From the Perspective of a Service Provider- In conversation with Santhosh Shanbhag

Mr. Santhosh Shanbagh – AVP – Operations

In these extraordinary times when the world is coming together to fight a common malady (literally), many of the world’s governments are thinking hard about the economic impact of shutdowns and curfews. We have already highlighted the impact on the fashion industry in a previous blog entry. But what about a first-hand account from the other end? Today we bring you an inside view into how the pandemic has affected us.

Many of our readers know that we at Manipal Technologies Limited process over a million photographs a year for the fashion, retail, jewelry, and other industries. However, some of you might not know Manipal Technologies Limited is also a prominent service provider in packaging pre-media, an important value-adding step in the global $150 billion dollar packaging industry.

We sat down with our own Santhosh Shanbhag, Head of Operations of Digital Services at Manipal Technologies Limited to understand the challenges and new opportunities that this pandemic has created, and what the world’s virtual supply chain might look like in the post-Covid19 world.

Q: Hi Santhosh, good to see you again. I know you are busy right now. What has kept you up this past month or so?
Shanbhag: Yes, we have been super busy. As you know India has been in lockdown for over a fortnight now, and movement is very limited. So we’ve been figuring out how to minimize the impact on our operations while complying with government regulations. Most of us are working from home, but we have also been using a skeletal staff for critical operations from the office.

Q: This must be hard for you personally as well. You have been here since the beginning and are a local in this area too…
Shanbhag: Yeah look this is a pretty terrible situation all around. It is really sad to see all the suffering in the world right now. It just goes to show you, you know…that at the end of the day we’re all alike and we’ve all got to stick together to solve problems together. On a personal front, I’m glad I live in such a close-knit community where we draw strength from the community. Though the lockdown means we cannot venture out and meet each other like we normally do, we draw solace from knowing we’re all there for each other if we really need it.

In a sense, Manipal Technologies Limited is like that too. Most people here are locals and have relationships outside work too. With our clients as well, our client relationships tend to be long ones…really long. We’ve had clients who’ve been with us 5, 10, 20 years and we’ve been in touch with all of them.

Q: Speaking of your clients, what has been the impact of the pandemic on them?
Shanbhag: It would be fair to say that as far as our image editing clients go, most of which are from the fashion, jewelry, retail and F&B industries, the impact has been devastating. Obviously brick & mortar stores have closed indefinitely and eCommerce has had delivery issues. You see, all these industries run on a six-month forward plan. That means as far as Manipal Technologies Limited is concerned, the images we worked on six months ago for catalogs and online channels would have been turned into printed material for products scheduled to hit the shelves this month- but which aren’t being stocked because retail is closed. That’s a huge loss to the designers, manufacturers, retailers, etc.

The second problem is that with the demand down and huge inventories in warehouses, there is real uncertainty about what happens six months from now, assuming things return to normal by then. Future designs and existing material both have an uncertain future. So countries like the US, UK, Australia, etc. all of which house some of our important clients have people working from home, the infrastructure is there but there is huge uncertainty. The impact is not just on our fashion etc. clients. One of our clients is in the healthcare industry. They provide a unique “as you wait” image editing solution to people undergoing elective surgery to help them visualize the results before they opt-in. Well, their clientele basically evaporated overnight as people have simply stopped going to clinics for non-emergency work! This is a long term client of ours and we are doing everything we can, from payment defers to free support to help them any way we can, but it’s tough- really tough for some companies.

That said, on the packaging prepress front we are seeing a very different story. Packaging is booming because eCommerce demand has actually skyrocketed. Food & Beverage is generally being labeled an “essential service”. Most people don’t know this means everyone involved in the supply chain for a F&B client is also allowed to remain open. So packaging manufacturers, printers, and prepress service providers like Manipal Technologies Limited(MTL) are not only allowed but encouraged to stay open!

“Basically, retailers are suffering but brands especially in the F&B space are flourishing. Competition is alive and well.”

Q: That’s interesting. What about you? What has been your biggest challenge during this time?
Shanbhag: For the last three years or so we’ve focused on keeping our operations lean, and that’s helping us now. We feel we can continue as we have and revisit the situation in about a month or so. This is a big process. We are hopeful that the way solutions are offered and sold to us by technology solutions providers will change too. We are looking at how to make ourselves more flexible. It’s work in progress.

At that time we will revisit the situation and decide on next steps. Meanwhile we will continue our lean focus and also plan for the future by executing a strategic technology-driven business process transformation on an ongoing basis. For example, Machine Learning is one of our most important areas of focus, both for imaging and packaging premedia and that will continue.

Q: Looking ahead what will be MTL’ focus over the next few months?
Shanbhag: Obviously a lot of people are looking at the immediate and medium-term impacts of the pandemic. From a strategic perspective, this situation will create consolidation opportunities. Brands worldwide in the post-pandemic era will need a sense of stability and continuity which the smaller service providers may not be able to guarantee. But more than consolidation I think this will streamline the demand-supply supply chain. We may start seeing longer-term contracts…2-3 years instead of the current 6-12months that are the norm.

In the packaging pre-media space, I think we have to deal with a different (good) kind of problem. We’re cautiously optimistic about this space, but again smaller players may not be able to keep up. Good talent is still a challenge to get, but we feel we will likely need to plan an expansion in this area in the next couple of months. As the shift towards eCommerce is only going to speed up because of this pandemic, we are also developing end-to-end solutions for brands so we can provide a strategic partnership in the years to come.

We are also seeing more interest in CGI, 3D renders, and Augmented Reality. We are already quite strong in this area and feel we are going to see this become a major opportunity going forward.

Q: I am glad your outlook is so positive… any parting thoughts?
Shanbhag: Look, as a species we will overcome this- it is a matter of time. It will hurt, but I personally feel it will turn the corner soon and we will emerge stronger because of this.

From a business perspective, looking forward everybody has lost market share and consolidation efforts and changes will be fierce. Brands and clientele will look to have partners who are agile, who do not have cost burdens, and won’t pass on costs towards them. Agile workflows will be key. Opportunities to get connected and reach out to new clients will be there. Sales cycles will reduce. Brands need partners who can make a difference to them. They need vendors who can offer them services at very competitive prices in their supply chains. MTL is getting ready for that post-pandemic competition.

But meanwhile, I want to say that on behalf of Manipal Technologies Limited…in fact on behalf of the entire Manipal Group, if our readers need any help to just leave us a message- reach out to us. We are fortunate to have a presence in four continents. If there’s anything we can do to help, let us know. We’ll do everything we can for…individuals and communities if we can.

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