Though the retail industry in India is the fifth largest in the world and contribute over 5% of the country?s GDP, the supply chain costs here are about 12-13% of the GDP in comparison to 7-8% in the developed economies, says a report by the Confederation of Indian Industry (CII).
The CII and Amarthi Consulting study ?Global competitiveness of retail supply chain ? Challenges, Strategies and Recommendations? focuses on various issues, including capacity addition and tax laws. Sanjay Upendram, chief executive officer, Amarthi Consulting said, ?There is only 20% capacity addition in railway network since independence but traffic has increased 10-fold. The capacity constraints at airports lead to 20-30% additional fuel consumption. More than 30% farm produce worth $13 billion gets wasted due to lack of integrated cold chain infrastructure and there is complex taxation structure that adds to increased costs and delays.?
There are a number of recommendations that the report suggests, including designing supply chain to suit products or customers in rural and urban markets, leveraging tax laws and incentives, building collaboration beyond traditional boundaries, designing appropriate network structure, developing common platform in products, developing strategic sourcing options with a varied set of solutions.
The national-level recommendations include rapid implementation of supply chain infrastructure, need for 20-30 expressways that connect hubs, dedicated freights corridors, 15-20 logistics parks, clear definition of taxable subjects and applicable laws, 72,000 km of highway by 2015, over 1,500 million tonne of additional port capacity.
Anshuman Singh, managing director & chief executive officer, Future Supply Chain Solutions, highlighted his challenges of supply chain and said, ?During the last 10 years in the Future group, every day has been a learning experience in supply chain management.?