IT helps TCI Create New Industry Benchmarks

IT is helping the industry to set new benchmarks.

Debarati Roy Nov 29th 2011 A-A+

The transport and logistics industry makes up for 13 percent of India’s GDP, yet it’s among India's most immature and inefficient sectors. While the industry is plagued with poor infrastructure, differential taxes, and unregulated competition from unorganized players it also faces unprecedented losses from operational inefficiencies.As market leaders, the Rs 2,250-crore Transport Corporation of India (TCI) has taken upon itself to create more order from this chaos.

Can you describe some of the challenges the Indian logistics industry faces?

A joint study by TCI and IIMC conducted to assess operational efficiencies shows that one of the biggest impediments to the industry has been delays at check posts and in-transit. These delays relate to filling in forms required by various government departments, etecetera. 

Logistics companies and the government should work toward adopting an approach like the TIR Convention (Transports Internationaux Routiers Convention) prevailing in the European countries. This allows seamless and borderless truck-based trade across all International Road Transport Unions (IRUs) member-nations.

 For example, it was noticed that on simulating the movement of a truck load from a factory near Delhi to a factory near Dhaka under the TIR system, direct savings were as much as Rs 15,000 per truck. The savings include the elimination of three days of waiting, a reduction in customs transaction charges and lower man-hours.

If the industry automates the processes of checking and filling government documents, it will help service providers integrate their operations with partners and customers for better visibility and control. 

 

At TCI, we believe in developing an intelligent supply chain, which can help our customers achieve just-in-time management of supplies.

What challenges does TCI face? How is IT helping?

The challenges faced by us are similar to those ailing the industry. In a sector where many small-time players provide a cost advantage, we are trying to focus on a customer-centric delivery model which encourages the adoption of new services and technology to ensure customer satisfaction and loyalty. 
Our wide network of dealers, partners, and the vast expanse of our operations motivated us to integrate our ERP systems with that of our customers and partners to enable better service delivery and the tracking of SLAs. This process has helped us integrate several processes in the supply chain and share information including demand signals, forecasts,  and inventory with all our stakeholders. Also, by implementing bar codes on our SKUs we have changed the way we manage our distribution centers.
In a set up like ours, integration, automation, and communication are key words. Our company has over 5,000 interdependent employees,  hence, we have tried to ensure that all our data—including truck departures, material availability, scheduling, route planning, and clients—is available in real time on the intranet so that the flow of information between various departments is seamless and error-free.

You created an industry first with the Road Freight Index. Tell us about it.

One of the major challenges faced by the industry' organized players is the lack of a reference point for freight rates and route density. That’s why TCI started the Road Freight Index (RFI) to bring in benchmarks, best practices, and standardization to the industry.
The RFI is an index (like the sensex) of weighted average freight rates compiled across various routes. This helps companies make a comprehensive analysis of freight trends—route and data wise—to help them forecast freight trends. The RFI is computed weekly across all high volume routes across the country. 
The RFI is beneficial as it provides the latest information on freight trends, which allows for better operational planning. It can indicate the immediate impact of seasonal and regulatory changes based on a model that's partly dependent on previous trends.

What do you think are some new technologies that are re-shaping the industry?

The widespread adoption of warehouse management systems and GPS-enabled fleets are forcing more customers to look away from their ‘store-and-transport’ mindsets to real supply chain management. 
The latest GPS freight tracking technology allows us to monitor freight location, condition, and security all from a central location. This radically changes the way fleets are managed. 
RFID is another technology that can revolutionize the industry. The RFID supply chain is an effective solution that can extensively control and track businesses processes, and reduce error rates and warehouse labor costs. 
I feel warehouse automation is one technology that will soon become a rising trend. IT is the  lifeline of all our functions. It provides us with visibility and control in a highly-scattered operational environment.

How is TCI benefiting from these technologies?

The use of GPS freight tracking has helped us immensely in improving on-time delivery with real-time information on estimated arrival times, load locations, and the status of a delivery. It also helps us minimize risk and losses with the help of onboard sensors that immediately notify us when assets are compromised.
We are also exploring telematics which is a combination of an advanced vehicle tracking system through GPS, mobility, dashboards and decision support systems, etcetera.
At TCI, we believe in developing an intelligent supply chain, which can help our customers achieve just-in-time management of supplies. A proper mix of RFI, telematics, and inventory management through warehouse automation can help us reduce miscellaneous overheads significantly.

What changes would you like to see in your industry?

A joint study by TCI and IIMC conducted to assess operational efficiencies shows that one of the biggest impediments to the industry has been delays at check posts and in-transit. These delays relate to filling in forms required by various government departments, etecetera. 
Logistics companies and the government should work toward adopting an approach like the TIR Convention (Transports Internationaux Routiers Convention) prevailing in the European countries. This allows seamless and borderless truck-based trade across all International Road Transport Unions (IRUs) member-nations.
 For example, it was noticed that on simulating the movement of a truck load from a factory near Delhi to a factory near Dhaka under the TIR system, direct savings were as much as Rs 15,000 per truck. The savings include the elimination of three days of waiting, a reduction in customs transaction charges and lower man-hours.
If the industry automates the processes of checking and filling government documents, it will help service providers integrate their operations with partners and customers for better visibility and control.