Mitigating gaps in automotive logistics
SIAM’s Automotive Logistics Conclave called for higher industry participation to ensure good growth.
SIAM's Automotive Logistics Conclave called for higher industry participation to ensure good growth.
Delving upon the opportunities and challenges that are a part of the Indian logistics sector, SIAM Automotive Logistics Conclave 2018, held at Delhi, called upon the industry for higher participation to ensure good growth. Bringing together business leaders to focus upon the nitty gritties like fluctuating fuel prices, skill sets, lack of multi-modal transport and the thrust on digitisation, the two-day event put the spotlight on sectoral growth, albeit disruptive with various opportunities to look at. Pointing at the challenges the automotive logistics space faces in particular, Prem K Verma, Chairman, SIAM Logistics Group and Project Leader- Tata Motors, in his address (as part of the inaugural session with a theme – ‘Value Creation through Operational Efficiency’), said that the automotive logistics industry is in need of skilled people. He stated that there was a need to focus on skill development, and to ensure efficiency as well as save costs in the supply chain. Averred Verma, “The current situation
needs improvement, and there is a good deal of scope.”
Anurag Mehrotra, Managing Director, Ford India, drew attention to road transport as the most expensive mode of automotive logistics, and also the most preferred. Mentioning that this mode dominates, Mehrotra said that the ongoing struggle of the OEMs and vehice manufacturers needs to be addressed at the earliest. He urged the government to create an efficient multimodal infrastructure with adequate policy support. Asserting that logistics have been playing a strategic role in the development of Indian economy, Mehrotra expressed, “The need is to be obsessed with technology, and to be operationally fit.” “It is difficult to know if Amazon is a technology company or a logistics company. The industry needs to be rather ruthless about efficiency,” he commented. He also highlighted the need to inculcate and employ the best technology, and to work closely with automotive OEMs to ensure that their requirements are met.
Focusing on the mandate to develop and modernise multimodal transport, a session with the theme, ‘Auto Logistics: Way Forward’ saw Colonel Prashant Mishra, Director (Operations), Land Port Authority of India, say that the development of a modern multi-modal transport system will ensure robust growth of the logistics sector. To smoothen cross-border movements, he averred, the agency (Land Port Authority of India) has been given the mandate to develop and upgrade land-based transport infrastructure and construct the missing links at the borders to facilitate uninterrupted cross-border movement of goods. “About 50 per cent of the auto sector’s requirements concerning Bangladesh and about 90 per cent concerning Nepal are met by India. In a scenario like this, the crossing points should be modernised on a priority basis.” opined Mishra. “There are more than 100 border crossing points, of which 69 are functional,” he pointed out. In her speech, Dr. Monica Agnihotri, Executive Director (Freight Marketing), Ministry of Railways, said that the Indian railways freight service is playing an important role in India’s logistics sector. “The fast track to development is undoubtedly powered by Indian Railways freight service. It also takes care of India’s logistics, which comprises of both large and small consignments, she mentioned. Anticipating big growth in the sector, Dr. Agnihotri, averred, “More rakes and terminals are coming up. The number of rakes load has gone up to 933 during last year as compared to 427 in FY2013-14.”
In his address, B Krishnamoorthy, Executive Director (Indian Ports Association), said that coastal shipping is inherently cheaper and less congested. Stating that it has certain limitations, Krishnamoorthy said, “Vehicles can be picked up from the manufacturing facility in India and shipped in a cost-effective way. The challenges that need to be addressed however is the longer transit time and multiple handling.” Revealing that the government is working to expand the western and eastern coastal regions for shipping goods, Krishnamoorthy expressed, “The absence of backhaul on both eastern and western routes is a concern.”
As part of a theme that delved upon vitalising multi-modal logistics, Shashi Bhushan Shukla, Member (Traffic), Inland Waterways Authority of India, in his address, stated that extensive development is taking place in Inland waterways. “The National Waterways-1 now has four permanent terminals and 19 floating terminals,” he said. Opining that the auto industy will be in a position to leverage such a logistics arrangement to increase its efficiency, Shukla mentioned, “The focus is very much on inland waterways and coastal shipping.” “The ongoing projects include three multimodal and two inter-modal terminals,” he added.
Informing that manufacturers in south India could access the Nepal markets using the multi-modal transportation using National Waterway-1, Shukla expressed that a big terminal being is being built at Haldia at a cost of Rs.500 crores, which would help to transport as well as connect with the north-eastern states. Amit Bhardwaj, Deputy Advisor (Transport), NITI Aayog, in his address, said that the government will have a data analytics center besides a single window logistics for emarketplace and a National Logistics Action Plan for the next 25 years. “We have started benchmarking logistics on the global stage. We are closely analysing the logistic index of World Bank. We are identifying commodity specific interventions and the kind of synergies we can create with various players. We are soon coming up with National Logistics portal, which will be a single window for the logistics industry. The logistics industry has poor standards and needs to work on standardisation. The industry has the potential and will provide 20 million jobs by 2022,” asserted Bhardwaj. Waman Parkhi, Partner, KPMG, expressed that GRIP (GST, Regulatory, Infrastructure, and Partnership) is creating value for each partner in the value chain, and especially in the logistics industry. “We are talking about GST as a game changer”, he averred. Mentioned Jasjit Sethi, CEO, TCI Supply Chain Solutions, that standardisation of process and practices with controls based on technology and digitisation is necessary for quality infrastructure. The immediate requirements for the logistics industry as it moves to the next level of growth, the parameters which the industry has to look at are transit, safety, cost, and asset utilisation, said Sethi. Raman Kumar Sharma, CEO, Automobile Skill Development Council (ASDC), stressed on skill development of drivers. He also called for a need to develop good facilities for drivers to ensure retention of talent. “Drivers are key to logistics growth and must be treated on par with professionals. They should be treated on par with those that pass from premier technological institutions,” he opined.