Opportunity For Startups in Manufacturing, Logistics and Supply Chain

Over time, it becomes more and more dependent on imports from China. It has become urgent for the Indian industry to realize its potential
Opportunity For Startups in Manufacturing, Logistics and Supply Chain
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MD, Zone Startups India
6 min read
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The lockdown imposed in response to the COVID-19 pandemic had repercussions that echoed in every corner of India. Not a single household, farm, shop, office, or factory could escape. And the lockdown and the pandemic will have short-term and long-term impacts for all of us—the ‘new normal’ has become a much-used and abused cliché and, purveyors of doom and gloom abound.

As stakeholders in India’s present and its future behooves us to look beyond this miasma for the proverbial silver lining and work on re-building India to even greater heights. And just like a startup uses its own resources to start building, we also need to start by ‘bootstrapping’, and that is what being ‘Atmanirbhar’ (self-reliant) is all about.

Let us start by touching upon two of the lessons from the lockdown that are relevant for our discussion.

We have, over time, become more and more dependent on imports from China—from pharmaceutical ingredients to raw materials and base components of automobiles, chemicals, and textiles. Not surprisingly, this has now become an urgent wake-up call for the Indian industry to realize its potential and develop its own local sourcing units to become more resilient and adaptive. 

Next, our supply chain and the logistic sector have faced the biggest damage due to the absence of manpower, its most critical resource. And this, in turn, is due to the dependency on migrant workers who have returned to their native village leaving over 50 per cent of India’s trucking fleet stranded without drivers and as well as the logistic industry of cargo loaders and handlers.

In addition to this, the manufacturing industry has also been directly impacted due to the unavailability of the labor force as well as disruption in their supply chain.

In response, the government of India in its economic relief package has pushed for, among a host of other things, technological innovation through the usage of e-market linkages for reviving the manufacturing sector as well as trading of goods. Additionally, a budget of INR 1 lakh crore has been provisioned for upgrading agriculture infrastructure projects at farm gates and aggregation points; for championing sectors such as solar PV manufacturing and advanced cell battery storage, etc.; for indigenization of imported spares in defense production; and technology-based enterprise products catering to the industrial sector.

Positive outlook for tech startups involved in the industrial sector

Historically, startups have been at the forefront of technology adoption to improvise various processes and operations as well as bring innovation in products and solutions. They have disrupted various businesses and impacted almost all the industry sectors in some way or the other.

Even now, Indian entrepreneurs must capitalize on these developments. A great opportunity exists for tech startups to disrupt the traditional manufacturing, logistics, and supply chain sector using emerging technologies such as Internet-of-things, robotics, artificial intelligence, machine learning, blockchain, augmented, virtual and mixed reality, computer vision and other accepted technologies.

It is our chance to accelerate Industry 4.0 and not only reduce the dependence on China and manual labor, but to prove to the world that we are the next global manufacturing hub and a far superior one at that.

Here are some of the thematic areas that we should be the focus on

Digital manufacturing: World-over, manufacturing has come off the edge with the adoption of the latest technology to boost efficiency and productivity. To make manufacturing in India best in class globally, tech startups can contribute significantly by harnessing innovative technologies for example use of cloud technology and sensors for conceptualizing power and connectivity; application of big data and advanced analytics, artificial intelligence and knowledge-work automation; enhance human-machine interaction through virtual and augmented reality, robotics and robotic process automation; and additive manufacturing and renewable energy. Startups and manufacturing enterprises must collaborate for meaningful commercial impact.

Smart processes and systems: With social distancing becoming a norm, startups building automation systems in cargo, conveyor systems, machine monitoring tools, robotics, drones, and drop-boxes, among others, would have a huge demand going forward. A rapid shift towards omnichannel procurement is imminent. 

Logistics and supply chain: Indian startups can focus on digitalization of logistics, supply chain, and transportation by enabling core technology modifications such as Internet-of-things, blockchain, control towers, artificial intelligence/machine learning-enabled demand forecasting, self-adjusting stock allocations, autonomous devices such as AGVs and drones, among others. This will power the supply chain sector with intelligence, visibility, and agility.

Health sector: This sector has been contributing the most in the current times and is expected to grow further from hereon; we have witnessed a major contribution by startups who have very quickly adapted to the market requirement to deliver technology-based products and solutions. There lies a huge opportunity for growth in healthcare manufacturing and supply chain, apart from digital solutions. Applications of artificial intelligence, computer vision, IoT, and robotics-based startups have already started conceptualizing products and services. Bringing in innovation in the manufacturing of drugs, medical equipment, etc., as well as contribute to their research and development.

Food: Agri-tech startups need to accelerate the formalization and digitization of storage and warehousing, market access to farmers, Digi-visualization of sustainable agriculture best practices, digitalization of government scheme linkage, e-market of B2C and B2B platforms, cloud kitchen, e-retail, agri-equipment renting, Agri supply chain, forecasting using a drone, and many more. Food startups can use innovative technological solutions in the broad gamut of this sector i.e., food processing equipment and technology, packaging, food safety, and distribution.    

Green-tech: The care for the environment has increased during this pandemic period and it will continue to post the lockdown as people are becoming environmentally friendly and opt for eco-products. Startups can play an important role in bringing about innovative technological-based products and solutions in the recycling sector (plastic, MLPs, and paper), composting and scientific disposal of waste, clean and renewable energy, and many more. 

These are just some examples of the opportunities that have opened up. In the end, the post-COVID-19 scenario is an open challenge platform for existing and budding entrepreneurs to innovate, design, and implement technology-based business models to revolutionize the manufacturing sector in India and also make India the world’s local factory.    

Here is a quote by Ratan Tata in conclusion, “In past difficult times, entrepreneurs have displayed farsightedness and creativity that could not have been believed to exist. These became the flagpoles of innovation and new technology today. I hope that the ability to find another way to build a product, run a company, run operations a better way, will emerge as an outcome of the current crisis. I won’t downplay the challenges and the difficulties embedded in these current times. But my confidence remains high in the inventive nature and the creativity of entrepreneurs today who will find ways to enable new or modified enterprises that would be the benchmarks of tomorrow. It can all start on a clean sheet of paper that looks at ways of doing things that were never thought of before. This crisis will force entrepreneurs to adapt and create.” 

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