Mit­i­gat­ing gaps in au­to­mo­tive lo­gis­tics

SIAM’s Au­to­mo­tive Lo­gis­tics Con­clave called for higher in­dus­try par­tic­i­pa­tion to en­sure good growth.

Commercial Vehicle - - WHAT'S INSIDE - Story by: Gun­jan Bi­dani

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.

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