India’s Position as a Leading Global Raw Materials Supplier
By Sanjaya Mariwala, Managing Director, OmniActive Health Technologies
Need for a 21 day shutdown
India is a big country that has more than 1 billion residents. For those who have visited it’s not unusual to see sizable crowds in various cities such as Mumbai, the seventh most densely populated city in the world.
What is the solution in a situation like this when the only way to beat the COVID-19 threat is social isolation?
A majority of daily commuters are daily wage earners, and if they don’t make it to work for the day, then their families won’t eat. Because of this stark reality, the government of India tried to incentivize people to stay home by providing food and money. Unfortunately, non-compliance forced the Modi administration to mandate a 21-day lockdown earlier this week.
So how does a supplier of ingredients or raw materials continue operating in this situation?
There are numerous challenges in maintaining the ability to continue to service customers in global markets under lockdown conditions. Here are just a handful of obstacles currently standing in the way for many Indian businesses:
- Law enforcement—The police will swing into action and keep the roads clear. They will stop every vehicle and prevent it from getting on the street.
- Societal insistence—People live in crowded areas; they are urged by neighbors and family members to stay indoors and not go to work. They also stand the risk of being ostracized by their community and they do not want to risk it.
- Community pressure—Local neighboring offices, plants and homes in the vicinity will put pressure on companies that continue non-essential work, by complaining to the managers or even to the local police.
The good new is the Indian government has recognized that the wellness, pharma, and food industries should be encouraged to operate as these are considered “essential” services.
When the finance minister, Nirmala Sitharaman, announced on national TV that Indian customs would remain open 24 hours a day in service of the nation, it was clear that the government encourages demand fulfillment and will support the operation of all essential industries.
However, in a country as deep and intense as India it takes some time for the message to trickle down to every individual so they act in a synchronized manner.
The Role of Individual Enterprise in Managing this Transition
Each company needs to recognize the challenges the government faces, and work with them in enabling their own working environment. Establishing connections with the local administration, industry associations, local police and the labor department will significantly facilitate speed with which one can assure plants and other facilities continue to operate smoothly. This in turn will help products move through customs clearance then onward to ship to customers worldwide.
Supportive communications with neighbors, educating employees and their families, and getting the buy-in of the labor department are necessary steps to prevent breakdowns in supply chains. Training and partnering with clearing and shipping agents, as well as making their staff part of your team is an effective way to ensure their stoppage does not affect you.
Taking real action on the ground such as ensuring good sanitation of the work place, availability of doctors, screening for any sign of illness, minimal contact between people, running only critical facilities and functions, as well as taking care of each employee are basic needs each company must meet.
Taking Care of Customers
Developing inventories, ensuring communications, and validating forecasts are some of the key measures to address in terms of customer needs.
OmniActive has taken adequate care to address all of these key customer issues. Further, we are working on ensuring all aspects of our supply chain remain open and as uninterrupted as possible. The good news is we have placed adequate inventories in various market regions, so minor disruptions in plant closures will not affect our supply or product availability.
At OmniActive we have also assembled a Rapid Action Cross Functional Task Force that can anticipate challenges and continue to carry out daily business. We have a committed team that is stretching beyond the norm in delivering solutions and meeting customers’ needs.
What Will This Disruption Do To the Industry As a Whole?
For consumers in markets like the US, they are placing their faith in wellness and preventive products, particularly products in the following health benefit categories:
- Immunity and general well-being
- Sleep and stress relief
- Weight management
- Multivitamins, specifically vitamin C and D
- Regular supplements they count on
For us, this means we will continue to see robust activity around our inventory as demand will stay firm. We believe companies and consumers will stock up in fear of disrupted supplies.