Covid-19 increased respectability for outsourced operations management in India

AAJ Enterprises is a third party logistics (3PL) and warehousing management company with space of more than six lakh sq ft across Greater Noida, Sonipat, Bengaluru, Kolkata, Mumbai. Anamika Jain, director of operations at AAJ Enterprises, is discussing her view on the Indian logistics industry, how AAJ is growing, innovations they did during Covid-19 lockdowns, the e-commerce boom, technological solutions and what we could expect from her in the next five years.

Tell us how do you perceive the Indian logistics industry and the market as well? How are they evolving particularly before and after the Covid-19?
Today, the logistics industry is the sunshine sector of India. It is believed that it will be the fastest to recover from the Covid-19 crisis. If I compare with the developments in the western part of the world, India has a long way to go. The current logistics costs at the economy level are double compared with the other developed countries. But there is positive progress and India has huge potential. Especially after Covid-19, I have seen that the respectability for outsourced operations management has increased in India, especially in small and medium-sized companies.

"We are in all major metros and most of them are large scale facilities with good infrastructure offered on a shared basis to our clients."

How AAJ Enterprises is positioned in this market and how you want to increase your company's market share in the next five years?
I think AAJ is perceived in the market as capable of managing very complex warehousing needs. We are currently managing more than 70,000 SKUs across our facilities. With the shift towards sale on online platforms after Covid, we started to manage end-to-end transportation with rigorous appointment deliveries. So, I would like to believe that we are positioned in the market as a technology-driven, value-focused, customer-focused and flexible supply chain partner.

AAJ Enterprises has grown from 1,20,000 sq ft warehousing space in 2014 to now six lakh sq ft. How many facilities you have and how well they are positioned in proximity to your clients?
We are in all major metros and most of them are large scale facilities with good infrastructure offered on a shared basis to our clients. So they have zero capex investment and we are able to offer them fully variable pricing.

On average, our facilities are approximately one lakh sq ft and they are managing multiple clients from multiple industries. And these facilities are equipped with the state of the art infrastructure. All of them are running on mobile technology, they are connected with our web servers. So, our customers are able to see the live feeds. Because we are present in all the major metros, we are able to offer deliveries in between three to five days at max anywhere in India. With the kind of presence we have, if a client wants to use our multi-channel, multi-location facilities, they are able to deliver and reach any part of India in three to five days.

Give us an idea about your clients. Who are your clients? What do they expect from you and how you deliver?
Out of the top 12 publishers in the world by revenue size, eight are our clients and we have many market leaders as clients in medical equipment and construction equipment and other industries. Last one and a half years we have added many start-ups and medium-sized companies also into our client list for which we are providing omnichannel warehousing solutions for trade distribution as well as e-commerce distribution. So, we have a diverse list of clients.

"We are already working out technology to link our warehouse management system (WMS) with all major e-commerce platforms so that our customers can get a very seamless and fast experience under one system under one roof."

Consolidation of return management is where AAJ enterprises did some innovations and had some breakthroughs during the lockdown. Tell us about the importance of this particular achievement?
Interestingly returns management is part of most businesses, but it is also often neglected in operations management because the focus of all innovations generally remains on reducing the order processing time. So, after the lockdown was announced, we knew that many distributors and online platforms, to which we had supplied, will have the unsold inventory with them because of the sudden lockdown. So we expected that to be returned back once the lockdown was lifted. We wanted to solve that problem of potential high returns immediately after the lockdown. So we came up with this idea to start a dedicated facility for multiple clients just for returns management, and a new technology to support that. And in June 2020, we started this new facility of returns management. Thus far we have already processed more than 2 million units of returns from this facility. And this we have done with good speed and accuracy.

Where is this facility and to whom it is catering?
We have started the first facility at NCR and it is catering to NCR. The returns are coming from pan India. The clients, for which returns were coming to their mother hubs, are now sending returns to this new facility. As the requirement increases we might expand to the other metros too.

The logistics industry was one of the most affected during lockdowns. How this affected your company and how you manage to move on?
Our operations are directly correlated with how well our clients are doing in their industry and business face. But despite the lockdown, I would say we were the first ones in our vicinity to open warehouses. We were operational from the date government announced that warehouses can open and start functioning. We were the first ones to respond to our clients and to get the required permissions.

E-commerce companies like Amazon and Flipkart are building both large and small fulfilment centres in many parts of India, a post office like system. How AAJ Enterprises is positioned to benefit from booming e-commerce?
Most of our warehouses are omnichannel warehouses. We cater to distribution, normal trend distribution, retail distribution and online distribution. But we are seeing that the focus is shifting towards e-commerce sale. We are already working out technology to link our warehouse management system (WMS) with all major e-commerce platforms so that our customers can get a very seamless and fast experience under one system under one roof. In the last one and a half years, we have taken up e-commerce management for many new clients. We are well connected and are able to reach most fulfilment centres in less than five days.

"And we are providing that live data to our clients through an online platform where they are able to see the live status of their orders, their transactions, their inventory in real-time."

Tell us about how intelligent your facilities are in terms of integrated WMS, automation or other technology solutions like RFIDS.
All our facilities are Wi-Fi enabled and they all use mobile technology barcode scanning technology. Irrespective of the size everything from inward to gate pass is captured through barcode scanning and it is directly linked with WMS which sits on the cloud server. And we are providing that live data to our clients through an online platform where they are able to see the live status of their orders, their transactions, their inventory in real-time.

Tell us what we could expect from you in the next five years in terms of warehousing space and other technology developments?
In our organization, approximately 25 percent is that of labour. So, it remains of utmost important importance that we optimize that cost. But unfortunately for most operations today, labour productivity measurement is restricted to excel sheets. And we believe that we can change it if we are capturing data about labour productivity through live feeds. We are working on new technology to be able to do that. And I think in 2021, we will be able to come to the market with technology not just for our own operations, but the operations of our clients and also for the operations of any other 3PL company that wants to bring more efficiency in their ecosystem, thereby reducing the overall cost of operations which ultimately will benefit the customers.

Apart from that, we are planning to start a large scale shared facility in NCR in 2021 built on green energy, so that we also foster our goal of sustainable development.