Labour woes, logistics gaps key hurdles to reboot plan
Firms unsure if they’ll have required workers to resume work
MUMBAI: Broken logistics and a crippling manpower crunch pose the biggest hurdles to resuming operations, multiple executives said, as the government weighs a limited restart of industries in a phased exit from the nationwide lockdown.
Even as many states have extended the three-week lockdown till April-end in an attempt to keep the pandemic under control, there is growing realisation that a controlled resumption of the industry is vital to sustaining livelihoods.
“Recovery of the (auto) industry is heavily dependent on the vast supply chain vendors,” said YS Guleria, director, sales and marketing at Honda Motorcycle & Scooter India Pvt. Ltd (HMSI), India’s second-largest twowheeler maker. “They are equally impacted by the various factors that are unprecedented in scale. It is going to be a challenge to immediately start the manufacturing operations and very difficult to ascertain the time by when it will be able to fully bounce back. Vehicle manufacturing is very labour-intensive and there is a large pool of manpower that has to report back at work for operations to resume smoothly,” Guleria said.
In a video-conference with state chief ministers on Saturday, Prime Minister Narendra Modi suggested the idea of a lock-in, with industrial, agricultural and construction workers housed in their own work zones. The Department for Promotion of Industry and Internal Trade (DPIIT) also wrote to the home ministry to let more industries operate with reasonable safeguards in the extended lockdown period. However, stranded trucks and missing workers could upend those plans.
“We are geared up, but the supporting things like packing materials, consumables, raw materials, transportation, everything has to cooperate and that has to be enabled,” said the founder of a speciality chemicals maker that manufacturers ingredients for cleaning, sanitisation and hand washing applications. Speaking on condition of anonymity, he said his company is currently operating at just around 30% capacity, having resumed partial operations from April 6.
“Supply chain is a major aspect which has to improve, whether it is getting raw materials from the port or transporting finished goods to customers across the country. This is something that has to smoothen out and we are hoping that it will happen fast,” the person cited above said.
Resumption of work in certain industries also depends on the nature of their supply chains, as some industries tend to operate in closely-knit clusters, while some have dispersed chains.
Last week, Mint had reported that truck movement has collapsed to less than a tenth of normal levels, citing All India Motor Transport Congress, an umbrella body of goods vehicle operators representing about 10 million truckers.
“Industries with supplier ecosystems in vicinity or in the same cluster could possibly operate at reduced levels but those dependent on cross-country inputs could see supply chain disruption,” said Sameer Bhatnagar, partner at KPMG in India. Thus, an industry-specific and planned approach could be one option for a structured way to resume industries, he added.
Smoothing out the logistics issues will need strong cooperation between the Union and state governments, said Vimal Kejriwal, managing director and chief executive officer of KEC International Ltd, the construction business of RPG group. “Logistics is an issue where there seems to be a gap between central government and local authorities. Most trucks are still stranded and very little movement is happening.
Logistics is a big grey area, where we honestly do not know how much time it will take for things to regularise. Today, my factories are full of finished goods; those have to be shipped out and we need to bring in raw materials,” he said.
While the Union home ministry has asked state authorities to allow trucks to move freely, a major challenge on this front is getting trucks that are stranded on the highways running again.
“State agencies could use the state transport buses currently lying idle to mobilise drivers to the trucks. Many drivers come from certain pockets and buses with social distancing norms could run on select pockets to meet the short-term requirement to get the wheels rolling,” said KPMG’s Bhatnagar.
Manpower is another pain point. With several migrant workers fleeing cities, companies are unsure whether they will have the required workforce needed to resume work at full capacity.