Different Mediums of Logistics Service in India_2

8/8/2019 Different Mediums of Logistics Service in India_2

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LOGISTICS

Presented by :-

´ Maandeep Sethi

´ Pawandeep Dhingra´ Jasmeet Chadha

´ Siddharth Seghal



LOGISTICS INDUSTRY-AN OVERVIEW

´ Globally, the logistics industry is valued at US$ 3.5 trillion.

´ The U.S., which contributes to over 25% of the g lobal industry value, spendsclose to 9% of its GDP on logistic services.

´ The Indian Logistics Industry is presently estimated at US$ 90 billion.

´ The industry has generated employment for 45 million people in the countryin comparison with the IT and ITeS sector which employs approximately4.3million people.

´ It is forecast to grow at a Compound Annual Growth Rate (CAGR) of

approximately 8% over the next three to f ive years.



DIFFERENT MEDIUMS OF

LOGISTICS SERVICE IN INDIA

There are four mediums of logistics service in

India.1. Air f reight- This is the most modern & the

saf est mode to ensure a fast delivery of

g oods.

2. Land Transport- It has been the popularlyused method & used especially in the

shipments of heavy articles like

machinery& vehicles.



CONTD

3. Railways ² This is the oldest method of shipments and

transport. This is the most eff ectively used in the domestic

services but it is the widely used mode of logistic in India.

4. Waterways- an essential part of this industry is one of theoldest methods. Shipments and transportation of g oods is

done on an international basis through this way. This mode is

usually very eff ective in shipments of oil, highly sensitive and

volatile articles like uranium .



OVERVIEW OF INDIAN LOGISTIC

MARKET

´ The size of Indian logistic market is estimated to US$ 3.5

trillion in 2005 .

´ India·s domestic market of textiles, auto ancillary & engineering

g oods have contributed a lot .´ India·s containerization has over 70 % of totel export carg o and

40% import carg o.

´ Indian Government is making great efforts in improving the

trade by privatizing ports , investing in highway projects etc.

´ The waiting time at major ports in India is reduced f rom 3.7

days in 2002-03 to 2.5 days in 2009-10.



THIRD PARTY LOGISTICS

Third-party Logistics is simply the use of anoutside company to perform all or part of thef irm·s materials management and productdistribution f unction



THIRD PARTY LOGISTIC PROVIDERS

IN INDIA

´ The 3PL industry was pioneered by g lobal logistic majors-

Indian subsidiaries of multinational companies in the

automobile , electronics and FMCG sector were the main users

of specialist service providers in the past.

´ Expansion of manufacturing facilities by multinational

automobile makers like Suzuki, Honda, Toyota and Ford

indicates huge potential for 3PL providers.

´ The no 3PL providers grow to 400 in 2005

´ The Indian 3PL service providers can be divided into three tiers

like national 3PL companies, Regional 3PL companies and

Remote 3PL companies.



CHALLENGES FACED BY 3PL IN

INDIA

´ Huge diversity in geographic locations.

´ Consumer habits

´ Inf rastructure conditions across country

´ Logistic operation in each state require a state specif ic model

that facilitates eff ective storage and transportation of g oodsmostly sold in that state , making it diff icult to adopt a uniform

logistics model .



CONTD

Geographical challenges

Unequal distribution of the population which is creating major

problem for the service providers.

Due to g lobalization, transport volume has increased in recent

years but logistics inf rastructure has been unable to keep up with

this pace.

Rail inf rastructure needs to be expanded and the connections to

the harbors and airports should be improved.



CHARACTERISTICS OF 3PL

´ Perform outsourced logistics activities

´ Process management / Multiple activities

´ More customized services

´ Mutually benef icial and risk-sharing relationship

´ Long-term commitments (1~ 3 years)



WHY IS IT NEEDED?

ADVANTAGES

´ Cost reduction

´ Focus on core competency

´ Improved eff iciency, service and flexibility´ Industry-specif ic application

² ´build-to-orderµ systems and e-merchants

DISADVANTAGES

Loss of control

Impact on in-house workforce



KEY DRIVERS OF GROWTH

´ Economic growth has been driving logistics demand.

´ Increased outsourcing- Due to which manufacturing companies arewitnessing increasing requirements for logistic services.

´ VAT Implementation ² With VAT implementation and gradual phase out of CST,manufacturers do not require warehouses and depots across all statesto avoid double taxation.

´ Investments in the inf rastructure sector thus leading to increased eff iciency

and productivity of the transport system.



GLOBAL PLAYER EXAMPLE

FEDEX



OVERVIEW

´ FedEx Critical Inventory Logistics is a comprehensive,

end-to-end solution designed to optimize the

management of critical inventory and service parts

distribution and returns process.´ It incorporates a hub-based central stocking location

(CSL) and a European wide network of forwarding

stocking locations (FSLs) integrated through extensive

information capabilities



FEATURES

´ Inventory Management with automated replenishment, plus Tracking andTracing by order number, part number, serial number, lot number, or by itemlevel detail

´ Complete end-to-end inventory and transportation visibility including real-time proof -of -delivery, next flight out and local courier

´ Proactive event notif ication, monitoring, and recovery f rom the FedEx Command and Control Centre

´ Central Stocking Locations are accessible 24 hours a day, 7 days a week

´ Synchronized delivery reliability f rom 2-day to 4-hour delivery, 2-hour servicein some areas

´ In house customs specialists

´ Dedicated Customer Service Team



BENIFITS

´ Enhance customer service (shipments and returns aremanaged to meet individual distribution requirements)

´ Improve inventory management (consistent on-time deliveryreduces need for saf ety stock)

´ Optimize transportation costs (choosing the optimal overall transportation solution can reduce costs)

´ Reallocate resources (refocuses time and money on corecompetencies)

´ Control cost by ordering what you need when you need it, and

ha

ve it delivered in time t

omeet y

our required

leve

l of

service´ Mitig ate your investments and inventory and inf rastructure



OTHER BENIFITS

´ Consolidating inventory at the FedEx GDC enables cost savings,

´ Also there is g ain end-to-end visibility and be able to respondmore rapidly to customer orders. It increases inventory velocity,turning assets into prof its.

´ With the FedEx GDC and FedEx Critical Inventory Logistics,you·ll have a truly robust capability for planning and aligning inventories, resources and processes with absolutely minimal risk and loss ³ which will put you well on your way to post-salesuccess.



WHY IS IT NEEDED?

ADVANTAGES

´ Cost reduction

´ Focus on core competency

´ Improved eff iciency, service and flexibility´ Industry-specif ic application

² ´build-to-orderµ systems and e-merchants

DISADVANTAGES

Loss of control

Impact on in-house workforce



INDIAN COMPANY

OM LOGISTIC LTD

´ Flagship company of Om Group has been instrumental inproviding innovative and value added solutions for IndianCorporate and Multinationals.

´ It·s the only leading multi-modal logistics company with

sing le window integrated logistics services for all theelements of the supply chain management in India.

´ With innovative and cost saving methods It has taken seatfor generating maximum air carg o in India

´ It has been dealing with corporate, multinational automobile industry and has been pioneer intransportation, warehousing and logistics support to thesector.



INFRASTRUCTURE

´ They cater wide distributed in Indian marketthrough its 450 plus satellite locationswithOnline connectivity.

´ It has over 1000 delivery locations spreadacross the country and 4000 dedicatedvehicles.

´

There are million sq/f t. of warehousing area across the country and a state of the artinf rastructure to service their customers

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Different Mediums of Logistics Service in India_2