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- Raw materials to grow over US$ 500 Bn by FY26 at a compounded growth rate of more than 8%
- New age players to account for >10% of the RM procurement by FY26
Technology-enabled players are revolutionizing the supply chain from manufacturing to end users, digital-first players (tech-led) are bringing a slew of new and propositions to the table. These players offer varied services across working capital management, production & operations and material handling.
A report released by Redseer states that because of this technological intervention – manufacturers and end consumers are now enjoying a more fluid, agile, and efficient supply chain meeting the needs of a constantly changing market. For manufacturers, technology is offering solutions in the raw materials and production stages. It allows them to compete better with the lower costs and greater efficiencies of the digital economy. In fact, owing to the intervention of technology, digital players are by-passing intermediaries by providing raw materials directly from manufacturers to end consumers. This leads to a blended margin of 11-15%.
The disruptors in the manufacturing space are primarily in the area of R&D, MRO, and machinery- focusing mainly on improving the current supply chain processes. This is reducing lead times, reduces cost, and increasing efficiency.
The raw material market is also growing rapidly as new and more efficient ways to procure raw materials are being developed. As new-age tech-enabled players bring technological advances into this space- increased efficiency, reduced costs and increased transparency can be expected.
“With their unique offerings, digital players are slowly taking the reins within the country’s manufacturing industry. Some of their unique offerings include tech-enabled material procurement and credit for SMEs, financing support, real-time tracking of production, supply chain digitisation and more! Given the pace at which they are growing, and the plethora of product offerings they’re bringing to the table, it seems likely that these digital players could don the robe of manufacturers very soon”, says Mrigank Gutgutia, Partner, Redseer Strategy Consultants.