As India remains indoors amid the lockdown to curb the spread of the coronavirus pandemic, deliveries of goods have assumed more significance than ever. However, this has not been without hiccups. For large companies manufacturing essentials to online grocery platforms, there have been many hurdles such as authorities shutting warehouses, and manpower shortages.
B2B digital supply chain platform Bizongo, which deals with packaging requirements of companies, has also been facing major hurdles with respect to the supply chain.
This is even as it has started shipping Personal Protective Equipment (PPE) kits, individual items like masks, caps, shoe covers, sanitisers etc to essential service providers as they do their best to keep citizens safe during the lockdown. The first shipment was delivered to BigBasket, Zomato and Shadowfax.
Bizongo CEO Aniket Deb, spoke to TNM on the hurdles facing the packaging industry, logistical challenges in procuring the PPE kits, supply chain issues among other things.
Packaging wasn’t explicitly mentioned as an essential service even though it is an essential part of the supply chain. What hurdles did you face and how are you overcoming those?
As you might have seen, there is already a circular by the Home Ministry mentioning packaging as an essential commodity but to be very frank, hurdles have been very real for us. Even though the circular mentions packaging as an essential commodity, it has been difficult to keep our warehouses open. From an intra-state and inter-state perspective, we have had to get permit letters sorted, curfew passes sorted, and it’s been difficult.
How different is your daily business when compared to before the pandemic? What role does a digital supply chain play at a time like this?
From a company perspective, our business as usual has definitely taken some form of a hit, purely because of the fact that the warehousing and the operations are difficult to run. The digital supply chain that we sell is essentially our bread and butter. We promise our clients that we will auto-replenish their packaging from time to time using our digital supply chain and that helps them a lot. However, in the time of the pandemic, what has really happened is we have started a new line of businesses called Fight against Covid initiative’, where we are selling PPE kits, N-95 masks and all the other SKUs (stock keeping unit) to public and private institutions.
How did you come up with this initiative to distribute PPE kits, masks, sanitisers etc.? Where are you sourcing these items from? What were the logistical challenges in implementing this?
Logistical challenges are very similar to our packaging business. There are same warehousing challenges. From a distribution perspective, every state has its own different set of rules. They ask for permit letters, curfew passes. This is the biggest hurdle that I personally feel. From a sourcing perspective also, the market right now is very supply centric. There is an excessive amount of demand, but the supply is very low. The suppliers really are all small SME (small and medium enterprises) manufacturers. There are certain quality certification issues, so Bizongo has to step in between and take quality certification from all of the manufacturers to make sure that whatever we are sourcing is of the right quality. We are trying to build supply all across the country.
Apart from BigBasket, Zomato and Shadowfax, where else are PPE kits, masks, etc going? Are you also serving hospitals?
We are serving hospitals as well. For example, as of this moment, we are processing queries from KEM Hospital, Mumbai; RML Hospital, Delhi; Kasturba Hospital, Mumbai; Max Hospital, Delhi; CMC, Vellore; and a lot of other institutions as well.
You are operating a site with live tracking of demand and supply of PPEs and other essential equipment. Is there a demand-supply gap and are enough PPEs being distributed across India?
To be frank, considering the amount of demand we have, we don’t have the quantum of supply on board. So, that can be seen on the live tracking website as well where the demand has gone up and only about 20-30% of legitimate supply is available. So, this is purely based on the market construct. For a lot of the supply, the government has actually made sure and mandated that these manufacturers can only produce for the government and they can’t supply to anyone else. So, these sort of restrictions are also there and that is why it creates an issue.
Has demand from e-commerce companies (including online grocers) increased with respect to packaging?
Absolutely yes. Anything can be classified as whether it’s essential goods or not. So, having said that, e-commerce companies only fall in that particular category. So, with companies like Amazon, the demand is supposed to increase, and they have given us that sort of projection. It’s not that we have started serving out those orders yet because the COVID-19 impact is just being felt. But we believe that in this particular quarter, we will see more growth in e-commerce revenue for us than in the last quarter.
Is the government doing enough to address blockages in the supply chain of essential goods in the country? What are gaps and challenges that still exist?
I think from a government perspective, everything is working in silos. That’s the biggest problem. They are working in different bits and pieces and not talking to each other. I feel the lockdown is a prudent decision taken at the right time. There is no doubt that this is the right thing to do. But the problem we are facing is more on the logistics and supply chain side where the local authorities, the local policemen don’t really know that warehouses which deal in essential products should be kept open. These are the challenges we are facing.
How bad a hit do you see the packaging industry taking in this pandemic? Is the industry seeking any stimulus from the government?
I am not sure if there is a specific packaging industry stimulus, probably not. The manufacturers are facing a struggle in these times. So the circular which has been issued, the manufacturers are not really aware of it and again these SME manufacturers which make packaging happen, they are all operating factories with turnover anywhere in the range of between Rs 2-5 crore. These are small factory owners. So, whenever they see policemen coming and haggling with them, it’s not a pleasant experience. In fact, a lot of them have actually shut shop in these times and are non-operational. From a packaging industry perspective, supply is going to be a major constraint right now (amid the lockdown) because suppliers are not being allowed to operate in the way they want.