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There is a huge potential for automation and digitization in warehousing, says Vikas Choudaha, Senior Vice President and Business Head, Godrej Storage Solutions

There is a huge potential for automation and digitization in warehousing, says Vikas Choudaha, Sr VP and Business Head, Godrej Storage Solutions

Please give us an overview of the warehouse storage market in India?
There has been a significant jump in the usage of warehouses due to the growing demand and robust expansion across industries such as pharmaceutical, e-commerce, and manufacturing. In fact, e-commerce has been one of the major growth drivers of the warehousing industry. Although there were initial hiccups at the start of the lockdown in 2020, the industry adapted to the needs and grew naturally with the help of technological advancements. Automation, robotic mechanization, and various technological advancements in the industry have improved the performance drastically and the industry is growing at a fast pace. Government policies and institutional investments have also contributed towards expanding the horizons of the industry.

How is this market shaping up? How has your organization performed in the last three years?
India is a growing economy that holds massive potential for its warehousing industry, which is expected to fructify over the next few years. The sector which was earlier primarily dominated by unorganized players is gradually evolving. It has also become an attractive investment option for private equity players. Additionally, with increase in consumption driven demand in smaller cities, warehousing need is expected to expand in these markets. Several sectors like e-commerce, pharmaceuticals, food, agriculture, FMCG, and even retail are supporting the growth of the warehousing industry. We can find the most concentration of warehouses in tier I cities. However, the demand in tier – II and tier–III cities are also expected to grow gradually as there is an increase in consumption driven demand in these smaller markets. We have maintained our leadership position in the market. In the fastest growing e-commerce segment, we have a dominant position. Our strong dealer footprint caters to the newly emerging tier II & III cities. Despite the pandemic impacting business continuity, we ensured our clients who were still operating, in commerce and pharma, continued to get our service, and all their facilities were set up on time.

Which are the sectors that have given you maximum revenue during the pandemic?
The warehousing industry in India is undergoing a significant shift, keeping pace with the emerging manufacturing sector and the boost in e-commerce. Extended lockdowns across the country resulted in restricted mobility and consumers avoiding physical shopping, which led to a sharp rise in the number of e-commerce users in India. As the demand increased, organizations made sure that all protocols are followed to run the functions smoothly. In order to ship orders and keep the business running, adapting to new technologies was the only option and this has certainly proved beneficial. The rapid rise of e-commerce has indeed contributed to maximum revenue during the pandemic.

Going forward, which are sectors that will drive the growth for your organization?
E-commerce and third-party logistics (3PL) sectors have been fundamental growth drivers of the business. Other industries such as Food Packaging and Processing, Cold Storage and Cold Chain, Automotive, Textile and Apparels, Chemicals, and Defence Manufacturing, are also driving demand, and being on the growth trajectory are expected to continue contributing to the business despite the pandemic. The manufacturing sector is expected to grow strongly, enabled by a combination of policy intervention by the government and strong domestic demand. This in turn will result in a lot of opportunities in the factory attached warehouse category, which has been our stronghold.

Warehouse in an emerging market in India, what are the challenges faced by warehousing players in India?
The government’s grant of infrastructure status to the logistics industry, including warehousing, has helped the industry gain prominence. To sustain and enable a holistic growth in this sector, the government needs to implement various policy measures – to ensure safety in warehouses, promote ergonomically designed warehouses, incentives to help godowns and Grade C warehouses to quickly mature into Grade B (structured or more organized) and Grade A (automated storage) warehouses.
Despite increasing demand, there is the concern of unskilled labour amidst the problem of shortage of labour. Automation adoption has been relatively slow in the industry due to high costs involved. With market demand likely to continue into the post-pandemic period, there is a huge potential for automation and digitization in warehousing, as it will only help businesses become more resilient in terms of their long-term operations. Incentive scheme similar to PLI for manufacturing could be considered for encouraging automation in the warehousing segment.

How are your technologies helping in the timely delivery of products?
The rise of e-commerce and complexity arising due to the pandemic further ramped up the need for more flexibility in warehouses. While e-commerce is leading the pack in adopting cutting-edge automation like robotics, drones, etc, due to its fast-delivery and high-volume nature, warehouses for industries like Pharmaceuticals, Paints, FMCG, manufacturing are moving from manual forklifts to Automated Storage and Retrieval Systems (ASRS) with conveyors. We are witnessing changes across different industries like manufacturing, healthcare, retail, consumer goods, logistics & transportation. This impacts the level of maturity in automation for a warehouse, depending on the specific needs of different industries. 

How are you integrating emerging technologies IoT, AI with your products?
The potential of AI to optimize crucial processes such as supply management and storage efficiency is revolutionising the industry. Smart warehousing, enabled by automation, provides clients with more efficiency by utilising these modern logistics centres. At Godrej Storage Solutions, we have designed modules for the industry around operations, safety and have specialised service offerings around audit and building capabilities. In large cases with complex operations, our handing over process includes providing training to the user group for better and improved usage and operations of the system.

How is the leasing market for warehousing products shaping up in India?
Leasing is still in a nascent stage in India. With clients looking for more of an opex and less of capex model, this should increase the opportunity for leasing. We have tied-up with few large leasing companies to offer our clients, an option of leasing as well.

How are you overcoming the challenges of manpower shortages?
Since the warehousing industry is expanding, the volume of business is growing. This has resulted in overnight growth in demand and requirement of manpower, adding to the labour cost. The unfortunate event of the Covid-19 pandemic added to the issue of shortage of labour. Due to this, it has been challenging to handle the functions and continue timely delivery. However, the integration of automated equipment and digitalization has helped in this new socially distanced workplace norm. We, at Godrej Storage Solutions, have been working towards advancing and improving efficiency even before the pandemic hit. The Covid-19 pandemic has impacted the warehouse sector drastically. It has shown that businesses require more flexibility and agility to operate seamlessly in dramatically changing market conditions, which is where automation comes into the picture. |

What are the after-sales services you offer to your clients?
We have a separate offering for our customers called life cycles services. We address all pain points of our customers post the handover of the system and during normal usage. We help clients in relocation, consolidation, repairs. With our capability to serve nearly every pin code in the country, we can take care of our clients’ after-sales requirement anywhere. Safety has become paramount in warehouse operations. We at Godrej Storage Solution educate the clients and also help them in auditing their facilities, and at the same time increasing the life of the storage system.

What are your growth plans for your organization for the next three years?
We are continuously innovating to give our customers the best solutions and service through the life of the product. We will address further needs of the customer in the intra logistics domain beyond the static storages, and continue to provide solutions for movement, handling and management. We aim to reinforce our presence pan India through our dealer network, which will cater to more than 80% of our clients in future.

 




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