Industry captains urge mapping out digital supply chain future

FE REPORT | Friday, 22 January 2021

The country's supply chain saw some innovations during Covid-19 and the countrywide shutdowns, but the sector should keep it up for managing it better, industry captains said on Wednesday.

They, however, urged all parties involved in the supply chain to use the digital platform and create a rich data pool for the best use of the network.

The views came at The Financial Express Dialogue series "Managing Supply Chain during COVID-19 and Beyond."

The first episode of the FE Dialogue was on "Post-Pandemic Recovery: The Path to Ensuring Inclusive Development" held in October last.

Melita Mehjabeen, Associate Professor of the Institute of Business Administration at the University of Dhaka, moderated the webinar.

Delivering the address of welcome, FE Editor Shah Husain Imam said the country's supply chain has grown over time, but Covid-19 and trade war upended it.

He said supply chain is at the heart of the economy; it not only feeds domestic demand and meets basic needs, but also creates wealth through exports.

"We are stuck with remittances and RMG earnings even in lean time, the former has no local value addition and the latter requires a critical backward linkage domestically," he said.

He said for many countries, retention and curving out of new supply routes and control over regional and world markets are so important that these agendas are now geopolitical realities.

Although covid-19 has acted as leveller putting the most powerful and the weakest on the same boat, the lessons may be lost if human health and welfare are not brought out upfront, he argued.

Masud Khan, Chairman of Unilever Consumer Care Ltd, said Bangladesh reacted late to the Covid situation.

"We were a bit slow … we didn't understand the ramification what was about to happen, although China announced it much earlier."

He said most of the local companies also reacted late and didn't realise the gravity of the situation.

He said multinational companies were quicker in preparing a contingency plan for the pandemic than their local peers.

On the 14th March, Unilever decided to go for home office, prompting other multinationals to follow suit, he noted.

He said Covid-19 made the Anglo-Dutch consumer giant understand how important the supply chain is and how office functions at home.

He said the lesson of the pandemic is there should be multiple sources for continued supply in such a disruptive situation.

He said many companies were weighed down by shock and didn't do any business during the first few months.

He said 2020 was flat for fast-moving consumer goods in terms of both value and volume, growing by 4.0-5.0 five per cent.

Mr Khan, however, said Bangladesh rebounded very quickly after the lockdown was lifted.

He said the exponential spike in freight cost is a challenge for the consumer goods sector, especially for those who import.

A stronger Taka added to the woes, he said, adding bunker price hike and supply shortage of container pushed up freight costs.

He said highways should be improved and riverine routes should be utilised to develop the supply chain.

Mominul Islam, Managing Director and CEO of IPDC, thanked the country's supply chain community for their contribution to speeding up Bangladesh's relatively quick economic turnaround.

He said financial institutions and banks had to put a moratorium on the debt of FMCG players due to lower sales leading to less cash flow.

He said banks and FIs also had to inject money into supply chains, retailers, and FMCG companies to have enough cash flow to run.

He said there were some dents in the investment climate too in 2020 even in 2021 too.

Ejazur Rahman, Regional CEO (Asia), ISCEA and Supply Chain Advisor of UNDP, said Covid-19 has unleashed many kinds of innovation.

He said the way the country's transport system works is not much efficient and the sector is not so organised.

"A lot of transports ply with the empty space within the vehicles", he said.

He said supply chain is one such concept, which requires horizontal collaboration and competitors can come together and share space of transportation.

He said they are working on a platform called, ekshop, bringing the demand side of transportation for SMEs and providing a solution for supply sides, which will combine the services of logistics providers, third party logistics providers, e-commerce platforms, even the FMCGs.

He said the SMEs hit hard by the pandemic will be able to utilise unutilised space at cheaper cost and FMCGs and companies can get the benefit of the collaboration.

He said there is no option but to go digitisation now in the supply chain where all planning, sourcing, retailers, suppliers can use one digital platform to optimize the resources.

He said digitisation in the supply chain is not much visible in the country as of now.

"If it happens the potential is unlimited, the future lies there," he said.

He said he has been talking about a supply chain ministry to coordinate the entire supply chain management.

Ruhul Quddus Khan, Supply Chain Director of Unilever Bangladesh Ltd, said there were three key points they had to face during the lockdown to continue functioning.

"They are feeling of safety for all, decisive in decision-making and innovation," he said.

"We took proactive actions for our employees so that they can feel safe continue working during the lockdown," he said.

Habibur Rahman, Director of Supply Chain of Marico Bangladesh, said his company has ensured that all of its goods reach the doorsteps of consumers utilising innovation.

He said they saw the pandemic as an opportunity and business of Marico products grew significantly.

He said the responsiveness of the supply chain during a health emergency was challenging.

He said transportation plays a pivotal role in supply chains, which is mostly run by the third-party.

He said supply and demand side players should forge a partnership with this third party.

Syed Naimul Abedin, CEO of Peakward Bangladesh Ltd, said the initial months of the lockdown was good for the cement industry in the country.

He said despite the lockdown, some infrastructure projects like Matabari port and Rooppur nuclear power plant continued their work.

He said a quarter of this year will see a correction what was lost in 2020.

He said the supply chain will stabilise during the first quarter of this year.

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