CELERITY SUPPLY CHAIN TRIBE JULY-AUGUST 2022 by Celerity Supply Chain Tribe

SUPPLYCHAINTRIBE.COM July - August 2022 Volume 6 Issue 4 For private circulation only

INSIDE Industry veterans and analysts’ viewpoints on the progress of the ambitious PM Gati Shakti National Master Plan CSCOs share their perspectives on devising supply chain strategies for their respective organizations to stay resilient in tune with current global trends

ELECTRIC VEHICLES – SUPERCHARGING TRANSPORTATION INFRA Tracking the development of the fastchanging EV landscape for last mile delivery with insights from the MAKERS and the USERS…

CONTENTS

July - August 2022 Volume 6 Issue 4

COVER STORY 22 | ELECTRIC VEHICLES – SUPERCHARGING TRANSPORTATION INFRA What seemed like a distant dream until recently has become the reality of new age transportation. With the government’s stronger and concerted thrust on going green & clean, the emphasis on the deployment of electric vehicles in transportation has witnessed a renaissance of sorts. Right from the Central Government to respective state governments, everyone is rolling out the red carpet for EV manufacturers and are subsidizing user companies who are fast embracing the change. Our Cover Story this time tracks the development of the evolving EV landscape and offers you insights from both sides of the spectrum – the MAKERS & the USERS…

INTERVIEWS 06 | AI

– Reshaping the Supply Chains of Tomorrow

“We need a unified strategy and a cohesive approach to provide state-of-the-art experiences. The first step to achieve this is by ensuring that SCM has a seat at the table in all enterprise-wide strategic decisions,” stresses Mr. Aswini Thota, Analytics and AI leader, Bose Corporation. 35 | Floating

Safer Future

Solar – Powering A

“We aim to create a co-existing ecosystem that does not disturb our flora and fauna and at the same time addresses the country’s energy needs,” shares Mr. Srinath S, Head – Procurement & Supply Chain, Ciel & Terre India. 10 | OPINION

The GVC Narratives and Trade Winds Global Value Chains (GVC) have become a dominant feature of world trade, encompassing developing, emerging, as well as developed economies. Abhijit Das, Founder of Narrativ.Design™, decodes current value chain resets affecting global trade.

12 | FOCUS

Shifting Paradigms of Global Supply Chains The mantra for supply chains is to transform itself with agility, flexibility & resilience, which would differentiate itself in the marketplace tomorrow, write Prof. V G Venkatesh, Associate Professor, EM Normandie Business School, France and Rohit Menon, GlaxoSmithKline, Switzerland. 16 | SPECIAL REPORT

Mission Gati Shakti – On the MOVE We spoke to industry veterans and analysts on the prospects and possibilities that PM Gati Shakti National Master Plan holds and what’s in store for the supply chain fraternity. Capturing the insights & strategies that companies are adopting to play an enabling role in this ambitious project… 38 | PERSPECTIVE

Supply Chain Resilience – Are WE READY? A perspective story on how CSCOs are devising supply chain strategies for their respective organizations to tide the tumultuous times. Editor: Prerna Lodaya

DISCLAIMER: This magazine is being published on the condition and understanding that the information, comments and views it contains are merely for guidance and reference and must not be taken as having the authority of, or being binding in any way on, the author, editors, publishers who do not take any responsibility whatsoever for any loss, damage or distress to any person on account of any action taken or not taken on the basis of this publication. Despite all the care taken, errors or omissions may have crept inadvertently into this publication. The publisher shall be obliged if any such error or omission is brought to her notice for possible correction in the next edition. The views expressed here are solely those of the author in his private/professional capacity and do not in any way represent the views of the publisher. All trademarks, products, pictures, copyrights, registered marks, patents, logos, holograms and names belong to the respective owners. The publication will entertain no claims on the above. No part of this publication can be reproduced or transmitted in any form or by any means, without prior permission of the publisher. All disputes are subject to the exclusive jurisdiction of competent courts and forums in Mumbai only.

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India’s Multi-modal Route to Prosperity Dear Readers, I watched our External Affairs Minister Dr S Jaishankar’s video clip many times which went viral in early June. He was speaking at the GLOBSEC 2022 Bratislava Forum. I watched it for his poise, for his diction, the clarity with which he spoke and the confidence. We all know what he said. And my point is just that – India is at the threshold to chart her own route to prosperity. India does not need a US or any other geo-political alliance to pin her to choose a path. And this is exactly what the current larger economies cannot digest. The routes to our prosperity are multiple – hence my allusion to multi-modal. It is a strictly logistics related word but here I am using it for the various ways of reaching the goal to prosperity. Whether it’s strengthening our infrastructure, making sustainability an urgent necessity, or joining hands with multiple friendly nations to increase trade and knowledge- transfer, all this is what India needs to concentrate on. Amid the global uncertainties, the ongoing economic, geopolitical, and social flux, the global value chains are getting a reset, companies are re-looking at an alternate to China and a sustainable future does not look so distant. Read all about this and more. Like all our issues, this one too packs in many more topics. Hope you enjoy the read and find it useful in your professional life.

Charulata Bansal Publisher Charulata.bansal@celerityin.com www.supplychaintribe.com

Published by Charulata Bansal on behalf of Celerity India Marketing Services Edited by: Prerna Lodaya • e-mail: prerna.lodaya@celerityin.com Designed by: Lakshminarayanan G • e-mail: lakshdesign@gmail.com Printed by: Xposures, A 210, Byculla Service Industrial Estate, D K Cross Road, Byculla, Mumbai- 400027. Logistics Partner: Blue Dart Express Limited

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INTERVIEW

Reshaping the Supply Chains of Tomorrow

“SCM’s interest in making data-driven decisions was consistently high, and it always will be. We are seeing the rise of AI in every supply chain segment. I feel that the challenge is not necessarily with not using AI, but it’s with what we do after finding the insights. We need a unified strategy and a cohesive approach to provide state-of-the-art experiences. The first step to achieve this is by ensuring that SCM has a seat at the table in all enterprise-wide strategic decisions,” stresses Mr. Aswini Thota, Analytics and AI leader, Bose Corporation, during an interaction.

How has the pandemic changed the landscape of such solutions for companies who are keeping a blind eye to them for many years? What are the lessons learned? Most successful companies were always innovative. They constantly try to gauge what their customers want and develop solutions that strike the right chord with them. But obviously, organizations

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can’t come up with groundbreaking innovations every year. The other way organizations try to attract customers is through service innovations. Offering world-class customer service, a state-ofthe-art delivery process, intuitive user experience, having the right product at the right time, and seamless returns are some ways organizations are trying to innovate.

Mr. Aswini Thota is an Analytics and AI leader who solves organizational and business problems leveraging data. He always believed in the power of data and amazed what insights we can grasp from it. Over the course of his career, Aswini has developed a skill set in analyzing data and he hopes to use his experience and expertise in data science to help people discover the amazing career opportunities that lie ahead in the field of Data Science. He has effectively evolved from a machine learning researcher to an award-winning AI / Data science leader. Aswini holds two Master’s degrees in Electrical Engineering and Data Science.

INTERVIEW For a company to innovate using service, all the components of their offering should work like a well-oiled machine, and the supply chain function is at the heart of this innovation. Organizations realized a long while ago that innovation is key to success, and Covid-19 has created an environment where industry leaders must think on their feet and make fast decisions. The sudden shift in priorities caused by Covid-19 has exposed organizations that didn't have a foundational understanding of using modern technologies. Perhaps a critical vulnerability that organizations realized after covid-19 was their lack of ability to make data-driven decisions. Enterprises that had a wellestablished data analytics practice were able to run what-if scenarios quickly and pivot to meet the customer needs. Organizations that realized the value of timely information made data-driven decisions their top priority to correct these shortcomings.

Why does today's business landscape underscore the need for faster and better decision-making? And how can AI help? We live in an ultra-competitive environment where a single tweet or a bad customer experience can have a devastating impact on an organization's success. Businesses must be able to anticipate the impact of their decisions and investments. Artificial Intelligence (AI), a subfield of computer science, provides practitioners with algorithms to generate predictive insights based on historical data. AI is identified as one of the transformative technologies currently available. When we think about the applications of AI in the industry, we generally come across product offerings

such as self-driving cars, chatbots, etc. But there are numerous use cases of AI in solving enterprise business problems.

What role does AI play in improving planning and management across the end-to-end supply chain management? At its core, AI uses mathematical models to generate predictions and insights. These models are based on historical data. The AI algorithms offer a flexible and general-purpose framework to conduct experiments within any domain. Many SCM problems will fit into an AIbased problem-solving framework. For instance, we can: • Generate time series forecasts to predict customer demand for any given period accurately. • Predict the reason for a customer service call based on historical purchases and returns • Optimize the delivery routes based on the traffic, weather, and local events • Identify faulty machines and products The use cases of AI to improve SCM practices are long. We can safely say that any outcome that depends on certain known variables can be a good fit for AI, and leaders should conduct a cost-benefit analysis to prioritize the use cases.

Implementing AI-driven approach in demand forecasting can work magic for companies. Can you elaborate on this with an example? Demand forecasting is probably the top use case of AI in supply chain function. Demand forecasting deals with estimating the customer demand over a specific period. Demand forecasting, on the surface, seems like distributing the correct number of units to the right

store at the right time. But it has so much more to it. Having an accurate demand forecasting function helps organizations procure parts and manufacture units at the right time. There are several proven statistical techniques to generate demand forecasts; some of them are Simple Moving Average (SMA), Exponential Smoothing (SES), Autoregressive Integration Moving Average (ARIMA), etc. In recent years, organizations have been using neural network-based approaches such as Long short-term memory (LSTM), Gated recurrent units (GRUs), and Autoencoders. When done right, demand forecasting can help supply chain leaders accurately forecast the number of units to manufacture in a specific time along with the number of units to distribute to each store.

How AI technology is likely to make real improvements in supply chain management? AI is used to augment and optimize much of the existing supply chain management (SCM) practices. From pre-season demand planning, merchandising decisions, planning and allocation, inventory availability, product assortment, inventory fulfillment, and route optimization to last-mile events, AI is reinventing SCM. We are seeing AI being used to – extract text from supplier's documents, generate demand forecasts, optimize logistics, design the route plan, etc. The real value of AI is discovering the latent trends in the data and prescribing solutions to the decision makers to act. The approach must be comprehensive for AI to make a tangible impact on SCM. It is simply not sufficient for organizations to focus on a use case. From data gathering,

Organizations should stop thinking of AI as a one-off solution. Instead, leaders should drive using analytics and AI. Indeed, the path to implementing AI-centric SCM function is not without challenges, but none of the hardships are unique to AI. For instance, lack of quality data is one of the top impediments that often prevent firms from implementing AI. You can either fix the core data problems that plague your organization and implement advanced analytics or stay behind the AI-centered innovation. supplychaintribe.com

INTERVIEW

Predicting the future using historical data is also not new to the SCM function. In fact, demand forecasting is perhaps one of the oldest machine learning use cases that used statistics and time series forecasting methods to generate temporal estimates. But the modern-day’s AI algorithms, coupled with cheap and efficient cloud processing power, have created a ripe environment for SCM function to democratize AI across all supply chain pain points.

data quality, data integration, and data storage to running experiments, all pieces of the AI puzzle should be dealt with at most importance.

How can AI technology bring transparency and visibility to supply chains by improving the security and traceability of products? Transparency and accountability have become essential for a good SCM function. Having transparency in SCM means leaders can precisely know the status of each step in the supply chain pipeline. A transparent supply chain function also assumes that the data retrieved is quality tested and is of the gold standard. A transparent and well-governed SCM function can help business leaders understand the pain points at any given period and help them provide timely solutions. Overseeing the entire SCM function and identifying the problems based on heuristics and observations is a gigantic task. Here is precisely where AI can help. AI algorithms are very good at analyzing historical data to identify abnormal trends. Anomaly or outlier detection uses AI algorithms to identify rare and unexpected events that are different from standard patterns. Anomalies in SCM function are common. For instance, large volumes of orders coming from the same IP, distribution times that don't follow the normal curve, item prices being significantly below the previous sales price, etc., are some situations that SCM handles regularly.

How prevalent is the incorporation of AI & advanced analytics in the supply chain? Where are the user companies lagging in deploying them to the fullest? What are the challenges encountered?

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The use of data and analytics to advance supply chain functions is not new. The use of analytics to monitor the supply chain started a century ago, in the late 1920s when organizations such as Ford introduced mass production along assembly lines. Enterprise Resource Planning (ERP) systems and digitization of tasks revolutionized enterprise functions such as finance, supply chain, etc. This change has led organizations to store information about all the enterprise touchpoints in transactional databases. Data warehouses were then created to generate KPIs, and business intelligence tools helped organizations view the function's performance holistically. Predicting the future using historical data is also not new to the SCM function. In fact, demand forecasting is perhaps one of the oldest machine learning use cases that used statistics and time series forecasting methods to generate temporal estimates. But the modernday's AI algorithms, coupled with cheap and efficient cloud processing power, have created a ripe environment for SCM function to democratize AI across all supply chain pain points. Organizations should stop thinking of AI as a one-off solution. Instead, leaders should drive using analytics and AI. Indeed, the path to implementing AI-centric SCM function is not without challenges, but none of the hardships are unique to AI. For instance, lack of quality data is one of the top impediments that often prevent firms from implementing AI. You can either fix the core data problems that plague your organization and implement advanced analytics or stay behind the AI-centered innovation.

Give us top 5 reasons if you need to convince a chief supply chain officer of any firm to deploy analytics

and other advanced technology tools? State 5 major transformative landscapes to be precise. Though using advanced analytics in the supply chain has numerous benefits, below are my top five reasons to invest in data science and AI: ❖ Improve customer experience: Providing a legendary customer experience is all about anticipating your customer's needs and exceeding their expectations. The Supply chain function must lead and manage a lot of these expectations, from procuring raw materials to putting the products on the shelves. AI can help with predicting and forecasting customer needs. ❖ Increased automation: Organizations hire the best minds to perform meaningful tasks. Sometimes, compliance and ethical standards demand office workers do routine and mundane tasks. AI can help automate a lot of these tasks and help your workforce focus on more value-added tasks. ❖ Preventing machines from failing: Consistency and fault tolerance are important for running an efficient production pipeline; they are also critical for ensuring workers' safety. AI can enhance anomaly detection by learning the latent trends and generating early warning signs than facilitate timely maintenance efforts. ❖ Pace over perfection: Covid-19 has proven that organizations need to think on their feet and make instant decisions. Organizations must take a proactive approach and be ready for the next disruption. Having critical

INTERVIEW and foundational elements such as data lakes and cloud infrastructure will ensure organizations make quick data-driven decisions and be a key differentiator. ❖ Reduce attrition: One of the significant challenges most supply chain functions face is employee attrition. This is more prevalent in warehouses and distribution centers. People analytics is a field that uses statistics and machine learning to understand the needs of employees. The insights generated from the people analytics function can help organizations take preventative measures to ensure employee satisfaction.

Share with us steps to building a strong supply chain analytics strategy. Building a robust and comprehensive analytics strategy starts with realizing data as your number one asset. Business leaders should prioritize data over intuitions. Below are some of the building blocks that you will see in a successful SCM analytics function: •

Data storage: SCM function deals with several internal and external entities. Organizations need to digitize all the services and store the information with a mindset to retrieve them later. Big data and cloud technologies allow organizations to efficiently store and retrieve massive volumes of data.

❖ Data quality: Garbage in, garbage out. This is particularly true for the AI model. The quality of your AI models, to a large extent, depends on the quality of the data you feed into the models. Erroneous, incomplete, partial, and non-representative data are typical data challenges organizations face. Having gaps in your data will mainly be troublesome for demand forecasting. Organizations try to fix this issue by often buying data from external vendors. Companies need to improve the data quality before rushing to modeling. ❖ Data insights: Data insights is the process of generating actionable

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insights from data and creating a tool or solution for your business partners to consume these insights. Business intelligence and data visualization tools offer an excellent capability for organizations to consume descriptive insights. Technologies such as AI will help organizations consume predictive and prescriptive insights from the data.

Can you share with us a use case where you have implemented advanced analytics in supply chain at Bose and garnered tangible gains? Cold-start or new product introduction forecasting is the process of understanding the sales demand for net new products. Traditionally, organizations used to perform this task based on heuristics or trivial approximation mechanisms. We developed a robust Deep Learningbased approach to understanding the new product's sell-through demand before launching the product. This helped organizations to take a proactive approach toward manufacturing and distribution. We can significantly reduce the error by combining our historic sellthrough demand data with additional data sets such as media spend, product features, etc.

Having significant experience in this dynamic field, can you share with us some of the supply chain segments that are still white spaces when it comes to adoption of new age technology tools such as AI & analytics? SCM's interest in making data-driven decisions was consistently high, and it always will be. We are seeing the rise of AI in every supply chain segments. I feel that the challenge is not necessarily with not using AI, but it's with what we do after finding the insights. Today's digital customers want organizations to provide exceptional customer experience. Part of providing an extraordinary customer experience is understanding what your customer wants and proactively providing avenues and opportunities for them to make purchases. All enterprise functions try to deliver a game-changing customer experience. Sales and marketing try to predict the next best product, the market

research team tries out cool products to impress customers, the supply chain function generates forecasts to ensure timely deliveries, etc. But to win and retain a customer, it takes more than this. We need a unified strategy and a cohesive approach to provide state-ofthe-art experiences. The first step to achieve this is by ensuring that SCM has a seat at the table in all enterprise-wide strategic decisions.

What are the upcoming disruptive technologies that we are yet to witness in supply chain? Internet of Things, Edge Computing, Artificial Intelligence, and Blockchain technologies are all set to disrupt the supply chains. We already see drone deliveries piloted in certain countries. Avoiding traffic and autonomously delivering goods can be expected to become a common phenomenon in the next few years. We might see organizations using autonomous vehicles and drone technology to first distribute goods between airports and warehouses, followed by customer deliveries. We commonly think about Bitcoin and cryptocurrency when we hear about blockchain. At its core, a blockchain is a decentralized ledger that anonymously records transactions between involved parties. Blockchain avoids the use of intermediaries for verification and enhances security. The applications of blockchain technology in the supply chain are huge. SCM function can use blockchain technology to transact with entities with improved security, compliance, and scalability.

OPINION

The

GVC NARRATIVES and

Trade winds

Global Value Chains (GVC) have become a dominant feature of world trade, encompassing developing, emerging, as well as developed economies. From sourcing to Finished Goods, each leg of the activity finds its place where the necessary quality of skills and materials are available at competitive pricing. Abhijit Das, Founder of Narrativ.Design™ shares his views on current value chain resets affecting global trade.

GVC

or Global Value Chains is like the world wide web of trade flows. Interconnections between countries and regions, their roles and repertoire in global trade can be explained using GVCs as a map. And by viewing shifts in GVC interconnections over the past three decades in the light of current global, regional, national narratives of growth and development, trade agreements and disagreements, emergence of strategic initiatives and supply chain predicaments we are able to develop scenarios which could predict which way the trade winds will blow and what could preparations look like. Global Value Chains (GVCs) underpins global trade and supply chain decisions and dilemmas. The concepts of ‘globalization’ and ‘industrialization’ as a pivot of economic growth and shared prosperity for all formed the basis of re-organizing trade and development under global institutions like World Trade Organization (1995), International Monetary Fund (194445), World Bank (1944-45), and in

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particular UNIDO (1966) which focuses on turning industrialization into a ‘force for achieving greatness’ by developing nations emerging from decolonization. Reconstructing a conflict-free post-war world on the tenets of dialogue, diplomacy and good faith held us in good stead. But the global development agenda, goals, frameworks, and commitments are called to question from time to time, as it was between 1996-2000, leading to the Millennium Development Goals (MDGs) and subsequently once again in 2016 -18 (Post-2015 Development Agenda) which birthed the United Nations Sustainable Development Goals (UNSDGs). However, COVID-19 pinched the GVC map in a way which made the interconnections surface unlike ever before, accelerated certain resets in the global, regional, and national view on the role and participation of countries impacting the supply chain challenges during the crisis. How the GVC shapes up in the future would directly and indirectly impact trade winds and therefore supply chain prerogatives throughout the world.

Abhijit Das is founder of Narrativ.Design™, a management consultancy focused on building brands and brand narratives for the strategic growth of business beyond borders. He works with Investors, Start-up Founders and the C-Suite as a Brand Incubator and Strategic Collaborator, co-creating products of culture. He has worked extensively in SEA and India. Before starting Narrativ.Design, he nurtured the strategic thinking and the creative product at Leo Burnett Vietnam as Chief Strategy Officer (201215, 2016-20) and Business Head - TEAM C by Publicis.

The Global Value Chain Development Report, 2021, Global Trade and Value Chains during the Pandemic, 2022, The New Face of Trade and Global Value Chains in Light of Covid-19: Trade Development & Climate Change are key resources which reinforce our faith in the role of GVCs in achieving the global & national agenda despite signs of resets. Some of the key resets are: 1. Changing intra-regional and inter-regional dynamics: Intra-regional trade share of Asia (with PRC) has grown significantly higher (from 5.8% in 1990 to

OPINION 26.6% in 2020) while Asia’s share of regional trade with North America and the EU+UK dropped to 12.6% and 10.7% by 2020 from 24.8% and 17.6% respectively. India’s success with its bilateral trade agreement initiatives and engagements within the ASEAN region under the Act East Policy are an indication of deepening intra-regional trade much further. Source: ADB calculations using data from International Monetary Fund. Direction of Trade Statistics. 2. Emergence of two new manufacturing hubs with greater resilience in the face of crisis Asia has consistently shown greater resilience against global financial shocks, stronger economic rebound from the COVID-19 crisis as well as the confidence in managing crisis. Two names featured strongly during the COVID crisis – India & Vietnam. India particularly, known as the ‘Pharmacy of the World’ is fast emerging as a Medical Tourism destination (ranked 10th among the top 46 nations), with strong R&D capability as indicated by its development of indigenous vaccine within extremely stressful timelines

and taking it a notch further by timely distributing aid globally amid lockdowns. Emergence of India as a Global Manufacturing Hub (India ranked 2nd, surpassing the US in the Global Manufacturing Index 2021 report) amid the ongoing the national narrative and policy measures supporting India’s ambition to contribute more than $500 billion a year to the global economy by 2030 is a strong lead to the shape of the supply chain future. Vietnam on the other hand was applauded by the world during the first wave for its efficient management of the contagion. Vietnam is also emerging as a new manufacturing hub while its logistics sector contributing 2.5 percent to the GDP, is already among the fastest growing sectors. 3. Emergence of new international, regional, national ‘Standards’ Diversification of inputs and substitutability calls for standardization to decide the fragments (of trade connections) and information symmetry or asymmetry with growth in the geographical length of GVCs. 5G rollout, for example has big implications on the status quo, seamless trade flows as

well as supply chain predicaments. Intra-regional and inter-regional tieups like the QUAD are an important factor which will influence GVC intensive industries like Electronics, Automotive, Medical Equipment in the near future. 4. Climate change call-for-action across industries, ESG inclusion in brand narratives and business choices We would probably look back at 2022 as a turning point in the GVC roles and ramifications depending on how far the brand narrative is from real business action on ESGs. Energy equation in consumption and developmental roadmaps are key to board the recovery and rebound bandwagon. The movement of people, products and investments are greatly influenced by the action on ESGs globally – also an imperative in designing resilient supply chains. The above resets are not all. And yes, it is complex and dynamic. But it is not complicated if one refers to the GVC as a map of movements that were, could be and/ or would be.

Map 1.1 All countries participate in GVCs—but not in the same way

GVC linkages, 2015 Low participation Limited commodities High commodities Limited manufacturing Advanced manufacturing and services Innovative activities Data gaps

IBRD 44640 | AUGUST 2019

Source: WDR 2020 team, based on the GVC taxonomy for 2015 (see box 1.3). Note: The type of a country’s GVC linkages is based on the country’s extent of backward GVC participation, measured as the portion of imports embodied in manufacturing exports as a percentage of a country’s total exports, combined with the country’s sector specialization of domestic value added in exports and engagement in innovation. Countries in the commodities group have a small share of manufacturing exports and limited backward GVC integration. Their share of commodity exports can be low, medium, or high. Countries specialized in limited manufacturing GVCs engage in some manufacturing exports, often alongside commodities exports, and exhibit medium backward GVC integration. Countries specialized in advanced manufacturing and services GVCs have a high share of manufacturing and business services exports and high backward GVC integration. Countries specialized in innovative GVC activities spend a large share of GDP on research and development, receive a large share of GDP from intellectual property, and exhibit high backward GVC integration.

export raw materials for further processing; others supplychaintribe.com import inputs for assembly and exports; and still others produce complex goods and services. In addition, some

Figure 1.5 Country transitions between different types of GVC participation, 1990–2015

FOCUS

Shifting Paradigms of

Global Supply Chains The overall supply landscape is undergoing a significant change today with multiple unforeseen events and changing consumer mindset that expects product availability at much higher speeds. The mantra for supply chains is to transform itself with agility, flexibility & resilience, which would differentiate itself in the marketplace tomorrow. A key enabler to catalyze the transformation would be the effective integration of data assimilation and analytics and embedding efficiency improvement in each step of the value chain, write Prof. V G Venkatesh, Associate Professor, EM Normandie Business School, France and Rohit Menon, GlaxoSmithKline, Switzerland.

N the last few decades, the focus on an end-to-end supply chain involved a global network of low-cost origins supported by inter-continental logistic networks that fed into regional distribution networks to help bring customization closest to end consumers. However, a few black swan events in recent years have significantly tested the resilience of the supply networks and exposed those weakest links across multiple industries and geographies. A combination of headwinds such as the Russia - Ukraine conflict, pandemic driven backlogs, commodity price inflation, and imbalance in sea-freight capacity across continents puts significant pressure on maintaining the cost to serve end consumers, be it technology, consumer goods, or the pharma sector. Not long ago, there was a point in time when the supply chain function was viewed as an organizational cost center. However, today’s perfect storm of global challenges has catapulted the

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supply chain from a supportive function role to boardroom discussions as more and more consumers experience empty shelves, increased prices, and unsure delivery timelines. There are various examples today where innovative and first-mover actions by supply networks, be it demand-supply planning, inventory management, or logistics, have been decisive who attaining the pole position in meeting consumer needs. From a classic supply model, there is ongoing transformation among value streams to digitize processes to organize & collaborate from the source to delivery stages. Adopting IT as a driver helps automate production processes, improve vendor engagement for materials, embed smart warehousing, and optimize logistics planning for end consumers. As part of navigating the headwinds, the e-commerce giant Amazon took some long-term decisions during the pandemic year that witnessed up to 14% of its portfolio out of stocks and cost increases as high as 25%. On the

V G Venkatesh is also a Senior Associate – Latin America with NextPort Inc, Colombia. His teaching and research interests are in global procurement, international logistics, and digital transformation. He is a Certified Supply Chain Professional (CSCP) from APICS-USA and has over two decades of industry and academic experience in global supply chain practices in different geographies such as Honduras (Central America), Sri Lanka, Hong Kong, and Bangladesh, and New Zealand.

Rohit Menon is a supply chain professional in the fast-moving consumer healthcare sector, currently based in Switzerland. He oversees the supply planning of multiple site clusters in Europe for market leading consumer brands. He holds an MBA in Operations Management from SIBM Pune, Mechanical Engineering from NIT Calicut and is an APICS certified CSCP & CPIM professional. His geographic experience includes Europe, Middle East Africa and Indian Subcontinent supply chain networks.

FOCUS can impact the balance of trade across the globe. In addition, there are multiple bilateral trade agreements across the globe being effectively utilized to reduce cross-border taxes on raw materials or even finished produce. A balanced move between global and regional supply models should holistically consider cost, risk, and trade policies.

THE CHIP SHORTFALL As the world is becoming more digitized, the demand has increased proportionally for semiconductors being highest in computers at 32%, followed

Points worth pondering logistics space alone, chartering of own ships and manufacturing own containers has helped reserve dedicated capacity for its product movement when container availability across US & Chinese ports has extended the standard sea shipment lead times by an additional 3-4 weeks’ horizon. Congestions among ports, such as the scenario witnessed at Long Beach with higher cargo dwell times, spiked the out of stocks across PlayStation to consumer healthcare products. The logistics spend for Amazon observed a year-on-year spike from $ 38 Bn in 2019 up to $ 61 Bn in 2020. To ringfence the logistics spend, the reliance on its shipping fleet increased to 72% in 2021 versus 49% in 2019. Real-time data availability of container spot rates and carrier capacity across global transit lanes helps organizations make highly informed decisions on the movement of high-value and priority products. Outsourcing logistics services to 3PL / 4PL providers have helped optimize the workforce for multiple global corporations, which was considered a norm in the recent decade. However, when container spot rates spiked to $20000 from China to Los Angeles in mid-2021 from £1200 in the pandemic era have raised food for thought on the need to integrate logistics data analytics into global supply chains. It is quite interesting to note that container shortages, the main driver for shipping cost increases, had a situation ten years ago when an oversupply of boxes led to conversion into make-shift houses & business parks. Combining

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these measures helped evade the backlogged ports where cargo ships haul multiple companies’ products within the same containers. The most prominent ocean vendors, such as the leading global retailers, were also quick to follow suit to minimize the logistics cost impact being passed down to end consumers. Besides, the Brexit event impacts the European and UK leg of the global transport. The movements across European and UK spaces are becoming very restrictive due to the work permit regime for drivers. The industry faces an acute driver shortage, which may hamper the global supply chain performance. This major problem may hit the last mile delivery and land transportation in many geographies, even though large corporates design incentives to attract and retain the resources. In the recent World Economic Forum held at DAVOS, restoring trust in global supply chains was the critical focus. The World Trade Organization also echoed the need to gravitate toward green and digital supply chains supported by modernized rules. During the height of the pandemic, long out-of-stock horizons for critical medical supplies and healthcare products drew the attention of policymakers and senior political leaders across the world. The globalized supply model, which was focused on lower total cost based on economies of scale, is now being challenged to have a more regional presence for critical industries of national interest. However, it is also important to remember that short-sighted moves back to regional or domestic supply models

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According to the Zurich climate change report, approximately 14% of global greenhouse emissions arise from transportation. It is also interesting to note that the downstream logistics emissions are 5.5 times a company's direct emission on average. A study by CDP, a global foundation, observed some outliers where such a factor is 24x in food & beverage companies, 19x in personal & household goods companies, and around 11.5x in the retail sector. Re-usable shipper boxes are being explored for specific product categories in the middle mile chain from central warehouses to retailer segments where replenishment turns multiple times during a single month. The transition to electric fleets in the last mile delivery for significant e-commerce companies is an example of how carbon emissions could be offset from the end-to-end perspective. The pandemic taught a lesson or two that has required certain supply chains to develop domestic value streams such as personal protective equipment or critical medical supplies, cutting down logistics emissions by sourcing them thousands of miles away.

FOCUS The advent of online shopping has led to a rapid surge in business-to-consumer shipping in recent years, with a staggering rise from 43 bn units in 2014 to 131 bn units by 2021. The backbone of such a successful model in ensuring a combination of same-day deliveries and inter-continental consumer shipments is a network of multiple smart warehouses that work effectively as hubs and spokes. by communications at 31%, and after that in automotive & consumer sectors. This one component faced the brunt of heavy shortages during the pandemic, which was already facing demand-supply mismatches. The demand increased by up to 17% in 2021 compared to 2019, and the backlogs are not expected to be cleared immediately but extend until the end of 2022. According to Intel leadership, Just-in-time (JIT) and Justin-case (JIC) strategies were adopted in a supply chain world obsessed with cost and somewhere lost sight of the balance needed with resilience. There is a specific roadmap to ensure that the sourcing strategy of critical components has less concentration in some geographies of the globe but has more manufacturing sites across US & Europe and Southeast Asian sources. Significant investments in intel, Texas Instruments, and Samsung have been announced across the coming years to de-bottleneck the supply situation. Supply chain transparency may help allocate supplies based on profitability in the short term. However, in the longer term, the strategic partnership between Ford & Global foundries is an example of how collaborative forecasting and planning may secure the critical supply from shortages.

RAPID SURGE IN E-COMMERCE The advent of online shopping has led to a rapid surge in business-to-consumer shipping in recent years, with a staggering rise from 43 bn units in 2014 to 131 bn units by 2021. The backbone of such a successful model in ensuring a combination of same-day deliveries and inter-continental consumer shipments is a network of multiple smart warehouses that work effectively as hubs and spokes. Digitalization of the logistics industry has been a critical enabler that has helped

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(Picture Credits: Adents, Serialization Industry)

track parcels from their source through to distribution centers or cross-dock points and the end consumer in the last mile. This has been effective by using passive/ active RFID tagging of individual parcel units in warehouses and geo-tagging the long-haul trucks or last-mile delivery vehicles. The supply chain visibility improvement of goods across the supply network has helped build confidence when lead-time reliability is under heavy pressure. For example, one of the leading food service specialists in the UK gains real-time visibility over its supply through real-time information exchange with fleet managers and drivers. The ability to counter freight cost or commodity inflation headwinds has been to explore alternate cost reduction avenues, where head-count reduction in the supply operations was low-hanging fruit. Data analytics is gaining more prominence by the day, where the effective use of the information from a warehouse can support analysis to expose bottlenecks in operations and take timely efficiency improvement solutions to improve lead times. Predictive and preventive maintenance for industrial machinery has been used to plan maintenance schedules by gathering real-time operational data. This predictive analytics concept has been extrapolated to fleet maintenance management of more prominent logistics companies, thereby minimizing

unforeseen truck breakdowns or delivery delays. Route optimization at its onset, which utilized fewer variables of cost, time, and the shipment value, is now a further combination of real-time GPS information of route congestions, weather information, and potential docking slot availability/delivery slots at destination points.

ACHIEVING VALUE STREAM A critical step toward end-to-end product visibility or Supply chain traceability is whole track and trace technologies implemented in the pharma or consumer healthcare industries. There are various stages in how value streams achieve this: A unique code assignment on the finished pack level by stickering or ink-jetting helps identify the product on a batch manufacturing level and its source within the supply chain. Aggregation is the next stage that involves assigning identifiers further using the parent-child principle for shipper boxes and then further for pallets on which consolidation of product occurs. The benefits of this are multifold:  As the serialization data are further uploaded into common platforms of health authorities or regulators,

FOCUS the authenticity of the medicine or the consumer goods can be verified by the end-users. Counterfeiting of products can be effectively limited and help protect the brand.  Furthermore, during a quality defect or product recall, all the affected product units can be traced along the distribution chain.  To aid quality investigations for corrective actions, all the manufacturing equipment that came in contact with the product in each stage of production can be tracked in addition to the source of the raw materials or components that were consumed in the production. This combined benefit of inventory management, aiding root cause analysis in failures, and compliance with policy requirements, far outweigh the initial cost of investment in the manufacturing lines for consumer critical product categories. A further regulation that tightens the consumer healthcare sector in Europe is the adoption of MDR, a new set of regulations governing medical devices’ manufacturing and distribution.

TRANSFORMING DEMAND, SUPPLY & LOGISTICS TO ENTERPRISE-WIDE PLANNING Transformation of supply chain planning processes involves breaking the walls of consumer demand forecasting, manufacturing to supply planning, and logistics services, which achieved excellence in silos but lacked a collaborative birds-eye view to ascertain how the organizational balance sheets are impacted while meeting marketplace demands. As a cyclical process, sales & operational planning was a steppingstone to this transformation. However, there are still disconnects between demand signals, sales generation activities, and supply planning that can be bridged better through real-time information exchange. Capacity utilization improvement: A more extended horizon demand signal embedding promotional activities and predicted category growth estimates help manufacturing sites schedule shift and maintenance plans. Suppliers can

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minimize material shortages to have the best feasible throughput. At the market warehouses, the proper judgment between safety stocks & obsolescence on a micro-level is necessary to best support product growth aspirations. It is a demonstrated reality that supply headwinds have exhibited lower agility in production facilities post the pandemic. However, it is imperative to note that pockets of excellence are very much seen across manufacturing industries that are helping to meet ever-increasing consumer demand. Improved Inventory Management: At the market warehouses, the proper judgment between safety stocks & obsolescence on a micro-level is necessary to best support product growth aspirations. The visibility brought by digitization helps customer service teams obtain projections of product arrivals on an SKU level in volumes and align the customer orders or promotional plans with sales teams. A portfoliowide overview of stocks helps identify slow movers before their reaching obsolescence. At the downstream leg, point of sale information from key accounts also helps demand forecasters to allocate higher weightage on fast movers. Healthier balance sheets: The cumulative impact of aligning the common strategy organization-wide helps to improve the asset utilization at factories, improve the inventory rotation and minimize out of stock scenarios alongside obsolescence. The efforts become more customer-oriented in the long run and help strengthen the top and bottom lines.

SUSTAINABILITY & ETHICAL SUPPLY CHAINS Recent times highlight that customers are willing to pay more for products sourced from a value stream where operations are performed under respectable conditions, raw materials are sourced with minimal environmental harm, and manufacturing carbon emissions are offset. Sustainability programs are a vital agenda in the organizational scorecards, and dedicated teams are now involved in R&D, packaging technology,

procurement, and logistics to ensure the transition of the portfolio to have a higher percentage of recyclable biodegradable waste. A prominent example involves the transition to recyclable tubes in toothpaste developed in close collaboration with the tube supply network and the move to using non-plastic or bamboo handles in toothbrushes. The re-alignment of manufacturing processes and sourcing strategies will pay dividends in the long run, in terms of a broader consumer base. On the manufacturing side, treatment of process water and its replenishment back to the water table is a minimum requirement, and multiple mega factories today are activating the use of solar energy for plant operations. In terms of product design, value engineering programs to minimize nonvalue adding components in primary or secondary packaging to update product formulations that comply with policy or environmental regulations are ongoing in multiple consumer product organizations. According to the Zurich climate change report, approximately 14% of global greenhouse emissions arise from transportation. It is also interesting to note that the downstream logistics emissions are 5.5 times a company’s direct emission on average. A study by CDP, a global foundation, observed some outliers where such a factor is 24x in food & beverage companies, 19x in personal & household goods companies, and around 11.5x in the retail sector. Re-usable shipper boxes are being explored for specific product categories in the middle mile chain from central warehouses to retailer segments where replenishment turns multiple times during a single month. The transition to electric fleets in the last mile delivery for significant e-commerce companies is an example of how carbon emissions could be offset from the end-to-end perspective. The pandemic taught a lesson or two that has required certain supply chains to develop domestic value streams such as personal protective equipment or critical medical supplies, cutting down logistics emissions by sourcing them thousands of miles away. (*Disclaimer: Views expressed here are personal).

SPECIAL REPORT

Mission Gati Shakti On the MOVE

The PM Gati Shakti – National Master Plan was announced last year with an aim to break departmental silos and bring in more holistic and integrated planning and execution of projects with a view to address the issues of multi-modal and last-mile connectivities. With more than six months gone by, things seem to be moving in the fast-track. While any concrete update is too soon to be delivered at this point in time going by the mammoth project that this is, we spoke to industry veterans and analysts on the prospects & possibilities that this ambitious project holds and what’s in store for the supply chain fraternity. Here’s the special report capturing their insights & strategies that companies are adopting to play an enabling role in this ambitious project…

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SPECIAL REPORT

“I

NFRASTRUCTURE planning, implementation and monitoring will get a new direction from PM Gati Shakti. This will also bring down the time and cost overrun of the projects," Hon’ble Prime Minister Narendra Modi said while addressing a post-budget webinar on vision of 'Gati Shakti'. The PM Gati Shakti will also ensure true public-private partnership in infrastructure creation from infrastructure planning to development and utilization stage, he added. Emphasizing on the importance of PM Gati Shakti initiative, he said in 201314, the direct capital expenditure of the Government of India was about Rs.2.50 lakh crore, which has increased to Rs.7.5 lakh crore in 2022-23. “Strengthening the principle of cooperative federalism, our government has made a provision of Rs.1 lakh crore for the assistance of the states in this year's budget. State governments will be able to use this amount on multimodal infrastructure and other productive assets,” the PM said adding the National Ropeway Development Programme will help improve connectivity in the inaccessible hilly areas. He informed that in the PM Gati Shakti - National Master Plan, "more than 400 data layers are available now, informing not just the existing and proposed infrastructure but also information about the forest land and available industrial estate". He suggested

Sudeep Mehrotra

that the private sector should use it more and more for their planning and said that all important information regarding the National Master Plan is now available on the single platform. "Due to which it will be possible to get project alignment and various types of clearances at the DPR (detailed project report) stage itself. This will also be helpful in reducing your (industry's) compliance Burden," he said, suggesting states to make PM Gati Shakti - National Master Plan base for their projects and economic zones. He added the logistics cost in India is considered to be 13-14% of GDP and this is more than other countries. The PM Gati Shakti has a huge role in improving infrastructure efficiency. Over 24 digital systems of six ministries are being integrated through Unified Logistic Interface Platform (ULIP) and this will create a National Single Window Logistics Portal that will help in reducing the logistics cost. "Our exports will also be greatly helped by PM Gati-Shakti and our MSMEs will be globally competitive," he added. Hailing the launch of this momentous initiative, Cyrus Katgara, Partner, Jeena and Company, stated, “Gati Shakti Plan is fundamentally a digital podium to bring Railways, Roadways, Highways and other industries together for consolidated planning and synchronized implementation for all the mega Infrastructure connectivity projects in India. The work on the master plan has been going on in full swing and

we could see the positive impact on the construction of National highways and the initial work done like land acquisition, land use analysis and road connectivity etc for the development of air cargo terminals.” Seconding his views, Mahendra Shah, Managing Director, V-Trans India Ltd., added, “Through Gati Shakti project, we have started experiencing seamless movement of cargo in some part of country. It is helping us in route optimization. With the announcement of 25,000 km of new highways, the Gati Shakti Master plan will boost new warehousing and logistics facilities across the country.”

INDUSTRY EXPECTATIONS The core purpose of Gati Shakti is coordinated effort. Hence, focus on one piece over others is not the intention by design. The key tangible outcome will be projects which get executed by any agency will have support from others to minimize ramp up time for projects, maximize gains and ensure prioritization, stressed Sudeep Mehrotra, Managing Director, Alvarez & Marsal. Agreeing on the same, Prahlad Tanwar, Partner, Global Head – Logistics & Postal Services, KPMG in India, informed, “The ethos of the PM Gati Shakti initiative enables informed decisions on planning and executing initiatives. In an ideal state, the platform should enable various initiatives to be addressed in parallel given specific

One thing which companies should brace themselves for is the allocation of capital budgets in risk capital for long term. In many ways, next generation infrastructure is being created, which is disruptive like DFC or bullet trains or mega new airports. The success of this infra will be time horizon of longer period and conventional return wisdom will not work for next few years. Companies need to find ways of extending return horizon to be part of this phase of infra creation.

Managing Director, Alvarez & Marsal

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SPECIAL REPORT

Cyrus Katgara

Partner, Jeena and Company

ministries and states will continue to be accountable for execution. However, from an economic allocation perspective, the development and maintenance of roads is likely to continue to remain the primary focus given the overwhelming reliance of the Indian economy on this mode. Up gradation and enhancement of rail networks would also be important.” Cyrus Katgara, on his part, highlighted, “The government has rightly prioritized the road infrastructure as a first step of enhancing logistics infrastructure in India. As per the official numbers, the Ministry of Road Transport and Highways has completed 1,41,190 km of National Highways, on 31st March 2022, out of the set target of 2,00,000 km for 2024-25. Simultaneously, the work on Airports, Seaports and other engines of the Gati Shakti Master plan is also on target.” According to Anshul Singhal, Managing Director, Welspun One Logistics Parks, “The Gati Shakti plan was introduced to bring 16 ministries, including road and rail, for integrated planning and implementation of infra connectivity projects. The logistical infrastructure in the country is heavily connected, hence, having a multidirectional focus is the way to go about it. For us as warehousing developers, the

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From the logistics industry point of view, the Gati Shakti plan with its seven engines i.e roads, railways, airports, ports, highways, waterways, and logistics infrastructure will help strengthen our local manufacturing, become a push factor for exports and will also raise possibilities of new futuristic economic zones as well. All these things would result in tremendous increase in the business, we would be more than happy to have some pie of it. We would concentrate on increasing our footprints in coastal business as the ministry of ports has identified 101 projects and a target has been set to increase cargo capacity at Indian ports to 1,759 MTPA by 2024-25, from 1,282 MTPA at present. Also, with the development of 100 air cargo terminals under Gati Shakti, our goal will be to increase our domestic Air cargo business multifolds via our Jeena Criticare arm. increased focus on the construction of expressways and corridors are key. Under MoRTH, we have already witnessed an improvement in connectivity around the country, thanks to some of the major key infrastructure projects under construction currently which include the Zojila Tunnel in Ladakh, roads to connect Krishnapatnam Port in Andhra Pradesh, a major bridge over the Middle Strait Creek in Andaman and Nicobar Islands, two-lanes expansion of Lalpul-Manmao changing road in Arunachal Pradesh, and more. With MoRTH plan to develop a total of 22 Greenfield Expressways, 23 other major infrastructure projects and other highway projects as well as 35 Multi-Modal Logistics Parks (MMLPs), the government largely looks to be progressing in the right direction.”

PROGRESS MADE SO FAR If the recent news is to be believed, infrastructure gaps have been identified in around 130 critical projects during the first six months of the flagship Gati Shakti Mission. The Union Ministry of Shipping, Ports and Waterways has recognized about 80 projects so far. Similarly, the Steel and Coal ministries have to address issues prevalent in 38 and 13 projects respectively. Apparently, over 1300 projects are set to be on-

boarded to the National Monetization Pipeline (NMP) by 2024. 850 of them have been mapped on it until now. The intention is to reduce delays, cost and time overruns to expedite India’s progress towards achieving a $5 trillion economy. Work is required on the portsroad linkages to the Machilipatnam Port, Mundra and Dahej ports, Keni-Belekeri port along with links to Malpe, Padubidri and Hangarkatta. The Union Ministry of Road Transport and Highways along with the National Highways Authority of India (NHAI) are the implementing agencies for these projects. According to Sudeep Mehrotra, “These are early days, and the jury is still out. The listing of likely projects is being done. The modalities of coordination are being worked out. The intent and push from the government side is clear. The initiative may take 2-4 quarters for real benefits to be visible.” Seconding his thoughts, Prahlad Tanwar, highlighted, “The institutional framework and objectives for PM Gati Shakti have been rolled out to states and ministries concerned. Several ministries have identified the projects that will be a part of the PM Gati Shakti program and have begun prioritizing them. For example, Ministry of Ports, Shipping, and Waterways has identified 101

SPECIAL REPORT

As part of its strategy, Gati Shakti will incorporate different infra schemes such as Bharatmala, Sagarmala and inland waterways together with textile and pharma clusters, defence and industrial corridors, electronic parks as well as food parks, fishing clusters, and agricultural zones to boost logistics and provide worldclass infra facilities. As we are offering Multimodal Logistics services, we are planning for network expansion though waterways, railways & airways of better reach across India. Presently we are covering 1 lakh+ locations pan-India, so it will help to boost our network from Waterways and railways.

Mahendra Shah

Managing Director, V-Trans India Ltd.

projects estimated to cost approximately Rs.62,627 crore, of these nine projects are categorized as high impact projects worth Rs.1,913 crore to be completed within this fiscal year. In parallel, the states are developing state master plans by integrating state level data into the BISAG-N GIS portal. Certain states have progressed to prepare a roadmap for implementing state master plan and working on capacity building.” Giving industry inputs, Anshul Singhal, said, “From its launch until now, there has been significant progress in the Gati Shakti plan, both on ground and across departments. Out of the targeted 2,00,000 kms, the ministry of road transport and highways has completed the construction of 1,41,190 km of National Highways, while the Petroleum and Natural Gas Ministry has laid down 20,000 km of gas pipelines. It is worth noting that the Northern region of the country has also made significant progress under PM Gati Shakti NMP. Under the Bharatmala Pariyojana Phase I, MoRTH, through its implementing agencies – NHAI, NHLML and NHIDCL – have kept pace with the work of implementing 35 MMLP projects that have been identified for development. Furthermore, the Multi-Modal Logistics Park at Jogighopa, Assam, which is

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being developed in partnership with the state government of Assam as equity stakeholder in the project SPV, is already under construction.

EXPECTED TANGIBLE GAINS The Gati Shakti National Master Plan holds the potential to transform Indian infrastructure and our ability to compete with the world’s leading economies. In many ways, the initiative will be an inflection point in the history of our nation, highlighted Mahendra Shah. Gati shakti National Infrastructure Plan will help generating employment, attract investment and boost GDP growth. The Multi-Modal connectivity will ease connectivity across India seamlessly. Currently, logistics and supply chain costs account for 12—13% of the GDP as compared to the global average of 8 percent. This makes exports uncompetitive and impedes the PM's 'Make in India' dream. To add to that, the pandemic emphasised the role of the road network across all three delivery miles. Development of MMLPs is expected to help address these high costs by enabling use of multi-modal transport for longlead transport and improving rail-based freight movement. The Master Plan is expected to reduce the logistic costs,

cut turnaround time, and improve the cargo handling capacity by reducing the clutter in the system and improving the infrastructure. For Sudeep Mehrotra, the biggest benefit will be that projects will be designed better to meet future needs with all stakeholders in alignment. The other benefit will be the effort required for projects to deliver maximum value will be minimized. Hence, as a country, we will realize maximum value on every rupee spent. Cyrus Katgara opined, “The government's aim is to cut the logistics cost down to 8% of the country's GDP. As of 2022, the logistics cost is considered to be 13-14% of India's Gross Domestic Product which is very high compared to other countries. I am optimistic that the logistics cost would cut down to 10% by 2027.” Agreeing on the same, Anshul Singhal, avowed, “Looking at the bigger picture, the prime motive to achieve through the Gati Shakti plan is to increase the country's GDP and bring India’s logistical infrastructure upto global standards. The aim is to reduce logistics costs from 1314% of India’s GDP to approx. 8-10% observed by developed countries. With the government focusing on allocating funds to develop multi-modal logistics

SPECIAL REPORT parks to boost logistics efficiency, costs and time for transportation will significantly go down. Also, MMLP would be incorporating cutting-edge facilities with smart technologies that will address the long-standing ‘last-mile’ delivery difficulty, allowing shippers to choose between different modes of transportation. The MMLP projects will also help create over 2 lakh job opportunities.”

PRIVATE PLAYERS SUCH PLAYING AN ENABLING ROLE Offering an analyst’s perspective, Sudeep Mehrotra offered three-pronged strategy for companies to play an enabling role in this journey. These include: a. Help the government with trade insights and requirements so that right design can be coordinated b. Invest along with the government by allocating some part of capital budgets to long term futuristic projects c. Push for standardization as new infra gets created so that it also changes the way we operate from world-class infra.

will be an important success driver for PM Gati Shakti. Logistics services and infrastructure providers will have a pivotal role to play in developing and operating logistics assets such as multimodal logistics parks, free trade zones, warehouses, and port terminals in conjunction with driving supply chain design and developing industry and customer specific solutions.” From the industry’s side, Cyrus Katgara, stated, “Logistics players can surely help the government by including sustainability in their operations or by going green. We all must switch to alternate fuels like EVs, CNG and contribute to reducing the carbon footprint. It will help the government’s key initiatives, including the Gati Shakti Plan, Sagarmala Programme, GST reduction, and NMP, to name a few. Secondly, logistics companies through their respective trade associations should recommend process improvement plans, discuss growth opportunities, and trade bottlenecks with the relevant ministries and jointly work with them to expedite the development of the entire industry.” Anshul Singhal is of the view that having access to industry experts and developmental experience, the

According to Prahlad Tanwar, Government of India is promoting public-private partnerships (PPP) as an effective tool for bringing private sector efficiencies in creation of economic and social infrastructure assets and PPP

Anshul Singhal

Managing Director, Welspun One Logistics Parks

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partnership between private players and the government will help expedite the progress of the project. Building Multi modal logistics parks requires knowledge and domain expertise that can be achieved via a partnership with developers. On these lines, talking about their plans, Mahendra Shah informed, “We are very small part of total logistics network of India, but as a company, we always support mega projects like Gati Shakti. As far as V Trans is concerned, we are working on these initiatives to support the government in realizing this objective”. These include: • Opening new branches within government logistics park and hub in tier II & III cities, which will essentially generate more employment as well as offer business partner proposal for new franchisee opportunity. • Improve existing network infrastructure by increasing axle loads, increasing vehicles on road, add more vehicles specifically CNG and electrical vehicles with an aim to support sustainability. • Identify and optimize new route for time-sensitive cargo

We, at Welspun One, have envisioned a pan-India approach to offer world-class Grade A warehouses across the country including Tier II & III cities. In just two years, we have made significant in-roads in the West and North market and signed an MoU with the Tamil Nadu Government for setting up warehousing facilities across the state. With every project, we endeavour to create a long-term impact that has the potential to create a multiplier effect. With our parks, our vision for the next decade extends beyond developing square footage to – creating jobs, adding to state revenues and sustaining overall growth. Our business model is designed in a way that is driven by customers & consumption. Hence, the strategy is to buy, lease, build and ultimately exit. Another key fundamental for WOLP is to ensure governance when it comes to building Grade A warehouses.

SPECIAL REPORT

Prahlad Tanwar

Partner, Global Head – Logistics & Postal Services, KPMG in India

•

Ensure better modal integration across rail, road, and water.

SHAPING THE SUPPLY CHAIN INFRA LANDSCAPE During a recent conclave, Som Parkash, Minister of State for Commerce and Industry, was quoted as saying, “India is one of the most attractive destinations for investment in the world and the government has prepared some important frameworks to help businesses thrive in the country. One of them is the PM Gati Shakti masterplan and its implementation, which will help us to achieve our aim in logistics efficiency. Prime Minister Gati Shakti National Master Plan will help achieve India’s aim of a US$5 trillion economy.” “An infrastructure master plan will make a difference through an integrated approach by breaking the entrenched silos over six years, which has received a Rs 20,000 crore allocation in this year’s budget. Propelled by seven engines –

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Infrastructure creation in India has for decades suffered from disjointed planning, under-utilization of installed capacity, lack of standardization, synchronization, challenges of clearances/approvals and other interdepartmental issues. PM Gati Shakti aims to create the next generation of infrastructure by leveraging knowledge, technology, and innovation. The master plan outlines a comprehensive database of ongoing and pipeline projects across 16 nodal agencies including infrastructure ministries, ministries and states integrated with 200+ Geographic Information Systems (GIS) layers to facilitate planning, designing and execution of the infrastructure projects with a common vision. Instead of planning and designing infrastructure in silos, PM Gati Shakti will enable projects to be designed and executed with a common vision by incorporating the infrastructure schemes of various Ministries and State Governments like Bharatmala, Sagarmala, inland waterways, dry/land ports, UDAN. The effective rollout of the program heralds a new era of logistics infrastructure planning. roads, railways, airports, ports, mass transport, waterways, and logistics – PM Gati Shakti is an idea whose time has come," added the minister. Adding on to the same, Sudeep Mehrotra, stated, “The key benefit of Gati Shakti will be the coordination it is expected to bring between various agencies responsible for infrastructure spending in the government both at central and state levels. This comprehensive approach is likely to result in maximization of utility that these projects deliver. For e.g. If an MMLP is being developed by DFC, it will likely be supported by NHAI for connectivity and state governments for land acquisition. The alignment of direction and prioritization will be the key benefit. In addition, nodal agency is likely to have better resources to improve decision making in design of projects.” On a promising note, Anshul Singhal, concluded, “The PM Gati Shakti plan is aimed at giving the Indian infrastructure a modern direction by creating a single

window system to plan, coordinate and monitor projects. A key problem that it aims to address is the lack of coordination among stakeholders that would arise due to the lack of information shared with various departments, which included both government and private institutions across states. Now, with access to information, everyone will be able to develop projects at a faster pace leading to optimum utilisation of resources. The plan also aims to ensure that a partnership between publicprivate players in infrastructure is established at every stage from planning to execution of projects. Development based on infrastructure also ensures there are new employment opportunities which can boost the Indian economy. The 24 digital systems of six ministries are being integrated through the Unified Logistic Interface Platform (ULIP) and this will create a National Single Window Logistics Portal that will help in reducing the logistics cost.”

COVER STORY

ELECTRIC VEHICLES Supercharging The Transportation Infra

22 CELERITY July - August 2022

COVER STORY What seemed like a distant dream until the recent past has become the reality of new age transportation. With the government’s stronger and concerted thrust on going green & clean, the emphasis on the deployment of electric vehicles in transportation has witnessed a renaissance of sorts. Right from the Central Government to respective state governments, everyone is rolling out red carpet for EV manufacturers and are subsidizing user companies who are fast embracing the change. Fast transforming the EV landscape are the e-commerce companies who have already started walking the talk and have made envious partnerships with EV manufacturers for the fast and successful roll-out of EVs for last mile delivery. The indicative developments look impressive with FMCG and other sectors fast joining the race. Our Cover Story this time tracks the development of the fast-changing EV landscape and offers you insights from both sides of the spectrum – the MAKERS & the USERS…

THE MAKERS

Uday Narang,

Founder & Chairman, Omega Seiki Mobility

Hansveer Chandok,

Promoter, Syndicate Motors

Vani Rikhy Mehra,

AVP, Sales & Mobility, Euler Motors

Manvi Jain,

Director, PMI Group

Satish Kumar Jain,

Founder & Chairman, PMI Electro Mobility Solutions Pvt. Ltd.

THE USERS

Samrat Sehgal,

Head – Supply Chain, Dabur India Ltd.

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Dharashree Panda,

Director, Sustainability, Flipkart

Anjalli Ravi Kumar,

Chief Sustainability Officer, Zomato

Dr. Arunachalam,

MD & CEO, IBOB SCS, India sub-brand of SF International

COVER STORY USTAINABILITY is the need of the hour and is a pressing priority for businesses, customers, investors, and policymakers in India. The growing shift from brick-and-mortar retail towards e-commerce with its massive delivery vehicle deployment calls for cleaner mobility pathways. These pathways should provide economical, efficient, and convenient mobility services that are safe, reduce the dependence on fuel and cause least environmental impressions and adverse impacts on human health. The good news is that e-commerce companies are already leading the electric vehicle (EV) transition in India. These businesses now recognize EVs as a cost improvement measure, in addition to helping run their operations sustainably, improve customer satisfaction and meet regulatory compliance. Today, on a total cost of ownership (TCO) basis, light EVs (two-wheelers and three-wheelers) are already economically viable if the daily utilization of the vehicles is high. E-commerce fleets often have high daily vehicle utilization, making them ideal candidates for early EV adoption. Moreover, the economics of the EV model for commercial fleets is also improving quickly. There is a strong consensus within various Indian ministries to prioritize e-commerce electrification in the EV adoption sequence. Many state governments are increasingly instituting policies to prioritize the electrification of e-commerce fleets and related charging infrastructure. This includes recently announced schemes by the Delhi and Maharashtra governments mandating e-commerce companies to transition to EV fleets. A similar approach by other state governments and the central government can help set out a clear direction for e-commerce businesses to accelerate EV investments. A joint report by the World Business Council for Sustainable Development (WBCSD) and Flipkart, ‘Advancing electrification of e-commerce deliveries in India', reveals that 100% electrification of e-commerce delivery fleets is possible

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with a conducive policy environment and greater collaboration by ecosystem partners. The e-commerce last mile is uniquely positioned to lead the electric mobility transition in India, and relevant for other global economies. This is due to the high daily utilization, fixed pick-up points, consistency of daily kilometres travelled and the predictability of routes and energy demand of the last mile. While these all might sound like gyan, the ground reality is far more exciting than one can even imagine. Recently, Piaggio Group inaugurated its EV experience centre, Mobility Motors in Bengaluru. The experience centre will give customers a platform to access Piaggio’s newly launched FX range (fixed battery) of electric vehicles in both cargo and passenger segment. Similarly, Greaves Electric Mobility inaugurated its largest EV production facility in Ranipet, Tamil Nadu. Capturing the e-commerce side of story, Amazon India recently announced that it is working with Sun Mobility to expand the deployment of EVs integrated

with battery swapping technology for its transportation and logistics services. These vehicles will be part of Amazon India’s commitment of adding 10,000 electric vehicles in its India delivery fleet by 2025, announced in 2020. The deployment of EVs will help its efforts to implement more sustainable practices in its operations, as well as contribute to its Climate Pledge goals – a commitment to achieve net-zero carbon by 2040, almost 10 years ahead of the Paris Agreement. While these are just some of the developments, the entire ecosystem has been quick enough to support and drive this future-forward growth story in unison. But what has led to this remarkable transition? Let’s hear it from the expert…

THE PLUSES According to Lars Mårtensson, Environment and Innovation Director, Volvo Trucks, there are numerous advantages of going electric. Some of them are as mentioned by him in one of the official releases:

Uday Narang, Founder & Chairman, Omega Seiki Mobility

The traditional players have now realized that EVs are the future, so the market is on track, and it’s not only just on track, the EV market is on an acceleration mode. The future of EVs is great. We are seeing exceedingly good demand in the electric three-wheeler segment; we have order book of up to 50,000 vehicles already. Over the next five years, 75 to 80% of three wheelers will be electric and we strive to be a big part of it.

COVER STORY The cost of owning an electric vehicle is going down: Although an electric truck has a higher sticker price than a conventional vehicle today, the low number of moving parts in an electric engine means they often have longer lifecycles and need less maintenance. Meanwhile, the price of batteries is decreasing at a rate that’s outpacing most analysts’ expectations. Ongoing investment in the renewable energy sector is bringing down costs of generating electricity to the point where running a truck on electricity will be a fraction of the cost of diesel. Batteries keep getting better: As demand for electric vehicles has shot up, battery innovation is also accelerating. Lighter, lithium-ion batteries are about a third of the weight and half of the volume when compared to lead-acid. And they are becoming even lighter and more powerful as the tech improves. Even more, gains could be made with the next generation of batteries, known as solidstate batteries. These charge faster, are safer and deliver up to twice the battery density of today’s lithium-ion batteries, which could potentially double the range. Infrastructure

challenges

are

being

Satish Kumar Jain, Founder & Chairman, PMI Electro Mobility Solutions Pvt. Ltd. & Manvi Jain, Director, PMI Group

The COVID induced lockdowns have been instrumental to showcase the benefits of a clean environment with least emissions and pollution. These played a part in driving the interest levels for the consumers towards the clean mobility ecosystem. These two years will be testament to the importance on domestic and futureready supply chains for all stakeholders of the EV ecosystem and the industry. addressed: Today, charging an electric truck for shorter-range tasks can be easily done overnight. While the infrastructure for fast-charging trucks is still small, it is expanding as cities, logistics centers, automakers, and gas stations look to cater to an emerging demand. And new technologies including smart chargers and smart batteries are making ultra-fast charging possible under a broader range of conditions. New discoveries are also demonstrating that charging speeds will be increased drastically by improvements of lithium-ion batteries. Electric trucks are becoming the better choice: As the price of electric vehicles

goes down, choosing electric could become more than a question of sustainability and cost. Electric trucks are also proving popular with drivers because they generate fewer vibrations than traditional diesel vehicles. They are easier to manoeuvre and park, making them well-suited to urban driving and deliveries. As a low-carbon option with no tailpipe emissions, electric trucks are proving popular with companies that want to operate more sustainably. On this note, let’s get on to the users’ side of the EV story before we bring to you the users’ experience and expectations to complete the quorum…

THE MAKERS What are your USPs? How is it different from other players in the market? Uday Narang, Founder & Chairman, Omega Seiki Mobility: Omega Seiki Mobility has been growing its product line up and manufacturing footprint rapidly in India. Omega Seiki Mobility currently has portfolio of 8 electric vehicles – three-wheeler EV: Rage+, Rage+ Rapid, Rage+ Frost, Rage+ Swap, Rage+ Garbage Tipper, Stream and in two-wheeler EV: Fiare and Zoro. Omega Seiki Mobility is a market leader with its Rage+ brand of electric cargo 3 wheelers (as per data from Vahaan Portal in L5N category). OSM is the only company to provide Fast, Fixed and Swap battery option with its range of three-wheeler

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electric vehicles. Omega Seiki Mobility is a fully integrated company where we are focusing significantly on controlling our supply chain in terms of power trains, motors, and batteries etc. OSM has always been about technology, providing efficiency, range, costing, safety, safety first what is extremely important is that we want all our products safe, ‘One life lost is way too many’. We are the only manufacturing who will be presently introducing long range of trucks in one and a half tonnes, three and a half tonnes, six and a half tonnes and bigger. Satish Kumar Jain, Founder & Chairman, PMI Electro Mobility Solutions Pvt. Ltd. & Manvi Jain,

Director, PMI Group: PMI identifies itself as the country’s leading commercial EV manufacturer with particular focus on technology leadership to actively contribute to the country’s clean mobility. The company maintains immense focus on building state-of-the-art product to offer trouble-free operations in the diverse climatic conditions across the country. This customer-oriented focus has helped PMI emerge as the country’s largest commercial-EV manufacturer, year on year. On the intrinsic side, the focus on employees has been at the core of the company’s ethos that has helped it overcome the great migration and great resignation phenomena observed by other companies in this space.

COVER STORY Hansveer Chandok, Promoter, Syndicate Motors: Syndicate Motors has a product portfolio of three platforms - electric rickshaw, electric loader and electric dumper, with multiple variants in each product line. The goal of Syndicate Motors has been to provide efficient and reliable three wheelers that are made and well suited to Indian working conditions - machines that the user can rely upon as their daily workhorse. All our platforms are designed and manufactured keeping in mind user requirements. A major part of total cost of ownership for users is the after sales services and upkeep- and this is where Syndicate Motors is focusing on to stand apart from the competition, by having fully equipped service centers that can repair and replace parts when needed, with a quick turnaround time.

Kindly elaborate on Euler Motors unique Go-to-Market approach – customer pilots and full stack ecosystem Vani Rikhy Mehra, AVP, Sales & Mobility, Euler Motors: Euler Motors has built effective solutions for mass adoption of electric vehicles in the commercial segment. We operate with a full stack ecosystem, which comprises India’s most powerful vehicles in 3wheeler category, robust charging infrastructure and service support, to make customers comfortable and open to EVs. A combination of all these factors have created a unique value proposition, which has inspired immense customer confidence in the industry. In addition to substantial retail customers, institutional players like BigBasket, Flipkart and many more have deployed HiLoad. Our EVs are designed for specific Indian conditions and customer needs, for India, from India. Our product, HiLoad, India’s most powerful EV in terms of range, payload, and battery capacity, has created new benchmarks in the last mile space and improved ecological footprint for our customers. We already have a network of 500+ charging infra points to support electric vehicles on ground, with multiple charging variants and charge on wheels options. We conducted numerous pilots with institutional customers for three years that helped to bring best-in-class

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Dr. Arunachalam, MD & CEO, IBOB SCS, India sub-brand of SF International

The battery capacity and the charging infrastructure are a concern. However, the industry has been forthcoming with various private players investing in Charging Technology, the PMP policy of the government, is also supporting these Investments. At present, the commercial vehicles have a range of 40-50 km on a single charge, and we are certain, in a short period, we shall have the technology of easily replacing batteries, Quick Charge technology, and battery replacement centers across the length and breadth of the Country.

vehicles and solutions to enable seamless operation of our vehicles and enable swift transition to EVs. We now have an order book of 9000+ vehicles, with retail deliveries ongoing pan India to serve this vehicle demand.

How has the pandemic been the lesson in disguise for EV manufactures and the users alike? What were the challenges faced during this period? Uday Narang: In the financial year 2021, the size of the Indian logistics market was around US$250 billion. It was estimated that this market would grow to US$380 billion in 2025, at a CAGR between 10 – 12%. The rising importance of last-mile deliveries for e-commerce—has been underway for years, but COVID-19 has intensified it. The pandemic has been more of an opportunity for us, since the pandemic started, consumers around the world, and certainly in India, have been shopping online in much larger numbers which has increased the demand for eco-friendly and pollution free last-mile delivery solutions. Also, Ukraine Russia war, Fuel prices are around 100 rupees a litre which has made electrification an important part of our logistics system in the middle and last mile logistics. Omega Seiki Mobility, being born electric, has been big proponents towards electrification and sustainability. SK Jain & Manvi Jain: The COVIDinduced lockdowns have been instrumental to showcase the benefits of a clean environment with least emissions and pollution. These played a

part in driving the interest levels for the consumers towards the clean mobility ecosystem. The challenges faced during the pandemic ranged from constrained access to credible supply-chain for raw materials as well as markets for finished products, quality workforce, leading to delay in all expansion plans. These two years will be testament to the importance on domestic and future-ready supplychains for all stakeholders of the EV ecosystem and the industry. Vani Rikhy Mehra: The pandemic was a learning curve for industries across segments. With surge in the demand from ecommerce and via retail, our vehicles were running continuously carrying optimum weight to fulfil customer’s requirements. The pandemic also made us more resilient, and we focussed on strengthening our localized supply chains and supplier network, along with creating an indigenous auto value chain, which also includes a developing retail network for smoother purchases. Hansveer Chandok: The pandemic has brought about quite a few changes in our life and also in the market. It has rapidly increased the rate of adoption of ecommerce and digitization of all aspects of life, thereby putting a renewed emphasis on first mile and last mile transportation which can be met by our three-wheeler platforms. Syndicate Motors has always been stringent about quality standards in manufacturing, and the pandemic has only helped us develop a routine for running a world class manufacturing

COVER STORY facility with focus on hygiene too. Coming to the challenges, I would say that the pandemic led to disruptions in the supply chain which led to us focusing on strengthening our localized supply chain, and leading to lowering to costs the benefit of which we turned over to the end users.

How EVs fare against ICE vehicles in terms of performance and costs? What are the solutions to address this perception amongst customers? Uday Narang: Electric vehicles’ total cost of running is 60 to 70% less than the IC engines, the electric vehicles require less maintenance and battery recharging cost. The cost of battery over the next few years will further go down, In the short term, the prices are high, but you will see battery cost to go below $100 a kilowatt hour which is $200 right now, that will make electric vehicle even more competitive. The current trends are in favour of growth which was seen in sales numbers of May 2022. The electric threewheeler sales in May 2022 for the first time have surpassed that of their ICE counterparts. At Present electrification is the way to go. SK Jain & Manvi Jain: The market for electric vehicles in India has witnessed a spike during the recent years, with growth in the monthly sales witnessing a near 10x growth over the last one year. However, the ecosystem is at a nascent stage with higher cost of ownership of an EV makes it an important entry-level barrier. While the long-term benefits on account of cost and environmental impact place EVs at a higher pedestal than conventional ICE vehicles, their uptake and immediate cost-parity will take some more time to realize. Vani Rikhy Mehra: EVs have become the preferred choice in the two and three-wheeler segments, especially in the commercial and last mile segments, providing customers with a better value proposition. EVs fare better in terms of lower TCOs, easier maintenance and better ROI as compared to ICEs. Apart from fuel, this includes reductions in service and maintenance expenses, as well as other incentives offered by

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OEMs, as well as the government on EV purchases. For instance, if we take the petrol price in Delhi-NCR for June 2021 at Rs.89 per litre, a commercial three-wheeler EV was breaking even with the ICE in two years. If we continue to map the petrol price hike, at the price of petrol in May 2026, which may be around Rs.108 per litre, an electric threewheeler will be breaking even with an ICE in 14 months. In a span of five years, the price hikes on fuel translates into total savings from Rs.1.9Lakh (at Rs.89 per litre) to Rs.2.6 lakhs (at Rs.108 per litre) by the fifth year of purchase. This shrinking timeline of the TCO is lucrative enough for businesses and customers to transition to EVs. Further, for every extra kilometre driven, the TCO per km for an EV will provide a greater reduction, implying greater savings, and returns on investment for EV users. Dr. Arunachalam, MD & CEO, IBOB SCS, India sub-brand of SF International: The commercial benefits aren’t noteworthy, but it is an evolving industry, and the technology and the products are still in the introduction phase. However, EVs are more efficient and with cheaper maintenance costs compared to ICE due to fewer moving parts and other benefits from the government like road tax/ Financial Incentives where the amount is reimbursed later. It allows a lucrative cost-benefit assessment. Additionally, it also embarks on an ambitious formalization of the scrappage Industry under the policy, where scrap value is fixed at 4%-6% of the exshowroom price of the new purchase. In terms of performance, our EV segment is doing a fantastic job, the demand is high. Every day we are receiving requests from our customers to either introduce or increase the fleet size. It’s an interesting paradigm shift, our customers are more inclined than we expected them to be, they are making changes in their policies, their KPI matrix, and their Cost-benefit assessments to align with the Country's goal of going full Electric by 2030. Hansveer Chandok: Electric vehicles’ running cost is up to 70% less than the IC engines, and they also incur much lower maintenance costs due to fewer running parts. The cost of the battery

is also expected to decrease over the next few years as adoption of electric vehicles increases. Also, the upfront costs for electric three wheelers are lower when compared to their four-wheeler counterparts. Coming to the perception of electric vehicles, especially electric three wheelers to be specific - this is an area that needs working. When one mentions the word ‘electric vehicles’ people tend to think of the Tesla and similar brands, not realizing that electric three wheelers are already ferrying people daily across the country. There needs to be more awareness regarding the made in India three wheelers segment.

What are the technology interventions in this space? Uday Narang: Technology plays a major role in the electric mobility segment. We have built war rooms across locations to track all the vehicles Omega Seiki Mobility has produced to look at the

THE CATALYSTS •

E-commerce companies need to signal demand and collaborate with vehicle manufacturers to develop right-sized delivery vehicles

•

OEMs need to innovate to fill product variability and reliability gaps

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EV vendors need to scale up to cater to the pan-India requirements of e-commerce companies.

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Financial institutions, together with OEMs, must address the barriers related to access to capital and EV financing

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E-commerce firms must leverage specialist vendors or charging point operators (CPOs) who offer packaged solutions to overcome the challenges of availability, ownership, and optimization of charging infrastructure

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Vendors need to invest in drivers’ awareness, capacity building, workforce development and provide an efficient and accessible charging network

•

Greater collaboration between the government and the industry to build conducive policies for development at each stage of the EV value chain.

Source: ‘Advancing electrification of e-commerce deliveries in India' by the World Business Council for Sustainable Development (WBCSD) and Flipkart

COVER STORY health of the vehicles, the batteries, the updates on the powertrain, in terms of charging stations and making the ride of electric vehicles more comfortable. The War Room set up helps Omega Seiki Mobility managing fleets for our logistics partners. SK Jain & Manvi Jain: Unlike the ICE engines, technology has shaped the EV industry since its inception. While the battery cells are imported, the BMS to suit the requirements suiting Indian conditions for optimum usage of an EV play a very important part. Further, the technology for fast charging needs to evolve to help allay the range-anxiety as well as provide contiguous and state-ofthe-art electric mobility infrastructure. Vani Rikhy Mehra: We have focused on building on tech leadership and designing superior products suited for Indian customers and road conditions. HiLoad is India’s most powerful cargo vehicle in the three-wheeler category, boasting the highest payload capacity at 688 kg. It has a powerful combination of the highest battery power (12.4 kWh) and certified range (151 KM) on a single charge. HiLoad, has been designed uniquely for India, from India, with powerful attributes and features that make an EV experience extraordinary. Euler Motors has taken a lead in segment innovation and is the first player in India to provide liquid cooling technology in our battery packs which allows the vehicle to withstand ambient temperatures and offer a long-lasting battery life, and optimum performance.

Dr. Arunachalam: The battery capacity and the charging infrastructure are a concern. However, the industry has been forthcoming with various private players investing in Charging Technology, the PMP policy of the government, is also supporting these Investments. At present, the commercial vehicles have a range of 40-50 km on a single charge, and we are certain, in a short period, we shall have the technology of easily replacing batteries, Quick Charge technology, and battery replacement centers across the length and breadth of the Country. IBOB is also working with some App developers to align our TMS (Transport management system) with the Charging Station grids, this shall allow them the knowledge and exact routes to the charging stations, saving unwanted stoppages and battery out scenarios.

Can you share with us some of the ecosystem issues – financing support, charging stations and how are you working towards circumventing them? Uday Narang: The number one thing that will accelerate the EV sector is financing. The PSU banks, State Banks should start financing electric vehicles. We are making a big push towards it by launching an electric vehicle finance subsidiary christened – Anglian Finvest for Omega Seiki Mobility customers to avail financing options. The company has already dispersed more than Rs.10 crore worth of loans. Credit facility is the primary concern for the EV market to grow. Secondly, the government should support in setting up more charging

Vani Rikhy Mehra, AVP, Sales & Mobility, Euler Motors

The surge in demand for e-commerce and intra-city logistics, which is expected to grow four times from $84 billion in 2021 to $350 billion by 2030, has enabled the logistics industry to shift towards EVs. The market is buoyant with massive EV demand in this space, as some of the largest e-commerce businesses, such as Amazon, Flipkart, Zomato and BigBasket, amongst others are now actively electrifying their delivery fleets. 28 CELERITY July - August 2022

infrastructure so that the electric vehicles can run smoothly and efficiently. The last and final pick to accelerate the pace of the EV market growth in India would be, there is a huge requirement for EV’s Tier-II, Tier- III cities. And there is a need for more policies towards providing EV solution in these cities for agriculture, farming, mobility etc. SK Jain & Manvi Jain: Financing of course has been a challenge in the EV space, EV technology being new to the market and gradually gaining traction. We think every market takes at least 3 years to mature and create bankability and now EV business has reaches that stage where PSU Banks are coming forward with products to support EV financing. Recently World Bank has also come forward to offer solution to support OEM so that they can pick big orders and bring volumes to the market. With this initiative of Central and state governments to develop charging infrastructure within cities and on all national highways, this challenge is gradually being taken care of. We, at PMI, have developed an ecosystem where we manufacture the vehicle, develop charging infrastructure and maintain it for 10 years to bring sustainability. Vani Rikhy Mehra: A full stack ecosystem approach is our unique proposition to tackle challenges with charging and service support. It covers high-performance products, charging infrastructure, and service support that has made customers comfortable and open to EVs. Euler Motors’ extensive full stack ecosystem approach combines our high-powered vehicle, HiLoad, along with a presence of 500+ charging infra points with four different types of charging solutions, including fast charging and charge on wheels with overall service support. We are committed towards enhancing the EV ecosystem in India and are working with over 10 financiers and banking institutions to facilitate access to easy financing for our customers. We have also begun our retail operations, and successfully expanded our network in new markets and cities, to serve customers better. Dr. Arunachalam: I shall re-iterate

COVER STORY again, that EVs are in a nascent stage at this time, however, the growth direction and indicators are very positive. At the production level, we still have a high technology cost that shall come down as demand grows, and production rises. This has happened with all industries and the curve for EVs shall be no different. An example is the LED segment, we have seen the transition since the policy changes post 2014. On the Financial side, it still has a low loan-to-value ratio and limited specialized financing options. The resale value is still an unexplored paradigm as currently there is no secondary market for EVs. In terms of funding, it is still around 80% with a rate of Interest of 150-200 bps more than ICE vehicles. However, with promotion from the private sector, many NBFCs and Fintech are moving into the space, and we are sure, within a short period this shall have the right financing options. Infrastructure currently seems to hold the real bottleneck but again, the Investments, Industry tie-ups, and Policies are driving quick change in this segment. There is usually a high initial investment, thus, making Charging time a factor for faster returns. Thus, fast charging becomes a critical component that must be linked with the technology enablers within the product. Superchargers and DC Charging is countering this bottleneck. At IBOB, we are currently aligned with selective charging stations to offer us specific time slots thus reducing our wait time and allowing our vehicles to do what they are supposed to, delivering customer delight. Hansveer Chandok: The single largest issue facing this industry is the lack of financing for the user of our vehicles. Our customers mainly include rickshaw drivers who come from extremely meager backgrounds and often lack the resources to pay for the rickshaws completely out of pocket. To make matters worse, a lot of these people also lack the facilities needed to be financed by major banks. To further compound the issue, a lot of flyby-night operators have been selling substandard vehicles, financed by banks, and then shutting shop soon after. In this instance, when the customer needs any kind of support to maintain their vehicle, they are left high and dry, thus leading to

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Hansveer Chandok, Promoter, Syndicate Motors

We need to change the way people perceive electric vehicles, specifically electric three wheelers. When one mentions the word ‘electric vehicles’, people tend to think of the Tesla and similar brands, not realizing that electric three wheelers are already ferrying people daily across the country. There needs to be more awareness regarding the Made in India three wheelers segment.

lack of income and hence the ability to pay back the loans. This has resulted in a high percentage of NPAs and further reluctance on the part of the banks to fund the purchases.

What have been the crucial learnings from working with over 50 ecommerce and 3PL institutional customers. Some of these include BigBasket, Flipkart, Udaan, Zomato, HUL, BlueDart? Vani Rikhy Mehra: The customer pilots helped us gain an insight on their basic requisites of a cargo vehicle, and their reception towards EVs. Our technology and vehicles, as well as full stack proposition made them comfortable with having electric three wheelers as part of their delivery fleet. Some of these insights were improving loading capabilities, capacity to climb high inclination, driver behaviour patterns and overall segment requirements. With customer engagements and learnings, we have worked on a product to deliver highest payload capacity and optimum range, coupled with advanced technology that competes with all vehicles in the segment. HiLoad provides superior performance and customer experience at par with ICEs in the segment, at much lesser TCOs and operating costs.

What are the growth opportunities and industry trends for EVs in ecommerce and delivery market? Uday Narang: Right from the year 2012, the Indian Government has been taking continuous steps to develop and promote EV ecosystem in the country, witnessed from National Electric Mobility Mission Plan (‘NEMP’) to introduction of Faster

Adoption and Manufacturing of EVs scheme (‘FAME’) on the consumer side and Production-linked Incentive Scheme (‘PLI’) for Advanced Chemistry Cell (‘ACC’) as well as for Auto and Automotive Components manufacturers on the supplier side. The EV market is continuously evolving in terms of new participants. But the key part is that new and significant players are being part of EV space with new technologies especially in the last mile and EV components segments. What is most important is that the traditional players have now realized that EVs are the future, so the market is on track, and it’s not only just on track, The EV market is on an acceleration mode. The future of EVs is great. We are seeing exceedingly good demand in the electric three-wheeler segment; we have order book of up to 50,000 vehicles already. Over the next five years 75 to 80% of three wheelers will be electric and we strive to be a big part of it. Building the products that will give efficiency, range, and safety as well as lower cost of ownership is suited best for the e-commerce and delivery Market. The logistics players are now looking for end to end solutions and we are OSM are delivering exactly that through our electric three-wheeler fleet and technology. SK Jain & Manvi Jain: While the consumers are witnessing the increase in retail, the key driver for the initial sales in EVs will be driven by commercial EV ecosystem, including food, e-commerce, goods-delivery fleets. As brands are moving towards decreasing their carbon footprint, the opportunity for growth in large-scale electric-fleets is immense. This will be given additional boost with the

COVER STORY electric-commercial vehicles that bring in incremental range and capacities. It would not be prudent to state that largescale commercial EVs will play a pivot role in the country’s CDG goals. Vani Rikhy Mehra: The surge in demand for ecommerce and intra-city logistics which is expected to grow four times from $84 billion in 2021 to $350 billion by 2030 has enabled the logistics industry to shift towards EVs. The market is buoyant with massive EV demand in this space, as some of the largest e-commerce businesses, such as Amazon, Flipkart, Zomato and BigBasket, amongst others are now actively electrifying their delivery fleets. Another key market driver for EVs is the booming demand from the retail segment; EV retail sales in 2021-22 reached 429K units, a threefold increase from 134K units in 2020-21, according to data gathered by automotive dealers' group FADA. Euler Motors has registered vehicle orders of over 9000 EVs from retail and ecommerce. As India moves towards sustainable mobility, EVs are taking centre stage, led by a thriving EV ecosystem led by start-ups as well as government support and incentivization in the sector. Several legacy players and VCs are investing heavily on powerful vehicles, for EVs. Further a growing surge in fossil fuel prices, is skewing consumer interest towards EVs and the market is buoyant with demand. EVs will be mainstream, in the coming years, given their lower TCO and maintenance benefits over ICEs. Dr. Arunachalam: The e-commerce segment is certainly the leader in driving the change from gasoline to Electric vehicles. They already have been deploying 2W, 3W, small, and medium commercial vehicles in their last-mile delivery segment and with their volumes expected to grow four times by 2030, the sector is expected to add over 2,00,000 new EVs within this segment. India is already one of the largest markets for EVs with the largest EV fleet corporate commitment. Most e-commerce companies have already committed to a 100% EV transition by 2030. This helps in creating a consistent demand and manufacturers can focus on Product Quality and viability.

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What is your take on current government policies towards the EV segment? What more could be done? Uday Narang: Automotive consumer behaviour is highly responsive to governmental policy incentives and regulation. Smart policies could speed up EV adoption. The result could lead to a transition to green manufacturing, competitive strength and long-term reduced costs of transportation ownership for the average consumer. The government, not just only at the central level with its PLI Scheme, FAME II policy, but also at the state level has been very supportive towards the EV segment. The government can help more in infrastructure government for EVs by providing subsidies to help not only the Electric Vehicle OEMs but also providing sops to EV Component makers such as battery, transmission, motor technology, etc. Lastly, I would like to add, The government should set an example by completely changing its ICE engine fleets to EVs across segments from Garbage trucks to its fleet of government official vehicles. SK Jain & Manvi Jain: The Government of India and most of the state governments have been proactively providing impetus to the uptake of EVs and commercial-EVs with focus towards clean public transport. The Central Government has lined up multiple incentives towards encouraging the ecosystem to manufacture EVs, build domestic capabilities for the EV batteries and subsidies to counter the high-cost entry-barrier for the retail customers. On the other hand, state governments have rolled out lucrative schemes for manufacturing and registration of vehicles to encourage citizens to contribute towards clean mobility. Such multi-level benefits to the manufacturers as well as customers will go a long-way in shaping the industry to leapfrog the sector from its nascent days to an ideal EV ecosystem. Vani Rikhy Mehra: There has been a constant push from the central and state governments on EVs, which is encouraging to see. Policies and incentives continue to expand, which were evident in our Union Budget announcements as

well. We certainly need this momentum to continue to drive mass EV adoption, and manufacturing in the country. The industry needs support from the government to help create an indigenous battery manufacturing ecosystem and be self-reliant in the coming years. The PLI scheme for advanced chemistry cells will be crucial to make batteries localized. Dr. Arunachalam: NEMMP (National Electric Mobility Mission Plan) certainly offered some objectives, but the real push did come via the FAME-I & FAMEII policy, which has been certainly supporting the development of the right products, making certain the benefits for short and long terms are available to both the manufacturers and the consumers. Post the Central Government’s plan, state governments have devised their plans and policies to accelerate adoption. PMP (Phased Manufacturing Plan) is certainly guiding the industry in setting up the right infrastructure across the length and breadth of the country. Besides the big-ticket announcements, the minor benefits offered in terms of waiving off Road tax and permission to ply across the clock irrespective of restrictive hours have been a major USP. The target of achieving 100% e-mobility by 2030 will certainly need further investment in Product development, Charging Infrastructure, and more innovative business models. We do feel a further push in terms of Investment via the PPP model shall do wonders for this objective.

COVER STORY

USERS’ PERSPECTIVES How do you view the EV landscape shaping up in the country? Samrat Sehgal, Head – Supply Chain, Dabur India Ltd.: While the EV space is still at a nascent stage in India, it is developing at a fast pace. While, on the one hand, there are many OEMs like old auto companies working on EV development in the country, at the same time there are start-ups entering this area. Companies are also working with customers in putting a lot of R&D to improve the models. We, at Dabur, are committed to move ahead with early adoption of these green vehicles in our supply chain for last-mile distribution. Transportation is one of the major pillars of the FMCG industry with hundreds of vehicles being used for distributing everyday-use products across the length and breadth of the country. Vehicular emissions are one of the largest contributors to pollution and EVs are the future to not just keep pollution levels in check but also reduce our carbon footprint, as a nation. It is a matter of great pride for Dabur to take the lead in driving low emissions transportation in the FMCG industry. Dharashree Panda, Director, Sustainability, Flipkart: The electric vehicle adoption has accelerated over the last few years due to concerted efforts from the industry, government and the ecosystem partners along with greater innovation and interest in the space. From initiatives such as Faster Adoption and Manufacturing of Electric Vehicles (FAME I, II), EV policies rolled out by several states to commitment from various manufacturers and large retailers, these initiatives have helped in driving interest and adoption for both commercial and passenger electric vehicles. E-commerce, particularly, has taken

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the lead in the transition to electric vehicles through the creation of a green supply chain which will play a significant role in making inroads into the farthest corners of the country for EVs. The commitment by various e-commerce companies in India is helping build an ecosystem for EVs, allowing for greater innovation and reducing costs, thereby positively impacting the industry. The transition to EVs will also help make a significant dent on carbon emissions while contributing to India’s efforts towards reducing its carbon footprint by half in the next decade. Dr. Arunachalam: We are in the right direction towards faster adoption of EV mobility. When the initial plans were proposed for EVs through the NEMMP (National Electric Mobility Mission 2020), there were certainly apprehensions on how the policy shall resonate with the masses, but FAME-1 & 2 (Faster Adoption and Manufacturing of Electric vehicles) made certain all such apprehensions are addressed. The country now feels ripe for EV adoption with a growing need for mobility. The three main elements that are driving this landscape is the increased demand for EV vehicles both for goods and passenger travel, Supply cost efficiency, and the right ecosystem framework supported by businesses and respective Central

and State government. At IBOB, we are steadily promoting EVs to our customers and to be honest, the response has been very forthcoming. Anjalli Ravi Kumar, Chief Sustainability Officer, Zomato: The EV landscape is very nascent at the moment, though we do believe with the government's push to strengthen the much needed infrastructure support, and development of safety protocols and demand incentives – it's all moving in the right direction.

How are you working on its EV fleet and what are the strategies in place? Samrat Sehgal: Dabur India Ltd has announced plans to induct a fleet of 100 Electric Vehicles in its supply chain for last-mile product distribution within this year. This would make Dabur the first domestic consumer goods company to have a fleet of electric vehicles for distribution, helping the company move closer to its mission of achieving Carbon Neutrality in its Operations. The first batch of the new Electric Vehicles has been inducted into its fleet in all regions and have commenced deliveries across key cities in the country. All the 100 vehicles would be inducted within the next 12 months across the nation. We have a three-pronged strategy,

Dharashree Panda, Director, Sustainability, Flipkart

We see tremendous growth opportunities in electric freight mobility from a greener supply chain perspective, which will play a key role in building a robust supply chain for the future. These efforts will help us meaningfully contribute towards electric mobility by reducing our dependence on internal combustion engine-led vehicles while bringing cost efficiencies for the ecosystem in the long run. 31

COVER STORY wherein we are working with OEMs and participating in the Beta version trials of these vehicles. Our partners are also deploying fleet directly by buying already available models. Besides, we are partnering with aggregators who are offering such vehicles. Dharashree Panda: According to a report by the World Business Council for Sustainable Development (WBCSD) titled ‘Advancing electrification of e-commerce deliveries in India’, a 100% adoption of EVs in e-commerce deliveries in India by 2030 could avoid 44% of the total CO2 emissions caused by their conventional vehicle counterparts and reduce consumption of 30 billion litres of fossil fuels per year. As a responsible corporate citizen, Flipkart understands the importance of adopting EVs in its vast supply chain and has initiated various measures to increase its adoption across the value chain. Our journey towards electrification began in 2017 with pilot projects in major Indian cities, first with electric bikes (e-bikes) and subsequently with electric vans (e-vans). The pilot phase has had its challenges and learnings, but it gave Flipkart the confidence to commit to an ambitious EV100 target. Flipkart understands the relevance of electric mobility in achieving both business and sustainability goals and is committed to paving the way for greater adoption of EVs across the country. Flipkart is one of the first e-commerce companies in India to commit to transitioning to 100% electric vehicle (EV) fleets by 2030 and has signed up with the Global EV 100 initiative. The company is well-positioned to boost EV adoption across the country including tier-2 cities and beyond, by working with ecosystem partners to deploy 25,000+ EV fleets by 2030. To achieve the milestone, Flipkart

is working with several startups and national OEMs and ecosystem players to co-develop electric vehicles for e-commerce deliveries. Currently, Flipkart has more than 2,000 + EVs in its logistics fleet and has already deployed EVs in multiple locations across cities including Delhi, Bangalore, Hyderabad, Kolkata, Bhubaneswar, Guwahati, and Pune, to name a few. The electric fleet includes 2-wheeler, 3-wheeler, and 4-wheeler vehicles designed and assembled in India, helping boost local innovation and economy. Dr. Arunachalam: As we advent into revamping our fleet operations, the initial focus has been on focussing EV mobility for our Last mile operations. The product range currently suits our various E-commerce and retail customers, delivering within the B2B and B2C segments proportionately. The next step is to enhance relationships with business models that promote battery leasing, battery swapping, charging infrastructure, and smart grid solutions. There is also a lot of focus on connecting existing software systems from warehouses, route scheduling, workforce management, and others to the central charging infrastructure software, this shall develop a holistic Return to Investment ratio and will keep the sentiments positive. Anjalli Ravi Kumar: We are locking in supply through strategic partnerships with players like JioBP, Zypp, Yulu, etc., for the delivery partners that engage with our platform. Once we establish reliable supply availability, we work on demand generation by pitching benefits of EV to delivery partners.

What are the tangible benefits you foresee as far as enhancing sustainable expanse is concerned?

Anjalli Ravi Kumar, Chief Sustainability Officer, Zomato

The EV landscape is very nascent at the moment, though we do believe with the government’s push to strengthen the much needed infrastructure support, and development of safety protocols and demand incentives – it’s all moving in the right direction. 32 CELERITY July - August 2022

Samrat Sehgal: As a Responsible Corporate Citizen, Dabur is recognized for its commitment towards environment sustainability. In line with the Government of India’s focus on safeguarding the environment and promoting a greener India, Dabur has taken the lead in engaging electric vehicles in our operations to replace fossil fuel-powered vehicles, thereby reducing emissions and protecting the environment. Electric Vehicles are an ideal solution to replace conventional fuel vehicles since they are energy-efficient, green and environment friendly. I am confident that this move will also help us propagate the use of electric vehicles even in the hinterland, helping India achieve its Green Energy Mission faster. Dharashree Panda: Transitioning to EV is a part of Flipkart Group’s larger vision towards sustainability for the organization and for the ecosystem and has taken numerous measures for its seamless integration into the group’s supply chain. Today, we have over 2,000 vehicles playing across our various supply chains bringing efficiencies across the value chain. While helping reduce our carbon footprint, EVs offer advantages such as a reduction in noise and onroad vehicular pollution, reduced cost of operations in the long run and driving inclusivity for riders since these vehicles are usually less difficult to manoeuvre. Dr. Arunachalam: It is too early to grasp tangible benefits. As a society and as an organization, we must be realistic about the transformation we are undergoing. Five years ago, it was unrealistic to ascertain that we would be doing Lastmile deliveries via an Electric Commercial vehicle, today we can boast that approx. 10% of our fleet is EV in a few of the operations and there is a thunderous demand from all customers to initiate at the earliest. Considering EVs aren’t restrained by restrictive movement timings unlike ICE vehicles, it helps in easing deliveries with reasonable Turn Around times. Although, as the demand picks up and the technology enhances, we are certain the cost for per Km run, or Per Kg movement shall see a dip by approx. 25-30%. Plus, the environmental benefits are unparalleled.

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Anjalli Ravi Kumar: We are cognizant that the benefits of a sustainable business far outweigh the cost of transition. Transitioning to EVs for instance, will not only have environmental benefits, but will also reduce delivery costs with time owing to the fluctuating fuel prices. We also believe that EV bikes and low-speed scooters will enable the participation and improve productivity of diverse segments - such as women and existing cycle owners - in the mobility economy. This is because E-bikes and low-speed scooters do not require a license and e-bikes, in particular, have a pedal assist option which reduces the manual effort required.

Are there any challenges that you can comprehend in your journey towards deploying sustainable movement of goods across the length & breadth of the country? If yes, how do you plan to circumvent them? Samrat Sehgal: While there are many OEMs like old auto companies and some start-ups have also entered this area,

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most of the EV models existing today are in various phases of testing or are facing customers for the first time. Their load carrying capacity is the biggest challenge. Also, the non-availability of battery charging facility across the nation is another issue, besides temperature sensitivity. The cost of EVs itself has to come down as today it is prohibitively higher than the traditional vehicles. Dharashree Panda: As an e-commerce marketplace, Flipkart delivers millions of shipments every month to over 400 million customers across the country. From the jungles of Gir in Gujarat to 5,000 feet above sea level in Silliguri, West Bengal, Flipkart through its supply chain arm eKart fulfils customers’ requirements, creating numerous opportunities for supply chain ecosystem players, particularly transportation partners. To electrify such a large fleet of vehicles, catering to the needs of the customers across the country, it requires a concerted efforts from the ecosystem partners and commitment on the table to be able to bring about this change. However, there were few pertinent

problem statements such as vehicle availability and deployment, optimal fleet ownership models and charging infrastructure ownership and utilisation, which needed to be solved to be able to scale this initiative. Flipkart worked with ecosystem partners to co-develop electric vehicles to suit the needs of an e-commerce supply chain. Secondly, the absence of long-term contracts impedes visibility on returns for vendors and managing multiple small-scale EV vendors across states remains a concern for e-commerce firms. Additionally, limited vendors in tier-2 and tier-3 cities in India limit the scale. To overcome these challenges, Flipkart focused on supporting local EV vendors to initiate early adoption and gain on-ground experience. As e-commerce as an industry operates on variable contracting, Flipkart was able to provide assurance of assured number of vehicles to its partners and increase adoption across the workforce by training and educating its riders on the advantages of riding EVs. Through concerted efforts by Flipkart and the ecosystem partners, the company was

COVER STORY

Samrat Sehgal, Head – Supply Chain, Dabur India Ltd.

Dabur India Ltd has announced plans to induct a fleet of 100 Electric Vehicles in its supply chain for last-mile product distribution within this year. This would make Dabur the first domestic consumer goods company to have a fleet of electric vehicles for distribution, helping the company move closer to its mission of achieving Carbon Neutrality in its Operations.

There is also limited charging & swapping infrastructure - distance range of EVs is relatively limited, and there currently isn’t sufficient infra to charge & swap.

able to overcome several challenges to successfully deploy EVs across its supply chain. Dr. Arunachalam: The e-cargo mobility sector is still nascent, there have been strides in the Small Commercial vehicle segment up to 1-1.5 MT, however, the mid-mile and long-haul movements still require the right product and the right infrastructure. As a service provider, we do feel that the demand for EV products is good and as the industry evolves, we shall be ready to support it in terms of delivery and performance. At IBOB, we are working with various Policy experts and Planners to be able to align with the newest technological products and scope their use-case benefits to our various customers. Anjalli Ravi Kumar: When it comes to last mile delivery, the challenges in deploying EVs are as follows:  Ownership/High switching costs: We don’t own fleets. The delivery partners own or rent their vehicles directly, which they use for dual purpose - personal and to earn supplemental income through gig engagements. Their vehicles are their assets, viable for 10-15 years - so transition to EVs isn’t appealing to them on an immediate basis. 

Range anxiety: Delivery partners are

not confident around the distances they can travel with full battery and worry about the scooter going out of charge mid delivery 

Nascent ecosystem: The availability

of rental EVs is limited, which puts hard limits on immediate scale up.

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

High price point: There is a vibrant

second-hand market for petrol bikes, which are substantially cheaper than EVs 

Fear of usage: The news about electric vehicles catching fire has created doubts in the minds of delivery partners

How critical are supply chain and transportation pillars in the way of achieving carbon neutrality vision that you have set out for your company? Samrat Sehgal: The supply chain and transportation are the most important pillars in Dabur's Vision to achieve carbon neutrality. EV adoption will be critical and hence we have decided to be among the first movers while the market is still in a nascent stage. We understand this and have set a clear and aggressive roadmap for ourselves. Our participation in the developmental journey of EVs even at a certain cost will be our service to the nation and mankind. A strong Environment strategy not only enhances the brand reputation but will also play a key role in building consumer loyalty. Every action at Dabur is a step towards a sustainable and healthy future. This is one more step forward in this direction. Dharashree Panda: As one of the first e-commerce companies in India to join the Climate Group’s EV100 campaign and commit to responsible sourcing, we

are proud to have taken audacious steps across the board towards achieving our sustainability vision. Supply chain forms the backbone of e-commerce, delivering millions of shipments to customers across the country and hence becomes an extremely important element in Flipkart’s sustainability journey. Our collaboration with the Climate Group’s EV100 initiative, to transition 100% of our supply chain fleet to EVs by 2030 is a testament to our commitment to longterm sustainability across value chains. We see tremendous growth opportunities in electric freight mobility from a greener supply chain perspective, which will play a key role in building a robust supply chain for the future. These efforts will help us meaningfully contribute towards electric mobility by reducing our dependence on internal combustion engine-led vehicles while bringing cost efficiencies for the ecosystem in the long run. Dr. Arunachalam: As we know, carbon neutrality vision isn’t just about IBOB or the Customers of IBOB, this is a global pledge, and every country and every business is trying to play its part. We can set things right for our future generations. Just to give you a perspective, 100% EV adoption just within the Indian e-commerce domain, could prevent 44% of total CO2 emissions caused by equivalent ICE variants which is equivalent to 76 million tons of CO2 emission per year, reduce the consumption of fossil fuels by 32 billion liters per year. We are grateful that we are going to be part of this change, to be able to redraw the future for us and our future generations. Anjalli Ravi Kumar: Over 95% of Zomato’s emissions are classified as Scope 3 and within that category, Packaging and Transportation are the main sources of emissions. Electrifying our fleet can help us reduce our emissions from delivery operations by an estimated 27%, which implies transportation is a significant contributor to our vision of sustainable growth.

INTERVIEW

FLOATING SOLAR POWERING A SAFER FUTURE

“We aim to create a co-existing ecosystem that does not disturb our flora and fauna and at the same time addresses the country’s energy needs. With floating solar, we can achieve our objective effortlessly and efficiently. The Indian Government has an ambitious target of deploying 450 GW of renewable energy by 2030. With this, there are projects that are at various stages of development and a lot more are being tendered. We are expecting at least 2 GW of floating solar project by 2023,” shares Mr. Srinath S, Head – Procurement & Supply Chain, Ciel & Terre India, during an exclusive interview. Kindly help us understand the value chain of the industry you are operating in? Ciel & Terre India was established in 2018 as a subsidiary of Ciel & Terre International, the global leader in Floating Solar with 290+ projects executed in 32 countries, 1.23+ GW floating project portfolio, and has 40+ manufacturing lines in 5 continents. Specialists in the integration of photovoltaic systems, Ciel & Terre®️ opened the doors to a new market: floating PV, driven by a need to produce clean energy in a more efficient and land-saving way by introducing the first patented and industrialized water-

based PV concept HYDRELIO®️ in India. This solution consists of installing PV modules on inland and artificial water bodies to smartly produce energy. The floating PV group’s activity is fully integrated, including technical innovation, manufacturing, project development, and design. Ciel & Terre India has its manufacturing unit in Kerala, contributing to the Make in India, Made in India mission. Through this, Ciel et Terre creates job opportunities and marks its participation in the economy. In 2021, Ciel et Terre launched its R&D hub to support global research and innovation. We aim to create a co-

Mr. Srinath is instrumental in maintaining a smooth supply chain for floating solar projects in India. To his credit, he has organized supply execution of 95 MW floating solar projects supplies for geographically different locations. He handled US$5.5 million value procurements till date and clocking towards upcoming projects and formulated product localization with net savings of Rs6.5 million in one of the projects supply. In his 16+ years of experience, he has aced areas including but not limited to Strategic Sourcing, EXIM operations, Transportation, CHA operation, Inventory control, Material Management, Procurement, Product Quality management, Budgeting and monitoring, Spend Analysis and Cost optimization.

existing ecosystem that does not disturb our flora and fauna and at the same time addresses the country's energy needs. With floating solar, we are able to achieve our objective effortlessly and efficiently.

Kindly brief us on the complexities of supply chain in the industry you

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INTERVIEW operate in? How do you manage them? Floating solar is still an emerging segment and involves a lot of detailing at each stage of its development. Our designs are project specific, hence majority of our products are made to order with specific raw material grades adhering to our standards to ensure the longevity and durability of the products for 25 years. By onboarding the right business partners with required expertise and following strict quality control protocols and delivery schedules, we are successfully implementing and delivering our projects with applaudable results.

Kindly share with us one of the most challenging projects managed by you. Every project that we commit to is unique and challenging. Our ongoing project is one of the most challenging projects – A 74 MWp floating solar project in Kerala. We dived deep into the market to analyze vendors’ expertise in supplying the goods with required specifications. There were vendors who found our requirements new and challenging. Hence, we involved ourselves in educating and sharing our knowledge to vendors in the Indian market to help them understand our requirements. We have onboarded close to 36 new vendors, which account for up to 22% of our database, for the execution of the project along with our already existing partners.

Brief us on the changing procurement landscape and your strategies at Ciel et Terre? Floating solar was a relatively new segment when we started back in 2018. We have come across vendors who were hesitant to supply the materials without upfront payment. We are now established in the Indian market and have emerged as one of the best companies to be associated in the Floating solar sector because of our know-how on the product, innovation, knowledge sharing, prompt payments, and supporting our vendors to achieve the deliveries by providing necessary technical knowledge. We treat our vendors as business partners rather than suppliers. We explore and provide opportunities for our business partners (vendors) on any new product development, this ensures

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our business partners are engaged with us on full scope and understand our requirements and deliverables. We engage based on volume of business for any given project and lock the prices for the duration of project or until the final supplies are made.

How is the fast-emerging alternate energy expanse slated to change the business dynamics? How are you prepping us to meet the burgeoning demand? What’s your supply chain strategy? The Indian Government has an ambitious target of deploying 450 GW of renewable energy by 2030. With this, there are projects that are at various stages of development and a lot more are being tendered. We are expecting at least 2 GW of floating solar project by 2023. To meet this demand at its required pace, we forecast our requirement based on our projects at regular intervals to our business partners. This enables our business partners to maintain sufficient inventory or the raw material, which benefits in lesser turnaround time on supply once we place the orders and we have the necessary supplies on time.

How do you maintain a smooth supply chain for floating solar projects in India? A lot of strategic planning is being done as soon as the project is onboarded and the BOM is released from the engineering Team. We ensure to carefully analyze the procurement lead time by

studying and understanding the market dynamics, availability of resources and the bottlenecks to be expected. This thorough research helps us to be prepared for any kind of challenge and we have the alternative solution in hand ready with us while maintaining the quality of the deliverables. Also, we follow our specifically developed RISK MITIGATION strategies, all thanks to our experienced and dedicated team in supply chain.

The current global dynamics have a greater impact on the global supply chain. How does it impact your business? What has been your action plan in mitigating supply chain risks? It is true that the recent global affairs are impacting the flow of supply chain in India. Higher freight charges, non-availability of space on vessels, Blank sailings, long waiting periods at transshipment ports are some of areas affected. Although this has had less impact on our business, as we had foreseen the situation way ahead even before the first covid lockdown and localized the products with cost optimization, which we were dependent on in the overseas market. This is also a move to support the Indian government’s ‘Make in India, Made in India’ mission.

How have been the last 2 years in terms of circumventing supply chain challenges? Inflation and the sudden surge in raw material prices were some of the biggest challenges that we have faced.

INTERVIEW Localization, choosing correct business partner and our risk mitigation protocols were handy in overcoming these challenges in the past two years.

Kindly share with us export-import mix of Ciel et Terre and how have survived the challenging times? What were the innovations made in reaching your customers in the global territory? As we started sourcing locally, our dependency on imports has come down to NIL. Due to supply chain disruptions the businesses in China moved out. We at Ciel & Terre India identified the opportunities and promoted exports of these localized products. We have also published our pricelist to our subsidiaries, and it has caught their interest quite well. We are soon aiming to become a major supply hub for our subsidiaries spread across the global territory.

What are the key elements that will help in securing the supply chain for solar projects in the long run? With climate action being stressed upon and the world running out of fossil fuels, renewable energy turns out to be a fine answer. Solar energy is an exceptionally reliable and efficient source of energy. However, to maintain its consistency and durability, it is important to concentrate on the quality of the product. I believe optimal cost with no compromise on quality and timely deliveries will play a significant role in securing projects. Interests from public and private investors can be beneficial as it is a win-win situation – renewable energy

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attracts good returns and helps in the fight against climate change.

You have been a part of 3PL landscape for quite some time. How do you weigh in both the sides of the business – being the user as well as the supplier? It is two different experiences. In 3PL, we only see the movement of inventory based on the order. Being the actual user, we witness the product right from scratch – the design, development, manufacturing, mass production, quality control and the end use. The entire lifecycle of the product is right in front of us, giving us confidence in our product.

What would be your advice to new age supply chain professionals in tiding through tough times? Supply chain is a challenging yet exciting profession to be in. There are going to be fresh challenges every day, wherein your skills and strategies will come in handy. These challenges can mold you into a strong expert in future. For example: to reduce the price, many use conventional methods to achieve this via negotiation with suppliers resulting in either spending lot of valuable time on follow ups and discussion during finalization and until the supplies are complete. Price is important but it should not be the driving factor. We can look at other areas, which can result in cost optimization like design, raw material used, manufacturing process to reduce the overall cost of the product. Do not push the vendor too much on cost reduction wherein the business will no

longer be interesting to vendor, and this might result in no value-added services from vendors during supplies if we engage after all these. Be strong and have your strategies planned. Master the art of negotiation, planning, trouble shooting and problem solving, cost accounting skills, and most importantly, understand the requirements and the momentum of the project/product.

What’s your take on the government policy interventions on alternate energy projects and how have they impacted the value chain of your business verticals? The recent government policy interventions have not had a direct impact on our business verticals as we are not involved in module procurement. Yet, the recent regulation on ALMM has caused delay in module procurement, resulting in delayed project implementation. For EPCs, the change in BCD on solar module imports has resulted in higher landing cost of the imported products. This has also led to a delayed timeline for many projects.

What are the demand opportunities across the supply chain that you foresee over the next 5 years? Due to current trade volatility and huge disruption, we need seasoned professionals in supply chain. I believe the industry is geared up to accommodate this demand with the introduction of innovative technologies, digitalization, working platform and academic qualification. Supply chain is industry independent. Today’s younger generation is more enthusiastic and inclined towards choosing supply chain as their profession. Supply chain acts as a bridge between all the departments. Once a male dominant segment, over the last decade, supply chain has attracted more female professionals as well. Supply chain leaders are already a backbone in their respective industries and in coming years they will decorate newer positions and empower upcoming professionals, because at the end, supply chain is a teamwork requiring lot of bonding and understanding between the team.

PERSPECTIVE

Global Disruptions and

SUPPLY CHAIN RESILIENCE Global supply chains have presumably faced the toughest of times since last 2.5 years. First it was braving the COVID-19 pandemic, which was later followed by global events such as Suez Canal blockage, Ukraine conflict, and China shutdown. While companies have been brave enough to fight these demons from time to time, but are we in a position to make our supply chains disruption-proof, yet? In extension to the ongoing developments, we reached out to supply chain leaders of companies and analysts for their analysis of the situation and how are they devising supply chain strategies for their respective organizations to tide the tumultuous times. Here’s what they said…

Chandan Shirbhayye, AVP & Head — Supply Chain, Aragen Life Sciences

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Krishna Barad, Partner / Customs & International Trade, BDO India LLP

Rohan Shah, Manager – IDT, BDO India LLP

Yogesh Sarin, Director – Supply Chain South Asia Operations, Dell Technologies

PERSPECTIVE What has been the impact of the prolonged Covid-19 pandemic and other global events such as Ukraine – Russia war on supply chain matrix?

Yogesh Sarin, Director – Supply Chain South Asia Operations, Dell Technologies: Covid crippled the supply chain and then the war in Ukraine knocked it to its knees. The impact was sudden and widespread that did not leave many businesses unaffected. As an integral part of value chain, both within and across international borders, big disruption happened in businesses in getting products and services to customers. While pandemic led to shut down of borders with very limited transportation and travel, war paralyzed the commodity supplies. Chandan Shirbhayye, AVP & Head — Supply Chain, Aragen Life Sciences: Pandemic started in early 2020 and by end of 2020, most of the supply chains had adapted to pandemic related challenges and have been able to mitigate the impact as compared to initial pandemic days. Certain unexpected global events such as Ukraine Conflict, Suez Canal blockage & China Shutdown impacted the recovery adversely. Crude prices, Domestic Currency Fluctuations & demand -supply imbalance has resulted in prices of some of the input materials escalating and increasing supply uncertainties. Supply chains with local dependency would be relatively less impacted but globally depended on supply chain would have faced cost & timelines impact. Krishna Barad, Partner / Customs & International Trade, & Rohan Shah, Manager – IDT, BDO India LLP: Global supply chain matrix was already affected on account of COVID-19 pandemic. However, just when global supply chain was slowing starting to recover, Ukraine – Russia war has added further fuel to the fire. Due to war, there has been substantial surge in prices of oil and gas which is directly bound to affect supply chain matrix globally. Further, there has been considerable rise in air cargo and shipping line charges which has resulted into pressure on supply chain matrix globally. Further, Ukraine and Russia being global exporters of agricultural products, minerals, etc., have

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duly affected supply of the said products across the globe.

There have been major air & sea freight disruptions because of the same. What have been the challenges related to these?

Yogesh Sarin: These disruptions led to obstructions for international trade and transportation though differently across air, freight and sea sectors bringing a meta-uncertainty. Dead freight agreements with airlines had little significance since there were no flights in the Air. Lockdowns & war led to various shipping routes being cut, logistics firms suspending services and air freight rates skyrocketing. As a consequence, container availability, congestion at ports, custom clearance delays and crew crises became regular. Chandan Shirbhayye: Most of the freight forwarders & 3PL logistics partners had already started factoring in Pandemic related costs in their workings as they had to implement lot of additional activities as compared to pre-pandemic circumstances. Added to it the capacity crunch, skewed demand & rerouting of network also resulted in lot of blank sailings, congestion at various points & non-availability of crews which further impacted the logistics operations. Increased Crude prices have resulted in fuel cost going up which compounded the cost challenges. Overall, this created uncertainty in terms of timelines and cost of logistics escalated to unprecedented levels. Krishna Barad & Rohan Shah: RussiaUkraine war has severely disrupted the air and sea freight across the globe. Several air and sea routes have been cut down due to which carriers are compelled to resort to longer routes than usual ones which has led to more spending on fuel and subsequently resulting into higher air and sea freight charges. Further many ports have shut down across globe due to war, resulting into congestion into ports and worsening the global supply chain.

What has been your short time strategy to work around these disruptions and what are the longterm implications and challenges?

Yogesh Sarin: Majority of us including our customers moved to ‘work from home ‘environment. Their primary tools of work had to be supported by us which in most cases became a lifeline for continuity of business. Digital engagement accelerated tremendously leading companies to adjust to it. Unforeseen events are to be always expected. The scale of the event might vary, but these incidents have ripple effects on supply chains and put the spotlight on the need for granular visibility and network design. There is an obvious learning to have systems in place that react to such events so as to reduce the impact and hasten recovery. May not be unique but simple options were effective. Alternate and multimodal routes worked well to keep stock moving. Even charter planes had to be deployed until some freighters were operational in limited zones. Customer expectations had to be reset to be more realistic to honor commitments. They had to redesign logistic processes with partners. It was never easy for partners to balance the care for staff health while simultaneously seeking permissions for operating sites including exception approvals during lockdown to serve critical essential customer deliveries for hospitals, basic government services and even stock exchange. Gratitude, respect & admiration for all our supply chain partners, for support during this crisis, elevated to a an unprecedent level. Chandan Shirbhayye: We, at Aragen, had already embarked on journey of technology adaption in the last few years. Even during peak pandemic days, we were able to operate effectively due to digitalized and integrated processes. Employees have always been at core of Aragen values and due to various initiatives related to pandemic prevention as well care taken of affected employees during the pandemic days, we were able to have most of our employees contributing towards their responsibilities in engaged and efficient manner. We also have been driving lot of supply partner engagement programs, resulting in having a highly engaged partner base, which supported us during the pandemic and other disruptions. We were able to work on various risk mitigation initiatives such as alternate/new vendor development,

PERSPECTIVE backward/forward integration, longterm contracts & also extended support to various needs of our partners proactively. We also collaborated with our peers in Industry for timely statutory approvals through joint representations to relevant authorities. Supply chains will have (most of them already are in advanced stages) to consider risk also as a decisive factor with equal weightage as given to three elements of Triple Constraints /Iron Triangle (Cost, Delivery & Quality). Technology adaption has been a key driver and with AI/ML, we have to enable proactive decision making and deeper visibility within supply chain layers. People and supply partners will always remain crucial for success of any supply chain, so ensuring highly engaged and ready to perform People and Partner base through various Upskilling and Reskilling initiatives will have to be on agenda of supply chains. Lastly developing a local as well as circular supply chain to the extent possible can go long way in mitigating risk and uncertainty, with government being reciprocative and driving Atmanirbhar Bharat, this can be accelerated further.

What can be the best worked strategy to work around these disruptions and what are the longterm implications and challenges?

Krishna Barad & Rohan Shah: Few of the best worked strategies around supply chain disruptions could be to identify alternate route for supply, identify alternative suppliers for urgently needed goods, building up inventory to address short term supply chain issues, invest in data and technology to identify gaps and keep update on recent developments, etc. However, uncertainty due to war is likely to end over time. At the same time, supply chain operations can be affected due to number of uncertain factors over the globe in future. It is imperative for global players to stay prepared to combat any challenges surrounding the supply chain in future. Flexibility and agility will be key in long run to navigate through supply chain resilience in future.

In your opinion, what are the three things that India should do to pick on the opportunity that these

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times and presumably some global superpowers’ policies have created for us globally. Yogesh Sarin: To me, these are the three key aspects that India should possess: 



Manufacturing Hub: India has clear potential to be the manufacturing hub for the world. Focus needs to be on skilling workforce & public private partnerships Policy: Reducing trade barriers and offering more incentives like Production Linked Incentive (PLI) & semiconductor India program that aims at development of a sustainable semiconductor and display manufacturing ecosystem in India, would be a game changer. Embrace emerging technologies with focus on sustainability.

Chandan Shirbhayye: We believe, many industries across the world are considering India in their mitigation strategy to address the risk arising due to various global developments and even the government has been extending necessary support to industry. Some of the initiatives, which will improve Indian industry performance, such as GST, LEEP (Logistics Efficiency Enhancement Program), NSWS (National Single Window System), PLI (Production Linked Incentives), RoDTEP (Remissions of Duties and Taxes on Exported Products), SWIFT (Single Window Interface for Facilitating Trade), AEO (Authorized Economic Operator), Faceless Assessment, Digital India, Start-up India and many more schemes are already being driven by Government of India in partnership with Industry. India has already been global exporter for agricultural Items, ITeS, Pharma/ Life Sciences and gradually improving on other areas such as electronics, automobiles, etc. We need to tap into innovative and value-adding solutions across Industry that are adaptable across the world rather than providing only basic solutions. India has huge potential and Industry will have to take the lead and partner with government in ensuring that we convert this opportunity into economic growth. We have improved a

lot on Ease of Doing Business rankings due to various initiatives taken and placed India as preferred destination for Businesses. To precisely mention three areas, we need to continue to drive the improvements in below areas, which will help India to gain the logistics/supply chain leadership globally…  Upgradation of infrastructure (Power, Logistics connectivity, etc.) including Digital Infrastructure across India to have uniform growth opportunities  Simplification, rationalization & integration of compliances between various statutory and regulatory bodies of states as well as ministries  Industry Ready Talent availability across the industries and levels. We have young population, which can be a big booster for Industry, but most of them are not Industry ready or concentrated in Industrial Hubs only. Krishna Barad & Rohan Shah: India should try to pick up untapped markets in global exports, boost ties and relations with other countries and make right kinds of policies and reforms for increasing FDI.

What are the pluses and minuses that are in India’s favor to gain the logistics / supply chain leadership globally?

Yogesh Sarin: The merits that are in India’s favor include stable economy, business reforms favoring Foreign Direct investments and a huge consumer base. On the other hand, there are demerits as well, which include ease of doing business that can be better. We still have high tariffs. Lastly, we still have miles to go in terms of infrastructure development to strengthen our supply chain supremacy. Krishna Barad & Rohan Shah: As global supply chain stands hampered due to COVID-19 pandemic and Russia-Ukraine war, India can use this opportunity to be a preferred business destination. Diverse corporate environment, skilled, inexpensive labour can contribute to the country’s emergence as an international supply chain hub. However, some existing bottlenecks such as poor infrastructure, regulatory hurdles, logistical delays, etc., are preventing India from becoming a trusted supply chain leader globally.

PERSPECTIVE EDITOR’S NOTE

Plus ONE Strategy – A Silver lining for Indian Supply Chain? While Covid-19 had already put enough spotlight on our dear neighbour China, the prolonged supply chain derailment, has further amplified the importance of Plus One strategy for countries who have, for decades, been dependent on Chinese home-ground for manufacturing & trading purposes. Since the start of Covid-19 pandemic, global companies have been contemplating on finding a trusted alternative for business & EXIM. While these might be challenging times, India can successfully stake its claim as the prefect AIDE to global companies who are scouting for a promising manufacturing hub having seamless supply chain network. Is it any EASY task for India? Definitely not… but the telling signs are quite promising for us. Since more than 2.5 years, global companies who were highly dependent on China for their manufacturing & trade requirements, are on the lookout for alternative countries that can offer them – Ease of Doing Business, Global Trade Connect and a huge Regional Market Access (3-pronged agenda). While countries like Vietnam and Bangladesh might have grabbed the eyeballs on the first two points, India stands to score the highest in the last and the biggest point of a Huge Regional Market Access. In the last two years, we have seen global leaders like Samsung and Apple setting up manufacturing base in the country. This is not all… the existing giants in the country such as IBM, DHL and some semiconductor companies are prepping for the expansion and are in constant dialogue with the government officials for a smooth expansion roll-out. While this is the corporate side of the story, if the recent news is anywhere to go by, then the Central Government is already working on a strategy to emphasize on the above mentioned 3-pronged agenda to become the preferred business destination. In fact, the Department-related Parliamentary Standing Committee on Commerce recently suggested the Central Government leverage the ‘China Plus One Strategy’ for making India an alternative investment destination for major global companies that intend to substitute their China-dependent supply chains. The growing preference of companies located in major economies of Europe and the US to shift to other manufacturing bases than China provides a window of opportunity for India’s trade sector, which needs to be capitalized, suggested the committee in its 167th Report on Demands for Grants (2022-23) of Department of Commerce, Ministry of Commerce, and Industry. The Committee, headed by Rajya Sabha MP and YSRCP leader V Vijayasai Reddy, recommended that a policy measure to benefit from the strategy should be ‘devised, which should incorporate steps to ensure a business-friendly environment and best-in-class manufacturing infrastructure for the incoming investments. It further recommends that the government should endeavour to pursue “Free or Preferential Trade Agreements” or an interim and mini-trade agreement with countries that seek to invest in India under the ‘China Plus One’ strategy.

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CELERITY SUPPLY CHAIN TRIBE JULY-AUGUST 2022

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