The Hindu : Logistics: Leveraging for competitiveness

Online edition of India's National Newspaper
Sunday, Oct 12, 2003

Business

Business

Logistics: Leveraging for competitiveness

By Shanthi Kannan

CHENNAI OCT. 11. India is a globally acknowledged information technology powerhouse. The country's strength in the IT field must be exploited to develop specific capabilities in IT-enabled logistics. With the increasing trend towards fourth-party logistics, this capability will be highly valued. Many leading companies such as Wipro and Infosys can complement their I T expertise with logistics domain knowledge to promote fourth party logistic activities within their companies and across the world.

Prof. N. Viswanadham and Roshan Gaonkar of the Logistics Institute (Asia Pacific) made this point at the recently held Logistic Summit in Chennai. These suggestions were made in a theme paper titled `Leveraging Logistics to enhance Indian economic competitiveness'.

The paper also suggested that IT systems could play an important role in coordination and planning of large infrastructure and engineering projects. Often, most of the infrastructure projects run into time and cost overruns. These overruns could, however, be easily reined in through proper logistics management and coordination of various projects. Traditionally, the focus of logistics management had been on integrating and automating the material and information flows in the supply chain. Of late, however, financial flows are also being integrated in decision-making and automated for straight-through processing.

Today, Radio Frequency Identification Tags and Web Services are allowing better visibility into the status of orders, shipments and inventories. This, in turn, is facilitating real-time control, event management and planning of extended supply chain networks.

Speakers at the summit urged that India should implement automated trade systems such as TradeNet and Digital Trade Transportation Network for documentation and customs permit applications. Major players like Hewlett Packard, DHL Worldwide Express, Sony, TNT and the like felt that India could leverage the IT strengths to capture a greater of pie of the share. However, they had a common point to say that China and India were picking up significantly in logistics industry. Logistics sector in India adversely affects the value of goods and services due to lack of focus on quality. For example, perishable goods such as seafoods and flowers fetch a lower price in markets abroad because their freshness is not as well preserved as it should be. Inventory levels need to be maintained at higher levels. Turnaround time at ports is also required to be cut, felt Professor G. Raghuram and Professor Janat Shah of the Indian Institute of Management. This could be corrected through a shift in attitude of the stakeholders concerned, they added. The Government should review provisions of legislations such as the Motor Transport Workers Act and the Motor Vehicles Act, streamline inter-state and intra-state movements, focus on physical infrastructure development, review incentives that create the small sized operators, ensure better compliance with the law through mature frontline functionaries and develop skilled human resources.

It is stated that simultaneous development of supply chain cluster companies is possible with planning and aggressive marketing to attract multinational companies in manufacturing and third-party logistics. This is important since they bring with them global experiences and also provide economies of scale advantages.

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