Praveen Garg, Head - Logistics, Bharathi Cement
Indian cement industry still has separate vendors for primary transportation, last mile delivery and supply chain planning. Big 3PL and 4PL players are yet to come in cement logistics that can provide end-to-end solution, says Praveen Garg, Head - Logistics, Bharathi Cement. Excerpts from the interview...
What are the major challenges in keeping transport costs down in the cement industry?
Major challenge is the absence of large organized players who can provide end-to-end solution for cement transportation and distribution. For road transport, limited width of the road and restriction on high capacity truck transport (>40 tonne/truck) is one of the major bottlenecks to bring down the freight cost.
For rail, the major challenge is low level of automation resulting in huge manual handling cost and cost of last mile connectivity. High level of innovation is required in rail wagons to bring in automation and make this mode more efficient. We have hub-and-spoke model for distribution of our products. RFID and GPS technology for real time tracking of trucks and reducing the turnaround time for our trucks are some of technological interventions done by our company for enhancing logistics efficiency.
What was the value creation in terms of overall plant and logistics management and how this will help serve your customer better?
Improved packaging (laminated and paper bags), on-time delivery and real time visibility of all the deliveries/trucks (inside and outside the plant) are value creation in terms of overall plant and logistics management. This value creation obviously gives competitive advantage as customers get better quality bags on time and they can track their delivery real time.
Is your company currently investing in any other logistics-related optimization projects?
We have already invested in aggregate planning and optimization software tools. We are exploring for setting up bulk cement terminal near to major cement consumption centres to optimize our logistics cost and to improve customer service level.
What are your views about outsourcing logistics functions?
At present, Indian cement companies are doing major activities in-house like manufacturing, procurement, logistics, and marketing and technical services. There is scope to outsource some activity where expertise is less and focus on core activity which can either be manufacturing or marketing etc. If any company has less expertise in logistics, outsourcing is the best solution to have competitive advantage and better efficiency level.
What are your future plans for the company to improve your supply chain efficiency?
We want to go for palletisation for cement bag loading/unloading and transportation. This step will give customer best-in-class cement bags along with different bags SKU (25 kg bags). We also want to introduce 3PL vendors for our complete supply chain to have better efficiency level.