As the Naxal menace is deep-rooted in the country, consumer goods companies face tremendous challenges in their supply chain system. However, customised delivery models are said to have reduced losses to companies, resulting in minimum 'roadblocks'.
Mukesh Singh, a distributor in Dantewada district of Chattisgarh, gets FMCG goods of a company every Wednesday. While he was waiting for the supply of goods which was supposed to come from Kanker, there was a landmine blast that rocked the highway near Bastar. The goods were stuck for few days and he could not get them for over a week, as the supplying company delivers its goods only on certain day in Dantewada. This has been a recurrent problem in the Naxal-infested areas of the country.
According to a Planning Commission report on left wing extremism, 233 districts across 20 states were reported to be battling with this problem. As Naxalism is a deep-rooted problem in half of the county, goods delivery system in Naxal-affected areas has to face a lot of challenges.
Incidents like land mine blasts are a regular phenomenon in Naxal-affected areas in the country. Sometimes, logistic trucks are looted or burnt by the reds, causing financial losses to the consumer goods companies. In such circumstances, the goods delivery system of FMCG and consumer goods companies gets derailed. Sometimes, goods are stuck on the highways for many days. If any kind of loss happens with the goods on the route to distributors, it is finally transferred to the consumers.
If violence takes place in bigger scale, all the transportation networks get jammed for couple of days which affects the delivery of goods to the distributors. Thereafter, distributors face shortage of goods which lead to unnecessary price rise and the consumers have to pay extra sum of money.
A supply chain official of fast moving consumer goods company, Marico said, “ Few years back, a logistic truck, which was carrying consumer goods, was burnt by the Naxals which led to a revenue loss for the consumer goods company.”
Most of the consumer goods and FMCG companies have their own specialised delivery system. They deliver in 6 days in a week. Every day is dedicated for a particular route. “In any Naxal-affected area, if any kind of violence takes place, it means, that route is disturbed and the goods can be delivered to that particular route in the next week in that particular day. In a single route we cater to approximately 50 distributors. The distributors in that particular area can face shortage of goods for one week. In these circumstances, they have to wait for one more week to get the goods,” the Marico official said.
Last Mile Challenges
Most of the companies apply the same models for their distribution network. To reduce the challenges, all supply chain companies can deliver their goods through the same route in a particular day, and for this additional security forces can be deployed along that particular route. Thus chance of loot or violence in that particular route may be reduced and the delivery of goods can easily be done.
According to the experts from the industry, there is a need of grass root change in the system which can ease out the problems. Prof. PS Sali Panicker, Director, Institute of Rural Management, Jaipur, said, “There is a small disconnect in the approach of corporate houses. In difficult terrains like Naxal-infested regions of the country, the best way is to rope in people from their own community. In these regions, Kerala’s decade old Neighbourhood Group concept will work well, where people in Tribal hamlets sell their products to their neighbours and that theme gradually picked up and is now a good marketing concept.”
He also added that people in these areas are not well endowed with money, so ensuring their income, would also help in penetration in these markets.
A collaboration between the policy makers and consumer goods companies in order to minimise challenges in Naxal-infested areas of the country with grass root changes need to take place. The industry needs to apply similar and collaborative models in their supply chain system which can ease out the problems, including financial losses, safety of human resources and supplying goods effectively.