Shortage of Workers, Trucks a Huge Challenge for FMCG Companies
Despite manpower shortage, there’ll be steady supply of essentials with stocks okay for up to 3 weeks, firms said.
The availability of workers at factories and trucks for transportation has emerged as the biggest challenge for FMCG firms in ensuring a steady supply of essential items during the lockdown, according to FMCG majors ITC, Dabur India, Parle Products, GCPL, and Jyothi Laboratories.
The companies said there is a need for reassurance from authorities for workers to return and resume duties while assuring that despite the manpower shortage, there would be a steady supply of essential items with stocks adequate for up to two-three weeks.
Addressing local issues in many states that have hindered the movement of goods would certainly help in kick-starting the functioning of the supply chain, they said.
“Our inventory level is comfortable at this point of time and we have 2-3 weeks of stock with us and we are quite hopeful of production to resume if the situation on the ground comes back to normal. Though we have certain concerns such as workers being stopped and migrated to hometowns due to lockdown,” Jyothy Labs Joint Managing Director Ullas Kamath told PTI in an e-mailed response.
He further said FMCG firms have a huge supply chain – from sourcing raw materials to transportation of goods from factories to warehouses, godowns to finally the retail market – which requires massive manpower.
"Since most of them are immigrants from other states, they have already gone back. The need for them to return is crucial and some assurance is required from the authorities for them to do so," Kamath said adding that "once the situation eases, we are hopeful that the entire sector will pull up towards revival".
Expressing similar views, Godrej Consumer Products Ltd (GCPL) Managing Director and CEO Vivek Gambhir said:
“The number of workers reporting to factory/distributor locations is still very low due to social pressure and safety concerns. Many difficulties are being faced in transportation, with a significant shortage of trucks.”
He further said, “Companies will need to work closely with government authorities to ensure adequate availability of workers and trucks to put the supply chain back on track. Alongside the district authorities will need to ensure that the required permissions are given quickly, ideally online.”
Dabur India Executive Director (Operations) Shahrukh Khan also said the key issue that still remains is the availability of manpower and workers to run these operations.
“With most workers either leaving for their hometowns or staying at home during the lockdown, it would be a challenge to ensure smooth functioning,” he added.
Sharing similar experience, an ITC spokesperson said, “While we have progressively obtained permissions in some states, availability of trucks continues to be the biggest challenge at the moment. Interstate and local truck movement has been severely impacted together with the challenge of shortage of manpower in factories.”
Expressing similar views, Parle Products Senior Category Head Mayank Shah said, “The biggest challenge today is manpower... The new challenge facing the companies now is how to continue running their plants in the absence of labour.”
Most of the labour in manufacturing plant are migrant workers. With them moving back to native places, there is going to be a huge challenge, he added.
On the ability of companies to produce to meet demand, Shah said that with 50 percent of workers allowed, production is being managed through shift systems.
“Quantum of production would go down substantially but the idea is to ensure that at least there is food available on the shelves and at no point in time, there should be any panic in the market,” he said, adding that there would not be complete absence of food for 5-6 days, even if any shop runs out of stick it would be available the next day.
Commenting on how soon the situation is likely to stabilise, the ITC spokesperson said, “We believe it will take a few more days for the entire ecosystem and processes to be streamlined for movement of essential goods.”
On the movement of goods, Khan said the situation has eased a bit with approvals for plant operations and movement of trucks coming in. “These have eased some of the big bottlenecks that the industry was facing for movement of raw materials, packing materials and finished products. It would certainly help in kick-starting the functioning of the supply chain," Khan added.
When specifically asked about the stock situation, the ITC spokesperson said, “In these trying times, it is critical to ensure adequate availability of essential food and hygiene products in the country. We have been working closely with state authorities and local administration to ensure that manufacturing and distribution activities continue uninterrupted with minimum people.”
The company’s effort is to ensure that consumers during these trying times are not inconvenienced on account of shortages and unavailability of essential products, the spokesperson added.
“We have redoubled our efforts to ensure a heightened level of precaution and have implemented strict protocols for safety, personal hygiene and sanitation in these select factories and for our salesmen and value chain partners,” the ITC spokesperson added.
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