The logistics of metamorphosis
The Logistics Summit 2016 organised by CII in Mumbai reflected on the gradual transformation of the industry and the measures it needs to adopt to reach its full potential.
Logistics contributes around 13 per cent to GDP. But there is possibility to increase this. It is important to see how much we can do improve our profits. Some of the internal challenges are: inventory, damages and delays. The cost of technology has fallen dramatically now and automation is the answer to a lot of problems. But companies need to keep in mind three key factors when adopting it: choice of technology, its usage and the objective of the technology. Companies also need to figure how they can engage the customer better. Ajit Jangle Member, CII Committee on Logistics & Group COO, AllCargo Logistics We continue to struggle with problems like infrastructure but it’s still good to take stock. In 2000, of the top 10 ports in the world, seven were in Europe and North America. Now, the top seven are in Asia, especially China. At one time, India aspired to be like the US and Europe but today these countries face their own set of challenges like aging infrastructure. China, South Korea and Singapore are what we should be aspiring to now. Fortunately, India is moving very quickly in this direction and it is therefore important to take stock. Prahlad Tanwar Director –Transport & Logistics, KPMG There is a need for multiple modes of transport because there are a lot of challenges for using a single mode. Costs are not optimal and therefore may not provide deliveries as per desired schedule. It also may not provide the right capacity nor provide end-to-end connectivity. The key challenges for this are: there are different regulatory/governing bodies for each transport mode, there are multiple regulatory bodies even in single transport mode, and there is a lack of unified vision and planning of transport networks. The easiest way to do this is to start with public transport and extend it to cargo transport. Srinath Manda Associate Director–Automative & Transportation, MarketsandMarkets Currently, around 15,000 km of road construction is going on. We
`70,000 have a budget of around crore for roads. The ambitious ‘Setu Bharatam’ programme
`50,000 with an investment of crore was flagged off early this year. We will be rolling out electronic toll systems pan-India on selected toll plazas. We will also try to incentivise it by offering a 10 per cent discount. This subsidy will be a burden to the ministry but it will help the end users. At the moment, there are mostly singleowner trucks plying. Wayside amenities are also on the agenda and we have identified 35 locations. Leena Nandan Joint Secretary, Ministry of Road Transport & Highways, GoI India has about 7,000 freight forwarders earning revenue of `400-450
billion. India needs an integrated logistics policy like Germany where logistics is third-largest industry in terms of revenue. We need qualified young people and more skilled people at the bottom of the pyramid. You need skills in warehousing management too. You need people in all areas of the supply chain. Automation has its limitations and sometimes you need a human interface. But there is no real end-to-end solution; we have to depend on someone else. Pramod Sant VP (Head of Import & Export) Export Control & Custom, Siemens The cost of logistics in a developed country is six to seven per cent while the same in India is about 14 per cent. But how many CFOs of companies go into the nuts and bolts? There is a mandate for logistics head to create a supply chain network which is fast and furious which means it should be cheap and visible and trackable. To ensure zero risks, the operations require 24x7 because the customer who is finally the end-user is going to expect the delivery at any and all times especially with the e-commerce boom. Two ingredients are necessary for transformation: absolute transparency with your service provider and spirit of partnership, instead of having a push-based model have a pull-based model. Vikram Mansukhani Head – 3PLS, DIESL