Research Title: To identify problems in inbound and outbound logistics in consumer durables industry & spot opportunities from

the same. The annual logistics cost in India is estimated to be 14% of the GDP, which translates into USD 140 billion assuming the GDP of India to be slightly over USD 1 trillion. Out of this USD 140 billion logistics cost, almost 99% is accounted for by the unorganized sector (such as owners of less than 5 trucks, affiliated to a broker or a transport company, small warehouse operators, customs brokers, freight forwarders, etc.), and slightly more than 1%, i.e. approximately USD 1.5 billion, is contributed by the organized sector. So, one can see that the logistics industry in India is in a nascent stage. However, the industry is growing at a fast pace and if India can bring down its logistics cost from 14% to 9% of the GDP (level in the US), savings to the tune of USD 50 billion will be realized at the current GDP level, making Indian goods more competitive in the global market. Moreover, growth in the logistics sector would imply improved service delivery and customer. Problems in logistics: Economies of scale are absent in the Indian logistics industry. Even the organized sector that contributes slightly more than 1% of the logistics cost, is highly fragmented. Existence of the differential sales tax structure also brought in diseconomies of scale. Though VAT (Value Added Tax) has been implemented since April 1, 2005, failure in implementation of a uniform VAT structure across different states has let the problem persist even today. Apart from the non-uniform tax structure, Indian LSPs have to pay numerous other taxes, octrois, and face multiple check posts and police harassment. High costs of operation and delays involved in compliance with varying documentation requirements of different states make the business unattractive. Low penetration of IT and lack of proper communications infrastructure also result in delays, and lack of visibility and real-time tracking ability. Unavailability and absence of a seamless flow of information among the constituents of LSPs creates a lot of uncertainty, unnecessary paperwork and delays, and lack of transparency in terms of cost structures and service delivery. There is lack of skilled and knowledgeable manpower in the logistics sector. Management graduates do not consider logistics as a prime job. To improve the status of the industry, service providers have to move beyond the level of brokers and truckers to attract and retain talent. 1. Driving the cost out of the supply chain: Inbound Logistics by Infosys Managing the outbound logistics has always been the strength of the supply chain organization while inbound logistics is one of the most neglected area. The marketing department has identified different logistics for finished goods segment. Customizing outbound logistics requirements based on the needs of the needs of the customer segments is today a routine requirement. Similar to marketing department, purchase department has its own set requirements for

inbound raw materials/WIP. In addition, modern JIT manufacturing methods push the procurement manager to aim to achieve lowest inventory levels at the cost of higher inbound transportation. So there is an inherent conflict in balancing the Just-in-time mfg. process with inbound logistics and transportation needs. 2. Developing supply chain excellence - Optimizing inbound & outbound logistics by Deloitte The paper deals with the basic concept of what is logistics & how is the subset of the exhaustive supply chain function. This conference paper focuses primarily on the Logistics side of the Supply Chain function. The thrust is to identify the issues and challenges existing in the Logistics domain in India, more particularly the issues and challenges encountered by the users of logistics services in India and identify probable solutions to these issues and challenges.
3.

FMCG industry: Third-party logistics study: Capgemini consulting This report presents an excerpt of the 2010 15th Annual Third-Party Logistics Study addressing supply chain and logistics issues affecting the fast-moving consumer goods market. The Annual Third-Party Logistics Study documents the growth and evolution of the third-party logistics (3PL) industry and each year, takes an in-depth look at special topics and vertical markets. The study team sought a deeper understanding of the challenges facing the high-volume, lowmargin fast-moving consumer goods industry, as well as the strategies that fastmoving consumer goods shippers and 3PLs are using to manage issues such as reducing costs, perfect order fulfillment and rapidly sensing and responding to changes in consumer demand.

4. Logistics Industry: Global and Indian Perspectives-Subrata Mitra The paper talks about the overall logistics industry what are the bottle-necks in the global as well as Indian logistics industry. In India, the industry is still in its infancy, there is immense potential for growth. The Indian logistics industry is currently plagued with low demand, poor infrastructure, high costs, government regulations etc. However, it is going to turn around on the back of robust GDP growth, globalization, FDI in logistics and increasing government support. This paper highlights the current state of the industry, including the dynamics and opportunities for growth, globally, in general, and in India, in particular, based on findings from surveys of logistics service providers, and users, of India and other countries. 5. Logistics and Supply Chain Management Martin Christopher The books provides the base on understanding some of the most fundamental concepts of the logistics and supply chain. The book deals particularly with best practices in supply chain management in the current era of globalization. Responsiveness, reliability and relationships are the basis for successful logistics and supply chain management. Strategies like Just-In-Time (JIT), Lean and Agile thinking are reviewed, and last not least, there is a chapter on supply chain risk.

Future Aspects Many large Indian corporates such as Tata and Reliance Industries have been attracted by the potential of this sector and have established logistics divisions. They started providing in-house logistics services, and soon sensing the growth of the market, have started providing services to other corporates as well. Large express cargo and courier companies such as Transport Corporation of India (TCI) and Blue Dart have also started logistics operations. These companies enjoy the advantage of already having a large asset base and an all-India distribution network. Some large distributors have also forayed into the logistics business for their clients. Since logistics service can be provided without assets, there is growing interest among entrepreneurs to venture into this business. Indian shippers are gradually becoming more aware of the benefits of logistics outsourcing. They are now realizing that customer service and delivery performance are equally important as cost to remain competitive in this global economy. The Indian economy is growing at over 9% for the last couple of years (compared to the world GDP growth rate of 3%), which implies more outputs and more demand for specialized logistics services. The Indian government has focused on infrastructure development. Examples include the golden quadrilateral project, east-west and north-south corridors (connecting four major metros), Free Trade and Warehousing Zones (FTWZ) in line with Special Economic Zones (SEZ) with 100% Foreign Direct Investment (FDI) limit and public-private partnerships (PPP) in infrastructure development. It is expected that infrastructure development would boost investments in the logistics sector.

Action plan: Getting a deeper understanding about the inbound and outbound logistics through industrial training in Videocon Industries and spotting opportunities from the same.

References: 1. 2. 3. 4. 5. 6. 7. 8. www.ibef.org http://www.researchandmarkets.com/reports/ Driving the cost out of the supply chain: Inbound Logistics by Infosys Developing supply chain excellence - Optimizing inbound & outbound logistics by Deloitte A brief report on Consumer Durables industry of India by Corporate Catalyst India. Logistics and Supply Chain Management Martin Christopher FMCG industry: Third-party logistics study: Capgemini consulting Logistics Industry: Global and Indian Perspectives-Subrata Mitra