The term Logistics originated in late 19th century from French words ‘Logistique’ or ‘Loger’ which means Storage. Word Logistics was popularized by Antoine-Henri Jomini, a swiss military strategist and a celebrated writer, particularly through his book ‘The Art of War’. In his writings, he has described logistics as the practical art of movies armies.
With the world turning GloCal (Global + Local) and eternal emphasis on sustainability, logistics has taken centre stage on many of the high-grade discussions globally.
Definition of Supply Chain has been evolving to fit the need of the time but essentially includes all the activities that connect the dots between demand and supply within and across organisations. And within Supply Chain, Logistics covers Fleet management, Warehousing, Network Designing, Inventory management, Materials management etc.
Coming to the Indian story of Logistics. Although Logistics contributes 14.4% to GDP of India, it costs 14% of the GDP at the same time. When the global average Logistics cost to GDP is 8%, India has multiple avenues for improvement in this sector. As per McKinsey Global Institute predictions during pre-Covid times, India’s logistics sector was expected to reach $ 320 Billion by 2025. But with plethora of unknown and known unknowns, predictions need a recalculation.
Logistics in India has been innately unorganized and fragmented. So are the efforts towards developing this sector. The changes in consumer space such as advent of ecommerce, brick and mortar stores going for e-tailing, emergence of 3PLs and its successors, growth in consumptions of tier-2 and tier-3 cities etc. saw some detached improvements in consumer-centric aspects of Logistics. However, ‘The rising tide lifts all boats’ moment for logistics sector in India cannot be achieved without a robust infrastructure on ground. And this requires a dedicated drive and widespread participation of the Government in development and integration journey of Logistics Sector in India.
In last demi-decade, Government of India has institutionalised the integrated development of Logistics sector in the country by multiple means. Few such adopted means are the Sagarmala Programme approved in 2015, establishment of Logistics Division within Dept of Commerce in July 2017, launching of Logistics Ease Across Different States (LEADS) study in 2018, launching of PM Gati Shakti National Master Plan in Oct 2021 and, now, the National Logistics Policy 2022 as notified in Sept 2022. Optimum inclination towards digitization, a policy framework which is inter-ministerial and cross-departmental through Comprehensive Logistics Action Plan, addressing internal as well as cross-border trades using all modes, indigenisation focus through ULIP, BISAG-N…. sounds logical so far.
Written By: Rahul Ojha, Sr. Consultant, Invest Punjab | Govt. of Punjab.
DISCLAIMER: Views expressed are personal.