27-07-2012, 10:05 AM
Pre‐feasibility Study for Development of Logistics Park
Pre‐feasibility Study.pdf (Size: 5.16 MB / Downloads: 194)
Introduction
Logistics is the management of the flow of goods and other resources between the point
of origin and the point of consumption in order to meet the requirements of consumers.
Logistics involves the integration of information, transportation, inventory, warehousing,
material‐handling and packaging.
Logistics is a general concept, which has different definitions for different industries. We
can also define logistics as a business planning framework for the management of
material, service, information and capital flows. It includes the increasingly complex
information, communication and control systems required in today’s business
environment. During the past decade, a large number of practitioners in many fields have
already identified that in the complex business setting they have to consider the impacts
of other organizations while making any decisions to improve their own performance. As
a result, the logistics is extended to the management of supply chains involving diverse
channel members (e.g., suppliers, manufacturers, distribution centers, retailers, etc.).
Since the channel members affect one another, supply chain (logistics) management
(SCM) represents a set of management processes, with an emphasis on the coordination
for supply chain improvement.
Logistics Service Providers (LSP)
Global production outsourcing has led to increased logistical challenges. The need for
efficient, time and cost‐effective supply chain management has created new
opportunities for integrated logistics providers.
Tracing the evolution of logistics outsourcing in recent decades, we find that, in the 1950s
and 60s, logistics outsourcing was limited to transportation and warehousing. The
transactions were mainly short‐term in nature. In the 70s, the emphasis was on improved
productivity, cost reduction and long‐term contracts, while value‐added services such as
packaging, labeling, systems support and inventory management were on offer in the 80s.
Since the 90s, outsourcing has picked up momentum, and more value‐added services are
being offered.
Global Scenario
For any country, the annual logistics cost varies between 9% and 20% of the GDP, the
figure for the US being about 9%. According to US‐based Armstrong & Associates, Inc., the
global logistics market is currently valued at USD 3.5 trillion.1 The US logistics market is
currently valued at USD 1 Trillion. The US logistics market is the largest for a single country
in the world capturing one‐third of the world logistics market, although most of the large
LSPs are headquartered in Europe. The logistics industry is growing very fast in south‐east
Asian countries due to a shift of manufacturing base and increasing volumes of exports
from these countries.
Indian Scenario
The Logistics market in India is currently valued at approximately Rs. 4.14 Trillion (US$
0.09 Trillion). It is growing around 8% to 10% per annum since 2002 and expected to grow
@ 12% per annum for the next 5 years.
The annual logistics cost in India is currently estimated to be 13% of the GDP. However,
the industry is growing at a fast pace and if India can bring down its logistics cost from
13% to 9% of the GDP (level in the US), savings to the tune of USD 50 billion will be
realized at the current GDP level, making Indian goods more competitive in the global
market. Moreover, growth in the logistics sector would imply improved service delivery
and customer satisfaction leading to growth of export of Indian goods and potential for
creation of job opportunities.
Almost 94% of India’s logistics market is accounted for by the unorganized sector such as
owners of less than 5 trucks, affiliated to a broker or a transport company, small
warehouse operators, customs brokers, freight forwarders, etc., and only 6% is
contributed by the organized sector.
Distribution Center/ Warehouse
Retailing is the interface between the manufacturer and the individual consumer buying
for personal consumption. It is the last link that connects the individual consumer with
the manufacturing and distribution chain. Indian retail spending is growing at double
digits (11.3% between 2006‐07 & 2007‐08) and the private final consumption
expenditure at current prices was estimated at Rs. 26,07,584