Genex Logistics Coverage in Cargotalk - December'14 issue
8 CARGOTALK D E C E M B E R 2 0 1 4 DEBATE
In search of a sustainable SCM
It is prima facie that Supply Chain management (SCM) is simply moving a product or service from supplier to
customer. However with the booming technology, supply has an important role to play in the efficient logistics
system. In this issue, CARGOTALK focused on the challenges that hinder the smooth transportation.
Mansingh Jaswal, Director & CEO, Genex Logistics
Today’s supply chain needs to deal with continuous volatility
and that does not mean risk only but also opportunity when a
competitor is not being able to deliver the same. In this process
of evolution, the pace of change has increased manifold and
technology has been at the helm of affairs, either to create the pace
or manage it. Shippers are under continuous pressure to reduce
supply chain costs as part of larger organisational goals.
Largely the cost reduction has to come from
two sources, either from simple incremental
improvement in the ongoing process or from business
Most of the activities of an end-to-end supply chain happen outside the four walls of a warehouse
and companies are largely looking at wireless solutions.
However, the fact that the pace of change in technology is almost catching up with the expectations
of the end consumer or the development in technology is raising the expectations of consumers. A lot
of integration and automation upgrades still need to happen among shippers and 3PL providers to
incorporate the emerging technology. E-commerce is a typical example of the role of logistics in busi-ness
model creation. This is also an example of how technologies are deployed to bridge the gap
between customer expectations and delivery. It does not end here, rather this has raised the expectations
of consumers, resulting in the ongoing spiral that technology is creating.
Hig h l i gh t s:
SA Mohan, CEO, Maini Materials Movement
The supply chain in India is largely inefficient,
causing huge losses and stock-outs appertaining to
the presence of intermediaries, infrastructural inade-quacy
and complicated legislation. 13 per cent of
India’s GDP is spent on logistics, which is an alarming
fact. Proliferation of challenges in areas of reverse
logistics, environmental sustainability, information
technology and overall supply chain integration are
further evolving the strategic roles and responsibilities
of warehousing and material handling solutions in the
growing field of intralogistics.
Amalgamating new technology to increase efficiency of information exchanged
whether through automation, Warehouse Management System (WMS), lean designs
and vertical expansion, for example, high rise warehousing and distribution centres
is not a nascent concept anymore. Today, it is observed to be a prerequisite for gaining
competitive advantage and can help significantly increase customer service and
The challenge for supply chain professionals lies in managing
not only long-term growth but also in being equally responsive to
short-term volatility, due to ever increasing consumer segments,
greater number of products and emergence of new channels.
Statistical capabilities, enhanced by technology, will enable us to take a leap towards
smart supply chains and foster innovation adoption.
Vikas Anand, Managing Director, DHL Supply Chain
IT is now perceived as a key enabler for all logistics offerings
with companies relying heavily on IT automated solutions to ensure
smooth logistics operations, which revolve mainly around WMS,
TMS, EDI integration and visibility tools. India is a market with enor-mous
growth potential for 3PL activity for those who can bring in
value-for-money services of modern standards. While it is true that
this industry is still in its nascent stage in India, things have picked
up very rapidly in the recent past with more and more manufacturers
realising the need for credible and experienced 3PL providers.
Our infrastructure needs to be developed and while India is
increasing outlays on roads and ports along with more tangible economic reforms, these infrastructure
development projects have a long gestation period. We welcome the change and infrastructure
upgrades that are taking place as these will benefit and facilitate our services to our clients.
In India, logistics costs are very high compared to international standards owing to its underde-veloped
infrastructure. Steps are being taken to improve the infrastructure, but the pace seems slower
than the economic growth. Acceleration of road network improvement and expansion would mean
huge savings on fuel, greener environment, enhanced safety and better turnaround time for customers.
Jitender Panjwani , Head – Supply Chain, India
There is a need to develop infrastructure to improve the
Supply Chain Management function and a better reach to
Roads are congested and of poor quality: Lane capacity is
low; national highways are two lanes or less and a quarter of all
India's highways are congested. Many roads are of poor quality
and maintenance remains underfunded. More or less one-third of
maintenance needs are met and this leads to the deterioration of
roads and high transport costs for users.
Railways are facing severe capacity constraints: All the country’s high-density rail corridors face
severe capacity constraints. Freight transportation costs by rail are much higher than in most countries
as freight tariffs in India have been kept high to subsidise passenger traffic.
There has to be an immediate focus on trade lanes; on road connections and where road trans-portation
is taking place. An immediate improvement in current infrastructure is required with safety
and security for goods. Special cargo trains and unique material handling hubs with special features
to cater volumes with minimal mishandling is the need of the hour for effective and responsive supply
chain. Major improvements, such as good physical connectivity in the sector, are required to witness
a rise in demand.
Technology is driving business and efficiency but there is a need
to look at cost also
Technology development puts the older organisations under tremen-dous
The e-commerce industry created the need for complex and sophis-ticated
order fulfillment processes
Complex tax structure could be one of the reasons for the lack of
economical options in warehouse and logistics
Innovation towards vertical specific solutions will be the key dif-ferentiator
and business initiators
Automation drive at customs, airports and ports in coming years
will drive trade to adopt newer ways to do business
The challenge for professionals lies in managing not only
long-term growth, but also in being equally responsive to short-term
Need better roads and quick pass-through of trucks at
There is a close correlation of technology and efficiency but
necessities for performance and efficiency cannot be ignored
Adopt technology in a way to reduce operating costs and increasing
DEBATE D E C E M B E R 2 0 1 4 CARGOTALK 9
Prashant Bopardikar, Chief – Projects Design, Future Supply Chain
The world is changing today, especially India where, with the advent of e-commerce,
efficiencies and ‘customer first focus’ supply chain is
under continuous pressure to deliver what it commits.
Today the supply chain has an important role to play to
improve the firm’s profitability by reducing cost and time
to market. Supply chain definitions have to change. It has
to be more flexible, agile and customer centric. This is to
ensure the final consumer gets what he or she has
demanded on time and in full.
Being able to identify and respond to events in time
can be the difference between staying ahead of compe-tition
or falling behind. Therefore, companies are looking
for better ways to control the end-to-end supply chain.
Current supply chain is continuously evolving and adapt-ing
to changing needs that are driven by customer demand and preferences. Certainly there
are roadblocks which need to be addressed and worked upon
• We need better roads, quick pass-through of the trucks at state bor-ders,
which means documentation has to be less extensive and quick.
With the new government prioritising the GST roll out in the near
future, it seems to be a reality
• Use EDI to link all the legs in the supply chain for visibility across all
stakeholders. With proliferation of e-commerce, this aspect is improv-ing
but it needs speed
• Invest in technology and automation as a long term strategic invest-ment
• Multimodal infrastructure is not completely evolved; a greater focus
is needed on this in terms of developing infrastructure through logistic
parks, which provide flexibility to customer to use road, rail, air and
Devdip Purkayastha, President, CHEP India
A recent report from a leading international consultant titled ‘Building India:
Transforming the nation’s logistics infrastructure’ mentions that around $45 billion
is lost each year due to the inefficiencies in India’s logistics network. One of the
parameters contributing to this huge loss of efficiency is non-standards in the entire
supply chain. This leads us to a debate on how to make our supply chains smarter.
There are multiple dimensions on how this can be achieved, including adopting
technology, robotics, robust processes, adhering to standards, developing internal
infrastructure and most importantly skillful management.
For warehouses to be deemed ‘Smart’, it should enable the movement of
goods by ‘the least touch method’. One key component is how material is handled
smarter at the warehouses. While most consultants and experts will talk about adopting hi-tech
and high-cost automation opportunities, it is really about getting the basics right.
Today, in India bottlenecks are created as goods move through the
supply chain. It is important that this flow is seamless as goods move from supplier
to manufacturer to 3PL to retail. Warehousing is one of the key pieces of this
Technology definitely helps but the question is at what cost. Technology that
may work in a developed market, where labour is scarce and hence expensive,
may not make good business sense in India. Again it comes to basics, we
have our racking systems, material handling equipment, docks and handling plat-forms
such as pallets optimised to enable high throughput. Are there
standards that enable ‘least touch’ in the warehouse? Does our warehousing
support collaboration internally within our own supply chain or externally across
suppliers as well as customers’ supply chains? Are the warehouses compatible?
Many supply chain managers are adopting these basics and technologies that can reduce
operating costs and increase productivity.
Shesh Kulkarni, President CEO, UFMI
Technology is a necessity these days; it is increasingly get-ting
imperative that the logistics industry at large, embraces tech-nology
wholeheartedly. Organisations which fail to do so will be
left behind in the coming years.
With the growing demand of consumers and increasing use
of e-commerce, the ease of transacting business for consumers
and retail companies has become very easy. All this is enabled
by an efficient technology platform. ‘Billion Sale’ by Flipkart is a
classic example of how technology is driving business and effi-ciency.
But the question remains, is industry ready to support
this. Many companies are building their own infrastructure for
on-time delivery of goods, and, the primary reason is cost.
The model of e-commerce business and its ability to make money is still not clear to many.
Therefore, the logistics industry today is not ready to support e-commerce business, barring a
select few who have heavy assets and are leveraging this. For larger logistics industry to see
benefit, and for them to experience gain from growth, it is still a challenge to bring their cost of
The automation drive at customs, airport and ports in the coming years is going to be very
interesting, and it will drive trade to adopt newer ways to do business. Future seems promising!
Suunil Dabral, Country Head, Schaefer Systems
Changing trends in customer’s needs and purchasing power
calls for ‘Just in Time’ and quick response inventory management,
in order to meet the demand supply mismatch. In most of the sup-ply
chains such as e-commerce and the fashion industry, distribu-tion
channels from conventional retail and home deliveries, trans-porting
individual orders directly to local stores or other pickup
points are becoming more varied and complex. The increasing
trends in the e-commerce industry are creating the need for com-plex
and sophisticated order fulfilment processes. Management
of these processes requires software and automated technologies
with the increase in number of orders.
In order to meet these uncertain future requirements and also to minimise distribution costs ,
an efficient supply chain has an important role to play. Complex tax structure could be one of the rea-sons
why manufacturers and distributors implement the most economical options in warehouse and
logistics, ignoring quality and efficiency. At present, companies handling manufacturing and distribution
design their supply chains to reduce operational cost instead of value creation.
Subhasish Ghosh, Director – Information Technology,
Technology is an important enabler for the efficiency of supply
chain and complements it in the on-ground implementation. We see
that cost and time factors can be made more favourable by using
state-of-the-art technology for the supply chain which would bring
in more efficiency and saving for customers. Modern day supply
chain runs on technology and the dependency is increasing con-tinuously.
Companies are investing a fair amount of resources in
upgrading the technology to increase their efficiency. On the other
hand, customers are more demanding than ever and as a service
provider we are committed to fulfilling their expectations.
In today’s world, we have access to technology however the implementation is very subjective
as per the requirement of our customers and local market. In the Indian context, both are going hand
in hand as far as internal or controllable factors are concerned; for others we have to be largely depend-ent
on other external factors like market, infrastructure and policies. So there is a close correlation of
technology and efficiency but necessities for performance and efficiency cannot be ignored. Innovation
towards vertical specific solution will be the key differentiator and business initiator.
Akash Bansal, Head – Logistics, Om Logistics
To survive on the long and bumpy ride through the
recent recession, many retail logistics executives focussed
on cost reduction. However, this necessary objective drove
important changes in the supply chain strategy, from net-work
right-sizing to innovative warehouse automation and
energy-efficiency tactics. Now that the economy is
rebounding, and rising costs are on the horizon, every sup-ply
chain strategy must address this new reality. An
increased focus on channelising strategies and the need
for faster delivery of more goods to more places could
cause some pain. It is high time for industries to reassess their supply chain.
One concern that always awakes the supply chain professionals is transportation costs.
Trucks are responsible for transporting more than 80 per cent of consumer goods but with
economic recovery, looming driver shortage and new federal regulations are expected to limit
capacity and trucking costs are on the rise. This declining supply could leave supply chains
in the tilt when they need capacity the most.
Next and same-day delivery is on the fast track to becoming table stakes for retailers.
To achieve these tight delivery times without asking customers to foot the bill, one should
expand the distribution network to incorporate regional distribution centres in strategic markets.
Location decisions based on manufacturing costs alone could ultimately cost more.
As markets change and customer bases shift, the cost of transporting products to consumers
could outweigh the value of lower manufacturing costs. To counter this, we should adopt
region based manufacturing strategies. Making or sourcing products in the same region
where they are consumed can reduce transport times, complexity and risk, and ultimately
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