Logistics Optimization Service in India

Inefficiencies in logistics associated with Indian manufacturing and logistics are seldom obvious from financial accounting, since they manifest themselves in terms of suboptimal warehouse locations, ill-structured shipping contracts, unnecessary handling operations, and route systems based on no consideration of real-life traffic flows, infrastructural capabilities, and seasonality. IMARC Engineering uses the quantitative approach of network modeling and logistics optimization to determine the specific reasons for extra costs associated with logistics and develop warehouse networks, transportation routes, and carriers which minimize both the cost of transporting goods and the time required. All recommendations are based on real-life data about volumes shipped, carriers' prices, infrastructure, and seasonality.

Logistics optimization programs, which focus on one aspect of the logistics chain, whether transportation or warehousing, often tend to shift the cost burden to other aspects of logistics without actually reducing costs, thereby optimizing one parameter at the expense of another. IMARC Engineering’s logistics optimization model is built on the entire logistics chain, from receiving raw materials to producing them, warehousing the products, distributing them via the distribution channels, and delivering them at the last mile, and understanding how each stage of the logistics chain interacts with each other to develop an optimized solution for the entire logistics chain.

The National Logistics Policy India, 2022, and the PM Gati Shakti National Master Plan have created an evolving infrastructure and regulatory scenario that is directly impacting the choice of logistics networks. Factors such as evolving infrastructure through the development of new logistics parks, construction of expressways, freight corridors, and digital interconnections change the economics and feasibility of the logistics options available to the manufacturers and logistics companies. IMARC Engineering keeps itself abreast with the latest developments in infrastructure under PM Gati Shakti, MMLPs, and Freight Corridor Commissioning, thereby enabling it to provide logistics optimization services that consider the changing infrastructure within the project timeline and not designs that become obsolete once implemented.

The introduction of GST in India essentially changed the ideal layout of the warehousing network for manufacturers and distributors because there was no longer an advantage of having more depots in the states from a tax point of view, and this allowed them to consolidate their distribution centers into fewer numbers. In addition, many manufacturers have existing warehouses before GST which are more costly and less efficient than what would result from having an optimised network layout considering GST. IMARC Engineering offers services related to analyzing the impact of GST on the company’s warehousing network layout, offering insights as to where consolidation can be done for better efficiency and effectiveness.

The requirements for logistics vary significantly depending on the type of product, while logistics for a cold chain in the pharmaceutical industry includes aspects such as temperature maintenance, GDP, and chain of custody of controlled substances, which do not exist within a logistics framework for ordinary cargo transportation. The logistics optimization experts from IMARC Engineering take into account the product type when optimizing logistics operations, including cold chains for pharmaceutical products, food-grade logistics, hazardous chemicals, FMCGs, and industrial heavy products, among others, ensuring that the recommendations made fit the requirements of that particular product type.

The value of logistics optimization studies that culminate in reports of findings and recommendations is limited when the implementation of the recommendations relies solely on the organization’s internal staff without systematic assistance. IMARC Engineering assists in implementation by negotiating contracts with carriers, identifying warehouse suppliers and their contracts, assessing third-party logistics providers and incorporating them into logistics operations, selecting technologies for managing transportation and warehouses, and network reconfiguration during the transition process. This connection from logistics optimization study to implementation helps minimize the difference between the opportunity found and the cost savings realized through logistics optimization.