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Procurement Transformation vis-a-vis Financial Crisis Repercussions

Pandemic. Lockdown. Paralysis. Stranded guests. Pharma needs. Government rules. Budget cuts.
While most Indians went into lockdown and many of us started working entirely from home, this was not an option for procurement managers, who had to redouble efforts to source all things necessary at a time when some essentials were no longer being manufactured or transported.
How did they pull this off?
What is the new face of procurement?
What lessons did they learn?
How has procurement changed for the foreseeable future?
In this series, senior procurement heads share their experiences for the benefit of countless others across the country, who are working tirelessly to ensure that every need at every facility is fulfilled.

Keeping the engine running

Because of the pandemic, the last six months have been a nightmare for all production units, be it sourcing raw material, logistics or dispatching the finished goods to the customers. It has been particularly taxing for the pharma industry, because it was very important for them to keep operations running for the protection and well-being of humanity against any kind of diseases. No-one could have predicted that life would come to a standstill so suddenly.

Procurement was now required to also look into the supplier’s supply chain and resources. How long can the supplier continue with his current resources? Are his suppliers able to deliver and if yes, for how long? Is logistics and transportation going to be smooth? Air imports were completely stopped, with no international flights allowed to land in India. Maritime imports were getting impacted due to lockdown, the limited resources at ports, and ports starting to get congested.

The government was cautious enough to have clear guidelines about how essential industries should operate. There were detailed government orders from central as well as all state governments to ensure that all the essential commodities-related operations did not stop under lockdown. But still, at the beginning of the lockdown, trucks carrying essentials or pharma goods also faced issues on the road. But with the passage of time, the understanding of how essential goods need to be transported became clear, and the issues reduced. Movement of goods became smooth.

Another aspect of this time was the human one. All said and done, for all of us, this was the first ever time in our lives that we have seen such a pandemic which has spread across the globe, and nobody had a clue about what is to be done or what is going to happen. Government issued orders to allow essential commodities, but the human factor was important to run these operations, to drive trucks, to work on seaports and airports. Everybody was afraid of the pandemic and didn’t want to come out to work and rightly so. In the beginning of lockdown, the general thought was ‘getting out is getting sick’. Mobilising manpower was a crucial challenge for everyone.

Machine maintenance and consumables was something  that were least pondered upon, as nobody thought that the situation would continue for six months. Suddenly, after being continuously run for some months, machine maintenance and spares requirement popped up, and consumables started getting exhausted. This was the time when I believe procurement would have just started to take a breath of relief after setting up the raw material availability under the pandemic situation. Now started the run to arrange for spares and consumables so that the machines keep running without issues. Nobody had thought machine spares or consumables supplies should also be falling under the essential category, as they supply to the manufacturers of essential commodities.

Hiren Dani, Head – Supply Chain Management, West Pharmaceutical Services India

Packing materials like carton boxes, BOPP tapes, stretch wraps etc are never thought to be essential commodities. But how can any essential commodity manufacturer complete production and dispatch without these items? Representation and explanation to the authorities to include and allow operations for these packing material industries was an added challenge.

Yes, it was a challenging period of six months and I believe the challenges are still not over. But we have learned a lot during this time. Things have not improved, and the number of cases has only increased. We have no sight of any vaccine yet, but life has moved on. Business is coming back to normal as it was before March 2020.

Supply chain always finds daily surprises and innovates ways to get out of any tricky or critical situation to ensure that the operation continues, and business does not stop. The COVID-19 outbreak poses a risk of life to the entire community, a risk of business stoppage, a risk of economic breakdown, and a risk of global recession, but we have finally learned how to swim in the ocean of this pandemic.

Hiren Dani,
Head – Supply Chain Management, West Pharmaceutical Services India

 

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