LOG.India March 2012 by Frewin Francis

IndIa’s LeadIng LogIstIcs MagazIne www.logisticsweek.com

march 2012

Vol. 5 — No.7

INDIA

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ary 2 l a S 201 e d Gui .34 Pg

Shop Talk

Devadas Nair, head supply chain, shoppers stop, is in the thick of a retail revolution, shaping the supply chain of one of its prime catalysts. page 22

the humaN aNgLe

An update on talent management in supply chain.

suppLy shyLocks: Extortion from transporters at checkpoints is routine. A report.8 Let it pass: Reducing production lead time is key to smoothening logistics flow...16 a maN‘s WoRLD: Where are the ladies in the industry when we need them? ....42

DAMCO.COM

WE WANT YOUR AIR CARGO, BECAUSE WE WANT TO HELP YOU REDUCE IT If there is one thing we can all agree on, it’s that cargo should only be shipped via air for the right reasons. Often, there is no better option. But in many cases, the options just aren’t easily comparable or actionable. As the manager of the world’s most extensive supply chains, we’ve developed new ways to optimise the use of air cargo to reduce cost and carbon. Give us your air cargo and we will help you reduce it. What other global air cargo provider can credibly say that?

Damco India Pvt. Ltd. 13th Floor, Tower A, Urmi Estate, Ganpatrao Kadam Marg Lower Parel (W), Mumbai, India 400 013 +91 22 3308 8249 Commercial.India@damco.com www.damco.com

Understanding the Indian Supply Chain With 20 years of presence in India, we understand the Indian supply chain and its uniqueness. Through our network of 21 offices and more than 400 experienced logistics professionals, we are close to your business, and can offer you tailor made solutions relevant to your industry.

OCEAN FREIGHT

AIR FREIGHT

SUPPLY CHAIN MANAGEMENT

CUSTOMS BROKERAGE

WAREHOUSE AND DISTRIBUTION

TRUCKING

Feburary 2012 / © Damco International A/S

Warehouses & Industrial Buildings of 2,00,000 sqft. under construction available at Chakan, Pune (Outside Octroi Limits).

eDITORIAL

Not So Far Away

uess what? Not too far in the distant future, warehouses could become a thing of the past. How did I arrive at this epiphany? Well, the signs are there. A technology called 3D printing could make it possible I am told. Until recently, 3D modeling and printing were processes only used by engineers of big companies like Boeing, which uses the technology to make certain air ducts for its planes. And now the technology has crossed over into the realm of tech enthusiasts. As you know, 3D printing is the process in which you can create objects from a 3D design, using a printer with cartridges that contain glass, plastic, even metal in the form of powder or gel. What it means is that, one day, end-consumers can make all sorts of products sitting anywhere with this technology—be it a toy, an accessory for your car (no precision components, yet) or simple industrial parts. It has only been a couple of years since this technology has been introduced to end-consumers, and they have lapped it up with gusto. According to the US-based research and consulting firm, Wohlers Associates, sales of 3D printing products and services touched an estimated figure of $1.6 billion in 2011. And they are set to grow by 20 percent and more in the coming years. Currently, the technology is in the early-adapter phase and as and when it becomes ubiquitous, it will have a huge impact on supply chain costs. In other words, warehousing and transportation costs will never be the same again. Sounds like science fiction? Well, new technologies have a way of impacting us sooner than we think. It will beat the implementation of GST, for sure, going by the speed at which GST is moving. In other words, we may not need GST at all by the time it finally comes through. No, I am joking about this one. And I hope this remains a joke. On a serious note, be it futuristic technology like 3D printing, or existing ones like RFID and speech recognition, new ideas influence global supply chain at all levels all the time, because of the pan-industry nature of the function. This is the reason a supply chain manager is (or needs to be) the most future-savvy professional around. When we had to think of a central theme for our upcoming March 15 event, ‘Supply Chain 2.0’ seemed a natural choice. As clichéd as the topic sounds, we thought we could do justice to the subject by learning from the best minds in the business. Fortunately, we have been able to get nods from some respected experts in our field. I know I am plugging our event here, but I feel quite proud looking at the names and experiences of people who will share their views with us. Let me offer you a glimpse or two: Professor N Viswanadham of Indian Institute of Science will speak on India’s food security goals and how India’s supply-chain infrastructure can be used to attain those goals. Then, Mr Darryl Judd of Logistics Executive will be unveiling India’s first logistics salary survey report (the results are published in this issue) and give a presentation on the subject. Need I say more?

Aanand Pandey aanand@logisticsweek.com

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March 2012 | www.logisticsweek.com 5

Contents 08 AnAlysis

34 EmploymEnt spEciAl

Bucks From Trucks

Salary Survey Report 2012

Transporters are an aggrieved lot. Their drivers are constantly being stopped on roads and highways by henchmen seeking bribes.

Logistics Executive has brought out a Salary Survey Report that highlights the salary structures for the supply chain in India.

12 Upshot An industry event, an interesting launch and invaluable takeaways from an international meet were on our radar this month. We present the reports.

16 GoldrAtt

Maintaining That Free Flow A supply chain can move smoothly if there is timely completion of orders and production lead time is reduced.

18 colUmn

Waters Of Wealth The potential of inland waterways has gone unnoticed by the government.

34 42 colUmn

Strength In Diversity

22 covEr story

This sector will f lourish when both the sexes are given equal opportunity, when one is selected on merit, not gender.

Shop Talk

Devadas Nair, Head Supply Chain and Mission Control of Shoppers Stop has perfected the back-end to make shopping a delight for customers.

The Balancing Act Sensitizing male colleagues, work f lexibility and security will help create a perfect environment for women to unleash their fullest potential.

The Herculean Task As the logistics sector gains importance, hiring and retaining talent becomes the need of the hour

Hitting Some Limits Retaining employees is not an easy task. But with limited opportunities, what can companies do?

mArch 2012 50

The Human Angle ADVeRtIseRs InDex

The Supply Chain suffers from the 'unglamorous job' syndrome. The industry has a task at hand to lure young talent.

BLR Logistiks (I) Ltd ............................................21 Capricorn Logistics..............................................15 Damco...................................................................3 Gandhi Automation ................................................9 Greenearth Translogistics ...................................53 IBM ................................................................... BC Intermec ..............................................................11 Om Logistics .......................................................43 Pheonix ............................................................. IBC Safexpress ..........................................................41

50 56 pAnorAmA Books, Journals, Blogs, Technology, C-Profile, and Mobile Apps - a look at what's new in and for the supply chain industry.

62 EvEnts A list of forthcoming events in March.

Sevenseas Global Express Logistics Pvt Ltd .......33 Toyota ................................................................IFC Vijay Logistics .......................................................4 Vodafone .............................................................13

FEbrUAry 2012

STATEMENT ON OWNERSHIP OF THE JOURNAL Form IV (See Rule 8) 1. Place of Publication

Hamburg Media Private Limited, B-4/6, Sona Udyog, Parsi Panchayat Road, Andheri East, Mumbai 400069

2. Periodicity of its publication

Monthly

3. Printer’s Name

Mustan Sir Saifee Savai, Nationality: Indian, Savai Printers Pvt Ltd, A-661 TTC Ind. Area, Mahape, Navi Mumbai

4. Publisher’s Name

5. Editor’s Name

Jacob Joseph Puthenparampil, Nationality: Indian, Hamburg Media Private Limited, B-4/6, Sona Udyog, Parsi Panchayat Road, Andheri East, Mumbai 400069 Aanand Pandey, Nationality: Indian, Hamburg Media Private Limited, B-4/6, Sona Udyog, Parsi Panchayat Road, Andheri East, Mumbai 400069

6. Names and address of Mrs. Honey Jacob individuals who own the B-4/6, Sona Udyog, Parsi Panchayat Road, newspaper and partners or Andheri East, Mumbai 400069 share holders holding more than one per cent of the total capital. I, Jacob Joseph Puthanparambil, hereby declare that the particulars given above are true to the best of my knowledge and belief. Date: March 31, 2011 Sd/(Signature of Publisher)

IndIa’s Lead Ing

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february 2012

Vol. 5 — no.6

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Sachin Vyas

That Perfect Blend

frOzen flaVO rS

34 How Natural Icecre its offerings togeth ams puts er.

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Sachin Vyas , VP and anil tand – Sales & Distributi on on, VP – Oper tata Global ations (asia beverages, ), have seam integrated lessly their functions with brilliant results. CheCk my flOw: How Page 22 to find a contra On the ball int in a syste : Critical lesson m and how to s on PaV wOw: building an agile empower it.... A sacks-to-ki 14 and responsive tchen story on supply chain the supply-chain ...20 of Jumboking vada pav.....46

March 2012 | www.logisticsweek.com 7

< news analysis

Train of ThoughT

Talent is more a strategic issue for us now that we are entering different industries, and different geographies. Talent is a concern. Good people are always scarce.

Handling auto waste is a big issue and the automotive industry should create a ‘disposal chain’, similar to supply chain, so that vehicles that turn into scrap bundles can be effectively disposed of.

— ajay G Piramal, Chairman of Piramal Healthcare ltd and Piramal Glass ltd on his group’s approach to innovation and leadership development in an interview to Business Standard.

— R. Chidambaram, Principal scientific advisor to the Government of india, in an address at ‘Automotive R&D trends 2015: automotive technology – mobility as a system’, organised by the CII.

The cabotage law does not allow a foreign flag ship to carry Exim cargo between Indian ports which has been transported on the same shipping line. This affects the ‘Just In Time Logistics concept’ as it increases the cost of the end product. — Rizwan soomar, MD, india & sri lanka Cluster, Maersk line india, on the prospects of ICTT at Vallarpadam on its first anniversary.

For next year we have a target of 9,000 km ... what the PM has promised before election. When we go to elections we will be in position to tell the masses that we built 20 km of roads a day. —C P Joshi, Transport and Highways Minister, to a media gathering.

Bucks From Trucks Transporters in India don’t have it easy. Besides having to grease palms at various checknakas, they are also subjected to constant harassment from ‘so-called officials’. Jayashree Mendes reports.

couple of months ago, two truck drivers were found beheaded on a highway in North India. Witnesses told the police investigating the crime that they had last seen two police women quarreling and demanding money from the truck drivers. Probably, the drivers were beheaded because they could not cough up the money. The police are still looking into the case. While this is an extreme case, it is true that truck drivers are subjected to constant humiliations and trials sometimes by the police who are supposed to protect their interests, and sometimes by roughnecks.

INDIA |

Little is spoken of truck drivers being stopped on routes by the henchmen of political parties who also demand their share of money. Navin Gupta, Secretary General, All India Motor Transport Congress, an apex body of transporters (both cargo and passenger), says, “Authorities and musclemen don’t need a reason to extort money out of drivers. All they need is to sight a loaded truck so they can demand money.” It is a common sight to see trucks lined up at octroi posts and RTOs fishing out documents and money to hand over

March 2012 | www.logisticsweek.com

to officials who demand them. But little is known and spoken of truck drivers being stopped at certain routes by the henchmen of political parties who also demand their share of money. A manager with a large transportation company based out of Mangalore, who does not want to be named, says, “We give our drivers enough money to help them pay toll and for their personal expense. But most often their lunch money

is usurped by hoodlums laying claim to certain sections of roads and highways.” Coming to the issue of drivers being stopped by authorities, Mahesh Pai, owner of Sarayu Transport, says, “The people manning the octroi posts and RTOs waylay drivers on the pretext of checking documents, and out of pure habit point out emission levels, or accuse them of overloading. Unless money exchanges hands, they will not be allowed to pass.” Citing the case of two industries (Sunflex and Lloyd Steel) based out of Nagpur, Mr. Gupta says, “We have heard that these two companies allow overloaded trucks to leave

their compound. But they do make it a point to mention the excess weight on the papers. While the Nagpur RTO may allow them to pass, the problems arise when crossing other state borders.” This leads to complaints from other truck drivers who carry under-loaded trucks and are stopped and have to shell out money. Especially at Jaipur, the officials are known to stop trucks that do not carry a Rajasthan plate number. Officials are also known to charge Rs 2,000-2,500 from the drivers, from the earlier Rs 1,000, confirms a source. According to Mr. Gupta of AIMTC, “Drivers are not skilled to deal with authorities. They allow themselves to be bullied

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The associations are also piqued that while Railway wagons are exempt from any payments at state borders, trucks are hauled up even within states.

and willingly pay up. It is unfair that these authorities do not realize the role of the transportation industry. We carry crores of rupees of materials and are the first and last mile connectivity to various states.” The associations are also piqued that while Railway wagons are exempt from any payments at state borders, trucks are hauled up even within states, leave alone state borders. The issue of paying

March 2012 | www.logisticsweek.com

toll is also nettling. Ravindra Hegde, Head of Transportation at Shrimad Transport, a company based in Chennai, says, “Every transportation company given to crossing borders frequently ends up paying around 25 percent of operating costs in toll. Besides this, the companies have to constantly put up with rising fuel costs, replacement of tires, increasing insurance, spare parts costs, salaries,

etc. But we are not allowed to increase freight rates and pass them on to customers.” Another sore point for the associations is the audacity of the concessionaires to start collecting toll even before the roads have been completed. Mr. Gupta, who has been highly active in taking this issue to the notice of the government says, “A build-operate-transfer (BOT) concession typically lasts for 25-30 years. The operators are ideally supposed to stop collecting toll once they have recovered their money. But they continue till the end of their time.” The issues go on. But in all this, it is the transportation company and the truck drivers who suffer the most.

< upshot

Toyota Inaugurates HO At Gurgaon T

oyota Material Handling (TMH) India, a majority held subsidiary of Toyota Industries Corporation, Japan, inaugurated its Head Office and Delhi branch office at Gurgaon, on February 25, 2012. Toyota is a leader in Material Handling equipment and TMH (India) brings the Toyota and BT range of such equipment to India. The facility is located on NH-8 at Manesar, Gurgaon and is spread over 20,000 sq. meters. The warehouse, which can hold over 6,ooo spare parts, will serve north and western India. It also has a workshop which will offer overhauling and major repair service of equipment to its clients. Speaking at the inauguration of the facility, Mr Toshiro Ishihara, MD, Toyota Material Handling, India, said, “I want to emphasize that our entire network is our own captive network and no independent dealers are appointed. This is

because we would like to offer our customers first class maintenance and services by our own trained service engineers and by using genuine high quality parts with designated repair tools.” TMH wishes to have a partnership with its customers and “support equipment throughout its lifetime.” The company believes that these methods will help it to retain its clients. Apart from Delhi, TMH has a similar facility in Bangalore and is establishing offices-cumworkshops at Pune and Chennai as well. Within the next three or four months the company will be inaugurating offices in Kolkata and Jamshedpur too. Mr Virendra Oberoi, DirectorSales and Service, maintains that “our facilities in terms of quality, safety of product and features follow European standards of product development.” With its penchant for quality and emphasis on excel-

TMH India Head office

lence, TMH is sure to retain and consolidate its position in the Indian domestic market.

Date: February 25, 2012 Event: Toyota Material Handling (TMH) India Organizer: Toyota Industries Corporation Venue: Gurgaon

Georgia tech Meets Future supply Chain solutions F

uture Supply Chain Solutions Ltd. hosted a visit from Georgia Institute of Technology’s Executive Master’s in International logistics and supply chain strategy (EMIL-SCS) on February 20, 2012. The meeting discussed the retail logistics challenges of the Future Group and various innovations in India. The Georgia Tech team comprised of vice-presidents, directors and senior managers of companies like Dell, Tiffany & Co., L’Oreal, UPS, etc. from the US, Canada, Thailand and Venezuela. The meeting was a part of the global

INDIA |

programme chalked out by EMILSCS and included a trip to India as part of the programme’s Asia residence, which also included meetings with industry leaders in Thailand, Hong Kong and China. Dr Vande Vate, Founder and Executive Director of EMIL-SCS, declared that the Georgia Tech Group was “honoured to have the opportunity to meet and share ideas with such distinguished leaders and innovators as the team of Future Supply Chain Solutions Ltd.” Future Supply Chain discussed the evolution of logistics in India

March 2012 | www.logisticsweek.com

and the transformation strategies of its own supply chain across various verticals like fashion, food, consumer durables, electronics and IT with the visitors. The growth and the on-going maturity of India’s logistics sector impressed the visitors from the Georgia Institute of Technology.

Date: February 20, 2012 Event: Georgia Tech Meets Future Supply Chain Solutions Organizer: Future Supply Chain Solutions Ltd

< upshot

Chief Supply Chain Officers Congress T

he India CSCO Congress held over February 2-3, 2012, concluded successfully in the company of scores of chief supply chain officers of some of India’s best and biggest manufacturing and retail companies.

trade warehousing zone near Mumbai, India’s first and largest. IBM chose the event to share their global Chief Supply Chain Officer Study in India containing thoughts from 400 supply chain professionals worldwide. The event was compered by Aryan Day 1: Fork lift Grand prix Attached to the event was India’s first Gajaria, the official Master of CeremoFork Lift Grand Prix held at a circuit nies of Force India. The gathering was especially created for the purpose entertained by cocktails served from a at the Ocean Gate Container Termi- freezing ‘Breezers in Freezers’ bar set nal near Mumbai. The circuit was in a reefer container over live music by designed to test skill, agility, safety Michael and Angelo. Gautami Seksaria, Founder and consciousness and speed of operaPartner, Supply Chain Leadership tion instead of speed of driving. Council, the organizer of the event, commented, “The longer term positive impact of mutually sharing ideas and experiences even with peers and competitors far outbalances the gain, if any, from hoarding them and this is what the CSCO Congress provides a platFrom L-R : Aanand Pandey, Editor, LOG.India; Ramesh Krishna- form for.” murthy, Procurement Operations Director – South Asia, Unilever; Rakesh Sinha, COO, Godrej Consumer Products; Ujjwal Mukherjee, Head Supply Chain, Avon; Pradeep Chechani, Head- Supply Chain, Wadhawan Retail; Winnie John, Director, Value Chain, GSK.

The trophy was lifted by Ankush Phulse of Ocean Gate Container Terminal in a nail biting tie between Ocean Gate, LCL Logistix , Transport Corporation of India and R K Foodland, with a margin of a mere six seconds. The event program included a field trip to Arshiya’s state-of-the-art free

Date: February 2-3, 2012 Event: India CSCO Congress Organizer: Supply Chain Leadership Council Venue: The Westin, Mumbai

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March 2012 | www.logisticsweek.com

Day 2

The second day of the India CSCO Congress featured an array of supply chain personalities who shared their knowledge and experiences. A special speed networking session was arranged in the morning to help enable easier and warmer conversations as the day proceeded. The first debate session of the day entitled ‘CSCOs in the board rooms’ was moderated by Aanand Pandey, Editor, LOG.India. The panelists were Winnie John, Director, Value Chain, GSK; Pradeep Chechani, Head- Supply Chain, Wadhawan Retail; Ujjwal Mukherjee, Head Supply Chain, Avon; Rakesh Sinha, COO, Godrej Consumer Products; and, Ramesh Krishnamurthy, Procurement OperaINDIA |

tions Director – South Asia, Unilever. Thereafter, Niranjan Deshpande, General Manager, IBM Global Business Services gave a presentation. ‘The Mathematics of Outsourcing SCM’, the second panel discussion, moderated by Arif Siddiqui, Coign Consulting, had Dilip Save, Head-Indirect Tax, Hindustan Unilever; Sanjay Sahay, Head-Supply Chain, L&T; Pradeep Shukla, Head-Supply Chain, Hindware; Arvind Kalra, Head – Supply Chain , Amway; and, Rajkiran Kanagala, Vice President and National Head, Business Development, TCI Supply Chain Solutions, as panelists. ‘SCM driven Market Leadership: in good times and bad’, the next debate session moderated by Ashu Khanna, ValYou Consultants, had panelists like Shubham Ray, Chief- Private Brands, Future Value Retail Limited; Sumit Chandna, Vice President- Buying and Merchandising FMCG, Aditya Birla Retail Limited; Shashank Raodeo, GM – Automotive Logistics, Mahindra and Mahindra; Sridhar Balakrishnan, Executive Vice President and Head – Sales and Supply Chain, Marico Ltd.; and, Chaitanya Prabhu, Supply Chain Head, Arshiya International. The last panel discussion session of the day was ‘The Grand Indian SCM Debate’, moderated by Mr. Khanna again. The participants were Rajesh Srivastava, COO, Idea Cellular Ltd; Uday Pimprikar, Chief Planning and Commercial Officer, Arshiya International; Robert Lobo, PresidentApparels, Raymond; Samson Samuel, COO and CIO, Future Supply Chain Solutions; Jayanty Sastry, Director – Logistics, ACC Limited. The event ended in entertainment with a comic play ‘Whatever You Say’ by Shivani Tibrewala, Tom Alter and Mona Ambegaokar, followed by comic acts from stand-up comedians Ashish Shakya, Tanmay Bhat and Gursimran Khamba.

March 2012 | www.logisticsweek.com 14

< The enable Flow series

Maintaining That Free Flow reducing production lead time and improving on timely completion of orders will enable a supply chain to move smoothly, notes Prabhakar Mahadevan.

ecently we met with an auto components manufacturing company and we were invited to analyse their business reality in order to improve their financial performance. While analysing their reality, we realized that the company caters to the replacement market besides supplying components to the Original Equipment Manufacturers (OEMs). As a process, while planning for the forthcoming month’s capacity the company typically Prabhakar Mahadevan, considers the forecasted OEM demand Goldratt Consulting, (delivery schedules) that it has received Regional Director, from its customers, and assigns the rest India region of the capacity to cater to the replacement market. We also learnt that the company maintains an average delivery performance of close to 90 percent. The company serves two different markets—as an OEM supplying parts to the auto manufacturer and also distributing spare parts to the replacement market. On further evaluation, it was clear that the company assigns higher priority to automotive customers (OEMs) relative to the replacement market when it comes to fulfilling demand, although the profit margins are apparently higher when the components are sold in the replacement market. The sales team further revealed that their customers (auto companies) were quite unhappy about the very low availability of spares in the replacement market as well as the low due date performance (DDP) of their company. The lack of spares in the replacement market encourages spurious players to fill the gap, which leads to a spiralling impact on the auto company’s reputation and service levels to customers. The situation clearly mandated deeper introspection.

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March 2012 | www.logisticsweek.com

Measuring the DDP When questioned further, the company’s team explained how they were used to measuring the due date performance (DDP). Currently, the company measures its DDP as the percentage of SKUs supplied to the OEMs as per the entire month’s requirement, for example, in a given month nine out of ten SKUs are supplied in full to the customer and therefore the DDP is 90 percent. If the relevant SKU, for example, was needed by the customer at the beginning of the month, and the company supplied the SKU by the last day of the month, from the company’s perspective, it is considered as on-time supply (for its DDP calculation). In reality, since the OEM customers hold a few weeks of stock at their premises, they are actually providing a few weeks of advance intimation to the auto parts manufacturers to fulfil their orders. However, in the replacement market, customers expect instant availability of relevant parts since the vehicle is under maintenance/repair and needs to be put in order soon. To summarize, the needs of the two market segments are distinctively different: The OEM customers are willing to provide advance intimation for the supply of their SKUs and need high reliability from their suppliers, whereas the replacement market customers need high availability of the parts they require. Therefore, the needs of different segments have to be dealt with differently, which mandates appropriate manufacturing and supply chain strategies which will enable the company to fulfil the needs of the respective market segments.

how To be successful What is mandatory for being successful? The automotive industry example can be generalized across several industry verticals. For example, if a customer walks into a store to buy products like soap, shampoo, bread etc., he or she expects to see the product on the shelf instantly, while a customer who wish-

es to buy a car, will be willing to wait for few days or weeks to receive a car of his choice (colour/model/other configurations). Based on all these examples, we can claim that customers across markets segments have an intrinsic ‘tolerance time’—a time that he or she is willing to wait to avail the relevant product or services. If the suppliers (across the value chain) don’t supply their products/services within this ‘tolerance time’ of the customer, there is a big risk that the customers will buy any available alternate product, with the suppliers losing the business opportunity, market share and profit opportunities. Therefore, it is necessary that suppliers develop their manufacturing and supply chain strategies which enable them to deliver their products/services well within the customer’s tolerance time. How to satisfy customer’s need within tolerance time? In most production environments, the manufacturer typically takes about four to eight weeks to process a given order. Let us evaluate the scenario a bit deeply. In most situations, the sum total of all processing time for a given order can be technically termed the ‘Touch Time’. It is observed that the total Touch Time to manufacture a given order is always a fraction (five percent to 30 percent) of the overall lead time of the order. For example, in an airport, from the moment a passenger enters till he reaches the departure gate, it typically takes between 30 to 40 minutes (sometimes even more). However, the actual Touch Time, the time he spends to get the boarding pass and pass through security check, is normally just a few minutes. The rest of the time he/ she spends waiting in the queue. Similarly, in a majority of production environments, for any given order, although the Touch Time is a small fraction of the overall lead time, a significant amount of the time is spent waiting for the order to be processed (due to resources, waiting for decisions, matching parts, etc). Therefore, the flow of the order is impeded at several points in production due to several reasons and this increases the order lead time, which results in lower supply performance to customers. Due to low supply performance, companies tend to release customer orders much earlier than usual to the shop floor for processing (since supply reliability is below satisfying levels and customers demand better performance). This eventually results in long queues of orders in-front at work centers, thereby causing accumulation of Work in Process inventory. This in turn impedes flow to the shop floor, which increases the lead time (much beyond the needed Touch Time) and thus results in an overall low supply chain performance. Thus to reduce production lead time and improve on timely completion of orders to customers, we must have a smooth flow of orders within the shop floor.

reducing waiting Time In the manner that supply chain (including production) is managed currently, there appears to be an assumption that requires introspection. The assumption that ‘in order to complete orders at the earliest and to achieve better on-time performance, we MUST start processing customers orders immediately upon receipt’ is damaging. As discussed earlier, it causes excessive waiting time and work-in-process. The application of the Theory of Constraints philosophy (invented by Dr. Goldratt) works on the principles as given below. In order to accomplish smooth f low within production, it is imperative to control the number of open orders (customer orders that require processing in the foreseeable future) on the shop f loor. In order to implement the above said principle, it is required to design a process to control the rate of releasing work on the shop f loor which In order to accomplish should be aligned with the smooth flow within capacity of the plant. The way to get this done would production, it is be to release work within a imperative to control pre-defined time interval (known as time buffers) the number of open ahead of the committed orders on the shop due date of the order. This would ensure that only relfloor. evant customer orders are allowed on the shop f loor, thereby reducing the quantum of work (WIP) within production. This will improve the f low of work, resulting in shorter production lead times. In addition, a global priority system to manage customer orders would better the f low and improve supply chain performance (significantly improve supply chain reliability and the availability of required SKUs). Implementation of these concepts does not need any change in plant layout. Based on several implementation experiences, typically a comprehensive TOC based system can be implemented within few weeks and benefits can be experienced within a short time. More interestingly, implementation of these solutions does not need any major investment, on the contrary, it reduces work in progress (WIP) significantly and releases a substantial amount of cash. However, the company would have to undergo several paradigm shifts to successfully implement these concepts. Therefore, due consideration to human dimensions needs to be given during implementation to get complete involvement from all the stake holders involved. INDIA |

March 2012 | www.logisticsweek.com

< cOLUmn

Waters Of Wealth The immense potential of India’s inland waterways has gone unnoticed by the government, in spite of being economical, safe and environmentally friendly. Srinath Manda reports.

ransportation cost comprises 50 percent of the overall logistics expenses (spend) incurred by a majority of Indian industries ranging from hi-tech electronics and communications sectors, to the traditional ones such as food, textiles, and automotive. The modes available for companies for transportation of their cargo can be broadly categorized into three types – land (road, rail, and pipeline), air, and water. The main water transport routes are oceans, coasts, seas, lakes, rivers, and channels. While oceans and seas are used for international cargo transportation, the other water transport routes are used for domestic cargo transportation. Coastal and inland waterways are considered to be the most economical, safe, and environment-friendly modes

Transport Mode-wise Emission Per Ton-Km, 2011

of transportation for domestic cargo movement across the world; this is widely practised by large industrial nations, including China. Further, coastal shipping has proven to be the most energy-efficient and the cheapest mode for transporting bulk goods like iron and steel, iron ore, coal, timber, cement, etc. over long distances. It is also well-suited for transportation of petroleum products. It is estimated that using the waterways mode offers savings from 25-50 percent in the overall transportation cost, especially when utilized for long distances. India has an extensive network of coastal and inland waterways in the form of rivers, canals, backwaters, and creeks, with a total navigable length of 14,500 kms. Out of this about 5,200 kms of river and 485 kms of canals can be used by mechanized vessels. At present, the developing and governing body — Inland Waterways Authority of India (IWAI) has declared total five national waterways for inland waterway transport; these are being developed further for large-scale navigation by the IWAI.

Low Use Of Waterways Unfortunately, the coastal and inland waterways mode has been highly underutilized in India for cargo transportation, compared to other countries like the USA, China, and other developing economies like Brazil. Frost & Sullivan’s research found that only about three-four percent of total transportation within India occurs through this mode. In comparison, the mode’s penetration is about 30 percent in the case of China and about 15 percent in the case of the USA.

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March 2012 | www.logisticsweek.com

Existing Inland Waterways of India, 2011

Reasons For Restraining Use

Desired Improvements

Limited capacities and lower preference for domestic cargo transportation by existing shipping companies and seaports n Lack of integration with other modes of transport, especially rail, except in the case of few select major ports. This results in a partial usage of the coastal mode n Also, there is an imbalance in coastal traffic movement, as traffic is not equally available in both directions. This makes it necessary for coastal ships to sail in ballast, at times, on the return journey n Another major reason is the old vessels used in coastal shipping. The coastal fleet is ageing fast and over half the fleet is already overdue for replacement

a) Expanding major ports capacity to accommodate domestic cargo, which is partly initiated under the Indian Governmentâ&#x20AC;&#x2122;s Maritime Agenda 2010-2020. b) Developing more coastal routes for exclusive domestic cargo movement, if possible through development of multiple minor ports into dedicated domestic cargo ports. c) Driving or encouraging an increasing number of domestic shipping service providers and facilitating expansion of their scale of operations, if required, through financial support schemes. d) Providing incentives for both service providers and customers who chose this transport mode, for the mode to gain prominence.

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< cOLUmn Advantages and Disadvantages of Coastal and Inland Waterways Advantages of coastal and inland waterways-based transportation of cargo

Disadvantages of coastal and inland waterways-based transportation of cargo

1. Low cost

1. Long transportation time

2. High reliability

2. Dependence on weather conditions

3. Low risk percent of damage and loss of cargo

3. Not very suitable for perishable goods

4. Lowest pollution, hence environment-friendly 5. Most suitable mode for bulk commodity cargo like metals, minerals, engineering, oil, and chemicals

Share of Coastal and Inland Waterways Mode in Domestic Transportation of Key Indian Industries, 2011

e) Focused development of integrated multi-modal transport networks connected with the terminals and transit points of coastal and inland waterways routes.

Adapting Successful Strategies Successful initiatives, adopted by governments in neighboring or similar nations, can be adopted by the Indian Government, too, for enhancing the share of coastal and inland waterways. The Chinese inland waterway sector has been consistently witnessing above ten percent increase in volumes on main rivers such as the Yangzte and Pearl. This was achieved through focused policies and initiatives, prominent among which are: n Privatization of inland shipping, port construction and operations. n Barge standardization programme–ncluding setting up a scrapping system with subsidies for innovating the fleet n Local government incentives in the form of fees deduction for pre-haul and end-haul transport to/from the inland terminals n Subsidies offered to set up new shipping routes (during the start-up phase) n Development of an IT platform for terminal operating

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systems to increase efficiency n Develop connecting infrastructures to inland ports

A preferential tax for inland vessels changed from fixed tax to a fuel fee-system, which is considered to be a fair system by the operators n Taking cooperation from foreign partners, such as the Netherlands and the European Commission n Gaining support of international financing institutions such as the World Bank and the Asian Development Bank Further focus of China’s policy programs for the sector includes a long-term waterway development plan till 2020, a vessel standardization program, and a framework concept for an integrated river information system. The country is aiming to achieve a 36,000 kms integrated transport network of coastal and inland waterways. Vietnam, too, achieved similar success through focused programs supported by the World Bank and developed countries like Canada. Brazil, another prominent developing economy, is pursuing similar policies for developing its coastal and inland waterways sector. n

Gravely Underutilized Coastal and inland waterways in India are gravely underutilized for domestic cargo transportation and multiple reasons including lack of capabilities at ports, as well as service providers, apart from lack of connectivity with alternate transport networks are causing this. Considering the several advantages offered by this mode, including a significantly low environmental impact compared to other modes, it is desirable to develop this as a mainstream transport mode and reduce reliance on road and rail modes. While basic initiatives to improve the situation have been announced in the Indian Government’s ‘Maritime Agenda 2010-2020’, a comprehensive and extremely-focused approach and policies are required to achieve significant success in this effort. It is recommended that successful policies implemented by neighboring and similar nations such as China, Vietnam, and Brazil be adopted by Indian Government to enhance the prominence of this mode here. Srinath Manda, Program Manager, Transportation and Logistics Practice, South Asia, Middle East and North Africa, Frost & Sullivan. Frost & Sullivan writes columns for LOG.India every quarter.

< cover story

Photos: Ramlath Kavil 22

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Shop Talk Devadas Nair, Customer Care Associate and Head Supply Chain and Mission Control, Shoppers Stop Limited, has been overseeing the supply chain functions of the company for almost two decades now, ensuring growth in ways more than one, find out Jayashree Mendes and Pritha Dey.

I DevaDas Nair, CUsTOMer Care assOCiaTe & HeaD sUPPLY CHaiN & MissiON CONTrOL

n July 1991, the then Finance Minister, Mr. Manmohan Singh, set the ball rolling by freeing the economy of the country from the shackles of Licence Raj and socialism. This watershed decision changed the business landscape of the country and opened the doors to liberalization of the economy. In another sector, in October of the same year, another landmark decision would change the way Indian consumers shopped and viewed shopping. The K. Raheja Group, one of Indiaâ&#x20AC;&#x2122;s largest players in the hospitality and real estate sector, established Shoppers Stop. Today Shoppers Stop has come a long way, from the time it opened its first store selling only menswear, to the current 51 stores across 22 cities selling hundreds of brands. Its products range from apparel, shoes, bags, accessories, cosmetics, home and travel wear, among other things. Over the years, the retailer has tied up with hundreds of brand owners, some exclusive to Shoppers Stop, with meticulous planning and precision. The precision INDIA |

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< cover story factor is important, considering that after introduction of the brand, the supply chain team of Shoppers Stop has to correspond with hundreds of suppliers across the country and even globally maintain the smooth flow of numerous brands and products. Considering that it is only a team of ten people in the supply chain who ensure smooth coordination with 1,000 suppliers, numerous transporters, not to forget the 51 stores, for its hundreds of brands, one could understand the worries the head of department would carry. But when Devadas Nair, Customer Care Associate and Head Supply Chain and Mission Control, Shoppers Stop Limited, walked into the meeting, he was not only affable, but very often broke into chuckles and was unfazed when interrupted by team personnel at regular intervals. After all, he has been handling the supply-chain function for 16 years at Shoppers Stop. Mr. Nair begins with saying, “Retailing is detailing. When you have stores running into 60-70,000 sq. ft and hundreds of brands, you need a wide range, besides a kind of width and depth.” And with quiet pride lets us know that of the thousands of footfalls, 73 percent are loyal customers, who purchase products all through the year, irrespective of seasons or sales.

Buying Prudently The Mission Control department, headed by Mr. Nair, is unique to Shoppers Stop. Some of the controlling aspects like the number of goods of a particular brand to be ordered and purchased lie with the team. As head

Inside Shoppers Stop No. of stores in India

No. of LSPs

Three for DC operations and approx. 10 LSPs for transportation and Imports

No. of warehouses / storage houses

No. of brands

100 plus

No. of SKUs

Three lakh plus

Technology Providers

JDA AS/400

No. of local suppliers

Approx. 1000 Suppliers

No. of global suppliers

Very few

No. of supply chain employees

No. of Distribution Centers

No. of Core suppliers

Approx. 200

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of the team, Mr. Nair is responsible for overseeing the purchases made by the merchandising team and decides what they are eligible to buy and whether they are meeting the permissible limit or not. Giving a brief overview, Mr. Nair says, “Every store will have a fixed fill, plus the DC stocks. The fill rate at Shoppers Stop is between 90 and 95 percent. That is the total capacity we have. So when we sell goods worth Rs 1 lakh, we buy goods equivalent to that and not more.” Another retail concept that Shoppers Stop adopts is Open To Buy (OTB). Used effectively on a weekly basis, the idea is to ensure that the Buying and Merchandising Team limits overbuying and under buying, prevents loss of sales due to unavailability of required stocks, maintains purchases within budgeted limits and reduces markdowns which normally arise due to overbuying. Based

Shoppers Stop has a fill rate between 90 and 95 percent, which is its total capacity.

on the previous weekâ&#x20AC;&#x2122;s sales and closing stock, the supply chain team prepares a department-wise fill-plan and based on OTB, releases Delivery Authorization to the respective vendors. Distribution Centre (DC) accepts stocks only if both purchase order and delivery authorization is valid. The Delivery authorization process keeps the track on inventory and thus facilitates its control which in turn helps to maintain the Net Weekâ&#x20AC;&#x2122;s Cover of the company to the required number of weeks.

The Pentagon Model

Demand Forecasting Demand forecasting is predominantly budget-driven. About four months before a financial year, the supply chain team prepares budgets in terms of growth, purchase, and expansion. This reveals the extent of growth expected in the next fiscal. The budget also allows the team INDIA |

March 2012 | www.logisticsweek.com 25

< cover story to plan inventory for the next year. Mr. Nair says, “There are two things that drive a supplier—firstly, Like to Like Stores, and secondly, upcoming stores. It also determines the volume Shoppers Stop can buy.”

Managing supplies Shoppers Stop has roughly 1,000 Indian suppliers who supply stocks to the four regional Distribution Centers (DCs) at Faridabad (supplies goods to stores in the northern region), Bhiwandi (western region), Bangalore (southern region) and Kolkata (eastern region). Mr. Nair says, “Our suppliers send out goods to the DCs. Stocks at the store are replenished from the DC stocks. We keep a minimum of two weeks cover at the DCs.” The suppliers dispatch stocks based on the four purchase orders received from the four DCs and send out the merchandise accordingly. The retailer employs three models

for its suppliers: Outright model, Consignment model, and Concessionaire model. Under the Outright model, Shoppers Stop makes payments to suppliers as per the terms agreed upon by both parties. In this case, the inventory liability lies with the retailer. The Consignment model makes the supplier liable for the inventory. The retailer makes the payment to suppliers as per the value of the quantities sold at the retail outlets. As per the Concessionaire model, both the inventory and sales are the responsibility of the suppliers. To enable collaboration with suppliers, Shoppers Stop has deployed a B2B portal, Spandhan B2B, to help its suppliers understand about stocks in hand with the retailer, while at the same time extending its own processes to its partners. All the suppliers of Shoppers Stop are connected to the Spandhan modem. “At the SKU level, the software al-

lows the suppliers to see the stocks sold on the previous day, irrespective of where they are located,” says Mr. Nair. The suppliers get notifications about the SKUs, the color, style and brand of the products as well as sales information and also, stock information across the stores and the DCs. Payment information is also available on Spandhan. It also offers access on a daily basis to account credits, outstanding payments, debit notes and credit notes raised and returned stock information along with the reasons thereof. “Every supplier has been provided with a password. After they log onto shoppersstopb2b.com with their individual passwords, they can avail of detailed information about the brands they supply. This helps our suppliers work productively,” he adds. The B2B platform is indeed helpful as Colin Pereira, Head-Sourcing and Supply Chain, VF Brands India Pvt Ltd, a supplier for Shoppers Stop, points out, “Our dispatches are regulated by how the brands perform in terms of sales at Shoppers Stop stores. Their B2B portal helps keep us updated on the sales figures which in turn help us manage the brands at our end.” Mr. Pereira added that Shoppers Stop is also planning to implement a system called ASN, wherein the suppliers will come to know of mismatches, if any, before the shipping is done. “That will certainly benefit us and all the other suppliers delivering to Shoppers Stop,” he adds.

receiving stocks Warehouse personnel physically match the stocks mentioned on the purchase order against the invoice for accuracy.

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As a multi-brand retailer, Shoppers Stop has roughly three lakh active SKUs in the system. Stocks that arrive are stacked on a two-tier racking system. Under the outright model, the arrival of the stocks is checked by the DC which physically matches the stocks mentioned on the purchase order against the invoice. In case of any mismatch, the stocks are

The Logistics Of Shoppers Stop

rejected, which then go back to the vendor. The received stocks are entered in Receiver Confirmation. “The system also points out the details of stacking–the isle, the rack, and the slot. All that is recorded in the system. Stock, after being lodged on the respective slot, is approved into the system,” explains Mr. Nair. The allocation of stock is done in two ways. One way is informing auto replenishment that a particular stock has to be auto-replenished to the stores. While this does not require manual intervention, the parameters have to be set at the SKU level. The system will automatically allocate SKUs as the supply chain team maintains stringency about supplying fixed quantities. For ex-

ample, each store can stock not more than 1,000 pieces of Levis (various colors notwithstanding) and this number will be maintained. The other way of replenishing is through manual transfer. Mr. Nair says, “I raise a transfer from the corporate office. The buying and merchandising team will generate a Stock Transfer, from say, the Bhiwandi DC to the Malad store. So the DC will pick from the generated pick list which will direct the warehouse personnel to the exact isle, rack and slot.” While local stores are replenished on a daily basis, the outstation stores are replenished two or three times every week. Mr. Nair adds, “Retail supply chain is not an easy task because one has to pick the correct SKU. Retail supply chain does not comprise

mere movement of cartons. The tough part is to pick that exact medium size which a customer is looking for in a particular store.”

reduced shrinkage rate At a time when retailers caterwaul about the high shrink percentage at warehouses or stores, Shoppers Stop has brought down its shrink rate to less than 0.5 percent, thanks to a robust process implemented across its warehouses and stores. Mr. Nair says, “Our high shrink rate was the lack of proper accounting on our part, and not due to theft. The stocks were earlier scattered and were left unaccounted for. We needed to rectify this problem.” Swiftly, Mr. Nair and his team took the matter in hand. Taking INDIA |

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< cover story

The retail company has installed Perpetual Inventory Count System that helps it scan every piece before being accepted.

For shoppers stop, it is the deployment of numerous technology packages that help it run operations smoothly. recourse to technology, the retail company installed the Perpetual Inventory Count System (PICS). Now when stocks arrive at the stores from the DC, every piece is scanned before being accepted. The store also ensures that it hands out bills to the customer for every purchase made. Although Mr. Nair concedes that some theft and pilferage cannot be avoided, it can be minimized by a daily cycle count. For better results, the supply chain team began stock taking using an assortment of personnel from diverse departments. Now, every day, before closing, stocks are

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counted, checked and tallied by the respective team and inventory counting is done. In a quarter, the chain’s entire stock taking is completed.

Best Practices Running such massive operations requires a lynchpin. For Shoppers Stop it is the deployment of numerous technology packages that help it run operations smoothly. Way back in 1999, the retail company adopted the then highly popular retail ERP package, JDA AS 400. “The ERP suite is the merchandise management system (MMS). Close on the heels of that, we implemented the warehouse management system (WMS), then auto replenishment, and later PICS. Our finance team employs Oracle Finance and Arthur Planning for the budgeting,” elucidates Mr. Nair. At the warehouse, the retail company uses a scanning tool, Distribution Center Management System (DCMS). Using DCMS helps the worker download each picking request on a

wireless handheld scanner, which is then used to scan merchandise directly from the storing slot. In the case of a picker reading the wrong merchandise, the scanning device throws up an error beep. This has helped personnel who are picking at the warehouses process requests faster. Implementation of WMS was a turning point for Shoppers Stop. Mr. Nair says, “Today when I speak of our supply chain, I will speak of two eras – one before JDA AS/400

and one after that.” Before the implementation of JDA AS/400, the company was highly dependent on people. “Previously, if the person responsible for overseeing a particular brand was absent from work, there would be no replenishment of that particular stock. This was because only he knew where the stocks were stored. At that time, we believed in the concept of cartons rather than the slotted angle racks that are used today,” says Mr. Nair.

The WMS maintains a record of every rack and slot in the system. It knows the number of pieces that can be stacked on a rack and within the slot. Different racks are allocated for different brands. “WMS is the key to our supply chain,” says Mr. Nair, adding that the primary aim is to control movement and storage of SKUs, while processing associated transactions such as shipping, receiving and picking. “It provides computerized instruction to handle receipt of stock

and returns, manage the logical representation of the racking and stock within the facility and enables seamless links to order processing and logistics management to pick, pack and ship SKUs out,” he adds. WMS has helped Shoppers Stop reduce the merchandise turnaround time from DC to stores to 24 hours. The Auto Replenishment System minimizes the reaction time and raises a replenishment trigger, while WMS minimizes processing of the INDIA |

The stores work on the Pentagon model which comprises Place, Product, Value, People, and Communication.

March 2012 | www.logisticsweek.com 29

< cover story Landmarks 1991

Opened first store at Andheri, a Mumbai suburb, selling menswear

1992

Introduced women’s wear

1993

Added children’s non-apparel sections

1994

Introduced Loyalty programme, First Citizen

1995

Opened second store in Bangalore Shoppers Stop incorporated as a body corporate

1999

Implemented JDA Retail ERP Opened fifth store in Delhi

2000

Acquired Crossword Awarded Most Admired Apparel Retailer of the Year at Images Fashion Awards

2002

Opened tenth store ‘CEO of the Year’ and ‘Retailer of the Year’ at CMAI Awards

2003

IT User Award for the best IT practices

2004

Opened 15th store in Kolkata Images Retail Award for the ‘Most favoured retail destination for the year’

2005

Opened 20th store in Ghaziabad

2006

Launched Mothercare in India and F&B outlets BRIO and Desi Café Bought 45 percent of Timezone India ‘Retailer of the Year’ at Images India Retail Forum

2007

Joined 50:50 joint venture with Nuance Group for Airport Retailing Signed MoU with the Home Retail Group of UK to enter into a franchise arrangement for the Argos formats of catalogue and internet retailing ‘Retail Destination of the Year’ at Images Fashion Forum

2008

Awarded ‘Emerging market retailer of the year’ at World Retail Congress in April ‘Department Store of the Year’ at Star Retail Awards

2009

Most Admired Fashion Retailer Destination of the Year at Images Fashion Forum

2010

Acquired 51 percent stake in Hypercity Retail (India) Limited 36 stores Winner of Customer and Brand Loyalty in Retail sector at Loyalty Summit Award

2011

49 stores in 22 cities Winner of Customer and Brand Loyalty in Retail sector at Loyalty Summit Award

2012

51 stores in 22 cities replenishment trigger at the Distribution Center to provide 100 percent availability of merchandise. Today, the DCs operate round-the-clock, supplying stock to store much before the first customer has walked in. The software offers another advantage to the supply chain team. “Sitting in my office in Malad (Mumbai), I have the privilege to view the exact stock (SKU, brand, style and color) at the four DCs. I also know the number of transfers allocated by

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auto replenishment and those pending. Every morning the team gets an update and the DC is required to offer an explanation for any default,” states Mr. Nair. For administrative purposes, the company has chosen to retain the central WMS server and a standby at the head office in Malad. Back in 1998, with only three stores, Shoppers Stop had spent a considerable sum of money on WMS and “it was worth it” smiles Mr. Nair. “I think that was the game changer.”

Shoppers Stop follows the triangle model which consists of Supplier, IT and Logistics. The Triangular model is a lean design, with the supply chain network spread out evenly between the vendors who supply goods to various logistics players, who in turn using various IT tools, fulfill customer demand. The other model used, the Pentagon model, is what the customers see when they go to the stores. The model comprises Place, Product, Value, People, and Communication. The Pentagon model is dependent on the location of the Distribution Centre, the product, its price and quality, the service skills of staff in the stores, the ambience of the store and the deft positioning of the product and promotion campaigns. However, Mr. Nair emphasizes that, “if you are strong in the Triangular model, you will succeed in the Pentagon model.”

supply chain costs Commendably, the retail giant has also kept its supply chain costs low— to less than one percent, and one percent of the overall sales. Probably it is the lowest in the country. “Our DCs deliver commendable service levels comparable to the best of the world’s DC operations,” adds Mr. Nair. Mr. Nair explains, “A reason for the low supply chain costs is because we have opted to outsource those processes that could be outsourced since 1995. Moreover, we have a policy to work with the same partners for a long time. In fact, we have not changed our logistics partners in the last 15 years. This gives us a cutting edge.”

the Logistics service Providers

Back in 1998, when Shoppers Stop had only three stores, a considerable sum of money was spent on WMS, which proved to be the game-changer.

The overall logistics operations of Shoppers Stop are managed by three logistics partners—the Bhiwandi and Kolkata DCs are managed by Toll Logistics, while the Delhi and Bangalore DCs are managed by local players with apparel handling experience. The outsourcing process began in INDIA |

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< cover story 1995 when the retail company opened its second outlet at Bangalore. “That was the time when we thought of outsourcing, as we realized our expertise lay in retail and not logistics,” says Mr. Nair. Even the 500 people working in DCs are outsourced by the logistics partners. “We renew the contract with the companies frequently,” explains Mr. Nair. “Shoppers Stop is an excellent retail house to work with. They are fair, law-abiding, transparent, and always open to suggestions. We have spent about 12-13 years together and it has been a wonderful journey,” says Shashwat Raizada, Managing Director, Shashank Steel Industries Pvt Ltd., the LSP for the Delhi DC. However, the logistics companies have to fulfil certain stipulations in terms of quick delivery. Mr. Nair opines, “From survival of the fittest, it is now survival of the fastest. The challenge for us is the pace at which we can turn around stocks at our DCs. Can we do it in 24 hours from the time

I receive the stocks? That is one benchmarking we have done.” Mr. Raizada agrees with Mr. Nair, “Delivering the right products at the right time and in the right quantities - that is the most important part of any agreement.” Another benchmark which Shoppers Stop has set for itself is sending across atleast 99.9 percent of the stock lying at the DCs to the stores. And, finally, ensuring the lowest shrinkage.

supply chain Woes Dealing with 1,000 suppliers on a regular basis cannot be idyllic. But Mr. Nair finds it manageable. It is the problems outside the ambit of the company that irk him. A prickly problem is the waybill, the road permit form used in several states. Mr. Nair says it is tiresome that to send goods to Kolkata requires filling of several forms. Although the forms can be filled online now, each form has two parts. “For us, supplying forms to 1,000 suppliers for each dispatch is an infliction,” he adds.

Many states in India follow the waybill format. For example, In the NCR region, without furnishing the forms, one cannot transport goods. Add to that poor road conditions and the time taken in transit, not to forget the damage to the goods en route. Disclosing an example of transporting goods of Home Stop that involves importing crockery and cutlery from Turkey, he says, “They come safely from Turkey to India. But it is in transit here that the goods received are found damaged.” Albeit despite all the supply chain hurdles, Shoppers Stop has emerged as an exceedingly popular retail house in the country, indefatigably beating its way to the top. With more than 20 lakh loyal customers, the backend supply chain works tirelessly to meet buyer demands. With better logistics technologies being implemented, the company is looking forward to a better and brighter future. Not to forget the man heading it all–Mr. Devadas Nair.

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< EmploymEnt SpEcial

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Salary Survey Report 2012 In an exclusive to LOG.India, Logistics Executive shares its compilation of Salary Survey Report 2012 that covers the entire spectrum of salary bands and geographical territories in India. The analysis has been drawn from the Logistics Executive Global Survey. METHODOLOGY The research and information contained within this report has been compiled by Logistics Executive from research undertaken and intelligence gathered in the course of its everyday business activities. Logistics Executive was founded in 1999 and has offices in Australia, Singapore, Hong Kong, China, India and Dubai. Specialising in Logistics & Supply Chain, the company has an active database in excess of 90,000 logistics and supply chain professionals. Information contained within this report is compiled from data contained with our extensive database, business acquired intelligence and regular research surveys, which includes the Global Employment Market Report (now in its 6th year). The Global Employment Market Report is an online survey of approximately 10-15 minute duration and was emailed to more than 45,000 people within the Supply Chain & Logistics Industry in late 2011. About 3,550 respondents completed the survey. NB: The results are purely indicative in terms of overall trends within the industry. Further to this, Logistics Executive undertook a series of interviews with HRD‘s and HR Personnel validating this data and this information has been incorporated into the final document produced. Sources for this particular research includes: n Human Resource Director Interviews n Business briefing provided by CEO’s of leading 3PL companies n Logistics Executive’s Employment Market Report data from late 2011 n Logistics Executive’s business intelligence database n Candidate and Client interviews (conducted by Logistics Executive)

Whodunit

Logistics Executive is a global Human Resources and Recruitment Consultancy which opened its India office in March 2010. In the two successful years since, the company has established its place in the Indian market with a professional reputation and commitment to providing a valued service and expertise in talent management and acquisition strategies for both local and international clients. To mark this two-year milestone Logistics Executive, in conjunction with LOG India have released the first salary guide report for the Indian Supply Chain and Logistics market. Moving forward this Salary Report will be compiled as an annual contribution. We thank our clients and the market place as this report has been compiled with their goodwill, covering a breadth of salary bands and geographical territories in India with a focus on Supply Chain and Logistics. The analysis in this report comes from the Logistics Executive Global Survey, released in December 2012, in-depth interviews with our clients and statistical reference to our candidate database.

INDIA |

Darryl JuDD, Chief Operating Officer, Global Operations, logistics Executive

March 2012 | www.logisticsweek.com 35

< EmploymEnt SpEcial

s an emerging economy India has proudly met challenges. Whilst continued growth seems a given, growth at the same rate will persist only if there is substantial focus on the roles played by the Logistics and Supply Chain sectors as critical support systems. Recent studies show that economic growth is increasingly supported by robust industrial growth and a strong logistics and supply chain. To keep pace with this trend there has been an increase in demand for skilled talent in this sector. The Indian market generally is slated to grow in excess of $120 billion by 2014 (according to a Frost & Sullivan report). Manufacturing alone has grown at 8 percent annually over the past decade and since 2010 has started to contribute a substantial share to India’s GDP rather than agriculture, according to a Goldman Sachs Global Economic Paper 2011 report. There have been countless articles written, describing the critical nexus between the need for reform in the supply chain sectors and the success of the Indian economy.

the talent challenge There is nothing new in touting these three elements: attraction, development and retention when discussing talent. However, there has never been a more tangible connection between the supply of a talented supply chain workforce and the continuing rate of India’s success.

attracting professionals According to the Logistics Executive Salary Report for India, despite a mild slowdown in the rate of economic growth, there has been a rapid increase in salary inf lation. This is supported in a recent article published in The Economic Times (Feb.2,2012), which states that “Employees in India have been getting double digit (sic salary) increments past two years, which will continue in 2012 as well”. The huge demand for talented and skilled professionals has manifested in an unsustainable salary war. Outside of basic salary, organizations are increasingly moving towards Pay for Performance compensation structures and linking huge percentage of variable pay component directly with performance. In several cases, organizations are increasingly taking company performance as one of the qualifiers to decide on the variable compensation payout to employees. This manifests in companies battling for skilled candidates to keep up with the rapid expansion of local companies and multinationals. There are a number of factors that lie behind the talent shortage in India. In real terms, the Indian market has had to deal with an unprecedented growth in infla-

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tion and emerging industries, replacing the demand for traditional skill-sets. Staff turnover continues to rise as employees try to keep up with these pressures and move jobs to improve their remuneration. Most of the respondents at the executive level approached by Logistics Executive indicated that the ongoing salary war will have a negative impact on business. Due to talent shortage, employers are forced to take in young graduates with little experience and offer them much higher salaries and promises of rapid promotion. Employees who are lured by higher salaries are not developing the skills and experience that comes with reasonable tenure in a given role and may not be as capable as their overseas counterparts. This will perpetuate the need to import executive level talent from overseas to fill these shortages. At some point salaries will level out due to market forces. The fallout will be an inadequately skilled workforce. This artificial salary war can be detrimental for India’s long-term growth, as overinflated salaries will price the country out of the global market. This is being faced in China where salaries are no longer as modest or competitive as they used to be. Multinationals are turning to other less developed countries such as Vietnam and the Philippines to establish their industries with lower workforce costs and other attractive incentives. According to an EBN Online article (Differences & Similarities in Asian Supply Chain Wages - 27 Dec 2010), salaries for supply chain professionals are no longer markedly different between Asia and the US. According to Marc Herman from EBN, “Though it is common to hear that manufacturing has moved to Asia to save labor costs, getting components and finished goods back from across the Pacific is costly and complicated”. As a result, there is a trend for the US, in particular, to move their manufacturing closer to home.

Geographic Break Up An interesting finding in the Logistics Executive Salary Report is that the salary structure across the four metros, for similar roles and responsibility, varies. Mumbai commands the highest salaries (mid-to senior-tier). The biggest factor contributing to the salary inflation is the high cost of living in Mumbai as compared to other key cities. Delhi, Bangalore, Chennai and Kolkata also see this trend. From a corporate perspective, this highlights the need to appreciate local disparities and have a certain amount of decision-making in local markets, backed by a uniform top-down approach. Moving job roles or industries geographically may also be another strategy to address the issue of rising salaries and workforce expectations. In this respect, companies with a wider footprint have an advantage as they have

more capacity to move their employees around with the incentive of offering them opportunities.

the leadership Gap The salary gap narrows as we move up the ladder. Mumbai and Delhi lead the pack in C-Suite compensation, followed closely by Bangalore and Chennai. The connectivity of these cities to the rest of the country and ease of carrying out business, are some factors that make them favorable as corporate centers. This is due to a gap in the market for people with broad management abilities. This is particularly true of the supply chain industry where, since the global financial crisis, there have been ever-increasing skill demands placed on these professions to take on a higher degree of leadership within organizations. About 86 percent of respondents believe that leadership skills and the ability to think strategically will be critical to their organizations’ ongoing success. The high salaries for executives across the different Indian provinces demonstrates how much in demand this leadership expertise is and how universally difficult it is to source. Tackling employment satisfaction from the angle of salary alone is not the answer. According to our survey, counter offers don’t work in more than 68 percent of cases and those who accept it, tend to leave the company in next 12 months in most cases. This figure could vary depending on the level of role, responsibilities and geography. For those with skills that are high in demand, employers try to retain them although it may not be very successful in the long-term. The common method of retaining talent is by paying extra dollars, but in most cases the core issues are not completely addressed and that leads to resignations.

Widening the net Another way of countering the skill shortage would be for companies to expand their talent pool to non-traditional sources. This may involve setting up schemes that offer more roles to women and education programs for unskilled workers. Collaboration, with universities and other community organizations, will facilitate this training to ensure that the correct skill gaps are being addressed and companies are getting the skills they need out of their new graduates. Otherwise, they may need to continue to source their key skill-gaps from overseas in areas such as leadership and technical disciplines.

Beyond the Salary War It is no surprise that salary is a key issue. Overwhelmingly, more than 88 percent of respondents indicated that they were seeking a salary increase way beyond India’s present annual inflation rate of 8 percent. Furthermore,

employee expectations are some of the highest in the world, with the vast majority of respondents seeking salary increases that exceed global averages for emerging countries – 51 percent are seeking an increase greater than 20 percent. Remuneration is a necessary ingredient not only to keep up with market conditions but also to acknowledge market parity and the increased responsibilities being placed on supply chain professionals. It is, however, only part of the solution.

talent Development It was noted in the Logistics Executive 2011-2012 Global Employment Market Report that career development topped the career satisfaction list. About 23 percent of the respondents indicated that career development is a key reason for them to change. This is only topped by salary as a main motivator by a short number at 27 percent.

The common method of retaining talent is by paying extra dollars but in most cases the core issues are not completely addressed.

In terms of development opportunities, the Logistics Executive 2011-12 Global Employment Market Report found that 76 percent of business leaders in India perceived they offered a satisfactory level of training. However, on the employee side there was an increase in workplace movement to other organizations, stating their main reason was lack of development opportunity. Perhaps there is a need for the Human Resources function to shift their focus from traditional means of engagement towards a broader approach? According to Kim Winter, Logistics Executive’s Global CEO, the answer lies somewhere in the middle. With Executives and HR focusing on retention and attraction, they are missing the middle piece here – developing existing talent. “It could be argued that if companies developed their own people, they would end up with more talent than they could handle,” adds Mr. Winter. INDIA |

March 2012 | www.logisticsweek.com

< EmploymEnt SpEcial

Industry / Supply Chain Management

Survey Findings Position

Mumbai

Chennai

Delhi

Bangalore

Pune

Hyderabad

75 - 1.5(Cr)

75 Ð 1.0(Cr)

75 Ð 2.0(Cr)

75 Ð 1.0(Cr)

75 - 1.5(Cr)

50 Ð 1.0(Cr)

Supply Chain VP / Director

45 - 75

30 - 50

40 - 75

25 - 39

36 - 40

24 - 45

Logistics Director

35 - 75

25 - 45

25 - 75

25 - 45

25 - 50

25 - 35

15 - 20

7 - 15

15 - 20

10 - 15

7 - 20

7 - 16

Warehouse / DC Manager

6 -9

5 -8

5 -7

3 -8

6 -8

Warehouse/Operations Executive

2 -6

2 -5

1-4

Lean / Quality / Six Sigma Manager

8 - 20

8 - 15

9 - 15

8 - 15

9 - 12

8 - 12

5 -7

2 -6

4 -7

2 -6

3 -6

2 -7

25 - 50

25 - 35

10 - 14

6 - 12

7 - 13

8 - 13

5 -9

5 -7

2 -5

1 -4

2 -4

MD / GM Logistics

Operation / Warehousing Regional Logistics Manager

Logistics Specialist Procurement / Purchasing

Logistics Service Providers (LSP/3PLÕs) 35 - 75 30 - 45 30 - 70 25 - 50

Procurement VP / Director Senior Procurement Manager Position

Senior CEO / MDQuality / CountryManager Manager

Mumbai

12 - 20

Chennai

7 - 15

Delhi

10 - 15

Bangalore

Pune

9 - 12

Hyderabad

75 - 4.0 (Cr)

15(Cr) 508 - -2.0

General Manager Sourcing Manager

24 - 35

30 822- -15

20 4 - 35-

Regional Manager

20 - 25

14 - 20

9 - 14

4 -7

4 -8

6 -8

- 50

30 - 40

30 - 45

35 - 45

18 - 23

25 - 28

National Sales Manager 25 - 35 Supply Chain Manager Regional Sales Manager / Planning / Forecast Manager 12 - 17 Territory Manager

17 -- 18 24 12

2512 - 35-16

17 - 35 12

-1618 - 23

8 - 25 17 - 28

15 712- -10

15 5 -24-

11 - 155

13 - 15

8 - 15

5 -7

12 - 15

8 - 12

6 - 15

8 - 12

10 - 16

8 8-- 12 16

8 - 15 9 - 12

8 - 12

Inventory Manager Sales Executive

3 -7

53 -- 77

3 3 -5-

4 -5

2 -5

3 - 53

Marketing Manager Inventory Controller

4 -7

34 -- 77

3 -15 -

4 -7

2 -3

2 -5

2 - 63

Purchasing Manager Branch Manager

Purchasing Officer Sales & BD

6 - 10

Inventory, Planning VP / GM / Sales Director & Demand41

BD Manager (3PL)

8 - 15

BD Manager (Freight)

7 - 15

Planner

Commodity Manager Key Account Manager

4 -7 2 -5

8 (Cr) -11 50 - 2.5 (Cr) 8 - 15 - 14 75 - 4.0 50 - 1.5 (Cr) 7 50 - 1.5 (Cr) 7

5 -7 2 -4

3 -4 6 -9

24 - 308

- 15 20

5 -9

6 -8

2 -5

-9

- 30

8 - 16

5 -7

8 - 15

7 - 11

5 -7

7 -9

8 - 10

2 -5

4 -9

9 - 10

4 -7

-5

5 -7

4 -7

-5

2 -5

3 -7

15 - 25

8 - 11

10 - 12

5 -7

13 - 15 5 -8

9 - 11

10 - 12

9 - 13

20 - 30

15 - 20

18 - 826- 12

15 - 20

25 - 34

7 - 14

11 - 14

2 -4

25 - 40

7 -12

3 -6

7 - 10

9 - 13 9

8 - 12

3 -5

7 - 20 11 - 30

9 -11

6 -

2 -4

6 - 11

8 - 17 3 -7

Operations

Consulting & Project Management 3PL Contract Manager

Supply Chain Consultant Warehouse/Operations/DC Site

30 - 45

13 - 15 Manager Project Implementation Manager Warehouse/Operations Executive 5 - 10

Project Manager Import/Export Manager Air Freight / Sea Freight Manager Transport Shipping Clerk

General Manager Transport

2 -5 10 - 17 3 -5

Project Manager

28 - 35

30 - 40

28 - 35

20 - 30

8 - 10

8 - 12

8 - 10

12 - 35 9 6- -17 8 9 3- -20 5

8 - 15

11 - 16

5 -8

10 - 14

5 - 10

2 -4

12 - 15 2 -4

6 - 10

6 -9

5 -8

2 -4

3 -5

2 -4

20 - 30

National Distribution Head Project Implementation Manager

10 - 16

25 10 -- 50 12

1022 - 16-24

23 10 - 14

Project Distribution Manager Ð WMS/TMS Zonal Manager

10 - 22

14 -- 16 22 12

11 6- 14 - 11

12 - 17 10

Transport

Transport Controller

General Manager Transport

5 -7

20 - 30

20 - 40

20 - 45

20 - 30

20 - 40

18 - 25

15 -- 75 20 30

1830 - 24-

National Compliance Manager Area Sales Manager

6 - 12

126 -- 10 15

Site Manager

9 - 15

Fleet Manager

5 - 10

Sales & Marketing National Transport Manager Line-haul Manager Sales Director

Regional Brand Director Regional Brand Manager Workshop Manager

Territory Sales Manager

20 - 45

4 -6

20 - 30

5 9 - 10- 12

15 - 20 30 5 - 812 8 -12

6 -8

5 -8

5 - 10

7 - 12

15 - 20

3 7- 6-

6 -10

20 - 30 20 - 30

- 7515 - 16

- 20

5 -8

8 -12

15 - 30

3 - 58

- 14

1410 - 12

5 -7

10 - 15

153 -- 25 5

- 3010

20 - 30

8 -12

15 - 35

- 19

5 -8

9 - 12

18 - 20

2 - 413

20 - 30

5 -8

20 - 30

210 -5-

15 - 35

- 15

5 -10

5 -7 3 -5

2 -4

9 -

12 13 - 14

4 -6

20 - 30 20 - 30

30 -12 45- 18 12 -

5 -8 16

9 - 11

7 - 10

15 - 22

13 - 22

10 - 16 2 -5

13 - 15

7 - 11

6 -9

3 -8

8 -12 5 -8

5 -9

data is shown as a range from low Ð high and is displayed as an Annual Base Salary in Lakhs Per Annum. Salary Additional benefits such as annual bonus, company vehicles or travel allowances may apply. (Cr) = Crores.

Salary data is shown as a range from low Ð high and is displayed as an Annual Base Salary in Lakhs Per Annum. | Additional benefits such as | annual bonus, company vehicles or travel allowances may apply. (Cr) = Crores.

INDIA March 2012 www.logisticsweek.com 38 Disclaimer: Logistics Executive is committed to the highest standard and quality of information and every attempt has been made to present up-‐to-‐date, accurate information. The information contained herein is general in nature and is not intended as, and should not be construed as professional advice provided by Logistics Executive to the reader. While every effort has been made to offer current and accurate information, errors can occur. Much of this information is obtained from records that for reasons of privacy are confidential. This information is provided as is, with no guaranty of completeness, accuracy, or timeliness, and without warranty of any kind, expressed or implied, including any warranty of performance,

Logistics Service Providers (LSP/3PLÕs) Logistics Service Providers (LSP/3PLÕs) Logistics Service Providers (LSP/3PLÕs) Mumbai Chennai Delhi Bangalore Pune Hyderabad

Position Position Mumbai Chennai Delhi Bangalore Pune Hyderabad CEO / MD / Country Manager 75 - 4.0 (Cr) 50 - 2.0 (Cr) 75 - 4.0 (Cr) 50 - 2.5 (Cr) 50 - 1.5 (Cr) 50 - 1.5 (Cr) CEO / MD / Country Manager 75Mumbai - 4.0 (Cr) 50Chennai - 2.0 (Cr) 75 -Delhi 4.0 (Cr) 50 - 2.5 (Cr) 50 -Pune 1.5 (Cr) 50 - 1.5 (Cr) Position Bangalore Hyderabad General Manager 24 - 35 22 - 30 20 - 35 24 - 30 20 - 30 20 - 30 General Manager 24 - 35 22 - 30 20 - 35 24 - 30 20 - 30 20 - 30 CEO / MD / Country Manager 75 Regional Manager 20- 4.0 - 25(Cr) 50 14- 2.0 - 20(Cr) 75 14- 4.0 - 20(Cr) 509 - -2.5 14 (Cr) 508 - -1.5 16 (Cr) 507 - -1.5 10 (Cr) Regional Manager 20 -- 25 14 -- 20 14 -- 20 9 - -14 8 - -16 7 - -10 General Manager 24 35 22 30 20 35 24 30 20 30 20 Branch Manager 6 - 10 4 -7 4 -8 6 -8 6 -8 5 - 730 Branch Manager 6 - -10 4 -- 720 4 -- 820 8 8 7 Regional 20 25 14 14 96 -- 14 86 -- 16 75 -- 10 Sales & BDManager Sales & BD Branch 10 7 8 8 8 7 VP / GM / Manager Sales Director 416 --50 304- -40 304- -45 356- -45 186- -23 255- -28 VP / GM / Sales Director 41 50 30 40 30 45 35 45 18 23 25 28 Sales & Sales BD Manager National 25 - 35 17 - 24 25 - 35 17 - 35 18 - 23 25 - 28 National Manager 25 17 25 17 18 25 VP / GM Sales /Sales SalesManager Director/ 41 -- 35 50 30 -- 24 40 30 -- 35 45 35 -- 35 45 18 -- 23 23 25 -- 28 28 Regional 12 - 17 12 - 15 15 -24 11 - 15 13 - 15 9 - 13 Regional Sales Manager / Territory Manager National Sales Manager 25 35 17 24 25 35 17 35 18 23 25 28 12 - 17 12 - 15 15 -24 11 - 15 13 - 15 9 - 13 Territory Manager BD Manager (3PL) 8 15 8 15 12 15 8 12 8 12 8 10 Regional Sales Manager / 12 17 12 15 15 --24 11 15 13 15 BD Manager (3PL) 8 - -15 8 - -15 12 15 8 - -12 8 - -12 89 - 13 10 Territory Manager BD Manager (Freight) 7 - 15 6 - 15 8 - 15 8 - 12 7 -12 6 - 11 BD Manager (Freight) 7 - 15 15 6 -- 15 8 - -15 8 - 12 7 --12 6 - 11 BD Account ManagerManager (3PL) 15 15 12 12 Key 108 -- 16 88- 16 912- 12 88- -12 98-11 38 --710 Key Account (Freight) Manager 10 - 16 8 - 16 9 - 12 8 - 12 9 -11 3 -7 BD Manager Sales Executive 37 --715 36 --715 38 --515 48 --512 27 - -12 5 36 -- 511 Sales Executive 3 -7 3 -7 3 -5 4 -5 2 -5 3 -5 Key Account Manager 10 Marketing Manager 4 - -716 48 -- 716 39 --512 48 -- 712 29 - -11 5 33- -57 Marketing Manager 4 7 4 7 3 5 4 7 2 5 33 -- 55 Sales Executive 3 -7 3 -7 3 -5 4 -5 2 -5 Operations Operations Marketing Manager 7 7 5 7 5 5 3PL Contract Manager 304- -45 28 4 - -35 303- -40 284 - -35 20 2 - -30 20 3 - -30 3PL Contract Manager 30 45 28 35 30 40 28 35 20 30 20 30 Operations Warehouse/Operations/DC Site 13 - 15 8 - 10 8 - 12 8 - 10 8 - 10 5 -8 Warehouse/Operations/DC Site Manager 3PL Contract Manager 30 -- 15 45 28 35 30 40 28 35 20 30 20 13 8 - -10 8 - -12 8 - -10 8 - -10 5 --830 Manager Warehouse/Operations Executive 5 10 6 8 5 8 5 10 5 7 5 -8 Warehouse/Operations/DC Site 13 15 86 -- 10 85 -- 12 10 85 -- 10 Warehouse/Operations Executive 5 - -10 8 8 58 -- 10 7 55 -- 88 Manager Import/Export Manager 2 -5 3 -5 2 -5 2 -4 2 -4 2 -4 Import/Export Manager Executive 2 - 10 5 3 -5 2 -- 58 2 - 10 4 2 -4 2 -4 Warehouse/Operations Air Freight / Sea Freight Manager 105 --17 56- -88 9 5- 12 65- -10 65- -97 55- -88 Air Freight / Sea Freight Manager 102 -- 17 5 -8 9 - 12 6 - 10 6 -9 5 -8 Import/Export Shipping Clerk Manager 3 - 55 23- -45 32- -55 22- -44 22- -44 22- -44 Shipping Clerk 3 -- 517 25 -- 48 5 4 26 -- 49 25 -- 48 Air Freight / Sea Freight Manager 10 93 -- 12 62 -- 10 Project Manager Project Manager Shipping Clerk -5 4 -5 4 4 -4 Project Implementation Manager 103- 16 102- -12 103- 16 102- -14 102- -14 8 2- 12 Project Implementation Manager 10 16 10 12 10 16 10 14 10 14 8 12 ProjectManager ManagerÐ WMS/TMS Project 10 - 22 14 - 22 11 - 14 12 - 17 10 - 12 12 - 14 Project Ð WMS/TMS 10 22 14 11 14 12 10 12 14 Project Manager Implementation Manager 10 -- 16 10 -- 22 12 10 -- 16 10 -- 17 14 10 -- 12 14 8 -- 12 Transport Transport Project Manager Manager Transport Ð WMS/TMS 10- -45 22 14- -30 22 11- -40 14 12- -30 17 10- -30 12 12- -30 14 General 20 20 20 20 20 20 General Manager Transport 20 - 45 20 - 30 20 - 40 20 - 30 20 - 30 20 - 30 Transport National Transport Manager 20 - 45 20 - 30 20 - 40 20 - 30 20 - 30 20 - 30 National Transport Manager 20 45 20 30 20 40 20 30 20 30 20 30 General Manager 20- -25 45 20- -20 30 20- -24 40 20- -20 30 20- -20 30 20- --18 30 Line-haul Manager Transport 18 15 18 15 15 12 Line-haul Manager 18 25 15 20 18 24 15 20 15 20 12 18 NationalCompliance Transport Manager - 45 - 30 - 40 20 20 20 National Manager 620- 12 620- 10 520- 10 5 - -830 5 - -830 5 - -830 National Compliance Manager 6 12 6 10 5 10 5 8 5 8 5 -8 Line-haul Manager - 25 18- -15 24 Site Manager 918- 15 815- 1- 220 10 815- 1- 220 815- 1- 220 812- 1- 218 Site Manager 9 - 12 15 8 -12 10 - 15 8 - -182 8 -12 8 -12 National Compliance Manager Fleet Manager 56- -10 66 --810 55 --810 5 5- 10 55- -78 55- -88 Fleet Manager 5 - 10 6 -8 5 -8 5 - 10 5 -7 5 -8 Site Manager 10 Workshop Manager 49 - -615 38 -- 51 2 3 - -615 38 -- 51 2 38 -- 51 2 28 -- 51 2 Workshop Manager 6 36 -- 58 35 -- 68 5 35 -- 57 25 -- 58 Fleet Manager 54 -- 10 53 -- 10

Workshop Manager 4 -6 3 -5 3 -6 3 -5 3 -5 2 -5 Salary data is shown as a range from low Ð high and is displayed as an Annual Base Salary in Lakhs Per Annum.

Salary data is shown asas a range low company Ð high and is displayed as an Annual Base in Lakhs Per Annum. Additional benefits such annualfrom bonus, vehicles or travel allowances may Salary apply. (Cr) = Crores. Additional benefits such as annual bonus, company vehicles or travel allowances may apply. (Cr) = Crores. Salary data is shown as a range from low Ð high and is displayed as an Annual Base Salary in Lakhs Per Annum. Disclaimer: Additional benefits such as annual bonus, company vehicles or travel allowances may apply. (Cr) = Crores.

Logistics Executive is committed to the highest standard and quality of information and every attempt has been made to present up-‐to-‐date, accurate Disclaimer: information. The information contained general ian nd nature and not intended as, and sahould not be bceen onstrued s present rofessional advice accurate Logistics Executive is committed to the hherein ighest is standard quality of is information and every ttempt has made tao up-‐to-‐date, Disclaimer: provided by Logistics Executive contained to the reader. While every ein ffort has abnd een to offer caurrent nd accurate can occur. Much of information. The information herein is general nature is m nade ot intended s, and sahould not be icnformation, onstrued as eprrors rofessional advice Logistics E xecutive is E committed tecords o the htighest tandard and quality f icnformation very attempt been maade o ith present ucp-‐to-‐date, accurate this information is obtained from tro hat for reasons o f epffort rivacy are onfidential. Tnd his ceiurrent nformation is hpas rovided s is, tw no guaranty of M provided by Logistics xecutive the reader. Wshile every has boeen made to oaffer and accurate information, errors an occur. uch of information. Tahe information contained erein is grweasons eneral ion f onpf ature nd not intended as, ianformation nd including should niot brovided e wcarranty onstrued professional advice completeness, ccuracy, or timeliness, and hw ithout arranty any kaind, or iTmplied, ny ps erformance, this information is obtained from records that for rivacy are ies cxpressed onfidential. his s ap as io s, f aw ith no guaranty of provided by Logistics Executive to the arnd eader. While effort has been mbade o ooffer current and accurate nformation, eerformance, rrors an occur. uch of merchantability, r fitness a particular purpose. Iw n earranty avery ddition, may e mtade ir n implied, this information from tiime to time ithout cn otice to tM he completeness, ao ccuracy, ofr or timeliness, without of cahanges ny kind, expressed including any w arranty of pw this Tinformation btained from records tphat for rm easons privacy are m ctonfidential. his information p rovided ats o is, with no uaranty otf o m user. he reader also s cautioned hat this m aterial ay not obf e applicable o, for, the reader’s is specific circumstances or gn eeds, and ay merchantability, ois r ofiitness for a ptarticular urpose. In addition, changes ay obr e suitable made Tin this information from time time without notice the completeness, accuracy, or timeliness, nd w ithout w ny kind, etxpressed or implied, ny warranty f performance, require onsideration f acautioned dditional actors if m any action is tno be cf ontemplated. reader sfor, hould a sappecific rofessional porior to taking any action user. Tche reader also ois tfhat tahis aterial marranty ay ot boe aapplicable o, Tohe r suitable the icncluding rontact eader’s circumstances or needs, nd may merchantability, or fitness for a particular pif urpose. In aiddition, hanges ay bTe he m ade in this time to time notice the based upon this information. Logistics Executive assumes to m inform the reader of information any ccontact hanges in law, business ew nvironment, or ato o ther require consideration of additional factors any action s nto o obbligation e ccontemplated. reader should af rom p rofessional prior tithout o taking any ction user. Ttuhat he rceader affect lso is the cautioned that Etchis material min. ay nnot applicable o, or suitable for, othe reader’s specific circumstances or needs, aond may based pon this ianformation. Logistics xecutive ahssumes o boe bligation to itnform the reader f any changes in law, business environment, r other factors ould information ontained ere require that consideration of the additional factors if any action is to be contemplated. The reader should contact a professional prior to taking any action factors could affect information contained herein. based upon this information. Logistics Executive assumes no obligation to inform the reader of any changes in law, business environment, or other INDIA | March 2012 | www.logisticsweek.com 39 factors that could affect the information contained herein.

Supply Chain & Logistics 2011/2012 India Salary Survey Report Supply Chain & Logistics 2011/2012 India Salary Survey Report

3 3

< EmploymEnt SpEcial Here we are referring to structuring the whole employee experience. This would start with the first impression of the company through employment branding. This could be followed with attraction strategy. It could then be overlaid with a social element. A flexible training program and conditions of employment could be interwoven in this model. Mr. Winter explains that talent development could encompass a range of options, including “a real Talent Retention strategy to include structured career development, meaningful assessments, relevant KPI’s linked to bonus schemes, career choice options, job re-structuring, and an enjoyable but challenging environment”. By training we aren’t talking about the traditional definition of the word, such as formal courses, but to onthe-job learning. This could be offered not just to a select group of “high performers,” but across all employees. It

more employees are moving from 3pl to shipping or consumer sectors. this has been attributed to improved employment conditions.

is also treating everyone in the business collectively as “the talent”. It will expose them to new areas, which would allow personal growth on the job, but not necessarily directly related to their current roles. In this way it would be possible to retain a large pool of staff simply by offering them exposure to new on-the-job skills. Employees, in turn, would take on responsibility for their own development. This would lead to a culture that is capable of dealing with the high amount of change as employees are constantly encouraged. The approach of treating change as an opportunity and not a threat at the micro level is critical as the capacity to keep up with changing markets is paramount for a company’s survival and competitive edge. It is imperative that there is a workforce mentality that isn’t afraid of change, but sees this as an opportunity.

Work Balance The Logistics Executive Salary Guide discovered another trend. More employees are moving from 3PL to shipping or consumer sectors. This has been attributed to improved employment conditions. Companies are using initiatives such as flexible work arrangements, and working from home, which has proven popular in

INDIA |

March 2012 | www.logisticsweek.com

companies like Proctor & Gamble and Google. Rotation policies, offered by companies such as Maersk Logistics ,offer employees opportunities to gain skills and experience through overseas assignments. The expansions of online companies such as Flipkart.com, Snapdeal.com, Yebhi.com and, very recently ,Junglee.com have attracted talented employees with an entrepreneurial bent. They provide a sense of job satisfaction by a sense of creating something or setting something up. A way of fostering this culture is to give people in the workplace opportunities to seek out new challenges that will provide them with opportunities to test themselves to new levels of performance and ways to connect with others in the workplace. This will attract other likeminded individuals to your organization and enhance employer brand. Mr. Winter adds, “As organizations get flatter, offering career developments can be a challenge, but this can be tackled in many ways such as offering inter-office transfers, job rotation and greater delegation of decision-making down the line. Allowing employees to be involved in “continuous improvement teams” offers both job satisfaction and better results –“a win-win”.

conclusion The employment outlook for 2012 looks positive. The salary outlook remains positive, with an above-average incremental increase of 15-25 percent across all levels. On the flipside, this signifies an intense struggle in the war for talent. In the long term, a salary inflation war is unsustainable and poses a threat to this employment growth. It will be interesting to observe if the year ahead sees the HR function take up the challenge of redefining company culture as a way of improving the total employee experience. In partnering with their Human Resources teams, executives will recognize the broader role these teams can play in achieving commercial success. Through these measures the focus is all about changing the mindset, so that employees are forward thinking and aren’t just ready for change, but will embrace it at all levels. A change-ready company will not only have the competitive edge, but will create a selfperpetuating cycle of achievement. Disclaimer: Logistics Executive has compiled this report using data from which, to the best knowledge of Logistics Executive, was accurate as at the date of the publication. Results published in this report are for the general interest of readers and the industry. All material is published with due care and in good faith, but no responsibility will be accepted for omissions, typographical, or other printing errors or situations that may have taken place after publication. Logistics Executive disclaims all responsibility for any harm or loss arising from use or otherwise of the information provided within the report. All rights reserved. No part of this publication may be reproduced without the prior permission of Logistics Executive.

< Column

Strength In Diversity Dan Henderson, Supply Chain Manager, Global Medical Solutions, Abu Dhabi, UAE shares his personal experience of working with women in the logistics sector and believes women can prove their capability if provided sufficient opportunities.

n the early days of my career, typical roles for women tended to gravitate towards more office or desk type positions—dispatch, expediting, data entry, and purchasing tended to have a higher representation of women than material handling, driving and management. Over the years, I have noticed a cosmic change as more women are being granted opportunities for success. I have grown to understand deeply that to build, improve, grow strong and responsive supply chains, women often play an integral role, just as important as men.

not Suited To A Challenging Role? Men and women are different. There are clear biological differences in both the sexes, but there are also apparent similarities as we are all human; hence the saying ‘same, same, but different’. Individuals are all unique, meaning one is unlike the other. There are many similarities in all of us and one has strengths and weaknesses just as others do. I believe that a common concern within the industry is that women are not typically suited to a more physically challenging role. In my experience this can be as true for some women, as it can hold true for some men. ‘Same, same, but different’. This has established a glass ceiling for women, whereby they enter only certain links within the supply chain. As with all successful recruitment and team building, it is quite an endeavor to match the right individual, with the right requirements, within the right team. The best teams will have a perfect blend of individuals with their strengths and weaknesses to offset one another. The best leaders steer the work towards the teams as per the individuals’ strengths, so that the team as a whole outperforms what any one individual can produce collectively. This is the exponential power of diverse teams.

Cultural Issues Cultural norms have constantly played an impediment in limiting women’s access to certain jobs within the supply chain. Culturally speaking, some men have had issues and concerns over taking directions from women. In other cultures, women may have limited exposure to certain required skills (i.e. driving, education etc.). These barriers dissuade women from applying for the other key positions within the sphere and can limit an organization’s ability to attract candidates from a wider pool of applicants and eventually, limits choice for the organization. In some cases, this can even lead an organization to select an unsuitable candidate. However, over the years I have noticed a sea change as more women are breaking glass ceilings, while taking on increasingly significant roles at all levels and links of the supply chain. I believe this is partly due

INDIA |

March 2012 | www.logisticsweek.com

to a gradual elimination of some of the cultural barriers. As governing bodies impact historical, educational and cultural trends and more women gain access to such fields, the applicant pool is being enhanced by not being limited only to men. As women enter these areas, they are displaying their potential and strengths as well, with many moving rapidly up the organization to the highest levels.

Changing Job Requirements Another factor could be changes and improvements in supply chain processes that create a shift in job requirements. For example, automation and information systems tend to shift job requirements from a more physical to a more intellectual competence. This leads

The best teams should have a perfect blend of individuals with their strengths and weaknesses to offset one another. to a more level playing field and makes less important some of the biological norms that may exist between men and women. This is not to say that some women are not strong enough and whenever speaking in general terms, there are always exceptions. But as automation (AS/RS) and technology reduce the physical requirements for associates, organizations need to match the right individual to changing job requirements. In the end, over the last few years I have worked with women in all areas of the supply chain. I have met husband and wife trucking teams who have been highly successful, both personally and in business. I have worked for highly capable women in Vice President roles that have enhanced my knowledge and career greatly. Not because they were women, but because they were highly capable and successful. In the end it is about matching the individual to the job, based on the individual’s capabilities and the job’s requirements. I hope to continue to work with and for women, as more and more women break through the glass ceilings within the supply chain. Not because they are women, but because they are highly capable and successful, with selection based not on subjective gender, but rather on objective merit. The author can be reached at dan.henderson@gmshm.ae

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A Balancing Act Sensitizing male colleagues, providing work flexibility and security will go a long way in creating a perfect work environment for women to unleash their full potential, says Amit Singh, Head-Talent Management, DHL Lemuir Logistics Pvt. Ltd.

cross industries, women are continually embracing traditionally accepted male dominated roles. Women in financial services, media and FMCG have shattered the proverbial glass ceiling to take up top posts and have proven their capability time and again. The picture is changing in other industries as well. A recent Times of India article reported that women are beginning to undertake key responsibilities for many global beverage Amit Singh brands in the Indian market. However, it Head-Talent is still widely recognized that women are Management, DHL under-represented in most industries and Lemuir Logistics P. Ltd. this gap becomes even more evident as we move up the hierarchy. The logistics industry has served as a traditional bastion for males. This comes as a surprise since the industry is always in need of competencies that are usually associated with women—flexibility, intuition and service orientation. Considering the perfect match, the logistics sector offers a great opportunity to women not only to start a career, but also rise to the highest levels.

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Khans in a male-dominated industry. The industry can play a huge role in attracting, nurturing and promoting female talent. Based on anecdotal evidence, most female university pass outs don’t see the logistics and supply chain fields as a career opportunity. Pradnya Bhandare and Aarti Mishra are currently part of a Logistics Trainee Program within DHL Lemuir Logistics where the trainees are attached to various functions, including gateways and warehouses. “As part of my MBA, I studied a module on supply chain management, but I never thought of the industry as a career opportunity until my friends encouraged me to apply based on a few DHL posters at my campus”, states Pradnya. Trainees like Aarti and Pradnya are unaware of the huge role they play in shattering some of the pre-conceived notions that exist in our workplaces. “When we started our stint at the airport which is predominantly male, it was a two-way adjustment process for us as well as the existing staff”, notes Aarti. “In the beginning, the employees were concerned about our security and encouraged us to leave early. Women at the airport usually don’t hand out documents to transporters etc. However, a little bit of initiative from our side helped us to allay our colleagues’ fears and get involved in work that was usually done by men,” adds Pradnya.

Breaking The Glass Ceiling

Planning For Future Growth

Let’s take the example of Shabana Khan, Director, Air Freight at DHL Lemuir Logistics, India, who is a member of the national management board. She joined the company as a trainee learning day-to-day operations. There were relatively few women in the industry those days and very few who would venture to airports to manage cargo and carriers. Once she was provided with the platform, she strove to deliver her best and was soon promoted as Assistant Manager, Air Exports. After a series of promotions that exposed her to operations, sales and customer service, she took up the role of Regional Manager for Western India, followed by National Operations Manager and Director, Air Freight. In her current job, she heads the largest air freight function within India and is a known name in the industry. The question is how we can create more Shabana

While companies can use existing trainee programs to recruit and develop female leaders, an intervention at an earlier stage may reap more long-term benefits. Most students in India start thinking about their careers during secondary school. Workshops and site visits for such young students, especially girls, can open up the industry to them and help build a brand for companies. Attracting women to the industry is just half the battle won. The key challenge for the supply chain industry is to address root causes that inhibit the growth of female talent within the industry. Unless the current rules of the game are altered, women’s participation in leadership roles within the industry will remain low. Women play the central role in a family and invari-

March 2012 | www.logisticsweek.com

ably spend more time running families as compared to men. This “double burden” is further exacerbated by the lack of social facilities like day care centres etc. in India. Assuming the above to be inherent to our social model, the question arises of how compatible are our corporate models. Popular stories of supply chain leaders usually involve dedicated careers without any breaks, geographical mobility and unwavering availability. So powerful are such stories that we invariably expect our leaders to emulate the same. This expectation is incompatible with the “double burden” carried by women and invariably creates the glass ceiling that prevents the rise of women leaders. As long as our industry processes related to selection, performance and promotion are linked to such expectations, women will find it difficult to take up

models, but they also coach women employees to display their skills and perform more assertively, an area where men are generally more comfortable. To support women employees in this area, DHL Lemuir Logistics has rolled out a specific workshop titled ‘Caste as Women’. Bosky Arora, Head Learning and Development at DHL discloses that “the workshop supports women to connect with female awareness and its struggle against patriarchy within the Indian corporate scenario. The workshop helps to enhance self esteem and inculcates a go-getter attitude in our female employees.” Career breaks for maternity or other reasons should not be seen as a burden, but as an opportunity to provide stretch assignments to other high potentials. Support before, during and after these breaks is critical to ensure smooth reintegration. The key is not to limit such initia-

This industry is in need of competencies that are usually associated with women—flexibility, intuition and service orientation.However, women are under-represented in most industries and this gap becomes even more evident as we move up the hierarchy. management roles. Shabana feels that “Balancing work and family is one of the biggest challenges for working women. The travel and mobility requirements of a managerial role can clash with personal commitments. However, the adoption of flexible work policies and the use of technology can reduce the burden. For example, virtual conferencing will not only save unnecessary travel, but also reduce costs for the company.”

Increasing Participation Having spent a number of years in the industry, Shabana has seen an increase in the number of women at the middle management level and feels that its time to support these women in order to replicate their numbers in the boardrooms across the logistics industry. “Women naturally hesitate to position themselves even though they may perform very well. This may lead to lesser visibility for them in the eyes of key decision makers”, adds Shabana. Therefore, the industry can benefit from mentorship programs and forming women employee networks. Not only do such initiatives bring out female role

tives to women alone as this helps to get overall acceptance and distribution of benefits. One of the biggest challenges that women face while entering a predominantly male workplace is adjustment to language, customs, dress and humor. Jokes and language appropriate in a typically male setting may be offensive to women. Training on sensitizing employees to these issues can help in opening up a subject that is not usually discussed. “Small initiatives like ensuring proper washrooms for women and company transport to far-out or secluded areas can go a long way in convincing women to see the industry as a viable career option,” add Aarti and Pradnya. Making the industry more women-friendly is probably the best talent management strategy as it will open it up to the hitherto untapped talent pool of over 50 percent of our population. Logistics and supply chain companies that achieve this will lead the rest in innovation, productivity and profitability. The author can be reached at amit.singh1@dhl.com INDIA |

March 2012 | www.logisticsweek.com 45

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The Herculean Task As the logistics sector gains in importance, hiring and retaining talent has become the dire need of the hour, notes Chander Agarwal, Executive Director, TCI.

Chander Agarwal Executive Director, TCI

lobalization has called for movement of products across boundaries in a quest to source a better quality product at a competitive price and also focus on efficient logistic management of supply chains from source to destination. With globalization also comes competition, because of which one can already see a shift in the business scenario, wherein companies are increasingly focusing on their core competencies and outsourcing their logistics requirements in order to optimize costs and bring in efficiencies.

Growth Opportunities As newer retail formats emerge in the country, the need for efficient and effective supply chain management is becoming more pronounced. With a buoyant economy, the emergence of India as a manufacturing hub and the boom in exports and imports, the logistics and supply chain management sector will witness strong growth opportunities. In addition, the evolving business landscape and increasing competition across industries, is creating the need for more efficient and reliable supply chain management and logistics services. A widespread perception also exists that the logistics industry is not a good paymaster when compared to other industries, especially the IT industry. However, this is not the case as the sector pays remuneration at par with industry standards in order to attract and retain talent. The logistics sector also faces certain other constraints like lack of awareness about career opportunities in the industry and inadequate marketing of the sector. The sector, too, needs to package and market itself effectively. The advent of good business schools which focus on logistics as a core subject, and good management degrees with a technical bent augur well for this industry.

Job Profiles The scope of jobs in the field of logistics and supply chain management is wide and covers all levels, right from the manual to the specialist. Therefore, the academic background requirements vary from graduation to a specialized degree. Some of the profiles which are available at multifarious levels are basic truck drivers, pilots, ship captains to supervisors of material handling, logistics IT manager, controlling manager, warehouse manager,

distribution manager, operations manager, fleet/transport manager, inventory controller, materials handling engineer, planning manager and system analysts. The sector currently employs about 40 million people, a number that will rise rapidly with exponential growth expectations in the sector. With the scope of outsourcing growing apart from normal transportation to inbound logistics management, outbound logistics management, material management, growing expectations of customers to provide end-to-end solutions and strict requirement of compliances, the sector is becoming increasingly complex and more service oriented. The skill sets required for jobs has also changed dramatically during the last few years. Correspondingly, there has not been an increase in manpower to match these skills. To meet this greater-than-ever necessity, logistics majors such as TCI have begun training manpower in-house. Nowadays, logistics forms an important part in the supply chain management of a business organization. Therefore, a number of job opportunities are available in this field. Logistics, as a career option, brings with it challenges, responsibilities, travel opportunities and satisfactory remuneration too.

Necessary Skills The nature of the work in supply chain management is such that one must have the ability to handle complexities. Some other skills that an individual must possess are: n A person must develop a global mindset with a focus on meeting local requirements, as also a high awareness of the local market, business trends, policies and issues affecting the industry as a whole. n A high level of commitment and a customer centric approach is a desired personality trait for a logistics or warehouse manager. It is critical because employees are expected to be on time, pick orders accurately and put in extra effort to beat schedules. n Warehouse and store supervisors require effective communication skills and adherence to SOPs to provide excellent customer support. n The knowledge of basic computing skills in warehousing procedures is also desirable. Employees necessarily must have knowledge of the use of personal protective equipment, fire safety, warehouse security, safety procedures and manual lifting techniques. The author can be reached at chander@tcil.com INDIA |

March 2012 | www.logisticsweek.com

< Column

Hitting Some Limits Attracting and retaining employees in the supply chain is not an easy task. But in a field with limited opportunities, what can companies do to keep a hold? Deepak malhotra explains.

n the last few years the placement industry has been doing a poor job in offering talented employees for the logistics industry. Similarly, in order for the logistics sector to attract, develop and retain the talent it requires, it must compete for attention in an environment where other sectors and industries have already, or are about to, initiate awareness and recruitment campaigns to address their talent shortage. Increasingly referred to as supply chain management, the level of employees reDeepak Malhotra quired in this sector includes the following VP-HR: Corporate HR, seven sub-sectors: Viraj Profiles n Logistics Information Systems n Warehousing and Distribution n Transportation/ Movement n Inventory/Material Control n Purchasing/Procurement n Management n Marketing/Sales Let’s look at the key human resources challenges in supply chain management. The supply chain sector is highly fragmented which translates to implications for the human resources. There is a general lack of awareness and understanding of the sector thus making it difficult for employers to attract, develop and retain supply chain specialists. It is an emerging occupation that requires special skill-sets. In terms of talent management, this sector has limited scope as it offers further education and training only to a certain extent. But most important of all, is the limited talent that engulfs this sector. A look at SWOT analysis of this sector will also tell us a few things. n Strengths of the sector are Workforce, Investment/s in training & development, etc n Weaknesses of the sector are lack of strategic workforce, training, general awareness of logistics, and pace with technology usages to name a few. n Opportunities are arising in emerging best practices, growing profile of logistics, introduction of curriculum in school & colleges, best practice sharing forums & untapped labor. n Major threats are fragmentation, adaptation to technology, scarce resources & talent management strategies. The key human resources issues in the sector can be clubbed as attraction and retention; education and training; keeping pace with technology; and succession and career planning. If we look solely at attraction and retention, there are a few points that matter here. For instance, attracting and

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March 2012 | www.logisticsweek.com

retaining younger and skilled employees, the growth of the aging workforce, managing senior level experienced specialist roles (eg. purchasing – sourcing, quotation, valuing bids, etc.) that can be difficult to fill, and, finally, another set of difficult to fill processing positions such as skills of transitioning product from raw form to end product quickly. Given that attraction is a current and anticipated challenge, retention strategies become even more important to maintaining the critical level of workforce required and manage the amount of recruitment activity required. The main recruitment and retention challenge is competition amongst organizations for resources, as the most common retention and turnover issues are competitors actively recruiting employees in other organizations, and employees favoring supply chain function of other organizations. Competitors actively recruiting supply chain employees from other companies are a concern for small organizations, while losing employees to the supply chain function of other organizations is the most common concern for medium sized organizations. This competition for resources is a significant issue given that employees within the function appear to be ready to explore new opportunities both inside and outside of the logistics sector. In this regard, 70.6 percent of employees indicated that they plan to explore other logistics opportunities and 45.6 percent of employees plan to explore opportunities outside logistics. Operational and tactical employees were more likely to indicate plans to explore new opportunities (either within or external to logistics). Some common reasons cited by employees for leaving the logistics function focused are promotion and career growth; better or new opportunities; new challenge or need for a change; compensation; job stress and pressure; and retirement. Going by a survey conducted by Personal Benchmarks, employees’ attraction for current employer has the following percentage: Opportunity for career advancement – 40 percent; Growth potential of company – 32 percent; Challenge of position – 37 percent; Reputation of company – 29 percent; Location – 23 percent; and Pay and benefits package – 23 percent. From a size perspective, a common activity for small organizations is providing a flexible work schedule, while medium and large organizations provide a career path. It should be noted that few participating employers indicated implementation of initiatives targeted at attracting and/or retaining supply chain employees. Of those that

did, the types of initiatives implemented included types of training, incentives, and student placements. Applying the Timeless Principles of Sun Tzu’s Art of War to Achieving Excellence in 21st Century Supply Chains: Several years ago, Dr. Eli Goldratt said, “In the future, competition will be among supply chains.” Over 2,500 years ago, Sun Tzu included mastering logistics as a cornerstone of successful operations. What can we learn from a military theorist of 500 BC that will strengthen our supply chains in the 21st century? To apply this treatise on strategy and war to supply chains, we will look at some key passages in The Art of War and substitute supply chain management for war; the company/corporation for the state; and leaders for generals. With these substitutions there is some great advice in Sun Tzu’s work that applies to today’s supply chains. Using our substitution these words can be rewritten as: “Supply Chain Management is a great matter to a company; it is the road to prosperity; it important to the survival or ruin of the company, and therefore, supply chain management must be examined.” Sun Tzu lists five factors that must be mastered to be successful in any operation: 1. The Way or the Tao: In supply chains this is the link that brings the thinking of the workers in line with the vision and strategy of the supply chain leaders. 2. Climate: In Sun Tzu’s day this concerned how to operate in the different seasons and different climatic conditions. To be successful in today’s supply chains, leaders must be able to operate in all business climates, worldwide. 3. Terrain: In 21st Century supply chains, leaders must be able to master the global operating environment and the supply chain infrastructure in order to survive.4. Command: Sun Tzu equated command with “generalship.” Using our substitution of terms, this means that to be successful, companies must have quality leaders in charge of their supply chains. We will look at this area in greater detail when we look at the major themes of The Art of War.5. Regulations: Sun Tzu included logistics as part of the regulations that must be mastered. Since the term supply chain had not been invented yet, the term logistics applied to all of the functions that we equate with supply chains. These key threads include Matters of Vital Importance, Clear Communications, Leadership, and Employee Training. This process, a simple to implement system, has eight steps: What was the plan? What actually happened? What went right? How do we sustain those areas? What went wrong? This could be major or minor but you still want to improve the performance. Why did it go wrong or not according to the plan? How do we fix that in the future? Who is responsible for fixing the problem? What is important here is not who made a mistake, but rather, what went wrong and who will be responsible for ensuring that the fix: a) fixed the problem and b) did not create a bigger problem.

The Road Ahead The Develop theme has two components. The first focuses on building the capacity of supply chain logistics workforce to support a transition to a more value-added and knowledge-based economy. n Develop, promote and support programs that prepare under-represented groups such as women, aboriginal people, immigrants, people with disabilities, and underemployed persons for employment in the supply chain logistics sector (e.g., pre-employment and preapprenticeship training). n Increase support for individuals employed in the supply chain logistics sector to upgrade their knowledge and skills, including supervisory, management, apprenticeship and skilled trades training n Support development, delivery and access to a variety of learning systems through a range of innovative delivery models including the Internet. n Work with government to fund supply chain logistics programs at the secondary and post-secondary level. n Work with educational institutions to ensure that training programs align with industry needs and standards and are, whenever possible, articulated along a career pathway n Develop a retraining program to assist late-career, mature workers to shift into a career within the supply chain logistics sector. n Support the development of regional industry clusters or networks to address common problems such as training, labor shortages, productivity etc., facing companies in the supply chain logistics sector. n Proactively identify and plan to address emerging workforce development needs. These may be issues such as the impact of new upgraders or other major industrial expansions on the logistics industry. It might also include the use of changing technology to address environmental concerns. n Identify and encourage the application of effective practices to help employers improve the retention of a more diverse labor force n Support employers in implementing human resource practices that encourage mature workers to maintain employment (i.e., offer part-time or flexible work arrangements, phased-in retirement plans, mentoring and training roles, etc.) to ensure retention of technical and corporate knowledge in supply chain logistics sector. n Work collaboratively with community agencies representing the interests of under-represented groups to identify and develop strategies to attract and retain workers from under-represented groups. The author can be reached at malhotrad1973@gmail.com INDIA |

March 2012 | www.logisticsweek.com 49

< Special Feature Feature

The Human Angle

50 50

INDIA | INDIA |

March 2012 | www.logisticsweek.com March 2012 | www.logisticsweek.com

Acquiring skilled workers in the industry is as tough as retaining them. Over the years, the role of logisticians has earned them respect in the industry, as well as their scope of work has improved dramatically. Anuja Abraham investigates.

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March 2012 | www.logisticsweek.com

< Feature

t is a well-established fact that supply chain managers have acquired a strategic role in the functioning of corporates. Earlier, what seemed like an unrewarding job is now the brainchild of many cost-effective concepts and inventions in the back-end. “Logisticians, say 20-25 years back, did not have as an important job apart from making travel and material arrangements,” says Mr. Dharmendra Gangrade, Head-Logistics, Pidilite. “Now their scope of work has expanded to managing the supply chain, inventory management, storing of materials, and transportation management.” Logisticians are responsible for organizing, scheduling, and managing the distribution of materials. This career grew rapidly in the mid-1980s as manufacturing firms shifted to Just-In-Time delivery. Many shipping, distribution and user companies have noticed the importance of having skilled logistics professionals within their teams. Their remuneration is at par with industry standards. “In FMCG companies in India, sales and marketing are the highest paying jobs, with logistics coming a close second,” says Mr. Gangrade. “It is a mistaken belief that a job in supply chain and logistics does not pay well.” Cost-cutting measures are essential to any company in order to focus on profits. “Cost reduction in any of the processes of supply chain affects the bottom line of the company”, adds Mr. Gangrade. “Hence it is essential to retain such talent.” The constant experimentation, innovation and cost-cutting measures have brought the logisticians to everyone’s notice. “Logistics is no longer a backroom activity, it has become a boardroom activity,” explains Mr. Gangrade. A renowned company like Apple, where innovation is the core of its philosophy and the raison d’être of its success, is headed by Tim Cook, a logistician. Many big retailers like Tesco and Wal-Mart are run by supply chain professionals. It is the effective operation and deliverance of value at low cost that ensures the company creates brand value and maintains brand loyalty among its consumers. “Logisticians and supply chain professionals have made it to boardrooms in almost all companies in India. Their job and responsibilities count on operational as well as managerial skills,” elaborates Mr. Gangrade.

Better With technology IT has played a very important role in creating efficiency in the back-end of the supply chain. Tools like Transport Management Systems (TMS) and Warehouse Management Systems (WMS) have employed methods to manage transportation and warehousing needs. Technology and software solutions like Oracle and SAP have created job opportunities for IT trainees. As information is freely available all the time, logisti-

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March 2012 | www.logisticsweek.com

cians can benefit from making smarter choices and faster responses. Technology has replaced a lot of manual paperwork, and smart automated storage and retrieval systems (AS/RS) have improved stacking, picking, loading, unloading and other processes in the warehouse. Implementation of IT in supply chain has also opened up many job opportunities for IT aspirants. “We recruit engineering graduates and provide cross-functional training. They are then absorbed into key supply chain roles as per their capability,” says Mr. Sudhir Mehrotra, COO-Contract Logistics, Future Supply Chains Solutions Ltd. “We give them essential training, guide them and provide them with additional resources to equip them to deal with technology infusion in supply chain.”

training Gen Y A Logistics Executive global survey 2011-12 states that 14.97 percent of the total respondents indicated that it is difficult to hire recruits in the spheres of Transport and Logistics. This was followed closely by 10.66 percent in the supply chain area. In the 2010-2011 report 13.35 percent of the total respondents indicated that Transport and Logistics was the most difficult area to recruit in. The survey results for the last four years suggest that very little has changed in the areas that suffer with a skills deficit. The 2011-12 report also states that whilst career development remains the highest driver of employment decisions at 26.89 percent, salary follows closely at second place at 20.84 percent. Job security and company values follow at 15.32 percent and 15.22 percent respectively. These four drivers outweigh all the other results and are the most important reasons why people join organizations. Education in supply chain management has largely influenced young minds to overlook the obvious choice of managerial positions. Logistics and supply chain activities provide immense scope for improvement at all levels. Young trainees are recruited and exposed to all aspects of supply chain: to learn, understand and assess their aptitude against the requirements on the job. They are often expected to travel extensively, to visit factory units, or look after shipping, customs or collaborate with service providers. This continuous diversification in various activities prepares the apprentice to face the real rigours of the job. “The training will give them exposure to end-to-end supply chain, make them aware of various IT tools, and give them a deeper understanding of the processes that culminates in delivery (the last mile). It also gives them hands-on training and opportunities to look at cost reduction and prepares the trainees to the world of supply chain,” adds Mr. Gangrade. The performance of employees is evaluated from time to time to ensure consistency and better productivity. “In contract logistics there are visible and measurable perform-

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< Feature ance parameters to assess the various parts of operations like fixed cost, variable costs, service levels, inventory accuracy, customer orientation etc. and hence the evaluation is science-oriented and easily understood, thanks to technology which makes measurement easy,” notes Mr. Mehrotra.

Human resource concerns Another survey by Logistics Executive shows that 27.29 percent of the total respondents indicated that the desire for a fatter pay packet was a key reason that enticed more professionals to leave their organizations. Interestingly, 21.77 percent of the total respondents indicated that executives also left for career advancement reasons. The all-encompassing role of a present-day logistician is finding many takers in the market. As the numbers of manual unskilled laborers is in abundance in India, attending to the paucity of skilled and intelligent supply chain professionals in India is the need of the hour. With the advent of technology, more professionals are required to concentrate on production planning, inventory, storage, sales and after-service. It is, thus, crucial that companies take note of concerns over remuneration and job satisfaction, to prevent the loss of skilled talent to competitors. Companies must also take initiatives to ensure the issue of skill gap is addressed. While opportunities are enormous within the industry, it is difficult to retain employees. “Human resource management, too, plays a crucial role in ensuring proper communication, building interpersonal relationships, defining employees’ career path and providing compensations that are at par with the industry. These are some of the things that go a long way in addressing key employee issues,” adds Mr. Gangrade. The other common complaints pertaining to HR include remote location of warehouses, difficult operating ambience, cost constraints, and lack of skilled manpower at all levels as the warehousing industry is still in the nascent stages of evolution. “To control attrition, we continuously build up resources, there is no other choice. Contrary to common belief, since this is the fastest emerging service sector, the growth in career is fastest here as there is a real paucity of talent,” says Mr. Mehrotra of Future Supply Chains Solutions Ltd.

Women On the Field The uneven ratio of women and men in supply chain is due to the fact that career growth is highly skewed in favor of men. Women are not easily given responsibility in warehouses. “Women are good at administrative jobs. They have a keen, analytical bent of mind. Hence, they produce good results in inventory management and production planning,” adds Mr. Gangrade.

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March 2012 | www.logisticsweek.com

It is an unspoken belief within the industry that women are better sorters since they pay more attention to detail. Women are also better at translating knowledge into action to ease the task at hand. Padmini Pagadala, General Manager, TPG Consulting, shares her experiences when she taught best practices in warehousing to employees of an American warehouse. According to her, women are more attentive to detail and seemed to welcome ideas about how they could work smarter, instead of harder, to improve their efficiency. The men on the floor, however, had a more lukewarm attitude to the ‘working smarter’ best practices. The concept of having to work less on the floor so they could have more physical energy left, didn’t seem to interest them much. “We work on both sides of the world. In the US we have found that women perform exceptionally well throughout the supply chain and some of the best performing DC’s I have ever visited or worked within have had very large (majority) female workforces. It seems like there is a great untapped opportunity waiting in In-

logistics is no longer a backroom activity; it has become a boardroom activity.

dia for the country to recruit more women into the supply chain arena,” says Steve Mulaik, Partner, The Progress Group and Director, TPG Consulting Pvt Ltd. But the Indian warehousing industry is still to accept women on the floor. As noted by our guest authors in their columns, with improved work conditions and increased gender sensitivity among male counterparts, warehouses can become more conducive for women to work in. Mr. Mehrotra maintains his organization does not follow the norm. “Women take up all kinds of roles in our organization – shop floor operations, systems design, MIS, supervisory roles, stock management, project planning, SCM, management, HR and all support functions. They have extended themselves in almost all functions in the warehouse. This balances the working ambience, less IR involvement & better output,” he clarifies. The dire need of the hour is to recruit more skilled and efficient professionals in this field. The implementation of IT in the back-end will eliminate the need to employ unskilled laborers to operate the warehouse. Irrespective of the nature of work, women must be given equal opportunities as men, to perform at operational as well as managerial levels.

Imprint Feature

â&#x20AC;&#x153;We have an edge over competitors for technology driven solutionsâ&#x20AC;? Can you please explain in nut shell the area in which Om group operates in logistics and supply chain verticals? In a nut shell we endeavour to execute anything which is possible to be executed within our scope of operation in logistics and supply chain verticals. To be specific we are currently providing 3PL support to all the verticals i.e. auto, pharma, elctronics, white goods, textiles etc. The primary SOB for Om Logistics presently is Automotives and we are working towards business enhancement in all other verticals to have an equilibrated market share in every vertical. We provide entire set of supply chain tailor made services to our customers within all verticals for total satisfaction through our value chain.

AkAsh BAnsAl,

head logistics- Om logistics ltd. From making presence felt in logistics Industry, how does Om group uniquely position itself in the market? The USP that Om Logistics emphasises upon is as a single window logistics provider to all our customer logistics requirements. We service our customer in all modes of transportation hence reducing follow-ups and providing a seamless logistics model to them. We also provide tailor made innovative, process engineered solution for cost optimisation for an econonomical logistics support.

How Technology edge has helped the group to create an impact? Being a very tech savvy organisation we always have an edge over competitors for technology driven solutions. With our state of art IT networks we offer our customers with on real time online data interface for their accurate planning of inventories and hence try to reduce substantial inventory carrying cost which Inturn support the bottom line for any organisation. Real time tracking of vehicles also enables us to provide accurate delivery time to avoid stock outs at the OEMâ&#x20AC;&#x2122;s locations. What sectors is the group targeting and what unique facilities are provided for these verticals? As already discussed we have significant presence on all the verticals that we cater to and are presently focussing more on verticals like electronics/white goods and Pharma by providing some value added services i.e recyclable master cartons and time definite deliveries to ensure damage free and cost effective deliveries to the end customer. We are also focusing retails as an important vertical for B to C deliveries to position ourself in retail business through our express retails division OMX express. Do explain in nut shell the future plan for the group and new product or services in pipe line? Future plans are definitely to grow in folds in years to come. We are looking into possibilities of expanding into many allied services i.e Full Truck, Project cargo and bulk rail movements. But the nut shell is that we would try to explore all possibilities for expansion where we can create value for ourself and our customer for all their logistics requirements.

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March 2012 | www.logisticsweek.com 55

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The book is directed at packaging technologists, those involved in the design and development of packaging, users of packaging in food companies and those who specify or purchase packaging.

Food and Beverage packaging Technology, 2nd Edition By Richard Coles, Mark Kirwan Publisher: Wiley-Blackwell Price: `9,800.35

Handle With Care

his volume of the Wiley Series in Environmentally Conscious Engineering helps understand and implement methods for reducing the environmental impact of handling materials in manufacturing, warehousing, and distribution systems, as well as dealing with wastes and hazardous materials. Chapters have been written by experts who, based on hands-on experience, offer detailed coverage of relevant practical and analytic techniques to ensure reliable materials handling. The book presents practical guidelines for mechanical, industrial, plant, and environmental engineers; as well as plant, warehouse, and distribution managers; and officials responsible for transporting and disposing of wastes and dangerous materials. Chapters include:

Materials Handling System Design Ergonomics of Manual Materials Handling n Intelligent Control of Material Handling n I ncorporating Environmental Concerns in Supply Chain Optimization n Municipal Solid Waste Management and Disposal n Hazardous Waste Treatment n Sanitary Landfill Operations n Transportation of Radioactive Materials n Pipe System Hydraulics n n

Environmentally Conscious materials Handling By Myer Kutz Publisher: Wiley Price: `6,851.42

The Logistics Of Construction

â&#x20AC;&#x2DC;M

anaging Construction Logisticsâ&#x20AC;&#x2122; highlights the benefits of good logistics as well as gives the use of consolidation centres on projects. It shows how reduction in transport movements, less money tied up in stock, less waste, and the more efficient use of skilled craftsmen will reduce the cost of projects, reduce construction time, improve quality, reduce risks to health and safety, improve environmental performance and generally improve the image of the industry. The authors offer practical ways of achieving these benefits through integrated project teams

INDIA |

and supply chains and the increased adoption of information technology including electronic communications, bar coding, and electronic tagging for tracing products. They also show how specific roles for each part of the industry can help to improve logistics. managing Construction Logistics By Gary Sullivan, Stephen Barthorpe, Stephen Robbins Publisher: Wiley-Blackwell Price: `4,163.95

March 2012 | www.logisticsweek.com

Media Partners

11-13 November 2012 Dhahran International Exhibition Center, Dammam, Kingdom of Saudi Arabia

Working Towards the Integration & Implementation of Effective Logistics & Transportation Systems

The 3rd International

TRANSPORTATION, MATERIALS HANDLING, WAREHOUSING & LOGISTICS Exhibition & Conference Organised by

www.sauditranstec.com

BLogoSpHErE International Key accounts (IKa) Store to Shelf: Last 50 Yards Dave Jordan FMCG and Brewing producers amongst many others, carefully pack their products to meet exacting requirements for International Key Account (IKA) and Local Key Account (LKA) customers. Increasingly this includes specially collated and shrink-wrapped pallets which are cross-docked to specific stores via a retailer platform. Powerful retailers force producers to operate to strict standards of service whether this is case fill, OTIF, CCFOT, fill level or some other agreed measure designed to ensure products reach the shelf on time. Similarly, in quality terms any damages or close to expiry product is usually rejected even if it means empty shelf space. If a platform is in use then this may be where the producer liability ends but that is unlikely and in any case an empty shelf directly hurts the brand owner more than the retailer. So let us assume that the carefully packed and stretched pallet of

Journals, Case studies, Research Reports

rESourCE CEnTEr Advanced Traffic Management Systems, Intelligent Transportation Systems Transdyn Transdyn delivers technology that helps our clients manage their critical transportation facilities. We offer a diverse set of professional services that specialize in the design, development, integration, construction and support of high-availability control, security / surveillance, and communication systems. For 35 years, Transdyn has served the transportation market by designing and building intelligent transportation systems, information management systems, and control systems that leading transportation agencies use to effectively manage their roadways, bridges, tunnels, and rapid transit assets. Our transportation solutions allow our clients to cost effectively monitor and improve their operations, enhance safety, and rapidly respond to real-time conditions and emergency situations using our fully integrated DYNAC® software suite. Maintaining efficient and safe travel through bridge and tunnel facilities requires

INDIA |

assorted goods arrives at the rear of the store on time, in full and in good condition. The next piece of the chain is called the “last 50 yards/metres”; that relatively short distance from back of store warehouse to the shelf. You will find that a majority of store warehouses will be badly organized and chaotic - perhaps chaos is inherent as you do need momentum and energy to keep the stocks moving. To be fair, some stores are staffed by skilled individuals but the organization has a sales mentality rather than a supply chain focus. Just because the stock is now in a “shop” there is no logical reason why the required skills should be any different. Many producers have recognized this and have started coaching retailers in the “last 50 yards” to transfer basic supply chain skills and procedures. Some simple initiatives like pallet marking on floors, FIFO and easy access to fast movers will pay rapid dividends to both parties and stop some of the pointless conflict that seem to feature in producer-retailer relationships. http://supplychain.enchange.com/

systems that integrate a host of applications including traffic management, facilities management, SCADA, life-safety, surveillance, and security. We offer total system solutions that combine traffic and facility management functions with other vital facility services into a single, robust user interface. Our advanced traffic management systems allow transportation agencies to maintain safe travel through their facilities by identifying unauthorized stopped vehicles, monitoring critical structure areas, and responding rapidly to emergency situations with real-time decision support tools. Transportation agencies rely upon our traffic management systems and services to manage their freeways, arterial networks, and rural highways. Our systems allow clients to efficiently manage their areas of responsibility, clear incidents, and disseminate real-time traffic information to the public. Today, Transdyn intelligent transportation systems help transportation departments and authorities throughout the world more effectively manage over 200,000 incidents each year on more than 2,200 lane miles of roadway. We provide turnkey services to com-

March 2012 | www.logisticsweek.com

bine various subsystems into a homogenous, fully integrated, high-availability, secure control and information management system. These subsystems include central control system, field control units, communication networks, passenger information systems (PA and VMS), radio and telephone systems, CCTV surveillance, access control, and fire systems. DYNAC Advanced Traffic Management System (ATMS®) software delivers the reliability and real-time data needed to effectively manage highway, bridge, and tunnel operations. This field-proven NTCIP-compliant software has been in use by transportation agencies since 1990 to meet the growing demand for versatile intelligent transportation solutions. DYNAC ATMS ensures optimal usage and safe passage on critical roadways, both under normal conditions and during periods when planned events or unexpected adverse conditions such as inclement weather, lane closures, vehicular incidents and heavy volume can impact the normal flow of traffic. http://bit.ly/koERs2 — Compiled by Anuja Abraham

< ITLIST LaunCHpaD

mobile apps of The month

A peek at some of the latest mobile applications for logisticians.

reverse Logistics 2.0

packetracer

This app provides industry best practices, news, and the latest information on Consumer Product Recalls and FDA Recalls. In addition, you will get the latest on Sustainability News and much more from the world of reverse logistics. Developer: Curtis Greve (Greve-Davis) Language Supported: English Price: Free URL: http://bit.ly/h9Waj6

Packtracer traces your parcel, express anywhere, and reports status anytime. It supports barcode scan, background update notification service, and includes DHL, DPD, Fedex, EMS, SwissPost, RoyalMail, ParcelForce, China Post, Hong Kong Post, Norway Post, and PNL among other Express companies. Developer: Mobabel Language Supported: English, German, Chinese (Han) etc Price: US$1.99 from BlackBerry App Store, €1.99 for Android, Windows, BlackBerry from Mobabel.net (Latest version with added services) Rs 81.85 on Android Market (Free Trial version also available) URL: http://mobabel.net/ http://bit.ly/yWaujI http://bit.ly/wqrae6

Platform: Android

Drivers Daily Log Platform: iPhone, iPad

Drivers Daily Log is a replacement for the paper logbook used by commercial vehicle drivers. With it, you can create, sign, and maintain electronic copies of your logbook as required by US/Canada federal law. It is designed to meet the latest federal requirements as defined in FMVSC §395.8 and FMVSC §390.31. Developer: Kurt Clark Language Supported: English Price: Free (first 30 pages). $.99 For 30 Days And $9.99 For A Year URL: http://bit.ly/AkHjmH

Damco 2.0

Platform: Android, iPhone, BlackBerry

Platform: Android, BlackBerry, Windows Mobile

agility 1.1 Platform: Android

The Agility app keeps you informed of world events affecting the movement of freight. You can personalize your news feed to track events in certain countries or monitor events affecting specific modes of transportation (air, sea, and road). App also has a Co2 calculator to estimate the emission by mode of transport, weight and distance travelled. Developer: Agility Logistics Language Supported: English Price: Free URL: http://bit.ly/y3XMuM

FedEx mobile 3.1.0

Platform: iPhone, iPad, Android, BlackBerry Track all your Damco ocean shipments in a highly user friendly and fast application. You can search by all relevant references such as HBL, CBL,Equipment or Container Stuffing Number or CBL reference. Developer: Damco Language Supported: English Price: Free URL: http://www.damco.com/mobility

INDIA |

March 2012 | www.logisticsweek.com

FedEx Mobile provides up-to-date shipment tracking information. Personalize your view by nicknaming shipments, adding notes or monitor important shipments with the Watch List. The users will be notified if select delivery exceptions have occurred. Developer: FedEx Language Supported: English Price: Free URL: http://www.fedex.com/us/mobile/

Subscribe to LOG.IndIa and LW India’s only magazine and newspaper providing engaging stories on SCM and logistics. IndIa’s LeadIng LOgIstIcs MagazIne www.logisticsweek.com

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zIne Maga LOgIstIcscsweek.com ng L Ing www.logisti

October 2011 Vol. 5 — No.2 October 2010 | Vol. 4 – No.2

No.8 Vol. 4 — No.2 April 2011 Vol. 4 – 2010 | October

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waTErways 44 India is ignoring inland waterways at its own peril

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Bad logistics is often the cause for unhappiness and displeasure. It could be due to numerous reasons from trafﬁc snarls, to delays in paper work or some little-known regulation that could cause delays in delivery. But to the receiver, it is bad logistics. Often, when you have asked for something to be delivered at a pre-decided destination and especially if you are eagerly awaiting the delivery, nine out of ten times it will never arrive on the scheduled date. This happens so often each time I order some books/CDs/appliances. The service provider will tell you that he has made more than one trip and there was no one home. And then you get into an argument. Is ensuring prompt delivery so tough? Don’t responsible people sitting in ofﬁces take stock of goods that have arrived and those that need to be delivered? Is the infrastructure in such doldrums? Surely, they are not short-staffed. Nor do people live in such remote areas (In the movie Il Postino, a make-shift postman delivers a letter with prompt regularity to his only customer who lives on the top of a hill) where they need to search out more deliveries within the area to justify their trip. And God help you if your parcel happens to be a passport.

Method In Motion

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Varun Dhawan, VP-Taxation, Blue Dart Express Ltd., simplifies the issues with GST that have boggled many in the logistics industry.

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October 2011 Vol. 5 — No.2 Vol. 5 — No.4 October 2010 | Vol. 4 – No.2

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PRO-LIFE SCM: Amid all the din around green logistics, some practical wisdom...30

BIGGER PICTURE: How supply-chain hurdles dent company bottom-line...14 RETAIL LACUNAE: Retail logistics managers rue lack of standardization....30 CII SUMMIT: Highlights from arguably the biggest congregation of SCM chiefs...36

A detailed analysis of India’s logistics parks

Your’s truly, Jayashree Mendes

Editor, LogisticsWeek

Firms Rethink Supply Chain Risks

Disasters in Japan, Thailand highlight need for continuity plan Bangkok As flooding in Thailand disrupts supply chains in many industries, the event—along with Japan’s March earthquake and tsunami—is prompting many to consider aspects of supply chain risk that might have been previously overlooked, says a recent report in Business Insurance. While many expect global sourcing to become an even larger factor for businesses going forward, recent events are prompting companies to consider the geographic concentrations of suppliers, the need for backup suppliers and reengineering processes to accommodate backup components should supply chains be disrupted. With an estimated 45 percent of the world’s hard-drive production located in Thailand and flooded plants affecting production by major manufacturers such as Seagate Technology Inc. and Western Digital Inc., some analysts say the disruption could affect PC production through the first half of 2012. The flooding also has had a major impact on the auto industry, where disruptions at Thai auto manufacturing plants and parts producers reportedly is expected to result in lost production of 250,000 vehicles worldwide. Many Japanese companies relocated production to facilities in Thailand after the March earthquake and tsunami. London-based law firm Reynolds Porter Chamberlain L.L.P. said the move to Thai facilities helped many Japanese companies mitigate their losses after the Japan disaster. But many now face further losses as a result of the floods in Thailand. “The problem for insurers who provide business interruption cover to Japanese manufacturers is that they have to cover the losses stemming from the Thai flooding because so many businesses moved some or all of their supply chain there,” Daniel Saville, legal director in the reinsurance and corporate insurance department of Reynolds Porter, said in a statement. “Moving production from Japan to Thailand was “Plan B.’ The question now is whether those businesses have a “Plan C,’” he said.

Source: cleveland.com

Lead IndIa’s

Car manufacturers across the world suffer delays as factories lie submerged. Gerry Alonso, senior VP of claims at Factory Mutual Insurance Co., noted that the “slow developing” nature of the Thai catastrophe makes it difficult to get a handle on the extent of losses. And, the duration of the flooding could exacerbate the losses. “We’ve had some clients that have been able to procure divers and go in there, but that gives you an idea of what you have.” Mr. Alonso said. “The frustrating part from a claims perspective, you can’t assess losses until the water’s gone.” William J. Montanez, director of risk management at Ace Hardware Corp. and a member of the board of the Risk & Insurance Management Society Inc., said his company hasn’t been affected by either catastrophe, though it relies on overseas suppliers. Mr. Montanez said, “At the back end, we have to look at safeguarding and how we can make it less risky to do it.” With the Thai floods raising awareness of the risk of geographical concentrations of suppliers, Linda Conrad, director of strategic business risk management at Zurich Financial Services Ltd. in New York, said her company has been working with clients to

identify where suppliers and industries are concentrated. “I think this illustrates the need for better continuity plans, including backup supplier arrangements, diversifying the locations of suppliers and using different backup suppliers than competitors.” Ms. Conrad also said companies are starting to ask existing suppliers about their own continuity plans. “People are also starting to do a lot more scenario analysis, including calculating the potential impact of having to re-engineer processes if alternative components or parts don’t match the specifications.” In general, the recent supply chain disruptions are leading many companies to embrace “that resiliency mindset of: Let’s try to think through some hypotheticals and plan for this when it costs us less than when we are in a crisis,” Ms. Conrad said. “At the end of the day I think the onus that’s going to be on risk management and management in general is how can we get a preview of what the future might look like and how will we respond to it,” Mr. Montanez said. “That’s what ERM is all about.”

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< EVENTS

A PUBLICATION OF HAmBUrg mEDIA grOUP

Mar ch 2012 March 6 - 12, 2012 autoMotive testing expo india chennai trade centre, chennai Automotive Testing Expo India is a significant trade fair for automotive test, evaluation and quality engineering in Chennai. Automotive Testing Expo India will attract senior test, evaluation and quality engineering executives from leading car manufacturers based in the region such as Ashok Leyland, Nissan, Daimler India, Ford India, Hyundai Motor Engineering, Hindustan Motors, Mahindra & Mahindra, plus many more. Exhibitors at Automotive Testing India 2012 will see participation by around 120 companies who will demonstrate, showcase, test, and evaluate quality engineering technology all under one roof. organizer: UKIP Media & Events (India) Tel: +91 99 10474717/40601514 March 12 - 14, 2012 indexpo-nagpur Kasturchand park, nagpur Indexpo Nagpur has been organized by Indore Infoline Pvt. Ltd as an effort to promote plant and machinery industry in India. This three day event will be a comprehensive showcase of all the equipment and technologies implemented in the industry. Indexpo Nagpur will also provide the participants with access to latest trends in the industry. Exhibitors expected are rice mill machinery suppliers, Industrial automation, Industrial Suppliers, Plant and equipment manufacturers and suppliers, Infra companies, Fabricators, Machine tools, Food Processing Companies, Industrial consultants, Industrial Finance, Insurance Companies and MSME companies. organizer: Indore Infoline Pvt. Ltd. Tel: +91 731 2703000 March 16 – 18, 2012 indian Machine tool and autoMation expo new delhi talkatora indoor stadium, new delhi Indian Machine Tool and Automation Expo New Delhi is an event that provides an excellent platform to manufacturers or suppliers of machine tools and automation products to display their products before professional community dealing with machine tool, automation, cutting tool and commercial consumers. Indian Machine Tool and Automation Expo will be a forum for discussion and demonstration of machine tool and automation. The event will have exhibitors such as manufacturers, producers, designers, wholesalers, solution and service providers of machine tool and automation, belonging to various categories such as CNC machines and tools, boring machines, drill-

INDIA |

ing machines, electro erosion machines, machines for the production of bolts, screws, nuts and rivets, shearing, nibbling and notching machines, tool grinding machines, wire forming machines, machine tool spindles and motors, electrical and electronic equipment for machine tools, assembling systems and industrial robots, chuck jaws, vices and tooling columns, CAD, CAM, CAE, 3D planning /3D Simulation Precision, Quality Control/ inspection equipments and systems and material handling equipments. organizer: Paramount Exhibitors Tel: +91 172 2274801/2274802/2274803 March 19 – 21, 2012 urBan inFra world expo Bombay exhibition centre (Bec), Mumbai India’s plans envisage extensive investments in roads, railways, irrigation and power projects, integrated and planned townships, ports and airports, industrial clusters, agro-based industries, and defense-related construction. Urban Infra World Expo will put you directly in contact with key decision-makers in all these areas and will help to enhance your penetration to the vast potential Indian Market. The Expo will have a special focus on Municipal Sourcing. Exhibitors include: Infrastructure companies, construction companies, construction equipment, architectural products, roofing and cladding, steel manufacturers, pre- engineered buildings, HVAC, sanitaryware, green building products, fenestration and doors, educational institutions, and, safety and security. organizer: Chemtech Foundation Tel: +91 22 22874758 March 21 and 22, 2012 indian steel MarKet the leela Kempinski gurgaon, delhi ncr Indian Steel Market is one of the prime business summits in India, dedicated exclusively to the steel industry. Participants have the exclusive opportunity to take part at the conferences that are held during the show and get acquainted with the latest tools, products and innovations. High quality raw materials, manufacturing tools, processing tools, auto components, ship building machinery and infrastructure accessories are put on exhibit at the show. The event looks forward to the probable growth scenario of the Indian steel industry over the next few years and the challenges that it is likely to face. Visitors can also learn more about the global markets of Europe, Latin America, the Middle East and South East Asia at the show. organizer: global business Connect Tel: +91 124 4048993

March 2012 | www.logisticsweek.com

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