How do you see the AFL's logistics business shaping up in future?
As a pan-India player in the supply chain management and logistics space, we already have 50 state-of-the-warehouses spread across the country with a distribution capability of over 1,400 locations. We have the capability to offer end-to-end supply chain solutions to varied industries including the automotive sector. This network services some of our largest automotive clients, ranging from a pioneer automotive tyre manufacturer to the largest automotive spare parts supplier. The aftermarket vertical is an important future focus area for AFL.
What sort of cost-cutting methods have you developed for the auto sector?
We have been working on some key customers to closely understand their demand and supply patterns and reconfigure our services better to offer right solutions. For some clients, we have also been able to re-negotiate fixed contracts into variable contracts whereby our customers can pay on a per-use basis with no fixed cost, which is very beneficial for them.
What are your biggest challenges at AFL?
Technology is a key differentiator in the logistics industry and its integration into our business is by far the biggest challenge for us or any 3PL player. This is due to the scarcity of quality talent that can understand and work with new technology in an efficient and appropriate manner. In our case we have adequately de-risked ourselves by outsourcing our IT function to an internationally renowned service provider. Due to this, we have tremendously increased our workforce productivity. In particular, our recent work of integrating AFL - Client ERP systems has been quite successful.
What is your view on the Indian logistics sector?
Apart from the high growth rate, we will see significant investment being pumped into this sector. New infrastructure will be built in addition to the upgradation of existing warehousing facilities. This sector is currently enjoying an upward trend in the availability of trained, skilled manpower and similar demand from other areas such as the retail and automotive industry.