CARGOTALK has collaborated with Triton Logistics & Maritime (Abrao Group Company) to present series of podcasts, which are titled ‘TriNext.’ Jitendra Srivastava, CEO, Triton Logistics & Maritime moderated the inaugural podcast, while Anil Mishra, Head, National Logistics, Pladis Global, was the speaker.
CT Bureau
The FMCG industry is the fourth largest sector of the Indian economy. Right from US$145 billion industry in 2022, it rose to US$165 billion in 2023 and with a cumulative growth rate was 21.6 per cent. This industry is poised to become a US$600 billion industry in 2027, leading to become a thousand (2:05) billion industries in 2032.
In fact, the growth of Indian FMCG sector is faster than the international growth in the FMCG sector. There are several factors responsible for this growth, including government initiatives and policies, burgeoning rural market and youth population, global brands entering India and the rise of e-commerce platform.
To leverage that, Fast Moving Consumer Goods (FMCG) companies are integrating AI across the entire value chain, right from producing to distribution, investing into smart contracts and blockchain traceability to address supply chain bottlenecks. This session also highlighted the insightful and significant points about the discussion.
Current trends
The FMCG logistics sector in India has transformed after Covid-19. The industry started manufacturing products as per demand, this was when the pandemic was at its peak. For example, retail brand, ZARA, started manufacturing face masks and hand gloves. Pladis Global was no different—we observed and analysed the demand and market conditions, accordingly, invested in innovation and timely deliveries. We cater to the food sector, so last-mile delivery played a crucial role for us. We ensured timely delivery by investing in supply chain robustness and resiliency. Our staff was active, our warehouses were operating 24×7. We were doing exports. The only lesson we learnt during the crisis was, we must have a Plan B ready to deal with any unforeseen crisis, Anil Mishra, Head, National Logistics, Pladis Global, said.
He said, cent per cent digitalisation became the lone option to survive during those challenging times. The industry understood the crucial role of technology to understand and analyze the demand and started adopting various advanced technologies such as AI, ML, Block Chain, Data Science. It was during the pandemic that technology started growing at a faster pace and will continue to do so.
Last-mile delivery
Last-mile delivery (LMD) has become super critical. As they say, avshakta hi aavishkar ki janani hai. A decade ago, this was not the scenario. e-commerce has grown immensely in the past one decade. Back then, customers would wait for one week to get their products, but now the trend is either same day or next day deliveries. But for FMCG, it is hardly 10 minutes delivery.
This trend has levelled up the production and distribution activities, and LSPs play a crucial role when it comes to distribution, they use all sorts of modes available to transport the goods on time, be it road, rail, air or sea. Competition is high. Customers go for brands promising same day deliveries. This is possible with robust, compliant and efficient supply chain. Brands have also been focusing on re-branding and innovating their services to satisfy customers.
Current bottlenecks
Last-mile deliveries, distribution, and high costs, I would say, are the biggest challenges in this sector, Mishra said. If we talk about domestic distribution, or imports there are different set of challenges. If a specific product or products are not available in a certain city, especially remote locations, then delivering them becomes a challenge. There is huge distribution cost involved, which every manufacturer bears. So sometimes it becomes challenging for us to how to make customers happy by increasing the product’s supply. In such situations, we re-design our network and distribution strategies. In some cases, profitability issues are also there because of which product is not supplied to that location. For cold chain products, maintaining temperatures throughout is still a challenge. We still cannot receive ice-creams in a perfect condition especially during peak summers.
Global FMCG status
During the pandemic, we faced several challenges and setbacks. We could not export our products for months and there also was shortage of inventory and staff, which impacted our freight. After Covid-19, things became slightly better, we regained our business in foreign countries, we increased our production levels, but then there were other crises such as Russia-Ukraine war, which impacted our business. Our containers lay for days at the ports, the cost was high and there were huge delays. Next was Suez Canal crisis, which also did not let business move smoothly for us. We could only think of best contingency plans to deal with such situations. The global trade was down, no doubt but few domestic issues also emerged during that time such as Kisan Andolan (farmers’ strike), which continued for months. During such disruptions, as an LSP, we look for solutions, understand your products, know your KPIs and then deliver it accordingly. The brand’s image is at stake, so it is important responsibility of the LSPs to come up with out-of-the-box solutions and ensure timely deliveries despite disruptions, he added.
We at Pladis Global have different set of customers. Our products are liked by women, children and elderly. To meet their expectations, our team does proper R&D, understand and analyse consumer behaviour, market trends and then based on that, we develop our products. During the pandemic, everyone looked for the healthier options, so we started producing McVitie’s Digestive High Fibre biscuits.
Govt initiatives
Today, logistics industry has got its well-deserved recognition globally. The government has introduced initiatives such as, Prime Minister Gati Shakti, NLP and Make in India, among others to boost trade, but implementation and execution matters. The government is also actively supporting sustainable developments, which is noteworthy.
Outlook
The future is bright, because urbanisation is increasing, and e-commerce is driving growth. Digitalisation will grow by leaps and bounds. In fact, the rural penetration is also high. Products are reaching out to the hinterlands. When the products move from the urban area to rural area, new network and route optimisation increases. Sustainability is the key. Focus is more on delivering products without impacting the environment.
