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VOLUME 10
ISSUE 05
JAN 2011
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JANUARY 2011 VOL 10 ISSUE 05 INDUSTRY 2.0 - TECHNOLOGY MANAGEMENT FOR DECISION MAKERS
mappIng the Future IndIa needs Warehouses WIth Better scale, hIgher automatIon and more FlexIBIlIty
MarkeT
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Manufacturing business backlog is rising
SofTware
New software eases casting simulation
Technology
Self-monitoring plastic is a reality now
editorial Vol. 10 | ISSUE 05 | jANUArY 2011
Managing Director: Dr Pramath raj Sinha Printer & Publisher: Kanak Ghosh Editorial Group Editor: r Giridhar Associate Editor: P K Chatterjee Sub-Editor: reshmi Menon dEsign Sr. Creative Director: jayan K Narayanan Art Director: Binesh Sreedharan Associate Art Director: Anil VK Sr. Visualisers: PC Anoop, Santosh Kushwaha Chief Designer: N V Baiju Sr. Designers: T r Prasanth & Anil T, Chander Dange Photographer: jiten Gandhi brand managEmEnt General Manager: Nabjeet Ganguli salEs & markEting VP Sales & Marketing: Naveen Chand Singh (09971794688) National Manager - Sales: Pranav Saran (09312685289) National Manager - Events & Special Projects: Mahantesh Godi (09880436623) Assistant Brand Manager: Arpita Ganguli GM South & West: Vinodh Kaliappan (09740714817) Coimbatore: D K Karthikeyan Kolkata: jayanta Bhattacharya (09331829284) Production & logistics Sr. GM - Operations: Shivshankar M Hiremath Manager - Operations: rakesh Upadhyay Assistant Production Manager: Vilas Mhatre Logistics: MP Singh, Mohamed Ansari officE addrEss Nine Dot Nine Interactive Pvt ltd Kakson House, A & B Wing, 2nd Floor 80 Sion Trombay road, opposite r K Studio Chembur, Mumbai 400071. Board line: 91 22 67899666 Fax: 91 22 67899667 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 For any customer queries and assistance, contact help@9dot9.in Printed and published by Kanak Ghosh for Nine Dot Nine Interactive Pvt ltd Plot No. 725 GES, Shirvane, Nerul, Navi Mumbai 400706. Board line: 91 22 67899666 Fax: 91 22 67899667 Editor: Anuradha Das Mathur Plot No. 725 GES, Shirvane, Nerul, Navi Mumbai 400706. Printed at Silverpoint Press Pvt. ltd, D 107, TTC Industrial Area, Nerul, Navi Mumbai 400706.
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Getting Ready for the Next Wave
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few months ago a report jointly authored by Deloitte and the US Council on Competitiveness was cause for much celebration amongst the local manufacturing community. The report rated India second, after China, in terms of manufacturing competitiveness. The auto, auto ancillaries, chemicals and pharmaceutical industries were particularly pleased by this recognition—because many companies in these sectors have been at the forefront of the quality revolution and achieving international norms. However, the study also cautioned that availability of talented workers capable of supporting innovation would be the key to sustaining global competitiveness at manufacturing companies. It said that this factor would rapidly overtake conventional advantages like low-cost labour, materials and energy. This observation has deep implications for the Indian manufacturing industry— particularly for organizations making undifferentiated mass-market products that can be easily substituted. If Indian manufacturers desire to compete globally (and in the Indian market), they will need to not only train workers well, but also equip them with the knowledge and tools needed to spark and sustain innovation. That’s because they will need both process and product innovations to cut costs, improve quality and create compelling value for customers. Another important, and more recent, trend in manufacturing is outside-in innovation, co-creation and collaboration.
industry 2.0
R Giridhar editor@industry20.com
This is a process in which customers and suppliers work with a manufacturer to create, improve, enhance or re-engineer a product. Again, auto companies have led the way in enabling suppliers and vendors to co-create. Many have transferred the entire responsibility for the design and engineering of critical sub-systems to trusted suppliers—much like the way the computer industry did many years ago. While companies like Delphi, Bosch and Eaton (and their Indian units) have been successful in engineering collaboration and product development, others have had mixed results. That’s because enabling co-creation is a complex and challenging task. Not only do you have to manage divergent cultures and corporate hierarchies, but also juggle intellectual property, patent and secrecy issues. You also need to have the right technology in place to share designs, communicate quickly and manage document flows. The first step in getting ready for the next wave in manufacturing is to effectively integrate internal systems for seamless collaboration. The next step is to institute a cultural change. It is hard for people to give up control—and accept the idea that other people can do an equally good (or better) job. The final step is to create an environment that will promote innovation and change.
- technology management for decision-makers | january 2011
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contents 28
52 materials & processes 47 Emerging Composite Researchers at Fraunhofer University have developed a new polymer-metal material that has sensory properties.
supply chain & logistics 48 Simplifying Backoffice Workload Application of PDA eliminates problems due to damage of PODs in a courier company.
cover story Cover design: Prasanth T R Picture courtesy: www.photos.com
32 Building Warehouses Of Global Standard India needs modern warehouses to become the logistics hub for the Asia Pacific region.
in conversation
soft talk 10 Casting Simulation Becomes Easier New software addresses several critical issues related to casting.
facilities & operations 26 Cloud Computing Helps Production Planning Next generation technologies offer higher levels of efficiency.
50 Jim Bryne Director of Business Development sAp AlliAnce, AsiA pAcific & JApAn terADAtA corporAtion
28 Peeping Into The Future In future, factories will run without human labourers as work force.
manufacturing technology 44 Grinding With Micro Granite Bed Cosmos will launch a new metal working machine during IMTEX 2011.
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46 Preventing Failure Of The Heart Of Your Plant Properly selected lubricants can extend the life of gears.
- technology management for decision-makers
information technology 52 IT For Competitive Advantage Technology beats operational complexities.
innovation & success 56 Enabling Business Growth Integration of business functions enhances operational efficiency.
management & strategy 58 Trading With Emissions Emissions trading schemes have great potential to lower pollution.
departments Editorial ......................................01 IndustryU pdate......................... 04 TechnologyU pdate.................... 12 Market D ynamics ...................... 14 Event Report ............................. 24 Advertisers’ Index ......................27 Product Update ......................... 60
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industry update Indian Capital Goods Industry Receives Impetus
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he Department of Heavy Industry will pursue with the Finance Ministry the critical need for imposing a customs duty of 14 per cent on capital goods to give the domestic industry a levelplaying field. “We will refer the matter to the Cabinet for a decision”, assured Vilasrao Deshmukh, Union Minister for Heavy Industries and Public Enterprises, on the sidelines of the National Conference on ‘Indian Capital Goods Industry—Prospects and Issues: Enabling Framework for Sustainable Development, organized by the Federation of Indian Chambers of Commerce & Industry (FICCI) and the Department of Heavy Industry. Deshmukh informed that his Department had evolved a scheme to build four Common Facility Centres for machine tools, textile machinery, heavy electrical equipment and process plant equipment and establishment of two Industrial Cluster Parks for machine tools and textile machinery to enhance the competitiveness of the Indian capital goods industry at the global level. He added, “The Finance Committee in the Fin. Min. has agreed to make a provision of Rs 300 crore for the development of Common Facility Centres and Industrial Cluster Parks for giving a boost to the domestic capital goods industry. The benefits envisaged from these Centres and Industrial Parks would be the abolition of capital investment programmes by individual units, provision of value added services like accredited testing centres at affordable prices, quality upgradation, optimum utilization of equipments, better SC management and more employment growth”. Alongside, Arun Maira, Member, Planning Commission (PC), announced that the Commission, Department of Industrial Policy and
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event update IMteX 2011
The 15th Indian metal-cutting machine tool exhibition with international participation. Venue: Bangalore International Exhibition Centre (BIEC) Tel: + 91-80-66246600 E-mail: imtma@imtma.in Date: Website: www.imtex.in 20 January to
26 January 2011
Vilasrao Deshmukh Union Minister for Heavy Industries and Public enterprises Promotion and the National Manufacturing Competitiveness Council are set to release the National Manufacturing Policy soon for discussion and implementation. The policy would make recommendations in the areas of technology, trade, IPR, infrastructure, transaction costs and skill development & training in all areas of the manufacturing sector, including the capital goods industry. He further stated that the PC had recommended creation of a level playing field for the growth of the domestic capital goods industry through the imposition of import duty, which had long suffered at the hands of imported capital goods. Deshmukh, on his part, noted that to achieve a nine per cent GDP growth during the 11th Plan (200712), the manufacturing industry should grow by at least 12 to 15 per cent per annum. This would mean that the capital goods industry, which is the core of manufacturing, should grow at around 18 to 20 per cent. “However, despite registering consistent growth in manufacturing during the last three to four years, barring 2008-09, the capital goods industry has failed to ride the manufacturing boom and has not been able to meet the entire requirement of the user industries. This had resulted in the gaps being filled through imports of various sub-sectors of capital goods”, he pointed out.
- technology management for decision-makers
Indian Maritime technology Conference (IMtC) 2011
A conference to assess India’s strength to design and manufacture maritime engineering equipment. Venue: NIOT Auditorium, Pallikaranai, Tamil Nadu Date: Fax: +91-44-42444510 21 January to Website: www.cii.in 07 February 2011
BuildMat 2011
The exhibition will be a forum for the entire construction industry. Venue: Codissia Trade Fair Complex, Coimbatore, Tamil Nadu Tel: +91-422-4394536, 4394537 Cell: +91 9842379666 Date: Website: www.buildmat.in 03 February to
06 February 2011
eLCa Power International 2011 The exhibition will display products from the electrical goods manufacturers. Venue: Bangalore International Exhibition Centre (BIEC) Tel: +91-80-26662459,
26694029 Website: www.elcapowerinternational.com
Date:
04 February to 07 February 2011
International engineering & technology Fair 2011
A B2B event, segmented into different technological sections of the engineering and manufacturing industry. Venue: Pragati Maidan, New Delhi Tel: +91-124-4014060 - 67 E-mail: roy.jacob@cii.in Date: Website: www.ietfindia.in 10 February
to 12 February 2011
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CMYK
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industry update Schneider electric acquires aPW President
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chneider Electric has signed an agreement to acquire a majority of the shares in APW President Systems, which designs and manufactures standard and customized racks and enclosure systems in India, serving in particular information technology and telecom end-users. APW generated sales of INR 1.08 billion for the twelve months ending September 30, 2010. The Company has manufacturing facilities at Pune and Bangalore, and has a broad customer base with sales and marketing offices across India. Commenting on the deal, Laurent Vernerey, Executive Vice-President of Schneider Electric’s IT Business, says, “APW President Systems brings to us the expertise to customize racks and enclosures for our global data centre customer base. With this acquisition, Schneider Electric becomes a leading Indian player in integrated data center infrastructure solutions and further accelerates its development in the domain of data centres.” Schneider proposes to acquire shares representing a maximum of 75 per cent of the share capital of the company by acquiring a minimum of 55 per cent of the share capital from the promoter shareholders of APW Presi-
Laurent Vernerey Executive Vice-President of Schneider Electric’s IT Business dent Systems, and up to 20 per cent of the share capital of the company pursuant to a mandatory open offer to be made to the other shareholders. Depending on the response to the open offer, additional shares can be acquired from the promoter shareholders, provided that the total number of shares acquired from the promoter shareholders, together with the shares acquired under the open offer do not exceed 75 per cent of the share capital of the company.
GEECL To Produce CBM in Mannargudi
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reat Eastern Energy Corporation Limited (GEECL), the first company of India to commercially produce gas from coal bed methane (CBM) block, has signed a Memorandum of Understanding (MOU) with the Govt. of Tamil Nadu for the development of Mannargudi block as a CBM production site. Earlier, in June 2010, GEECL was awarded the most sought after Mannargudi block located near the city of Tiruchirapalli in Tamil Nadu in the fourth round of CBM bidding conducted by Ministry of Petroleum and Natural Gas and signed Production Sharing Contracts (PSC) in July 2010. Under the MoU, Govt. of Tamil Nadu will provide for issuance of Petroleum Exploration Licence and facilitate necessary environmental clearances for the project. Additionally, the State Govt. will help the company in obtaining Right of Use for laying pipeline and other infrastructure facilities. On its side, GEECL will make an initial investment of up to Rs. 100 crore during the exploration stage of Mannargudi block. Once the project viability is established, the company is expected to make substantial investments to the tune of Rs. 3,500 crore depending on the commercial viability of the project.
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january 2011 | industry 2.0
- technology management for decision-makers
IMteX 2011 to Bring More Opportunities
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outh & South East Asia’s apex B2B exhibition and conference on metal-cutting machine tools and manufacturing solutions, IMTEX 2011, is coming up in Bangalore. From 20 to 26th January, 2011, during the exhibition, Bangalore International Exhibition Centre will witness a huge crowd of technorats, researchers, consultants, businessmen and businesswomen, exim managers, financiers and many others. The 15th Indian metal cutting machine tool exhibition with international participation will be an all -pervasive event, and the best Indian platform for making investment decisions in the manufacturing sector. The event will focus on Technology, Design, Innovation and Productivity. An exclusive focus on metal-cutting machine tool segment of the industry will be a great opportunity for manufacturers of all categories. Machine tool (MT) industry’s growth momentum is back again. This year, considering the technology thirst of progressive Indian manufacturers, the organizer IMTMA (Indian Machine Tool Manufacturers’ Association) has paid special attention to bring some of the best international technology vendors to display their latest offerings in the MT field. Apart from general engineering sectors, there will be specialized MTs on display for sophisticated sectors like Aerospace, Defence, Construction, Energy, Healthcare, Nuclear, Oil & Gas and Power. According to IMTMA, IMTEX and Tooltech 2011 will create a onestop platform for latest end-to- end manufacturing solutions. The event will create enormous business opportunities for everyone—manufacturers or exhibitors, customers, technologists, designers, policy-makers and even budding engineers.
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industry update
TWI Gears Up To Support Yb- fibre Laser technology-based Projects
Hybrid laser arc set-up with an adaptive control vision
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uring 2010 TWI has continued its major investment in high power laser materials processing equipment. Four state-of-the-art Ybfibre lasers are now operational at TWI in Cambridge, to enhance the portfolio of laser processing services offered to its industrial members. With a number of new processing heads now available at TWI, these Yb-fibre lasers are suited for a diverse range of welding, cutting and surfacing applications. The four continuous-wave Yb-fibre lasers, which have maximum rated output powers of 5kW, 1kW, 200W and 20W, are typical of the range of solidstate lasers now being adopted by the industry. Advantages of adopting fibre
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or disc laser technology include: high wall plug efficiency, excellent beam quality, fibre optic delivery (allowing easy robotic automation), small footprint and long service intervals. The range of output powers and focused beam properties allow a wide range of materials to be processed. For welding applications, the 5 kW Yb-fibre laser is capable of at least 8mm penetration depth in most metallic materials, and it is possible to increase joint-gap tolerance using wire feed, oscillation of the laser beam and/or a hybrid laser arc process. Furthermore, industrial members now have access to a laser camera vision system, which allows seam tracking, adaptive control and even post-weld inspection of bead geometries. At the other thickness extreme, metallic foils
- technology management for decision-makers
of thickness <500Âľm can be joined at welding speeds of ~500 mm/s using the 200W laser. The 5 and 1kW lasers are also ideally suited for high quality cutting of sheet metal up to 3 mm in thickness, with work in progress to increase this thickness. Compared with traditional CO2 laser cutting, a 300 per cent increase in cutting speed can be achieved using Yb-fibre lasers. This enhanced process speed, combined with the increased wall plug efficiency, enables large cost savings. Where high cut quality is not a requirement, cut depths of up to 50 mm have already been achieved with the new Yb-fibre lasers. Robotic manipulation equipment is on hand both for high precision applications
Single sided tube-in-tube cutting with a 5kW Yb-fibre laser and workpieces up to 5 m in length. In addition, a 3D scanning head is now available for remote welding, sublimation cutting, marking and laser SurfiSculpt applications with the 1kW laser. The 20W Yb-fibre laser is coupled to a fast 2D scanning head, scanning over a precision 3D displacement stage. This laser-optic combination is suitable for micro-marking, scribing, clearweld operations on plastics and thin film ablation.
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Picture Courtesy: TWI
With a view to coping up with the growing demand for Yb-fibre laser technology and the increasing adoption of laser-based materials processing solutions in many industry sectors, TWI, a global provider of research, consultancy and training in welding and joining technologies, structural integrity and corrosion management, materials testing, NDT, failure investigation and materials processing, has well-equipped its Cambridge facility with the latest laser equipment.
soft talk
Casting Simulation Becomes Easier A recently released version of ESI’s simulation solution has been a boon to the foundry industry as it offers a number of new application tools, which help in determining almost all quality and usability criteria of the cast product. The solution now includes important aspects like—developments in microstructure, stress optimization, and interfaces to specifically meet the customers’ challenges.
The casting simulation solution allows an engineer to build step-by-step the necessary functionalities to span the entire foundry process.
E
SI’s Casting Simulation Suite 2010, including ProCAST and QuikCAST, has brought in numerous enhancements. The suite is now offering several improved product functionalities, as well as the new features are targeting at meeting today’s foundry needs. According to the company, the solution allows an engineer to build step-by-step the necessary functionalities to span the entire foundry process—from die design to the component’s performance during its productive life. In this release, ESI introduces important developments in micro modeling, allowing the prediction of the microstructure and assessment of the consequent mechanical properties of ferrous and nonferrous alloys, both as cast and after heat treatment.
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january 2011 | industry 2.0
The new solution helps in precisely selecting heat treatment parameters in order to obtain the required properties for Austempered Ductile Iron (ADI) components. Using this capability, ADI can be engineered to have properties superior to commonly used alloys, such as steel, as it is lighter and stronger for the same applications. Simulation helps achieve this performance, providing new materials opportunities to the transportation industry. Dr. Antton Meléndez Arranz, a metallurgist at Tecnalia, says, “ProCAST’s recent developments prove to be excellent for predicting the microstructure and the basic mechanical properties of casting materials. Using the microstructure module, the simulation of local graphite expansion is possible with a sensitively higher accuracy
- technology management for decision-makers
for shrinkage defects prediction. The microstructure module opens up a new line of possibilities and makes other types of analyses possible, particularly in relation to metallurgical quality level adjustments, according to the inoculation parameters in simulation.” Version 2010 also provides a new optimization module. With only one simulation, engineers can now set the best conditions for the design or process to reach objectives, such as minimizing porosity or improving yield, informs the developer. Moreover, using the new optimization module several simulations of the same process are run automatically, with slight variations of the input parameters (as happens on the foundry shop floor). Robustness and part quality can be quantified from the simulation results. ESI states that the Casting Simulation Suite now includes solutions and enhancements in gas porosity predictions, pin squeeze, air entrainment, thermal modulus, and also provides for results extraction. Ciro Caramiello, PhD - Process Modeling at EMA Rolls-Royce, comments, “When you have the right tool in your hands, you can easily get quick and optimal solutions arising from extremely complex problems in super-alloy foundries. ESI’s software has the potential to do this.” “We are pleased to announce the release of our Casting Simulation Suite 2010,” said Marco Aloe, Casting Product Manager at ESI Group. “Our growing and faithful installed base demonstrates the relevancy of our solution for foundries, whether they require a quick estimate or a more advanced and complete diagnosis. Our goal remains to develop tailored tools to help foundries efficiently design the best quality part and meet performance criteria,” he added.
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technology update
Fabricating Nanochannels Of 2-nm Size A new research project supported by DOE’s Office of Science, plus the Center for Scalable and Integrated Nanomanufacturing and the Center of Integrated Nanomechanical Systems at UC Berkeley has paved the way to enhanced ion transport to improve efficiencies of batteries and fuel cells by reducing the internal energy loss.
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Schematic of a 2-nm nanochannel device, with two microchannels, ten nanochannels and four reservoirs.
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january 2011 | industry 2.0
- technology management for decision-makers
led this research while still a scientist at Berkeley Lab. Majumdar is the co-author with Chuanhua Duan, a member of his research group at the University of California (UC) Berkeley. In their paper, Majumdar and Duan have described a technique in which high-precision ion etching is combined with anodic bonding to fabricate channels of a specific size and geometry on a silicon-onglass die. To prevent the channel from collapsing under the strong
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Photo by: Roy Kaltschmidt, Berkeley Lab Public Affairs
an
Du
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esearchers with the US Department of Energy’s (DOE’s) Lawrence Berkeley National Laboratory (Berkeley Lab) have been able to fabricate nanochannels that are only two nanometres (2-nm) in size, using standard semiconductor manufacturing processes. Already they have used these nanochannels to discover that fluid mechanics for passages so small are significantly different not only from bulk-sized channels, but
even from channels that are merely 10 nanometres in size. “We were able to study ion transport in our 2-nm nanochannels by measuring the time and concentration dependence of the ionic conductance. We observed a much higher rate of proton and ionic mobility in our confined hydrated channels—up to a fourfold increase over that in larger nanochannels (10-to-100 nm). This enhanced proton transport could explain the high throughput of protons in transmembrane channels,” says Arun Majumdar, Director of DOE’s Advanced Research Projects Agency—Energy (ARPA-E), who
Chuanhua Duan was part of a successful Berkeley Lab effort to fabricate nanochannels that measured only two nanometres in size, using standard semiconductor manufacturing processes.
electrostatic forces of the anodic bonding process, a thick (500 nm) oxide layer was deposited onto the glass substrate. “This deposition step and the following bonding step guaranteed successful channel sealing without collapsing. We also had to choose the right temperature, voltage and time period to ensure perfect bonding. I compare the process to cooking a steak, you need to choose the right seasoning as well as the right time and temperature. The deposition of the oxide layer was the right seasoning for us,” says Duan. “Enhanced ion transport improves the power density and
practical energy density of fuel cells and batteries. Although the theoretical energy density in fuel cells and batteries is determined by the active electrochemical materials, the practical energy density is always much lower because of internal energy loss and the usage of inactive components. Enhanced ion transport could reduce internal resistance in fuel cells and batteries, which would reduce the internal energy loss and increase the practical energy density,” he adds. The findings by Duan and Majumdar indicate that ion transport could be significantly enhanced in 2-nm hydrophilic nanostructures—
Use Of Renewable Energies In A Competitive Manner Need Of The Hour Von Ardenne Anlagentechnik emerged from the famous Dresden Research Institute Manfred von Ardenne. Today, it is one of the well known suppliers of electron beam and plasma technologies and equipment, especially for the photovoltaics industry. The company’s key competence in photovoltaics lies in thin-film technologies, which are used to manufacture different kinds of solar cells. Their Modular Process Systems enable R&D and manufacturing on substrates up to 600 mm
x 1000 mm offering all main techniques in vacuum coating. Today, it offers tailored production equipment for a wide range of applications of vacuum process technology. Dr. Johannes Strümpfel, Chief Scientist of the company talks to P. K. Chatterjee on the latest challenges in his field. Excerpts... Q: What is the fast-growing technology in your industry? A: Thin film technology for vacuum coatings on glass and metal strips. They find applica-
because of their geometrical confinements and high surface-charge densities. As an example, Duan cites the separator, the component placed between the cathode and the anode in batteries and fuel cells to prevent physical contact of the electrodes while enabling free ionic transport. “Current separators are mostly microporous layers consisting of either a polymeric membrane or non-woven fabric mat. An inorganic membrane embedded with an array of 2-nm hydrophilic nanochannels could be used to replace current separators and improve practical power and energy density,” Duan informs.
tions in solar technologies. I mean—Photovoltaics (PV) and Solar Thermal Power (Concentrated Solar Power—CSP). Q: How is the market response? A: Awareness level has to improve further for these kinds of technologies. Q: How is the progress in R&D? A: Necessity for applied research needs to be addressed further. Q: How soon can we expect new R&D results? A: In next two years, a clearer field for applications (PV, CSP) will be obvious—and a related market should be established. Q: What are the new developments expected in 2011?
DR. JOhANNEs stRüMpFEl Chief SCientiSt Von Ardenne AnlAgenteChnik
A: Better understanding for the necessity of applying renewable energies in a competitive manner.
Industry 2.0, builds platforms between service users and service providers across the manufacturing and supply chain space. We invite brand and business related queries.
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market dynamics
Outstanding Business Increased During December Growth of Indian private sector economy slowed in December, but remained marked. Price pressures intensified.
D
Key
poInts
► Weaker new order growth recorded in both manufacturing and service sectors. ► Overall staffing levels increased marginally for a third consecutive month. ► Inflationary pressures built, with both input and output prices increasing at stronger rates.
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ecember PMI data pointed to marked growth of Indian private sector output, with the headline HSBC India Composite PMI posting 58.9. However, this eased from November’s 61.3, as both the manufacturing and service sectors recorded slower expansions in activity. Incoming new business received by service companies in India increased strongly in December, with growth now recorded in each survey period since May 2009. However, the latest expansion eased and, whilst faster than the seventeenmonth low recorded in October, was below the long-run series average. Manufacturers also reported marked growth, but at a slower pace than in November. Despite the weaker rise in new work intakes, outstanding business in the Indian economy increased during December for a second month running. Panellists in both the manufacturing and service sectors indicated that backlogs of work had increased, although the rate of accumulation slowed in the former. Employment in the Indian service sector increased moderately during December. The rate at which staffing levels rose was broadly flat on the month. Manufacturers indicated that employment was unchanged since November. Subsequently, the
january 2011 | industry 2.0
pace of increase in staffing levels held constant for a third month running. December data signalled a marked rise in input costs faced by companies in India. The latest rise was the fastest in seven months, and was driven by increased input prices in both the manufacturing and service sectors. Output prices rose markedly during December, and at a pace above the long-run series average. This suggested that Indian companies found it easier to pass on higher costs during the month. Service companies in India remained optimistic in December
and was below the long-run series average. Commenting on the India Services PMI survey, Leif Eskesen, Chief Economist for India & ASEA at HSBC said, “The upturn in the service sector continued in December and companies remained optimistic about the outlook, although the respective index readings eased from the previous month. The expansion in activity was primarily driven by new business, which benefitted employment but also led to a small increase in outstanding business. As we saw for the manufacturing sector, strong
HSBC India Composite Output PMI
over future business prospects. Many panellists expect strengthened economic conditions, increased marketing and improved and expanded service offerings to support a rise in activity over the next twelve months. Companies in the Post & Telecommunications sub-sector were the most confident of those surveyed. However, the degree of overall positive sentiment eased slightly,
- technology management for decision-makers
growth momentum pushed up input costs (mainly from higher wages and fuel costs) at an accelerated pace and service sector companies saw increasing scope (and need) to pass on these higher costs to end-consumers. The tightening capacity constraints and rising inflation pressures call on RBI to deliver on its hawkish statement and resume tightening in early 2011.”
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market dynamics
Global Manufacturing PMI Ended 2010 At A Six-month High December saw the PMI indexes for output and new orders push further away from their recent lows. This acceleration towards year-end suggests the sector will enter 2011 on a firmer footing than looked likely at the end of Q3. Job creation also remained solid, which will be a boost for the broader economic recovery, comments David Hensley, Director of Global Economics Coordination at JPMorgan.
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he global manufacturing sector ended 2010 on a strong footing. Rates of growth in production and new orders accelerated, leading to a further solid increase in employment. At a six-month high of 55.0 in December, the JPMorgan Global Manufacturing PMI pointed to a
JPMorgan Global Manufacturing PMI
robust improvement in overall operating conditions. The PMI has remained above the 50.0 nochange mark throughout the past one-and-a-half years. The average reading for the PMI in Q4 2010 was above that in Q3 but below the six-year high reached in the second quarter. Manufacturing production increased for the nineteenth month running in December, with the pace of expansion the fastest since June. Moreover, the average rate of growth during 2010 as a whole was the quickest since 2004 and the second-sharpest since the series began in 1998. The expansion in output remained broad-based by nation, with only Japan and Greece reporting contractions. Growth accelerated sharply in the US and the Eurozone, while also remaining strong in China.
ber, as highlighted by an increase in new export orders for the eighteenth successive month. However, the rate of growth eased slightly to a three-month low and remained below the average for the current sequence of increase. December saw global manufacturing employment rise for the twelfth month in a row. Amongst the major industrial regions covered by the survey, job creation was seen in the US, the Eurozone (including a survey record rate of increase in Germany) and China. In contrast, Japan saw a modest reduction in staffing levels for the fifth month running. Average input prices rose at the second-fastest pace since Aprilâ&#x20AC;&#x2122;s 20-month peak in December. Higher costs reflected increased prices for cotton, food products, fuel, metals and timber. All of the countries for which
Global Manufacturing PMI Summary 50 = no change on previous month.
Global PMI Output New Orders Input Prices Employment
Global manufacturing output
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january 2011 | industry 2.0
Nov 53.9 54.1 53.9 66.9 53.2
Dec 55.0 56.5 55.9 68.6 53.2
Change + + + + =
Growth of new orders also picked up in December. Although the rate of increase hit a sevenmonth peak, it was well below those generally seen at the start of the year. Incoming new work has now risen for 18 consecutive months. Higher levels of new business were seen in the US, the Eurozone and China, while Japan and Greece were the only nations to report reductions. International trade volumes continued to improve in Decem-
- technology management for decision-makers
Summary, rate of change Expanding, faster rate Expanding, faster rate Expanding, faster rate Rising, faster rate Rising, unchanged rate
data were available reported an increase in purchase prices. The sharpest rates of inflation were seen in Taiwan, Denmark, Russia, the Eurozone, the US and China. Part of the increase in input costs reflected ongoing supply chain pressures. This was highlighted by a further marked lengthening in average vendor lead times. * Please note that PMI data for the United Kingdom were not available for inclusion in the Global PMI at the time of publication.
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market dynamics
Increasing Trend Of M&A Deals The first nine months of FY 2010-11 (April to December) have witnessed more than three-fold increase in value terms—as the Merger & Acquisitions (M&A) has grown from US$ 13.54 billion in the previous FY’s corresponding period to US$ 58.73 billion. A study undertaken by the Associated Chambers of Commerce and Industry of India (ASSOCHAM) says the number of deals also rose to 222 from 129 during the same period.
I
Sectorwise share in the total value of the M&A deals
n the last three quarters of 2010, the major mergers and acquisitions occurred in telecom followed by energy, metal & mining, pharmaceutical and BFSI sectors. During the first nine months of FY ‘11, the telecom sector topped the list with 28.26 per cent share of the total valuation of M&A deals that took place in India, followed by energy sector accounted for 23.59 per cent, metal & mining sector accounted for 23.19 per cent while pharmaceutical and BFSI sector accounted for 8.20 and 5.74 per cent respectively. The number of M&A activities in the past nine months shows
Pharmaceutical 8.20%
BFSI 5.74%
Metal & Mining 23.19%
Energy 23.59%
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Others 11.02%
that the Indian telecom sector is all set to take on the global markets. There were 10 inbound, outbound and domestic M&A deals that took place in telecom sector during April-December 2010, valuing to USD 16.60 billion; representing 28.26 per cent share in total valuation of the M&A deals that occurred during the period. Other sectors like IT/ITES, Auto/Auto components, hospitality, steel, consumer durable, real estate, media & entertainment, logistics, consumer non-durable and healthcare witnessed 146 M&A deals for an amount totaling to USD 6.48 billion, contributing only 11.02 per cent share in total M&A deals. The cross border inbound / outbound and domestic M&A deals occupied a 16.63 per cent, 41.96 per cent and 41.41 per Telecom 28.26% cent share in total deals with 21, 98 and 103 number of deals respectively, during the period April to December 2010. Telecom: The major M&A outbound deal in telecom
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sector was—India’s leading telecommunications service provider Bharti Airtel’s acquiring of Zain’s African mobile services having operations in 15 countries. The deal involved a transaction of USD 10700 million. In another deal, Bharti Airtel acquired 100 per cent stake of Telecom Seychelles for USD 62 million. There were other deals too. Emirate-based Emirates Telecommunications (Etisalat) acquired 26 per cent stake of India’s Reliance Communications for USD 3000 million. India-based GTL Infrastructure bought 17,500 telecom towers of Aircel for USD 1702.95 million. Reliance Industries has bought 95 per cent stake in Infotel Broadband for USD 1032.26 million, and India’s Tulip Telecom and Global Holding bought 26 per cent stake of US-based mobile chipmaker Qualcomm’s Indian arm for USD 57.72 million. Energy: There were only six deals that took place during April–December 2009 in energy sector for a value of USD 40.69 million, which increased to 13 outbound and domestic deals for USD 13847.94 million, representing 23.59 per cent share of the total deals occurred during April to December 2010. The biggest domestic M&A deal in energy sector was Anil Dhirubhai Ambani Group’s (ADAG’s) gas transportation company—Reliance Natural Resources’ (RNRL’s) merger with its sister firm Reliance Power (R-Power) for USD 10686 million. Switzerland-based ABB, the leading power and
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Sector-wise M&A deals in India between April to December 2010 Sector
Number of deals
Value in billion US$
Telecom
10
16.60
Energy
13
13.85
Metal & Mining
11
13.70
Pharmaceutical
16
4.82
Banking, Financial Service and Insurance (BFSI)
26
3.28
Others
146
6.48
Total
222
58.73
automation technology company, increased the stake in its Indian subsidiary from 52.11 to 75 per cent for USD 965 million. The other major deals in energy sector are—India’s most valuable company Reliance Industries (RIL) picked up 45 per cent stake in Texas, US-based Pioneer Natural Resources for USD 1320 million, and 60 per cent stake in the Marcellus Shale Acreage in the US for USD 392 million. India’s major Power producer JSW Energy agreed to buy Canada’s CIC Energy for C$422 million (USD 414.5 million). In another deal India’s SBI Macquarie Infrastructure Fund acquired 12 per cent stake in Adhunik Power and Natural Resources for USD 26.93 million. Oil and gas logistics provider Aegis Logistics acquired Shell Gas (LPG) India for an undisclosed amount, and Simplex Realty bought 100 per cent shares in Simplex Renewable Resources. Metal & Mining: A total of 7 deals occurred during April to December 2009 in the metal & Mining sector that valued USD 832.86 million, which increased to 11 deals for USD 13618.29 million, representing 23.19 per cent share of the total deals that took place during April to December 2010. The major M&A deals that took place in metal & mining sector
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were India’s largest non-ferrous metals and mining company—Vedanta Resources’ acquisition of 62.4 per cent stake in Cairn Energy’s Indian subsidiary for USD 8480 million, and in other one deal Vedanta Resources agreed to pay Anglo American USD 1338 million for zinc mines in Africa and Ireland. Pharmaceutical: A total of 5 deals occurred during April to December 2009 in the pharmaceutical sector that valued USD 949.6 million, which increased to 16 deals for USD 4815.07 million,
Japanese drug major Daiichi Sankyo acquired 20 per cent stake in Hyderabad-based Zenotech Laboratories for USD 16.87 million. Also, Piramal Healthcare has bought the anaesthetics products business of Bharat Serum Vaccines for USD 4.49 million, and Canada-based BioSyntech for USD 3.8 million. Yet in another M&A deal in pharmaceutical sector UK-based Reckitt Benckiser Group agreed to buy Paras Pharmaceuticals for about USD 724 million. Indiabased Sun Pharmaceutical Industries bought a 12 per cent stake in Israeli’s Taro Pharmaceutical Industries from Templeton Asset Management for USD 82 million. India’s Surya Pharma acquired 100 per cent stake of US-based ActiveOn for USD 22 million.
Banking, Financial Service and Insurance: There were 26 M&A deals that took place in Banking, Financial Services and Insurance (BFSI) sector during April to December 2010 for USD 3273.14 million, contributing a share of 5.74 per cent.
Cross border and domestic M&A deals between April to December 2010 Type Inbound
Number of deals
Percent of total value
Value in billion US$
21
16.63
9.77
Outbound
98
41.96
24.64
Domestic
103
41.41
24.32
Total
222
100.00
58.73
representing 8.20 per cent share of the total deals that took place during April to December 2010. The major M&A deal that took place in pharmaceutical sector was—the USA-based drug-maker Abbot Laboratories (ABT) made a major push into the Indian healthcare market and acquired the generics drug unit of Piramal Healthcare for USD 3720 million. In another deal in this sector
The major M&A deal that occurred in the BFSI sector was India’s Hinduja Group acquired Luxembourg-based KBL European Private Bankers SA for USD 1690 million (USD 1.69 billion) to expand its wealth-management business in Europe. Another deal in BFSI sector was India’s largest private sector bank ICICI acquired Bank of Rajasthan for USD 648 million.
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- technology management for decision-makers | january 2011
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market dynamics
Forecasting A High Growth Ahead A recent analysis from Frost & Sullivan (F&S) shows that the Indian LT AC Brushless Alternator market (10 - 2,000 kVA) earned revenues of $202.1 million in FY 2009-10. F&S estimates this to reach $352.5 million in 2015.
T
he Indian low tension (LT) alternating current (AC) brushless alternator market is a highly competitive and organized market. Due to chronic power shortages and rapid growth across several segments such as industries, infrastructure, as well as IT and ITES, this market is heavily dependent on the Indian diesel generator set market. Leading market participants are Emerson Group, Crompton Greaves and Cummins Generator
Technologies, India. Other new entrants are Mecc Alte, Marathon Electric and Sara Elgi. During the short and medium terms, the overall market is expected to witness a high growth rate. “The burgeoning industrial sector and peak power deficit at about 15 per cent are expected to stoke demand for diesel generator set sales in India. This will in turn uplift prospects for the LT AC brushless alternator market,” says Frost & Sullivan Research Analyst Udit Krishnan. New telecom towers are expected to be added in the next few years to accommodate the needs of 3G service deployment, and high investments in infrastructure and commercial sectors will create a new wave of demand for LT AC brushless alternators for diesel generator sets.
Apart from telecom, generator set sales are poised for an upswing in the retail, industrial, manufacturing, real estate and construction sectors due to the high demand-supply gap—and growing need for power backup for higher loads. This trend will ensure higher demand for LT brushless alternator in the medium and long terms. Although the prospects for the market look bright, there are some challenges restraining its progress. The primary raw materials used in LT AC brushless alternators are copper and steel. Currently, the prices of these materials at the London Metal Exchange (LME) are increasing gradually, with steel touching $320 per ton and copper reaching $7,204 per ton. Due to the fact that the LT AC brushless alternator price in a diesel generator set comprises only 18 to 20 per cent of the total generator set cost and it is procured by original equipment manufacturers (OEMs), the overall profit margins are considerably low. “Almost all LT AC brushless alternators are supplied based on a long-term supply rate contract set among the alternator supplier and the end users such as engine manufacturers and generator set OEMs. For this reason, new entrants find it challenging to enter this market.” Product positioning and service strategies directed toward offering additional value-added services to OEMs, and end users are the key success factors for the Indian LT AC brushless alternator market.
Industry 2.0, India’s only magazine for the decision makers and influencers across the manufacturing and supply chain industries, invites your valuable inputs and opinions.
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technology management for decision makers
For editorial inputs and enquiries:
P.K. Chatterjee
Cell: 91 9320912419www.industry20.com E-mail: pk.chatterjee@9dot9.in
event report
F&S Distributes Environment Industry Awards
Panelists at the event (From L to R) Bobby Kurien Vice President– Marketing Ramky Enviro Engineers S. Varadarajan Executive Director– Finance VA TECH WABAG Akash Founder & CEO INDIS LLC B. K. Agrawal Vice President– Water Business Group Triveni Engineering Allard Nooy CEO JITF Urban Infrastructure Dr. Murali Sastry Chief Scientific Officer Tata Chemicals
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Frost & Sullivan (F&S) depicted a bullish scenario for the ‘environment markets’ at its second Annual Environment Industry Awards night. The event witnessed conglomerates getting a glimpse of growth opportunities present in the Water and Wastewater Treatment, Waste Management, Air Pollution Control and Point of Use (PoU) Water Treatment Systems markets in India.
R
ecently in Mumbai, Frost & Sullivan (F&S) presented 18 awards to 18 exemplary companies for displaying outstanding accomplishments in their respective businesses, and achieving a competitive and leading position in their markets. There were FL Smidth, Thermax, BHEL, Tata Chemicals, Eureka Forbes, Jindal Urban Infrastructure (Jindal Ecopolis), Ramky Enviro Engineers, Hanjer Biotech Energies, Selco International, Ion Exchange (India), Doshion Veolia Water Solutions, PRAJ Industries,
january 2011 | industry 2.0
Norit India, Triveni Engineering, GE Water & Process Technologies, Befesa Infrastructure India, Aquatech International and IVRCL Infrastructures & Projects and VA TECH WABAG among the award winner companies. According to F&S’s analysis, the environment market is expected to register growth rates of more than 15 per cent in the next five years. India presents a perfect balance in terms of growth across sectors, technologies, and projects. While betting big on desalination to be the key to halt the alarming water crises in
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coastal cities, F&S observed that lack of political will is the toughest hurdle to its growth. Considering the megawatts of electricity to be added in the 11th and 12th five year plans, F&S opines that power sector will bolster the further development of the environment market by way of opportunities in boiler water treatment and condensate polishing, F&S inentifies four growing prime environment markets as—Water and wastewater: Wastewater recycling and reuse, Sludge to energy, Energy efficient ZLD systems. Residential Point of Use systems market: Low cost purifiers and non-electric POU systems. Air Pollution Control: Emergence of low cost FGDS systems and emission controls for NO, VOCs and mercury emissions. Waste Management: Electronic waste and battery recycling, solvent recovery and municipal waste to power. A panel discussion on “8 to 9 per cent economic growth and its Implications on the environment” focused on innovative best practices, strategies that India should adopt when the cost of environmental damage is estimated to be over five per cent of India’s GDP. The awards recognized the inspiring and exemplary achievements by companies operating in the environment industry. The environment sector in India is currently riding on a high wave of opportunities. Companies are creating innovative best practices to capitalize on growth prospects as well as to outpace competition during these tough economic times.
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facilities & operations
Cloud Computing
For Successful Production Planning Cloud computing and an integrated information management framework together improve demand forecasting, a key component of production planning.
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Holistic and integrated business planning is possible only through integrated information approach, which involves cross-functional collaboration. Web-based production planning and inventory control tools and techniques perform better and reduce costs. by hemant satam
N
ext-generation production planning and inventory control technologies are emerging, enabling manufacturing, forecast-
january 2011 | industry 2.0
ing, engineering, material planning, warehousing and retailing teams, among others, to achieve higher levels of efficiency and productivity. Through these technolo-
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gies, companies that rely heavily on the above processesâ&#x20AC;&#x201D;mainly manufacturing and logistics companies, can increase automation, customer-centricity, customer proximity and profitability. The primary elements for improved production planning are the fast turn-around time, higher collaboration among the various functions and availability of relevant, up-to-date enterprise, partner and customer data. Processing, analysis and interpretation of this data also play key roles in successful production planning. While focusing on these aspects in production planning, there are a few aspects that many managers seem to overlook. These aspects are related to integration of enterprise-wide systems that contain data duplication and overlap in planning and communication, lack of a central repository for all production-related information, limited workflow, integration into existing MRP systems and limited reporting capabilities.
Cloud computing makes a change
Cloud computing is no longer a hype, and has come to play a critical role in the enterpriseâ&#x20AC;&#x2122;s IT strategy. A recent survey has shown that after IT/ITES, the manufacturing segment will see most adoption of cloud computing, beating user segments like financial services, healthcare, media, telecom or education. It has made web-based production planning and inventory control tools and techniques to perform better while reducing costs. Applications can now leverage the powerful performances of multi-core and multi-node hardware that drive the cloud. Hardware upgrades and scale-ups happen to accommodate higher amounts of data and applications without the enterprise users incurring the cost of upgrading their own infrastructure.
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Today, CRM, MRP and accounting applications can be integrated and customized easily at far lower cost and effort. Partners, suppliers and employees in the supply or distribution chain anywhere in the world can now login to access or update customer data in real-time. This leads to not only accurate and higher quality of customer data—but also better inventory predictability. In future, cloud computing CRM applications will enable better and newer ways of capturing and analyzing customer data.
Information sharing for better results
Cloud computing enables an integrated information management approach toward data components. This approach involves real-time access, single view of the customers and the enterprise, collaboration among stakeholders—partners, suppliers, warehousing, retail and production—and business intelligence and advanced analytics. The integrated information management approach leads to faster response to changes in customer demand, stronger customer insights, faster time-tomarket of new products, efficient inventory management and lower innovation risk. All of these lead to better planning and strategic decisions. This approach is also effective in helping an enterprise
overcome major hurdles in getting the right information at the right time in the right format: an explosion of volumes of highlyunstructured and unmanaged content from a wide variety of sources and channels. Enterprises will need to invest in technologies that simplify and shorten time to aggregate, standardize, digitize, analyze and manage business information. To enable this, they will need to create, automate and optimize business processes for integrated information management—by deploying enterprise content management and business intelligence solutions. All these tools will be available on the cloud making it easier for enterprises to move up the technology value-chain. All stakeholders will be sharing data and analytics on customer demand, stock in inventory, inventory holding and back-order costs, retailer and supplier orders, etc. This is a far cry from a few years back when stakeholders in the inventory chain only shared information on orders from customers.
The holistic view of operations
With research citing that traditional production planning processes and technologies will not be enough to stay competitive, enterprises are turning to holistic and integrated business plan-
ning. This will be built upon the integrated information approach and will involve cross-functional collaboration. The integrated information management approach uses workflows and is collaborative. It supports quality data management, provides a holistic view of customer and inventory data, and helps build dynamic business processes. Cloud computing and an integrated information management framework together improve demand forecasting, a key component of production planning, by over 60 per cent as compared to traditional MRP or ERP system, according to research reports. Also, moving to cloud computing can help enterprises innovate while dealing with challenges like poor forecast accuracy by allowing the use of the latest tools and techniques.
Conclusion
Cloud computing and integrated information technologies make immense sense for enterprises. Specially, for the capital-intensive manufacturing segment, cloud computing is a boon due to its ability to convert CAPEX into OPEX with the ‘pay-as-you-use’ model. You will thus have to pay less on maintenance and scale up faster. Hemant Satam is the Associate Vice President at Datamatics Global Services.
Advertiser index CHEP India Pvt. Ltd ............................................17
Indiamart.com ..................................................15
Rockwell Automation ........................................IFC
D Sonics Toolings Pvt. Ltd ................................. 63
JCB ....................................................................9
S & T Engineers (P) Ltd...................................... 23
Elcon Engineering Co. Ltd ................................. 25
Mitsubishi Electric....................................3, 20-21
Siemens .............................................................5
GW Precison Tools India Pvt. Ltd. ....................... BC
Power Build Ltd .................................................11
TaeguTec ........................................................ IBC
Hannover Messe .............................................. 29
Premium Transmission Ltd .............................7, 31
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industry 2.0
- technology management for decision-makers | january 2011
27
facilities & operations
Inside view of an unmanned air separating factory
A
s per the IFFC (International Federation of Automatic Control), ‘Mechatronics’ is the synergistic combination of precision mechanical engineering, electronic control and systems thinking in the design of products and manufacturing processes. It relates to the design of systems, devices and products aimed at achieving an optimal balance between precision mechanical structures and its overall electronic and computer control. The term ‘Mechatronics’ was coined by Tetsuro Mori, who was an engineer and worked in a Japanese Company named Yaskawa in 1969.
Development and depiction of ‘Mechatronics’
Advent of today’s ‘Mechatronics’ started from way behind in 1949, when John Parson and Frank Stulen at Parsons Corporation, Michigan, USA developed the concept of NC (Numerical
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Picture Courtesy: www.photos.com
Peeping Into The Future Basically ‘Mechatronics’ is the by-product of a marriage between mechanical engineering and electronics engineering. More precisely, it is a synergistic combination of mechanical engineering, electronic engineering, computer engineering, control engineering and systems design engineering to attain the objectives of optimizing product design, development and manufacturing. Considering the rapid pace of advancement in this field, today we can envisage a not-so-distant era when all factories will run without human workforces. by alok kumar roy
Control) machine tool (a form of programmable automation in machine tool operation), later the Servomechanism Laboratories at Massachusetts Institute of Technology developed the first prototype of NC machine tool. Since then, various forms or levels of machine tool automation have been developed and used in the manufacturing sector, viz., NC, PLC, DNC, CNC, FMS etc. Of these, PLC or Programmable Logic Controller is used as a form of lower level of machine automation—whereas the other three are involved in higher degree of automation in ascending order. Similarly with the advent of computer, the product design (Engineering Design) has become more simplified. Using CAD (Computer Aided Design), new product design method has not
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just enhanced quantitatively— but have become qualitatively superior. AutoCad is the most commonly used detailed engineering drawing or design tool, which finds application in the manufacturing industry world over. It is now available even in solid design and for 3D design purpose. Apart from AutoCad, innumerable number of higher level design software are available in the arena, most prominent among them are various versions of ProE (a very powerful 3D design tool, with available updated versions are wild fire 2, 3, 4 etc. Another distinct feature of this software is that 3D can easily be converted to 2D for shop floor manufacturing use), PDMS, Catia, Ansystems and Unigraphics. Then using these packages, after design and assembly of
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parts to form the product, it can be modelled and animated to test its performance. This testing procedure is called simulation, which makes the product run in an environment exactly similar to its operational field. This unique computer-based testing advantage cuts short the number of prototype testing of a product, so that quickly a successful product development is accomplishedâ&#x20AC;&#x201D; saving lots of engineering manhours and costs. CAD/CAM and Computer Integrated Manufacturing systems are the outcome of researches in Mechatronics. A fundamental objective of CAD/CAM is to integrate the design engineering and manufacturing engineering functions. By using these, a computer graphics model of each part of a product is developed by the designer and stored in the
CAD/CAM data base. That model contains all of the geometric, dimensional and material specifications of the part. This helps the part programmer in writing the CNC part programme fast. One of the very critical areas here, is the design of the control systems. A dedicated digital microcomputer is used as machine control unit, which feeds the written part programme to the servo-motor of the machine. This actuator (Piezo-electric actuators or electro magnetic actuators and motors) then moves the cutter to its programmed path for operation or processing. Modern production equipment operate on modules called control architecture. The most commonly used are hierarchy, polyarchy, heterarchy and hybrid. They are all characterised by different control algorithms.
Different applications of the field Industrial Robotics: An indus-
trial robot is a prime example of â&#x20AC;&#x2DC;Mechatronicsâ&#x20AC;&#x2122; system. It is a programmable, multifunctional manipulator designed to move materials, parts, tools or special devices through variable programmed motions for the performance of a variety of tasks. Various robot configurations are available. Some of the common configurations are Polar Configuration (CF), Cylindrical CF, Cartesian Coordinate CF, Jointedarm CF, Selective Compliance Assembly Robot Arm (SCARA). Common Industrial Robot applications (where human work is hazardous, inconvenient and even impossible) include spot welding, material transfer, machine loading, spray painting and product assembly. Development of Artifi-
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Â&#x201E;Â&#x2026;Â&#x2020; Â&#x2021;Â&#x2C6;Â&#x2C6;Â&#x2030;Â&#x2020;Â&#x160;Â&#x2039; Â&#x152;
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- technology management for decision-makers | january 2011
29
facilities & operations cial Intelligence (AI) and Sensor Technologies have revolutionised Industrial Robotics.
Flexible Manufacturing System (FMS): It consists of a number of processing stations (usually CNC machine tools) combined with an Automated Material Handling and Storage System (AGVS), and controlled by an integrated computer system. It is a versatile manufacturing system, factually capable of processing a variety of different types of parts simultaneously under CNC part programming. Various FMS workstations
MECHANICAL ENGINEERING
ELECTRONICS ENGINEERING
MECHATRONICS
COMPUTER ENGINEERING
CONTROL ENGINEERING
include CNC Machining Centres (with automatic tool changing and tool storage), Head Changers, Head Indexers, Milling Modules, Turning Modules, Assembly Workstations, Inspection Stations, Sheet metal Processing Stations, Forging Stations, etc. It is used in qualitative and quantitative (mass production in midvolume range) production of products. Today, FMS is used for a wide range of applications beyond machining. Due to its flexibility, one of the great advantage of FMS is that the change of product does not render the system obsolete.
Automated Inspection System: Today’s automated inspection procedure is complied with the
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january 2011 | industry 2.0
usage of sensors, which control and communicate data to a digital computer. Principally, it is divided into two types, viz. Contact inspection methods, Non-contact inspection methods. Former one, in which direct contact is made while the part is being inspected, and it is predominantly used in mechanical manufacturing industries, and it includes Coordinate Measuring Machine (CMM), Flexible Inspection Systems and Inspection Probes. Whereas the latter one does not involve direct contact with the product. Instead, a remotely located sensor measures or gauges the desired features for inspection (usually followed in three steps—i.e. image acquisition and digitization, image processing and analysis, and interpretation). The method is often accomplished on the production line and 100 per cent inspection is possible. It is further divided into two catagories, Optical and Non-optical. Former one includes Machine Vision, Scanning Laser Systems, Optical Triangulation Techniques etc. Non-optical sensors include Electrical Field Techniques, Radiation Techniques and Ultrasonics.
Automated Guided Vehicle Systems (AGVS): It is an automated materials handling system that uses independently operated, self propelled vehicles that are guided by means of embedded wires on the floor or reflective paint on the floor surface. There are different types of AGVS, most commonly used are Driverless Train, AGVS Pallet Trucks, AGVS Unit Load Carriers, etc. They are computer controlled and used in Driverless train operations, Storage & Distribution Systems, Assemblyline Operations, FMS and other miscellaneous applications.
Diagnostics and Reliability Engineering: Because of the complex nature of modern automated manufacturing systems, maintenance
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and repairs become a complicated issue. A feature included in some computer control systems, which enables them to identify the source of malfunction and failure detection, is called Diagnostics. The whole job is accomplished vide three steps, namely – Status Monitoring (recording the status of key sensors and parameters during trouble free operations), Failure Diagnostics (interpret the current values of the monitored variables and compare them with the values preceding the failure) and Recommendation of repair procedure (using Expert Systems and AI techniques). Biomechatronics: This is an emerging area in ‘Mechatronics’ where current research is centred on or focused. Its purpose is to integrate mechanical parts with a human being, usually in the form of removable gadgets—such as exoskeleton. This is the real-life version of cyberware. Medical ‘Mechatronics’, medical imaging systems are the other areas included in ‘Mechatronics’.
Conclusion
Presently the leading players or countries in the field of ‘Mechatronics’ are Japan, Germany, United States of America and Canada. Other countries are also following the trail. With the advent and rapid growth on ‘Mechatronics’ research, we can visualize a future factory with no human labour as work force. People will be required there only to do a lesser degree of equipment maintenance, computer programming, engineering project works, supervision, and of course factory interfacing. In other words, we conceptualize a future automated factory with no people participation in production and assembly operations. Alok Kumar Roy is the Professor of Mechanical Engineering at E-Cube Global College, (In Association with) Newcastle University, Thane (W), Mumbai.
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cover story
Warehousing In order to cope up with the rapidly growing need, Indian warehouses have to undergo a sea change. Compared to the present global standard, majority of the warehouses in the country are quite back-dated. As India has a high potential to be a global logistics hub, the country needs to build modern warehouses with state-of-the-art facilities. Also, a great shift of paradigm is very essential among the warehouse builders, designers and owners.
by pavan.v
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january 2011 | industry 2.0
- technology management for decision-makers
F
rom industry perspective, â&#x20AC;&#x2DC;Logisticsâ&#x20AC;&#x2122; is the process of planning, implementing and controlling the efficient, cost-effective flow and storage of raw materials, in-process inventory, finished goods and related information from point of origin to point of consumption for the purpose of meeting customer requirements. Logistics includes inventory management, purchasing, transportation, warehousing, organizing and planning of the following activities. Today, cer-
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in India
tain major logistics activities can be identified with respect to the logistics operations and management in a company and its supply chain. Namely, these logistics activities are—Customer service, Traffic and transportation, Warehousing and storage, Plant and warehouse site selection, Inventory management, Order processing, Logistics communications, Procurement, Materials handling, Packaging, Demand forecasting, Parts and service support, Salvage and scrap disposal and Return goods handling. In addition to these are the freight forwarding and customs clearance activities that are keys to most companies’ operations.
Evolution of logistics
Logistics evolved during the planning and execution of crusades and military expeditions, as well as with the development of trade. The beginning of logistics theory can be dated to World War II, and in business logistics, to the 1950s. The main application areas of operations research in the beginning involved logistics problems such as transportation routes and inventory models. Logistics management, as a discipline in management science and practice, was defined in the United States in 1950 to 60s—when the potential of efficient material distribution to decrease companies’ direct product costs was realized. The physical distribution models were developed because of the four factors, namely—shifts in consumer demand patterns and attitudes toward more demanding needs for high availability and variety of products, cost pressures on industry, progress in computer technology and the influences of military experience. Logistics today is more challenging than ever. It is one of the crucial areas that distinctly mark successful businesses. Time factor has become more and more important in competition. Product life cycles are becoming shorter. Time to market for new products and versions is a crucial competitive factor. Product Life Cycle Management (PLM) has become a new issue to make more profitable products, and to establish better control over the entire development chain. Time is also of essence in making on-time deliveries, while there is increasing competition in bettering delivery times. Shorter delivery times force the industry to be situated closer to the customers, or to have distribution centres close to customers, or to choose suitable partners and make appropriate business acquisitions in order to reach the markets.
Importance of logistics
Logistics also plays a key role in the economy in that it supports the movement and flow of many economic transactions. It is an important activity with regard to the facilitation of the sale of practically all goods
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and services. In order to identify with this role of logistics, consider the fact that if goods do not arrive on time, customers cannot buy them. If goods do not arrive in the correct place or condition, no sales can be made. All economic activity throughout the supply chain would suffer—if the logistics function failed to fulfil this role. As a significant element of GDP and GNP, logistics also affects the rate of inflation, interest rates, productivity, availability and other aspects of the economy. Many discussions on logistics—in fact refer to the competitive advantage that logistics efficiencies provide for a company. Companies that successfully implement innovative strategies to better manage their logistics requirements, for example, are better equipped to increase their competitive advantage and corporate profitability and to become market leaders.
Logistics in India
Over the past decade, India has been one of the fastest-growing economies in the world second only after China. India has witnessed tremendous growth not only in the domestic front but also on the export front. For Indian industry, the future is expected to be even better than the recent past and as per most projections, India will be the fastest growing of the world’s major economies. Unfortunately, this growth has not been facilitated by the logistics industry, but has happened largely despite it. This impressive growth story would not be sustainable if the logistics sector does not improve its performance and provide credible support to the Indian industry. Healthy economic growth in India is increasingly being supported by robust industrial growth. One of the relatively less known but significant sectors that support almost all industrial activity—the logistics sector—is also witnessing this growth as a follow through. However, notwithstanding its importance and size (INR four trillion), it has traditionally not been accorded the attention it deserves as a separate sector in itself. The level of inefficiency in logistics activities in the country has been very high across all modes. With the evolving business environment creating a strong demand pull for quality and efficient logistics services, core issues around enabling infrastructure, regulatory environment and the fragmented nature of the industry are being overcome gradually.
Logistics spend matrix
Outsourcing the non-core activities cuts off the extra flab in any organization. However, this depends on a case to case basis. The graph (next page) explains the industry trend, showing that warehousing is the most outsourced function after transportation; however, the
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cover story skill gap matrix gives the reality of the share of 3PL percentage in India. The dearth of competitive 3PL companies in India gives us a chance to study the ‘asis’ situation and analyze the gaps in today’s warehousing practices and reach better levels and prove that India has the potential to be Asia Pacific’s logistics hub. Today, in India we need radical thinking to take warehousing to better levels to cash in on many opportunities that might come up in the next years.
Logistics segments
The logistics segment can be broadly categorized into three segments as—Transportation, Warehousing and Value-add services. Transportation: By providing transport facilities one earns freight as revenues. Transportation can take place through surface—by road and rail, or one can use air or water transport depending upon urgency and cost feasibility. Warehousing: Warehousing is nothing but storage of products and goods to be transported whether inbound or outbound. The size of the segment in 2006 was estimated at Rs 1.2 trillion. Warehousing facility needs to change depending upon the mode of transport. Privatization of container rail transport is expected to drive growth of Container Freight Stations (CFS) and Inland Container Depots (ICD). Suchwarehouses are used for transshipments. There are different types of warehouses, such as—multimodal, port-based, air cargo transshipments, etc., to cater to the needs of different modes of transport. Warehousing has also been dominated by small players—who lack scale, handling and stacking technologies. Value added services: Apart from transportation and warehousing, the logistics industry comprises other related services such as—packaging, labelling and assembling, express services, tracking and tracing, cold chain, third party logistics etc. Again, depending upon mode of transport, service requirements differ. In case of rail transport, services such as stuffing, destuffing, rail container services are required. On the other hand, in case of water and air transport, servic-
Outsourcing matrix
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Logistics spend matrix Country
Logistics cost/GDP Share of 3PL
China, India
13-15%
<10%
U.S.
9.9%
57%
Europe
10%
30-40%
Japan
11.4%
80% Source: KPMG—Logistics skill gap
es such as—custom clearances and freight forwarding are provided.
Evolution of warehousing
The roots of warehousing go back to the creation of granaries to store food, which was historically available for purchase during times of famine. As European explorers began to create shipping-trade routes with other nations, warehouses grew in importance for the storage of products and commodities from afar. Ports were the major locations for warehouses. As railroads began to expand travel and transportation, the creation of rail depots for the storage of materials became necessary. World War II impacted warehousing in several ways, including the need to increase the size of warehouses and the need for more mechanized methods of storing and retrieving the products and materials. As mass production grew throughout manufacturing, the needs of efficient and effective warehousing capabilities grew with it. Warehousing is a key component of the overall business supply chain. The supply chain consists of the facilities and distribution options for the procurement of materials from manufacturer to customer and all points in between. It includes the production of materials into components and finished products and then the distribution to customers.
Growing need for warehousing
In today’s market scenario, the need of warehousing is growing rapidly, because of several reasons. Some of them are discussed in the subsequent paragraphs. Seasonal production: As agricultural commodities are harvested during certain seasons, but their consumption or use takes place throughout the year, there is a need for proper storage or warehousing for these commodities, from where they can be supplied as and when required. Seasonal demand: There are certain goods, which are demanded seasonally, like woolen garments in winters or umbrellas in the rainy season. The production of these goods takes place throughout the year to meet the seasonal demand. So, there is a need to store these goods in a warehouse to make them available at the time of need.
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Range of services Value added services
Warehousing related to inland distribution whether inbound or outbound LTL transhipment centres
Services bundled around road transportation and warehousing like express, cold chain, track and trace, packaging, consulting etc.
Railway cargo transportation
ICD / CFS Multimodal warehouses
Services bundled around rail transportation and warehousing like dedicated rail container services, stuffing/destuffing, consolidation etc.
Water
Rail
Warehousing
Trucking and related services like fleet management, network optimization, route planning etc.
Shipping operations, Port development, Breakwater projects, Dredging, pilotage and towage, stevedoring, ship repair etc.
Air
Modes
Road
Transportation
Air cargo operations Ownership and operation of cargo aircraft
Freight forwarding Freight consolidation NVOCC Customs clearance
ICD / CFS Port based warehousing Tank farms
Air cargo transhipment warehouse
Express and courier services Freight forwarding Customs clearance Source: Skill Gapâ&#x20AC;&#x201D;KPMG
Large-scale production: Manufacturers also produce goods in huge quantities to enjoy the benefits of largescale production, which is more economical. So the finished products, which are manufactured to benefit from the economy of scale, need to be stored properly, till they are cleared by sales. Quick supply: Both industrial as well as agricultural goods are produced at some specific places but consumed throughout the country. Therefore, it is essential to stock these goods near the place of consumption, so that they are made available to the consumers at the time of their need. Continuous production: Continuous production of goods in factories requires adequate supply of raw materials. So, there is a need to keep a sufficient stock of raw material in the warehouse to ensure continuous production. Price stabilization: To maintain a reasonable level of the price of the goods in the market, there is a need to keep sufficient stock in the warehouses. Scarcity in supply of goods may increase their price in the market. Again, excess production and supply may also lead to fall in prices of the product. By maintaining a balance of supply of goods, warehousing leads to price stabilization.
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Types of warehouses
In order to meet the requirement, various types of warehouses came into existence. Today, our warehouses may be classified asâ&#x20AC;&#x201D;Private warehouses, Public warehouses, Government warehouses, Bonded warehouses and Co-operative warehouses. Private warehouses: The warehouses that are owned and managed by the manufacturers or traders to store, exclusively, their own stock of goods are known as private warehouses. Generally, these warehouses are constructed by the farmers near their fields, by wholesalers and retailers near their business centres and by manufacturers near their factories. The design and the facilities provided therein are according to the nature of products to be stored. Public warehouses: The warehouses that are run to store goods of the general public are known as public warehouses. Any one can store his goods in these warehouses on payment of rent. An individual, a partnership firm or a company may own these warehouses. To start such warehouses a license from the Government is required. The Government also regulates the functions and operations of these warehouses. Mostly these warehouses are used by manufacturers, wholesalers, exporters, importers, Government agencies etc.
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Picture Courtesy: www.photos.com
cover story
Government warehouses: These warehouses are owned, managed and controlled by central or state Governments or public corporations or local authorities. Both Government and private enterprises may use these warehouses to store their goods. Central Warehousing Corporation of India, State Warehousing Corporation and Food Corporation of India are examples of agencies maintaining Government warehouses. Bonded warehouses: These warehouses are owned, managed and controlled by Government as well as private agencies. Private bonded warehouses have to obtain license from the Government. Bonded warehouses are used to store imported goods for which import duty is yet to be paid. In the case of imported goods the importers are not allowed to take away the goods from the ports till such duty is paid. These warehouses are generally owned by dock authorities and found near the ports. Co-operative warehouses: These warehouses are owned, managed and controlled by co-operative societies. They provide warehousing facilities at the most economical rates to the members of their society.
Functions of warehouses
Apart from the basic function of storage, the modern warehouses also perform a variety of other functions. Some of the most common functions of warehouses that we see in India areâ&#x20AC;&#x201D;Storage of goods, Protection of goods, Risk bearing, Financing, Processing, Grading and branding, and Transportation. Storage of goods: The basic function of warehouses is to store a large stock of goods. These goods are stored from the time of their production or purchase till their consumption or use.
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Protection of goods: A warehouse provides protection to goods from loss or damage due to heat, dust, wind, moisture etc. It makes special arrangements for different products according to their nature. It cuts down losses due to spoilage and wastage during storage. Risk bearing: Warehouses take over the risks incidental to storage of goods. Once goods are handed over to the warehouse-keeper for storage, the responsibility of these goods passes on to the warehousekeeper. Thus, the risk of loss or damage to goods in storage is borne by the warehouse keeper. Since it is bound to return the goods in good condition, the warehouse becomes responsible for any loss, theft or damage etc. Thus, it takes all precautions to prevent any mishap. Financing: When goods are deposited in any warehouse, the depositor gets a receipt, which acts as a proof about the deposit of goods. The warehouses can also issue a document in favour of the owner of the goods, which is called warehouse-keeperâ&#x20AC;&#x2122;s warrant. This warrant is a document of title and can be transferred by simple endorsement and delivery. So, while the goods are in custody of the warehouse-keeper, the businessmen can obtain loans from banks and other financial institutions keeping this warrant as security. In some cases, warehouses also give advances of money to the depositors for a short period keeping their goods as security. Processing: Certain commodities are not consumed in the form they are produced. Processing is required to make them consumable. For example, paddy is polished, timber is seasoned and fruits are ripened. Sometimes, warehouses also undertake these activities on behalf of the owners. Grading and branding: On request, modern warehouses also perform the functions of grading and branding of goods on behalf of the manufacturer, wholesaler or the importer of goods. It also provides facilities for mixing, blending and packaging of goods for the convenience of handling and sale. Transportation: In some cases warehouses provide transport arrangement to the bulk depositors. It collects goods from the place of production and also sends goods to the place of delivery on request of the depositors.
Warehouse versus godown in India
The concept of warehousing started in India post 1990. The companies that invested in India were those who understood the customersâ&#x20AC;&#x2122; needs better and knew that India required warehousing in a big way. Only a handful of companies were successful in implementing this concept in India. Over 90 per cent of the Indian companies do not know the difference between a warehouse and a
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and are exposed on the top. Consignments could easgodown. A godown is a stocking place that does not ily get wet during rains. have the basic infrastructure of a warehouse. Go• Typically the so-called warehouses are built to downs are usually used by the traditional transportastore assorted materials. Their heights can vary from tion companies that store materials in a haphazard 12 to 25 ft., since all the godowns are being converted manner before dispatching it to the customer or forto (so-called) warehouses of late. Also, the areas on warding the material to another destination. They do which they are built are too short for optimization. not comply with the basic safety requirements, or recHeight and area are critical factors in choosing the ommendations for handling material equipments or right warehouse for optimization. any kind of IT infrastructure. • Flooring is one of the most important factors in The reasons behind this are the absence of expowarehousing operations. It plays a vital role in terms sure towards world class infrastructure and maturity, of speeding the warehouse operations, safety of the and lack of knowledge sharing on requirement of a workers etc. Better the flooring, warehouse and its necessity. Tradismoother is the warehouse perfortionally, transportation companies in mance in terms of distance travelled India do not have a basic knowledge 10.42% by the goods inside the warehouse. of warehousing. The pie chart beside But in most of the converted godowns clearly indicates that storing materiin India, hardly any attention is paid als still remains the only function of on maintaining proper flooring. a warehouse. • The so called warehouses are neiIn India even today, at many 89.58% ther concerned about the safety of places warehousing means a tradithe goods stored, nor do they bother tional structure having four walls of for the working personnel. They are any height, any area and any design. not aware of the mandatory safety These so called warehouses are usuHave knowledge beyond storing materials requirements a warehouse should ally designed for storing materials Do not know beyond storing materials possess. Because of this, many acwithout any actual purposes. Some of the characteristic features of Storing materials still remains the only cidents go unnoticed. • There are many other factors that these so called warehouses are– function of a warehouse. the so called warehouses need to • The so-called warehouses are all possess or focus on to match the standards of the converted godowns. Most of them do not have proper state-of-the-art warehouses. Some of those are— design—as they are all designed to store goods in a Space in the staging area, Floor markings, Quarantine haphazard fashion that the present industry practices area, Inspection area (if required), Spacious office do not accept. There are very peculiar designs with area outside the warehouse floor space, Distance of pillars of unequal thickness between the construcaisles based on the MHE used and the racking elevattions, uneven flooring and many other irregularities. ed, The capacity of the soil based on the height and All these design problems are found because they are the tonnage stored, Emergency outlets, Fire alarms, primarily built as transportation hubs and to store Automatic water sprays or temperature detectors, sundry materials. Fabricated roof sheets that reduce the temperature • They are either built on the main roads leaving no inside the warehouse, Specialized rooms for healthspace between the warehouse gate and the road, or care products, FMCG goods and Maintaining requirewithout a sufficient turning radius for the vehicles, or ments of ISO standards, etc., including the knowledge without any parking space. of the workers. • Most of the so-called warehouses do not contain dock levellers, instead they have a protruded area of the cemented floor that can touch the base/floor of Educational level of the working personnel the vehicle. Most of these cemented areas never touch It is quite evident that the Indian logistics industry has the floor of the vehicle and the consignments are una long way to go. Even today, transportation is a synloaded either by pushing them manually or by dumponym for logistics in India. Logistics or warehousing ing them from a certain height. Most of the so-called is not a rocket science that it cannot be understood warehouse owners think that the dock levellers are easily. It is a matter of transporting and storing the a waste of money. However, in today’s logistics sceright quantity of materials in the right way to be made nario, dock levellers are required at every such wareavailable in the right place at the right time. house for better handling and to avoid damages. For It has never been a pre-requisite for a logistics most of the so called warehouses, the dock levellers manager to have a formal education of more than an or the cemented area are not covered by the ceiling SSC or an SSLC course. This has been the practice in
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cover story Warehouse worker—Education level 70
Some basic facts
60 Percent
50 40 30 20 10 0
MBA
Graduate
PUC
SSLC
No idea
Warehouse manager—Education level 70
Typically warehouse or godowns are built based on the land the owner or landlord possesses. Looking at the overall picture—many of the warehouses are built on agricultural lands that were meant for crops. As the city limits expanded, these were converted into buildings or complexes. Commercial buildings are constructed with or without a proper architectural background possessing no potential or less potential of a warehouse. They pretend to be a warehouse, but do not possess the basic requirements of a warehouse. The ultimate aim of the landlord is to make quick bucks on the land he possesses. Little is he bothered about the type of consignments being stored, or the need to preserve its quality.
Problems that need to be fixed
60
The warehouses of yesteryears were built with a view to storing the consignments and delivering when needed (Transport hub). But the company managements never considered finer points such as—Building quality, Building design, Parking space, Height,
50 Percent
• Is warehousing not a value-add in the supply chain? • Or is there another reason?
40 30 20 10 0
VC / Investor MBA
Graduate
PUC
SSLC
most companies even today. Managers with experience in managing godowns, transport hubs are today called warehouse managers. But what have these warehouse managers been doing all these years? Merely taking care of operations—such as distributing the load to different states or destinations where the consignments are to be sent, or maintaining the stock or consignments for certain periods of time until the client calls for the consignment. The situation is not much different with the subordinates working under the managers. The workers or subordinates are typically either loaders or data entry operators or supervisors looking after the godown.
But why do we see this trend?
• Is it not necessary to have more educated people manning these warehouses? • Does the industry call for people who are not educated? • Has it been a practice to hire people who are not well educated? • Does the warehouse job mean just a store keeper?
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Gaps
Gaps
Warehousing Gaps
Gaps
Customer and end users
Logistics provider
Triangle that describes the three main shareholders of warehousing business. Strategy
Mandatory requirements
Execution
Long term focus
ISO
Skilled manpower
Business plan
Quality standards
No KPIs followed
Growth vision
Education
No standards followed
Corporate planning
Trainings
No SOPs
M&A Focus on market segments Technology up gradation
The gaps in the triangle include various parameters as listed here.
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Entrance, Dock levellers, Light intensity, IT and communication systems, Return on investment, Throughput volumes handled, Costing model used, Space utilization, Forecast in economy growth, Location strategy, Infrastructure improvement, New trends, Pro-active approach, Multi-use of warehouse and Technological development. Clearly, there is still a long way to go for the Indian logistics industry, especially the warehousing sector. For ages, transportation has been the only form of logistics well known in India, if only because it is in the late 1990s that we first began to become aware of the developments in the field. Even today, transportation continues to be a synonym for logistics in India, while truly logistics is all about storing the right quantity of materials in the right way to be made available in the right place at the right time. The need for warehousing is a matter to be discussed among various industries. Warehousing needs differ from a chemical company’s needs to a manufacturer’s or the FMCG industry’s. For example, the manufacturing industry might not need a warehouse for supply to its OE (Original Equipment) customer, while there are specific business requirements within the OE business that require the LSP (Logistics Service Providers) to deliver the goods on a JIT basis directly into the assembly line or value add to the part before delivery. The same model is not applicable to the after market or spares market—where the business is more of time to market and availability. The market share is purely dependent on the spares available and other factors (quality etc.). FMCG usually follows a model similar to that of the hub and spoke kind of warehouses or the centralized warehouses rather than decentralized ones.
Opinions of some field experts
With a view to getting a better insight of the present condition of the warehousing industry in India, some opinions were collected from the experts in various logistics companies, different industry verticals and consultants, through a survey. There were several questions under different heads covering topics like—Educational qualifications, Safety aspects, Facility locations,
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Infrastructure and Legal issues. The section-wise results are given hereafter.
General This section talks about the general parameters of Indian warehousing—such as maturity, exposure to global standards and other generic issues and the as-is situation. Maturity: The graph clearly shows that Indian warehousing industry is yet to mature and reach global standards in terms of—Radical thinking, Following good practices and avoiding short cuts, Optimized way of working, Infrastructure improvement, Document and smooth operations. Exposure: Clearly, Indian companies lack exposure to global warehousing practices. Slightly exposed: Small-time companies have heard of warehousing practices from other companies, owners, transporters— but are not exposed to the technicalities of warehousing such as designing the layout, operational efficiencies, Government norms, etc. The second graph explains the minimal exposure small-time companies possess. The main reason is that 75 per cent of the so called warehouses are run by the transporters in India—who do not even have the basic knowledge of warehouse management. The transporter (especially the single owner) uses his godown as a warehouse to store materials. Matured: Most Indian companies fall into the category where the management is aware of the need for warehousing. An important point is that the management is aware of the business need but is not much interested in the operations after entering the contract. In short, the companies are aware of the business need but do not heed to the complaints of customers after the deal is done. The lack of operational efficiencies is a common complaint heard from many customers. Maturity and awareness per se are obtained through various modes such as conferences, magazines, through customers’ feedback and even through employees who join from other firms. Highly exposed: MNCs who have a strong global presence especially in the warehousing business fall into this category. Their warehouses are—Properly designed, Automated, Manned by employees with maxi-
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25.00%
25.00%
50.00%
Least matured
Slightly matured
Matured
Maturity of Indian logistics companies in terms of warehousing practices
12.50%
25.00%
62.50%
Slightly exposed
Matured
Highly exposed
Exposure/Maturity of Indian logistics companies in terms of best warehousing practices
25.00%
75.00%
Yes
No
Warehouse operated mainly by transporters
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cover story
25.00%
25.00%
50.00%
Partly automated Defined layout present No layout
Warehouse design
12.50% 25.00%
62.50%
Partly automated Defined layout present No layout
Space optimization inside the warehouse
12.50%
37.50%
50.00%
Worst
Bad
Fair
Accessibility of the warehouse in terms of approach road
40
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mum awareness, Aware of best practices in the industry, Manned by trained employees, Have and follow defined KPIs (Key Performance Indicators), Follow safety norms, Possess IT systems and properly defined SOPs (Standard Operating Procedures). Warehouse design: Automation is still not too developed in the Indian warehousing industry. Not surprisingly, almost a quarter of the warehouses in India do not have a specific or defined layout. This means that the operations are carried out in a highly haphazard way. Though 75 per cent of the warehouses have a defined layout (partly automated is also considered as having a defined layout), there is a huge potential for upgrading this to 100 per cent. The lacking 25 per cent is from the so called warehouses (godowns) managed by single owners. Automation happens in organized companies that are exposed to the global warehousing standards. Further, when both graphs are interlinked, a relation can be established. Though there is a defined layout present, The optimization of the space leaves much to be designed.
Facility location
neither the driver nor the warehouse personnel to load or unload the goods. This is the reason why the trucks are usually seen parked near the main road junction or at the service roads. Availability of basic amenities: Availability of basic amenities (such as hospitals, canteen, fuel station etc.) forms a major role in location of a warehouse. The graph below explains the results of a poll conducted on this. More than 60 per cent of the warehouses in India lack basic amenities that will help working conditions for transporters and warehouse employees. Although there are companies that provide basic facilities—such as canteens, toilets and first aid, there is still a major improvement to be done. Outside octroi limits: Octroi is a state levied tax that basically takes care of the economy for the rural population. This is prevalent in Maharastra that houses many OEM majors including other industry sectors. Octroi has a huge impact on warehousing until the GST (General Sales Tax) concept is implemented. Goods that are transported and stored in the warehouses that are inside the octroi limits need to pay octroi charges (which are levied by the respective state Government), when the goods enter the octroi limits. The graph (on left) explains that about 62.5 per cent (Good + Fair) of the warehouses are situated outside octroi limits. There are godowns that are situated inside the octroi limits, although these are usually used for private purposes and not for any customer transactions.
This section explains the as-is situation of the facility location. This gives an overview of the location of the warehouses in-land and near the ports. Approach road to the warehouse: The approach to the warehouses should always be easy, especially for the bigger trucks or container vehicles to enter the warehouse premises. This will ease out a lot of traffic congestion both at the warehouse as well as the approach road to the warehouse. There should also be ample 25.00% parking space within the 37.50% warehouse premises or in front of the warehouse, so that traffic is not ob37.50% structed. The graph (left side) clearly illustrates that about 62.5 per cent of Worst Bad Fair the warehouses have either a near–to–imposAvailability of amenities such as sible approach or a bad hotels, hospitals, petrol pumps patchy road that helps near the warehouses
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Warehouse near ports (Air / Sea) and highways: The warehouse location has to be decided strategically based on different industry needs. However, the most common strategic locations include—Sea ports for International trade, Air ports for domestic and international trade, Highways for domestic surface movements and second leg distribution, Waterways not yet
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explored in India, Near to the customers or end users—based on different industries and many other locations depending on the advantages. However, it is seen from the graph that about 85 per cent of the present warehouse locations are seemingly situated at strategic locations that do not hurt either the logistics company’s or the customer’s bottom line or the reach to the customer. But there are SEZ programmes set up across the country to make the trade more economical, businesses more profitable and create a one-stop-shop for the customers to choose the warehousing partner.
Infrastructure This section explains the as-is situation of the present warehouse infrastructure such as safety aspects (fire, emergency exits etc). Warehouse height: Warehouse height forms a major role in the entire warehouse operations. It affects the entire costing of the warehouse as it changes the investment pattern, attracting expensive MHE (Material Handling Equipments) to be in place. Further, warehouse height is the basic parameter any customer would consider, as going high is economical than going flat on the ground. However, a basic break-even analysis would help the management in deciding whether to go for a multi-storeyed warehouse or a simple building that can go flat on the ground. Note: The graph above is only for understanding purposes and does not depict
actual data. The parameters of the axis are defined only as an example and the values are not actual ones. Safety aspects in the warehouse: Safety is compromised to its maximum in most Indian warehouses. Safety features are not even thought of while constructing the warehouse buildings whether they be emergency exits, fire alarms, fire fighting equipment, or even basic safety training for employees. It is shocking to find that almost half the warehouses in India are not built with safety features. The graph (next page) shows that the warehouses are built only for the purpose of storing goods, but does not even bother to think the indirect consequences the materials might have during storage. However, only a small percentage of the warehouses comply with safety norms. The graph (next page) gives more details on the safety aspects in today’s warehouses. There have been many instances where warehouses have ignored safety issues and have later paid a heavy price. Other operational facts: Most of the warehouses do not have loading and unloading bays. The materials are loaded or unloaded either manually or through a makeshift arrangement of wooden planks. The ratio of absence of bays to the presence of bays is 62:38. The graph (next page) can be again referred to the graph that illustrates the presence of the layout in the warehouse. It can be explained that there is a pre-defined layout present for the warehouses and the
12.50%
37.50%
25.00%
25.00%
Worst
Bad
Fair
Good
Warehouse location outside octroi limits
12.50%
12.50% 12.50%
62.50%
Worst
Bad
Fair
Good
Warehouse location near ports and highways
12.50%
25.00%
12.50%
50.00%
Worst
Bad
Fair
Good
Height of the present warehouses
Breakeven analysis (Flat versus going vertical) www.industry20.com
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cover story 12.50%
50.00%
50.00%
Worst
25.00%
Bad
62.50%
Worst
Safety aspects in our warehouses
Fair
Good
Presence or usage of MHEs
12.50% 25.00% 37.50%
37.50%
availability of space for racking is also present. However, due to other constraints, racking is not provided. It is not a surprise to know that the so called warehouses managed by the transporters do not make use of material handling equipments (MHEs). The graph (left) explains that about 60 per cent of the warehouses do not use any kind of MHEs. Labour is the most important factor of any kind of business across the world. Getting the right labour for any business is a challenge in itself. This has haunted even the warehousing business. Especially in India, where there are unions, warehousing managers are compelled to work with the available workmen, train them to certain standards and manage them effectively. It is also a challenge to maintain the same labour daily as they tend to change. The graph (left down) indicates clearly that more than half of the warehouses face a drought of skilled manpower and the consequences are bad.
Legal facts 62.50%
Worst
Bad
25.00%
Fair
Worst
Presence of fire and emergency exits
Bad
Fair
Availability of skilled labour
12.50% 25.00% 25.00%
50.00% 75.00%
12.50%
Worst
Bad
Fair
Bad
Good
Presence of loading / unloading bays
Fair
Effect of labour unions
Conclusion
12.50%
12.50%
25.00% 12.50% 25.00% 62.50%
12.50% 37.50%
Worst
Bad
Fair
Worst
Availability of space for racking 42
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Bad
Fair
Good
Excellent
Reliability of land documents
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This section explains the legal aspect of warehousing in India and as-is situation of the documentation or paper work of the warehouses built or to-be built and godowns that are presently being operated. Clarity and reliability of land documents: The logistics fraternity believes that only a quarter of the land shortlisted for warehousing businesses contains legally accepted and authentic documents. The remaining three quarters of the land either does not possess authentic documents or has only incomplete sets of documents. The reason for the discrepancy is mainly because the land offered for the warehousing business is either an agricultural land that is converted. Further, another kind of transaction for a warehousing business is that the owner of the land (obtained from ancestral property) builds a shed without knowing the requirements or understanding the technical aspects of the warehouse and offers the same as a (so called) warehouse.
Based on these facts and figures, there is a lot to improve in the warehousing industry per se in India. Considering the economic growth in the future years to come, there is an immediate need to improve the entire system of warehousing in the country. This will not only help the respective businesses, but also put the sub-continent on the global map. There is a possibility of India being considered as the major logistics hub considering various factors such as cost, availability of manpower, strategic locations and other factors that are logistically advantageous. Pavan. V is Officerâ&#x20AC;&#x201D;Corporate Logistics Department at Bosch Ltd, Bangalore.
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manufacturing technology
Grinding With
Micro Granite Bed
On the eve of 15th Metal Cutting Tool Exhibition, Tooltech 2011 (IMTEX 2011), Indian machine tools manufacturers are gearing up to display their innovative machine tools. Likewise, Cosmos Impex (I) Pvt. Ltd. is all set to launch an innovative grinding machine there. In the words of Bina Khambhaita, Executive Director, Cosmos, “We will showcase this machine for the first time in IMTEX Exhibition and we are also going to apply for the FIE Award for the design and innovation of this machine. So far this machine technology is available only from Germany and Japan. We are the first company to develop this in India.” Before we see the actual machine in the exhibition on 20th January, 2011, let us have a glimpse of it... table creep-feed) has become a standard. Depending on the machine design, creep-feed grinding is now accomplished within any axis of movement or combination thereof. A few examples are listed in the subsequent paragraphs.
Rotary, plunge and cross creep-feeds
According to Cosmos sources, all models have been designed with the production environment in mind, and feature ultra rigid polymer concrete or mehanite grade
Cosmos creeps feed machine— VSS 8383
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reep-feed grinding is a profile grinding method involving deep depth of cut. This method provides many times higher performance levels than possible with conventional grinding—as a result of larger wheel contact arc and an appropriate machine con-
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cept. Simple creep-feed has long since become a thing of the past. 500mm/min, for a long time considered as the sound barrier—has long since been exceeded. Since those days, the field of application has been extended in many directions. The original creep-feed in the X direction (longitudinal
- technology management for decision-makers
cast iron machine beds—giving a small footprint, traditional CNC or touch screen control options and fully enclosed guarding. The absence of a reciprocating table and a wheel head column also gives major benefits with respect to structural rigidity and machine dynamics.
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Khambhaita informs, “These machines are primarily employed for grinding the fir tree root profiles of turbine blades, and this to a level of accuracy only achieved by machines manufactured from our present modular concept— whether these turbine blades are used in an aircraft jet engine, in electricity generating turbines, or gas pumping stations is just a question of tooling and matching of machine size.” “We have further developed for using same machines for oscillating surface grinding—where surface finish is a critical parameter—it could be achievable after creep grinding,” she adds.
Micro-Granit (Polymer concrete)
New materials and alloys are the reason for the last years’ out-of-proportion increase in the efficiency of metal working machines. One of the most interesting materials is MicroGranit (scientific term—‘concrete polymer’). Field trials proved within short Micro-Granit’s superiority to cast iron machine beds. An ascertainment which was confirmed by scientific findings of concrete
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polymer tests carried out by universities and material research laboratories.
Micro-Granit’s most essential qualities
• Exemplary damping • Constant temperature • Rapid availability, cures in ten hours • Smooth finished surfaces • Oil and coolant emulsion resistant • Low specific gravity results in greater wall thicknesses with the same total weight (as cast iron) • Generally no need for a foundation • Raised performance through improved general behaviour It is precisely this last point, which shows the superiority of Micro-Granit. The following comparable values relate to a cast iron and a Micro-Granit machine. Grinding was carried out at creep-feed rate with CD on a machine with cast iron bed. The maximum feed rates value achieved was 900mm/min with 3mm chip in-feed. Chatter and wheel wear dictated the limits. An absolutely comparable machine with Micro-Granit bed permitted right from the start a table tra-
verse rate of 1800mm/min using the same in-feed. The graph shows the influence of the ambient temperature (sudden change in temperature) on a machine bed consisting of MICRO-GRANIT and cast iron respectively.
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- technology management for decision-makers | january 2011
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manufacturing technology
Preventing Failure Of The Heart Of Your Plant Micropitting on gears may not only lead to problems with gears, but with bearings and seals as well. If left uncontrolled, it may lead to a total system failure. A properly selected gear lubricant can ensure smooth function and long life of all these components. by michael j. hawkins
G
earboxes deliver a vital source of power transmission, and for many industrial businesses, represent the heart of production. Today, advancements in technology have enabled designers to decrease the footprint of gearboxes while maintaining the same—or even higher—power transmission capabilities. Compared to previous models, these newer, high performance units typically require lubricants that offer more comprehensive protection. If a gearbox is not
The selection of the appropriate viscosity grade is the first and most important step in choosing a lubricant.
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properly maintained with the appropriate lubricant, there’s the potential for the heart to break, or experience a condition known as micropitting. A common sign of inadequate gear lubrication—micropitting is surface fatigue that is mainly observed in gears—but which can also occur in rolling element bearings. Micropitting causes destructive wear that can occur within the first few hours of operation. If left uncontrolled, it can cause a reduction in gear tooth profile accuracy, gear breakage and, over a time, lead to system failure. Micropitting on gears may not only lead to problems with gears, but with bearings and seals as well. The main concern with micropitting is that this wear—which is often overlooked— can cause the shape of the gear teeth to change. To this end, it is critical that a company select a gear lubricant that can supply long-lasting protection for all the components. The selection of the appropriate viscosity grade is the first and most important step in choosing a lubricant. Under extreme condi-
- technology management for decision-makers
tions, simply increasing the ISO viscosity grade of the oil is not necessarily preferred. Instead, choose a high-performance synthetic lubricant that features a balanced formulation and is designed to deliver exceptional, long-lasting wear and corrosion protection. In addition, look for a product that has been endorsed by major gearbox OEMs, and meets the industry’s most demanding specifications, such as DIN 51517 Part 3 and AGMA 9005 E02. For example, Mobilgear SHC XMP Series lubricants are supreme performance, heavy-duty synthetic gear oils primarily designed to provide outstanding equipment protection, oil life and problem-free operation. The combination of premium synthetic base fluids, a naturally high viscosity index and unique additive system help Mobilgear SHC lubricants deliver exceptional performance under severe high and low-temperature operating conditions. Additionally, the synthetic base stocks have inherently low traction properties that result in low fluid friction in the load zone of non-conforming surfaces, reducing fluid friction—which produces lower operating temperatures and promotes improved gear efficiency. What’s more, they have outstanding EP, oxidation and thermal properties and resistance to shock loading, all of which can enhance gearbox performance and improve productivity—and promote longer life for the heart of your facility. Michael J. Hawkins is the Global Brand Manager (Mobil SHC Brand) at ExxonMobil Lubricants & Specialties.
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materials & processes
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Emerging Composite
Researchers at Fraunhofer have developed a new polymer-metal material that has sensory properties. With the new composite material, it is possible to produce plastic component parts that monitor themselves. This material can be combined with various others and used in a variety of different ways.
Picture Courtesy: Fraunhofer Institute for Manufacturing Technology and Applied Material Research (IFAM)
W
hen the storm winds blow, wind turbines have to show what they can stand up to. The wind blows hard against mills with the force of tons as the tips of the blades plow through the air at more than 200 kilometres per hour. But natural forces not only tear at wind turbines; machine components made of plastic or airplane wings must withstand substantial loads as well. These days, we normally use sensors to measure whether these components are strained beyond capacity, and it requires a lot of effort to install them into the component parts or glue them onto their surface. Because these monitoring sensors usually only register tensile or pressure loads in a small range, we link several individual sensors to create a single network—if we want to record greater areas on the component. Researchers at Fraunhofer Institute for Manufacturing Technology and Applied Material Research (IFAM) in Bremen, Germany, are now making it measurably easier to inspect these large-scale components—because they have come up with a new composite material especially for components made of plastic. It has sensory properties that can be directly worked or installed into a synthetic component when it is manufactured. This material also meets design requirements. This new composite material is a blend of plastic and metal better known as polymer-metal composite material. There is a wide range of plastics that are suited as a matrix material for manufacturing this composite, which means that it can easily be tailor-made for a whole series of purposes. Also, it has other advantages. First of all, due to its synthetic character, this material can be easily processed. Beyond this, it is lightweight and conducts current and heat
very well due to the high proportion of metal in it. What is especially fascinating about this material is the fact that it can be processed with conventional machines used in plastics manufacturing—among other things, in extruders or in injection-moulding machines in which the heated liquid plastic is injected into a form—where it hardens immediately. Finally, this material can be laminated as a type of mat on large surfaces. In the future, researchers want to use nozzles to apply this conducting plastic as a viscous liquid to geometrically complex surfaces. This polymer-metal composite material has its high proportion of metal and a special mixing technique to thank for its excellent sensory properties. As Arne Haberkorn, the project manager for composite developments at the Fraunhofer Institute for Manufacturing Technology and Applied Material Research, points out, “We reach a metallic filling proportion of as much as 90 per cent
in weight in this composite when needed, with the composite‘s electrical resistance changing if there are loads during operation. The signals can be drawn off with cables on the component part and passed them onto a measuring instrument for analysis.” It was a special challenge for Haberkorn and his colleagues to come up with a technique for evenly processing different metallic substances in liquid plastic. This new technique functions with a whole range of synthetic materials—for instance with polypropylene just as well as with polyamide. Haberkorn says, “This means we can combine our polymer-metal composite material with various synthetics and process them into a wide range of component parts. That includes not only solid and heat-resistant, but also soft-flexible workpieces.” Researchers have used various prototypes to demonstrate that the method functions, and are now searching for potential industrial users.
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The new composite material is a blend of synthetic and metal that has sensory properties.
- technology management for decision-makers | january 2011
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supply chain & logistics
Simplifying Backoffice Workload
Implementation United Courier Services (UCS), based near Basildon, UK, offers “Everything changed when my services for courier and light haulage. More specifically, they account manager, Tony Ward, provide traditional same-day transport along with specialist demonstrated a module of the delivery for garment and print or display companies. The company PODFather, which allowed the uses a mixture of permanent and subcontracted staff to deliver drivers to create new jobs on the handheld computer while out a personalised service to customers via a mixed fleet of vehicles and about. So, not only were the from motorbikes to 17 tonne artics (articulated vehicles), including drivers returning electronically customised vehicles for delivering 3,000 garments per load. signed PODs with photographs Application of technology has simplified their mammoth task of POD attached, but also if a customer (Proof of Delivery) management and customer integrated tracking. needed a new job carried out in a
Picture Courtesy: www.photos.com
agement away from the lifeblood of the business—new sales. In the words of Managing Director of UCS Kevin Davies, “We used to use traditional carbon paper PODs, by the time they got back to the office, many of them were either unreadable from bad weather or torn. We were unable to invoice until this hard copy POD was received, which, for drivers who are based on the other side of the country, sometimes meant days. This lead to delays in us receiving payments from customers.”
Action plan
Contrary to the traditional practice of carbon-traced PODs, use of networked PDAs increases business efficiency.
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ike several small companies providing same-day courier services, in the early days of the business, in UCS too accounting was carried out on Excel spreadsheets and PODs were paper-based. Many man-hours were spent on scanning or faxing PODs to customers, which took senior man-
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Having seen the big players in the logistics markets using handheld computers, Kevin searched the internet for a similar system for smaller companies and found The PODFather. He explains, “After trialling the system using Orbit XDA PDAs, I quickly began to realise the benefits. However, during our trial—we had to key each job via a desktop PC in the office. As we are a growing business with new contracts to be fulfilled, sometimes everyone is out on the road, which makes keying jobs on a PC difficult.”
- technology management for decision-makers
rush, the driver could create the job on the PDA then and there,” he continued.
Benefits
According to Tony, “The PODFather is more than proof of delivery, in that the backoffice system has a number of powerful modules, which not only let you import and create delivery jobs, but allocate them to run or driver in a number of ways, including visualising the jobs on a Google map. There are vehicle, product and tariff databases allowing vehicle or job rates to be stored per-customer, meaning quotes can quickly be prepared. And the invoicing module allows batches of PDF invoices to be created from PODs on a per-customer basis, which can be emailed out— thus saving paper, administration time and postage expenses.” Kevin continues, “The feedback I have received from clients is excellent. They have logins to the PODFather’s customer portal so, should they accidently lose one of the PODs that is automatically emailed to them, they can log into the portal and retrieve a copy themselves, thus saving us admin time and expense.”
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information technology
“Application of all types of IT solutions will continue” Teradata Corporation is solely focused on raising intelligence and achieving enterprise agility through its database software, enterprise data warehousing, data warehouse appliances, consulting and enterprise analytics. The company has its presence in over 60 countries. In India, the manufacturing sector is one of its top focus areas. In an exclusive interview, Jim Byrne, Director of Business Development, Teradata Corporation, SAP Alliance, Asia Pacific & Japan, delivers his views on IT adoption in Indian manufacturing companies, to Reshmi Menon. Excerpts... understanding of the business and market needs, along with the most profitable and efficient mechanism to manage the demand supply chain has helped manufacturing companies enhance their production efficiency.
Jim Byrne Director of Business Development Teradata Corporation SAP Alliance, Asia Pacific & Japan
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What is your view on the role of information technology (IT) in the manufacturing sector in India? According to a United Nations Industrial Development Organization’s (UNIDO’s) ‘International Yearbook of Industrial Statistics 2010’, India ranked among the top 10 producers of manufacturing output in 2009. Information Technology has played a very critical role in achieving the same. India is one of the fastest growing economies, and as an increasing number of international companies are setting up manufacturing units here, they bring with them the technological advancements from the west. A lot of Indian companies are now looking at technology to better understand their businesses and their customers. Business Intelligence (BI) gives organizations the ability to make precise decisions by referencing historical and real time business data. A better
january 2011 | industry 2.0
- technology management for decision-makers
Has there been a dramatic change in the attitude of manufacturers towards accepting IT solutions? As a matter of fact, most manufacturing companies in India already have an Enterprise Resource Planning (EPR) system in place; such a system helps companies achieve a single view of their business—incorporating all three of the most critical dimensions of a business—people, products and the processes. Due to the increasing competition in the market, companies are looking at analytic solutions to stay ahead of the competition and increase revenues. The market is showing healthy signs of recovery, so companies are considering investing in IT solutions. However, ignorance is the major hindrance. Most companies are still not aware as to how solutions like these can dramatically change the course of their business. In my opinion, businesses and IT need to work in tandem to drive profitability. Of course, Teradata will be happy to assist manufacturing companies as they consider deploying analytics solutions in the coming investment cycle. Which are the sub-sectors of the manufacturing industry that maximize the use of IT solutions? The FMCG sector is keenly looking at business solu-
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tions to make real- time alterations to the products. Business intelligence and other analytic solutions provide real-time information about the products, which can be used to make modifications at the earliest sign of defects. The automotive space too is heavily dependent on technology for cost control and for logistical management. They are now looking at Just-In-Time processes to manage inventory. They are striving to maintain balance between demand and supply, to cut down on inventory, while receiving precisely the parts from the supplier, when and where it is needed. What are the challenges faced by the manufacturing industry with regard to higher penetration of IT? As a trend, the IT budgets allocated by companies in the manufacturing industry have been low compared to companies in the banking, financial services and insurance (BFSI) segment or telecom segment. Most of the companies look at IT solutions with scepticism as they are doubtful that the ROI would justify the investment. In the past, IT was not viewed as a contributor towards the business. As I mentioned before, the smart company will encourage IT to become closer to the business, thus achieving greater gains by providing more relevant solutions to serve the business. However, the market is showing positive signs for technology vendors like Teradata. According to a report by IDC, almost 50 per cent of CIOs from manufacturing companies are looking at implementing business solutions in this fiscal year. Which are the IT solutions that are in peak demand among the manufacturers? Most of the manufacturing companies already have an ERP system in place. Now, companies are looking at Customer Relationship Management (CRM) for understanding the needs of their customers to better serve them. The industry has seen the acceptance of Supply Chain Management (SCM) solutions; companies are looking at these solutions to best handle their inventory in a timely and cost efficient manner. They’re considering Business Intelligence solutions for better insights, for reporting and regulatory compliances. Finally, they have begun to evaluate Unified Communications (UC) and Web 2.0 technologies. How would you describe the Asia Pacific market in terms of IT adoption? The developed markets of Japan, Australia and Korea are very advanced in terms of IT adoption. In India, certain sectors—like BFSI—are quite mature
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and others are at different stages of adoption. Indian companies—and many parts of Asia Pacific—have the ability to pursue the latest technologies. Additionally, India is a huge IT exporter, it has significant talent already available to capitalise on. What are the new trends (in IT solutions) that the manufacturing industry will witness in near future? Companies are continually looking at analytics to gain competitive advantage, going forward companies are going to invest more in analytic solutions. Although the Indian economy is advancing at a tremendous pace, companies will be utilising analytics to better understand the market and customise their products for this segment. Companies will also be looking at multi-channel campaign management solutions to monitor the customer via social media. Unified Communication and Virtualization will be considered as potential cost saving options. How is the response and level of (IT) penetration among the SMBs in the manufacturing industry? Companies in the small and medium business segment are looking at business solutions to get a better understanding of the data which they have generated. Traditionally, only the large enterprises employed IT solutions for better insights into the business. This trend is changing in light of the new technologies available. Many companies in this segment are looking to cloud-based technologies for the promised cost advantages, speed of implementation and ease of use. How do you foresee the future of IT in the Indian manufacturing industry? The continual investment in advanced IT technologies will be a prerequisite to survival. After standard ERP solutions are deployed across an organization providing process standardization, in the future, competitive advantage will be realized through the creative application of analytics solutions to keep one step ahead of the competition. The deployment of analytics solutions can be done either on premise or over the cloud computing. Automation of decision making will give way to management by exception, which will empower front line personnel to make decisions on the spot, solving logistics problems and satisfying customers’ needs. IT solutions will play a critical role in enabling companies to ‘up the ante’ on their competition and move ahead on the competition curve. In short, the application of all types of IT solutions across Indian Manufacturing industry will continue to accelerate and deepen—as competition intensifies.
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- technology management for decision-makers | january 2011
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From a single plant in 1980, MCL currently has five ultra-modern cement plants.
Leveraging IT For
Competitive Advantage The growth story of Madras Cements Ltd. (MCL)—a South India-based cement manufacturer—is an example of an agile company. MCL is an early mover that operates like a sophisticated IT company, and is always on the look out for intelligent technologies to beat operational complexities, arising as a consequence of business expansion. 52
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o get an edge over the competition, a business needs to stop following convention—and change the dynamics of the game, bringing about a paradigm shift in the way the other players in the industry operate. A V Dharmakrishnan, Executive Director, Finance, Madras Cements, affirms that it is because of the passion for technology, “MCL has been able to achieve the distinction of being a technology leader in the cement industry, besides becoming the fifth largest cement producer of the country.”
- technology management for decision-makers
Picture Courtesy: Ramco Systems
information technology
Tryst with IT
Before 1989, cement was a statecontrolled commodity. MCL had to deal directly with thousands of cement customers with requirements as small as 5 to 10 tonnes. The distribution system and the underlying accounting system became very complex, which called for extensive computerization. The liberalization of cement industry in the 1990s led to an open market and increased competition. As Dharmakrishnan narrates, “The cement industry became highly competitive after the cement trade was liberalized.
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We knew we could not do much about product prices in a fiercely competitive market. Thus, to be profitable, the need was to be a cost leader. This meant that we had to achieve cost effectiveness and consistent quality, apart from ensuring a prompt response to customer needs.” Accurate, transparent and timely information was the key to achieve such operational efficiencies, he adds. MCL was perhaps the first in the cement industry to invest heavily in developing an IT infrastructure. As early as in 1983, it set up a UNIXbased system running COBAL. That marked the beginning of the IT revolution within the company.
State-of-the-art manufacturing units
MCL had to adopt technology to beat operational complexities, and it did just that. The opportunity to earn a profit in this changed scenario existed only by offering quality products to the customer at economical prices. Computerization, which the company introduced in the 1980s, helped them in setting up an efficient accounting system, which was the need of the hour. Further, to match global standards, MCL adopted state-ofthe-art technologies in its manufacturing units, deploying the fuzzy logic software system to process controls; programmable logic controllers, vertical mills for cement grinding; advanced X-ray technology to ensure quality control, etc. Once the process of adopting IT started in the 80s, MCL did not let the process slow down at any point and kept strengthening its technological prowess. Today, almost all of it’s critical business processes run on IT solutions. MCL was expanding very fast. From a capacity of a mere 4 lakh tonnes per annum (TPA) in 1980, the company now has reached 100 lakh TPA. Also, from a single plant in 1980, it currently has become a
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multi-unit company with five ultra modern cement plants spread across three states of the country. MCL’s previous information management systems were not able to catch up with the multifunctional and/or multi-factory unit set-up. Co-ordination between departments and people became problematic and complex. This was the pre-ERP (enterprise resource planning) era when no real time information was available. Besides, information was neither consistent nor transparent. There was no standardisation of processes or transparency of data. People used their own formula and formats to analyze and interpret data and generate reports. The company wanted to bring everyone onto the same information platform by achieving transparency of data across units and departments. It wanted to standardize the way people looked at data, how they understood or interpreted it, so that they spoke the same language as far as data was concerned. “Our previous systems were not able to manage the growing complexities,” recollects Dharmakrishnan.
The ERP leap
Though MCL entered the ERP era in 1994 with the Ramco Marshal ERP, they upgraded to Ramco e-Applications Version 3.2 in 1999. In September 2007, they kick started implementation of the much advanced web-based Ramco ERP enterprise series, version 4.2. Currently, 300 employees use the Ramco solution at MCL’s geographically spread plant and marketing locations. The solution comprises modules for finance, sales, distribution, logistics, purchase and inventory, HR and payroll, management accounting, CPP (Continuous Process Production), ore management systems and plant maintenance. Customization was done wherever required. “The
MCL has been able to achieve the distinction of being a technology leader in the cement industry, besides becoming the fifth largest cement producer of the country.” A V DhArmAkrishnAn ExEcutivE DirEctor FinancE MaDras cEMEnts
Ramco ERP has the capability to integrate with the ‘web’, giving our cement dealers and customers access to some of the business processes. We plan to introduce this feature in the near future,” shares Dharmakrishnan. “The solution is a continuous process production suite, including productivity tools and reporting formats. It is capable of handling large transaction volumes (over 6 lakh invoices) generated by the MCL plants,” informs R Shankar, Executive Vice President, India, Middle East & Africa, Ramco Systems. Madras Cements, along with Ramco Systems formed a task force for all major business processes, like sales and distribution, finance and accounts, etc., to debate and discuss the problems faced by end users, unit heads and the management at MCL.
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- technology management for decision-makers | january 2011
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information technology
Picture Courtesy: Ramco Systems
It took only six months to complete the implementation. MCL did not go about it factory-wise; rather, they went module-wise. The commercial modules like marketing, sales, distribution, accounts etc., were deployed first, considering how directly these modules impact the benefits to users. Thereafter, for other factory-related modules like production, maintenance and mining, MCL went ahead one unit at a time, implementing it completely for that unit. Since the company’s business had many process-level complexities, it was a tremendous challenge for Ramco. Typically, the vendors offer a product and businesses
MCL was perhaps the first in the cement industry to invest heavily in developing an IT infrastructure.
tweak their processes to adapt to it. But in MCL’s case, Ramco Systems has customized the solution in a manner that fits their needs like a glove.
The ROI and impact
Since the implementation of the upgraded version, MCL has not only achieved recurring cost savings—but also other tangible benefits like operational efficiency has also started accruing. Today, the company is able to plug the holes based on the real-time information feeds that are available online. This not only helps them earn monetary benefits, but also aids in achieving process efficiencies. Analysis of ERP data led to closing down of more than 90 per cent
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of stock points, which enabled the company to save on stock holding, transportation and re-handling. This alone resulted in a recurring annual savings of about Rs 16 crores. The major benefit is operational efficiency. The company now knows where the demand is and where the supply exists.
Some of the benefits accrued from ERP Production
• Overall operations consistency is achieved and productivity is enhanced from 5 to 10 tonnes per hour. This implies recurring annual savings of about Rs 8.5 crores. • Power generator utilization factor has been increased by 10 per cent and power (Electricity) consumption is reduced by 10 units per ton by continuously monitoring factories operations using real-time data in ERP. This indicates recurring annual savings of about Rs 16 crores. • Expected cement bag weight is achieved for 98.5 per cent of production resulting in recurring annual savings of about Rs 8.5 crores. • On an average, variable costs decreased by Rs 275 per ton of materials. • Better prices were realized from the vendors by comparing the unit prices, availing goods discounts and better credit periods as an integrated single company-wide database is available. • Inventory level is reduced by monitoring materials received but not by materials consumed within the committed time. This resulted in recurring annual savings of approximately Rs 1.8 crores.
Management accounting • Variable costs are analyzed on daily basis for each process centre. • Fuel efficiency is analyzed with caloric value and the market price of the items, to derive the economical fuel mix.
- technology management for decision-makers
Finance • Trial balances of all the factories are analyzed with greater detail. • All administrative over heads have been reduced without affecting the effective operations. Reduction is achieved mainly by business process redesign. For example, TT charges (bank charges for non-local transactions): All major payments are now made locally by negotiating with the excise/ sales tax/electricity authorities rather than transferring the funds to factories. Similar reduction of administrative expenses resulted in a recurring annual savings of about Rs 1.8 crores. • 100 per cent adoption was achieved for the costing system, which updates the P&L for the entire firm in real time upon entry of a transaction.
sales • With the close follow up of all pending orders, orders could be executed within 24 hours. This led to increased customer satisfaction. • Transporters freight is analyzed on daily basis. Based on this, logistics are derived. Stock transfers to depots are handled without any re-handling process. • Analysis of ERP data led to closing down of more than 90 per cent of stock points, which enabled the company to save on stock holding, transportation and re-handling. This resulted in a recurring annual savings of about Rs 16 crores.
Mines • Performance is analyzed on a mine, equipment and shift-wise basis. Based on this analysis, about 60 per cent of heavy equipment were withdrawn from the operations due to poor performance or underutilization. • Number of shifts in mines was also brought down from 3 shifts to 2 shifts. • Re-handling of materials was
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brought down to almost negligible from an earlier re-handling rate of Rs 18 per metric ton. These, put together, resulted in a recurring annual savings of about Rs 3 crores.
Dealing with employee resistance
When complexities arose during the process of transition from the legacy system to the ERP style of work, people hesitated initially as they were comfortable doing things in a particular way on the legacy systems. But the top management of MCL was determined and provided all the support to ensure that the new ERP system was implemented thoroughly and people used it across the board. To accomplish that, MCL had a good team of in-house IT professionals—who interacted with the users extensively during pre-implementation, implementation and post implementation stages. This team put the user requirements across clearly before the ERP vendor, thereby bridging the gap between the expectations of users and the vendor. This was the key factor that facilitated smooth implementation. A report was designed to tell the top management on how people used the new ERP system and their frequency of access to the system. Whenever the management found somebody not using the system as expected, gentle reminders were sent from the top management. Over a period, this resulted in more and more people coming onto the ERP platform.
A few innovative technology practices
Apart from the extensive ERP system, MCL is also making use of many other interesting IT tools and technologies, to not only complement and supplement the ERP system, but also to monitor, streamline and secure its processes and organizational data.
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Making ERP accessible, while on the move: The company has developed an in-house enterprise mobile computing system that facilitates the use of the business processes through PDAs (Personal Digital Assistants), by integrating those devices with the organization’s ERP system. The application is proving to be quite useful for the mobile workforce, like sales professionals. Currently, the complete sales order booking cycle is facilitated through this, and 80 per cent of orders are being booked through these PDAs (HTC brand).
Information dashboards for the top management: MCL also has an MIS (Management Information System), which has been customised for desktops, laptops and mobiles. An MIS web portal has been created where the reports get posted and the top management can access these reports online, even on their mobiles, 24x7.
A compliance software on top of the ERP: This keeps generating reminders/alerts with respect to statutory and operational compliances. The application keeps issuing warning to employees responsible for the mandatory processes or statutory compliances. In case of a failure to comply with deadlines, those employees’ superiors are also alerted.
Tools to communicate better: At MCL, about 30 locations are connected through video conferencing using an ISDN (Integrated Services Digital Network) and IP (Internet Protocol) based Aethra video conferencing system. Besides, the firm also uses the Polycom audio-conferencing system. Internal collaboration systems are facilitated through enhanced e-mails, online meetings, IM (Instant Messaging) tools etc. The company also has plans for a unified communication system where all communication technologies are integrated onto one platform.
The solution is a continuous process production suite, including productivity tools and reporting formats. It is capable of handling large transaction volumes generated by the MCL plants.” r shAnkAr ExEcutivE vicE PrEsiDEnt inDia, MiDDlE East & aFrica raMco systEMs
Leveraging the power of SMS: The cement manufacturer makes use of an interactive SMS platform to facilitate customer queries related to the status of their orders/ cheques/last three payments. The company uses push-SMS system to send out data updates, automatically, on the status of different processes, both to the customers and the top management. For example, if a cement truck leaves the factory, an SMS goes to the concerned salesman and customer indicating the time of dispatch, the truck number, quantity, etc. The system has been designed in-house. An in-house 24X7 data centre: This houses about 30 servers for MCL and some of its group companies. MCL uses predominately HP blade servers and storage solutions.
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- technology management for decision-makers | january 2011
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Picture Courtesy: www.photos.com
innovation & success
Enabling Business Growth With the growing interest on solar energy deployment in the country, when a player in this field was experiencing fast growth in its business, the company felt the need for a highly efficient IT system to bring complete visibility of its operations, to facilitate instant decision making and to exercise overall control. What were the criteria for selecting a suitable solution and an efficient implementation partner? What did the company experience throughout the implementation process? What are the catalyzing factors behind successful implementation of such a solution? What are the post-implementation benefits? Read on...
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nu Solar Power Private Limited is a player in the field of Solar Thermal Systems in India. It sells its solar products under the brand name ANU. The company designs, develops, manufactures and markets Solar Thermal Systems. It has its manufacturing facility, head office, branch offices in Bangalore and other regional offices at different locations across the country. When the company sought to have clear visibility of its operations and gain complete control
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of its business, it found, the IT infrastructure in the company did not support its growth strategy. Manual processes were resulting in inefficiencies and data inaccuracies across the organization. The company lacked a structured information system to manage its growing business effectively. “We had non-integrated operational and accounting systems, resulting in duplication of data entry, while there were inaccuracies and delays in providing management information,” says Prem Kumar, General Manager,
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Finance & Administration, Anu Solar Power. This lack of integration, and need for real-time information forced the company to look at their options. The company realized that it needed—a single, integrated technology platform to support its operations and help synchronize all administrative and business processes for strategy development and timely-decision making. The company’s search for an appropriate solution led to a meeting with SAP channel partner, NewAge Business Consultants.
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Selection criteria
“We were looking for a robust, globally accepted solution, which would be affordable and at the same time, be simple to implement and use. SAP is a wellknown brand and SAP Business One is a cost-effective solution. Further, it met the key requirements of the company,” says Kumar. Being convinced by the range of user-friendly functionality that the SAP Business One application offers, and feeling that SAP was a brand it could trust, Anu Solar decided to go ahead with the implementation.
Implementation
New-Age Business Consultants was chosen as the implementation partner for the project. “We decided on New-Age for the implementation because they had the requisite experience and had a good track record with other customers. Further, they understood our requirements and were able to carry out a tailored evaluation for the company,” says Kumar. The project which was started in April 2007 took four months to be completed. “It had its share of complexities. However, all said and done, it has been a satisfying implementation,” informs Giridhar Murthy, Partner, New-Age. The main factors, which have contributed to a successful implementation are the support of the company’s top management and the commitment of the partner company to the project. “The key challenge was to change the mindset of the users to migrate from the existing system to the new system,” recollects Kumar. All the modules of SAP Business One have been implemented at the company’s Head Office and plant.
Benefits
The SAP Business One application integrates and manages the core business functions of the com-
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pany—from financials and sales to customer relationship management (CRM) and operations. It has not only addressed Anu Solar’s business needs, but has also been the most user-friendly solution, offering the company a very comprehensive package with functionality. By seamlessly integrating the company’s business through a single application, SAP Business One has eliminated redundant data entries and errors, as well as duplication of work at all levels across the organization; while saving valuable administrative time. “The elimination of duplication of entry has led to enhanced efficiency across the organization,” informs Kumar. Deploying the solution has had positive effects on the workflow
to-day basis, leading to improved planning and coordination across the organization. “SAP Business One facilitates real-time monitoring of the business through up-to date financial information,”feels Kumar through his experience. Monitoring has become easier with the ready availability of reports. Access to the right information in realtime helps the company identify the concerns early and pursue opportunities proactively, which enables better predictability of business performance. Management control on various business functions and operations has improved enabling decisions to be based on consistent and accurate data and information; leading to a faster decision-making process.
implementation partner had the requisite experience and The
a good track record. The consultant understood the user’s requirements and delivered a tailored solution. and the decision-making process. The integration of business functions also means that the staff now enjoys increased visibility of information across the organization. With the availability of instant, complete and accurate information, employees can navigate through a complete set of business data to get the information they need instantly; resulting in improved operational efficiency. It has also become easier for the management to generate tailor-made reports from the SAP system. The system acts as a check to ensure the accuracy of the reports. With all the information consolidated in one system, it is easier to track and verify the data, as and when required. The management has a better understanding of the business on a day-
The implemented solution allows the company to have a clear, upto-date picture of its business at all times. Better planning has led to improved delivery of products and the company can serve its customers better. Customer satisfaction has improved as the SAP solution enables Anu Solar to quickly react to their needs appropriately. The company’s sales teams can get information online and give the correct feedback for customer queries, as and when required. They can react faster to market changes and plan more effectively for sales activities, leading to improved sales effectiveness and better customer relationships. With total visibility, the entire sales operation can be delivered quickly and effectively.
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management & strategy
Trading Emissions With
Emissions trading schemes have great potential to lower pollution while minimizing costs for industries. The introduction of emissions trading would position India as a clear leader in environmental regulation amongst emerging economies.
Emissions trading schemes have great potential to lower pollution while minimizing costs for industries.
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mission trading â&#x20AC;&#x201C; Cap and Trade is a marketbased approach to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants. A central authority or a regulator sets a limit or cap on the amount of a pollutant that can be emittedâ&#x20AC;&#x201D; but does not decide what any
january 2011 | industry 2.0
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by kalpana palkhiwala
particular source will emit. This cap is sold to firms in the form of emission permits, which represent the right to emit or discharge a specific volume of the specified pollutant. Firms are required to hold a number of permits or credits equivalents to their emissions. The total number of permits can not exceed the cap, limiting total emissions to that level. Firms that
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need to increase their emission permits must buy permits from those who require fewer permits. The transfer of permits is referred to as a trade. This way, the buyer is paying a charge for polluting, while the seller is being rewarded for having reduced emissions. There are two main active trading programmes. For greenhouse gases, the European Union
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Emission Trading Scheme is the largest programme and a National Market to reduce acid rain in the United States. Emissions trading schemes have great potential to lower pollution while minimizing costs for industries. The benefits of such schemes come from two sources. On the industry side, units are able to choose for themselves the cheapest way to reduce pollution. In comparison, traditional command- and-control regulations do not allow for differences across industries. Mandating the same standard everywhere will generally miss the best opportunities for abatement. On the regulatory side, an emissions trading scheme, once established, will provide a self- regulating system that makes pollution control more efficient. In the longer-run, the reduced costs of compliance can also make it easier to introduce new regulations that increase environmental quality. Past experience with emissions trading, has shown that cap-and-trade is a robust way to achieve targeted reductions in emissions at a low cost. Four areas are especially important for successful implementation of an emissions trading scheme. Setting the cap—The target for aggregate emissions from the sector where trading is introduced must be set to produce reasonable prices and emissions reductions. Allocating permits—The permits to emit must be distributed in an equitable way to build support for the scheme. In many successful cases this allocation has been made for free relative to baseline emissions, greatly reducing the cost of compliance for industries. Monitoring—The quantity of emissions from each industrial plant must be reliably and continuously monitored with high integrity recognized by all sides. Compliance—The regulatory framework must make industries
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confident that buying permits is the only reliable way to meet environmental obligations.
Greater benefits from emissions trading
The introduction of emissions trading would position India as a clear leader in environmental regulation amongst emerging economies. The benefits of a trading scheme will extend beyond the immediate goal of achieving compliance at a lower cost to the society. Having a trading scheme in place will make it easier to adjust regulation as environmental goals change. Tighter environmental standards can be achieved with a drop in the level of the cap, which would raise the price of emissions permits and give incentives to pollute less, rather than abruptly throwing certain areas or sources out of compliance. India may also benefit by trying the system for local emissions trading to global emissions trading schemes for carbon dioxide. A successful cap-and-trade system will establish the infrastructure needed for putting a price on car-
bon dioxide as well as local pollutants, positioning the country to easily receive payments for the contribution of its innovative regulations to reducing greenhousegas emissions. The European Union Emissions Trading Scheme, Kyoto protocol and future carbon mitigation policies outlined under the Copenhagen Accord will generate demand for such reductions. An emissions trading system to meet this demand would generate a net flow of foreign investment— and reward the Indian economy for growing along a green path. Recent experience with market-based regulatory instruments has been positive in India. A Perform, Achieve and Trade (PAT) Mechanism for energy efficiency, which will cover facilities that amount for more than 50 per cent of the fossil fuel used in the country, and help reduce carbon dioxide emissions by 25 million tonnes per year by 2014-15, is being implemented now. Kalpana Palkhiwala is the Deputy Director of Press Information Bureau, Governent of India.
Launch Of Methyl Bromide Scrubber System
NewJersey-based Value Recovery, an environmental research company focused on removing and destroying hazardous chemicals, has developed and patented a technology for the environmentally friendly chemical destruction of methyl bromide after fumigations. The emissions control technology works by forcing the air stream containing methyl bromide into an aqueous thiosulphate solution prior to releasing the air into the atmosphere. This ‘chemical scrubbing’ method not only protects the ozone layer in the upper atmosphere but also protects workers and bystanders. The technology is comprehensive, chemically destroying over 90 per cent of the methyl bromide released from a fumigation facility while producing no hazardous byproducts. The company is planning to raise the destruction level to 95 per cent within three years.
Bid To Reduce Pollutions From Large Ships
The US Government has proposed controls on large ships that operate in the waters off the coastlines of Puerto Rico and the US Virgin Islands to reduce air pollution from the ships. The proposal to the International Maritime Organization calls for the designation of these waters as an ‘emission control area.’ The designation would require any large ship operating in these areas to use much cleaner fuel or install better pollution control technology. Tankers, container vessels and cruise ships are major sources of air pollution in Puerto Rico and the US Virgin Islands. Exposure to air pollutants from large ships – nitrogen oxides, sulfur oxides and particulate matter—can cause respiratory illnesses, such as lung disease, asthma and heart disease.
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- technology management for decision-makers | january 2011
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product update Milling Solution
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Safety Laser Scanner
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he OS32C Safety Laser Scanner is able to solve many safety applications. Its low profile allows installation in small spaces making it ideal for collision avoidance of AGVS (Automated Guided vehicles). For complex AGV applications, up to 70 combinations each with one safety zone and two warning zones can be set. What’s more, replacing a damaged sensor has never been faster and easier! No re-programming is required as the configuration which is stored in the I/O block can be detached from the sensor block. The OS32C Safety Laser Scanner is also compliant to global safety standards such as Safety Category 3 (ISO13849-1), SIL2 and CE.
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elta Electronics, the energy saving solutions provider supplies a full range of colour electronic paper (e-paper) applications at CES 2011 in Las Vegas. The new colour e-paper applications are jointly developed by Delta Electronics and Bridgestone Corporation and are based on the latter’s Quick Response Liquid Powder Display (QR-LPD) technologies. The colour QR-LPD with an 8.2-inch Bridgestone AeroBee panel weighs just 400 grams, the e-reader features rich colour, smooth handwriting recognition, and supports wireless connectivity for improved reading comfort, providing users with the best possible digital reading experience. This is the world’s first mass-produced QR-LPD e-paper application. In addition to the 8.2-inch e-reader, Delta is also releasing a 4.1-inch e-tag (electronic label), a 13.1-inch e-reader
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and a 21-inch digital signage display among other multi-sized, colour e-paper. Delta’s full range of colour e-paper applications are designed with the concept of “Go Beyond Reading,” which combines wireless connectivity and cloud information management systems to provide on-demand, realtime information delivery to users.
new KNF micro-diaphragm gas-sampling pump, type NMP015.1.2, uniquely integrates head connections inside the housing for improved pneumatic performance in a compact and leak-tight package. This optimized design produces less pulsation and additionally allows for the housing to be closed and sealed for significant reduction in audible noise, informs the manufacturer. According to KNF, the pump ideally suits portable, battery-operated equipment used in a wide range of OEM applications, including gas sampling, explosives detection devices etc. As per the company, among features, the pump’s elastomeric diaphragm promotes high efficiency and delivers oil-free operation without any risk of contaminating the sampled gas.
Delta Electronics India Tel: +91-124-4874900 Fax: +91-124-4874945 Website: www.deltaelectronicsindia.com
KNF Neuberger Tel: 609-890-8600 Fax: 609-890-8323 Website: www.knf.com
Omron Automation Tel: +91-80- 4072 6400 Fax: +91-80-4146 6403 E-mail: in_enquiry@ap.omron.com
Colour e-Paper
Micro-Diaphragm Sampling Pump
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Coated Steel Tube
H
imin Solar Energy Group has invented a solar selective film coating, which has a stable performance under high temperature of 300ºC to 350ºC in the air, informs the company. Their coated steel tubes use
he most recent scion of CERATIZIT’s successful product range MaxiMill increases productivity in motor engineering—wherever up to now brazed tools and solid carbide tools have been applied, informs the manufacturer. The name of the product is MaxiMill HPC 04. First trials at CERATIZIT customers have shown that MaxiMill HPC 04 outperforms the development goals by far. “In particular, when it comes to large overhangs, the positive rake angle proves to be useful, although PCD and CBN are ultra-hard and extremely wear resistant cutting materials. The HPC 04 milling tool shows excellent, safe and reliable milling results and a very cost-efficient tool handling, for both roughing and finishing operations,” informs Lionel Legrand, Automotive Key Account Manager at CERATIZIT. The automotive industries in particular place high demands on their tools. In order to satisfy the continuously increasing prerequisites CERATIZIT has developed its MaxiMill HPC 04 tooling solution, which guarantees process security with particularly long tool life. With this tooling solution, which is targeted at the automotive industry, CERATIZIT extends the MaxiMill programme. CERATIZIT India Tel: +91-33-2494 5435 Fax: +91-33- 2494 1472 E-mail: info.india@ ceratizit.com
such films with high temperature durability. The company offers several such tubes for concentrating solar power. China·Himin Solar Co. Tel: +86-534 5089339 Fax: +86-534 2312784 Website: www.himin.com
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product update Welding Gas Mixers
Compact Dust Collectors
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he Columbus Instruments Pegas 4000 Gas Mixer provides a means to control up to four individual component gases using very precise thermal mass flow controllers. Concentrations can be adjusted on the fly or dynamic mixing schedules that can be preprogrammed using the included software. The system is equipped with an internal microprocessor to perform all of the needed calculations and to provide signals to the flow controllers. The user only needs to enter the total flow and the concentration of each component gas. A front panel rotometer shows the flow of mixed gas. Specifications: Dimensions: 13” x 11.5” x 7.5” (33 x 29 x 19 cm) Weight: 14 pounds (6.4 kg) Flow controller ranges: 0-5 ml (lowest range); 0-100 l/min. (highest range) Flow controller accuracy and linearity: +/-1% full scale Flow controller repeatability: 0.2% full scale
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Input pressure: 30 PSI (please specify input pressure when ordering) Outlet pressure: 0-20 PSI (please specify outlet pressure when ordering) Columbus Instruments Tel: +614-276-0861 E-mail: sales@colinst.com Website: www.colinst.com
Metal Grinding Hand Tools
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etabo Corporation, an international manufacturer of professional grade portable electric power tools and abrasives for industrial, construction and welding applications, now offers the BFE 9-90 band file. According to the company, this new electronic band file is ideal for metal removal and deburring in hard to reach places. The BFE9-90 offers 900 watts of power and features Metabo’s Marathon motor with slim motor housing for comfort handling. It has a variable belt speed of 750-1770 ft/minute. The new file, with a die cast aluminium gear housing, has a toolless belt exchange for safe and efficient belt changes, a thumbwheel for easy speed selection and a grinding arm that swivels 270 degrees for clean finishing even in the most angular spaces. The tool also features a winding protection grid, auto-stop carbon brushes and Vario-Constamatic electronic speed control. It uses standard belts in widths of 1/4”, 1/2” and 3/4” by 18” long. The sanding belt arm length is 3-1/2”.
Metabo Corporation Tel: +800-638-2264 Fax: +800-638-2261 Website: www.metabousa.com
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Cutting Saw Blades
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enox band saw technology has been designed specifically for the rigorous demands of the Asian market, informs the manufacturer. The product, Newell Rubbermaid’s Lenox Q88 Bi-Metal Band Saw Blade has received the Ringier Technology Innovation Award presented in Shanghai in November 2010, also it is the recepient of the sixth-annual Vogel Innovation Award presented by the Vogel Media Group. “Asia has some of the most challenging conditions for metal working, and Lenox recognized the importance of developing a blade that works well in a variety of applications despite less than optimal sawing conditions and machine parameters,” says Rich Wuerthele, President of Newell Rubbermaid’s Industrial Products & Services global business unit.
nlike conventional cyclones, Aerodyne’s GPC Dust Collector uses a ground-plate design that increases efficiency in a more compact unit, as a result, it costs less than comparable units and is just as efficient as dust collectors of 1.5 to 2 times its size, informs the manufacturer. The Dust Collector is designed to reduce particulate emissions at processing plants, reclaim useful material from air/gas waste. The company communicates that a conventional cyclone dust collector consists of a tangential inlet and a long, tapered body. This design relies on gravitational force to direct the dirty gas stream downward. As the gas stream becomes constrained in the narrow end of the cyclone body, a phenomenon known as ‘vortex reversal’ occurs, in which a secondary inner vortex is generated and moves upward through the centre of the dust collector and is exhausted from the top. This is a major cause of inefficiencies. In Aerodyne’s device, a spiral inlet directs the dirty gas stream toward a ground-plate above the hopper. The plate forces vortex reversal to occur in a much shorter space. As the gas stream strikes the ground plate, fine particulate that has not completely made it to the dust collector walls is deflected into the hopper. The ground-plate shields collected particulate from the forces of the vortex reversal, acting as a barrier between the separation chamber and the collection hopper. Aerodyne Tel: +800-358-7546 E-mail: info@aerodyneus.com Website: www.dustcollectorhq.com
Newell Rubbermaid Tel: +91- 44-47100971/ 2646-239051 Website: www.newellrubbermaid.com
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product update Coolant Concentration, pH Monitor
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banaki Corporation, known for coolant skimmers and coolant maintenance products, has launched its new line of handheld refractometers and pH meters. The new refractometers and portable pH meters improve machine shop productivity and reduce maintenance costs by allowing operators to measure coolant quality quickly and easily, informs the manufacturer. These refractometers are available in three models, including two with a built-in light. According to Abanaki, along with coolant skimmers, maintaining the proper coolant concentration and pH level is an ongoing process in machine shops, and is critical to reducing tooling costs and manufacturing high-quality parts with ideal surface finishes. Correct concentration is also key to coolant
efficiency; regular monitoring can ensure that expensive concentrate is not wasted and weak coolant is boosted or replaced for maximum performance. Hi-Tech Engineers Tel: + 91-22-25186110 E-mail: waghindia@gmail.com Website: www.abanaki.com
Motion Control Device
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he Simatic CPU 317TF-2DP controller from Siemens implements motion control, safety and standard tasks in one device. The technology controller utilizes PLCopen-compatible motion control blocks and is particularly suitable for coupled motion sequences of multiple axes. Possible applications range from controlled single-axis positioning to complex, synchronised sequences of motion, for example geared synchronous motion, curve synchronization, or print mark correction. The synchronous axes can be coupled to a virtual master or a real master. For safety-oriented applications, the controller fulfills the high safety requirements according to the relevant standards EN 954-1 up to Cat. 4, IEC 62061 up to SIL 3, and EN ISO 13849-1 up to PL e. For all functions the Step 7 option package S7-Technology is available for engineering purposes for programming and commissioning. It permits simultaneous processing of up to 64 technology objects. For fail-safe applications, the Step 7 option package Distributed Safety offers pre-configured, TÜV-certified library blocks. Centralised and distributed fail-safe I/O and fail-safe drives according to PROFIsafe, the fail-safe communication standard, can be connected to the Simatic CPU 317TF-2DP. The drive safety functions SBC, SLS, SSM, SOS, SS1, SS2, and STO according to PROFIsafe can be used in addition to the familiar safety functions. According to the manufacturer, compared to conventional technology, the use of PROFIsafe technology results in reduced wiring overhead. Siemens AG Tel: +49-911-895-7945 E-mail: gerhard.stauss@siemens.com Website: www.siemens.com
Control Valves
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etso’s iCVs (Intelligent Control Valves) are fully suited to both general and demanding control applications. They help process plants meet environmental regulations by control valve constructions that also provide good performance, reliability and control accuracy, as informs the company. The control performance of the iCVs results from the frictionless, backlash-free valve and actuator construction and valve-position control of the Neles ND9000 intelligent valve controller. According to the manufacturer, their nonleakage, live-loaded valve packing effectively eliminates the need for gland-packing maintenance, while the ND9000 enables true predictive maintenance capabilities with its unique online diagnostics. The condition of Metso’s intelligent valves is continuously known. The Metso FieldCare advanced condition-monitoring system enables both the valve’s performance history and its current status to be seen in visual trend format. This information makes it easy to predict future maintenance needs and also helps increase the production efficiency of process plants. Metso Automation India Tel: +91-22-39130100 E-mail: admin.mai@metso.com Website: www.metso.com
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