auto logistics v2

8/3/2019 Auto Logistics v2

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Automotive Logistics

Nitin Kulshrestha

Head, Operations

GATX India


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Inbound Auto Logistics

Optimise supplies for Manufacturing plants

Provide effective logistics engineering - analyse and optimise supply flows

between supplier sites and assembly plants: by implementing multimodal

transport solutions, customs procedures, flow simplification and grouping

Forward stock management, monitoring stock rotation, defining

alternative transport plans, setting up solutions for urgent transport 24/7

Recovering packaging (lost/reusable) and managing flows between the

manufacturers sites and those of their suppliers


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Outbound Multimodal transport from the factory: logistics engineering,transport plans, scheduling, supervision, tracking, reporting

Vehicle customisation (Post-Production Operations): Carry outadded-value operations for car manufacturers

Vehicle preparationbefore distribution to the sales network(Pre-Delivery Inspection): dynamic testing, removing protective covers,washing, cleaning, interior preparation, mechanical and electrical

tests, final quality control.

Secondary distribution: Distribution of vehicles from Storage areasto marketing areas and dealers


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The stake holders

SuppliersManufacturing

Plant

Storage

Locations/Hubs

Dealers Customers


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Indian Automotive Industry

World's second-fastest growing auto market

India's passenger car and commercial vehicle

manufacturing industry is the 7th largest in theworld

Asias 4th largest exporter of passenger cars,

behind Japan, South Korea & Thailand

India is home to 40 million passenger vehicles

Car penetration 13~15 per 1000 people


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Indian AutomotiveMarket

- an opportunity


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Other contributing drivers


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Segmentation of Automotive Market

Segment Percentage

Total Passenger Vehicles (%) 15.79

Total Medium & Heavy Commercial Vehicles (%) 2.53

Total Light Commercial Vehicles (%) 2.10Total Commercial Vehicles (%) 4.63

Passenger Carriers (%) 2.51

Goods Carriers (%) 1.51

Total Three Wheelers(%) 4.01

Scooters (%) 11.57

Motorcycles (%) 59.35

Mopeds (%) 4.66

Total Two Wheelers (%) 75.57

Grand Total(%) 100.00


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Finished Passenger Vehicle (Cars) growth story


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Challenge for Supply Chain

- Keep up with growth


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Issues faced in Indian Automotive

Logistics

Poor infrastructure Road, Rail, Ports

Excess reliability on Road poor Rail and

Coastal services Lack of properly designed Rolling Stock both

on Road and Rail

Lack of professional LSPs

Lack of trained manpower

Poor IT penetration

Regulatory issues


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Poor infrastructure Road,Rail, Ports


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Infrastructure - Roads


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Infrastructure - Rail


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Infrastructure -Ports

Poor connectivity with Rail and Road

Few Ro- Ro berths available

No impetus on Coastal shipping

Inadequate space for storage of cars


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Infrastructure Auto hubs

For bulk movement storage hubs would be

required

Aggregation and distribution to be carried

out from these centers

Could be used for value addition taking

the value chain closer to the end customer

Reducing the service to Market time


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Excess reliability onRoad poor Rail and

Coastal services


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Problems faced in Road transportation

About 97% of Automotive Logistics happening through Roads in India

In developed markets the Rail co-efficient varies from 35% to 60%

Roads overburdened with traffic leading to longer transit and lead

time.

Movement through cities is a major problem

Road safety vulnerable with frequent accidents

Low fleet productivity due to multiple factors ( Just 300 Kms. /day)

Barriers- Toll Plazas and Octroi collection booths

High damage rates compared to other modes.


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Lack of properly designedRolling Stock

both onRoad andRail


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Rolling Stock - Rail wagons

Poor Availability of Railway Rakes (Wagons)-Very Few, Ageing

& Dwindling Stock

Outdated Rolling Stock.

Specialized Auto Wagons is very limited in relation to demand.

Currently Fully Owned & Operated by Indian Railways.

Wagon design limitations( especially in the critical Height

parameter) in Electrified and Diesel operated routes


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Rolling Stock - Road carriers Dimensions of vehicle

Overall length, width

and height flouted

regularly. No of Axles,

Load per axle and

turning radius alsoflouted

No professional and

accredited body builder

available in the market

Proper tracking

mechanisms not

installed on these Road

carriers

CMVR Central Motor Vehicle Rules


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Lack of professional LSPs

Lack of trained manpower

Poor IT penetration


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Create a door-to-door solution, not a partial solution

Bring in know-how and technical capabilities

Invest in necessary assets and infrastructure to fill

the supply chain gap

Bring in global best practices to complement local

capabilities

What should an ideal Logistic Service Provider

(LSP) do?


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OEMs to provide commitment to allow LSPs

investment to be justifiableTime

ResourcesVolume

Work collaboratively with LSP to overcome all the

hurdles

OEMs to look at total supply chain, not just

transactional cost

LSPs alone cant do much need support from

OEMs


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OEM and LSP relationship

Transactional Partnership

Planning OEM plans all ,

2 PL does as instructed

OEM provides direction

LSP prepares a plan, shares

with OEM and executes

Operations Micromanaged by the OEM LSP is measured on pre

defined parameters

Coordination Instruction mode top down Partnership and

collaboration

Terms/Timeframe Short term relationship

No commitment

Long term


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Regulatory Issues

Rolling out of GST regime - Seamless state borders

Faster and smoother Custom clearance at ports

Auto Freight train operators policy to be made operatorfriendly


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Regulatory Issues

The introduction of goods and services tax (GST)will create

an effect for abolition of taxes such as octroi, Central sales

tax, State level sales tax, entry tax, stamp duty, telecom

licence fees, turnover tax, tax on consumption or sale of

electricity, taxes on transportation of goods and services, and

get rid of the cascading effects of multiple layers of taxation.


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Poor infrastructure Road, Rail, PortsImprove Road infrastructure, Private participation

Open up the Rail Sector .. Create Auto Hubs near

to railway yards,

Ports need to be well served by Road and Rail

Excess reliability on Road poor Rail and

Coastal services

Reduce reliance on RoadMake Auto Freight Operator policy more lucrative.

Rationalize tariff structure on Indian Railways

Way forward


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Lack of properly designed Rolling Stock bothon Road and Rail

Clearly define and strictly implement all CMVR

guidelines regarding the Road Car Carriers

Create strict quality guidelines for building car

carriers

Allow Wagon leasing and promote induction of

new designs of Wagons

Way forward


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Lack of professional LSPs Lack of trained manpower

Poor IT penetrationOEMs to have long term commitment for LSPs

More professional courses for Logistics

Professionally Managed companies offering opportunities

to trained managers and workers

GST roll out

Regulatory issuesGST roll out to help LSPs

Declaration of Operator friendly policies

Privatization of Ports

Impetus on Ro-Ro and Coastal shipping

Way forward


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Thanks

auto logistics v2

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