Updated: April 1, 2020 9:34:36 am
Shelves in stores are gradually emptying as pre-lockdown stocks run out and replenishment is a big challenge as labour migration poses fresh hurdles across the supply chain — from the manufacturing stage to last-mile delivery.
This is the growing concern among key players in consumer goods, from FMCG majors Dabur India and Hindustan Unilever to wholesaler Metro Cash and Carry and a slew of stockists and retailers.
There is a sudden dearth of labour: be it for loading and unloading trucks to managing warehouses, taking supplies from distributors and moving goods to the retailer.
On top of this, is the fact that production is projected to take a hit due to shortage of labour and raw materials.
Besides labour, the other key break in the supply chain has been the transport lifeline – thousands of trucks stuck in jams at semi-sealed border entry points. Result: raw materials, too, are in short supply.
“Shortly after the partial lockdown was announced, everything came to a complete stop. There was no raw material available even for basic items as biscuits and other eatables. We had some raw input stock for disinfectants, handwash and hand sanitisers but we ran out soon as we ramped up production,” said a senior executive at Hindustan Unilever. The largest FMCG player in the nation is unlikely to restart production or supply of its non-essential items anytime soon.
Over 75 per cent of dal mills are inoperative due to unavailability of labour and supply of raw material.
Companies like Dabur India and Nestle are facing shutdowns and labour issues. “We are deploying special buses to help our workers and staff reach manufacturing units for producing essential products. However, availability of raw material and packing material continues to be a challenge with the restricted movement of trucks and this is hampering quick start-up of production,” Shahrukh Khan, Executive Director-Operations at Dabur India, told The Indian Express.
FMCG companies also flagged the lack of communication between the Centre, states and the local administration as another factor delaying normalisation. “Proper implementation of guidelines would ensure seamless movement of raw materials and finished goods. There is a similar issue being faced at ports which is hurting smooth movement of imported raw materials and exporting of finished products,” Khan said.
Nestle India said that manufacturing and distribution at the company’s factories and warehouses had been either scaled down or suspended.
At the wholesale level, companies such as Metro Cash & Carry have seen attendance levels fall to 50 per cent over the last few days and plummeting footfall by retail customers.
“We have a stock of all essential food items – rice, dal, atta, at our stores for next two weeks,” said Arvind Mediratta, MD & CEO of Metro Cash & Carry India. “We will eventually witness shortage in pulses and whole spices as these items are largely transported from states like Rajasthan, Gujarat and Madhya Pradesh which were restricting movement of goods.”
Also hard hit has been the pharmaceutical sector. “We’re seeing a shortage of some Vitamin C and multivitamin brands on the medicine side. On top of this, the supply of brands like Whisper, Dettol and Savlon, Nanpro, Cerelac and even Dove shampoo in our store is all we have left, because we’re not getting any more stocks of these products,” said D K Chaudhary, pharmacy manager of Delhi-based Globe Medicos.
The situation is dire in smaller towns where supplies take longer to reach. In western UP and Bihar, where the district administration has identified and nominated shops to continue supply of essential items such as pulses, rice and wheat, there has been no supply for the past one week, several shopkeepers told The Indian Express.
On the ground, the trucks wait for relief. Kultaran Singh Atwal, president of All India Motor Transport Congress, said that many truck drivers have fled to their homes fearful of contracting the disease and of the hold-up at the border. “Outside every state checkpoint, hundreds of trucks are stuck,” he said.
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