International Trade : Logistics & Sourcing - I

Summary

This video provides an insightful overview of international logistics, focusing on the importance of efficient systems in global trade. It highlights key logistical concepts like inbound, outbound, reverse, and process logistics, and explores India's efforts to improve its logistics infrastructure through the National Logistics Policy (NLP) 2022. The speaker emphasizes the significance of reducing logistics costs to increase international competitiveness, while discussing the core principles of the 'Seven Rs of Logistics.' The video also stresses the need for careful management of product quality, certifications, and customer satisfaction in global markets.

Takeaways

• 🚚 Logistics originates from the French word 'loger', meaning the art of transportation, emphasizing the movement of goods, information, and resources from origin to destination.
• 📉 India currently incurs high logistics costs (14–15% of GDP), prompting the government to launch the National Logistics Policy (NLP) 2022 to reduce it to 7–8%.
• 🏗️ The government is investing in infrastructure like dedicated freight corridors, new roads, railways, and waterways to enhance logistical efficiency and reduce transaction costs.
• 🌍 International trade logistics extends beyond domestic boundaries, requiring goods to reach global markets competitively, in the right quantity, quality, and price.
• 🏭 Logistics management covers activities from raw material supply, manufacturing, warehousing, and distribution to the final delivery to customers.
• 🔁 Four major types of logistics include inbound (raw materials supply), process (production logistics), outbound (distribution of finished goods), and reverse logistics (returns and exchanges).
• 📦 Packaging, labeling, and marking must meet international standards and language requirements specific to each target market (e.g., English or French for Canada).
• 🪵 Certain countries have specific packaging regulations, such as New Zealand’s ISPM-15 rule for wooden packaging to prevent insect infestation.
• ⚙️ India faces challenges like outdated technology and inefficient management, highlighting the need for integrated, technology-driven, and globally competitive logistics systems.
• ⏰ The 'Seven Rs' of logistics ensure the right product, in the right quantity, condition, place, time, to the right customer, and at the right cost.
• 💰 Reducing logistics costs and improving infrastructure are crucial for India to strengthen its position in international trade and improve global competitiveness.
• 📊 Initiatives such as Gati Shakti, Bharatmala, and Sagarmala are key government programs supporting the goals of the National Logistics Policy.

Q & A

What is the primary goal of logistics in the context of international trade?

The primary goal of logistics is to ensure that the right product is delivered to the right customer, in the right quantity, condition, and at the right time, all while keeping costs optimal.

Why is logistics cost so high in India?

Logistics costs in India are high due to outdated infrastructure, inefficiencies in transportation systems, and the lack of integrated solutions across road, rail, air, and water transportation networks.

What is the 'National Logistics Policy' (NLP) and what does it aim to achieve?

The National Logistics Policy (NLP) is a government initiative aimed at reducing logistics costs in India from 14-15% of GDP to 7-8% by improving infrastructure, digitizing processes, and creating a more streamlined logistics ecosystem.

What are the key components of logistics management?

The key components of logistics management include inbound logistics (sourcing raw materials), process logistics (manufacturing), outbound logistics (distribution to customers), and reverse logistics (handling returns or exchanges).

What are the 'Seven Rs' of logistics?

The Seven Rs of logistics are: Right Product, Right Quantity, Right Condition, Right Place, Right Time, Right Customer, and Right Cost. These principles ensure effective logistics management and customer satisfaction.

How does the quality of logistics infrastructure affect India's global competitiveness?

The quality of logistics infrastructure directly impacts India's ability to remain competitive in the global market. Inefficient systems can increase costs and delays, affecting the ability to meet international standards and customer expectations.

How are reverse logistics managed and why are they important?

Reverse logistics involve managing the return of goods, such as returns, repairs, or recycling. This is important because it helps manage returns efficiently, reducing waste and costs while improving customer satisfaction.

What role does government policy play in improving logistics in India?

Government policy plays a crucial role by setting frameworks such as the National Logistics Policy (NLP) to improve infrastructure, enhance operational efficiencies, and reduce logistical costs. It also encourages private-sector participation and the adoption of advanced technologies.

What international examples are cited as models for India's logistics development?

Dubai is cited as a model for India's logistics development, being a global logistics hub due to its advanced infrastructure, including state-of-the-art ports and seamless transportation networks.

Why is it essential to meet international standards in logistics?

Meeting international standards in logistics is essential because it ensures the quality, safety, and environmental compliance of products, which is crucial for maintaining global competitiveness and consumer trust.