WAREHOUSING: TOMORROW – AS I SEE IT
If you are reading this blog, you obviously are interested in, related to or associated with the Supply Chain Management scenario. Amongst its many steps and components, I am specifically interested in and passionate about Warehousing. I build warehouses and I lease them. Easy, right?
Yes. Anybody can do it, especially if one has access to land. There is no rocket science to it. But then again, there is very little in it to feel passionately about it. My passion comes from the way I see tomorrow, and my passion comes from the possibilities I see in it.
The EY report on warehousing industry lists several factors as growth drivers and estimates the industry to grow at a CAGR of 25 – 30% in the next 5 years. These factors are:
Growing GDP: The report says that despite the downturn, the Indian GDP continues to grow at a significant rate. Growing GDP, increased population and improved purchasing power parity are creating new demand for warehouse space.
Maturing Industry Segments: Demand for high-end services and infrastructure, driven by greater presence of MNCs and maturity in rear-end user industries is creating new storage space requirements.
Growing External Trade: Rising exports – 13% CAGR between FY08 and FY13, rising exports – 14% CAGR between FY08 and FY 13 are supporting warehousing growth.
Rising Share of Organized Retail: This form of retail constitutes 8% of the total retail market, and is growing at a CAGR of 25% to 30% annually. As a result, it is expected to gain a higher share in the growing pie of the retail market in India.
GST Implementation: The Government plans to Phase out CST and introduce GST. The move would help logistics industry in re-arrangement of its and would enable manufacturers to store and distribute goods across the country without any state boundaries.
Future is all right, but what ails the present?
While I am bullish about the future too, I tend to think on slightly different lines. I question if our Industry is ready for this spurt? I question our preparedness to cater to the demands and standards of expectation of the multinationals companies that are integral to the rise of this industry. And above all, I question if we are willing and ready to play a role bigger than just providers of space?
This surge of opportunity demands planning if the industry is to benefit from it. The present scenario is far from prepared and is marred with several pitfalls. The warehousing industry today can be termed ‘Unorganized’ at best with its fragmented nature and low cost-barrier to entry. The government regulations are far from favorable at present and a disparate tax structure adds to the confusion, limiting the realization of manufacturer’s and distributor’s full potential.
Above all, the myopic approach to warehousing in terms of safety, security, modernization and allied services is responsible in keeping the industry from expanding its wings and taking off.
Back to the Future
Future is where my passion lies.
I see the warehousing industry evolving and driving a demand for organized players; modern, user-friendly facilities and allied services in contrast to today’s wall and shed contraptions. As the future trend points towards providing a combination of transportation and storage, and graduating to offer end to end solutions, my vision is to create value for customers through innovation. I look forward towards being a bridge between the present state of affairs and what the future demands. I aspire to raise the bar of what the warehousing industry offers to rise up and meet what the customer expects from the industry. I aspire to be able to achieve all this in the fervent hope
that tomorrow, when the future is upon us, we are ready to say hello!