Efficient management of goods, once they arrive at Indian ports, is a challenge faced by many retailers, distribution centers, procurement centres even e-tailers. However, their predicament doesn’t end there. Once these products are transported to their stores, visibility, control and freight costs are a cause of concern for industry leaders.
Dealing with visibility issues
The issues related to visibility of status can be dealt through efficient logistic management which ensures speedy delivery of products. This includes transportation, inventory management, warehousing, material handling and packaging as well as integration of information is related to management of flow of goods between the point of origin and the point of consumption.
Controlling shipping and freight costs
While the route for shipping of materials and products is mostly determined by the companies; it is decided by the buyers if the cost is borne by them. In such cases, selection of carriers, identification and tracking of products cannot be controlled properly and buyers have to pay more for shipment. In certain cases, low availability and small investments in Information Technology can increase freight charges. Analysing areas that cause this increase can eliminate such losses. If a robust transportation management system is implemented at the company for shipping it will solve many issues.
Evolution of Indian warehousing
Indian warehousing has evolved from glorified godowns to modern, technically fitted floors with the computerised specifications. Low grade steel godowns are being replaced by pre-engineered systems. These modern warehouses are insulated, ventilated and climate-proof with round the clock surveillance and standard quality and safety procedures. Current industry estimates show warehouse space in India will grow from 909.5 million sq. ft. to about 1439 million sq. ft. by the end of 2020.
Emergence of new logistics concepts
With the evolution of the logistic industry, the concept of third-party logistics (3PL) and fourth-party logistics (4PL) have emerged. Here, companies provide outsourced logistics services to companies for part, or sometimes all of their supply chain management functions. These service providers specialise in integrated operation, warehousing, and transportation services that can be scaled and customised as per the market conditions and the demands and delivery service requirements for their products and materials.
GST and more drive logistic change in India
Factors driving change include requirements from compliance regulators, quality consistency and assurance required by clients, statutory penalties on non-compliant warehousing facilities, economies of scale being achieved with the help of larger warehouses, safety and security of goods, efficiency in operations, quick turnaround times, need for the efficient warehousing designs along with the emergence of e-commerce and other multinational businesses that prefer to occupy only compliant facilities. The shift was further accentuated due to the implementation of the Goods and Services Tax (GST) in India. GST has reduced delivery times to 3-4 days against the earlier 5-6 days, enabling transporters to carry out their business with a smaller fleet.