There have been significant disruptions to global supply chains since the onset of Covid, and these have been exasperated by the Russian and Ukrainian conflict. The increased cost of good movements and inputs as a result of oil price shocks has made an already erratic supply chain more expensive. Over the medium term, these supply chain shocks will contribute to affect the availability of finished products and ultimately affect not only finished imported goods but also where production houses are dependent on raw material inputs for finished goods in the country.

The global events have led to the infrequent and patchy supply of few products, and also in some cases, the containers are much longer than usual at port clearance. The consequent scarcity and unevenness in supply have also resulted in increased prices.

Managing the Shortage of Imported Products

Namdhari’s Group imports products from Europe, the Middle East, and Asia. Due to the shortage of imported products, the brand adapted strategies to keep the business operations running successfully.

“There are two prone strategies - in the short term, there is an increased inventory holding period for longer shelf life products and in the short to medium term, working on developing more domestic alternatives against imported products and reducing dependency,” Gurmukh Roopra, CEO, Namdhari’s Group said.

Le Marche Retail is working with vendors who are doing imports from countries like Australia, the US, France, Holland, Turkey, Germany, and UAE. It works in various categories for imported foods like baking flours, fruits & vegetables, beverages, concentrate chocolates, mints, snack foods, proprietary sauces, biscuits & cookies, and olive oils. The brand believes that the shortage can only be met through substitutes.

“We are looking at increasing our vendor base by partnering with a higher number of importers in case they have safety stock through which our needs can be met, look at alternate sources of supply – case in point being looking at different countries for sourcing of avocado, developing sources in other countries in partnership with our vendors or looking at worthy Indian substitutes as now the consumer is also preferring locally sourced products on few categories,” Nakul Anand, Lead – Category Management of Foods, Le Marche Retail stated.

Apart from offering substitutes, the brand is also in constant touch with its consumers to apprise them of arrivals as and when they happen at its stores for specific products. Going forward, Le Marche Retail is also planning to increase the imported products at its brand. “We are planning to increase the range in confectionery and cheese from Europe, jams & preserves from North America, HPC range, snack food from the UK, proprietary sauces from Thailand,” Anand added.

Modern Bazaar mainly imports from UK and USA. Products are also sourced from countries in the East, but these are through designated importers with whom it has long-standing relationships. “Our range of imported products is fairly robust and in most cases, there are alternatives available to the customer to meet his/her requirements. In case there is a shortage in a particular brand, we do have other brands of the same product available, possibly imported from a different market,” Kunaal Kumar, Director, Modern Bazaar asserted.

Ensuring Smooth Functioning of Supply Chain

The supply chain plays a very important role in ensuring that the brands are able to keep their shelves well stocked and meet customer requirements. In order to ensure the smooth functioning of their supply chain, the brands are taking various steps.

For instance, Le Marche Retail is forecasting sales to arrange the stocks in advance. It plans to buy some products in bulk quantity, so it can offer its customer better rates. The brand is also having tie-ups with logistics companies to arrange immediate supplies as & when products are available. Additionally, it is working with a lot of vendors/importers for different categories to maintain the range.

Meanwhile, Namdhari’s Group is increasingly being involved with the supply chain partners by creating more visibility across the entire value chain enabling better planning and movement, especially around imported products. There are conscious efforts to explore non-traditional or near-to-home locations for similar products.

Modern Bazaar, too, is constantly in touch with its suppliers to get first-hand knowledge on supplies and get an early heads up on any potential problems. “We ensure timely payments are made to them at all times, and this has ensured preferential supplies to us all through the difficult time,” Kumar said.

Solving the Future Problem of Logistics

Conscious policy in incentivizing the long-term development of more manufacturing within the country, from food products to textiles to electronics will have a tremendous benefit to the country. “However, these need to be matched with making our supply chain infrastructure much more efficient and robust, importing ports, rail and road infrastructure, investment in logistics and affiliated industries all need to work in tandem and encouraging more private participation in these areas,” Roopra stated. There are regional special economic zones that can encourage production for both domestic and export requirements which can overall aid the development of newer and better products in the country.

“Better port clearance mechanism and cold infrastructure cost optimization can also help iron out the chinks in the value chain,” Anand concluded.