Startups in supply chain need to pivot their business model, tweak offerings during pandemic: Lumis Partners' Ashutosh Mayank

The pandemic has been rough for the supply chain sector creating a visible ripple effect among all stakeholders. It has shed light on the vulnerabilities of traditional businesses and the need for technology adoption across the sector. While startups engaged in the supply chain sector hold a lot of potential, unanticipated crises like the ongoing pandemic can have a fatal blow to the operations.

“The alignment of supply chain to the overall business strategy is of paramount importance for any business to be profitable and sustainable. The Covid-era has further demonstrated how severely businesses are affected once parts of their supply chains, many of those located in countries like China, get disrupted. These businesses need to be robust enough to stand the volatility and disruptions which are becoming a norm,” Ashutosh Mayank, VP, Lumis Partners told ET Digital.

Mayank highlighted that early-stage startups engaged in the supply chain business are one of the worst-hit and they need to be resilient and tweak their offerings.

“Every early stage startups would have taken a hit during the pandemic as demand in the economy has fallen sharply; not helped by the fact that such startups spend more than they earn. Such startups have the dual task of not only weathering the storm, but pivoting either their business model or value offerings with the dynamic demands of the market. With resilience taking center stage along with cost and efficiency, offerings will have to be tweaked,” he said.

He added that startups can focus their offerings towards industry verticals that have seen a demand surge in these unprecedented times. This, he said, will at least ensure continuity of demand and thus a potential to serve this market.

Mayank believes that post-Covid, the world will witness radical changes in the way businesses operate and supply chains would be at the forefront of this phenomenon.

“The startups will have to learn to build robust business models. They can no longer expect stability and status quo in the business environment, which is not only being altered by tech innovations, but also are being disrupted by geo-political developments and by events such as Covid-19. A key strategy would be to become more decentralized and responsive in order to maintain the continuity in business operations even if some link of value chain fails in some geography,” he said.

He further added that technology will play a key role in changing the course of supply chain industry and businesses cannot afford to ignore the need for emerging technologies such as Artificial Intelligence and Machine Learning.

“The onset of the epidemic has shown how vulnerable the conventional business processes were. The migration of labour, lockdowns in certain geographies etc are going to force the businesses to adopt AI and IOT to make their businesses robust enough to sustain such disruptions. The demands of the post Covid world will also change with increased focus on traceability and quality control with as few human interventions as possible,” he said.

The investment firm has recently announced its accelerator programme Supply Chain Labs to provide hand-holding support to supply chain startups. The 6-month accelerator programme will provide mentoring and group learning opportunities to new-age startups. Supported by MIT’s Zaragoza Logistics Center, the programme’s corporate partners include Flipkart, Delhivery, ABB, and others.

“The programme will provide guidance to these startups on how to pivot given the newfound market dynamics. It will help them connect and pitch to investors who are hungry for investments in this domain; and most importantly it will give the startups exposure to corporate clients who will help them get feedback on their product from the end-client itself,” he said.