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Point of View Supply-Chain For Food Security Prof. Viswanadham of IIS, Bangalore, highlights issues plaguing the food supply-chain and suggests remedies.

PAGE 2 `25 logisticsweek.com

Inaugural Issue

August 16–31, 2011 Publisher’s Note

Upward, Onward Dear Readers, Six years ago, we started the LOG.India magazine to serve the logistics, transportation and supply-chain industry. Our aims were simple - to be the voice of the industry, be accepted and read by all but influenced by none. I have to admit that at times it has been tough. The tradepublishing industry gets a bad rap for being a conduit for “paid news”. We have held our ground despite pressures and today LOG. India is the definitive voice for the industry. With LogisticsWeek, we have entered a new chapter of trade journalism. For a year that our website www.logisticsweek.com has been online, we have got over 12,000 online subscribers and over 65,000 regular readers. Today, the site is easily the most read online resource for our industry globally. The launch of this print edition was the next logical step in order to keep pace with our industry. LOG.India will remain the premier monthly magazine. LogisticsWeek, with increased frequency, will cover the latest in industry-specific news and commentary. We owe our growth and success to your unyielding support. We look forward to your feedback and more importantly, your critique, of our new venture.

Hook Point

Govt Mulls SPV For Food Storage, Transport The SPV will aid in the construction of warehouses, while monitoring the movement of vehicles to states. News Desk Mumbai The government plans to create a Special Purpose Vehicle (SPV) to undertake studies of foodgrain storage handling and transportation. Announcing this at the opening of the event, ‘Building Warehousing Competitiveness’ organized by the Confederation of Indian Industry (CII) on July 28 at Chennai, Prof. K.V Thomas, Union Minister of State for consumer affairs, food and public distribution said, “The SPV will serve two purposes - one is the construction of godowns with modern temperature control and the other is for the movement of vehicles from the producing states to consuming states.” Meanwhile, the draft National Food Security bill has met with initial approval and will be introduced in Parliament by December, the minister told the audience. Simultaneously, the government is strategizing to raise production of foodgrains from 55 million tonnes (mt) to 60 mt. This, Thomas said, will translate into allocation of `2,000 crore from the Rural Infrastructure Development Fund to create facilities for enhanced warehouse maintenance. According to R. Dinesh, Event Chairman and

cient Logistics, said GCEL is conducting a rigorous shipment efficiency assessment in many nations across the globe. It is designed to yield an understanding of the strengths and bottlenecks in a particular country’s logistics pipelines.

TAKING THE NEXT LEAP DHL LAUNCHES NEW FACILITY AT FREE TRADE ZONE Now you can align your logistic needs in accordance to global standards, at DHL’s Free Trade Zone facility in Tamil Nadu. It’s the one stop tax-free zone that gets your business connected successfully to the globe. www.dhl.co.in/ftz

Sincerely,

Jacob Joseph Puthenparambil Publisher LOG.India, LogisticsWeek jacob@logisticsweek.com

JMD of TVS & Sons Ltd, the domestic logistics services comprise 20 percent of warehousing and will continue to grow at 35-40 percent annually. At the event, Mark Drabenstott, Secretary General, Global Coalition for Effi-

(L-R) Dilraj Singh Gandhi, Principal Consultant, Pricewaterhouse Coopers; Dr Mark Drabenstott, Secretary-General, GCEL; Prof K.V. Thomas, Union Minister of State for Consumer Affairs, Food and Public Distribution; R. Dinesh, Jt. MD, TVS & Sons; and Mike Nithavrianakis, British Deputy High Commissioner, at the CII organised event, ‘Building Warehousing Competitiveness’,in Chennai on July 28.


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tHougHt leaders

Ascending The Curve

IndIa’s LeadIng LOgIstIcs MagazIne www.logisticsweek.com

INDIA

Dr Reddy’s Laboratories Ltd has fashioned an intricate and complex supply chain which has ramped up its growth. Excerpts from an interview with the SCM chief. Pamela Cheema Mumbai A fine drizzle falls gently on the 140-acre campus of Dr Reddy’s Laboratories Ltd. in Qutubullapur on the edge of Hyderabad. The corporate is one of the foremost pharmaceutical companies in the country with revenues likely to cross $1 billion. According to the latest figures, its consolidated revenues are at `74.7 billion in FY’11, surpassing its revenues of `70.3 billion in FY 2010. In a wide-ranging interview, Dr Ravi Prakash Mathur, Director, Supply Chain Management-Logistics, expatiates at length on the supply chain strategies that have put his company on the fast track. How has the Theory of Constraints enabled you to make huge improvements in your supply chain? We were earlier on a Forecast driven system like most companies and if you just go into the history of supply chain, the concept of MRP and MPS that developed simultaneously with the enhancement of computing technology, enabled a lot of companies to base their supply chain on the forecasting system. What

`100 ` 100 it enabled was to have a switch to this 2,000 distributors. These distribwhich worked backwards into system? utors are serviced by around 32 a production driven plan and a This was an initiative that we CFAs. The CFAs are serviced by raw material and packing matebegan around three years ago. our two main warehouses one of rial procurement plan. So it was The new system involves the which is in Hyderabad and the a linear method of working backfront end distribution system other one is in Ghaziabad. These wards when we used the forecast and operations and procurewarehouses are also known based supply chain system. ment as well. So this is an endas Global Distribution Centres Now the Forecast method to-end solution aligned to meet (GDC) as they service Indian has its own limitations, as opthe needs of the market. and global customers. We are posed to the Replenishment serviced from 8 plants and 54 losystem of supply chain. Markets What are the major results cations, so the information flow are very dynamic, a forecast will achieved through the Recomes backwards from these Dr. Ravi Prakash Mathur ultimately be only a forecast, plenishment mode? distributors to our suppliers and Director, SCM - Logistics, you can’t have 100% accuracy. We have addressed the twin based on this flow of informaDr Reddy’s Laboratories Ltd. You have to keep on measuring challenges of excess inventory tion, the material flows forward accuracies and KPIs of forecasts. in the system as well as shortto our vendors, material wareAlso, its difficult in an operaages in the system. The availhouses, plants, GDCs and CFAs. tions environment to keepDr track ability of our products has also- and retail to the customer. So Ravi Prakash Mathur, Director, SCM this is our value chain. The role of the vagaries of demand.Logistics, Now increased dramatically. Please give an overview of Dr. Reddy’s Laboratories Ltd., amit mukherjee, Vicethe system that we had earlier your company’s sea and air describes how pharma giant manages of production is to constantly president (iTthe and supply chain) change the lead time, follow the was supported by our ERP, so group How cio have you freight logistics. itsand supply-chain likeat norpg, otherintegrated Indian has priorities which have been set by all these transactions werepharma takyour supply chain end-toWe do both sea and air freight locompany. deployed exemplary supplyPage 36 decisive comthe system and then also follow ing place on the ERP platform. end to get your gistics. When we supply our marchain strategies at spencer‘s the process of on-going improveThese transactions still take petitive advantage? kets by air freight we use global retail >> page 34 ment. The supply chain role place on the ERP platform, but Our suppliers are connected to airlines like Lufthansa and Emiris that there should be perfect instead of working on foreour material warehouses. We ates. We have eight international availability so that there is no casts, we look at what has been also have production facilities LSPs and we use the airports at shortage while maintaining low consumed at our supply chain which are both internal and Hyderabad and Bangalore to inventory. We have adequate innodes. And the previous supply external. The production facilitransport our shipments. For sea ventory at a central location, we chain node in turn replenishes ties in turn push the material freight we have an inland conTElEcom low The NEglEcTEd get consumption data daily and the consumption at the front to our plant warehouses. tainer depot in Hyderabad from 20 44 adopTioN 24 waTErways at the same time, we have more end. So in this mannerlogisTics we are plant warehouses are connected where we load our containers THE FOOD CRISIS 54 ADVERSE An inefficient cold-chain killing inland children in India...10 Movement of telecom Why WMS stillREACTION: does India is is ignoring frequent replenishment. able to have inventories which to the regional warehouses and and transport them to Nhava network opens not have enough waterways at its own carbon footprint...18 An ISB Prof.equipment shows how to GREEN LIGHT: How Ericsson India is reducing its supply-chain To give you a better are much more agile and a supfrom there we push our goods Shava near Mumbai. From there a window of opportunity takers in India perilidea of ensure food security. VALUE OVER COST: An edited transcript of ASC Summit offers key learnings...26 how our replenishment system ply chain which is much more to the distributors. The distributhey set sail on mother ships for works, in India, we have around responsive. tors in turn sell them to retail the US and Europe. July 2011 Vol. 4 — No.11 October 2010 | Vol.did 4 – No.2 forecast When you

The RightIn Method Prescription Motion

Thought For Food Prof N Viswanadham of IIS, Bangalore, highlights major issues plaguing the food supplychain in India and suggests remedies to ensure food security. According to the World Food Summit of 1996, food security exists when all people at all times have access to sufficient, safe, nutritious food to maintain a healthy and active life. Commonly, the concept of food security is defined as including both physical and economic access to food that meets people’s dietary needs as well as their food preferences. Food security is built on three things: availability of sufficient quantities of food on a consistent basis; ensuring sufficient resources to obtain appropriate foods for a nutritious diet; and finally, appropriate use based on knowledge of basic

N. Viswanadham INAE Distinguished Professor, IIS, Bangalore nutrition and care, as well as adequate water and sanitation. The Government of India has launched several initiatives

towards ensuring food security to its citizens. They include the public distribution scheme (PDS), the mid-day meal program for school children, the National Rural Employment Scheme, and several others to help people below the poverty line. At the other end of the spectrum, there are millions of hawkers in all major cities termed illegal traders by the municipalities but serving the food needs of millions of urban poor and lower middle class.

A Recipe For Riots Recently we read about food grains rotting in the godowns. There were protests and riots.

Nothing more. The PDS operates under the joint responsibility of the Central and State governments. The Central government, through the Food Corporation of India, has assumed the responsibility for procurement, storage and bulk allocation of grains to the state governments. The operational responsibility including identification of families below the poverty line, and issue of ration cards rests with the state governments. The Mid-Day Meal Scheme was launched by the Ministry of Human Resource Development (Department of Education) for the benefit of students in prima-

ry schools. It involves provision of lunch free of cost to schoolchildren on all working days. The key objectives of the program are: protecting children from class room hunger, increasing school enrolment and attendance, improved socialization among children belonging to all castes, addressing malnutrition, and social empowerment through provision of employment to women. The scheme presently covers students of Class I-VIII in the government primary schools/upper primary schools/schools aided by the government and those CONTINUED ON PAGE 7


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August 16—31, 2011 www.logisticsweek.com BLOGS, JOURNALS, BOOK RELEASES

Solutions For Optimizing The Supply Chain True Truckload Optimization - Opportunity For Supply Chain Products

for the vehicle loaders in the dock in the process of placing the product inside the truck. When products are fragile, the complexity increases further. This is one of the major needs of every organization which has not been fully met by today’s best-of-breed supply chain products or even by SAP APO/Oracle APS. Some of the niche players like TWO (Transportation and Warehouse Optimization) helped many Fortune 100 companies to reduce the transportation cost by 4-8 percent. The load building product (AutoVLB) developed by TWO, rightly termed as “SuperTruck”, has been made so smart that it also considers the weight restrictions on the axles of the truck and distributes the load accordingly inside the truck. With the help of AutoPalletP3 and AutoLoaderT3, AutoVLB can create a loading diagram and a case pick sequence for every shipment - a striking benefit of the solution. http://bit.ly/mZofnI

Infosys SCM Blog (Posted by Umesh Sonawane) Just imagine that you want to relocate with your family to another country for two years for company’s work. It is but obvious that you would want to carry the maximum luggage with you without paying hefty fine for the excessive baggage at the airport. As a part of logical thought process, you would first consider the various constraints imposed by the airlines (weight, volume, number of luggage, etc.) and then start to pack the stuff. Won’t you agree with me that the most important step is placing different items inside the bags - like which items should be at the bottom, which items should be alongside of the bag, which items should be in the hand baggage, et al. How nice it would be, if any software program can provide an end-to-end solution to you? In today’s era of fierce market competition and high fuel cost, companies are also looking for such a solution to facilitate the load building process to a great extent. Every supply chain planning product possesses the basic capability of producing distribution requirement planning (DRP) or deployment planning output by considering the constraints. However at the execution level, there are real challenges

Benefits Of Optimizing The Supply Chain Network And Beyond Martin Buckley Buckley wrote this blog after he read, ‘10 Guidelines for Supply Chain Network Infrastructure Planning’, which discusses a methodology to reduce supply chain costs through optimization of network infra-

structure. The authors discuss 10 things to keep in mind when tackling infrastructure optimization, which account for 75-80 percent of supply chain costs. Buckley focuses on optimizing the supply chain through the use of collaboration, simulation, and scenario comparison utilizing modeling tools. The supply chain network is composed of many components acting in concert to deliver the required goods and services. So how best to optimize such a complex set of data points? One must obtain accurate data about each node in the network, and then utilize software to model it. This requirement would suggest that any simulation model must be able to incorporate multiple disparate data sources in a relatively easy and timely manner. Important data to obtain would be: lead times, inventory levels, transit times, associated costs, quality levels, and service levels. Because these networks can be extremely complex with many factors influencing outcomes, we must have the ability to compare many different scenarios. All these outcomes must be weighed to determine most optimal design. The next step would w Ha it n h d parts of each can then be to determine if the best ca l e r e be combined into one ‘super’ scenario. This can only be determined by developing a complex model with multi-sourcing. 24 30 http://bit.ly/riFpwQ 34 May ww 200 9 w.l og-i n

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August 16–31, 2011 Publisher’s Note Xxxx xxxxum dolor sit amet, consectetur adipiscing elit. Maecenas nisi mi, egestas ac pellentesque a, tincidunt in felis. Nulla sit amet orci mi. Nam bibendum augue et dolor fringilla sit amet viverra est pharetra. Curabitur eu nulla risus, et consequat diam. Sed varius turpis tempor est consectetur pulvinar. Integer rutrum cursus magna sit amet luctus. Fusce elementum feugiat nibh quis facilisis. Vivamus nulla velit, imperdiet sed vulputate et, consequat non libero. Praesent ut justo metus. Curabitur accumsan, neque viverra dictum pharetra, lorem risus aliquet risus, ac interdum libero enim eget dolor. Donec tristique gravida libero ac bibendum. Nunc arcu dui, rhoncus eu pretium egestas, posuere a lectus. Aliquam erat volutpat. Donec consequat, arcu a pharetra bibendum, diam orci pulvinar elit, at ullamcorpsapien risus, vitae lobortis massa. Proin vel fringilla urna. Fusce aliquet porttitor ultrices. Integer rutrum cursus magna sit amet luctus. Fusce eleaesent ut justo metus. Curabitur accumsan, neque viverra dictum pharetra, lorem risus aliquet risus, ac interdum libero enim eget dolor. Donec tristique gravida libero ac bibendum. Integer rutrum cursus magna sit amet luctus. Fusce elementum feugiat nibh quis facilisis. Vivamus nulla velit, imperdiet sed vulputate ac interdum libero enim eget dolor. Donec tristique gravida libero ac bibendum.

Jacob Joseph Puthenparambil jacob@logisticsweek.com

India And China Looking to Be On The Same Road India and China have agreed to work towards signing of a Memorandum of Understanding (MoU) in the areas of Road Transport and Highways, said an Indian government press release issued on September 16. Under the proposed MoU, both sides would seek to enhance cooperation in highway construction, exchange of technology and investments in the sector. According to the release, this was agreed to during the meeting between Kamal Nath, Minister for Road Transport and Highways and Li Shenglin, Minister of Transport, China at Beijing on September 15. Nath was quoted in the note as saying that India has embarked on a massive national highway development program under which it is proposed to construct 7,000 km of national highways every year over the next few years. The ambitious targets set in the program provided huge opportunities to the Chinese construction companies as also the Chinese financial institutions to enhance their engagement with India, said the note. Nath also said that the preferred mode of highway development in India is Public Private Partnership. 60 perceent of the national highways would be developed under the BOT (Built-Operate-Transfer) Toll mode, while another 25 percent would be taken up on BOT (Annuity) basis. Already, several Chinese companies are participating in the National Highway Development Project of India. China has over the past decade made rapid progress in the infrastructure sector, particularly highway development. Li Shenglin said that presently, around 35,000 km of national highways is under construction in China of which 10,000 km is likely to be completed this year. Earlier in the course of the interactions with China’s government representatives, Nath met Lou Jiwei, Chairman, China Investment Corporation (CIC) and Dai Xianglong, Chairman of National Social Security Fund (NSSF) and apprised them

of the opportunities of investing in the highways sector of India and of the high returns that the sector promises to offer. Xianglong mooted the idea of the setting up of an India-China Highways Invest-

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eVents Calendar

To Pune, Chennai, Mumbai And Back

cOMING SOON! August 2011

Indiamart India International Build Expo Chennai

TECHNOTEX INDIA

Prompt Tradefairs (India) Pvt Ltd is organizing Indiamart India International Build Expo for the building and construction industry in India. It will be held from August 19 to 21, 2011 at the Chennai Trade and Convention Center. Exhibitors to the event will come from industries such as acoustic & thermal insulation, construction chemicals, construction equipments, and others concerned with the construction industry.

TECHNOTEX INDIA is jointly organized by Ministry of Textiles, Govt. of India, Department of Chemicals and Petrochemicals and Federation of Indian Chambers of Commerce & Industry (FICCI). The technical textile is predominantly Synthetic Fiber/ Yarn based and has enormous scope of development. The event will take place at Bombay Exhibition Centre (BEC) in Mumbai from August 25 to 27. The event is being backed by Indian Technical Textile Association (ITTA), BTRA, MANTRA, SASMIRA, NITRA and The Southern Gujarat Chambers of Commerce (SGCCI).

E3 EXPO 2011 E3 EXPO 2011 is dedicated to the cause of event management and specially deals with trade fairs and other mega exhibitions. The event has been organized by Exhicon Events Media Solutions Private Limited and will be held from August 19-21, 2011 at Bombay Exhibition Center.

The Manufacturing IT Summit The Manufacturing IT Summit will serve as the meeting ground from information technology departments of aerospace & defense, automotive, chemicals, industrial equipment, mobility, high-tech & consumer electronics, pharmaceutical & life science, and process manufacturing. Exito Group is organizing this event which will take place at World Trade Centre in Mumbai. The event will be organized from August 25 and 26, respectively.

EMMA Expo India EMMA Expo India organized by Taiwan External Trade Development Council (TAITRA) and is dedicated to electronics, machinery, molds and auto parts. It is a three day exposition that will take place at Chennai Trade & Convention Centre in Chennai, from 2527 August, 2011.

Pack Tech Asia The Packtech Asia 2011 International Exhibition will showcase a spectrum of products, equipment and services in food processing, pharmaceuticals, Ayurveda & herbal products, agro products and many more. It will be held at Milan Mela Ground & being organized by Kesari Media & Events Pvt. Ltd from August 27 to 29, 2011.

Pune Machine Tools Show KMG Business Technology is organizing Pune Machine Tools Show 2011 - an exclusive showcase of engineering, machine tools, automation & automotive technology. It will be held at Auto Cluster Exhibition Center (Pune) from August 25 to 28, 2011.

International Industrial Expo-Faridabad Paramount Exhibitors is holding an annual exhibition International Industrial Expo-Faridabad. The exhibition will focus on industrial products, technology and related services. The scope of the event covers: machine tools, material handling, transmission, chemicals, hydraulics and pneumatics, electrical & electronics, automobiles, plastic and packaging, textile, pumps & valves. The event will be held from August 19-21, 2011, at Silver Jubilee Hall Magpie at Faridabad.

TECHNOLOGY

FRC Launches 5.8GHz WiMAX Suite Of Products FRC Internet Products, a pioneer in advanced wireless technology products and solutions, has launched 5GHz suite of WiMAX products. This product suite caters to both the licensed and unlicensed frequency spectrums allowing wireless Internet service providers (WISPs) to deploy wireless high-speed broadband access networks. The 5GHz suite (4.9-5.8GHz) of WiMAX products includes base stations, subscriber stations,

Authentication Authorization and Accounting (A A A) server and Network Management System (NMS). FRC’s base stations are among the smallest units in the world enabling easy handling and installation. FRC’s unique all-outdoor base station units allow an operator to install them directly on towers, rooftops, traffic poles, walls, etc. without the requirement of AC housing.

APC’s Next-Gen Rack PDU Lineup APC by Schneider Electric has announced the newest Next Generation Switched Rack PDU with Metering-by-Outlet technology. These units have the ability to provide device level power monitoring and energy use logging, enabling IT managers to pinpoint their power usage for each component connected. The Next Generation Switched Rack PDU with Metering-by-Outlet technology offers IT managers the ability to:  Meter the power distributed to equipment by individual outlet.

 Efficiently adjust the attached load as needed and plan for the future. - Remotely manage individual outlets. IT managers will continue to benefit from the features they have come to rely upon from the AP8000 series Rack PDU platform, including:

Active Power Metering Interactive LCD Display  Environmental Monitoring  Locking IEC Connectors  

The WiMAX network solution is managed with a scalable, robust and easy-to-configure AAA server and NMS. The implementation is based on the SNMP v2 protocol. They come as ideal solutions to deploy and manage the WiMAX network elements, whether an operator is deploying a new network, or developing an existing network. The product line is based on WiMAX standards IEEE 802.16-2005 for mobile networks.


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August 16—31, 2011 www.logisticsweek.com

PublisHer’s desk

FDI In Retail Vital To Stop Wastage The proposed FDI in retail is viewed as an MNC sledgehammer that could destroy the local retailers. Far from it, the move is going to improve logistics, empower the consumer and boost employment in the country, the author argues. Jacob Joseph Puthenparambil Singapore For years, the debate on Foreign Direct Investment (FDI) in the retail sector has raged on, involving everything from economics, national pride and nostalgia about your friendly neighborhood kirana store. According to estimates quoted

through majority owned joint ventures argue that this will lead to mass unemployment and ruin the fragile ecology of the Indian rural retail dynamics. The organized sector has a share of only 4 percent in the country’s $590 billion retail industry. To put this in political context, it is the standard ant-

those of us raised in a village, has and might live with this scenario. Politically, what kind of politicians would want to be siding with Walmart? The big elephant in the room is wastage. Sadly hardly anyone talks about it. Pamela Cheema quotes Pradeep Chechani, Vice President – Supply Chain, Wadawan Retail, in her article in

The entry of foreign investment in retail will have at least one main benefit: It will avoid the huge wastages caused in the supply-chain. in the media, up to 11 percent of employment in the country is employed by domestic retail. That’s the second largest sector after agriculture in our country. Speaking in Parliament, minister for commerce and industry Anand Sharma said almost 35 million people were employed in the retail sector in the agricultural and nonagricultural sector. Only four percent of retail in the country was organized, the rest was unorganized. Those resisting the entry of foreign companies such as Walmart, Tesco and Carrefour

globalization, pro-nationalism argument. Evil Multinational Corporation is going to kick our poor local traders out of business. It’s a powerful argument, politically at least. People will forget about the lack of freshness of the vegetables they buy, the presence of coloured mineral ore in their rice, wheat and pulses, the lack of stable availability of milk, some assurance that the meat or fish they just bought is good for human consumption and pledge their gold savings to buy onions. After all national pride and aam admi comes first. Most of us, particularly

the August issue of LOG.India magazine about how the logistics sector in India is welcoming the entry of foreign players. He states he favors foreign investment in retail, “because of the huge wastage in food and groceries”. India is the world’s largest producer of fruits and vegetables and we waste about 25 percent of it worth `50,000 crores.” That’s 25 percent of everything we produce. So if a farmer produces 100 bananas, 25 percent is wasted on the way. Add five layers of middle men and tally up the costs. For that single fruit, you are paying for

Have you ever wondered how McDonalds in India never runs out of chicken? If you look at the logistics of how the firm ensures all its suppliers have to meet its quality standards in storage and transportation – you will be impressed. inefficient transportation and warehousing and padding up for costs at each level of trade to make up for wastage. The only losers in this system are you and the farmer. He has to sell because he can’t store and you have to buy because there is no other choice. Foreign investment in retail will provide much needed investments in our cool chain and storage infrastructure. Have you ever wondered how McDonalds in India never runs out of chicken? If you have a look at the logistics of how the firm ensures all its suppliers, from the farmer up, have to meet its quality standards in storage and transportation – you will be impressed. What about employment? Will FDI in retail lead to loss of jobs? Speaking to the Business Standard (August 7, 2011), retail consultancy firm Technopak Advisors’ managing director, Arvind Singhal, states there would be a requirement of an estimated 25 to 30 million additional people by 2020. Elixir Consulting, a recruitment process outsourcing firm, put the additional manpower requirement in the next 10 years at a modest 12-15 million. Nitin Sethi, practice leader (consultancy), Aon-Hewitt, said, “In 12-24 months, the manpower requirement would be up by 27 percent to 50 percent.” There needs to support on the policy front as well. Especially in the much awaited Goods and Services Tax (GST) –

this will encourage the growth and development of large temperature controlled warehouses, particularly in central India, where there is a lack of infrastructure. The government is trying to formulate policy in such a way a middle ground of sorts is established. One plan will limit multinationals to towns with more than a million residents. There are about 50 such cities and towns in India now. The second option is to adopt the Chinese model. Start with six metros and then expand in a phased manner. I have a feeling this is how the government is going to let it play out. Announce an opening up and try to limit the foreign players to the main metros. As a first step, on July 22, a panel of secretaries led by cabinet secretary AK Seth, cleared the proposal FDI in multi-brand retail stores. Now it goes to the union cabinet and then rules will be notified. Only then will we know how the government is going to play this out. Some riders have been set, including minimum investment of USD 100 million with 51 per cent investment in backend supply chain. The other criterion is the 30 percent sourcing plan from domestic small and medium units. Whatever the rules set, I hope the focus is on cutting wastage. There is no point in boosting agricultural production if we can’t ensure the infrastructure to transport it in good condition to market.


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August 16—31, 2011 www.logisticsweek.com

PoliCy uPdates

EPC Is Back. Retail FDI, Ports Act On In this section, LW provides a recap of policy decisions of the last fortnight that impact various areas of the supply-chain industry. ROADS The way road construction contracts are handed out may soon undergo a change. The roads ministry is reviving the Engineering Procurement Construction (EPC) mode of road bidding, where projects will be awarded outright and official role will be reduced to deciding specifications and quality. An announcement to this effect is expected in the next few months. The EPC method will also be cheaper than annuity backed projects. In the earlier method, the government paid the contractor on the basis of measurement of work, but the system was prone to cost escalation, and bereft of economy incentives. Moreover, it also lacked quality. The government will only provide a feasibility report. Private companies will provide design based on the feasibility report and the government will select bidders on the basis of the design and costs quoted.

1

2

To check corruption at Regional Transport Of-

fices (RTOs), the Union Road Transport and Highways Ministry has launched the National Register– a centralized online database of all registered vehicles and driving licences in the country along with the National Transport Portal. The scheme comprises two citizen centric services “Sarathi”- a one-stop solution to Licensing and “Vahan”- an ICT based solution for vehicle registration. The portal, linked to all 975 RTOs across the country, aims at digitizing the entire records of vehicle count and driving licences by the end of the year.

RETAIL The Committee of Secretaries (CoS) has forwarded a recommendation to the Commerce and Industry Ministry on the issue of opening multi-brand retail to foreign investment. Some of the recommendations in the report are:  Allow 51 percent FDI in the sector.  At least 50 percent of the

investment and jobs should go to rural areas. Besides, the entities with FDI should source at least 30 percent of their requirements from the MSME sector.  Foreign player must commit an investment of at least $100 million.  Allow mega stores to sell nonbranded items and such entities should be allowed only in towns with population of over 10 lakh. The original draft for FDI policy on retail had proposed that the foreign front-end retailers will have to source a minimum mandatory of 30 percent of the total merchandize from the local region.

MANUFACTURING The Ministry of Commerce and Industry’s draft National Manufacturing Policy (NMP) has been well-received by top Indian government ministers, thus taking it a step further to final approval. The NMP recommendations are designed to simplify

the regulatory environment for foreign and domestic manufacturing companies and create new market incentives to attract foreign investment to India’s manufacturing sector. The draft aims to reduce restrictive regulatory burdens on foreign and domestic manufacturers thus making it an attractive business environment for investors. The new policy recommends establishing new National Manufacturing Industrial Zones (NMIZs) where manufacturing companies would have scaled down regulatory requirements, preferential market access, priority land allotments, and better industrial infrastructure. Companies producing heavy machine tools, heavy electrical gear, transportation equipment and infrastructure, and earth-moving and mining equipment are expected to be some of the priority targets for regulatory concessions and special market incentives under the NMP.

PORTS The draft of the proposed Ports Act prepared by the Ministry of Shipping (MoS) might soon be on its way to seek the nod of the Cabinet. The Ministry has drawn up the draft of the Act by fusing two pre-existing governing acts – the Indian Ports Act, 1908 and the Major Ports Act, 1963, to convert it into one single consortium of governing authority. A Cabinet approval would mean that the pre-existing Indian Ports Act 1908 and Major Ports Act of 1963 would stand nullified. The MoS feels that the need for a comprehensive act is the need of the hour, as minor ports are mostly eclipsed by major ports, like when it comes to fixing the tariff of ports. The MoS also wants to revise the Tariff Authority for Major Ports (TAMP), as it would provide an independent authority which would be able to regulate all vessels and cargo related tariffs, rates of leased properties (for major port trusts) and private operators functioning from major ports.

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August 16—31, 2011 www.logisticsweek.com CONTINUED fROm PAGE 2 run by local bodies. The Department of Food & Public Distribution makes allocation of annual requirement of food grains to the Department of School Education & Literacy, Ministry of Human Resource Development. About 120 million children are so far covered under the Mid-day Meal Scheme — the largest school lunch program in the world. The State of Karnataka introduced the provision of cooked meals in 2002. It has successfully involved private sector participation. One venture is Akshaya Patra, which started with leadership from ISKCON in Bangalore. The Foundation gets a corpus from the state government but meets major share of its costs with donations from private corporations. The program is managed with an ultramodern centralized kitchen that is run through a public/ private partnership. Food is delivered to schools in sealed and heat retaining containers just before the lunch break. The program contains one of the best menus in school meal programs in India with sambar, rice, vegetables and

some curd on most days. Opportunities to manipulate the system exist with widespread collusion across the supply chain. The Planning Commission had the following to say on the PDS system in its 2005 report, “For every `4 spent on the PDS, only `1 reaches the poor.”

Cartel Of Bureaucrats The Supreme Court-appointed Vigilance Committee has slammed the PDS for “corruption, black market and diversion involving a cartel of bureaucrats, fair-price shop owners and middlemen”. The lower-income groups spend a high proportion of their income in purchasing from hawkers because their goods are affordable. Had there been no hawkers the plight of the urban poor would be worse than what it is. But hawking is not a licensed activity in most cities. Over the past few decades there has been a substantial increase in the number of hawkers in the major Indian cities. Recognition of hawking as a profession would also benefit the municipalities. They would be able to officially enforce levies on hawkers.

The Supply Chain What is missing is an integrated, co-evolutionary innovation strategy that would lead to high service quality food solutions to millions of people by combining innovations in several of the ecosystem elements and also their convergences. The business processes can be identified, streamlined, standardized and automated or semi-automated using IT and sensor networks. Modernization of PDS, midday meal program, training programs under NREGAS, hawkers, and small food outlets using communication technologies would lead to a blockbuster industry serving the poor and creating millions of jobs. NREGAS can be used for training chefs, PDS employees, school employees, etc. Standardized and automated kitchens and IT enabled and GPS equipped push carts can be developed. The push carts can be built following standardized design and equipped with solar or gas run refrigerators and ovens. The entire process can be monitored, executed and controlled using a call center.

The missing link here is sophisticated kitchens with chefs and cooks equipped with automated cookers, and ovens distributed all over the city. The location and capacity of the kitchens can be determined using optimization techniques from the demand estimates. Now the supply chain consisting of the PDS and kitchens and the schools participating in the midday meal program needs trained manpower. The vocational training centers can be funded through the NREGAS to train cooks, servers and millions of other jobs required for the supply chain operate well, given the perishable nature of the supply chain.

Good Governance Depending on the demand one can find the optimum number and locations of the kitchens to serve the community. The processes can be streamlined using sensor networks, smart cards, cloud computing, and mobile vans equipped with heaters and refrigerators. One can use modern kitchens such as the Akshaya Patra with the help of NGOs and corporate. This will get

rid of corrupt practices. The governance model for this supply-chain can be worked out with NGOs, corporate, and government. Making this work is a challenge but the reward would be tremendous. The new system can be designed using technologies such as smart cards, wireless, push carts equipped with refrigerators and ovens, and hygiene indicators.

Logistics & IT Given the perishable and hygienic nature of the supply-chain, the products are made in the day and end by night. This requires careful demand forecasting, routing and rerouting of the supplies and monitoring the anti-social activities. Several product and process innovations are needed and there are opportunities for several small and big private entrepreneurs. This is a unique opportunity for people from all walks of life to come together to make this program successful. The author can be reached at n.viswanadham@gmail.com. This is an abridged version of the actual article. You can read the full article in the August 2011 issue of LOG.India.


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August 16—31, 2011 www.logisticsweek.com

Ports uPdates

Lowdown On Major Ports In this section, LW will offer updates on container movements at major Indian ports. Port of Cochin

Port of Tuticorin

Cochin is the fastest growing logistics center emerging into a major international transshipment terminal. Cochin is promoting a major liquid terminal, bulk terminal and maritime industries in its port-based SEZs . The entrance to the harbor is by a 10,000m long and 200m wide and 13.5m deep outer approach channel marked with five sets of buoys.Cochin Port has a fully fledged Container Freight Station with mechanized stuffing and destuffing service. It has 10,000sq.m of covered space and 20,000 sq.m of open space.

Port of Tuticorin is located close to the East-West International sea-route. Open space for stacking bulk cargo and containers is available inside the security wall to the extent of 5,53,000 sq. m. The areas can accommodate around 30,000 tonnes of bulk cargo either for import or export and 2500 containers. In addition to containers, the open area inside the wharf is used for temporary stacking of bulk cargo such as coal and sulphur. Tuticorin Port has vast open land of about 2,158 acres outside the main gate. Cargo godowns with a capacity of stacking 36,000 tonnes have been put up in this area by the Tamil Nadu Warehousing Corporation.

PORT OF COCHIN Total container/cargo handled (T)

468582

Avg per day (T)

46858

PORT OF TUTICORIN

Port of Chennai Chennai Port, the third oldest port among the 12 major ports, is an emerging hub port. It has completed 128 years of glorious service to the nation’s maritime trade. The terminal handling charges at Chennai Port’s Container Terminal are quite competitive even when compared to the terminal handling charges collected at the Regional Ports viz. Colombo and Singapore. The Chennai Port offers Priority berthing facilities for Export Oriented vessels. In addition, a scheme called “Priority Berth Reservation Scheme” approved by Government for berthing vessels on arrival on payment of berth reservation fee is being made popular among the trade.

Total container/cargo handled (T)

745002

Avg per day (T)

74500

Port of Paradip Paradip Port is one of the major ports of India serving the Eastern and Central parts of the country. The port mainly deals with bulk cargo apart from other clean cargoes. The port operations are carried out round the clock 365 days and have a limit 13mt of draft at all the berths maintained round the year. There are 14 berths in the inner harbour waiting for vessels up to 70,000 DWT. Other features include a turning circle of 520m diameter and entrance channel of 500m long and 160m wide, and approach channel of 2020m long and 190mtrs wide.

PORT OF PARADIP

PORT OF CHENNAI Total container/cargo handled (TEU)

44483

Avg per day (TEU)

4448

Total cargo handled (T)

1208873

Avg per day (T)

120887

Port of Mumbai

Port of Kolkata

The Port of Mumbai is administered by a statutory autonomous corporation known as the Mumbai Port Trust. There are 63 anchorage points. Besides the wet docks, there are, along the harbor front, a number of ‘Bunders’ which are open wharves and basins where the traffic carried by the sailing vessels is handled. These bunders have extensive facilities for loading, unloading and storing the cargo and have an aggregate quayage of 12,500 meters.

Kolkata Dock System is situated on the left bank of the river Hooghly in position. It has two approaches from the sea, one through Eastern Channel and the other through the Western Channel. Currently Eastern Channel is being used for navigation. The pilotage distance to Kolkata is 221 km, the pilotage distance to Haldia is 121 km. Present dimension of vessels accepted at Haldia Dock are restricted to LOA 240 m Beam - 32.26 m. For oil jetties the largest vessels that are accepted at present are LOA 250 m, Beam - 44 m.

PORT OF MUMBAI Total

Per day

T

TEU

T

TEU

Cargo Discharged

176305

680

17630

68

Cargo Loaded

63974

6

6397

0.6

PORT OF KOLKATA Total container/cargo handled (T)

836106

Avg per day (T)

83610

Port of JNPT

Port of Ennore

The port provides round the clock pilotage to all ocean going vessels calling at the port. Since February 1998, JNPT has launched night sailing of long Panamax Container Vessels up to 270 M LOA and 12 M draft on a regular basis which are largest vessels to transact the Mumbai Harbor at night.

Ennore is the 12the major port in India and the first Corporatised Major Port in India. The port has different terminals: iron ore, coal, marine liquid and general cargo berth. It has a total estimated capacity of 23.5 mtpa and an ongoing construction of container terminal phase I would augment its capacity by 18 mtpa or 1.5 million TEU.

PORT OF JNP Total TEU

Avg per day (TEU)

PORT OF ENNORE

Import

60524

6052

Total cargo handled (T)

612285

Export

46800

4680

Avg per day (T)

122457

(All data gathered between 01-08-2011 and 12-08-2011, excluding Aug. 6&7)

(Data from 01-08-2011 to 05-08-2011)


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August 16—31, 2011 www.logisticsweek.com

lsP eye

ColdStar Logistics Is Here To Stay The cold chain industry is seeing some action after the Budget announcement in February. ColdStar Logistics is buoyant and is making plans. Tuscan Ventures promoted ColdStar Logistics Pvt. Ltd. is finally coming into its own. Over the next 3-4 years, the company is investing in building a state-of-the-art integrated cold chain infrastructure. Besides setting up cold storages, the company is also building an entire fleet to cater to the industry. SA Farooqi, COO, ColdStar Logistics, said, “We are working at setting up cold storages across strategic locations to cater to changing consumption patterns. Our network of offices, systems and processes will support our transporta-

sourced cold storage market in India is expected to grow to `900 crore, while reefer transportation is expected to grow to `1,600 crore. ColdStar Logistics aims to corner 5 percent to 10 percent of the market share in both these segments.

Part of Coldstar Logistics’ facilities will be designed specifically for the pharmaceutical sector. India’s pharmaceutical industry is the third largest in the world in terms of volume. Many products require right temperature control from point of manufacture right un-

til point of consumption, making cold chain imperative. Besides this, ColdStar aims to target all major sectors that require cold chain infrastructure such as fruits and vegetables, dairy, retail, quick service restaurants, seafood, and meat products.

India has seen an influx of a large number of international and domestic restaurant chains over the last few years. Mr. Farooqi said, “The infrastructure we are building in ColdStar will provide the backbone for growth to some of these industry segments.”

Shaukat Ali Farooqi COO, ColdStar Logistics tion business.” The company has opted to build its own fleet to ensure that it offers quality solutions to its customers. “If we rely on existing players, we would not be able to control and deliver the change that we intend to become,” adds Farooqi. Currently, ColdStar Logistics manages a fleet of 45+ vehicles on the road and plans to have 85-plus trucks by the end of the financial year. The company has also earmarked nine locations to set up cold storages across the country. Shagun Kapur Gogia, Director, ColdStar Logistics says, “We have been vying to become players in the cold chain market last two years. The impetus to cold chain infrastructure in Budget 201112 has set us on the right path. There is an opportunity for the private sector to revolutionize the retail industry and the supply chain efficiency in India.” According to industry reports, by 2014 the out-

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surFaCe transPort uPdates

THE LW CROSSWORD

On The Road

1

A lowdown on developments in surface transport last fortnight.

TRANSPORT STRIKE

ELECTRONIC DEVICE

 The South Zone Motor Transport Welfare Association announced that its members would strike work from August 18 midnight seeking fulfillment of their demands. Around 16 lakh lorries from Southern states and another eight lakh from Maharashtra and Mumbai Port Trust would participate. They called for a CBI inquiry against former union minister for shipping and surface transport T R Baalu in connection with highways tollgate allocation.

 The Ministry of Railways is providing Electronic Devices for Ticket Checking Staff in trains. Electronic devices in the form of handheld terminals have been provided to the Ticket Checking staff in 11 trains as a pilot project.

NO TOLL TAX  Toll tax on the Indore-Dewas bypass will not be charged from commuters from August 1 as was announced earlier. However, the respite is short. The National Highways Authority of India, the implementing authority, has decided to talk to the Union Surface Transport Ministry before introducing the toll tax.

MORTH ON FACEBOOK  Ministry of Road Transport and Highways is on Facebook. The Facebook page of MORTH was launched by the Union Minister for Road Transport & Highways, Dr. C.P. Joshi on August 5, 2011.

ing April-July 2011. The freight carried shows an increase of 20.81 million tonnes over the freight traffic of 292.51 million tonnes actually carried during the corresponding period last year, registering an increase of 7.11 percent.

DELHI-MEERUT EXPRESSWAY  Delhi–Meerut expressway is targeted to be completed by December 2015. The proposed alignment of Delhi-Meerut Expressway starts from Nizamuddin Bridge and will continue along NH-24 upto Dasna and will end at Meerut. This project also includes 6-laning of Dasna–Hapur section of NH-24 and 6-laning of Delhi to Meerut section.

 Surveys for TanakpurBageshwar and RishikeshKaranprayag new lines have been completed. RishikeshKaranprayag new line project has been included in Railway Budget 2010-11 at an anticipated cost of `4,295 crore. Tanakpur-Bageshwar new line survey report is presently under examination of the Ministry.

RAILWAY EARNINGS

RAILWAY SAFETY MEASURES

 The total approximate earnings of Indian Railways on originating basis during 1st April – 31st July 2011 were `33,134.31 crore compared to `29,618.70 crore during the same period last year, registering an increase of 11.87 percent.

 Anti Collision Device (ACD), developed by Konkan Railway Corporation Limited (KRCL), has been provided as pilot project on North East Frontier Railway (1736 Route km). Sanction was also given for implementation in Southern region in the Southern, South Central and South Western Railways on selected 1600 route km. `28 crore have been allocated for ACD works during the current financial year.

RAILWAY FREIGHT REVENUE  Indian Railways has carried 313.32 million tonnes of revenue earning freight traffic dur-

TRUCK FREIGHT RATES* Following are the truck freight rates (in `per tonne) from metros to metros

DESTINATIONS New Delhi

New Delhi

--

Kolkata

Mumbai

Chennai

Bangalore

3,065

3,000

4,600

4,500

Kolkata

2,350

--

2,200

3,600

3,600

Mumbai

3,050

3,000

--

3,000

2,400

Chennai

3,850

3,300

2,400

--

Bangalore

3,680

3,300

2,360

*Rates are indicative **Data collected during Aug 1-10, 2011. Group Publisher: Jacob Joseph Puthenparambil jacob@logisticsweek.com Publisher: Frewin Francis Vazhappilly frewin@logisticsweek.com Publishing Director: Jayaram Nair jayaram@logisticsweek.com Editor-Special Projects: Pamela Cheema pamela@logisticsweek.com Editor: Aanand Pandey aanand@logisticsweek.com

Executive Editor: Jayashree Mendes jayashree@logisticsweek.com Editorial Executives: Anuja Abraham, Pritha Dey Chief Designer: Shivasankaran Pillai AD-SALES: Ashok Chand Thakur ashok@logisticsweek.com Dinesh Mishra dinesh@logisticsweek.com Snehal Phatnaik snehal@logisticsweek.com

3

5

9

13

10

11

6

12

14

15 16

17

18

19

20

21

22 23

NEW RAILWAY LINES

ORIGIN

2

4

800 800

--

Source: Logisticsweek Research Marketing Support: Sangeeta D, Suhasini S Printed and published by Frewin Francis Vazhappilly, on behalf of Industrial Sourcing Media Private Limited. Printed at Print House India P.Ltd., Rabale, Navi Mumbai - 400 705, India and published at Bldg.4/6, Sona Udyog, Parshi Panchayat Rd., Andheri (E), Mumbai - 400069. No part of this publication may be reproduced or transmitted in any form or by any means

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Across 2. Being answerable for 4. Process of vehicle returning from the destination point to the point of origin 7. Advantage gained sharing a location with other companies 8. Detailed list of items in stock 9. Term to describe the monetary requirements of initial investment in equipment 11. Resources or money available for investing in assets that produce output 14. Ability to manufacture and market products merging the competencies of cost, quality, dependability and flexibility 15. An enterprise authorized to transact business 16. Goods transported, generally for commercial gain 17. Degree of conformity to a standard 21. An enclosed area for storing valuable items 22. National railroad passenger cooperation of the USA 23. Flow of goods from origin to destination 24. A mathematical process for computation 25. Communication by supplier to recognize acceptance of order 26. A feature added to the goods offered to the customer for customizing the end product 27. Apportioning according to a plan 28. Discontinue service over a route Down 1. The property of being genuine or valid 2. Inspection of a process to ensure compliance to requirement 3. Group of parts put together that constitute the major subdivision for the final product 5. Ability to provide service between an origin and a destination 6. Method of inventory book keeping 10. Label used to provide additional classification 12. Certification by a recognized body 13. A federal law that requires coastal traffic to be carried in U.S. built and registered ships 17. An accessory that has to be attached to the product 18. Product shipped in an aircraft, railroad, ship, or truck 19. Cancellation or expiration of an outsourcing contract 20. Retaining a quantity to ship against an order, usually caused due to shortage

Answers in the next issue. Win an annual subscription by mailing a clear picture of the completed crossword to aanand@logisticsweek.com. Only correct entries will win. including photocopying or scanning without the prior permission of the publishers. Such written permission must also be obtained from the publisher before any part of the publication is stored in a retrieval system of any nature. No liabilities can be accepted for inaccuracies of any description, although the publishers would be pleased to receive amendments for possible inclusion in future editions. Opinions reflected in the publication are those of the writers. The publisher assumes no responsibilities for

return of unsolicited material or material lost or damaged in transit. All correspondence should be addressed to Industrial Sourcing Media Private Limited.. All disputes are subject to the exclusive jurisdiction of competent courts and forums in Mumbai only.

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Satvik LogiSticS Pvt. Ltd.

Providing innovative and value added solutions in logistics management WAREHOUSE SPECIFICATIONS

l International Standard PEB – KIRBY TYPE Structure l Floor Specs: High Load bearing capacity Of 4 MT /

SQM with RCC reinforcement l Floor Height: 1.2 Meters from Finished Floor Level l Column to Column Spacing: 11.2 Meter l Height: Clear Height 12 M, Ridge Level 16.82 M, Eaves

Level – 12.89 M l Recess Dock Area: 15 M Staging Area With Hydraulic

Dock Leveler l Ventilation: Sufficient Roof Top Gravity Turbine l Natural Light: 10% Of Floor Area Is Polycarbonate Sheet.

UTILITIES

l G + 7 High – Ideal for Heavy Duty Palletized Racking l Reach Truck To Handle 12-Meter High Pallet Stacking l MHE – Forklifts, Hand Pallet Truck, Battery Operated Pal-

let Truck l 24 Hour Power Back Up with 250 KVA DG Set l Fire Protection - Complete Building Is Secured With Fire

Fighting Systems l Lighting Systems: 3-Way Distribution To Save Power

Consumption l Weigh Bridge: 100 Metric Ton Load Capacity l Overhead Tank With RO Plant For Drinking Water

PROJECT FEATURES l 20 Acres of Land Bank l Area Ready For Possession – 59,000 Sq Ft (

September 2011) l Scalable up to 5 Lac square feet. l Bitumin Roads – 10 Meter Wide Internal Roads For Bi-Flow Vehicular Movement l 7 meter wide CONCRETE External Approach road l Ample Streetlights l Landscaping & Green Plantation

5 Layer Security Company owned personnel Outsourced security personnel High boundary wall topped with barbed wire fencing l 24 house CCTV security surveillance l Access controls for restricting in and out movements from the warehouse. l Ample Support Infrastructure like Drivers Restrooms, Canteen, Truck Parking Bay, Etc l l l l

SATVIK LOGISTICS PVT LTD. Site Address: Khasra Number 2763, Aamka Road, Dhoom Manikpur Village, Gautam Budh Nagar, Dadri, Uttar Pradesh 203208 For more details contact: Mr. Vaibhav Rathi, HP: +91 9818384703, E-mail: vaibhav@rathiindustries.com For Location details please refer to www.satviklogistics.com

From the stables of LOG.INDIA, the country’s most respected logistics and supply-chain magazine, comes the LogisticsWeek Director 2012, a much-awaited reckoner that will list India’s 3PLs, 4PLs, transporters, solutions and service providers in the material handling and warehousing space, freight forwarders, shippers, cold chain service providers and all the stakeholders of the industry. Do not miss the chance to reach out to the decision-makers of the industry. Avail of huge early-bird discounts, NOW


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