What is the current scenario of gearing up by the logistic companies for the future?
They do not upgrade their capacity strategically. There are only few companies doing this for their supply chain network strategically. The growth of retail sector is not taking place on the rate it should be. Once the growth takes place, then there will be supply chain integration with agricultural sector in the rural areas. It would have sustainable business opportunities for the companies. The distributions network has to be expanding in the rural India. That would come from the retail end. Rural India is headed to increase in number outlets and whole selling points in the future. There is a need to empower and organise the retails stores in the hinterlands of the country.
There has been a debate on developing retail infrastructure in India. Whether it should be developed by the Government or by the private sector?
If a private company develops infrastructure, it will be for their vested interests only. The sustenance of the infrastructure involves a lot of maintenance which would need constant investment which may not be done by the private sector. The sustainable development can only be done by the Government or by a body, which looks after the holistic development. The Government should form an apex body, which should look after the entire infrastructure whether it is warehousing, railway transportation, road transportation and other tools.
What kind of technological, infrastructural and knowledge up gradation logistic companies need to meet the demand of goods?
As far as technological up gradation is concerned, the internet and mobile penetration have increased. Therefore, it can be a good platform for data interchange within the supply chain. That can enable supply chain companies to be connected to the final outlets and data inter-exchange.
The major innovations are coming toady on the form of optimisation of the payloads. Indian companies can adopt cross-docking, which is used by Walmart. It is different from hub-and-spoke model, used by India’s supply chain industry. If a consignment is sent to a hub, the truck may collect another consignment from a middle point. It is cross-docking.
Walmart has parted itself from Bharti very recently, how will it affect India’s retail and supply chain industry?
It will have a mixed affect on retail infrastructure. Now they would have independent operational stores. It also would not give a good signal to the other FDIs in the retail. If a foreign company is going to operate on its own, it may not be successful to create an infrastructure without getting help from an Indian partner. It also raises question on the strategy of Walmart in India.