By Vikas Argod | Manager, Supply Chain Operations | and | Sivaram Murthy | Sr. Consultant, Integrated Demand & Supply Planning | Chainalytics
“Swachh Bharat Abhiyan” — also known as the “Clean India Mission” — is one of the major initiatives that Indian Prime Minister Modi announced in October 2014 on Mahatma Gandhi’s birthday. One of the mission’s goal is achieving a ‘clean India’ with significantly less solid waste and roadside litter by October 2, 2019, when the world celebrates Gandhi’s 150th birthday.
But just how will this grand mission succeed? Behavioural changes, infrastructure building and solid waste management are all key to this campaign’s success. And each of these areas contains of supply chain components.
Source: Swachh Bharat: Industry Engagement – Scope & Examples
Three critical capabilities for building “Clean India” supply chains
1. Solid waste supply chain management is one area where government must focus on capability building rather than field implementation. We recommend developing three capabilities to support building robust supply chains for solid waste management: packaging research, policy integration and establishing a supply chain centre of excellence. While the Clean India initiative has multiple dimensions–including for industries to adopt villages for establishing sanitation infrastructure–we are limiting our scope to government actions in this write up.
While packaging is often looked at as the last step in a product cycle, it is probably the first step in the waste cycle. To use a cliché, packaging is a “necessary evil.” Designing biodegradable packaging material that can be used for majority of consumer goods will be a great step in cleaning India. The government should allocate considerable funding for focused research in reducing packaging waste. Research institutions such as Council of Scientific and Industrial Research (CSIR), IISERs, IITs, NITs, IIP etc. will use these grants and come up with multiple solutions. This capability building requires sustained funding and organisational support.
As the government is also looking for immediate solutions, it should incentivise packaging optimisation by companies. For example, waive the Swachh Bharat cess on companies showing year-on-year reduction in non-biodegradable packaging. It is possible to reduce packaging in most supply chains by consolidating deliveries, removing air and re-using packaging. In the words of Chainalytics’ packaging experts, packaging optimization is about ‘thinking inside the box.’ And since excess or poor packaging wastes resources and increases transportation costs, packaging optimisation increases margins too.
2. In the future, it will be important to ensure that both existing and new policies, programs and initiatives incorporate a waste management dimension. For example, the National Integrated Logistics Policy (NILP) currently being formulated by the Government of India will not be complete without clear mention of waste removal guidelines for warehouses. Similarly, there are separate standards for “Make in India”, Food and Safety Standards, The National e-Governance Plan (NeGP), CSR Cess Requirements etc. Each of these policies, programs and initiatives must include policy goals for waste removal; but the idea is to integrate waste management in every area rather than creating it as a new “department” or “policy”.
When it comes to more localized approaches, cities will need to address their own waste management issues, addressing questions like: Should we set up a centralised plant to process waste or follow a hub and spoke model? If we have a water shortage and can’t rely on water intensive operations, what are our options? Will announcing a ban on plastic bags bring down overall plastic usage? Currently, cities must develop their own unique approaches to answer such questions and have no ‘think-tank’ to go to. In addition, the buyers of ‘to-be-recycled’ material from waste management centres are highly unorganised and localised, causing information asymmetry. All these issues have led to every city managing waste in their own way. Some cities have adopted innovative methods – using plastic waste with bitumen in road construction, converting restaurant food waste to biogas and supply it back to restaurants. Why can’t every city build these?
3. By building a supply chain Centre of Excellence (CoE), the Government of India will create a successful, repeatable and efficient solution that cities can use in building solid waste supply chains. From design to implementation to operations, this CoE will provide process maps, technology options, organisational structures and skilled resources–essentially everything required to stand up a waste management centre. With such information, entrepreneurs will build disruptive marketplaces that will reduce transaction costs. Rather than government running these waste management centres, if it invests in building this CoE or ‘think-tank’, city administration and citizens will have a lot to gain.
These three capabilities are about creating institutions and skillsets that promote “clean India” supply chains. Focusing on these capabilities is a much better use of tax payer’s money than [having the government?] managing those supply chains. Mahatma Gandhi once said “the difference between what we do and what we are capable of doing would suffice to solve most of the world’s problems.” The recommended three capabilities are about the latter and will give him the best gift on his 150th birthday.
Vikas Argod is passionate about data-based decision making and converting data to information to insight. His experience includes business process re-engineering, solution implementation, supply chain strategy projects and optimization modeling, and he has successfully worked on projects related to logistics, transportation and contingency planning. Sivaram Murthy brings experience in providing supply chain management, supply chain analytics, demand analytics, inventory management, product management and technology services and solutions to sectors including retail, manufacturing, financial services and education.
