The state-of-the-art logistics facility from Tata Group stands out for its immense scale. Ajay Chopra, CEO, Drive India Enterprise Solutions (DIESL), shares today's demands in the industry and how the company is addressing them

Retailer: Indian retail is reeling under the problem of shrinkage. How well-planned SCM can actually curb down the problem? What is DIESL’s initiative in this context?

Ajay Chopra (AC): Shrinkage is definitely a problem, with surveys showing India with the highest rates of shrinkage as a percentage of sales (shrinkage 2.72% of retail sales), however, these shrinkages are more a factor of shoplifting, employee theft, internal error and suppliers or vendors.  Shrinkages in SCM has more to do with how a product is handled, how many times this inventory is handled and lack of visibility. A well planned SCM needs to have a robust ERP system in place to ensure good control over inventory, numbers, location and regular cycle counts.

 

Retailer: What is the USP of DIESL’s services?

AC: Technology and human resources are the two primary components of logistics management, which is about working smarter to achieve greater efficiencies at a lower cost. DIESL brings to the industry a new level of visibility and control to complex logistics operations as we invest significantly in engineering, systems resources and technology to simplify and automate processes. Cost advantage can only take you so far. Technology and human resources are the only two tangible differentiators of the leaders from the followers.

 

Retailer: Where are the infrastructural amendments required for the betterment of services?

AC: The higher logistics spend in India can be attributed to the highly fragmented logistics structure in the country, with over 93 per cent of the market being controlled by unorganised sector. The costs are bound to come down by any initiative that leads to consolidation and reduces the barriers. Of course better infrastructure, in terms of roads, airports, ports, etc will help in the same. If India is to match logistics operations in developed countries, the way ahead is through speedy development of logistics parks, well planned warehousing and IT initiatives. There is also a need for key policy initiatives for the industry – like exemption of excise duties, reduced delivery times, and improved support facilities, among other steps. The pertinent regulatory changes required are solving the infrastructure issues of power and roads; regulatory changes that truly make the business seamless in the country (like GST); complete abolishment of entry forms and controls across states in the country; removal of hidden costs and inefficient legacy systems of Octroi and Cess, etc; effective answer to the toll charges’ impact on the freight costs; creation of one regulatory body at the government level to address all issues of the logistics industry, which is currently spread amongst shipping, road, infrastructure and other ministries; and labour reforms that bring control and clarity in such a sensitive and critical area.

 

Retailer: Are your services only meant for large enterprises? Do you also cater to medium and small enterprises? If yes, what sort of services are you providing and how are they benefiting SMEs?

AC: Yes, we cater to all kinds of companies, including medium and small enterprises. SMEs usually have lesser quantities of inventories to be handled. Hence, we offer them shared facilities for storage and for transportation. Sharing facilities can lead to cost benefits, which can be passed onto clients.

 

Retailer: How do you maintain the scalability of services? In your opinion, how adoptive are the small and mid-sized retailers to modern SCM?

AC: DIESL offers all supply chain solutions under one roof and these solutions are employed such that they are customised and extremely flexible. Our warehousing and distribution facilities can be shared when the scale of operations is less. At the same time, warehouses are spread over 176 locations across India that offer enough opportunity for expansion when need be. We are backed by a strong network of vendors giving unmatched reach and penetration which further contributes to a responsive supply chain. And most importantly, we usually work on a variable cost model which is ideal for scalability of services.

 

Retailer: Do you have any services for e-tail?  How is SCM for e-commerce different from that of brick & mortar or stand-alone stores?

AC: DIESL caters to e-tail segment for white goods like mobile handsets and set top boxes. The services we provide for e-tail are diverse and range from storage and distribution, to last mile deliveries and even reverse logistics. An efficient reverse distribution structure may lead to a significant return on investment as well as a significantly increased competitiveness in the market. It includes various offerings like facilitating returns of damaged/obsolete stock, milk run collections on periodic basis, storage of returns stock, managing repairs for damaged stock, replacing returns stock with new products, scrap disposal of defective/damaged stock, managing project site returns, and cash management related to reverse logistics (eg, supplier credits).

 

Retailer: What are the state-of-the-art technologies implemented in your services?

AC: We have invested up to Rs 100 crore in technology to benchmark it with the best internationally. DIESL’s IT capabilities boast of robust systems with scalability to external interfaces via EDI and XML interfaces, and easy to manage solutions comprising of network infrastructure, system infrastructure, and security infrastructure.

SAP forms the backbone of DIESL’s ERP. DIESL has also put in place products like WIMac (the Warehouse Management System), Connect (the Transport Management System) and Connect International (the Import & Export Management System), which separately and together offer end to end software solutions for an efficient supply chain. TCS is our knowledge partner, supporting us in building this technology backed service edge. Our network is also highly secure due to the “Onion Defense” strategy. Intranet and Internet access is widely available internally, in all facilities. 

 

Retailer: How do you enhance the skill of your employees? What kinds of training programmes are undertaken?

AC: The success of the business primarily depends upon how integrated its people are into the business. The involvement of people from the bottom-up has been done in a manner so that they understand business dynamics very well. To ensure this, we run quality programmes like ‘Project Caliper’ which helps in measuring quality standards across various locations. 

DIESL also organises R3 Learning Sessions that take place annually to emphasise the need to Refocus, Regroup and Rejuvenate. The idea is to provide a platform for middle to senior management to ‘Regroup’ and share their experiences from the year gone by, their learnings, their accomplishments, the roadblocks, and to refocus on executing these learnings to better perform in the coming days here with our colleagues and our clients. This meet also incorporates various team games to ‘Rejuvenate’ and allow bonding between different factions of DIESLites

DIESL’s training and development wing actively organises internal managerial development workshops, leadership programmes, and functional training programmes for its employees for skills enhancement. Employees are also regularly sent for external workshops specialising in warehousing, distribution, international logistics, integrated supply chain management, etc.

 

Retailer: How do you promote your services?

AC: DIESL is an active participant in logistics industry events as a sponsor and our speakers are much sought after as experts in this domain. In addition to this, DIESL has some proprietary events that it organises for the industry for logistics services users like the Captains of Logistics series (a multicity knowledge forum) and the Annual Supply Chain Summit (which is in its 4th year now and draws over 150 delegates and Indian and international speakers). We regularly feature our advertisements in print media (newspapers, trade magazines and business magazines), outdoor media like airports, and promote our services through direct marketing and online initiatives. More importantly, we are thankful to our clients who have recommended our services to their peers in the industry.

 

 

 

 

 

 

 

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