The Hindu Business Line : `Supply chain management still at a nascent stage'

THE Managing Director of Tata Steel, Mr B. Muthuraman, today lamented the lack of awareness among Indian industries about the complexity of the issues related to logistics and supply chain management.

One reason for this, Mr Muthuraman felt, might be the non-availability of enough expertise within the country. Also, the change of mindset was crucial. "The supply chain management is still at a nascent stage and many of us are still caged in traditional thinking," he observed.

In his welcome address at the Logistics East, Creating Competitive Advantage, a seminar organised here on Tuesday by the Confederation of Indian Industry, Eastern Region, Mr Muthuraman, who is also the Chairman of CII (Eastern Region), emphasised the need for rethinking on and re-engineering of the entire gamut of issues relating to logistics and supply chain management so that the quality of services was high and the cost to the consumers was low.

A well articulated logistics strategy had now become a must for the country, more so because not only the cost of logistics here was much higher than that in advanced countries, the cost of transportation alone constituted 40 per cent of the total logistics cost.

He, however, made it clear that logistics was not transportation alone. Over the years, the supply chain management had become more complex, also covering customer, retailer, distributor, manufacturer and supplier, all of whom were closely linked through efficient flows of material, information and finance.

"It is no longer simply the management of rail, road or port operations in isolation; an integrated approach is needed to tackle the supply chain management issues," Mr Muthuraman observed.

Mr M.A. Bhaskarachar, Deputy Chairman of Kolkata Port Trust in charge of Kolkata Dock System (KDS), said several measures had been adopted in past couple of years to reduce the cost of operation in KDS. Facility-wise also, KDS was now a better dock system.

More than 32 roads in the dock area had been handed over to the State Government which would be utilising the Central road fund for their improvement. For the first time in many years, the port railway was functioning efficiently so much so that it started yielding profits.

About 5,000 sq metres of container parking area close to berth numbers 4 and 5 in Netaji Subhas Dock, would be made available shortly.

Kolkata Port, he indicated, might end up the current fiscal with a traffic throughput of 46 million tonnes as compared to 41. 26 million tonnes in 2003-04.

Dr M. Srinivasan, Prefossor, University of Tennessee, said one per cent saving in the logistics cost in India would be substantial for the economy. Right now, the logistics cost accounted for 13 per cent of India's GDP of $4.8 billion against eight to nine per cent in advanced countries.

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