Vol. 4 - No.2
I N D I A ’ S N O .1 L O G I S T I C S M A G A Z I N E
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
TELECOM LOGISTICS 20
LOW ADOPTION 24
NEGLECTED WATERWAYS 44
Movement of telecom network equipment opens a window of opportunity
Why WMS still does not have enough takers in India
India is ignoring inland waterways at its own peril
Logistics we define
Warehouses & Industrial Buidings available as per your requirements.
Goods Safety is our Priority.
Warehouses available at Chakan, Pune (Outside Octroi Limit). 50,000 sqft Ready Warehouses & 2,00,000 sqft Under Construction. Prime Features of our Warehouses and Industrial Buildings : l
World-Class PEFB Building.
Industrial Tremix concrete flooring.
Dock-Levelers and advanced handling equipment.
Electricity facility along with generator backup & broadband internet connectivity.
Sufficient Parking Space for easy vehicle maneuverability.
Open space & concrete roads inside the complex with Tremix concrete.
Scope for future expansion .
Domestic Containerized Transportation now 20% cheaper We provide safe, reliable & cost effective containerized transportation services with wide range of containers starting from 17 FT. to 52 FT. in length, to meet your needs. Containers of international standards minimizing possibilities of water seepage, pilferage, rope-marks, internal damage, dust & dirt, material loss or heavy damage in transit accidents, space wastage, etc. We provide containerized transportation services all over India & offer rates 20% less than that of the market; from Delhi, Indore, Ahmedabad, Kolkata, Nagpur, Bangalore, Goa & Hyderabad to Pune. Visit us at: www.vijaylogistics.com Registered Office: Vijay Logistics Pvt. Ltd., Prasun Tara, Plot no-66,Vastu Udyog, Pimpri, Pune â€“ 411018 (India).
Phone: +91 2135 675000-099 Mobile: +91 99608 67766, +91 93710 46363, +91 98239 79721. E-mail: firstname.lastname@example.org, email@example.com
The Seven-Year Ditch
eptember, Circa 2003. In a bid for spiritual solace, a friend and I decided to join the teeming millions gathered on the banks of the river Godavari in Nashik, and partake in the Kumbh mela. I distinctly remember that the BJP was in power at the time. For obvious reasons, I expected that the ruling party would on that occasion present a ‘shining’ example of how religious fairs are managed. As we began our walk to the site of our divine atonement, taking in with every step the air charged with spiritual energy, I sighted a group of foreigners scampering out of an enclosed, cavernous structure, as if they had seen a ghost. The curious beast that I am, I decided to check the place. The moment I stood at the entrance of the structure, I was hit by reeking stench and I discovered what had taken the mickey out of the foreigners. It was, to my horror, a makeshift lavatory set up by the fair administration —and it was filthy beyond imagination. What happened after that is not important, as with mixed feelings of repulsion, anger and shame, I trudged from one administrative booth to another, trying to lodge a complaint, but in vain. Aanand Pandey September. Circa 2010. Photos exposing the filthy state of the accommodation at the Commonwealth Editor Games (CWG) Village widely covered in the media came as a nauseous reminder of the unpleasant incident seven years ago. Only this time, the images are all over the media and have gone to reinforce the impression in the world that our management standards are not better than that of a bunch of bums. Then the their-hygienediffers-from-ours statement from OC general secretary, Lalit Bhanot, came like a slap in the face. To add insult to injury, horror stories of mismanagement keep appearing by the hour—the foot overbridge collapse, star athletes opting out citing concerns of their well-wishers, the English players deciding to stay in hotels instead of the ‘unlivable’ games village, the home minister giving an ultimatum to the OC, and umpteen others. And by the time you read this, god forbid, many more such instances would’ve come to the fore. People blinded by impotent rage often resort to self-flagellation. Hence, instead of pointing fingers at the two usual suspects — babus and netas — I am going to look askance at the role of two of our own people — India Inc. and the media. I believe timely words of caution from our business leaders could’ve made a big difference to CWG preparations. In recent times, India Inc. has come to wield a strong influence on urgent matters of policy and governance. Consider 26/11. Can you remember a terrorist attack in India that had the government sack both the union home minister as well as the chief minister of the home state? It’s evident that after 26/11 the security of the country has improved manifold and a lot of accountability has been brought into the security response mechanism. Business leaders in the recent past have spoken out on issues like land acquisition, migration, etc. And changes, even if subtle, have happened. However, when it came to CWG preparations, India Inc. maintained a stoic silence in the years leading to the games. We don’t lack foresight – we regularly discuss business issues much ahead of time. Last week I attended one event themed on Rotterdam Rules – an international shipping convention that China is yet to sign and India is yet to consider. At the time of writing this, another event again —deferred GST has appeared on the calendar — and justly so. But what about matters of national pride, at least those that involve issues related to industry and commerce? Please correct me if I am wrong, but I don’t remember seeing one big event on CWG preparations in the last seven years from India Inc. Again, did the subject not concern matters related to logistics, infrastructure or tourism? Why did not CII or FICCI or any of the logistics and infrastructure bodies ever discuss the issue? Or consider the media. Seven years ago, when the CWG was awarded to India, did the media fraternity not have enough evidence to know that Delhi’s civic bodies, the sports ministry and other allied departments responsible for CWG preparations were inept to begin with? Did the state of sports in our country not give our media any clue to the subject? Where were all the cautionary reports, investigations, and the animated talk shows themed on the games before Rajya Sabha MP, Mani Shankar Aiyar, raised an alarm? Above all, I blame writers and editors like myself – we should have taken up this issue during the preparatory years, even if it would’ve made a zilch of a difference. I reckon, we in the industry (and the media), must take the CWG damp squib as a wake-up call. And begin expressing our views on matters of national importance — almost all of them concern commerce and industry nowadays. It’s high time.
Aanand Pandey firstname.lastname@example.org www.twitter.com/logisisticsweek
October 2010 | www.logisticsweek.com 5
Contents 16 uPSHOt
34 COver StOry
taking the Long View
We highlight some of the interesting events that were organized by various sectors last month. From the Rotterdam impasse to Fraud Management to GST, here's a lowdown.
Amit Mukherjee, VP (IT & Supply Chain) and Group CIO at RPG, is constantly finding new ways to make shopping a delight for customers. The use of IT and sound planning is helping him achieve goals.
strong Connectivity Effective telecom logistics has aided in the growth of the telecommunications industry.
20 24 Feature
Managing Warehouses With It Warehouse Management Systems (WMS) find few takers in India. Probably because it does not match the scale of small warehouses. But vendors are finding new methods to sell.
October 2010 | www.logisticsweek.com
Inland Waterways Inland waterways which are clean, green and value for money make for an effective mode of transportation in the country.
OCtOBer 2010 ADVeRtIseR InDeX
Too Many Roadblocks
Arham Logiparc ...................................................... IBC
Supply chain managers are constantly seeking ways to ease transportation costs and difficulties. But there are too many woes.
DB Schenker ............................................................. 9 DHL ............................................................Back Cover Drive India Enterprise Solutions ............................. IFC Exide Industrial........................................................ 39 Green Earth Translogistics .......................................11 Hannover Fairs ........................................................ 31 Hormann ................................................................. 49 Ingersoll Rand ......................................................... 23 Jay Equipment......................................................... 33 Kale Consultants ..................................................... 62 Man Force Trucks...................................................... 3 Radhakrishna Foodland ............................................13 Round The Clock Logistics ...................................... 41 Safexpress ...............................................................19 SCM Logistics World 2010 ...................................... 52 State Bank Of India ................................................. 27 Vijay Logistics ........................................................... 4 VRL Logistics .......................................................... 23
48 SePteMBer 2010 eek.com
Vol. 4 - No.1
` 100 Germany
tnt, Clinical trial Logistics Due to globalisation of clinical trials, supply chains must be improved to ensure greater outsourcing to India.
I N D I Aâ€™ S
N O .1 L O GIST
ICS MA GAZ
ANNIVERS ARY ISSUE
53 Feature Business Intelligence
TIME TO STEM THE ROT 28
Why the grains left to rot when are millions starve
With increasing competitiveness in the market, adoption of business intelligence strategies can lead to a spurt in profit margins.
AFTERMARK ET GLOW 44
Capturin pturingg the growing importance of the aftermarket industry
Vinay Sharm a, MD, Oil Field Warehous e & Services reveals the idea that is saving E&P comp anies time and mone precious y >> Page 36
LOOKING GOOD 50
How is the Indian apparel industry moving mercha is ndise
Books, Journals, Blogs, Technology - a look at what's new in and for the supply chain industry. INDIA |
October 2010 | www.logisticsweek.com 7
TRAIN OF THOUGHT
opeRaTIVe InDeX* ASSOCHAM, KPMG, TCI, CII-IL, Nokia, Samsung, Bright Point India..... ...............10
We require at least 50 grain storages across India that can contain one mt of grains each. It is important to have enough food so that we make food a legal right. — ms swaminathan, founder of the ms swaminathan research foundation, on the strategy to successfully implement the Right to Food Security Act
We have sold 1.1 mt of steel through Hypermart and Expressmarts and this year we will sell 1.6 million tonne as we are expanding our footprint across India. — girish rao, ceo, essar hypermart, on Essar Steel’s plan to increase steel retail stores and grow sales by 45 percent
The existence of Chinese distributors is a good thing because they constantly keep us on our toes, especially by playing on costs. — tej nirmal singh, director & head-supply, ericsson India, on the role of Chinese distributors in Indian telecom supply chain
Blue Dart, Larsen & Toubro, BDH Industries, Birla Sun Life, Wartsila, DIESL, KARM, Unilever, PepsiCo, arks & Spencer, ysco ........................ 12 MIDC..........................................14 KCCI, Maersk Line, Gearbulk, BP Shipping, Lloyd’s Register, ABN Amro..... .........................15
*Key entities mentioned in the news section
A Nation That Honors Its Truck Drivers America recently celebrated the 15th National Truck Driver Appreciation Week. Logistics and railroad cos, even Wal-Mart, organized felicitation campaigns and health camps to mark the occasion
ike every year, America took time out this year to pay gratitude to the men and women – who, as put by the country’s newspapers, drive their nation’s economy – by observing National Truck Driver Appreciation Week (NTAW) from September 19 to 25. The NTAW was conceived and started by the American Transportation Association (ATA) in the year 1995. This year, in its 15th NTAW, America’s companies, truck associations, railroad companies, et al organized felicitation ceremonies, dinners and health programs to celebrate the occasion. Some companies also gave away million-mile
safety awards and bonuses to its truck drivers. According to ATA, there are more than 3.4 million truck drivers in the USA, who deliver about 67 percent of the country’s total freight tonnage, driving a cumulative 431 billion miles per year. “Professional truck drivers deliver our nation’s essential freight safely every day,” President and CEO Bill Graves of ATA said in a statement. “As a result of this commitment, our nation’s highways are the safest they have ever been and our grocery shelves are stocked. We as a nation owe a great deal to the truck drivers out on our nation’s roads every day.” The Burlington Northern
October 2010 | www.logisticsweek.com
Santa Fe Railway (BNSF), that operates services in the mid and western United States, ob-
served a campaign to celebrate the week that had the officials greeting and delivering gifts
Wal-Mart felicitated more than 7,900 drivers across its transportation ofﬁces.
< news to about 1,500 truck drivers at intermodal facilities across many states such as Texas, Missouri and California. “Truck drivers are an important part of the supply chain. By working together, we are able to provide safe, reliable transportation of the products American consumers use every day. This is a small way for BNSF to say thanks,” stated Katie Farmer, BNSF vice-president, Domestic Intermodal, in a company statement. BNSF handles more than 3.9 million international and domestic containers and trailers each year, and is said to be
Other tokens of appreciation presented included safety awards, cash bonuses or gifts, offerings of refreshments or windshield cleaning to drivers truck stops, and celebration meals. one of the world’s largest intermodal rail carriers. Another big participant in the revelries was the retail giant Wal-Mart, which felicitated more than 7,900 drivers across all its transportation offices during the week. “We have the best truck drivers in the country, and they play
a big part in our company’s success,” the company said in a statement about the week. “Our private fleet is one of the largest and safest in the world. More than 7,900 Wal-Mart drivers make over 3.5 million deliveries to our stores and clubs each year. Our entire fleet is expected to drive more than 712 mil-
lion miles this year, and they drive those miles safely while providing excellent service.” Other tokens of appreciation presented by companies and societies around America included safety awards, cash bonuses or gifts, an extra paid day off, offerings of refreshments or windshield cleaning to drivers, goodie bags with fresh fruit and water, and numerous celebration meals. Employees of some companies in different parts of the USA were also encouraged to spend a few days out on the road to see the driver’s side of the business.
Our network makes the world a little smaller. We work around the clock in over 130 countries all over the world to attain one single goal: making your logistics even more efficient. And this is why we can offer you a seamless transportation chain from one single source – by rail, road, sea, or air. Our additional logistics services make even the most complex tasks anything but impossible. To find out more, visit www.dbschenker.com.
October 2010 | www.logisticsweek.com
< news Company news
Confer Industry Status To Logistics: Assocham Mumbai
he Associated Chambers of Commerce and Industry of India (Assocham) and KPMG have jointly demanded conferment of ‘industry status’ on the logistics industry. The move is expected to bring down exorbitant logistics cost from current level of 14 percent to 10 percent of total value of goods produced in India to make the industry competitive. The two institutions have observed that in developing countries these costs are between 6-8 percent of total value of goods since logistics enjoys benefits in terms of tariff levels that reduce their high costs. A paper brought out by KPMG and ASSOCHAM points out that administrative hurdles account for large delays and additional costs for logistics sector. Further, policies and procedures are complicated and vary from state to state. For instance, in truck transport from Kolkata-Mumbai, 32 hours are spent at various check posts. This implies a stop-
An industry status would help in bringing down logistics costs.
page time of 1.5 hours for every 100 kilometers. Growth in multi-modal transport is crucial for reducing logistics cost of Indian trade. As trade in manufactured cargo increases, there would be rising demand for multi-modal services. At present, cost of switching from one mode to another is high as different modal nodes are far away from each other. To harmonize liability regime, there is a need to modify present laws and replace them with minimum criteria to be satisfied by
all transporters involved. As the Indian market has become more globally integrated and competitive, companies would increasingly turn towards outsourcing entire logistics function to minimum possible number of entities to limit administrative burden. In such a scenario, companies which can provide a range of services would stand better chance to attract such businesses. However, given the diverse nature of logistics services and hence capabilities required to
deliver an integrated proposition, only a handful of players can reasonably target this market individually. A novel form of integration is emerging in logistics sector. A few private entity houses focused in infrastructure are acquiring small logistics companies – trucking, warehousing, freight forwarding. There are funds infused in each to modernize facilities and spread the expansion. The paper further says areas of improvement exist in all segments of logistics chain viz., trucking, warehousing, rail transport, port operations, customs procedures, material handling etc. while each of these needs to be addressed in their individual contexts at the earliest, greater imperative is to coordinate initiatives in a phased and planned manner. A logistics system works like a chain and is as strong as its weakest link and sub-optimal solution at any stage will lead to bottlenecks and inefficient execution.
TCI, CII-IL Seek Ways To Improve Telecom Logistics Mumbai
ransport Corporation of India (TCI) in association with CII Institute of Logistics organized a Round Table Conference on ‘Supply Chain Optimization and Excellence’ in the telecom sector to discuss the challenges in supply chain in the light of current and future times and make an effort to find solutions. Present on the occasion were Vineet Agarwal, Executive Di-
rector, TCI; Ravi Shankar, Professor, IIT Delhi; VGS Mani, Country Logistics Manager, Nokia; K. Raghuraman, Sr. Manager Logistics, Samsung; Rajkiran Kanagala, Head Business Development, TCI Supply Chain Solutions; and Shailen Shukla, CEO, Bright Point India. Tremendous growth in the telecom market is seeing huge challenges in telecom supply
chain. A key challenge is the road infrastructure, especially in suburban and rural India, where telecom growth is the maximum. The lack of skilled labor in handling hi-tech equipment brings in complexity in terms of timely and safe delivery of equipment. The only way players will be able to succeed in the new demand-driven marketplace is by practicing ef-
fective SCM, streamlining purchasing processes and reducing time-to market successful functional core component. TCI has been taking initiatives for the betterment of the logistics sector. The company has been undertaking several such round tables and discussions and has also come out with various research documents and reports.
IndIan telecom network wIth 621 mn connectIons Is the thIrd largest In the world 10
October 2010 | www.logisticsweek.com
PAN India Warehousing (3PL/4PL) Reverse Logistics Primary & Secondary Transportation In-transit Damage Reduction Solutions Partnership in Road Safety Programs Logistics BPO Logistics Staffing Services Logistics Consultancy & Training Audits & Benchmarking
E-04, Devashree Garden, Rutu Park Service Road, Majiwada Naka, Thane (W) â€“ 400601. Maharashtra Contacts : (+91) 99879 22244/9820761645 E-mail: email@example.com
Blue Dart Bags Good DIESL Adopts Village In Corporate Citizen Award Thane; Ropes In KARM Mumbai
lue Dart Express has been conferred the ‘Good Corporate Citizen Award for the year 2009-10’ in the Medium Corporate category by the Bombay Chamber of Commerce and Industry (BCCI). Winners from other categories are Larsen & Toubro in the Large Corporate category, BDH Industries in the Small & Micro Companies category and Birla Sun Life Insurance in the Banks & Financial Institutions category. The Chamber has been awarding the Good Corporate Citizen Award since 1993 and this is their 175th Anniversary. The awards this year have been increased to four categories to
include large corporate, medium corporate, small and micro companies and banks and financial institutions. The award was instituted to recognize and honor organizations with strong corporate governance and service to the community in addition to outstanding operational performance. It is conferred to an organization for its outstanding contribution and achievements and is given out every year after examining the detailed documents submitted by applicants. The parameters of evaluation are business performance, welfare, customer and stakeholder satisfaction, social investment.
rive India Enterprise Solutions Ltd. (DIESL) has adopted a village in Thane district to provide holistic support aimed at upliftment and general welfare. DIESL has roped in KARM (a Mumbai based NGO) to endorse agro and livestock based activities for the upliftment of socio-economically backward communities in the village of Jarandi, located near Khardi on the Mumbai-Nasik Highway. This initiative is part of the Prakruti programme at DIESL. DIESL and KARM have chalked out a plan to deal with problems like health & hygiene, water scarcity, low productiv-
Wärtsilä Confers Mantosh Sondhi Award On AEC Chair Professor Mumbai
ärtsilä India has conferred the Eighth Wärtsilä Mantosh Sondhi Award on Dr. Anil Kakodkar, Homi Bhabha chair professor and
member, Atomic Energy Commission for his outstanding contribution to the energy sector in India. Dr. Kakodkar accepted the award
Ole Johansson (left), President & CEO, Wartsila Corporation, presenting the Wartsila Mantosh Sondhi award to Dr. Anil Kakodkar.
from Ole Johansson, President and CEO, Wärtsilä Corporation. This year’s Mantosh Sondhi Memorial Panel Discussion was on Green Earth - Blue Globe. The panelists included Suresh Prabhu, Chairman, Council of Energy, Environment & Water; and Christoph Vitzthum, Chairman, Wärtsilä India & Group VP, Wärtsilä Corporation; and Prof. Sebastian Morris, IIM Ahmedabad. The Wärtsilä Mantosh Sondhi Award was instituted in 2003 to recognize outstanding achievements and contributions to the energy sector.
ity, obsolete farming methods, lack of awareness, employment, malnutrition etc. due to absence of sustainable livelihood and infrastructure. The purpose of the project is to enrich farmers through a self-reliant method not only in terms of improvement of income, employment and nutritional status but also in terms of fostering community development, gender empowerment, and health awareness. The programme will cover aspects such as community building activities, sustainable agro based and livestock development activities, water resource improvement and health improvement activities.
Unilever Targets supply Chain emissions Mumbai
orking with the University of Aberdeen, Unilever has developed The Cool Farm Tool – a new greenhouse gas calculator. The tool enables both supply chain managers and farmers to input data they have access to in their daily jobs, and uses this to calculate total greenhouse gas emissions. It has been adopted by PepsiCo, Marks & Spencer, and Sysco, who are using the tool as part of a project on agricultural climate mitigation coordinated by the Sustainable Food Lab.
natural gas productIon for august 2010 In IndIa stood at 4526.5 cu.m. 12
October 2010 | www.logisticsweek.com
YOUR TRUSTED PARTNER IN PROVIDING INTEGRATED SOLUTIONS FOR SUPPLY CHAIN CHALLENGES Our Services Warehouse Management Transport Management Value Added Services Project Management & Consultancy.
Current Sectors Served: FMCG l Retail l Food Service l Agri Products l Pharma Current Distribution Centers Mumbai Chennai Noida Bengaluru Hyderabad Kolkata Kundli
www.rkfoodland.com MUMBAI BRANCH: FOOD PARK , PLOT NO. 1, SECTOR KWC, KALAMBOLI – 410218 TALUKA – PANVEL, RAIGAD, MAHARASHTRA TEL.: +91-22-67933200 FAX: +91-22 27424818 E-mail: firstname.lastname@example.org
< news RoaDs
MIDC To Set Up 15 Truck Terminals Across Maharashtra; Seven In Phase One Alone Mumbai
n a bid to increase its scope of service offerings and provide comprehensive industrial infrastructure solutions, Maharashtra Industrial Development Corporation (MIDC) is developing 15 truck terminals at its properties across the state. MIDC is Maharashtraâ€™s nodal agency instrumental in holistic development of industry in the state and the only state owned industrial development corporation in the body in the country. It provides the widest range of support infrastructure services such as power, water supply, ready sheds, fire services, airports, airstrips and helipads, street lights, eff luent collec-
tion systems and treatment plants. Seven truck terminals are coming up in the first phase, construction on which will be completed in the next 1824 months. The sites identified for these are â€“ Latur, Patalganga, Chakan, Taloja, Waluj, Talegaon and Ranjangaon. As these are industrially high density areas, the commissioning of truck terminals at these locations will improve efficacy and speed of cargo/raw materials movement. The modern, international
The terminals would provide a locational advantage and help move cargo faster.
class truck terminals will be equipped with a range of facilities such as parking, warehousing, loading/unloading, boarding/lodging for drivers, AIDS counseling centers and medical facilities, public toilets, eateries, etc. Additional
facilities like vehicle servicing, fuel supply and other support infrastructure services are also on the anvil. Bids for eight more such truck terminals as part of the second phase will be invited soon.
India, China To Work Towards Signing MoU For Roads Beijing
ndia and China have agreed to work towards signing of a Memorandum of Understanding (MoU) in the areas of road transport and highways. Under the MoU, both sides would seek to enhance cooperation in highway construction, exchange of technology and investments in the sector. This was agreed to during the meeting between Kamal Nath, Union Minister for Road Transport & Highways and Li Shenglin, Minister of Transport, China at Beijing last month. India has embarked on a massive National Highway
companies and the financial institutions to increase their engagement with India. With the preferred mode of highway development in India being PPP, about 60 percent of India plans to construct 7,000 km of the national highNational Highways over the next few years. ways would be develDevelopment Program under oped under the BoT (Toll) mode, which it is proposed to con- while another 25 percent would struct 7,000 km of National be taken up on BoT (Annuity). Highways every year over the There is already participation next few years. The huge tar- from several Chinese compagets will provide opportunities nies in the National Highway to the Chinese construction Development Project of India.
Earlier in the day Nath met other Chinese investors and sensitized them to the opportunities of investing in the National Highways sector of India and of the high returns that the sector promises to offer. There was also an idea mooted by a Chinese investor of setting up of an India-China Highways Investment Forum for investors, developers and construction companies which will provide a platform for the policy makers, financial experts and the business leaders to work closely towards enhancing project specific investment flows for mutual benefit.
BeIjIng has allotted $15Bn to auto & Battery cos to create an electrIc car Industry 14
October 2010 | www.logisticsweek.com
KCCI Demands Air Cargo Complex In Mangalore Mangalore
he Kanara Chamber of Commerce and Industry (KCCI) are pressing for an air cargo complex in Mangalore. The body feels there is good potential for the export of f lowers, vegetables and Mangalore delicacies to West Asian countries. A study conducted by MSIL (a Karnataka Government marketing agency) on the potential
of cargo movement through Mangalore airport has helped serve KCCI’s case. Another demand is that with air traffic movement witnessing growth, there is a need to further widen the road connecting the city with the airport. It has also been suggested that the thrice-a-week train service between Mangalore and Bengaluru should be made daily.
An air cargo complex can push up export of local delicacies.
Industry Leaders To Shape Future Of Shipping New Delhi
hipping leaders are joining forces to ensure the industry successfully navigates climate change, rising fuel costs, new patterns of global trade and other challenges of the future. Maersk Line, Gearbulk, BP Shipping, Lloyd’s Register and ABN Amro are working with Forum for the Future and WWF in an ambitious project designed to chart a course to a sustainable future. The Sustainable Shipping Initiative (SSI) will examine the
challenges and opportunities which face the industry over the next 30 years and what it needs to do to ensure that, by 2040, it is robust and profitable with a strong record of social and environmental responsibility. Climate change and new weather patterns; oil shortages and carbon taxes; changing markets and cargoes, particularly in Asia; piracy and marine governance; new ship designs and other technological developments: strategic megatrends like these
will profoundly affect the industry. The Sustainable Shipping Initiative will enable participants to prepare for, influence and take advantage of these trends and play a leading role in shaping the future of the industry. Climate change is a huge challenge for all, and shipping is not only part of the problem, it can also be part of the solution. The founder members aim to bring other leading organizations from across the industry into the SSI, including global
shipping firms, shippers and financiers. Members will identify the key megatrends which will affect shipping, explore how best to react to them, and prepare a case for action as a resource for the entire industry. The ultimate goal is to mobilize support across the industry for this action plan, which may include technical and engineering initiatives, policy proposals, development programs for industry leaders and marketing and communications plans.
Draft Bill On Maritime Board Approved Kerala
he Kerala State Cabinet has approved a draft bill for setting up a Maritime Board in the state. The Board would be constituted by merging the Department of Ports, the Hydrographic Survey Wing and the State Maritime Development Corporation. Prepared by the Law Depart-
ment, the Bill seeks to coordinate work connected with the coastal development carried out by various departments, and also monitor maritime activities at large. The Maritime Board will administer, control, regulate and manage all ports in the state. Apart from intensifying
security measures across the coastline, the board will also take up steps for conservation of interior ports. The Maritime Board is also capable of attracting private capital and can proceed to raise funds as well as loans on its own assets. It also helps precipitate a decision
about privatization of a port or parts thereof faster than would be the case if it was processed by a government department. Elsewhere in the country, four states — Tamil Nadu, Andhra Pradesh, Andhra Pradesh and Gujarat — have already set up their own maritime boards.
In 2010 alone, chIna wIll construct 10,000 km, of the 35,000 km of hIghways planned INDIA |
October 2010 | www.logisticsweek.com 15
Growth And Efficiency Is the Motto
(L - R) Narasimharao Vinala, Head (Shipping), CMC; Mario Antonioli, Sales Asst, Brieda Cabins, Italy; Jakob Tolsgaard, Group Product Manager, Cavotec; Shekur Suntah, DG, Mauritius Ports Authority, and Julio Hernandez, Commercial Mgr, Port of Ferrol.
Date: 16th and 17th September, 2010 Event: 5th Southern Asia Ports, Logistics and Shipping 2010 – India Organizer: Transport Events Management Venue: The Leela Kempinski Hotel, Mumbai
or the fifth consecutive year, Transport Events Management hosted the 5th Southern Asia Ports, Logistics and Shipping 2010, India. The event brought together key members pertaining to the global container transportation and logistics industry to deliberate on key issues in the sector. In his keynote address, N N Kumar, Chairman, I/C of JNPT said that “Asia accounts for more than 60 percent of the world's container traffic. While international trade and transport costs have also dropped particularly in Southeast Asia, issues like low level of integration and disparity at the level of infrastructural development are rough patches in achieving overall growth and efficiency.” Also speaking at the event were
representatives from Chennai Port, APM Terminals, DP World, Mundra Port and DHL among others. The venue also saw manufacturers exhibit their solutions aimed at optimizing, improving and greening port and container operations. Siemens showcased its SIMOCRANE platform for crane control and showed how container terminals can up the ante to attain benchmark levels of performance. Also present were material handling equipment used at container terminals, and handheld computers designed to monitor inventory movement, labor management, yard management and other tasks pertinent to the supply chain. IT firms providing solutions to maritime and ports logistics industry were also present.
Rotterdam Rules still Going strong
he world of shipping is undergoing a sea change. Rotterdam Rules promise to bring shipping up to speed with technology. Questions are: Are we ready? Are the rules in our best interest? Some of the areas of concern about the Rotterdam Rules convention in relation to Indian shipping have been increased liabilities for ship owners, our archaic laws, and inadequate infrastructure to support the Rules. Some provisions welcomed by the shipping fraternity have been unified contract, push towards e-commerce, limitation of liability, and ability to negotiate the area of jurisdiction within the ambit of the rules. These were clearly the two perspectives that emerged at the Panel Discussion on “Rotterdam Rules” organized by CSCMP (Round Table) RT Mumbai. If ratified by India, the Rotterdam Rules would, if accepted, replace ‘The
Hague Rules’, ‘The Hague-Visby Rules’, and ‘The Hamburg rules’ for trade emanating out of India. One thought that found agreement was when Shantanu Bhadkamkar, Honorary Secretary, CSCMP RT, Mumbai, mentioned that every country has Some concern areas about the Rotterdam Rules remain. Most of its interests. For inthem are in relation to liabilities for ship owners, archaic laws, stance, the UK may look inadequate infrastructure to support the Rules, among others. at the Rotterdam rules keeping the interests of the insurance and legal community in mind whereas some countries in Central Asia may adopt it keeping in mind their abunDate: September 10, 2010 dant maritime capacity. Event: Rotterdam Rules A big concern raised was related Organizer: CSCMP RT, Mumbai to India’s unorganized international trade. Venue: St. Xaviers Institute of Management, Mumbai
October 2010 | www.logisticsweek.com
preparing for Gst
he implementation of the Goods and Services Tax is one of the most eagerly awaited tax reforms in the country. Sushil Solanki, newly appointed Commissioner of Customs at J N Port, Nhava Sheva, who is also a part of the GST committee, stated that GST would in all likelihood be implemented on October 1, 2011. Speaking at the ‘India after GST: Manufacturing, Sushil Solanki, Commissioner of Customs, Jawaharlal Nehru Customs, (Nhava Sheva), Mumbai. Logistics & Beyond’ summit organised by the Date : September 24, 2010 Supply Chain Leadership Council on Event: India after GST – Manufacturing, Logistics September 24, at Hotel Sahara Star, Mumbai, he stated that the Indian and Beyond Summit GST will be one of the most objecOrganizer: Supply Chain Leadership Council tive and progressive compared to a Venue: Hotel Sahara Star, Mumbai
similar tax launched in 130 countries across the globe. The Head of Logistics and Customer Operations at Marico, Amit Kawoor, disclosed that his company was in an advanced stage of preparedness to implement GST, while Rakesh Sinha, COO of Godrej Consumer products noted that GST will lead to a complete restructuring of regional warehouses and CFAs. Deepak Gupta lauded the eventual implementation of GST and emphasized that his company would save at least five percent in supply chain costs with the launch of the new tax. The summit was attended by a 100 representatives of manufacturers, retailers and 3PLs who were advised to use the delay in the implementation of GST to restructure their businesses in preparation for the new tax.
AMtoI Celebrates Annual Day In style
he much sought after Association of Multimodal Transport Operators of India (AMTOI) Annual Day was celebrated on August 20, 2010 at Hotel President, Mumbai. The event brought together the shipping and logistics fraternity thus making it an evening of fun, live music & dance, and awards and accolades. The Secretary, Ministry of Shipping, K Mohandas, was the Chief Guest at the event. Tushar Jani, President, AMTOI, in his welcome address said that AMTOI is the only organization that brings together all players in the logistics chain for its smooth functioning in order to provide the best of services to the customers. AMTOI felicitated some of the leading industry people for their support to Multimodalism and their contribution to the shipping and
logistics fraternity. The honor was bestowed on Shipping Corporation of India; L D Parekh, chairman of the Parekh Group; Mukesh Oza, President of the Samsara Group; and Shashi Kiran Shetty, Chairman and Managing Director of Allcargo Global Logistics. Dr. Satish Agnihotri, Director General of Shipping, launched the new AMTOI website. AMTOI also launched a Grievance Redressal Forum on the occasion. Speaking about the Forum, Anand Sheth, Vice-President of AMTOI stated that the organization has been pursuing this for some time. The forum comprises key industry bodies namely, CSLA, MANSA/FEDSAI, FFFAI, BCHAA, ACCAI, CAI and AMTOI. The event witnessed a dance performance by an African Dance Group “Zimba Boys”.
(L-R): Shantanu Bhadkamkar of FFFAI; Capt Dinesh Gautama, CSLA; CR Nambiar of MANSA & FEDFAI; Om Prakash Agrawal of BCHAA; K Mohandas, Secretary, Ministry of Shipping; Dr Satish Agnihotri, DG of Shipping; Tushar Jani of AMTOI; Keshav Tanna of ACAAI; Nityam Khosla of CAI; Anand Sheth of AMTOI, at the launch of the Grievance Redressal Forum.
Date : August 20, 2010 Event: AMTOI Annual Day Organizer: AMTOI Venue: Hotel President, Mumbai INDIA |
October 2010 | www.logisticsweek.com
rganizations can be victims of fraudulent activities at every step in its supply chain both internally and externally and through internal-external collusions. The failure to detect and reduce fraud at the source can lead to large financial losses as the fraud manifests itself through the supply chain and results in consumer injury and death. Good governance demands a thorough risk analysis, which includes an organizationâ€™s susceptibility to fraud. Ron Evanciaâ€™s Supply Chain and Procurement Fraud Management, held on September 16 and 17, addressed issues like this and more. Recognizing the need to have an indepth understating of the risk factors involved, Ron Evancia took the initiative to organize this discussion to those involved in supply chain and fraud control functions. Some of the topics at the events were Elements where supply chain fraud happens; Supply chain fraud identification checklist and minimization program; Warehouse design flaws leading to fraud; Corporate governance for supply chain operations; Vendor fraud prevention and value creation strategies, etc. Each of the topics raised pertinent issues related to fraud and misman-
agement in supply chain. Reviewing supply chain fraud calls for looking at purchasing, accounting, manufacturing, distribution, shipping, sales order processing, inventory control, quality assurance, and fixed asset management. The conference key note address was delivered by Norman Katz, President, Katzscan, Inc., a leading authority on the subject, offered in-depth insights into key elements where supply chain fraud happens, corporate governance for supply chain operations and on supply chain vendor compliance. Another much appreciated presentation was by Kanwal K. Mookhey, Principal Consultant and Founder, Network Intelligence who offered case examples on how IT can be used as a tool to detect supply chain fraud. He highlighted the loopholes in information technology, which can be exploited by potential fraudsters. Supply chain fraud detection and reduction requires a new examination of an organizationâ€™s activities, namely, the financial statements. The second-day keynote address delivered by Sukumar Narasimhan, Senior Vice-President [Supply Chain (SME Cell)], Reliance Industries Limited, offered
The forum saw high levels of interaction between delegates and speakers on how supply chain fraud can be minimized.
October 2010 | www.logisticsweek.com
Norman Katz, President, Katzscan Inc., delivering the keynote address.
fresh perspective and a rather different approach to this. He stressed on the importance of building employee trust and responsibility to avoid fraud within the organization rather than over-relying on internal controls and processes. The forum had high levels of interactions on issues such as whistleblowers policy, investigative techniques and methods to use in a suspected fraud case and role of technology in minimizing supply chain fraud. Arif A Siddiqui, Founder & Head, Coign Consulting, highlighted the often neglected area of warehouse design and employee treatment which leads to fraud. To a broad range of issues raised, one was the less frequency of visits of senior management to warehouses which hold valuable company assets. The event was a good meeting point for financial controllers, accountants, heads of corporate governance, Chief Vigilance Officers, CFOs, heads of supply chain, etc.
Date : 16th and 17th September, 2010 Event: Supply Chain & Procurement Fraud Management Organizer: Ron Evancia Venue: Hotel Sahara Star, Mumbai
Strong Connectivity The telecom logistics industry is working as a catalyst to aid India in its growth as a global telecom manufacturing hub. Remya Philip reports
he ubiquitous prevalence of telecommunications in the country is due to a silent and swift revolution which has transformed India’s obsolete communications industry beyond recognition. Today, India is on the cusp of a telecom revolution, with spin-offs percolating to every strata of society. The slow pace and the obscure technology of earlier communication systems are quickly receding into the past. India’s enviable new telecommunications systems are in line with the best available across the globe. A KPMG analysis revealed that the Telecom Regulatory Authority of India (TRAI) recorded a total telephone subscriber base of 688.38 million as on July 31, 2010. The teledensity consequently increased to 58.17 percent, considerably higher than the 41.08 percent recorded last year. The wireless subscriber base too amplified to 94.78 percent by the end of July 2010 of which 30.72 percent was from the rural areas. With such remarkable growth rates, the telecommunications industry is in a boom phase. The success story of India’s telecommunications has opened the door to an equally thriving industry in the field of telecom logistics. LOG.INDIA caught up with prominent
October 2010 | www.logisticsweek.com
telecom providers and 3PLs to find out how they keep telecom logistics running.
the Chain Of Supplies The supply chains of all the leading brands like HTC, Samsung cell phones etc. follow a similar cycle, which goes like this — since most of these brands get equipment manufactured in China or Taiwan, the equipment is first imported from manufacturers based in China and Taiwan and transported to warehouses spread all over the country. Nokia is an exception to this as they have a manufacturing plant in Chennai. Most of the equipment comes fully designed and assembled after which their MRPs are set at the Indian warehouses. The cost is decided on a per unit basis with a final price tag that includes a fixed cost for the logistics involved. From the warehouses, the equipment is distributed in essentially three ways: n Tele forward agents – They carry out regional distribution in the north, south, east and west of the country. n Super stockist agents — They are responsible for distribution within the various states. n Direct distribution — Distribution within towns and metros. Ericsson, one of the world leaders in telecom network equipment, has been associated with the Indian telecom industry for more than a hundred years. The corporate has set up factories for telecom equipment in Sweden, China and Jaipur. Almost 70 percent of the network equipment originates from Jaipur while the rest comes from Sweden and China. From the factories, the equipment is transported to warehouses and then to various sites. At the sites, equipment is installed and integrated as per the operators’ requirements. Bharti and Vodafone are among the operators Ericsson extends its
services to. In the case of equipment from Sweden and China, they are imported by either air or sea, after which they are transported to the respective operator circles in India. Chinese distributors are playing a powerful role in the Indian telecom supply chain. With their low prices, they have made cell phones affordable. But the flip side is that the local manufacturers suffer as they are compelled to set their prices extremely low to compete with the Chinese. Tej Nirmal Singh, Director and Head-Supply, Ericsson India Pvt. Limited, believes that “The Chinese distributors are very aggressive when it comes to both price and delivery. However, operators like Bharti and Vodafone who are our clients for example, do not use Chinese equipment thereby establishing their loyalty to us. In any case, the existence of Chinese distributors is a good thing because they constantly keep us on our toes, especially by playing on costs.” Since time is of the essence, telecom providers work in synergy with 3PLs to speed up the supply chain. The 3PLs, in their pursuit to fulfill the rising needs of consumers in the shortest possible time, are constantly inventing new ways to get their job done effectively.
role Of 3PLs Spear Logistics based in Pune started providing warehousing and distribution services to Airtel in 2003-2004 when telecom was in a nascent stage of growth. They have over 60 warehouses spanning about 1,600,000 sq.ft of warehousing space with supporting infrastructure and capital investment. Their other clients include Aircel and Essar Telecom. As a 3PL, Spear provides contract warehousing services and also manages secondary transportation, with their own delivery systems, for some customers.
The Chinese distributors are very aggressive when it comes to both price and delivery. However, operators like Bharti and Vodafone do not use Chinese equipment.” — Tej Nirmal Singh, Director and Head-Supply, Ericsson India Pvt Ltd
Most of the equipment comes directly from manufacturers to warehouses. B2C products such as cell phones and accessories are delivered to clients who are located all over the country. The locations include TierI, Tier-2 and Tier-3 cities. Passive and network telecom equipment travels from warehouses directly to sites. Various modes of delivery are used including primary road transport, express door deliveries by road, air and couriers. The IT systems including the WMS deployed by 3PLs help keep track of inventory in terms of volume. A carrier management team exists to keep track of trucks while they are in the process of transporting equipment. Most telecom service providers have a regional warehouse in the Tier-1 cities of each state, enabling efficient distribution to retailers. INDIA |
October 2010 | www.logisticsweek.com
< feature Drive India Enterprise Solutions Limited (DIESL), a TATA group company and a leading provider of integrated logistics solutions, offers services to well-known telecom companies such as TTSL, Virgin Mobile India, Nokia Siemens Network, Maxx mobiles etc. The company transports the entire gamut of telecom equipment from SIM cards to towers and generators. Though the corporate has its own dedicated vehicles to transport equipment, it also uses vendor networks depend-
Spear Logistics has over 60 warehouses which span about 1,600,000 sq.ft of warehousing space.
ing on the client’s requirements. The company has more than 176 warehouses with WMS and IT tools, spread all over India managing over 1.25 million transactions per month. DIESL provides kitting and packaging services as well for some of their clients like TTSL, TTML and Virgin. The use of state-of-theart SAP based ERP systems aid in maintaining accuracy and clarity in inventory management through periodic inventory audits and freight management. DHL, which is already renowned for its 3PL services, provides services for telecom as well. Alcatel Lucent and Ericsson are just two of the brands on DHL’s list. Their role in supply chain management for telecom involves mainly two services — customs clearance of the cargo and delivery to warehouses. In order to ensure timely delivery of their services they see to it that the cargo is dispatched to the respective locations within 24 hours after customs clearance. Most of the 3PLs have training programs to train labour at their warehouses to carry out functions like MRP, bar-coding, labeling, etc. Reverse logistics is one of the value-added services that nearly all 3PLs provide. This involves bringing back faulty equipment for repair to the warehouses and then sending them to their respective manufacturer service points. A close looping system is followed to ensure that repaired or replaced equipment are brought back to the warehouse in due course.
Equipment stored in racks at a warehouse of Spear Logistics.
October 2010 | www.logisticsweek.com
Ernst and Young predict that India’s telecom service revenue will hit US $55 billion by 2012 and in doing so, contribute over 6 percent to the GDP. At this rate, India’s objective of emerging as a global telecom manufacturing hub is easily attainable.
We are at a stage when everyone is mindful of the fact that costs must come down. This helps bring about consolidation leading to lesser work, but of much higher quality.” — Gautam Dembla, Director, Spear Logistics
And the way things stand now the logistics of telecom will only help hasten this process. With telecom providers and 3PLs working earnestly to provide time and cost effective services, Gautam Dembla, Director, Spear Logistics rightly sums up the Indian telecom logistics industry by saying, ‘‘We are at a stage when everyone is mindful of the fact that costs must come down. This helps bring about consolidation leading to lesser work, but of much higher quality. The penetration is so high that today even rural areas are receiving services of the same quality as the urban areas.’’ The telecommunications network with its growing strength and connectivity is thus going to help India’s telecom industry retain its well-earned global recognition for a long time.
Looking For Scale
October 2010 | www.logisticsweek.com
The warehousing scenario in India is hugely fragmented with inefďŹ ciencies spread across its value chain. With Indians in the forefront of developing smart and innovative technology, why is WMS not taking off on a big scale in India? Frewin Francis reports on the underlying causes
October 2010 | www.logisticsweek.com 25
echnology users in India Inc., it is believed, usually fall in the late adoption category. Some attribute it to cheap labor rates, some to India’s unique (read fragmented) business environment, some to economies of scale (or the lack thereof ). However, in the case of Warehouse Management System (WMS), despite the fact that big users like those from the retail or FMCG (Fast Moving Consumer Goods Category) sectors swear by the product — and say the implementation has fetched huge cost savings and developed efficiencies – vendors lament low penetration rates of the much-feted system in India. The primary purpose of a WMS is to control the movement and storage of materials within a warehouse. However, it is imperative that a fruitful implementation offers integration and seamless communication between associated hardware and existing legacy systems.
Today, a complete WMS incorporates features such as picking, inventory control, label printing, RMA (Return Material Authorization), receiving and automatic data collection (ADC), wave/batch/zone picking, task interleaving, integration with automated material handling equipment, cycle counting, cross docking, pick-to-carton/pick-to-light, yard management, transport management, labor management and voice picking, and many more.
Reasons For low Adoption In India Despite this, there seems to be a general laxity among logistics players to adopt WMS. One of the prime reasons for the lack of penetration of WMS in India has more to do with the way of doing business than existing tax structures. Most companies operating in this space are cautious about investing in a full scale WMS as throwing more people into the
October 2010 | www.logisticsweek.com
job is quicker and easier. Another reason is that the larger acceptance of low cost or in-house applications has hindered the acceptance of sophisticated WMS systems. Regulatory issues, lack of longterm planning, low level of technology penetration and small warehouse sizes that do not justify the cost of WMS implementation has deterred its wide spread implementation. There is also a fear that it might not offer value for money. Though there is no dearth of good WMS solutions in the market, there is a dearth of management keen on implementing WMS at their warehouse, keeping long-terms benefits in mind. Most of them are not enthusiastic about achieving benchmarked levels of warehousing, so WMS doesn’t find much favor. B. Ramasubramaniam, Director, Miebach Group, says, “Adoption of WMS in India is very low as good warehousing practices (both in terms
GST will encourage an acceleration of the adoption of a hub and spoke distribution model which tends to require larger but fewer warehouses.” — Gautami Seksaria, Founder & Partner, Supply Chain Leadership Council
of infrastructural as well as process related) are not followed currently. In general, the supply chains in India are longer and tolerance towards low quality is high, hence warehousing is not given its due importance in the Indian context.”
What WMS offers WMS could be an on-demand SaaS (Software-as-a-Service) adopting a cloud computing model or an onpremise software. An on-demand WMS is more suited for the logistics industry, especially for a 3PL. It reduces the high initial setup costs and the pay-for-what-you-need model makes WMS cost-effective. Being hosted on-line, a SaaS model connects multiple warehouses, trading partners and customers who can access warehouse data. An on-premise software scores over the SaaS model as it is less susceptible to problems faced due to a
October 2010 | www.logisticsweek.com
network error. Data stored offline reduces chances of data loss or unauthorized sharing of critical data online. In the long run, differences in overall running costs for both on-demand and on-premise are not stark. However, in a price conscious market like India, an on-demand solution has gained popularity among customers who wish to deploy WMS. One company’s WMS module — as an add-on to the ERP —that has enjoyed considerable success in India is SAP. It employs a module that promises seamless integration with its other systems without disrupting existing legacy systems. Some large companies that use these modules are Future Group and Mahindra & Mahindra. WMS systems that can hold ground are those that seamlessly communicate with Warehouse Control Systems and automation devices like cranes, racks, and forklifts. These systems are also expected to be cross operable with solutions from various vendors. The systems can be used by the staff through PDAs or hand-held devices thus enabling realtime inventory visibility and tracking. Integration of these systems with technologies such as RFID, GPS, DGPS (Differential GPS) can enable better tracking and monitoring of goods and processes. According to industry sources, small warehouse operations in India would require a low-end version of inventory locator, inventory counting module, and a basic shippingreceiving package. It is the faster and more complex warehouse operations that would require a high-end WMS. The WMS systems currently popular in the Indian market accommodate inventory control requirements, increase order accuracy, and expand enterprise visibility and interface with existing accounting packages. An Indian 3PL may require WMS to facilitate management of crossdocking, receiving, replenishment and shipping operations along with
integrability of the WMS package with RFID, voice control and material handling equipment. According to Arjan Stiphout, Industry Director at RedPrairie, a company that delivers productivity solutions to help companies in three categories, namely, inventory, transportation and workforce, said, “Most customizations required by Indian customers relate to the Indian taxation system which is quite different when compared to developed countries.”
the hard Sell WMS vendors seem to be working on a sell strategy for India. Several vendors have gone to the extent of waiving off part-fees to attract customers. According to Pradeep Chechani, Business Head & VP Supply Chain at Wadhawan Retail, who oversaw the implementation of WMS at two instances in his company, an SKU count ranging from 75,000 and above well justifies the
Cheap labor and low tolerance to warehousing standards have proven to be an added cost not justifying the thought train of the average short-sighted Indian businessman.” — Pradeep Chechani, Business Head & Vice President Supply Chain, Wadhawan Retail
Most customisations required by Indian customers relate to the Indian taxation system which is quite different when compared to many developed countries.” — Arjan Stiphout, Industry Director RedPrairie
optimization, lower fault rates, and shorter lean times, better planned and reduced costs on transport. Even though WMS continues to gain added functionality, the initial core functionality of a WMS has not really changed.
need for a WMS. With large warehouses too, cheap labor and low tolerance to warehousing standards have proven to be an added cost not justifying the thought train of the average short sighted Indian businessman. To put things in perspective, Allcargo Global Logistics Ltd, implemented Infor's WM 9.1 package at one of their warehouses. Post implementation of WMS, the number of inbound/outbound transaction doubled with no additional resources. The number of returns due to wrong delivery also reduced to zero. Chechani says that depending on the elements one wishes to implement in the WMS package, costs can range anywhere between `50 lac to `300 lac in an Indian scenario. Majority of this cost would be invested in the WMS hardware. The payback for implementation of a warehouse management system is realized only over time. It could approximately be two years before a company can recognize cost savings which could initially be recognized as cost avoidance. Over time, WMS provides RoI of around 30-40 percent in the forms of reduced errors, faster goods movement, better supply chain visibility, minimal data entry, space
A screen shot of a warehouse management tool
October 2010 | www.logisticsweek.com
WMS software packages are customized to serve the sectors they cater to. ERP-based WMS usually go to warehouses attached to factories. Heavily automated facilities also have a warehouse control system (WCS) that controls conveyor belts, carousels, and other materials-handling systems. Retail-Warehouse management systems are implementing automatic data detain and identification technology, such as mobile computers, barcode scanners and RFID. These can professionally supervise product flow all through the warehouse. Some modules in retail WMS include: inventory management, labor management, cross-docking, yard management, multiple inventory ownership, billing & invoicing and voice-directed distribution. Larry Sweeney, Senior Vice-President, Strategic Markets of Vocollect, a developer and manufacturer of voice solutions for mobile workers worldwide, says, “Vocollect Voice provides the "process logic" that directs a warehouse employees to perform functions with accuracy. Vocollect Voice frees the workers' hands and eyes allowing them to completely focus on their work and communicate with the WMS system using the most natural form of human communication, which is voice.” For the pharmaceutical market, monitoring the usable life-end date is a priority. A WMS for pharmaceutical company should eliminate errors in prioritizing dispatch of goods with time critical shelf-life. WMS’s in this case should cover the entire warehouse, from designing the shelf system, to deploying a complete IT system. Most of the traceability and quality assurance requirements will be similar to food & beverages, at least at SKU and box handling levels. A cold chain WMS needs to include all stages of perishable product movement, whether the goods are in-transit, in process, in-storage or on-display.
< technology commonly Used terms in WMS 3D bar code
Three-dimensional bar code based on a physically embossed or stamped set of encrypted data
Advance Shipping Notification (ASN) is an EDI transaction sent ahead of the shipment listing all information
Receiving goods in a DC without any PO or ASN
A physical method of counting/verifying inventory levels in a DC
Perform an operation based on space availability at a location and the dimensions of an item
Pulling a set of component items from stock to group them for movement
Programs that convert demand into planned orders
Movement of received goods during distribution to a storage area
Return Material Authorization (RMA)
A document that governs the RMA, including quantity, amount, and timing
Transport Management System (TMS)
A software designed to manage transportation operations
Warehouse Information Network Standard(WINS)
Uniforms EDI standard used in the warehouse industry and compatible with UCS Communications Standard.
Warehouse Control System (WCS)
A software used to control automated systems in the warehouse
Instead of orders moving from one zone to the next, all zones are picked at the same time and later sorted
Yard Management System (YMS)
A software used for overseeing a company’s yard and its dock doors
Order picking method where a warehouse is divided into several pick zones and order pickers are assigned a specific zone
WMS solutions can also be stand alone, like those supplied by RedPrairie, Infor, Manhattan Associates or be part of an ERP application as in the case with warehouse management solutions from SAP, Oracle and other IT solution providers in the domain. Firms like RedPrairie over the years have gained strong ground when it comes to servicing sectors pertaining to FMCG, while Infor
Screenshot of WMS on a handheld device
October 2010 | www.logisticsweek.com
and their solutions have etched their presence in the 3PL segment. According to Steven Katz, VP (Sales & Marketing) at 3PL Central, a company offering WMS solutions exclusively for 3PL players, "On-demand WMS is the ultimate solution for a 3PL’s business model since it reduces high up-front setup costs associated with deployed WMS and is paired with the pay-as-you-go needs which align with 3PL's revenues." The Indian logistics industry stands a lot to gain with the implementation of GST. Though delayed by another year, elimination of taxes such as octroi and dual taxation will facilitate seamless credit across the entire supply chain and across all states under a common tax base. Gautami Seksaria, founder & partner of Supply Chain Leadership Council says that “GST will encourage an acceleration of the adoption of a hub and spoke distribution model
which tends to require larger but fewer warehouses.” Larger warehouses with large number of SKUs justify the costs of setup, installation and subscription fees of a WMS. India is in the process of building some of the largest warehouses with most modern WCS and WMS systems.
hits And Misses But companies implementing WMS must plan out accordingly the features they need and the time it can take. Otherwise there could be mishaps. Take the case of adidas. According to Supply Chain Digest’s “The 11 Greatest Supply Chain Disasters,” in 1996, adidas tried to implement first one and then a second warehouse management system at its Spartanburg, SC, distribution center. The troubles were caused in part by adidas insisting the Integrated Software Logistics Engineering’s
Unix-based system be ported to its fault tolerant Stratus computers. They couldn’t make it work, and eventually the project went belly-up mid-way. adidas went in for another vendor. The DC also featured heavy automation, requiring extensive logic and integration in the WMS. Frustrated by long, interminable delays in the project, adidas decided not to wait longer and went live before the system was ready. The system didn’t work, and adidas was unable to process and ship orders. It took many months to get the system up to full speed. As a result, adidas suffered major market share losses that persisted for a long time, while IT and logistics staff left the company in droves. But there’s a sunny side too. DSC logistics, a third-party logistics provider (3PL) with a presence across the United States, decided to deploy WMS solution from RedPrairie to
On-demand WMS is the ultimate solution for the 3PL’s business model since it reduces the high up-front setup costs associated with deployed WMS and is paired with the pay-as-yougo needs which align with 3PL's revenues.” — Steven Katz, VP of Sales and Marketing, 3PL Central
provide greater value to customers. With about 2,000 employees, DSC wanted to improve quality, accuracy, employee retention, and productivity. RedPrairie provided a comprehensive workforce management solution consisting of engineered best practices and standards, change management consulting, and advanced labor management software for real-time performance monitoring and reporting. DSC went live with the first site in October 2005 at its McDonough, Ga. distribution center near Atlanta. The result was an over 20 percent improvement in labor utilization, 100 percent performance standards in 6-8 weeks, and employees enabled to meet objectives. The benefits of implementing WMS offers tangible as well as intangible benefits. However, implementation must be after careful consideration of requirements, scale of operations using a well planned phase-wise approach.
October 2010 | www.logisticsweek.com 33
< Cover Story
A view of Spencer's Retail outlet at South City Mall in Kolkata
October 2010 | www.logisticsweek.com
method in motion
Amit Mukherjee, Vice-President (IT and supply chain) and Group CIO at RPG, has been working steadily for the last three years towards consolidating the supply-chain and is deploying some effective strategies, discover Aanand Pandey and Jayashree Mendes INDIA |
October 2010 | www.logisticsweek.com 35
< Cover Story
or a generation fed on malls, technology, and mobile phones, it is only necessary that markets bring forth creations and products that can satiate them. Fortunately, lots of people are doing that. Businesses are not content with adopting new technologies alone, they are also seeking out new models of doing business — profitably. Kolkata-based Spencer’s Retail is a fine example. And the man at the helm of RPG Spencer’s Retail Limited, Amit Mukherjee, Group CIO at RPG and Vice-President (Supply
SCM Highlights No of stores: 200 (10,000 – 40,000 sq ft) No of warehouses: 17 No of distribution centers: 2 revenue: `1,100 crore employees: 300-plus Suppliers: 3,000 LSPs: L.G. Brothers, Quick ‘N’ Safe, AFL, Spear Logistics, and several local players SKUs: One lakh at larger stores; 10,000-14,000 at smaller stores Inventory turn: 45-47 days technology Provider: SAP IS Retail
Chain & IT) – an organization ranked in the top five retail companies with revenues of `1,100, and part of the `17,000 crore RPG Enterprises – offers an understanding. Mukherjee should know. Since the mantle of Spencer’s supply chain came to him in January 2009 [he joined the company in September 2007 as VP (IT)], he continues to incorporate several changes in its supply chain through calculated use of IT. The changes are much-needed in keeping with Spencer’s decision to consolidate its position, introduce brands offering high margins, not to mention opening more hypermarkets, etc. The company plans to acquire good properties at the right locations when the opportunity presents itself. As one of the earliest entrants in the retail space, it was the first ever to open a hyperstore in India at Hyderabad in 2000. The retail company, operating in nine geographies, has about 200 stores ranging from 10,000 sq ft to 40,000 sq ft, including 30 large format stores that focus on verticals like food and
Extensive use of IT is helping Spencer's Retail run operations smoothly, while utilizing Planogram offers visual delight in the way goods are arranged. 36
October 2010 | www.logisticsweek.com
grocery, fruits and vegetables, electrical and electronics, home and office essentials, garments, and personal care. Goods are sourced from 3,000 suppliers across the country and over 7,000 professionals specially trained to meet consumer needs and the business objectives of the organization help in the daily functioning of the company. The logistics of handling the people, timing, and location can indeed be a subject worth perusing.
the Man And the Method Mukherjee’s track record at wellknown companies handling critical functions of IT, production, and services has stood him in good stead in the current capacity. After working with Tata Steel, handling several functions, for nine years, Mukherjee moved to SAP India as senior solution architect. He then moved to Reliance Energy as additional VP (IT) for a year-and-a-half. Before moving to RPG as CIO, he did a short stint with another technology company, Hewlett-Packard’s service division. There’s something about people
our supply chain ensures constant availability of products, while keeping inventory at a bare minimum. Amit mukherjee, Group CIO at RPG and Vice-President (Supply Chain & IT) Spencer’s Retail Limited.
overseeing technology at organizations. They tend to change the nature of a workplace and the company. In his words, “Last 7-8 years, I have been in the ERP space and primarily in SAP’s multiple industry solutions. My core competency is my ability to strategize on the IT front, with re-
spect to the business or the customer or the organization needs in terms of design and implementation.” Keeping with this, Spencer’s has a well thought-out supply chain design. Mukherjee says, “Our supply chain ensures constant availability of products, while keeping inventory at a bare minimum.” Wizened through the months of the recent recessionary churn, the team keeps a hawk eye on cost. “There are several constituents to the cost.
One is the warehouse cost, which includes manpower, rentals, electricity, advertisements, etc. The second is the freight charges incurred in moving goods, and the third is shrink, a term we use to refer to inadvertent losses incurred due to associate error, theft, process loss, etc. This needs to be kept at a minimum.” For smooth functioning, Spencer’s insists that its routines are driven through systems and processes, be it warehouse management or the
The retail chain plans to increase trading area without adding warehouse space in the near future.
October 2010 | www.logisticsweek.com
< Cover Story
Going forward, private labels are expected to contribute more to the company's bottomline.
replenishment model. The effect of following systems has made Spencer’s into a leaner organization. Since the last year, the company claims to have not only halved losses, but also improved margins by 200 basis points to take the margins to the current 19 percent. The retailer also pulled off its goal to increase revenue from per square foot to `900 from `811 in March 2010, an exercise undertaken about a year ago. The same store sales are growing by 13 to 14 percent. Its biggest achievement has been the break-even at the store level, says a company spokesperson. About the positioning of the retail chain, Mukherjee says, “We don’t operate on everyday low pricing platform and neither are we on the premium layer. Our strategy takes into account various parameters like quality of products, merchandize spread and depth, international and informed shopping ambience we offer our customers. If we are compared on these parameters with other Indian retailers, we are superior, yet our prices are extremely competitive, though not necessarily the cheapest.”
Stock-n-Store For a company that has found a meth-
October 2010 | www.logisticsweek.com
Spencer's tech ecology
pencer’s Retail uses the various modules of SAP to run its supply chain. The module used is SAP IS Retail ECC 6.0 or SAP SD. Spencer’s uses SAP SD, SAP MM and FI, SAP HR, and SAP PS. All the modules run mainly on SAP SD. SAP MM (Material Management) is mainly used in the case of a third party order process and invoice verification, while billing is an SD function. When a sales order is created in SD, the details of the items are copied from MM. So also MRP and availabilitycheck related data is taken from MM, which can also be controlled in SD. At a time when a retail
od, managing efficiencies is the next step. After taking over, Mukherjee directed his energies to reducing and keeping costs low. Primarily, warehousing costs account for a large portion of retail supply chain. So it is necessary that it maintains minimum DC space. Mukherjee says, “We need to understand the amount of inventory level and the optimum level of stock required, so that there are no stock-outs. I am also keen that we do
chain creates inbound/outbound delivery with reference to a sales order, the shipping point is determined with the help of the loading group, plant data, shipping conditions etc. This refers to Material Master. Whenever a delivery order is made to a sales order, goods movement takes place. This movement is configured in SAP MM, and also in SAP FI. The accounts posted in FI is done with reference to the billing documents (invoice, debit note, credit note etc) created in SD. Forecasting, replenishment, distribution to stores, are all functions handled by SAP IS Retail.
not over-stock our stores, since cost of stocking is higher at stores than at the DC.” The company’s large stores already have stock-keeping units (SKUs) of about a lakh, while it ranges from 10,000 to 14,000 at the smaller stores. “So there’s a fine trade-off one needs to do at every point, and find the most optimum solution. It all depends on our priorities at that point in time. Another objective is keeping warehousing costs proportionate to the freighting area. Remember, we are talking of finite resources,” he adds. The supply chain has two mother DCs —a modern 80,000 sq-ft mother DC at Gurgaon run and managed by a third party, and an import DC at Bhiwandi in Maharashtra. The 17 regional warehouses are managed in-house. The company has a strategy for movement of different kinds of products. For instance, at its Kolkata warehouse, based out in Dankuni (40 odd kilometers from the city), FMCG products and staples are moved from the DC to the store; while perishables and frozen items are routed through direct supply model. Garments follow hub-and-spoke and are directly moved from the mother DC to the store.
< Cover Story Mukherjee says, “Our strategy for each region hinges on the vendor capability of that region. In Eastern UP, we have a warehouse in Lucknow, and stores are based in Benares and Gorakhpur. The strategy here would be unlike that adopted in Kolkata or Bangalore where distances are much shorter.” Spencer’s has tied up with several local LSPs and transporters to move its goods. Some well-known ones are L.G. Brothers, which man-
Spencer's follows the Japanese practice of 5S at some of its DCs.
age the road transportation; Quick ‘N’ Safe attends to the distribution network through hub and spoke and multimodal transportation; AFL offers warehousing and logistics services; Spear Logistics offers warehousing services, and there are also several other local players. The retail company has adopted the Japanese practice of 5S at some of its DCs. The 5S concept for retail would entail: a) Sort (Seiri in Japanese) – the first step in keeping stocks organized b) Set in order (Seiton) –Identify and arrange the goods on the shop floor c) Shine (Seiso) – Regular cleaning and maintenance d) Standardize (Seiketsu) – Allow quick access of goods to buyers and e) Sustain (Shitsuke) – Maintaining what has been accomplished. It has also begun ISO certification October 2010 | www.logisticsweek.com
program for the DCs as well. An advantage of operating locally has enabled the retailer to shrink the size of its facilities. So it moves its chill and frozen goods in igloo boxes (using dry ice), which maintains the temperature for 6 to 7 hours, long enough for the goods to reach the store.
Springing Into Action Inventory turnover plays an important role in understanding how prod-
ucts sell, and the next shelf fill rate. On an average, Spencer’s has an inventory turn of 45 to 47 days across most product categories. The buying function at retail outlets mainly depends on effective demand and supply forecasting. There are six to seven parameters it follows. The supply chain forecasts are based on factors such as buying history, the time of the month and the category of product. For instance, the early part of the month sees more footfalls. Weekends are usually hectic so that has to be taken into account. Keeping track of seasonality, holiday factor, trends, and promotions are other factors. For replenishment, Spencer’s takes recourse to three strategies that run through the entire system: a) Flow-Through b) Put-away, and c)
Direct-to-Stores. Flow-through helps centralize inbound shipments, sorts them by delivery destination and then sends them out – all on the same day. Used mainly for fast moving goods, this eliminates the need for fixed assets (like warehouses), reduces the dependence on high inventory levels, and improves the time it takes to get the product to market. Flow-through centers use enhanced information technology to move cartons from inbound to outbound trailers. For up-market retail companies, this model helps reduce inventory levels and improves ability to refresh shelves more often. Especially for non-seasonal SKUs, retailers can cost-effectively replenish distribution centers with smaller order quantities on a more frequent basis throughout the year. Put-away is the process of moving material from the dock and transporting it to a warehouse's storage, replenishment, or pick area. Best practice companies use WMS to manage the cross-docking, which is the process of moving specific products to support an open order or replenishment request, with minimal handling and delay. An efficient practice here would be to put-away directly from receipt to its final location, as this uses the least space for staging and the product is handled less and ready for use sooner. Spencer’s has about 300-plus supply chain employees across the country. In the third strategy, Direct-toStores, vendors supply directly to the stores. The entire strategy is one that is based on the forecasting model, and on certain parameters – one way that ensures no manual interventions and thus reduces inefficiencies. A good retailer also knows that proper placement of goods is essential for increased sales. By analyzing past and current sales pattern, it uses planograms to assist in space planning.
g rMi er P aM P w M vav P ewa MiN Ner Por Te NTaiNaPaTN rT Ne PiPa g? gaT y TeroNTai TNaM T Ne Co iSHN ao Po PorTNdliN aTewa Nai C HNaPao Por Po kr rMug aMraal Ha dia g CHeN kriS Muga aMra Ma rT dHaTeri ed iNMiTed PorT T Mar rT dH Po PT M liMiTalS li Ndra a PorgHi PoN u Ndl T di present i you JN ivLOG.India Te rMiN and MLogisticsweek r a o M a C r i a PrCal Te PaTN abg kal Po a TuT toraPerformance Excellence’, a ik iP go Ha PorT a Si Sa‘Roadmap k k arad on Indian Ports. vi Mbai orHandbook T Mu CHi P PorT P ko ldia Ha The handbook looks into all the issues related to the major Indian ports with experts’ views of a roadmap to possible solutions for ports infrastructure and performance excellence. The main topics to be covered will be:
a OOK i d n I s o f NDB HA
g n i s u eho
• Need for Mechanization at Indian ports • Draft Constraints (which hinder entry of large vessels to most major ports) • The Policy Conundrum • Regulatory Issues (The TAMP Factor) • Labor Management at Ports • PPP: Challenges and Opportunities • Major and Non-Major ports: Lessons to be Learned • Epilogue
n! DBOOK o o S g HAN Comin
our Y k o o B w! o N y p Co
Book your copy NOW and avail of the early bird discount Email: email@example.com
We Transport Information www.logisticsweek.com
< Cover Story Planogram is a visual diagram that details where every product in a retail store should be placed. These schematics not only present a flow chart for the particular merchandise departments within a store layout but also show on which aisle and on what shelf an item should be located. To give an example, in the case of vegetables, hard vegetables like potatoes
The replenishment strategy of the retail company of putting SKUs on flow-through has helped it reduce DC space.
should ideally be kept at the bottom and soft, leafy ones at the top.
Wiring the System It would be impossible for any large retail chain in India to function without the extensive use of technology. The market has much to offer. Some common technologies in use are warehouse management system (WMS), ERP (enterprise resource planning), merchandise management system (MMS), automatic store October 2010 | www.logisticsweek.com
replenishment model (ASRM), automatic warehouse replenishment model (AWRM), etc. The right technology can not only help reduce cost, but also errors. Spencer’s warehouses use scanners and bar-coding at its Point of Sale (PoS) system. A mix of ERP solutions integrates all the functions from warehousing to distribution, front and back office store systems, and merchandising. Advanced Planning and Scheduling Systems (APS), used for supply chain planning. It helps support decisions thus resulting in significant improvements to supply chain order fulfillment, cycle time and cost efficiency. Spencer’s Retail uses SAP as the legacy system at most of its stores. It uses mainly SAPZone for bill-value and time analysis. It also uses MySAP Business Warehousing BW 7.0 and BusinessObjects for analytics. Most of the supply chain IT infrastructure was heralded by Mukherjee. It is technology that helps the retail company keep costs low. Its replenishment strategy of putting SKUs on flowthrough has helped it to reduce DC area through cross-docking, since goods will not be required to be stocked in the DC for long. The chain works this way: Less stock in the DC means lesser workforce required for the job. A smaller workforce means reduction in operational expenditure cost. Mukherjee admits, “At times we (the supply-chain managers) do get carried away with some of the supply chain management (SCM) objectives, but the larger objectives of business also have to be kept in mind. SCM is part of the larger business. There could be situations when SCM objectives are compromised on, but then it addresses a bigger and larger organizational objective, which we need to keep in focus.” However, Mukherjee is clear about one thing — maintain minimum inventory thus reducing storage space per DC. “Sometimes to lose on availability of goods might not be fatal. From the sales point of view, I would
rather err on inventory than lose on sales. So that’s a fine balance one needs to manage,” he adds. Predictably, our next question would be usage of RFID. Mukherjee draws some conclusions. “I tried a pilot with RFID. It was not much of a success.” Spencer’s would have liked to use RFID in moving materials from the DC to stores, especially the ones with high shrink areas. “And see what is the shrink I would have been able to arrest,” he adds. The company did try out RFID at its Andhra outlet. However, the amount of investment paled in comparison to the cost expected to save. “As a user industry, there is little clarity on adopting RFID at the right places and time, apart from the theory. There needs to be a set of protocols for RFID to work well. That is yet to happen.” For a technology to become fashionable, it must justify the costs. Unfortunately, vendors and service providers dealing in RFID need to throw more light as to how RFID can work well from an application perspective.
Moving Goods Managing the logistics of the business is every retailer’s immediate problem. Large amount of stocks have to be moved on a regular basis from the DC or the warehouse to the store. Most of the time, the goods have to travel across states as one warehouse caters to several neighboring states. Spencer’s continuing drive to keep costs low has in fact pushed up its warehousing space, with the result that it has 17 warehouses across the country, managed by the company. But it has reduced the long haul movement of goods to smaller distances with the help of the local service provider. Mukherjee says, “Our transportation is the milk run kind. Operating on fixed contracts, we gauge the cost versus kilometer the service provider can offer.”
The per-cubic utilization of space is estimated on the type of goods being moved. The volume dimensions of moving plastic balls or buckets vis-à-vis F&B (foods and vegetables) are different. So perishable goods are sourced locally or from farms and cooperatives that Spencer’s owns or has tied up with.
on the Double Mukherjee has had his task cut out. During the last two years Spencer’s has been on a consolidation path that requires rationalizing retail presence and operational cost. The method is internally referred to as 2/3/20 which the company has decided to adhere to for the next two years. The ‘2’ in the formula refers to the target of doubling the trading area from one to two million, ‘3’ refers to trebling the sales revenue from the current `1,100 crore to `3,300 crore, and the last numeral is about growing the store profitability by 20 times. Spencer’s plans to achieve this through some well thought out measures. It will essentially focus on large format stores in select geographies and enhance the ratio of trading area from 45 percent to 65 percent. Since private labels can be a high margin vertical, the retail company expects to rake in 25-30 percent individually from the current 10-15 percent. The program also seeks to adopt higher IT-enabled processes to help reduce shrink totaling to about 4.5 percent of revenue and build a consistent, enterprise-wide real time platform integrating all the major entities of the retail business. These measures, it expects, will improve customer experience with services built on an infrastructure underpinned by loyalty management platforms and demand intelligence. For supply chain and customers, Spencer’s Retail plans to forge closer ties between assortment planning and space planning, merchandizing and supply chain, while leveraging data warehousing and
data mining that can help customers try out special features like personalized promos, and on-the-go product information. It will also utilize advanced consumer intelligence, mobile and self-service capabilities for the omni-channel shopper, an evolution of the multi-channel consumer, who wants to use all channels - store, web and mobile. Mukherjee says, “We want to see how we can cater to a larger trading area without adding warehouse space. We also want to make the automated replenishment system more robust, so we can maintain leaner inventory at a higher rate. We need to improve on our forecasting model and promotion factor which could have an error that could be as high as 20 percent. So we tweak the model. The best of class models typically operate at 12-15 percent. That’s the kind of improvement we are looking at.” Spencer’s is also focusing on its private labels for increasing the product assortment and enhancing the range. It plans to tweak the current range to shift 10-12 percent of its offerings to higher contributing items to raise the share of private labels in company revenues. Currently, private labels contribute 15 percent to revenue. It is looking at increasing this to 30 percent. The company’s SCM policy plans to address the overall sales revenue without adding much warehouse space. It is also relying on the implementation of goods and services tax (GST) that would help them reduce DC space. He adds, “Today we operate with short hauls from warehouse to stores. But lesser DC will mean long hauls. So we might have a central DC in Chennai that would cater to even Bengaluru, so the lead times would be different as we’ll have to seek out bigger transport operators.” So how does the company keep its 3,000 suppliers happy? Mukherjee says, “We have rated our vendors into ABC categories. For the A vendors, we
A SAP Module Framework Integration Points
Sales Order Availability Check
Transfer of Requirements
Delivery & Goods Issue Availability Check
Reduces Inventory $
Billing Debit A/R
Updates G/ L (Tax, discounts, surcharg- FI/ CO es, etc.) Milestone Billing
return Delivery & Credit Memo Increases Inventory
Updates G/ L
Adjustment to A/R
would like to give them access to our in-house built portal, so they check for all transactional details. We are also looking at giving them facilities to conduct transactions. The facilities are narrowed as we move to Group B. With them, it could be only information dissemination. For the future, Spencer's plans to move to VMI (vendor managed inventory), thus automating DC operations. Mukherjee says, “Today one of the biggest problems in the DC is that vendors come in and bunching happens. The turnaround time of the vendor increases. I want to move into a system be able to give him timely maybe hourly appointments. I want to be able to give him time at that hour so that I can evacuate. And this should be automated.” And so the method continues. Till it is made perfect. INDIA |
October 2010 | www.logisticsweek.com 43
needed: A blue Revolution
Inland waterways are not only a clean and green mode of communication, they also contribute immensely to the nation’s economy. H B Ganguly, Vice President, (Hydro), Jindal Power Limited, reports
t is no coincidence that good and effective inland waterways have a correlation with development. Being a clean and green mode of communication, inland waterways make an immense contribution towards the economic well-being of a nation. A developed nation invariably has a good system of waterways for the transportation of goods and the country’s population. The US and various European nations have such effective river systems linked by canals that most of their power plants and manufacturing units of heavy equipment are located along these waterways.
October 2010 | www.logisticsweek.com
Alstom, a major original equipment manufacturer (OEM) in the power equipment business, recently inaugurated a plant at Chattanooga on the banks of the river Tennessee in the US. The company stated that the new plant was located at Chattanooga because 80 percent of the nuclear power plants in the United States, which are ageing and need replacement, can be reached only by barges. “The largest turbines that we will be making in the new factory can use the waterways for transportation and thus having an on-site river dock is a tremendous advantage” said a spokesman of Alstom.
So why does the developed world like inland water transport (IWT)? Because it is very economical when compared to other modes of transport like air, road and the railways. IWT consumes far less fuel per tonne per kilometer than the other modes. Thus it is green and clean and all these attributes, along with the fact that it is value for money, has made IWT a favourite mode of transportation in other parts of the world.
Dogged By Problems Despite being blessed with innumerable rivers some of which are big and others small, there are just three
waterways which are navigable for small vessels, while another three are under development. However, these waterways are plagued with many problems, with the result that industries prefer to use roads and railways to move their merchandise. Indians it appears, have so far not desired to use waterways for transportation and have only thought of using waterways for other purposes like irrigation, drinking, and industrial use. This has resulted in our policy makers planning projects keeping only one of these issues in mind and not taking a holistic view which would include transportation over waterways in India. During the British Raj some locks were constructed by the British in certain locations, for example, on the river Sone at Dehri-on-Sone in Bihar. It is believed that the Sone witnessed transportation on its waterways during that period. But these locks were abandoned in free India and left to rot. No effort has been made to preserve these structures for future generations. Many mega projects have been constructed on the Narmada, Krishna, Godavari, Cauvery, Yamuna, Mahanadi, Brahmani etc. but IWT does not find a place in these schemes. In recent times, however some efforts are being directed towards the development of some portion of the Brahmani, Krishna, Godavari and Narmada rivers for transportation.
Facilitating Water transport The government of India by an act of Parliament in 1986 set up the Inland Waterways Authority of India (IWAI) for the sole purpose of facilitating the Inland Water Transport system (IWT), albeit belatedly. In 1986 itself the Ganga-Bhagirathi-Hooghly river system connecting Allahabad with Haldia (near Kolkata) was declared the National Waterway No 1 (NW-1). In 1988 the Brahmaputra river from
Dhubri, on the border with Bangladesh, to Sadiya, on the banks of the Lohit, Arunachal Pradesh, was declared National Waterway No 2 (NW2). The mandate of IWAI is to maintain a minimum least available depth (LAD) of 1.5m in a navigational channel of 45 meters for 330 days in a year in both these national waterways. In 1993 the west coast canal from Kottapuram to Kolam was declared NW-3 with a mandate to maintain a 2 meter LAD navigational channel. A few more national waterways are proposed on the east coast and Barak, river, near Bangladesh. Besides these waterways, India signed an agreement with Bangladesh by which Indian vessels can now use the waterways of Bangladesh to approach the river Brahmaputra. By this Indo-Bangladesh Inland Water Transit and Trade Protocol, inland waterways transportation is possible between NW-1 and NW-2.
Poorly Funded Much water has flowed down these national waterways after the formation of the IWAI but the share of inland water transport vis-à-vis other modes has not improved. The reason is basically the proverbial chicken before the egg situation where the state is not ready to pump in funds because of low traffic and industry is not using this form of transport because of improper facilities coupled with low draft in the waterways. IWAI was formed to improve, facilitate and regulate the IWT, but has not been able to do much primarily because of poor injection of funds in this sector and lack of jurisdiction over the waterways. IWAI has been charged to carry out duties on the waterways, but does not have the muscle to implement its authority over the waterways. An example of this lacuna is that it cannot even remove fishing nets on these waterways because the law related to this issue is a state subject.
The waterways in India are thus at the mercy of nature. The river water levels and the LAD are dependent on the water catchment and is seasonal in nature. Besides variations in LAD, inland water transport operators in India encounter high river currents during the monsoon. The high currents during the monsoon make vessel movement up the river sometimes near impossible and vessels have to be berthed as they are unable to move despite providing full throttle to engines. INLaND WaterWaYS IN INDIa National Waterway No 1 (From Haldia to Allahabad) National Waterway No 2 (From Dhubri to Sadiya) National Waterway No 3 (From Kollam to Kottapuram)
LeNGtH 1620 km 891 km
East Coast canal along with river Brahmani and Mahanadi delta in Orissa and W. Bengal
Kakinada – Puduchary canal along with Godavari and Krishna rivers
River Barak in Assam
Deep Siltation The monsoons bring high floods in the waterways. The rivers in spate are loaded with tons of silt. When these rivers leave the hills and enter the plains the current gets reduced. This causes the rivers to deposit the silt on the river bed. The river bed level rises and leads to the formation of what is called “chars” or islands of sand. These chars or islands are not permanent. They may be present at a particular location this year, but may vanish the next year and another one may be formed a few meters downstream or upstream. These island keep shifting year after year. The siltation of the river bed and char formation cause the rivers to attack the banks and eat away acres of fertile land. This often leads to displacement of population and loss of employment. Many INDIA |
October 2010 | www.logisticsweek.com 45
tea gardens in the Brahmaputra valley in Assam are a victim of this phenomenon. Every year the Brahmaputra inches its way into these gardens and some feel that the Dibrugarh airport may soon become vulnerable. Rivers which change their course is another phenomenon which has been noticed in the lower reaches. This creates havoc for the local population and also destroys economic activities of the area. In the process, transport gets totally dislocated in the waterways and takes much time to be restored. Bends are present in all rivers across the world. Bends always present a problem to inland waterways. The bending radius is very critical in IWT
China which was as underdeveloped as India during the fifties has learnt her lessons well. the country is investing heavily in infrastructure and this includes developing facilities for waterways. and is very important especially when a train of ‘dumb’ barges are towed by a set of tugs. As per IWAI, bends which are present in NW-1 and NW-2 restrict the length of barges to 90 meters. Amongst the waterways, the Sunderbans section which is a part of the Indo-Bangladesh Protocol,has the most critical bends. In India, bridges across rivers have been constructed in most cases without taking into account the needs of the IWT. Hence there is a height restriction on most waterways. IWT operators may have to carry out a survey of the section they will operate when the rivers are
October 2010 | www.logisticsweek.com
in spate to determine this restriction for a particular vessel in that section. Thus inland waterway transporters face many constraints. In addition, added to the difficulties of low LAD, is the siltation of river beds, chars and channel flows, dimensional restrictions, etc. Operators thus are forced to employ pilots as no vessel is able to ply the national waterways without their aid. This adds another dimension to the woes of the IWT operators. It may be mentioned that trained pilots are not easily available and further the pilots of NW-1 may not be suitable for NW-2. There is no doubt that the IWT is the most suitable mode of transportation of specifically Over Dimension Consignments (ODC), especially to Assam and Arunachal Pradesh. The dimensional restriction on bridges and on roads leading to the north-east makes inland waterways a preferred mode of transport. However, operators will have to keep the above impediments in mind when dealing with waterways. It may be worth mentioning that in the section of the waterways where the LAD is low like Patna to Allahabad of NW-1 and Dibrugarh to Sadiya on NW-2, operators may have their vessels/ flotillas preceded by a dredger to clear the bed of silt and thereby increase the lowest available depth of the waterway. With this arrangement, vessels with cargos moving up or down the national waterways can avoid getting grounded in rivers. It is well-known that refloating grounded vessels takes time and money, so such arrangements are worth the penny.
Lack Of Landing Sites Harbours and landing locations for vessels is another issue of great concern. Very few places along NW-1 and NW-2 have proper berthing arrangements for vessels. Very often there are no berthing arrangements on the waterways. As the river water level keeps moving up and down
and the river line keeps shifting, the berthing points also keep changing at these locations and since the berthing points change frequently, no approach roads are available at these landing stations because no permanent vessel landing point is possible. People are left to utilize whatever is available to them. China which was as underdeveloped as India during the fifties has learnt her lessons well. The country is investing heavily in infrastructure and this includes developing facilities for waterways. One of its most prominent rivers, the Yangtse, was navigable over long stretches for centuries. When China decided to build the Three Gorges Dam by the town of Sandouping in the Hubei province, it did not allow this huge dam to disturb the navigation in the river. The Three Gorges Dam is a hydroelectric dam that spans the Yangtze River and stands 185m high and 2,309m wide, making it the world’s largest hydro plant with a generation capacity of 22,500 MW with 32 generators of 700 MW and 2 generators of 50 MW. The future of India lies in using engineering skills and knowledge in analyzing the problems of national waterways to ensure that they conform to international standards. In this endeavour, assistance should be sought from the developed world where IWT has been successfully organized. Apart from this the internet can also provide useful service. A huge data bank is available with the Mississippi and Danube river authorities which can be tapped and utilized for the development of waterways. Serious thought must be given and urgent action must be taken to fully tap the potential of India’s waterways. This is an abridged version of an article which will appear in Log.India’s Ports Handbook 2010. The author can be reached at firstname.lastname@example.org.
Taking The High Road VRL Logistics is on a high. The company has received far too many felicitations in the last couple of months. In June this year, VRL Logistics Ltd., a leading player in the logistics Industry, pulled off a double whammy by winning two awards at the Ceat India Road Transport Awards 2010. The two categories in which VRL Logistics Ltd bagged awards are: Ceat India Road Transport National Award for Environment Conservation; and The Ceat India Road Transport Regional Award for Operational Excellence. While the people of Karnataka are proud of the company, other companies can take a cue of taking care of the environment that we are all so dependent on. The award can go a long way in raising awareness among the corporate houses that even they can do something for the society. Vijay Sankeshwar, Chairman, VRL Logistics Ltd., said that “the journey so far has not been easy and it has been made worthwhile with all the rewards and recognitions that are coming our way which testifies that our pursuit of excellence is being noticed, not only nationally but abroad as well. The prestigious Ceat India Road Transport awards, advised and tabulated by Ernst & Young motivate us all over again to deliver excellence consistently.” VRL Logistics Ltd has the largest fleet backed with three decades of trust. The driving force behind the success of VRL Logistics has been its commitment to live up to the consistent trust shown by patrons and associates over these years. VRL
provides its customers with an entire bouquet of value-added services that comprises road transportation, express cargo movement re-distribution, courier services, passenger transportation & warehousing. On another occasion, VRL Logistics was awarded the “New Era Award for Technology, Innovation and Quality” by the selection Committee of ‘OMAC’ (Other Ways Management and Consulting Association) in recognition of its achievement in quality, excellence and total customer satisfaction. Vijay Sankeshwar received the award, along with Lalitha Sankeshwar, on behalf of the company at an award-giving ceremony held in Paris, France. With pan-India services in 18 states, VRL Logistics has established a strong network of 1,000plus branches to cater to the evergrowing customer demands and needs. Over the last three decades, VRL Logistics has estab-
lished itself as a front-runner in the logistics space. The company credits that this evolution would not have been possible without the vision, a willingness to embrace change, a strong capacity for innovation and acute awareness for customers growing requirements. At VRL Logistics Ltd, exhaustive data and records can be accessed over a period of time, which is a boon for corporate houses. At the core of the groups transport business is its gigantic 43-acre transport-cum-warehouse complex in Varur, Hubli. This unique facility has all the essential back up services under one roof. The total built up area of complex is 5,00,000 sq. ft. with an additional 1,00,000 sq. ft. of land utilized for sheds, etc. VRL Logistics has a strong and dedicated operations team monitoring an impeccable efficiency in handling precious cargo and ensuring on-time deliveries. It has dedicated containerized route vehicles supported by an online track and trace facility that ensures delivery on time. The operational efficiency is well supported by 12 regional offices and 40 hubs.
Know Your Constraints
Supply chain managers need to retool their transportation policies. Sujay Jha, Chief Executive Officer of Freight Nxt India, looks into some existing constraints that mar transportation efficiencies
n India, freight transportation is increasingly dominated by road unlike the US and China where railways plays a more critical role. And roads in India being what they are, it is increasingly difficult for transporters to navigate them. Transportation constraint is a major impediment to create logistical efficiencies for clients, as about 35 percent of the overall logistics cost can be accrued to this. So how do transporters ensure asset efficiency under such circumstances? There are several factors to this. In India, vehicles travelling long distances tend to be involved in line-haul operations. A line-haul operation is one where vehicles deliver full loads from the factory to a warehouse or a distribution center. This type of service could require 24-hour throughput creating huge limitations in service efficiency in case of one driver per vehicle. Vehicles have to handle multiple deliveries which are known as composite delivery operations. In India, vehicle loading is mostly manual and this impacts the turnaround time for customers. Forklift automation, for example, can minimize bottlenecks in loading. This will increase operational efficiency – albeit the cost of automation and capital expenditure could be higher initially.
October 2010 | www.logisticsweek.com
Managing operations manually is a poor excuse that some managers use, who argue that a labor intensive country should utilize labor for minimizing load balancing constrains. This scenario is vastly different from China which – with about the same labor advantage – has automated loading and unloading for long-haul and composite delivery operations. Transporters and logistics service providers (LSPs) are often faced with maintaining the vehicle economies in terms of miles per ton or miles per unit which is objectively still lower than the West. Agreed, our broad infrastructural roadblocks do need fixing, but this is mainly due to the lower productivity per mileage, due to extraordinary manual interface seen in the operations, without the use of right technology. Also, we continue to insist that telematics or global positioning is irrelevant to our situation. Most clients rely on a system of using non-dedicated vehicles or market-hired ones so the former’s control mechanism is still with a broker. Even transporters depend on brokers for more than 80 percent of their requirements. Such cases make it unfeasible to implement
technology to control pilferage in haulage operations. Even in hubs like Ghaziabad or Rudrapur, one needs to hire vehicles from the outskirts like Meerut or Panthnagar on a daily basis. Supply chain heads of companies who constantly use transportation would do well to use dedicated vehicles rather than hiring them from brokers. It is not infrequent to hear clients say that it is a common practice in India to use hired vehicles. But it is important to understand that the implications are huge when we use dedicated vehicles for running operations.
Poor Planning In my experience, quite a few Indian supply chain managers are not planning their transportation needs. They visualize a situation to reduce cost by applying pressure on transporters or 3PL companies typically at the end of the year when the management conducts reviews. Transporters become a good weapon for supply chain managers to reduce cost of per unit operations. They forget that even if you reduce the cost of operations the problems will not ease unless you completely root it out. So how does one root out the constraints? Big philosophies may not work but practical implementation sure does. Another area that is vexing for supply chain managers is the abrupt transshipments of loads on the long haulage route. This problem is not only on the long haulage, but even in the middle and short haulage route too. This becomes a conundrum in diminishing load scenarios where load minimization en route will happen on the same purchee (paper slip). Transporters have to make profit. So when the vehicle has left the clients premises, the transporter eventually loads the goods onto a smaller vehicle or into a larger one to consolidate load. Why does he do this? Mainly for his survival. Also because the present load mechanism does not support the cost per unit thus decreasing his gross margins. Clients, on their part, too are only interested in the output. India’s logistics cost is as high as 13 percent of production cost and clients must do all they can to seek out real cost reductions. Even a one percent reduction in transportation spend will have a major effect on the optimization of total cost of logistics to an organization. Another obstacle is the issue of risk. Security of goods is primary. But how many supply chain managers are asking questions on secured good transport? No formula can provide total security of goods in the Indian transport situation. Technologies like RFID or GPS can partly offer security from goods being stolen or damaged. A holistic approach of technology and manual integration of transportation will definitely bring in reduction of cost of ownership and an increase in productivity.
Industrial sectional doors with dock levellers and dock shelters
Everything from a Single Source: Logistics Solutions from Hörmann Intelligent solutions are called for wherever smooth work processes are needed. With Hörmann, you can find everything you need from a single source: dock levellers, dock shelters, loading houses and industrial doors. All are perfectly adapted to each other, providing you with the right system for any situation. Flexible high-speed doors with SoftEdge crash protection
Doors for Home and Industry
The author can be reached at email@example.com
www.hormann.in | | INDIA
October 2010 www.logisticsweek.com 49
call 1-800-102-DOOR • firstname.lastname@example.org
imperatives The globalization of clinical trials has made India an enviable destination for outsourcing, but operational efficiencies have to improve for increased profitability
Sanjiv Kathuria Country-Sales & Marketing Director, TNT India Pvt. Ltd
n the last few years the world pharmaceutical market has undergone remarkable and intricate changes. It is estimated that the development of a brand new drug needs an investment of more than $1.2 billion and takes more than 12 years to bring it as a finished, legally registered and approved product to the market. These estimates also take into account the opportunity cost of investing capital years before revenues are realized. This is at the same time a very complex, comprehensive and risky endeavor with no guarantee that the prospective new product will succeed and bring revenues. Imminent patent expiration and swelling R&D costs are forcing global pharmaceutical companies to revisit their operating paradigms. This has led to globalization of clinical trials and the spotlight is now on improving operational efficiencies to sustain profitability. Increasing profitability will boost outsourcing of pharma and research activities to low-cost destinations like India and China. The cost of conducting clinical trials in India is 40 to 50 percent of the cost in developed countries.
hot Destination There are approximately 150 contract research organizations (CROs) present in India currently and this includes almost all the top organizations operating at the global level. Most of these CROs have established world class research labs in India. India with its diverse genetic pool of patients, well developed medical facilities and skilled doctors has become a hot destination for outsourcing of clinical trials. Logistics is a key element of the clinical trial process. It subsumes 20-30 percent of the total cost of the drug discovery process. As clinical trial
October 2010 | www.logisticsweek.com
materials are sensitive to temperature fluctuations and are perishable in nature, the efficiency of the clinical trial will depend upon the efficiency of the supply chain in many ways because the integrity of the clinical trial material is of supreme importance for accurate and best results. Given its importance, the logistics service providers (LSPs) must be truly global and have established and robust processes in place to facilitate the storage and distribution of clinical trial materials. The LSPs must have specialized manpower trained to handle clinical trial material with extreme care. They must also have complete understanding and knowledge of regulatory and customs compliances.
the challenges Trials which are conducted in emerging markets like India present specific challenges. These include socio-economic issues, poor transport infrastructure, a complicated regulatory environment and lack of understanding by local authorities. Running clinical trials with less than ideal infrastructure is one of the biggest challenges being faced in the country today. Shipping large volumes of refrigerated patient kits while maintaining and documenting appropriate temperature conditions creates a demanding distribution environment. Given the large number of clinical sites, there is increased urgency for maintaining product quality and mitigating the risk of thermal excursions. This has further augmented the requirement of specialist logistics service providers with infallible and proven distribution processes to improve the performance of clinical trial supply chains. Many of the LSPs have responded to the changing market needs by building a framework of procedures and best
practices for clinical trial logistics specific to Indian conditions. This includes hiring skilled manpower and building facilities, cold chain networks and organizational infrastructure in compliance with global healthcare quality standards taking into account the fundamentals of good manufacturing practices (GMP), good distribution practices (GDP) and the international standards of ISO. Internal quality audit programs and checks to ensure continual logistics process improvements are a must to match market needs.
regulatory issues Most clinical studies are global in nature and transcend national boundaries which necessitates an understanding of local regulatory issues and multi-country customs and regulatory requirements. Before a trial begins the sponsor should work with a reputed LSP to identify which permits and paperwork are required. There has been an increase in the number of global regulatory and guidance documents issued over the past few years. The specialist LSPs also have a huge amount of information on specific customs and regulatory requirements which they sift through and advise the sponsor about. The LSPs hire specialists who have proficiency in handling multi-country trials and understand customs and regulatory requirements. They also provide advice on the best gateways to use for various clearances and also on the locations of storage facilities.
Planning For contingencies Keeping the supply chain intact and continuing the trial running even during contingencies is a critical requirement. The logistics of clinical trials has to be planned in a strategic manner detailing the exact, accurate and current requirements for shipping to each temperature zone. The idea is to reduce the possibility of error and mitigate the risks involved. Contingency planning is a key element for successful conduct of clinical trial logistics and the LSPs in this field need to have a crisis management plan ready in sufficient detail. Having control and visibility of shipments through the entire supply chain process is extremely important. Real time visibility of clinical trial material inventory and shipments is a very effective instrument which helps to make tactical decisions. The LSPs with their state- of-
the- art IT tools can help the sponsors by providing real time visibility thus ensuring continuity of supply. This ensures that the sponsors and CROs are able to focus on their core activities while leaving the rest to the LSP.
Strategic alliances While there is no commercial value attached to the clinical sample shipments, this is not a reflection of its importance in the drug discovery process. Being perishable in nature, samples lost or expired during the transportation process cannot be re-created and means loss of time with disastrous impact on the cost of the trial. There is no room for error and the expected service levels are close to 100 percent. The LSPs have a role to play by way of partnering with pharma companies and CROs for storage and distribution of temperature sensitive clinical trial material. These services of an LSP include shipping, warehousing, customs clearance, logistics management, efficient record keeping, providing validated temperature controlled packaging and refrigerated systems including real-time monitoring and tracking. There has to be an integration of the packaging system, the product and the transportation route. The different temperature requirements for the study and diverse external temperatures at different times of the year and also at origin and destination (requiring changes amid winter and summer configurations) creates further complexity. This strengthens the need for a specialist for providing logistics services. As a result, pharma companies and CROs are entering into Quality agreements with logistic service providers. Increasing costs of drug discovery have raised the stakes for all the parties involved in the clinical trial process. Logistics being a key element of the process, partnering with a specialist logistics service provider is a strategic decision with long-term implications. Working with a logistics service provider having a global foot print and tried and tested best practices along with global quality standards, mitigates the risks involved and reduces time spent on non core activities for a sponsor.
The logisTics of clinical Trials has To be planned in a sTraTegic manner deTailing requiremenTs for shipping To each TemperaTure zone.
The author can be reached at sanjiv. email@example.com INDIA |
October 2010 | www.logisticsweek.com
Asia's leading and industry recognized manufacturers-focused supply chain and logistics event Platinum sponsors:
12 - 15 October 2010, Marina Bay Sands, Singapore With forward looking strategies and innovations, SCM Logistics World 2010 is your answer to a supply chain that is transparent, cost effective and customer driven. Over the span of four days, senior supply chain and logistics professionals across Retail and CPG, High Tech, Chemical, Oil & Gas, Industrial and Heavy Machinery, vendors and solution providers will gather at one dedicated platform to discuss on current and future industry challenges, trends and innovations.
Our speakers include:
James Keegan Vice President of Supply Chain & Logistics Asia Pacific Schneider-Electric
Rachel Ougier Simonin Vice President of Global Logistics Alcatel-Lucent France
Patrick Bian Global Logistics Director Cabot Corporation America
Kalpesh Pathak Vice President of Supply Chain Management Fiat India
Greg Sullivan Vice President of Supply Chain, South East Asia and Australasia Unilever Singapore
Frederic Fontaine Director Organization Systems Supply Chain Carrefour
Johnson Zhang Associate Product Supply Director Procter and Gamble
Shashank Raodeo General Manager, Logistics and Supply Chain Management Mahindra Renault
N.V Chandramoulin Head of Demand & Supply Chain AMEA DSM
Networking business lunch sponsor:
Held in conjunction with:
Hear them share about: • Using supply chain as a strategic ‘weapon’ to drive value, top line revenue, branding, sustainability and improve company’s liquidity • How transport management technology enhances performance level • Using technology and collaboration with transport carriers to gain efficiency, productivity and competitive advantage • Analyzing the role of business intelligence investment in uncovering opportunities to stay ahead of competitors
Be a part of this exciting program, BOOK NOW! Main umbrella event:
Official media partner: Chemical, Oil and Gas
SCM ad 206x270 Logistics week.indd 1
Retail and CPG
Industrial & Heavy Manufacturing
Contact Candy Tan at +65 6322 2770 or email firstname.lastname@example.org www.terrapinn.com/2010/scmlog 7/29/10 11:21:27 AM
With wafer thin margins, corporates are introducing business intelligence to boost efďŹ ciencies reports Sanjay Mehta, CEO, MAIA Intelligence Pvt. Ltd
ogistics is an important component of economic development. Increasing competitiveness, however, has led to wafer thin margins which have affected the bottom line of various organizations. The increasing number of players in the industry is one of the major reasons that one can attribute to this situation. These organizations are leaving no stone unturned to cut costs and boost efficiencies. They have brought in huge automation into their operations ranging from ERP to TMS systems. While these new systems will help organizations to improve, they will not be able to monitor and control business activities. On the other hand, business intelligence is an excellent means of monitoring and
controlling an organizationâ€™s value added activities. It is a paradigm shift in the way organizations respond to change in the market. Over the last few decades the role of logistics management has undergone a paradigm shift. It is widely recognized as an extremely important aspect of overall business strategy. At the same time, a number of factors have increased the complexity of logistics management. This has led many companies to outsource their logistics activities to Third Party Logistics (3PL) providers. Today, 3PLs play a critical role in the supply chains of their customers. They are increasingly viewed as strategic partners who can play a pivotal role in optimizing the supply chain and thereby providing sustained competitive advantage.
Analyzing Data To effectively manage the supply chains of their customers, 3PLs need to constantly analyze data collected from various sources and convert it into actionable information. Business intelligence (BI) tools like data warehousing and OLAP (Online Analytical Processing) can significantly help 3PLs in achieving this objective. By providing a unified view of the entire supply chain, these tools can help improve the functioning of basic 3PL services like transportation management, warehousing, and inventory management. 3PLs can leverage BI tools to provide their clients with information specific to their supply chain, thereby increasing their market responsiveness. BI tools can also help 3PLs improve their own internal organizational INDIA |
October 2010 | www.logisticsweek.com 53
Key Performance Indicators for 3PL Providers 3PL process Order receipt Vehicle load planning Vehicle routing and scheduling Dispatch operations Goods in transit Receiving operations Order delivery
Key performance indicators Total order receipt time, order information accuracy, revenue per order Planning accuracy, capacity utilization, resource utilization, load balancing Route utilization, scheduling accuracy, rate of route addition / removal, vehicle availability Vehicle loading time, on time vehicle dispatch, order dispatch accuracy Rate of update of location information, average transit time, cost of transportation per ton On time vehicle arrival, vehicle unloading time, order receipt accuracy, percentage of goods damage Total order delivery time, on time deliveries, goods delivery error rate
The fundamental purpose of business intelligence (BI) is to deliver fact-based information to improve the efficiency and effectiveness of business.
functions like human resources and financial management.
Aiding 3PLs The 3PL industry is in a state of transition. Logistics providers are adding more and more services to their portfolios as customers demand more integrated solutions. 3PLs are viewed as strategic partners who can optimize the supply chain, reduce the cycle time, and provide unprecedented customer responsiveness. One method to effectively provide such services is information technology. The more sophisticated 3PLs have quickly embraced IT to enable better coordination of activities by providing tracing and tracking facilities to its customers. But this is hardly enough to ensure sustained competitive advantage. For total efficiency in the supply chain and also to
October 2010 | www.logisticsweek.com
eliminate bottlenecks, the ability to analyze all activities in the logistics process is vital. The fundamental purpose of business intelligence (BI) is to deliver fact-based information to improve the efficiency and effectiveness of business. To better understand their business, organizations need intuitive query and reporting tools for advanced and consumer-level users to obtain access to critical business information that supports strategic and tactical decision making. BI can be classified into the following categories:
Business Operations Reporting The most common form of business intelligence is business operations reporting. This includes the actuals and how the actuals stack up against goals. This type of business intelligence often manifests itself in the standard weekly or monthly reports that need to be produced.
Dashboard The primary purpose of a dashboard is to convey information at a glance. For this audience, there is little, if any, need to study data deeply. At the same time, presentation and ease of use are very important for a dashboard to be useful.
Multidimensional Analysis Multidimensional analysis is the “slicing and dicing” of data. It offers good insight into numbers at a more granular level. This requires a solid data warehousing / data mart backend, as well as business-savvy analysts to extract the necessary information.
Finding Correlation Among Different Factors This is in effect analyzing business intelligence deeply. The questions asked are, “How do different factors correlate to one another?” and “Are there significant time trends that can be leveraged/anticipated?” Data is seen as a wealth of information by most IT enabled organizations. Corporates, in fact, are adopting BI to receive accurate information regarding its various stakeholders. Thus BI can be applied in the day-to-day activities of an organization, for it to extract the most from the data generated by the organization’s various OLTP (Online Transaction Processing) systems.
Providing Tools Business intelligence (BI) provides tools that enable the delivery of information to decision makers. The information delivered comes from relational data sources or enterprise applications (e.g., enterprise resource planning, customer relationship management and supply chain). Business intelligence includes:
Query Tools Standard query tools allow the users to view information by answering a series of predefined questions. The business problem that query tools resolve is the need for users to combine, analyze and export information from several sources using a static format. The standard query tool is an excellent mechanism for segmenting the user population into groups: users who need ad hoc query
capabilities, prompted query capabilities and static query capabilities.
Reporting Tools Reporting tools provide the capability for presenting information in a visually appealing format. The business problem that reporting tools address is the need for organizations to create permanent records representing the business at a specific point in time that can be easily disseminated to others. Due to the formal nature of the information that reporting tools represent, it is important to develop procedures for maintaining and updating the data that they present.
OLAP Tools Online Analytical Processing (OLAP) tools are for users who require intensive data analysis capabilities. The business problem that OLAP tools solve is the need for users to “drill” seamlessly into information when additional details are required. OLAP tools provide users with ad hoc access to data on an as-needed basis. These tools insulate users from the details surrounding the retrieval of information from the data warehouse.
Data Visualization Tools Data Visualization tools help in the visual interpretation of complex relationships in multidimensional data. Graphics tools are used to illustrate data relationships. Dashboards and scorecards have emerged as a means of helping organizations do just that by providing instruments for making decisions, delivering long-term plans, responding quickly to market changes, providing greater control over the execution of strategy and promoting accountability. Both are dynamic tools that make it possible for organizations to respond to shortterm market changes, support tactical decisions and keep strategy on track.
Key Performance Indicators Key Performance Indicators are im-
portant to any BI implementation, so the KPI defined for the various processes would enable the data to be analyzed and presented to the user. BI uses KPI to present in a dashboard. Further, 3PL players can use OLAP tools for generating MIS reports for evaluating the operations performed in the organization. Reporting tools would be of significant use for making daily operational decisions for managing a 3PL’s daily operations. A 3PL can also use data mining tools to evaluate strategic factors both internal and external to the organization and identify patterns of business and operational behavior. A 3PL can then take decisions which are strategic or tactical in nature using data mining tools. The direct benefits of the usage of a BI solution are reduction in the turnaround time for preparation of reports, direct and faster access to data needed to support decision making, analyzing the ebb and flow of businesses across services, regions, clients, pricing, currencies, and market factors in time etc. The indirect benefits are improved sales performance, data quality, productivity etc. This KPI is just a drop in the ocean and there can be various KPI which can be defined by an organization in conjunction with its BI consultants to capitalize on and make the best of BI technologies available in the market. BI solutions are seen as more of a need than a luxury. 3PLs can implement BI solutions covering either key operations or the operations covering their entire organization. BI is here to stay as the rate of adoption is increasing because organizations are looking towards data as one of the key assets of the organization. Leveraging data means that it needs to be harvested in a beneficial manner. Harvesting data to gain an edge over the competition can be done with ease by using wellqualified BI solutions with unique BI
strategies for the organization. The industry’s 3PL providers who adopt BI solutions which exhibit only behavior would get solutions in BI analytics space. Such solutions would not only show present or market behaviour and other related activities, but also predict future behavior and suggestions. This is also the future of BI in transportation. Thus 3PL providers should embrace BI to stay competitive and be successful in the race for market leadership and customer satisfaction. The 3PL industry is in a state of flux. The internet, supply chain management and globalization have made sweeping changes in the ex-
BI solutions are seen as more of a need than a luxury. 3PLs can implement BI solutions covering either key operations or the operations covering their entire organization.
isting business models of 3PLs. To compete in this market, a 3PL has to continuously improve its existing services, add new services based on technology and make its internal functions more effective. BI tools like data warehousing can significantly help a 3PL provider achieve these objectives. Recognizing the need for an effective business intelligence solution is just the first step. The real challenge is to make it an integral part of the decision making process and to set clear objectives for business intelligence solutions with management support so that the company achieves complete success. The author can be reached at sanjaymehta@ maia-intelligence.com INDIA |
October 2010 | www.logisticsweek.com 55
< PanoRama OFF THE SHELF
n their book, the authors describe two trends that are shaping the environmental agenda: Green procurement, and new product related guidelines and regulations outlining how businesses should respond. The book offers guidance to managers of small and medium-sized enterprises (SMEs) on how best to deal with the European Unionâ€™s new Ecodesign directives. The authors also provide insight on ways to understand the concepts behind the carbon footprint of products. The book further explains as to how one can prepare for future challenges
related to climate change, resource depletion and shortages, increasing restrictions on the use of toxic substances, and energy management. It features a checklist after each section to help managers analyse and redevelop their action plan for gaining advantage out of ecodesign. ecoDesIGn - the competitive advantage By Wimmer Wolfgang, Lee Kun-Mo, Polak John, Quella Ferdinand Publisher: Springer Price: `3,350
n their book Hompel and Schmidt and his team explain how modern warehouses and distribution systems have become highly complex nodes within the value-added supply chain. Modern warehouses with warehouse management systems (WMS) are highly complex and hard to handle. The design, choice and operation of a WMS requires extensive knowhow and experience because of the wide variety of solutions and system requirements. The book offers an overview of solutions that could help potential customers of WMS packages make the right choice. It not only
presents the background and potential of a WMS package, but also the risks and strategies to handle them. It sets the basis for comparisons and evaluations of warehouse management systems and its specifications. New approaches with regard to the structure and design of WMS are presented. Warehouse management - automation and organisation of Warehouse and order Picking systems By Hompel Michael, Schmidt Thorsten Publisher: Springer Price: `8,200
riters Wu and Blackhurst explain how an effective supply chain management is a critical component in any companyâ€™s ability to meet consumer demand. Disruptions in the supply chain disturb the normal flow of goods and materials and consequently expose firms to operational and financial risks. Since supply chain disruptions result in financial as well as reputational losses, academic researchers, as well as practitioners, have contributed to the book focusing on developing an overall understanding of risk and its relationship to supply chain per-
formance. The writers investigate the relationship between response time and disruption impact; assessing and prioritizing risks; assessing supply chain resilience, as well as providing tools and methods for assisting decision making and risk mitigation in the supply chain. managing supply chain Risk and Vulnerability By Wu Teresa, Blackhurst Jennifer Publisher: Springer Price: ` 7,900
October 2010 | www.logisticsweek.com
BLoGosPheRe Best Practices in transportation Blogger: Dan Goodwill In his blog, Goodwill writes about some of the best practices that organizations can employ to increase productivity. It is important to identify best practices pertaining to each segment of the business (e.g. Procurement, Dock Management, Yard Management, etc.) and understand the current gap between the current processes and best practices. Secondly, employees must be made aware of the financial gains of adopting best practices and must be trained for adherence to these methods. Finally, performance must be monitored over time and corrective action implanted if performance dips below acceptable levels. search tags: best practices, transportation, Dan Goodwill,
Green It Blogger: Gagan Goraya Goraya describes how corporate social responsibility (CSR) and being environmental-friendly can help companies save costs. It has become important not just to recycle but also reduce waste. The blog starts with manufacturers producing environmentally-friendly products and encouraging IT departments to consider friendly options like virtualization,
power management, and proper recycling habits. Also new compliance regulations to certify data centers as green would require the use of alternate energy sources. Going green would mean lower power consumption and maximizing server utilization by use of virtualization. search tags: Gagan Goraya, green, IT
saas For Long term Relationships Blogger: Laurie turnbull Lauri Turnbull writes on how Software as a Service (SaaS) could provide the answer to many small firms looking for a costeffective opportunity to offer value-added service. Cloud-based solutions offer the potential for flexible, on-demand web-based applications, at lower cost than many off-the-shelf packages. Coupled with web-hosted SCM hub services that work with ERP systems, SaaS provides a platform to share order entry data with end-to-end inventory visibility, enabling business partners to combine efforts to develop service solutions. For companies that view transportation as a service, SaaS offers a cost-effective way for small to medium-size transportation companies to develop value-added long term relationships based on information sharing. search tags: saas, laurie turnbull
Journals, Case Studies, Research Reports
EU strategy for better ship dismantling
Controlling Greenhouse Gas Emissions
Resilience Engineering for ATM
By European Commission
By International Maritime Organization (IMO)
The European Commission in their report on “EU strategy for safer ship dismantling”, analyses safer and environmentally friendly ways of dismantling ships. The number of dismantling sites in the European Union has fallen over the last 20 years with ship dismantling taking place largely in South Asia – mainly in India, Bangladesh and Pakistan. The industry provides thousands of jobs, but offer poor health and safety conditions. Older ships contain hazardous materials, including asbestos, polychlorinated biphenyls (PCBs) and large quantities of oil. The paper recommends specific activities in line with the EC Waste Shipment Regulation to reduce the negative impacts of shipbreaking. The paper also urges public funding to third-world countries where technical assistance could promote the safety training of workers and support the establishment of basic infrastructure for environment and health protection.
The International Maritime Organization (IMO) in their paper “Control Of Greenhouse Gas Emissions From Ships Engaged In International Trade”, outlines a regulatory scheme to be obeyed by all ships involved in global trading. It states that any regulatory scheme on GHG (Greenhouse Gas) emissions applied to international shipping should be developed and enacted by the IMO to regulate all aspects of international shipping. The paper states the interim guidelines on the calculation and voluntary verification of the energy efficiency design index (EEDI) for new ships which would cover 87 percent of emissions from new ships. It proposes a ship energy efficiency management plan (SEEMP) for new and existing ships, which incorporate best practices for fuel-efficient ship operations and guidelines for voluntary use of energy savings.
Search Tags: european commission, ship dismantling
Search Tags: controlling, greenhouse, gas, emissions, imo
In January 2007, EUROCONTROL launched a project with the aim of understanding resilience engineering and its relevance to Air Traff ic Management (ATM). Resilience Engineering develops tools and methods for both system developers and personnel in charge of maintenance and management of system safety in industries. Today, most ANSP (Air Navigation Service Provider) have safety nets, Safety Management Systems (SMS), safety assessment and assurance processes. These efforts add layers of safety to existing safe systems. While this reduces the likelihood of accidents, it also means that those that do slip through these ‘nets’ will be complex and multifaceted. Resilience Engineering offers a conceptual and methodological basis for safeguarding against such incidents. Search Tags: resilience engineering, ATM, eurocontrol
— Compiled by Frewin Francis
October 2010 | www.logisticsweek.com
< PanoRama LaunchPaD
New Products, Technologies, Solutions
IMOCRANE is an overall platform for crane control by Siemens. The SIMOCRANE platform contains a dedicated centralized motion controller including pre-conf igured crane control modules to automate and control the crane. The main movements like boom hoist, grab, gantry, trolley and slew are integrated in SIMOCRANE Basic Technology. Advanced crane features like sway control, trim, list & skew control, vehicle positioning, position control, prof ile scanning, collision prevention are integrated into SIMOCRANE Advanced
Technology modules. The overall visualization is covered by SIMOCRANE CMS (Crane Management System). Via a dedicated SIMOTION D motion controller, all movements of the crane are monitored enabling highest possible speeds and accuracy. The centralized and modular approach present in the system is robust and the stable crane control platform enables flawless fullyautomated operation. SIMOCRANE has the f lexibility to be customized, enabling minimum time for engineering and commissioning. Customers and system integrators can easily develop their own functionality modules and plug them to the SIMOCRANE platform. SIMOCRANE modules f ind applications in ship-to-shore or quay-container-cranes, single or tandem lift, grab ship unloader, rail mounted gantry crane and overhead bridge cranes for any industrial application.
handheld mobile computer
he MC9090-G from Motorola provides mobile workers throughout the supply chain with complete data capture functionality and real-time connectivity. Workers can read RFID tags, and capture 1D and 2D bar codes as well as images, ensuring seamless integration throughout the enterprise.
lectrified rubber-tired gantries (E-RTG) is a step by Conctix-Wampfler in greening container movements at ports. Existing diesel powered RTGâ€™s are converted to run on electric power only. The conversion is made possible by electric power systems made by ConductixWampler. Electrification is done by an electric cable system which is mounted on the RTG. ConductixWampfler offers two technologies for electrification: Modular motorized cable reel with a permanent magnetic coupler, and frequency controlled motorized cable reel. Both technologies are adjusted to the dynamic requirements of the storage applications in container terminals. RTGs represent more
than 50 percent of the total fuel consumption for a typical port. Electrification of RTGs implies significant savings in terms of reduction of diesel consumption. Also, with an investment of approximately 150,000 euroes per RTG conversion to electric, estimated RoI is less than half an year.
October 2010 | www.logisticsweek.com
The MC9090-G is a Windows mobile device with integrated 802.11 a/b/g offering wireless connectivity and real time data connectivity. With its IP64 sealing and integrated internal antennas, the device offers durability in harsh industrial conditions. The handheld mobile computer finds applications in manufacturing, retail, distribution and 3PL businesses for monitoring inventory f low, warehouse management, inventory traceability among many others.
GET YOUR FREE COPY OF WAREHOUSE HANDBOOK Ma y ww 200 9 w.l og-i n
Vo dia l. 2 - N .co o.8 m
NEW LAU NCH
MO 14 TO FR68 ROLA & FR 6000
Vol. 3 - No.10
w Ha it n h d ca l e r e
I N D I A ’ S N O .1 L O G I S T I C S M A G A Z I N E
TU R TIM NAR
OU Logi E ND prov stics 20 a ne ider softw w ag Four are enda Soft for has se 2009 t .
(continued from front flap)
warehouse, to storage and material handling, information technology and automation of a warehouse and the grossly neglected area of security. Whether you are in the boardroom or on the warehouse floor, this handbook aims to set you thinking about new concepts in warehousing and the urgent need to incorporate them in your business.
VITAMIN M 26
BACKING UP 32
FUEL SUPPLY 46
Few realize the role maintenance plays in transporters’ profit margins
How reverse supply chain can make or break a company’s position in the market
Exploring oil-andgas upstream and midstream supplychain biz
The Warehouse handbook In a business environment which is slowing edging towards positivity, The Warehouse Handbook will be a welcome reference tool for the logistics and the supply-chain industry. Also, with the passage of the much-awaited GST in April 2010, warehouses will move several steps up to highly automated Distribution Centres which will impact industry’s bottom-line. The Handbook will thus give a new perspective on the subject and enable industry to streamline its operations and processes. The various chapters of the book have been written by noted specialists in the industry with the sole purpose of removing nebulousness from major aspects of the logistics business. The handbook covers the entire gamut from the present state of the industry, site selection, design and processes of a
reas is a on good to do it.
The HyperCity supply-chain team led by Lt Col. Vijay Nair (Retd) is putting up an inspired show >>
24 30 34 42 46
The Warehouse handbook
.... .... .... .... .... .... .... .... .... .... .... .... ... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .. .... .... IND .... .... .... ... U .... .... WA STR .. .. .... .... .... A cl TCH Y .... .... .... the ose lo 50 ... .... .... af te autom ok at .... rmar otiv .... .... ket e .. in In dia. RIG HT EX Don PEC unle ’t shakTATIO enou ss th e ha N 3 gh ere nds 8
(continued on back flap)
The Warehouse handbook
DVV Media Group
Save Money PLUS Get A FREE Warehouse Handbook Subscribe to at a special price Period
Yearly Cost (Rs) You Pay (Rs)
3,600 (36 issues) 3,300
3600 (36 issue)
2 years 2,400 (242400 (24 issue) 2 yrs issues) 2,500
1 year 1,200 (121200 issue) 1 yr issues)(12 1,600
S You Rs 1,300 + FREE Warehouse Handbook costing Rs1,000 2880
Rs 900 + FREE Warehouse Handbook costing Rs 1,000
1080 Rs 600 + FREE Warehouse10% Handbook costing Rs1,000
3 years 2 years 1 year
Fill in BLOCK LETTERS
w w w.logisticsweek. com
Address: City: Country:
DD / Chq. No.
Drawn on (Bank): for Rs.
in favour of ‘DVV Media India Private Limited’.
Account Transfer: Remittance should be made to: 1. 2. Swift No. : DEUTINBBXXX 3. I Ban No. : DE84500700100953478500 4. Information / proof of transfer with swift message copy should be mailed / faxed to ‘DVV Media India Private Limited’. DVV Pvt. Ltd., 9, Ground Floor, Sona Udyog, Parsi Panchayat Road (Old(Old Nagardas Road), Andheri (East), DVVMedia MediaIndia India Pvt. Ltd., 9, Ground Floor, Sona Udyog, Parsi Panchayat Road, Nagardas Road), Andheri (East), Mumbai Mumbai -- 400 400 069 069 INDIA INDIA Ph:+91-22-2824 0198 / 2837 5323 Fax : +91-22-2836 0143 Email: email@example.com firstname.lastname@example.org NDIA
Subscription _A4 LOG.india_2009.indd 1
5/30/2009 11:27:32 AM
< PanoRama LaunchPaD
New Products, Technologies, Solutions
VIVa IP cctV
he IP CCTV is a network-based, hosted CCTV solution from VIVA Communications.It does not require local recording and storage equipment. Footage is stored centrally, hence it can be downloaded, accessed or controlled from any location using a wired or wireless net. Previous recording can be searched and accessed based on their timestamp. The fact that it doesn’t require storage at the site of installation makes it attractive for unlimited surveillance with very limited chances of content getting lost, misplaced, stolen or tampered. Also, web interface means that multiple users can view the same footage, download and email it at the same time. Recordings can also be
viewed via mobile devices. This technology is especially useful for the logistics sector, including ports, supply chain management companies and other related companies to monitor the cargo movement, cargo handling operations and related processes.
ocollect Voice from Vocollect enables voice-directed work that creates direct communication between users and information systems to perform tasks in a variety of environments. The technology helps frontline employees leverage the most human approach to communication – a two-way dialogue. With voice activated commands, the system ensures alertness at all times, reducing errors and maximizing employee accuracy. Vocollect Voice can be teamed up with portable computers from their Talkman line of products. The computers are designed to work in extreme temperature conditions. Along with speech recognition handsets, productivity at warehouses and other distribution centers can be tweaked considerably.
Wärtsilä launches 3c
he 3C from Wärtsilä is their Communication and Control Centre (Wärtsilä 3C) solution, which is its f irst system to integrate an entire ship's control into one solution. This solution helps in integrating Wärtsilä its own products and systems, such as automation, propulsion and engines, with other operational equipment and systems to obtain a truly fully integrated solution. Here, all the ship’s controls and alarms are integrated with a common interface.With features like route planning, optimal engine configuration and decision support, vessels can improve fuel economy and reduce the maintenance requirements of its systems. Once implemented, Wärtsilä 3C, helps users remotely optimize their assets and achieve real-time f leet management. The system is supported by Wärtsilä’s global service capabilities to
optimize the availability and eff iciency of a ship’s crucial operating equipment throughout its life cycle. This global network is enhanced by the Wärtsilä Land and Sea Academy’s training facili-
October 2010 | www.logisticsweek.com
ties, to provide comprehensive instructions on all ship operating systems. Modularized components and customized design makes the 3C suitable for all types of vessels.
A PUBLICATION OF DVV MEDIA GROUP
October 2010 09 - 12 OctOber 2010 IndIa ManufacturIng ShOw bangalore International exhibition centre (bIec), bengaluru India Manufacturing Show 2010 (IMS) is an exclusive and fully-focused platform for Indian and international manufacturing, engineering and other ancillary industries from the micro, small & medium scale industries, large industries and public sector units. Hosted by Laghu Udyog Bharati-Karnataka & K and D Communication Limited, IMS 2010 is aimed at providing a level playing field for participants to showcase their capabilities, interact with a large and varied audience as well as explore avenues of potential business growth and expansion. Varied items will be displayed on a major podium which will include machine elements, workshop and warehouse equipment, etc. Organized by: K & D Communications Limited Tel: 91 79 26460453 / 26460624 / 2646972 27 - 29 OctOber 2010 delhI InternatIOnal renewable energy cOnference (dIrec 2010) India expo centre, greater noida India is hosting the Delhi International Renewable Energy Conference (DIREC) 2010, during 27-29 October 2010 at India Expo Center, Greater Noida. Introduced in Bonn in 2004, followed by Beijing in 2005, Washington in 2008, DIREC 2010 is the fourth inter-ministerial global event. Over 600 exhibitors from 40 countries across the globe are expected to showcase technologies at the concurrent exhibition spread over 20,000 sq m area. Packed with a trade show, business & press conferences and parallel events, DIREC 2010 offers an unparalleled opportunity to connect with other manufacturing and supplier peers, industry experts on renewable energy to benchmark products & services in order to enhance global competitiveness. DIREC 2010 will focus on the key drivers of renewable energy production and applications including: Global joint R&D efforts - technology transfers; addressing trade & investment barriers - innovative financing & funding; and sustainable business models. Organized by: Exhibitions India Group Tel: +91 11 4279 5054 /032 27 - 30 OctOber, 2010 POwer IndIa MMrda exhibition, bandra Kurla complex, Mumbai Power India is an international exhibition and conference on the energy industry. The exhibition will bring together technocrats, industry leaders and senior government officials from central and state
governments as well as eminent experts, who have wide experience in the field of generation, transmission, distribution & maintenance, consultants, contractors from the power and related sectors. The 12th Edition of the exhibition will showcase the latest technologies, products and services to harness power projects speedily, qualitatively and economically. Power India aims at helping accelerate the growth of power sector in India and thereby, assist in achieving the target ‘Power for all by 2012’. The 2010 Edition will feature more than 200 exhibitors with an exhibit-display of approx 12,000 sq m. Organized by: Winmark Services Private Limited Tel: +91 22 26605550/26607755 28 - 30 OctOber 2010 IndIa cheM bombay exhibition centre, Mumbai India Chem 2010 will showcase the latest products, machinery, equipment and developments in the industry for test marketing and generating business, transfer of technology, investment and joint ventures, setting up R&D base in India, supply of plant, machinery, process control equipment, projects and services etc., sourcing requirements from India, technology adaptation and upgradation, business tie-ups and collaborations, one-to-one business meetings and networking opportunities. Industry participants would include from pharmaceuticals, plant and equipment for pharma production, bulk drugs and formulations, drug intermediates, lab equipment, instruments, biotechnology, packaging materials & machinery, engineering project management & construction services, etc. Organized by: Federation of Indian Chambers of Commerce & Industry (FICCI) Tel: +91 11 23738760/23738770 28 - 30 OctOber 2010 rOadS & hIghwayS exPO Pragati Maidan, new delhi Roads &Highways Expo 2010 is India’s first ever trade expo dedicated to the roads and highway development in the country. The roads in India are in dismal conditions as compared to other developed countries. Keeping this in mind the Indian government has planned a budget of $10 billion to be spent on road development annually. With this initiative taken by the Indian government, there is a palpable need of cutting edge technology, which needs to be implemented to uplift the standards of road construction and infrastructure. Roads & Highways Expo 2010 will be the guiding light which will usher India into the new dawn where the roads and highways will be better than ever before. Organized by: Media Expositions & Events Tel: +91 11 26236933/41620861
October 2010 | www.logisticsweek.com
INDIA www.logisticsweek.com DVV MEDIA INDIA
DVV Media India Private Limited 9, Ground Floor, Sona Udyog, Parsi Panchayat Road, Andheri (East), Mumbai -400069 INDIA Phone :+91-22-28240198 / 28375323 Fax : +91-22-2836 0143
Publisher: Jacob Joseph Puthenparambil email@example.com edItOrIal editor: Aanand Pandey firstname.lastname@example.org editor-Special Projects: Pamela Cheema email@example.com features editor: Jayashree Mendes firstname.lastname@example.org Special correspondent: Frewin Francis email@example.com creatIVe chief designer: Shivasankaran Pillai firstname.lastname@example.org Photography: Ramlath Kavil SaleS and MarKetIng Sales head: Jayaram Nair email@example.com ad-Sales Ashok Chand Thakur firstname.lastname@example.org Dinesh Mishra email@example.com Marketing Support: Sangeeta D, Suhasini S, Jigar T DVV MEDIA GROUP Gmbh www.dvvmedia.com ceO: Dr. Dieter Flechsenberger director International business development: Nigel Tomkins Printed by Jacob Joseph Puthenparambil, published by Jacob Joseph Puthenparambil on behalf of DVV Media India Private Limited. Printed at Savai Printer Private Limited, A661, TTC Industrial Area, MIDC, Mahape, Navi Mumbai - 400 705, India and published at 9, Ground Floor, 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 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 DVV Media India Private Limited. All disputes are subject to the exclusive jurisdiction of competent courts and forums in Mumbai only.
ANNUAL SUBSCRIPTION RATE INDIA: INR 1080/INTERNATIONAL: EURO 240 / USD 325 SUBSCRIPTION TERMS The minimum subscription period is one year.
Leveraging Community Systems for streamlining Business Complexity Recent industry reports from CAPA & IATA on air cargo traffic highlights double digit growth in Freight ton kilometers (FTK) globally, confirming an increasing trend in cargo capacity and demand. Is the Indian industry ready to sustain this growth and operate at globally benchmarked standards to meet the demands of the customers & shippers? Mr. Vineet Malhotra-SVP-Sales & Marketing, Kale Consultants Ltd. shares some insights.
VIneeT MaLhoTra Vineet spearheads Sales, Marketing and Customer Relations across Kale’s target markets. One of the foremost experts in B2B Marketing and Sales, he has been responsible for building the ‘technology specialists in logistics’ brand, implementing innovative go-tomarket strategies and customer engagement programmes that have been the cornerstone of Kale’s foray into the logistics sector.
chain have realized the need to connect and collaborate to ride the growth wave on a global scale. To support this need, industry focused IT solution providers like us are working closely with industries and trade associations to make community systems based on Electronic Data Interchange (EDI) a reality in India.
In the past, universal adoption of community systems has not seen the dawn. Where do you think are the limitations, is it the The cargo value chain in inadequacy of IT capability, India is characterized by lack talent or the business of transparency and legacy complexity? What can systems causing delays, community Systems do for penalties and lack of shipment the collective good of Indian visibility. how can utilizing Logistics Industry? communication technologies A community system based on help in improving this EDI platform presents significant situation? benefits over other modes of Presently there exists a lot of data interchange. For instance, information asymmetry between the benefits for shipper entail a cargo community members. Shippers single point data entry, leading to require track and trace information; savings in time and efforts; facility carriers want more specific booking to float multiple RFQ to multiple information, pre-arrival information service providers; single window and transportation documentation; view to manage and track their road-transporters require optimal status and facility for e-payments route information, and customs want among others. While for the information on importation requests. carriers, community systems In the global air cargo market the can automate entire status gap between required and available inquiry and booking processes, logistics support has been recognized dramatically reducing the need for and several initiatives have been any human intervention. Similarly, attempted to connect the community benefits for freight forwarders, on global systems. The Indian CHA, custodians, and ground scenario is far more complicated with handlers include reduction in many small-large, local-international paperwork, common platform players forming a web of information for communication, thereby flow amongst them. However, the eliminating redundant processes. stakeholders in the Indian supply These functionalities can provide 62
significant advantages in terms of cost savings, higher reliability and ease of monitoring the process for the participants of the logistics supply chain. What do you think were the pitfalls in route to successful execution of Global Community systems? Leading studies on Community systems emphasize certain elements which lead to the failure of these systems globally and these are precisely what we need to be clear about before embarking on similar initiative for Indian markets. Firstly, there are rampant Information Asymmetries between various supply chain entities. This has lead to the development of electronic markets that usually favor the customers and reduce service providers’ profits and market power. This could be one reason for service providers to stay away from systems that emphasize price information. Secondly, there are Conflicting Business Strategies amongst the community members in terms of not only increasing vertical competition but also horizontal competition between various modes of transport like- rail, sea, air and road. This has necessitated integration between different participants in the distribution chain to simplify the logistics information flow and process automation. There also exists a huge gap between Physical Cargo Flows and Information Flows. Globally, there have been exceptions though, like in the case of ‘Tradenet’ community platform that is successfully used by supply chain
entities in Singapore. In this case the community system was backed and controlled by the local government. What steps according to you should be taken to ensure adoption of Community systems in the Indian Logistics segment? A recent survey conducted by Kale Consultants on “Technology Adoption Index in Logistics Industry (TAILTM)” reveals that on an average the Indian logistics industry spends only about 0.3% of revenue on technology whereas the global standards for the logistics industry are around 3-4% spend on technology. The result is a complex web of information flow between multiple supply chain participants that directly affect bottom lines. The fact remains, in order to succeed, community systems require all participants to enter their supply and booking information into the system for use by other participants in the value chain. Globally, the difficult part has been getting companies to join the systems on a permanent basis. Kale, as a leading IT solution provider to the global Travel and Transportation segment, is developing a first of its kind community platform for the Indian logistics industry. In partnership with Indian trade bodies and industry participants we are already educating the stakeholders and bringing them on a common platform; however the government support can go a long way in ensuring conformance to best-practices and overcoming regulatory & governance obstacles. Advertorial
MO ND AY
AY RD TU A S
RNI No. MAHENG/2007/23777 l Registration No.MH/MR/South-279/2008-10 Allowed to post at Patrika Channel Sorting Office G.P.O. Mumbai - 400001 Date of mailing: 5th of every month issue
Y DA ES TU
ORE E ND
OF DA Y
BEFOR E 12P M
BEFOR E 9AM
BEFOR E 9AM
BEFOR E 12P M
BEFOR E END
OF DA Y
EVERY HEM, BEAD AND STITCH IN THE RIGHT PLACE AT THE RIGHT TIME. • • • • • • •
Fashion is all about being up-to-the-minute. That’s why Fashion Week choose DHL as their logistics partner, and a supporter of designers everywhere. With a market-leading international network, DHL Express delivers to and from hundreds of destinations all over the world, offering our customers speed, precision and local expertise whenever and wherever it is needed. After all, an event like Fashion Week can’t afford to be even a second out-of-date.
64 DHL_L1B_EX_GN_SP_LogIndia_206x270_en_hi_IN.indd 1