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Lecture 03 : Manufacturing Logistics: National and International Scenario — Transcript

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0:01[Music]
0:22[Music]
0:26hello dear friends welcome back to nptl
0:29online course on Logistics and Supply
0:31Chain management so today uh we are into
0:34the third lecture and we'll uh continue
0:38with your uh uh this Logistics Concepts
0:41and we'll see how these Concepts can be
0:43implemented into manufacturing industry
0:45and then we'll talk about uh the
0:48logistics concept uh the current
0:51industry scenario International and
0:53Indian so under this uh uh session we'll
0:58try to address uh these some of the
1:01concepts like man manufacturing
1:03Logistics I will talk about the
1:05architecture what are the elements in
1:07manufacturing Logistics and what are
1:09those factors which are affecting the
1:11development of logistics and then we'll
1:13talk about the current industrial uh
1:16scenario as far as Logistics industry is
1:19concerned so uh as you can see
1:22manufacturing Logistics uh is basically
1:26uh overseeing the materials resources
1:29and procedure
1:30integral to producing Goods within a
1:32manufacturing settings right so it
1:35involves tasks such as procurement
1:37inventory control scheduling production
1:40managing transportation and distributing
1:42finished products so why manufacturing
1:45Logistics specifically just with a quick
1:48view uh on uh Logistics manufacturing
1:51Logistics versus Services Logistics see
1:54Services uh other than services are
1:57intangible in nature and your
1:59Manufacturing other physical products
2:01are tangible in nature so when we talk
2:03about manufacturing Logistics this is
2:06something we we are storing these
2:09products somewhere maybe in the
2:11warehouses as inventory right at in
2:14different settings maybe warehouses or
2:16Transportation Center distribution
2:18centers we are storing these products
2:20but the problem with the services
2:22industry is that we cannot store the
2:24services so if uh let's say if one
2:29flight is flying from Kolkata to Delhi
2:31and 10 seats are vacant so once it has
2:35take off so we cannot utilize that
2:39unutilized those 10 seats later on right
2:42so that unutilized capacity will remain
2:45unutilized forever but in case of
2:47manufacturing what we can do is we when
2:50we don't have demand we can produce the
2:53product we can store it in our inventory
2:56and whenever there will be maybe rise in
2:58the demand we can can leverage on that
3:00inventory right we can push the
3:02inventory in the so this inventory
3:05management is important concept as far
3:08as manufacturing Logistics is concerned
3:10but in case of services we don't have
3:13such Inventory management there what we
3:15are managing we are managing the queue
3:17so you might have seen when you are
3:19visiting a bank or post office there is
3:21one channel huge Q is there and if for
3:25maybe first hour very few people or
3:27there is no one so no customer is
3:29standing in the queue so during that
3:31time the bank people cannot process
3:34anything right and whenever customer is
3:36coming and handing over the services
3:37same is the case if you are visiting the
3:39barber shop if bber is uh is not having
3:42any customer right now so that is
3:45unutilized capacity and we cannot even
3:48produce the semi-finished kind of
3:49services right so once your customer
3:51will enter so because the customer is
3:55also the integral part of this
3:57manufacturing process when we are
3:58talking about services but in case of
4:01products customer is not part of
4:03manufacturing process because customer
4:05is continuously providing the inputs
4:07these kind of because Services is a kind
4:09of industry which are very very
4:11customized right so depending upon the
4:13needs of the customer so so here we will
4:17talk only about the manufacturing
4:19Logistics how we are storing the goods
4:21obviously then only we'll talk about
4:23storage and warehousing
4:25so the architecture of manufacturing
4:28Logistics these are these are some of
4:30the elements first is your Supply Chain
4:32management so Supply Chain management
4:35will ensure the raw material supply and
4:37other components not only raw material
4:39there can be I I talked about the
4:41subassembly parts as well if any sub
4:44assembly is there that will be provided
4:47to the uh manufacturer let's say we have
4:51supplier one that is supplying some raw
4:54material to supplier 2 raw material this
4:57raw material is being processed by
4:58supplier 2 and is is finally reaching to
5:00us as manufacturing unit let's say we
5:02are the manufacturing unit right so then
5:06again this is one component maybe other
5:09components raw material also coming to
5:11our unit right and from so many
5:13different vendors so this from this
5:15manufacturing unit we will be converting
5:17all those components into finished goods
5:20and these finished goods will be moved
5:23to the final
5:25customer and in that supply chain this
5:29supply chain there may be so many
5:31different stakeholder let's say we may
5:34have distributors in
5:37between we may have wholesalers in
5:41between we may have carry and forward
5:44agents in
5:46between we may have retailers as well so
5:49this is a long chain right so this is a
5:52forward chain which is actually
5:54connecting uh the customer with the
5:56manufacturer so this is a supply chain
5:57so Logistics uh component here is that
6:01it will ensure the smooth flow of this
6:05sometimes maybe raw material sometime
6:07maybe sub assembly sometime maybe the
6:09finished good through this supply chain
6:11so that it reaches to the End customer
6:13Inventory management when we talk about
6:15inventory so we are usually maintaining
6:17three different types of inventory first
6:19is your raw material semi second one is
6:22your uh semi-finished
6:25Goods not finished completely and on the
6:29production maybe you have some
6:31semi-finished goods and then the
6:33finished ones right obviously we have
6:36some inventory in terms of if resection
6:38is coming some in terms of repairs are
6:41coming back so those things are also
6:43there right but usually intentionally we
6:47are maintaining the inventory raw
6:49material semi-finished and finished
6:51goods and now when we are maintaining
6:53these inventories three different types
6:55of the first thing that comes in our
6:57mind is holding cost so if we are
7:00carrying all the time let's say big uh
7:04store departmental store carrying all
7:07the time 10 CR inventory right so that
7:09is they are thinking depending upon the
7:12market analysis that this is the sa safe
7:15inventory right so that much every day
7:17they need to
7:18store so 10 CR that that much money will
7:23remain unutilized forever because always
7:25we are maintaining that much inventory
7:27so that holding cost is always there
7:30right but we should not compromise this
7:33holding cost when we are saying that
7:35demand we need to meet the demand as
7:37well right we cannot go below below the
7:40Safety stock so that we are sometimes
7:43stock out right so that should not
7:45happen so Inventory management will
7:46ensure this production planning and
7:49scheduling so when we talk about
7:51operation management and the broader
7:53perspective we discuss with four or five
7:56questions what should be produced
8:00where should be
8:03produced what quantity we should
8:07produce when we should produce and in
8:11what order we should produce so these
8:14are some of the
8:15basic uh questions we are answering when
8:18we are talking about production planning
8:20and scheding what we should produce that
8:22will Define your whether which type of
8:24product you are producing or you are
8:26sometimes coming up with the services
8:28right so that will answer your first
8:30question where you will produce whether
8:32you will produce in-house or you are
8:34going to Outsource this so obviously
8:36that again depends upon we have
8:38different session on Outsourcing versus
8:41in-house production so we'll see what
8:43are those things when we are going for
8:45outsourcing for here quick Point here is
8:48that when we don't have expertise and we
8:50don't have that much economies of scale
8:52and we want to reduce the initial
8:54investment cost right so then we are
8:58usually going for out
9:00Outsourcing right otherwise when we have
9:03enough demand in the market we have the
9:06technology we have the expertise then we
9:08should produce it in house so what
9:10quantity that will again we'll predict
9:13the demand pattern when we should
9:14produce right when so this will your
9:18Define the uh production scheduling
9:20right and sequencing in what order you
9:23are going to produce so let's say we
9:25have different models running on the
9:28same line a b c so when we should
9:30produce a how much of a should be
9:32produced when we start B when we'll
9:34start C right and maybe in one box you
9:37are packing four items of each right so
9:41once you will not prepare four of these
9:44the final one cartoon will not be ready
9:46right so we have to produce in equal
9:49quantity if that is the combination that
9:52is the basket designed by your maybe
9:54marketing team or production is offering
9:56in the final Market the next point here
9:59is quality control so quickly quality
10:03control usually we have three different
10:07segments in quality control incoming
10:09quality control process quality control
10:12and outgoing quality control incoming
10:14quality control addresses the issues
10:16with the raw material so incoming
10:18quality control is the department which
10:20will ensure that whatever is coming even
10:23the final packaging it's not that that
10:25packaging is not important equally
10:27important because it is carrying your
10:29your logo brand image and inside that
10:31beautiful product right so that should
10:33be tough enough to uh uh Bear all those
10:38bear and tiar during the supply chain
10:40process quality control will ensure the
10:43quality of the product when the raw
10:46material is moving on the production
10:48line let's say we have down the
10:50production line we have 500 different
10:53stages so process quality control will
10:56be observing all the stages of obviously
10:59and then we'll maybe identify out of
11:01those 500 stages maybe 10 stages are
11:04very very critical where the chances of
11:07uh errors are uh very frequent so then
11:11we this is the responsibility of the
11:13process quality control to define the
11:15parameters outgoing quality control once
11:18your product is ready to be shipped then
11:20it is the responsibility of the outgoing
11:22quality unit that you uh inspect that
11:26outgoing lot and if it is okay as for
11:29your sampling plan only then it will be
11:31distributed to the End
11:34Market another important element when we
11:36talk about manufacturing Logistics is
11:38Material Handling so whenever we are
11:40talking about material handling the
11:42first very basic objective is it should
11:45be minimum because when we are handling
11:47the material within in manufacturing
11:49unit let say in manufacturing unit also
11:52I told you many different stages are
11:54there when we are converting the raw
11:56material into finished one so material
11:58is moving Maybe maybe from first to
12:00second stage from second maybe it is
12:02moving to the next fifth or sixth stage
12:04right or maybe sometime we are temporary
12:07storing in other storage house right so
12:11so whenever we are storing when we
12:13whenever we are shifting that raw
12:15material sub assembly from one stage to
12:17other stage this is Material Handling
12:19but it should be minimum we should
12:21design our uh production lines in such a
12:23way that Material Handling should be
12:25minimum because during this we can Dam
12:29manage the products and if you are using
12:31some electronic components and using
12:33with the naked hands you are not bearing
12:36those wristbands which are uh usually
12:38preferred uh for proper system so then
12:42also you can damage the electronics if
12:44you are handling the fragile items so
12:46during Material Handling if so many
12:48stages are there even then you can break
12:50that so these are some of the points we
12:52need to take care when we are talking
12:54about material handling under Logistics
12:56function then talking about
12:59Transportation so Transportation
13:01connecting from the first supplier then
13:04the layers of suppliers are there in
13:06between manufacturer is there to the End
13:08customer the transportation will ensure
13:12the physical distribution of the product
13:15from one end to the other end
13:17warehousing warehousing usually we are
13:19doing this before Distributing the final
13:22product to the End customer it is not
13:25only storage and handling sometimes
13:28we'll see we are doing doing some value
13:29adding activities also in warehousing
13:33right so uh so that that is also very
13:36important component we'll discuss when
13:38discuss about this warehousing as a
13:41separate uh chapter then the next point
13:43is reverse Logistics so I told about the
13:47reverse Logistics can happen if the
13:49customer is not happy or simply wants to
13:53return the product or some defective
13:55item is there right or even excess
13:57material or it maybe in terms of when
14:00the end of life of that product happens
14:04so again you need to recycle reuse or
14:07remanufacture that product so in that
14:10way that closed loop supply chain uh
14:13should be there and that is again very
14:14important part of your Logistics so here
14:18I have included some uh video links you
14:20guys can just quickly go through these
14:22videos and then we'll uh continue our uh
14:25discussion on the topic so because after
14:28delivering uh that kind of product we
14:31need uh installation of that product as
14:33well so you you might have seen that how
14:35they are storing in between and then
14:38they are storing pin code buys and
14:40finally distribution happens as per uh
14:42the requirement of the customer right
14:44and uh so uh this is just a quick review
14:49how the logistics flowing through uh
14:52your supply chain right when we are
14:54talking about either e-commerce websites
14:56you are ordering the product or you are
14:58ordering the product through your retail
15:00chain right so now we'll talk about
15:03quickly the factors contributing towards
15:05the development of logistics so uh
15:08globalization is one factor which is
15:11forcing our Logistics system to evolve
15:14right if you want to com compete in the
15:17market so you have to be with world
15:20class facilities and with world class
15:23Services right having said that world
15:25class facilities right so then this your
15:29transportation system inventory system
15:32distribution Network should be very very
15:34efficient right so efficient doesn't
15:37mean that whenever I'm asking for the
15:39product it is available and then you are
15:41maintaining huge inventory no so how you
15:45can maintain the minimum inventory while
15:48meeting all the customer needs right so
15:51then Transportation also we need to find
15:53out the uh best combination of
15:56Intermodal modes and then we need to
15:58talk talk about the uh fastest delivery
16:02as well with the minimum cost right so
16:05globalization how it is impacting
16:07because the players are coming from the
16:09international market it's not only
16:10Flipkart who is there in the Indian
16:12market so when it is uh we talk about
16:16the e-commerce Industries so Amazon is
16:19another player which is emerging very
16:21fast and because of their promises and
16:23how they are doing deliveries within two
16:26days man managing all the network so
16:29obviously even if any local player is
16:31there so they have to compete right so
16:34this is one factor which is contributing
16:36towards that the other Factor already I
16:38talked about e-commerce growth and it
16:41has reshaped the customer expectations
16:44you can see in terms of delivery times
16:46very short delivery times are required
16:48adaptable fulfillment options
16:51so uh adaptable fulfillment options in
16:54terms of when they want the product
16:56where they want the product what type of
16:59product they want in terms of flavor
17:01color whatever right so these are
17:04different fulfillment options and then
17:06we are talking about payment terms then
17:08also different types of options are
17:10there either you are going for uh for
17:12cood kind of option or you are paying
17:14through your internet banking you are
17:16paying through your credit card debit
17:17card any other option any other digital
17:20wallet you are using customer can use
17:22that so you have to integrate your
17:24system in such a way all the options
17:26should be open to the customer and then
17:29this will happen only when this there is
17:31integration throughout the supply chain
17:35the next factor is supply chain
17:36collaboration so collaboration with your
17:39suppliers manufacturer Distributors and
17:41logistic service provider as I discussed
17:43that long chain so that if there is
17:47collaboration only then you can share
17:49the kick information right and then it
17:52will help you to streamline the
17:54operations let's say if through my
17:57distribution Network I'm getting some
17:59information about the
18:01demand so this whatever information is I
18:05need to send this information to the
18:09maybe the distributor distributor will
18:11process it to maybe the wholesaler
18:14wholesaler will process it to maybe the
18:16manufacturer the manufacturer will
18:18process it with maybe the supplier one
18:21supplier one will process it with
18:22supplier to and likewise this uh keeps
18:25on going right so if there is uh
18:29collaboration among the players and
18:32quick information sharing means if there
18:34is a kind of distal information sharing
18:38so then it will be quick and will help
18:40you in decision making so advanced
18:43technology when we talk about advanced
18:45technology GPS RFID cloud computing data
18:48analytics these are some of the
18:50Technologies which we are now frequently
18:52using talking about the logistics see
18:55this technology will help us in two ways
18:58first how it will help the services
19:00providers or the
19:04manufacturers and then how this these
19:07kind of technologies will be helpful for
19:09the final customer for
19:13manufacturer analyzing the demand
19:15patterns they can only do when they are
19:18analyzing the buying pattern or behavior
19:21of the customer when they are analyzing
19:23or they are getting the information from
19:26all the fragmented industry in the world
19:29or wherever they are operating right so
19:31because it's not very organized kind of
19:33store where you can collect information
19:35at one point of time right so you might
19:38have seen if randomly you are checking
19:40maybe ticket price from Kolkata to Delhi
19:43right so you checked it once Just for
19:46information maybe you are not in the
19:47mood your tour is not even finalized but
19:50still you checked you you will see in
19:53the very next moment that information
19:56related to the pricing from for that
19:59particular tour will be reflected in all
20:01your social media account so this is how
20:04information is being shared so quickly
20:06that you searched for some product
20:08similar kind of products will be
20:09advertised to you right so that you you
20:12can make up your mind and can finalize
20:14the things on our platform right so this
20:17will help only when I'm I'm closely
20:20observing my uh customer so then it will
20:23help us to provide the customized
20:27Services right when talking about
20:30customer customer also wants quick
20:33information so like I talked about the
20:36information that what is the price of
20:39flight from Kolkata to Delhi so I have
20:42different platforms I can check on make
20:44my trip I can check goo I can check the
20:46website of that local whatever player is
20:49indigo or Airlines Indian Airlines or
20:51whatever it is right and then I have
20:53some other platforms like exigo which is
20:56comparing all these platforms right and
20:58will give you the best option whatever
21:00you can pick as per the price as per the
21:01route as per the time and services right
21:06so customer is also in that way
21:08empowered because he is also getting the
21:10enough information so this is how the
21:13technology will help infrastructure
21:15development now this is the promise and
21:18now uh obviously already all the
21:21governments are working on that they
21:22have to develop that infrastructure only
21:25then the economy will be boosted up
21:27right so we we have those ports airports
21:30Railways and highways obviously some uh
21:33limitations are there will be there
21:35throughout but still the connectivity is
21:38growing better and better so that is
21:40also one kind of maybe factor and giving
21:43opportunities for uh improving the
21:45logistics performance emerging market so
21:49when you are planning to expand your
21:51market right the first thing is you
21:54should have the distribution Network to
21:56distribute your product to that market
21:58right so when I'm saying New Market so
22:01you need to understand the Dynamics of
22:03that market right every Market will not
22:05behave in the same way because there are
22:08some Regional Factor cultural factors
22:11the same advertisement will not work in
22:13India and same will not work in us right
22:15you cannot do in that way and then the
22:17kind of product offerings are there
22:20maybe the climatic conditions also
22:21sometime playing role or maybe the uh
22:24the cultural values are also playing
22:26role in that and then local regul
22:29uh whatever your obligations are there
22:32you need to complete those obligations
22:35as well right when you are going cross
22:37Borders or even Interstate you are going
22:39so even then you you might have seen the
22:42tax structure is there different TX
22:45structure even if you are operating in
22:47scj special economic zones or if you are
22:49working in outside of those zones or you
22:51are transporting your goods from one
22:53state to other state within one country
22:55even then those documentations and those
22:58uh custom clearance is required the
23:00another factor which is contributing
23:02toward this is sustainability
23:03initiatives so green packaging and
23:07energy efficient Transportation modes
23:10right so like we talked about if we talk
23:12about ships if we talk about electronic
23:16vehicle so when we'll talk about these
23:19kind of Transportation mode we can save
23:21energy as well and then we can be
23:23efficient right when we are saving
23:25energy we can be efficient and then
23:27efficiency is also directly related to
23:29sustainability and how we can use the
23:31renewable energy resources that also we
23:33need to see so fuel some alternative we
23:36can check for the uh What In traditional
23:39way petrol or diesel we are using right
23:42so that is another thing we can customer
23:44expectation is something we can never
23:47Delight our customer right we can never
23:49Delight if today I'm giving 5% next day
23:52the my customer will be expecting 7%
23:55next day he will be expecting 10% right
23:57so in that way the expectations are
24:00increasing day by day but then the
24:02minimum expect expectations are fast
24:04delivery accurate tracking and hassle
24:07free returns if you are allowing the
24:10returns so obviously I'll place the
24:12orders I will be you know more
24:14comfortable while visiting your website
24:16because if anything goes wrong during
24:18the service Channel or maybe with the
24:20product functioning or safety related
24:22parameters I can return it on any day
24:24right then regulatory changes are there
24:27as we talked about uh when we are going
24:30overseas or when we are going from one
24:31state to other state even then there
24:33will be regulatory changes and we
24:35sometimes we are uh bound to those
24:38environmental standards like uh recently
24:41Whenever there is a uh you know hike in
24:44the pollution level in Delhi or NCR
24:46regon so they are Banning the truck
24:48where maybe 15 years old right or more
24:50than 15 years so those trucks cannot
24:54enter the Delhi region so because of the
24:57pollution and all that they they want to
24:58control right and then you might have uh
25:01heard about how the Supreme Court and
25:05government also they banned bs4 engine
25:07right so these are some of the
25:09regulatory measures we need to keep in
25:11mind when we are going from one reason
25:13to other reason so if you talk about
25:16this Logistics industry you you can see
25:19what is happening globally here you can
25:20see if I'll randomly I'll see so 15 to
25:2520% increase is there and we are
25:27expecting of more than 14 trillion US
25:30economy just uh this Logistics industry
25:34which is contributing towards the world
25:36GDP right talking about uh how different
25:40countries are performing you can see
25:43Indonesia uh the per kilometer cost is 2
25:48uh sorry 24% uh Logistics they are
25:51contributing to the GDP and Republic of
25:54Korea is just 7.8 we are here somewhere
25:57in between so so in this way we can say
26:00that we need to improve our performance
26:02because still logistic cost is higher
26:05than the brick Nation or we can say that
26:07develop economies all the development
26:09economies they are having lower
26:11Logistics cost just because of their the
26:14Streamline operation is there they need
26:16not to wait on the road for Uh custom
26:19clearance their systems are automated
26:21here also one very uh uh recent uh
26:26movement is that uh fast ATT but if you
26:30go through only I think 45 to 50% they
26:33are paying uh through using fast ATT
26:36right so in that way it can ensure the
26:38continuous movement of the vehicles on
26:40the road right but yes any technology
26:42new technology is coming so it will take
26:46at least a decade uh to commercialize it
26:49at uh fully
26:51right so if we'll talk about the
26:53industry size so Logistics industry was
26:56worth over 8.4 trillion e in 2021 and it
26:59is worldwide and now it is uh expected
27:03that it will exceed 13.7 trillion by
27:062027 so total Logistics cost if you'll
27:09see is 10.7% of global GDP right and uh
27:14if we'll talk about Regional insights so
27:16Asia Pacific regions accounts for the
27:19largest share of logistics cost because
27:21of the population and then we are doing
27:23so many deliveries right so that is one
27:26obviously big factor and then if you'll
27:28talk about the third party Logistics
27:30United States hold that position uh
27:33third party Logistics is a another
27:35player which is doing all these kind of
27:38services Logistics distribution
27:39warehousing on behalf of uh the
27:42manufacturer or the seller right and
27:45there are some Emerging Markets India is
27:47one of uh them and uh because of this
27:50e-commerce industry you can see the
27:52supply chain pressure index is
27:55increasing obviously because of those uh
27:58demands increasing from the customer
28:00side and then the trends are also
28:02changing because now we are usually we
28:05are going for online
28:07shopping where we are fixed with our
28:10mind so if we talk about Indian uh
28:13Logistics industry so now if you talk
28:15about India is second fastest growing
28:18Nation after China and if you talk about
28:21uh compound annual growth rate it is uh
28:248.4% uh behind just China right uh yes
28:28obviously World economy was hit by this
28:31uh covid-19 pandemic and uh uh India is
28:35also affected by that and we can see
28:3823.9% down but yes we are recovering and
28:40we are recovering in a uh faster way
28:43than expectations so if we'll talk about
28:46Asian players so we are faster and if
28:48we'll talk about the global average even
28:50then uh we are doing fairly well in that
28:54so Market size in 2022 the Indian
28:57logistic Market was approximately $274
29:01billion right and the projection
29:04indicate that by 2030 the market is
29:07expected to grow by 563 billion USD doll
29:11annual growth rate of
29:1399.4% which is which is huge right so
29:18but but the challenge major challenge is
29:20the logistics cost where we are saying
29:22that we are contributing towards 14% And
29:25if you talk about bricks average that is
29:2711% so we have to reduce this we have to
29:30cut down this Logistics cost that's why
29:32there is so much pressure so much
29:34research is going on how we can find out
29:36the optimal uh Roots how we can minimize
29:40the uh consumption of the resources so
29:43that we can be more efficient and if
29:45we'll reduce the time of delivery as
29:48well even then we will be saving the
29:50fuel as well right so those all points
29:52are interl we'll work on one obviously
29:55we'll reduce the total overall cost so
29:58efficiency challenges we are lagging
30:00Behind the Bricks nation and the basic
30:03thing here is because we are not
30:05perfectly using the intermodel mixture
30:07right I I talked about the global
30:10averages that
30:1260% your road transportation is
30:14contributing towards the total overall
30:17Logistics cost but if we talk about
30:19Indian scenario so around around 70 to
30:2275% is going through Road right so that
30:26is another very uh important point we
30:29need to take care so let's talk about
30:32quickly the logistics sector in India so
30:36Logistics sector now we understood till
30:38now that this is backbone of any
30:40industry right ever you talk about uh
30:43your manufacturing industry or you talk
30:45about Services industry Healthcare and
30:48any any type of Industry even Healthcare
30:50you need equipment right you need
30:51medical supplies right so those medical
30:54supplies will be ensured timely only
30:56when you have that strong Logistics
30:58infrastructure right and you can just
31:01imagine the emergency situations related
31:04to healthcare industry so how efficient
31:06our supply chain or Logistics should be
31:08there so and yeah because this is
31:12interconnected kind of thing right
31:14between one player to supplier one to
31:16supplier two supplier two to
31:18manufacturer so if Supply is interrupted
31:21or delayed at one point obviously it
31:23will be delayed at the next stage as
31:25well right so to reach at the Final End
31:28on time all these points should be
31:32perfectly connected information should
31:34be perfectly shared right how much time
31:36is required from stage one to stage two
31:39so let's say if we are having 10 stages
31:41all should be streamlined right so we
31:43should avoid that ripple effect and if
31:45we'll talk about logistics sector in
31:47India these are some of the challenges
31:49which we are facing in India right so
31:52quickly we'll go uh through one by one
31:55first talking about high order intensity
31:57ratio
31:59so because of this is the first very big
32:02advantage that because of the huge
32:05population we will also reduce uh we'll
32:08get the those many orders right so any
32:11day you will start you'll get those kind
32:13of minimum orders this is kind of
32:15opportunity but yes this is kind of pain
32:18also for the logistics uh manager
32:21because they need to organize the
32:24products in that way because there may
32:26be some products which require are some
32:28priority there may be some products
32:30which you can delay a little bit or
32:32whatever your promises are if you are
32:34into pharmaceutical industry also there
32:36are also some perishable medicines or
32:38vaccines you need to deliver on the same
32:40day or you need to deliver the urgency
32:42is like that you need to deliver within
32:4430 minutes right so then also uh you
32:47need to prioritize so it takes time only
32:49manually if you'll talk about we cannot
32:51count on fingers which one is you need
32:53to prioritize and which one you can
32:55delay so that also you need to to set up
32:58uh the technology where we we are still
33:01working on that and we need to reach at
33:03that level where quickly we can share
33:06the information next important Point
33:08here is the payment cycle how quickly
33:11the payment will be done so that it
33:12reaches from the customer end to the
33:14first supplier because first supplier
33:17when it is reaching to the customer end
33:19he may be in a flow of supplying the
33:23second or third or fourth load right but
33:25he still he has not received the payment
33:27of the for the first one so then it will
33:29be problem right so that also we need to
33:32ensure how quickly we can ensure the
33:35payment
33:36Cycles second point is transportation
33:38roadblocks so because I told you that
33:4170% share is because we are going
33:44through road so that much is contributed
33:47by Road transportation and road
33:49conditions uh even today it is okay
33:53maybe tomorrow there will be some uh
33:55accident or maybe landslides or maybe
33:58weather conditions so then again these
34:01no one can predict right so when we
34:03cannot predict so we cannot plan for
34:05that so then how much inventory or stock
34:08you need to keep with you because you
34:11are not sure when you will get the next
34:13lot right and then this is not the end
34:15even if you're going through Road
34:17Transportation so many checkpoints are
34:19there toll stations are there so how we
34:21can streamline these toll stations with
34:24single payment or document you can move
34:27across cross the borders right this how
34:29we can ensure so only digitalization
34:32will help uh into that so that will help
34:34us to save the time so rail tariffs if
34:38obviously if we talk about the cost uh
34:41Road Transportation I as I told you this
34:43is 70% contributing towards the total uh
34:47Intermodal share if we'll talk about 2.5
34:51rupes per kilom but if we'll talk about
34:54train it is 1.5 if we talk about ship it
34:57is only 0.25 so this is the most
35:00efficient way of transporting your goods
35:03but the problem is whether we have that
35:07infrastructure everywhere it is not
35:09available so how then we'll deal with
35:11this right then air transportation is if
35:14we'll talk about globally it is less
35:16than 1% because it is very costly but
35:18yes then we are doing for emergency kind
35:21of things or high priority uh products
35:24we are doing that right but then we need
35:26to find the perfect mixture of all this
35:29so that we can ensure the timely
35:31delivery with the minimum
35:33cost port and shipping problems so uh
35:37probably taking this this kind of uh uh
35:40transportation of mod is taking the
35:42longest time but yet it is sustainable
35:46and the cost is one factor which is very
35:50very important and it will lower down
35:51the cost but the problem is related with
35:54the infrastructure right so because
35:57usually these are shipped through large
36:00vessels and when you you want to you
36:03know import uh to some part maybe the
36:06depth is not that much which is required
36:09sometimes right and then you cannot ship
36:11through large bessels right this is
36:13another infrastructure limitation so
36:15even if you have Port nearby you cannot
36:17ship large Bessel to that point so then
36:20you are shipping it to some maybe far
36:22away and then again you are using the
36:24road Transportation so that end to
36:26endend connectivity is also problem as
36:28far as Port shipment is uh concerned
36:31lack of skilled and specialist personal
36:34it is not like that it is just simple
36:36you are packing and loading so there are
36:38Professionals for this and right this is
36:41very very important because packaging is
36:44the first face right is the face who is
36:46going to interact with the customer so
36:50we lack with the uh trained staff and
36:54obviously training cost is there and
36:56label turnover is also there right so
36:59there are lack of skills even we are not
37:01going for proper training programs we
37:03don't have time because initial
37:05investment we think is very high so that
37:07somehow we want to cut down so uh uh
37:11there we are compromising and then
37:13people are coming people are leaving and
37:15we are not getting the right talent for
37:18this slow transition into NE uh
37:21technology if we talk about Japanese
37:23Network structure it is very fast and
37:26how they are commun commu shoting from
37:27one point to the other point is it is
37:30marvelous right so their strong Network
37:33distribution Network provide them the
37:36obviously the Competitive Edge right but
37:38why uh the other countries are failing
37:41the slow adoption of the technology is
37:44maybe the another reason and why slow
37:46adoption because the initial setup cost
37:48is very high so this initial investment
37:51is high and then we are sometimes the
37:54fear that maybe we'll not be able to
37:57recover this cost fully or maybe other
38:00players are there who will be lead
38:02leading this industry and we are in that
38:05Dilma whether we'll recover the initial
38:07investment or not so let's continue with
38:09the whatever technology we have then
38:13when you are implementing the foreign
38:14technology or any new technology you
38:16need to uh obviously import the
38:20expertise as well right who will train
38:22your Force Workforce so that is also
38:24time consuming and cost uh carrying
38:27activi
38:28so uh these are some of the reasons why
38:31we are uh slow in adoption the new
38:35technology but yes when you want to
38:37compete at the World level you have to
38:39be updated with the technology
38:41warehousing and Taxation uh
38:43discrepancies warehousing facilities if
38:46we are having poor warehousing
38:47facilities so many damages are happening
38:50leakages are happening and then uh
38:53sometimes if you are talking about the
38:54perishable items so those Cold Storage
38:58are required but then we we are not
39:00having that much infrastructure this is
39:02another point which which we need to
39:04stren strengthen up right and then the
39:06different layers of text structure text
39:09structure is also uh imposing so many
39:12hurdles in the smooth flow of that
39:16Logistics so when we talk about a
39:19competition with global Giants which
39:21which are working on very short supply
39:24Cycles which are having the that latest
39:27technology then there is the challenge
39:29for the Indian logistics company so
39:32probably that may be the reason Flipkart
39:34struggled to you know uh but still flip
39:37card is carrying around around 48 to 50%
39:40share but yes facing tough competition
39:43from foreign player Amazon but now
39:45because flip cart is also acquired by
39:48Walmart uh they are claiming around 60
39:50to 70% share in that so maybe then
39:52Walmart is the world retail giant right
39:56so when once Walmart is there so then
39:59you can just expect that level of
40:02Technology integration that level of
40:04efficiency inventory the way they are
40:06handling we'll we'll do we'll discuss
40:09the full case on how Walmart is so so
40:12cost efficient and delivery is perfectly
40:14done within the time and still they are
40:17managing selling the t-shirt at $5 right
40:20so how they are doing that then customer
40:23mindset so many expectations demands
40:28the type of product they want the level
40:31of quality they want the level of
40:33services they want the variety they want
40:35and the time so they also want a very
40:38minimum lead time right short lead time
40:41so how this is possible this is another
40:44challenge for uh Indian market right so
40:47growing customer demands how we can meet
40:49those growing customer demands so still
40:52Amazon have uh internalized and
40:54streamlined their entire Logistics
40:56process in order to meet the
40:58expectations of the customer this is
41:01another very big challenge fuel
41:02economics if you try to understand the
41:05base price is somewhere around 30 rupees
41:07and then layer over layer the taxes are
41:10added and then the cost is somewhere
41:13around 87 rupees so this is not the
41:15latest one now we are reaching around
41:17somewhere around 100 rupees so I mean
41:20this cost is something beyond our
41:22control so they they are obviously
41:24pushing down our margins The Profit
41:26levels so this is one point how we can
41:29fight with we need to find out the
41:31alternative ways how we can make the
41:33last mild delivery using electronic
41:36vehicles or Cycles or electronic Cycles
41:39as well right and then you will be able
41:41to add into sustainability as well
41:43because you are reducing the carbon
41:45footprint as well and then you are cost
41:47efficient as well so and then proper
41:50mixture of all different types of modes
41:53of transportation will help into
41:54reducing the price uh of this
41:57Transportation so government policies
42:00and bottlenecks uh all the government is
42:03streamlining the process fast tag one
42:06document right so that uh uh kind of red
42:10carpet treatment is now done uh done
42:13with the all the players so that they
42:15should invest in India and uh we can
42:18even uh export to other countries as
42:21well right so uh that is kind of
42:25movement is going on still we are we are
42:27trying to you know come up with the best
42:30infrastructure where we can provide
42:32those Services right and shortage of
42:35drivers and delivery staff uh this is
42:37another problem with Indian Logistics
42:39industry where uh we we we don't have uh
42:43the trained staff and because the
42:45motivation and the compensation maybe
42:47sometime they are getting uh is not
42:50enough to motivate them to keep them in
42:52that industry so they are also leaving
42:54so how we can you know uh Empower those
42:58players because very important players
43:00so if we'll Empower those drivers maybe
43:02in terms of the same driver is working
43:04as delivery staff also or maybe some
43:07other value adding activities they can
43:08contribute so in terms of they will also
43:11uh you know find them themselves
43:12connected with the with the distribution
43:15Network part of means they will feel as
43:17one of the stakeholder and uh maybe then
43:20we can retain them for longer period of
43:22time so here we can conclude that
43:25manufacturing Logistics you usually now
43:27we are dealing with the products how we
43:29can ship that product so usually we'll
43:32talk about the inventory uh cost how we
43:35can control that and in what order and
43:38uh quantity we need to produce right
43:40those products and then managing the
43:42distribution and transportation so
43:44storage is another point which is
43:46important in manufacturing Logistics but
43:48in in in we'll talk about the services
43:50industry there we will talk about the Q
43:53management right there is no such
43:54concept of inventory management and the
43:56major Force as we talked about the
43:58globalization is one big factor the
44:00e-commerce the way the e-commerce
44:02Industries are coming up with the new uh
44:05Innovations right 30 minutes delivery
44:07concept and Promises so it is a a very
44:10big Force if you want to survive you
44:12have to come up with the uh
44:14technological investment you have to
44:16come up with the you know more
44:18infrastructure and uh also the
44:21sustainability initiatives also because
44:22now as a customer uh customer are
44:25preferring the products which are aable
44:27if it is written on the pack packaging
44:29like menra is doing so they are writing
44:32on their packet that it is 100%
44:34recyclable and that packaging is made up
44:37of paper right so some customers are
44:40more conscious about that and they want
44:42uh their products should have minimum
44:44carbon footprint
44:47so these are the text and reference
44:50books thank you so much

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