Future of logistics and supply chain in India.
Since the liberalization of the Indian Economy in the early 90s, India has been pegged to become a global power. Since then, significant developments in technology, talent development, and infrastructure have meant that India has grown into a world leader in multiple fields. Supply Chain was not one of them so far. The most recent Global Logistics Performance Index ranked India at 35. A poor showing for one of the world’s largest economies.
The traditional supply chains in India were designed keeping in mind the tax regulations and restraints of different states. This lead to segregated supply chains, domination of unorganized local players and heavily person dependent operations. Over the last decade or so, there has been significant development and automation, but considering where we were coming from, there’s still a long way to go.
With the advent of the upcoming GST reform – scheduled for 1st July 2017 – will force the hands of multiple industries to move away from the tax based supply chain and chase greater scale and efficiency. As there will be a uniform tax code across India:
- Local unorganized players will no longer hold the same value benefits.
- Consolidation of warehouses would be necessary, leading to greater scale and making person dependency impossible.
- Operational efficiency would be the decisive factor
- The efficiency of transportation systems would improve due to lesser stoppages while crossing tax circles
- In addition to this, the greater scale of the supply chain, in general, would open up the industry to a world of options in terms of technology and automation.
Using Automated Sorter systems, Automated packaging systems, Robotics, Blockchain technology, Predictive big data analysis, Artificial intelligence & machine learning in the supply chain would be very imparative.
This technological boost, a shift in ideology from Supply chain as a cost center to supply chain as a difference maker, improved funding for the sector and government initiatives to improve infrastructure mean a great improvement in Supply Chain in India.
And would lead to a big jump in the Global Logistics Performance Index.