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Historically, the growth pivot of any great economy comes from its industrial revolution. We saw the industrial boom in America in the early 1900s due to technological innovations and inventions. One of the underlying lifelines of any major growth phase of a country leads to a massive overhaul of the supply chain. 

Over time, global supply chains have seen enormous changes. The way we source, manufacture, and transport goods to end consumers is constantly altering—driven by a multitude of factors—but its criticality is only increasing.

Supply chain is critical, as it can improve performance across the two most important parameters for any company—customer satisfaction and profitability. Innovation in the supply chain can improve time to customers and also help improvise internal processes like sourcing, inventory management, logistics cost, etc. 

In the last two decades, we have seen major innovation across the supply chains in India—the recent trigger was COVID-19, which made “go-to-market” more hybrid. Earlier, corporate and retail consumers used to ‘go out’ to buy products—touch and feel, negotiate, etc., were a core part of the buying process. 

However, with business-to-business (B2B) marketplaces and ecommerce platforms emerging, we have seen go-to-market change completely for businesses and retail consumers.

Tech platforms are a major driver of the hybrid go-to-market. For example, a personal care product like shampoo—one could buy at a kirana store or a local chemist—is now available on horizontal marketplaces like Amazon, vertical marketplaces like Nyka, D2C on the company’s website, modern and traditional retail, and on quick commerce platforms like Blinkit and Zepto.

Similarly, B2B marketplaces are enabling large corporates and MSMEs to source products faster, with more transparency on quality and price. OfBusiness is into industrial goods from steel to plastics while Infra.market is a marketplace for construction-related products. With this trend, new smaller players are emerging that either cater to a particular location or a defined set of specialised products. 

Some key trends dominating the supply chain landscape in India are:

More organised sourcing

Players like Ofbusiness and Zetwerk have revolutionised how sourcing happens across the business value chain—true for large corporates and the MSME sector. They have created one of the largest B2B raw materials procurement and credit platforms and play across a range of products—from commodities like steel to specialised products like speciality chemicals.   

Automation

Manufacturing and warehousing automation has been on the rise. Large companies like ABB and Siemens are leading industrial automation, while new-age companies like Addverb, Falcon Autotech, and Difacto are also emerging. New-age companies like Indicold are revolutionising cold chain warehousing through advanced automated racking systems and more. 

Diversification of manufacturing/storage

The COVID-19 pandemic and some geopolitical events have shown the world how supply chain disruptions can cause massive shortages, inflation, and the need to reduce dependence on one location.

Accordingly, most companies are planning their supply chain to ensure multiple manufacturing and warehousing locations locally and across countries. China+1 strategy for most nations is an outcome of the need for diversification.

Faster deliveries

Change in consumer behaviour strongly influences supply chain planning. In recent times, we have seen the consumer’s inclination and preference change towards faster deliveries.

While quick commerce has paved the way for quick 10-minute deliveries, it has opened up opportunities for new-age companies that enable same-day delivery to customers.

These types of models are helping brands retain customers, reduce returns, and improve conversions. With this change, we are seeing the emergence of dark stores and new-age logistics companies enabling warehousing closer to customers (beyond the mother warehouses) and same-day delivery companies.

Technology leverage

In the supply chain, the beauty of tech is that ‘it is an enabler and not an eliminator’. Using tech to improve time and cost efficiencies and enable tracking and tracing has helped create a superior customer experience.

Express delivery has been there in India for ages, but Delhivery changed the segment by building a robust technology platform that defined the ecommerce supply chain. 

Integrated service providers

Last, but not the least, India’s supply chain is very disaggregated. Multiple smaller players—each operating across some part of the value chain—are creating multiple inefficiencies and increased costs. Today, companies are demanding end-to-end third-party logistics provider (3PL) services—a one-stop-shop for all their supply chain solutions. 

The need to simplify the supply chain as an industry is identified by investors, giving birth to focused funds, which are funding early growth companies in the supply chain landscape of India.

By leveraging its domain expertise and its network, such funds help partner companies navigate their growth journey. It is a key differentiating factor that can drive these early-stage companies to market leadership.

Ratna Mehta is the CEO and Managing Partner at Fundalogical Ventures.