Covid-19: FMCG suppliers take a hit due to lack of manpower, delivery vehicles

The 21-day lockdown has brought the FMCG sector to a screeching halt across the country. This comes when FMCG majors themselves are struggling to normalise operations that include supply chain management and get transport facilities back on track.

Industry sources, which include FMCG companies, distributors and retailers, told BusinessLine that reverse migration of workers have led to a manpower shortage, thereby impacting distribution and delivery of products.

Distributors are now telling retailers, including small shops and kirana stores, to arrange their own transport and delivery mechanism as they are either running on skeletal staff or are still awaiting clarity on distribution operations from local administration.

Ullas Kamath, Joint Managing Director, Jyothy Labs, said that there is an “evident challenge of transportation of products into the market due to the scarcity of workforce”. “Most of the workers are immigrants from other States. Their presence to smoothen the supply chain is crucial,” he told BusinessLine .

Many Bengal-based distributors claimed that there were no labourers to load products nor delivery people. “I have stocks of edible oil, atta, maida, sattu and besan in my go-down. But it is difficult for me to find people who will go deliver them to a kirana store. If they (kirana stores) have their own transport, they can come down and pick up the stuff,” said a Kolkata-based distributor, requesting anonymity.

ITC Ltd said it may “take a few more days” for the entire eco-system and processes to be streamlined for movement of essential goods.

Distrbution Chains Hit

The typical modus operandi across neighborhood stores and kiranas involve a representative of a distributor making inquiries with shops either on a weekly or bi-weekly basis. Supplies are made accordingly. Emergency shortages are met with calls being made to the distributor directly. Now all of that has stopped.

“There are no people who will run such shop-to-shop checks. Nor are their loading people, neither delivery bodies,” said a distributor. Dabur India points out that the scenario remains “challenging” and in a majority of places, “there is not much distribution happening”.

Grocery shops face shortages

Some kirana stores have closed down for the time being as supply of “fast moving items” have been hit. Even items such as bread, milk and eggs are available for a short window, early in the morning.

Some of the shopkeepers, who have downed shutters at the moment, claim that this will continue for seven to 10 days or until vehicle arrangements are made.

“We were not prepared for a 21-day lockdown. But after stocks depleted in the first two to three days, I decided to down shutters,” a shopkeeper said.

Many smaller shopkeepers say they are trying to arrange for transport, which include pooling-in services (for example three shopkeepers of a locality pitching in to hire one delivery van), but vehicles remain unavailable. Local authorities have issued e-passes (for vehicular movement) and many shopkeepers have applied in order to bring in supplies.

Companies Help Out

FMCG majors said that the absence of manpower is making normalisation of operations difficult. While factories still remain closed in some cases, there are instances were companies have made operational specific product lines depending on urgency of demand.

Adarsh Sharma, Executive Director – Sales, Dabur India, said he was in “constant touch” with those stockist points which are open and were supporting them. “We have also established a direct contact with retailers and are trying to service demand, wherever possible,” he said.

Jyothy Labs said it had a “comfortable” inventory level with 2-3 weeks of stocks. It is quite hopeful of resuming production as the situation improves.

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