Growth op­por­tu­ni­ties to LSPs

An anal­y­sis by Frost & Sul­li­van found that the coun­try’s trade value with coun­tries it has trade grew by 12.2 per cent in 2013-14.

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Frost & Sul­li­van re­cently con­ducted the fifth edi­tion of its an­nual strat­egy work­shop for the lo­gis­tics sec­tor un­der the theme ‘Sup­ply Chain Trans­for­ma­tions 2014’.

In this edi­tion, Frost & Sul­li­van sought an­swers on lo­gis­tics op­por­tu­ni­ties from In­dia’s in­ter­na­tional trade and emerg­ing in­dus­tries, the di­verse lo­gis­tics chal­lenges of ru­ral vs. ur­ban mar­kets, etc.

How­ever, an anal­y­sis of In­dia’s trade statis­tics (by Frost & Sul­li­van) found that the coun­try’s trade value (ex­clud­ing pe­tro­leum and oil) with coun­tries it has trade agree­ments with grew by 12.2 per cent in 201314. Sim­i­larly, it was iden­ti­fied that ru­ral pop­u­la­tion in­come and con­sumer ex­pen­di­ture has grown faster than in ur­ban ar­eas. In ad­di­tion, while over­all con­sumer goods and re­tail in­dus­try wit­nessed slug­gish growth, the or­gan­ised re­tail seg­ment wit­nessed a sub­stan­tial growth en­hanc­ing its share from less than five per cent in 2009 to ap­prox­i­mately seven per cent in 2013.

On the oc­ca­sion, VG Ra­makr­ish­nan, Man­ag­ing Di­rec­tor, South Asia, Frost & Sul­li­van said, “For lo­gis­tics ser­vice providers (LSPs) to ef­fec­tively tap op­por­tu­ni­ties in ful­fill­ing vary­ing lo­gis­tics need of in­ter­na­tional trade, emerg­ing in­dus­tries, and ru­ral mar­kets, a suit­able and spe­cific set of ca­pa­bil­i­ties for the re­spec­tive seg­ments must be pos­sessed and a col­lab­o­ra­tive ap­proach in­volv­ing lo­gis­tics end users must be adopted. Lo­gis­tics end users are in­creas­ingly open about util­is­ing shared re­sources of LSPs to gain ef­fi­cien­cies. But, lack of co­op­er­a­tion within the LSP fra­ter­nity is re­sult­ing in sev­eral in­ef­fi­cien­cies af­fect­ing all the stake­hold­ers of the lo­gis­tics fra­ter­nity.”

Dur­ing the ses­sion on lo­gis­tics op­por­tu­ni­ties from emerg­ing in­dus­tries in In­dia, the en­tire fra­ter­nity opined that on­line re­tail, health­care, elec­tron­ics and com­mu­ni­ca­tions, and re­new­able en­ergy in­dus­tries of­fer high­est po­ten­tial. The com­bined size of th­ese in­dus­tries as of 2013 was about US$ 80 bil­lion.

Speak­ers and pan­elists in this ses­sion also sug­gested that the on­line re­tail in­dus­try could dis­rupt con­ven­tional sup­ply chain mod­els of sev­eral in­dus­tries, and im­ple­men­ta­tion of the uni­form Goods and Ser­vices Tax (GST) regime in the coun­try by 2015, which could add more mo­men­tum for this in­dus­try. It was sum­marised that LSPs need to gain ca­pa­bil­i­ties to support in­no­va­tive sup­ply chain and inventory man­age­ment mod­els, along with tech­nol­ogy en­abled vis­i­bil­ity to ful­fill the needs of th­ese emerg­ing in­dus­tries.The work­shop con­cluded with the ses­sion on ad­dress­ing di­verse lo­gis­tics needs of ur­ban and ru­ral mar­kets.

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