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Future Supply Chain: Binding the Nation into one Food Grid

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In conversation with PV Sheshadri, CEO, Future Supply Chain

Future Supply Chain Solutions, a leading third-party supply chain solutions specialist and logistics service provider, has been growing its portfolio ever since its inception in 2006.

Today, FSC provides its bespoke services to an ever-growing clientele in various segments. With a distribution network covering more than 12000 PIN codes across the country, the company has emerged as a market leader in its segment.

In an exclusive interview with Logistics Insider, Mr Sheshadri talks about the company’s core area of focus and the way forward. Excerpts:

Q) Future Supply Chain has always tried to follow an asset-light model as far as its processes are concerned. How has this enabled you to strengthen your core areas of focus? Can you outline certain things to be kept in mind while following an asset-light model?

FSC follows an asset-light strategy and doesn’t invest in buying warehouses and trucks. The company invests in movable assets within the four walls of the warehouse and technology hardware such as advanced sortation systems, inbound and outbound automation, storage hardware such as shelving and racking, and some material handling equipment only. The company is expanding its warehousing capacity, on an asset-light model, to cater to the increasing demand to add velocity to its customers’ aspirations. 40 Logistics Insider August 2019

Q) As the epicentre of consumption is shifting from the metros and megacities towards the tier-II cities, how do you plan to strategically increase connectivity to these neo-consumption centres?

At Future Supply Chain, we operate out of good quality, Grade A warehouses, which are either built-to-suit or to follow a strict mandate of compliance with developers. With our strong network of 96 distribution centres, we cater to the demands emerging not only from tier I but tier II and III cities as well.

We have ensured that all our DCs are scalable and can be converted to multi-user facilities to adapt to the changing needs of the customers. FSC’s expansive coverage of Express logistics touches more than 12000 PIN codes in the country allowing us to reach every nook and corner.

FSC’s novel concept of the India Food Grid is a network of 38 integrated food and FMCG distribution centres aiming to connect 90% of India’s geography by 2021. This single, multi-layer grid will smoothen the erratic supply of food and FMCG products in the country binding the whole nation in one grid.

Q) Warehouses across the country have moved to the ‘hub and spoke’ model that has brought to the forefront the concept of Part Truckload Model. How do you plan to plan to use the concept to your advantage? What steps are taken to increase its efficiency?

FSC builds warehouses as per the need of their customers and since the implementation of GST, our customers are looking to consolidate to large and fewer warehouses than they operated out of before. This allows us to increase efficiency and reduce time to market.

The concept of the part truckload is what we follow in our express logistics business. The hub-and-spoke transportation model enables innovative service offerings to our customers in an optimised and cost-efficient manner. Partial truckload shipments usually do not require freight class, eliminates reclassing and extra charges (like minimum density) that typically accompanies larger shipments. These carriers usually do not stop at distribution terminals along the way to their destination, which generally leads to a higher percentage of on-time deliveries, faster transit times, and less handling of freight.

Additionally, partial truckload carriers typically offer cargo insurance coverage comparable to truckload carriers, which is often greater than what LTL carriers offer. Our hub-and-spoke distribution model allows us time definitive, door to door deliveries through the network of 14 hubs and 134 branches across India, covering 12,345 pin codes across the country.

Q) We have recently completed 2 years of GST. Now when you look back to the time when you had to realign your entire business model, would you say it was a blessing in disguise?

It’s been two years since the rollout of the GST and many companies have witnessed positive momentum in the logistics sector. The cost of logistics in India is higher than many western countries because of multiple reasons such as the federal taxation system prior to GST implementation, fragmented logistics network, unfavourable modal mix with road contributing to around 60% of the freight volumes, inefficient fleet mix, underdeveloped material handling infrastructure and lack of sufficient IT infrastructure and technology.

FSC strives to bring down logistics cost for its clients as an ongoing process. Many of our clients are re-evaluating their supply chain model in a post GST era, to optimise costs, improve operational efficiencies, reduce time to market and increase the reliability of their supply chain.

The introduction of e-way bill has led to a sharp reduction in distribution bottlenecks leading to lower transit time. We at FSC believe in sharing any tangible benefits, arising out of GST or our focused efforts in bringing the logistics cost down with our clients, as per mutual understanding.

Q) What are some of the key areas of interest that Future Supply Chain is looking at in the immediate future? What are some of the projects that are in pipeline?

The company has GST ready infrastructure and plans to expand modern warehousing, technology-enabled solutions resulting in greater efficiencies. We have added around 3.08 mn square feet of warehousing capacity in 2018-19 on a base of 4.58 mn square feet, taking the total capacity to over 7.66 mn square feet.

FSC has embarked on a journey to set up the India Food Grid (IFG), a network of 38 Integrated Food Distribution Centres (IFDC), which will provide pan-India distribution coverage of Food & FMCG products, right from the manufacturing hubs till the point of consumption. Brands can enter the grid from anywhere in the country for consumption anywhere, anytime.

The IFG will require an investment of `1,000 crores in the next few years to build one of the strongest and expansive networks for Food and FMCG products distribution in India. In addition to these, we will be implementing rooftop solar panels across our 15 warehouses in the coming years, as our endeavour towards reducing carbon footprint.

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