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November 2011
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Method In Motion
amit mukherjee, Vicepresident (iT and supply chain) and group cio at rpg, has deployed exemplary supplychain strategies at spencer‘s retail >> page 34
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network equipment opens The true story of supplyachain window of opportunity education in India.
TOMORROW, TODAY
34
How demand forecasting is being honed by experts.
COLOR OF DIFFERENT INNOVATION
STROKES
Jayakumar Krishnaswamy, AkzoNobel’s SCM head, is managing a 24x7 supply-chain. Here’s low NEglEcTEd how he plans to accomplish it. Page 16 Bhagwan Das, Director, Customer 44Delivery adopTioN 24 waTErways OLD ORDER: HowOperations, auto cos manage serviceIndia logistics forreveals phased-out Alcatel-Lucent, Why WMS still does is ignoring inland hismodels...08 not have enough HAND: How FDI in Retail would waterways at its own logistics...25 THE FOREIGN change India’s company’s supply chain strategy. takers in India peril 2430 PRO-LIFE SCM: Amid all the din around green logistics, some practicalPage wisdom... FUEL BLUES: Logistics costs have spiralled with the recent fuel price hikes...08 ALL IN NUMBERS: Why data visibility is key to warehouse management...14 SILVER LINING: The specialty chemicals industry is manna for transporters...16
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im Cook is no small fry. The new CEO of Apple who replaced the late Steve Jobs is considered to have excellent logistics chops. Cook is also brilliant at negotiation, a trait that separates any good logistics manager from the rest. Steve Jobs once admitted to Walter Isaacson, the author of Steve Jobs’ recently published biography, that “I am a good negotiator, but he (Tim Cook) is probably better than me because he is a cool customer.” What gives Cook’s negotiating skills an edge is his obsessive penchant for results. Company insiders say he is demanding and unemotional when driving down processes. According to a Fortune Magazine report written a few years ago, Cook, at one of his meetings with key Apple executives convened to assess a problem in Asia, told the group, “This is really bad. Someone should be in China driving this.” Half an hour into the meet, Cook looked at a key operations executive and said, in a matter-of-fact tone, “Why are you still here?” The executive got up immediately, drove to the San Francisco international airport, and without a change of clothes, bought a one-way ticket to China. Cook was apparently brought into the company from Compaq in 1998 to help straighten Apple’s then inefficient manufacturing, and supply-chain operations. He is said to be the man behind Apple’s decision to close the company’s factories and warehouses across the world and outsource the work to contract manufacturers. In one stroke, this decision helped bring down Apple’s inventory from months to days. “You manage inventory,” he has said famously, “like you are in the dairy business. If it gets past its freshness date, you have a problem.” All these traits make him a great logistician, but to fit into his new role of Chief Executive, he may have to work on an attribute essential for the task. Steve Jobs, talking to Isaacson about the great values that Tim brought to the company, added a note of reservation: “but Tim is not a product person, per se.” Right there is some food for thought for all the logistics heads who aspire to take up a bigger role in their organization.
Man Versus Machine Networking meets on the sidelines of industry events always promise to throw up interesting nuggets of conversation. During a tea break at a recent automotive logistics conference organized by LOG.India, I caught up with a few LSPs and SCM heads of auto companies and the discussion soon veered to a topic that’s the hot favorite at such occasions: India vs China. An Indian CEO of an integrated LSP giant contended that it’s a chalk-and-cheese comparison. That India lags China by eons in infrastructure, is a foregone conclusion. Even at the operational level at manufacturing facilities and DCs, for instance, the difference is stark. “Look at the poor state of automation at the
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best of warehouses in India,” he said. Sorters and pickers running around to check and jot down individual stock points are a common sight even at the most sophisticated warehouses. A leading transporter, who ferries luxury cars, lamented how his company cannot transport cars on trucks that are open on the sides (an international norm that makes loading/unloading quick and easy). “Log patthar Aanand Pandey phekte hain gaadiyon pe Editor (people on the streets pelt the cars),” he rued. While that speaks volumes about the huge class difference that exists in our country, the first issue of the near absence of true automation (storage automation in this case) at Indian warehouses, we discussed, pointed at many basic problems here. One, we decided, was the low level of volume our warehouses deal with. While GST may address that issue, the other factor is more indefinite: incredibly cheap labor. Prima facie, that looks like a good thing, but it is not when measured against the loss of time and productivity incurred in using manual labor over automation. Plus, using cheap labor as a business tool is not only unimaginative, it is exploitative in the long run. Apparently, that issue could also be solved in the near future. A recent FICCI report has noted how NREGA is raising the labor charges for businesses in India. That, coupled with proposed labor reforms—which should ideally make incidents like the recent workers’ strike at Maruti’s Manesar plant a thing of the past—should push companies to adopt technologies and switch from labor to automation. The third problem is the generally stoic nature of customers in India by international standards. Unless the local companies feel the heat from customers and a frenzied market, they will not adopt automation that will meet the standards of those like my LSP friend at the event. And that too, does not look too far away.
Aanand Pandey aanand@logisticsweek.com INDIA |
November 2011 | www.logisticsweek.com 5
CONTENTS 8 ANALYSIS
Trouble In The Middle Supply-chain departments of user companies are grappling with the increase in transportation costs, mainly due to the rise in prices of diesel.
16 COLUMN
The Indian chemical industry spends a substantial chunk of its revenue on transportation.
12 INDUSTRY EVENT LOG.India organized an event, 'Automotive Logistics: Realizing the Indian Dream' at the Le Meridian hotel, Chennai.
16 24 COVER STORY Uniquely Different
Alcatel-Lucent, the second largest telecom gear manufacturing company in the world, offers vastly different supply chain solutions.
12 14 COLUMN
Collation of data is vital for any organization when it plans its road map for the future.
14 6
INDIA |
November 2011 | www.logisticsweek.com
24
NOVEMBER 2011 34 FEATURE
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October 2011 Vol. 5 — No.2 October 2010 | Vol. 4 – No.2
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62 PANORAMA
Method In Motion
Books, Journals, Blogs, Technology, C-Profile, and Solutions - a look at what's new in and for the supply chain industry.
66 EVENTS
amit mukherj ee, Vicepresident (iT and sup ply chain) and group cio deployed exe at rpg, has mplary sup plychain stra tegies at spe ncer‘s retail >> page 34
TElEcom logisTics 20
GET
MoveSET, mentGO of teleco 38 m netwo The true rk story equipof ment supply opens achain windo w oftion educa oppor tunity in India.
Some forthcoming events coming up in November.
COLOR OF INNOVATION
Jayakumar Krishnasw amy, AkzoNobe head, is man low l’s SCM aging a 24x7 supply-chain. how he plan adopTioN Here’s s to acco NEgmpli 24 lEcsh TEd it. OLD Why WMS ORD still ER: does waTErways How auto not have enoug cos manage 44 Page 16 THE FOREIGN serviceIndia h HAN logist is ics takers in India ignori forngphase D: How FDI in inland d-out PRO-LIFE models...08 Retail would waterways SCM: Amid changate its own India’ all the din aroun s peril logist ics... d green logisti 25 cs, some practical
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wisdom...30
November 2011 | www.logisticsweek.com 7
< news AnALYsIs
TRAIN OF THOUGHT
Most of the retail apparel chains are looking at Bangladesh as the cost of production is much less there. This is making Bangladesh an attractive destination for apparel makers.” — A sakthivel, President of Tirupur exporters Association on major retail giants looking at Bangladesh to cut costs to Economic Times.
There are some structural freight issue with Indian Railways….we would like to pass on the freight advantages.” — Capt. sandeep Mehta, CeO, MPseZ on container freight rate hikes by Indian Railways and introduction of Mundra Port SEZ’s first double-stack container train between Mundra Port and Patli inland container depot, in an interview to Business Line.
Over the years the shrinkage rate is coming down as we are getting better at managing our supplychain logistics and moving towards hyper retail.” — Mohit Kampani, Chief Operations & Merchandising, spencer’s Retail Ltd to Mint on India’s high shrink rate due to loss of stock due to shoplifting by customers, or theft.
The need of the hour is to focus on improving the quality and value of the output, reducing the cost of raw material for the processors, while improving the farmers’ income levels.” —Rana Kapoor, CeO and MD, Yes Bank in an exclusive interview to Hindu Business Line on Key Challenges of Food Processing Industry.
Trouble In The Middle Supply-chain departments of user companies are grappling with the increase in transportation costs, mainly due to the rise in prices of diesel. Jayashree Mendes looks at their way of dealing with the problem.
F
our months after the government increased the price of diesel by `3 per liter, supply-chain managers at user companies are still coming to terms with the increase in transportation costs. But most of them seem clear that for now any increase in rates will have to be absorbed by the company. P A Patil, Supply Chain and Business Development, Lupin, says that companies do factor in a five percent increase in fuel costs when they sign yearly agreement with service providers. “It is important to take fuel costs into consideration as they account for 33 percent of the freight costs,” he adds. The increase in diesel prices is not a new phenomenon.
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From 2005-10, the price of diesel has risen by about 26 percent. This year, in a bid to allay protests, the government reduced excise duty on diesel to `2 and abolished the customs duty on petrol and diesel. Explaining how a sudden increase in fuel prices can hit transportation, Devesh Shankar, GM & Head (Logistics and Supply Chain) at Xerox India says, “When we sign contracts with LSPs, the clause of who will bear the onus of increased transportation cost in case of rise in fuel prices is thrashed out thoroughly. More often than not, relations between companies and service providers can go sour if one side has to bear the brunt.” Companies are careful to
November 2011 | www.logisticsweek.com
The criticality of the goods that companies transport also determines how companies work out deals with transporters. scrutinize every clause, especially one that makes a mention of the increase in fuel prices. Mr. Shankar adds, “More so, because in the last two years, there have been regular increases in fuel prices and this has shot up transportation costs by 8-18 percent. A few years ago, prices of fuel would be hiked by 6-7 percent.”
Hitting The Brakes For companies that rely on road transportation, the recent increase in the price of diesel
is creating a situation where both, the company as well as the service provider, are unwilling to take the blow. So it is not uncommon for companies to call in their service providers and work out a middle path that would benefit both parties. The more generous ones prefer to go with the signed agreement, instead of drawing up a new one. The Sr. Manager (Stores and Logistics) of VE Commercial Vehicles, Rajendra Baheti says, “We have refrained from
< news passing on the hikes to our LSPs. The good news for us is that volumes have gone up and we have increased the volume of business to our transporters.” The criticality of the goods that companies transport also determines how companies work out deals with transporters. For instance, pharma companies supply life-saving products and need to ensure prompt supply. An industry source close to a large pharma group says, “We have an escalation arrangement and use that mechanism. Immaterial of a fuel price hike or a transportation strike, we cannot afford to look at each factor in isolation.” Those that do not have an escalation agreement are forced to stick to the commitment. According to MM Chaphekar, GM (Commercial & Logistics) Endurance Group, a manufacturer of
auto components, “Each time there is a hike in fuel price, our transporters have asked us to compensate them. Since we supply to OEMs (original equipment manufacturers), we cannot afford delays. According to the SLAs we have signed, there is a clause that states that a price hike of more than 10 percent will call for reconsideration in rates.” Mr. Chaphekar adds that most OEMs are unwilling to pay more if there are any price hikes during the period of the contract. He adds, “It’s only when we start a new project with the OEMs can we ask for higher rates. Since we have established relations with our transporters, they have been kind enough to absorb the increase in prices.” But this is not the case with companies that use air transportation who are usually the
worse affected. For instance, Seco Tools uses road and air across the country and internationally. Amul Shinde, Deputy GM (Supply Chain) at Seco Tools, says, “We transport about 80 percent of goods by air. Now we are looking at alternatives such as sea route.” Sea route also implies maintaining a higher inventory, as the turnaround time is longer. The company is now looking at increasing the lead times for high priced raw materials and prefers using speed post in Europe, and the local courier in India when the products are not priority. It considers itself lucky that it gets its transport cost reimbursed in the USA. For the future, Seco is planning to be more selective in identifying the high cost items and ship it in advance, so that it
INDIA |
does not incur any extra cost. Mr. Shinde adds, “We have now begun moving out business to regional players that assure quick delivery at a lower price.” Companies are also working out ways so as not to pass on the price burden to consumers. Mr. Shankar says, “For a company that does not manufacture in the country and only distributes (like Xerox), we only have to consider the cost of employees and transportation. The major component of the logistics cost for us is warehousing and operational costs. With the competition being stiff, we cannot afford to increase costs to customers. It has to be planned.” Xerox has formed long-term warehouse rental deals. More than that, it sorts it out in a verbal agreement with LSPs.
November 2011 | www.logisticsweek.com
11
< EVENT
Prem Verma, CEO, TML Distribution Company, fielding questions from Aanand Pandey, Editor, LOG.India.
Seeking New Heights L og.india held an auto event called ‘automotive Logistics: Realising the indian dream’ on october 7, 2011, at Le Meridian Hotel, Chennai. Brief, but incisive presentations, on various aspects of the auto industry were presented by well-known figures of the industry. The presentations ranged from topics like ‘Creating new paradigms in auto logistics’ to ‘intermodal efficiency in distribution.’ The presentations were also followed by panel discussions which expertly discussed various aspects of the industry.
Date: October 7, 2011 Event: Automotive Logistics: Realising the Indian dream Organizer: Hamburg Media Venue: Le Meridian, Chennai
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INDIA |
Prabhakar Mahadevan-Regional Director–India-Goldratt Group, making a presentation on 'TOC guided supply chains—a brief overview'.
November 2011 | www.logisticsweek.com
Suneel Aiyer, Associate Director, PricewaterhouseCoopers, speaking on 'Capacity planning while keeping up with growth.'
Ravi Begur-Head IT, Mahindra Logistics, gives a presentation on 'Use of technology for outbound logistics.'
Asim Behera, General Manager, Swisslog India, speaks on 'Best practices in automotive SCM-A case study.'
Prem Verma, CEO, TML Distribution Company, presents a paper on 'Intermodal efficiency in distribution.'
C.S. Raghavan, Sr. Vice President-Materials, Fenner India, gives the opening remarks.
(r-l) : Sharad Sharma, Asst. Vice President, Business Development, TCI XPS, Anand Venkateshwaran, General Manager (Sales Logistics), Hyundai Motor, India, Dilraj Singh Gandhi, Principal Consultant, PricewaterhouseCoopers, Nihar Parida, COO, Uniworld Logistics, G Suresh, AGM, Volkswagen India.
(r-l): R Sankaran, Head Logistics, TVS Motors, Pankaj Chandak, Assistant Vice-President (Parts & Services) Fiat India Automobiles Ltd, Kamal Chand, Director, Continental Parts, V.Vasudevan, DGM-SCL Logistics, Ashok Ninad Watkar, 2011 |Leyland, www.logisticsweek.com INDIA | November Logistics Planning, Ĺ koda Auto India , C.S. Raghavan, Sr. Vice President-Materials, Fenner India.
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< Column < COLUMN
The Power Of Data What can’t be measured can’t be fixed is the mantra that will save a warehouse manager’s day.
From Logistics To Supply Chain
PADMINIPagadala PAGADALA Padmini General Manager, General Manager, TPGConsulting, Consulting, TPG Mumbai Mumbai
I W
IN THE BEGINNING of my career, I visited a ranging from line-by-line transactions inside warehouse where one receiving associate was your facility (or outside if you talk about supresponsible for identifying around 150+ SKUs by ply chain as a whole), to your key performance The idea of logistics has expanded over the years to become merely looking at them. No, there were no SKU indicators by day or tracking all your transthe interesting, entity - supply tags on the product. Hisall-encompassing responsibility was to actions by timestamps thatchain happen-inthat your itidentify is today. Padmini Pagadala explores the two terms. the 150+ SKUs and do the receiving on Distribution Centre (DC). Examples of what the floor. I thought the associate had to be a gen- might construe as data: Why did the change take place? as we in What’s a name one vast mayexperience ask? Wethat mayI n Order ius. It wasin much later after histories by line item india follow the supply evolution path shrug off the discussion, but not so the exwondered how accurate could this guy possibly n Timestamp informationchain of deliveries that the West has mapped, it’s worthy to conperts in our industry. Recently, i was at a have been? I also started wondering that even n Inventory location and count sider each step andfor whether cocktail party with some international veterif the associate was 100 percent accurate all the n % demand picked the day or not that step was really necessary or relevant. ans from industry, they started talktime, whatour would happenand if he missed work or n Units picked by employees per daythe biggest mistake we accuracy can make is copying for the sake of ing about the rightteach word was to to refer to n quit? Couldwhat you possibly someone idenShipping copying. it free strikes the they discussed the n tify industry 150 SKUswebywork visualin.inspection overnight? Accident daysme that sometimes even the Even more would a company place so But whyterms collect data? Firstly, Peter Drucker logistics used might notastransfer as well subject withso,sowhy much vigor and argued back muchforth, trust that on one associate’s visual abilities? “Ifpractices. you can’t measure it, you can’t improve as the and i thought it would be valu- said, Thustobegan my tryst a reality thatMore was going able recount theirwith conversation. than it”. Having data means having visibility of all to addit’s much agony to because my consultant life.it shows your or liabilities, knowing where you are that, important i think Theassets Beginning often jokehas about how data is a bad word in the strongest thebe weakest. Secondly, howI the field evolved. Most of you and would familiar with thehaving CounourWhat’s country. There is afor certain you toManagement plan better forProfessionals the future. interesting me asreluctance a relativetoday new- data cil ofempowers supply Chain in sharing data even firms that would to For example, you look at the whole year, you comer to this field is with that we haven’t alwayslike been (CsCMP). theifCsCMP is the world’s pre-eminent help you. The 3PL—company face-off is one such could know theofseasonality in a year. You could . called supply chain professionals. according organization supply chain professionals notable up thechapters Divali peaks see how to theseexample. “veterans,” our profession has really start therepicking are thriving of theand organization you need be ready forwhat it. You could see changed its name three times over in the last 50 early in Mumbai andtoDelhi. But, most readers day the lowest planbeginyour What years or Is so.Data? it wasn’t until the beginning of the which may not behas familiar with isactivity that inand the very weekly day offfounders around that day. Datamillennium includes everything spectrum, new that ouracross recentthe name change employees’ ning in 1963, when the came together
to supply chain professionals took place. 2214
INDIA | November 2011 www.logisticsweek.com INDIA | December 2010 | |www.logisticsweek.com
to set it up, that’s not what they called it.
Systems Are Need of the Hour Over five percent of our GDP comes from information technology. We sell our technology to Wall Street and yet in our backyards, we don’t take our medicine that seriously. The most important leap that our warehouses and even supply chains, for that matter, need to take is in the direction towards systems. Businesses, irrespective of the scale of their volumes, must invest in software that keeps track of their transactions. A lot of places today still resort to writing things down and letting the data entry operator key in the information at a later date. While there is nothing fundamentally wrong with this, (assuming it does, in fact, get done ), why do things later if it can be done more easily right away? It is simple today to start using RF terminals with basic software. Buying from a Warehouse Management System (WMS) giant might be an expensive affair if you are a small enterprise, but here is good news. There are lots of small players in the market who can customise software specifically for your needs. Your challenge would be to write the specifications of what you need to capture and how you would like your associates to interact with them (Hand-held Radio Frequency terminal, Touch-based Monitor, etc.). The risk of buying from a small software vendor can be alleviated by supervising the quality of the program, to making sure the programmers understand the supply chain aspect. There are places today that have bought software, but cannot go ‘live’ because of the breakdown of one feature or the other. If you have a warehouse running out of a garage, it is still better to keep track on an excel sheet rather than on a piece of paper. Capturing data electronically could help you analyse trends and save you a lot of time in finding the history of a certain order number if it needs to be looked up.
Client Is King However, if you have a big business, you must definitely consider buying reputed software. The WMS biggies such as Manhattan or an Infor are very interested in making a huge presence here and if you are a big company, perhaps it is time for you to call them. Depending on a standard ERP based WMS may not be the best answer. For example, a lot of warehouses today do not understand the concept of replenishment. That is, storing the reserve in a pallet location and bringing forward a portion of the same to a ‘Forward Pick Area’ where they may picked more efficiently as units. Often, this is not done because the system they have does not support this. Remember as a client, you are the king. You need to ask for what is required to make your business operate more efficiently. Most warehouses I have visited do not print the pick locations on the pick list. It is up to the picker to find the SKU
25% 20%
20%
15%
15%
14%
16%
15%
12% 10%
8%
5%
0%
Sunday
Monday
Tuesday Wednesday Thursday
Friday
Saturday
The data shows that this facility has the least activity on Tuesdays
in the warehouse. In order to work around this, firms stock product families together so that it becomes easy to find an SKU in the general area. This leads to at least two problems. The picker spends time in looking for the SKU; that time could be saved if the location was printed on the pick list. Secondly, family groupings result in the A movers and the C movers of the product family being stored at the same convenience. In other words, there are several facilities that do not follow best practices because their systems do not allow them to do so. Is it time to change?
Variety Of Software As I have pointed out in many columns, a WMS is not panacea. There is a list of other software that you could need in your warehouse that would add great value inside your facility. Some of them may include the following: n Labour management software (Like Enteq or ProRep) n Time and attendance software n Slotting Software (A software that can tell you where to place each SKU based on the SKU’s selling volumes, like Optricity) n Load Diagramming Software n WMS Interfaces In conclusion, I want to say that capturing data isn’t everything. As Malcolm Gladwell points out in his popular book “Blink” that in chess, you see all your opponent’s pieces and yet you may lose the game. Capturing data is just a tiny step towards the cusp of management – be it people or a business. What you do with the data might be a giant leap for your organization. The author can be reached at padminimp@theprogressgroup.com.
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November 2011 | www.logisticsweek.com 15
< column
The Right Chemistry The Indian chemical industry offers bright prospects for growth in transportation. Srinath Manda reports.
T
The IndIan chemIcal industry is one of the key components of the nationâ&#x20AC;&#x2122;s economy, contributing around three percent to the countryâ&#x20AC;&#x2122;s GdP. The industry was worth approximately $39 billion in 2010, and is considered to be the 12th largest in the world and the third largest in asia in terms of volume. The Indian chemicals industry has gradually evolved into an innovative industry with backward and forward linkages to various other sectors. chemicals are extensively used for various industrial applications such as textiles, pharmaceuticals and other downstream industries.
Fragmented Industry In 2010, the Indian chemical industry was highly fragmented with more than 5,000 companies, comprising both small and large-scale participants, with very low export levels and a major focus on the domestic market. The domestic market is dominated by the organized sector, comprising around 75 percent of the market, with Indian companies holding a major share as compared to mncs. The unorganized sector exists only in a few segments of the chemical industry. It consti-
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November 2011 | www.logisticsweek.com
tuted not more than 15 percent of the entire domestic market.
Transportation Practices The chemical industry spends approximately seven percent of its revenue on logistics activities, which was valued at around $2.73 billion in 2010. Transportation accounts for almost half of the logistics spend of the industry. The chemicals industry also spends a significant share on warehousing owing to the extensive storage activities required for consumer goods such as paints, cosmetics, etc. The chemical industry is characterized by a significant level of exports, due to which the freight forwarding market also corners a significant share of the overall logistics market revenues. The chemical industry requires careful transportation and handling for various products that are explosive. Such products need to be handled with special care and require specific equipment while loading and unloading in transportation. They may also need to be packed and labeled with appropriate labels which note that they are dangerous or hazardous, to enable careful handling during transportation or storage of these products.
< column Some chemicals may also require temperature-controlled transportation and storage. This proves to be a major challenge to chemical companies and chemical transportation companies, as they need to own or acquire specialized vehicles, equipment, and other infrastructure for fulfilling transportation and logistics needs. This is to ensure compliance with the stipulated environment, safety, and other legal regulations involved with such dangerous chemicals or materials. chemical products are transported within the domestic market predominantly by road (in exclusive chemical tankers and sometimes in containers). Rail is the second mode for transport of chemicals. companies that have industrial activities in coastal regions prefer to ship their products in bulk from ports to regional markets along the coast, thus saving time and cost. In recent times, chemicals have also been transported through underground pipelines based on geographical proximity or the urgency of the shipment. The air mode is used for high value specialty chemicals, and only in case of urgent deliveries. The most preferred mode for international transportation of chemical products overseas is by sea, due to the availability of bulk containerized shipping facilities and cold chain facilities required for certain products during transportation. air freight is used for certain high value chemicals, such as fine and specialty chemicals, which can be transported by air using service providers offering very economical rates.
a demand surge is expected in the chemical products market during the next five years, especially in specialty and knowledge chemicals. To cater to this increase in consumer and industrial demand, many chemical companies are planning to expand their facilities especially in SeZs, to take advantage of favorable duty exemptions and other excise duty regulations. The Indian government has also relaxed a few regulations on import and export and other FdI policies, which are anticipated to boost export opportunities substantially. For industry there exists a strong global opportunity for the export of a few products such as dyes, pharmaceuticals, agrochemicals, etc., which are expected to aid industry’s export activities. The current transportation activities in the industry are likely to change with the increased adoption of multimodal transportation by participants to transport chemical products to regional markets.Chemicals expected developments FIGURE 1: Indian Industry
Revenue
Segmentation by Product Indian Chemicals Industry Revenue (Segmentation by Product) 15% 60% 25%
Bright Prospects The chemical industry transportation market in India was about $1.36 billion in 2010, representing approximately 49 percent of industry’s total logistics spend. The market is expected to witness a compound annual growth rate (caGR) of about seven percent between 2010 and 2015 and reach about $1.90 billion by 2015.
Basic Chemicals Specialty Chemicals Knowledge Chemicals
Figure 1
FIGURE 4: Indian Chemicals Industry's Domestic Transportation Market Breakup of Source by : FrostMode and Sullivan Transport, 2010 Chemicals Industry’s Domestic Transportation (2010)
Source: Frost & Sullivan
79% Road
Key Products of the Indian Chemical Industry Basic chemicals – Petrochemicals, fertilizers, resins, and plastics Specialty chemicals – Catalysts, industrial gases, paints, dyes, and plastic additives Knowledge chemicals – Pharma chemicals, cosmetics chemicals, and agrochemicals Key Consumer Segments Served by the Indian Chemical Industry Industrial applications – For textile, rubber, and so on Agricultural segment – For dyes, fertilizers, and pesticides Normal consumers – Paints, for household products, cosmetics, and others
13% 2% Figure 2
Road
Source: Frost & Sullivan
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November 2011 | www.logisticsweek.com
Rail
Air
1.5% 4.5%
Coastal & Inland Waterways
Pipelines
Source : Frost and Sullivan
18
< column est mode of transportation for the chemical industry. The upcoming dedicated Freight corridors of the Indian railways, dedicated air cargo services, growth of private ports in the country and growth of pipeline networks are likely to cause this shift. The Indian chemical industry has bright growth prospects owing to strong demand in the domestic market, as well as the export markets, from consumption industries such as pharmaceuticals, agrochemicals, and specialty chemicals, resulting in increasing volumes of chemicals transportation and freight forwarding. While road transportation will continue to be the dominant mode of domestic transportation, other modes are expected to contribute substantially over the years. however, in the international transportation segment, the sea mode is expected to remain dominant and unaffected. Thus the growth opportunities for companies involved in chemical transportation services are immense. however, they need to acquire capabilities to fulfill the specialized needs of this industry, including suitable vehicles, handling equipment, storage facilities, and above all, skilled professionals to cater to the industryâ&#x20AC;&#x2122;s specific needs.
in rail, road, and sea networks will enhance and improve their connectivity. Rail, coastal and inland waterways, pipelines, and air modes together are expected to constitute a minor share (three-four percent) to the road segment between 2010 andRevenue 2015. however, road will still to be the larg5: Forecasts forcontinue Chemicals
FIGURE Transportation Market in India, 2010-2015
Revenue Forecasts for Chemicals
Transportation Market in India 2010-2015 1.90
Revenue ($ Billion)
2 1.8 1.6
1.36
1.4 1.2 1 0.8 0.6 0.4 0.2
Figure 3 0
2010
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.
2015
Year
Source: Frost & Sullivan
Source : Frost and Sullivan
Confederation of Indian Industry Institute of Logistics
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< cover story
Uniquely Different As a corporate which is almost at the cusp of success, Alcatel-Lucent follows an interesting mode of demand planning customized to fulfill its customers’ needs. Pamela Cheema reports.
T
he office is cloaked in silence. Alcatel-Lucent, the second largest telecom gear manufacturing company in the world, is housed in quiet premises in Andheri, Mumbai, where peace pervades—a stark contrast with the heat, dust and cacophony of the rest of this suburb. Mr Bhagwan Das, Director, Customer Delivery operations, has an equally calm and reassuring manner as he picks his way through the intricacies, and often perilous shoals, of supply chain operations. As a company Alcatel-Lucent, which also includes its highly respected and path-breaking division, Bell Labs, has a hugely impressive track record; over the years it has acquired seven Nobel Prizes, the latest being in 2009 for the development of the Charge Coupled Device, a system of technology that transforms patterns of light into digital information and is the basis of many forms
24
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of modern imaging! The other six Nobel prizes were awarded in a time span from 1937 to 1998, for inventions ranging from the immensely popular transistor to esoteric theories of physics. All the Nobel prizes have been awarded in the spheres of semiconductor and telecommunication inventions, with Bell Labs having a couple of thousand patent rights to its credit.
alcatel Lucent Fast Facts
headquarters: Paris, France annual Revenues: approx. Euro 16 billion R&D Budget: Euro 2.5 billion active Patents held: 27,900 Patents awarded in 2010: 2,400 nobel Prizes won: 7
November 2011 | www.logisticsweek.com
Bhagwan Das, Director, Customer Delivery Operations, alcatel-Lucent.
Photo: Vikram Barwal INDIA |
November 2011 | www.logisticsweek.com 25
< cover story Pioneering telecom technology Alcatel-Lucent has had a presence in India since 1982 and has operations in 130 countries across the globe. It is headquartered in Paris and despite hints of a double-dip recession in Europe and the US, attained encouraging revenues of Euros 16 billion in 2010. Globally, the company has more than 77,000 employees, with its workforce in India exceeding 10,000. The company, which is
Alcatel-Lucentâ&#x20AC;&#x2122;s largest warehouse is at Marley, near Paris.
26
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November 2011 | www.logisticsweek.com
a pioneer in telecom technology, offers a deeply specialised product range which includes telecom products in 4G, 3G and 2G technology, optics transmission products and laying submarine cables on the ocean bed. It offers a complex portfolio of services which includes engineering services, operating its Global Network Operations Centres (GNOC), project management and operation and maintenance of telecom networks.
The corporate has structured its supply chain operations carefully, after systematically carving its global operations into three specific areas, firstly, North America, secondly, Europe, the Middle East and Africa and thirdly, the Asia-Pacific regions. “Our factories are located in different parts of the world,” says Mr Bhagwan Das. “We have factories in Mexico, Canada, the US and China and some centres are in India too. Depending on the product pro-
file that is required by the customer, we place the order on the SAP of the respective factories. From there it is shipped to the distribution centre in each of these three regions and then on to the customer location.”
A Different supply chain In a departure from the practice followed by other corporations, Alcatel-Lucent has intriguingly chosen to rename its supply chain operations as ‘customer delivery opera-
tions.’ “The primary reason really was customer focus, because we wanted to give the flavor of a customized supply chain to our individual customers,” smiles Mr Bhagwan Das. Besides, he underscores that his company is not the usual FMCG corporate with common retail products. Alcatel-Lucent manufactures technologically superior products customized for each of its clients, with a supply chain that befits and is suited to each client. The hi-tech products manufactured by Alcatel-Lucent are sitespecific or customer specific, tailored to suit the requirements of each of its clients. Customers have sharply different needs—some customers would like to receive their shipments on a DDP(delivered duty paid) basis, that is, they want Alcatel-Lucent to import the equipment into the country, be responsible for customs clearances and delivery to the site. Other clients would prefer shipments on a CIP (cost insurance paid) basis, where equipment is imported into the country and transportation, warehousing and other essential logistics necessities are handled by the customer itself. “Therefore we just labeled our supply chain operations as ‘customer delivery operations’, “explains Mr Das, “because we wanted to customize it and give extra focus to customer needs.”
Uniquely separate Since the corporate is uniquely different from retail companies with their diverse consumer products manufactured solely for the market—“We are not box sellers, we are
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November 2011 | www.logisticsweek.com
27
< cover story
Inventory stocked at the Bangalore warehouse.
28
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not in the business of selling products,” reiterates Mr Das. “Rather we are solution providers”—Alcatel-Lucent diligently follows the demand planning and forecasting model of supply chain which caters exclusively to the needs and preferences of its customers. These supply chain strategies have been necessitated by the
November 2011 | www.logisticsweek.com
unique characteristics of its work. If a customer requires AlcatelLucent to provide its complete telecommunication network, the company must study carefully the customer’s requirements, the site, the rooms in which equipment has to be installed, the length of cable which must be used to connect to its switching centre, check whether the site is located on say, the first floor or the top of the building, etc. “In short, I need to have a complete topology of the site and other network,” emphasizes Mr Das, drumming his fingers on his desk, “only then can I design my equipment suited to that requirement. After every such advanced engagement with a customer, that engagement translates into advanced engineering and manufacturing activities and only then can we supply equipment to our client. Therefore, we have the forecast mechanism which will give what we call ‘heads up’ (advance information) to our factory.” The company has a limited portfolio of national corporates with vast telecom networks as its customers. Small enterprises or domestic consumers do not form a part of its exclusive customer base.“The total number of our customers, even if you stretch it, is not more than eight or ten,” says Mr Das, warming up to his subject. “Our customers are large organizations in telecommunications, our services are not meant for small or medium customers or even direct customers. We have customers like Bharti, Reliance, BSNL (the western circle is with us) and Vodafone. Even the government of India when it needs end-to-end solutions turns to us for its needs.”
extensive customer engagement Alcatel-Lucent’s demand planning and forecasting methods are
stitched together with extensive information and engagement with the customer. The pre-sales and technical teams engage with the customer before the sales team and apprise the customer of various products and their cutting-edge technology, which will enhance the value of the customer’s product. “Once this has been done, we pass on the baton to the sales team which has to engage with the customer on the commercial front,” says Mr Das energetically, while elaborating the process. “The commercial front is closed by the sales team and then it comes to delivery where my supply chain team gets involved.” The supply chain methods or the customer delivery operations of Alcatel-Lucent contrast sharply with those of other companies, as plans for assembling or even manufacturing acquire critical mass even before the commercial order has been signed. Explains Mr Das: “ The fi rst stage is consolidating the requirement of the customer by the initial teams. Once that has been
done and the sales team is negotiating the order, even if there is 50 percent chance of success, we will say that the plan is ready. Once we increase the forecast to 70 percent, we can say that we are in a position to procure the components. Even if a particular customer does not give us the order, we can use the components for some other customer as these components are commonly used. The moment the forecast is 90 percent , we say that the customer is convinced and we can go ahead with manufacturing. We call this advance ordering.”
timely order Fulfillment Alcatel-Lucent considers advance ordering an indispensable and crucial part of its supply chain processes, without which timely order fulfi llment will remain a mirage. “If we don’t plan in advance, we cannot meet the demand of the customer in time,” elaborates Mr Das carefully. “ In telecommunications the product life cycle i.e the entire process from component buying to
What we are
Alcatel-Lucent is 2nd largest telecom gear manufacturer Alcatel-Lucent is No. 1 in CDMA, optics and submarine Cables Alcatel-Lucent is among top 3 in managed Services space Alcatel-Lucent is present in more than 130 countries Alcatel-Lucent has around 77K + resources globally & 10K + in India Alcatel-Lucent’s Bell Labs - a back bone for R&D Alcatel-Lucent India has R&D labs in Chennai, Bangalore,Gurgaon and Noida.
Alcatel-Lucent’s Marley warehouse is spread out over around 15 lakh sq.ft.
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October 2011 | www.logisticsweek.com 29
< cover story
Alcatel-Lucent’s supply chain or customer delivery operations is bare-boned and free from complexities.
manufacturing and delivery, if you don’t plan in advance, takes fourfive months, whereas the customer wants delivery in four-six weeks. So how should we bridge this gap? This can be done only through advance ordering or planning which thus plays a very critical role.” Thus Alcatel-Lucent’s supply chain strategies act as a differentiator and set it apart from other companies. It’s supply chain kicks
into action even before the customer places the order; the company starts procuring, assembling and manufacturing before it has an order in hand just by gauging the readiness of the customer to place its trust and eventually its order, with the company. Does an order ever fall through? Mr Das shrugs. “It rarely happens. But if it does, it happens due to certain factors on the customer’s side—sometimes the customer may go bankrupt. So even if there is a valid contract and delivery has been made, he may not be able to pay. We then retrieve our equipment and with some modifications, deploy it elsewhere.” The corporate is prepared to endure and suffer some loss, confident in the knowledge that 70 percent-80 percent of its equipment can be reused in another telecommunications company which employs similar material.
The warehouse management processes are significantly broadbased and include every aspect.
30
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November 2011 | www.logisticsweek.com
Free From complexities Alcatel-Lucent’s supply chain or customer delivery operations is bareboned and free from complexities. ‘Intelligence’ or information from the customer is given to the component suppliers or vendors who supply material to the factories. The factories build the equipment; once the equipment has been constructed the customer is contacted seeking his approval about the date of delivery. The approval of the delivery date triggers off delivery of equipment. Documents are prepared and the equipment is packed and shipped. Depending on the timeline, the company chooses to ship the equipment by sea or air. On arrival in the country of export, once the equipment has been cleared by the customs, it is dispatched to the regional warehouse. From the regional warehouse the equipment is conveyed to the specific site, where it is often installed for the customer. For Indian customers, most equipment is outsourced from abroad. Alcatel-Lucent manufactures 60 percent-70 percent of its optics equipment in India, in keeping with the policy requirements of the Department of Telecommunications, which emphasizes that a large tranche of equipment must be manufactured in the country. The company has a trim team of 70 supply chain professionals. Alcatel-Lucent has R&D laboratories in Chennai, Bangalore, Gurgaon and Noida. But the supply chain processes of these laboratories are kept firmly apart from those of the company. “The reason is that these centres are located in software technology parks where equipment is imported without any customs duty,” notes Mr Das. “ While the government allows us to import without levying any duties, they place restrictions on us in terms of documentation. So we cannot move the equipment outside
the parks and exploit it for commercial purposes.”
What We Do
Lean customer Delivery solution
End to End Supply Chain
In 2010 Alcatel-Lucent decided, in the face of robust competition, to make their processes more stringent for a more impeccable supply chain. This was a global initiative to eliminate the inefficiencies and inadequacies in the system. The new initiative, termed the ‘Lean customer delivery solution’ (LCD), seeks to improve timelines and quality. “The Last Mile delivery is very important for our customers,” says Mr Das expansively. “For example, I conducted a study and discovered that even if my equipment was ready in the warehouse abroad, it still took 10 or 12 days to put it on the plane. We sat together and simplified the process of documentation and brought it down to six or seven days. But now we feel that it should be brought down still further to three or four days!” Often, there are unanticipated delays between inventory which has been ordered by the customer and its installation. The customer may have ordered, for example, 3000 base stations, but he may be unable to accept the delivery, either because the site is not yet ready for installation or he has not yet received the requisite permissions from the concerned authorities for installation. Due to the continuous engagement of AlcatelLucent’s project teams with the customer, the corporate learns whether the site is ready, the customer has given his consent for installation, if power is available, etc. In this babel of clashing ideas, it is only the continuous engagement with and the constant intelligence received from the customer that enables completion of the project. “Through ‘ready for installation’ or what we call RFI technology, my organization gets continuous feedback,” explains an animated Mr
Anticipate
Anticipate, prepare and plan supply chain
Source
Identify and procure for projects and end use
Make Ready
Operations and support orders
Deliver
Fulfill order, logistics, warehousing
Support
Das, now explaining his corporate’s strategies in free flow. “We get to know when the site will be ready or likely to be ready, how much time transportation will take, the amount of advance planning that is required to achieve a particular timeline at a particular site, etc. But very often if there is a time lag of one or two months, the customer asks us to hold the inventory at the port of export itself.”
tracking the order Once an order has been placed, Alcatel-Lucent systematically tracks the order through the various stages it passes before it is delivered to the customer. This is done through a multi-pronged effort to ensure swift, efficient and seamless delivery to the customer. When the customer gives a ‘hard order’, i.e a signed order, it is converted into a ‘logistics’ order to enable the factory to understand the customer’s requirements. The commercial bill of material is broken up into a logistics bill of material which is then fed into the SAP of the concerned
Customer support, revenue support
factory. Each order is monitored by a dedicated team which scrutinizes movement end-to-end. There are two methods used to track the order, fi rstly, through SAP which conveys the exact location of the order and secondly, it is done manually by creating an Excel sheet where the team notes the movement of the order every week and provides the customer with a weekly update of the status of the goods. Says Mr Das: “The order manager of each team can see the complete material required on SAP as well as Excel, the quantity, the timeline in terms of delivery, the payment and other requirements of the factory. In fact, the factory may
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November 2011 | www.logisticsweek.com
31
< cover story already be at some level of manufacturing based on the demand forecast. Thus, we have adopted a multi-pronged strategy to ensure that what we commit, we deliver. In our company we say that we must ‘Deliver on commit’, that is, deliver what you have committed.” Supply chain strategies differ with companies. Some corporates and departments of the government of India request end-to-end solutions, while others prefer that the equipment is handed over to their freight forwarders who provide the logistics solutions. Despite the
Alcatel-Lucent believes deeply in green logistics. the company has made several forays into environmental sustainability; it has attempted to have paperless offices globally by encouraging the storage of records electronically.
hardscrabble world of competition, Alcatel-Lucent prefers to be flexible and bend its policies and strategies to suit individual customers, leaving them free to explore diverse avenues for their customer delivery operations. If required, the company designs the customer delivery operations and the warehouse processes as well for its customers.
Warehouse Management Processes Alcatel-Lucent has five large and three medium sized warehouses in the country. They are located in Gujarat, Madhya Pradesh, Chattis-
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garh, Nagpur and Pune. It’s largest warehouse is at Marley, near Paris, spread out over around 15 lakh sq. ft, with a complement of approximately 100 workers. The management of the warehouse has been outsourced to a company called Daher. The Indian warehouses are also managed by logistics service providers (LSPs), but the warehouse management processes are provided by the company. The warehouse management processes are significantly broadbased and include every aspect of the customer’s requirement in terms of management, accounting and documentation. The warehouses have to be handled with consummate skill as the inventory ultimately belongs to the customer. The processes on which the warehouses are run are carefully designed within the parameters of the contract signed with the customer. “The warehouse processes are carefully devised keeping in mind how the equipment has to be stacked,” elaborates Mr Das. “We also have to maintain the equipment, see how the documentation has to be carried out and be very particular about receiving, accounting and issuance of equipment. When we issue equipment, auditing has to be done.” Telecom equipment is sensitive and maintenance can never be botched. Batteries are required to maintain the network and since they have a shelf life, they have to be recharged every six months. For equipment which needs to be recharged, vendors have to be engaged to ensure that the batteries are recharged and their shelf life is continuous and stable. The warehouses are managed in this impeccable manner by AlcatelLucent’s LSPs who are equally fastidious about maintaining records, both incoming and outgoing. “Customers check the inventory at the end, therefore record keeping is
November 2011 | www.logisticsweek.com
very crucial,” smiles Mr Das. Alcatel-Lucent has three main LSPs who between them have apportioned most of the corporate’s work globally. Most of the project warehouses in India are managed by Kuehne+Nagel, while DB Schenker and Panalpina handle the company’s freight from Europe and China. DHL is responsible for express freight for the company, with Kuehne+Nagel again being the mainstay for freight handling of the corporate in North America. Vidyashri Veloo, Senior Manager, Schenker India, notes that her company has had a four-year long association with AlcatelLucent. “We made a deep study of their logistics requirements and customers and then established comprehensive standard operating procedures,” says Ms Veloo. “ These clearly listed the required processes and service level agreements. We have also trained our customer service personnel in every metro to handle their shipments carefully.” Jatin Patel, Senior Manager, Kuehne+Nagel, agrees that “Alcatel-Lucent has a different kind of supply chain due to the requirements of the telecom industry.” However, he emphasizes that his company handles their complex requirements with ease due to their vast experience. Alcatel-Lucent believes deeply in green logistics. The company has made several forays into environmental sustainability; it has attempted to have paperless offices globally by encouraging the storage of records electronically. The corporate has tried to enforce Last Mile Delivery in CNG trucks where possible. It uses battery operated forklifts in its warehouses and in an interesting initiative, endeavours to reuse packing boxes. Silently, but swiftly and innovatively, the corporate appears to be fast-forwarding its way to success.
< feature
Balancing Act With increasing availability of disposable cash, the demand for consumer durables is on the rise. In order to keep up with the demand, various companies are doing their demand forecasting differently, writes Pritha Dey.
T
he general sight at any electronics consumer durables goods store : A whole wall full of LCDs and LEDs from various companies, music systems, refrigerators, microwave ovens, washing machines, airconditioners, water heaters— all of various shapes, sizes and specifications (and not to forget the price tags and the status symbols that the products have become)…
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innumerable products to choose from. Why talk about something we all know? Well, as potential buyers, we do not generally invest time in thinking who decides how many commodities to manufacture, or how it reaches the store. But little do we know that a lot of effort goes into making things fall into place. That is where demand forecasting comes in – the activity of
November 2011 | www.logisticsweek.com
estimating the quantity of a product or service that consumers will purchase. A Corporate Catalyst India, December 2010, Report on Consumer Durables Industry in India states: “India’s consumer market is riding the crest of the country’s economic boom. Driven by a young population with access to disposable income and easy finance options, the consumer market has been throwing up staggering figures. The Indian
durables market, with a market size of US $ 27.38 billion in 2008-09, has grown by 7.1 percent over 2009-10.” India is one of the major global markets of consumer durables at present and along with changing, rather increasing demands, demand forecasting has also changed. As the Indian middle class is now awash in considerable disposable wealth, different companies have adopted diverse methods to forecast the demands for their products to cater to their customers.
the Methods Nirmal N R, a post graduate student at Indian School of Business, Hyderabad, who is presently writing a paper on supply chain and warehousing says, “There are different methods of forecasting demand in industry. In many cases, the methods used are hybrids of theoretical methods or in other words, there are adjustments made to the predicted demand according to judgement.” Nirmal explains that the most popular method is to aggregate the demand numbers bottom up, starting with regional offices and consolidating at headquarters. He adds, “But these are often times based on unaided judgements which don’t take into account the effects of a change in pricing, advertising or design.” But, explains Nirmal, employees in regional offices can be prejudiced while forecasting itself makes the forecast prone to biases. “At the same time, studies show that some of the other judgment-based approaches, like the Delphi method, have led to improved accuracy in demand forecasting,” he elaborates. The Delphi method takes into account the forecasts of five to twenty experts who are diverse in their knowledge for their forecasts and their reasons for them.
Case Studies Demand forecasting is done in different ways by different companies.
The following is an analysis of two methods of such forecasts.
LG India K. K. Kaul, Head-SCM, LG Electronics India, says, “In LG, we have a network of 47 branch sites for which we follow a consensus-based planning process. We first collect the Bottom Up forecast through the use of GDM system (Global Demand Management), then we have Top Down targets finalised at the corporate level as per corporate strategy and also the Statistical forecast which looks at past sales trends and sales targets to be achieved.”LG finally merges both Bottom Up and Top Down to arrive at a consensus plan. Through this process LG collects the Bottom Up forecast from 47 branches at SKU level for M+2(current month plus next two months) through the GDM system. This Bottom Up forecast is free and unbiased, based on actual demand in the branch, or pricing that prevails in the region, or competition movement, etc. The Bottom Up forecast is then downloaded at the corporate office and analyzed by studying the actual availability of material, manufacturing capacity constraints, past sales trends, etc. The demand planning team at the corporate has the past sales trends of SKUs of various branches through which they generate an ideal statistical forecast of SKU level. “We also have our Top Down targets finalized by our corporate sales team. Merging these three, we finalize a Consensus Forecast,” explains Mr. Kaul. “The Consensus making process is a rigorous process done with all 47 Branches through a Voice Conference call where we have detailed discussions.” The points of discussion are: n Category Killer Models n Constraints models on availability n Growth over last year n Pricing and Schemes
In LG, we have a network of 47 branch sites for which we follow a consensusbased planning process. — K K Kaul Head -SCM, LG Electronics, India
After the consensus forecast is finalized, these numbers are presented to top management for final review and discussion. With these inputs, the plan is further rationalized and finalised. The finalised plan is then uploaded in the system.
SHARP India Harvind Mohan, Senior ExecutiveMaterial Planning, SHARP India, explains the different demand forecasting methods implemented by his company. Mr. Mohan says, “The first method of forecasting is the Historical Review. If a company has introduced similar new products into similar markets in the past, these histories can often be good predictors of future outcomes.”If a company has no such history, then histories of similar new products introduced by competitors or other companies can serve as historical guidelines to help derive a new product sales forecast. A second method of forecasting new products is the Test Market. The new product is developed and introduced into one or more test markets. INDIA |
November 2011 | www.logisticsweek.com 35
< feature missing from the simulation during this “before” measurement. Then the consumer is exposed to the new product concept. Later, the consumer sees the same simulated display (except that now it contains the new product) and is asked to make the same choices or purchase decisions as before.
Quantitative forecasting Methods
Time series methods and reasoning are the main methods. Time-series analysis basically relies on historical data and attempts to project historical patterns into the future — Harvind Mohan Senior Executive-Material Planning, SHARP India
Actual store sales and market shares are tracked. Often this sales tracking is supplemented by survey-based tracking of consumer awareness, trial, usage, and repeat purchase patterns. “Before And After Retail Simulation is the third method,” says Mr. Mohan. A sample of target audience consumers is presented with simulations showing the in-store retail environment. The consumer is asked to choose or “purchase” brands as they normally would. The new product is
Nirmal says, “Quantitative methods depend on available data and statistical analysis and extrapolation to forecast demand. Software packages can identify the cyclical nature of the industry and smoothen out the fluctuations.” The Quantitative forecasting methods according to Mr. Kaul are: n Time Series Methods n Moving Averages n Correlation & Regression Analysis n Extrapolation Mr. Mohan says, “Time series methods and reasoning are the main methods. Time-series analysis basically relies on historical data and attempts to project historical patterns into the future.“ Long-Term And Short-Term Demand Forecasting Demand forecasting is generally done at two levels – long-term and short-term. Long-term forecasting is usually done at a yearly business plan level, in which the business plan of an entire year is finalized by looking at the market size, growth, market share
gain, profit and loss, sales revenue etc. Thereafter, the sales numbers are finalised. “In long-term forecasting we also discuss planning for manufacturing strategy, line capacity enhancement, and diversification and technological upgradation. Location wise strategy (Noida / Pune / EMS),” says Mr. Kaul. Mr. Mohan is of the opinion that “In Long-term, the supply of all the factors of production, with the possible exception of finance, is variable. The purpose is to provide a basis of broad directional planning and not just operational planning.” Short-term forecasting, Mr. Kaul explains, is usually done for four months at a time. This includes: n Scheduling and planning of production to avoid excess and shortage scenarios n Proper management of inventories both manufactured and CBU (complete built-up units) n Formulating a sales strategy “The sales strategy has to be formulated keeping in mind the pricing, changing patterns of demand, and competition analysis,” adds Mr. Kaul. “In short-term the supply of all factors of production is fixed. The purpose is to aid optimum utilization of a given supply of various factors of production to initiate corrective action in the next time period.”
essential Changes After demand forecasting is done, some changes may be required in
An Industry Overview 2007 - 08 over 2005-06
Product Category
2008-09 over 2009-10
Percentage
Growth Driver
Percentage
Growth Driver
Air-conditioners
20-22
Decreasing prices, changing lifestyle
30-40
Reduction in prices
Refrigerators
5-8
High demand for frost-free segment together with reduction in prices
24
Low penetration level in the country and increase in demand from rural and semi-urban areas
Color televisions
5-8
Increasing disposable income and declining prices
30-40
Reduction in prices of LCD, LED
Washing machines
8-10
Reduction in prices of fully automatic machines
30
New models launched and reduction in prices
Source: Corporate Catalyst India
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< feature the supply chain in order to support the changes in demand. As Mr. Kaul puts it, the changes required are: n Rule based operation n A supply planning strategy based on availability norms. n A good operational set-up to support logistics for effective distribution planning n Logistics and warehousing strategy. n Regular review and KPI management system
Consequences Of Inaccurate forecasts Inaccuracy can never produce good results. Demand forecasting is also no different. Nirmal points out, “One of the important things to be noted about demand forecasting is that it will not be 100 percent accurate. The effort is always to improve the accuracy of the forecast to the possible level.” An inaccurate demand can either result in a shortage of goods or an excess inventory being present in the supply chain. More than the one-time effect of such an inaccurate demand, this also creates behavioral differences in the participants of the supply chain resulting in a bull whip effect. As Mr. Kaul puts it, “Inaccurate demand will lead to high accumulation of inventories, shortages or excess of material and finally decreased CSL (Customer satisfaction level). All these will ultimately lead to customer dissatisfaction.” But accurate demand forecasting when not
backed by right resource planning on the distribution and logistics front, will lead to increased logistics costs which will be uncalled for. “Inaccurate demand will lead to increased IBT (inter-branch transfers), which will again add to logistics costs and may also damage the products by courier movement, particularly if the numbers are small,” Mr. Kaul elucidates. Inaccurate demand will affect any business as a whole. Therefore, accurate and timely demand plans are a vital component of a manufacturing supply chain. “Inaccurate demand forecasts typically will result in supply imbalances when it comes to meeting customer demand. Forecast accuracy at the SKU level is critical for proper allocation of resources.” adds Mr. Mohan.
abundance Vs unavailability In Mr. Kaul’s opinion, “A situation wherein too much inventory is produced and remains on the shelf is worse as inventory will get stuck and lead to losses.”Such a situation will lead to further losses as the shelf inventory has to be liquidated by giving additional schemes or price drops. Mr. Kaul adds, “Although the second situation should be avoided as a shortage will lead to customer dissatisfaction due to unavailability of products, but compared to the first situation, it is good as the system will have lean inventory. Also, in such a situation all available goods get sold
Source: LG and Sharp
Industry Best Practices LG
SHARP
Planning and scheduling production and availability of finished goods
Customer service management
Budgeting of costs and sales revenue
Procurement
Controlling inventories
Product development and commercialization
Making policies for short-term and long-term investments
Manufacturing flow management/support
Helps in target setting and target achievements
Physical distribution Outsourcing/partnerships Performance measurement Warehousing
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in anticipation of a shortage.” Sathiyanarayanan Karthikeyan, Regional Logistics Co-ordinator, West, Whirlpool India, agrees with Mr. Kaul as he says, “A situation wherein too much inventory is produced and remains on the shelf is worse.” Mr. Mohan differs with Mr. Kaul slightly as he says, “Both situations are bad. If too much is produced and can’t move, it results in blockage of capital. In the latter case, manufacturers lose market share as a consequence because a customer has lots of choices in the market to choose from.” In agreement with Mr. Mohan, Nirmal says, “Both conditions are bad and it may be difficult to choose one over the other. Specifically in the consumer durables industry where the shelf life is not so high and the obsolescence lower, a high inventory in the system means more money blocked in working capital and a shortfall in supply would result in lost sales and reputation.” The difference between the two, according to Nirmal, would be that the former is easier to quantify while the latter is difficult to quantify.
Industry Best Practices “Collaborative planning, forecasting and replenishment (CPRF) is an industry best practice which companies are working on, but this needs systems infrastructure and integration at customer level.” informs Mr. Kaul. It is a business practice that combines the intelligence of multiple trading partners in planning and fulfillment of customer demands.
Seasonal effects During the festive season, there is often a spike in sales. Mr. Kaul says, “Yes, there is special focus on seasons and festivities which drive sales. Special focus is given to festival planning.” Nirmal agrees and remarks that “Specifically the consumer durables industry in India is quite seasonal with almost 30 percent of the consumption happening during the festive season.”
< feature Mr. Kaul explains that the LG forecasting team generally forms a special task team to focus on certain specific festivals and do weekly review to check whether production, supply chain and sales activities are on track or not. In case any issue is highlighted, it is immediately addressed and resolved. He explains further, “We conduct sales and operational planning meetings on every Tuesday and issues, if any, are presented before the senior management body. During festive occasions and specific seasons, major numbers are driven by certain specific branches in specific regions.” Like in the case of Onam, which is a major festival in Kerala, LG starts its demand forecasting two months prior to the festival and planning is done accordingly. Material to be supplied is strategically produced and supplied
through ships to optimize costs and stored in warehouses, so that material is always available to address sudden peaks in demand. Also, there is certain material which is strategically stored at central locations so that it can cater to other branches in the south of the country as well. “As far as festivities are concerned, apart from Onam, Durga Puja for the eastern region, Ganesha Utsav for the western region, and, Diwali for all India are the major buying seasons,” adds Mr. Kaul. Mr Karthikeyan points out that sales fluctuate due to the onset of different seasons as well. “Usually in consumer durable products, the demand can be forecast according to the season as per consumer requirement. For example, in winter the sales for washing machines will be very high, and in sum-
mer the demand for fridges and airconditioners will top sales charts.” Foreign Investment up to 100 percent is possible in the Indian consumer electronics sector to set up units exclusively for exports. All imports are duty free now and hence manufacturing products and exporting them have become much easier. The WTO regime which came into force in 2005 allows zero customs duty on imports of all telecom equipment. In fact, electronics was one of the first sectors in India to face complete customs tariff elimination. All these policies and initiatives have helped industry grow. Backed by the higher living standards of the modern Indian middle class, demand for consumer durables is on the rise, making demand forecasting quite a challenging job.
Imprint Feature
“IWLS Would Be A More Focused Show For The Western Region” Anuj Mathur, Director-Exhibition, Manch Communications Pvt. Ltd. speaks of his plans for the India Warehousing & Logistics Show to be held in Gujarat this month. What are the new additions to this year’s IWLS? The main reason for bringing this edition to Ahmedabad is to focus on the robust growth in the Western region. We have introduced India Cold Storage Show for the first time. The dairy, agriculture and seafood industry is dominant in western India and this show would offer the latest technology and equipment for the foolproof storage of these perishable produce. Also, in synergy with the latest initiative of Gujarat government in promoting the use of renewable energy, we have concentrated on the application of this alternate energy in logistics sector. The Union Budget has brought cold storage under infrastructure. What is the growth you expect to see in the next five years? The timing of our cold storage show is perfect, if we look at the focus of central government on this sector. India has just started on this sector and there is a huge potential to grow the businesses. Our cold storages are still very conventional and need desperate make over to be prepared for the demand to come. We also need new modern cold storage facilities especially for the multinationals coming into the user industry including dairy, processed food, pharmaceutical, agriculture and allied industries. I see next five years as the turning point for the cold storage sector with a growth rate of over 18% for at least next three years. With logistics parks becoming popular, the demand for material handling is expected to have a commensurate increase. How are vendors gearing up to meet this demand?
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The material handling sector has seen a tremendous growth in last 2-3 years with several international giants entering the Indian market. Suppliers are investing in more sophisticated equipment. What are the benefits that visitors to the show can expect this year? IWLS would be a more focused show for the western region. We are not only targeting the host state of Gujarat but the entire central and western India. Visitors can expect a wide range of products and solutions from warehouse fabrication to warehouse management systems, materials handling to automation, AIDC solutions to storage systems, data loggers to PUF panels, anything and everything to do with warehousing and cold storage industry. Although LSPs are sprucing up warehousing facilities, user companies continue to grumble about delayed experience. What do you think is lacking? I think it would be partial to blame LSPs for not meeting the deadlines always. We have got several internationally renowned service providers and even Indian companies are adopting same processes. There are many factors influencing the delay that are not in control of LSPs. The major loss of time is during transportation and this would be a lot better once we have GST in place. This would eradicate the existing state border taxes and time loss at each barrier. At the same time, LSPs should gear up for adapting the GST from the day it gets notified.
case study
CoCa-Cola amatil, australia
award winning solution for coca-cola amatil. “The quality of solution offered by Swisslog outstripped their competitors and reflected their knowledge of CCA’s business needs.“ Derek O‘Donnell, National Logistics & Planning Manager Supply Chain, Coca-Cola Amatil
The Customer and their Requirements Coca-Cola Amatil (CCA) has been located in Northmead for more than 30 years and over this time, has experienced high levels of continuous growth. The Northmead plant manufactures 60 million unit cases of soft drinks per year, producing product in cans at 2,000 per minute and PET bottles at 600 per minute. As CCA outgrew its on-site warehousing facilities, stock was stored in multiple offsite locations which created numerous problems such as high levels of stock write-offs, site congestion and other health and safety risks.
CCA required a new system to completely modernise their warehousing in Northmead and consolidate storage onto a single site. The new facility needed to address chain of responsibility requirements for transport and ensure accurate and timely replenishment to their other operations. The solution also needed to enable CCA to achieve world best practice levels of customer service, operational costs and stock accuracy. It needed to provide a safe working environment and facilitate their strategic growth platform whilst also meeting FIFO, quality and delivery requirements.
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COCA COLA AMATIL / February 2010
The Solution
Key design elements are:
Swisslog worked in collaboration with CCA to assess the feasibility of different distribution options applicable to their New South Wales (NSW) operations, before designing the materials handling solution.
storage systems Given CCAâ&#x20AC;&#x2DC;s high pallet storage requirement and their limited availability of on-site space, Swisslogâ&#x20AC;&#x2DC;s solution maximised vertical height using a crane fed automated storage and retrieval system (ASRS). This allowed a 32m tall High Bay which can store the equivalent of 158 million cans! The racking design was optimised to minimise both building and material handling costs. A clad rack design was chosen to achieve these benefits whereby the racking itself forms part of the construction of the building. Clad rack also enabled a quicker implementation schedule versus a more traditional design where a free standing rack is built inside a conventional building.
Once the business requirements were determined and the design levels forecast and set, efforts shifted to designing the best material handling solution. Swisslog produced a design which focused on innovative methods of combining and evolving proven technology to the site limitations and also on optimising the entire facility to provide the most cost effective solution.
transportation Hub A monorail linking the receiving, storage and staging operations allows pallets to be quickly and easily transported from any source to any destination within the system. During the design phases the transportation and handling strategies were optimised to enable the monorail to transport 740 pallets every hour. A pallet is delivered to a destination by the monorail every 5 seconds. staging systems Due to CCAâ&#x20AC;&#x2DC;s high system throughputs, it was essential to ensure the system provided adequate staging to enable a continual flow of pallets to the docks. The staging areas provide operational flexibility during peak and non peak periods and were designed to enable the
LOGIstIcs data High Bay Warehouse Length Height Width Footprint Quantity of Steel Capacity
Material Handling system 127 m 32 m 92 m 11,680 m2 3,000 tonnes 55,432 pallets
Infeed Production Infeed External Conveyor Monorail Capacity Monorail Trolley Speed Automated Cranes
staging and Loading 240 pallets / hr 60 pallets / hr More than 1.5km 740 pallets / hr 7.2 km / hr 13 @ 28m tall
6 Fully Automated Truck Loading Docks 500 m of Pallet Flow Lanes Total Staging Capacity: 824 pallets, 30 trucks Total Outfeed: 540 pallets / hr
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COCA COLA AMATIL / February 2010
swisslog’s sCope of supply > all materials handling equipment for the facility, including controls software. > warehouse design. > engineering and system planning. > overall project management. > Continuous customer support. > lifetime partnership.
loading of a trailer whilst the system automatically stages the next load. In order to achieve the targeted truck turn around times, automated loading was considered vital given the technology‘s fast response times. Between the 6 docks over 15 trailers can be loaded every hour, which is one 22 pallet trailer every 4 minutes.
The Benefits In addition to effectively enabling significant growth, Swisslog‘s solution provided CCA with the ability to consolidate its NSW warehousing operations, improve its efficiency and incorporate its environmental initiatives. Also, despite its 24 hours a day, 7 days a week operation, the High Bay requires
very few staff. There are just 26 people employed directly in the High Bay by CCA. Most importantly CCA’s customers have benefited from the completion of the Northmead High Bay in a number of ways including very high inventory accuracy and on time delivery. The state-of-the-art warehouse is now the largest of its kind in the southern hemisphere and has one of the highest throughput handling systems in the world. The Northmead warehouse was recognised by the Logistics Association of Australia in 2009 when it was awarded with a Smart Award for Excellence in Supply Chain Innovation. It also scooped a prestigious Mercury award in 2009 for its Technology Application.
custOMeR data Coca-Cola Amatil is the principal CocaCola licensee in Australia and independently manufactures its own soft drinks and mineral waters. It bottles and distributes Coca-Cola soft drinks and other beverages in several countries. www.ccamatil.com www.coca-cola.com
Products As well as Coke and its various derivatives, Coca-Cola Amatil produces a number of other soft drinks, including Mount Franklin, Deep Spring natural mineral waters, Neverfail Water, Grinders Coffee, GV Fresh and GV To Go juices, Fanta, Lift lemon drinks, Pump bottled
water, Powerade sports drink, Sprite lemonade, and the Kirks range of lower-cost soft drinks including Kirks creaming soda. Location Coca-Cola Amatil employs more than 16,000 people in five countries across the Asia-Pacific.
< SpEcial SupplEmEnt
Trucks, Anyone? The logistics sector has grown over the years, with road being more favored over other modes of transportation. Since the growth in total freight in India, the share of commercial vehicles has also amplified in the market. In this special issue, we carry profiles of commercial vehicles from the stables of a few of India’s major brands competing in the market.
EichEr
Eicher, one of the leading players in the Indian automobile industry, promises to serve its customers better by providing value at lower total cost of ownership. Its unit manufactures and markets commercial Model Wheelbase (mm) Overall Length (mm) Minimum Turning Radius (m) Gross Combination Weight (kgs) Engine Type Max. Power Max. Torque Bore x Stroke (mm) Clutch Gear Box Rear Axle Front Axle Steering Suspension Brakes Wheels & Tyres Fuel Tank (litres) Gradeability Max. Speed Electricals Cabin Trailer Price
eicher 40.40 3485 5925 6.77 (for tractor alone) 40200 Cummins 6BTAA BS II 180 HP @ 2500 rpm 66K gm @ 1300-1700 rpm. 102x120 Single dry plate, Spring loaded Pull type, with clutch booster 6 speed synchromesh gear box of 80 kgm capacity MERITOR RS-160, Banjo type fully floating, single reduction hypoid gear Heavy duty forged “I” beam reversed elliot type Hydraulic Power Assisted, Re-circulating Ball & Nut Type(Ratio-20.2:1) Semi elliptical laminated leaf springs, Hydraulic double acting telescopic shock absorbers in front only Service Brake : Dual Circuit, Full air,‘S’ cam Parking Brake :Spring brakesacting at rear wheels LH/RH actuated, pneumatic controlled on the rear axle 10.00 x 20 – 16 PR 370 18% 70kmph 24V(2x12V), 120Ah Ergonomically designed, spacious, comfortable & safe cabin. 3 Axle Semi Trailer Approx. `17.56 lakhs (ex -Thane)
eicher 40.40
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vehicles with Gross Vehicle Weight (GVW) ranging from five tons to 40 tons. Its trucks are ideally suited for a wide range of segments like steel, cement, containerized goods, bulkers/bullets, wooden logs, automobiles and odd dimension cargo, parcels and courier, white goods, FMCG, POL tankers, captive goods, and food grains.
November 2011 | www.logisticsweek.com
Model
eicher 35.31
Wheelbase (mm) Cargobody Deck Length, mm (Ft) Overall Length (mm) Minimum Turning Radius (m) Ground Clearance (mm) Gross Vehicle Weight (kgs) Payload (kgs) Engine Type
4700 7333 (24”)
Max. Power Max. Torque Bore x Stroke (mm) Clutch Gear Box Trailing Axle Front Axle Steering Frame Suspension Brakes Wheels & Tyres Fuel Tank (litres) Gradeability Max. Speed Electricals Cabin Available options Price
9926 10.35 252 31000 22010 6 cylinder, water cooled,turbo-charged intercooled DI diesel engine - BS II 154 HP @ 2400 rpm 56 Kgm @ 1400-1600 rpm 100 x 105 Single dry plate hydraulic assisted spring loaded Pull type 6 speed synchromesh gear box of 80 kgm capacity Tag Axle linked with drive axle through Bell Crank mechanism Heavy duty fully floating banjo type Heavy duty forged “I” beam reversed elliot type Hydraulic Power Assisted with twin steered axle, Re-circulating Ball & Nut Type(Ratio-22.2:1) ‘C’ Channel ladder type- 285x76x6 Semi-elliptical laminated leat springs,with bell crank mechanism in rear, Hydraulic double acting telescopic shock absorbers in front only Service Brake : Dual Circuit, Full air,‘S’ cam with Auto Slack Adjuster. Parking Brake :Spring brakesacting at rear wheels LH/RH actuated, pneumatic controlled on the rear axle 10.00 x 20 – 16 PR 220 18% 78 Kmph 12V, 120 Ah Ergonomically designed, spacious, comfortable, safe and tiltable cabin Cowl with chasis, Cab with Chasis and Built-up Approx. `19.86 lakhs (ex -Thane)
eicher 35.31
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November 2011 | www.logisticsweek.com
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< SpEcial SupplEmEnt Model
eicher Terra 16 hdr
Wheelbase (mm) Tipper Body Volume Overall Length (mm) Minimum Turning Radius (m) Ground Clearance (mm) Gross Vehicle Weight (kgs) Engine Type Max. Power Max. Torque Bore x Stroke (mm) Clutch Gear Box Rear Axle Front Axle
3485 8.5 CuM 5870 7.1 252 16200 6 cylinder, water cooled,turbo-charged intercooled DI diesel engine - BS II 147 HP @ 3200 rpm 41 Kgm @ 1440 rpm 100x105 Single Dry Plate , Diaphragm type ET60S5 ( Eicher 6M5H) Heavy duty fully floating banjo type Forged “I” beam, reverse elliot type
Steering Frame Suspension Brakes
Hydraulic Power Assisted, Re-circulating Ball & Nut Type(Ratio-20.2:1) All steel ladder with bolted cross members-230x76x6 Semi elliptical laminated leaf springs, Hydraulic double acting telescopic shock absorbers in front only Full Air Brake,Divided line, with Auto Slack Adjuster Parking Brake : Spring brake actuated, pneumatic controlled on the rear axle 10.00 x 20 – 16 PR 220 22.50% 89 Kmph 12V, 120 Ah Ergonomically designed, spacious, comfortable & safe cabin. Wipro 49° Under body and front end Approx. `13 lakhs (ex -Thane)
Wheels & Tyres Fuel Tank (litres) Gradeability Max. Speed Electricals Cabin Tipping Kit Tipping Angle Tipping kit option Price
eicher Terra 16 48
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November 2011 | www.logisticsweek.com
< fEaturE Model
eicher 15.16
Wheelbase (mm) Cargobody Deck Length, mm (Ft) Overall Length (mm) Minimum Turning Radius (m) Ground Clearance (mm) Gross Vehicle Weight (kgs) Payload (kgs) Max. Torque Bore x Stroke (mm) Clutch Gear Box Rear Axle Front Axle Steering Frame
4300 5450(18") 7900 8.1 252 16200 10300 41 Kgm @ 1400 rpm 100 x 105 Single plate Dry Type 5 speed synchromesh gear box of 40 kgm capacity Heavy duty fully floating banjo type Forged "I" beam, reverse elliot type Hydraulic Power Assisted, Re-circulating Ball & Nut Type(Ratio-20.2:1) ‘C’ Channel ladder type- 230x76x6
Suspension Brakes Wheels & Tyres Fuel Tank (litres) Gradeability Max. Speed Electricals Cabin Price
Semi elliptical laminated leaf springs, Hydraulic double acting telescopic shock absorbers in front only Service Brake : Full Air Brake, divided Parking Brake : Spring brake actuated, pneumatic controlled on the rear axle 10.00 x 20 – 16 PR 220 22% 84 Kmph 12V, 120 Ah Ergonomically designed, spacious, comfortable, safe and tiltable cabin Approx. `12-13 lakhs (ex -Thane)
eicher 15.16 INDIA |
November 2011 | www.logisticsweek.com 49
< SpEcial SupplEmEnt
mahindra naviStar Mahindra & Mahindra entered into a joint venture with Navistar Inc USA, in 2005 to design a range of light and heavy commercial vehicles well-suited to Indian terrain. They promise to ‘outperform’ the average performance of the Indian trucking industry with superior technology; efficient ergonomic product design along with extensive research that will induce fewer maintenance hassles and higher fueleconomy. Mahindra Navistar can be the game changer providing high performance solutions for every commercial vehicle segment right from 3.5 ton GVW to 49 ton GVW. MAHINDRA NAVISTAR Model GVW Engine Transmission Max. Power Max. Geared Speed
MN 31 31000 kg MaxxForce 7.2 litre, TCIC BS III 6 Forward Synchromesh, 1 Reverse 151 KW @ 2200 RPM 85 kmph
Model GVW Rated Payload Engine Transmission Max. Power
MN 31 31000 kg 20500 kg (with high side deck) MaxxForce 7.2 litre, TCIC BS III 6 Forward Synchromesh, 1 Reverse 157 kw [210 hp] @ 2200 RPM
Max. Torque Gradeability Chassis Frame Steering
920 nm @ 1250 RPM 23% Ladder type. Uniform C-Section Tilt and Telescopic Power Steering with Twin Steer Axle Full Air S-Cam, 10 Bar System 417 litres (250, 350 litres-optional) Radial - 10R x 20 - 16 PR 24 V [2x 12 V] 6100 mm/ 7135 mm [24 ft]
Max. Geared Speed Gradeability Chassis Frame Steering
79.6 kmph 22.50% Ladder type. Uniform C-Section Tilt and Telescopic Power Steering with Twin Steer Axle Full Air S-Cam, 10 Bar System 417 litres (250, 350 litres-optional) 10 x 20 - 16 PR (Optional: Radial) 24 V [ 2 x 12 V] 6100 mm/ 7135 mm [24 ft]
Brakes Fuel Tank Wheels and Tyres Systems Voltage Wheel Base/ Load Body Length Inside Load Body Options Cabin Cabin Tilting Vehicle Tracking System Air Conditioning ABS Price
Cabin & Chassis, High Side, Fixed Side Single Sleeper, Double Sleeper Manually Operated Hydraulic Assisted Factory Fitted
Brakes Fuel Tank Wheels and Tyres Systems Voltage Wheel Base/ Load Body Length Inside Cabin Cabin Tilting Vehicle Tracking System Air Conditioning
Single Sleeper, Double Sleeper, Cowl Manually Operated Hydraulic Assisted GPS Optional Optional
Optional Optional Approx. `20.24 lakhs (Aurangabad)
MN 31 50
INDIA |
November 2011 | www.logisticsweek.com
MAHINDRA NAVISTAR Model GVW Rated Payload Engine Transmission Max. Power Max. Speed Gradeability Chassis Frame
MN 25 25000 kg 16000 kg MaxxForce 7.2 litre, TCIC BS III 6 Forward Synchromesh, 1 Reverse 151 KW [ 210 HP] @ 2200 RPM 85 kmph 29% Ladder type. Uniform C-Section
Steering Brakes Fuel Tank Wheels and Tyres Systems Voltage
Tilt and telescopic power steering Full Air S-Cam, 10 Bar System 417 litres (250, 350 litres-optional) 10 x 20 - 16 PR Cross Ply [Radial: Optional] 24 V [2 x 12 V]
Wheel Base/ Load Body Length Inside Load Body Width [Inside] Load Body Options
5350 mm/ 7315 mm [24 ft]; 5000mm/6705 mm [ 22 ft] 2375 mm [7 ft. 9 in]
Cabin Cabin Tilting Vehicle Tracking System Air Conditioning ABS Price
Model GVW Engine Transmission Max. Power Max. Geared Speed Gradeability Chassis Frame Steering
MN 25 25000 kg MaxxForce 7.2 litre, TCIC BS III 6 Forward Synchromesh, 1 Reverse 151 KW [ 202 HP] @ 2200 RPM 85 kmph 29% Ladder type. Uniform C-Section Tilt and telescopic power steering with twin steer axle Brakes Full Air S-Cam, 10 Bar System Fuel Tank 417 litres (250, 350 litres-optional) Wheels and Tyres Radial 10RX20 - 16 PR Systems Voltage 24 V [2 x 12 V] Wheel Base/ Load Body 6100 mm/ 7135 mm [ 24 ft] Length Inside Load Body Options Cabin and chassis, High Side, Fixed Side Cabin
Single Sleeper, Double Sleeper
Cabin and chassis, High Side, Fixed Side
Cabin Tilting
Manually Operated Hydraulic Assisted
Single Sleeper, Double Sleeper Manually Operated Hydraulic Assisted Factory Fitted
Vehicle Tracking System Air Conditioning ABS
Factory Fitted Optional Optional
Optional Optional Approx. ` 16.63 lakhs (Aurangabad)
MN 25 INDIA |
November 2011 | www.logisticsweek.com
51
< SpEcial SupplEmEnt man forcE India’s Force Motors experience combined with German Company MAN’s high-end technology has brought out an array of contemporary commercial vehicles on Indian roads suited to the Indian market. Force Motors has played a pioneering role in the development of light commercial vehicle transport in India, with iconic vehicle brands like the Tempo, Traveller, Matador etc. The range of products manufactured by MAN Force includes mining and construction tippers, haulage tractors and multi axle trucks, from 16 ton GVW to 49 ton GCW. MAN FORCE Model
MaN cla 25.220 6x4 Box Body Tipper
Model
MaN cla 25.220 6x2 chassis with cabin
Engine
MAN D-0836, 6.9 Litres, 6 Cyl., In-Line DI Diesel TCIC
Engine
MAN D-0836, 6.9 Litres, 6 Cyl., In-Line DI Diesel TCIC
220 HP (162 kW) @ 2400 r/min 800 Nm @ 1200-1800 rpm
Max. Power Max. Torque
220 HP (162 kW) @ 2400 r/min 800 Nm @ 1200-1800 rpm
Bharat Stage III
Emission Compliance
Bharat Stage III
Clutch
Single, Dry Plate - Pull type, Power assisted, Asbestos free clutch, 395 mm Dia.
Max. Power Max Torque Emission Compliance Clutch
Single, Dry Plate - Pull type, Power assisted, Asbestos free clutch, 430 mm Dia.
Gearbox (Licence ZF)
9S 1110-Over Drive
Gearbox (Licence ZF)
Front Axle Rear Axle
Heavy Duty Cranked forged I-Beam type "MAN H9 & HD9 13120 Planetary with hub reduction"
Front Axle Rear Axle
Steering
Power steering ZF-8043, Telescopic & Adjustable
Steering
Power steering ZF-8043, Telescopic & Adjustable
Brakes
S-Cam, Dual circuit, Air Actuated Drum Brakes with MAN patented EVB
Brakes
S-Cam, Dual circuit, Air Actuated Drum Brakes with MAN patented EVB
Wheels & Tyres
7.5"x20" / 11.00"x20"
Wheels & Tyres
7.5"x20" / 10.00"x20"
Cabin
"MAN Day Cabin (AC Optional) Hydraulic Cab Tilt with tilt angle of 60 degrees"
Cabin
"MAN High Roof Sleeper Cabin (AC Optional) Hydraulic Cab Tilt with tilt angle of 60 degrees"
Price
On Request
Tipper Body
16 cu.m Standard Box Body Tipper
Price
On Request
MaN cla 25.220 6X4 52
INDIA |
November 2011 | www.logisticsweek.com
6S 850-Over Drive Heavy Duty Cranked forged I-Beam type Hypoid Axles
MAN FORCE Model
MaN cla 49.280 6x4 Tractor head
Model
MaN cla 40.220 4x2 Tractor head
Engine
MAN D-0836, 6.9 Litres, 6 Cyl., In-Line DI Diesel TCIC
Engine
MAN D-0836, 6.9 Litres, 6 Cyl., In-Line DI Diesel TCIC
Max. Power
280 HP (206 kW) @ 2400 r/min
Max. Power
220 HP (162 kW) @ 2400 r/min
Max. Torque
1100 Nm @ 1300-1700 rpm
Max. Torque
800 Nm @ 1200-1800 rpm
Emission Compliance
Bharat Stage III
Emission Compliance
Bharat Stage III
Clutch
Single, Dry Plate - Pull type, Power assisted, Asbestos free clutch, 430 mm Dia.
Clutch
Gearbox (Licence ZF)
9S 1110-Over Drive
Gearbox (Licence ZF) 9S 1110-Direct Drive
Front Axle
Heavy Duty Cranked forged I-Beam type
Front Axle
Heavy Duty Cranked forged I-Beam type
Rear Axle
MAN H9 & HD9 13120 Planetary with hub reduction
Rear Axle
Hypoid Axles
Steering
Power steering ZF-8043, Telescopic & Adjustable
Steering
Power steering ZF-8043, Telescopic & Adjustable
Brakes
S-Cam, Dual circuit, Air Actuated Drum Brakes with MAN patented EVB & ABS
Brakes
S-Cam, Dual circuit, Air Actuated Drum Brakes with MAN patented EVB
Wheels & Tyres
7.5”x20” / 11.00”x20” Cross Ply (11R20 Optional)
Wheels & Tyres
7.5”x20” / 10.00”x20”
Cabin
MAN High Roof Sleeper Cabin (AC Optional) Hydraulic Cab Tilt with tilt angle of 60 degrees
Cabin
MAN High Roof Sleeper Cabin (AC Optional) Hydraulic Cab Tilt with tilt angle of 60 degrees
Price
On Request
Single, Dry Plate - Pull type, Power assisted, Asbestos free clutch, 430 mm Dia.
MaN cla 49.280 6X4 INDIA |
November 2011 | www.logisticsweek.com 53
< SpEcial SupplEmEnt Model
MaN cla 16.220 4X2 BoX BodY TiPPer
Model
MaN cla 31.220 8X2 chassis WiTh caBiN
Engine
MAN D-0836, 6.9 Litres, 6 Cyl., In-Line DI Diesel TCIC
Engine
MAN D-0836, 6.9 Litres, 6 Cyl., In-Line DI Diesel TCIC
Max. Power
220 HP (162 kW) @ 2400 r/min
Max. Power
220 HP (162 kW) @ 2400 r/min
Max Torque
800 Nm @ 1200-1800 rpm
Max. Torque
800 Nm @ 1200-1800 rpm
Emission Compliance
Bharat Stage III
Emission Compliance
Bharat Stage III
Clutch
Single, Dry Plate - Pull type, Power assisted, Asbestos free clutch, 395 mm Dia.
Clutch
Single, Dry Plate - Pull type, Power assisted, Asbestos free clutch, 430 mm Dia.
Gearbox (Licence ZF)
6S 850-Over Drive
Gearbox (Licence ZF)
9S 1110- Direct Drive
Front Axle
Heavy Duty Cranked forged I-Beam type
Front Axle
Heavy Duty Cranked forged I-Beam type
Rear Axle
Hypoid Axles
Rear Axle
MAN H9 13120 Planetary with hub reduction
Steering
Power steering ZF-8046, Telescopic & Adjustable
Steering
Power steering ZF-8043, Telescopic & Adjustable
Brakes
S-Cam, Dual circuit, Air Actuated Drum Brakes with MAN patented EVB
Brakes
S-Cam, Dual circuit, Air Actuated Drum Brakes with MAN patented EVB
Wheels & Tyres
7.5”x20” / 10.00”x20”
Cabin
MAN High Roof Sleeper Cabin (AC Optional) Hydraulic Cab Tilt with tilt angle of 60 degrees
Wheels & Tyres
7.5”x20” / 11.00”x20”
Cabin
MAN Day Cabin (AC Optional) Hydraulic Cab Tilt with tilt angle of 60 degrees
Tipper Body
10/12 cu.m Standard Box Body Tipper
Price
On Request
MaN cla 16.220 4X2 54
INDIA |
November 2011 | www.logisticsweek.com
Price
On Request
Model
MaN cla 31.280 8X4 BoX BodY TiPPer
Model
MaN cla 31.280 8X4 rocK BodY MiNiNG TiPPer
Engine
MAN D-0836, 6.9 Litres, 6 Cyl., In-Line DI Diesel TCIC
Engine
MAN D-0836, 6.9 Litres, 6 Cyl., In-Line DI Diesel TCIC
Max. Power
280 HP (206 kW) @ 2400 r/min
Max. Power
280 HP (206 kW) @ 2400 r/min
Max Torque
1100 Nm @ 1300-1700 rpm
Max Torque
1100 Nm @ 1300-1700 rpm
Emission Compliance
Bharat Stage III
Emission Compliance
Bharat Stage III
Clutch
Single, Dry Plate - Pull type, Power assisted, Asbestos free clutch, 430 mm Dia.
Clutch
Single, Dry Plate - Pull type, Power assisted, Asbestos free clutch, 430 mm Dia.
Gearbox (Licence ZF)
9S 1110-Over Drive
Gearbox (Licence ZF)
9S 1110-Over Drive
Front Axle
Heavy Duty Cranked forged I-Beam type
Front Axle
Heavy Duty Straight forged I-Beam type
Intermediate Axle
Heavy Duty Cranked forged I-Beam type
Intermediate Axle
Heavy Duty Straight forged I-Beam type
Rear Axle
MAN H9 & HD9 13120 Planetary with hub reduction
Rear Axle
MAN H9 & HD9 13120 Planetary with hub reduction
Steering
Power steering ZF-8046, Telescopic & Adjustable
Steering
Power steering ZF-8046, Telescopic & Adjustable
Brakes
S-Cam, Dual circuit, Air Actuated Drum Brakes with MAN patented EVB
Brakes
S-Cam, Dual circuit, Air Actuated Drum Brakes with MAN patented EVB
Wheels & Tyres
7.5”x20” / 11.00”x20”
Wheels & Tyres
7.5”x20” / 11.00”x20” Mining Pattern
Cabin
MAN Day Cabin with AC Hydraulic Cab Tilt with tilt angle of 60 degrees
Cabin
MAN Day Cabin with AC Hydraulic Cab Tilt with tilt angle of 60 degrees
Tipper Body
18 cu.m Standard Box Body Tipper
Tipper Body
18 cu.m Rock Body Tipper
Price
On Request
MaN cla 31.280 8X4
Price
On Request
INDIA |
November 2011 | www.logisticsweek.com 55
< SpEcial SupplEmEnt
tata motorS Tata Motors is probably Indiaâ&#x20AC;&#x2122;s oldest and largest manufacturer of medium and heavy commercial vehicles. In 2005, they unveiled Tata Ace, a micro truck to transport sub-one ton goods across the country. Tata Ace has ameliorated the experience for small cargo vehicle owners and the demand since its production has only grown with over five lakh Aces being recorded on the road in 2010. In May 2009, Tata Motors ushered in a new era in the Indian automobile industry, keeping with its pioneering tradition, by unveiling a new range of world standard trucks called Prima. The CV is indigenously designed to set new standards for power, speed, and carrying capacity in the Indian trucking industry. ParaMeTers ENGINE
CLUTCH
GEAR BOX
AXLE
TaTa PriMa 4928.s
TaTa PriMa 4028.s
Model
Cummins 6 ISBe 270 30
Cummins 6 ISBe 270 30
Type
Water-cooled, Direct Injection, Turbocharged, After-cooled Diesel Engine
Water-cooled, Direct Injection, Turbocharged, Aftercooled Diesel Engine
Volume
6700 cc
6700 cc
Power
267 HP @ 2500 rpm
267 HP @ 2500 rpm
Torque
970 Nm @ 1200 - 1700 rpm
970 Nm @ 1200 - 1700 rpm
Type
Single Plate Dry Friction, Booster-as- Single Plate Dry Friction, Booster-assisted, Organic sisted, Organic
Dia
430 mm dia
430 mm dia
Model
ZF 9S 1110 TD
ZF 9S 1110 T0
Type
9 F - Synchromesh;1 R - Constantmesh
9 F - Synchromesh;1 R - Constantmesh
Model
TATA RA - 210 HR-T
TATA RA - 210 HR
Type
Planetary Hub Reduction, Fully Floating Axle Shafts
Planetary Hub Reduction, Fully Floating Axle Shafts
Ratio
6.492
Option 1 - 6.724, Option 2 - 6.492, Capacity - 16 Tonnes
Front
Parabolic Leaf Spring
Parabolic Leaf Spring
Rear
Bogie Suspension
Rear - Semi elliptic Multi Leaf Spring
Rims
8.00 X 20
8.00 X 20
Tyres
11.00 X 20 - 16 PR
11.00 X 20 - 16 PR
Type
Radial with Tube
Radial with Tube
FUEL TANK
625 litres - Standard (365 litres + 260 litres) & 370 litres (Optional)
625 litres - Standard (365 litres + 260 litres) & 370 litres (Optional)
ELECTRICALS
24 V
24 V
SUSPENSION TYRES
CABIN
Cabin
Sleeper Cabin, Four Point Suspension, Hydraulic Tilting Adjustable Steering Wheel
Sleeper Cabin, Four Point Suspension, Hydraulic Tilting Adjustable Steering Wheel
PERFORM ANCE
Max. Speed
77 kmph
99 kmph
Max. Gradeability
26.2% with Crawler Gear
23.4% with Crawler Gear
Min. Turning Circle dia in mm
14220 mm
12900 mm
AC
Standard
Standard
WEIGHT
D I M E N SIONS Price
56
INDIA |
GCW in kgs
49000
40200
ULW
9720 with Cabin
7280 with Cabin
Wheelbase
3890 mm
3460 mm
Overall Length in mm
6968 mm
6133 mm
NA
NA
November 2011 | www.logisticsweek.com
125,000/-
Partner Institute
•Comprehensive capstone project
•Curriculum supplemented by seminars and workshops
•Industry Interface
•International Immersion
•Case and simulation based pedagogy
•contemporary curriculum
•Global faculty
Features
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Your investment:
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Benefits
(11 months weekend program for the working executive)
Institute of Supply Chain Management ‘s Executive Post Graduate Program in Supply Chain Management
TaTa ace ZiP ENGINE
Engine Type
611 cc- Single Cylinder water cooled diesel engine
Maximum Output
11hp @ 3000 rpm
Maximum Torque
31nm @ 1600-1800 rpm
CLUTCH AND TRANSMISSION
Clutch
Single Plate, Dry Friction, Diaphragm Type
Gearbox
Trans Axle, 4Forward (Synchromesh) + 1 reverse (constant) gears
STEERING
Wheel Steering, Mechanical Rack and Pinion Type
SUSPENSION
Front
Independent MacPherson Strut
Rear
Coil Spring with semi-trailing arm
Shock Absorbers
Hydraulic double acting shock absorbers (front and rear)
Front and Rear
Hydraulically operated drum brakes
BRAKES TYRES
12â&#x20AC;? Radial
DIMENSIONS
WEIGHTS PERFORMANCE
Length
3020 mm
Width
1480 mm
Height
1770 mm
Wheelbase
1650 mm
Load Body
1685mm x 1480mm x 400mm
Turning Radius
3500 mm (3.5m)
Kerb Weight
685 kg
Max. GVW
1285 kg
Gradeability
22%
Top Speed
50 kmph
SEATING
Driver + 1
FUEL TANK
10 litres
Price
Approx. `1.90 lakhs (Ex-Thane)
rformance r business
TaTa ace Zip PRIMA
TaTa PriMa 4928.s INDIA |
November 2011 | www.logisticsweek.com
57
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PRESENT
High Performance Manufacturing: Report Launch Industry leaders, policy makers, and experts from the manufacturing domain discuss Accenture’s "High performance Manufacturing" report, in a panel discussion moderated and televised by Bloomberg UTV. Since the early 1990s, the Indian economy has progressively liberalized and integrated within the global economy. However, in recent times, tthe impact of the downturn, rising wages in many manufacturing hubs, growing resilience within the Indian domestic consumer market, an increasingly diversified consumer base have forced manufacturing firms to re-look at the new realities and the potential of India's competitive environment. In a bid to identify the strategic priorities, key challenges and action agenda of manufacturers in India over the next five years, Accenture commissioned a survey and embarked on conducting rigorous discussions with senior business
(L to R) Rohtash Mal, ED & CEO, Agri Machinery Group, Escorts, Ashok Taneja, MD & CEO, Shriram Pistons, Ritchie Rice, Senior, ENO Operations, Nokia, Mini Menon, Executive Editor, Bloomberg UTV, Dr. V. Krishnamurthy, Chairman, National Manufacturing Competitiveness Council (NMCC) India, Richard Bergmann, Senior Partner, Supply Chain Operations, Accenture, Sanjay Dawar, Lead, Management Consulting, Accenture, India, S. Gopal, Chief Executive, Larsen & Turbo - Komatsu Ltd. executives, policymakers and academics. Current Scenario India remains caught in a manufacturing performance paradox. In 2010, India became the ninth largest manufacturer in the world. However, the contribution of manufacturing to country’s GDP continues to remain very low in comparison to China and South Korea. For example, from 2001-2010,
agriculture, industry and services have on an average respectively accounted for around 20%, 27% and 53% of India’s GDP. Compare that with China where the average numbers are 12%, 46% and 42%, in the same order. These numbers make it evident that the non-agricultural composition of China’s GDP is far more balanced than that of India. Dr. V. Krishnamurthy, Chairman, NMCC, India, suggested, “For a balanced
Accenture’s High Performance Business Manufacturing Framework The Accenture research study aimed to discover how—given a certain set of macro constraints— some manufacturers in India are overcoming firm-level challenges in order to continue to outperform their peers and sustain high performance. Drawing insights from a survey of 100 respondents including business leaders, policy makers and academics and Accenture’s proprietary High Performance Business Research (which has examined more than 8000 companies globally), Accenture has developed a proprietary ‘High Performance Business Manufacturing Framework’. This framework provides manufacturers with insight into the three essential building blocks that are critical to become high performance manufacturers in India: Market positioning: For a manufacturer, the journey to high performance begins with a very clear articulation of
the core differentiation strategy. Manufacturers should therefore focus on investing in strategic priorities supporting their core differentiation strategy. Accenture research suggests that high performing manufacturers in India focus on investing in strategic priorities (such as, launching new products, raising productivity, scaling capacity, entering new consumer markets) supporting their core differentiation strategy. Distinctive capabilities: Accenture has identified four distinctive capabilities manufacturers need to build to effectively deploy their core differentiation strategy: 1. A smart shop floor, which allows companies to integrate lessons from past operations to balance technology and labour and to consistently deliver productivity improvements. 2. Market-driven innovation infrastructure that helps companies build an agile and cost-efficient innovation engine capable of responding to shifting customer demands. 3. Data-based decision making, which
raises the level of service and productivity in the supply chain by making optimal use of information. 4. Responsive relationships that reduce supply chain risk and help companies scale while maintaining quality. Performance culture: In order to support and exploit the distinctive capabilities that can lead to high performance in manufacturing, companies must also have the right culture – a culture of high performance. The four actions that can nurture such a culture: 1. Build manufacturing’s brand image in India within and outside the traditional boundaries of the firm. 2. Invest in a best-in-class operating environment that gives workers the incentive to offer their best on the shop floor and be loyal to the firm. 3. Use sustainability to build competitiveness, by using lessons from sustainability initiatives to strengthen core differentiation. 4. Develop leaders across the organization with the right skill sets at all levels.
G a f
g 9 s l t h
T C t d i r K m i c
c p p C a m w i w p
o r s n n t e u
n b s
r a t t s L
T D e d a
HIGH PERFORMANCE MANUFACTURING
INDIA’S NEXT OPPORTUNITY
GDP, the contribution from manufacturing and services should be 40% each, while that from agriculture should stand at 20%.” However in India, considering the growth of the services peaking in the range of 9-11%, and agricultural productivity not showing sustained improvement, over the last decade, it is manufacturing that will have to shoulder additional responsibility of helping India sustain a high growth trajectory.
optimism. Chief among them: proximity to the expanding domestic consumer market and access to high-end skilled talent, such as engineers and managers. However, it is the demand that makes manufacturing in India lucrative. “As demand actually grows the manufacturing does catch up and is catching up with it,” remarked Rohtash Mal, ED & CEO, Agri Machinery Group, Escorts.
The Challenges Currently, there are numerous challenges that daunt the Indian manufacturing industry, due to which, businesses in the manufacturing space prefer importing and trading goods rather than manufacturing them. As Dr. Krishnamurthy points out “Dependence on manufactured goods through imports is increasing, and we are developing a trade culture rather than a manufacturing culture.” Apart from investments, the key challenges cited by Accenture’s report are poor infrastructure, corruption, and lack of policy coordination. As Ashok Taneja, MD & CEO, Shriram Pistons highlighted, “There are several factors which are not allowing the manufacturing sector to grow at the rate at which it could and ought to. The most important is infrastructure deficit, where, I would place the availability and quality of power at the forefront.” Apart from these issues there are other serious problems the industry faces regularly as Taneja added, “The education system is somehow disconnected with the needs of the industry. So while we have large numbers of engineers coming from institutions every year, they need to go through an extended training program before they are useful to the industry.” Moreover, manufacturing companies are often unable to attract and retain the best talent due to stiff competition from the service industries. This trend of talent scarcity has its repercussions on other aspects as well, such as scalability. “There is a huge demand, but the ability to scale-up is a big challenge, due to shortage of talent in the manufacturing sector,” said S. Gopal, Chief Executive, Larsen & Turbo - Komatsu Ltd.
The Solutions To hone their performance across the value chain, it is time Indian manufacturers adopt a studied and systematic approach. Accenture offers one such approach through its proprietary ‘High Performance Business Manufacturing Framework’. (See box below) Additionally, there is lot India can learn from the German manufacturing sector’s growth story during the last decade and China’s “SunShine Project.” As in India, family-owned SMEs make up the backbone of German manufacturing. In recent years, these enterpriseswith active support from large industries (their customers) and government—have turned manufacturing into an art form, and have found unique ways to cut labour costs. The result of such strategies is evident. Germany has emerged as the most competitive industrial economy within EU, with a GDP growth of 3.6% during 2010, and unemployment declined in spite of the global economic crisis. Dr. Krishnamurthy said, “Innovations takes place in the SMEs, who provide the components to larger industries. There has to be greater emphasis in terms of nurturing the SMEs.” On harnessing and creating a talent pool, there are some interesting lessons to be learnt from China’s SunShine Project, which productively integrated surplus agricultural labour into its manufacturing sector. In India to address the issue of talent scarcity, Taneja suggested that instead of poaching talent, companies should ideally create surplus talent. While, L&T’s Gopal citied an example of his company, which offers its employees training, retraining, fast track and refresh courses to retain them.
The Opportunities Despite weaknesses, 98% survey respondents saw India as an increasingly attractive destination for manufacturing. They pointed at several reasons for this high level of
Going Forward The mammoth investments being made by the private sector and financial institutions in creating manufacturing capacities clearly
exhibit that there is too much at stake to risk failure. The ability of large manufacturers to drive growth among India’s SME manufacturers by achieving high performance will determine India’s ability to fully realize its inclusive growth agenda.
Advantage India The success of Chinese and American manufacturers show there is a close link between high performance and a manufacturer’s ability to make the most of the unique strengths of its local environment. Indian manufactures too, have their own set of strengths, which they need to further leverage with the motive of making the country a global manufacturing hub. “I feel there is a lot Indian firms can do themselves and collaboratively in an eco-system of the industry to ensure further growth,” said Sanjay Dawar, Lead, Management Consulting, Accenture, India. In India, the unique character of three key business levers—business technologies and processes, labour and talent, and partner networks—provide manufacturers with the opportunity to distinguish themselves from competition both at home and abroad. As Ritchie Rice, Senior, ENO Operations, Nokia said, “The skill set of the (Indian) labour force such as engineers, middle-management are readily available. We were able to ramp up here 5 years ago, virtually with no influence from our sister sites.” Agreeing with Rice, Richard Bergmann, Senior Partner, Supply Chain Operations, Accenture said, “The population and resources India has is extraordinary, considering the collaboration, the coexistence, and the level of importance education in India has had for years.” Moving forward, manufacturers can improve competitiveness by drawing on India’s world-class service sector for cutting-edge technologies to improve performance management and enhance service levels across their value chain.
< pAnoRAMA OFF THE SHELF
Retail Planning
W
ritten by a leading expert, this is a guide to planning for retail development for urban planners, urban designers and architects. It includes an overview of history of retail design, a look at retail and merchandising trends, and principles for current retail developments. Principles of Urban Retail Planning and Development will: *Provide insight and techniques necessary for historic downtowns and new urban communities to compete with modern suburban shopping centers. *Promote sustainable community building and development by making it more profitable for the shopping center industry to invest in
historic cities or to develop walkable urban communities. 8Includes case studies of recent good examples of retail development
principles of urban Retail planning and development By Robert Gibbs Publisher: Wiley Price: `3,957
Quality Improvement
T
his book aims to enable readers to understand and implement, via the widely used statistical software package Minitab (Release 16), statistical methods fundamental to the Six Sigma approach to the continuous improvement of products, processes and services. The second edition includes the following new material: Pareto charts and Cause-and-Effect diagrams; Time-weighted control charts cumulative sum (CUSUM) and exponentially
weighted moving average (EWMA); Multivariate control charts; Acceptance sampling by attributes and variables; Tests of association using the chi-square distribution; Logistic regression; and Taguchi experimental designs. six sigma Quality Improvement with Minitab, 2nd edition By G. Robin Henderson Publisher: Wiley Price: `5,445
Saying It With Water
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ased on an international symposium addressing a key issue in global development, this reference includes both the latest methodologies for and practical examples of effective management of trans-boundary water resources. Its multidisciplinary approach combines hydrology and environmental science with economic and political approaches, in line with new UNESCO and EU recommendations, which have been formulated and implemented with the active involvement of all three editors. By providing a theoretical framework as
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well as abundant case studies from southern Europe, Africa, Asia and South America, this handbook provides hydrologists, geologists, engineers and decision-makers with all the knowledge they need for their daily work. transboundary Water Resources Management: A Multidisciplinary Approach By Jacques Ganoulis (Editor), Alice Aureli (Editor), Jean Fried (Editor) Publisher: Wiley Price: `8,167
November 2011 | www.logisticsweek.com
BlogospheRe Bruce Richardson Asks: Are We Ready for social supply chains? Blogger: Jason Busch Perhaps the best-known analyst in ERP and supply chain history, Bruce Richardson, is finally independent again after a stint at Infor. Only a couple of months into this newfound freedom, he's launched a new blog that, well, sounds like the same old Bruce -- and that's a good thing. Bruce offers up a few ideas that we can learn from in the sales and CRM world when it comes to social business connectivity. In Get Ready for "Social Supply Chains" he suggests that Marc Benioff should have included suppliers in his view of the social enterprise (rather than just "employees, customers and products"). Bruce wonders whether something like the now popular SalesForce.com social Chatter tool "could be deployed as the preferred collaboration medium between brand owners and their top suppliers. After all, it would seem that you would want to capture most or all of the back and forth discussions on forecasts, purchase orders, engineering changes, shortages, and other factors versus using email, IM, fax, etc. In this case, Chatter could be used as a knowledge management system, too." Of course then the cynical Bruce comes out in describing CPOs as "deadly serious people" who might likely scream "not in my lifetime!" in embracing a social supply chain world. I'll save the social scenario Bruce outlines next for Part 2 in this series to try to make us believers in the vision (it's almost
ResouRce centeR Heat Sealing Process By Bosch Packaging Technology Validating the heat sealing process is thus critical both to comply with regulatory oversight and to be confident in the overall quality of the final product. Though there is some ambiguity in the industry as to the exact definition of validation, it is clear that all components of the sealing process that influence package integrity must be monitored, measured, and controlled. Moreover, equipment must perform the heat sealing function in a repeatable, invariable manner such that final product quality is consistent with predetermined standards. Typically, process control validation for heat sealing has dealt with three specific variables: dwell time, temperature, and sealing pressure. This white paper reviews the relevant regulatory standard for medical heat sealing and discusses some of the important
more supply chain-centric than procurement-centric, but that's OK). More important, I would argue that we're beginning to see the social supply chain enter procurement in more ways than you might think. These include new sites like MySourcingTeam. com which are driving category collaboration (for MRO, initially) between peer companies in sharing best practice templates, supplier lists, vendor experiences, etc. (full disclosure: I'm a part-owner of the site). And they also include tools like SAP Supplier InfoNet that are driving new transparency and information sharing at multiple tiers of the supply chain to share performance benchmarks and reduce vendor risks. And let's not forget BravoSolution's Education Network (BEN) for the UK public sector, a long-standing peer-to-peer online community that shares tips amongst practitioners with common interests and needs. The social supply chain world is more alive than you might think, Bruce. Sure, we might not be tweeting our POs our collaborating via Chatter to share demand schedules and haggle over commodity price escalation amongst supply chain partners yet. But we're further ahead than it might appear. Selfishly, I might also add that a humble blog rather than an established magazine or paper has also become the largest mouthpiece of the industry (and has expanded to four sites because the value of niche and micro analysis for smaller communities of interest). Not bad for less than a decade of social tools! http://bit.ly/pSMlSQ
Journals, Case Studies, Research Reports considerations that should go into implementing an effective validation process. Relevant Regulatory Standard: It specifies the validation requirements for the forming, sealing, and assembly process for the packaging of terminally sterilized medical devices. As laid out in the standard, the objective of seal process validation is to document the sequence of events in which the process is established to produce effective seals that maintain sterility to the point of use and do so in a repeatable, reliable way. Given the demands of the validation process, there are some important design features that are optimal for validation that should be considered when specifying a piece of heat sealing equipment. As a general principle, equipment that includes instrumentation with maximum access, control and input from the critical process parameter areas (time, temperature, and pressure) will better facilitate validation.
Pressure readings, in the case of a continuous band sealer, are more accurate if pressure is delivered through air solenoids which can be calibrated and pneumatically controlled to provide consistent sealing pressure. This is in contrast to spring-based pressure which is difficult to measure accurately and not calibrated externally. Furthermore, each component in the sealing process needs to apply controlled pressure. Compression wheels and cooling bars are equally important to the overall sealing success of a band sealer and therefore must also be subject to process control. Any component of a sealing process can be made valid. Process steps that can have negative effects on seal quality should receive heavy scrutiny and be incorporated into the validation process. A few salient examples include wrinkle detection, band breakage, and label application. Search Tags: heat sealing, band sealer â&#x20AC;&#x201D; Compiled by Jayashree Mendes
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November 2011 | www.logisticsweek.com
lAunchpAd Product
honeywell unveils hand-held color-Imaging scanner
H
oneywell has launched Xenon 1900 Color scanner, the industry's first hand-held area-imaging scanner with color-imaging capabilities. The Xenon 1900 Color scanner will allow users to capture color images and scan high-contrast color bar codes that were previously unreadable, while retaining Xenon’s best-in-class scanning performance on black and white bar codes. A significant advantage of the Xenon 1900 Color scanner is its ability to read color bar codes, such as a red bar code on a white background. Customers using the Xenon 1900 Color scanner will also eliminate the need for multiple image capture and storage devices, minimizing the risks of compromised data, privacy violations and related costs. The Xenon 1900 Color, also available as the cordless Xenon 1902 Color, utilizes Adaptus Imaging Technology 6.0 and Honeywell’s ColorFusion Technology to enable vastly superior reading performance on hard-to-read bar codes, including those on mobile device screens. Deployment of color scanners will en-
able improved identification processes, as the colored portions of identification cards can now be captured in their original form. Healthcare professionals will also be able to take color images for improved wound management, and visual identification of patients without a wristband. Both the Xenon 1900 and 1902 Color scanners are available with disinfectant-ready housing for healthcare professionals. To ensure that the Xenon family of scanners continues to deliver class-leading performance, upgrades have been made to the existing scanners including extended depth of field, improved data matrix and mobile phone reading, adjustable illumination, Bluetooth HID keyboard interface and optional laser aimers. Key Features: Multiple image scanner Visual identification Superior reading performance Manufacturer: Honeywell Selling Point: Adjustable illumination
Solution
Arrowstream’s Announces ItM
A
rrowStream, a leading provider of supply chain management technology and logistics services for the foodservice industry, announced the availability of ArrowStream Inbound Transportation Management (ITM). ITM takes a next generation approach to managing a supply chain by focusing on up-front planning, proactive margin management, root cause revenue and cost analysis and integrated execution tools. ITM results include: -20-30 percent Logistics Savings Increase -- regardless of size -2-5 percent Inventory Reduction -1-5 percent Dock Traffic Reduction The ArrowStream Inbound Transportation Management solution combines four distinct yet fully integrated components. ITM Profitability Optimizer: This modeling system simultaneously stabilizes ordering patterns, incorporates network changes and optimizes routing to balance
inventory and achieve significant transportation savings for the network. ITM Freight Converter: This seamless workflow and reporting module aligns organizations around true freight revenue growth potential and progress and accelerates activation of new freight under management. ITM Freight Manager: This execution system integrates the preplanned solution guidelines into an efficient freight management module for automatically building shipments and tracking progress. ITM Profitability Manager: This component provides proactive profitability management utilities, which are fully integrated with load execution that alert margin loss before it occurs, enabling immediate root-cause analysis and savings recovery prior to load tender. Manufacturer: ArrowStream
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November 2011 | www.logisticsweek.com 65
< EVENTS
A PUBLICATION OF HAmBUrg mEDIA grOUP
N o v e m b e r 2 0 11 November 4 – 6, 2011 INdIaN machINe Tool aNd auTomaTIoN expo Talkatora Indoor Stadium, New delhi Indian Machine Tool and Automation Expo New Delhi provides an excellent platform to manufacturers or suppliers of machine tools and automation products to display their products. Indian Machine Tool and Automation Expo New Delhi will be a forum for discussion and demonstration of machine tool and automation. Exhibitors expected at the event will be manufacturers, designers, solution and service providers of machine tool and automation belonging to various categories such as CNC machines & tools, boring machines, drilling machines, electro erosion machines, machines for the production of bolts, screws, notching machines, CAD, CAM, CAE, 3D planning /3D Simulation Precision, and MHE. organizer: Paramount Exhibitors Tel: +91 172 2274801/2274803 November 09 – 11, 2011 poly INdIa 2011 hitex, hyderabad Poly India 2011 is a significant event for the polymers and plastics industry in India. The event will provide the much needed impetus to the industry and will help in generating new business opportunities for the participants. It will be the perfect place to be if one wants to gauge the latest trends in the industry and learn from the decision makers. The exhibition at the event will feature latest technologies and products that will be displayed at the state of the art fairground. Over 80 exhibitors and 4000 visitors are expected to attend the event. Tel: +91 11 23738760/23738770 November 10 -12, 2011 power INdIa 2011 bombay exhibition centre, mumbai Power India 2011 will cater to the needs of the energy and power sector in India. Due to the success of the APDRP (Accelerated Power Development & Reforms Program 2002 - 2012), the power sector has seen the production of around 22,000 MW during last five years. In future, even more power is needed to meet the requirements of the country. The major objective of the exhibition is to help the power sector in India to achieve the main goal “power for all” before the year 2012. Power India 2011 will act as a networking platform that will bring all major players associated in the power sector together under one roof. organizer: Winmark Services Private Limited Tel: +91 22 26605550/26607755 66
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November 25, 2011 Sclc aNNouNceS 2Nd edITIoN of food reTaIl aNd Supply chaIN SummIT & awardS mumbai Food retail is one of the fastest growing industries in India. With fast growth come operational and logistical challenges. The perishable nature of these products makes it all the more challenging. The 2nd edition of the India Food Retail And Supply Chain and Agro Logistics Summit to be held in Mumbai on November 25, 2011 is designed to address opportunities and challenges in this industry through an agenda that effectively inter-weaves service users and service providers. India’s first awards of its kind, the food retail and supply chain awards aim at recognizing and celebrating achievements and innovations. The 2nd edition of these awards will be a part of this summit and will be compered by Cyrus broacha in a glittering ceremony laced with cocktails and stand-up comedy entertainment. organizer: KPMg-SCLC december 6-9, 2011 haNNover INdIa 2011 – explorINg New markeTS bangalore International exhibition centre, bangalore Hannover Milano Fairs India (HMFI) continues with its trend of introducing industry specific shows with an exclusive show for Laser Systems and Laser Technology in the Manufacturing sector with “Laser INDIA 2011”. This year HMFI is organizing five concurrent shows: CeMAT INDIA – Materials Handling & Intrologistics MDA INDIA – Motion Drive and automation (hydraulics and pneumatics) IA INDIA – Industrial automation Surface INDIA – Surface technology Laser INDIA – Laser technology CeMAT INDIA, continues its focus on the growing demand for an integrated solution for logistics, material handling, transportation and warehousing and is considered highly significant. For CeMAT INDIA, HMFI has support from the Manufacturers Association of Storage Systems of India (MASS), Materials Handling and Logistics Technology Association, ICEX - Spanish Institute for Foreign Trade, China Federation of Logistics and Purchasing, and, Indo-german Chamber of Commerce. organizer: Hannover Milano Fairs India (HMFI) Tel: +022 – 40050681 / 82
November 2011 | www.logisticsweek.com
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