Corona Covid 19 - an opportunity to push make in India ~ Prof Archie D'Souza

Corona Covid 19 - an opportunity to push make in India

Prof Archie D'Souza

Archie D'Souza is adjunct professor at Dayanand Sagar University, Centre for Executive Education. He is also director of CSSPL Tech Pvt Ltd. A recognized  expert in Airfreight, Logistics and Supply Chain Management.

Starting from December last year the world has been afflicted with the Covid 19 virus, which is alleged to have been originated in Vuhan in China. Its impact has been felt across the globe. It has adversely affected every sector in the country, with the logistics sector being the worst affected. According to the Indian Brand Equity Foundation (www.ibef.org) the sector employs 40 million people, contributing $ 200 billion to the economy. So, we are looking at a very big sector being affected. Is there any hope for redemption as far as the sector is concerned? While in the current scenario it seems unlikely, one can definitely look at the future and plan for in the present.

Here are two reports which explain in detail the kind of adverse impact the pandemic will have on India's GDP and on retail supply chains, across the world. The McKinsey report on retail supply chains talks about five actions retail supply chains can take to navigate the pandemic. An article published in Business Today based on a report from KPMG details the impact on India's GDP

https://www.businesstoday.in/current/economy-politics/coronavirus-india-gdp-growth-may-fall-below-3-if-lockdown-extends-says-kpmg-report/story/400135.html

We will focus on how India could use this an opportunity for the current and future. The focus will be on supply chains. India has consistently, for almost three decades, been among the fastest growing major  economies of the world. While services have been a major contributor to this growth story, manufacturing isn't too far behind. This high level of growth has been riding on investments made by governments at the centre and states, the private & public sectors and through public-private-partnership (PPP), on infrastructure projects. Primary among these are ports, airports, roads, special economic zones (SEZ), industrial clusters & corridors, dedicated railway lines for freight and warehousing, to name but a few areas. Not very long ago, the Adani Group was awarded 5 airports. New major ports, highways and rail corridors too are being built or, at least, construction will be resumed once the lockdown is lifted.

These investments have resulted in a great deal of opportunities for professionals at every level, opportunities that will be fructified once things return back to normal. Thanks to this and various initiatives from the HRD and Labour & Employment ministries, there are courses being developed to train professionals in the field of Logistics & Supply Chain Management (SCM).  The Ministry of Labour and Employment (MOLE) has come out with a number of vocational programmes to train people at every level in the field of Logistics.  Details of these skill development programmes are available on the MOLE and National Skills Development Corporation (NSDC) websites.  Similarly, universities, in their MBA programmes, have started introducing Logistics as an integral part of the courses that students have to undergo. We will look at courses later. Right now, let us look at the industry.

Another benefit that this high growth brings is a greater demand for goods of all kinds, across segments, whether they're luxury goods or products for mass-consumption. One thing that will happen for sure, when we see normalcy again is that major manufacturers will look for new sources for acquiring raw materials and components. This will result in a spurt in construction of manufacturing plants.  Wherever new manufacturing units are set up, plant and machinery need to be procured and installed. Once commissioned, these units need to procure, among other things, raw materials, components and packing materials to ensure that production takes place. These have to reach the factories. Similarly, finished goods need to be moved from plant to market. Agricultural products too will Also required is storage at the origins, destinations and in-between. All these activities need the services of professionals, called logisticians. The business of logistics requires crores of professionals, at various levels, taking part in myriads of activities. Can we use this period to train online young people who wish to enter this sector? 

When normal life resumes, the demand for skilled logistics professionals will increase manifold from the current level of 40 million. The figure for new fresh professionals will be anything between 5 & 10 million. Globalization of the economy will not die as a result of the virus which originated in Wuhan. It will only go up with manufacturers looking for new sources to procure supplies from. Universities across  India and the globe do offer specialized courses in these areas. With classroom sessions having stopped, learning has become online. This is the trend world over. Good quality SCM professionals are a necessity without which there'll be no recovery. So, e-learning in the field will be the buzzword for, not just the immediate present, but the future as well.

We will state here, what opportunities could be provided in e-learning. The contribution to the world economy of shipping, aviation, road & rail infrastructure and every other sector related to the field of Logistics is tremendous.  Without transportation there would be no trade and most of the world’s populations would starve. New centres of production and consumption, which will no longer be as  close to each other as in the past, will require new international transportation infrastructure connects the two.  Without new shipping, air and land transport services this will not be possible.

Let us look at what happens currently. Food grains, fertilizers, cement, coal, ore and a host of products are transported in bulk carriers; crude oil and other liquids as well as LPG & LNG and several petroleum products – crude and finished – move in container ships; container ships, ro-ro services, break-bulk, reefers, etc. – we can make a long list of the kind of shipping services available.  Without shipping the entire world economy would collapse.  Water is the most economic mode of transporting most goods.  Only pipelines are cheaper for a single liquid or gaseous commodity moving in very large quantities, in one direction.  Shipping services also leave a much smaller carbon footprint compared to the mother modes of transportation.  Here again, pipelines are the exception.

Air services also play a major role in international trade.  Transportation of goods by air has reached unimaginable proportions.  Today the world’s major passenger carriers earn a great deal of revenues from cargo, more often than not, exceeding passenger ticket revenues.  Several major airlines, e.g. Lufthansa Singapore Airlines and Emirates Airlines, have hived off their cargo divisions into wholly owned subsidiaries.  In addition, we have all-cargo airlines and integrators – cargo airlines offering door-to-door services for freight.  The variety and range of services that all these airlines offer are numerous.

Airports, ports, truck & train terminals, courier service providers, etc. all require top quality logistics professionals.  Apart from these, there are a range of intermediaries like freight forwarders, customs brokers, shipping & air cargo agents, etc. that need professionals.  Manufacturing and service undertakings too require logistics and SCM professionals.  So, the opportunities are virtually unlimited.

The importance of the supply chain

Logistics, a very important component of the supply chain,  is the universal thread or pipeline that plans, coordinates and implements the delivery of goods and services to customers all over the world. Without trade there can be no economic development and without transportation, there can be no trade. Transportation is the most important component of logistics. There are several other components of logistics. Professionals in this field, i.e. logisticians, manage and coordinate the activities in the global pipeline to ensure an effective flow of materials and information from the time a need arises until it is satisfied; often beyond, e.g. equipment that is supplied needs servicing, viz. maintenance, repair & overhaul (MRO). Service providers need to procure, move and store spares for this purpose. This flow and storage of goods encompasses planning activities, implementation and control in both forward and reverse directions.

The sector, as we've seen, will see a spurt in the number of people employed and will create many more jobs, not just immediately but also in the next two or three decades. Some of the activities or functions of industrial logistics include, order processing, inventory management, transportation, storage (viz. warehousing), packaging, customs clearance and several value-added services.

Logistics involves so many critical business activities that nearly every business organization, from the smallest to the largest, requires, either through direct employment or indirectly, professionals in the field. Needs range from CEO to drivers and handlers. In other words, besides qualified persons, a number of unqualified, but trained, people a, re needed. Also required are analysts, software developers and experts in robotics and artificial intelligence, the list seems endless. Most of the jobs in the sector do not require highly qualified individuals. Universities and institutions across India and the world, offer certificate, diploma and degree courses in logistics, including an MBA. Indeed, the industry, as well as professionals employed here are poised for exponential growth.

This is the best time for professionals who are idle to get qualified. Also, for students to get the necessary skill-sets needed to start careers in the industry. What about the supply chain in general?

From a business-use perspective, logistics does have a role to play to ensure that supplies continue to be maintained not just locally but globally as well. So, passenger aircraft, which would otherwise have been grounded, now carry cargo in their cabins. Here's a report on the same:
https://www.businessinsider.com/coronavirus-airlines-flying-cargo-only-planes-for-medical-supplies-mail-2020-4?IR=T

There are several such reports across the globe and a few in India also.

Here is a graphic that nicely explains which sectors are likely to gain and which likely to lose

Here are two reports one good and the other, not so good:

https://www.businessinsider.in/india/news/in-maharashtra-the-biggest-roadblock-of-farming-is-removed-due-to-the-coronavirus-lockdown/articleshow/75021749.cms?utm_source=browser_notification&utm_medium=chrome&utm_campaign=BI_Browser_Notification_New

https://logisticsinsider.in/the-vehicular-lock-jam-an-augury-of-an-impending-essential-commodity-crisis/

Today almost the whole world is on a shutdown. There's hardly any manufacturing happening. Certain essential industries , like medical equipment and supplies, are open. The government must allow agricultural produce to be harvested and moved into warehouses. Those not in business currently need to look at how to cut their losses. All businesses, especially those in manufacturing, need to look at newer opportunities that will emerge once the crisis is over and be ready with a strategy. As I often repeat, stop relying on a single source for supply of raw materials, components and services. This is also a time to relook at their social orientation.

What the I in India Stands for and How we Can All Contribute to bring India to its rightful place - #1 ~ Prof Archie D'Souza

When I finished reading this story a few weeks ago on How an Indian Entrepreneur is taking on sportswear giants like Adidas & Puma, I was reminded of a book I picked up in 2009. Do click at the link to read the article:

https://www.business-standard.com/article/companies/how-an-indian-entrepreneur-is-taking-on-sportswear-giants-like-adidas-puma-119051200713_1.html?utm_source=FB_Story&utm_medium=Social&utm_campaign=Reach&utm_term=19May_Consideration_Funnel&utm_content=India_Sports_FB_Engagers&fbclid=IwAR0XANt2OcoXAkJlTZzKCsxn-O79xFku0a9puKdpfb88r27VxYKPG2l-QKM

The book I'm referring to is written by Porus Munshi, entitled MAKING BREAKTHROUGH INNOVATION HAPPEN, with a sub-title – How 11 Indians Pulled off the Impossible, with a front jacket comment by none other than Ratan N Tata who says, “This book....distinguishes itself by its detailed focus on the thought processes which inspired the breakthroughs. This innovative approach in storytelling enhances the book's inspiration quotient for the reader and challenges her or him to set out on a similar journey.”

By the time this review is published the NDA2 government will be well into doing business. So, whichever political formation is in power at the centre, like them, hate them or be indifferent, India must move on. Indians need to get on to business in the best way possible. We have it in us to take ourselves to #1, it is about time we work to our potential.

This is a review with a difference and I say this before you, the reader, ask me why I'm reviewing a book which was published ten years ago. As I stated, after I read the above article, I pulled this out of the shelf to reread it. In the foreword, titled The India Eleven, written by Rajiv Narang, Founder, Chairman and Managing Director of Erehwon Innovation Foundation, of which the author is also a part of, the following is stated in the first paragraph:

When you think of innovation, which companies come to mind? Apple, 3M, Google, Sony? Perhaps Dupont, Microsoft, Starbucks and Virgin? Can you think of an Indian company? Rarely.........The Iin India ought to stand for innovation, if we Indians have to regain our rightful spot in the world of being #1. We must transform ourselves into a nation of innovators. Do read the following before you continue with the review.

https://economictimes.indiatimes.com/jobs/view-innovation-holds-the-key-to-indias-job-crisis/articleshow/69610274.cms?

📷

In the year 2009, I was asked to “teach” entrepreneurship to MBA students. The university I then taught in even provided me with a whole lot of “textbooks” on the subject. My question to my dean was, “Can one learn entrepreneurship from a textbook and in a classroom?”

“One can't,” said the dean, “an MBA faculty's job is to inspire more than teach. If, when they graduate, even three students decide to start their own businesses and create employment, rather than being employed, I'd say, me decision of allotting the subject to you would be vindicated.”

I took up the challenge head on. Walked into the library, returned the textbooks, and asked the librarian to get me India specific books on innovation. Also, on a daily basis, paper cuttings on the subject from The Economic Times, Business Line and Business Standard. Remember, the year was 2009. Of course, she also handed over Porus Munshi's book to me. That's when I decided to use the 11, yes eleven, cases mentioned in the book as case-studies for analysis.

On reading the Azani Sports story, (link in para 2) I decided to reread Making Breakthrough Innovation Happen and write this piece. It's neither a book review or synopsis, it's just an inspirational article which I hope will inspire the readers to get into innovation mode, like a few of my students did ten years age.

The “I” in India stands for innovation and if we Indians have to regain our rightful spot in the world of being #1, we must transform ourselves into a nation of innovators. Going back to the year 2009, when I was asked to teach entrepreneurship to a batch of sixty students, I thought of a quote I had posted in a channel long ago during my student days, long before electronic communication became the norm. Management cannot be learnt in a classroom and from a textbook. What applies to management, is far more true to entrepreneurship.

“Use the case-study method,” my dean told me. Unfortunately, I said to myself, this has become as mundane as teaching from a textbook. There are plenty of textbooks and case-studies available on entrepreneurship. How many of them have inspired students to start their own enterprise? In fact, do textbooks and academic case-studies ever inspire?

So, I told myself, let me use the storytelling method in the classroom. While plenty of biographies and autobiographies are available, I needed some stories to inspire my audience. I found here just the type of stories I was looking for. Let me quote from the inner frond jacket. If the 1980s and 90s were the decades of Japan and quality, can the decades of 2010s and 20s be the decades of India and innovation? Can we use innovation as a springboard to tackle the challenges facing India today?

Looking at the eleven stories (I won't call them case-studies) of Indian innovation here and the country's progress in the first two decades of the millennium, I feel, it is possible. These eleven can inspire us to reach 11,000 and more.

Although ten years old, this book is still current and will continue to inspire. Of course, if the author, his sponsor and the publisher decide to bring out a new edition, I will try and be the first to lap it up.

“We are concerned about how we make the “I” in India stand for “innovation” and not “inhibition” or “imitation.” How could we create, by design, vast numbers of innovators and innovation leaders?” As Indians, we need to believe in ourselves. We need to believe that innovation led quantum growth could happen here. And, the eleven stories tell us just how. The book, as Rajiv Narang puts it, is written “in a

manner that will inspire people to actually sit up and take action, rather than just read an “interesting” story.”

Although authored by Porus Munshi, the research that went into it was conducted by teams from Erehwon Innovation Consulting and the Marico Innovation Foundation, where they launched, what they called, aptly the Challenger Research Project. They started with the question, What does it take to make orbit-shifting innovation happen? To find the answer, they met over 180 people, across forty industries and sectors. They identified challengers and orbit-shifters based on the criteria of impact, uniqueness and leverage. Every one of the stories is based on first-hand and in-depth research into individuals and organisations, not necessary businesses, that make orbit-shifting innovation happen.

The eleven stories include a newspaper, an eye hospital and a start-up, which gave FMCG giants like Hindustan Unilever, a run for their money.

When the author was about to start writing, some of the project team members suggested, “Why don't you write in a manner that will inspire people to actually sit up and take action, rather than just read an “interesting” story?” So, it was an “orbit-shifting challenge” for the author himself. And, the book is a direct result of that. I would urge everyone to read this book and be inspired and, in turn, be the source of inspiration. I must add here that the dean and college management was more than happy with my efforts and results.

So much as far as the book itself. What is in it for India? Are we going to be a nation of innovators or immitators? India is beset with problems, a challenge for any government in power. Amidst these problems are opportunities. Over a million people, whatever the government may claim, are still without electricity. Can't we find a way of harnessing the sun, wind and bio-mass to ensure cheap sources of energy to every individual in every village, town and city?

Can't we find a bio-degradable substitute for plastics?

Can't we find a way of bringing cleaner water and sanitation to every village? Plenty of funds are available with the government for this purpose.

Can't we come up with cost-effective, sustainable ways of making our cities more liveable?

There is no shortage of opportunities. Every one of them calls for innovation waiting to happen.

If Dr Govindappa Venkataswamy, who founded Aravind Eye Hospital despite suffering from an illness which handicapped him for life, could make a dent in global blindness, why not many of us in other areas?

Here are lessons for every Indian, lessons which will help us realise our goal of taking India to its rightful position of #1.