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Lecture 07 : International Logistics — Transcript

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0:01[Music]
0:22[Music]
0:26so hello dear friends so welcome back to
0:29uh npt online course on Logistics and
0:31Supply Chain management so uh now uh
0:35we'll spend maybe a couple of sessions
0:38on discussing the international
0:40Logistics uh I'm Dr vikas takur
0:42assistant professor of Department of
0:44humanities and social sciences IIT
0:47kakur so uh uh in this session we'll try
0:51to address uh the basic concepts under
0:55International Logistics and then we'll
0:57see what are the key components we'll go
0:59for what are the uh we'll divide this uh
1:02whole uh lecture into two parts first
1:04we'll talk about very important that is
1:07uh your crossborder transactions how the
1:10financial transactions will happen what
1:12are the different methods what are the
1:14steps what are the challenges because
1:16many stakeholders are involved in that
1:18Supply Long supply chain so we'll talk
1:21about those uh uh transactions right and
1:24then major stakeholders in international
1:26Logistics Consignments and then we'll
1:28talk about small case right so let's
1:31start with the the international
1:33Logistics so you can see that
1:36International Logistics is an
1:37increasingly important discipline for
1:39the global economy as more companies uh
1:42leverage it to reduce cost and take
1:45advantage of Highly specialized
1:47capabilities in different regions
1:49countries right worldwide and when we
1:52are saying that it's it's one part where
1:55we can take the advantage so just I will
1:59uh elaborate a little bit on this if you
2:02see the initially also we divided this
2:06total supply chain into three major
2:09stakeholder one is your suppliers
2:12another one is your
2:14manufacturers and then finally we have
2:17customers now we are saying that this is
2:21international Network right so when we
2:24are saying that International networks
2:26so obviously minimum we will be having
2:29two countries or more than two countries
2:32so let's talk about the perspective for
2:34international logistics for suppliers
2:36for manufacturers for customers so first
2:39suppliers so I told initially that this
2:42is not one supplier this can be layer of
2:44suppliers where there may be suppliers
2:47of suppliers right who is supplying the
2:50first raw material to the second one
2:52second one is supplying that uh
2:54processing that raw material and again
2:57at at its final product it is providing
2:59as a raw material maybe the for the next
3:01supplier so this is how it is going on
3:04right so as a international suppliers
3:08maybe we have why we are going for
3:11international supplier this is first
3:13question so first maybe there is raw
3:16material
3:17availability right so easily you are
3:20getting the raw material that's why you
3:21are getting going there maybe you are
3:24getting cheap raw material then you are
3:26going that maybe resources whatever
3:28resources we are using using for
3:30processing that material for generating
3:33that raw material we are getting easy
3:35resources in terms of let's say uh you
3:38talked about uh your uh
3:41material you are getting easily you talk
3:43about your Manpower maybe cheap Manpower
3:46you are getting there so then you want
3:48to go there right maybe in terms of
3:51Technology as
3:53well in terms of market right so when
3:58you are going overseas these are few
4:00reasons why you are going overseas so my
4:03suppliers let's say there are pros and
4:06cons right if I'm having localized
4:09suppliers anything happens wrong in the
4:11distribution Network right so even if
4:14I'm having local suppliers still I can
4:16ensure the supply smoothly supply of
4:18that raw material but because it is very
4:21near to me and we can Implement just in
4:23time as well no need to maintain the
4:25inventory safety stocks at that cost
4:27also we can reduce right but if your
4:30supplier is overseas that means in
4:33advance you need to plan the inventory
4:36let's say it is taking 10 days for any
4:38shipment for completing that
4:40replenishment cycle when your inventory
4:42is reaching to your store it is taking
4:4410 days right and if anything goes wrong
4:47in between those 10 days anything can
4:50happen right so then your whole
4:53production will be stopped so this is
4:55one very crucial point when you are
4:57going for overseas suppliers but other
4:59hand let's say I'm looking for some
5:02lighting solutions and you know Chinese
5:04market is well known for lighting
5:06solutions and I'll get the fair quality
5:10at very very reasonable price right and
5:13if I'll say compare with the local
5:15vendors so they are charging very high
5:18obviously their cost of production is
5:20very you know that uh uh High because of
5:24the technology they are not using at
5:26that efficient level or Manpower
5:28resources skills required they are not
5:30using at that uh level right so this is
5:34the plus point when we will go overseas
5:37maybe the quality of raw material we are
5:38getting overseas is better than the
5:40local one right these are some of the uh
5:43pros and cons when we are saying when we
5:45are going for overseas suppliers let's
5:47say manufacturer manufacturer is also
5:49not single manufacturer there may be uh
5:51so many co-manufacturers also in that
5:54right so let's say these co-
5:56manufacturer now why uh any us apparel
6:01industry wants to set up their you know
6:04manufacturing uh Hub somewhere in uh
6:08maybe Pakistan or maybe Bhutan or
6:10Bangladesh Nepal why they are picking
6:12those strategic location the very basic
6:15reason is first is raw material
6:16availability then the skills required
6:18then the third thing is cheaply they are
6:21getting all these resources as manpow as
6:24raw material and then they are
6:25processing it and this is how Walmart is
6:28making it happen that with $5 t-shirt
6:33they are sending selling that $5 t-shirt
6:36in US market right you you just imagine
6:39they are crossing so many countries the
6:42distribution cost is there Logistics
6:44cost is there but still they are able to
6:46manage that that they can process
6:49overseas and again sell back to their
6:52country right so this is not only one
6:54example so many other uh companies are
6:56also doing like that only then the next
6:59thing is and in that process
7:01manufacturing maybe sometimes a
7:03technology if we talking about
7:06automobile industry so japanes are known
7:08for their technology for their quality
7:10products Right Toyota who can forget
7:12about Toyota manufacturing system right
7:15so their T TPS production system so they
7:19are well known for their quality
7:20standard production uh systems they have
7:23set up over the time and the concepts
7:26they have developed in that industry
7:28right so if you you are getting that
7:30technology somewhere from Japanese
7:32technology this is this was the very
7:33basic reason for Hero Honda Venture
7:36right so Honda was having technology
7:38hero was having vast Network
7:40distribution Network within country
7:42India so they started joint vuring that
7:45organization they came into two wheelers
7:47right and this is how they started Al
7:50although there there is another story
7:52how it ended up but this was the basic
7:55reason uh why they came into that joint
7:58venture right there is a another reason
8:00why uh usually organizations are going
8:02for overseas now customer like I'm
8:05having access to foreign expertise
8:08foreign technology foreign resources
8:10same way I'm having now access to uh the
8:14foreign customer as well so in that way
8:16my market is now more open right so but
8:19Market is more open I'm getting more
8:21customers my brand is growing right so
8:25that visibility is there so if I'll say
8:28uh if my app is there let's say uh I'm
8:32using Ola so Ola is promising you
8:35wherever any corner of the world you
8:38will go you just install this app you
8:41need food you'll get that Ola is not
8:43providing food Uber is providing food
8:45right but let's say Ola right so you'll
8:48you want Taxi we'll provide you taxi at
8:50the fair rates right and this is one
8:54stop solution you'll get everything in
8:55that right you can make the payment
8:57still using your own currency
8:59and that will be automatically converted
9:01and will be you know credited to the uh
9:04the partner who will be giving you the
9:06services so obviously every customer
9:09will feel safe if you are going in the
9:11foreign countries obviously you are
9:13little worried about the transportation
9:15the hotels restaurants how you'll take
9:18care of all those things if any player
9:20is providing you onetop solution and you
9:23are familiar with that player right you
9:25will feel more comfortable right you
9:27will not be worried about your financial
9:29transactions investing into that right
9:32so this is the concept why International
9:34Logistics is required so when I'm saying
9:37sourcing hiring and delighting customer
9:40around the world sourcing around the
9:42world obviously your Logistics network
9:44will ensure that your suppliers around
9:47the world are providing you the raw
9:49material to your manufacturing unit
9:52right so that is only possible when your
9:55International Logistics is there you can
9:58hire man
9:59you can again even you can your Manpower
10:04you can transport from one point to
10:06other point right and then customer
10:08around the world I told you very small
10:10example of Ola or Uber where one
10:12platform is providing you all the
10:14solutions right so it's not only about
10:18the movement of you know your physical
10:21movement of the product right it talk it
10:24talks about your movement of money and
10:27information this is important that's why
10:29I told you when you are making online
10:31transaction and if you are in UK us or
10:34some other country so if you are using
10:36still Ola or Uber right Uber is there so
10:39if you still you are using in India Uber
10:41you are using there as well Uber so
10:44you'll feel more comfortable even if
10:46something goes wrong you are not getting
10:47the taxi that amount is debited debited
10:51from your account even then it will be
10:53credited later on so that promise that
10:56faith is there when so International
10:58Logistics this is again very important
11:00part not only Logistics we talked about
11:03not only the physical movement of the
11:05goods but also the money and the
11:07information right so obviously when you
11:10are spending more than two countries so
11:12International Logistics will be there
11:14why we are going for that already we
11:16just I discussed on the very first slide
11:19first is cost efficiency there are
11:22challenges because when you are going
11:24overseas multiple tax structure is there
11:27tariffs Duties are there
11:29long distance cost will be there right
11:32these all cost will add up then you need
11:35to take care of regulatory Frameworks
11:37right complex system you need to so that
11:40means all these challenges will add up
11:42to the cost where you will talk about
11:44cost efficiency but still because I told
11:47you there are so many companies are
11:50doing like that okay uh I remember uh if
11:54you talk about sunflower oil or other
11:56raw material which we are producing in
11:58India we are sending sending to some
11:59African countries and again importing
12:02the finished product in India and that
12:05is cheaper than what we are processing
12:07the same material here in India and
12:09selling back to Indian market right so
12:12there are so many examples that uh we
12:16can if you'll go overseas obviously the
12:18market will open up for us and we can
12:22leverage on those efficient resources
12:24and we will be cost efficient in the end
12:27if you talk about reliability
12:29there is misconception about this local
12:31rule that if something goes wrong how
12:35you will tra Trace even if shipment is
12:38coming and on the way something goes
12:40wrong right so your whole lot is gone
12:43this is not only the lot is gone maybe
12:45your your next shipment is awaited for
12:48next maybe 20 days so for 20 days what
12:51you will do right so that reliability
12:54how you can rely on the foreign sources
12:58in terms of raw material in terms of
13:00foreign market so then there are
13:02challenges sometime maybe there is
13:04demand from the foreign market so you
13:06are prepared for that and you can
13:07mitigate those all those things are
13:09there but what if there is no demand so
13:12then we need to pick which uh uh
13:15strategy we'll go for that when we are
13:18exploring the international markets
13:20right we have different strategies if we
13:22have continuous demand we should you
13:24know start our own distribution Network
13:27when we are not sure about the demand
13:29and it is fluctuating then we can
13:31Outsource somewhere right now this much
13:33we can understand right when we talk
13:36about relationships so reliable
13:38efficient operation it's easier to build
13:41friendships and making friends in many
13:43places right so now instead of your in
13:46your manufacturing plant you are not you
13:49know focusing only on one vendor now we
13:53have vendor 1 vendor 2 vendor three
13:55vendor five vendor n right so if
13:59anything goes wrong in this part of the
14:01world or in this part of the world still
14:04we have these many vendors we can
14:06survive our sub with our distribution
14:08Network right so in some cases and
14:12international Logistics may be one
14:14competitive advantage that attract
14:16International customers right and uh
14:20maybe uh when we are having low
14:24differentiation in terms of USPS when we
14:26are talking about then we can do fairly
14:29well in in these International markets
14:31right so just to give you that
14:34experience of international market so
14:36here I have included some uh video links
14:39you guys can just quickly go through
14:41these videos and then we'll uh continue
14:43our uh discussion on the
14:46topic right so this you can see as uh uh
14:51many players stakeholders are involved
14:53and then the very uh you know timely
14:57solution is there provided by uh your
15:00Amazon Global Logistics so let's uh try
15:03to understand what they are saying and
15:06uh we can see just they have highlighted
15:08we have let's say uh here we have
15:11manufacturer one or supplier one
15:13supplier two supplier three right these
15:16all are providing the product and we are
15:19keeping it in some Warehouse or you can
15:21say the Fulfillment center
15:26right and from fulfillment center we are
15:29maybe this is we are talking about
15:31International Logistics the next player
15:33will come into maybe we will ship it so
15:37some shipping agent shipping agency or
15:40company will be there then shipping
15:42carrier will be there who will be
15:44transporting it to another Warehouse or
15:47fulfillment center near to the customer
15:50and then finally the last mile delivery
15:52again will happen to customer 1 customer
15:552 customer 3 right so you can just see
15:58how many different players are involved
16:00in that okay so suppliers are there then
16:03here also Logistics uh your
16:05transportation come into picture
16:07fulfillment of Center is there then
16:09there is shipping agency will ship from
16:11this port to this port again the
16:13logistics or distribution Transportation
16:16network will work will uh you know take
16:19that inventory to nearest fulfillment
16:21center right and then you can see from
16:25that fulfillment center the finally the
16:27demand is met uh uh this is how
16:29International Logistics is working now
16:32you just imagine working with those so
16:35many different stakeholders players and
16:37internationally so this managing all
16:40that long chain is is a big challenge
16:43right so with Amazon solution you can
16:45easily manage that so let's go through
16:48what are the key components as discussed
16:50key customer clearance so when you are
16:53exporting to you know different
16:55countries there are uh you know uh some
16:59taxes are there Customs are there Duties
17:02are there so you need to you know be
17:04aware about what type of structure they
17:06are following so maybe in one country
17:08one kind of uh maybe services are
17:10completely free in another country maybe
17:12up to some level it is free and then
17:14after that they are charging some taxes
17:16in India also recently uh we have
17:19implemented GST so you need to take care
17:22what are the goods coming in first
17:23category second third fourth and
17:25accordingly that will be there so
17:27keeping track of all those things and
17:29also not fixed this tax structure is not
17:31fixed right maybe like we are revising
17:35other countries are also revising so who
17:37will be taking care of all those things
17:39right so this is one big concern in
17:41international Logistics talking about
17:43supply chain visibility somehow up to
17:46some extent RFID iot sensors still we
17:50are not fully utilizing but RFID has
17:53made our life very easy you might have
17:56seen when we are visiting onstop
17:58solution Market uh like your big Bazar
18:01or Vishal Mega or any type of Spencer
18:04stores right so they are just tracking
18:06with that tracking gun they are tracking
18:08the product that barcode and reading
18:10that and full information is provided
18:12the inventory number what is the uh
18:14inventory level Left Behind when the
18:17product is being consumed the pricing
18:19information how much inventory is left
18:21on the Shelf in the store in the
18:22warehouse right so that information
18:24digitally you know shared with all the
18:27stakeholders with the manufacturer that
18:29this much inventory is depleted today I
18:31need to prepare for that much inventory
18:33for the next day at the same point of
18:36time the raw material supplier will also
18:38get the information that these many
18:40products are consumed so we need to
18:42prepare the raw material for next
18:44Consignment right so this this is how we
18:47can ensure the tracking of the inventory
18:49and we can Implement GPS tracking for
18:52tracking the you know when inventory is
18:54moving on the road so we want that
18:56realtime visibility and tracking so that
18:59we can effectively manage mitigate and
19:02optimize the logistics operations
19:04right again Inventory management in
19:07international Logistics like I told you
19:10that uh see this is international market
19:13so like we are facing fluctuations in
19:16demand in the local market same way we
19:18can say uh face the demand there as well
19:21so then how much inventory we keep
19:24internationally that also may be the is
19:27little cost clear right when we are
19:29keeping inventory uh on the ports maybe
19:32little high cost is there so that we
19:35need to maintain because throughout the
19:37channel at any point you talk about we
19:40are keeping some some inventory at every
19:42point right so if you are holding maybe
19:44average maybe for two hours or maybe two
19:47days so if you are asked for maybe
19:50holding it for maybe another one day so
19:53that will charge high for you so how we
19:55can maximize this Services level and
19:57inventory turn over that also we need to
20:00keep in mind so inventory uh turnover is
20:03the total sales how you are making daily
20:06total sales and the average cost of the
20:09inventory you are keeping that is the
20:10formula to calculate the uh your
20:13inventory turnover and average inventory
20:15you can calculate what is your beginning
20:17inventory what is your ending inventory
20:19divided by two you can sum up these two
20:21inventory and just you can calculate the
20:24average then risk management with
20:27International Logistics
20:29uh like what can be the risk
20:31geopolitical instability if there is
20:33political instability then also there
20:35will be risk complete shutdown is there
20:37elections are going on or some
20:39hesitation is going on or something
20:41means kind of events are going on so
20:44that inst stability is there currency
20:46fluctuation is also there so we need to
20:48understand this currency uh fluctuation
20:50how it will impact let's say I'm
20:53importing for uh uh let's say 100 rupees
20:58or maybe in Euro so let's say the price
21:01of euro is 1 euro is equal to 100 rupees
21:06so today I imported uh one Euro product
21:09so I have been charged 100 rupees
21:12tomorrow this our currency value
21:14depreciated now it has increased to 105
21:17but still I'm purchasing for1 so that
21:20means importing for same product same
21:24amount I'm paying 5 rupees
21:27extra same is the case with exporting
21:30let's say I'm now exporting 1
21:33euro and will give me 100 rupees but
21:36tomorrow if it is depreciated for same
21:41uh export now I will be getting 5 rupees
21:43extra right and if it is appreciating
21:47the effects will be reversed so this
21:49currency fluctuation we need to keep in
21:51mind when we are doing the Import and
21:54Export business so these rates can
21:56affect your profit margins
21:59uh up to longest extent right so then
22:03what are the international trade
22:05barriers natural disaster supply chain
22:08disruptions local supply chain
22:09disruptions also you need to take care
22:12when you are let's say if you are coming
22:13to Indian market then you need to
22:15understand the Indian uh you know uh
22:18geopolitical scenario and the disruption
22:20in the supply chain what uh kind of
22:24disruptions can happen in India or uh
22:27what can be the effect of that right so
22:29those many things you need to take
22:32care so next key component of
22:34international Logistics is inot terms so
22:37International commercial terms are there
22:40so we need to ensure the rights and
22:43responsibilities of buyers and sellers
22:45so there can be so many issues when you
22:48are making the delivery something goes
22:50wrong in terms of quantity in terms of
22:52quality if something goes wrong with the
22:54transportation some incident happened in
22:56the transportation then what will you
22:59will do who will be responsible so risk
23:02is either with the buyer or with the
23:04supplier so that also we need to you
23:07know negotiate with the international
23:09suppliers so what if even after
23:12recording every aspect and even then
23:15there is some you know dispute so where
23:18we will handle that dispute if the buyer
23:21is from Indian market suppliers is from
23:23Chinese market where we will set up uh
23:26settle that dispute right so you need to
23:28take care of the crosswater regulations
23:30as well when we are transporting already
23:32we talked about the regulations
23:34Transportation environment product
23:36safety features maybe uh you know uh you
23:39need to take care so uh yeah so then
23:44local culture and language consideration
23:46also so you might have seen I think the
23:48latest ad by OA or Rapido so the if
23:52foreign tourist is coming to Indian you
23:54know uh India so even they can book the
23:58taxi or Auto or whatever and they can
24:01speak in their language and our drivers
24:04can speak in their language and with AI
24:07enabled solution we can you know ensure
24:10that the talk is happening in the
24:11perfect way right how so this is a kind
24:14of thing very simple solution but this
24:17will you know uh make you comfortable
24:19even when you are uh away from your home
24:23so this will happen only when you have
24:25very strong Global Supply Chain Network
24:27okay including your suppliers
24:28manufacturer Distributors customers
24:31across multiple countries and then you
24:33need to ensure the collaboration and
24:35coordination among those uh players only
24:38then you can optimize your Logistics
24:41cost right and then you can optimize the
24:43inventory as well when you are having
24:46strong collaborations so if we talk
24:48about sustainability then uh obviously
24:53worldwide now awareness is being created
24:55about the sustainability measures and
24:57customers are also so creating but in
24:59some countries like we talked about the
25:01French survey right in France people are
25:02more aware about that now in India also
25:05we are talking about that we should not
25:06use uh the single uh Ed plastic and it
25:10should be banned and people are you know
25:13start they are starting using Juke bags
25:15or they are carrying their own bags so
25:17in Market also there are customers who
25:20are you know aware and conscious about
25:21all those things so if you are coming
25:23with those kind of uh measures
25:26sustainability measures obviously you
25:27will be taken as a positive thing right
25:30and people will uh you know uh react in
25:33that way but if you are still you know
25:35using the other way around so then your
25:38project uh product can be rejected in
25:40the market so you need to go
25:42eco-friendly packaging and energy
25:44efficient
25:46operations so uh this is the concept I
25:49was talking about the cross water
25:50transaction it can be easy as we are
25:53doing as customer to customer or you can
25:56make it as difficult as B2B right
25:58transactions that that depends upon uh
26:02what is the local scenario so if we talk
26:04about the value of crossb transaction is
26:07to forecast reach will reach it by maybe
26:09$250 trillion by 2027 and if we'll see
26:14it it is more than1 trillion rise in one
26:18decade right so this is as big
26:20opportunity and why what are the factors
26:23because international trade and
26:24e-commerce now there is no concept of
26:27Indian market whole world is One Market
26:29you can buy from anywhere you can sell
26:31anywhere right manufacturers are also
26:34expanding their supply chain across the
26:35borders as I talked about that if you
26:38are getting some cheap raw material
26:40cheap um Tech or maybe efficient
26:42technology or resources cheap resources
26:45you will shift your manufacturing Hub
26:47overseas right so then we are talking
26:49about global investment and asset
26:51management globally we are managing our
26:53assets right in a proper way and now
26:56people sitting in the village they are
26:58also accepting the salaries from
27:01International Players right so
27:04International Workforce International
27:06Market so this whole Market is One
27:09Market it is being treated like this so
27:12these are some of the factors which are
27:13pushing us for this right let's quickly
27:16go through what are the steps for
27:18crossborder transaction first is
27:20purchase and initiation this is how it
27:22is happening right so we'll start the
27:24purchase cycle okay and uh uh we'll
27:28start the transaction then rooting and
27:29processing so the payment information
27:32transaction is sent by an encrypted
27:34Gateway and your bank is connected with
27:36that Gateway right so transaction is
27:39processed quickly and efficiently if
27:41your bank is connected with that common
27:43Gateway right then payment verification
27:46is being done it is verified and
27:48approved or maybe sometimes declined by
27:50the receiving bank if you are not having
27:52sufficient funds in your account right
27:55because not only if you are transferred
27:58maybe transferring 500 the cost is
28:01somewhere around let's say 45,000 so you
28:04need not to maintain only 45,000 there
28:06are some transaction charges maybe you
28:08you'll end up with paying maybe 48,000
28:11or 49,000 somewhere around 50,000 so
28:14that transaction charges are also there
28:16then transaction confirmation happens
28:18and it is approved right in the next
28:20stage so or maybe declined then you'll
28:23get the message that it is declined then
28:25transaction fulfillment will happen
28:27between the two parties right so still
28:30that digital uh you know transfer has
28:33not happened but yes it is approved
28:37because digal transfer will only happen
28:39through you know Global automate uh
28:42automated Clearing House which will
28:44which may take maybe two to five
28:45business days to clear that but yes once
28:48it is approved your order fulfillment
28:51can start so this is how the financial
28:54transactions happen when whenever we are
28:57going for this and in the end tracking
28:59is one thing you can track the status of
29:02transaction reconciliation and
29:04settlement because it will take time now
29:06what are the challenges see we have
29:10talked about seven steps and seven
29:12different stakeholders are involved in
29:14that seven different players every stage
29:18like first player is here second player
29:20is here third player is here so that
29:23means every stage we are making small
29:25small HS which is time cons consuming
29:28right and not only time consuming they
29:31are charging as well even if we are
29:34verifying the account they are charging
29:35for that verification we are
29:37transferring the fund they are charging
29:39for that right so this is more expensive
29:43than domestic uh transaction so this is
29:46Again One Challenge and how we can
29:48mitigate that challenge uh again uh
29:51Amazon wallet will help you to do that
29:53right so challenges with crossborder
29:55transactions already talked about high
29:57fun fing cost right because that much
30:00fund you need to maintain in advance
30:03like I told you if your €500 you are
30:06calculating at 45k maybe you will not
30:09only reserve the 45k maybe you will
30:12Reserve 50k because of the transaction
30:15cost will be there right this is one
30:18example transaction fees are very high
30:21because of so many intermediat stages
30:24are there Bank fees they are also
30:26charging Merchant Bank fee they are also
30:28charging so this will increase the
30:30transaction cost ex currency exchange
30:33rate already I explained you if what
30:36will happen if your currency will
30:37appreciate or depreciate if your
30:39currency value is increasing or if your
30:42rupees value is increasing or decreasing
30:45so for same quantity whatever you are
30:47buying maybe earlier you were paying 100
30:49rupees now you are paying 105 rupees
30:51right so this depends upon just two
30:54slides before I explained how this will
30:56affect the uh International Trade right
31:00long transaction chains are there why
31:03because uh obviously so many uh players
31:07are there in the network multi-currency
31:09crossborder transactions if you are
31:11dealing with more than two currencies
31:13then so you can just multiply keep on
31:15multiplying the steps and then every
31:18time you are making transaction actually
31:20transaction will happen only with the
31:21first party and end party but in between
31:24so many transactions are happening every
31:26time you are processing that transaction
31:28you are paying extra for that right so
31:31and then obviously sale tax is there and
31:34uh as per that local structure you need
31:37to understand that and every time you
31:39are you know selling you kind of if 15
31:41players are involved 15 times you are
31:43selling the same product let's say
31:45initial cost was 10 Rupees at 15 stages
31:48you have added up that maybe 0.5 rupees
31:51or one rupee or in the end you are
31:53landing up with maybe 18 or 20 rupees in
31:55the end right this is the next
31:58implication The Limited banking hours
32:01maybe right now we have processed the uh
32:04transaction 24 hours you can digitally
32:06you can transfer but it will be settled
32:08reconciled only when the usual working
32:11hours are going on in that particular
32:13bank right so if you talk about uh the
32:16foreign market where uh the foreign
32:19maybe where the time lag is more than
32:21maybe somewhere 10 hours 12 hours even
32:24right so that much delay will be there
32:26when you'll be uh your our final
32:28transaction will be
32:30reconciled then fragmented and truncated
32:32data formats different formats we are uh
32:35recording the data even your addresses
32:38sometimes spelling mistakes or
32:39formatting anything goes wrong it will
32:41be declined right and so every time we
32:45are kind of encoding and decoding the
32:47data only so this is a again big problem
32:51how we can solve this only one stop
32:52solution uh Amazon Global uh market
32:56right Logistics and then Legacy
32:58technology platforms so you might have
33:00seen uh in Indian Banks if you visit any
33:03bank they have the uh you know counting
33:07machines even they are counting in that
33:09machine twice even then after that
33:11manually they are counting the how many
33:12notes are there in that particular youo
33:14Bund so this is how we are carrying the
33:17uh old technology and we are uh slow
33:20slow slowly we are adopting the new
33:22technology so that is another reason why
33:25it is taking so much time when we are
33:26talking about po order transactions
33:29right this is again one limitation and
33:31then complex compliance checks are there
33:35because it is international trade so you
33:37need to check against fraud sanctions
33:39and financial crime so that is there so
33:42see if my name is vikas if I'm
33:45transferring fund and let's say even if
33:49with that bank foreign bank if any
33:52person with the name becauseas has done
33:54anything wrong automatically it will be
33:56declined right so just if the ma names
33:59are matching without verifying anything
34:02else it will be declined so then again
34:03you will go for details and then it will
34:05take more time in that way right so this
34:07is one simple example you guys can just
34:09quickly go through these videos and then
34:11we'll uh continue our uh discussion on
34:14the topic so uh the right solution is
34:18right away there okay so Amazon wallet
34:21will control you right in every
34:23situation quickly we'll go through the
34:25major stakeholders in international
34:27Logistics already we talked about first
34:29is exporter who will be selling the
34:31product importer who will be importing
34:33the product fright forward who will be
34:35coordinating and monitors all the
34:37necessary operations for transport and
34:39international flight Logistics right so
34:42maybe sometimes some value adding
34:43activities are also done related to
34:45packaging or any kind of communication
34:47some custom agents will be there who
34:49will be taking care of all the documents
34:51uh formalities whatever inspections are
34:54required and clearance of goods any
34:56documentation you need to prepare
34:58related to that shipping company is the
35:01legal owner of the bessels you will be
35:03booking those bessels and then you will
35:05be transporting using those vessels to
35:07the foreign country shipping agent will
35:10be there actually it is a another legal
35:13representative of the shipping company
35:15at any given Port right so uh uh this
35:19agent organizes administrative task
35:22related to you know in that particular
35:24Port so this is how it uh handles your
35:27or merchandise and related documents and
35:30then consolidator is there this
35:32consolidator actually selling the vessel
35:35space right if the Bessel space is not
35:37fully occupied by one player it may sell
35:39to multiple players right so this is the
35:41work of the consolidator carrier is who
35:43is actually transporting the product
35:46then Insurance again very important if
35:47something goes wrong they are charging
35:49some premium for each you know
35:51transaction and uh uh then in that way
35:55you can ensure the safe delivery and
35:57obviously banks are responsible for this
35:59International thing because banks will
36:02ensure the transaction so that is uh
36:06these all are the uh players
36:09stakeholders involved in the
36:10international stakeholder uh
36:12International Logistics so we can
36:14conclude that uh because challenges are
36:16there uh because many stakeholders are
36:19there and many stages are there so we
36:21need to somewhere compromise between
36:23cost is one thing and then your time is
36:26another thing right so that lack whe
36:29whether we can afford or not so what is
36:32the you know replenishment time we need
36:34to replenish the inventory and you you
36:37you meet uh need to meet the customer
36:39Demand right and then we need to take
36:41care of the cost so what is that one
36:43platform which can maybe if I'm selling
36:46product from here kakur and it is going
36:48to somewhere in let's say in US market
36:51so how as one player Amazon can you know
36:55handle everything he is picking from
36:57here delivering there and I'm getting
36:59one single invoice because transactions
37:01can be minimized in that way so that's
37:03all from this we'll continue this uh uh
37:07session uh with what are the different
37:10options how we can go for international
37:12uh markets how we can expand into
37:14International Market in the very next
37:16session thank you very much

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