3rd Party Logistics Practices at India
3PL Practices in India
Dr. B.S. Sahay
Professor of Operations Management Chairman, Centre for Supply Chain Management
SCM
Centre for Supply Chain Management
Management Development Institute
Gurgaon, India
Agenda for the Session
• • • • • •
SCM
Some Facts Business Challenges Why 3PL in India? 3PL Practices in India Conclusions and Recommendations What should be done?
Financial Improvements
Percent Improvement 13.5% 12.3% 9.2% 10.5% 10.0% 10.0% 15.0%
Financial Indicator Improvement in Sales Revenue Working Capital Improvement Capital Asset Reduction Production Cost Reduction Labor Cost Reduction ROA Improvement Logistics Cost Reduction
SCM
Some Facts:
• Annual Plan Outlay • Fiscal Deficit • Inventory tied up • Logistics Cost • GDP
SCM
: Rs. 1.13 Lakh Crores : Rs. 1.35 Lakh Crores (5.3% of GDP) : Rs. 1.17 Lakh Crores : 13.6% of our GDP : Rs. 25.57 Lakh Crores
Logistics Cost
Country Asian region China Japan Korea Singapore Taiwan European region France Germany Italy Netherlands Spain UK Sweden North American region Canada Mexico US GDP (billions) Logistics as % of GDP 14.5 10.5 12.4 20.0 13.5 11.7 11.8 12.6 12.2 12.1 12.2 12.7 11.8 14.4 8.70 345 3363 283 40 148 1200 1566 1151 286 527 1015 237 593 208 5673
SCM
International Comparison of Customer Orientation
Parameters
Product Quality 41.08 52.39 63.00 60.71 68.13 59.67 92.68 92.50 55.94 72.89
Product Design 34.05 56.62 58.50 48.57 58.06 69.84 81.46 71.39 66.96 63.11
O n - T i m e A fter-Sales M a n a g i n g D istribution Delivery Service 30.27 36.34 57.00 59.29 62.19 62.62 93.17 88.06 44.64 69.78 41.08 39.15 54.00 47.14 62.50 57.70 89.76 78.61 45.56 68.44 52.43 51.83 66.50 57.14 66.45 74.43 72.20 75.83 66.09 74.76
India Brazil Thailand South Korea Canada USA Japan Germany France Netherla nds No SCMt e : Source:
Companies are r ated 0=poor to 100=excellent World Competitiveness Report, 2000
Business Challenges
• Customer Expectation • Shortening of Product Life Cycles • World Competition •
Dr. B.S. Sahay
Professor of Operations Management Chairman, Centre for Supply Chain Management
SCM
Centre for Supply Chain Management
Management Development Institute
Gurgaon, India
Agenda for the Session
• • • • • •
SCM
Some Facts Business Challenges Why 3PL in India? 3PL Practices in India Conclusions and Recommendations What should be done?
Financial Improvements
Percent Improvement 13.5% 12.3% 9.2% 10.5% 10.0% 10.0% 15.0%
Financial Indicator Improvement in Sales Revenue Working Capital Improvement Capital Asset Reduction Production Cost Reduction Labor Cost Reduction ROA Improvement Logistics Cost Reduction
SCM
Some Facts:
• Annual Plan Outlay • Fiscal Deficit • Inventory tied up • Logistics Cost • GDP
SCM
: Rs. 1.13 Lakh Crores : Rs. 1.35 Lakh Crores (5.3% of GDP) : Rs. 1.17 Lakh Crores : 13.6% of our GDP : Rs. 25.57 Lakh Crores
Logistics Cost
Country Asian region China Japan Korea Singapore Taiwan European region France Germany Italy Netherlands Spain UK Sweden North American region Canada Mexico US GDP (billions) Logistics as % of GDP 14.5 10.5 12.4 20.0 13.5 11.7 11.8 12.6 12.2 12.1 12.2 12.7 11.8 14.4 8.70 345 3363 283 40 148 1200 1566 1151 286 527 1015 237 593 208 5673
SCM
International Comparison of Customer Orientation
Parameters
Product Quality 41.08 52.39 63.00 60.71 68.13 59.67 92.68 92.50 55.94 72.89
Product Design 34.05 56.62 58.50 48.57 58.06 69.84 81.46 71.39 66.96 63.11
O n - T i m e A fter-Sales M a n a g i n g D istribution Delivery Service 30.27 36.34 57.00 59.29 62.19 62.62 93.17 88.06 44.64 69.78 41.08 39.15 54.00 47.14 62.50 57.70 89.76 78.61 45.56 68.44 52.43 51.83 66.50 57.14 66.45 74.43 72.20 75.83 66.09 74.76
India Brazil Thailand South Korea Canada USA Japan Germany France Netherla nds No SCMt e : Source:
Companies are r ated 0=poor to 100=excellent World Competitiveness Report, 2000
Business Challenges
• Customer Expectation • Shortening of Product Life Cycles • World Competition •