Survival of the fittest- Obsolete

Warehouse is a place in supply chain where goods sits until information moves them. The importance of warehouse can be ascertained by its origin. It is called necessity is the mother of invention. The warehouse is in fact the second best reason for making human civilize after agriculture. People gradually understood that the life of nomad can be quitted only when there is proper facility of storage. Gradually people worked on it and are continuously developing to make it more efficient and worthy.

Current Scenario-
India is no different. With civilization the country was pioneer in bringing the idea of storage facilities with various storage structures and techniques. But the development did not match the pace of requirement.  Currently the warehousing is growing at the rate of 10% while the market of warehouse is growing at 35%-40% per annum. The gap between two is very wide. The organized warehouse account for only 15% of total warehousing. Even in the organized warehouse 70-75% of it is held by PSU and Govt. The industry is highly fragmented with ill equipped facilities, low skilled labors, poor mechanization and recognition. This all lacunae gives immense opportunities to grow and transform the industry.

Scope and Importance-
There are number of factors which are spreading the carpet for the industry.  All we need is to wake on these alarms!
Burgeoning Economy-   India is expected to be the 4th largest economy and will continue to be the 2nd largest population in the world by 2025. Growing GDP, maturing industry segments, GST implementation, rising external trade and share of organized retail will push the demand of organized warehousing.

The organized warehouses are expected to be the modern one.  People across the globe take it opportunity to liquidate their potential of land. The efficient supply chain industry has ensured that we can take maximum use of our soil. Grow the produce which is best suited to your soil. Rest leave to the supply chain. For example India import Cashew does the processing of it and is called exporter of it. Similarly Switzerland has best chocolate in the world although they do not produce the cocoa. In fact these all business stands on the fact that they have very efficient logistic and equally modern warehouses/cold chains.

Expertise :- The warehousing in India is no new business. Just after 10 years of independence organized warehouses were set up by the Government. The warehouses established has continuously recorded profit. Few of the corporations among them is working on SAP and WMS to modernize the system.  Things are really to be proud of, but is that really we can sustain with same business model in the years to come? Is our pace of transformation enough to cater the need of industry? How about structure?

Well, china did lot for it. They were way back when we started but now we are way back. Only reason is the pace of transformation. Their efficacy and efficiency has added star into the industry. India use to be the highest importer and exporter of cashew. But with old age processing industry and least interference of the government to modernize it, India does not hold either position. Vietnam is encasing the opportunity. The theory of Darwin has just changed. It’s not the fittest who survive but the one who is most responsive to the change.

The Transformation-

Uniformity- Warehousing is the key sector which is growing fast and transforming more than that. The need of the hour is to implement uniformity in corporations. There should be similar structure, same staffing pattern, proper training, research and development. The system should be upgraded and new effective and efficient idea should be implemented. It takes lots of man hours just to calculate where the purchased stock can be kept and what should be supply chain and logistic. Everything can be done easily once the entire system comes online and there is no time lag in uploading the status of warehouses which can be pooled centrally. Similarly the quality monitoring can be done effectively. The spray and fumigation can be mechanized to save any health hazards and things getting done efficiently.  

Research and Development:- Now days the Govt. issues norms of 1% gain in wheat. This norm does not seems to be the outcome of proper R&D.  Every region has its geographical impact, how come the same rules apply everywhere. Things need to be rolled as per geographical, meteorological and other factors affecting the gain and loss. Simply forcing the law just on assumption is discouraging the employees of warehouses. R&D should be done in the new areas of warehousing and scientific storage of food grains which will incur minimum losses and maintenance. IGMRI and ICAR should come up with effective tools and measures so that there is minimum or no loss to health and resources. Still waiting for these two institution to deliver something.

Working- PPP model can be introduced and new ways to the warehousing need to be established and added. The Govt can step up into integrated cold storage as well. The cold storage system, when supplemented with temperature-controlled transportation connecting farm-level storage facilities, processing units and distribution outlets will not only improve efficiency but will also solve our problem of wastage of agricultural products. In addition, cold chain and container-handling facilities should also be augmented at major sea and airports to target global markets.

Right now the scenario is different every warehouse has their own rule own staffing pattern. They still stick to old age "Godam" concept and whatever they did to modernize the system are not that visible. Things will be obsolete very soon. It will not have that much efficiency although efficacy can be there.



Way Ahead-

Govt. should think in perspective of coming times and changing scenario. All corporations can be regulated by a single mother corporation although the parent organization will remain the same. Something likes a hub and spoke model. As a reform and looking on the needs SWCs can be merged to one sister concern of CWC and can be named anything eg. National State Warehousing Corp. . SWCs can be the nodes followed by Zonal offices who regulates SWCs(nodes) and Head Office(NSWC), who by the help of Zonal Offices will have all data and strategies can be framed easily. These all structure should have uniformity. Entire Corporation should have common pay scale and staffing patterns. This will bring sense of satisfaction and integrity among staffs. The various data and status of occupancy can be compiled at one place so that it becomes easy to plan for storage and movement. This will make warehouses more trustworthy. Also it will ensure smooth running of market, control over glut and distress selling. WDRA will be better implemented on this model and can be easily regulated. The collateral management will also get easy.

I am still pondering on what it takes to connect all SWCs? What it takes to modernize & make system efficient? Who can be the change? Who can implement and match the pace of demand of warehousing industries?

What it takes to be the Best? Just be responsive to the change!!!