With an intend to improve overall logistics and Supply Chain Landscape and bring in efficiency in the overall process by working towards it successfully is none other than Coign Consulting. It’s been changing the face of Master Planning & Intra-Warehouse Layout Designing in India with its services…
To orate about the warehousing Industry trends and changing dynamics We have the man-of-the hour….
Arif Siddiqui, Founder, Coign Consulting – Logistics | Supply Chain | Infrastructure
Having such a huge experience in the warehousing industry, what is your take on the Indian warehousing sector?
This is an extremely exciting time for supply chain professionals and warehousing professionals especially for this industry where the growth has been phenomenal. Regardless of the pandemic or the demonetization or GST or any other macro-economic factors that have generally affected other industries, this is one industry that probably has proven to be isolated from any hurdles or any macro-economic factor and has been constantly growing; so it is an exciting time for everybody who is related to the warehousing sector.
I would say that the government also has been quite trying to stay focused to improve and pave the way for this particular sector by bringing in policies regarding recognizing the logistics sector as a sector of preference and giving it an industry status.
Another point that I would like to specially mention is that one of the Key drivers to the growth in this sector is the large scale private equity investment. As a result of which there has been a lot of organized players venturing into the infra game, changing the whole level playing field and the overall canvas.
We are able to see national players who have developed and built upgraded warehouses and upmarket warehouses at vantage points where distribution needs to sit and reside in the country which means almost all the seven to eight metropolitan cities and more than eight to ten of the top B-class cities have seen not only mushrooming but also very fast growth of large logistic parks.
This has also changed the thinking paradigm of the local and the regional players- people who have seen these buildings come in and have also seen that there’s been a long queue up of quality occupiers which has helped get premiums on the rentals.
So, the whole ecosystem has developed, the ecosystem not only related to top end developers but also the middle end and the lower end developers who have been forced to look at organized, legalized and standardized development. Therefore, with this change in paradigm, the whole warehousing sector has seen and will continue to see a very large growth.
As the old RCC structures are at the end of their lives and or the lands are re-designated as residential of commercial zones, the SHIFT is inevitable. So there is a shift based demand leading to relooking at the requirements from a comprehensive perspective of quality and compliance. The second driver is the organic growth which has accumulated over period time. This has led to demand for larger sizes of warehouses with scalability as an important criteria to cater to the next wave of surge. So, the whole growth looks very exciting and extremely promising.
As per the current scenario of the warehousing industry, it is expected to have a massive growth. So, what kind of development and growth do you foresee in the future?
The growth is not going to change, it will continue to remain exponential for the next three to five years. Growth in terms of adding more boxes, more space, more warehouses, more buildings in newer locations. A lot of steel will get consumed by virtue of these new pre-engineered buildings that are going to come up. Now there is going to be growth related to evolution of design; people will start looking at very tall buildings because land prices are going to be high; the per square foot prices of construction or rather delivering the product is going to be high and once that is high, the rentals are going to increase.
So direct impact on all rentals per square feet would mean useing the volume of the warehouses, as in the heights of the warehouse. So, there is going to be a shift from just developing boxes by looking at good design. In other words, the next step will be efficient and productive design. There is going to be sector specific warehouses developing. So, industry category – Chemical, Food, Apparel, Pharma, etc and channel of sale – B2B and B2C.
There is also going to be standardization that will happen within these sectors. Warehouses are going to have to get some sort of standardization in terms of aspect ratio, heights, docks, air changes, plinth height, external conditions viz traffic management and utilities and services.
The other important thing that will happen is in the mass development sector. There will be emphasis on the external infrastructure of the warehouse, which is basically the logistics interface to the warehouse which will mean understanding the vehicles that bring in and take away goods from the facility. By understanding the yard size, the truck terminal requirement, requirements of drivers who are coming into the logistics park.
In Coign Consulting, our expertise is understanding the functional element of warehousing and transportation and then using the functional requirements to design logistics parks, individual warehouses and also designing the intra logistic, the internal layouts of the warehouses from a process stand point. Baring a few, most of the BTS specifications are just good standard specs which the occupier feels necessary to specify so that the developer does not cut corners.
But once these BTS specifications will become common and will finally are going to get standardized. That will then lead a lot of warehouses to be built on a speculative basis, time of availability will be reduced, therefore there will be much more stock available for quick occupation.
The occupiers will not have to wait for a very long time for their built-to-suit to come up because that could be available at a standard warehouse and only which are real built-to-suit, very specific to your requirement and probably not specific to anybody else or not a part of the highest common factor, those are the ones that probably will qualify as BTS and can take time but the mass will get standardized which will be good quality stuff that is available.
How does Coign Consulting plan to contribute to the logistics and supply chain in the coming year?
To contribute, I would say, we have been contributing for the past twenty eight years or so. The main purpose for my setting up this organization back in 2005, after I served in India’s leading 3PL company for 13 years was to bring the warehouse at the face of the supply chain. Creating its importance in distribution and order fulfilment by integrating the processes and operations with the design planning and layout engineering. As these buildings ought to be highly functional to deliver speed, optimising cost of doing business, safe and secure working like a synchronised well oiled machine delivering efficiency, productivity, effectiveness and scalability.
We wrote the best in class specification of warehouses 15 years ago which got recognised in the market and gained followership.
All this could only be done by understanding processes inside the warehouse, inward processes, quality control process, storage control processes, outward processes, etc. Coign Consulting in the various ways of our contribution has been creating good specifications which are functionally integrated, good warehouse building specification.
We have been designing up market, up standard, best in class, “best for purpose” warehouses and specifications for the past fifteen twenty years now. I would design concepts completely based on the function that is executed inside the warehousing facility, we create geometries that improve the productivity of people, productivity of machinery.
We master planed such that we could optimize the capacity in the warehouse. Optimization and scalability are the key contribution that we provide to the industry and into the warehouses as such.
When we design, the intra-warehouse lay out after the master planning is completed, some of these customers, prospective tenants like you to also do the interior fit out designs for us; there, we get more intriguingly involved into customer specific processes.
We help them in augmenting the processes; we help them in improving their entire process flows, workflow of man, material, and machine. We help organizations in not only looking at it from an economic standpoint and viability standpoint but also from an operational standpoint which helps them improve their overall service levels from these warehouses and our understanding of the warehouse operations, of the warehouse processes, of the people, of the mentality of the people and the psychology of the warehouse worker-for the past thirty years that I’ve been serving the warehouses, this is something which helps in contributing to the entire design process and that’s how designs are said to be more effective, to be extremely efficient and productive. So that is our contribution to the industry.
Another point that comes to my mind is that on the automation side. Automation also replaces one of the most mundane and non-value-added activities that are being done by human capital.
You can add intelligence in these conveying systems and then call them automated machines because then you are asking them to take a decision so sorting system, route conveyors, etc., are putting automation in place. So, with the increase in the transaction volumes, fragmentation of processes, increase in the value added services and complexity in the process, the need of automation is increasing.
Automation requires certain types of buildings, specifications that need to be applied to these buildings for automation to give its best result. Coign Consulkting adds value by understanding and recommending the right balance between mechanization and automation. It is a big contribution to be able to bring to the table.
According to you, what are the other concerned areas in the logistic sector that requires attention and needs to be improved upon?
One of the concerned areas is the government support. I think it is something that has been talked about for several years. Developers struggle to aggregate land and then pay hugely for converting the same to appropriate zones. I think the government needs to intervene and provide for a proper de-marketed area for logistics warehouses and offer the land / plot parcels at viable to keep the sector alive otherwise there will come a time when land cost will be the biggest constrain for the viability of best in class warehouse infrastructure. This will affect all industries as rentals will become steeper, not that they are very cheap at this moment.
Second thing is, many states in India do not have proper shaped lands. The boundaries are irregularly shaped, which results in loss of ground coverage. Another point is that wherever the land is cheap, the road connectivity is bad. These are areas where the Government needs to intervene and pave the way for the industry.
Third thing that needs to happen is through the 3PL sector. Customers who are availing third party logistics services, i.e the customers of 3PL should be willing to pay the third party logistics companies a fair consideration towards rents so that good quality infrastructure is hired, which will then lead to proper productivity and efficiency and capacity optimization. So, I think temperaments and attitudes need to change and the way we look at service provider need re-defining. This is one paradigm change that needs to happen in my opinion.
The earlier changes that I’ve mentioned about in terms of specialized warehouses, I don’t think that we have sufficient cold storages, air condition warehouses or hazardous chemical storage facilities or open yard storage facilities. In my opinion, these sectorial warehouse requirements needs to be also looked at. This will bring about a comprehensive change.
How does Coign Consulting stand out from its contemporaries?
Our on-ground domain knowledge and expertise is the key to designing of functional buildings. Buildings that are expected to continuously perform in terms of integrated operations, service levels and revenue. Seamless integration of our floor layouts to process, technology, new age machines, equipment’s, people, vehicle and goods considering best practices. I think it is a huge market.
There is a lot of demand at this moment for good design capabilities, good knowledge capabilities, and good thought leaders. On the other hand there is a shortage of people who are able to cut across industry segments. As a consulting organization we respect everybody’s role, we’re not the one company that has everybody’s job.
We love to remain pragmatic and practical. We have never been theoreticians because we are practitioners; our background is that we come from a practitioner’s perspective.
Our thought processes, our entire outlook is something which we would like to continue to make sure is from a practitioner’s view point; we would like to appreciate and put our ears to the ground as far as the warehouse supervisor, warehouse manager is concerned.
Therefore, we would like to also remain in touch and abreast with all possible new age technologies, contemporary machinery, and contemporary storage systems.
However, we do not believe in compromising on the economic viability of warehouse operation. We are not here to compromise with supply chain profitability.
For us, supply chain profitability is at the epitome and as profitability keeps improving, we would always encourage our customers to drive in technology, machines, etc. and invest in warehouses. So that is what we feel, and I am sure most of the contemporaries also would agree with what I am saying and would like to follow this policy.
What role do you think steel plays in the construction of the logistic box and warehouses?
I would say that steel has been a blessing for this industry. I think it plays an extremely important role and opens huge amounts of possibilities. The thought process change that has happened in the past twenty years plus has been phenomenal. There has been a conceptual shifts in what buildings used to be earlier and now the possibilities with steel in the warehouses today.
The heights, the widths, the large spans, the reduced number of columns (column free space), roofs, etc- all these are the blessings of steel to the warehousing sector and designs using steel buildings are eased out.
This in turn has created a lot of freedom at the floor of the warehouse by reducing columns in between otherwise it was constantly acting as hurdles and impediment in the overall free flow of material and machines.
So, steel has played a very vital role in improving efficiency, capacity, and productivity. That is one thing I should completely complement steel for. Also over the period of time, manufacturers have mastered the art of adding value to fabrication, making modular components, fine detailing
However, one thing in my opinion that remains a matter of concern is the erection / installation quality and finish. Most of the PEB companies struggle in one project or the other to get it right. That is one challenge that needs to be addressed, especially when it comes to standing seam roofs with additional elements like skylights.
The seamless integration of elements like sky lights, turbo vents, roof moniytors. Smoke extractors, lif lines, etc. on the roof remains a challenge and continues to pose problems to the occupiers, especially during rains and winters . In my opinion all manufactures should face this real problem and jointly resolve this ‘problem’ which exists at an industry level.
Q How do you think can the government help in boosting the warehousing sector?
- The period before 2019 – the governments initiative mentioned here under were reasons for growth in the warehousing sector.
- Planning and commencement of the Dedicated freight corridor project.
- Implementation of uniform Goods and Service Tax regime
- Make in India concept.
- Skill India
- Logistics Sector included and given the Infrastructure status
- Allowing 100% FDI in warehousing sector.In 2020, the following additional reforms and policies will further propel the sector
- The government’s infrastructure development initiatives have boosted logistics sector growth.
- The government’s aim to integrate fragmented warehousing capacities through a national warehousing grid is a massive step towards modernising the country’s logistics network. The National Warehousing Grid will streamline the industry and transition it from unorganised to organised.
- This will increase supply-chain efficiency and investments in Grade A warehousing in Tier 2 and 3 markets.
- The government also plans to establish multi-modal logistics parks
- The government’s plan to encourage adoption of artificial intelligence and skilling people in it, the Internet of Things and big data will lead to innovation and implementation of the latest technology in the sector.
Q What is your success mantra?
Ah! Success mantra! I am not sure that we are completely successful at this stage, yes, but I do think we have created an impact. We have made a mark in the industry because of our understanding of the warehouse operation, functional integration to infrastructure which has been our key success mantra. Understanding of the warehouse operations processes, the Warehouse Management System, uses of technologies, understanding of human capital, his psychology, cost of ownership of the warehouse- these understandings of being in this industry since 1993 has made us successful in delivering great designs of warehouses and fulfilment centres.
- Our designs create velocity
- Our Solutions enhance order fill rate
- Our Masterplans improve capacity utilisation
- Our Layouts improve efficiency
- Our Geometry improve productivity
- Our planning provide scalabilityI believe the above have resulted in the success of our customers which is our success mantra.