Rahul Himatsingka, CEO, Essar Steel Logistics, explains to Sumantra Das how a robust logistics management system can help companies handle the complex supply chain system efficiently.
How far is logistics management system necessary in a complex supply chain?
Companies which have a complex supply chain network or the ones requiring moving large volumes of cargo cannot perform hassle-free and mistake-proof transactions if they do not have a robust logistics management system (LMS). Results of any implementation are immediate, and hence I believe that Indian companies shall increasingly adopt LMS. Manufacturing companies typically implement ERP/production planning solutions first, and then graduate towards implementing LMS.
What kind of specialisation require for LMS? What is the cost rationale?
Transactions are a distraction, if not managed well. LMS implementation provides the much needed visibility over cargo and transportation equipment, and can help companies take decisions that can save both freight as well as inventory carrying costs. Also, systems can bring a sea change in quality of service viz, handling priorities, seamless exchange of information etc. Essentials of any system depend upon what is critical for the business, and can vary from industry to industry.
What are the major areas of a better LMS?
There is a trade-off between performance and profitability. While maintaining a keen eye over logistics costs is essential, careful selection of vendors and performance tuning, and ensuring that there is a substantial surplus arrangement available to handle any sudden skewness in order releases is important. A well-designed logistics management system can help in keeping a close tab on the metrics of performance, cut down processes, and optimise asset utilisation.
Which are the main differences do you find with foreign players in terms of managing logistics? Can technology play a major role?
For some businesses, LMS is a business enabler and not just a differentiator. One cannot even imagine doing without systems. Indian companies are fast catching up in terms of developing superior technologies and innovative systems for managing their logistics requirements.
Being a leading logistics player, what are the issues you are currently facing in India?
Regulatory issues that are restrictive in nature affect creation and optimum utilisation of logistics infrastructure in the country today. GDP growth projections shall bring serious sustainability challenges, and whatever is being done in this front may be too little and too late. Due to inadequate multimodal and transhipment facilities, cargo movement is largely done by road, and hence one has to incur a higher logistics cost.
What new trends in logistics management can we see in India?
Multimodal logistics shall increasingly gain prominence, and hence there shall be a greater need to have systems that can help with warehouse management and dealing with multiple transportation legs. Also, there shall be an increasing market for cargo tracking solutions, and shippers who need a tighter control over their inventory shall be ready to pay premium freight for the same.