This facility is nothing short of top notch! No surprise then that Tesco, Carrefour, Wal-Mart have all been here. In fact, Ted Huffman, who heads logistics for Wal-Mart's Indian operations is expected to visit this place some time next week.
Wal-Mart is not the only one. Metro, Reliance Retail and Pantaloon all outsource their distribution and logistics. Retailers say India's fragmented market and infrastructural woes leave them with little choice. Besides, it also cuts costs.
Mazyar Kotwal, Senior Manager-Advisory Services, KPMG says, "In India, if you purchase across States, you end up paying a 3% Central Sales Tax. Procurement in India is very local centric - you procure from where you want to distribute and sell. So it isn't convenient to set up a central distribution centre from where you disperse across the country."
So Wal-Mart will use existing networks like this one to get off the ground. It is talking to a host of suppliers to outsource fleet services, cold chain infrastructure and warehousing. Outsourcing also means that Wal-Mart doesn't invest too much too soon - giving it time to understand the Indian market.
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