2. LOGISTIC POLICY
• The goal of the National Logistics Policy is to lower the cost of logistics from
its current 14% of GDP to less than 10% by 2022 despite the highly
fragmented nature of India's logistics industry. The policy aims to make Indian
goods more competitive while also promoting economic growth and expanding
job possibilities.
3. TYPES OF LOGISTICS
• Logistics can be split into five types by field: procurement logistics, production
logistics, sales logistics, recovery logistics, and recycling logistics.
• There are many types of logistics. The most well known type is sales logistics that moves products from
the producer to the consumer. In addition, there are a number of other types of logistics, such as
procurement logistics which is the flow of raw materials and parts, production logistics which is the flow
of materials inside a factory or business, recovery logistics which is the return flow of returns from
consumers and waste, and recycling logistics which is the flow of recyclable materials. This section
describes the types and fields of logistics in depth.
4.
5. INDIAN LOGISTIC POLICY
• “Goods should move quickly like a cheetah”: PM Modi launches National
Logistics Policy, says it will give speed to India’s development journey
• The National Logistics Policy is aimed at promoting a seamless movement
of goods in the country and enhancing the competitiveness of the
industry.
6.
7. • To boost the ease of doing business and enhance the liveability quotient, Prime Minister Narendra
Modi launched the National Logistics Policy (NLP) on 17th September 2022 in Vigyan Bhawan, New
Delhi. The policy aims to lower the cost of logistics from the existing 13-14% and lead it to par with
other developed countries. This will increase the competitiveness of Indian products in both the Indian
home market and the international market. Moreover, the reduced cost will also increase efficiency
efforts cutting across all sectors of the economy, which encourages value addition and enterprise.
• National Logistics Policy revitalises many fields. Today, India is preparing the ground before
introducing any policy; only then can a policy be implemented successfully. NLP took eight years to
develop. Policy shifts and major decisions are being made to quick last-mile delivery, ending transport-
related issues, saving manufacturers time and money, and preventing wasting agricultural products.
Coordination improvements will boost sector speed, value creation, and entrepreneurship.
8. NATIONAL LOGISTICS POLICY IN INDIA
• The National Logistics policy is a comprehensive effort to address cost and inefficiency by issues lying down an overarching interdisciplinary,
cross-sectoral, and multi-jurisdictional framework for the developing entire logistics ecosystem. The goal of this policy is to make the logistics
industry more efficient and lower its costs. The strategy aims to boost economic growth, provide employment opportunities, and make Indian
products more competitive in the global market.
• The goal of the Prime Minister is to create a modern infrastructure of a world-class standard by including all relevant stakeholders in the
process of holistic planning and implementation. This will allow for greater efficiency and synergy during the project's execution. In this
regard, the Prime Minister's initiative, PM GatiShakti, also known as the National Master Plan for multi-modal connectivity, which was
introduced in the previous year, was an essential first step. Establishing the National Logistics Policy will support the PM GatiShakti
initiative and complementarity.
• The backbone of India's international trade is logistics, which aids in the diversification of not only the country's exports but also of products
manufactured in the countries. The NLP thus aims to promote seamless movement of goods and enhances the competitiveness of Indian
industries. Also, it seeks to reduce the logistics cost from 16 per cent of Gross Domestic Product (GDP) to a global average of 8 per cent by
2030. Further, as per the estimates, the worth of the Indian logistics market will be around $ 215 Bn in the next two years compared to $ 160
Bn. Investment Information and Credit Rating Agency of India Limited (ICRA) estimates that the sector will develop at a Compound Annual
Growth Rate (CAGR) of 10.5 per cent through 2025 after growing at a CAGR of 7.8 per cent over the past five years. This sector employs more
than 22 million people in India, which through skill development is expected to grow at the rate of 5 per cent in 5 years. The four significant
steps to be undertaken for NLP include:
9. PROCEDURES
• Integration of Digital System (IDS): There will be digital integration of different systems of
seven various departments (like road transport, railways, aviation, commerce ministries and
foreign trade)
• Unified Logistics Interface Platform (ULIP): This ensures shorter and smoother cargo
movement and enables the exchange of information confidentially on a real-time basis. This
National Industrial Corridor Development Corporation (NICDC) Logistics Data Bank Project has
been leveraged.
• Ease of Logistics (ELOG): will enable and ensure the ease of logistics business through
transparency and accessibility
• System Improvement Group: will monitor all logistics-related projects regularly
•
10. PERFORMANCE
• In Sep,2022 Prime Minister Narendra Modi unveiled the policy which seeks to
cut transportation costs by promoting seamless movement of goods across the
country.
• While launching the policy, the prime minister had said that "from 13-14 per cent
(of the GDP), we should all aim to bring the logistics cost to single-digit as soon
as possible".
• An official statement said that the policy is targeted to reduce cost of logistics in
India to be comparable to global benchmarks by 2030; improve India's ranking in
the Logistics Performance Index from 44th in 2018; and create data-driven
decision support mechanism for an efficient logistics ecosystem
11. • The target is to place India among the top 25 countries by 2030, Information and Broadcasting Minister Anurag
Thakur told reporters while briefing media about the policy.
• It added that to monitor its implementation, the policy will utilise the existing institutional framework - Empowered
Group of Secretaries (EGoS) created under the PM Gati Shakti national master plan.
• The EGoS will also set up a Services Improvement Group on the pattern of network planning group for monitoring of
parameters pertaining to processes, regulatory and digital improvements in logistics sector.
• Focus will also be on enabling adequate development of warehouses, promotion of standards, digitization and
automation across the logistics value chain and better track and trace mechanisms.
• Important initiatives under the policy include the Unified Logistics Interface Platform (ULIP), the Ease of Logistics
Services platform, and e-handbook on warehousing.
• Fourteen states have already developed their respective logistics policies and for 13 states, it is at the raft stage.
12. STANDARDS
• The need for a national policy was felt since the logistics cost in India is higher when compared to other developed economies in the world.
Reduction in the logistics cost improves efficiency cutting across various sectors of the economy, while encouraging value addition and
enterprise.
National Logistics Policy is a comprehensive effort to address the issue of high cost and inefficiency by laying down an interdisciplinary, cross-
sectoral and multi-jurisdictional framework for the development of the entire logistics ecosystem. As of now, India spends nearly 13 to 14 per
cent of its Gross Domestic Product on logistics cost, while countries like Japan and Germany only spend 8-9 per cent of its GDP on the cost.
During the launch of the policy, Prime Minister Narendra Modi said that the policy is a culmination of hard work of over eight years and India
should try to bring down the logistics cost per cent to single-digit as soon as possible. According to the 2018 World Bank Logistics Index, India
is ranked 44th in the logistics cost. India is behind developed countries like the US and China, which were ranked at 14th and 26th position
respectively.
13. EVENT NETWORKS AND SUPPLEY CHAIN
• A supply chain essentially comprises a complex network of multiple stakeholders
such as suppliers, logistics service providers, carriers, port authorities, retailers,
consumers, and a few more players depending on the type of supply chain. A
plethora of events take place across the complex network and involve multiple
stakeholders in a supply chain. The flow of goods, money, and information occurs
across this network; therefore, there is a need for visibility through the various
touchpoints. Supply chain event management provides this visibility that helps aid
critical business decisions.
14. • Supply Chain Event Management (SCEM) primarily manages critical events
across a supply chain. It provides needed visibility into the processes to
proactively act in exceptional circumstances that can potentially lead to
disruptions. Therefore, supply chain event management is the key to
optimizing logistics performance.
• Supply Chain Event Management solutions help businesses manage and track
the real-time location of inventory or shipments across the supply chain.
Having access to this real-time information is critical because it helps
analyze how certain events can impact the production schedule at a plant or
arrival of the cargo at the destination and customer awaited deliveries.
Thus, advanced SCEM solutions can let companies monitor, evaluate and plan
proactively to address potential delays and better manage supply chain
performance. This visibility into the workings of an extended supply chain
can mean better control over logistics processes and is a key driver of
building resilient and agile global supply chain networks.
15. VENDOR MANAGEMENT
• Before diving into the details, it’s important that you first understand what vendor
management is, and what qualities make it effective. The basic logic that underpins
vendor management is that businesses rarely have all the resources to execute
projects and fulfill business objectives on their own. Instead, they must turn to
external resources from suppliers.
• However, the process of acquiring and managing several suppliers with different
points of contact, pay rates, and contract terms can add immense complexity to an
already complicated and highly dynamic buyer-vendor ecosystem. That’s why a
smooth vendor management process can be quite valuable and contribute to better
supplier relationships.
16. THE SIX VENDOR MANAGEMENT PROCESS
STEPS
• Most vendor management strategies are broken into six steps in vendor management that help organize and solidify a
buyer’s relationship with suppliers. In chronological order, these are:
• Establish business goals: Before enlisting the help of a vendor, establish SMART goals for vendor management so both
you and your prospects understand what needs to get done.
• Vendor locating and selecting: Thoroughly analyze every vendor prospect to ensure that they have the resources,
experience, and personnel to satisfy your goals and KPIs.
• Risk assessment: Exercising due diligence to ensure that every prospect is transparent regarding key metrics such as total
annual spend, on-time delivery rates, and aggregated internal risk assessments.
• Contract negotiation: Reach mutually beneficial contract terms and agree upon risk KPIs for performance monitoring.
• Supplier onboarding: Collecting the documentation required to process and set up a company as an approved vendor.
• Risk mitigation and monitoring: Collect necessary data for frequent, ongoing risk reporting and ensure vendor due
diligence.
