LOG.India March 2011 Issue by Frewin Francis

IndIa’s LeadIng LOgIstIcs MagazIne www.logisticsweek.com

INDIA

March 2011 Vol. 4 — No.7 October 2010 | Vol. 4 – No.2

`100

` 100

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

A MAN OF METTLE

Abhijit Chaudhuri, Director (SCM), Ispat Industries Ltd., has successfully managed Ispat‘s supply-chain under testing conditions. TElEcom low The story. Page 30 logisTics 20 THINGS TO BE 42 Movement of telecom

network equipment Experts weigh in on opens alogistics windowindustry of opportunity trends.

NEglEcTEd waTErways 44

adopTioN 24 ICTT The much-awaited VallarpadamIndia terminal is open. A report...20 Why WMSON: still does is ignoring inland notOVER have enough waterways at its own THE CUBICLE: Why cross-functional trust is critical to SCM...24 takers in India peril MOVING STORIES: The SCM of the popular online book vendor Flipkart...26

Non-compliant to new OHS regulations Inefficient warehouse Non-compliant to new planning OHS regulations Outdated storage systems Inefficient warehouse planning Labour intensive Outdated storageoperation systems Unable to meet KPI Labour intensive operation Lack of to local support Unable meet KPI Poor use of available Lack of local support headroom

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Too many error in piece picking operations Poor use of available headroom Non-compliant standards Too many error to in FEM piecesafety picking operations Non-compliant to FEM safety standards

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Answers for industry.

eDITORIAL

Humbled At The Sight

was there when it happened. On February 11, our Prime Minister dedicated the International Container Transshipment Terminal to the nation (we have a report on the event in this issue). Much like all such ceremonies held anywhere in the country, this one too had its share of drama. Since top political figures were flying in to grace the opening function, the local police bandobast was at its best and at its worst. At its best to ensure the dignitaries had a smooth entry and exit, and at crowd control – a breeze when dealing with the generally very affable Malayalis. At its worst, when it came to coordinating with the Special Protection Group (SPG) that accompanies our top leaders. Invariably, I have seen that at functions where the PM or the President is the chief guest, event arrangements are thrown out of gear the moment the dignitary arrives. Perhaps it’s by design; the SPG relies on the shock-and-awe tactic. All good, just a teensy-weensy issue: the local visitors, who clearly had travelled long distances to get a glimpse of their beloved leaders, stood for hours in the sun in a never-ending line. Since everyone – the police, the media, and the organizers – were busy doing their duty, nobody cared. And the local visitors seemed used to the disdainful treatment, so that’s okay. Aanand Pandey That tiny issue aside, this time even the media – surprise, surprise – was Editor left cooped up in a bus outside the venue because of security issues. Call me oldfashioned or a sadomasochist, but I am very pleased when those of us in the media, who see VIP treatment as a divine right, are humbled. My best moment of the day came when the media contingent, ravenous after the ceremony, was sped across in a boat to have lunch at Taj Malabar’s lush seaside garden. As the boat approached the pier, we could see the sheikhs enjoying the food and the mocktails, and just when the media-gang was ready to alight to polish the food off the gleaming plates, the boat retreated. Later, we were seen off at a faraway dock – yes, you guessed it: due to security reasons. The long trek back to the garden in the high Kochi sun worked well for my appetite. Nonetheless, the opening of ICTT is a matter of great significance on many fronts. As has been widely publicized, and rightly so, it’s the country’s first container transshipment hub. The `3,200-crore hub is a build-operate-transfer (BOT) project between Cochin Port Trust (CPT) and the container-terminal giant DP World. Currently, about 60 percent of India’s exim containers are transshipped through Colombo and Singapore ports. The Vallarpadam ICTT hub is aimed to win back some of that business. The hub brings in huge savings for shippers as well, as the authorities claim that shippers will be able to save about $300 on every container and seven to ten days of transit time. As importantly, with the involvement of a private player in running the project, it could vastly improve the performance of a key port on the southern coast of our country. Personally, I hope that the ICTT’s success in revitalizing the local economy infuses some entrepreneurial energy into a state that needs and deserves it.

Aanand Pandey aanand@logisticsweek.com www.twitter.com/logisisticsweek

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Contents 20 event report

A Symbol Of PPP For Public Good: PM

The much-anticipated Vallarpadam ICTT opened with great fanfare on February 11. The new port is expected to improve the appalling turnaround time that Indian ports register.

26 Feature

the Cart of Buying E-commerce hub Flipkart has a well-defined and structured supply-chain strategy in place.

26 20

30 Cover Story A Man of Mettle

24 Column

Achieving Integration

Ispat Industries' Director (SCM), Abhijit Chaudhuri, has constantly been working at streamlining the supply-chain. But he's not content resting on his laurels.

Indian companies need to develop a culture that encourages teaming and cross-functional collaboration. Overall performance is more important than individual performance.

24 6

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March 2011 | www.logisticsweek.com

marCH 2011 42 Feature

ADVeRtIseR InDeX

Par For The Course

3rd Annual Supply Chain Summit .............................15

The transportation and logistics sector is beleaguered with woes intrinsic to its own. Despite this, the sector is expected to witness a sizeable growth by 2020.

6th Southern Asia ................................................... 55 BLR Logistics .......................................................... 29 SSI Schaefer .......................................................... IFC Emirates Skycargo ..................................................BC Gandhi Automations .................................................11 Greenearth Translogistics....................................... 39 India Express Cargo Logistics Summit .................... 41 Innovations in Logistics Award .................................13 Macroeconomics Workshop for Logistics Decision Makings .................................................................. 51 Mahindra Naivistar ................................................. IBC

Orange City Logistics Park ...................................... 33 Radhakrishna Foodland ........................................... 53

46 panorama

Safexpress ...............................................................17 Shree Rajlaxmi Logisitcs .....................................47,49

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

Vijay Logistics ........................................................... 4 Vodafone ................................................................... 8

FeBruary 2011 IndIa’s LeadIn

MagazIne gisticsweek.com

`100 ` 100

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

TElEcom logisTics 20

58 BaCK to BaSICS We explore three terminologies - Lighter Aboard Ship, Automated Storage and Retrieval System, and Total Productive Maintenance.

g LOgIst Ics www.lo

DIA IND IA

February 2011 Vol. 4 — No.6 October 2010 | Vol. 4 – No.2

THE RISE Movem ent ofOF telecom LCL 38 network A quick, engagin equipmgent opens history of athe window evolutioof opportu n of LCL. nity

reGularS

news

60 BooK eXtraCt

Miles Ahead

Maruti Suzu ki GM (Supp Chain Divisi ly on) R. Harik umar leads a supp ly-chain

monument low al in expan se, numbers and adopTioN NEglEcTEd ambition. 24 ATWhy HOME WMS :still Why does waTErway India’s indepen not have enough Page 26 s 44 STEEL dent retailer Y should India is notignoring takers in WOND fear multi-b India ER: Unraveling the fascina waterwa inlandrand retail... SPOT OFF: ting layersys Whatever happen 18 its own ofatsteel ed to the GPS peril logistics...42 wave in India... 50

events

MARCH 2011

Measure By Measure Future demands on the global food supply will challenge abilities to provide a sufficient supply of food that is safe for consumption. INDIA |

March 2011 | www.logisticsweek.com 7

< news

TRAIN OF THOUGHT

OPERATIVE INDEX* FedEx Express, AFL, Unifreight India, AFL WiZ, Toll Group, SAT Albatros................................14

GST will integrate the logistics networks, enforce larger warehouses and lead to lower inventories. This will invite organized players into contract logistics. — uday palsule, managing director, spear logistics in an interview to The Times of India.

Indian logistics cost is higher compared to advanced countries. One way to reduce this is to promote multimodal transportation. Tax on shipping should be made at par with road and rail. The government rail operators should not be exempted from service tax. — vinay kshirsagar, cFo, shreyas shipping & logistics ltd on his expectations from the Union Budget 2011.

It is a symbol of how public– private partnership can contribute to public good. And it will be an enduring symbol of the close ties we wish to build with our extended neighbours in West Asia, particularly the UAE. — prime minister manmohan singh at the launch of the International Container Transshipment Terminal at Vallarpadam.

Concor, Gateway Distriparks, Arshiya Rail, Sical, ETA, Railway Ministry, ACTO , DIESL, Gati, TCI, Schenker, DHL......................................16 Ministry of Railways, Federation of Indian Chambers of Commerce & Industry, DHL Supply Chain, Cochin Port Trust .......................... 18 *Key entities mentioned in the news section

Inventory Spike To Hit Global Solar Supply-Chain In Q1: iSupply Globally, the days of inventory (DoI) for inputs are set to surge, and the industry could face stock-surplus issues, says Stefan De Haan of IHS iSuppli research.

hile new photovoltaic (PV) installations are expected to rise robustly in 2011, the road to growth for the global solarindustry will be bumpy, with inventories throughout the solar industry expected to surge in the first quarter because of a temporary dip in demand, according to a California, USAbased IHS iSuppli research. Stockpiles for materials and products across the PV supply chain are set to spike in the fi rst quarter, as a result of a short-term softening in demand for new solar installations. Days of inventory (DoI) will expand by 22.9 percent for

INDIA |

crystalline silicon (c-Si) modules and by 21.4 percent for thin-fi lm (TF) modules. The industry average DoI for c-Si modules in the f irst quarter of 2011 will reach 48, up from 37 in the fourth quarter of 2010. The DoI for thin-f ilm modules during the same period will reach 41, up from 32. PV modules will suffer the most pronounced jump in inventories, but solar polysilicon, wafer and cell materials also will see DoI increases. These developments serve as an early indication of a looming overcapacity situation. However, the inventory

March 2011 | www.logisticsweek.com

The subsidy-driven nature of the PV market should see it sail through rough times easily.

< news IHS believes global solar demand will rebound sharply over the course of 2011.

spike will be confined to just the initial two to three months of the year, IHS believes. “A major factor behind the solar inventory spike is the subsidy-driven nature of the PV market,” said Stefan de Haan,

senior analyst for PV at IHS. “Feed-in tariffs in many countries decreased on January 1, reducing government incentives (in various countries) to install new systems in early 2011. Furthermore, demand—usually

lighter toward the beginning of any year—also is being depressed by unfavorable weather conditions prevailing in key European countries. Combined with a less pronounced year-end rally in 2010 compared to 2009,

the slowing in demand has resulted in a pileup of inventory.” The good news is that IHS believes global solar demand will rebound sharply over the course of 2011, bringing inventory for the entire PV value chain back to relatively low levels. On an annual basis, supplier inventory will increase only slightly this year compared to 2010. The even better news is that despite these first few difficult months, the majority of manufacturers will be able to limit inventory to levels that won’t force them to cut production. DoI might reach 2009 levels, but a major inventory glut as deleterious as that seen during the first half of 2009 is not likely to recur.

COMPANY

Daimler Unveils BharatBenz Brand Chennai

aimler India Commercial Vehicles Pvt. Ltd. (DICV), a 100-percent subsidiary of Daimler AG, the world’s largest manufacturer of medium- and heavyduty trucks, has unveiled a new truck brand, BharatBenz, for the Indian market. The BharatBenz brand of trucks, to be rolled out in 2012, will offer Indian customers an entire range of trucks weighing six to 49 tons. According to a company statement, Daimler’s decision has come about due to two notable reasons — one, India is

the world’s second largest market for medium- and heavy-duty trucks. The product range in the light-duty segment is based on the Fuso Canter platform, while the heavyduty range is based on one of the Mercedes-Benz L-R: Marc Llistosella, MD & CEO, Daimler trucks platform. India Commercial Vehicles, Andreas The choice of the Renschler, Head of Daimler Trucks, and Dr. Dieter Zetsche, Chairman of Board of “Bharat” name reinforces Management of Daimler AG. Daimler trucks’ commitment to serving the local expected to grow by seven to eight percent in the next ten market. The company will roll out years, two, India has become

trucks in 2012 from its manufacturing facility at Oragadam, near Chennai. Spread over about 160 hectares, the facility also houses a state-of-the-art test track. DICV has a total dedicated investment of over `4,400 crore (approximately €700 million).

corrigendum

In the February issue, in the guest feature, ‘The Fundamental Truth’ (Page 20), the author was erroneously named ‘Ram Madhav Sarma’. The author’s name is ‘Ravi Madhav Sarma.’ We regret the error.

india is the FiFth largest commercial vehicle manuFacturer in the world 12

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< news SECTOR NEWS

FedEx Express Completes Acquisition Of AFL Businesses New Delhi

edEx Express business unit, a division of FedEx Corp, has completed the acquisition of the logistics, distribution and express businesses of AFL Pvt. Ltd. and its affiliate, Unifreight India Pvt. Ltd. The acquisition will enhance FedEx Express international and India business offerings in the Indian market. In a release issued by the company, Executive Advisor to FedEx Express, India, Cyrus Guzder, said that with this transaction, FedEx Express would now provide all international services for AFL and UFL customers. The customers will now have direct access to the FedEx international air and ground network in more than 220 countries and territories worldwide, enhancing their business flexibility and speed to market.

Hamdi Osman, Sr. VicePresident of Fedx Express (Middle East, Indian Subcontinent and Africa), said that FedEx will remain committed to facilitate the growth of Indian businesses globally. “Our ongoing investments in the country are driven by our customers’ evolving demands, thus reinforcing the confidence of FedEx in the future of the Indian market. The acquisition of the AFL and UFL businesses has en-

hanced the leadership position of FedEx in the Indian express market and offers our customers access to a range of service options, including air express, domestic ground and value added-services such as warehousing, logistics solutions and 3PL.” The acquisition will include:  AFL Logistics and Distribution, which has a range of products and services, including supply chain management,

warehousing, and a ground distribution network that provides day-definite ground transportation for small packages and heavyweight shipments through more than 200 daily scheduled routes; and  AFL WiZ Express, which offers domestic express transportation services through more than 150 Express Service Centers, servicing 144 cities. The acquisition of the businesses of AFL Pvt. Ltd. and Unifreight India, will build upon a competitive FedEx network throughout India, which includes:  31 international flights in India, which is most number of flights offered today by any express service provider in India.  Three gateways into and out of India.  12 clearance locations from Indian cities.

Toll Group Acquires Dubai-based SAT Albatros New Delhi

oll Group has acquired SAT Albatros (SAT), a Dubai-based provider of Sea-Air Services. The acquisition is expected to cement Toll’s strategic position in the Middle East and in the Asia to Europe trade lane. Building a business with a niche sea-air provider will give Toll further scope to offer its customers the opportunity to match speed to market with a cost-effective service. For customers who want to transport goods quickly but keep costs

The acquisition is expected to cement Toll’s position in the Middle East and in the Asia to Europe trade lane. down, this integrated option can offer significant cost savings over pure air freight. SAT will form part of Toll’s rapidly developing Global Forwarding division, adding further capacity to the Group

in the Middle East following the 2009 acquisition of Dubai-based Logistic Distribution System (LDS). SAT Albatros has strong links in Europe and in particular Germany, which itself accounts for a majority of volume at destination. Providing combined SeaAir logistics from Asia to Europe with its weekly sched-

uled services, SAT offers an alternative to pure air or sea freight on this route. SAT reported revenue in excess of US$40 million in 2010.

as india’s largest port, nhava sheva handles close to 50 pc oF overall traFFic 14

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< news

PCTOs Receive Partial Relief From Indian Railways New Delhi

rivate container train operators (PCTOs) have received partial relief from Indian Railways for domestic movement of commodities whose haulage charges had been hiked in December last year. The move is likely to have a positive impact on earnings of operators, including Container Corporation of India, Gateway Distriparks Ltd, Arshiya Rail, Sical and ETA. But, the amount of benefit to each operator will vary. Broadly, the Railway Ministry has said that the container operators will not be asked to pay higher haulage charges, if they load less than one third of total containers in a rake with those commodities. The container train operators pay haulage charges to the Railways for use of its locomotives, tracks and other infrastructure. For these players, the haulage charges account for nearly 70 percent of the operating costs. The Railway Ministry had increased by as much as 170200 percent haulage charges for the movement of heavy commodities — cement, stone

other than marble, iron and steel, alloys and metals, and petroleum products — by container train operators. The increase varies based on the commodity, distance and size of the container. While the increase was initially proposed for both domestic and export-import traff ic, the Ministry later exempted export-import cargo and domestic movement of ceramic tiles and white cement from the hike. The new rates were effective from December 1, 2010. The Association of Container Train Operators had approached the Railway Ministry against the move. With the Railways not reacting initially, one operator, Arshiya Rail, had even approached Competition Commission of India against the move. The move of Railways was basically aimed at discouraging container train operators from poaching what they regard as their traffic. In the latest circular, the Railways have exempted flour and pulses from the higher charges. It has also said that the

PCTOs not only have to pay high haulage charges, but also face infrastructural hurdles, which has affected business.

pre-hike charges will be applicable if less than 30 twenty feet equivalent unit (TEUs)-sized

containers are the notified commodities. One rake usually comprises 90 TEU containers.

DIESL Wins Customer & Brand Loyalty Award Mumbai

rive India Enterprise Solutions Ltd. (DIESL), has won the Customer & Brand Loyalty Award in the logistics sector – 3rd part y logistics” at the 4th Loyalt y Awards held in Mumbai in January. Given out during the Loyalt y Summit and presented by Carlson Marketing and Kamikaze B2B

Media, the awards were a basis of research conducted by A.C. Nielson. Others in the fray for the awards were TCI Supply Chain Solutions, AFL, Safexpress, GATI, DHL Supply Chain, Schenker (I) and Agility.

Fedex was indian the railways First to is equip the largest deliverycommercial vans with technology employer in tothe track world packages 16

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March 2011 | www.logisticsweek.com

91 11 26783281

91 11 26781481 82

110 037

< news

Rlys Announce New Policy Industrial Growth Seen For Connectivity To Coal Slowing In Next Six And Iron Ore Mines Months: FICCI Survey Chennai

New Delhi

here is a general apprehension that industrial growth could come down in the next six months, according to the results of FICCI’s latest Business Confidence Survey. The major concerns of the industry relates to the rising raw material and manpower costs and the threat of food inflation spilling over to the manufacturing sector. The major problem area is input cost inflation which is hitting the industry hard. Almost 90 percent of the firms that participated in the survey point to rising cost of raw ma-

terials and industrial inputs as a ‘negative factor’. Companies also have to cope with increasing demands for higher salaries and this is complicating their cost structure further. A fall out of the rising raw material prices and increasing manpower costs is the compression in profit levels. Nearly 25 percent of the companies in the survey expect profit levels to be lower next six months. The surveyed companies have asked for no further rollback of stimulus measures in the Union Budget 2011-12.

Appointments DHL appoints new Chief Operating Officer in India

Rail connection to the hinterland will provide a quicker and single means transport facilities to mining companies.

he Ministry of Railways has announced a new policy for connecting coal and iron ore mines by rail. The policy called R2CI – Railways’ Policy for Connectivity to Coal and Iron Ore Mines provides incentive to the developers by way of return of capital invested in the construction of the line over a period of 10-25 years through a surcharge on the freight. Railways will also undertake the operations and maintenance of the line at their own cost after the ownership of the line is

transferred to Railways. The policy has two models. These are: Capital Cost Model and the Special Purpose Vehicle (SPV) Model for flexibility. While the Capital Coast Model is relevant when there are two players, the SPV Model is meant to take care of a situation where there are a large number of players. This policy should enable the parties to take up constructions of the line and be free from the worry of operations and maintenance.

DHL has appointed Vikas Anand as Chief Operating Officer (COO) for DHL Supply Chain India. Prior to his current position, Vikas Anand was Director of Operations at DHL Supply Chain India. Anand, over the years has built a an efficient operations business model and in his new role as COO assumes responsibility for running DHL’s supply chain business in India, which includes all warehousing and distribution operations, business development and new projects implementation. Anand joined DHL Supply Chain as Supply Chain Manager in the Middle East, before moving to India in 2005.

Anand is a Mechanical Engineer from Delhi College of Engineering and an MBA holder from Faculty of Management Studies (FMS) Delhi.

Paul Antony is Chairman, Cochin Port Trust Paul Antony has assumed charge as the Chairman, Cochin Port Trust. He belongs to 1983 batch IAS of the Kerala Cadre. Prior to the new role, Antony held the post of Principal Secretary Power, Kerala Government. He is a Post Graduate in Economics from Delhi School of Economics and has a Masters in Public Economic Management from Birmingham University, UK.

in 2009–10, india produced 79 diFFerent minerals, barring Fuel and atomic resources 18

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< news

< interview

“Success Is The Result Of Team Work And NetWorking” Singapore-based Andersen Shipping Company Pte. Ltd (ASC) was created in 2007 as a result of a shareholder buyout by the Andersen family of Nordana (Asia) Pte Ltd, formed in 1999. ASC’s group operates in the chartering, port agency and liner services in the Singapore, Indonesia, Malaysia, Australia and China regions. In June 2009, christina andersen-martin (39) – daughter of Andersen family patriarch and company chairman, Mogens Andersen – took over from her brother Oliver Anderson (34) as the managing director of the familycontrolled business. log.india spoke to her about her experience in the shipping industry and the expanse of Andersen’s operations. An excerpt. How long has your family been in the shipping business? When did you start business from Singapore?

My family has been in the shipping business for nearly 50 years, starting with my father, Mogens C E Andersen, who will be celebrating his 50th anniversary in shipping in 2012. My brother, Oliver E Andersen and I, subsequently followed in his footsteps. In many ways, shipping Christina Andersen-Martin, has played a vital role in our upMD, Andersen Shipping bringing and it seemed perfectly Company Pte. Ltd natural to join the shipping industry as well, which I did in Houston in 1990. Our family business, Andersen Shipping Company Pte. Ltd (ASC), was created in 2007 as a result of a shareholder buyout by our family of Nordana (Asia) Pte. Ltd, which was also established in 1999 by my father, my brother and Dannebrog Rederi of Denmark. You took over as managing director of your company in June 2009, succeeding your brother. It is rare to have a woman managing the male-dominated shipping business, especially in Asia. What has your experience been like considering that this is a male-dominated business? In what capacity were you working when you started off?

I imagine, managing a family shipping business as a woman is quite similar to a male family member given the same tasks and responsibilities. We are living in modern times today. Women are capable of achieving comparable respect and also prove they are equally competent, provided they are able to give the same dedication, inspiration and skill as a male counterpart. I also don’t believe successful corporations are run with complete autocracy, rather success is the result of team work and networking, which acts a support to the MD of the company. As for my personal experience, it was a very smooth transition, also because of my supportive team of colleagues. So over the years, from your experience in the liner business, what would be the main challenges that you would like to enumerate?

Our break bulk/project liner services ASCL are regional services between S.E. Asia and Western Australia. Operating the services requires extensive understanding of the various economies, along with an understanding of the consequences of the ever occurring fundamentals in the countries which are covering our regional trading area. Low freight rates and increased frequency are both important requests from our clients. However, the ever-increasing operational costs due to bunkers and currency fluctuations, can make such requests highly unachievable at times.

From your experiences and learnings from the challenges you’ve faced, how do you provide a competitive edge to your line of services?

The main challenge at the moment is primarily due to the global depressed market conditions which have, all of a sudden, put Western Australia on the map. Previously, Western Australia was considered a niche market and it has now become a magnet for many multipurpose owners and operators due to mining, oil and gas activities. Subsequently, the rates have fallen dramatically. Therefore our main challenge is now maintaining customers relations and juggling lower freight rates/frequency over higher operational expenses and competition. You expanded your agency network from Singapore-Indonesia to include East and West Malaysia in 2009? What were the reasons behind the move?

The expansion to East and West Malaysia seemed natural as we wanted to be able to offer the same services in Malaysia as in Singapore and Indonesia. In addition, we have also formed a network called “MAP.” The MAP network consists of Marcons Ship Management Pte. Ltd., ASC Agency Pte. Ltd. and Polaris Shipping Agencies (L.L.C.), with each company servicing ports in south Asia, south-east Asia, and the Middle East respectively. We can guarantee a seamless journey across the south-eastern hemisphere as a result of the communication and reliability facilitated by creation of the MAP network. Singapore appears to be an attractive destination for shipping companies and more companies are moving teams or offices to Singapore. ASC might see some of its business moving to competitors. How do you plan to counter this?

In all honesty, we have already lost the support of a few owner principals in ASC Agency. As you very correctly mentioned, Singapore is an attractive country in which to open a branch office whether it is by owners or brokers and we have seen that trend occurring increasingly over the past 10 years. As such several in-house agencies have been formed, which eventually have led to ASC Agency losing some clients. Through our marketing department, we hope to be able to attract more support among Indian ship-owners for bunker or cargo operation calls whether in Singapore, Indonesia or Malaysia. A few months ago, India’s Shipping Minister invited Singapore companies to invest in India’s ports sector. How do you see India as a market for shipping companies? Any plans for an India foray?

With India as a major emerging and developing country in Asia, I foresee that many positive changes will take place within the Indian shipping industry over the next decade. Expanding deep water east coast Indian ports along with increased moduled manufacturing, catering to heavy lift/project shipping on the west coast of India, is what we expect to see in India in the future. We are also in the process of studying reports for expanding our interests in to India.

es INDIA |

March 2011 | www.logisticsweek.com 19

< EVENT REPORT

Vallarpadam

a Symbol Of ppp For public Good: pm The long-awaited ICTT opened on February 11 amid much fanfare and rightly so as it promises to boost India’s shipping-business stature.

K.K.Krishnadas, CEO, DP World Cochin, at the ICTT launch ceremony.

al Bahadur Shashtri, the Shipping Corporation of Indiaowned container ship named after one of the most courageous Indian Prime Ministers, docked at Vallarpadam International Container Transhipment Terminal (ICTT) on Friday, February 11. The ship – that has a capacity to load 1,869 standard containers and requires a draft of just 9-10 meters to dock – would then move to Colombo and onward to Jebel Ali. This was the first official docking of a ship at the long-awaited

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March 2011 | www.logisticsweek.com

ICTT, to be operated and known as DP World Cochin. The same day, Prime Minister Manmohan Singh dedicated the terminal to the nation in a ceremony thronged by dignitaries from across the country and graced by the priests of the church that nestles peacefully on the Vallarpadom island – the historical church of Our Lady of Ransom built by Portuguese missionaries in 1524. Many miracles have been attributed to the church. Looking at the various ups and downs that marked

the development of the ICTT, the opening on February 11, could be deemed nothing short of a miracle.

The Moor’s First Sigh Dr Manmohan Singh together with DP World Chairman Sultan Ahmed Bin Sulayem had laid the foundation stone for the Vallarpadam International Container Transshipment Terminal (ICTT) in February 2005. This was done amid much media speculation and political stirrings that followed the awarding of the Container

From L to R: Mohammed Sharaf, N Ramachandran, Sultan Ahmed Bin Sulayem, Jamal Majid Bin Thaniah & Capt. Anil Singh, at the press conference. Terminal to DP World on a Built-Operate-Transfer (BOT) basis. Last month, the Prime Minister dedicated ICTT to the nation praising the virtues of the PPP model. “The ICTT at Vallarpadam is a symbol of how public-private partnership can contribute to public good,” said the Prime Minister in his speech. As is known, ICTT is built under a public-private-partnership (PPP) between DP World and the Government of India, with Container Corporation of India (Concor), Transworld and Chakiat strategic partners in the venture. The Cochin Port Trust, on its part, took on the responsibility to develop road, rail and other infrastructure to connect the Terminal to the hinterland. The ICTT has been built with an aim to gain back the 60 percent of India’s export and import container business that is otherwise transshipped through Singapore and Colombo. According to industry reports, the detour through these ports costs the shipping industry an extra $300 per container and additional 8-10 days of transit time.

Now the largest single-operator container-terminal in the country, ICTT was built at a cost (including other infrastructure facilities such as road and rail connections) of more than `3,000 crore ($600 million). With the opening of the new facility, container handling will move entirely to DP World Cochin from the nearby Rajiv Gandhi Terminal. The older facility may be converted by Cochin Port Trust to handle greater volumes of non-containerized bulk cargo. DP World Cochin will be completed in three phases. In the first phase, the 600-metre-long quay with a draft of around 14.5 meters will be able to simultaneously serve several of the world’s largest container ships - those with a nominal capacity of around 10,000 TEU (twenty foot equivalent container units) - with capacity to handle one million TEUs annually. Capacity will expand in line with market demand, increasing to around 1.5 million TEUs in the second phase; once fully commissioned, capacity will be around 4 million TEUs. The Government of India has

"Kerala, with its huge diaspora of skilled and enterprising workers, engineers, doctors and other professionals, is ideally suited to become the gateway for investments from countries such as the UAE." — Prime Minister Manmohan Singh

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< EVENT REPORT

From L to R: Mohammed Sharaf, N Ramachandran, Sultan Ahmed Bin Sulayem, Jamal Majid Bin Thaniah, Capt. Anil Singh.

Launch of The Ports Handbook The Ports Handbook published by Hamburg Media Group was released at the opening of the Vallarpadam ICTT on February 11, 2011. The book gives a crisp view of some of the problems plaguing Indian ports.

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also constructed a four lane national highway connecting the terminal to the rest of India. A new 8-kilometer long electrified rail link will allow 15 trains to serve the terminal daily, connecting customers directly with India’s national rail network. The dignitaries present at the opening included, besides the Prime Minister, Defence Minister AK Antony, Shipping Minister G.K. Vasan, Kerala Chief Minister V.S. Achuthanandan, Cochin Port Trust Chairman N Ramachandran, DP World Senior Vice-President and Managing Director Anil Singh, DP World CEO Mohammed Sharaf and Dubai World Chairman Sultan Ahmed Bin Sulayem. "This is a great day for Kerala and the country at large. I thank the Prime Minister for the Center's role in realizing a great dream," said Achuthanandan.

He expressed hope that the families that have given up their land for the project will be suitably rewarded with employment in the new facility. Mohammed Sharaf termed the opening of India’s first transshipment terminal and gateway hub as an historic event. He said that the Terminal’s services and facilities would provide an outstanding option for shipping lines looking to tranship in the region. Later, at the press conference organized by DP World and the Cochin Port Trust, in response to a question from Log.India about how the ICTT will help in improving the appalling high Turnaround-Time (TAT) that Indian ports register by global standards, Anil Singh expressed his commitment to global norms and said that within a short period of time, the ICTT will achieve the ‘global best’ on ports-performance benchmarks.

< < OpiniOn OpiniOn

Changing The Game Sharing of information between various departments along with cross-functional trust is critical for effective supply-chain management. Rakesh singh Director and Professor of Economics and SCM at Durgadevi Saraf Institute of Management, and Chairman, ISCM

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IndIan fIrms have realized that adopting supply-chain management as a strategic competitive advantage tool can have early payoffs. But it is unfortunate that much of this effort is not effectively directed or fully understood. The result is a growing gap between firms that truly understand and implement the concept of effective, forward-looking supply chain management and those that simply follow the trend, and withdraw after initial gains. among firms that do better, information technology plays an important role. They realize that early efforts cannot be maximized without the technology that accurately links supply with demand. But this is not as easy a process as it sounds. If the supply-chain really is a mechanism of fulfilling demand, then an

March 2011 | www.logisticsweek.com

uninhibited flow of information is mandatory. Why then do firms fail to capitalize on the use of information technologies? What inhibits this seamless flow of information across the supply-chain? What lessons can be taken from those firms that have been able to use IT successfully to add value and create a sustainable value chain?

how To Function Optimization requires reliable electronic data interchange across the entire system; a single bottleneck impeding information transfer puts the entire network at a disadvantage. moreover, it is only when the firms begin to consolidate the supply chain that they realize the limitations and constraints present in the organization.

In a bid to iron out these constraints, an increasing number of companies are looking at their operations in terms of a pipeline that manages the flow of materials from the source to the ultimate consumer. Though not entirely new, the pipeline idea is perceived as an analytical concept that transcends the internal political boundary of the firm, and achieves a quantum leap in functional integration and operational effectiveness. however, it is debatable whether this truly happens. most businesses throughout the world organize their people and manage their activities through functional groupings â&#x20AC;&#x201D; sales, marketing, manufacturing, finance, distribution, and so forth. a primary goal of this function is to develop an efficient way to execute their work. The people in these functions become experts and seek to achieve superior performance in their functions. Today, this is termed as functional excellence. functional excellence is typically measured by higher sales, lower transportation costs, lower inventories, or better control of operations. But these pursuits for functional excellence have become the biggest hurdle for the firms to move to more advanced levels of supply chain gains. functional excellence was all right when demand was certain and the customer lived in the sellersâ&#x20AC;&#x2122; market. as markets became dynamic, characterized by demand uncertainty, significant seasonality, short product life cycles, or high competitive intensity, functional excellence was a hurdle.

The Requirements These practices of business excellence have created invisible walls within the political boundaries. each department tries to compete with the other-the internal competition leads to a situation of one-upmanship. This affects the flow of information and material through the organization. In a volatile and dynamic environment, the need of the hour is to manage demand by planning supply to reduce inventory, both inbound and outbound. There is a need to share the information that each department has. for instance, the marketing and sales department needs to pass on its knowledge to purchase and manufacturing as well as the supply chain. This will only happen if each department has the overall business objectives of the company in mind, rather than its own performance. This means that cross-functional trust and faith are necessary. But often, there is a lack of trust among these departments. finally, even though the departments do better individually, business suffers. here is a case in point: In an agro-chemical firm for which I did a study of its supply chain, I found that there was a complete absence of this trust between functional

areas. The supply chain department was insensitive to the demand of the sales force for a product and went on feeding wrong information about the availability of the product. The sales force went ahead promoting the product. When its supply was outsourced from a european country it was clear that there was shortage of this chemical worldwide. The net result was wastage of money, time, and loss of market. What was surprising here was that this very chemical was available in another region where demand for the product had declined the previous season. The trust and sharing of information would have increased the velocity of product movement, and would have reduced inventory in one place and shortages in another. Therefore, companies that organize for functional

Functional excellence is measured by higher sales, lower transportation costs, lower inventories, or better control of operations. integration will almost certainly outperform those that organize for functional excellence. But how should a company bring about this functional integration? There is no silver bullet answer for ways to achieve functional integration. rather, one must address all aspects of a companyâ&#x20AC;&#x2122;s operations, as follows:

1 manage the process, not the function. 2 align measurement systems with overall goals. 3 Use integrating mechanisms such as the sales and operations planning meeting, cross-functional teams and the team problem solving approaches. Work to develop a culture that encourages teaming and cross-functional collaboration. This can be accomplished through a variety of initiatives including mission/value statements, recognition of teaming efforts, and designing career paths to involve multi-functional assignments. all these will lead to creating a useful information technology architecture. firms, which have done this first, have been successful in integrating information technology with their organizational design and hence reap value and dictate the industry structure.

The author can be reached at rakeshparas@gmail.com

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March 2011 | www.logisticsweek.com 25

< FeaTure

Not Only Words Flipkart must be doing things right considering it is the largest online book store in India today. Remya Philip finds out the workings of Flipkart's supply-chain.

he role of logistics in the successful functioning of an e-commerce venture is indispensable. You could get everything right but if you don’t have the logistics in place it could prove fatal. The manner in which logistics is handled differentiates one online retailer from another, and this could be, as we’ve learnt from Flipkart, an edge over competitors. According to media reports, in 2010, the size of the e-commerce market in India was around `9,500 crore, of which the pure play online shopping market was worth `1,300 crore. While online shopping glo-

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bally is growing at around 8-10 percent, in India the growth rate is upwards of 30 percent. However, while India’s presence in the e-commerce industry is positively on the rise, online shops like Flipkart are way ahead of their time.

The Tale Of The Cart Flipkart was founded in 2007 by Sachin Bansal and Binny Bansal, friends and classmates at IIT (Delhi) and Computer Science graduates. They had planned to start a shopping comparison engine but research gave them an insight into the inability of the Indian e-commerce companies

to provide prompt customer service. Their research led them to the discovery that e-commerce was plagued with problems like wrong product deliveries, delays, poor customer support, among other things. So they moved to starting an online store. As the website would initially sell only books (more categories were added much later), Flipkart seemed an apt name as ‘cart’ is a familiar shopping term and ‘flip’ refers to flipping of the pages of a book. When starting out, the young Bansals had a vision: To be one of the largest multi-category e-commerce destinations in India, with a strong fo-

in cites that house their warehouses. Having a wide reach, Flipkart ships products to all parts of the country. Sachin says, “We have tie-ups with more than 15 courier companies who deliver our products. To places where couriers do not go, we use the Indian Post.” Blue Dart, First Flight, Fedex, Aramex and Professional Couriers are some of the courier services used.

The Supply-Chain Story

The home page of the Flipkart website.

cus on customer service. This cannot be achieved with selling only books. But they were sure of requiring a sound strategy behind every category they would venture into. So they set about building a bandwidth in terms of people and technology, and new product categories. Says Sachin proudly, “Today we are the only online store with a 24*7 customer support team. We started with books and have now moved into various other categories in a span of just three years. We are on track to achieve our goals and will keep adding more categories.” Their user base consists largely of people belonging to the 25-35 age group, English-speaking, urban and semi-urban internet users. With the introduction of cash-on-delivery, more students without access to cards have started using Flipkart. Sachin said, “We started with books because they are a comparatively easy category of products to sell online. They do not require huge inventory maintenance, are easier to negotiate supplier terms and profit margins are high.” Also since books are low value items, inducing customer trial was easy. It was a safe option to start off with books, given their appreciation in e-commerce the world over.

The database of products has been created through tie-ups with various distributors of products. The company has established a network of 500 distributors and only stock frequently ordered items. The ‘long tail’ items are almost always sourced from suppliers in real time and as and when the customer places an order. The success of the venture can be gauged from its revenue in fiscal year 2009-10. The company posted revenue of `25 crore and is expecting to hit `100 crore this year. "We are the largest online book store in India in terms of revenues and number of books sold," says Sachin. Today, Flipkart sells CDs, VCDs, DVDs, games, software and electronic gadgets like computers, laptops, gaming consoles, cameras and mobile phones.

Infrastructure Build The Bansals manage their daily operations through four offices located in the four metros, and a team consisting of more than 500 employees. The warehouses are also located in the same cities as the offices. For areas in which warehouses are not present, items are shipped from the warehouse situated closest to that particular city or town, with all the other processes remaining similar to those

Buying a book online is easy. You visit the website and select the product(s) from various categories and options. Once the item is chosen, you enter the phone number and the address where you’d like the delivery to be made. There are various payment options to choose from —credit/debit card, net banking, cash-on-delivery, cheque/ DD and money order. The supply chain of all the products is more or less the same. Any difference involved would be at the packing and shipping stage. For example, mobile phones make use of bubble wraps and other buffers for safety during transit so that they reach the customers safely and in good condition. All items, especially the electronic products have transit insurance against theft and damages caused while in transport. As for the cost, the customer pays only for the product. Flipkart bears the cost of delivery and this works as an incentive for them to improve efficiency at every point in the supply chain. The expected time of delivery is mentioned against each item on

We diffe on t cus we and ingr

Flipkart SCM: at a Glance Company's total revenue in financial year 2009-10 was `25 crore and is targeted to hit `100 crore in the next financial year. n S ells books, music CDs, movie VCDs and DVDs, games, software and electronic gadgets like mobile phones, laptops, etc. n C urrently has four warehouses in Delhi, Bangalore, Mumbai and Kolkata. n T ie-ups with more than 15 major courier companies. n 24*7 customer support team. n

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< FeaTure gard to delivery of an item or addressing grievances. This could pertain to a delayed delivery by the logistics partner, or addressing issues when an incorrect product is delivered. In the case of electronics, warranty and after-sales service is largely the responsibility of the manufacturer. Flipkart does however facilitate interaction between the customer and manufacturer/service center as and when the need arises.

FLIPKarT'S SuPPLY-CHaIN FLOW

Flipkart alerted of the order.

Customer places order at home.

Inventory picked up from warehouse. Delivery made by courier,Indian Post, etc.

the website. Using services of courier companies, the Indian Post and in some cases, their own internal logistics arm, the product is delivered to the customer. The delivery time varies between less than 24 hours and 3 weeks depending on the location and availability of the product. If the product has to be imported into the country, it would take between two and three weeks, given that they arrive from the US or UK, and are then shipped across to the customer. The inter-city, trans-zone deliveries are made using air cargo. For satellite cities and others in close proximity, products are transported overnight by train or truck. The Government postal system manages deliveries through their respective channels and transport system. In cities where Flipkart has its warehouses, delivery is on a two-wheeler or bicycle or foot for the shorter distances; many of the local deliveries are made on the same day as on which the order is placed. The company has trained all its team members to be efficient, organized and quick, in order to meet customer expectations.

Systems In Place Commenting on inventory, Sachin

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says, “People who visit our warehouses compare it to a very large library. Our sales predict our inventory, and our inventory fulfills the bulk of all sales.” The warehouses are split into multiple areas — inventory, packing, shipping and so on. The stocks are replenished every 24-48 hours. Internally, Flipkart has details of all orders and shipments that need to be carried out. They have an understanding with their associates for tracking systems, reconciliation and MIS (Management Information Systems) reports. The private courier companies in turn have a shipment tracking ID or an airway bill number linked to every package. The customer is also updated about the status of his shipment via email or on the website. The long-term relationships with the shipment companies also help them manage reverse logistics effectively. In an event a product needs to be returned, their understanding with courier partners ensures it happens successfully. “Given that such cases are few and far between, it plays a very small role in our day-to-day operations,” adds Sachin. Flipkart takes care of the aftersales needs of its customers with re-

What’s In Store Sustaining an online shopping venture is no easy task, more so in a country where e-commerce is nascent. According to Sachin, there are a few structural issues that need to be resolved for e-commerce to take off. Increasing internet penetration would make online retailers accessible to a large number of potential buyers. Although things are looking better with increasing broadband connectivity and lower costs for accessing the internet, the pace needs to improve. A major challenge is that online retailers depend on a network of offline service providers (suppliers, logistics service providers, etc.) whose service delivery is not amongst the best, thereby affecting the service of Flipkart and other such online stores. The solution would be to educate offline partners, suppliers and vendors about the benefits of using technology and to provide them with incentives to adopt technology and improve customer focus. Flipkart’s competitors are other ecommerce stores like infibeam, rediff, indiatimes, indiaplaza, etc. “We have always differentiated ourselves on the basis of superior customer service. It is what we focus our efforts on and this is ingrained in us,” asserts Sachin. So as the cart gets bigger and better, more Indian shoppers are likely to get wooed into becoming flipkarters, a term that might soon become the in-thing.

Material Management

Logistics

Warehousing

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

Visakhapatnam Special Economic Zone, Duvvada, Visakhapatnam-530046 www.ows.net.in Fax: +91-22-27612008 info@ows.net.in Navi Mumbai Mumbai Chennai Delhi Visakhapatnam Mundra Dubai Oman Houston TX

< Cover Story

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Abhijit Chaudhuri, Director (Supply Chain Management) at Ispat Industries Ltd is resilient, and he needs to be. Having successfully finetuned the supply-chain of Ispat, he is now set to meet the rising SCM standards post the JSW-Ispat deal. Jayashree Mendes digs deep.

abhijit chaudhuri, director, (Supply chain Management), iSPat iNduStriES Ltd.

he last couple of years have been tough for Ispat Industries Ltd. Reports of the companyâ&#x20AC;&#x2122;s acute cash crunch that led to decelerated production at one of its manufacturing plants, not to mention the continuous losses the company has been posting, abounded. Relief came sometime at end-December when Sajjan Jindalâ&#x20AC;&#x2122;s JSW Steel acquired a 41 percent stake in the company.

Photos: Vikram Barwal

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< Cover Story Since ensuring consistent supply of raw materials is the supply-chain department’s business, the man at the helm of the supply-chain, Abhijit Chaudhuri, Director (Supply Chain Management) at Ispat Industries Ltd, has often been put to the test. There has been a need for constant innovations and solutions. He attributes it to his 30-odd years of experience in supply-chain in vari-

ispat ScM: highlights Company turnover: `10,576 crore (FY2009-10) Manufacturing Plants: Dolvi and Kalmeshwar in Maharashtra raw Materials Sources: NMDC, Rajasthan State Mines and Minerals limited (RSMML), Global Coke, China Mineral Company, and small mining companies in Brazil, Alexandria, Mozambique LSPs: Indian Railways, Sical Logistics, SKS Logistics, Credence Logistics, GAF Corporation of India, Lufthansa, Transport Corporation of India, Associate Road Carrier, Hyundai Shipping, GE Shipping, Tata NYK technology Providers: SAP, Cognos, PPMS Large Customers: Uttam Galva Steels Ltd., Bhushan Steel, Tata Motors, Balmer Lawrie-Van Leer Ltd, JSW Steel

Steel Complex

Besides that, the management of shipping vessels (Ispat has two), jetty, trucks, reverse logistics, getting the feed mix right, and managing cash flow also falls under Chaudhuri’s jurisdiction.

ous industries and his innate nature of continuously innovating systems and processes. His comprehensive knowledge of supply-chain is much sought after at supply-chain events around the globe, thus helping him slip into the role of an orator easily. As Director of SCM at Ispat, Chaudhuri manages much more than just the supply-chain. While his main task is to ensure regular and prompt availability of raw materials for production of 3.2 million tons per annum of steel, Chaudhuri keeps a sharp eye on ownership of various mines, or their acquisition. This could be through the government route, where they could be leased out or purchased. This is critical because production at a steel plant must continue 24x7. In his words, “We have long-term contracts with several suppliers for procurement of raw materials. Essentially, steel plants must have their own coal mines, shipping lines (if affordable), and infrastructure for transport, which would involve jetty, or port or railway sidings, or one’s own fleet of road transportation.”

Promising Start Managing the supply-chain at Ispat may be Chaudhuri’s first stint with steel, but his perspective of running its operations smoothly comes from years of experience. The mechanical engineering from IIT (Kharagpur) landed his first job with Union Carbide as project engineer in 1976. Two years later, he was offered a choice of joining the maintenance or materials management department. “Supply-chain was not a career I had in mind; it chose me,” he says. It would be apt to say that it grew on him. Beginning with designing the large engineering stores, he was part of the project that undertook intelligent numbering of units, and all this using an IBM mainframe. There were no PCs then. “I soon understood how materials management holds the

Integrated Process Flow

the Making of Steel: the Integrated Process Flow Electric Arc Furnace Steel Refining Iron Ore Laminar cooling

Coal Injection Continuous Casting

Rolling Mill

Computerised control

Downcoiler

Direct Reduction Iron Coal HR Coils

Lime Stone Blast Furnace

Pig Iron

Source: Ispat Industries

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Confidential and for Limited Circulation only. Reproduction Prohibited without Permission.

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< Cover Story

Source: Ispat Industries

Ispat Industries' manufacturing plant at Dolvi, Maharashtra

business together. Back then, materials management was thought of as a support function,” he recalls. It was also the beginning of liking supply chain management. From procurement of parts, he moved to procurement of products and from there to material planning for the main plant which meant planning the formulation unit and knowing the different materials that need to be brought in for the feed mix. The offer from Thermax as materials manager blended well with his earlier role. He was led to the large boiler division that called for heavy engineering and fabrication. An added responsibility here was transportation. “Transportation for a project management company is complex. Sometimes, one has no inkling of the shape of the goods to be transported. Project logistics was a non-existent term. So I had to check for routes as the constraint here was the size of the equipment,” he adds. When Thermax established a joint venture with the US-based Babcock & Wilcox, Chaudhuri was elevated to Global Integration Manager for Babcock & Wilcox. As part of worldwide

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sourcing, he was responsible for the supply management of materials for their Asian projects. That brought in the element of global supply chain in his job profile. Having spent about 20 years in employment, Chaudhuri was bitten by the entrepreneurship bug. The early winds of ERP (Enterprise Resource Planning) had just begun blowing into the country. Smiling, he says, “Shaw Wallace saw something interesting in me. They wanted me to manage their SCM and since PricewaterhouseCoopers (PwC) was working on their ERP, I helped them design it. That pushed me into IT development and developing various smaller software that sits on the ERP.” Having earned a name for himself, Blue Star invited him to design an IT blueprint and on its completion, requested him to launch their supply-chain. With four manufacturing units, the role called for setting up a central procurement cell, something that the company lacked, managing the purchase integration, and the finished goods distribution system. That required a strong IT backend. Beginning with managing

the distribution of 100,000 units per annum, by the time Chaudhuri left, Blue Star was distributing 500,000 units and was a `2,000 crore company from `500 crore. Chaudhuri offers an insight: "Working for an electronics company, I learnt that a company’s pedigree is judged from the serviceability of the product." In 2007, Ispat was looking for a supply-chain head to bring in a strategic synergy across its plants. The job was intriguing in that despite vast opportunities there were delays. “Ispat sourced its raw materials from far off places. We needed to ensure consistent and immediate supply of raw materials from nearby locations and within a given budget,” he says.

Material Concerns The supply-chain of steel has two aspects. One is of the raw materials that go into production; the other is that of finished steel. Ispat manufactures various types of steel like hot-rolled, sponge iron or direct reduced iron (DRI), and compact strip production. Steel is produced at two plants in Dolvi and Kalmeshwar in Maharashtra. The raw materials (coal, coke,

Sponsors

< Cover Story iron ore and dolomite) are sourced from around the world, and also locally. While limestone comes from Jaisalmer, iron ore is brought in from Hospet or Donimalai in Karnataka, and dolomite from Karnataka. Other sources are NMDC in Chhattisgarh, and mines from Brazil, Alexandria, Mozambique and Columbia. Ispat requires about 80,000 tons of coke every month. It sources about 10,000 tons from domestic suppliers and 70,000 tons from overseas. Since the raw materials are fragile in nature and inclined to decrepitation, Ispat has created a system of feeding the raw materials directly from the jetty into the plant. Two cross-country conveyors, having a capacity of 10 million tons, carry the materials to the plant. Dumping the material onto the belt calls for skill as it must retain its original form and size. Iron ore lumps must not take on the form of fines in transit. The company requires about 4,000 tons of raw materials per day. Chaudhuri says, “Movement of materials is done through dumpers and empty loaders. We also use the services of the Indian

Railways. As we don’t have our own siding, we use railway sidings of private container train operators and Concor which bring in the materials to Pen or Roha.” There’s a rule here. Each time a rake brings in the material, the supply-chain team must get it cleared in five hours. This is a Railways' restriction. Otherwise, the railways are likely to lose traffic on that route. Nonadherence of this can mean payment of demurrage to the Railways. Thereafter the material has to be moved out to the plant within 20 hours. For the job, Ispat has signed contracts with various companies owning material handling equipment. The job calls for quickness as the materials are prone to contamination. For instance, if one wagon has brought in iron ore lumps and the next wagon iron ore fines, the two cannot be mixed. The company manages all this through a well-documented Standard Operating Procedure (SOP). Loss of material, especially iron ore fines, in transit is not uncommon. Chaudhuri has hired teams who plug the holes in the wagons to minimize

ispat: New Frontiers The ﬁrst priority of steel manufacturers is to secure a steady supply of raw materials for continuous production. Simultaneously, there is always a move to bid for mines that would make them self-reliant. Likewise, Ispat Industries has embarked on an ambitious plan to bid for coal blocks and mines that would give them access to coking coke, iron ore and dolomite. Currently, dolomite is sourced from Jaisalmer. The company was awarded an allocation in the form of a joint venture with four companies. Meanwhile, one of the JV companies got into a litigation and that plan has been held up. Its application for mining dolomite is being scanned by authorities and a nod should come soon. The good news for Ispat is that it has received permission to set up its own railway

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siding near the plant. Meanwhile, Ispat was awarded a prospecting license for an iron ore mine in Dhamkowadi in Nagpur. The company is expecting permission to start mining activity soon and expects to extract about 2 mtpa of iron ore. There are two challenges here: The area has seen frequent disturbances often caused by the locals living there. Also, the company will have to spruce up road transportation measures as the mine is located 200 km from the nearest rail head. In terms of access to more raw materials, Ispat has tied up with small mining companies in Brazil for iron ore and Mozambique for coking coal. The company expects to move ahead now that it has ﬁnancial backing from JSW Steel.

March 2011 | www.logisticsweek.com

loss. “As a result of this, our transit loss is less than one percent. This is a tremendous achievement for us,” says Chaudhuri proudly. Ispat also uses trucks to bring in material, a least preferred mode of transport, though much in over-use. Chaudhuri says, “Not only is it polluting, it also destroys the roads. We had a problem with the turnaround time of the trucks. The in-plant materials people were entrusted with the responsibility of meeting a performance standard and reporting the time taken by every truck entering or leaving. For instance, we brought in scrap from the ports (JNPT, typically) in a container. Then we realized that trucks could manage to bring in the material in four hours. That is how we got the turnaround time.” A recurring problem that Chaudhuri has to keep in mind is the fes-

A worm's eye view of the steel plant at Dolvi.

Source: Ispat Industries

tival days in Maharashtra where the plants are located. During those days, movement of trucks is barred for days, and sometimes even night movement is restricted. He had to work around a system and streamline the supply-chain in such a manner to insure full capacity of truck movement prior to the festivals. The inaccessible locations of the plants have time and again compelled the supplychain director to devise ways of moving materials. Chaudhuri is also concerned about gas procurement, as fuel runs the furnaces at the plants. Gas is mainly sourced from Reliance and GAIL. The density of the gas has to be right otherwise it could mean problems during production.

Power to the People For managing the transport of raw

materials that come in by road, rail and sea to the plant, Chaudhuri has helped form strategic alignments with local companies. In the big league, it has tied up with Sical Logistics for stevedoring and SKS Logistics for its barge facilities. Shipping companies transport material from nearby countries and domestic locations. As a precaution, Ispat has covered its road transportation vendors under a service level agreement that makes it mandatory for them to disclose the delivery time against the loss of material in transit. Outsourced manpower is covered under different types of contracts. The work of its manpower could range from movement of coils in the outbound yard, handling of raw materials inside the plant, movement of raw material to the plant, among others. However, Ispat has

been careful to retain the core system of manpower that manages the production on its payroll.

How Much Do We Need Manufacturing steel is not akin to a television, says Chaudhuri drawing a comparison. The supply-chain has to take into consideration the lead time of material to be imported, since importing coke from South America could take up to 120 days. So forecasting the procurement plan would run from one quarter to the next. This plan will offer insight into the amount of inventory that is going to be blocked in terms of both tonnage and funds. Demand forecasting is a crucial aspect of the supply-chain. Manufacturers cannot afford to retain inventory. Production of steel is based on the orders that the company has received. Chaudhuri manages a monthINDIA |

March 2011 | www.logisticsweek.com

< Cover Story ly business plan for the production. As a long lead item, manufacturers know in advance the type and grade of steel it needs to make. Mid-month corrections that occur would be in terms of product configurations. Forecasting also applies to making available the feed mix for the various types and grades of steel. The ingredients must have the correct proportions. Once the production department has handed over the required feed mix to the supplychain, availability can be managed. Chaudhuri says, “The consumption plan will give me the material planning structure, which will tell me how much material I need to hold in stock. Sometime ago, we used IBM’s help to create a prototype to help us get this right.”

It Does It

For equipment maintenance, we approached ABB as it has a structured approach of getting maximum output from its equipment. ABB mapped out the performance of our equipment and rated them.

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March 2011 | www.logisticsweek.com

The entire IT system works on SAP. Besides this, the company has several support systems packages either purchased or customized in-house. “We use IBM’s Cognos, a business intelligence software, as a tool for performance management including data access, system management and information delivery. PPMS (Pasteur Platform Management System), a time based booking management system, allows facility users up-to-date information on maintenance, problems and cancellations. They can also report problems and request trainings through the web interface," says Chaudhuri. Some time ago, Ispat had formed plans to develop software that would have helped them track all its barges. It planned to spot the barge on screen with the help of satellite connectivity. But then certain regulations checked progress. However, it plans on continuing this exercise as increasing demand is seeing more number of barges at sea. Within the plant area, Chaudhuri prefers to track trucks through RFID.

yard Management There are two parts of the yard. The raw material yard stocks materials and transports materials to the production department on a daily basis. The finished goods yard maintains inventory of the hot rolled coils. Operations at the yard include branding the coil using a thermal chalk. The ID number is integrated into the SAP/ ERP system. Since production is customized for different customers, the manufacturer distinguishes the steel during the process of production for error-free shipping. An automated system takes stock of the coil that has been shipped. “This exercise helps us maintain a low inventory level. We are now working on a 3D model to do this efficiently. That will mean a 3D racking and a whole lot of mechanization,” says Chaudhuri earnestly.

Packaging Solutions Finished steel is transported across continents and needs to be carefully wrapped and coil packaged. For the purpose, Ispat uses the steel coil packaging of ITW Signode, a steel packaging company in the US. In turn, the task of packing the sheets and coils has been subcontracted. Ready sheets and coils are wrapped in raw coil with the help of handlers after which the rolled coil is sent into the packaging yard. As a means of identification, Ispat tags an ID ring to it and a final packaging design to prevent it from being damaged in transit.

equipment Management Ispat has enormous line systems that are put to use seven days a week. Continuous production often leads to breakdown of equipment. Chaudhuri says humbly, “For equipment maintenance we approached ABB as it has a structured approach of getting maximum output from its equipment. ABB mapped out the performance of our equipment and rated them.” A steel plant has different units that are connected through a level of

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< Cover Story integration. Each machine emanates data that goes into the data control center. It helps the company understand the performance level of the machines. “We have a well laid-out parts management system. Certain parts are insured. We also maintain replacements of parts that are prone to breakdowns,” says Chaudhuri. Taking this forward, Chaudhuri says that there are certain areas of consumables like the refractory, which are a big part of cost and maintenance. The refractory is a vendor managed inventory. The supplychain department monitors the efficiency and the inefficiency of the various parts.

Meeting Set Standards

Raw materials from mines (global and Indian) are brought in to the jetty from where it is transported to the plants.

As steel manufacturers, Ispat has World Steel Dynamics and World Steel Association constantly sending across benchmarking standards. This also includes benchmarking of equipment and technology. Steel as an industry is well integrated in terms of knowledge sharing. "For example, if we are benchmarking steel casting and we find that the global accepted figure is 6.1 meters, then we emulate that. However, Ispat prides itself on its ability to inherently follow the world benchmark levels across production, equipment, and supply-chain. So we have the best of best, an internal Source: Ispat Industries

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March 2011 | www.logisticsweek.com

Forecasting also applies to making available the feed mix for the various types and grades of steel. benchmarking strategy that we have devised." says Chaudhuri. For external benchmarking, Ispat compares its performance with its peers such as Tata Steel, JSPL, Essar in the domestic market. When comparing with foreign companies, it uses forums like World Steel Association, Procurement & Sourcing Institute of Asia, to understand the best practices in steel making, raw materials values in use and procurement. In a bid to map losses that are inherent at a production plant, Chaudhuri has rolled out Profit Enhancement Program (PEP). He says, “The prevention of loss is a profit. Here we map all the losses. If these losses were absent, it would have translated into profit. And every key account manager across departments has a responsibility of managing their PEP. At the end of the month, we would ideally like a PEP of 100. But I get 50, 54 or 55.”

logistics integration will have to become a backbone of the planning structure of the company.” Chaudhuri’s other concern is automation. Post-production, steel manufacturers wait for a non-destructive test to identify surface defects like pits, scratches and holes on the metal. A complex and expensive rework follows. While online machine vision inspection systems are common in developed countries, these are sadly lacking in India. With the increasing use of scrap in steel making, scrap contamination is a common occurrence. Most of the scrap brought in are shredded parts of motors or assembled parts that have been discarded. Aluminum and copper need to be filtered out before it can be used. “If the production plant is incapable of rejecting copper, it is a risk to the entire plant. And we are talking of 100,000 tons. Automation must be backed by some kind of integration that forewarns. Although we undertake this process every day, there are some who could be doing this once or twice a week.” "The capability of responding to the momentum is what is going to dictate terms. And that is going to be for post production as well as logistics. Today we are largely dependent on railways for their PPP and dedicated freight corridors, etc. You can't manage bulk movement on a remote basis." he adds.

Looking Into the Future The logistics capabilities of a steel company will determine their success. Chaudhuri believes that steel companies essentially cannot depend on a third party logistics provider for key resources. “Brazil has shown us the way. Vale has their own trains and they have laid out more than 10,000 kilometers of railway tracks, nine ports and own a huge fleet of ships. Steel being a commodity, there’s nothing that can differentiate you from other players other than your service capability. Going forward,

Future Plans Post JSW Steel’s stake, there is likely to be people movement in the company. Even the supply-chain of Ispat will undergo a change. Hitherto, the company purchased most of its iron ore from NMDC. The Jindal affiliation will give access to its mines in Hospet and other facilities. “Our dependence on railway logistics will increase. We will keep mapping and analyzing problems and look for new solutions. Some formats may change because of the fresh financial support.”

ECL-IWS Magazine Partner 1.pdf 1 1/24/2011 1:47:59 PM

CMY

< feature

Of Things To Come technology adoption is set to soar, LSP inefficiency is not a matter to be brushed under the carpet, and be ready to see many more M&as. Frewin Francis toothcombs a recent frost & Sullivan logistics-industry report and grills industry experts on the issues highlighted in the report.

he recent Frost & Sullivan sectoral analysis (2011) on the Indian transportation and logistics sector, while predicting exponential growth, identified the reasons ailing this sector that range from technology to competitive analysis to economic impact. For effective analysis, it took into consideration the views of both endusers and LSPs. There was some good news for the transportation and logistics sector. According to the report, the Indian logistics market recorded revenues of about $82.10 billion in 2010, witnessing a growth of about 9.2 percent over the previous year. The strong growth in the transport and logistics sector has been driven by growth of key manufacturing industry sectors such as automotive, engineering, pharmaceuticals, food processing,

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March 2011 | www.logisticsweek.com

and textiles that contributed significantly to this growth. What’s more, for the period 2010-2020, the Indian transportation and logistics market is likely to witness consistent growth of around 8-9 percent every year during this period and reach revenues of about $190-200 billion by 2020. The growth part of the analysis did not come as a surprise, as the recent reports emerging from the automobile and pharmaceutical sectors have offered similar accounts of growth. According to a recent report by SIAM (Society of Indian Automobile Manufacturers), production of all vehicles saw a growth of nearly 33 percent in calendar year 2010. Similarly, Business Monitor International’s “India Pharmaceuticals and Healthcare Report Q1 2011” depicts the combined sales of prescription drugs and over-the-counter (OTC)

medicines to increase from `739.3 billion in 2009 to `837.7 billion in 2010. Pointing out that the growth is the sign of India's economic resilience, Gagan Seksaria, Associate Director (Transportation & Logistics), KPMG, points out that it is India’s self consumption that drives its growth and not the ability of mature markets to buy from India. The macro-economic growth will spur the transportation and logistics industry in many ways, says Srinath Manda, Program Manager (Automotive & transportation) at Frost & Sullivan. The steady growth of the manufacturing and logistics industry, and an equally steady growth of operations of 3PL and contract-logis-

tics companies are two likely, positive impacts of the growth.

technology Matters The analysis points out that while India has been at the forefront of developing technology, it lags in terms of adoption. But the high cost of exclusive logistics technologies such as warehouse management systems (WMS), transportation management systems (TMS), and radio frequency identification (RFID) has acted as a deterrent for the majority of the logistics service providers (LSPs) to adopt these technologies. Seksaria points out some hurdles that LSPs face in adopting technology. “Besides the high cost of technology for LSPs, there’s a general reluc-

tance on the part of end users to pay more for the quality of service. Indian service providers are willing to adopt new technologies as long as there is a willingness by users to pay for it.” But this is set to change, says the report while predicting that India’s logistics technology market is set to grow at 19.8 percent thus crossing $600 million by 2015. Manda states that usage of exclusive logistics technologies is driven by LSPs and end-users to scale up operations. So, it can be deducted that the growth in the logistics industry would imply a growth in logistics technology as well. “The uncertainty of business growth associated in such sectors is keeping LSPs from investing huge amounts in technology.

rePOrt HIGHLIGHtS India’s logistics market recorded revenues of $82 billion in 2010. n I ndian transportation and logistics market is likely to grow at a constant rate of 8-9 percent from 2010-2020. n I ndia’s logistics technology market is set to grow at 19.8 percent thus crossing $600 million by 2015. n L SPs will scale up technology adoption. n I nefficiencies of LSPs can be attributed to procedural and bureaucratic hiccups. n G overnment plans to pump `15 trillion into building up infrastructure. n M ergers and acquisitions in the logistics industry will continue. n

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March 2011 | www.logisticsweek.com 43

< feature Smaller LSPs, on the other hand, are unlikely to procure such high investments as well as benefit from technology. This is the reason why there’s only a gradual scaling up of technology usage in the industry.” Marcus Schroeder, Managing Director at Hörrmann India, throws light on the issue from a warehousing perspective. He says, “The traditional Indian view of a warehouse is that of a shed with no functional requirements beyond a corrugated roof. Hence there’s no compulsion to spend on technology.” Established players in the sector have followed a conservative and traditional approach of doing business and scaling up operations with the

Almost two-thirds of end users employ multiple LSPs and 80 percent end-users sign one-year contracts with their LSPs. mantra of minimum risk. But this is expected to change with the next generation managers and heirs to privately owned businesses who have identified the need for technology adoption if they seek global exposure.

Both Sides Of the fence The steadily expanding domestic market of various industries ranging from FMCGs, to automotive, to telecom and electronics has ensured that the Indian landscape is an attractive destination for multinational LSPs seeking long-term growth. The report identifies key manufacturing industries such as automotive, engineering, pharmaceuticals,

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March 2011 | www.logisticsweek.com

and food processing that is likely to witness high growth trajectories in their revenues. This is an indication that LSPs serving these industries are likely to witness similar growth trends. A general grievance among endusers, as per the report, is that LSPs were found to perform significantly below customer expectations on key parameters such as ability to deliver on time, security and damage control of goods, process improvement capabilities, and nationwide reach. Pradeep Chechani, Vice-President (Supply Chain), and Business Head (West & East Region), Wadhawan Retail (P) Ltd., feels that while a majority of the LSPs do fall back on expectation levels of end-users, in a lot of cases the LSPs cannot be blamed. “Delays at octroi points, bureaucracy and lack of proper infrastructure are major pitfalls in assuring timely service,” he adds. Seksaria says that local LSPs though in a scale-up mode are not mature enough to provide flawless service. “While their network and reach is limited, what limits them most is availability of talent. Large Indian LSPs can compete with MNC LSPs and the service challenges in both cases are driven by operational challenges such as infrastructure, connectivity and tax driven inefficiencies,” he adds. Even MNC LSPs, according to Manda, do not yet have a strong and nationwide infrastructure presence to provide best solutions to clients. A common trend, according to the report, is that almost two-thirds of end users employ multiple LSPs and about 80 percent end-users sign only one-year contracts with their LSPs, indicating a high propensity to switch service providers. Chechani counters this by saying, “Volatile business factors make long contracts economically unfeasible. Prices have to be revised year on year to match hike in fuel and labor costs.

Large Indian LSPs can compete with MNCs and the service challenges for both are infrastructure, connectivity and tax driven inefficiencies." — Gagan Seksaria, Associate Director, Transportation & Logistics, KPMG

I would like to think that 80 percent of end-users usually renew contracts with their existing LSPs unless there has been a serious lapse in service.” Manda adds, “Low performance and lower satisfaction cannot be blamed entirely on the LSP. LSPs provide what their customers ask for. Customers too often opt for a lesser performance of LSPs if there is a significant cost saving. Another reason Chechani cites for poor performance levels of LSPs is the high churn rate of workers at the lower end. Low wages leads to diminishing employee dedication levels. Since efficiency of delivery boys is subject to the duration of work experience, a high churn rate brings familiarity with new employees to new regions back to ground zero.

Local Initiatives It’s often reiterated that India’s logistics costs amount to 13 percent

of its GDP, which is higher than that of developed nations. This has been due to inefficiencies in the system like lower trucking speeds, high turnaround time at ports and high cost of administrative delays. This also shows the magnitude of room for improvement. Sharmila Amin, India Head (Pan Projects – Oil and Gas Business Divisions), Panalpina World Transport (I) Pvt Ltd. points out the silver lining with the government’s strong commitment to bettering road infrastructure, while creating a positive regulatory framework. The decision to spend `15 trillion in building infrastructure over the next few years along with rationalization of regulations and taxes for the sector is bound to help LSPs grow over the next decade. Manda adds that the government's significant initiatives such as the revi-

I would like to think that 80 percent of end-users usually renew contracts with their existing LSPs unless there has been a serious lapse in service.” — Pradeep Chechani, Vice-President (Supply Chain), and Business Head (West & East Region), Wadhawan Retail (P) Ltd

sion of its maritime policy, efforts to speed up highways construction, and improvements in the Delhi-Mumbai Industrial Corridor project, etc. are likely to boost the transportation and logistics sector.

Big MNCs have begun investing or acquiring in local companies to scale up operations. An example is that of Japan’s Hitachi Transport System’s acquisition of Indian based Flyjac Logistics. More strategic alliances and joint ventures are expected.

Mergers and acquisitions Reviving fortunes has also seen a consolidation wave. Mergers & acquisitions from within the industry are making news. Some notable ones mentioned in the report are FedEx’s acquisition of AFL Logistics, and Transport Corporation of India’s (TCI’s) 51 percent equity stake acquisition in Infinite Logistics Solutions. Apart from this, companies such as Toll Global Logistics, Allcargo Global Logistics, and F H Bertling Ltd., have been actively seeking to expand their size in India through an inorganic growth mode. Venture capitalists too have jumped into the fray. Recently, International Finance Corporation (IFC) invested $5 million in Snowman Frozen Foods Ltd., a Bangalore-based company that transports, stores, and distributes frozen and chilled foods. Similarly, Eredene Capital, a UK-based fund house that invests in logistics projects in India, took 90 percent stake in MJ Logistics, a 3PL cold storage service provider for processed food and retail industries. Sanjay Shroff, Senior Vice-President at Edelweiss, says, “For many years, foreign players restricted themselves to freight forwarding services. They had their reasons. The risks of investing on expensive assets notwithstanding local bottleneck issues like RTO, regulatory issues and employee issues seemed too expensive a risk to take in an unfamiliar market.” However, the progress rate of India in the transport and logistics sector has made it a force too large to be avoided.

Driving Demand Goods and Services Tax (GST) is expected to be a game changer that everyone in this sector has been

Big MNCs have begun investing or acquiring in local companies to scale up operations. waiting for. GST which was scheduled to become effective from April 1, 2010, has been delayed by a year by the Central government due to nonagreement of several State governments on the proposed tax revenue sharing model. Seksaria states that consolidation would be driven by demand as well as supply side forces. On the demand side, customers increasingly wish to work with large, integrated, single window LSPs making a case for mom and pop businesses or even medium size businesses to merge and create scale. On the supply side, several overseas LSPs wish to set up business in India and a good market entry route in this business would be an inorganic model. With India being one of the five fastest-growing economies in the world as of 2010, the logistics sector has to step up to fulfill the rapidly rising needs of industries for both domestic as well as international markets. INDIA |

March 2011 | www.logisticsweek.com 45

< panoRaMa OFF THE SHELF

Supply Chain Finance Solutions

r. Erik Hofmann and Oliver Belin in their book, “Supply Chain Finance Solutions” offer an orientation in the direction of supply chain finance (SCF). The book examines the need for and nature of SCF, along with its characteristics. The relative novelty of the supply chain finance approach has left open several knowledge gaps. This knowledge gap has led to uncertainties about the successful implementation of SCF solutions within companies as there is little quantified evidence on the achievable

cost savings and other potential benefits. The authors have closed this gap by substantiating on the SCF market. Based on a sample SCF model, the worldwide market size for such solutions and potential cost savings to companies engaged in SCF have been analyzed. supply chain Finance solutions By Dr. Erik Hofmann and Oliver Belin Publisher: Springer Price: `3,100

Sourcing It Right

n “Strategic Global Sourcing: Best Practices”, the authors have covered the latest trends and processes in global strategic sourcing. This includes supply management, sustainability, financial decisions, risk management, and international strategies. Insights have been provided for understanding the concepts of sourcing, procurement and supply management, global sourcing management, financial strategies for sourcing, diversity procurement, supplier selection, project management for procurement and supply managers and many more. The authors have also paid special focus on cultural considerations and cultural val-

ues that need to be taken into account while sourcing from other countries. Emphasis has been laid on the criticality of negotiation. One chapter specifically deals with how negotiation should be strategically planned and the amount of leeway that can be given while negotiating.

strategic Global sourcing Best practices By Fred Sollish, John Semanik Publisher: Wiley Price: `3,000

Doing It The Toyota Way

oyota has been defining the global business market place with their theories on supply chain management and organizational methodology. In “Supply Chain Management: A Strategic Approach to Toyota's Renowned System” the authors, through their close association with Toyota offer an understanding of the supply chain that would help companies form an integrated and synchronized system that will be an industry benchmark. The book offers key insights into the logic behind every point of Toyota’s supply chain, along with both the tactics and strategies one could use to build an efficient system on one’s own.

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The authors have also provided insider tips and a hands-on guidance for improving production and operations in a variety of industries, including healthcare, insurance, banking, credit processing, and retailing.

toyota supply chain Management: a strategic approach to toyota's Renowned system By Ananth Iyer, Sridhar Seshadri, Roy Vasher Publisher: Wiley Price: `1,675

March 2011 | www.logisticsweek.com

BloGospHeRe should safety stock be added to Forecasted FG Demand? Blogger: Max Jeffrey Max Jeffrey, an integration consultant, in his latest blog entry on “The 21st Century Supply Chain” discusses various aspects of forecasting. He focuses on the much debated question, “Is it appropriate to add safety stock to forecasted finished goods demand, or should they be driven separately in the planning system?” He says there is no easy way to explain it since forecast is developed first by applying statistical model(s) to sales history resulting in a ‘statistical’ forecast. The technical statistical forecast is then adjusted by various other fundamental factors such as product life cycle phase, seasonality, or marketing and sales promotions, usually as part of the sales and operations planning (S&OP) process. However, to account for potential upsides in sales and to maximize customer service, some buffer or uplift may be added to the forecast as safety stock. search tags: safety stock, Max Jeffrey, finished goods

shippers Must Work Harder in 2011 to Mitigate Freight Rate Increases Blogger: Dan Goodwill In his blog, Goodwill writes about certain worrying developments shippers might face. Shippers are expected to come under pressure for freight rate increases this year. Also, robust retail sales in the last quarter of 2010 may, in

By Global Aviation Industry The aviation sector has recognized the growing and urgent need for society to address the issues of climate change. Aviation plays a vital role in promoting sustainable development and should remain safe, affordable and accessible in order to ensure mobility on an equitable basis to all sectors of society. The United Nation’s specialized agency for aviation, the International Civil Aviation Organization (ICAO) has always played a leading role in efforts to limit and reduce aviation emissions. At the 37th ICAO Assembly in October 2010, governments reached a global agreement on a sectoral framework for addressing international aviation emissions. Being the first of its kind, the agreement formulates global targets for

“Who should know?” the key to the use of social networks in the supply chain Blogger: trevor Miles Miles shares his views on the incorporation of social media concepts in supply chain management. However, in the early stages of maturity there needs to be a high level of B2B integration for a successful collaboration. In the current scenario of social networks, information is sent to everyone who is ‘following’ the publisher (could be Facebook or Twitter). search tags: Who should know, trevor miles

Journals, Case Studies, Research Reports

ResouRce centeR The Right Flightpath To Reduce Aviation Emissions

Goodwill’s opinion, result in inventory restocking in Q1 2011, which may increase the demand side of the curve. This could result in higher shipping volumes during the second quarter. Moreover, transportation companies are facing some imperativeness on the supply side. New hours of service regulations and CSA 2010 is expected to reduce an already depleted driver work force. Trucking companies that were faced with excess equipment during the recession are exhibiting more caution in buying new tractors and trailers. The increase in fuel prices will lead to an increase of fuel surcharge in all sectors of transportation. This leads to the obvious conclusion that shippers may face increases in freight rates and fuel surcharges and see the likelihood of a more aggressive implementation of accessorial charges in 2011. search tags: shipper, mitigate freight, dan goodwill

the sector, along with a set of principles for the use of economic measures, while taking into account the specific needs of developed and developing countries. Between 2010 and 2020, the aviation industry has committed to improve fuel efficiency by an average of 1.5 percent per year, representing a further efficiency gain of 17 percent by 2020 or 2.2 billion tons of CO2 savings. Search Tags:Aviation industry, ICAO, United Nations

What Sustainable Road Transport Future? Trends And Policy Options By Stef Proost and Kurt Van Dender A brief review of long run projections of demand for road transport suggests that problems related to road network congestion and greenhouse gas emissions are likely to become more pressing than they are now.

Hence the writers have reviewed, from a macroscopic perspective, popular policy measures to address these problems: stimulating modal shift, regulating land use to reduce car use, and boosting low carbon technology adoption to reduce greenhouse gas emissions. We find that these policies can produce tangible results, but that they may have unintended consequences that drive up costs considerably. A look at current transport patterns are widely seen as unsustainable, especially with emerging economies evolving towards levels of economic welfare of developed economies and transport activity. Continued urbanization and concentration of economic activity in ever larger metropolitan areas would result in congestion levels that could become intolerable. Levels of noise and pollution remain problematic despite advanced emission control technologies in place. Search Tags: Kat Van Dender, Stef Poost, greenhouse gas

— Compiled by Frewin Francis

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March 2011 | www.logisticsweek.com

< panoRaMa launcHpaD

New Products, Technologies, Solutions

Product

2011 Isuzu npR eco-Max

he latest from Isuzu is the NPR ECO-MAX truck. With its new 4JJ1-TC 3.0-liter turbocharged diesel engine, the 12,000-lb. ECO-MAX is almost 20 percent better fuel economic than its predecessor. It features a high-pressure common-rail fuel injection system that extracts the most energy out of every drop of fuel, and its intercooled, variable-geometry turbocharger provides excellent response over the engine’s entire RPM range. The 4JJ1-TC can be driven up to 10,000 miles between oil changes and has a class-leading B10 durability rating of 310,000 miles — meaning that 90 percent of 4JJ1-TC engines will reach that mileage before requiring an overhaul. New for 2011, the lock-up torque converter operates in power take-off (PTO) mode. Under specifically determined engine conditions, when PTO mode is selected, the torque converter will lock up automatically to eliminate slip and deliver more power and better speed control for demanding power take-off applications. Also, the 2011, Isuzu N-Series trucks reach new levels of agility over prior model years. A modified power steering system allows for wheel-cut angles up to 49.5 degrees. As a result, NQR and NRR drivers will enjoy an average 1.2-foot tighter turning diameter, while NPR models’ turning diameter improves 2.8 feet.

Key Features:  3.0 liter turbocharged diesel engine  20 pc more fuel efficiency  Wheel-cut angles of 49.5 degrees Manufacturer: Izuzu Selling Point: High-pressure common-rail fuel injection system and intercooled, variable-geometry turbocharger.

Product

toyota 8-series Fork lift

he flagship series of the Toyota forklifts, the 8 series features thick, fully stamped steel side panels and moisture-resistant electrical connectors designed to withstand harsh environments. Toyota’s System of Active Stability (SAS) is a feature that Toyota claims no other fork lift manufacturer has. The 8-Series also features curvilinear overhead guard legs and provide a

wider opening for operator entry/exit. The fork lift has ultra-comfort vinyl full suspension seats with 4-way adjustability that provides unequalled operator comfort. An electric shift lever offers easily accessible fingertip control for faster directional changes. The dash-mounted displays and a low profile cowl with sloped dashboard provide an unobstructed view of the fork tips in any position. Strategically placed overhead guard bars provide ideal visibility when positioning forks and handling loads high on racking. And tapered rear overhead guard legs and low profile LPG tank placement provide operators with better visibility when they’re driving in reverse. Key Features:  System of Active Stability  4-way adjustable seats  Full hydro-static power steering Manufacturer: Toyota Selling Point: Curvilinear overhead guard legs and ultracomfort vinyl full suspension seats.

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March 2011 | www.logisticsweek.com

“ISCM – LOG.India Workshop on Macroeconomics for Logistic Decision Making”. Understanding the larger macroeconomy helps you plan your logistics network and strategy with a futuristic perspective. It can help businesses to forecast the macroeconomic downside risk better and avoid the classic bullwhip effect. In an highly uncertain world acquring macroeconomics skills can help you create an effective supply chain plan.

KEY TOPICS 



Recognise and interpret key economic trends like GDP, Inflation, Fiscal deficit, Interest Rates, Balance of Payments, Tariff and Quotas.



Macro Economic concepts and their interpretation.



Macro Economic Policy and their impact on Business variables.



Forecasting Macro economic trends and incorporating them into Supply chain planning.

Learn to make sense out of Macro Economic Policies like Fiscal Policy, Monetary Policy and Economic Policy.



TAKE AWAYS  The importance of Macro Economic environment in Business decisions.

Geopolitics of Economies and its inter-relationship with supply chain strategy today.



Tying Macroeconomics and Business Cycle and understanding downside risks for better SC Planning



Framework for country analysis.

METHODOLOGY 

Lecture



Exercises



Case Studies

Programme Duration: 2 days Dates: 15 &16 April, 2011 VENUE: MDP Auditorium-1,6th Floor, DSIMS, Malad, Mumbai. Fees Per Participant: `20,000/- + 10.3 Service Tax For LOG.INDIA Subscriber `15000 + 10.3 Service Tax Faculty : Dr. Rakesh Singh

WHO CAN PARTICIPANTS: 1. Supply Chain Heads and logistics decision makers from enterprises 2. GM, Business Units Head and Startegic Planning Managers 3. Senior Executives from Logistics Service providers... For more details contact: Frewin Francis Tel: 61162345 Email: frewin@logisticsweek.com / info@iscmindia.com

INDIA

< panoRaMa launcHpaD

New Products, Technologies, Solutions

Product

Retractable tail lift

he retractable range of lifts from Gandhi Entrance Automations Pvt. Ltd is based on the Futura range. The flat/horizontal platform is especially suited to roll out cage operations. The Anteo guide rail system eliminates any “Racking or Bounce” of the lift frame and platform during deployment and retraction. One can choose to have the facility of tilting the platform at any level, a must where the operator loads or unloads on gradients. The platform is available with three-way stops/leading edges, in column lift style to the three open sides, and a fully automatic mechanically operated foot protector/roll cage stop. The guard automatically rises and falls as the tail-lift is operated. As the platform moves away from body floor level cam locks lift the guard thus preventing anyone on the platform from trapping or crushing feet or toes. It also holds the roll cages from falling as the lift descends to ground level. As the lift is raised back to floor level, the guard automatically falls level with platform and body floor allowing smooth transition of roll cages into the vehicle. The platform has front ramps that are 400mm high and side ramps that are 390 mm deep, 500 mm deep and 600 mm deep.

Key Features:  Steel guides of the retractable system have a high yield limit since it is treated and chrome-plated.  Tilt of platform in possible in all positions. Manufacturer: Gandhi Entrance Automations Selling Point: Fully automatic mechanically operated foot protector/roll cage stop

Product

the Giant Gets Bigger

he Volvo FH16 is being launched in a version for heavy haulage involving gross combination weights of up to 295 tons. This puts Volvo at the very top of the heavyweight class. Volvo FH16 with its 16-litre engine produces 600 horsepower and 2800 Nm of torque. The engine is matched by a seven-speed automatic transmission with a torque converter that allows the truck to start off smoothly and helps maneuverability at low speeds. The tall seventh gear makes it possible to maintain a high average speed at relatively low engine revs. The 16-litre engine is equipped with Volvo’s VEB+ engine brake, which offers braking effect of up to 425 kW. The transmission features an integrated retarder which on its own offers braking power of up to 450 kW. The Volvo FH16 for heavy haulage operations is available as a tractor with leaf springs or air suspension, and comes in a wide range of wheel and axle combinations. Key Features:  Engine: Volvo D16 producing 600 hp and 2800 Nm.

INDIA |

March 2011 | www.logisticsweek.com

 Gearbox: Automatic transmission with seven forward ratios and two reverse gears.  Rear axles: Two options with hub reduction, RT2610HV or RT3210HV. Manufacturer: Volvo Selling Point: 16 litre engine producing 600 horsepower.

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Interviews, Company and Executive Profiles

Interview

Infor: A Holistic Enterprise View It is only with efficient supply chain that organizations can ensure better value to the consumer be it cost, service, or the quickness in responding to ever changing tastes of the customer. INFOR is a global company that specializes in enterprise software solutions ranging from ERP to SCM. Souma Das, VP (Sales) and MD, INFOR , shares his thoughts on the growing importance of software solutions. Souma Das, VP (Sales) and MD, INFOR , shares his thoughts on the growing importance of software solutions. Can you tell us about the ERP systems you have deployed in the transport, logistics and warehousing sector? Infor offers a gamut of solutions ranging from Enterprise Resource Planning (ERP) to Supply Chain Management (SCM). Our solutions cater to the growing needs of the mid-market segments and are designed keeping in mind the consouma Das straints and the challenges faced VP (Sales) & MD, Infor by this segment, therefore they require little or no customization. Some Infor solutions for India are: Infor ERP LN: It is our flagship brand in ERP. It provides operational efficiency with planning tools that lets organizations manage their whole business, from customer orders through your production and distribution centers, right down to your suppliers' supplier. It provides an enterprise view of all the resources like capacity, materials, people at all facilities.

Infor scM solutions Infor SCM Network Design (ND): enables organizations to design an optimal supply chain network and adapt the network to keep pace with changes in the business. It enables modeling that helps incorporate complex costs, revenues, carbon footprint, and supply chain constraints to model the best manufacturing and distribution network. It also analyzes an organizations environment to determine the optimal number, location, and size of facilitates; the right inventory levels; and make the best sourcing decision possible. Infor SCM Demand Planning: The SCM Demand Planning enables organizations to predict and shape customer demand. Advanced statistical capabilities combined with market knowledge gained from internal and external collaboration bring pinpoint accuracy to the demand plans. Infor SCM Advanced Scheduler: is a constraint-based scheduling solution that addresses the unique challenges of managing the capacity of vessels, tanks, and linesâ&#x20AC;&#x201D;and the flow of product between them. Infor SCM Advanced Planner: is a configurable solution that can be molded to meet unique requirements of an organization and ad-

INDIA |

March 2011 | www.logisticsweek.com

dress the steady stream of changing variables Infor FMS SunSystems: SunSystems' portfolio of integrated financial management and business intelligence applications gives decision-makers a broader perspective along with more power to analyze operational details. Infor CRM Epiphany: Interaction Advisor helps organizations to increase cross-sell revenue, recommend the best retention offer for a particular customer, matching the value of the offer to the value the customer brings to the company and thereby raise retention and design campaigns and offers that flow across multiple channels, including your stores, catalogs, call centers, and web site and hence create multi-channel interactions. Infor PLM Optiva: It is the best breed solution available for the manufacturing segment which has tools that help organizations to increase revenue, and become more competitive. How are Infor's solutions different from others? What are Infor's strengths over other ERP vendors in the market? n Ease of use: A thorough understanding of processes there advanced business specific features and graphical features such as dashboards. n Non-complex: As our solutions are designed keeping in mind the need of specific business verticals, they require very little customization. n Software upgrade technology: Infor Flex makes it easier for organizations to take advantage of Infor technology advancements by providing: n Flex Upgrade: Upgrade to the latest release of the current solution with minimal or zero license fees and fast, cost-effective implementation services. n Flex Exchange: Exchange the current Infor application for another Infor solution on a like-for-like basis, for a nominal transaction fee and very competitive services rates. n Software Licensing policy: Most major vendors are known to provide only named license however Infor offers both named and concurrent license n Support for older versions: Infor solutions provide complete support for older versions. n Hardware requirements/ Networking and bandwidth requirements and cost: Infor solutions require comparatively less networking and hardware resources n Database compatibility: Infor is compatible with all Databases (Oracle, SQL, Informix, DB2, etc.)

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EYES FRONT

Sonic Boom

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

Ericsson India Director (HeadSupply) Tej Nirmal Singh leads the exciting task of managing supply chain for the company in these demand-crazy times.

Presented by

The HyperCity supply-chain team led by Lt Col. Vijay Nair (Retd) is putting up an inspired show >>

INDIA

Page 34

VITAMIN M 26

BACKING UP 32

FUEL SUPPLY 46

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

TElEcom logisTics 20 LEARNINGS 2010 26 Movement of telecom network equipment opens Critical lessons we learned afrom window of opportunity industry leaders.

low NEglEcTEd adopTioN 24 waTErways 44 ATWhy CEMAT: The expo and the seminar. A ring-side 20 inland WMS still does Indiaview... is ignoring not have LOVE: enough Pharma logistics is challenging waterways at its own TOUGH yet rewarding... 50 takers in India peril ICE BUFFER: How cold-chain can help contain food prices...56

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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

24 30 34 42 46

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Method In Motion

The Warehouse handbook

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The Warehouse handbook

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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< primer

Back to Basics In this section, we revisit some basic concepts â&#x20AC;&#x201C; everyday logistics and supply-chain terms that need a brush up (or update) every now and then.

Lighter Aboard Ship

he lighter aboard ship or LASH is a barge-carrier or barge-carrying vessel and was developed by the American Shipbuilding engineer Jerome Goldman in the 1960s. The LASH is designed to carry lighters (barges) where they are lifted by crane over the stern of the vessel. The Acadia Forest, commissioned in September 1969, was the first LASH carrier and the first vessel designed primarily to transport other, smaller ships. It could take up to 75 standardized lighters, with about 376 metric tons of total loading capacity. The LASH and barge come in different configurations. Some LASHes can accommodate over 24 barges. Each barge may

carry 600 to 1,000 metric tons of cargo, which is much bigger than the ocean freight container, and can float and be towed up and down a river or canal. Thus the barge is often referred to as the floating container. LASHes are useful in moving large vol-

Automated Storage and Retrieval System (AS/RS)

utomated Storage/Retrieval System (AS/RS) are inventory management systems widely used in distribution systems and warehouses. As a high-density rack inventory storage system with unmanned vehicles, it enables automatically loading and unloading products to/from the racks. It essentially consists of machines that store and retrieve products for distribution internally and externally, while moving up and down the storage aisles. It is used in situations where: n A high volume of loads are moved in and out of storage. n Storage density is important because

of space constraints. n No value adding content is present in the process. n Accuracy is critical because of potential expensive damages to the load. AS/RS enables increased inventory control and tracking and helps reduce labor costs. Inventory storage costs too can be substantially reduced as the system with its scope for providing improved warehouse space utilization creates greater storage density. Installing AS/RS does however require sizeable investments of a companyâ&#x20AC;&#x2122;s resources, as well as taking care of the expenses involved for its maintenance and updates periodically.

umes of cargo in the short sea trade and to and from sites on rivers and canals, such as Rhine Canal in Europe that cannot be used by the larger ocean-going vessels. One of its upsides is that it keeps the load in the same vessel for the entire trip, thus reducing cargo handling, transport costs and time. The LASH is common at places where extensive inland waterway systems are the cheapest means of inland transport. For example, export goods from landlocked European countries like Switzerland may move by LASH or other inland waterway transports to the port of Rotterdam (Netherlands) or Antwerp (Belgium), and transfer to the ocean going vessel for the deep-sea voyage.

Total Productive Maintenance

PM has its origin in the concept of preventive maintenance introduced in Japan in 1951. The idea was that while operators continued producing goods using machines, a maintenance group would work on maintaining those machines. However with automation, maintenance became a problem as more personnel were required. So while operators carried out the routine maintenance work, the maintenance group would take up only essential works. TPM is a team based maintenance process designed to maximize machine availability, performance and product quality. A main objective is to distinctly increase production while increasing employee morale. With TPM, downtime for maintenance is made a part of the manufacturing day or process with the target of holding emergency and unscheduled maintenance to a minimum. Ford, Eastman Kodak, Dana Corp., Allen Bradley, Harley Davidson are some companies that have implemented TPM successfully. Kodak reported that a $5 million investment resulted in a $16 million increase in profits which could be traced as directly contributed to by implementing a TPM program.

Can you help us with more such terms â&#x20AC;&#x201C; 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.

INDIA | March

2011| 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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< BOOK EXTRACT

Measure By Measure Future demands on the global food supply will challenge abilities to provide a sufﬁcient supply of food that is safe for consumption. This book is meant to serve as a guide for food safety researchers and managers to understand the global food supply chain and tackle the challenges it poses. An extract.

INDIA |

March 2011 | www.logisticsweek.com

lobal trade in food is not new. Sir Walter Raleigh took potatoes from America to England in about 1590, and the Eastern spice trade has long been established. The reasons for us to continue trading with the world are expanding, but the basic driving forces of availability and innovation remain. Global sourcing today extends far beyond food, which probably lags behind industries such as apparel, appliance, consumer electronics and many others. Consumer-led demand for year-round produce, ethnic foods, innovative and organic foods, combined with industry’s desire for improved productivity through low-cost sourcing, has led to increased momentum to move food around the world. Combined with the continuing growth in population and improved economies in some of the developing countries, resulting food safety challenges start to emerge. Where does our ‘global food’ come from? The single ingredient and commodity foods mostly still come from the parts of the world that have traditionally grown them-spices from the orient, fruits from the tropics, grains from the great plains of North America, Asia, etc. Historically, there have been few problems with global food commodity trading. Increased demand, however, may lead to an intensification of commercial agricultural practices, and we may start to see crop contamination issues such as has been in the United States in recent times (e.g. E. coli 0157:H7 in spinach crops). What has certainly changed is the amount of products that are being sourced and the diversity of companies and products that now use them. As an example, in the first 3 months of 2007, US imports of fresh fruits from China grew 279% to US$7.4 million, fresh vegetable imports grew 66% to US$32 million and fruit and vegetable juice imports grew 98% to US$109 million. Whilst these percentage increases sound high, the ‘share’ of the US food supply that comes from China is tiny, reportedly

less than 1% (Fred Gale, Senior Economist at USDAâ&#x20AC;&#x2122;s Economic Research Institute). Within this framework, there are pockets of intense trade. For example, China produces over half the worldâ&#x20AC;&#x2122;s pork, and a third of the worldâ&#x20AC;&#x2122;s horticultural output. It is a similar story for many other countries. In Europe, and the UK in particular, global sourcing was enabled by the trading between Commonwealth nations. Due to the advent of refrigeration, it was not just dry spices that were traded. The first cargo of frozen meat was reportedly shipped from Buenos Aires to France in 1877. In 1901, the first shipment of chilled bananas arrived in the UK. By 1910, the UK was importing 600,000 tons of frozen meat (James and James, 2006). Global sourcing of food has rapidly expanded since then. In this chapter, we will examine some of the challenges posed by the developing global food supply chain and then discuss strategies and tactics to promote food safety assurance.

Emerging Economies Large countries like China and India continue to have an impact on the globalisation of the supply chain. With rising incomes in emerging economies, however, combined with the global expansion of food service and retail companies, there appears to be a converging pattern in food consumption. Typically, this means that food spending increases through the purchase of more calories usually found in higher priced goods (Frazao et al., 2008). Low-income countries typically

Increased Complexity Of The Global Supply Chain The drivers of change in the global food supply chain include economic, environmental and social factors. Each of these factors presents certain challenges, which are discussed below.

Economic factors n Land and Labor Both are lower cost in less developed countries though this differential with developed countries will likely diminish. Cost reduction has driven many established western companies to outsource from developing countries, resulting in a shift from trade being related primarily to commodity items, where climate played a key role in year-round sourcing, to the advent of finished, often highly processed, product manufacturing in developing countries which now have the emerging technological base combined with a workforce to undertake the task at a lower cost. The total value of processed food trade with the United States has nearly tripled in the past 16 years, with the amount of US imports exceeding the amount of exports. Lower labour rates as a driving force mean that higher cost savings are realized in those processes which are highly manual, such as the hand peeling of shrimp. This is demonstrated by the reports that shrimp are now being exported from Scotland to Asia specifically for peeling and exported back to Europe. Construction and land costs are also still relatively low in developing countries, enabling companies to build manufacturing facilities for less than a tenth of the cost in developed countries.

Source: scania.co.uk

have a diet high in starchy vegetables and low in animal protein, since meat and dairy products are considered a luxury due to their expense. The increase in income combined with the fact that multinational retail and food service chains have grown rapidly resulted in a convergence in consumption patterns. This change is happening at a much faster pace than in previous centuries. For example, Latin American national retail sales in food, as a percentage of food consumption, before the 1980s were 15-30%. By 2001, it had grown to 50-70%. In just 20 years, the growth was equivalent to what had previously taken 50 years in the United States. Asian trends in food consumption patterns are similar. Economic growth is accompanied by increased urbanization-about one million people are moving every week from rural to urban areas where the need for labour is greatest and intensive construction of housing and manufacturing facilities and civic infrastructure are occurring. INDIA |

Scania Ltd has been selected to provide total transport solutions for the Co-operative Food Supply Chain.

March 2011 | www.logisticsweek.com

< EVENTS

A PUBLICATION OF HAmBUrg mEDIA grOUP

M a r c h 2 0 11 March 9 - 11, 2011 PU TEch India Exposition centre & Mart Ltd., Greater Noida The polyurethane industry is one of the rapidly growing industries in India which has registered double digit growth during the past five years and is expected to double every four years in the coming decade. Polyurethanes cater to a wide variety of market segments ranging from automotive, two wheeler, railways, refrigeration, insulation, bedding, comfort products, construction to coatings, adhesives, sealants and elastomers. Exhibitors include polyol & isocyanate producers, polyurethane system houses, additives & auxiliary chemical suppliers, machinery manufacturers, processors of polyurethane, suppliers of testing equipment, consultancy services etc. Organized by: Indian Polyurethane Association Tel: +91 44 24995923

materials, institution and information agencies. Organized by: Triangle Management Services Limited Tel: +44 1628 642910

March 14 - 16, 2011 POsTEch hotel Taj Palace, New Delhi Postech is related to the postal services. The event will showcase the topmost industries related to the postal services and provide ideas and latest technologies. This event imparts education and good networking connections to its visitors as well as exhibitors. The Postech event offers solutions to the problems related to the postal technology services. The companies and institutions exhibiting in this event would be the ones who are associated with the top leading industries as wholesalers, importers, exporters, processors, manufacturers and suppliers of raw

March 16 - 18, 2011 WaTEr ExPO-chENNaI chennai Trade & convention centre, chennai Planned at Chennai Exhibition Centre, Water Expo 2011 is a proactive platform for the water & waste water industry. The expo offers business opportunities to exhibitors as well as visitors. Water Today with a vision about the growing potable water need world over, arranges this event with a special focus on the packaged drinking water industry. The expo focuses on water conservation, wastewater management, effluent treatment, water recycle and reuse, and desalination. Organized by: Water Today Tel: +91 44 42916900/42916901

STATEmENT ON OWNErSHIP OF THE JOUrNAL Form IV (See Rule 8) 1. Place of Publication Hamburg Media Private Limited, B-4/6, Sona Udyog, Parsi Panchayat Road, Andheri East, Mumbai 400069 2. Periodicity of its publication Monthly 3. Printer’s Name Mustan Sir Saifee Savai, Nationality: Indian, Savai Printers Pvt Ltd, A-661 TTC Ind. Area, Mahape, Navi Mumbai 4. Publisher’s Name Jacob Joseph Puthenparampil, Nationality: Indian, Hamburg Media Private Limited, B-4/6, Sona Udyog, Parsi Panchayat Road, Andheri East, Mumbai 400069 5. Editor’s Name Aanand Pandey, Nationality: Indian, Hamburg Media Private Limited, B-4/6, Sona Udyog, Parsi Panchayat Road, Andheri East, Mumbai 400069 6. Names and address of Mrs. Honey Jacob individuals who own the B-4/6, Sona Udyog, Parsi Panchayat Road, Andheri East, Mumbai 400069 newspaper and partners or share holders holding more than one per cent of the total capital. I, Jacob Joseph Puthanparambil, hereby declare that the particulars given above are true to the best of my knowledge and belief. Date: March 31, 2011 Sd/(Signature of Publisher)

INDIA |

March 15 - 17, 2011 INDIaN cEraMIcs University Exhibition hall, ahmedabad The ceramic manufacturers need better materials, higher standards of technology, quicker, cleaner and more efficient machinery, built-in potentials for expansion, quality control systems etc. This edition is the sixth in the series of events. Indian Ceramics 2011, a three-day show, will be packed with visitors providing a perfect opportunity to meet and deal with industry professionals. Indian Ceramics 2011 will deliver a conference program in a purpose-built seminar area. Organized by: gattaca Communications Tel: +44 2032 395572

March 24 - 26, 2011 cONVErGENcE INDIa 2011 Pragati Maidan, New Delhi Convergence India 2011 is a premier event for the ICT (information and communications technology) sector in India. The event provides a tremendous opportunity for the ICT industries to venture into the untapped rural market and connect the non-urban areas in India. It will also focus on greening out the IT products by devising new plans and practices which will create least possible greenhouse emission. Exhibitors would include bandwidth exchange services, ATM services, bridges & gateways, telecommunication systems, internet and intranet products and services, CDMA/gSM/TDMA, cellular and mobile communications, and broadcast and production equipment & services. Organized by: Exhibitions India Pvt. Ltd, Delhi Tel: +91 11 42795000/42795054

March 2011 | www.logisticsweek.com

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