Logistics and warehousing sector plays an indispensable role in the transportation of goods across the country. Today, logistics cost in India is high accounting for 13-17% of the Gross Domestic Product (GDP) which is nearly double compared to the developed countries. Warehousing accounts for approximately 25% of the logistics cost; hence, well-managed warehouses are critical for the success of companies to improve business productivity.

Warehouse - a fundamental part of business infrastructure and one of the key enablers in the supply chain - is important for procurement, manufacturing and distribution services which collectively build robust economies. In India, warehousing sector is witnessing various evolutionary changes due to factors like Goods & Services Tax (GST), rise in E-commerce, government’s policy push to increase manufacturing, etc.

Against this background, Industrial Products Finder (IPF) hosted a virtual roundtable - titled “How to efficiently utilise space and resources with latest technology in modern warehouses” - on August 31, 2021 to discuss ways to improve efficiency of warehouses by using latest solutions to ensure quick shipments and customer satisfaction. Jungheinrich was the Presenting Partner for the roundtable.

The Roundtable - moderated by Rakesh Rao, Executive Editor of IPF - saw participations of Ard Ruiter, Head of Business Development, Logistic System, Jungheinrich AG; Vivek Juneja, Founder & MD, Varuna Group; Om Vijayvargiya, Head of Supply Chain and Logistics, Schaeffler India; Mehernosh Patel, Head of Supply Chain and Logistics, Covestro India; and Javin Bhinde, Director & Co-founder, Syncore Consulting Pvt Ltd.

According to Ard Ruiter, Head of Business Development, Logistic System, Jungheinrich AG, with logistics and warehousing operations growing bigger in size, efficiency becomes more important. “The growing e-commerce industry requires delivery on product level, which in turn needs item scale operations. Lack of availability of skilled manpower is leading to rise in employee cost; and thus, adds to the cost of logistics operations. On the other hand, events like Covid create lots of uncertainties about the future. Amid all these challenges and uncertainties, people are looking to stay flexible. These factors are driving the automation demand in the logistics and warehousing sector. I foresee very fast growth in India compared with other markets like China,” he added.

Jungheinrich offers a wide range of products and systems - from manual industrial trucks to fully automated intralogistics systems - for logistics and warehousing sector. Jungheinrich has been involved in developing a lot of solutions and systems around forklift trucks for making them faster, user-friendly and flexible. One such area is the Lithium-ion technology, which reduces the size of battery, adds safety and offers more flexible ways of charging. It allows for more freedom in the design of the truck which in turn can result in a less room needed to manoeuvre and more room and view for the driver.

“The battery is the heart of any electric forklift truck. As a pioneer, we have been developing Lithium-ion technology intensively by considering the truck and the battery as one system to be able to maximize the performance potential in the warehouses. Li-ion batteries are revolutionising the market for electric industrial trucks. High-performance energy cells score over traditional lead-acid batteries with world-leading performance, fast charging times and zero maintenance. Jungheinrich Li ion batteries ensure continuous operation; thanks to their long service life,” informed Ard Ruiter.

Embedding efficiency
In the last 5-7 years, the Government of India has initiated various policy reforms triggering changes in the logistics and warehousing sector. “While GST introduction has been hailed as one of the path breakers in taxation regime, it also had a very interesting corollary on logistics and distribution systems in India. Prior to GST, each state had its own C&F agents for distribution and it was a tax optimise distribution structure for a lot of FMCG and pharma companies. With the implementation of GST (i.e. one-country, one-tax regime), companies - for the first time - started to seriously look at their distribution structures to save cost and achieve better customer service (fulfilment) through the right position, right size and right distribution network of the warehouses,” elaborated Javin Bhinde, Director & Co-founder, Syncore Consulting Pvt Ltd.

Explaining the importance of warehouses in the value chain for a logistics company, Vivek Juneja, Founder & MD, Varuna Group, said, “Warehouse accounts for 20% of total logistics spend, but controls the entire efficiency of the value chain. Lot of value can be derived if the warehouse is rightly managed. For example - if a truck runs in an efficient warehousing network, then the productivity of the truck can be improved upto 20%. At present, 35% of truck’s time is spent in warehousing (standing for either loading or unloading). This is highly inefficient way of operating warehouses. Trucks of companies having well-managed warehouses spend only 15% of their time in the warehouse. Good warehousing set up can add value in the supply chain.”

A lot of companies are taking a close look at the network optimisation projects with customer fulfilment being the top priority. “By default, customers expect us to provide world class products. If every supplier is supplying product of good quality, then what is the differentiating factor between the two suppliers. Nowadays, this differentiation factor is coming from services, i.e. who is delivering the right product at a right time and in the right quality to the customers. To create this differentiating factor, we must have right level of transportation and warehousing systems. Transportation is very much dependent on warehousing activities. If trucks are spending 35% of their time for loading & unloading, then warehouses are not working at the right efficiency level. Efficiency improvement in warehouse helps in optimising the space, reduce the cost and improve the productivity,” informed Om Vijayvargiya, Head of Supply Chain and Logistics, Schaeffler India.

According to Mehernosh Patel, Head of Supply Chain and Logistics, Covestro India, efficiency can be measured in three areas - i.e. compliance, safety and operations. “There are different kinds of products (for example, different grades of chemicals) that are stored in a warehouse, which require different compliance readiness at the warehouse. Compliance and regulatory infrastructure should be in place and this is the first license to operate to bring in the efficiency. Safety is paramount, especially in chemical industry and, hence, is the second most important part. We measure 2 KPIs - first is the accident-free days and second is the ratio of damage of shipments due to warehouse handling compared to total number of shipments. KPIs help us measure the efficiency also from the safety perspective to ensure that the warehouse run most of the time throughout the year,” he said.

Patel added, “Finally, with respect to operations, it is important for warehouses to maintain right inventory and satisfy the customers by delivering right products at the right time. On time KPI performance is extremely important to see if we are able to deliver the customer on time. In addition to transportation, warehousing also plays a very important part in ensuring that we meet the expected delivery time of the customers. Clear role and responsibility at warehouse for quick and better solution is a must. If we put all these things together, then we can improve the turnaround time (i.e. efficiency) of the warehouse.”

Logistics involves many things - forklift trucks, racking systems, etc - that interact with each other; hence, for improving efficiency of logistics & warehousing operation, it is important to look at these things as one system. “Depending upon the requirement and planning, one should opt for fully automated systems, semi-automated systems or manual systems. Jungheinrich offers right solutions to all logistics needs after understanding the requirements of the customers,” said Ard Ruiter.

Covid effect
Logistics cost is high in India compared to other developed countries. Covid 19 pandemic caused lots of disruption in the supply chains forcing companies to recalibrate their sourcing and distribution systems. “All supply chains are under examination at the movement because of the effects of Covid 19 pandemic which is resulting in longer delivery time and high delivery costs. Earlier Just-in-Time (JIT) was the key and now we are looking at adequate stocking. So, the entire supply chain is under scrutiny. In addition to changes required in the physical aspect of logistics & warehousing, there is a strong case to adopt IT solutions for optimising operations,” opined Ard Ruiter.

Offering some tips for companies going for upgradation of their warehouses, he said, “Companies must opt for a step-wise approach to automation. Analyses is always the starting point. Consider your present and future demand to identify systems and combinations of systems that can be considered for using. Consider sustainability and reliability as well as need for flexibility and speed of conversion. The most important is to choose the reliable partner that understands your needs, your preferred system and your level of support throughout the lifecycle.”

Ecommerce has got fillip in the last 5 years and got tremendous boost in the last 2 years (due to Covid). “Ecommerce players have changed the way their customers and competitors behave. Logistics players and manufacturing companies need to relook at their end-to-end customer fulfilment processes to satisfy their customer’s need on time. There has been a drastic reduction in customer’s tolerance time. So, warehousing & logistics - the entire backbone - play a very important part,” said Javin Bhinde.

Ten years back companies looked at logistics & warehousing as a cost centre, but now they consider it as an important driver for service delivery and excellence.

Bhinde added, “There is growing trend towards having larger distribution networks; hence we are seeing emergence of industrial parks, logistics & warehousing parks. This is adding to the existing space of logistics & warehousing in India and is leading to the rise in usage of automation. So, storing, handling and accurate error-free transportation are going to be a serious competitive advantage.”