Rajesh Mehta, Executive Director and CCSO of Liladhar Pasoo Group, boasts over three decades of global logistics and supply chain expertise. As an active member of national committees like CII and EEPC, Mr. Mehta's strategic insights earned him recognition for advising the government during the pandemic's Oxygen Supply Chain crisis. Beyond his professional commitments, he volunteers with the NGO BAPS in Mumbai. Mr. Mehta is a dynamic and forward-thinking leader who contributes significantly to Liladhar Pasoo Group's success and influences the broader business community.
In the dynamic and complex landscape of the logistics sector, the infrastructure concept often conjures images of warehouses, transportation networks, and physical assets. However, an equally critical but often overlooked aspect of infrastructure is the "soft infrastructure" that encompasses the human and skill-based elements of logistics operations and technology investment. As the logistics industry continues to expand and face unprecedented challenges, there is an urgent need to recognize and invest in soft infrastructure to ensure the sector's sustained growth, efficiency, and resilience.
In the rapidly evolving landscape of the supply chain sector, the convergence of technology investment and strategic investment in skill development and building up human resources is emerging as a pivotal game changer for optimizing last-mile deliveries. The investments in human resource development ensure that the workforce is adept at leveraging these technologies, fostering a culture of innovation and adaptability. By aligning technological advancements with a skilled and motivated workforce, companies in the third-party logistics service can achieve heightened operational efficiency and customer satisfaction. This integrated approach addresses immediate challenges in last-mile deliveries and lays the foundation for long-term sustainability and resilience in the face of dynamic market demands and unforeseen disruptions.
Logistics service providers are the vital link between companies and external stakeholders across the value chain. Their role extends beyond physical transportation and warehousing; they ensure compliance with government regulations, customize solutions within resource constraints, and offer a centralized hub for all supply chain-related solutions, mitigating labor-related issues.
The government acknowledges physical assets while granting infrastructure status to the logistics sector stakeholders, Logistic Service Providers who invest to offer services, are the ground-level enablers and Soft Infrastructure Providers, their roles and contributions often goes unnoticed. Since they face variables and challenges across the value chain and invest to develop customized solutions empowering a supply commitment, the Soft Infrastructure Providers or Logistic Service Providers, help accelerate economic growth.
Soft infrastructure encompasses a range of services and capabilities that go beyond the tangible assets of the logistics industry. This includes investments in human capital, skill development, and the ability to absorb risks on behalf of clients. The ability to navigate regulatory complexities, customize solutions within resource constraints, and provide a centralized hub for supply chain solutions makes soft infrastructure indispensable in today's fast-paced and competitive logistics landscape. Acknowledging and assigning soft infrastructure status to these services can have profound effects on the efficiency and cost-effectiveness of the logistics industry.
While physical infrastructure is acknowledged by the government, soft infrastructure often goes unrecognized. By recognizing soft infrastructure, and its role in building a skilled workforce, streamlining processes, and enhancing operational efficiency, there is an opportunity to bring down the operational cost and the overall cost of logistics services. This aligns with government objectives to reduce India’s logistics cost from 13-14% of GDP to 6-7%, to match global standards and costs, thereby gaining access to international markets with Make In India products.
This industry stands as one of the highest employment generators globally, emphasizing its economic significance. As of now, the logistics service provider industry employs 22 million people, and is expected to surge to 38 million by 2030 – a substantial workforce that forms an active part of the economy. Development of such a large section of productive population can help promote economic development and drive GDP, while also building a formidable task force of trained and skilled employees.
Soft infrastructure investments contribute to the ease of doing business by ensuring a skilled and compliant workforce. They also have a much more evolved and agile working system that leverages fully integrated solutions, which in turn, fosters a conducive environment for businesses to operate seamlessly within the logistics ecosystem.
Logistics service providers often absorb variability and risk on behalf of their clients. Acknowledging soft infrastructure recognizes the efforts put into managing and mitigating risks, providing a sense of comfort and security for businesses.
Soft infrastructure enables logistics service providers to customize solutions based on the unique needs and challenges of their clients. In an industry where adaptability is key, the ability to tailor services within given resources and infrastructure constraints is crucial for success. A clear focus on developing soft infrastructure not only ensures better relationships with existing clients but also plays a pivotal role in meeting the demands of clients across the globe, thereby enhancing exports.
Soft Infrastructure or Logistics service providers act as the frontline in ensuring compliance with government regulations. The soft infrastructure they bring to the table involves investing in a skilled workforce capable of navigating complex regulatory landscapes, mitigating risks, and ensuring error-free and Just-in-time operations.
Soft infrastructure providers offer a centralized hub for all supply chain-related solutions. This not only streamlines operations but also addresses labor-related issues, offering a seamless and efficient experience for businesses involved in the logistics ecosystem.
Soft Infrastructure or Logistics service providers are integral to the success of supply chains and economic growth. Recognizing and valuing the soft infrastructure they bring to the table is essential for transforming them into strategic partners. As the industry continues to grow and evolve, collaboration between businesses and logistics service providers can result in a more efficient, cost-effective, and mutually beneficial supply chain ecosystem. By acknowledging and incentivizing soft infrastructure, governments, and businesses can unlock the full potential of Soft Infrastructure or logistics service providers as true partners in driving economic success.