Smart Logistics - January 2013 by Infomedia18

VIEWPOINT

VIVA LA CONSUMERISM! RETAIL therapy has got a whole new meaning for the supply chain and logistics players with the much-awaited nod from the government to increase FDI in retail—51% in multi-brand retail and 100% in single-brand retail. While for the SCM value chain, it is time to get into real action, for the common man, it means that there will be more malls and for the more informed, it means that India could soon have the likes of Tesco, IKEA, Wal-Mart, Best Buy, Starbucks, Carrefour, etc., setting shop in India. Viva la consumerism! While consumers are busy preparing themselves to get pampered by the multiple international brands vying for their attention, we, the movers and shakers, in our entirety, from the strongest to the weakest link of the supply chain value chain, have to transform ourselves from being Feeble to being Able! It is true that the column space, web space and mind space have been optimally over utilised (and saturated) on how FDI in retail will impact the logistics and supply chain sector and how we must get ready to stack, store, move and deliver differently, as per the internationally acceptable norms. We, at Smart Logistics, have taken upon ourselves to equip and enable the Indian logisticians to ride over this tide of opportunities. Amid a lot of cheer over this opening up of our market, an analysis of how the early movers such as Brazil, Indonesia, Malaysia and China, which relaxed FDI norms in the 1990s, have been able to improve the share of organised retail reveals that the Indian story stands delayed, especially given that the size of the retail market here is one of the largest. Having said that, FDI in multi-brand retail will have a significant impact on the economy as well as the Indian logistics sector. It will be an important step in increasing access to consumers and will set pace for the second wave of economic reforms, which will attract foreign capital, thereby strengthening the growth of Indian economy. Logistics and supply chain companies are also expected to grow as they will be the link between small manufacturers, producers & farmers and the organised retail chains, and thereby help them get higher returns for their supplies. This close integration with the organised retail chains will also help small-time producers in gaining access to the latest technologies, systems and processes, thus enabling them to maximise their profits. The deepest impact of more supermarkets shall be on retail procurement systems. This de-fragmentises, integrates and centralises the procurement system over the country. Increased levels of centralisation may also occur in the procurement decision-making process, and in the physical produce distribution. Centralisation increases the efficiency of procurement by reducing coordination and other transaction costs, although it may increase transport costs by extra movement of products. The next, and economically logical, step is Internationalisation to set up regional distribution centres to allow coordinated procurement over few countries. A logical further extension is insertion into global procurement networks. More supermarkets shall mean a shift from reliance on traditional wholesale to use of non-traditional—specialised/dedicated—wholesalers and logistics firms. If consumer is the king, logisticians are the kingmakers!

Archana Tiwari-Nayudu archana.nayudu@network18publishing.com

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CONTENTS

JANUARY 2013

TIPS & TRICKS

IN CONVERSATION WITH ‘DFC Has Created Enough Opportunities For Various Foreign Investors In India’

VOL. 03, NO. 10

Supply Chain Drivers 5 Supply Chain Resolutions For The New Year

RK Gupta, MD, Dedicated Freight Corridor Corporation Of India Limited (DFCCIL)

EVENT REPORTS SPECIAL FOCUS: FDI IN RETAIL FDI In Retail Is The Indian Logistics Sector Up For The Challenge?

Cold Chain For Fast Food Retail Generating Better Business Economics

Retail Woes Needed: Timely Attention

Retailing Challenges & FDI Opportunities In Disguise?

FDI In Retail Strategies It’s Time To Take The Dip Stick Test

LSPs In Retail Cashing In On The FDI Opportunity

Engineering Expo Ludhiana

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FMCG Supply Chain Flexibility Unravelling Packaging And Distribution Efﬁciency Opportunities

Exploring A Horizon Of Opportunities

Panel Discussion: Ludhiana Is Punjab Ready To Reclaim Its Manufacturing Might?

Engineering Expo Indore 2013 Tapping India’s Central Vantage Point

Engineering Expo Aurangabad 2013 Leveraging Market Trends, Expanding Opportunities

Retail Supply Chain Summit 2012 Retail Gets In Sync With Supply Chain

ALSO IN THIS ISSUE VIEWPOINT NEWS, VIEWS & ANALYSIS

Latest Happenings In The World Of Logistics

NEWS ANALYSIS Inland Waterways: Empowering India’s Coal Imports

Change Management In Procurement Outsourcing Creating Value Through Improvement In Efﬁciency

AUTOMATION TRENDS Voice Technology The 10 Keys To Voice Technology Deployment Success In Distribution Centres

TECHNOLOGY & INNOVATIONS Cutting-edge Solutions

SCM TRENDS

50 52 53 55 57

PRICE TRENDS EVENT CALENDAR TENDERS PRODUCT UPDATE PRODUCT & ADVERTISERS’ INDEX PRODUCT & ADVERTISERS’ INQUIRY FORM

15 17 49 58 59 64 65

Cover Illustration: Sanjay Dalvi

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INDIA’S TIES WITH THE UAE GROW DEEPER ABU Dhabi and India are entering a new era of trade with the completion of Kizad—the industrial zone of tomorrow. Spread over 418 sqkm of land with world-class infrastructure, easy access to global markets, low-cost utilities, 100% ownership opportunities and a tax-free environment, Abu Dhabi is enticing foreign direct investment from India and the rest of the world with the establishment of Kizad, the Khalifa Industrial Zone Abu Dhabi. From the outset, Kizad has been a cornerstone of Abu Dhabi Vision 2030—the Abu Dhabi Government’s plan to diversify the economy and to reduce dependence on revenues from the prolific oil and gas sector. Kizad alone will contribute up to 15% of Abu Dhabi’s non-oil GDP and provide over 100,000 jobs by 2030. This commitment to diversification makes Kizad, a centrally located gateway to over two billion people within four time zones, the destination of choice for Indian investors with an eye on expanding into the lucrative Middle Eastern markets. Indian investors are being lured by a world-class transportation infrastructure that is constantly establishing better links with the region. The multi-modal network includes multi-lane highways, airports and the recently inaugurated Khalifa Port. By 2016, Etihad rail will connect the industrial zone to the Gulf

and beyond via high speed rail. In addition to easy access to regional markets, Kizad’s investors will benefit from clustering; the zone’s plan to encourage productivity by grouping companies in similar industries. By clustering aluminium; steel; engineering metal; food; paper, print & packaging; trade and logistics; mixed use and other industries of importance to India’s industrial leaders, Kizad will facilitate supply chains and enable investors to maximise their profits. Given the long commercial history between the two countries, Kizad views South Asia’s economic powerhouse as its main target market. “Due to India’s many industrial leaders, India is one of Kizad’s primary markets, said Khaled Salmeen, CEO & MD, Kizad. “Our first visit to India in 2011 and our subsequent trips have allowed us to meet India’s business leaders and offer them tax and other advantages not seen before.” Salmeen added, “With the advantages offered by a project that is central to the Abu Dhabi Government’s plan to diversify the local economy away from oil & gas, Indian investments are perfectly positioned to flourish in a new and exciting market. Kizad is rolling out the red carpet for direct investment from India, and, in doing so, it is ensuring a long and fruitful relationship with the Subcontinent in years to come.”

ABG SHIPYARD BAGS `485 CRORE ORDER FROM THE MINISTRY OF DEFENCE ABG Shipyard Ltd, the country’s largest private shipbuilding company, has bagged a repeat order from the Ministry of Defence for building an additional cadet training vessel for the Indian Navy. This prestigious contract is worth about `485 crore. The vessel will be approximately 110 metre in length with the capacity to carry a light helicopter. Designed to achieve a maximum speed of 20 knots, the vessel will be used to provide basic training to the Naval Cadets and

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trainees in activities such as disaster relief, search and rescue operations. Till date, ABG Shipyard has delivered more than 160 vessels worldwide. Commenting on the order, Dhanajay Datar, Whole-Time Director & CFO, ABG Group, said, “This repeat order reinforces the Ministry of Defence’s confidence in us. We are honoured that the government has recognised our shipbuilding skills and given us the chance to serve the country once again.”

INDOSPACE INAUGURATES WORLD-CLASS INDUSTRIAL AND LOGISTICS PARK AT CHAKAN INDOSPACE Chakan, the first in a series of modern industrial and logistics parks, being developed across India, has commenced operations at Chakan, near Pune. The total project cost is approximately `400 crore. Spread across 100 acre, the integrated industrial park houses modern warehouses and light manufacturing facilities designed to meet the logistics and supply chain needs of global companies. The park is being launched in multiple phases and phase 1 consists of over 400,000 sqft of built-up space which is operational. On completion of all phases, IndoSpace Chakan will have a total built-up area of 1.7 million sqft spread across 8 buildings. The park will be managed by Realterm Everstone Development Management, a pioneer in modern logistics spaces across India. Brian Oravec, Managing Partner, Realterm Everstone Development Management, said, “All IndoSpace parks are designed for efficient, costeffective supply-chain operations, which enables IndoSpace tenants to optimise their operations. With a total of 15 million sqft of modern industrial real estate facilities currently under development across five cities, IndoSpace is the largest industrial real estate developer in India and offers clients the opportunity to work with a single developer pan-India.” Chakan is among India’s fastest growing industrial locations and is home to major manufacturing units, including Volkswagen, Hyundai, L’Oreal, Daimler, Mahindra & Mahindra and Bajaj Auto. IndoSpace tenants include global companies with large scale distribution and light manufacturing requirements.

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DAMCO UNVEILS MISSING LINK TO SUPPLY CHAINS IN recognition of the need for supply chain managers to cut costs and secure a constant high degree of delivery performance, Damco now offers improved capabilities to optimise the entire end-to-end supply chain from a cost, delivery time, capacity and carbon perspective. Damco’s global team of 50 supply chain developers has done more than 200 projects, so far, during 2012. Based on new technology, Damco will provide customers with a stronger foundation for making decisions about ‘How much inventory is needed to meet the desired service levels? Where should inventory be kept (at origin, in transit, at destination)? How many warehouses/DCs are needed and where to locate same? When to phase in/phase out warehouse capacity say during the next five years? Which transportation mode, container and truck type is optimal from a cost, service and carbon perspective for the inbound as well as the outbound supply chain? “A more quick, thorough and holistic approach to supply chain design and optimisation is key to operate in a world of constant change,” commented Erling Johns Nielsen, Global Head – Supply Chain Development, Damco. “You can have the best supply chain concept in the world. However, without being able to adapt to change while having access to experienced supply chain professionals located close to your supplier and customer base, who can implement and execute the change on a daily basis, you will not reap the full benefits,” said Nielsen.

Earlier in the year, Damco launched the revolutionary Damco Dynamic Flow ControlTM, which tackles the hassle of dealing with constant changes on the demand and supply side without adding cost, time and complexity. The new optimisation tool is the strategy part of Damco Dynamic Flow ControlTM.

USP With a new network optimisation tool, Damco now further enhances its end-to-end supply chain management platform to provide the utmost in cost savings to customers, while decreasing carbon emissions and enhancing overall supply chain design. A prerequisite for supply chain excellence is that you can evaluate supply chain performance, simulate your different options very quickly while understanding implications to cost, service levels, lead time and capacity and translate your findings into specific actions on a day-to-day level. “New tools combined with Damco Dynamic Flow ControlTM ensure that it takes much less time to simulate the impact of the change, design new business rules and subsequently roll out the solution across all stakeholders involved in the supply chain. This is really a missing link in many supply chains,” he concluded.

RAILWAYS CARRIED 647 MT FREIGHT IN APRIL–NOVEMBER 2012 PERIOD RAILWAYS carried 647.11 million tonne (MT) of freight traffic during April–November 2012, according to Railway Ministry data. The freight carried shows an increase of 29.06 MT over the freight traffic of 618.05 MT carried during the corresponding period last year, registering an increase

of 4.70%. Railways carried 81.75 MT of goods in November this year. There is an increase of 0.62 MT over the freight traffic of 81.13 MT carried by the Railways during the same period last year, thereby indicating an increase of 0.76%.

SCI TAKES DELIVERY OF KAMSARMAX BULK CARRIER SHIPPING Corporation of India (SCI) Ltd has recently accepted the delivery of a Kamsarmax Bulk carrier, mv ‘Vishva Jyoti’. The vessel is the first of a series of four Kamsarmax bulk carriers ordered by SCI with Jiangsu Eastern Heavy Industries Co Ltd, China. Orders for these vessels were placed in September 2010. The remaining three vessels would be delivered to SCI during 2013 in a phased manner. Informatively, during the second half of 2012, SCI had accepted the delivery of 4 Panamax bulk carriers from STX Shipyard in China. SCI had been predominantly operating smallersized Handymax and Handysize bulk carriers in the past. With the delivery of these larger Panamax/ Kamsarmax bulk carriers having higher cargo carrying capacity, SCI would be increasing its exposure in India’s import and export of dry bulk cargoes. The vessels are suited for worldwide trading and can be alternatively deployed in cross trades depending on the opportunities available. mv ‘Vishva Jyoti’ has a gross tonnage of 44,864 tonne and deadweight of 81,894 tonne. The vessel is dually classed with BV and IRS and has been built to comply with the latest and most stringent international regulations. India is one of the growth drivers for the world economy recording impressive GDP growth compared to the developed economies. Industrial and infrastructural development plays a major role to sustain this growth. As a national carrier, SCI has been aiming to increase its presence in India’s ever increasing dry bulk trade and strengthening the bulk carrier fleet would help SCI contribute to this growth.

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CARGO VOLUMES OF MAJOR PORTS DIP 2.8% ON SLOWING TRADE CARGO volumes at India’s dozen state-owned major ports fell by more than 2.8% between April and November as global trade slowed and increasing number of private minor terminals ate into the market. The 12 ports handled a combined 359.9 million tonne of cargo as against 370.6 MT handled in the year-ago period, data released by the Indian Port Association (IPA) showed. These ports are located at Kolkata, Paradip, Visakhapatnam, Ennore, Chennai, Tuticorin, Cochin, New Mangalore, Mormugao, Kandla, Mumbai and Jawaharlal Nehru Port Trust (JNPT). Experts say that the volume of India’s external trade handled by these ports has fallen to less than 60% from more than 75% until a few years ago. “The minor ports have been attracting major portion of the cargo at a time when the global

economy has slowed down,” said Shailesh Garg, Director, Londonbased consultants Drewry Shipping. “The minor ports, which are more efficient, have become a threat to the major ports,” Garg added. Container cargo at JNPT—the country’s largest container port by volumes—declined 1.76% from a year ago to 42 mt, according to IPA data. However, the country’s only corporate port at Ennore posted a growth of 20% during the period largely due to an increase in the shipment of coal, both thermal and coking. Ennore is the only port that was built as a corporate entity as compared to the other ports that are still run as trusts. The sharpest fall in cargo was at Mormugao in Goa where traffic fell by more than 40% because of the ban initiated on iron ore handling by Goa State Pollution Control Board.

HD GUJRATI APPOINTED AS DIRECTOR (OPERATIONS & BD) IN DFCCIL HD Gujrati has assumed charge as Director – Operations & Business Development, Dedicated Freight Corridor Corporation of India (DFCCIL). Before taking over the charge in DFCCIL, he was working as Executive Director – Traffic, Railway Board, Ministry of Railways. A Post Graduate in Physics and an MBA in Finance & Marketing, he joined Indian Railway Traffic Service in the 1985 batch. He has also worked as Executive Director – Freight Marketing and Director – Traffic, Director – Safety in Railway Board, Group General Manager – Strategic Planning, International Marketing and Operations in Container Corporation of India Ltd. He has vast experience in rail transportation including freight operation, multimodal logistics, traffic planning, strategic planning and use of information technology in rail transportation.

HYDERABAD AIRPORT RECOGNISED AS BEST CARGO AIRPORT HYDERABAD’S Rajiv Gandhi International Airport (RGIA) has won the Best Cargo Airport and the Best Cargo Terminal of the Year awards from the Air Cargo Agents’ Association of India (ACAAI), according to reports. Vikram Jaisinghani, CEO, GMR Hyderabad International Airport, the airport operator, said it was an honour to be recognised by customers

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and stakeholders. “The award further motivates us to achieve many more milestones towards our vision of transforming RGIA into a logistics hub of India,” he stressed. A new upgraded cargo apron was recently opened and can now accommodate greater numbers of Code-F and heavier cargo aircraft and also reduce ground time spent on freighters, it is learnt.

‘INDIA AIMS TO HAVE 5% GLOBAL MARKET SHARE IN SHIPBUILDING’ INDIA aims to have 5% global market share in shipbuilding by 2020, Shipping Minister GK Vasan recently told the Lok Sabha. Replying to supplementaries, Vasan said that the government has mooted plans to develop ancillary units for the shipbuilding sector, which has the potential to create 2.5 million jobs. He said that the government has taken various initiatives for upgrading its infrastructure in ports, which include expeditious implementation of various capacity addition and mechanisation project. The initiatives include private sector participation in capacity augmentation/upgradation for which bid documents have been standardised, and 100% FDI being allowed under the automatic route, he said. Vasan said that income tax incentives were also available for investments made in port infrastructure. “Similarly, in order to augment the Indian tonnage in the shipping sector, the government has taken initiatives such as introduction of tonnage tax scheme and policy of cargo support to Indian flag ships in respect of governmentowned/controlled cargoes,” the minister stated. Vasan said that the shipping countries, which are in service sector, were allowed to avail foreign currency loans in the form of External Commercial Borrowings and Foreign Currency Convertible Bonds under the automatic route from their equity holders up to 200 million dollars. He informed that the proposals beyond $200 million were considered under the approval route.

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SWISS WORLDCARGO FIRST CARRIER TO JOIN PROOF OF CONCEPT FOR IATA’S MULTILATERAL E-AIR WAYBILL AGREEMENT SWISS WorldCargo has underlined its commitment to paperless cargo by joining the Proof of Concept for IATA’s ‘Multilateral e-Air Waybill Agreement’ initiative. The cargo division of Swiss is the first carrier worldwide to sign up for this Proof of Concept, which marks a significant milestone within the e-commerce framework promoted by the Global Air Cargo Advisory Group (GACAG). The model agreement for Electronic Data Interchange (EDI) as a substitute for the traditional paper air waybill is proposed to become ‘multilateral’: The objective is to have the bilateral EDI agreements between the forwarders and the carriers replaced by a single multi-lateral agreement. The concept is that forwarders entering into the agreement with IATA effectively enter into agreements with all participating carriers who have

appointed IATA as their agent to enter into the agreements with the forwarders on their behalf. The Multilateral e-Air Waybill Agreement is a crucial development within the e-Air Waybill framework, introduced by IATA with the acknowledgement of FIATA, the International Federation of Freight Forwarders Associations and GACAG, to enable airlines, shippers and freight forwarders to experience the benefits of a paperless environment. “The new agreement will allow forwarders and airlines to get away from the painstaking process of company-to-company and location-tolocation agreements which have slowed the adoption of e-commerce until now,” commented Christine Barden, Head–Transportation Processes and responsible for the e-Air Waybill project at Swiss WorldCargo.

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DREDGING CORPORATION TO INDUCT FOUR MORE DREDGERS DREDGING Corporation of India (DCI) would take steps to add four more dredgers to its fleet and postacquisition, the PSU would be able to take up at least 80% of the maintenance dredging works of ports across the country, Shipping Minister GK Vasan informed during a conference. Dedicating to the nation DCI Dredge XIX, a trailer suction hopper dredger, at Ennore Port, he said that two more such dredgers would be joining the Mini Ratna PSU in the next financial year. DCI was also taking action for placing orders for two 9000 cum Trailer Suction Hopper Dredgers during the 12th Plan period, Vasan said. At present, DCI dredgers were engaged at Kolkata Port, Paradip Port and Cochin Port and recently, Kandla Port has also awarded its maintenance dredging works to DCI, he said.

Invites You To India’s Largest

SME Gathering

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APL LOGISTICS & VASCOR FORM AUTOMOTIVE LOGISTICS JOINT VENTURE IN INDIA APL Logistics and VASCOR have recently announced the formation of a joint venture to better serve the growing and increasingly sophisticated supply chain needs of the automotive sector in India. The Delhi-based joint venture—named APL Logistics VASCOR Automotive—draws on the supply chain expertise and auto sector experience of two of the industry’s most respected brands. APL Logistics is a leader in international supply chain services with extensive experience serving the automotive sector in both developed and emerging markets. In India, APL Logistics’ international expertise is complemented by its strong intermodal rail capability through IndiaLinxSM, which operates reliable, dedicated container train services to Northern India’s hinterland. VASCOR is a leading automotive third-party logistics (3PL) with deep experience in inbound-to-

manufacturing, outbound finished vehicle, and value-added services throughout the US, Canada and Mexico. It has market-leading expertise in finished vehicle logistics. “This collaboration between APL Logistics and VASCOR marks the first international 3PL to be dedicated exclusively to India’s auto sector, and underscores India’s growing importance as a major global automotive manufacturer,” said Bill Villalon, VP – Automotive, and Chairman, APL Logistics of the joint venture. “APL Logistics VASCOR Automotive will seek to raise the bar for automotive logistics in India by developing and offering innovative solutions that meet the increasingly sophisticated requirements of Original Equipment Manufacturers (OEMs) and tyre suppliers,” said Bill Garrett, President & CEO, VASCOR Ltd, and CEO of the joint venture.

The joint venture has appointed Umesh Bhanot as Chief Operating Officer. In close consultation with OEMs, APL Logistics VASCOR Automotive has developed a rail wagon with a unique design that can accommodate a wide range of automobiles, including the fast-growing SUVs. The complete door-to-door service will include collection of finished cars from OEM plants, vehicle loading and unloading at terminals, and long-distance rail haulage, and last mile delivery. Using these newly designed wagons, the joint venture plans to introduce AutoLinxSM, an innovative rail-based solution for more reliable, damage-free and cost-efficient distribution of finished vehicles and motorcycles across the country. Trial runs of AutoLinxSM rail-based wagons will begin in early 2013 with full-scale operations slated to begin mid-2013 following regulatory approvals.

225+ participants | 12,000+ business visitors expected 7,000+ products on display | Business transactions worth ` 55 crore expected | Spread over 5500 sq mtr | Showcasing more than 28 diverse industry categories.

Exhibitor Profile

IN DO R E

11 - 14 January 2013

Labhganga Convention Centre 10 am - 7 pm

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MOL (ASIA) ANNOUNCES SENIOR APPOINTMENT & PROMOTION IN ITS WEST ASIA REGION MOL (Asia) Ltd has recently announced a senior appointment and promotion in its West Asia Region, effective January 1, 2013. Vivek Kale, currently Deputy MD and Country Director, MOL India, will be promoted to the position of Regional Director, MOL West Asia Region and the position of MD, MOL India. He will succeed Kazuya Gakuto, GM – Administration and Accounting Group – Liner Division, MOL. Kale will be based in Mumbai and will report directly to Michael Goh, Chairman & MD, MOL Asia. As Regional Director for MOL West Asia Region, he will oversee MOL’s business and operations in the Indian Subcontinent, the Middle East, East Africa and Indian Ocean Islands. He will concurrently be the Country Director for MOL India. All other Country Directors in the West Asia Region will report to him. Kale is a veteran with more than three decades of experience in shipping. He started his shipping career in 1976 with a leading shipping agency house

in India and thereafter, held various management positions in some of the leading shipping companies in India. Having joined MOL India in 2002 as GM – Sales, he was concurrently the Head, Western India District, MOL. He contributed significantly in expanding MOL into other Indian cities and organising sales, customer service and documentation processes. In 2005, he was promoted to Deputy MD and in 2009 as Country Director. Commenting on this announcement, Goh said, “To be a true global player and operator, MOL believes its workforce should have people with international orientation, outlook and background to maintain and expand our business. We are happy to see the recent appointments and promotions of a new generation of local national staffs to key positions in our Asian regions/countries.” Goh added, “Vivek brings to us his broad and diverse experience and business knowledge and will significantly contribute to our operations and business growth in West Asia.”

NEW EU RULE MAY IMPAIR US PHARMA INGREDIENT EXPORTS A new rule could hurt India’s $1 billion worth of Active Pharmaceutical Ingredients (APIs) exports to the European Union (EU)—the second largest market after the US. APIs are used in manufacturing drugs. The rule was brought in as a stringent step to avert ‘counterfeit’ imports, sources said. As per the rule, from July next year, each and every consignment of Indian-made APIs shipped to the EU would be checked thoroughly by a local competent authority and certified that the product complies with the European current good manufacturing practices standards. Some of India’s leading API exporters have objected to the rule,

terming it as ‘negative publicity’, and said more regulations would lead to delays in approvals. India exports $13.8 billion worth of drug formulations, APIs and Ayush (ayurvedic and herbal) products every year, of which APIs alone comprise 40%. Most API exports are to the US (27%), followed by the EU (19%), Africa (17%), West Asia (7%), Asean and Latin America (6% each) and the CIS countries (5%). According to industry estimates, the country’s exports to the US were growing at a rate of 33% every year, despite intense competition from China, which exports four times as much as India to the EU.

L O G I S T I C S

DANFOSS INDIA AWARDS EMINENT PEOPLE FROM THE COLD CHAIN INDUSTRY DANFOSS Industries Pvt Ltd, a global leader in the refrigeration and air-conditioning recently recognised contributions of individuals from all aspects of the cold chain industry and awarded their outstanding contribution at the Indian Cold Chain Expo (ICE Expo) Awards at New Delhi. DANFOSS ICE award is constituted in partnership with Global Cold Chain Alliance (GCCA) India who is actively involved in promoting the cold chain industry in India. The panel encompassed leading consultants and officials from government bodies and industry associations, among others. The award categories included every aspect of the cold chain industry. The function was attended by over 200 cold chain industry professionals. “The ICE awards are an integral part of recognising true prowess in the cold chain industry. Danfoss is pleased to be associated with this prestigious platform. We congratulate all the winners. We look forward tofuture endeavours with Global Cold Chain Alliance (GCCA) India,” said Noel Ryan, President, Danfoss Industries Pvt Ltd. Danfoss ICE awards were presented to Pawanexh Kohli, Principal Advisor, CrossTree Techno-visors; Ramesh Parashuram Paranjpey – Fellow Life Member, ASHRAE; Rajesh Agarwal, CEO, Crystal Group; Jang Bahadur Singh Sangha, MD, Sangha Seeds, Mahendra Swarup, President, Federation of Cold Storage Associations of India; Sucha Singh, MD, International Coil Ltd; Amit Srivastava, DGM – Northern Region, Kirloskar Pneumatic Co Ltd.

JANUARY 2013 • SMART LOGISTICS • 13

NEWS ANALYSIS INLAND WATERWAYS

Empowering India’s Coal Imports The importance of coal in the Indian power sector can be easily gauged by the statement that coal-based generation accounts for nearly 60% of the country’s installed capacity—a trend which is expected to continue over the next few years. It is projected that during 2016–17, the requirement for coal to meet the targeted generation would be 842 MT. Under such a scenario, boosting inland water transportation would come as a boon for sustaining higher imports of coal. This would facilitate the movement of coal to various power stations across the country and thus ensure better scope for power generation. ARINDAM GHOSH

TODAY, India is among the world’s fastest growing economies. To support this growth momentum, it is imperative that the country has adequate supply of energy. As on March 31, 2012, the country’s installed capacity was 1,99,877 MW with coal being the dominant source of fuel. While coal has an installed capacity of 54.7%, it has a share of 70% in generation. Gauging from the current trends, coal will continue to remain the dominant source for the next 30–35 years unless there is some huge technological breakthrough in alternative sources of fuels. India’s thermal coal import figures had reached 62 MT in 2010 and the country is expected to become the second largest coal consumer after China by 2025. This scenario has opened up huge opportunities for an inland waterways transportation mechanism. Importing coal through inland waterways can help ensure better movement of coal across various parts of the country. Elaborating further, Tarun Agarwal, Associate, i-maritime Consultancy Pvt Ltd, says, “It will relieve the road and rail transport systems. More importantly, it will trigger the development of inland water transport systems. And if the power equipment segment does well in inland waterways, it will trigger overall development of inland waterways.”

FIRMS USING INLAND WATERWAYS Public sector power companies have played a dominant role in exploiting the opportunities for coal movement through inland waterways. In 2011,

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ENGINEERING APPLICATIONS According to Inland Waterways Authority of India (IWAI), some of the major advantages of inland waterways include: Energy efficiency: 1 HP can move approximately 150 kg on road, 500 kg by rail & 4,000 kg by IWT Fuel efficiency: 1 litre of fuel can move 24 tonne km by road, 85 tonne km by rail and 105 tonne km by IWT High single unit carrying capacity: 1 Barge=15 rail wagons=60 trucks Environment friendly: Low air & noise pollution Preferred mode for movement of ODC cargo: Most efficient, reliable and least capital intensive NTPC had signed an agreement with IWAI and Jindal ITF—the infrastructure arm of Jindal SAW—for the transportation of coal to its 2,100MW power plant located at Farakka, West Bengal, through inland waterways. “The climate for private investment is being developed by getting public sector business commitments from NTPC, ONGC, etc.,” says Agarwal. Another significant activity was the transportation of project cargo by inland waterways (through Bangladesh) for ONGC’s Palatana power plant in Tripura, which materialised after Ashuganj was declared a new Port of Call under the Indo-Bangladesh Protocol on inland water transit trade.

various steps to develop Inland Water Transport (IWT), which includes aids for day & night navigation, fixed/ floating terminals at specified locations for berthing and loading/unloading of vessels & intermodal connectivity at select locations. Besides these, the Central Government also provides 100% grants-in-aid to the states in the North-Eastern Region for the development of IWT. Further, on the policy front, to improve investments, a committee has been constituted to scale up private investment in the inland waterways sector under the Secretary, Planning Commission. The Secretary, Ministry of Shipping, DG of IWAI and a representative of Department of Economic Affairs will be its members. This committee would undertake a systematic effort to identify new areas for private investment, both in infrastructure and in transportation. It will also assess the investment potential of the sector and come up with approaches and proposals for scaling up private investment in inland waterways. Besides, it will identify multiple business models, which could then be bid out through concessions. In spite of so many initiatives taken to develop the sector, “it will develop gradually because the business and economic environment in the next few years is expected to be moderately positive. It is an area where a player can demonstrate leadership skills and take the industry by surprise,” concludes Agarwal.

OPPORTUNITIES GALORE The government has been taking

arindam.ghosh@network18publishing.com

CUTTING-EDGE SOLUTIONS TECHNOLOGY & INNOVATIONS

SeeChange Lite Mobile Shipment Tracking Offers Reliable Access To Shipment Information APL Logistics has recently announced the launch of SeeChange Lite, a streamlined mobile version of its web-based shipment tracking tool, SeeChange®. “SeeChange Lite is a step towards enhancing our suite of value-added services to meet complex, international logistics challenges. This new technology tool addresses the increasingly mobile needs of our customers who require instant and reliable access to shipment information to manage their supply chains,” said May Chew, VP – Technology, APL Logistics. In addition to using SeeChange Lite to monitor their shipment and any activity on their purchase orders, customers can access route information as well as retrieve shipment, equipment and booking summaries. SeeChange Lite offers an additional unique feature that enhances shipment visibility

for customers—the ability to update shipment status and location from a mobile device. The mobile application

USPs • SeeChange Lite provides customers secure and convenient shipment tracking capability. The mobile application can be used on Apple, Android and Blackberry mobile and handheld devices. • SeeChange Lite is a free, downloadable application available from the Apple Store, Google play and App World. is currently optimised for iOS5, with a version for iOS6 to be made available soon.

New Software To Help Shippers Reduce Transportation Costs GE Transportation Optimization Solutions has recently introduced, ShipperConnect Rail Fleet Optimization, a new software solution designed to help rail shippers reduce transportation costs. According to the company, the software will allow bulk shippers to create optimal rail shipment plans, reduce the time needed to evaluate shipment variables and tradeoffs, and manage the balance between private as well as railroadowned equipment. Kirk Knauff, SVP – Marketing & Services, GE Transportation Optimization Solutions, said, “The ability to create an optimal rail shipment plan helps shippers manage a wide range of shipment variables and drive bottom-line savings through better fleet decisions.”

Invites You To India’s Largest

SME Gathering On Engineering &

Manufacturing

JANUARY 2013 • SMART LOGISTICS • 15

Cutting-edge solutions, continued

New Visibility Solution Alerts Shippers To Delays Earlier CARGOSMART Limited, a leading Software as a Service (SaaS) global shipping & logistics solutions provider, recently announced VisibilitySmart, a new visibility solution that alerts shippers and logistics service providers earlier about cargo delays. It helps shippers improve their operations with daily, early notifications of potential delays and measure their carriers’ on-time performance and delay reasons with monthly scorecards. VisibilitySmart fosters collaboration by equipping shippers with timely information about cargo delays that they can act on with their carriers to improve service and meet delivery schedules. CargoSmart has found that on an average, 95% shipment arrive on time, while 5% gets delayed, which can have costly consequences. Terminal congestion, labour strikes, weather problems or lack of space on a vessel can all cause cargo delays, which can

USPs • VisibilitySmart enables shippers to improve collaboration with ocean carriers to meet delivery schedules. • It monitors and analyses live vessel data through the Automated Identiﬁcation System (AIS), sailing schedules, historical route patterns, and shipment plans to anticipate delays. It offers extensive coverage of 21 carriers, 3,500 vessels, and 800 ports. • The new solution monitors three types of delays: skipped ports of call, missed transshipments, and late arrivals. • The system provides a daily e-mail with shipment delay summaries to support operations. It also provides a monthly scorecard to measure carriers’ on-time performance and delay reasons to support contract negotiations. disrupt supply chain plans. Late cargo can mean chargebacks if merchandise does not arrive by a sale date, factory shutdowns if parts are not available or even spoiled goods if the cargo is delayed too long. Graham Collins, Director – Sales & Services, CargoSmart, said,

“CargoSmart’s early notifications of delays help shippers identify shipment that need urgent attention during transit. VisibilitySmart allows shippers begin working with their carriers as soon as potential delays are detected, giving them with more time to adjust their downstream operations.”

250+ participants | 20,000+ business visitors expected 7,250+ products on display | Business transactions worth ` 80 crore expected | Spread over 15000 sq mtr | Showcasing more than 30 diverse industry categories.

Exhibitor Profile

AU RANG ABAD 1 - 4 February 2013 Ayodhya Nagari Ground 10 am - 7 pm

16 • SMART LOGISTICS • JANUARY 2013

PRICE TRENDS IRFI Trend for December 2012

The RFI stood at 177 points in the month of December 2012, which is 2 points higher in comparison to the corresponding period last year.

ZONAL FREIGHT TRENDS The overall freight rates have decreased by 0.10% as compared to last month. The freight rates from Chennai registered the highest increase of 1.21% in comparison to last month due to improved cargo availability, whereas the freight rates from Kolkata registered the highest decrease of 2.43% in comparison to the last month due to less availability of cargo.

INDEX TREND FOR 5 YEARS: TRENDS FOR DECEMBER (Y-o-Y) 180 178 177

176

175

174 172 172

170

171

168 166 2008-09

2009-2010

2010-2011

2011-2012

2012-2013

COMMERCIAL VEHICLES DOMESTIC SALES: The overall Commercial Vehicles (CVs) segment registered a growth of 2.73% in April–November 2012 as compared to the corresponding period last year. While Medium & Heavy Commercial Vehicles (M&HCVs) registered a negative growth at -16.34%, Light Commercial Vehicles (LCVs, below 7.5 tonne) grew at 16.98%.

FORECAST FOR JANUARY 2013: The RFI in January 2012 was the same in comparison to January 2011. The freight rates in January 2013 are expected to remain firm because of improved industrial output and the approaching financial year end of many companies.

Indian Road Freight Index (IRFI), a service introduced by Transport Corporation of India (TCI), is an index of weighted average lorry freight rates across various routes, calculated based on the route density and the dynamic freight rates of routes across the country. Knowledge Partner: Transport Corporation of India (TCI); website: www.tcil.com; e-mail: irfi@tcil.com

SMART LOGISTICS

APRIL 2010

JANUARY 2013 • SMART LOGISTICS • 17

IN CONVERSATION WITH RK GUPTA

IMPORTANCE OF DFC FOR FREIGHT MOVEMENT To ensure sustained growth of the economy, growth in the transportation sector ought to be about 1.25 times the growth of the economy. Indian Railways has been consistently adding to its transport capacity, but the requirement for transportation and logistics has increased at a much higher pace. While there has been rapid growth in terms of volume of freight traffic carried especially in the last 10 years, the rail share in freight transportation has reduced from 90% to the present 30%. A report published in the New York Times in June 2010 titled ‘Clogged Rail Line Slow India’s Development’ elaborates on the same issue. On the Indian Railways route meant for running mixed traffic, the freight traffic always gets lower priority as compared to the freight. This fairly sums up the criticality of infrastructure

projects like Dedicated Freight Corridor (DFC) for the growth of the Indian logistics sector and the economy. Additionally, projects like DFC shall provide separate dedicated freight lines to move freight at a higher speed, which, in turn, will create additional capacity for freight movement apart from improving the asset utilisation.

CURRENT SCM & LOGISTICS SCENARIO The growth of container traffic in the transportation sector has been the

CREDENTIALS Currently serving as MD, Dedicated Freight Corridor Corporation of India Limited (DFCCIL), RK Gupta has taken up a number of challenging projects throughout his career. Prior to joining this position in May 2011, he was heading the prestigious New Line Rail Project in Jammu & Kashmir as Chief Administrative Ofﬁcer, one of the most difﬁcult projects in terms of logistics and terrain in the world, as a majority of the alignment passes through tunnels and very high and long bridges. He has also been associated with various Expert Groups including UN-sponsored Expert Group on improvement in ‘Project Management’ on Indian Railways and the UK-sponsored project on ‘Strategies for Bridge Rehabilitation’ on Indian Railways.

DFC has created enough opportunities for various foreign investors in India “The implementation of this project shall be a game changer that will provide faster movement of freight trafﬁc on dedicated lines,” explains RK Gupta, MD, Dedicated Freight Corridor Corporation of India Limited (DFCCIL). During an interaction with Arindam Ghosh, this distinguished engineer shares his thoughts on a range of issues related to the Dedicated Freight Corridor ranging from the importance of the project for the logistics sector of the country, challenges, beneﬁts and the opportunities the project is going to create. Excerpts…

18 • SMART LOGISTICS • JANUARY DECEMBER2013 2012

highest in the last 10 years—a fact well reflected in the continuous increase of Indian Railways’ container traffic. The Western DFC will not only connect all the major ports in Western India to the hinterland but will also enhance the movement of container traffic with a potential of trains running at 100 kmph. This corridor has been planned to satiate the needs of the running of double stack containers and is expected to meet the growing demands of container traffic upon completion.

CHANGES ENVISAGED We are aware of the major technological developments taking place in Railways all over the world and will ensure that we are flexible enough to incorporate new technologies in the project. All the contracts of DFC shall be design and build contracts. Additionally, the adoption of new and alternative technology shall be possible to reduce the overall life cycle cost of the project and bring in more efficiency in the maintenance and operation of the infrastructure. Also, during construction, mechanised constructions shall be used to ensure timely completion and quality of the project. Mechanised maintenance along with predictive and preventive maintenance tools shall be used for efficient and effective maintenance and operations of the infrastructure.

MAJOR BENEFITS The DFC project aims to boost the Indian economy’s present growth trends as well as to improve the environment in terms of logistics and transportation. This project would accelerate nationwide economic development, which, in turn, would widen the scope for employment opportunities in the region as well as bring about expansion and improvement of the market for farmers in the region. The DFC Project will also ensure that less energy will be used for the transportation of goods. It is expected that greenhouse gas emissions will reduce by 477 million tonne carbon dioxide over a period of 30 years according to a study conducted by Ernst & Young.

CHALLENGES FACED All infrastructure projects in the country involving large land acquisitions are facing hurdles from land owners. In spite of the prevailing scenario, DFC has been able to acquire more than 80% of the total land requirement, i.e., more than 10,000 acre, with sustained support from PMO and active cooperation of all the state governments. While

there are a few pockets of resistance in certain localities, we are confident of achieving our objectives in a planned and time-bound manner. We are in the process of seeking environment and forest clearances in those areas wherein the DFC alignment is passing through.

CURRENT PROGRESS OF DFC The loan agreements for funding of the Bhaupur-Khurja section of Eastern Corridor with the World Bank and Rewari and Vadodara section of Western Corridor with JICA have already been signed. Procurement for civil structures and track works has been initiated and contracts will be in place during the current financial year. The timeline for the completion of both the corridors is March 2017. Under phased commissioning, the 66-km double line Mughalsarai-Sonnagar section on the Eastern Corridor shall be commissioned by December 2013.

UP CLOSE & PERSONAL

ROLE OF JAPAN

Leadership mantra I believe, as part of the leadership qualities, one should not consider anybody less important than the other. Everybody has got some capability and it is up to the leader to identify his/her potential and exploit it to the organisation’s advantage. It is also critical for the leader to understand that it is because of the some merit, that the individual is part of the organisation. Further, if a candidate is not meeting the expectation level of the organisation, it is the duty of the leader to guide & advise him and also afford an opportunity to him to come to the opportunity level and excel.

Japan has played a vital role in terms of offering financial assistance to the project. The entire Western Corridor from Dadri to JNPT via RewariAhmedabad has been funded by Japan with a total funding of 679 billion yen. A loan agreement has already been signed for 405 billion yen for funding the Rewari-Vadodara section (Phase1 of the Western Corridor), while the loan agreement for Vadodara-JNPT & Rewari-Dadri section (Phase-II of the Western Corridor) for funding of 274 billion yen is expected by this year.

Project closest to heart I think DFC is definitely a project which is closest to my heart. No project earlier in Indian Railways or even in the world under infrastructure sector has been taken up on such a scale and size. The implementation of this project shall be a ‘game changer’ that will provide faster movement of freight traffic on dedicated lines. Further, it will create space for the movement of additional passenger traffic and will also provide opportunities for focussed attention on improving the passenger services on Indian Railways.

LOT OF OPPORTUNITIES DFC has created enough opportunities for various foreign investors in India in areas like management consultancy, supply of railway equipment and other goods, steel, etc. Encouragement to investors can also be given through a model similar to Delhi Mumbai Industrial Corridor Development Corporation wherein the opportunities created through development of freight corridor can be used for

the development of infrastructure conducive for the development of various industries in the region. However, there is a need for initiatives to be taken for funding of these projects as these are infrastructure projects which are not only cost intentive but also have a long gestation period. arindam.ghosh@network18publishing.com

JANUARY 2013 • SMART LOGISTICS • 19

SPECIAL FOCUS FDI IN RETAIL

Is The Indian Logistics Sector Up For

The Challenge?

Since the last few months, the buzzword in the Indian business environment has certainly been ‘Foreign Direct Investment in Multi-brand Retail’. It is always a demanding tas to justify with the pros and cons of the said strategic move task by th the Government of India. On one side, it is the need of the hour to demonstrate India’s capability to the world by attracting bus foreign business, while on the other, it is essential to protect the local t politics and existing players. Nevertheless, India Inc is sentiments of the looking forward to FDI in retail, hoping that it would contribute to the business’ growth. In the post-liberalisation economy, FDI ﬂow in any growth-oriented industry/sector is becoming imperative and careful operating dimensions are being established across all industries. Here’s offering a 360-degree view of FDI in retail combining all the views expressed by multiple stakeholders. FOREIGN and reputed retailers are closely monitoring the Indian market and consumers to launch their business in India through the multi-brand outlet model. The process—triggered by the Central Government in 2006 — allows single brand retail. According to this process, a retail store is permitted to sell only one foreign brand. For instance, Nike can sell its products through Nike stores and not in any other brand outlet. According to a study by AT Kearney, the Indian retail business enjoys the second position in the Global Retail Development Index (GRDI) exercise for 30 developing economies. Additionally, other research studies reveal that the Indian retail industry is expected to grow at a rate of 14% by 2013. Moreover, AT Kearney’s Retail Confidence Index places India at par with other growing economies such as China and Brazil.

According to the proposal, stringent conditions such as 50% of FDI fund should go into the back end supply chain infrastructure development including warehousing, cold storage, logistics network, manufacturing, etc., were imposed. The proposal also extended the norm of sourcing 30% of their needs from Indian domestic SMEs. These SMEs should fulfill the norm of having the business less than US$1 million at any given point of time. This move would help win the confidence of local retail players as well as Indian supplier SMEs who believe that the entry of FDI would disturb the SMEs’ business ecosystem. However, it has been reported that many foreign retailers are pressurising the Indian Government to eliminate this condition as they do not see India as a potential sourcing hub in terms of supply chain effectiveness.

OBSTACLES ALONG THE WAY THE FDI MOVE The government moved the FDI in multi-brand proposal in late 2012.

20 • SMART LOGISTICS • JANUARY 2013

Till date, the regulatory framework with respect to retail business remains unclear and leaves many questions

unanswered. For instance, the eligibility clause of enterprise under the SME sector (for sourcing exercise) should be clearly articulated by the related framework from the government. It does not include land cost in the proposed 50% investments (which is the highest component in the back end infrastructure establishment costs) to be clarified by the government. Also, it does not give clear guidelines for foreign investors on the investment roadmaps, i.e., whether to allow one time or phased timings in multi-brand retail financing. The above points could be some of the ‘noted obstacles’ for bigger players to see India as a favourable investment destination.

SIGNALLING POSITIVITIES The new retail investment at the back end chains will have some tangible effects on the supply chain operations. These include: Contain the inflation rate With FDI investments flowing in, it can only be hoped that it would

help contain the inflation rate and increase the availability of goods at the requested place. Supply chain would become customer focussed Further, the supply chain will become more customer focussed. This, in turn, will prove to be a great learning curve for Indian players considering that they have been exhibiting only a cost/profitcentric approach. Besides, Indian players would get exposure to global best practices to achieve enhanced supply chain efficiency. In a nutshell, it would lead to professionalism as the industry is on the growth track to accept world-class tools and techniques to be used/customised in the Indian system. Growth opportunities for tier I and tier II service providers Several tier I and tier II service providers would avail of growth opportunities when FDI is in full swing. This, in turn, would increase the service quality owing to open competition in the market. Velocity of supply chain would improve dramatically The velocity of the supply chain would also improve dramatically due to visibility across the supply chain— this is one aspect we need to learn and imbibe from foreign players. This, in turn, would pave the way for cold chain infrastructure and other IT systems to be in the right place for improving the performance of the chain. Opportunities to tap rural business Also, retail companies hope to earn an opportunity to tap the rural business in an extensive way supported by employment generation. According to a Technopak report, retail FDI will create additional nine million jobs in its journey of GDP growth of US$3310 bn in 2021. It also endorses growth in organised retailing to 20% by 2021 from the existing 7% in 2012.

NONETHELESS, THE DILEMMA CONTINUES… Even after signalling so many positive

signs, there will be confused and mixed reactions and viewpoints from farmers on allowing foreign players to go in for direct sourcing, thereby eliminating middleman from the supply chain. There are several assurances from global players to our farmers. But it is too early to talk about the cost benefit ratio of that move. Further, there are studies indicating that the country would get the greater benefit from the tax paying capability of organised/foreign retail players, which currently is not at the appreciable level by the local kirana stores. Ironically, we are looking at it as a cannibalising activity rather than as an improvement task to raise our standards. With FDI in place, the standards set in the supply chain delivery process would always be high.

FDI, IN OUR FAVOUR? Prima facie, FDI in retail seems to be only in favour of investment in metro cities. But are our Indian supply

AT Kearney’s Retail Conﬁdence Index places India at par with other growing economies such as China and Brazil. chain professionals ready to face the challenge and compete with the benchmarked standards expected by foreign players? Would FDI always ensure a positive result? It is a fact that we are yet to see the whole picture, but we need to be optimistic. The sector itself does not enjoy industry stature and so, the problems need to be researched in a multi-faceted manner. The main threat raised by the players is unbalanced competition between foreign players and Indian domestic players, which eventually would affect the local ones. However, analysts have a different take on this. Indians are more comfortable doing business with next-door kirana stores, rather than driving to the outskirts of the city during weekends—a

prominent trend in the West. Therefore, kiranas will coexist—only the standard of product delivery and price will always raise questions. The end consumers would get the benefit of fine-tuned price and best delivery, but these need to be validated as foreign players may start dictating the terms to Indian consumers, without even understanding the market dynamics. This, in turn, would make the investment climate collapse. Hence, strict policies on fund repatriation steps for foreign players ought to be established by the government to protect Indian conditions.

WHAT THE FUTURE BEHOLDS? With India poised to support e-retailing in a bigger way, the entry of foreign players in that segment is also foreseeable. It is high time that a proper retail policy is established, which would deter and act on the obstacles in the supply chain systems. India is passing through a transition phase. Hence, it is mandatory to launch a retail policy through the Ministry of Commerce to make the supply chain and distribution system more effective. Additionally, the government should also take proactive measures to stop any activity in the name of foreign retail, which supports dumping of goods from the cheaper source. There is need to ensure that there is discipline in terms of appreciating local sources. This can be an imperative element in the retail policy framework. By ensuring the same, the Indian supply chain industry will undergo a transformation in FDI retail environment without compromising on the local touch. VG Venkatesh is a faculty at Symbiosis Institute of Operations Management, Nashik under Symbiosis International University, Pune. He specialises in SCM and Logistics. He is a chartered member with Chartered Institute of Logistics and Transport (CILT) and APICS (USA). Email: vgv1976@gmail.com

JANUARY 2013 • SMART LOGISTICS • 21

Generating Better

Business Economics

Image Courtesy: Swisslog

SPECIAL FOCUS COLD CHAIN FOR FAST FOOD RETAIL

Today, the market for quick service restaurants in India is worth US$13 billion and cold chain has played an important role in furthering its growth in India. It is the cold chain, which extends the freshness of perishable products served at these food joints. According to industry analysts, integrated cold chains and supply chain management can save `80,000 crore annually and even lower the wastage of perishable horticulture produce while ensuring additional export revenue of over `25,000 crore. ARINDAM GHOSH

INDIA’S rising purchasing power, hectic schedules and the changing lifestyle aspirations of the youth have developed a new culture in terms of appetite—the Indian fast food culture. And gauging from the current trends, this fast food culture is here to stay. This scenario has come as a huge boon for companies like McDonald’s, Papa John’s and KFC, who have established Quick Service Restaurants (QSRs) and exploited the opportunities to grow and expand in the country. The final food products prepared at these QSRs have a short life span—a fact which brings to the fore the important role of cold chains, which are critical to ensure the longevity of these food products. Commenting on the importance of cold chains, Vishal Sharma, VP – Operations, Radhakrishna Foodland Pvt Ltd, explains that cold chain assumes importance as it is critical for extending the shelf life of products, which are primarily perishable in nature, thereby generating higher value. To this, Vipin Jain, Deputy GM, Indo Arya Central Transport Ltd, adds, “Cold chain is a logistics system that provides a series of facilities for maintaining ideal storage conditions for temperature-sensitive

22 • SMART LOGISTICS • JANUARY 2013

materials from the point of origin to the point of consumption in the food supply chain. The chain needs to start from the farm level and cover up to the consumer level. Given adequate attention for consumer services, a well-organised chain reduces spoilage, retains the quality of harvested products and guarantees cost-efficient delivery to the consumer.”

PRACTICES FOLLOWED BY COMPANIES According to industry analysts, integrated cold chains and Supply Chain Management (SCM) can save `80,000 crore annually. Further, it will not only lower the wastage of perishable horticulture produce, but will also ensure additional export revenue of over `25,000 crore. Highlighting infrastructure as a major challenge for the expansion of the cold chain segment in India, Sharma says that in the country, majority of the cold storages are designed in an archaic manner and have been primarily developed for the storage of potatoes. Complementing his views, Jain elaborates, “In India, cold storage still follows conventional and traditional practices. As a result, 80–85% of storage used only for potato

can occupy only 40% of the storage capacity.” Role of cold chain in McDonald’s SCM From July 1993, much before McDonald’s started its operations in India; sincere efforts were made by Radhakrishna Foodland to carefully understand McDonald’s operations and requirements for the Indian market. Better facilities and infrastructure were created and new systems were adopted to satisfy McDonald’s demands. Finally, all those efforts put in helped it become the Distribution Centre (DC) for QSRs of McDonald’s India. The DC is responsible for procurement, quality inspection programme, storage, inventory management, deliveries to the restaurants, data collection, recording and reporting. Additionally, value-added services like repacking of promotional items are carried out at the DC. The DC plays a vital role in maintaining the integrity of the products throughout the cold chain— the distribution system that ensures the products, which arrive at McDonald’s restaurants from suppliers all over India, are absolutely fresh and as per McDonald’s quality standards. Secondly, Vista Processed Foods

Pvt Ltd, McDonald’s supplier for its chicken and vegetable range of products, is another important player in this cold chain. The technical and financial support extended by OSI Industries Inc, USA and McDonald’s India Pvt Ltd have enabled Vista to set up world-class infrastructure and support services. This infrastructure includes hi-tech refrigeration plants for manufacturing frozen food at temperatures as low as -350C. This is vital to ensure that the frozen food retains it freshness for a long time. Giving an in-depth perspective on the cold chain, Sharma explicates that in the case of cold chain, each food material or product is kept under two temperature zones, viz., chilled category (wherein the products are stored at temperatures ranging between 00C and 40C) and frozen category (wherein the products are stored at temperatures ranging between -180C and -40C). According to Sharma, right from the source, where the product is picked up to the DC and from the DC to the retail stores, it is ensured that the temperatures are constantly monitored using various electronic devices and solutions. The vehicles are pre-cooled to that temperature before the product is picked up and loaded onto the truck. Further, the packaging of items is done in such a manner that the temperature remains intact. “We regularly conduct programmes to train our staff in these operations,” he says, adding, “We have also designed strict maintenance schedules for our equipment and vehicles. Route plans have been developed for various stores along with a time schedule based on the locations.” So, vehicles carrying products have to follow the prescribed norms, which ensure that a fresh product is delivered at the right location, at the right time. Highlighting the initiatives taken at Indo Arya Central Transport Ltd, Jain avers, “We have developed an automated multi-product storage system with the required temperature,

humidity and atmospheric conditions for specific products. We have also developed proper checking and maintenance of data for the procurement, storage, handling and safe transportation of the fresh harvest products. By using modern surveillance systems and sensors, customers can have a real-time view of the condition of their products—right from storage to supply—on any computer. Hence, in case of any negligence, technical failure or variation in temperature, the retail chain owner and logistics service provider can immediately be warned, and thus avert any crisis.” Elaborating further, Jain states, “With the growing need to ensure that the temperature-sensitive products to be distributed are kept in potent condition, organisations are in the pursuit of better solutions to maintain and monitor cold chains. The success of implementing cold chain management involves continual monitoring of product temperature throughout distribution and having appropriate corrective action plans in place. A streamlined and well maintained cold chain helps reduce costs, improve product integrity, increase customer satisfaction and eliminate wastage.”

CURRENT COLD CHAIN SCENARIO The cold chain segment in India is estimated to be at `10,000–15,000 crore. This ﬁgure is expected to touch `40,000 crore by 2015 with a growth rate of about 20–25%. Presently, the total number of cold storages in India is close to 5,400 with a total installed capacity of 24.45 million MT. Uttar Pradesh and West Bengal account for more than 60% of the cold storage capacity followed by Punjab, Bihar, Gujarat, Andhra Pradesh and Madhya Pradesh. According to CII, India’s cold chain infrastructure will require at least `18,000–20,000 crore worth investments over the next ﬁve years to meet this demand.

THUMBS UP FOR FAST FOOD CHAINS Growing urbanisation has played a critical role in shifting the consumption practices and giving the growth of QSRs a thrust. Also, the market for fast foods, ‘ready to eat’ meals, frozen products and pharma products—that are highly dependent on cold storage facilities for their higher shelf life— has given a boost to the development of cold chain facilities. It therefore comes as no surprise that Gati, with an aim to leverage on this opportunity, is setting up 10 cold storage plants across the country at an investment of approximately `200 crore in the next four years. Also, the government has taken a lot of initiatives to foster the development of the cold chain segment in India. For instance, it has formed National Centre for Cold Chain Development (NCCD) to prescribe technical standards for cold chain infrastructure for perishable food items, including fresh fruits & vegetables, and undertake their periodic revision. Besides, the government has also: • Granted infrastructure status to the cold chain segment • Reduced customs duty to set up cold storages to 2.5% • Exempted all cold chain-related equipment, like air-conditioning equipment and refrigeration panels, along with conveyor belts for equipment used in cold storages, etc., from excise duties • Extended the Viability Gap Funding Scheme (VGFS) for Public Private Partnership (PPP) projects in the setting up of modern storage capacity. VGFS provides for financial aid in the form of grants to infrastructure projects undertaken through PPP, with a view to make them commercially viable. Additionally, with the relaxation of FDI norms in retail, huge investments are expected to pour in, which will further the growth of the fast food retail and cold chain segment. arindam.ghosh@network18publishing.com

JANUARY 2013 • SMART LOGISTICS • 23

SPECIAL FOCUS RETAIL WOES

Supply chain inefficiencies

Lack of skilled professionals

Lagging 3PL services

Competition from the unorganised sector

Infrastructure woes

High real estate costs

Needed: Timely Attention

The industry believes that the success mantra for retail is nothing but being there ‘at the right place, at the right time’. So, for any retail venture to ﬂourish, one of the must haves is undoubtedly an efﬁcient and well established supply chain. However, Indian retail is still at a very nascent stage. Experts are, however, of the view that a consolidation of the necessary government policies, understanding the fast-changing consumer preferences and major investments will lead to a distinguished supply chain revolution in the near future. NISHI RATH

ISSUES pertaining to poor infrastructure, lack of mature 3PLs and warehousing have created roadblocks for the organised retail segment in India. The organised retail segment in India faces some major challenges; the most significant ones include underdeveloped supply chain, inadequate infrastructure, complex taxation laws, high levels of intermediaries and lack of supply chain visibility. Overcoming these will help it attain higher economies of scale and growth.

ISSUES AFFECTING RETAIL SUPPLY CHAIN MANAGEMENT (SCM) Lack of skilled professionals While organised retail is expected to witness a boom, the supply chain will

24 • SMART LOGISTICS • JANUARY 2013

take time to develop at the same rate because of lack of SCM professionals in the country with even fewer

MAJOR CHALLENGES INDIAN RETAIL INDUSTRY FACES • Inadequacies in infrastructure like lack of proper road connectivity, power shortages and insufﬁcient storage spaces • Rise in property prices and rentals are also a hindrance for some retail business • Multiple taxes and lack of clear policies • Shortage of skilled professionals in areas like supply chain and store management

having any experience in the retail segment. However, with the growth of organised retail and with the increasing number of professional courses offered in SCM and retail, the number of SCM professionals is gradually focussing more towards a scientific methodology in dealing with the back end supply chain. Infrastructure woes Investments in road infrastructure have not kept pace with the growth in road traffic. Most parts of India still do not have roads—the most used form of transportation—a major problem for the sector. According to a supply chain expert, “The infrastructure in India needs a facelift; otherwise, it is almost impossible to have a seamless supply chain. The retail segment majorly depends on timeliness, which makes the need for good infrastructure all the more apparent. Major investments are needed when we speak about this challenge. Now that FDI is coming in, we hope to see some major changes and development in back-end infrastructure; we have to wait and watch.” Lagging 3PL services The gap between the expectations and the actual level of services provided, and prices charged by the 3PLs are the primary reasons why more companies are not looking at outsourcing their logistics to 3PLs. Competition from unorganised sector Organised retailers face tough competition from the unorganised retailers or mom-and-pop stores that cater to the customers within their neighbourhood. The unorganised retail sector constitutes more than 90% of India’s total retail segment and thus, poses a serious hurdle for organised retailers. High real estate costs The ever-increasing real estate prices

have affected many new entrants in the sector, which leads to delays in opening stores. This has now led retailers to look for other options like tier II and tier III cities. The profitability of retail companies were affected severely because real estate costs constituted a major part of their operating expenses. Now, companies are moving out from prominent malls of metros and tier I cities and are focussing on setting up shops in other developing cities. Supply chain inefficiencies The supply chain needs to be managed efficiently because it has a direct impact on a company’s bottom line. Inventory management is the first challenge that retailers face at the local store as well as at the warehouse levels. Excess inventory often leads to an increase in inventory costs, and then, to lower profits. Commenting on the same, Naveen Chopra, Director, Vodafone Business Services, says, “The Indian logistics sector trails other major markets on several efficiency indicators. Physical transport infrastructure, customs clearance processes, inventory management processes and adoption of IT & advanced communication technologies are some of the many parameters where it significantly lags behind.” Logistics is another challenge related to the supply chain. It is imperative for any organised food and grocery retailer to establish a robust cold chain, which is not the case when it comes to India. Until and unless organised retailers fully develop integrated cold chains, they would continue to incur considerable losses through wastage of perishable items while moving huge quantities from one place to another. Procurement also poses another challenge for the sector. The main challenge here is to procure adequate amount of stock according to customer requirements, failing which the resultant rise in inventory can affect bottom lines.

KEY AREAS OF INVESTMENT Investment in a retail supply chain lies in the areas of sourcing, distribution centres (warehouse, cold storage), transportation networks, inventory (both store level and warehouse), supply chain information systems such as warehouse management systems, planning, forecasting and inventory management, among others.

POOL POINT NETWORK CAN SOLVE VARIOUS CHALLENGES Retail SCM is a tough labyrinth to pass. This involves getting the product from the right vendors to the right customers while minimising inventory levels, warehousing and transportation costs. Here, retailers have to cross the thin line of having enough inventories to avoid stock outs, while also keeping inventories low enough to minimise the carrying costs. This also includes responding to the evolving consumer demands without losing out to competition. According to experts, there is a way to keep these problems at bay—the utilisation of pool points for distribution, which is sometimes referred to as cross-docking. Retailers with high and quick flow through can also opt for this kind of distribution as mixing centres. The pool point process starts by figuring out where to source the products required. Many products are often being sourced offshore, which needs longer lead times and larger amount of inventory. The goal can be having the offshore product containerised so that it could arrive at a deconsolidation centre to be delivered directly to store through the network of pool points. On the domestic side, the goal can be to have the vendor pull product and palletise the orders by store so that those products could be optimised for store direct delivery through pool points. This, in turn, could eliminate the need to carry inventory in the distribution centres.

HOW ‘IT’ CAN ALSO HELP The major problem the retail segment faces is that of forecasting the requirements of inventory. Due to lack of proper IT implementation, the data is not available at the appropriate time. Even if the data is available, there is no sufficient technical competency to analyse this data to derive meaningful insights. This results in an increase in the number of stock outs, increased mark downs, low inventory turns and high pilferage rate. Elaborating further, Asif Merchant, MD, Catwalk Worldwide, avers, “Technology is one of the most important inputs to have in order to attain a robust supply chain. We have invested a lot in technology and that is one of our keys to success.” IT in SCM has helped retailers plan their stock outs, replenish their stock on time, move stock from warehouse to stores and maintain adequate stock to cater to consumer preferences, among others.

THE WAY FORWARD The organised retail segment in India is still at a very nascent stage. Nonetheless, it has the potential to present retailers a plethora of opportunities. In the near future, there are several steps that any retailer would have to take in order to ensure an effective supply chain for their business to grow. First and foremost, there should be IT implementation to ensure that only the required amount of inventory is ordered. Besides, there should be a mechanism to link all the different segments of the chain with each other. In addition, there is a need to be responsive to the demands of the segments. Parts of the value chain may be outsourced to a 3PL, while a retailer can also look into backward integration for critical areas. On a long-term basis, there would be a need to build a flexible supply chain, which would be capable of responding to changes in demand, supply and technology. nisi.rath@network18publishing.com

JANUARY 2013 • SMART LOGISTICS • 25

SPECIAL FOCUS RETAILING CHALLENGES & FDI

With the recent decision of the government to allow FDI in multibrand retail, the focus of the Indian industry will gradually veer towards retail. While India has been consistently ranked as the most attractive investment destination for retail among the emerging markets way before the onset of the ﬁnancial crisis, hopefully, foreign retailers such as Wal-Mart, Target and Tesco, among others, will soon open their stores in urban India.

Opportunities in Disguise? Illustration By Sanjay Dalvi

THERE are various potential growth estimates for retailing in India. Substantiating the same are the several reports from consulting companies such as McKinsey, PwC, Deloitte and indices such as AT Kearney’s Annual Global Retail Development Index (GRDI), which have all predicted robust growth figures for India during the next decade.

IN THE PRESENT SCENARIO IN INDIA… India is already home to several organised retailers such as Food Bazaar, Reliance, Pantaloon and Shoppers Stop, which have been successfully operating in the country. And there are estimates that organised retailing will pick up steam due to various factors and will grow beyond 10% soon. The unorganised retail sector dominates with over 94% of India’s total retail sector. It consists of over 13 million kirana stores and presently employs about 40 million people. With this as the backdrop, the new entrants will definitely face tough competition from local organised as well as unorganised retailers, i.e., the kirana shops.

GLOBAL RETAIL LOGISTICS SCENARIO The main objective of any retailer is to provide the right products of the right quality in the right quantity to the right customers at the right time, at the right place and finally, at the right cost. Thus, the retail logistics is asset intensive, involves software and intelligent devices such as pallets,

26 • SMART LOGISTICS • JANUARY 2013

cases, trailers with RF tags, personnel with mobile devices, RF tags/sensors on assets such as trailers, rail cars and ships, mobile devices and B2B hubs for EDI transactions. Apart from the credit card, loyalty cards and POS data, social networking and personalised websites combined with Internet search and social network data analysis offer a whole new way of reaching out to customers. These impact logistics as customer demands spur orders. Efficient consumer response, Collaborative Planning, Forecasting and Replenishment (CPFR), cross docking, Distribution Centres (DCs) with Warehouse Management Software (WMS), vehicles with Global

Positioning System (GPS) & managed by Transport Management Software (TMS) and finally, shelf management by the vendors are all practices followed by retailers. Thus, the retail logistics sector involves an array of participants— manufacturers, retailers, distributors; third-party logistics providers (3PLs), 4PLs, and freight forwarders, logistics hubs at airports, sea ports and rail terminals and regulatory authorities including customs. With the emergence of Internet as a medium of choice for consumer shopping, the fulfillment, i.e., the delivery of goods to the customer requires attention. The retailer has to now take responsibility for what was

previously done by the consumer. There are several order fulfillment practices that Internet retailers follow. The smallest online retailers stock and fill orders from their companies. Some retailers that fill hundreds or thousands of orders per day often rely on distributors or manufacturers to ship for them. Very large retailers are opting to run their own DCs, which require multimillion-dollar investments in warehouses and logistics technology. The fastest-growing option, however, is to hire an independent fulfillment house to store goods and provide ‘pick, pack and ship’ services.

NEED TO IMPROVE RETAIL LOGISTICS IN INDIA Given the sophisticated logistics systems available globally and the awareness of the benefits they provide for the consumers, the main question is can retailers operating in India, irrespective of their origin and experience with these systems elsewhere, import these techniques and technologies for the benefit of the Indian consumer? Given that food accounting for over 50% of total retail and the demand of clothes, jewellery and other fashion items being seasonal (depends on festivals and auspicious months for marriages), retailers may not be able to innovate or solve problems in India using the same methodologies that they used in other countries. They need to think differently. They need the cooperation of all the stakeholders, in particular, the state and central governments, industrial and social organisations, NGOs, regulators, R&D and educational institutes & logistics service providers. Indian organised retail has an efficient supply chain as compared to the unorganised sector. At the international level, the organised Indian retailers fall short of international retailers. The reasons are many and have to quickly resolved with the intervention of the central and state governments. The retail

sector is yet to gain the recognition of an industry; access to credit is an issue. Lack of basic infrastructure such as roads, warehouses, cold chain infrastructure, and skilled labour hamper the development of stateof-the-art retailing in India. Thus, the existing players have to invest substantial amounts of money and time in building facilities such as warehouses cold chain network and training manpower.

CHALLENGES & STRATEGIC SOLUTIONS Research in Indian retailing is not done in educational institutions, which, in turn, creates a vacuum in terms of innovations. Hence, companies try to either imitate the manufacturing industry practices or depend on consultants who generally suggest their experiences elsewhere in the world. However, there are many topics that need attention. Some of these include: • In India, nearly 61% of the cargo is transported by road, 30% by rail and the rest by air, pipelines and inland waterways. It is a known fact that movement of long haul bulk traffic by road is less efficient than by rail. However, road is still preferred over rail because rail freight tariffs are high. Moreover, Indian Railways follows a policy of subsidising passenger tariff by freight tariff; rail terminals have no cross docking facilities and the quality is poor; and finally, railways permits only full train loads from origin to destination. On the other hand, the trucking industry is fragmented with 70% of truck owners having only 1–5 trucks, interstate check points and corruption. Time has come for the government to intervene and change the scenario. The state of DCs should be located along the path of goods flow for storage of all goods that are needed in the region/ town/part of the city, thereby creating economies of scale. Goods can be distributed to retail stores

using battery-powered vehicles. Also, it is time to create logistics hubs in Central India in regions such as Nagpur, Hyderabad, etc., so that cross docking can be done to create efficiencies in logistics. • Procurement and inventory management of food and other items both from within and outside the country is a big challenge. Retailers may face problems both at the local store as well as warehouse levels and may incur considerable wastage of perishable items while moving huge quantities from one place to another. Also, economies of scale can be a factor in procurement. A way in which some companies can create efficiencies is by outsourcing transportation, warehousing and inventory management. • Finally, there is a need to improve kirana stores, small transporters as well as Small & Medium Businesses (SMBs) through mentoring and orchestration. This has to be done through careful social networking and transparency so that companies do not misunderstand this to be a move to take over or cripple them in the bargain. The small players need to be trained to produce goods & services needed and help them connect to the large retailers. The orchestrator can bring orders for apparel or pharma or grocery items from big retailers and can distribute the production among SMBs while taking responsibility for the final delivery. Several successful examples such as Li & Fung, Olam International exist today and these can be followed in the agri & apparel sectors in India for Indian retailers. All said and done, retail logistics also called as the last mile delivery is an important topic that needs national attention by the governments, industry and academics. Professor N Viswanadham, Computer Science and Automation, Indian Institute of Science, Bangalore

JANUARY 2013 • SMART LOGISTICS • 27

SPECIAL FOCUS FDI IN RETAIL STRATEGIES

It’s Time To Take The

Dip S ick Test Existing players in multi-brand retail in India are struggling to achieve growth, proﬁtability and cost competitiveness. To survive, some are trying to reinvent themselves by challenging established retail practices. With the change in FDI policy, it is the right time for new entrants to understand the importance of strong back end operations for sustainable growth in the emerging Indian retail landscape. INDUSTRY leaders in India have invested heavily over the past 4–5 years, but the growth does not justify these investments. Profitability is still in the red for most and the pressure of expansion is stronger than before. Several devised strategies turned out to be value killers for Indian retail, as a lot of complexity was built in when setting up the first generation supply chain. Companies tried to replicate international infrastructure and technology operating models without adequate due diligence while trying to design a ‘one-size-fits-all’ supply chain footprint. The immediate focus for managers was transactional gains with sourcing partners, rather than a judicious future plan with branded players and a well laid out private label strategy. Another roadblock disturbing industry leaders is blocking working capital and ending up building inventory to counter stock outs. In short, they must now look for judicious investments and rethink their whole approach to bring innovation that matches the recent changes in the retail landscape.

AMID PROBLEMS, OPTIMISM PREVAILS In India, slow and non-profitable growth in existing retail chains can be attributed to poor back end infrastructure and weak supply chain management. Also, lack of investment in the logistics part is creating inefficiencies in the food supply chain. The government, with its FDI directives, has placed substantial focus

28 • SMART LOGISTICS • JANUARY 2013

on streamlining capital inflow and investments in supply chains. FDI will open the gates to foreign retail majors who will need to leverage and customise their decades of experience, technology and management practices in ensuring an efficient supply chain. FDI in the retail industry will increase the competition at the domestic level and as the competition increases, competitors will be compelled to improve their quality of service at a reasonable price. This will invariably call for reinventing front end as well as back end operations of the retail chain.

UNIQUE STRATEGIES Smart managers should focus on the following key strategies to ensure that they invest right in future and generate higher returns on existing ones: Delayed differentiation in supply chain: A category-specific product mix is built-to-stock and the point of commit is closer to the consumption base. This will not only maximise the service levels but will also improve responsiveness. Revisit autonomy of operations: As retailers grow across the country spurred by the growth in sourcing hubs and suppliers, it is important to provide autonomy to regions so that they can partially decide on their sourcing needs based on pre-defined quality parameters. Collaborative planning: Collaborate with suppliers over an extended planning horizon. This can provide competitive advantages in product

development, alignment of marketing programmes and managing life cycle of assortments effectively. Balance variable and fixed costs: Developing a variable cost structure in place of fixed cost will be a viable solution for modern retail. This will require judicious selection of ‘hard assets’ and right costing of investment. Consortium buying: Consortium within the supply chain presents a win-win situation with a proper benefit sharing model. The partners should be selected based on alignment of strategic goals and value proposition. Internationally, players join hands with their suppliers and competition for joint sourcing of raw material and packaging material. Leverage technology infrastructure: Retail is about customer experience, managing material and information flow. Technology is more than just an enabler in retail and with strong analytics usage to design customised consumer offerings, run smart promotions, manage social media, plan effectively with supply chain partners, predict stock-ins etc., retailers will get substantial results. Players who find the right solutions to some of the above issues will be able to strike the right balance between investment and growth with profitability. Rajeev Singh, Executive Director, Operations Consulting Practice, PwC India with inputs from Rajat Mahajan, Managing Consultant, Operations Consulting Practice, PwC India

SPECIAL FOCUS LSP LSPss IN RETAIL

NISHI RATH

“OPPORTUNITIES are often things you haven’t noticed the first time around,” Catherine Deneuve, a well known French actress, has rightly said. The opportunities that FDI in retail can bring in were overlooked by many, but the government recently argued that FDI in multi-brand retail will create a win-win situation for all the stakeholders. While addressing the annual general meeting of Federation of Indian Chambers of Commerce and Industry (FICCI), Hon’ble Prime Minister Shri Manmohan Singh recently said that the steps taken by the government were only the beginning of a process to revive the economy and take it back to its growth rate of 8–9%. “Our decision on FDI in multi-brand retail, civil aviation, power trading exchanges and broadcasting must also be viewed in this larger context,”

According to experts, the presence of organised retail would result in a shift from the legacy supply chain to momand-pop outlets to a scenario where multi-store formats will take control of warehousing and distribution activities, thus resulting in consolidation of services.

the government’s recent victory in Parliament, when the Opposition’s resolution moved against FDI in retail was voted out. Now, Logistics Service Providers (LSPs) believe that a basket of opportunities will accompany the inflow of FDI in retail, scale and distribution network. A lot of preparation on the part of LSPs will have to be

STAY TUNED FOR ORGANISED BACK-END LSPs believe that the policy change will create a demand for effective logistics and

Cashing in on the FDI Opportunity Logistics Service Providers (LSPs) are predicting an opportunity in the growth projected for the organised retail market to 20% of the total retail market by 2020 from the present 7%. Reason: Foreign Direct Investment (FDI) in retail has ﬁnally got the green signal. Though many are of the view that this might open the Pandora’s box, LSPs believe that this might be a great opportunity to grow and develop the back-end.

said the Hon’ble Prime Minister while speaking about the challenges on the fiscal deficit front and the global economic environment. This came against the backdrop of

30 • SMART LOGISTICS • JANUARY 2013

made. This, in turn, would call for a flood of investments. Therefore, for the next 5–10 years, the logistics sector will remain a gold mine for investors.

services to meet supply chain demands. Also, with global players looking at entering India, there will be a demand for efficient and global standard supply chain solutions. Elaborating

further, Kapil Premchandani, MD, KD Supply Chain Solutions Pvt Ltd, explains, “FDI in organised retail will give a thrust front-end change, which, in turn, will result in the need for organised back-end. From transportation to warehousing to packaging, almost every segment is expected to experience the impact.” He adds that the move will help the backend get better and improve the entire supply chain. The impact of FDI would be witnessed across the logistics infrastructure and services segments. According to experts, the presence of organised retail would result in a shift from the legacy supply chain to mom-and-pop outlets to a scenario where multi-store formats will take control of warehousing and distribution activities, thus resulting in consolidation of services. The augmented organised retail sector will also attract global LSPs to tap the opportunities. According to a logistics professional, “This, in turn, will create a demand for bigger and modern warehouse formats with retail warehousing commanding a larger share than what it is at present. Though it is early to talk about various strategies to be taken, the LSPs would look at expanding their range of services as companies are now looking for more than just transportation of their products and raw materials.” As is the practice with organised retail chains, most of their logistics activities will be outsourced. Thus, LSPs and 3PL players are looking forward to grab their share of the FDI in retail pie. Commenting on the same, Devdip Purkayastha, President, CHEP India, elaborates, “Logistics providers and real estate will immensely benefit from the whole move as the retailers will not keep everything to themselves. Additionally, most of the physical part will be outsourced, which will come across as more opportunities.” The country’s retail environment has, so far, been dominated by the unorganised segment, which has several challenges

on the logistics front. However now, LSPs believe that this will be a positive step to cut down on losses, wastage and inefficiency.

TACKLING WAREHOUSING ISSUES Inadequate warehousing is one of the major bottlenecks faced by the entire supply chain structure. According to statistics, the present agriculture warehousing capacity at 108 million tonne is short of the requirement by about 25 MT. The Confederation of Indian Industry (CII) estimates that the shortfall in warehousing capacity for the next five years is expected to be about 40 million tonne at the current rate of production. However, the government is targeting to create about 35 million tonne of new capacity in the next five years, involving an investment of `14,390 crore. The shortfall is even more acute for cold storage facilities.

CHALLENGES AHEAD Though FDI in retail is expected to open up various opportunities for the logistics industry, there are several challenges that need to be addressed in order to capitalise on the retail escalation. The cost of logistics for a retail chain, as a percentage of the cost

RETAIL SECTOR TO GROW AT A CAGR OF 12% The Indian retail market—which was approximately worth $220 billion in 2005—is now expected to hit $700 billion by 2015, with a CAGR of about 12%. Modern or organised retail is growing at a fast clip, with a CAGR of about 21%. The sophisticated front-end that international players are likely to bring will boost investment in infrastructure by retail players, third-party supply chain companies and the government. This will improve efﬁciencies in the supply chain, cut wastage, increase efﬁciency and bring down consumer prices.

Logistics Service Providers (LSPs) believe that a basket of opportunities will accompany the inﬂow of FDI in retail, scale and distribution network. A lot of preparation on the part of LSPs will have to be made. of goods sold, is estimated to be about 5% according to global estimates. However, in India, logistics costs as a share of Cost Of Goods Sold (COGS) are 3–5 times higher. “Though the whole concept is lucrative and has various opportunities, it will be a challenge for logistics infrastructure to grow rapidly to meet the demands of the global brands,” opines S Kannan, CFO, Arvind Lifestyle Brands Ltd & Arvind Retail Ltd. India is the world’s largest producer of fruits and vegetables; has the largest area under wheat, rice & cotton and is the second largest producer of rice and wheat. That is the good news. But, at the other end of the spectrum, India loses about `50,000 crore annually merely on account of frail post-harvest infrastructure. To truly cash in on the opportunity, the challenge would be to manage the complex retail supply chain cost efficiently without wastage and time delays. As global players will look at outsourcing various services to enter India, the demand for endto-end and integrated supply chain models will be required. This, in turn, will lead to further improvement.

TRANSFORMATION PREDICTED FDI in retail and the anticipated plan to roll out the Goods & Services Tax (GST) is said to give a makeover to the transport and logistics landscape in India. The industry is of the view that with FDI and GST in place, the way the country presently stores, transports and delivers its goods will change for good. nisi.rath@network18publishing.com

JANUARY 2013 • SMART LOGISTICS • 31

FMCG SUPPLY CHAIN FLEXIBILITY

Unravelling Packaging and Distribution Efficiency Opportunities The consumer dynamics created in both developed and emerging markets by the global economic crisis are likely to stay. As retail channels proliferate and retailers mount new strategies to capture market share and extend geographic reach, FMCG manufacturers need more flexible supply chain solutions that better position them to capitalise on new revenue and market share growth opportunities. The supply chain strategies outlined here not only deliver the flexibility and cost efficiency that the dynamic retail channels demand, but also create the foundation for improvements in quality and service that lead to a more sustainable competitive position. OVER the past few decades, Fast Moving Consumer Goods (FMCG) companies have been forced to react to a multitude of changing market dynamics. The mergers and acquisitions era created strong competitors and rapid growth for many companies but resulted in complex and costly logistics infrastructures. And, the growth in big box retailing and e-commerce placed increased attention on the consumer shopping experience, creating a shift in the balance of power from the manufacturer to the retailer. At the same time, the technology and manufacturing boom was giving rise to developing economies in Asia and Latin America, creating new consumers and growth opportunities for FMCG manufacturers and retailers

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alike. While top-line growth was enticing in these emerging markets, lack of infrastructure, dispersed populations and cultural nuances created challenges for even the best manufacturing and logistics planners seeking to establish operations and capture market share quickly and profitably. While each of these dynamics influenced how FMCG manufacturers and retailers went to market, the economic fluctuations experienced around the world in recent years have most dramatically impacted growth and operating strategies.

SUPPLY CHAIN IMPACTS OF EVOLVING CONSUMER & RETAILER NEEDS While fast moving consumer goods fared better than most industries

during the economic downturn, manufacturers are still faced with unpredictable consumer demand and strong competitors, increasing retailer requirements, rising commodity costs, volatile fuel costs and pressures to reduce carbon emissions. In addition, unique infrastructure challenges create efficiency obstacles for operations in both mature and emerging markets. In mature markets, consumer goods manufacturing and supply chain operations are well established, but that brings as many issues as benefits. Existing manufacturing operations were designed to utilise standard highvolume, highly automated equipment to maximise productivity and capital investments and reduce labour costs. Corresponding supply chain goals

were to use standard package sizes shipped in truckload quantities to minimise transportation costs, support mechanised distribution centres and reduce labour costs. ‘Smaller’, ‘customised’ and ‘highly differentiated’ do not work well with these legacy operations. Figure 1 illustrates a traditional distribution supply chain in a mature market. The growth of modern retail channels in emerging markets will eventually benefit FMCG companies operating in these regions, offering distribution synergies and sales channels more aligned to their production capabilities. Today, however, it adds complexity to an already tenuous situation. In addition to using local distributors to get product to markets and local retail outlets, FMCG manufacturers are now challenged to meet the needs of an even more diverse retail channel mix. And, of course, manufacturing quality and product safety remain a concern and challenge, particularly in remote or unstable regions. Manufacturers in all parts of the world are looking for better ways to meet retailer and consumer needs, including: • Cost-effectively adapting manufacturing and packaging processes for point-of-sale customisation and differentiation • Optimising the supply chain network and organising deliveries to support smaller, more frequent orders • Introducing flexibility into complex, high-cost supply chains These objectives can be accomplished through improved manufacturing and distribution supply chain strategies. While FMCG supply chains have continued to evolve, opportunities remain to profitably meet new challenges. As retailers and consumers in emerging markets follow the lead of modern trade in mature markets, manufacturers can look to some of these same efficiency and productivity opportunities to capitalise on new sales growth.

STRATEGIES FOR CREATING MORE RESPONSIVE, EFFICIENT AND COSTEFFECTIVE FMCG SUPPLY CHAINS Here are four supply chain strategies that can help manufacturers meet new market demands, while also satisfying their own requirements to operate efficiently and support growth: • Outsourcing Primary Packaging (Contract Manufacturing) • Optimising Secondary Packaging (Co-packing) Locations • Regionalisation of Distribution Networks • Horizontal Collaboration These strategies can be used individually or together as part of an integrated solution that simplifies and drives costs from FMCG supply chains. While these practices are not new, to benefit all parties in the FMCG supply chain, they need to be better integrated and streamlined from design through execution. Here’s how:

to smaller, more frequent, customised orders requires shorter production runs or specialty equipment that is not available on all manufacturing lines. In either scenario, manufacturing and packaging processes for some consumer goods can be outsourced to an appropriately equipped and qualified distribution centre to bring the product closer to the end customer. Outsourcing manufacturing can increase asset utilisation, reduce new capital investments, help facilitate product packaging based on regionalised demand and provide greater flexibility in responding to the changing marketplace. With this strategy, the manufacturer ships bulk product or ingredients to the production facility or distribution centre, where it is mixed, if needed, and packaged into smaller containers. This is a very flexible strategy that provides retailers with the different

Figure 1: Traditional FMCG supply chain network

STRATEGY 1 Outsourcing Primary Packaging Although the outsourcing of primary packaging, also referred to as contract manufacturing, has been around for decades, it is experiencing renewed interest from companies entering emerging markets and those trying to streamline existing operations in mature markets. In many emerging markets, FMCG companies have already utilised contract manufacturers as a means to enter the market since, initially, there is insufficient demand to require a dedicated manufacturing facility. In mature markets, the shift

package sizes they require, including the smaller packaging sizes for convenience and dollar stores. For the FMCG manufacturer, outsourcing saves costs and provides flexibility for both operations and marketing. Outsourcing reduces the time and complexity required to change manufacturing lines that support product launches or shorter promotional runs. And flexibility can increase by shifting primary packaging into the distribution centre network, since final packaging decisions can be postponed until closer to the end consumer. This allows marketers

JANUARY 2013 • SMART LOGISTICS • 33

Supply chain flexibility, continued

to delay decisions on product customisation based on distinct demographic or cultural differences. In the end, the product moves less frequently, the transportation costs are reduced and the product is packaged closer to the local distribution points.

STRATEGY 2 Optimising Secondary Packaging Locations Warehouse club stores have long used customised displays and promotional packaging as merchandising tactics to attract customers. However, this strategy has proliferated as major retailers are increasing their use of customised packaging, product sizes and promotional bundles to differentiate themselves in the marketplace. With the rate of customisation on the rise, secondary packaging has become an important competitive advantage in the FMCG supply chain, because it supports product promotions and provides the ability to vary pack sizes by repackaging finished goods into multipacks, assortments and bundles, as well as to set up special store displays. Demographicbased customisation also provides FMCG manufacturers an opportunity to compete against private labels by assembling products in more appealing value or combination packs to create increased shelf differentiation. The secondary packaging process

can be inefficient and costly, since many manufacturers ship product out to co-packers for customisation, who then ship it back to the plant or a distribution centre. For these companies, consolidating secondary packaging operations into an existing facility allows them to postpone customisation closer to consumption and avoid adding steps and time to the production process. This helps reduce order lead times, avoid carrying unnecessary inventory, enables justin-time shipment of floor-ready displays and products for advertised promotions and can result in less SKU and material obsolescence. Co-locating secondary packaging in an existing distribution or manufacturing location also eliminates transportation to and from the co-packer, thus reducing carbon emissions, minimising transportation costs and eliminating potential product damage. Additional overhead cost savings can be achieved through improved facility use and eliminating resource redundancy, particularly in campus operations where trained labour is readily available to support special projects. By using resources from within the campus, the manufacturer can avoid maintaining extra staff to support co-pack projects or hiring less productive temporary labour. Also, product security and visibility can be better controlled when the product

moves less frequently, particularly in emerging markets where counterfeiting and theft are growing concerns.

STRATEGY 3 Regionalisation of Distribution Networks In mature and emerging markets, many top FMCG manufacturers have moved away from a centralised distribution model in favour of a Regional Distribution Centre (RDC) network or cross-dock network that positions product closer to customers. This strategy enables shorter order lead times, which allows retail customers to respond quicker to fluctuating consumer demand. It also reduces retail store inventory, product obsolescence and security burdens that come with managing large volumes of products in some regions. Manufacturers can reduce both inbound and outbound transportation costs by locating RDCs or crossdocks near the plant or in campus operations that provide access to intermodal facilities. Campus-based sites also offer additional space, flexible labour availability and the opportunity for multi-manufacturer collaboration for shared warehousing and transportation, as shown in Figure 2. While some FMCG companies already have RDC networks in place, the existing locations may be the result of acquisitions or facilities built for distinct product lines. These companies may consolidate into fewer, larger RDCs in more strategic locations for greater efficiency & savings.

STRATEGY 4

Figure 2: Regional campus operation

34 â&#x20AC;˘ SMART LOGISTICS â&#x20AC;˘ JANUARY 2013

Horizontal Collaboration Horizontal supply chain collaboration among FMCG manufacturers involves sharing warehouse space and consolidating smaller shipment of multiple manufacturers into more economical truckload shipment going to the same retail customer. In many emerging markets, collaboration is a cost-efficient way to establish and serve

remote areas that have low population density or infrastructure challenges. And in mature markets, it can help meet the demands of the retailer as order and shipment sizes shrink. This type of strategic collaboration between FMCG manufacturers to reduce costs and improve efficiencies is an idea that has been around for some time. However, competitive concerns as well as cost- and savings-sharing complexities have stalled progress. Manufacturers across the world are now looking seriously at collaboration as a way to drive supply chain efficiencies, share costs and reduce carbon emissions in support of sustainability strategies. The first area of focus is typically collaborative freight consolidation. Manufacturers can save significant costs on the smaller, more frequent deliveries that retailers are increasingly demanding—or in emerging markets where stores have less shelf space and consumer demand is still building. Shared warehousing provides each manufacturer the flexibility, because space can be configured to meet fluctuations in demand, which results in greater optimisation of assets. Value-added services such as packaging, consolidation and mergein-transit can also be provided. The cross-docking capability is particularly beneficial for manufacturers who fulfill retail orders from multiple plants in smaller quantities. By merging shipment at cross-docks, manufacturers reduce transportation costs and decrease stock transfers while retailers achieve receiving synergies. With enough volume and coordination, ‘store-ready’ pallets can be built. This decreases retail receiving costs by allowing shipment to bypass the retail DC and be delivered in truckload quantities directly to the store. Collaboration can also be a particularly effective strategy for mid-sized manufacturers that struggle to meet retailer requirements without incurring additional costs. Collaboration offers the economies of

Figure 3: Streamlined FMCG supply chain network

scale needed to procure flexible storage, packaging and transportation solutions.

INTEGRATING STRATEGIES FOR A MORE STREAMLINED SUPPLY CHAIN With the new reality of smaller, more frequent shipment, shorter lead times and fluctuating economic conditions, price-driven logistics decisions that do not anticipate and support quick response to consumer and retailer expectations can do more harm than good. Traditional approaches of bidding out individual locations or services can take costs out of the business in the short term and offer immediate business impact. However, in the long term, managing multiple suppliers with limited integration and connectivity can result in additional administrative costs and inefficiencies. In emerging markets, where securing accurate cost, service and product data is already challenging, buying transportation, warehousing, packaging and other services separately creates even greater inventory and visibility challenges. And with multiple suppliers, trying to apply standard operating procedures or trace product damages becomes increasingly difficult. Figure 3 demonstrates a streamlined supply chain network provided by a single service provider. In the end, if products are moving more frequently or service levels cannot be met due to the longer lead time

required to make these extra moves between manufacturing, packaging and distribution partners, the impact may be higher total landed costs and lost sales for both FMCG manufacturers and retailers.

STRATEGIC ROLE OF THIRD-PARTY SUPPLY CHAIN PARTNERS Achieving optimal efficiency takes knowledge and control over all the moving parts of a supply chain. Having a partner with the knowledge and the resources available to support these challenges is critical to achieve sales and profit goals, particularly in emerging markets where experience with local customs and business practices can make a difference. A 3PL that can offer network design and optimisation, primary and secondary packaging support, campus-based warehouse and transportation solutions, labour management, real estate services, regional expertise and collaboration opportunities will be equipped to deliver the service, flexibility and value needed to remain competitive in any market. These providers can also offer the visibility and control needed to better understand and manage the increasing costs to serve both retailers and consumers, supporting long-term sales and profitability goals that reach far beyond the supply chain. Courtesy: DHL Supply Chain

JANUARY 2013 • SMART LOGISTICS • 35

SCM TRENDS CHANGE MANAGEMENT IN PROCUREMENT OUTSOURCING

Creating Value through improvement in efficiency There exists a clear disparity between individual and organisational goals while implementing procurement outsourcing solutions. Beneﬁts can be accrued only from a holistic change management solution, which strikes a balance between the two goals. Business cases rely on changes and, more often than not, they tend to underestimate the true potential of change management. This is signiﬁcant for the organisation as well as the individual, and if not addressed proactively, it may lead to disruptions, resistance and possibly, to project failure. PROCUREMENT function creates value through improvement in effectiveness and efficiency. The key levers influencing value creation are spend under management, percentage of savings over the spend addressed, procurement function’s alignment with the business functions, robustness of risk management initiatives, procurement function’s operating costs as well as the time to value seen. P r o c u r e m e n t outsourcing positively impacts each of these value levers and brings realisable benefits to the organisation. The changes involved in adding a procurement outsourcing partner can be multifarious and need to be handled with a meticulous laid out change management initiative. The most frequent change agents include partnering seamlessly with the outsourcing team, processing realignment, adopting technology, signing up for stretched targets, and transforming existing processes. To tackle these change agents here’s proposing a six-step framework that is integral for an effective change management programme:

STEP 1: WHY CHANGE MANAGEMENT? Procurement, as a function, is playing a more influential and strategic role within enterprises while creating a strong impact on the business function’s

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strategies. This transformation has been brought upon by an adverse business environment, operational and supply chain maturity, increased focus on return on investment and developing sustainable business practices. Procurement leaders today have a much wider influence and reach. Procurement outsourcing has helped in the metamorphosis of the procurement function by creating greater value compared to the traditional practice. Outsourcing brings flexibility and uses a shared resource pool to meet procurement needs of business functions across multiple locations and divisions. Setting up onsite teams of category experts in

procurement functions and offshoring the tactical procurement activities to low-cost countries have been a sought after way to gain greater effectiveness and efficiencies. Procurement leaders have realised the necessity to innovate and the corresponding benefits, which procurement outsourcing can bring forth. However, the process of outsourcing is associated with several changes to the existing procurement practice and companies expect greater results from each member of procurement. Typically, buyers can deliver anywhere from 1–4% additional savings as a result of spend analysis, market intelligence, supplier performance management, contract management and other sourcing support-related services. During this change process, when organisational and individual goals do not match, the outsourcing model fails. In several cases, we have experienced that the change management programmes are heavily process driven and fail to address the emotional side of change. Change management in procurement outsourcing needs to address the ‘people side’—managing expectations, obtaining participation and involvement from them, and guiding them in making changes to their habits. Hence, there is a growing

need for a robust model to manage the change and help realise the benefits from the procurement outsourcing initiative.

STEP 2: CHANGE MANAGEMENT PROCESS A clear understanding of key value levers is essential to fully appreciate the need for change management process in procurement outsourcing. The change management levers connect varying degrees to realise the benefit potential. At a high level, a successful procurement outsourcing model improves the effectiveness and efficiency of the procurement function.

STEP 3: VALUE LEVERS FROM PROCUREMENT OUTSOURCING Procurement teams constantly strive for higher savings. With procurement outsourcing, special functional teams help achieve this goal by bringing the necessary skill sets, best in class sourcing tools and industry best practices and benchmarking. Procurement needs to be closely aligned with the business functions for planning and execution. Outsourcing frees strategic resources, enabling them to focus on strategic issues, explore potential opportunities and secure buyins and participation in new initiatives. Risk management in procurement is a key focus area where procurement proactively identifies and works towards various risks (supply, market and forex), compliance and environmental risks. With access to market intelligence and support, procurement can have better insights into various risk parameters. Due to the availability of additional time from outsourcing activity, procurement can improve its selling skills to get greater spend coverage. The team now has access to categoryspecific intelligence as well as skilled resources to identify the best fit strategies for a variety of spend groups. These resources also help in tail-spend management by identifying categories with potential saving opportunities.

Implementation of rigorous processes, such as contract management and addressing spend through catalogs, reduces maverick spend and helps to facilitate monitoring of spend. Procurement outsourcing brings flexibility and a shared resource pool that can service multiple divisions across several geographic locations. Outsourcing leverages technology to automate processes, improve productivity and increase responsiveness. A blended onshore and offshore team further reduces operating cost and improves Return on Investment (RoI). Procurement has come to the forefront primarily because it has increased the time to value. Procurement outsourcing specifically helps in this process increased by using readymade templates, category and market intelligence, technology and having a better understanding of the various risks in the process. Outsourcing also helps in standardising Service Level Agreements (SLAs), thus, adding a defined time perspective to the whole procurement process. Finally, distributed project management and workflow management help teams acquire the necessary skills and reduce the overall time to value cycle. Having understood the various levers for value creation from a procurement outsourcing perspective, it is necessary to understand the changes required to make the change happen and unlock potential value.

STEP 4: CHANGE LEVERS Let us understand the significance of each value lever: • Adopting Technology Technology is at the forefront in a procurement outsourcing model. At one extreme, is the increased utilisation of ERP, and, on the other extreme, are custom solutions such as Catalogs, e-Sourcing modules (eRFx, eSpend, eContracts, eAuctions, etc.) Technology solutions automate processes, thus, reducing procurement

lead times and generating vast amount of data necessary for running analytics and supporting advance decision support systems. Custom solutions like catalogs ensure contract compliance, supplier scorecard measurement and tracking supplier risks, while RFx and contract templates deliver great efficiencies. • Leveraging intelligence Experts within the outsourcing team bring with them a repertoire of knowledge-based expertise such as market intelligence reports, industry best practices, category-specific expertise, sourcing strategies and savings benchmarks. These reports are integral for developing categoryspecific procurement strategies and managing risks and self-assessment of a procurement programme. They also help procurement in aligning itself with the business functions and proactively identifying other opportunities. • Leveraging extra support The procurement outsourcing team takes the tactical activities out of equation leaving the in-house team to focus on high impact areas. The extra support also comes in the form of a shared resource pool, which helps in streamlining procurement processes, thus significantly reducing operating cost. • Signing up for stretched targets The procurement team can institute and actively monitor corporate social responsibility initiatives like minority, green and small business programmes. Again, the procurement team can definitely achieve an additional 1–4% savings from the outsourcing process. • Transforming existing processes With the help of the outsourcing team, the time required to turn around a request shortens. The team becomes more proactive to the requests from business, substantially shortening the overall cycle to create value. All the risks associated with the procurement process get addressed by the new processes, as procurement can make much more informed decisions. This,

JANUARY 2013 • SMART LOGISTICS • 37

Change management in procurement outsourcing, continued

in turn, helps in aligning procurement goals with those of the business.

STEP 5: CHANGE PROCESS To ensure the success of a change initiative, all the five change levers listed in Change Levers should be adequately addressed. Here’s proposing a unique six-step Change Management Model, which provides a holistic solution to manage the change. Let us look into the various stages of this model. 1. Understand Stage 1: Assess Figure 1 shows the steps in change management process for procurement outsourcing. The change management initiative begins by understanding the current procurement practices within the organisation. This is done with the help of cost and value benefits. This stage requires a bottom-up approach where a mutually exclusive set of all as-is processes need to be prepared. This shows the gaps within the system that need to be assessed and defined. Then, a sense of buyin and urgency needs to be inculcated in the organisation, especially the top management team, to fulfill the gaps. Stage 2: Envision To get the buy-in from all the team members, procurement leaders should set a strong vision, which can motivate the entire team towards achieving that goal. People should be able to feel that they are a part of something which is bigger than them as individuals and thus inculcate a sense of urgency. This vision should be holistic, encompassing cost savings and other value benefits, softer aspects such as supplier and customer relationship management and implementing sustainable procurement practices. This vision must be simple in delivering its message and should also identify the goals from its implementation. After the programme level goals are established, based on the assessment made, an implementation plan needs to be developed. This should include

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all possible sub-functions with realistic timelines assigned to each. Then the roadmap between the as-is processes in Stage 1 and to-be goals should be developed. Based on the risks, timelines and the subsequent benefits, the priorities can be set and the milestones can be fine-tuned. 2. Change Stage 3: Communicate The next step is implementation. Implementation of the change is a top-down approach where the senior leadership in procurement gets the necessary buy-in from all the team members. The three most important elements in any change management programme—communicate, communicate and communicate—are vital here. For implementation, a strong change management team should be created which can steer this change initiative safely through. The team members should not only have the formal power to remove any hindrances in the project, but should also have strong leadership, effective communication and project management skills. The team should be backed by a senior C-level executive. These people must be competent and credible with strong formal and informal powers. Once the team is in place, the process of change communication should begin which will be initially done by the leadership and then by the change management team. The communication must be plentiful because if the communication space is

not filled with deliberate, optimistic and honest communication, then it will be filled by rumours, gossip and speculation from one set of employees. The communication must also be meaningful and the situation relevant. During the initial phase, the employees are only interested in communication that relates to their specific personal situation. In the case of sourcing support, the key benefit for the buyers is that they can now focus on more strategic activities, drive greater value and play a bigger role within the function. The change management team should train the managers in the department before sending out their communications to the team members so the alignment with organisational goals is maintained. Conducting training sessions, demos, getting feedback from buyers on the sourcing initiatives and incorporating their feedback and focussing on creating a sustainable procurement outsourcing practice should be used in communication. Frequent communication between the procurement team and the outsourcing team should be ensured so that each team benefits from the other. This can be done using video conferences or getting the outsourcing team to travel to the client location. This in-turn should be used to set stretched targets as both the teams will be in

Figure 1: Six-step Change Management in Procurement Outsourcing

constant touch. Stage 4: Enable The communication process sets the stage for implementation. The employees need to be enabled to make the changes. This can be done by removing the obstacles, changing structures and processes so they are aligned with the new vision and supporting the employees as much as possible. The change management team plays a large role here. On the softer side of enabling, employees should be more involved with the process to minimise the impact of natural resistance. This can be done in areas such as design of work and work routines, processes, changes in performance measurement, transition management and communication. When involved, people feel a greater ownership towards the change and hence, are more willing to embrace it. Employees should be continuously recognised and rewarded for making changes happen. Depending upon the type and size of procurement outsourcing, it may take more than a year to implement change. During this period, it is common for employees and managers to lose sight of the purpose of the project and direction. This can be countered by setting short-term goals and celebrating multiple short-term wins. Early savings generation and key success stories related to specific categories or regions should be recognised and communicated to the larger procurement teams to generate momentum. On the business side, the procurement team should use the additional intelligence such as industry reports, supplier scorecards, top players within the industry, and best practices to set realistic targets. Pilot transformation programmes should be used to begin. The success of the pilot programmes will help get more buy-in from the teams and also help in correcting the process by reviewing the results.

3. Sustain Stage 5: Measure Various performance metrics can be laid down by the change management team. A few of them can be savings per FTE, percentage of maverick spend—purchases not from contracted suppliers or cataloged suppliers, usage of procurement tools, time per FTE, spend managed, number of strategic initiatives taken up, addressing concerns of business groups, or milestones reached. These will help in assessing the programme’s effectiveness and refining future goals. Joint performance metrics should be defined for both the procurement as well as outsourcing teams. A few of these metrics can be: • Percentage of activity outsourced vs. additional spend addressed by the procurement team

Procurement outsourcing brings ﬂexibility and a shared resource pool that can service multiple divisions across several geographic locations. Outsourcing leverages technology to automate processes, improve productivity and increase responsiveness. • Market intelligence leveraged vs. additional savings attained • Reduction in time to value vs. usage of technology All these metrics can be defined from where we have the impact of changes required on the value creation levers. In addition to the value figures, there should also be metrics considering the motivation levels and employees’ willingness to take up higher targets which helps employees attain greater levels and in turn help the organisation grow. Stage 6: Improve Making improvement as a part of an organisation’s philosophy can be done in several ways: • Spread pilot success stories within

the organisation. Irrespective of the size and impact of the accomplishment, it should be well publicised. The stories should be shared on the internal portals, team meetings, conferences, etc. They should also be incorporated in the corporate training material as best practices by the company. • Feedback process should be encouraged across business, outsourcing team and the procurement teams. The feedback should be constantly evaluated and the necessary changes should be a part of the continuous improvement programme. • The change management team should constantly focus on keeping the targets stretched by involving procurement managers in the process and making them more responsible for the results. In this way, they will be constantly working towards improving the current process and achieving greater results.

STEP 6: ENSURE A SMOOTH CHANGE MANAGEMENT PROGRAMME In outsourcing, some key processes of sourcing and procurement functions require changes. Employees will have to do their jobs in a slightly different way and may have to interact with foreign employees from a partner company. This change needs to be taken seriously by the management; communication around this change throughout the transition process is critical. The aim of the change management process is ultimately to ensure that procurement outsourcing is implemented as expected with no disruptions to the service; to maintain or to increase employee engagement and productivity and to maintain a good working relationship between the outsourced department and the rest of the organisation to maximise savings and value for the client organisation. Courtesy: GEP

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Value Chan Adop techn Lever intell Lever suppo Sign stretc Trans proce Table 2

AUTOMATION TRENDS VOICE TECHNOLOGY

The 10 Keys to Voice Technology Deployment Success in Distribution Centres

Voice technology has made tremendous inroads into Distribution Centre (DC) operations, and with good reason. It addresses key business problems with a fast payback and high Return on Investment (RoI). Here’s presenting 10 proven tips to get the best results out of your voice project and to ensure that your company maximises its success.

VOICE technology has emerged in the last decade from a little-known approach in order picking—primarily deployed in the grocery and beverage sectors—to a technology option that has truly become mainstream across virtually every industry sector. Today, hundreds of thousands of workers around the world use voice technology to help ship products to customers and perform other DC tasks. Voice technology vendor Vocollect alone says it has 500,000 users— incredible growth for a technology that started to take off 10 years or so ago. Voice technology is not only an increasingly preferred approach to order-picking and more; it has become one of the most popular distribution technologies, solving business issues that impact DC operations, with a proven ability to reduce operating costs with relatively little ‘pain’ associated with the deployment of technology and a rapid time-to-value opportunity. To ensure your company avoids pitfalls experienced by others that delay the results achievement they expect, below are 10 important keys to voice system deployment success, roughly in the order in which they

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should be addressed during the course of a project.

KEY 1:

GET EDUCATED ABOUT VOICE

Over and over again in any area of supply chain and logistics technology, a project is almost always more successful when a company and its project team do a thorough job of educating themselves on a technology and its benefits. However, companies often fail to adequately educate themselves before jumping into a project. If you think voice might have a good fit in your operation, there are a wealth of resources on the web, at various trade events, from voice providers, and more. Companies ought to spend sufficient time to get several people well educated on voice technology and applications before embarking on a potential voice project—and that executives confirm the level of knowledge the team has before allowing the actual solution/ provider selection effort to go forward. Presentations on voice by the team chartered with getting educated should be made to a wider company/logistics audience to display the knowledge that has been acquired and address initial

questions/concerns. Where possible, the purchase decision and deployment should have strong involvement with supervisors/team leaders and star employees to ensure widespread acceptance. The Bottom Line: Getting a solid understanding of voice technology (how it compares to other technologies, how it works, its benefits, applications, etc.), plus involving some of the people who will do the actual work in the decision and planning process, will provide a solid foundation that will significantly enhance the overall smoothness and success of the deployment.

KEY 2:

EVALUATE HOW VOICE FITS IN WITH YOUR OVERALL LOGISTICS/ DISTRIBUTION STRATEGY Any distribution technology should be viewed as a component of a broader logistics strategy. Those strategies, in turn, should be well aligned with the company’s overall goals and objectives. While ‘cost reduction’ in one form or another is usually near the top of most of these logistics strategies or goals, the value and opportunity for

other improvements (such as accuracy/ customer service) should also be recognised. More importantly, almost every company has a number of potential options for investment and operational improvements in their logistics network. So the question will be: Why should voice be at or near the top of that opportunity list? While every potential project has to have the right numbers in terms of Returns on Investment (RoI), those that can be tied to broader strategies and objectives will almost always have a better chance of making it through to approval and funding. For example, a voice project might be directly connected with efforts to increase productivity to react to growing challenges recruiting or keeping DC workers. Executives should be able to draw a line from a potential voice project back to broader logistics strategies & goals, and from there back to corporate strategies and objectives. The Bottom Line: Do not look at your voice project as an island, or think only in terms of RoI. Experience has shown time and time again that connecting such projects to broader strategies and objectives will help differentiate them from others vying for attention and funds.

KEY 3:

UNDERSTAND YOUR TECHNOLOGY/ INTEGRATION OPTIONS AND LIMITATIONS A new voice system will not live in a technology vacuum. Depending on the scope of your deployment, it is possible that the voice system will, at a minimum, integrate with a WMS. Across a network, that could possibly mean more than one WMS, and/ or even more than one enterprise system, even within a single facility. Before you get too far into the project, it is important to gain a solid understanding from your internal IT staff and/or vendors on the options for adding voice support in different

specific areas. While the good news is that many WMS vendors now have standard voice support, it is possible that they do not have native support for some voice vendors, or they do not support a specific DC process to which you would like to add voice. Legacy systems will almost never have existing voice support. So, the answer there is either to modify that system to add voice capabilities, or move some of the processing and logic to a separate voice-specific application. That’s where a really good technology partner comes into play. Knowing the options and trade-offs early on will clarify what the end solution will look like, and often keep the project team from going down some dead-ends in designing the solution. The Bottom Line: Understanding your options for voice integration and application support from the get-go will often help you avoid headaches and confusion later on.

KEY 4:

COMPLETE ‘AS IS/ TO BE’ PROCESS

MAPPING

This is another basic element of the deployment process that applies to the adoption of any change in technology—the problem is that too often companies delay this step until it is too late in the process. With the voice education achieved in Step 1, most companies should be able to do fairly detailed ‘As Is’ and ‘To Be’ process maps (built using a simple tool like Visio or even PowerPoint or a spreadsheet) before looking at different voice providers. This will serve to get all stakeholders and the project team members on the same page at the outset. The reality is that the specifics of the ‘As Is’ model are not as wellknown as many expect. This is especially true while dealing with exceptions. For example, what is the picker supposed to do if the product expected in the slot is not there? Very few companies have employees who

can fully describe the existing processes with all the exception routines strictly from memory. Further, the way work actually gets done might not be the way the process is currently documented. Even expert employees will often disagree about process steps. If the current system is using RF scanning, a key question becomes how closely you want to mimic the current process using voice, instead of scanning and looking at a screen. Or, do you want to use the potential change in technology to reinvent the process; for example, by implementing a ‘cluster-picking’ approach to ‘eaches’ picking? That information, coupled with a solid understanding of voice from the education phase, will help you to construct the ‘To Be’ process, including exception-handling always the most difficult areas to manage. While the ‘To Be’ process may change over time as new understandings are realised, completing a first pass at this step before detailed voice provider evaluations are started will separate the two steps and allow companies to compare vendors and solutions in reference to the ‘To Be’ model. The Bottom Line: The execution of any documented process tends to not match up with the real-world practice. Companies often want to jump right into vendor evaluation before doing the difficult next stage of process modeling for voice deployment, but doing that work upfront usually pays nice dividends as the process unfolds. Companies with the discipline to follow the documented procedures tend to get bigger returns.

KEY 5:

BUILD A SMART BUSINESS CASE

Interestingly, for savvy companies, price is not the greatest driver. The real story is what value they will receive for a given price, and how quickly their investment will be paid back through reduced operational costs. Even if the RoI from a voice deployment is

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Voice technology, continued

a slam-dunk, the RoI will need to be documented and accepted by the finance organisation in your company. Even if the RoI meets corporate thresholds for payback periods or hurdle rates, the investment in voice is also competing for allocation of available capital. A strong RoI that is attractive as a percentage may not be compelling in terms of absolute dollars versus alternative uses of capital and human resources. To build the business case for a distribution technology investment like voice, it is important to spell out projected RoI, RoI versus payback, time to value, and Total Cost of Ownership (TCO). Do not be afraid to engage voice providers in this process. They will be able to open the door for you to talk to others that have had success with voice implementations, and they can also provide insight into savings areas and ranges based on significant experience with voice applications that can enhance your business case development. We are never quite sure why companies often want to hide business case construction from voice providers; they can provide excellent resources and ideas. At this earlier stage, before the formal vendor selection process, you should open up your facility to a walkthrough and evaluation by one or several potential voice providers. A few hours on the DC floor, including general discussion of your pain points, goals, and operating environment should be enough to enable them to offer you additional support for business case development. The Bottom Line: Lack of rigour in business case development can delay or even, in some cases, kill potential voice projects. Usually, the problems are related to either time constraints or a lack of experience. Investing the time required to do the job right is critical, and getting some help from voice companies and/ or technology consultants with real voice experience will almost always improve your analysis.

42 • SMART LOGISTICS • JANUARY 2013

KEY 6:

CAREFULLY SELECT THE VOICE PROVIDER AND MAKE SURE OPERATIONS IS IN A LEAD POSITION As voice has become more ‘mainstream’, there can be some tendency to view the technology as having been commoditised, and therefore, cost becomes the dominant selection criteria. This is wrong. First, there are still important differences among providers not only generally, but certainly for the specifics of any given application/deployment. It takes effort to understand these differences—a factor which helps select the vendor that is right for each company. Sales channels can also be an issue. Are vendors competing for your business selling on a direct basis, or through systems integrator/reseller channels? There is nothing wrong about buying through resellers—an increasingly common way for voice systems to get to market—but this means that you need to evaluate both the reseller and the ‘OEM’ and how they work together. Second, while IT will naturally be involved in any technology-related project, too often an IT team member winds up leading the project, often because logistics managers committed full or part-time to the effort cannot make their commitments. IT is a critical support resource, but, like most areas, success will most strongly be delivered when operations leads the evaluation and overall project management. That structure should be set in concrete very early on as the project unfolds. It is generally also a good practice to let a few associates on the floor get involved in parts of the evaluation process, to ensure the actual users have some ‘voice’ in the selection. This will not only help build support from operators for the change in technologies (some of them were part of the process), but may identify some potential issues, say with a given vendor’s equipment, that may not have

been recognised by management. The Bottom Line: While voice is a ‘technology’, its evaluation should not be considered simply as a technology purchase. Voice is an excellent enabler for the operations team and should be treated as such. Often, significant project problems can be traced to vendors requiring extensive IT support, but not producing enough solid results from the effort to warrant the resource allocation.

KEY 7:

ASSIGN THE RIGHT INTERNAL

RESOURCES

It is critical that both executives and the committed employees are realistic about the effort that can be delivered. We recommend that the voice project manager report on the expected/actual levels of effort weekly, with escalation of the issue and schedule changes as that analysis suggests. The worst scenario is when management and others believe someone is working the committed 50% of time, whereas in reality he or she is falling far short of that plan. It is also critical that companies take the numbers developed in the approved business case directly into the actual project. The project kick-off meeting after the system is approved and the contract with a voice vendor is signed should start with the metrics that will define project success, and those numbers should be kept front and centre for the duration of the project. The Bottom Line: The time to actually implement a voice solution tends to be very quick and not to be an extended ‘WMS’-type installation process. As a result, those dedicated resources are usually ‘away’ from their normal responsibilities only for a short period of time, but their strong upfront planning presence is important. Ensuring adequate committed project resource management and clearly defining what results will signify project success are two frequently overlooked actions in voice and other distribution technology projects that have a big impact on the project results.

KEY 8:

DETERMINE WHICH DEPLOYMENT MODEL (STANDARD OR ACCELERATED) WORKS BEST FOR YOU The good news about voice technology is that—when it makes sense—it can be implemented quickly, sometimes in a matter of just a few weeks. This is a function of several factors, including the professional expertise of technology partners; the flexibility of options to meet unique customer needs; the intuitive nature of, and flexibility for, expansion of the voice system; how fast the system can be ‘trained’ for individual operators; and more. Is your organisation and operation ready for this type of rapid deployment? Do not think of this as a technology install…it is a process reengineering effort. If you have done the types of upfront work recommended (education, process mapping, etc.), you may indeed be ready, enabling your company to rapidly achieve time to value. This approach is not for everyone. A company should only go only as fast as what makes sense for the business. You do not want to just add ‘technology’ here. Ensuring that effective process, internal communication, coaching & training, and other components are in place is critically important. The Bottom Line: Rapid deployments of voice can start delivering savings in just a matter of a few weeks and transform some areas of the DC almost overnight, but companies need to carefully assess whether their systems, culture, management resources and more are ready for this approach, or whether a more measured approach makes better sense. Spending more time upfront to fully assess the operating climate so that there can be some reengineering of processes may be a concern, but experience shows that stronger results and a faster RoI are the typical end result.

KEY 9:

ROADMAP FOR IMPLEMENTATION

In some cases, the initial deployment

is the one and only potential use of voice technology within a given facility or across your network (for instance, you have only one DC). More often, either officially as part of the initial buy and cost justification, or informally, as a likely path for future voice rollouts, there can be a reasonably clear expectation relative to adding additional workers into the targeted process (say picking) in your original facility, voice-enabling other areas of that DC, and voice-enabling the core application in additional DCs. The mistake companies often make, especially when the path forward has not yet been formally approved/ funded, is not laying out this roadmap in a detailed, time-phased way. Failure to detail actual or potential rollouts within or across facilities can delay those next-stage deployments of voice. Why? Because voice proponents will often have to ‘resell’ additional investments. Conversely, if there is a strong sense that the first voice deployment will be a success, then building a vision from the start about how that voice success can be extended over time in a ‘Master Plan’ style can gain consensus on that vision from the start of the first project. As a result, the project often also gains greater visibility and support as it moves the initial voice deployment from appearing like an isolated project to one that has broader strategic and possibly even network-wide ramifications both across the US and even to other countries around the world. Also, without immediately committing to additional voice terminals/systems, a company may be able to gain favourable ‘option’ pricing for additional systems down the road, if this option is anticipated at the initial contracting stage. Do not give short-shrift to planning for the human side of the voice implementation— make sure there will be adequate and ongoing training and coaching. And remember, you never can overcommunicate—before, during and

after the deployment. These two issues surface time and again as being critical factors that often get overlooked. The Bottom Line: Creating a time-phased Master Plan for voice deployment across applications and facilities at the time of initial deployment will help you consistently roll out voice technology more rapidly.

KEY 10:

MANAGE THE PROJECT

Being ‘on-time’ and ‘on-budget’ is important—but just as important is being ‘on-results’. Too often, in the heat of the actual voice system deployment, the focus becomes almost solely being on-time and on budget, and the on-results aspect is semi-forgotten. This can sometimes occur because the technical staff deployed to implement the system was not very involved in the original operational vision and the business case development, so frankly, the implementation team members have that narrow orientation. A business manager needs to stay in charge of the project, rather than deferring it to IT staff responsible for the technical aspects of the implementation. This manager needs to say focussed on the operational metrics used to justify the project, which define success just as much as the meeting schedule and staying on budget. Most seasoned voice customers would tell you that they would support a slight schedule delay a hundred times over if it helped ensure they could meet and exceed the ‘on-results’ number. But here too often the on-results aspect is not the key focus, and, in reality, that usually matters far more in the end than schedule or budget. The Bottom Line: Do not sacrifice operational results in the name of schedule attainment or project costs —and this directive needs to be communicated at the start of the project, not at the point at which the schedule or budget is in jeopardy. Courtesy: Supply Chain Digest

JANUARY 2013 • SMART LOGISTICS • 43

STRATEGY OPERATIONAL EXCELLENCE IN FACILITIES’ MANAGEMENT

Creating a culture of discipline Operational excellence is a multi-year journey, which needs a long-term vision. It requires a solid, well-planned foundation and an unﬂinching resolve to create a culture of excellence and discipline. In more complex operations or in multi-site networks, building such a culture requires a longer implementation phase. It is also important to understand that operations excellence is not a static phase, it relates to an environment where there is ongoing focus through structured processes and tools for driving continuous improvement. Another related point is that if a project is implemented with a ‘deliver and move out’ approach, it is bound to fail. Success is earmarked by collaboration, ownership, and culture change. This type of change requires executive level sponsorship. Organisations which keep these basic tenets in mind are likely to ﬁnd success in this journey. organisation faces, identify the stage of WHAT sets a world-class logistics process maturity that the organisation facility apart from an average one is is at, benchmark operations against the excellence in operations in the the best in class and then identify the areas of processes, people, technology opportunity for improvement. and information. Organisations are striving to attain matured capabilities in their operations for accurately IMPLEMENTATION PHASES OF identifying stakeholder and business AN OPERATIONAL EXCELLENCE needs, defining critical processes PROGRAMME that complement these requirements, An Operational Excellence Programme developing plans that address the comprises the following phases: overall needs and implementing these plans on ground to achieve successful & sustainable results. Quantifiable benefits such as maximum space utilisation, throughput per man hour, lead time reduction and cost per piece handled are some of the factors that companies are targeting for easy wins. The key components of an Operational Excellence Programme are shown in Figure 1. There is a diagnostic phase Figure 1: Key components of operational excellence to identify challenges that the programme

44 • SMART LOGISTICS • JANUARY 2013

• As-Is Assessment: This phase includes site visit & data collection and assessment of current operations • Gathering Best Practices and Benchmarks: This includes the formulation of maturity models and gathering metrics and benchmarks • Conducting Gap Analysis: The gaps are identified on the basis of the maturity level and benchmark analysis • Building a Roadmap: Identifying the improvement opportunity and building a business case

MATURITY MODELS The maturity models provide descriptions of typical supply chain practices at varying levels of maturity, viz., basic, developing and world class. The maturity models are typically used for: • Describing best in class or industry leading supply chain practices • Comparing the current state of client practices with the average

performance of their peer group and industry-leading practices

CONSTITUENTS OF AN OPERATIONAL EXCELLENCE PROGRAMME An Operational Excellence Programme aims at putting the right processes in place; increasing the productivity of people, equipment & space and ensuring that the KPI related to the process & productivity are tracked. The start point of any Operational Excellence Programme is having the right processes in place. The right processes are essential to have consistency in operations, meet all documentary requirements and have improved efficiency. This can lead to an error-free state and can also ensure increased traceability of the products within the DC. The journey towards right processes begins with mapping all the present processes, identifying improvement opportunities leading to increased efficiencies, and, once the processes are finalised, developing the Standard Operating Procedures (SOPs) for all processes. SOPs help reduce system variation, which is the enemy of production efficiency and quality control. SOPs also act as reference documents for all trainings to be carried out for employees on their job roles. Having SOPs can encourage regular evaluation of work activity and continuous improvements in how things are done. The next step in the journey towards excellence is to improve productivity of people, equipment and space. Once the processes and productivity improvement initiatives are in place, the next step is to set the standards of performance (Key Performance Indicators, KPIs) and track the performance on each KPI to check if the standards set are being met. Some of the key operational performance indicators are illustrated in Table 1. It is equally important to meet the legal requirements, ensure safety of staff and deliver the right quality of

Training staff is essential to develop a culture of excellence. Training helps in both increasing compliance to SOPs as well as enhancing productivity. It is essential to structure the right training programmes and deliver these periodically to all the staff concerned. product. An Operational Excellence Programme also needs to address all these requirements.

KEY STEPS IN THE JOURNEY Audit programme and management by KPI Operations audit and management by KPI go hand in hand. The objectives of these are to evaluate the methods and facilities of an operation and manage the operations based on findings. The operational benchmarks are defined before the fact-finding exercise begins. The benchmarks relate to order Turnaround Time (TAT), safety & security of employees, customer service, costs, etc. The equipment, facility and processes are then evaluated against

the target benchmarks. Based on the findings, steps are taken to increase compliance on safety-related issues, increase productivity, reduce costs and improve customer service. The audit also helps in checking the compliance to the SOPs. The need for equipment changes, facility-related changes or new information systems are also highlighted by an audit programme. Productivity improvement Following are the productivity improvement initiatives that need to be undertaken to reduce costs and improve customer service levels: Storage In a warehouse, the maximum space utilised is for storage of finished goods, which necessitates the effective utilisation of storage space. There is a need to have an organised layout for effective utilisation of volume of building and to avoid accidents. The transition from simple block stacking of goods to other forms of storage like drive in/drive through racking, satellite storage, and adjustable pallet racking or powered mobile racking can be considered to have

Table 1: Key operational performance indicators KPI Workforce Productivity Warehouse Cycle Time Inventory Accuracy Dock-to-Stock Shipping Accuracy

Space Utilisation Safety Overtime

Employee Turnover

Definition The number of units processed per man hour The time it takes for an order to be ready to ship after the order has been received A storage location having the correct part number and having the correct quantity for that part number with no exceptions The time differential between the time the receipt is captured in the system to the time the put-away is captured in the system A percentage of incorrect shipment divided by the total amount of shipment Accuracy is defined as shipping: 1) The correct item 2) The correct quantity 3) To the correct destination 4) The correct paperwork, labels, etc. The total capacity utilised divided by the total facility capacity. Capacity can be measured in units of pallets, cases, locations, etc. The total number of monthly OSHA recordable events per 100 employees A percentage of the total number of hours worked minus the standard number of hours in that work period divided by the standard number of hours in that work period The total number of employee terminations (voluntary or not voluntary) divided by the average employee headcount for that period

JANUARY 2013 â&#x20AC;˘ SMART LOGISTICS â&#x20AC;˘ 45

Operational excellence in facilities’ management, continued

An Operational Excellence Programme aims at putting the right processes in place; increasing the productivity of people, equipment & space; and ensuring that the KPI related to the process & productivity are tracked.

etc. Rough activity sampling on those present (approximately 10–15 people in each study) needs to be carried out. Every half-minute for 10 minutes, there is a need to observe if the staff is actively working or is sitting idle; the results need to be recorded. This needs to be done a few times over the day to determine the percentage of idle time and broad potential for labour saving. Also, the general efficiency levels (i.e., the rate of work when working) need to be observed. The key measures for equipment utilisation include speed of movement and operation versus potential speed; actual lift heights versus equipment potential (under safe operating procedures); load carrying capability versus actual loads carried, etc. Handling equipment carrying much smaller loads than they are capable of carrying need to be identified and changes should be made to the carrying patterns accordingly. Excessive long distances travelled

(e.g., forklift trucks are designed to handle goods in the vertical plane and not for excessive travel in the horizontal plane) need to be reduced on the basis of correct picking strategies. Inventory management effectiveness and stock control systems The aim is to carry an appropriate amount of inventory—in the various categories (ABC)—to meet the given service levels at the lowest cost and to have appropriate control systems in place that would provide this management control. It needs to be ensured that inventory levels are kept at target levels and are not ‘ballooning’ in aggregate. The maximum/minimum and safety stock levels need to be re-examined on an on-going basis to determine if they can be adjusted downwards and if the service levels can be maintained or improved with the same or less inventory. The key measures include stock levels actual maximum quantities versus standard, stock outs, stockholding total value of stock held versus target levels for the various categories of stock (ABC), stock turns versus target stock turns, obsolescent stockholding levels and values—systems for identifying and reducing obsolescent stock, among others. Training Training staff is essential to develop a culture of excellence. Training helps in both increasing compliance to SOPs as well as enhancing productivity. It is essential to structure the right training programmes and deliver these periodically to all the staff concerned. There can be internal and outsourced training programmes.

more utilisation of the height of the building, improved material handling and reduced TAT. Order picking In order picking, there is a need to move from random located storage to modified popularity storage. The Stock Keeping Units (SKUs) must be sorted as fast moving SKUs and slow moving SKUs. It must also be ensured that the majority of SKUs to be picked in one operation should be located in the ‘golden zone,’ i.e., the area between the workers’ knees and shoulders for ease and efficiency of operations. Batch picking in place of order picking must be implemented to improve the efficiency of workers. Batch picking reduces the number of times the worker visits the SKU location, thus increasing productivity. Zone picking is an alternative to batch picking, wherein the warehouse is divided into multiple zones and workers are assigned to pick from one zone only. Using zone picking, orders are either picked and passed from zone to zone for fulfilment or consolidated at a point before shipping. Thus, using an appropriate method that There is a need to have an organised layout for effective suits the needs, one can improve the utilisation of volume of building and to avoid accidents. efficiency of order picking and the warehouse itself in meeting customer demands. Labour and equipment utilisation The key measures of labour utilisation include efficiency (picking rates, order picking, there is a need to move from Random Located storage to Modiﬁed etc.), absenteeism/time In Popularity Storage. The Stock Keeping Uints (SKUs) must be sorted as fast moving keeping, overtime levels, SKUs and slow moving SKUs.

46 • SMART LOGISTICS • JANUARY 2013

Abhik Chopra, Sr Consultant, ThinkLink Supply Chain Services Email: abhik.chopra@ thinklink-scs.com

TIPS & TRICKS SUPPLY CHAIN DRIVERS

Supply Chain Resolutions For The

New Year

New Year’s resolutions are easier to make when you know they will save you time and money. To that end, here are ﬁve areas of your supply chain you should take a fresh look at in 2013…

WAREHOUSE MANAGEMENT SYSTEM Is it time for an upgrade or replacement? Consider whether your current system is strengthening or hindering your ability to execute business strategies. Your Warehouse Management System (WMS) should free up your IT department to focus on customer-facing applications, allow for maximum configuration to your unique business practices and adapt to changing market demands & regulatory requirements. You may also want to examine how well your WMS integrates with other software—it should serve as the hub of your warehouse and seamlessly exchange data with other systems, like your ERP.

PERFORMANCE MANAGEMENT You are collecting data left and right, but do you know what to do with it? A performance management system will turn those numbers into graphical, actionable information to help you drill down for root cause analysis and ultimately make better operational decisions. The right system should produce real-time, comparative dashboards based on best practice metrics like inbound, outbound and capacity, while also allowing you to customise it for your own companyspecific performance indicators.

MOVING TO THE CLOUD Cloud technology allows you to access the most up-to-date system through a secure web portal, while the vendor hosts the actual software and hardware infrastructure offsite. This arrangement can save you time, expense and labour by offloading the software and hardware maintenance associated with maintaining on-premise software. Specifically, your IT department can spend less time maintaining a system or learning every new technology stack and application needed to run the company, and more time with the customer-facing services that differentiate your business and add to the bottom line. And as we saw most recently with Hurricane Sandy, companies that have offsite, cloud-based systems may avoid catastrophic data loss if they are hit by flooding or a hurricane.

VOICE TECHNOLOGY This can be a key component for increasing efficiency and productivity in the warehouse by improving picking speed and accuracy. Voice solutions can include distribution voice-enabled workflow for areas such as picking, receiving and replenishment, as well as for manufacturing processes such as kitting, assembly and inspection. If your company is searching for ways to increase efficiency even more, voice technology may be the next step.

HARDWARE Ensure that you are taking full advantage of the latest hardware technology. It is easy to get comfortable with older models and devices, but examining the ruggedness, scanning tolerance, speed and ability to integrate with other tools (like voice) may lead to changes that improve accuracy and productivity. Many WMS providers can recommend the best solutions for your business and current system compatibility, and even locate, price and order the hardware for you. Dan Radunz, VP – Product Strategy & Development, HighJump Software

48 • SMART LOGISTICS • JANUARY 2013

TRADE SHOW TRACKER EVENT LIST

NATIONAL

ABROAD

23-28 FEBRUARY 2013

8-11 JANUARY 2013

30-31 JANUARY 2013

PRINTPACK INDIA 2013 Focus: Warehousing & Material Handling Equipment Where: India Expo Center & Mart, Greater Noida, India Tel: 0120 4292274 Fax: 0120 2400109 E-mail: admin@ipama.org

2013 INTERNATIONAL CES Focus: Logistics Software Where: Las Vegas, Nevada, USA Tel: +1 301 694 5243 E-mail: internationalreg@CE.org

7th PHILIPPINE PORTS & SHIPPING 2013 Focus: Ports & Shipping Where: The Peninsula Manila, Manila, Philippines Tel: +60 87 426 022 Fax: +60 87 426 223 E-mail: enquiries@transportevents.com

ABROAD 18–21 MARCH 2013

19–22 MARCH 2013

ANNUAL NATIONAL LOGISTICS CONFERENCE & EXHIBITION Focus: Showcasing logistics for medium and small companies, motor vehicles for goods transport Where: Hyatt Regency Miami, US Tel: (305) 358-1234 Fax: (703)247-2570 E-mail: amccloskey@ndia.org

CeMat SOUTH AMERICA Focus: International Intralogistics and Supply Chain Forum Where: Hannover Fairs International GmbH, Hannover, Germany Tel: +49 511 89-32113 Fax: +49 511 89-39681 E-mail: hmcwb@hanover.com.br

INTERNATIONAL MATERIALS HANDLING EXHIBITION 2013 (IMHX) (TRADE) Focus: Latest materials handling and logistics innovations Where: National Exhibition Centre, Birmingham, UK Tel: +44 (0) 121 780 4141 Fax: +44 (0) 121 767 3700 E-mail: info@necgroup.co.uk

NATIONAL

ABROAD

4-5 APRIL 2013

16-18 APRIL 2013

21-24 APRIL 2013

APICS ASIA SUPPLY CHAIN & OPERATIONS 2013 Focus: Move Beyond Better, Faster, Cheaper Where: Hyatt Regency, Mumbai Tel: +1-773-867-1777 Email: jstults@apics.org

COOL LOGISTICS AFRICA Focus: Perishable Logistics Where: Vineyard Hotel & Spa, Cape Town Tel: +44 20 8279 9403 Fax: +44 20 8279 9405 Website: http://www.coollogisticsafrica.com/

NASSTRAC LOGISTICS CONFERENCE & EXPO Focus: Transport and logistics Where: Rosen Shingle Creek, Orlando, USA Tel: +1-615-6961870 Email: register@nasstrac.org

INDORE January 11-14, 2013

AURANGABAD February 1-4, 2013 RUDRAPUR February 23-26, 2013

HYDERABAD May 31-June 3, 2013

Tel: 022-30034651 • E-mail: engexpo@network18publishing.com • Web: www.engg-expo.com

JANUARY 2013 • SMART LOGISTICS • 49

EVENT REPORT ENGINEERING EXPO LUDHIANA 2012

LUDHIANA December 21-24, 2012 GLADA Ground

Exploring a horizon of opportunities Generating tremendous response from the industry, Engineering Expo Ludhiana has proved to be a game changer for the machine tools industry in the region. Leveraging the vast potential and possibilities of the state, the Expo provided the perfect platform for accelerating business. Held during December 21–24, 2012, the Expo witnessed a wide range of business possibilities being unfolded. The four-day event received a robust response from the industry at large. A report… ANWESH KOLEY

AROUND Independence in 1947, Ludhiana had a handful of machine tools units and some units that manufactured hosiery machines. Over time, units producing bicycle and auto parts entered the scene. Eventually, there came about the need for machine tools to meet the growing demands for mother machines in the country. That is when entrepreneurs established machine tools producing units in Ludhiana. Today, Ludhiana has evolved to become one of the major producers of mother machinery in India. Led by manufacturing biggies, Ludhiana is fast emerging as a leading investment destination in the northern belt of our country. Capitalising on this vast growth potential, the Ludhiana edition of Engineering Expo organised by Network 18 Publishing, emerged as an eye opener. Inaugurated amid incredible industry response, the maiden edition of Engineering Expo Ludhiana and Punjab Machine Tools Show (PUMTOS) stood tall with potential on the very first day. The Expo not only highlighted the potential of regions like Punjab in northern India but also made it evident to manufacturers how they could have easy access to this manufacturers-friendly zone. Held at GLADA Ground, Ludhiana, during 21–24 December, 2012, the event generated commendable enthusiasm among exhibitors. Visitors

50 • SMART LOGISTICS • JANUARY 2013

L-R: Pravin Bansal, BJP – District Chief, Punjab; Hakam Singh Giaspura, Ex-Mayor of Ludhiana; Deepak Ballani, National Programme Ofﬁcer, UNIDO-ICAMT; Mahendra Singh Dhakad, Programme Director, UNIDO-ICAMT; Shri Harcharan Singh Golwaria, Mayor of Ludhiana; Sandeep Khosla, CEO, Network 18 Publishing; Shri Anil Joshi, Hon’ble Industry Minister, Govt of Punjab; Sukhdial Singh, President, CLMTM

too were excited about the prospects of a show of such a magnitude being held in the developing industrial region of Ludhiana.

A GRAND OPENING Positioned to add positivities to the manufacturing and machine tools industry in and around Ludhiana, the Expo saw business deals worth `10 crore in the first few hours of the trade exposition and an order book outlook looking potent with big business deals for the exhibitors, thus benchmarking itself with the best in class trade shows. Gracing the occasion and boosting the confidence of the industry, Hon’ble Minister of State for Industries and Commerce Shri Anil Joshi insisted, “We need a foolproof

plan to promote the machine tools industry in Ludhiana. The Ministry is willing to extend all possible support to the machine tools manufacturers to set up business. We have the right pool of manpower available, but we need exposure so that our machinery is accepted not only in India, but across the globe.” The inaugural function was also attended by Ludhiana Mayor Shri Harcharan Singh Golwaria. Addressing the audience, he said, “A cursory look at the halls in the Expo clearly showed that the machinery available in Ludhiana can benchmark global quality. However, we are still heavily dependent on importing machinery. We need to reduce this dependence by spreading awareness

about our machinery to the world.” The other dignitaries present at the inauguration included prominent industry stalwarts like SSS Dhillon, Director, MSME Development Institute; Mahesh Khanna, GM, District Industries Center; Mahendra Singh Dhakad, Programme Director, United Nations Industrial Development Organization-International Center for the Advancement of Manufacturing Technology (UNIDO-ICAMT); Paramjit Singh, GM, Institute of Machine Tool Technology; Simarjeet Singh Bains, MLA; Deepak Ballani, National Programme Officer, UNIDO-ICAMT; Rajesh Jain, Sr Manager, National Small Industries Corporation (NSIC); Sukhdial Singh, President, Consortium of Ludhiana Machine Tools Manufacturers (CLMTM); Manjit Singh Matharoo, CEO, Matharoo & Matharoo Inc & General Secretary, CLMTM and Sandeep Khosla, CEO, Network 18 Publishing.

BOOSTING INDUSTRY SENTIMENTS While Ludhiana has seen a flurry of enthusiastic entrepreneurs and investments, there are areas that still need attention. Elaborating further, Matharoo added, “Of late, the machine tools industry in Ludhiana is suffering due to lack of exposure and a platform to demonstrate its credentials. However, with an event like the Engineering Expo, I am confident that we will successfully regain our lost ground.” The machine tools fraternity unanimously accepted that there was need for a platform, which can help the region showcase its industrial might. To this, Dhillon averred, “We need to organise similar events frequently in Ludhiana in order to bring our facilities and service providers together and discuss the requisite improvements for this sector in the region.”

Highlights of this edition 250 exhibitors pan India Spread over more than

12,000 sqm 26,135 business visitors visited across India Business transacted worth

`195 crore* 16,188 business leads generated* 20,000+ products displayed from different industries More than 3,50,000 kg machinery moved in for display * Feedback received from exhibitors

the variety of machinery on display and found the event to be a first-inclass arena to interact with industry players. Amit Takkar, Director, Takkar Industries, exclaimed, “I visited this Expo for the first time and I am pleased with the arrangements. The variety of machinery on display was commendable. An event of this magnitude has taken place in Ludhiana for the first time; the local industry should take full advantage of this opportunity.” Another visitor, Abhishek Handa, Business Development Manager, Radeecal Communications, observed, “The Expo is appealing at first sight. Moreover, the companies exhibiting here are big names from the industry. I am quite satisfied with the overall arrangements at the Expo.” Pankaj Jain, Manager, Rexam Bright Solutions, another visitor, also shared similar sentiments. He stated, “An event of this stature and scale is taking place for the first time in Ludhiana and I am pleased to see the quality of machinery on display. The choice of venue is an important factor for such events and GLADA Grounds is a perfect location to attract a large number of visitors. Such events should take place more often in Ludhiana.”

AN INNOVATIVE PLATFORM FOR BUSINESS POSSIBILITIES

AN EVENT TO RECKON WITH

Visitors at the show were amazed by

The exhibition halls saw a large number

of visitors of which many expressed their keenness to exhibit in the Expo next year. Also, the exhibitors received considerable enquiries for their machines and were highly optimistic about generating substantial business. Substantiating the same, CS Sidhu, Director – Technical, GR Cranes & Elevators, said, “We have received large number of enquiries at this event and expect most of these to convert into business. We have already sold machines to many customers.” Another exhibitor, Robin Basant, Managing Partner, Basant Mechanicals, expressed, “The Expo plays a crucial role not only in business development but also in increasing profitability. Engineering Expo is considered to be an ideal platform for companies to foster growth through reach and awareness to their right target audience. Presented by Network 18 Publishing, Engineering Expo proves to be a perfect combination of a vast range of exhibitors, spacious venue, state-of-theart amenities and humungous visitor turnout, which is crucial for exhibitors.” Didarjit Singh, Proprietor, Karam Chucks, who also exhibited at the Expo, said, “Personally, my expectations from Engineering Expo at Ludhiana were very high and this Expo has lived up to my expectations. It has not only given us vast exposure, but also given us the confidence to launch some of our new products so that people who are not able to attend international shows, can find internal quality products in India.” Matharoo aptly concluded, “Engineering Expo is a great platform to showcase the industrial talent residing in smaller towns and cities of India. A place like Ludhiana has the skills to attract international manufacturers to India, and such Expos do a commendable job in assisting this.” The next edition of the Engineering Expo will be held in Indore during January 11–14, 2013. anwesh.koley@network18publishing.com

JANUARY 2013 • SMART LOGISTICS • 51

EVENT REPORT PANEL DISCUSSION: LUDHIANA

Is Punjab Ready To Reclaim Its Manufacturing Might? This is the question that got the panelists and audiences thinking. The electrifying panel discussion, which was attended by over 200 prominent industry players, highlighted not only the progress and prospects of Ludhiana but also focussed on the problems plaguing the region’s industrial development. Held on December 14, 2012, the panel discussion was aimed at ﬁnding ways to make Ludhiana a brand beyond hosiery and woolens. ANWESH KOLEY

PEOPLE define the place and the prospects. Going by this logic, Ludhiana is brimming with prospects and a great future. A panel discussion on the topic ‘Is Punjab Ready To Reclaim Its Manufacturing Might?’ was organised by Network 18 Publishing along with its partners United Nations Industrial Development OrganisationInternational Centre for Advancement of Manufacturing Technology (UNIDO-ICAMT); Consortium of Ludhiana Machine Tools Manufacturers (CLMTM); National Small Industries Corporation (NSIC) and Association of Ludhiana Machine Tool Industries (ALMTI). Held at Park Plaza on December 14, 2012, this engaging panel discussion was attended by over 200 top industry personalities from in and around Ludhiana.

ISSUED DEBATED The panel discussion brought forth the burning issues that are creating hurdles in the industrial progress of Ludhiana. During the discussion, Matharoo made a very valid point when he said, “The machine tools industry is the backbone of the manufacturing sector and Ludhiana must make its presence

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The eminent list of panelists comprised (L-R) Gaurav Swarup, Director, Marshall Machines Pvt Ltd; Manjit Singh Matharoo, CEO, Matharoo & Matharoo Inc., General Secretary, Consortium of Ludhiana Machine Tools Manufacturers; Shailesh Sheth, Corporate Secretary Advisor & Senior National Consultant, UNIDO; SC Ralhan, Federation of Indian Export Organisations (FIEO) Convenor of Punjab; Mahendra Singh Dhakad, Programme Director, UNIDO-ICAMT; and VR Dahake, Scientist in-charge, CSIR-CMERI

felt in this sector globally. Till date, Ludhiana has provided an excellent environ for doing business, but the region has not received the attention it deserves. We require low-cost solutions for the machinery sector or else, we shall lose out to the world. Being the manufacturing guru and a mentor to many, Shailesh Sheth impressed that amid lacuna there is sufficient reason to be optimistic. He insisted, “Ludhiana has machine tools manufacturers and the market which uses these machines. We need to provide a platform for the two to interact and create awareness about various quality requirements. The entrepreneurial skill available in the region is well acknowledged by all; this has enabled Ludhiana to never run out of innovative minds. However, entrepreneurs must give up their microcentric approach and think big; beyond the region first and then, globally.” Fortunately, Ludhiana and Rajkot are key industrial clusters, which

have developed machines that are not manufactured anywhere in the country. To this, Swarup added, “We have the technical expertise and the minds to go a long way forward.” Talking about branding—a key requirement to have market presence—Matharoo averred, “We have to create brand awareness about the high-quality products we offer. We cannot expect the world to come to us; we have to tell them that we have arrived. ‘Made in Ludhiana’ should now be a brand beyond hosiery and woolens.” In his address, Dhakad stated, “Efforts should be made by the industries as well as the government to develop Punjab as the hub for global supply chain. Also, the industries need to focus on sustainable and inclusive growth avenues as it can define new horizons for their further development.” Moderated by Archana TiwariNayudu, Executive Editor, Network 18 Publishing, the panel discussion was followed by a question & answer session.

ENGINEERING EXPO INDORE 2013 EVENT PREVIEW

INDORE January 11-14, 2013 Labhganga Convention Center

Tapping India’s central vantage point Staying true to its core competence as one of India’s leading auto clusters, Indore spruces up its industrial portfolio as a spree of investments from the IT and pharmaceutical industries come trickling in. Mirroring the growth of this centrally positioned city will be the ﬁfth edition of Engineering Expo Indore, organised by Network18 Publishing. Setting the tone for acquiring business prospects, the Expo will bring together exhibitors who will showcase their latest products and services. Scheduled to be held during January 11–14, 2013, Engineering Expo Indore aspires to play the role of a catalyst in the city’s ﬂedgling growth. SWETA M NAIR

ONE of Madhya Pradesh’s largest cities known for its palatial splendour, Indore, in the recent decade, has come of its industrial age. The city of Indore, amid its royal structures, today voices its determination in shaping its future towards industrial excellence. According to a recent study published by Cushman & Wakefield, Indore is one of the top 10 emerging cities of India—ideal for long-term business investments across industries. The city’s geographic positioning, population demographics, development in infrastructure, current economic growth and governmental support contribute towards its resolute positive outlook.

INDUSTRIAL TRANQUILITY Indore has undergone rapid transition and vast development in almost every sector of business. As per published reports, in recent times, the per capita income of the state has doubled. According to Manoj Pugalia, Proprietor, Oswal Rubber Industries, “Owing to the city’s systematic and organised planning, many companies find it fairly convenient to set up base here. Additionally, industries here are not vexed by the otherwise rampant problems of labour and power.” Ranging from automobile to pharmaceutical and from software to retail, the burgeoning city, on an average, receives a bulk of its trade

from small, medium and large scale manufacturing & service industries. Indore’s major surrounding industrial belts are present at Pithampur, Sanwer and Dewas. The city’s automobile hub is situated in Pithampur, which is a welldeveloped industrial area. Companies such as Eicher Motors Ltd, Cummins India Ltd, Mahle Engine Components (I) Pvt Ltd, Mahindra Two Wheelers Ltd and Bridgestone Tyre Ltd, among others, have set up plants in this area. Additionally, Cipla Ltd, Indorama Synthetics (I) Ltd, Piramal Healthcare and Glenmark, among others, are also present in Pithampur. Home to industries such as textiles, chemical processing, food processing and distilleries, the industrial belt includes an industrial Special Economic Zone (SEZ) as well. Other upcoming sprawling industrial belts

include Govindpura, Manideep and Pologround. Elaborating further, Kishore Bundela, Director, Protec Aqua Solution Pvt Ltd, informs, “Formerly, the region was famous for its auto cluster. But now, pharmaceutical and IT companies are also commencing operations in Indore. One major advantage of being situated here is that all major Indian cities are equidistant from Indore.”

Glimpses of previous edition

Highlights of this edition

203+ exhibitors 9,829+ visitors 5,000+ products displayed `45 crore business generated 4,800 sq m exhibition area 1,10,000 kg machinery moved

45+ delegations from different companies attended the Expo

ATTRACTING INVESTOR INTEREST Owing to its sheer industrial potential, Indore, in October, played host to the Global Investors Summit 2012. In the state’s bid to augment overall development, a series of meets were facilitated so as to attract investor interest. With the underlined support of better infrastructure and strong government backing, many international investors are gradually

225+ participants expected 12,000+ business visitors expected Business transactions worth `55 crore expected 7,000+ products on display Spread over an area of more than 5,500 sq m Showcasing more than 28 diverse industry categories

JANUARY 2013 • SMART LOGISTICS • 53

Engineering Expo Indore 2013, continued

entering the city. In relation to this event, Omprakash Gupta, President, Madhya Pradesh Electric Merchants and Contractors Association (MPEMCA), says, “Indore is the business capital of Madhya Pradesh. It can be noted that nearly 80% of Madhya Pradesh’s electrical business is concentrated in Indore. After the summit, the central state of India is looking for major investments.” “By providing a platform for investments from major players in India and abroad, I believe that Engineering Expo will be the next step for this revolution. MPEMCA would like all major companies in electrical and electronics to showcase their products and technology in the Expo. With Network 18 Publishing’s experienced organisational skills, we are looking forward to the integration of new styles and services in this show,” Gupta adds. Coined as the ‘State of Opportunities’, Madhya Pradesh’s investor-friendly ambience and presence of big industries catering to different needs is shaping a positive future. Commenting on the same, Rajesh Godse, Proprietor, Reliable Terrestrials, avers, “Availability of land & labour and a stable government are some of the factors that are contributing towards Indore’s success as an ideal investment destination. Moreover, NTPC-run Vindhyachal project in Madhya Pradesh is expected to increase its capacity by 2013, which will further foster industrial development.”

IN STORE FOR 2013 Nearly 60 members along with their parent companies will participate in the Expo. In the MPEMCA pavilion, products related to industrial & domestic electricals, electronics, industrial automation, specialised automation products, auto industries products, panel accessories, submersible and mono block pumps, wires & cables, HT line material &

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NEW ATTRACTIONS IN THIS EDITION • Panel discussion aims at providing a roadmap to infuse growth in the region • Institutional Buyer Involvement Plan to attract delegations from large corporate and major institutions • Improvised visitor profiling —profile, scan, filter and bring in visitors as per exhibitors’ requirements • Providing business networking support to exhibitors by leveraging Network 18 Publishing’s industry connect • Credit rating facilities for the benefit of exhibitors • Providing complete travel solutions for exhibitors • Offering logistics services to ensure smooth cargo handling, custom clearing, transport compliance, etc. switchgears will be put on display, reveals Gupta. The Expo’s rich legacy in helping businesses connect has, so far, conveyed the exhibition to many Indian cities. Sharing his views on the continued success of Engineering Expo, Sandeep Khosla, CEO, Network 18 Publishing, says, “After 10 successful years of service to the industry, Engineering Expo today has established itself as India’s largest multi-location trade show on manufacturing. The Expo is a preferred destination for small and medium enterprises as well as manufacturing & engineering organisations to further their growth and that of the industry at large. For the 2012–13 season, we have eight editions spread across an equal number of locations of a rising India. Keeping our esteemed exhibitors and valued customers in mind, we have made elaborate provisions to offer a never before experience. These, we reckon, will add substantial traction to the industrial growth of the nation.”

The exhibitor’s category at the Expo will consist of companies representing machine tools & accessories, hydraulics and pneumatics, light & medium industries, electrical and electronics, material handling equipment, etc. Expounding further, Yogesh Mantri, Proprietor, Automation & General Electric Co, states, “This is the second time that our company will be participating in Engineering Expo. Exhibiting here allows us to gauge market demands and customer needs. Moreover, it is a good internal exercise for the industry as well. The platform, in a way, facilitates business for customers, as exhibitors belonging to different segments showcase products under one roof. For the Indore edition, our exhibits would mainly consist of LED lighting systems, special cables for solar generation, CNC machine retro fittings, adjusting cable range, switchgear, Schneider universal enclosure, etc.” For many exhibitors, Engineering Expo is an energising outlet for gaining new customers as it is an ideal platform that helps them grasp market trends and innovations. Sharing similar sentiments, Bundela states, “The Expo’s byproducts revolve around creating awareness, brand building and generating a good response.” Having participated in the previous editions of Engineering Expo, Godse exclaims, “We have been associated with Engineering Expo since its first edition in Indore. Since Network 18 Publishing announces the dates well in advance, we have ample time to decide our exhibiting range. Moreover, for business, the January 2013 time frame will be good as it does not clash with any festivals.” The upcoming Engineering Expo Indore 2013 promises to leverage its geo-strategic positioning to the fullest by inviting an array of stakeholders to witness industrial excellence of all sorts. sweta.nair@network18publishing.com

ENGINEERING EXPO AURANGABAD 2013 EVENT PREVIEW

AURANGABAD February 1- 4, 2013 Ayodhya Nagari Ground

Leveraging market trends, expanding opportunities From being a mere tourist attraction centre to a manufacturing hub, Aurangabad’s journey has been glorious. The city has been growing at a healthy pace over the past few years and is expected to witness a rise in the years to come. Capturing this majestic proposition is the second edition of Engineering Expo Aurangabad. Slated to be held between February 1 & 4, 2013, this trade show promises to be the right connect between organisations and the growth forecasts…

NISHI RATH

EXPLORING new markets and providing the right platform for emerging opportunities has been the backbone of Engineering Expo ever since its inception. Having captured the manufacturing essence of regions like Ahmedabad, Pune and Chennai while providing them a manufacturing thrust, the second edition of Engineering Expo Aurangabad is all set to help one and all leverage on the opportunities and brighter prospects of this fast developing manufacturing hub. It all started when, Bajaj Auto Ltd entered Aurangabad in the 80s and was followed by Videocon. This move threw open a land of opportunities for Small and Medium Enterprises (SMEs) and the region’s growth prospects took an upward swing with major players like Skoda Auto, Varroc Engineering Pvt Ltd, Endurance Technologies Pvt Ltd, Man Diesel India, Can-Pack India and Siemens venturing into the region. Since then, SMEs have been contributing their fair share to the manufacturing sector here and thereby to the region’s growth. According to experts, Aurangabad is now one of the classic examples of efforts towards balanced industrialisation.

GROWTH OF SMEs One of the favourite investment destinations, Aurangabad is known to be one of the fastest growing cities in Maharashtra. This has led to an array of business opportunities for SMEs

in the region. Aurangabad has over 3,405 medium and small scale units generating about 36,871 jobs with an investment of `404.86 crore. It is estimated that by the year 2020, these units will grow to 9,000, generating about 95,000 jobs with an investment of `1,050 crore. In this era of cost competitiveness, when everyone is looking at controlling the overheads and reducing cost; existence of SMEs is a must. After all, SMEs help make the business models of Original Equipment Manufacturers (OEMs) more flexible. And with Aurangabad emerging as an attractive destination for auto giants, SMEs definitely have a great future here!

SEZs AND IT: THE GROWTH CATALYST The growth of Aurangabad can be traced to the time when Maharashtra Industrial Development Corporation (MIDC) started acquiring land to set up industrial estates. Today, Aurangabad

boasts of Shendra, Chikalthana and Waluj MIDC industrial areas that are significant zones on the outskirts of Aurangabad. These areas, over the years, have witnessed a steady flow of investment and are home to both national and multinational players. The sectors that have attracted major investment in the region are automotive, engineering and pharmaceutical. In the last few years, the engineering and automotive sectors have significantly picked up, giving a boost to the entire industrial fraternity here. Aurangabad is the third city in

Glimpses of previous edition 250 exhibitors 18,013+ business visitors from across India

17,000 business leads generated Business transacted worth

Highlights of this edition

`70 crore

250+ exhibitors expected 20,000+ visitors expected

1, 00,000 sq ft area

Business transaction worth `80 crore expected 7, 250+ products on display Spread over an area of more than 1,50,000 sq ft Showcasing more than 30 diverse industry categories

6,250+ products displayed from different industries occupied More than 1,10,000 kg machinery moved in for display

83% exhibitors got the expected visitors at the show 180+ delegations

JANUARY 2013 • SMART LOGISTICS • 55

Engineering Expo Aurangabad 2013, continued

Maharashtra after Pune and Nashik to offer an automotive cluster. Skoda Auto manufactures its models Superb, Laura and Yeti and also Passat and Jetta for Volkswagen and the A4, A6 and Q5 for Audi from its Aurangabad facility. Recently, Bajaj too launched its first four-wheeler manufactured in its facility in Aurangabad. Elaborating further, Chandrashekhar Patil, Partner, Veera Compressor, explains, “The presence of some major auto giants has helped SMEs bloom in Aurangabad. Although the market has been down for some time, we are looking forward to a better times ahead. SMEs definitely have a bright future in this region and are poised for growth.” While the auto industry has made it big in Aurangabad, pharma giants like Wockhardt, Lupin and Glenmark have also made their presence felt. Going ahead, the IT industry has started taking baby steps in Aurangabad and the coming up of Software Technology Parks of India (STPI) has given it a further push. With Aurangabad sprinting towards additional growth opportunities and with the region successfully bagging major investments, it is only a matter of time when it will attract the attention of IT giants. Besides, with IT hubs like Bengaluru, Pune and Hyderabad already reaching saturation, software professionals are looking for new avenues—a factor that could draw their attention towards Aurangabad. Aurangabad has a lot of opportunities and is relatively costeffective as compared to other developing cities. As a result, not only professionals, but also mediumsized companies and first-generation entrepreneurs who want to try their hands in this industry are considering investing in Aurangabad.

ENGINEERING EXPO: HARBINGER OF GROWTH By marking its presence in promising regions, Engineering Expo has

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NEW ATTRACTIONS IN THIS EDITION Panel discussion aims at providing a roadmap to infuse growth in the region Institutional Buyer Involvement Plan to attract delegations from large corporate and major institutions Improvised visitor profiling —profile, scan, filter and bring in visitors as per exhibitors’ requirements Providing business networking support to exhibitors by leveraging Network 18 Publishing’s industry connect Credit rating facilities for the benefit of exhibitors Providing complete travel solutions for exhibitors Offering logistics services to ensure smooth cargo handling, custom clearing, transport compliance, etc. always believed in showcasing a region’s potential to the right audience. Highlighting the scope that Engineering Expo has provided for SMEs and MSMEs, Jeevan Deshpande, Proprietor, Samarth Machinery, exclaims, “Engineering Expo has provided us a good platform. It has become a motivation for traders here. The variety of machines displayed at the event depicts the might of this place.” Deshpande adds, “We were part of the first edition and were happy to find the right audience to connect with. Thanks to the Expo, we were able to convert these inquiries into to good business. This year, too, we expect to make some good business.” Today, Aurangabad has become an emblem of an altogether different Maharashtra—the booming, increasingly urbanised, economic powerhouse. With huge industrial presence of significant corporate players, the city is buzzing with activity. Commenting on the value

proposition of the Expo, Sandeep Khosla, CEO, Network 18 Publishing, says, “After 10 successful years of service to the industry, Engineering Expo today has established itself as India’s largest multi-location trade show on manufacturing. The Expo is a preferred destination for small and medium enterprises as well as manufacturing & engineering organisations to further their growth and that of the industry at large. For the 2012–13 season, we have eight editions spread across an equal number of locations of a rising India. Keeping our esteemed exhibitors and valued customers in mind, we have made elaborate provisions to offer a never before experience. These, we reckon, will add substantial traction to the industrial growth of the nation.” First time exhibitors are also hopeful to attract target customers. Sharing the excitement of a firsttime participant, Kusum Soni, Proprietor, Akshay Heaters, states, “We are participating in Engineering Expo for the first time and expect to interact with representatives from various engineering-based companies from different regions/states. We are hopeful that the event will be a great success with audiences from various engineering fields participating in the event.”

PROMISING FUTURE Aurangabad boasts of a very strong brigade of young and enthusiastic first-generation entrepreneurs, who not only bring new ideas into implementation but also steer the region’s growth. With the enthusiasm and optimism about Engineering Expo Aurangabad riding high among this new brigade of entrepreneurs, the mega manufacturing show is set to provide a much deserved platform for developing business opportunities while leveraging the market trends. nisi.rath@network18publishing.com

RETAIL SUPPLY CHAIN SUMMIT 2012 EVENT REPORT

Retail gets in sync with supply chain With globalisation spreading its reach and competition getting ﬁercer by the day, supply chain has become a critical issue for any company. Supply chain is all about getting the right product to the right place at the right time. But how does one ensure its smooth execution? Shedding more light on the same, the Retailers Association of India (RAI) with Smart Logistics as its media partner, recently organised the second edition of the Retail Supply Chain Summit 2012 in Mumbai. A report… NISHI RATH

THE design and management of a supply chain plays a pivotal role in the flow of products, information and funds—factors which are in line with a supply chain’s success. Keeping this in mind, Retail Supply Chain Summit 2012 was designed. With more channels for trading—including online, brick and mortar, catalogue, and many others—coming into existence, the role of making a supply chain much more efficient gets even more complex. Suggesting the way forward, Kumar Rajagopalan, Chief Operating Officer, Retailers Association of India (RAI), said, “To get smarter supply chain processes in order, there are a few initiatives that companies can internally implement, while much more needs to be done at the industry level—data management, collaborative transportation and easier tax processes being some of the initiatives.”

PANEL DISCUSSIONS AND SESSIONS The summit took off with the first panel discussion—‘Leadership Through Supply Chain Collaboration’. During the discussion, K Radhakrishnan, President, Future Fresh Foods Ltd, urged the audience present to undo the ropes of the past and prepare for the future. He advocated the implementation of GST for free movement of goods. The panelists also agreed on the importance of IT in streamlining the entire Supply Chain Management (SCM) process. Asif Merchant, MD, Catwalk Wordlwide Pvt Ltd, averred, “Systems, software and processes hold the key for successful business operation.” The informative session was followed by a presentation on ‘Freight

(L-R): Lt Col Vijay Nair, AVP, Reliance Digital Retail Ltd; Devadas Nair, Head – Supply Chain & Mission Control, Shoppers’ Stop Ltd; Kapil Premchandani, MD, KD Supply Chain Solutions Pvt Ltd; Jayesh Patel, CFO & Head – Logistics, Globus Stores Pvt Ltd; Sanjay Nadkarni, Co-Founder, Babyoye.com; Sethumadhavan M, Business Head – Supply Chain Services, ITW India and Kashyap Mehta, Business Head – E-Commerce, Inﬁniti Retail Ltd

Corridor Services’ by Sharad Ingale, Chief Commercial Manager, Central Railway. In his presentation, Ingale spoke at length about how Indian Railways offered various cost-effective options and how an organisation’s SCM team could put these to use to save on cost and ensure prompt service. The panel discussion on ‘Turning Reverse Logistics Into A Winning Advantage’ had the panelists agree upon the fact that in India, the topic of reverse logistics was not given due importance. Elaborating further, Devadas Nair, Head – Supply Chain and Mission Control, Shoppers’ Stop Ltd, expressed, “The attitude towards reverse logistics is – There is always a tomorrow.” Additionally, the experts discussed about how the lack of knowledge and commitment have become major hindrances retailers face with regard to reverse logistics.

SUPPLY CHAIN AND NATURE GO HAND IN HAND The panel discussion on ‘Sustainable Supply Chains - Ensuring A Triple Bottom Line Approach’ saw Bhavna Prasad, Director – Sustainable Business,

WWF, sharing an interesting take on conserving natural resources to ensure SCM remained seamless in the future. Apart from this, R Mathrubootham, Director – Legal Metrology (Retd) Department of Consumer Affairs, Government of India, spoke at length about Legal Metrology. He updated the audience on the legalities related to ensuring seamless supply chain & business operations.

ALL’S WELL THAT ENDS WELL The concluding session of the daylong summit, ‘Improving Supply Chain Efficiency with Data Standards’ saw the panelists advocating standardisation on barcodes to tackle uncertainties at each level of a retail transaction. The summit saw participation from more than 200 delegates from the industry and focussed on increasing customer service levels by maximising responsiveness in the supply chain. The event ended on a positive note with participants looking forward to implement various successful practices and improve the supply chain, as a whole. nisi.rath@network18publishing.com

JANUARY 2013 • SMART LOGISTICS • 57

TENDERS

Latest Popular Tenders brought to you by www.tendersinfo.com FLAT BED TRUCK Org : Indian Army TRN : 13648225 Desc : Supply of flat bed truck BOD : December 30, 2012 Loc : India BT : Domestic competitive bidding

TELESCOPIC BOOM CRANE Org : Hindustan Copper Limited TRN : 13918771 Desc : Procurement of telescopic boom crane BOD : January 9, 2013 Loc : India BT : Domestic competitive bidding

CARGO SERVICE Org : Indian Oil Corporation Limited (IOCL) TRN : 13922265 Desc : Handling of filled/empty lubricating oil/grease barrels and cartons/buckets BOD : January 1, 2013 Loc : India BT : Domestic competitive bidding

DUMPER TRUCK Org : Bharat Coking Coal Limited (BCCL) TRN : 13544133 Desc : Supply of 60T rear dumper BOD : January 10, 2013 Loc : India BT : Domestic competitive bidding

CRANE Org : TRN : Desc : BOD : Loc : BT :

North Eastern Railway 13628482 Providing of break down crane January 2, 2013 India Domestic competitive bidding

FORK LIFT Org : National Hydroelectric Power Corporation Limited (NHPC) TRN : 13854242 Desc : Supply of 5-tonne capacity diesel operated forklift truck BOD : January 7, 2013 Loc : India BT : Domestic competitive bidding TIPPER TRUCKS Org : Northeast Frontier Railway TRN : 13823010 Desc : Supply of tipper truck BOD : January 8, 2013 Loc : India BT : Domestic competitive bidding

TRUCKS Org : Karnataka Co-Operative Milk Producers Federation Ltd TRN : 13947000 Desc : Providing milk transportation vehicle BOD : January 16, 2013 Loc : India BT : Domestic competitive bidding PROJECT HALDIA LOGISTICS PARK PROJECT Org : Apeejay Infralogistics Pvt Ltd Project Type : Construction Project News : Setting up Haldia integrated logistics park Loc : India Project Cost : `200 crore Implementation Stage : Ongoing Contact : Apeejay Infralogistics Pvt Ltd Aditi Basu, Corp Comm, Apeejay House, 15, Park Street, Kolkata – 700016. Tel : +91 33 4403 5455-58 Fax : +91 33 2217 2075 Email : calcutta@apeejaygroup.com

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INFORMATION COURTESY: TENDERSINFO.COM 1, Arch Gold, Next to MTNL Exchange, Poisar, SV Road, Kandivali (W), Mumbai - 400067, Maharashtra, India Tel: +91-22-28666134 • Fax: +91-22-28013817 • Email: parmeet.d@tendersinfo.com

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PRODUCT UPDATE

This section gives information about products, equipment and services available in the market. If you know what you want. . . refer to Product Index on Page 64 to find it quickly

BALL LOCK PINS

all lock pins are precision ground locating pins. By simply pressing the button, you can either insert or remove the pin. The balls in the pin ensure positive locking until released by pressing the button. These pins are available in 6 different outer diameters and the length is to be decided by the customer as per the application. The standard pins are offered with two locking balls, but can also be supplied with four balls for greater pull-out strength. It is available in alloy or stainless steel. Steel – Smith Thane - Maharashtra Tel: 0250 – 6457800 / 36 / 37 / 38 Fax : 0250 - 2456970 Email: clamps@steelsmith.com , sales@steelsmith.com Website: www.steelsmith.com

PLASTIC CABLE CARRIERS

lastic cable carrier is light, quiet allrounder with a wide spectrum. It has universal fittings integrable with strain relief and a favourable ratio of inner to outer width. It is designed with a robust double stroke system for long unsupported lengths and comes in models with internal or external openable brackets. It has internal noise reduction, is lightning fast and easy to open with ball joint mechanism. Fixable dividers and lateral wear surfaces are provided for long life and they lie on its side applications with high transverse accelerations where no additional spacers are necessary. It also features cheap energy management, weight-optimised chain geometry and particularly high torsional rigidity. Kabel Schlepp India Pvt Ltd Bengaluru - Karnataka Tel: 080 - 41158997 Fax: 080 - 4115-8998 Email: sales@kabelschlepp.in Website: www.kabelschlepp.de

REUSABLE PLASTIC CONTAINERS AND CRATES

eusable plastic containers are fundamental for transporting, distributing and storing fruit and vegetables from producers to consumers in the fresh food

industry. Plastic containers are reusable and do not require treatment for pests. The benefits of reusable crates include hygiene, constant quality and dimension, no splintering or nails, and no water absorption. RPCs are weather resistant and stack for excellent space utilisation and can be easily repaired or replaced. Benefits include reduce stocking time by 69% with a display ready design, reduced storage space and transport costs by folding the container when not in use, reduced fruit and vegetable damage with smooth interior walls. You can also track products with a unique barcodes for each RPC Chep India Pvt Ltd Mumbai – Maharashtra Tel: 022 - 67839400 Email: salesindia@chep.com Website: www.chep.com

WING PALLETS

ing pallets are designed with precision to offer apt strength for bearing high load. These pallets can be used for stacking only on one side and are provided with two-way entry for forklift and stackers. The product is compatible with all kinds of material handling equipment. Customisation of size as per the requirement of the clients is also provided. The key features of the product are as follows: High load carrying capacity ranging from 500 Kg to 3000 Kg, specifically designed for use in drive-in-racks, highly durable, low maintenance.

Stakall Thane - Maharashtra Tel: 250 -2456970, 2452433, 08600047373 Fax: 250 – 2452530 Website: www.stakall.in

STACK-A-DRUM PALLET RACK

tack-a-drum pallet rack is designed ergonomically to store two drums per pallet. It is easy to move and can be moved individually or with the help of stack and a forklift truck. It has a high load-bearing strength and the cradles of the product are made from mild steel pressed channels that can be shipped in

JANUARY 2013 • SMART LOGISTICS • 59

Product update, continued

knockdown condition. The product can be availed in only standard size with a capacity of 200 litres. The salient features are: stacking up to 4 units high, quickest, easiest, and safest method of handling steel drums and is accessible from all four sides. Stakall Thane - Maharashtra Tel: 250 -2456970, 2452433, 08600047373 Fax: 250 – 2452530 Website: www.stakall.in

BELT CONVEYOR

NL-MS series belt conveyor with metal detector is a device which can detect the metal contained in the material during conveying and simultaneously activate the alarm. It is mounted on patented “FUTURE” floor stand. It has an adopted PVC belt for smooth and efficient conveying. The floor stand is height adjustable. It has an angle adjustable function with a range of 0°~25°. Sidewalls for PNL series is 75 mm respectively. It has a speed adjustor with 0~6 m/min adjusting range. Power supply requirement is 1Φ, 230V, 50/60Hz. Shini Plastics Technologies India Pvt Ltd Thane - Maharashtra Tel: 250-3021166(88) Fax: 250-3021100 Email: india@shini.com Website: www.shini.com

TWO TIER RACKING SYSTEM

wo tier racking system is designed for areas of limited storage capacity. It is recommended for warehouses where goods are stored and removed manually from the shelves. The costeffective system increases storage efficiency, capitalising on the vertical space available thereby providing maximum optimisation of floor space.

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It is mainly used for storage and order picking of non-palletised goods, bins and cartons. It is also designed with adjustable shelves to carry maximum load with suitable ladders, handrails and catwalks for easy operation of the racking system. Lifelong Metal Products Chennai – Tamil Nadu Tel: 09840055065, 09385255065, 09884013701 Email: info@lifelonginfo.in Website: www.lifelonginfo.in

SOCKET PIN WITH SPRING LOADED BALL

he balls are spring loaded in these pins and not locked. You can either insert or remove the pin by simply pushing / pulling it with minimal hand pressure. The balls in the pin ensure positive locking and the spring ensures that it does not open in case of vibrations. The ball lock pins are available in 6 different outer diameters and the length is to be decided by the customer as per the application. The pins are offered with two locking balls Steel – Smith Thane - Maharashtra Tel: 0250 – 6457800 / 36 / 37 / 38 Fax : 0250 - 2456970 Email: clamps@steelsmith.com, sales@steelsmith.com Website: www.steelsmith.com

WOODEN PALLETS

ooden pallets are compatible with existing supply chain infrastructure. It helps achieve greater efficiencies during transport and storage with 2-way or 4-way entry design. It also helps reduce occupational health and safety risks to the workforce through the ability to safely rack and carry heavy loads. Pooled wood pallets are durable, cost effective and environmentally sustainable.

Chep India Pvt Ltd Mumbai – Maharashtra Tel: 022 - 67839400 Email: salesindia@chep.com Website: www.chep.com

BARCODE PRINTER

arcode printer offers features found in industrial printers but at a desktop printer size and price. It is the best solution for grade label and receipt printing. It offers a locking media cabinet and sufficient internal media capacity to hold a 7.2-inch roll of media or stack of fan-folded media. It is also equipped with fast print speed, real-time clock, audible alerts and large display. Datamax-O’Neil California - USA Tel: 949-458-0500 Fax: 949-458-0708 Web: www.datamax-oneil.com

truck become apparent as soon as it is put into service, time saved in handling, greater use of floor space, reduced handling costs. Speed and efficiency with which the truck enables the operator to lift and transport loads, facilitates production, storage and delivery operations. The hydraulic pallet truck is available in standard capacity of 1 ton to 3.2 ton and in other tailor-made capacities and sizes. Agromec Meerut - Uttar Pradesh Tel: 0121-2440660, Email: agromec@vsnl.com Website: www.agromecindia.net

EOT AND HOT CRANES

HYDRAULIC HANDLIFT PALLET TRUCK

he hydraulic handlift pallet truck meets the growing demands for low priced hydraulic truck that offers high quality, reliability and ease of handling. The advantages of the pallet

Vol. 02 | Issue 06 | SEPTEMBER 2011

hese EOT and HOT cranes are available in both singlegirder and double-girder ranging from 500 kg to 50,000 kg capacity. The cranes are designed and manufactured in accordance with IS:3177 considering proper factor of safety with respect to appropriate duty classifications. Different types are available, like double-girder overhead travelling cranes, single girder overhead travelling cranes,

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JANUARY 2013 • SMART LOGISTICS • 61

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heavy-duty overhead travelling cranes with main and auxilliary hoists, under slung cranes, EOT/HOT crabs, etc. The cranes are used in steel mills, foundries, paper plants, cement plants, power plants, dairy plants, chemical plants, fertiliser plants, petrochemical plants, engineering plants, textile industries, general industries, etc.

Techno Indus Ahmedabad - Gujarat Tel: 079-2583 0742, 09313159058 Email: info@technoind.com Website: www.technoind.com

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

WAREHOUSING STORAGE FACILITIES

pacious warehousing storage facilities are offered for products that are in transit phase. Customers’ goods are kept safe in the warehouse until they are delivered to the desired destination. The warehouse facility is well-planned as per international standards so that safety of the goods from natural calamities or any other accident is ensured.

EOT CRANES

he rational structure of the crane is of box construction adequately designed and reinforced by stiffening ribs. It is connected with bridge trolley, which is moved by motors, coupled up with speed reducers. The crab carriage is in the steel section. It comprises of special crane duty motor, connected to speed reducers and is coupled to a grooved steel drum. Electromagnetic brakes are used to control the smooth lifting of weight. AC drive is also provided (on demand) for smooth operation of long travel. The hook is equipped with a forged steel forked revolving hook. Wire rope is of 6 x 37 construction. Friends Engineering Works Udaipur - Rajasthan Tel: 294-2492200, 294-2494379, 09829042424

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62 • SMART LOGISTICS • JANUARY 2013

Email: info@friendseng.com Web: www.friendseng.com

CAGE PALLET

age pallet is completely designed with extreme quality raw material and are procured from renowned industries. Th is cage pallet comes in different specifications with respect to its application. Base is made of MS tubular structure with sides of wire mesh provided at the bottom for forklift or pallet truck entry. It is a selfcleaning see-through pallet and can be stacked one upon the other. Wire mesh container is stackable and totally collapsible. The wire mesh pallet is used in automobile industries as well as warehouses of large factories. It has up to 1000 kg weight bearing capacity with even load distribution. Ahlada Industries Pvt Ltd Hyderabad - Andhra Pradesh Tel: 040-23094301, Email: industries@ahlada.com Website: www.ahlada.com

he truck-mounted hydraulic cranes superstructure frames is 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 a single- double-acting hydraulic ram mounted on a large diameter bushes.

Til Ltd Kolkata - West Bengal Tel: 033-25531352 Email: tilkmt@tilindia.com Website: www.tilindia.in

luminium light crane system applies the strength and low weight of aluminium to every light material which needs to be lifted. They can handled low loads up to 2 metric tonne across a wide variety of rail types. It is a robust, cost-efficient solution. An anodised aluminium surface ensures the long-term durability of the system purchase. The modular design, requiring no welding or painting, greatly reduces downtime during installation, expansion, or upgrade. Konecranes India Pvt Ltd Pune - Maharashtra Tel: 020-40047470 Email: india.sales@konecranes.com Website: www.konecranes.com

HYDRAULIC CRANES

ALUMINIUM CRANE SYSTEM

WEIGHING TERMINAL

eighing terminal houses dual indicators, dual junction boxes, controller card, SMS unit which will prevent unauthorized access to the junction box / indicator for weight adjustment/ tampering. It is a stainless-steelrugged-enclosure. Also present is a hot redundant system which automatically switches in case of failure within 12 seconds. There is a status-indicating LED for running, standby. Auto change back to master channel after repair/reset of master section is possible. There is a self diagnostic run of each channel on “power on” every time.

Essae Digitronics Pvt Ltd Bengaluru - Karnataka Tel: 09342332374 Website: www.essae.in

The information published in this section is as per the details furnished by the respective manufacturer/distributor. In any case, it does not represent the views of

Looking For A Specific Product? Searching and sourcing products were never so easy. Just type SL (space) Product Name and send it to 51818

eg. SL Forklift and send it to 51818 JANUARY 2013 • SMART LOGISTICS • 63

PRODUCT & ADVERTISERS’ INDEX NDE DE

Looking For A Specific Product? Searching and sourcing products were never so easy. Just type SL (space) Product Name and send it to 51818

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Pg No

Alpha Analytics Services Pvt Ltd

BIC

T: +91-20-25897063 E: vivek.rane@alpha-analytics.com

Products

Pg No

Aluminium crane system .............................................................................. 63

W: www.alpha-analytics.com Chep India Pvt Ltd

Auto FLC...................................................................................................FIC

T: +91 022 67839400

Ball lock pin ................................................................................................. 59 Barcode printer ............................................................................................. 61

E: Savio.Pimenta@chep.com

Belt conveyor ................................................................................................ 60

W: www.chep.com

Bulk transportation......................................................................................... 4

FIC

DRS Dilip Roadlines Pvt Ltd

Cage pallet .................................................................................................... 63 T: +91-040-39818800

Contract logistics ............................................................................................ 4 EOT and HOT cranes ................................................................................. 61

E: directordesk@drsindia.in

EOT crane ................................................................................................... 62

W: www.drsindia.in

Fleet management service ......................................................................... BIC Foldable plastic crates .................................................................................FIC

Engineering Expo

Folding large container (FLC) ...................................................................FIC

T: +91-9819552270

Hydraulic crane ............................................................................................ 63

E: engexpo@infomedia18.in

Hydraulic handlift pallet truck ..................................................................... 61

W: www.engg-expo.com

Infomedia yellow pages ................................................................................ 37 Logistics service....................................................................................... 5, BC Pallets .........................................................................................................FIC Plastic cable carrier ....................................................................................... 59

Network18

47 T: 91+022-303242518 E: sdubey@network18publishing.com

Relocation ...................................................................................................... 4 Reusable plastic containers and crate ............................................................ 59 Socket pin with spring loaded ball................................................................ 60 Stack-a-drum pallet rack .............................................................................. 59 The Fresh Connection : Global Challenge 2013 Schedule .......................... 29 Two tier racking system ................................................................................ 60 Vehicle tracking service ............................................................................. BIC Warehousing................................................................................................... 4 Warehousing storage facilities ...................................................................... 62

W: mcc@network18publishing.com Safexpress Private Limited

5,BC

T: +91-1800-113-113 E: suyash.srivastava@safexpress.com W: www.safexpress.com The Fresh Connection : Global Challenge 2013 Schedule

T: +91.124.430.4673

Weighing terminal........................................................................................ 63 Wing pallet................................................................................................... 59 Wooden pallet .............................................................................................. 60

W: www.ThinkLink-SCS.com

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

64 • SMART LOGISTICS • JANUARY 2013

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.

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E-mail: b2b@infomedia18.in PRODUCT INQUIRY FORM Aluminium crane system

Logistics service

Auto FLC

Pallets

Ball lock pin

Plastic cable carrier

Barcode printer

Relocation

Belt conveyor

Reusable plastic containers and crate

Bulk transportation

Socket pin with spring loaded ball

Cage pallet

Stack-a-drum pallet rack

Contract logistics

The Fresh Connection : Global Challenge 2013 Schedule

EOT and HOT cranes

First Fold Here

EOT crane

Two tier racking system

Fleet management service

Vehicle tracking service

Foldable plastic crates

Warehousing

Folding large container (FLC)

Warehousing storage facilities

Hydraulic crane

Weighing terminal

Hydraulic handlift pallet truck

Wing pallet

Infomedia yellow pages

Wooden pallet

Second Fold Here

ADVERTISERS’ INQUIRY FORM Alpha Analytics Services Pvt Ltd

Network18 Safexpress Private Limited The Fresh Connection :

DRS Dilip Roadlines Pvt Ltd

Global Challenge 2013 Schedule

Engineering Expo

Third Fold Here

GLUE

Chep India Pvt Ltd

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