Getting supply chain back on track Godrej’s top priority: Vivek Gambhir

As economic activity stagnates due to the national lockdown in the wake of the crisis caused by the covid-19 outbreak, the 100-year-old Godrej Group is in talks with the government on how to overcome production and supply chain constraints for its FMCG arm Godrej Consumer Products Ltd (GCPL).

GCPL is awaiting government nod to resume factory operations, albeit with just about half of its manufacturing and distribution workforce, to ensure availability of essential goods and minimize the impact of the lockdown, both for the consumer and the firm.

Vivek Gambhir, managing director and chief executive of GCPL, said the lockdown has significantly impacted the FMCG sector and the covid-19 crisis may ultimately lead to the emergence of new products, a change in consumer behaviour and a shift in the market’s focus to health protection and hygiene. Edited excerpts:

How badly is the FMCG sector impacted?

Like all the other sectors, the consumer goods industry will also be significantly impacted simply because the markets have been shut down over the last 10 days or so. There has been no distribution in the market and consequently production has also been shut down. The extent of the impact will depend on how long this crisis persists. Within categories, the discretionary ones could get more impacted than staples in the near term. And we will also see new habits and changes in consumer behaviour. As a strategy, going forward, our first priority is to get the supply chain back on track, get production back and running and ensure availability of essential items. The focus is to resume production of essential items. Our first priority is to keep our team members healthy and safe. At this stage, availability takes precedence over pricing. In recent days, the supply chain has been disrupted. This is not a surprise, considering the unprecedented nature of the lockdown across the country. The government is well aware of the challenges and in line with its commitments to ensure uninterrupted supply of essential items, it is working closely with the industry to get the supply chain back on track. So, after a shutdown of a few days, we are ramping up our manufacturing and distribution again. This will be at a reduced capacity.

How will Godrej get production back on track?

Basically, we are working with the government to be able to get the necessary permissions required to start up some of our factories and get the permission to resume distribution. The permissions have been mostly coming into place over the past 2-3 days. The ministry of home affairs has revised guidelines to ensure production and distribution of essential items. All our team members working on the front line, in our factories, with our distributors and with our transporters are Covid Warriors, who are doing this in national interest and are serving our country by producing essential items. In line with government guidelines, we are committed to dramatically reducing the number of people involved in our manufacturing, warehousing and distribution by 50%.

The biggest challenge is to be able get adequate labourers to be able to come and work in the factories. We are working with the government there also to try and see what measures we can take to allow movement of workers. We are also working with our transporters to change the practice of two drivers per truck to one driver per truck, thereby reducing 50% of truckers. For those workers who need to travel, we are arranging private vehicles or company provided transport with not more than 50% capacity utilisation per vehicle.