Indigenous Supply Chain Agility during Covid-19

"The felt need" of Supply Chain agility has been much lesser than "the perceived need of agility". Covid-19 is a black swan event which has provided the context for "perceived need to meet the felt need". Indigenous Supply Chains have done a fantastic job with that. 

 My research (from the published data) gives a soothing perspective that Indigenous Supply Chains have exhibited agility of great sorts. I appreciate the Supply Chain agility on the below parameters,

a. Capacity alterations - Indian Supply Chains have shifted the existing production line to produce a completely different product. e.g. In case of India's largest FMCG company, the plant which used to produce "Perfumes" before Covid-19, has transformed itself into producing "Hand Sanitizers". Assuming that flexibility in production technology being the basis for the shift also needs to be viewed in the context on the Supply side of the Supply Chain being able to "feed" the production line.

b. New Product Introductions - Covid-19 naturally has surfaced the need to cater to a substantially different demand. Non existing product demand or products to cater to new demand have been the key themes. e.g. One of India's largest Paint company has launched a new paint product which is Covid-19 resistant. Sanitizer sachets have been a new product which exhibit indigenous Supply Chain thinking.

c. Portfolio rationalization - In the first few months of  Covid-19, Indigenous Supply Chains have exhibited great agility in Portfolio rationalization. From a portfolio size of "X", some players had to "forcefully" (during the April-May 2020 months) work it down to 0.2X portfolio size which now, with a better flow of material across the Supply Chain (Post June 2020), has gone up to 0.5X. The flexibility exhibited to rationalize the portfolio, initially as a "no other alternative" scenario to "optimized based on visibility of the near future" is a fantastic achievement.

d. Import substitutes - The break down of international logistics put a lot of stress on Indigenous Supply Chains. Initially this was a Logistics challenge which later was an "Trade" restrictions challenge. The continuous updates regarding policy changes be it import restrictions or duty changes or any other, Indigenous Supply Chains have had to be agile. My observation is the import policy changes also put a pressure on "Pricing". e.g. In case of Pharmaceuticals industry in India, the input material costs have gone up by 3 times in some input material. Finding import substitutes in a regulated industry is far more challenging.

e. Demand fluctuations - One of the natural outcomes of Covid-19 has been heightened uncertainty of demand.The initial hypothesis of the shape of recovery (U,V,L and K) put Supply Chain in a fix. Indigenous Supply Chains have been working well on this. Indian tractor sales have shown one of the best YoY performances, while Passenger car segment has been catching up. An Indian automotive company has been able to gain 3 times more market share in Passenger vehicle segment.This indicates that these Supply Chains have been able to handle the demand fluctuations well.

My impression is that the Indigenous Supply Chains have been able to exhibit agility in the first few months post Covid-19. The million dollar question remains to be seen it that of the sustainability of the agility under different scenario.