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Opportunities opening up for
logistics sector under GST regime spelled out
Accenture, the global consulting
company, and DHL, the world’s leading logistics company, have unveiled details
of the approaching goods and services tax (GST) and its possible impact on
supply chains in the country.
At a workshop on ‘Supply Chain
Post GST’ here, they spelled out new supply chain strategies, likely
challenges along with logistics execution proposals under the GST regime.
Mr Sanjay Dawar, Managing
Partner, Supply Chain, Accenture, said the introduction of GST required industry
executives to look at their supply chain in order to quickly adapt to the
changing scenario.
This would not only help
differentiate themselves, but also successfully utilise this major growth
opportunity.
"Large-scale shared
facilities with multiple users will set the platform for consolidation in the
post-GST scenario," observed Mr Oscar de Bok, Senior Vice-President, South
Asia & Indo China, DHL Supply Chain.
"GST will make large
regional warehouses economically viable as opposed to the multiple small ones
set up to deal with the current tax structure," according to Mr De Bok.
Simplifying the distribution
network and merging smaller warehouses to regional centres would result in
economies of scale being generated.
The location need no longer be
fixed depending upon Central sales tax (CST) constraints but could be decided
based on demand and supply patterns, centre of gravity, long-term logistical and
real estate considerations, he explained.
Large, shared distribution
centres would offer not only strategic, operational and financial benefits, but
also allow for better cost control, forecasting, inventory rationalisation and
synergies for consolidation in transportation.
The country’s fragmented
transportation market posed several challenges with 80 per cent of operators
owning less than 5 trucks and most of them being lane-specific.
Since there were very few
regional or pan-India players, coupled with the different taxation and road
permit regulations, large shared facilities could provide the leverage to use
economies of scale as a competitive advantage in transport too, it was pointed
out.
A well-developed transport
management system (TMS) could achieve better fleet utilisation and improve
internal control through a centralised platform and enhanced reporting.
With multiple customer accounts in a single ‘Build
to Suit' facility, common chartered vehicles could be used to increase
utilisation, he opined.
Source : Exim News Service - NEW
DELHI, March 9
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