Latest News | Stellar Value Chain Solutions to Exit from Distribution Business

Mumbai, Sep 4 (PTI) Integrated supply chain solutions provider Stellar Value Chain Solutions has decided to exit from the express distribution business as the segment is increasingly becoming economically unviable, a top company official has said.

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As part of this strategic shift, the company will now focus its play only on the integrated storage and movement solution space with a network consisting of 21 warehouses and an equal number of branches and hubs across 21 cities pan-India, according to Anshuman Singh, the promoter of Stellar Value Chain Solutions.

Besides, Stellar Value Chain will concentrate on three key sectors—consumer, ecommerce and auto—to drive its supply chain solutions business and growth going forward, he said.

At the opening of its warehousing hub in Punjab last December, Singh had said that the company had lined up 200 logistics parks across the country.

“One of the learnings from the pandemic has been that the express model in the country has become outdated. It is done. So, we are completely getting out of the express model,” Singh told PTI.

Stating that supply chain essentially comprises storage and movement, Singh said, however, during the pandemic, segment players got into a “ product mode,” and thereby into product, especially on the transportation side.

“The world changed during the pandemic period. It saw the emergence of e-commerce and with that customers' expectations also changed. In making a product, they (express compaNies) created a hub and spoke model for selling… The ups and downs made us understand that this model has become outdated,” Singh stated.

This churn also led to some of these companies being sold out, he said.

“Product strategy has led to an increase in touch points as every additional touch point adds to the cost as every hub and spoke come at a cost. We had also gone into product mode. But after seeing the mayhem in the last two years, we have now moved out completely from this product strategy,” Singh said.

He said, as against the earlier plan of 21 cities and 200 hubs or logistics parks “we will now have 21 cities with 21 warehousing facilities with an equal number of hubs and branches covering the whole of India.

These 21 growth centres, significantly, cater to more than two-thirds of the country's production and consumption, according to Singh.

He also said that the company will not set up any transit hub anymore and will work with four touch points as part of its strategy of minimising touch points

Also, the company, he said, will focus primarily on consumer, e-commerce and automotive sectors, which currently account for 30 per cent, 50 per cent and 20 per cent, respectively.

Going forward, the company is expecting these sectors to account for 33 per cent each in the business, Singh said.

The city-based Stellar Value Chain Solutions at present has a 12-million sq ft warehousing footprint across 21 consumption and production centres, 150 branches and hubs, and 3000 dedicated trucks running every day.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)