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

Cargo Talk - - Shippers Perspective -

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.

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