The Hindu Business Line : `Logistics, supply chain in rural areas could be next big opportunity'

As the Indian retail, manufacturing and infrastructure sectors are poised for rapid growth, they are faced with new challenges when it comes to logistics and supply chain issues — particularly in the untapped rural areas for farm produce and delivery of goods and services.

With over 70 per cent of the economy centred around the rural parts of the country, logistics players are now seeking ways to address this issue as about $100 billion worth potential is latent in the rural parts of the country, according to Professor Viswanadham, Executive Director of the Centre for Global Logistics and Manufacturing Strategies (GLAMS), at the Indian School of Business.

Appropriate Strategies

The GLAMS board comprises of Mr Pawan Munjal, Managing Director, Hero Honda; Ms Mallika Srinivasan, Director, TAFE; Mr Vikram Singh Mehta, Chairman, Shell India; among others. The industry is nascent and the data fragmented and the GLAMS mandate is to lace together various elements for informed decision making.

Speaking to Business Line, Prof Viswanadham said that the Global Logistics Centre set up in collaboration with the Chennai-based TAFE Group, and the Hero Group, is working with a host of corporate houses in their bid to unlock the potential of India.

"For instance, with General Motors India, the effort is to work up appropriate strategies for supply chain. With IBM we are handling a project on services and manufacturing and also provide independent consultancy and research services to both India based companies and emerging markets. Recently, a high-powered team from $20 billion Rio Tinto group visited the ISB and together we are working out strategies for their India brief," he explained.

Opportunities

There is excitement in the Indian logistics and supply chain market, and the effort is also now directed at spotting entrepreneurs who could make a difference to this growing sector. Mr Terry Garnet, an investor with over $1 billion in portfolio is also visiting India and is scouting for investment opportunities in rural supply chain.

During the upcoming Global Logistics Summit to be inaugurated by the Prime Minister, Dr Manmohan Singh, "ISB Logistics centre is set to unveil two research works that seek to unravel the promise and potential of the logistics and supply chain issues," he said. Referring to special economic zones, he said globally, these SEZs were created in underdeveloped areas with the main objective of generating employment and forex. Unfortunately, he said "the model followed in India seems to be different as most of these SEZs are coming up in developed areas."

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