A recent report (http://www.moneylife.in/article/4/8786.html) summarizes the CII report on “Global Competitiveness of Retail Strategies”. It lists India’s supply chain inefficiencies as costing the country over $ 65 billion each year and supply chain costs of 12-13 % as compared to developed country costs of 7-8%. Supply chains are affected by infrastructure – rail cars, roads, warehouses etc. Lack of infrastructure capacity, many intermediaries, tax rules etc are all listed as contributing to these costs.
But one would assume that given India’s much heralded software capability, inexpensive cell phone access etc, supply chains could compensate for the infrastructure with information regarding order status. After all, it is really unpredictable supply rather than longer lead times alone that create costs. Can state of the art information systems, RFID active tags to locate shipments, use of cheaper higher labor content solutions to offer on site delivery etc compensate for the infrastructure issues ? Can high-touch solutions permit customized supply chains that may be a competitive advantage ? After all, courier services at competitive prices have solved the delivery problems in many cities across India. Your comments.