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TO LEAP OR NOT TO LEAP

Dear friends,

In my earlier blogs, I have shared my thoughts on the state of Logistics Industry; how it is growing at a fast rate and how it is poised to take the much-desired leap into the future. I have shared with you the expectations of the global community from Indian logistics industry and how, with the exposure to the multinational industries, we too are now stepping up to offer them our best, equivalent to our global counterparts.

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It is a rosy picture that the statistics show us; a fairy tale come true for the industry as a whole. But like all such tales, there is a twist waiting round the corner, trouble brewing in paradise, here as well! The trouble that I am talking about here is the typical ‘Caught-in-the-middle’ syndrome. Let me offer you an analogy to explain what I am about to share. Here is an example:

The Analogy

Vishnu Singh likes to eat out every Sunday and goes to his favourite local joint round the corner.  The atmosphere is charged with bollywood songs, animated conversations, brisk waiter quickly taking orders and serving food and he enjoys a meal at affordable price.

He gets a new project which makes him meet his clients in a posh hotel and he often has lunch with them. It is steep, but he enjoys the new ambience and gourmet fare. By force of habit, he still goes to the local joint on weekends, but now, he demands that the music be turned down, he is irritated with the family at the next table who is speaking loudly with each other and has children running all over the place. He is miffed that he has not even settled properly and the waited demands an order immediately. The food is quick to arrive and is full of oil and spices. He is completely put off by the experience!

What has changed? Actually nothing at all, except that he is now expecting Five-Star ambience at the local joint rates. Is it possible for the joint to cater to his expectations at the price they charge? Or inversely, would it be possible for the Five Star Hotel to service him at the local joint’s price points?

The Irony

It is a common phenomenon in upwardly mobile entities; be it an individual, business or a nation. We see the best and want it too, but are not able to come to terms with the price tag it comes with. It is the very same dichotomy that riddles the Infrastructure Industry today. On one side, the logistics industry feels the need to graduate to modern warehousing infrastructure and wants to rise above the ‘tin-shed’ mind set; but on the other, it is not able to come to terms with the price it comes at. Like our analogy, it is expecting the world-class infrastructure at the price of a tin-shed!

Isn’t this ironical? We are willing to put up with poor warehousing, damages and delays and over-all inefficiency – leading to a hit on our bottom lines just because it is cheaper and costs less; whereas by paying a little more, we can employ smartly and scientifically constructed warehouses, equipped to optimize operation costs.

The Math

The scientifically designed warehouses like Satvik offer increased storage capacities up to 2.5 times on the racking floor plate area, thereby saving 50% on rent.

Larger transparent roof (sky light) area saves power bills

Turbo ventilators and wider roads along the warehouse sides offer ease and comfort of operations.

Cross-Docking enables super fast turn-around time.

Standard fitments like street-lighting and fire-fighting systems at no extra cost saves installation and pre-operation costs, offer security, reliability and great value for money.

Rain water harvesting systems make them green and compliances with GNIDA, Pollution, Fire and House Tax etc offer complete reliability, no down time due to non-compliances, closures or seizures, resulting in peace of mind.

The mathematics is simple:

Cheap infrastructure = inefficiencies = higher operations cost = Short Term Gain

Modern Infrastructure = optimized operations cost = Long Term Profit

Caught In the Middle

In my earlier blogs, this is what I meant by ‘Giant Leap’. When we make a huge transition, it needs a shift of mindsets, beliefs and practices. It is ‘giant’ in both literal and figurative sense.  I hope this blogs makes it fairly easy to decide whether to leap or not to leap. Those who are ready to make the transition complete land on the other side, and those who don’t, unfortunately, are ‘caught in the middle’!

Published By: Vaibhav Rathi

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