Industrial Automation Magazine India

Need to bridge the competitiveness gap in Indian supply chain

Published on : Wednesday 23-12-2020

The Indian supply chain must effectively bridge its competitiveness gap of USD 180 billion CII-Arthur D Little report.

New Delhi, December 22, 2020 – India's supply chain and logistics sector is one of the largest globally, with a logistics industry of USD 215 billion, growing at a CAGR of 10.5 percent. However, despite its size and criticality to economic growth, India's supply chain faces several barriers to growth notably an unbalanced logistics modal mix, high indirect costs, fragmented infrastructure and networks, and limited technology adoption.

A new report by Arthur D Little and the Confederation of India Industry (CII) highlights the need for immediate attention given the high logistics cost of 14% of GDP in India compared to 8-10% of GDP in the US and Europe.. Titled Reimagining India's supply chain: A bold vision for 2030, the report, brings to light these issues and sets a bold Vision 2030 and roadmap for ensuring global competitiveness of India's supply chain. The report was released by Mr. Pawan Kumar Agarwal, Special Secretary (Logistics), Government of India, at the CII National Packaging Conference today.

The report details the improvements needed to make India's supply chain competitive. It provides a glimpse of learnings from around the world, presents five imperatives for the Indian supply chain, and sets aspirations to achieve Vision 2030. It also brings to light the vulnerabilities that the supply chain network is exposed to if transformative actions are not taken.

"To bridge the current competitiveness gap of USD 180 billion, India needs to halve logistics cost from 14 percent of GDP to 7 percent" says Barnik Chitran Maitra, lead author of the report and Managing Partner of Arthur D. Little India and South Asia. "The supply chain industry in India needs to be reimagined and efforts need to be made to move towards creating an optimized and digitized logistics ecosystem, a delayered distribution system and a green, resilient and flexible supply chain. The reimagined supply chain will help realize the Honorable Prime Minister's Atmanirbhar Bharat vision and supplement Make-in-India and Start-up India strongly, catering to the global supply chain," he adds.

Thomas Kuruvilla, Global Board Member and Managing Partner of Arthur D. Little Middle East, says, "To manage the supply and demand shocks in the supply chain, India needs to find new ways of doing businesses and bring innovation into their planning and operations". "The report discusses at length international learnings that Indian supply chain leaders could take inspiration from," says Kuruvilla.

Harinarayanan S, a supply chain expert and facilitator of the CII-Supply Network & Procurement Forum, as well as one of the co-authors of the report, states, "A  national supply chain taskforce with five working groups will focus on the crucial dimensions of supply chain operations across the sectors of relevance. These groups will meet monthly under the leadership of CII and Arthur D. Little to realize the aspirations set in the Vision 2030 report."