‘Supply chain mgmt sector must be regarded as industry’

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Chennai, Nov 17 : The economic scenario globally compels every auto manufacturer to be cost competitive for survival. The complex supply chain management (SCM) of fully finished units and spares for after-market services when managed well, will give the competitive edge. Supply chain management sector should be regarded as an industry.

Unless this happens, it will not benefit the overall industry, said auto industry insiders. The manufacturing companies in India tend to look at logistics service providers largely as physical service providers. This is the reason why the integration and alignment of common goals between manufacturers and logistics companies have not taken place yet which in turn mounts pressure on auto companies, they said.

“Though OEMs proudly proclaim the logistics players as 3PL or 4PL suppliers, the partnerships are only in papers not in mind. The manufacturing sector should consider logistics services as in-sourcing, rather than outsourcing. Both the service providers and companies should have a common objective and aim at bringing down the total cost instead of trying to cut down the profits of one other,” said R Dinesh, joint managing director, TVS Sons.

There is a great business scope for logistic solution providers who position themselves as knowledge leaders in supply chain to integrate the supply chain elements through alliances, and joint ventures.”For every job created in the manufacturing sector, the logistics industry will create three to four jobs. It should be recognised as in industry,” he added.

“The inter-modal logistic solution will be extremely important for Indian automotive industry, which is aiming to penetrate suburban and rural markets to tap the after market potential and augment the dealership network in the coming years,” said K Venkatraman, Partner, ATKearney.

According to Srivats Ram, Managing Director, Wheels India, “since the automotive industry is highly fragmented, the information move through a number of points and layers result in distortion and inaccuracy. OEMs order for components based on the information they get from market.” He said that the turn-around time at ports is still a major handicap due to lack of quality supply chain management in India, particularly on the logistics side.