7 minute read
Mohan S A CEO & Director, Armes Maini
Mo han S a
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How may we best summarise the current state? What is the short to medium-term outlook for the material handling and storage solutions market? Current state is unprecedented and uncertain. No one has clarity on how the future will pan out. There is a lot of speculation, intelligent assessments; inferences being discussed in every company, industry associations, and through subject-based webinars, etc.
The material handling and storage solutions market is no exception to the current scenario. The business outlook, at this point of time, looks extremely gloomy. There is no clue of how the postCOVID-19 scenario will look like. Earlier, the influencers of the sector were differ ent, such as GST and the consolidation that it brought along, which helped meet the demand for new warehouses or stor age racking systems. Now it seems the demand drivers would be very different.
We don’t know when and where new warehouses would come up since many construction works are still on halt. We don’t know whether the compa nies who have signed contracts will continue or renegotiate those.
In June as well as in some parts of July, we are looking at a high demand, but that might be because of the pent up While most supply chain leaders are still in the reactive phase of how to deal with this pandemic, many are already at a conclusion that the balance between the levels of risk an enterprise can tolerate and the amount of operational flexibility it wants to achieve is purely dependent on scenario planning, which is starting to emerge amongst organisations as they continue to move towards intelligent, self-correcting supply chains. Mo han
S A, CEO & Director , Ar mes Maini Stor age
Syste ms in a one-to-one interaction with Upamanyu Borah , explains how decisive actions - particularly in escalating situations - and rapid scenario planning can unlock hidden insights that augment the supply chain planner’s abilities to quickly determine options and take action.
demand. The industry has to sustain for three to six more months and then we probably might see the businesses com ing back to normal. However, one thing is pretty much well understood that in the calendar year 2020, nothing much is likely to happen. For the investment cycle to begin in any company, it will take time. And even after that, compa nies will still critically decide on whether they should consolidate or just keep utilising whatever they have at their end, or if not, cost-efficient alternatives. With uncertainty rife, and COVID-19 holding the potential to impact
every part of a business for months, scenario planning is a critical tool to test preparedness. What are the best- and worst-case scenarios, and is the business equipped to cope? The uncertainty would continue for at least the next 12-24 months in one form or another.
We have already done the scenario planning. Though we don’t know what is going to happen in the immediate next few months, we have gone ahead and tried to evaluate and prepare on what we can do in our own case to tack le the current situation.
In the post-COVID-19 period, the global supply chain is expected to be redefined. This will create a new and different set of opportunities. Therefore, companies have to align their products and services to address such opportuni ties. While this happens, companies should also explore other business ave nues which are more certain and can help in business continuity.
As the CEO of an organisation, what is the biggest threat you face living in a fragile global economic system and disrupted times? I consider the inability to forecast or lack thereof as the single biggest challenge in the present scenario.
Though being a CEO, I am lost in means and methods to be able to see some part of the future, at least three to four months ahead, if not until the end of the year. The economy has been dis rupted; new normal is yet to evolve, but nobody knows what the new normal would seem like. As such, for me as a CEO, the biggest issue is how to cope up with the uncertainties and mitigate the unseen risks. It will certainly take some time for the industry to understand and adapt to the evolving situation.
Either way does it suggest that CEOs feel vulnerable because of an out of date business continuity plan or inadequate data flow? Data accuracy during normal times was witnessed to be around 70-80 per cent depending on the nature of the business. Lately, the usage of data in certain seg ments for business planning has significantly increased leading to exploration/ deployment of newer technologies such as Internet of Things (IoT) and Artificial Intelligence (AI), etc.
The data set pre-COVID-19 is still relevant to companies as long as con sumption remains. However, in the post-COVID world, the way data is viewed or interpreted may be different. Business continuity plans will undergo changes as COVID-19 like situation will get factored into the same.
Can you describe your company’s own business contingency plans? Do you have a crisis tool kit? Crisis pro cesses, resources and technologies are in place and understood? The state of business is already known, as it depends on the order book, but look ing at profitability and other aspects, what everybody is doing is to cope up with the crisis and run their organisa tions amid the escalating tensions.
We are well aware and already de veloping mitigation plans. We have been communicating with all our employees on a daily basis and adequately about the uncertainties that prevail and the new ones we might have to counter.
We have looked at few alternate prod ucts and business opportunities which are more certain. Our teams are working very hard to develop new products or shape the business towards meeting the demands of the new emerging areas as quickly as possible. We have been ready a month with the business plan.
We are in talks with a new set of cus tomers and understand their products and priorities. We have clear plans and stand strong to mitigate the crisis and ensure business continuity, which is a must. We are doing our best and all our employees have actively contributed their knowledge and efforts to get these things going. Is there a fairly cautious outlook regarding adoption of robotics and automation when the need is to be able to address pressures like tighter cycle times and a scarce labour pool? In my opinion, companies will certainly explore automation in a far more acceler ated manner than ever, but with a different set of conditions. The return on investment (ROI) considerations will be slightly different due to the addition of the crisis factors, such as labour avail ability, as well as keeping in mind another COVID-19 type situation.
At a macro level, labour arbitrage will still continue to prevail and will influence final investment decisions. From a practical perspective, how will a warehouse, DC or fulfilment center emerge in terms of meeting the common challenges? Well, in the post-COVID-19 scenario, the mix of DC and fulfilment centers will change. Earlier, the consideration was GST and the consequent consolidation. Now, the factor of last-mile delivery will come in, which means getting ware houses closest to the customer or consumption point. The network may change to meet the new requirements arising due to the crisis.
Is there a way to roll up the biggest external challenges facing warehouse/DC operations considering this new environment? From an external point of view, demandsupply uncertainties will be the biggest challenge for warehouse/DC managers. They will have a hard time figuring out if the existing infrastructure is enough for them or should they invest in new infrastructure.
How can the sector best plan for future events like COVID-19? Where should the focus be? Although it is going to be quite different for each and every business, I think the best plan for the future will be to find flexible ways and means to operate in a pandemic. The focus should be on faster recovery. The ‘one size fits all theory is not going to work anymore.
From now on, most businesses are going to consider pandemic or lockdown like situation in their business continu ity plans along with a set of effective risk mitigation plans. This, I think, will be the biggest learning for all.
