The average supply chain cost in the US is almost 8.5% of its total GDP. By contrast, the average supply chain cost in India comes to 13.5% of all its GDP.”
But wait a minute! Because the bad news doesn’t end here. In 2018, India’s ranking in the World Bank’s Global Logistics Performance Index (LPI), one of the most recognized ways of measuring the ease of doing business based on the condition of the existing supply chain and logistics infrastructure in one country in particular, it dropped to 44 from its previous position of 35 in 2017.
While countries like Germany, Holland, Belgium, and the United Kingdom, which always tend to eliminate all kinds of interruptions in their entire domestic and international supply chain management system, successfully ranked first, second, third, and fourth. respectively.
All these factors mentioned above do not show any positive side of the Indian economy. According to the latest survey, the net value of the losses that are taking place, especially due to poor supply chain infrastructure and lack of proper management strategies, is around $65 billion. Clearly, supply chain and logistics management companies in India are definitely facing a lot of challenges.
Problems and challenges:
In India, logistics and supply chain management faces both demand side and supply side challenges, which are explained below.
Demand Side Challenges:
The challenges on the demand side are basically related to the unstable price factors and differentiating varieties of consumer requirements. We all know that India is a country of endless contradictions and full of unimaginable diversity.
You can simply understand this fact just by taking a ride from one state to another. You will be able to recognize new cultures, new languages, new dialects, new styles of food and, above all, idiosyncratic traditions, only after crossing almost every 40-50 km of geographical distance.
As a result, it is not entirely possible for a single manufacturer or even a small group of manufacturers to satisfy such a varied and highly differentiated set of consumer requirements.
What we need in this context is a bridge, or more precisely, a seamlessly organized supply chain collaboration system between manufacturers, distributors, local agents and retailers who are directly connected to home consumers.
Supply Side Challenges:
There are dozens of supply-side challenges that basically hamper the entire supply and distribution system. Some of them are listed below:
1-Poor distribution system
2-Inadequate infrastructure.
3-Amature 3PL companies
4-Complexities in Taxation
5-Strict commercial policies
6-Closed Economic Policies
7-Dispersed market
8-Old and obsolete technologies.
9-Lack of skill and professionalism.