smart logistics - april 2012

Vol. 03 | Issue 01 | APRIL 2012 ` 100/-

APRIL 2012 • SMART LOGISTICS • 3

VIEWPOINT VIEWPOINT

LET’S MOVE MOUNTAINS

Archana [email protected]

PASSION and commitment have the power to move mountains. Being part of the logistics and SCM industry, we all know how to move things…. including mountains (read problems). As we turn 2 this April, we thought that the best way to celebrate this 2nd Anniversary is by giving rather than gaining, and the best gift that we could think of are learnings, knowledge sharing and providing inspirations from the movers and shakers of this industry.

But does the industry need it? For sure, it does! India stood 47 on the ‘2010 Global Logistics Performance Index’, according to the World Bank survey. Plus, logistics occupies about 13-14 per cent of the GDP as compared to other developed countries. With cost steeping and infrastructure crumbling, we sure need all the growth strategies, inspirations, working plans and data analysis. To state simply, this Anniversary Issue though lean, is the means towards that end, which is to make our logistics and supply chain management systems more robust and growth oriented.

Towards this task, 10 Pillars of Supply Chain Excellence have been identified and decoded. These carefully chosen areas of critical importance include talent acquisition, inventory management, achieving global footprints, financing options, infrastructure, technology, warehousing, route optimisation, sustainable logistics and LSP selection. Each of these critical pillars of excellence has been analysed in this issue and the learnings are for all of us to take advantage of by implementing the same in our processes and planning.

Talking about learnings, the most ‘sought after’ experts in this industry pouring their insights and sharing their trade strategies, makes this special edition a collectors’ issue. When the likes of S Hajara, Kenneth Koval, Ajay Mittal and Vineet Kanaujia share their invaluable insights, it’s the leadership ladder that they are offering. Then again, when ‘men with many hats’ like Lloyd Sanford, Ashu Khanna, Arif Siddiqui and Zubin Poonawalla exclusively impart knowledge and be the mentors that you always needed, you know that every word is wisdom. In this edition, these chosen leaders have delivered some insightful future trends and strategies.

Staying with the future, while being firmly planted to the present, we have also attempted to predict the future, not by peering through the crystal ball, but aided by thorough research and analysing data. A new study, ‘Delivering Tomorrow: Logistics 2050’, identifies several complex versions of the future, which includes scenarios ranging from untamed economy to global resilience to customised lifestyles to extreme protectionism. It’s an interesting insight into the probable future and an opportunity to align ourselves with the future. As an expert points out, it is indeed true that in the present complex economic, political and social climate, it has become practically impossible to make linear forecasts, but options in future forecasts do expand our horizons and prompt us to think about alternatives.

While there is no alternative to chart your own growth paths by being innovative and responding to the market demands in the most efficient and cost-effective way, by creating and crafting this very special Anniversary Issue for each of our readers, we, at Smart Logistics, are hoping and wishing that when it comes to filling the knowledge and information gap, we are the preferred option for you without you wanting to look for alternatives.

Be the sponge, soak the knowledge, have a great read!

VOL. 03, NO. 01 APRIL 2012

ALSO IN THIS ISSUEVIEWPOINT 3NEWS ANALYSISSupply Chain Outlook: Delivering Tomorrow: Logistics 2050 8Rail Budget 2012-13: Aimed At Upping Profi ts & Performance 53Rail Freight: Moving Higher Coal Traffi c Amid Constraints 55EVENTSTrade Show Tracker 57

CURTAIN RAISERIndia Warehousing Show (IWS) 2012:Offering A Complete Logistics Package 59PRODUCT UPDATE 60PRODUCT & ADVERTISERS’ INDEX 64PRODUCT & ADVERTISERS’ INQUIRY FORM 65

CONTENTSLOGISTICS MASTERMINDS

‘Every Logistics Professional Must Focus On Understanding Customers’ Needs’ Sabyasachi Hajara, Chairman & MD, SCI

10

‘I Am Not Afraid Of Hiring Smart People’ Kenneth F Koval, VP – India, FedEx Express 12

‘It Is My Dream To Create A Revolution In India’s Logistics Evolution’ Ajay S Mittal, Group Chairman & MD, Arshiya International

14

‘The Major Challenge For Us Was To Implement Time-defi nite Delivery’ Vineet Kanaujia, VP – Marketing, Safexpress

16

WHAT YOU GAIN, WHAT YOU GIVEA Rollercoaster Ride Lloyd Sanford, MD, Applied Logistics India 18

Exploring The World Of Entrepreneurship Ashu Khanna, Founder, VALYOU CONSULTANTS 20

Ensuring An All-round Performance Arif Siddiqui, Founder, Coign Consulting 22

Devising Strategies To Achieve Off The Charts Results Zubin Poonawalla, Promoter & MD, Poonawalla Consultants

24

10 PILLARS OF EXCELLENCE

INFRASTRUCTUREBuilding A Strong Foundation 28TALENT RETENTIONAttracting The Best In Class 30INVENTORY MANAGEMENTEnsuring Rich Dividends 32GOING GLOBALVenturing Into International Waters? 36FINANCING OPTIONSAt The Heart Of All-round Development 39TECHNOLOGYBringing Logistics On The Fast Track 42WAREHOUSINGMaking Storage Highly Competitive 44ROUTE OPTIMISATIONCharting A ‘Route’ Map For Success 46SUSTAINABILITYDoing The Right Thing At The Right Time 48LSP SELECTIONGearing Up To Meet Compelling Demands 50

Views and opinions expressed in this magazine are not necessarily those of Infomedia18 Ltd, its publisher and/or editors. We at Infomedia 18 Ltd do our best to verify the information published but do not take any responsibility for the absolute accuracy of the information. Infomedia 18 Ltd does not accept the responsibility for any investment or other decision taken by readers on the basis of information provided herein. Infomedia 18 Ltd does not take responsibility for returning unsolicited material sent without due postal stamps for return postage. No part of this magazine can be reproduced without the prior written permission of the publisher. Infomedia18 Ltd reserves the right to use the information published herein in any manner whatsoever.

Printed by Mohan Gajria and published by Lakshmi Narasimhan on behalf of Infomedia 18 Ltd.Executive Editor: Archana Tiwari-NayuduPrinted at Infomedia 18 Ltd, Plot no.3, Sector 7, off Sion-Panvel Road, Nerul, Navi Mumbai 400 706, and published at Infomedia 18 Ltd, ‘A’ Wing, Ruby House, J K Sawant Marg, Dadar (W), Mumbai - 400 028. SMART LOGISTICS is registered with the Registrar of Newspapers of India under No. MAHENG / 2010 / 34343. Infomedia 18 Ltd does not take any responsibility for loss or damage incurred or suffered by any subscriber of this magazine as a result of his/her accepting any invitation/offer published in this edition.Infomedia 18 Ltd is the publishing arm of Network 18.

FOUNDER & EDITOR, NETWORK 18Raghav Bahl

PRESIDENT & EDITORIAL DIRECTOR, TV 18Senthil Chengalvarayan

EXECUTIVE EDITORArchana Tiwari-Nayudu

ASSISTANT EDITORPrerna Sharma

EDITORIAL TEAMSumedha Mahorey, Kimberley D’Mello, Nishi Rath, Michael Anthony,

Arindam Ghosh (Delhi), Suprita Anupam (Bengaluru), Abha Mishra, Paskaline L Sebastian

ASSISTANT ART DIRECTORVaruna Naik

DESIGN TEAMSanjay Dalvi, Uttam Rane

CHIEF PHOTOGRAPHERMexy Xavier

PHOTOGRAPHYNeha Mithbawkar, Joshua Navalkar

BUSINESS CONTROLLERSPukha Dhawan, Lovey Fernandes, Akshata Rane, Deepak Bhatia,

Shwetha ME, Jayashree N, Sugandha Kulkarni, Shefali Mahant

PRINTINGEXECUTIVE VICE PRESIDENT

Ananth R Iyer

ASSISTANT GENERAL MANAGER - PPCShekhar Khot

PRODUCTION TEAMDnyaneshwar Goythale, Surekha Karmarkar, Ravikumar Potdar, Ravi Salian, Sanjay Shelar

OVERSEAS CONTACTRingier Trade Media Ltd CHINA

1001 Tower 3, Donghai Plaza, 1486 Nanjing Road, West, Shanghai 200040, China Tel: +86-21 6289 – 5533 Ext. 368, Fax: +86-21 6247 – 4855

(Craig Shibinsky) Email: [email protected] Trade Media Ltd HONG KONG

9/F, Cheong Sun Tower, 118 Wing Lok Street, Sheung Wan, Hong Kong Tel: +852 2369 – 8788 Ext. 21, Fax: +852 2869 – 5919

(Octavia Au-Yeung) Email: [email protected] Trade Media Ltd TAIWAN

Room 3, Fl. 12, No. 303, Chung Ming S. Rd., Taichung, TaiwanTel: +886-4 2329 – 7318 Ext. 16, Fax: +886-4 2310 – 7167

(Sydney La) Email: [email protected] Trade Media Ltd GERMANY, AUSTRIA, SWITZERLAND

Tel: +41-44 734 0472, Fax: +41 44 734 0680Email: [email protected]

USA Tel: (513) 527-8800 Fax: (513) 527-8801

Email: [email protected]

USA Alfredo Domador, 6505 Blue Lagoon Drive, Suite 430 Miami, FL. 33126, USA

Tel: (305) 448-6875, Fax: (305) 448-9942

GROUP CEO, NETWORK 18B Sai Kumar

CEO-PUBLISHING, INFOMEDIA 18Sandeep Khosla

EVP-HUMAN RESOURCESSanjeev Kumar Singh

ASSOCIATE VICE PRESIDENTSudhanva Jategaonkar

ADVERTISING SALESShashin Bhagat (Ahmedabad)[email protected] B (Bengaluru)[email protected] Hara Subramaniam (Chennai)[email protected] N (Coimbatore)[email protected] Kalyan Chakravarthy (Hyderabad)[email protected] Gokhale (Indore)[email protected] Bidawat (Jaipur)[email protected] Abhik Ghosal (Kolkata)[email protected] Dhingra (Ludhiana)[email protected] Yadav (New Delhi)[email protected] Dass (Pune)[email protected] Pathak (Vadodara)[email protected]

MARKETING TEAMGanesh Mahale, Prachi Mutha, Varsha Nawathe, Abhay Borkar

NEWSSTAND AND SUBSCRIPTIONSDISTRIBUTION HEADSunil Nair

DEPUTY GENERAL MANAGERManoj Palsay

SENIOR MANAGER - SUBSCRIPTIONSSheetal Kotawdekar

CO-ORDINATORSRahul Mankar, Anant Shirke, Sarita Quadros,Chaitali Parkar, Kamlesh Mathkar, Vaibhav Ghavale

SERVICESSUBSCRIPTION SERVICES For subscription queries, write [email protected] or call +91 22 30034631-34 or toll free 1800 200 1021PERMISSIONS For subscription to copy or reuse material from SEARCH,Write to [email protected]

• Monthly Issue Price: ` 100 • Annual Subscription: ` 799

8 • SMART LOGISTICS • APRIL 2012

NEWS ANALYSIS SUPPLY CHAIN OUTLOOK

“THE pace of change has rapidly accelerated in recent years. In this complex economic, political and social climate, it has become practically impossible to make linear forecasts. In a world that is becoming harder and harder to predict, we have to expand our horizons and think about alternatives. We can devise robust strategies and set the right course only if we have gained an understanding of different perspectives,” said Frank Appel, CEO, Deutsche Post DHL.

The study, which is complemented by a series of multifaceted essays regarding various aspects of the future, is the third research project conducted in the group ‘Delivering Tomorrow’ series. By publishing this groundbreaking series of studies, Deutsche Post DHL is striving to engage others in a dialogue about core issues that will shape the world in future decades.

“As the leading provider in this key global industry, we consider it part of our responsibility to intensively explore social and business issues that will shape the future,” Appel said. The series began in 2009

with an examination of customer expectations in 2020. A year later, it delved into another important trend of the future – the shift to more sustainable logistics.

The development of the study was supported by 42 highly respected experts, including Klaus Töpfer, former German Environmental Minister and Director of the UN Environmental Programme; Fatih Birol, Chief Economist, International Energy Agency; and Michael ten Hompel, MD, Fraunhofer Institute for Material Flow and Logistics; as well as leading representatives of organisations such as the World Economic Forum, the Gesellschaft für Konsumforschung (GfK), the Rocky Mountain Institute, the Copenhagen Institute for Futures Studies, the World Business Council

for Sustainable Development and Greenpeace International.

The central finding of the study is a comprehensive collection of five credible visions of the future. They outline how different the world could appear in 2050 in terms of the degree of globalisation, the extent of economic & social development, predominant technology standards and environmental conditions. The study describes five far-reaching, occasionally radical, versions of life in 2050.

All scenarios share a common element – the broadly transformed role of logistics. The overall demand for logistics services does indeed climb in most of the five alternative scenarios. But the particular requirements placed on logistics providers and the special challenges they face vary widely from scenario to scenario.

The methodological starting point for developing alternative scenarios of the future in this year’s study was an in-depth analysis of key factors and their linking to those trends that could mould the world in future decades. Unlike classic, isolated analysis and projection methods, the technique

Only those who think about alternatives can devise robust strategies. With this thought & notion, Deutsche Post DHL, is taking a far-reaching look into the future of trade, business and society. Its recent study, ‘Delivering Tomorrow: Logistics 2050’, examines fi ve different scenarios of life in 2050. These fi ve visions of the future are based on a detailed analysis of the most critical factors – including trade and consumption patterns, technological & social trends as well as climate change – and estimate their probable impact on people’s behaviour and values in 2050.

Logistics 2050LDelivering Tomorrow

The resilient world in 2050, with regionalised trade, relies on the logistics industry that ensures

supply security as a top priority, with backup infrastructure to

guarantee reliable transport in unstable and hazardous times.


used in this scenario with the help of leading experts outlines the possible directions that the most important parameters could take and links them to scenarios.

These possible directions were then discussed and evaluated during workshops. With this approach, various development paths over the next four decades and several complex versions of the future could be systematically and comprehensibly identified.

AN OVERVIEW OF THE FIVE SCENARIOSScenario 1: Untamed Economy – Impending CollapseThe world is characterised by unchecked materialism and mass consumption. This non-sustainable way of life is fed by the relentless exploitation of resources – a development that stokes climate change and causes natural disasters to mount.

In a world characterised by tumultuous growth, the demand for logistics and transport services climbs sharply. A global transportation supergrid ensures a rapid exchange of goods between centres of consumption. But as climate change advances, supply chains are increasingly disrupted – a development causing additional challenges for logistics companies.Scenario 2: Megaefficiency in megacities‘Megacities’ have emerged as the world’s power centres. They are both the main drivers and the beneficiaries of a paradigm shift towards ‘green’ growth. To overcome the challenges of expanding urban structures, such as congestion and emissions, megacities have become champions of collaboration.

Robotics has revolutionised the world of production and services. Consumers have changed their habits: Products are now usually rented, instead of purchased. Highly efficient traffic concepts have relieved congestion. A global supergrid with mega transporters, including trucks,

ships and aircraft, as well as space transporters, has opened important trade connections between the megacities of the world. The logistics industry has been entrusted to run city logistics, utilities & system services for airports, hospitals and shopping malls.Scenario 3: Customised LifestylesThis scenario describes a world where individualisation and personalised consumption are pervasive. Consumers are empowered to create, design and make their own products. Newly developed 3D printers play a major role here. This leads to a rise in regional trade streams, with only raw materials and data still flowing globally.

Customisation and regional production are complemented by decentralised energy systems and infrastructure. The implications for logistics include a vastly reduced need for long-distance transportation of finished and semi-finished goods due to the localisation of value chains. Logistics providers organise the entire physical value chain. They also handle the encrypted data streams required for the transmission of construction and design blueprints for 3D printers. The decentralised organisation of production turns strong regional logistics capabilities and a high-quality

last-mile network into important success factors.Scenario 4: Paralysing ProtectionismThis scenario describes a world where, triggered by economic hardship, excessive nationalism and protectionist barriers, globalisation has been reversed. Technological development is lagging. High energy prices and dramatic scarcity of supply lead to international conflicts over resource deposits.

Implications for the logistics industry include challenges posed by the decline in world trade and the resulting regionalisation of supply chains. Governments view logistics as a strategic industry. As relations between some blocs and countries are extremely strained, logistics providers in bloc-free countries act as intermediaries in international trade brokerage.Scenario 5: Global Resilience – Local AdaptationThis scenario describes a world initially characterised by a high level of consumption, thanks to cheap and automated production. However, due to accelerated climate change, frequent catastrophes disrupt supply chains and lean production structures, resulting in repeated supply failures. The new economic paradigm is distinguished by a shift away from efficiency maximisation to vulnerability mitigation and resilience.

This radical move towards redundant systems of production and a change from global to regionalised supply chains allow the global economy to better weather troubling times.

The resilient world in 2050, with regionalised trade, relies on a logistics industry that ensures supply security as a top priority, with backup infrastructure to guarantee reliable transport in unstable and hazardous times. Instead of complex just in time delivery processes, huge warehouse structures located close to the manufacturer are seen as indispensable buffers.

Source: DHL

AAGLOBAL TRANSPORTATION SUPERGRID ENSURES A RAPID EXCHANGE OF GOODS BETWEEN CENTRES OF CONSUMPTION. BUT AS CLIMATE CHANGE ADVANCES, SUPPLY CHAINS ARE INCREASINGLY DISRUPTED – A DEVELOPMENT CAUSING ADDITIONAL CHALLENGES FOR LOGISTICS COMPANIES.


LOGISTICS MASTERMINDLOGISTICS MASTERMIND SABYASACHI HAJARASABYASACHI HAJARA

JOURNEY FROM BEING AN IIM GRADUATE TO JOINING THE SHIPPING INDUSTRY Well, my journey has really been an enriching one. To start with, I am the first MBA graduate to join Shipping Corporation of India (SCI). I joined SCI straight from Indian Institute of Management-Calcutta (IIM-C) in 1973. I am one of the very few IIMiites, who has never left his job throughout his career. I will be completing 40 years in SCI in December 2012. I was possibly the first Indian to have been nominated as Vice President of the International Shipping Federation, London, which is the main association representing international shipowners in forums like International Labour Organisation (ILO) and International Maritime Organisation (IMO).

I was also selected as a Vice Chairman of the International Shipowners association in the negotiation/discussions, which culminated in the adoption of a very important

convention known as Maritime Labour Convention (MLC).

As far as the Indian shipping industry is concerned, I am the first person in independent India who has had the pleasure and privilege of being nominated as President of the Indian National Shipowners Association (INSA), which represents the entire Indian shipping fraternity, for five years in a row. INSA members own about 90 per cent of the total Indian tonnage. As far as the world’s

shipping fraternity is concerned, I have been on the board of World Maritime University, Sweden, for the last six years. I am also happy to have represented India in the IMO during several instances.

CHALLENGES FACEDI would like to start with how the public sector’s mental makeup is slightly different from that of the private sector and how it makes it very difficult for one to motivate his colleagues, peers

‘Every logistics professional must focus on understanding customers’ needs’Graduating from the prestigious Indian Institute of Management, Calcutta, he joined Shipping Corporation of India (SCI) on May 2, 1973. On September 1, 2005, he took charge as Chairman and Managing Director of SCI. With vast experience in various aspects of shipping, he has been an iconic fi gure to look up to. From receiving accolades likes ‘Innovator Of The Year’ award and ‘CEO with HR Orientation Award’, Sabyasachi Hajara is considered to be one of the pioneers in not only the Indian, but also the global shipping industry. Through this interview with Nishi Rath, he sums up his journey to be the numero uno in the industry and the challenges faced in these exciting yet challenging times. Excerpts…

Imag

e C

ourte

sy: N

eha

Mith

baw

kar


and subordinates to really get involved in marketing. By the time I joined and little thereafter, SCI had emerged as the No. 1 shipping company in the country and there was a belief that we are so big that customers will automatically come to us. I considered this to be a very wrong notion, particularly because the shipping industry is so intensely competitive, not only within the country, but all over the world.

If you have to be successful, you must lay tremendous emphasis on marketing – in reaching out to customers, finding out what they need in your service and then adapting your service to meet their expectations. Although I was successful in making this point clear, it was the biggest challenge to get the SCI team to really go out and do effective marketing.

Another challenge for us was government procedures, which are sometimes considered to be much more important than the commercial requirements. Talking about procedures, yes being a government company, you cannot go beyond a limit, but, nevertheless, you have to try and always adjust your procedures so that you can be as commercially efficient as your counterparts.

Talking about the Indian shipping industry, the biggest challenge we have been facing is that many of our neighbours and other countries across the globe have a very facilitative regime for shipping. Shipping is the most internationally competitive industry because there is no commercial barrier there.

So, one has to be extremely competitive, but unfortunately, in India, the regime, particularly the fiscal and the commercial regime, is not really facilitative for the shipping industry. We pay tax to the extent of 8-9 per cent in good years and now, because we are on the tonnage tax regime, even if you are losing money, you have to pay tax. When we compare this with most of the regimes, the shipping industry barely pays 0.5-1 per

cent tax. This makes it very difficult for us to compete with our foreign counterparts.

VARIOUS ROLES PLAYED AT SCI To start with, when I was a junior/middle-level executive posted in Kolkata, I handled various sectors. For quite sometime, I was handling the continental desk, i.e., India-Europe service. As long as I was in Kolkata, which ever service I handled, I ensured that SCI had the leadership position. SCI’s standing was always the highest among all its competitors.

I had the opportunity to develop few trades, like the woolen carpet and garments from Nepal that used to be always air freighted. I took the initiative and went on to explain this to the woolen carpet and garment exporters in Kathmandu. This was during 80s and early 90s. In those days, there used to be a lot of cooling-off period for the air freight and these consignments used to lie nearly for four weeks at the Kathmandu airport.

So, I proved to them that since containerisation is a much faster process of shipment, by moving it through road between Kathmandu to Haldia, thereafter Kolkata, and then shipping them in containers to Germany or even the US, was almost as time effective as air freight in those days. The freight element was also very much lower – it was around 1/6-1/7th of the air freight. So, for the very first time, I could induce many exporters to shift their shipments from air to sea. I was also involved in setting up the Inland Container Depots (ICD) at Guwahati and subsequently, the ICD at Amingaon for tea exports out of Assam regions predominantly to Europe and to some other parts of the world as well. Again, through our efforts, we could make sure that SCI emerges to be by far the largest carrier from the ICD. These, I would say, are some of my initial achievements.

Thereafter, I became General Manager of the Bulk Carrier and

Tanker Division and during that time, SCI, for the first time, had commenced LNG shipments. So, in a way, I had undertaken the pioneering role to get SCI firmly established in this niche segment, where, till date, SCI is the only Indian player.

At present, we partly own and operate three LNG ships, two are completely manned and managed by us and the third one is, at the moment, manned by us and will be managed by us very soon in 2012 itself after the Japanese partners hand it over to us. We are the only Indian shipping line which has presence in the LNG shipment segment. I was also instrumental in this initiative.

IF NOT IN SHIPPING…It is a very difficult thing to answer. As a student, I did my chemistry honours and was thinking of studying petrochemicals and joining the petrochemical industry. Instead, I joined IIM-C and ventured into shipping. As a child, I had the ambition of becoming a doctor. But now, I am here in the shipping industry since almost four decades.

MESSAGE TO BUDDING LOGISTICS PROFESSIONALS The logistics industry has tremendous potential in India, as it has not been developed to the extent as has been done in China, the US or Europe. We lack logistics infrastructure, but every challenge is also an opportunity. As logistics is now considered to be the most important thing for development of trade and economy, I would definitely tell my young friends who are looking forward to making a career in the industry, to be customer focussed. It is the most important thing and as long as you are true to your profession and you genuinely have your customers’ interest at heart, you can deliver fantastically.

[email protected]


LOGISTICS MASTERMINDLOGISTICS MASTERMIND KENNETH F KOVAL KENNETH F KOVAL

BRINGING GLOBAL BEST PRACTICES TO INDIA…India, one of the BRIC countries, is fast developing. It is already the fourth largest market in the world and is rapidly growing to take on the third position. Compared to most countries, India lags in terms of quality infrastructure, which is one of the biggest hindrances in its growth trajectory. That is probably one of the strongest reasons

for India to incur logistics spend to the tune of 13 per cent of its GDP. At the time when we had set up our base in India, the Indian consumers were very price sensitive. Since inception, we have been in the process of convincing our customers that smooth delivery of goods is attached to certain aspects which are beyond price. These include speed, accuracy and reliability – the three pillars of supply chain excellence.

Having said that, India has been one of the most ambitious projects for me; even though I had encountered challenges in the journey, but that kept me motivated to deliver better than the best and think out-of-the-box to satiate customers’ needs.

UNDERLYING PHILOSOPHY OF FEDEXOur underlying philosophy is ‘people, service, and profits’; we call it PSP. In line with our philosophy, we take care of people and develop their core competencies. They, in turn, provide good service to customers, which eventually leads to higher profitability for the company. This has been our philosophy from Day 1 of our operations. It is a practice that we follow globally.

PURPLE PROMISEThe purple promise stands for ’I will make every FedEx experience outstanding’. We treat each and every consignment as a golden package for our customers. So, our employees need to understand that this golden package is really important for the customer. In this journey, we make sure that both the sender and the recipient get

outstanding service.

GREEN INITIATIVES BROUGHT TO THE FOREOne of the major initiatives in this regard is reducing air emissions from jet planes. We have been investing in 777 Freighter as the aircraft will offer improved payload capacity, thus addressing the growing need for additional space as well as further

A fi rm believer in keeping people before profi ts, Kenneth F Koval, VP – India, FedEx Express, has been an exemplary personality in the world of logistics. Having a wide experience in operating out of various countries, Kenneth brings with himself a rich source of knowledge to take the India growth story forward. In this freewheeling interview with

Prerna Sharma, he speaks about making every FedEx experience outstanding and delivering the vision of ‘One FedEx’. Excerpts…

‘I am not afraid of hiring smart people’

Imag

e C

ourte

sy: J

oshu

a N

aval

kar


underlining our commitment to offering unparalleled connectivity to our customers in India. The new Boeing 777F is the world’s largest twin-engine cargo aircraft, which delivers operational efficiencies as well as offers greater fuel efficiency and lowers carbon emissions.

We are sure that it will reap significant rewards in terms of reducing emissions. We are looking at alternative fuels of jets. But that will not materialise before 2030. We have already started reducing the amount of time we plug in our aircraft on the ground, which again reduces emissions. At various places around the world, we actually have bicycles (in Paris for instance, downtown), which are obviously much more eco-friendly. We also have electric vehicles. Additionally, in Hyderabad, we have an all-gas vehicle. So, in India we are doing significant work.

CHALLENGES FACED WHILE STARTING OPERATIONS IN INDIAWe had faced both internal as well as external challenges. When I came to India, we were actually two separate companies – PAFEX and a core FedEx Group. The biggest challenge was to fully integrate the two business entities and ensure that all the employees understand the philosophy, the purple promise to keep the growth momentum going, and we work as one team.

The other thing that we did was obviously establishing ourselves strongly in the market, which we did by acquiring PAFEX as well as AFL & UFL. The acquisition of AFL & UFL gives us a complete portfolio of products in India and we will soon have them all branded FedEx. It will be one big portfolio to service our customers efficiently. The latest challenge is always the biggest challenge – for me it is India. India’s growth has been a tremendous achievement. The challenges that we encounter on a daily basis has been a big motivation for me.

MANTRA TO BECOME THE MOST PREFERRED SUPPLIER OF CHOICEIt obviously depends on customers’ interpretation. What we are trying to do is to first make it easier for our customers to select the best services that suit their needs. On the international front, we have more clearance gateways.

We have more flights in & out of India and, with the acquisition of AFL, we have expanded our service offerings to reach more customers. We have also started a ground network, which is growing very strongly. If we can offer our customers a full portfolio and offer them value for money, we believe that we will become the carrier of choice. The underlying notion is that you really do not need to convince your customers, the trick lies in understanding your customers’ needs.

LEADERSHIP STYLEI am not afraid of hiring smart people. I make sure that I promote smart people and then work as a team to move forward. I firmly believe that you cannot do everything on your own. When we entered in the Indian market, we spent a lot of time with our employees to make them understand and imbibe the ultimate corporate vision. I believe in having clear and transparent communication with the team so that we work in unison. We really have a vision of ‘One FedEx’. We communicate this message to our employees and I take pride in saying that it is working wonders for us.

ENTHUSING TEAMThe very first thing we did was to communicate the ultimate vision to our employees. We also made sure that they understand their crucial role in making this vision a reality as they cannot deliver the purple promise without understanding the brand vision well. We also standardised benefits for employees. In this way, we were able to get the whole team

on board to carry forward the growth momentum.

TAKING ON CHALLENGES EVERY DAYI would want to remark that it especially stands true for India. We face almost a unique challenge every day. In India, the service tax changes from 10-12% almost over night. In such circumstances, we have to be a bit flexible. Worldwide, the company understands that need to be flexible to carry on the business activities in India. That is why we are able to quickly adapt to new regulations as well as changes in our organisation. While doing these, we make sure that we keep communicating these changes to our partners as well as customers to build strong relationships.

CONTRIBUTING TOWARDS INDIAN LOGISTICS GROWTH STORYWe are witnessing tremendous growth in the Indian market. We will continue to expand our networks, and provide a full suite of services to our customers. We will continue to increase the number of clearance locations and flights we have for the Indian market. We are also bullish about setting up a strong ground network.

In addition, we are expanding significantly in the warehousing space and are reinventing new ways of servicing customers better every day. In this way, we would be able to streamline logistics operations in India, thereby significantly contributing to the India growth story.

SMART LOGISTICIANWe have been seeing many more women in the logistics business, which is a very encouraging sign. A smart logistics professional has to be a bit analytical as well as needs to think out-of-the-box. He or she needs to understand customers’ needs and be able to deliver the best solution for each specific need.

[email protected]

LOGISTICS MASTERMINDLOGISTICS MASTERMIND AJAY S MITTALAJAY S MITTAL

YOUR JOURNEY AS AN ENTREPRENEURDuring my entrepreneurial experience, I realised that logistics and supply chain were the biggest bottlenecks in doing business in India. Even though this sector was infested with umpteen problems, I always believed that with a resolve to make a difference in this industry, logistics and supply chain have the potential to change the face of the Indian economy and are the key elements for India’s sustainable growth. Today, India’s logistics inefficiencies amounts to 14 per cent of our GDP. This, when compared to 8-9 per cent in developed nations, represents inefficiency & therefore, a logistics market potential of US$80 billion. Thus, in a sector marked by inefficiencies, the opportunity for the betterment was staring in the face, which, in turn, became the driving force to venture into this field. Arshiya International has embarked on its vision – to change the face of logistics – and has been striving towards it. Arshiya’s evolution in the last 11 years, from being an asset-light logistics company to becoming an integrated supply chain & logistics infrastructure solutions company with an investment outlay of over US$1.6 billion exemplifies its commitment to this industry.

YOUR SUCCESS MANTRA I believe that the continuous endeavour for excellence is the key to success. Excellence is about surpassing all standards, questioning the obvious, knowing what one is best at & doing it better and above all, creating a culture wherein excellence is business as usual. It is this constant endeavour for excellence that has enabled us to become India’s only integrated supply chain & logistics infrastructure solutions company.

LANDMARK ACHIEVEMENTS IN YOUR CAREER SO FARWhen starting afresh, no one can gauge the distance that would be covered.

‘It is my dream to ‘It is my dream to create a revolution create a revolution in India’s logistics in India’s logistics

evolution’evolution’The brain behind India’s fi rst FTWZ and the second largest Private The brain behind India’s fi rst FTWZ and the second largest Private

Container Train Operator is the visionary leader, Container Train Operator is the visionary leader, Ajay S MittalAjay S Mittal, Group , Group Chairman & MD, Arshiya International. In his entrepreneurial career, Chairman & MD, Arshiya International. In his entrepreneurial career, Mittal has been successful in establishing the much-needed logistics Mittal has been successful in establishing the much-needed logistics

& rail infrastructure in India. With a belief to achieve anything out & rail infrastructure in India. With a belief to achieve anything out of the ordinary, one has to look beyond the situations that challenge of the ordinary, one has to look beyond the situations that challenge

innovation and creativity and Mittal today stands tall as a thought innovation and creativity and Mittal today stands tall as a thought leader in the Indian logistics space, reports leader in the Indian logistics space, reports Sumedha MahoreySumedha Mahorey.

1414 •• SMART LOGISTICS SMART LOGISTICS • • APRIL 2012APRIL 2012

Imag

e C

ourte

sy: J

oshu

a N

aval

kar


One can only plan, ideate and act upon the plans. In whatever time Arshiya has spent in doing its bit in terms of adding and contributing to the overall logistics industrial revolution in India, we look at where we are and where we can be in terms of adding more value to the infrastructure space without resting on the laurels of feats that we have achieved in considerably less time. We live, operate and function everyday with the aim of bringing about a revolution in the space of offering integrated holistic logistics and supply chain solutions in India. I can safely say that we are on the right track.

It is not about coming to even an occasional halt admiring the path covered; it is about underlining the path that needs to be covered. Arshiya is right up there with this central line of thought. To have your own support infrastructure, of world-class international standards, in order to deliver the most intricate and complex of logistics solutions is what we underlined. And we are offering that today. We built the country’s first Free Trade Warehousing Zone (FTWZ) at Panvel, Mumbai, and we are also the country’s second largest Private Containerised Train Operator (PCTO).

CRUCIAL FACTORS ATTRIBUTED TO YOUR SUCCESSWe sincerely believe that no problem or challenge is insurmountable. We could not have walked a quarter mile in isolation, leave aside pioneering the logistical revolution that we have set out to create, had we not worked as a combined force to change the dynamics of the logistics industry in India. Literally speaking, it is integrated services that we offer at Arshiya. People are the crucial factor in our success. Add to that the obvious far from satisfactory logistics scenario in the country where a lot can be done continuously than what has been done to better the scenario.

CHALLENGES FACED In India, developing and operating first-of-its-kind logistics infrastructure such as FTWZs, Domestic Distriparks, Rail Infrastructure (trains and terminals) is a challenge in itself. To start with, for developing an FTWZ, one needs 100 acre of land. Arshiya, in its process of land purchase, has signed over 2,300 individual contracts with farmers and land owners, which was followed by stipulated multi-level approval for the development and operation of the zone. The key is to realise the true potential of this country in terms of economic development and be aware of the challenges in our growth path – integrated logistics infrastructure being the most critical variable.

CRUCIAL LEARNING FROM TOUGH TIMESWe believe in delivering world-class complete end-to-end logistics solutions by removing every roadblock that counters & hampers the logistics and supply chain journey. Therefore, it is the insightful understanding of that fact that to achieve anything out of the ordinary, one has to look beyond the situations that challenge innovation and creativity, which prevent milestones from being created. To have faith in the overall vision driving the organisation remains our area of focus at Arshiya International.

MESSAGE TO YOUNG LOGISTICIANS One has to be able to envision, ideate, innovate and believe in his/her conviction to be successful as a logistician.

YOUR DREAM PROJECT...It is my dream to create a revolution in India’s logistics evolution, to make a difference in India’s logistics & supply chain space and to facilitate India’s economic growth.

CHANGING LEADERSHIP STYLE The leadership style in this industry

is as dynamic & complex as the very nature and ethos of its operation & functioning. To me, a person operating in this industry, and even, for that matter, those who wish to read or study this peculiar and highly challenging space of infrastructure operation, need to begin by having a sound understanding of the ground realities.

With complex tax reforms, ever increasing global pressure on India given its emphatic economic growth rate, insufficiency and lack of quality physical infrastructure in the country accounting for anything but sustenance, you cannot actually function without an integrated well rounded logistics system in operation. And this certainly is not an easy task.

With clients both in India and those from the rest of the world looking for a solid and prominent logistics partner who can reduce time, account for efficiency of work and provide all-in-one integrated solutions, the focus shifts on strategic partners like Arshiya who can provide not only state-of-the-art self-built and owned infrastructure, but can extend flexible and multiple supply chain strategies to tackle the tasks that one would otherwise label consummate and tedious.

Customers today look for end-to-end services and long-term partnership. Through Arshiya, a customer’s imports, exports and re-exports requirements are taken care of via a one-stop shop solution with state-of-the-art infrastructure supported by a pan-India presence.

YOUR VISION FOR ARSHIYAMy vision is to make Arshiya International a game changer in India’s logistics and supply chain landscape and transform the existing system by rooting out inefficiencies through continuous innovation and pioneering of new concepts.

[email protected]


LOGISTICS MASTERMINDLOGISTICS MASTERMIND VINEET KANAUJIAVINEET KANAUJIA

LANDMARK ACHIEVEMENTSI am passionate about my work. I am a go-getter and a perfectionist. In terms of my professional achievements, I was involved with Samsung during its formative years. Over a decade back, when Samsung had entered India and was establishing its brand in the country, I played a vital role in terms of helping the brand set up base in the country and gain market share. Helping the company gain market leadership in the Indian geography is what I would consider a great achievement.

Being a part of Samsung also gave me the privilege to work on various projects. For instance, I was closely associated with World Cyber Games – an international project for the company. I was also rated the ‘Best Employee of Samsung’. Thereafter, I came to Safexpress. I have done my bit in terms of establishing the brand, and today, Safexpress has established itself as a market leader in its domain. It has established itself as a ‘Master Brand’ and a ‘PowerBrand’ – titles bestowed to the only company in the supply chain & logistics industry.

MOST CHALLENGING PROJECT One of the major challenges for us was to implement time-definite delivery. Few years back, the concept of day-definite delivery was a common norm

in our industry, where the consignment or the goods would be delivered within a specified number of days. However, we came out with the concept of time-definite delivery, which has redefined the shape of the entire industry. Safexpress has become a pioneer in this concept. We were the only players and, I believe, we still are the only players in our domain, offering time-definite delivery. It is a very unique project, which has helped us establish ourselves as the fastest service provider in the country.

CHALLENGES FACEDWe faced numerous challenges, the first and biggest challenge was that the time-definite delivery project had to be undertaken irrespective of the bottlenecks associated with it. For instance, if your goods have to leave at 7.55 pm sharp, whether your truck was full, half or even had two packages, it had to leave. How many companies were actually willing to do that? Not

many. And therefore, we had to bite the bullet in this case.

Our courage, patience, long-term vision and strength to undertake and successfully execute a project as big as this are the main reasons why today, over 5,000 corporates – comprising almost all the top brands of India Inc. across various business verticals are working with us. Safexpress is, perhaps, the only service provider, which can make them deliver goods in 1.8 days on an average by surface to and from any part of the country.

A true go-getter and an inspirational personality in the logistics & SCM fraternity, Vineet Kanaujia, VP – Marketing, Safexpress, is one of the most passionate and fi nest marketing leaders of India Inc. Having impeccably positioned Brand Safexpress as the ‘Market Leader’ and ‘Knowledge Leader’ in the supply chain & logistics industry, in a very short time-span, Vineet has managed to radically enhance Safexpress brand equity in India. In an exclusive interaction with Arindam Ghosh, he shares his experiences and expertise of working in the logistics & SCM domain. Excerpts…

to implement‘The major challenge for us was

Time-definite Delivery’

Pho

to C

redi

t: E

ddie

Mer

chan

t


These challenges were overcome through long-term planning and also perhaps due to our methodical & proactive approach, which helped us foresee several problems and create various plans so that we could cover up any kind of inefficiency.

LEARNINGS FROM THE PROJECT There are many positive learnings, but the biggest learning is that for any unique model like this to succeed, one has to have a long-term or a mid-term horizon. One cannot really look at a short-term horizon and aim at executing a unique strategy like this. Secondly, if you want to be a market leader, you have to be the first mover. Thirdly, if you want to really create a unique position in the market, you have to have a unique strategy – something which will not be easy for others to emulate. This is probably the reason why Safexpress, despite so many brands being present in the market, is still looked at as a very powerful brand.

TO BE A SMART LOGISTICIAN…A smart logistician should be able to understand his market and various verticals very well. He should be able to understand his customers and their needs such that he should be able to tailor-make solutions for each customer based on the requirement. Further, he should be very dynamic in his approach. A smart logistician should be aware of the changing market conditions, especially the macro-economic market conditions. The moment things change, the person should be able to accordingly change and adapt his or her stance.

ON LEADERSHIP I believe in collaborative leadership. Leadership is not only about speaking your mind out, but about how well you speak your mind out. This is because leadership goes to people who are able to speak their mind out vis-à-vis people who are just thinking ‘when shall I speak.’ A great leader should be a people’s person. He or she should

be able to understand the thought process of the people well. As a leader, I admire Mahatma Gandhi the most because of his ability to mobilise the people through his simple acts, which were highly symbolic. In my view, he was a phenomenal marketer.

MAKING SAFEXPRESS A MARKET LEADERWe, at Safexpress, have got our fundamentals right. When the market was reeling under slowdown, we were building strategies for the future. In terms of strategies, we have been focussing on infrastructure augmentation in a big way. As a result, we have got the right infrastructure – be it in terms of setting up our offices across the country or building up our fleet. I believe that infrastructure, systems, processes and manpower are the four keys to our success. Focussing on these has helped us build our organisation’s brand name in the market and has distinguished us from other 3PL companies. It has also enhanced our capability to manage very high performance standards. Today, we probably have the highest capability among all 3PLs in the market.

COMPANY IDEOLOGY Safexpress has always been in pursuit of excellence. Being in the service industry, we have to keep striving hard to achieve better results than the previous ones. This helps us serve our customers better. In the service industry, you not only have to look at customer satisfaction, but also have to look at customer delight. That is why we always try to serve our customers in the best possible way, given the constraints that we have to undergo in our industry.

In a nutshell, serving customers in the most delightful way and pursuing excellence in every aspect of the activities that we undertake has been Safexpress’ ideology, which has been ingrained in the company’s culture & environment. It is in the DNA of every employee of our firm.

LAST MILE CONNECTIVITY Last mile connectivity is extremely vital. If you closely analyse the geography of India, the distance between the north and south is about 3,300 km, while the distance from east to west is about 3,200 km. Also, India has around 627 districts and 35 states and Union Territories. Moreover, the country has a population of 1.2 billion. With most of the population residing in rural areas, serving that population is going to be very critical. But these areas need to be tapped. With growth in tier I regions getting saturated over the next 5-6 years, the next big ticket growth is going to come from the rural areas. The tier II & tier III towns are going to become precious pockets of growth. In such a scenario, last mile connectivity will play a larger-than-life role in the success or failure of the country’s economy as the growth of the economy will revolve around tier II & tier III regions.

MESSAGE TO YOUNG AND ASPIRING PROFESSIONALSI would like to tell them sky is the limit for this industry’s growth. The industry is already a $110 billion industry and being in the growth phase, it is a sunrise industry of tomorrow. So, if you are looking at a career in this industry, I think there is a huge opportunity.

MESSAGE TO COMPETITORSThe industry is huge and so is the potential. It is important to look at growing the organised share of the business and building world-class practices and standards in this industry. It is crucial to work towards the overall upliftment of the industry.

PASSION & SUCCESS MANTRAI am passionate about building brands and writing. I believe the mantra to achieve success is by excelling in everything I do.

[email protected]


WHAT YOU GAIN & WHAT YOU GIVEWHAT YOU GAIN & WHAT YOU GIVE LLOYD SANFORDLLOYD SANFORD

IT all started with a phone call from Bengaluru to my home in Seattle, Washington, then arriving India in late November 2007, to build a logistics service provider (LSP)/ freight forwarding business unit from ground up. With the help of two skilled teammates, we recruited and trained 21 staff, set up seven offices in key EXIM markets and launched forwarding, clearance and trucking operations after just four months.

Lessons during this early development stage were equivalent to drinking out of a fire hose. Having to manage the extremes of Customs House Agent (CHA) and logistics obstacles across pan-India and bring on (and keep) new local & international partners and clients with a fresh team of recruits in an unpredictable working environment were both unexpected and, at times, overwhelming. Proper implementation was just a vision and I wondered if I would ever see it through.

LESSONS LEARNEDYet, four-and-a-half years later, I am still here! To best understand why, I, as a guest in a foreign land facing one hurdle after another, chose to stay for the long term, go independent and set up an Indian firm, one must look back at my extraordinary learning experience and the resulting value across three perspectives:• A valuable business insight gained

during my introductory period can be summed up in three words, ‘obstacles equal opportunities’.

• Understanding India’s ‘real world’ supply chain challenges and how

to successfully implement ‘within a storm’ was equally valuable.

• Four more valuable preparation steps enabled the roll out of a successful supply chain project management and consulting business in India. These are:- Gaining firsthand knowledge of

what works, why it works, what can be improved and then, how it can and should be improved

- T a k i n g t h e extra effort to determine exactly what the client’s perceived value of the solution is, whether the client is willing to pay a fair price and whether or not there is a real budget

for that expense- Developing effective local

practice skills and meaningful personal relationships for gaining client respect and solving their complex supply chain logistics problems in a trusted and professional manner

- Undertaking a variety of supply chain projects across multiple industries and designing and implementing the right solutions that met or even exceeded client expectations.

GROWING YOUR BUSINESS OPPORTUNITIESIdentify Real Problems, Real Needs,

A Rollercoaster RIDESetting up a business is undoubtedly risky, but setting up a business from scratch in another geography certainly makes for a riskier proposition. This is the risk that Lloyd Sanford, MD, Applied Logistics India, took in November 2007. And like is the case with even the most enterprising entrepreneurs, his road to success has been fi lled with several obstacles. In a freewheeling conversation, Sanford narrates how the four-and-a-half years he has spent in

India were nothing less than a rollercoaster ride.

Lloyd Sanford is Founder & Director, Applied Logistics India, a Bengaluru-based supply chain logistics consulting fi rm. He has over 20 years of senior executive supply chain & logistics management experience in global transportation, forwarding, logistics, warehousing and supply chain technology. His work over the last 10 years includes consulting for Vikram Logistics, Attero, ShipLogix (Infor) and Schneider Logistics.

CREDENTIALS CREDENTIALS


Real ValueAt some point in one’s career, you accumulate a set of skills on one hand and you clearly see the need for business solutions on the other. You are fairly certain that you can step right in, bring value to the table and help a range of prospective clients fix their problems and grow their profits. This was my story in the beginning. However, over time, there have been some important and humbling experiences that have helped me modify rash or premature assumptions.

I have found that the problem with a lot of consulting-oriented entrepreneurs, at an early stage, is that business problem identification comes heavily from Internet searches or perhaps, a brief chat with a prospect about what they want. Then, there is an excitement and rush to sell what the consultant envisions to be the perfect solution, only to find out that there is a huge difference in ‘want’ versus ‘need’. Solution perceptions and what the client is willing to pay do not cover the consulting time spend nor value offered.Solve Hurdles By Seeking the TruthI have always felt that being out in the market, mixing with key players while conducting explorative meetings with prospective clients is not just the best way to learn the truth about real needs and how to apply that knowledge, it is the only logical way to get it right and have fun along the way. The truth in relationships and realities paves the way for fast, efficient and rewarding results for all parties. What’s more fun than managing complex problems with friends and seeing everyone benefit? What’s more disappointing then getting bogged down in never-ending tasks while costs escalate and team morale plunges, pushing your friendships to the edge? I have learned to seek out the former and avoid the latter.Educate Decision-makersIt has been my experience that most clients needing complex SCM help also

need to better understand the solution options and be educated on the full value proposition. For example, just how secure, robust, reliable, scalable and economical can an advanced IT, e.g. cloud-based logistics solution be and how can they be certain to realise optimum value and expected ROI? How do they ensure that what they end up with has the designed quality and creates the value chain enhancements promised by the provider?

Give your client and collaborating solution team the answers to these important questions upfront while shaping the project deliverables and expected results. I have found that taking the time in the design stage to set expectations across all players, results in lower cost, less time and better quality.

DELIVERING & REAPING THE REWARDSApply Your Skills CreativelyI have experienced that quality-consulting work comes from good project management and team leadership skills as well as solution design accuracy. One needs a good understanding of key SCM industry issues and local core operating practices plus a good control on how to design and implement business process controls, tailored technology and effective training as the three critical solution enablers.

With these attributes in hand, India offers a wide array of business opportunities to the aspiring SCM consultant. Market needs range from providing basic ‘point solution’, e.g. trucking, warehousing, technology fixes, also known as ‘gap fillers’, to designing and managing full-scale supply chain improvement projects. Such a project would typically comprise of integrated solution modules from multiple parties with mixed work cultures, so leadership and interpersonal skills must be there alongside deep domain expertise and effective project management. Also, specialised SME consultants/project managers/implementation specialists

can find meaningful work as an outsourced resource or consortium player within a larger project.Leverage Project Management Value As a result of the India experience and SCM domain expertise across six core business credentials, I have been recruited to some exciting projects across India; projects that transcended logistics modes and bridged SCM processes. The work involved comprehensive problem analysis, solution design, implementation and ongoing management across logistics, warehousing, freight forwarding, electronics, telecommunications, automotive, manufacturing and retail industries. Some of the specific project solution modules I used included pan-India reverse logistics, time-definite critical logistics, e-logistics & e-commerce strategic planning, integrated warehousing & distribution, OMS, TMS & WMS, collaborative ERP portals and SCM training.

I, thus, encourage the SCM & logistics industry consultants to specialise in areas of their core competency, know how to integrate for optimum results and create distinct and easily measurable service value meeting client expectations. This opens doors and helps leverage your value for proper compensation. Do Not Forget Social Responsibility Corporate Social Responsibility should be a part of the consulting firm’s mission statement. It is important to not lose sight of what your local society’s welcome in helping you be where you are today. As a foreign guest, I sincerely appreciate being able to work and live in India. An early business relationship with India’s leading e-waste recycling firm, Attero, has allowed me to now help India with environmental sustainability by giving both public and private presentations to increase awareness about e-waste pollution and health/safety concerns.

E-mail: [email protected]


WHAT YOU GAIN & WHAT YOU GIVE WHAT YOU GAIN & WHAT YOU GIVE ASHU KHANNAASHU KHANNA

EntrepreneurshipExploring the World of

MANY professionals across industries are becoming entrepreneurs hoping to make it big and also give back what they have gained. Having worked for 19 years in a structured (pun intended) corporate environment, the move to entrepreneurship looked exciting and challenging! Exciting because of the opportunities to create ‘your own

space’ and challenging because of the uncertainties that come with it…

I must admit, the one thing that I was confident about was the ‘measurable contribution’ towards industry and society. The chance to see, share and learn from different industries and meet & work with different people, was going to be an interesting journey.

ENTREPRENEURSHIP & CORPORATE WORK CULTURESHaving turned entrepreneur recently, I have experienced some of the following basic differences between corporate and entrepreneur cultures:• A comfortable life vs. risk taking: Do

not get me wrong. A comfortable life does not mean that there is no hard work involved. But in a comfortable life, there is a support system – infrastructure, comforts of secretarial staff apart from other smaller ‘junkets’ that corporates provide. In entrepreneurship, you start from ‘creating your identity’ to building your team, office…

• Steady paycheques to no income: When is the next paycheque coming? Do you have the guts to live off your savings till you get a source of income?

• Skill set vs. hard work: In corporate life, you can get by with hard work. Unless you are way out of place, you will continue to grow. The pace at which you grow, however, may vary. In entrepreneurship, you must have an excellent skill set. You have to push yourself continuously to get ‘things right’ in order to grow your business. Remember, it is lonely at the top and it is lonely when you are alone!

SUPPLY CHAIN CIRCLE OF INFLUENCESupply chains are not well understood in our country, the primary reason being that most people do not understand the ‘contribution that a supply chain can make to the industry’. Procurement and supply chains contribute to 55-70 per cent of a business spend and are responsible for ‘product availability’. An improvement of two per cent in efficiency has a large impact on the business’ top line and bottom line. Let us take the example of a company having a turnover of `3,000 crore. The procurement spend would contribute to `1,800 crore (50 per cent) and a two per cent improvement means an impact of `36 crore in profit & loss.

EntrepreneurshipExploring the World of

Passion, hunger for innovation & intelligence are some of the variables that make up for a successful entrepreneur. But forgoing the comforts that a corporate life offers and taking risks, which would mean living off your savings with the undeterred belief that your business will soon turn into your steady source of income is what entrepreneurs are made of. This scenario gets all the more riskier when it involves getting into the business of procurement and supply chains. Ashu Khanna, MD, VALYOU CONSULTANTS, gets candid about his journey from the corporate world to the world of an entrepreneur.


Similarly, a two per cent improvement in customer service means an increase in top line by 0.4 per cent, which means an additional gross contribution of `5 crore; hence, an impact of `41 crore with an incremental improvement of two per cent.

OPPORTUNITY AREAS IN SUPPLY CHAINThere is a large untapped opportunity in the following four key areas for supply chains in India. There include: • Strategic sourcing of direct materials:

The key imperatives for strategic sourcing include: - Category management-based

buying- Risk management- Low-cost sourcing opportunities- Value optimisation opportunities.The focus needs to be on structural

savings rather than negotiation-based savings as the former gives you a competitive advantage in times to come. Needless to say, the right measures of performance are key to drive the right behaviour in sourcing. For example, should buyers be rewarded for savings vs. their forecast or should they be rewarded for mark to market benefits?• Indirect sourcing: This is an area

which is often neglected in most organisations. The irony lies in the ease of savings either through efficient buying or reducing a large part of the waste. These costs can add up to 5-8 per cent of business revenue and are classified under marketing spends, travel & communication, etc.

• Fleet Optimisation: This is an area, which

holds immense potential. With a combination of vehicle optimisation and competitive buying, the opportunities range from 5-10 per cent of the total cost. This is one spend, which is only ‘execution’ and not ‘optimisation’ focussed in most businesses.

• Warehousing: We often spend a lot of time focussing on factories, planning and paying little attention to ‘last mile’ warehousing. These are treated like ‘storage’ areas, thereby resulting in poor service levels & obsolescence. Focussing on timely delivery and stock hygiene contribute to growth & reduced costs.

SUPPLY CHAIN OPPORTUNITIESThere is a dearth of good supply chain talent and the limited understanding of businesses of the benefits of supply chains compounds the issue. Many small and mid-cap Indian businesses, which cannot afford branded consultants, should look at industry experts who can offer the same service at much lower costs. Another significant opportunity exists in the private equity arena. When unlisted small businesses are acquired by private equity, driving supply chain efficiencies can help deliver growth and profit, thereby helping to improve valuations. The emerging e-commerce industry is getting intensely competitive. ‘Cash on delivery’ – a feature that is key to success in an Indian environment (the

Indian customer believes in touch/feel) – puts enormous strain on the cash flow and results in increased unproductive orders. Reducing costs can significantly benefit the e-commerce industry.

Retail is another industry, which, due to its complexity and low margin, can benefit from efficiency improvement in the supply chain. Service level improvement through vendor integration can improve fill rates, thereby resulting in significant improvements in the cash flow and top line.

CONTRIBUTION TO SOCIETYImproving supply chain efficiency results in waste reduction and hence, benefits the economy. It also makes stakeholders in the chain competitive, thereby giving them an opportunity in the international arena. Optimising freight means reducing the number of kilometres travelled, thereby resulting in reduced carbon emissions and reduced fuel import bill for the country.

WHAT YOU GAIN AND WHAT YOU GIVEWhat you gain as an entrepreneur is the chance to see the vast world. You get a chance to see a variety of businesses, meet different people and most importantly, keep adapting to different situations that come your way. For me, moving from a buyers’ ‘pedestal’ (word often used by vendors) and selling my ‘services’ was a unique challenge. Adapting to various cultures (you would be surprised to know how different businesses are in terms of their way of functioning) brings with it learning and patience.

What you give is really sharing your experiences by improving people’s lives. Success breeds success and when you experience how your contribution has helped people become successful, it is a thrilling experience. And as the popular English rock band Beatles said, “And in the end the love you take is equal to the love you make...”


Being an entrepreneur means: • You Actually Work More <--- At

Least in the Beginning• There is No Such Thing as TIME

OFF• Even the Best Businesses Take

Time to Become Successful.

TIPS FORENTREPRENEURS

Ashu Khanna is Founder of VALYOU CONSULTANTS. He is a Procurement and Supply Chain Domain Specialist with over 20 years of Indian and international experience at Cadbury and Marico. His experience encompasses strategic sourcing, e-sourcing, commodity sourcing strategies to optimise cost, supply chain optimisation to deliver customer service and leading organisation wide cross-functional projects. He is also a trained Oliver Wight S&OP specialist.



WHAT YOU GAIN & WHAT YOU GIVEWHAT YOU GAIN & WHAT YOU GIVE ARIF SIDDIQUIARIF SIDDIQUI

WITH an overall 21 years of in-depth hands on experience in sales, operations and business management, I have spent almost 20 years in the logistics industry with the pioneers AFL Logistics (now a part of FedEx) providing supply chain solutions and logistics services, including express distribution, warehousing and order fulfillment. It was at AFL Logistics that I got an opportunity to take on various roles ranging from Branch to Regional Manager to National Operations Head to Country Business Head. Besides, I also headed the special assignment of developing and implementing the Transportation Management System (TMS) and Warehouse Management System (WMS) for the company.

My transition from the corporate world to the world of entrepreneurship actually took place in 2005. At that point

in time, the industry was going through a huge transition & transformation. In my capacity as the Head & CEO of AFL Logistics, we were already well established players in the 3PL domain in creating benchmarks for others to follow. In this journey, we found that the logistics industry, per say, was far from the overall concept of 3PL. I was

already in that position for around four years. Subsequently, I realised that it was important for me to pass on the train of ideas and advice to the industry in order to create a level playing field for every stakeholder. In this process, our industry would ultimately benefit.

I realised that it was an opportunity in terms of giving away the knowledge & domain expertise and the experience I gained over the years to the industry. That was one fundamental reason for me to get into consultancy. Fortunately, during my 14-year tenure at AFL, I got a holistic learning experience of operating in the logistics industry. Another aspect that I realised was that there were not many people with that level of expertise in the industry whom people could look up to for advice. As a result, consultancy had a huge market value.

The role of a logistics consultant has evolved with the passage of time. In the modern day business scenario, an organisation needs to clearly understand the importance of that role, as an effective and effi cient logistics system can help the organisation achieve its business goals in a uniform and effective manner, informs Arif Siddiqui, Founder, Coign Consulting. Being one of the pioneers in the logistics industry, Arif brings with himself a holistic approach to build a seamless supply chain network. Sharing his transition from the corporate world to being a successful entrepreneur, Arif discusses the musts that a consultant should possess…

All-round PerformanceAll-round PerformanceEnsuring anEnsuring an

Arif A Siddiqui is the Founder of Coign Consulting. During his two-decades journey in the logistics domain, Arif has conceived the Strategic Account Management concept in the industry. He created world-class warehousing infrastructure of over 1 Million sqft in 50+ locations in India. He also upgraded the Hub & Spoke model for the express transportation business.

CLAIM TO FAMECLAIM TO FAME

Imag

e C

ourte

sy: N

eha

Mith

baw

kar

Imag

e C

ourte

sy: N

eha

Mith

baw

kar


SMOOTH STARTThe start was pretty interesting and I would like to give credit to Cyrus Guzder, Chairman & MD, AFL (now a part of FedEx) who appreciated and recognised my decision to move out of AFL. In fact, he gave me the first push to achieve success in this new endeavour. He retained me as the advisor of the company for a good one year. Apart from that, being the CEO of AFL, there was already a huge recognition in the market because of the fact that we were pioneers in bringing new age logistics concepts into India. We were the first to bring our own warehouse system and the first to build one of the most advanced warehouses in the country. Moreover, I had a free hand in AFL to explore and implement whatever I felt was the best for the organisation and customers. That helped us in getting some of the best customers. We had the top 40 customers in the country. It was an enviable list. They were all complex logistics customers, which meant that they knew the exact kind of services they required from a 3PL.

All these gave me a lot of recognition in the industry. This, in turn, really kick-started my consultancy career in the initial days, which was unlikely for a start-up. There was already a business waiting for me right from the start. In fact, when some of my competitors came to know that I was moving out of AFL and starting my consultancy firm, they approached me for consultancy. This certainly offered me a big boost and enhanced my confidence.

Fortunately, I never experienced tough times during my journey. All this was possible because of my 14 years of hard work and the contacts that I had built during that time. Most importantly, at this juncture, there is a lot of support you need from your family. Thankfully, I had an option of going back to the corporate world if this venture would not have succeeded.

FACTORS TO BE CONSIDERED BEFORE

MOVING INTO THE SPACENew age entrepreneurs have to have some fundamental aspects in mind before taking a decision on entering into the consultancy space. First & foremost, one should clearly qualify as a specialist. For this, one needs to know more than what customers collectively know. Any consultant in the area of supply chain has to be an all-round consultant, which means that he has to have holistic knowledge of the entire supply chain functionality. He cannot opt to become a consultant for a particular segment of the supply chain. Another most critical factor is the holistic exposure that you have gained during past stints. Secondly, one needs to be extremely process, technology and infrastructure oriented. If one does not have these traits, then

one will not be able to express himself as a domain expert. Thirdly, one needs to be recognised in the industry. Fourthly, knowing that logistics is a massive cross-section of industries, one needs to be clear about which space of advisory one will actually advise in. And lastly, one should be well connected in the industry.

WHAT YOU GAINI have given my 100 per cent in all the largest and the smallest of projects that I have been associated with. Each project offered me a tremendous amount of learning and understanding about a particular domain. Our key role is to encourage customers to scale up the value chain. Being a consultant offers you many advantages. We get flexible working hours and there is no pressure. Besides, there is freedom to experiment

with new things. Additionally, you are not answerable to anyone. On the other hand, when working in an organisation, you are bound by corporate policies. But as a consultant, I can express my ideas and thoughts openly without even worrying about the fact that I belong to a corporate entity. At AFL, we had 100 per cent autonomy to do what we wanted to do for the best of the business. Fortunately, I did not come from a corporate background where you are bound by too many rules. I have gained more marketing intelligence because I get to meet people from across the length & breadth of the industry.

WHAT YOU GIVEDuring this seven-year journey, we have gained exposure to some of the most innovative logistics projects. To name a few, we conceptualised the design of over 60 lakh (six million) sqft of best in class warehouse buildings, which include over 150 acre in the category of logistics parks, mother warehouses, regional distribution centres and city distribution centres for rapid fulfillment. We designed and implemented intra-warehouse automation, including a conveyor belt system for picking, packing & kitting. All my initiatives, till date, revolved around reducing the logistics spend in the country.

Going forward, my dream is to start a logistics institute to train people on the intricacies of logistics & supply chain. This industry lacks the ability to attract skilled workforce. I am just waiting for the right opportunity. As it is a very capital-intensive business, I am in talks with various industry people to make this dream a reality. The other factor is the quality of work, especially in the infrastructure sector. My intent and vision is to create sophisticated infrastructure in the country, which will actually help in reducing the overall logistics cost in terms of reducing waste, pilferages, etc., as well as in improving the efficiency of operations.

As told to Prerna Sharma

New age entrepreneurs before taking a decision on entering

into the consultancy space should clearly qualify as a

specialist. Any consultant in the area of supply chain has to be an

all-round consultant.


WHAT YOU GAIN & WHAT YOU GIVEWHAT YOU GAIN & WHAT YOU GIVE ZUBIN POONAWALLAZUBIN POONAWALLA

Devising StrategiesOff the Charts Results

to achieveto achieve

BUILDING a world-class supply chain is difficult in any economic climate. But transforming the supply chains of three organisations into one integrated world-class supply chain is an awesome challenge. Just ask Fred Berkheimer, VP, Unilever Home & Personal Care North America, which was formed when Chesebrough-Ponds, Lever Brothers and Helene Curtis merged some decades ago.

“We are going to reinvent ourselves,” I always tell my team, with the goal of establishing a world-class supply chain strategy – including slashing order cycle time from one week to 48 hours for our customers. To help achieve this goal, we advise our customers to supplement their own logistics staff with a carefully selected group of supply chain and systems consultants from our team to work on initiatives that include implementing a new order management system, redesigning the company’s logistics network and revamping the transportation processes.

“We recognised, early in the process, that we needed a consultant because we did not know the right questions to ask,” says one of my valued customers. They are currently supervising the second stage of the company’s supply chain project, which involves implementing portions of the

master plan developed during the first stage. These two approaches have been very successful. But not all logistics and supply chain professionals’ experience with consultants have been so positive. For example, one logistics executive recalls stepping in as project manager because the consultant assigned the task did not have the necessary skills or experience to deliver a complex project on time. Plenty of managers will advise that a high-level partner sent in to sell

the service may be replaced by much less experienced associates.

CHOOSING THE RIGHT CONSULTANTS There is a plethora of logistics & supply chain consultants to choose from, but their capabilities, scope, experience and expertise vary widely. Supply chain consultants include former logistics executives and academics whose operations range from one-man shops to very large firms with thousands of

Consultants play a very crucial role in making or breaking the fortunes of a company. Hiring the services of the right consultant can, therefore, help a company’s supply chain projects smoothly sail through to completion, irrespective of the state of the economy. Zubin Poonawalla, Promoter & MD, Poonawalla Consultants, while leveraging on his experience, expertise and know-how gained over his two decades of working in this industry, offers insights on how the right consultant can help companies avoid pitfalls and achieve off the charts results.

Imag

e C

ourte

sy: P

rern

a S

harm

aIm

age

Cou

rtesy

: Pre

rna

Sha

rma

Devising StrategiesDevising StrategiesOff the Charts ResultsOff the Charts Results

to achieveto achieve


employees and everything in between. “Sole practitioners and large firms both have value,” notes one consultant. The selection of a consultant depends on the particular project. “If you are trying to put in place a worldwide logistics network, you are probably better off going with a large company that has the necessary models, experience and resources,” he says.

Many small organisations do not have the time or technology resources required to do all the number crunching that goes into modelling. On the other hand, if you want somebody to travel around the world and in one week analyse & evaluate seven distribution complexes, your best bet may be a sole practitioner or a small firm. There are not many massive firms that can be that flexible and react as quickly. There are definite advantages to the one-man show. They can be much more efficient and cost-effective, especially in specialised fields. But what if the consultant gets hit by a bus? In addition to the lack of depth, when working with a sole practitioner, you may not get the objectivity and diversity of thought & input that you can get from a company.

WORKING WITH TIER II CONSULTANTSUnilever has achieved good results in some situations working with tier II consultancies, rather than the largest firms. Tier II consultancies fall under the much lower cost bracket. Moreover, they have superior personnel and the results of working with them are as good as the results that would be realised when working with a tier I firm.

We always suggest customers to define the scope of each supply chain project carefully and develop an understanding of how the project fits within the broader supply chain programme before starting your search for a supply chain consultant. With so many aspects to a supply chain, the tighter the requirements, the more accurate the consultant selection will be. While some companies

automatically turn to consultants who have helped them achieve success in the past, others go through a formal evaluation and selection process. For example, the supply chain project team at one of our clients identified a list of selection criteria to use when evaluating consultant candidates, researched potential consultants, invited a number to make presentations and then, asked them to submit proposals. “We heard several proposals, and there was a huge difference in their approaches,” the Customers’ Head SCM says. The consulting firms varied widely in two key aspects:• The cost of the initial analysis.

“There was a range of several hundred thousand rupees,” he says.

• The number of company personnel who would be required to work on the project. The customer ultimately decided to

work with us on the project. “PCPL’s entire approach was geared towards

helping us learn how to do the work ourselves as opposed to coming in, identifying and correcting the problems & then leaving,” he explains.

BE SPECIFIC ABOUT GOALSWhile evaluating potential consultants, do your homework. Be very specific about your goals & objectives and then find out what potential consulting firms have done for similar organisations, and what the results of the same were. Beware of consultants who tell you they can deliver the work you want done despite not having the capability to do so. When you interview consultants face-to-face, pay close attention to what they say, suggests Deloitte Consulting in its booklet ‘Your Secret Weapon’. Is it clear that they have learned about your customers & your competition, analysed your website, called your customer service line, spoken with experts in your industry and visited places where you have dirtied your hands. If they have, you know they are prepared and are actively interested in understanding your business & its problems.

MAKE SURE THEY LISTEN TO YOU BEFORE GIVING THEIR ANSWERSIt is equally important to pay attention to how well the consultants listen to what you say. Consultants will want to impress you with all their great answers to all your great problems. But they should listen to your explanations of your problems before giving you their answers. In order to dig deep to get a true picture of a consultant’s character and capabilities, ask these questions:• What don’t you do well? Consultants

who tell you they do it all are telling you that they do not mind putting your organisation’s success at risk.

• Name a client you would not give

as a reference, and why? Admitting mistakes and demonstrating the ability to learn from them is a healthy sign of honesty, integrity & intelligence.

• How do you plan to leave? Good

Zubin Poonawalla is the Promoter & MD of Poonawalla Consultants. With a track record of continuous development & improvement in SCM, Zubin Poonawalla has successfully launched ‘new to the country’ systems/processes and decisions to maximise sales by understanding market dynamics. He has the proven ability of identifying areas of strengths & weaknesses and managing people & systems effectively to improve effi ciency, productivity and bottom line.Recognised for his strong and decisive leadership, he inspires team members to strive towards ever-higher levels of achievements. Before donning the consultancy hat, he has held several prestigious positions, such as CEO, greenLogiNXT; VP, Drive India Enterprise Solutions (DIESL); Head – Business Development & Sales, AFL; Country Head, ARAMEX INDIA; COO, JM Baxi & Co and Country Manager, TNT.



consultants are always working themselves out of a job. More than anything, it is an attitude. Look for it.

• If we do not hire you, which of your

competitors should we hire and why? Consultants will either give you a direct answer or evade the question. Either way, you would have learned important information about the consultant’s character that you need to know before you sign on the dotted line.

AVOID SCOPE CREEPSupply chain management projects, by their very nature, tend to be complex and far-reaching. So, they can keep consultants gainfully employed for long periods of time. Logisticians are trained to think in terms of process and continuous improvement, which makes it difficult to keep the scope of a project from expanding beyond its original goals. In addition, it is rare that you would find third parties helping to curtail scope creep.

It is crucial to clearly set expectations from the get-go. Clarity & narrowing the scope down from the beginning are absolutely necessary. Even with that, I can almost guarantee that, unless you make a concerted effort not to let it, the scope of the project will creep. It is inherently difficult to say, “I am going to leave this for another day.” Each collaborative effort requires a tremendous amount of time to study; establish the trust that is necessary to collaborate with trading partners and integrate the necessary systems. Be very clear on your goals & objectives and start small. Tell the consultant that your goal is to be collaborative and world-class, but that you want to work with a handful of specific suppliers & customers.

SECRETS OF SUCCESSFor greatest success when working with logistics consultants, follow these guidelines:Start with a common knowledge base

The supply chain project team at my client’s place, for example, attended a week-long supply chain management overview class at Indian Institute of Materials Management (IIMM). The class helped put everyone on the project team onto a level playing field in terms of terminology. In addition, attending the seminar strengthened the team members’ knowledge outside their area of expertise. This enabled them to contribute more effectively when other areas were being analysed.Insist on solid, experienced and well-qualified consultantsGet a high degree of commitment from the consulting firm on the level of consultants to be used in the project; otherwise, a partner can come in and sell the deal, then you get two

guys fresh out of school to work on the project. Specify the level of expertise you feel you need based on your objectives. If you do not, you may get five new MBAs who barely know what a forklift is. Once you know who you will work with, make sure there is good chemistry between the consultants and your team, look for individuals who fill in any gaps that your team may have.Do not look for a clone of yourself I look for consultants who think differently than I do. We normally tend to like people because they are like us. But why do I need somebody else to act as a mirror? I try to find consultants who will bring up crazy angles and by doing so, contribute to a much stronger result.Make sure they have ‘skin’ in the game It can be good to link the consultant’s financial reward with the outcome, especially with implementation; but

most consultants would prefer that it is all upside and no downside. If consultants are not willing to share in the downside, that is a red flag. Even without incentive-based pay, you can ensure that consultants have a vested interest in the successful outcome; for example, generally, we take the approach that our involvement in a future implementation rides on how well they did on the upfront piece.Establish an open atmosphereTo successfully work with consultants, establish a strong relationship and set an environment & tone where you are not only free to challenge, but also expected to challenge each other. There has to be a real open environment of sharing and feeling that you are in this together, which we rarely get to see in India.Keep the executives informedMy customers’ executive gatekeeper for the supply chain improvement project is the CEO of the company, who ensures that the executive team is kept fully informed on their progress.

LAYING THE GROUNDWORKWe present an educational overview, help senior leaders understand where the company was compared to other companies, talk about potential supply chain systems options and address cultural & change management processes that would be required to improve the supply chain.

This session helps lay the groundwork for the proposed supply chain master plan that was presented to, and approved by, the executive team one month later. By following these guidelines and doing your homework, you can find the right consultant to steer your supply chain projects sail smoothly through to completion, irrespective of the state of the economy. I expect to leverage the experience, expertise and know-how gained over my two decades of working in this industry.


What you gain and what you give, continued

To successfully work with consultants, establish a

strong relationship and set an environment & tone where you are not only free to challenge, but also expected to challenge

each other.


10 PILLARS OF SUPPLY CHAIN EXCELLENCE10 PILLARS OF SUPPLY CHAIN EXCELLENCE INFRASTRUCTUREINFRASTRUCTURE

OVER the decades, the government has been focussing on the growth of the logistics industry. It has increased its infrastructure spend as a percentage of the country’s GDP from 5.15 per cent during the 10th Five Year Plan (2002-07) to 7.55 per cent during the 11th Five Year Plan (2007-12). This is expected to increase to over nine per cent during the 12th Five Year Plan (2012-17). Ironically, despite all the initiatives taken by the government, India is still lagging behind when it comes to logistics infrastructure. Presently, the country ranks 47 on the ‘2010 Global Logistics Performance Index’, according to a World Bank survey. In addition, logistics occupies

about 13-14 per cent of the GDP as compared to other developed countries, where it is about 7-8 per cent.

LOGISTICS SCENARIO IN INDIAThe logistics scenario in China is far better than that of India. While China has 34,000 km of four-lane highways, India has a mere 7,000 km. Also, while the average truck speed in China falls in the range of 60-80 km per hour, in India it is about 40 km per hour. Presently, 65 per cent of freight in India is moved via roads, which, in turn, leads to consumption of more time and subsequently, adds to higher costs. Comparatively, in China, the freight moved via roads is around 30

per cent, while in the US, this figure stands at around 37 per cent. Faced with such a scenario, India is planning to develop dedicated freight corridors to ensure smoother movement of freight. This move is expected to bring more investments into the logistics industry and make it more competitive.

Commenting on the state of the logistics industry, SL Ganapathi, COO, NTL Logistics Plus India, says, “Logistics is suffering because of capacity and connectivity constraints pertaining to freight movement by rail.” Suggesting measures to improve the scenario, Ganapathi adds, “Warehousing and logistics infrastructure should be recognised as priority industry. Also, funding should be available at competitive rates.”

INFRASTRUCTURE STATUS RailwaysGiven the rate at which the Indian economy is growing, India’s overall freight volumes are set to double from the existing three billion MT to around six billion MT by 2020. The Indian manufacturing industry has been witnessing strong growth, especially in the recent times, and targets 25 per cent share in the country’s GDP by 2022. Given such high levels of anticipated growth, there is bound to be huge opportunities for Railways.

Over the last few years, rail freight traffic has grown in the range of 7-11 per cent annually. The figure for freight carried by Indian Railways has increased from 670 million tonne in 2005-06 to 890 million tonne of freight in 2009-10 and, by the end of the 12th Five Year Plan period, Indian Railways is expected to carry about 1.5 billion tonne of freight traffic.

Since the privatisation of container rail movement in India, the efficiency brought into the system has been highlighted by the fact that Indian Railways has achieved a higher growth in the rail container freight market. It has grown by 15.8 per cent in fiscal year 2010-11 as compared to the

ARINDAM GHOSH

As one of the key pillars in enhancing supply chain effi ciency, infrastructure is probably the most critical aspect of an economy. Notably so, the government’s much needed impetus to create world-class infrastructure in the country augurs well for the holistic development of logistics & supply chain in India.

Building ABuilding AStrong FoundationStrong Foundation


overall freight growth of 6.6 per cent for Indian Railways. “Even in the well established EXIM container segment, rail accounts for less than one-third of the overall movement; whereas, the remaining volumes are being moved by road. Most of the customers are moving these volumes through road due to poor service levels in rail,” elaborates Sajal Mittra, CEO, Arshiya Rail Infrastructure.

Rail aims to increase its market share of freight movement in the country from the current 35 per cent to at least 50 per cent by the end of this decade. Setting up infrastructure will offer Railways a big boost. But for this: • Indian Railways’ network will have

to be significantly augmented to increase its freight carrying capacity

• Special attention will have to be paid to augmenting the carrying capacity of the trunk route, which accounts for only 16 per cent of the network, but carries 50 per cent of the traffic

• There is also a need to develop dedicated freight corridors, etc.

Air CargoThe air cargo industry has grown at eight per cent over the last five years. In financial year 2010-11, India achieved an air cargo volume of 2.35 million tonne of which 1.5 million tonne was that of international cargo, while the remaining 0.85 million tonne was of domestic cargo.

The industry is expected to achieve threefold growth in the next 10 years to seven million tonne. The anticipated growth rate may seem healthy for the industry. However, if compared to some of the best run air cargo airports in the world, India has a long way to go. While inadequate infrastructure comes as one of the major barriers hindering the growth of the Indian aviation industry, air cargo terminals face some other major challenges in terms of infrastructure. These include: • Poor infrastructure at the terminals:

The presence of poor cargo handling infrastructure at airports across the country makes way for spoilage,

pilferage and increased turnaround times for cargo carriers. There is a need to achieve improved efficiency through the usage of state-of-the-art material handling systems and implementation of modern technologies & other automation systems.

• Cargo processing: It is imperative to understand that cargo terminals need to perform their activities as processing centres. Many cargo terminals are used as warehouses. Presently, a number of activities ranging from custom checks to x-rays and other security related measures are carried out. These consume a lot of time in the movement of the cargo at the terminal. There is a need to undertake initiatives such as developing certain external cargo processing facilities.

• Easy land acquisition: Acquisition of land near major airports for increasing the cargo handling capacity is crucial.

• Multi-modal connectivity: Improving road & rail connectivity of air cargo terminals with the hinterland would offer a boost to international trade.

Ports and RoadsSea traffic carries about 95 per cent of India’s exports by volume and 70 per cent in terms of value. The export & import of Indian merchandise has registered double-digit growth in 2010-11. The total traffic handled by all the ports in 2010-11 was 894.35 MMT. The government’s Maritime Agenda 2020 has set targets to improve the capacity of major ports to reach 1,328 million tonne by 2016-17 and 1,459 million tonne by 2020. It has already taken initiatives in this direction by making easier investments options and policy reforms.

The EXIM volumes being handled at the ports have been growing rapidly. Also, a large number of new ports have either been commissioned or are at various stages of completion. As all these ports will have rail connectivity, they will also be an important growth

driver for the container train operators and Railways, at large. An increase in overall traffic would surely ensure a growth in volumes for rail as well.

In terms of roads, India has one of the world’s largest networks, with a total length of 3.3 million km. But much of this network is not at par with international standards. One of the major initiatives taken by the government towards improving the road infrastructure is the Delhi-Mumbai Industrial Corridor (DMIC) – a $90 billion mega infrastructure project. DMIC will be developed with financial and technical assistance from Japan, which will cover an overall length of 1,483 km between Delhi and Mumbai.

LOGISTICS INFRASTRUCTURE According to a Planning Commission report, the government plans to double its investment in infrastructure to `40.9 trillion during the 12th Five Year Plan from `20.5 trillion during the 11th Five Year Plan period. This initiative is set to offer the logistics industry a huge boost. Besides this, the government is not only putting in funds from its own pocket to develop infrastructure, but it is also making changes in policy reforms to attract funding from the private sector as well. Many new ports, roads & highways and airports are in the process of being developed, while many such projects are still at the approval stage. Also, ambitious projects like the Golden Quadrilateral linking the four metropolises of Delhi, Mumbai, Chennai and Kolkata have been planned and executed. In ports as well, India has a wide network with 13 major ports and 176 non-major ports. The country has over 130 airports, and globally, it has one of the largest railway networks spanning about 63,000 km.

To overcome all the difficulties related to infrastructure, India needs to formulate a strategy plan or a blueprint to ensure the holistic development of the logistics industry.

[email protected]


10 PILLARS OF SUPPLY CHAIN EXCELLENCE10 PILLARS OF SUPPLY CHAIN EXCELLENCE TALENT RETENTIONTALENT RETENTION

OVER the past several years, the visibility of SCM as a collection of diverse and critical skills has increased substantially. SCM has evolved from a loose affiliation among functions – such as purchasing, manufacturing, and logistics – to an integrated and cross-functional discipline. Consistent with this evolution, an increasing number of educational institutions are offering SCM degrees. Similarly, many professional organisations are modifying their names and broadening their horizons to cover the full

spectrum of supply chain activities. When it comes to career progression and human resource management, however, most firms continue to focus on individual functions. A more formalised characterisation of the SCM profession is obviously needed. Continued progress requires a more broadly accepted definition of SCM and a definition of the requisite experiences needed to achieve professional status in this business discipline.

DEDICATED INSTITUTIONS THAT CATER

TO GROWING DEMAND With the opening up of the economy and globalisation, there is a huge increase in the transportation of goods across countries. In addition, logistics companies are sincerely trying to benchmark their HR practices with the best in the industry and implementing measures to attract & retain talent. Given the steady interest in logistics as a long term career option among the brightest of the Indian youth, it can be safely derived that the Indian logistics sector will leverage on the growth path it has witnessed over the past decade.

To cater to the growing demand, many leading institutes are now offering specialised courses on logistics and SCM. Industrial body, the Confederation of Indian Industry (CII), has also taken a proactive step by introducing ‘Certification of Supply Chain Professionals’. The objective of this certification is to recognise and endorse the competencies of supply chain professionals based on the body of knowledge.

“The CII Institute of Logistics is a centre of excellence, which aims to promote the logistics section in the country. We started the institute in 2004, when there was no formal education for this section. We offer courses for working professionals anywhere from three months certificate course to three years post diploma course. These courses are recognised by the government. We see around 80 per cent participation from working professionals, while the rest 20 per cent from services like Army and Navy, among others,” said KV Mahidhar, Head, CII Institute of Logistics. According to Mahidhar, more than 10 per cent are international students.

Various institutes are also offering online courses for working professionals to suit their schedule, which has attracted many who want to pursue a career in logistics and SCM. These institutes are trying to bridge the gap in terms of the management as well as operational levels.

NISHI RATH

Best In ClassIncreasing pace of globalisation, technological changes, growing customers’ demands and the spectrum of value-added services, among others, have enhanced the complexities of the supply chain. With this rapid evolution, both in terms of scale and scope of services, organisations are leaving no stones unturned to get trained professionals to create a seamless supply chain network. While several organisations are luring the best in the fi eld through attractive HR policies, some still believe that in order to keep it lean, best practices is the way to go.

Attracting the


SKILLS THAT COMPANIES LOOK FOR Functional SkillsAn SCM professional should have established subject-matter expertise and relevant skills in several of the major supply chain functions including procurement, demand/supply planning, manufacturing, global logistics and customer fulfillment. Technical skillsGiven the increasing dependence of the supply chain on technology, a true SCM professional must have experience in applying IT effectively. He/she should have dealt with the challenges of technology selection, implementation & application and should also have a well-developed understanding of the relationship between supply chain processes and execution management solutions.Leadership skillsAn SCM professional must demonstrate a broad range of leadership capabilities and must be able to lead projects involving customers, partners and competitors while effectively interacting with both internal & external executives. Global managementExperience in global planning and operations provide insight into the global supply chain environment and its challenges. The next best thing is to have extensive involvement in and responsibility for global planning & operations.Experience and credibilitySufficient knowledge and experience to evaluate the competitive environment, to conceptualise strategy, to assess & organise solutions, and to implement change both in the organisation and with supply chain partners.

WHAT COMPANIES SHOULD DOAlthough basic training is provided in most organisations, it lacks the necessary focus to tap and promote workforce talent and elevate service performance to global best standards. This is partly reflected in the survey response, wherein despite having

adequate workforce and low attrition, the quality of work has been lagging.

Another reason could be recruitment of inexperienced/unqualified staff at lower wages, with an objective of cutting on costs, unaware of the repercussions it could have on the quality of services rendered. At certain places, the operational training is limited to technology updates, while, at other places, it is purely in form of on the job experience. To compete effectively in today’s age, training in SCM practices and quality management techniques, such as Six Sigma, can help to a great extent.

Considering the development, organisations should make sure that SCM professionals are able to meet and adapt themselves to the rapid changes of a global economy that demand greater connectivity across companies and geographies along with the use of rapidly evolving technologies. “Various initiatives have been taken by industries to lure trained graduates in tier II & II cities. These initiatives include setting up of training centres, encouraging employees skill and by organising opportunity programmes like working with NGOs, to attract people to the industry and recruit & insist on first-day, first-hour-ready certified workers,” said Rajesh Aparnath, Head – PGDBA, Welingkar Institute of Management Development & Research. To lay the groundwork for talent acquisition strategy, every company needs a plan. For this, the management should keep in mind factors like objectives, needs for the coming year, turnover and attrition impact, among others.

FINDING THE RIGHT BALANCEImplementing a successful talent acquisition strategy requires an understanding of what the organisation needs to attract. It also needs a recruitment plan to bring those candidates to the table. Many companies do that by adding a few new best practices. “With rapid increase in transportation activities,

it has moved from normal transport activity to a strategic function, which plays a very crucial role in ‘just in time’ manufacturing and ensuring timely delivery of finished goods at the point of sales. This changing scenario calls for trained manpower, which can tackle the challenges of managing logistics activity in the most effective way along with minimum cost. The HR plays a very vital role in the selection and retention of professionally trained manpower for this strategic function. The HR policies also have to enable the team members to function as a coherent global unit,” added Aparnath. All this means that the demand for talent will, in general, exceed the supply for the next decade, driving more companies to develop programmes that identify, develop and retain the talent they have. There are various players who have done this for years, such as - Frito-Lay (PepsiCo) and P&G, to name a few. But now, due to the growth in demand, many companies are set to take talent management a lot more seriously.

THE GLOBAL SCENARIOSector analysis of PwC’s 15th Annual Global CEO Survey recently revealed that attracting and keeping hold of talent is a significant concern for most bosses within road transport. According to the report, local disruptions are have a big impact on global supply chains; whereas talent is a key concern for everyone. Around 72 per cent transportation & logistics CEOs are changing their strategies for managing talent, said the report. Fewer transportation & logistics CEOs plan to add jobs this year, but talent constraints are still hurting. Around 40 per cent think it is getting harder to hire in the industry. Shortages hurt results – 21 per cent of transportation & logistics CEOs say that they prevented the company from reaching growth forecasts, while only 27 per cent are very confident of having the talent they need to execute their company’s strategy over the next three years.


10 PILLARS OF SUPPLY CHAIN EXCELLENCE10 PILLARS OF SUPPLY CHAIN EXCELLENCE INVENTORY MANAGEMENTINVENTORY MANAGEMENT

THE Indian Institute of Materials Management has aptly described inventory as the blocked working capital of an organisation in the form of materials. Knowing that this is the blocked working capital, it should ideally be zero. But many a time, we see manufacturers maintaining their inventory because of the fear of fluctuations in demand and lead time. In some instances, it is maintained to take care of the increasing price tendency of commodities or rebate in bulk buying.

Understanding the criticality, every

organisation focusses on inventory optimisation when it comes to improving business efficiencies and cutting costs. An inventory reduction drive always yields results, which are visible, and releases cash back into the business. In short, inventory management is a crucial phenomenon that determines the health of the supply chain as well as impacts the financial health of the balance sheet. Being dynamic in nature, inventory management requires constant and careful evaluation of external & internal factors and control through planning & review.

BECOMING LEANSupplier Managed Inventory Supplier managed inventory is a long-established practice that continues to grow in popularity. Companies with more than $1 billion in revenue say that they have suppliers to manage consignment inventory for them. However, some newer twists on this practice are providing greater benefits and lower risks for suppliers.Pull-based ReplenishmentIn the traditional consignment supplier managed inventory model, the supplier builds the product to a forecast & pushes it to an inbound Vendor Managed Inventory (VMI) hub or other location. In this model, the supplier still owns the inventory at the hub until the buyer pulls the product down. This creates higher inventory carrying costs for the supplier, as it has to own an additional bucket of inventory and higher inventory risk. Buyers always want more than enough inventory in the hubs. As a result, when a buyer provides a forecast, and when the forecast is off, the hub is left with excess inventory, which is the supplier’s liability. Moving to a pull-based (rather than a forecast-based) replenishment process – as used by lean operations – can reduce that liability. Forecasts should be shared, but suppliers build to actual demand pulls instead.Moving From Purchase Orders To Min/Max ReplenishmentCompanies shift from using purchase orders and release notices to trigger supplier replenishment to have some suppliers do min/max replenishment instead. To do this, a company sets the minimum and maximum target levels for an item at a plant or another company location, and then asks the supplier to take responsibility for ensuring that the inventory is maintained within that range. Supplier collaboration technology is helping companies execute these strategies by: • Providing real-time views to

suppliers of information; such as on hand inventory, forecasts, current & future production

PRERNA SHARMA

Rich DividendsFor long, inventory optimisation has been a cause of concern for large organisations. Knowing that, it eats into the profi t margins of companies, careful planning and forecasting is of prudent importance when it comes to inventory management. Moreover, with the advent of vendor managed inventory, this phenomenon is slowly giving rise to added opportunities for logistics service providers to enhance their scope and expanse in the entire supply chain.

Ensuring


schedules, and order commitments – this helps suppliers plan efficient replenishment processes.

• Providing shared status dashboards to warn of impending problems, such as red (under the minimum), blue (over the maximum) and green (in range) indicators for inventory positions.

• Letting a company’s materials managers and purchasing agents see shipment notifications and perhaps, even supplier in-process activities. With visibility to in-transit inventory, for instance, a materials manager can understand that even though on hand inventory has dipped below its minimum target, a shipment is on its way, and so, no action needs to be taken.According to Zubin Poonawalla,

Promoter & MD, Poonawalla Consultants, supplier min/max replenishment can be done with or without the supplier owning the inventory. It will generate inventory savings and service-level improvements to a company, while helping its supplier minimise inventory excesses and create more efficient production schedules & transportation moves.Keep in Mind: An emerging practice is to read just the min/max targets for the supplier on a quarterly basis. Some companies that have tried weekly or daily readjustments have found that this does not give suppliers the stability they need to meet target levels and drive internal efficiencies. Instead, it leads to payment and performance disputes. Also, in cases where a quarterly adjustment would lead to a large drop in the inventory targets, consider implementing reduction in steps over time, so that the supplier can manage its cash flow and revenue more easily. Being successful with the min/max approach requires inventory accuracy and good planning systems & planners. For instance, a standard kanban process may be more appropriate if on hand inventory accuracy is an issue.

Using a Virtual Inventory BinSome companies use in-transit inventory as a virtual inventory bin, reallocating and redirecting in-transit inventory. Virtual inventory bins can be used both in a multi-stage manufacturing process as well as for finished goods inventory distribution. Using a virtual inventory bin can take a number of forms, including allocating orders while in-transit, assigning new shipping instructions to divert in-transit inventory to higher-demand destinations, and holding unallocated inventory at a deconsolidator until there is an actual demand pull.

Companies replenishing a customer’s VMI hub, where there is low lead time variability, but long transit times, should seek to renegotiate their contracts to enable in-transit inventory to be treated as available inventory. By providing excellent in-transit visibility and shipment reliability to the customer, firms can operate with fewer days of supply at the hub and thus, lower their total inventory costs. PostponementPostponement is considered highly important to inventory management success by 41 per cent of manufacturing-intensive companies and 19 per cent of distribution-intensive companies. Postponement strategies can occur in upstream processes or in the final configuration of finished goods. Although often associated with the high-tech industry, postponement is being used across a variety of businesses, such as tractor manufacturing, in which dealers attach buckets, shovels and other attachments based on customer orders, and tomato canning, where unlabelled cans (called ‘brights’) are held and customer-specific labels are applied when orders come in.Inventory In Multi-Level DistributionLonger, more globalised supply chains are driving interest in determining where just in time processes should be used, where inventory should be buffered, how much should be held, and in what state (e.g., generic

product or finished good). To support these objectives, a new generation of commercial inventory optimisation technology has been created. These tools use probabilistic (stochastic) methods, taking into account the distribution of variability, rather than the traditional deterministic methods. For instance, in a lead time distribution, 80 per cent of shipments might have been on time, 12 per cent may have taken an extra week, and another eight per cent an extra three weeks. Multi-echelon inventory optimisation tools often come up with surprising answers that may be heretical to a company’s existing inventory philosophy. Some examples of these are: • A lean-focussed equipment

manufacturer had uncompetitive customer order lead times of 28 days because it was fixated on not having work in progress or raw materials. These lead times meant it could not respond to upside market demand. By holding slightly more in-process inventory, it was able to cut lead times, improve customer satisfaction and capitalise on unexpected demand.

• A company with facilities in the US and China thought it should make 80 per cent of its items in China, but the optimal policy turned out to be to make just 18 per cent in China. These new multi-echelon optimisation solutions differ from traditional MRP/DRP and APS systems in important ways. These include running a simultaneous optimisation for all items at every individual location over multiple echelons of the supply chain. The optimisation can take into account where to position inventory across tiers to take advantage of pooling and postponement opportunities, while meeting business objectives. These tools can also optimise the mix of customer service levels assigned to items, whose sum will meet the overall objective with far less inventory expense.


10 PILLARS OF SUPPLY CHAIN EXCELLENCE10 PILLARS OF SUPPLY CHAIN EXCELLENCE GOING GLOBALGOING GLOBAL

IN the globalised world, logistics cannot be bound by geographies and territories. Waking up to this thought, Indian logistics companies are foraying into the globalised network of services and gaining profits banking on increasing opportunities in the overseas markets. But establishing a global supply chain and logistics network has its own set of challenges. In such a scenario, how do companies prepare for these challenges and identify potential markets for their services & solutions? The answer lies in analysing the needs of the global markets, reaching the last mile in diverse business

environments and ascertaining the needs of foreign customers. Analysing these risks and the probable solutions, we found that though going global is the right decision for Indian logistics companies, this is not as easy as it seems. Lloyd Sanford, MD, Applied Logistics India, avers, “In my opinion, Indian 3PLs lag global MNC leaders as also globalisation benefits. There are exceptions such as Uniworld Logistics, now in 10 overseas countries offering global logistics for time-sensitive, high-value fashion goods, lifestyle merchandise and critical aviation AOG spares delivery. Their core international

ocean and air services are backed by integrated logistics parks, pan-India modern warehousing & distribution and ‘cloud-based’ supply chain logistics IT.” So, what happens in the global environment that has prevented many from entering it? The supply chain complexity grows multifold, as companies have to face unknown waters in terms of rules & regulations, trade barriers, language and cultural barriers as well as infrastructure bottlenecks. Arriving at solutions for some of these issues needs strategic thinking and forethought while planning. Here are some of the major challenges and their probable solutions while entering global markets: Covering the distance and multiple business variablesMany Indian logistics companies are today servicing the Middle East, Asia Pacific countries, the US as well as European markets. But a major challenge that occurs while doing so is ensuring that goods are delivered at the right time, using optimum means of transportation, thereby delivering goods safely. With goods being transported over a greater geographical distance, different modes of transportation need to be used. These cause multiple handovers. Thus, extending a supply chain beyond borders lengthens the chain and results in exposure to greater variables including border crossings, multiple modes of transportation and handoffs, different government systems, technology issues, trade regulations and security & pilferage concerns. Each of these variables leaves scope for errors that can stall the entire supply chain. A logistics provider needs to chalk out a blueprint of his overseas supply chain and create strategic plans to ensure that the network of services is functional and provides smooth flow of goods through global trade management and compliance. Creating visibility throughoutLatin America, Africa, Southeast Asia and other countries have diverse rules and regulations, different currencies,

SUMEDHA MAHOREY

Logistics companies are considering expanding their services internationally to cash in on trade growth and suffi ce increased competitive demands from overseas markets. But to succeed in the global marketplace, companies must fi rst prepare their supply chain operations for logistics onslaught in foreign markets. Providing preparatory notes to go global, we analysed some of the major challenges that can be faced in international markets...

Venturing into International Waters?


government systems, multiple languages as well as different time zones. Under these circumstances, visibility in global logistics becomes very complex and difficult to achieve in an international supply chain. But it is imperative for a logistics provider to have complete visibility of goods. This becomes particularly critical as companies need to manage their supply chains strategically by identifying various points throughout the supply chain where goods can be held to reduce the risk of delays. With capacity issues being a concern in regions like North America, a delay-reduction strategy applies across the board, resulting in the need for specific skills and expertise to manage a global supply chain. In this case, technologies like RFID as well as apt procedures that can provide real-time visibility need to be developed. Inconsistent technology and infrastructure supportIn Africa as well as in some developing countries of Asia, technology and logistics infrastructure is not well developed. In this case, ensuring the pace of flow & real-time visibility of information becomes a daunting task. To tackle these, companies need to avoid the creation of islands of technology, which are often witnessed when companies’ are acquired. These acquired companies already have technology in place.

In an attempt to allow the flow of information between the two disparate systems of the two different companies, often, short term communication interfaces, which are not standardised for many years, are developed. These islands of technology create data silos, which result in disparate knowledge across global supply chain operations. To resolve this, these systems should be converted into an enterprise application, which defines and drives best practices managed centrally. This would give scope for flexibility while meeting the demands and expectations of varied customers in any part of the world.

When it comes to logistics infrastructure, in most of the third world and developing countries, supply chain managers & customers are not even sure about the shipment’s whereabouts, until it actually arrives. Add to this, missing and unreliable information that is made available to supply chain managers by local authorities. All this creates a risky environment and decreases flexibility of the global supply chain. So, how do you maintain supply chain integrity in an ever-increasing, dynamic environment where the end client keeps asking for higher quality of service at lower costs? According to Lloyd, some fundamental solutions include good people, good communication and good technology. If LSPs put these three components in play without structure, the resulting value is limited. He adds, “If you take the time to set up proper disciplines starting with an exciting and compelling reason for talented SCM players to join you, a comprehensive strategic plan, solid operating infrastructure, precise SOPs, low-cost & highly responsive technology and effective training across all SCM processes, then the full value of your people & communications investment can be realised in the global network.”Dealing with local competitionGoing global may seem to be the next logical upgrade for a supply chain network, but a major challenge comes in the form of players in the domestic overseas market. Tackling the price war and providing solutions better than those available in the present market, is not an easy task. Years of research, market analysis, as well as skilled talent from the home country can help solve these issues. Also, having a set roadmap about the initiatives that need to be taken in a particular market for the long term will help the company stay focussed even amid tough competition. The competition challenge put forth by the existent players can also be dealt with by establishing relationships with new reliable and specific country-savvy suppliers. Lloyd explains, “Adjusting

to local environments at the start of any business is a critical first step. Understanding existing logistics operating challenges with ‘on-the-ground’ knowledge and experience requires finding credible and reliable partners or locals having experience and the right aptitude. Knowing the client’s full expectations as it regards cost-to-value and quality of logistics service required is essential. For example, a labour-intensive truck or warehouse operation may be the best method in India, but that approach will not suffice in Columbus, Ohio, where distribution centres are highly automated and retailers depend on précised logistics and fulfilment processes for timely service to three-fourths of the US’ consumer population.”

Each country has its own unique set of trade compliance regulations and each certainly poses its own set of logistical challenges. By turning to outsource providers who can offer the expertise needed to keep the supply chain moving, Indian logistics companies can easily overcome the foreign entry barriers. Managing the right way The most common mistake that logistics players make while entering foreign markets is poor global transportation logistics management. It has been found in umpteen examples that the senior management’s inability to establish and follow a united approach towards a strong logistics execution creates confusion and inefficiency in the logistics network.

To achieve operational excellence in global supply chain logistics, senior managers must focus on crux management and operational issues beyond the supply chain. Each department must work in concert with other internal departments to identify challenges and opportunities for improved overall business functions. Lloyd states, “Principles of management as applied to the global supply chain can vary depending on the type of business, but fundamental


truths would include adherence to disciplines, centralised & decentralised authority, fostering team spirit, effective operating process controls and clear mission statement as regards to direction and purpose.” Apart from these, international buyers and sellers need proven structure for perfect order fulfilment. Besides product manufacturing & sales ingredients, the balance of events are the responsibility of the LSP and thus their principles must address the need for clarity and control across each of the estimated 100+ events that take place in the movement of an international order.

READY FOR GLOBAL EXPANSION? Not yet. Even if Indian logistics companies prepare themselves on all the above fronts, the maturity of markets like the US, China, Japan, Singapore and Europe, in terms of existing availability of well-integrated logistics services, creates a highly competitive

environment. Creating a unique solution to tackle this needs an innovative effort. Lloyd highlights, “Indian firms need to bring something new to the table, e.g. better technology, such as a ‘cloud-based’ ERP platform that supports true supply chain collaboration across all key supply chain partners. Those credentials plus proven cost saving strategies and superior services from tightly integrated India domestic truck, air or rail intermodal links to international branches would help open doors in both mature and developing markets.”

MAKING FOREIGN EXPANSION PROFITABLEThough there are several vital components at being successful in global logistics markets, some of the fundamental ones include creating a workable strategy and implementing that strategy in a very thorough & professional manner. Lloyd advises, “Typically, there are no lasting short

cuts in logistics and this is due to the extensive reliance on transaction-based legal documentation that must be in place to realise delivery. However, it would also be wise to not try and reinvent the wheel, rather to use Indian entrepreneurial skills for innovative approaches to both old and new problems. Just be careful using jugaad and sab chalta hai solutions in modern marketplaces may not scale so well.” Thus, Indian logistics companies need to demonstrate global expertise & reach and this can be done by preferably establishing their own overseas offices in key Indian trading countries and new emerging economies like Brazil, Russia and South Africa. Typical Asian locations to set up representative offices would be Japan, South Korea, Mainland China, Hong Kong, Vietnam, Thailand, Malaysia, Singapore and Indonesia.

[email protected]

Going global, continued

FINANCING OPTIONS FINANCING OPTIONS 10 PILLA 10 PILLARS OF SUPPLY CHAIN EXCELLENCERS OF SUPPLY CHAIN EXCELLENCE


JUST like the heart that ceaselessly pumps blood into the body for its survival; the logistics industry requires pumping in of finance to ensure its smooth functioning & evolution. Most logistics companies today need capital for a number of activities – be it improving transportation infrastructure or creating quality in services. New comers to the industry also need financing to cover their initial costs and expenses. Apart from these operational reasons, heavy investments are required in the logistics industry to suffice the huge demand that will arise out of the anticipated 15-20 per cent annual growth of key industries

such as automotive, engineering and pharmaceuticals, among others. With India emerging as a global manufacturing hub, the need for global sourcing and distribution warrants

as well as development of internal capabilities to prevent increased outsourcing of logistics is a must. All these factors have created the need for heavy capital investment in this industry and generated multiple opportunities for new entrants. Thus, foreign direct investment (FDI), private equity (PE) and venture capital (VC) investments in the Indian logistics industry have increased over the past few years.

As per Venture Intelligence, a research service focussed on PE and mergers and acquisitions (M&A), since 2009, the total PE investments in the logistics space has been $866 million, while that through VC was $53 million. This rise in investments has supplemented the market projections for the Indian logistics industry. According to a recent Cushman & Wakefield report, it has been projected that by 2022-25, transport & logistics will form 12-13 per cent of India’s GDP. To support these growth figures, immediate measures to develop robust infrastructure for the logistics industry is a must. Major financial inflow is required in the Indian logistics industry when it comes to developing this

SUMEDHA MAHOREY

The Indian logistics industry is expected to grow 15-20 per cent annually, touching revenues of $385 billion by 2015 due to heavy demand from the manufacturing sector. With these projections, an immediate need to develop logistics infrastructure in terms of warehouses, transportation and technology has created the need for more fi nancing options for the industry.

At the HEART ofAll-round Development

Data on PE & VC deals in the Logistics Space till YTD

Period No. Of

Investments

Amount ($M)

PE VC PE VC

2012 YTD 1 0 104 0

2011 7 2 272 16

2010 10 3 318 26

2009 10 1 172 11

Source: Venture Intelligence

Top Deals In Logistics Space In 2011Company Investors Sector Amount

($M)

Date

Continental Warehousing

Nhava Sheva

Warburg Pincus Container Freight 100 April 2011

Redington India StanChart PE Logistics

(IT Products)

81 July 2011

Karaikal Port Ascent Capital Port 43 September

2011

Aegis Logistics Infrastructure India

Holdings Fund

Logistics 15 March 2011

Source: Venture Intelligence


Financing options, continued

infrastructure in terms of warehouses, transportation as well as technology.

GENERATING SOURCES OF FINANCEApart from PE, M&A and VC investments, certain policy initiatives are also required to boost development in the logistics industry. As per a research paper by the Indian Institute of Finance, the country needs more than $11 billion to increase warehousing capacity and adopt newer technology. The government being aware of the increasing need, has offered various liberalised schemes through Food Corporation of India (FCI), for hiring of warehouses, which provide guaranteed hiring of godowns and income tax benefit u/s 35AD. However, for income tax purposes, warehouses are still not a part of the elite list getting exemption under the heading infrastructure. Warehousing Development and Regulatory Authority (WDRA), which was notified in October 2010 for implementing the Warehousing (Development and Regulation) Act, 2007, may work in the direction of getting warehouses in the coveted list of infrastructure. WDRA may look at providing an impetus to field warehousing, which involves a manufacturer making

available a portion of his property to the warehouse, which may be separated from the rest of the plant with the help of partitions.

Field warehousing is of multiple advantages, in terms of the benefits to the manufacturer, warehousing companies and the banks. The manufacturer benefits, as he can deposit the raw material in the warehouse and, in turn, get warehouse receipts, which can be used as a security for securing a bank loan. Such companies benefit by generation of additional business without having to invest in land and building. Banks will also have to think of creative ways to enter into this new area of working capital financing. Field warehousing can only be developed in the presence of accredited warehousing receipts accepted by banks. The transaction involves both a bailment and a pledge – a bailment of goods with the warehouse and then a pledge of warehouse receipt by the bailer with the lender. The main aim of field warehouse is financing.

Another area of policy emphasis is warehousing receipt financing (WRF). WRF by accredited warehouses will help farmers postpone their sales beyond the harvest season and also secure finances from financial institutions easily as

it will serve as secure collateral for financial institutions. The farmers will be strengthened as they will act as price negotiators rather than price takers. Hence, the authority should focus on promoting creditable warehousing receipts and its negotiability across financial institutions. However, regulators will have to spread awareness among farmers of the possible downside risks associated with this speculative activity.

For financing warehousing infrastructure, incentives need to be provided for equity financing, debt financing and financing by financial development institutions. In order to tap international financial markets, large warehouses may apply to multilateral institutions, export credit agencies (ECA), external commercial borrowing (ECBs), syndicated loans, private placement, global depository receipts, weather derivatives and other hybrid instruments.

Also, internal resources, public private partnership (PPP) and forward need financing are alternate sources of finances for financing of warehouses, which have been discussed below:Domestic Financial Markets • Equity Finance: In equity financing,

SMEs exchange may become a suitable place for raising money by warehouses. A higher debt-equity ratio may be permissible considering that inflows may generate immediately, but creating profits may take time. Specialised warehousing mutual funds may also have to come up to bridge the equity gap in mega warehousing projects, for example, port warehousing.

• Debt Finance: In raising debt for financing warehousing projects, the cost of funds should be the lowest so that the ultimate cost of providing warehousing facility will be cheaper. The decision of the project promoter to go in for equity or debt finance depends on various factors such as government guidelines, incentives available and

Acquisition Of Overseas Players By Indian LSPs Buyer Target Deal Value Month-Year

TVS Logistics Services (TVS

LSL)

MESCO, USA $11 million

(`50 cr)

January 2011

All Cargo Global Logistics Two Hong Kong based companies $3.6 million

(`16 cr)

October

2010

Aqua Logistics 3 Hong Kong-based companies

—CIT, TAG and AGI Logistics

$7 million

(` 32 cr)

June 2010

TVS LSL Multipart Holding, UK NA November

2009

Source: Transport & Logistics Practice, Frost & Sullivan - South Asia, Middle East and North Africa

Pure Domestic Mergers And Acquisitions Deals Buyer Target Deal Value Month-Year

Café Coffee Day (CCD) Sical Logistics $46 million

(`200 cr)

December

2010

Aqua Logistics Star Distribution Logistics NA September

2010

TCI Infinite Logistics Solutions (51% Stake) $0.3 million

(`1.02 cr)

March 2010

Source: Transport & Logistics Practice, Frost & Sullivan - South Asia, Middle East and North Africa


return on equity as also the cost of debt vis-à-vis equity.

• Domestic Capital Market:

Debentures (convertible/non-convertible)/bonds may be issued by companies to augment the resources for raising money in the capital market. Presently, internal rates are deregulated and credit rating is mandatory if the maturity of instrument exceeds 18 months. NCDs with the option of buyback, debentures with equity warrants, floating rate bonds and deep discount bonds are some of the innovative instruments offered in the market.

• Financial Developmental Institutions: In addition to a large number of state-level institutions and development finance institutions, to finance projects of smaller size, commercial banks also participate in giving term loans to a limited extent.

International Financial Markets• Multilateral Institutions: These

include institutions like World Bank, International Finance Corporation (IFC), Asian Development Bank (ADB) and Commonwealth Development Corporation (CDC), who may give loans with sovereign guarantee for long periods and low cost.

• External Commercial Borrowing

(ECB): These include Yankee Bonds, Samurai Bonds, Dragon Bonds, Euro Currency Syndicated Loan, UD 144A Private Placement, Global Registered Notes (GRNs), Global Bonds and Medium Term Note (MTN) Programme.

• Syndicated Loans: The special features of syndicated loans are that they are available for medium to longer periods; specific to the requirements of the borrowers to suit their projects and availability of floating rate of interest. Most of the investors are Asian/European banks, financial institutions (FIs), insurance companies and

pension funds.• Private Placement: Finances may be

raised through private placement to financial institutions known as Qualified Institutional Buyers (QIB), without the kind of stringent disclosure requirements needed for equity issues. Long tenure of bonds and less restrictive covenants make this proposition conducive for financing warehousing projects.

• Global Depository Receipts (GDRs):

GDRs present an attractive avenue of funds for Indian companies. Indian companies can collect a large volume of funds in foreign currency through Euro issues. GDRs are usually listed in Luxembourg and traded in London in over the counter market or among a restricted group, such as qualified institutional buyers (QIBs) in the US. GDRs do not have voting rights, so there is no fear of loss of management control.

• Weather Derivatives & Hybrid

Instruments: These may be innovatively used for hedging the risks that may arise due to tsunamis, earthquakes and other natural calamities.

Internal ResourcesOne of the most important sources of finance is internal resource generated through the warehouse’s own operations. There are two aspects of this issue. One, the funds already invested but not yielding results, need to be put to use. Two, the warehouses should be made cost-effective so that they are able to generate enough resources from the project. Public Private PartnershipHere, land may be provided free of cost by the government and infrastructure and maintenance may be done by the private entrepreneur.Forward Need Financing It has been recommended by experts that regulators should introduce forward need financing whereby the states forecast their requirement and pay 10 per cent of the same at a given future price to a central pool,

which may be maintained by FCI/ Central Warehousing Corporation (CWC). The states would gain in term of cheaper food grains and pool will help FCI/CWC in reducing the cost of capital and in supply of cheaper food grains. The expenditure on renting warehouses by FCI can be substantially reduced by using forward need financing. This will prevent the cost of capital being added to the cost of food grains.

WILL FINANCES IN ALL FORMS BE REALLY EFFECTIVE?With more sources of finance and the already existent flow of investments in terms of PE, M&A, VC, the Indian logistics industry is expected to suffice the heavy demands from the manufacturing sector in the next decade. But how will these investments transform the logistics landscape? As per a logistics expert, it might be early to evaluate return on investments as exits have been few, transport infra investments, especially roads and minor ports, are doing better on the current price basis as opposed to services investments. Also, only three out of every 100 PE targets actually convert to deals and logistics promoters are advised to strictly evaluate their PE readiness & probability of success on key parameters of scale, management bandwidth, transparency and exit potential before deciding to raise external equity capital.

Thus, as logistics service providers wake up to the many options in financing their projects and actually start reaping benefits from the many sources of finance available, it is expected that the Indian logistics industry will transform into a highly technologically abled mature market in the next decade.

[email protected]

With inputs from Aman Agarwal, Professor of

Finance & Vice Chairman, Indian Institute

of Finance and Saurabh Agarwal, Vice

Chairman, Indian Institute of Finance, Delhi


10 PILLARS OF SUPPLY CHAIN EXCELLENCE10 PILLARS OF SUPPLY CHAIN EXCELLENCE TECHNOLOGYTECHNOLOGY

TECHNOLOGY alone does not make logistics viable, but it widens the zero inventory doors. With growing demand, fulfilling the assigned task within the given timeline and cost barrier as per customers’ expectation becomes difficult. Technology lies behind the leadership of a firm by enhancing the overall experience of its customers. Take, for instance, the case of Walmart. According to famous Author and Co-founder of Netscape Communications Corporation, the world’s first browser, Marc Andreessen, “Today’s leading real-world retailer, Walmart, uses software to power its logistics and distribution

capabilities, which it has used to crush its competition.”

Yes, technology has made logistics smarter than ever, particularly after the inclusion of Intelligent Transport System (ITS), Information and Communication Technology (ICT), Electronic Data Interchange (EDI) and Electronic Commerce (EC). A combination of technologies – from radio frequency identification (RFID) to global positioning system (GPS) to video – is improving the levels of visibility. There is almost no technical barrier today to complete visibility and so we can see everything, all the time, in real-time.

TECH WOVEN PLANSPlanning is important; it makes the task effective and achievable. In the words of Capt John P Laverdure, Scott Air Force Base, HQ Air Mobility Command, 1996, “Logistics planning is the wisdom to realise when working on Plan A that you will run into conflicts in executing Plan B and being properly prepared, and successfully executing Plan E.” With technology advancements, it is now getting easier to stick with Plan A and fulfill it despite all odds. It is now easy to get an efficient plan quickly. Once we feed in all the details, there are sophisticated software programmes, which automatically reveal the plan. For instance, there are Manufacturing Resource Planning (MRP II) packed with software suite, Enterprise Resource Planning (ERP), and Advanced Planning and Scheduling (APS) systems, which have been designed and developed to calculate resource-limited schedules, track orders of raw materials & monitor shop floor production. Routing is the stem of planning in logistics. Elaborating on routing solutions, Sridharan Mani, CEO & Director, American Megatrends, comments, “We have provided dynamic route solutions, which, based on the vehicle type – be it a two-wheeler, four-wheeler or any other – would give you the optimised route with preferred alternatives.” But he still feels that planning is the field where there is still a lot of space for development. “Our planning is still not as per customers’ expectation,” he says.

SUPPLY CHAINPlanning is key to success and so is its execution. Once the planning is done, it is the supply chain management, which handles all the business on ground. So, even if there was weak planning, a superior SCM can override it all. As the famous American cowboy Will Rogers once said, “Even if you are on the right track, you will get run over if you just sit there.” With technology advancements, SCM has added some

SUPRITA ANUPAM

Technology has become an enabling factor behind globalisation and localisation of logistics. Technology guides logistics not only in quality, cost & fl exibility, but much beyond that. It not only helps to increase the total market share of a logistics fi rm based on integration level index & customer satisfaction index, but also decreases the impact of ill effects on the environment.

Bringing logistics on theBringing logistics on theFast TrackFast Track


new flavours such as critical logistics and on-demand transportation in its service, which, with time, are becoming important. Sujoy Guha, CEO & Director, Sequel Logistics, explains, “Suppose you break your spectacles, you want the replacement instantly, but the company promises to provide it within 3-7 working days. But now, because of advancements in technology, infrastructure and IT, it is possible to reach within the very same day.”

ELECTRONIC DATA INTERCHANGE (EDI)This has dramatically changed the way of managing commercial transactions. These systems use computer links instead of hard copy paper, which required extensive time to transfer and often contained errors. Further, advantages of these ICT-supported information exchange systems include increased speed & reliability, increased storage capacity, increased transparency, reduced transaction costs and increased worldwide coverage. EDI has also improved the mechanisation and automation inside the logistics facility, quality control and warehouse management, thereby reducing the lead time. In future, companies will be keen to invest in EDI-based applications to facilitate further reductions in supply chain stock levels and to forge stronger supply chain linkages between both their customers and suppliers.

ICTThis enables the management to monitor inventory at all locations throughout the organisation, which may include multiple warehouses in multiple countries with real-time visibility of demand forecast information, inventory levels and production schedules. Backed with sophisticated decision support systems, ICT has truly integrated the whole logistics, as it offers supply chain managers the ability to dynamically manage the traditional supply chain trade-offs. ICT has also explored the zero inventory idea by lowering the warehousing cost.

Commenting on how ICT has filled the gap between what customers expect and what companies deliver, Guha informs, “Technology has to suit the requirement of the customer. Let’s say, you are an e-commerce customer. You go to a website, select a product and buy it. Once you paid the money, you will definitely expect it to be delivered instantly to you. Now, that is human behaviour. Thus, one part is the physical transportation of the material, while the other is the expectation, i.e., you are expecting it because you bought it and you want to believe that it will reach you soon. This expectation has to be fulfilled through IT interface.”

Guha adds, “Most companies have a standard way of packaging. But we have customised it. Let’s say, you have to send a necklace to your mother. But now there are 10 members in your family, but you only want your mother to receive it. Most companies would not do such a delivery. But we manage this kind of a delivery through a password system. Similar to an ATM pin number, a password is sent to the receiver. As soon as your mother enters the correct password, you will get an SMS stating that the necklace has been delivered to your mother. Thus, we ensure that the good is received only by the person for whom it is intended – in this instance, your mother. All this has been possible because of the intervention of IT.” “ICT has added value to the supply chain. India’s infrastructure is poor and here, delivery is almost one-fifth of that of Singapore. Therefore, it is necessary to keep updating customers. We are now implementing SAP for all our internal processes, which will ensure transparency and visibility for customers to track the goods,” explains Guha.

TRACKINGAs computing hardware is getting smaller, faster and cheaper, tracking is coming of age. It has enabled a window of further scope of technology

applications in tracking as well as supply chain. The necessary hardware, such as barcode scanners are now being fitted in those parts of supply chains where previously it was not even considered because of cost or space constraints, or both. Then, there are vehicle tracking systems like Falcon-I, which provide information along with fuel usage based on GPS, wireless system as well as digital mapping. It includes even the pre-installation of commands like five preferred routes and five restricted areas with automatic speed control systems.

Sridharan adds, “A lot of tracking software programmes, which are efficient in tracking, are available. This is the field where India is at par with the world.” But then, a GPS tracker needs Lower Earth Orbit (LEO) satellites to have a real eye on things. Because of its proximity to Earth, a LEO satellite can eye only for 90 minutes over a particular region. After that, the tracker will have to connect with another LEO satellite. India is still lagging in the required numbers of LEO satellites to cover the entire country. Hence, the trackers have to connect with either GEO or MEO satellites, which result in poor visibility. But that is an issue to be taken up by the Government of India.

THE JOURNEY CONTINUES…Logistics has widened dramatically from the modest pallet to sophisticated conveying systems with automated traffic management and robots further boosted by real-time tracking mechanism. It is the technology that made e-commerce a grand success, and if today, flipkart is expecting to be billion-dollar company by 2015, logistics is the core reason behind it. Trade liberalisation and ICT enabled logistics are continuously melting the ice of the global barrier, thereby making global manufacturing and markets more organised. But then, the world of sheer logistics is not homogenous, and it cannot be so because of the geographical differences.


10 PILLARS OF SUPPLY CHAIN EXCELLENCE10 PILLARS OF SUPPLY CHAIN EXCELLENCE WAREHOUSINGWAREHOUSING

TODAY, logistics services have come of age. From being merely referred to as the movement of goods from the point of origin to its destination, it has evolved to become a value-added service that leads to safe & efficient transportation of goods. Logistics specialists have played a critical role in completely remodelling the entire SCM in the country. And in their quest to implement a more integrated SCM, developing superior storage and warehousing facilities have become a must.

The logistics industry is one of the fastest growing industries in the country and warehousing accounts for about 20 per cent of the total domestic logistics

industry. Warehousing Development and Regulatory Authority (WDRA) has suggested some steps to strengthen the warehousing segment. These include:• Warehouses should be constructed

with BIS-approved standards and design; they should have trained warehousemen.

• Credit facilities at cheaper rates by banks should be made available to the warehousing sector.

• Projected shift to a national Goods and Services Tax (GST) regime is also likely to provide a further impetus to the warehousing sector.

• The State Government should

help the warehousing developers by simplifying the procedure of land use conversion from agriculture to non-agriculture.

MAKING WAREHOUSES COMPETITIVEBuilding a warehouse involves huge financial investments. And making a warehouse highly competitive and best in class in the market requires a lot of planning. But for making a warehouse highly competitive, certain steps need to be considered. These include: Location Location plays a very critical role in making warehouses highly competitive. Better the location of the warehouse, easier it is for warehouse players to attract companies. Therefore, when selecting a location for a warehouse, one needs to ensure that they are located close to the production or consumption area or close to the national highway. However, given the criticality of the warehouse establishment, the overall regulations need to be more flexible, especially in areas such as acquiring land at strategic locations. This would offer private players a conducive atmosphere to make investments. Warehouse SafetySafety is another critical area, which all companies today take into consideration before opting for a warehouse. Safety in warehouses should be regulated by a series of standards like the Occupational Safety and Health Administration (OSHA) in the US. The US Congress created OSHA under the Occupational Safety and Health Act, which was signed into law. The main focus of OSHA is to prevent work-related injuries, illnesses and deaths. Ever since the administration began, occupational deaths have been cut by 62 per cent and injuries have declined by 42 per cent. However, the fatal injury rate for the warehousing industry is higher than the national average for all industries.

Under warehouse safety issues, there are some other considerations that need to be looked into. These include:

ARINDAM GHOSH

Warehousing in India is highly fragmented and is owned majorly by small- and mid-sized companies. The enormous opportunities created with the growth of the logistics industry in India has motivated players to shift from the traditional mode of operating a warehouse to adopting new and innovative methods in order to make their storage offerings highly competitive.

Making StorageMaking StorageHighly CompetitiveHighly Competitive


• Hazard Communication: This refers to the information about chemical hazards and the associated protective measures that are communicated to employees. Chemicals pose a wide range of health hazards, such as irritation and physical hazards, flammability & corrosion. Therefore, chemical manufacturers and importers need to evaluate the hazards of the chemicals they produce or import and provide information about them through labels on shipped containers & more details on material data safety sheets (MSDS).

• Electrical Safety: Many times electrical hazards are the root cause of injuries and fatalities at the workplace. Apart from being dangerous in a warehouse, it is one of the leading causes of accidents at construction sites. The first step towards electrical safety is controlling or eliminating factors in your warehouse that pose electrical hazards. Ground fault electrical shock is a common electrical hazard. And so, warehouses should provide ground fault circuit interrupters (GFCIs) for receptacle outlets or assured equipment grounding conductor programme to eliminate hazards in case of ground fault electric shock.

• Respiratory Protection: Many accidents occur each year and most of the time it is because of the absence or lack of personal protective equipment (PPE). Warehouses should provide their employees with proper PPE. Many accidents occur not because of the absence or lack of PPE, but because employees do not to wear it. This is particularly true in case of respiratory protection. In some warehouses, there is the presence of toxic airborne substances. Hence, it is mandatory that employees working here wear respirators.

Power Backup FacilityIn a country, like India, where having uninterrupted power supply may not be

always possible, having power backup is highly crucial for a warehouse owner to gain a strong comparative advantage over his competitors. It will ensure that within seconds when the power goes off, there is backup power. Skilled workforceVarious programmes need to be undertaken at regular intervals by warehouse owners to ensure proper training for warehouse workers and to ensure that the workforce is updated with the latest available technologies. Other guidelines which need to be followed include:- Employees should be trained on the

risks of each chemical being stored, incase of chemical hazards

- Provide safety and security gear for the workforce and train employees to clean up spills and dispose of used materials, etc., properly

- Dedicated and trained staff at various levels to ensure that the cargo is handled with utmost care & stacked in the best possible manner.

Proper Air-condition Facilities One of the major services that a warehouse should offer is proper air-conditioning facilities, especially if there is a cold storage. Nature Of Equipment Used Selection of proper material handling technology is a crucial factor. Implementation of the latest material handling technologies ensures more speed in the pace of work, enhanced productivity and increased safety. Designing Of The Warehouse A warehouse must be designed in a manner, which ensures safe, healthy and a suitable environment for the storage of goods & other materials. The spaces should be created in a manner that can accommodate bulk quantities, if required. Further, it is also critical for the owner to decide on the purpose of developing the warehouse and develop it accordingly, as this will enable the warehouse to be efficient & ensure optimal performance. It should have ample parking place for trucks or other goods carrying vehicles. This will lead to

optimal performance of the warehouse. Futuristic View While a lot of study should go into designing a warehouse, a warehouse should be designed such that it can handle future estimates made or even more than the calculated capacity of goods to be stored.

BRIGHT FUTURE IN STORE The warehousing capacity available in India, in public, cooperative and private sectors is about 108.75 million MTs. As per the estimates, additional 35 million MTs warehousing capacity is required in the next 5-10 years. Additionally, in India, there are about 85-90 per cent traditional warehouses and godowns, while 7-8 per cent comprise of modern warehouses. This speaks volumes about the huge potential that warehousing possess.

The warehousing sector, majorly controlled by the government, has managed to attract a lot of interest from private players. And the government has been proactive in terms of encouraging more participation from the private sector. According to Dinesh Rai, Chairperson, Warehousing Development and Regulatory Authority, “Availability and augmentation of storage capacity are the main priorities of the Government of India. There is a need for sufficient modern warehousing capacity to be created in the country to store and preserve commodities. WDRA will encourage only scientific warehouses, which would follow scientific code of practices for storage of food grains and other commodities. They will have trained warehousemen and WDRA will also organise training programmes for them.”

In the end, it is crucial to understand that the logistics industry is opening up several doors of opportunities for the warehousing sector. And so, for warehousing players to attain the highest levels of competitiveness, it is crucial that they take appropriate steps towards tapping this sector brimming with potential.


10 PILLARS OF SUPPLY CHAIN EXCELLENCE10 PILLARS OF SUPPLY CHAIN EXCELLENCE ROUTE OPTIMISATIONROUTE OPTIMISATION

WITH increase in fuel costs, logistics and distribution companies need to become highly efficient in the way they plan their transportation routes & schedules. Traditional methods of route planning do not address real-time events that affect businesses every day. And so, in order to cater to today’s customers’ short-notice requirements, route availability and vehicle issues, there is a need to ensure that route planning is able to quickly respond to any event, thereby ensuring the lowest cost of transportation.

THE BASICS A logistics company may operate along

short-haul and long-haul routes. Short-haul may involve trucking or rail, while long-haul routes may involve ocean vessels and air transportation. With both types of routes, there are loading and materials handling complexities, such as the availability of equipment and skilled personnel. There are also issues arising from the transfer of product between the different modes of transport and the subsequent consolidation of product in containers.

Logistics firms that operate their own fleets, tend to use a route plan that has the vehicles that leave from and arrive at the same location. This ensures minimum repositioning of vehicles and

personnel. However, developing routes that cover all deliveries and pickups to & from numerous customers is extremely complex and needs a lot of research on the same.

ROUTE OPTIMISATIONThe basis for route optimisation is the use of models to describe the transport network that needs to be planned. When building a model, the scope of the overall network needs to be defined, ensuring that all the data, such as regulations or highway problems, is included. The model has a number of components, which include: • Products: The product moves from

the origin to the destination. The product will be defined by its weight and volume, which are important factors for shipping.

• Vehicles/mode: Each vehicle may have different attributes, such as volume or weight capacity, loading times, cost per mile and vehicle limitations, among others.

• Personnel: The personnel assigned to the plan have characteristics that are governed by the type of work they perform. The above factors immensely

contribute to any company seeking route optimisation and cost reduction.

REVERSE LOGISTICS TO THE RESCUEThe challenge for every company is to increase profits and by opting for reverse logistics, companies can improve the handling of returns. As it reduces replacement and turnaround time, reverse logistics can serve as a major help for route optimisation. Using reverse logistics is more practical from a financial viewpoint. By adopting it, companies can cut on costs as it starts by reducing transportation and fulfilment of activities through the elimination of the root causes of returns.

REALITY CHECKWhile plying commercial vehicles, pick-up/delivery of the cargo is the prime motive. However, the organiser

NISHI RATH

Today, route planning, in any kind of transportation, has become the most sensitive and crucial aspect. Merely cutting down the nearest routes may not solve the quick delivery issue. Any fi rm or organisation or even a private single vehicle owner has to keep in mind various factors, which can ensure maximum output in terms of deliveries and pick-ups, in order to earn maximum profi ts.

Charting aCharting a ‘Route’ Map‘Route’ Mapfor for SuccessSuccess


has to think not only about the nearest route, but also the road condition, which could be the reason for failure in ensuring speedy delivery. Bad road condition also affects the speed, causes extra wear & tear of tyres and spares like springs & break liners, among others. This can result into major losses, as the vehicle might breakdown or need excess repairing costs against the freight earned and also collapsing the delivery schedule. According to Nitin Mathure, Manager – Business Development, Group A Logistics, “Many times, there could be a diversion imposed due to breakage of bridges, repairing work of mories (small bridge over the nallahs) on the desired route which could be undeclared in advance. In that case, the organiser should confirm the road availability from police authority in control.”

The bad road condition, diversion could hamper fuel efficiency, which is the most costly commodity in this business. The ghat sections/hilly mountains must also be reconsidered while selecting the route. “The organiser must also have a good survey of garages or repairing hubs and fuel refilling stations en route in case of any breakdowns of the vehicle,” opined Mathure, adding, “From the safety point of view, with respect to staff and cargo, one also has to keep in mind if the route is not exceptionally lonely. He must know whether night travelling is possible on that route or not and if any police patrol party is available or any aid is possible in case of emergency.”

Selection of the driver is also a very important factor, Mathure explained. “The driver may waste time in roadside hotels/dhabas or may consume alcohol. These can hamper the delivery schedules & lead to accidents. Therefore, a company must have the list and contacts of such hotels or key persons who can inform the driver’s activities in case it goes wrong,” he averred. Besides, there are devices available in the market, which

can be used to track vehicles. Such devices will let the company know if the vehicle is not on the desired route as plotted by the company.

WHAT’S TRENDING The importance of container transport has gained top priority. The vehicles/trailers used for containers could be open and longer than normal, which could be more than 30-40 feet in length. Vehicles containing widthwise bigger adjustable platforms are being used for over dimensional cargos. “For such vehicles, route selection is very important. These longer and wider vehicles need more radius to take turns, hence the need for selecting wider roads and routes having minimum turnings/deviations. Some of the cargos are higher than the permissible height. To carry such cargo, the route must be bridge-free and high tension electrical cables-free,” informed Mathure.

SELECTING THE PERFECT ROUTEThe prompt timing in delivery as instructed by the consignee, if managed by selecting the perfect route for the desired destination, the opportunity of grabbing more business, increases. One can achieve fuel efficiency with minimum vehicle maintenance and more profits for the organisation. And to save fuel is not only beneficial for the organisation, but also a responsible job for any nation.

REDUCING CARBON FOOTPRINTSCarbon emission is based on various factors, but some of them include the availability of infrastructure, technology and the mode of transportation adopted. The mode of transportation here relates to the aircraft that are currently being used by operators. The older aircraft are less efficient and highly pollutant; thereby damaging the environment. Adoption of newer aircraft, continuous breakthrough in engine technologies and design will lead to better fuel-efficient aircraft that are at least 50 per cent higher than today. Moreover,

with better infrastructure in place, and use of sophisticated software solutions will lead to improved & better air traffic management.

Based on research reports, the Indian freight industry is anticipated to grow 10 per cent annually by 2014 and the air freight sector is likely to grow at 8.5 per cent in the next five years. The future of the Indian cargo industry is focussed on competitiveness, adoption of sophisticated technologies, identification of areas in the existing system of cargo and express delivery handling, where improvements & changes are needed along with methods to offer improved air cargo services.

Small improvements can often result in various profits. As discussed above, reverse logistics can help route optimisation. It is also one of the most convenient ways to cut down on carbon footprints. By using reverse logistics operations, companies can eliminate inefficient returns processes that result in unnecessary transportation moves, thereby helping to reduce carbon emissions. For example, when a beverage company opts for reverse logistics to bring back empty glass bottles, it not only helps reduce costs, but also brings down the time spent on transportation and the number of moves, thereby cutting down on carbon emissions.

PLANNING AHEADThe ever-changing complexity of today’s transportation network can affect the financial validity of a route from day-to-day. By modelling the transportation network, the management can constantly monitor the small changes that affect the network in a real-time environment, thereby allowing changes that ensure the most efficient and economic route planning. Irrespective of whether it is road, sea or air, proper planning, keeping in mind simple factors like product weight and size, can also work wonders.

[email protected]


10 PILLARS OF SUPPLY CHAIN EXCELLENCE10 PILLARS OF SUPPLY CHAIN EXCELLENCE SUSTAINABILITYSUSTAINABILITY

AFTER the quality revolution of the 1980s & the supply chain revolution of the 1990s, sustainability supply chain management (SSCM) has become the buzzword today. As supply chains & businesses start focussing simultaneously on ‘planet, people & profits’, sustainability is emerging as the new metric for supply chains. A sustainable supply chain seizes value-creation opportunities and offers significant early adopters & process innovators. Managers need to integrate sustainability goals, practices & cognitions into the day-to-day SCM.

Deepening environmental concerns and perceptions of increased risk to

health & safety of community residents from supply chain activities have led to a significant increase in interest at the intersection of environmental management and supply chains. There is a need for fundamental change in the way we produce, consume and exchange goods & services. Environmentally conscious actions are no longer seen as challenges and contrary to financial considerations. In fact, they can be the basis for successful firms and supply chains.

THE BALANCING ACTThe notion of sustainability is mainly related to maintaining an ecological

balance. An emergent sustainable supply chain is the one that performs well on both traditional measures of profit & loss as well as on an expanded conceptualisation of performance that includes social and natural dimensions. It simultaneously considers & balances economic, environmental and social goals from a microeconomic standpoint. Sustainable supply chains mainly focus their activities on eco-efficiency, reducing material requirements of goods & services, reducing energy inputs to goods & services, reducing toxic dispersion, enhancing material recyclability, extending product durability, increasing service intensity of goods & services and maximising sustainable use of renewable resources. In the recent years, there has been a rapid increase of corporate initiatives & academic publications on SSCM. Proactive practices have been implemented through various Rs, viz., reduce, reuse, rework, refurbish, recycle, remanufacture, reverse logistics, etc.

Companies are moving towards integrating environmental thinking into core operations from material sourcing through product design, manufacturing, distribution, delivery & end-of-life recycling. In the emerging value-creation model, implementing green initiatives along a supply chain are increasingly seen as instruments for raising productivity, enhancing customer & supplier relations, supporting innovation and enabling growth.

Most major companies are now focussing on the environmental burden of their supply chain processes by recognising some of the contemporary environmental dimensions such as carbon emissions, energy & natural resources consumption. Green has become a common term to portray the eco-friendly image of products, processes, systems and technologies as well as the way business is conducted.

INNOVATORY TRACKMore sustainable products by technological innovations are likely to emerge. This, in turn, will force supply

Traditional green initiatives are generally associated with many weaknesses and problems. Therefore, there is a need to take new initiatives and look for innovative approaches. Research and practices in sustainable supply chain management to date may be considered compartmentalised. More integrative contributions are needed in the longer term, including intra- and inter-fi rm diffusion of best practices, green technology transfer & environmental performance measurement.

Right ThingRight ThingDoing theDoing the

At theAt the Right TimeRight Time


chains to become sustainable. Further, the rules that govern the attractiveness of reuse of products, materials & components are undergoing changes at the local, state, national & global levels. In addition to traditional brokers, many firms are now selling this material through online & traditional auctions. So, from the aspect of eco-centricity, a sustainable supply chain explicitly includes, NGOs, community members and even competitors that traditional chains either ignored or treated as adversaries.

At the policy making level, India has adopted a National Plan of Action on Climate Change as a positive step towards mitigating carbon emission levels. Improving energy efficiency & adopting clean coal technology is a central theme in the low-carbon strategy. It has increased its renewable energy target to 14 GW by FY13. The successive budgets presented by the government have a series of ‘green’ initiatives designed to boost eco-friendly energy & emission-free transport. Further, the government wants to use energy-efficient technology & all power plants may have to be based on supercritical technology.

At the firm level, Walmart, which launched a sweeping business sustainability strategy in FY05, recently set the goal of a five per cent reduction in packaging by FY13. The retail giant expects that the cut in packaging will save 6,67,000 MT of carbon dioxide from entering the atmosphere. Moreover, the firm anticipates $3.4 billion in direct savings and roughly, $11 billion in savings across the supply chain. Major firms like FedEx, Staples, Google and eBay, have already started using energy-efficient bloom boxes.

CHALLENGES One of the biggest challenges as per my understanding before the field of SSCM is extending the historical ‘common wisdom’ about managing supply chains. Much research, management education & practical application has

focussed on buffering the supply chain operations from external influences, including the natural environment, in order to improve efficiencies, reduce cost & enhance quality.

A fundamental question that arises about how to pursue SSCM across different stakeholders in a supply chain is ‘should this be considered a separate stream with its own strategic framework or should sustainability issues be integrated into the existing operation supply chain management frameworks & areas?’ While the complexity of sustainability issues might favour the former approach, the greatest contributions can be achieved by pursuing opportunities within a more integrative framework.

Presently, many governments are rewarding firms that adopt green strategies and are creating new regulations that penalise those firms that do not. Various incentives should be extended to industry consortia and firms for developing & promoting environment-conscious products and processes. The level of public awareness about sustainability, prevalent & emergent technologies and the environment needs to be increased. Various forums may be utilised for it. The government & regulatory authorities need to set up and spruce up certain regulations to protect the environment (such as for process & product emissions). For example, in the Indian context, organisations like CSE, CII and FICCI, may be involved along with NGOs in terms of policy proposal formulation and feedback.

Industry-specific and national level models may be developed for supplier-managed inventories & operations and for waste segregation & recycling. These will result in enhanced cooperation & collaboration and higher efficiencies. The industry and academia should collaborate to come up with technological innovations to address SSCM issues. These will have long-term positive impacts. Effective approaches for data sharing within

and across the industries need to be developed. Industry consortia may go in for intranets. For example, existing networks like CII and FICCI may be utilised & Internet may be leveraged on to achieve more cooperation & collaboration.

ECOLOGICAL FOOTPRINT To lower the environmental damage of business, firms and their supply chains need to examine their ‘ecological footprint’. Ecological footprint converts the products and services we use into global hectares & measures the pressure we exert on nature to satisfy our lifestyle demands. At the organisational level, the responsibility for sustainability cannot be given to a separate entity; it must be part of the whole team’s job, starting with the top management.

A tangible commitment to sustainability may be in the form of a written environmental policy. Organisations that have innovation capability and a managerial orientation towards sustainability will carry out two unique sets of activities. First, they will reconceptualise various stakeholders in their supply chain. Rather than viewing NGOs and the likes as adversaries, sustainable supply chains will leverage the skills & abilities of these non-traditional chain members. Secondly, they will try to ensure that this new chain is efficient and effective.

THINK GLOBAL, ACT LOCAL The focus today should be on first finding out ‘the right thing to do at the right time’ and subsequently, ‘doing the right thing at the right time’. Therefore, stakeholders should look towards converting the imperative greening sustainability mandate into an opportunity. A good dictum for them could be ‘think global, act local’ as this may help in addressing avoidable supply chain complexities.

Zubin Poonawalla, Promoter & MD,

Poonawalla Consultants


10 PILLARS OF SUPPLY CHAIN EXCELLENCE10 PILLARS OF SUPPLY CHAIN EXCELLENCE LSP SELECTIONLSP SELECTION

SELECTING a logistics service provider (LSP) is not an easy task. It often depends on a number of factors, which are, at the same time, conflicting in nature. Because of customised services being given by a number of LSPs, management of selection might make the process of rejection easier. Over the years, customer satisfaction, operational efficiency as well as degree of flexibility have been the prime considerations while opting for an LSP.

With the growing networks where almost all small to big logistics companies have their business

partnership or joint ventures to fulfil customer requirement, companies claim to have access to different parts of the world. But for a manufacturer or exporter, it is important to look for those things, which matter the most. Jeevan Guruprasad Rao Sahib, MD, Indelox Logistics, commented, “There are some prime factors depending on

the industry that decide the selection of a logistics service provider. For e.g., a chemical or pharma company looks for how carefully one handles goods as well as the depth of knowledge of its employees. Similarly, a general engineering or machine tools company looks for factors like continuous service, low cost, timely delivery, etc.”

SELECTING AN LSP Following are some of the few aspects, which must be taken into consideration while selecting an LSP:On-time shipment and deliveriesThis is the basic need. Since 80 per cent of goods to be delivered are time sensitive, companies choose LSPs who are more promising in this regard. However, due to poor infrastructure in India, the on-time shipment percentage is not very encouraging. Commenting on the impact of the current developments being made in enhancing the overall quality of roads, Sujoy Guha, CEO & Director, Sequel Logistics, said, “The Indian Government’s infrastructure plans are aimed at meeting the present needs, but what they do not understand is that the execution of the plans need to have a futuristic perspective as it will be executed later. After NHDP’s fast execution, the average speed of our vehicles has improved from 27km/hr to 32-33km/hr, but the speed limit is restricted only for outside the city. Once you enter the city, it takes much more time than what it should actually take.” Superior error ratesCompanies, especially in the medical equipment manufacturing and pharmaceuticals field, keep ‘Superior Error Rates (SER)’ as their prime concern since their goods are far more

SUPRITA ANUPAM

Gone are the days when selection of a logistics service provider (LSP) was dependent primarily on four factors – time, quality, cost and fl exibility. Now, it is customers’ ever evolving expectations and tough competition that have made the selection process a highly complex proposition. Here’s presenting a selection guide, which will help you choose the right LSP for your requirements…

Gearing Up Gearing Up To Meet To Meet Compelling DemandsCompelling Demands

Consistency is a big word in logistics. It is a diffi cult, but important factor, which helps us get our old customers. If today, Titan, Tanishq or Reliance, opt for our services, it is all because of our consistent performance.Sujoy Guha, CEO & Director, Sequel Logistics


time sensitive and costly. Mishandling in transportation does hamper the companies’ business. In order to mitigate the same, they prefer LSPs who show superior error rates.Financial stabilityFor big companies, such as, Exxon Mobil and Apple, turbine manufacturers or automakers, either the volume of goods is big or its size is an issue. In both the cases, plenty of money is at stake. Hence, such companies prefer LSPs, which are financially stable and have experience in managing project cargo.Active involvement of top management Decisions are time sensitive. They are taken as per the market conditions. Hence, the active involvement of top management plays a major role in facilitating the selection process. Creative managementBeing creative adds value to the service. It brings quality service, such as innovative packaging, ensuring safety & security of goods in transit and labelling, among others. Many companies look for such kind of services. Guha elaborated, “We offer different solutions for different companies to meet their exact requirements. Thanks to our creative management, we have widened the scope for innovations in this field.”Responsiveness to unforeseen occurrencesThis is something, which companies evaluate by carefully studying the past records of services given by that particular LSP. Despite all the efforts and hi-tech IT support, there lie horrific roads and humidity standards within the warehouse, which might result in some unforeseen occurrences. Manufacturers & exporters keenly observe the LSPs’ ability to overcome such errors. Joint ventures, partnerships and collaborationSome companies have to export/import from different parts of the world. Hence, they carefully analyse

the strategic alliances, partnerships and collaboration of the concerned LSP. They try to understand whether the LSP would actually fulfill their requirement at the ground level or not. “We are also extending our business partnerships to Australia, Japan and a few other companies,” said Jeevan, adding, “It will extensively enhance our service offerings.” Recruiting, developing and retaining peopleSince there is too much field job, retaining the right employee for the job is a big challenge. “As there is a dearth of high calibre people in this industry, factors such as recruiting such people or developing naive minds into

learned ones, development of multi-tiered educational programmes for enhancing their skills do play a key role in attracting companies towards such LSPs,” opined Guha. To this, Jeevan added, “We have a proper chain of recruitment and training under which we train our employees on a fixed interval of time. This greatly helps us achieve customer satisfaction”. Consistency Quality service delivery continuously over a period of time brings consistency. “Consistency is a big word in logistics. It is a difficult, but important factor,

which helps us get our old customers. If today, Titan, Tanishq or Reliance, opt for our services, it is all because of our consistent performance,” commented Guha.Research, development and outsourcingAlthough it does not have an instant impact on the service, it is considered essential for an LSP’s image makeover. On this note, Jeevan informed, “We are in touch with IIMB. They come up with fresh ideas, which uplift our quality of service, which is more effective than what a 4PL gives you.”IT supportThere are various software companies such as SAP, i2 technologies, Oracle and JDA, which provide ERP and MRP solutions to LSPs. But SAP has emerged as a clear winner with offerings like voice-operated tracking solutions. “The Indian logistics industry is yet to see SAP installations, but we are determined to install it in all the areas, which will enhance our overall IT solutions, thereby raising our customer satisfaction levels,” explained Guha.

A mere combination of all these aspects is sure to attract the selectors’ attention towards the right LSP. For LSPs, these are musts they should imbibe by heart & soul to grab a major share of the logistics pie and become the supplier of choice.

NEED TO MEET COMPELLING DEMANDSAs customers’ demands keep evolving, it becomes difficult to satisfy customers’ needs. But these evolving demands directly or indirectly set the guidelines for the future. Recent acquisitions, 2PL companies turning into 3PLs, 4PLs and 5PLs are happening in accordance with customers’ demands and expectations. Market demands inevitably compel 3PLs to revaluate and reconsider their futuristic plans, plans which can push their value proposition forward to meet the requirements of cost-conscious customers.

[email protected]

• Eco-friendliness• Length & breadth of experience

with outsourced LSP• Percentage of total logistics

budget used on LSP• Strength/type of relationship

between shipper and LSP• The ability to deliver customised

solutions• Warehousing management

system (WMS) deployment• Owned assets • Understanding of customers’

evolving needs • In-depth knowledge on handing

goods safely.

FACTORS AIDING IN LSP SELECTION PROCESS


RAIL BUDGET 2012-13 RAIL BUDGET 2012-13 NEWS ANALYSIS NEWS ANALYSIS

NOT being populist and, for some, very practical & fair, this year’s Rail Budget created a lot of buzz. Notably so, the passenger fare hikes created all the trouble for the then Railway Minister Dinesh Trivedi, who had to resign from the position owing to political pressure. The new Railway Minister Mukul Roy, just after swearing in, has rolled back all the passenger fare hikes. What would be the repercussions on the finance-constrained Railways, only time will tell. Coming back to the Budget and the announcements made with respect to logistics infrastructure, it was fairly a directional Budget.

The decision of the ministry to create a separate Railway Research Development Corporation is a positive

step, which has sent out a positive message of Indian Railways’ seriousness to speed up the implementation of pending projects. The body will also be responsible to put all developmental projects on the fast track.

RECOMMENDATIONSThe Ministry of Railways is very clear with all the budgetary recommendations this time, which are aimed at decongestion, system upgradation and development. The ministry, by reconstructing the highest body of Indian Railways and creating an additional post of Member – Marketing & Projects, has sent out a clear message stating it is serious about ensuring that its weak link of marketing

is strengthened. The operational set up will receive an impetus with technological upgradation of the 19,000 route km for the first time in recent years & these routes, which generate 80 per cent of freight revenue for Indian Railways, have been carefully chosen. The ministry has probably put its best foot forward in the direction of revamping its operational set up.

Frost & Sullivan believes that the measure announced in Budget 2012-13 of investment-linked deduction of capital expenditure incurred in the following businesses is proposed to be provided at the enhanced rate of 150 per cent, as against the current rate of 100 per cent for the cold chain facility and warehouses for the storage of food grains is likely to make investments into these segments an attractive option, thereby driving their development. Additionally, the allocation of `5,000 crore exclusively for creating warehousing facilities under the Rural Infrastructure Development Fund (RIDF) would provide a significant boost for the logistics industry’s growth in rural areas.

In addition, the announcement of efforts to create nearly 15 million tonne food grain storage capacity in the country under the Private Entrepreneur’s Guarantee Scheme is another major driver for the growth of agriculture commodity-related warehousing infrastructure. It is stated that the creation of two million tonne of storage capacity in the form of modern silos has already been approved, and further, a total eight million tonne of this targeted storage capacity is to be added by the end of 2012-13, which is likely to address the massive shortage of storage space for agri produce.

Providing investment-linked deduction on facilities built for warehousing and storage of sugar is likely to encourage warehouse developers to focus on this commodity storage apart from resulting in efficient distribution of this basic commodity, thereby attaining significant control

Aimed at Upping

Profits &Performance

Amid much hype, Rail Budget was announced on March 24, 2012. Going by the industry sentiments, the Rail Budget is, for the fi rst time, non-populist in nature & refl ects the intensely tight fi scal conditions faced by the government in general and declining profi ts of the Railway department. It is anticipated that this Budget would have proper implementation of the announcements, thereby providing an opportunity to strengthen the system.

PRERNA SHARMA

Illus

tratio

n B

y S

anja

y D

alvi

Illus

tratio

n B

y S

anja

y D

alvi


on its price inflation. Further, the encouraging incentives of exempting excise duty on air-conditioning and material handling equipment announced last year, have been sweetened with the extension of excise duty on the installation of mechanised handling systems and pallet racking systems in mandis or warehouses for horticultural produce. These measures would encourage existing warehouse operators to modernise their facilities while driving new entrants to build modern infrastructure warehouses.

INDUSTRY VOICEThe inclusion of container freight stations (CFS) and inland container depots (ICD) investment-linked tax deduction sectors are likely to drive large-scale development of these facilities and promote containerised transportation of goods considered to be efficient & safe. Currently, less than 10 per cent of India’s domestic cargo movement is in containerised form even though about 30 per cent of the country’s international cargo is in containerised form. The infrastructure finance support announced for ports is very meagre, says Frost & Sullivan analytics. The proposal to raise `5,000 crore through tax-free bonds for financing ports is a good initiative, but falls significantly below the desired needs of the port sector to fulfill the rapidly growing domestic and international cargo volume management.

According to Anil Khanna, MD, Blue Dart Express, with the highest outlay ever of `60,100 crore and greater emphasis on safety and modernisation, the Railway Budget looks good. Earmarking `4,410 crore towards capacity augmentation is another step in the right direction that will help address the current congestion. It is noteworthy to see the setting up of Indian Railway Station Development Corporation to maintain around 100 railway stations on par with airports. The proposal to set up a logistics corporation & logistics park should

address the current shortcomings. To have high-speed trains for freight is another encouraging step. It is heartening to note that for safety, there would be a plan outlay of `16,842 crore. What we hope to see is real-time implementation of the proposals announced.

On the public private partnership (PPP) front, the sector calls for the government to roll out clear tenders and policies. The Annual Plan for Railway for 2012-13 is at the highest ever at `60,100 crore and focus on modernisation, redevelopment of stations & introduction of new trains are few encouraging moves for the sector.

Vineet Agarwal, Joint MD, Transport Corporation of India, opines, “Railway Budget 2012-13 has been positive for both passengers & freight and offers a wide assortment of benefits to the commercial and the logistics firms as there have been no major changes in fares & freight rates. TCI welcomes the proposed step of Indian Railways to set up a separate railway safety authority to address safety issues. The allocation of a Budget of `16,842 crore for the railway safety fund will further help in strengthening various safety issues. In addition, the proposal to create an additional post of new board member has indicated its seriousness to deal with the issue. It will eventually improve Railways’ image and will encourage confidence in the end user.”

According to Srinath Manda, Programme Manager – Transportation & Logistics Practice, Frost & Sullivan, South Asia, Middle East and North Africa, the wide range of supporting measures announced in the Union Budget 2012-13 for the warehousing segment of Indian logistics industry could help in the reduction of losses of food grains and other agricultural produce. India loses an estimated `50,000 crore of agri produce every year due to lack of sufficient warehousing and storage facilities as per Food Processing Ministry reports.

STEP IN THE RIGHT DIRECTIONThe ministry aims to create a separate logistics corporation at freight terminals to provide a total logistics solution to rail users. This is a good initiative taken by Indian Railways and would be a good opportunity for multi-modal service providers to contribute and partner Indian Railways in providing a complete logistics solution to the industry, under one umbrella. To achieve the ambitious targets of Maritime Agenda 2020 announced in 2011, relating to ports, such as to attain a port capacity of around 3,200 Million Tonne (which is more than triple the capacity reached in 2011) and to promote coastal shipping, billions of dollars of investment is needed, for which the government is relying on private participation through PPP. Frost & Sullivan recommends, raising a significantly higher value of funds through tax-free bonds than that announced now. However, the measure enabling ports and shipyards to procure low-cost funds by reducing the rate of withholding tax on interest payments on external commercial borrowings from 20 per cent to five per cent is likely to significantly enhance the scale of funds sourced by entities participating in these segments, thereby leading to rapid development of maritime infrastructure.

[email protected]

Freight traffi c movement is expected to grow by 5.6% to 1,025 MT over 970 MT in FY12P (revised estimates). Growth in rail freight is expected to be driven by:• Strong growth in domestic coal

production – comprising of about 50% of annual traffi c (CIL’s production expected to grow by 6.4%)

• Healthy growth across product categories.

Source: Emkay Research

Rail Budget 2012-13, continued


RAIL FREIGHT RAIL FREIGHT NEWS ANALYSIS NEWS ANALYSIS

BULK of the freight target will be met though coal traffic, one of the main businesses of the Railways during the present fiscal. Railways had moved 420.37 million tonne of coal during 2010-11 as compared to 369.15 million tonne during 2009-10. Given the infrastructure constraints on rolling stocks and route capacity, Railways will have to take proactive measures to move larger volumes of coal on the backdrop of rising demand from the user industries.

BULK FREIGHT TARGETS Railways has to meet bulk of the coal demand from the steel and power sector. Public sector steel producing behemoth, Steel Authority of India (SAIL), has charted out a mega expansion plan for its units involving `60,000 crore by 2012. The expansion plan would boost the steel production capacity for the public sector undertaking (PSU) from the present 14 million tonne per annum to 26.2 million tonne of hot metal. The demand will require to be supported through better rail linkages from the landing port of coking coal and the mines to the user plant of the steel producing major. Railways will have to support coking coal requirements

for Tata’s Indian Iron and Steel Company (IISCO). IISCO, one of the oldest steel plants in the country, has taken up a greenfield project for producing crude steel at a capacity of 2.5 million tonne. The project involves an investment of `12,750 crore and is likely to be implemented during 2012.

MEETING GROWING DEMANDS In order to meet the growing coal demand, which is likely to remain firm even with the economic slowdown, Railways will have to create adequate route capacity in the first place between coal loading mines and the user industries. As the present situation goes, there is acute route saturation in various important coal loading zones of the Indian Railways. The line occupancy ratio is more than 120 per cent on Eastern, South Eastern and East Coast railway routes. Route saturation is high between coal loading points and major eastern ports of Haldia and Paradip. The situation has received alarming proportions with the introduction of more number of passenger trains on the route. High line occupancy remains between Railway’s arterial and main routes connecting the coal user industries.

Coal India’s (CIL) vital customer

base, comprising power and steel producing utilities in Eastern, Western and Northern India are served through the saturated Golden Quadrilateral link supported by Railway’s arterial routes. The arterial links originate from CIL’s loading points.

Railways has begun to decongest its main arterial routes through making advancements in signalling and telecommunication, increasing speed of freight trains, enhancing axle loads and doubling lines, etc. However, the measures would require sustained and quicker execution on the backdrop of large expansion planned by coal consumers in the coming years. This is notwithstanding the fact, that the measures will be temporary during the medium and long term. The upcoming dedicated freight corridor of Railways is likely to take care of the issue.

INITIATIVES TAKEN One of the most important and immediate initiatives taken by Railways to ensure faster evacuation and movement of coal traffic has been providing connectivity to ports. A recent connectivity initiative signed by Railways and the port authorities is the upcoming greenfield Dighi Port. Konkan Railway Corporation (KRCL)

Moving Higher Coal TrafficAMID CONSTRAINTS

Indian Railways has set a freight target of 1,025 million tonne for 2012-13. While earlier, it had set a target of 994 million tonne during 2010-11, it ended up achieving 921.73 million tonne. However, this year, Railways has been focussing on port connectivity to facilitate freight movement. But with issues such as wagon shortage and coal

pile-ups marring Indian Railways’ prospects, it remains to be seen how Railways will actually be able to meet the target set for 2012-13.


and Balaji Infra Projects (BIPL) have recently signed a memorandum of understanding (MoU) for developing a 45-km rail-link connecting Dighi Port near Chiplun in Maharashtra to the main Konkan rail route. The link will be moving coal traffic. The total project would entail an investment of about `500 crore and the development shall span approximately over two years. A total railway link and siding to the port would give Dighi Port access to the central hinterland of Maharashtra as also the northern and southern hinterland of the state. This MoU is the first of its kind to be executed between KRCL and a port in Maharashtra.

On the East coast, a rail link is being established with the greenfield port of Dhamra at Orissa. The 80-km Dhamra Port rail network – completed with loops – will connect the port with the Indian Railways’ network at Bhadrak (on the Howrah-Chennai mainline). In the last lap, about 1.5 km of railway land will be needed to connect the port’s rail line with Indian Railways’ network at Bhadrak. The port railway network passes through 74 villages covering nearly 2,000 acre. The railway link is being developed by the East Coast Railway.

Railways is also planning to link Karaikal Port in South India. Karaikal Port, developed by Marg, a Chennai-based infrastructure company, has got a rail link to Nagore. The Karaikal-Nagore Port rail link has been developed by Southern Railway. The new link will enable cargo delivery to various destinations and will connect Karaikal Port with cement, steel, chemical, aluminium and textile units, as well as other major manufacturing industries in Ariyalur, Tiruchi and Salem districts and upcoming industrial centres around Mayiladuthurai, thereby enabling heavy freight movement in the near future. Some of the clients that will use the new link will include JSW and Malco. The first railway cargo belonging to Madras Cements was

flagged off recently to the company’s plant in Ichengadu in Ariyalur from Karaikal.

WAGON SHORTAGE LEADS TO PILE-UP At par with creating route capacity, Railways will have to address the serious issue of ongoing shortages in loading rakes. While Railways claims that there are adequate rakes available, according to coal consumers, there is a persisting shortage of BOX ‘N’ wagons for hauling coal. Wagon shortfall leads to stockpiling mine heads. It also slows down coal loading. According to a major coal consumer, “On many occasions, owing to shortage of BOX ‘N’ wagons, Railways continues to provide covered BCN/A and BCX (mainly for food grains and cement)

wagons to CIL. This slows down loading and unloading, as in the case of the latter, loading and unloading functions have to be done manually.”

Shortage of BOX ‘N’ wagons has continued to create pressure on wagon loading. According CIL sources, it had made the highest-ever wagon loading at a level of 22,900 four-wheeled wagons (FWWs) per day during 2008-09. This surpassed the previous highest of 22,417 FWW during the previous year. Wagon demand has been firm owing to higher volumes of coal requirement from power and steel producers and loading has been high even during economic recession. As per CIL sources, wagon loading targets by all of its subsidiaries had been at 97.50 per cent in 2003-04, while for certain subsidiaries of CIL, wagon loading has been more than 100 per cent. A similar high loading trend has been prevalent

during recent years as well. One of the major dearths in rakes

availability for coal has been witnessed in Paradip Port through East Coast Railway. While the situation has been recently showing signs of improvement with enhanced availability of railway rakes for movement of coking coal, the scenario is yet to attain full comfort levels to entirely decongest the port from imported coking coal piling up at the port. The improvement in rake availability took place following an appeal by the port to the Ministry of Railways.

Capacity constraint led by piling up of imported coking coal has been a serious issue at Paradip Port. This has been leading to pre-berthing vessels detention at the port. Pre-berthing detention has led coking coal and soft coke importers, divert vessels to other port for coal loading. This has led to the cost of transportation of coal escalate for the importers mainly the primary steel producers located in the Eastern region, notably SAIL.

IMPENDING ISSUES There are multiple reasons for the supply of limited rakes. Paradip Port Trust (PPT) needs at least 10 rakes a day for immediate evacuation of imported cargo, mostly coal. However, only five rakes on an average a day are available from South Eastern and East Coast Railways. These five rakes arrive at the port carrying iron ore for exports and are used for back-loading. The drop in iron ore loading at the mines in Nayagarh & Keonjhar areas in Orissa due to various reasons has brought down the arrival of iron rakes at the port. Of the five rakes, which now arrive at the port, about 4.5 are sent by South Eastern Railway and 0.5 rakes by East Coast Railway. Inquiries reveal that the Railways might find it difficult to meet the requirement of PPT immediately owing to shortage of rakes. As of now PPT has more than 200 indents, i.e., demand for more than 200 rakes.

In order to meet the growing coal demand, which is likely to remain

fi rm even with the economic slowdown, Railways will have to create adequate route capacity in the fi rst place between coal

loading mines and the user industries.

Rail freight, continued


TRADE SHOW TRACKER TRADE SHOW TRACKER EVENT LIST EVENT LIST

ABROADNATIONAL26-28 APRIL 2012 INDIA WAREHOUSING SHOW 2012Focus: Warehousing, Logistics, Supply Chain, Cold StorageWhere: India Expo Centre, Greater Noida, Delhi, NCR, India Tel: +91-9971600355 E-mail: [email protected]

26-28 APRIL 2012 INDIA MATERIAL HANDLING & LOGISTICS SHOW 2012Focus: Material Handling SolutionsWhere: India Expo Centre,Greater Noida Mob: 9999164925E-mail: [email protected]: www.indiawarehousingshow.com

26-27 APRIL 2012 7TH SOUTHERN ASIA PORTS, LOGISTICS & SHIPPING 2012Focus: Container Ports And Terminal Operations Where: Cinnamon Grand Colombo,Sri LankaTel: +60 87 426 022Fax: +60 87 426 223E-mail: [email protected]

ABROAD

6-9 MAY 2012 WERC ATLANTA 2012Focus: LogisticsWhere: Atlanta Marriott Marquis, Atlanta, GeorgiaTel: 281.746.0449E-mail: [email protected]

18 MAY 2012 5TH GLOBAL LOGISTICS & SCM SUMMITFocus: SCMWhere: UAE Tel: +971 4 3318855 Mob: +971 50 7453002E-mail: [email protected]

23-24 MAY 2012 LOGICHEMFocus: Petrochem Logistics Where: Grosvenor House Hotel, DubaiTel: +44 (0)20 7368 9354E-mail: [email protected]

ABROAD

1-2 JUNE 2012 CSCMP INDIA 2012 CONFERENCEFocus: Creative Approaches toSupply Chain Profitability: A Global Perspective from IndiaWhere: MumbaiMob: +91 - 9819669521 E-mail: [email protected]

3-5 JUNE 2012 THE LOGISTICS & SUPPLY CHAIN FORUMFocus: Logistics & SCMWhere: Doral Resort & Spa, Miami, FLTel: +1 212 651 8700E-mail: [email protected]

26-28 JUNE 2012 LOGICHEM ASIAFocus: Chemical Logistics & SCMWhere: SingaporeTel: + 65 6408 9205Fax: + 65 6822 7370E-mail: [email protected]

NATIONAL


ABROAD

26-28 SEPTEMBER 2012 INTERMODAL INDIA 2012Focus: Logistics & SCMWhere: Bombay Exhibition Center, MumbaiTel: +91-22-66122612Mob: +91-9987038330E-mail: [email protected]

17-19 SEPTEMBER 2012 WORLD LOW COST AIRLINES CONGRESS 2012Focus: Air TransportationWhere: Sofitel London Heathrow, London, UK Tel: +44 (0)20 7092 1000Fax: +44 (0)20 7242 1508E-mail: [email protected]

18-21 OCTOBER 2012 SCM LOGISTICS WORLD 2012Focus: Logistics & SCMWhere: SingaporeTel: +65 6322 2771Fax: +65 6223 3554E-mail: [email protected]

NATIONAL

ABROAD

21-24 NOVEMBER CeMAT INDIA 2012 Focus: Trends And Technologies In Material Handling, Storage And LogisticsWhere: India Expo Centre, Greater Noida, Delhi, NCR, India Tel: +91 22 40050681/82Fax: +91 22 40050683E-mail: [email protected]

20-21 NOVEMBERLOGIPHARMA ASIAFocus: Pharma Supply ChainVenue: SingaporeTel: + 65 6408 9205Fax: + 65 6822 7370E-mail: [email protected]

20- 21 NOVEMBER 20128TH TRANS MIDDLE EAST 2012Focus: Transportation and LogisticsVenue: Gulf International Convention and Exhibition Centre, Bahrain, UAETel: +973-17-713000Fax: +973-17-712088

NATIONAL

ABROAD

7-9 DECEMBER 2012INDIA WAREHOUSING AND LOGISTICS SHOWFocus: Logistics & TransportationVenue: Auto Cluster Exhibition Centre, Pune, IndiaTel: +91-120-4273921/43341111/4273921Fax: +(91)-(11)-46520734

7-10 DECEMBER 2012INDIA LOGISTICS SHOWFocus: Railway, Shipping & Aviation Products, Spares & EquipmentVenue: India Expo Centre and Mart, Greater Noida, IndiaTel: +(91)-(22)-27812619/27812093/27812657Link: http://www.print-packaging.com/

5-8 DEC 2012INDUSTRIAL AUTOMATION & LOGISTICS INDONESIAFocus: Automation & Logistics Venue: Jakarta, IndonesiaTel: 60-3-8023 5352 Fax: 60-3-8023 3963

NATIONAL

AHMEDABAD October 5-8, 2012

PUNE November 2-5, 2012

CHENNAI November 22-25, 2012

LUDHIANA December 21-24, 2012

Tel: 022-30034651 • E-mail: [email protected] • Web: www.engg-expo.com

INDORE January 11-14, 2013

AURANGABAD February 1-4, 2013

RUDRAPUR February 23-26, 2013


26-28 April 2012, India Expo Centre, Greater Noida, Delhi NCR

LOGISTICS is one of the fastest growing industries in the country. It recorded revenues of about $82.10 billion by 2010 – a growth of about 9.2 per cent over the previous year. The rapid evolution of this industry in India – both in terms of scale and scope of services – has created the need for a new set of specialised and skilled services. Aimed at offering end-to-end warehousing, materials handling and logistics solutions is the India Warehousing Show (IWS) 2012. Organised by Manch Communications, IWS 2012 aims to bring in all the best brains of the logistics industry under one roof and educate all the stakeholders on the best practices

“The trade show showcases end-to-end solutions from warehouse building, material handling, supply chain and logistics under one roof,” said Anuj Mathur, Director – Exhibitions, Manch Communications, adding that IWS brings together industry professionals, who are solution providers, end users, consultants and new entrants under one roof and offers them a single platform to interact.

Scheduled to be held during April, 26-28, 2012, in Delhi NCR, IWS aims to offer international markets and trade visitors an optimum business platform. The trade show will have over 200 exhibitors spanning over an area of 11,000 sqm. Several live demos and product launches are on the cards. The trade show will be complemented with the 3rd India Warehousing Conference and India Cold Storage Conference, featuring comprehensive cutting-edge

sessions, focussing on logistics and cold chain industry.

PRESENCE OF TOP PLAYERS Given the scope and opportunity that IWS offers, top players from the logistics industry will mark their presence at the exhibition. “We have participated in previous editions of the trade show and it truly paid off. We are thrilled to be back this time as well,” stated Vineet Kanaujia, VP – Marketing, Safexpress. Trade associations associated with the logistics industry have also extended strong support to the exhibition. According to Amit Kamat, Secretary, The Federation of Freight Forwarders Association in India, “The market for logistics has witnessed growth over a decade and this trend is expected to continue. Forums like IWS will act as a catalyst, which will facilitate growth.” Other domestic associations such as Indian Private Ports and Terminals Association and AIDC Technologies Association of India have also extended their support to this event.

USPs OF IWS 2012So what is it that differentiates IWS 2012 from its earlier editions? Elaborating on the same, Mathur commented, “This edition of IWS comes as a ‘Complete Package’ and will be offering end-to-end solutions for warehousing, materials handling, logistics and cold chain industry. Compared to its previous editions, we not only have bigger exhibits, but also two concurrent conferences for warehousing & logistics and cold

chain sectors. Special programmes, such as VIP Access Pass (VAP) and User Contact Programme (UCP), have been incorporated to maximise quality attendees.” He added, “The exhibition is divided into four exhibit zones – warehousing zone, material handling zone, supply chain zone and cold chain zone. It is the only platform, which showcases everything required to build a modern warehouse, from flooring solutions, fork lift trucks, storage solutions, WMS systems, AIDC & automation solutions, complete material handling solutions to movement and transportation of goods. You will also find solution providers for all your logistics and warehousing needs.”

GAIN A HOLISTIC EXPERIENCE IWS 2012 will offer end-to-end solutions for all industry segments. And this year, the supply chain zone has been added, wherein leading supply chain companies and warehouses will display their services. “In addition, the trade show will also feature India Warehousing Show 2012 on ‘Developing Effective Strategies to Meet the Emerging Supply Chain Demand’, where industry leaders having national & international experience will share their knowledge and discuss opportunities, challenges and cost-effective solutions,” Mathur said.

A ‘complete package’ in the offing, IWS 2012 is all set to provide a one-stop shop for all your warehousing & logistics needs.

[email protected]

ARINDAM GHOSH

Offering a complete logistics package After two successful editions in Greater Noida and Ahmedabad, India’s largest exhibition on warehousing, logistics and material handling is back in the form of India Warehousing Show (IWS) 2012. The third edition of IWS, with Smart Logistics as its media partner, is scheduled to be held from April 26 to 28, 2012. With the objective of offering end-to-end solutions for the various industry segments; including warehousing, materials handling, logistics and cold chain industry; IWS 2012 promises to be a comprehensive package, which will cater to all your logistics & warehousing needs. A preview…

CURTAIN RAISER CURTAIN RAISER


PRODUCT UPDATE PRODUCT UPDATE

This section gives information about products, equipment and services available in the market. If you know what you want. . .refer to Product Index on Page 64 to find it quickly

ASPHALT PAVER

The model AP500E

provides technology

and capability of a large

asphalt paver in a smaller more

mobile size. It excels in a wide

range of applications, from

routine commercial jobs to

highway operations. Th e

ACERT technology manages combustion using a combination

of air management, precise fuel delivery and careful timing in

order to lower emissions and meet US EPA tier-3 engine

emissions requirements. Deck-mounted cooling system provides

a cool environment by exhausting hot air toward the hopper,

away from operators and ground personnel. Th e dual operating

stations off er the best-in-class comfort, visibility and ease-of-

use.

Caterpillar Commercial Pvt Ltd

Bengaluru - Karnataka

Tel: 080-51117910, Mob: 9880173725


Website: www.cat.com

�

SLOTTED RACKS

The robustly constructed

array of slotted racks is

designed to be in

compliance with the latest

technology. Th ese racks are

widely appreciated for their

high-performance and

functionality. Th e slotted racks

off ered have clean and tidy

compartments for appropriate

organisation of the materials. Th ese products have compact

designs, perfect fi nish and robust construction. Th e range of

products off ers resistance against tarnishing and is comprised of

a large number of shelves to provide good storage capacity.

Adwel Racking Systems

New Delhi

Tel: 011-32980112, Mob: 09818200112


Website: www.adwelsystems.com

�

HOLLOW PIN CHAIN

The design of these hollow pin chain allows many types

of cross rods, pins and custom attachments to be

inserted at any point without removing the chain from

�

the drive systems.

As normally the

chain is used in

parallel on

conveyors and

requires to be

matched, it is

supplied in packages of two matched 10-foot length. Th e hollow

pin chain operates on standard sprockets for roller chains with

standard stock range.

J B Transmission Products

Mumbai - Maharashtra

Tel: 022-30699410, Mob: 09167006197


DIE LOADER

The die loader is used for solving lifting problems. Where

heavy loads, awkward working positions and height

variations produce a problem, scissors lifting tables can

provide the solution. Technical

specifi cations include: capacity

up to 750 kg, height up to 1.2

mtr (4 ft), platform size up to

5 ft x 2 ft, hand pump mobile

type, etc. Th e die loader is

widely used in various

industries, like plywood,

laminated sheets, ceramics,

paper laminations, plastic

moulding, packaging,

automobiles, rubber moulding, textile and pharmaceutical.

Th ese are also used in rack storage systems and container

loading.

Hydro Mech Engineers

Ahmedabad - Gujarat

Tel: 079-25890771, Mob: 09825019905


Website: www.hydromech.in

�

MEZZANINE FLOORING SYSTEMS

Flexibility in design permits

quick dismantling and re-

erecting in new locations

or indeed extension of existing

structures. A full range of

accessories is provided so that the

fl ooring systems can be adapted

to suit users’ specifi c needs. Also

�


SUBSCRIPTION

OFFEROFFERBusiness Categories (Please tick one or more)� FMCG � Retail � Pharma � Automobile � Machinery � Logistics� Textile � Agro � Product � Bank � Technology � Electronics � Engineering� Chemical � Construction � Others (Please specify) __________________________________________

Business Department Functional (Please specify at least one)� Production � Logistics � Marketing � IT � Finance� Sales � Administration � Tools & Equipments � Purchase & Material Handling

Others (Please specify)______________________________________________________________________

Number of employees in your firm/company ______________________Number of offices across India ____________

If Student (Please specify at least one) � Graduate � PG

SUBSCRIPTION DEPARTMENT:INFOMEDIA 18 LTD.: ‘A’ Wing, 2nd Floor, Ruby House, J.K. Sawant Marg, Dadar (W), Mumbai 400028.Call: 022-3003 4631/33; Fax: 022-3003 4499; Email: [email protected]

For exclusive offers log on tohttp://eshop.infomedia18.in

Magazine Subscription Made Simple

Vol. 02 | Issue 06 | SEPTEMBER 2011 ` 100/-

off ered is a wide span mezzanine fl oors for 100 per cent doubling

of fl oor space. Th ese fl ooring systems are quick, easy and cost-

eff ective.

Pilco Storage Systems Pvt Ltd

New Delhi

Tel: 011-27110024, Mob: 09810074596


Website: www.pilcoonline.com

HYDRAULIC HANDLIFT PALLET TRUCK

The hydraulic handlift

pallet truck meets the

growing demands for

low priced hydraulic truck that

off ers high quality, reliability

and ease of handling. Th e

advantages of the pallet truck

become apparent as soon as it is

put into service, time saved in

handling, greater use of fl oor

space, reduced handling costs.

Speed and effi ciency with which

the truck enables the operator

to lift and transport loads,

�

facilitates production, storage and delivery operations. Th e

hydraulic pallet truck is available in standard capacity of 1 ton

to 3.2 ton and in other tailor-made capacities and sizes.

Agromec

Meerut - Uttar Pradesh

Tel: 0121-2440660, Mob: 09313159058


Website: www.agromecindia.net

HYDRAULIC TELESCOPIC PLATFORM

The design of each

hydraulic telescopic

platform is determined

by the performance parameters

and application environment

furnished by customers. Quality

and safety standards are then

built around it. Th e hydraulic

telescopic platform is designed

and manufactured for indoor,

off shore and outdoor applications,

for small, medium and large

industrial establishments, aircraft

manufacturers, airports and

�


Product update, continued

Enclosed Cheque/DD No. ______________ of `799/- for 1 year (12 Issues) `1999/- for 3 years (36 Issues) favoring Infomedia18 Ltd payabel of Mumbai.

Dated: ____ / ____ / _______ Bank: _________________________________ Branch:__________________ City:____________

Credit card: Master Card Visa Card American Express Card

Credit Card No.: Card Expiry Date: MM YY

Card Member’s Name:_________________________________________________ Card Member’s Sign: _____________________

Name:____________________________________________________________ E-mail:_______________________________

(Kindly provide your email id to serve you better and keep you informed on delivery status)

Company: __________________________________________________________ Designation: _________________________

Address: ______________________________________________________________________________________________

City: _____________________ Pin Code: _______________________ State: ________________________________________

(STD Code is complusory) Tel.: Off.: ______________________ Tel. Res.: ____________________ Mobile: ____________________

Terms & Conditions: Your subscription will start from the next available issue. No cancellation will be entertained after commencement of the subscription. Infomedia18 reserves the right to extend, cancel or discontinue the offer though Infomedia 18 will take utmost care to dispatch the copies safely, Infomedia 18 does not take the responsibility of any postal delays and damaged copies dispatched. For more information contact Infomedia 18 subscription department.

Disclimer: “The Company is proposing, subject to market conditions and other considerations, an offer of its equity shares on rights basis and has filed a Draft Letter of Offer with the Securities and Exchange Board of India (“SEBI”). The Draft Letter of Offer is available on the website of SEBI at www.sebi.gov.in and the website of the Lead Manager at www.icicisecurities.com.Investors should note that investment in equity shares involves a high degree of risk and are requested to refer to the section titled “Risk Factors” of the Draft Letter of Offer for details of the same.”

http://eshop.infomedia18.in

The information published in this section is as per the details furnished by the respective manufacturer/distributor. In any case, it does not represent the views of

off shore drilling rigs, in use from North Sea to Indian Ocean

and on land throughout India.

Vanjax Sales Pvt Ltd

Chennai - Tamil Nadu

Tel: 044-42821000, Mob: 09789976611


Website: www.vanjax.in

CAGE PALLET

The supreme quality cage

pallet is completely designed

with extreme quality raw

material and are procured from

renowned industries. Th is cage pallet

comes in diff erent specifi cations

with respect to its application. Base

is made of MS tubular structure

with sides of wire mesh provided at the bottom for forklift or pallet

truck entry. It is a self-cleaning see-through pallet and can be

stacked one upon the other. Wire mesh container is stackable and

totally collapsible. Th e wire mesh pallet is used in automobile

industries as well as warehouses of large factories. It has up to 1000

kg weight bearing capacity with even load distribution.

�

Ahlada Industries Pvt Ltd

Hyderabad - Andhra Pradesh

Tel: 040-23094301, Mob: 09866661011


Website: www.ahlada.com

CARGO SERVICES

The cargo services include door-to-door delivery services.

Th ese services are provided in accordance to the industry

recommended standards. Owing to the extensive knowledge

of addresses and location of the delivery personnel, customers’ parcels

are delivered safely and securely. Some of the features of the door-to-

door delivery services include: expedite deliveries, customised

services, can cover any distance within the stipulated time-frame, etc.

Swastik Cargo Packers

Meerut - Uttar Pradesh

Tel: 0121-09312024, Mob: 09312024520


�

PRODUCT & ADVERTISERS’ INDEXPRODUCT & ADVERTISERS’ INDEX


COC = Cover-on-Cover, FIC = Front Inside Cover, BIC = Back Inside Cover, BC = Back Cover

Our consistent advertisers

To know more about the products & advertisements featured in this magazine, write to us at [email protected] or call us on 022-3003 4640, and we will send your inquiries to the companies directly to help you source better.

Asphalt paver .............................................................................60

C and Z purlin ...........................................................................38

Cage pallet .................................................................................62

Cargo services ............................................................................63

Cargo tracking.........................................................................FIC

Cold form C and Z purlin ...................................................... BC

Die loaders .................................................................................60

Exhibition - India Warehousing Show-2012 ..............................6

Exhibition - Intermodal India ...................................................52

False ceiling system ....................................................................38

Financial institute ....................................................................BIC

Forklift spares ...............................................................................4

Growth capital and equity assistance for MSMEs .................BIC

Heavy industrial steel building................................................. BC

Hollow pin chains ......................................................................60

Hydraulic handlift pallet trucks .................................................61

Hydraulic telescopic platform ....................................................61

Mezzanine flooring system ........................................................60

Multi-level car park.................................................................. BC

Polycarbonate sheet .................................................................. BC

Pre-engineered building .............................................................38

Pre-engineered steel building ................................................... BC

Prefab shelter ............................................................................ BC

Residential steel house ............................................................. BC

Roof vents ................................................................................ BC

Roofing and cladding sheet ..................................................... BC

Roofing and cladding system .....................................................38

Sea freight ...............................................................................FIC

Slotted racks ...............................................................................60

Storage Solutions .......................................................................63

Structural floor decking sheet .................................................. BC

Truck .................................................................................... 34-35

Trucking ..................................................................................FIC

USS univent ............................................................................. BC

Products Pg No Products Pg No

Pg No Advertiser Tel. No. E-Mail Website

34-35 Mahindra & Mahindra sms 5757577 www.mahindragenio.com

6 Manch Communications Pvt Ltd +91-9971600355 [email protected] www.indiawarehousingshow.com

FIC NTL Logistics Plus India Pvt Ltd +91-011-46656500 [email protected] www.logisticsplus.net/india

63 Schaefer Systems International Pvt Ltd +91-022-61114700 [email protected] www.ssi-schaefer.in

BIC Small Industries Devt Bank Of India www.sidbi.com/growth.asp

38 Spectec Innovative Buildings +91 -011-24372029 [email protected] www.spectec.in

52 UBM India Private Limited +91-022-40461447 [email protected] www.intermodalindia.com

BC United Steel & Structurals Pvt. Ltd +91-44-42321801 [email protected] www.unitedstructurals.com

4 Watrana Traction Pvt Ltd +91-11-27456600 [email protected] www.forkliftspares.com

First Fold Here

Second Fold Here

Third Fold HereGLUE

First Fold HereFirst Fold Here

Second Fold Here

Use this form for free additional Information on advertisements published in this issue. We will send your inquiries to the advertisers and ask them to send you the details or contact you directly.

HOW TO USE THIS FORM: • Please tick against the box of advertiser(s) you are interested in: • Mention specific product/service you

need, against the advertiser’s name • Complete all the details on this form. • Tear the form & mail it to us. (It is a prepaid mail)Tel.: +91-22-3003 4640 • Fax: +91-22-3003 4499


��

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

PRODUCT INQUIRY FORM

�

�

�

�

�

�

�

�

�

ADVERTISERS’ INQUIRY FORM

Mahindra & Mahindra

Munch Communications Pvt Ltd

NTL Logistics Plus India Pvt Ltd

Schaefer Systems International Pvt Ltd

Small Industries Devt Bank Of India

Spectec Innovative Buildings

UBM India Private Limited

United Steel & Structurals Pvt. Ltd

Watrana Traction Pvt Ltd

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Asphalt paver ........................................................60

C and Z purlin .......................................................38

Cage pallet ...........................................................62

Cargo services ......................................................63

Cargo tracking .....................................................FIC

Cold form C and Z purlin ...................................... BC

Die loaders ...........................................................60

Exhibition - India Warehousing Show-2012 .............6

Exhibition - Intermodal India .................................52

False ceiling system ..............................................38

Financial institute ............................................... BIC

Forklift spares .........................................................4

Growth capital and equity assistance for MSMEs BIC

Heavy industrial steel building ............................. BC

Hollow pin chains..................................................60

Hydraulic handlift pallet trucks .............................61

Hydraulic telescopic platform ................................61

Mezzanine flooring system ....................................60

Multi-level car park .............................................. BC

Polycarbonate sheet ............................................ BC

Pre-engineered building ........................................38

Pre-engineered steel building .............................. BC

Prefab shelter ...................................................... BC

Residential steel house ........................................ BC

Roof vents............................................................ BC

Roofing and cladding sheet.................................. BC

Roofing and cladding system ................................38

Sea freight ........................................................... FIC

Slotted racks ........................................................60

Storage Solutions .................................................63

Structural floor decking sheet .............................. BC

Truck............................................................... 34-35

Trucking ...............................................................FIC

USS univent ......................................................... BC

Please complete the following & get a quick effective response from suppliers: 1. Your company’s business function is (�one only)

� Wholesalers � Manufacturer � Distributor � Agent � Other, please specify ______________

2. Your role in your company’s buying process can best be described as:

� I buy � I identify potential suppliers � I approve purchases� I negotiate contracts � I select suppliers.

3. Your line of business

4. Specific product requirement

Name:

Designation:

Company Name:

Address:

City: Pin:

Tel: Fax:

Email:

04 /

201

2

Business Reply InlandBR Permit No. 555

Bhavani Shankar Post Office,Mumbai 400 028.

POSTAGEWILL BEPAID BY

ADDRESSEE

NO POSTAGESTAMP

NECESSARYIF POSTEDIN INDIA

‘A’ Wing, Ruby House, J. K. Sawant Marg, Dadar (W)Mumbai 400 028,INDIA.

SPECIAL PROJECTS - SMART LOGISTICSINFOMEDIA 18 LIMITED

68

RNI NO. MAHENG / 2010 / 34343 Postal Registration No. G / NMD / 124 / 2011 - 13Posted at P.C Stg. Offi ce, GPO, Mumbai 400 001. Date of Mailing: 5th & 6th of Every month issue. Date of Publication: 2nd of every month

smart logistics - april 2012

Documents