Jasjit Sethi, CEO, TCI Supply Chain Solutions

Ja sjit Sethi The industry and stakeholders should attempt to consider the transformation in the aftermath of the coronavirus outbreak through a positive lens in order What you consider as the top 3 challenges the industry is currently facing? First and foremost is the ‘re-jig or relook’ at the supply chain from source to consumption, ensuring sustainability. Next are the regional and local is to improve supply sues due to restrictions in the form of chain and logistics containment zones and fluid situation. management so While it has not impacted TCI, the mi as to provide highgrant labour exodus is a big issue for value and even more many organisations. outstanding services Overriding above all of this is the to the society, since it fact that COVID-19 is touching 3 million has now been made cases in India, and the situation is far abundantly clear that from plateauing off. supply chains are the veins of an economy. What are the best- and worst-case In an exclusive scenarios, and is your business conversation, Jasjit adequately equipped to cope? Set hi, CEO, TCI The best and worst case scenarios deSupply Chain Solut ions reveals to Upamanyu Borah, about identifying new alternatives to build, diversify and reorient supply chain and distribution pend from company to company. Those who are playing a catch up game will continue to struggle. For example, while we did not know the depth and length of the lockdown situation, TCI was much ahead of the curve and had done scenario analysis capabilities which before the nation-wide lockdown was will represent an announced. We had the necessary infra important component structure in place supported by secure of the strategies processes for awareness and precautions to build resilience around COVID-19. During the lockdown, against future we ensured our employees were safe and disruptions, while in-station and our truckers were with constantly innovating their vehicle while arrangements for their products and food and shelter were monitored. We had processes. created quarantine rooms in all our staff mess across the country as a precaution ary measure. Those who are playing a catch up The motive in our plans towards deal ing COVID-19 disrupgame will continue to struggle tions was facilitating business continuity for our clients in a way taking care of all the stakeholders in

You are a thought leader in the tional and international borders, have the ecosystem. We closely planned with supply chain scenario. What made organisations to consider reshap every single client to deal with the situ are the perceptible changes ing their supply chains, relook at wareation in ways relevant to their business you have found in the mind house network, and possess higher vertical. We ensured smooth movement set of the customers in recent times? safety stock to deal with similar supply of essentials during the lockdown. Our COVID-19 related disruptions have chalchain disruptions in the future. planning for the first three months of lenged many status quos. We can also see a visible increase in this financial year was good, consider

More than ever, clients are now ac the interest of organisations to outsource ing our emphasis on keeping our netknowledging logistics as a key enabler their logistics operations and re-engi work active and working. rather than viewing it as a cost optimisa neering of their supply chain network While the surge in demand is an tion domain. The sudden economic lockwith support of stable 3PLs with a sound outcome of the economy opening up down, affecting movement across naecosystem. with each industry on different rebound

timelines, the best case scenario is that logistics continues to function and re mains an enabler. The worst case is breakage in any part of the chain due to any of the factors mentioned above.

How should we organise capital investments plans in light of unexpected shocks to revenue and potential permanent changes to the usage of transport networks? While being mindful of the current financial health, capital investment plans should be part of long-term strategy.

Shocks like COVID-19 cause demandside issues which eventually turn to supply-side bottlenecks. Hence organisa tions would do well if they keep their plans in place with setting a deferment period, keeping in mind that y-o-y levels may be similar in Q3 and Q4 of this fiscal. In the post COVID-19 scenario, experts believe the standards that are required both in terms of handling of cargo and personal hygiene of truck drivers will improve. Does this indicate there will be more automa tion coming into the entire supply chain for handling of cargo in a multimodal network? Hygiene standard improvements are imperative. With physical distancing norms in place and when industry is facing a labour crunch due to migration, dependence on automation will defi nitely help.

I certainly believe that automation now will be a business continuity con sideration along with commercial consideration to accommodate for operating during unprecedented circumstances like today. To avoid any possible spread, the inkling is towards reducing the num ber of touch points in handling of cargo, thus automation becomes crucial here.

With above, palletisation of cargo throughout the supply chain will im prove to facilitate automated handling that shall ultimately contribute to lower handling time and cost. Incorporation of conveyor systems, robotic handling, use of drones, etc. is also expected to catch momentum.

On the brokerage side, things like spot market rates and volumes are doing well. How do you view that situation? Current situation is quite volatile as COVID-19 hasn’t settled down, it is con tinuing to impact supply chains in clusters across the country. Till now, we have seen a balance in volume produced by OEMs and availability of trucks and manpower. Overall, there is no supply–demand gap barring few industries. It is just that impact on freight rates have come up due to the abrupt surge of fuel prices in the last few weeks.

In the near future, we don’t see any sharp increase in spot market rates, even though there might be some temporary gap in demand and supply.

What is the current scale of operations in your transportation and warehousing segments? Our warehousing operations are almost back to what was pre-lockdown. How ever, in transportation, currently, we are having a fleet utilisation of 50-70 per cent. There has been a gradual increase month on month, and we expect to be back to business as usual by Q2.

Our warehousing operations are almost back to what was pre-lockdown. However, in transportation, currently, we are having a fleet utilisation of 50-70 per cent.

Your business operates on an assetlight model. Has that helped? At TCI, we adopt an optimum asset model. This has definitely contributed in maintaining stable profitability over the years. In general, it helps in minimising the cost incurred as well as efforts on maintenance. For vehicle fleet, apart from the ones we own, we have longterm vendor partners, and we give equal focus on fleet utilisation of both (our own and vendor-owned).

Is there a way to roll up the biggest challenges facing warehouse/DC operations considering this new environment? We have to learn to live with this ‘new normal’ and build our processes accord ingly. Close monitoring of hygiene standards are needed, but accessibility of safety and hygiene infrastructure to everyone in the ecosystem has to be first ensured.

The need for essentials and warehous ing got widely proven during the crisis. Warehouses across the supply chain spec trum kept the nation running and replenished the necessities in a timely manner, although the challenges were plenty.

Physical distancing norms are put ting extra strain and working hours have gone up. Therefore, relaxation in wage rules on working hours can be worked upon to manage productivities.

A collaborative approach is needed to create quarantine facilities in each ware house facility or logistics parks to build a safety ecosystem, ultimately contributing to the confidence of the workforce.

We have to seek areas of optimisa tion by using ‘Machines over Men’ to meet the challenge of productivity while maintaining physical distancing norms and reducing the number of touch-points inside warehouses or fulfilment centers. Do you think there will be consolidation in the industry? What measures are you expecting from the government? The logistics industry at large still remains unorganised in nature. The cash flows of many small players were grave ly impacted during the lockdown and the dwindling production volumes in many sectors with uncertainty of return to complete normalcy have endangered the survival of these players. In such circumstances, consolidation can be seen around the corner. However valu ations would need to be realistic.

The expectations from the govern ment are balanced and more procedural than SOPs. These are:  Extension of the validity of docu ments for warehousing and trucks till the end of this year as business have suffered due to low throughput.  Reining in the Inspector Raj in vari ous departments (Labour, RTOs) and moving to electronic modalities, which are possible with E-way bill and online PF/ESI.  Reducing the licenses and documents for operations by removing overlap  Passing on the benefit of global crude prices to the industry instead of profiteering from it.  Overall, it is a golden chance for the government to prune departments and go for a quantum leap in digiti sation, besides removing rules where unethical practices have fos tered overtime.