Bajaj Electricals, Mahindra Logistics ink Rs 1,000 crore outsourcing deal

Involves end-to-end redesign of Bajaj Electricals' logistics by Mahindra, with the twin aim of achieving enhanced and industry-best service levels, and cost saving of over 25%

Bajaj Electricals Limited (BEL) and Mahindra Logistics Limited (MLL) today made an announcement of signing an agreement for innovative Logistics optimisation and outsourcing arrangement.

The deal involves an end-to-end redesign and outsourcing of Bajaj Electricals’ logistics by Mahindra Logistics, with the twin objectives of achieving enhanced and industry-best service levels, and a cost saving in excess of 25 per cent.

The total contract value of the deal will be in excess of Rs 1,000 crore over the next five years and is the outcome of a unique and collaborative solution.

Working together closely, MLL has developed for BEL a fully redesigned and consolidated logistics network, with storage optimisation, transportation management and inventory movement through technology, best practice and automation.

At the heart of the network, there will be two large ultra-modern mega-warehouses in Delhi and Mumbai, with latest technology, automation and skill-building, enhanced by environmentally conscious, greener & sustainable warehouse practices.

This network will further operate  fully IT-enabled fulfilment centres from which BEL’s dealers, distributors, customers will enjoy market-leading delivery lead times.

As part of the solution, MLL will be deploying a healthy mix of dedicated long-haul fleets and local distribution trucks, enabled by the latest tracking technology and control tower operations. There will also be a transition towards sustainable logistics using electric delivery trucks from EDel by Mahindra Logistics.

For BEL, this project marks a significant transition towards leveraging logistics management as a competitive advantage.

“Adapting our learning from disparate industry verticals allowed us to create an innovative solution for the consumer durables and electronics business leveraging our reach, know-how and tech investments in equal parts,” Rampraveen Swaminathan, chief executive officer and managing director at MLL was quoted as saying.

This association is a major end-to-end outsourcing of an entire logistics by a leading Indian business group.

Bajaj Electricals and Mahindra Logistics will continue to seek areas of logistics collaboration across businesses as a means of achieving competitive advantage and cost optimisation, said the release.