By Huned Contractor

Pune-based Spear Logistics Pvt Ltd came into being when two professionals with comprehensive knowledge about transportation, warehousing, stock-keeping and related technologies decided to pool their resources and start a company of their own. From just one client in 2001 the company now manages the logistics operations of 45 blue-chip companies across 75 locations in India

The logistics sector in India is currently pegged between USD 90-125 billion, and has today, become an area of priority. Years of high growth in the Indian economy has resulted in large volumes of traffic, thereby providing opportunities in areas such as transportation, warehousing, freight forwarding, express cargo, container and shipping services, etc. In fact, there is room for further growth in the country’s logistics industry, especially in contract logistics as market penetration of the niche segment is still low at around 15 per cent compared to market penetration of contract logistics in developed nations, which is as high as 30 to 35 per cent.

Contract logistics includes planning, implementation, and control of a logistics system under a contract. Some major scope of works are receipt of goods into a warehouse, quality control, order receipt, order picking or packing, distribution, efficient raw material procurement and storage, among many others. Given this scenario, Spear Logistics Private Limited is certainly in the right space at the right time. Headed by Capt Uday Palsule, Managing Director and Gautam Dembla, CEO, the company was started in 2001, managing 10,000 sq.ft of warehousing operations for their first customer. Today, it looks after the logistics operations of 45 customers through 2.8 million sq.ft of warehousing space and has spread from being mainly in the western region to 75 warehouses spread across 25 cities.

Palsule and Dembla have brought to the company combined operational experience of more than 50 years in logistics. Before starting Spear Logistics, both worked at top logistics’ companies in India at senior management positions. “The company’s management core is an experienced team of 400 with a supervisory staff exceeding 1,900 professionals. We had aimed to be amongst the top five 3PL (third-party logistics) companies in India and are proud to say that we have achieved this goal in a short span. Along with our existing 2.8 million sq.ft of warehousing space, we have added another 0.5 million square feet of warehousing space last year to propel us into the top league,” Palsule states.

Spear Logistics offers customised solutions through a range of premier contract logistics and 3PL services ranging from warehousing and distribution management, carrier management, intra-city deliveries and value-added services. “We offer inbound, in-plant and outbound logistics services. Our range of contract logistics services include inbound warehouse management, in-plant stores management, line feed operations, after market spares’ warehouse, finished goods’ warehouse, retail and e-commerce fulfilment centres. We also have a dedicated freight and secondary distribution division to take care of clients’ transportation needs,” Dembla elaborates.

With its pan-India network, the company current operates in all major warehousing clusters like Mumbai, Pune, Aurangabad, Nagpur, Ahmedabad, Coimbatore, Cochin, Hyderabad, Bangalore, and Chennai. “Traditionally, the western and southern regions have been our stronghold. However, within the last two years Spear has grown rapidly in the north and added close to 0.3 million sq.ft of warehouse space there. Now we have many large accounts at Delhi, Gurgaon, Pantnagar, Jaipur and Bhiwadi,” Palsule informs. The company has a presence in almost all the major industry segments. “Initially we strategically focused on the engineering, automotive and telecom sectors but then we took into consideration the changing industrial dynamics and broadened our customer basket to include other industry segments like retail and e-commerce, pharmaceuticals, consumer durables, lubricants, chemicals, and FMCG as well,” Palsule states.

The company has achieved rapid growth with CAGR of 29 per cent over the last five years. From a mere Rs 250 million in 2009-10 it has come to clocking a turnover of Rs 1 billion in 2014-15 and expects to close 2015-16 with revenue of about Rs 1.4 billion. Says Dembla: “We adopt a customer-centric approach and this has resulted in long-term associations with our customers. The average contract period of the company is four years and 40 per cent of our customers have been with us for more than five years. Our clientele comprises some of the world’s biggest companies in their chosen verticals such as Bajaj Auto, Honeywell, Mahindra & Mahindra, Hyva, Atlas Copco, Siemens, Armacell, Bharti Airtel, Indus Towers, Snapdeal, etc.”

So what is it that gives the company an edge over its competitors? Elaborates Palsule: “We have striven to provide solutions to complex problems and thus maintain our technology leadership. We also have worked hard to maintain volume growth. The company has deliberately kept away from low-value additions. We have a long-term perspective and value long-term relationships with our customers. We believe that relationships pay. A significant amount of our sales come out of deep sales or repeat sales from existing customers and that is our testament to relationships. Also, right from the beginning, we have been focused on measurable quality deliverables. The organisation has been designed to clearly address roles and responsibilities and proper orientation at all levels has resulted in a quality culture.”

The company maintains a specialised team of industrial engineers that helps in making processes leaner and more efficient for cycle time reduction. “They do detailed systematic studies of operations for systems and workflow customisation and suggest improvements to make processes leaner and more accurate. Centralised audit teams follow stringent norms to audit inventory and process,” Palsule states. All the warehouses owned by the company are driven by KPIs (key process indicators) and SOPs (standard operating procedures). “We handle a large number of SKUs (stock-keeping units) and lines from diverse industry sectors. Our inventory accuracy across all our warehouses is amongst the best in the industry. The company’s warehouses carry more than Rs 30 billion worth of inventory and process 12 million lines per annum,” Dembla states.

While the company has no plan to extend its logistics operations outside India, it is now looking at various new products in warehousing and has recently set up a multi-user facility at Bhiwandi and Delhi. “We have already strengthened our distribution division which will contribute to our skillsets and topline considerably. Being a technology-driven company, we are investing heavily in the latest IT systems and technology. WMS (warehouse management system), TMS (transport management system) and dashboard are used for streamlining operational processes. SQL (programming language for data base management) forms the backbone database for our WMS. CRM helps our sales’ backbone and POMs (purchase order management software), company roll and Oracle financials help our corporate backdrop,” Palsule informs.

The company uses Webex as its TMS and offers POD (proof of delivery) visibility to its clients and also to measure delivery performance. “Our WMS can perform all the basic warehousing activities. We understand that every customer has a unique requirement and WMS might require customisation. Our WMS is smart and flexible enough to accommodate such customisation. Meanwhile, we have proven barcode capability along with wired and wireless scanner support for binning, picking and packing process along with system-ruled space allocation for put away. It helps seamless information and material flow so that a customer is conveniently able to remotely track any consignment,” he adds.

A Client Case Study

A world leader in compressors, generators, construction and mining equipment, industrial tools and assembly systems, saw rapid growth demanding a makeover in SCM (supply chain management) to meet the global challenges. Spear Logistics took up the project to improve supply chain performance by providing greater scalability, reduced cycle time and enabling efficient service delivery. The solution arrived at comprised providing world-class facilities to handle end-to-end storage and delivery requirements, enabling streamlined processes, efficient transport management and greater customer delivery visibility.

This resulted in inventory accuracy of more than 99 per cent, order-to-availability for same day shipping of more than 98 per cent, expedition of orders up to 99 per cent, reduction in claims and shipment errors to less than 0.1 per cent, reduction in order cycle time from 30 hours to less than 16 hours, shorter cash to cash cycles with greater monetary returns, reduced cost of corrective action, etc. Due to this, Spear Logistics has now entered into its ninth year of partnership with this company.