Aditya Vazirani is a passionate and meticulous professional with a vision to transform the Logistics and Warehousing industry by leveraging the new age technological advancements.
In his previous role as Vice President for RCNL, Aditya overlooked the Freight Forwarding, Customs Clearance, & 3PL aspects ensuring the highest level of quality service is maintained.
He was also instrumental in obtaining the Good Distribution Practice Certification for Freight Forwarding and ISO 9001:2015 for RCNL, making it the first Indian Logistics & Supply Chain Management Company to be awarded the quality accreditation.
Before he decided to consolidate and bring his rich experience to drive focused growth in the warehousing and distribution solutions, with RGL, he had been driving strategic improvisation by implementing Industry best practices, applying business intelligence, and data analytics to implement superior training and digital tools for RCNL.
Alumni of the prestigious Bordeaux Business School (KEDGE) France, Aditya holds a MSc in Global Supply Chain Management and also has obtained an Advanced Certificate in General Management from Massachusetts Institute of Technology (MIT), Sloan School of Management. Having lived and worked across the globe, learning and improvising Supply Chain, Logistics, and management practices, Aditya calls Mumbai his home, is an ardent foodie and enjoys spending his free time caring for his pet pooch. Visit here below the articles by Aditya Vajirani
Indian Logistics and Supply Chain Trends 2021
By: Mr. Aditya Vazirani, CEO – Robinsons Global Logistics Solutions
The pandemic and the lockdown that lasted for major part of 2020, proved to be testing times for various businesses including the logistics and supply chain sector of India which had a remarkable contribution in keeping the supply chain for essential items, functional, albeit with a few hurdles in the beginning. As per a recent report by Arthur D. Little India in collaboration with the CII, India’s Logistics and supply chain costs currently amount to a staggering 400 USD, up to 14% of the GDP, compared to the global average of 8%, raising a competitiveness gap of approximately USD 180 Billion.
Further, the challenges experienced by the sector during the pandemic has highlighted the urgent need for building a stronger and more relevant infrastructure that can not only withstand the unexpected disruptions of this scale but is also agile enough to help adopt and bounce back to efficiency almost immediately in the face of future conflicts.
Listed here are some of the key trends in the Indian Logistics and Supply Chain sector that are set to dominate 2021:
- Emphasis on Cold Supply Chain: As per‘Indian Cold Chain Industry Outlook 2022’, the Indian cold supply chain sector is set to grow at a CAGR of 17-18%, till 2022, due to demand for cold storage, primarily driven by the pharma sector, especially the vaccine supply chain in early 2021, followed by requirements from seafood, meat and similar industries. While growth will be driven by introduction of a government led COVID immunization program, the growing e-commerce market for FMCG, dairy, meat and fish, will also help propethe sector significantly, given the ongoing virus threat. At present, healthcare products hold a 3.6% share in the overall Indian cold chain market that is expected to grow around 6% by end of 2021 as per IMARC services.
2. Growth in 3PL and 4PL providers as Manufacturing grows: Agility, speed and mobility are set to be the key goals for a robust supply chain network and preference of 3 and 4PL service providers is going to set the tone for development, in 2021. While manufacturing has been one of the early adopters of 3PL and 4PL service providers, soon other sectors are also likely to benefit from outsourcing their supply chain management to experts, so they could focus on re-building and strengthening the core business, especially in the aftermath of the pandemic. Further, the evolution of these service providers into key partners, offering expert, end to end solutions ranging from documentation, tracking, warehousing, legal compliance and even kitting in some cases at competitive rates, has made them a lucrative choice for most businesses that are currently working on bouncing back from the financial crisis. The Indian 3PL market is expected to register a growth rate of over 11.5% during the forecast period of 2020-2025, with strong focus on value driven services that enhance customer satisfaction and delight.
3. Affordable Road transport: GoI plans to build massive road network in future, emphasis will be given to develop infrastructure like dedicated freight corridors, container freight stations etc. India needs to come up with intermodal and multimodal transport system to reduce the transportation and storage cost which in today’s time is relatively high. Unfortunately, current poor road infrastructure decreases the maximum distance that can be covered by the heavy transport vehicles on highways. To combat such challenges, Government of India has decided to cut down on the current logistics cost of India’s GDP in next two years with help of Ministries of Railways, Transport, Shipping and Aviation in order to achieve this goal.
4. Sustainable practices will be implemented: Green logistics is going to be the key aspect of the supply chain evolution in the year 2021. Sustainable practices have already become a norm amongst international logistics and supply chain players as well as businesses.They view the green supply chains as responsible and sometimes even a mandatory criteria when selecting a logistics partner. With the influx of international manufacturing and e-commerce players, the Indian green Logistics and supply chain is set to get a boost, thanks to encouraging business opportunities for those adopting sustainable practices. Apart from protecting the environment and helping the society overall, sustainable practices are also becoming cost-effective, thanks to the fast paced technology evolution in the sector and are becoming instrumental in gaining consumer loyalty and endorsement for the socially and environmentally responsible millennial population. From adopting eco-friendly business models that follow environmentally conscious choices to e-commerce giants opting for zero plastic packaging or reducing packaging waste through recycling, to a more sophisticated use of solar panels for cold storage and temperature regulation A gradual shift of electronic trucks for transportation, recycling waste and systematic disposal of the chemical and other harmful waste, etc., are soon becoming popular green practices among Indian logistics and supply chain players.
5. Adoption of Technology: This is another major trend that is set to make considerable impact on the sector. With businesses adopting the emerging technologies like AI, ML, Big Data etc., supply chain industry is no exception to adapting automation in processes and operations. Embracing artificial intelligence has only eased the making of processes more efficient, advantageous and dependable. Technology such as internet of things (IoT) helps maintain a transparent supply chain network, in turn helping to bring visibility, build customer loyalty and trust. From modern WMS and Automated Guided Vehicles (AGV) to AI driven robotics and use of data analytics, technology adoption is going to be at the center of the growth and development of the Indian logistics and Supply Chain sector, in 2021.
Given the goals and growth opportunities envisioned by the government: from making India a global manufacturing hub to focus on strengthening the local businesses with ‘Atmanirbhar Bharat’, ‘Vocal for Local’ and the ‘Start Up India’ powered by a wide spread technology adoption, there is an urgent need to identify and address the existing vulnerabilities at the core of Logistics and Supply chain networks that are the backbone of a strong economy.
The recent pandemic has been a disruptor across segments, forcing governments and businesses to re-imagine traditional systems and innovate to survive. The complete shut-down and restriction in mobility of people and cargo, deeply impacted logistics and supply chain networks across the world, in turn impacting global trade. Fear of not being able to procure the […]
Decoding the ‘Lockdown’ Supply Chain of High demand and perceived scarcity
Even as the Indian state and central government announces various steps to contain the COVID-19 pandemic in India through an extended lockdown, Indian households continue to battle fear of scarcity and uncertainty over access to daily essentials.
While the government has recently announced a the list of sectors that can resume operations from 20th April, Including the flow of goods in the country, across district and state borders, the perceived scarcity of essentials continues to plague those confined in their homes, in a bid to fight the infection.
While people are following instructions like social distancing, wearing of masks, and sanitising hands etc., the frequent outpouring of people to the liquor stores, grocery stores and super markets has also presented a risk of spreading infection, as a large number of people throng the area.
In addition to the risk of spreading infection, this bulk buying and hoarding due to perceived scarcity of essentials, has also gravely impacted the food and essentials supply chain, causing stress across the manufacturing, FMCG and food supply chain across the country. Breaking down this cause and effect, we can understand the impact, as under:
1. Bulk Buying and Hoarding:
For an average person who would purchase an X amount of grocery and stapes for a family of four, now ends of bulk buying and hoarding, purchasing up to 3 to 4X for every trip to the grocery store. This results in unavailability for the other consumers, who also seek to purchase up to 2 to 3X times their regular consumption, in the bid to escape the fear of scarcity.
With almost every consumer exhibiting similar 2-4 times enhanced consumption, the retail supply chain immediately comes under stress, to help match up the sudden increase in demand.
It is important to note here that while the consumption seems to have increased, from the purchase patterns, in reality, the end user is consuming the same amount as they did earlier. The only difference is in the hoarding of inventory.
2. Sluggish supply chain:
The stress created due to the sudden rise in demand is further intensified with the slowing down of the supply chain, with lock down restrictions that has made transportation slow and sporadic.
On the other hand, warehouses are also either stuck with a huge inventory, that is just sitting there, waiting to be transported, or is facing challenges with specialised storage for perishables and lack of manpower to manage the warehouses.
In addition to the challenges in movement of goods and build-up of inventory in the warehouses, the logistics and supply chain sector is also marred with a severe shortage of manpower, further resulting in delays, reduced supplies, and sporadic, inconsistent deliveries.
3. Impaired manufacturing:
While the government has announced select manufacturing units to remain operational so as to ensure regular availability of FMCG and daily essential, the sudden rise in demand and the half capacity operations are contradictories that are throwing this balance off gear.
While most manufacturers do have a backup inventory that can ensure uninterrupted supply for a shorter span, the extended lockdown and the continuous hoarding and bulk buying, are only adding to the problem that has become a vicious cycle.
Having said this, it is time to re-look at the consumption patterns, and, from an end consumer point of view, create awareness about conscious consumption.
With the help of last mile service providers such as LoveLocal, BigBasket, Scootsy, Swiggy, Dunzo and Zomato etc., the industry has been trying to create a more accessible and steady supply for essentials. But for the cycle to break, a vital question on consumption patterns needs to be address at the earliest.
Need for Skill development for Logistics
Despite the huge growth potential and its impact on the overall economy of the country, Logistics and supply chain management in India continues to grapple with lack of a skilled workforce.
While the sector has undergone a massive transformation in the past decade, the quality of human resource in this labour intensive sector has remained stagnant.
“However, factors like technology advancements using IoT, AI and automation, coupled with the rise in international trade opportunities, have been pushing the formerly unorganised sector to adopt certain uniform standards of operations and service”
The National Skill Development Corporation (NSDC), has identified Logistics and Transport as a priority sector for bridging the demand supply gap in the industry. In line with this, the latest Union Budget has also seen a major push on logistic infrastructure development and skill development across segments.
Listed here are key areas that are in urgent need for skill development:
1. Temperature Controlled Supply Chain: Over the past few years the temperature controlled storage and transportation requirements have evolved to be a considerable part of the overall logistics and supply chain sector in India.
E-commerce, online grocery stores and e-pharmacies have further pushed for streamlining the sector. From processed food, dairy, fish, meat, and poultry to pharmaceuticals and nutraceuticals, there has been a massive demand among traders and retailers – both traditional and online, for a robust temperature controlled infrastructure.
While technology interventions have made this possible, the ground staffs still lacks understanding of processes and the significance of accurately handling these perishable items.
Many a time, despite state-of-the-art infrastructure, 3PL, and 4PL logistics service providers fail to deliver results due to the inefficiencies of the ground staff. An urgent need for sensitising the staff about the significance of efficient handling, storage, and transportation of these temperature sensitive goods.
2. Reverse Logistics: As a modern concept, reverse logistics was largely introduced by the advent of e-tail or online retail and has been marred with various challenges.
While large organised players have streamlined the process so as to drive customer delight in the face of competition, the concept largely remains alien for a vast number of B2C logistic service providers.
From soft skills and polite customer interactions to checking for goods before accepting the return etc., are vital points that need adequate training so as to continue driving growth of the sector.
3. Warehouse Management: This is yet another sector that is in dire need of adequately trained resources. From effective warehouse layout, methodical storage and handling as well as inventory management and value added services offered across warehouses, it is extremely important to have a work force that is not only well trained but also knowledgeable about the nature of products stored and their life cycle.
While most people believe the introduction of warehouse automation is an answer to address inefficiency in labour, there still remains a need for manpower that can handle, supervise, and manage the automation.
4. Green Logistics: Another emerging trend in logistics and supply chain management is the rising popularity of Green logistics that adopts environmentally friendly processes and systems.
Considering that logistics has largely been an unorganised sector, dominated by labour intensive workforce, the task of breaking a mindless habit and method of doing things over the years, is a difficult endeavour.
Educating and training resources to understand the environmental impact of their actions and bringing them on the same page to adopt and follow Green Practices, requires a lot of unlearning and re-learning of processes.
As an increasing number of international brands and logistics service providers resort to energy deficient and carbon neutral processes, lack of a skilled workforce to match up with these trends could mean loss of business and reputation.
Author- Mr. Aditya Vazirani, Founder Director, Robinsons Global Logistics Solutions (RGL)
Aditya Vazirani is a passionate and meticulous professional with a vision to transform the Logistics and Warehousing industry by leveraging the new age technological advancements. In his previous role as Vice President for RCNL, Aditya overlooked the Freight Forwarding, Customs Clearance, & 3PL aspects ensuring the highest level of quality service is maintained. He was also instrumental in obtaining the Good Distribution Practice Certification for Freight Forwarding and ISO 9001:2015 for RCNL, making it the first Indian Logistics & Supply Chain Management Company to be awarded the quality accreditation. Before he decided to consolidate and bring his rich experience to drive focused growth in the warehousing and distribution solutions, with RGL, he had been driving strategic improvisation by implementing Industry best practices, applying business intelligence, and data analytics to implement superior training and digital tools for RCNL.
Alumni of the prestigious Bordeaux Business School (KEDGE) France, Aditya holds a MSc in Global Supply Chain Management and also has obtained an Advanced Certificate in General Management from Massachusetts Institute of Technology (MIT), Sloan School of Management. Having lived and worked across the globe, learning and improvising Supply Chain, Logistics, and management practices, Aditya calls Mumbai his home, is an ardent foodie and enjoys spending his free time caring for his pet pooch.
Read ColdChainManagement April-June 2020 Issue
5 key policy and international trade trends that are driving the growth of Indian logistics segment
“India is now one of the most powerful players in the global economic landscape with the logistics and supply chain sector as its backbone. The improved bilateral trade and the opened gateway to the Indian economy through globalization and liberalization is providing all the needed opportunities”- Mr. Aditya Vazirani, Founder Director, Robinsons Global Logistics Solutions (RGL)
The focus of the Indian government over the past few years has been on accelerated growth through improved bilateral trade and foreign investment policies. India has garnered tremendous goodwill and become a global brand for trade development, thanks to the proactive government initiatives.
According to a study conducted by The Associated Chambers of Commerce and Industry of India (ASSOCHAM), the logistics and supply chain market in India is expected to grow and reach USD 307 billion by the year 2020, recording a CAGR of 16 percent on an average. The growth in the sector is being driven by the rise of international business in India which is itself the result of the improved bilateral trade. However, the factors that have contributed towards India leveraging its growth potential to achieve fruitful bilateral trade and increasing its global footprint are as below:
1.Greater export opportunities
As numerous industries enter and set their manufacturing plants in India, it is a noteworthy fact that Indians no longer have to go out of their way and increase any existing trade deficit. Chairman of the Foxconn Technology Group, Terry Gou, said the iPhone will go into mass production in India this year, in addition to their pre-existing plants in the south and this should also help increase the viability of India as an attractive sector for manufacturing. Total exports from India (Merchandise and Services) registered a growth of 3.20 per cent year-on-year during April-August 2019 to US$ 227.36 billion,
2. Improved Logistics Infrastructure:
With a major thrust on strengthening the Indian logistic ecosystem, new and improved logistics hubs and warehouses are planned, strategically around important ports. Logistic parks and specialized spaces for warehouses, is proving extremely helpful. According to reports, the major ports of India are showing positive growth trend as the key 9 ports of the country have handled 3.11% more traffic during April to January in 2019 as compared to its corresponding period of the previous year. Additionally, India is aiming spot in top 5 Global Air Freight Market by the year 2025. If Drones Policy 2.0 draft is implemented, India will witness Droneports & Dedicated Drone Corridors in upcoming times.
3. Strategic Marketing
Through genius marketing and extensive cultural research, have strengthened bilateral trade. Recent events like ‘Howdy Modi’ where the Prime Minister visited the US, India can present itself as a country of immense investment potential, which is being rewarded with FDI inflows of US$ 405.64 billion in the week up to March 15, 2019. Furthermore, in the Global Business Forum, the Prime Minister of India has further urged international businesses to invest in India, and leverage the available technological talent.
4. New-age technologies
With the increase in the FDI inflows, the sector is set to further invest and implement in technologies such as deep learning, machine learning, IOT and data analytics. The Make in India movement and the Digital India movement have also played major roles in the expansion and growth of the logistics and supply chain. According to IDG’s 2018 State of Digital Business Transformation report, 89% of enterprises have planned to adopt new-age technologies and integrate them to transform their logistics and supply chain departments to stay at par with international standards. It is because of these advanced technologies that the transformation and the ease in manufacturing has taken over the most time-consuming and mundane processes. As a result, it has also driven profits at an accelerated rate.
5. The Improved Trade Policies
New and improved trade policies have also helped achieve bilateral trade and increase international business. Foreign trade policies such as the Merchandise Exports from India Scheme (MEIS) and the Service Exports from India Scheme (SEIS) have positively complemented the logistics and supply chain management and enhanced the manufacturing sector in India.
According to data released by the Commerce and Industry ministry, the exports, driven by the strong logistics and supply chain sector reached a staggering US $331 billion in 2018-19. Extra efforts for improved bilateral trade by the Indian government have also resulted in lower tariffs and taxes by different countries. Also, some other key developments includes:
- The latest trade data released by the Indian Embassy in Bangkok, Thailand shows that trade between the two nations has grown at least 60 per cent since 2016.
- The recent launch of the India-UAE Bridge initiative is set to attract both Indian and UAE trade and investments. India is one of the UAE’s largest trade partners with bilateral trade amounting to over $60 billion and annual growth topping 11 per cent. The expectation is to exceed $100 billion as Dubai stands as the key gateway facilitating India-UAE trade.
India is now one of the most powerful players in the global economic landscape with the logistics and supply chain sector as its backbone. The improved bilateral trade and the opened gateway to the Indian economy through globalization and liberalization is providing all the needed opportunities.Tweet
India is now one of the most powerful players in the global economic landscape with the logistics and supply chain sector as its backbone. The improved bilateral trade and the opened gateway to the Indian economy through globalization and liberalization is providing all the needed opportunities.
India is on the path to double the current 3% world trade share by implementing the Foreign Trade Policy 2015-20. Ministry of Civil Aviation in its report titled ‘Vision 2040’ has stated that cargo movement is expected to quadruple and achieve the figure of 17 million tons by the year 2040. With the government striking trade deals with countries like the US, Australia, Japan and China, there’s little doubt that the Indian logistics and supply chain management sector is on the path of becoming one of the most sought after sectors in the Indian economy.
Author: Mr. Aditya Vazirani: About Mr. Aditya Vazirani, Founder Director, Robinsons Global Logistics Solutions (RGL)
Aditya Vazirani is a passionate and meticulous professional with a vision to transform the Logistics and Warehousing industry by leveraging the new age technological advancements. In his previous role as Vice President for RCNL, Aditya overlooked the Freight Forwarding, Customs Clearance, & 3PL aspects ensuring the highest level of quality service is maintained. He was also instrumental in obtaining the Good Distribution Practice Certification for Freight Forwarding and ISO 9001:2015 for RCNL, making it the first Indian Logistics & Supply Chain Management Company to be awarded the quality accreditation. Before he decided to consolidate and bring his rich experience to drive focused growth in the warehousing and distribution solutions, with RGL, he had been driving strategic improvisation by implementing Industry best practices, applying business intelligence, and data analytics to implement superior training and digital tools for RCNL. Alumni of the prestigious Bordeaux Business School (KEDGE) France, Aditya holds a MSc in Global Supply Chain Management and also has obtained an Advanced Certificate in General Management from Massachusetts Institute of Technology (MIT), Sloan School of Management. Having lived and worked across the globe, learning and improvising Supply Chain, Logistics, and management practices, Aditya calls Mumbai his home, is an ardent foodie and enjoys spending his free time caring for his pet pooch.
Factors impacting the growth of Cold Supply Chain sector in India
By Mr. Aditya Vazirani, CEO, Robinsons Global Logistics Solutions
India is currently the world’s largest producer of milk, second largest producer of fruits and vegetables and has a substantial production of seafood, meat, and poultry products – all major categories demanding a robust and efficient management of its supply chain.
As per a recent Crisil Research report, the Indian Cold Chain Industry is growing at a 13% – 15% CAGR and is set to reach INR 47,200 Crore by 2022, compared to the 11% – 13% CAGR in 2017, which amounted to INR 24,800 Crore.
Biomedical and Pharmaceutical manufacturing is another key driver for growth of the Temperature Controlled Supply Chain. Furthermore, government polices too are aligned to support and leverage this growth.
The Indian Government and National Centre for Cold Chain Development (NCCD) are focussed on infrastructure development projects, with 135 cold chain projects, 40 mega food parks, and grants above Rs. 7,000 crore; policies in the form of subsidies, tax benefits, and technical training are adding momentum to the evolution and management of a Cold Supply Chain.
Some of the major trends driving growth of the Cold Supply Chain in India are:
- Consumer Behaviour: The advent of modern trade supermarkets has changed consumer behaviours and has created a whole new organised food retail demand chain. The availability of processed, frozen and fresh categories of vegetables, dairy, fruits and meats mandate the use of a temperature controlled supply chain from origin to the final customer.
- Farming Behaviour: Farmers are moving towards cultivation of fruits and vegetables due to better yields and remunerative value, as compared to the risks and investments in grain crops. This, in turn, is driving the requirement of cold stores closer to farms. As a country with the predominant industry being farming, the need on developing the supply chain with the focus on temperature control is nascent and highly disorganised. Only 5% of the bananas harvested in India are actually consumed, whilst there are other countries who manage to export theirs at a premium.
- Modern Healthcare: Most of the latest innovations in cutting edge medicine, vaccines and biopharmaceuticals as well as clinical trial materials are all heat and humidity sensitive and must be stored at temperatures ranging from negative 45 to positive 25 degrees Celsius. With India’s vaccine, bio-pharmaceutical and clinical trials market expected to grow in double digits, we expect a strong demand of efficient cold chain facilities in the coming years.
However, even though there is an influx of funding in this sector by the government and private there remains a void in adequate supply and demand. India’s cold chain positioning is still at a nascent stage and faces many challenges like
- high share of single commodity cold storages
- derisory transport facilities
- high initial investment for refrigeration equipment, panelling and more land
- lack of adequate enabling Infrastructure (roads, water supply, power supply, drainage, etc.);
- lack of awareness about handling temperature sensitive goods by all stakeholders involved
- education in this specific area limited only to some major cities in India
- best in class practices and gold standards not followed and not required by stakeholders due to several of the points mentioned above.
Traditionally, India’s cold storage was developed majorly for bulk products like onions and potatoes, with major facilities concentrated in UP, West Bengal, Punjab, and Gujarat. South India, especially Tamil Nadu, with a complex hot and humid environment, reels under the lack of sufficient cold storage solutions, with access to only .0239 of the 30.11 Mn MT capacity of 6,300 cold-chain warehouses nationally.
Inadequate cold-chain infrastructure has hampered India’s food exports as well, as most developed countries across the world have stringent guidelines for import of agricultural and processed food products.
These challenges have resulted in heavy loss of food and other resources. The losses from agriculture itself have been estimated to be as high as Rs 52,000 to Rs 95,000 crores per annum! There is thus an urgent need of a network of modern multi-chamber cold storages and Cold Transportation infrastructure for commodities requiring temperatures ranging from -30 degrees to +25 degrees.
Safety, global standards of quality, enhanced efficiency, and investments need to be the foundations on which our cold chains need to be built. Being energy intensive (due to refrigeration), these supply chains need to be carefully monitored for their impact on the environment. There is a pressing need to create a reformed workforce to elevate India’s standing in the cold chain market globally.
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