Connecting Wave: LOGISTICS

AbstractWhile the Indian manufacturing sector has in the past decade picked up its pace, India still lags much behind China when it comes to its role in global manufacturing supply chains. In an earlier piece,2 I highlighted logistics (defined as the physical movement of items) as one of the major impediments to supply chain management in India. A fundamental difference between China and India in terms of global supply chain management is the physical infrastructure of roads, airports, and ports. For example, while China had 25,000 miles of major express-way in 2006, India had only 3700 miles (the United States had 47,000 miles, by comparison).1 While there were 56 major airports in China, India had only 17 major airports (and the United States had 189). Similarly, while only 400 million tons of goods went through the ports in India, in the same year China shipped 2.9 billion tons through its ports (the United States shipped 1.4 billion tons). These differences are largely the result of the amount of money that the respective governments have been spending on infrastructure. While China spent roughly 8.5% of its GDP on infrastructure in 2005, India spent less than 4%. Recently, the Indian government has recognized the need to improve the logistics infrastructure in the country…