Every vehicle manufacturer knows the importance of aftermarket service. Dealers demand overnight – if not same day delivery; a vehicle off the road means not only an un-happy dealer, but a consumer who might well choose a different manufacturer the next time they replace their vehicle. To provide the necessary quality of after-market service, carmakers need to have a well-organised and managed warehouse with the right amount of inventory in the right place at all times – and it takes a tremendous amount of thought, analysis, planning and care to create and maintain the optimum facility.

Speaking on the current market scenario, Chauhan says, “The aftermarket ecosystem is complicated and involves several stake-holders, including OEMs, part suppliers, logistics providers, the dealer network, service points and general spare part distributors. Parts are sourced in bulk from parts suppliers, transported and then stored and managed in central warehouses, often termed ‘mother warehouses’ in India, or ‘source warehouse’ elsewhere. Following dealer orders and inventory management, the parts are then moved to regional hubs in repackaged, ready-to-sell retail merchandise packaging, and transported at the shortest possible time to the needy dealer. Technology plays a vital role by enhancing the visibility in the entire value chain by using advanced and automated warehouse management system like RFID, Bar Code systems.” He believes that “GST implementation will give major boost to the industry wherein the entire supply chain model will get revamped with relocation of mother warehouses, regional warehouses and satellite warehouses with in the country considering customers business model and requirements to cater an efficient service levels and cost of operating warehouse and reduced transportation lead time.”

He also gives his perspective on the recent market trends in spare parts’ logistics:

• The spare parts business is considered the main driver to enhance customer satisfaction and generate repurchase opportunities: As the proportion of additional sales and replacements has gradually increased, customers have begun paying more attention to the quality of after-sales services, which directly affect their purchase decisions. The importance of after-sales service and spare parts operations to overall automotive sales is becoming increasingly obvious
• Along with the rapid growth of the after-sales market, the spare parts business will soon become another major revenue source for OEMs: As auto market’s Car Parc undergoes exponential growth and the market’s average vehicle age rises, revenues contributed to OEMs by services and spare parts business are growing rapidly. Services and spare parts business will comprise a major new source of growth for OEMs.

--This article was carried in Cargo Connect, February Issue

The biggest expectation of logisticians is the recognition of logistics as an industry which will help in creation of transparent policies towards overall development of this sector. Subsequently, GST rollout is expected in the upcoming budget.

The provision for proper infrastructure which includes development of a better transportation system and setting up of warehouses is another important anticipation. Additional railway tracks to ensure no piling up of containers at inland ports and better infrastructure at metro cities along with development of major airports as cargo hubs will supplement India's growing EXIM (Export-Import) trade. Increased allocation for creating the inland waterways project and also pushing forward to revive the Sagar Mala plan for coastal areas is a must.

The development of logistics parks across the country for speedy delivery will add a lot of value. Facility of a single window clearance for permission prior to the exports of products to simplify processes, reduce documentation and ambiguities on the customs regulatory front will help facilitate exporters. The removal of 25-30 per cent of custom duty levied on fuel used by Indian ships is a must as is solving other logistical hurdles to push for more usage of the sea routes for both domestic and international cargo. The refined policy of setting up AFS should be present across the country. The existing CFS should be promoted to have AFS facility and later new independent facility of AFS should be considered.

Time-based hiring of ships for imports to be exempted from payment of service tax. The service tax on freight and all related services should be exempted. The creation of a separate cell to act as information nerve centre forecasting the demands and supply of container rakes at various ports and ICDs are the major requirements that the government must take into consideration.

--This article was carried in Cargo Talk, February Issue

Freight Systems believes that 2016 will be a year of positive developments with the coming up of:

• Several mega e-fulfillment centres where the merchandise is stocked and picked at item level. These facilities are typically 5,00,000 sq. ft. to one million sq. ft. in size, or even larger.
• Parcel hubs/sortation centres which sort orders by zip or post code so that they can be delivered to the relevant parcel delivery centre for final delivery to the customer’s home or designated collection point.
• Seamless integrated technology where shopping carts connect via API, web xml or some other connection to a transportation management system.
• Greater demand for robust reverse logistics processes and capabilities.
• More ‘Mega Cities’ apart from the present metros.
• Proliferation of segments of the same product and hence LSPs will have to manage greater complexity.
• Improved supply chain infrastructure.
• Improved road networks and modern warehousing, and faster and bigger trucks.
• Stronger regional and global connect.
• Business Intelligence tools for analytics on predictive demand planning, based on consumer preferences.

He says, “With the liberalisation of FDI in various sectors and focus on new technology investments, the multinational companies that come in will bring their global best practices. So, those logistics companies and service providers who are willing to embrace global supply chain practices with modern infrastructure and advanced technologies will see huge opportunities. However, timely implementation of GST is a pre-requisite to realise the true benefits of this opportunity.” He asserts, “Tax revenue collection is expected to increase, due to a simplified taxation and better tax compliance. Partial to complete roll out of GST would boost GDP growth by 0.7 to 1.3 per cent. Higher growth and improved tax compliance could lower fiscal deficit to 3.0 to 3.3 per cent over 2 years.”

He agrees, “The ‘Make in India’ campaign, even if it does take off in the manner envisaged, will certainly expand demand across sectors and will create new opportunities for the logistics sector.”

--This article was carried in Cargo Connect, January Issue

The year 2015 can be rated as a productive year with e-commerce continuing its influence over supply chain industry, the falling prices of oil kept the freight levels in control, logistics and supply chain companies had their focus on technological advancements which relates well with desired demand for supply chain solutions. Indian logistics market is expected to grow at a CAGR of 12.17 per cent by 2020 and it is driven by the growth in the manufacturing, retail, FMCG and e-commerce sectors. "But what is needed is effective functioning. Among the challenges and issues, "the warehouse market in India is expected to grow at a CAGR of 10 per cent whereas freight forwarding market is expected to grow at a CAGR of 12 per cent till 2020. This growth rate is based on the expectation that the new government will implement GST regime and the logistics companies can optimise their operations to reduce cost," adds Malik.

Most feel that the boom in the e-commerce sector and expansionary policies of the FMCG firms has helped the logistics sector. This has increased the service geography of the logistics firms as they also have to meet the demands of quick delivery and tight service level agreements. So, e-commerce was the bright ray in 2015.

--This article was carried in Cargo Talk, January Issue

Freight Systems, a leading freight forwarding, logistics and supply chain company, recently announced the relocation of its Mumbai branch into a custom-built corporate campus covering 17,000 square feet of space in the Summit Business Bay, Mumbai. The inauguration of the company's newest facility was celebrated with a ribbon-cutting event on February 1, 2016 and was attended by key officials of the company.

Strategically located in Andheri (East), Mumbai, the facility will be home to roughly 200 Freight Systems employees. The centre will serve as a hub for delivering logistics needs of the customers in the region, stressed a company statement.

"The decision to relocate to a bigger and better facility is part of our company’s on-going commitment as we continue to seek out ways to better serve our customers here and around the world. The new facility brings our team members together under one roof, increasing collaboration and enabling us to provide even better support for our internal and external customers," said Mr David Philips, Managing Director of Freight Systems.

"This new location permits us to comfortably accommodate the growing employee base as well as allows room for more growth," added Mr Kunal Singh, Freight Systems’ Chief Executive Officer.

The new office location will house the key business and operations teams of Freight Systems in Mumbai.

--This news appeared in Cargo Talk,Cargo Connect and Exim