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Automotive Logistics Current Indian Scenario M M Singh Chief Mentor Maruti Suzuki India Ltd. SIAM Automotive Logistics Conclave.

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Presentation on theme: "Automotive Logistics Current Indian Scenario M M Singh Chief Mentor Maruti Suzuki India Ltd. SIAM Automotive Logistics Conclave."— Presentation transcript:

1 Automotive Logistics Current Indian Scenario M M Singh Chief Mentor Maruti Suzuki India Ltd. SIAM Automotive Logistics Conclave

2 Background... 1/17/2015SIAM Automotive Logistics Conclave 20062026 2011 2016 2021 2009 AMP

3 Developing common understanding between OEMs Collaborative effortConsolidation Improvement in logistics infrastructure RailwaysRoad & Ports Promoting best logistics practices Engagement with global logistics companies Pilot projects Industry joined hands to take on the logistics challenge

4 1/17/2015SIAM Automotive Logistics Conclave  Automotive Mission Plan - AMP 2016 put Auto Industry on Fast Growth Track  Industry Focus on Customer Delight through Faster Deliveries; Factory Fresh Quality  Logistics had its own challenges Congestion Emissions Fuel Cost Driver Scarcity Background...

5 Logistics Industry Structure Fragmented Small Players Dependence on Road 90% of Transporters having less than US$ 0.2 million turnover 75% of Transporters having just 1 truck 70% - Road 30% - Railways Auto sector 98% - Road Just 2% Rail Small and fragmented logistics cos. could not invest to upgrade logistics performance Structure of Logistics Industry

6 Logistics Bottlenecks Average Truck Speed low High Freight cost Delays at check points High turnaround time at Ports Deficiencies in logistics infrastructure causing 1 to 2% cost disadvantage to Auto Industry Deficiencies in logistics infrastructure causing 1 to 2% cost disadvantage to Auto Industry Fall out for Auto Industry

7 Major Initiatives Inbound Logistics Improvement in Truck fill rates – higher asset utilization – Improvement in Packaging – Consolidation Outbound Logistics Development of Ports and RORO terminals Multi-modal Logistics : Road, Rail, Coastal 1/17/2015SIAM Automotive Logistics Conclave

8 “Development of Export Infrastructure at Mundra Port” Mundra Port “India emerging as a hub of small/ compact cars manufacturing for global markets”

9 1/17/2015SIAM Automotive Logistics Conclave 3 Cars4 Cars5 cars Small cars in Container (40 feet High Cube) Now 5 small cars per container High capacity Use of Ramps/ Frames Cost reduction in Double Stack mode Not dependent on Auto return load Automobiles in Container Trains ….

10 Multi-modal Logistics systems  Rail mode could supplement Road mode Challenges : Railways carrying bulk and heavy cargo – Coal, Iron-Ore, POL etc. Automobiles being light and voluminous misfit in the freight structure – Rail freight 20~40% more than Road freight Very limited availability of Rail infrastructure to suit Automobiles – Wagons, Terminals 1/17/2015SIAM Automotive Logistics Conclave

11 1/17/2015SIAM Automotive Logistics Conclave 20062026 2011 2016 2021 2014 2009 Transformation in 5 years…

12 Increase in dispatch volumes Increase in fleet size Variation in fuel price Change in distribution model – Direct to Hub- Spoke Development of Rail mode 1/17/2015SIAM Automotive Logistics Conclave Vehicles in millions Increase in dispatch volumes Number of carriers NMGs 125 Cars IR Fixed Deck: 265 Cars Flexi-Deck: 318 Cars Development in Rail Mode Carriers in millions

13 Rail mode - Breaking the ice… 1/17/2015SIAM Automotive Logistics Conclave  Close interaction with IR and Active support from Railway Board and RDSO resulted in :  New Policies Automobile Freight Train Operator Policy (AFTO) Auto-Hub Private Freight Terminal  New Wagons Double deck; adjustable height Higher Capacity, Speed  New Tariff Freight structure for BCACBM Rake

14 1/17/2015SIAM Automotive Logistics Conclave MSIL pioneered new Auto- Wagon Development 5 th March 2014 : Flag-Off of India’s First Flexi-Deck Rake 2011- Design Conceptualization 2012- Prototype Development & Trials

15 1/17/2015SIAM Automotive Logistics Conclave 20062026 2011 2016 2021 2014 2009 Current Scenario…

16 Additional Private Rakes are in operations Total Carrying Capacity : 1 lac+ veh./yr Higher Capacity Auto-Wagon Design and drop in Diesel price made Rail freight competitive to Road Government is considering – taxation reforms : favorable to inter-state logistics – Technological interventions to curtail wait at tolls and state borders – Enforcing CMV regulations – Size and Weight Rationalization of diesel prices 1/17/2015SIAM Automotive Logistics Conclave Radical shift in Logistics Equation….

17 1/17/2015SIAM Automotive Logistics Conclave 20062026 2011 2016 2021 2014 2009 Preparing for future…

18 1/17/2015SIAM Automotive Logistics Conclave AMP 2026 - Draft  Vision 2026 envisages a 3.5x growth in volumes for Indian Auto industry  Aggregate revenue to increase by 5x to hit $300bn  Vision 2026 will enable the Indian auto industry to:  Contribute around 13% to GDP  Generation additional 100 million jobs  Attract more than US$ 80 bn in investments Source : IMACS

19 Automobile Market Scenario Will road infrastructure be able to cater the impending 300% increase in automobile carriers ? Multi-Modal solution is inevitable Will road infrastructure be able to cater the impending 300% increase in automobile carriers ? Multi-Modal solution is inevitable Source : IMACS

20 Multimodal Logistics (Road + Rail) Rail may carry 50% of increased volumes Logistics Share of Business – Road : 65% Rail : 35% Source : IMACS

21 Auto logistics by Rail : Next Level  Pertinent Indian Railways Policies  Comprehensive Wagon designs  Auto friendly Rail Terminals  First and Last mile connectivity  Innovative Technology for efficient operations 1/17/2015SIAM Automotive Logistics Conclave

22 All stake-holders to collaborate IR OEMs LSPs Wagon Designer, Mfr. 1/17/2015SIAM Automotive Logistics Conclave Indian Railways OEMs Logistics Service Providers Wagon Designer, Mfr.

23 Expectations from Indian Railways  Policies for faster clearances – Wagon Designs – Speed – Routes  Policies / Mechanism for operational efficiency – Route fixation – Time table – Higher priority to high speed Auto-Freight trains  Capacity Increase – Dedicated Freight Tracks – Locomotives – Crew – Maintenance facilities  Creation of Auto handling terminals at key destinations  Technology – Tracking and Monitoring  Competitive Freight Structure 1/17/2015SIAM Automotive Logistics Conclave Indian Railways

24 Expectations from Wagon Designers, Manufacturers  Design innovations for Further flexibility : Vehicle mix (Cars, SUVs, MUVs, 2W etc.) Operational ease Minimal maintenance  Reduction in lead times Design to Prototype to Customer  Manufacturing excellence Innovative techniques / skills – Fabrication, Welding, Painting  Manufacturing with robust quality systems Process Quality Product Quality 1/17/2015SIAM Automotive Logistics Conclave Wagon Designer, Mfr.

25 Expectations from OEMs 1/17/2015SIAM Automotive Logistics Conclave  Unified approach for developing multi-modal logistics (MML)  Devise distribution model to suit MML Eg. Hub and Spoke  Endorse innovative systems  Support development of key infrastructure Design Investment OEMs

26 Expectations from Logistics Service Providers 1/17/2015SIAM Automotive Logistics Conclave  Develop multi-modal capabilities  Imbibing highly efficient operating systems  Inculcate culture of Safety  Develop skilled and motivated workforce  Affinity to investment Infrastructure Technology  Costing with Long term perspective Logistics Service Providers

27 Typical Auto Handling Rail Terminal  Unhindered approach and connectivity to main roads  Horizontally straight and vertically leveled tracks for Rake placement  Area for interim parking of automobiles. Paved, Marked, Gated  Area for loading / unloading of Auto carriers for first / last mile.  Provision for Adequate Lighting Isolation of Over Head Traction (OHT) Inspection / Maintenance of Rakes Minneapolis, USA

28 Logistics Vision  Clean  Green  Fast  Safe  Economical Let us together strive to achieve higher goals… 1/17/2015SIAM Automotive Logistics Conclave

29 Thank you 1/17/2015SIAM Automotive Logistics Conclave


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