Companies which compete in marketing and manufacturing must soon begin to cooperate in the field of supply chain management, not just to make profits but to survive in these difficult global and domestic economic conditions, said R. Dinesh, managing director of TVS Logistics.
Such cooperation in logistics could bring about the cost efficiencies necessary to weather the difficult economic scenario, he said while addressing the inaugural session of Logistic Summit and B2C Connect 2013 organised here on Saturday by the Indian Chamber of Commerce and Industry.
Transportation and other supply chain areas constituted a major expense for industries. In the cement industry supply chain accounted for 92 per cent of the distribution cost.
“Globally, most companies doing international trade consider logistics as a core area, which was not the case with Indian companies.”
Logistics accounted for 15 per cent of the gross domestic product of Thailand some years ago. Now, the trade and industry had come together and brought it down to around 11 per cent, which while being an improvement was still on the higher side, he said.
“The uncertainties in the global and domestic economies will force Indian companies to adopt global best practices in logistics and other areas,” said Mr. Dinesh.
Chamber president R.R. Balasundharam said that logistics was vital for trade and industry. The rapid changes in the global economy were resulting in changes in the input costs for businesses.
Srihari Balakrishnan, summit convenor, said that topics ranging from inland transportation and railway transportation to global supply efficiencies were discussed at the conference.
Addressing the session on coastal trade, S. Varadarajan, Chief Executive Officer of Shreyas Relay Systems, said that coastal shipping accounted for 7 per cent of the country’s transportation while the figure was 35 per cent for developed countries.
Ships could transport huge volumes of cargo, decongest the national highways, fewer chances of accidents, and was cost-effective too. While a lorry or a trailer could carry between 16 tonnes and 21 tonnes, he said that a ship could transport 24,000 tonnes.
For the sector to flourish, the cooperation of ports was vital, he said adding that the total expenditure on logistics in India was Rs. 4,642 billion, but coasting shipping accounted for around 69 billion.
The Hindu is the media partner for the event.