May 26, 2020
A constant fear that the companies has is that the workforce which has left for hometown might come back to workplaces even after the lockdown is lifted. They may opt for working in their own home land with newly created employment opportunities.
Facing hardship with labour shortages and social-distancing, many consumer goods companies are of the action that they may opt to accelerate automation at their factories and production units, which will help them to speed up the processing with minimum number of staff and workers.
Non-availability of work power is looming as the greatest blockage for FMCG companies since the movements of employees are limited and restricted, while others are refusing to join back for the fear of infection or have gone back home to their villages. Public transport still lacks efficiency in parts of the country with no regular and permanent solution to it.
“Most companies have been shying (away from) automation, which is a one-time large expense, compared to having labour at factories that needs smaller but long-term investment,” said B. Krishna Rao, category head at Parle Products, the country’s biggest food company.
“But we have to invest now so that we avoid such a situation in future, similar to what most factories in the developed world adopted decades ago”.
They may opt for working in their own home land with newly created employment opportunities though factories have restarted this month as the government is striving to revive the stalled economy..
Thousands were forced to take sea route, railway track route, forest route to reach home after they found themselves stranded without any income.
“There can be huge opportunity cost due to labour shortage once demand stabilizes,” said Angshu Mallick, deputy chief executive of Adani Wilmar, which sells edible oil, atta and rice. “We will now closely evaluate each and every part of operations to see how the labour requirement (can be) drastically minimised, especially casual workforce for operations such as packaging, loading and supply chain.”
“Dabur is evaluating end-of-the-line automation at its manufacturing units but needs workers now”, said executive director Shahrukh Khan.
“In cases where we are unable to get local workers, we are seeking permission from local authorities for inter-state movement of labour to fill the need gap arising from migrant workers returning to their hometowns,” he added.
Unlike other consumer-facing sectors such as auto and electronics, FMCG has largely steered clear of automation. “This is due to skepticism around its effectiveness in the highly traditional, trade-dominated-business market and the abundant availability of manpower,” said Varun Chaudhary, executive director, CG Corp Global.
Nevertheless, many companies have been investing in upgradation in technology with the pace picking up in the past few years. This will now take a fast-track momentum. “Automation along with outsourcing to third-party manufacturers can help meet production targets,” said Sunil Kataria, chief executive officer at Godrej Consumer Products.
Marico said it will explore more automation initiatives across the distribution and supply chain network once the situation stabilizes. “Right now, we are operating with a much lower strength of staff at factories and third-party providers because of the strict safety norms we have deployed,”