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Prin. L. N. Welingkar Institute of Management Development and

Research, Mumbai

CHALLENGES FACED IN LOGISTIC IN RURAL AREAS

BY
Ms. Risa Saha

PGDM-RURAL 2021 – 23

TRIMESTER III ROLL NO.: 27

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Acknowledgment

I am very thankful to Prof. Dr. Rachana Patil ma’am for being my mentor and helping me with
all my doubts. My family always ensured that my work remain unhindered and all my meetings
undisturbed, I am very thankful for all the adjustments they made and the support they gave me.
This report wouldn’t have been possible without the combined efforts of all the people involved
in the whole internship be it, my colleagues. I heartily to all the people who have supported me
to complete my internship successfully.

RISA SAHA
ROLL – 27
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Table of contents

Sr No. Content Page No.

1 Executive summary 4
2 Introduction 5
3 Types of logistics 5
4 Working Model 6
5 Current Scenario 7
6 Importance 8
7 Express value chain 10
8 Areas of improvements 11
9 Strengths 14
10 Opportunities 16
10 Conclusion 16
11 Recommendation 17
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Executive summary

The Indian economy has been developing at a typical pace of more than 8% over the most
recent four years placing enormous expectations on its useful framework. The extent of
administrations from planned operations specialist co-ops has expanded complex in emerging
nations like India. Logistics service providers need to meet the difficult job of conveying best
quality administrations to their clients for their business progression and future business. In
emerging nations like India, infrastructural bottlenecks are one of the main issue regions to be
enhanced need. The unfortunate street conditions, deficient streets, air and ocean port limits,
poor availability, traffic and issues at check posts and costs and so on are not many to name.
High speculation and low edge due to awkward installment framework by Indian transporters
dials back the speed of coordinated operations specialist co-ops.
Various surveys have been conducted to estimate logistics activities as a percentage of total
production value, and it has been discovered that logistics costs account for between 12 and
20% of the final retail price of current consumer goods. When compared to developed
countries, the Indian logistics industry remains underdeveloped. When compared to developed
countries, the Indian logistics industry remains underdeveloped. The poor condition of
infrastructure and transport vehicles is one of the major impediments to the growth of the
logistics industry in India. Complicated tax laws, the complexities of international trade
documentation, and a lack of IT infrastructure, a scarcity of professionally qualified logisticians,
and insufficient technological assistance and a lack of industry readiness Because of these
constraints, the logistics costs in India continue to be higher than in developed markets. It is
estimated to be around 13% GDP, compared to 9% in the United States (However, this is lower
when compared to other countries.) such as China, which accounts for 20% of global GDP). It is
also expected that the potential savings will increase if logistics are available for India.
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Introduction
Logistics is defined as the process of managing and maintenance of goods from the organization
to their clients. The process of integrating and maintaining supply chain activities is known as
supply chain management. Supply chain management is modern concept of logistics which
helps to maintain the supply chain activities of multiple organizations and it is not possible in
logistics. Logistics starts from the movement, storage, flow of goods, services and information
inside and outside the organization.

Types of logistic companies in India

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Military Thrid Fourth

party party

Return Public Inbound

Outbound

Working model of logistics

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Current scenario of logistics in India

The Indian economy has been developing at a typical pace of more than 8% over the most
recent four years placing enormous expectations on its useful framework. Whether it is the
actual framework of street, ports, water, power and so forth. On the other hand, the advanced
foundation of broadband organizations, media transmission and so on or the help framework of
coordinated operations - all are being extended to perform past their abilities. Strangely, this is
prompting a rise of imaginative practices to permit business and public help to work at a higher
development rate in a climate where the help frameworks are getting increased
simultaneously.

In the period of web-based business and worldwide rivalry, the extent of administrations from
planned operations specialist co-ops has expanded complex in emerging nation like India. Right
now, planned operations area contributes around 14% in GDP in India and will hope to develop
at 1.5 to twice of the current Gross domestic product. Operations Performance Index
positioned India on 54th among 160 nations with a score of 3.08. Logistics service provider
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should keep up with administration nature of all planned operations capabilities to make due
and fill in the serious world. Logistics service providers need to meet the difficult job of
conveying best quality administrations to their clients for their business progression and future
business.
In India, logistics service provider has sufficient chances to develop and grow their organizations
because of expansion in e-organizations and late drive of "MAKE IN INDIA" by Indian
Government. Also, headway in innovation and ascend in globalization can likewise be viewed as
capable purposes behind associations to update their methodologies and foster items to serve
worldwide requirements through coordinated factors specialist co-op's abilities. Yet,
coordinated factors administration suppliers are confronting many moves to satisfy the
expanded assumptions for the associations. The current limits of logistics service provide rare
not synchronized with anticipated industry prerequisites. In emerging nations like India,
infrastructural bottlenecks are one of the main issue regions to be enhanced need. The
unfortunate street conditions, deficient streets, air and ocean port limits, poor availability,
weighty blockage and traffic and issues at check posts and costs and so on are not many to
name. The public roadways comprise just 2% of the Indian streets, yet taking care of around
40% of the absolute cargo development by streets. Five significant air terminals and twelve
significant seaports in metro urban communities dealing with around 85% of the complete
cargo traffic via aviation routes. Absence of cutting edge and refreshed IT devices and restricted
talented labor force confines the development of logistics service provider moreover. High
speculation and low edge due to awkward installment framework by Indian transporters dials
back the speed of coordinated operations specialist co-ops. Besides, the public authority
arrangements and review methodologies now have nothing to do with mark and can be viewed
as one of the significant obstacles in the achievement story of logistics service provider. These
snags now and again become a significant reason for disappointment of wanted coordinated
factors administrations.

The coordinated factors area in India is ceaseless to observe development because of

expansion in retail, online business and fabricating areas. Additionally, homegrown and
worldwide utilization is quickly expanding which opens some new open doors for logistics
service provider. To guarantee smooth administrations from operations specialist co-ops, the
provokes should be recognized and taken out. In this review, an endeavor to recognize what's
more, foster a primary relationship among challenges has been finished. Then, at that point, a
fitting system for surviving these difficulties is additionally proposed.

Importance of logistics
 It assists with planning every one of the assets of the association in an ideal way.
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 It assists with utilizing and convey the scant assets and without these coordinated
operations the executives, there will be deficient with regards to the significant assets.
 Without the ill-advised administration of the strategies in loads of emerging nations like
India, various undertakings get fizzled.
 There will be a postpone in the execution of different ventures because of an absence of
the consideration of coordinated factors in India.
 It assists with tackling every one of the issues connected with the transportation of
products to the clients in a proficient manner by examining the issue and settling it so
that it gives advantage to the entire association.
 It additionally assists with fixing the issue of assembling that is harmed while conveying
it to the client and furthermore sends the norm of creation to the organization.
 It assists with expanding the force of retailers and builds the utilization of PCs.

Indian logistics market size

350

300

250

200

150

100

50

0
FY17 FY20 FY25
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Percantage of modal mix

31%

60%

8%
1%

Railway Water Air Road

Industry wise contributi on

24 25

2
10

5
24
10

Auto Engineering E commerce FMCG/FMCD/CD

Pharma Organised retail Others
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Express industry value chain

Areas of improvement
The prevalence of planned operations reevaluating emerges from number of reasons. The job
of planned operations specialist co-ops is extremely fundamental in directing smooth
progression of material and data in both upstream and downstream of supply chain. By and
large, Indian associations re-appropriate coordinated factors exercises to diminish cost, more
spotlight on center skills, better help quality and efficient. At present, transportation is viewed
as generally critical strategies action which nearly represents 50-60% followed by warehousing
which represents another 25-30% of the absolute market, which is additionally trailed by
esteem added administrations and cargo sending representing rest of the market in this way,
there is need to distinguish and dissect the difficulties looked by strategies specialist co-ops in
conveying wanted
quality to the end clients. In light of writing audit and specialists' viewpoint, different difficulties
are distinguished and talked about exhaustively beneath.
1.Infrastructural Bottlenecks: For financial improvement and urbanization, operations
foundation is viewed as basic empowering influence. Because of globalization, India is
advancing situation in world exchange diverting upsurge in transport volume. The Indian
government has previously made moves to extend and work on existing street and rail
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organizations furthermore, modernizing harbors and air terminals. Yet, development of

operations framework isn't synchronized with the normal business prerequisites. In created
nations, vehicles move around 800-1000 km in a day while, In India, it runs just 250-300 km
daily. This makes the major issue of crisscrossing of transport. Unfortunate state of streets,
unfortunate availability, and high-cost rates, defilement on expressways and hinterlands and
deficient air and seaport limits are the major infrastructural bottleneck
2.Absence of Efficient Technical System: GPS innovation also, following and following of
shipments are now accessible high level IT apparatuses which are in process and utilized by
transporters yet there are around just 2% logistics service provider which follow these
practices. The nation is consistently updating its assets actually however reception rate is still
exceptionally low. There is
need to foster proficient specialized frameworks and make mindfulness about significance of IT
reception to all the partners for better financial turn of events.

3.Absence of Government Support Policies: Logistics area isn't perceived as industry in that
frame of mind of 14 percent commitment towards GDP. However, a large number of work
potential open doors are created by this area. Ventures itself consider coordinated factors as
spine and key driver to their monetary what's more, modern development. The legislative
center is still missing towards strategy structure, improvement and acknowledgment of planned
operations business as an industry.

4.Divided and Unorganized Sector: Logistics area in India is viewed as profoundly divided and
disorderly business. It is an interaction of some little also, enormous players where over 90% of
LSPs are the individuals who own under 2 trucks and 95% are those who own under 5 trucks)
disables nature of administrations. Not many enormous logistics service provider generally
work well for laid out and known associations with relatively accessible assets than little
players. Then again, little players prepared to work for low edge which makes inescapable
obstructions for enormous ones.
5.Regular Ways of Operations: In creating country, there is extremely sluggish reception of
computerization due to inaccessibility and cost. The tasks are significantly manual including
stacking and dumping of products, warehousing, utilization of beds and associating with whole
network. More robotization of activities can help with making cross country broadband planned
operations IT organization and can affix up all cycles coming about in better consumer loyalty.
6. Cost Implications: Logistics area requires enormous venture for assets like vehicles, gifted
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labor and distribution centers and so on. Coordinated factors is a significant expense also, low-
edge business. The inconvenient installment design by Indian transporters makes deficiency of
sufficient turning out capital for logistics service provider. Poor physical and correspondences
framework is one more obstruction to drawing in interests in the strategies area. High expenses
of activity and postpones engaged with compliances with shifting documentation necessities
make the business ugly.
7. Deficiencies of Skilled Workforce: In India, due to less significance to strategies area, the
accentuation on specific preparation, schooling and specialized information on workers in
coordinated operations business is moreover missing. Even if this area contributes
exceptionally high in GDP, yet inaccessibility of talented labor for conveying wanted operations
administrations is a major hindrance.
Prior, hardly any difficulties like "Complex State Documentation" and "Absence of coordination
with clients" are viewed as vital for logistics service provider however later execution of Goods
and Service Tax (GST) in India, these hindrances are naturally evaporated generally.
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Skilled
workforce

Infrastructure Cost
support implications

Technical Ways of
support operations
Challenges
faced in
logistics

State
Unorganized
Documentation
sector
complex

Cordination Government
with client support
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Strengths of Rural India for logistics

Availability of land- The availability of land in the rural parts of India is immense which can be
used in best way possible in constructions of roads, infrastructure.
Employment- The excess manpower can be trained well for the job available which can get
them getting employed and earn a good livelihood for their family and themselves.
Urbanization- There will be a move towards urbanization if all of it falls in place and lead to
better future of the village or town.
Economic Growth- Infrastructure improvement, employment, urbanization can all add to the
economic development of the country as India covers a large part of rural which has huge
potential and is still untapped and can used to best of its ability.
The best aspects of each company's operations that can provide it an edge over rivals are
referred to as their strengths. The customer portfolios of Logistics
Divers have the following strengths: A wide range of clients from many industries, including
the automotive, chemical, defence, consumer products, industrial, oil and gas, and government,
are served by logistics.
Expertise in emerging economies: Logistics focuses particularly on emerging markets since, in
their perspective, there are many demand and supply gaps in these areas as a result of the
recession, which has raised the demand for logistics services there.
End-to-end logistics services: these services were delivered by air, train, road, and sea. Supply
chain management, shipping, and storage, project logistics, chemical logistics, logistics for
events and exhibits, and administration of domestic items are a few of their services.
Acquisitions: Logistics has been involved in more than 40 logistics brands from different parts
of the world in order to expand and become the largest logistics firm in the Middle East.
Wide network: With operations in more than 100 countries and more than 22,000 workers,
logistics presently has the largest logistics services network in the world. Since they serve a
variety of industries and offer end-to-end logistics services, the company has positioned itself as
an integrated logistics service provider.
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Opportunities
Opportunities are those openings in the environment that the firm operates in that it can take
advantage of to boost its profits. Opportunities include, among others:

In growing economies where agriculture is less important, there is an increase in the rate of
rural to urban migration. Accordingly, there will be a growth in the population of cities and
towns, which will result in a greater demand for supply chain management services from both
businesses and households. This may present a sizable opportunity for logistics firms.
Digitization will give logistics firms a major cost-savings opportunity, and it will also transform a
sector that previously relied heavily on labour into one that does so now.

Conclusion
When profiling the logistics industry in India, keep in mind that the industry is less developed
and relatively unexplored in comparison to countries such as America and Europe. Europe.
However, with increasing competitive pressure and a rapid rise in there are logistics players
changing their identities and expanding their service portfolios. There is a growing need for
industry service providers to gain a supply chain advantage enhance their service offerings
Among the strategies suggested to players for improvement. The following are the chances of
success in India's logistics sector:

The logistics service requirements, expectations, and specifications of each industry, and even
companies within the same industry, may differ, and it is a common complaint in India that
service providers are unable to design, develop, provide, and manage their customer-specific
requirements. To achieve a more customer-centric market and to maintain a long-term
relationship, players must provide the right service in the right quantity and condition to the
right customer at the right time and right price.

In today's global business practice, technological solutions are widely used, and they have also
become the logistics industry's mantra. This has created a market for software vendors, who
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have responded with Supply Chain Execution suites (SCE) applications. This includes online
order, warehouse, and transportation management systems. Goods tracking, real-time
information, Global Positioning Systems (GPS), and most recently, RFID systems RFID that
improve the precision and distribution efficiency India is a globally recognized IT powerhouse,
and this advantage must be capitalized on. Indian firms are developing specific capabilities in IT-
enabled logistics, such as the System development and management for logistics planning and
coordination Leading Indian IT firms can supplement their IT expertise with logistics expertise.

Recommendation
Increase government backing Rural logistics involves a wide range of institutions and
stakeholders, therefore it is especially important to focus on improving the effectiveness of
policy development and execution. This should involve national, provincial, and local
authorities. Integration of government policy in the areas of marketing, agriculture supply,
commerce, and transportation is necessary. Local governments should play a leadership role in
implementation.
The modernization of rural vehicles and equipment, the development of a rural logistics public
information network, and the encouragement of private sector participation all require funding
from the federal, provincial, and local governments. In order to encourage rural logistics
businesses' growth, the government should also widen investment avenues, rework the loan
application process, and provide funding for these businesses.
For commodities distribution, information platforms, machinery and technology, and
commercial activities associated with agriculture, better standards and specifications need to
be established. This would include tools for keeping track of temperature as well as other
equipment needed to allow continuous cold-chain transport and in-transit temperature
monitoring capabilities.
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