The Indian growth syndrome
Skyrocketing growth rates. Opportunities everywhere you look. A highly fragmented
market, an uneven regulatory landscape and lagging infrastructure – in India, the
rate of change is a curse as well as a blessing. DHL juggles the opportunities and the
hurdles, helping customers and the company cope with dynamic growth.
Whatever kind of business they are in, one ‘problem’ firms face in India is massive growth. International pharmaceutical firm Pfizer produces and sells goods in India. But it uses many different distributers in each state, which are hard to keep track of.
A local Indian company, ITC, grew rapidly from a tobacco company based in Kolkata to a multimillion conglomerate, selling goods from cardboard and packaging to IT and hotels. ITC uses many local firms to meet its distribution needs, which can get costly.
Then there’s Galaxy, another Indian firm which imports and exports chemicals and raw materials for firms like Unilever and Procter & Gamble. It expanded quickly in the past thirty years and its supply chain became complicated.
These firms are DHL customers, and the Group finds ways to help with their complex logistics needs. But it is not easy to bridge the gaps between rapid growth and the aging infrastructure. Ships and planes wait a long time at ports and airports. Average truck speeds are low. The regional tax structure is complicated and has led to complex supply chains. A recent KPMG study said logistics bottlenecks slow GDP growth in India by 1 to 2%.
A local Indian company, ITC, grew rapidly from a tobacco company based in Kolkata to a multimillion conglomerate, selling goods from cardboard and packaging to IT and hotels. ITC uses many local firms to meet its distribution needs, which can get costly.
Then there’s Galaxy, another Indian firm which imports and exports chemicals and raw materials for firms like Unilever and Procter & Gamble. It expanded quickly in the past thirty years and its supply chain became complicated.
These firms are DHL customers, and the Group finds ways to help with their complex logistics needs. But it is not easy to bridge the gaps between rapid growth and the aging infrastructure. Ships and planes wait a long time at ports and airports. Average truck speeds are low. The regional tax structure is complicated and has led to complex supply chains. A recent KPMG study said logistics bottlenecks slow GDP growth in India by 1 to 2%.
Additional Information
Malcolm Monteiro, SVP and Area Director, South Asia, DHL Express
“If it was just business as usual, we would be taking €600 million in 2009 to €1.8 billion in 2015. But because of Grow India and working together, we are looking at making €2.3 billion in 2015,” explains Malcolm Monteiro, SVP and Area Director, South Asia, DHL Express. All business units will grow their market share aggressively as a result.
Monteiro and the heads of the other business units – Christoph Remund of DGF, Oscar De Bok of DSC, R S Subramanian of Express, and Anil Khanna of Blue Dart Express – form the India Steering Committee (ISC) and jointly lead the corporate growth initiative Grow India.
This focuses on particular areas to pursue growth: SMEs, the sales stimulation program, and the major business sectors technology, energy and life sciences and healthcare. It is working spectacularly well. What has been important, Monteiro says, is empowering people to pursue the goals, through a sustainable framework of managers in 23 cities. “This enables people to collaborate locally, to share their leads and relationships.” The ISC established a reward and recognition program, and a program facilitation council. “It's a cross functional, cross business unit team to keep it on track so we meet our commitments.”
The cross business unit approach is long established in India. DGF, DSC, Express, and its domestic subsidiary Blue Dart, have all worked closely together for many years. “But it's really not just about numbers, but something more,“ he adds. “Employee communications, an i-share, and shared Living Responsibility activities really show there's a purpose. It's not just the numbers – there's a real feeling of togetherness.”
Monteiro and the heads of the other business units – Christoph Remund of DGF, Oscar De Bok of DSC, R S Subramanian of Express, and Anil Khanna of Blue Dart Express – form the India Steering Committee (ISC) and jointly lead the corporate growth initiative Grow India.
This focuses on particular areas to pursue growth: SMEs, the sales stimulation program, and the major business sectors technology, energy and life sciences and healthcare. It is working spectacularly well. What has been important, Monteiro says, is empowering people to pursue the goals, through a sustainable framework of managers in 23 cities. “This enables people to collaborate locally, to share their leads and relationships.” The ISC established a reward and recognition program, and a program facilitation council. “It's a cross functional, cross business unit team to keep it on track so we meet our commitments.”
The cross business unit approach is long established in India. DGF, DSC, Express, and its domestic subsidiary Blue Dart, have all worked closely together for many years. “But it's really not just about numbers, but something more,“ he adds. “Employee communications, an i-share, and shared Living Responsibility activities really show there's a purpose. It's not just the numbers – there's a real feeling of togetherness.”
