entrepreneurs who found a way to market. It also had a significant impact for women, whose movement is sometimes particularly constrained by cultural circumstances.

Supply and demand cycles were disrupted due to panic buying,lockdown imposed to tackle Covid-19 pandemic.Elders are not able to come out because of these conditions and many states have restricted timings for purchasing essential goods.E-commerce are highly organized and can deliver the essential goods to the needy at their door steps.

E-Commerce and maintenance of supply chains :

The number of users using e-commerce are increasing rapidly.This rapid growth is the result of exceptional services like 10 day replacement,prompt delivery etc provided by e-commerce companies.In the present situation in which the manufacturing has came to halt because of poor demand,logistics issues etc.E-Commerce can address these issues effectively.With already established procedures,they can ensure prompt delivery of essential commodities.As the orders are accurate in number,the data can be provided to the manufacturing units helps them to manufacture the required quantity.Logistic support is already properly aligned with these companies which can help delivery of goods to the doorstep on time.Thus supply chains can be maintained with the help of e-commerce.

Way forward :

1.Companies should ensure that proper social distancing and hygiene measures are followed by the delivery men.

2.Government can ease restrictions for these e-commerce companies by giving passes thereby ensuring fast delivery of goods.

3.A digital platform can be setup by the government for solving queries related to the e-commerce companies.

4.Offline retail outlets need to understand the severity of the situation and need to co-operate with the e-commerce companies.

Please review....