ChemConnect 2022: We are breaking the myth that e-commerce can’t be done online

Mukund Vasudevan, Managing Director, Enterprise Solutions, Moglix explains how his company is ushering digitalization in chemical supply chain

“Today the chemical industry stands at the cusp of lots of opportunities. At the same time, we have challenges ranging from lack of capital expansion going on, supply chain disruptions, container availability, trade tariffs, Ukraine war, lots of supply chain disruptions which are happening. The commodity price is fluctuating like crazy and ESG is becoming more and more relevant, not just from the fact that customers are asking for it but also the investors,” said Mukund Vasudevan, Managing Director, Enterprise Solutions, Moglix.

Vasudeven shared his views on what’s driving the demand for digital in supply chain and logistics at the first edition of “ChemConnect 2022”, a logistics and supply chain event, organized by Indian Chemical News (ICN) on September 21, 2022 at The Lalit, Mumbai.

“Most of the sales globally are offline. There is a myth that B2B cannot be done on e-commerce which, however, is changing fast. So we help with that transformation also and the last piece financing which is both channel financing as well as window bill discounting. If you have an e-commerce ecosystem both on procurement and sales, its actually much easier to enable financing. Also it’s all about connecting lenders to buyers to borrowers, so much easier to,” Vasudevan said.

“In a nutshell, Moglix does three things. If you think of us as the end to end supply chain transformation partner, we help on procurement, sales and financing. All three elements or at least the procurement and supply chain and sales. We are also involved in logistics. So we help with the digitization of all and we help companies get another way through the digitization process and primarily based on these areas where we have kind of developed a certain amount of expertise. On the left hand side, you see indirect packaging, indirect procurement and packaging is an area where we have developed expertise. Capex expansions are another area and custom fabrication; those are kind of three areas where we do quite a bit of work.”   

Explaining the solutions offered by Moglix, Vasudevan added: “While consumer demand is growing, with it comes a challenge. Almost every company we have spoken to before going through Capex expansion have delayed projects due to a fragmented supply base with lots and lots of suppliers. It is difficult to manage the quality of each and every one of them especially when you have smaller who vendors who want to kind of cut corners in every possible way. Then they run into working capital issues and that in turn results in a delay. It’s very tough to hold long term prices right now, especially in steel, few other things. So one of the things which we do is kind of create a Capex digital platform with all your existing vendors on board onto it. We then create a slightly offline way of tracking and tracing every component which is being delivered and stages along it. So you have a project management tool. We can even do new vendor discovery since we have an ecosystem of almost five lakh vendors across the country to improve pricing also.”

Sharing an example on the procurement side, Vasudevan said: “In terms of procurement optimization, the ecosystem is still evolving in India. If you are buying from a particularly small vendor, the chances of you getting inventory visibility into what they have is very limited. If you are buying from a logistics partner, some will have a GPS, some won’t. If you are importing something, there will be one place in the chain where the visibility order is not available.  It may be in the port, it may be a logistics partner, maybe train, it may be something which is missing along the way. Therefore, the ecosystem needs to evolve with you. What we recommend is taking this in bite size chunks rather than try and solve the entire problem. As a case study, we helped a company with their indirect procurement and packaging. They had over 800 vendors and un-optimized inventories across six different plants, meaning every plant was buying the same material at conflicting prices. We created a catalogue for them and took care of end to end quality, delivery and cost right across the board. The idea of that is behave similar to what in the B2C environment where you can track and trace the order anytime You know when exactly is arriving and you can compare prices. That’s the kind of catalogue we created for them. This led to reduction in 80% of the number of vendors and 80% of that POC being placed. Might be less than 10% of their spend, but at least we have sold a big chunk of time and inefficiency in the process. We saw an ROI of almost 5% to 10% cost savings immediately just by aggregating.”

 Sharing a customer experience on sales, Vasudevan said, “One of the largest metals and mining companies came to us for e-commerce. They had never sold online, but wanted their distributors and end customers to have a beta kind of buying experience like in Amazon or Flipkart. They wanted real time price discovery linked to indexes for their customers. They wanted to reach more SMEs and they thought they would get premium there. They wanted integrated logistics, track and trace, and analytics, just like Shopify. We created Vedanta Metal Bazaar which today holds almost 80% of their sales including the large customers. Today they are reaching 50% more SMEs customers.”

“India is a complex market that includes both online and offline and to really get an integrated solution and the ROI, you need to couple the two together and that’s what Moglix provides,” Vasudevan concluded.