labour transforming chennai okapi mercy corps
and procurement struggles. However, during the loods the arrangement acted as an ampliier, since irms were even more accountable for goods
with a value that was not normally a consideration in day-to-day accounting. Some clients in Chennai, having witnessed the loods irst hand,
forgave raw material losses, as did long-standing out-of-state clients that had no alternate suppliers. Some irms had to assume losses, particularly
Firm 34, which has both global suppliers and clients, and contracts that hold the irm liable for such losses.
Local sources proved to have both dampening and amplifying efects with some irms able to recover faster and access supplies better
than those that required highly specialized or rare raw materials. In other cases, irms were forced to seek inputs elsewhere as their suppliers were
also signiicantly impacted.
Another reason to maintain high inventories was to reduce transportation costs. In some cases, businesses needed to maintain a high
stock because suppliers are few, and procurement processes are lengthy, as was the case for irm C. Finally, irms have a high inventory when they
ofer walk-in, “on demand” or “just-in-time” JIT services. Having the required material on hand is key to daily operations and eventual growth.
Conversely, irms with alternate, local suppliers reported no lag in sup- plies after the loods.
Another noted dampener was the use of external warehousing vendors. Firm 6 contracts a warehouse vendor, who buys in bulk for a
number of companies in Sriperumbudur. The enterprise pays a premi- um for storage and transportation but neither has to interface directly
with large suppliers nor worry about availability during the loods and otherwise. It also helps that the area is dominated by the auto industry,
and warehousing vendors are able to generate enough demand for their
figuRe 17: sourCe of raw Material proCureMent
services. No other respondents said that they used such facilities. Local sources proved to have both dampening and amplifying
efects with some irms able to recover faster and access supplies better than those that required highly specialized or rare raw materials. In other
cases, irms were forced to seek inputs elsewhere as their suppliers were also signiicantly impacted.
Another reason to maintain high inventories was to reduce transportation costs. In some cases, businesses needed to maintain a high
stock because suppliers are few, and procurement processes are lengthy, as was the case for irm C. Finally, irms have a high inventory when they
ofer walk-in, “on demand” or “just-in-time” JIT services. Having the required material on hand is key to daily operations and eventual growth.
Conversely, irms with alternate, local suppliers reported no lag in sup- plies after the loods.
Another noted dampener was the use of external warehousing vendors. Firm 6 contracts a warehouse vendor, who buys in bulk for a
number of companies in Sriperumbudur. The enterprise pays a premi- um for storage and transportation but neither has to interface directly
with large suppliers nor worry about availability during the loods and otherwise. It also helps that the area is dominated by the auto industry,
and warehousing vendors are able to generate enough demand for their services. No other respondents said that they used such facilities.
product inventory
The efects of maintaining a high product inventory were largely the same. Some irms were more vulnerable to the inventory of inished
goods that they stored than raw materials, since lood-afected clients were unable to make payments or pick up goods on time.
clients
Again, this factor was largely product-speciic and not necessarily industry-speciic. Clients have varying degrees of involvement, and
also absorb risk in diferent ways. In some arrangements, the clients interface directly with suppliers and procure raw materials for the
enterprise. This is true for large auto companies, who use these methods for quality assurance.
Large international corporations also have JIT clauses that are part of their own production processes. Delays can result in bad reviews,
penalties written into the contract, and loss of contract. Penalty claus- es are so far-reaching, that one of the interviewed enterprises had to
pay the penalty that their customer incurred because of delayed delivery during the loods. Enterprises that are part of global supply chains
that ultimately provide parts to large Multinational Corporations MNCs are thus vulnerable, even if they have two or three degrees
of separation. These were also the enterprises that had a keen eye on international expansion.
On the other hand, enterprises that had a more local clientele, or clients who had been with them for decades did not experience
customer losses. They were also less likely to consider business expan- sion and seemed more content with a niche market. Some of these
Local sources proved to have both dampening
and amplifying efects with some irms able
to recover faster and access supplies better
than those that required highly specialized or rare
raw materials.
processes are outlined in greater detail in the following section on irm recovery timelines.
Figure 18 above brings together many of ampliiers that were explained in this section, as experienced by Firm 21. Some of these pro-
cesses will be explained in greater detail in the following section on irm recovery. Firm 21 had compound ampliiers, since many of the factors in
the Figure 18 continually and jointly spiralled into worse conditions. Af- ter several days of waterlogging with many lakhs worth of damage, Firm
21 had to wait to resume production for several reasons. First, all of their machines were damaged, and it took them almost thirty days to regain
access to key utilities. The insurance that they received – a poorly per- forming dampener - was marginal, and not even enough to ix a single
machine. They began to repair machines in part and ran them in varying states of partial disrepair – a process that further worsened the condi-
tions of the machines. In this state, machines also require more manual oversight, but with a severly depleted labour force, this is even harder to
accomplish. All of these issues contributed to marginal production levels.
The loodwater had damaged inished goods and stocks on Firm
figuRe 18: an illustration of CoMpound aMplifiers in the business environMent
21’s premises, which cost them existing clients. They are unable to acquire new clients, who require fully automated, precision equipments, which
Firm 21 had prior to the loods. However, machines are only partially re- paired and new clients are not willing to risk an order with an enterprise
with damaged machinery.
Additionally, Firm 21 does not have access to formal inancial institu- tions, and has been denied loans on many occasions prior to the lood as well.