VIEWPOINT
FLASHBACK INTO THE FUTURE MANY breakthroughs achieved and many more issues to be resolved…precisely describe the year that went by for the Indian logistics & supply chain industry. The year 2012 witnessed various revolutionary projects taking shape in the segment—be it road, rail, air or sea transportation. Going by the evolutionary trends, we can surely say that the fate of this sunshine industry is changing & how! Having been neglected for years by the CEOs, today, supply chain has risen to become one of top three priority boardroom discussion topics. Don’t get us wrong here… it’s not just the cost optimisation that one can achieve through efficient supply chain, it’s one of the critical enablers in managing top line & bottom line growth of companies. According to a World Economic Forum report, this strong, mature and innovative industry holds together the fabric of modern life in the developed world. Well, this transformation or, if we may say, this daunting task, was never so easy. Though in a phased manner, various factors have contributed to this evolutionary phase… first & foremost, the entry of major foreign players in India has been perhaps the major factor in streamlining the supply chain networks of India. Many world-class companies such as McDonald’s, Dow Chemical Company, Starbucks and Lanxess have not only brought in fortunes for the Indian industry but have also changed the entire supply chain spectrum of India with their best practices. Talking of leading companies, we cannot undermine the vast presence of global logistics firms like DHL, Damco and FedEx in shaping up the supply chain of tomorrow. Connecting the dots were the major infrastructure projects that took shape in harmonising the supply chain. Though in various stages, the progress made reflects some positive signs for the near future. Modern trade has also been able to create much buzz not only for the retail sector but also for the harnessed growth of the supply chain in India. Agreed that the challenges the industry has been experiencing over the last 10–15 years are likely to continue, tremendous opportunities are opening up for companies in building supply chain as a differentiator. Thanks to the innovative spirit of companies, the uniqueness of managing the last mile delivery, the growing customer awareness, expanding geographical boundaries, reduced time to market, increased government attention towards faster implementation of infrastructure projects, emergence of eCommerce as well as going eco-conscious—all point towards a new wave of growth of the SCM spectrum in India. While the road to prosperity is still tangled with loopholes, we, as an industry, have to be united in breaking myths associated with the Indian supply chain industry. The industry has to address certain issues such as skill gaps, living up to the global standards, utilising multimodal transportation and collaborating with partners to actually cherish the dream of developing a future-ready supply chain. With this issue, we are sure to set some futuristic trends for the industry to imbibe & adopt. Brainstorm on the loopholes and ideate a future perfect supply chain model to contribute significantly towards the nation’s economy… as they say, the logistics and supply chain sector underpins the entire global economy. Here’s to the spirits and the capabilities of companies who are certain to transform the logistics landscape of India!
Archana Tiwari-Nayudu archana.nayudu@network18publishing.com
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CONTENTS 22
Amit Jatia, Vice-Chairman, Hardcastle Restaurants (McDonald’s West and South)
Together We Stand, Together We Grow
Modern Warehousing Turning Over A New Leaf In Warehouse Management
Infrastructure Bottlenecks Impeding The Growth Of Ambitious India
India: A Logistics Base Playing Host To World Majors
Modern Trade Dynamics Organising The Unorganised Future
Eco-efficiency
Engineering Expo Ludhiana 2012 Making Manufacturing-friendly North Accessible
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Engineering Expo Pune 2012 Generating High Volume Of Opportunities
Panel Discussion: Pune Redefining Industrial Growth
Engineering Expo Chennai 2012 Showcasing Southern Manufacturing Strengths
Panel Discussion: Chennai Can Chennai Surpass The China Factor?
Retail Supply Chain Summit Connecting The Retail Chain
SCM TRENDS Packaging Logistics In Cargo A Safety Mechanism For Products
Using ERP To Create A Functional Synergy
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VIEWPOINT NEWS, VIEWS & ANALYSIS Latest Happenings In The World Of Logistics
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WAREHOUSING & DC 15 Ways The Lift Truck Is Evolving
eCommerce Warehouse Revolutionising Warehousing
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NEWS ANALYSIS Major Ports Development: Multiplying Cargo Handling Capacity
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TECHNOLOGY & INNOVATIONS Cutting-edge Solutions
Forklift In Warehouse
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ALSO IN THIS ISSUE
CASE STUDY Sequel Logistics
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7 Ways To Optimise The Supply Chain
EVENT REPORTS
SPECIAL FOCUS: EMERGING TRENDS Emergence Of M&As
DECEMBER 2012
TIPS & TRICKS
IN CONVERSATION WITH ‘While The Mechanics Of Supply Chain Is Critical, Equally Important Is Food Safety’
VOL. 03, NO. 09
PRICE TRENDS EVENT CALENDAR TENDERS PRODUCT UPDATE PRODUCT & ADVERTISERS’ INDEX PRODUCT & ADVERTISERS’ INQUIRY FORM
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AUTOMATION TRENDS DataMan® 200X Offering Complete Automotive Part Tracking
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STRATEGY Skill Development For Multi-location Supply Chain Teams Equipping The Supply Chain With Skilled Manpower
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Cover Illustration: Sanjay Dalvi
Looking For A Specific Product? Searching and sourcing products were never so easy. S Just type SL (space) Product Name and send it to 51818
eg. SL Forklift and send it to 51818
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FEDEX EXPRESS RECOGNISED AS ONE OF THE WORLD’S BEST MULTINATIONAL WORKPLACES FEDEX Express, a subsidiary of FedEx Corp, has been recognised as one of the top 10 World’s Best Multinational Workplaces by Great Place to Work Institute for the second year in a row. The ranking is the world’s largest annual study of workplace excellence and identifies the top 25 best multinationals in terms of workplace culture. “I am delighted that FedEx Express has once again been named among the world’s best multinational workplaces,” said David J Bronczek, President & CEO, FedEx Express. “This is the second consecutive year we achieved this prestigious global ranking. This award serves as another testament to our unique service culture and to our people and operating teams around the world who go above and beyond for our customers every day.” Since launching the first best
workplaces lists in partnership with FORTUNE magazine in the US and Exame in Brazil in 1997, Great Place to Work now recognises leading workplaces in around 45 countries. The World’s Best Multinational Workplace list is based on a pool of data from some 1,800 companies that were listed on Great Place to Work country best companies lists. Every year, Great Place to Work analyses data from surveys taken by more than 2.5 million employees and workplace culture analytics taken from 5,671 companies that represent more than 11 million employees. “The companies listed on the second -annual World’s Best Multinational Workplaces List are creating workplaces dedicated to fostering trust, pride and camaraderie amongst their employees,” said Susan Lucas-Conwell, Global CEO, Great Place to Work.
SITE CLEARED FOR CARGO AIRPORT IN HARYANA THE Airport Authority of India (AAI) has conveyed its in-principle consent to the project site of a cargo airport in Haryana after carrying out a preliminary site visit and pre-feasibility study. A site measuring 2,700 acre has been identified for the project in Rohtak. The application was filed with the Union Ministry of Civil Aviation for site clearance. The Ministry of Defence has issued the requisite NOC to the Ministry of Civil Aviation and now the case is being processed by the Ministry of Civil Aviation, PK Chaudhery Haryana Chief Secretary recently said.
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ADANI & ESSAR-- CONTENDERS FOR CHENNAI’S MEGA CONTAINER TERMINAL THE Union Home Ministry’s approval of bids by Essar Ports and Adani Ports, to build Chennai’s mega container terminal, has cleared the path for the Shipping Ministry to begin the awarding process. With only two bidders remaining, the higher bid is expected to win the Rs 4,000 crore project. The proposed container terminal will be developed to the north of the existing Bharathi Dock at Chennai Port, with 2 new breakwaters and a quay length of 2 km. Once commissioned, the mega container terminal is said to have a capacity of 4 million TEUs and be able to handle ultra-large vessels, becoming the largest container facility on the country’s east coast. Chennai Port’s second attempt at awarding the project has come after the Home Ministry rejected Adani Ports bid in 2011, citing the meagre 1.5% revenue share offered to the Port. While Adani Ports, the sole bidder in 2011, had secured the clearance then, Essar Ports had to seek clearances from the Home, Defence and External Affairs Ministries after the merger with its holding company.
APOLLO LOGISOLUTIONS FORMS JV WITH GERMAN LOGISTICS COMPANY APOLLO Logisolutions, a subsidiary of Apollo International Group, will invest `500 crore in expanding its presence across India in the next three years through acquisitions and greenfield projects. The company recently signed up a 60:40 joint venture with Germany-based Fiege Logistics. The new company called Apollo Fiege will provide integrated logistics services like customs brokerage, freight forwarding and transportation, among others.
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The logistics company has been operating a Container Freight Station (CFS) at the Jawaharlal Nehru Port for about four years and is planning to set up its network of seven container freight stations across India. Four out of these will be operational by the end of 2013 in locations including Delhi and Chennai. Apollo Logisolutions is part of the Apollo International Group that manufacturers Apollo Tyres. Apollo Logisolutions is hoping to benefit from Fiege’s expertise in the
logistics sector, especially in sectors like automobile, luxury and e-commerce. The company’s clientele includes Swatch and Home Shop18, among others. According to the company, Apollo Fiege will have offices across 20 locations in India by March 2013 and make an investment of about $10 million in the next 2–3 years. As a part of its expansion, the company will set up 28 warehouses through lease agreements and partnerships in key locations.
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RAIL MOVEMENT OF CONTAINERS TO GET COSTLIER BY 31% IN TWO STAGES THE Indian Railways— Railways carry 565.37 million tonne which moves 77 million tonne of freight during April–October 2012 of goods via containers every Indian Railways has carried 565.37 million year—has decided to increase tonne of revenue earning freight traffic haulage charges for container during April–October 2012. The freight train operators by up to 22% carried shows an increase of 28.45 million with effect from December. tonne over the freight traffic of 536.92 million tonne actually carried during the Further, there will be another corresponding period last year, registering round of increase after two an increase of 5.30%. months. Thus, with effect During the month of October 2012, the from February, the charges revenue earning freight traffic carried by will go up by up to 31% Indian Railways was 83.92 million tonne. against the present levels. There is an increase of 6.24 million Haulage charges, which tonne over the actual freight traffic of container train operators pay 77.68 million tonne carried by the Indian Indian Railways for using Railways during the same period last year, the tracks, locomotives and showing an increase of 8.03%. signalling infrastructure, February 1. Due to India’s exportaccount for more than 60% of import imbalance, operators have to their operating cost. increasingly move empty containers The hike varies depending on on the route. The Railways has also weight. For moving empty containers introduced a 0-10 tonne weight, which on flat wagons, or flat wagons will be charged at close to current without containers, the hike is 22% 20-tonne level charges. from December, and 31% from
DP WORLD SET TO BEGIN CONSTRUCTION ON YARIMCA BOX TERMINAL IN TURKEY DP World is to begin construction on its 1.3 million TEU capacity container terminal at Yarimca, near Istanbul. DP World is expected to spend up to $3.7 billion on projects until 2015, which include London Gateway adding four million TEUs, Rotterdam Gateway, and terminal 2 and 3 at Jebel Ali to complete by 2020. Expansion at these mega projects will take its total handling capacity to 102 million TEUs within eight years, up from last year’s total of 69.4 million TEUs.
DP WORLD GRABS PROJECT AT MUMBAI’S JAWAHARLAL NEHRU PORT DP World Ltd has recently bagged an order from Jawaharlal Nehru Port Trust (JNPT) to build and operate a single berth facility alongside its existing terminal operation at Nhava Sheva in Mumbai. The new facility is expected to be operational in 2015. Dubai-based DP World said it will invest approximately $200 million to build a container terminal of 330 metre quay length and 17 hectare of yard, which will have an annual handling capacity of 800,000 TEUs and draft of 13.5 metre.
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The new quay has been awarded for a 17-year concession period and will be equipped with four rail mounted quay cranes and 12 rubber tyred gantry cranes. The company operates five Indian terminals, which are Chennai, Mundra, Nhava Sheva, Visakhapatnam, Cochin, and Asia Pacific and Indian Subcontinent region is the main driver of our volume growth in the first six months of 2012, reporting a 12.1% increase in volumes to 13.3 million TEU.
MODERN AIR CARGO HUB IN CHENNAI BY DECEMBER THE city’s airport will get a modern air cargo hub and a fully automated cargo handling system by December. According to sources, 90% of the 150 crore project was complete and a trial run was expected to begin in a few days. The new hub, which will include a state-of-the-art mechanised cargo handling area, will sprawl over 58,000 sqm space. The present air cargo hub, one of the busiest in the country, serves nearly 30 cargo airlines, including more than 12 exclusive cargo freighters. It is now spread over 26,000 sqm. Traders and multinational companies, who have already started bidding for space in the new hub, expect that it will be able to handle more than six lakh tonne of cargo, against the 2.5 lakh tonne of cargo that the existing one handles.
LUFTHANSA TO USE IBS SOLUTION FOR AIR CARGO MANAGEMENT IBS Software Services (IBS) has won a major contract from European cargo airline Lufthansa Cargo AG to implement iCargo, an air cargo management solution developed by IBS. The solution helps airlines to improve cargo revenues and volumes, along with profitability and customer service, while cutting down operational costs. The deal, supposed to be one of the largest in the air cargo industry, is also viewed as a significant achievement for the Indian IT industry. IBS developed iCargo in collaboration with major airlines like South African Airways Cargo, Gulf Air, Air New Zealand Cargo, Qantas Freight and Australian Air Express. Other iCargo users include Austrian Airlines, Nippon Cargo Airways, All Nippon Airways and Tokyo International Air Cargo Terminal.
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DB SCHENKER LOGISTICS ESTABLISHES LOGISTICS ACADEMY IN CHINA content in everyday business, role DB Schenker has opened its own plays and discussions. Preparations academy to train employees in China. for further expansion of the academy’s There is a growing need for qualified activities are under way. employees in China. Competition Apart from this, DB Schenker has from other market participants is also opened a new 21,000 sqm logistics increasingly being felt. At the same warehouse and operations centre at time, staff turnover is relatively high in the Chinese market. The academy will help develop Schenker India bags ‘Freight professional and personal Forwarder of the Year – skills with specific targets International’ award at MALA in mind. With some 5,000 Schenker India Pvt Ltd, a leading provider employees in 60 cities in of integrated logistics services in India, has China, DB Schenker is one of won the prestigious ‘Freight Forwarder of the Year – International’ at the 3rd Allthe country’s leading logistics India Maritime and Logistics Awards 2012 services providers. (MALA) held recently. The new academy’s The companies were selected on the programme is based on thirdbasis of their operational performance, party and internal expertise. global network, new innovations, yearIt will be offered at different on-year growth and customer satisfaction, locations in China and is according to an official release. geared primarily towards operational management in Erskine Park in Sydney, Australia. contract logistics. Modules range from The new logistics facility will serve logistics concepts and continuous Australia’s electronics, consumer, quality improvement to logistics healthcare and office supply firms. controlling, project management and The facility will handle around 20,000 conflict resolution. Instructors will pallet positions as well as include plug include employees of two Chinese and play technologies for different universities. systems and customers backed up Over the course of a year, the with its own Warehouse Management training group will complete six threeSystem (WMS). day training blocks roughly every six The facility is the 16th centre for weeks in addition to their usual work. Participants will alternate between the company in Australia as well as interactive training with external and 5th in New South Wales for Schenker internal instructors, individualised Australia, the local unit of DB tasks whose aim is to implement Schenker.
ESSAR SHIPPING ADDS TWO VESSELS TO ITS FLEET ESSAR Shipping (ESL) has recently added two more vessels to its operating fleet, taking its tonnage to two million tonnes (MT). According to a company statement, “These latest addition to Essar Shipping’s growing fleet, MV Kishore and Ashok, are MiniCape vessels which are 253 metre long, 43 metre wide and a cargo capacity of 105000 dwt.” With the induction of these vessels, the tonnage stands at two million tonnes. ESL is confident that these vessels will make trade to the Indian coast more economical and cost effective for clients in the power, steel and other core sectors. The company operates a diversified fleet of 25 vessels, including VLCCs, Capesizes, MiniCapes, Supramaxes, mini bulk carriers and tugs.
PETRONET LNG LTD AND GANGAVARAM PORT LTD SIGN TERM SHEET FOR DEVELOPING LNG TERMINAL AT GANGAVARAM PORT PETRONET LNG Ltd (PLL) and Gangavaram Port Ltd (GPL) signed a firm and binding term sheet for developing a land-based Liquified Natural Gas (LNG) Terminal at Gangavaram Port, Andhra Pradesh with a capacity of 5.0 MMTPA. The LNG Terminal will comprise of facilities for receiving, storage and regasification of LNG and will be developed with an approximate investment of `4,500 crore. This will be the third LNG terminal of PLL, the other two being an operational 10.0 MMTPA terminal at Dahej, Gujarat and 5.0 MMTPA terminal at Kochi, Kerela, which is likely to become operation in next six months. The terminal at Gangavaram Port will have the provision for further expansion like the flagship Dahej LNG Terminal of PLL. Speaking on the occasion, Dr Balyan, MD & CEO, PLL, said, “The construction work on the terminal is expected to start within a year and it shall be ready to commence operations by the Year 2016. We are eager to have our presence on the east coast and are exploring various possible options to bring gas earlier than 2016 at Gangavaram Port.” DVS Raju, CMD, GPL, said, “This will not only be the first LNG terminal to come up in Andhra Pradesh but also in the entire East Coast of India. We are very glad to partner with PLL as they have substantial proven expertise in the sector. Developing LNG Terminal at the Port inches us closer to our vision to see Gangavaram Port as truly modern, multi-purpose and environment friendly port.”
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MILIND DEORA PROMISES FOCUS ON MAJOR PORT CAPACITY AUGMENTATION, BOOSTING INDIAN SHIPBUILDING MILIND Deora, who was recently given the additional portfolio of Minister of State in the Union Ministry of Shipping, has listed enhancing the capacities at major ports, to cater to burgeoning trade projections, and facilitating more orders for domestic shipyards among his key priorities. He said this after meeting Rajeev Gupta, Chairman of Mumbai Port Trust (MbPT), and other senior MbPT officials during his first visit to the country’s maritime capital after taking over the additional charge. Deora also met the Chairman of Jawaharlal Nehru Port Trust (JNPT)
and CMD of Shipping Corporation of India (SCI). While interacting with the media, he stressed that the vast land holdings of Mumbai Port should be utilised for the overall development of the port and city. He promised all help to the Port in coordinating with the State Government in this matter. MbPT is Mumbai’s biggest landowner. Earlier, immediately after taking charge, he said his top priority, along with inviting private participation in the sector, would be to utilise the country’s massive coastline by creating economic opportunities.
ADANI HAZIRA CONTAINER TERMINAL READY FOR OPERATIONS THE Adani Hazira Container Terminal (AHCT) at Adani Hazira Port Pvt Ltd (AHPPL) recently received a Customs notification. AHCT is strategically located at a distance of around 120 nautical miles north of JNPT (Nhava Sheva) and will serve as the gateway port for the rich and immediate hinterland comprising South Gujarat, North Maharashtra and Central India. The Phase 1 infrastructure developed at AHCT includes—4 post-Panamax quay cranes with an outreach of 18 containers across, 12 electric RTG cranes for yard operations, container yard with 3,378 ground slots and
128 reefer plug points. Hinterland cargo connectivity for imports and exports to North and West ICDs will be provided from the nearest ICD operated by KRIL, which is 14 km from the container terminal. AHCT will provide connectivity between the container terminal and ICDKRIL for all customers. According to the release, AHCT also houses an on-dock Container Freight Station (CFS), which will provide facilities for stuffing/destuffing and warehousing of cargo. The CFS has an initially notified warehouse space of 150,000 sqft, which will be further expanded to 350,000 sqft.
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HIND TERMINALS-CWC LOGISTICS PARK HANDLES 2 BCN RAKES SIMULTANEOUSLY AT ITS NHAVA SHEVA CFS HIND Terminals Pvt Ltd (HTPL)CWC Logistics Park Container Freight Station (CFS) has recently taken credit in handling 2 BCN rakes. It also achieved another milestone by handling 75 rakes. In its continuous effort to facilitate a variety of services under one roof, Hind Terminals-CWC Logistics Park has developed 3 rail sidings at its Nhava Sheva facility, to handle container rakes as well as BCN goods rakes. Hind Terminals has handled commodities like soyabean meal (DOC), rapeseed meal and maize through BCN rakes at this facility, which is being used by all major shippers and exporters for their bulk agri-commodity exports. With export prospects of commodities like soyabean meal, rapeseed meal and maize looking up in the coming season, Hind TerminalsCWC Logistics Park is gearing up to manage increased volumes. Handling two rakes simultaneously is an endeavour towards this. The success of this operation significantly enhances the rake handling capacity of Hind Terminals-CWC Logistics Park, which could reach as high as 50 rakes a month.
BLPL SINGAPORE COMMENCES TWO CONTAINER VESSEL ROUTES BLPL Singapore, a wholly owned subsidiary of Transworld Group Singapore, one of East Asia’s fastest growing shipping and logistics companies, recently announced the commencement of two dedicated container vessel services: • Singapore/Port Klang – Port of Yangon, Myanmar • Singapore/Port Klang – Kolkata/ Haldia/Paradip Using Singapore and Port Klang
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as transhipment hubs, the Singaporebased company will operate fixed-day, weekly services in and out of the Port of Yangon MIP terminal to facilitate and connect cargo from and to the Indian Subcontinent, South Asia, the Far East, Middle East and East Africa. Myanmar, which has recently opened up to foreign markets, is expected to be the fastest growing economy in the Asia region. Concurrently, BLPL will also facilitate and connect cargo to
and from the East Coast of India via the ports of Kolkata/Haldia/Paradip, major gateway ports for the North East Corridor of India and the landlocked countries like Nepal and Bhutan. BLPL, which owns and operates a growing container fleet of 18,000 TEUs, will be able to cater to customers’ various needs with its supply of reefer units (temperature-controlled) and special containers that can carry odd-sized and project cargo.
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CII TO ORGANISE TWO-DAY WAREHOUSING CONFERENCE WAREHOUSE is the key integrator in the supply chain process, and is a tool for competitive advantage to maximise service levels. Today’s modern warehouses are profit centres rather than traditional storage spaces. More focus on increasing the efficiencies of warehouses are essential due to the fact that warehousing costs is contributing 25–30% of the total supply chain costs, increase in number of third-party logistics service providers, better utilisation of costly space, increased number of SKUs, more JIT requirements, more demanding customers, etc. Keeping all this in mind, Confederation of Indian Industry (CII) will organise a two-day conference on Building Warehousing Competitiveness
‘Emerging Trends for Warehousing’ during December 19–20, 2012 in Mumbai. Currently, the sector is facing various challenges in the path to true competitiveness. Some of these areas are—adaption of technology in different areas of warehousing, automation of processes and outsourcing. Integration of warehousing with efficient transport systems will also bring about significant cost savings. In order to help firms overcome these challenges, the sessions have been designed accordingly. Participants will discuss various topics like warehousing sector: emerging trends, case study on warehouse excellence and panel discussion on government policies to promote warehousing, among others.
UPS EYES HEALTHCARE LOGISTICS GLOBAL logistics major UPS is looking at China and India, as the major healthcare opportunity markets in Asia, the company stated in a release. China and India are the fastest growing healthcare markets in the region and several healthcare companies have their regional headquarters in Singapore, where UPS opened its first dedicated healthcare facility for Asia in 2011, it added based on a healthcare survey titled ‘Pain in the (Supply) Chain’. For global healthcare executives,
China was the top expansion destination over the next 3–5 years, followed by the US, Brazil and India. The survey reflects the views of senior-level healthcare supply chain decision makers in the pharmaceuticals, biotech and medical device and supply industries. Decision makers in Asia are heavily focussed on global expansion in the next 3–5 years, while other top investment strategies include increasing usage of new distribution channels and new technologies, UPS stated.
`4,000 CRORE DEAL INKED TO DEVELOP TWO RAIL CORRIDORS IRCON International (the Railway susidiary), the Chhattisgarh Government and the South Eastern Coalfields Ltd (SECL) have inked an agreement to develop two rail corridors at a cost of about `4,000 crore. According to an official statement, the preliminary work on the corridors, which boasts of a combined length of 4,000 km, will commence before the end of this year. It will facilitate movement of passengers as well as freight, primarily coal. To be implemented by two Joint Venture Companies (JVCs), the projects would see IRCON’s equity at 26%, while the remainder would be held by the Chhattisgarh Government and SECL. Corridor-I or the east corridor will be about 180 km in length from Bhupdevpur-GharghodaDharamjaygarh up to Korba. Corridor-III or the east-west corridor will stretch about 122 km, from Gevra Road to Pendra Road through Dipka, Katghora, Sindurgarh and Pasan. Names of the JVCs have been proposed as ‘Chhattisgarh East Rail Ltd’ for Corridor-I and ‘Chhattisgarh East West Rail Ltd’ for Corridor-III.
AP TO COME OUT WITH NEW AGRI WAREHOUSING POLICY THE Andhra Pradesh Government is working on a new agriculture warehousing policy that will seek to incentivise private players willing to invest in warehousing facilities. The new policy is part of the State Government’s initiative to have an additional 50 lakh million tonne of warehousing capacity in the next 3–4 years through public private participation. The new policy, will also cover cold storage facilities for fruits &
vegetables and will have a transparent bidding process. The policy will come out with the right mix between warehousing, cold storage and cold chain requirement in the state. It will seek to incentivise private participation through allotment of cheaper lands for such ventures, apart from other fiscal benefits. The state, at present, has about 75 lakh tonne of warehousing capacity, including 12 lakh tonne with the Food Corporation of India and
Central Warehousing Corporation, and 26 lakh tonne with the State Warehousing Corporation. However, the state produces 22 million tonne of foodgrains and 24 million tonne of horticulture products, the highest in the country. There should be a storage facility to the extent of 60% of the production. According to this yardstick, the state should have at least 133 lakh tonne of storage space for food grains alone.
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NEWS, VIEWS & ANALYSIS L A T E S T
H A P P E N I N G S
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W O R L D
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DB SCHENKER WITH NEW LOGISTICS CAPACITY FOR THE GREATER TOKYO AREA SCHENKER-Seino Co Ltd has signed a 10-year lease agreement with the Redwood Group for a build-tosuit warehouse in the greater Tokyo area. The logistics centre will provide additional capacity for customers from different industries such as electronics and consumer. It will feature the newest environmental technologies and will provide substantial energy savings, measures which fits perfectly in the sustainable strategy DB2020 of the DB Group. Herbert Wilhelm, President & CEO, Schenker-Seino Co Ltd, pins high hopes on the new building. “This ultramodern and environmentally exemplary building will help us to
remain one of the premier logistics services providers in Japan. We very much look forward to have this facility as an addition to our already existing logistics centres for the benefit of our customers,” Wilhelm said. The building will be designed to be highly energy efficient and functional, with the highest standards of seismic engineering and environmental technologies. Up to 30% energy savings will be realised through a photovoltaic power generation system consisting of 2,940 solar panels on the roof and exclusive LED lighting. Rainwater will be collected and used. The warehouse is expected to get TAPA-A certification after completion.The leasing
GVK COAL AUSTRALIA SIGNS CONTRACT FOR THE CONSTRUCTION OF A 60 MTPA PORT IN QUEENSLAND GVK through its subsidiary Hancock Coal Infrastructure Pty Ltd, has recently signed a construction contract with leading international construction major, Samsung C&T Corporation, a subsidiary of the Korean conglomerate Samsung and Australian-based Smithbridge Group Pty Ltd, to build a 60 mtpa Terminal 3 (T3 )Port Terminal Port for the Alpha Coal project at Abbot Point, North Queensland Australia. GVK chose to invest in Australia because of its low political risk, coupled with strong environmental and safety standards, which align with GVK’s corporate philosophy and values. This is a ‘pit-to-port’ project being built at a cost of US$10 billion. The first phase of the project involves a 30 mtpa mine, a 500 km railway line and a 60 mtpa port. While the other construction contracts for the project such as mine infrastructure, the wash plant and rail will be announced in the next few months. Dr GVK Reddy, Chairman, GVKPIL, said, “This is a key strategic development for us and further underscores our deep commitment to the Alpha Coal project. After receiving
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all the Tier 1 approvals, this is the first major step towards finalising the construction contracts and completing the financing for the project which is well underway.” Albert Smith, Group Managing Director, Smithbridge, said, “We are pleased to be the Australian joint venture partner with Samsung C&T for the design and construction of the Abbot Point Terminal 3 Port project. We look forward to developing a highquality engineering solution built on work already done and delivering a very cost efficient result.” GVK has received the all-important strategic Federal Environment clearance for its Alpha Coal and Rail Project. The development of GVK’s T3 at the Port of Abbot Point, near Bowen has also been approved recently by the Federal Government under the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act). This signifies GVK’s respect and commitment for the environment in providing reliable infrastructure keeping in line with best sustainable practices for the overall development of society.
agreement is the first collaboration between Schenker-Seino Co Ltd and the Redwood Group, a team of logistics real estate professionals. The building area of the warehouse which is scheduled to start operations in September 2013 is around 9,000 sqm. The total area of the four-storied building will be close to 33,000 square metres. Around 30 truck berths and ample parking lots for staff and visitors will be available. It will be the largest of Schenker-Seino’s warehouses to date. Target customers—basically nonJapanese companies that are planning to expand their Japan business—will benefit from the convenient location of the building.
‘MADHYA PRADESH WILL BE DEVELOPED AS LOGISTICS AND WAREHOUSING HUB’ MADHYA Pradesh is all set to be developed as the logistics hub of the country according to Food And Civil Supplies Minister Paras Jain. Jain recently said that the State Government has given industry status to warehouses. He said that Madhya Pradesh is second in wheat procurement in the country after Punjab. Investment in warehousing has been invited to store this procured wheat safely and improve storage arrangements. He added that a policy has also been chalked out to accord industry status to warehouses. Under the policy, 15% capital subsidy will be given. Warehouse zones will be developed in 10 districts. Preference will be given to silo bags construction and 10-year guarantee will be given. In the state, three more logistic hubs will be developed at Pawarkhera in Hoshangabad district. He also added that a target has been set to create storage capacity of 60 lakh metric tonnes in the state in next two years.
NEWS ANALYSIS MAJOR PORTS DEVELOPMENT
Multiplying cargo handling capacity With an aim to tackle the challenges posed by rising traffic and to provide better ship management facilities at Indian ports, a suggestion has been floated in the industry to develop a major port in each coast of the country. However, working on this suggestion may bring in a new set of challenges (related to finances and land acquisition, etc.). Currently, modernising the existing capacities of the major ports can be a more productive option as they have played a critical role in driving the growth of the maritime industry. ARINDAM GHOSH
THE ever growing international trade has played a crucial role in enabling India to deliver high levels of economic growth consistently over a period of time. India’s international trade is growing 10–12% annually—a trend which is expected to continue for some time. This spells good news for the country’s logistics sector—currently one of the fastest developing sectors of the country. According to industry experts, if India is able to maintain this level of growth, the country along with China will soon lead Asia’s economic expansion on the global map. For India to move forward in this direction and achieve this position sooner than later, ports will play a vital role.
NEED TO DEVELOP MAJOR PORTS Currently, India’s maritime industry facilitates the country’s international trade by almost 95% in volume and 70% by value. Presently, India has 12 major ports—viz.; Mumbai, Jawaharlal Nehru Port, which are under the control of the Central Government. The country also has 176 non-major ports operated by the concerned state governments and other private players. In a bid to deal with the challenges posed by rising traffic and to provide better ship management facilities at Indian ports, a suggestion has been floated in the industry to develop a major port in each coast of the country. This idea if worked upon by the concerned stakeholder may offer a huge boost to the government decision to develop a surplus capacity of above 25% than the anticipated figures at 3,230 million tonne.
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Commenting on the suggestion, Tarun Agarwal, Associate, i-maritime Consultancy Private Ltd, elaborates, “Though I believe it is a welcome suggestion to develop a major port on each coast of the country, as far as the growth in the maritime sector is concerned, they have been brought in by the minor ports. So, I think suggestions related to developing minor ports, facilitaing entry for private players into the port and terminal business, will be better. Moves in this direction will contribute to greater investor
ideal combination is great planning stage ideation and big investment.”
PPP: A SOLUTION TO THE FUNDING DILEMMA
confidence.” However, “to make this suggestion successful, strategic planning is a must,” he points out.
Developing and implementing state-ofthe-art and sustainable infrastructure is highly crucial, but it requires massive investments. For the government to single-handedly make the entire funds available may not always be possible. In such a scenario, Public Private Partnership (PPP) mode of investment can emerge as a viable option. PPP would lead to the introduction of latest technologies and solutions along with improved management practices. Above all, the investment from the private sector will come as a huge boon to the additional capacity, thereby making Indian ports highly competitive globally. However, there are lots of policy related challenges that a PPP project faces such as considerable delays and uncertainty in getting clearances from multiple agencies for a project.
CHALLENGES ENCOUNTERED
MODERNISING PORT: A FRUITFUL OPTION
Developing higher capacity is critical to support growing trade. Highlighting some of the challenges, Agarwal opines, “Given that each port is a maritime city, it involves the development of a set of infrastructural facilities and services; there has to be proper connectivity. But this will involve huge levels of investment. Further, like any other project, there are a lot of approvals related to other major aspects land acquisition, etc., which are required. This can be a time-consuming task.” He adds, “The
Given that India is one of the fastest growing economies today and trade will continue to increase, ports will play a major role to facilitate this trade. However, to support the rising growth of trade, capacity addition is critical. But currently, working on the suggestion of creating a major port in each coast may not be a viable option given the new set of challenges it will bring along with it. However, modernising the existing major ports and improving their handling capacity may be a more fruitful and economic option.
The move can be beneficial as the traffic at the major ports is likely to grow at a CAGR of about 8% from 561 million tonne in 2009–10 to 1,215 million tonne by 2019–20.
CUTTING-EDGE SOLUTIONS TECHNOLOGY & INNOVATIONS
Navisphere® Technology Platform To Provide End-to-end Visibility CH Robinson Worldwide, Inc., one of the world’s largest transportation and logistics companies, has recently introduced Navisphere®, the next version of the company’s single global technology platform, which provides end-to-end visibility, consistent business processes and strategy-driven business intelligence around the world. The Navisphere platform is CH Robinson’s response to increasingly sophisticated supply chain requirements across shippers of all sizes. The platform is used by CH Robinson employees, customers and service providers to manage transportation & sourcing activities on a global scale. In addition to deploying deeper multi-service integration to users, the release of Navisphere brings significant improvements to online tools for CH Robinson customers. The updates to Navisphere online access include a modernised user interface, streamlined
access to business-critical data and customisation to support customer requirements across global workflows. “Navisphere allows companies of all sizes to take advantage of the latest
USP By integrating with a shipper’s ERP system, Navisphere automates workflows between transportation & business operations and provides visibility to global transportation across all modes. This gives customers greater control over their supply chain activities and accelerates proactive problem resolution. technology architecture CH Robinson has to offer. Navisphere provides tools that are easy to use and intelligence that gives businesses the opportunity
to follow through on their supply chain strategies,” said Tom Mahlke, Chief Information Officer (CIO), CH Robinson. Navisphere allows customers to leverage CH Robinson’s technology investments and gain access to a centralised network of more than 100,000 supply chain partners, without the need to integrate with each provider individually. By having access to all their supply chain information in one centralised location, users can better manage their logistics spend, foster optimisation and improve supply chain productivity. “Navisphere’s customised business processes enable all participants in a customer’s supply chain to comply with their specific business requirements. Simplifying complex scenarios creates real value for carriers, shippers and others in the supply chain,” said Mahlke.
Invites You To India’s Largest
SME Gathering
DECEMBER 2012 • SMART LOGISTICS • 19
Cutting-edge Solutions, continued
UPS’ New Cloud-Based Technology Platform To Improve International SCM UPS recently announced enhancements to its global ocean and air freight forwarding product, UPS Supplier Management, with the introduction of UPS Order WatchSM, a cloudbased technology platform that allows customers to more efficiently collaborate with international suppliers and better manage their inbound supply chains. Enhancements to the service include added capabilities to enable greater accuracy and timeliness of overseas vendor bookings; improved processing and management of suppliers; automated exception management; near real-time shipment status and detailed line-level visibility of in-transit inventory; improved internal operational processes; and facilitation of Purchase Order (PO) consolidation and optimised shipping plans. The UPS Order Watch platform will be available to new customers
USP UPS Order Watch also facilitates improvements to inbound supply chain visibility by enabling a ‘single version of the truth’ due to the entire value chain community, from ocean carriers to trucking companies, being linked to the host network as opposed to the common method in place today of electronic data interchange, or EDI, file exchanges. starting in early 2013. “Through scalable cloud-based SCM technologies such as UPS Order Watch, companies are not only able to streamline management of vendors but also manage all their inbound shipments via a single platform. This can provide opportunities to consolidate ocean freight shipments
and improve container usage to realise cost savings,” said Tom Boike, VP – Supplier Management, UPS. The improved UPS Order Watch vendor booking system will dispatch system-generated exception alerts to help ensure vendor adherence to customer requirements and provide an online system for approvals, facilitating PO-specific communication between vendor and customer. Enhanced monitoring of vendor bookings against purchase order details and ship windows can further increase customer control, enabling intervention in early or late shipment or improper order quantities. Once an order is placed, PO-level shipment planning and execution capabilities enable visibility and control from order creation through shipment delivery, providing customers with a virtual on-hand inventory view of incoming orders and merchandise.
Concurrent Event
21 - 24 December 2012 GLADA Grounds, Chandigarh Rd 10 am - 7 pm
LUDHIANA 250+ participants | 20,000+ business visitors expected | 15,000+ products on display | Business transactions worth ` 48 crore expected | Spread over 4200 sq mtr | Showcasing more than 30 diverse industry categories.
Exhibitor Profile Auto & Auto Components | Chemicals & Allied Products | Testing & Measuring Instruments Electrical & Electronics | Hydraulics & Pneumatics | IT Products & Services | Automation | Instrumentation Material Handling Equipment | Packaging Machinery | Wires & Cables Machine Tools & Accessories | Pipes & Fitting | Plastics & Polymers Safety & Security | Process Machinery & Equipment Light & Medium Engineering
20 • SMART LOGISTICS • DECEMBER 2012
PRICE TRENDS IRFI Trend for November 2012
The RFI stood at 177 points in the month of November 2012, which is 2 points higher in comparison to the corresponding period last year.
ZONAL FREIGHT TRENDS The overall freight rates have increased by 0.69% as compared to last month. The freight rates from Delhi registered the highest increase of 3.20% in comparison to last month owing to the shortage of vehicles due to heavy dispatch material and the impact of the festive season. The freight rates from Kolkata registered the highest decrease of 5.73% in comparison to last month due to less dispatch of material.
INDEX TREND FOR 5 YEARS: TRENDS FOR NOVEMBER (Y-o-Y) 180 178 177
176
175
175
174 172 172
170
171
168 166 2008-09
2009-2010
2010-2011
2011-2012
2012-2013
COMMERCIAL VEHICLES DOMESTIC SALES: The overall Commercial Vehicles (CVs) segment registered a growth of 4.26% in April–October 2012 as compared to the same period last year, while Medium & Heavy Commercial Vehicles (M&HCVs) registered a negative growth at -13.99% and Light Commercial Vehicles (below 7.5 tonne) grew at 18.19%.
FORECAST FOR DECEMBER 2012: The RFI in December 2011 was the same in comparison to December 2010. The freight rate in December 2012 is expected to remain firm as a number of companies have their yearly closing in December.
Indian Road Freight Index (IRFI), a service introduced by Transport Corporation of India (TCI), is an index of weighted average lorry freight rates across various routes, calculated based on the route density and the dynamic freight rates of routes across the country. Knowledge Partner: Transport Corporation of India (TCI); website: www.tcil.com; e-mail: irfi@tcil.com
SMART LOGISTICS
APRIL 2010
DECEMBER 2012 • SMART LOGISTICS • 21
IN CONVERSATION WITH AMIT JATIA
THE UNIQUENESS QUOTIENT OF YOUR SUPPLY CHAIN McDonald’s has a unique supply chain network—100% outsourced, extremely lean and efficient. The success of McDonald’s supply chain network—which has almost become iconic—can be directly attributed to its unique concept of outsourcing work. McDonald’s believes that we should
or operators and the suppliers. This is Ray Kroc’s ‘3-legged stool’ theory, which means that the stool is only as strong as the three legs and each leg has to be equally strong so that there is no scope for collapsing. Even more startlingly different from most company-supplier relationships is the fact that McDonald’s has no legally
While the mechanics of
supply chain is critical, equally important is
Food Safety
“The key ingredients for McDonald’s in managing a supply chain of this magnitude have been trainings with suppliers, no compromise on the international McDonald’s quality standards and the development of a culture of partnership and transparency with our suppliers,” informs Amit Jatia, Vice-Chairman, Hardcastle Restaurants (McDonald’s West and South), in a tête-à-tête with Prateek Sur. Excerpts… outsource everything to companies that are experts in their subject matter and then monitor their performance so that Key Performance Indicators (KPIs) are not affected. Underlying the suppleness of its supply chain are three principles to which the company adheres unwaveringly—the principles of trust & collaboration between the brand, the owners
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signed agreements with its suppliers. The company has only a simple ‘handshake relationship’ with all its suppliers.
MANAGING COMPLEXITIES Adopting A Streamlined Methodology To Simplify Multi-Layered Supply Chain While the supply chain of McDonald’s at first glance appears simple, its diverse components are both critical and multi-layered. A detailed methodology has been put in place to ensure that each component of the system works seamlessly with the others. The Core Suppliers McDonald’s has 14 core suppliers (viz., Tier-I suppliers) who supply directly to the fast food chain. Examples of Tier-I suppliers include Vista Processed Foods Pvt Ltd, the Dynamix Group and Mrs Bectors, among others. The other suppliers (termed Tier-2 suppliers) forward ingredients to the Tier-I suppliers. The fast food chain has a total of 40 suppliers from whom it sources its ingredients. Most of the suppliers are local, but some are internationally famous foreign brands like McCain Foods India, which set up shop in India when McDonald’s ventured into the fast food business in the country. The food ingredients are supplied by two categories, viz., Tier-I and Tier-2 suppliers. Tier-2 suppliers comprise growers and processors who include, importantly, lettuce and potato growers, poultry farms and companies that manufacture coating systems that coat vegetable and chicken patties. The ingredients are supplied to Tier-I suppliers who process them, for instance, into vegetable and chicken patties—this is done by Vista Processed Foods Pvt Ltd—or potato products like French fries and hashbrowns, which are expertly churned out by McCain Foods India Pvt Ltd. Transportation To Distribution Centres The products are then transported in a dedicated fleet of refrigerated trucks to the company’s Distribution Centres (DCs). Multi-temperature and singletemperature trucks then transport the
CREDENTIALS Amit Jatia is the Vice-Chairman of Hardcastle Restaurants (McDonald’s West and South). It was under his leadership that McDonald’s entered the West and South of India. Starting with a single restaurant in October 1996, today, Jatia has established over 135 worldclass restaurants across West & South India and Hardcastle Restaurants has acquired the status of a Development Licensee for McDonald’s in India—a progression from joint venture partner. Today, as Vice-Chairman, Jatia continues to play a leadership role at HRPL. Under his leadership, the brand has won numerous accolades and awards for Business Excellence. McDonalds has also been awarded Business World’s ‘Most Respected Company’ awards as the ‘No 1 Food Services Company’ in India, in 2003 and 2004. CNBC has acknowledged McDonald’s as the ‘Most Trusted Brand’ voted by the consumers for a record last six years. Prior to McDonald’s, Jatia was MD, Houghton Hardcastle (India) Ltd, one of the family’s group companies. Jatia has a degree in Business Administration from the University of Southern California, Los Angeles.
fast food swiftly to the 250 McDonald’s restaurants across the country. The DCs are integrated seamlessly with the vision of the company which has embarked on a period of roller coaster growth, with one McDonald’s outlet being launched every 10 days in the country. The supply chain of fast food is, in effect, a hub-and-spoke model because DCs act as hubs. The transportation of McDonald’s has been completely outsourced and since 80% is refrigerated truck movement, the company has a dedicated fleet which transports its goods. The
Through its unique cold chain, McDonald’s has been able to both cut down on its operational wastage, as well as maintain the freshness and nutritional value of raw and processed food products. key ingredients for McDonald’s in managing a supply chain of this magnitude have been trainings with suppliers, no compromise on McDonald’s international quality standards and the development of a culture of partnership and transparency with our suppliers.
MANTRA FOR MAINTAINING SAFETY AND ENSURING CUSTOMER SATISFACTION Devising Food Safety Systems While the mechanics of supply chain is critical, equally important is food safety. McDonald’s adheres to the Hazard Analysis Critical Control Point (HACCP) system, which ensures food quality. This is an industry-level certification, which officially approves all the suppliers of the fast food chain. SQMS And DQMP Programmes McDonald’s has also devised its own food safety systems, the Supplier Quality Management Systems (SQMS) and the Distributor Quality Maintenance Program (DQMP). SQMS is a worldwide mandate for all McDonald’s suppliers and includes essentials of the HACCP control system, while also contriving several principles of its own. These systems are applicable to processing and manufacturing plants. DQMS, on the other hand, audits and checks the warehouses of the chain. McDonald’s trains auditors worldwide on its SQMS and DQMP programmes. Independent auditors then audit plants and warehouses and allot scores to McDonald’s facilities globally, thus ensuring that the food leaving its processing plants and
DECEMBER 2012 • SMART LOGISTICS • 23
In conversation with, continued ued
warehouses is of the highest safety standards. Sensory Programme In Place To keep an assiduous check on the taste of its products, McDonald’s runs a sensory programme. It has a centralised laboratory in Hong Kong which trains sensory experts. Special personnel nominated both from the suppliers’ and Quality Assurance teams of McDonald’s have to attend the training programme. Every batch of food products that gets manufactured at a supplier’s plant is checked by an approved sensory panel at the plant. Scores are allotted to the product and only if the scores are above a certain percentage, it is shipped out of the factory. Other Control Levels Another level of control is that every month, members of the suppliers’ and McDonald’s Quality Assurance teams select an outlet at random and carefully inspect the quality of the food products. Also, every quarter or half year, members of the management do a ‘product cutting’ with key suppliers— fry a product, check its taste and allot scores—to check if the product scores are moving in the right direction northwards. And lastly, samples of products that are manufactured in the country are shipped to the central laboratory at Hong Kong, which evaluates the products.
STORAGE OF MATERIALS: FREEZING FOR FRESHNESS The collection, transportation and storage of all McDonald’s ingredients is undertaken with utmost precision and care. To give an example of the quality standards undertaken at McDonald’s, let’s take a look at lettuce. Lettuce is one of the main components of the McDonald’s burger and this crop—containing 80% water content—has an extremely short shelf life. To ensure that only the freshest of lettuce reaches our customers, the post harvest facilities at our supplier’s end—a cold chain—consists of a pre-cooling room to remove field heat,
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a large cold room and a refrigerated van for transportation where the temperature and the relative humidity of the crop is maintained between 10C and 40C and 95% respectively. The Pre-cooling Room Vegetables are moved into the pre-cooling room within half-an-hour of harvesting. The pre-cooling room ensures rapid vacuum cooling to 20C within 90 minutes. The pack house, pre-cooling and cold rooms are located at the farms itself, thus ensuring no delay between harvesting, pre-cooling, packaging and cold storage. Hi-tech Refrigeration McDonald’s has ensured that its supplier of patties has hi-tech refrigeration plants for the manufacture of frozen food at temperatures as low as -350C. This is vital to ensure that the frozen food retains it freshness for a longer time and the ‘cold chain’
McDonald’s has a unique supply chain network—100% outsourced, extremely lean and efficient. The success of McDonald’s supply chain network—which has almost become iconic—can be directly attributed to its unique concept of outsourcing work. is maintained. The frozen product is immediately moved to cold storage rooms. All the products sourced from various parts of the country come together at the McDonald’s DC. Ranging from liquid products coming from Punjab to lettuce from Pune, the DC receives items from different parts of the country. These items are stored in rooms with different temperature zones and are finally dispatched to the McDonald’s restaurants on the basis of their requirements. The company has both cold and dry storage facilities with the capability to store products up to -220C as well as delivery trucks to transport products at temperatures ranging from room temperature to frozen state.
IDENTIFYING, UNDERSTANDING AND ENSURING SUSTAINABILITY The McDonald’s supply chain is a complex web of direct and indirect suppliers. We manage this complex system by working with direct suppliers who share our values and vision for sustainable supply. We hold them to clear standards for quality, safety, efficiency and sustainability. We expect them to extend those requirements to their suppliers. We also partner with them to identify, understand and address industry-wide sustainability challenges and achieve continuous improvement. We envision a supply chain that profitably yields high-quality, safe products without supply interruption while leveraging our leadership position to create a net benefit by improving ethical, environmental and economic outcomes.
SPECIFIC STANDARDS FOR THE INDIAN MARKET IN LINE WITH INTERNATIONAL TRENDS Cold chain was one of the unique concepts of McDonald’s supply chain in India. It took more than six years to get the system into place. This system brought about a veritable revolution, immensely benefitting the farmers at one end and enabling customers at retail counters get the highest quality food products, absolutely fresh and at great value. Through its unique cold chain, McDonald’s has been able to both cut down on its operational wastage, as well as maintain the freshness and nutritional value of raw and processed food products. This involves procurement, warehousing, transportation and retailing of perishable food products—all under controlled temperatures. Through each of these steps, McDonald’s works closely with its suppliers to ensure that international safety standards are met with. prateek.sur@network18publishing.com
SPECIAL FOCUS EMERGENCE OF M&A M&Ass
Together we stand, together we grow The November 2009 $26 billion allcash acquisition of Texas-based rail road company Burlington Northern Santa Fe by Warren Buffet attracted several eyeballs to the next big thing—logistics and supply chain. “Transportation is fundamental. And there’s lots of money to be made,” Buffet said after the acquisition. Today, after more than two years, supply chains in India have come a long way and so have Mergers and Acquisitions (M&A) and their impact on the supply chain. NISHI RATH
THE Mergers & Acquisitions (M&A) activity is set to become a prominent driver of growth for many businesses in the next few years, including the supply chain, with companies and their financial backers considering M&A as a means to increase shareholder value. According to experts, many executives view acquisitions as a key growth tool in the next year. Most forecasts indicated that in 2012, the M&A activity will be comparable to recent years, showing no signs of slowing down despite cautious global economic forecasts. Indian M&A transactions are primarily driven by the desire for growth. Indian companies are seeking entry into fast-growing emerging markets and market share in profitable developed economies; they are looking to augment their knowledge, reach and capabilities through M&A of companies for their brands, technology, talent and product portfolios.
FORMATION OF M&A Now, more than ever, a healthy amount of M&A activities are taking place in various industries, including the supply chain. Companies go in for M&As depending on the need
26 • SMART LOGISTICS • DECEMBER 2012
to enter a segment of the business in which they do not have any presence. Elaborating further, Anil Seshagiri, Head – Strategy & Business Head, DelEx, informs, “M&A are important for players in the supply chain services space. This is because customers are increasingly looking for one service provider who handles all the requirements. Hence, companies that provide only a few services would need to scale up the service portfolio—the quickest way of doing it is through M&A.” “However, a lot depends on the how fast the companies synergies evolve as one entity to retain and grow the existing business,” Seshagiri adds. According to experts, the present environment is fairly favourable for
M&A. Small companies want to stay in business and so, they want to be a part of a bigger entity in order to grow even though it is getting increasingly difficult for them to compete in this competitive era, due to capacity tightening, increasing technology usage and dependence and increasing cost. Business drivers for M&A will vary from company to company, but some of the most common drivers include: • Expansion of product portfolios or services • Realisation of synergies through consolidation vs. competition • Rapid or low-cost entry into new markets by leveraging the partner’s manufacturing or distribution footprint
• Market share growth by absorbing competitors • Acquisition of key products or technologies But M&A come with various challenges, which should be dealt with in order to make the move worthy.
CHALLENGES IN M&A The challenges that come up after an M&A can be classified into two main areas—cultural and technical. Cultural challenges: It can be said that M&A brings two distinct cultures together. A corporate M&A may have an element of bitterness, especially among the individuals of the acquired company, who tend to believe that they have been taken over and upon whom the biggest adjustments usually fall. Conversely, employees at the acquiring company may feel like they no longer fit in. They may be disinclined to expend the necessary effort to build bridges in the new organisation. They may be unready or unwilling to retool, realign and relearn how to do their jobs. A lot of acclimatisation and adjustment is expected on both sides. Technical challenges: M&A also reveal the state of the company’s technical infrastructure. At the point of confrontation begins the exercise of planning a revamp or transfer of technologies, processes and systems needed to establish a common regime upon which the new organisation will operate. Apart for these, when organisations merge, there are changes in the overall regulations. In some instances, M&A may bring forth the need to comply with new regulations, which requires additional understanding, planning and execution from both the sides.
ESSENTIAL FACTORS FOR THE SUCCESS OF M&A There are four critical strategies for creating value in the M&A activity in the coming year, according to industry experts. These include business strategy, acquisition strategy, supply
chain strategy and operational strategy. But they also believe that for laying the foundation for successful M&A, taking the supply chain view is the way to go. And if a company wants to succeed in M&A for value creation in the upcoming year, there are some essential requirements, viz.: • Speed: Capturing the maximum value from an acquisition and setting the pace for results is the mantra. Stakeholders, the marketplace and
M&As THAT MADE NEWS IN RECENT TIMES DTDC bought 53% stake in Eurostar Express Logistics major DTDC Courier and Cargo acquired 53% stake in UAE-based Eurostar Express for an undisclosed amount. The acquisition according to experts enabled the Bengaluru-based company to gain access to the robust infrastructure and quality delivery capabilities in Dubai and Abu Dhabi. Japanese corporate group acquired Atlas Logistics SBS Group acquired Atlas Logistics, a leading Bengaluru-based provider of integrated and comprehensive global transportation solutions. The acquisition of the Indian company was said to give SBS Holdings a significant presence in the rapidly growing domestic logistics market in India and reinforce its position as a full-service international logistics group. Future Supply Chain acquired Transmart India’s warehousing business Future Group’s logistics and supply chain arm—Future Supply Chain Solutions—acquired the warehousing business of Transmart India for an undisclosed sum. The deal included a 2 lakh sqft distribution centre and some of its clients. Transmart India is a part of Tushar Jani’s SCA Group. It was founded in 2008 and provides 3PL services.
the competition, all watch the speed of acquisition and will value the acquisition based on the speed at which results are achieved. • Organisational alignment: Organisational design, effective change management, constant communication, as well as cultural sensitivity are critical to the success of M&A in the supply chain. The sooner these issues are worked through and clearly communicated to the entire organisation, the faster levels of fear and anxiety can be reduced and earlier integration of work can begin. • IT technologies: One of the most challenging aspects of any M&A activity is determining how to bring together multiple IT systems and technologies that support divergent processes and policies into a seamless and integrated environment. Deciding on which technologies to retain, which to integrate and where new investment is required to support the new business entity can be a lengthy and very costly transition process.
BRIGHT OPPORTUNITIES FOR M&A As long as India continues to witness a strong domestic economy and trends that enable increased globalisation, exciting growth opportunities can be expected. It will lead to various M&A that will provide an avenue to access the markets and tools required for sustainable growth. Effective merger planning and execution will demand greater attention as deals are increasingly cross-border in nature, involving unfamiliar markets, varying regulatory regimes and a mixture of cultures & languages. As the trade gurus predict, Indian supply chain businesses of the future will have well-honed expertise in cross-border acquisitions and integration, as well as a robust, flexible operating model. nisi.rath@network18publishing.com (With inputs from CIBER)
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Image Courtesy: Smartplanets
SPECIAL FOCUS MODERN WAREHOUSING
Turning over a new leaf in
Warehouse Management Managing an efficient global warehouse and distribution system is a key part of supply chain activities. With the advent of modern warehousing, the intelligence of storing and distributing has completely changed. The aura of hand picking/handling of goods within a warehouse, extra manual checkups for security and safety purposes is bygone and the new age of modern warehousing management system is leveraged with forklifts, robotic arms, EDI, pick by voice system and video documentation for safety & security with automatic alarm activation offering value-added services such as ticketing, labeling and kitting, among others. SUPRITA ANUPAM
THE capability and process of turning data into information and then into knowledge—what we call business intelligence—has changed the image of logistics and the Warehouse Management Systems (WMS). The right blend of business intelligence and human resource has made WMS efficient enough to understand customer needs, customer decision making processes, competition, industry conditions and general economic, technological & cultural trends. This new WMS was found radically different from the older one and was better known as Modern Warehousing Management System (MWMS). Jensen services recently adopted PathGuide latitude MWMS to
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enhance its performance. Doug Miller, President, Jensen Distribution Services, stated, “The first phase of this project alone resulted in a
21% increase in employee efficiency and a 53% reduction in receiving errors. With the new WMS installed and quickly adopted by our staff, we are now providing a higher
MODERN WAREHOUSING: SALIENT FEATURES Physical infrastructure of racking, pigeon holes, cage bins, mezzanine floor, dock levelers, forklifts and stackers IT systems from WMS, handheld scanners and Electronic Data Interchange (EDI) capability Well documented and refined processes for receipt, auto handling of put away, picking, documentation and shipping Value Added Services (VAS) such as ticketing, labeling, kitting, returns, POP display Building, enabling back-end support to the customer Coordination between suppliers and end customers
WMS VIDEO DOCUMENTATION FOR THE HIGHEST SECURITY AND MAXIMUM TRANSPARENCY Tracing of all goods movements and exact cause analysis Permanent revelation of damages Saving potentials for insurance fees and consecutive costs Reliability in goods handling Increased warning and theft prevention Low effort for control and conservation of evidence Short reaction times for customer inquiries level of customer service and our efficiency continues to improve.”
INTELLIGENT WAREHOUSE ADMINISTRATION SERVICE SYSTEM The Warehouse Administrative Service System (WASS) is a computer programme that manages all the data entries, records, compilation, total inputs & outputs and operationability in different modes enabling greater flexibility and greater room for new supply chain technologies that are changing very fast. In short, WASS supports all the six main functions required in warehouse administration: goods inward, goods replenishment, picking, packing, loading and inventory control. Partner Logistics with Wisbech and Gloucester warehouses—UK’s largest deep freeze warehouses with capacity of 77,000 pallets & 72,000, pallets, respectively, employs one of the best WASS for which it got the BRC certification. Commenting on the same, Jon Miles, Head of UK Operations at Partner Logistics, said, “Achieving this accreditation ensures best practices in handling, storage and distribution of products, reflects a wide range of operating procedures including quality control, site environment, management & training and ultimately provides both existing and prospective customers with the
confidence and reassurance that the highest quality standards are being met and maintained at all times.”
MODERN WAREHOUSING SYSTEMS: SERVICE ORIENTED ARCHITECTURE The architecture of the modern warehousing systems is based on the Business Performance Management (BPM) approach where BPM can be defined as a set of processes that help organisations optimise business performance by encouraging process effectiveness as well as efficient use of financial, human and material resources. The approach guides in developing the right architecture in a more efficient way when compared to the traditional one. It links all the outward nodes of warehousing to the necessary SCM and other warehouses’ peers with more flexibility, transparency and cost effectiveness. The approach also guides the necessary changes in WASS. In India, though very few warehousing management systems are based on service-oriented architecture, the advent of bigger players and further collaboration and acquisitions by big domestic players like VRL and Gati have galvanised the rate of adaption. The recent modern warehousing management systems such as LFS 400 and WMS lite have been totally
PICK BY VOICE APPLICATIONS ALONG WITH RFID SUPPORT Free hands for the picker, the work flow are not interrupted Increase in picking speed of up to 50% High picking accuracy and quality Simple handling and high user acceptance The combination of pick by voice and RFID reader reduces the manual Work steps in picking and increases working speed and accuracy
developed based on Service Oriented Architecture (SOA).
COST TRANSPARENCY AND RESOURCE DEPLOYMENT One of the biggest benefits of the MWMS adoption is increased transparency and efficient resource deployment. With live video documentation, clients/suppliers can check the condition of the goods within the warehouse at any time through mobiles accessing the internet. This brings much more reliability, while the pick by voice makes the right resource deployment using automatic robotics arms and forklifts making the warehouse more space efficient. Here, machine accessibility to the goods saves the extra manual handling space needed within the warehouse. Being more machine dependent, MWMS standardises the cost as per the resources deployed at each layer and avail the cost calculator of the site maintaining high transparency.
INDIA YET TO SEE FULL-FLEDGED MWMS Indian Logistics Service Providers (LSPs) have, so far, partially implemented MWMS due to various reasons. The main reasons behind it are land acquisition at the right location, weak spatial linkage to market and production, high cost variation across the land and weak public policy aimed at facilitating the operational efficiency of the W&D sector. This is why, governmentapproved foreign direct investments in the W&D sector much before the announcement of introducing the same in retail. No investment could actually gain ground. Lack of MWMS and its even distribution across the country causes problems in meeting the exact customer requirements, higher flexibility, central software installation, pick by voice and video documentation facilities. suprita.anupam@network18publishing.com
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SPECIAL FOCUS INFRASTRUCTURE BOTTLENECKS
Impeding the GROWTH
of ambitious India DFC and DMIC are two of the most ambitious infrastructure projects ever undertaken in independent India. The implementation of these two projects is expected to open up huge opportunities in terms of improving industrial output, ensuring less transit time, allowing speedy movement of freight, lessening dependence on roads, supporting higher increasing trade, etc. However, some of these projects have to face various challenges in terms of land acquisition, environment & forest clearances along with a long list of approvals from various government agencies. Initiatives like the formation of one central agency for quicker clearances & approvals, changes in bidding process, along with formation of SPVs for important projects along with security to investors, can play a vital role in encouraging the development of more modern and sustainable infrastructure in the country. ARINDAM GHOSH
INDIA is one of the fastest growing economies in the globe and the Indian logistics sector is expected to witness a consistent yearly growth of around 10% during the next 10 years. In addition, India’s international trade is growing annually at 10–12% and so, developing modern and sustainable infrastructure has become very critical for the country. Projects such as DelhiMumbai Industrial Corridor (DMIC) and Dedicated Freight Corridor (DFC) will weed out inefficiencies in transport and logistics and will significantly contribute to the competitiveness of the industrial output. Speaking from the logistics perspective, RK Sharmma, MD, Vaibhav Freight Logistics Pvt Ltd, explains, “The government needs to take up initiatives for ensuring timely implementation of these infrastructure
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projects as this will help build investor confidence, especially that of the foreign community, and will be critical to support the increasing trade.” In a bid to augment the rail transport capacity to meet the growing requirements of freight traffic movement, Indian Railways plans to develop a DFC along its busy trunk routes. Commenting on the importance of DFC, RK Gupta, MD, Dedicated Freight Corridor Corporation of India Ltd (DFCCIL), expresses, “These corridors will result in addition to the Railways’ transportation capacity and improve efficiency of rail transport, which will have a major bearing on the logistics costs of the economy.” However, Sharmma cautions that if there is any delay in the implementation of DFC,
roads will continue to carry the burden of freight and with the increasing volumes of cargos, current dependence on a single mode of transport like road is not sustainable.
IMPACT OF DFC & DMIC The establishment of infrastructure projects like DFC and DMIC will bring in a revolution as far as the movement of goods is concerned. Highlighting some of the key features projects like DMIC, Amitabh Kant, CEO & MD, Delhi-Mumbai Industrial Corridor Development Corporation Limited (DMIDC), states that these projects have the potential to double employment in seven years; triple industrial output in nine years and quadruple exports from the region in 8–9 years. Kant
adds that in case of DMIC, given that this project connects both Delhi and Mumbai it will come as a boon to attract investments. Elaborating further, Gupta states that the average speed of movement of the freight would be increased to 70 kmph from the present 25 kmph. Additionally, it will significantly reduce the transit time and the clearances will be much faster. Further, special wagons that have high carrying capacities from the current ones will be introduced. This will ensure that the asset utilisation is higher and will open up huge business scope for all stakeholders. He adds that the implementation of DFC is expected to generate the following two major impacts on the freight movement: • Shift of freight from road and low carbon intensive mode rail transport • Improvement in energy efficiency of freight rail through adoption of improved technologies
CHALLENGES FACED AND INITIATIVES TAKEN With the rapid growth of the country’s economy in recent years, the importance and urgency of removing infrastructure constraints have increased. Charting out the challenges for such ambitious infrastructure, Richard Rekhy, CEO, KPMG, explains that land acquisition is a major problem when it comes to big projects. In agreement, Gupta elaborates that like any infrastructure project, land acquisition was a major problem. However, over 75% of the land required for the corridor—which has a total length of 10,000 km—has been acquired. In order to tackle this challenge, Gupta says that there was an amendment carried out in the Railway Act in 2008—known as Railway Amendment Act—under which if the ministry declares some projects as a special project, the land acquisition can be done for the project without the involvement of the State Government, whereby “institutions like us can become land acquisition officers by special orders.
We adopted a hybrid model where we have taken the land acquisition officer from the State Government, which is nominated by the concerned it.” This makes the job easier, he adds. Another major bottleneck is the issue related to environment and forest clearances. Here, both Rekhy and Gupta point out that the lending agencies for the project “are very sensitive to the environmental issues.” As part of the initiatives to tackle this challenge, “we have taken IFS personnel who can guide us and look into these aspects. The move has allowed the agency to make good progress on this front.
MORE EFFORTS REQUIRED The big opportunity for India’s growth lies in infrastructure. If India has to grow, it has to take strong steps towards developing state-of-the-art infrastructure. According to Kant, “For infrastructure, the interest rates are very high. We have to understand that infrastructure takes a long time to break even and they are back-ended in nature.” Further, given that the
It is critical for India to assess important infrastructure projects based on the life cycle cost of technology and not merely on price. funding in these cases is huge, certain mechanisms need to be developed, which will ensure security and give investors confidence. Commenting on the Japanese investments in the country’s infrastructure projects, he says that the Government of India and RBI went out of the way to solve all these issues for JBIC & its investors and it gave them confidence. Additionally, Rekhy points out, “We have these government tenders, which are primarily driven by the lowest cost, which needs to be changed, if we are looking at developing modern infrastructure projects.” A mechanism needs to be developed
whereby the contract is given based on the quality and not on the lowest price. These moves will ensure that infrastructure projects remain sustainable, he adds. Given that there are a lot of approvals and clearances required, especially obtaining them from the central and state governments is a huge task, there is a need for the establishment of a ‘one-central agency’, which can issue a common set of guidelines required to begin an important infrastructure project. Seconding his thought, Kant says that it is not good to work around the framework of lowest cost, when it comes to bidding. It is important to work around technology as the infrastructures are developed under a long-term horizon. Kant explains that it is critical for India to assess important infrastructure projects based on the life cycle cost of technology and not merely on price.
WHAT THE FUTURE HOLDS? The future in terms of infrastructure looks bright, which is critical for India to achieve high growth and support its growing economy. As far as the latest progress on these two infrastructure projects is concerned, in the case of DFC, the phase 1 project will be completed by 2016, but there will be phased completion of certain segments of the project between 2013 and 2015. On the other hand, the authorities from DMIC have completed all the master plans and have got the approvals; the land acquisition process is in various stages, in Gujarat and Maharashtra and the progress has been good. It is expected that in 2019, DMIC will be operational, initially in Gujarat and Maharashtra. However, delivering good engineering capabilities with the usage of latest technologies along with better planning and programme management is essential to develop and create next generation infrastructural facilities. arindam.ghosh@network18publishing.com
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SPECIAL FOCUS INDIA: A LOGISTICS BASE
The fast growing Indian market has created a plethora of opportunities for major international players; these players have also contributed towards shaping up the logistics industry in India. For the period 2010–20, the Indian logistics market is likely to witness consistent growth of 8–9% every year. Here’s taking a look at the major international players’ growth, best practices, opportunities and challenges… NISHI RATH
THE retail boom has led global players catering to various industries to make a beeline to India. According to industry experts, international players have been conducting studies to invest in India in the recent times. “With global companies eyeing the Indian market, the future of the Indian industry is bright. They will bring world-class technologies and standards to the Indian industry,” informs an analyst on condition of anonymity. Various global giants have already carved a niche in the Indian market, and taking a cue from them, many more are eyeing the growth opportunities in India. Here’s taking a look at some global companies that have set up their logistics base in India... McDonald’s McDonald’s India has pioneered the cold chain management system wherein the freshness, crispness and nutritional value of vegetables and processed products are retained. The QSR major has been working with Radhakrishna Foodland as their
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distribution partner. From July 1993, much before McDonald’s started its operations in India, sincere efforts were made by Radhakrishna Foodland to carefully understand McDonald’s operations and requirements for the Indian market. Better facilities and infrastructure were created and new systems were adopted to satisfy McDonald’s demands. The division has focussed all its resources to meet McDonald’s expectation of ‘cold, clean and on-time delivery’. The company has also invested in ERP software to bring efficiency, speed and accuracy into the system. Foodland is the first Indian company—that is engaged in such a business—to have customised software for smoother operations. Dow Chemical Dow Chemical’s presence in India began in 1957 with the Polychem Ltd joint venture. Over 50 years later, the company continues to thrive with its strong manufacturing presence and operations in seven locations across the
country. Over the last few years, the company has strengthened its market franchise in India by creating centres of excellence. These critical commercial and technical resources improve Dow India’s ability to serve the market while providing the company a strategic advantage globally. Tracking the supply chain of such a gigantic company was an enriching experience. The company’s strong global best practices, coupled with their interlinkages with the local demographics, has been one of the key differentiators for its supply chain excellence globally. Commenting on the criticality of the supply chain in Dow’s overall business portfolio, senior officials claim, “An efficient supply chain should address sustainability and effectiveness in five key areas, viz., safety, profitability, resilience, social responsibility and environmental efficiency. In line with this growth, Dow is advancing at both the global as well as local levels, thus setting the standard for sustainability
and driving it into the fabric of everyday operations.” According to Niklas Meintrup, Director – Asia Pacific Dow Business Services, Dow Chemical (China) Company Ltd, “Dow is a global chemical company, which has presence in almost all parts of the globe. This gives us an edge over others in managing global chemical supply chains. Having decades of experience, we believe that there has been a shift from long supply chains to a combination of local assets.” DHL DHL has been part of the industry for a long time now. In an ongoing effort to become more efficient with nature, DHL launched its action-oriented eco-friendly plans by introducing 250 vehicles that run on environmentfriendly Liquefied Petroleum Gas (LPG)—a first of its kind by DHL, throughout South Asia. DHL’s fleet of LPG vehicles aims to contribute towards reducing pollution in the cities. This will ensure that there is low carbon content and controlled emission of nitrogen as compared to petrol. The LPG engine emissions have 11–13% less carbon dioxide, 15–80% fewer oxides of nitrogen, 20–40% fewer hydrocarbons and 30–35% less CO. Recently, DHL announced an investment of over `680 crore in India as part of its expansion plan. The company will invest in developing an additional 5 mn sqft of warehousing space across India and eight worldclass multi-client sites across the country. Multi-client sites are largescale warehousing spaces at strategic locations to help different companies. It will also invest in improving its transportation business. Damco Damco, the $2.7-billion logistics unit of the AP Moller-Maersk Group, is working towards making it big in India and expanding its freight forwarding business. India contributes 5% to Damco’s total ocean and supply chain management volumes, and around 10% to its total global air freight volumes.
India is up for a huge supply chain transformation. This would bring in global best supply chain practices, equipment and technologies as well as expertise to make a difference in the long run It has developed a portfolio of supply chain services, including the Supply Chain Carbon CheckTM and the Supply Chain Carbon Dashboard that identifies and tracks CO2 hotspots in the supply chain. Adding to the green portfolio, the company incorporated the Damco Packaging Optimisation Service in 2010; a service that can reduce the total logistics costs by 10% and, at the same time, minimise the environmental impact of the supply chain. FedEx As a continued addition to the FedEx service portfolio, the company acquired PAFEX in 2007; the logistics, distribution and express businesses of AFL Pvt Ltd and its affiliate, Unifreight India Pvt Ltd, in 2011. The FedEx envelope is embossed with the message ‘EarthSmart. FedEx carbonneutral envelope shipping’. It means that when you use the envelopes for all of your FedEx Express document shipments, you have the assurance that all CO2 emissions associated with your shipment will be offset at no extra charge. The carbon-neutral shipping of the envelope is one part of the broader FedEx sustainability programme, EarthSmart.
CHALLENGES FACED India’s growing population generates huge demand for both goods and services. To make operations costeffective and efficient, it is important to bolster the country’s logistics and ancillary infrastructure. “Foreign majors expanding their business in India seem to be taking time to change gears and make a difference for themselves or for the market. Indian companies have an edge in terms of expansion as their internal
process is faster and flexible when compared to the foreign companies. The future is definitely good for the users as they will have multiple options to choose the best service provider,” says Anil Seshagiri, Head – Strategy & Business Development, DelEx. However, according to experts, growth is hampered by several reasons, such as: • Infrastructure woes: India’s infrastructure is not as developed as that of other countries; many parts of India do not have roads. Hence, any supply chain strategy for rural retail and tiers II and III retail would need to take all these indigenous Indian factors into account. • Use of 3PL: The gap between the expectations and the actual level of services provided, and the prices charged by 3PLs are primary reasons why more companies do not outsource their logistics to 3PLs. Also, the present service levels of 3PLs leave a lot to be desired. • Supply base: Due to the fragmented nature of the supply chain in India, the players have to deal with a wide number of competitors. It leads to lower margins per level for the same amount of good being transacted. However, international players still hold a major chunk of the market share.
INTERNATIONAL STANDARDS FOR THE INDIAN INDUSTRY According to officials, India is up for a huge supply chain transformation. This would bring in global best supply chain practices, equipment and technologies as well as expertise to make a difference in the long run. Regardless of whether it is capitalising on global sourcing opportunities, taking advantage of private labeling strategies or tapping into the surging business and consumer markets of India and other developing economies, the entry of international giants is expected to bring about major changes in the Indian supply chain. nisi.rath@network18publishing.com With inputs from McDonald’s India
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SPECIAL FOCUS MODERN TRADE DYNAMICS
Modern day retail in India is classified by the growing awareness and brand consciousness among people across different socio-economic classes in India. The manner in which the urban and semi-urban retail markets are witnessing significant growth is of primeval importance to retail players. The growth of the supply chain for the modern day retail sector in India depends on the impact of the entry of global players into the Indian retailing industry. The strategies, strength & opportunities of retail stores, retail format in India and recent trends are imperative for this major boom to happen. PRATEEK SUR
THE Indian retail sector is an evolving market. In the next 4–6 decades, the sector is poised for a massive boom and will grow like no other sector, especially in the Indian context. Consumers will earn more by the day and the gains from this economic growth will be felt inclusively by every individual. To elaborate further, those falling below the poverty line will cross over and rise up to the lower middle class strata; the lower middle class would rise to upper middle class and upper middle class to high class. The high class will, in turn, attain higher affluence levels. The more the number of new retailers (especially foreign retailers) entering the market, the higher the chances of the market growing and the prices of products falling. As the prices decrease, the standard of living of the masses will start increasing. The more the retailers expand, the more the consumers’ buying patters would change and shopping habits would evolve. Retailers currently operating in the market, and those who plan to
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enter the market, will have sufficient time to understand local market dynamics, develop robust supply chains, establish formats and choose the right product assortment to meet the needs of diverse Indian consumers.
ASPECTS OF MODERN DAY TRADE The emergence of organised retail in India is one of the most important aspects of modern day India, especially in terms of the current economic situation. Amidst tough economic crisis and in a recession prone world, the retail business is poised for considerable growth, which would be faster than the other sectors. Major industrial houses have started getting into this field and are announcing their future expansion plans. Global conglomerates are also in the quest of coming to India and setting up their retail chains in the country. Many of these are coming up in collaboration with major Indian companies. However, the opinions of industry experts vary with regard to the impact of the growth of organised
retail in India. While some are of the view that the rise of organised retail will adversely impact retailers in the unorganised sector, others feel that the growth of organised retail would yield efficiencies in the supply chain. This, in turn, would enable better access to markets for farmers and would ensure that the profits are high for them and the prices for consumers remain low.
ATTITUDINAL SHIFT The Indian retail sector is ranked among the 10 largest retail markets in the world and the changing attitudinal shift in consumer behaviour has brought about the emergence of organised retail, which has transformed the face of retailing altogether in India. With the sign of reemergence of economic growth in India, consumer buying in the retail sector is being projected as a key opportunity area. Logistics players try to analyse finer tactical viewpoints for the Indian retail sector and propose counteractions so that corporate strategists could incorporate the same—
both qualitatively and quantitatively.
ORGANISED VS. UNORGANISED RETAIL International: In developed nations, organised retail ranges between 75% and 80% of total retail. Contrarily, in developing nations, the unorganised sector rules the roost. The market size of organised retail varies from 1% in Pakistan and 4% in India to 36% in Brazil and 55% in Malaysia. Contemporary urban retail market formats like hypermarkets, superstores, supermarkets, discount and convenience stores are present in the developed world. On the flipside, such forms of retail outlets have recently started spreading to developing countries. In developing countries, the retailing business continues to be dominated habitually by familyrun neighbourhood stores and open markets. As a corollary, wholesalers and distributors, who carry items from industrial suppliers and agricultural producers to the independent family owned shops and open markets, remain a vital part of the supply chain in these nations. Domestic: Indian retail is largely dominated by small retailers mostly consisting of the neighbourhood kirana stores, owner-manned general stores, chemists, footwear shops, apparel shops, paan & beedi shops, hand-cart hawkers, pavement vendors, etc. These collectively comprise ‘unorganised retail’ or the traditional retail. In the past 11–12 years, customers have observed the entry of numerous organised retailers in the market. They have been inaugurating outlets in a variety of up-to-the-minute format, mostly in metros and other important cities. However, the net share of organised retailing in the total retail business has, still, remained low.
NUMBERS SPEAK On one side, the total retail sales in India have increased from `10,591 billion (US$230 billion) in 2003–04 to `14,574 billion (US$322 billion) during 2006–07 and to nearly `21,000
billion (US$381 billion) by 2011–12, which is at a compound annual growth rate of about 11–13%. The organised retail sales increased at a much faster pace. “It grew to about 20–23% per annum from `350 billion (US$7.6 billion) in 2003–04 to `598 (US$13.2 billion) during 2006–07 and to almost `1,174.02 billion (US$21.3 billion) by 2011–12,” informs Nirupama Soundararajan, Professor and Research Associate, ICRIER, in a report. This shows that the share of organised retail in the overall gross retail has grown, although leisurely, from 3.3% in 2003–04 to 4.1% during 2006–07 and to almost 7.1% in 2011– 12. Food and grocery make up the lion’s share of Indian retailing. The share was almost about two-thirds in 2003–04; it has gradually shown a declined to about 60% during 2006–07 and to approximately 51% in 2011–12. Clothing & footwear, which shared
Organised retailing has materialised as one of the hyper-dynamic and fast-paced industries with many new players (especially the foreign players), entering the market. about 7% of the retail market in 2003– 04 and that grew to 9% during 2006–07 and approximately to 11% by 2011–12, follows next. The next large market share is of non-institutional healthcare. “This has shown a snail’s pace reduction from 9% in 2003–04 to 8% during 2006–07 and to almost 6.5% by 2011–12. Furniture, furnishing, appliances and services are the next in line, whose market share grew from about 5% in 2003–04 to 7% during 2006–07 and to approximately 10.5% in 2011–12,” adds Sanghamitra Sahu, Professor and Research Associate, ICRIER, in the report. Last, but not the least, the section comprising of jewellery, watches, etc. contributed about 6% of total Indian retailing during 2006–07, which increased from 5% in 2003–04 and presently stands
at approximately 9% by 2011–12, the report states.
ORGANISING THE UNORGANISED SC Organising the retail sector is going to uplift the condition of the logistics players in the game. The supply would be easier, faster and, in all cases, better in quality. The more the supply chain is organised, the higher are the chances of farmers getting their due. The middlemen will get evicted from the business and the customers will be able to avail of reasonably priced products. This would ensure that the supply chain is devoid of the lags and delays caused due to stockings and hoardings. Thus, the supply chain would function smoothly and would accommodate the unpredictive fluctuation of inflation.
CHALKING OUT A FUTURE Organised retailing remains low in the share percentage when compared to the gross retail sector. Although its share is considerably large in some sectors, in others it is relatively low. Some of these categories include clothing and footwear, which has a share of approximately 19–22%; the category comprising of sports goods, entertainment, equipment and books has a market share of approximately 12–16%; and lastly, the category comprising of furniture, furnishing, appliances and services, has a market share of approximately 10–13%. Contrastingly, the contribution of the organised sector in the biggest retailing sector—food and grocery—even though on the rise, remains just below 1%. In the recent years, organised retailing is growing, which can be estimated by the increase in the number of shopping malls in every city. The rising number of modern retail formats is also another indication of the same. Therefore, the future for the retail sector seems to be bright and it is progressing at a very fast pace. In years to come, FDI and the organised sector would be the prime agenda of every retail summit/meet. prateek.sur@network18publishing.com
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SCM TRENDS PACKAGING LOGISTICS IN CARGO
A safety mechanism for products Enhancing productivity and minimising losses in the supply chain are the ultimate goals of every cargo company. Helping these companies achieve the same are protective packaging solutions. These solutions not only help smoothen the logistics process but also protect products from external damages, thereby reducing costs. While packaging logistics is still at a nascent stage in the country, the scope of this segment is accelerating it to new highs. IN today’s progressive world, the need for innovation in any form to increase the value of products is always a continuous and challenging task. Supply chains are more focussed on reducing costs, which, in turn, generate further scope for development. The supply chain is evolving in a new dimension by adding various functions that directly impact its cost. Similarly, the freight industry is also continuously looking for new developments in terms of handling products at the distribution and transit levels as well as at the product innovation/design levels.
WHAT IS PACKAGING LOGISTICS?
Illustration By Sanjay Dalvi
Practitioners define packaging logistics as: “The process of planning, implementing and controlling the coordinated packaging system of preparing the goods for safe, secure, efficient and effective handling, transport, distribution, retailing, consumption and recovery, reuse or disposal and related information combined with maximising
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consumer value, sales and profit.” In India, packaging logistics is a niche segment and is still at a nascent stage. While packaging and logistics professionals are of the view that it is an ‘under-estimated area’, it is identified as the segment which is slated for growth even though it is currently dominated by small and medium players. During the last decade, packaging gained a significant position in the entire logistics framework. And with the cargo industry realising its imperativeness and benefits—viz.; they help shippers/transporters protect products from adverse conditions and reduce the bulkiness, thereby reducing logistics costs—the segment has received an additional boost. To substantiate the same, there
is evidence to prove that import duties in the cargo industry shows are calculated/derived based on packaging and not purely on the weight of the goods.
THE EVOLUTION… Packaging has evolved from the primary level (only consumer products) to secondary (multi-products and distribution packaging); now, a tertiary level is also emerging in the industry. The tertiary level is principally revolves around transportation packaging (to manage the entire logistics operations through better packaging systems). According to field research reports,unit adaptability is the most important
factor for efficiency along with the stack ability as both have a direct effect on the transport costs. In some countries, customs charge the duties based on the cargo weight inclusive of packaging and this attracts the potential field’s attention too, though the practice is to charge based only on the weight in some other countries. Further research shows that the weight and height of packaging are the factors to watch out for, in relation to transport cost,
efficiency, volume and area utilisation in the transport vehicle which is directly linked with pallet utilisation/ adaptability. Therefore, Indian industries should understand the need to associate with the packaging industry as it has a huge effect on the product as well as supply chain design.
NEED FOR COLLABORATION At the global level, there is growing realisation on the importance of logistics knowledge for the packaging designer and vice versa. Further, the industry is calling for a new mantra— collaboration. However, the question is who will coordinate with the packaging industry? Is it the manufacturing/production or the marketing department? Industry professionals should acknowledge the fact that there is a need for the packaging segment to collaborate with the logistics department to find newer avenues of packing products— with the aim of keeping the product characteristics intact during transit. It is high time we re-strategise ourselves to make our industry more sustainable.
INNOVATION & SUSTAINABILITY The research conducted by logisticsbased institutions is essential for finding innovative and feasible methods of packaging that are sustainable and eco-friendly. At the global level (for instance, in Lund University, Sweden), certain institutes have recognised the importance of the field and bring notable outputs in this area, which are aimed at better product handling during logistics operations with packaging and cost control. This leads to find innovative ways to protect the products from potential damage during rough handling/weather conditions and other means during transit. In India, notable contributions have been made by institutions like Indian Institute of Packaging and other leading supply chain management/ engineering schools are slated to
trigger their research in this area during coming years. It is the right time to introspect and re-engineer the entire strategy for innovations in the packaging logistics field with a new objective for the desired results.
A POTENTIAL FIELD OF OPERATIONS According to a micro-study conducted by our institute, it has been concluded that the packaging industry on the whole has not been given
According to field research reports, unit adaptability is the most important factor for efficiency along with the stack ability as both have a direct effect on the transport costs. due importance from the logistics perspective; instead, it has been given prominence in marketing. The feedback also demands recognising other important domain called ‘Design for Logistics (DFL)’—which is more of a collaborative design effort to improve the logistics efficiency of a particular product. However, it appears that this responsibility lies with product designers and not with packaging professionals. There is good scope for research to establish the facts to support how the Indian product innovators can take the inputs from their packaging service providers to have a tight control on the product cost by controlling other factors too such as sustainability, etc. This will ultimately help to make it highly appealing to the customers especially because the industry is moving towards a customised era. On the other side, introduction of new standards for packaging on the global level also make the field more challenging. The industry is also introspecting on the due weightage from their cargo handling companies despite being well aware of the fact that this industry can play a vital role in terms of storage,
transport and cost reduction. In the global context—both in sea and air logistics—it plays an inevitable role in saving costs in terms of reducing the storage as well as the packaging material costs. In the western world, organisations like IKEA, have started emphasising on packaging for logistics as a value adding activity of the business performance, as it has provided a positive contribution to their business’ bottom line. However, the Indian industry is slightly reluctant in terms of accepting the packaging segment as its potential partner in the entire supply chain. Also, industries that are less aware about how to handle the right packaging materials with respect to cargo handling. Also, the partners at various echelons in the supply chains need to have complete awareness about the possible avenues of development. It is the right time for Indian logistics players to start working on potential research involving packaging companies to improve the performance of the logistics function. There is a huge scope for the potential results in terms of new methods of packaging as well as new materials involved in the process, as it is currently not triggered by logistics companies, but is handled by the product owners/buyers. The cargo industry should also focus on the system of interaction between the packaging engineer and logistics professionals rather than allowing them to operate individually. Further, the industry needs to recognise packaging logistics as a potential field of operations which has a direct impact on the supply chain performance. Venkatesh VG is a faculty at Symbiosis Institute of Operations Management (SIOM), Nashik Campus. He specialises in Supply Chain Management and Logistics. He is a chartered member of The Chartered Institute of Logistics & Transport (CILT) & APICS (USA). He can be contacted at vgv1976@gmail.com
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CASE STUDY SEQUEL LOGISTICS
Using ERP to create a functional
synergy
It is extremely important to identify the key pain points and the benefits that the organisation seeks to eliminate and gain, respectively. Sequel Logistics adopted this philosophy when it faced the challenge of information available at multiple island systems, with no seamless integration across these systems. It was only through a hands-on approach towards the implementation of ERP and close monitoring of the progress made that the firm was able to streamline some of the processes, and create a synergy across various functions. SEQUEL Logistics is a supply chain management company that specialises in providing comprehensive solutions, services & products in the ‘critical logistics’ segments. Over the years, Sequel has developed unique capabilities, infrastructure and the knowledge base needed to efficiently manage the supply chain of vulnerable and sensitive products. With constant engagement and collaboration, Sequel helps in building a reliable and nimble supply chain solution, unique to its client’s offering. Sequel has successfully modelled its service offering in niche & highly specialised segments, targeted around its own core capabilities. In the identified critical logistics segments, Sequel offers the widest reach within India, through its own, dedicated and direct network. Internationally as well, Sequel reaches all major countries across the globe, ensuring seamless connectivity and movement.
ROADBLOCKS ENCOUNTERED Sequel Logistics was facing the typical challenge of information available at multiple island systems, with no seamless integration across these systems. This often meant mismatch in data and multiple data entry requirements, leading to issues of data integrity and lower productivity. The idea to move to an integrated ERP platform was initiated by the top management team, considering the growth in business and the corresponding growth in the transactions. The objective was to seamlessly connect sales & marketing, operations and finance operations, thereby improving
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accuracy, speed and productivity.
EVALUATION AND IMPLEMENTATION PROCESS... Once it decided to go in for an ERP system, the team first listed the key requirements and outcomes that Sequel Logistics wanted to obtain from such an ERP system. Few solutions were looked at, with a key focus on the ERP being able to deliver the outcomes, apart from the robustness of the system as well as the company providing the solution. The evaluation was done internally by the Head of IT and the COO, which included multiple rounds
CHALLENGE Sequel Logistics was facing the typical challenges of information available at multiple island systems, with no seamless integration across these systems. This often meant mismatch in data and multiple data entry requirements, leading to issues of data integrity and lower productivity. SOLUTION SAP ERP was implemented. This has helped streamline some of the processes, and bring in synergy across various functions. With the integration, it is now possible to achieve much better efficiency and productivity from the system, overall. of discussions. Feedback from their existing customers and the strength/ capability of the implementation partner was also a key element in the decision making process. The implementation was done by Yash Technologies, who is an authorised SAP implementation
partners. Sequel first started planning the project in February 2012 and Project ‘SAPPHIRE’ was conceived. The team consisted of core team members from each department and was driven strongly by the company’s senior management team. The hardware sizing was done jointly by SAP, Yash Technologies and Sequel IT team. Sequel has used the cloud architecture and hosted SAP out of SIFY datacenter in Bengaluru, which provide high uptime to the application. The Central Bandwidth as well as the depot bandwidth were upgraded to ensure that end users received a good response on application. SAP India supported Sequel as well as Yash Technologies throughout the project till Sequel went live on all applications. This project was implemented in a record time of six months.
END RESULTS The SAP ERP implementation has helped in streamlining some of the processes, and in bringing in the synergy across various functions. With the integration, it is now possible to achieve much better efficiency and productivity from the system, overall. The key lesson learnt is that, while implementing ERP solutions, the organisation should also be open and flexible to change some of the internal processes as per the best industry practices. This not only helps in reducing the customisation but also in improving the internal processes. Compiled by Kimberley D’Mello with inputs from Rajkumar S, COO & Director, Sequel Logistics Pvt Ltd
FORKLIFT IN WAREHOUSE WAREHOUSING & DC
The lift trucks (forklift) of the present day offer more power, performance and technology than before. Forklifts are a critical element of warehouses and distribution centres. It is imperative that these structures are designed to accommodate better efficiency and safety towards the work environment. In the case of Drive-in/Drive-through Racking, they need to travel inside a storage bay that is multiple pallet positions deep. It helps to place or retrieve a pallet even in such situations. Oftentimes, the drivers are guided into the bay through guide rails on the floor and the pallet is placed on cantilevered arms or rails. These maneoeuvres require well-trained operators. Since every pallet requires the truck to enter the storage structure, damage is more common than with other types of storage. In designing a drive-in system, dimensions of the fork truck, including overall width and mast width, must be carefully considered. The most recent advancements offered in today’s lift trucks are imperative for the betterment of any warehouse or distribution centre. PRATEEK SUR
OWNERS of yesteryear lift trucks may be astonished by the technologies being offered today. The advancements comprise of things from ergonomic enhancements for operator ease to completely automatic lift trucks that function just like an automated guided vehicle (AGV). Although not all changes are as revolutionary as altering a lift truck into an AGV, without unsettling operations, the new lift trucks have to go into the operations of the shop floor. The fundamental lift truck still stays as the moral fibre of most manufacturing plants, Distribution Centres (DCs) and warehouses. Some of these evolutionary changes are consequential in building trucks that are more prolific, smarter and dependable. Here are some of the recent advancements that have come up for lift trucks:
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trucks as companies such as Crown, MCFA, Toyota, Nissan and Raymond have brought forward their own well-equipped lift trucks that can also function as AGVs. One such recent advancement was made by Raymond, which has brought in an automated lift truck that has features such as an integrated camera-based navigation system (initially developed by Seegrid). The rationalisation for computerisation is simple—labour is very costly.
AUTOMATING LIFT TRUCKS
Mechanisation has come a long way in the field of lift
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Forklift in warehouse, continued
Considering the life of a lift truck to be five years, the labour force represents almost 70–75% of the gross expenditure. Companies, like Raymond, are of the opinion that if a company is not able to increase their labour force, they would have to spend extensively on automating their lift trucks.
BRINGING RFID TO LIFT TRUCKS Coupled with mechanised and well computerised lift trucks, forklift makers nowadays are exploring semi-automated solutions. In a recently announced partnership with Jungheinrich, MCFA has come up with an RFID- and transponder-based technology. A simple solution has been found out which helps the navigation system to know where the truck is at any point of time. This is done mostly by the GPS system located inside the trucks, which works on the basis of encoders and transponders in the floor and RFID tags at the pick & pallet locations. As soon as the order is picked up, the truck measures the most competent way to pick the orders. The system also measures the lift and drive speeds that are most fruitful for the process. Such a lift truck will be the best for locating the pick up and drop location without being manually guided. The RFID tags would provide the locations and the operation would be fully automated. MCFA is also trying to fit in transponders and various other sensors on the lift trucks, which would help it ensure better safety during its operations. As in the case of a man-up truck, the sensor monitors what lies in front of the truck at the wheel base level.
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REMOTE-CONTROLLED LIFT TRUCKS Crown has also developed fully computerised and semi-mechanised solutions that try to bridge the gap between conventional lift trucks and AGVs. This is a remote-controlled vehicle for order picking. In such an order, the company gets to pick the assignment and drive the truck into a pick zone. Once done, the operator transports the truck from one point to the other using a remote control device. This reduces the time habitually spent on the lifting on the trucks and getting it off from the trucks. By using remote-controlled trucks, many logistics players are trying to bring functionality to the already existing truck.
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LIFT TRUCK, PHONE HOME There is a new term that the industry is using more often nowadays—telematics. It is the combination of telecommunications and data collection technologies, which presently include sensors and RFID. Telematics allows the lift truck to gather data about all the processes of the truck. It also helps in bettering the performance of the user and thereby correspond that data on record. The onboard computer on a Raymond lift truck, for instance, has the ability to send fault codes and
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the serial number of a truck by e-mail to a technician’s smart phone or computer. This allows any technician to analyse any given truck problem and accordingly bring the tools, parts and components they need for any specific job.
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INTEGRATING THE LIFT TRUCK WITH WAREHOUSE MANAGEMENT SYSTEM
The data gathered by telematics sensor systems is used to sustain preservation and manage the initiatives taken by the workforce. Integrating telematics with a Warehouse Management System (WMS) is the obvious next choice. This amalgamation would invariably permit the lift truck’s data to be a part of the workflow of a warehouse or the DC.
THE ERGONOMIC LIFT TRUCK The comfort of the task force and the job ergonomics has always been of prime importance to the European nations. The distributors and product makers usually maintain a warm vibe as an employer-employee. This mindset is starting to percolate and permeate in the facilities of the other nations; that is where the new age technologies are helping. Seeing the rising demand of the European trucks, the other nations are not ready to lay back and thus are working hard to bring their lift trucks to the European standards.
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FINGERTIP CONTROLS The new age lift trucks come with a varied range of multi-functional controls, which can be easily controlled by any user. This helps the user to increase and improve his/her ergonomics. With a single control, any user can work the lift of the forks, the tilt angle and the side shifter. The first continent where fingertip controls was introduced was Europe. In most nations, they are not popular as yet, but companies affirm that they are seeing a growing interest in this. The reason is simple—they provide a more ergonomic experience for the operator.
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SMARTER LIFT TRUCKS The future of lift trucks is going to be a truck that’s smarter, more ergonomic and flexible. Doosan, a few years back, had conceptualised a vehicle that runs on electricity and had displayed it for use at the British Open. The tinted interior glass is clean when using indoors; it also helps keep the sunshine and heat out at any given time of the day. As the forks are raised, the cabin rises slightly and tilts backward so that the operator can look up at higher elevations without straining his neck. Heads-up displays include graphics of the height of the forks, the weight of the load and the tilt angle. Lastly, the truck changes its CG and wheel base as and when required and this helps to elongate or retract the length of
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the wheelbase. The entire process depends on the size of the load and the operating environment.
INHIBITOR FUNCTIONS Inhibitors are intended to foresee the unsafe use of the lift truck for the user. These operations repeatedly lessen the frontward and backward travel velocity of the truck at diverse heights and routinely control tilt angles as well.
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pulled out, they start to turn on their own, which allows the user to maintain the forks straight until they have got them out of the pallet. This makes the items easier to stack in a narrow aisle and save on space thereby. The narrow aisle trucks often work in high-altitude stations. Landoll has added a low-cost camera system to provide visibility above 25 feet as well as software that can detect and display the height elevations in every row in a warehouse.
INTEGRATED SCALES GET ON THE BUS The lift truck industry is evolving from defensive preservation towards a more predictive maintenance strategy. With the CAN BUS system, companies like Landoll Corp are trying to get a two-way communication with the lift truck components. This would help companies know whether they are operating at a higher impermissible temperature. This also allows companies to take preventive measures so that they could react better to any unforeseen troubles.
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HYDROSTATIC DRIVES A huge chunk of the machinery used in the present day logistics is driven conventionally via usage of IC engines or battery power. Most of the companies are now more focussed on optimising the current designs, which would help the end user. This very effectively converts into hydrostatic drives that operate on the conversion oil flow. This also keeps a check on the pressure acceleration and deceleration that the lift truck needs in both directions. The advantage of hydrostatic drives is that there are no friction brakes, no mechanical transmissions, no drive shafts and absolutely no U-joints. This, in turn, allows the end user to eliminate the wear and tear in the drive system.
The multi-billion-dollar company, Burger King, formed its entire business by doing just as its customers wanted it to. A few months back, Toyota came up with an integrated forklift scale. It is a good example of a characteristic that was made keeping in mind a specific customer base. After its grand success, it is now an in-built option on the Toyota trucks. The scale lets the user evaluate and confine the weight of a load while lifting a pallet and loading it on a truck. Presently, this system saves data of about 350 loads that can be downloaded to an enterprise system. The company has also added the Bluetooth and Wi-Fi functions to automatically transmit the data.
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GETTING NARROWER IN NARROW AISLE In the present era, the more the storage space of the warehouse, the better it is and if it can be obtained at the same amount, then it is best for the logistics player. The warehouse should also not be very small or narrow. The concept of narrow lift trucks is also primarily new. Companies attribute this upgradation to the redesigning of their main articulation assembly. By doing so now, they get to have more number of trucks and the space is more, so workers do not have to work anymore in a compact and thinner shop floor aisle. The other aspect is that the trucks have a better design in the front so that they can rotate 2000 instead of 1800. When the forks are
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LITHIUM ION BATTERIES Jungheinrich has recently come up with a walkie for the European market which would be powered by a tiny lithium ion battery. This would be of the size of a briefcase that can be replaced by the user at any point of time during the usage. With most new innovative technologies, affordability is a prime issue as always; the cost per kilowatt hour is greater than a lead acid battery. Thus, better manoeuvrable trucks require the battery to be small and affordable.
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A HYBRID LIFT TRUCK Meanwhile, in Japan, Toyota launched a true hybrid diesel truck in an 8,000-pound capacity truck. This truck works on electricity. This is generally going to be used for applications like travel. The best advantage of this truck over the conventional ones is that it can automatically switch to diesel when extra power is required for an application. These batteries get automatically recharged when the truck is under diesel power. The design results in a 50% reduction in fuel consumption and emissions for Toyota because it does not consume electricity from the grid. Toyota is also under plans to introduce a propanebased indoor cushion tyre hybrid truck in North America. Propane, as fuel, sells the most in the US and Toyota is trying for such a design.
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prateek.sur@network18publishing.com
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WAREHOUSING & DC eCOMMERCE WAREHOUSE
Revolutionising Warehousing In a bid to facilitate smoother movement of products and services from suppliers to consumers, companies have begun to invest in new-age alternatives such as eCommerce Warehouse. Featured below are eCommerce Warehouse highlights that are slated to revolutionalise warehousing for the better. Growth
SKU Practices
Site
Today, eCommerce is witnessing 50–100% growth year on year. The scale up in growth is matched with the increase in the depth & width of the inventory held & sold to end customers. The warehouse or fulfillment centre needs to keep pace with such unprecedented growth and complexity. Hence, an eCommerce warehouse should essentially be at a separate location from a bulk warehouse.
With retailers looking to economise at every level, SKU rationalisation has been getting more attention. A good SKU system can help improve merchandising, reduce out-ofstock situations, prevent unnecessary excess in stock and even help in forecasting. A simple serial number or code can streamline the ‘pick-and-pack’ process. An inbound process involving SKU identification tags/stickers is an adopted practice in eCommerce warehouse, considering that vendor consistency to have the information on the product is not a prevalent practice. Therefore, to maintain throughput efficiency, it is best suited to have barcodes or RFID tags on the inventory at a unit level. In bulk warehousing, the information can be maintained & identified at case level and above.
The site identified for an eCommerce warehouse has to be extremely clean and dust free to reduce the bottleneck of packing operation—the last stage before outbound. Also, the vertical height utility is lesser as compared to a bulk warehouse and hence, a more lateral spread is required. The site needs to be in a location which is closer to the end user clusters. Bulk warehouses, traditionally, are positioned at the outskirts of a city. Given the logistics network, it is preferred to have a warehouse closer to the city.
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Warehouse Design
Picking Systems
Picking Method
The warehouse in bulk goods scenario is a ‘U-shaped’ warehouse, which has the best utilisation of dock resources (as the receiving and shipping can share the dock doors), facilitates cross docking with the receiving and shipping docks adjacent to each other and may be co-mingled. It also supports excellent lift truck utilisation because put away & retrieval trips are easily combined. The warehouse in eCommerce scenario typically uses a modular flow design, which is required for large-scale individual processes operations. Such warehouses are more lateral and the warehouse is defined into modules dedicated to specific order flows or item popularity designations. Hence, for such picking—a separate forward area which is compact and configured for a picking task—improves the productivity by 10–20 times as against what it would be in a large reserve storage area. For example, the warehouse is dedicated to continuous flow transactions on A/B items, regular flows for B/C items and slow flows for C/D items. The locating of inventory in an eCommerce warehouse is dynamic within a zone.
For a bulk warehouse, the types of storage are block stock, single deep selective pallet rack, double deep rack, drive in rack, drive through rack and push back rack. However, for an eCommerce environment, the picking systems cater to broken case pick operations. This is facilitated with deck shelving, bin shelving, modular storage drawers, carousels and mezzanine. The challenge in eCommerce warehouse, with high deck & bin shelving, is that the cube utilisation is low as compared to a bulk warehouse. As a result, a large floor space is required to store the products. Larger the area, the more is the travel time for the order pickers and hence, an impact on the labour requirement. This may be balanced with the storage drawers and carousel, which has high storage density. However, the high product mix environment may not support a higher ratio of such systems. The other increase in cost is arrived by usage of mezzanine. This improves the storage density. Nonetheless, it is sub optimal, if compared to a selective pallet rack used in a bulk warehouse.
In a bulk warehouse, the retrieval systems are supported with walkie stackers, counterbalance lift trucks, straddle reach trucks, side loader trucks, turret trucks, hybrid trucks and ASRS. The eCommerce environment may have selective MHE for bulky items. However, a majority of the picking is supported with cart picking, tote picking and robotic item picking. In warehouse order, picking is the highest operating cost unit (accounting for 50%).
Collated by Anand Balkrishna, Director – SCM BU, Bertelsmann Marketing Services Arvato India. He can be contacted at anand. balkrishna@arvatoindia.com
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AUTOMATION TRENDS DATAMAN® 200X
Offering Complete Automotive Part Tracking Complete traceability is a vital requirement of the automotive industry. In such a scenario, DataMan® 200X proved to be useful as it offered a fixed position reader which could not only cope with their high-volume production but also ensure that the complete installation is done within the specified time. variants MARKS Pryor Marking Technology • 6 Sigma read rates ~ 99.99% makes use of state-of-the-art availability technology for manufacturing a • Expandable system capacity ~ 700 variety of marking tools, viz., Pryor units/shift steel types, punches, automatic • Complete traceability through numbering heads, engraved packaging supply channel types, logotype marking dies and dot marking machines. Headquartered in Pune, its worldwide THE INTEGRATED presence widely caters SOLUTION The key advantage is that to diverse industrial At the marking it reduces the overheads segments such as station, the operator of many systems used automotive, auto loads the fuel in the factory and also ancillary, general injection channel on provides Ethernet engineering, defence to the fixture and connection to transfer and aerospace. clamps it with toggle. the data directly to the After giving the print factory’s server. command beneath THE TRACEABILITY
CHALLENGE Complete traceability is one of the vital requirements in the automotive industry. For this to happen, safety and quality control play a major role. One of the esteemed customers of Marks Pryor was looking at a traceability solution, which was promising enough to guarantee the quality of the newly added component as well as be able to trace the product from start to finish. The initial requirement was to mark each piece and then verify the precision of the quality of the marking. Subsequently, the marked parts would undergo another additional quality and safety control procedure before delivery.
CHALLENGES FOR THE CUSTOMER The customer faced these major challenges: • Timely installation • Process flexibility to handle multiple
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the marking head, the machine scenes the marking surface and slides in the opposite direction beneath the fixed mount camera. Here, the code is checked for quality parameters and is decamped. The key advantage is that it reduces the overheads of many systems used in the factory and also provides Ethernet connection to transfer the data directly to the factory’s server. Courtesy: Cognex Sensors India Pvt Ltd
KEY STRENGTHS OF THE DATAMAN® ID READER The customer requirement of accurate identification led them to Cognex image-based ID readers. Some key features of DataMan® 200X include: • A fixed position reader which could not only cope with their high-volume production but also ensured that the complete installation was done within the specified time. • The technical support by Cognex ensured timely installation and no time wastage. • Some of the other features offered by DataMan® 200X include C Mount lens options, various trigger modes and custom data formatting. • DataMan® 200X is selfcontained with patented ID Max and ID Quick decoding algorithms and reads even with variation in part appearance. It is omni-directional, for example, codes presented at any angle are readable even if there are variations in the part position which ensure almost 99% read rates of the product. • Another feature which is useful is that of the integration of the Cognex DataMan® 200X ID readers directly to the factory network with the Cognex Connect™ suite of supported Industrial Protocols. This meant that the PC was no longer required between the reader and the factory network. This provided complete traceability of the product throughout its supply chain.
SKILL DEVELOPMENT FOR MULTI-LOCATION SUPPLY CHAIN TEAMS STRATEGY
Equipping the supply chain with
Skilled Manpower The supply of skilled manpower to the logistics sector is a critical area, keeping in mind the manpower involved, distributed working environment, inadequate work done on the inventory of skills and lack of adequate and structured training infrastructure. Only a strategic, structured and comprehensive approach can make a meaningful impact on the improvement of logistics operations. The role of external partners having the right expertise in logistics, appropriate capabilities in building and delivering contents through multiple channels, having the infrastructure and technology are extremely important for sustainable development of skills. A recent announcement by the Central Government to allow FDI in multi-brand organised retail has created a storm in both political and business circles. There are different and conflicting views on whether it will benefit consumers, farmers and local producers. However, taking a cue from the developed markets, it is expected to improve supply chain and logistics, including cold storage, and broadly bring India further in tune with the 21st century market economy. It will save the 30–40% wastage of fruits and vegetables that we have been complaining about for many years. Apart from navigating through policy matters, organised retailers will face a huge challenge, viz., supply of manpower skilled in logistics and supply chain. Given the level of standardisation of processes and technology that the likes of Wal-Mart are known for, they will need to train manpower on their standard processes across all the locations. So, the skills challenge is twofold: • Finding sufficient supply of skilled manpower • Standardising the skills across multi-locations Other than organised retail, large 3PLs and corporates with national presence are already experiencing both
the challenges. For example, a 3PL company engaged in apparel supply chain would require manpower at their distribution centres that is skilled in cross-docking operations, using picking technology e.g. pick to light and WMS apart from the generic skills of inventory management and order fulfilment.
DEFINING SKILLS FOR LOGISTICS Logistics is one of the largest employers of people across the globe. It is estimated that it employs about 50 million people in the country. Logistics has been simplistically
associated with storage and transport. However, in reality, it is one of the most complex areas to handle. The complexity in the logistics sector has various dimensions: • Multiple entities involved in the logistics value chain e.g. suppliers, producers, consolidators, transporters, warehousing and
distribution service providers, freight forwarders, wholesalers/ distributors and CFAs • Complex networks, especially in India, due the ‘unfriendly’ logistics tax structure, resulting in a large number of distribution centres that result in inefficient logistics • Statutory needs, documentation and compliances involved in warehousing and movement of goods. A manager of distribution centre that ships goods to various states in the country should be skilled in not only managing inventory of goods but also managing inventory of road permits/ waybills forms that are different for each state—a rare logistics skill that only can be found only in India • I n a d e q u a t e infrastructure, multiple bottlenecks, congested ports, nakas and octroi posts are logistics managers’ nightmare. Despite so much fanfare about infrastructure spending, the fact of the matter is that infrastructure has not kept up pace with the economic growth. All this may sound rhetoric, but if you take a road journey from Jaipur to Delhi after 9 pm on the ‘Golden Quadrilateral’, you would understand what it means. Some may say that India is infrastructure deficient, but the truth is that we are an ‘infrastructure mess’. Due to these ‘India specific’ logistics complexities, it has always been believed that the skills required to
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Skill development for multi-location supply chain teams, continued
Table 1: Role - Warehouse Operations Level Warehouse Supervisor
Warehouse Manager
FMCG Sector (Food and Grocery) Automotive Aftermarket Sector Automated material handling; Palletised rack or block storage; assortments; sorting; pick & pack batch control; expiry management; HACCP; temperature and humidity operations; kitting; WMS, etc. control; cold chain; WMS, etc. Inventory management and control; health safety and environment; layout planning; performance management; taxation policies; compliances, etc.
manage logistics cannot be defined and can only be learnt with experience. The labour was available cheap and if there were inefficiencies, then more labour was employed or paid overtime. Most of the warehouse managers—whether working for an Indian or multinational company—end up working 12 hours a day and 6 days a week on an average. Though most of these complexities remain, there have been some developments that have made companies to review their approach to the logistics skills. These are: • Entry of large multinational 3PLs (and potentially the organised retailers) who believe in standardised processes, technology for efficient and reliable operations • Labour is no longer available cheap; therefore, automation and technology are replacing manual operations • The increasing competition in the marketplace and shortening product life cycles are forcing companies to shift focus from pure cost efficiency to speed and responsiveness. However, defining skills for logistics in its entirety is a daunting task. The skills in supply chain and logistics can be classified along three dimensions: • Role: Source, make, deliver, plan. Each of these roles could be further divided e.g. Deliver - warehouse operations, transport operations, order fulfilment, etc. • Levels: Directors, managers, executives, analysts, supervisors, operators • Sector: Automotive, chemicals, pharmaceuticals, consumer goods, etc. Skills become very specific and far too many at the operator level
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as compared to the manager or director levels. Also, the number of skilled people is higher at the lower levels. Let’s see an example of skills classification and comparison between two sectors in Table 1. Very little amount of work has been done in the logistics sector to define the competencies and skills for each cube. NSDC has identified logistics and transport as one of the priority area for skills development, but the sector skill council for logistics is yet to be constituted.
CHALLENGES IN SKILLS DEVELOPMENT Both identification and development of skills require a holistic approach and need to be dovetailed into business strategy rather than one of the ‘things to do’. Some of the challenges experienced by the large companies are: • Defining and standardising the job roles and competencies across all the locations • Using a structured methodology to arrive at existing skill gaps • Developing and delivering skill development interventions that are consistent across all the locations. Given the distributed logistics setup across the country and large manpower (including the contract manpower) involved, it is not an easy task for a company to address the skill gaps without an external partner. There are many institutes, training providers and freelance trainers in the country providing trainings in some skill sets. To check if they really have a meaningful impact on the logistics sector, let’s apply a litmus test involving following criteria: • Do they provide end-to-end service, starting with skill gap analysis to
delivery & post-delivery assessment? • Do they cover the entire range of competencies cutting across all the levels in the organisation— ranging from entry level to senior management level? • Can they support standardisation and delivery of content across the country? • Are their programmes practical enough to make significant improvements or targeted to provide certificates to help the learners make their CVs look better? • Do they make use of technology to engage the learners over the complete learning cycle or provide one-off or need based trainings? The second most important element involved in addressing the skill gaps is the cost of up-skilling the manpower. Conventional- and classroom-based trainings can be very expensive if the organisation is distributed over multiple locations. Making either people travel to one location for training or the trainers travel across locations would be a big expense. Also, at some of the locations, team size for each role could be too small to hold a dedicated classroom session. The problem gets accentuated with employee turnover that requires new employees to be trained from scratch. Logistics operations are continuous and cannot be stopped (unlike manufacturing where the maintenance periods are used to train people). It is nearly impossible for companies to release the entire team for a day or two to attend trainings without nearly stopping their operations.
ADDRESSING THE CHALLENGES There is no ‘one size fits all’ solution as every company is different in terms of size and complexity. However, there are certain fundamental principles that could be applied to any environment. These include: • Take a holistic approach to skill development Some skill gaps could be apparent
leading to a temptation to quickly organise a few training programmes around the gaps. Such a quick fix approach does not provide sustainable results. Many of the hidden gaps start becoming apparent over a period of time, resulting in sub-optimal outcomes. It is, therefore, advisable to start with the existing skill gap assessment in the organisation. The skills are mapped not only against the existing business objectives but also against future goals. This approach provides a continuum in the skills development roadmap and not merely one-off gaps. The skill gap assessment should be sound enough to unearth hidden gaps. An apparent gap in inventory accuracy may have a hidden root cause lying in inability to plan & schedule activities leading to fire fighting that, in turn, may result in transactional errors. • Carefully decide on the types of intervention techniques The skill gaps may arise due to two reasons, viz.: - Lack of knowledge e.g. safety aspects and hazards involved in the logistics environment or the right process for picking goods in a warehouse. Such knowledge is required to be disseminated to a large population of employees as well as reinforced periodically to ensure its effectiveness. The knowledge areas related to standard operating procedures, processes, documentation and reports are best handled with tools like eLearning and videos. Its advantages are: - The learners can set their own time and pace for learning - The operations are not impacted - Can be easily deployed to cover large population at the same time - Can be repeated as many times as needed - Can be easily updated from time to time
The upfront development cost of these tools may be high, but comparing with the cost of travel involved in a multi-location environment, it works out to be far more cost-effective over the medium term. There are certain
knowledge areas such as network optimisation, inventory modelling, layout design, etc., which may require close interaction with the trainer; practice exercises and immediate feedback. Training on these knowledge areas is best done in a classroom setting with the trainer guiding the group. - Inability to apply the knowledge in the work environment e.g. implementing safety procedures in warehouse. Such gaps are addressed by coaching people on the job either by seniors or experts. Taking the same example, an expert will conduct drills to demonstrate the application of procedures in the real work environment. • Decide what part to insource and what to outsource This decision can be best taken after assessing the internal capabilities for skill development. Given the practical constraints in the form of a dedicated team required to manage the entire skill development cycle, it is advisable to outsource it to an external partner. While selecting an external partner, one must not get carried away by the perceived expertise of a trainer, but apply the litmus test criteria to evaluate the partner comprehensively. It is best
to engage with a partner that has the: - Capability to address the skill gaps in entirety - Willingness to engage over complete learning cycle and show tangible results - Infrastructure to provide standard content across multiple locations - Technology to deliver the content through multiple channels There is one close example of a training partner in the IT sector—NIIT. • Use learning management system to administer skill development Having mapped the skill gaps and identified the intervention programmes, administrating the entire process involving large number of people at multiple locations can be quite taxing. That is one of the most common reasons why initiatives started with lot of enthusiasm, fizzle out over a period of time. The Learning Management System (LMS) is a portal that maps the competencies to the job roles and automatically assigns programmes based on pre-defined rules. It also helps to track the progress of trainings at the individual level and provide multiple reports to the line managers and HR to schedule and track the skill development programmes. Many LMS’ provide assessment engine to help companies assess the skills before and after training interventions. The LMS also hosts eLearning modules, videos and any reference materials that is important to a job role. The LMS can also be used as a communication tool between the headquarter and decentralised locations to allocate improvement tasks and reporting by these locations. There are a number of LMS providers with licencing as well as hosting models. Many large companies have an in-house customdeveloped LMS for the entire organisation. Ashish Mendiratta, Director – Learning, ThinkLink Supply Chain Services Ltd. Email: ashish.mendiratta@thinklink-scs.com
DECEMBER 2012 • SMART LOGISTICS • 47
TIPS & TRICKS ECO-EFFICIENCY
ways to optimise the The science of sustainability has made LSPs to think beyond getting the basics right—agility, flexibility, rationalisation, lean and green. While the leading LSPs learned to think sustainably through collaborations and acquisitions, here are few other tips that tend to embed sustainability in their day-to-day operations. SUPRITA ANUPAM
FLOWCHARTS AND PERFORMANCE STANDARDISATION WHILE the EU authorities are parting ways with Logistics Service Providers (LSPs) that are not working towards ensuring a cleaner environment by enhancing and building a greener supply chain, many manufacturers are constantly mounting pressure on their LSPs to decrease supply chain cost while making it more flexible. For example, the pressure of installing solar panels over cold containers is not an easy task viewing the cost increment factor. Here are a few tips to maximise supply chain sustainability…
In supply chain management, though it is difficult to maintain the same flowchart as designed on paper, leading LSPs such as UPS, Deutche Bahn and FedEx claim they canotherwise. Leveraging the right resources in accord with feedback generated makes it possible to achieve the same. However, maintaining flowchart dénouements is not the last goal; it indicates the right track of service. Improvements in the flowchart design and its standardisation must continue to ensure a high quotient of sustainability.
ENGAGE SUPPLIERS IN LONG-TERM PLANS For a manufacturer, transportation service is often required at many manufacturing stages before the finished goods are supplied to retailers. An LSP must cultivate all these stages as part of its corporate policy with mutual understanding of cutting cost, better service responsibility and better relationship. Simultaneously, it must ensure the right procurement for the same.
ENRICH PUBLIC TRANSPARENCY WITH INTRINSIC ALIGNMENTS
BE WARY OF FALSE COMMITMENTS
MAINTAIN DAY-TO-DAY DIALOGUES WITH CLIENTS
Many 3PLs make false commitments in terms of quality and delivery time and subsequently, avoid the necessary day-to-day conversations with their suppliers. This ultimately terminates possible further leads. Instead of practicing this, it is better to ensure commitments done with teams specially assigned for bigger projects, thus ensuring on-time delivery with better quality.
Maintain a day-to-day dialogue with clients as part of corporate social responsibility and let suppliers know about a paradigm shift in the priorities, if any. The conversation thus, in a way, involves clients in any change with regard to priorities, routes and so on. This helps in building clients’ trust over the service offered.
One of the biggest strength of LSPs is said to be its public transparency. High public transparency cannot be attained without ensuring proper intrinsic alignment and without an appropriate mechanism in place. The transparency mechanism helps in long-term sustainability, thereby helping build a strong relationship with suppliers.
BE CONSISTENT FIX PRIORITIES Priorities must be fixed with the help of 4PLs or consultants. The priorities must include a right mix of environmental, social, quality service, timeline, route dynamism, consumer affairs, compliance, marketing and packaging. This makes way for teams involved without any wastage of time on decision making.
Consistency is tough in logistics as sorting out the complex network implications and burden of managing new process/methodology without having appropriate experience can prove to be a cumbersome task. The job gets tough each time an LSP gets some new assignment. Therefore, it is a must to implement a new SCM strategy for the assignment. suprita.anupam@network18publishing.com
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TRADE SHOW TRACKER EVENT LIST
NATIONAL
ABROAD
11 DECEMBER 2012
19-20 DECEMBER 2012
5-8 DECEMBER 2012
RETAIL SUPPLY CHAIN SUMMIT 2012 Focus: Supply Chain Industry Where: The Westin Mumbai Garden City Tel: 9819751375 Fax : 022 28269536 E-mail: amit@rai.net.in Web: www.rai.net.in/scs
BUILDING WAREHOUSING COMPETITIVENESS - EMERGING TRENDS FOR WAREHOUSING Focus: Warehousing Where: The Hyatt Regency, Mumbai Tel: 044- 42928900, 42928904 Fax: 044- 22551341 E-mail: t.pramila@cii.in
INDUSTRIAL AUTOMATION & LOGISTICS INDONESIA Focus: Automation & Logistics Where: Jakarta International Expo, Jakarta, Indonesia Tel: +60 3 8023 5352 Fax: +60 3 8023 3963
NATIONAL
ABROAD
23-28 FEBRUARY 2013
30-31 JANUARY 2013
8-11 JANUARY 2013
PRINTPACK INDIA 2013 Focus: Warehousing & Material Handling Equipment Where: India Expo Center & Mart, Greater Noida, India Tel: 0120 4292274 Fax: 0120 2400109 E-mail: admin@ipama.org
7th PHILIPPINE PORTS & SHIPPING 2013 Focus: Ports & Shipping Where: The Peninsula Manila, Manila, Philippines Tel: +60 87 426 022 Fax: +60 87 426 223 E-mail: enquiries@transportevents.com
2013 INTERNATIONAL CES Focus: Logistics Software Where: Las Vegas, Nevada, USA Tel: +1 301 694 5243 E-mail: internationalreg@CE.org
ABROAD 19–22 MARCH 2013
19–22 MARCH 2013
18–21 MARCH 2013
INTERNATIONAL MATERIALS HANDLING EXHIBITION 2013 (IMHX) (TRADE) Focus: Latest materials handling and logistics innovations Where: National Exhibition Centre, Birmingham, UK Tel: +44 (0) 121 780 4141 Fax: +44 (0) 121 767 3700 E-mail: info@necgroup.co.uk
CeMat SOUTH AMERICA Focus: International Intralogistics and Supply Chain Forum Where: Hannover Fairs International GmbH, Hannover, Germany Tel: +49 511 89-32113 Fax: +49 511 89-39681 E-mail: hmcwb@hanover.com.br
ANNUAL NATIONAL LOGISTICS CONFERENCE & EXHIBITION Focus: Showcasing logistics for medium and small companies, motor vehicles for goods transport Where: Hyatt Regency Miami, US Tel: (305) 358-1234 Fax: (703)247-2570 E-mail: amccloskey@ndia.org
LUDHIANA December 21-24, 2012 AURANGABAD February 1-4, 2013
INDORE January 11-14, 2013
RUDRAPUR February 23-26, 2013
HYDERABAD May 31-June 3, 2013
Tel: 022-30034651 • E-mail: engexpo@infomedia18.in • Web: www.engg-expo.com
DECEMBER 2012 • SMART LOGISTICS • 49
EVENT PREVIEW ENGINEERING EXPO LUDHIANA 2012
LUDHIANA December 21-24, 2012 GLADA Ground
Making manufacturing-friendly North accessible Led by manufacturing biggies, Ludhiana is fast emerging as a leading investment destination in the northern belt of India. In this backdrop, the upcoming Ludhiana edition of Engineering Expo, organised by Network 18 Publishing during December 21–24, 2012, will bring into the limelight the potential that northern region offers manufacturers by showing investors how to gain easy access into this manufacturing-friendly zone. ANWESH KOLEY
THE emerging markets in the North have become an attractive investment haven, and Ludhiana is one such prospective destination where the manufacturing sector is growing at a rapid pace. In a bid to provide ample growth opportunities to the manufacturing fraternity, Engineering Expo Ludhiana, slated to be held during December 21–24, 2012, is expected to generate high levels of enthusiasm among the manufacturers in Punjab. Engineering Expo has been instrumental in providing a fruitful business platform to manufacturers across the country, with key industry players participating in the event. It has been synonymous with enabling healthy business interactions, thus helping generate business leads and playing the role of a catalyst in the Indian growth story.
by bigger units in the international market.” Commenting on the growth potential of Punjab as an industrial area, Didarjit Singh, Proprietor, Karam Chucks, informs, “Manufacturing in Punjab has undergone various phases of development over the last 10 years. It has grown at a robust rate during this period and has been one of the best performing manufacturing economies. The manufacturing sector contributes about 15% to Punjab’s GDP and 50% to the country’s exports. It employed 58 million people (about 12% of the workforce) in 2008. By 2012, it is estimated, based on the current economic projections, that this sector will employ a further 12–13 million out of the nearly 89 million additional people who will enter the workforce.” The key markets in Punjab include Ludhiana, Hoshiarpur, Samana, Jalandhar and Amritsar.
NORTHERN PROSPECTS Elaborating on the changing scenario in the manufacturing arena in Punjab, Robin Basant, Managing Partner, Basant Mechanical Works, says, “The industry in Punjab is now embracing global manufacturing technologies on the shop floor; the mindset of people is changing as well. Everybody is now concentrating on quality and quantity. Punjab is known globally for woollen clothes, hosiery, machine tools, auto/ car parts, cycle manufacturing, etc. People are travelling places to learn the new technical skills being used
50 • SMART LOGISTICS • DECEMBER 2012
Highlights of this edition 250+ expected exhibitors 20,000+ business visitors expected Business transactions worth `150 crore expected 20,000+ products on display Spread over an area of more than 1,50,000 sq ft Showcasing more than 30 diverse industry categories
LUDHIANA: POTENTIAL WAITING TO BE TAPPED The growth potential of the city has brought it on the radar of large manufacturing houses. Singh elaborates, “People of Ludhiana are skilled and high spirited. In addition to theoretical knowledge, they have technical skills imbibed through their family lineage. Besides, they are regularly upgrading themselves as per the needs of the time. So, many international machines/technologies are being used by manufacturers to stay abreast with competition. All the big industries are eyeing Ludhiana for sourcing materials and selling products to end-users.” Sharing similar sentiments, Manjit Singh Matharoo, GM, Consortium of Ludhiana Machine Tools Manufacturers (CLMTM), observes, “Ludhiana has a large base of manufacturing companies, with a wide network of possibilities. It is capable of delivering quality, and since the last six years, the area has seen rapid development of internal support units. It has the perfect model for costeffective business.” Ludhiana is also emerging as a major automotive hub in northern India. “Ludhiana is the most appropriate destination for investment. The latest study by World Bank has adjudged Ludhiana as the best place for doing business in India. Though not a major tourist destination, the city has come up as a major medical
tourism destination and also a budding commercial centre. The city is not far from the National Capital and hence, is easily accessible,” adds Basant. Sajni Khanna, Consultant, AMC Pvt Ltd, states, “The area has been emerging due to its proximity to the National Capital and provides immense opportunities to domestic and international investors.”
EXHILARATING ENGINEERING EXPO There is general consensus that Engineering Expo is getting better with each passing year, and is coming up with novel initiatives keeping in mind SMEs in the region. Its association with leading organisations such as National Small Industries Corporation (NSIC); United Nations Industrial Development Organization –International Centre for Advancement of Manufacturing Technology (UNIDO – ICAMT) and CLMTM will take Engineering Expo Ludhiana to new heights. Commenting on the Expo, Sandeep Khosla, CEO, Network 18 Publishing, says, “After 10 successful years of service to the industry, Engineering Expo today has established itself as India’s largest multi-location trade show on manufacturing. The Expo is a preferred destination for small and medium enterprises as well as manufacturing & engineering organisations to further their growth and that of the industry at large. For the 2012–13 season, we have eight editions spread across an equal number of locations of a rising India. Keeping our esteemed exhibitors and valued customers in mind, we have made elaborate provisions to offer a never before experience. These, we reckon, will add substantial traction to the industrial growth of the nation.” Expressing his views on the event, Basant opines, “Today, Engineering Expo attracts more business visitors than some of the other large events organised to facilitate business. More than 1 lakh industrial buyers benefit
NEW ATTRACTIONS IN THIS EDITION Panel discussion aimed at providing a roadmap to infuse growth in the region Institutional Buyer Involvement Plan to attract delegations from large corporate and major institutions Improvised visitor profiling – profile, scan, filter and bring in visitors as per exhibitors’ requirements Providing business networking support to exhibitors by leveraging Network 18 Publishing’s industry connect Credit rating facilities for the benefit of exhibitors Providing complete travel solutions to exhibitors Offering logistics services to ensure smooth cargo handling, custom clearing, transport compliance, etc. from Engineering Expo every year. Over the years, it has become one of the most lucrative platforms for business growth. In fact, they help us interact with national as well as international visitors including manufacturers, investors, diplomats, government officials and industry stalwarts. And as a multi-location tradeshow, Engineering Expo reaches out to prospective clients, in their respective cities.” With more than a decade’s experience of organising exhibitions, Network 18 has been successful in understanding and meeting the expectations of exhibitors, which, in turn, has resulted in unconditional trust in the Expo. Singh observes, “In today’s world, displaying your strength, product range and skills, on a common platform is important. People who do not know you directly can gain full knowledge about your product range at such types of platforms. This Expo provides a one-to-one meeting opportunity and a platform to share vital prospects to grow one’s business. Besides, having an organiser like
Network 18 is again a value addition.” Echoing similar sentiments, Ashok Kumar Gupta, MD, Crane Bel International Pvt Ltd, says, “We have been associated with Engineering Expo for a long time, and since Network 18 is the organiser, we are keen to extend our relationship further. We keep introducing innovative concepts every year at the Expo, and this year will be no different.”
BUSINESS OPPORTUNITIES GALORE The Expo plays a crucial role not only in business development, but also in increasing profitability. Over the years, it has evolved as an ideal launchpad for exhibitors. Basant asserts, “Engineering Expo is considered to be an ideal platform for companies to foster growth through reach and awareness to their right target audience. It proves to be a perfect combination of a vast range of exhibitors, spacious venue, stateof-the-art amenities and humungous visitor turnout, which constitute the most crucial factors for any exhibitor.” Talking about his expectations from the Expo, Singh says, “Personally, my expectations from Engineering Expo Ludhiana are high. Looking at the potential, knowledge and management of the organiser, we expect a huge turnout of quality-oriented customers at the show.” Engineering Expo is considered an ideal platform to showcase the industrial talent residing in smaller towns and cities of India. Matharoo feels, “A place like Ludhiana has the skills to attract international manufacturers to India, and such events do a commendable job in materialising this goal.” With enthusiasm and optimism regarding the event riding high among participants, the Engineering Expo Ludhiana is poised to provide an important ground for nurturing business opportunities in the state of Punjab and explore untapped markets, which can emerge as lucrative business sites. anwesh.koley@network18publishing.com
DECEMBER 2012 • SMART LOGISTICS • 51
EVENT REPORT ENGINEERING EXPO PUNE 2012
PUNE November 2-5, 2012 Auto Cluster Exhibition Centre, Chinchwad
Generating high volume of opportunities Housing varied manufacturing industries as well as services sector, etc., Pune has witnessed immense development in the past few years. Engineering Expo Pune has proven to be a catalyst by accelerating business transactions, especially for SMEs in the manufacturing industry. The four-day event, held between November 2 and 5, 2012, saw some serious business opportunities and leads transforming into profits. Many exhibitors confirmed participation, and most visitors plan to exhibit in the next edition! MAHUA ROY
OVER the past few decades, the concentration of industrial units has transformed the city of Pune into one of the major manufacturing hubs in the country. While proximity to the commercial capital Mumbai has certainly played a role in it achieving this grand status, other important factors contributing to its prominence include availability of skilled manpower, conducive climate and intellectual richness. Also, the industrial infrastructure in the area has kept pace with the real estate development. Providing a boost to the attractive investment destination, Engineering Expo Pune saw impressive activity. Organised by Network 18 Publishing, it was held at Auto Cluster Exhibition Centre, Chinchwad, in the month of November, an extremely strategic time for business generation. Engineering Expo Pune has turned into a favourite destination for generation of high-volume business leads. Bringing together high-profile visitors, decision makers and a multitude of exhibitors all across the country, Engineering Expo Pune truly emerged as the largest SME gathering. The 7 th successful edition of Engineering Expo Pune was inaugurated in the presence of eminent dignitaries Anant Sardeshmukh, Director General – Mahratta Chamber of Commerce, Industries
52 • SMART LOGISTICS • DECEMBER 2012
Dignitaries unveil the exhibitors’ directory at the 7th edition of Engineering Expo Pune
& Agriculture; Nitin Chalke, General Manager – India & South East Asia, Eaton Fluid Power Ltd; Sanjay
Highlights of this edition 200 exhibitors pan India Spread over more than
3,500 sq m 16,000 business visitors Business transacted worth
`68.03 crore 7,860 business leads generated 15,000+ products displayed More than 1, 10,000 kg machinery moved in for display
Marathe, Head – Strategic Services Unit and CTO, Zensar Technologies; Sandeep Khosla, CEO, Network 18 Publishing; Sudhanva Jategaonkar, Associate Vice President, Network 18 Publishing; and Manas Bastia, Senior Editor, Network 18 Publishing. The traditional lamp lighting ceremony was followed by the unveiling of the official exhibitors’ directory, which comprised all important details in a consolidated manner.
PUNE AS AN IDEAL INVESTMENT DESTINATION Experts have been noting the rise in technology adoption of SMEs. Expositions such as Engineering Expo
have been promoting an atmosphere of high-end technology. According to Marathe, “SMEs have been showing an encouraging response to the adoption of advanced technologies such as cloud computing.” Pune, being an industrial hub, has benefitted greatly through the Expo because of the variety and wide range of technologies and solutions on display. Commenting on the same, Chalke observed, “The area chosen for the Expo, Auto Cluster, is strategic and ensures quality turnout of visitors. Pune, being a hub for auto industry and ancillary units, has seen real-time advantages due to Engineering Expo.”
PROMOTING COLLABORATION In recent times, the SME sector is witnessing extensive growth in Pune. New projects and capacity expansions are a visible result. In this backdrop, Engineering Expo brings in its expertise of uniting the SME sector with prospective clients, thus providing a holistic business generation experience. One of the biggest takeaways from trade shows has been the creation of a collaborative atmosphere among the companies. SMEs benefit hugely from this experience, which helps them develop products and technologies of a higher quality, thus making them globally competitive. Elaborating further, Marathe opined, “Innovation is a differentiator when it comes to SMEs. Trade shows such as Engineering Expo nurture the collaboration in a competitive environment, something which is difficult to achieve otherwise. Both exhibitors and visitors utilise this opportunity to make the most out of this experience and improve the quality of their products and services.” Being the largest SME gathering for the manufacturing industry, this platform has helped them immensely. “Manufacturing is one of the most important revenue-generating sectors for Pune. A tradeshow of this scale
has added greatly to the growth of the manufacturing segment as it majorly focusses on SMEs in the segment. The event is an excellent platform for promoting businesses, branding and networking. It is an extremely relevant concept, which is benefitting the nearby SME clusters year on year. They get to learn and update themselves on the new technologies,” said Sardeshmukh.
WIDE ARRAY OF TECHNOLOGY ON DISPLAY The exhibition halls were buzzing with activity on all the days. Most exhibitors were buoyant about the sales and leads generated in huge numbers. Emphasising on his association with Engineering Expo, Snehal Mehta, Director – Marketing, Energy Mission Machineries (India) Pvt Ltd, said, “We have been participating in Engineering Expo since a long time. The event has helped us build our brand name and enhance the image of our organisation. It has provided us a good platform to gain exposure and enabled us to generate business leads. The show has provided us an ideal platform to display and demonstrate our products and meet potential buyers.” “We are machinery manufacturers and so, we aim at building long-term associations with the industry. In such a case, the Expo helps us introduce our products to new buyers and gradually get the enquiries converted into business leads,” Mehta added. The exhibitors were able to interact with a large number of serious business visitors. To this, Sridhar Nalluri, Country Manager, CST Sensors India Pvt Ltd, added, “We are expecting to increase our brand value and reach more customers in the Maharashtra industrial sector through this trade show. We are looking to tap the machine tools, SPM & automation segments through Engineering Expo.” With a large range of technologies on display, visitors benefitted greatly
from the exhibition. “This is an effective platform for generating business opportunities. I came to scout for suppliers for my venture. There is a wide range of products and services for hydraulics & pneumatics, material handling, etc.,” said Chintan Shah, Proprietor, Mech Tech Engineers, a visitor. “This is a one-stop shop for all my business needs as I found relevant products on display. There are exhibitors from various parts of the country, which makes this a holistic exhibition,” Shah added. “It is an all-in-one Expo on a large scale, with technologies ranging from automation and cooling solutions to IT, etc. It includes a mix of big names as well as SMEs. Branding is more visible. I could generate many leads relevant to my business,” commented Nitin Penpatil, Director, FS Engineers, another visitor.
GEARING UP FOR THE NEXT EDITION OF ENGINEERING EXPO! With a splendid response received in this edition, most exhibitors have already booked slots for Season 2013 of Engineering Expo. Some have even confirmed participation at more than one edition. An interesting observation was that most visitors are planning to turn exhibitors in the next season. “It was a great experience for us. The new technologies on display served as an eye-opener. We look forward to leverage our experience at Engineering Expo to better our products and solutions. We were actually looking for MNCs and have got many leads. We plan to be an exhibitor in the next edition,” said Sherman Britto, Executive – Business Development, Vinsys IT Services India Pvt Ltd, a visitor at the event. The next edition of Engineering Expo will be held in Ludhiana, from December 21–24, 2012. mahua.roy@network18publishing.com
DECEMBER 2012 • SMART LOGISTICS • 53
EVENT REPORT PANEL DISCUSSION: PUNE
Redefining INDUSTRIAL GROWTH A panel discussion becomes worthwhile when actionable solutions are worked upon. This is exactly what happened at an engaging and enthusiastic forum, which brainstormed on ‘Does Pune define or defy industrial competitiveness?’ MAHUA ROY
PRIDE, progress and prominence are the words that the city of Pune identifies with. Branded as an educational and cultural destination traditionally, the city has also seen huge industrial investments in the past few years. The Chakan-Talegaon belt, Pimpri Chinchwad, Hadapsar, Hinjewadi, Ranjangaon are emerging as the busiest business clusters of the world. Undoubtedly, Pune has defined industrial competitiveness in its own magnificent way. In this backdrop and on the eve of Engineering Expo Pune 2012, a highly engaging panel discussion on the theme ‘Does Pune define or defy industrial competitiveness?’ was held at Le Meridien Hotel, Pune. The panelists constituted a brilliant mix of experts representing several stakeholders of the industry, including Sanjay Marathe, Head – Strategic Services Unit and CTO, Zensar Technologies; Dr Ranjit Date, President & Joint MD, Precision Automation Robotics India; Tushar Mehendale, MD, ElectroMech; Dr Pradeep Bavadekar, MD, MITCON Consultancy & Engineering Services Ltd; Mahendra Singh Dhakad, Programme Director, United Nations Industrial Development Organisation (UNIDO); and RV Krishnan, MD, Business Development India Bureau Pvt Ltd. The session was moderated by Archana Tiwari-Nayudu, Executive Editor – SEARCH, Network 18 Publishing.
54 • SMART LOGISTICS • DECEMBER 2012
(L-R): Tushar Mehendale, MD, ElectroMech; Sanjay Marathe, Head – Strategic Services Unit and CTO, Zensar Technologies; Mahendra Singh Dhakad, Programme Director, United Nations Industrial Development Organisation (UNIDO); Archana Tiwari-Nayudu, Executive Editor – SEARCH, Network 18 Publishing; RV Krishnan, MD, Business Development India Bureau Pvt Ltd; Dr Pradeep Bavadekar, MD, MITCON Consultancy & Engineering Services Ltd; and Dr Ranjit Date, President & Joint MD, Precision Automation Robotics India at the panel discussion recently held in Pune
SUSTAINING THE INVESTMENTS As a city, Pune is blessed with a conducive environment for industrial investments. Highlighting this fact, Krishnan observed, “Industrialisation in Pune is growing at a faster rate than the national average. Going forward, the industry should take ownership of the solutions that need to be implemented.” No doubt the city is attracting investments, but the point in contention is whether it has the resources and mindset to sustain the incoming investments. It is a proven fact: industrialisation, and thereby progress, begins with good infrastructure. Good roads are the most basic part of infrastructure development, which promote a convenient atmosphere for investments. To this, Mehendale added, “Lack of this important resource is stifling the growth momentum in Pune.”
CULTIVATING AN ATTITUDE OF INNOVATION The industrial sector in Pune is dominated by SMEs. In fact, Dhakad pointed out rightly, “It is impossible for MNCs in the manufacturing sector to survive without SMEs.” However, the mindset of SMEs needs a 360°
revolutionary turn in order to make them competitive. Competition and collaboration can only spell wonders. Dhakad added, “The SME cluster in Pune has a unique expertise to conceive new ideas. This is the time to collaborate and enable knowledgesharing among SMEs.”
TARGETING TALENT MANAGEMENT The dense concentration of top educational institutes in and around Pune has blessed the city with quality and quantity of talent. However, optimisation of this resource still stands as a challenge before the industry. Dr Bavadekar, who addressed the issue of collaborative growth prospects, said, “Industry-academia collaboration is one of the solutions to address the problems faced by the industry, especially IT, automation and manufacturing. The academia and industry are somewhat alienated today. The practical answer lies in identifying target institutes and starting interactions with the potential talent pool quite early in their career.” The electrifying panel discussion was followed by an interactive question & answer session with the highly enthusiastic audience, moderated by Archana Tiwari-Nayudu.
ENGINEERING EXPO CHENNAI 2012 EVENT REPORT
CHENNAI November 22-25, 2012 Chennai Trade Centre, Nandambakkam
Showcasing Southern
Manufacturing Strengths Chennai’s favourable climate has helped the city bag several envious deals over the years. With an aim to help manufacturers across the country encash on the Chennai advantage, Network 18 Publishing inaugurated the 5th edition of Engineering Expo Chennai 2012, at Chennai Trade Centre, Nandambakkam, Chennai, on November 22, 2012. Offering both exhibitors and visitors a platform to interact and witness engineering marvels, the Expo proved to be a one-stop shop for one and all. A report… SUPRITA ANUPAM
IN the recent years, along with IT investments of repute, Chennai has bagged huge deals in the auto, OEM and ancillary industries. The city has, over the years, transformed itself into a bustling investment destination with major auto companies like Daimler, Ford, Ashok Leyland, Mahindra, NISSAN, Renault, BMW and TAFE Tractors offering a boost to the ancillary units in the industrial clusters of Ambattur, Sriperumbudur and Padi. According to P Shanmugasundaram, Chief GM – Projects, TIDCO (OD) & MD, TICEL Bio Park Ltd, “Unlike
Highlights of this edition 200+ exhibitors Pan India Spread over more than
4,500 sqm 12,072 business visitors visited across India Business transacted worth `62.47 crore* 8,893 business leads generated* 8,000+ products displayed from different industries More than 80,000 kg machinery moved in for display * Feedback received from exhibitors
(L-R): Nitin Kunjir, Deputy Manager – Sales, Network 18 Publishing; Manas R Bastia, Senior Editor, Network 18 Publishing; Ramesh PS, President AIEMA & MD, Airflow Engineering; P Shanmugasundaram, Chief GM – Projects, TIDCO (OD) & MD TICEL Bio Park Ltd; Sandeep Khosla, CEO, Network 18 Publishing; Ameer Munaff, CEO, Fein Power Tools and Hari Hara Subramaniam, Manager – Sales, Network 18 Publishing at Engineering Expo Chennai 2012
China, Chennai’s development is not an integrated one but has its own reasons for housing 34,500 companies, 35,000 expats. The Tamil Nadu Government also facilitates the process of clearances to set up companies.” Leveraging on the Chennai advantage is Engineering Expo Chennai, which brings in its expertise of uniting the buyers and sellers of the engineering and manufacturing sectors, thereby providing a holistic business ecosystem. Launched in Ahmedabad in 2002, Engineering Expo has come a long way today by becoming one of India’s largest multi-location SME meeting points. Elaborating on the legacy of Engineering Expo, Sandeep Khosla,
CEO, Network 18 Publishing, said, “After 10 successful years of service to the industry, Engineering Expo today has established itself as India’s largest multi-location trade show on manufacturing. The Expo is a preferred destination for small and medium enterprises as well as manufacturing & engineering organisations to further their growth and that of the industry at large. For the 2012–13 season, we have eight editions spread across an equal number of locations of a rising India (including Ahmedabad, Pune, Chennai, Ludhiana, Indore, Aurangabad, Rudrapur and Hyderabad). Keeping our esteemed exhibitors and valued customers in mind, we have made
DECEMBER 2012 • SMART LOGISTICS • 55
Engineering Expo Chennai 2012, continued
elaborate provisions to offer a never before experience. These, we reckon, will add substantial traction to the industrial growth of the nation.”
THE INAUGURATION… The 5 th edition of Engineering Expo Chennai 2012, one of the largest trade fairs in the city, was inaugurated in the gracious presence of Ramesh PS, President, AIEMA & MD, Airflow Engineering; Ameer Munaff, CEO, Fein Power Tools; Shanmugasundaram; Sandeep Khosla, CEO, Network 18 Publishing and Manas Bastia, Senior Editor, Network 18 Publishing. “Engineering Expo provides a single window shopping solution for SMEs as they usually sell their products to a variety of clients such as automobile, machine tools, material handling and so on. Additionally, a visitor can meet all his demands in one day,” highlighted Ramesh while commenting at the occasion. Elaborating further, Munaff averred, “Engineering Expo is one of the best platforms for us to reach the end customer. This is also an opportunity for us to let our customers have a feel of our product operations and train them about the right working procedures. This is one of the major reasons why we are launching our new handheld core drilling machine—the first of its kind in terms of technology, quality and cost in the whole world.”
CUTTING-EDGE TECHNOLOGIES Over the years, Engineering Expo Chennai has been providing opportunities for SMEs, which are critical for the growth of emerging markets like India, to display their products as well as witness some of the latest technologies that could help develop their business. The 2012 edition offered similar growth avenues. The Expo served as a platform for Indian & overseas companies to exhibit their products & services, interact with potential buyers & sellers, generate new incremental business and forge
56 • SMART LOGISTICS • DECEMBER 2012
new partnerships. Showcasing cuttingedge technologies, this year’s edition also unveiled the latest in products, machinery and equipment from manufacturing & related industries. This edition of Engineering Expo Chennai, which spanned over a period of four days, i.e., from November 22–25, 2012, generated revenue in excess of `62.47 crore.
EXHIBITORS SPEAK The Expo showcased over 30 diverse segments of industries and gave visitors an opportunity to witness the latest technologies and products. Some of the leading companies who participated in this edition included National Instruments, Durga Bearings, Dirak India, Fein Power Tools India Pvt Ltd, Gandhi Automation Pvt Ltd, Hitachi Koki India Ltd, Larsen & Turbo Ltd, Macht Exim Llp, Malwa Machine Tools, MGM-Varvel Power Transmission Pvt Ltd, Shuter Enterprises India Pvt Ltd, Testo India Pvt Ltd and Tussor Machine Tools India Pvt Ltd among others. Among the exhibitors, Sonal Sulania, Director, Durga Bearings Pvt Ltd, averred, “Earlier, we used to participate only in ELECRAMA and IMTEX. We decided to participate in this event due to the direct involvement of Network 18. While events such as ELECRAMA are focussed on switchgears and IMTEX on the metalworking industry, i.e., they have a specific sector or source in mind, the focus of Engineering Expo is diversified and you can avail the benefit of a single platform to reach all the sectors.” “The Expo provided a brilliant platform for all sectors to interact. To make it attain more prominence, perhaps, more well established companies could also showcase their products along with other SMEs,” she added. Vishak Mani, Director, Clasys, another visitor, stated, “This is the fourth time that we are participating in Engineering Expo and second time that we are participating in Chennai;
the previous three editions were quite successful for us. Exhibitions like these help us get new customers as well as enhance the know-how of the market.”
VISITORS’ VOICE A variety of visitors groups were seen at the Expo, which included engineering students, Universities’ R&D professors, SME proprietors and tier I companies representatives. Dr P Meganathan, Consultant, Sinto India Ltd, who visited the event the very first day, exclaimed, “We are in the process of setting up a new manufacturing plant here and I was looking for prospective suppliers at the Expo. It was my first visit to such a diversified exhibition, and I have interacted with a couple of fabrication, rubber and tool making companies. So far, I have had a very positive response in this regard.” Another visitor, Karthik Chandra Shetty, Director, Lumens Group Of Company, said, “I have been regularly visiting Engineering Expo since the last 2–3 years in Pune and Ahmedabad and it is good to see that it has prospered over the years. Engineering Expo covers almost all the segment of engineering goods. I always get to learn new things at the Expo.”
EXPANDING BUSINESS MEETS While the Expo is tending towards generating `1,000 crore business all over India, it appeared to be an apt platform for exhibitors to directly interact with end customers. Besides, it served as a launchpad for SMEs and facilitated interaction between end customers and suppliers. The 2011 edition of Chennai Engineering Expo recorded business transactions worth `41.98 crore, with more than 12,692 business leads being generated; this year exceeded to `62.47 crore as per the feedback received from exhibitors. Over 8,000 products from various industries were on display in an area spanning 4,500 sqm. The next edition of Engineering Expo will be held in Ludhiana during December 21–24, 2012.
PANEL DISCUSSION: CHENNAI EVENT REPORT
Can Chennai surpass the China factor? Known for its low labour cost, Chennai today stands for the highest quality of life ahead of the three metros—Mumbai, Delhi and Kolkata—and Bengaluru (as per the survey conducted by ECA International). Viewing the big investments made and being planned in the coming years in the milieu of Engineering Expo Chennai 2012, Network 18 Publishing, along with event partner Religare, organised an electrifying panel discussion on the theme ‘Can Chennai better the China MFG model?’ in Chennai on November 19, 2012. A sneak peek... SUPRITA ANUPAM
WITH the presence of all auto majors, IT and electronic hardware companies of the world, Chennai has made itself a benchmark in the country. Encashing on the recent improvements made at the governance, entrepreneurship and corporate levels, Engineering Expo, the flagship multi-location engineering & manufacturing exhibition organised by Network 18, held its intriguing panel discussion on November 19, 2012. The session was moderated by Archana Tiwari-Nayudu, Executive Editor – SEARCH, Network 18 Publishing. The panelists constituted a mix representing experts, entrepreneurs & industrialists including Ramesh PS, President – AIEMA & MD, Airflow Engineering; Ranganath NK, MD, Grundfos Pumps India Pvt Ltd; Narayan Kumar, GM, Hurco India; Kumar Kandeswamy, Sr Director and Country Leader Manufacturing, Deloitte; Sharmila Kumbhat, Director – International Marketing, K-Lite Industries and J Chandrasekaran, National Consultant – Plastics, UNIDO.
THE CHENNAI EDGE The session addressed the ecosystems
(L-R): J Chandrasekaran, National Consultant – Plastics, UNIDO; Kumar Kandaswami, Senior Director and Country Leader – Manufacturing, Deloitte; Ranganath NK, MD, Grundfos Pumps India Pvt Ltd; Archana Tiwari-Nayudu, Executive Editor – SEARCH, Network 18 Publishing; Sharmila Kumbhat, Director – International Marketing, K-Lite Industries; Ramesh PS, President, AIEMA & MD, Airflow Engineering; Narayan Kumar, General Manager, Hurco India at the panel discussion
of Chennai and China and the possibilities that might propel Chennai as a manufacturing hub ahead of China. “According to statistics, the labour cost in Chennai may be lesser than that of China. However, on a gross scale, it is still 20% costlier. Additionally, the city will have to deal with more of public sharing rather than solely relying on private sector investments,” Rangnath added. On the other hand, Kumar emphasised on India’s distinctive practices versus China’s method of replicating. “Indians actually excel in terms of technical expertise, innovative skill and value-added service. This is why we stand ahead of China; the two are simply incomparable,” Kumar averred. Taking the discussion forward, Kandaswami commented, “China is no longer known as the cheap product producer; they offer much more variety of products than we do. We produce only those kinds of products which we feel are in demand and do not focus on the kinds of products that might create demand. Thus, we are only limiting our market capabilities.” Meanwhile, Kumbhat pointed out, “Micro level situations are more proficiently handled here rather than macro level situations which we cannot
change on our own. Further, we follow the mantra of survival of the fittest, but China follows the mantra of the fittest is the survival.” Reacting on the recent State Government policy to encourage the use of solar power with an aim to generate close to 3,000 MW by 2015, which makes it mandatory for heavy consumers of electricity, like industrial units, to draw 3% of their power requirements from solar energy by December 2013 and 6% from Jan 2014, Ramesh pinpointed the hurdles in its implementation. “About 1 MW of solar power generation needs at least 3-4 acre of land. This implies that to generate 3,000 MW of solar power, there is a need to acquire 9,000–11,000 acre of land. Keeping the current shortage of land, it seems very difficult to achieve the same,” opined Ramesh. The electrifying panel discussion was followed by an interactive question & answer session with the highly enthusiastic audience. The discussion ended on a positive note, wherein all the eminent panelists agreed that Chennai is the most preferred place for future investments in the country. suprita.anupam@network18publishing.com
DECEMBER 2012 • SMART LOGISTICS • 57
EVENT PREVIEW RETAIL SUPPLY CHAIN SUMMIT
Connecting the Retail Chain Today, supply chain as a function is not only about making the product reach its final destination but it is an important medium towards value creation. In line with this, the Retailers Association of India, with Smart Logistics as its media partner, is all set to organise the 2nd edition of the Retail Supply Chain Summit on December 11, 2012, in Mumbai. A preview… NISHI RATH
ONE may have a great brand idea in mind and may well understand the need for it in the market as well. But how does one ensure smooth execution of that idea and reach the target audience without any major hiccups? After all, the chain that helps get all the raw materials in place to have a brand in hand and then pass that to the customer is not as simple as it looks. Hence, supply chain management is the most critical part in any business operation. Sensing the growing demand for a hassle-free supple chain, the Retailers Association of India (RAI), which has always strived towards boosting the morale of retail in India, will organise the 2nd edition of the Retail Supply Chain Summit at The Westin Garden City, in Mumbai on December 11, 2012.
FOCUS OF EVENT Conceptualised by the Supply Chain Committee of RAI, the summit would focus on increasing customer service levels by maximising responsiveness in the supply chain. It will also focus on collaborating with suppliers to ensure adaptability to changing market dynamics, increasing effectiveness, reducing cost and delivering a lean supply chain to minimise costs and generate business value. “As retail business expands, supply chain becomes a strategic differentiator.
With more channels for trading, including online, brick & mortar and catalogue among others, the role of efficiency of supply chain gets more complex. In order to get a smarter supply chain, there are a few things that companies can do internally; there are more things to be done at the industry level. Data management, collaborative transportation and easier tax processes are some such ideas,” says Kumar Rajagopalan, CEO, RAI. Speaking about the importance of supply chain management and its role with the changing market dynamics, Harinarayan S, GM – Supply Chain Services & Business Head - Supply Chain Services, ITW India Ltd, says, “Supply chain integration in terms of physical and data flow are the two biggest opportunities in the Indian retail supply chain today. Packaging is emerging as the 5th P of marketing— driving volumes in retail shelves in a modern retail environment. Higher safety factors, shrinkages, retail shelves productivity, labour productivity and sustainability are few of the easy hanging fruits from a packaging perspective for collaboration among stakeholders. Palletised logistics, shelf-retail-ready packaging operations ‘@ source itself’ are the first few steps towards building
With more channels for trading including online, brick & mortar and catalogue among others, the role of efficiency of supply chain gets more complex. In order to get a smarter supply chain, there are a few things that companies can do internally; there are more things to be done at the industry level.
efficiencies. We need to adopt and customise the packaging technology, jumping one generation from other developed markets, using the extensive talent pool we have in India.”
THE OPPORTUNITY According to the organisers, The Retail Supply Chain Summit - 2012 is an opportunity to discuss the challenges and issues currently affecting various retailers. The event will prove as an opportunity to network, make new business contacts and exchange best practices. Attendees will leave the event with new ideas and the ability to make better, more informed decisions for their organisations. Apart from the over 250 delegates, the summit will be graced by the presence of some of the who’s who of the industry, including supply chain heads, operation and buying and merchandising heads. The event will also witness key decision makers from hyper/supermarkets, FMCG companies, restaurant chains and e-commerce portals exchanging ideas and sharing their expertise and experiences.
HASSLE-FREE COLLABORATIONS The retail sector witnessing a never before growth and a market opening up to welcome newer brands and niche retail formats, all point towards the need for an efficient and smart supply chain. Organisers claim that summits of this calibre will serve as a platform for industry players to meet, network and collaborate to attain the target of having a hassle-free supply chain.
Kumar Rajagopalan, CEO, Retailers Association of India (RAI)
nisi.rath@network18publishing.com
58 • SMART LOGISTICS • DECEMBER 2012
TENDERS
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PROJECT LOGISTICS PARK Org : Container Corporation of India (CONCOR) Project Type : New facility Project News : Orissa state-level single window clearance authority has approved the setting up of a logistics park at Kalinga Nagar steel hub proposed by CONCOR. The logistics park would come up on an area of 30 acre in the industrial cluster at an investment of `70 crore. Loc : Kalinga Nagar, Bhubaneswar, Orissa Project Cost : `70 crore (US$12,862,920) Implementation Stage : Ongoing Contact : Container Corporation Of India (CONCOR) CONCOR Bhawan, C-3, Mathura Road, Opposite Apollo Hospital, New Delhi - 110 076 Tel : 91-11-41673093, 94, 95, 96 Fax : 91-11-41673112 Email : co.pro@concorindia.com Website : www.concorindia.com
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DECEMBER 2012 • SMART LOGISTICS • 59
PRODUCT UPDATE
This section gives information about products, equipment and services available in the market. If you know what you want. . . refer to Product Index on Page 64 to find it quickly
AUTOMOTIVE PART TRACKING
A
utomotive part tracking system is self-contained with patented ID Max and ID quick decoding algorithms. It is omni-directional and can read codes presented at any angle even if there are variations in the part position. It integrates directly to the factory network with the Cognex Connect™ suite of supported industrial protocols which ensures that the PC is no longer required between the reader and the factory network. It reduces the overheads of many systems used in the factory and also provides ethernet connection to transfer the data directly to the factory’s server. It has expandable system capacity of 700 units/shift and it provides complete traceability through supply channel.
ADJUSTABLE PALLET RACKS
A
djustable pallet racking is widely specified in virtually every industry and can easily adapt to the vast range of products to be stored. They are the most popular and widely used of all heavy duty storage systems which incorporate racks. It features low maintenance and easy installability with low down time. They are manufactured using superior quality raw material which is high tensile strength steel and they can easily store large and bulky items. The range can store commodities of different sizes. Benefits of the racks are high levels of storage density, automatic stock rotation. It is useful for pharma industries, ware housing, logistic companies, etc.
Cognex Sensors India Pvt Ltd Pune, Maharashtra Tel: 020- 40147840, 09881466003 Fax: 020- 66280011 Email: vaggu.sunil@cognex.com Website: www.cognex.com
Dewas Techno products Pvt Ltd Dewas, Madhya Pradesh Tel: 7272- 259044,259294 Fax: 7272-259044 Email: rajeev@giraffestorage.com Website: www.giraffestorage.com
SCISSORLIFT TABLE
S
cissor lift table provide safety and reliability features and an effective solution to most lifting problems. The tables comply with the European Safety of Machinery Standards EN 292 Machinery Directive 98/37/EC and safety requirements for lift tables EN 1570. The model includes aluminum safety bar which helps stop descent of the platform on contact with obstructions, safety clearance between scissors to prevent trapping during operation, safety check valve to stop the lift table lowering in an unlikely event of the hose break, protection against overloading, low voltage control box with up-down buttons and emergency stop, maintenance props for safe maintenance operation, removable lifting eyes to facilitate handling and lift table installation.
Gandhi Automations Pvt Ltd Mumbai, Maharashtra Tel: 022- 66720200, 66720300 Fax: 022-66720201 Email: sales@geapl.co.in Website: www.geapl.co.in 60 • SMART LOGISTICS • DECEMBER 2012
TROLLEY
T
rolley enables quick and frequent accuracy checks on the weigh bridge. The trolley is safely towable by most tractors/cranes etc. It is easy to pull and features predetermined display of weight. It is available in 4 x 1000 kg or 6 x 1000 kg confi gurations. The trolley consists of Ackermann steering for easy manoeuvrability over the platform. Spring loaded high density poly urethane wheels provide travel on any terrain possible. Standard weight is approved by Regional Reference Standard Laboratory (RRSL) Department of Consumer Affairs. Calibration certificate is also provided for each weight. It also features a steering lock mechanism for ease of reverse straight movement. Essae Digitronics Pvt Ltd Bangalore, Karnataka Tel: 09342332374 Website: www.essae.in
METAL PALLET
M
etal pallet is available in two models with/without MS sheet platform in mild steel in order to avoid wooden pallets to save trees. Some of the advantages
include: protection of trees and nature, lightweight and heavyduty, stackable and low transport cost for movement of empty pallets, long life and cost-effective, reusable and long-term savings, export ready, resale value even in scrap condition, maintenance-free, customisation based on requirements, can be used on all four sides by hand pallet and fork lift, good strapping with the product, weather-proof, and other valueadded features. Pushpak Products India Pvt Ltd Bengaluru, Karnataka Tel: 080-28382031 Email: vision@pushpak.co.in Website: www.pushpak.co.in
providing with material handling equipment like forklifts, hydras for loading/ unloading and proper stacking of materials to be handled, managing the incoming and outgoing cargo as per the DO issued by principals, etc. Shalimar Warehousing Corporation Mumbai, Maharashtra Tel: 022-28724981, 09924355999 Email: info@shalimarwarehousing.in Website: www.shalimarwarehousing.in
HYDRAULIC HANDLIFT PALLET TRUCK
T
he hydraulic handlift pallet truck meets the growing demands for low priced hydraulic truck that offers high quality, reliability and ease of handling. The advantages of the pallet truck become apparent as soon as it is put into service. Time saved in handling, greater use of floor space, reduced handling costs. Speed and efficiency with
CARGO STORAGE SERVICES
T
he services in storage and handling operations include features like providing customers warehouse as per specifications and size in the required area of operations,
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Product update, continued
which the truck enables the operator to lift and transport loads, facilitates production, storage and delivery operations to mention some. The hydraulic pallet truck is available in standard capacity of 1 ton to 3.2 ton and in other tailor-made capacities and sizes. Agromec Meerut, Uttar Pradesh Tel: 0121-2440660, Email: agromec@vsnl.com Website: www.agromecindia.net
sheets industries, lumber industries, wooden crate industries, metal crate industries etc. Dewas Techno products Pvt Ltd Dewas, Madhya Pradesh Tel: 7272- 259044,259294 Fax: 7272-259044 Email: rajeev@giraffestorage.com Website: www.giraffestorage.com
CANTILEVER RACK
C
antilever racks are great to organise a warehouse or manufacturing facility. With cantilever racks, each type of product can be segregated by commodity and size. A warehouse rack system pays for itself in labour efficiency, reduction in injury and accuracy in picking stock. Giraffe cantilever racking is formed using heavy duty structural uprights and heavy duty arms. It is normally used for storage of long loads. It is designed to handle long and awkward loads that are not palletised and is ideal for goods that need to be supported across two or more arms. Benefits include reduction in injury and accuracy in picking stock. They can be useful for aluminum
ALUMINUM CRANE SYSTEM
A
luminum light crane system applies the strength and low weight of aluminum to every light material which needs to be lifted. It can handle low loads up to 2 metric tonne across a wide variety of rail types. It is a robust, cost-efficient solution. An anodised aluminum surface ensures the long-term durability of the system purchase. The modular design which requires no welding or painting greatly reduces downtime during installation, expansion, or upgrade. Konecranes India Pvt Ltd Pune, Maharashtra
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62 • SMART LOGISTICS • DECEMBER 2012
Tel: 020-40047470 Email: india.sales@konecranes.com Web: www.konecranes.com
BARCODE PRINTER
E
-Class Mark III “Professional Plus” Barcode Printer offers features found in industrial printers but at a desktop printer size and price. It is the best solution for grade label and receipt printing. The Pro+ offers a locking media cabinet and sufficient internal media capacity to hold a 7.2-inch roll of media or stack of fan-folded media. It is also equipped with fast print speed, real-time clock, audible alerts and large display.
Datamax-O’Neil California, USA Tel: 949-458-0500 Fax: 949-458-0708 Web: www.datamax-oneil.com
E
OT and HOT cranes are available in both single-girder and double-girder ranging from 500 kg to 50,000 kg capacity. The cranes are designed and manufactured in accordance with IS:3177 considering proper factor of safety with respect to appropriate duty classifications. Different types are available, like double-girder overhead travelling cranes, single girder overhead travelling cranes, heavy-duty overhead travelling cranes with main and auxilliary hoists, under slung cranes, EOT/HOT crabs, etc. The cranes are used in steel mills, foundries, paper plants, cement plants, power plants, dairy plants, chemical plants, fertiliser plants, petrochemical plants, engineering plants, textile industries, general industries, etc. Techno Indus Ahmedabad, Gujarat Tel: 079-25830742, 09313159058 Email: info@technoind.com Website: www.technoind.com
T
ruck-mounted hydraulic crane superstructure frames is fabricated from hightensile steel plates and sections with mechanical superstructure lock operated from cab. The 3-section fully synchronised fully telescoping box section boom is fabricated from high-strength low-alloy steel plates with internal and external welding. Boom derricking has a singledouble-acting hydraulic ram mounted on a large diameter bushes. Til Ltd Kolkata, West Bengal Tel: 033-25531352 Email: tilkmt@tilindia.com Website: www.tilindia.in
EOT AND HOT CRANES
HYDRAULIC CRANES
WEIGHING TERMINAL
W
eighing terminal houses dual indicators, dual junction boxes, controller card, SMS unit which will prevent unauthorized access to the junction box / indicator for weight adjustment/ tampering. It is a stainless-steelrugged-enclosure. Also present is a hot redundant system which automatically switches in case of failure within 12 seconds. There is a status-indicating LED for running, standby. Auto change back to Master channel after repair/reset of master section is possible. There is a self diagnostic run of each channel on “power on” every time.
Essae Digitronics Pvt Ltd Bengaluru, Karnataka Tel: 09342332374 Website: www.essae.in
The information published in this section is as per the details furnished by the respective manufacturer/distributor. In any case, it does not represent the views of
Looking For A Specific Product? Searching and sourcing products were never so easy. Just type SL (space) Product Name and send it to 51818
eg. SL Forklift and send it to 51818 DECEMBE 2012 • SMART LOGISTICS • 63
PRODUCT & ADVERTISERS’ INDEX NDE DE
Looking For A Specific Product? Searching and sourcing products were never so easy. Just type SL (space) Product Name and send it to 51818
eg. SL Forklift and send it to 51818
To know more about the products & advertisements featured in this magazine, write to us at b2b@infomedia18.in or call us on 022-3003 4640, and we will send your inquiries to the companies directly to help you source better. Products
Pg No
Adjustable pallet rack .......................................................................60 Aluminum crane system...................................................................62 Auto FLC ..........................................................................................4 Automative part tracking .................................................................60 Barcode printer.................................................................................63 Business park and community centre ..............................................11 Cantilever rack .................................................................................62 Cargo storage service .......................................................................61 Cold form C & Z purlin ..............................................................FIC Conveyor logistics management ....................................................3,25 Damco logistics ................................................................................17 EOT and HOT crane......................................................................63 Fleet management service .............................................................BIC Foldable plastic crate ..........................................................................4 Folding large container (FLC) ...........................................................4 Heavy industrial steel building......................................................FIC Hydraulic crane ................................................................................63 Hydraulic handlift pallet truck ........................................................61 Innovasia 2013 ...................................................................................6 Logistic service ........................................................................... 7, BC
Advertisers’ Name & Contact Details
Pg No
Alpha Analytics Services Pvt Ltd
BIC
Products
Pg No
Metal pallet ......................................................................................61 Multi level car park .......................................................................FIC Pallets .................................................................................................4 Poly carbonate sheet......................................................................FIC Port ...................................................................................................11 Pre engineered steel building ........................................................FIC Pre fab shelter ...............................................................................FIC Residential steel house ..................................................................FIC Roof vent .......................................................................................FIC Roofing and cladding sheet ..........................................................FIC Scissor lift table ................................................................................60 Specialised storage and transport .....................................................17 Structural floor decking sheet .......................................................FIC Trolley ..............................................................................................60 Uss univent ....................................................................................FIC Vehicle tracking service .................................................................BIC Warehousing / logistic .....................................................................11 Weighing terminal ...........................................................................63 Workforce accommodation ..............................................................11
Advertisers’ Name & Contact Details
Pg No
Engineering Expo
8
Advertisers’ Name & Contact Details
Pg No
Safexpress Pvt Ltd
7, BC
T: +91-20-25897063
T: +91-9819552270
T: +91-1800-113-113
E: vivek.rane@alpha-analytics.com
E: engexpo@infomedia18.in
E: suyash.srivastava@safexpress.com
W: www.alpha-analytics.com
W: www.engg-expo.com
W: www.safexpress.com
Chep India Pvt Ltd
4
Innovasia 2013
6
Schaefer Systems International Pvt Ltd
T: +91 022 67839400
T: +91-9978904476
T: +91-022-61114700
E: Savio.Pimenta@chep.com
E: support@gisindia.org.in
E: schaefer@ssi-schaefer.in
W: www.chep.com
W: www.innovasia.in
W: www.ssi-schaefer.in
Damco India Pvt Ltd
17
Kizad (PHD Abu Dhabi )
11
United Steel & Structurals Pvt Ltd
3, 25
FIC
T: +91-022-33088249
T: +971 (0)4 4574570
T: +91-44-42321801
E: Commercial.India@damco.com
E: Mohammed.Halawi@phdnetwork.com
E: admin@unitedstructurals.com
W: www.damco.com
W: www.kizad.com
W: www.unitedstructurals.com
Our consistent advertisers COC = Cover-on-Cover, FIC = Front Inside Cover, BIC = Back Inside Cover, BC = Back Cover
64 • SMART LOGISTICS • DECEMBER 2012
Use this form for free additional Information on advertisements published in this issue. We will send your inquiries to the advertisers and ask them to send you the details or contact you directly.
HOW TO USE THIS FORM: • Please tick against the box of advertiser(s) you are interested in: • Mention specific product/service you need, against the advertiser’s name • Complete all the details on this form. • Tear the form & mail it to us. (It is a prepaid mail) Tel.: +91-22-3003 4640 • Fax: +91-22-3003 4499
E-mail: b2b@infomedia18.in PRODUCT INQUIRY FORM Adjustable pallet rack
Metal pallet
Aluminum crane system
Multi level car park
Auto FLC
Pallets
Automative part tracking
Poly carbonate sheet
Barcode printer
Port
Business park and community centre
Pre engineered steel building
Cantilever rack
Pre fab shelter
Cargo storage service
Residential steel house
Cold form C & Z purlin
Roof vent
Conveyor logistics management
Roofing and cladding sheet
Damco logistics
Scissor lift table
EOT and HOT crane
First Fold Here
Specialised storage and transport
Fleet management service
Structural floor decking sheet
Foldable plastic crate
Trolley
Folding large container (FLC)
Uss univent
Heavy industrial steel building Hydraulic crane
Vehicle tracking service
Hydraulic handlift pallet truck
Warehousing / logistic
Innovasia 2013
Weighing terminal
Logistic service
Workforce accommodation
Second Fold Here
ADVERTISERS’ INQUIRY FORM Alpha Analytics Services Pvt Ltd
Kizad (PHD Abu Dhabi)
Safexpress Pvt Ltd
Damco India Pvt Ltd Schaefer Systems International Pvt Ltd
Engineering Expo
United Steel & Structurals Pvt Ltd
Innovasia 2013
Third Fold Here
GLUE
Chep India Pvt Ltd
Please complete the following & get a quick effective response from suppliers:
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12 / 2012
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