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Logistics in Indian SME's.

BY: Raja Vikram | Category: Others | Submitted: 2010-03-12 09:49:17
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Article Summary: "This article is about the Indian logistics sector and the hurdles it is facing. Logistics is the process of flowing of goods, Information or the resources such as energy and people from the point of origin to the point of consumption.."

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"Logistics is the process of flowing of goods, Information or the resources such as energy and people from the point of origin to the point of consumption". So, to reach the customer or the channel partners Logistics plays a vital role. And , In a country like India logistics plays an Important role. There are lot of Small and Medium Enterprises in India , which works under different sectors. So, end of the day it is all about reaching the customer.

So, to start up with Indian Logistics Sector which has seen a change in it after the liberalization era. There was a sudden boom in the sector with the introduction of new technology and Improved business Models. but, there is a lack of fast distributing channels and warehousing facilities. The upcoming business models need more cost effective and efficient logistics . Moreover as there is an increase in the material handling of each sector , we can say that logistics has its opportunities in their basket. From the CII , Indian logistics is in the second rank in terms of growth potential. But, there is a great issue which need to be clarified or solve is that the "Fragmented structure and huge presence of SME's ". Most of the Indian logistics players are lagging in terms of implementing standard logistics practices. Although there is a presence of third party Logistics, there need more concentration on the standard practice.

Issue: The greatest problem with the Indian SME's is that "Diversity in the Country's regional, geographical and legislative aspects". Apart from this , Inappropriate industry practices and disparities in terms of regulatory compliance are some of the road blocks for Indian Logistics. Another major Issue can be the Slow Growth rate of allied infrastructure undertakings such as port, NH, railway freight corridors and toll roads. Such slow infrastructure development has been a major bottleneck in the growth of Indian logistics sector.

Solution: Indian SME's should adopt Innovative models to enhance their efficiency, Such things can be developed on the basis of factors such as Volume,regional and rural-urban split distribution layout, Market penetration Desired, time to market and Customer specific needs. Moreover, SME's need to adopt New IT technologies such as Warehouse management System(WMS) ,Freight management System, track and trace for 3PL applications which will help the to have a growth in the Industry. So the latest technology adoption with the streamlining process can help the Indian Logistics for the growth.

So as a overall we can say that SME's in Indian Logistics Industry need to adopt innovative business models to enhance their efficiency, The significance of IT in logistics operation clearly justifies such investments for both SME's and big players. So if all these get implemented then there will be a definite growth in the industry.

About Author / Additional Info:
An MBA from GITAM University,India.

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