F&S seminar on ‘Supply Chain Transformation’ focusses on challenges and opportunities

Bangalore, August 26, 2013: The fourth annual logistics strategy workshop conducted by Frost & Sullivan, titled ‘Supply Chain Transformations 2013’, saw participants from various quarters of the logistics industry opine on a gamut of topics ranging from present challenges on automation to identifying new growth areas to emerging solutions in the global scenario. The two-day event held on August 23-24 saw global logistics players like TCI and TNT share the dais with customers and other facilitators from India.

Gopal R, global vice-president for transportation and logistics practice at Frost & Sullivan, kick-started the day by sharing some data on the Indian logistics scene. Talking about the present state of the industry, he said that the transportation and logistics market in India has grown by a CAGR of 15.1 percent between 2007 and 2012. The year 2007, he said, witnessed high growth due to the global economic surge during that period. However, since then, growth in domestic manufacturing and consumption and the international trade also slowed down, resulting in a declining growth rate for the transportation and logistics market, except when the economy witnessed a surge in 2011.

As for the challenges facing the Indian logistics sector, Gopal highlighted that the decline in domestic manufacturing and output is affecting cargo volumes. In addition, the decline in exports and import of goods is affecting freight forwarding activities, he commened. A key challenge in India, he said, is the lack of seamless collaboration between logistics service providers and end-users.

In a panel discussion moderated by Frost & Sullivan, Gagan Arora, head of the automotive vertical from TNT India, stated: “Global best practices by MNCs have resulted in efficiency in operations. Customers have also started understanding and collaborating with the logistics service providers.” Asked if new ideas are being infused into the industry, Arora said, “The supply chain industry is now attractive for youngsters. New blood and new ideas are pouring in. But is this enough? There’s a long way to go.”

In the next session, Srinath Manda, program manager for transportation and logistics at Frost & Sullivan, highlighted the results of a survey conducted on the level of automation and mechanisation in the sector. “While end-users see the importance of automation, they are using very little of it,” he said. “For instance,” he continued, “While 55 percent of the respondents said that wireless cargo monitoring systems were useful, only 11 percent are using it. Similarly, 82 percent understood the importance of using a material tracking and tracing system, while only 20 percent actually used it.”

Manda further went on to draw attention to the reasons for this gap. “52 percent of our respondents said that the lack of funds to invest is preventing them from adopting these solutions. While 16 percent said that their operations are too small in scale to utilise some of those solutions, 32 percent said there is a lack of exposure to acquire and use such solutions,” he noted.

As an audience-interaction session, the organisers conducted a workshop which saw the audience segregated into smaller groups and come up with solutions for questions posed by Manda. The questions were relevant to the challenges and problems faced by the industry as a whole and there was a flurry of excitement thanks to seasoned industry doyens coming up with solutions to pertinent and persistent problems.

KARTHIK H