Industry 2.0 April-May 2010

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A 99 MEDIA PUBLICATION

VOLUME 09

ISSUE 09

APR-MAY 2010 VOL 09 ISSUE 09

T E C H N O LO GY M A N AG E M E N T FO R D E C I S I O N - M A K E R S

2.0

APR-MAY 2010

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INDUSTRY 2.0 - TECHNOLOGY MANAGEMENT FOR DECISION MAKERS

MODErniZing

thE caSting

prOcESSES New Technologies Make Foundries More Competitive

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Supply chain Effective rural distribution systems can transform the economy

infraStructurE DMIC project will create employment for three million people

Manufacturing Simulation helps sheet metal manufactures minimise failures

s, MIS,

sharma

editorial Vol. 09 | Issue 09 | aprIl-may 2010

Managing Director: Dr pramath raj sinha Printer & Publisher: Kanak Ghosh

Is GoInG

Editorial Group Editor: r Giridhar Assistant Editor: p K Chatterjee Sub-Editor: reshmi menon dEsign Sr. Creative Director: Jayan K Narayanan Art Director: Binesh sreedharan Associate Art Director: anil VK Manager Design: Chander shekhar Sr. Visualisers: pC anoop, santosh Kushwaha Sr. Designers: Tr prasanth & anil T Chief Designer: N V Baiju Photographer: Jiten Gandhi brand managEmEnt General Manager: Nabjeet Ganguli salEs & markEting VP Sales & Marketing: Naveen Chand singh (09971794688) National Manager-Events & Special Projects: mahantesh Godi (09880436623) National Manager Online: Nitin Walia (09811772466) Assistant Brand Manager: arpita Ganguli GM South: Vinodh Kaliappan(09740714817) GM North: pranav saran(09312685289) GM West: sachin N mhashilkar(09920348755) Coimbatore: D K Karthikeyan (09843024566) Kolkata: Jayanta Bhattacharya (09331829284) Production & logistics Sr. GM Operations: shivshankar m Hiremath Production Executive: Vilas mhatre Logistics: mp singh, mohamed ansari, shashi shekhar singh officE addrEss Nine Dot Nine Interactive pvt ltd C/o KpT House, plot 41/13, sector 30 Vashi (Near sanpada railway station), Navi mumbai 400703 For any information, write to info@industry20.com For subscription details, write to subscribe@industry20.com For sales and advertising enquiries, write to advertise@industry20.com printed and published by Kanak Ghosh for Nine Dot Nine Interactive pvt ltd C/o KpT House, plot 41/13, sector 30 Vashi (Near sanpada railway station) Navi mumbai 400703 Editor: anuradha Das mathur C/o KpT House, plot 41/13, sector 30 Vashi (Near sanpada railway station) Navi mumbai 400703 printed at silverpoint press pvt. ltd, D 107, TTC Industrial area, Nerul, Navi mumbai 400706.

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GreeN WoRth It?

R Giridhar editor@industry20.com

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ver the past few months there has been growing scepticism about the scope of climate change—and the accuracy of climate science. Critics have also railed against the perceived failures of the Copenhagen summit, and increasing costs of complying with green norms that are being mandated by various governments.

For many companies in the manufacturing space, the trend towards green has had a significant influence on the way they operate. This is manifested in the adoption and use of more eco-friendly materials in production; substitution of traditional materials with new ones; use of new manufacturing techniques to cut waste and energy requirements; sourcing more efficiently, and from new suppliers and locations; focusing on energy and water reduction measures; cutting packaging, handling and transportation costs; and disposing effluents and pollutants more effectively. The fact that many organizations were simultaneously engaged in cost control measures like lean manufacturing helped accelerate the adoption of many of these “green” measures. and they were also able to successfully persuade external partners and supply chains in supporting their efforts to go green.

But, other steps in the journey towards green have met with mixed success. some of the green alternatives have tended to increase costs—which have been difficult to pass on to consumers and buyers. This means that manufacturers

industry 2.0

face a major challenge when it comes to re-designing existing products or developing new ones that are simultaneously better for the environment while being commercially viable.

The government for its part has tried to help, by offering a slew of incentives for using alternative energy sources (like wind power and solar), and passing laws to discourage the production of energy inefficient devices and implementing stringent laws against environmental pollution.

However, much more needs to be done to help smaller manufacturing companies adopt green production methods, and help them identify and purchase at competitive prices materials that have a lower impact on the environment.

Industrial buying portal, metaljunction.com, has recently launched a green materials sourcing service that can help manufacturers looking for a variety of products. on the engineering and design front, software suppliers have developed new tools that can help designers rapidly design new products and evaluate the carbon footprint of materials and manufacturing processes. There is, however, a need to create more awareness about such solutions and to popularize their use. As an energy deficient and resource constrained nation we need to maintain an unrelenting focus on enabling innovative ways to promote green manufacturing. else, we run the real risk of irreparably destroying both the economy and the environment.

- technology management for decision-makers | april-may 2010

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contents processes can help create a competitive advantage.

36 Integrated Strategy Management An integrated management system can help chart new growth plans and sustain initiatives.

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supply chain & logistics 38 Uninterrupted Supplies in Retail

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Retailers adopt a ‘flow-through’ distribution model to better match demand with supply.

42 Penetrating The Indian Rural Sector Efficient supply chain practices hold the key to profits from the nation’s vast hinterland.

46 Choosing The Right 3PL Service Provider Many factors need to be considered before selecting the right logistics service provider.

48 Winning the Race

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A report on how Duravit’s improved warehouse facility enhanced operations.

cover story Cover Design: Santosh Kushwaha Picture courtesy: www.photos.com

20 Overcoming Challenges While the Indian metal casting industry has enormous potential, it is handicapped by operational and technical problems.

opinion 16 Consumer Durables

materials & processes 30 Shifting The Paradigm

Strong domestic demand can propel India to a world leadership position.

Simulation techniques can improve and enhance sheet metal manufacturing.

18 Apparel Production

32 Improving Quality in Pharma Manufacturing

in conversation

Outsourcing can hamper agility and profitability.

Logistics service providers are gradually adopting advanced technologies to deliver better customer service.

management & strategy 58 Intellectual Property Rights Greater knowledge of IP and its implications is necessary to remain competitive.

departments 01 Editorial 04 Industry Update 12 Event Report 14 Market Dynamics

26 K VERMA Head—drive Technologies Industry Sector, Siemens

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Adopting world-class manufacturing

information technology 54 Long Way To Go

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28 RAVI VARADARAJAN Technical Manager—India & SaarC dassault Systemes Solidworks

52 RICHARD J BOLTE Jr President & Ceo BdP International

- technology management for decision-makers

31 Advertiser Index 61 Product Update

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industry update GL1 InnoMold Starts India Operations

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the opportunity in India and cater to the emerging demand of high precision and complex moulds.”

Hemakant Garde, Managing Director, GL1 InnoMold India, said, “With this, we will be able to strengthen the mould-making business in India with know-how from Germany, which we will bring from sister company G-12 FreiForm GmbH. Our objective is to also cater to the demands of the German and European automobile producers, thus targeting suppliers that want to deliver plastic parts from India.”

GL1 has also hired technical experts who are good in mould designing and in mould manufacturing. The GL1 InnoMold India recently unveiled its mould company has recruited a machinery at its newly inaugurated Pune plant.

German technician for its Indian operations who has an interGerhard Linde, Shareholder and national experience and exposure in Director, G-12 FreiForm, said, “Inmould manufacturing. dia is fast becoming an automobile The special moulds that will hub and world leaders of automobe offered with German support bile manufacturing are prefering include stack moulds and tandem to start their own manufacturing moulds; C02 cooled moulds; facility. G12 group has decided to invest through their investing arm two component moulds and gas company Geli Betalings, to leverage injection moulds. anufacturer of various types of injection moulds for auto components, furniture and white goods industry, GL1 InnoMold India, recently unveiled its imported mould machinery at its Pune facility. The firm through its investing arm company Geli Betalings, has earmarked a total investment of Rs 40 million in India.

Moser Baer Sets up thin Film Solar Farm

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oser Baer has recently commissioned its thin film solar farm with an installed capacity of 1 MW at Chandrapur in Maharashtra.

The plant has been set up using amorphous silicon thin film technology, which is considered to be suitable for Indian climatic conditions, and is connected to the 33-KVA local grid. The company bagged the project from Mahagenco, a Government of Maharashtra power generation company, on the basis of a global bid.

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Moser Baer has provided design, engineering, procurement, construction, commissioning, power evacuation and testing in commissioning of the project. It will also provide operations and maintenance services for the project.

The company has also signed a consortium agreement with SunEnergy Europe for this project.

Mahagenco is engaged in the process of creating large additional generation capacity in Maharashtra in the next few years to meet the state’s growing energy needs.

- technology management for decision-makers

event update automotive engineering Show 2010

The event will display a wide range of manufacturing technologies, equipment, tools and methods of assembly for the automotive industry.

Venue: Chennai Trade Centre, Chennai Tel: +91-22-4020 1000 E-mail: info@focussedevents.com Date: Website: www.focussedevents.com 14 May to

17 May 2010

International Power transmission expo 2010

The event will display latest power transmission products and technologies.

Venue: Bombay Exhibition Centre, Goregaon, Mumbai Tel: +91-80-25567028 E-mail: info@virgo-comm.com Date: 20 May to Website: www.virgo-comm.com

22 May 2010

Metal Building Systems expo 2010

The event will showcase latest products in building systems and will also focus on challenges, issues and initiatives in the steel structures segment.

Venue: Autocluster Exhibition Centre, Pune Tel: +91-22-28763111 E-mail: info@inis-enterprises.com Date: Website: www.inis-enterprises.com 3 June to

5 June 2010

Food tech 2010

The event will showcase the latest food processing machinery and technology by national and international companies.

Venue: KTPO Trade Centre, Bengaluru, Karnataka Tel: +91-80-65707899 E-mail: info@adsstation.biz Date: Website: www.allfoodtech.com 11 June to

14 June 2010

aCMee 2010

The event will showcase latest innovations, products and services in automobile and mechanical engineering industries.

Venue: Chennai Trade Centre, Chennai Tel: +91-44-26258619 E-mail: info@acmee.in Date: 17 June to Website: www.acmee.in

21 June 2010

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industry update Parle agro Plans expansion of Plastic Packaging Business

Parle Agro is planning to increase its presence in the oil, confectionery and pharmaceutical segments.

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arle Agro is planning to expand its plastic packaging business.

Polyethylene terephthalate (PET) is a lightweight packaging material that keeps bottled content fresh for up to six months.

The company, which has already increased its annual preform production by 17 per cent in 2009-10, is now aiming to increase production capacity by another 21 per cent in FY 2010-11. Recently, the company installed two new machines, viz., a KM 96 cavity machine and a Husky-HyPET 72 cavity machine, at its Silvassa plant.

The company has also commissioned its second preform manufacturing plant in Orissa and is planning to set up its third plant in south India by early 2011. About 40 per cent of the total production volume is used for captive consumption, while the remainder is supplied to external customers in India and exported to South East Asia and Africa.

DIeSL Bags award For CFa Operations

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rive India Enterprise Solutions (DIESL), the logistics arm of Tata Group, has won the Castrol Award 2010 for Commission and Forwarding Agent (CFA) operations.

CFA operations comprise providing full safety and security to customer property (stocks), maintaining health, safety, security and environment within the warehouse, ensuring the maintenance of road safety norms, redressal

of customer complaint related to warehouse, adherence of Standard Operating Procedure provided by the clients and reporting to client management regarding the activities through various report formats provided by them.

DIESL bagged the award for being the highest sales grosser in the northern region and for its customer service in the industrial and heavy duty market segment.

HPL Sets up New Wire & Cable Plant

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PL Group has set up a new wire and cable plant at Sonepat.

With the commissioning of this new plant, the production capacity of the company is expected to more than double.

The new facility includes advanced multiwire horizontal drawing machine from Niehoff, Germany. The newly installed machine will help in simultaneous production of multiple

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wires at same diameter tolerance and continuous resistance annealer for multiwire drawing line. The company has also commenced construction at a new factory site in Gurgaon. The new facility with an area of about 15,000 sq metres, will house the expansion of production in the energy meter division.

The company has set a target of achieving more than Rs 1,000 crore turnover in this financial year.

- technology management for decision-makers

Om Logistics Establishes New Warehouse

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ulti-modal logistics company, Om Logistics has set up a new warehouse at Jamalpur (Gurgaon) in Haryana, covering an area of around 60,000 sq ft.

Ankur Minda, Project Head - Warehousing, Om Logistics, said, “The warehousing sector in India is growing at a rapid pace. There is still a shortage of warehousing and storage space in India.� The company chose Jamalpur as a location for its logistics park, as the area is fast emerging as an important logistics hub in India. The company is also planning to leverage the market potential once the Kundli-ManesarPalwal bypass starts by 2011.

The new warehouse will cater to requirements of FMCG, retail, consumer durables, including electronics/ appliances, apparel and fashion, automotive, pharmaceutical and healthcare, telecom, high tech and agro chemicals sector. The company has already established warehouses in Bhiwandi (Mumbai), Ahmedabad, Patna, Faridabad and Kapashera (Delhi).

Sical Chooses elecon engineering

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lecon Engineering Company has been awarded an order of Rs 49.9 crore by Sical Logistics for design, engineering, manufacturing, testing, supplying, erection and commissioning of material handling equipment and other equipment.

The scope of work includes supply of three stacker reclaimers, one ship loader, one set of wagon tipplers and other associated equipment, for the new Mangalore iron ore terminal.

Elecon Engineering Company is a manufacturer of material handling equipment in India.

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industry update Cranfield Develops New Welding Technique

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ranfield University has developed a new welding technique for manufacturing horizontal and inclined structures. The new technology is expected to improve weld-based manufacturing practices, without additional tooling, or any type of fixtures, or waste materials.

The new technology helps improve welding of inclined structures.

The new invention is a part of the University’s research on Ready-to-use Additive Manufacturing (RUAM), a technology that aims to improve industry’s ability to manufacture ready-to-use functional parts for a wide range of applications ranging from small turbine blade repairs to large aerospace structures.

As part of the research, and based on previous experience of the fabrication of vertical steel walls, the team investigated the fabrication of angled steel walls without the use of any kind of support structures.

A series of experiments were conducted using ‘inclined torch’, resulting in the successful production of a series of inclined walls varying from 60° to 15°. Finally, a horizontal wall section was successfully created, initially as an extension of an existing horizontal section, and tested in the form of a box structure.

The RUAM process is capable of producing a range of geometries and features to fit various demands. It uses additive layer welding techniques such as Cold Metal Transfer (CMT), which allows for flexible welding strategies at high speeds. The successive process allows for the mixing of strategies and materials as well as for amending existing metal work pieces. Besides, the project has also helped develop software for automatically generating robot paths.

Fraunhofer Improves Laser Welding

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raunhofer Institute for Production Technology (IPT) has introduced a new technology, which showcases how lasers can make the manufacturing of structures out of fibre-reinforced thermoplastics, efficient, clean, reliable and automatic.

Carbon fibres are integrated into kilometre-long strips of meltable thermoplastic resin. Engineers measure and evaluate the impact and tensile strength and tear resistance. To assemble sturdy components from these tapes, multiple laminate layers are stacked on top of each other—heated by the laser just before being laid down—and then compressed into a compact structure.

This way, the tape strips fuse with each other and cool off quickly, too, because the laser rapidly emits measured doses of energy in a targeted manner onto the material. This minimizes the expenditure of energy and time.

Using laser beams, engineers can even glue components together.

Improved laser technology eases processing of fibrereinforced thermoplastics.

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- technology management for decision-makers

MIT Creates Heat Conducting Polymer

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assachusetts Institute of Technology (MIT) has developed a new technique to transform the widely used polymer and polyethylene, into a material that conducts heat and yet remains an electrical insulator.

The new method involves pulling a thin thread of material (top) from a liquid solution (bottom), and in the process the individual polymer filaments, which start out as a tangled mass, become highly aligned.

The new process causes the polymer to conduct heat in just one direction. This makes the new material especially useful for applications where it is important to draw heat away from an object, such as a computer processor chip.

The key to the transformation was getting all the polymer molecules to line up the same way, rather than forming a chaotic tangled mass, as they normally do. The team succeeded by slowly drawing a polyethylene fibre out of a solution, using the controllable cantilever of an atomic force microscope, which they also used to measure the properties of the resulting fibre.

The high thermal conductivity could make such fibres useful for dissipating heat in many applications where metals are now used, such as solar hot water collectors, heat exchangers and electronics.

Presently, the team has produced individual fibres in a laboratory setting.

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industry update Godrej eyes Indonesian Market

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nents—Asia, Africa and odrej Consumer Latin America through Products Limited three core categories— (GCPL) has enhome care, personal tered into an agreement wash and hair care.” to acquire PT Megasari A Mahendran, DirecMakmur Group and its tor, FMCG Portfolio distribution company Cell, Godrej Group, in Indonesia. Megasari said, “We look forward Group manufactures and to working with the seadistributes a wide range soned Megasari team of household products, to further accelerate including insecticides, growth and leverage wet tissues and air synergies between fresheners.

PT Megasari Makmur Group Megasari and the GoAdi Godrej, Chairman, manufactures products such drej Group.”

GCPL, said, “Megasari as insecticides, wet tissues PT. Megasari Group provides us a and air freshners.

Makmur has factories strong platform to establocated in West Java, Indonesia. The lish a significant foothold in Indonesia, group also manufactures household which is among the largest consumer products for baby care, car and motormarkets in Asia. As an emerging cycle products, food wrappings, drain market multinational, this acquisition openers, bleach, metal polishers and fly is an important step in our global 3 by and rat glues.

3 strategy—presence in three conti-

ICRa, IDeacarbon enter Strategic alliance

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CRA Online, a wholly owned subsidiary of ICRA Limited (an associate of Moody’s Investors Service), has signed a strategic alliance with IDEAcarbon, the company that owns the carbon rating agency, to enable the carbon credit markets in India gain transparency and facilitate its growth.

The strategic alliance is expected to help establish best practices and expertise of IDEAcarbon in assessing risks associated with carbon market instruments along with its understanding of climate change economics.

P K Choudhury, Vice Chairman and Group CEO, ICRA, said, “This is a material step for Indian project developers, and the carbon market, to gain from international best practices and tools that become available to them through our alliance with IDEAcarbon.”

The strategic alliance between the

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two companies is set up to leverage ICRA Online’s resources in India and IDEAcarbon’s global network and its knowledge of carbon asset analysis, to provide the Indian carbon market participants an independent and reliable analysis of carbon assets and help them manage risks.

The carbon offset rating is a calibrated opinion on the emission reduction estimates of underlying developmental projects. These opinions are based on a diligent analysis of the originating projects and the Carbon Rating Agency’s proprietary delivery estimation models and benchmarking.

The Carbon Rating Agency is a wholly owned subsidiary of IDEAcarbon. The Agency’s ratings and opinions are unencumbered and independent—it does not trade, buy, sell or originate carbon credits.

- technology management for decision-makers

Seclore Joins Hands with Autodesk

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eclore Technology has tied up with Autodesk to provide rights management technology for engineering drawings. With this alliance, Seclore FileSecure will come with enhanced support for Autodesk products.

This association is expected to help users of Autodesk in collaborating and sharing confidential data. Autodesk users will now be able to place precise controls on how their data may be used within the enterprise and even when it is sent to external parties.

They will be able to control aspects like ‘who’ can use the information, ‘what’ can each of the people do, ‘when’ can they do it and from ‘where’ is this access allowed.

Besides, the users will also enjoy the flexibility of changing these controls as per their requirements.

Greenko Acquires LVS Power

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yderabad-based clean energy company Greenko Group has acquired LVS Power, a 36.8 MW liquid fuel power plant. The company will invest up to $117.89 million in the buyout deal including additional capital expenditure of $85 million.

Following the acquisition, Greenko is planning to convert the project to use natural gas and thereafter increase the capacity to 117 MW with additional investment.

The acquisition and conversion to support natural gas and expansion is likely to involve investments of about Rs 600 crore.

The conversion and expansion project at LVS is scheduled to be completed within two years.

LVS Power has a long-term purchase agreement with Andhra Pradesh. The company has secured gas allocation for five years.

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event report

Uncovering The Power Of The Rural Market An average Indian village today represents an emerging powerful consumer community. Indian rural market now represents a huge untapped potential.

Rural Supply Chain Event— (L-R) Ashutosh Tripathi, Sr Demand Manager, J&J; Hari Goyal, GM, Reliance Retail; Anuj Pasrija, Country Head, Arogya Parivar and Jasbir Nanda, National Logistics Manager, Hindustan Unilever at the Rural Penetration & Distribution Summit 2010.

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op sales, operations and supply chain stalwarts congregated at the Supply Chain Leadership Council’s Rural Penetration & Distribution Summit ’10 held recently in Mumbai, to discuss penetration and distribution strategies for rural India.

During the meet, it was revealed that as urban consumption peaks and market shares get further split, growth for key sectors like FMCG, consumer durables, auto, pharmaceuticals and electronics will come from small town and rural India. However, rural penetration and distribution challenges remain abundant.

Some of these include dispersed population, seasonal demand, inadequate product display, comparison and reference options, challenging after-sales service models, poor road infrastructure and fragmented transportation service, too many distribution layers, high wastages & breakages, lack of intermodal integration and lack of organised 3PL focus.

april-may 2010 | industry 2.0

During his speech at the conference, Venkatesan, Senior Advisor, National Council for Applied Economic Research, said, “According to us, the rural urban split in consumer spending stands at 9:11, with rural India accounting for private retail consumption of US $145 to $150 billion.”

Anuj Pasrija, Country Head, Arogya Parivar, a rural focused socio-commercial initiative from Novartis India, explained that industry players must work together on opening up the rural markets as once the potential is unlocked, there will be enough for everybody.

Sanjay Kumar, Head (Marketing)—Mirc Electronics (of Onida fame), used the story of IGO (Onida’s sister brand for the rural market), to explain the significance of innovation in product development and distribution strategy to excel in the Indian rural landscape.

Clifford Patrao, Vice President, IBM India, described how technology can play a role in bridging the rural-urban divide. He gave the gathering a sneak peek at the ‘Spoken Web’, a revolutionary technology designed to circumvent the low penetration of the Internet in rural India by making the web available to rural Indians via a phone interface.

Other speakers at the event included Shailesh Naik, GM & Head - E Choupal, ITC and Vishal Sehgal, Director—Logistics & Supply Chain, Whirlpool and Rahul Sharma, Head—Centre for Rural Information & Insights, Mahindra & Mahindra.

Creating A Sustainable Management System

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pplication of technology may be the buzzword for the modern supply chain management, however, it is not the last word. In some places, efficient running of the supply chain is possible even without technology.

In a forum organised by Mumbai CSCMP Round Table recently, Sumeet Nadkar: Head Logistics SBU at Kale Consultants and Raghunath Medge, President MTBSA (Mumbai Dabbawala), delivered their presentations. The forum brought out how extremely disciplined manual control system can create excellence beside the extremely automated management practice in search of excellence.

Sumeet drew attention to the low spend on technology in Indian Logistics Sector, and explained why the immediate focus should shift from building additional infrastructure, which is a time consuming proposition, to improving the existing processes using technology to bring in efficiency in the logistics, especially in airports where lack of visibility to the stakeholders, operational inefficiencies and increased cargo processing costs are quite common. He also described the benefits obtained by some airports through use of IT solutions to completely automate custodian operational functions.

The president of the MTBSA spoke on their organizational set up and norms followed therein. Mumbai Dabbawalas have a unique modus operandi, which can neither be imitated by any other organization to the full extent mainly because of some inherent factors, nor they can pick up technology because of several constraints. However, it is amazing to note how they have been running the business with Six Sigma rating for more than a century.

- technology management for decision-makers

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market dynamics

Economic Downturn Raising Loyalty Among Indian Employees Findings from a a new survey conducted by global workforce solutions company Kelly Services indicate that the economic downturn in India has generated a powerful sense of engagement between workers and bosses. More than one third of employees surveyed have indicated that they are now more loyal to their respective employers.

Picture Courtesy: www.photos.com

Workforce Index, which obtained the views of approximately 1,34,000 people, including more than 4,000 in India.

The impact of the economic slowdown on work attitudes has been greatest among Gen X (aged 30-47) and baby boomers (aged 48-65) where 39 per cent of both generations say the downturn has made them more loyal, compared with 35 per cent of Gen Y (aged 18-29).

Kamal Karanth, Managing Director—India for Kelly Services says, “Employers who have communicated openly with their staff about the difficult economic conditions, and tried their best to look after them, have been able to build strong levels of trust in their organizations. This heightened loyalty is likely to become a real advantage, with a more committed and focused workforce, as the economy recovers.”

Results of the survey in India reveal the following points. l 60 per cent of respondents say they feel ‘totally committed’ to their current employer, ranging from 69 per cent among Gen X, 67 per cent for baby boomers and 57 per cent for Gen Y. l When asked to name the

60 per cent of Gen Y are ‘very confident’ in their employers’ ability to be good corporate citizens.

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survey, conducted between early October 2009 and the end of January 2010 by Kelly Services, found that 36 per cent of the responders believed that the economic downturn had made them more loyal, while 5 per cent believed that it had made them less so. And, 58 per cent believed the recession had made no difference.

Those workers who are more loyal to their employers attribute the shift to positive management, positive morale and pay levels that have improved or remained steady. Those who are less loyal say it was due to falling pay, poor management and low company morale. The findings were part of the Kelly Global

april-may 2010 | industry 2.0

- technology management for decision-makers

one thing that would make an employee more committed to his/ her job, 52 per cent cited ‘more interesting or challenging work’, followed by ‘more meaningful responsibility’ (21 per cent). l Company reputation is considered ‘very important’ in job selection and retention by 68 per cent of baby boomers, 66 per cent of Gen X and 62 per cent of Gen Y. l 60 per cent of Gen Y are ‘very confident’ in their employers’ ability to be good corporate citizens, higher than for both Gen X (57 per cent) and baby boomers (49 per cent).

The reputation of an organization was shown to be the key element in the way that employees and prospective employees weighed their career decisions.

In assessing a firm’s reputation, employees place most weight on the quality of its leadership, products and services, and employees.

Least important are features such as global presence, financial performance and initiatives aimed at fostering corporate social responsibility (CSR).

“When we look at the things that motivate people in the workplace, it is clear that opportunities for personal growth and development are critical, as is the chance to perform stimulating and challenging work,” notes Karanth. “Pay is certainly a motivator, but it is not as big as some imagine, which means that employers have to examine a broader range of employee conditions and business features—if they want to have the workforce performing at its best,” he concludes. n

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esearchers from North Carolina State University have developed a new way to shape ceramics using a modest electric field. This energy efficient process is expected to result in significant cost savings for ceramics manufacturing, as compared to traditional manufacturing methods. The research, titled, ‘Influence of an applied DC electric field on the plastic deformation kinetics of oxide ceramics,’ is co-authored

by Dr Hans Conrad and Dr Di Yang, a senior research associate at NC State University.

Ceramics make up significant components of a number of products such as insulators, spark plugs, fuel cells, body armour, gas turbines, nuclear rods, high temperature ball bearings, high temperature structural materials and heat shields.

However, there are defects found in crystalline materials,

such as ceramics. One such defect is known as grain boundary, which is where crystals with atoms aligned in different directions meet in the material.

“We found that if we apply an electric field to a material, it interacts with the charges at the grain boundaries and makes it easier for the crystals to slide against each other along these boundaries. This makes it much easier to deform the material,” said Dr Hans Conrad, Emeritus Professor of Materials Science and Engineering, NC State and the co-author of the study. In other words, the material becomes superplastic—so a ceramic can be shaped into a desirable form using a small amount of force.

The level of force needed to deform the ceramic material can be brought down to zero, if a modest field is applied. “We are talking between 25 and 200 volts

Picture Courtesy: www.photos.com

New Technology To Mould Ceramics Using Less Energy

per centimetre, so the electricity from a conventional wall socket would be adequate for some applications,” Conrad said.

The new process will help manufacturers, who make anything out of ceramics, to do the same using less energy. Besides, it will make manufacturing processes more cost-effective and decrease related pollution.

Market For FRP Products To Grow The estimated growth rate of the India FRP pipes and tanks market has been about 32 per cent (by value) since 2009. It is anticipated that Indian FRP pipes and tanks industry will grow at a compound annual growth rate (CAGR) of 23.8 per cent for the period 2010-15. www.industry20.com

A

recent report, titled, “India FRP Pipes & Tanks Market Assessment: Trend, Forecast and Opportunity Analysis (2010-2015),” by Allele Life Sciences, predicts – in 2010, India FRP pipes and tanks market is to be positive with revenue growth of 29 per cent and shipment growth 22 per cent.

The report assesses the commercial potential applications of Fibre-Reinforced Plastic (FRP) pipes and tanks—in transportation of potable water, sewage, de-salination, offshore oil production, paper and pulp industry and

industry 2.0

power plant etc. This contains uses of various matrix and reinforcement. It also identifies market barriers to entry strategy as well as key market drivers and challenges, and profiles market leaders.

According to the report, the FRP pipes and tanks industry in India will find a volume shipment of 201744.0 metric ton (MT) in year 2015. The segment retains number one position in India composites market, wherein it constitutes 32 per cent of total composite consumption amounting to 56869.2 MT in fiscal year 2009. n

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opinion

Leveraging From The Chinese Consumer Durables Sector

D

espite its current lead in manufacturing consumer durables, China may become less attractive for international investments after recent changes in tax regulation, currency appreciation and demand saturation in urban markets.

China’s loss may be India’s gain.

India has a huge untapped domestic market, as well as, favourable

caters to the export market.

China accounts for 72 per cent of the global air conditioner production, 47 per cent of refrigerator production, 45 per cent of television production, 35 per cent of washing machine production and over 52 per cent of mobile phone production.

Domestic consumption in China is many times that of India across

requiring foreign entities to source a certain proportion of raw material supplies from local (Chinese) vendors spurred the developments of a domestic supply chain.

FDI inflows in China have played a key role in transfer of best practices and technology development. The Chinese government has also taken up numerous policy initiatives to develop

product categories. Average consumer prices in China are 15 to 25 per cent lower than India. Since demand for consumer durables is price elastic, this has resulted in higher domestic demand in China.

For instance, domestic demand for ACs in China is 17 times that of India. Similarly, washing machine sales in China are 11 times that in India.

China’s well-developed vendor base provides significant cost advantages in terms of reduced logistics and search costs compared to India. Government policies

technological capability of Chinese companies, resulting in higher technological advancement. One of the major policy initiatives was to enact a joint venture law that gave priority to technology-intensive investments and necessitated the participation of a Chinese JV partner. There are also specific tax incentives to encourage technology transfers. For many projects, wide ranging review of designs by Chinese institutes are mandatory.

China has maintained a low interest rate regime which has spurred investments. State owned banks

Strong domestic demand may lead India to better China’s consumer durable sector, finds a FICCI-PwC study for NMCC. China’s recent change in policy from attaining exportled growth to increasing consumption in the domestic market also creates a big opportunity for India in this sector. However, further focus on policy initiatives is needed to provide a fillip to the growth of this sector in India. demographics to lead its way. This insight is from a study on comparative advantage of consumer durables manufactured in India vis-à-vis China. The analysis was undertaken as a part of the study entrusted by NMCC to PricewaterhouseCoopers (PwC) and FICCI.

Significant observations

China has emerged as the key beneficiary of global outsourcing trend in consumer durable manufacturing. Fifty-four per cent of the total production in China (for the six categories under consideration)

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have been funding investments through loans, which in large parts are not repaid. Government incentives to develop manufacturing (including consumer durables) include favourable tax policies, grants and subsidies. Chinese manufacturers also use network clustering to reduce supply chain costs. India has a scattered industrial set up due to differential tax incentives provided by state Governments.

Lack of economies of scale, absence of a supplier eco-system and infrastructure bottlenecks have constrained the growth of component manufacturing in India.

While India imports most of its component requirements, China sources a large part of it domestically. Further, raw material costs constitute a significant proportion of cost of production for consumer durables. China has a cost advantage in sourcing basic raw material compared to India.

Indirect taxes in India are higher than China leading to comparative cost disadvantage for India. This leads to higher consumer retail prices and hence lower demand. Further, for majority of critical components (in consumer

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durable and toys) import duty in India is higher in comparison to China.

Opportunity for India

Chinese Government has started to shift its focus from export led growth to increasing consumption in the domestic market. Abolition of preferential tax rates for foreign companies, appreciating currency and product recalls have lowered the attractiveness of China as an investment destination. Urban markets in China also have a high penetration for consumer durables.

With its favourable demographics and untapped market potential,

India is emerging as an attractive market for consumer durables.

Recommendations

Key recommendations in the report to promote India as the manufacturing hub for consumer durables include—promoting technology development, taking measures to increase the demand base, rationalising tax policies, incentivising domestic value addition and measures to develop vendor base and raw material supply.

Dr V. Krishnamurthy, Chairman, National Manufacturing Competi-

tiveness Council says, “Consumer durables constitute an important segment of the manufacturing sector. During the last decade China has been successful in developing large home-grown companies, and has grown into a large manufacturing hub for consumer durables. FDI inflows in China have played a key role in transfer of best practices and have also spurred technology development in Chinese companies.

The study also reveals that Chinese Government policies have encouraged domestic value addition through mandatory local sourcing, differential tax rates for domestic manufacturing and mandatory technology transfer through design institutes.

However, consumer durable manufacturing in India is constrained by the absence of a welldeveloped supplier base. Lack of large volumes and an ecosystem of finished goods players, and hence lack of scale economies have been disincentives for significant capital investments in the component manufacturing space in India.

Dr Amit Mitra, Secretary General, FICCI opines, “Of late, India has entered the world map for manufacturing of consumer durable items. However, we still continue to import a large amount of these items from the rest of the world, and especially from China. India imported mobile phones worth $ 2.8 billion during April-December 2008-09. Out of this, 75 per cent of imports were from China alone.

Similarly, we imported around $ 450 million of air-conditioners in 2007-08, out of which 50 per cent imports were from China alone. I think the time has come that India has its own manufacturing facilities for various consumer durable items given the fact that we have a strong domestic market to support it.”

Courtesy: PricewaterhouseCoopers Pvt. Ltd.

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opinion

Outsourcing May Slow Down Apparel Firms

If rapid design of fashion products can capture the latest consumer trends, then spending extra money to get them to market can be well worth the expense and increase profit exponentially. by marguerite rigoglioso

Picture Courtesy: www.photos.com

producing leftover unneeded inventory that will be dumped onto a sale rack, retailers are more likely to get customers to buy early at full retail price. The profit margin increase under this combined scenario is exponential.

Using the more traditional outsourcing models requires long production lead times—generally six to nine months— handicapping success because producers may miss trends or changes in consumer tastes. By timing production to take place a few weeks before the selling season rather than half a year or more, a firm can capitalize on more accurate estimates of demand.

Researchers find that when both rapid production and enhanced design are done together—allowing the latest merchandise to get into the hands of consumers quickly and with little overstock—a firm’s profits increase by up to twice the sum of the extra profits that would have been earned from each activity alone.

“For example, say a firm were to earn 10 per cent more through creating trendy products alone, and 10 per cent more by achieving rapid production,” explains Robert Swinney, assistant professor of

Race to be trendy.

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ost companies in the fashion industry are firmly entrenched in a business model that involves outsourcing production and distributing products through cheaper, ‘slow boat’ channels.

New research at Stanford Graduate School of Business, however, suggests that while this approach seems to make economic sense, it may actually create gross inefficiencies that cause firms to miss out on significant profits.

Researchers say fashion firms are best off when they combine highly fashionable and trendy product designs with short production and distribution lead times—in many cases producing goods closer to home. By getting goods into shoppers’ closets when they are in demand, and not

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- technology management for decision-makers

operations, information, and technology at Stanford Graduate School of Business, and one of the authors of the paper. “If that company were to accomplish both together, it would earn much more than a 20 per cent increase in profits. In fact, it would earn something more like a 40 per cent increase. Fast fashion is thus more than the sum of its independent components.”

The fast fashion system circumvents one particular problem that has long plagued the apparel industry: consumers who wait around for end-of-season sales.

“This phenomenon hurts retailers,” says Swinney, who authored the paper with Gérard Cachon of the Wharton School of Business.

“Fast fashion trains customers not to expect that highly desirable items will be left on the clearance rack,” he says. Because supply is more accurately tied to demand, the good stuff does not linger.

The model shows that combining high fashion with rapid production works extremely well to induce even the most sale-oriented individuals to buy early. In fact, a firm’s profits can spike up as much as 350 per cent among this die-hard group.

Fast fashion is not just good for retailers, say the researchers, it is also good for consumers.

“From a social point of view, 75 per cent of the time fast fashion leads to greater overall welfare,” says Swinney. “People get a premier item that they value highly.

Because production times are short, they get it when they need it. Plus, there is less overproduction and waste.”

“Firms might want to reevaluate the supposed economic utility of this practice,” says Swinney.

“It may be that it is better to have production facilities closer by so that it takes less time to get your merchandise from point A to point B.”

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cover story

Seeking A

Silver lining While the Indian metal casting industry is recognized globally for its quality and innovation, it continues to be handicapped by poor operational efficiencies, low capacity utilization and labour intensive activities. Mechanization, adoption of modern technologies and consolidation of small metal casters are the keys to survival in this intensely competitive sector.

by p. k. chatterjee

T

he casting industry has been going through tough times. Business was sluggish in 2009 due to the global recession, and in the year before that (2008) it witnessed a decline in output (6.8 million tons vs 7.8 million tons in 2007). But, despite the fluctuations in production output, the country has been the fastest growing large casting producing nation in the world. In fact, since 2002, the casting industry here has been growing at about 15 per cent per annum, and the country has increased casting production by more than 100 per cent. Currently the country exports about 300,000 tons of cast products every year.

Huge potential ahead

According to a recent GIA report on Automotive Castings market, “The Indian market for automotive ferrous castings is projected to reach 880.6 thousand metric tons by the year 2015. This is primarily driven by a rapid rise in the domestic automotive market. Additionally, the growing trend of sub-contract manufacturing from developed countries to low-cost nations, such as India, also plays a major role in the production growth for metal castings industry across the nation.�

The report also points out that the automotive castings industry is a competitive industry and recognized as the benchmark for innovation and technology. Metal casters are recognized as preferred suppliers of net-shape, engineered metal components. Automobile segment repre-

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sents the largest market for use of metal castings, as a large percentage of vehicle components are manufactured by metal casting. Thus, the automotive market exhibits significant opportunities for metal casters.

M. Sudharsan, CEO, Vee J Pee Aluminium Foundry, Coimbatore opines, “Castings business has always been an area where practical skills play a vital role. The castings industry has seen quite a lot of changes in the recent past. The market is vast and it is now a global market rather than a small area. The industry has seen a steady growth so far, and will continue to be so in the future, but with more technological improvements.�

Position in the world

As per the 43rd census of World Casting Production, 4,700 metal casting plants (now more than 6,000) were functional in the country in 2008, in that year, India produced 6.8 million tons of casting, which included (approximate figures) gray iron castings weighing 4.5 million tons, ductile iron castings weighing 790,000 tons, steel castings weighing 910 tons and non-ferrous castings weighing 550,000 tons. Thus, India attained the rank of the fourth largest casting producer country in the world.

The GIA report also indicates that gray iron castings dominate the Indian automotive ferrous castings market. The end-use market of gray iron is mainly captured by medium and heavy commercial vehicles. Utility vehicles represent the fastest growing segment for end-use

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application of spheroidal graphite (SG) iron castings.

SG cast iron is characterized by high ductility and high tensile strength, making it suitable for numerous applications, including brake cylinders and axle housing in the automotive industry.

Characteristics of the segment

Foundries constitute the most important secondary metallurgical processing industry in the small-scale sector in India. However, Indian foundries are still highly labour intensive, mainly because of lack of adequate mechanization and non-deployment of modern technologies. Their produvtivity levels are still between 15 to 20 tonnes, beside the global average of 70 tonnes per person per year. Many foundries are still highly polluting, and located at odd places, where accessibility is poor, naturally their product logistics costs increase.

Another characteristic of this age-old Indian industry is—many of the Indian foundries are family owned and managed, whereby they often employ people from the relations or known circle, and obviously the skill is developed over a time through working in the industry.

Thus, foci on full capacity utilization, mechanization, pollution control, waste reduction, energy efficiency and better logistics are still quite limited in many of the Indian foundries.

In fact out of around 6000 foundries, about 1000 are commercially viable, and rest are just gasping with

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cover story their low efficiency and profit margin, where modernization is very essential for survival. As far as quality is concerned, in organized sector, 200 to 250 units are dominating the market even today, and more or less the same number of units are on the verge of restructuring.

Foundry clusters in India

Although, more than 20 foundry clusters have been developed in India, there are many foundries operating in isolation. The major clusters are in Howrah, West Bengal; Kolhapur, Maharashtra; Belgaum, Karnatak; Rajkot and Ahmedabad, Gujarat; Coimbatore, Tamilnadu Batala and Jalandhar in Punjab.

Small scale foundries are mostly operating in an environment of very unhealthy competition, which has created tremendous deficiency of resources, although there is no shortage of demand, if the jobs are uniformly distributed and managements can secure fair price for their productions. Obviously, the impact of cutthroat competition has been reflected through their low or no growth and prosperity. Several units have been

permanently shut down owing to commercial non-viability.According to Dibakar Sarkar, Foundry Consultant from Howrah, “Many foundries have been asked to shift towards far off rural sites to control the pollution level in the city. As far as foundry cluster concept is concerned, the project will take at least 10 to 15 years of time to be complete. However, the cost of space, infrastructure set up cost and business start up expenses in a new place are not bearable for many existing foundry owners.”

Major factors decelerating growth

Power outage is one of the common factors, that is very badly affecting the operations of the Indian foundries.

Dibakar says, formerly in Howrah, they used to see maximum one hour power cut at a stretch. However, now between 6 am to 6 pm, it happens repeatedly—and continuously for two to four hours, only little relief is available between 10 pm to 6 am. Thus, heat loss is a common cause of increasing casting cost. Even use of electric generators as a standby measure is not enough

Q&A

Prosperous Foundries Sham H. Arjunwadkar, Chairman, National Centre for Technical Services (NCTS), The Institute of Indian Foundrymen Next is proper recycling of foundry sand and other materials taking care of environment. Also, cost reduction of material inputs is a big challenge—as the raw materials’ prices are ever increasing. The major raw material for iron foundries is pigiron, the rate of this material is increasing unilaterally, which is a great hindrance for steady growth of the foundry industry.

Q: What are the major factors decelerating growth of the Indian foundries?

A: The first such factor is non-availability of soft finances. The foundry industry needs total capital investment at one time. Once the plant starts operating in full capacity, the cash flows are smooth and enough.

Investors and bankers hardly understand this phenomenon.

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Q: How efficient are our foundries compared to the world standard?

A: Nationally and internationally, the foundries are compared with the type of production they make. Our foundries, which produce automobile castings, are at par to any global competitor. The indigenization of all foreign brands of cars, having manufacturing units set up in India, is progressive with the foundries here. Export is also growing at an estimated rate of around 15 per cent per year.

Our technology and skills are at par with

- technology management for decision-makers

those of the western world. For the machine tool castings and in case of batch quantity requirements, Indian foundries are the best to the world standards. These facts hold true for both ferrous and nonferrous castings.

Q: What are the areas requiring improvement at this moment?

A: To make the mark in international markets, Indian foundries have to achieve larger growth rate, and produce high volumes of the castings. While planning for the new ventures, the foundries should consider the potential for exports and the volumes required.

Q: How can our foundry owners increase productivity by using technology?

A: Latest available technologies for plant and equipment need to be implemented.

Training for running efficient operation and plant optimization is important. The industry needs proper use of computer applications. Indigenously developed and imported software are available in India.

The simulation software reduces the development time, as it helps the right casting come out in the first attempt itself. The rapid prototyping software help in avoiding delay in prototyping, and for subsequent production cycles.

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and economically viable to supply power in absence of supply from utility.

Besides another major cause of concern is shortage of efficient manpower. Sudharsan points out, “Getting skilled and educated manpower is a major problem in this industry. Today’s young graduates prefer cleaner jobs.”

“Lack of proper infrastructure is another area, where Indian foundry owners are incurring business losses,” informs Sudharsan. According to P. Chinnusamy, CEO, Vinayaka Electro Alloys India, Erode, two specific problems or hurdles that are hindering faster growth of this segment are power and labour.

Absorption of modern technology

While it comes to the point of absorbing modern technologies to ease the jobs and make them safer and economic, many foundry owners are not very clear about the ways, and sure about the benefits thereafter. However, in order to enhance productivity, and of course profitability and compliance with pollution norms, technological upgrade is very essential in Indian foundries. Organizations like The Energy and Resource Institute (TERI) and The Institute of Indian Foundrymen (IIF) are working in this field, and they have developed several means to reduce pollution and upgrade the processes. Also, they are in the process of awakening the foundry owners on the necessities of modernization.

One of the admiring steps that TERI has undertaken is an initiative aiming at turning around the conventional cupola furnaces of this industry, so as to make them environment friendly, energy-efficient and profit-making. According to a TERI report, “Incorrect selection of the blower, improper distribution of air, lack of control on feed materials, and poor operating and maintenance practices were identified as some of the reasons behind the poor energy performance of conventional cupolas.” The institute had also taken up a project to bring in energy efficiency in metal casting units in southern India in the recent past.

Coming back to the point of technology absorption from the users’ point of view, Sudharsan feels, “The industry is highly manpower oriented. With recent developments in the technologies, the impact of manpower skills in the process is slowly reducing.

This paves the way to better repeatability and quality control. However, it will take a long time to reach a saturation point in bringing new technologies – which will reduce manpower utilization. Although, India is now a low cost country, the future lies in technological competence.”

Dibakar feels, “Complete mechanization may reduce cost of operation. But right people are ab-

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Q&A

Energy Efficiency Prosanto Pal, Senior Fellow, The Energy & Resources Institute (TERI) Q: What are the challenges in front of the Indian foundries?

A: The Indian foundry industry faces new challenges as well as opportunities in today’s globalized market.

The demand for high-quality castings is rising in both domestic and international markets, even as units face increasing competition from overseas.

Energy costs are on the rise, making it vital for foundry units to find ways to increase the energy efficiency of their melting furnaces. At the same time, stricter enforcement of environmental standards is forcing the foundry industry—to become more conscious about emissions control during operations.

All in all, there is an imperative and growing need for foundry units to improve the quality of their products, and to increase the efficiency of their operations in terms of energy as well as environmental performance.

Q: What are TERI’s offerings for Indian foundries?

A: The cupola is the most common type of melting furnace used by foundries to produce grey iron castings. Cupolas use coke as fuel.

Most cupolas operating in India today are based on designs that were developed at a time when energy and environmental concerns were not as important as they are today. Hence, their performance is sub-optimal in regard to energy efficiency as well as cupola stack emissions.

In this backdrop, TERI has developed clean, energy-efficient technologies for adoption by the small-scale foundry industry under an initiative titled CoSMiLE (Competence network for Small and Micro Learning Enterprises) supported

by SDC (Swiss Agency for Development and Cooperation).

industry 2.0

In order to demonstrate an energy-efficient melting furnace for foundries, TERI and SDC developed a DBC (Divided Blast Cupola) with an appropriate pollution control system, and installed it at a foundry unit located in Howrah, West Bengal in 1998. The demonstration plant was found to be 35 per cent more energy-efficient than the conventional cupola used earlier by the unit. The emissions too were brought down below the most stringent pollution norm in the country.

TERI provides technical assistance to foundries that wish to improve the energy and environmental performance of their cupolas. The services provided by TERI fall under two broad areas, namely—reducing coke consumption through improved cupola design and best operating practices, and reducing cupola stack emissions by recommending a suitable pollution control system that meets the most stringent emission norms prevailing in India.

Q: How is the acceptance level growing among them?

A: Till date, more than 50 DBCs of the TERI design are in operation in various foundry clusters spread across the country. The estimated cumulative energy savings from these DBCs is 10,000 toe (tonnes of oil equivalent), equivalent to a total CO2 of 37,000 tonnes.

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23

cover story sent to assure success of all mechanization projects.

Failure of mechanization is a costly affair.” As per him, in entire Howrah district, there may be ten fully mechanised foundries,

Positive factors and present trends

The major advatageous factor for the Indian foundries is low labour cost. Secondly, huge domestic demand also is a leverage in favour of this industry. Although such development is not happening at a mass scale, of late financially strong companies are taking interest in consolidation of the industry. In the globalized scenario, still as a low cost producer of casting, the opportunity for export business is also widening for the Indian casters.

Focusing on Green operations, Sudharsan says, “It is a long way to go. Educating the companies practically will help. Adopting new technology and the corresponding investment is a hurdle. But, it is inevitable that any industry will go the Green way very soon, since we all love nature.”

He continues, “The present government now seems to be more inclined towards small scale industries. Most

Q&A

A Bright Prospect P. Ramalingam, Managing Director, Ultimate Alloys, Coimbatore Q: How is the overall scenario in the Indian casting industry segment?

A: Production of casting in India is going upward. Indian castings are in demand in many countries these days. Although export ventures are truly profitable, there are some elements of risk involved. Being the mother industry, the market prospect for the casting producers is growth oriented.

Still most of the foundries are in SME sector. They need to seriously address challenges of untrained manpower, old technology, environmental hazards etc. Focus on better waste management is increasing. All challenges can be overcome easily through formation of clusters. Also, at present, lack of adequate power supply and sourcing efficient manpower are two major hurdles on the path of progress of this segment.

As I foresee, in the coming days, stringent pollution norms will hamper growth. Meeting demand of higher wages of skilled manpower will pose another challenge shortly. Also, we cannot mechanise the processes further, so we have to depend on people.

Q: What do you feel about adoption of modern technologies?

A: In our field, technology helps in reducing rejection levels. It tremendously cuts down the time factor by reducing reworks. Also, it helps in cost control. As the industry is moving towards ISO 14001, technological upliftment has to be there.

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(more than 90 per cent) of the casting companies are falling in this category. Even though the pace is slow, this will surely encourage the entrepreneurs in the near future. We do not have to be aggressive like China. India’s growth is and will be robust.”

Future of the Indian casting industry

According to the GIA report, India is likely to emerge as a major centre for castings, worldwide. The industry is being supported by the cluster development programmes instigated by various institutions including The Institute of Foundrymen, to assist medium and small enterprises with quality concerns and technological advancements. The market has the potential to maintain impressive growth rate. Exports are likely to grow due to the increasing demand from global producers of cast metals for low-cost Indian products.

Globalization policy of the Indian government has added a new dimension to the Indian industries in this regard. In addition to the relatively economical labour, India is in a comfortable position due to availability of skilled technical personnel and the ready-to-adopt cultural environment.

However, GIA’s prediction is too much based on an unsaid assumption, i.e., if all other factors remain unchanged... But that is not the case in reality. In the words of Chinnusamy, today in this sector, manufacturing cost is high, the price for the castings are not covering the cost. Again in the previous paragraphs, we have seen that there is a scarcity of skilled labour and educated workforce, naturally whatever continued earlier within the family relationship, i.e., low wage or no wage, labour by family bondage, will no longer continue.

Then again power tariff is already showing upward trend. The country has acute shortage of power supply too. So, maintaining this low cost service with this present status will obviously not be possible for long.

Also, lots of modifications will be required to comply with pollution norms. In the words of Dibakar, “In West Bengal pollution control norms are very strict these days. Without filters, foundries are not allowed to operate. To make the best set up for absorbing pollutants, it costs at least Rs. five to six lakhs worth investment. Alternatively, for a temporary arrangement too, it is a matter of at least Rs. iwo lakhs. How should the small foundries running on minimal profit level afford to survive?”

Thus, to run a foundry effectively and profitably, modernization will be inevitable soon. Reengineering will be very essential to survive in the coming days.

And of course, the (most fundamental yet in many ways far from modern technologies) industry has to come up for consolidation to be competitive, to book profit in the global arena.

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manufacturing technology

“Boundaries between Automation and Drive Systems are diminishing fast” Motion Control is a section of automation, which determines the position and/or velocity of the machines based on pre-set data using some intelligent devices. In this age of auto-controlled modern machinery, this has been an indispensable area of multidisciplinary engineering system design. In a tête-à-tête, K Verma, Head— Drive Technologies, Industry Sector, Siemens, speaks to P K Chatterjee, about the world of modern motion control. Excerpts...

have patented technologies, and prefer high-end open controllers with high-end drives. But in developing nations like India, the market is highly fragmented in the standard segments, and the machine builders expect the controllers to have dedicated features to support their applications. The products in this segment are getting increasingly commoditized with the after sales technical support over the life cycle of the machines becoming major differentiators.

K Verma, Head—Drive Technologies, Industry Sector, Siemens

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What are the upcoming trends in the motion control field?

Motion control is a very broad term, which encapsulates products, solutions and services for production machines, machine tools, material handling and other general purpose applications. The solutions primarily consist of motors and drives integrated with a motion controller. Traditionally, this field has always been considered as specialized and complex requiring multi-discipline mechatronics knowhow. In the advanced segment, the machine builders

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What is the role of automation technology in intelligent motion control?

In recent times, the boundaries between the automation systems and the drive systems are diminishing. With the ‘drives’ getting intelligent through built-in motion controllers, many of the features previously pertaining to automation systems are getting integrated within the ‘drives’.

Intelligent motion control today is supporting open architecture, giving the possibility of interfacing to a non-proprietary user software on a gamut of network protocols. Usability, network capabilities and

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self diagnostics are the new mantras of modern intelligent motion control.

What are the recent developments in the field of multi-axis motion control?

The developments in multi-axis motion control focus around increasing the usability, efficiency, productivity and the reliability of the solution. Some of the significant developments include— electronic name plate system for reading in solution topology, intelligent drive control algorithms to maximize efficiencies and energy conservation, fuzzy logicbased adaptive algorithms for self- optimization of the closed loop control systems to extract maximum productivity out of the mechanics and the redesign of the hardware architecture for better tropicalization.

How can intelligent drives help lower energy consumption?

The quantum of energy conservation depends on the actual application. In variable speed and torque applications, namely fans, pumps, conveyors and centrifugal compressors, the saving is immense and the ROI can

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Machine builders should focus on creating competitive advantages based on value creation, over the complete lifecycle of their machines.”

be achieved even within months.

Today’s control algorithms in the drive systems help in taking out the maximum performance with optimized consumption. The servo motors are designed with improved magnets to increase energy efficiency. Also, today we have active front end drives that can regenerate and feed back the excess kinetic energy to the connected mains. Depending on the mechanicals and the application involved, the energy conservation on this account can be substantial.

What is your opinion on the designing ability of the Indian machine designers from the angle of motion control?

Indian machine designers are fairly competent in their knowhow of machine design, and they have the ability to quickly adapt to complex and advanced concepts. But, the market trend of following the leader into the standard segments constricts the creativity and scope of the Indian designers. This is also partly due to the end users’ preference for imported machines—when it comes to buying a high-end machine.

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Are high prices of the motion control components posing a big challenge for Indian machine designers?

Talking about price alone for such products and solutions is not wise, as this should be looked upon based on the performance requirements, coupled with productivity advantages. In this respect, one should look at price—performance factors and lifecycle cost of ownership. Even if these are primarily imported, the pricing is as per global market standard. The main challenge for the machine designers in India is the pressure on the costs due to the commoditization of the segments they want to play in, and the competition therein. This finally translates into an expectation of cost reduction from the bought out components of which the motion control system is one of the biggest contributors.

How is the motion control equipment segment growing in India?

In a developing economy like India, the capital goods manufacturing segment always shows a sustained growth. With growth in

food and beverage sector, automotive, auto ancillaries, textiles etc., the market drivers are in place to maintain a sustained demand for the entire range of motion control applications. This ensures a robust growth in motion control equipments.

What is your advice to the Indian machine designers who are using motion control devices?

The machine builders should focus on creating competitive advantage based on value creation over the complete lifecycle of their machines rather than getting into price wars with standard offering. The focus also needs to shift from standard segments to advanced, high-end segments, which are more lucrative and are being largely catered to by imported machines. Of course, the focus of this segment has to be on improving the flexibility, efficiency, reliability and durability of the equipment in addition to general aesthetics. A possible avenue can also be a close cooperation with academia to come out with innovations to foster new technological trends.

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manufacturing technology

“A motion simulation software simulates the motion instantly”

Ravi Varadarajan Technical Manager—India & SAARC Dassault Systèmes SolidWorks

Along with simulating structural performance with finite element analysis (FEA), today engineers also need to determine the kinematics and dynamics of new products before building prototypes. Motion simulation, also known as rigid body dynamics, offers a way to solve those issues. In an exclusive interview, Ravi Varadarajan, Technical Manager— India & SAARC, Dassault Systèmes SolidWorks, talks to P K Chatterjee on various features and advantages of motion simulation mechanism. Excerpts...

What is the role of motion simulation for mechanism analysis and synthesis?

Take the instance of where an engineer is designing an elliptic trammel meant for tracing different ellipses. When he has defined mates in the CAD assembly, he can animate the model to review how the components of the mechanism move. Although assembly animation can show the relative motion of assembly components, the speed of motion is irrelevant and timing is arbitrary. To find velocities, accelerations, joint reactions, power requirements etc., the designer needs a more powerful tool. This is where motion simulation comes in.

In this case of the elliptic trammel, the designer needs only to decide the speed of the motor, the points to be traced, and the motion results that he wishes to see.

The program does everything else automatically, without the user’s intervention. The motion simulation program uses material properties from the CAD parts to define

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inertial properties of mechanism components, and translates CAD assembly mating conditions into kinematic joints. It then automatically formulates equations that describe the mechanism motion.

Unlike flexible structures studied with FEA, mechanisms are represented as assemblies of rigid components and have few degrees of freedom. A numerical solver solves the equations of motion very quickly, and results include full information about displacements, velocities, accelerations, joint reactions and inertial loads of all the mechanism components, as well as the power necessary to sustain the motion.

What are the advantages of this process?

The simulation of the motion of an inverted slider mechanism presents an exercise commonly found in textbooks on the kinematics of machines. Here, the objective is to find the angular speed and acceleration of the rocking arm, while the

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crank rotates at a constant speed.

Several analytical methods can solve the problem, and the complex numbers method is perhaps the most frequently used by students.

However, solving such a problem by hand requires intensive calculations, and even with the help of computerized spreadsheets, it may take a few hours to construct velocity and acceleration plots. Then, if the geometry of the slider changes, the whole thing has to be repeated.

This is completely impractical in real life product development. Motion simulation software makes it possible to simulate the motion of the inverted slider practically and instantly, using data already present in the CAD assembly model.

Motion simulation also checks for interferences, and this is a very different process from the interference checking available with CAD assembly animation. This conducts interference checks in real time, and provides the exact spatial and time positions of all mechanism components as well as the exact

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interfering volumes. Even more, when the geometry changes, the software updates all results in seconds. Each and every result pertaining to motion may be presented graphically or tabulated in any desired format.

Engineers can represent simple mechanisms as 2D mechanisms.

Although these are difficult and time-consuming to analyze by hand, they do possess analytical solution methods. However, for 3D mechanisms, even simple ones, there is no established method of analytical solution. But motion simulation can solve the problem easily in seconds.

What are its other features that help product designing?

In addition to mechanism analysis, product developers can use motion simulation for mechanism synthesis by converting trajectories of motion into CAD geometry, and using it to create a new part geometry. Take the instance of a cam that should move a slider along a guide rail, and use motion simulation to generate a profile of that cam. You can express the desired slider position as a function of time and trace the slider movement on the rotating blank cam or the round plate. Then you can convert the trace path into CAD geometry to create the cam.

Designers can also use trajectories of motion, for example, to verify the motion of an industrial robot, and test the toolpath to obtain information necessary when selecting the size of robot needed, and to establish power requirements—all without the need for any physical tests.

Another important application for motion simulation relates to motion induced by collisions between moving bodies.

How does a motion simulation program work together with FEA? To understand how motion simula-

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tion and FEA work together in mechanism simulation, it helps to understand the fundamental assumptions on which each tool is based.

FEA is a numerical technique for structural analysis that has come to be the dominant CAE approach for studying structures. It can analyze the behaviour of any firmly supported elastic object. The word ‘elastic’ means the object is deformable. If with the application of a static load, a bracket acquires a new, deformed shape, and then remains motionless, the application of a dynamic load causes the bracket to vibrate about the position of equilibrium. FEA can study displacements, strains, stresses and vibration of the bracket under static or dynamic load.

In contrast, a partially supported object, can rotate without having to deform. A flywheel can move as a rigid body, which classifies the device as a mechanism rather than as a structure. To study the motion of the flywheel, we use motion simulation.

How can motion simulation and FEA be combined?

The procedure for combining the use of motion simulation and FEA is undertaken in five steps.

First use motion simulation to find displacements, velocities, accelerations, joint reactions and inertial forces acting on all components within the range of motion selected for study. In this step, all the mechanism links are treated as rigid bodies.

Then find the mechanism position that corresponds to the highest reaction loads on the joints of the connecting rod.

Now, transfer those reaction loads, along with the inertial load from the CAD assembly, to the connecting rod CAD part model.

The loads, which act on the connecting rod isolated from assembly, consist of joint reactions

and inertial forces. As per the d’Alambert principle, these loads are in balance, making it possible to treat the connecting rod as a structure under a static load.

A connecting rod subjected to a balanced set of static loads is assigned elastic material properties, and submitted to FEA. FEA performs structural analysis to find deformations, strains and stresses.

Is it possible to analyze existing mechanism designs?

Motion simulation is capable of importing time-history data from a test. This way a motion of an existing mechanism can be easily reproduced and fully analyzed including all joint reactions, inertial

The use of motion simulation integrated with CAD, and not interfaced with CAD, greatly reduces the effort required to set up motion simulation models.” effects, power consumption, and more, using inexpensive computer models. In a similar way a mechanism can be analyzed under input defined by an analytical function.

How does integration of CAD, motion simulation and FEA benefit?

Both motion simulation and FEA use a CAD assembly model as a prerequisite for analysis. A common, integrated environment for all three tools facilitates the data exchange among CAD, motion simulation and FEA. Integration avoids cumbersome data transfer via neutral file formats, typical to standalone applications. In addition, the use of motion simulation integrated with CAD, and not interfaced with it, greatly reduces the effort required to set up motion simulation models.

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materials & processes

Shifting The Paradigm Towards Practical Manufacturing Sheet metal forming simulation bridges the world of design with practical manufacturing. Simulation helps determine whether a particular sheet metal can be formed into the desired shape with a particular process, before actually taking up the job in workshop.

This eliminates chances of failure. by rajneesh shinde

Extensive use of numerical simulation during product development can reduce cost and time spent on soft and hard tooling.

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S

heet metal forming is a combination of many complementary processes that are used to form sheet metal parts. One or more of these processes is used to take a flat sheet of ductile metal and mechanically apply deformation forces that alter the shape of the material. Compared to casting and forging, sheet-metal parts offer the advantages of lightweight and versatile shapes.

Developments in the numerical modeling of stamping processes and experimental measurements now make it possible to design stamping processes using sound engineering principles. In addressing the demand for higher quality products in shorter time, designers of sheet metal components have turned to virtual simulation. The goal is to produce

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tools which form the product ‘right first time’. Simulation was initially used to ‘trouble shoot’ a production problem, but is now being used to design and try out the tools before any metal is cast.

Sheet metal forming simulation assessment includes not only formability, i.e., splitting or wrinkling, but also quality, i.e., impact line location, movement of features, springback and surface conditions. Complex forming sequences with multiple operations, including trimming, can be analysed. Simulation allows the designer not only to confirm formability, but also to optimise the process, examining different materials, blank shapes, tool loads, lubrication and drawbeads etc.

It will enable designers and manufacturers to decide on key questions like– l Which materials can be used to make formed parts? l What are the material characteristics that make it useful for forming operations? l What are the material properties which enter into determining the characteristics of the formed part? l How much force is required to shear the blank? l How much deformation can be imposed on the blank when it is being formed? l How much should the blank

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be over-bent to compensate for springback?

In the automotive industry, in particular, we are not only experiencing intense competitive pressure to slash product development time and costs, but also the advent of new and aggressive styling and componentry. At the same time, the industry at all levels is expected to shorten the time spent on feasibility studies and tool development for stamped parts. It is an exciting adventure in efficiency and innovation.

Using CAE to transform the stamping process

Accumulated wisdom in the design room and on the shop floor still count a great deal. But industrial organizations are shifting their efforts from the traditional trial and error method to concurrent engineering. Extensive use of numerical simulation in product development can drastically reduce cost and time spent in soft and hard tooling. Both academia and commercial firms are working to develop these virtual simulation analyses.

Some of the best CAE programs have been designed today to help the stamping industry meet cost, time and methodology issues. These programs can import and export a wide range of popular CAD/CAM file types and formats. For example, Altair HyperForm is a finite elementbased (FE-based) sheet metal forming simulation tool, which has been enhanced with a die module and an interface for incremental analysis.

While simulation models harbour great sophistication and

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innovative power, for designers and engineers to try out ‘what-if’ situation, the program can address the practical needs of the stamping industry as it exists today. It brings manufacturing feasibility early in the product design stage. With this technology, it is now possible to go directly to hard tooling, eliminating soft-tooling activities and product modifications.

Now users can generate a conceptual die design to assess its influence, and thus generate an optimized die.

The module creates geometric enti-

ing—by enabling engineers to create and analyze conceptual die designs in order to generate an optimized die. Die concepts can then be read into any CAD system as a starting block for the actual die build.

Advertiser index

Benefits of FE-based simulation

Exxon Mobil .................... IFC,31

l Introduces forming feasibility criteria early in product development. l Provides a powerful tool to modify and verify multiple process scenarios. l Predicts the blank size for improved material utilization.

DHL ..........................................3

Haas Automation.....................5

Swagelok .................................7

JCB ...........................................9

Pramet Tools ......................... 11

Product Data to Final Die Rockwell Automation ........... 13 ties like surfaces and lines can easily be read into any CAD package. The user begins with the raw product data, identifies the product outline, a punch opening line and the outer boundary line of the binder.

Some of the most comprehensive FE-based sheet metal forming simulation software solutions have three basic modules to assist in—early product feasibility, process evaluation and final validation. At any stage of product design, they provide engineers with quick, valuable, reliable information, reducing the overall product cycle.

In-built die module facilities bring the product designer closer to manufactur-

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l Visualizes wrinkles and splits and fixes problems before cutting any steel. l Drastically reduces the overall product cycle.

Jaws MFG CO. ....................... 19

Future of concurrent engineering

Western Digital ..................... 25

Whether it is motor vehicles, boats, aircraft, industrial products, medical products or the world’s greatest golf club, engineering and FE-based tools migrate into the manufacturing world.

The real goal of manufacturing simulation is to eliminate the soft tooling step in metal forming.

Frost & Sullivan .....................51

TaeguTec .............................. IBC

Delta...................................... BC Rajneesh Shinde is the Director, Marketing, Altair Engineering India.

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facilities & operations

ImprovIng ng Qual QualIty In

Pharma manufacturIng Picture Courtesy: www.photos.com

For pharmaceutical and medical-product companies, adopting world-class manufacturing processes can create a competitive advantage by reducing regulatory risk and production costs. by anil g d’souza, david j keeling and richard d phillips

T

he world’s leading manufacturers—including producers of semiconductors, and of goods for the automotive, aerospace and electronics industries—constantly refine their processes for measuring and controlling product quality. In pharmaceuticals and medical products, however, quality control has historically taken a backseat to innovative science and compelling marketing, the standard drivers of the industry’s profitability. Recently, though, industry executives have had no choice but to sit up and take notice, as poor quality and related compliance issues have cost the industry more than $700 million in fine since 2001, and billions more in lost revenues. Addressing compliance matters eats up big chunks of management’s time and attention and, in some cases, has led to increases of more than 20 per cent in the cost of goods sold.

While some pharma companies are improving their manufacturing quality substantially, many

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more have been slow to study and achieve world-class practices.

They may not feel the imperative for change until a major compliance issue occurs. Rather than building quality into and across manufacturing processes themselves, many companies have used the risky and costly method of trying to ensure quality by removing defective products during inspections. This approach is not sustainable, especially as the Food and Drug Administration (FDA)—the US government’s main oversight body for the industry—and other regulatory agencies have shifted their focus to monitoring not only a company’s outputs, but also its processes and systems.

In the face of a challenging regulatory environment, some leading pharmaceutical and medical-product companies have found ways to improve quality and costs significantly. To drive this kind of beneficial change, companies must first create a culture where quality objectives are transparent,

- technology management for decision-makers

well understood and undoubtedly important. Then managers must focus resources on the product and process attributes truly critical to delivering quality products.

Adding quality measures to manufacturing processes midstream, simplifying quality and compliance-management systems, and working to monitor and measure quality performance effectively will combine to raise quality and lower the risk of compliance issues. Companies that succeed in implementing these changes can create a competitive advantage through superior performance on cost and quality - they dramatically reduce variability, the risk of noncompliance, and time to market while freeing up funds for investment.

What should change?

As the pharmaceutical sector has grown—revenues in the United States are three times greater than they were a decade ago, while those in Western Europe have doubled during that time—

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final product, enhance manufacturing and quality processes and better allocate resources devoted to quality.

quality. They walk the floor on a regular basis, calling attention to quality targets posted at the end of lines and making sure that targets are set, and that managers address such issues.

These managers send a strong message when they ask about quality performance on every possible occasion. l Frontline workers are meaningfully and regularly engaged in improving the company’s quality performance. After all, corporate leaders and even senior engineers don’t necessarily know when a particular machine is the root of

Create a quality culture

Leading pharma companies gather insights on their current quality culture through interviews, surveys and focus groups. At one company, such an effort found that accountability for quality performance wasn’t at all clear to its employees.

Senior leaders didn’t stress the importance of quality through their own behaviour, and key employees lacked the capabilities—from technical expertise to communication skills—needed to manufacture high-quality products. Armed with these insights, the company developed a plan to fill in the capability gaps.

The resulting changes to the organization and employees’ behaviour led to a rapid and measurable shift in the company’s approach to improving quality. Within about a year, people across all levels could articulate quality objectives and aspirations and a new sense of empowerment emerged around the ability and responsibility of employees to raise and address potential risks. l Senior leaders learned key cultural messages and now continually reinforce them through corporate communications, staff meetings and site visits. Whenever the CEO discusses operational objectives, for instance, he says that one of the ultimate goals is to achieve industry-leading performance on critical quality metrics. Other senior managers are advised to ask plant managers and staff questions about quality at every visit. l Plant supervisors are trained to model and coach the desired behaviour in order to improve productivity and manufacturing

Picture Courtesy: GlaxoSmithKline

regulators around the world have become more sophisticated in ensuring that drugs are safe and effective. As late as the 1980s, for instance, the primary focus of the FDA was to prevent fraudulent drugs from reaching consumers.

By the late 1990s it focused more on the drugmakers’ processes.

Today, the FDA has taken a much more systemwide approach to evaluating the quality of pharmaceutical manufacturing plants and networks.

But some pharma companies haven’t adapted well. Many continue to focus mainly on near-term regulatory inspections and have been spending increasing amounts of money to fix problems only after they arise.

The common pitfalls of this approach include gaps in identifying important sources of variability, insufficient and ineffective testing during production and a failure to resolve quality issues in a timely manner. Such flaws can add up to big problems—and big fines.

New processes that help pharma companies keep up with best practices in manufacturing can significantly reduce compliance risk at low cost. Although a small team of managers must focus on driving change, large investments in people or equipment typically are not required to transform a company’s quality culture and performance.

CEOs, heads of operations, heads of quality and other senior managers play an important role in promoting such changes. They must clearly and visibly commit themselves to understanding employee mind-sets around quality and to changing the attitudes and behaviour of everyone from other senior leaders down to line operators. In addition to creating a culture where quality comes first, operational leaders must learn which product attributes matter most for the calibre of the

a serious quality problem. To get workers to contribute, the company first ensured that they had the right technical expertise. Operators received additional training on how to monitor variability in production processes. Team leaders and supervisors have the authority and confidence to stop production lines for recurring problems, and to put together the right teams to fix them. In addition, quality performance is a part of individual and team performance reviews and the company publicly rewards em-

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New processes that help pharma companies keep up with best practices in manufacturing can significantly reduce compliance risk.

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facilities & operations ployees who receive top scores for their efforts.

The tasks involved in achieving such a cultural transformation, while often straightforward, are critically important and most pharma companies simply aren’t undertaking them. Creating a corporate culture where every employee understands the importance of, and takes responsibility for, quality propels all the components of an improvement initiative.

Creating an efficient, effective quality system

Picture Courtesy: GlaxoSmithKline

Beyond sweeping cultural change, the next step toward manufacturing high-quality products—and achieving regulatory compli-

A streamlined quality system makes it easier to find and remove wasteful activities.

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ance—is identifying the handful of factors that really affect quality.

Many pharma companies haven’t taken the time to map out the specific product attributes and processes that truly matter. In one case, we saw a company spend as much time perfecting a drug’s colour as it did ensuring the drug was effective and had an adequate shelf life.

In our experience, it is not complicated to identify and rank key quality attributes of most products. To determine which ones are most important, operations managers can tap internal

april-may 2010 | industry 2.0

sources, including the sales, marketing, product development and technical staff. External sources, such as physicians or customers, can also contribute invaluable insights, particularly on ranking customer needs, which can vary from product to product. Taste isn’t highly valued for painkillers, for example, but for children’s cough syrup, it might be quite important. Many companies don’t spend sufficient time on this step. Instead, they devote inordinate amounts of time to complex internal processes and extensive, often redundant, authorization processes to support noncritical activities.

Once pharma companies identify the product attributes that most affect quality, they can work to align their efforts with those attributes. To achieve consistency on the most critical ones, an ideal quality and compliance system should properly allocate resources. But many pharmaceutical companies have overly complex systems. Since these companies have not identified the few factors for each production line that are critical to the quality of the end products, they often test and retest too late in the process. Many of these screenings have limited value and result in missed opportunities to identify and isolate variability upstream.

A streamlined quality system makes it easier to find and remove wasteful activities in quality processes. One pharma company significantly raised its efficiency when it simplified the complex physical layout of its manufacturing facility and encouraged workers not to leave unmarked tools and supplies lying about.

Before the change, the laboratory staff spent 60 per cent of its time walking around, moving supplies and tools from one workstation to another, talking, or waiting—and adding no value. After the com-

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pany applied best practices, it cut that time by 50 per cent.

Another way for pharma companies to make their quality systems more efficient is to work harder at building quality measures into the manufacturing processes themselves. Rather than inspecting finished products and therefore failing to generate insights into the causes of defects, world-class manufacturers monitor the performance of production lines and predict the variability that may result in defective products. As we noted, changing employee mind-sets and the organization’s culture can spur successful changes of this nature. These efforts translate into hands-on, practical improvements in day-to-day work.

We observed one example of such a change at a medical-product maker whose line workers frequently identified defective products at various points and immediately took them offline without halting production.

The workers would then fix the defects and reintroduce the goods into the production line without trying to determine why a defect had occurred or working to prevent it from occurring again. After they discontinued this practice, the company uncovered and addressed important problems and improvement opportunities.

First, executives discovered what frontline employees had apparently known for a long time—that because defective products had been taken offline, repaired, and put back online, an artificially high number—90 per cent or more—passed the first inspection, when in reality only 30 to 50 per cent should have been approved. For one product line, managers learned that they should aspire to a true first-pass inspection acceptance rate (the percentage of products that meet specifications without any

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Manage―and measure― quality performance

A push to make quality central to a company’s culture should increase transparency around such issues throughout the organization, both before and after problems occur. One common mistake can inhibit this kind of progress: using large numbers of metrics— up to 50, at both the plant and corporate level—often without consistent definitions. When choosing performance metrics, operations leaders should concentrate on tracking the few that matter, such as first-pass yields, internal quality observations or quality cycle times to help plant managers understand what drives better performance.

Knowing the first-pass yields of a particular manufacturing line, for example, can be critical. Yet this same metric may be meaningless when aggregated at the corporate level across different products, lines and plants.

Similarly, the number of FDA penalties imposed on a company may give senior corporate employees an indication of its overall

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Picture Courtesy: www.photos.com

rework) of at least 95 per cent.

Then the company documented the reasons so many products would have failed the initial quality inspection. Armed with this knowledge, the company improved the manufacturing process, significantly lowered the risks related to poor quality and focused on the attributes critical to quality.

It took more than 18 months to implement the design changes fully, but a few process fixes yielded almost immediate results. Within just six months the manufacturer doubled the first-inspection acceptance rates of several product lines. As a result, quality is now embedded in the manufacturing process and cycle times are 20 per cent shorter.

regulatory performance but is not actionable for any one plant.

In our experience, many pharma companies can apply techniques from other industries to improve quality performance.

Simple tools placed along the production line—such as whiteboards with important line-level metrics, as well as depictions of what defective devices, tablets or other products actually look like—are vital to increasing transparency and promoting constant improvement.

It is critical for the shop floor to make and ‘own’ process changes, but as with any major change-management effort, sustained improvements in manufacturing quality ultimately depend on the commitment of leadership.

For pharma companies, this commitment cannot be limited to the executive specifically responsible for quality; all leaders must work to create a culture where quality products are a top priority. Such turnarounds require a relentless focus on the most important drivers of quality, a determined effort

to build quality into manufacturing processes and a commitment from the leadership to align management processes with this goal.

Pharma companies that move too slowly to address this challenge risk much higher costs and much more trouble from regulators.

Indeed, a significant benefit of a greater emphasis on quality is a better relationship with regulators. Although a spirit of collaboration cannot be achieved overnight, it can lead drugmakers and regulators to share information and insights. Such a shift from a purely transactional, audit-based dialogue to a more productive, collaborative one can help companies shape manufacturing processes more efficiently and further improve quality.

Sustained improvements in manufacturing quality ultimately depend on the commitment of leadership.

Anil D’souza is the Associate Principal, David Keeling is the Director and Ric Phillips is the Principal in McKinsey’s Chicago office. This article was first publised in September 2007 on The McKinsey Quarterly Website, www.mckinseyquarterly.com. Copyright (C) 2010 McKinsey & Company. All rights reserved. Reprinted by permission.

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facilities & operations Integrated Strategy Management:

Helping Realise the Goal of Success In a world of cut-throat competition and newer products hitting the market, it is imperative for companies to be abreast of latest technology advancements and business strategies. An integrated strategy management system promises to help companies chart out new growth plans.

Picture Courtesy: www.photos.com

by n c narayanan

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- technology management for decision-makers

I

ndia as a nation went through the onslaught of colonial rule for over two centuries and today it is a 60 years young economy. The country has witnessed two economic environments, namely ‘protected economy’ and ‘globalization’— paradoxically opposite ideologies.

In the era of protected economy, all industries enjoyed ‘seller’s market’ in which the quality and customer focus was casuality. Industries hibernated as there was little pressure from competitors. However, the globalization policy and privatization brought in tremendous competition, and the demand for better products and services.

This gave rise to an era of ‘Buyer’s market’ where the industries were forced to take customers seriously. This approach requires a different mind-set and management systems and practices.

“We shall have no better conditions in the future, if we are satisfied with all those, which we have at present,” said Thomas Edison. While this statement is definitely true, in these days of increasing awareness and demands by the customers, the statement can be re-written as “we shall have worse conditions in the future, if we are satisfied with all those, which we have at present.”

Quite often, organizations initiate implementation of continuous improvement processes like Kaizen, Lean and Six Sigma, as a bottom-up initiative without linking it with the corporate strategies and goals.

While this results in some improvement in the initial stages, but in the long run, the processes vanish. That is because these are not inculcated as a culture but introduced as a ritual, which is neither understood by the people practicing it, nor is there any great involvement from the management.

These fragmented approaches never get into the DNA of the organizations.

A company could have had good growth in the past and could have become No 1, in the particular industry in which it is operating. Reaching the top is great, no doubt, but retaining that position forever is much harder. How long will the company retain the top slot?

Growth can never be a one-time incident, it has to be a continuous happening, for the company to stay forever in the place it has reached today. There is an old saying, “The higher you go, the harder you fall.” The

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ISM

ISM is a system developed by integrating Six Sigma, lean, balanced scorecard and business excellence models. This package is customized to suit the unique nature of the organisation.

ISM helps align the people and the processes with the corporate objectives and goals. The system aims at institutionalizing and internalizing the concept of continuous improvement processes by every member of an organization.

Every person’s contribution to achieving the company’s goal is emphasized, everyone understands that his personal growth is linked to the growth of the organization. This helps ensure that processes that are being introduced, not just stay as practices but nurture them as a culture that stays for ever. By introducing this, the management creates a structure wherein every person involved in a process, from beginning to end, coordinates voluntarily to achieve the organization’s objectives.

ISM helps the management develop vision statements, make strategic plans that will involve

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Picture Courtesy: www.photos.com

reason for this could be nothing more than ‘complacency’.

It is generally seen that once a company reaches where it originally was intended to reach, complacency seems to set in the minds of the people responsible for its growth. This complacency begins in the board room and percolates down to the employees of the organization over a short period of time, thus bringing the whole structure down.

This fall can only be avoided by following continuous improvement processes that combine the vision and strategy of the company, and integrate it with the personal goals. This should again begin at the board room and should percolate down to the employee at the last level.

the people of the organization as a whole. To achieve this, the management is made to take into account, the employees’ personal needs, goals and show them how their personal goals and the company’s goals can be integrated.

Implementation of ISM involves the following: l Envisioning and strategy planning l Project management l Program management l Process management l Performance management l Employee engagement

Conclusion

World-class organizations like Sony and Toyota believed in continuous improvement processes, and embarked upon introducing them years ago. That is how they still maintain the ‘worldclass’ image. If the improvement process is not continuous, today’s No.1 organization will become the nth organization in a few years’ time.

ISM is a system developed by integrating Six Sigma, lean,

balance scorecard and

business excellence models.

After Independence, India did not have any great advancements economically, or technologically.

We had a single airline to depend on, all the banks were run by the government, all the big industries were owned by the government, and the quality standards were nowhere comparable to global standards. If we had left it like that, where would our country be today? Only because the flood gate of globalization opened up, we are here striving to match the quality standards of world-class companies, and we have a long way to go.

N C Narayanan is Founder & Managing Director of Six Sigma Alchemy.

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supply chain & logistics

Ensuring Uninterrupted Supplies In A Retailing Environment In an increasingly competitive and global marketplace, retailers, find it a big challenge to increase sales and ensure product availability. To ensure improved forecast accuracies and lower inventory costs, they are now adopting a ‘flow-through distribution’ model to match demand data with supplies. by ramesh babu pv

I

n recent years, retailers have been seeking to bring in competitive differentiation in the supply chain through application of improved methodologies, such as cross-docking, direct store deliveries and mergers in transit.

Despite these process changes, retailers are unable to achieve the full potential of the gains available to them, as they lack the technology that enables real-time visibility across the supply chain.

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To resolve this challenge and to bring in a more holistic perspective into their operations, leading retailers are now adopting the ‘flow through distribution’ model to transform themselves into a demand-driven supply chain organization.

The key drivers for adopting this model includes: reduced order fulfillment time, increased product availability and reduced inventory-holding cost. Broadly defined, the ‘flow through distri-

- technology management for decision-makers

bution’ model consolidates and matches demand data from stores with incoming supply to the distribution centre; re-directing those to the most profitable shipping staging areas of the store—all delivered on the same day.

The process of ‘flow through distribution’ for a retailer works in the following ways: l Stores forecast the demand based on previous sales history l Forecasted demand for all stores is consolidated l Based on consolidated forecast, a purchase order is raised to the supplier l The supplier accepts the purchase order and sends an acknowledgement to the retailer l The supplier dispatches the products, and sends an advance shipment notification (ASN) to the distribution centre

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Note: Stores can modify the demand until the material reaches the distribution centre. l The distribution centre receives the material against the ASN. From this point, no changes are entertained on the demand front l The distribution centre distributes the material based on the latest demand from the stores l The distribution centre ships the material to the stores l The stores receive the material from the distribution centre

When to use ‘flow through distribution’?

‘Flow through distribution’ model can work for the best in the following business scenarios.

The ‘flow through distribution process’ Store

Distribution Centre

Start Stores Forecast Demand Demand Forecast Consolidate for All Stores Purchase Order Released to Supplier

Purchase Order Accepted

Individual Store Modify Demand

Receive Material Against ASN

Receive Material from DC

Ship to Store

End

SKUs with regular demand and high volume: It is crucial that retailers conduct SKU profiling based on demand and volume to arrive at a decision on implementing the ‘flow through distribution’ model. Adopting the approach helps seamlessly synchronize demand with supply, reduces inventory costs and increases product availability in stores.

For example, apparel retailers realize that ‘white shirt’ has a regular demand pattern and

Key benefits of ‘flow through distribution’ ● Increases product availability on retail shelves ● Reduces order fulfillment cycle ● Integrates supply chain planning and execution processes ● Reduces labour costs in warehousing

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Ship Material & Send ASN

Based on Store Demand Move Inventory to Ship Staging Lane

New stock keeping unit (SKU) introduction: ‘Flow through distribution’ ensures that no inventory is sitting idle in the warehouse and ensures faster distribution to the store. It ensures that the right quantity of the product is available at the right store.

Supplier

high volume, and hence an ideal candidate for flow through.

Challenges in implementing ‘flow through distribution’ Some of the challenges involved in implementing flow through distribution are:

When not to use ‘flow through distribution’?

Demand pattern of the SKU is intermittent: The best way to handle a scenario, in which the demand is intermittent, is to stock the SKU in a central warehouse, and distribute it based on demand. Essentially, SKUs that fall under ‘C’ class should not be a part of a ‘flow through distribution’.

Supplier reliability is low: ‘Flow through distribution’ works well when both demand and supplier reliability are high. If the supplier reliability is low, it will involve extra touch points at the distribution centre and hence defeat the purpose of ‘flow through distribution’.

Individual demand from the stores is lesser than the incoming supply: There may be situations where the demand at the point of receipt is lesser than the total supply of the SKU by the supplier.

Total store demand lesser than supply Store Hypermart 1 Store 1 Hypermart 2 Store 2 Store 3 Total Demand

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Demand at time of PO creation (in Cases) 100 10 125 10 5 250

Demand at time of Receipt in DC (in Cases) 100 5 75 5 5 190

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supply chain & logistics This discrepancy could be owing to low forecasting accuracy or a sudden drop in demand. In this situation, the warehouse management system (WMS) needs to ensure that the inventory lacking demand is directed to the storage location in the distribution centre. This inventory can be used to satisfy any future demand from stores.

In the scenario (illustrated on the previous page), the supplier supplies 250 cases to the distribution centre, with the result that the centre has an outstanding demand of just 190 cases. The remaining 60 cases are sent to the storage location and not to the shipping staging area.

Supplier short supplies: The approaches that can be adopted to handle short supply include the following methods.

Distribute based on store priority—Traditionally, individual stores are given priority based on the store priority and accordingly SKUs are distributed. There is a shortcoming in this method.

Take for instance a scenario where the retailer has different types of stores—hyper marts and small stores. If the hyper marts are given higher priority than the small stores, there may arise a situation where only hyper marts get supplies and no supplies happen to reach the smaller stores.

In the scenario (illustrated below) cited top-right, the total demand is for 300 cases, while the actual supply is 175 cases.

Distribution based on store priority Store

Store Priority

Demand (in Cases)

Distribution based on store priority

1 2 1 2 2 250

125 25 100 30 20 300

125 0 50 0 0 175

Hypermart 1 Departmental store 1 Hypermart 2 Departmental store 2 Departmental store 3 Total Demand

There is a shortage of 125 cases.

Based on the store priority (For example, 1 - High, 2 - Medium), distribution is as shown in column 4. As observed in the table, departmental stores have received ‘0’ cases.

In order to avoid a ‘nonsupply’ to small stores, we need to ascribe high priority to smaller stores as well. Application of this approach to the scenario will result in a distribution pattern as illustrated above.

Store Hypermart 1 Departmental store 1 Hypermart 2 Departmental store 2 Departmental store 3 Total Demand

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1 2 1 2 2

Final words

As retailers move towards adopting a more demand-driven supply chain, it is imperative for them to use flow through distribution.

Distribution based on modified store priority Store

Store Priority

Demand (in Cases)

Distribution based on Store priority

2 1 2 1 1

125 25 100 30 20 300

100 25 0 30 20 175

Hypermart 1 Departmental store 1 Hypermart 2 Departmental store 2 Departmental store 3 Total Demand

Round robin distribution—If the distribution is based on store priority, we may end up not sup-

Distribution based on round robin method Store Priority

plying to some stores. In order to avoid such a situation, we can adopt round robin distribution— thus ensuring that at least one case of the SKU is supplied to all stores. Once this condition is satisfied, distribution can be based on store priority.

Demand (in Cases)

Distribution based on Round Robin method

Distribution based on Store priority

Total Distribution to Store

125 25 100 30 20 300

1 1 1 1 1 5

124 0 46 0 0 170

125 1 47 1 1 175

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Some of the salient benefits accruing from adopting the ‘flow through distribution’ model are: l Increased product availability achieved through effective order management at the store-level l Reduced inventory costs achieved through synchronization of demand with supply l Integrated supply chain management (SCM) achieved through integration of supply chain planning and execution functions. n Ramesh Babu PV is a Senior Consultant at Supply Chain Practice Group in Infosys.

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supply chain & logistics

Penetrating the

RuRal

india

The rural market may be hard to crack. It has enormous potential for companies that can develop an effective supply chain. by gagan seksaria & amit joshi

I

n his book titled, Achieving Rural and Global Supply Chain Excellence: The Indian Way, Professor Viswanadham of Indian School of Business points out that rural supply chains lack sophistication. He is right. Given the lack of roads and viable means of transportation, firms have to navigate through a labyrinthine maze of fragmented, improvised, long and inefficient channels for gaining access to rural markets. To overcome infrastructure bottlenecks, a multitude of regional manufacturers serving a narrow geographical market have cropped up.

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The mushrooming of local production and ensuing brand clutter has created differentiation challenges for national firms, which has been further exacerbated by widespread production and marketing of copycat products and fake brands. While customers demand improvements at ever-lower prices, producers and distributors in India are facing increasing competition in nearly every product category.

The traditional methods of supply chain design and management do not always apply in the Indian environment, owing to its complex tax regulations, non-standardized transportation, uncertainties across the value chain, and low rate of technology adoption. In this context, some of the key challenges of setting up and operating a rural focused supply chain in India are: Poor road infrastructure & fragmented transportation service: India

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has one of the world’s largest road networks, yet less than half of the roads are paved. Kachcha roads become unserviceable during the monsoon and interior villages get isolated. Over 86 per cent of India’s truck owners own just one truck, making the market dismally fragmented. This results in multiple vendors, co-ordination challenges, administrative overheads and service delivery challenges. These challenges though true for the urban environment as well, become amplified in the rural environment due to lack of communication options and remoteness of operation.

Suboptimal head loads as well as lack of return loads from several pockets makes it expensive and difficult to get timely transportation services.

Lack of common user warehouses: Owing to fragmentation and inconsistent cargo patterns, there is a dearth of quality common user

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warehouses in the rural region.

This makes it a challenge for new companies to attempt distributing in the market without making significant capital investment.

Distribution: An effective distribution system requires villagelevel shopkeeper, Mandal/ Talukalevel wholesaler or preferred dealer, distributor or stockiest at district level and company-owned depot or consignment distribution at state level. However, there are often 5 to 6 intermediaries in the rural distribution system, increasing the complexity and cost of distribution. However, supply chain minds are always at work and it was reported late last year that Hindustan Unilever Limited (HUL) has successfully removed a layer called ‘Star Sellers’ from its rural distribution system. Now, the distributor is expected to serve the retail outlets directly. In return for this benefit of greater and direct access to the market, his commission has been reduced by 2 per cent.

High wastages & breakages: Owing to lack of an efficient cold chain connecting rural produce to urban consumption centres, there is a high level of wastage of perishables moving outward from rural areas. At the same time, due to poor transportation, untrained handling and bad roads, there is a lot of breakage in items being distributed within the rural supply chain.

Lack of intermodal integration: After a certain point in the supply chain, goods have to ride several suboptimal last mile delivery modes that include camel carts, rickshaws, hand carts and asses, causing inefficiencies and lack of accountability in the supply chain system. Most of rural India does not have sufficiently developed intermodal integration points which adds to the handling frequency, expense and administration.

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Seasonal demand: Demand for goods in rural markets depends upon agricultural situation, as agriculture is the main source of income. Agriculture to a large extent depends upon monsoon and, therefore, the demand or buying capacity is not stable or regular. On the other hand, demand forecasters often fail to be prepared and well supplied at the time of demand spurts. These seasonal or sudden factors prevent supply chain teams from building a productive and a well utilised supply chain.

Lack of organised 3PL focus: Advent of 3PL players in India is still a novel phenomenon with most quality players concentrating on their urban infrastructure and marketing set up. As the marketers gear up to the rural opportunity, there will be a significant and sudden opportunity for organised 3PL players to address it.

However, for every rural distribution challenge, there are ten success stories. Companies, known for their romance with the rural, such as Coca Cola, Hindustan Unilever, ITC, Hero Honda and Bajaj, saw this market as a significant investment opportunity at least a decade ago and have, since, invested money and effort to build an effective marketing mix as well as an efficient supply chain network across India.

Innovations in rural market penetration

Coca Cola and its three As: Coca Cola, which took a sharp aim at the Indian rural market at the beginning of this decade has invested significant time and money to unlock the potential of this market, not only for itself but for the entire carbonated beverages category. Coca Cola had realised early that simply making its products available in this low per capita cola consumption market will only equal getting the horse to the water. To make it

drink, it worked on all ends of its rural penetration strategy, in tandem, summed under their 3 As—Affordability, Acceptance and Availability.

We all watched their strategy unfold on our TVs in our drawing rooms as Coca Cola gained Acceptance—Aamir Khan playing the Hyderabadi in Thanda Matlab.., Affordability—through their ‘Paanch Matlab Chota Coke..’and Availability, by creating a trusting network of over 5,500 distributors who were motivated to travel 200 kms to deliver order sizes of less than a case in a village with five kirana shops.

HUL’s Project Shakti: Hindustan Unilever’s (then Hindustan Lever) Project, Shakti, was born in December 2000 in a district called Nalgonda in Andhra Pradesh. The idea was to extend the company’s reach into the untapped and highly inaccessible markets of rural India, beyond the reach of HUL’s already extensive rural distribution network. In addition, a social objective was to provide sustainable livelihood opportunities for underprivileged rural women.

Shakti distributors are rural Indian women who partner with HUL to receive training in microbusiness skills, which includes a Personal Digital Assistant

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Over 86 per cent of India’s truck owners own just one truck making for a fragmented transportation system.

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43

supply chain & logistics to access product prices. They purchase HUL products at cost and sell them to their villages for a profit, thus introducing HUL products beyond the typical reach of HUL’s distribution networks.

Project Shakti operated in media dark areas where television advertising could never reach. It moved the marketplace frontline away from local outlets who would champion other products into the homes of families in the remotest of areas. Today, 44,000 Shakti distributors cover lakhs of villages across India discussing matters of personal health and hygiene and recommending a product from the HUL stable whenever the conversation demands such. HUL expects to have a 100,000 of these power ladies by the end of this year.

information on prices, but had the choice to sell their produce either at the local market or directly to ITC at their hub locations. A hub location services a cluster of eChoupals. By purchasing directly from the farmer, ITC significantly improved the efficiency of the channel and created value for both the farmer and itself.

While the eChoupal network was initiated to facilitate more efficient and effective procurement, the connectivity—both physical and informational—between the farmer and the market has allowed ITC to use it for distribution of goods and services from the market to the farmer, thereby creating a two-way distribution system. Over the next decade, the eChoupal network is expected to cover more than 100,000 villages, representing one-sixth of rural India, and create more than 10 million e-farmers.

Other innovations

ITC’s eChoupal network was initiated to facilitate more efficient and effective procurement of agricultural products.

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ITC’s e-Choupal: ITC’s foray into an enhanced distribution network came from the recognition that the existing agri-produce distribution channels were inefficient. The company exports various agricultural products soyabean, rice and wheat, to name a few. It needs to source them from farmers.

In 2000, ITC embarked on an initiative to deploy technology to reengineer the procurement of soyabeans from rural India.

Kiosks—called eChoupals—consisting of a personal computer with Internet access were set up at the villages. Soyabean farmers could access this kiosk for

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While the examples have been widely admired and studied in business schools and board rooms across the world, there are several cases of ongoing innovation by companies with the intention to accelerate entry into the rural Indian market.

The role of microfinance companies in rural distribution of unrelated products is undeniably large. Microfinance companies, through their extensive rural network, have close and trustful access to large rural communities, which they can extend to distribution of third party products and services.

Hero Honda has set up healthcare initiatives and services to guide people in getting driving licenses. Through its rural focused marketing initiative called ‘Har Gaon, Har Angan,’ the company hopes to increase throughput of its already extensive dealer network (Hero Honda has over

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60 dealerships in Haryana alone, which means that there is a dealership within 30 kms of any resident of Haryana).

The rural market makes up 17-18 per cent of the country’s Rs 1 lakh crore domestic pharma market. Novartis introduced the Arogya Parivar model, which aims at ensuring delivery of advice on various illnesses through its network of rural representatives as well as availability of products at same prices but with different pack sizes.

Hariyali Kisaan Bazaar and Godrej Aadhar are involved in setting up rural focused retail chains that, besides facilitating trade with farmers, also render farm advisory services, credit facility to farmers, information on weather, price, soil and water testing facility.

Tata Khet Se is an example of a rural-to-urban supply chain focused on providing sales opportunities to farmers at the point of their farms as well as training and advice on growing certain key products with strict controls that they in turn market to restaurants, hotels, flight kitchens and retail chains.

Tata Ace and Mahindra Gio, rural focused mini-trucks, represent the willingness of the manufacturer to customise its product largely according to the needs of small and rural India.

To conclude, though the complexities of the India supply chain may appear overwhelming at first; understanding and mastering them is a critical success factor for an organization attempting to serve customers in India. An efficient India supply chain design will help better position companies in what is becoming an increasingly competitive marketplace.

Gagan Seksaria & Amit Joshi are associated with the Supply Chain Leadership Council.

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supply chain & logistics

Selecting The Right 3PL Service Provider While third party logistics (3PL) is playing a key role in supply chain business, selecting the right 3PL player is a herculean task. by vikas anand

The 3PL market is projected to grow at a compound annual rate of 30 per cent during 20102012.

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W

ith growing impact of globalization, there is an increasing pressure on companies to achieve efficient supply chains. Manufacturers across all the sectors and industries are utilizing the services of integrated service providers who can help them rationalize inventory management and manage noncore activities.

In India, the automotive industry and retail are at the forefront while using 3PL, due to the large

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number of Stock Keeping Units (SKUs) involved. The government’s focus on improving logistics infrastructure is also having a positive impact on the 3PL market. Although, Indian 3PL market pales in comparison with developed markets such as the US and Japan, the future is bright for the market, due to the infrastructural development being witnessed in India. There is a huge growth opportunity for the warehousing business in India. Special Economic Zones (SEZs) are one of the major driving forces for the business in the country.

Sensing the market potential, 3PL providers in India are gearing up to meet the growth demand by offering a wide array of tailormade services ranging from packaging to supply chain planning. The last decade has seen the 3PL providers transitioning from a local or regional business to one that offers national or global coverage.

The size of the 3PL market is definitely hard to gauge. Since its evolution in the 90s, the 3PL market has witnessed a significant growth during 2000 and the following years. According to some estimates, the number of participants in the sector has grown to be more than 400 service providers, and the 3PL market is projected to grow at a compound annual rate of 30 per cent during 2010-2012.

The 3PL providers market can be divided into three distinct tiers, viz., national major 3PL companies with nationwide presence; regional 3PL companies with strong presence in one or two regions and small 3PL companies.

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Today, 3PL service providers are expanding their basket of services including customs clearing, forwarding, inbound warehousing, labeling, packaging, fleet management, order picking and inventory management.

The 3PL companies are currently offering varied types of services. At one end are conventional freight forwarders involved in transportation of shipments from one location to another, while, at the other end are 3PLs who can execute complex end-to-end supply chain projects involving multiple countries and multiple modes of transport.

In the past few years, 3PL providers have emerged as strategic partners who are playing a significant role in optimizing the supply chain and providing sustained competitive advantage.

Therefore, choosing the right 3PL service provider could be one of the biggest challenges for any company looking to rationalize inventory management and manage non-core activities.

A company looking for a 3PL service provider may have to consider a variety of factors. Before deciding the right 3PL player, the company has to take into account its plans, future objectives, product lines, expansion and acquisitions. Currently, there are three types of 3PL. They are classified as asset based, management based and integrated providers.

Asset based: Asset-based 3PL companies use their own trucks, warehouses and personnel to operate their business.

Management based: Management-based companies provide the technological and managerial functions to operate the logistics functions of their clients, but do so using the assets of other companies and do not necessarily own any assets.

Integrated providers: The third category, integrated providers,

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can either be asset-based or management-based companies that supplement their services with whatever services are needed by their customers.

Choosing the right player

A competent 3PL player will offer integrated solutions to optimize the supply chain, reduce the cycle time and provide better customer responsiveness. Information technology (IT) plays a key role in rendering these services. More sophisticated 3PLs embrace IT to enable better coordination of activities by providing tracing and tracking facility to its customers.

While there are no standard guidelines for choosing the right 3PL player, some of the key aspects a company has to look for are the strengths of the player in terms of number of warehouses owned and fully controlled, does the player have the required warehouse space, dock capacity and trained personnel. In addition, one must ensure whether all the warehouses are computerized and linked via Internet and whether the 3PL player is offering online tracking facility.

With globalization and newer technologies emerging, it is critical that both parties have the physical resources and accessibility to meet each other’s needs. Issues such as real-time data sharing and ongoing timely responsiveness are essential in providing a seamless supply chain. IT compatibility is vital for providing global logistics services such as purchase order visibility, cross-docking support, forecasting, inventory replenishment and life cycle management. The company looking for the right 3PL player must ensure whether it has an in-house logistics partnership with a major player.

Other factors that one should weigh before choosing a 3PL service provider are the fleet

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strength, whether they can provide all the required services in a single window format and whether they offer tax and excise assistance. Most importantly, when choosing the right 3PL

Look for

Player’s geographical locations Fleet strength l Financial soundness l Reputation and experience l International profile l IT capability l Number of warehouses l Number of warehouse personnel l Warehouse space l Dock capacity l Real-time data sharing l Ongoing timely responsiveness l l

player, one must ensure that the player is financially sound and whether the service is branded or not, as a branded player with an established presence is almost always a safe bet.

One must also make sure that the 3PL player is reputed and has a history of helping high profile clients. Those companies that have international commitment should ensure if the 3PL service provider has an international profile or tie-up. The 3PL service provider should be capable of offering value added services such as WMS, customization, transportation, import-export, sea-freight and air-freight.

When selecting a 3PL, one must also find answers to questions such as Is the 3PL a good cultural fit? Does it have the right technology to carry out the tasks?

And can the 3PL player respond effectively to changes? In addition, when selecting a 3PL player, one must ensure that the player’s geographical locations are suitable to cover the entire network.

An efficient 3PL provider will customize services to meet your

specific supply chain needs. In addition, when choosing a 3PL, one must consider aspects such as the scope of the contract, including locations, facilities, departments, information on volumes involved, the logistics tasks to be performed, number of deliveries, warehouse sizes and number of items, among others.

Conclusion

While the growth opportunities in 3PL are bright, the 3PL players must understand the business priorities of the client and how the supply chain enables the client to meet their business goals.

On their part, the companies looking for the services of 3PL players must define their supply chain priorities. Before taking a plunge, the companies should understand whether the player is focused to deliver innovations at a fast pace.

Vikas Anand is Director Operations, DHL Supply Chain, India.

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supply chain & logistics

Race Winning The

By Mobilising Strengths In The Logistics Front

Gearing up with a future vision is important for any global company in order to keep its customers happy worldwide. The investment made in improving supply chain has to be seen with a new paradigm, it is nothing but creating a wider avenue to avail benefits of the opportunities at the right time of overall economic improvement. How has an international brand improved its warehouse facility anticipating a huge business potential ahead?

The facade of the new automated high bay warehouse

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D

uravit’s journey began over 190 years ago, when the company set up a small factory in the Black Forest town of Hornberg in Germany. Production initially focused on earthenware, followed by ‘sanitary sinks’ at the beginning of the 20th century. The company has since been committed exclusively to ‘living bathrooms’ and today covers the whole spectrum of bathroom interiors, taking

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in sanitary ceramics, bathroom furniture and bathtubs plus the wellness segment.

The company’s bathroom design are now exported to more than 90 countries throughout the world. This has led to a strong growth in recent years, with Duravit’s sales more than doubling in five years. The highest levels of growth has been attained out of Germany, with foreign markets accounting for almost 78 per cent of total sales in 2008. Thus, in order to keep its customers happy worldwide, the company needs to be specifically careful about its logistics operations.

Tackling the growing need for organised logistics Foreign expansion has imposed the highest demand on the company’s logistics department.

As a 100 per cent subsidiary of Duravit, Duralog Logistik with its

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centre in Achern is responsible for ensuring that the deliveries run smoothly according to plan throughout the world.

An Achern-based workforce of 80 is entrusted with this task.

Optimum planning by the team assures Duravit top service ratings worldwide, and provides a vital competitive edge. On this sound footing, the company is keeping its sights set firmly on being the number one in logistics. Having expanded the logistics centre only three years ago, Duralog has now once again undertaken an investment in the double-figure million Euro bracket, installing a new, fully-automated, high-bay warehouse in Achern.

Reliable delivery system helps in business expansion

Thomas Braig, head of Group Logistics and managing director of Duralog Duravit Logistik says,

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“Duravit would not have been able to conquer the foreign markets so quickly without an absolutely reliable delivery organization, effective services and the ongoing worldwide availability of all products. As such, the success on the sales front is also a success story for us at the logistics level.”

Braig’s team was charged with the task of developing the logistics organization as a necessary part of a fully-integrated overall concept. The experts from Duralog teamed up with a planner to address the challenge of expanding capacities, also focusing in particular on speeding up and optimizing the order-picking process, and the handling of single-line and mixed pallets.

At the same time, Duralog was also intent on creating additional capacities in order to integrate the three remaining external warehouses. Both semi- and fully-automatic options were considered for the new warehouse building.

Following a thorough analysis, Duralog decided in favour of an automatic warehouse with curvenegotiating, rack-serving units and teamed up with LTW Logistics, Züblin and Saar Lagertechnik for its construction.

New and existing facilities dovetailed to perfection

Measuring 105 x 51 metres and 26 metres in height, the new building offers space for 20,000 pallets at various storage heights.

The storage locations offer maximum flexibility. They are suitable for Euro pallets, or industrial pallets, with varying loads according to product, generally at heights between 1.8 and 2.2 metres. The warehouse has 12 aisles along which four curvenegotiating storage and retrieval units (SRUs) travel.

The SRUs are capable of handling over 200 pallets per hour. As storage capacity has priority over

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speed of distribution for Duralog, four SRUs are sufficient for the 12 aisles. A 10-metre high bridge, which runs through the existing manual warehouse, incorporates the new building into the overall logistics set-up. On the bridge, a 270-metre conveyor system transports the pallets automatically between the different storage areas. “The original manual warehouse and the new automatic facility run together like clockwork,” says Braig.

At the automatic warehouse end, the pallets are transferred directly to and from the conveyor by the SRUs at a height of ten metres. The pallets to be transferred to the conveyor are retrieved from storage beforehand by the SRUs. Conversely, the SRUs place in storage the pallets which are collected from the conveyor. In the manual warehouse area an elevator transports the pallets from the 10-metre bridge to a groundlevel intake station. Workers then transport the pallets containing single-line dispatch orders from the intake station to the loading

gates by means of fork-lift trucks, or pallet trucks.

Pallets containing goods for order picking are conveyed to the corresponding picking stations.

Container management and pallet distribution are organized by means of a paperless barcode system employing hand-held scanners, or stacker terminals. The concept, as a whole, thus offers Duravit the utmost in flexibility.

Duralog is now able to handle 40 per cent of goods as single-line pallets, while the remainder continue to be processed as pick-andpack jobs.

Virtually all single-line pallets proceed directly from the automatic warehouse to the outgoing goods area. Service providers collect orders with single-line pallets and with picked pallets according to allocated routes.

To optimize transport logistics, Duralog has also installed a truck-routing system. As a part of a 24-hour handling set-up, this routing system allocates the loading gates automatically during the peak times from 6 am to 11 pm,

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The existing warehouse. Spot the elevator in the picture.

It helps lift the pallets to bring them to the conveyor.

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supply chain & logistics and optimizes traffic at the site.

It additionally integrates courier services such as DHL or TNT into operations at the site, thus also enhancing their efficiency. “At a traffic volume of around 60 trucks and trailers a day, we needed a parking and routing system to optimize handling and keep the loading yard clear,” explains Braig. The new routing system also includes a new reception area for drivers.

Duralog has been certified as an environmentally-aware company, and it prefers to work together with similarly certified transport service providers.

Conveyors transporting pallets from the existing logistics facilities to the newly automated high bay warehouse.

The conveyors were built in the bridge that is illuminated at night.

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Delivery reliability across the board

The variety of products from Duravit is destined to become an even greater challenge for the company’s logistics organization in the future. Duravit’s range comprises several thousand articles and is continually expanding. One or two new projects (entailing a host of articles) are launched every year.

The global economic crisis has even prompted Duravit to up the pace of its development efforts, not only initiating a completely new series—but also establishing three new business segments in 2009—ceramic kitchen sinks, pools and saunas. Duralog generally handles bathroom furniture and ceramic

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products, such as toilets, bidets or washbasins in boxes on Euro pallets or industrial pallets.

Bathtubs, pools and the new Inipi sauna, on the other hand, are usually packaged in boxes on several individual pallets.

The Bathtubs & Wellness segment, which was only established in 2002, has developed dynamically overall. Duralog displayed due foresight by creating almost 7,000 new pallet spaces for the worldwide distribution of these products back in 2006, representing an increase in capacity of around 50 per cent. Special drive-in racking was integrated in the course of this expansion process. These measures enabled the company to bring delivery reliability up to Duravit standards in the area of bathtubs, too.

The Group’s Logistics department is concerned with the ongoing optimization of service levels and delivery reliability across all segments. It organizes the worldwide availability of all products by means of software-assisted calculations in rolling quarterly planning. The IT-supported process extends beyond the production plants to include the distribution warehouses abroad. The logistics experts teamed up with their IT colleagues some years ago to establish transparent processes by means of the Duravit ERP system DIAS. This has resulted in the company attaining a delivery reliability level of over 98.5 per cent for its core products.

Investment in the future

“This new warehouse is important to the entire Group. It helps us to remain ahead in the field of customer service. In view of the factories closing all around us all over Europe, we are glad to be in a position to undertake such investments,” comments Franz Kook, Management Board Chairman person of Duravit AG, from

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a Group perspective. Duravit benefits here from its good equity ratio. Only a minor dividend has been paid out to shareholders for some years now, leaving 90 per cent of annual profits within the company for further investments.

This enabled the manufacturer to complete the construction of a new plant in India and to open new showrooms in Egypt and Tunisia in 2009, for example.

“The plan is now for all our 2009 investments to bear fruit and yield profits,” informs Kook.

In keeping with these plans, the management board has already budgeted a slight increase in sales for 2010. In contrast, 2009 saw an unintended ‘blip’ in the company’s growth, and its first ever drop in sales. The company nevertheless has no plans to tinker with its personnel structures. “We want to be ready for take-off, as soon as things start picking up again,” insists Kook. The company is all set to mobilize all its strengths on the logistics front.

A brief chronology of the central warehouse

Duralog Duravit Logistik has almost 100,000 square metres of space at its disposal in Achern, around a quarter of which is currently in reserve. Construction of the facilities proceeded in various phases. Work on construction of Duravit’s new central warehouse in Achern began on January 24th, 2001. In 2006, Duralog expanded the capacity of the logistic centre by 50 per cent. This was in response to the increased requirements arising from Duravit’s success in the bathtubs plus wellness segment. A major portion of the space added in 2006 was thus earmarked for the storage of bathtubs in the most diverse shapes and sizes in special racking.

Text: Duravit AG Photos: Duralog Logistik GmbH, Achern

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Overview Frost & Sullivan finds that the total logistics market in India earned revenues of $75.19 billion in 2009, representing about 6.2 percent of the country’s GDP. The market is expected to reach $120.42 billion in 2014, witnessing a CAGR of 9.9 percent between 2009 and 2014.

However, Indian Logistics Service Providers (LSPs) lag significantly below end-user expectations on key performance criteria such as attitude of staff, process improvement capabilities and material safety.

• Mutual evaluation and collective effort to arrive at the most appropriate supply chain strategies to meet future needs

Key Areas of Discussion • Frost & Sullivan's Perspective – Future Supply Chain Strategies for India Inc. • Industry Outlook - Logistics End-user's / Providers / Supply Chain Trends: Automotive and Retail Industry • Future Need Assessment for Indian Industries - Logistics Capability, Maturity - Logistics Service Providers and End users

Keeping in perspective the challenges faced by the LSPs and End Users, Frost & Sullivan’s Transportation and Logistics Practice is organizing an exclusive strategy workshop ‘Future Supply Chain Strategies’ from 14-16th July 2010, at The Golden Palms Hotel & Spa, Bengaluru, India.

• Workshop I: Setting up a Robust and Dynamic Supply Chain - Relevant for Today, Scalable for Future

The workshop intends to ensemble a network of today’s best thinkers, visionaries and thought leaders, from across key industry sectors such as Automotive, IT Hardware & Telecom Equipment, Retail and Pharmaceuticals in India, for a specific and definite purpose of developing future supply chain strategies.

• Cross Pollination Opportunities across Industries in Supply Chain Practices

Advantages of Participating in the Workshop • This workshop provides deep know-how in deploying, managing, and optimizing logistics challenges, improving performance, increasing availability, reducing implementation time and meeting expectations of end-users which is a critical business challenge • This platform will provide insights and specific tools for actionable strategies for future supply chain issues faced by stakeholders in supply chains (logistics service providers and users) within the key industry sectors • Interact with representatives from end-user industries presenting their views on the current status and path ahead for supply chains of their respective industries

• Workshop II - Future Transportation Practices / Strategies, Future Warehousing Practices / Strategies, Future Integrated Logistics Strategies

Whom to Expect Leading Companies from the Key Industry Sectors like • Automotive

• IT Hardware & Telecom Equipment

• Pharmaceuticals • Retail Leading Providers of Logistics Infrastructure in India like • Operators of Airports and Seaports, • Owners of Logistics Parks and Free Trade Warehousing Zones • Operators of Inland Container Depots and Container Freight Stations • Material Handling Equipment Providers • Supply Chain Technology Solutions Providers Investors

Frost & Sullivan welcomes you to be an integral part of this Interactive – Solution Path Finding – Only One-Of-its kind Strategy Workshop!

Event Registration Fee For 1 Person: Rs. 100,000/- + Service Tax @ 10.30% For 2-3 Persons: Rs. 90,000/- (per person) + Service Tax @ 10.30% Includes event compendium, stay at The Golden Palms Hotel & Spa during the event, breakfast, lunch, cocktails & dinner at the venue, pick up and drop facility from the Bengaluru Airport

National Magazine Partner:

Media Partners:

To Register and know more about the event contact: Amrita Nandi, Corporate Communications, P: +91-33-4009 9337, M: +91 99034 33364; E: amritan@frost.com Srinath Manda, Industry Analyst, Transportation & Logistics Practice, P: +91-44-4204 4500 Ext. 491; M: +91 98848 72788; E: srinathm@frost.com Subir Shah, Senior Consultant, Transportation & Logistics Practice, P: +91 22 4001 3431; M: +91 99875 41051; F: +91 22 2832 4713; E: subir.shah@frost.com www.frost.com/futuresupplychainstrategies

supply chain & logistics Richard J Bolte Jr President & CEO BDP International

“Technology alone is not enough” Global logistics company, BDP International, recently established a new joint-venture company in India, in association with Mumbai-based Unique Global Logistics.

The company has set high goals for growth in the Indian market. Inspite of the slight setback suffered during the global recession, the company is hopeful of bouncing back and emerging victorious in the Indian market. Richard J Bolte Jr, President & CEO, BDP International, in an interview with Reshmi Menon, discloses the company’s future plans and its growth agenda for the Indian market.

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april-may,2010 2010 | | industry industry 2.0 2.0 -- technology technology management management for for decision decision--makers makers

Following the joint venture, what are your immediate plans for the Indian market?

BDP’s plan in India is to build a solid track record of performance excellence and earning the markets’ trust, one day and one customer at a time. Our promise is to provide a real alternative to our larger, less agile competitors.

How would you describe the potential of the Indian logistics market?

The constraints of freight logistics and transportation in India have been widely reported.

However, BDP’s business model is not predicated on growth through asset-based sales channels. Rather, BDP is about sharing the value of our autonomy; the latitude we enjoy to evaluate, recommend and manage transportation, or logistics solutions, which match up well with a customer’s need. In In-

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dia and in every market in which we operate, BDP’s value proposition runs contrary to the idea of one-size-fits-all. We see great potential for international shippers doing business to and from India, who want to be treated like a customer rather than a commodity.

What are the goals of BDP International as far as the Indian market is concerned?

Speed, talent and technology are BDP’s most precious assets.

We believe in putting the best technology tools the hands of the best people, and in giving them the freedom through a flat organizational structure to make front-line decisions quickly with our customers. Our aim in India is to get things done—and done well—for our customers.

How did the global recession impact your business?

Like other companies involved in international trade, BDP saw a substantial contraction in business during the first-half of 2009—many of our large multinational customers saw the bottom drop out of demand. However, unlike other companies in the logistics sector, BDP’s family-owned, non-asset based status enabled us to avoid the scourge of tight credit markets, retain healthy balance sheets and stay focused on our customers at a time when they needed us most.

In fact, we were able to bring significant new business into the pipeline in 2009, as others were hunkering down to ride out the storm. We learned a lot about ourselves in 2009. I am proud to say, it was our employees around the world who pulled together like an extended family, positioning BDP to accelerate out of the recession, as others continue to be weighed down by slow, bureaucratic structures and unprofitable assets.

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What will be BDP’s marketing strategy for India?

As a privately-held company, BDP has a culture that focuses on providing customized solutions to each customer, in contrast to the one-size-fits-all business models of the mega-companies in freight consolidation and freight forwarding.

As more of the world’s largest manufacturers and retailers establish their operations in India, BDP sees an opportunity to contribute to the growing need for specialized logistics services.

One area where BDP is an acknowledged leader is the chemical sector, which accounts for 13 to 14 per cent of India’s total exports and 8 to 9 per cent of total imports. BDP has the track record of working with the largest chemical and petrochemical companies in the world. The company expects to benefit from the sector’s growth in India over the next 10 years.

But we will not just be targeting India’s expanding chemicals market. We also see excellent opportunities in the fields of life sciences, healthcare, retail, telecom, manufacturing and the energy industries.

How has IT enhanced the functioning of logistics management?

Beginning in the late 1970s, the quality of information about shipments became just as vital as the physical movement of cargo. Over the past 30 years with business globalization and the emergence of supply chain management as a source of competitive advantage—upstream and downstream—visibility has taken an added strategic importance. Today, shipment tracking and tracing are only the price of admission. While enterprises doing business on a regional or global scale want to reduce the per-unit cost of delivered

products, the absence of upstream visibility has been a blind spot in the precise execution of international purchase orders.

Global traders want better visibility, understanding and control of suppliers and lifecycle of purchase orders, to optimize inventory and make supply chains perform more productively.

One of the IT visibility tools we will bring to our customers in India is called BDPSmart Vū, a native portal that empowers importers to do business directly in real-time with vendors and suppliers from one central site. Smart Vū will enable all parties to view the progress of an order from the time it is received through actual discharge and all the critical milestones in between.

Global traders want better visibility, understanding and control of suppliers and lifecycle of purchase orders, to optimize inventory and make supply chains perform more productively.”

How do you foresee the growth of the logistics software market in future?

The demand for visibility can be quantified by the fact that the world market for supply chain management software and services, estimated at $6.5 billion in 2008, is now expected to double by 2013.

However, the future of logistics software reside where there is a combination of talented people with an ability to evaluate business intelligence (data), and transfer it into practical information and knowledge—leading to better strategic and front-line decisions. Technology alone is not enough.

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information technology

y a W Long To Go by shashwat d c

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- technology management for decision-makers

n Technology adoptio s ic within the logist y segment is still fairl gital di low, resulting in a s the divide that separate ogood from the not-s But . ns good organisatio . things are changing

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Picture Courtesy: www.photos.com

T

he queer thing about logistics is that though, as a sector, it accounts for hundreds of crores in the GDP, the players in the segment are obsessed with saving every paisa that they earn.

Consider this. Logistics major Gati has offices at over 400 locations in India and connects close to 600 districts in the country through its fleet of vehicles.

Each time, it is able to cut down on travel between its disparate offices through operational efficiency, precious money and time are saved. Little wonder, GS Ravi Kumar, CIO, Gati, while taking decision for IT implementation on multi-crore projects, is always conscious about saving every rupee. “For us at Gati, IT investment is not a cost, but an instrument for controlling costs,” he clarifies.

Indeed, IT can play a major role in increasing the operational efficiency of logistics players, especially when it comes to the express cargo segment. Yet, investment on IT by logistics players in India is, at best, paltry, with most of the players seemingly satisfied with lower hanging fruits like computerisation of offices or implementation of primitive warehousing solutions.

According to a recent study by Kale Consultants, while 48 per cent of the logistic companies in the country considered IT critical for their operations, only 24 per cent of the companies were found to be above average in terms of technology adoption.

And, 86 per cent of the companies were found to spend less than 1 per cent of their revenues on technology adoption!

Haves and have-nots

Fragmentation of the market is the main reason, according to Ajay Chopra, CEO, Drive India Enterprises. “The Indian mar-

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ket comprises a huge chunk of unorganized players who dot the landscape. While in the organised sector, the use of IT has been fairly high, the same cannot be said of the unorganised sector.

According to a recently published study, IT investments by the Indian logistics industry accounted for some Rs 400 crore in 2007 and were set to rise to Rs 1,000 crore by 2013. It goes without saying as to who will be spending this money,” he adds.

With the opening of the markets and the entry of large players like DHL, Fedex and others into the domestic scene, there is a clear line that separates the big and the small players. While companies like DHL and AFL have brought with them processes and practices that are followed at an international scale, the small-time Indian players have been found wanting on both vision and inclination to spend on technology.

This has resulted in a clear contrast in the way the big players use technology to deliver customer services like real-time tracking of shipments, while the older ones still harp on the power of proof of delivery (POD).

In fact, the push for technology adoption often comes from customers’ side.

“It is the customer who more often than not drives the need to implement the latest technology. For instance, customers, who have in the course of travel or work interacted with DHL internationally, are accustomed to very high service standards.

We have to replicate that in India.

Hence, for us, customer satisfaction is the ultimate guide when it comes to making any decision, be it a strategic one, or one related to IT investment,” affirms Prasad Dhumal, Senior Director of IT, South Asia at DHL Express.

The economic slowdown is the reason why technology is being

For us at Gati, IT investment is not a cost but an instrument for controlling costs.”

GS Ravi KumaR CIO, GaTI

increasingly used to boost productivity in the logistics sector. In the past few years, players across the board, even the small and medium ones, have suddenly become conscious of the need to automate their systems and be more efficient. One domestic company that has been designing software solutions for the logistics vertical, Four Soft, talks about the trend.

“Technology is no more a mere differentiator, or competitive edge any more. It is a necessity for the logistics industry to improve customer service, ensure retention and win new customers. It’s the only way the industry can face the stiff pressure to reduce costs and increase productivity. The

Indian logistics industry

to spend Rupees 1,000 Crore on IT over five years.

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information technology the plight of Unni Nair, Manager IT, Aramex, who had to deal with huge amounts of transaction and customer data. “It was a big challenge for us. Much like the banking sector, we also need to keep historical data. That often poses a challenge, as there is no off-the-shelf solution to meet our requirements,” he states. Currently, Aramex has deployed a mix of storage solutions ranging from NAS to tape storage.

While challenges of each player might be unique, there is still the common thread... admin, finance, payroll, HR and enterprise asset management ...”

Rod StRata IndusTRy PRInCIPal TRansPORTaTIOn & lOGIsTICs saP asIa

conviction to adopt latest technology has crept in and the increasing flow of RFIs and RFPs is a proof of this realisation,” states Umashankar S, VP (marketing) at Four Soft.

Overall, the most commonly used IT solutions in the industry are Warehouse Management System (WMS) for managing inventory, Transport Management System or Location-Based Services (LBS) for tracking fleet movement, Freight Forwarding System (FFS) for handling custom clearance for international movement, Webenabled services for collaborating with agents and vendors online, and Track and Trace Solutions (TTS) for tracking shipment over the web and mobile phones.

Another crucial requirement of the sector is the need for data storage and back-up. Consider

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Build versus buy

One of the most common refrains that emanates from almost all CIOs in the industry, is the lack of need-specific solutions for the players. While ERP has become a basic requirement that interconnects different functions within the company, most companies in the cargo sector still use custombuilt software. The reason, ccording to many, is that unlike other sectors, like manufacturing or banking, logistics is a very heterogeneous sector where company’s way of functioning is often at odds with that of another. This was the reason why Gati decided to build its own solution.

Back in 2000, when Gati was contemplating large-scale computerization and digitization within the company, it evaluated the various options that were available. But after intense scrutiny, it realised that the customization of these solutions would be as big an effort as building one, and would be much costlier than a home-grown solution. Keeping these two things in mind, Ravi Kumar got cracking with the internal team and created a solution that completely mapped the needs and requirements of Gati. Dubbed as Gati Enterprise Management System (GEMS), the solution is Web-enabled and links all the offices on the same platform.

“The design and development work started in January 2001,

- technology management for decision-makers

and it took two and a half years to complete GEMS, which covers the Gati’s entire end-to-end requirement. We also connected our major locations through fibre, and the rest through a mix of cable, dial-up and broadband connections. Developing the software internally has given us complete control on the way we scale, or tweak it, to match our requirements. This would not have been possible with an external solution,” asserts Ravi Kumar.

Yet, Rod Strata, Industry Principal, Transportation & Logistics, SAP Asia, who has worked with scores of logistics companies across the world, advocates package solutions offered by the likes of his company.

“While the challenges of each player might be unique there is still a common thread amongst all like HR, payroll, enterprise asset management, finance and administration. This is where fully-integrated solutions like the ones from SAP score. We know what common pain points are.

We have, therefore, designed a solution that takes care of them.

So, in a way, you don’t have to reinvent the wheel. Also, we have been working with players in this segment for a long time and have fine-tuned our solutions to the needs and requirements of the logistics function,” he states.

Infrastructure blues

Infrastructure is a bottleneck for any segment in India, especially for the logistics industry. And it is not only the physical infrastructure that poses a problem, but also the multiplicity of rules and regulations that makes operation a headache. Chopra of Drive India points out that taxes are levied by the Centre, state and even city municipal bodies.

“The amount of paperwork that we need to undertake, to take a consignment say from Delhi to

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Mumbai, crossing multiple state borders is just huge. That causes a lot of delay and additional expenses,” he states. Chopra, however, is optimistic that the proposed implementation of GST might be able to ease life, “if only implemented completely and in the right spirit,” he stresses.

The less said about the physical infrastructure, the better.

Everything right from ports to highways to intra-city roads is in bad shape. Ironically, logistics, including transportation, accounts for around 11 per cent of the GDP. Yet, it is unable to dictate terms when it comes to ensuring that large-scale infrastructure projects are undertaken.

On the IT front, the players face lot of issues on two counts— erratic power supply that necessitates constant power backup, and the connectivity challenge. CIOs of large companies, that have offices in Tier 2 and 3 cities, need to ensure that there are not many power-hungry devices in these offices. Also, the need to maintain redundancy is a major headache.

CIOs need to partner with multiple vendors simply because they are not able to trust the service standards of current players. “For instance, when I use the mobility services from one vendor, I need to sign up for another, simply because there is no single operator that provides nation-wide coverage,” states Dhumal.

Nair from Aramex, on the other hand, risked going for a single vendor. “We were facing huge problems in terms of multiplevendor solutions for our communication needs, different service levels and different costs. That is when we decided to go for a single-vendor solution and implemented the same from Reliance,” he informs.

The road ahead

As the logistics segment needs

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to stay ahead in the technology race, it goes beyond saying that it is constantly on the lookout for new software and solutions to streamline its operations.

Already, the segment is using GPS and GIS solutions for fleet management. While a few players have started projects that involve use of RFID, all of them are waiting for costs of the tags to come down.

So, what else could be in the offing? Dhumal attempts a little bit of crystal-gazing. “The logistics sector per se is a big user of the latest technology, and I envisage the trend to continue.

In the coming days, with the emergence of 3G and video handheld devices, I believe there will be integration of the same into the service bouquets. Also, in the future, the customer will tend to play a more pro-active role in the terms of deciding where and how the shipments move, from one of his warehouses to dealer or to the market, thanks to online applications like Google Maps,” he states.

Considering the climatechange consciousness that is sweeping across the country, and the globe, it is just a matter of time before the logistics players are forced to go green. In fact, one of the terms that is doing the rounds nowadays is ‘green logistics’ where ICT is used to cut down on the carbon footprint of the company. Globally, the transportation sector is responsible for high emissions of carbon dioxide, and since the sector uses vehicles, planes and ships extensively, any cut down on that front can help the company in reducing its carbon footprint.

“Sustainability is going to be a big thing. IT will play a crucial role in this. For instance, one customer with the effective use of Business Intelligence (BI) was able to reduce close to 10 per

With applications like Google Maps, customers will now play a more pro-active role in terms of deciding where and how the shipment should move.”

PRaSad dhumal SenIoR DIRecToR IT, SouTH ASIA DHL expReSS

cent of the containers that were shipped. That is a big saving as far as time, money and emissions are concerned. In fact, we have a specific team within SAP that works on the sustainability aspect,” states Strata.

Whatever be the state of affairs, green or not so green, one thing is for sure: the Indian logistics industry has a long way to go in terms of technology adoption. The difference between the tech-savvy and the old-world players is stark. Hopefully, with the economy picking up, investments will pour in, especially from smaller players who will like to take on the leaders. And for them tech spend is not an option, it is life-sustaining oxygen.

Photography: Suresh Vangapally

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management & strategy

Protecting Business interests through intellectual

ProPerty rights Awareness about intellectual property rights can save companies from infringement suits, as well as empower them to guard their own IPRs from counterfeiters and infringers. A “freedom-to-operate search” before launching a product is essential for avoiding legal disputes. “Patent mapping” helps companies drive their R&D efforts economically, in the right direction and towards truly derivable business values. by mahua roy chowdhury

Maharashtra Prevention of Dangerous Activities Act, 1981 equates video and audio pirates with persons involved in dangerously nefarious activities.

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I

ndia has been featured in the list of countries in the special 301 Report of the U.S. trade representative body, which lists countries regarded as lacking in proper protection and enforcement of IPRs (Intellectual Property Rights) of US-based rights holders. This includes lacunae in existing legislation, administrative set-up, enforcement related policies, etc. India is seen as a large market of pirated and counterfeit/ spurious goods, which has prompted the government and trade associations

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to unite and initiate actions against infringers.

There are provisions under the customs law, which prohibit importation of infringing goods in India. The Customs Authorities have promulgated guidelines known as “Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007”, under which the rights holder can record with the Customs authorities the intellectual property rights granted to him. The guidelines empower the Customs officials to seize infringing goods at the border without obtaining any orders from court of law. Under these rules, the rights holder is required to give a notice in writing to the Commissioner of Customs or any other Customs officer authorized by the Commissioner at the port of import of infringing goods – requesting

- technology management for decision-makers

the suspension of clearance of goods suspected to be infringing intellectual property of the rights holder. Subsequent to the filing of such notice, the Commissioner then has to notify the rights holder within the prescribed time, regarding the acceptance or rejection of this notice. The period of validity of such registration is one year during which assistance will be rendered by the Customs authorities to the rights holder to prohibit the importation of infringing goods at the border.

After the grant of this registration, the importation of goods that infringe the rights holder intellectual property are deemed to be prohibited, as defined under the Customs Act, 1962.

The Customs officers may suspend the clearance of such prohibited goods either on the basis of information received from the rights holder or by initiating ‘suo moto’ action. For such an action of suspension, there should be a ‘prima facie’ evidence or at least some reasonable grounds to believe that the imported goods are goods infringing the intellectual property of the rights holder. Upon issuance of the suspension order, the Customs authorities have to inform the rights holder of the same, and if the rights holder does not execute the requisite bond and join the proceedings against the importer within the prescribed period, the Customs authorities will release the suspended goods.

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Under the rules, the Custom officers are empowered to destroy the suspended goods under official supervision, or they may dispose them off outside the normal channels of commerce, if the goods are found infringing and that there is no legal proceeding pending in relation to such a decision.

Though the issuance of the above rules is seen as a very significant step towards enforcement of IP, due to the lack of infrastructure, especially IT infrastructure for rights recordal, and lack of training of the officers/personnel, the desired results are yet to be achieved.

Resource crunch is a real problem and a major one faced by the authorities today as this additional responsibility calls for committing a lot of additional resources.

Enacting laws is the first step, but the more important step is its proper implementation thereafter in practice. Here, the onus is on the industry too, in that it should take a more aggressive and proactive approach for protection of its IPRs, work in partnership with government agencies for spreading awareness about piracy, and also share information essential for enforcement purposes.

Many Indian companies are not aware about the potential of their IPRs, and how they can legally protect their IPRs from being infringed, and thereby prevent others from unjustly enriching themselves.

Patent mapping

Patent mapping involves creation of a visual representation of information from and about patent documents in a way that is easy to understand, and useful for business and strategic decision making. It is an excellent tool for assessing large sets of patent data. Using data, which is part of a patent document, one can identify which technical fields particular applicants are active in, what is

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the direction of research activity of a competitor and its current focus, how their filing patterns and IP portfolios change over time.

As for the individuals and corporate, it is also possible to find out which countries lead in which fields. This has relevance in framing of R&D policy, strategic and business decision making, etc. Corporates can take decisions not only pertaining to their future R&D direction, patenting activity, licensing decisions, but also decisions related to hiring of R&D employees, forging alliance with other firms for particular project/ purpose, marketing decisions, etc.

The competence of a company and individual in a particular technology field will be determined by the number and quality of patents held by the entity/ person concerned.

Earlier, in case of individual scientists, their academic record and publications determined their value for the company. But now, in advanced countries and technology-based firms, it is the number of patents that determines their real value for the organization, and forms a basis for promotion and other incentives.

Patent mapping also results in savings in costs of R&D, as the corporation knows beforehand of existence of any monopoly rights of other entity. A company can identify strategic patents in its field of technology/competence, which can help it in cross-licensing deals, a common phenomenon in electronics industry and in particular the microprocessor industry.

Patent mapping helps in analyzing the strength of a company R&D, which is important in arriving at proper valuation at the time of M&As (Mergers and Acquisitions). In short, it helps firms to take an informed decision at various stages and not just R&D related activities. Therefore, patent mapping and extracting information available from

the huge published patent databases is indispensable today for all types of companies, and should not be seen as something of relevance to only the R&D or technologybased firms.

Companies must be careful

Every product that is launched in the market today comes imbibed with some kind of technology/ improvement in the existing design/ mechanism, and more often than not it is covered with number of patent or other monopoly (IP) rights. A product may be covered with patent, design and copyright protection simultaneously, and this makes it imperative for a company launching a new product to first verify if it is infringing any of such existing monopoly rights vested in others.

It is also to be borne in mind by the companies which are going global that intellectual property rights are essentially territorial, and therefore before launching a product in any country they should first verify the existence of such monopoly rights in the individual country/market. For this Freedom to Operate (FTO) search is conducted before launch of any product/ molecule in the given market.

The FTO search is to identify the space in which the company can probably operate without getting involved in any legal disputes involving IP. The search looks for patents that are still valid and in force in the target country, and which may be infringed by launch of the product.

In the developed countries which are also an important export market for Indian manufacturing companies, IP litigation and especially patent litigation entails huge costs, because of the specialized and complex nature of the disputes. Hiring a lawyer or professional in a country like U.S. for patent litigation comes at an exorbitant price. Further,

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management & strategy the Courts in some of the more advanced countries, unlike the Indian ones, award hefty fines in infringement suits. Therefore, it is imperative before launch of any product in these markets that the company seek professional assistance and advice as to whether such a launch will result in any infringement of any of the existing IP rights in the respective market.

Paying less and early in the process in order to avoid paying huge sums later.

Previously, the huge costs involved in securing IP rights in different countries led to the practice of the multinational companies to focus on securing protec-

Patent mapping can result in saving costs and avoiding litigation.

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tion in only those countries which offered them a lucrative market and had strategic importance.

The introduction of PCT (Patent Cooperation Treaty) system has changed this practice. PCT is a single window system for filing patent applications in member countries of the PCT. The system ensures tremendous cost benefit as well as ease of documentation and other formalities (including translation) while filing patent applications for multiple jurisdictions. When compared to other Asian countries like Korea, Taiwan, China and Japan, Indian companies still lag far behind in exploiting the opportunity offered by the PCT system.

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System is needed

Indian manufacturing companies need to put in place some system to identify, protect, enforce and commercialize the IP generated by them. In addition to the traditional finance, human resource management companies must understand and appreciate the indispensability of having in place IP management for not only to remain competitive in the market but also for their survival.

There is a need for greater public-private partnership (PPP) to spread awareness, about potential of IP rights and its role in a globalized knowledge based economy. Indian companies must realize that the real value generation for the company and its shareholders lies in aggressively pursuing IPR, and margins will continue to be higher in R&D related activities as contrasted with manufacturing activities.

The advantage of having cheap and abundant labour cannot last forever. Therefore, the best way to face the challenge of a globalized competitive environment is to focus on R&D, which entails continuous development in human resource. This will also increase the value generated per person/ employee in an organization.

The Government of Maharashtra, with increasing pressure from Bollywood and Hollywood to curb the rampant film piracy, has introduced an amendment in the Maharashtra Prevention of Dangerous Activities Act, 1981, which now equates video and audio pirates with drug offenders, bootleggers and others involved in dangerously nefarious activities.

Proper implementation of this law is bound to have the desired deterrent effect on the pirates, and has the potential to bring drastic reduction in illegal activities.

Though some states have followed the example of Maharashtra, still there is a long way to go.

- technology management for decision-makers

This has been hailed as a very positive and landmark step, but the same amount of concern and seriousness in dealing with infringement and piracy of patents and designs is still not visible on the part of executive and legislature. In order to bring a change in this attitude, the industry needs to mount pressure on the Government to take similar steps to tackle the issue of piracy effectively.

Many countries now provide registration of certain inventions as ‘petty patent/utility model’.

There is less stringent standard for getting a petty patent, and the term of registration is also shorter, usually seven years (term of regular patents being twenty years). This kind of protection is not available in India. Studies have shown that the provision of ‘petty patent’ has given a boost to overall R&D activity, and particularly has helped make SMEs more competitive globally.

Indian trade and industry associations should pursue with the government for introduction of petty patents/utility models, since the Indian manufacturing industry is known for its capability for incremental innovation, rather than for radical inventions.

In a country like US, SMEs are given special status and concessions to obtain patent/ IP protection. Such concessions are not available in India. The industry should come together and persuade the administration to introduce such facilities in India.

A dedicated facilitation centre of the Ministry of Commerce/ IP Office for aiding the industry (especially the SMEs) for enforcement of their IP rights would be desirable.

Mahua Roy Chowdhury is Partner in Solomon & Roy Intellectual Property Services. She may be contacted through: mahua@solomonandroy.com

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product update Product Stacker

D

ouglas Machine has launched the Velocity II high-speed product stacker, which includes additional adjustability to run a range of product heights from ¾ inches to 4 inches.

The Velocity II forms stacked product pack patterns without interruption, providing continuous product flow at speeds of up to 600 products per minute. The programming helps accurately count products and also adjusts the product flow rate to prevent jams due to product spacing inconsistency.

The unit features servo controls for quick and repeatable tool-free changeovers, flexibility for running numerous product

Oil Water Separator sizes and pack patterns on one machine and a compact design for use of floor space. The unit does

not require pre-stacking or priming, resulting in rapid startups.

Douglas Machines Tel: +1-320-7636587 E-mail: info@douglas-machine.com Website: www.douglas-machine.com

Single-stage Compressor

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enny Products has launched a J11 HGA-30P singlestage, gas-powered compressor. The wheeled-portable unit includes a 30-gallon air tank and features a belt driven J pump, which is a single-stage, four-cylinder pump for maximum air flow.

The product delivers 21.3 CFM at 100 PSI or 20.9 CFM at 125 PSI. An 11-horsepower Honda GX gasoline engine powers the compressor. The unit also includes

unloading valves and large flywheel, which facilitate easy recoil starting.

The directional air shroud and large flywheel helps keep the pump temperature low. The other features of the product include two pneumatic tires and lifting handles.

nSolve Biosystems has launched a new product, viz., PetroLiminator 200 M (PL 200 M) Oil Water Separator (OWS) system.

The new product has a small footprint and allows installation on any class vessel including work boats, tugs, ferries and luxury yachts.

The product uses a combination of physical and biological techniques to treat oily bilge water.

The unit incorporates safe microorganisms to consume hydrocarbon wastes in the ship’s bilge water, so treated bilge water can be safely and legally discharged overboard. The machine treats both pure and emulsified oil, as

well as detergents, degreasers and other chemicals in the water.

EnSolve Biosystems Tel: +1-919-9546196 E-mail: info@ensolve.com Website: www.ensolve.com

DC Electric Screwdrivers & Nutrunners

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ngersoll-Rand Industrial Technologies has made an addition to the QE family of DC electric fastening tools, viz., the QE2 series DC electric nutrunners and screwdrivers.

The new product series offers three styles, i.e., pistol, angle and inline with torque ranges from 0.3 to 15 Nm. These transducerized tools have been designed to work with the ICD and M series of controllers for the purpose of applying precise torques to fasteners using any number of advanced tightening algorithms. Full closed-loop transducerized control helps provide traceability and error-proofing.

The tools are designed for use on both critical and non-critical applications in market segments such as automotive and automotive tier suppliers, electronics, white goods and more.

Ingersoll Rand Tel: +91-11-45251296 Website: www.ingersollrand.com

Jenny Products Tel: +1-814-4453400 Website: www.jennyproductsinc.com

Indexable Multi Tool

Servo Drive

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ockwell Automation has launched a modular servo drive to leverage embedded EtherNet/IP technology for integrated motion control. The EtherNet/IP drive support available with the Allen-Bradley Kinetix 6500 servo drive helps eliminate the need for a dedicated motion network and allows high-performance drives, I/O, smart actuators and any other EtherNet/IP-connected device to be supported on a common network.

The drives feature a modular structure that helps provide an adaptable platform for future machine enhancements. The product is suitable for motion control applications where high performance, efficiency and safety are crucial, such as in the food processing, packaging, printing and web, and other machine types requiring position control.

Rockwell Automation Tel: +91-120-2895245 Website: www.rockwellautomation.in

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M

ate Precision Tooling has launched a new ultra indexable multi tool (IMT), which can achieve any angle setting on the workpiece. The product is available in two versions, viz., 3-station and 8-station.

The 3-station IMT uses standard ultra 1-1/4-inch B-station punches and strippers and thick turret B-Station dies. The product can punch up to 6 mm material with maximum tonnage of 16 tonnes (142 kN).

The 8-station IMT uses standard ultra ½-inch A-Station

industry 2.0

punches and strippers and thick turret A-Station dies. The unit can punch up to 6 mm material with maximum tonnage of 7 tonnes (62 kN).

The unit is designed to use the company’s ultra punches, strippers and slug free dies, eliminating the need for specialized tooling inventory.

Mate Precision Tooling Tel: +1-763-4210230 E-mail: marketing@mate.com Website: www.mate.com

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61

product update Pressure Transmitter

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oneywell has launched the ST 3000 smart pressure transmitter line, which features advanced onboard diagnostics that simplify maintenance and a new software upgrade.

The software upgrade includes diagnostics for both Foundation Fieldbus and HART 5 and 6 users.

The standard HART 6 diagnostics comprise time-tracking functions such as install date, calibration date, time-in-service and

stress monitoring and point value, meter body temperature and general reading functions.

These functions allow plant personnel to diagnose problems from remote locations, view a device’s history even after it has been removed from the process, and conduct root-cause analysis.

Honeywell Tel: +1-602-8635000 Website: www.honeywell.com

Monoblock Filler/Capper

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SS Technologies has launched a monoblock filler/capper to create a filling system for bottles, micro tubes, vials and syringes.

The product includes integrated scales, which measure and record the weight of the container prior to and again after filling to verify exact fill amounts with an accuracy of ±2 mg.

The machine with net weigh system handles rates up to 70 containers per minute. It comprises a large, full colour touch screen, which provides an operator interface to adjust the servo controls for the diving nozzles as well as the pump fill rates.

Constructed to meet cGMP standards, the product includes stainless steel exterior and hard-anodized aluminium inner frame.

Standard machine guarding is constructed of aluminium profile with Lexan panels.

ESS Technologies Tel: +1-540-9615716 E-mail: info@esstechnologies.com Website: www.esstechnologies.com

Thread Gauges

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ayesh Enterprises has launched a wide range of thread gauges.

These comprise ISO metric, Unified, Taper (formally NPT and BSPT), BSW-BSF, B S Cycle, B A screw and G series (formally BSPF).

The products are available in both plug and ring types upto a diameter of 1.6 to 200 mm. The units are produced from high quality tool steel and are fully stabilised i.e., sub-zeroed to improve the life and accuracy of the gauge.

The products meet national and international standards such as ANSI, BS, IS and are also tested in laboratory to meet NPL and NABL standards.

Jayesh Enterprises Tel: +91-20-26877842 E-mail: jaws@jawsindia.com Website: www.jawsindia.com

Cleaning Head

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LB Corporation has launched the Torrent, a new 3-D water jet tank cleaning head with higher flow for cleaning power. The new product is rated for flows up to 150 gpm (568 lpm) and operating pressures to 10,000 psi (690 bar).

The unit includes new nozzle tips with carbide orifices that improve the cohesiveness of the water jets. The product has a stainless steel body and features improved

seals and bearings.The product helps remove hardened resins, plastics and more.

The unit uses highpressure water, and inserting its head into a tank or reactor on a telescoping lance eliminates the need for any personnel to enter the vessel.

NLB Corporation Tel: +1-248-6245555 E-mail: nlbmktg@nlbusa.com Website: www.nlbcorp.com

Digital Thermometer

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mega has launched new DTGRTD100 series digital thermometer, which features a backlit display with 25 mm (1”) digits that can be read as far as 10.7 m (35’) away. The reading features include process, min, max, alarm condition and battery status.

The product includes an additional analog output signal and has a splash proof, 316 stainless steel enclosure. The models are available with or without integral standard or sanitary sensors.

The product comprises software and a USB cable, which facilitates easy setup and calibration via computer. The unit also includes a wireless transmitter option, which sends readings to remote locations and allows for

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Crane System

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PC-based chart recording and data logging.

Omega Engineering Tel: +1-800-8484286 E-mail: sales@omega.com Website: www.omega.com

- technology management for decision-makers

emag Cranes & Components has launched a custom engineered CastMaster crane series, which is made up of various high speed crane components. The product is designed to improve the speed and efficiency of the material handling function for concrete precast and prestressed product manufacturers using the wetcast or drycast process.

The systems are designed to handle all material handling needs from manufacturing process through to truck loading.

The products are capable to handle a number of concrete production applications including long

and heavy hollow-core precast products, lifting concrete walls and slabs in confined spaces, moving large beams in the storage areas and loading trucks.

Demag Cranes & Components Tel: +1-440-2482400 Website: www.demagcranes.us

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Traceable Micro-anemometer

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ontrol Company has launched a traceable micro-anemometer / thermometer unit, which measures air velocity in five userselectable values, viz., metres per second, feet per second, miles per hour and kilometers per hour and knots.

The product has an ABS plastic housing and water-resistant design, which helps reduce moisture, dust and dirt. The LCD digits are over 3/8-inch-high and easy-to-read. The product is suitable for industrial plants, medical facilities, pharmaceutical, testing and measurement, manufacturing, engineering, pollution control, chemical processing, food, HVAC and petroleum.

Control Company Tel: +1-281-4821714 E-mail: sales@control3.com Website: www.control3.com

Pin-paddle Mixer

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nited Conveyor Corporation (UCC) has introduced a 400 tonne pin-paddle mixer/unloader,

designed for stabilization of wet scrubber by-product (cake) with fly ash.

The machine offers uniform conditioning of materials with nozzle arrangements to wet the

Tube Cutting Laser System

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an-Kwang USA has launched a new tube cutting laser system, model TL 6015, which is capable of handling 24’ long, 6.5” diameter workpieces up to 1/4” wall thickness in mild steel and 0.200” in stainless steel.

The new product is equipped with a 2.5 KW Panasonic laser

ash with a regulated volume and distribution of water.

The product includes a large inlet opening to accommodate multiple feeding belt conveyor lines. The pins and paddles work in conjunction to move and mix materials through to the discharge area. The machine has a rigid body and shaft cladding. It provides corrosion protection for the mixer components in direct contact with the scrubber blow down water.

United Conveyor Corporation Tel: +1-847-4735900 E-mail: info@unitedconveyor.com Website: www.unitedconveyor.com

Stretch Blow-moulding Accessory

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and a Siemens 840D CNC to control all functions of the machine.

The product includes an automatic bundle loading system with tube V-support, auto-centering rotary chucking system, laser cutting station and automatic parts removal station.

rones has launched a new system called MouldXpress Advanced, which downsizes the change-over time for moulds in the Contiform. The new system increases the availability levels of the stretch blow-moulding machine.

The semi-automatic system is integrated into the blowing wheel and helps shorten the change-over time from about 3.5 minutes to less than one minute per blow-moulding station.

The system is used in Contiform blow-moulding machines of the S16 to S28 series for the standard process and for relax-type moulds with neck-cooling.

Han-Kwang USA Tel: +1-630-9160200 Website: www.hankwang.com

Krones Tel: +1-414-4094000 E-mail: salesusa@kronesusa.com Website: www.kroneusa.com

Tube Hone Line

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unnen has added a new product to its tube hone line, which is capable of handling parts up to 1000 mm (39 in) diameter.

The new product includes an electronically-controlled, 30-kW

(40.23 hp) spindle motor, which powers stock removal of 2500 cm3/hr (150 in3/hr) for honing of helicopter driveshafts, marine driveshafts, submarine periscopes, downhole oil drilling components, cannon barrels,

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bi-metallic tubes and hydraulic cylinders. The machine helps correct bore geometry, size errors and produce surface finishes and crosshatch angles to ensure sealing surfaces between mating

parts. The product is suitable for controlling taper variation and drift in long bores.

Sunnen Tel: 1-800-325-3670 Website: www.sunnen.com

Material Feeder

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tock Equipment Company has launched the Multidos HPG feeder incorporating standard features necessary for feeding PRB coal and alternative fuels.

The new feeder with a modular design includes features such as a reversible inlet, which can be rotated 180° to unload material into the new discharge outlet in the bottom of the feeder, a tension roll and active tracking station to maintain belt alignment, and rounded internal surfaces to avoid coal build-up which can become dangerous in PRB applications.

industry 2.0

The product is fitted with the new Disocont Tersus (DT-9) feeder controller with a touch-screen display and microprocessor technology.

Stock Equipment Company Tel: +1-440-5436000 E-mail: chris.klein@stockequipment.com Website: www.stockequipment.com

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63

product update Presetting Tool

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rennan Industries has launched a new tool to preset ferrules on tubing prior to final assembly into a fitting. The presetting tool is suitable when an installation is to be made in tight spaces or hard-towork areas.

The product is made up of carbon steel and is available in sizes 5/8 inches and above.

The tool enables major portions of installation work happen in a favourable work setting as it allows for the presetting of the

Moulded Door

ferrules onto the tubing in a safe, open and ground level area. To use the preset tool, the user must secure the tool in a vise, remove the protective nut and assemble the fitting nut and ferrules loosely onto the tool, then insert the tubing through the nut and ferrules.

A

leco has launched ImpacDor HD-175, a single piece polyethylene moulded door that includes stainless steel hinges and mounting hardware. The product is suitable in industrial plants, food processing plants, pharmaceutical and medical facilities, retail stores, supermarkets and walk-in coolers.

The door comprises monolithic, rotationally moulded panels, which resist moisture, chemicals, dust, bending and torque. The unit has enhanced shell thickness towards the spine and leading edges, which help resist fatigue from cart and lift truck impacts.The door also includes a steel tube and an injection of urethane foam. The product has a 250 degree helical hinge and aluminium follower that allows the door to swing in both directions, distributing the load evenly.

Brennan Industries Tel: +1-800-3311523 Website: www.brennaninc.com

Aleco Tel: +1-800-6333120 Website: www.aleco.com

Vacuum Lifter

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nver Corporation has launched a fail-safe, dual circuit vacuum lifter that incorporates two vacuum systems in one for handling high-value loads that cannot be dropped.

The new product features all-welded steel construction and is powered by two independent vacuum system circuits, including check valves for each, two separate reservoirs and filters.

The product features hand-replaceable quick-change ring vacuum sealing cups. The machine can be powered by either compressed-air or electric vacuum pumps. The available options include electric or hydraulic actuated powered tilting systems.

Anver Corp oration Tel: +1-800-6543500 Website: www.anver.com

Bandsaws

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april-may 2010 | industry 2.0

B

anner Engineering has introduced remote display versions extending the capabilities of its iVu TG image sensor and iVu BCR bar code reader. The new units are designed for applications where the sensor must be placed in a difficult-to-reach location.

The sensor could be located inside a machine or on an elevated conveyor, with the control unit placed adjacent to a central human-machine interface for easy operator access. One display unit can control and monitor multiple sensors.

The iVu TG image sensor monitors parts for type, size, orientation, shape and location.

Banner Engineering Tel: +1-800-8097043 Website: www.bannerengineering.com

Clamp Meter

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ehringer Saws has launched a new line of bandsaws designed to accommodate and cut large diameter tubing. The new products comprise HBP-800AXL automatic and HBP-800XL semi-automatic series, which cut solid bars and structurals up to 31.5-inches.

The new tools also allow for cutting of tubes up to 39-inches in diameter. The unit is built with cast iron frame construction and a twin column parallel down feed design for proper saw blade tensioning. The products also comprise a roller conveyor for handling of heavy materials.

The product features a frequency controlled 14.7 horsepow-

Image Sensor

E er main drive motor with a variable speed range between 55-393 surface feet per minute and hydraulic and hardened clamping jaws.

The product is available in both automatic and semi-automatic versions.

Behringer Saws Tel: +1-610-2869777 Website: www.behringersaws.com

- technology management for decision-makers

xtech Instruments has launched EX845, a 1000A AC/ DC CAT IV clamp meter with METERLiNK technology and a built-in infrared thermometer.

METERLiNK is a technology that connects FLIR infrared cameras to Extech meters via Bluetooth. During infrared inspections of electrical components, users can transmit key electrical

readings from an Extech EX845 clamp meter directly to a FLIR infrared camera. METERLiNK imprints the electrical readings onto a related infrared image.

The EX845’s advanced True RMS meter functions include AC/ DC current, voltage, resistance, capacitance, frequency, infrared and contact temperature, diodetest and continuity check.

The unit also includes a 4-digit, 4,000 count backlit display and 1.7-inch (43 mm) jaw opening.

Extech Instruments Tel: +1-781-8907440 Website: www.extech.com

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Accuracy by Design

20 Bit advantage

Launching A2 & A+ Series Servo Motors & Drives

Range extended upto 7.5kw (47.74Nm) Delta India Electronics Pvt. Ltd.

Plot No. 43, Sector - 35, Gurgaon - 122001, Haryana, INDIA Tel: +91 124 4169040, Fax: +91 124 4036045 Email ID : automation.dpsindia@delta.co.in, deltaindia@delta.co.in website ; www.deltaelectronicsindia.com.

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