Shortage of Skilled Manpower: The industry initiatives
the industry initiatives
According to a recent study by the National Skill Development Corporation, the global annual logistics spend is valued at about USD 3.5 trillion. The annual logistics cost internationally varies between 9 per cent and 20 per cent of the GDP. In India, it is about 13-14 per cent of the GDP. However, with skillful handling and management it may significantly reduce. Unfortunately, the industry is still plagued by a huge shortage of skilled manpower. Cargotalk presents the industry’s perspective and the initiatives taken to address it.
The current level of skills of the people in the sector does not meet the growing demands of the industry” Malcolm Monteiro SVP & Area Director, South Asia, DHL Express
The study reveals that the logistics market is the largest in the world and accounts for one-third of the world logistics market. The global logistics industry has registered a significant growth in the last decade, wherein the big driver has been the emergence of Third Party Logistics (3PL) and Fourth Party Logistics (4PL) players in the industry who are expected to play a much more important role in the years to come.
The global logistics industry is characterised by high costs of operations, low margins, shortage of talent, infrastructural bottlenecks, alongside increasing demand from clients for providing one-stop solutions to all their needs and for investing in progressive technology. All these factors will further decrease the margins involved in this industry and fasten the process of consolidation in the industry through acquisitions, mergers and alliances.
The indian scenario
Malcolm Monteiro, SVP & Area Director, South Asia, DHL Express, believes that the Indian logistics sector is on a growth trajectory, driven by an increase in domestic consumption and increasing global trade. India is fast becoming a global manufacturing and sourcing hub for many industries. Other global practices such as e-commerce are also driving demand, compelling businesses to outsource distribution and logistics requirements to specialised service providers. This is contributing to an increase in the need of integrated solution providers.
However, manpower training for the sector has not kept pace with the changes, resulting in severe skills shortage. Logistics providers today are expected to provide complete end-to-end logistical support throughout the supply chain cycle of a business, cutting down costs and lead time. “Thus the skills and expertise required within
the industry have grown with the advent of sophisticated supply chain management. The current level of expertise and management skills of the professionals in the sector does not meet the growing demands of the industry,” said Monteiro.
Unni Nair, Chairman, LCL Logistix ( India) explained that the logistics industry in India is facing a talent crunch along with the paucity of skilled manpower. Perhaps because of this, the industry has not received an industry status yet, although it is of a massive size. Also lack of customised courses and training programmes introduced at the institutes and varsities aggravated the problem. “There are very few designated institutes (most of them are private) offering customised industry specific logistics and supply chain management programs/ courses,” he pointed out. Today, the crowd of premier institution heads towards taking a consulting job or joining a leading consulting firm handling logistics and supply chain as assignments, but does not jump into the mainstream logistic and supply chain industry. “Also, the graduates would happily join diversified conglomerates, holding an in-house logistics and supply chain arm, rather than them starting a venture in the typical logistic and supply chain industry,” he added. In his opinion, there is a lack/absence of recognised industrial training institutes specifically for imparting training towards operating and handling modern, heavy and ultra-heavy machines/equipment’s used in the logistics and transport industry.
There is a lack of recognised industrial training institutes for imparting training towards handling modern equipments used in the logistics industry
a less attractive industry According to Vineet Kanaujia, Vice President-Marketing, Safexpress, the logistics sector in India is huge and contributes 10 per cent to the country’s GDP. However, it is still an unrecognised industry and hence, an underrated sector, though its role is massive in strengthening the backbone of
the country’s economy. Accordingly, this segment is not attractive enough to woo new talents resulting in acute shortage of skilled manpower.
He observed that, despite multiple challenges and economic slowdown prevailing in the market, the industry has been witnessing six to seven per cent yearon-year growth. Paradoxically, this sunrise industry remains unsuccessful to attract qualified people. There is a serious problem at the bottom level too. Because of the fact that the logistics industry in India is completely unorganised and has a negative image, drivers and warehouse workers are also reluctant to join the logistics industry. For them, the financial benefits from this sector are not viable vis-à-vis other industry sectors.
Questioned on his inclination and long association with this segment, the young and highly qualified Kanaujia said, “I saw enough potential in this industry and fortunately got an opportunity to work with a company, which is the leader in this space.” He maintained that though the industry is not glamorous yet, the things are changing for sure. According to him, there are indications many young and well-qualified executives are joining the industry.
Srikanth Rapaka, Head – Human Resource & Administration, DIESL, finds two main reasons behind the shortage of skilled manpower. “Logistics industry is the least attractive industry for new graduates. Moreover, considering that this is still an emerging industry, there is a serious lack of technical courses available, similar to the ITI, which are more focussed towards the manufacturing sector, resulting in nonavailability of skilled or trained manpower for the logistics sector. Absence of vocational courses also adds to the challenges the industry is facing currently,” he said.
In Rapaka’s opinion, the approach has to be to ‘develop skilled manpower within the industry’. “Jobs are tough at a warehouse and are not so attractive opportunities. However, the deliverables are not rocket science. Companies need to adopt certain methods similar to that of direct sales companies. Select young undergraduates or graduates and conduct an in-house training/ induction program to equip them with the
There are very few designated institutes offering industry specific logistics and supply chain management programs” Unni Nair Chairman, LCL Logistix (India)
Logistics is still an unrecognised industry even though it plays a massive role in strengthening the country’s economy” Vineet Kanaujia Vice President-Marketing, Safexpress