Smart Logistics - September 2011 by Infomedia18

Vol. 02 | Issue 06 | SEPTEMBER 2011

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TECHNOLOGY INDUCTIONV VIEWPOINT

GOAL ZERO

e have grown to believe that harder the task, the steeper are the chances to attain it…the bigger the target, the more challenging it gets to achieve it. Right? Wrong! There are some areas in our personal and professional lives which defy this norm. Where the higher the figures attained, the more is the cause of alarm, prompting us to break into cold sweat as the figure zero is the most desired and applauded one. Still need a clue? Safety is the task, where zero is the dream figure, difficult to achieve…critical to attain.

Safety and security occupies an all important place in every sphere of life. But, it acquires completely new dynamics and complexities when it comes to safety and security in logistics and supply chain operations, as this industry interacts with every other industry in a constantly changing environment. Improving safety in logistics and SCM functions thus improves the health and safety standards of all the industry verticals, encompassing the entire cross section of operations in all fields. Easier said than done, really! With goods criss-crossing cities, states, countries, continents and oceans, as they travel to market by pipeline, truck, rail, barge, shipping vessel and air, this task of attaining ‘figure zero’ amid accidents and damages seems almost non-attainable, with just one disclaimer, we don’t have an option but to constantly attempt and manage this golden figure! And how do we do this? To start with, to achieve the safety goals, it is utmost important that we choose reliable logistics partners and, with them, commit to high safety and security standards in all aspects of SCM and never allow the safe and responsible operation mandate to be compromised for any other competing business priority. That is how committed each link of the supply chain ought to be. Careful scrutiny at every step is the anthem for many progressive companies for whom safety comes first. They use risk-based models to critically evaluate the goods to be handled, ensuring that they meet industry standards. They also scrutinise their commercial carriers and distributors to be sure they comply with all regulations and are appropriately certified to handle the products. Then again, at the manufacturing sites, these progressive companies thoroughly train their workers in handling, packaging and inspection of products before shipment. They also train and set up local and national emergency-response planning groups, so that they are always ready to offer technical guidance and on-site assistance if a transportation incident occurs. Also, it is very important to improve the incident-reporting systems, which helps to better understand performance and make efficient improvements. Here a detailed information about safety incidents of every kind — regardless of whether or not a person is injured or equipment is damaged is collected. Here, all serious incidents are investigated thoroughly to determine what went wrong and how to prevent a recurrence. Also “near misses” are analysed to improve the safety knowledge and action to be taken thereafter. So it is safe and prudent to effectively identify and mitigate hazards before they occur, while employing robust maintenance and inspection programmes, trained personnel and efficient process communication with overall awareness of how individual actions can impact process safety, it is also profitable to be safe, because demonstrably high safety standard often also speeds up the handling of a transport – an additional benefit which every logistics provider can provide to their customers. So, go attempt a Zero!

Archana Tiwari-Nayudu archana.nayudu@infomedia18.in

SEPTEMBER 2011 • SMART LOGISTICS • 5

CONTENTS

VOL. 02, NO. 06

SEPTEMBER 2011

INSIGHTS & OUTLOOK: SAFETY & SECURITY Safer Avenues To Ensure Better Productivity There is more to warehouse safety than compliance with ﬁre codes and OSHA regulations. Unfortunately, too many warehouses look at safety as meeting the minimum mandated by law. Often, neither goes far enough. However, a safe environment not only helps keep inventory secure, it also adds to the value-added services and increases productivity and efﬁciency of the company in providing good logistics service to their customers.

Mining Equipment Ensuring Safe Mine Output Transportation Ways To Minimise Theft Keeping A Watchful Eye On Pilferage Prevention IT Solutions For Safety Creating A Foolproof Supply Chain Tips & Tricks Quick Fix Solutions For Warehouse Safety

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Inventory Control Five Strategies For Improving Inventory Management

Mega Trends In Air Cargo Taking Off To Attain Greater Heights Air Cargo Security Compliance Easing The Burden Using On-demand Logistics Solutions

DINESH RAI, Chairman, Warehousing Development & Regulatory Authority (WDRA)

‘We See A Growth Rate Of Over 300% For 4PL Service Providers In India In The Next Few Years’

Leveraging Trade Agreements Achieving The Next Level Of Savings

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SECTOR FOCUS

VIEW FROM THE TOP VIEW FROM THE TOP ‘An Additional 35 Million MT Warehousing Capacity Will Be Required In The Next 5-10 Years’

SMART STRATEGIES

KIRAN SALUNKE, MD, Siesta Logistics Corporation

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SUPPLY CHAIN MANAGEMENT Demand-supply Dynamics Designing An Agile Supply Chain

ALSO IN THIS ISSUE VIEWPOINT

WAREHOUSING & DC

NEWS, VIEWS & ANALYSIS Latest Happenings In The World Of Logistics

Purpose-built Warehouses Building Your Warehouse The Holistic Way

NEWS ANALYSIS Cold Chain Consulting An Enabler For Robust Development

EVENT REPORT

PRICE TRENDS

TECH TRACK

Curtain Raiser: Frost & Sullivan Deﬁning Future Supply Chain Strategies

PRODUCT & ADVERTISERS’ INDEX

PRODUCT & ADVERTISERS’ INQUIRY FORM

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Post Event: CII Institute Of Logistics Building Warehousing Competitiveness Key To Faster Logistics Growth

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EFFORTS ON TO CHECK ACCIDENTS OF MERCHANT VESSELS IN INDIAN WATERS The Government recently said that it was taking measures to prevent the accidents of merchant vessels in Indian waters including retiring ships older than 25 years, restricting their movement and using modern communication systems for traffic management. The Shipping Minister, GK Vasan, said during Question Hour in the Lok Sabha that the Government is taking steps to review ships which are older than 25 years and only those which meet the standards will be permitted to function. He said adequate insurance coverage is also being emphasised upon. The number of accidents involving merchant ships registered in India was 20 in 2008 and 14 each in 2009 and 2010. The loss of life during the last three years was 10 in 2008, five in 2009 and four in 2010.

GOA SHIPYARD RECORDS HIGHEST VOP AT RS 990-CR SINCE INCEPTION Goa Shipyard has reported the highest value of production (VOP) of Rs 990 crore since its inception in 1957 in the last fiscal. It is also eyeing to train Navy fleets from the Middle East, Africa and some South East Asian countries in ship repair and maintenance capabilities. While informing about the achievement, Vineet Bakshi, Chairman and MD, GSL, said that the yard earned a profit of Rs 176 crore in the year ended March 2011 as against Rs 131 crore in 2010. “During the financial year 201011, the company achieved highest value of production ever since its inception to Rs 990 crore as compared to Rs 866.48 crore the last fiscal,” he added. GSL, based in the port town of Vasco, manufactures warships for the Indian Navy and Indian Coast Guard since 1961. Bakshi said the first and second phase of the shipyard’s expansion has been completed, while he expects to achieve a total VOP at Rs 3,000 crore to Rs 4,000 crore from the third and fourth phase. Adapting to modernisation has given a technical facelift for the yard, thus making it the “first defence ship-building yard in India to be equipped with a modern shiplift facility and launching and docking of ships,” he said.

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To a query about modernisation of the communication system, Vasan said a management system called Vessel Traffic Management System (VTMS) has been deployed in some ports and is to be deployed in another four ports shortly. The Government said it is party to international conventions on safety and followed its norms. Indian Coast Guard has also been deployed in good numbers to ensure safety at the ports, he said. “An Emergency Towage Vessel (ETV) manned by specialised crew has been positioned from this year on the West Coast of India for tackling marine emergencies during the monsoons,” Vasan said.

TAKE SOLUTIONS REVENUES SOAR BY 47% IN Q1FY12 REWAS PORT YET TO GET CHANNEL ACCESS RIGHTS FROM MUMBAI PORT Reliance Group promoted Rewas Aware Port has not been able to get channel access from the Mumbai Port as yet. This is because Rewas Port has not yet agreed to terms offered by the Mumbai Port for the right of way (RoW). Mumbai Port is under the aegis of the Central Government. Rewas is a potential competitor of Mumbai Port. “In spite of several rounds of discussion with Mumbai Port Trust, Rewas Port has not yet mutually agreed to the Terms and Conditions for RoW,” said G K Vasan, Union Minister of Shipping recently. The Government of Maharashtra through Maharashtra Maritime Board (MMB) had requested Mumbai Port for grant of RoW to Rewas Port for developing an approach channel through Mumbai Port’s waters for around 17 km. Mumbai Port has, in principle, agreed to consider the RoW to Rewas Port for development of an approach channel provided that the terms and conditions for right of way are mutually agreed to by Mumbai Port and Rewas Port, the Minister stated.

MARG KARAIKAL PORT LAUNCHES CONTAINER HANDLING SERVICES

L O G I S T I C S

DP WORLD PROFIT INCREASES BY 36% IN THE FIRST SIX MONTHS OF 2011 AIMA HOSTS SUPPLY CHAIN LOGISTICS AND LOGISTICS MANAGEMENT SUMMIT All India Management Association (AIMA) recently organised the Sixth Global Summit on Supply Chain Logistics and Logistics Management based on the theme ‘Managing Dynamic Supply ChainsA Game Changer For Competitive Advantage.’ The event played an important role in addressing the need of creating a dynamic supply chain and how dynamic supply chain can help in gaining competitive advantage in the market. Held in New Delhi on August 18-19, 2011, the event turned out to be a huge success with eminent speakers from industry and academia sharing their thoughts. The speakers at the event highlighted the need for a company’s supply chain to be responsive, flexible and agile so that it can act according to the changing demands of the customer. One of the speakers at the event Dr Nallan C Suresh, UB Distinguished Professor and Chair, The State University of New York, Buffalo highlighted that companies need to make their supply chain management more competent by strategic sourcing and using e-procurement judiciously to handle informed customers who have become more demanding over a period of time. Vineet Agarwal, Executive Director, Transport Corporation of India was the chairperson of the summit and Dr G Raghuram, Indian Railways Chair Professor, Public Systems Group-IIM Ahmedabad and SLGanapathi, COO, NTL Logistics Plus India were the Directors for the programme. Some of distinguished speakers at the event included Ravi Garg, Director (Supply Chain), Coca Cola India and Southwest Asia and Sanjay Dabir, Senior Director-Supply Chain.

PANALPINA LAUNCHES 3 NEW DIRECT LCL SERVICES FROM ASIA TO ROTTERDAM

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ASHOK LEYLAND OUTSOURCES ASSEMBLY FUNCTION TO TVS LOGISTICS Commercial vehicle maker Ashok Leyland (ALL) has outsourced assembly of its genset engine powerpacks to TVS Logistics, a leading logistics player. This deal is expected to help ALL achieve savings on costs and time as well as add value to its power solutions business. As per the deal, a dedicated and full-fledged logistics assembly facility has been set up near Chennai at an initial cost of Rs 2.5 crore. ALL will supply engines and radiators to TVS Logistics, which will assemble genset engine powerpacks at the new facility and send the assembled packs to Ashok Leyland, which will supply to its customers in both domestic and export markets. The assembly facility will have a capacity of 14,500 units per annum

that can be up-scaled to 30,000 units. It will assemble different genset engine powerpacks in the range of 10–2,000 KVA for Ashok Leyland. This capacity is expected to meet company’s sales requirements for the next three years. “TVS Logistics has much better supply chain capabilities to handle this assembly operation and can add greater value to the same,” said Vinod K Dasari, MD, Ashok Leyland. This will give Ashok Leyland the flexibility, while TVS Logistics would bring in global best practices on sub-assembly operations, he said, adding, “Our power solutions business is growing robustly in tune with the domestic genset market that is shortly expected to touch two lakh units per annum.” “Thanks to

our acquisitions in the US and the UK, we are now able to offer this sub-assembly services in India,” said R Dinesh, MD, TVS Logistics Services. Ashok Leyland has a de-risk strategy through strong focus on its non-cyclical business that include buses, exports, spare parts, power solutions and defence. The company’s revenues from power solutions stood at Rs 331 crore in 2010-11 when compared with Rs 408 crore in 2008-09 on the back of fall in telecom business share from Rs 243 crore to almost nil during this period. However, power solution business has been transforming into a business model for ALL as the company is looking at aggressive growth in non-telecom space.

STILL TAKES THE FUEL EFFICIENCY CHALLENGE ALLCARGO TO USE MASTER BRAND ‘AVASHYA’ TO ENTER NEW BUSINESS Allcargo Global Logistics has started a corporate re-branding exercise to create a master brand, Avashya, to cover all its products and services ahead of its foray into new businesses. “Having a mother brand will help when we will look at other areas,” said Adarsh Hegde, Executive Director, Allcargo Global Logistics in a recent announcement. He said the company was yet to identify potential businesses to enter. However, according to sources, the company plans to enter hospitality, real estate and ports under its umbrella brand. For now, Avashya will comprise Allcargo Global and its non-vessel operated common carrier ECU Line. Started by first generation entrepreneur Shashi Kiran Shetty in 1993, Allcargo Logistics is one of the largest logistics companies in the country with operations in 65 countries. Private equity firm Blackstone owns 14.99 per cent stake in the firm. Experts say a mother brand will help Allcargo expand in businesses such as hospitality, ports and real estate. “Allcargo has interest in a variety of business, which seem small at the moment. But, they are in sectors which will see a large growth in the coming years. Having an individual identity to handle the diversified business will help them in the long run,” said an analyst at a brokerage firm.

A van centre in Taunton has risen to the fuel efficiency challenge after securing a £600,000 deal with a national fork lift truck supplier. STILL UK, the leading provider of material handling equipment and warehouse solutions, has taken delivery of a fleet of Volkswagen Transporters from Taunton Van Centre, as part of its drive to reduce fuel consumption. The Volkswagen T5 vans are to be used by STILL’s nationwide network of field engineers that manage the service and maintenance contracts of its fork lift and warehouse trucks. The powerful and fuel efficient engines were key reasons why STILL turned to Volkswagen vans, as Steve Howell, Logistics Manager, STILL UK explained. He said, “As we provide a nationwide intralogistic service to our customers, it is imperative as a company that we not only operate a reliable fleet but also one that provides appealing fuel efficiency savings without sacrificing power or load space. “The Volkswagen Transporters comfortably met our requirements and the Taunton team ensured a smooth transition,” he added. Graeme Panton, Head–Business, Taunton Van Centre, said, “The latest Transporter provides commercial vehicle operators with a quieter yet more powerful engine offering significant fuel savings and lower carbon dioxide emissions that meet the Euro 5 emissions standards set by the European parliament. With the ongoing developments of the Volkswagen range, we look forward to strengthening our relationship with STILL UK.”

ROADRUNNER TO BUY PRIME LOGISTICS CORP FOR $97.5 MILLION Roadrunner Transportation Systems Inc. (RRTS) has agreed to buy privately held logistics and freight-consolidation company Prime Logistics Corp in a cashand-stock deal valued at $97.5 million. To pay for the purchase, Roadrunner said it would expand its credit facility to $240 million. It said the deal would immediately boost earnings. It pegged the boost in 2012 at 16 cents to 18 cents a share.

Mark DiBlasi, Chief Executive, Roadrunner said that the combination would benefit both companies. “Prime provides Roadrunner with enhanced logistics and consolidation capabilities to offer to our combined customer base,” he said, adding, “Roadrunner will be able to add significant value to Prime, which predominately ships food from producers to retailers, distributors and warehouses, through the extension of its offerings.

MUNDRA PORT EMERGES AS 5TH LARGEST COMMERCIAL PORT IN INDIA AFTER HANDLING OVER 15.08 MMT OF CARGO IN Q1 FY12

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ENNORE CONTAINER TERMINAL TO HANDLE SHIPS FROM 2013 The Ennore container terminal (ECT) is on track despite delayed closure of debt-funding. The London-based Eredene Capital is working towards financial closure of debt-funding for the £207million project in which it is a partner in a consortium led by Spain’s biggest portterminal operator Grup Marítim TCB. The terminal’s construction is expected to begin by year-end, allowing the first ships to be handled in 2013, Eredene said in its annual report for 2010-11. In May, Eredene raised £30 million and most of the funds are being earmarked for the terminal and other potential projects in India. It is working with its consortium partners on securing local debt-financing in India for

the new terminal. The container terminal will serve a growing industrial hinterland and motor-manufacturing hub, and it will have an eventual planned annual capacity of 2.4 million TEUs (twenty-ft equivalent units). “ECT is an important project for Eredene,” the company officials said. The consortium was awarded the build-operate-transfer project in June 2009 for 30 years. The terminal will have a quay length of 1,000 metre with 15-metre water depth at the berths and will be able to handle three container vessels of up to 8,000 TEUs simultaneously. Even though Chennai, Tuticorin and Kochi container terminals enjoy advantages of the present market network, the ports

PRACTICE GREENHEALTH LAUNCHES GREENING THE SUPPLY CHAIN INITIATIVE Practice Greenhealth has recently announced the formation of the Greening the Supply Chain initiative. The initiative extends Practice Greenhealth’s leadership role in supporting hospitals by engaging businesses in meeting the emerging demand for more environmentally preferable purchasing (EPP) practices for products within healthcare facilities, GPOs and in the business marketplace. These businesses are coming together with those in the healthcare sector to address all those elements that are essential to producing environmentally preferable products and processes. The comprehensive Greening the Supply Chain Initiative is being launched in order to provide a common set of tools for purchasers, suppliers and manufacturers to ensure that environmentally preferable products are indeed available, cost competitive, of comparable quality, and generate a sector wide market shift in the direction of sound EPP practices. Practice Greenhealth suggests that the proposed Greening the Supply Chain Initiative will provide additional leverage in the manufacture and production of environmentally preferable products through the development of relationships that go beyond the healthcare supply chain and include a thorough analysis of the supply chains of vendors. “Healthcare systems are now leading the way in making environmental sustainability issues key criteria for purchasing decisions, alongside clinical outcome, quality and cost,” said David Hearn, VP – IT and Facilities Procurement, Kaiser Permanente. “Kaiser Permanente has made significant progress towards reducing waste, removing harmful chemicals from operations and conserving energy. We look forward to working with Practice Greenhealth and the larger health care community to collaboratively green the supply chain in meaningful ways.” “Many products used in healthcare environments have environmentally preferable alternatives that may reduce health impacts to patients and staff, eliminate hazardous waste disposal, save energy and water or reduce the greenhouse gas emissions from a facility,” said Anna Gilmore Hall, Executive Director, Practice Greenhealth. “Greening the supply chain is an essential element for any healthcare facility embarking on a journey toward sustainable health care. Purchasing products and services with a reduced impact on human health and the environment takes into account one or more environmental attributes in products & services and applies them in the supply chain process,” he further added.

ALLCARGO LOGISTICS Q2 NET PROFIT UP BY 75% 10 • SMART LOGISTICS • SEPTEMBER 2011

ARSHIYA INTERNATIONAL’S PROFIT JUMPS 43%

suffer because of constraints like space availability for expansion, congestion in access roads, draft limitation and labour problems, says a report on Ennore port’s business plan prepared jointly by HPC Hamburg Port Consulting GmbH and CES Consulting Engineers Services (India). Vizhinjam will be a newcomer and enjoy similar advantages as Ennore. On the other hand, hinterland access may not be quite as favourable. The Ennore port plans to remain competitive by developing the container terminal for 6,000-8,000-TEU vessels on priority with better facilities and commission it ahead of competing facilities such as the proposed second container terminal at Tuticorin, says the report.

GOVERNMENT TO FIX CABOTAGE LAW ISSUE SOON The Union Government is considering to relax Cabotage Law in view of the crisis being faced by the International Container Transhipment Terminal (ICTT) at Vallarpadam. This assurance was given by the Shipping Minister, GK Vasan, in a reply to the Union Minister, Prof KV Thomas, seeking intervention of the Prime Minister for Cabotage Law relaxation for smooth cargo movement at ICTT Vallarpadam. The Shipping Minister had also said that the Government will soon intervene to find a solution to the issue. Cabotage regulations restrict movement of foreign ships between Indian ports. Large foreign ships can dock at a port. But only an Indian vessel can be used to move cargo to another Indian port. Prof Thomas pointed out in his letter that the Parliamentary Standing Committee had recommended amendments to Cabotage Law and there has been no progress on the issue so far. Though it was announced that the ICTT would be handling 7.75 lakh TEUS this year, it had handled only 1.36 lakh TEUs in the first six months. Though revenue of Rs 109.91 crore was expected this year, so far ICTT has not been able to achieve even half of the amount, he said in the letter. The Cochin Chamber of Commerce and Industry has requested the Shipping Minister, the Chief Minister, the Shipping Secretary and Parliament members representing Kerala, to look into the matter and facilitate the early relaxation of Cabotage Law for the benefit of the EXIM trade.

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TAKE SOLUTIONS AND QLIKTECH ANNOUNCE EXTENDING THEIR PARTNERSHIP TO INDIA TAKE Solutions, a technology solutions leader in SCM and Life Sciences domain and QlikTech, a leader in Business Discovery – user-driven Business Intelligence, have announced extending their partnership to India. Both TAKE and QlikTech have been working towards identifying opportunities to drive efficiencies for its clients’ businesses. Now this alliance, which began in 2009 in the US, is expected to expand to other countries where TAKE Solutions have their operations. On this note, Kishore Rachapudi, President & COO, TAKE Solutions said, “In partnership with QlikTech, we offer to our customers the flagship QlikView product that delivers instant business answers, enabling users to easily explore their data without limits. We are very

GOA SHIPYARD TO INCREASE SHIPPING CAPACITY Goa Shipyard is looking forward to enhance its shipbuilding capacity by three times in near future once it fully commissions the last two phases of its modernisation project under way. The shipyard is implementing an infrastructure modernisation project in phases. The preparatory work is in progress to implement phases 3 and 4 of the plan, which includes creating steel dockyard, steel preparation and fabrication shops, outfitting shops, new land berths, outfit jetty, shipyard cranes and other equipment, mechanical services and utilities. Considering the constraints of availability of land in and around the existing premises of the GSL in Vasco, GSL is also looking out for land away from the present location onshore for setting up additional non-essential facilities such as warehousing and lowend activities, which require more space onshore.

excited to bring the industry leading analytical solutions provider to our customers in India. QlikTech’s innovative technology and TAKE’s deep domain expertise would greatly benefit our customers in India by solving a variety of business problems.” Peter McQuade, VP–Global Alliances, QlikTech said, “The alliance with TAKE is a significant step forward in taking Life Sciences and Supply Chain solutions to our customers. TAKE has shown its ability to build industry specific Business Discovery solutions that meet the expectations of the business users as well as IT users from an intuitive product like QlikView. We expect this partnership to benefit many joint customers throughout the world for years to come.”

L O G I S T I C S

DHL ENHANCES CARGO SECURITY DHL has recently introduced seven Security Monitoring Centers throughout Latin America. The Centers track ground shipments from their point of origin to the final destination in Latin America using the latest technology. By using a geolocalisation system, the DHL Global Forwarding division monitors shipping in real-time in addition to using various security mechanisms at the warehouses. These mechanisms include closed-circuit TV, access control and intrusion alarms, as well as physical monitoring of freight by fully trained professionals and armed guards, electronic and steel locks under the C-TPAT/BASC standard, and mobile GPS.

FOOD CORPORATION TO RE-JIG SUPPLY CHAIN SYSTEM The Food Corporation of India plans to rework its supply chain. A consultant will help the corporation assess the current system and suggest improvements. The nodal agency that procures and distributes foodgrains across the country annually buys 250 lakh tonne of wheat and 300 lakh tonne of rice. In 2010-11, it lost Rs 482 crore from storage and transit loss of foodgrains. Taking 2010-11 as the base year, the consultant will assess the Railway’s performance on areas such as availability of rakes according to the plan, honouring monthly plans and their impact on utilisation of storage capacity in godowns, and reasons for bunching of rakes at receiving godowns. The consultant will also examine the scope of introducing new technologies for material handling, examine characteristics of a desirable logistics model and suggest a mix of transport, including use of coastal shipping, the Corporation said. Likewise, the consultant will study whether turn-key logistics service providers could be engaged, and, if feasible, specify the scope of activities that can be managed through such agencies. Linear programming, a technique the corporation applies to manage movement of stocks, is of limited used as all loading railheads and recipient railheads cannot handle full rakes. At times, demands of nearby railheads are combined so that a full rake is used to reduce operational cost and time. Foodgrains are transported from surplus regions, such as Punjab, Haryana, Andhra Pradesh, Madhya Pradesh and Chhattisgarh, to consuming or deficit regions. A detailed monthly movement plan is charted out to help the Railways in allotting rakes and ensuring smooth movement of food grains. When the demand of a railhead is less than a rake, then demands of nearby centres are combined so that instead of operating two half rakes a full rake is operated.

EFFORTS ON TO DEEPEN VALLARPADAM TERMINAL DRAFT Dredging operations are in progress at the International Container Transshipment Terminal (ICTT) at Vallarpadam for achieving the targeted depth of 15.95 m to make ICTT the deepest container terminal in the country. The Cochin Port Trust (CPT)

had declared a draft of 13 m on 350 m of berth length at the container transshipment terminal at the time of commissioning the terminal in February. CPT has now announced a draft of 11 m on an additional length of 100 metre of berth length at the terminal.

Thus, 450 m of the quay has been made operational. The vessel, m.v. Seaways Venture, had berthed in the extended 100-m length of the berth on August 18 along with m.v. CMA CGM Telopea, a mainliner of CMA CGM Shipping Line, which sailed from here to Australia.

SEPTEMBER 2011 • SMART LOGISTICS • 11

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CHINA ITS HOLDINGS BUYS SIEMENS’ LOGISTICS TECHNOLOGY Hong Kong-listed China ITS Holdings is looking to speed ahead into the market for Chinese public intelligent transportation systems (ITS) with its purchase of China Traffic Holding CTH. Under the deal, announced recently, China ITS will pay US$45m for 100 per cent of CTH, to the venture capital arm of Siemens, GP Investment and Founder Holdco. China ITS will pay US$ 29.8m in cash and the rest through new ITS shares. China ITS uses computer technology to provide traffic and logistical information, which help cities plan bus and taxi routes. The deal could help China ITS diversify its revenue stream, Francis Lun, MD,

Lyncean Securities, said. “China ITS’s core business is providing communication systems to railways in China.” “The new investment engagement could not only allow China ITS to secure stable revenue but also help the firm to capture additional market share in China’s overall intelligent transportation systems sector,” he added. The acquisition will provide China ITS with a platform to enter the public transport ITS market in China. China ITS can enter new local markets such as Guangzhou, Xi’an and Nanjing. China ITS’s move to focus on the public transportation ITS market comes at a time when major cuts are being implemented

GANGAVARAM PORT PLANS TO SHIFT AWAY FROM COAL The share of coal in Gangavaram port’s traffic basket is to gradually decline as the port authorities propose to target more of non-coal traffic in coming years, according to port sources. At present, coal accounts for nearly 70 per cent of the port’s total traffic i.e 10 million tonnes (mt) out of a total of 14 mt (2010-11). In 2013-14 when the port capacity is to rise to 4445 mt, the share of coal will drop to less than 50 per cent to around 20 mt, the sources point out.By 2013-14, when the proposed Rs 1,200crore capacity expansion programme of the port will be completed, the number of coal berths will rise from one to two while the number of multi-purpose berths from three to six. The new cargoes which, the port authorities hope, will materialise in the coming years, will include imports of alumina and bauxite, fertiliser import in larger quantities, limestone import, slag exports, containers and LNG imports. At present, Gangavaram port suffers from infrastructure bottlenecks, hitting rail movement, which accounts for the bulk of cargo movement to and from the port. The slow evacuation of the imported materials is a matter of concern. At any point of time, an estimated one million tonne of imported materials lie uncleared within the port premises, say sources. The port sources hope that the present railway bottleneck will be eased to a great extent once the road over-bridge across the track is thrown open to traffic, thus removing the restriction on wagon movement. There is a further proposal to construct a second line over the 3.5-km stretch between the port railway and network of the Indian Railways. At present, it is a single line link.

12 • SMART LOGISTICS • SEPTEMBER 2011

in Chinese railway investments. Earlier this year, the railway ministry announced that it would reduce investment in the sector over the next five years as debt mounted. The growth potential for the new market looks healthy. “There are over 600 cities in China and every city will have its own system,” an analyst noted. Siemens’s venture capital division represents a small fraction of the German group’s turnover and has invested across industries including energy, transport, and healthcare. China ITS has market cap of HK$ 2.48bn at present. Its share price is down 3.8 per cent since the announcement at HK$1.52.

BALTIC DRY INDEX DECLINES BY 11% The Baltic Dry Index (BDI) declined by 11 per cent to 1264 in July 2011 due to a 14 per cent, 6per cent, and 15 per cent fall in Capesize, Panamax and Supramax index respectively. Freight rates also declined in July for smaller vessels like Panamax and Supramax owing to lower Indian exports of iron ore to China due to the monsoon season in India. The Dirty Tanker Index declined by 3 per cent to 721 while the Clean Tanker Index declined by 1 per cent to 684 level in July 2011. Utilisation levels for drill ships, semi-subs and jack-ups marginally improved. Utilisation levels for drill ships, semi-subs and jack-up rigs was reported at 80 per cent, 87 per cent and 80 per cent in July 2011. It is expected that dry bulk freight rates are expected to remain range bound with a negative bias in August on the back of Indian monsoon season which will most likely reduce iron ore exports from India. Also, China could be importing lower volumes of iron ore due to current high level of inventories. China’s iron ore inventory level is at an all-time high of 94 million tonne and steel production in China is expected to remain slow on account of restriction of electricity allocation to steel plants. Utilisation levels for offshore vessels are expected to rise, while charter rates are expected to remain stable in Aug 2011. High capex spend by major global oil exploration/drilling companies is likely to lead to higher utilisation levels for offshore vessels. Tanker freight rates in July 2011, displayed a weak trend. VLCC’s which had shown some improvement in June crashed to negative territory in July 2011, while Suezmax rates increased by 61 per cent and Aframax rates declined by 8 per cent. Substantial oversupply across various categories is keeping the freight rates weak.

WESTERN INDIA SHIPYARD’S Q1FY12 TOTAL INCOME STOOD AT `3812.13 LAKH, UP BY 27.01%; NET PROFIT AT `456.26 LAKH

IN Q1 FY12, PRIVATE PORTS OUTPERFORMED TRAFFIC GROWTH OF MAJOR PORTS, GROWING AT 20% YOY VS 5% YOY GROWTH AT MAJOR PORTS.

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DHL EXPRESS INCREASES CARBON EFFICIENCY IN ASIA PACIFIC DESPITE VOLUME SURGE DHL, the world’s leading logistics company, announced double-digit improvements with CO2 efficiency up 14.1 per cent compared to 2009 for its Express division in Asia Pacific. DHL was the first global logistics provider to set quantified CO2 efficiency targets under its GoGreen programme. DHL Express Asia Pacific started the assessment of its carbon footprint from energy consumption in real estate and ground transport to measure and improve carbon efficiency through abatement programmes. Jerry Hsu, CEO, DHL Express Asia Pacific, said, “As the world’s leading express company, DHL is committed to improving the carbon efficiency of its operations and those of its transport subcontractors by 30 per cent by 2020, compared to 2007. In 2010, DHL Express exceeded the level of our intermediate 10 per cent target for own operations by holding fast to DHL’s GoGreen programme in the face of increasing volumes due to market recovery. Through region-wide initiatives

such as optimising delivery routes, using clean fuels and consolidating facilities, DHL Express in Asia Pacific managed to maintain double-digit efficiency targets despite a 10 per cent increase in total CO2 emissions.” In 2010, DHL Express India achieved 6.0 per cent improvement in carbon efficiency despite total CO2 increasing by 13.6 per cent as the economy boomed. Blue Dart posted an improvement of 6.5 per cent year-on-year driven by stronger volumes, despite CO2 increasing by 18.5 per cent in 2010 versus 2009. Despite increases in fuel consumption, carbon efficiencies were achieved by switching to cleaner fuels such as compressed natural gas (CNG) and liquefied petroleum gas (LPG). The improvements in CO2 efficiency for DHL Express India and Blue Dart’s operations is impressive as the business already registered significant increases in CO2 efficiencies in 2009 due to abatement measures put in place. DHL Express India achieved a massive

COMPU-CALL ENTERS EXPANDED PARTNERSHIP WITH SOURCE TECHNOLOGIES Source Technologies, developer of world-class thermal barcode and MICR printing solutions, has recently announced partnership with Compu-Call, Inc., that offers thermal barcode printers from Source Technologies. Mimi Bartholomew, Director–Alliance Partnerships, Source Technologies said, “Compu-Call is known for their exceptional sales and service throughout the printer industry. They provide a wide range of solutions and work to understand their customers’ business before recommending and subsequently integrating a solution. They are exactly the kind of organization we’re pleased to call our partner.” Compu-Call expressed excitement at the opportunity to represent Source Technologies’ new line of mobile and midrange thermal barcode printers, which are fast becoming a major focus for Compu-Call. The printers, which represent ground breaking technology and functionality, present a tremendous opportunity for the company and their VARs to further differentiate amidst a very competitive market. “Through extending our partnership with Source Technologies, we are essentially adding innovative thermal solutions that will give us a more competitive and differentiated portfolio, intended to better equip our Resellers to meet and exceed the thermal print requirements of their customers. Additionally, this will enable our partners to enrich their value and establish incremental revenue and annuity streams for their business,” said Matt Moylan, Chief Revenue Officer, Compu-Call.

SCI TAKES DELIVERY OF A 80 T BP ANCHOR HANDLING, TOWING & SUPPLY VESSEL M.V. SCI PANNA

ABG SHIPYARD Q1FY12 NET SALES AT `522.60 CRORE, UP 16.27%; NET PROFIT AT `40.06 CRORE, JUMPS 4.3%

29 per cent improvement in 2009, and Blue Dart achieved 10 per cent improvement in the same year. Malcolm Monteiro, Senior VP & Area Director, South Asia, DHL Express, said, “The results of 2010 carbon accounting process demonstrate that in addition to the significant improvements in 2009, we have been successful in continuing to find ways to further improve our carbon efficiency.” He further addes, “In India, at both DHL Express and Blue Dart, ground fleet carbon emissions are being cut through replacement vehicles that use alternative fuels as well as the deployment of new technology such as Blue Dart Smart Truck, which optimises route planning and capacity.” Successfully operational in Europe, Blue Dart Smart Truck will hit the road in Bengaluru as the first emerging market pilot kicks off. Blue Dart Smart Truck cuts journey lengths and miles traveled, minimising carbon footprint for courier deliveries and pick-ups.

JNPT TO MOBILISE RS 1,500-CR THROUGH TAX FREE BOND Country’s biggest container port JNPT has said that it will raise Rs 1,500 crore through a tax free bond issue this fiscal for undertaking dredging works. The money will fund the first phase of Rs 5,500 crore dredging project to increase the draft of the Mumbai harbour’s channel, a top official said. “We can issue infra bonds of up to Rs 5,000 crore and we will be raising Rs 1,500 crore before March,” said L Radhakrishnan, Chairman, Jawaharlal Nehru Port Trust recently. It will raise Rs 500 crore through 10 year bonds and the remaining Rs 1,000 crore through 15 year maturity bonds, he added. JNPT is undertaking a two-phased project of dredging which will increase the draft of the channel to 17 metres from the present 11 metres. The first phase will be completely funded through the bond issue while the JNPT is contemplating multiple options to fund the second phase of Rs 4,000 crore. The JNPT also plans to develop a Rs 4,000 crore special economic zone spread over 750 acres near the port situated on the east of downtown Mumbai, he said

SEPTEMBER 2011 • SMART LOGISTICS • 13

NEWS ANALYSIS

COLD CHAIN CONSULTING

ENABLER

FOR

ROBUST DEVELOPMENT A one-stop solution, which provides expert consultancy to new entrants in the highly unorganised Indian cold chain business as well as directs existing players towards making the right choice in terms of technology, processes and scientific know-how is the need of the hour. Taking this into consideration, Ingersoll Rand has recently forayed into cold chain consultancy in India to help entrepreneurs take informed decisions pertaining to cost-efficient delivery and offer optimal customer service. SUMEDHA MAHOREY THE size of the Indian cold chain market, which is growing at the rate of 20-22 per cent, is presently estimated at Rs800 crore. With India being the world’s largest milk producer; the second-largest producer of fruits & vegetables and the third-largest producer of food grain & fish, the criticality of cold chain infrastructure has become all the more important. In a country where millions go hungry, India wastes nearly 30-35 per cent of its perishable produce consisting of fruits & vegetables, meat, poultry, marine & milk products, thereby resulting in an estimated loss of approximately US$11 billion. This is largely due to the non-availability of an appropriate

14 • SMART LOGISTICS • SEPTEMBER 2011

infrastructure – both static and mobile. Cold chain is a logistics system that provides a series of facilities for maintaining ideal storage conditions for perishables from the point of origin to the point of consumption in the food supply chain. Hence, cold chain logistics is a must for the transportation of perishable goods and pharmaceuticals. Nonetheless, this segment is fraught with many challenges in India; some of which include lack of proper technological support, uneven distribution of cold chain facilities, cost structure, power supply, increased regulatory oversight and lack of service level agreements with designated service providers for cold chain shipments.

There is a lack of adequate infrastructure, temperature-controlled equipment and facilities. The cost of operations is also very high due to inefficient technology and in addition, there is a lack of trained personnel and integrated warehousing & logistics operations in India. All these pose serious challenges for existing logistics players as well as entrepreneurs who wish to enter this market.

BUILDING THE FOUNDATION A robust cold chain providing controlled temperature and humidity & gas control is the need the hour. Additionally, understanding the economic value of supply chain decisions, prioritising

improvements in the supply chain, reducing the cost and time of field testing, making faster & better decisions about processes, and the use of a simulation environment to help define standards are some of the other necessities of this market. But how can new logistics players build robust infrastructure for cold supply chains and bring about a drastic shift in the way perishable logistics is carried out? Building an end-to-end cold chain infrastructure requires technical competency, system design and application processes that are specific to different types of perishable products. It needs design of both, static and mobile infrastructure to enable the delivery of fresh food from farm to fork. Specific interventions that are required include, inducing temperature-controlled gas flow, moisture content, thermal insulation and materials which all form an integral part of efficient cold chain design principles. Having a one-stop solution, which provides expert consultancy to new entrants in the cold chain business as well as direct existing players towards the right choice of technology, processes and scientific know-how will immensely help the Indian cold chain business. Taking this into consideration, Ingersoll Rand, a world leader in creating and sustaining safe, comfortable and efficient environments, has recently announced its foray into the cold chain consultancy segment in India. Commenting on the move by Ingersoll Rand, Jayakirshnan Nair, Head – Purchase, Parle Agro, says, “There are limited resources, which are currently available in the Indian cold chain market. Although new investments are coming in because of government support in terms of subsidies, investors who are ready to put up cold chains are at a loss in terms of choice of location, technological know-how, etc. Additionally, this is one business where the returns on investment are achieved in about 7-8 years. Thus, if a company forays into providing consultancy services for setting up as well as providing relevant advice to ensure efficient running of a cold chain business, it would definitely help the Indian cold chain logistics market.” He adds, “Hand holding is definitely needed, as there is a lot of ambiguity in the minds of investors and many questions remain unanswered even today. That is the reason why people are cautious when entering into the cold chain business.”

ANSWER TO MULTIPLE ISSUES Designing, developing and implementing cold chain solutions are particularly essential for emerging economies like India where the rate of food wastage is high. Economics can only be justified through value generation and prevention of waste. Talking about the scenario of the Indian cold chain industry, Venkatesh Valluri, Chairman & President, Ingersoll

coolers, refrigerated transportation of various perishables, structural planning, storage knowledge, automation and remote tracking. We will be consulting in two large domains – cold chain infrastructure and the mobile cold chain infrastructure.” The scope of cold chain consulting covers product handling, product storage knowledge, product storage facilities, designing and specifying product storage

The cold chain business in India is coming up. If handled appropriately, there are good financial profits. It is also a very good social addition that these entrepreneurs will be doing to the country by curbing food wastage through cold chain intervention. MANJUNATH MS, LEADER – BUSINESS CREATION, COLD CHAIN, INGERSOLL RAND INDIA

Rand India, opines, “Even though, India has embarked on laying standards for the cold chain industry, there is still a deficiency in following and designing processes towards building world-class infrastructure because of lack of knowledge and technical competency. The company intends to fill this gap because it is a world leader and has developed many of the industry best practices over a period of time through responsible consulting.” “The entire cold chain supply process, which involves the delivery of perishable products from farm to fork, requires an optimisation approach. The company would bridge the needs of such a chain,” he adds. India has got varying temperature zones, soil conditions, crop growing patterns and rainfall, especially for fruits & vegetables. The company sees this as an opportunity to provide its services to creators of cold chain infrastructure – both mobile and static – in terms of consultancy, design and technology interventions. Elaborating on the company’s expertise, Manjunath MS, Leader – Business Creation, Cold Chain, Ingersoll Rand India, says, “We have been in the business of cold chain infrastructure solutions across the globe for the past many years. With the launch of the consultancy business in India, we are leveraging on our expertise in various domains related to cold chain and bringing expert consultancy to entrepreneurs who are getting into the cold chain business.” Talking about the expertise, he further adds, “Our expertise includes cold warehousing, cold storages,

facilities, automation systems, cold chain capacity planning, understanding various aspects of cold chain interventions in transportation storage and retailing of the product through its entire journey. Explaining the company’s intent, Manjunath MS points out, “We will not only support the existing players who are planning modernisation and expansion of their businesses, but also support new entrepreneurs who are entering into this business in a big way.”

OF LUCRATIVE OPPORTUNITIES The cold chain industry in India is now coming of age mainly because of proactive support from the government towards the development of cold chain infrastructure. The government has incentivised entrepreneurs via subsidy programmes to ensure that a fair amount of investment comes into the cold chain business. This is probably the right time to enter this market. Advising entrepreneurs to enter this lucrative market, Manjunath MS articulates, “The cold chain business in India is coming up. If handled appropriately, there are good financial profits. It is also a very good social addition that these entrepreneurs will be doing to the country by curbing food wastage through cold chain intervention. The quality of food & nutrition value will improve with the rapid development of the cold chain business in India. This business is surely a sunrise business in the country. My advice to entrepreneurs is to enter it with proper consulting and direction.”

SEPTEMBER 2011 • SMART LOGISTICS • 15

PRE-EVENT REPORT

FROST & SULLIVAN

DEFINING

FUTURE SUPPLY CHAIN STRATEGIES

With India slated to achieve major economic milestones, it is the logistics & supply chain domain that is sure to drive economic transformation. Looking at the promising growth scenario, several Indian logistics companies are coming up with innovative practices, which will help them ride high on the growth wave and remain globally competitive. To steer the growth of companies in the right direction, Frost & Sullivan with Smart Logistics as the media partner is organising a strategy workshop to develop a roadmap on ‘Future Supply Chain Strategies’. Slated to be held from September 14-16, 2011 in Goa, the event is sure to acquaint attendees with the best of supply chain practices. THE logistics market in India has been developing at a fast pace despite having witnessed an economic slowdown worldwide. Going by the statistics, the Indian logistics market recorded revenues of about $82.10 billion in 2010, thus registering a growth of about 9.2 per cent over the previous year. The main drivers fuelling this growth include the rapidly rising fortunes of the country’s manufacturing and retail sectors & rising international trade. It also includes ongoing infrastructure development initiatives undertaken by the Government of India including the dedicated freight corridors project, the development of ports, the building of logistics hubs & warehouses, technology upgradation and huge investment by private players. Cost saving, improvement in delivery timelines and preference to let professionals handle the logistics functions are the top reasons for outsourcing logistics functions to specialist logistics service providers (LSPs) by end users (manufacturing companies) across industries. However, LSPs have not been able to meet customer expectations on key parameters such as the ability to deliver on time, security & damage control of goods, process improvement capabilities and nationwide reach, as reported by the end users in Frost & Sullivan’s ‘Annual Indian Logistics Industry Benchmarking – Voice of the Customer Study’. Covering various segments of the logistics market, the Frost & Sullivan’s study identified a huge difference of

16 • SMART LOGISTICS • SEPTEMBER 2011

perspectives between LSPs What’s in store for participants? and end users regarding the future needs and Frost & Sullivan’s workshop will facilitate challenges in logistics ideation and evaluation among participants functions across industries. regarding: Hence, with an intention to aid the logistics fraternity, • Emerging focus areas for future supply the first exclusive strategy chains workshop on the logistics • The best methods of collaboration between industry, ‘Future Supply LSPs and end users Chain Strategies’, was • Desired practices for supply chain conducted in 2010 by Frost optimisation. & Sullivan’s Transportation and Logistics Consulting Prem Kumar Verma, CEO, Tata Motors Practice. It established a unique platform Distribution Company; Amit Mukherjee, for LSPs and end users to deeply explore VP – SCM, RPG Spencers Retail; Kalpesh the state of supply chains in key industries, Pathak, AVP – Corporate SCM, Fiat Motors identify the challenges & ways to address India; Bhagwan Das, Director – Supply them and above all, envision the potential Chain, Alcatel Lucent India); Sudhir Goel, strategies for future supply chains of these Logistics – Head, Acer India; Prashant industries. Sharma, Senior VP & Head – Global FUTURE SUPPLY CHAIN STRATEGIES Demand & Supply Organisation, Cadila – THE WAY AHEAD Healthcare; Vinnie P John, Value Chain Frost & Sullivan’s second annual logistics – Head, Glaxo SmithKline and Ramnath S, strategy workshop titled ‘Future Supply VP – Supply Chain, Lifestyle International, Chain Strategies – The Way Ahead’ among others, would participate in the emphasises on the need for a combined workshop as industry experts. In its endeavour, Frost & Sullivan will effort from the logistics end users and facilitate ideation and evaluation among service providers through collaborations, participants regarding the emerging trust and building relationships. This focus areas for future supply chains, the workshop aims to create a roadmap for best possible methods of collaboration investments made through collaborations between LSPs and end users, and desired between service providers and end practices for supply chain optimisation. The users, which would result in visibility and workshop will also discuss the development real-time information and thus lead to the of the roadmap comprising the next level formation of ideal future supply chains. of practical, feasible and sustainable supply Eminent personalities from leading chain models essential for organisations. logistics end user industries such as

PRICE TRENDS Road freight index chart for August 2011

IRFI TREND FOR AUGUST 2011: The RFI stood at 174 Points for the month of August 2011, which is same in comparison to the same period last year.

ZONAL FREIGHT TRENDS The overall freight rates have increased slightly by 0.45% as compared to the previous month. The freight rates from Ex-Delhi rates has registered a highest increase in rates by 6.53% where as Ex-Kolkata rates has registered a highest decrease in rates by 4.73% compared to other metros. The freight rates from Ex-Delhi are high due to insufficient return loads. TRENDS FOR AUGUST (Y-o-Y)

COMMERCIAL VEHICLES:

172

171 174

The cumulative sales of commercial

174

166

vehicles registered a growth of 17% for April–July 2011 as compared to the same period last year and the production grew at 13% in the month of July 2011 as compare to July 2010. Medium & heavy commercial vehicles grew at 6.4% and light commercial vehicles grew at 25.64%.

2007-08

2008-09

2009-10

2010-11

2011-12

Index trend for six years

FORECAST FOR SEPTEMBER 2011: The RFI in September 2010 over September 2009 had registered an increase of 3 points. It is expected that as the festival season draws nearer, volumes and freight rates will see an increase in upcoming months.

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

SEPTEMBER 2011 • SMART LOGISTICS • 17

CHAIRMAN, WDRA VIEW FROM THE TOP

‘35 MILLION MTs AN ADDITIONAL

WAREHOUSING CAPACITY WILL BE REQUIRED IN THE NEXT

Image Courtesy: Dileep Prakash

5-10 YEARS

’

“The storage space available in the country is not sufficient to cater to the procured stocks. As a result, substantial quantity of food grains is stored in covered and plinth. Sufficient modern warehousing capacity should therefore be created in the country to store and preserve the food grains procured for the central pool,” says Dinesh Rai, Chairman, Warehousing Development & Regulatory Authority (WDRA). In an exclusive interaction with Arindam Ghosh, he talks about how WDRA is poised to transform the present scenario. Excerpts…

SEPTEMBER 2011 • SMART LOGISTICS • 19

View from the top, continued

THE CHANGING WAREHOUSING LANDSCAPE

GAP BETWEEN THE PRODUCE AND STORAGE CAPACITY

procured for the central pool.

With the enactment of the Warehousing (Development and Regulation) Act, 2007 and the establishment of the Warehousing Development and Regulatory Authority (WDRA), the negotiable warehouse receipt system has been introduced for the first time in the country. The system was earlier recommended by a number of Expert Committees and Working Groups set up by the RBI, Ministry of Agriculture, etc. The Negotiable Warehouse Receipts (NWRs) issued by the warehouses registered under this Act would help farmers seek loans from banks against NWRs to avoid distress sale of agricultural produce. It will also be beneficial for a number of other stakeholders such as banks, financial institutions, insurance companies, trade, commodities exchanges as well as consumers. WDRA has been recently set up and the process of recruitment is in progress. Despite the paucity of staff, WDRA has successfully completed the following tasks: • A Warehousing Advisory Committee has been set up • Rules and regulations have been drafted after consulting all the stakeholders • Accreditation agencies have been appointed • Nearly 338 applications for registration of warehouses have been received • Around 106 warehouses have been accredited and registered

The warehousing capacity available in India, in public, cooperative and private sectors is about 108.75 million MTs. The break up is as follows:

SCENARIO BY THE END OF 2012

Organisation

Food Corporation of India (FCI) Central Warehousing Corporation (CWC) State Warehousing Corporations (SWCs) State Civil Supplies Cooperative Sector Private Sector Total

Storage Capacity (Million MTs)

32.05 10.07 21.29 11.30 15.07 18.97 108.75

The storage capacity available with FCI and a part of the warehousing capacity available with CWC and SWCs is used for the storage of food grains procured by the government agencies for the central pool. The storage space available in the country is not sufficient to cater to the procured stocks. As a result, substantial quantity of food grains is stored in covered and plinth. As per the estimates, an additional 35 million MTs warehousing capacity will be required in the next 5-10 years. There is also a need for additional warehousing capacity in India. Due to record levels of procurement in the last four years, several states have been facing a A capacity of about 15.2 million MTs is proposed problem of covered to be created in 19 states under PEG-2008 storage capacity. In the current rabi through private sector participation and central marketing season & state warehousing corporations. This capacity (RMS) 2011-12, FCI is expected to be completed in the next 2-2.5 has procured more years. than 280.31 lakh tonne of wheat, which is around 30 lakh tonne higher • National conferences at New Delhi, than the earlier record procurement. As Bengaluru and Chandigarh have been on June 1, 2011, FCI held 65.5 million organised • Awareness programmes for farmers MTs of wheat and rice – the highest in association with the Central level ever archived. This is against Warehousing Corporation (CWC), buffer and strategic norms of 319 the Indian Grain Storage Management lakh MTs of food grains. Therefore, and Research Institute (IGMRI) availability and augmentation of storage and the National Institute of capacity is one of the main priorities Agricultural Marketing (NIAM) are of the Government of India. Sufficient being organised modern warehousing capacity should • Electronic warehouse receipt regulation therefore be created in the country is in the advanced stage of drafting. to store and preserve the food grains

20 • SMART LOGISTICS • SEPTEMBER 2011

To tackle the situation arising out of high procurement levels of wheat and rice as a result of increase in minimum support price (MSP) during the last five years, the government formulated the Private Entrepreneurs Godowns Scheme (PEG-2008) in 2008 to create additional storage capacity for food grains through private sector participation. A state-wise mapping of existing capacities and analysis of additional requirements was undertaken based on subjective criteria by state-level committees & a high-level committee of FCI. Under the scheme, FCI would now give a business guarantee of 10 years for assured hiring. In addition, a capacity of about 15.2 million MTs is proposed to be created in 19 states under PEG-2008 through private sector participation and central & state warehousing corporations. This capacity is expected to be completed in the next 2-2.5 years. To make the scheme more attractive for private entrepreneurs, the guarantee period was increased from five to seven years and, at present, to 10 years. The ceiling of rate fixed for the hiring of godowns has been revised from `3.80 per quintal per month to `4.78 per quintal per month. In appropriate cases, the high-level committee has been empowered to decide higher rates by recording reasons in writing.

INITIATIVES TAKEN TO INVITE PRIVATE PLAYERS To make PEG-2008 for the construction of warehouses more lucrative and increase private sector participation, its guarantee period has been increased up to 10 years and storage charges have been increased as well. It has received a good response from private players. Moreover, cold chain and post-harvest storage has been accorded the status of infrastructure under the scheme of Ministry of Finance for financial support under viable gap funding in the infrastructure sector.

MAKING STORAGE FACILITIES MORE QUALITATIVE WDRA will encourage only scientific warehouses, which would follow scientific practices for storing food grains and other commodities. They will have trained warehousemen and WDRA will also organise training programmes for them.

CHAIRMAN, WDRA VIEW FROM THE TOP

All these efforts would contribute towards minimising wastage of agricultural commodities.

STEPS TO STRENGTHEN THE WAREHOUSING SECTOR The following steps could help strengthen the warehousing sector: • The warehouses should be constructed with BISapproved standards and design In the last four years, several states have been facing a problem of covered storage capacity. In the current rabi marketing season (RMS) 2011-12, FCI has procured more than 280.31 lakh tonne of wheat, which is around 30 lakh tonne higher than the earlier record procurement. As on June 1, 2011, FCI held 65.5 million MTs of wheat and rice – the highest level ever archived. • Banks should make credit facilities at cheaper rates available to the warehousing sector • They should have trained warehousemen • A projected shift to a national goods & services tax (GST) regime is also likely to provide further impetus to the warehousing sector • The State Government should help warehousing developers by simplifying the procedure of land use (conversion from agriculture to non-agriculture land).

WDRA’s FARMER-FRIENDLY INITIATIVES WDRA is keen to ensure that more and more farmers store their agricultural produce in registered warehouses so that they may avail of the benefits of NWR, including loan from banks, at cheaper interest rates. The warehousing authority has requested the Ministry of Finance to extend the crop loan facilities to post-harvest loan on NWR. In addition, WDRA has organised training and awareness programmes for farmers in different states through expert organisations like IGMRI, Hapur; NIAM, Jaipur and CWC.

FUTURE BEHOLDS The government has taken several positive initiatives, which will offer tremendous scope to the Indian warehousing sector. As I earlier mentioned, it has accorded the status of infrastructure to cold chain and post-harvest storage under the scheme of financial support for viability gap funding for infrastructure sector by the Ministry of Finance and the negotiable warehouse receipt has been exempted from stamp duty under the Indian Stamp Act. Moreover, the production of food grains and other agricultural commodities is increasing. With such promising prospects in place, the Indian warehousing sector certainly has a bright future.

SEPTEMBER 2011 • SMART LOGISTICS • 21

INSIGHTS & OUTLOOK

SAFETY & SECURITY

SAFER AVENUES TO ENSURE BETTER PRODUCTIVITY There is more to warehouse safety than compliance with fire codes and OSHA regulations. Unfortunately, too many warehouses look at safety as meeting the minimum mandated by law. Often, neither goes far enough. However, a safe environment not only helps keep inventory secure, it also adds to the value-added services and increases productivity and efficiency of the company in providing good logistics service to their customers. PURNA PARMAR WAREHOUSES in India have, for a very long time, been perceived as a cost centre that serve the basic purpose of storage. Companies have grossly ignored the value that they can add in bringing down costs and improving efficiency. Warehouses having infrastructure customised to the specific needs of the business and integrated with the rest of the supply chain can have a plethora of benefits like better inventory visibility and control; improved turnaround time; value

22 â&#x20AC;˘ SMART LOGISTICS â&#x20AC;˘ SEPTEMBER 2011

additions like consolidation, kitting, etc.; mother distribution hubs reducing overall storage cost and improving distribution, etc. But it is only when companies realise the true potential of warehousing as a value creator that they will be inclined to invest in quality infrastructure, including aspects like safety and security. Ensuring safety and security in warehousing is considered an additional cost. However, companies need to realise that building a safe warehouse can also help them attain

higher productivity and greater customer satisfaction.

THE PREREQUISITES Building a safe warehouse goes much beyond compliance of basic fire safety codes or Occupational Safety and Health Administration (OSHA) regulations. With the advancements in technology, there have been many innovative ways, which enable companies to not just build a safe warehouse, but also create a healthier

Image Courtesy: Future Supply Chains

Creating a safe warehouse

environment for its employees. However, there are a few prerequisites one needs to keep in mind before investing in safety systems and solutions for a warehouse. Since safety is one of the most important aspects that have to be considered by warehouse operators. Warehouses are generally designed, keeping in mind the type of merchandise that needs to be stored. Therefore, the prerequisites for building a warehouse that is safe for both, people working there and the goods stored, vary with the commodities that are going to be handled at that particular facility. There are a few basic safety measures that every enterprise has to adopt, regardless of the nature of goods handled. These include, fire safety, electrical safety, safety from mechanical devices, etc. Explaining the same, Kiran Salunke, MD, Siesta Logistics Corporation, says, “In order to build a safe and secure warehouse, we have to strictly adhere to guidelines laid down by the authority

• By creating a safer workplace, you will also reduce damage to and loss of warehouse equipment and fixtures along with stored inventory. • Determining hazard classifications and code requirements calls for an expert to help you understand the details. • Buy enough of garbage bins to ensure that employees do not have to walk far to dump garbage. If they do, debris will accumulate. Make sure someone is in charge (usually the person responsible for building maintenance) of emptying them. • Teach employees that items can often be moved with equipment such as a dolly, a hand-truck, or a forklift. Use mechanical help wherever possible. • Make sure employees know where the on/off and emergency stop buttons are on equipment they work on or around. • Make sure that the employee training includes locations of fire extinguishers and how to use them. • Prohibit smoking in your warehouse and post ‘No Smoking’ signs. • Pay attention to changes in packaging material, as they can have a substantial impact on the flammability of materials in your warehouse. • Hazardous materials include a range of industrially produced materials such as solids, gases, flammable liquids, explosives and oxidisers. Not surprisingly, they have their own codes. • Give pre- and post-training tests to confirm that employees have retained the information. • Educate senior management about occupational safety and health so they will understand how it helps achieve business objectives. • As part of training, ensure that employees responsible for shutting down certain equipment understand the conditions when they should perform the task or immediately leave. • Make safety part of employment reviews. In addition to penalising employees for not following safety rules, reward them for making your operation a safer place to work. • Do not let anyone claim that they do not have time for safety. Make sure that the management is aware of the importance of safety and incentivised to reduce and eliminate hazards. in terms of location of the facility, layout & design, electrical fittings, etc. At Siesta Logistics, we ensure that the design of the facility aids easy evacuation in case of a fire, with proper fire exits. The installation of modern devices that indicate fire or other hazards is a must. The floor is designed to prevent any accident while lifting or stacking. Most often, in order to obtain clearance from the relevant authorities to run the facility, all operators usually comply with these norms initially, but once they become functional, the norms take backseat. It could be for various reasons. But they certainly jeopardise the safety of both, workers and the goods stored. Most accidents that occur at the storage facilities are a result of poor maintenance and not really because of poor design.” According to Ajay S Mittal, Group Chairman & MD, Arshiya International,

building warehouses with potent infrastructure and technology to maintain product safety & sanctity needs in-depth understanding, detailed planning and investment. But above all, it needs strong commitment from the people at stake. “Safety and security begin with a positive mindset. It begins with the need to uphold the safety and security standards set within the organisation, at all times. Inculcating a culture of safety & security is a top-down approach and requires the involvement of all stakeholders within the organisation. Once people and infrastructure are aligned and integrated into the system, it creates an infallible shield against any untoward event within the warehouses,” he says. Elaborating further on Mittal’s views, Varun Kumar, GM, DRS Logistics, opines, “There are several prerequisites for

SEPTEMBER 2011 • SMART LOGISTICS • 23

Safety & Security, continued

building a safe and secure warehouse. sums of money on constructing a worldtherefore introduced a novel method of These would include factors like identifying class warehouse, if he still pays the same eliminating wastage with an improved the correct location, its construction and rental for using a traditional warehouse. method of handling goods. Instead of approval from local legal authorities like Companies must understand the focussing on the need for space to store MCD, Shop & Estb., fire and police, etc. importance and benefits of world-class the goods, we emphasise on the goods The layout of the warehouse should be standard warehouses and the benefits itself. We select warehouses that are best well defined much before the construction they offer in terms of safety, security and suited for the specific goods for storage starts. The company should not only fast movement of goods even if it means with all the required facilities and identify consider the internal layout, but must paying higher rentals. However, with the that as a facility for handling goods. If more also look into aspects like movement of advent of MNCs coming into India, the and more warehouse operators adopt this vehicles, toilets and emergency exits, etc.” scenario has changed as they only hire model, they may be able to avoid wastages, He further adds, “All the warehouses those warehouses, which comply to their secure goods and improve volumes.” must use standard electric wirings and set standard norms. This, in a way, has Mittal strongly believes that the change ISI-approved equipment and accessories. forced warehouse companies to construct in the industry mindset is already gaining Apart from these, appropriate fire fighting world-class standard warehouses. In fact, momentum and more so with foreign equipment like fire extinguishers, water the demand for these kind of warehouses players entering into the Indian market. sprinklers, water tank, sand bucket, etc., is on the rise.” These players have been using modern must also be used depending on the warehousing infrastructure with robust CHANGING THE INDUSTRY MINDSET product’s requirement. In addition, the safety & security features in developed With warehousing being widely considered contact numbers of emergency services countries and seek similar infrastructure in a cost centre by companies, warehousing including those of the nearest police India. Many Indian companies competing service providers have been deploying station, hospital, fire station, electricity at the global level are also looking at minimal investments with sub-standard board office, senior company officials etc., quality warehousing infrastructure to infrastructure and justifying it with low must be painted on the front wall.” sharpen their competitive edge as well as storage rentals. More often than not these Moreover, securing a warehouse meeting all quality standards on a global result in product pilferage, poor inventory from wrong handling and anti-social platform. visibility, lack of skilled manpower and elements is also important feels Dilraj Contradicting Mittal’s perspective, facilities for value addition, hidden costs, Singh Gandhi, Principal Consultant, Kumar feels that most of the warehouses etc. Safety and security here recede into PricewaterhouseCoopers (PwC) India. available in India are adopting conventional the background. “Securing a warehouse would imply practices where the landlord provides the Warehousing, in India, still has a security from the various factors like natural basic structure & a fire extinguisher and long way to go in terms of providing calamities, theft, wrong handling and antileaves it to the customer to install the safety and security to its customers. social elements like terrorism among desired safety and security equipment. The logistics industry here still has a other mishaps,” Gandhi says, adding, “The “Only big MNCs focus on safety and traditional approach to its functionality. process of safeguarding a warehouse security of their employees & material. Commenting on the same, Salunke begins right from screening the material They have a system of warehouse elaborates, “Warehouse operators heavily that comes into the warehouse, stacking auditing, which covers this aspect,” he the material and keeping the says. Emphasising on the warehouse under strict vigil need for safety and security Safety and security systems not only help by keeping an eye on people in warehouses, he justifies, safeguard inventory, but also help companies who access the warehouse. It “Other companies must also is important to have the right understand the importance of gain higher customer satisfaction and earn better tools to ensure that all these a warehouse in their business. proﬁt margins. Even simple safety practices like factors & process handling The warehouse is the backbone mock drills and implementing basic process of material is standardised of any industry, but it is yet standards in the warehouse can help build a and well-defined so that the to get its due recognition. In robust and safe warehouse. loopholes are identified and addition, all companies must immediately corrected.” have an auditing department, rely on volumes regardless of the type of which should conduct physical verification CHALLENGES AND OPPORTUNITIES goods they handle. A typical warehouse of the warehouse before giving it a nod The major challenge a warehouse faces is in may be best suited to handle grain, but to operate.” terms of getting funds. Since warehousing it may also be used to handle fresh fruits Gandhi believes that the major reason does not have industry status, it faces and vegetables. As a result, a portion of for such an attitude is that 80 per cent of hurdles when trying to obtain funds from these perishable goods are lost, owing to warehousing industry is unorganised and banks and other financial institutions. the lack of appropriate facilities, thereby fragmented. Hence, even if companies There are various other challenges faced causing losses to the customer. This do their bit to keep the safety quotient by warehousing companies. Commenting happens primarily due to the logistical high, it does not serve the purpose. on the same, Kumar explains, “One of arrangements that operators presently “Companies often fail to promote safety, the major bottlenecks is that an investor have.” due to insufficient time, inadequate does not find it feasible to invest huge He adds, “We, at Siesta Logistics, have resources or the opportunity to save

24 • SMART LOGISTICS • SEPTEMBER 2011

money through cutting corners,” he says, and so, in case of a mishap, it might get installing the same, Mittal explains, “Foreign averring, “In the long run, however, a safe difficult to reach the warehouse. Another and Indian companies are increasingly warehouse delivers important cost savings aspect is the space allotment within the demanding safe and secure warehouses. through higher employee satisfaction and warehouse. The warehouse should be And so, this is an opportunity for service increased productivity, fewer workplace designed in such a way that it facilitates providers to provide quality infrastructure disruptions & reduced absenteeism and movement of vehicles and people. and use it as one of the selling points equipment downtime. You can extend Designing can be for customised products against competition. This also results in the life of your warehouse infrastructure & items, for instance for inflammable lower insurance premiums for products such as storage & material stored in the warehouses, handling equipment, as well as reduces pilferage, product A safe warehouse directly impacts the productivity reduce damage to inventory.” damage and also positively or output of the manpower deployed. If output impacts the overall operational TECHNOLOGY TRENDS efficiency of the warehouse increases, then the bottom-line increases. The Technology is a very effective and the workforce.” He adds, turnaround time (TAT) of products also increases, tool to help companies build “Warehouses with proper thereby resulting in quicker monetary returns. a safe and secure warehouse. safety & security measures According to Gandhi there in place can operate at are several cost-effective technologies material, the warehouse must have proper higher efficiency and maximum capacity available that can help companies build ventilation, no wood is used to build the utilisation without any incremental a safer environment. “Simple things like warehouse interiors, and materials used damage, delays due to increased activity identity proof cards for employees can to build the warehouse should be nonor infrastructure constraints. Thus, safety help ensure that there are no trespassers inflammable and light. It should be able to and security can go a long way in giving in the warehouse vicinity. Apart from take the load of the material and should a boost to the bottom-line of companies warehouse management systems (WMS), have proper flooring. Also, the electric and service providers alike.” Indian and material handling equipment (MHE) with circuits should be well kept and checked foreign companies are getting the same radio frequency identification (RFID) with at regular intervals,” says Gandhi. safety and security standards that exist “Companies must also consider factors backend enterprise resource planning in developed countries and are using like free movement of vehicles & employees (ERP) systems can also help companies these warehouses as consolidation, value and basic amenities like separate toilets for build a safe inventory management addition & distribution hubs for domestic men & women staff. In addition, latest MHE system.” To this, Kumar adds, “The as well as Export-Import (EXIM) cargo.” and storage equipment must be used. The latest technologies in IT and MHE have Offering another perspective, Kumar electric wiring must be of standard quality facilitated warehouse employees, but says, “The major contribution of a safe and all major electric junction boxes many companies are yet to install the warehouse is the productivity or output must be installed outside the warehouse. equipment in their warehouses. Most of the manpower deployed. If output Mock drilling must be made compulsory companies invest in WMS for financial increases, then the bottom-line also for warehouse employees, so that they reasons, while a majority do not invest in increases simultaneously. The turnaround are trained to handle exigency,” Kumar MHEs or storage systems, which ensure time (TAT) of products also increases, elaborates. fast and safe movement of goods. They which results in quicker monetary do not realise that installing the same returns.” BOOSTING THE BOTTOM-LINE doubles productivity as none of them While investing in safety equipment and SAFETY ENHANCES PRODUCTIVITY measure the actual impact. For instance, Safety and security systems not only other solutions might seem expensive, measure the performance of a worker help safeguard inventory, but also the benefits it offers in the long run are who manually takes 100 kg of bags inside help companies gain higher customer immense. It not only helps companies the warehouse and his productivity when satisfaction and earn better profit margins. safeguard inventory from damage, theft he uses a pallet trolley or conveyor belt Even simple safety practices like mock and other mishaps, but also helps boost at the end of the day and you will realise drills and implementing basic process the company’s bottom-line. “Companies the difference.” standards in the warehouse can help build do not realise that although these high ESSENTIALS OF DESIGNING A SAFE a robust and safe warehouse. Moreover, tech security solutions might be a oneWAREHOUSE only installing safety equipment in the time expense for the company, in the Another aspect of building a safe warehouse does not serve the purpose, long run, it can help companies save warehouse is designing the warehouse it is also important to train employees much more, as the losses incurred due in such a way that it not just protects on how to use it. Employees must be to the loss of inventory or theft would inventory, but also increases productivity aware of the layout of the warehouses, be much more than the cost of installing and, in turn, helps achieve higher customer equipment installed for safety, emergency security systems. Moreover, such instances satisfaction. “One of the most important exits, etc. In addition, signboards must put the company’s reputation at stake and aspects while designing a warehouse is be fixed in all warehouses, mock drills installing security systems could act as a accessibility of the warehouse as well as should be conducted frequently and all value-added service that the company can movement within the warehouse. Most safety equipment must be periodically offer it customers,” says Gandhi. warehouses are located far from city areas checked. Commenting on the benefits of

SEPTEMBER 2011 • SMART LOGISTICS • 25

INSIGHTS & OUTLOOK

MINING EQUIPMENT

ENSURING SAFE MINE OUTPUT TRANSPORTATION Coal and iron ore cargo loading at an optimum level in vessels can be ensured through proper functioning of the heavy equipment working at the mining site. Proper functioning of the equipment will facilitate timely loading and transportation of railway wagons & hauler trucks destined for the port of loading iron ore and coal. This, in turn, will ensure timely vessel turnaround. TO ensure the smooth functioning leading to colossal revenue loss. involved in the equipment, design and of equipment at the mining site or at Prior to deploying heavy mining ease of maintenance into consideration. the point of cargo origin, it is crucial to equipment, mining contractors & operators The selection parameters are important have a look at the safety aspects of the should take factors such as technology to abide to, as capital cost of heavy equipment. This is because mining equipment are colossal. To ensure proper maintenance of the machine the equipment are heavier Heavy mining equipment for and bigger in size. Moreover, the transportation of coal and and thus ensure smooth operation, the contractor unsafe operation of equipment iron ore cargo includes heavy should take into account the after sales service can lead to major breakdown haulers and tipper trucks. capability of the equipment manufacturer or of the cargo output and There are other equipment distributor. loading operations, thereby for taking out the output.

26 â&#x20AC;˘ SMART LOGISTICS â&#x20AC;˘ SEPTEMBER 2011

The prime aspect before selecting like digging and lifting. Similarly, testing the The data generated after frequently big mining transportation equipment is sensitivity of controls is also extremely monitoring the equipment will also indicate the engineering technology involved. In important, especially during critical as to when the equipment requires addition, facts like technology involved for operations, to avert a possible accident. In maintenance. Minimal maintenance can cooling the engine and technology used addition, deputing a skillful operator and be ensured by following the guidelines for fuel injection should be taken into proper project site planning will improve provided by the equipment manufacturers. account as this would be the major reason the situation to a great extent. This broadly involves: to determine the efficiency of the machine. • Selection of the site conditions and MAINTENANCE Also, multipurpose utility of the machine using the machine accordingly Maintenance is an important issue that should be taken into consideration as • Replacement of oil filters and lubrication should be taken into consideration before multiple utility can enable deployment of oil at regular intervals procuring heavy equipment the machine at different job and manufacturers have to & mining sites. Additionally, Before purchasing heavy mining transportation ensure that the required performing factors like engine equipment, it is important to understand the parts are available, especially horse power, digging strength, safety standards involved. Owing to their weight if the machine is deployed in dump depths & heights and height, heavy construction equipment a remote area. Consumables and ground clearance are frequently wear down and so, crucial. Moreover, factors like are risk prone. Moreover, due to the heavy the equipment owners should troubleshooting electronic structures involved, the presence of live wires, stock them. Hence, it is capabilities and electronics inﬂammable fuels, heavy working components important for a manufacturer involved in the engine are of & sub-components and working ﬂexibility, these to build a wide network crucial importance because machines make working conditions hazardous. and quality sales support electronics would synchronise system. To arrest frequent the operation of the machine breakdowns, equipment owners should – an important factor that would provide • Minimal overstretching of the enter into an annual maintenance contract the equipment sustained uptime. machines with manufacturers. It is essential that the Additionally, one should exercise • Not deputing the machines for jobs contractor should take the details of the caution when looking into factors like other than those prescribed, etc. various service packages offered from the operator’s console, aspects of ergonomics, PREVENTING ACCIDENTS manufacturer. visibility, seating cab design and controls. Before purchasing heavy mining To ensure proper maintenance of This is because ergonomics plays an transportation equipment, it is important the machine and thus ensure smooth important role as it ensures operator’s to understand the safety standards operation, the contractor should take into comfort. This, in turn, is closely related involved. Owing to their weight and account the after sales service capability of to the performance of the machine itself. height, heavy construction equipment are the equipment manufacturer or distributor. An enclosed cab with an option for airrisk prone. Moreover, due to the heavy It is also important that the contractor conditioning and heating would allow the structures involved, the presence of live takes the existing service network of the operator to work efficiently in all weather wires, inflammable fuels, heavy working equipment manufacturer into account. conditions. components & sub-components and There have been many instances wherein But, most importantly, before working flexibility, these machines make an equipment manufacturer is unable to procurement of heavy construction working conditions hazardous. offer timely service to a contractor after a equipment, the deployed operator should For example, the track of excavators reported case of equipment breakdown, be properly trained. Taking the technology could have a critical crushing effect to the especially when the equipment is involved into account is important as it person standing on the track unaware. working in locations far from the dealer’s would not only provide the desired high This is also true with loaders as the chassis regional office or manufacturer’s mother output, but also significantly give a better part joining the front and rear wheels warehouse. To tackle the problem, the resale value to the machine’s owner. They make uneven movements during the contractor should take details from the have to be structurally well built with wear operation of the machine causing labours equipment manufacturer or distributor resistant parts and also have a quality working at the site get trapped while the as well as the appointed dealer on the engine to support engine performance & bigger size crane booms or buckets can number of service engineers present at ensure minimal breakdowns. cause a serious damage to the project site both the ends. Since it is important to This, in turn, will minimise downtime during its slewing operation. avoid delayed servicing of equipment & considering that frequent breakdowns To prevent such accidents, the component availability, the contractor can inflate the project cost to a sizeable equipment manufacturer should follow should gather information on the logistics extent, as it involves the replacement of the safety instructions. For this, the support available with manufacturers and parts, which implies huge costs and time performance of the equipment’s safety dealers. Timely maintenance is important wastage. Moreover, to ensure that the should be examined. because extended downtime of heavy equipment performs consistently well, its Testing the equipment areas such as equipment due to breakdown is likely performance needs to be tracked on a low visibility during operations should also to adversely impact the incomes of the frequent basis. This can be done through be identified, precisely during operations contractors. the use of advanced IT.

SEPTEMBER 2011 • SMART LOGISTICS • 27

WAYS TO MINIMISE THEFT

Illustration By Sanjay Dalvi

INSIGHTS & OUTLOOK

The fast-paced growth of the Indian logistics industry has brought with it various challenges that demand urgent attention. One of the common concerns faced by logistics companies is pilferage of goods during transit and storage. By building a safe supply chain model and investing in technology to ensure high goods safety, companies can now prevent losses that occur due to pilferage. PURNA PARMAR ROBUST economic growth and liberalisation have led to considerable increase in domestic and international trade volumes over the past five years. Consequently, the requirement for transportation, handling & warehousing is growing rapidly and is driving the demand for integrated logistics solutions. With integrated logistics solutions & services provided by 3PL players already in the market, a key concern for the logistics industry lies in the pilferage of goods during storage & transportation. To create a safe zone for the goods being transported as well as stored, the need to build a robust supply chain that is not only cost-effective, but also safe from pilferages and other inventory damages is vital.

TAMPER-PROOF SUPPLY CHAIN To address changing consumer demands, companies are challenged to become more flexible in their manufacturing operations so that they can manage

28 • SMART LOGISTICS • SEPTEMBER 2011

multiple new stock keeping units (SKUs), while maintaining operational reliability and ensuring quality standards. Furthermore, companies must find ways to optimise their existing manufacturing infrastructures due to growing profitability pressures. A safe, orderly and efficient supply chain is key to a successful and safe operation. It plays an essential role in the way goods are sent, received, stored and circulated throughout the facility. With so much going on and so much to keep track of, a supply chain is highly vulnerable to face pilferage of goods, inventory and other inventory damages during storage & transit. Commenting on the attitude of logistics players on the implementation of a safe supply chain, Sanjiv Kathuria, Director – Sales & Marketing, TNT India, says, “TNT believes that the implementation of a safe supply chain is multi-pronged and includes steps like quality warehouse design with adequate security measures, such as 24x7 electronic surveillance, etc. Moreover,

shipments can be assured protection from varying weather conditions when being transferred in quality closed body vehicles with a tamper-proof sealing system. Vehicles monitoring through GPS help in real-time visibility and ensure high degree of control. In addition, security quality certifications like TAPA and ISO 28000 help in building a safe supply chain.” He adds, “Risk assessment with corrective action, clear escalation matrix systems and a strong investigation team helps in handling any untoward incident or situation, while CCTV surveillance at key areas helps keep a check on the movement of goods and records evidence. Providing adequate road safety training to drivers and the safety management team helps deal with such situations.”

CHECKING FOR DISCREPANCIES There are no set rules to build a safe supply chain. However, most companies have developed a few practices that

Warehouse Best Practices – Contract Liability with Carriers All contracts should include the following: • The company’s right to audit and investigate • The carrier will be liable for the entire value of the product, if lost, at cost • The carrier is financially responsibly for the company’s administrative and investigative expenses (including time) incurred in connection with filing the claim(s) • The carrier agrees to comply with the company’s transportation security programme.

handling, wherever it is feasible and cost-effective, also reduces chances of pilferage.”

SAFETY, A CHALLENGE?

While the deployment of security systems during storage and ensuring full visibility of inventory during transit might be a solution to prevent pilferages, it is difficult to implement these in the supply chain. According to Saxena, while most companies face the challenge of pilferage and other inventory damage, help them minimise pilferages little can be done to prevent it. To address changing consumer demands, and ensure inventory safety. The adaptation of technology in companies are challenged to become more According to Kathuria, a Indian companies is very slow dedicated closed-storage facility and thus, investing in such high ﬂexible in their manufacturing operations so that with access to the control technology solutions is difficult. they can manage multiple new stock keeping centre is normally deployed. “Most logistics companies units (SKUs), while maintaining operational CCTV systems, as mentioned look at investment in security reliability and ensuring quality standards. earlier, are the preferred systems as an overhead cost options to ensure minimum rather than an opportunity to pilferage. It is necessary to have the goods save inventory damage or theft. They helps in finding out if any pilferages may moved through gate-pass and physical tend to ignore the fact that investment have taken place during earlier instances. checks. Some of the other ways that can in good security systems can help them Any shortage reported in perpetual ensure lower pilferages are through metal improve product safety, reduce tampering, inventory, which cannot be attributed to detectors, bar codes scanners, vertical improve inventory management, reduce any transactional errors would alert the stackers and inventory management excess inventory and increase reported facility management of any possibilities through unique bar codes with stackers on-time delivery. This further leads to of pilferages taking place in the facility support. It is very important that quality more efficient customs clearance process and corrective action can immediately be recruitments and background checks are reduction in cargo delays and reduction initiated to stop further pilferage.” made before appointing an employee. It is in cargo inspection or examination. It “Moreover, approximately 80 per cent also necessary to work with quality vendors enhances speed, reduces the transit & of cargo thefts are either perpetrated who are aware, trained and well versed delivery time window and above all, by internal employees or involve some with best in class security measures and attains higher customer satisfaction, internal collusion. Hence, the deployment its effective implementation, tamper-proof thereby reducing the customer attrition of labour and contracted staff needs to and quality travel-worthy packing materials, rate and increasing the number of new be done only after a thorough verification investments in electronic surveillance and customers.” and registration process,” Saxena says, proper structure with supervisory skills. According to Saxena, one of the key adding, “Sending escorts with vehicles “To minimise pilferage during storage, it challenges is changing the mindset of the could be another measure, though not a is important to ensure a proper storing industry. This industry has been spending foolproof one, to check transit pilferages. place, good warehouse design, electronic only about 0.5 per cent of its turnover on In addition, automation to avoid manual access control, control over movements of goods, regular stock taking process, Warehouse Best Practices – Physical Security well defined and established escalation process, physical security deployment, • Lighting: There must be adequate lighting (minimum of 1.0 foot candles) bar coding system for parts and alarm to provide enough illumination so that it is a deterrent for intruders systems,” adds Kathuria. while permitting observation during night hours Pilferages can be minimised through • Perimeter Fencing & Barriers: There should be a barrier adequate in proper deployment of a mix of manual and height (8’) that surrounds the facility to control ingress & egress of technological resources. Rajeev Saxena, Sr persons, vehicles and property VP – Contract Logistics, Agility Logistics, • Access Control: Systems must be in place to control, limit and document opines, “Regular and rigorous frisking of employees, visitors and vehicles entering & exiting the facility people moving out of facilities, though it • CCTV: A system that is capable of monitoring and recording activity at may sound trivial, is still the most effective the facility must be in place solution to check pilferages. Restricted • Employee or Visitor Badges: These must be issued and worn while in entry and exit points to facilities would the facility to include the trailer yard ensure that no unnoticed movement of • Yard Control: Systems must be in place to organise and monitor the people takes place. Moreover, a daily proper movement of vehicles and trailers. perpetual inventory count in the facilities

SEPTEMBER 2011 • SMART LOGISTICS • 29

Ways to minimise theft, continued

Safety measures to be implemented • Barrier lines on the loading dock to limit driver access to building • Locking of bay doors when not in active use • Truck driver entry cages to control warehouse access • Drivers transporting company merchandise are required to maintain a state-issued commercial driver’s licence and a company photo ID at all times • Pre-employment background screening • Employee ‘hotline’ for reporting incidents of dishonest activity • Award programme for information leading to the apprehension of dishonest employees • Establishment of dress code • Single point of access for employee entrance & egress • Inspecting all parcels and packages • Random inspection of exiting personnel • Random escorts of containers from entry ports and depots to warehouse • Random audits of goods shipped and received • Random guard post rotation • Rotating dock assignments for shipping & receiving teams • Rotating assigned bay or dock locations for regular drivers • Establishment of container and truck locking standards • Establishment of container seal standards • Logging controls for all incoming & outgoing seals and locks • Storage and distribution controls for all seals and locks • Establishment of auditing and follow-up controls of all noted discrepancies.

installations, perimeter security, metal detectors, etc. are some of the latest technology developments observed in the industry,” Kathuria observes. Apart from these, the use of biometric devices and radio frequency identification (RFID) devices to allow the entry of only registered people inside the facilities is currently used in the industry, says Saxena. “While, using CCTV and electronics surveillance definitely acts as a deterrent to pilferages, one needs to do a cost benefit analysis before deployment. The deployment of effective WMS, if required, having EDI with a billing system or ERP and ensuring that all processes in the facility are driven by the system, would ensure quick detection of any pilferages, which can be subsequently checked. Another technology observed in the industry include mobility solutions that provide better tracking facilities and enhance customer satisfaction. Mobility solutions like usage of handheld devices also improve productivity.”

USING THE RIGHT SOLUTION AT THE RIGHT TIME

The logistics industry is changing rapidly service standards that smaller organisations IT and getting it to invest in cutting-edge and the array of services offered by ought to emulate. To meet the service technologies is a challenge. “This industry logistics companies are increasing every standards set by large MNCs in India, is highly fragmented and its needs are ever day, which means the business models are there is no option for smaller players but changing as it is undergoing metamorphosis. undergoing changes. In order to support to adopt technology in order to survive For example, small customs house agents such changing business models, there is and excel in such a competitive business (CHAs) are getting into freight forwarding a need for technology adoption, efficient environment. Shippers are constantly and freight forwarders are getting into supply chain model, capital investment demanding complete supply chain warehousing and so on and so forth. in security systems and other vigilance visibility, which has further necessitated Therefore, the needs of these companies systems to grow efficiently and with agility the need to have good systems with are changing very fast as well. Hence, to prevent pilferages. big & small logistics players. Moreover, investing in systems to prevent pilferage Additionally, the changes that are the need to provide enhanced customer will also depend on how much flexibility occurring are not endemic to large logistics service to include web-based order entry and agility the technology vendors companies. Even the smaller players will as well as real-time order and shipment can provide through their solutions,” have to adopt these practices to meet visibility to avoid theft & pilferages has Saxena claims. benchmark standards and to support their Kathuria also elaborated on own growth as they endeavour some of the other challenges to minimise pilferages and faced by companies. “Some increase profitability. Moreover, A safe, orderly and efficient supply chain is key to of the other challenges faced the logistics industry, which a successful operation. It plays an essential role by companies are the process essentially means that the in the way goods are sent, received, stored and violation during shipment, smaller players in the industry circulated throughout the facility. inadequate infrastructure need not invest big bucks in (transport & storage), lack of installing security systems and compelled companies to invest in trained manpower and gaps in security adopt best practices. Increase in customer technology upgradations. “Technologies along with the space constraints in demand and emphasis on safe supply like TAPA certification (FSR A level for warehouses,” Kathuria says. chain models will ensure that everyone warehouse management and TSR 1 level from small to medium to large players TECHNOLOGY AS AN ENABLER for transportation), electronic access need to jump on the technology Many MNCs have forayed into the Indian control, advance GPS tracking, panic bandwagon to minimise pilferages and logistics industry and have set benchmark alarm systems, X-ray, advanced CCTV benefit from it.

30 • SMART LOGISTICS • SEPTEMBER 2011

IT SOLUTIONS FOR SAFETY INSIGHTS & OUTLOOK

CREATING A

FOOLPROOF

SUPPLY CHAIN

The future of the Indian logistics sector is prosperous and at US$110 billion, the Indian logistics market, is expected to cross the US$200 billion figure by 2020 as per reports, but developing and building a safe & secure supply chain management with proper implementation of IT, will play a crucial role in making the entire sector grow not only in terms of expansion, but also in terms competitiveness and credibility. ARINDAM GHOSH

IN the Indian logistics sector, companies

ROLE OF IT-BASED SOLUTIONS

are constantly formulating strategies to stay ahead and tackle cut throat competition in the market. Under such a business climate, if a logistics company has to stay ahead, it needs to give its customers the best available service by ensuring safe and secure delivery of goods & services at the right time and at the right location while incurring the minimum possible cost. This, in turn, will lead to high levels of customer satisfaction. To ensure that the above procedures fall in place, there is a need to establish safe and efficient supply chain management.

IT-based solutions can play a crucial role in ensuring the safety of a company’s supply chain management. Emphasising on the importance of implementing IT-based solutions, Shoummo K Acharya, MD & CEO, eTrans Solutions, avers that IT is extremely important for a safe and secure supply chain management. “Without proper application of IT, both in terms of hardware & software, and the correct identification, i.e. where which one needs to be used, one cannot build a safe and secure supply chain in the logistics sector,” he opines.

Elaborating on the same, Amit Maheshwari, Founder & CEO, Softlink, claims, “IT in logistics plays a cardinal role vis-à-vis a safe, well-coordinated and traceable supply chain. Right from warehouse to transportation, freight management, container management and other related activities, IT plays a crucial role in preventing delays, breakdowns, spillage and pilferage of shipment. It can integrate the entire operation of the company and provide visibility through real-time information and help run safe & secure operations.” “IT plays a very important role in terms of tracking &

SEPTEMBER 2011 • SMART LOGISTICS • 31

IT solutions for safety, continued

tracing, advance shipment and planning. It connects all the stakeholders in the supply chain,” adds Sugato Chandra, Senior Consultant, Dow-Diamond Value Chain Consulting.

AWARENESS LEVELS In the Indian context, the penetration of IT, particularly with regard to the safety in the supply chain, is minimal. However, there is a potential to leverage IT to track the safety & security, health, etc., which can be incorporated into the IT systems. This will ensure that everybody in the organisation will do whatever is required at their level to ensure a safe & sound process. “In India, I have not seen any IT penetration, particularly in the context of logistics about leveraging IT for ensuring the safety of operations,” observes Puneet Agarwal, President, Darcl Logistics. Recalling an instance, where IT-based solutions are being leveraged by companies to implement safety in supply chain operations, Puneet talked about Bharat Shell. “In India, if you talk about modern supply chain management, companies like Bharat Shell are pioneers in safety. They are, in fact, using IT to ensure safety during transportation,” Puneet says. He adds that they have made it mandatory for every vehicle that transports goods from Bharat Shell to install GPS systems. “They have to configure alerts where they want to ensure that none of the trucks are plying during the night and that none of the trucks are over speeding. They keep track of indicators like harsh breaking and rigorously follow up with vendors to ensure that established standards of operations are conformed to.”

is plying during this time, the company receives an alert and the company, in turn, ensures that it is controlled. They exercise very strict control on acceleration-deceleration i.e. acceleration and sudden breaking. In a short period of 30 seconds, a vehicle speed goes up to more that 25 km an hour or comes down more than 25 km an hour. This is very clearly monitored. Moreover, they do not allow any vehicle to be on road for more than five hours at a stretch and vehicles have to ply for maximum 16 hours a day. These things are practiced by a few select companies.” Vineet Agarwal, Executive Director, Transport Corporation of India (TCI), however, says, “Currently, many companies have understood the importance of IT. But for a country, which is very high on IT business, the implementation in many other logistics companies is not deep-rooted. I think that there is a huge potential to create greater awareness and subsequently invite greater involvement of logistics companies when it comes to IT.” Commenting on the increasing level of awareness in implementing IT, Amit highlights, “The problem with the logistics sector lies more with awareness about the benefits of IT adoption. Rather than looking at it as a tool to enhance efficiency and accelerate growth, the sector has been, for long, considering IT as an additional expense. Poor awareness and adoption of IT have been the major factors thwarting the growth of the logistics sector. But the scenario is changing now. The logistics sector is slowly waking up to the intrinsic benefits of IT. Many logistics companies

Without proper application of IT, both in terms of hardware & software, and the correct identification, i.e. where which one needs to be used, one cannot build a safe and secure supply chain in the logistics sector. SHOUMMO K ACHARYA, MD & CEO, eTRANS SOLUTIONS Seconding Puneet’s views, Shoummo went on to list some practices that have been adopted by companies to ensure the safety of supply chain management. “When it comes to safety, they have very clear restrictions regarding driving on highways. A vehicle is not allowed to drive from 11 pm to 5 am so that workers can rest during this time. So, in case, a vehicle

32 • SMART LOGISTICS • SEPTEMBER 2011

have started investing in IT or are planning to do so in the near future.”

IMPLEMENTATION CHALLENGES While implementing IT solutions in supply chain management is essential, there are various challenges that companies face while implementing it. Pointing out to some of the major challenges Vineet

says, “Firstly, for the implementation of IT, companies need to come up with cost-effective solutions. There are many companies that specialise in IT products in India, which are specific for supply chain management & logistics. But these solutions are either highly priced or if the initial cost is not high, then its year-on-year cost is. Hence, considering that this industry is a very low margin business, it is imperative that companies come up with cost-effective solutions. Secondly, the solutions have to be customised accordingly to suit the needs of Indian companies and thirdly, proper training for IT is also required.” “We have developed our own in-house ERP for our major processes. We have also developed our own customised financial accounting system because our transactions are very high. In addition, we have just implemented a warehouse management systems solution and have ensured tracking of trucks using GPS, etc., which is a very standard process. Our other standard processes include use of barcodes in our hub centres and warehouses,” Vineet adds. Moreover, he states that his company even takes initiatives to train its workforce in software solutions adopted or used by their clients. “Because when we manage warehouses for those clients, sometimes they insist on using their own software and we support that,” he justifies. According to Sugato, a transparent IT system is critical, especially as companies tread on the transparency on information sharing route. Stressing on the need for collaboration, Sugato comments, “We are talking of a system as a network where you have vendors, customers and service providers. Transparency in the supply chain is mandatory, especially when it involves all the information which you need to have to enable you to plan better and hence, give the end customer better service.”

MARKET POTENTIAL All features apart, do IT-based solutions have a market in India? To this, Amit says, “Softlink has been conducting surveys to gauge the adoption of IT in logistics in India. Our recent survey has thrown up interesting trends on IT awareness and adoption levels in the sector. As per the survey, logistics companies are significantly increasing their outlay for investment in IT, but are not finding suitable solutions in the market. The survey also revealed that

89 per cent of respondents were aware that an ERP solution would be beneficial for their companies.” According to ‘Yearly Sectoral Analysis: Indian Transportation Logistics’, a report by global consultants Frost & Sullivan, the Indian logistics technology market is set to grow at 19.8 per cent between 2010 and 2015 and is expected to cross US$600 million by 2015.

CURRENT IT-BASED SOLUTIONS The flow of goods & services from the source to the end user needs to be uninterrupted and cohesive, but, in India, with a highly fragmented and unorganised distribution system, a proper flow of maintenance is hindered. In comparison to other countries, the overall cost of India’s logistics operations is much higher and a major chunk of the investment in logistics (approximately 60 per cent) goes into transportation. About 76 per cent of the logistics service is handled by the unorganised sector. According to Sugato, the most commonly used IT-based software solutions are warehouse management systems (WMS), transport management systems (TMS), tracking & tracing and ERP. WMS basically deals with all the things that happen inside the warehouse and also connects with the vendor, but there is no watertight compartment where a WMS ends. It is almost seamless. Then comes TMS, which is designed to meet the demands of the logistics industry and systematically manage as well as cut down on transportation costs. Also, there are other software like ERPs, which provide procurement assistance. Some of the present IT-based solutions applied in the Indian logistics industry include track and trace system or radio frequency identification (RFID) to monitor or locate the visibility of the position of the goods, bar codes on the products. “Logistics companies like transport service providers have started using GPS, which monitors and ensures that consignments moving on the roads follow the safety norms in terms of speeding and harsh breaking,” Puneet adds. Commenting on the solutions provided by Softlink, Amit elaborates, “Softlink’s Logi-Sys is a widely used solution that integrates the functions of a logistics service provider right from freight management, customs clearance to transportation, warehouse, container

The problem with the logistics sector lies more with awareness about the benefits of IT adoption. Rather than looking at it as a tool to enhance efficiency and accelerate growth, the sector has been, for long, considering IT as an additional expense. AMIT MAHESHWARI, FOUNDER & CEO, SOFTLINK management, financial accounting, etc. Logi-Sys is a web-based ERP system that streamlines the operations and business processes of a logistics service provider, thereby providing greater visibility across functions.” “Live IMPEX is one of the widely used on-demand customs clearance solution in India. It is a comprehensive solution for managing the entire customs clearing operations from filing of bills of entry and shipping bills online, recording all messages received from Icegate to managing licences and tracking shipments,” Amit adds. When compared with the application of technology used worldwide in supply chain management, India lags behind. India has a long way to go.

MOVING AHEAD The Indian logistics sector has constantly evolved, thereby complementing the country’s continuous remarkable economic progress. According to reports by Frost & Sullivan, the Indian logistics market recorded revenues of about US$82.10 billion in 2010, thus witnessing a growth of about 9.2 per cent over the previous year and fuelled by the consistent growth of the economy, the market is expected to cross the US$200-billion figure by 2020. It is here that developing and building a safe & secure supply chain management with proper implementation of IT will play a crucial role in making the future of the logistics sector in India brighter and highly competitive. Highlighting a different perspective, Amit claims, “A tightly integrated system can foster a safe and secure supply chain by propagating greater visibility, transparency and providing tools for better management & control. Moreover, RFID, GPS, bar coding and other such tools will play more important roles in managing the distribution, warehousing & transportation operations, and ensuring a safe & secure supply chain. Electronic data interchange (EDI) between customers and partners across the supply chain will give access to instant information for quick action in critical situations. In all, IT will be

key in developing and building a safe & secure supply chain.” IT can play an important role in addressing the concerns. Puneet has prescribed some useful steps which can help develop a safe supply chain – companies can consider having a safety dashboard where it can keep track of a number of incidences or any casualties and further keep track of the trends. Besides, Puneet talked about mobilebased technologies, which ensures that a checklist of all the safety activities is shown to the user and the user can ensure things are being complied. “I think that as safety is slowly and steadily being recognised as a concern by companies, I see safetybased parameters being incorporated into the IT systems of all companies,” Puneet adds. Vineet, however, observes, “I think that the road is a bit tough because there are many smaller companies that are coming up and they might not have large IT budgets. Hence, IT solutions providers should be able to create products that are usable by all types & levels of companies. Secondly, the products have to be more dynamic because of the ever-changing need.” Vineet further says that there is always a lot of complexity and so, the future will be bright only when these complexities are handled much more efficiently and hence, give a cost-effective solution to clients.” The implementation of technology is at a very nascent stage. Shoummo says, “About `3,00,000 crore of expenses in the supply chain, which are currently wasted, can be retrieved especially when you look at our logistics cost being 13-14 per cent of the GDP as compared to 8-9 per cent in the western world.” “There is a huge opportunity for savings and those savings can only be made through proper application and use of IT, both hardware and software services. There will be a huge expansion in the next 10 years and this is probably going to be the largest business expansion in our country,” he concludes.

SEPTEMBER 2011 • SMART LOGISTICS • 33

INSIGHTS & OUTLOOK

TIPS & TRICKS

QUICK FIX SOLUTIONS FOR WAREHOUSE SAFETY A warehouse plays an essential role in the way goods are sent, received, stored and circulated throughout the facility. With so much going on and so much to keep track of, a warehouse may also have more potential for accidents than areas with limited functions. So it is important to pay close attention to safety aspects in the warehouse. Here are some of the potential warehouse hazards and ways we reduce risks... PURNA PARMAR

GENERAL HOUSEKEEPING Prevention of incidents and accidents – mortal or otherwise – begins with good housekeeping, which is essential to make the warehouse a safe workplace. This implies following the rules of housekeeping such as keeping the floor non-slippery, free of pits and ensuring that bailing materials & tools are kept at designated areas, items in aisles are stacked securely, etc.

MATERIAL HANDLING SAFETY • Manual Labour: Even if companies deploy world-class material handling equipment for its warehouse operations, manual handling of materials by labour is unavoidable. Regular lifting and stacking of heavy loads can lead to physical injuries. So, thorough knowledge

34 • SMART LOGISTICS • SEPTEMBER 2011

of work processes & operational requirements is necessary. • Material Handling Equipment: Although forklifts and material handling equipment (MHE) make moving heavy items much easier, they can become very dangerous if not operated properly. To ensure safe usage of MHEs, one needs to properly train operators and get them the required licences. One also has to make sure that the aisles and passageways are clear and have appropriate signage, etc.

FIRE SAFETY The difference between a small fire and a catastrophic fire can often be attributed to how much safety expertise was invested in the warehouse design and later, in its

daily operation. Warehouses should be designed as per the highest standards of National Building Codes. Fire fighting systems should exceed the regulatory requirements and have the capability to fight any type of fire for more than half-an-hour. State-of-the-art fire fighting systems include fire hydrant systems across the premise, water tanks with a capacity of more than 1,500kl, sprinkler systems inside warehouses & office buildings, fire alarms, smoke detectors and a fire station within the premises. Apart from these, additional steps to be followed to maintain highest standards of fire safety include: • Inspection before handover to operations to confirm that the facility meets all the regulatory guidelines such as building access, aisle widths,

firewalls, smoke & heat removal systems, flue space requirements and sprinkler density. • Frequent safety audits to confirm the absence of hazards such as the presence of flammable debris, blocked exits & aisles, missing fire extinguishers and exit lights, damaged sprinkler systems, etc. • Educating employees so that they are aware of: - Location & use of fire extinguishers and other emergency equipment - Emergency exit locations, evacuation procedures and assembly points outside the building for all employees • Regular fire drills to ensure that the employees are aware of evacuation procedures and know their responsibilities of shutting down or activating the required equipment. The following guidelines are to be adhered to in case of a fire, even if it is a minor one: - Sound the alarm - Leave the building by the nearest exit and assemble in the designated space - Inform the appropriate authority about the fire breakout - If there is no immediate danger to life, tackle the fire with the nearest suitable fire fighting equipment - Take a roll call to ensure all are safe.

CHEMICAL SAFETY Chemicals in the warehouse, whether as part of operations or inventory, can also create major safety risks. Knowledge of the chemicals should include their usage, appropriate storage requirements and first aid procedures. To prevent serious personal injury or fire risk, the following procedures should be followed: • Impart safety training to ensure that battery charging, handling of cylinders with pressurised gases, etc. and evacuation plans are part of the regular operational procedures • Store the chemicals as per the manufacturer’s recommendations & fire safety codes • Maintain the provision of water and first aid supplies near the chemical handling area • Store the data sheets of all the chemicals used on site.

HAZARDOUS CARGO • Prepare a list of hazardous cargo inside the warehouse and create a material safety data sheet (MSDS) for each hazardous cargo • Keep the inventory count on each category of hazardous cargo in the warehouse • The following aspects need to be addressed before storing hazardous cargo in the warehouses: - Categorisation of goods - Compartmenting goods - Fire prevention measures - Alarm & emergency installations - Emergency management - Water & soil pollution prevention - Adherence to stringent warehouse requirements.

• In addition, regular training for all the employees, including vendor employees and management, is critical and should be mandatory. Training should incorporate all the activities of warehousing including: - Operational requirement of all automated or mechanical lift equipment - Fire fighting and locations of fire extinguishers and their usage procedure - Warehouse operational procedures and evacuation plans - Procedures for reporting incidents to the management and other appropriate emergency resources, including after hours telephone numbers and what types of incidents to report.

TRANSPORTATION High efficiency of warehouse operation requires unhindered transportation of goods within the premises as well as quick entry and exit of vehicles from the premises. Some of the precautions to be followed are ensuring that vehicle pathways are free from blockages, vehicles are inspected before any movement, drivers are given proper rest, warning signals are given during loading & unloading, etc.

SAFETY AUDIT Periodic and comprehensive audits should be conducted at warehouses and facilities to analyse and provide reports to senior management regarding safety at work. The inventory of safety tools & equipment, equipment maintenance log sheets, first aid kits, signage for safe operational procedures, protective gears, etc. should be audited and replenished at periodic intervals.

SAFETY TRAINING Safety measures can be effectively implemented by creating a safety policy and ensuring the following: • Widely circulating this policy among its employees at all levels and at all locations • Making copies of the policy in English and regional languages available to all employees, contract workers, contractors, transporters and others concerned • Displaying the policy and its contents conspicuously at all locations. Wherever required, pictorial representation to be used to display relevant information

SECURITY This is can be ensured by investing in quality infrastructure comprising of: • Central Operations Control Centre (COCC): To monitor and control facilities on a 24x7x365 basis from one single location. This would include: - Centralised CCTV monitoring of all warehouses & infrastructure with CCTV cameras & capacity to store multiple days of footage - Centralised access control to remotely manage & restrict entry to facilities with the provision to quarantine specific areas within the warehouse - Centralised fire alarm monitoring across all warehouses that are integrated with CCTV, access control & IP telephony to enable real-time fire detection and to notify key stakeholders in case of any emergency • Integrated building management system (IBMS): To monitor the entire facility, supported by the evacuation & announcement system for emergencies along with CCTVs, global access control systems & fire detection systems • Security Infrastructure: Security personnel and supervisory staff to undertake physical checks of all manpower (supported by CCTV systems, access enabled turnstiles) & vehicles (supported by CCTVs, boom barriers) entering the facility. Inputs from Ajay S Mittal, Group Chairman & MD, Arshiya International

SEPTEMBER 2011 • SMART LOGISTICS • 35

MD, SIESTA LOGISTICS CORPORATION

Image By Joshua Navalkar

VIEW FROM THE TOP

‘

WE SEE A GROWTH RATE OF OVER 300% FOR 4PL SERVICE PROVIDERS IN INDIA IN THE NEXT FEW YEARS 36 • SMART LOGISTICS • SEPTEMBER 2011

’

“Siesta Logistics understands the need to craft a customised, product-specific supply chain, as it is difficult to create common infrastructure for multiple products and reap the desired qualitydriven results,” says Kiran Salunke, MD, Siesta Logistics Corporation, during a conversation with Purna Parmar. Excerpts… CREATING A NICHE MARKET

For a product to move seamlessly along of service providers in India have begun Prior to Siesta Logistics, I was heading the supply chain from its origin to its to consolidate services. Due to this, nine the logistics division for one of India’s destination involves the role of at least of the first 15 customers that we have multi-business conglomerates. During my 8-10 different service providers. Let us associated with in India have been able tenure with the company, I understood take the example of importing sugar. In to reach a ‘single’ vendor status based on that there was a huge gap between the this case, we need to identify various our services. In addition, the process of company’s requirements and the abilities service providers who will ensure shipping, this consolidation is also growing rapidly. of the service providers in this country. port-based services, transportation and IMPROVING THE LOGISTICS We were constantly faced with the customs clearance. INFRASTRUCTURE IN INDIA challenge of selecting a service provider One would also need to ensure that At present, infrastructure funds are from a varied list of vendors across the government regulations are met in terms available, customers are willing to country, on the basis of the maximum of advance taxes, legal aspects and copay and companies are now willing to requirements that they could at least ordination with the bank. This calls for invest. However, land acquisition is a big partly meet. end-to-end coordination. challenge in India as buying land with 100 Having been through such tough TYPICAL CHALLENGES per cent transaction accountability is no times, we took a step by step approach ENCOUNTERED longer possible, which, in turn, has turned at the time of setting up Siesta Logistics. Every product is unique, and therefore, down foreign funds. Not many companies We selected a product and then created has very specific logistical requirements. have that acquisition capacity in this the necessary infrastructure. Once done, Customers have a limited understanding country. However, this could be solved we scouted for the precise segment of this aspect, which makes it a challenge through public private participation. If this of customers who would require the to help them comprehend this. Most could be re-regulated by the government product thus created. For instance, we of the customers are still tuned to the by way of organisations such as Container selected sugar as a product. So, for the traditional component-based service Corporation of India (CONCOR), it movement of sugar and allied products, approach where the customer’s in-house would be easier for us. we developed the required infrastructure team has a lot of coordination to do with Another critical area where pricing is and only then began approaching industry various vendors. Our system ensures that an issue is the rural development sector. giants whose operations required this the customer experiences a hassle-free At this stage of development, this industry specially designed product as a raw movement of goods. needs more co-operation in the form of material or as finished goods. Soon after, Moreover, we provide the same subsidies from the government. Presenting we began exploring other facilities and services to several clients and understand this case to the concerned department services related to it, like custom services, the nuances of the processes involved and getting these issues addressed is a transportation, movement of goods, port with each of them. Thereby bridging the cumbersome task and most projects get authority management, government laws gap by offering end-to-end solutions for delayed due to this. & regulations and duty among others, multiple products. We need to educate used in this product line. This way, we JOURNEY FROM A ‘ME TOO’ the customer about the advantages of were able to create a niche for our COMPANY TO A SPECIALISED this system given the fact that an order product offerings and we became a PROBLEM SOLVING preferred associate, as we had ESTABLISHMENT a thorough understanding of For a product to move seamlessly along We started Siesta Logistics that particular product. the supply chain from its origin to its as a specialised company, Customers now just need destination involves the role of at least and never targeted the ‘me to approach us and specify too’ products. We look at the quantity of sugar required 8-10 different service providers. the logistics space from an at their factories. Siesta FMCG company’s perspective Logistics thus processes this of carrying out business. Here, you first closure for us takes only a fraction of the end-to-end requirement given our select a product, establish it and then time involved as compared to traditional complete understanding of pricing, expand the product portfolio. So, we methods. relevant issues at the ground level and started with one product, consolidated other functions involved. INTERCONNECTIVITY OF INDIAN all our services towards that and only TRANSPORT SYSTEM INTEGRATED END-TO-END then moved on to another product for LOGISTICS SERVICE PROVIDER In the recent past, fairly large number secondary distribution.

SEPTEMBER 2011 • SMART LOGISTICS • 37

View from the top, continued

We took the challenge of undertaking the transit time for them as well. We do infrastructure i.e. they will have to create our services for a single state and carrying almost 20 operations a year and we have their own infrastructure in India or out distribution from the warehouses been able to do it within 72 hours. their 3PL providers will need to create of one company to a second company. their own infrastructure. 3PL as well as OVERCOMING THE BURGEONING Today, we have Andhra Pradesh, Karnataka 4PL companies will have to show the SKILL GAP IN THE INDUSTRY and even Tamil Nadu under our purview. commitment towards development of Several educational institutes today have This has enabled us to reach a higher infrastructure, especially in India. They picked up logistics as a mainstream course. market share on secondary distribution. need to acquire some amount of stability At one level, we have been teaching in Now, we are only increasing the market i.e. a 4PL company has to be able to various institutes on industry share within that segment relevant topics that are with a national rollout. We started Siesta Logistics as a specialised pertinent in this field of study. company, and never targeted the ‘me too’ IMPORTANCE OF A 4PL While we recruit from key products. We look at the logistics space from IN THE SUPPLY CHAIN campuses like IIM, we also DOMAIN approach colleges at other an FMCG company’s perspective of carrying out For a company, introducing levels, where we are trying to business. any new process or product is empower students, especially not an easy task. For instance, with vocational skill sets. if a small French company wants to bring We have already shortlisted 20 such commit to a customer that it will be French food or some packaged food item colleges where we are trying to get the able to deliver goods within a specific into the country, it would be competing subject and our ethos in their education timeline (48 hours), which presently no with giants like P&G, Nestle and ITC in systems right from the second year of their service provider in India can commit. The that segment. course and then, when they graduate, we 4PL enterprise can make its investments The competition is such that the do assure jobs to anyone who has scored depending on the product line being company cannot put in the kind of 60 per cent on our parameters. targeted. resources required for the volumes that CASE IN POINT SERVING CUSTOMERS AT A GLOBAL it is going to generate as the investments LEVEL Let us take the case of a leading fertiliser the company needs to make are huge. Very few players in the industry have the manufacturer, who was dependent on Also, creating infrastructure and employing ability to handle complex supply chains. government subsidies. By the very nature manpower well in advance would be Any organisation can create infrastructure of their business, the manufacturing site difficult. Therefore, these companies need where similar products can be moved. was located close to farms. They decided help from 4PL companies, like Siesta For instance, a person transporting fashion to leverage this relationship and move Logistics, that already have the required accessories to different parts of the globe a product from farm to the table in the infrastructure, expertise and technology will have definite infrastructure developed shortest possible time. That is when in place. for it. Once developed, there is a tendency Siesta Logistics was roped in. Given our A partnership with a 4PL company is to push other products using this same experience of setting up such systems imperative as the giants that the company infrastructure, which is highly impractical. for other large corporations in different has to compete with have a USP on the Siesta Logistics understands the need to parts of the country, we developed the same product line which they own. The craft a customised, product-specific supply entire model for them. We started from plan of these companies is therefore chain, as it is difficult to create common scratch – right from crafting the entire to enhance distribution and make their infrastructure for multiple products and process to the strategy, to creating the product available at maximum number reap the desired quality-driven results. systems and processes for this company of outlets. to the implementation point. Today, they For young companies, which want GLOBAL EXPANSION PLANS have the farm to table concept. It actually to make their presence felt, 4PL service We are present in Hong Kong, Europe and replicates a direct farmer purchase up to solutions from Siesta Logistics make China. We are looking forward to expand the retail set up. Siesta Logistics has the a huge difference. New entrants into our serivces to Indonesia and Australia, capability to create this for a company this business have big plans and strong parts of Africa, Eastern Europe, and also without them having to make large strategies keeping in mind the diversity Latin America. Our global presence will investments unnecessarily. in terms of products and their technical significantly help our customers. Siesta Another example pertains to a large aspects. But for existing 4PL companies, a Logistics is specialised in logistics services oil drilling company. We have been able transition from traditional and entrenched for the telecom and power sector. We to set up their processes from the base methods is a challenge. have also set up R&D centres for various up. They were a `50-crore company 4PL companies are also taking companies. With many small companies when they started and today, they are focussed approach towards infrastructure growing up to become million dollar major players in this segment, focussed on development. The infrastructure projects companies in the last few year, we see the North-East sector in India. We were that have been taken up recently are a growth rate of over 300 per cent for able to set up the complete infrastructure state-of-the-art in nature and can be the 4PL industry in India in the next few for them. compared to any other developed years. Today, we have been able to reduce market. The process has to start with

38 • SMART LOGISTICS • SEPTEMBER 2011

Illustration By Uttam Rane

LEVERAGING TRADE AGREEMENTS SMART STRATEGIES

Trade agreement programmes help a company reduce the cost of purchased parts in its supply network through duty reduction. However, for a company to harness the full potential of trade agreements, it is essential that the company possesses state-of-the-art technology to identify the best sourcing strategies. By adopting crucial best practices, companies will be able to fully leverage on trade agreements and achieve the next level of savings through global sourcing. MANUFACTURERS can spend 50 per cent or more of revenue on purchasing parts. So, it is not surprising that sourcing from low-cost countries to improve competitiveness has been such an important business strategy in the past 10 years. According to Aberdeen Group, 60 per cent of manufacturers have turned to China as the cornerstone of their low-cost sourcing strategies and, in the past few years, this level of spend has almost doubled â&#x20AC;&#x201C; from 21 per cent to 39 per cent. The ability to outsource products and skilled trade labour at a fraction of the cost is integral for maintaining a competitive advantage in market pricing. To achieve the next level of savings from a low-cost country sourcing strategy, leading companies are using trade agreements to reduce landed costs through duty reduction. Free Trade Agreements (FTAs) are a pact or a programme between a designated group of countries that have agreed to eliminate tariffs, quotas and preferences on most, if not all, goods & services traded between them. They are designed to promote

trade between regions, increase labour and sourcing opportunities within those regions, and open up foreign markets to exporters. FTAs pose an incredible opportunity for global companies to reduce landed cost of sourced products and improve profit margins on exported products from anywhere between three and seven per cent on an average. The US has already entered many bilateral and multi-lateral trade agreements. Countries with which the US has active trade agreements include Australia, Bahrain, Chile, Israel, Jordan, Morocco, Peru, Oman, Singapore, Canada and Mexico. The North American Free Trade Agreement (NAFTA) has seen an increased trade volume of close to 200 per cent since its inception in 1993. To put this into perspective, US exports to the NAFTA partners grew at a rate of 133 per cent, while its exports to the rest of the world grew only 77 per cent. Similarly, from 2007 to 2008, trade between the US and many of its FTA partners grew substantially. Savvy companies are manufacturing

saleable goods in a particular region or country and sourcing their components from countries encompassed within an existing FTA. Likewise, major duty savings can be realised by taking advantage of sourcing and distribution channels that already exist. For example, today, many of the largest global companies have aligned their supply chain and manufacturing operations to specifically target the benefit of NAFTA when serving the US and Canadian markets. In this way, they can save hundreds of thousands, if not millions of dollars per year in duty savings. However, there are a number of complexities and costs associated with capturing the benefit of trade agreements. First, companies need an ability to accurately keep track of purchased part information, such as the country of origin, as well as special programme or trade programme indicators. This information is sourced from the supply base and companies need tools to solicit for each trade agreement and collaborate with suppliers to improve accuracy and timeliness. Finally, companies need an

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Leveraging trade agreements, continued

want the information to come back to you and for which parts. Open ended requests lead to frustration and low response rates.

KEY TO SUCCESS Pilot programmes that walk a subset of suppliers through mock solicitations are not only valuable for training, but also for identifying potential gaps. While all this sounds straightforward, the process can break down based on the number of suppliers, the number of parts purchased from each, and the number of applicable trade programmes. The sheer volume of paperwork to solicit for an FTA can require days of effort from your compliance team. Then, the effort of reviewing and rekeying the response information from each supplier can take weeks or even months to complete. Finally, your supplier management programme will benefit from a shared process to solicit and collect responses from suppliers.

ability to collect the duty savings ‘post transformation’ by qualifying each saleable good against the country’s rules of origin. Failure to do so can run the risk of being non-compliant and can lead to fines & other penalties. Automating the process with a global trade management (GTM) solution addresses these challenges and is a key enabler to achieve the next level costs savings from low-cost country sourcing. Here are five best practices that will allow your company to fully take advantage of FTA opportunities:

BEST PRACTICE 1: IMPLEMENT A SUPPLIER MANAGEMENT PROGRAMME To effectively manage FTAs, you need to have a supplier management programme, which will collect critical information. Most FTAs require a certificate of origin, as well as a trade programme certificate to prove a claim. There are three important steps to establish a supplier management programme to consistently collect this information. First, establish a communication channel by which suppliers can expect to receive requests and information. Knowing where the request is coming from and how often it will be received will greatly improve your response timeliness and accuracy. One of the best tools for this is email. Email is frequently accessed, supports documentation attachments and can be archived for future reference. All are a must-have when communicating with third parties and exchanging information. Also, identify who within your supplier’s organisation will be responsible for sending

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BEST PRACTICE 2: ACHIEVE MULTI-SOURCING DATA VISIBILITY

the information. Identifying key players is key to the success of any communication programme. Secondly, explain the importance of knowing the country of origin for the parts, as well as the trade programme benefits. If a supplier can claim that the parts they manufacture are qualified for preferential treatment in an FTA, then your demand for those parts may increase as the reduction in duty makes them cheaper to source. The investment to support a trade agreement becomes a win-win situation. Next, you need to explain how you intend to gather this information. Most suppliers prefer to provide this information based on a specific request for a given set of parts. This focussed request allows the supplier to respond with accurate information for each part and provide the necessary documentation. Using online software (portals) to collect this information is beneficial. Let the supplier know how you

An effective supplier management programme also requires the systems’ support to provide multi-sourcing data visibility. When sourcing from multiple suppliers, there are often situations of multiple countries of origin as well as multiple FTA opportunities depending on the source country. Supply chains are set up to ensure that the process runs efficiently – this means shorter lead times, optimal safety stock and low-cost sourcing. As a result, a company could source one product from many different countries to achieve varying degrees of each. Understanding where a part came from dictates which FTA programmes are eligible. Data visibility can be achieved by creating a representation of your purchased part information. Global trade management (GTM) solutions allow you to keep separate information for each part with respect to an individual supplier. This information is often constructed from purchase orders and can automatically build the relationships between parts and suppliers. With this baseline, you can easily create supplier solicitation campaigns and build a request without rekeying any part information.

BEST PRACTICE 3: AUTOMATE THE SUPPLIER SOLICITATION PROCESS The key to managing a portfolio of trade

agreements is to automate the process of soliciting suppliers for all the required FTA information in order to establish compliance with the programme. Look for a GTM solution with campaign management capabilities, which allows you to create mass solicitations using purchased part data for many suppliers at once and for any given trade programme. In this way, you can solicit hundreds of suppliers in just a few minutes. This can eliminate 90 per cent or more of the effort to solicit & manage responses from your suppliers and provide a mechanism to manage suppliers that have not responded. The campaign management process should allow you to do the following: • Target the correct suppliers: It is important to target only those suppliers that are eligible to participate in a given FTA. Soliciting a manufacturer in Singapore for a US-Chile origin certificate may not fetch you any results, and will, most likely, dilute the effectiveness of future communication with that supplier. You need to ensure that important information request does not come across as spam. Look for a GTM solution that can identify FTA opportunities by a supplier’s country so that you can focus your requests for a particular preference programme. Standardised templates and cover letters streamline supplier communication. It is important that your initial communication with the supplier is clear, instructional and

also refers to troubleshooting contact information. Templates tailored to the supplier by country, language and cultural tone improve response rate. An example would be modifying the tone of your content to be more formal when soliciting suppliers in Asia. The same letter and content does not work for all suppliers globally – your trade agreement solution should allow end-users to customise these messages as they deem fit. • Request only what is relevant: Not all parts may require solicitation. When soliciting suppliers, it is important to remember that the response will require time and effort to complete. It is not always appropriate to solicit for preference information on every single part that you have purchased. Your GTM solution should allow you to solicit based on a part’s value, upcoming blanket expiration date, purchase order number, etc. A more focussed information request often means getting the information back from your supplier faster. Depending on the number of suppliers you have and the relative turnaround time of your order cycle time, this is a big value addition to any solicitation process. • Send mass emails: With the widespread adoption of email, communicating via written letter or fax is becoming increasingly outdated. Your GTM solution should be able to create mass email campaigns and deliver emails to

all suppliers that are part of a campaign. This should be a fully automated process, as many companies must solicit hundreds, if not thousands of suppliers. Emails are most effective when the body contains instructional information. Moreover, attachments can also accompany the solicitation. Emails should be based on templates and compliance managers should be able to create their own instructions for a given supplier request. Email attachments can include a spreadsheet of parts or a certificate of origin in a PDF format that the supplier can use to fill in details. Additionally, this communication should also include instructions that a supplier can refer to when responding. • Use dashboards and alerts: When soliciting a large number of suppliers, it is important to be able to manage exceptions. Leading GTM solutions provide a dashboard and metrics that help you understand what per cent of suppliers have responded and what per cent of responses are complete. You can establish a need by date and focus your efforts to work with those suppliers that miss the ‘response window’. Alerts can be set to notify you when a supplier has responded so that you can approve the submission. Questions or inquiries should prompt interaction from a manager, which can be achieved by utilising notification alerts, which are system-driven and delivered to your work email inbox. • Streamline the process: The key to streamlining this process is to give the supplier access to the solicitation request online, via a portal. By logging into a secure site & providing origin and preference information directly into the GTM solution, you can eliminate the effort of rekeying information and thus reduce the potential for data entry mistakes. Portals can also provide the supplier with tools to reduce the time needed for a response by looking up harmonised tariff codes, uploading data via a spreadsheet or by creating an FTA document directly from the screen. • Manage supplier responses: In the global trade space, there is nothing more important than having visibility of your transactions and being able to substantiate your duty claims in an audit. Compliance professionals will

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Leveraging trade agreements, continued

ultimately be held responsible for the status (certificates), HS classifications and part was constructed. It includes the preferential status information they material cost, but use different criteria and finished good part number, as well as the are using from suppliers. So, reviewing expressions to qualify a bill of material. component part numbers that were used each & every supplier response can The implication is that for companies that to manufacture it. Usually, bills of material be an excruciating, but necessary already use NAFTA, the level of effort to are ‘costed’, which means that it details task. The ugly fact of this process is implement a new US bilateral agreement the extended value of each component that no matter how much guidance is minimal. Leading GTM solutions line item. The parent part should also you provide, some suppliers will still support multiple FTAs by exploiting this have a value or cost associated with it, respond incorrectly. Look for a GTM relationship with a qualification engine which is needed for certain FTA rules solution that provides basic error that can be ‘reprogrammed’ based on of origin. checking when a supplier provides parameters delivered with the rule of Each part record should also have information, as well as an approval origin content. This allows companies to an associated harmonised system (HS) process with which your compliance extend the reach of their FTA portfolio number. In a GTM solution, the bill of team can review and accept the with a declining margin cost per FTA. material can refer the HS number, country information before it is Solutions that have a used for qualifications. multi-FTA qualification engine Free Trade Agreements pose an incredible Electronic audit of the should provide rules of origin opportunity for global companies to reduce response information & as plug-ins. Plug-ins are purely landed cost of sourced products and improve communication with the content that tell the engine proﬁt margins on exported products from supplier is also key, as it how to analyse the bill of anywhere between three and seven per cent on will be the cornerstone material for preferential status. an average. to your audit defense They also do not require a strategy. To facilitate this process, leading solutions have built-in messaging tools, where the compliance team can keep a log of all discussions that occur regarding a campaign or specific part. This information is useful in an audit to show due diligence in how you communicated with a supplier and what guidance you provided.

BEST PRACTICE 4: AUTOMATE THE QUALIFICATION PROCESS FOR MULTIPLE FTAs Now that you have collected certificates from all your suppliers for the affected purchase parts, the final step is to systematically qualify bills of material using the appropriate rules of origin. This will determine if the product qualifies for preferential treatment. Rules of origin for each of your targeted FTAs must be available for qualification algorithms to test the product bill of material for each end item. The rules of origin should be able to be loaded into your system without having to take a software upgrade. In this way, you can flexibly add new FTAs to your portfolio and avoid the cost of upgrading & re-implementing software. Let us take a closer look at the qualification process. To get started, the following information is needed to perform a qualification: • Costed bill of material • Part information (country of origin & certificate information) • Rule of origin content. A bill of material provides you with a structure or blueprint of how a finished

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of origin and preferential status (certificate info) – all of which are needed when qualifying for a rule of origin. A typical rule of origin will look for one or many of these data elements during analysis. To support high-volume environments, it is critical that that rule of origin content – for each FTA in the portfolio – is integrated with the GTM solution and can be maintained without having to upgrade the software. The qualification engine, therefore, must be able to support the universe of qualification methods for FTAs, including tariff shift, RVC (build up & build down, net cost and transaction value), among others. Then, the system analyses the bill of material against the rules of origin and available certificates to make a determination. This process should be executed ‘top-down’ so that you do not need to classify or manage certificates for low-value component parts that do not affect regional calculations of value.

BEST PRACTICE 5: ADD NEW FTAs BY BUILDING ON YOUR BASE PORTFOLIO Companies can rapidly support new trade programmes by building on the existing infrastructure and business data of available FTAs in the base portfolio. Often, the only primary difference between FTAs is the rule of origin content. The bill of material integration and supporting business data can be fully reused. It is important to note that the rules of origin refer to the same business data, such as qualification

company to upgrade their software to support additional FTAs. This allows for flexibility to start small and add FTAs as time progresses & scalability to support more as your market reach grows.

TREMENDOUS SCOPE Capturing the full potential of trade agreements requires leading-edge technology and information services to identify the best sourcing strategies and synthesise the rules of origin. Based on the above best practices, you should look for automation solutions that can address all facets of multi-FTA cost savings initiative including: • Establishing a supplier management programme • Maintaining accurate rules of origin for each FTA in your portfolio • Using campaign management tools to organise supplier solicitation for information • Automating the response to solicitations through a portal • Providing suppliers tools to simplify submissions and interact with the programme manager • Automating the qualification process to ensure that the maximum duty savings is captured. Armed with the process and supporting technology, your company can achieve the next level of low cost country sourcing in your global operation. Courtesy: Management Dynamics, Inc.

INVENTORY CONTROL SMART SUPPLY CHAINS

G S N E I I V G E RO T P A R IM T S R

Illustration By Sanjay Dalvi

Effective inventory control is a vital function, which contributes immensely to the success of companies. It involves planning, executing and controlling a supply chain network. Its effectiveness is directly measurable by how successful a company is in providing high levels of customer service, low inventory investment, maximum throughput and low costs. Applying effective inventory control techniques will help companies aggressively improve their bottom-lines.

EFFECTIVE inventory management is at the core of supply chain excellence and the management of multiple types of inventories, including not only finished goods, but raw materials, work-in-process, partner inventories and more, lies at the intersection of demand and supply. Yet, our understanding of inventory management practices in many respects still has a long way to go. In fact, it is only in the last decade or so that the direct link between inventory management effectiveness and corporate cash flow generation has been well understood, or rather, has finally received board-level interest. There is no single bullet for improving inventory management in the face of network challenges and many companies

continue to chase increasing forecast accuracy as a key weapon. Below are summarised five steps companies are taking to attack various aspects of the network inventory management challenge:

GET MUCH MORE GRANULAR WITH SAFETY STOCK MANAGEMENT Many companies today continue to use simplistic means to determine safety stock levels at different levels of the supply chain. The most common is a simple stock keeping unit (SKU) segmentation approach in which products are put into three, or sometimes four, classifications based on either volumes or value. Subsequently, the

same safety stock policies are set across each of these categories. Such an approach is not sufficient for today’s supply chains. Leading companies have taken their safety stock policies further in terms of both, granularity and cycle times. The most common of the process improvements is to use many more attributes associated with each SKU to create a much larger number of item classes to which different policies are assigned – well beyond the standard three or four levels most companies still use. These attributes can include lead times, supply & demand variability, consumption patterns, criticality and velocity among others. The more dimensions a company uses, the greater the precision a company

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Inventory control, continued

will have in managing inventories. It is not uncommon to see 10-12 dimensions being used in best in class companies. This obviously requires a lot more work, both in terms of upfront analysis and tweaking of policy settings over time, but can pay rich dividends in terms of both, reducing inventories for the SKUs for which excessive safety stocks are held, and in some cases, actually increasing safety stock levels for SKUs that are regularly experiencing out-ofstock conditions. This more granular segmentation also clearly requires some level of skill in terms of identifying the appropriate attributes to use for the groupings, and in understanding how to best apply differentiated inventory policies. Here, outside expertise may be required if a company is looking to move to higher levels of safety stock management, as this is a relatively uncommon skill set. Leading companies are also increasing the frequency in which they review and tweak safety stock policies. Still today, some companies can go multiple years without a comprehensive review, other than occasionally moving a given SKU to a new classification when its volumes have changed dramatically. Leading companies review products & policies more frequently, and have a formal schedule for doing so. For example, they plan overall inventory strategies annually and then redefine those during each monthly sales & operations planning (S&OP cycle). They also look at higher level demand & variability data quarterly and may tweak certain inventory parameters on a weekly basis.

ADD INVENTORY PLANNING TO THE S&OP PROCESS While S&OP has been successfully employed as a process discipline by some companies for more than two decades, other firms are getting started or are just midway through their S&OP evolution. However, it is only in the past five years or so that there has been widespread recognition of specific inventory decisions being often left out of the S&OP process. While S&OP delivered a ‘one number forecast’ that a company could act on, supported by a high-level supply plan that is capable of meeting that demand plan, specific inventory decisions related to those plans were often left out of the S&OP decision process. This usually implied that middle managers were

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responsible for inventory decisions that could have an impact on sales or cost in terms of millions of dollars. Recognising that gap, many have pushed forth the use of the new term Sales, Inventory & Operations Planning (SIOP) to more forcefully drive home the need for the process to make policy decisions on target inventory levels needed to support the demand and supply plans. In effect, this means senior company executives need to set the direction based on a given plan as to what the trade-offs are going to be between excess inventory levels and some amount of risk that there will be insufficient inventories to meet demand. This is especially critical for new product introductions, and for companies that have a lot of complexity in their product mix. Some have argued that these inventory-related decisions were always inherent in the S&OP process. That may be true from a theoretical perspective, but was clearly not the case in the actual monthly practice of S&OP. There are many case studies of companies, which have transformed their processes from a traditional S&OP basis to an SIOP one with added steps related to inventory targets and which have achieved impressive results. Moving to SIOP is a process improvement that, at one level, is fairly easy to accomplish, with the right level of expertise in terms of how the new elements to the S&OP cycle will be added. However, most companies ultimately find that a strong level of technology support becomes necessary for a robust S&OP performance, especially as decisions about inventory levels are added to the mix. This technology is usually in the form of ‘workbenches’ and exception-based decision making that provide supporting data for the supply & demand plans, and more importantly, allow managers & executives to conduct a series of scenario analyses to understand options and how they would play out across supply, demand & financial results.

MAKE REGULAR USE OF SUPPLY CHAIN NETWORK OPTIMISATION TOOLS FOR TACTICAL PLANNING Supply chain network optimisation tools have traditionally been used at a strategic level to support redesigns of an entire supply chain or distribution network. Often, such exercises were performed

every 3-5 years, or triggered by a major change such as a merger or an acquisition. The scenario is different today. More and more companies are using the supporting network optimisation technology tools not only in this strategic way, but also on a tactical basis to support supply chain decisions on a quarterly or even more frequent basis. The core function of these tools is to help companies make decisions about the network trade-offs between inventories, transportation costs and customer service. But the reality is that as soon as the ‘optimal’ strategic plan is set at a given point in time, it begins to degrade. That truism is more pertinent than ever today, with rapid change in oil & commodity prices, the uncertainties of globalisation and other dynamics challenging any current network strategy. While changing the supply chain network at a high level is obviously a slow process, many changes within the network can be made on a more frequent and near continuous basis. Such decisions as: • Which products should be made and where should they be sourced? • What is the current optimal trade-off between inventory and transportation? • How should product flow within the existing network? These can all be improved with decision support from the network planning tools, as a variety of companies from Procter & Gamble to PepsiCo are demonstrating today. While the potential improvements may come from transportation savings or other operating buckets, it is likely that inventory improvements versus the baseline will also often be achieved. What does making this change mean? It generally requires that instead of just ‘renting’ a network optimisation tool for a given planning process, that tool is acquired and bought in-house (though ondemand versions are also coming into the to market). But the point is that in either case, the tool becomes a permanent part of the on-going decision process, not used for a one-time analysis. Once the original supply chain network model is built, maintaining that model over time is comparatively easy; but it does take some resources. Some companies maintain a small staff to support this process, thereby acting in a ‘share services’ capacity across multiple business units, but others can get by with just one person dedicated only part-time to the effort.

CONSIDER DISTRIBUTED ORDER MANAGEMENT TOOLS TO REDUCE INVENTORIES Both retailers and a growing number of manufacturers are dealing with the challenges of multi-channel management, primarily, but not exclusively, driven by web channels. A substantial percentage of traditional retailers have already developed dot com channels, and a growing number of manufacturers are doing the same, as the once powerful fear of reprisals coming from competition with their retail partners is rapidly falling, more and more brand companies take to the web. A variety of other channels, from vending machines to distributors, are increasingly also coming into the mix for many companies. With dot com business especially, many companies have let web channels emerge as quasi-independent business units to enhance speed and flexibility. That, in turn, often means that the dot com unit maintains its own inventory. This is sometimes true for other channels as well. While the overall independence often has real business advantages, especially at the start up level, dual or more inventories can add real cost to the company overall. As companies mature these new channels, they often decide to look at how multiple channels can be served out of one inventory pool. There are a number of challenges to be encountered while doing so, such as how forecasts are aggregated or allocation policies by each channel for that inventory are developed and enforced. These challenges can be tackled in many ways, one of which is a relatively new class of software called distributed order management (DOM). DOM solutions are about much more than inventory management. At their core, they are designed to capture orders from multiple sources and identify the most efficient way to fulfill those orders. They enable the company to present a consistent face and process to the customer regardless of the channel, if well implemented. But as a part of that basic capability, some DOM solutions can also improve inventory levels in multi-channel environments. Some, for example, have the capability to support inventory rules and policies by channel within the common inventory pool, thereby allowing companies to quickly and aggressively pursue combined cross channel inventory strategies. In addition, many solutions provide the ability to dynamically identify

the optimal sourcing location, whether it be the company’s own supply chain network, or a possible drop ship directly from a supplier. By having more sourcing flexibility, or converting a large percentage of ‘stocked’ SKUs to drop ship items, a company may also be able to take a good share out of current inventory levels. DOM has been the province of mostly best of breed vendors, and normally rests over the top of existing order management systems. It is an ideal solution for companies with complex channel issues, or where a company is running multiple order management systems and looking for a single front to customers across channels.

STEP UP TO INVENTORY OPTIMISATION SOFTWARE Probably the most aggressive step a company can take to manage multi-level inventory challenges is to adopt a relatively new category of software solution called inventory optimisation (IO). Traditional supply chain planning software only optimises inventory levels one node or level at a time. It is not concerned with the impact on up and downstream inventories and focusses primarily on ‘local’ optimisation. The IO software, which has been around for about a decade, looks at the inventory problem holistically, considering the optimal inventory levels from raw materials to finished goods and even distribution channels simultaneously, so that the network inventory levels themselves are optimised and not just an individual node or channel. Most of these solutions also use what is called ‘probabilistic’ modelling, which means rather than relying on ‘discrete’ or single number forecasts for supply and demand, IO software uses history and other factors to consider the probability of different lead times & demand patterns, thus providing a richer inventory plan. Many companies have achieved significant results from their IO implementations, as the survey data supports, often reducing overall network inventory levels to double-digit percentages. The IO software also lets companies manage the complex process of setting inventory policies and tuning those policies at the SKU level much more efficiently by enabling them to move to a much more automated process. The focus turns to ‘management by exception’ versus trying to deal with these policies and settings

across hundreds or thousands of SKUs using a more manual, spreadsheet-based approach. But getting to these kinds of results is often not easy. The holistic nature of the analysis and recommendations means a company has to get a wide buy-in to the programme across its supply chain. Sometimes, inventories reduced at one level come at the ‘cost’ of more inventory at another, which might contradict existing goals and measures. Relatively few managers inside a company are probably well-versed with IO solutions. The IO software will certainly become commonplace over the next five years, but companies will usually need skilled guides to help them reach the destination smoothly and effectively.

OPTIMAL SOLUTIONS We are clearly in an era of unprecedented supply chain network complexity. In order to get better control of inventories across the diverse supply chain network challenges, supply chain managers are looking for solutions. In fact, many companies have taken traditional approaches, such as efforts to improve forecast accuracy or development of traditional S&OP processes about as far as they can go. New tools and technologies along with process and technology improvements are needed to fight the next rounds of the ongoing inventory battle. Companies that have some immature processes, such as not formally including inventory targets as part of an SIOP programme, clearly have a major process opportunity before them. But the size and complexity of the network inventory management challenge today means that newer technology tools, such as distributed order management or inventory optimisation software, may need to be a large part of the answer. Of course, the new technology will bring its own process (and people) challenges, but most benefits will be well worth the efforts and investments, though experienced hands will often need to be a part of the team to ensure success. For many companies, step changes in inventory management effectiveness will mean the use of relatively new tools and techniques. It is time to start looking at the opportunities now to see which might have the greatest impact on your supply chain success. Courtesy: CSCO (Chief Supply Chain Officer) Insights

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SECTOR FOCUS

MEGA TRENDS IN AIR CARGO

TAKING OFF

TO ATTAIN

GREATER HEIGHTS

Despite the global economic downturn, the Indian international market has expanded seven per cent from 1.11 million tonne in 2007 to 1.19 million tonne in 2009. With India’s freight industry expected to grow at 10 per cent per annum by 2014 and the air freight sector set to expand by 8.5 per cent per year for the next five years, the air cargo sector is all set to witness highly promising prospects. ARINDAM GHOSH THE air cargo sector has grown to become a vital mode of transport for India’s international trade, especially for products with high cost and value addition. The current air cargo traffic in the country is around 2.64 million tonne this year with almost half of this coming from Delhi and Mumbai. Delhi accounts for 6,00,000 tonne, while Mumbai accounts for 5,00,000 tonne in 2010-11. Further, with the Indian Government raising the limit of foreign direct investment (FDI) in cargo airlines from 49 per cent to 79 per cent, the growth rate of the aviation sector in the next 10 years is expected to be approximately

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25 per cent, thereby making the Indian market even more lucrative for foreign players to enter into the air cargo space. “The Indian air cargo industry has become highly competitive, with service providers investing in infrastructure, acquisitions and technology in order to provide the best possible services to customers, like we at FedEx are doing,” says Kenneth Koval, VP – India Operations, FedEx Express. As per a Boeing report, ‘World Air Cargo Forecast 2010-2011’, India is the largest submarket in South Asia, comprising of about 69 per cent of international flows in the region. India also enjoys a significant domestic market. From 1999 to

2009, the total Indian air cargo domestic and international markets have averaged a 6.6 per cent growth annually. The Indian domestic market had been growing rapidly before the global economic downturn in 2008 and in the 10 years between 1997 and 2007, the domestic air cargo market averaged a 10.8 per cent growth annually. India’s leading trade partners are Europe, the Middle East and Asia, but until 2007, Europe was India’s biggest air trading partner, the report states.

INDIA’S INTERNATIONAL STANDARDS According to the International Air Transport Association (IATA) Economic

Briefing, ever since liberalisation in the air transport market began in the late 1970s, actual yields have fallen by almost 50 per cent. Air travel and air freight have become considerably cheaper and clearly, this has boosted volumes. However, this impact has been marked by a steady trend. Economic growth & GDP have been the principle drivers of changes in global revenue passenger kilometres (RPKs). Economic forecasts imply that airline traffic will remain below the previous trend over the medium-term, with passenger travel forecast to be nine per cent lower by 2016 than pre-crisis industry forecasts, the report points out. The key for any cargo player to succeed is to understand and listen to customers and get their feedback and respond to what they want. This focus will ensure that customers continue to get the superior experience and value they expect. “The service providers are aware of the environment. They have an eye on the current economic scenario and work at par with the international standards,” a senior TNT official highlights. “Logistics providers are further enhancing their services by implementing technology and developing infrastructure. After much research and study, we

established three gateways in India – one each in Mumbai, Delhi and Bengaluru. This has enabled us to provide 31 international flights to India – 15 flights to Delhi, 11 to Mumbai and five to Bengaluru – the maximum offering by any express service provider in India. We also offer 12 clearance gateways from Indian cities, the maximum for any carrier,” Koval says. The acquisitions of both PAFEX and AFL/UFL businesses have enhanced FedEx’s business flexibility and speed to market. “These acquisitions have enabled us to provide our customers with more service options such as domestic ground and value-added services, including warehousing, logistics solutions & third-party logistics, while allowing them to take advantage of an increased coverage area,” he explains.

(CAGR) of 11.5 per cent from 2007-08 to 2011-12. The major reasons, which can be attributed to this increase, are increase in overseas trade, Indian economic policies and e-commerce developments. On the major trends in the air cargo sector, the senior TNT official comments, “Air cargo, trade and the gross domestic product (GDP) of a country are interdependent and have a direct relationship. Air cargo enables nations, regardless of its location, to efficiently connect to distant markets & global supply chains in a speedy and reliable manner. The rapid growth of international trade has boosted prospects for the air cargo market in India. Increasing globalisation, establishment of manufacturing facilities and India’s growing might in the IT space have contributed to the boom in the country’s economy, thus resulting in an increased aggregate demand from India driving the air cargo services market.” As India emerges as a key growth economy on a global platform, there is an emerging need for logistics services operating on global standards in order to effectively integrate Indian enterprises with the global economy. This is fuelling globalisation and consolidation within the industry with the entry of global players as well as mergers & acquisitions in the Indian market. “Another emerging trend is the broad-basing of service and product portfolios of express delivery companies – with more players offering comprehensive portfolios covering an array of services ranging from express services, ground services, value-added services, warehousing, third-party logistics, etc., like we have done at FedEx.” Koval explains. Globalisation and the rapidly evolving demands of the industry are also increasingly driving the use of technology

MAJOR TRENDS According to the Planning Commission, India’s air cargo movements would grow at over a compound annual growth rate

SEPTEMBER 2011 • SMART LOGISTICS • 47

Air cargo mega trends, continued

in operations to improve efficiencies and offer enhanced value-added services. He adds, “We are also witnessing a lot of development with regard to infrastructure. This is a welcome move. There has always been a need for world-class and effective infrastructure to achieve sustainable growth. In the recent past, there have been many optimistic steps taken towards achieving this. Work on most of the 35 non-metro airports is complete along with greenfield airports in the north-eastern region that have received in principle approval with the aim of improving connectivity. We look forward to more such investments that will help build the nation’s infrastructure and put us on the world map of countries with outstanding facilities.”

USE OF TECHNOLOGY In today’s world, keeping up with the latest technologies provides enhanced speed and quality of service. Various technological investments have enabled Indian players to automate many processes to save time, increase productivity, improve operational efficiencies, customer relations and reduce cost. Here is a list of technologies that FedEx uses to provide services to its customers: • Handheld scanning devices, also referred to as the FedEx PowerPads, to update the package status at every stage. As soon as a package is scanned, the information is uploaded onto the FedEx network. • FedEx Billing Online (FBO) enables customers to receive and pay their invoices online. • Automation at clearance operations at the company’s automated gateway in Delhi include automated conveyor belts, supported by scanning devices that can produce clearance type information on a label, which is used for efficient sorting. • Tracking tools that help customers keep track of their packages such as SenseAware. SenseAware enables customers to monitor their shipments in near real-time – with information like temperature, location & exposure to light – and continually share this

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information with their supply chain partners.

and serves the domestic needs of existing international shippers in India. This was followed by two phases of aggressive expansion to enable wider reach across India. • The company has introduced a direct connection between India and the FedEx Asia Pacific hub in China to significantly add to its outbound capacity to Asia and strengthen connectivity between major cities in India & Asia. It has launched a new intercontinental flight route using Boeing 777F freighters to provide Indian businesses better international connectivity as well as additional capacity between the US, Middle East and Europe.

EXPANSION PLANS

FUTURE OF AIR CARGO IN INDIA

According to the report, air travel is driven primarily by economic growth and is highly leveraged to the economic cycle, thereby expanding and contracting at roughly twice the rate of the overall economy. The growth and evolution of the express delivery industry in India has spurred logistics players to strengthen networks and offer comprehensive services. The

India is the leading economy and international air trade hub of South Asia. Of the 1.73 million tonne of international traffic that moved into and out of the region in 2009, more than 1.19 million tonne moved through India. “India’s domestic air cargo market will return to rapid growth, expanding 10.6 per cent per year on an average to reach two million tonne per

The Indian air cargo industry has become highly competitive, with service providers investing in infrastructure, acquisitions and technology in order to provide the best possible services to customers, like we at FedEx are doing. KENNETH KOVAL, VP – INDIA OPERATIONS, FEDEX EXPRESS exponential growth of India’s exports & imports and the country’s GDP, which is expected to grow at 8.4 per cent, will also propel the growth of the express industry. In addition, the emergence of India’s trade in higher value items will continue to increase and add to the growth story. TNT has launched a dedicated freighter service flying five times a week between India and Europe. FedEx has launched a series of steps towards fuelling its expansion plans which includes: • FedEx international economy service to provide customers with an offering that better suits their needs during those tough economic times • FedEx import services in India to offer a wide range of fast, reliable express services that will meet the import needs of customers in India • Domestic services in India that give access to a new customer segment

year by 2029,” as per the report. Today, India is among the top four biggest economies globally and is predicted to be among the top three economies by 2020. Economic growth also reflects the growth of the air express industry in India. The Indian domestic & international express cargo industry is among the fastest growing in the world and worth close to US$2 billion. Over the last decade, it has witnessed a CAGR of 33 per cent. According to the senior TNT official, “The growth rate of the aviation sector in the next 10 years is expected to be in the range of 25 per cent.” “The demand for air transportation is ever increasing, particularly from the trading, pharmaceuticals and manufacturing sectors in India. FedEx will continue to innovate and make key strategic investments in India to enhance the region’s connectivity to both, domestic and global commerce,” concludes Koval.

AIR CARGO SECURITY COMPLIANCE SECTOR FOCUS

EASING THE BURDEN USING ON-DEMAND

LOGISTICS SOLUTIONS

The growing demands for efficiency and the increasingly stringent regulatory mandates for document processing have made it clear that disjointed paper and electronic filing processes simply would not meet the security and compliance requirements of the future. This dilemma is one of the many driving forces behind the rapidly growing demand for on-demand solutions. Thus, through on-demand logistics solutions, organisations will not only be able to easily achieve visibility into the supply chain, but also be able to attain cost efficiency through a simple web interface. SINCE 9/11, the transportation industry has become increasingly vigilant about air cargo security and compliance. Freight forwarders and air carriers have always understood that these are critical areas of concern, and increased demands in terms of visibility and reporting requirements have led to far more complex processes. Without the right technologies and tools in place, these processes are becoming alarmingly inefficient. Today, freight forwarders are grappling with a number of shortcomings. Many lack real-time visibility into the status of their cargo shipments. This is further complicated by the fact that freight forwarders carry the cost burden – anywhere from approx $2-9 (in the case of US) a shipment – associated with filing critical documents, which means any errors, omissions or delays can prove to be costly. Gaining the insight needed to enable these processes requires a highly sophisticated, complex and costly infrastructure. Looking at such complex environment,

on-demand logistics management solutions are becoming a driving force in bringing this level of technology sophistication to freight forwarders at an affordable and manageable cost. For the first time, organisations can easily and cost-effectively achieve visibility into the supply chain through a simple web interface. With on-demand logistics management solutions, freight forwarders can leverage sophisticated logistics functionality without the upfront costs of staffing, specialised equipment, training, integration and other infrastructure-related expenses. In addition, these solutions can deliver advanced capabilities in a matter of weeks, thereby delivering a rapid return on investment. For example, they can streamline customs compliance documentation by filing directly, and thus ensure customer data confidentiality, dramatically reduce the cost per shipment as well as have instant network connectivity to all available airlines, among the other logistics capabilities.

THE IMPORTANCE OF SECURITY Adding to the challenges described above are concerns around safety and security. It is critical in today’s security-conscious world to know what is happening with all shipments at all times in all locations. That means having the minutest of information on what is in a shipment, where it is coming from and where it is going – among other details. This is not as simple a job as it sounds, especially when one considers that freight forwarders must constantly adapt to meet changing shipper requirements, as well as regulatory compliance and security mandates. In addition, customers are becoming increasingly demanding in terms of fulfillment time frames, lower rates and greater flexibility in scheduling & rescheduling deliveries. The growing trend to global sourcing for products and logistics services makes it even more intimidating for freight forwarders to keep up the expectations. Given the complexity of the task at

SEPTEMBER 2011 • SMART LOGISTICS • 49

Air cargo security compliance, continued

hand – and the market forces at work – it is not surprising that air carriers and freight forwarders are still mired in using manual processes for many parts of their logistics functions. However, the growing demands for efficiency and the increasingly stringent regulatory mandates for document processing have made it clear that disjointed paper and electronic filing processes simply would not meet the security and compliance requirements of the future. This dilemma is one of the many driving forces behind the rapidly growing demand for on-demand solutions.

THE ON-DEMAND LANDSCAPE While there are a number of solutions available to help organisations automate processes and achieve efficiencies – with varying degrees of success – each presents unique challenges to organisations. Among these solutions are dedicated cargo portals and cargo communication systems. Each has strengths and weaknesses since they address specific functions. Dedicated cargo portals & carrier websites are proprietary and offer premium service to participating carriers. However, they often cannot be integrated into internal systems. These portal-based solutions are typically focussed only on the booking process and are owned by a group of carriers and may not provide access to all the forwarders’ desired trading partners. More importantly, they are usually focussed on one mode of transport, which may not serve the interests of an operation that has multi-modal processing requirements. The cargo communication systems are interconnected with each other, but more often than not, handle only parts of the process, such as the post booking or back end process. On the whole, aspects of these types of solutions may not be suited to meet the demands of air freight forwarders. On-demand logistics solutions, on the other hand, provide an affordable, web-enabled platform that is used on a pay-as-you-go basis. They provide an end-to-end process that brings together all modes of transport and manages the shipment process from the source to the door. Today, these solutions provide one connection to many – direct connections to the carriers, forwarders and customs. These on-demand logistics management solutions handle the entire ‘book to bill’ process while ensuring the privacy of confidential information such as end customer data. On-demand logistics

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solutions automate the AMS filings directly from the forwarders and confirm to the carriers that the information has been filed without having to expose customer information. Freight forwarders can leverage these solutions to handle all aspects of electronic shipment interaction between the carrier, intermediary customs and regulatory agencies and their customers. Unlike other offerings, they leverage a global logistics network to provide multi-modal management of the entire order fulfillment process. Users can manage all modes of transport; enable one-tomany connections to trade participants; offer value-added applications to help customers handle the complexity of the problem and allow carriers to interconnect with each other.

GETTING ON BOARD Tapping into on-demand resources is a relatively straightforward process. Rather than paying upfront capital costs for the hardware & software required to develop and implement an in-house infrastructure, on-demand solutions enable organisations to access a multi-modal global logistics network via the Internet. An on-demand solution provides global shipment visibility, which increases delivery precision, improves performance management and enables reporting & alert messaging. The data provided can play a key role in improving cargo yield management through load consolidation and proactive event management. It can also increase documentation accuracy by as much as 30 per cent by eliminating the need for paper and re-keying of data. In addition to setup costs, subscribers simply pay a low monthly fee on a per use basis. The result is a oneto-many connected and scalable network that offers rich business process application functionality over the Internet anytime, anywhere for any authorised users.

EASY STEPS With on-demand solutions, freight forwarders and their carrier providers have the ability to electronically communicate each step of the way, for everything from pricing and scheduling to tracking shipment status. This exchange of information dramatically streamlines processes by reducing the need to make telephone calls, or send faxes and emails. Everything is available in real-time simply by logging on to a global logistics network accessed via the Internet. Once

the freight is received at the forwarder’s facility, the master and house bills are entered into the appropriate systems. The air waybill (AWB) is then printed and the cargo is dispatched for delivery to the air carrier’s terminal. At the same time, the forwarder’s on-demand logistics system transmits the same AWB message electronically and that AWB is delivered in real-time to the designated air carrier’s host cargo system. All of this is done before the freight leaves the forwarder’s office or actually arrives at the air carrier’s terminal freight dock. When the freight arrives at the air carrier’s cargo terminal, airline staff does not have to enter all of the AWB data, since the information was already captured by the forwarder and electronically entered into the air carrier’s system. The staff simply needs to verify pieces & weight and accept the cargo. When the air cargo departs on the flight, the air carrier’s host system will automatically begin to send out status update messages – known as freight status updates (FSUs) to the forwarder, who can then electronically update their internal tracking systems. The forwarder does not have to call to check on the status of their freight. They only need to call when exceptions are noted in their systems. This saves a significant amount of time and greatly enhances productivity. The air carrier completes its side of the shipment when it sends the delivered (DLV) to consignee FSU message to the forwarder. The forwarder, on its part, can now deliver the cargo to the customer. On-demand solutions also offer applications that allow forwarders and carriers to work with their truckers electronically to tender loads, receive status messages on the movement of the loads and process & audit invoices against the contracts the forwarder has with individual truckers. This delivers even more productivity and optimisation enhancements. The bottom line is that on-demand logistics management solutions provide an affordable and highly effective way for freight forwarders to address the challenges faced each day. By simply embracing the features and functionality offered in these solutions, business processes can be streamlined; communications between business partners could be more easily shared; and the world of air cargo would safer than it has ever been. Courtesy: Descartes Systems Group Inc.

TECH TRACK IT TRENDS IN LOGISTICS

Dematic releases storage & retrieval machine and multishuttle flex THE RapidStore Mini-Load, a new series of high-performance storage and retrieval machines (SRMs) has been recently released by Dematic. It is a global engineering company that provides a comprehensive range of intelligent warehouse logistics and materials handling solutions and is the supplier of logistics systems for factory, warehouse and distribution centres. The RapidStore ML10 handles totes, cartons and cases in facilities ranging in height from 4m to 20m. Offered in three standard heights – 10m, 14m and 20m – RapidStore ML10 efficiently handles a host of container types in a multi-deep and flexible-width environment. The RapidStore Mini-Load operates at a travel speed of 6.0 m/s, accelerates at 4.0 m/s², has lift speeds of 3.0 m/s and lift acceleration of 3.0m/s², thus delivering up to 142 double cycles/ hour (based on an 8m crane operating in a 40m aisle). In addition, RapidStore Mini-Load cranes can be equipped with the new Dematic Typhoon high-performance Load Handling Device (LHD). Typhoon provides the capability of handling one or two containers of fixed and varying

The RapidStore ML10 handles totes, cartons and cases in facilities ranging from 4m to 20m.

sizes in a single, double or triple-deep configuration. In another recent launch, Dematic has introduced a new version of the Dematic Multishuttle staging buffer, called Dematic Multishuttle Flex. The newly introduced Multishuttle Flex boasts of added capability of accommodating multiple load sizes. It also accepts totes, trays and cartons.

Motorola unveils industrial-class fixed RFID reader MOTOROLA introduced the FX9500 industrial-class fixed RFID reader for tracking RFID-enabled pallets, cases and items at industrial-based read points such as dock doors and conveyors. The Motorola FX9500 features performance in the middle of densely packaged pallets and in situations with high liquid or metal content. With its IP53 sealing rating and durable design, the Motorola FX9500 is built to withstand harsh environments and temperatures in the range of -40° to +158° F (-40° to +70° C). The Motorola FX9500 comes in a 4-port model, as well as an

8-port model, which allows customers to cover more dock door portals or read points with fewer readers, thus saving on deployment costs. With support for the US and EU regions, the FX9500 RFID reader also provides accuracy for longer read ranges in applications such as yard management, and throughput rates, which enable more tags to be read in item-level RFID applications and densely packed goods. The FX9500 RFID reader is slated for release in the third quarter of 2011 from Motorola Solutions or through PartnerEmpower partners.

The Multishuttle Flex expands and contracts to accommodate the size of the load. It automatically adjusts ‘on the fly’ as it travels to a storage location so that the extractor device is set to accept the load. The load width range is 8-24 inches (200-600 mm) and the load length range is 6-34 inches (150-850 mm). It is also capable of providing single or double-deep loading in the rack structure. According to Ken Ruehrdanz, Distribution Market Manager, Dematic, “The ability to accommodate cases, totes and trays allows users to load SKUs directly into the Multishuttle system without the added step of placing every load onto a standard size tray or tote.” The Dematic Multishuttle solution is a highly efficient storage & staging engine that provides precise load sequencing at high rates, in a compact footprint with operational flexibility. The Multishuttle system is ideal for supplying items to piece pick fulfillment modules (goods to person picking) or mixed case pallet building operations. It is also used in applications for short-term buffer storage as well as applications involving storage for production operations.

Android tracking application for DB Schenker DB Schenker has produced a version of its tracking application for Android mobile devices. It enables customers to use their specific search criteria to track shipments, including all references entered at booking, such as the delivery note number and invoice number, as well as the air waybill and bill of lading. The application is available via the ‘Android Market’ in English, Spanish, Finnish, Polish, Chinese, Dutch, Czech and German. The application is already available for iPhone, iPad and BlackBerry.

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Tech track, continued

Logistics control tower & dashboard service launched CARRIERNET Logistics Control Tower Service has been recently introduced by Deltion, a UK-based software company, recognised internationally as a leading web-based application developer for supply chain, logistics and transport management. The logistics control tower service provides customised dashboards to give all levels of management and nominated partners visibility of chosen KPIs and real-time exception alerts; real-time end-to-end transport management and visibility; collection and delivery management. This also includes reverse logistics and bringing environmental benefits; supply chain visibility for all partners; supply chain collaboration enabling real-time SC event management; haulier load bidding for 3PLs, retailers and manufacturers; integration of existing logistics and business systems to provide cohesive KPI and BI reports web-based self-select collect and deliver slot & bay management and data integration from telematics equipment to maximise existing track & trace benefits. Commenting on the usability of CarrierNet Logistics Control Tower Service, Denis O’Sullivan, CEO, Deltion, avers, “There has been much talk in recent years of how critical it is to apply event management to supply chains. The problem is that there are so many events at any one time in any supply chain, from order receipt through production, storage and distribution. It is essential to identify the real problems automatically and not worry about finding out through detailed delayed analysis.” He adds, “It is essential to be proactive. If there is a problem event, you need to know first and tell your customers and resolve it before it escalates. It is a well-known customer service dictum that a problem, however severe, handled professionally and quickly is an opportunity for an improved relationship with your customer.”

DAMCO’S OCEAN FREIGHT VOLUMES INCREASED BY 11% IN H1 OF YEAR 2011 52 • SMART LOGISTICS • SEPTEMBER 2011

Prox RFID tag for IT asset tracking and management introduced GAO RFID has recently introduced a passive ultra-high frequency Prox RFID tag for IT inventory management or location monitoring of small high-value assets such as servers, routers, disk drives, tools and manufacturing equipment. The RFID tag, model 116029, has a maximum reading range of up to 3m in either metallic or non-metallic environments. It is also customised to support 240 bit EPC global Class 1 Gen 2 compliant silicon and the tag operates at a frequency range of 902 to 928 MHz, and has a maximum storage capability of 512 bits. With a frequency range of 902 MHz to

Prox RFID can be used primarily for IT inventory management.

9288 MHz and weight of 5.3 gm, the tag can function in an operating temperature between -20°C and 55°C. With an IP68 protection rating, the small form factor tag is encapsulated within a low-profile ruggedised rigid case, which allows it to perform even in harsh environments.

Inlay with 3D readability for industrial and logistics applications launched TAGSTAR Systems has recently announced Quadro ultra high frequency RFID inlay, which offers three-dimensional readability for industrial and logistics applications. TagStar’s Quadro design provides full three-dimensional readability, which offers greater flexibility for applications where materials may be placed or stacked at differing heights or depths. Compatible with multiple different frequencies and standards used in the US, Europe and Asia, TagStar’s patent-pending technology combines long-range readability with support for all ultra high frequency chips and their specific features. TagStar Quadro inlay allows the use of any chip with a single radio frequency configuration. It also enables readers to reduce their UHF emissions by up to 50 per cent, thus making it easier and less costly to meet FCC regulatory requirements. The product is approximately 80x80 mm and can be supplied on-reel as inlay or a ready-touse label with customised artwork such as logos or text.

Bourque Logistics introduces new version of YardMaster Truck BOURQUE Logistics, a provider of logistics software for industrial shippers, has introduced a new version of YardMaster Truck, a one-stop software solution. YardMaster Truck 2.0 addresses all tasks for weighing, inspection, documentation, and shipping operations for bulk & liquid products by truck, and inbound loaded trucks. The new version will support truck inspection management, scale integration for automated weight capture and scale ticket printing. The company said that it can also manage the loading of liquid products and provides complex volume correction calculations based on product

temperature and gravity or density. The software module provides functionality, which allows shippers to generate a bill of lading and customs documentation from an order, pattern or manually, and at the time of arrival, it enables check-in processing for driver and carrier credentials if required and the bill of lading destination can be modified if needed. Steve Bourque, President, Bourque Logistics, said, “With over 200 plant and terminal facilities using the YardMaster system for rail shipments, our clients can now leverage the same process for their truck shipping operations.”

CII INSTITUTE OF LOGISTICS EVENT REPORT

BUILDING WAREHOUSING COMPETITIVENESS

FASTER LOGISTICS GROWTH

KEY

With the country’s GDP posting higher growth rates, major sectors like automobile, retail, FMCG, will require robust logistics support. Under these circumstances, the development of warehouse infrastructure has become all the more critical. To resolve this criticality and bring about a major shift in the way the industry perceives warehousing, a two-day conference on ‘Building Warehousing Competitiveness: The Key to Logistics Success’ was organised by The CII Institute of Logistics. A report… AKMAL RAHMAN B THE warehousing segment has been attracting attention from many. This is not only true for venture capitalists who are eying this major market, but also the policy makers, who are planning to bring revolutionary measures to maximise warehousing efficiency. In line with this, the CII Institute of Logistics organised a two-day conference on ‘Building Warehousing Competitiveness: The Key to Logistics Success’ on July 28 and 29, 2011 in Chennai. More than 300 delegates attended the conference from various industries. The Minister of State (IC), Ministry of Consumer Affairs, Food & Public Distribution, Government of India, Prof KV Thomas, inaugurated the conference. The two-day conference discussed various measures such as upgrading the Indian logistics industry in terms of technology and resolving the infrastructure as well as regulatory issues with a focus on warehousing. Delivering his inaugural address, the minister said that the Union Government has plans to create a Special Purpose Vehicle (SPV) to undertake studies on foodgrain storage handling and transportation. Besides, the Planning Commission is also conducting a

Dignitaries unveiling the report ‘Building Warehousing Competitiveness’, prepared by CII-Institute of Logistics and PwC during the summit.

comprehensive study to suggest measures for the development of a modern storage infrastructure to boost the growth of the warehousing sector. The Centre has also introduced a negotiable warehouse receipt system in the country. The minister added that with a view to provide much-needed renovations to warehouses, diversification of services aimed at improving the agro-supply chain has been initiated on a wide scale. “The efficiency of the private sector and the fundamentals of the public sector can be

In order to identify efficiency of the Indian logistics sector, CII has inked an agreement with Switzerland-based non-profit organisation GCEL last December. Through this initiative, the CII and GCEL will undertake a study on the efficiency of the Indian logistics industry and the various ways to help develop the industry, as it involves a large amount of trade.

combined and the risks can be shared,” he said. The logistic market is valued at `5.6 trillion in 2010 and it is likely to touch around `17 trillion by 2015. The two-day event had around saw participation from eight companies including Coign Consulting, Chep India, Indospace, TCI, and TVS Logistics. Participants from several segments including the officials of Tamil Nadu Warehousing Corporation, Voltas, Fenner, Blue Star, Ashok Leyland, Harley Davidson, TAFE, TVS Lucas, Delphi and Godrej were also present. On the first day, speakers from various industries talked about their experience in warehousing. The session bought forth issues like transformation of warehouses from end-to-end distribution, regulatory issues faced in the warehousing sector

SEPTEMBER 2011 • SMART LOGISTICS • 53

Event Report, continued

and warehousing for aftermarket applications. On the second day, the conference covered issues like managing finished goods inventory, essential infrastructure, technology and advanced systems for warehouse management.

WAREHOUSING POTENTIAL Warehousing accounts for about 20 per cent of the domestic logistics market and is expected to grow Audience taking a note of event proceedings at a rate of 35-40 per cent annually, displaying high potential and discuss ways to improve and make for growth over the next few years. “It warehousing more efficient.” is imperative for the sector to not only In the past few years, the space and modernise but also adopt best practices size of the warehouses in automotive to achieve a world-class infrastructure industry are growing as it is developing platform,” said R Dinesh, Event Chairman at a rapid pace in India. Manufacturing & Joint Managing Director, TVS & Sons, companies are facing difficulties managing while addressing the event. the warehouses due to this unprecedented British Deputy High Commissioner, growth. The transition time for the supply Mike Nithavrianakis, spoke about chain has also reduced as compared warehousing competitiveness in the UK to few years ago, as the technology is and said that commercial opportunities implemented at every stage right from were enormous and both countries taking orders, distributor confirmation for should address significant opportunities releasing the dispatch to invoice processing for mutual benefit. all these create pressure on warehouses. During the event, Dilraj Singh To overcome these complications, it is

Union Government has plans to create a Special Purpose Vehicle (SPV) to undertake studies on foodgrain storage handling and transportation. Besides, the Planning Commission is also conducting a comprehensive study to suggest measures for the development of a modern storage infrastructure to boost the growth of the warehousing sector. PROF KV THOMAS,

MINISTER OF STATE (IC), MINISTRY OF CONSUMER AFFAIRS,

FOOD & PUBLIC DISTRIBUTION, GOVERNMENT OF INDIA

Gandhi, Principal Consultant, PricewaterhouseCoopers (PwC), released an exclusive report titled ‘Building Warehousing Competitiveness’, prepared by CII-Institute of Logistics and PwC. Elaborating on the report, he said, “From a mere combination of transportation and storage services, logistics is fast emerging as a strategic function that involves end-to-end solutions thereby improving efficiencies. In this report, we have tried to encapsulate our analysis on the warehousing services in India, their current challenges, future opportunities

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necessary for warehouses to modernise, as the pull-push and internal processing is becoming much faster. According to Pranil Vadgama, President, Chep India, another challenge in the Indian supply chain is the huge volume of inventories. To overcome this, collaborations in the supply chain via equipment pooling will help the companies to drive the efficient flow of materials and information.

REGULATORY ISSUES The event also discussed the regulatory

issues on warehousing. Arif Siddiqui, Director, Cogin Consulting spoke about leveraging on the regulatory framework to optimise growth opportunities in the sector and other issues in the warehousing industry. The conference also discussed warehousing for aftermarket applications. Addressing the issues, Mukund Srinivasan, Group Head, Mobis India, elaborated on the pan India opportunities in warehousing and added that creating multiple warehouses will help the companies to take the product closer to the customer and help in delivering the product faster and more easily. This method is called as ‘depot to customer network’. Other key factors for aftermarket warehousing included having RFID (Radio Frequency Identification) technology and bar coding with TDS (Tax Deduction at Source) to improve warehousing operations faster. “Just having a warehouse management system with ERP (Enterprise Resource Planning) without properly designed warehouse automation can become a major constraint,” said KB Nagaraju, COO, TVS logistics.

AIMING FOR A SMOOTH PATH According to CII-Institute of Logistics and a PwC study, the dynamic market requirements have made it imperative for Indian warehousing players to overcome challenges and maintain, improve and sustain competitiveness. Various measures such as skill development, policy initiatives and government measures, IT adoption and increased investments in the sector can be effective in increasing the competitiveness of the Indian warehousing players. However, this journey can be smoothened and simplified if the challenges and concerns are addressed with collaborative efforts among all stakeholders including the government and its agencies, policy makers, entrepreneurs, investors, logistics service providers, manufacturers, farmers and sellers. The mutual integration among them will rewrite the success story for the logistics and warehousing industry.

DEMAND-SUPPLY DYNAMICS SMART SUPPLY CHAINS

DESIGNING

AGILE SUPPLY CHAIN

Having an efficient and organised supply chain management is crucial and important for any company to stay ahead, especially when it is operating in a country, which is poised for a big leap. An agile supply chain is defined by safe and secure delivery of goods & services at the right time and at the right location while incurring the minimum possible cost. However, the company can further prosper and sustain its brand value in the market, if it has a supply chain which is ‘dynamic’. Read on to discover as to how a supply chain can be made more dynamic and agile... ARINDAM GHOSH THE continuously evolving needs of customers have forced companies to come up with several new supply chain models to meet these new and changing demands. A dynamic supply chain management would involve all the services under the term supply chain management, but with an additional quality of adaptability to changes under various situations. According to Kamal Singh, Director, Centre for Management Studies, All India Management Association (AIMA), “Today, every company in the world seeks to gain a competitive advantage through many operational prospects. There are many ways to gain a competitive advantage, but, of late, supply chain management has gained worldwide recognition of not only enhancing quality, but also of improving the operational efficiency of the business model in achieving their overall performance target without compromising on quality.” Dr G Raghuram, Professor – Public Systems Group, Indian Institute of Management – Ahmedabad (IIM–A),

however, believes that a dynamic supply chain management is able to deliver to the end customer what they want and when they want. “The word dynamic refers to quality of the supply chain management to adapt to the changing environment. It is not only about delivery to the customer, but also adaptability to the changing environment,” he adds. Agreeing with Dr Raghuram’s views, Dr Nallan C Suresh, UB Distinguished Professor and Chair, The State University of New York, Buffalo, elaborates, “A dynamic supply chain would exhibit flexibility and agility in all aspects of the supply chain. It would not only respond to the market changes, but also react quickly to disruptions in the production system as well as any kind of emergencies pertaining to the supply side of it.” SL Ganapathi, COO, NTL Logistics, also seconded the views of Dr Raghuram and Dr Suresh. “A supply chain is full of uncertainties pertaining to demand and supply. A dynamic supply chain is something which will adjust to conditions

and fulfill the customer’s demand to the desired level of serviceability.”

IMPLEMENTING DYNAMIC SCM The logistics sector today is at $110 billion and it is expected to reach US$200 billion by 2020. It therefore calls for developing and building strategies for future requirements to ensure that it remains competitive to serve the related industry. Dr Raghuram lists the following four pointers, which he feels would best suit the dynamic supply chain in the Indian scenario: • Reduce lead time: Improving technology can enhance the productivity of processes by reducing the number of steps or by improving the systems such that it reduces lead time. • Marginal surplus in infrastructure: The supporting infrastructure must always be surplus. Infrastructure refers to roads, warehouses, machinery, equipment, people which enable the movement of goods. If there is

SEPTEMBER 2011 • SMART LOGISTICS • 55

Demand-supply dynamics, continued

some surplus when there uncertainty in the business Companies in India and abroad are embracing is dynamism or when because of several factors, sustainability in their procurement practices there are variations in the the supply chain management Sustainability in procurement example supply chain, it becomes model can perish. In order • Body shop has a policy of ensuring 65% of its products to have easier to handle. to ensure dynamic supply ingredients produced by community trade suppliers (suppliers from disadvantaged communities) • Learning and engineering chain management in your • Body Shop works closely with these suppliers to achieve their supply chain accessories: DNA, it is important that you sustainability goals This should move towards understand that irrespective • Body Shop’s sustainability goal encourages sourcing continuous systems rather of the situation you are environmentally friendly item’s e.g. wood to be sourced from FSC (Forest Stewardship Council) certified sources than discrete systems. experiencing in your business, • When their Indian Community trade supplier Teddy Exports Continuous systems refer you are still able to bring faced difficulty in sourcing FSC wood locally, Body Shop helped to continuous planning and down your costs; improve them get access to appropriate sources. planning on a rolling basis. your efficiency and are able • Godrej Sara Lee decided to source saw dust for its mosquito If the planning is done on to enhance your quality repellent coils from a local lady, whose small scale unit had a capacity of 300 tonne a continuous basis, then competitiveness.” • Happy with the quality of saw dust, Godrej gave the unit Rs 40 the supply chain becomes Supply chain encompasses lakh to increase the capacity to 500 tonne, with the intent to more streamlined. every sector of the industry buy the entire output from the unit • Profit orientation: and every sector of the • Godrej used to pay the small unit the market price but it was to be reduced by 5-10% post the financial assistance Rather than functional consumption – be it • Godrej intends to add more suppliers from under-represented orientation. consumption for individual, sections in the next couple of years. Dr Nallan says that projects or export-driven Source: Accenture the Indian situation is very industries. Explaining the challenging, especially given importance of a supply chain IMPORTANCE OF DYNAMIC SCM IN the impediments in the logistics systems, through an example, Ganapathi says, “A INDIA in infrastructure, inadequacies and other power plant depends on the coal reaching In a country like India, due to factors like telecommunication interests and so the plant on time. If the coal reaches the fragmentation and prevalence of a large on. He points out that one has to be port and gets uploaded, but there is no number of small companies, the challenge extremely clever and skillful in navigating capacity for the rail to evacuate the coal is all the more detrimental. Dr Raghuram through all kinds of impediments from from the port and bring it to the power points out, “At the brand level, the stock the logistics side. To add to it, there are plant, the power plant could go offline. outs in India are very high because there numerous government-led regulations. This, in turn, could have secondary effects are no proper deliveries and companies He highlights that according to his own like load shedding, no production and incur huge losses, especially in cases of experiences, Indian managers & executives thus not meet the consumption. An ideal perishable items.” are extremely clever and intelligent when supply chain is highly important for India. “If we look at our supply networks, it comes to getting to the root of the I think it is time for us to make sure that a good number of our suppliers do not matter. “India is an excellent ground our supply chain functions properly – be even have basic IT infrastructure,” Dr for testing people for agility. Due to so it in terms of procurement, transportation, Suresh adds. many challenges in the Indian logistics forecasting or delivery.” Hence, Singh says, “It is equally sector, the country has proved to be a CHALLENGES FACED important to create a dynamic supply good breeding ground for high-quality A large segment of the logistics sector is chain management. Unless you do not managers,” he observes. handled by unorganised service providers. create it, you will not be able to bring Adding another perspective, Singh About 76 per cent of the logistics services the kind of cost efficiency that you have says, “Dynamic supply chain management in India are handled by the unorganised in mind. For example, if there is any can only be created provided that the top management of the company recognises the power of supply chain management Distribution Challenges as a key differentiator. The involvement of the top management and the subsequent Transportation & Logistics costs as a per cent of GDP are higher in India involvement of all the other employees, vis-à-vis the developed world. departments and other stakeholders, India has higher logistics costs as a per cent of GDP than developed suppliers, vendors is equally important as countries due to factors like: only then can it translate into a dynamic • Road infrastructure is traditionally weak and rail movement is supply chain management.” disproportionately low Demand fluctuates in every country • Truck ownership is fragmented and dominated by the unorganised and supplies face problems because of segment bottlenecks such as poor infrastructure • On the demand side, retailing is highly fragmented and dominated by and taxation. “I think collaboration the unorganised segment between the players is somewhat lacking • Taxation issues rather than efficiency dictate the location of stocking in the Indian scenario and this has to points. improve,” adds Ganapathi.

56 • SMART LOGISTICS • SEPTEMBER 2011

Demand Planning

Supply Planning

sector. Commenting on the BUILDING A STRONG Excellence in balancing demand-supply gap is a SUPPLY CHAIN major challenges towards prerequisite to reduce costs and improve service levels The Indian supply chain has implementing a dynamic Levers for Levers of supply a long way to go towards supply chain in India, Dr shaping demand agility Marketing becoming dynamic. Though Raghuram avers, “We need Demand visibility for the Network New product launch Dr Suresh sounds highly scale in many activities and Supply chain postponement and product category strategies rationalisation optimistic, he still wants India we have to build the scale.” Execution of logistics strategies Promotion Management based on the active translation to learn from China in terms Some of the other major Sales Incentives of demand of developing infrastructure challenges he highlighted were Trade & Channel Manufacturing strategies based Incentives on active translation of demand and says, “India embraces the lack of IT penetration and Price Management Design for supply concepts extremely well. It is a infrastructure. Runout Strategies Build adaptive networks cutting-edge player. The Indian The biggest challenge Tie agility programmes to demandshaping programmes thought wave, awareness towards implementing Sales & Operations and human resource are just a dynamic supply chain Planning Collaboration Advanced Analytical Stochastic incomparable to any other is posed by excessive Simulation Tools Platform Capabilities forecasting models country in the world. But government control and poor Supply Network Roles & Supply chain Demand Sensing Optimisation Responsibilities visibility the road will be even more infrastructure. “However, Master Data Management Executive Sponsorship Workﬂow Tools smoother, if the government from the personnel point Key Enablers brings in more flexibility and of view, our personnel are Source: Accenture loosens its grip.” naturally adaptive and are able The first highway was built outside to work in challenging situations. Hence, global players are looking towards India Shanghai in China in 1988. It was 16km here I do not see any major challenges,” not only to build their business, but also long. At that time, Chinese roads were Suresh says, adding, “The big challenge to build their business models.” more primitive than Indian roads. Now, continues to be the exploding population, Giving examples, he further adds, “In China has come to a stage that within 7-8 which, in turn, has an impact on the fact, many companies, who have come years, they will have better highway systems infrastructure as well.” But the picture is all the way from the rest of the world to than the US. “There is a huge infrastructure not all that grim as infrastructural problems India, have also chosen to make supply revolution going on in China and those are seem to be improving. “Parts of India’s chain management their key competitive things that we need to learn from China, infrastructure is making phenomenal advantage; Hindustan Unilever, DHL especially the infrastructure strategies,” progress, particularly in the NCR region,” and Marriott Hotel in the services Dr Suresh avers. Among other things, he claims. sector, to name a few. These companies Ganapathi highlights that IT has a crucial have taken a big leap in making supply EXISTING SUPPLY CHAIN NETWORK role to play in making India’s logistics sector chain management their key areas of In the new world of volatile demand dynamic. He says that India is IT driven and competitive advantage. Their businesses and supply, a company has to cater to is a powerhouse of IT knowledge. have witnessed tremendous growth “I think supply chains will be enabled by its customers by formulating strategies through this process.” IT for better forecasting and better control towards gaining deep customer insight Interestingly, Dr Suresh views the through the supply chain. India only has to about what they want; how they want supply chain in India as a pyramid with go up and with better infrastructure & and when they want. infrastructure at the lowest level, physical automation, the cost will come down. But These insights then need to be logistics at the middle level and supply I think, both cost-wise and delivery-wise, converted into business actions in chain management at the upper level. “In we can only go up,” Ganapathi notes. Dr alignment with a customer’s demands. India, we have a strange situation where Raghuram adds, “There is no choice. We “At an overall level, they are less than the foundation i.e. infrastructure, is very will have to move in that direction and it desirable; but many companies do a weak. While the middle level logistics will happen with infrastructure improving; good job despite the challenges posed in terms of the people, who deal with roads becoming better and IT & better by poor infrastructure. Talking of supply software, is extremely good, the physical communication devices.” chain management, many companies are hardware for logistics is very primitive. So, “Supply chains in India are far trying to manage with what they have. most of our challenges are in the two more adaptable and are actually But is the final outcome world class? bottom levels of our pyramid. Fortunately, quite dynamic because they have no The answer is ‘No’. But there are many at the upper level, our supply chain choice. When I say dynamic, it means companies, which are trying to do a good management is outstanding.” the ability to change depending upon job with whatever they have. So, there “If we take the logistics layer, the the needs. But the state of final outcome is a lot of effort on the supply chain two primary components of logistics are is not in the best final outcome. Finally, management. But still there are many transportation and warehousing. Our what the customer is getting in terms of other things that have to fall in place,” warehousing practices are primitive. We quality product will have to improve,” he claims Dr Raghuram. still have a long way to go in terms of concludes. Expounding on the same, Singh says, modernising and climate controlling “The Indian supply chain management our warehouses,” he says, adding that Inputs have been taken during AIMA Supply has just started picking up. As is clearly logistics and infrastructure are our major Chain Summit evident, after liberalisation, more & more challenges.

SEPTEMBER 2011 • SMART LOGISTICS • 57

PURPOSE-BUILT WAREHOUSES

Image Courtesy: Future Supply Chains

WAREHOUSING & DC

BUILDING YOUR WAREHOUSE THE

HOLISTIC WAY

Warehouses are structures built to provide a suitable environment for storing goods and materials. Hence, they must be designed to accommodate bulk quantities of materials, the associated handling equipment, the receiving & shipping operations and associated trucking, and the needs of the operating personnel. The design of a warehouse should be planned in such a way that it perfectly accommodates business service requirements and the products to be stored or handled. In order to build a well-managed warehouse, it is first essential to define its purposes, design it to suit those purposes and build it as per those designs. Ensuring this will help a warehouse become safe, and offer efficient and optimal performance. YES, I want to build a warehouse and I know how to do it… This may be the general impression of most people who have taken a decision to build a warehouse to support their current businesses and expand them as per their business strategy. Most of us know how to build a warehouse to suit one’s business requirements. This knowledge comes from their business intelligence, intelligence quotient, analytical skills, visits to other operations and observations made during these visits. With this understanding, many warehouses are built as per local trends & practices prevailing in those specific regions and some are

58 • SMART LOGISTICS • SEPTEMBER 2011

built using conversions and modifications to existing or sick units. But does such a warehouse support their current business needs? Can it handle future needs? These are some of the questions that need to be asked. Building a purpose-built warehouse is not as simple as it looks. There are many factors, which have to be considered to suit specific purposes. Since building a warehouse involves huge investments, it is important that we understand what a purpose-built warehouse is. Building such a warehouse is an important aspect and every business must give due considerations to these aspects while

taking such a decision. This concept is a combination of two aspects – purpose i.e. ‘why’ to build and warehouse i.e. ‘what & how’ to build. Let us now discuss and understand these two aspects:

PURPOSE This could be understood through the following questions: a) Why am I building a warehouse? Of course, to support my business. b) What business am I in? Many answers – you know your business better than anyone else. c) What sector do I serve? Choose your sector.

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d) Which customer do I serve? List all the be considered for a warehouse to fulfil its adjacent industries or land use, customers that you serve or intend intended purpose. All these finer points proximity to markets, residential to serve. Understand them, their get defined or validated by our ‘purpose & commercial zones, hospitals, fire businesses and business needs. document’. Once taken care of, the stations, banks, hotels & restaurants, e) What services do I offer? List down warehouse is in a better position to fulfil climatic conditions, wind directions, all the services that are those purposes and satisfy the offered or you intend to customer. Now, let us further Many warehouses are built as per local trends offer to each of the above discuss these finer points: & practices prevailing in those speciﬁc regions listed customers. Building components and some are built using conversions and f) What value-added and • Walls: Impermeable, modiﬁcations to existing or sick units. associated services are smooth finish and plane required? This could surfaces include repacking, banding, kitting, etc. • Wall material: Depends on the rainfall and flooding history, presence g) Which products do I handle? Make a required storage conditions inside the of major power & communication list of all the products that you handle. warehouse poles, availability of power, water, This is the first step towards the • Floor: Designed to take the proposed drainage, communication systems, creation of an ‘item master’. loads of stocks, storage systems, loads availability of public transport facilities, h) What are the product characteristics moved by material handling equipment etc. Collect and tabulate all the above that I handle? Here you update the (MHE) and any other imposed loads information. All this is required while above nascent stage ‘item master’ by • Floor material: Preferably concrete defining ‘what and how’ to build. including more specific information for • Floor type: Smooth & flat to suit MHE n) What is the timeline available to each product, which is called stock and storage system requirements. An bring the warehouse into operation? keeping unit (SKU) i.e. an item whose uneven and rough floor can adversely Understand the customers’ stock is maintained in the warehouse. impact MHE operations, safety of requirements and define the timelines. This will generally include SKU size, stock & employees and cost of MHE This will help to ‘plan’ the project. weight, packaging types, inner & maintenance Answer all these above questions in outer case types, storage condition • Roof: Impermeable and solid a structured manner. Interact with all the requirements, such as temperature or • Roof material: Compatible with stocks. stakeholders concerned and get their key humidity, hazard types, stacking norms, Use of asbestos is not recommended inputs recorded on what we can call our handling norms, inventory norms, shelf by a majority of users ‘purpose document’. Once the ‘purpose life, etc. • Roof slope: As gentle as possible. This document’ is ready, a major part of the i) What are my key performance will not only effectively drain off rain job is accomplished. indicators (KPIs) to satisfy my water, but also help save on usable WAREHOUSE customer? KPI in simple terms means warehouse volumes & provide better This aspect will try to understand ‘what the criteria against which performance maintenance platform over roofs & how’ to build? A warehouse consists is measured and which are critical for • Skylight: Use of skylight will enhance of three basic elements viz., building, a customer’s business performance. visibility during the day. In Indian floor and docks. Most of the warehouses Make a list and categorise these KPIs tropical condition, four per cent of are built considering only these basic into List A, B & C depending on the skylight area gives excellent results elements. But, in reality, apart from these, importance to your client. and helps save on lighting & power there are other finer points that need to j) What volumes am I supposed to expenses handle today, tomorrow and probably, in future? This volume is measured in Purpose Component Impacted Design Component terms of throughput, inventory, metric Sector served Size, storage system, storage conditions, security systems tonne (MT), number of cases, etc. Customers & services Entire warehouse design aspects k) Understand the type of your Value added services (VAS) VAS area of the warehouse warehouse operation? Is it going to be Products handled Entire warehouse design document 100 per cent manual, semi-automatic Product characteristics (SKU details) Storage & handling systems, VAS area, pallet types & size, or fully automatic? refrigeration (for cold storages), ventilation & air-conditioning systems l) How is the operation likely to change Product characteristics (inventory Size of warehouse, storage system, MHE over a period of time? Will it move norms, throughput) from manual to semi-auto and Most warehouse design aspects with special attention to dock, KPIs mainly associated with eventually, to fully auto? storage systems, MHE, aisle widths, signage, common facilities, productivity, efficiency, accuracy & m) Is selecting the location in my control? utility services, etc. scheduling of operations If not, which is the assigned location Volumes to be handled Space (not area) requirements, storage systems, MHE, number and what are its key characteristics? of docks This generally includes size, dimensions, Warehouse operation automation Automation systems, storage system & MHE plot profile, terrain conditions, vicinity Location characteristics Major warehouse design document conditions, area, directions (northTimeline Schedule & managing project execution south & east-west), strata conditions,

SEPTEMBER 2011 • SMART LOGISTICS • 61

Warehousing & DC, continued

• Dock height: This is a critical component for efficient & safe dock operations. This height is dependent on the bed height of vehicles that are used to move stocks in & out of the warehouse and also the type of dock levellers that are planned. In the Indian context, considering different vehicles types which are in use, the decision regarding dock height should be taken taking these factors into consideration. Equipment used in the warehouse • Dock leveller: A mechanical, hydraulic or even, air bag device can be used to bridge the height gap between the warehouse floor and the vehicle bed. Thus, it is important to select a proper type & model of dock leveller. Another point to be considered here is the selected MHE & its gradeability under maximum load conditions. • Other dock equipment components: These include leveller lip, dock light, dock shelter (in case of refrigerated staging areas), vehicle bumpers, wheel chocks, vehicle restraints, tail gate arrangements, air curtains, strip curtains, etc. A proper selection process ought to be followed to ensure best results at optimum total cost. • MHE: Selection of MHE is probably one of the early decisions to be taken before advancing to detailed warehouse design. The selection of MHE drives many other decisions such as door sizes & their heights, storage system design, aisle widths, dock leveller type, battery charging station designs, pallet types & sizes, etc. Its selection depends on the unit loads (pallet loads), SKU & case details, storage or stacking norms, stacked pallet heights, MHE operators’ skill levels, throughput data & calculations, warehouse size, storage system designs, etc. Hence, such a critical decision has to be taken after fully considering all the operational aspects. • Types of MHE: Most of the warehouses use hydraulic pallet trucks (HPT), which are very basic MHEs used for horizontal movement. When the size of the warehouse increases substantially, manual movements using HPT become less efficient. In such a scenario, one has to move to more atomised options such as battery operated pallet trucks (BOPT). A BOPT is used for fast & heavy horizontal unit load movement and requires charging

62 • SMART LOGISTICS • SEPTEMBER 2011

of batteries at regular intervals. In fact, battery changing is required for all battery-operated MHEs. Once the storage system changes from ground stacked to a multi-level one, one requires other types of MHEs, which can move unit load in a third direction i.e. vertical. For this, stackers, forklifts, reach truck, very narrow aisle (VNA) & similar types of MHEs may be used. MHE is a highly capital-intensive item and more so, when we move from basic equipment to more advanced ones. Hence, such operationally critical & high-capital value items must be selected after a proper analysis & selection process. In India, there are many local & imported ranges of MHEs available, including low-cost Chinese versions. • Storage Systems: This is used to increase the cube utilisation of warehouse space by using different types of storage systems. Vertical space in the warehouse is utilised by resorting to racking and shelving systems. Racks and shelves are mainly assembled steel components designed & manufactured to suit specific storage combinations. The most common & widely used system is the selective pallet rack (SPR) where 100 per cent selectivity is possible. Systems such as double deep, live (flow) pallet, drive-in, drive-through, mobile rack, satellite (shuttle) are available and are offered by many manufacturers. • Other equipment & systems: These include doors, windows, signage, public address (PA) & building management systems (BMS), value-added services area, other small equipment for product handling, weighing scales, pallets, cartons, packaging equipment, etc. Services The services required in a warehouse include electrical, air-conditioning, ventilation, refrigeration (in case of cold storage), communications and connectivity, warehouse management system, water supply, drainage, fire protection, access control, etc. It is necessary to design these systems for their correct & intended use and optimised operations. Other aspects The other aspects worth mentioning here while finalising warehouse design include master planning of the entire plot area, vehicle or truck flow, people flow,

safety & security of people; employees; stocks, gate operations, vehicle and truck parking area, driver’s facility, pathways, cafeteria, change rooms, lockers, toilets and washrooms, etc. Location aspects Location aspects would include master plan components, wind & rain direction, entry and exit gate locations, storm water, road widths and landscaping spaces. Sizing of warehouse How much to build is a million dollar question. If more is built, it adds on capital & operating costs and if less is built, then it affects operations & business. So optimum size is what one must always look for. Some factors that impact warehouse size are throughput, inventory levels, SKU profiles, ordering profile & order cycles, types of storage system and material handling system. A warehouse could be absolutely flat, which will cover more footprint for a given volumes. On the other hand, it can be slender as well for handling the same volumes. Land cost, investment on construction & operating costs vary according to this flatness & slenderness of the warehouse. An optimum mix of the flat & slender profile offers maximum operational efficiencies & effectiveness and can be achieved through rigorous calculations, simulation & statistical modelling.

SERVING A PURPOSE A proper selection of the above items will create our ‘design document’. A purpose built warehouse is not ready unless we properly put these jigsaw pieces together to form a complete picture. It is not ready until and unless all the aspects of our ‘purpose document’ are addressed by corresponding ‘design documents’. To fulfill every purpose, a corresponding design component has to be addressed. A warehouse thus designed and built as per its intended purpose is bound to impact operational efficiency, throughput, cube utilisation and eventually, investments. A well-managed warehouse fulfills customers’ KPIs and keeps him satisfied. Instead of wasting investments on land and warehouse buildings, which are not built to purpose, it is always advisable to define its purposes, design it to suit those purposes and build it as per these designs. Build to purpose & continue operating safely, efficiently and optimally! Sudhir Dabke, Director–Projects, ImpelPro SCM Solutions

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 66 to find it quickly

CONVENTIONAL PALLET RACKING SYSTEMS

ensure safety of the goods from natural calamities or any other accident. Salient features of the warehouse include: spacious, latest design, and well-equipped with material handling equipments.

acord India offers conventional pallet racking systems that are universal systems for direct access to each pallet. These pallet racking systems are the best solutions for warehouses where it is necessary to keep a wide range of ar ticles on the pallets. The wide range of profiles and accessories provides optimal adaptation to each load and height requirement. Layout and height of the racking is determined by the characteristics of the forklifts, pallets to be stored and the dimensions of the premises. Salient features include: direct access to every pallet; pallets can be removed without moving or displacing others; simplify stock control, since each pallet has its own location; and can be adapted to any size or pallet weight. The mobile base shelving system makes it possible to increase usable space in the warehouse by 80 per cent by eliminating individual access corridors. Aacord India, Pune 411 037. Tel: 020-2426 5926, Fax: 020-2427 3184, Mob: 09822607719 Email: aacord@gmail.com, Website: www.aacordindia.com

PALLET RACKING SYSTEMS

onmat Systems manufactures drive-in and drive-through pallet racking systems that offer the ability to store a large amount of similar loads in a smaller area. Selectivity is sacrificed but the storage density is outstanding. Drive-in racking can store up to 75 per cent more pallets in the same space than selective racking, depending on the application. It requires fewer aisles and has better cubic storage. Drive-in racks allow a lift truck to enter the rack from one side to pick up or pull out pallets. This is done because the pallets can slide backwards on a continuous rail. Fork lifts drive into the rack to access pallets two or more deep. Users are limited in the depth of storage for a par ticular bay by the size of their facility. Drivein is a last-in, first-out arrangement, whereas drive-through is a first-in, first-out arrangement. Conmat Systems Pvt Ltd, Vadodara 390 010. Tel: 0265-2647276, Fax: 0265-2630763, Mob: 09898870278 Email: info@conmatindia.com, Website: www.conmatindia.com

WAREHOUSING STORAGE FACILITIES

uper India Packers & Movers provide spacious warehousing storage facility for products that are in transit phase. The company takes full responsibility of keeping customers’ goods safe in its worldclass warehouse until they are delivered to the desired destination. The warehouse facility is wellplanned by exper ts as per international standards so that

Super India Packers & Movers New Delhi 110 037. Tel: 011-2678 3319, Fax: 011-4122 4553, Mob: 09873009451 Email: jiaggarwal@yahoo.in, Website: www.superindiapackers.com

INTEGRATED SEA FREIGHT & ASSOCIATED SERVICES

ea Sky Logistics offers a comprehensive range of integrated sea freight and associated services. Sea freight FCL/LCL worldwide expor ts/impor t include: freight forwarding, customs clearance, door-to-door worldwide, personal effects, hazardous cargo DG consultancy, transpor tation (bonded warehouse, general warehouse, open space warehouse), distribution, consultancy, rail & truck intermodal, project cargo, etc. The international air services are: air freight, door-to-door, airpor t-to-airpor t, personal effects, transpor t, documentation, customs clearance, etc. Sea Sky Logistics, Chennai 600 001. Tel: 044-4205 1090, Fax: 044-4201 3938, Mob: 09092666646 Email: sales@seaskylogistics.in, Website: www.seaskylogistics.in

WAREHOUSING & LOGISTICS SERVICES

nderstanding the requirement of clients, Swastik Cargo Packers have fully furnished warehouse equipped with the latest amenities and therefore retains the authentic quality of clients’ products. To eliminate any kind of confusion while loading clients’ range, these are stored in an orderly manner. Some of the features of the warehousing services and storage services are: properly ventilated, termitefree, timely checks for detection of foreign materials, etc.

Swastik Cargo Packers, Meerut 250 002. Tel: 09312024520, Mob: 09268914493 Email: swastikcargo@yahoo.com

WAREHOUSING SERVICES

halimar Warehousing Corporation offers services in storage and handling operations, providing customers warehouses as per their speciﬁ cations and size in the required area of operations. These services are also provided with material handling equipments, like forklits, hydras for loading/unloading and proper stacking of the materials to be handled; managing the incoming and outgoing cargos as per the DO issued by the principals with professionally well-trained staff with complete knowledge of SAP operating system; daily SEPTEMBER 2011 • SMART LOGISTICS • 63

EOT CRANES

riends Engineering Works offers EOT cranes. The rational structure is of box construction (as per IS:800 bridge girder structural calculation) 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 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. Electric operations are controlled with push button control unit independent from the position of winch trolley and sliding in loop through cable carriers. Limit switches are provided for all operations, to ensure accident-free operations.

Friends Engineering Works, Udaipur 313 001. Tel: 0294-2492200, Fax: 0294-2492201, Mob: 09829042424 Email: info@friendseng.com, Website: www.friendseng.com

PALLET STORAGE RACKS

ek Engineering Works (Regd) offers pallet storage racks in different confi gurations to fi t every size and every budget. These racks can be used for a variety of storage applications. The pallet storage systems are engineered from the ground up. These designs take into account product size and weight, as well as future expansion considerations. Consideration of the pallet rack systems when planning a new building or warehouse will result in more costeffective and effi cient warehouse operation. Tek Engineering Works (Regd), Delhi 110 006. Tel: 011-2392 2067, Fax: 011-2521 1265, Mob: 09810181228 Email: tek_engineering@yahoo.com Website: www.tekstoragesystems.com

INDUSTRIAL WAREHOUSING SERVICES

riental Marine Lines offers a wide range of industrial warehousing services. The company operates from their premises at different and easily approachable

64 • SMART LOGISTICS • SEPTEMBER 2011

Orient Marine Lines Pvt Ltd, New Delhi 110 055. Tel: 011-23514052, Fax: 011-2362 5477 Email: shirishk@orientm.com, Website: www.orientm.com

STORAGE SYSTEMS

ay Equipment & Systems manufactures and offers various kinds of material handling equipment and storage systems. The range of these storage systems includes: conventional U A L I T Y long span shelving, pushback pallet racking, drive-in racking, racking, live storage, mezzanine floors, etc. These most popular A P P R O and V E Deconomical form of pallet racking systems provides 100 per TRO cent safe and selective storage, selective racking that can help fully utilise valuable air space. Storage racks can be designed to meet vir tually any pallet size or weight, or any material storage and can be used in conjunction with all types of material handing equipment. A wide range of accessories is available to accommodate non-standard palletised loads. L

APPROVED Shalimar Warehousing Corporation, Mumbai 400 062. O N T R Fax: Tel: 022-2879 O3333, 022-2879 3333, Mob: 09924355999 Email: info@shalimarwarehousing.in, Website: www.shalimarwarehousing.in, Certification: An ISO 9001:2008 Certified Company

locations. It has its own warehousing facilities for warehousing goods of any kind, including electronic items, machinery, iron & steel products and engineering goods. Services offered also include: receiving goods at the warehouse; reworking on the packing; repacking & redistribution; entreaty management; and insurance, security & safety.

reporting to the principal ofﬁ ces of the daily operations details as per their formats through fax, emails; providing adequate computer systems, printers, fax machines, etc, for smooth UALITY operations; and providing required telephone lines for the same.

Jay Equipment & Systems Pvt Ltd, Mumbai 400 104. Tel: 022-2676 3552, Fax: 022-2676 3895, Mob: 09225141811 Email: sales@jayequipment.com, Website: www.jayequipment.com, Certification: An ISO 9001:2008 Certified Company

CLIP-ON SYSTEMS

hlada Industries offers heavy-duty clip-on systems. Beams are available in three profiles: open, stepped and boxed section. These beams are designed for different load requirements. The beams are supplied in standard grey colour. Other non-standard house colors can be supplied, as per customers’ requirements, subject to volume and colour availability. Available from 1000 mm to 2700 mm clear entry beams are clipped to ver tical frames and are adjustable at a pitch of 100 mm. Each level has boxed, stepped or J-beams using enamel/epoxy painted/powder-coated steel shelf panels. Steel shelves with dividers are also available. Ahlada Industries Pvt Ltd, Hyderabad 500 043. Tel: 040-2309 4301/302, Fax: 040–2309 4300 Email: industries@ahlada.com, Website: www.ahlada.com

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

PRODUCT & ADVERTISERS’ INDEX

To know more about the products & advertisements featured in this magazine, write to us at b2b@infomedia18.in or call us on 022-3003 4640, and we will send your inquiries to the companies directly to help you source better. Products

Pg No

Barcode & RFID technologies ................................................................................................................................................................................................................................................23 Clip-on systems ...............................................................................................................................................................................................................................................................................63 Commercial bonded warehousing .....................................................................................................................................................................................................................................BC Commercial documentation ...................................................................................................................................................................................................................................................BC Commercial vehicles ..................................................................................................................................................................................................................................................................BIC Containerized transportation .....................................................................................................................................................................................................................................................7 Conventional pallet racking systems...................................................................................................................................................................................................................................62 Domestic aftermarket services & spares logistics .....................................................................................................................................................................................................BC EngineeringExpo exhibitions ....................................................................................................................................................................................................................................................65 EOT cranes ........................................................................................................................................................................................................................................................................................63 Exhibition - EngineeringExpo ..................................................................................................................................................................................................................................................65 Forklift spares.......................................................................................................................................................................................................................................................................................3 Industrial warehousing services ..............................................................................................................................................................................................................................................63 Integrated sea freight & associated services ..................................................................................................................................................................................................................62 International trade ........................................................................................................................................................................................................................................................................BC IT asset management ..................................................................................................................................................................................................................................................................BC Knowledge process outsourcing ..........................................................................................................................................................................................................................................BC Pallet racking systems ..................................................................................................................................................................................................................................................................62 Pallet storage racks........................................................................................................................................................................................................................................................................63 Storage systems...............................................................................................................................................................................................................................................................................63 Taxation regulatory compliance under export promotion schemes ............................................................................................................................................................BC Warehouses .........................................................................................................................................................................................................................................................................................7 Warehousing & logistics services..........................................................................................................................................................................................................................................62 Warehousing services ..................................................................................................................................................................................................................................................................62 Warehousing storage facilities ................................................................................................................................................................................................................................................62

Pg No

Advertiser

Tel. No.

E-Mail

Website

Engineering Expo

+91-9819552270

engexpo@infomedia18.in

www.engg-expo.com

Frost & Sullivan

+91-22-66072031

subirs@frost.com

www.frost.com/ FutureSupplyChainStratagies2011

Great Eastern Impex Pvt Ltd

+91-124-2347431

info@geipl.com

www.geipl.com

M&M Connect Advertising & Promotions

+91-80-40824600

info@indelox.com

www.indelox.com

BIC

Mahindra Genio

+1800 22 6006

Vijay Logistics Pvt Ltd

+91-2135-675000

info@vijaylogistics.com

www.vijaylogistics.com

FIC

VRL Logistics Ltd

+91-836-2237511

headoffice@vrllogistics.com

www.vrllogistics.com

Watrana Traction Pvt Ltd

+91-11-27456600

sales@forkliftspares.com

www.forkliftspares.com

www.mahindragenio.com

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

66 • SMART LOGISTICS • SEPTEMBER 2011

Use this form for free additional Information on advertisements published in this issue. We will send your inquiries to the advertisers and ask them to send you the details or contact you directly.

HOW TO USE THIS FORM: • Please tick against the box of advertiser(s) you are interested in: • Mention specific product/ service you need, against the advertiser’s name • Complete all the details on this form. • Tear the form & mail it to us. (It is a prepaid mail) Tel.: +91-22-3003 4640 • Fax: +91-22-3003 4499

E-mail: b2b@infomedia18.in

PRODUCT INQUIRY FORM Barcode & rfid technologies

Forklift spares

Commercial bonded warehousing

International trade

Commercial documentation

IT asset management

Commercial vehicle

Knowledge process outsourcing

Containerized transportation

Taxation regulatory compliance under

First Fold Here

export promotion schemes Domestic after market service and spares logistics

Warehouses

Exhibition - Engineering Expo

Second Fold Here ADVERTISERS’ INQUIRY FORM Mahindra Genio

Frost & Sullivan

Vijay Logistics Pvt Ltd

Great Eastern Impex Pvt Ltd

VRL Logistics Ltd

Engineering Expo

M&M Connect Advertising & Promotions Watrana Traction Pvt Ltd

Third Fold Here

GLUE

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09 / 2011

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