Smart Logistics - January 2012

VIEWPOINT

TAKE A REVERSE GEAR THE word ‘backward’ dons a positive connotation when attached to this flow. Imagine this. A new laptop turns out to be defective, the consumer returns it to the retailer, who, in turn, returns it to the distributor, who, in turn, gives it back to the manufacturer. This causes consumer dissatisfaction, cash lockdown for the retailer, and a rise in the distributor’s inventory. This is where a reverse logistics company steps in to reduce the time and cost involved in the backward chain. Get the point? Not really, it seems India still is just warming up to the idea of reverse logistics.

With every cost under keen scrutiny, more than ever, companies are looking at all the probable and the not so probable places to eliminate waste and optimise cost. One of the not so probable places that they are looking lately at is the return wagons, trucks and vessels. They are asking some pointed questions like what is the percentage of products they sold that were returned by customers, what it costs to process a return and what percentage of the value of a returned product they managed to eventually recover. Sadly, there are no clear answers, leave alone the solutions, because a concept of reverse logistics is still that…a concept.

It’s primitive not to have reverse logistics as part of your core plan. How can the process of moving a product from the consumer – the typical final destination – to the manufacturer, the point of origin, for reuse or disposal, not be part of any company’s core strategic plan? But as we talk, India is still to warm up to the fact as to what critical role does reverse logistics play for the whole value chain now and, more so, in future with the compliance of the government’s e-waste regulations, being implemented actively.

It is also a reality that in any of the booming hi-tech economies elsewhere around the globe, the message from the retailer, distributor and OEM management since the dawn of the sales explosion has been simple: sell as much as possible, as quickly as possible and dominate the market share. But in all this reverse logistics is somewhere ignored, which is later realised when it is too late as the complexity and heartache involved with setting up an efficient service supply and return network gets all the more complicated.

And the importance of reverse logistics gathers another magnitude and complexity when it comes to India. Reason? India is a big country with big challenges — one-sixth of the world’s population residing in a country only one-third the size (by land mass) of the US divided into 28 individual states, each with its own intricate tax and governmental regulations. Couple that with the booming economic growth – particularly in the consumer goods market – and this means a potential recipe for disaster when it comes to managing reverse supply chain. Or shall we say potential recipe for success, as this industry knows how to turn an adversity into advantage!! So take a reverse gear, and profit!

Archana Tiwari-Nayudu archana.nayudu@infomedia18.in

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GUEST EDITORIAL

1. Can you measure post-sales service quality as COMPETE WITH SUPPLY CHAIN EXCELLENCE experienced by your customers returning merchandise and can you meet the Today, the right RL strategies are inevitable surge in their expectations? critical to the success of all returns 2. Have you planned for increased returned management programmes. Without goods inventory levels and the associated a well-thought through approach to management, return and securing the most economical repair hubs, and logistics cost and effective transportation and Lloyd Sanford, impacts? warehousing covering highly MD, Applied Logistics India 3. Can you accurately project reliable returned goods flows, firms spare parts purchasing and will find themselves explaining distribution points? huge additional cost hits to their SC and bottom line and 4. Does your SCM strategy and resources fully embrace why their clients are being won over by competitors who accessing the lowest cost, most effective Reverse Logistics demonstrate a higher level of customer care. services structure across both urban and rural India?

There is a steady increase in the number of Indian firms 5. Are you ready to meet the new Indian Government waking up to market reality as it regards RL and assuming regulations on e-waste management coming into effect the correct level of returned merchandise responsibility. early next year?

However, many still struggle from a lack of in-house logistics If you are in the electronics, retail or e-commerce resources with the know-how for efficient RL set-ups. Few markets and have not given adequate consideration to the realise that there are typically 12 RL events for every one above questions, you will most likely face tough customer forward logistics event. relationship, supply chain and logistics management hurdles One of best options for all sizes of companies is to going forward; hurdles that could negatively impact client outsource RL to proven players. Privately owned local retention and drive up inventory handling and logistics costs Indian firms such as Sequel Logistics, Uniworld Logistics across these sensitive market sectors. and DTDC understand how to design, implement and It would be valuable to take the time needed to assess sustain predictable levels of SCM & logistics services at where you stand in relationship to your firm’s reverse affordable prices based on the most modern, lowest cost logistics (RL) and related returns management (RM) skills of ownership technology for a 100 per cent audit trail and and capability. What is your exposure to service failures? cross SCM partner collaboration. ShipX is an example of How good a job is your SCM team doing today and can pure web-based collaborative TMS designed specifically to they handle RM and RL challenges? What is your level of economically and effectively link Indian shippers, carriers customer service proficiency and does it cover returns? Will and 3PLs. your business growth strategy take you deeper into needing If you have any doubt about what it takes to maintain to better manage post sale customer service expectations? In sustainable value in a well-run RL operation, take a look at the US, it is estimated that over 30 per cent of e-commerce India’s own ‘homemade’ system run by dabbawallahs for the sales are returned to stores.

Mumbai lunch rota; simple but effective.

In India, electronic goods have high return rates due to power surges. However, adding to return volumes, leading ENHANCE YOUR VALUE CHAIN BY EMPOWERING YOUR electronic goods OEMs such as Lenova, are stepping up SUPPLY CHAIN customer commitment levels by giving 15 days grace period In this issue, Smart Logistics covers the edge of SC excellence to return purchases. Nokia, LG, Whirlpool and other market with articles rich in ideas for improving your supply chain leaders are bolstering RL operations and competitors are management frontiers. We hope that the takeaways assist sure to follow the rise in service as the collective customer our readers gain a better SCM understanding in the RL voice demanding proper product exchange practices gains in world. We want you to realise meaningful total business volume and market reach. value chain enhancements through smart logistics practices.

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CONTENTS ‘Managing reverse logistics is far more complex and different from forward logistics’

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Hitendra Chaturvedi, MD & CEO, Reverse Logistics Company

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Enhancing The Supply Chain Experience

E-waste Management Reverse Logistics Is Good Economics

Reverse Logistics Operations Gaining Pace With The Third Wheel

‘India offers an extremely large market and in future, this will grow increasingly'

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Dr Veit Steinle, Director-General, Environmental Policy and Infrastructure,

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Basic Supply Chain Concepts: A Thing Of The Past?

Lean Guiding Principles Paving The Way For Supply Chain Leadership

Guide To Inventory Accuracy 10 Ways To Improve Warehouse Management

The Choice Mirroring Real Life Experiences

ALSO IN THIS ISSUE 3 TECHNOLOGY & INNOVATIONS CUTTING-EDGE SOLUTIONS 5 SUCCESSFUL S&OP IMPLEMENTATION: Facilitating Integrated Business Planning

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NEWS ANALYSIS

PRICE TRENDS

Supply Chain Manager’s Diary

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BOOK REVIEW

NEWS, VIEWS & ANALYSIS

GOGREEN: An End-to-end Carbon Neutral Service EU ETS: Not A Healthy Option For Cargo Carriers?

A Tax Free Haven For Investors

TIPS & TRICKS

POLICIES & REGULATIONS

Latest Happenings In The World Of Logistics

Salalah Free Zone

Establishing The End-to-end Connect

AUTOMATION TRENDS

GUEST EDITORIAL

Achieving Efficiency Across The Transportation Network

4PLs In India

Departmental Policy Issues, Federal Ministry of Transport, Building and Urban Development, Germany

VIEWPOINT

Case Study: General Motors De Mexico

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STRATEGY

IN CONVERSATION WITH

Will Indian Ports Reap The Benefits?

Exploring A World Of Opportunities Optimising Logistics Opportunities For Aluminium Plants

Benefits Of Reverse Logistics

Tax Free Bonds

Indian Mineral Logistics Market Railway Transportation Facilities

Reverse Logistics Growth Imperatives: Maximising Value, Minimising Costs

6 Ways To Enhance Supply Chain Efficiency

JANUARY 2012

INSIGHTS & OUTLOOK

SPECIAL FOCUS: REVERSE LOGISTICS

Apps For WMS

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FUTURE SUPPLY CHAINS ACQUIRES TRANSMART INDIA’S 3PL BUSINESS FUTURE Supply Chains, Future Group’s supply chain and logistics company, has recently acquired the warehousing business of Transmart India, by taking over a state-of-the-art distribution centre facility along with the existing business with effect from November 1, 2011.

Future Supply Chains has been expanding its infrastructure rapidly over the past two years and the latest addition is part of its expansion strategy. With this acquisition, Future Supply Chains not only gets the best distribution centre facility in the Western Region of India but also inherits Transmart’s customers, thereby giving Future Supply Chains a jumpstart in acquisition of customers for its Contract Logistics Division outside Future Group.

Future Supply Chains is also in talks with Transmart to take over their Delhi and Bengaluru warehousing

operations and hence, completing the acquisition of the entire warehousing (also called 3PL in industry parlance) business of Transmart. Speaking on the occasion, Anshuman Singh, MD & CEO, Future Supply Chains Solutions, said, “We are very excited about this acquisition, which expands the scale and range of Future Supply Chains offering to clients and also gives us a jumpstart with acquisition of Transmart’s customers.”

With over 350 customers already acquired by Future Supply Chains’ FSC Express business, the acquisition of Transmart’s 3PL business will give 14 major companies as customers to Future Supply Chains’ FSC Contract Logistics business. Transmart is a perfect fit in the overall DNA of Future Supply Chains, whether it is the size and scale of operations or the technology and automation in the warehouse.

BROEKMAN LOGISTICS INDIA SELECTS ARSHIYA’S FTWZ AS ITS DISTRIBUTION HUB BROEKMAN Logistics India, a subsidiary of Netherlands-based Broekman Group, a 51-year-old, $335 million-turnover company has begun utilising Arshiya’s FTWZ in Panvel, Mumbai, as a hub for all of Broekman’s distribution activities into India.

Operating as the unit holder in the zone, Broekman Logistics India will be using the FTWZ in Mumbai to cater to their India-based customers, especially in the chemical and engineering products segment. The zone will be the central hub for all imports of Broekman Logistics India, for serving their customers across India. Rajiv Nathan, VP – Indian Operations, Broekman Logistics India, commented, “From initially starting our operations in June, 2011, at Arshiya’s FTWZ near JNPT, we have already scaled our operations into the second phase with expanded space as we are successfully offering vendor managed inventory solutions

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to our customers in the chemical and engineering space. This kind of stateof-the-art infrastructure and integrated logistics framework is common in many parts of the world, but is only now available in India. This will go a long way in helping our global clients enter & expand their India operations and capitalise on the Indian opportunity.”

Commenting on the deal, Ajay S Mittal, CMD, Arshiya International, said, “With the availability of world-class state-of-the-art logistics infrastructure such as our FTWZ in India, leading companies such as Broekman can leverage on India’s strategic location between South East Asia and the Middle East to make India their regional import and distribution hub. We are proud to be of service to a truly multinational 3PL company, such as Broekman, that has been providing services for over 50 years and look forward to enabling their business in India.”

Transmart’s facility has a footprint of ~2 lakh sqft with a height of upto 17 metre, thus resulting in ground plus six levels of storage, which not only makes it the largest of warehousing facilities in the Western Region but also one of its kind. The facility has very narrow aisle (VNA) racking of approximately 25,000 pallet positions.

VNA man-up turret trucks facilitate efficient operations. All pallet positions are barcoded for easy track and trace of inventory. The cold storage area with a capacity of 4,000 pallets has differential temperature control and double-door inner chamber to protect the goods from dust and water. Over 14 vehicles can be loaded or unloaded simultaneously at the dock doors.

Dock levers provide access to all types of vehicles and help serve a multitude of companies. Operations are WMS and RF-enabled, which facilitate realtime updation of inventory status.

SCI ACCEPTS DELIVERY OF SUPRAMAX BULK THE Shipping Corporation of India (SCI) accepted the delivery of Supramax Bulk carrier m.v.

VishvaBandhan recently. The vessel is the third vessel of SCI’s six Supramax bulk carriers ordered at STX (Dalian) Shipbuilding Co, China. Orders for these vessels were placed in December 2007. The remaining three vessels are scheduled to be delivered to SCI in a phased manner by March 2012.

These vessels were ordered as part replacement of SCI’s existing Daewoo series Handymax bulk carriers, which were built around 1986-87. With induction of these vessels, the overall age profile of SCI’s bulk carriers would improve significantly. m.v.

VishvaBandhan has a gross tonnage of 33,185 tonne and deadweight of 57,196 tonne. The vessel has been classed with DNV and IRS and has been built to comply with the latest and most stringent international regulations.

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TCIF ORGANISES ‘TRUCKER UTSAV’ TO MARK CELEBRATIONS OF WORLD AIDS DAY THERE are about 5 million truckers in India, who travel across 3.3 mn km of India’s road network, of which an estimated 2 million truckers travel on long distance routes of 8,000-10,000 km on an average in a month. The overall prevalence of HIV/AIDS among long-distance truckers has been reported to be 4.6 per cent which is 12 times higher than the prevalence among men in general population.

In an effort to acknowledge the contribution of truckers in our everyday lives, TCI Foundation (TCIF) – the social arm of Transport Corporation of India – organised a nationwide event ‘Trucker’s Utsav’ at 73 transshipment locations across the country. The activity was organised as part of the events held to observe ‘World AIDS Day’ under the National HIV/AIDS prevention programme among long-distance truck drivers and helpers, which is an endeavour to arrest the spread of AIDS among the trucking community, supported by National AIDS Control Organization.

‘Trucker’s Utsav’, an infotainment event, forms one of the core activities of national programme, as it acts as a catalyst for communicating behaviour change messages to sizable groups in a fun and peer-supportive context.

Speaking about the initiative, Dr Indra R Singh, Project Director, TCIF, said, “Being the leading logistics company in India, we think it is our responsibility to make life better for truckers who are the lifeline of this sector. ‘Trucker’s Utsav’ is an annual feature of TCIF that provides a platform to bring thousands of truckers together to spread the message of prevention of HIV/AIDS and sexually transmitted diseases in an interesting, entertaining and stimulating way. We realise that owing to the nature of the work of the truckers, they are highly vulnerable to AIDS and other related diseases.”

The event saw the active participation of over 30,000 truckers who will be joining hands with TCI Foundation and vow to fight HIV/AIDS.

MICT HANDLES LARGEST SHIP TO CALL AT AN INDIAN PORT THE state-of-the-art Mundra International Container Terminal (MICT) operated by DP World, witnessed the berthing of the largestever container vessel to call at any Indian port. The APL Italy has a length of 334 mt and, with a carrying capacity of 8,402 TEU, is also the largest APL vessel to call in India.

“Pushing boundaries and challenging the status quo is what sets us apart from our competitors. APL’s decision to bring the APL Italy to MICT reflects the growing faith of global shipping lines in the potential of the infrastructure we have built at Mundra port,” said Anil Singh, Sr VP & MD, DP World Subcontinent. Speaking at the occasion, Ramji Krishnan, CEO, MICT, said, “This is an important milestone for us in MICT, and endorses our capability to handle the

largest mainline container vessels with the highest productivity standards.”

As one of the most sophisticated and technically advanced port facilities in the Indian subcontinent, strategically located at Mundra port in Gujarat, MICT is the closest gateway to the largest cargo generating regions of North and Northwest India. Open all year round with no tidal restrictions, MICT has an ability to handle some of the deepest container vessels afloat today. From its inception in 2003, MICT has had alternative thinking as part of every aspect of its business. The result speaks clearly through the volume it handles today, and the confidence it has built up within the trading community. From handling 20,000 TEUs in its first year of operations, today MICT has developed the port into a million TEU port.

L O G I S T I C S

TNT EXPRESS SELLS DOMESTIC ROAD BUSINESS IN INDIA TNT Express recently announced the sale of its domestic road operations in India to a logistics subsidiary of India Equity Partners (IEP), in order to focus on its international business. The decision comes after an extensive review of the prospects for the domestic road business in India within TNT Express’ business portfolio. The sale took effect from December 30, 2011.

TNT Express will continue to offer inbound and outbound India services, via its globally interconnected networks. It will also continue to provide customerspecific special services, in particular, to the healthcare and service logistics segments.

TNT and IEP will work together to ensure a seamless transition. The domestic road senior management and most employees (approximately 1,000) will move to the new employer. On-the-ground facilities, IT and systems & processes will be supported by TNT Express during the transition process. IEP’s logistics subsidiary will become TNT Express’ preferred partner for domestic road delivery in India.

Meanwhile, the company reinforces its presence in centralwestern France with the opening of a new depot in Poitiers. Several medical, aeronautics, textile and agricultural firms are located in the area. TNT has been active in Poitiers and the Vienne County for 10 years, serving more than 160 companies, such as outdoor clothing maker Aigle International. Built in eight months, the new 1,400 sqmt depot is twice the size of the previous one. It is also located closer to TNT’s largest regional customers.

The depot’s size and automated sorting equipment will enable TNT to process 30 per cent more parcels per day.

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ASIA-EUROPE SPOT RATE JUMPS 7.4% THE average spot rate for container shipping from Asia to Europe jumped 7.4 per cent recently, part of a broad increase in pricing on east-west trade lanes that sent the Shanghai Containerised Freight Index (SCFI) to its first increase in more than four months. The 0.4 per cent uptick in the Shanghai Shipping Exchange’s overall SCFI came as ocean carriers sought to implement new price increases ahead of an early Chinese New Year that may push a short, sharp upsurge in demand.

Meanwhile, United Arab Shipping Company (UASC) will seek a general rate increase on the westbound trade from the Indian subcontinent, Red Sea and the Arabian Gulf to North Europe and the Mediterranean, starting January 15, 2012. The planned increase on dry and refrigerated cargo will be $100 per TEU. The Middle East-based carrier earlier hiked its rates on the same route with a peakseason surcharge of $200 per TEU,

JOC ECONOMISTS EXPECT EXPORT GROWTH TO SLOW IN 2012

which came into effect on December 16. UASC’s move follows a $200 perTEU GRI announcement by German carrier Hapag-Lloyd on the Indian subcontinent-Europe-Mediterranean trade lanes, effective February 1.

Hapag-Lloyd imposed an ‘emergency revenue charge’ on all containers moving from the Indian subcontinent to the US and Canada.

The planned charges, starting January 20, will be $320 per 20-foot container, $400 per 40-foot container, $450 per 40-foot high cube container and $506 per 45-foot high cube container.

Separately, it will apply a general rate increase on westbound trade from the subcontinent to Europe and the Mediterranean, effective February 1. All cargo bound for destinations in the north continent, East/West Mediterranean and Black Sea region will attract an increase of $200 per TEU. The subcontinent region includes ports in India, Pakistan, Sri Lanka and Bangladesh.

US containerised exports are expected to rise 3.8 per cent next year after a 5.8 per cent gain this year, Journal of Commerce Economist Mario O Moreno said. Moreno’s latest estimate was a downward revision of his previous forecast, which called for a 5.7 per cent increase in containerised exports in 2012.

He cited weakening European economies, slower growth in Asian demand and a strengthening dollar.

Slumping European markets caused US containerised exports in October to drop 3 per cent from a year earlier to 10,08,273 TEU, PIERS data show. Exports increased 10.3 per cent in September. Through October, the volume was up 7.1 per cent year-over-year. “The demand from Europe continues to decline as European economies struggle with ongoing sovereign debt problems and decelerating manufacturing activity,” Moreno said. Following flat growth in the third quarter, exports to Northern Europe dropped 7 per cent in October, driven by declines of 38 per cent in shipments of motor vehicles, 29 per cent in paper and paperboard and 23 per cent in wood pulp. Shipments to Italy fell 11 per cent, or 4,981 TEUs. Significant declines were also seen in South American markets, particularly Brazil, where a marked slowdown in economic activity led policymakers to reverse monetary tightening.

PANALPINA OPENS LOGISTICS FACILITY IN NORTH CHINA PANALPINA recently opened a 32,800-sqft logistics facility in North China, which will become the Swiss logistics group’s hub in the growing region. The company said that Tianjin is primed to become the logistics hub for North China because of the city’s geographical advantages and infrastructure, which includes the region’s largest port, an international airport and high-speed rail connections.

Bosch Automotive Diesel Systems will operate in about half of the facility.

“We are establishing a truly integrated supply chain network in China that combines international air and ocean freight with comprehensive value-added logistics and supply chain services. The Tijiana facility will provide VAS, together with cross-docking for air and ocean freight shipments,” said Mike Wilson, Global Head – Logistics, Panalpina, which plans to open more logistics facilities in China over the next three years.

DAMCO ANNOUNCES NEW CEO FOR EUROPE DAMCO has appointed Flemming Frost as the new CEO for Europe. His major task will be to grow Damco’s market presence. Frost, 49, will from January 1, 2012, assume the role as CEO for Damco’s activities in Europe, replacing Kim Hedegaard Sorensen.

“Damco has a strong team in Europe and an exciting portfolio of customers, which will enable further growth,

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both in mature and developing markets. The current economic climate puts a lot of pressure on customers supply chain and transportation related costs. I believe Damco is well positioned to help reduce these costs,” said Frost.

Frost has been with the AP MollerMaersk Group for 27 years, and comes from a position in Damco North Asia

overseeing the branch operations in Mainland China, Hong Kong and Taiwan. He has held different positions in North Asia over the past 7 years. He will be part of the Damco Global Leadership Team and report to Rolf Habben-Jansen, CEO, Damco.

He will be working from the Damco European Regional Head Office in Rotterdam.

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SØRENSKOU APPOINTED NEW CEO OF MAERSK LINE SØRENSKOU has been appointed new CEO of Maersk Line with effect from January 16, 2012. Skou served as CEO of Maersk Tankers and replaces Eivind Kolding. Kolding joins Danske Bank as Chairman – Executive Board. “Under Eivind Kolding’s skilled leadership, Maersk Line has undergone an impressive turnaround. Its competitiveness has improved significantly and at the same time, Maersk Line has set new standards for the industry with regards to environment and reliability.

Furthermore, Maersk Line has got a much stronger focus on customers,” said Nils S Andersen, Group CEO – AP Moller, Maersk.

“I am very pleased that SørenSkou has accepted the important task as CEO of Maersk Line. Skou is a sharp and visionary leader with strong international leadership experience, not least within shipping. He understands container shipping very well from the time he worked for Maersk Line, as

well as when he was a member of the Group’s Executive Board where he has stayed in close touch with Maersk Line and the industry. He is the right man to continue the development of Maersk Line and expand our positions in the market,” added Andersen.

Skou previously held various positions in Maersk Line, from 1983 to 1998. In addition to being CEO of Maersk Tankers since 2001, he has played an important part in the Group’s Executive Board. He has, among others, headed the Group’s initiatives to reduce costs in 2009 and 2010. In 2011, he has been the leader of the Group’s preparations for further expansion in the new growth markets.

In order to concentrate fully on the tasks in Maersk Line, Skou’s additional positions will gradually be transferred to others in the Group. The Group expects to fill the position as new CEO of Maersk Tankers internally.

Until then, all of Skou’s direct reports will report directly to Andersen.

MUNDRA PORT HANDLES RECORD FERTILISER CARGO OF ABOUT 1 MN TONNE IN NOVEMBER MUNDRA Port and Special Economic Zone (MPSEZ) recently announced that its Mundra Port has handled a record 9,84,000 metric tonne of fertilisers in November, thus making it one of the largest fertiliser handling ports in the country.

Mundra Port, which is also India’s fourth largest commercial port, is wellequipped to handle around 20 per cent share of India’s annual fertiliser imports that currently stand at 22 million tonne thanks to its dedicated and fully mechanised fertiliser cargo complex with a total capacity of 5,00,000 metric tonne. The state-of-the-art facility is viewed as a boon by fertiliser distribution firms due to its automated fertiliser bag filling system. Around 810 rakes are loaded on a daily basis, thus evacuating cargo in excess of 25,000 metric tonne a day against about four rakes in a leading major port in the

region. “We, at Mundra Port, aim to capture the top slot in the country for handling imported fertiliser cargo also as we did with coal. High level of mechanisation, technology, our robust processes and committed employees are behind this success,” said Capt Unmesh Abhyankar, COO, MPSEZ. With India’s fertiliser imports slated to rise, Mundra Port aims to break its own record and capture a higher share of the imported fertiliser cargo in the next few years.

Earlier, in November, Mundra Port transported a record cargo of imported coal at its West Basin terminal, Asia’s largest coal handling facility. It has also commenced double stack container trains to help control transportation costs. The trains are running from Mundra Port to Patli near Gurgaon, Haryana, thus connecting northern India to the west.

L O G I S T I C S

CHIEF SUPPLY CHAIN OFFICERS’ CONGREGATION TO BE HELD IN FEBRUARY IN a first-of-its-kind attempt to empower and arm Chief Supply Chain Officers (CSCOs), Chief Procurement Officers, Chief Operating Officers and the likes to elevate the role of supply chain management to the C-Suite and the board rooms, the Supply Chain Leadership Council will be organising India Chief Supply Chain Officers Congress is to be held in Mumbai on February 2 and 3. The congress also aims to create a concerted push for greater outsourcing of logistics by establishing its rationale and economics jointly between service users and service providers. The congress, therefore, is pivoted around the acceleration of growth as well as sophistication in India Inc.’s supply chain operation and, in turn, the Indian 3PL industry.

The event is expected to attract senior representatives from the Indian manufacturing and retail industry to learn and share global best practices driving strategic supply chain management across multiple industry sectors. Apart from this, the logistics service providers and infrastructure developers will benefit by networking with the who’s who of Indian manufacturing and retail industry, their main client base and mutualising strategic and operational challenges.

Apart from the full-day discussions; there will be a parallel expo weaved together with cocktails, field trips and India’s first forklift championship. “The event will centre around gathering scores of CSCOs who, on one hand, form the biggest repository of Indian SCM knowledge, they are also the keys to the overall logistics spend in India,” informed Gautami Seksaria, Founder & Partner, Supply Chain Leadership Council.

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ARAMEX ACQUIRES LEADING SOUTH AFRICAN LOGISTICS COMPANY ARAMEX, the global logistics and transportation solutions provider, completed the acquisition of Berco Express, one of South Africa’s leading logistics and transportation companies.

It operates 15 branches throughout South Africa, and employs more than 700 people.

The strategic acquisition of Berco Express follows Aramex’s recent venture into the Chinese market with the launch of the joint venture company with SinoAir, and the acquisition of OneWorld Courier and In-Time Couriers in Kenya in the first quarter of this year. “Aramex has, for some time now, viewed South Africa as a highly

attractive market with a businessfriendly environment and significant growth prospects, and our acquisition of Berco Express, a company that we have long admired for its great culture, brilliant management and leading brand, will introduce exciting growth and development opportunities for us in Africa. This acquisition, which is in line with our long-term strategy to strengthen our presence in key emerging markets around the world, is a major step towards the realisation of our goal of being the logistics and transportation company of choice in those markets,” said Fadi Ghandour, Founder & CEO, Aramex.

LUFTHANSA CARGO OPENS NEW CENTRE FOR TEMPERATURE-CONTROLLED FREIGHT IN FRANKFURT LUFTHANSA Cargo started operations at its new facility for temperaturesensitive freight in Frankfurt. The Lufthansa Cargo Cool Centre was built in just six months. It is equipped with four cool storage rooms for four different temperature ranges as well as a deep-freezer cell on an area of 4,500 sqmt.

From now on, all temperature-controlled shipments carried by the airline in Frankfurt will pass through the new facility. “Our Cool/td product is assuming ever-increasing importance for Lufthansa Cargo thanks to growth rates of 15 per cent. The Lufthansa Cargo Cool Centre will enable us to ship temperaturecontrolled freight faster, more reliably and more efficiently at our Frankfurt hub, and further expand our position as a leading provider of cool transports,” said Andreas Otto, Board Member – Product and Sales, Lufthansa Cargo.

Lufthansa Cargo earmarked substantial capital expenditure last year in the Cool/td product. Besides investing in the development of the Opticooler, the industry’s state-of-the-art and most efficient cooling container, the cargo carrier commenced operations at its first international pharma hub at Hyderabad.

Reliable cool transports are imperative in the pharmaceuticals industry. Medicines, vaccines or insulin must frequently be transported within narrow temperature margins, which need to be rigorously maintained from start-to-finish of the transport chain.

ETIHAD SIGNS ACCOUNTING OUTSOURCING DEAL WITH KALE CONSULTANTS ETIHAD Airways has recently outsourced the accounting of passenger and cargo revenues to aviation accountancy specialist Kale Consultants from April 2012. James Rigney, CFO, Etihad Airways, said, “Revenue accounting plays a critical role in our fast paced growth and we want to align our process to industry leading practices and quality. We have chosen Kale because of their strategic

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focus, leading-edge technology and expertise in revenue accounting.” Vipul Jain, CEO & MD, Kale Consultants, said, “We are delighted to have Etihad as our customers. We are confident of delivering strategic value to support Etihad’s fast-paced, dynamic growth.”

Kale Consultants, an Accelya Group company, employs over 1,400 people and has more than 100 clients into aviation across 30+ countries.

L O G I S T I C S

DHL REDEFINES FULL TRUCK LOAD SERVICES IN INDIA DHL Supply Chain, the leading contract logistics specialist, recently announced the launch of its Full Truck Load (FTL) services in India.

Increasing supply chain complexity and changing customer requirements made it necessary for the company to redefine FTL services in India and offer it to customers. In line with its strategy, DHL Supply Chain’s transport offering will use containerised vehicles of various capacities.

Apart from the standard FTL service, it is also introducing a unique approach, ‘carry more for less’, which develops customised delivery solutions for efficient distribution of products across the country. This includes, inbound to manufacturing, milk runs, customised vehicle design, a dedicated fleet, improved handling and network designing.

“Simplifying solutions and expanding into this market, allows us to serve companies in India to transport goods across the country through our extensive network and definite transit schedules.

We will bring strategically located dedicated branches to support domestic trucking needs along with our team of professionals who will support our customers’ business requirements,” said Vikas Anand, COO, DHL Supply Chain India.

According to Les Kawoh, Director – Transportation, DHL Supply Chain India, “Our key differentiator is our customer commitment driven by an open communication and standardised processes using IT tools to enhance visibility and productivity.” DHL Supply Chain has ambitious plans to open 17 new branches in strategic business locations, which will provide its customers improved reach to important markets, especially once the GST is rolled out.

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SCHMIDT AND AGILITY LAUNCH DRY BULK SUPPLY CHAIN JOINT VENTURE AGILITY, a leading global logistics provider, and Schmidt Heilbronn, a leading European dry bulk chemicals logistics provider, recently launched SAMEL, a joint venture. This partnership will address the sharply increasing need – especially across the Middle East – for dry bulk solutions

Brazilian Airport Authority recognises Agility with ‘Logistics Efficiency Award’ Agility recently received top honours at the 2011 Logistics Efficiency Award ceremony hosted by Infraero, the Brazilian Airport Authority. This year, Agility was recognised for its freight forwarding performance for its client, Itautec. “We are honoured to accept this award and thank Infraero for recognising Agility’s strengths in this competitive field. In Brazil and around the world, we believe that our brand of personal service, robust operations and global network are what make a difference in day-to-day freight forwarding and logistics,” said Ricardo Sapag, CEO, Agility Brazil.

Agility was judged on its ability to quickly and efficiently release cargo against parameters set by Infraero’s Ranking of Logistics Efficiency.

on the back of rapid growth in chemical manufacturing in the region.

The JV combines Schmidt Heilbronn’s specialised expertise in bulk polymer logistics with Agility’s global logistics network, strength in emerging markets and in-house chemicals specialty.

SAMEL’s focus will be on the Middle East and other major developing economies around the world. The collaboration brings to the market – and to its customers – a complete package from design and construction to ongoing supply chain management, operations and dry bulk transport.

“Schmidt and Agility are delivering the right solution to the market at the right time. We now have everything we need under one roof to meet customers’ needs across the Middle East and beyond, including tailored financing packages, turnkey construction and modern, reduced carbon footprint freight methods,” said Andrew Jackson, President & CEO, Agility Chemicals.

The companies have previously worked closely on the massive Shanghai Logistics Hub project, one of the biggest facilities of its kind in China.

ASIA MANUFACTURING SUPPLY CHAIN SUMMIT TO BE HELD ON JANUARY 23-24 THE Asia Manufacturing Supply Chain Summit (AMSCS) is scheduled on January 23 & 24 at Taj Lands End, Mumbai. The summit will focus on ‘Powering Growth Through Innovation And Integration’. In this unique platform, participants can share ideas and challenges with colleagues who are on the same level, get latest information on how economic trends are impacting the future direction of Asian manufacturing supply chain and develop strategies to transform the organisation by creating a continuous improvement culture among others.

People from the industry will also get a chance to identify how to implement best practices and lean management systems across worldwide operations, gain insight into how to implement six sigma practices without reducing profits and advance manufacturing supply chain programmes further. The event will also include in-depth presentations providing the industry people with the most choice possible across all manufacturing supply chain disciplines. Case studies from experts detailing practical advice and best practice for all manufacturers will also be part of the summit.

More than 200 senior level attendees are expected to be a part of this summit, apart from around 40 industry expert speakers and more than 15 exhibitors.

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GRAND, NEW WORLD SHIPPING LINES CREATE NEW FAR EAST-EUROPE ALLIANCE SIX leading container shipping lines have agreed to create one of the largest vessel networks in the Far East-to-Europe trade lane.

The comprehensive agreement will bring together members of The New World and Grand alliances to create The G6 Alliance.

The New World Alliance members are APL, Hyundai Merchant Marine, and Mitsui OSK Lines.

The Grand Alliance members are Hapag-Lloyd AG, Nippon Yusen Kaisha and Orient Overseas Container Line.

The new partnership will create one of the leading networks in the Far East-to-Europe and Far East-to-Mediterranean container shipping markets with more than 90 ships in nine services calling at more than 40 ports in Asia, Europe and the Mediterranean. The integrated cooperation of these six lines will enable product and service features to be easily adjusted to market requirements.

The new alliance is scheduled to begin operation by April 2012 with seven joint services operating between Asia and Europe and two services to the Mediterranean. It includes a direct Far East-Baltic service with calls at Gdansk, Poland and Gothenburg, Sweden as well as transshipment in Singapore.

Member carriers said that the new alliance will be characterised by fast transit times, broad port coverage and the latest vessels, with capacities of up to 14,000 TEU. The new alliance will enable the most efficient integration of the largest ship sizes that will be introduced over the next 30 months. The nine joint services will offer more frequent departures with daily sailings from the major Asian, European and Mediterranean ports.

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NEWS ANALYSIS GOGREEN

AN END-TO-END CARBON NEUTRAL SERVICE Green is gaining prominence in every business, so much so that organisations are coming forward with innovative service offerings to mitigate carbon emissions. Having global expertise in managing carbon footprints, DHL & Blue Dart, rolled out GOGREEN Carbon Neutral Service. This service aims at giving customers the option to neutralise their carbon footprint and build a cleaner, safer environment for the current and future generations.

PRERNA SHARMA

THE stiff competitive environ coupled with climate mitigation measures are driving companies to manage their carbon emissions. While this has been the case the world over, Indian companies and especially, Indian logistics firms are warming up to the idea of a carbon neutral service. Yes, we are talking about the transportation community, which is responsible for 14 per cent of the global carbon emissions.

The credit for this goes to DHL, the world’s leading logistics company, and Blue Dart, part of the DHL Group for launching India’s first ever GoGreen service in the logistics space.

The GoGreen service, an extension of DPDHL’s global environment protection programme launched in 2008, will provide customers in India with an environmentally responsible shipping option.

HOW DOES IT WORK? Powered by Blue Dart in India, the GoGreen service aims at allowing

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customers to neutralise their carbon footprint by paying a small premium over and above their shipping rates.

The premium will be calculated on per document (DP) or per kg (Apex, SFC) and the distance to be travelled.

It will be available on both, domestic and international shipments. Carbon emissions from customer shipments will be offset by reinvesting the premium paid in environmental protection projects verified by Genevabased Societe Generale de Surveillance (SGS), a United Nations independent auditor. These include Blue Dart’s three CER standard certified climate protection projects — a hydro-electric plant for the creation of renewable energy in Brazil, wind farms for the creation of clean and sustainable electricity in China and a biomass power plant for the generation of electric energy in India. A certificate, verified by SGS, mentioning the total amount of carbon dioxide offset per customer, will be issued to the customer

annually. Commenting on the service offering announcement, Malcolm Monteiro, SVP & Area Director, DHL Express, South Asia, said, “As a socially responsible organisation, we firmly believe in striking the right balance between economic benefits and environmental responsibility. This new GOGREEN Carbon Neutral Service will allow customers to be our co-stakeholders in ensuring a cleaner & safer, environment and do their bit towards ensuring a carbon neutral shipment. Since the launch of the environment protection programme in 2008, we have seen a lot of interest evinced by customers who already have sustainability on their agenda.

Through this roll-out in India, we will enable customers to be responsible social citizens.”

Dr Keith Ulrich, VP, DHL Solutions & Innovations and Head, Research & Innovation Management, added, “Transportation and logistics industries are seen as key contributors

to global greenhouse gas (GHG) emissions. As a globally operating transport and logistics provider, we therefore strive for innovative solutions to tackle today’s challenges. This includes delivery concepts for mega cities, clean transport and environmentfriendly services alike.”

RS Subramanian, Country Manager, DHL Express India, said, “At DHL, innovation means providing solutions today for the world of tomorrow.

Our GOGREEN Carbon Neutral Service enables us to collaborate with our customers and help them evaluate measure and neutralise their carbon footprint. Together we can protect the environment as responsible citizens.”

Anil Khanna, MD, Blue Dart Express, commented, “Blue Dart has always led the way for the domestic express industry. We are acknowledged for product innovations, infrastructure as well as sustainability initiatives and are considered a lighthouse for other

The transportation sector has a share of 14 per cent in global carbon emissions. logistics companies in Blue Dart country. The GOGREEN Carbon Neutral Service will not only enable our customers to contribute to a greener future, but will also help fund climate protection projects and build healthier and productive communities.”

THE CARBON CAPTURE DHL Express India and Blue Dart are top performers in DHL’s annual global Carbon Footprint Assessment register. In 2010, DHL Express India achieved six per cent improvement in carbon efficiency despite total carbon dioxide increasing by 13.6 per cent as the economy boomed. Blue Dart posted an improvement of 6.5 per cent year-on-year driven by stronger volumes, despite carbon dioxide

increasing by 18.5 per cent in 2010 versus 2009. Despite increases in fuel consumption, carbon efficiencies were achieved by switching to cleaner fuels such as compressed natural gas (CNG) and liquefied petroleum gas (LPG).

The GOGREEN Carbon Neutral Service will be available across all of Blue Dart-DHL’s Express Service Offerings, including Domestic Priority, Dart Apex, Dart Surface Line and International products such as documents, parcels. Express Easy and Import Express. It will also be available on customised solutions such as temperature controlled logistics.

Notably so, customers are also upbeat about this initiative and have rendered their full support to make it a reality.

This initiative, they feel, will be able to take the Indian logistics industry to newer growth pastures and would thus aid in reducing carbon emissions. prerna.sharma@infomedia18.in

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NEWS ANALYSIS EU ETS

Air cargo, as an industry, plays a very crucial role in world commerce. It accounts for 35 per cent of world trade by value. European Union’s highest court approving the inclusion of airlines in its Emissions Trading System (EU ETS) from January 1, 2012, can have various affects on the sector. The ETS will apply to airlines operating to/from and within the EU and air cargo operators need to submit the required allowances for their 2012 operations.

NISHI RATH

AIR cargo makes a crucial difference to the economics of long-haul passenger flights. These, together with freighters, provide transport for global manufacturers, wholesalers, post offices and retailers. It is the natural partner to the fast growing transactions performed on the internet as well as other traditional purchases that expect fast delivery times. Furthermore, air freight capacity at attractive rates has been the catalyst for countries to develop new export industries.

Management, operations, economics and financial aspects are all included, with the focus on the shipment’s point of arrival at the origin airport to its arrival at the destination airport.

Included in the European Union Emissions Trading Scheme (EU ETS) are 96 per cent of global top 50 airlines, 25 per cent of all international flights, 20 per cent of the world’s business jets and 60 per cent of airlines, which are non-EU (25 per cent from the US). According to a report by PwC, EU ETS will introduce additional commodity price risk and will become a value driver in the marketplace.

REACTIONS APLENTY More than 24 countries including India and China, the major trading partners of the 27-state European bloc, had

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warned that some form of retaliation is likely with several governments threatening legal action. A group of US airlines had argued that forcing them to participate in the bloc’s potentially costly emissions-trading programme infringed on national sovereignty and conflicted with existing international aviation treaties. But exempting foreign airlines could place competing European carriers at a disadvantage.

The recent case began when the Air Transport Association of America (since renamed A4A) and three major airlines – United and Continental, which have since merged, and American – complained about the EU legislation at the High Court in London in 2009.

The British court referred the case to the European court for a preliminary ruling. In the wake of the European court’s finding, the case will now revert back to the British court, which is likely to echo the European ruling.

THE PROPOSAL As per the EU, the money collected through tax will be used for improving the environment, even though more than 21 countries passed a resolution opposing the move, they termed EU’s action as unilateral. The global travel body opined that even the options offered by the EU are problematic.

These options include delaying the introduction of the tax, applying the tax on departing flights only or applying it within the EU airspace.

The only way to resolve this is for all the governments to get back round the table at International Civil Aviation Organization and work towards a global framework, International Air Transport Association had advised.

Under the EU ETS, airlines flying to Europe will be required to buy permits to allow them to emit additional carbon dioxide above a predetermined cap.

The sanctions for non-compliance will include fines and flight suspensions.

The stated idea behind the move is to push airlines to reduce their carbon footprint by inducting new planes that emit less carbon dioxide.

WHAT MIGHT FOLLOW? Down from the previously forecast 4.2 per cent expansion, cargo is expected to show flat growth; yields are expected to remain flat in 2012, believe industry experts. Fuel costs are relatively unchanged from the previous forecast at $198 billion. That is based on oil at $99 per barrel — against a previous forecast of $100 per barrel. nisi.rath@infomedia18.in With inputs from IATA

PRICE TRENDS ROAD FREIGHT INDEX CHART FOR DECEMBER 2011 IRFI TREND FOR DECEMBER 2011: The RFI stood at 175 points for the month of December 2011, which is the same in comparison to the corresponding period last year.

ZONAL FREIGHT TRENDS The overall freight rates have increased slightly by 0.31% as compared to the previous month.

The freight rates from Delhi have registered the highest increase of 3.75%; whereas Ex-Mumbai rates have registered the highest decrease of 2.69% as compared to last month. The freight rates of Ex-Delhi are high due to high demand for south routes.

COMMERCIAL VEHICLES DOMESTIC SALES:

TRENDS FOR DECEMBER (Y-o-Y) 172 175 169

2006-07

169

2007-08

175

171

2008-09

2009-10

2010-11

2011-12

Index trend for five years The overall commercial vehicles (CVs) segment registered a growth of 19.95% during April-November 2011 as compared to the same period last year. While medium & heavy commercial vehicles (M&HCVs) registered a growth of 9.39%, light commercial vehicles grew at 29.26%. However, in the month of November 2011 over November 2010, the growth in sales of the overall CV segment was 34.99%.

FORECAST FOR JANUARY 2011: The RFI in December 2010 over December 2009 had registered an increase of 3 points. It is expected to remain at the same level in the next month because of less industrial and capital goods movement.

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

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TECHNOLOGY & INNOVATIONS CUTTING-EDGE SOLUTIONS

Co-location Solution To Integrate Forward And Reverse Logistics & Optimise Returns Sensing, VP & GM, Hi-Tech USP FREIGHT transportation and logistics services provider Ryder System recently made enhancements to its reverse logistics services by rolling out a co-location solution. According to company officials, this new offering integrates forward and reverse logistics into the same facility to further optimise the returns process and drive greater value recovery of returned assets. By co-locating the distribution management of furnished goods with returns processes like technical repair, refurbishment and packaging under the same roof, this offering provides shippers the ability to achieve greater speed to shelf, visibility and cost savings.

“Ryder’s collaborative approach to evaluating and integrating customers’ supply chains has been the driving factor in the formal launch of our co-location solution,” said Steve

Electronics – Supply Chain Key value drivers of co-locating forward Solutions, Ryder System, and reverse operations is a reduction in adding, “Traditionally, forward transportation miles, infrastructure, and reverse logistics have been providers and cycle time & an increase treated as separate supply chains in velocity. with obvious redundancies from transportation, infrastructure, overhead and direct labour. With provides its customers real-time visibility increasing market emphasis on greener, through its reverse IT solutions and more sustainable solutions, co-locating ensures total control through a closedforward and reverse logistics under the loop supply chain. In terms of the same roof immediately reduces carbon biggest competitive advantages of this footprint, infrastructure, resources service, Sensing said that this provides and cycle time. Over 65 per cent of shippers with an integrated closedour customers’ returns are ‘no fault loop solution that increases visibility, found,’ which means that they can velocity and value recovery of assets. immediately be placed among the And by integrating the two traditionally ‘good stock’ and resold through new separate supply chains under a single channels. Our solution eliminates provider, there is immediate opportunity touches & transportation legs and to reduce supply chain operating costs speeds inventory turns.” and cycle time and improve control for customer planning.

Sensing explained that Ryder

Save 30% On Fleet Running Costs With FleetGenie skip hire, asset management, FLEETGENIE is seeking fleet and inspectors, field engineers, insurance transport system developers for its loss adjusters and mobile sales. Using new combination mobile workforce the MobileGenie rapid application and fleet management system. The development system, complex, FleetGenie system incorporates vehicle high-performance mobile software tracking, route optimisation and applications can be designed, changed mobile device management in a single, or developed in minimum time without easy to implement and customisable the need for programming experience. package. With FleetGenie, resellers Most applications can be developed in and systems integrators can offer any days rather than taking weeks or even organisation with a mobile workforce months of bespoke programming using and fleet operation the opportunity traditional methods. In addition to the to benefit from an advanced routing, standard workflow data managed by embedded satellite navigation, tracking and workflow management solution that could save them up to 30 per USP cent on their fleet running costs.

A breakthrough of this new system is FleetGenie is a unique hardware the mobile application with embedded independent and fully integrated satellite navigation. This eliminates the low-cost solution that will run on any need to interface the route optimisation Windows OS-based, GPS-enabled software with additional navigation hand-held computer or PDA. It software or hardware. The FleetGenie is fully customisable and highly architecture has also been designed to flexible, which makes it suitable for simplify data interchange with any back a wide range of applications such office business system. as van delivery, service engineers,

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the FleetGenie server solution, partners can easily add further functionality to suit any application that needs instant access to job critical information on the user’s server. For example, the system will provide remote access to live stock information or pricing. Also, user access to the system is fully configurable to suit the particular application. A further unique feature of the system is the management dashboard that allows control and monitoring of all functions including full mobile device management, vehicle tracking and the report designer.

Mark Dale-Lace, Director, FleetGenie, said, “This mobile workforce and fleet management product will open up new opportunities for back office software providers & solutions specialists as it is quick and easy to integrate with any vertical market solution. The system provides ease of implementation for OEMs and customers will find it easy to use.”

AspenTech Makes It Easier To Navigate Supply Chain Complexity click. This makes it easy to adapt the ASPEN Technology Inc., a leading application for specific business needs. provider of software and services Additionally, improved data editing, to the process industries, recently filtering and analysis capabilities announced the release of aspenONE shorten the time required to perform Supply Chain software for chemical, rigorous business simulation and ‘what specialty chemical, polymer, CPG, life if’ scenario analysis, thereby expediting sciences and other process companies. the decision making process. Advanced A redesigned user interface for Aspen visual exception reporting improves Supply Chain Planner and the Aspen support of the sales & operations Plant Scheduler Family makes it easier to navigate supply chain USP complexity, thereby providing faster The new user interface allows planners access to information that expedites and schedulers to quickly access the more profitable responses to most important information for optimal unexpected market conditions. The supply chain decision making. redesign features intelligent data visualisation, multi-screen viewing, active user assistance, improved planning (S&OP) process. Planners navigation, streamlined workflows and can quickly identify the most critical user configurable layouts. As a result, and urgent problems along with preprocess manufacturers can accelerate configured analysis steps on how to return on investment with more outresolve those issues. of-the box graphical user interface Justifying the same, Kamil Beffa, (GUI) capabilities.

SVP – Supply Chain & Distribution Project, Lafarge, said, “When we Personalised user layouts increase first chose AspenTech’s supply chain productivity of planners and schedulers technology in central Europe, the by saving & retrieving favourite layouts deciding factor was its ability to solve and screen configurations with a single

our complex optimisation problems.

With this new release, AspenTech has made powerful supply chain software easy to use with faster access to the information that allows us to make decisions. It is the right direction for the product and it will deliver real business benefits for us.”

To this, Manolis Kotzabasakis, EVP – Products, AspenTech, added, “AspenTech is committed to delivering fast, flexible and easy to use supply chain optimisation solutions. For years, the world’s top chemical and process industry companies have used powerful Aspen Supply Chain Planner and Aspen Plant Scheduler functionality to optimise their planning and scheduling for greater profitability.

With this release, we have combined high performance with an intuitive and engaging user experience. The enhanced user experience of this release underscores our vision for aspenONE – to solve optimisation problems, from the simplest to the most complex, with the easiest to use software.”

TAKE Solutions Releases OneSCM 7.1 Multi-Enterprise Online Collaboration Suite via a full range of delivery models — on-premise, hosted, software-asa-service (SaaS) or hybrid. The new mobile applications framework leverages .NET mobile controls to extend OneSCM collaboration applications on multiple mobile platforms (tablets, smartphones) thus making applications fully compatible with mobile operating systems (Android, Windows Mobile, RIM and iOS) to better support customer supply chain activities at the work site or on-the-go. This, in turn, saves time, reduces errors and allows for quicker response USP times. Additionally, tasks such The latest version includes a new as processing work orders and mobile applications’ framework, which checking an invoice status can allows trading partners to access & be done remotely and securely, share data and perform transactions at any time. directly from mobile devices.

“With the evolution of TAKE Solutions, a leader in supply chain management (SCM) and life sciences domains, recently announced the availability of OneSCM 7.1 — a multienterprise online collaboration suite for trading partners to manage supply chain operations. The latest version introduces a mobile applications’ framework that integrates with smartphones and tablets for immediate data access, sharing and transaction activity in real time.

OneSCM 7.1 supports both .NET and Java architectures, and is now available

everything digital…mobility has quickly gained ground in streamlining supply chain execution. Mobility must be integrated into all business processes — especially those nimble workforces who rely on decision makers,” said Young Kim, Director – Product Management, TAKE Solutions.

In today’s fast-paced world, information must be immediately and accurately available. The new version of OneSCM combines the collaboration power of both X.PC and OneSCM to provide trading partners the flexibility, intelligence and control to execute a smooth orchestration to effectively and efficiently streamline supply chain execution,” Kim added.

Collated by Prerna Sharma prerna.sharma@infomedia18.in

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TECHNOLOGY & INNOVATIONS SUCCESSFUL S&OP IMPLEMENTATION

FACILITATING INTEGRATED BUSINESS PLANNING Sales and operational planning (S&OP) helps organisations align strategic plans and operational execution. It also enables those plans to be enacted in the best possible method for the benefit of customers and the company.

Successful implementation of S&OP helps companies reap better financial results with regards to customer service levels, forecast accuracy, profitability and cash-tocash cycle times.

AS Europe moves out of recession, many business leaders are reflecting on the lessons they have learnt. Thankfully, the phrase: ‘if only we had known how the credit crunch was going to hit us’ has been joined by ‘what can we do to make sure this never happens again’. Businesses are now examining the systems and processes that offer not just growth but protection and resilience as well.

WIDESPREAD USAGE At the top of this list of options is sales & operations planning (S&OP). In a recent supply chain management survey for Infor conducted by AMR Research, 88 per cent of respondents said that they were already using or planning to deploy an S&OP solution in the next 12 months. The report also found that the No.1 area of S&OP businesses want more support in is in its ability to provide ‘what if’ simulation capability.

The impact of recession is not the sole driver. The concept of S&OP

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has been around long before recession hit. However, it is only recently that technology has reached a sufficient level of maturity to enable complete systems to be developed. This is because S&OP is not just a technology, it is a comprehensive process that spans many departments — from finance to demand planning to design, production and even sales & marketing. Cutting across the business in such a fashion was traditionally considered impossible for business applications.

SPREADSHEET-BASED APPROACH Most S&OP solutions today are still based on the use of spreadsheets. An Aberdeen Group survey reported that up to 85 per cent were founded on spreadsheets. This led to an unhappy state of affairs where up to 60 per cent of the time spent on S&OP was taken up by activities such as manually importing and exporting data and then validating & cleansing the information.

This spreadsheet-based approach is

long on effort and short on return.

It does not offer proactive analysis, cannot integrate across the business, suffers from poor data integrity and consequently delivers weak reporting.

All of this happens alongside the customary issue that spreadsheets are rarely easy to use. This stands in stark contrast to what businesses actually want from their S&OP — the ability to quickly and accurately explore ‘what if’ scenarios across the business.

ALTERNATIVES TO SPREADSHEETS Now that the underlying systems have matured to offer an alternative to spreadsheets, what should you look for in technology terms to support your S&OP process? Firstly, a business needs to collate information from different sources and then put it into a common hierarchy. This means that all the relevant departments can not only input information, but also take out their own analysis in the format & language they already use. This, in reality, combines two processes. The first pulls together data from disparate departments. Different departments will use different systems and technologies — from ERP systems for production to CRM systems in marketing, SCM solutions in the demand management

and financial software in accounting.

The second involves the imposition of a ‘common hierarchy’. This implies that the information is put together in such a way that all the departments speak the same language. This demands an open framework where data from one system can move into and be used by another, without having to integrate it. Services Oriented Architectures (SOA) is the most promising of these technology frameworks as it offers the potential for open integration on common standards — not proprietary to an individual vendors technology stack.

SUCCESSFUL S&OP IMPLEMENTATION What does this situation look like?

Imagine three different departments all feeding into the S&OP system.

Demand planning talks in terms of quantities needed and sales values, while finance quotes revenues & costs; and production lists volumes & output.

The common language that arises when these functions communicate is that of value. This is usually, but not always, expressed in terms of sales, costs, margins and services levels. However, the route to this improved bottom line can vary. It is also important that the hierarchy works at levels of detail that is relevant to decision makers.

The senior management is more likely to talk in terms of product groups, regional performance and horizons of 18 months. Functional managers will want to drill into the underlying details and see actual customers, products and orders. The inability to bridge strategy and operations has traditionally been one of the sources of frustration for S&OP practitioners.

The second element of a successful S&OP implementation is enforcement.

S&OP is a comprehensive process and needs to be mandated throughout all departments. From a technological perspective, this implies the use of a workflow engine, which ensures that the rules of the S&OP process are adhered to. Take the example

of an S&OP process (varying from customer to customer) that runs on a monthly cycle. The workflow engine (and indeed, the entire business) has an overall framework and timetable.

Specific actions need to be completed on a given day by an individual or department. For example, Day 6 may see demand figures forwarded to production and flagged to finance. In the scheme of overall processes, these may be a prerequisite of the production component order on Day 8 and finance estimates due on Day 20.

This is done primarily by email to flag the action necessary to the relevant person in a timely fashion. This links directly to the tools and systems needed to complete the action (for example, the ERP system in place).

The management function of S&OP can then track when these actions have been completed. This does not just measure adherence to the processes, but also quickly identifies delays and bottlenecks. To aid in the analysis, the workflow engine can also measure and report on changes to the plans.

This then leads on to the third element of successful S&OP adoption – the use of processes to explore alternative scenarios. This is the all important ‘what if’ capability that organisations prize above everything else. By copying data from the S&OP systems into a separate, distinct ‘sand box’ business, heads from all departments can adjust individual parameters.

They can then see the outcomes of possible changes before committing to them. For example, a production manager can assess what happens if they change manufacturing patterns, or a supply chain planner can anticipate the likely impact of ramping up in response to seasonal demand changes.

Critically, the impact of these changes can be examined by other functions, including finance and sales.

Most importantly, the business can then compare and contrast a range of simulated outcomes to see how they

can improve the business in terms of customer service, cost or profit. The impact of change (and the attendant risk) can be reduced. When changes are implemented, the business has a far better idea of what should happen.

The last element of successful S&OP is its use to deliver ‘court sense’ to the C-level executives. In basketball, ‘court sense’ refers to a player’s ability to see everything going on around the court and his understanding of how it contributes to winning the game.

Similarly, S&OP should yield the visibility of information that executives need to guide their decisions, right across the business. This usually refers to the ability to identify and exploit trends. This ‘bigger picture’ is usually expressed in graphical forms such as pie charts or graphs. However, to support the decisions made, S&OP must also enable a frictionless drilling down to the detail and back again. Across the aggregated information that is covered

by S&OP, this is quite a task and it is often where current systems fail.

THE BEST BUSINESS PLAN Up until recently, S&OP has either offered only the view on the ground or the view from the top. Thankfully, this has now begun to change. So, what does such a successful implementation of S&OP actually deliver to the business? According to research from Aberdeen Group, S&OP leaders report healthier financial results in terms of customer service levels, forecast accuracy, profitability and cash-tocash cycle times — key measures for any business. S&OP has become an essential business process in de-risking the supply chain. The reality is that in any operational planning process, there are multiple ways to meet customer demand. S&OP – and the modern technologies that support it – deliver confidence that a business has explored the alternatives and hit upon that elusive ‘best plan’.

Souma Das, VP – Sales & MD, Infor India

JANUARY 2012 • SMART LOGISTICS • 23

IN CONVERSATION WITH DR VEIT STEINLE

INDIA OFFERS AN EXTREMELY LARGE MARKET AND IN FUTURE, THIS WILL GROW INCREASINGLY “In the future, as the Indian market grows in size, providing efficient logistics will be an interesting challenge for all of us,” avers Dr Veit Steinle, Director-General, Environmental Policy and Infrastructure, Departmental Policy Issues, Federal Ministry of Transport, Building and Urban Development, Germany, during a brief interaction with Sumedha Mahorey. Excerpts…

STRENGTHENING INDO-GERMAN TRADE TIES IN LOGISTICS Traditionally, we have had very strong ties with India when it comes to business. We have a large presence in India in the form of Bosch and Siemens, which have been present in the country since the last decade. The presence of good companies like Bosch and Siemens has also attracted many German small and medium enterprises (SMEs) to India, which find enough and more potential in the Indian

24 • SMART LOGISTICS • JANUARY 2012

market. However, as these SMEs enter the German market, they have to address specific issues pertaining to logistics in India. At this point, they fall back on their German experience, which they take along with them to the Indian market.

Smaller companies, which step into the Indian market, do not find the kind of prerequisites and conditions, which they have witnessed in Germany, specifically in the area of goods transportation. When we talk about

products, which are manufactured here by these German companies; we are also talking about these products or a segment of these products exported to Germany apart from other regions in the world. Our prime factor here would be to ensure that these products reach the end users in an undamaged state. We have to look at logistics in India from the other perspective. We not only look at German companies, which will provide logistics services to Indian companies, but also the other

way round i.e. Indian companies, which have their presence globally or want to set foot into the German market and use Germany as a gateway to the European market.

INCENTIVES FOR COMPANIES FORAYING INTO THE GERMAN MARKET To facilitate the process of Indian companies foraying into the logistics services, we try to find an appropriate partner from the German logistics industry and bind these two entities together. This kind of support depends on the Indian company. For instance, if the Indian company engages in food logistics, we will try and find a partner who is an expert in food logistics and is familiar with all the procedures & regulations that have to be adhered to while distributing goods in Europe.

We are here to extend concrete support to Indian companies seeking to foray into the German market and also to establish strong business contacts.

This will pave the way to take business between the two countries in the logistics sector forward.

STRINGENT ENVIRONMENT & INFRASTRUCTURE LAWS IN THE GERMAN MARKET A logistics service partner to Indian companies entering the German market is well aware of the regulations and laws which are applicable in Europe. They are specifically defined laws, which are important for the transportation and handling of goods. This is the basic idea behind the partnership between Indian companies and the German logistics service providers that bring in the right expertise and knowledge to facilitate entry into the European market.

ICONIC INFRASTRUCTURE DEVELOPMENT BY GERMAN COMPANIES IN INDIA Siemens has invested in technology for conveyor belts at the new international airport terminal in Delhi. They have also invested in a similar technology

at the Hyderabad airport. In Railways, Bombardier has built the metro in Delhi. The third example is in the field of passenger travel. In addition, many German companies have their presence in the automotive sector.

In the aerospace sector, European company, Airbus, provides Indian companies aeroplanes. Airbus is a multi-European company and we are part of it.

in the German market. These services can be put to use in an optimal fashion for both the markets.

For instance, if we consider the textile industry, our services cover the entire sector at every stage of logistics.

When it comes to the automotive industry, we provide just-in-time services and ensure supplies for the aftermarket. Earlier, we had companies that were performing all the services on their own, but later, found third-

ADDRESSING CHALLENGES IN MULTI-MODAL TRANSPORTATION When it comes to transportation in Germany, we offer a dense network of infrastructure. This includes a complete chain of services. Our logistics infrastructure is holistic & all our logistics processes are harmonic and standardised as per European standards. This is indeed an advantage because if companies do not have standardisation during the transportation of materials, it creates enormous challenges, especially when these change from one mode of transportation to the other. It is also important to have such processes in place when it comes to transshipment involving different modes of transportation. We also have processes in place when it comes to different products like food and perishable materials, which requires cold chain, being transported.

FUTURE OF INDO-GERMAN LOGISTICS TRADE We are looking at opportunities for exports from India. We are aware of the fact that even today, India offers an extremely large market and in future, this will grow increasingly. If we look at the volumes of exports, it will interest both, Indian as well as European companies that have their presence here and are either in the process of or are thinking of setting up production units here. The volumes of imports that such companies will have in mind will require the logistics and transportation services that are offered

UP,

CLOSE &

PERSONAL What do you do during your leisure time?

I get very little leisure time...my job is very absorbing and I have very less free time at my disposal. On weekends, I try to spend as much time as possible with my daughters. I travel to south of Germany from Berlin to meet them on weekends.

Your interests...

I like wine tasting occasionally.

Other areas that interest me include hunting and collecting model cars from Ferrari, etc. I have model cars, ships, planes and trains displayed at my office. party companies, which could take care of all these services in a better way. This applies to practically every sector of the industry including IT, hardware as well as biotechnology and medical technology. Thus, we have an array of sectors where logistics will come to play and have an increasingly significant role. In the future, as the Indian market grows in size, providing efficient logistics will be an interesting challenge for all of us. sumedha.mahorey@infomedia18.in

JANUARY 2012 • SMART LOGISTICS • 25

IN CONVERSATION WITH HITENDRA CHATURVEDI

MANAGING REVERSE LOGISTICS IS FAR MORE COMPLEX AND DIFFERENT FROM FORWARD LOGISTICS “Reverse logistics is a standard process in developed nations and Indian companies will have to adopt world-class processes not only for survival and growth but also for legal reasons,” informs Hitendra Chaturvedi, MD & CEO, Reverse Logistics Company, during an interaction with Arindam Ghosh.

Excerpts…

Before establishing the company, we found that almost all companies focus primarily on providing new, innovative products to the customers but forget that in order to do so, they need to get these products to the customers fast and also find a way to get these back if there is any defect in the product, which happens at least 5 per cent of the times. This 5 per cent return, if not managed in the right way, can cause of a lot of harm to the brand image. Several researches have indicated that 80 per cent of customers having a bad return experience will not buy from that brand again. Brands spending multi-million dollars on customer acquisition cannot afford to loose customers due to bad return experience.

The brands are also in a dilemma.

They want to do the right thing but the volume of return is so low that doing it right means incurring high costs.

To solve this issue, Reverse Logistics Company (RLC) was formed that allows brands to focus on their core competency while outsourcing their reverse logistics to RLC. RLC is a pioneering technology enabled leader in end-to-end reverse supply chain management. In very

26 • SMART LOGISTICS • JANUARY 2012

Image By Dileep Prakash

IDEA BEHIND SETTING UP REVERSE LOGISTICS COMPANY

simplistic terms, we ask Original Equipment Manufacturers (OEMs) to focus on their forward logistics, distribution, fulfillment, marketing, product development etc., while they outsource their entire reverse logistics process to us.

CHALLENGES FACED IN MAKING THIS VENTURE A SUCCESS… Managing reverse logistics is far more complex and different from forward logistics. We have developed proprietary IT platform and worldclass infrastructure & processes that allow us to manage reverse logistics for companies and enable their growth.

The biggest challenge was educating companies on the value of reverse logistics. Most companies did not realise the strategic importance of reverse logistics to their bottom line.

SUCCESS CURVE My current ‘business plan’ took shape on a tissue paper. I thought trying and failing is acceptable than not trying and seeing someone else successfully execute on the idea. I remember how, in 1995, I did not execute an idea to bring cricket commentary from radio to the Net... and in 1998-99, Broadcast.com was sold to Yahoo for $5.7 billion. I have been kicking myself ever since.

In November 2008, I started this company when recession was at its peak. The company began in a small 800 sqft warehouse in Mumbai with five people and it became operationally profitable in six months. In the subsequent years, our revenue grew eight times and this year, revenue will grow about 10 times employing over 400 people.

FUTURE COURSE OF ACTION In the 3Rs philosophy, i.e., reuse, reduce and recycle, the fourth R is hidden, ‘repair’. If India has to compete globally and attract more FDIs, companies will have to adopt key benchmarks for not only growth but

THE MOTIVE Today, every company is strongly focussed on improving the supply chain management and other functions related to forward logistics, however faced with a situation, where electronic waste or e-waste is one of the fastest growing segments of waste in the country, growing at a rapid rate of 10 per cent per annum, companies are fast realising the importance to develop organised reverse logistics solutions. To tackle with this challenge faced by the manufacturing companies and driven by an ecofriendly passion of a 4R approach – Reduce, Repair, Reuse and Recycle, Hitendra Chaturvedi established Reverse Logistics Company. also responsible governance, corporate responsibility and environment responsibility. Reverse logistics is a standard process in developed nations and Indian companies will have to adopt world-class process not only for their survival and growth but also legal reasons.

Today, being green is a marketing ploy for many companies. Soon this will become a mandate from the government with the new E-waste Law on its way. Foresighted leaders will see this as an opportunity and make necessary changes in their organisational strategy. Shortsighted companies will not only loose market but also customers if they do not focus on this now.

YOUR CONTRIBUTION TOWARDS GROWTH OF THIS SEGMENT IN INDIA In India, return rate is 4 per cent and most of the material goes into the environment as scrap. If we can reduce that by even 1 per cent by following the 4Rs – Reduce, Reuse, Repair, Recycle – we would make ourselves proud. In the process, I also want to demonstrate to the world that true multi-billion dollar social and eco-conscious companies can emerge in India.

Going forward, we aim at becoming a $1 billion company and expand our footprints in South East Asia, South Asia, Middle East and Africa.

YOUR MANTRA TO EXCEL I have made a promise to myself that when I turn 60, I don’t want to look back and regret on the mistakes I committed. I have seen many retired people who longingly want to bat another innings, so that they can fulfill what they always wanted to achieve but could not. For me, it is here and now, one life to live, and there is so much to do!

BECOMING AN ENTREPRENEUR IN INDIA Given the amount of regulatory hurdles and other barriers that an entrepreneur has to face towards seeking approvals for starting a venture in the county, makes it highly challenging for the concerned person. I have lived and worked in 65 countries. Unfortunately, India does not have a conducive environment for entrepreneurs. In the US, all I needed was three signatures on a simple form to incorporate a company. In India, I have lost count of the documents and signatures I had to do to just incorporate a company. The government needs to create simpler processes and an environment that acts as a catalyst for entrepreneurs. That is the reason why we do not see India as a seeding ground for entreprenuer that have become multi-billion dollar companies abroad.

YOUR MESSAGE TO THE NEW AGE ENTREPRENEURS My message is what Mark Twain said, “Twenty years from now, you will be more disappointed by the things, you didn’t do than by the ones you did do.

So throw off the bowlines, sail away from the safe harbour. Catch the trade winds in your sails. Explore. Dream.

Discover.” arindam.ghosh@infomedia18.in

JANUARY 2012 • SMART LOGISTICS • 27

SPECIAL FOCUS REVERSE LOGISTICS GROWTH IMPERATIVES

VALUE, MINIMISING COSTS The need for implementing reverse logistics in a supply chain has been neglected for long.

However now, due diligence is being given to this aspect by companies who see it as an important value-added process. Consumer awareness and their willingness to return goods leading to redistribution, repairs and reuse of products have resulted in the increasing demand and consequent growth of reverse logistics.

Illustration By Sanjay Dalvi

MAXIMISING Manufacturer

Distributor

Retailer

Customer

Logistics Supplier

SHRADHA MOHANTY

REVERSE logistics is the process of moving goods from their final destination for capturing value or ensuring proper disposal. It is the backward flow of materials or goods from the customer to the supplier with the aim of maximising value from the returned item along with minimising total reverse logistics cost. In today’s scenario, reverse logistics is seen as one of the most important factors in bringing about supply chain efficiency.

BURGEONING APPLICATION ARENAS The opportunity lies across a wide spectrum of industries – retail, electronics, automobile, pharmaceutical and print. Broadly speaking, the growth drivers of this operation lie in the economic viability of reusing goods, government rules & regulations, changing trends in supply chain management (SCM), better customer

28 • SMART LOGISTICS • JANUARY 2012

service and the increasing use of Radio Frequency Identification (RFID).

India has quite a few examples of this.

For instance, Tata Group’s logistics arm DIESL has decided to focus more on reverse logistics in India to add to its supply chain services. The company connects across industries in telecom (TTSL, TTML, VIOM, Haier, WYNN, Alcatel-Lucent, NSN Unitech and GTL Infrastructure), retail (Croma and Landmark) and IT peripherals (TCS). It believes that along with bettering business operations, it can also contribute to environmental initiatives through reverse logistics.

Reliance Venture Asset Management, Kleiner Perkins Caufield & Byers (KPCB) and Sherpalo are also making their way into the segment by investing in Reverse Logistics Co, a Bangalore-based solutions provider company.

DEMAND TRENDS AND BENEFITS There are numerous factors, which are instrumental in bringing about demand for implementing reverse logistics.

These include: • Updated support offerings: Changing market scenario and increasing competition along with the advent of technology are some of the factors, which bring about the need to implement a change in product offerings, service and solutions.

Product life cycles have dramatically declined and the implication of this trend is that reverse logistics is a big facilitator in doing so. This, in turn, helps in understanding a customer’s expectations and fast & smooth running of the supply chain.

• Value-added services: A lot of product offerings in the market, especially the high-priced ones, require supplemental levels of service and

support for customers to benefit from their optimal use. This brings up a host of new opportunities in this sector as the need for more value adding services keeps growing, both in size and in variety. Although several organisations practice reverse logistics, only a few of them have tried incorporating this new trend into their value chain. Customers are beginning to demand an end-to-end service from their logistics partners. Hence, valueadded services will have to become more suited to individual customer needs. Also, the one-size-fits-all policy must be revamped to provide more than mere delivery and installation.

• Integrated solutions: Another rising trend that is being observed in reverse logistics is the dynamic nature of customer needs. Gone are the days when customers were happy with one tool for one purpose, they are now more interested in getting more from each and every tool, be it a service or a product that they use.

In fact, they are more interested in how much more value it can add to their business at every stage.

Therefore, a demand for services as an ongoing support system is increasing. These include a variety of post-sales services such as remote diagnostics, consulting services or even training and engineering services. To cater to this demand, companies need to reassess their value propositions to their customer by integrating their systems to match customers support needs.

• Customer focussed front line organisation: The structure of any organisation is usually to support the business model of that company and to make sure that the chain of command is properly instantiated.

However, with the changing business scenario, where front line visibility is gaining more and more importance, the focus is now shifting to the organisation’s abilities to interact

with customers of the clients as well.

The bottom line is clear – when end customers are happy, clients are happy and revenues increase.

For this, organisational structures of reverse logistics companies need to focus on training and developing the abilities of their personnel who directly interface with end customers.

A companywide set of policies need to be effectively brought into force, thereby creating a culture that places the highest levels of importance in ensuring customer satisfaction.

CHALLENGES ABOUND As an upcoming business in the logistics industry, reverse logistics has a multitude of challenges that need to be addressed. These include: • Relative importance: Logistics inherently has been the backbone of several industries in the country.

However, the importance of reverse

Reverse logistics: A powerful promotional tool An organisation can use reverse logistics as a tool to improve customer satisfaction and increase competitive advantage. These could be achieved by: • Identifying and measuring the real value of its total logistics capabilities, including reverse logistics, and promoting the same to both its customers as well as in the marketplace • Working towards improving its logistics capabilities and continually transforming these improvements into improved customer service and thus achieving high satisfaction ratings • Using logistics improvement as a powerful marketing and promotional tool • Positioning the organisation much ahead of its competitors by aggressively promoting the specific value and benefits associated with its logistics as well as reverse logistics capabilities.

Reverse logistics is a part of a much larger process dedicated to taking care of the customer.

The processes that make up reverse logistics if executed collectively will ultimately build upon one another, thereby empowering organisations to offer customers the desired support they need. logistics vis-à-vis logistics and transportation as a whole is yet to be realised. This is partly because of the nature of the process itself that only a select clientele would ever need to employ reverse logistics services in their business.

• Lack of systems: Since this business is rather new and is in a relatively unevolved state, customers find it difficult to track service providers suited to their business needs. Hence, most customers are apprehensive about introducing business models, which would be significantly dependent on reverse logistics. On the other hand, service providers are yet to explore all the dimensions where the need for reverse logistics is being acutely felt.

• High barriers to entry: The size of the required initial investments in the reverse logistics business along with the apprehensions regarding its success in the near future in the Indian economy is being considered a huge setback for those interested in investing in a reverse logistics firm.

CATERING TO CUSTOMERS Reverse logistics is a part of a much larger process dedicated to taking care of the customer. The processes that make up reverse logistics if executed collectively will ultimately build upon one another, thereby empowering organisations to offer customers the desired support they need. shradha.mohanty@infomedia18.in

JANUARY 2012 • SMART LOGISTICS • 29

SPECIAL FOCUS BENEFITS OF REVERSE LOGISTICS

RETAILER

CUSTOMER

MANUFACTURER

WHOLESALER

ENHANCING THE

SUPPLY CHAIN EXPERIENCE An effective reverse logistics method within the service supply chain plays a crucial role in managing customer experience. The process of exchanging a defective product or part during the product’s lifecycle can either make or break a customer’s long-term relationship with the manufacturer. In short, reverse logistics not only positively impacts an organisation’s financial performance, but also helps it to build a strong relationship with end users.

NISHI RATH

ACCORDING to industry experts, reverse logistics affects the end user and the goodwill of a company. By opting for reverse logistics, companies can assess the market and analyse the demand for the product in order to gradually improve their market position. Manish Saigal, Head – Transport & Logistics, KPMG, believes, “Reverse logistics is still at a very nascent stage in India, but it is growing at the rate of 20-30 per cent. The sectors that are opting

30 • SMART LOGISTICS • JANUARY 2012

for reverse logistics include mainly beverage, IT and small automobile companies.”

As the Indian transportation and logistics industry looks forward to

Getting the right people involved in the whole process not only helps the cross-functional nature of returns, but also benefits and ensures effective reverse supply chain flow.

the next level of growth, efficiency and sophistication, it gradually leaves behind the traditional issues pivoted around inefficiencies. However, amid the current signs of global economic nervousness, the pressure to reduce the cost of doing business is occupying increasing bandwidth in the boardrooms of India Inc. In this scenario, reverse logistics, if performed properly, can help reap good results for a company in various ways. These would include:

Improved customer satisfaction and loyalty The evaluation of returned and exchanged goods can add a lot to the overall profit of a business. Reverse logistics has the potential to understand the value of every consignment. Every return represents a failed service, which means for some reason the customer was not happy. This can lead to dissatisfaction, which will affect the customer relationship with the company. Companies that handle the returns successfully by working with customers to resolve service issues can help improve customer loyalty.

An end users’ satisfactory experience during the product’s lifetime can result in many benefits like protecting the customer base, enhancing long-term revenue and maintaining market share.

Apart from this, understanding why returns occur helps a company identify opportunities for improving supply chain processes and decision making.

It is also helpful to arrange your returns processing into a framework to perform ongoing analysis, prioritise your decisions and benchmark your performance.

Reduced replacement turnaround time The challenge for every company is to increase profits. By opting for reverse logistics, companies can improve the handling of returns. Generally, the return process involves many people, processes & costs, but one way to tackle this challenge is to use reverse logistics, which is more practical from a financial viewpoint. Thus, by adopting reverse logistics, companies can cut on costs.

It starts by reducing transportation and fulfillment of activities through the elimination of the root causes of returns.

Positive impact on the environment Small improvements can often result in various profits. One of the profits of using reverse logistics is the positive impact on the environment. It is one of the most convenient ways to cut down on carbon footprints. By using reverse logistics operations, companies

can eliminate inefficient returns processes that result in unnecessary transportation moves, thereby helping to reduce carbon emissions. For example, when a beverage company opts for reverse logistics to bring back empty glass bottles, it not only helps reduce cost, but also cuts down on the time spent on transportation and the number of moves, thereby cutting down carbon emissions.

Cost cutting In today’s troubled economy, the path to profit from product sales often leads to aggressive cost cutting, especially in a critical component within the service supply chain. A company with plans to maintain its customer service and loyalty can opt for reverse logistics.

As reverse logistics includes recycling, repairing, using or simply discarding the returned products, embracing it

SURE SHOT WAY TO SUCCESS The return of goods indicates quality problems that call for immediate attention in either the manufacturing or distribution processes. Hence, it is important to assess the root cause before it begins to hamper the business on a long term. Proper return policies strengthen relationships with customers and works for the goodwill of the company. Getting the right people involved in the whole process not only helps the cross-functional nature of returns, but also benefits and ensures effective reverse supply chain flow.

Developing appropriate gate keeping, disposition and avoiding policies can lead to effective reverse logistics. Gate keeping, the screening procedures to check why and what products enter the return stream

Reverse logistics is still at a very nascent stage in India, but it is growing at the rate of 20-30 per cent. The sectors that are opting for reverse logistics include mainly beverage, IT and small automobile companies.

MANISH SAIGAL, HEAD – TRANSPORT & LOGISTICS, KPMG not only helps gain customers trust, but also cuts down on unnecessary transport.

CHALLENGES ABOUND Managing the flow of goods through the forward-facing supply chain is not easy. A business has a number of unique challenges while to face trying to ensure that its reverse supply chain runs smoothly. The reverse supply chain is more labour-intensive as compared to the forward supply chain. And setting up a reverse supply chain can prove to be very challenging. Satisfying the needs of the customer is most challenging factor.

For this, organisations need to not only educate customers about their latest offerings but also establish new points of contact with them. In addition, deciding on outsourcing services also needs to be analysed while keeping a check on costs.

helps a company understand the market and the customers well. This will, in turn, help avoid returns in future.

Quality control in manufacturing and distribution also help avoid returns.

In addition, returns authorisation policies developed by a company ensures effective gate keeping.

Knowing that customers are credited promptly strengthens customers relation. In this way, a company can ascertain which product can be resold or reinserted into the forward supply chain.

In a nutshell, reverse logistics is not a bane for the industry, but effective returns management can improve a organisation’s profitability, enhance customer relationships and be an essential part of an integrated supply chain management strategy. nisi.rath@infomedia18.in

JANUARY 2012 • SMART LOGISTICS • 31

SPECIAL FOCUS E-WASTE MANAGEMENT

reverse distribution structure may lead to a significant return on investment as well as significantly increase competitiveness in the market.”

To this, Sanford adds, “Reverse logistics is a fundamental component of two major SCM operations — returns management and spares management.

It is also core to Transportation Management Systems (TMS) multi-route, load & route optimisation planning and execution.”

REVERSE LOGISTICS IN INDIA

Increasing levels of awareness about protecting the environment, lowering emission levels and sustainable development are making organisations opt for reverse logistics. Given India’s ever-growing initiatives towards promoting green measures and adopting eco-friendly methods, reverse logistics is becoming highly critical to further strengthen the cause.

AFTERMARKET: AN IMPORTANT COMPONENT

ARINDAM GHOSH

IN today’s highly competitive market, companies seek to create and achieve market differentiation and capture a greater market share based on the various logistics services they provide to their customers and end users. In this quest to be a differentiator, a crucial strategy, which any company needs to develop, is a strong reverse logistics framework. This would not only help companies generate more business, but would also increase their credibility in the market.

According to Lloyd Sanford, MD, Applied Logistics, “High quality, technology driven, efficient and effective reverse logistics practices

32 • SMART LOGISTICS • JANUARY 2012

India’s reverse logistics industry is about $10 billion. According to various reports, in the next five years, around 57 per cent of companies are expected to outsource reverse logistics functions in India.

Waste is one of the biggest threats to the efficiency of SCM. According to estimates, due to the inefficiencies existing in SCM and low compliance with the government’s e-waste regulations in the country, about three per cent of its GDP (approximately about `42 billion) is lost. By 2012, it is estimated that there will be close to a million tonne of e-waste for disposal as it will grow further, says Rohan Gupta, COO, Attero Recycling.

can have the most valuable impact on a business’s bottom line, delivery integrity and customer service quality.”

A reverse logistics framework involves all the steps that would help a product move from the end point of usage to the origin point of the product.

The services offered by a reverse logistics provider is highly specialised and very few companies like RT Outsourcing, Attero Recycling and Yantra Solutions in India are into this business. As per a research study, “Reverse logistics has received attention because many companies are using it as a strategic tool to serve their customers to generate good revenue. An efficient

The need to increase emphasis on improving profitability and social responsibility has given companies a driving force to adopt reverse logistics.

Aftermarket forms an important part of the reverse logistics industry, which is estimated at $10-15 billion. It can be termed as the secondary market that supplies and provides accessories, spare parts, second-hand equipment and other goods & services used in the repair and maintenance of the returned products and further brings them back to the level of consumption for end users.

AWARENESS LEVEL IN INDIA Over the past few years, the trend

for exchanging the obsolete or dysfunctional products to the company is fast catching up in India. This has further spurred the growth of reverse logistics in the country. The practice is highly new in India as compared to other countries. Elaborating on the same, Gupta says, “If you buy any product in the US, you have the option of giving it back within 30 days of purchase.” An average spending on reverse logistics is about 20 per cent for furniture companies and about 10 per cent for garment firms.

According to a research study, “Reverse logistics starts where the traditional principles of SCM come to a conclusion. This is when a consumer product reaches its end of life or use, and is redundant to its users. In future, companies will have to look beyond the reuse or recycling of packaging materials and into the potential value recovery of redundant products and, more importantly, their components and materials. This will enable them to establish logistics infrastructures and supply management interfaces to allow products to be reused on similar markets rather than being discarded, and eventually scrapped and disposed of in landfills.”

ACT

E-WASTE IS GENERALLY DISPOSED OF IN THE OPEN BY BURNING, WHICH, IN TURN, GENERATES HIGH LEVELS OF TOXIC GASES INTO THE ATMOSPHERE THAT IS HARMFUL FOR THE ECOLOGY. AS PER INDUSTRY ESTIMATES, WASTE ELECTRICAL AND ELECTRONIC EQUIPMENT ACCOUNT FOR 90 PER CENT OF THE E-WASTE GENERATION IN INDIA. INITIATIVES TO BE TAKEN To better reverse logistics and e-waste management in India, a few important steps need to be taken. For instance, more companies need to come up with schemes like if a consumer is not satisfied with the product after purchase, he can return it within a specified time period. This, in turn, will lead to an increase in the consumption of new products. Additionally, companies also need to take initiatives to manage e-waste. Commenting on the same, Gupta explains, “We have set up a pan India system whereby corporates can contact us and get their e-waste disposed of at our state-of-the-art plant in Roorkee, Uttarakhand, where all the sea waste is recycled.”

The Government of India has been strongly favouring the proposals and initiatives aimed at disposing e-waste

Thousands 2000

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Figure 1: Growth of e-waste in India

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in an eco-friendly manner. As a result, several companies are coming up with various proposals for the same. This, in turn, has led to waste minimisation and control of hazardous waste. According to various reports, the government is on the verge of coming up with a strict e-waste disposal regime that will make manufacturers of products personally liable if they do not implement environmentally safe procedures for disposing e-waste.

DEVELOPING A STRONG LOGISTICS FRAMEWORK Keeping in mind the rising threats posed by the environment and the increasing need to treat the waste in an environment-friendly manner so that its disposal leads to minimum possible waste, the concept of reverse logistics is sure to receive a boost. And proper adoption and implementation of the 3R approach – reduce, recycle and reuse – is key to ensure the success of reverse logistics.

In a country, like India, logistics is one of the booming sectors despite constraints like diverse geographies, a fragmented market and a complex supply chain management. However, to ensure its widespread implementation, there is a need to have more awareness programmes. The government also needs to frame stricter norms pertaining to reverse logistics and disposal of e-waste. Besides, manufacturing companies need to invest more in order to ensure a strong returns management along with developing a strong reverse logistics framework. arindam.ghosh@infomedia18.in

JANUARY 2012 • SMART LOGISTICS • 33

SPECIAL FOCUS REVERSE LOGISTICS OPERATIONS

A ST RUC INFR

MA TER

While the need for implementing reverse logistics operations on the supply chain has been MANUFACTURING recognised by many companies and organisations, quite a number of them are still left with implementing it practically. There N TIO IBU are growing opportunities for its TR DIS application with the help of thirdparty logistics (3PLs) providers and a firm that chooses to outsource its reverse logistics operations is not only able to reduce costs but also improve its service. This, in turn, creates a genuine partnership with the service provider and brings about overall productivity by bringing them closer to the customer.

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ALTHOUGH considered a much necessary step in ensuring cost savings and smooth movement of goods in the supply chain, the proper implementation of reverse logistics management has still not been implemented in several organisations.

This is where third-party logistics (3PLs) providers have an opportunity to render their services. There can be a multitude of reasons for taking this step. Some companies need to expand quickly and do not have the manpower or the infrastructure to do so. Others might be looking out for working their way around worker-compensatory expenses, inventory shrinkage or hiring costs to start a new operation.

34 • SMART LOGISTICS • JANUARY 2012

Irrespective of the case, 3PLs handling reverse logistics operations assist companies by providing a strategy to add incremental value to their work.

The priority lies in identifying each company’s stock keeping unit rather than the time factor.

Every item can be handled in more than one way and it is the job of the 3PL to identify it. Also, the 3PL should have a basic understanding of repair techniques, parts management and recycling with regards to the product it is handling.

SECTOR-WISE OPPORTUNITIES AND TRENDS Handling returns internally is a struggle for retailers and manufacturers. In such a scenario, 3PLs can prove to be the saving grace for them. Reverse logistics operations are an extension of the kind of business service that a 3PL provides. In fact, they already have several existing customers who most likely need help while dealing with returns. The business opportunity for 3PLs also lies in the fact that 3PLs are already equipped with the skill set required to handle it, i.e., tracking and managing inventory, doing minor inspection work, doing reconditioning and repacking, etc. Lastly, it is a 3PL,

which can rapidly process transactions, thereby solving the key problem of slow processing. Hence, there are growing opportunities for a 3PL in managing reverse logistics operations.

According to research, there are numerous segments where a 3PL can render its service. These would include the auto industry (parts), print industry, mass merchandisers, computer manufacturers and electronic distributors among others. Apart from that a boom in Internet retail has also increased awareness. Hence, a 3PL has a lot of opportunities in industries it can foray its way into. A breakup of the demand trend for reverse logistics across various industries has been explained in Figure 1.

CHALLENGES DURING IMPLEMENTATION There are quite a number of issues

CASE STUDY Kodak Kodak is a well known company, which offers nine different kinds of disposable cameras. These cameras, which are used once are taken to a photo finishing shop and are then returned to Kodak. This is where a 3PL handles the reverse logistics as Kodak claims that over 80 per cent of the weight of the cameras can be reused or recycled. The challenge that is addresssed here is the large flow of returns.

The aspects that the 3PL will look into it is analysing the supply chain for cost savings and it will try to do so at every point in the process – reviewing current trucking costs, warehousing costs and price of time spent in transit.

Then it can bring about changes after identifying the cost points. This might mean changing distribution centres (DCs), warehouse locations and staff changes to a certain extent. It can also make schedule changes to reduce costly less-than-truckload shipments, thus reducing the time spent in the warehouse.

Household Chemicals Consumer Electronics Auto Industry (Parts) Mass Merchandisers Computer Manufacturer Electronic Distributors Catalog Retailers Book Distributors Book Publishers Magazine Publishing 0

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Figure 1: A breakup of the demand trend for reverse logistics across various industries Source: Going Backwards: Reverse Logistics Trends and Practices book published by the Reverse Logistics Executive Council

that a 3PL has to face while rendering such services to any company. Most of these issues can be worked up if there is proper communication between the service provider and the concerned organisation. The first thing to look out for is that the level of service requirement and scope outlined in the contract should be in line with the financial backing that is in place. The goals, budgets and other metrics used by 3PLs should be in alignment with that of the company’s. The incentive schemes and terms of payment for performance and support should be clearly stated.

Secondly, a proper assessment should be made about the volume and timing of the flow of returns. If it is much higher, it can cause problems with the service provided with regards to space constraints and lead to higher processing costs.

Lastly, there should be enough flexibility provided at every aspect of the reverse logistics operation to the 3PL.

GROWING COMPETITION FROM INCREASING OPPORTUNITIES Competition between 3PLs is now increasing and companies who have witnessed this are known to have used more than a single 3PL to manage their networks. These service providers now need to look for ways to increase their margins and increase cost of change for

their customers. Additional service by way of improvising reverse logistics is the key. The priority lies in identifying each company’s stock keeping unit rather than the time factor. Every item can be handled in more than one way

The business opportunity for 3PLs also lies in the fact that 3PLs are already equipped with the skill set required to handle it, i.e., tracking and managing inventory, doing minor inspection work, doing reconditioning and repacking, etc. and it is the job of the 3PL to identify it. Also, the 3PL should have a basic understanding of repair techniques, parts management and recycling with regards to the product it is handling.

What may be of additional help is the implementation of a reverse logistics software, which will help manage product flow. With regards to future trends, there might be more companies, which have reverse logistics centres located within them or near them. This can help in proper product disposition management, meaning cleaning, recycling, repacking, repair and remanufacturing can all occur side by side thus reducing costs from square one. shradha.mohanty@infomedia18.in

JANUARY 2012 • SMART LOGISTICS • 35

INSIGHTS & OUTLOOK INDIAN MINERAL LOGISTICS MARKET

EXPLORING A

WORLD OF OPPORTUNITIES The value chain of the Indian mining and minerals industry has one level of intermediary connecting the producers with the end users. As a result, the industry does not require any significant warehousing activity. Nonetheless, it requires greater availability of rail and coastal waterways for transportation of output. Ensuring these would not only offer growth opportunities for end user industries across the country, but would also provide additional impetus to the earnings of logistics service providers.

It comprises of about 3,000 mines, the development of the economy and INDIA has a vast base of various of which only 2,628 mines reported form a critical resource for industrial mineral resources and is one of the operations during 2011. A majority expansion in India. The Indian minerals leading producers and exporters of a of these mines are small-scale entities and mining industry is one of the key wide range of mineral resources in predominantly in extraction of sectors of the economy generating the world. The country produces as non-metallic mineral ores. revenues worth $40.12 billion as of many as 87 minerals, which include 2011 and contributing around 2.4 per fuel minerals (excluding oil and gas), cent to the country’s GDP. metallic minerals, and non-metallic KEY CHALLENGES As of 2011, the Indian minerals and minerals (including atomic, minor • Fragmented industry relying mining industry is highly fragmented. minerals and building materials). It is on outdated technologies and the largest producer of mica in unscientific mining methods Category No. of Operating Mines the world, and is also one of the As most Indian mining Fuel Minerals (Coal and Lignite) 574 top producers of iron ore, coal, companies are small-scale entities, Metallic Minerals 608 bauxite and other minerals. It is they cannot afford advanced Non-metallic Minerals 1,446 ranked third in the production technologies and equipment.

Total 2,628 of coal, lignite and barites.

So, they are highly reliant on Source: Ministry of Mining, Frost & Sullivan Analysis Minerals are a major resource for Table 1: Operating mines by category (India), 2011 manual and unscientific methods

36 • SMART LOGISTICS • JANUARY 2012

of extracting minerals from the mining blocks, as compared to their counterparts in developed countries, thereby resulting in high production cost and highly inefficient performance.

This makes Indian mining companies uncompetitive in the global industry scenario. Moreover, the industry is highly capital intensive and demands heavy engineering and latest technology upgradation in exploring and mining activities to enhance its competitiveness in the long run. This is a key challenge for industry participants.

• Bureaucratic delays affect growth of industry operations Delays in government approvals for mining blocks in India are proving to be barriers for the industry. The approval and clearance formalities for these mining leases take almost 3-7 years, which are significantly higher than any other developed countries (for instance, 1.5 years in Australia and so on). This is likely to restrict the growth potential of the industry for a prolonged period, thus impacting the industry’s fortunes and influencing the growth prospects during the long term.

LOGISTICS PRACTICES The Indian mining and minerals industry’s value chain is relatively simple with just one level of intermediary connecting the producers and end users. In some cases, typically within metallic minerals, the integrated industrial groups owning mines and processing units – or user companies like cement and power plants – consume a complete or a large part of their output within their group.

The Indian mining and minerals industry spends approximately seven per cent of its revenues on logistics activities, which have been valued at around $2.81 billion for 2011.

Transportation accounts for almost 80 per cent of the industry’s logistics spend.

The principal modes of transportation for the minerals and mining industry within the domestic market is by rail

ACT

THE MINERALS AND MINING LOGISTICS MARKET IN INDIA HAS BEEN VALUED AT ABOUT $2.81 BILLION IN 2011. THE MARKET IS EXPECTED TO WITNESS A COMPOUND ANNUAL GROWTH RATE OF ABOUT 11.2 PER CENT BETWEEN 2011 AND 2016 AND REACH ABOUT $4.78 BILLION BY 2016. and road, using special open wagons and heavy trucks, as the products are bulky in nature. These products do not need any special care in transportation, as there is no risk of damage due to change in weather conditions. However, the minerals distribution companies need to have a well-planned delivery mechanism to meet the demand from user industries.

The minerals and mining industry does not require any notable warehousing activity, as the output is stored in open areas and sent to users in the same bulk form and stored similarly. As a result, the industry spends less than five per cent on warehousing activity, which is required only in case of certain rare minerals such as crude diamonds and so on.

The minerals and mining industry in India has a small share of exports confined to metallic ores such as iron ore and a few non-metallic mineral ores including diamonds. Metallic ores are mainly exported by sea, as it is considered to be the most economical mode of transportation. Freight forwarding accounted for approximately 15 per cent of the total logistics spend by the minerals and mining industry.

Additionally, the industry does not involve any value-added services, as the products do not require any packaging or other standard activities unlike a typical manufacturing product. The output is directly sent to consumption centres in the raw form without any value addition or processing.

DRIVING FACTORS Various upcoming power and metal plants across the country built by leading domestic industrial groups and multinational giants need significant volumes of mineral ores for their operations. Global leaders in the metal industry such as Posco and Arcelor are setting up metal production facilities in India with massive investments, and these companies have been given own mining opportunities to feed their plants.

This is expected to lead to significant growth of the mining industry in the country. These organisations are likely to employ integrated logistics services for material sourcing as practiced in developed countries. Such initiatives are likely to significantly enhance the prospects of logistics service providers (LSPs) focussed on this industry.

The planned initiatives by the

Minerals Exploration Entities

Marketing & Distribution Companies

Own Processing / User Units

Foreign User Industry Sectors

Domestic User Industry Sectors

* Marketing and distribution companies are present in the distribution channel mainly in the case of the non-metallic minerals segment catering to small-scale end user companies involved in processing these ores.

Source: Frost & Sullivan

Figure 1: Typical domestic distribution chain of the Indian minerals and mining industry, 2011

JANUARY 2012 • SMART LOGISTICS • 37

Indian mineral logistics market, continued

the growth of private sector participation. Domestic private 5.00 sector companies such as Tata 2.81 Steel and Vedanta Group 4.00 are actively pursuing export 3.00 opportunities for their output, 2.00 while government-owned 1.00 entities including NMDC 0.00 Ltd. are likely to improve their 2011 2016 current export levels. Though Source: Frost & Sullivan warehousing activity is not Chart 1: Revenue forecasts for minerals and mining logistics market expected to attain more revenue in India, 2011-2016 share in the overall logistics, the market is likely to grow in correlation $2.81 billion in 2011. The market is with that of the overall industry. The expected to witness a compound annual nature and scale of value-added services growth rate (CAGR) of about 11.2 per RESTRAINTS used by the industry participants are cent between 2011 and 2016 and reach Limited availability of dedicated railway also not likely to undergo any notable about $4.78 billion by 2016. wagons for minerals transportation change within the near future, as the from mines to end user industry The Indian minerals and mining product nature does not offer scope for locations is forcing mining companies sector’s prospects are highly optimistic, any significant usage. to depend on road transport, which which indicates significant opportunities is significantly limiting the volume for LSPs in this industry. Improvements and extent of distribution of the in transportation infrastructure and BRIGHT GROWTH PROSPECTS extracted minerals from one region greater availability of rail and coastal The Indian minerals and mining to other distant regions within the waterways for transportation of the industry has bright growth prospects country. Ongoing developments in mining industry’s output are likely to owing to rapid growth of demand in the rail infrastructure dedicated for freight lead to encouraging growth of end domestic market, as well as in export movement and growth of private user industries across the country, thus markets from consumption industries participation in the rail sector are providing more impetus to the earnings such as metals, power generation, expected to increase the availability of of LSPs. The freight forwarding cement and fertilisers among others, capacity for mineral transportation and market for the Indian minerals and thereby resulting in increasing volumes thus increase the volume and revenues mining industry is expected to grow of minerals transportation and freight of transportation activities in this at the fastest pace among all the forwarding. In addition, the rising industry. segments, as more export opportunities volumes of imports of coal and metallic The finite reserves of minerals and import volumes are expected with ores also indicate significant prospects available in India, especially coal and for freight forwarding and domestic metallic minerals, are likely to diminish transportation of imported goods. in the next two decades considering The growing presence of large players Key Products the rapidly escalating volume of in the private sector in the form of consumption by the country’s industrial leading domestic industrial groups and • Fuel minerals – Coal, Lignite and infrastructure sectors. This is multinational companies, offers scope • Metallic minerals – Iron Ore, likely to restrict the growth prospects for adoption of integrated logistics or Aluminium Ore, Copper Ore for domestic logistics in this industry integrated transportation services in the • Non-metallic minerals (including after a few years. Even though India is industry. LSPs with strong capabilities minor minerals) a leading producer of coal, a growing in rail cargo, coastal shipping and number of coal-consuming companies multimodal transportation are likely Key Consumer Segments Served here are already forced to source it to gain significantly in the coming • Transportation and infrastructure from foreign countries due to shortage years. industry of domestic supply.

• Power generation industry Indian Government to promote the usage of coastal & inland waterways for domestic transportation of bulk commodities including minerals offers significant opportunities for companies in domestic shipping operations. Mineral companies that have their activities in the coastal regions prefer to ship their products in bulk from ports to the regional markets along the coast, thus saving time and cost.

REVENUE FORECASTS The minerals and mining logistics market in India has been valued at about

38 • SMART LOGISTICS • JANUARY 2012

4.78

• Metals and alloys industry • Certain mineral-based manufacturing industries

Srinath Manda, Programme Manager – Transportation & Logistics Practice, Frost & Sullivan, South Asia, Middle East and North Africa

RAILWAY TRANSPORTATION FACILITIES INSIGHTS & OUTLOOK

OPTIMISING LOGISTICS OPPORTUNITIES

FOR ALUMINIUM PLANTS

To increase route capacity creation, the Railways has undertaken doubling and trebling of line capacity in certain sections. It has also initiated measures to increase wagon pool. However, in the face of investments lined up by the aluminium sector, capacity enhancement by the Railways has to be carried out in a sustained manner to restrict transportation bottlenecks both for raw materials as well as for finished products. This will make plant utilisation optimum for aluminium producers.

ALUMINIUM producers in India have major expansion plans in hand in view of the rising domestic and global demand. This would call for the creation of major railway transportation facilities for carrying raw materials and finished aluminium products. Railway transportation facilities would be required both in terms of interplant and intraplant movement and sufficient number of rolling stocks. Besides, there have to be adequate linkages between the bauxite mines and production centres.

According to a senior production official from Vedanta Alumina, “There would be a large-scale specialised requirement of infrastructure from the

railways for the aluminium producers.”

In accordance with this, there would be large-scale demand for special purpose railway wagons for handling alumina that would go to the silos. Further, there would be requirement for special purpose wagons to handle caustic soda without losses. Wagons would be required for petrocoke and coal transportation for captive power plants. Vedanta is in the process of setting up a captive power plant for its new aluminium plant in Orissa.

Expansion plans have been charted out by National Aluminium Company (NALCO) in Orissa. The public sector aluminium major has charted out a major expansion plan of `10,000 crore

to be executed in phases. The PSU and one of India’s low-cost aluminum producer proposes to expand its mining capacity to 63 lakh tonne, alumina capacity to 21 lakh tonne aluminum capacity to 4.60 lakh tonne and captive power generation to 1,200 MW.

MEETING REQUIREMENTS To cater to expansion requirements, apart from specialised wagons to handle aluminum and caustic soda, there would be requirement for sufficient volumes of BOBRN wagons with facilities of bottom discharge. At par with sufficient number of wagons, there would be requirement of facilities to load and unload wagons at a faster pace without

JANUARY 2012 • SMART LOGISTICS • 39

Railway transportation facilities, continued

losses. There would be requirement of wagons that can go in merry-goround circles with faster mobility. As per aluminum producers, there is a shortage of special types of wagons for transporting alumina and caustic soda.

This is because wagon manufacturers have limited production capacity for the specialised wagons. Additionally, Railways has very limited number of specialised wagons at their pool for transportation of alumina.

Further, as per producers, with expansion plans lined up, there would be requirement for flat type and covered wagons for the transportation of finished aluminium products. As of now, there is a shortage of the same. While the Railways has taken an initiation to increase the wagon pool for flat type and covered wagons, there would be requirement to augment the capacity of specialised type wagons. It would be important that production of special wagons for transportation of alumina and caustic soda be backed by adequate research and development.

MAINTENANCE FACILITIES Specialised wagons require specialised maintenance facilities. Currently, the Railways has restricted facilities for the maintenance of tank wagons.

The Railways needs to enhance these.

Also, producers are of the view that the Railways needs to ramp up wagon availability for the transportation of finished products. This is because transportation by road is inadequate in terms of the capacity it offers owing to the high capacity of finished products.

Moreover, the transportation of goods by road is uneconomical over long distances.

While wagons would be a major area of demand for aluminium producers, there would be demand for locomotives for interplant and intraplant movement.

There is also a shortage of shunting locomotives. Apart from making locomotives available, the Railways would have to set up maintenance facilities. Additionally, the Railways

40 • SMART LOGISTICS • JANUARY 2012

ACT ALUMINIUM MAJOR NALCO IN ORISSA HAS CHARTED OUT A MAJOR EXPANSION PLAN OF `10,000 CRORE TO BE EXECUTED IN PHASES. THE PSU AND ONE OF INDIA’S LOW-COST ALUMINUM PRODUCER PROPOSES TO EXPAND ITS MINING CAPACITY TO 63 LAKH TONNE, ALUMINA CAPACITY TO 21 LAKH TONNE ALUMINUM CAPACITY TO 4.60 LAKH TONNE AND CAPTIVE POWER GENERATION TO 1,200 MW. would also need to set up railway sidings with the plants apart from related infrastructure.

PLANT CONNECTIVITY, A MUST It would be important to make adequate number of wagons, other rolling stocks and siding facilities available to aluminium producers. However, it would be most significant to ensure adequate rail connectivity from bauxite mine heads to the plants. Rail connectivity would be important to plants that have major brownfield expansion plans and greenfield plants lined up.

Railway connectivity assumes special importance for aluminium projects that are proposed to be set up in Orissa.

Orissa posses a total of 69.7 per cent of bauxite reserves in India amounting to a mammoth of 1,733 mn tonne.

Most of the aluminium reserves are concentrated in Koraput, Rayagada, Kalahandi and Bolangir districts. With substantial bauxite reserves, the state has been getting good numbers of fresh proposals from different private companies for setting up alumina and aluminium plants.

The state has received plans from Utkal Alumina International, a 100 per cent export-oriented joint venture of Hindalco Industries and Canadian company, Alcan, at Kashipur in Rayagada district and another by Vedanta Alumina, a Sterlite Group company at Lanjigarh in Kalahandi district. Both these projects will have an annual production capacity of one million tonne.

Hindalco Industries has also signed a memorandum of understanding with

the State Government for setting up a world-class aluminum complex. The integrated aluminum project will consist of an alumina refinery of one million tonne per annum, an aluminum smelter plant of 2.60 lakh tonne per annum, a captive power plant of 650 MW and bauxite mines of three million tonne.

The project is estimated to cost about `11,000 crore.

Raykal Aluminium Company Limited, a joint venture of Larsen & Toubro and Dubai Aluminium Company. The three million tonne per annum capacity alumina refinery will come up in Rayagada district.

The `15,000 crore integrated project comprises alumina refinery smelter, bauxite mining and development of associated infrastructure & related utilities. The first phase of 1.5 million tonne alumina stream is likely to be commissioned during 2010 itself.

NEED FOR CONNECTIVITY Most of the projects will have integrated captive bauxite mines to avoid cost escalation in production. To avoid cost escalation, there has to be adequate rail connectivity between the bauxite mines and points. However, as per the Railways Ministry, there is a largescale route saturation amounting to over 150 per cent in most of the traffic routes of East Coast Railway. Besides, there is almost negligible rake capacity for transportation of raw materials (bauxite) coal for captive power plants for finished aluminium products. Orissa comes within the zonal jurisdiction of East Coast Railway under Indian Railways.

GENERAL MOTORS DE MEXICO CASE STUDY

ACHIEVING EFFICIENCY ACROSS THE

TRANSPORTATION NETWORK

© GM Corp.

Penske Logistics has a long history as a supplier to General Motors (GM). With a reach that extends to more than 60 countries, logistics is no small challenge for GM. GM’s Mexican subsidiary, General Motors de Mexico, selected Penske to be its lead logistics provider to help drive efficiency throughout all aspects of its distribution network. Within the first six months of the partnership, transportation costs had already been significantly reduced. And, more improvements were underway, including the implementation of proprietary software to provide instant access to real-time updates from every supply chain participant.

GENERAL Motors de Mexico (GMM) works with more than 1,700 suppliers that produce approximately 13,000 parts a day. From railcars to chartered planes, the company’s transportation network is sophisticated and complex. GMM selected Penske Logistics to be its lead logistics provider (LLP). The fit was a natural one. At the time, Penske Logistics had served as LLP for several of GM’s US operations and had managed border crossings in Laredo, Texas, for nearly two decades. With an acute understanding of the Mexican culture and GMM’s operating principles, Penske Logistics had a head start on helping GMM drive efficiency throughout all aspects of its distribution network.

CREATING COLLABORATION Previously, GMM internally managed its complex transportation network, which consisted of eight operations on three sites in Ramos, Toluca and Silao. As higher demands continued to be placed on GMM’s production and distribution operations, its

transportation network lacked collaboration. In effect, each operation was making individual logistics decisions and creating costly redundancies & inefficiencies throughout the supply chain.

As LLP, Penske was challenged with reducing costs and improving efficiency in GMM’s inbound transportation operations. Penske would now manage the inbound transportation of materials to each of the plants, as well as manage GMM’s carrier relationships.

Penske presented a three-phase plan to be implemented within the first year: Phase 1 – Benchmarking (90 days): Penske

Challenges • To reduce costs and inefficiencies in GMM’s growing inbound transportation network • To increase overall visibility throughout GMM’s supply chain • To establish accountability procedures and measures for GMM’s suppliers and carriers

would conduct a comprehensive study of GMM’s inbound transportation operations, including processes, infrastructure and personnel.

Phase 2 – Process Design and Engineering (90 days): New procedures would be developed based on inefficiencies and benchmarks discovered in Phase 1.

Phase 3 – Implementation (180 days):

Solutions • Within six months, Penske had reduced transportation costs by 15 per cent • Penske implemented its proprietary Logistics Management System software to provide instant access to real-time updates from every supply chain participant, thus enabling proactive resolution of supplier and carrier issues • Penske reduced GMM’s carrier base from 100 carriers to 20 within the first year. The rate of on-time supplier pickups has increased to 98 per cent, while delivery rates are at 99 per cent.

JANUARY 2012 • SMART LOGISTICS • 41

General motors de mexico, continued

The implementation and deployment of Penske’s LMS software undoubtedly played the biggest role in improving GMM’s inbound transportation efficiency. Using this software, Penske’s system operators can provide carriers precise routing and scheduling information on a daily basis, while tracking exact part numbers and pickup quantities.

Penske would implement these new procedures, thus ensuring full ramp-up in all three plants.

During Phase 1, Penske closely studied every aspect of GMM’s inbound transportation operations.

From carrier negotiation to routing, each individual activity within the plants was process-mapped to identify inefficiencies.

The conclusion was two-fold.

Penske determined that GMM lacked overall supply chain visibility, as well as quality control measures. GMM could not accurately forecast inventory needs at plants or monitor carrier progress.

The carriers lacked the efficient way to communicate the status of inbound shipments to plant operators. Plant operators were spending valuable time tediously tracking carrier status.

Furthermore, there was no way to effectively identify low performers within the supply chain and hold them accountable.

With the benchmarking phase complete, Penske outlined its plan for operational improvement. Penske would implement its proprietary Logistics Management System (LMS) software to track supply chain activity.

Concurrent to the implementation of its LMS software, Penske would implement new quality control processes at each step in the supply chain to achieve supply chain visibility and accountability. Penske would maximise GMM’s trained labour force by hiring or transitioning the

42 • SMART LOGISTICS • JANUARY 2012

company’s current personnel to help implement many of the new processes and systems.

During implementation, Penske hired and assigned approximately 120 staff to man GMM’s improved inbound transportation operations. GMM’s existing material follow-up personnel represented nearly 80 per cent of this staff, thus avoiding displacement of GMM’s labour force.

The implementation of Penske’s technology and new inbound transportation processes delivered GMM a return on investment almost immediately. Within six months, transportation costs were down by an astounding 15 per cent.

SUPPLY CHAIN VISIBILITY EXCEEDS EXPECTATIONS The results of Penske’s three-phase plan exceeded GMM’s expectations.

Penske substantially reduced GMM’s transportation costs, decreased its inventory and premium freight costs and virtually eliminated assembly line shutdowns. In addition, the delivery of damage-free parts increased by 20 per cent.

The implementation and deployment of Penske’s LMS software undoubtedly played the biggest role in improving GMM’s inbound transportation efficiency. Using this software, Penske’s system operators can provide carriers precise routing and scheduling information on a daily basis, while tracking exact part numbers and pickup quantities. The LMS software was also the catalyst for new transportation processes that increase overall carrier accountability.

Upon completion of each task, drivers are required to call their dispatchers, who then log the completed activity into the LMS website.

For the first time, Penske operators had instant access to real-time updates from every aspect of the supply chain.

Penske’s LMS software proactively alerts operators of any carrier delays, which reduces the amount of follow-up

time previously expended by operators.

Operators, in turn, are able to evaluate alternatives, such as engaging another carrier or expediting freight, to ensure that service windows are met using the most cost-effective methods.

Penske also provided GMM with the ability to track, measure and rate the performance of all parties involved in the supply chain. With greater visibility of all inbound transportation operations, supply chain errors are easily identified and handled.

Every aspect of supplier and carrier performance is tracked on a scorecard, which allowed Penske to filter out parties performing at sub-standard levels. Within the first year of implementation, Penske reduced GMM’s carrier base from 100 carriers to 20. This level of accountability has dramatically improved supplier and carrier performance. Window times for supplier pickups are currently being met 98 per cent of the time, while delivery window times are being met at a rate of 99 per cent.

FUTURE OF A SUCCESSFUL RELATIONSHIP Penske achieved success with GMM through a unique relationship with the company. With a commitment to exceed expectations under budget, Penske puts 10 per cent of its management fee at risk, thus ensuring its dedication to achieve results. This commitment continues to present new opportunities for both, GMM and Penske.

Currently, Penske and GMM are considering sharing its transportation infrastructure with other companies in Mexico that have similar product or material flows. This would enable GMM to realise additional revenue and cost savings within its transportation network. Meanwhile, Penske will continue to deliver unprecedented value to GMM’s supply chain operations.

Courtesy: Penske Truck Leasing

SALALAH FREE ZONE INSIGHTS & OUTLOOK

A TAX FREE HAVEN FOR

INVESTORS With India opening its doors to FDIs and Indian companies looking at increasing its exports, the limiting logistics infrastructure and complexities surrounding the same is pushing Indian companies to expand overseas where they get a conducive business climate and a competitive advantage. This is where Oman’s Salalah Free Zone plays the role of a key enabler in offering companies a tax free haven and one of the fastest routes to ship goods to the US or to Asia.

PRERNA SHARMA

WITH a total land area of 3,09,500 sqkm, the Sultanate of Oman, is the second largest country in the Gulf Cooperation Council (GCC). It is strategically located adjacent to the Strait of Hormuz — a critical transit route for global crude oil to the North. To the South of Oman, lies the vital equatorial trade sea route. An economically, politically and socially

Today, Salalah is among the world’s fastest growing cargo transshipment ports, and is fully geared to act as the entry and exit point for much of the free zone-related cargo — whether container, general cargo, bulk, oil, gas, liquid, or Roll On Roll Off cargo. For businesses at the SFZ, the advantage of this synergy is unmistakable. stable nation, Oman has a substantial trade surplus and low inflation. Oman is one of the most liberalised markets in the region and has invested heavily in economic diversification.

Over the times, Salalah has been a major port of call for maritime trading fleets between the Far East, India, and Europe. Even over land, it was once the centre for spices and Frankincense trade on the Silk Route. Strategically located on the sea route between the Arabian Peninsula, East Africa and Indian Ocean Rim countries,

and boasting the fastest-growing seaport in the entire Middle East, Salalah today offers one of the most significant pro-business environments in the region.

To carry forward this growth momentum, Salalah Free Zone (SFZ) has been established by the Government of the Sultanate of Oman, with a commitment to make its 19 million sqmt one of the most progressive and desirable business locations in the Gulf. With an array of business-friendly incentives, proximity to the Middle East’s fastest growing seaport and world-class infrastructure, SFZ offers investors the ideal base in the Middle East to reach global markets.

SFZ was established by Royal Decree in 2006 mainly to attract FDI to the country and create job

opportunities for the local populace in the free zone. Commenting on the importance of this zone, Ali Tabouk, Chief Commercial Officer, Salalah Free Zone, informs, “The Middle East has always been one of the preferred investment zones for Indian companies and Salalah is located in the south of Oman, at the southern tip of the Arabian peninsula, where all the major shipping cargo from east & west pass by. This has been a major advantage for companies setting up their base in the region.”

The unique aspect of this port is that within two weeks, one can ship cargo to the US or Asia, which is interesting because no cargo from India can cover the distance in such a short span of time. There are so many companies, which have been setting up base in Salalah to take advantage of

Figure 1: Import and export transit times are on average 32% lower than competition

JANUARY 2012 • SMART LOGISTICS • 43

Salalah Free Zone, continued

this opportunity. One of them is TVS who has been garnering greater export benefit by operating out of SFZ. The logistics hub is being developed around the free zone, port & the airport to be the true intermodal operator.

OPPORTUNITIES FOR INDIAN COMPANIES Several Indian companies have shown significant interest in SFZ ever since it opened its doors for business in 2006.

SFZ has been structured to focus on three core globally competitive functional clusters. These have been identified as: • Materials processing of non-energyrelated intensive organic, minerals, petrochemicals and other materials from locally available & globally traded resources

investors signed in the recent months, there are significant opportunities for Indian companies in the business of limestone-derived products and other highly sought-after resources that are in natural abundance in Oman.

To this, Tabouk reverts, “The importance of the Indian market has encouraged us to build partnerships with a number of key associations in India to ensure that SFZ has a strong presence on the ground in India.

There is a possibility that at a later stage, SFZ may consider establishing a representative office in India.”

INVESTMENT INCENTIVES SFZ has a number of attractive investment incentives that have been deliberately designed to position the zone as a cost-effective competitor to

The Middle East has always been one of the preferred investment zones for Indian companies and Salalah is located in the south of Oman, at the southern tip of the Arabian peninsula, where all the major shipping cargo from east & west pass by. This has been a major advantage for companies setting up their base in the region.

ALI TABOUK, CHIEF COMMERCIAL OFFICER, SALALAH FREE ZONE • Light manufacturing and assembly that capitalise on cost competitiveness, proximity to consumer markets and global trade under the Free Trade Agreement with the US and Singapore • Global logistics and distribution to consolidate inbound flows from and outbound flows of goods to the surrounding region of Africa, Middle East & GCC, India and the subcontinent.

As a result of this focus, and the facilities & support that SFZ has in place, the free zone has become an attractive destination for Indian investors in the automotive, textiles, packaging, textiles, chemicals, food and consumer goods sectors. In addition, as evident in the new memoranda of understanding between SFZ and Indian

44 • SMART LOGISTICS • JANUARY 2012

other free zones in the Middle East.

On the financial side, the free zone has no minimum capital investment requirement, which makes it very attractive for small and medium-sized businesses. There are no customs or duties, and no limitations on capital & profit repatriation. There is a 30-year tax holiday on profits and dividends from businesses set up in the zone, and there is no personal income tax.

SFZ has paid a lot of attention to ensure that regulatory issues are handled effectively and with minimum interference from bureaucracy. As a result, foreign investors are entitled to 100 per cent business ownership and can sign long-term tenancy leases. SFZ has set up a special one-stop facility to help foreign investors process all the documentation they will require to

establish a legal operating entity in the free zone, thus ensuring a far more streamlined and efficient process.

Cost inputs are an important factor for all foreign investors to consider, and as such, SFZ ensures that all utilities required by businesses operating in the SFZ are extremely cost competitive.

Also, a key issue for all foreign investors will be sourcing labour for their operations, and as such, SFZ has made available a service to source competitively priced labour for tenants in the zone, while, at the same time, providing quality accommodation for these guest workers.

A further financial incentive is the Free Trade Agreement with the US — the only one in the Middle East other than Bahrain. In terms of the agreement, all goods imported into Oman and beneficiated for re-export are able to enter the US customs and duty-free. This gives any company exporting to the US via SFZ a significant advantage over competitors that do not benefit from a Free Trade Agreement.

SFZ offers Indian investors, who are expanding their businesses globally, a significant advantage via its reexport scheme under the Free Trade Agreement with the US. Under this agreement, US-destined products manufactured in Oman or imported and beneficiated with a minimum of a 35 per cent value add enjoy duty free status. The FTA is also a testimony of US’ confidence in Oman to protect intellectual property rights and to apply international standard in business rules and investment protection.

LOGISTICAL BACKBONE Located on the world’s fastest growing and busiest shipping lane, Salalah Port, which is managed by the AP Moller Group, is the regional hub for several global shipping lines. The recent construction and official opening of two additional berths and a new 3.5 km breakwater allows the port to handle approximately 4.4 million TEU

KEY TAKE AWAYS

entry and exit point for much of the free zone-related cargo — whether container, general cargo, bulk, oil, gas, liquid, or Roll On Roll Off cargo. For businesses at the SFZ, the advantage of this synergy is unmistakable.

CONTOURS OF NEW GROWTH

per annum, and up to eight container ships at once. The port also has some of the largest container-handling cranes in the world.

In fact, with maritime trade having increased by 400-500 per cent over the last two decades, the economies of scale makes it essential for large

container ships to move between super hubs like Salalah, which is the only port between Europe and Singapore that can accommodate S-Class vessels — the world’s largest container ships.

Today, Salalah is among the world’s fastest growing cargo transshipment ports, and is fully geared to act as the

The globally strategic location of Salalah is unrivalled by any other free zone, as it provides investors a natural edge in terms of access to their target markets in Europe, Asia, Africa and Australia. The saving with respect to time as compared to any other free zone in the region is substantial enough to open a wide range of opportunities for investors to explore new business horizons.

Currently, SFZ has a capacity of 6 billion containers, which it plans to expand to 15 billion. With a vision to be the global leading hub for quality industrial and logistical activities, SFZ is charting contours of new growth.

JANUARY 2012 • SMART LOGISTICS • 45

INSIGHTS & OUTLOOK SUPPLY CHAIN MANAGER’S DIARY

BASIC

SUPPLY CHAIN CONCEPTS

The supply chain professional today is a confused one. With ever higher benchmarks, think about how to cope with all of these. Moreover, he is exposed to multiple new ways professional has tools that can help him manage inventory much better and help him a thing of the past?

I was still dark outside. I groped for the clock

woke up with a start as the alarm went off. It

ol

contr

a list gets y. He r and squinted with tired eyes. 6 am? My mind e t s i In r rana e min suddenly cleared. Great, this was the day we had h, th s in our g and tells t n o t m s old c a presentation to make before the Chairman on Each he produ the stock t. I allot g t h how we were controlling the material cost and ck on be boug inister of all a che m he to inventory. If the situation was not so serious, I would keeps at needs Also, the back of t . e h to e h w t have laughed at the thought. All over, prices were s m sa at me ain y the w grains e older gr old u spiralling without any tangible reason and customers b o e t e h the n ifts t at th were becoming increasingly fickle. All this boded ill for keeps y and sh we can e t ar any self-respecting materials management professional. gran nt so tha o r f Our organisation was pondering over hiring Oayama e th first.

San, a renowned turnaround artist, to help us. He is ones known for his path breaking work on cost and inventory management.

I had just showered when my wife called from the floor below, “Dear, the toaster is on the blink again. Care to fix it?”

“Do not worry,” I said, “It must be a loose connection,” and gave the cord a shake with my wet hand. I vaguely heard my wife scream as the jolt of electricity coursed through me, and then, the world faded into darkness… The call of a hyena woke me up. As I struggled up, I saw the beast gazing a few feet away. I broke into sweat and as I was about to get up, I heard foot falls and there stood before me a veritable giant clad in fur and carrying a broad bladed spear. He ordered me to follow him. Soon, we came to a group of 30 hamlets in the centre of which there was one hamlet that was more impressive than the others — the chief’s I supposed.

They left me there for some time and soon, a group of senior warriors gathered around me. They were talking among themselves in an accent I could strangely understand. “We do not want strangers here. Let us sacrifice him. As it is there is less to eat and it has been long since I tasted human flesh,” an old member said. The gathering murmured until the chief strode in. I decided to take things into my hands and addressed him.

We a “Great Chief, I am a very learned person from the future, who has knowledge hav re igno that can immensely benefit you,” I said. The Chief looked doubtful. “Well, e su ran t plac c what is it that you do back in your world?” I replied, “I am a e. Bu h a be people . We mon t wh autif Supply Chain Manager and I buy the material when needed d u t abo h, my at we l syst o not in correct quantities and at the correct price. I also ensure we em ut t d t r o e is a in h trea do not end up with too much stock.” sur e amou surer in that e yIc add ach nt o for The chief looked unimpressed. “Do they actually PAY you i a his tional n spen f gold ms me food to do these things?” he asked. adv i d n f t ice. the to s or pu he If I went on to explain… “We have a system called budgeting as t vers reasur we ha tock. I rchasi ng ve m y, w only per which we plan what we would need during the year.” a. T wha e h t we is ensu buy m ore gold follow “Well,” said the Chief, “We do that here as well. Each year, ore do n res in a when the sun sets early (i.e. during winter), all the Chiefs meet w nd ot n e vice eed. never and the witch doctor forecasts the harvest for the ensuing year. If buy the forecast predicts poor harvest, we send out our people to procure as much grain as possible and store the grain before the food becomes scarce. But if the harvest is expected to be good, we wait for the…”

46 • SMART LOGISTICS • JANUARY 2012

ry vento

A

THING

OF THE

PAST?

an unpredictable environment and ever reducing resources, he is mostly unable to of doing things that promise to help him achieve his objectives. Today, a supply chain make the manufacturing behemoth lean. But are these basic concepts new or are they I am I bu a Supp y “Yes, yes,” I interrupted, “This is what we call forward buying in my in c the m ly Chai n orre a world.” I continued, “We have a novel concept called Kanban.” corr ct q terial w Mana g u e The chief signalled me to remain silent. “Further,” he continued, not ct pric antiti hen ne er and e e e e s . n “We buy scarce commodities in large quantities. However, what we and ded We h d up I also at e w a n v i require regularly is easily available in nearby villages, and so, we buy t s e as p a sy h too ure w the e r s e do muc tem it when we need it. We even have a signal system in place. See that w wou h c ld n hich w hill? The moment we are out of meat in the central store hut, my e pla alled bu stock. eed nw d dur man sends a smoke signal to the next village and a cart of meat hat geting ing t w h e e ye is delivered to us. We pay for the same and collect the order. ar.

I do not know about your Kanban, but this works fine for us.

Now, tell me about your Kanban.”

I muttered, “You see, it works in the same way. We use cards instead of smoke signals. But let me tell you about the importance of inventory turns,” I said and went on to explain to him in detail about the subject.

The Chief heard me patiently and then said, “We are ignorant people. We do not have such a beautiful system in place. But what we do is that each month, my treasurer informs me about the amount of gold in the treasury I can spend for purchasing additional food to stock. I only follow his advice. If we have more gold in the treasury, we buy more and vice versa. This ensures we never buy what we do not need.”

“Surely, you would not have heard of cost of quality?” I asked the Chief.

The Chief replied, “I know all about quality. If the grains we buy from the neighbouring village are bad, they have to replace the same the next day or give us twice the amount. We have a pact to this effect.

Similarly, if I have sent anything that is not of use to my customer, I will do likewise; else lose face among my people. At the end of the month, my minister tells me which village sold us the best grains and the next month, we buy grains from them.”

“What about inventory control?” I asked. The Chief explained, “Each month, the minister gets a list of all the products in our granary. He keeps a check on the stocks and tells me what needs to be bought. I allot gold to buy the same. Also, the minister keeps the new grains at the back of the granary and shifts the older grains to the front so that we can eat the old ones first.”

So much for first in first out (FIFO) I thought.

“About lean manufacturing…” I said. However, the Chief interrupted, “I do not know about lean manufacturing, but I do know about lean. Look at me and around you.”

I looked at him. He was undeniably in great physical shape, not an ounce of fat on him. I looked around and there was not a thing in sight that was not of any use. The Chief then said, “I heard you out. I am sorry to say that you have nothing to offer. In line with the rules of the village, everything in it must be useful. As you do not meet this criterion, we must sacrifice you.”

Speechless, I gazed at his face as my hands were grabbed and I was led to the sacrificial altar. As my head was forced down, I did not feel fear, rather felt depressed. I wondered, “After all these years, have we discovered nothing new? All our concepts are just a rehash of what was already in existence eons before?”

Before I could think any further, the blade descended with a blur and wetness enveloped my face. Startled, I woke up only to find my dog slobbering my face. I looked at the alarm. It was 6 am.

“Thank God,” I thought, “It was just a dream.” I showered and shaved and heard my wife call from downstairs, “Dear, the toaster is on the blink again. Care to fix it?”

AK Chari, GM Supply Chain, Ferromatik Milacron India E-mail: ArunKumar_Chari@milacron.com

JANUARY 2012 • SMART LOGISTICS • 47

AUTOMATION TRENDS APPS FOR WMS

Customers and suppliers cannot wait around for the next major WMS upgrade

Custom codes are timeconsuming and risky

Waiting for a WMS software vendor to make system changes

WMS upgrades need not be prohibitively expensive

The traditional supply chain software delivery model does not promote rapid innovation

Illustration By Sanjay Dalvi

Maintaining all the features of traditional WMS

6 WAYS

TO ENHANCE SUPPLY CHAIN EFFICIENCY

The industry, customers and even the government have unending lists of new requirements and regulations. And sometimes, it seems like it is difficult to adjust a business as fast as the requirements roll in. Moreover, those little ‘code adjustments’ a software vendor makes to a system always comes with a headache-inducing invoice. Applying an app store model to a WMS simplifies and speeds maintenance, system changes and scheduled upgrades.

THERE are millions of apps to help us manage our work and personal lives on our smart phones, but what about apps for supply chain management software? Would it not be great if we could also browse and add functionality to the warehouse management system (WMS)? The next generation in software adaptability is here. Here are six reasons why it is time for an app store for your supply chain management software...

1

MAINTAINING ALL THE FEATURES OF TRADITIONAL WMS

Traditional enterprise software delivery models add new features into the ever-growing ‘master’ applications.

Most systems have been developed over at least 10 years and nearly every customer requested feature has been added to the product and is enabled by sets of interdependent switches.

This causes the code base to grow 48 • SMART LOGISTICS • JANUARY 2012

increasingly bloated and adds risk and additional complexity to software maintenance – like upgrades – apart from making it difficult to make even small adjustments to the software to fit a business. An app store model allows one to select and add only the new functionality that the business needs, which reduces complexity & risk and streamlines the system support.

An app store delivery model for supply chain management software helps keep scheduled upgrades lean and simple.

2

CUSTOM CODES ARE TIME-CONSUMING AND RISKY

Modifying traditional monolithic WMS software is always risky as one could affect another part of the application during the process.

Ideally, a WMS should have a more modular & adaptable approach and

architecture that supports a business’ need for continuous evolution and, at the same time, empowers one to personalise one’s system as and when changes are needed. The app store delivery model further minimises risk by delivering new functionality via on-demand, modular applications.

Having modular business processes segregates the process needed to modify from other business processes.

This means quicker adoption of new technology and less risk of inadvertently breaking something.

CUSTOMERS AND SUPPLIERS CANNOT WAIT AROUND FOR THE NEXT MAJOR WMS UPGRADE

3

You know that feeling you get when you read about a new government or market regulation coming down the pipe and you wonder how long it will be before your software vendor will make the compliance workflow available in

Moosejaw Boosts Efficiency and Accuracy with HighJump WMS in the Cloud HighJump Software, a global provider of supply chain management software, recently announced that Moosejaw, a multi-channel specialty outdoor retailer, has improved warehouse efficiency and inventory accuracy with the HighJump warehouse management system (WMS) in the cloud. The company implemented the WMS in its Madison Heights, Michigan. distribution centre within tight timelines to prepare for the busy holiday season.

Moosejaw is a multi-channel retailer, distributing its goods online, by catalogue and in its seven retail stores. With plans to grow its retail storefront footprint and distribution centre square footage over the next several years, Moosejaw wanted to replace its homegrown system with a WMS to manage the growth. In the months following the go-live of the HighJump WMS, Moosejaw was already experiencing a 20 per cent increase in efficiency and increased inventory accuracy to over 99 per cent. The HighJump system has also enabled Moosejaw to implement a cycle counting process.

“Moosejaw is a very customer-focused business, and HighJump WMS has helped us provide an even better experience for our customers. HighJump Software won us over with its ‘can do’ approach to our requirements and continues to impress us by delivering on their word,” said Chad Caudill, Director –Customer Service & Warehouse Operations, Moosejaw.

Russell Fleischer, CEO, HighJump Software, said “We are proud to add Moosejaw to our growing list of specialty retail customers. Our unique cloud deployment model for WMS helped Moosejaw get up and running in time for its busy season.

HighJump® WMS In the Cloud™ is a highly scalable platform that effectively supports high-volume, complex retail distribution processes and provides the simplicity of a software as a service (SaaS) model.”

the next upgrade? Oh, wait — that means you will have to figure out how to get a major upgrade completed first.

Well, the government can wait...right?

With an app store, a WMS vendor can package new functionality in a way that is fast and easy to access and deploy. This provides customers with instant access to the latest supply chain technology innovations through a centralised location. There is no need to wait for the next major upgrade in order to get your hands on the functionality you need.

4

WAITING FOR A WMS SOFTWARE VENDOR TO MAKE SYSTEM CHANGES

It is unreasonable for a WMS vendor to claim that their system includes all the features and workflows a business will ever need. The reality is that customer and industry requirements will change. A business’ operations may grow, or completely evolve to provide new services for customers.

The conventional WMS necessitates an engagement with a software vendor to perform these changes through costly and disruptive source code modifications. However, a WMS with flexible & adaptable architecture allows one to easily make changes to the system without disrupting the rest of the business and, that too, without complicated source code modifications.

Adding an app store delivery model to the mix allows one to quickly and inexpensively apply any needed changes and new technology whenever needed without the vendor invoice.

5

WMS UPGRADES NEED NOT BE PROHIBITIVELY EXPENSIVE

Many conventional WMS contain a shortcoming in their design in which most changes can only be accomplished through the addition of inflexible custom coding, i.e., coding which does not carry forward with an upgrade. In some situations, this reaches an extreme where so many changes have been made that even minor modifications become a major

undertaking. An app store delivery model for supply chain management software helps keep scheduled upgrades lean and simple. Through an app store delivery model, the software vendor is able to add new functionality not widely required by customers to the app store instead of the base product.

Customers that want the new workflow can easily browse for and snap in the new app. The rest of the customers are not affected, which implies that the software code restricted to the processes that are required for their business and upgrades are dramatically simplified.

THE TRADITIONAL SUPPLY CHAIN SOFTWARE DELIVERY MODEL DOES NOT PROMOTE RAPID INNOVATION

6

Although there are obvious differences between creating and deploying apps for a smart phone and apps for a complex distribution operation, the inherent appeal is the same: app stores offer you

An app store model allows one to select and add only the new functionality that the business needs, which reduces complexity & risk and streamlines the system support. and the technology provider the liberty to innovate faster. Lengthy delivery timeframes and protracted upgrades are not the richest soil in which one can grow supply chain innovation. But one of the most significant benefits of the app store model is the increased rate at which a vendor can package and deploy – and one can install and begin using – new supply chain innovations.

It is this innovation that will give one an edge over competitors by allowing one to incorporate the needs of customers quickly, integrate new industry requirements and simplify training so that a business will not skip a beat.

Courtesy: HighJump Software Inc.

JANUARY 2012 • SMART LOGISTICS • 49

POLICIES & REGULATIONS TAX FREE BONDS

WILL

INDIAN PORTS

REAP THE BENEFITS?

Reportedly, on the request of the Shipping Ministry and coupled with an objective to make the sector more lucrative and attract investments, the government, in its Union Budget, had earlier granted a whopping `5,000 crore tax free bonds to raise funds for the country’s port industry. However, ever since the proposal was announced, the Shipping Ministry has not been able to draw a strategy on how to move ahead. Instead, it has been constantly trying to seek the advice and assistance of Finance Ministry officials. Given that, we are in the latter half of the fiscal, and still nothing much is being worked out, the port sector may miss the benefits of the opportunity considering there is not much time to float the bonds.

ARINDAM GHOSH

DEVELOPING and creating proper infrastructural facilities is crucial to support the progress and development of any growing or emerging economy.

This statement holds true for a country, like India, which is globally one of the fastest growing economies. The infrastructure sector in India has been growing at a rapid pace and along with the initiatives taken by the Government of India towards promoting the sector, infrastructure has become one of the booming sectors of the country. It is noteworthy to mention here that the Government of India has planned to spend $1 trillion in the next Five Year Plan (2012-17) with an aim to promote the infrastructure sector.

The port sector, which forms a major part of the infrastructure sector in India, majorly contributes to the country’s growth story. Indian ports handle around 95 per cent of the total volume of the country’s trade and about 70 per cent in terms of value. The country

50 • SMART LOGISTICS • JANUARY 2012

has 12 major ports and 200 non-major ports (minor and intermediate ports) spread across nine (coastal) maritime states. While major ports handle 75 per cent of the total cargo traffic, minor ports account for 25 per cent of the traffic. In India, the major ports are located in Mumbai, Jawaharlal Nehru Port Trust, Kolkata (with Haldia), Chennai, Visakhapatnam, Cochin, Paradip, New Mangalore, Marmagao, Ennore, Tuticorin and Kandla.

IMPORTANCE OF TAX FREE BONDS Tax free bonds primarily enable the issuer to raise or generate funds at a comparatively lower rate in comparison to rates in normal bonds. They are effective tools to finance infrastructurebased projects. The pricing of a bond issue depends on the credit rating of the ports. A good credit rating indicates lesser risk, which further makes it more attractive for investors.

Presently, in some cases, the tax free

bond issues in the market are offering an interest of about nine per cent.

The `5,000-crore tax free bond initiative for the ports sector was part of the entire `30,000 crore tax free bonds allotted to the infrastructure sector for this financial year. The money raised will be used to finance the dredging operations and further boost the infrastructure requirements.

Earlier, the Finance Ministry had rejected an ambitious proposal by the country’s largest container port Jawaharlal Nehru Port Trust (JNPT), under which it was planning to raise about `1,600 crore from tax free bonds to fund the first phase of dredging at the port, but the proposal was declined as the Finance Ministry said that the port trust has sufficient reserves and various reports also say that the Shipping Ministry has strictly ordered it to do a proper groundwork and research before sending any proposal to the Finance Ministry for approval.

INVESTMENT OPPORTUNITIES Private participation has led to an actual capacity addition of 102.3 MTPA. The government is planning to launch 10 major expansion projects, which will add a capacity of 44 MTPA. The private sector contribution as per the Working Group Report on the port sector for 12th Five Year Plan for major ports is proposed at `51,036.56 crore.

In December 2009, the Department of Economic Affairs from the Finance Ministry came up with a report which said that there are a lot of investment opportunities that the port and its sub sectors offer. These include: Major ports: This refers to new terminals added to the existing 12 major ports, which is a very attractive proposition.

The availability of adequate space, however, may be a constraint.

Minor ports: Minor port project sizes are higher since these are greenfield projects that require capital dredging as well as development of onshore infrastructure. Strategic location and operational efficiency are going to be critical factors.

Connectivity projects: Structural demands stemming from ports benefit both rail and road connectivity projects.

Private sector participation has been allowed in a variety of ports services, which includes construction and operation of terminals, warehousing & storage facilities, dry docking and ship repair facilities. The report added, “Under the National Maritime Development Programme, most of the major ports have formulated their projects with the fund requirements and its funding pattern under the five broad heads of development process as: • Projects related to port development (construction of jetties, etc.)

• Procurement, replacement or upgradation of port equipment • Deepening of channels for improvements in drafts • Projects related to port connectivity

• Other related schemes.

The investment envisaged for the above projects is estimated at `55,803.73 crore, of which `3,609 crore is expected through budgetary support, `13,771.54 crore through the port’s own internal resources, `34,505.34 crore is likely to come from the private sector and `3,917.85 crore from other sources, which include investment by the Railway Ministry, NHAI, etc.

structure for port and dock workers has been another major initiative of the Government of India to incentivise the workforce and motivate it for better results. The wage structure settlement reached with the representatives of five major federations of port and dock workers on January 19, 2010, envisages an increase of 23 per cent in the wages of Class III and Class IV employees of Major Port Trusts and Dock Labour Boards.

OTHER GOVERNMENT INITIATIVES

WHAT THE 12TH FIVE YEAR PLAN HAS IN STORE FOR THE PORTS SECTOR?

The government has taken a lot of initiatives to generate funds for ports in India and private sector participation in the port sector has gained momentum.

It has appointed a high level committee to finalise and come up with a plan for improving rail-road connectivity of major ports in India. The plan is to be implemented within a period of three years. Further, several changes in customs procedures are being carried out with an objective to reduce the dwell time and the cost of transaction.

The government has also delegated powers to the respective port trusts for facilitating speedier decision making and implementation. At the same time, several measures to simplify and streamline procedure related to security and customs are being initiated. Also, the Government of India recently announced a series of measures to attract foreign investment into the port sector, some of which include no approval or permission mandatory for foreign equity up to 51 per cent in projects providing supporting services to water transport, such as operation and maintenance of piers and loading & discharging of vehicles. In addition, there is automatic approval for foreign equity up to 100 per cent in the construction and maintenance of ports and harbours. Meanwhile, if the total foreign equity investment exceeds an amount of $0.30 billion (`15 billion), the proposal will be referred to the Foreign Investment Promotion Board (FIPB). A revision of the wage

The traffic handling capacity of major ports has gone up by about 48 per cent in the last five years. It has increased from 389.5 MT in 2003-04 to 574.77 MT in 2008-09. A three-fold increase is projected in the traffic handling capacity of major ports by 2025-26 by augmenting the capacity to 1595.07 MT. The Shipping Ministry has prepared the report of the Working Group on Port Sector for the 12th Five Year Plan and submitted the same to the Planning Commission for consideration and approval. The total outlay, excluding the private sector proposed for the port sector in the ministry, is `26,021.64 crore of which the outlay for major ports is `22,757.39 crore, while the balance outlay projected is for Dredging Corporation of India, Andaman & Lakshadweep Harbour Works and Sethusamudram Corporation Ltd., etc.

The report of the Working Group on Port Sector is still under consideration by the Planning Commission and hence, details on investments and allocation can be stated only after the Planning Commission’s approval of the 12th Five Year Plan allocation. Further, with Maritime Agenda 2010-20, being in place, there is a lot of action plan happening on paper. However, if such actions are repeated more on ground with proper implementation, the future for ports will be bright. arindam.ghosh@infomedia18.in

JANUARY 2012 • SMART LOGISTICS • 51

Illustration By Sanjay Dalvi

STRATEGY LEAN GUIDING PRINCIPLES

The key to delivering long-term customer value and outstanding business performance, quarter after quarter, year after year, is to implement a lean culture. Lean practices improve quality and productivity by taking cost and waste out of all facets of an operation, from the procurement of raw materials to the shipment of finished goods. Developing a lean culture in a supply chain operation helps to add value for customers in every step of every process.

THE roots of lean thinking go back to the manufacturing innovations of Henry Ford in the early 20th century. On Ford’s auto assembly lines in Highland Park, Michigan, US, work flowed smoothly and consistently through a series of standardised processes, which allowed Ford to produce automobiles of consistently high quality, with great efficiency.

But lean manufacturing really got its start after World War II at Toyota Motor Company. Building on Ford’s concepts, Kiichiro Toyoda, Taiichi Ohno and others at the Japanese auto manufacturer developed the Toyota Production System (TPS). The system was based on two main principles. The first, ‘jikoda’ i.e. automation with a human touch, declared that whenever a problem occurred, operators would immediately stop work to correct it. That practice kept defects out of Toyota’s products. The second principle was ‘just-in-time’, which called for making only ‘what is needed, when it is needed, and in the amount needed’. Much of the TPS is aimed at eliminating ‘muda’, or waste, which reduces quality and limits profitability.

52 • SMART LOGISTICS • JANUARY 2012

The Toyota team identified seven kinds of waste. These include: • Overproduction: Manufacturing items before they are required • Waiting: Leaving goods in stasis before they are ready for the next process • Transporting: Excessive movement and handling to get goods from one process to the next • Inappropriate processing: Using equipment that is more sophisticated and expensive than needed • Unnecessary inventory: Holding goods that are not flowing through any process • Unnecessary or excess motion: Allowing bending, stretching, walking, etc. that is not strictly needed to do the job and can jeopardise workers’ health and safety • Defects: Allowing quality deficiencies that result in rework or scrap.

To combat waste, a lean organisation embraces the concept of kaizen, or continuous improvement. Rather than implement ambitious programmes to accomplish sweeping reforms a lean operation makes incremental improvements day after day. These

small changes add up to produce significant gains. Observing Toyota’s success with TPS, other Japanese firms started to adopt the approach during the oil crisis of the early 1970s. Eventually, interest spread to other countries.

Some US manufacturers, including Omark Industries, General Electric and Kawasaki, started using lean practices with good results in the 1980s.

COMPANIES GOING LEAN… Although lean thinking started in manufacturing plants, today companies use lean in their finance departments, customer service centres, supply chain operations, research & development organisations and many other areas.

Lean thinking also has made an impact on the public and not-forprofit sectors. Businesses that cultivate a lean culture report significant improvements in their operations.

For example, by implementing lean principles at a manufacturing plant in Matamoros, Mexico, Kemet Corporation cut logistics costs by 20 per cent, reduced crib inventory by 11 per cent and brought down customer complaints from .49 parts per million

in FY2005 to .32 parts per million in FY2007. It also increased productivity from 1.1 million pieces per person in FY2005 to 3.4 million pieces per person in FY2007.

Goodyear Tyre’s manufacturing plant in Lawton, Oklahoma, credits its lean culture with numerous improvements in safety, quality, delivery, cost and environmental impact.

To name just a few: the plant reported that its year-end OSHA incident rate was at least 33 per cent lower than the national average for tyre manufacturers for four straight years; it gained a perfect score two years in a row on the process and product quality audit; its direct ship warehouse produces more than $5 million in savings a year; and it has been sending zero waste to the landfill since January 2008.

Xerox Corporation has been applying lean in combination with another business strategy, Six Sigma, since 2002. Company officials say that over the past seven years, the two strategies have yielded a return on investment of more than 300 per cent.

In the supply chain arena, a lean culture offers tremendous rewards, but pursuing a lean strategy also requires a significant commitment. Luckily, becoming lean does not mean you have to re-engineer your operation.

You can work with a logistics partner to make continuous, incremental gains in quality and efficiency. The right 3PL can jumpstart a company’s transformation into a lean organisation.

By working with a supply chain partner that has woven lean principles into its very fabric, you gain the benefits of a lean culture without incurring the associated upfront costs. Your partner already has made the investments, hired the necessary talent and climbed the learning curve.

PEOPLE: THE KEY TO LEAN SUCCESS People involvement is the most important of the five lean guiding principles. Nothing happens in a company without people to drive it

5

lean guiding principles

• People Involvement: Engaging every employee to root out waste, eliminate problems and make improvements • Built-in Quality: Striving to prevent mistakes before they happen and engineering processes to make them ‘mistake proof’ • Standardisation: Documenting best practices and making sure that they are followed • Short Lead Time: Filling customer orders as promptly as possible • Continuous Improvement: Understanding that no matter how well a process works today, there is room to make it even better. forward. Employees must work as a single team, with everyone – right from the CEO to the newest hire on the loading dock – pulling in the same direction. Involving people in a lean culture means creating an atmosphere of mutual trust and respect. You have to cultivate an environment that is free of fear. People must know that they are valuable assets whose ideas are vital to the company’s success. They are welcome to point out problems and make suggestions for eliminating waste.

In fact, they are expected to. Employees must also understand that it is good to take risks, and that they should learn from their mistakes. For example, if a forklift driver suggests a better route for moving pallets from Point A to Point B, and that new route makes the driver five per cent more productive, the company should celebrate that success. If the driver tries the new route and discovers that it makes no real difference, the supervisor should praise the effort and urge the driver to use lessons gained in the experiment to try to find a better solution.

COURTESY AND COMMUNICATION To create a lean culture that embraces every employee, you need to start with

communication. And communication starts with courtesy. In a lean organisation, supervisors go out of their way to thank employees for their good work and smart suggestions.

Individuals in a lean culture also share their knowledge. If a supervisor notices that an employee is performing a task inefficiently, the supervisor takes the time to provide some coaching.

Supervisors also encourage employees to work in teams. Small groups of employees work together to solve problems and devise more efficient ways to perform their jobs.

In addition, supervisors make sure that their teams understand how their work contributes to the company’s success.

At the start of each shift, employees meet briefly to share information and news. For instance, warehouse workers might learn how many orders they will be picking that day, what time various orders need to be loaded, which orders are especially critical and how well the company is doing on its key performance indicators (KPIs). The company’s leadership also communicates its strategies to everyone in the organisation. It is important to explain a strategy in terms that make sense to all employees, so that everyone will buy into the concept and commit to making it succeed.

Another aspect of good communication is formal training.

New employees take a short course on how to recognise and eliminate specific kinds of workplace waste. They also learn to solve problems with the help of a short workbook designed for use on the warehouse floor. Any employee can use this booklet to step through a series of problem-solving techniques such as: a) Analysing the current situation b) Defining the problem c) Executing root cause analysis d) Defining countermeasures and selecting the measures to be used e) Creating the action plan f) Tracking the progress and sustaining the gains.

JANUARY 2012 • SMART LOGISTICS • 53

Lean guiding principles, continued

Characteristics Of Lean Employees • Persist when confronted with difficulties • Adapt, are proactive and thrive under uncertainty • Take personal initiative • Understand what is important at the moment and take appropriate action • Are deeply engaged with the organisation.

CHALLENGE THE STATUS QUO When a company provides problemsolving tools and encourages their use, it gains a huge competitive advantage.

Every employee becomes an efficiency expert, spotting opportunities to perform better, faster and at less expense. In a lean operation, employees who notice problems do not complain, they make suggestions. An individual might approach a supervisor with a better way to perform a task; the supervisor then helps the employee implement the solution. In other cases, employees from different parts of an operation might team up to troubleshoot. For example, a company’s own employees, employees of its 3PL and the company’s customers might join forces to conduct lean exercises aimed at improving specific warehouse processes.

EMPOWER THE EXPERTS People who perform a job are the best experts on how to do it. That does not mean that everyone does the job equally well. But by empowering the experts – the people who do the work – a company discovers thousands of opportunities to minimise costs and waste from the supply chain.

A company that empowers its employees flips its organisational chart upside down. Hourly workers are not expected to simply follow orders from supervisors and managers. Rather, those leaders are expected to give hourly

54 • SMART LOGISTICS • JANUARY 2012

workers the tools and encouragement they need to be effective in their jobs.

A lean organisation gives employees the power to make decisions about their work, while holding those employees accountable for the results.

When a lean organisation conducts a meeting, it is easy to figure out who the highest-ranking people in the room are. They are the quiet ones, the servant leaders who listen attentively while rank and file employees offer ideas and ask for support. A company that wants to promote a lean culture must make sure that the management team buys into the notion of servant leadership.

If managers are not prepared to serve their hourly employees, i.e., if they do not provide tools & encouragement and ignore their suggestions, an aspiring lean enterprise will fail.

THE POWER OF CROSS-TRAINING Employees trained to do multiple jobs are the Swiss Army knives of the supply chain. They are ready to take on different tasks as workloads shift, or when co-workers go on vacation.

Employees who continually learn new skills and move throughout jobs stay motivated and enthusiastic. More importantly, people who do several jobs understand how those jobs fit together.

An employee who has only put products away in a warehouse might not

understand the needs of the person who will eventually pick up items from that location. But a person who is trained to both pick items and put them away quickly learns how important it is to put the right product in the right place every time. A cross-trained employee is especially valuable in a lean operation.

A person who changes jobs brings a fresh perspective to the new task. That person is more likely to ask questions, notice steps that do not add value and make suggestions for improvement.

CELEBRATE SUCCESS While the ultimate goal in a lean culture is to increase value for customers, it is only natural for an employee to ask, “What’s in it for me?” Celebrating success is the way to motivate members of your lean team to keep doing their best. There are many ways to celebrate success. Simply thanking an employee for a great suggestion, especially in front of others, can be extremely effective.

So can material rewards. You might present cash or gift cards to employees whose suggestions boost performance or save money. You might pay by the piece instead of by the hour, so a team that discovers more efficient ways to work has a chance to earn more money.Sometimes, visible tokens of success provide strong motivation.

BENEFITS GALORE

Management Tips: Successful People Involvement • Communicate effectively • Encourage employees to spot problems and solve them • Value the expertise of people who do the day-to-day work • Provide tools the experts need to make improvements • Expand employees knowledge by training them in multiple jobs • Promote involvement by rewarding success

In a lean supply chain, people are the key component. Everyone must pull together to eliminate waste, reduce cost and provide greater value for customers. In a lean culture, the management communicates effectively, thereby encouraging employees to spot problems and solve them. A lean culture values the expertise of people who do the day-to-day work and provides the tools those experts need to make improvements. It expands the knowledge base by training employees in multiple jobs. Finally, it promotes involvement by rewarding success.

Courtesy: Ryder Supply Chain Solutions

4PLs IN INDIA STRATEGY

ESTABLISHING THE

END-TO-END CONNECT Illustration By Sanjay Dalvi

The fragmented structure of the Indian logistics market has further complicated the SCM process. Not so long ago, 3PLs were considered a major solution provider that would simplify this complexity and further turn the fortunes of the sector. However, this concept was only able to solve a part of the macro problem. With an aim to find a better solution, 4PLs, with their high knowledge base, strong analytical approach and specialisation in providing end-to-end solutions, have emerged as a crucial mechanism for the logistics sector in India.

ARINDAM GHOSH

PROVIDING unmatched quality of goods and services at the lowest possible cost while tackling cutthroat competition has become the mantra for any company to survive in India.

And in the logistics market, companies need to ensure that they have an efficient supply chain model to help them tide through the unpredictable market situations. It is here that the role of fourth-party logistics (4PL) service providers comes into play.

A 4PL service provider offers all the services that a company seeks to expand its presence in the industry.

Further, it tackles all the challenges to ensure that a comprehensive supply chain is in place to deliver the goods.

IMPORTANCE OF 4PLs In today’s times, supply chains have to be extremely agile and cost-efficient.

This places significant pressure on

the companies that seek to survive as well as grow in the market. With their expertise and analytical skills, 4PL service providers help companies or their service availers to redesign their supply chain strategy with a combination of all the best practices followed in the industry towards assuring better presence in the market.

In addition, a 4PL service provider ensures lower inventory costs and on time delivery to customers, thereby leading to higher levels of customer satisfaction. These factors have played a crucial role towards promoting the growth of 4PLs. Elaborating on the role of 4PLs and the services they offer, Arif A Siddiqui, Founder & Director, Coign Consulting, comments, “Fundamentally, a 4PL service provider’s role is that of an integrator. This means that 4PLs coordinate the entire supply chain, irrespective of whether it is inbound

or outbound, between various physical service providers. Depending on whether the supply chain is inbound or outbound, 4PLs design a complete delivery solution. Therefore, 4PLs would require to have an understanding of where the products are stored, what is the frequency of sale, where is the consumption centre and where are the bulk consumption centres.”

In a country, like India, where the supply chain is highly fragmented and the delivery is done by several agencies, 4PLs have a very essential and prominent role to play. In the current scenario, as a result of outsourcing the supply chain functions, companies end up dealing with multiple agencies.

Hence, in case of a blunder, agencies do not take the blame and point fingers at the other agencies involved.

Utilising the services of a 4PL takes care of the issues pertaining to responsibility and accountability as one

JANUARY 2012 • SMART LOGISTICS • 55

4PLs in India, continued

of their key roles is to ensure that they take total accountability of the endto-end supply. Thus, a 4PL service provider will ensure that the supply chain is more agile, Siddiqui opines.

4PL: A NOTCH ABOVE 3PL In today’s globalised economy, companies are gradually realising the importance of an efficient supply chain mechanism for all their products. The primary aim of third-party logistics (3PLs) service providers in India was to help companies outsource their entire ambit of logistics-related activities apart from ensuring that the company’s products get maximum presence across the country’s vast retail network. “Today, 90 per cent of 3PL companies only integrate two or maximum three services. One is warehousing, second is the value-added service within the warehouse and the third is the distribution services, which includes transportation, etc.,” Siddiqui explains.

However, not many 3PLs are able to integrate things like freight forwarding, customs clearance, warehousing, transportation, packing, keeping, sub assembly, invoicing, returns management or reverse logistics management, he says. “A 4PL, on the other hand, completely amalgamates all these services and offers them from a single source. It is supposed to be service & supplier exhaustive,” Siddiqui adds.

CHALLENGES FOR 4PLs India spends about 13-14 per cent of its total gross domestic product (GDP) on logistics. The huge diversity in geography and infrastructure conditions across the country make it a major challenge for Indian industries to efficiently manage their supply chain to reach across the country.

In India, some of the operations in the logistics sector, like the transportation service provider segment, are primarily dominated by various small and mid-sized companies and individual

56 • SMART LOGISTICS • JANUARY 2012

organisations. Another segment of logistics – service providers for the freight forwarding segment – is also represented by small customs brokers and clearing agents. Such fragmentation had led to big industries from various sectors to outsource individual logistics functions to different service providers while retaining the overall control of logistics thereby leading to high levels of administrative and infrastructurebased costs.

In the case of 4PLs, for each of their service availers, they study the entire date chain, analyse the entire distribution network, warehouse location, transportation and based on their study, they chart out the most

• • • •

of 4PLs • Single point contact ensuring hassle free operations and seamless information for the customer Value addition Cost savings Huge market and operational experience Strong analytical approach.

appropriate solutions.

Highlighting the major challenges for the 4PL industry in India, Siddiqui says, “4PLs need to develop their skill sets. They have to have a complete understanding of supply chain solutions and the ground reality of distribution. They cannot be a pure management company with only management experience. They need to have complete operational experience to manage the company’s supply chain functions properly.”

The next big challenge is to integrate all the information from various service providers and present it in a seamless format. Here, the technology challenge is large as various service providers use different information systems or different transaction

management systems. Then comes contracting, which involves the setting up of a robust contracting process or mechanism. Contracting allows for non-performing vendors to be replaced without wasting much time.

TREMENDOUS SCOPE According to a Frost and Sullivan report, “In 1996, Accenture first coined the term 4PL and defined it as a supply chain integrator that assembles & manages resources, capabilities, and technology of its own organisation with those of complementary service providers to deliver a comprehensive supply chain solution.”

“Despite being in its infancy, 4PLs have massive potential and will grow over the next few years. Having said that, there are significant challenges ahead. By recognising what is driving and restraining the market, companies can take full advantage of the strategic opportunities on offer,” the report adds.

Automotive, FMCGs along with electronics, chemicals & pharmaceuticals and retail sectors are expected to fuel the growth of 4PLs in the country, as logistics forms a major business area for them. Using this concept will play a key role in reducing their cost and further improving their operations.

4PLs have emerged as the ideal answer for companies belonging to a wide range of industries to have access through a single window across the entire supply chain.

In his concluding remarks, Siddqui says that the future of 4PL companies in India is highly dependent on their ability to exhibit, knowledge base, skill and competence to their service availers and their ability to integrate and show the solutions in a single platform, which will reduce the bar of cost incurred and further improve the service levels for their customers. arindam.ghosh@infomedia18.in

GUIDE TO INVENTORY ACCURACY TIPS & TRICKS

WAYS TO IMPROVE WAREHOUSE MANAGEMENT Inventory accuracy begins with an understanding of the conditions under which errors occur and ends with processes that are error resistant. Attaining inventory accuracy is thus, an ongoing process of continuous improvement. To achieve the same, organisations need to not only use technology intelligently, but also employ a well-trained and highly motivated workforce.

Implementing technologies such as radio frequency identification (RFID), barcoding systems, etc. are often considered solutions to inaccurate inventories. And if implemented properly, then these solutions could reduce errors to a great extent. However, none of these solutions will eliminate all errors, and a poorly implemented system can only worsen the situation. Practicing the following 10 steps will help you achieve higher levels of inventory accuracy.

PROCESS DEFINITION An organisation, which is unclear about how its processes are defined, will hamper the processes related to inventory.

Hence, when defining the processes, one should look to implement changes that would either reduce or preferably, eliminate 1 errors.

SETTING STANDARDS It is important to set minimum accuracy and production standards wherever feasible. While the set standards should be high, one needs to ensure that they are achievable.

Setting standards requires tracking of the accuracy and productivity of the 6 tasks being performed.

PROCEDURE DOCUMENTATION This should not only be restrained to inventory issues, but should also include aspects like quality, physical aspects and safety. The documentation should be clear & comprehensive and should be written for a specific task within a specific job 2 responsibility.

TRACKING ACCURACY Accuracy should be tracked at an organisational level as well as individual level. By simply tracking and communicating accuracy to employees, one will observe immediate reductions in errors even if standards are not set.

7

EMPLOYEE TRAINING In order to ascertain proper training to employees, organisations need to ensure that their employees are made to go through all the procedures so that they have a better understanding of all tasks.

3

ACCOUNTABILITY People must be held accountable for not following procedures. Not following procedures can mess up an organisation’s inventory. So, if someone is not following the procedures, appropriate disciplinary action must be taken against the 8 individual.

EMPLOYEE TESTING This is the best way to figure out if an employee has thoroughly understood the procedure to be performed. The test should include known past issues. For every incorrect answer, employees should not be reprimanded, rather they the issue should be discussed with the employee to make sure that the employee understands where he is going wrong.

4

CYCLICAL COUNTING In order to determine the accuracy, inventory needs to be counted. For this, one should count inventory on a continuous basis, i.e., cycle counting to maintain high levels of accuracy. This will also bring to the fore, the areas that need additional evaluation.

MONITORING PROCESSES It is important to immediately monitor processes to ensure compliance to the procedures. Actions which do not comply with the written procedures must be discussed on the spur of the moment with the concerned employees.

REEVALUATE Processes and procedures ought to be regularly reevaluated. The revisions should be implemented with the proper training and testing as is done during initial implementation.

5

9

10

Compiled by Kimberley D’Mello JANUARY 2012 • SMART LOGISTICS • 57

BOOK REVIEW THE CHOICE

Mirroring Real Life Experiences Often characterised as unconventional, and always stimulating, Dr Elihayu Goldratt exhorts his readers to examine and reassess their lives and business practices by cultivating a different perspective and a clear new vision. In his recent book, The Choice, Goldratt once again presents his thought provoking approach… this time through a conversation with his daughter Efrat, as he explains to her his fundamental system of beliefs.

THE Choice is a book written by the Elihayu Goldratt, the inventor of the Theory of Constraints.

WHY MUST YOU READ THIS BOOK? Goldratt approaches business challenges unlike anyone I have read!! It jumpstarts your brain.

I would recommend this book as a must read to all professionals (not necessarily only those involved in the supply chain).

The book is written in a storytelling manner and mirrors a real life business situation, which makes for realistic and hence, an interesting read. This book talks about solving business problems in a simplistic way and caters to entrepreneurs as well as other professionals.

The story is a discussion between a father (Goldratt) and his daughter (Efrat) and its underlying philosophy is embedded in 3 simple principles, which I find very powerful. These principles are: - Inherent simplicity of business: This simply means that problems that often seem complex, difficult and where ‘sophisticated’ solutions may be required, can be solved by applying the simple principles of ‘cause and effect’.

- There are no conflicts in life: All

58 • SMART LOGISTICS • JANUARY 2012

conflicts can be solved without a compromise. For example, a lot of supply chain professionals believe that ‘Increasing Inventory’ leads to ‘improved customer service’. The Choice debunks all such myths - People are inherently good: Most often ‘people’ become the cause of all problems leading us away from the real root cause. These problems then recur in many other forms. Goldratt enumerates that people may do the wrong things unintentionally for a variety of reasons.

It is those reasons that need to be put straight.

What I liked most about Goldratts books is the simplicity of the thinking and that one powerful word called ‘focus‘ or ‘leverage’ which means ‘not everything that can be improved needs to be Improved’; focus on the lever that gives you the biggest bang for the buck.

Most of us believe that if the solution is simple, it is not the right solution; whereas Goldratt believes in the Einstein Philosophy – “if you can’t explain it simply, you don’t understand it well enough!”

Happy Reading!

Ashu Khanna

ABOUT THE AUTHOR Eliyahu Moshe Goldratt was an Israeli physicist who became a business management guru. He was the originator of the Optimised Production Technology, the Theory of Constraints (TOC), the Thinking Processes, Drum-Buffer-Rope, Critical Chain Project Management (CCPM) and other TOC derived tools.

He authored several business novels and non-fiction works, mainly on the application of the theory of constraints to various manufacturing, engineering and other business processes.

ABOUT THE REVIEWER

Ashu Khanna is the founder of VALYOU CONSULTANTS. He is a Procurement and Supply Chain Domain Specialist with over 20 years of Indian and international experience at Cadbury and Marico.

His experience encompasses strategic sourcing, e-sourcing, commodity sourcing strategies to optimise cost, supply chain optimisation to deliver customer service and leading organisation wide cross functional projects. He is also a trained Oliver Wight S&OP specialist. He can be reached at ashukh76@gmail.com.

PRODUCT UPDATE

M Manufacturer E Exporter D Dealer I Importer 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

Mobile storage systems

Hydraulic lifting platforms

M

M

Su-Mech Storage Systems offers mobile storage systems (compactors) that are assisted mobile systems, which give users movement for the easiest access to stored materials of any other mechanical systems made. The remarkable ease of movement is due to their rugged and durable performance engineering. Comfort and ease of use are enhanced by ergonomically designed, soft-touch, three spoke rotating handles. Other handle designs are optional to fit with any décor.

A safety lock that has a bright, visual indicator showing lock status prevents unwanted movement. The mobile storage systems can save up to 60 per cent of floor space compared with conventional static shelving or increase storage capacity by almost 100 per cent. The systems glide on steel track and consist of mobile base units onto which different shelving options can be assembled.

Truck-mounted hydraulic lifting platforms from Vanjax Scales are available with scissor-type lifting mechanism.

Loads are evenly balanced on the table.

Strong steel base and upper frames are free from torsion. Scissors arms are self-guided on rollers with ball or taper roller bearings. Hydraulic cylinders can be actuated by manual pumps or power racks with either AC or DC supply.

Hydraulics is designed for continuous operation. Lifting and lowering can be done at a constant speed.

These are easiest to move in the industry, regardless of carriage weight/length, because these offer widest range of drive ratios.

These lifting platforms are ideal for lifting loads to the required height levels on the machines, ramps, storage racks, etc.

Su-Mech Storage Systems Pvt Ltd Pune - Maharashtra Tel: 020-67263800 Email: sumechindia@vsnl.net Website: www.su-mech.co.in

Vanjax Sales Pvt Ltd Chennai - Tamil Nadu Tel: 044-42821000, Mob: 09789976611 Email: info@vanjax.com Website:www.vanjax.in

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Product update, continued

Hydraulic cranes

Cargo storage services

MEI

D

Truck-mounted hydraulic cranes (model Hydra-825) offered

by TIL have superstructure frames fabricated from high tensile 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 single double acting hydraulic ram mounted on a large diameter bushes.

Slew system includes hydraulic motor driving pinion through a double reduction gear unit. Slew brakes are spring applied, hydraulically released multiplate brakes. Hoist system includes hydraulic motor driving grooved hoist barrel via reduction gear unit. Hoist brakes are spring applied, hydraulic released multiplate brakes. Telescoping system has single double acting ram, with lacing chain mechanism that provides proportional telescoping of boom section with single lever control.

Shalimar Warehousing Corporation offers services in storage and handling operations. Some of the features of the services offered by Shalimar Warehousing Corporation include: providing customers warehouse as per specifications & size in the required area of operations; providing with material handling equipment, like forklifts, Hydras for loading/unloading & proper stacking of materials to be handled, etc.

Other features are: managing the incoming & outgoing cargoes as per the DO issued by principals with professionally well-trained staff with complete knowledge of SAP operating system; daily reporting to the principal offices of the daily operations details as per the formats through fax, emails, etc; providing 24-hours security staff; providing adequate computer systems, printers, fax machines, office space with furniture for the smooth operations; and providing required telephone lines for the same.

Lever operating controls are provided for slew, telescoping, hoisting and derricking with independent or simultaneous operation of crane motors.

These services are provided for storage and handling operations.

Shalimar Warehousing Corporation Mumbai - Maharashtra Tel: 022-2879333, Mob: 09924355999 Email: info@shalimarwarehousing.in Website: www.shalimarwarehousing.in

Til Ltd Kolkata - West Bengal Tel: 033-025531352 Email: tilkmt@tilindia.com Website: www.tilindia.com

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MM

YY

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60 • SMART LOGISTICS • JANUARY 2012

M Manufacturer E Exporter D Dealer I Importer Mini pallet trucks

Shopfloor trolleys

M

ME

Agromec manufactures and offers mini pallet trucks (model AGPL250) that have all the features of standard hydraulic handlift pallet trucks. These pallet trucks have shorter forks of 600 mm to 900 mm length and shorter widths of 450 mm.

Their turning circle is considerably reduced so that they can take a U-turn in narrow space.

The mini pallet trucks are specially meant for large godowns where vacant space is very narrow. They are available in 1, 2 and 2.5 ton capacities. Also offered are hydraulic transformer lifting trolleys, hydraulic (big wheel) pallet trucks, hydraulic machine handlift pallet trucks, and paper reel handlift pallet trucks.

Alkon Plastics offers shopfloor trolleys that can be used single-sided or double-sided as per requirement.

These trolleys comprise of base unit with aluminium chequered top plate fitted with castors and a frame on which two louvre panels of size LP2 can be fitted on each side. Robust construction, epoxy powder coated, easy assembly, push-pull handle on both sides, etc, are some of the features of the trolleys.

Single sided trolleys can hold 8 SB1 bins, 16 SB3 bins, 5 SB4 bins and extra bins on the bottom tabletop or different size of bins as per requirements.

The overall dimension of the trolleys is 970 mm (L) x 600 mm (B) x 1100 mm (H).

The mini pallet trucks have been specially designed to suit narrow aisles, where available space is a constraint.

These trolleys are ideal for component storage and transfer to assembly or production areas.

Agromec Meerut - Uttar Pradesh Tel: 0121-2440660, Mob: 09313159058 Email: agromec@vsnl.com Website:www.agromecindia.net

Alkon Plastics Pvt Ltd Mumbai - Maharashtra Tel: 022-26042168, Mob: 09324144060 Email: sales@alkonplastics.com Website:www.alkonplastics.com

Mezzanine flooring systems

Warehousing storage facilities

MEI

D

Pilco Storage Systems offers steel mezzanine flooring systems. These include unique mezzanine flooring, mezzanine floors, mezzanine flooring systems and steel mezzanine floors.

Salient features are: design flexibility, easy assembly, clear spans to 25’, standard load capacities to 250 PSF, quality engineered, etc. The modular interlocking system, quick to install with its clip together components provides an efficient means of achieving additional storage space or office accommodation.

Flexibility in design permits quick dismantling and re-erecting in new locations or indeed extension of existing structures. The company provides a full range of accessories so that the flooring systems can be adapted to suit users’ specific needs. Also offered is a wide span mezzanine floors for 100 per cent doubling of floor space. These flooring systems are quick, easy and costeffective.

Super India Packers & Movers provide spacious warehousing storage facility for products that are in transit phase. The company takes full responsibility of keeping customers’ goods safe in its worldclass warehouse until they are delivered to the desired destination.

The warehouse facility is well-planned by experts as per international standards so that ensure safety of the goods from natural calamities or any other accident.

The mezzanine flooring systems can be used for storing goods, having office, for light assembly lines, modular floorings, etc.

Pilco Storage Systems Pvt Ltd New Delhi Tel: 011-27110026, Mob: 09810074698 Email: pilcomarketing@hotmail.com Website:www.pilcoonline.com

The warehousing storage facility is spacious, with latest design, and wellequipped with material handling equipment.

Super India Packers & Movers New Delhi Tel: 011-26783319, Mob: 09873009451 Email: jiaggarwal@yahoo.in Website:www.superindiapackers.com

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

JANUARY 2012 • SMART LOGISTICS • 61

EVENT LIST TRADE SHOW TRACKER

NATIONAL

ABROAD

1-3 FEBRUARY 2012

6-7 FEBRUARY 2012

9-10 FEBRUARY 2012

AIR CARGO INDIA 2012 Focus: Logistics & air cargo market Where: Bombay Exhibition Centre, Mumbai Tel: (91+22) 2757 0550/2757 5055 E-mail: events@stattimes.com/aci@ stattimes.com Web: www.stattimes.com/aci2012

MILITARY LOGISTICS INDIA 2012 Focus: Defence supply chain Where: Manekshaw Centre, Delhi Cantonment, New Delhi Tel: +44 (0)1753 727011 E-mail: jb@shephard.co.uk

5TH INTERMODAL ASIA 2012 Focus: Container port and terminal operations Where: Intercontinental Melbourne The Rialto, Australia Tel: +60 87 426 022; Fax: +60 87 426 223 E-mail: enquiries@transportevents.com

NATIONAL

ABROAD

14-18 MARCH 2012

13-15 MARCH 2012

29-30 MARCH 2012

INDIA AVIATION 2012 Focus: Aviation industry Where: Begumpet Airport, Hyderabad Tel: 011 32910417 Fax: 011 23359734 E-mail: indiaaviation@ficci.com

TOC CONTAINER SUPPLY CHAIN ASIA 2012 Focus: Shipping and container cargo Where: Hong Kong Convention and Exhibition Centre (HKCEC) Tel: +852 2582 8888 E-mail: info@hkcec.com Web: www.hkcec.com.hk

6TH INDIAN OCEAN PORTS & LOGISTICS Focus: Ports & logistics Where: Le Meridien, Mauritius Tel: +60 87 426 022 Fax: +60 87 426 223 E-mail: enquiries@transportevents.com

NATIONAL

ABROAD

12-14 APRIL 2012

26-28 APRIL 2012

26-27 APRIL 2012

AERODROME INDIA 2012 Focus: Airport infrastructure, operations, security & connectivity Where: Bombay Exhibition Centre (BEC), Mumbai Tel: 80-25547169 Fax: 80-25542258

INDIA MATERIAL HANDLING & LOGISTICS SHOW 2012 Focus: Material handling solutions Where: India Expo Centre, Greater Noida Tel: 9999164925 E-mail: mayank@manchcommunications.com Web: www.indiawarehousingshow.com

7TH SOUTHERN ASIA PORTS, LOGISTICS & SHIPPING 2012 Focus: Container ports and terminal operations Where: Cinnamon Grand Colombo, Sri Lanka Tel: +60 87 426 022 Fax: +60 87 426 223 E-mail: enquiries@transportevents.com

62 • SMART LOGISTICS • JANUARY 2012

ABROAD 6-9 MAY 2012

18 MAY 2012

23-24 MAY 2012

WERC ATLANTA 2012 Focus: Logistics Where: Atlanta Marriott Marquis, Atlanta, Georgia Tel: 281.746.0449 E-mail: cpilbeam@werc.org

5TH GLOBAL LOGISTICS & SCM SUMMIT Focus: SCM Where: UAE Tel: +971 4 3318855 Mob: +971 50 7453002 E-mail: admin@sclgme.org

LOGICHEM Focus: Petrochem logistics Where: Grosvenor House Hotel, Dubai Tel: +44 (0)20 7368 9354 E-mail: paulo.godinho@wbr.co.uk

NATIONAL

ABROAD

1-2 JUNE 2012

3-5 JUNE 2012

26-28 JUNE 2012

CSCMP INDIA 2012 CONFERENCE Focus: Creative Approaches to Supply Chain Profitability: A Global Perspective from India Where: Mumbai Mobile : +91 - 9819669521 E-mail: nbasu@cscmp.org

THE LOGISTICS & SUPPLY CHAIN FORUM Focus: Logistics & SCM Where: Doral Resort & Spa, Miami, FL Tele: +1 212 651 8700 E-mail: logisticsus@richmondevents.com

LOGICHEM ASIA Focus: Chemical logistics & SCM Where: Singapore Tele: + 65 6408 9205 Fax: + 65 6822 7370 E-mail: anna.ju@wbresearch.com

NATIONAL

ABROAD

26-28 SEPTEMBER 2012

17-19 SEPTEMBER 2012

18-21 OCTOBER 2012

INTERMODAL INDIA 2012 Focus: Logistics & SCM Where: Bombay Exhibition Center, Mumbai Direct No: +91-22-66122612 Mobile : +91-9987038330 E-mail : bipin.sinha@ubm.com

WORLD LOW COST AIRLINES CONGRESS 2012 Focus: Air transportation Where: Sofitel London Heathrow, London, UK Tel: +44 (0)20 7092 1000 Fax: +44 (0)20 7242 1508 E-mail: enquiry.uk@terrapinn.com

SCM LOGISTICS WORLD 2012 Focus: Logistics & SCM Where: Singapore Tele: +65 6322 2771 Fax: +65 6223 3554 E-mail: yaling.ng@terrapinn.com

There are no events scheduled in the month of July & August.

JANUARY 2012 • SMART LOGISTICS • 63

PRODUCT & ADVERTISERS’ INDEX

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

Products

Pg No

Asia Manufacturing Supply Chain Summit ................................4

Mezzanine flooring systems .......................................................61

Cable trays..................................................................................17

Mini pallet trucks.......................................................................61

Cargo storage services ................................................................60

Mobile storage systems ..............................................................59

Chassis carriers ........................................................................FIC

Poly pallets .................................................................................17

EngineeringExpo exhibitions .......................................................8

Racks ..........................................................................................17

Exhibitions ...........................................................................4, 6, 8

Shopfloor trolleys .......................................................................61

Heavy-duty racks .......................................................................17

Slotted angle racks .....................................................................17

Hydraulic cranes .........................................................................60

Supermarket racks ......................................................................17

Hydraulic lifting platforms ........................................................59

Trailers & truck bodies ...........................................................FIC

India CSCO Congress exhibition................................................6

Vehicle tracking solutions ..........................................................45

Logistics services ..........................................................................7

Warehousing storage facilities ....................................................61

Pg No

Advertiser

Tel. No.

E-Mail

Website

Alpha Analytics Services Pvt Ltd

+91-20-40056742

info@alphageomatics.com

www.alphageomatics.com

8, BIC Engineering Expo

+91-9819552270

engexpo@infomedia18.in

www.engg-expo.com

4

Kamikaze B2B Media

+91-9833226990

aboli@kamikaze.co.in

www.asiamscsummit.com

17

Pilco Storage Systems Pvt Ltd

+91-11-27121705

sales@pilcoonline.com

www.pilcoonline.com

7, BC

Safexpress Private Limited

+1800-113-113

suyash.srivastava@safexpress.com

www.safexpress.com

FIC

Seamless Autotech Pvt Ltd

+91-2135-662431

info@seamlessautotech.com

www.seamlessautotech.com

6

Supply Chain Leadership Council

+91-9819519284

gautami@sclc.in

www.sclc.in/csco

45

Our consistent advertisers

COC = Cover-on-Cover, FIC = Front Inside Cover, BIC = Back Inside Cover, BC = Back Cover

64 • SMART LOGISTICS • JANUARY 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 Asia Manufacturing Supply Chain Summit

Mezzanine flooring systems

Cable trays

Mini pallet trucks

Cargo storage services

Mobile storage systems

Chassis carriers

Poly pallets

EngineeringExpo exhibitions

Racks

Exhibitions

Shopfloor trolleys

Heavy-duty racks

Slotted angle racks

Hydraulic cranes

Supermarket racks

Hydraulic lifting platforms

Trailers & truck bodies

India CSCO Congress exhibition

Vehicle tracking solutions

Logistics services

Warehousing storage facilities

First Fold Here

Second Fold Here ADVERTISERS’ INQUIRY FORM Safexpress Private Limited

Engineering Expo

Seamless Autotech Pvt Ltd

Kamikaze B2B Media

Supply Chain Leadership Council

Alpha Analytics Services Pvt Ltd

Pilco Storage Systems Pvt Ltd

Third Fold Here

GLUE

Please complete the following & get a quick effective response from suppliers:

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3. Your line of business 4. Specific product requirement Name: Designation: Company Name:

City:

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01 / 2012

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