Best Practices in Inventory Management to Make Supply Chains More Agile During Covid19 Pandemic

1. Best Practices in Inventory Management to Make Supply Chains More Agile During Covid19 Pandemic Even as the contour of the Covid19 pandemic continue to evolve causing supply chain disruptions for business enterprises from a wide spectrum of industry verticals, key lessons and best practices in inventory management are emerging. While shortage of staff and constraints on mobility are two major factors affecting the agility of supply chains, it makes enormous good sense to assert that enterprises that have invested in creating an agile warehousing network are emerging as being better prepared to resolve the challenges both during the lockdown and moving forward during the gradual but imminent relaxation of the social distancing measures as provided in the revised guidelines issued by the Ministry of Home Affairs, Government of India. What Makes Inventory Management Critical During the Covid19 Pandemic? Prima facie, there are two aspects to the challenges posed by the Covid19 pandemic and the ability of business enterprises to rise to the challenge; force majeure and differential rates of growth of the pandemic. Impact of Force Majeure Events on Availability of Inventories of Enterprises First it is perhaps one of the biggest force majeure events to have ever hit supply chains of business enterprises in India and the world in a very long time. It has led to suppliers, logistics partners and warehousing service providers digressing from status quo due to lack of scale and agility to respond. Business enterprises that have routinely focused on building reserves of buffer stocks of raw materials, intermediate goods and finished products and have made the right decisions of collaborating with the best warehousing companies in India have been somehow able to weather the storm thus far and are positioned to leverage the first mover’s advantage as the lockdown restrictions are gradually liberalized. Differential Rates of Growth of the Pandemic Across Geographies and Local Lockdowns Second is the aspect of geographical spread of the pandemic across the world and the country. It may appear to be subversive if not paradoxical that geographies that were touted as epicenters of the pandemic have been able to recover albeit not fully while other geographies are now going through different stages of the growth curve of the pandemic. This implies that the rates of growth of transmission of the virus and its consequent effects on the supply chain have obeyed a law of time lag demonstrating diverse scenarios across geographies during the same time period. As such some of the leading business enterprises across industries and the best warehousing companies in India that have a geographically diversified footprint of stocking points and PUDO (pick-up and drop-off) centers are better positioned to stay afloat in the wake of supply chain disruptions. Best Practices in Inventory Management from Warehousing Companies That Are Enabling Agile Solutions In the wake of the overwhelming lockdown measures in India and the rest of the world in the recent days and the revised guidelines of the MHA in India to enable more industry verticals to resume operations albeit at sub-optimal levels, it is vital that warehousing companies in India make measured

2. efforts to strengthen their collaboration with business enterprises in the domains of inventory management and warehousing. Here are some best practices based on the 5S methodology: Spread First, the best warehousing companies in India are continuously diversifying the geographical footprint and expanding it. A diversified footprint of warehouses is enabling them to serve the requirements of business enterprises as localities get demarcated into green, red and yellow zones with the latter two signifying hotspots and containment zones. Sort Second, the top warehousing companies in India routinely sort inventories of goods while identifying one place for one category of goods or SKUs, thereby making it easier for them to act fast in identifying essential supplies in the warehouses despite being constrained by a shortage of staff. This is enabling them to save time, reduce inaccuracies in dispatch of inventories and age tracking of perishable goods. Shine While the National Disaster Management Act, 2005 that has been brought into effect since the announcement of the lockdown makes regular sanitization mandatory, those warehousing companies that have standard operating procedures in place to routinely monitor, clean and sanitize warehouse premises, screen their staff and identify the entry of external visitors to their premises are finding it easier to ensure compliance. Standardize While logistics and warehousing functions in India continue to be labor intensive, those warehousing companies that have invested in the creation of digital supply chain infrastructure have access to clean master data, have insights on essential and non-essential inventories on their finger tips and are well positioned to repeat best practices and steer clear of errors emanating from instinctive judgments on moving inventories. Scale It goes beyond doubt to suggest that those warehousing companies that own and operate physical infrastructure of industrial scale are now able to accommodate and serve business enterprises better. Not only does a greater scale allow for holding of greater volumes of inventories, but also reduces the effective landed costs of products by affecting the unit economics. On a concluding note, it makes good sense to assert that the implementation of these best practices of inventory management is not only critical to business enterprises during the ensuing lockdown but shall prove to be a source of strategic competitive advantage to business enterprises once the markets come roaring back when the economy shall take the road to recovery.