Article by: Rajesh Rajgor

Spear Logistics is staying ahead by offering multi-layered services.

The turnover of Pune-based Spear Logistics Pvt. Ltd.(SLPL) has grown four fold in the last five years. For the last five years, the company has been clocking a compound annual growth rate (CAGR) of 29 per cent. Owing its rapid growth to rising acceptance of contract logistics, SLPL has seen growth come from engineering, automotive, pharmaceutical and e-commerce sectors. Stressing upon his company’s growth from a mere Rs. 250 million in FY2009-10 to Rs. 1,003 million in FY2014-15, Captain Uday Palsule, Managing Director, SLPL, says, “We have added many new clients from e-commerce and pharmaceutical industry in 2014-15 even as we continue to focus on clients from the engineering and the automotive industry.” “We expect to clock a revenue of Rs. 1,400 million in FY2015-16,” he adds. Gautam Dembla, CEO of SLPL is quick to state that the focus on engineering and auto is resulting in a contribution of 55 per cent of the overall revenues. He draws attention to the rising emphasis on logistics. Logistics, it is clear, is an important component of a company’s smooth functioning. It also adds to its success and profitability. Some companies manage their own logistics. Others find it difficult, and would rather have it handled by a contract logistics company or companies that understand their needs. Often, the work involves complex activities like designing and planning supply chains, designing facilities, warehousing, transporting and distributing goods, processing orders and collecting payments, managing inventory and even providing certain aspects of customer service. Specialising in contract logistics, SLPL handles large number of Stock Keeping Units (SKUs ) and product lines from diverse industry sectors. “At a given point, we have a minimum of Rs.30 billion worth of inventory in our warehouses. We process around 12 million product lines per annum,” beams Palsule.

Stock management

SLPL boasts of 75 warehouses across 25 cities in India. Driven by Key Performance Indicators (KPIs) and standard operating procedures (SOPs), SLPL’s inventory accuracy at each of its warehouse is fully computerised. Stressing upon the controlled way in which his company manages stocks, Dembla avers, “We have a dedicated team to look after perpetual inventory count (real-time reporting of the amount of inventory in stock). A central team manages and audits the perpetual cycle count, updating and assigning locations as well as reporting the daily stocks.” Apart from SKUs, SLPL offers custom designed warehousing, pre-packing, labelling, pricing, kitting, de-kitting, bundling, palletisation and just-in-time delivery. “We also host a multi-user warehousing facility at Bhiwandi and Pune, and are in the process of setting up more multi-user facilities in Mumbai, Delhi, Chennai and Bangalore,” informs Dembla. Apart from multi-user warehousing facility, which translates into sharing the same physical platform and the same processes, SLPL has also invested in technology. It has increased its reliance on IT. These comprise modern systems like Warehouse Management System (WMS); Transportation Management System(TMS), which is a subset of supply chain management, and a dashboard to streamline operational processes. “Structured Query Language (SQL) forms the backbone of the database for our WMS. Customer relationship management (CRM) helps our sales backbone and POMs (Production and Operations Management). Company Roll and Oracle Financials help our corporate backdrop,” avers Dembla. The use of TMS also helps in offering PODs (Proof of Delivery) to the clients. “Such small initiatives and services help measure performance,” he adds.

To each its own

Understanding that customers have unique requirements, and expect an amount of customisation, SLPL conducts in-house training at regular intervals. It has been doing so from 2009 for its employees. Over 700 supervisors, workers and managers have undergone training in areas like warehouse operations, inventory management, racking systems and standards, material handling equipment, safety standards and the latest developments in the 3PL industry. Dembla describes the effort as a trendsetting exercise in the Indian logistics industry. He adds, “The training programme acts as a motivator for all employees and helps to minimise the attrition rate by defining a clear career path to the workers.”

Setting examples

Explaining how SLPL goes an extra mile to offer services to clients, Palsule cites a case study. “To succeed in the face of a rapidly expanding business, both organic and inorganic in nature,” he states, “the client, a global manufacturer of compressors, generators, construction and mining equipment, approached SLPL with the view of a drastic overhaul of the supply chain processes.” SLPL invested and developed facilities with superior storage systems, material handling equipment, shelving and epoxy coated flooring for them. A state of the art training centre and a workshop for repairs was made available. SLPL’s transport management capabilities not only enabled the client to have better visibility in the area of customer deliveries, it also presented it with an ability to effectively manage its resources. SLPL was able to meet the client’s goal to cut transport cycle times to reduce cash cycles and lower the inventory. “Our industrial engineering team reduced the average cycle time on orders to less than 16 hours from 30 plus hours. This directly led to reduction in inventory and a shorter cash-to-cash cycle, translating into direct monetary benefits for the client. The client’s business grew exponentially,” explains Palsule. “By providing higher accuracy of up to 99 per cent on inventory and shipments, SLPL enabled higher availability and superior customer service. Shipment errors went down – to less than 0.1 per cent, thereby reducing the cost of corrective action,” Dembla concludes.

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