Upholding the philosophy of creating one’s own roadmaps, Mr. Arjun Bajaaj begun his entrepreneurial journey with Daiwa in 2016. (From the house of Videotex India which has been in the Industry for over 37 years) At Daiwa, he is largely responsible for leading the company’s expansion into India. In a short span; Arjun has over hauled the company into one of India’s largest conglomerate. Arjun has been instrumental in building opportunities out of the challenging Indian markets. Under his leadership the brand has been one of the preferred brands in the Online space in India and also has made in ways to the offline channels. Restructuring the way business operates in India, Arjun has put immense effort on the R&D/Technology to carve a niche for the brand DAIWA, over the price points.
A year ago, it seemed inevitable that the shifting global dynamics due to COVID -19 could pave India’s way into the manufacturing sector. Come 2021, manufacturing in India has come to a near standstill. Along with being the worst grip of a variant of the novel coronavirus, India has faced several industrial challenges. Though the manufacturing sector has shown incredible resilience & innovation, the industry continues to face recurring challenges. The struggle is real, with pressing pain points that needs to be addressed & understood.
Since the first lockdown in 2020, there has been a shortage of raw material supply from the Global vendors and an increased demand cycle from consumers. The shortage of raw materials has impacted the product availability in the market and has also led to an increase in the prices. The price hikes in the finished goods for 2020; is further attributed to higher fixed costs, lower capacity utilization and overheads such as expenses related to covid safety protocols. Along with this, the industry also faced a severe labor crunch. Manufacturing Industry was already struggling to fill the available positions before the pandemic, and now the challenge has only deepened. With India witnessing the most extended lockdown to contain the spread of the COVID-19 virus, it also witnessed the biggest migration of migrant labour workers. Though, there are no official Indian statistics on internal migrant workers, still, the pandemic has had a profound impact on the lives of domestic migrant workers and that the industries that rely heavily on the face an unprecedented shortage of talent. With no end in sight to the pandemic, many workers have preferred to stay in villages due to the lack of government’s support programs. Amid the ongoing problems, technology too is advancing at warp speed, and most manufacturing companies are struggling to keep up.
While the industry was reeling under the impact of the first wave, globally, the situation worsened, which disrupted the entire manufacturing eco-system of India once again. The current & ongoing manufacturing stress fits in the palm of your hand. Semiconductor shortages have plagued several technology-driven industries. Supply chain disruptions are among the biggest challenges facing manufacturers for the time being. Supply chain issues have impacted the manufacturing sector more than any other industry, with inventories at their lowest levels in decades. Offshoring of electronic components to Taiwan and China, combined with the effects of the pandemic, have contributed to significant supply chain disruptions. The supply chain management issues have exposed vulnerabilities in the “real time” manufacturing mindset that was supposed to improve efficiencies. It left some companies scrambling to catch up after demand surged faster than expected in the wake of the COVID-19 pandemic.
Furthermore, the traffic congestion at China ports has led to a further delay in the shipment of Raw materials. The delivery time for goods into India has gone up from 28-30 to 50 days. This has led to a delay in the delivery time of the goods and a complete change in production plans for the manufacturers. On top of this, the Ocean Freight Cost has gone up five times compared to before Covid, increasing the overall Freight Cost. This is a massive disbalance for the industry. Overall, the situation is a very dynamic and volatile period for the Indian manufacturers.
Policy responses are essential to help mid-size manufacturers address repurposing challenges and facilitate a smoother recovery. A holistic structure that supports effective policy responses is the need of the hour.
Due to Covid-19, Shipment delay, increase in freight cost and chipset shortage, and uncertainty about the market have dimmed the lights for many brands despite the onset of the festive season. If there’s one positive spin on the supply chain dilemma, it’s the resurgence of “Made in India” products to help minimize reliance on global suppliers. However, India is still not fully equipped. To make this happen, India needs to build the bandwidth for it – Modern Infrastructure, Policy changes Etc. The approach needs to be in the long run and not short-sighted. The ongoing post-Covid-19 rebalancing can accelerate the trajectory of Indian manufacturing.