The first few days of the lockdown saw several challenges related to supply and delivery of essential items. This led to retail stores staring at empty shelves and customers returning home empty-handed and disappointed. But, consumer goods companies tell CNBC-TV18 that the second half of the lockdown is expected to be much more stable, since there is more clarity on supply and logistics.

FMCG companies are operating at 30 to 40 percent of their capacities. They have been facing major issues on three fronts - shortage of labour, restrictions imposed by local authorities, and lack of logistics support.

These companies are now exploring different operating models to address these hurdles. For instance, some companies are looking at longer working hours to better utilise a limited workforce.

They are also exploring different distribution models. In many instances, retailers are directly working with FMCG companies to procure goods, thus doing away with supply bottlenecks.

Distribution chain expansion is also underway. ITC, for instance, has tied up with Dominos, and Britannia has partnered with delivery aggregator Dunzo to improve delivery. Food companies are also ramping up manufacturing and supply of high-demand mass products like biscuits, noodles and atta.

But, these efforts come with their own hurdles. Industry body CII is engaging with various government agencies to ease bottlenecks, and help companies chart out a strategy to scale up operations once the lockdown is lifted.

Shereen Bhan in conversation with Pidilite Industries' managing director Bharat Puri, who is also the chairman of CII's committee on FMCG, Vivek Gambhir, MD of Godrej Consumer Products, and co-chairman of CII's FMCG committee, Saugata Gupta, managing director of Marico and Richa Arora, chief operating officer at Tata Consumer Products.

On production, supply chain and logistics owes

Bharat Puri said, “The first 15 days have been difficult, logistics, labour as well as making sure that the retail chain all of this has been closed and it is getting better every single day."

"The two big issues are the availability of labour and mobility of the labour is a major issue. Second issue is transportation that is the whole area of logistics, getting it to our warehouses, getting it to our distributors and then to retail is currently a massive challenge.”

He furthered added, “In any economic downturn you need to do two things the first thing you need to do is conserve cash and make sure that liquidity is there."

"Then you model scenarios and work with the worst case scenario and hope that it will keep getting better and all of us will have to do that and in that therefore any cost that can be postponed, any capital that can be postponed, any revenue which is not currently necessary we are all going to put a stop to that and therefore sensible organization will have to resort hard cost control."

"Having seen this and given the fact that we are all Marathoners and not T20 players, we may not hire new people in the short run but try and keep your people, make sure you control cost as much as you can.”

Vivek Gambhir said, “In terms of the factory production about 25 percent of capacity is operational right now this seems to be fairly consistent with the rest of the industry. As far as the distribution chain is concerned again about 25 percent of our distributors have received permission and about 70 percent of our dealers have received permission. What is comforting is that government is quite aware of the challenges and the situation is actually improving by the day.”

Availability of labour

Saugata Gupta said, “I see the situation improving steadily over the time. The government, especially the central government is taking a lot of steps in terms of easing logistics. The question is also availability of labour, availability of truck drivers, it is the people availability. I think logistics situation will improve day by day. Things will improve, it will improve in a graded manner across different parts of the country.”

Richa Arora said, “It is also time for industry to kind of reflect on opportunities which are coming out of this entire experience and I call it an experience because typically from such shocks comes great learning."

"From the sales end, who would have thought that when you say tele-selling which you normally associate with insurance and banks and credit cards to play such a big role in terms of selling as is happening currently across many FMCG companies, a lot of the order taking is actually happening on phone and there is no reason why this should not be a potential new channel in terms of sales."

"There is a lot that the government can do, but I think there is a lot which is there for the industry to take as learning and actually improve the way we work and collaborate in different way altogether.”

First Published:Apr 7, 2020 10:54 PM IST