Robust Supply Chains Boon for the FMCG Industry to Tackle the Effects of Covid Third Wave

Robust Supply Chains Boon for the FMCG Industry to Tackle the Effects of Covid Third Wave
The COVID-19 pandemic had put an enormous strain on food supply systems, causing bottlenecks in farm labor, processing, transportation, and logistics.

By Milind pingle , CEO, Allana Consumer Product Pvt. Ltd

22 Jan 2022 | 9 min read

The COVID-19 pandemic had put an enormous strain on food supply systems, causing bottlenecks in farm labor, processing, transportation, and logistics. The period has also witnessed significant fluctuations in consumer demand. Much of these disruptions were the result of policies put in place to slow down the spread of Coronavirus. 

In the face of these challenges, supply chains have shown amazing resilience. As stockpiling behavior faded and supply networks adjusted to growing needs, grocery store shelves were restocked. Long lineups at borders shrank quickly as a result of efforts aimed at removing superfluous restrictions. While the effects of COVID-19 are still being felt, past experience demonstrates the necessity of an open and predictable international trade environment in ensuring the product gets to where it is needed. 

While there have been tensions and challenges, the industrialized supply chains have exhibited excellent transition and resilience in the face of Covid-19. As consumers lowered the volume of product purchases after initial hoarding, supply networks responded to a huge spike in demand. Despite a general tendency towards ‘just in time’ models with minimal inventories, several factors throughout the supply chain compelled companies to maintain buffer stock, in reaction to the demand rise.

Another strategy followed by firms is that they have distributed sufficient inventory among consumers to create a win-win situation while addressing declining service levels with partners, and reducing end-to-end costs to serve. The emphasis has been on expediting the approval process for new suppliers, maximizing supply continuity and raw material availability, planning for backup sourcing, flexible and mobile storage, and rethinking the last-mile delivery.

The supply chain firms are now shifting their focus on decentralizing and localizing their approach in order to be closer and accessible to their customers and to avoid any disruptions in the supply of important raw materials. Increasing operating hours, hiring of additional employees, production of products that are in demand, sourcing alternative materials, and simplifying inventory management are some of the additional measures taken by the firms in order to run smoothly to support the FMCG industry. The resilience and agility of supply chains, as well as a diversified production footprint, along with increased digitization, would enable the sector to ensure the continuing and uninterrupted supply of a range of FMCG products and meet consumer needs in all developing scenarios.

In the current situation, the idea of a circular supply chain paves a deeper logic than a linear one as manufacturers can refurbish discarded products for resale. Several companies are breaking down their products and turning them back into raw materials in order to deal with the rising costs of raw materials and their fluctuating availability. Circulating the supply chain can help reduce expenses beyond the initial costs of implementing new processes. It enables businesses to spend less on raw materials and so mitigate the risk of price fluctuation. Additionally, a circular supply chain generates less waste, assisting businesses in reducing their overall environmental impact. Customers' perceptions of sustainability have created fresh demand for a specific customer segment. With the rise of green consumption, more businesses are projected to integrate eco-friendly supply chain operations in the future. While the specific purpose of green supply chain management is often to reduce CO2 emissions, businesses should also consider adopting the concept as a way to offer value to their customer base.

The past year has demonstrated that supply chains must be responsive and adaptable in order to deal with market volatility and unforeseeable external changes. The days of decreasing inventory to the greatest extent feasible may be coming to an end; instead, companies will need to adapt to rising consumer volatility with ‘elastic’ methods - the ability to expand and shrink capacity to match demand within a particular time frame. When firms understand supply chain execution as an end-to-end process, beginning with order entry and extending through procurement, manufacturing, inventory and warehouse management, transportation, and distribution, the concept of flexibility becomes very relevant. When implemented correctly, an elastic supply chain can scale up or down to meet even the most unexpected demand patterns. It can assist to cut expenses, improve service, reduce risk, and boosting the company's competitiveness. Companies, for example, will soon be required to provide reports on the impact of their supply chains on job creation, sourcing procedures, labor kinds, and modes of transportation employed. Providing information about these areas of their supply chain can help businesses improve their brand image among consumers and prepare for regulatory compliance, if necessary.

According to a report by Unicommerce and Kearney, e-commerce sales increased 36 percent in volume and 30 percent in value in the quarter ending December. Every company's approach to online sales has shifted dramatically as a response to the havoc caused by Covid- 19. The adoption of e-commerce is being accelerated by factors such as comfort, safety, alternatives, and price, as well as easier access to faster Internet speeds on mobile devices. A significant portion of the plan is now geared at bolstering technology, online business, and social commerce. Many businesses are on the path of digital transformation, and the epidemic has hastened the seamless integration of offline-to-online outcomes for both direct sellers/ retailers and their consumers, allowing firms to transition to digital platforms. 

Executives and supply chain management are ensuring that corporate goals remain aligned with an autonomous and linked framework as the pandemic progresses. Businesses are investing in skills that will enable them to capitalize on the dynamic insights generated by their supply chain. Personnel requirements favor those who understand supply chain dynamics, can adapt to changing circumstances, and determine the most effective method to leverage new technology. As a result of changing consumer trends and expanded distribution, several companies have successfully oriented themselves towards development and recovery in their respective industries. The FMCG industry being evergreen is moving through the pandemic gracefully with the support of a flexible and robust supply chain that is adapting to new frameworks and policies in order to keep up with novel consumer demands.

The COVID-19 pandemic had put an enormous strain on food supply systems, causing bottlenecks in farm labor, processing, transportation, and logistics. The period has also witnessed significant fluctuations in consumer demand. Much of these disruptions were the result of policies put in place to slow down the spread of Coronavirus. 

In the face of these challenges, supply chains have shown amazing resilience. As stockpiling behavior faded and supply networks adjusted to growing needs, grocery store shelves were restocked. Long lineups at borders shrank quickly as a result of efforts aimed at removing superfluous restrictions. While the effects of COVID-19 are still being felt, past experience demonstrates the necessity of an open and predictable international trade environment in ensuring the product gets to where it is needed. 

Featured Collections

  • Retail and Business
  • Technology
  • CPG
  • Food Service

Use the code CCIRNEW to get the First Story for free.

Sign Up For Free