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Insight

“Our Objective Is Zero Modifications”

Sally Buchholz, VP (Customer Service & Marketing) at Saia, Inc. offers perception into how companies must monitor its carrier’s metrics.

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Souma Das, MD & VP Sales, Infor India, reveals how its range of products can help the supply-chain.

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November 1–15, 2011 Editor’s Note Forever There The floods in Thailand are having a cascading effect on global supply-chains. Several Indian manufacturers, mainly auto components, car and hard drive manufacturers, among others, have been hit. Now most of them are either scrambling to source components from elsewhere or have revised profit figures for the next quarter. In the last couple of years, one phrase I have often heard is, “What’s your Plan B?” A few decades ago this was simply put as “Don’t put all your eggs in one basket”. So why do companies rely solely on one source for components, and find that they have to scamper around if that road is closed? When the double tragedy of the earthquake and tsunami hit Japan early this year, companies banking on Japan were stupefied. The problem was further exacerbated as similar industries were clustered in one area thus creating production synergies, reduce transport costs and also develop skilled workforce. But therein lay the problem. That is one advantage companies in India have. Most of them have set up plants across various states in the country. God forbid, if we should face a situation like Thailand or Japan, although there might be a shortage but there will continue to be availability. Your’s truly, Jayashree Mendes

Editor, LogisticsWeek

Sea Changes For Logistics The Indonesian government is working at trimming logistics cost after a World Bank report cited the high logistics cost in the country. NewsDesk The World Bank says that Indonesia’s logistic export expenses are higher than neighboring countries as Indonesian ports are below international standards. As a result, World Bank Indonesia official Henry Sandee said that Indonesia could not directly export its products to Europe. As a result, exports must go through Malaysian and Singaporean ports. Mr. Sandee said the capacity ports, such as Tanjung Priok, could only accommodate ships carrying 4,000 containers. Meanwhile, ports in Europe and Malaysia can accommodate ships carrying 14,000 containers. The logistical cost from factories to Indonesian ports is also inefficient. The logistical costs from a Cikarang-Bekasi factory to Tanjung Priok Port, for example, can reach US$775, more than a third higher than Malaysia. The World Bank has suggested that the government reduce logistical costs and coordinate with businessmen to discuss regulations. Based on the Logistic Performance Index (LPI) released by the World Bank in 2010, Indonesia was ranked 75th out of 183 countries, far behind Malaysia (29), Thailand (35), the Philippines (44) and Vietnam (53). A logistics survey conducted by the Bandung Institute of Technology (ITB) showed that Indonesia’s logistical cost reached 24 percent of GDP or higher than Thailand’s 16 percent. “Indonesia has made much improvement, but other countries do it faster,” added Henry. In response, the Indonesian government is exploring ways to trim logistics costs to boost the country’s competitiveness. Vice President Boediono promised to carry out several action plans to reduce costs. The first plan is to create a proper transportation system by building the necessary infrastructure. Construction of the north Java railway is expected to be complete by 2013. The second plan is to mobilize state-owned enterprises to increase national logistical capacity. Deputy Trade Minister Bayu Krisnamurthi said that Indonesia is an archipelagic country and cannot be treated the same as other countries in terms of logistical costs. Nevertheless, the govern-

ment is still targeting a logistic cost ratio of 21-22 percent by 2015. National Development Planning Minister Armida Alisjahbana said the government was accelerating the implementation of a regulation to reduce high logistical costs and coordinate with businessmen through the Indonesian Chamber of Commerce and Industry. Mr. Boediono said an improved logistics system was necessary not only to ensure that goods were competitive but also to integrate national economic activities. “We sometimes forget the importance of logistics. It’s important to act to realize our logistics systems plan,” Boediono said during the opening of the Indonesia Logistics Summit at the Indonesian Chamber of Commerce and Industry (Kadin) last fortnight. He said the government would revise necessary regulations that created longer logistical in addition to providing improved land, sea and air infrastructure. “The government will maximize the use of the state budget for streamlining logistics.” According to the Indonesian Logistics Association (ALI), Indonesia’s logistical

costs are between 25 and 30 percent of the GDP, among the highest in Southeast Asia. That figure is higher than in Thailand and Singapore, which stand at 16 percent and 10 percent, respectively. According to the Transportation Ministry, operational costs for freight delivery by truck in Indonesia stand at US$34 per kilometer, compared to an average of $22 per kilometer throughout Asia. National Development Planning Agency (Bappenas) infrastructure deputy Dedy S. Priatna said that among the short-term solutions was keeping ports operational 24 hours a day. “This will increase productivity without new investment,” he said. Mr. Priatna said a 24-hour port would effectively cut national logistics costs from 17 percent of total production costs to 10 percent by 2015. “While waiting for the construction of new infrastructure, a non-stop operation only needs renewed regulations but is very effective.” State port operator PT Pelabuhan Indonesia (Pelindo) II president director RJ Lino said nonstop operation would reduce the cost of ships’ time in port.


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November 1—15, 2011 www.logisticsweek.com

In BrIef News and other happenings in India and other parts of the world in the last fortnight. n Working in conjunction with the Deutsche Transport Compagnie (DTC) in Nuremberg, Hellmann Worldwide Logistics UK has launched another direct feed service into the Eastern region of Germany. Operating from Basildon and Lichfield in the UK to Nuremberg and vice versa, the new shuttle system will strengthen distribution quality in the East. It will also complement existing services that Hellmann runs to Osnabrück, Stuttgart, Hanover, Whittlich, Frankfurt and Hamburg. The Nuremberg service will run with Groupage and Part Loads direct into the Eastern region. The service can be used from the UK to Germany and Germany to the UK, for either single or round trips.

n OAG Cargo’s coverage of the South American air cargo market is being extended with the addition of all of TAM Airlines’ cargo schedules for flights serving Argentina, Bolivia, Brazil, Chile, Colombia, Paraguay, Peru, Uruguay and Venezuela. The airline is also using access to OAG Cargo’s international freight forwarder customer base to promote the launch of its latest route from Brazil to Mexico. TAM commenced a daily nonstop Airbus A330 service on the route on October 30th 2011.In addition, TAM will publish all of its flight schedules to and from Europe, where its network includes Belgium, France, Germany, Ireland, Italy, the Netherlands, Portugal, Spain, Switzerland and the UK.

n CEVA Logistics has been crowned the Best 3PL Supply Chain Provider in the 2011 CHINA Awards organized by the Global Supply Chain Council. Winners were selected by an independent panel of judges comprising China’s leading supply chain industry experts and also by public online voting. CEVA is the only 3PL supplier that has been presented with an award in this year’s ceremony. This is the second time that CEVA been named as the Best 3PL Supply Chain Provider at the CHINA awards. CEVA started operations in China in 1988. Currently, CEVA has 88 sites all over mainland

China, Hong Kong and Taiwan and manages more than 1.4 million sq m combined storage space.

n Arshiya Rail Infrastructure Ltd has recently won a tender for movement of 24,000 MT of copper concentrate for Sterlite Industries (India) Ltd, a Vedanta Group company. The movement of copper concentrate will be from Khetri (Rajasthan) to the copper smelter unit of SIIL, located at Tuticorin (Tamil Nadu) over a period of six months. Arshiya Rail was the winner amongst five other bidders for the deal including service providers from coastal shipping. As part of the services, Arshiya Rail will be providing an end-toend solution to Sterlite for this movement which also includes first and last mile transportation and handling.

n The global logistics service provider Logwin is expanding in India. The company opened an office in the metropolis of Hyderabad in October. This means that Logwin now operates a total of nine locations in India - Bengaluru, Chennai, Hyderabad, Karur, Mumbai, New Delhi, Pune, Tirupur and Tuticorin. Hyderabad is the capital of the Indian state of Andhra Pradesh and is regarded as an IT center and an important location for the pharmaceuticals industry. The city has an international airport, a container depot and a direct highway connection to the sea port of Vishakhapatnam. Today the logistics service provider employs 74 people throughout the country.

n Caterpillar Logistics Inc. announced plans to further enhance the industry’s best global service parts distribution network with the addition of a new parts distribution center in California. The site is located in the Tejon Ranch Commerce Center at the junction of Interstate five and Highway 99 in Central California. With excellent accessibility to major airports and highways, this location will ensure rapid delivery of service

parts to dealers and customers. The new 400,000-square-foot facility will employ 100 to 150 people and is scheduled to be operational in late 2012. The California facility will utilize Service Parts Management.

n Con-way Freight has been recognized by Transfreight with its 2011 LTL Carrier of the Year award. The company presented Conway Freight with the honor at its inaugural carrier recognition event held recently at the Oasis Conference Center in Loveland, Ohio. To determine the winner in the LTL category, Transfreight evaluated its motor carriers on a range of objective performance criteria, including on-time pickup and delivery, accurate and timely invoicing, safety and compliance, and cargo claims quotient. Con-way Freight has served the national LTL needs of Transfreight since 2007, handling several of their key accounts.

n Southeastern Freight Lines has received an Outstanding Service Award from DuPont that is based on a number of service quality measurements. The award was presented at the DuPont Truck Carrier Safety and Security Conference. DuPont’s Outstanding Service Awards recognize carrier performance and safety excellence for package and bulk truck services rendered in 2010. Southeastern was recognized in the LTL Services category. To determine award winners, DuPont measured service quality including safety considerations such as distribution incidents, customer quality service incidents, shipment tendering refusals, freight claims, strategic partnerships and shipment volumes.

n As a part of the company’s industry-leading new vessel building program, Crowley Maritime Corp. christened its largest and fastest articulated tugbarge (ATB), the Legacy/750-1, on November 3 in New Orleans. The high-capacity tank barge is able to carry up to 330,000-barrels of petroleum

products and the 16,000-horsepower tug can generate speeds of 15 knots or more, making the ATB an industry leader. When coupled together, the vessels measure 674 feet in length, only 23 feet shorter than One Shell Square, the tallest building in New Orleans and the state of Louisiana.

n Agility Pakistan was recently awarded the “Global HR Excellence” award for integrity and excellence in customer service. This is the second year in-a-row that Agility has received this award. Kiran Abbasi, General Manager of Human Resources for Agility Pakistan, received the award, from Makhdoom Amin Fahim, Senior Federal Commerce Minister and Hameedullah Jan Afridi, Chairman IPO. The Global HR Excellence Awards is an annual event that showcases the best HR talent in Pakistan. It honors human resource professionals for their contributions to helping the development of high-performing and productive workforce within their respective companies.

n Southern Air Holdings, Inc. announced that it has signed a multiple year B747 ACMI agreement with Centurion Air Cargo, a Miami-based all-cargo carrier that provides premier scheduled service to destinations throughout the U.S., South America, Europe and Asia. The aircraft began operating for Centurion Air Cargo last month. Centurion Cargo, together with its related party SkyLease Cargo, is the leading cargo carrier out of Miami International Airport and operates a fleet of four MD-11F aircraft, leases an additional six (6) MD-11F’s from SkyLease Cargo and operates scheduled all cargo service to multiple destinations in South America, Central America, Mexico, the Caribbean, Europe and World Wide charters.

n OWS Freight Systems (OWSFS) announced its expansion in Europe with the establishment of “OWS Freight System Italia Srl” at GENOA, Italy. According to OWS, manufacturers and traders in India looking

to ship cargo to Italy will be greatly benefited by OWSFS as they will deal with single service provider locally in India. This will eliminate the hassle of dealing with multiple agents in a remote location with the added language problems of a foreign country. By having presence in Italy, OWS will give push to its new product “assistance in procurement”. OWS help its customers in procurement of their goods, consumables, spares and urgent material through its own offices.

n D. J. Powers Company, Inc., announced the opening of their newest branch office in Shanghai, China. D. J. Powers Company opened their European headquarters in Rotterdam in April of 2010. In October of 2010 they celebrated 80 years in business as one of the oldest Georgia based freight forwarders and Customs Brokerage firms. D. J. Powers looks forward to continuing to expand their global presence and international service capabilities in Europe, China and worldwide.

n Catering to the growing demand for integrated logistics solutions, Allcargo Logistics Limited in a joint venture with the Container Corporation of India, has opened Allcargo Logistics Park, a new advanced Inland Container Depot strategically located in the heart of Dadri, Uttar Pradesh. The new ICD offers supreme ICD facilities and infrastructure with a 41264 square meter built up area, 21000 square meter paved yard and 5160 square meter covered warehouse. In addition, the facility has a 75000 TEU handling capacity per annum apart from providing superior quality, ultra-modern amenities like three reach stackers each with 45 tonne loading capacity, six forklifts with 10 tonne to 3 tonne handling capacities, 100 tonne electronic weighbridge and two high-mast lighting columns. To start with, Allcargo along with Container Corporation of India has made a joint investment of Rs.190 million in this initiative.


November 1—15, 2011 www.logisticsweek.com

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Tracking Carrier Metrics And The Bottom Line Delivering goods is an ongoing, intricate process in which business executives must learn to balance service quality and their transportation costs. Sally Buchholz While carriers are charged with making sure their service and products support the business needs of their customers’ through effective management and streamlined operations, business executives must monitor their carrier’s performance metrics to make sure they are getting the best value for their shipping dollar. Transportation costs have long been shaped by a number of factors, but now more than ever, outside forces on the transportation industry can affect delivery. Carriers, adhering to or planning for various regulation changes such as those expected to modify driver hours-of-service, will affect the

Businesses should monitor their carriers’ metrics. and, because needs evolve, businesses should cultivate long-term relationships with carriers. rising cost of transportation. Aside from regulatory changes, the costs of new equipment, advanced technology, employee health care benefits and fuel has pushed pricing higher. Many business executives are also worried that tight capacity over the next several years will make it more difficult to keep their shipping costs low. As such, many are working with their carriers more closely than ever. How does a business begin to

measure carrier service? First, determine what service, products or results are most important to your business. According to the 2011 National Trends in Small to Medium-sized Businesses Survey, executives said they valued on-time delivery (65 percent) most followed by pick-up performance (11 percent) and claims-free service (9 percent). Businesses should monitor their carriers’ metrics to determine which ones directly im-

Spending Expected (2011)

pact their day-to-day operations. And, because needs evolve, businesses should cultivate long-term relationships with carriers. A carrier should be able to provide their customers the metrics that are most important to them to ensure an ac-

curate scenario that fits their particular business. Most carriers have their own internal performance indicators but each business should inform the carrier that they are monitoring the carrier’s performance CONTINUED ON PAGE 9

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Blogs, Journals, Book releases

Managing Supplier Risk By Martha Lessman Katz A strong enterprise-wide information security program includes managing third-party risk. But assuring that you have diligently investigated your service and supply chain providers lends additional assurance that they will meet your security requirements. Do their Security Policies comply with yours? Have they implemented them and performed the requisite employee training? If so, Contract Protections and Ongoing Supplier Monitoring is the next step. Key contractual provisions include: Confidentiality: Ensuring suppliers understand what your confidential information is, that they are obligated to secure it and not disclose it without your consent. IP Ownership: If the supplier has access to data about your customers, your products, and operations, not only should the confidentiality of this information be maintained but the contract should clearly provide that your company is the sole and exclusive owner. If the supplier is developing other materials or technology, the contract should default to company ownership. Service Levels: Suppliers should be obligated to meet your requisite level of service on a consistent basis with, perhaps, the right to terminate for inconsistent service. Require compliance with policies and procedures. Ongoing Monitoring: Ensure you have the right to access the supplier’s facilities to inspect, audit, review ongoing risk assessments, and monitor data access and use. Data Breach: In the event of a breach, you should control the investigation. You should determine if data breach

notification is required. If you believe it is, you should then control whatever notification may be required. Appropriate representations and warranties: Indemnification: Ensure liability limits and disclaimers are appropriate. Insurance should be required assuring that a pool of money is available to provide the requisite indemnification and defense if you are sued. Termination: Ensure that your rights to terminate address your needs clearly. This applies not only to breach. You may need the ability to adjust the contract for business reasons. If your industry experiences a business downturn, the primary user is a business unit that is being sold or you are acquiring a company, the contract should be flexible enough to enable you to make the necessary adjustments. Be on guard if the supplier licensed software to provide your services. The contract terms should ensure you have the right to continue to license key software if desired. http://bit.ly/rteVEe

Demand Planning in CPG industry - Practising The Best Practices By Umesh Sonawane No matter which industry you are in, you would have constantly encountered the term - “Best Practices”. In order to maximize the shareholder value, organizations are constantly striving to adopt these best practices in almost every domain or process relevant for them. De-

mand planning is the most critical process in the consumer packaged goods (CPG) industry, since it drives all downstream processes (raw material/finished goods inventory planning, procurement planning, capacity planning, manpower planning, transportation planning, etc.) for running the organization in the most effective and efficient manner. First best practice is to set up the formal demand planning process. This also needs setting up of a “demand planning organization”, and demand planning systems which would offer best-in-class performance. Demand planning process has many sub-processes which includes - setting up demand planning objectives and metrics for different business units/customers/key items/locations, setting up the frequency of the forecasting process with the time horizons, formulating a plan to cleanse the history data which is the main input to the statistical models, deciding upon the level at which the forecast has to be generated at, setting up the process for - accounting for a short term market event or promotional forecast, establishing a consensus forecast, and finally reconciling the top level collaborate forecast at the bottom level before transferring the operational forecast for replenishment purpose. Demand Planning is the last step in the cycle is a formal review of the forecast with the ongoing Sales. In this step, the actuals are compared with the planned metrics (MAPE, forecast accuracy, etc.) and the appropriate steps are taken to increase the forecast performance in the next cycle. http://bit.ly/uM4wgL


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November 1—15, 2011 www.logisticsweek.com

case study

Changing Track, Changing Tack Movement of marble from Rajasthan to West Bengal required Inlogistics to create a competitive delivery system, mainly using container trains. Here’s how they did it. Hardeep Singh CEO, Inlogistics Marble and marble products originating in Rajasthan was moving to West Bengal primarily by road, which, as is the case across most transportation corridors in India, was dominated by unorganized trucking companies. This transportation route also involved movement of products from other segments such as white cement manufacturers and clay mines, though marble formed the largest part of the product mix.

Rail Woes The movement of marble from Rajasthan to West Bengal was plagued by unavailability of trucks on a regular basis, frequent fluctuation in freight rates, unreliable delivery time and lack of information about the cargo in transit. Besides, breakages and loss of material during transit added to the inefficiency of the overall logistics system. The incidence of breakage was so frequent that the marble industry had virtually accepted up to 5 percent of

marble breakage during transit as a norm and it was factored in the costing. The costs were also affected by rising fuel prices and axel load deduction. The delivery and cost uncertainties made product pricing in Kolkata market difficult stabilization of which could only be achieved by taking a hit on margins either at consignor or at consignee end.

Moving Ahead Heavy cargo type, quick and safe delivery requirements, the desire to protect against material loss during transit and margin pressures driven by high and varying logistics costs came together as good reasons for the market to consider a shift to rail-based transportation. Inlogistics, a container train operator with the license to operate trains across most of the regions was keen to catalyze this potential shift. But besides rakes and their operational capability, the following formed the cornerstones of Inlogistics’ strategy to enter this segment. 1. Development of perceptual acceptability in market for containerized movement

2. Attainment of an optimal aggregation rate to facilitate competitive delivery time 3. Development of a centralized information system setup 4. Generation of demand sufficient to achieve optimal utilization in turn affecting frequency favorably. For this, the area of aggregation for Inlogistics was expanded from 150 Kms around Kishangarh region to a catchment area extending as far as 700 Kms. Further, Inlogistics helped with redesigning the market’s supply chain by employing a four pronged strategy.

High rake frequency To ensure that the promised delivery time is achieved, it was necessary to not just increase the number of rakes existing in the system but also ensuring that they turn around fast which depends a lot on the aggregation of rake load. Inlogistics made continuous business development effort to keep pace with the committed frequency of one rake per three days. A large part of the load was picked

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

from the Kishangarh market; however, the catchment area was widened to all over Rajasthan to add to the speed of aggregation. To further ensure faster aggregation, Inlogistics also introduced aggregation of various other commodities namely Kotastone from Kota, white cement from large white cement producers and clay from Merta and Bikaner. Additionally, aggressive efforts in business development were made to get return loads in the east-west direction. Congregation of these efforts led to following improvements: • Gradual ramp-up of circuit frequency from the initial 1 rake per ten days to 1 rake per 3 days • Very competitive delivery times that improved from the initial 18-22 days to 11-14 days one way transit time. Transparent and standardized freight: Ever increasing haulage charges, increase in first & last mile charges due to diesel price hikes, demand fluctuations and regulatory changes had resulted

in dynamic variations in cost when the market depended on road transport. Inlogistics introduced flat, standardized pricing, offsetting the margin erosions on the clients’ end due to premium pricing during constrained supply conditions. To maintain transparency in logistics costs for customers, Inlogistics issued price circulars and to insulate the customers from pricing uncertainty, Inlogistics limited the number of revisions in price circulars in any given month. Credit facility for customers: Customers with high volumes and quality payment history had no existing advantage vis-à-vis the customers with low volumes and/or poor payment history. Inlogistics offered credit to customers offering consistently high volumes coupled with good payment record. Thus, Inlogistics was able to ensure the stickiness of large volume key customers towards containerized movement of their products in turn, enabling the longer term sustenance of this service.


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November 1—15, 2011 www.logisticsweek.com

Straights And Bends T

he nation’s aging transportation network costs US businesses and families about $130 billion a year, a sum he was a tax and a drag on the economy. Failing to upgrade the network could cost the US hundreds of billions dollars and hundreds of thousands of jobs by the end of the decade.

Barack Obama, urging Congress to pass the Transportation Bill

I

t reinforces the positioning of the supply chain as a key competitive weapon in enabling companies to reduce costs and increase sales. It highlights the need for excellence in planning (to balance demand and supply) and to provide the visibility of different demand patterns to enable the implementation of segmented supply chain strategy.

Dr Janet Godsell, from the Supply Chain Research Centre at Cranfield School of Management on how the Crimson & Co report reveals 2011’s biggest concerns within the supply chain.

R

unning your procurement purely on a short-term, point-in-time, cost-minimisation model is like shopping for rock-bottom price home insurance: it looks real smart until your house burns down!

In 2010-11, India manufactured 2.50 million cars, 12.671 mn motorcycles, 0.548 mn tractors, 0.408 mn LCVs, 0.344 million buses & trucks.

Bob Lutz, former vice-chairman of General Motors

B

angalore needed a global mall with a lot of retail depth and a design that gave the consumer a shopping experience like no other. The city has been waiting for a mall like Phoenix Marketcity and we expected between 30,000-35,000 footfalls and are extremely happy to say that we have gone beyond our expectations.

I

ndian consumers love premium and imported products. Hence, had we started from the bottom end of the market, consumers would have never accepted us when we entered the premium segment.

Kurush N Grant, ITC’s Executive Director

Atul Ruia, Managing Director, Phoenix Mills Ltd.

While 57 percent of goods in India are transported by road — the most inefficient, expensive and emissions-intensive mode of transport — the figure in China is 22 percent.

D

uring our extensive consultations, industry has raised a number of valid issues around transition (to the open market). As we all know, nothing good ever comes easy. Changes brings challenge, but it also brings opportunity.

Gerry Ritz, Canada’s Federal Agriculture Minister, promising to set up a “crop logistics working group” to deal with supply chain issues arising from the government’s plan to remove the Canadian Wheat Board’s monopoly over western wheat and barley sales.

F

or years, supply chain sustainability was driven by regulations that measured carbon emissions, hazardous materials and recycling. In 2011, we’ve seen a shift and organizations are broadening the definition of sustainability to focus on total energy efficiency.

W

e have seen that sales get a boost in the festival season, but this year sentiment has been tepid. We don’t expect a major upswing in the near future; the challenging economic environment is affecting industry.

Arvind Saxena, Director (Marketing & Sales), Hyundai

W

e sometimes forget the importance of logistics. It’s important to act to realize our logistics systems plan.

Boediono, Vice-President, Indonesia

Lorcan Sheehan, Senior Vice-President, Marketing, ModusLink

S

upply chain is a mystical world that only came into existence recently, which is why businesses need to adopt a completely new mentality.

Dirk Schmidt, Director, Logistics, Bosch Rexroth Corporation


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November 1—15, 2011 www.logisticsweek.com

POrts uPdates

Containing The Competition

In this section, LW will provide the latest in ports and shipping news and a status on how the major ports have fared this fortnight. Ship In Kakinada Port Catches Fire n A ship belonging to SCI and given on lease to the ONGC was caught in flames in the wee hours of October 20, 2011. No loss of life was reported. Accommodation suites and ship kitchen were completely gutted when flames engulfed them on Kakinada Seaports Ltd. There was no damage to the drilling equipment belonging to ONGC that was loaded on the ship.

Kerala Plans For Coastal Shipping n Kerala government has worked out a development program for ports and coastal shipping by linking ports and in-land waterways. As part of

the program, 17 small and medium ports would be integrated along with Vizhnijam and Vallarupadam Container Terminal in Kochi to improve the cargo movement through state coast. According to an estimate, about 20,000 trucks carrying cargo run through Kerala’s small roads daily.

the awards included the Nhava Sheva International Container Terminal for environment protection, General Insurance Corporation (GIC RE) for marine insurance and Bernhard Schulte Ship management (India) got the ship manager award.

Indian Receives Honors For Shipping

n Orissa held a meeting where all the port authorities were requested to share mineral ore export information regularly with the state government, in an effort to curb illegal mining. Paradip Port had conceded to impart with the information, also Haldia and Vishakhapatanam ports have agreed to share export details every fortnight.

n India was recognized at a recent award function for ports and shipping held at Dubai under various categories. Shipping Corporation of India won three awards at the annual Seatrade Middle East and Indian Subcontinent Awards held on October 17, 2011. Other recipients of

Ports, Orissa Share Info On Ore Export

Chennai Port Surcharge Affect Exim n Trade at Chennai port has been affected due to the levy of hefty charge under the guise of ‘Chennai Trade Recovery’ (CTR), a surcharge to deal with forced delays and heavy congestion at Chennai Port. No regulatory methods were imposed by the Port Trust management and the Commerce Ministry and the port continues to earn Rs 10,000 per container even after the port has been relieved of excess congestion.

Ashuganj Port Off-Limits For India n A full-fledged river transit facility through the Ashuganj port, Bangladesh is unlikely to

be made available to India for freight activities in the ‘near future’ due to the absence of necessary infrastructure at the port. In a recent meeting among Bangladeshi officials, various problems concerning the ports were discussed. A number of issues came forth like lack of required infrastructure, nonfinalization of transit fee, absence of an office for customs department, unavailability of shed for transit goods and lack of necessary arrangement for their security. A core committee has recently submitted a report recommending transit fees ranging from US$ 252 to $ 54,368 for each consignment of cargo using Bangladesh road, river and train routes.

Port Traffic This Fortnight Port of Chennai

Port of Mumbai

There was a miniscule drop in the quantity of cargo handled this fortnight by 0.5 percent, and compared to last fortnight, a steady decline in the quantity of container handled by 27.9 percent.

There was a tremendous rise in the quantity of cargo and container handled at the Mumbai Port this fortnight. Comparing to previous fortnight, there was steep rise in the quantity of cargo handled this time by 42 percent and a remarkable growth in the percentage of container handled by 72.4. (Data available for 12 days)

PORT OF CHENNAI

(Data available for nine days)

Total Cargo Handled

1,246,000 T

Total Container Handled

27,776 TEU

Port of Cochin Comparing to the last fortnight, the quantity of cargo handled this time around rose sharply by 55 percent and the container handled, too, rose by 20.2 percent.

PORT OF COCHIN

(Data available for ten days)

Total Cargo Handled

5,28,275 T

Total Container Handled

12,347 TEU

PORT OF MUMBAI Total Cargo Handled

3,60,526 T

Total Container Handled

1,307 TEU

Port of Paradip Where compared to last fortnight, there is a drop in the quantity of cargo handled by 15.4 percent this time.

PORT OF PARADIP

Port of Ennore There was a decline in cargo handling at the port this fortnight by 19.3 percent

(Data available for eight days)

Total Cargo Handled

(Data available for all 16 days) 23,74,940 T

Port of Tuticorin PORT OF ENNORE Total Cargo Handled

(Data available for six days) 13,84,413 T

The quantity of goods handled at the port this fortnight showed a rise by 21.7 percent, compared to last time.

Port of JNPT This fortnight, there was a slight drop in the percentage of container handled at the port by four percent.

PORT OF JNPT Total Container Handled

(Data available for seven days) 79,552 TEU

PORT OF TUTICORIN Total Cargo Handled

(Data available for nine days) 6,10,941 T

*Disclaimer: Due to public holidays, server breakdown, failure in updating website regularly and such related issues, traffic data for the above mentioned were extrapolated from select few days.


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November 1—15, 2011 www.logisticsweek.com CONTINUED FROM PAGE 4 against its competitors. The carrier should always provide complete transparency by measuring every process and participant in the chain. Speaking of forging lasting partnerships, the business should begin with clear communication of its philosophy and key performance indicators. An example of a company philosophy might be “customer-centric performance.” If the business is customer-centric and utilizes customer feedback to drive quality, the carrier should do so as well. Businesses should have a conversation with the carrier about how it incorporates customer feedback into its day-today operations. The business and carrier should then create a “shared” mission and service philosophy.

Because performance indicators vary from one business to the next - sometimes even within departments - carriers must have a clear picture of what these are and how their performance plays a part in their customers’ success. One way a business and carrier can create a shared system for managing performance is to create a monthly scorecard. This scorecard should provide information to ensure the business’ expectations are being met and the level of trust and confidence is not being compromised. Both should approach the use of a scorecard as an opportunity to welcome open dialogue - recognizing that each wants the best for each other. Businesses should also consider these additional factors when considering a long-lasting partnership with a shipping carrier:

What Matters In Transportation ON-­TIME DELIVERY  65  % Pick-­up  Performance  11% Claims-­free  Service  9%

Due diligence Businesses should do their homework so that they understand shipping terminology and can accurately discuss price and service.

Consistent performance follow-up Businesses should create a workable schedule to meet with their carrier to discuss performance and to manage any issues before they become a problem. A good rule of thumb would be to meet

on a quarterly basis to review each other’s needs and to discuss performance and opportunities. Open communication is key so ideas can be shared and expectations met.

Price versus service It has been said, “You get what you pay for.” This philosophy holds true when it comes to businesses and shipping carriers as well. Business should weigh the costs charged by a carrier against the level of ser-

vice the carrier is providing. The 2011 National Trends in Small to Medium-sized Businesses Survey also showed that more than one-third (39 percent) of those surveyed said capital expenditures are the same this year as in last year. Thirty-three percent say capital expenditures are higher this year than last and more the onequarter (28 percent) say capital expenses are less this year than last. This means that in spite of a weakened economy a third of the business executive surveyed are operating with increased budgets and maintaining their supply chain to get products from point A to point B without compromising availability, quality or cost. The author is Vice-President of Customer Service and Marketing at Saia, Inc. Ms. Buchholz can be reached at sbuchholz@saia.com.


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November 1—15, 2011 www.logisticsweek.com

surface transPOrt uPdates

THE LW CROSSWORD

One-Track Bind

1

A low-down on developments in surface transport last fortnight.

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1

RTIS system will provide the following information: (i) Train locations. (ii) Train running position (i.e. whether train is running on time or if running late and by how much. (iii) Train location with respect to next stopping station in terms of kms.

n The construction of 1000 kms of expressways under National Highways Development Project (NHDP) Phase-VI through Public Private Partnership (PPP) (basis in November, 2006) at a total cost of Rs 16,680 crore has been approved by the Union Government. In addition, there is a proposal to develop National Expressway No. NE II, i.e. Eastern Peripheral Expressway connecting NH-1 at km 36.083 near Kundli and terminating on NH-2 at km 64.033 near Palwal. The expressway projects are1. Vadodara-Mumbai (400 km) 2. Delhi –Meerut (66 km) 3. Bangalore –Chennai (334 km) 4. Kolkata -Dhanbad (277 km)

n The Government has undertaken Road Safety Audit of selected stretches of National Highways/Expressways with a view to strengthen road safety on highways. The specific aim of Road Safety Audit is that safety should be a prime postconstruction operative feature. The analysis of road accident data received from States/UTs reveals that drivers’ fault is the single most important factor responsible for accidents, fatalities and injuries. It constitutes 78.5 percent of the whole. The Union Ministry of Road Transport & Highways collects data on road accidents from all States/UTs in a format developed as per the Asia Pacific Road Accident Database (APRAD) project of United Nations Economic and Social Commission for Asia Pacific (UNESCAP).

REAL TIME TRAIN INFORMATION SYSTEM n To overcome limitations of the existing Train Running Information System, it was decided to develop GPS based train tracking system jointly by RDSO & IIT-Kanpur. The system has been developed and working successfully in number of trains. It has now been decided to open the Real-time Train Information System (RTIS) to public in few trains to begin with, with effect from October 19, 2011. Minister of Railways Shri DineshTrivedi inaugurated this facility during the Economic Editors Conference.

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

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11

10

12

11 12

13

13

14 15

14

16

15

16

17 17 18

19

18

22

20

22

24

19 20

21

21 23

23

EclipseCrossword.com

EclipseCrossword.com

across: 1. A manufacturer that turns the product of a raw materials supplier into a larger variety of products 6. number used to quantify a metric 9. Predictions of how much of a product will be purchased by customers 10. transfer of money for provision of goods or services 13. Communication standards that determine message content and format 14. A carrier selection criterion that considers the variation in carrier transit time 16. A state in which all the members of a group support an action or decision 18. business that takes title to products and resells them to final consumers 19. The concept of adding an element of human judgment to automated equipment 20. an organization’s central computer system 21. definition that is applied to the hardware which is used to build racks 22. practice of using a large box or carton to contain multiple smaller packages 23. rolling stock carriers use to facilitate the transportation services

down: 2. Process of making necessary adjustments to change or switchover the type of products produced on a manufacturing line 3. A term used for refrigerated vehicles 4. To utilize a third-party provider to perform services previously performed in-house 5. a truck trailer being transported on a railroad flatcar 7. Outbound logistics, from the end of the production line to the end user 8. multiple items that are produced simultaneously during a production run 11. understanding issues before they become apparent 12. An alphabetical listing of commodities 15. technique in which a ERP system traces demand for a product 17. A data point that differs significantly from other data for a similar phenomenon

DesTInaTIons New Delhi

New Delhi

Kolkata

Mumbai

Chennai

Bangalore

——

2,850

2,150

3,850

3,450

Kolkata

1,850

——

2,400

1,900

2,200

Mumbai

2,450

4,100

——

2,400

1,900

Chennai

3,900

3,125

2,250

——

850

Bangalore

3,300

3,450

1,650

850

——

Source: Trimurti Cargo Movers Pvt. Ltd.

*Rates are indicative Chief Editor and Publisher: Jacob Joseph Puthenparambil jacob@logisticsweek.com Publishing Director: Jayaram Nair jayaram@logisticsweek.com Group Editor: Anand Pandey aanand@logisticsweek.com Editor: Jayashree Mendes jayashree@logisticsweek.com Editorial Executives: Anuja A, Pritha Dey Chief Designer: Shivasankaran Pillai

Answers Across: 1. FABRICATOR, 6. MEASURE, 9. FORECASTING, 10. PAYMENT, 13. PROTOCOL, 14. RELIABILITY, 16. CONSENSUS, 18. RETAILER, 19. JIDOKA, 20. MAINFRAME, 21. RACKING, 22. OVERPACK, 23. EQUIPMENT Down: 2. CHANGEOVER, 3. REEFER, 4. OUTSOURCE, 5. PIGGYBACK, 7. DISTRIBUTION, 8. COPRODUCT, 11. PROACTIVE, 12. CLASSIFICATION, 15. PEGGING, 17. OUTLIER

orIgIn

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n The Cabinet Committee on Infrastructure approved the project of four laning of Vijayawada-Machlipatnam section of NH 9 in Andhra Pradesh under NHDP Phase IV-A on DBFOT basis in BOT (Toll) mode of delivery. The total estimated cost of the project is Rs.736 crore out of which Rs.130 crore will be for land acquisition, resettlement and rehabilitation and preconstruction. The total length of the project is 64.611 km. The concession period is 20 years including construction period of 24 months. The project will reduce the time and cost of travel. The project will be in Krishna district in Andhra Pradesh.

n The Physical Planing and

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9

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FOUR LANING OF SECTION OF NH 9

HRIDYESH TRIPATHI CALLS ON DR. C. P. JOSHI

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Works Minister of Nepal Shri Hridyesh Tripathi met the Union Minister for Road Transport & Highways Dr. C.P. Joshi to discuss issues regarding roads and infrastructure in Nepal. They discussed the development of infrastructure at Integrated Check Posts (ICPs) on Indo-Nepal border. Establishments of ICPs at 13 locations on international borders have been approved by the Government of India under a Plan scheme under 11th Five Year Plan. Out of 13 ICPs, 4 are located on India-Nepal border.

ROAD ACCIDENTS SURVEY

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NEW EXPRESSWAY PROJECTS

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MIDC, Navi Mumbai - 400 705, India and published at Bldg.4/6, Sona Udyog, Parshi Panchayat Rd., Andheri (E), Mumbai - 400069. No part of this publication may be reproduced or transmitted in any form or by any means including photocopying or scanning without the prior permission of the publishers. Such written permission must also be obtained from the publisher before any part of the publication is stored in a retrieval system of any nature. No liabilities can be accepted for inaccuracies

of any description, although the publishers would be pleased to receive amendments for possible inclusion in future editions. Opinions reflected in the publication are those of the writers. The publisher assumes no responsibilities for return of unsolicited material or material lost or damaged in transit. All correspondence should be addressed to Industrial Sourcing Media Private Limited.. All disputes are subject to the exclusive jurisdiction of competent courts and forums in Mumbai only.

Singapore: Hamburg Media Private Limited Red dot Building, 28 Maxwell road, #03-05, Singapore - 069120 Permit No: MICA (P) 179/08/2011 Dubai Office: Ashish Limaye adlimaye@gmail.com uK Office: Hamburg Media Limited 78 York Street London W1H 1DP, United Kingdom


11

November 1—15, 2011 www.logisticsweek.com

IntervIew

“Our objective is zero modifications” Infor India is a provider of enterprise applications and services helping companies to improve operations and drive growth. An insight into the company’s supply chain products. How does Infor help consolidate different aspects of the supply chain process? Souma Das (SD): As the third largest enterprise software company in the world, Infor offers a range of solutions from Enterprise Resource Planning (ERP), Supply Chain Management (SCM) to financial management and strategy execution. Infor10 - our latest innovation - delivers solutions tailored by micro vertical -industry (i.e. think bakeries or breweries rather than food and beverage). In the current global business climate, it is not just about survival of the fittest, but also about survival of the fastest; this is especially true for those tasked with managing and optimizing the supply chain. Infor10 has been built to require little or no customization and can be implemented in a shorter span of time. Infor10 Supply Chain Planning is a comprehensive suite of integrated applications that offer the best tools for achieving top performance by consolidating different aspects of supply chain planning. It’s built on a unique, advanced statistical forecasting engine that intelligently predicts demand rather than repeating shipping history. Infor10 Supply Chain Planning enables comprehensive “what if” simulations that allow businesses to make decisions based on the most complete information. Because the solution is specialized by industry, it can account for industry-specific constraints such as chemical tanks, baking ovens, and butchery freezers to maximize throughput at least cost. How does Infor help manage the transportation and warehousing needs of customers effectively? SD: Infor’s WMS represents a new generation of warehouse management applications that enable companies and supply chain partners to be integrated, increasing operational efficiency. It helps businesses to reduce warehousing costs by optimizing productivity of warehousing assets such as space, people, and equipment. The latest open standards make it easier to take advantage of high productivity

Souma Das MD & VP Sales, Infor India

tools such as RFID, bar-coding, and voice-directed technologies. Infor owns a majority market share in Asia Pacific for warehouse management. In fact, our clients in India include largest retail operators like the Future Group, Tata Trent, Aditya Birla Retail and Madura Garments and LSPs like Future Supply Chains, DIESL, Allcargo Logistics to name a few. When it comes to transportation, Infor has more than 25 years of experience in enterprise asset management (EAM), and Infor10 EAM Fleet Management has a proven track record for delivering innovation and value. The best-in-class, featurerich asset and maintenance functionality makes it easier to process warranty claims, and better manage fleets of all sizes. Vehicle performance also improves through a more comprehensive maintenance strategy to minimize down time. Infor EAM Fleet Management tracks physical assets, schedules preventive and predictive maintenance, manages spare parts, and creates paperless business processes with handheld technology. Infor10 Transportation and Logistics solution also helps route planning and optimization solutions for milk run requirement for food and beverages companies, for example- PepsiCo, or secondary requirements for FMCG or retailers. 3. Explain how Infor can help improve after-market service? SD: These days, it’s not enough just to be more proactive

in tracking and managing performance of your service and maintenance organization. Businesses need to create a fully-connected service organization that drives value across the entire enterprise. Infor’s Service Management helps balance customer satisfaction, resource utilization, and profitability. It delivers fully integrated, robust, and scalable automated field service management. It improves visibility of assets in the field, boosts service performance and increases revenue, while enabling a business to provide aftermarket services more proactively and profitably. How does Infor improve the planning and decision-making skills of employees in regards to supplies, manufacturing and packaging? SD: With today’s global supply chain, maintaining optimal balance between available stock to meet service levels and investment in inventory is a complex trade-off. Most companies err on the side of caution by keeping stock levels high as a buffer against demand uncertainty. However this holds up cash and can result in drainage of resources. Infor SCM Advanced Scheduler is a constraint-based scheduling solution that addresses the unique challenges of managing the capacity of vessels, tanks and lines, and the flow of product between them. It gives organizations the ability to adjust schedules on a minute’s notice with automated optimization techniques and drag-and-drop capabilities, and create personalized views of schedules targeted toward specific production operations. It also means packaging lines and materials are synchronized to be available exactly when production is finished, to maximize available shelf life and reduce temporary storage. The solutions enable businesses to manage coproducts and by-products, the complex interdependencies of products for processes – as well as managing the materials used in these production processes. Do you customize Infor software to suit consumer needs? SD: One size most definitely

does not fit all in the enterprise software market. Yet, some enterprise software companies still attempt to force fit generic solutions into business. The result often is a heavily modified solution with various customisations and integrations for third party solutions that no one can fully support. With Infor10, our objective is zero modifications. Infor believes integrations, configurations, and Business Intelligence (BI)/analytics shouldn’t be part of the implementation. They should be part of the application. We are attempting to dismantle the billion dollar business of extensive customization of business software. This is because - put simply — it is not in the customer’s best interest. Infor10 includes capabilities that deliver value right out-of-the-box, including automatic integrations and analytics with built-in alerts and workflow. These should be standard parts of a product, not add-ons. At present, who are your competitors in the market? SD: At present while we compete at one end with the niche best-of-breed suppliers in the areas of BI, WMS, ERP etc. and at the other end with the large scale providers, no one in the market has what we do: deep industry functionality with end-to-end capabilities combined with a simple and effective middleware solution to make it all work together. What is the demand for technology in Indian logistics and operations? How has India received Infor products? SD: The demand for technology in Indian logistics and operations is huge. Specifically WMS and Radio Frequency Identification (RFID) have grown immensely over the past three to five years. While RFID has, in many cases, been slow to live up to the expectations of the industry, it is really starting to emerge as a serious technology and many retailers who invested in it are now realizing benefits. It is time now for other technologies which have yet to fully find their feet in India (bar-cod-

ing, transport management systems (TMS) and global positioning systems (GPS)) to follow suit. In future, what aspect of supply chain do you aim to improve upon with Infor solutions? SD: One of the hottest areas in supply chain right now is the development of Sales and Operations Planning (S&OP). Quite frankly, the growth in this area has exceeded our expectations. This has been driven largely by a remarkable evolution in customer demand. In the early stages S&OP focused on getting better BI into operational plans and balancing supply to demand. However with the addition of work flow processes to automate and then optimize much of this balancing, business have been incredibly proactive and fused the S&OP ‘architecture’ with promotion campaigns, new product development and even R&D (especially in the consumer goods / FMCG industry). The ‘traditional’ S&OP processes have quickly become a comfort zone – and customers are now questioning the boundaries. Technology has had to evolve to offer a range of specific solutions. In addition to the initial planning and BI systems, the injection of workflow technology has been critical, and the ‘what-if’ engines of optimization /simulation have been part of the appeal to FMCG business looking to integrate product portfolio planning and new product development into the S&OP. This has, of course, developed a huge requirement for integration – something that we are already addressing with Infor10. Here ION is the foundation for what Infor10 offers, integrating Infor and (importantly) non-Infor applications, enabling information sharing among applications and providing rich analytics. This is now delivered in a personalized and easily presentable fashion on not only desktops and laptops but on mobiles and tablets, and in a digestible form similar to the way we’re using social media. This all combines with the ultimate aim in mind; to enable customers’ supply chain operations to beat the competition.


12

November 1—15, 2011 www.logisticsweek.com

LogisticsWeek November 1-15, 2011  

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