NEWSROUNDUP
India
A roundup of news relevant to
operations in India
Retailers trim supply chains as
demand, sales dip in India
Stung by poor consumer demand and
falling sales, Indian retail chains are tight-
ening their supply chain and logistics. Ma-
jor players like Future Group, RPG Retail
and Shopper’s Stop have kicked off mul-
tiple initiatives like automating processes,
working closely with vendors to bring
down waste and implementing automatic
just-in-time stock replenishment systems,
and are seeking ways to reduce costs on
Ratan Tata pictured on the right. Tata Motors, a leading Indian Industrial
warehousing and transportation. giant, bought Jaguar Land Rover in 2008.
India’s largest retailer, Future Group,
has shut down around 20 smaller ware- Jaguar Land Rover (JLR) to step up to 14 per cent of production cost and
houses to consolidate into bigger ones. It up auto component sourcing we must bring it down to the world average
is partnering with vendors in the garments from India of 6-7 per cent to be able to compete ef-
and general merchandise segments to Jaguar Land Rover, which is now owned fectively in the global market,” Singh said.
reduce inventory holding and distribution by Tata Motors, is firming up plans to en-
points. The company has also initiated hance its global supplier base in India, as Logistics companies in a slow
talks with transport operators to configure it struggles to cope with a sharp slump in mode
trucks and route networks to optimise the demand for luxury cars and sport utility The impact of sluggish growth in the
process. vehicles. According to sources, there will domestic economy, coupled with a vis-
“Through all these initiatives, we have be an increasing number of Made-in-India ible slowdown in India’s exports (which
managed to reduce costs associated with components in Jaguar Land Rover prod- declined 7.9 percent year on year) has re-
the supply chain by 0.5-4 percent of to- ucts. sulted in a marked fall in growth reported
tal sales across retail formats.” said An- Despite stiff competition from countries by seven leading logistic companies. The
shuman Singh, CEO of Future Logistics, a like China and Mexico, India is increasingly companies -- Container Corporation, All-
group company that handles supply chain becoming a sourcing base for auto makers cargo, Gateway Distriparks, GATI, Trans-
for all stores. Shopper’s Stop CEO and seeking completely built-up units (CBUs) as port Corporation of India, Blue Dart and
executive director Govind Shrikhande said well as outsourcing of components. Global Aegis Logistics -- reported a growth of
the company is exploring options for joint automobile majors like Hyundai, Ford, just 4.5 percent year on year in their net
planning with vendors to improve supply Skoda, Suzuki, and Mahindra have made sales in the December 2008 quarter, as
chain. “A tight supply chain, no doubt, India a manufacturing base for particular compared to a 14.4 percent year on year
helps to improve cash flows in tough times models of cars. At the same time, other growth in the trailing four quarters ended
like now,” he said. multinationals like Toyota, GM, Fiat, Volk- December 08.
- The Economic Times swagen, Renault and Daimler are making
India a hub for components. Chennai terminal to start opera-
tions by end-April
India needs to cut down logistics A second private container terminal at
cost India’s Chennai port will start operations at
India needs to focus on setting up world the end of April. The Chennai International
class infrastructure facilities to drastically Terminals Pvt Ltd (CITPL), a joint venture
cut down logistics and transport costs for between Port of Singapore Authority (PSA)
enjoying better domestic and foreign mar- and Sical Logistics, will start operations
ket for its goods, Union Minister of State with a quay length of 400 metres, accord-
for Food and Public Distribution Akhilesh ing to K Suresh, chairman of Chennai Port
Union Minister of State for Food
and Public Distribution Akhilesh
Prasad Singh said. “India today has one of Trust.
Prasad Singh the highest costs on logistics that extends
28 MAY/JUNE 2009 www.chainaonline.com
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