COVID-19: Supply chain restoration is vital for plants to restart, says Ashok Leyland
Published On Apr 30, 2020
Automakers plant re-opening is largely hinge on the kick-starting of supply-chain eco-system. The availability of components and aggregates are critical for OEMs to resume production.
The government has allowed vehicle manufacturers to resume productions in phase manner after over a month’s strict lockdown. Vehicle production is critical to kick-start the manufacturing sector which is vital to the economy to get back on its feet.
Last week, few manufacturers have secured permission from various state governments to re-start manufacturing operations. Chennai based truck maker Ashok Leyland is among the OEMs permitted to start manufacturing at some of its plants with all the necessary safety measures in place.
However, vehicle manufacturing plants today work on just-in-time logistics management and they are closely aligned component suppliers and uninterrupted supply chains. The vehicle production depends on the availability of key components at the OEMs manufacturing units. Therefore, restoring supply-chain is the most critical aspect of the manufacturing activities to get back to normal.
Yet, it is not yet clear how auto part makers will start producing components when the restrictions are in place in some states where the infections are higher. What is also critical is getting back workers is not feasible as tight travel restriction is still being enforced strictly. Hence, unless the supply of parts is ensured, it is going to be a huge task for OEMs to start making vehicles.
Ashok Leyland is gearing to re-start plants which look increasingly challenging unless the supply-chain gets back to normal. The truck makers also recognise that close collaboration of the industry with local agencies is essential.
Speaking the importance of supply-chain, Vipin Sondhi, Managing Director & CEO, Ashok Leyland said, “Auto OEM’s are dependent on the ancillary sector. A smooth flow of the complete supply-chain is vital for the production of vehicles. While the Government has given the auto sector permission to resume operations in a phased manner in certain geographies, with certain norms and conditions, it still remains a challenge for the industry to resume operations. This because, while the OEM production unit might be in the green zone, even if one ancillary unit that supplies a small part happens to be in the red zone, it will make a component of the vehicle unavailable, thereby making the production process impossible.”
He further added that ‘The need of the hour is for the industry to collaborate together with the local agencies to ensure a smooth supply chain, for the OEMs to commence production and help boost the economic revival of the nation.”
The driver community is highly critical for the logistics and supply-chain to function optimally. Speaking on the support to the driver, Sondhi said, “Logistics and transportation are the backbones of the economy, and in these challenging times, vehicles need to be running to transport essentials. The truckers ensure that the supply chain of these essential supplies is not disrupted, and the communities affected by the lockdown are cared for.”
Elaborating the steps that are necessary to ensure the driver gets the support and starts to work. Sondhi he added, “We, in turn, need to care for these truckers and some measures which the Government could take to assist these drivers are - to provide minimum wages to the drivers and ensure their benefits are looked after; provide insurance for the drivers and ensure their health and safety is cared for; regulate and mandate the working conditions for these truck drivers – through cabin regulation. Also for the drivers who are transporting essentials across the country, assistance needs to be provided in the form of food, water, essentials, and service support at pit-stops along the highways.”
Ashok Leyland has already started working towards these objectives and willing to partner with the government for any new initiatives to help drivers.