LOG.India December 2010 by Frewin Francis

IndIa’s LeadIng LOgIstIcs MagazIne www.logisticsweek.com

INDIA

December 2010 — No.4 October 2010 | Vol.Vol. 4 – 4No.2

Method In Motion

amit mukherjee, Vicepresident (iT and supply chain) and group cio at rpg, has deployed exemplary supplychain strategies at spencer‘s retail >> page 34

100 `` 100

Mission Replenish GCPL supply-chain’s replenishment model holds many takeaways for peer companies. And the man in the thick of the action is Rakesh Sinha, COO (Marketing & Operations), Godrej Consumer Products Ltd. (GCPL) >> Page 34 < FEATURE

Order Accuracy

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INDIA |

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December 2010 | www.logisticsweek.com

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Why Why WMSbenchmarking still does not have mustenough be made a norm takers in in theIndia industry

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eDITORIAL

Art and Graft

hat would a journalist do without scams? Mark my words, that day is not far away when we’ll have a module on how to expose scams in our journalism schools. Where former scam artists would come to teach, but only as guest lecturers, obviously because they will impart scam knowledge for the love of the art, not for the want of money. Thankfully, for now, we in the media don’t have to look far for mentors – as it turns out, courtesy Nira Radia tapes, we have enough powerbrokers in media to coach us – provided they get time off acting as info-conduits for political parties and big corporate houses. Since I haven’t had the good fortune of imbuing the art of scamming (though once I was given to write a chapter for a book on the Satyam scam, but sadly the chapter was on the juiceless subject of corporate governance), I have, of late, been plagued by a very pointless question: What is it with India and scams? What explains our fondness for misappropriation Aanand Pandey of public money? But before I get into it, there is another question that begs an answer: How is Editor the aforesaid question related to logistics? I mean, ours is a logistics magazine, and you must be sick to the gut reading about scams everyday and everywhere, and you pick up Log.India looking for some logistics content, flip to the editorial page and voila, scams again. Why? Because the other day I was talking with an automotive supply-chain head about why our government needs to engage the logistics industry when it comes to policy-making. He reasoned, “The government should pay more attention to what we, as an industry, have to say. After all, our larger motive is to bring down the overall logistics costs in the country, which is now close to 13 percent of GDP. In the developed world, it is 8 percent. Even if we bring it down by one percent, that’s huge savings for the country.” In the same breath, he said, “But what is the point of all the savings if they are going to be scammed away?” That thought stuck with me, so I came back and did a bit of number doodling. And man, I was amazed at how close to the truth he was. According to the latest Economic Survey, our annual GDP is `53 lakh crore. One percent of that is `53,000 crore. According to a recent report by Global Financial Integrity, a Washington-based research group, scammers siphon off `72,496 crore ($16 billion) a year through corruption, tax avoidance, bribery and other means. Now the original question. What’s it with us Indians and scams? I posed the question to two people in the logistics industry from both sides of the fence – one, a high ranking Railways officer, and the other, the owner of a 3PL company. In a nutshell, while both of them agreed to the larger point of corruption having pervaded both public and private sectors, the Railways guy – who also works with people from the hospitality sector – blamed it on the latter’s sense of ownership. He has seen that the private sector guys don’t stick with one company for long, even if it’s the Railways. They are always looking for that bigger, better deal. Work ethics and everything else come later in their book. The 3PL owner blamed it on the lack of competition in the core sectors and lack of accountability in the corridors of bureaucracy. For example, if you have a problem with the Railways but still want to use the same mode of transportation, you have no alternative but to go back to them. That breeds corruption. Sectors that have opened to competition have seen a drastic fall in the level of corruption. As for bureaucracy, the more the accountability to the public, the less the malaise. All hail RTI! However, I am still not convinced. And the question continues to haunt me. I mean, scams are everywhere around us, in spite of RTI or increased competition in the core sectors. There must be some deeper rot, something inherently wrong with our society. For lack of a better rationale, I put it down to one factor: Most of us are doing our jobs for the wrong reasons. We do our jobs with an eye on the money, or security, or social status, or all three. But those who choose a particular job primarily for the love of the work, about what difference – howsoever small – their work makes to the society, I can vouch that these men and women can never be corrupt. The rest of the motivators like money or social status will follow. For bureaucrats, in particular, there must be psychoanalytical tests as part of the recruitment process to check that the larger good of the society, and not money, is their prime motivator. They must be told at the time of the initiation that their kin are provided with the best of amenities to make up for big money, to ensure that they attain the other two motivators – security and social status. As for why politicians scam us, I got nothing.

Aanand Pandey

www.twitter.com/logisisticsweek

www.facebook.com/logisticsweek

aanand@logisticsweek.com INDIA |

December 2010 | www.logisticsweek.com 5

Contents 18 IntervIew

24 Feature

Curtain Raiser

Ignore At Your Risk

CII-IL is hosting Logistics Summit 2010 in December. As an overture, TCI's Vineet Agarwal replies to a few questions on what's ailing the transportation industry.

Companies must measure and benchmark practices regularly for long-term growth.

18 20 uPSHOt

The 2nd Crane Technology Day was held across three locations in a single week. From low inertia solutions to radar based positioning sensor, it had everything.

i on

Godrej Consumer Products' supply-chain has adopted replenishment philosophy that offers many takeaways for Indian consumer goods companies.

Logistics or supply Chain? The evolution of logistics is traced from the basic, elementary concepts which were followed earlier to the more sophisticated, well-integrated model that is practiced today.

22 December 2010 | www.logisticsweek.com

o ep n r ion t

a t io

ra Evalu pe Pr e

Mission Relenish

22 COLuMn

INDIA |

34 COver StOry

Industry Events

c u ss o m ion pa of ny fin /o rg dings an isa tion

t a En tr y

is D h it

r o duc t i o t p n

Ac t

Impr

Data Collection

DeCeMBer 2010 ADVeRtIseR InDeX

44 Feature

secure Your Business

Arham Logiparc .......................................................BC BLR ......................................................................... 53 Capricorn ............................................................... 47 Cemat ......................................................................14 CII - Event ............................................................... 57 DIESL ..................................................................... IFC DIESL Event..............................................................13 Exide ......................................................................... 9 Green Earth ........................................................... IBC Hormann ..................................................................15 Indl Compressor ...................................................... 33 ManForce Trucks....................................................... 3 OCLP ....................................................................... 67 R K Foodland ........................................................... 27 Reverse Logistics .................................................... 63 RTC ......................................................................... 50 Safexpress ...............................................................17 SBI .......................................................................... 43 Schaefer ...................................................................11 ShriRajlaxmi ............................................................ 37 ShriRajlaxmi ............................................................ 39 Uniworld .................................................................. 29 Vijay Logistics ........................................................... 4 VRL ..........................................................................19

Security is of supreme importance as industry has suffered substantial losses due to neglect of this crucial criterion of doing business.

44 51 SPeCIaL Feature Maritime Rules

In this concluding two-part article, the maritime sector needs to relook its policies for ports, container shipping and coastal shipping.

nOveMBer 2010 IndIa’s LeadIn

Method In Motion

amit mukh erjee, Vicepresident (iT and supp ly chain) and group cio deployed exem at rpg, has plary supp chain strate lygies at spen cer‘s retail >> page 34

60 PanOraMa

TElEc MEETING omOF logis TITANSTics 16 20

Movem CSCMPent ’s 2010 of telecom conference network at San Diego equipm wasent bigger opens aand window richer than of opportu ever nity

Wide View

Books, Journals, Blogs, Technology - a look at what's new in and for the supply chain industry.

reGuLarS

news

g LOgIst Ics Magaz Ine www.logisticsw eek.com

INDIA

Novemr ber Octobe 2010 2010 | Vol.Vol. 4 – 4No.2 — No.3

100 `` 100

Outside The Box

Prem K Verm a, CEO, TML Distributio n Company Limited, a Tata Moto rs subsidiary , discusses supply-ch ain in depth and offers innovative strategies >> low MORE FOR adop LESS TioN 34

Page 22 24

Why Four WMS leversstill thatdoes not canhave help improve enough takers transpoinrtIndia efficiency

NEgl MARITEcTEd IME‘S waTE ALBATrway ROSSs 38 44

India Policyisand ignoring infra issues inland waterw that areays hurting at its own peril maritime growthIndia’s

events

DECEMBER 2010

68 PrIMer

Back to Basics A revisit to some of the commonly-used terminologies in the supply-chain industry.

INDIA |

December 2010 | www.logisticsweek.com 7

< news

TRAIN OF THOUGHT

opeRaTIVe InDeX* Cafe Coffee Day, Tanglin Retail, MAC Group, Sical, Aegis Logistics, APM Terminals Pipavav............... 12

I am enjoying this diversity. — Ashok Pal singh, DDg - Logistics, of Nandan Nilekani-led UIDAI project, on the mix of people from private and publics sector in the team, in Forbes India.

We plan to set up facilities in five FTWZs in India in next two to three years to cater to the growing need of the trade as well as expand our footprint. — Amadou Diallo, Ceo, south APAC, DHL global, to Press Trust of India.

Efforts are needed to develop a strong network of back-end facilities like logistics, infrastructure and storage of goods in rural India to benefit from the vast opportunity presented by FDIs. — Jyotiraditya scindia, union Minister of state for Commerce and Industry, during a session of a national seminar on ‘FDI - problems and perspective’, organized by the University of Pune’s law department.

International Air Transport Association, Safexpress ..... 15 Sparta Logistics, PT Freight Management Indonusa, Marubeni, Exxon Mobil ....... 16 TCI, CII-IL ........................... 18

*Key entities mentioned in the news section

Tunnel Vision? it was touted as the ﬁrst revolutionary PPP initiative in rail operations taken by the indian Railways. now with the manifold hike in rates, private train container operators are wondering whether the business was ever in for the long haul, ﬁnds out Jayashree Mendes.

he Rates Directorate of Railway Board’s pronouncement, issued through a Rates Circular 30 (RC-30), of an increase in domestic haulage rates by 45-100 percent on nine specific commodities has come into effect from December 1, 2010. The new rates, valid till February 2011, are applicable to all container operators. Haulage rates are charges that container operators pay the Indian Railways for using its infrastructure. This does not bode well for the private container train operators (PCTOs) who are already reeling under heavy losses. The new rates will mean forgoing haulage of the nine commodities while reducing access to about 10 percent of the addressable domestic market. Ajay Mittal,

INDIA |

The hike will make it impossible for the PCTOs to carry the nine commodities and reduce access to about 10 pc of the domestic market. Group Chairman & Managing Director, Arshiya International, says, “Prior to the increase in rates, we could address only 35 percent of the cargo business. Rail business by nature requires large volumes if private operators are to break even. Our effort has mainly been to increase rail share by diverting piecemeal cargo from road to rail.” This is the second circular issued by the Ministry of Railways since September. The earlier circular (RC-25) declared a hike in haulage charges on five com-

December 2010 | www.logisticsweek.com

modities, which was put on hold after protests from the private players. But the new circular puts container operators on an even worse footing as even the number of products have been increased. Private operators attribute it to an anxiety on the part of the Railways, and one that could be the last straw. Mittal, a private operator with 15 rakes and other investments, says, “The Railways thinks we are encroaching on their territory. Private players have developed several innovative services such as marble,

tiles, refrigerated food stuffs etc., by aggregation of piecemeal cargo for the rail business, which they were incapable of.” Container operators were even promised of break-even after two years of operations. Mittal adds, “The RC-30 defeats the very purpose of the PPP initiative which was to improve rail share in the domestic market, and enable development of inter-modal infrastructure in the hinterland and provision of multimodal services. We also helped the Railways realize LCL (less than container load) cargo domestic business.” When this correspondent spoke to the Indian Railways, a railway official on condition of anonymity said that the MCA signed by the private operators mentions the Railways’ role as

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Answers for industry.

< news regulator and operator, while giving power to the Railways to hike haulage rates twice a year.

Down with The Hike In response, the Association of Container Train Operators (ACTO), the body representing private operators, after concurring with its members, submitted a letter in mid-November to the Ministry of Railways asking the hike to be withdrawn. The members’ contention is that the private players pay approximately 70 percent of their turnover to the Railways by way of haulage charges, and the hikes are backbreaking. Ramesh Dubey, President, ACTO, says, “The RC-30 and constant policy changes do not bode well for this initiative. Moreover, the Railways on their part have not fulfilled most of the parameters of providing basic infrastructure for the private players so as to help them conduct their business smoothly.” The letter pointed out what it calls the retrogressive nature of the RC-30. For one, the PCTOs move commodities covered in the RC-30 on a door-to-door basis at prices which are competitive visà-vis road. This is also what the Railways wanted when they draft-

ed the PPP proposition in January 2006. It wanted to attract a greater share of container traffic for railways by introducing competition in rail freight services. The private players duly lined up. According to the letter, for PCTOs to compete with road, it is typically necessary to aggregate 20,000 tons of cargo per month from one origin to its destination (2,500 tons per rake X 8 trips). This has to be done on both sides of the route. So, the rail business requires carrying anchor commodities around which aggregation can be done. By banning anchor commodities, the railways are effectively making the domestic PCTOs business unviable. The model concession agreement (MCA) signed between the Railways and PCTOs mentions that private players will be allowed to move container trains on the same lines as Concor, for both international and domestic traffic. Anil Gupta, Managing Director, Concor, replying to an email, mentions that “as part of its domestic traffic, Concor also basically stresses on moving piecemeal traffic aggregated at its terminals. It also moves commodities like

Access Denied *Five commodities in RC-25

nine commodities in RC-30

Cement

Cement (other than white cement)

Stone (other than Marble)

Stone (other than marble & ceramic tiles)

Iron & Steel

Alloys & Metals

Alumina

Petroleum, Oil & Lubricants

*Now revoked Food Grains

Chemical Manures Sugar Oil Cakes

alumina, pig iron, sponge iron, pulses, rice, etc.”

to put all further investments on the back-burner.

Pay More For Less

Infrastructure woes

While some PCTOs move many commodities in rake loads for large manufacturers, they also move in piecemeal either in containers or trucks in areas, where players are not able to generate rake load traffic. The new circular will have an adverse effect and might even see cargo shift to road. This will destroy the already ailing domestic business. Amitabha Chaudhari, MD of India Infrastructure & Logistics, agreeing with the letter submitted by ACTO, says that it is unfair that PCTOs are charged for the full train load based on the highest rated commodity, which is about 3,000 tons pay load per train, when in fact they are carrying less than 1,500 tons. Mittal adds, “Not to forget that we also pay for carrying empty rakes back, and the overheads like service tax, depreciation, return on capital, amortization, administration and more. It would be a difficult proposition to pass on the hike to our customers.” It chafes the private players further to know that the Railways are not offering them a level-playing field. Dubey says, “After the initial euphoria of the PPP announcement had died, about 15 private players signed up, besides Concor. With license fees amounting to `50 crore for each player, there has also been an investment of `2,500 crore for buying rakes and containers, putting up terminals, and some even thinking of setting up an ICD (inland container depot). Another `2,500 crore investment has been marked out.” Private operators opine that the new order will compel them

The idea of bringing into effect the PPP was to fulfill the Indian Railways’ Vision 2020. It sought to grow the container business from 25 million tons (mt) to 210 mt. For this it needed to create rail infrastructure and operations that it thought could only be achieved by roping in the private sector. Mittal says, “It is unbelievable that of the 60,000-odd km of infrastructure, only about 10,000 km has been created postIndependence. The PCTOs put together have about 110 rakes, while Concor took 17 years to run 200 rakes.” Another small PCTO, on condition of anonymity, worried whether the new diktat would entail parking his rakes, says the Railways have also tightened market access. “Locomotives are not provided on time and to top it we are refused claims. There is no clarity on the use of railway terminals and private rail sidings for domestic rail traffic. There are little facilities for the maintenance of container freight cars.” Simultaneously, a few PCTOs are seeking permission to develop ICDs, and they are at remote locations. But the RC-30 has left a bitter taste and most private operators have announced their decision to put further investments on hold. Dubey says, “Permissions take 2-3 years to come. Some PCTOs have invested in land and are awaiting permission to construct an ICD. We fear that the permissions might not be given.” Last heard, private players are hoping to capture Concor customers by offering discounts to its customers.

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< news Company news

From Coffee To Logistics: CCD Buys Stake In Sical Bengaluru

here’s a new entrant in the logistics space. Coffee baron VG Siddhartha of Cafe Coffee Day has entered the logistics space. The real estate venture of Siddhartha, Tanglin Retail Realty Development, has picked up a stake in MAC Group promoted Sical Logistics, and is expected to buy more. Effectively, CCD through Tanglin Retail will soon control 40 percent stake in Sical. The deal will lower Sical’s promoter Ashwin Muthiah’s stake to about 15 percent from the current holding of 42.66 percent. The acquisition of Sical will give Siddhartha access to logistics services such as stevedoring, port terminals, customs house agency, shipping agency,

trucking, railroad and warehousing facilities that Sical built over the past decade as trade boomed in the world’s second fastest growing major economy. Sical handles around 26 million ton of bulk cargo and 500,000 standard cargo containers a year. Sical’s delivery network includes an exclusive walk-in berth at Chennai port for ships carrying bulk cargo; a container terminal at Tuticorin port; 225,000 sq. ft of storage across 17 warehouses; owned and regularly contracted fleet of more than 1,000 transport vehicles and container freight stations at three locations across India. Apart from being an attractive investment opportunity,

Sical will now cater to the in-house supply chain requirements of the coffee baron’s other properties such as in hotels and furniture.

Sical will also cater to the inhouse supply chain requirements of the diversified group with interests ranging across production and export of coffee, hotel properties and furniture. It currently relies on multiple service providers for

its supply chain requirements. Sical demerged its non-logistics businesses into a separate company in 2007 in a bid to focus exclusively on end-toend multimodal integrated solutions for the logistics of bulk and containerized cargo.

Aegis, APM Terminals Pipavav To Build Petro Storage Complex Mumbai

egis Logistics Limited, a leader in oil, gas and chemical logistics has signed a major deal with APM Terminals Pipavav to build a global oil and petrochemical storage complex at Pipavav port. This was announced at a joint press conference held at the Trident in Mumbai on November 23, 2010. As part of the deal, APM Terminals Pipavav will make available to Aegis a sub-lease of close to 100 acres of land. Aegis will invest approximately `400 crore ($90mn) in building a 600,000 KL oil terminal complex at Pipavav port.

“For the first time, India is becoming a part of the Asian supply network for oil and this port will be strategic infrastructure for contango and arbitrage trading strategies,” said Anish Chandaria, CEO and Managing Director of Aegis. With existing locations in Mumbai and Kochi, this brings them a step closer to achieving their stated aim of creating a ‘necklace’ of similar port terminals around India’s coastline. Chandaria added that they will also eventually expand their capacity in Kochi and Haldia ports. Prakash Tulsiani, Manag-

L-R: Prakash Tulsiani, Managing Director, APM Terminals Pipavav and S. O. Malhotra, President, Aegis Logistics.

ing Director, APM Terminals Pipavav said, “With liquid cargo storage facilities being developed by Aegis, we will be

able to offer our customers a comprehensive portfolio of facilities for a very large variety of cargo”.

FeDexCoFFee wAs THe Is FIRsT THe seConD To equIP MosT DeLIveRy TRADeD vAns CoMMoDITy wITH TeCHnoLogy In THe woRLD To TRACk AFTeRPACkAges oIL 12

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December 2010 | www.logisticsweek.com

aIR CaRGo

Air-freight Grows 14 pc Year-on-Year In Oct: IATA Geneva

nternational air cargo traffic picked up in October after falling since May to stand 14 percent higher than a year earlier, the airline industry body International Air Transport Association (IATA) said in its monthly analysis of air traffic. October’s year-on-year increase in air-freight, an important indicator of trade and economic recovery, was below September’s 15 percent rise but the monthly rise followed a 5 percent fall since May. But a single month does not make a trend. And it remains to be seen if this is the stabilisation in freight volumes or the start of an upward trend, according to the release. Freight traffic, which accounts for 35 percent of the value of goods traded internationally, is now one percent above pre-crisis levels of early 2008. IATA said airlines were reacting to this year’s rebound in demand with cautious increases in capacity. In the first 10 months of this year an 8.5 percent increase in passenger demand was matched by a 4 percent increase in capacity, while a 24 percent increase in freight demand led to only a 9.2 percent rise in cargo capacity.

Safexpress Is Master Brand Mumbai

afexpress has been bestowed with the ‘Master Brand 2010’ title at the Master Brand Awards. Vineet Kanaujia, GM-Marketing, Safexpress accepted the award for the company. This was the inaugural edition of Master Brand Awards in India, introduced this year by the CMO Council, USA. The awards were conferred to 50 topmost brands in the country. In the last few years, Brand Safexpress has been honored several times by various industry bodies. Recently the brand was chosen as the ‘Most Promising Brand of the Year 2010’ in a consumer research conducted by ICMR, India’s foremost research body. This research involved a thorough study of around 40,000 international, national and Vineet Kanaujia receiving the regional brands across Master Brand trophy at Master Brand Awards in Mumbai the country.

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< news InTeRvIew

“We Prefer To Remain Asia Pacific Centered” Sparta Logistics was formed in 2008 by merging various companies operating under its numerous partners. Through a small team, the company has established itself in freight forwarding, and is now venturing into newer businesses. Fred Khoo, Director at Sparta Logistics, based out at the company’s Indonesia branch, offers Jayashree Mendes an insight into the company’s plans.

parta was formed by merging a few selected companies and rebranded to form Sparta Logistics. Could you tell us about the genesis of the company? The company has its beginnings in freight management in Indonesia since 1989. It was then known as PT Freight Management Indonusa. There were a chain of companies managed by the shareholders in various countries. In 2008, the name was changed to Sparta Logistics with the purpose of bringing the subsidiaries together under one identity. Sparta now has offices in Singapore, Indonesia and in other Asia Pacific regions. Sparta as a newcomer in the logistics industry has maintained a low profile. Could you elaborate on the company’s plans and roadmap for the future? We plan to set up offices in Medan (Indonesia), Malaysia, Thailand and Vietnam. In the future, we also plan to start a twoway air-freight from China, Thailand, and the USA. We have sea-freight services from Bangladesh and Pakistan to Iran, Dubai, Kenya and Tanzania. We have recently begun services to Europe and Turkey. Sparta is keen on project cargo business to China and India. Besides this, we

are looking at warehousing and contract logistics business for imported goods in Indonesia. What’s the core of Sparta’s business in Indonesia and Philippines and how long have you been operating here? We are essentially a freight forwarding company. It was only when some of the partners left us for other businesses that we brought all the groups under one head. Why has Sparta decided to remain Asiacentric? There are few freight forwarding companies in Singapore. Most of them have moved out of this business to bigger things. We prefer to remain Asia Pacific centered because most of our clients are based out of Germany or the USA. Most project logistics tasks are handled out of Singapore as it is in the heart of project activities in petrochemicals in India, China and the Middle East. How competitive is Sparta in this arena? At the moment, we are at crossroads, and not competing with the big companies. We have our niche. However, in the future, we

want to focus on project logistics through initiating tie-ups with other companies. Could you divulge the names of your customers? Do you have any Indian customers? Some of our big customers are Marubeni; Exxon Mobil; PT PLN Batam, a subsidiary of PT.PLN (Persero), Indonesia’s national electric company; another local large oil company and a textile company, besides others. Most of our customers seek us out because we undertake local delivery for them. Singapore has some heavy-weight logistics companies operating for 15 years and more. What is Sparta’s USP in this industry to create its niche? As freight-forwarders, we need to create a niche for ourselves by fulfilling customer requirements. There have been a few ups and downs and I won’t say that our progress has been fast. We will take a few years to realize our ambitions. What technology solutions do you use to manage your supply chain? We use basic computerized cargo tracking, a product from Sysfreight of Malaysia.

aUTomoTIVe

Festive Month Reflected in Auto Sales in Oct: SIAM New Delhi

espite the price rise in raw materials and availability of parts, a cumulative data for April-October 2010 shows that production has seen a growth of 33 percent over the same period last year. The overall commercial vehicles segment registered growth

of nearly 38 percent during AprilOctober 2010 as compared to the same period last year. Medium & heavy commercial vehicles (M&HCVs) registered growth of 53 percent, and light commercial vehicles at 26 percent. Three Wheelers sales recorded a growth rate of nearly 21

percent, and passenger carriers by 24 percent. During April-October 2010, overall automobile exports registered a growth rate of nearly 42 percent. Passenger Vehicles segment grew marginally by nearly 2 percent.

InDIA Is THe FouRTH LARgesT AuToMobILes exPoRTeR In THe woRLD 16

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December 2010 | www.logisticsweek.com

91 11 26783281

91 11 26781481 82

110 037

< news CuRTAIn RAIseR

“Users Vouch For the 3PL Model” CII Institute of Logistics is organizing Logistics Summit 2010 on December 13 and 14, 2010, at New Delhi with Log.India as the media partner. In an exclusive interview, TCI’s executive director, Vineet agarwal, replies to some crucial questions facing the logistics industry today.

ransportation companies are left with little margins after paying off costs. Why is little attention paid to fleet maintenance? The margins of fleet-owning companies are thin, primarily due to low utilization, which is a result of two main factors: Journey delays caused by waiting time en route check posts and due to highway congestion; and the time taken for actual loading. An average truck is utilized less than 7,000 km a month, which is less than 50 percent of its efficiency. While better preventive maintenance can streamline issues of service reliability, it is not a major factor in cost. Moreover, the AMC initiatives by OEM’s are half-hearted and lack the vision of the truck-sale as a complete business proposition Road transportation moves 60 pc of freight. Despite this, it is highly unorganized in terms of on-time delivery, costs, etc. How do the companies plan to coordinate this? Though road freight has grown despite these odds, we need to look at the entire eco-system for betterment of this vital logistics link. The toll taxes at check-posts, harassment by RTO’s, lack of infrastructure for drivers such as safe parking are the impediments for road transport to be efficient. Forums and engaging in an industry-government dialogue is the way forward. The 3PL market has only a few competent companies. There’s also a perception that 3PLs are more expensive. How can 3PLs work on this? The 3rd party logistics players operate at a higher level where besides the execution, they are involved in planning and coordination between various stakeholders

INDIA |

VineeT AgARwAL, Executive Director, Transport Corporation of India Ltd in the supply chain. They deliver value in giving a service which is beyond the basic transport or C&F services. The information flow is of a far higher level and taskspecific, enabling demand fulfillment. In most countries, while the transport organizations have graduated to this level, the transport needs have graduated to logistics needs by consolidation or outsourcing. Hence, the differentiation between transport and logistics is a little slow in being understood. We have case studies where users swear by this model as it gives the business an edge beyond what was plain vanilla services. Cold chain industry has not taken off in India. Transport companies are disinclined to move into this sector. Could you expound on this? Cold chain is utilized in dairy, meat and pharma. The gap is in delivery of fruits and vegetables. We have a challenge in terms of the cost of the asset – for example the units are still imported and at

December 2010 | www.logisticsweek.com

60-70 percent of the cost of the chassis. The reefer box is another 40-50 percent. Thus the asset cost is doubled. Secondly, the utilization is low due to almost nonexistent cold chain hubs. This is further compounded by dry (ambient temperature) loads in return. Also, temperature controlled transportation is a subset of the overall farm to fork chain which is nonexistent. You can’t have a reefer vehicle and then an ambient temperature mandi. The government needs to take decisive steps for the infrastructure and offer incentives for kick-starting this sector. India has a high truck turnaround time, which implies higher freight costs. There is laxity among its employees and lack of technology use. How do you plan to tackle this? TCI operates on a multi-modal platform and trucking is an integral part of it. The ailments of the industry are part of the overall eco-system and not confined to operators only. They are the ones who actually bear the brunt of the apathy of the system and don’t get recognized for their efforts. At TCI, the reason we have been able to sustain for 50 years and keep growing is that we have always been challenging the odds and ensuring that our customers get the visibility and reliability that they would in any other part of the world. This is by a mix of initiatives. At the high-end are GPS-enabled vehicles for vendors with cell phones, while the spot-hired trucks are tracked twice a day by a phone call till delivery. Our network of 1,400 offices ensure that abnormalities don’t happen. A truant truck driver or break-downs are resolved fast as the TCI person does not need to travel more than 100 kms to reach any part of the Indian landscape.

< EVENT REPORT

Date : November 24, 2010 Event: The 2nd Crane Technology Day Organizer: Crane Technology Forum Venue: Trident Hotel, Kochi

Saibal Roy, Head (Product Management & Applications), Siemens, and the man behind the event.

Fast-Track Testing

For the second consecutive year, Crane Technology Day was held across three locations in India. The event saw vendors showcase technologies that could change the way cranes work, reports Frewin Francis.

Arno Weil, VP (Sales), Pintsch-Bubenzer, spoke of low inertia solutions for minimizing energy consumption.

INDIA |

he â&#x20AC;&#x153;Crane Technology Dayâ&#x20AC;? held at Trident Hotel in Kochi was held with an aim to update crane users, manufacturers and consultants with the latest technology developments in this arena. The event saw presentations by technological leaders in components, systems and solutions for port and industrial cranes. Siemens took the initiative in 2009 to form this forum, along with six reputed global companies manufacturing crane equipment. The companies are Pintsch Bubenzer (brakes), Prysmian (crane cables), IGUS (energy chain system), Siemens-Flender (gear box), Brieda (cabins) and Symeo

December 2010 | www.logisticsweek.com

(positioning system). It was then decided to hold three sessions across three locations in a single week, every year. The 1st Crane Technology Day was held at Mumbai, Gandhidham and Chennai. The 2nd Crane Technology Day was held in the last week of November at Ahmedabad, Kochi and Kolkata. BROSSA with their overload protection system was a new entrant this year. Eight speakers covered a range of subjects and kept the audience engaged from 9am till 6pm. The event was initiated to bring together the fraternity engaged in cranes to offer an insight into the crane technologies worldwide, while

helping the Indian industry to cope with challenges.

What They Had To Say The first half of this decade has witnessed a substantial increase in global container handling coupled with a strong focus on productivity, reliability, safety and an optimized life-cycle cost. The global recession resulted in additional focus on increasing productivity within existing resources available with terminal operators. Arno Weil, Vice-President (Sales) of Pintsch-Bubenzer spoke of a crane brake technology with special focus on low inertia solutions that improves crane safety and minimizes energy consumption for cranes. Their SOS system created together with Malmedie improves snag load protection in cranes. Peter Puetz, International Project Manager, IGUS, offered an overview on IGUS‘s energy chain and cable solutions showing a range of practical applications and field experience. He demonstrated the robustness and versatility of

Peter Puetz, Intl. Project Manager, IGUS demonstrates the robustness of the plastic used in chain-flex system.

the plastic compound used in the chain-flex system. Pooja Ghandi, Director, Prysmian, introduced medium voltage and low voltage trailing cables with a special focus on the Protolon IQ medium voltage training cable which allows detailed cable diagnosis. She also depicted how damaged cables can be repaired effectively without loss of functionality. Radio sensors is a specialty of Symeo and Dirk Brunnengraeber spoke about the range of radarbased positioning sensor applications running from container terminals to steel mill and bulk stockyards. The highlight was Symeo's solution of combining position information from radar triangulation with satellite-based DGPS signals that improves position signal reliability. The post-lunch session was kicked off by Gerhard Fischer from Siemens AG. He compared different grip-powered rubber-tired gantry crane systems and introduced SIMOCRANE standard software blocks for grab ship un-loaders. Siro Brieda, owner of Brieda cabins presented its electro-medical research on creating ergonomics for a crane driver by a radical change in the crane drive console design. Brieda’s cabins have undergone extensive research to improve crane operators’ posture and operating positions. Flender gave an overview of different crane gear reducer products. His special coverage was trainings made available at the "Flender academy". Brian Swan, representing Brosa, introduced its load cell solutions offering insight in different designs of load cells and their evaluation units. He also mentioned the relevance of ISO13849 as a machine safety standard guiding crane builders and equipment suppliers. The sessions were highly en-

Siro Brieda, Owner of Brieda Cabins has a new technology to make drivers comfortable.

Gerard Fischer, Head (Business DevelopmentAsiaPac), Motion Control Systems, Siemens.

Pooja Ghandi, Director, Prysmian, speaking on the Protolon IQ medium voltage training cable.

gaging with participants questioning functionality and features of the crane solutions introduced. They also discussed issues faced and the possibility of upcoming solutions pertaining to their specif ic operations. INDIA |

December 2010 | www.logisticsweek.com

< Column

From Logistics To Supply Chain Padmini Pagadala General Manager, TPG Consulting, Mumbai

INDIA |

The idea of logistics has expanded over the years to become the interesting, all-encompassing entity - supply chain - that it is today. Padmini Pagadala explores the two terms.

What’s in a name one may ask? We may shrug off the discussion, but not so the experts in our industry. Recently, i was at a cocktail party with some international veterans from our industry, and they started talking about what the right word was to refer to the industry we work in. they discussed the subject with so much vigor and argued back and forth, that i thought it would be valuable to recount their conversation. More than that, it’s important because i think it shows how the field has evolved. What’s interesting for me as a relative newcomer to this field is that we haven’t always been called supply chain professionals. according to these “veterans,” our profession has really changed its name three times over in the last 50 years or so. it wasn’t until the beginning of the new millennium that our recent name change to supply chain professionals took place.

December 2010 | www.logisticsweek.com

Why did the change take place? as we in india follow the supply chain evolution path that the West has mapped, it’s worthy to consider each step and whether or not that step was really necessary or relevant. the biggest mistake we can make is copying for the sake of copying. it strikes me that sometimes even the logistics terms used might not transfer as well as the practices.

The Beginning Most of you would be familiar with the Council of supply Chain Management Professionals (CsCMP). the CsCMP is the world’s pre-eminent organization of supply chain professionals . there are thriving chapters of the organization in Mumbai and Delhi. But, what most readers may not be familiar with is that in the very beginning in 1963, when the founders came together to set it up, that’s not what they called it.

to begin with, art Vanbodegraven, who has been in the industry all his life as a practitioner and consultant, talks about the inception of the industry in the following way: “We began as Traffic Managers and warehousemen (There were no women in those days). Our world was narrowly defined as the processes involved in getting goods from point A to point B (and sometimes point B was a place where goods were stored for relatively long periods of time). The current area of work that is known as supply chain was referred to as ‘physical distribution’ in the 60s. At that time, we banded together as the National Council of Physical Distribution Management (NCPDM).”

Expanding The network

your own firm. But the experts started to bring notice to the fact that around the turn of the 20th century, there were things that needed to be done beyond one’s own manufacturing plants, distribution centers, transportation network and information systems - if costs were to be driven down further. Companies had to reach out to their suppliers and customers and build relationships. What also changed drastically with the turn of the century was that one’s manufacturer was no longer just 200 miles away. he could be millions of miles and oceans away. With the boom in e-commerce, the same could be said about the clientele. also, a whole new set of activities encompassing but not limited to procurement, waste management, forecasting and demand planning were recognized as being part of the field as the tradeoffs between purchase cost, inventory levels, transportation, and warehousing costs started to be talked about. there began a ‘far and beyond’ and the term ‘logistics’ was no longer enough. interestingly, i graduated from the Logistics institute (tLi) at Georgia tech. today, if you walk into tLi, you will find that it has been renamed ‘the supply Chain and the Logistics institute’. My professor from Georgia tech simply mentions that ‘logistics’ is no longer en vogue. the CLM changed its name to CsCMP in 2005. Rick Blasgen, none other than the President of CsCMP, recalls the reason for the name change. “With broader emphasis on the entire supply chain, CsCMP will provide its members with enhanced content that incorporates not only logistics, but also procurement, manufacturing operations, sales and marketing functions.” and so was invented the term, supply chain. to make things clear briefly: Distribution, warehousing, transportation are all a part of logistics, which along with demand forecasting, waste management, supplier relationships and the rest of the gamut is called supply chain. as food for thought, if you are an indian manufacturer serving clients outside india, think about the capabilities you need to develop in order to create a local market. On the other hand, if you are a cottage industry, think about the challenges you need to face in order to be able to reach out to clients across the country. the evolution from physical distribution to logistics to supply chain was the path traced by the practitioners who expanded the scope of their jobs to take on wider and more integrated responsibilities. it is an absolute requirement if you want to reduce end-to-end time delivery, improve service, quality, and minimize costs. think about it.

it has generally been thought that ‘logistics’ meant just the movement of goods as well as information about

The author can be reached at padminimp@theprogressgroup.com.

Shift in Focus Came the 70s and most corporate income statements took a hit as oil suddenly became a limited and expensive resource. this was also the time when Japanese products hit the markets and swamped them– and brought notice to quality. Capital became expensive. toyota had used kanban for more than a decade. Manufacturing stepped up their efficiencies. as Jim apple, the renowned Us materials handling educator and consultant (and one of my partners in the Us) told me, the focus of the field changed from how to fill orders properly and maintain accurate inventories inside warehouses, to transportation planning, facility location and inventory reduction. Fortunately, as Ralph Ehmann from the warehouse design firm ideen Werden Loesungen (iWL) in Germany points out, computers became available to help answer these questions. Physical distribution was no longer the need of the hour and neither was it the right term to describe the various activities it encompassed. the term ‘logistics’ (a description used initially by the military to describe deployment and provisioning of equipment and supplies) began to gain popularity in line with new thought processes on the subject and the fact that, as Ehmann points out, “logistics cares about the material and information flows of a company.” the term caught on as many realized it was a “whole new world”. so big was this realization that in 1985, what was then known as the nCPDM changed its name to the Council of Logistics Management (CLM), in response to the new ideas which were evolving on logistics. amazingly, trucking firms such as ‘todd Distribution’ became ‘todd Logistics’ almost overnight, recalls steve Mulaik of tPG in atlanta. some had no idea why they needed to change their name other than that they had to stay on the bandwagon.

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December 2010 | www.logisticsweek.com 23

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4 ro c an es se d M s ar gin s

December 2010 | www.logisticsweek.com

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Small and mid-sized Indian companies do not display a spirited eagerness to undertake benchmarking exercises. The activity can be undertaken once they are big. But then, like the consultants say, what you won’t measure you cannot manage and improve, learns Jayashree Mendes.

n 2002, then chairman of Infosys marking is on ameliorating a particTechnologies, Narayana Murthy, ular business operation or a process delivering a keynote address had by employing 'best practices,' and pressed Indian companies to go in not on 'best performance.' As a vifor global benchmarking so as to able tool, it works well for improving raise their aspiration levels. In his any business process, and aids in the words: “If one needed to improve search for ideas. quality, one had to be open-minded The primary criterion for a and benchmark oneself with others benchmarking analysis is building who are better. Quality should be Key Performance Indicators (KPIs). ubiquitous and all-pervasive.” KPIs are quantifiable measurements Murthy was pointing out what that have been agreed to beforehand, Indian companies need to do and are long-term considerations. more of to make a mark globally. They could differ organization to orThis could apply to the Indian ganization. The goals of KPIs could logistics and supply chain com- change depending on the maturity panies where organized players of the organization. are constantly beleaguered by the Logistics and supply chain compresence of unorganized players panies can use performance measplaying the f ield openly. ures unique to its own vertical to The telecom logistics is working Regular benchmarking helps industry find out how they stack up against companies improve performance the competition. as a catalyst to aid India in its growth as a by identifying, understanding and global telecom manufacturing hub. Remya adapting best practices and proc- Benchmarking exercise esses adopted within and outside for user Companies Philip reports the company while implementing Most large- and mid-size manufacthe results. The emphasis of bench- turing and retail companies have

supply chain divisions within the company. While the divisions handle the supply chain for the company, it is possible that certain portions could also be outsourced to third-party logistics players. In such cases, it would be a mammoth task for a user company to benchmark across divisions of the supply chain. An easy way would be to confine the exercise to any one or two processes that could be internal, external, industry-wide, or a business process (See Box: Types of

Know thy Benchmarking Benchmarking is a continuous process and one that needs to be conducted regularly n Take into consideration training for suppliers and customers: They could likely be competitors or leave and go elsewhere n Have a strong strategic focus and adequate planning n Creates an attitude for new ideas and exposes employees to it n Raises the organization’s performance potential n

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December 2010 | www.logisticsweek.com 25

< feature Benchmarking). Larger and well-established organizations could incorporate strategic benchmarking, international benchmarking, performance assessment, continuous improvement, growth potential, among others. A company could select critical parameters within the process. Benchmark tools calculate key statistics, including mean, standard deviation, variance and range (minimum and maximum) for financial and non-financial metrics. The first step is to highlight a specific business within the comparative process. The business’s positions are then sorted and compared. Benchmarking is done on a per metric basis to accurately know whether operations are performing as expected or exceeding expectations or performing poorly. Some companies prefer to create a flexible framework that can help in comparative analysis. FMCG company Godrej Consumer Products Ltd (GCPL) takes up process benchmarking regularly as this works well for them. According to Dr Rakesh Kumar Sinha, COO

(Marketing & Operations), GCPL, “For our process benchmarking, especially of the supply chain, we constantly benchmark three things — freshness of our products, the product features, and the end consumer tastes. Freshness of products on a retail shelf is benchmarked with that of another vendor.” For consumer goods companies, quality and profitability are the two main benchmarks, under which it would incorporate most of the parameters (See Table: Benchmarking Parameters: Consumer Goods). A large FMCG like Hindustan Unilever Limited (HUL), which has an extensive range of consumer goods products and calls for a massive and intricate supply chain, uses several modes of supply chain to ensure prompt distribution especially to remote areas. The internal supply chain division of the company caters to the metros, while third-party logistics players play a crucial role in helping service rural and semi-rural areas. Here benchmarking parameters would have to carefully chosen as it would have to find a balance between the

We constantly benchmark three things — freshness of our products, the product features, and the end consumer tastes.” — Dr Rakesh Kumar Sinha, COO (Marketing & Operations), Godrej Consumer Products Limited

types of Benchmarking Internal benchmarking: Here a company can compare methods adopted by one supply chain process across its numerous facilities and compare the ways in which the process is performed in those facilities. For example, a company can benchmark the processes around inbound logistics, profitability, warehousing, etc. external Benchmarking: is usually done after an internal benchmarking. An external benchmarking brings to the fore the inabilities and inefficiencies within the organization. Here a company after having spent out ideas on improving its processes could use assistance from another company using similar processes and benchmark the

INDIA |

processes that occur there to compare it with its own. It could also hire the services of a consultant who can help identify the strengths and weaknesses of their processes based on those of their competitors. Other benchmarks that can be conducted within the two main types are: financial benchmarking: Companies can undertake a fiscal analysis of its operations. For instance, it can find out how much it spends on transportation every month. Performance benchmarking: will help an organization compare the efficiency of performing a task with another location or with a competitor. It focuses on elements of price, quality, features of

December 2010 | www.logisticsweek.com

a product or service, reliability, speed among other things. Product benchmarking: compares the product of one company against another, or between different manufacturing units of the same company. Strategic benchmarking: In this method, the data will look at how other companies compete. It hovers around seeking to identify the winning methods that have pushed high-performing companies to be successful. Process benchmarking: This mainly focuses on selected processes in the business. It consists of a technique of identifying a current work process and then comparing it with the best standard in the industry of an immediate competitor.

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< feature

Benchmarks for retail companies would essentially revolve around measuring Cash, Sales, Margins, Customers, and Manpower.” — Pradeep Chechani, Vice-President (Supply Chain), and Business Head (West & East Region), Wadhawan Retail (P) Ltd

outsourced third-party logistics players and the supply chain from within the company. Retail companies, on the other hand, have to deal with heavy investments as the spread of their offerings matter more, not to mention number of shops and location strength. Benchmarking for

this sector would find meaning in understanding administrative operations, innovative approaches, replenishment deftness, manpower efficiency (common to other supply chain verticals also), and logistics. Pradeep Chechani, Vice-President (Supply Chain), and Business Head (West & East Region), Wadhawan Retail (P) Ltd, says, “Benchmarks for retail companies would essentially revolve around measuring Cash, Sales, Margins, Customers, and Manpower. Within these, there are several parameters and KPIs that must be taken care of.” Chechani adds, “Supply chains need to be essentially benchmarked on four key areas of focus. Then innumerable performance measures can be used to evaluate these. The key areas are Cost, Storage, Transportation, and Order Management.” If a retail chain is benchmarking Cost, it would comprise two aspects —Assets and Inventory. Assets would further incorporate KPIs such as return on asset, net profit margin, and asset turnover. Each of these KPIs has extensive calculations that are unique to every retailer. Inventory would mean measuring number of vendors, warehouse facilities, number of stores, and sales (See Table: Benchmarking Parameters: Retail).

Benchmark for Logistics Companies All supply chain and logistics com-

Benchmarking Methodology Select process and understand shortcomings and opportunities n A ssess current process capabilities and set goals n U nderstand detailed processes that need improvement n D raft out the industry or function that perform those processes n L ist out the companies against which to benchmark n R esearch the organization and undern

INDIA |

stand their processes in touch with the competitors organization and send preliminary questions n C halk out a detailed questionnaire to obtain the desired information n R eview team visits to that organization and compose report n M atch the information with list of best practices n S tructure action items, and move into improve phase n G et

December 2010 | www.logisticsweek.com

panies share common technology and market characteristics. Most of them offer similar services, barring a deviation in one or two. Hence, companies conducting a benchmarking exercise here share similar competitive advantages, and one if shared, can help both the companies benefit and improve. DHL Supply Chain has its inhouse developed Global Metric Scorecard for internal use. DHL benchmarks the industry verticals it caters to such as technology, fashion, retail, FMCG, and energy. Its other benchmarking options include comparing customer performance on the Scorecard within the verticals. For instance, for the company it is critical that they know the comparison and contrasts between all its technology or retail customers. Vikas Anand, Director (Operations), DHL Supply Chain, says, “Benchmarking is done at least once every year wherein DHL (in India) agrees to raise the bar on various aspects of its Scorecard. In addition, benchmarking is an ongoing exercise based on performance improvement activities (PI) which are part of KPIs of most site managers. Additionally, some customer contracts have been built into KPI’s where the bar is raised year-on-year for benchmarking.” The DHL Supply Chain Global Metrics Scorecard captures all operations that can be benchmarked. The parameters are like direct and indirect productivity, damages, inventory accuracies, turnaround time, lost time injury (LTI)/medically treated injury (MTI), etc. In addition, it also continues to benchmark its solution design processes, timelines, etc. Transportation and logistics company, Aramex India, prefers a pure internal benchmarking. The parameters used by the transportation company for benchmarking are Customer Service, Cost-to-Serve,

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< feature Warehouse Benchmarking

transportation Benchmarking Parameters

Operational Parameters

Line of Business

IT & ERP

Warehousing/Logistics Managerial level

Level

KPI / Benchmark On Time In Full

Application integration - WMS,TMS,Webportal

Gross Profit/Margin

Order to pick time

Manpower / Unit (or KG)

Order to delivery time

Warehouse Space Occupancy

Dock to stock time

MHE Utilization

Quantity handled per manpower Operational level

No. of SKU’s handled

Dock-to-Stock Time

Container clearance time

Receiving Time

administrative Parameters

Order Cycle Time

Total warehouse space to storage area ratio

Courtesy: Aramex

Total warehouse area Automation Sectors catered Infrastrucuture Service Parameters On time deliveries Proactive alerts on delays On time pick ups (reverse) Lost and damages Order accuracy Inventory security and accuracy CSS scores SSS scores Per square foot rate /per pallet

Benchmarking is done at least once every year wherein DHL (in India) agrees to raise the bar on various aspects of its Scorecard.”

Billing errors Services offered Value added provided No. of fleets handled No. of cities covered

— Vikas Anand, Director (Operations), DHL Supply Chain

No. of containers handled All India transit time

Profitability, and Resource Utilization. For competitive benchmarking, it prefers to refer to benchmarking exercises conducted by other companies. Transportation parameters for the supply chain would take into account whether the service provider has a nation-wide presence, the fleet size, the quality of vehicles, return load, international affiliations, and number of days taken to transport. According to Percy Avari,

INDIA |

Country Manager (India), Aramex India, “Benchmarking helps in not only maintaining superior customer service but also profitability and gaining new business. We have internally developed a SaaS-based WMS that helps us in capturing required input data and reporting the performances of the identified KPIs.”

December 2010 | www.logisticsweek.com

Analyzing the parameters for transport service providers, Shah of Frost & Sullivan, says, “Parameters for the transportation industry can range across various metrics. Parameters would include SLAs (service level agreements), Efficiency, Effectiveness, Cost Factor and Attitude. However, it would help to benchmark service providers on Transportation and Warehousing, as these two factors are of prime importance to vendors.” Often, vendors evaluating the diagnostics of a supply chain service provider are interested in reviewing a few processes. The idea is to check the comprehensive assessment of the service provider’s business and the processes he has in place as compared to other service providers in the same range. A contention that vendor’s feel is that there is a certain lack of supply chain visibility and an inadequate compilation of technology and staff. Sinha of GCPL says, “It so often happens that in competitive benchmarking, there are few companies we can compare ourselves with. When we sought to benchmark replenishment, and FMCG works on replenishment, there were no standards set, nor was there a competitor on equal footing we found. We had to set

our own benchmarks. And what we could get was benchmarked from consultants and from other parts of the world.”

retail Benchmarking Parameters

Why benchmark?

Inventory

For most Indian companies, benchmarking is a one-off undertaking. Subir Shah, Senior Consultant, Transportation & Logistics (India & Middle East), Frost & Sullivan, says, “Supply chain companies should take this up as a project every one or two years. It can help them compare the efficiency of performing a task between two or more locations within the company, or even with a competitor.” An industry expert on supply chain benchmarking, seeking to remain anonymous, advices that supply chain companies would do well to frequently ask themselves a few questions as it would help them know their competitive level and realize shortcomings. The questions he lists out are: How does your end-to-end supply chain perform against competitors? How do the key components of your supply chain measure against competitors? What are the KPIs you use to push improved performance? Are the targets set for the KPIs realistic? Does the management team often brainstorm with executives of competitors to understand any visible improvements in their business? He adds, “Supply chain heads ought to know answers to the above questions. It would help them keep up with real business improvement opportunities.” He firmly believes that benchmarking should be a suo moto exercise across all supply chain companies. Companies should also pitch for clients based on the metrics developed. Benchmarking is a humongous and painstaking effort. It not only involves extensive data collection that is company-specific, but covers

Parameters

return on Investment

Order Placed

*Slow Moving / Fast Moving = Inventory turn x gross margins

Vendor

*Damages

Warehouse

*Expiry of products

Store

*Turnaround time at DC or stocking point

CASH

For transportation companies, when the basic infrastructure is bad, it is difficult to create benchmarks.” — Rakesh Suri, Chief Operating Officer, Hellmann Logistics

Sale

Vendor Fulfillment

Assets

Return on Assets (Net Profit Margin x Asset Turnover)

DC Fulfillment

SALE

Location-wise benchmark **P&L location-wise

MARGINS CUSTOMER

Retention Addition Frequency

COSTS

People Supply chain

an entire experience of analyzing tangible issues such as supplies, raw materials, components; and intangible issues such as information, circumstances, pain-points, personal development, commitment, among other things. Most companies would find this daunting. Companies could exercise the option of limiting benchmarking to a case study of a particular project, or a particular customer relationship, or a specific vertical within the company, thus resisting an industrywide exercise. Rakesh Suri, Chief Operating Officer at Hellmann Logistics says, “Few Indian companies have true supply chain experience. Consider the benchmarking of a road transportation company. The immature transportation system in the hinterland is subject to the vagaries of time. As a large part of our supply chain is largely ground transportation, companies are not always

CG Benchmarking Parameters Quality

Profitability

Cycle Time

Cashflow

Training

Capital expenditure

Referral rates

Liabilities

Defect rates

Debt

Customer satisfaction

Costs

Employee Retention

Assets

Customer retention

Sales

Product maintenance

successful in meeting deadlines. In such cases, across-the-board benchmarking is not viable.” Companies, as a rule, would rather stress on ensuring commercial success, than calculating industry standards. Anand of DHL Supply Chain, says, “Benchmarking is often considered as an added cost and hence conveniently avoided. For most companies, it is a bonus and not a must have.” INDIA |

December 2010 | www.logisticsweek.com

THE WAREHOUSE HANDBOOK- II : Managing Change LOG.INDIA and DIESL presents you a updated handbook on the Warehousing Industry which would cover the entire spectrum of Indian market Are we ready to embrace various tectonic shifts that are happening in the warehousing sector -in policy (GST), in client expectations, in infrastructure, in technology, in scale of operations, in risk management, security issues, in automation, etc. So the tentative topics covered in the handbook will be as under

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is nt vironme The siness en positivity, In a bu ltowards be a we edging ll ng wi wi slo book ics and use Hand the logist Wareho with e tool for , nc so Al ere . come ref industry GST ly-chain -awaited the supp e much ve ge of th will mo the passa rehouses tomated 2010, wa au ril hly Ap hig in impact ps up to ll wi ste l severa res which ok tion Cent e Handbo Distribu line. Th the ’s bottom- perspective on industry new eams give a try to str us will thu ind le and enab esses. subject and proc the book erations ters of line its op us chap specialThe vario by noted en itt le puren wr th the so wi have be m try e indus sness fro th lou in bu s ist . oving ne business rem ics of ist pose mut of the log ga ts e ec tir en major asp , vers the book co e industry te of th The hand a sta of nt e prese processes from th sign and tion, de ec sel e ) sit back flap

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Parameters for Benchmarking LSPs Performance n Accuracy and Reliability n Manage billing and invoicing n Develop and promote continuous improvement initiatives n Warehouse and distribution centers n Packaging & Delivery n Complaint management n Value addition n Consignment tracking n Size and quality of fleet

n Process improvement

capabilities expectations n Vision and strategy n Order ease n Inventory management and forecasting n Manage accounts n Manage contracts and service level agreements (SLAs) n Manage vendors n Manage risk

Analyzing the disinclination of companies to undertake benchmarking, Avari of Aramex India says, “Companies are caught in their own whirlpool of daily operational f ire f ighting. So an important task like benchmarking could get missed out. Benchmarking throws light on managerial and operational performance, while calling for dedication and consistency. Given these challenges and the investment required, benchmarking can slip into low priority.” Suri of Hellmann says, “Companies can ascertain the quality of in-house as well as outsourced tasks. But for transportation companies, when the basic infrastructure is bad, it is difficult to create benchmarks. Organizations need to have a target and a goal. Set processes within to meet those goals. It is very important that processes are put in strongly to meet those goals.” Though most might not admit it, it’s well known that there’s a general tendency among companies to not disclose their benchmarking metrics to anyone — sometimes not even to their clients. Before conducting a benchmarking exercise, organizations must adhere to a few rules of compliances within and outside the company. For one, in order for the process to move smoothly, organizations need to effectively communicate the benchmarking protocol to employees involved in the process. This will ensure that employees also offer a realistic picture of the company to the management, so that confidentiality is maintained. The respective company must establish that it requests for information from another company provided it is willing to share similar information with that company. There are certain sets of legal and ethical guidelines that would involve stepping in of legal counsel to peek through any issues there might be. All in all, benchmarking not only helps maintain superior customer service but also profitability and gains new business. Murthy was right.

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< Cover Story

Delivering the Goods Godrej Consumer Products supply-chain has adopted replenishment philosophy like ﬁrst nature – a story that has many takeaways for Indian consumer goods companies. And the man in the thick of the action is rakesh Sinha, Chief operating ofﬁcer (Marketing & operations), GCPL. Aanand Pandey reports.

f you are an FMCG supply-chain buff, then Godrej Consumer Products (GCPL) is where the action is at the moment. The reason: Godrej group has been on a drive to consolidate its consumer portfolio, moving in the last few years to combine the operational synergies and scale of its consumer brands – in an effort to make the best of the breakneck FMCG growth, and to take on the big boys of the business, here and abroad. On October 14, the GCPL board approved the merger of GCPL and GHPL (Godrej Household Products Limited, erstwhile Godrej Sara Lee). Now, the unified entity, GCPL, will sell GHPL’s GoodKnight and Hit brands, along with its own – Cinthol, Godrej No. 1, Expert, Ezee, Fairglow, Jet, and Snuggy and others. The merger has been made formal now, but operationally, GCPL and GHPL have been sharing resources – marketing and supply-chain, for quite some time. To add to the action, GCPL has been on a global shopping spree during the last few years, adding multinational legacy to its supply-chain knowhow. Beginning with the UK’s Keyline Brands in 2005, GCPL has acquired several consumer brands – in Asia (Megasari), Africa (Rapidol, Kinky and Tura) and Latin America (Issue and Argencos). Clearly, GCPL, and notably its supply-chain function, has had a busy outing and the man in the thick of the action is Rakesh Sinha, Chief Operating Officer (Marketing and Operations), GCPL. With his prolific resume boasting of a gallery of mission-critical operational roles and coveted qualifications, Sinha could just be the right man to steer Photo: Ramlath Kavil GCPL’s supply-chain – at a time when Godrej is

INDIA |

December 2010 | www.logisticsweek.com

DR RAKESH KUMAR SINHA Chief Operating Officer (Marketing & Operations) Godrej Consumer Products Ltd.

Photos: Vikram Barwal

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December 2010 | www.logisticsweek.com 35

< Cover Story poised for a major phase-shift in the FMCG world.

the Man Who’d Move things Sinha and GCPL go a long way back. An alumnus of Institute of Technology, Banaras Hindu University (BHU), Sinha did his post-graduation in Industrial Management from NITIE, Mumbai, at a time when management was not yet a fad. He joined Go-

A keen observer of people and processes - it's only natural that strategic planning is close to rakesh Sinha's heart. drej Soaps as a management trainee in 1980, straight from NITIE through campus placement. This year, he completed thirty years at Godrej. When asked about his long innings with one company, a feat rare in the corporate world, he reels off a host of reasons, “Their (Godrej’s) values match with mine – straight dealing, honesty, freedom to work,

GCPL Supply Chain: Highlights Net Sales (FY2010) Marketed Products

: `2041 crore : Cinthol, Godrej No. 1, Expert, Ezee, Fairglow, Jet, Snuggy, Protekt and others. GoodKnight and HIT (GHPL) : 1,200

Number of Direct Distributors No. of SKUs : (GCPL & GHPL) Inventory Turn Ratio : (GCPL & GHPL) Number of road : transporters engaged Technology Providers : Consultants

INDIA |

400 10 20

SAP, MFG/PRO, BOTREE, IBM, HP, WIPRO : Accenture, Eliyahu M Goldratt (of Theory of Constraints fame)

freedom to experiment. One can do a lot of innovative things. It’s a professional company which also gives emphasis to entrepreneurship.” Enterprising people influence a company’s processes in positive ways, he believes: “Entrepreneurs take risks, if the risks pay off, great, otherwise there's always some learning in the process.” A keen observer of people and processes – it’s only natural that strategic planning is close to Sinha’s heart. During the initial years with Godrej, Sinha added ICWA (The Institute of Cost and Works Accountants of India) and CFA (Chartered Financial Analysts) programs to his armory to round up his strategy acumen, “Having a background in operations and finance is good for strategic planning,” he fills us in. He got his big break in strategy in 1988 when he was asked to shape formal strategic planning for the Godrej Group. The following years would be the time when the Godrej management would strengthen its FMCG arm. From 1993 to 1996, Godrej Industries (then Godrej Soaps) had a joint venture with Proctor & Gamble – Godrej manufactured the soaps and P&G marketed them. That was the time Sinha took on the additional role of handling Godrej’s side of the supply-chain. While at it, true to his style, Sinha obtained a Doctorate in supply-chain management from IIT Bombay in 1996. Apparently he was the first in India to do a doctorate in the discipline. However, there was one critical supply-chain function left that he had to sink his teeth into – Information Technology (IT). His chance came in mid-1990 when he was asked to lead IT function for Godrej Soaps and associate companies (now collectively called Godrej Industries). That was also the time when the company’s Enterprise Resource Planning (ERP) system came into being. Fortuitously, Sinha led the project. The

December 2010 | www.logisticsweek.com

company chose MFG/PRO for its ERP. “One reason for choosing MFG/ PRO was its decentralized structure,” Sinha recounts. Decentralized, to beat Internet connectivity issues so that each factory, each branch and each CFA could operate the ERP on its own. However, implementing such a system, would be a road beset with challenges. For one, it required a mindset change. Also, such a project always runs the risk of seeing a lot of cost and time overruns. This is when Sinha turned to Godrej’s feted entrepreneurial way. Normally, companies use a good number of consultants’ billable hours for ERP implementation. Sinha used the consultants – Accenture India – only for the first site which was the manufacturing plant in Vikhroli, Mumbai, and entrusted implementation at other sites to his own people. The approach not only saved money, but the project was completed, says Sinha, in record time. “We did it in a big bang approach, across 128 sites of the group in a matter of about two years – we went live on all the applications simultaneously, right from materials to finance to sales,” he recalls. The next logical progression was to connect with major distributors, suppliers, and retailers on a real-time basis to reduce lead times, increase order accuracy, better quality of service and overall, and profit margins. Beginning in 1999 with a pilot project, GCPL in a phased manner linked all its major distributors together through a middleware christened as Sampark. At the distributor’s side of the link, GCPL customized and installed an ERP solution developed by a Chennai-based firm, BOTREE. The idea was to have periodic sales and stock data fed to BOTREE, and the data in turn would be processed by both the CFAs and GCPL to decide the order level for the ensuing period.

< Cover Story Subsequently, the company used the same architecture to connect to suppliers and called it Sahayog. Through it, suppliers can see on GCPL’s ERP site information such as purchase orders, whether GCPL has received their trucks, and whether the supplies have passed the quality checks. GCPL uses information gathered on Sahayog to decide the quantity to be produced at its manufacturing plants. Similarly, Sampoorna, a more recent project, is meant to help GCPL gather data from retailers. The company ERP was MFG/ PRO as recently as 2007, when GCPL switched to SAP.

Constraints, Mother of Innovation Unbeknown to many in the industry, GCPL is the only FMCG concern in India to implement a replenishment model based on Eliyahu M Goldratt’s Theory of Constraints (TOC). “Five years ago, we switched to a complete replenishment model. That’s when we partnered with Dr Goldratt,” Sinha informs. Goldratt was looking to work with only one

FMCG company in India, and he picked GCPL from a list of ten FMCG companies that had applied. “Perhaps it was the mindset of the management that made Dr Goldratt choose us over others. Mindset is very important for companies who are required to give away forecasting and work with replenishment,” Sinha reasons. In simple terms, the Theory of Constraints seeks to identify and empower the bottleneck in a supply system to ensure smooth replenishment. According to Goldratt, the main bottleneck for FMCG companies is the marketplace. And the main ways to empower the bottleneck are to increase and fulfill the consumer demand. As per Goldratt’s estimate, a remarkable 50 percent of the demand generated by FMCGs in India gets lost because of non-availability. “To fulfill the potential market, one has to be super efficient. It also means that all the marketing inputs – advertising and other means – will give us double the inputs if our products are made available to meet the total demand generated,” says Sinha. He stresses that a complete replenishment model depends on

GCPl works with CFAs to optimize stacking patterns to reduce operational warehouse space.

INDIA |

December 2010 | www.logisticsweek.com

the information flow in the supplychain. And the information flow has to be on a daily basis. “One can no longer look at weekly distributor sales or weekly production schedules. Everything has to be made dynamic on a daily basis,” he says. Everyday, till midnight, GCPL collects sales and stock data from its distributors through the IT network. This information flow continues till midnight. Then from midnight to about 4 AM, the company runs the replenishment engine that tells the former which and how much stock needs to be supplied between particular nodes in the chain. And what and how much stock needs to be manufactured. Not only does the daily processing of information keep inventory costs low, it saves costs on several fronts as well. “For instance, if we see that a downstream node needs two or three trucks a day, it means some of the products can bypass the hub. That brings down the cost, because some products can travel a shorter route, say, from plant warehouse to a CFA directly. Secondly you save on storage, loading and unloading costs for these products,” he says. What about demand forecasting? As is understood, a replenishment model has no place for forecasting demand. So has GCPL done away with it altogether? Some forecasting is done -- for instance, for Ezee liquid detergents which do better during the winters or Cinthol Talcum Powder that do well during the summers – but that is only to see market trends. The superefficient replenishment engine leaves no scope for forecasting. “We relook at the system everyday – so we have our finger on the pulse of the market to see how different SKUs are moving across different geographies, at each of the distributors’,” says Sinha. GCPL about 1,200 direct distributors across the country of which Class-A distributors (business of

< Cover Story `10 lakh and more) comprise about 30 percent of the total strength, Class B (`10 to 5 lakh) and Class C (less than `5 lakh) distributors comprise the rest. Between GCPL and GHPL, the total numbers of SKUs handled are 400 in number.

the Way Chips Fall GCPL supply-chain follows the hub-and-spoke model, but does constant reviews to make supply lines linear wherever required. “Hub and spoke, because we want to service each node on a daily basis. Unless we

Unless we consolidate the products at the hub, there won't be enough stock to service the downstream node on a daily basis. And we don't want to sacrifice the daily service.

consolidate the products at the hub, there won’t be enough stock to service the downstream node on a daily basis. And we don’t want to sacrifice the daily services. That’s part of the replenishment philosophy,” Sinha says. “But if a particular depot does well, we will even bypass the hub and send across the material directly,” he adds. In terms of the flow of goods, GCPL factories supply to the plant warehouse (a plant warehouse or PWH

INDIA |

December 2010 | www.logisticsweek.com

could be inside the factory). Goods move from the plant warehouse to regional warehouses (RWHS), thereon to the CFAs, distributors, and to retailers. For the small towns, GCPL has an alternate model. There, CFAs supply to superstockists who in turn supply to sub-stockists. The latter are located in small towns, and so they service the local retailers. This model is followed in order to increase the depth of distribution because sub-stockists can typically service the retailers on a daily basis. These sub-stockists number more than 6,000 and cover all the towns in India (as per the census), except some towns in the Northeast and Jammu and Kashmir which are

not accessible. These sub-stockists also cover the nearby villages, about 10 to 12 villages on an average. The more remote villages are covered by vans that make a trip once in 15 days and supply to the local retailers. “The rural growth has been faster than the urban growth. Now about 42 percent of our sales come from the rural areas, which used to be 32 percent when we started our replenishment model five years ago,” states Sinha proudly. For moving goods, GCPL, much like other FMCG companies, relies mainly on road transport, except for routes like Punjab-Hyderabad where trains are cheaper, or for moving goods to or from the Northeast where roads are chancy. The good

part is that the company regularly evaluates railways versus roadtransport rates for every route, and opts for the mode that is cheaper. “It works well because road transporters know we have an alternative. When we started using railways, the road transporters also brought down their rates,” he says.

Not A Penny More Speaking of cost savings in supplychain, Sinha says cost-efficiency is not separate from the system itself. However, being proactive helps. GCPL works closely with select vendors to improve quality of supplies, delivery standards and improve their cost of production as part of its partnership philosophy –

GCPL’s Flow of Goods

Factories

Regional Warehouse (RWH)

Plant Warehouse (PWH)

rUrAL reACH

CFAs

Distributors

Super Stockists

Sub-Stockists

Village Retailers

Retailers

INDIA |

December 2010 | www.logisticsweek.com

< Cover Story followed ever since it adopted Total Quality Management. Sinha cites an example, “Companies ask vendors to comply with their product specifications, but vendors may have their own set of specifications to keep supply costs down. Cost saving here is a three-way street – between the vendor, the procurement and manufacturing department, and the R&D (Research and Development). The specification of a product must be tailor-made for the least cost. That’s called the total cost of ownership.” On the manufacturing side, focusing on quality is more paying than is normally understood. “A learning has been that every time we improve quality, the costs come down,” he says.

every step of quality improvement makes the process more cost effective. the opportunities are endless as each process could have its own variation. For instance, reducing the variability of output in the manufacturing of soaps has immense cost benefits. Process control is the key. “It is the Six Sigma approach,” he explains, “in soaps, minimizing variation in factors such as product weight, moisture, fragrance and the color, from one soap to another brings the costs down. Every step of quality improvement makes the process more cost effective. The opportunities are endless because each process could have its own variation.” For inventory cost-control, in his experience, replenishment approach is second to none. “We have seen the benefits in the last five years, where every time we improve availability of

INDIA |

our products, the inventory actually comes down. And if there is lower inventory, we can reduce costs.” When it comes to freight movement costs, GCPL regularly holds reverse auctions, where it asks on an average six to ten transporters – overall, the company works with about 20 main transporters across the country – to bid online for a consignment. At the warehouse level, GCPL work with CFAs – the latter manage the warehouse – to optimize stacking patterns in order to reduce operational warehouse space and also to ensure first-in-first-out (FIFO). “We are also piloting some advanced stacking and racking systems for using them in areas where the rentals are high. In such areas, it makes sense to go in for vertical storage,” he says, “while in areas where rentals are low, it doesn’t make sense to opt for vertical stacking. That would also require palletization, which would be an additional cost. It’s a question of looking at saving any additional cost we may incur.” Stacking doesn’t come cheap for an FMCG company. For example, boxes carrying GCPL soaps and insecticides typically weigh 15 kg each, so each pallet could weigh around 1.5 ton, which means high stacking and handling costs. “Only when palletizing makes sense for vertical storage, we go in for vertical stacking,” he says. Consumer product companies are big on automated warehouses. GCPL has similar plans. But like many companies in the sector, it is waiting for GST (Goods and Services Tax) to happen to put big bucks into large-scale automation. Sinha concedes, “To some extent, we are waiting for GST, then we could go for automation at some warehouses with full speed. Right now, we have some pilots in the works.”

Go Green, Spend Less GCPL encourages the warehouse owners – the CFAs—to use natural light-

December 2010 | www.logisticsweek.com

ing. That not only saves costs, it brings down the carbon footprint as well. Thankfully, GCPL warehouses produce no effluents because of the type of the business. But the company puts a tight leash on forklift use – it has done away with diesel forklifts over those operated by battery.

takeaways From Abroad About key learnings from GCPL’s international acquisitions, Sinha says, “Where we get the first-cut benefits is sourcing – strategic sourcing of raw materials, packaging material, that’s where we have had some savings. For example, if the same item is supplied to Indonesia (Megasari) as is to (GCPL) India, we can negotiate with suppliers to reduce the rates due to increased volumes.” Overall, there are many takeaways from international acquisitions since modern trade or organized retail is more pervasive overseas than in India. In countries like Argentina or Indonesia, modern trade could comprise anywhere between 30 to 90 percent of the retail ecosystem, whereas it is a meager five percent in India. “So the modern trade management – dealing with a chain of stores and being able to negotiate with store chains, ensuring the efficacy of promotions, how to do a midcourse correction if the plan is not going well, or how to step it up if it is doing very well – these are some very good learnings we have got from our acquisitions in South Africa and Argentina,” he says. And it shows. Driven by international acquisitions, improving market conditions at home, deeper rural reach and all of it backed by its supply-chain robustness, GCPL is posting some remarkable growth. In the second quarter of FY2011 ending September 30, the company posted a whopping 66 percent growth in net sales year-on-year, much higher than industry average. From what appears, it’s a sign of things to come.

< feature

44 44

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December 2010 | www.logisticsweek.com

Call the

Security

Supply-chain security measures are of prime importance for industrial growth. In this regard, India may be lagging behind business houses elsewhere in the world, but such concerns are now being addressed all over the country in earnest. Frewin Francis investigates.

hen talking of supply chain security on a broad perspective, one thinks of security of merchandise and non-merchandise inventory, assets, people and data. Breaches of security occur due to factors that could be environmental (flood, earthquake or a volcano eruption), industrial (fire or an accident) or organizational (mismanagement, unethical work practices or crooked employees). An industry expert in the retail industry, on condition of anonymity, says, â&#x20AC;&#x153;According to estimates, inventory losses in retail alone in India range from two-six percent. Most of

them are due to lack of or improper supply chain security measures.â&#x20AC;? Contrast this with the transportation and distribution business in developed countries where losses over 0.1 percent due to supply chain security lapses are a cause for alarm. This does not imply that supply chains worldwide are untouched by threats. India has a unique security scenario that might appear confusing and hard to comprehend. Unprepared western businessmen hoping to do business in India would be baffled and unequipped to handle religious or regional clashes that disrupt daily life and leave a state

Need Of the Hour n

n n

Supply chain security measures in India in small and mid-size companies are still at a nascent stage. The retail industry in India reports around two to six percent in inventory losses due to supply chain security lapses. Increasing use of technology helps keep a check on inventory levels,fraud and pilferage. Internal and external auditing helps companies benchmark supply chain security measures against globally accepted standards. Instilling the right work ethic among employees is by and large the best way to improve supply chain security measures.

INDIA |

December 2010 | www.logisticsweek.com 45

< feature of unrest for some period of time. Other issues like trade and labor union problems or political unrest also add to companies' woes. The UKbased daily, The Telegraph, reported a derailment (that was later blamed on Maoist saboteurs) in West Bengal where the Mumbai-bound passenger express veered off the tracks onto the path of an oncoming freight train. While 146 persons died in that accident, it also impacted freight services elsewhere. Gagan Seksaria, Associate Director (Transportation & Logistics), KPMG, says, “In a post-9/11 world, terrorism, probably, is the single largest security concern. The intensity of such threats depends on the routes used for transportation (for instance, attacks by Somali pirates in the Horn of Africa region or the Naxals on the Indian Railways in the eastern part of India), the mode of transportation employed, cargo, etc.”

using Security Conveniently While logistics players are aware that they need to secure their supply chain, there is also a certain insouciance associated with it. A survey conducted by Global Retail Theft Barometer (GRTB) 2010 across 42 coun-

There is also a general aversion to the use of foolproof technology.

INDIA |

tries shows that India’s retail industry alone incurs losses of $2.2 billion due to pilferage. This is mainly because in retail the level of security predominantly depends on the nature and value of the commodity. Pradeep Chechani, Business Head and Vice President (supply chain) at Wadhawan Retail, says, “Consider the transportation of jewelry where one would see fullproof security and insurance of the products. Measures like tagging, counting, sealing, packaging and delivering in the presence of authorized persons, using a bullet-proof mode of transportation and detailed track and trace to ensure 100 percent accuracy in inventory management and delivery are common. In most cases, implants (personnel) are sent along with consignments.” But this may not be the case with other goods and parts of the supply chain. It is well-known in the supply chain industry that most security breaches begin at warehouses. In cases where the transportation and distribution processes are out-sourced to 3PL players, security could be compromised due to want of project management capabilities, improper scrutiny of goods in transit or mishandling of goods during loading and unloading. There is also a general aversion to the use of foolproof technology at warehouses. Marcus Schroeder, managing director at Hörrmann India, says, “The traditional Indian view of a warehouse is that of a shed with no functional requirements beyond a corrugated roof. Secondly, the warehouse owners are not the users. So there’s no compulsion to spend on technology. Lastly, there’s a reluctance to invest in what is seen as a temporary, tax-optimized means to an end, rather than something geared for performance and efficiency.” While developed countries are wary of using security personnel extensively and prefer technology, in In-

December 2010 | www.logisticsweek.com

In a post-9/11 world, terrorism, probably, is the single largest security concern. The intensity of such threats depends on the routes used for transportation, the mode, and the cargo.” — Gagan Seksaria, Associate Director (Transportation & Logistics), KPMG

dia it is a preferred mode in keeping with cost cutting measures. Small and medium-sized organizations faced with the constant stress of decreasing margins, increasing competition, and high targets resort to lesser layers of security. But the MNCs in the transport and distribution business in India implement security at par with their global branches. Fraud is another aspect that impacts supply chain. Fraud thrives in complex supply chains. With businesses turning paperless and data being real-time, the speed of businesses has accelerated. It has also resulted in increased risks of data being tampered with. Often employees enter fraudulent and bogus data to project performance figures close to figures that match efficient processes to cover up pilferage or slackness at work. This results in losses that are unaccounted for or untraceable.

< feature avoid conviction decrees for long periods of time.

Importance Of Security

The traditional Indian view of a warehouse is that of a shed with no functional requirements beyond a corrugated roof. Secondly, the warehouse owners are not the users. So there’s no compulsion to spend on technology.” — Marcus Schroeder, Managing Director, Hörrmann India.

Though fraud may not pose a direct threat to operations, it does affect reputation and brand image. Fake goods cannot match the quality of the original. Globally, counterfeiting of goods as a trend is more prevalent in China, India and Thailand than in other countries. Some common goods that are counterfeited are consumables, drugs, low-end electronic devices and goods than can be manufactured at low costs and sold at a premium. Counterfeit pharmaceutical products can be lethal. In India, in spite of specialized IP (intellectual property) units, very few are fully operational. The lack of operational IP units increases as one goes from urban through suburban to the rural regions. Also the law and judiciary system procedures are lengthy with plenty of loopholes. This makes it easy for defaulters to

INDIA |

The transportation business, on the other hand, leaves no stone unturned to implement security measures. Sanjiv Kathuria, Director (Sales and Marketing), TNT India, says, “Security measures are adopted right from the time when employees are hired. Potential employees must furnish a police NOC (no objection certificate) from their respective regions of residence of possessing a clean record. Also, this sector has a practice of employing retired armed forces personnel in security departments.” Shipments too are accepted only after physical verification. Kathuria adds, “In the case of electronic goods, only registered customers are allowed to make shipments. This conforms to the layers of security checks performed on the customer as well as the shipments. In cases of goods seeming suspicious even after inspection, we store them at secure locations till it has been verified as safe to transport." Some transport operators resort to staying inconspicuous when operating in threat prone situations and areas. They also hire personnel with local expertise and experience. And in dire cases of top priority transport of goods, police protection is also sought. Retail companies prefer to rope in employees too, to ascertain compliance to security. Chechani says his company believes in proper training and incentivizing staff through non-monetary and monetary means to help the organization to adhere to security measures. Security personnel should be closely involved and familiar with law enforcement and industry trade organizations. Limited access to inventory, access card activated doors, and surveillance cameras are some of the commonly adopted security

December 2010 | www.logisticsweek.com

measures. Acoustical alarms, fire and smoke detectors and intrusion alarms are also employed to report any abnormal incidents. Other technology measures gaining ground are the use of RFID, GPS tracking and other locator systems. Some of the newer technologies adopted in developed markets today which are yet to pick up in India are elevator management systems, and CCTVs enabled for night vision and long range vision. A recent introduction by Bosch, the BIS (Building Integration System), combines a number of technical systems: fire and intrusion alarms, video monitoring, access control and evacuation systems. It also brings thirdparty equipment onto one modular platform. RMS (Risk Management

Other technology measures gaining ground are the use of RFID, GPS tracking and other locator systems.

Security measures are adopted right from the time when employees are hired. Potential employees must furnish a police NOC from their respective regions of residence of possessing a clean record.” — Sanjiv Kathuria, Director (Sales and Marketing), TNT India

Systems) is increasingly being used by MNCs to consolidate property values, claims and policies. It provides tracking and management reporting capabilities thus enabling firms to monitor and control overall cost of risk.

Security Measures adopted While security of goods is critical, the protection of information is equally or even more crucial. Security experts advise that information security in an organization must adhere to a set of policies, processes and systems that help manage risks. Chechani of Wadhawan Retail prefers to allow access to information to only a few and maintain records of the personnel that have accessed any information at any given point of time. He believes that

critical information like vendor contract details and promotion details should be confined only to a few. Judicious use of ERP systems available today can thus make it easier to detect fraud, if any. For ensuring information security, the International Organization of Standardization (ISO) along with the International Electrotechnical Commission (IEC) has introduced the ISO/IEC 27000-series (also known as the Information Security Management System (ISMS) Family of Standards or 'ISO27k'). Other standards available are those introduced by the Information Security Forum (ISF), the Standards of Good Practice and the Information Systems Audit and Control Association (ISACA), the IT Governance Institute (ITGI) called the Control Objectives for Information and related Technology (COBIT), and the BS 7799 by the British Standards Institution. The ISO also has the ISO 28000:2007 that specifies the requirements for a security management system for the supply chain. Any company certified as an ISO 28000:2007 compliant organization follows accepted best practices which involves establishment, implementation, maintenance and constant improvisation of the security management system. Some other certifications available in the industry are the Transported Asset Protection Association Europe (TAPA-EMEA) and the WRAP (Worldwide Responsible Accredited Production). An organization can be certified by external auditing and certifying bodies such as Cisco and TÜV SÜD amongst many others. Often, companies also internally audit their safety operations with reference to benchmarked industry standards. One safety measure that all supply chain companies adopt is the practice of insurance. It covers the gamut of logistical services

except in the case of perishable goods past their expiry date. Steps are taken to insure every link of the supply chain as much as possible to minimize risks. Kathuria says that while insurance premiums are usually paid at 0.5 percent of the declared invoice value, the maximum reimbursable amount is less than or equal to Rs 200,000 in India. So often, the reimbursement amount does not make up for the loss or damage of goods. In such cases, an extra premium is paid by the customer.

While security of goods is critical, the protection of information is equally crucial.

Insurance expert, Shankar Mohan, says that 80 percent of the claims are made for damages while consignments are in transit. Another 15 percent of claims are attributed to damaged goods due to improper handling. The remaining five percent comprises theft, fire and other accidents. Supply chain security measures still have a long way to go in India. Nevertheless, the sheer volume of trade, like those in India and China, has made doing business in these regions extremely lucrative. Replacing short-term goals with long-term ones as primary priorities would prove to be the foundation stone in tackling supply chain threats. INDIA |

December 2010 | www.logisticsweek.com 49

TransporTaTion

Fresh Ideas Can Catalyse Maritime

Growth

photo: ramlath Kavil

This paper prepared by the indian national shipownersâ&#x20AC;&#x2122; association, KpMG and supply Chain Leadership Council incisively analyses ďŹ scal matters and also stresses the importance of the corporatization of major ports, the quick development of necessary infrastructure and coastal shipping. INDIA |

December 2010 | www.logisticsweek.com

< TransporTaTion Recommendations foR

ports sector

policy

Corporatization of ports Current status Most of the major ports operating in India are not corporatized and are administered by trusts under Major Port Trusts Act (MTPA) 1963

recommendation Corporatization of Major Ports

rationale MPTA has many outdated provisions that inflate port charges. This has resulted in foreign ports taking away traffic from our major ports and prevented them from

of land to catalyse the development of sufficient CFS capacity in reasonable proximity to ports.

rationale

The transit time of container trains has to improve and the railways need to accord due priority to timely movement of these trains. functioning in an agile manner. A corporate tag would accord them the autonomy required for improving efficiency of operations as well as decision making.

Unavailability of adequate Land For Container Freight stations (CFs) Current status Unavailability of adequate land for development of container freight stations is leading to a crunch in available CFS capacity as well as causing CFSs to be pushed further away from the port gate causing complexities in operation and an escalation in cost.

recommendation Government to facilitate provision

INDIA |

Lack of CFS capacity tends to cause congestion within port operations and leads to operational and cost inefficiencies for exporters and importers.

improvement in Hinterland Connectivity and Last Mile infrastructure Current status The transit time of container trains has to improve and the railways need to accord due priority to timely movement of these trains. It happens frequently that goods wagons are held up at places to allow movement of passenger trains. Such instances lead to high transit times and at times the container misses out on the vessel which has a fixed window at the port. Besides, low quality infrastructure towards the last mile tends to become the weakest link in the transportation chain, making the entire supply chain fragile

recommendation Priority movement of container trains and movement as per schedule. These may be incorporated as

December 2010 | www.logisticsweek.com

contractually binding obligations and damages may be prescribed for either party if there are delays on account of the rail operators. Besides, there is an urgent need to invest or promote investment in the development of last mile infrastructure.

rationale Seamless and fast movement of cargo between the port and hinterland will improve the productivity of ports substantially and help in decongesting port facilities. Besides, good last mile connectivity will ensure an equitable distribution of flow of traffic across ports in India instead of a handful of ports.

reduce Vessel related Charges in Major ports Current status Vessel related charges for berth hire and pilotage charges are quite uncompetitive as compared to alternative foreign ports.

recommendation Vessel related charges shall be reduced to make the overall call for a ship cost competitive when compared to alternate ports

rationale High vessel related charges leads to

< TransporTaTion loss of potential vessel calls in key Indian ports to alternative foreign ports, while adding to the overall cost of shipment for cargo owners.

Development of supporting infrastructure Current status of the BOT projects that are being awarded to private operators across the country is based on, in many cases, the understanding that critical infrastructure such as road/rail connectivity, dredging and land for truck parking areas etc. will be developed along with the terminal by private operators. However, such infrastructure projects are not always implemented in a timely manner.

recommendation Development of critical infrastructure to support the operation of terminals be either expedited or included, where possible, within the scope of the concession with reasonable adjustments in the lease/royalty payments from the operator to the government.

rationale Lack of such infrastructure, critical to the successful implementation and operation of private terminals

in ports, affects operations on the one hand and keeps away potential investors on the other hand.

Deepening of JnpT Channel Current status In spite of being India's premier gateway port handling close to 50 percent of its container trade, the draft available in the JNPT/ Mumbai channel is insufficient for larger vessels.

recommendation Expedite deepening of JNPT/Mumbai harbor channel

rationale Given an increase in average parcel sizes per vessel call, shipping lines would like to deploy larger vessels on routes where JNPT is a call thereby increasing capacities available to Indian exporters and importers. However, due to restricted draft, average size of vessels calling JNPT remain a third of the vessels calling most other large ports globally, including in emerging economies.

Widening of approach and service roads around ports Current status There are severe inadequacies in road infrastructure around key ports of the country, creating operational complexities for the port, operators as well as traders and adding to congestion in and around port facilities.

recommendation The approach and service roads in the port area need to be widened and well maintained, while the service roads to the back up yards and related facilities need to be developed and maintained. There is also a need to identify and develop key rail-

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December 2010 | www.logisticsweek.com

road interaction nodes to facilitate inter-modal movements and inject seamlessness in container transportation.

rationale Requested developments will resolve operational issues and congestion not just in and around ports, but in the entire container logistics chain.

Fiscal

High Cost of Capital Current status Interest income accruing to lenders of port projects is taxed and so are long-term capital gains and dividends, in turn leading to high cost of capital for a port developer.

recommendation

Interest income accruing to lenders of port projects may not be taxed and tax exemption on long-term capital gains and dividends arising out of investments in port companies may be restored. This can be done by restoring section 10(23G) of the Income Tax Act and making it applicable to ports developers.

rationale Since the port projects, unlike some other projects face market risks, coupled with lumpiness of investments, it is important to facilitate a lower cost of capital for port developers.

Excise Duty on port Construction Current status As per the CENVAT rules, excise duty paid on plant and machinery can be offset against service tax / excise duty collected for services rendered / product sold. It is difficult to avail benefit from this offset in port construction because the bulk of the investment is in berths, warehouses, tanks, etc. and the plant and machinery is limited to cranes / mobile equipment

Material Management

Logistics

Warehousing

Oil & Gas Services â&#x20AC;&#x153;Beyond your Imaginationâ&#x20AC;?

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< TransporTaTion recommendation Investment in berths, warehouse, tanks, etc. should be explicitly clarified as plant and machinery as per CENVAT rules.

rationale This will allow ports to obtain CENVAT credit easily against excise duty paid on cement and steel.

income Tax Benefits Current status While ports are allowed income tax exemption under section 80

Benefits to a port should also extend to the players who are port-based infrastructure service providers.

IA, the relevant provision in Income Tax Act limits the exemption to only those infrastructure facilities which have entered into an agreement with the government, local bodies, statutory

Recommendations foR

High port tariffs apply to coastal shipping which is a threat to the development of this new industry. Besides, limited availability of berthing for coastal ships at most ports limits the operational viability of running services.

recommendation Wharfage on coastal shipping should be reduced to 10 percent of the wharfage cost charged to EXIM cargo. Also, wharfage on the same cargo should not be charged twice (once at the load port and once at INDIA |

recommendation A provision can be made in the Income Tax Act to grant section 80 IA benefits to such players who have developed facilities on land leased from the port (private or government) and to the extent they handle cargo emanating / terminating at that port. Further, the definition of 'infrastructure facility' should be amended to include CFS and ICDs.

rationale Benefits to a port should also extend to the players who are portbased infrastructure service providers since their presence is critical for development of port itself. This includes independent CFS in the vicinity of ports, ICD, independent warehouse service providers and tank terminal operators, inter alia.

ports serving sEZs as well do not get equivalent tax incentives. Current status While ports are allowed income tax benefits under section 80- IA, they are not exempt from MAT provisions, even though such an exemption is available to SEZ developers entitled to section 80-IAB benefits.

recommendation Ports which are part of SEZ but do not handle exclusively SEZ cargo should also be granted to MAT exemption

rationale It is not practical to develop a common user facility for SEZ cargo only. Even though both, port and SEZ, are infrastructure meant for enabling EXIM trade, and have similar investment and market risk profile, still, ports have to pay Minimum Alternate Tax (MAT), while SEZ developers do not have to pay MAT. Such MAT exemption to ports will also encourage ports to establish linkages with many SEZs, thus improving the viability of SEZs as well.

Coastal shipping sector

High Tariffs Current status

bodies, etc. Further, presently, the def inition of 'infrastructure facility' does not expressly cover Container Freight Stations (CFS), inland container depots (ICD), etc. and, hence, there is diff iculty in claiming 80-IA on such infrastructure facilities.

the disport). Besides, there should be a special tariff for coastal cargo at minor ports, as there exists at major ports. In addition, minor ports and terminal operators to be issued guidelines that they shall accord the same priority to coastal cargo as they do to EXIM cargo. Overall, this should work as an Incubator scheme for a fixed period of five years which can help incubate coastal shipping projects

rationale Coastal shipping is an industry in its infancy multiple advantages. These changes will encourage investment

December 2010 | www.logisticsweek.com

in the sector allowing it to incubate successfully and integrate itself as an additional, cost effective and environmentally sensible mode of transportation within India's overall transportation system.

service Tax Current status Ships or cargo interests pay service tax at each and every port for the same cargo. For example, if container 'A' moves from Mumbai to Goa, then service tax is liable on each and every port charge applied for loading in Mumbai as well as discharge in Goa.

< TransporTaTion stumbling blocks in the development of coastal shipping. Purchase of ship repair equipment through ship repair units at inflated cost adds to the repair costs in India, which are already higher than in foreign yards. In addition, transfer of spares by the ship repair unit to the shipping company attracts taxes which when added to the service fee charged by the ship repair units, results in a substantial burden for coastal ship owners and operators.

Development of Coastal shipping

recommendation The service tax for coastal ships should be completely exempted, if not, only nominal tax should be paid on a yearly basis for vessels involved in coastal services.

rationale Globally, shipping is kept out of the purview of local taxes, GST, etc. Examples of this are Australia, Singapore and UK where shipping is not liable for GST. Besides, input services for the shipping industry are not subject to service tax globally. These services include brokerage, commission and finance charges, general insurance services including Protection & Indemnity (P&I) insurance, ship management services, manpower recruitment and supply of agency services.

indirect Tax: Customs duty on bunkers and repair materials by shipping companies for repair in india Current status High duties on bunkers in India visĂ -vis bunkers in key international markets makes bunker cost in India between 40 percent and 80 percent

INDIA |

which is being borne by the coastal vessels. Presently, spares and equipment imported by ship repair units registered with the Directorate General of Shipping operating at various ports in the country for repair of ships, are exempted from customs duty. Ship-owners are not permitted to import spares directly.

recommendation There should be no customs duty/ other levies on bunkers of coastal ships. As in the case of ship repair units, shipowners may be permitted to import spares and repair equipment directly for carrying out repairs in India without being subject to the payment of customs duty.

rationale Bunkers form a substantial component of the direct operating cost of a vessel, constituting about 34 percent. A sensitivity change of 20 percent in the costs bunkers would result in a change of 7 percent of the operating costs of a vessel. In fact, high bunker costs and the non-availability of bonded bunkers at Indian ports have been identified as one of the serious

December 2010 | www.logisticsweek.com

Introduce a Modal shift programme initiative on the lines of the European Union's 'Marco Polo' Programme comprising the two components: (a) Modal Shift action and (b) Catalyst action. The contours of such a programme could be worked out by consensus in the 'Working Group on Shipping and Inland Waterways Transportâ&#x20AC;&#x2122; (IWT). Complement the above initiative by (i) the Central Government to consider diverting its own / its agencies' cargo to coastal shipping, (ii) Due to non-availability of cargo for return voyages, extend appropriate incentives to trade (Multimodal Transport Operators and shippers etc.) for adopting coastal shipping mode for sizeable domestic cargoes in preference to rail / road mode. Deduction from taxable income based on traffic diverted by shippers may be pursued. Coastal shipping is the most environmentally friendly mode of transportation and with the growth expected in India's cargo generation â&#x20AC;&#x201C; both domestic and EXIM, its greater and optimal use will be increasingly essential, especially from the point of view of gaining carbon credits. Therefore, it should be accorded its due importance and a special body within the Ministry of Shipping should be formed to facilitate and encourage its development.

Recommendations foR

Container rail services sector

policy Lack of Common User iCDs / DCTs

the mutual benefit of service users as well as service providers.

Current status

recommendation

Although the government has taken positive steps to allow private players in container rail terminal operations, but the requisite support infrastructure in terms of common Inland Container Depots (ICDs) or Domestic Container Terminals (DCTs) is lacking. Additionally, it is also difficult to procure the land to construct ICDs / DCTs and the available unused railway sidings are entangled in bureaucratic complexities.

Indian Railways, through the government of India, should take an initiative to develop rail integrated mega logistics parks in key locations in India based on the PPP model.

recommendation The government should itself or under PPP model set up a network of common user rail integrated terminals (ICDs / DTCs). In addition to that, the government should also speed up the allocation of unused railway sidings to private players, so as to enable them to have a level playing field with state run services.

rationale This move will enable healthy competition with trade efficiencies and can also lead to further shifts in movement of trade from road to rail.

rail integrated Mega Logistics parks Current status Few modern, common-user, integrated and multi-modal logistics facilities exist causing the cargo to remain fragmented over several modes, locations and sub-scale facilities and not allowing container logistics to flourish to its full potential towards

rationale Central development of such mega logistics parks will have multiple benefits including the following. a.It will save the unnecessary movement of Indian railway locomotives after terminating the journey at the destination as in mega logistics parks, the same power can be used to haul other waiting trains. b.It will solve the problem of an increase in project costs due to a delay in inland acquisitions by container train operators independently. Rail share can only be increased by having aggregation / segregation of cargo, by providing additional value added services like packaging, warehousing, cold storages, etc. for which significant land is needed. Maintenance like Reactive Overhead (ROH)/POH (Preventive Overhead) is possible only in mega logistics parks thereby increasing the productivity of rolling stock.

Fiscal

Haulage charges of container trains. Current status Haulage charges for container trains are very high. Most of the freight trains connect one port or the other, so it is the port traffic which bears the maximum burden of high haulage charges. If the trains have to

compete with road transport, it has to offer its services economically, which means haulage charges have to be scaled down to competitive levels.

recommendation Reduction in haulage charges. In addition, there may be a prescribed upper limit on the extent of revision in haulage charges over and above the number of revisions that are already a part of rail concession, to protect against discretionary increases

rationale Reduction in haulage charges is likely to contribute to increase in competitiveness of rail haulage vis-Ă -vis road.

removal of service Tax Current status Service tax is currently applied to carriage of goods in containers on rail.

recommendation Removal of this service tax application in line with similar exemption granted to goods moved on rail.

rationale The application of service tax on top of already high haulage charges has made carriage of goods in containers on rail a difficult choice for traders as well as domestic distributors slowing down the pace of shift from road to rail. These suggestions, if implemented quickly and decisively, should enable the shipping industry to move forward dynamically, be a strong contender in the global shipping trade and further boost the countryâ&#x20AC;&#x2122;s economy. This is the concluding article of the twopart series on the maritime sector.

INDIA |

December 2010 | www.logisticsweek.com 59

< pAnoRAMA OFF THE SHELF

A Stitch In Time Saves Nine

n their book, “Innovative Quick Response Programs in Logistics and Supply Chain Management” Cheng and Choi discuss how Quick Response (QR) policy is a market-driven business strategy in which supply chain members work together to react quickly to volatile market demand. With advances in information technologies (such as RFID and ERP systems), new challenges and opportunities arise for the application of QR. The book explores QR extensively with a view to discovering innovative QR measures that can help tackle familiar and emerging challenges. The book is organized into four parts and

includes chapters on analytical modeling and analyses, information technologies, cases, reviews, and applications. The book also provides analytical and empirical results with valuable insights, which will not only help supply chain agents in understanding the latest applications of QR in business, but help practitioners and researchers to know ways to improve the effectiveness of QR using innovative methods. Innovative Quick Response programs in logistics and supply chain Management By TC Edwin Cheng, Tsan-Ming Choi Publisher: Springer Price: `10,500

Collaborate To Succeed

he book examines the opportunities for, and the effects and benefits of, collaborative working practices and their impact on supply chain performance. The book is organized into three main parts – the first part focuses on modeling the supply chain using conceptual frameworks to describe the relationship between collaboration and performance. The second part examines the issues around information systems alignment, and ensuring the management and coordination of interactions with suppliers and customers. The final part of the book focuses on the various formalized approaches (includ-

ing simulation, game theory, experimental economics, Petri nets and object-oriented design techniques) that may be taken to analyze the impact of any given collaboration process, coordination mechanism, or decision-making behavior on supply chain performance. supply chain performance: collaboration, Alignment, and coordination By Valérie Botta-Genoulaz, Jean-Pierre Campagne, Daniel Llerena, Claude Pellegrin Publisher: Wiley Price: `6,600

Value Addition In The Supply Chain

ussell and Taylor's “Operations Management: Creating Value Along the Supply Chain, 7th edition” teaches students to analyze processes, ensure quality, create value, and manage the flow of information and products along the supply chain. The authors demonstrate the skills needed to be a successful operations manager. With WileyPLUS, students are given an option to complete their homework in an online environment that facilitates understanding, while quickly accessing the eBook and student resources.

INDIA |

The production process and global supply chain of chocolate is used to introduce operation management topics, and helps students to see how all operations fit together. The book provides a basic understanding of both qualitative and quantitative operations in management processes. operations Management: creating Value Along the supply By Roberta S. Russell, Bernard W. Taylor Publisher: Wiley Price: `9,400

December 2010 | www.logisticsweek.com

BloGospheRe Bonded warehouses can save global companies money Blogger: steve Banker In his blog, Banker writes that bonded warehouses can help save money for importers. He explains this with an example. Consider an American company with a bonded warehouse in Rotterdam. The company ships goods to its warehouse and stores them for three months. When a customer order comes in, the company pays the duties and ships the goods to the customer. In short, the bonded warehouse allows the company to delay payment on those duties for three months. In other words, bonded warehouses improve a company’s cash flow. With bonded warehouses, one can reduce lead times for goods flowing through a warehouse deemed by customs to be under administrative control. search tags: bonded warehouse, Steve banker

terrorists say “we love logistics” too Blogger: Adrian Gonzalez Gonzalez, in his blog entry, writes about the recent events where package bombs were shipped from Yemen using FedEx and UPS planes (among others) bound for the US. He describes this incident as a sober reminder that terrorism remains a supply chain risk. Logistics powers global commerce. Throw sand (or bombs) in its gears and you slow down economic activity. Logistics is also very complex since it involves the synchronization of activities and the exchange of information between many

tips for mitigating master data issues Blogger: Martin Buckley Buckley speaks of how ERP and other planning systems in reality have either not actually integrated or lack some functionality. The lack of complete integration has led to a situation when in the event of an enterprise solution being implemented across different functional areas, the definition of the data differs from unit to unit. This leads to the necessity of building handling rules and look-up tables so as to have data flow throughout the enterprise with consistent meaning. The author suggests three ways to deal with this situation. First perform an audit as part of the preliminary planning phase. Secondly, centralize the administration of business rules and data schema as they apply to enterprise-wide initiatives and finally, plan and implement every business process as an enterprise-wide initiative. search tags: mitigating master data, martin buckley

Journals, Case Studies, Research Reports

ResouRce centeR Drink driving in commercial transport

different parties, often located in different countries. No doubt, this incident will renew calls to implement 100 percent screening of all air cargo as quickly as possible. But as Gonzalez argued last December in his post “100 percent Cargo Inspection: A Means to What End?” increasing inspections is apt to provide a false sense of comfort. The goal should be to develop transparent and better designed and controlled end-to-end global supply chain processes. search tags: terrorists and logistics, Adrian Gonzalez

Pathway to low carbon shipping By DNV

By European Transport Safety Council The European Transport Safety Council (ETSC), a Belgium-based international non-governmental organization, published this paper to provide an overview of how drink driving could be effectively tackled in commercial transport through various regulations and initiatives. Against the background of their alcohol policies, it shows how several countries have been successful in tackling drink driving. Focusing on commercial transport, the paper presents a comprehensive regulatory framework that exists in Europe and its member states and concludes that the role of private stakeholders is crucial in guaranteeing a highly safe driving culture.

In June 2009, DNV published its first report on Pathway to Low Carbon Shipping, where it demonstrated the potential to reduce the CO2 emission of the existing fleet by 15 percent in a cost efficient manner. In its second report, DNV has analyzed the projected CO2 emissions by the year 2030. The f leet model from the IMO GHG study has been used as a baseline, and the total CO2 emissions from the analysed f leet in 2009 are estimated to be 925 MT. The baseline emissions calculated for 2030 by DNV’s scenario model is at 1,530 MT, taking into account a significant world f leet growth over the period. DNV’s scenario model is built up every year by introducing a set of new vessels and scrapping a number of older vessels. The average modelled f leet

INDIA |

growth is 2.3 percent, which is significantly lower than what was experienced recently, but in line with long-term historical growth. The study demonstrates that CO2 emissions by 2030 can be reduced by 30 percent below baseline in a cost-effective way, and by almost 60 percent if all the identified measures are included. While there is no single measure which could make it all happen, the aggregated effect of all the measures is significant. This will ensure an industry that operates in a more energy efficient manner and also accepts its share of the common responsibility to reduce CO2 emissions. The analysis has divided the world shipping fleet into 59 segments, representing the major ship types with each segment modelled separately based on operational assumptions, reduction potential and the cost of the measures. — Compiled by Frewin Francis

December 2010 | www.logisticsweek.com

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Binary Function

ccess Professional Edition from Bosch is a scalable software application and is based on its hardware platform as the Bosch Enterprise Access Control System, the Access Modular Controller (AMC). The AMC is also compatible with the Building Integration System (BIS), so one can easily add a wide range of other expansion modules and security functionality. It permits administration of up to 10,000 cardholders and 128 readers as well as the corresponding inputs and outputs. The system is compatible with industry standard readers and credential formats. It features an easy-to-use, intuitive graphical user interface adopting a client/server structure. The solution also supports integration of a wide range of access and security solutions

DC Software’s Supply Chain Analytics offers customizable management dashboards, prebuilt reports, and proactive alerts. Decision-makers can easily monitor key performance indicators (KPIs) across the supply chain,

for different situations like video verification, alarm verification, arming/disarming of intrusion systems and elevator management. Manufacturer: Bosch Solution: Access Professional Edition

select From database

upply chain specialists Labyrinth Logistics Consulting with their Logistics Buyers Toolkit offers a suite of products for customers to assist in their procurement of logistics services effectively. The toolkit includes a database of logistics service providers, vendor assurance audits, and data analysis support and specification templates. The database alone is a new tool for the logistics procurement sector, and means that Labyrinth can search for providers offering the right geographic coverage, trailer type, spe-

cialist capability and IT systems to fit in with the buyer’s requirements. Labyrinth’s expertise in consultancy to haulers and 3PLs, as well as with manufacturers and retailers, supports procurement projects as they understand the important elements of each specification and how these can affect the cost base. Through their database and knowledge, the tool can also help find alternative suppliers that suit a particular client. Manufacturer: Labyrinth Logistics Consulting Solution: Logistics Buyers Toolkit

tag Along

iemens Industry Automation Division is strengthening its RFID (Radio Frequency Identification) product portfolio in the UHF (Ultra High Frequency) range with special rugged components. The new products include antennas, a mobile reader, and extremely heat-resistant, compact data carriers in the Smart Label format. RFID systems that operate in the UHF range are successfully used in logistics, material handling, and in production due to their range. Their use provides transparency and therefore allows many processes in a company to be optimized. Manufacturer: Siemens Solution: Rugged Components for RFID

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December 2010 | www.logisticsweek.com

manage by prioritized exceptions, and drill down to the details to analyze underlying root causes. The analytics solution consistently assesses operational effectiveness and how each functional area is contributing towards corporate goals. It can be deployed and implemented quickly with comprehensive data extraction and measurements. CDC Software has created standard reports, KPIs and dashboards that comply with industry standards and support common roles in product, sales, purchasing and supply chain functions, across the hierarchy of an organizational structure. Manufacturer: CDC Software Solution: Supply Chain Analytics

In a nutshell, the conference promotes an integrated, customer-oriented supply chain by promoting best practices in reverse logistics and returns management, two areas that can significantly reduce your operational costs, and improve customer loyalty to your brands. In the world of supply chain and operations, strategies to reduce cost and ensure customer satisfaction have reached a new level of sophistication. Major brands are moving their manufacturing capabilities to Asia to reduce costs, meanwhile strengthening their customer service presence to make the most of Asia’s growing consumption power. In this process, a complete supply chain strategy that emphasizes reverse logistics and returns management becomes extremely relevant:  Streamlining processes in a stretched supply chain with multiple suppliers, manufacturers, distributors and outsourcing partners  Shortening response time to ensure customer satisfaction, while tackling transport logistics constraints given the challenging infrastructures in emerging markets

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New Products, Technologies, Solutions

Volvo Fe hybrid

ack in the 80s, Volvo had taken on the hybrid powertrain challenge. Years of research, development and testing has led to the Volvo FE Hybrid, which employs parallel hybrid technology using up to 30 percent less fuel. At low speeds the hybrid truck will replace the diesel's growl with a muted electric hum. The Volvo FE Hybrid, which will be available for distribution trucks and city buses as well as refuse trucks, will be a step towards environmentallyfriendly automotive technology. The hybrid will reduce CO2 emissions and fuel consumption by 15-20 percent depending on the application. Volvo has achieved reductions of up to 30 percent with a plug-in superstructure for waste compression. Unlike the more traditional series hybrid approach, where an electric motor alone drives the wheels and a combustion engine charges the batteries, a parallel hybrid uses either the electric motor or the combustion engine - or both together. There is a diesel engine and a gearbox, but between the clutch and the gearbox is the electric motor. The diesel and electric motors can be used independently of each other. These two power sources work on the same axle through the gearbox and that

drives the wheels. On starting the truck, the electric motor is engaged when starting off with heavy loads from zero, higher torque at lower revs. At higher speeds, the diesel en-

gine is activated and these two work together. At high speed it behaves like a traditional truck, but at low speeds it behaves more like an electric vehicle. Energy from braking is used to recharge the batteries. The task of coming up with a hybrid solution for large-scale production threw up a number of challenges, several of them connected to the battery and its control system. The battery chosen by Volvo for the Volvo FE Hybrid is a lithium ion battery, with the same chemistry as the batteries found in mobile phones and laptops, but considerably larger (it weighs about 200 kg). The 600-volt system used in the Volvo

FE requires hundreds of lithium ion cells in series. The challenge is to manage this to make it act as a robust system. To handle these kinds of electric energy levels the company has incorporated protective systems that shut down the battery and isolate it from the rest of the vehicle in case of an accident. Small-scale series production of the Volvo FE Hybrid will not get under way until 2012. At the same time, a hybrid solution for long-haul applications is being investigated. Although the potential savings in percentage terms are not as great as for urban stop-start driving, the distances covered mean that considerable emission and fuel consumption reductions are also possible on the open road. technical specifications Diesel engine: Volvo D7 Power output: 300-340 hp Electric motor: 3-phase permanent magnet synchronous electric motor 600 volts Max. power output: 120 kW Max. torque: 800 Nm Transmission: I-Shift Batteries: Lithium ion 600 V

paperIBc for handling Bulk liquids

rayling Industries with their PaperIBC introduces an environmentallyfriendly and economical IBC (Intermediate Bulk Containers) system for shipping and storing bulk liquids. The PaperIBC container has passed the ISTA (International Safe Transit Association) vibration and shock tests and has met the NMFTA (National Motor Freight Traffic Association) requirements for intermediate bulk containers for liquids. The heavy duty nine ply PaperIBC container is capable of withstanding

INDIA |

up to 10,000 lbs of compression force. The PaperIBC is constructed of a renewable resource and is completely recyclable. Unlike 55 gallon drums and other typical IBCs, there are no cleaning expenses or return freight costs associated with the PaperIBC. It requires 80 percent less space for storage and shipping than other non-collapsible IBCs. The PaperIBC can be packed flat packed when not in use and can be assembled quickly.

December 2010 | www.logisticsweek.com

In addition to the strength and durability features of the container, the PaperIBC also features a unique dispense fitment â&#x20AC;&#x153;locking ringâ&#x20AC;? that protects the fitment and liner and insures that the fitment stays secure in the correct position during the rigors of shipping and handling. For additional security, the corrugated flutes of the container are covered to ensure that the container is hygienic and contaminant free. Manufacturer: Grayling Solution: Environment-friendly IBC

g rMi er P aM P w M vav P ewa MiN Ner Por Te NTaiNaPaTN rT Ne PiPa g? gaT y TeroNTai TNaM T Ne Co iSHN ao Po PorTNdliN aTewa Nai C HNaPao Por Po kr rMug aMraal Ha dia g CHeN kriS Muga aMra Ma rT dHaTeri ed iNMiTed PorT T Mar rT dH Po PT M liMiTalS li Ndra a PorgHi PoN u Ndl T di present i and you JN iLOG.INDIA Te rMiN a MLogisticsweek r a o v M a C r i PrCal Te PaTN abg kal Po a TuT toraPerformance Excellence’, a ik iP go Ha PorT a Si Sa‘Roadmap k k arad on Indian Ports. vi Mbai orHandbook T Mu CHi P PorT P ko ldia Ha The handbook looks into all the issues related to the major Indian ports with experts’ views of a roadmap to possible solutions for ports infrastructure and performance excellence. The main topics to be covered will be:

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• Need for Mechanization at Indian ports • Draft Constraints (which hinder entry of large vessels to most major ports) • The Policy Conundrum • Regulatory Issues (The TAMP Factor) • Labor Management at Ports • PPP: Challenges and Opportunities • Major and Non-Major ports: Lessons to be Learned

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Imprint Feature

THE WORLD CLASS LOGISTICS INFRASTRUCTURE AT THE MOST STRATEGIC LOCATION IN THE COUNTRY (NAGPUR) One of the most important criteria to select the warehousing space for DC’s or RDC’s is the “Location”. A strategic Location helps the company to deliver the goods safely, timely and economically thereby saving the time, money and losses of the company. The companies who are eager to save upon time , money and losses would go for the such a facilities like Orange City Logistics Park’s (OCLP) because OCLP has got the world class Logistics infrastructure to cater to all the needs of the modern and organized supply chain systems require at the moment. At this crucial time, Modern Businesses are struggling to reduce the Logistics cost and serviceability, Orange City Logistics park (OCLP) unique warehousing facility spread over the 90 acres of lush green area at Nagpur is one –stop solution to all their worries related with Logistics infrastructure at the most affordable cost…. Warehouse measuring 1 Lakhs Sq. Ft with 10.5 Meter Height and VDC flooring is ready to occupy and the construction for another 1 lakhs Sq. ft is in full swing which is going to complete very soon. The Total warehousing capacity of the Logistics Park is more than 10 Lakhs Sq. Ft.

FMCG, PharmaceutiAs per the manageConnectivity ment –OCLP’s, further cal, Retail, AutomoAirport 12km warehouses would be tive, Electronics/ White custom built as per cliGoods, 3PL etc. Railway Station 20km ent requirements. It is bel Ample Truck and ofGumgaon Cargo Station 6km fice vehicles parking lieved that, warehousing requirements are quite area Mihan 8km different for different secl Utilities like compuDistance From NH-6 8km terized weigh bridge, tors and hence the deciDistance From NH-7 5km sion is taken to offer built commercial complex to suit (BTS) warehouses. feasting courier servIn fact, an MNC retail giant is opening its ice, stationery, restaurant, ATM, bank, RDC at OCLP’s premises – we are in talks dispensary and conference rooms. with the company and would be final- l Secured place with as 24 X 7 CCTV, 2.5 izing the deal very soon. We have also m compound wall, fire hydrant system, kept the provision of COLD STORAGES provision for fire water sprinklers, fire ratto further cater to the Pharmaceuticals ed doors and lightning arrester. and FMCG sectors. l Warehouse in OCLP is 25 meters apart “This massive expansion at OCLP will with broad concrete Roads of 12 Meters surely going to help the Modern com- providing 2 way free flow of traffic inside panies & MNC’s to reduce the cost of the park. ownership at shared cost” – claimed by Mktg Mgr Mr Zafeer Ahmed. Some of the salient features of the WareA unified logistics park of the size and houses in Orange City Logistics Park: facilities of OCLP translates into reduc- l Height of the warehouse is 10.5 meters tion in truck turnaround time and goods allowing the G+6 lavels of racking system damage, storage of more & more l The Plinth height is 1.4 Meters equipped goods in the same space and serving with Dock Levelers to accommodate all the market as fast as possible. kinds of small and long vehicles. OCLP is strategically located near to l Vaccume dewatered technology for the prestigious MIHAN project in Nag- flooring can withstand 8 -10 tons per sq. pur, the only Multi – Modal International meter load. Cargo Hub in the country at Nagpur. l 22 turbo ventilators and forced/natuOne of the biggest ad- ral vaentilators ensures a minimum of 5 vantages of the OCLP’s air changes. location is that the com- l 5% skylight allowing direct sunlight panies can distribute thereby minimizing electricity congoods to all over the sumption during day time. country and can further l glass wool insulation along with alusave on the back freight minum foil to maintain 5 to 6 oC temas Nagpur is the center perature down inside the warehouse as of India. The below table compared to outside. shows OCLP’s Connec- l A canopy of 6 m will provide protectivity from important rail, tive cover for loading and unloading even during rainy season.Ample no. of air & road points docks available for high through put of Some of the salient fea- the goods. tures of the Orange City l A separate battery charging area with 16 battery charging station is proLogistics Park: l Strategic location with vided for MHE’s. good Road, Rail and air l Spacious office floor is available on connectivity Mezzanines for company officials. l Ample warehousing With all the above specifications space for further expan- OCLP management believes that they sion will soon become one of the largest l Space for multiple cliand the most preferred Logistics Park in ents and Industries like the Country.

Ready toOccupy Occupy Available on Lease Ready Ready totoOccupy - Available --Available onon Lease Lease

Logistics Park Offers: Logistics Logistics Park Park Offers: Offers: Total Warehousing Capacity ofmore more than 10Lacs Lacs Sq.  Total Total Warehousing Warehousing Capacity Capacity of of more than than 1010 Lacs Sq.Sq. Ft FtFt Ready tooccupy occupy Build upfacility facility Lacs Sq. Ft. to to occupy / Build / /Build upup facility 1 Lacs 11Lacs Sq.Sq. Ft.Ft.  Ready Ready Construction ofanother another lacs Sq. infull full swing of of another 1 lacs 11lacs Sq.Sq. Ft Ft isFtis inisin full swing swing  Construction Construction Strategic location with good road, rail and airconnectivity connectivity location location with with good good road, road, railrail and and airair connectivity  Strategic Strategic Ample truck parking area with dormitory truck truck parking parking area area with with dormitory dormitory  Ample Ample Commercial complex featuring, ATM, bank restaurants, dispensary and complex complex featuring, featuring, ATM, ATM, bank bank , restaurants, , ,restaurants, dispensary dispensary and and  Commercial Commercial stationery shop stationery stationery shop shop Sufficient office area onground ground and mezzanine office office area area onon ground and and mezzanine mezzanine  Sufficient Sufficient Computerized weigh bridge weigh weigh bridge bridge  Computerized Computerized Fire hydrants forsafety safety hydrants hydrants forfor safety  Fire Fire Battery charging area forMHE’s MHE’s charging charging area area forfor MHE’s  Battery Battery DG for24 power back up forfor 24 X247XXpower 77power back back upup  DG DG Sky lights forminimum minimum electricity consumption and Turboventilators lights lights forfor minimum electricity electricity consumption consumption and and Turboventilators Turboventilators to toto  Sky Sky maintain temperature maintain maintain temperature temperature High compound wall forsafety. safety. compound compound wall wall forfor safety.  High High Site: Khasra No. 80, 81, 82, Shivmadka, Village-Gumgaon, Site: Site: Khasra Khasra No.No. 80,80, 81,81, & 82, &&82, Shivmadka, Shivmadka, Village-Gumgaon, Village-Gumgaon, Tahsil-Hingna, District-Nagpur(MS), India Tahsil-Hingna, Tahsil-Hingna, District-Nagpur(MS), District-Nagpur(MS), India India Office: Sheikh Fida AliSultan Sultan Ali,Lohaoli, Lohaoli, Itwari, Office: Office: Sheikh Sheikh Fida Fida Ali Ali Sultan Ali,Ali, Lohaoli, Itwari, Itwari, Nagpur (MS) 440002 Tel0712-2763079 0712-2763079 Nagpur Nagpur (MS) (MS) – 440002 ––440002 TelTel 0712-2763079 Email: zafeer@oclp.in marketing@oclp.in Email: Email: zafeer@oclp.in zafeer@oclp.in & marketing@oclp.in &&marketing@oclp.in Contact Contact Contact usus atusatat Zafeer Ahmed +91-9372636510 Najmuddin Fidvi Zafeer Zafeer Ahmed Ahmed +91-9372636510 +91-9372636510 & Najmuddin &&Najmuddin Fidvi Fidvi +91-9373102959 +91-9373102959 +91-9373102959 &http://oclp.in http://oclp.in && http://oclp.in

< primer

Back to Basics In this section, we revisit some basic concepts – everyday logistics and supply-chain terms that need a brush up (or update) every now and then.

Triple Bottom Line

riple Bottom Line (3BL or TBL) is that spot in the supply chain where economic, environmental and social benefits come together. It is an effort towards sustainable development in the area of business by encompassing the three important Ps-People, Planet and Profit. Triple bottom Line reporting hence takes into consideration the impact one’s business has in terms of social and environmental values along with financial returns.

The phrase was first used in 1989 by John Elkington, co-founder of a consultancy focused on sustainability. Coco Cola is one among the renowned companies that strives towards applying the Triple Bottom Line initiative to the maximum. They have included measures such as responsibility to the community, water stewardship, energy management and climate protection as part of their service protocol. In one of their researches conducted in

Kanban

n the mid-nineties, Kanbans were developed to control the production processes in order to implement the Just In Time (JIT) manufacturing at Toyota. ‘Kan’ is the Japanese word for ‘card’ while ‘ban’ means ‘signal’. The word is hence defined as the system whereby a control measure is implemented to release materials into the production line, only when they are needed. Here’s how it works: Let’s take the example of a factory setup that is producing basic mobile phones. There are two bins consisting of the basic system equipment needed to build the device. The first step in the manufacturing process will involve acquiring the equipment from the respective bins and assembling them together. After the assembly, the fully assembled device will get placed on a pallet. Once the pallet is full, it is moved to the shipping area. Empty pallets are moved back from the shipping area once all the devices have been shipped. This process continues until there comes a time when the pallets are empty. This is, in other words, a signal that inventory needs to be ordered and devices need to be assembled; in short that production should

be started. Thus here, the pallets function as Kanban (or signal cards) in the production process. With Kanban the chances of overproduction as well as of wastage of inventory is very low. The fact that it works as a visual signal of when production should start or stop also makes the production process it is used in, flexible. Any changes in the environment can be implemented immediately without any loss in time. At Maruti Udyog Ltd. the Kanban system is used with great precision in the manufacturing of its vehicles. Before the partially or fully assembled car arrives at the designated production line, it is simultaneoulsly assembled at some point well in advance. The car then needs to arrive at the weld-shop at a certain time of the day, and the component must reach the operator at the same time. In order to achieve this, the supplier concerned is asked to supply the material an hour before the component deadline. In this manner, the Kanban system ensures that the right part is always available at the right time. When the supply of various components is over, appropriate physical or electronic signals are sent to the supplier.

2009, they found out that packaging accounts for 30-70 percent of total emissions, thereby being the largest contributor to a product’s carbon footprint. Using recycled materials in packaging and recycling the empty container after use can reduce the carbon footprint of a product by up to 60 percent. Realising this, Coco Cola introduced PlantBottle packaging, made by using 30 percent plant based material. This bottle is 100 percent recyclable like traditional PET plastic.

Very Large Crude Carrier

bbreviated as VLCC, the Very Large Crude Carrier is a crude oil tanker designed to carry between 200,000 and 320,000 dead weight tonnage (DWT). The average size of a VLCC is 331.4 meters in length and 58.2 meters in breadth, with a draft of 21.2 meters. Its estimated barrel intake is 2,044,000 bbls and it travels at a speed of 15.2 knots. As the name suggests, VLCCs are used for the transport of huge quantities of oil. MT Desh Viraat is the largest Indian VLCC that joined the Shipping Corporation of India (SCI) in October 2009. The vessel is of 3,19,000 DWT and was built by Daewoo Shipbuilding and Marine Engineering (DSME) in the Republic of Korea.

Can you help us with more such terms – used everyday but seldom revisited? Please mail your suggestions to aanand@logisticsweek.com. If chosen, we will be happy to publish your suggestion with due credit. 68

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December 2010 | www.logisticsweek.com

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warehouse, to storage and material handling, information technology and automation of a warehouse and the grossly neglected area of security. Whether you are in the boardroom or on the warehouse floor, this handbook aims to set you thinking about new concepts in warehousing and the urgent need to incorporate them in your business.

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Page 34

VITAMIN M 26

BACKING UP 32

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Few realize the role maintenance plays in transporters’ profit margins

How reverse supply chain can make or break a company’s position in the market

Exploring oil-andgas upstream and midstream supplychain biz

The Warehouse handbook In a business environment which is slowing edging towards positivity, The Warehouse Handbook will be a welcome reference tool for the logistics and the supply-chain industry. Also, with the passage of the much-awaited GST in April 2010, warehouses will move several steps up to highly automated Distribution Centres which will impact industry’s bottom-line. The Handbook will thus give a new perspective on the subject and enable industry to streamline its operations and processes. The various chapters of the book have been written by noted specialists in the industry with the sole purpose of removing nebulousness from major aspects of the logistics business. The handbook covers the entire gamut from the present state of the industry, site selection, design and processes of a

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December 2010 03 - 06 December, 2010 InDIa retaIl Show 2010 Pragati maidan, new Delhi The Indian consumer and changing shopping patterns have paved the way for modern retailing in India. Multi-storied malls, huge shopping centers, and sprawling complexes are springing up in every corner of Tier II and III cities. Its growth in wholesale numbers for the industry in India tops the AT Kearney’s annual Global Retail Development Index (GRDI) for the third consecutive year, maintaining its position as the most attractive market for retail investment. The Indian retail market is the fifth largest retail destination globally. According to estimates the retail segment in India will grow from US$ 330 billion in 2007 to US$ 427 billion by 2010 and US$ 637 billion by 2015. Simultaneously, modern retail is likely to increase its share in the total retail market to 22 per cent by 2010. The fastest growing segments have been the wholesale cash and carry stores (150 per cent) followed by supermarkets (100 per cent) and hypermarkets (75-80 per cent). The number of operational malls is estimated to be more than double to over 412 with 205 million square feet by 2010 and further 715 malls by 2015, on the back of major retail developments even in Tier II and III cities in India. Rural retail market is estimated to cross $ 45.32 billion mark by 2010 and $ 60.43 billion by 2015 Exhibitors at the show will range from visual merchandising & design, loss prevention, in-store and POP marketing, supply chain management, back-end solutions, retail technology, software, RFID, card technologies, biometrics, cold chain, warehousing systems, material handling, testing equipment software and other services. Organized by: Print Packaging.Com Private Limited Tel: +91 11 29812934/29812834 December 8 – 12, 2010 auto 2010 Deccan college Ground, Pune India is emerging as a major automobile market. Apart from the local manufacturers, every major automobile manufacturer across the world is eying to grab their share of the market in this sub-continent. The free market promises to usher in an era of growth for this sector. With these in view, AUTO’10 – the 11th Indian Automobile Trade Fair – plans to have a grand showcase for Indian, foreign vehicles along with components, equipment, accessories and services available. The fair will project the emerging trends, innovations, inventions and developments of this sector. It will also focus on in-house developments, improved technology, and financial or technical collaborations. AUTO’10 will bring manufacturers,

INDIA |

marketers, dealers and all those who are connected with the auto industry under one roof. The 11th Indian Automobile Trade Fair, AUTO 10 will present India as an approaching hub for the international automobile industry. India is expected to be the seventh largest automotive player by 2016 and the upcoming fair, AUTO 10 will project the emerging trends, innovations, inventions and developments of this sector. Organized by: Gateway Fairs Private Limited Tel: +91 20 26054915/26054915 09 - 11 December 2010 InDIa telecom 2010 Pragati maidan, new Delhi The Department of Telecommunications (DoT) jointly with Federation of Indian Chambers of Commerce and Industry (FICCI) will hold the India Telecom at Pragati Maidan, for three days from December 9th to 11th 2010. India Telecom will provide an opportunity to interact with leading telecom companies and potential buyers. The participants will be an eminent mix of government, public and private sectors from India and overseas. The main focus area of the exhibition and conference shall be on technology development for the future manufacturers of telecom equipment so as to make India a hub for them to meet the growing domestic demand as well as an exporting base and developing supply chain of components/ancillaries, software solutions, system integrations etc. The event will provide a platform for interaction with policy makers, technology providers, R&D institutions, investors and the users/buyers. Organized by: Federation of Indian Chambers of Commerce & Industry Tel: +91 11 23738760/23738770 17 - 19 December, 2010 PharmaceutIcal exPo manipal university, Karnataka Pharmaceutical Expo 2010 will uplift the standards of science and technology dealing with the pharmaceutical industry. The gentry will include officers from regulatory departments, head honchos of the pharmaceutical industry, hospital administrations and top officials of central and state agencies. The Expo will project the latest technological developments in pharmaceuticals, drugs and formulations. It will also project the status, facilities and services on R & D, quality control, government regulations and controls, rules and procedures and on the supply of plant, machinery, process control equipment, projects and services etc. Organized by: Federation of Indian Chambers of Commerce & Industry Tel: 91 11 23738760/23738770

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