Global financial crisis not to hit India's logistics sector: TVS SCS

Firm's CEO K Sukumar indicates that the rise in domestic consumption and growth in end-user industries has insulated the sector from the meltdown

India’s logistics sector may be unaffected by the current global financial meltdown, driven by a rise in domestic consumption and growth in end-user industries, while it will also open up opportunities for the country to become a global manufacturing hub,  K Sukumar, India chief executive officer of IPO-bound TVS Supply Chain Solutions (TVS SCS) has said.

TVS SCS, part of the Rs 15,000 crore TVS Mobility Group and one of the largest companies in the TVS fold, is looking to raise about Rs 2,000 crore through its initial public offering (IPO). This will be the first TVS family member-promoted company to go for an IPO after TVS Electronics 1994.

Sukumar said the emerging global trends present an ‘unprecedented opportunity’ for India to create world-class infrastructure for companies planning to set up operations here and emerge as a ‘global manufacturing hub’. “Policies like Make in India, PLI (production-linked incentive), Gati Shakti and the development of industrial corridors will enable this goal,” he said.

“Domestic consumption is also set to rise on the back of the demographic dividend. Growth in these end-user industries, coupled with the fast-emerging demand for data-backed, real-time visibility, and demand for integrated logistics will continue to drive the Indian logistics market,” Sukumar added.

Globally, about 24 per cent of the company’s business comes from automobiles, 26 per cent from industrial, 17.5 per cent from technology and 12.5 per cent from consumer durables. It batted for supply-side reforms to tide over the supply constraints faced by the industry.  “Supply-side constraints have always been around, any macroeconomic crisis only serves to exacerbate them and bring them into the spotlight. A consistent push in supply-side reform is the only way to mitigate this problem,” he said.  

“One of the main requirements in this shift are intelligent, tech-driven solutions provided by integrated logistics players, which can take cues from past crises to build better, more optimized, and more resilient solutions for the global industry. So long as the industry strives towards this goal, there is always hope to emerge stronger from any supply constraints,” Sukumar added.

As part of its tech-driven strategy, TVS SCS operates a control tower in Chennai that monitors the transportation operations and  provides real-time data on lags, which helps the company in avoiding supply chain issues. According to the company, this centre uses data science and analytics to help analyse performance, identify areas of improvement and to stay on the track of continuous improvement. At a given point of time, more than 1500 trucks are tracked by the Centre on a real-time basis and also predicts any possible disruptions in the chain. Sukumar added that it looks into transportation, network and warehousing, giving a predictive analysis.