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    In India the total logistics costs constitute nearly 10 percent of the GNP out of which nearly 40 percent is because of transportation alone. Only 20 percent of the surfaced roads are estimated to be in good condition. Commercial vehicles in India are able to run only 250 km on average per day as compared to 600 km in developed countries.

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    ITC - SCM

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    In India the total logistics costs constitute nearly 10 percent of the GNP out of which nearly 40 percent is because of transportation alone. Only 20 percent of the surfaced roads are estimated to be in good condition. Commercial vehicles in India are able to run only 250 km on average per day as compared to 600 km in developed countries.

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    35 views4 pages

    Itc - SCM

    Uploaded by

    vibhortulsyan
    In India the total logistics costs constitute nearly 10 percent of the GNP out of which nearly 40 percent is because of transportation alone. Only 20 percent of the surfaced roads are estimated to be in good condition. Commercial vehicles in India are able to run only 250 km on average per day as compared to 600 km in developed countries.

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    of 4

    Infrastructure challenges in the FMCG

    Supply chain

    Hyderabad
    4th October, 2008
    ITC FMCG Supply chain

    • Consists of diverse categories with different priorities


    • More than 1000+ SKUs
    • Buying Value $68 MM
    • Warehousing space of more than 3.5m SFT around 55+
    locations
    • Products manufactured at 45+ plants
    • More than 650 trucks moved every day
    • Direct distribution from factories to Distributors.
    Indirect movement through RDCs
    • Combination of Rail/Road/Sea movement within the
    country depending on the product type.
    (Target is Safer, Faster, cost effective)
    What are the issues we are facing

     Warehousing
     Absense of Bigger /designed
     Government support Warehousing warehouses in the Pvt sector .
     Increasing Toll booths  B class cities have no
    pushing the costs/TATs warehouses.
    upwards.  Govt Warehouses more
     Govt funds for Infra/Road focussed on the commodities
    Development reducing
    every year.
     Support on Rail unclearGovernment Poor Infra Transportation
    support
     Transportation
     Supply lesser than the demand
    in most of the markets thereby
    pushing the costs up.
    Skilled WSPs
     Transporter profile skewed
    Pockets of excellence. Not even a
    Skilled towards the small truck
    single player with a PAN India foot WSPs owners/Brokers
    print.
     Poor Road connectivity
    Too costly to the FMCG items.
    pushing up the inventory
    High rate of Attrition due to the
    across the Supply Chain.
    emerging opportunities
     Non Availability of Rakes
    /Wagons as per requirement
    • Studies reveal that in India the total logistics costs constitute nearly 10 percent
    of the GNP out of which nearly 40 percent is because of transportation alone. In
    the U.S., the estimates show that the cost is around 6 percent of the GNP
    • India has one of the largest road networks in the world (over 2.9 million km at
    present).
    • only 20 percent of the surfaced roads are estimated to be in good condition. This
    compares unfavorably with other countries (Indonesia and Brazil 30 percent,
    Korea 70 percent, Japan and U.S. more than 85 percent).
    • Commercial vehicles in India are able to run only 250 km on average per day as
    compared to 600 km in developed countries

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