Bajaj Electricals Ltd and Mahindra Logistics Ltd on Wednesday signed a logistics optimisation and outsourcing contract worth over Rs 1,000 crore for the next five years.
As per the agreement, Bajaj Electricals Ltd (BEL) will outsource its entire logistics to Mahindra Logistics Ltd (MLL), which will also provide a complete end-to-end redesign.
It has been done with the twin objectives of achieving enhanced and industry-best service levels, coupled with a logistics cost saving in excess of 25 per cent, BEL said in a regulatory filing.
MLL has developed for BEL a fully redesigned and consolidated logistics network, with storage optimisation, transportation management and inventory movement through technology, best practice and automation, it added.
"The total contract value, of this one-of-its-kind deal in the Indian Logistics industry, will be in excess of Rs 1,000 crore over the next 5 years and is the outcome of a unique and collaborative solution," the filing said.
Commenting on the development, BEL Executive Director Anuj Poddar said Bajaj Electricals has been actively working towards various strategic initiatives to enhance value for its customers and other stakeholders.
"This collaboration with MLL is one such key initiative and I am confident that it will help transform our logistics, help us serve our customers efficiently, strengthen our competitiveness and also drive improved margins," he added.
MLL Managing Director and CEO Rampraveen Swaminathan said the company is aiming to enhance service levels of BEL to their customers significantly, while simultaneously driving down costs.
"I don't think this would be possible without the extensive use of technology - across network design, warehouse management and transport optimisation and control. Adapting our learnings from disparate industry verticals allowed us to create an innovative solution for the consumer durables and electronics business leveraging our reach, know-how and tech investments in equal parts," Swaminathan said.
As part of the solution, two large ultramodern eco-friendly mega-warehouses in Delhi and Mumbai, equipped with the latest technology, automation and skill-building, will serve as the heart of the network.
The network will further operate fully IT-enabled fulfilment centres to serve BEL's dealers, distributors and customers.
MLL will also deploy a healthy mix of dedicated long-haul fleets and local distribution trucks, enabled by the latest tracking technology and control tower operations, the filing added.