Dr Renu Si ngh Parmar, Former Senior

After months of mandatory lockdown, Dr Renu singh parmar now, with the opening of the economy, one can expect that the prospects of the air cargo industry will H ow is the Indian air cargo industry reacting and responding to the COVID-19 pandemic? improve, says Dr Renu Singh Par mar , for mer Senior Eco nomic Advisor , MoCA. In The industry has risen to the occasion an exclusive interview by proactively ensuring the movement with Ritika Arora Bhola, of essential medical supplies and relief the industry expert items not only within the country but to informs more about other nations as well, despite the severe the global economy constraints on belly capacity (due to that will take time to grounding of passenger aircraft). How recover, but, air cargo ever, freight rates have risen astronomimight pick up around cally due to this shortage. Till May 28, this time. 2020, MoCA facilitated the operation of 584 Lifeline Udan flights, transporting a total of 935 tonnes of medical/relief car time to attain the volumes go. With the recent opening up of the witnessed in 2018-19. Apart economy, one can expect that the pros from that, lesser passenger pects of the industry will improve. aircrafts will fly, consider Now that the ban has been lifted from faced during the lockdown, the transportation of cargo via air, and lower PAX demand. what can the Indian government do This will mean, lower avail in terms of investments and policy im ability of belly capacity. Like plementations to facilitate a smoother Spicejet who recently con flow of cargo amidst COVID-19? verted 3 of its Q400 Bombar More slots for cargo aircrafts at airdier aircraft to freighters,  ports should be identified immedi ately by the airport authorities.  Freight rates will have to be moder Overdependence on China  ated so as to not impact demand.  Greater utilisation of passenger air craft for cargo operations need to be have created havoc encouraged. ing the crippling losses  Relaxation of bilateral and multiis done manually. Brick and mortar com other airlines may also have to consider lateral regulations that restrict emer panies cannot follow a 'work from home' a similar move to meet the shortfall of gency supplies. format but will have to make changes to belly capacity.  Rationalising and integrating the vast bring in robotics and AI into their manu number of new SOPs issued for cargo facturing processes. All this would take Is it high time that India should operations. time and investment. The recent ‘stimu re-evaluate its risk management lus’ measures announced by the governpolicies and be future-ready of How long do you think the impact ment will also take time for the results to crisis like these? of the coronavirus would last and kick in. Further, the demand in the econ Absolutely! Everybody was caught offby when Indian air cargo industry/ omy for goods and services has taken an guard by the arrival of the coronavirus. airlines would achieve the same unprecedented beating, as millions lost Sudden supply chain disruptions sent capacity, load factor levels and their jobs/took steep haircuts. the entire global economy into a tailspin. demand as it was in 2018-2019? The global economy too will take India like others countries have realised It’s going to take some time for manufactime to recover, and one can expect that an overdependence on China for turing to revive, especially considering poor export prospects. Overall, one critical supplies in sectors like pharma, the disruption in labour/worker supply would not expect the economy to revive electronics, electrical machinery, etc. has witnessed recently. At the same time, it until the Q1 FY22. I would, therefore, created havoc in its manufacturing sec will not be easy to switch to automated expect air cargo to pick up around that tor, making it vulnerable to even shortprocesses where a major part of the work time. However, it will take much more term supply shocks.

Mo di’s ambit ious infr a projects have hit a snag

nfrastructure spending has been

Ia key priority of the Union gov ernment, which has been keen to use it as a lever to prop up eco nomic growth. The first half of 2019 saw a marked acceleration in pub lic spending on infrastructure projects. Budget 2020 followed it up by earmark ing `1,70,000 crore in 2020-21 to build new infrastructure assets, which is about 15% of the government’s budget for capital allocations.

However, if history is anything to go by, finishing these projects will be a big challenge. Time and cost overruns have become routine features and these problems are most acute in four sectors that account for a bulk of infrastructure projects in the country: road transport and highways, power, railways, and petroleum.

These findings draw from an analy sis of six years of data, covering two political dispensations, from a quar terly report released by the ministry of statistics and programme implementa tion (MoSPI) titled ‘Project Implementation Status Report of Central Sector Projects Costing `150 crore and Above’.

The latest release of this report was for the quarter ended September 2019. This shows 1,676 Central infrastructure projects under implementation. The headline number of this report is the amount of spending on these projects till date. The latest report shows that Rs 10,07,176 crore had been spent on these 1,676 projects so far.

From quarter to quarter, completed projects go out of this set and new proj ects enter it. Hence, the difference in this headline number from quarter to quarter can be seen as a proxy for new

and ongoing investments in infrastruc ture projects connected with the Central government.

Of the 24 quarters between Decem ber 2013 and September 2019, the quarterly difference was negative in seven quarters. In other words, even as this amount fell on account of completed projects going out of this set, invest ments in new and ongoing projects did not keep pace. This indicates issues in both planning and implementation.

There were also three quarters when new spending was brisk. Two of these quarters came in the first half of 2019, a period intersecting with the national elections in April-May 2019.

This was a big spending effort by the ruling dispensation to claw back the gains it made in execution of infra structure projects post 2014, and which it subsequently squandered.

The period before demonetisation (quarter ending December 2016) saw the share of central infrastructure proj ects facing time and cost overruns decline sizeably over 2013-14 levels. Time overruns fell from 46% of projects in the March 2015 quarter to 29% in the December 2016 quarter. Likewise, the per centage of projects facing cost over runs declined from 20% to 11.5%. But, in the latest quarter for which data is available (September 2019), cost over runs were back at 20% and time overruns at 35%.

The magnitude of these issues is greater in pockets of the infrastructure sector that matter more. The MoSPI report has a two-fold categorisation of projects by size: ‘mega’ projects (costing above `1,000 crore) and ‘major’ projects (costing `150-1,000 crore). Of the 1,676 Central infrastructure projects on the monitor, 28% are mega projects, but they account for 78% of the total spend.

The strain on account of cost over runs is greater in mega projects. While the cumulative cost overrun in major projects is 4.5%, it is 26.5% in mega projects. As a result, a greater share of mega projects requires a cost review and other special approvals compared to major projects.

The problem of finishing projects— in time and within budget—is also more endemic to sectors that drive infrastruc ture spending. Of the 18 sectors categorised as infrastructure, just four—road transport and highways, power, rail ways, and petroleum—account for about three-fourths of the total spending.

And these are precisely the sectors which struggle to finish projects.

Take road transport and highways. In the five-year period from 2013-14 to 2018-19, only 55% of the total awarded length of roads was constructed. It’s only in 2018-19 that the focus shifted from awarding road projects to com pleting them.

The railways which has the largest anticipated cost in the 1,676 open cen tral infrastructure projects in the database maintained by MoSPI is also struggling with finishing projects in time and within budget.

And it becomes a vicious cycle: such incomplete projects need more money to finish; unable to find it, they stay pending.

Behind the increase in time and costs are issues like the lack of central and state regulatory clearances, land acquisition, fund constraints, rehabili tation and resettlement problems of project affected persons all add to de lays, and increase the time and costs involved in projects. Unless these is sues are tackled expeditiously, it will be hard for the government to translate its big infra plans into reality.

Levera ging t he di gital revol utio in t he healt hcare suppl y chai n

n

What is clear is that disjointed supply chains, managed with multiple siloed systems, with point-to-point connections to select trading partners, and even hub-andspoke portals, are just not working. The healthcare supply chain is one of the most vital and complicated supply chains, carrying life preserving and enhancing products, from complicated manufacturing processes, across tiers of suppliers, layers of distributors, and warehouses, to clinics, hospitals, and consumers. Yet, it is one of the least connected and coordinated industries, creating hurdles, cracks, and friction at every junction. Adding to the complex ity, healthcare is one of the most highly regulated industries.

For instance, spikes in demand are not communicated across the health care chain quickly. Instead they’re batch processed serially down the line, link-by-link over time, until it’s too late to do anything about them. Supply quickly becomes out of sync with de mand, resulting in shortages of critical products at some locations and over stocking at other locations. Without this visibility and coordination, there’s no way to rectify the imbalance. Shortages occur, and patients and care providers pay the price.

To overcome this fundamental flaw, the first step is to connect all partici pants on a single network. Equipped with a multi-enterprise master data management system, the network helps normalise and harmonise the data across partners and systems and can auto-translate master data to enable the seamless communication of vital changes to all parties. The network maintains a real-time single version of the truth, synchronised across parties on the network and their systems. Vis ibility to information (inventories, orders, forecasts, and plans) and the ability to manage data and execute transactions is under the control of each organisation, and only they have the power to grant a range of permissions to their relevant trading partners.

From discord to coordination and transparency Implementing a single platform for all parties is revolutionary in healthcare. It transforms the serial, disconnected, and confused conglomerate of systems, into a single real-time ecosystem work ing in harmony to serve patients. Instead of passing data down the line manually or by batch processes, every one sees consumption and changes in demand, supply levels, and constraints as they occur. They can even see the logistics links in between. So, when a problem arises anywhere in the net work, the relevant parties can respond immediately. If a pharmaceutical plant goes down in Puerto Rico due to a hur ricane, the downstream network is alerted immediately, and the affected parties can assess the impact and switch over to another location or find alternative sources.

In today’s environment of high un certainty and variability, long-term planning must give way to more agile, responsive, and resilient supply chains. A real-time network helps by dampen ing all major sources of variability:

Reducing information and physi

cal lead times: In almost every other industry, a single, real-time network has emerged to remove information lags and provide visibility to actual demand, supply, and logistics to all participants. It enables them to identify and resolve problems faster, in concert and decisively. With real-time data

driving decisions, there is no need to pad estimates and lead times and the same can be done in healthcare.

Reducing demand variability:

With real-time information directly from hospitals, ambulatory surgery centers, clinics, and home care facilities, and with demand and order forecasts, all parties have a much more accurate view of demand and what’s coming. Manufacturers get early visibility to improve order forecasts, which can be adjusted in real-time as equipment and treatment needs change. Suppliers and manufacturers can also plan better to meet demand spikes in the event of an outbreak, and scale back down appro priately as demand drops off.

Reducing supply variability: With appropriate permissions, hospitals, clin ics, and distributors can see inventory and planned deliveries at all nodes and can even be granted visibility to produc tion capacity at manufacturers and comanufacturers. Suppliers can commit to meeting demand or alert their custom ers well in advance that they can’t fulfil, which allows customers to plan accord ingly and develop alternatives.

Toward patient/clinician driven supply chains Transparency across the global network, with data driven decision-making and patient/clinician driven demand, also enables supply to be rebalanced to meet demand so supplies can be shared among nearby hospitals and sites, or more remote locations. A net work approach significantly enhances resilience, because all parties get early warnings to projected stockouts and issues, and they have visibility to many more alternative sources of supply.

For example, clinics and hospitals can collaborate with adjacent facilities, distributors, and suppliers to execute their plans and source supply from the nearest and quickest available supply points. Inventory transfers can be au thorised, committed, and tendered to carriers, tracked in transit, and con firmed on delivery. Finally, artificial intelligence (AI) and intelligent agents can be used to monitor supplies, inven tory, and rates of consumption, shipment lead times, and so on to predict shortages and problems in advance. This provides network-wide, alwayson, precision monitoring, and alerting at a scale that is difficult, if not impos sible, to match with manual processes. These intelligent agents can also use machine learning to develop better ar rival time estimates for shipments.

Like Uber, which offers those in need of a ride many more options and quicker more efficient service, a net work connects those in need of a product or service (buyers), with the providers of that product or service. Think of it not as “ride sharing” but as “supply sharing,” and you will start to see the power of the network for healthcare.

Maximising resilience and securing the healthcare supply chain Another advantage of using a network approach is that products can be tracked across all participants and their jour ney—from source to consumption. Companies can use serialisation, prod uct authentication, and chain of custody services, to provide a digital passport for products flowing through the net work, documenting its journey from origin to destination. It also helps to protect the integrity of the supply chain, increase product safety, and secure pa tient care. This is especially important with sensitive products, such as biolog ics, which as mentioned earlier, require special packaging, handling, and condi tions to maintain their efficacy. It also supports full traceability, which is par ticularly important in regions where counterfeit products are a problem.

Serialisation and chain of custody services are also supported and are in

valuable in the event of a problem or a recall. They enable hospitals, suppliers, and distributors to identify affected product and remove it from the supply chain quickly, eliminating the possibil ity of using recalled products on patents.

Digital networks drive more efficient and resilient healthcare supply chains A network-based approach to the healthcare supply chain not only im proves resilience and supply chain performance, it also provides better patient care and lowers costs. Many time-con suming and tedious chores that occupy healthcare providers today, such as trying to calculate orders, can be opti mised and automated. This brings more precision to processes and frees up hos pital staff and care providers to focus on their patients. All this is enabled through the strengthened collaboration and greater information sharing be tween hospitals and their suppliers.

Healthcare providers, drug manu facturers, and medical device manufacturers do an incredible job of saving, enriching, and extending our lives. It’s time they had the support of modern technology to streamline supply chains, make their lives easier, and help ensure that life-saving products reach patients quickly, efficiently, and in optimal con dition. A real-time digital network enables that and more and may be the lifesaver needed especially when time is of the essence. By Dr Reddy Gottipolu, SVP Healthcare at One Network Enterprises