Kill hiccups with better transportation
Efficient transport systems result in positive multipliers such as better accessibility to markets, employment and additional investments. Ravi Singh, CEO & Managing Director, Essar Steel Hypermarket informs about the growth in production of steel over the last decade along side the development of logistics industry.
How do you foresee the future of logistics market of the manufacturing and retail sector in India? Vision 2020
The Indian logistics industry is growing fast but still a lot work is required in terms of infrastructure support. By 2020, India will be a country with a well-developed network of roads and railways and adequate capacity to handle the growth in demand for transport. It is expected that the volume of road traffic will multiply about five-fold, carried over a 70,000 km network of National Highways, including 5,000 to 10,000 km of expressways linking the golden quadrangle of Delhi-MumbaiChennai-Kolkata-Delhi as well as northern, southern, eastern and western portions of the country mostly with four or more lanes. State Highways with at least two way lanes will link most districts.
How important is efficient logistics for your overall growth? Please give brief details of your overall growth also.
Development is directed at improving the welfare of a society through appropriate social, political and economic conditions.
The expected outcomes are quantitative and qualitative improvements in human capital as well as physical capital such as infrastructure. Because of its intensive use of infrastructure, the transport sector is an important component of the economy and a common tool used for development. This is even more so in a global economy where economic opportunities are increasingly related to the mobility of people, goods and infor- mation. A relation between the quantity and quality of transport infrastructure and the level of economic development is apparent. High density transport infrastructure and highly connected networks are commonly associated with high levels of development. When transport systems are efficient, they provide economic and social opportunities and benefits that result in positive multipliers effects such as better accessibility to markets, employment and additional investments.
In the similar fashion the growth in production of steel over the last decade has moved alongside the development of logistics industry.
What are the crucial bottlenecks faced by this sector?
The policies that restrict, and raise the cost of, international flows of goods, services and knowledge are increasingly domestic and of a regulatory nature – the so called nontariff measures (NTMs). Examples are product regulations (purportedly to achieve health, safety or security objectives), licensing requirements, certification and conformity assessment procedures, data reporting standards, various check post and barriers for different states and different requirements.
Is there any unique/specific strategy that you have adopted for better supply of products?
A key strategy adopted in the most efficient and economical ways of utilising the coastal and rail movement is the introduction of higher capacity vehicle as it’s the most compatible for the product.
How do you manage back-end supply?
The supply chain management is the logistics aspect of a value delivery chain. It comprises all of the parties that participate in the retail logistics process: Manufacturers, wholesalers, third party specialists like shippers, order fulfillment house, etc. and the retailer. Here, logistics is the total process of planning, implementing and coordinating the physical movement of merchandise from manufacturer to retailer to customer in the most timely, effective and cost efficient manner possible. Logistics regards order processing and fulfillment, transportation, warehousing, cus- tomer service and inventory management as interdependent functions in the value delivery chain. It oversees inventory management decisions as items travel through a retail supply chain. If a logistics system works well, the retail reduces stock outs, hold down inventories and improve customer service – all at the same time.
Timing is the critical factor. How do you manage the balance between internal operation and supply chain requirements?
It’s always a challenge to strike a balance between internal operation and supply chain reason considering the complexity involved in the manufacturing process and the time period required for the production. Even the variation on the variants of products further adds to its complexity. To manage the situation, we work on N- 45 days’ cycle.
What percentage of your logistics work is outsourced? What functions are performed by your logistics partners and what are controlled internally?
In a way outsourcing is to the extent of 100 per cent, but to an internal group company.
Ravi Singh CEO & Managing Director Essar Steel Hypermarket