The Indian government through its centralized planning agency NITI Aayog, is spearheading an indepth study of the major factors that could make india reach the stated goal of having a resilient economy without undue dependency on single source and derisking our geopolitical options.
NITI Aayog working with UC Berkely along with about 38 participating commercial entities has identified the goals for a Global collaborative scalable long term strategy
Two goals for a Global collaborative scalable long term strategy
- Establish India as the 2nd manufacturing hub for diversified global supply chains including for consumables.
- Transparent Digital Ecosystems with platforms
- For early education, skill development leading to job creation and corporate training.
- For last mile delivery and access in healthcare and
- For agricultural farm to plate channels with deepening financial inclusion.
In this article we will look at The approach to the first option of manufacturing hub strategy and the means to adopt. We will explore through innovative business models in place of legacy systems which are no longer relevant. This would also call for collaborative transactions to enable fluid process flows to maintain minimum overhead cost levels.
We will have to widen our search into global IP and latent talent for Innovation in technology and operations. The two functional fields which are going to transform manufacturing in our persuit to the 5 Trillion mark.
Traditionally innovation has been about creating knowledge and may not necessarily be focused on a particular problem solution. Such innovations remain within the walls of institutions and hardly see the light of the world in terms of applied benefits to society. Innovation in manufacturing will now be a collaborative effort between knowledge partners for highly focused problems in removing traditional barriers to the new era of fluid manufacturing and flexible productisation for customized markets.
Global collaboration can evolve multiple points of knowledge and research for a focus objective to provide relief from real time problems and sufferings and benefit many aspects of society at large.
Entities and individuals working across domains of knowledge and applications share experiences and generate feedback. The search for a covid 19 vaccine could have been a true example of global collaboration, but unfortunately its seems to be developing into a political race between leaders PUTIN, Trump and Modi and Xi / Russia, usa, India and china.
Knowledge is useless unless it delivers through a business model. A B/M is is not feasible, if not scalable and sustainable.
Then equally important is the means of achieving these desired goals.*delivery
The future of manufacturing will evolve around the coming together of multilocational manufacturing and a complex materials logistics to reach markets competitively. This will perforce the amalgamation of logistics and materials inventory management into an super efficient value additive process for all stakeholders.
Logistics Efficiency is at the Forefront of efficient manufacturing.
logistics related costs as a percentage of sales value range from 9% to14%. Indian logistics cost as a percentage of our GDP is15% while in US it ranges from 8 to 9 percentage. These percentage ranges include all logistics related expenses such as warehousing, dedicated personnel, and transportation expense. Transportation costs alone comprise % the vast majority of this expense for most companies.
The days of viewing freight services and logistics costs as a fixed cost are behind us. According to the IDC Manufacturing Insights study, the two main things manufacturers need to focus on is technology and operations. logistics efficiency, a critical area for improving corporate profitability for the future in an effort to sustain growth.
The most common assumption across industry is that they are doing all they can to directly reduce and control the hard and soft costs (outbound logistics) and sourcing and delivering materials (inbound logistics) used in manufacturing their products.
By adopting the right approach on total materials management flows, logistics related costs as a percentage of sales can reduce by 4% to 7% depending on industry sector. That’s a great contribution for profitability, when sales volumes are harder to push up.
As manufacturers continue to adopt sustain and survive long-term , increase profitability, they need to focus on these key areas for logistics efficiency:
the use of a Third Party Logistics Company is the most practical answer for core manufacturing companies to take a competitive advantage. The bottom line is that you will realize logistics efficiency, and thus total costs savings.