Building Infrastructure To Connect India’s Highways to the Global Supply Chain
At 14 per cent, India has one of the highest logistics costs relative to GDP. Similarly, India’s power cost as a percentage of GDP is also among the highest in the world. This has limited the competitiveness of India’s products in the past. For India to be a manufacturing global superpower, infrastructure creation is the foundation.
By connecting India’s upcoming cities to better opportunities for domestic trade it will enable business continuity. Infra-building initiatives like the 100 Smart Cities Mission and the PLI scheme covering 13 sub-sectors will enable Indian manufacturing to widen its footprint into tier-2 and tier-3 cities.
Infrastructure creation will enable small and large manufacturers in India to connect to EXIM trade opportunities. Robust infrastructure for EXIM trade such as airports, ports, inland container depots, and logistics parks will allow Indian manufacturing to leverage the untapped potential of MSME suppliers through greater local capacity utilisation. Infrastructure creation alone can contribute 4.5 per cent to India’s GDP growth rate every year.
The lack of visibility into relevant metrics distorts the creditworthiness assessment of MSMEs and slows down the release of working capital. Agile cash flow is the fuel that India’s MSMEs need. A shift from offline to digital credit disbursal can strengthen MSMEs’ balance sheets.
Digital supply chain financing platforms leverage dynamic metrics like cash flow to make credit approvals safer through more accurate underwriting and enable quick on-demand credit injection into MSMEs’ balance sheets.
A switch from cash-based offline credit disbursal to digital supply chain financing can add three percent to India’s GDP every year.
Digital transformation is the multiplier that will bring these together to work seamlessly for us and our partners across the world. The time to make India a manufacturing superpower and create a “community of shared destiny” is now.
Rahul Garg, CEO, Moglix: On A Mission To Impact 100 Million Lives By 2030
Rahul Garg is raring to go. And he wants to do it quickly.
That’s why just a few months after his company Moglix became a unicorn, Garg set up the Mogli foundation, which will work with organizations to bring innovations in areas as diverse as health care, environment, and livelihood in the country. The idea came largely from his own experience in India’s fight with the second wave of Covid-19.
“We want to now become the front and centre of everything manufacturing, procurement, and everything related to supply chain finance”Rahul Garg, Founder, Moglix
India’s e-commerce B2B market is currently pegged at $1.7 billion, according to a report by consultancy firm RedSeer. It is expected to grow at an 80 percent compound annual rate (CAGR) to reach $60 billion by 2025. By comparison, the B2C e-commerce market is currently worth some $18 billion and is expected to grow at 40 percent CAGR. The country’s offline B2B market itself was estimated to be worth some $700 billion in 2018-19.
“It’s still very early days and I think the idea is can we impact 100 million lives by 2030 in a positive manner across health care, environment, and livelihood,” Garg says. “We have realized there is a larger purpose and larger objective that you can, as an organization, have to create impact.”
The company has already launched operations in the UAE, a market it is now bullish on. It works with over 500 global enterprises to streamline their procurement and supply chain at more than 3,000 plants across infrastructure, metals and mining, oil and gas, chemicals, pharma, auto, and FMCG, among others. In addition, it also boasts a supply chain network of over 16,000 suppliers and over 35 warehouses.
Strategic Acquisition, Expansion and Scaling Up: Moglix Growth Action Plan in line
Business-to-business (B2B) commerce platform Moglix, which stormed into the unicorn club this year after raising fresh funding at a valuation of $1 billion, expects to breakeven in 18-24 months even as it looks to make acquisitions, expand its categories and double down on its Middle East business.
“We have found that while today on the consumer side there is a lot of capability to get lending access in a fast manner from many platforms, the same thing on the B2B side is missing,”Rahul Garg said
We believe that India has a $150-200 billion worth of financing need in the B2B space and there is at least $30-50 billion worth of need unfulfilled today. If we execute it properly, we are looking at $2 billion to be disbursed annually as part of the platform in 12-18 months.
Talking about his international plan and expansion in UAE, he added
“We entered the Middle East two months back. We have a team and a warehouse there and we are doubling down in the region. On the one hand, we have shipped to more than 120 countries over the last six years. We were shipping pandemic PPE (personal protective equipment) supplies in more than 25 countries. The other dimension is how our full-stack solutions in India are applicable across emerging markets (and how do we take it there).”
Moglix grew at 3x plus over the last 18 months as a company. We continue to scale our offering across multiple categories and there is always the unpredictability of what happens in the next few months but we are on track to grow 2-3x in this financial year. We have provided liquidity during the last two fundraisers to our employees. We cover 25-30% of our employees as part of the ESOP plan. We are continuing to double down. We would have announced Rs 30-40 crore worth of ESOPs. In the last 12 months, we hired more than 500 people. We aim to hire 300-400 people in the next six months. We didn’t do any layoffs during the pandemic.
How Augmented and Virtual Reality is becoming the future of manufacturing?
The applications of AR and VR in various strata of the manufacturing sector can help it grow out of time-consuming, redundant cycles of functioning. AR is bringing precision to production and empowering workers with state-of-the-art methods for efficiency and ease. Through personalised guidance, automated support,better monitoring and analysis of faults & flaws, this technology assists people in focusing on their work and having an eye for detail. The ability of new-age technologies such as AI, Big Data and IoT to make manufacturing smarter and more inventive has received a lot of attention in recent years. And today, the potential of AR for manufacturing is only beginning to be explored, signalling enormous potential. Because of the development of sophisticated technology, every critical activity previously carried out by a time-consuming, manual method is now automated, simplified and painless. It is yet too early to tell if AR and VR investments indicate a coming revolution that will forever change manufacturing as we know it or if early adopters are experimenting. In any case, virtual technology in production is no longer just hype.
Road to the low-cost transition to Net-Zero lies via Value Engineering
The Glasgow Climate Pact has made it clear that there is a universal mandate to get to net-zero emissions. However, each country will have its own timelines and trajectories. Through their regulatory mandates, governments will start clearing out carbon content from the supply chain, making space for green alternatives. Manufacturers will have to roll out innovative solutions with speed and scale to cash in on the opportunities.
Supply chains are subject to the bullwhip effect, where changes and errors accumulated upstream keep amplifying as we travel downstream. The way to accommodate this characteristic of supply chains is to develop digital solutions which allow flexible reallocation of resources and costs in response to real-time carbon emissions.
Optimizing the logistics planning for the delivery of goods for every procurement and distribution transaction is the first step in reducing the carbon footprint. Businesses will have to leverage data to map critical paths, container capacities, and multiple modes of logistics and choose the least cost-green logistics options.
Unicorn HR leader, Saumya Khare, talks about hiring trends and careers opportunities with startups
Moglix is a technology-first company. The technology industry respects innovation and innovation at scale mandates skill over and above experience. As pioneers of digital supply chain transformation in India, we believe in challenging the status quo, conducting controlled experiments to explore new solutions that did not exist before. The skill set that our people bring to the table is critical to our capabilities to bring new ideas, new products, and new solutions for the manufacturing supply chain.
Startups have been at the forefront of the new economy, creating tremendous value, creating some of the most amazingly useful and efficient solutions that have saved lives and livelihood of people. Starting your career at a start-up is an accelerator.
While answering to the audience Saumya said
“To understand if a startup will scale up or not, you will have to go beyond the cosmetics and understand the business model. That will help you make an informed choice. All founders want their startups to scale and that is why they are passionate about building it from ground level. Ultimately, you need to judge if you are convinced about the business model & potential and it is aligned with your skill sets”
In the technology industry, new waves of innovation continuously shape the dynamics of who stands where.
To summarize she said “startups offer fantastic opportunities for learning, empowerment while working, opportunities to work in different segments of interest and a very fast paced environment where you can see the direct impact of your work, & are just not a cog in the wheel”
Moglix CEO Rahul Garg talks about Credlix’s growth plans, new acquisition
Credlix, the digital supply chain financing platform from Moglix, has entered the EXIM financing space, with its acquisition of NuPhi. The acquisition comes shortly after Moglix’s entry into the Middle East region. As Moglix continues to expand globally, it is focusing on strengthening its supply chain financing solutions to enable manufacturers easy access to cash flow for their growth.
NuPhi is a Singapore based fintech start-up offering invoice factoring solutions to MSME exporters in India and SouthEast Asia. Founded in 2019, by Pramit Joshi and Mayur Totla, NuPhi offers cross border financing and SaaS applications to digitalize and automate EXIM workflows.
Elaborating on the decision to enter EXIM financing through the acquisition of NuPhi, CEO & Founder, Moglix, Rahul Garg said “As we continue to grow across verticals and geographies, we are building a single operating system for B2B commerce in the manufacturing sector. We are simplifying the flow of goods and value through our global supply chain to improve the ease of doing business. In NuPhi we have found a great team that is passionate about solving for credit access to MSMEs that is a key bottleneck in the global manufacturing supply chain.”
Moglix is set to transform the Packaging Industry in India
Rahul Garg, CEO & Founder, Moglix says ‘We are set to transform packaging industry in India’ and talks about how Moglix has become India’s largest cost-effective packaging solutions provider. Moglix is enabling brands to adopt end-to-end sustainable packaging solutions. We are partnering with brands to help them identify and transition so they can achieve packaging sustainability compliance ahead of the phased SUP ban to be effective from 2022.
Our packaging vertical is meeting the packaging needs for more than 70% of e-commerce orders in the country. We are giving source-to-site packaging supply chain solutions to large manufacturers across industries to resolve their challenges of limited shelf life of perishables, pilferage, spoilage, and wear and tear during transit journeys for domestic and global trade. Moglix is also focusing on Food & Beverages, Textiles, Cosmetics and Personal Care, Pharmaceuticals and Healthcare, Automotive Packaging solutions.
As a brand, the packaging for your product is a manifestation of all the effort gone into your product. As a user, the moment you see the packaging, you are assured of the safety and quality of the product. That is why packaging holds a special place for businesses.Rahul, says
Moglix is a one-stop solutions provider for packaging needs. Our products go through 3 levels of quality check and comply with government regulations. We are reducing the costs of compliance with the amendments to the Plastic Waste Management Rules, 2021 that will come into effect from July 01, 2022, and enabling large enterprises to hit the ground running with agility. Through our supplier capability mapping process, we are continuously expanding our pan-India packaging supplier base, thereby reducing the costs of supplier search and product development for sustainable packaging solutions.
The ET Cutting Chai Stories in conversation with Sandeep Goel
Catch Sandeep Goel, Senior Vice President, Strategy & Operations, Moglix in the recent episode of ET Cutting Chai Stories with Ashwani Mishra, Consulting Technology Editor.
In this interesting conversation, Sandeep very humbly talks about his childhood experiences, learnings and defining moments of his career that shaped him into the optimistic leader that he is today, “looking at the glass half-full glass and not the empty part”.
Connectivity, Convenience, and Analytics: Digital Supply Chain Transformation in Action
Prior to the COVID19 pandemic, manufacturing enterprises in India often relied on a highly fragmented supplier base. With few exceptions, replacing hundreds of vendors with a few strategic ones was not common. Procurement teams often made multiple small value purchases. Often, and perhaps by design each supplier got a small piece of the procurement pie, depriving them of opportunities to scale up. No supplier had the incentive to think beyond the purchase order at hand and invest in best practices, process improvements, systems and customer-dedicated investments.
Communication with suppliers was done largely through paper records, emails, and spreadsheets. While many firms used ERP systems, few suppliers were integrated seamlessly with those ERPs.
The pandemic severely tested this inefficient system. Overnight, suppliers were shut either due to regulation or due to shortage of manpower. Communication channels broke down. Working capital was a challenge. Order tracking and visibility was non-existent. Finding alternate suppliers was a slow and arduous process. In short, the supposedly solid supplier ecosystem, wasn’t quite what it was made out to be.