“New technologies will address operational challenges”

“New technologies will address operational challenges”

Mandar Athalekar is a Strategy Leader for Global Trade Management at Thomson Reuters. He has over 19 years of experience in Global Trade and Supply Chain Management. He spoke with TransREporter about what makes logistics a powerhouse sector.


TR: The government of India has widened the category of infrastructure sub-sectors to “transport and logistics” from the earlier sub-head of “transport”. How in your opinion will this move be beneficial?
Mandar Athalekar (MA): Most certainly a welcome move. Overdue, I would say. Making it ‘Logistics’ brings in its sphere a vast set of activities viz. industrial parks, logistics parks, warehousing, cold storage facilities, etc. over and above conventional transportation. In fact, even roads, bridges, ports, airports, shipyards, inland waterways, railway tracks, tunnels and urban public transport are all included as part of the updated logistics classification. So now the definition is justifiably made comprehensive and would enable companies in this sector to attract investments, access funds and get credit at a competitive rate on a long-term basis.


TR: According to a joint study by ASSOCHAM and MRSS, about 40 per cent to 50 per cent of India’s total annual production of milk, fruits and vegetables, worth $440bn, ends up wasted due to unavailability of cold storage units. How to address this challenge?
MA: Yes, I went through the study. It essentially notes that cold chain storage capability is way below demand, lacks efficiency and suffers from high operating costs and outdated technology. So the use of technology will address most of these operational challenges. It recommends advanced self-updating and hosted computer systems that can integrate with warehousing systems, temperature control systems, GPS and sensory devices, helping organisations cut down on maintenance, infrastructure, and labour costs. For instance, investing in robotics to revolutionise logistics like Alibaba’s smart warehouse majorly managed by robots has.


TR: How in your opinion Internet of Things can transform this industry as a whole?
MA: Today, operational efficiency and innovation, the two big growth enablers for the industry are almost entirely governed by the Internet of Things (IoT). A wide range of technologies for computation, automation, communication, optimisation, real-time tracking and visibility, analytics, robotics and most importantly, information management are all available at fingertips, thanks to IoT. And storage, processing and transmission of information without the slightest cost overheads, once a dream is now a reality, thanks to enterprise cloud systems with packaged business logic programmed to meet dynamic business requirements.


TR: Could you also talk about the technology that is leading the way these days when it comes to supply chain risk management?
MA: Risks largely stem from uncertainties which lead to delays or disruptions. And technology helps find solutions to reduce them. It begins with identifying the risks and then devising control mechanism to manage them. For instance, a system that uses technology to access and analyse financial and performance history of suppliers and also track vessels carrying goods across trade routes globally is what would help companies identify risks in time and make informed decisions for managing them. Investing in such technologies that help manage supply chain risks is leading the way.


TR: GST implementation has changed the industry aspects and tax structure. How will it aid the overall growth of the country?
MA: Benefits of Goods and Services Tax (GST) are multiple and multifarious. A host of them, those particularly for trade, industry, and economy, are unified tax and compliance procedures for registration, duty payment, return filing and refund of taxes, faster movement of goods across the country and faster clearances across borders, digitisation, seamless flow of input tax credit realisation across the supply chain and efficient neutralisation of taxes adding to exports competitiveness. Furthermore, reconfigured sourcing and hub-based warehouse models, removal of Octroi and e-way bill easing truck movements would cut down the high logistics costs in India.


TR: What kind of support do you expect from the government in overcoming growth inhibitors?
MA: The Government budgeted about `4 trillion for infrastructure growth and development this year, the largest ever. Alongside, new planning paradigms for integrated collaborative development between various initiatives, reforms, schemes, and projects viz. ‘Make in India’, GST, Digitisation, etc. are being set. Timely successful completion of mega projects of Bharatmala Pariyojana and Sagarmala for a massive expansion of roads, highways and expressways network, coastal and port connectivity, Industrial and Economic Corridors and Decongestion will bear testimony to an unprecedented support from the government.


TR: In your opinion, what transport infrastructure issues need to be addressed most urgently?
MA: Unsafe condition of roads due to inferior quality of construction leading to longer transit and high rate of accidents, lack of cargo handling capacity at ports and airports, missing connectivity between ports, airports and highways, absence of urban planning, inadequate development and use of railways for cargo transport, traffic congestion and bottlenecks, low literacy rate of truck drivers, inadequate training, compensation, work benefits and facilities for drivers, insufficient sector financing and extremely low adoption of information and communication technology are some of the flagrant issues to be urgently addressed.


TR: How do you see the logistics sector developing over the coming two to three years?
MA: With a string of initiatives, reforms, massive budgetary allocations, mega projects and with increased access to finance, logistics sector will see an accelerated growth over the coming years. Forecasts suggest CAGR (Compound Annual Growth Rate) of 15-20 per cent between FY 2016-2020. Over the coming two to three years, some of the early benefits which will start to accrue include decrease in logistics costs, increase in Foreign Direct Investment (FDI), augmented capacity, expanded network and improved quality of infrastructure. Most importantly, technology penetration will considerably increase.


TR: What priorities and goals do you have for 2018?
MA: As a business specialised in content-powered cloud-based enterprise information technology solutions focussed on global trade and supply chain management, our priorities and goals are obviously aligned to those of the reforms and policy initiatives boosting the growth of logistics sector. So we will focus on enhancing the existing features and capabilities of Thomson Reuters ONESOURCE Global Trade solution in Automation, Regulatory and Trading Partner Integration, Digitisation and Visibility for industry sectors viz. Automobile and Components, Chemicals, Engineering and Consumer Electronics which are primary growth drivers.


TransREporter focuses on providing its point of view on industry trends, the health of the industry and various other reports and analysis necessary for logistics professionals.