1. ONDC's Potential Economic Impact
To understand the significance of ONDC for manufacturing, we must first consider the economic impact it can generate:
- As of 2020, the manufacturing sector contributed approximately $2.2 trillion to the global economy, accounting for 14% of global GDP, according to the World Bank.
- The Indian manufacturing sector contributes around 16-17% to the country's GDP. With ONDC's potential to enhance efficiency and expand reach, this percentage is poised to grow significantly.
2. Addressing Supply Chain Challenges
The manufacturing sector faces numerous supply chain challenges. ONDC aims to address these issues head-on:
- McKinsey reports that inefficient supply chain management can lead to manufacturing companies losing 20-30% of their potential earnings.
- The World Economic Forum's Global Risks Report 2021 highlights supply chain disruptions as a top concern for businesses. ONDC's streamlined supply chain management capabilities can mitigate these disruptions.
3. Empowering SMEs
Small and medium-sized manufacturing enterprises (SMEs) play a pivotal role in India's economy:
- SMEs constitute over 90% of manufacturing units in India and contribute around 40% to the country's total exports.
- ONDC empowers SMEs by providing them with a digital platform to compete with larger players, potentially driving growth and export figures upward.
4. Blockchain Technology and Security
One of ONDC's key strengths is its use of blockchain technology, renowned for its security features:
- According to a Deloitte survey, 84% of executives believe that blockchain technology is more secure than conventional systems.
- The International Chamber of Commerce estimates the global cost of counterfeiting to be over $1.2 trillion annually. ONDC's blockchain capabilities can significantly reduce this threat.
5. Driving Digital Transformation
Digital transformation is pivotal for manufacturing companies:
- A study by the Boston Consulting Group (BCG) found that companies fully embracing digital transformation achieve a 55% higher EBITDA margin compared to their industry average.
- The World Economic Forum notes that digitalization can reduce operating costs in manufacturing by up to 12%.
6. International Expansion
India aims to increase its share in global exports:
- In 2020, India's share in global exports stood at 1.7%. The Foreign Trade Policy envisions increasing this figure to around 5% by 2025.
- ONDC's support for international transactions and logistics integration positions Indian manufacturing for global expansion.
7. Embracing Sustainability
Consumer demand for sustainable products is on the rise:
- A Nielsen report reveals that 81% of global consumers feel strongly that companies should help improve the environment.
- ONDC's emphasis on transparency in the supply chain aligns with the growing demand for sustainable and ethically sourced products.
How ONDC Works
ONDC operates as a digital ecosystem with various stakeholders, including manufacturers, suppliers, distributors, retailers, and consumers. Here's a simplified overview of how it works:
- Registration: Manufacturers and other businesses register on the ONDC platform, providing information about their products, services, and business details.
- Product Listing: Manufacturers list their products and services on the platform, including detailed descriptions, prices, and specifications.
- Search and Discovery: Buyers and retailers can search for products and suppliers on ONDC. The platform uses advanced algorithms to match buyers with the most suitable suppliers based on their requirements.
- Transactions: Buyers can place orders and make payments securely through the platform. ONDC supports various payment options, making transactions convenient for all parties.
- Supply Chain Management: ONDC integrates with logistics partners to facilitate the movement of goods from manufacturers to buyers efficiently.
- Data Insights: Manufacturers can access valuable data insights and analytics to make data-driven decisions, optimize their operations, and identify market trends.
ONDC, the Open Network for Digital Commerce, is poised to revolutionize the manufacturing industry in India and beyond. Its potential economic impact, ability to address supply chain challenges, and support for SMEs, blockchain technology, digital transformation, international expansion, and sustainability make it a powerful tool for manufacturers. As ONDC continues to evolve, it has the potential to be a transformative force, enhancing efficiency, security, and sustainability across the manufacturing sector. Manufacturing companies that embrace ONDC stand to gain a competitive edge in the digital age.