Logistics helping MNCs, not Indian units, says expert

Infrastructure bottlenecks not being addressed

India has a long way to go in terms of implementing logistics management.

Currently the country spends only nine per cent of its gross domestic product (GDP) on logistics.

This needs to be doubled to sustain the GDP growth envisaged for India, said Cyrus Guzder, chairman and managing director, AFL Private Limited at a seminar organised by the Indo-American Chamber of Commerce (IACC) on role the of information technology and infrastructure in logistics.

Guzder said that development of logistics and IT had helped increase linkages with global business.

However, the country was using IT to help foreign multinationals become more cost competitive, but not doing the same for Indian companies.

"The physical supply chain in India lags behind the digital supply chain and the stockouts across board run as high as 30 per cent", he said.

The turnaround time for ships at Indian ports was six days, as compared to two days elsewhere.

Road transport too lagged behind countries with developed infrastructure by 350 kilometres per day.

Even though airlines have increased service frequency over the years, infrastructure at airports had not kept pace with the increasing traffic.

The railways too were incurring losses due to a freight and parcel system which was not logistically viable, said Guzder.

He suggested the use of the radio frequency identification (RFID) system on transport vehicles and goods.

RFID systems would enable business owners to have real-time access to inventory information.

This, Guzder said, would enhance goods security, save time and money and provide better service to end-users.

He also suggested implementation of IT in enhancing operational performance, in bettering customer service and in developing c-commerce "" collaborative commerce with large number of participants in a business, connected electronically.

However, the ultimate solution to smothering the business and transportation process in India was the improvement of infrastructure, concluded Guzder.