The Defining Decade for Indian SCM in India………..

In the coming years, the need for the supply chain management efficiencies would be driven by consumers demand. And it would be a sector agnostic phenomenon. Look at the case of telecom.
 
Nov. 20, 2010 - PRLog -- In the coming years, the need for the supply chain management efficiencies would be driven by consumers demand. And it would be a sector agnostic phenomenon. Look at the case of telecom. The next wave of growth is going to come from 250 million consumers from smaller centers. Similarly, healthcare penetration would be made in tier-II and tier-III cities.

The change in SCM sphere would by and large fall in place by 2020 and in next five years, we will have a clear idea how these changes are unfolding. You take the case of automotive components for instance. Many MNCs companies which were not present in India have suddenly arrived here in last six months. Similarly, Indian companies are going global. So the dynamics of the entire globalization process which have unfolded in the country in last ten years could pick up exponential pace in next five years. And this would have a clear bearing on adoption of supply chain processes as the growth skips to a new trajectory and competition intensifies.

The stress on supply chain would also be necessitated by a critical structural change in the domestic market. From the stand point of Indian logistics and supply chain businesses, the markets are going to move away from a handful of cities. We are already witnessing mushrooming of satellite towns and new industrial clusters. If you look at any of the six mega cities in the country, a bunch of satellite towns have evolved or are evolving around them. That is going to change the way the entire industrial activities are structured here. Volume and margin paradigm would change in many businesses.

My feeling is that we may not see a dramatic revolution in adoption of advanced supply chain models in the near run but the process will start. And we may see the difference after ten years.

After all, at the end of the day everything boils down to our infrastructural abilities. Supply chain management is actually the final ultimate challenge after people have addressed all their competency issues. The growth of supply chain here would naturally depend on how fast we address the infrastructural problems. There is this mega project of freight corridor. These projects have to be implemented with much faster pace because projects like these would be driving the magnitude of change that has to happen.

In next five years, the logistics industry is likely to grow at a rate of 10-12 percent annually. Infrastructure is the micro-economic worry. But at the macro level, there are a lot of fundamental mind-shift issues.

Today, one pertinent question is: end user industry is changing but is the logistics industry ready? At this stage, we are probably ready in our minds. Today end-user industry’s biggest worry is cost which has to be brought down. Delivery is another critical point.

The biggest challenge which end user industry faces is damaged goods. So cost, delivery and services quality are the issues which need to be addressed. Even end-user industry needs to make suitable changes and treat supply chain as part of their overall integrated operations. The companies clearly need hard-core supply chain professionals. This is not an operation which can be executed by anybody. Additionally, supply chain instead of being seen as cost reduction mechanism needs to be rather viewed as a revenue generating option.

In terms of adoption of advanced SCM applications, today I don’t think we can compare ourselves with some of the developed countries even in Asia. But the good point is: our capability across all these sectors is emerging at the value-added manufacturing level. We are not competing with China in costs when it comes to basic manufacturing. Our contribution is at a much higher level of value addition and in this sphere there is no choice but effective SCM to evolve.

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