Coronavirus crisis: How digital solutions can improve logistics efficiency | Daily News

Coronavirus crisis: How digital solutions can improve logistics efficiency

Digital solutions can provide visibility to stocks in the supply chain, helping to reduce panic buying by consumers and making it easier for the Government to manage the distribution and ensure availability, says Gayani de Alwis, chairperson of the Chartered Institute of Logistics and Transport Sri Lanka (CILT). In this interview she talks about the problems faced by the sector and how they are being overcome.

Q: As the head of CILT Sri Lanka how do you assess the manner in which the logistics sector is coping with the disruptions caused by the coronavirus?

A : We are seeing disruptions to every sphere of trade activities and people’s lives bringing much of the global and local economies to a grinding halt.  Logistics industry, which is part of the supply chain, is also impacted as a result. Even under normal circumstances, the supply chains that had structural issues will find them surfacing and compounding the problems. Lockdown style curfew, which hindered movement of people confined to their homes, meant that all their requirements had to be supplied to their homes wherever they are. Trade was not geared to face this new reality due to panic buying and due to hoarding of goods. Import and export trade had to be managed under curfew conditions with social distancing which led to disruptions in the operations. However, with the involvement of the industry and trade bodies, issues faced during the initial period at the ground level are slowly getting resolved now. However, the industry is still struggling with a backlog of container clearances due to a multitude of reasons, impacting port storage capacity, which is already stretched to its limits. Disruptions have brought about creative partnerships and micro-enterprises responding to the emerging opportunity using technology to deliver goods to peoples’ homes making use of the high mobile penetration in the country.

Q:  What are the main issues logistics services providers face?  How are you working with the government to sort them out?

A: Initially logistics was not identified as an essential service formally until the 26th March when goods distribution was included in the list and that restricted the movement in the industry during the first week. The task force does not have industry professional and private sector participation and in view of this, the industry faced practical issues during the implementation of some of these directives. Not all public sector officials had the required facilities to work from home to service the industry needs and only a skeletal staff was present with restrictive work hours in some of these offices.

Industry trade bodies have made representation to the governments to provide relief for storage and rent charges for cargo and all port and airport operators have responded positively. Initially, only essential and perishable items belonging to HS code 1-40 was allowed for clearance and later with the representations made by the industry bodes, general cargo was allowed to be cleared. However since the normal hours of operations at the port and airports and border control agencies are not in full flow due to the curfew, smooth operation is hampered.

CILT is involved with National Science Foundation (NSF) - initiated project with Postgraduate Institute of Management to improve the supply chain in food distribution in the country which is a national endeavor when Sri Lanka’s post-harvest losses are 40%.  We are also is in the process of initiating an “Ideathon” to overcome the supply chain challenges during and after the Covid-19 crisis. CILT has conducted a few webinars in partnership with others to create awareness on supply chain challenges due to this disruption to educate the industry and create a discourse. We have a global presence in 38 countries and we have best practices that we can learn from other countries which we hope to share with our membership and industry. We will also shortly be starting e-learning programs for our membership.

Q: Can you explain why shops and supermarkets ran out of stock when they were supposed to have disaster recovery or contingency plans? Were they overwhelmed by the sudden spike in demand and supply chain disruptions caused by social distancing measures and movement restrictions and non-availability of enough staff?

A: All Evolved organizations have their own disaster recovery and Business Contingency Plans (BCP). However this is a once in a lifetime event that none expected. No company’s BCP will cater to such an extreme situation. Having said that we have seen the consumer behavior, which led to panic buying, was triggered mainly due to the uncertainty. Also in view of the criticality of the situation, to prevent the spread of the virus the government authorities enforced the lockdown like curfew. This resulted in shortage of staff and delays in stock replenishment. Also with supermarkets and shops on-line orders were mostly for expatriate community and few locals, hence the system was not tested to cater to a spike in demand which tested the bandwidth for online orders and last-mile delivery services were not amply available during the curfew period.  With operational issues faced by the big supermarket chains and shops, small-time vendors in the localities stepped in to provide home deliveries with better service efficiencies. However, gas deliveries got their act together much earlier than the other players as they were more seasoned players managing the last-mile deliveries to homes.

Q: There must be enough food being produced. Could you give an idea of availability of stocks at different stages of the supply chain, such as how many days of supply at distribution centers and other links in the chain?

A: End to end supply chain visibility on stocks is not prevalent to all stakeholders. We hear that there is a bumper harvest of fruit and vegetables and paddy. However due to curfew and inter-district travel restrictions, delays are encountered to bring the produce to the markets. The market is expected to have shortages in rice in view of non-functioning rice mills. The Government therefore declared rice mills an essential service. I am unable to comment on the stock situation as I have no visibility but we may have to rely on government communications. If there is a digital solution to provide visibility to stocks in the supply chain, the panic buying by consumers can be reduced to a greater extent and also the government will find it easier to manage the distribution and ensure availability based on the off takes.

Q: Should competition laws be relaxed and more co-operation/ collaboration allowed between private sector logistics providers and suppliers of essential items like food and medicine to share resources and optimize planning and delivery to ensure smoother supply as the UK has done?

A: From a commercial point of view there may be challenges, but collaborating in a crisis situation is the best way to overcome the current issues faced by the consumer. If suppliers and logistic providers are collaborating in the interest of the public then I do not see they are violating any competition laws. The government and the regulators must closely observe and intervene during any abuse.

Q: Which sectors are most affected? How have the main exports like tea been affected by this crisis – by disruptions to local movements, international shipping and border and trade controls?

A: Tourism and leisure related industries are the worst hit. Sri Lankan Apparel exports are mainly to US and Europe and the industry has been impacted due to buyers cancelling orders and the slowdown in the high-street retail sector in these markets. Export industry is impacted due to slow down or closure of manufacturing operations and due to logistics issues in view of movement issues due to the extended curfew period. However, the Government allowed tea plantations and agriculture producers to function during the curfew period and after 137 years, the oldest tea auction in the world managed to conduct an e-auction which is quite significant. Exports are also hampered due to working hours and staff availability in government agencies, short banking hours, and driver shortages due to strict quarantine rules during inter-district travel. As per Moody’s Covid 19 heat map most industries will have an impact in the short to medium term except for food, pharmaceuticals, online retail, transportation and logistics, packaging, waste management, telecom and internet service providers.

Q : What technology changes can help at times like these?

A : Wuhan demonstrated with a very strong lock down how the technologies were used in overcoming the situation as well as supporting the life of those 11 million+ who were locked inside their homes. The use of ICT technologies was vital.  Artificial Intelligence too was integrated.   China was very strong with remote technologies and demonstrated that capability to manage the crisis.  Supply chains were empowered with all these technologies.   Service supply chains were at a very high level of efficiency.   These technologies were evolving and were poised to take over before the virus and in many ways the virus provided the perfect stage for testing. The sheer scale of the condition demands interventions at scale and only these can fulfill the task, be it RFID tags in Hong Kong, mobile apps to track and trace in South Korea, China and Singapore, drones for surveillance in the UK, Spain, France, and India, and disinfection in Abu Dhabi, use of robots in hospitals, 3D printing, and ATMs for free issue of rice for the poor in Vietnam, digital solutions through an app to give visibility on stocks to prevent panic buying in Taiwan and facial recognition in China.

Education industry has made rapid transition to distant learning management systems.  It is quite likely that these changes will now stay as a hybrid option.   Companies have resorted to working from home (WFH) to ensure social distancing and to comply with government-imposed lockdowns and curfews. Time-consuming meetings are taking place remotely and both the traffic and the environment benefit from the same technologies.   When you get accustomed to do work differently, some situations are definitely more productive with the use of technology and hopefully these will get embedded as standard work practices post-Covid pandemic.

Q: What should be our post-Covid19 recovery plan?

A: Post-Covid is more likely to be a slow opening up.   The emerging situation is also likely to be a new normal than resurfacing of the pre-Covid past.   Actually one should be keen to operate from a new playbook than doing the same.   Different countries will be in different phases when we consider reopening.   As China showed the initial intent was to open up the national supply chains.  What is now happening from China are humanitarian missions to different countries.    The learning and experiences should not be pushed aside but embraced.  We knew how to make more-from-less during the Covid times and these are very important lessons.

We may have not at ground level seen much of Fintech but these are very likely to factor in the recovery phase.   One important aspect is what one does today is going to shape tomorrow.  Hence some deep attention must be given during these times to plan for the recovery too.

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