Dhawan has stressed on the role of efficient supply chains for businesses and said that manufacturing-dominated sectors are plagued with examples of blocked working capital at different production stages, which hurts firms’ profitability and competitive positioning across markets.
Manufacturers increasingly realise that an efficient domestic supply chain is critical for making them competitive both domestically and globally, she told ET Digital.
“If you look at the manufacturing sector, there is a cost associated with how we manage inventory. Any company you talk to, whether from auto manufacturing to pharmaceuticals, there is a large percentage of working capital lying blocked in the Inventory of finished goods or raw materials. If this is managed well, it would help not just in improving firms’ liquidity but also in turning them profitable. Since it would result in no money lying stuck in the inventory,” she said.
She added that India needs to be cost-effective and efficient in manufacturing, especially in the face of stiff competition from Vietnam, China and Bangladesh.
Asked what in her view is the key challenge limiting SMEs and startups from going global, she cited the lack of adequate funding as the mother of all reasons. “It’s all about how much capital an SME can get. You need money to go global and set up operations. You need to have a different kind of focus to create a company that grows globally,” she asserted.
She maintained that regulatory and compliances issues faced by SMEs on various fronts are not the main reasons hurting their global ambitions. According to her, India, being a vast market, offers tremendous opportunities for businesses to grow and subsequently scale up globally.
Neelam Dhawan, board advisor, Moglix
Citing the example of Moglix, she said, “Manufacturing is expected to be a trillion-dollar economy by 2025. If you look at the market for a supply chain platform within this, it’s close to $300 billion. Now assuming opportunities in the digital supply chain to be at $100 billion out of it, it certainly is a huge opportunity. Indians have started technology adoption quicker than other countries, leading to foreign players vying to invest. Our ability to use technology is far better than any other country. Increasingly, people think if they have only Rs 100 to spend and see an opportunity which is as big as those in India, they will first put it in India.”
Talking about her new role with Moglix, she added she aims to help the B2B supply chain firm scale up globally. “Moglix is focussed on helping manufacturers scale-up and manage supply chain better. With the country today focused on ‘make in India’, the firm is uniquely placed to make a difference by helping manufacturers with its right set of solutions,” said Dhawan.
India’s supply chain landscape, though, is one of the largest globally, remains plagued with a host of traditional shortcomings. It’s marred by an unbalanced logistics model mix, high indirect costs, poor infrastructure, fragmented networks, and lack of technology adoption, says a recent report by CII-Arthur D. Little India.
India needs to effectively bridge the competitiveness gap of $180 billion vis-à-vis the supply chains of advanced nations, the report said, highlighting the need to build a technology-enabled, integrated supply chain.
Founded in 2015 by Ex-Google employee Rahul Garg, Moglix offers digitally-enabled supply chain solutions for MRO, packaging procurement and inventory management services. The Singapore-headquartered firm, this year announced its foray into the supply chain financing space with its digital platform Credlix.