Chairperson’s Note
KJ Somaiya Institute of Management Studies and Research is known for its ability to produce excellent managers and leaders in various fields year after year. This comes not only from a robust academic curriculum and faculty expertise but also from student driven initiatives. FORSE, the
operations committee is spearheading such initiatives in the field of operations to help students develop understanding in this field. Momentum is one such initiative that has been taken by our students to enrich that learning. The magazine is an attempt to engage readers’ on state of the art trends in field of Operations and Supply Chain Management My Heartiest congratulations to the team on bringing out this initiative of momentum. I hope that the readers will enjoy this first issue and supplement their knowledge and learning. Dr. J S Lamba
Faculty In-charge - FORSE Area Chairperson (Operations) KJ SIMSR, Mumbai
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Convener’s Note
Dear Readers, We at FORSE have been devoted to bring out excellence and build the acumen of the students in SIMSR by organizing various events surrounded by supply chain and logistics. FORSE started its journey in this academic year 2016-2017 with a brain twisting quiz contest - MindRipple. With a view to align the events with our vision, the team has taken efforts to design new events like an unusual operation's based treasure hunt and OpsTalk with Jugaadu Challenge to popularize the field of operations. Also Global Supply Chain Management conference - the flagship event of FORSE has attracted various industry experts to share their knowledge. The team has continued the legacy to explain the issues in supply chain network by organizing operations simulation game. We have continuously made attempts to bring the concepts of supply chain and logistics to our followers by weekly FB posts - OMGyan.
MOMENTUM is a similar attempt to bring enlightening topics and concepts in the field of operations, supply chain and logistics for our readers. It will contain the articles based across different themes in each issue. This issue has focused on the emerging technologies in supply chain & logistics. Stay tuned for upcoming issues with similar interesting themes. Keep Reading! Keep Learning! Atish Gharat Convener - FORSE
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Editors Note
Dear Readers,
“Learning is a treasure that will follow its owner everywhere” It gives us immense pleasure to bring you the first issue of Momentum. The business world has been evolving radically and it’s important that we adapt to this changing environment to keep ourselves competitive. The first issue of this magazine has tried to capture the magic of technology in the field of Operations. We have incorporated a broad spectrum of articles to help you understand the fascinating world of operations. Our cover story 3D printing in supply chain management cover the aspect of how the 3D printing technology will change the way we buy products and how will it affect organizations. Our next article will take you through the journey of e-procurement and help you understand the basics of it. Ever wondered how Internet of Things will change the way logistics companies operate, well our featured article will take you through that in detail And finally, we have something that will compel you to think about the future of transportation. “Driverless Trucks”. We would like to thank all those who have contributed to the making of this magazine and encourage you all to keep writing to us. Happy Learning Team Momentum
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About KJ SIMSR, Mumbai
K. J. Somaiya Institute of Management Studies and Research (SIMSR) was established in 1981 as a part of Somaiya VidhyaVihar with the objective of providing state of the art education in management and allied areas. The institute is consistently ranked among top 25 management institutes and top 10 private sector B-schools in India. The institute offers full time, part-time and
executive programs in Business Management along with Masters in Computer Applications and Doctoral Programs. All the programs are approved by All India Council for Technical Education, Ministry Of HRD, Govt. of India and the University of Mumbai. Apart from the regular programs the institute offers customized and industry specific certificate and executive development programs for government bodies, companies, defense personnel, and NGOs. In GHRDC CSR B-School Survey 2016, our Institute has been ranked as 1st amongst the Top Leading Pvt. B-Schools of Super Excellence and 2nd amongst the Pvt. B-Schools in the state of Maharashtra.
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About us FORSE- Forum of Operations Research and Supply chain Enthusiasts is the Operations Committee of KJ Somaiya Institute of Management Studies & Research, Mumbai. It was founded in 2014 to provide a platform for holistic development of business management students & transform them into responsible corporate with operational excellence & ability of quality execution. Value addition to SIMSR: For management students, FORSE aims to introduce the field of Operations management in a more attractive and interesting manner as compared to theoretical study, and give insights into the work profiles that are offered to Operations and SCM professionals. For students planning to specialize in different subject, FORSE is a channel to gain an understanding of the very important aspect of management - Operations. Students will be benefitted by the increased industry interactions, initiated by FORSE. Few of the measures to achieve this are organizing industrial visits, inviting experts for conducting seminars and workshops, etc. Being knowledgeable about the principles of Operations Management empowers a management professional to optimize process even in varied domains of Production, Finance, Marketing or HR. Thus, FORSE is one of the forum that ensures the all round development of a management student.
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Contents 3D Printing: The future of Logistics and Supply Chain
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Football and Procurement
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The Basics of e-procurement
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How can internet of things go Global?
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Driverless Trucks
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3D Printing: The Future of logistics and Supply Chain Article by Shashank Jain PGDM 16-18
The demand economy is disrupting every sector and those in the supply chain network and manufacturing fields must be more innovative than any ever before. 10 years prior, customers had to wait for days for their product to be delivered but now with the development of online business, customers are settling on their buy choices in view of how rapidly they will get their item. Organizations around the globe need to continually enhance and adjust to this change in order to stay in business. A noteworthy portion of the organization's income goes in dealing with its supply chain network exercises. A recent report by PwC led on organizations of all sizes and extensive variety of ventures from Europe, North America and Asia shows that supply chain network is one of the vital resources of the organization. Hence, managing supply chain is one of the primary objectives that results in significant cost savings to the company. Keeping this in mind to accomplish this goal, organizations are presently turning to 3D printing.
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What is 3D Printing? Envision that you need to sort out your book shelf and need a book rack for it. So as opposed to heading off to each shop around you and afterward making arbitrary figure of which rack would fit the best, you simply enter the measurements and the design in software and get the product. The magic behind this is 3D printing. 3D printing otherwise called additive manufacturing is a procedure in which first the blueprint of the plan is made in the software and after that the outline is sent to the printer that makes the 3D object. The printer prints the articles layer by layer. These printers are fit for making complex structures with extraordinary subtle elements that are hard to make with different techniques. The most widely recognized material for use in 3D printing is plastic however the utilization of some other materials takes into account the production of other astounding items. It finds its applications in medical, construction, Automobile and
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other industries. Recently China built 10 houses in one day using 3D printers and at a cost of less than $5000 per house. The worldwide market for 3D printing is developing at annual growth rate of 35.2%. As per a report of Wohler’s in 2015, the 3D printing industry was estimated at $4.1 billion in 2014. It has more than 49 manufacturers who produce and sell industrial 3D machines.
Decentralization network
of
manufacturing
The development of 3D printing has constantly been changing our supply chain. It is changing the distribution network by decentralization of the manufacturing locations near the client. Let us look at how it will help. The conventional supply chain follows the SCOR model which is Plan Source Make Deliver Return. With the coming of 3D printing this supply chain network will be reduced to make Deliver Return.
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The organizations can respond rapidly to the requests of the client by locating manufacturing plants even more closer to the clients and satisfy the request when the demand emerges. This will also reduce the inventory costs and the lead times. Few of the cases of the organizations utilizing this innovation are given below Maresk Maresk in 2014 began introducing 3D printers on its ships to respond to any prompt spare parts requirements. Prior to this it required to source its spare parts from the closest port which prompted to disruption in its services. General Electric GE started manufacturing its fuel nozzles for its jet engines using 3D printing technique. These new nozzles are 25% lighter and stronger than those that were made by customary strategies. The past nozzles comprised of 20 unique parts that had to be sourced from various suppliers however now it can be delivered in one single stride and in less time. 2. Product Customization strategies This is the most exciting element of this innovation. As we examined the case of the book rack in the opening of this article, the same can be applied to different items. Customization of products is turning out to be increasingly
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imperative for business today. It offers more customer satisfaction and in turn more customer retention. A current review demonstrated that an online customer who utilized customization choices scored fundamentally higher than different other customer on the customer loyalty test. For accomplishing this, organizations can partner together with their logistics provider to utilize 3D printing services.
computer or network data storage or online platform for sharing files. This situation has now becomes a reality with the advent of 3D Printing. Organizations have been designing extensive inventory and warehousing management systems. This is on account of making items accessible to the customer on time when the request emerges and is critical for the organization to remain competitive.
The local distribution centers can hold final products and have 3D printers to make customized orders ready. Amazon has a patent in which the truck has a 3D printer and makes and delivers the order to the customer on the way. Shoe producing organization Adidas is likewise opening up processing plants close to customer locations which will make shoes on request as per the customer’s needs.
This service is more important for those companies who are in the business of selling specialty products whose demand fluctuates. 3D printing has the ability to overcome this problem of inventory by making products available to the customer as and when the demand arises. With 3D printing, production batch size is no longer important. Products can be printed to order and no inventory is necessary.
3.
The innovation additionally has implications on warehousing management. The quantity of warehouses centers required will be less.
Virtual Inventory
Imagine a situation when inventory becomes digital and warehouses are on
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The production capacities can be located close to the customer who can have a 3D printer and can take into account the request. In this way no need to have enormous distribution centers keeping days of stock. Companies can partner with logistics provider companies to provide them with space enough to keep their 3D printer or in many cases the companies can partner with other companies to share space thus significantly reducing the cost required to maintain a warehouse. THOR
It’s not a comic character but rather a completely 3D printed plane that flies flawlessly. Created by Airbus, it is a 13 foot long flying drone which comprises of 50 3D printed parts, two electrical engines and a remote control. THOR stands for Test of High-tech objects in reality. It will in all likelihood be utilized for more dangerous attempts and streamlined examinations, all intended to show the world how practical a completely 3D printed airplane really is. Limitations of 3D Printing Having understood the magic of 3D printing, let’s see where it has its limitations. 1.
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No replacement manufacturing
for
mass
For 3D printing customization is the key. For mass manufacturing, scale economics is the key. Number of items delivered will be more quick using conventional manufacturing process. Henceforth in the event where economies of scale drive the benefits, utilizing a 3D printing methodology may not be that appropriate. 2.
Liability and Patent issue
Since 3D printing can be used by individuals to make different products, the question of who will bear the liability of the product so made. Is it the company producing the 3D printer or the customer who owns that printer. The next question will be to protect the patents. Since it can be used by masses, protecting patents would be difficult for organizations. New arrangements will be required in this regard which will include more obstacles.
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3.
Regulations
New innovation carries with it new controls. Since 3D printers can be claimed by people, directions with respect to the kind of items that can be made must be made. For instance Firearms or other disallowed gadgets.
Nevertheless in the coming future the ascent of 3D printing will significantly influence the manufacturing and Supply Chain operations. In times to come, Supply Chain network will turn out to be more productive, and globally connected.
4. The technology of 3D printing is still in nascent stage and still a lot of R&D is required before it can be put to real time usage. The limitations of printers is in use of limited type of materials for printing the objects, size of the objects that can be printed, time required to print a component and cost of printing an object when compared to its manufacturing cost are some of the areas yet to be addressed.
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Football and Procurement The article is from DRASKO JELAVIC Strategic Procurement Expert I Cirtuo CEO & Founder I Dedicated to Digital Procurement Transformation
Football and procurement have interesting similarities and opportunities in procurement can be improved by using football analogies. It gives us the answer to where are the Messi and Ronaldo are procurement departments? MIDFIELD
The way author sees it, is that most procurement departments are playing only midfield. There is no defense and definitely no offense going on. What he means by midfield is that departments are only focusing on COST reduction or avoidance. Strictly operational, no World Cup aspirations. Every field practice is just repeating the same old drills. It becomes perfectly clear, even to a person who hasn’t watched a football game in their life that you can’t play, let alone win any games, if you just have a few players at the center of the field. They might as well be mowing the lawn on the field, because they are certainly not playing Champion’s League worth
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football. Even Luka Modrić couldn’t do it by himself Before organizations move on to offense, they have to strengthen the midfield and in procurement that is done with a strike on three fronts – digitalization, structured Category Management and raising strategic competences. Those three fronts are naturally complemented in strategic tools that are able to discipline and introduce analytically sound data that you pass to your striker for the winning goal.
OFFENSE So what do Ronaldo, Messi, Lewandowski ultimately do? They are in the VALUE creation business. And what is that in procurement? That’s relationship-building Supplier Management that is able to drive innovations beneficial for everyone in the team. Nobody makes their own stuff anymore. Everyone has to rely on suppliers and their expertise. In that respect, it seems incredible that some procurement players would rather choose
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to foul suppliers consistently, earning red cards left and right. Why would you foul someone who can be on your team and you can create something exciting for the audience? The audience doesn’t care about tough negotiations, but they do care about goals and great new products and services. DEFENSE If your goalpost is constantly full that you hardly have the time to recover, it probably means you need to work on your defense. In procurement defense means RISK Management. And it means that commodity price fluctuations, currency issues, political upheavals, etc. are as far away from your goal as possible and that you are prepared for any opponent. Most procurement departments get shocked at all the goals, but then simply get back to midfield and hope that something doesn’t strike. But the teams that care about their defense incorporate a system of risk mitigation for all their key categories and suppliers. That way Suarez can’t bite your ear and score a goal, leaving you defeated.
CPO – A Strategic Coach And finally, who should know that a team can’t play just the midfield? That’s the CPO’s mission. An experienced leader who sees all the
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angles and is able to transform procurement, cooperate with management and internal clients and to drive the team into the future with digital breakthroughs. Someone who knows the game inside out, who is Zinedine Zidane to their team and is willing and able to envision that trophy at the beginning of each season.
So, how to make a World Cup procurement team? First off, expand your game. Midfield is important, but unless you have nothing but long-rangers on your team, you’re going to need the strategic back-up of a supplier managing offense that is valuedriven and risk managing defense that keeps your goalpost untouchable.
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The basics of E -Procurement Article bySravya Jayanti PGDM 16-18 Introduction E-Procurement is defined as 'The combined use of electronic information and communications technology (ICT) in order to enhance the links between customer and supplier, with other value chain partners, and thereby to improve external and internal P&SM processes. EProcurement is a key component of ebusiness and e-commerce. The E-procurement value chain constitutes e-tendering, e-auctioning, catalogue management, vendor management, contract management, order status, ship notice and Purchase Order Integration.
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The major elements of an e-procurement system technically include RFx and ERFx. RFx constitutes: Request for information: Generally used for the comparative purposes which are significantly known for collecting written information on the capabilities of various suppliers. Request for proposal: When an agency or a company is interested in procuring a commodity, service or a valuable asset, the request for the same is made through a bidding process to submit the business proposals.
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ERFx constitutes Software for managing the requests for proposal, information, and quotation.
The above elements as a whole cater to maximum benefits of an organization that includes proper Supply Chain Management, customer service benefits, optimization of resources, etc. Present trends of E-procurement in the Global Markets
also started using e-procurement as it provides structured audit trails, transparency of transactions and most importantly a good ROI. The World Bank also recommends that this has to be incorporated by certain economies to see that certain basic necessities are being fulfilled. The further expansion is seen in ICT services, securing online services, developments in standards and processes and training for all the purchases.
The internet is no doubt a boom in the present world where it has evolved and grown to provide a complex marketplace with many competitors offering a variety of e-procurement services that are business to business and business to consumer. The e-procurement service based companies are majorly seen in pharmaceuticals, mining, oil and gas industries. They help in providing full range services to support global procurement transactions. This is also seen in large industries where they elect to manage the in-house procuring services. This is smoothly done by installing enterprise related software i.e., EAS (Enterprise Application Software) that comes as an integral part of the Information System. This software helps the firms to cope with time and money. Governments in mature economies have
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The e-procurement is also used in many NGOs as this is helpful to the air-funded buyers to compare prices quickly and easily and also to review specifications, delivery dates from suppliers worldwide
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Advantages and procurement
challenges
of
e-
Advantages 1.
Providing legal certainty procurement procedures.
2.
Reducing corruption.
to
• Reduced requisition-to-order costs by 58%. • Increased total spend under management of procurement group by 20%. • Reduced off-contract spend by 64%. Challenges faced by E-procurement
3.
Attracting foreign investments and partnerships.
4.
Encouraging government practices in procuring entities.
5.
Fair opportunities for suppliers to compete for government contracts.
6.
1.
Difficulty in integrating information systems since it requires many resources where training people involved in the process, running costs and set-up costs.
2.
Supplier adoption: Some suppliers may still find it difficult to adapt to the new technology and means.
3.
The increase in cyber crime is also one of the major challenges.
4.
Resistance to adoption: The conventional attitudes of senior procurement officers who are comfortable in a traditional way of procuring detest the automated process as they feel they have lost autonomy and resist bringing EProcurement to the operation.
Lowering cost of procurement of goods and services.
7.
Optimal delivery of public services.
8.
Another advantage observed is the ROI.
According to Aberdeen Group Study 20041, companies that move to eprocurement see the following advantages: • Reduced prices by 7% for spend brought back onto contract. • Reduced requisition-to-order cycles by 66%.
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The future of e-procurement 1.
E-procurement has automated many buying processes such as supplier
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qualification, contract management, einvoicing, e-payment. This process of automation is expected to continue in future. E-procurement will also help in negotiation strategies and can be used in SCM and product lifecycle. 2.
Procurement managers will act as internal consultants to market supply and demand and help in solving problems. The end result will be increased collaboration along with integrated planning and will lead to increased product life cycle.
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As complexity increases, more and more software’s will be developed for e-procurement. These eProcurement software’s will enable us to analyze complex scenarios. This will lead to good procurement practice to be applied to more scenarios and industries without increasing procurement overhead cost significantly.
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How can Internet of Things go Global ? Article by Atish Gharat PGDM 15-17 The Internet of Things is an emerging topic of technical, social, and economic significance. Consumer products, durable goods, cars and trucks, industrial and utility components, sensors, and other everyday objects are being combined with Internet connectivity and powerful data analytic capabilities that promise to transform the way we work, live, and play. Projections for the impact of Internet of Things on the economy are impressive, with some anticipating as many as 50 billion connected Internet of Things devices by 2020 and a global economic impact of more than $8 trillion over the next decade.
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The technology is now finding its place in Logistics and transportation. According to ‘Freight Transport Market in India 20152020’ by market researcher Novonous, India spends around 14.4% of its GDP on logistics & transportation. In fact, the report states that the market is expected to grow at a CAGR of 13.5% to be USD 307.70 billion market by 2020. Hence Innovation is a very important element for this sector, as the demand is always for more reach and faster delivery at lower costs. Transport and logistics are fundamentally about moving things from one place to -
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another. The main service components of Transport and Logistics can be categorized into the things that move and the things that do the moving i.e. the demand and supply sides of logistics. In supply side logistics, IoT finds its applications in 1. 2. 3. 4. 5.
Capacity Sensing Planning and reporting Route optimization Energy Management Fault Detection and resolution
The demand side, on the other hand, includes goods to be transported and the customers expecting the goods. The value to customers is determined by the time, security, traceability, and condition of their cargo.
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Applications of IoT for demand side logistics are in 1. 2. 3.
Environment monitoring and management Threat detection and prevention Real-time traceability
LOCUS-TRAXX and EARTH-SEARCH are two such Internet of Things service providers companies that provides devices, applications, and services worldwide. These companies use sensors which are connected to the main server and further to the cloud. The data is gathered in the cloud and then it can be accessed through the devices like smartphones and computers. Each device has a unique code which can be used to access real-time conditions of the shipments. The LOCUS-TRAXX offers -
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devices which have the latest wireless sensing technology and are placed in the trailer or container. Shipment temperature, security and GPS location readings are continually transmitted wirelessly from shipments in transit. Intelligent Alert email and text messages are sent automatically when a shipment needs immediate attention. All data is available online through intelligent maps, interactive graphs, customizable reports and one-click downloads. The combination of wireless sensors, real-time communication, alerts and online reporting gives the customer full access at their fingertips.
interconnected so the data management and its privacy and security should go hand in hand to avoid any mishaps Nevertheless, IoT in transportation and logistics has reduced the asset loss by providing security, optimizing fleet routes, ensuring temperature stability by monitoring the temperature of the cold chain, managing warehouse stock by monitoring inventory to reduce stock out situations & create fleet efficiencies by reducing redundancies
The EARTHSEARCH’s LOGIBOXX on other hand provides complete logistics solutions to its clients. Its product Logibox consists of a RFID & GPS. It provides with logistical solutions ranging for a warehouse to the truck loading of cargo, secure delivery, in transit realtime location tracking, geofencing facility, delivery efficiency, inventory management, warehouse management etc Challenges faced by IoT. Security and privacy protocols are very important issues when it comes to the Internet of Things space. The security breaches could lead to huge damage to the firms. So this aspect is a major challenge. Also since various devices are
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Driverless Trucks Article by Manav Rizwani PGDM 16-18 Don't be surprised if someday soon you don't see a driver in the driver's seat of a trailer truck running down on a highway that is because organizations like Uber have put resources into self-automated driver technology, which made transportation of full heap of brew cases 120 miles between two Colorado cities without a driver situated in the driver's seat. Autonomous vehicles facilitate all the more overnight travel diminishing truck activity on already congested streets amid the day and furthermore reducing with trucks stops and stopping issues. Automation would likewise diminish roadway fatalities by two-third. Autonomous trucks will decrease the number of road mishaps brought on by a human blunder
regulations, and changes in state traffic laws. Additionally, it will prompt to unemployment for drivers however they can be prepared and re-talented for occupations which require a human interface. Computerized trucks will prompt to reduction in transportation time and subsequently increment transportation productivity. In addition, a progression of trail trucks can be transported by single driver while different trucks are modified to take after driving truck. Despite the fact that the innovation is still not completely created and needs to see a greater amount of updates before it can be completely received, the impact of it will be very significant on logistics and supply chain management for the days to come
Automated Technology incorporates LiDar, a mix of radar and mapping, video, GPS, radio correspondences, and other innovation being introduced at various levels. The government is hesitant to adopt vehicle autonomy as it requires without pothole streets, safety
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Team Momentum
Faculty In-Charge
Dr. J S Lamba Area Chairperson Operations
Designer
Editor
Shikhar Sodhani
Shashank Jain
Senior Team Atish Gharat || Mangesh Pandit || Abhilash Shah
Promotions Team FORSE
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