Gearing Indian logistics for a tough game .......................................................................
Despite having the suitable resources, the country’s logistics sector is not performing up to the mark. Industry experts share the present scenario and future needs of the cargo industry to make it on a par with the international standards.
S Ramakrishna CMD, Balaji Mariline
The logistics industry is dependent on the establishment of the economy of scale in manufacturing which has a direct accessibility of raw material, consumption of finished product and excess of finished product to be redistributed or exported. The other aspect is the climatic conditions in various places in India itself. If the fundamental phenomenon is understood and industrialisation happens then the industry would grow by leaps and bounds. In the pre-1985 period, more than 70 per cent of the ex-im trade was from North of India. The first inland container depot came up in Pragati Maidan and thereafter, in Tuglakabad, thus, establishing multimodal activity in the true sense.
The Indian logistics players are not limiting their activity to local level but also to neighbouring countries like Bangladesh, Bhutan, Nepal, Pakistan, etc., by road apart from sea to Sri Lanka, Bangladesh and Pakistan. The government is also looking from creating air hubs in India, therefore there is true potentiality in India and we are also striving to reach the goal. But are we achieving our goals in more professional and scientific manner?
With the advent of dedicated rail corridor both in east and west; Sagarmala Project, inland waterways, etc, the length and breadth of the country has been made accessible. It is very much manageable from few locations instead of every location. We would achieve further with more technological advents. On the international standards, with diversity in all spheres there is no ideal model which can be adopted. We would have to develop our own model to sustain the growth, competition, professionalism and human resources who are not well trained. We are looked upon by the entire world for their future prospect in the international arena of trade and commerce, therefore, there is less of a doubt that supply chain management would find its place especially with our advanced knowledge of software.
Harpreet Singh Malhotra Chairman & Managing Director, Tiger Logistics (India)
Infrastructural problems like bad road conditions, poor connectivity, inadequate air and sea port capacities and lack of development of modes of transports like railways and alternates like inland water transport and domestic aviation have been constant irritants. Pipelines constitute a very minor proportion. There are other problems also such as complex regulatory compliances and limited adoption and utilisation of technology, which has resulted in increased paper work and inability to communicate effectively with customers. Apart from all these issues, lack of skilled labour is also a big hindrance in growth of Indian logistics industry.
The sector, particularly the shipping and truck hire service providers are now spending a significant amount of money on integrating latest technologies like cloud computing, Internet of Things (IoT), robotics and many more.
Coordination in infrastructure planning will need to happen not only to truly bottlenecks, but also to avoid overlap and attendant extra costs. Tax regimes and recovery procedures continue to be cumbersome and time consuming. Urban planning today does not appear to factor in the enormous volumes of goods distribution catering to urban conglomerations in terms of road and peripheral infrastructure resulting in traffic restrictions and serious bottlenecks and logjams. This needs to be paid special attention by our planners. Finally, the regulatory agencies do not facilitate proactive and participative dialogue with the industry. Blueprints and policy regulations today are a largely one-sided affair. This makes policies prone to avoidable trial and error events.
Vikram Mansukhani Head - 3PL Division, TVSLSL
At this current time and place, the gap between user expectation and service provider capability to fulfill the expectation leaves much to be desired. The gap is caused by a variety of reasons on both sides such as – The user not willing to share complete information with the service partner
The relationship being based purely on price point and not on a thorough evaluation of knowledge, capability and compliance adherence of the service partner Service partner wanting to cut corners to enhance margins
These are fundamental traits of a relationship created out of a procurement mindset versus a co-creation mindset and destined to fail as both parties are neither aligned in terms of the end goal nor are they creating a win-win scenario. While the resources are available in plenty, it is important to categorise these resources into skilled/unskilled; critical/non-critical and expense versus investment buckets. It is extremely important that the users share their operational requirements and challenges transparently with the supply chain service providers. It is then for the service provider to earn its badge of honour by deploying the best-fit solution from a cost and service standpoint to ensure that the customer’s supply chain becomes lean, nimble and visible.
In order to make logistics/supply chain in India truly world class, the need of the hour is better road networks, higher adoption of rail networks and waterways, churning out supply chain professionals across all levels from the management as well as vocational schools, adoption of a higher level of IR enabled and mechanised operations. It is very important to define what supply chain encompasses. If it includes logistics as well as procurement of raw materials/finished goods, then the importance of effective SCM needs no description or explanation. Even if it were to cover only logistics, the relevance of today’s ever increasing requirements of JIT and OTIF puts immense focus on the need for a service partner who understands not only his own but also his customers business completely.