A presentation based on our research paper " Emerging Paradigm for India's Manufacturing Sector". It assesses the general potential impact of the shock on various segments of the economy with specific details of impact on the manufacturing sector, the factors stimulating it and analyse the policies that have been announced so far by the central government to ameliorate the economic shock and put forward a set of key recommendations for businesses and Indian economy.
2. 31 Dec 2019
Local health authority
announced an
epidemiologic alert in
China
21 Jan 2020
First case of
coronavirus in India
30 Jan 2020
The outbreak was
declared a Public Health
Emergency of
International Concern
11 Feb 2020
WHO designated the
disease as COVID-19
11 Mar 2020
Formally
recognised as a
pandemic
3. The Covid-19 Pandemic
● Most relevant topic today
● Impact on the economy
● Paradigm shift in how businesses
work
● Emphasis on Indian
Manufacturing Sector
● Factors affecting them
● Guided by key recommendations
to minimise the impact and
respond to the crisis
● Incorporated by primary and
secondary research
● Analysis of the macro-economic
factors, demand and supply chain
disruptions and consumer
behavior.
● After analysis the problem, future
steps to help in decision making
process
Research Objective & Significance Research Methodology
5. Paradigm Shift in Businesses
“As lockdowns begin to ease across India, our CEO
Salil Parekh, along with a few Infoscions, get back to
our campuses that are equipped and prepared for the
‘new normal’," Infosys said in a tweet on 7 May.
Rahul Agarwal, CEO and MD, Lenovo India, believes
changes in work culture were visible even before the
outbreak and it seems like both companies and
workers are adapting to the new normal.
Paradigm Shift In Businesses
6. Consumer Behaviour
Lockdown is impacting the consumption
which is the biggest component of GDP.
A survey (elaborated in research paper)
was conducted that emphasized on
consumer behaviour and the spending
intentions in the near future. One of the
most affected industries is the
manufacturing sector and automobile
forms a major part of it.
Consumer Behaviour
Automobile
7. The economic effects of Covid-19 coming from reduced
spending will be larger than those coming from disruptions to
supply chains and illness related to workforce reductions.
8. Demand & Supply Chain Disruption
● The covid-19 pandemic proves to be a demand, supply and market shock.
● India is in the top 15 economies affected due to supply chain disruption in china.
● Direct supply shocks are being amplified as manufacturing sectors in less-affected
nations find it harder and/or more expensive to acquire the necessary imported
industrial inputs from the hard-hit nations, and subsequently from each other.
● Demand disruptions are taking place due to macroeconomic drops in aggregate
demand, and precautionary or wait-and-see purchase delays by consumers and
investment delays by firms.
● It is expected to take at least 3 months after complete lifting of lockdown for the
supply chain to normalize.
11. Impact
Consumer Behaviour
Disruption of
the
Manufacturing
Sector
No
Demand
Non-
Availabilit
y of
Labour
Nationwide
Lockdown
Lack of
Credit
Facilities
● The headline seasonally adjusted IHS
Markit India Manufacturing
Purchasing Managers’ Index (PMI) fell
to 27.4 in April, from 51.8 in March
● RBI Governor in his speech on 22nd
May said that in the production
sectors, industrial production shrank
by close to 17 per cent in March 2020,
with manufacturing activity down by
21 per cent.
● The output of core industries, which
constitutes about 40 percent of overall
industrial production, contracted by
6.5 per cent.
Impact
12. Solutions
❖ Cost reduction strategy
❖ Higher revenue strategy
❖ New products strategy
❖ Automation and Artificial Intelligence
❖ Setting up a best in class manufacturing ecosystem
❖ Robust policies and high government intervention and support
13. Automobile Industry
● Car makers recorded zero sales in April
and great losses of Rs.126,500 crores in
55 days period.
● The largest carmaker in India, Maruti
Suzuki, only managed export shipments
of 632 units during the month with port
operations having been partially
resumed.
● Exports of Hyundai and Mahindra stood
at 1,341 and 733 units respectively last
month, while having reported zero
domestic production and sales.
● As the industry would continue to face the
challenge of non-availability of labor, a
development of a digital platform as a
replacement of the usual shop floor
● Companies must adopt digital
manufacturing technologies to uplift
operational efficiencies in all aspects.
● Leasing, used car sales and subscription
based business models
Impact Solutions
14. A Global Crisis requires a Global Response!
➢ Strengthen supply network, re-strategise FY20-21, accelerate digital transformation, reimagine
business possibilities and build resilience to protect against future shocks.
➢ Scale down economic activity to keep people at home, but without destroying or damaging the
physical, cultural, or organizational capital that will be needed to restore growth and normality.
➢ Collect better data, to develop better containment strategies, and develop better social-
economic policies to support all disruptions in the society created by the Covid-19 crisis.
➢ While building supply chain resilience and keeping it diversified, other demand and supply side
drivers specific to covid-19 situation also need to be monitored.
➢ Work closely with municipal, state and federal governments to coordinate plans on worker and
consumer safety, while keeping mission-critical productions running.
➢ Businesses should focus on AI and digital transformation.
➢ Take care of one’s mental health.
15. Limitations
Due to non-availability of any quantitative data
related to consumer spending or losses incurred
by companies in all the sectors of India, our
interpretations of the everyday news with any
information that we are getting reflects our
sentiments of how the economy is going and
our estimate of how the economy will go after
the lockdown is uplifted.
There is a lot of scope for future research as we
face such a crisis for the first time in our lives.
When the ongoing pandemic comes to end, we
can start looking at all the sectors one by one
and the major impact after Coronavirus struck
our country.
Scope For Future Research
16. Conclusion
Covid-19 proves to be the worst health crisis of our times. The pandemic is also expected
to fundamentally change the way many organizations operate for the foreseeable future.
The risk of global recession in 2020 is extremely high, possibly in emerging markets too,
as nations shut down economic activity to limit the spread of covid-19.
We conclude this paper with ways in which we think the business landscape is likely to
shift, not only in India, but also all over the world and the steps they can take in these
challenging times to thrive in future. Responding to these will certainly help countries and
companies navigate their path to the ‘New Normal’.