LOGISTICS

Presented by :- Maandeep Sethi Pawandeep Dhingra Jasmeet Chadha Siddharth Seghal

LOGISTICS INDUSTRY-AN OVERVIEW

Globally, the logistics industry is valued at US$ 3.5 trillion.

The U.S., which contributes to over 25% of the global industry value, spends close to 9% of its GDP on logistic services.

The Indian Logistics Industry is presently estimated at US$ 90 billion.

The industry has generated employment for 45 million people in the country in comparison with the IT and ITeS sector which employs approximately 4.3million people.

It is forecast to grow at a Compound Annual Growth Rate (CAGR) of

approximately 8% over the next three to five years.

DIFFERENT MEDIUMS OF LOGISTICS SERVICE IN INDIA

There are four mediums of logistics service in India.

1. Air freight- This is the most modern & the safest mode to ensure a fast delivery of goods.

2. Land Transport- It has been the popularly used method & used especially in the shipments of heavy articles like machinery& vehicles.

CONTD

3. Railways – This is the oldest method of shipments and transport. This is the most effectively used in the domestic services but it is the widely used mode of logistic in India.

4. Waterways- an essential part of this industry is one of the oldest methods. Shipments and transportation of goods is done on an international basis through this way. This mode is usually very effective in shipments of oil, highly sensitive and volatile articles like uranium .

OVERVIEW OF INDIAN LOGISTIC MARKET

The size of Indian logistic market is estimated to US$ 3.5 trillion in 2005 .

India’s domestic market of textiles, auto ancillary & engineering goods have contributed a lot .

India’s containerization has over 70 % of totel export cargo and 40% import cargo.

Indian Government is making great efforts in improving the trade by privatizing ports , investing in highway projects etc.

The waiting time at major ports in India is reduced from 3.7 days in 2002-03 to 2.5 days in 2009-10.

THIRD PARTY LOGISTICS

Third-party Logistics is simply the use of an outside company to perform all or part of the firm’s materials management and product distribution function

THIRD PARTY LOGISTIC PROVIDERS IN INDIA

The 3PL industry was pioneered by global logistic majors- Indian subsidiaries of multinational companies in the automobile , electronics and FMCG sector were the main users of specialist service providers in the past.

Expansion of manufacturing facilities by multinational automobile makers like Suzuki, Honda, Toyota and Ford indicates huge potential for 3PL providers.

The no 3PL providers grow to 400 in 2005 The Indian 3PL service providers can be divided into

three tiers like national 3PL companies, Regional 3PL companies and Remote 3PL companies.

CHALLENGES FACED BY 3PL IN INDIA Huge diversity in geographic locations.

Consumer habits

Infrastructure conditions across country

Logistic operation in each state require a state specific model that facilitates effective storage and transportation of goods mostly sold in that state , making it difficult to adopt a uniform logistics model .

CONTD

• Geographical challenges • Unequal distribution of the population which is creating

major problem for the service providers.

• Due to globalization, transport volume has increased in recent years but logistics infrastructure has been unable to keep up with this pace.

• Rail infrastructure needs to be expanded and the connections to the harbors and airports should be improved.

CHARACTERISTICS OF 3PL

Perform outsourced logistics activities

Process management / Multiple activities

More customized services

Mutually beneficial and risk-sharing relationship

Long-term commitments (1~ 3 years)

WHY IS IT NEEDED?

ADVANTAGES

Cost reduction Focus on core competency Improved efficiency, service and flexibility Industry-specific application

– “build-to-order” systems and e-merchants

DISADVANTAGES

• Loss of control

• Impact on in-house workforce

KEY DRIVERS OF GROWTH

Economic growth has been driving logistics demand.

Increased outsourcing- Due to which manufacturing companies are witnessing increasing requirements for logistic services.

VAT Implementation – With VAT implementation and gradual phase out of CST,manufacturers do not require warehouses and depots across all states to avoid double taxation.

Investments in the infrastructure sector thus leading to increased efficiency and productivity of the transport system.

GLOBAL PLAYER EXAMPLE FEDEX

OVERVIEW

FedEx Critical Inventory Logistics is a comprehensive, end-to-end solution designed to optimize the management of critical inventory and service parts distribution and returns process.

It incorporates a hub-based central stocking location (CSL) and a European wide network of forwarding stocking locations (FSLs) integrated through extensive information capabilities

FEATURES

Inventory Management with automated replenishment, plus Tracking and Tracing by order number, part number, serial number, lot number, or by item level detail

Complete end-to-end inventory and transportation visibility including real-time proof-of-delivery, next flight out and local courier

Proactive event notification, monitoring, and recovery from the FedEx Command and Control Centre

Central Stocking Locations are accessible 24 hours a day, 7 days a week

Synchronized delivery reliability from 2-day to 4-hour delivery, 2-hour service in some areas

In house customs specialists Dedicated Customer Service Team

BENIFITS

Enhance customer service (shipments and returns are managed to meet individual distribution requirements)

Improve inventory management (consistent on-time delivery reduces need for safety stock)

Optimize transportation costs (choosing the optimal overall transportation solution can reduce costs)

Reallocate resources (refocuses time and money on core competencies)

Control cost by ordering what you need when you need it, and have it delivered in time to meet your required level of service

Mitigate your investments and inventory and infrastructure

OTHER BENIFITS

Consolidating inventory at the FedEx GDC enables cost savings,

Also there is gain end-to-end visibility and be able to respond more rapidly to customer orders. It increases inventory velocity, turning assets into profits.

With the FedEx GDC and FedEx Critical Inventory Logistics, you’ll have a truly robust capability for planning and aligning inventories, resources and processes with absolutely minimal risk and loss — which will put you well on your way to post-sale success.

WHY IS IT NEEDED?

ADVANTAGES

Cost reduction Focus on core competency Improved efficiency, service and flexibility Industry-specific application

– “build-to-order” systems and e-merchants

DISADVANTAGES

• Loss of control

• Impact on in-house workforce

INDIAN COMPANYOM LOGISTIC LTD

Flagship company of Om Group has been instrumental in providing innovative and value added solutions for Indian Corporate and Multinationals.

It’s the only leading multi-modal logistics company with single window integrated logistics services for all the elements of the supply chain management in India.

With innovative and cost saving methods It has taken seat for generating maximum air cargo in India

It has been dealing with corporate, multinational automobile industry and has been pioneer in transportation, warehousing and logistics support to the sector.

INFRASTRUCTURE

They cater wide distributed in Indian market through its 450 plus satellite locations withOnline connectivity.

It has over 1000 delivery locations spread across the country and 4000 dedicated vehicles.

There are million sq/ft. of warehousing area across the country and a state of the art infrastructure to service their customers