Better synergy for seamless supply chain
The Indian automotive logistics market is expected to grow as changes are bubbling under the surface. Kalpesh Pathak, Assistant Vice-President - SCM, FIAT India Automobiles, believes that besides OEMs, each LSP needs to understand customer expectations i
How do you foresee the future of automotive logistics market in India with respect to Vision 2020?
The long-term fundamentals of automotive logistics market are very strong. Due to the slowdown in the last few years, the market has lacked buoyancy. However, it is certain that
‘Acche din aane wale hai’, if we look at the per capita consumption of automobiles in India, contrary to developed or other developing markets. I am quite confident about the growth of automotive logistics market by 2020.
Growth in OE business shall lead to the growth of logistics business too; the Government is also looking at some long-pending policy decisions, which will boost the automotive market, and the economy too. The indicated expectations for auto industry to contribute to 25 per cent of the total manufacturing GDP shall be a huge impetus to automotive logistics growth.
How important is efficient logistics for your overall growth?
Today, the competition is driven by supply chain efficiencies for every business. Logistics costs are making or breaking business proposals, since technology and manufacturing process are no more differentiators in most products and services.
In regards to the growth of our company, we are targetting new products for our customers including new engine and transmission platforms. Also, we are focussing on export strategy, which will help us grow faster than what we are today in export markets too. With such a huge growth trajectory, our supply chain will require a huge transformation from the current state to make it flexible, agile and adaptable to shortterm fluctuations. We are trying to work on an innovative inbound model, which will make sure our logistics cost remains one of the best to help us meet customer expectations from the cost standpoint.
How do you manage your back-end supply?
We have state-of-the-art backend supply chain facilities. We have our own warehouses for imported parts, and for ‘B’ and ‘C’ class parts, we manage small warehouses. All ‘A’ class parts are largely handled through the ‘just-in-time’ concept. These parts are handled directly from the suppliers’ facility to our line, or in few cases, the parts are routed through vendormanaged warehouses.
Due to infrastructural bottlenecks, we do face certain roadblocks in terms of meeting window delivery reliability.
What are your expectations from LSPs?
With a very complex supply chain in automotive original equipment manufacturers (OEM), LSPs have become an integral part of the OEM supply chain. Not only do OEMs need to understand customer expectations, but each LSP in the entire chain also needs to be aligned to the same. As a complete chain, we should be able to deliver the product or solution in line with the end customer’s expectations.
LSPs need to drive their business strategies as a leadership role, and not as follower role (only follow- ing what the OEM asks them to do). They need to integrate their operations with technologies available to enhance visibility of the chain on a real time basis. We are availing services from BLG-Parekh, OM Logistics, TVS logistics, DHL, CHEP, etc.
Timing is a critical factor. How do you manage the balance between internal operations and supplychain requirements?
We have strong business processes and procedures, which are well defined at the global level for each operational activity. We have modulated the same to include Indiaspecific requirements, depending on the local environment.
There is a strong induction platform. When any new employee joins, he has to undergo the induction programme to understand and practice all procedures. This has helped us to inculcate process-driven culture and minimise the disruption, which otherwise leads to inefficiency in the whole supply chain.