Kill hic­cups with bet­ter trans­porta­tion

Cargo Talk - - Shippers Question -

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

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