Auto SCM summit 2016 deliberates on transforming future of India's auto supply chain
The Indian automotive industry is experiencing an interesting evolutionary phase, the AUTO SCM summit played a perfect platform to bring together stakeholder from across the globe to network and discuss business. The maiden automotive supply chain summit with its vibrant panel discussions were much appreciated and delegates sensed the need for more such informative conferences for better networking and knowledge sharing.
The first edition of AUTO SCM Summit organised by Indian Transport & Logistics News (ITLN) held from December 6-7, 2016 at Courtyard Marriott Chakan, Pune received an overwhelming response from industry stakeholders. The event was supported by Frankfurt Airport and IndoSpace. The theme of the maiden summit was ‘Transforming the future of India’s automotive supply chain’. The two-day long event witnessed around 100 delegates including supply chain managers of automotive manufacturers and logistics service providers sharing their views and experiences on various industry related topics.
The long-term growth story is strong, but short-term volatility is creating an environment of uncertainty. India is the sixth largest automotive producer in the world (with an average annual production of 24 million vehicles in 2016, of which 3.6 million exported). India is the second largest two-wheeler manufacturer and the largest motorcycle manufacturer. The automotive industry accounts for 45 per cent of the country’s manufacturing gross domestic product (GDP), 7.1 per cent of the country’s GDP and employs about 19 million people both directly and indirectly. By 2026, India is expected to be the third largest automotive market by volume in the world.
Making an opening remark, Dirk Schusdziara, Senior Vice President Cargo, Fraport AG, said, “Efficient supply chain management is increasingly becoming a survival factor for the industry. We are proud to support the first gathering of this kind. Cooperation between all the partners in the supply chain is crucial to remain competitive. Moreover, it helps us to identify the demands of the industry to support them wherever we can.”
Germany is India’s biggest trading partner in Europe. Consequently, India is also a very important market for Frankfurt Airport. More than 70 passenger flights and around 20 freighter services are operated weekly between FRA and several destinations within India. In the year to October 2016, cargo volumes on routes to and from India increased by more than 20 per cent year-on-year.
The summit deliberated on topics including transforming the future of India’s automotive supply chain, future of India’s automotive export scenario and challenges ahead; enhancing auto components supply chain; finished vehicles logistics; aftermarket supply chain: challenges and opportunities and transforming the future of supply chains through disruptive innovation. The panelist dwelled on the impact of GST on automotive industry.
Panelist on the session ‘Enhancing Auto Components Supply Chain’ were Santosh Bhanu, Manager, Supply Chain, Ford India; Nikhil Khairnar, Sr. Manager, Logistics and Sourcing, Supply Chain Management Division, Tata Autocomp Systems; Pramod Kumar, Head of EDC Maharashtra & Goa, Gati KWE and moderated by Muralidhar Wadappi, Head of Supply Chain Management, Benteler Automotive India.
The session discussed on how competitive and prepared are Indian auto component manufacturers and their logistics partners to create a more visible, agile global supply chain. Bhanu stressed that two important factor for development of supply chain is technical team and timely delivery. He added, “Avoiding ambiguity will ensure smooth flow in the supply chain. Consolidation is the way forward but not at the cost of service. Continuous innovation and improvement is the key to move forward.” Kumar agreed, “Enhancing the supply chain is important. Vendor Managed Inventory is a traditional concept and Vendor Owned Inventory (VOI) will be the next age concept. Maintaining service level at the same time in a cost-effective manner is the key.”
The session ‘Finished Vehicle Logistics’ focused on how the speed to market and safe delivery to end customer bring with it a lot of complexities where logistics has a critical role to play. The inadequacy of infrastructure has by far been the biggest challenge in the transportation of finished vehicles. Also, the adoption of technology in most supply chains in India is still very much in its infancy. With rising demand for vehicles and bulk of the road network being poorly paved, there is a pressing demand to improve infrastructure to support intermodal services.
The session was moderated by Rakesh Pathak, Professor of Supply Chain & Logistics Management, International Institute of Management Studies, Pune and among the panelist were Nidhish Kuchhal, General Manager, Logistics, Mahindra & Mahindra and Jiten Munot, Head Sales Admin & Logistics, Force Motors. Kuchhal informed, “Multimodal logistics definitely will be the way to go. It will play very effective role post GST. Collaboration between the partners in the supply chain is the way to go. Adoption of technology is important. Inadequate infrastructure is the bottleneck.” Presently, there is high dependence on roads and only 40 per cent on railways. Once dedicated freight corridor will be commissioned there will be high dependence on railways. In addition, coastal shipping needs to be encouraged. Awareness about inland waterways will reduce pressure on roads and reduce carbon footprints. Munot said, “Efficiency and effectiveness of the system will increase with advent of technology. Post GST will be a success story for logistics.”
The session on ‘After Market Supply Chain: Challenges and Opportunities’ was moderated by Pankaj Chandak, Head, After Sales & Parts, FCA India Automobiles. Among the panelist were Rakesh Pathak, Professor of Supply Chain & Logistics Management, International Institute of Management Studies, Pune and Mandar Palsule, Head of solutions, Spear Logistics.
The session discussed thin line between “DIFM” (do it for me) and DIY (do it yourself) segment. DIFM constitutes a majority of aftermarket size due to the increasing capacity of repair requirements and the after-sales service mechanism offers a huge growth potential for logistics. Collaboration is becoming an increasingly common trend, as aftermarket players realise the efficiencies of combining forces with other businesses – at times, even direct competitors - for greater efficiency. The panelist focused on how academics help in collaboration and making of future leaders. Pathak stressed that the best option is collaboration rather than competition. He stated, “Collaborate to compete.” The industry need to understand the changing consumer behaviour and accordingly adopt the changes. Chandak informed, “Supply chain depends on two important factors delivery and service levels. Managing both at the same time is a herculean task.”
The session on ‘Transforming the Future of Supply Chains Through Disruptive Innovation’ was moderated by Reji John, Editor, ITLN and among the panelist were Suhail Kazi, Deputy Commission Customs, Pune; Pankaj Narang, General Manager, Central Purchase, Supply Chain Management Division, Tata Autocomp Systems and Dirk Schusdziara, Senior Vice President, Cargo, Fraport AG. Kazi. The session discussed on the new concepts like Internet of Things, advanced robotics and driverless electric automobile and impact of 3D printing on the auto supply value chain. Kazi said, “Being in govt, it is very difficult to bring innovative disruptions. Incremental approach from the government can be expected.”
