- May 22, 2023
Preparing for the Future: Reimagining India’s logistics landscape
Mr. Vijayaraghavan believes that prioritizing sustainability in supplier selection and evaluation fosters a collaborative environment for sustainable practices.
In a quest to embrace technological advancements, India is revamping its logistics landscape, envisioning a future where efficiency and innovation seamlessly integrate to propel the nation’s growth. With a focus on digitalization, automation, and sustainable practices, India’s logistics sector is poised to redefine the way goods are transported, setting a new benchmark for the world to follow.
In an exclusive interview with Mr. S. Vijayaraghavan, CFO of ProConnect Supply Chain Solutions, Shivani Srivastava, Senior Editor, CFO India dives into the strategic initiatives and forward-looking vision that are reshaping India’s logistics industry.
Below are the edited excerpts:
Q. How is ProConnect incorporating sustainable practices in logistics and supply chains to address climate change and global warming, and what specific initiatives has the company implemented to reduce its environmental impact?
Vijayaraghavan: At ProConnect, we integrate sustainable practices into our logistics and supply chains to address climate change. Our commitment to ESG initiatives includes specific measures to reduce our environmental impact. Our materiality assessment identified Energy, Waste Management, and Climate Strategy as key environmental risks for reporting.
To begin, we conducted a baseline assessment of GHG emissions (Scope 1 & Scope 2) at approximately 90% of our warehouse operations. We have implemented several measures to improve energy consumption patterns, such as moving to a new corporate office equipped with energy-efficient technology like sensor-based lighting and water systems. Additionally, we installed a rooftop solar unit to fulfill 20% of our energy needs and incorporated indoor air purifying plants and ample natural lighting to reduce electricity consumption. Transitioning our global data center from on-premises to the cloud has resulted in significant energy savings. Furthermore, our flexible work policy has helped reduce employee commuting and carbon footprint.
As part of our CSR activities, we distributed solar kits to 600 tribal families in Kalvarayan & Javadhu hills. We also maintain an inventory of solar products to support the wider adoption of renewable energy sources through our 3PL distribution business.
Looking ahead, we aim to establish a comprehensive decarbonization strategy that encompasses Scope 3 emissions, contributing to a green and sustainable supply chain. To achieve this, we will introduce electric vehicles into our supply chain fleets. Other interventions may include entering power purchase agreements with renewable energy providers to replace grid electricity and implementing sustainable sourcing strategies.
Q. What is your perspective on the potential of the green logistics market in India, and how are you positioning your company to take advantage of this market opportunity?
Vijayaraghavan: We understand the immense potential of the green logistics market in India. We actively engage in and advocate for green initiatives across the supply chain. As part of the Redington group, we play a key role in driving ESG programs in logistics. With our established connections to sustainability-focused customer brands, we are strategically positioned to capitalize on the market opportunity. Our goal is to promote greener logistics by utilizing our expertise and resources, benefiting both the environment and our partners. Our sustainability commitment aligns with our business growth objectives in the logistics sector.
Q. How are you collaborating with suppliers to ensure that they adhere to sustainable practices, and what steps are you taking to ensure that your company’s own procurement and supply chains prioritize sustainability?
Vijayaraghavan: We prioritize sustainability in supplier selection and evaluation, integrating it into our business relationships. We provide ESG and sustainability updates to our key suppliers and collaborate with downstream suppliers to transition them from the unorganized sector to organized operations. We support their digitization, track and trace capabilities, and fuel efficiency measures. Our warehouses optimize natural light usage and explore battery-operated equipment. We manage risks related to human rights, health, safety, and labor well-being through contractual agreements with suppliers. Our code of conduct extends to suppliers and customers, outlining expectations for sustainable practices. Third-party safety audits ensure best-in-class procedures in select warehouses. These initiatives benefit suppliers and align with our sustainability goals, fostering a collaborative environment for sustainable practices.
Q. How do you measure the impact of your company’s sustainability initiatives on financial performance, and what metrics do you use to evaluate the effectiveness of your company’s sustainability programs in improving its sustainability performance?
Vijayaraghavan: We are developing a comprehensive plan with defined metrics to measure the financial impact of our sustainability initiatives. We refer to international frameworks like TCFD to understand and report financial implications. Operational metrics, including GHG emissions and stack emissions, are already reported to our parent company, Redington Limited, and will be included in their upcoming sustainability/ESG report. Moving forward, we will enhance the comprehensiveness of our disclosures in alignment with global best practices for reporting financial implications related to sustainability.
We are currently aligning ourselves with the GRI framework, establishing operational ESG committees and councils to oversee key projects. Our ESMS is set up, and we plan to digitize data collection in the future. Through these efforts, we will track performance, measure progress against KPIs for each material topic, and report it in our ESG/Sustainability report quarterly and annually.
Q. How can the government support the logistics industry in adopting greener practices, and what incentives do you suggest for the warehousing industry in this regard?
Vijayaraghavan: The government can assist the logistics industry in adopting greener practices through skill development programs, subsidies, incentives for clean energy adoption, infrastructure for electric vehicles and solar energy, and favorable policies. These actions create an enabling environment for sustainable practices and a greener future.
Q. How can the government intensify the attractiveness of exports and assist imports of inputs vs finished products to strengthen Indian manufacturing’s global presence?
Vijayaraghavan: The government is vital in boosting India’s manufacturing global presence by enhancing export attractiveness and facilitating input imports. They can achieve this through favorable trade agreements, export promotion policies, streamlined customs procedures, support for R&D and innovation, infrastructure development, skill development programs, and market access support. These actions enhance competitiveness, attract investments, and foster economic growth.
Q. How are you planning to leverage the digitization of the logistics industry to stay ahead of the competition in 2023?
Vijayaraghavan: To leverage digitization in the logistics industry and maintain competitiveness in 2023, our strategic plan focuses on enhancing track and trace capabilities, optimizing loading and route mapping, and implementing AI and ML technologies for data analysis. We aim to transition to paperless operations, explore blockchain for secure data sharing, and consider automation technologies like RPA. Through digitization, we enhance efficiency, customer service, and competitiveness in the evolving logistics landscape of 2023.
Q. With the increase in the use of cloud-based systems and blockchain technology in logistics, how are you preparing to integrate these technologies to improve your supply chain management and customer service?
Vijayaraghavan: We have integrated cloud-based systems and are preparing to incorporate blockchain technology for improved supply chain management and customer service. We have transitioned to a cloud-based platform for efficient data storage and access, and we recognize the potential of blockchain for secure data sharing and enhanced supply chain visibility. We closely monitor industry developments to leverage these technologies for operational efficiency and transparency.
Q. Considering the growth potential for the logistics industry in India, what steps are you taking to expand your company’s operations and capture a larger market share in the current financial year?
Vijayaraghavan: We are actively expanding our operations to capture a larger market share in India’s growing logistics industry. We have initiated strategic initiatives to drive our expansion plans independently, but government policies such as the National Logistics Policy (NLP) present additional opportunities for accelerated progress. Our focus for expansion is on the northern and western regions, complementing our strong presence in the eastern and southern parts of the country. By leveraging the NLP provisions, we anticipate facilitated expansion and a stronger market presence across various geographies. This strategic expansion enables us to tap into new markets and increase our market share. With the supportive policies outlined in the NLP, we are confident in enhancing our market presence and solidifying our position as a leading player in the Indian logistics industry. Our commitment to expansion and market growth remains unwavering as we leverage favorable conditions and the provisions of the NLP to strengthen our operations and market position.