Talking about customized logistics services that Stellar Value Chain Solutions provides, tell us about the range of logistics services provided by your organization. How did it all start and how has been the growth over the years?
Sure. Real pleasure interacting with you. Just to quickly come to what we do, basically, we are one of the largest and fastest growing entrepreneurial 3PL companies of scale in India. We started this organization with the objective of catapulting India into the top 5 of logistics performance index and unlocking maximum value for Indian economy. This has been our journey. Last 5 years have been very action packed and we have created an end-to-end supply chain management capability which includes both warehousing and transportation. On the warehousing side, basically what we have done is we are creating 50 million square feet of warehousing space across 21 consumption markets, pan India, of which 12 million square feet is already operational, and multiple facilities are under construction. On the warehousing side, there are two segments that we are catering to, on is the eComm segment and other is the ominchannel.
On the eComm segment, during this corona period, honestly, eComm is one segment that has seen phenomenal growth. I am very happy to share with you that we are one of the largest partners for one of the biggest eComm companies in India. We work with many players, but we are one of the largest partners for one of them. We cater to all kind of their requirements which includes their large and heavy bulky requirement. It could be non-large requirements, sort centres, fulfilment centres, distribution centres and now we have also got into grocery. On the omnichannel side, we cater to one of the largest corporates in India, across different segments, which includes automotive, pharma, consumer durables, fashion and lifestyles. So, we have a presence across categories. Just to also give you a sense of where we are, we are basically focusing on 9 verticals/industries, which includes fashion and lifestyle, FMCG, pharma, consumer durables, retail, food and QSR, engineering industry, and telecom. So, we have services across these segments. So, warehousing is something that we have created on our own.
On the transportation side, that is something that’s primarily acquired. So, in 3 years’ time, we acquired 3 different companies; we acquired one company which is Kelvin Cold Chain, which helped us with the cold chain capabilities. Then we acquired a company named Express Business, and then we acquired Patel Roadways, which was LTL and FTL, which helped us with those capabilities. So, with these three acquisitions, we have created a transportation network …now we have a pan-India presence. In terms of transportation services, a lot of it came because of these acquisitions and some were created internally by us. So, what we currently offer is we have express service; less than truckload service; distribute service; milk run (local distribution) which is a local distribution service; ETL which is express truckload, it’s a full truckload service but with a different speed and tag. We also work on the mid-mile movements which is factory to warehouse, and warehouse to warehouse. We have exim services and cold chain services. So, over the last few years, we have grown organically and inorganically and we are working towards exponential growth, that’s what we are seeing…where the demand is there. So, we look forward to this exponential growth in the years ahead.
You have just mentioned the array of services you provide like contract logistics, temperature control, transportation, value chain transformation. Could you please elaborate a bit on these services and how do they benefit the customer?
Sure. So, basically, as supply chain experts, we basically help improve the processes, overall efficiency of our clients’ network and manpower productivity. Our objective is basically to reduce the time to market, reduce the cost to market, improve the manpower productivity, and help the organizations in the growth and profitability – that is the core mission with which we work. Clients also have very different requirements and the requirements are changing because as the companies are growing, they have requirements of flexibility and scalability…they have the requirements of quality, they are looking at one-stop shop where they could get services for both warehousing and transportation of all types. With the companies expanding, they are looking at pan-India reach which is a geographical reach. They are looking at improving their productivity and efficiency to bring down the cost, and bring down their inventory, and obviously, there is a regulatory compliance that is there; that is the requirement now.
So, these companies, instead of focusing on these 3PL activities or their supply chain activities, they want to focus on their core and outsource all these activities to experts like us in the 3PL space. Just to give you some sense, India as you know has a culture of typical godowns and transporters; that is what India has been known for. These are small warehouses, absolutely non-compliant, spread across India. What we are trying to do is, we are helping these companies…as I mentioned to you earlier, we are creating grade A warehouses pan India, that is 50 million square feet of warehousing that we are creating pan India. So, what we are doing is we are helping these companies shift their warehouses from the so-called godowns into fully-complaint grade A warehouses, where we provide the fire safety, lighting, ventilation, parking space, turning radius, and proper flooring. So, that is one big difference that we are bringing to them. Second is, rentals are going up by the day and now the clients are….while they are expanding, rental is a big cost component for them. All the grade A warehouses that we have created, are all 12-meter buildings on the sides and 15 to 16 meters in the center. So, what we are also doing is, instead of going horizontal, we are helping clients go vertical. We are putting racks, shelves, whatever be the requirement. So, that advantage we have because of the grade A tall warehouses. Another important thing is, not just the grade A warehouse and the height, the other thing is the technology or automation that we deploy in the warehouses…because end of the day, what we are also looking at is improving the manpower productivity and bringing down the cost. So, there we are deploying all the necessary automation which includes BOPTs, stackers and everything else that is necessary to improve productivity.
On the value-added services side, what we do is basically, services like kitting, packing, handling, scanning, barcoding, everything…all the value-added services is what we provide, which normal non-organized players are not capable of. So, that is another big value add that we bring to the table, and end of the day, for large scale pan-India operations, technology is the enabler. So, deployment of transport management system which is TMS, WMS, integration with the ERP, all that also is important. So, a lot of things that we are doing on the warehousing…. on the transportation side, as I mentioned to you, we have built capabilities and we cater to multiple kinds of services. Clients’ requirements are changing by the day. Earlier, they were okay with one-day or two-day delivery, and now you will know, we are talking about a half-an-hour delivery or 10-minute delivery. So, our services also have to meet up with such client requirements and we have enabled ourselves to deliver on that front.
Just to give you a sense, as I mentioned to you, we are partners to some of the largest clients on the eComm side; our order-to-dispatch time is 25 minutes. By the time you order and by the time the material moves out of a warehouse is just flat 25 minutes. So, we are continuously improving our capabilities, to cater to such requirements and we have built-in capabilities of first mile, mid mile and last mile, and one unique advantage that we have since we have both warehousing and transport capabilities, we are one of those very few players who can provide complete supply chain solution.
That’s nice to know, in detail about the array of services that you provide, and let’s come to the technology front because the role of technology has come up like never before during the past few months of the pandemic. So, you seem to be adopting advanced technologies and introducing new concepts to reduce transit time. So, could you please explain how you are leveraging technology in your operations?
Sure. So, technology is one area where we are investing heavily. Since, we had acquired 3 companies on the transportation side, so we have inherited some bit of technology that was already there but this is one area where we are investing very heavily. So, what we are looking at is when we are talking about complete supply chain of an organization which includes the first mile, the middle mile and the last mile, we are looking at information flow both forward and backward, starting from the raw material consumption to factory to warehouse to transportation network to the consignee. So, a whole lot of information flow happens in the complete network and that is exactly what we are investing in.
We have our own WMSs, we have our transport management system, we do end-to-end integration with the clients’ ERP software where client can see the end-to-end movement of the material. So, what we have done is…on the transportation side, we have a very robust transport management system which is hosted on Oracle cloud, we have our ERP system which is Oracle Financials, and we have our own WMS system which is Infor. So, all the most advanced softwares, we have already deployed. Lot of softwares are available and we take them on the basis of the requirement and we are creating a lot of in-house modules which are necessary. In terms of value-added services, basically clients are looking at engaging with their vendor partners and they need assured comfort and ease in that.
So, what we have done is apart from providing the necessary user interfaces, we have provided them modules on their mobiles, which is the pick up module, delivery module, appointments module, indenting module, where they can place orders and do a live track and trace across the complete network. They don’t really have to connect with us even to figure out or place an order. They exactly know when it is delivered and it is a live delivery update which happens from their mobile. Also, to make a seamless flow of information, to make that happen, we integrate their ERP systems with our ERP systems so that they don’t even have to place an order. They place an order in their system which gets captured by our system. Also, to minimize the risk and damages in the whole process, because this is a very transactional kind of business, what we have also done is we have deployed digital locks, door cameras, driver panic button. We have put in a whole lot of onboard diagnostics which includes geo-fencing, temperature and fuel monitors, and everything managed by a centralized control tower. So, this is one segment of activities that we do.
Another area which is very very important in this line of business, IOT has been a blessing. Artificial Intelligence is just shaping up now and that is very very crucial in our line of business. So, all this vehicle tracking, SIM card tracking, package level tracking that is happening is all facilitated by the IOT. The fuel management I mentioned about, the temperature monitoring, FAStag at the toll nakas, and the temperature control vehicles, all that is again facilitated by the IOT. We also have these applications in our warehouses, whether it be inventory management, whether it be top management, take up and put away, better utilization of space across the warehouses, tracking of material handling equipments across the warehouse, and even the light sensors to minimize the electricity consumptions, all that is RFID tagged, barcoded, so that all can be integrated and we get an information flow on our desktops where we exactly know what’s happening. So, IOT has been a blessing overall, in terms of facilitating as well as improving the efficiency of our operations. So, yes, a whole lot of focus on technology and lot of investments happening on that front.
Besides technology, how does human capital help in creating solutions for your clients? How do they impact a client’s business?
So, technology is basically only an enabler, not an end all. So, basically the key lies in our expertise to understand the client’s business, their operations and their processes. We have a very very experienced solutions team for different verticals. They analyze the existing operations, the supply chain network of the companies and then they come up with solutions to help improve the overall network efficiency, reduce the inventory and overall cost for overall transportation and warehousing. So, we have a very dedicated solutions team. Apart from the solutions team, we also have a very sound projects team, HR team and operations team to back up the whole system.
In terms of client demands, the demands change by the day. Just to give an idea of eComm segment. During the peak business period the demands go up by 5 to 10 times and that is the capability we have built where we can provide flexibility in the warehousing space and reduce the manpower as required. So, that is the flexibility we provide, not just the solutioning, not just the project execution but also building up the team as per the requirement of the client and catering to their changing demands by the day.
Environmental impact has become a great concern. The government and industry, both are together working to reduce the impact of logistics to the environment. Green fuels and clean fuels are being brought in. So, how are you focusing on this aspect?
All the Stellar facilities have sustainable solutions adhering to the environment health and safety guidelines and requirements of the government. All our warehouses are fully complaint. Basically, what we try to do is we try to maximize the use of natural light. Instead of diesel operated trucks, we have battery operated trucks. In many of our warehouses, we have thermal insulation to ensure better temperature controls. We do rainwater harvesting, we do water recycling and we are fully fully fire compliant. On the transportation side, we have put in a lot of optimizers to minimize the vehicle travel so that diesel consumption can be minimized.
What we are also doing is, we are connected with many electric vehicle manufacturers. Basically, what we intend doing is move out from normal vehicles to electric vehicles. The only limitation today is that most of the vehicles that are being manufactured on the commercial side are basically 3-wheelers with a capacity of 450-500kgs but many of these companies are working on and very soon, they would be coming up with 4-wheelers with a higher capacity, and we already have a huge requirement on the first mile and the last mile side as well as for the local distribution requirements. Most of these vehicles have a capacity of 100km movement with a single charge. So, the demand is already there. We are looking at deploying almost 1000 vehicles the moment we have these vehicles being rolled out by these companies. So, as an organization, we are very very environment conscious and we are trying to do whatever necessary to meet the guidelines.
Last few months have seen a lot of distortion in the supply chain. There has been shortage of containers, congestion at ports, shipping lines missing their delivery schedules. So, how have these things impacted your business and how have you been dealing with this scenario?
As an organization, we are not really into the export side of logistics but for many of our clients who are into exports, we do cater to their movements within the country to the port. What we are doing is, yes, as you rightly said there has been a lot of disruption. There have been challenges with the availability of containers. So, on two fronts we are helping our clients; one is what they do is whenever they don’t have container availability, we do LCL movements from their premises to another premises very near the port. So, that movement has been catered to by us, and second since we are into warehousing, we also, depending on the need of the client, either in our own facilities or hire necessary facilities for them so that their material can be stored next to the port till the time they have the availability of containers, and which can be shipped out. So, one is arranging of the containers. Second is movement of less than container load for them during this crisis, and third is providing warehouses to them for temporary storage for managing such kind of shortfalls.