Overview
of warehousing India
The Indian logistics market has evolved from
traditional transport companies to a full-fledged logistics service provider
which offers various supply chain services such as transportation warehousing
and other value additions. Traditionally there existed only pure transport or
warehousing service providers of the in house nature. The trend changed towards
providing customized services and started being outsourced to specialized
players in the industry. Thus emerged the concept of third party logistics 3PL
where companies provide outsourced or third party logistics services to
companies for part or sometimes all of their supply chain management functions.
Third party logistics providers typically specialize in integrated operation
warehousing and transportation services that can be scaled and customized based
on market conditions and the demands and delivery service requirements for
their products and materials.
Has also led development of
improved international trade
activities. Increasing market sophistication changing customer choices and
global competition are pressurizing manufacturers to provide better goods and
services to customers at lower costs. In a way this has put the pressure on
managing costs more efficiently. Various industries have taken up initiatives
to cut down on direct material costs administrative costs and have tried streamlining
internal production processes. Yet in has been observed that the maximum cost
savings can be achieved by managing the supply chain efficiently.
The supply chain is a vital
component efficient planning of which can bring down costs to a great extent.
Manufacturers are working towards leaner supply chins with lesser lead times in
order to gain competitiveness in the market. Transportation warehousing and
distribution are the critical components of the entire supply chain. With
manufacturing activity increasing in the last few years logistics has gained
equal importance in order to provide better goods at lesser cost.
The logistics market in India was valued at Rs 5.6
trillion in 2010 and is forecast to grow at CAGR of over eight per cent over
the next five years. World bank has ranked India 47th among 150
countries in terms of logistics performance in 2010 its potential in the
future. It is forecast to grow annually at a rate of 15 to 20% to reach Rs 17
trillion by 2015. However logistics costs in India constitute around 13 to 14%
of its GDP against seven to eight per cent being spent by developed countries
such as the US Japan and other European countries. This is due to market
constraints such as highly fragmented structures poor infrastructure and
complicated tax structure.
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