Gaurav Sharma | 12th May 2022
The logistics and warehousing sectors in India have seen significant growth in recent years. The growth in e-commerce, hyperlocal and direct-to-customer segments have increased the need for efficient and timely movement and storage of goods, as well as their delivery to the end-consumer. This White Paper analyses the crucial role of technology and automation to meet this demand.
Indian government’s National Logistics Policy and the National Warehousing Policy expected to be released in 2022 , as well as the Prime Minister’s Gati Shakti programme, are expected to dramatically enhance the logistics space in India, with the aim of reducing the present 14% of GDP logistics costs in the country.
The recent move of the government to grant infrastructure status to the logistics sector is also expected to improve access to financing for projects and increase foreign investments in the sector.
At the same time, this dramatic growth has also resulted in challenges. Increased competition and razor-thin margins amongst e-commerce and third-party logistics players and the increased expectation from consumers of expedited shipments, deliveries and returns, have presented significant challenges for warehousing developers and owners.
Such expedited shipments, deliveries and replacements presume efficient warehousing design and development, as well as the seamless integration of technologies, IT and automation alongside the existing workforce.
The implementation of such technologies, IT and automation must be calibrated to meet needs on the ground, i.e., there is no ‘one size fits all’ model. The same is true of levels of technological solutions that need to be implemented in order to ensure greatest efficiencies for end-users.
Easier to adopt IT solutions can be more readily implemented in the case of existing warehouses, whereas in the case of purpose-built new warehouses, more technologically advanced solutions and automation can be deployed.
More often than not, such capex investments in adopting such solutions are often weighed against fairly easy access to skilled and relatively low-cost workforce. It should be noted that recent implementation of such solutions across projects in India have already recorded swift returns on investment.
At the same time, it is important not to draw a false equivalence between the adoption of technological solutions and relying solely on one’s workforce. Indeed, the adoption and implementation of such solutions can lead to the upskilling of a warehouse’s existing personnel by training them to use and maintain new technologies and equipment.
The recent global flux in supply chains caused by the pandemic presents an opportunity for the players of this sector in India to leverage the use of technological innovations to increase efficacies, reduce costs and better integrate into global supply chains. This in turn will be a catalyst for attracting further foreign investment to India.
Read the complete white paper here.
Co-Authors:
White Paper