Om Logistics aims to make a difference

As the business world comes to terms with the global slowdown, there are some companies like the New Delhi-based Om Logistics Ltd which are using the downturn as a time for change and meeting new challenges. Shrinking demand has led to inventory pile-ups at both vehicle and component manufacturers, which has compelled industry to take a renewed look at their supply chain management strategies. Clearly, the current economic scenario compels manufacturers to be cost-effective in all their operations to ride out the crisis.

A key factor in achieving improved operational efficiencies is through the use of a reliable logistics operator, mainly to handle a number of supply chain delivery challenges. Another benefit is that the logistics industry in India is fast restructuring itself, focusing more on enhancing its knowledge offerings, which promise huge cost savings in supply chain operations, reduced lead time and safe transportation of high value goods.

The Rs 500 crore Om Logistics is optimistic that its services will continue to be in demand from automobile manufacturers, despite a lower offtake for them in the domestic market. The company currently provides logistic services to a host of OEMs like Tata Motors, AMW, Bajaj Auto, Mahindra & Mahindra, Honda, Maruti Suzuki, Hero Honda, Delphi and Eicher Motors. Of its total revenues of Rs 500 crore in 2007-08, the automotive industry contributes over 70 percent.

According to Ajay Singhal, chairman and managing director of the Om Group, Om Logistics, which is the flagship company, is the leading multi-modal logistics provider with single-window integrated logistics services for all the elements of the supply chain management in India. The ISO 9001: 2000 and IATA-approved Om Group has six associate concerns, namely Om Logistics Ltd, Crossroad Logistics Pvt Ltd (the telecom logistics division), OMX Cargo Ltd (international division), OMX (express division of Om Logistics) and OMX Info Management (record and data management division). Its Indo-Japanese joint ventures comprise Omtrax Packaging Solutions Pvt Ltd and Om Marubeni Logistics Pvt Ltd. What this means is that the Om Group, with its diversified operations in all the elements of the supply chain business, has emerged as a one-stop solutions provider.

Optimum connectivity is the company’s USP as Om Logistics connects more than a thousand destinations all over the country. The company also owns a dedicated fleet of vehicles for local distribution. In addition to a mix of rail and road transport, it also offers air cargo. This flexible transportation set-up has benefited manufacturers who are able to grow their supply chain radius throughout India and also reduce their inventory costs.

In order to cater exclusively to leading carmaker Maruti Suzuki Ltd, the Om Group set up a joint venture with Japan’s Marubeni Corporation. Om Marubeni Logistics Pvt Ltd is dedicated to providing single window logistics, warehousing and supply chain solutions to Maruti Suzuki. The company began operations from Binola in Manesar, Haryana, in in 2007-08 implementing the best global practices of efficient and stringent quality systems like KANBAN, KISEN, 5S, JIT and DOL.

According to Ganesh Kandpal, manager - corporate communications, Om Logistics, Om Marubeni has planned a state-of–the–art-warehouse/warehouse management system with modern practices and technically advanced tools for material handling within the warehouse. This warehouse aims to achieve the most efficient and advanced logistics centre status in the country, he says.

“Warehousing is an indispensable part of supply chain management. We at Om Logistics provide technically efficient warehouses at all strategic locations across India for our clients. These state-of-art warehouses are equipped with modern material handling equipment and complete workforce for efficient logistics coordination. After a successful launch of the Bhiwandi warehouse, we are looking forward to our upcoming projects which would be completed by end-2009 in Faridabad, Chennai, Ahmedabad, Halol, Pune, Noida, Goa and Patna,” states Singhal.

The company also plans to set up reefer point for 5,000 square feet of “temperature controlled” warehouses for cold storage. These state-of-the-art warehouses will be fitted with ultra-modern infrastructure facilities, constructed with utmost detail and precision, and customised to suit client requirements.

Om Logistics is well aware of the fact that the current year is going to be a difficult one. “The economic scenario has changed quite a lot in the past couple of months. While the economy continues to stumble in what has become a historically difficult period, current economic conditions are continuing to have a decidedly negative effect on trucking volumes also, as evidenced with recent news from American Trucking Association (ATA) that its advanced seasonally-adjusted For Hire Truck Tonnage Index dipped 3.0 percent in October- November 2008. The global financial crisis really started to show its effects by end-2008," notes Singhal.

Gunning for the global market

While its focus will continue to be on growing its share in the domestic market, Singhal reveals that the Om Group is all set to make its presence felt in the global market through Omtrax Packaging Solutions, a professional relocation provider, and Om Marubeni Logistics. With automakers the world over fine-tuning their manufacturing strategies to keep pace with the changed economic scenario, their logistics providers are also compelled to come up with innovative solutions. It is this what the Group is banking on.

Singhal says the Group has extended its support to around 3,000 leading companies including multinationals. “The Group has recorded a 20 percent topline growth at Rs 500 crore in 2007-08 compared to Rs 420 crore in 2006-07 and is targeting Rs 1,000 crore by the year 2010.”

The Group also plans to extend its services and branches to the SAARC region. “India is a leading manufacturing base for buyers across the globe mainly due to its low cost and high quality production capacities, which have a direct enhanced impact on imports and exports. We are undertaking IT initiatives every year to smoothen our global operations. All our branches across India are computerised and connected through leased lines. Moreover, we use OLTP (Om Line Transaction Process), which makes our lag time almost zero,” he says.

Like most leading logistics providers, Om has an Internet-based consignment-tracking system which enables customers to track their shipped consignments every 15 minutes. But Singhal said that the Om Group will concentrate on all the elements of its business and dedicatedly work towards the execution of its growth plans. “We believe a careful selection of customers and planned strategy would be key to success in such difficult times,” he adds. He reiterates that 2007-08 had been an eventful year for the Group where company witnessed organic as well as inorganic growth and Om Logistics recorded a sales growth of around 30 percent.