LOG.India Januray 2012 by Frewin Francis

IndIa’s LeadIng LOgIstIcs MagazIne www.logisticsweek.com

INDIA INDIA

October 2011 Vol. 5 — No.2 vol. 5 — no.5 October 2010 | Vol. 4 – No.2

January 2012

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Method In Motion

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

anshuman Singh, Md & ceo, Future Supply chain Solutions limited, gives an overview of the ScM strategies of the Future Group. TElEcom low page 22 logisTics 20 GET SET, GO 38 Movement of telecom

network equipment opens The true story of supplyachain window of opportunity education in India. ShapinG up Brawn

How Woodland’s products come together from scratch

Jayakumar Krishnaswamy, AkzoNobel’s SCM head, is managing a 24x7 supply-chain. Here’s NEglEcTEd how he plans to accomplish it. Page 16 adopTioN 24 waTErways 44 OLD ORDER: How auto cos manage serviceIndia logistics for phased-out models...08 Why WMS still does is ignoring inland not have enough HAND: How FDI in Retail would waterways at its own logistics...25 THE FOREIGN change India’s takers in India peril PRO-LIFE SCM: Amid all the din around green logistics, some practical wisdom...30 Food Security and ScM: The bill is noble, but do we have the supply-chain...10 Supply Jane: The percentage of women execs in corporate supply-chain....16 turn oF inventory: Scrutinizing ways to improve inventory turns.....60

Warehouses & Industrial Buildings of 2,00,000 sqft. under construction available at Chakan, Pune (Outside Octroi Limits).

eDITORIAL

Glad It’s Over

t irks me every time I see a suggestion that Anna’s anticorruption crusade is a middle/upper-middle-class phenomenon. Clearly, the media pundits and politicos who conclude this are either trying to mislead people or are clueless of the spread of corruption in this country. Transparency International says the amount of bribe paid by transporters for every single truck in a year is equal to the official salary paid to that truck driver. So effectively we are paying an unofficial tax to the government every time we pay wages to a truck driver. This is not accounting the tremendous wastage of time lost when the trucks are stopped repeatedly for official extortion. Surely, truck drivers and the majority of transporters who own one to five trucks at the most don’t belong to the elite class. At the time I write this, Anna Hazare has called off his fast and proceeded to Ralegan Siddhi. The local newspapers are holding forth reasons behind Anna’s ‘flop show’ (these reporters would’ve earned my respect if they had lambasted the Mumbaikars instead for not turning up in support). Our political reps in Delhi, the opposition party in particular, have used smokes and mirrors to create an illusion that they wanted a strong Lokpal. Last heard, the regional parties, along with the major opposition party, managed to scuttle Lokpal in the Rajya Sabha on ridiculous grounds. It’s funny how the incumbents, who, not very long ago, looked like the villains of the piece, tried to do the best they could with the Bill. Even with its flaws, the Bill gave all of us a strong weapon against graft. So what if the Bill had a provision for establishing anti-corruption agencies at the state level? I think it was a good step. The regional ruling parties on their own lack the will to address corruption on their home turf. For evidence, please compare the condition of state highways with the national highways. Or the state-run schools with central schools. The other bone of contention was whether CBI should be independent or not. I do not know if making CBI independent would empower Lokpal. I, as an aggrieved citizen, don’t care as long as the Lokpal has been given its investigative and prosecution wings and since they have been provided in the Bill, I am good. Overall, I think we lost a great opportunity this time. The year 2011 has turned out to be a year of duds. The retail-FDI bill has been stopped in its tracks. GST is yet to see the light of day. Financially, the year had begun on a healthy note. It has been on a downward slope since then. GDP growth was a robust 8 percent in 2011. Moody’s, the rating

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agency, sees it slipping below seven percent as the year ends. Our current account and fiscal deficits are widening — economists warn they may touch danger marks in 2012. Foreign investment inflows are slowing down. The only silver lining in 2011 — for the masses as well as for the industry — has been the introduction of the Food Security Bill and its subsequent approval by the Aanand Pandey Cabinet. On the face of it, Editor it means that food security bill, if passed, will put an extra burden of Rs 3.5 lakh crore on the tax payer. But, as the example of Brazil — that miracle economy which has overtaken India in economic indices — shows, the right to food has an uplifting effect on the economy. Brazil’s ex-president Luiz Inácio Lula da Silva launched a national crosssectoral strategy called Fome Zero (Zero Hunger) in 2003 and in 2010 December, the Brazilian House of Representatives voted to make it a constitutional right. Experts worldwide concede that the right to food has benefitted Brazil’s economy in a big way. In India, the proposed bill holds great significance to the supply-chain community in particular. We all know how our food supply-chain is critical to realizing the goal of food for all. As is proposed in the draft bill, the government will seek and expect active participation from the supply-chain industry in the areas of food storage and distribution. I think that gives us, among other deferred goals, something to look forward to in 2012. Wishing you a prosperous and productive 2012.

Aanand Pandey aanand@logisticsweek.com

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January 2012 | www.logisticsweek.com 7

Contents 10 AnAlysis

Between The Cup And The Lip A look at how logistics will affect the implementation of Food Security Bill.

22 cover story

Behind Organized Chaos The supply chain strategies of the Future Group are famously complex. A report.

12 the enAble Flow series A Turn For The Better

Certain hurdles can hinder the smooth f low of any supply chain. Prabhakar Mahadevan suggests ways of overcoming such hurdles.

15 coluMn

Working With The Enemy Collaborative logistics can be very lucrative for both enterprises and service providers. It is time for the Indian logistics industry to endorse the concept.

Time To Rock The Cradle Women employees in logistics organizations can be more productive than expected.

18 FeAture Foot Soldier

Exploring the supply chain of Woodland in India.

44 Focus: cscMP

Excellence In Supply Chain A report on CSCMP's global annual event which was held at Philadelphia in October 2011.

18 8

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January 2012 | www.logisticsweek.com

JAnuAry 2012 ADVeRtIseRs InDex

58 event rePort Light Of Day

Jay Equipments ......................................................... 3

A seminar on forward-looking automation technologies.

Vijay Logistics ........................................................... 4 Cranfield University ................................................. 29 BLR Logistiks (I) Ltd ................................................ 41 Exide Industries Ltd ................................................. 49 Safexpress .............................................................. 57 Softlink Global ......................................................... 65

Capricorn Logistics ................................................. 67 Om Logistics ........................................................... 69

60 sPeciAl suPPleMent

Orange City Logistics Park ...................................... 71

Automation: Today And Tomorrow

Swisslog India .........................................................BC

It is high time for Indian logistics companies to start thinking about automation seriously.

Gandhi Automation ..................................................Ibc Toyota Material Handling India ............................... IBC Greenearth Translogistics ...................................... IFC

DeceMber 2011 IndIa’s Lead Ing

LOgIstIcs MagazIne www.logisti csweek.com

IN INDDIA IA

October 2011 December Vol. 5 — No.2 Octob2011 er 2010Vol. 5 — No.4 | Vol. 4 – No.2

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Method In Motion

70 PAnorAMA

amit mukherj ee, Vicepresident (iT and sup ply chain) and group cio deployed exem at rpg, has plary supplychain stra tegies at spe ncer‘s retail >> page

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

TElEcom logisTics 20 GET SET, Movem entGO of teleco 38 m

72 events

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netwo The true rk story equipm of ent supply opens achain windo w oftion educa oppor tunity in India.

WALK IN THE

PARK 44

A detailed analys is of India’s logisti cs parks

Some forthcoming events coming up in January. INDIA |

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F CRUIN NCNH OVTAIM TIOEN

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January 2012 | www.logisticsweek.com 9

< news analysis

Train of ThoughT

If you look at where growth is over the next 20 years you’re going to see much more of the market into shifting to Asia Pacific and also to the Middle East. — Jim albaugh CeO, Boeing Commercial airplanes at Reuters Global Manufacturing and Transportation Summit.

We aim to double our food processing capabilities in the next five years and the establish 64 fully equipped Agro Processing Zones and Food Parks. — anand sharma, Minister of Commerce and industry India talking about plans to improve processing and cold chain for food processing industries.

Currently, we work with 1,500 suppliers across the country and a significant number of major international ones. —sachin Bansal, Co-founder and CeO, Flipkart in an interview with Business Standard.

Hurdles to an efficient distribution chain are not linked to infrastructure and technology alone. Unlike the clumsy checkposts in India, Europe has totally eliminated check points.” —Mohan Murti, former europe Director, Cii in a column for Hindu Business Line.

Between The Cup And The Lip As India awaits the passage of the Food Security Bill in the Parliament, Pritha Dey takes a look at the role of logistics in the proper implementation of the bill.

ritics have thrashed the Food Security Bill as a mere vote-bank-expansion-strategy. They say certain subsidy rates are already quite high. Introducing the Food Security Bill would now incur hundreds of billions to the existing subsidy expenditure and would be demanding to the economy. Prof. N. Viswanadham, INAE Distinguished Professor, Indian Institute of Science, says, “The bill should be named Grain Security Bill. This bill is all about providing grains at subsidized rates. The actual essence of food security is providing sufficient, safe and nutritious food for all. Providing foodgrains at subsidized rate is not equivalent to providing wholesome nutritious food.”

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In consequence to the bill, prices of grains are expected to come down. The Food Security Bill does not imbibe the norms of Food Security. The spread of distribution may increase. But that would be largely dependent on the efficiency with which the Public Distribution System (PDS) operates. “PDS needs a drastic change in the way the distribution is done,” states Purvin Patel, COO, Radhakrishna Foodland. PDS has come under much scrutiny and received interminable criticism due to its inefficiencies in distributing foodgrains. Even now, as hundreds of tonnes of foodgrains rot in the storehouses, thousands of people die of hunger in India. Thus, the most important

January 2012 | www.logisticsweek.com

In consequence to the bill, only the prices are going down. India’s Food Security Bill does not imbibe the norms of Food Security. aspect of the Food Security Bill would be proper storage and distribution. Consequently, strategizing supply-chains should assume cardinal significance in order to make the bill a success. Presently, the government supply-chain is not a carefully mapped out flow of goods. It is unorganized and requires upgradation.

Compromised supply “There should be no compromise on storage options. Infrastructure development, proper

Highlights Of Food Security Bill It covers 90 percent of rural population and 50 percent of urban India. n 46 percent of rural households and 38 percent of urban households are entitled to the lowest rates; together, they add upto 40 percent of India’s total population. n The estimated cost the bill is $22.3 billion or `1.1 trillion per year. n

Source: ndtv.com

Entitlements Priority Households (BPL) General Households (Lower middle class families) Entitled to 35kg foodgrains every month Entitled to 20kg foodgrains every month at Rice at `3/kg price not exceeding 50 percent of the Minimum Wheat at `2/kg Support Price paid to farmers for the three grains Millets at `1/kg

storage facilities, improved transportation, proper implementation of specifications as mentioned in the Bill by the logistics sector, services involved while storing the goods – all would collectively lead to the success of the bill,” said Kapil Premchandani, Managing Director, K. D. Logistics Pvt Ltd. Mr. Patel says, “Logistics will have an important role to play in the Food Security Bill. It will be the backbone of the system where the needy can get guaranteed food grain as promised by the state and within the time frame.” Roadways and railways are presently the main modes of transportation and would continue to remain so in all probability. Mr. Premchandani opines, “Roads and railways should remain as the chief modes of transportation. But now it is roadways first and railways second. It should be the other way round.” Foodgrains are often left out at yards in open spaces waiting for the wagons. They are left to rot in the rain, not to mention the pilferage. Therefore, says Mr. Patel, “the Railways should have dedicated rail yards and priority should be given to shipment of foodgrains above others.” Dr. P. K. Goel, Chief Commercial Manager, Northern Railway, says, “Indian Railways is always willing to participate. But the Food Corporation of India (FCI) does not have adequate infrastructure.” FCI is illequipped and does not have ade-

quate number of state-of-the-art warehouses. Their distribution is poor. The distribution of existing warehouses is uneven and that makes it difficult for transportation of the goods from FCI warehouses to railways. As Dr. Goel puts it, “FCI needs to build warehouses, and preferably, close to railway lines so that the goods can be picked up by railways easily.” Also, the FCI godowns are mere storage centres, unlike any modern warehouses. They are not fitted with modern facilities and technically updated equipments.

solutions in sight Mr. Premchandani is of the opinion that a hub-and-spoke model should be followed as it would be cost effective as well as ensure better distribution. Prof. Viswanadham says, “What is missing is an integrated, co-evolutionary innovation strategy that would lead to high service quality food solutions to millions of people by combining innovations in several of the ecosystem elements and also their convergences.” He is of the opinion that modernization and integration of PDS, midday meal program, vocational training programs under NREGA, hawkers, and small food outlets using communication technologies would lead to a blockbuster industry serving the poor and creating millions of jobs for those who are not so well educated. Any food supply-chain is perishable in nature and would require hygienic handling. Its

manufacture requires careful demand forecasting, routing and rerouting of supplies and monitoring the anti-social activities. A large scale initiative such as the Food Security Bill would require trained logistics and IT manpower. Several product and process innovations are needed and there are opportunities for private entrepreneurs. This is a unique opportunity for people from all walks of life: govern-

should outsource it.” The government can provide the land and ask private companies to create the required infrastructure, warehouses, and, storage and distribution facilities. The PPP format can best deliver the much desired efficiency of the bill, feels Mr. Patel. He justifies his opinion saying, “We have seen that PDS has totally failed in our country and led to rampant corruption, especially in the rural areas.” iT incorporation Dr. Goel feels that the inclusion of technology in the process of food distribution is necessary. He says, “A software should be

Modernization and integration of PDS, midday meal, vocational training programs under NREGA, using communication technologies would lead to a blockbuster industry serving the poor. ments, NGOs, big business houses, small entrepreneurs, and, micro finance and other FIIs, to come together to make this program successful. Prof. Viswanadham is in favour of a Food Security Commission. The commission would take up cases of adulteration and corruption and act to keep the system clean. Private Players The entrance of private logistics players is instrumental in furthering the cause of proper distribution. Prof. Viswanadham is in support of public private partnerships. Mr. Premchandani says, “The government should certainly allow private players to come in. If the government does not have the competency, they INDIA |

in place to help determine the quantity of grains which should be sent out to each state in accordance to their respective requirements.” Excess grains sent would only rot at storehouses. Contrarily, grains sent in quantities short of requirement would lead to scarcity. In a country of 1.21 billion, proper implementation of the Bill would be possible only when there is proper assessment of requirement and demand.

end Of The line Unless implemented properly, there is an immense scope for corruption. That would make this bill only an expenditure throughout. As most are looking at the bill as a medium to accumulate votes, it is upto the administration to prove itself.

January 2012 | www.logisticsweek.com

< The eNable FlOw SeRieS

A Turn For The Better Roadblocks in supply chain lead to unavailability of products. Prabhakar Mahadevan uncovers this aspect of the supply chain which can lead to crippling shortages.

“G

ive me a lever long enough and a fulcrum to place it and I shall move the world,” said Archimedes, the popular Greek mathematician & physicist, to emphasize on the power of leveraging. “Reality is exceedingly simple, it is our erroneous perception of reality that makes it (appear) complex,” said Dr. Eliyahu Goldratt, the popular physicist and invenPrabhakar Mahadevan, tor of Theory of Constraints. Both these powerful quotes encourage Goldratt Consulting, us to believe that there must be a simple and Regional Director, effective solution to unavailability (shortIndia region ages) problems in retailing. If we manage to identify the leveraging point(s) and learn to move the fulcrum, it would enable us to bring forward sweeping changes in retailing reality. A starting point is to look at the behaviour of consumption of SKUs and then analyse the problems around unavailability. A majority of retail sees several thousands of SKUs merchandized at the point of sale. However, in a given store, a quick analysis would reveal that few SKUs (may be few hundred) actually contribute to a large proportion of sale. Pareto’s principle (the law of the vital few) can be found operating with all its might. Quite frequently these so called best-sellers are the ones that are unavailable. Hence the prime focus for any retail is to improve the availability of these vital few SKUs. A quick solution is to pep up the inventory of these SKUs, which, of course, will require significant amount of additional investment. Even after investing and simultaneously increasing the inventory to improve availability, if we don’t have a mechanism to sustain the inventory position the availability story will deteriorate to its starting point.

Say No To Old Stock While managing unavailability is critical, there is yet another phenomenon in retail that requires attention – the

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January 2012 | www.logisticsweek.com

problem of surplus. A mid-size company dealing with several branded products had significant amount of merchandize (about 10,000-plus SKUs) at its 150-plus stores. It was ailing financially until it started refurbishing its processes. About six months worth of inventory (nearly totalling to annual sales) were lying as inventory across its internal supply-chain. About 85 percent of that inventory was physically located at its stores. Upon analysis, the company learned that more than 60 percent of stock was more than six months old. This reveals several learning’s – part of the inventory lying on shelves is not selling at the forecasted pace thereby blocking shelf space. Needless to emphasize, shelf space is a very valuable asset in retail, and holding non- or slow-moving products diminishes the RoI for the company. Besides ageing inventory blocks cash/investment and exponentially increases the risk of obsolescence. Aged inventories are typically flushed out from retail using discounted sales and profit margins (ranging from 5 percent to 50 percent) are lost. Instead, time and money could have been spent on a better moving product thus contributing to the financial performance.

Musical Chairs Instead of dealing with shortages and surpluses with different solutions, it would be wiser to explore a common lever that would help to eliminate/minimize both at the same time. The single measure that sums up the story in most retailing environment is ‘inventory turn’. Inventory turn is typically measured as sales upon inventory value for a chosen time period. Majority of retail companies (globally) have an inventory turn performance ranging between 1 and 12 turns (of course there are companies that may have a higher performance than 12, but this is rare), while ‘1 turn’ being on the least desirable side of performance – ‘1’ turn means the company has its investment stuck as inventory that equals annual sales value and having ‘12 turns’ mean the company has about a month’s inventory in its supply-chain. Conventionally, there are few ways by which inventory turn can be bet-

tered, namely by improving sales (numerator), or by reducing inventory (denominator). However, if one can find a way to realize much higher sales with lesser inventory, it would lead to exponential improvement in inventory turn performance, as it impacts both numerator and denominator simultaneously. A higher inventory turn in relation to competition also means that the company is able to generate more sales with lesser inventory and this capability will provide a distinct competitive edge. Traditionally inventory reduction is initiated within any company to save financial cost – inventory reduction without supporting logic would lead to devastating results and destabilize the company’s operation. Spending effort to create a scientific and robust way to improve inventory turn is more than convincing. A keener introspection would tell you that shortages and surpluses are not accidental; they are caused by the mode of operation such as forecasting, batching, excessive local optima rules and policies, etc. Merchandize effectiveness (which is the ability to offer a range of SKUs as per consumer expectations) must dramatically improve to better inventory turn. In other words, the solution must satisfy both the needs pertaining to high availability of SKUs as per consumer preference and minimize surpluses caused due to mismatch in demand.

a Keen eye Although there are several methods to monitor inventory, most frequently retail follows the MIN MAX method (or a variant of it) – a way by which a given SKU is replenished once its inventory position reaches a predefined position. For instance, for a given SKU, the MAX quantity would be 50 & MIN quantity would be 10. So whenever the stock in hand position reaches 10, a fresh order is triggered to replenish the stock back to 50. There is a considerable time period from the MAX position to MIN, and this is dependent on the consumption rate between the MAX and the MIN position. In the event of the consumption rate being higher than planned, it would not be surprising that the SKU is running out of stock (unavailable) at the retail outlet and the reverse situation would result in a non-moving inventory. (The saw toothed graph in fig. 2 reveals the logic based on which MIN MAX based inventory monitoring system operates). The MIN MAX method (or its variant), based on forecasting anticipated consumption which in turn is based on historical analysis, would not be able to solve the stockout or surplus situation. The solution seems to be a method that can match and align the actual pace of consumption (sales) of the relevant SKU to its replenishment. For example, expensive branded jewellery can be expected to stay on the shelf for more time as compared to a washing soap. However, inventory turn performance can substan-

tially be improved provided there is a robust mechanism that monitors the consumption profile backed by a supply chain process.

Replenish!! In a true replenishment environment there are no orders that would flow across the system; instead merely consumption signals move backward in the supply chain. Consider a case of a retail company dealing with FMCG products with stores across locations. It is possible that significant amount of inventory would be lying at the point of sales as compared to the inventory at its warehouse(s). Common symptoms of ageing inventory, high obsoles-

investigating Unavailability

cence, low margins due to discounted sales, etc were observed, thus culminating into a mediocre inventory turn performance of about ‘5’. Further introspection revealed that the company never held planned stocks at the warehouses; it utilized sporadic warehouses as mere transit points. Inventory holding at the warehouses were residual stocks, as every item was pushed to the point of sale with an (erroneous) assumption of holding inventory at the point of sale alone can increase the probability of sale. The ageing inventory at the stores revealed that the assumption was erroneous and in fact caused significant disruption to the performance of the company by blocking investment, wasting display space and consuming management attention. All this because the retail company was forecasting its retail demand based on historical analysis and had been operating on a complex variant of MIN MAX method. We need to remember that demand fluctuations would be highest at the point of sale and minimal towards source of supply. Therefore holding inventory at retail would potentially cause mismatch between demand and actual consumption, thus leading to shortages and surpluses. Counter intuitively applying the ‘Aggregation principle’, at the nodal point (warehouses) that services several stores, the pluses (surge in demand across stores) and the minuses (decrease in demand across stores) get cancelled out. These points offer themselves as ideal candidates to harness the potential for aggregation and can dramatically improve availability of SKUs. Therefore holding maINDIA |

January 2012 | www.logisticsweek.com 13

< The eNable FlOw SeRieS jority of inventory at the warehouses and servicing them to stores, although counter intuitive, seem logical. The FMCG company was holding about 60 days worth of inventory at stores, whereas the transportation time from the nearest warehouse was within four days. Applying common sense, inventory norm to be held at any stocking location should be equivalent to the consumption potential within the replenishment time and further factored for variability. This means merely ‘7 to 10 days’ of stock at stores might have been sufficient enough to be held at the stores against the 60 days of stock. Having established the inventory norm, if the stores can share the actual consumption of SKUs on a daily basis to its source warehouse, the warehouse can replenish the relevant quantity sold, and the goods can potentially reach the stores within the transportation time. The warehouse also needs to share consumption to its source

investigating Unavailability

of shipment. Essentially a pull signal is passed backward in the supply chain based on consumption. With this new conceptual direction, all the nodes in the company’s supply chain are aligned based on experience across the retail formats, with pull based replenishment mechanism, and the availability at the stores dramatically jumps to 95 percent plus. Please refer to fig.3 for a pictorial understanding of the new direction. Of course the variations in retail formats depending upon the products dealt etc need to be evaluated further carefully to customize/develop the holistic & detailed solution, however generically the above conceptual direction holds good for majority of scenarios.

Some Smart Solutions The consequence of falling inventory would offer immense advantages in terms of released space at retail,

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January 2012 | www.logisticsweek.com

which can be further filled up with meaningful products and in turn higher profits. Some benefits that can be envisaged are– higher inventory turns, better ROI, jump in sales, higher profits, higher market share, release of cash and working capital, drop in obsolescence, delightful shopping experience with wider product portfolio, etc. A few challenges need to be addressed too. Retailers need to create infrastructure for warehouses as many outlets don’t hold planned stocks and use it as a transit point. They need to create a unified steadfast culture across the company to deal with unavailability, breaking existing moulds regarding batch sizes, transportation costs, dealing with suppliers to offer frequent replenishments and maybe in smaller quantities to keep up inventory turn performance, have an appropriate incentive model at stores to motivate and leverage upon stores’ staff intuition etc. The first cut benefits can be realized by realigning internal processes within the company and moving towards the consumption based replenishment system. However this is just the beginning. The subsequent ongoing improvements can come only through a win-win partnership with suppliers. Today suppliers push products into retail and entice them through discounts, thus resulting in non-moving inventory. Suppliers are aware that non-moving inventory boomerangs and negatively impacts them, as retail cash is stuck. Also with product life cycles shrinking dramatically, it mandates for a strong bondage between suppliers and retailers to ensure smooth dovetailing on phasing out old products and phasing in the new. Suppliers need the actual consumption information of ongoing products to plan new product launches. With the new system, if communicated appropriately, suppliers would be willing to work on smaller batches, as they can sell much more and gain significantly by offering a wider product portfolio. With the new direction, there seems a significant potential to create a new of pocket of sanity for enduring WIN WIN relationships as both the retailer & the supplier would stand to gain. May be it is apt to summarise by referring to Dr. Goldratt’s phrase from the book ‘The Choice’ - ‘I smile & start to count my fingers 1. One people are good 2. Every conflict can be removed 3. Every situation, no matter how complex it initially looks, is exceedingly simple 4. Every situation can be substantially improved; the sky is not the limit 5. Every person can reach a full life 6. There is always a win-win solution. Shall I continue to count?’

< COluMn

Working With The Enemy IndIa’s LeadIng LOgIstIcs MagazIne www.logisticsweek.com

Collaboration can help solve logistics problems, while helping identify potential problems. But collaboration needs trust, which is a major impediment, says Prem Verma. November 2010 — No.3 October 2010 | Vol.Vol. 4 – 4No.2

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very industry has been talking about collaboration and especially in supply chain for a number of years. What began as mere lip service is turning into reality. The automotive industry is no different. This subject is also the third most discussed topic in any logistics seminars and in some conferences whole sessions have been devoted to this concept. It is important to mention the other two Prem Verma amit mukherjee, Vicefrequently discussed topics in lopresident (iT and supply chain) CEO, and group cio at rpg, has gistics seminars – Infrastructure, TMLD deployed exemplary supplyand GST. But due to overexposure, chain strategies at spencer‘s Verma, CEO, TML retail >> page 34 GSTPrem runsKthe risk of being relegatDistribution Company Limited, a ed to fourth spot and Logistics Skill Development its place. Tata Motorstaking subsidiary, discusses supply-chain depth offers While there is no doubt that collaboration is oneinof the and most overinnovative strategies >> Page 22 used words (and sometimes loosely even) in SCM, if one sees the challenges faced by the logistics industry – be it reducing the logistics cost TElEcom low NEglEcTEd MEETING OF MORE FOR MARITIME‘S 44 logisTics adopTioN 24 waTErways TITANSfrom 16 2013 percent to around LESS 348 percent, ALBATROSS 38 skill shortage, intermodal effiMovement of telecom Why India ignoring inland CSCMP’s 2010 conference Four WMS leversstill thatdoes Policyisand infra issues network equipment opens have waterways at itsIndia’s own and other ciency in distribution,not cash-to-cash cycle time. These at San Diego was bigger canand help enough improve that are hurting aand window of opportunity takers in India peril richer than ever transport efficiency maritime growth challenges would require OEMs, LSPs, end-users and even rivals to collaborate with each other directly or even indirectly as all cost erosion measures and efficiency improvement drivers need some form of collaboration with one entity or another to bear fruition. For any challenge that is immense for your supply-chain to handle, you could join hands with rivals to get a better/quick solution. Rivals are no more untouchables in the logistics game and one should not hesitate to link up with competitors. The constant pressure to improve ‘cash-to-cash cycle time’ will compel organizations to vie for better logistics, and collaboration would be an important tool. I have always maintained that the two ‘Cs’ – Cost and Customer will push manufacturers towards the third ‘C’ – Collaboration.

Method In Motion

Outside The Box

Meeting Of Minds Collaboration cannot be centered only around better utilization of transportation or optimization of warehousing facilities. In a competitive economy, companies not only have to innovate more quickly, produce more effectively but also deliver products and services concretely and be more competitive. Collaboration in the true sense means improving the exchange of information, management of sales and purchase orders and execution/delivery of the same by working

with various stakeholders. Collaboration could be lateral - with your rivals, or vertical – with your dealers, suppliers and end customers. HP/ Electrolux/Sony and Braun formed ERP (European recycling platform) which has cut manufacturer’s recycling and disposal cost by as much as 35 percent. Starbucks has gone one step ahead and collaborated even with their suppliers’ supplier by forging a direct relationship with farmers. Now it gets coffee beans from its sustainable suppliers. A major impediment for collaboration in logistics is TRUST: most organizations fear the risk of information getting leaked to competitors. This can be overcome if we go into complete detailing before executing the plan as one cannot collaborate with each and every contributor in the supply chain. We need to have a robust selection process/method which defines the criticality of the targets. While it should be equally advantageous for all parties involved we still need to work out the risks and cost analysis. We need to build an environment that is credible from beginning to end and greater the bilateral dependencies the lesser will be the risk of letting each other down. But we also need to develop safeguards to minimize damage. Once you have indentified the vulnerabilities in your extended supply chain you need to educate members in the chain before you share information like forecasting, order information, production schedules, etc. It will make all of them understand the expectations and help in identifying the potential problem and take remedial action. LSPs will need to play an important role in achieving collaboration by bringing in a transparent process and systems with the help of robust IT which is critical for long-term collaboration. Globally many of the innovations related to collaborative approach have been innovated by LSPs. They not only are the experts in their field but also have the advantage/experience of dealing in related/complementing products as customers are neither large enough nor have adequate resources to initiate procedures. Collaboration reduces the uncertainty in the supply-chain and can help in reducing inventory. OEMs and LSPs in the US have realized the benefits of shared services and collaboration in the aftermarket supply-chain with the biggest challenge being to replenish the inventory on a more frequent basis in a cost effective manner. With more organizations entering rural markets and appointing direct dealers in tier-2 and tier-3 markets, the collaborative route would come into play in case they want to cost effectively and efficiently cater to these markets. Multimodal transportation needs to become a reality in our country in case the logistics industry has to cope with business requirements as we cannot be largely dependent on by road transportation. It can only become a reality in case there is coordination and collaboration amongst various modes of transports as they need to complement each other than compete. INDIA |

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< Column

Time To Rock The Cradle Women employees in an organization have had more impact on organizational growth than is perceived. They can multi-task and are more adaptive in times of change, says Darryl Judd, COO, Logistics Executive.

ost of us have heard of the APEC Summit, held in Honolulu recently, if for no other reason than President Obama’s controversial decision to stop the custom of APEC leaders dressing in traditional gear. There was however less coverage of a slightly more significant event at the Summit called the San Francisco Declaration, which was passed by Hilary Clinton Darryl Judd, who humbly noted that it “might COO, just make the history books”. Logistics Executive This Declaration was designed to help promote women in the workplace but unlike its precursors, the San Francisco Declaration wasn’t motivated by altruistic design but by new economic data which suggests that women in the workplace have had more of an impact on economic growth than previously thought. The idea that women can be key contributors is still a hard concept to promote in most sectors. Unfortunately, this is particularly true in the supply chain and logistics industry, which is still largely male dominated. There is a lack of reliable data in the market place but recent surveys would suggest that globally the numbers of women participating in supply chain and logistics are as low as 20 percent - 30 percent. According to the industry group “Women in Supply Chain, UK” Women account for just 22 percent of the logistics workforce in England, compared with 46 percent in other sectors, and women hold fewer than 10 percent of the managerial roles in logistics. However there is evidence that things are changing. The number of women taking up tertiary study in supply chain and logistics is higher than ever, with universities globally running a wide range of initiatives to increase diversity. At the same time, there has been an increased awareness that supply chain and logistics qualifications are no longer a male domain. The result being that there is a growing pool of talented women coming through at university level. The participation of women in industry at unskilled and certificate level has also risen. All across Asia women have and continue to dominate light manufacturing sectors (such as electronics as-

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sembly) that have proved crucial to the region’s economic takeoff. It is no coincidence that there has been a dramatic increase in economic performance at a similar rate to the rate of women entering the workforce in Asia. After all, as The Economist, one of the world’s leading business magazine’s recently pointed out, the increase in employment of women in developed economies during the past decade has added more to global growth than China has. Unfortunately once they have entered the workforce the integration of women has not been as successful. Most women have succeeded beyond the lower and middle management tiers of most companies. Stefanie Moran, Country Manager of Logistic Executive Australia is all too familiar with this problem “I have interviewed many innovative and commercially talented women who just aren’t cutting through to the top layer”. This has been attributed to a range of barriers such as the having a male dominated workforce and the perceived juggling act that women are seen to struggle with once they have a family. There is even discrimination from other women known as the “Queen Bee Syndrome”. According to Debbie Reich, National Terminals and Rail Manager at Cement Australia “the Queen Bee is a direct product of the incredibly competitive work environment and the many extra barriers that women have to face to be recognized”. In Debbie’s very successful career she says she found that frequently male colleagues make better mentors than women for this reason. Stefanie however adds that things are changing “It’s quietly encouraging that more of my clients are starting to recognize the untapped potential in these women”. By this she is referring to in increase in initiatives being introduced to attract more women into the supply chain and logistics industry. These include flexibility in work-life balance programs (working from home and with flexible work hours), on-site child-care services and career-pathing and mentoring for women to fast track their careers. For example, Wal-Mart recently announced that they would invest $100 million to help women to develop their jobs skills, including women who work for Wal-Mart suppliers. This shift has been prompted by a range of new developments, ranging from new market research to changes in industry. In terms of research, there was a recent study by McKinsey indicating that women went from holding 37 percent of all jobs to nearly 48 percent in developed countries in the last 40 years. The productivity gains attributable to this modest increase in women’s overall share of the labor market accounts for approximately onequarter of the current US GDP. That works out to more than 3.5

Photos: Vikram Barwal

trillion US dollars and more than half the GDP’s of both China and Japan. There is also a new age of market turbulence ushered in by the GFC and increasingly influenced by globalization. Consequently, the role of the supply chain professional has increased in complexity. The offshoot of this is a more favorable environment for women to gain management level roles. To explain, supply chain and logistics leaders have had their skills recognized and subsequently their roles elevated as more demands are placed on them. They have been challenged to increase their soft skills to meet new management needs in areas such as interpersonal skills and people management, qualities, which have been inherently attributed to women. According to Debbie Reich “relationship building is something women definitely bring to the workplace, however they only succeed if they use this skill selectively as part of their repertoire. They still need to be able to make the hard decisions“. Debbie went on to add “women are also more adaptive in times of rapid change as they generally multitask more broadly than men and with so many different streams and complexities in supply chain, requiring constant revision and evolution, this agility increasingly dictates commercial survival”. Aside from government and corporate involvement, it is the ground root initiatives that have proven the most exciting as they have been created on a voluntary basis by forward thinking men and women within the supply chain and logistics community. In Singapore, for example, Supply Chain Asia, one of the regions leading industry associations is behind the newly created the Women in Supply Chain Group, formed to facilitate this paradigm shift. The Group, which will operate via LinkedIn and in conjunction with Supply Chain Asia, offers an open forum of support and mentoring to women in the sector, with the aim of improving the career life of women already working in logistics (and therefore retain their talents) and to address the gender imbalance issue. Women are encouraged to share their stories with the hope of empowering other women and offering further insight into means by which to advance their careers through the corporate maze. Corporate events, courses and networking opportunities are to be hosted via the group and its news has been well received amongst the more than 22,000 Supply Chain Asia members and subscribers. In recent years, there have been a wellspring of similar groups, too many to mention. All have been set up with a similar philosophies and objectives. For example, an Australian government supported initiative, Women Moving Forward (WMF), is a formalised mentoring program run by the Chartered Institute of Logistics and Transport Australia. This program, which is specifically aimed at the Transport and Logistics (T&L) industry, is open to any woman in any role, in any region, in any T&L company wanting to provide high value, low cost, self-paced mentoring programs to develop and retain women in the sector. To date more than 200 companies have taken advantage of this program with the demand growing. In the UK, Women in Logistics UK was formed in 2008 as a non profit group made up of over 2,000 women and men from the logistics sector, set up to support the careers of women in the lo-

There has been a steady rise in the number of women in the supply-chain in the last few years.

gistics field. The interest in these and other groups demonstrates that there is a sustainable shift towards the investment in women worldwide. Whilst slow in coming, incrementally these changes will add up to a major shift. The outcome will be greater participation of women in supply chain and will address the war on talent by nurturing the talented people right under our noses. The author can be reached at darrylj@logisticsexecutive.com. Darryl Judd, COO, Logistics Executive, has 20+ years of executive experience in aviation, supply chain and logistics transport industry, and held executive positions within the airline & aircraft leasing/charter industry. He is regularly called upon to manage key human resources consulting projects and supporting business to drive changes, particularly around M&A activity and international executive management. INDIA |

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< Feature

Foot Soldier Woodland, true to its rugged image, has held its own amid a plethora of international footwear superbrands. Anuja Abraham reveals the lesser-known story of its supply chain.

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Hey I put some new shoes on And suddenly everything’s right!

Charting the Sales Graph At a time when franchisees are quite

—Paolo Nutini (New Shoes) the rage, Woodland has opted to run

emember the song everyone was crooning to after it gained popularity in 2007? The song, made popular by a sports shoe brand, is about driving away the blues by wearing a pair of brand new shoes. Shoes tell a lot about a person, their moods and more importantly, their personality. And if you have an adventurous streak, then you are most likely to don Woodland on your feet. Today, Woodland is an Indian market leader in outdoor footwear category; it remains untouched and unopposed by any other brand in the same category. “Since we are about offering quality shoes, it is a huge opportunity for us and for buyers willing to pay. We assure durability through a wide range that provides brand value,” says Amol Dhillon, Vice-President (Strategy and Planning), Woodland. As the only Indian brand identified in international markets, Woodland is a sub-brand of the Aero Group that manufactures winter boots in Canada. It is owned and managed by Harkirat Singh, a second generation entrepreneur; he entered the Indian market in 1992 after the brand became popular in Canada, Russia and Europe. “The shoes contribute to around 65 percent of our revenue,” says Mr. Dhillon. Woodland has come a long way in India. What started as a brand for high society urban crowd when it had first set up exclusive stores in Delhi, today it has over 350 stores in India. Over the years, Woodland has expanded and now offers apparels, footwear and accessories. It has also extended its range to formal wear called Woods. But it is the high quality premium leather outdoor shoes that are the face of the brand.

company-owned and company-operated stores. Besides that, it also supplies to over 3,000 retailers including multi-brand retailers in India. As shoes and accessories are trendy products, it is imperative for the company to gauge and understand prevalent trends. This is where its distributors help the company in terms of testing the products before selling them abroad. “Fashion is about knowing the competition. Testing the market helps us to understand our competitors in other countries, and accordingly we decide on ways to promote and sell our shoes,” says Mr. Dhillon. The company has several wellequipped warehouses across the globe to handle orders placed through its online store. Online sales not only add to the company’s revenue, but also help attract the attention of target groups for its brands. “Our online sales have grown tremendously. Simultaneously, we are also cultivating our distributors, retail network,” says Mr. Dhillon. Through a hub-and-spoke model (with the hub located in Central Delhi), Woodland distributes its products throughout the country. Besides this, the company has regional warehouses at Bengaluru and Hyderabad, while Ponta Sahib in Himachal Pradesh and Dehradun cater to distributors only. Two other warehouses in New Delhi are dedicated to apparels and accessories. To save on repeated transportation, Woodland is also careful to stock inventory at its retail stores – sometimes to the extent of 75-80 percent. “Inventory can be an asset when it generates revenue. But it is a liability when it is sitting on your retail space eating into your profits not to mention the transportation costs,” says Mr. Dhillon.

“We are looking at maximum hourly uncontrolled emissions rate at all places of our business.” — amol Dhillon, VP-Strategy & Planning, Woodland

Currently, Woodland manages SKUs of 500 with an inventory turnover ratio at 6.4-6.5.

Setting a Launch Pad As a fashion-conscious company, Woodland is careful to test local reactions. New products are therefore launched at flagship stores in Delhi, Chandigarh and Bengaluru. A lukewarm response will mean sending the product back for redesigning, restyling or modification and later re-launched. This is an important aspect for product sales as Woodland is known to launch products every quarterly (could be in any line). Demand forecasting plays an important role as the shoes or accessories could go out of style. “Unlike FMCG or pharmaceutical, the lifestyle sector is very unpredictable,” confesses Mr. Dhillon. “There is little we can do INDIA |

January 2012 | www.logisticsweek.com 19

< Feature to guard against stock surplus and stock-out. We have control on our production, but not on seasons.” He cites an example when the company saw a complete sell-out of a winter jacket collection launched the previous year. Realizing there could be a shortage, it placed orders for another 10,000 jackets. But with winter delayed, the company too was disappointed in sales.

Paperless Connectivity Technology plays a major role in the supply chain. Since most of the products are priced at a premium, the company tracks consignments through the expensive RFID tags – a system most manufacturers in India are yet to adopt. “The supply chain runs on ERP 2 on cloud to track information globally. All our servers are backed by disaster recovery plan,” explains Mr. Dhillon. “The advanced POS management system for our exclusive brand outlets are seamlessly integrated with cloud and real time inventory management is ensured.” Woodland has recently extended

the network of ERP to its wholesale distributors in India thereby ensuring all retailers and distributors come on a common electronic network for efficient inventory management and distribution. Movement of vehicles is tracked through GPS.

Green Shoemaking Woodland imports its raw hides for shoes from Russia, Spain and Australia. Materials such as polyurethanes are used in making soles. These materials come from German companies like BASF and Huntsmann, known for their eco-friendly standards. Woodland also owns its indigenous tanneries at Jalandhar and Chennai where leather is processed using vegetable dyes. In India, Woodland has invested nearly Rs 80 crore in state-of-theart shoe manufacturing equipment brought in from German machinery maker Desma. The technology is the latest in shoe manufacturing where most of the processes are automated using robotics. Footwear manufacturing is labor-intensive. More manpower means more mistakes.

Switching to automation ensures faster production with fewer flaws. Effluents from the tannery pass through a series of pits where the water is treated with chemicals like ferrous sulphate and lime mixed with poly-electrolytes to precipitate and separate the clear water and sludge. Mr. Dhillon says the process helps it clean up to 25,000 liters of discharge every eight hours. Much of the treated water is again used in making the product. Earlier their factories were based in Noida and Sonepat near Delhi. From there it has moved to excise free and duty free zones in North and North-East India. At present, they have 18 factories and one of their major factories is located at Baddi, Uttar Pradesh. It manufactures more than 85 percent of footwear in India. Woodland operates and manages every aspect of production, distribution and sales at the company owned stores. “We actively participate from conception of a design to a product’s end-of-life cycle,” says Mr. Dhillon. “This way we ensure that environmental impact is accounted for.”

Woodland has over 350 stores in India and offers a wide range of footwear, apparels and acessories.

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The company has its own fleet of trucks and a few tie-ups with logistics service providers like Gati. The trucks have to be serviced regularly to ensure fuel-efficiency. The trucks have to carry full load and not be overloaded or carry less-than-truck load. This way they ensure the trucks are utilized at the optimum level. “We are looking at maximum hourly uncontrolled emissions rate (MHUER) at all places of our business,” says Mr. Dhillon. MHUER calculates the maximum potential of the facility to emit listed air pollutants. This potential is expressed in tons of pollutant per year for each listed air pollutant emitted by the facility.

Carbon-Neutral By 2015 Woodland follows the example set by Leadership in Energy Efficiency and Environmental Design (LEED).

“All our products and processes are environmental-friendly. We use minimum resources, going by international emission norms in reducing the footprints,” says Mr. Dhillon. “We are partners of Lufthansa Miles & More where we offset their carbon footprint for all their flights generating out of India by planting trees.” Woodland is constantly trying to innovate and reinvent their retail and supply chain processes to be seen favorably by their target group. They try to engage and communicate with their target audiences through social networking sites. “We were the first company to upload a carbon footprint calculator online in 2007,” he adds. Recently, Woodland has unveiled their range of biodegradable shoes. They have also collaborated with MTV to encourage youngsters to

Inventory can be an asset when it generates revenue. But it is a liability when it is sitting on your retail space eating into your profits.

connect with nature and plant more saplings. They are also planning to tie up with an auditing firm in Bangalore in 2012 to estimate the carbon footprint of all their stores and factories in India. “We have a target set for us that we want to make Woodland a carbon neutral brand by 2015,” says Mr. Dhillon. “By 2012, our aim is to make all our retail outlets carbon-neutral.”

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< cover story

Photo: Vikram Barwal

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AnshumAn singh, mD & CEO, Future supply Chain solutions Limited

Behind Organized Chaos The Future Group has woven together multiple supply chains in its retail formats, like Big Bazaar and Pantaloons, with varying degrees of complexity. Pamela Cheema investigates.

e speaks with immeasurable enthusiasm and vigor and an obvious love for his work, which despite its crushing deadlines, has left him remarkably unfazed and brimming with energy. Mr Anshuman Singh, MD and CEO of Future Supply Chain Solutions Limited, gives volleys of information in rapid-fire and uninterrupted flow, permitting a close look at the supply chain strategies of the Future Group. The Future Group is Indiaâ&#x20AC;&#x2122;s largest retailer with a turnover of `10,000 crore. Its extensive network of stores ranging from Indigo Nation, Scullers, Big Bazaar, Food Bazaar, the Central Malls and Pantaloons, to name a few, are household brands in the metros and have carved a niche for the Future Group in the buying patterns of the countryâ&#x20AC;&#x2122;s vast consumer base. The Group encompasses verticals like Fashion, Food, General Merchandise, Fast Moving Consumer Goods (FMCG), Electronics, Consumer Durables, Furniture, etc. with an enviable reach into almost every vertical preferred by its multitudes of customers. Its innumerable stores and product categories have spawned complex and distinctly separate supply chains to serve its diverse verticals. INDIA |

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< cover story Move-n-store

Source: Future Supply Chain Solutions Ltd.

Cartons moving on the conveyor belt at the Bhiwandi warehouse, near Mumbai, of the Future Group.

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Largest Indian retailer The Future Group entered modern retail with the launch of the first Pantaloons store in Kolkata in 1997. It is now spread over 17 million sq.ft of retail space and has a significant presence in over 90 cities and towns and 60 rural locations across the country. “The total number of our stores is in excess of 1000 across all verticals,” says Mr Anshuman Singh with obvious pride. “The latest count for our Big Bazaar stores across the country is 153, we have 62 Pantaloons stores, some 205 KB’s Fair Price shops, 33-35 E-Zones and about 19 Central malls. In addition to Big Bazaar, there are close to 50 stand-alone Food Bazaar stores.” While refraining from elaborating on the USP of his Group’s stores, Mr Singh notes that the stores span the entire gamut from Fashion, Cosmetics, Jewellery to Consumer Durables and Electronics. “For instance, we have stores like Hometown which are large format stores, a combination of what an Ikea and

a Home Depot would be in the US. Our Hometown stores have a very large product range with very unique supply chain challenges. Similarly, we have KB’s Fair Price stores, which are small, non-AC formats, but with very high density, limited number of SKUs, low cost and right there in your neighbourhood.” At the opposite end of the spectrum, are the generously-sized Brand Factory stores, of which 70 are scattered across the country. With the vast diversity of the Group’s retail formats, not only does it have distinctly separate supply chains, but also a dizzying number of SKUs. “I think the number of SKUs at any given point of time would be more than a million, while the number of live SKUs would be half a million” says Mr Singh reflectively. “Also, the last time I saw some numbers, I got to know that we have 300 million footfalls per annum across the stores of the Group!” The supply chain employees of the Group number about 1400, but

in addition, the Group has contract employees termed Associates who are employed in its warehouses and transportation branches. While Associates do not figure on the payrolls of the company “you can’t discount them,” stresses Mr Singh. “They are equal partners in our business. Inclusive of them, you could say we have around 4,500 supply chain employees across the country.”

Multiple Procurement strategies The procurement of materials for the various segments is done largely by the respective category buyers. The categories are vast and diverse and range from the more mundane fruits and vegetables category to the exciting and cool sections on electronics. Mr Singh remarks that when his company, Future Supply Chain Solutions Limited, was contracted only to the Future Group, the company handled more than 30 distinct supply chains which can now be sub-divided into the radically Source: Future Supply Chain Solutions Ltd.

Fsc Integrated supply chain

Technology Enabled Supply Chain Managing Variability and Reducing Uncertainty

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< cover story

The Future Group has established Distribution Centres in the vicinity of major cities.

different supply chains of Food and FMCG, General Merchandise, Home and Fashion. Each vertical has its own procurement strategy which is unique to the category and flows from the products it offers. The Fashion segment, for instance, is characterised by a challenging, two-pronged procurement strategy where “the buying team imports goods,” says Mr Singh, warming up to his subject, “and also gets goods manufactured from people across the country and the globe.”The procurement strategy in the Food category is still experimental and rapidly evolving. Earlier, vendors who had mastered the art of low-cost strategies, would supply directly to the stores. “But they had not mastered the art of in-

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creasing the fill rate to organized retail,” points out Mr Singh. After flip-flop experiments spanning several years, the Future Group firmly decided to energise its procurement strategies by establishing Distribution Centres in the vicinity of major cities, where vendors would supply their goods which would then be carried forward to their stores. “These DCs then became our consolidation points,” smiles Mr Anshuman Singh, “ and it was only in June 2011 that we launched our first automated Food and FMCG DC at Bhiwandi, near Mumbai.” This DC is the first fully automated Distribution Centre established by any corporate in the country and is equipped with, among other things, conveying systems, racking systems,

Warehouse Management Systems (WMS) and importantly, a Put-ToLight sortation system. It is being replicated in 12 locations across the country. But even in a single vertical like Food, there are multiple procurement strategies at work, for while there may be a fully automated DC at Bhiwandi, near Mumbai, there are non-automated DCs belonging to

the Future Group working in some eight cities around the country; in the other 70 or 80 cities where the Group has a significant presence there are no Distribution Centres, with the vendors supplying directly to the stores.

similar supply chains Due to a proliferation of verticals, along with complex supply chains,

the Future Group has sought to make the supply chains of various categories similar. This also ensures ease of operations. Within the segment of Fashion, for instance, the supply chain of Big Bazaar and Pantaloons was markedly different. “But they are now becoming similar,”notes Mr Singh. “They now have the same two stocking points, the same technologies, the same ERPs, the same stock-

ing levels and WMS systems. That’s why we now have two DCs for Pantaloons and for Big Bazaar, we are now reducing the number of Distribution Centres from five to two.” But the supply chain of electronics has, so far, failed to fall into this groove of similarity due to its own peculiar characteristics. “This is a completely different category,” says Mr Anshuman Singh somberly. “Our INDIA |

January 2012 | www.logisticsweek.com

< cover story

The Future Group must be India’s largest home delivery company for Electronics and Furniture.

vendors supply to DCs in every city where we have a presence, so today we have to store electronics in 32 cities across the country! There’s another challenge and that’s home delivery. People buy products, like LCDs and TVs and expect the goods to be delivered to their homes. For home delivery, you have to be close to the consumer and store the goods and that is exactly what we have done in the 32 cities where we have a presence. We do home deliveries in Furniture too. Today, we must be India’s largest home delivery company for Electronics and Furniture!” While various fundamentals and processes are similar in many supply chains, lead times can create glitches and lead to unavoidable complexities. Says Mr Anshuman Singh: “In

FMCG, for example, you will stock only for seven days, while for Apparel you will stock for 30 days. On the other hand, fruits and vegetables cannot be stocked for even a single day. If you have your own private brands of Apparel (i.e Future Group’s own brands of clothes), you may end up stocking for 30 days. On the other hand, Apparel from another brand you may stock for only seven days, because you can keep ordering from the vendor.” However, despite the web of intricacies, there are certain supply chains which are similar, notably General Merchandise and Fashion, which have led to easy operations and a racking up of revenues. In General Merchandise, luggage, plastic items, utensils, etc. have become fashion

products and hence the Future Group observes similar supply chains for both these categories. “In fact, we have now co-located the Distribution Centres for both these categories for Big Bazaar,” says Mr Singh. “We have tried to integrate wherever we have found similarities, based not on the formats where they sell, but on the product similarities and the supply chains that they have.” The Future Group had adopted the ‘Push’ system of supply chain in the early years of its retail evolution, but this has now been discarded in favour of the ‘Pull’ system which, Mr Singh believes, is very evolved and sophisticated. Unlike other corporates, in the Future Group there is no ‘general’ supply chain which is equipped to fit each vertical; however, for purposes

206x

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E 28

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of illustrating the supply chain management of the Group, detailed analyses of the Food and Fashion categories would best indicate the strategies of this Group.

the Food supply chain For the Food segment a fully automated state-of-the-art Distribution Centre has been established at Bhiwandi, near Mumbai, which supplies products to Mumbai’s stores. Seven other non-automated Distribution Centres (they will become automatic in the next three or four months) have been located at Kolkata, Chennai, Bangalore, Hyderabad, Pune, Delhi and Ahmedabad and will supply food products to these cities. In the Bhiwandi DC, the food products come to the DC and are then transported to the retail stores with all the other products, whereas

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in some other cities, the dairy and cold chain products go directly to the stores, while the other products go to the DCs. “Our plans are that in another three months we will have integrated Food and FMCG supply chains in 12 cities,” discloses Mr Singh. “In these 12 cities the food products will come to the DCs through the suppliers.” They will then perforce be put through the automated processes of the warehouses and be put into roll cages; the roll cages will then be moved into vehicles with tail lifts and GPS systems, which will then drive to the stores. At the stores, the tail lifts will be unloaded and proceed directly to the shelves, where they will replenish products on the shelves. No manual intervention will be permitted on the route from farm-to-shelf.

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How are you going to get noticed?

For the Food segment a fully automated state-of-the-art Distribution centre has been established at Bhiwandi, near Mumbai. Fast-moving SKUs will be stocked at the automated Distribution Centres. The corporate plans to retain six or seven days of inventory at these Centres to enable replenishment multiple times a day at its stores. But other than these 12 cities “we will continue with the Direct-To-Store deliveries,” says Mr Singh with a shrug. The Future Group’s lean and far-sighted strategies appear to be helping it to make the cut and push growth.

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< cover story

the Fashion supply chain The Fashion supply chain faces a few prominent challenges: firstly, the mind-boggling number of SKUs, secondly, the seasonal changes in this vertical and thirdly, the multiple changes within an SKU. “Challenges come because the lead time in an SKU are very, very, high,” emphasizes Mr Singh. Consider the supply chain of this vertical. From the moment cotton is plucked from a tree to the time it becomes a finished garment, each stage takes months, with corresponding inventory and a supply chain lead time as long as two years or 730 days. At every stage, the production process is close to a month. This is accompanied by a distribution process, with traditional retailers storing at least three-four months of inventory. Since the Future Group is the largest retailer in the country, it feels empowered enough to eliminate certain processes in the system, for instance, there is no distributor in this supply chain. With this disintermediation, the Group has attempted to adopt a lean avatar, slash inventory levels across the chain and whittle down lead times and stock holding points. “All of this has reduced the product time for the end consumer and also resulted in faster fashion for the customer,” says an obviously satisfied Mr Singh with a smile. In the Fashion supply chain, the buying team of the corporate decides on the fabric and design of the garments with the manufacturer and ensures the production of the goods. The finished goods are then loaded into trucks equipped with the GPS system and brought to the warehouses. In the warehouses, quality and quantity checks are done on the products which are then put into automation mode. The SKU descriptions are fed into the system and the goods are then placed on racking systems with the aid of

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Cartons being filled with the Put-To-Light sortation system.

Warehouse Management Systems (WMS). A warehouse can have as many as 100,000 bins where SKUs are stocked; each bin will have an exhaustive list of the stocked SKUs. In the retail stores as products are sold, billing is continuously reflected on software known as Pointof-Sales. The Point-of-Sales software is connected with the ERP of the Group which runs online in all the warehouses across the country through a VPN-based network. An automated replenishment system

has been devised which ‘sits’ above the ERP and which defines each SKU by the quantity that is required in the stores, the lead times between the store and the warehouses, the lead warehousing and processing time and accordingly, it is run every day and replenishes products at the stores. While a supple supply chain delivers products to the end-consumer, the Future Group was often swamped by a deluge of fashion products at its retail stores after end-

of-season sales. The Group was baffled with the large number of unsold SKUs and wondered what to do with the left over stock. “But that’s when we decided to do something radical. Pantaloons Retail has a creative saying ‘Rewrite rules, Retain values’, so we rewrote rules,” says a confident Mr Singh. Pantaloons Factory Outlets were created where old stock mixed with 25 percent new stock sold products at attractive discounts. Thus the Future Group’s supply chains have combined innovation and creativity with sharp business

sense and an unwavering eye on the company’s bottom lines. The gamble appears to have paid off.

optimizing the supply chain The Future Group uses multiple tools to optimize its supply chain. CAPS is a tool often employed by the corporate. These programs are algorithms and mathematical tools which enable research and provide solutions to crucial supply chain issues, such as the lowest time to market and the lowest cost to market.

With the aid of mathematical models, the company has often arrived at solutions about pressing issues, like the number of storage locations it should have and the different models of transportation it should adopt. With its ability to innovate and its aggressive dynamism, the Future Group has punched its way and carved a niche for itself in the highly competitive retail market. So is the Group’s efficient supply chain a differentiator between it and its competitors? Mr Anshuman Singh’s response is immediate and cool. “The learning of so many years is the biggest differentiator. We have evolved and got a state-of-the-art technology-based supply chain in which we have orchestrated all our requirements. Our competitors want to do the same, but we were the first movers, we have the first advantage and they obviously want to do all the things we are doing! Our competitors are where we were three or four years ago!” However, despite the hugely successful automated supply chain of the Future Group one question still remains: the cost of technology vs. manpower in India. Says Mr Singh thoughtfully: “All the technology that we have bought abroad, we have had to indigenize and re-solution for India. A lot of effort has gone into this. But it is still a fact that the cost of manpower in the US is $35,000 per year, whereas in India manpower costs only $1700 per year. So manpower is 20 times cheaper in India. So this is a trade-off that every retail company faces in India, manpower vs. technology cost.” But despite its reservations, the Future Group has moved apace with the automation of its supply chains and warehouses.

consolidating Warehouses Some of the success of the Future Group can also be attributed to its thrift and its ability to rein in expenditure and keep supply chain costs INDIA |

January 2012 | www.logisticsweek.com

< cover story

The company has a fill-rate in the high 90s across all formats.

low. Towards that end, the corporate has built economies of scale and also consolidated its warehouses. Earlier, the company had 101 warehouses, it now has 50 and is fast forwarding its plans to reduce that number to 30, but with a caveat: the warehouses will be on a much larger scale. The company has five million sq. ft of warehousing space and will be adding another nine million sq. ft of space in the next couple of years. It is also constructing large logistics parks in nine major cities across the country. The Future Group has five DCs equipped with the Put-To-Light sortation system, three in Bhiwandi, one in Hoskote (near Bangalore) and one in MIHAN, Nagpur. All the Distribution Centres of the Future Group are WI-FI and completely paperless. Picking of SKUs in the warehouses is done with

INDIA |

January 2012 | www.logisticsweek.com

hand-held scanners, a complete reversal of the scenario four years ago when SKUs were picked individually by warehouse operators of the Future Group. The Bhiwandi DC of the Group, in particular, is equipped with the Put-To-Light (PTL) sortation system, the first of its kind in India, which enables category specific segregated packaging. PTL has bumped up order pick accuracy by nearly 100 percent, increased sortation speed by more than 40 percent and substantially amplified the order processing capacity of the Distribution Centre. The company has a fill-rate in the high 90s across all formats. It has 11,000-plus suppliers, with a few thousands who are major vendors, who form the rock-solid supplier base of the corporate. Like most modern companies, the

information technology systems espoused by the Future Group account for a huge chunk of its success. “Our software systems are a combination of our own in-house developed Vendor Relationship Portals, our WMS and the ERP of SAP,”says Mr Singh. “So you can say that our systems are a combination of SAP, INFOR WMS and VRMP. SAMBANDH, which is an indigenously developed software, is our VRMP.” The corporate has skated to success on the back of its ingenuity and unstinting work, despite an economy which is slowing down ominously. But if in the coming months the Union government takes a favourable decision on permitting Foreign Direct Investment in multi-brand retail, its growth will only escalate and it could well be cream salad days for the Future Group.

26 27 28

April, 2012

India Expo Centre, Greater Noida

During India Warehousing Show, SCZ will showcase 3PL/4PL companies, freight forwarders, logistics parks, warehouses, ports & dry ports, container train operators, supply chain consultants, shipping and logistics companies in front of top user companies visiting the exhibition.

More information on www.IndiaWarehousingShow.com Co-located events

Foundation Partner

Media Partner

Email: mohit@manchcommunications.com Email: siddharth@manchcommunications.com

Creative Approaches to Supply Chain Profitability: A Global Perspective from India CSCMP

2 012 C O N F E R E N C E

1-2 June, Mumbai, India

CSCMP India 2012 1-2 June • Mumbai, India Discover groundbreaking solutions that will enhance your supply chain and the impact it has on your customer’s operations and performance at cscmp India 2012. global supply chain thought leaders will discuss the vital and dynamic processes you need to master to successfully compete in today’s marketplace, including network design, risk management, talent, sales and operations planning, sustainability, and collaboration. This is one event that every forward-thinking supply chain management professional needs to attend!

The top three supply chain hotspots for 2012

More information is available at cscmp.org. Or, contact Neil Basu (India) at nbasu@cscmp.org or Dr. Thomas Speh (USA) at spehtw@muohio.edu.

cscmp.org The World’s Leading Source for the Supply Chain Profession.™

Calendar 2012 January

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Calendar 2012 January

February

Sun Mon tue Wed thu fri Sat

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Creative Approaches to Supply Chain Profitability: A Global Perspective from India CSCMP

2 012 C O N F E R E N C E

1-2 June, Mumbai, India

The top three supply chain hotspots for 2012

More information is available at cscmp.org. Or, contact Neil Basu (India) at nbasu@cscmp.org or Dr. Thomas Speh (USA) at spehtw@muohio.edu.

cscmp.org The World’s Leading Source for the Supply Chain Profession.™

Creative Approaches to Supply Chain Profitability: A Global Perspective from India CSCMP

2 012 C O N F E R E N C E

1-2 June, Mumbai, India

The top three supply chain hotspots for 2012

More information is available at cscmp.org. Or, contact Neil Basu (India) at nbasu@cscmp.org or Dr. Thomas Speh (USA) at spehtw@muohio.edu.

cscmp.org The World’s Leading Source for the Supply Chain Profession.™

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< focus: cscMP

Log.india is carrying a special report on the Council of Supply Chain Management Professionals (CSCMP) which was founded in 1963 and is a leading worldwide professional association dedicated to education, research, and the advancement of the supply chain management profession. With over 10,000 members globally, representing business, government, and academia, CSCMP members are the leading practitioners and authorities in the fields of logistics and supply chain management. This special which is subdivided into five sections gives a holistic view of CSCMP, the history of the organization, its annual event in the United States, the establishment of the india office and its vision for india and the future.

INDIA |

January 2012 | www.logisticsweek.com

Defining Excellence in Supply Chain Management The Council of Supply Chain Management Professionals was founded 48 years ago. Madeleine Miller-Holodnicki, ABC, Manager of Marketing and Communications, CSCMP, reports.

he year 1963 was a historic year, one of tragedy as well as triumph. The Beatles released their first hit record in the United States, I Want To Hold Your Hand. The Boston Celtics won their fifth straight NBA title. Pope John XXIII died. President John F. Kennedy was assassinated. And Martin Luther King, Jr. had a dream. This was also the year that traffic and physical distribution managers, as well as logisticians and supply chain executives, gained a professional organization that would profoundly impact and shape the logistics profession over the next 48 years. The Council of Supply Chain Management Professionals (CSCMP), (also formerly CLM—Council of Logistics Management) was originally founded as the

National Council of Physical Distribution Management (NCPDM) in America’s heartland—St. Louis, Missouri—on a sub-zero day in January 1963. The NCPDM was formed by a visionary group of educators, consultants, and managers who envisioned the integration of transportation, warehousing, and inventory as the future of the discipline. At that time, physical distribution was just beginning to edge its way into the corporate lexicon and make its considerable presence felt in the business community.

Early founders These early founders believed that high-level executives within their own companies needed to be made aware of the critical role that physical distribution could and INDIA |

January 2012 | www.logisticsweek.com 45

< focus: cscMP

Rick Blasgen, CEO & President, CSCMP.

Bob Silverman, Past Chair of the Board of Directors till 2011

should play in improving marketing efficiency and profits. They determined that there was an urgent need for an organization that would facilitate continuing education and the interchange of ideas in this rap-

INDIA |

January 2012 | www.logisticsweek.com

idly growing profession that came to be known as logistics management. One of the founding members of NCPDM (CLM) was Donald J. Bowersox, John H. McConnell University Professor and Dean Emeritus at Michigan State University. “We were beginning to pioneer educational courses in physical distribution in those days,” he recalled, “and nobody was integrating the functions of transportation, warehousing, and inventory to study and discuss how they worked together. This is how CLM came into being.” NCPDM’s constitution and bylaws were formally adopted in Chicago in December 1963, and the first set of officers was literally overwhelmed with inquiries and applications from all over the world. George A. Gecowets was another individual who was there from the beginning, and played an instrumental role in the development of

from day one. “I could call any member with a question or if I needed some assistance with a project,” he related, “and I always got a helpful, friendly response. There is such a willingness to share knowledge among the membership. CLM also enforces a non-commercial environment that truly contributes to your logistics education. People like to attend meetings and other events that aren’t clouded by overt selling. This promotes learning.”

Women In Logistics

Rick Blasgen(CEO & President, CSCMP), Anshuman Neil Basu (Regional CSCMP Executive Director), Nancy Nix (Chair, Board of Directors 2011-12).

NCPDM/CLM. He was an early supporter of the physical distribution concept and joined the National Council of Physical Distribution Management three months after the organization was founded. In 1965, George was asked to serve on the Council’s membership committee. Two years later, he joined the Executive Committee as Membership Chair and, subsequently, served as CLM’s first Roundtable Chair. In February 1971, George Gecowets became the first full-time Executive Director of CLM, which had 625 members at the time. In 1985, NCPDM became CLM, and George was given the title of Executive Vice President and appointed Chief Operating Officer. He retired from CLM in May of 2001 and in his 30 years of service, George oversaw the

evolution of the Council of Logistics Management from a vision to a viable global organization of logistics professionals. “During the past 40 years,” George observed, “Council of Logistics Management programs and services have evolved to meet the changing requirements of business and of the logistics profession. But it has never wavered from its original purpose set forth by the founders in its constitution. Subsequent executive committees and staff managers have remained true to the founders’ vision of the organization when they chartered it in 1963.” A CLM member for 37 years, Kenneth B. Ackerman of the Ackerman Company in Columbus, Ohio, maintains that CLM benefited him

Over the 48 years that NCPDM/CLM/ CSCMP has been in operation, the number of women in logistics has dramatically increased. Nancy C. Haslip, Managing Director, Shared Services at FleetBoston Financial in Boston, Massachusetts, is one of those women. She vividly remembers her first CLM Annual Conference in 1981. “My boss (who was female) encouraged me to attend. I went with some reluctance and was absolutely blown away! I was so impressed. The event was so professional—there was something there for everyone. My long association with CLM has deeply enriched my life…the education, the networking with colleagues, the opportunity to work with young people.” Through a variety of programs like the Student Intern Program, the George A. Gecowets Graduate Scholarship Program, and the Doctoral Symposium, CSCMP endeavors to expose students to the concept of logistics management and make young people aware of career opportunities in the profession. Professor Bowersox maintains that CLM has become the “ambassador to young people thinking about entering the field.”

Advice for Newbies Some advice for up-and-coming logisticians? Long-time CLM member, INDIA |

January 2012 | www.logisticsweek.com

Log. India

Size 206 X 270 mm Date 14.06.2011

< focus: cscMP

(From Left to Right) Saurabh Tyagi, Faiz-ur-Rahman (From Sri lanka), Ganesh Ram, Ajay Singh Bamel, Jeevan Rao Saheb, Neil Basu, Mark Richards, Niraj Ambani, Shoummo Acharya, Ashish Roy, Kailash Sonewane, Premkumar

Bernie Hale, admonishes them to “start networking!” “The best way to do that is through the Council of Logistics Management,” he emphasized. “If you want to be successful, get involved with the Council. It’s hard to be world-class unless you know what the world’s doing. CLM offers that perspective.” CSCMP will continue in its evo-

INDIA |

January 2012 | www.logisticsweek.com

lution as it aspires to even loftier goals in the 21st century, with a new group of visionaries leading the way. These forward-thinking individuals will inf luence and shape CSCMP and the logistics profession to satisfy the unending quest for advanced knowledge and personal communication…one career at a time.

EVENT REPoRT fRoM ThE us The Council of Supply Chain Management Professionals held their Annual Global Conference from Oct.2-Oct.6 in Philadelphia, USA. A report by Anshuman Neil Basu, Regional Executive Director,CSCMP The Council of Supply Chain Management Professionals’ (CSCMP)

An Exhibitor in the Conference’s Supply Chain of the Future Section.

This year the event was held in the historic city of Philadelphia and was termed as one of the best organized so far. The conference’s Opening General Session set a powerful tone spread out over the next three days: supply chain management professionals are meeting the challenges every day by finding creative solutions to problems; there is no better time than today to start preparing for tomorrow. The CSCMP conference gave tips on innovation and advice on how to face critical challenges right there at the conference.

Excellent Participation

Annual Global Conference began with three dynamic pre-conference workshops, giving attendees an extra boost to their three-and-a-half day annual educational journey. The conference this year was attended by delegates from 42 countries. A statistical study shows 58 percent of the 2011 Fortune 50 companies were in attendance and 70 percent of 2011’s Annual Global Conference attendees were at the Director level and above!

Massive participation from approximately 3,500 delegates provided an unparalleled platform for networking and getting in touch with the best and latest trends and innovations in supply chain. There was a quantifiable number of representations this time from India as well who met during the annual Roundtable Luncheon during the conference. The Keynote speaker, Stuart Varney, delivered an entertaining and insightful presentation on what the global economic situation meant to supply chain managers and their businesses as well as trends. The Annual Conference, like every year, was packed with facility tours, nearly 80 educational ses-

sions, the Doctoral Symposium, the supply chain of the future, a supply chain industry networking luncheon and a reception. The General Session speaker, Fernando Aguirre, talked about the importance of being able to adapt to change on a daily basis and the need for organizations to create and embrace a corporate purpose and share it with their employees. He stressed the need to recognize the contributions of every employee and painted a picture of what good leadership looked like.

Presentation of Awards The Mega Sessions, as always, were kicked off with the announcement of the Supply Chain Innovation Award. Another highlight was the Distinguished Service Award which is given every year by CSCMP to an academic, consultant, or practitioner who exemplifies sustained, consistent, and excellent service to the development of the discipline of supply chain management. This award is the highest honor that can be bestowed upon an individual for achievement in supply chain management. The award was presented by Bob Silverman to Dr. James R. Stock, Frank Harvey Endowed Professor of Marketing, University of South Florida. The conference concluded with an inspiring presentation by mountain climber and motivational INDIA |

January 2012 | www.logisticsweek.com

< focus: cscMP speaker, Jeff Evans, who took the delegates on a journey to the peaks of some of the tallest mountains in the world with his tales of leadership, teamwork, heroism, and humility. Jeff’s exploits have been featured on The Today show, CNN

A Global Networking Evening during the Conference.

INDIA |

January 2012 | www.logisticsweek.com

Live, Nightline, ESPN, Good Morning America and in publications like Time, Outside, Sports Illustrated, Climbing and Trail Runner magazines. According to conference attendees, CSCMP’s Annual Global

Conference exceeded expectations on all fronts—from educational content to quality programming, exceptional networking opportunities and everything in-between. Topics ranging from cold chains, collaborative supply chain, supply

chain innovation and best practices in sustainable supply chain operations were discussed in more than a 100 different tracks. The CSCMP 2011 Annual State of Logistics report was released during the conference too.

INdIA REPoRT In June 2011 CSCMP established its first regional office in Mumbai. Mr Rick Blasgen, President and CEO, CSCMP, explains the decision for the launch of the new regional office. In June 2011, the Council of Supply Chain Management Professionals established its first regional office in Mumbai, India. According to a press release issued from its Lombard, Illinois office, this office has been established to serve the growing base of CSCMP members in India and the surrounding areas, as well as to expand its reach and programming in the south Asia region. “As supply chains become increasingly global, CSCMP continues to reach out to supply chain management professionals in their own communities,” said Mr Rick Blasgen, CSCMP President and Chief Executive Officer. “India is poised to become one of the world’s major supply chain hubs, and we are excited to offer those working in the region the comprehensive menu of CSCMP products and services to help them grow their businesses and

their careers.” Heading CSCMP’s new India office is Anshuman Neil Basu, Regional Executive Director, CSCMP. The goals of the India CSCMP Regional Office are to expand awareness of CSCMP and its value to supply chain management professionals working in the region. “India’s business leaders of today understand that effective supply chain management will play a critical role in the success of their organizations, now and into the future,” Mr Blasgen added. “CSCMP will be there to ensure their success.”

VIsIoN foR INdIA Mr Rick Blasgen, President and CEO, CSCMP, gives his vision for India. The President and CEO, CSCMP, is upbeat about India. From Philadelphia comes his view of India’s potential and its future in supply chain management. He notes that “CSCMP’s Annual Global Conference in Philadelphia was a resounding success, with nearly 3,100 people from 45 countries in attendance. We presented an outstanding program

One of the many Session Tracks in progress in parallel INDIA |

January 2012 | www.logisticsweek.com 53

< focus: cscMP

The closing session with Jeff Evans, Motivational Speaker and Mountaineer

INDIA |

this year. Our conference addressed the knowledge, skills, and mindset required of all supply chain management professionals so they will be equipped to deliver the top-notch service and value that is expected in today’s corporate environment. The combination of targeted educational sessions, numerous networking activities, and interactive peer-to-peer discussions emphasized the importance of face-to-face meetings in this digital age. “At the conference, we formally January 2012 | www.logisticsweek.com

announced the opening of the India CSCMP regional office in Mumbai, to better serve the growing base of CSCMP members in India and neighboring south Asia regions. India is poised to become one of the world’s major supply chain hubs, and we are excited to offer those working in the region our comprehensive menu of products and services to help them grow their businesses and their careers. The CSCMP staff will also be developing educational training programs and creating networking

opportunities to meet the needs of the India supply chain management community. “To inaugurate our India office, we’ll be hosting our first conference in Mumbai from June 1-June 2, 2012. The event will feature speakers from around the world who will be presenting a global perspective on creative approaches to supply chain profitability. “And we have recently launched our groundbreaking new certification program, SCProTM, which will

Nancy Nix, Chair of the Board of Directors 2011-12.

enable Indian professionals to elevate their mastery of the latest logistics and supply chain management knowledge, theory, and best practices to the highest level possible.”

ThE INdIAN scM sToRy Dr Nancy Nix, Chair of the Board of Directors, CSCMP, believes that the organization provides immense opportunities for professional education in India. She notes that since India’s footprint in the global econ-

omy has grown, CSCMP will be able to contribute significantly in the south Asian region. Dr. Nancy Nix said that “CSCMP’s Annual Global Conference is an outstanding venue for professional education and business networking, which are cornerstones for professional growth and business performance improvement. This is why thousands of supply chain management professionals from around the world attended this year’s CSCMP annual conference in Philadelphia. The program provided attendees with real world solutions that they were able to take back to their companies to drive improvements as well as a variety of networking opportunities to expand their professional connections. She continued that “With the growing importance of India in the global economy, the need for supply chain talent has also grown. The recent opening of CSCMP’s Regional Office in Mumbai is very exciting and will enable CSCMP to make a significant contribution to continued business growth and economic development in that area of the world. The upcoming India Conference is an outstanding opportunity

for supply chain leaders and professionals in India and the surrounding region to gain new insights, expand their networks, and hone their skills to improve business performance. This is a ‘must attend’ event!”

Appointments To cscMP certificate courses Launched , Global Event In India This section focuses on appointments made to CSCMP’S Board of Directors, starting certificate courses in supply chain management and the launch of a global event in Mumbai in 2012.

Appointments To Board of directors Recently in October this year, the Members of the Council of Supply Chain Management Professionals (CSCMP) elected officers and appointed chairs to its 2011-2012 Board of Directors during the association’s annual business meeting, held in conjunction with its annual conference in Philadelphia, Pennsylvania. Nancy W. Nix, Executive Director, EMBA Program and professor INDIA |

January 2012 | www.logisticsweek.com 55

< focus: cscMP of supply chain practice at the Neeley School of Business, Texas Christian University (TCU), was elected to the office of Chair. Dr. Nix provides leadership for TCU’s Executive MBA program, teaches graduatelevel courses in global supply chain management and supply chain strategy, and has led study-abroad experiences in China, India, and Argentina. Keith Turner, vice president marketing and sales, ALCOA World Alumina, ALCOA, was named to the office of Immediate Past Chair. At ALCOA, he is responsible for managing global commercial matters related to bauxite, smelter and non-metallurgical grade alumina, and aluminum powder.

fication provides professionals with an exceptional program that will help them demonstrate 21st century supply chain management skills and expertise.” PICTURE FILE: PICTURE 11.JPG

fIRsT ANNuAL coNfERENcE To BE hELd IN MuMBAI

Another major announcement was the launch of the first ever Annual Conference in the South Asia region to be held in Mumbai, India, in 2012. “The Conference will be held on June1-June2, 2012 in Mumbai, and will be of a scale and quality which India has not seen before in supply chain and Keith Turner, Past Chair of the Board of Directors, logistics. We expect reLaunching certifipresent. gional delegate particicate courses pation and expert speakAmong other major aners to speak on futuristic topics,” nouncements this year by The Coun- tire supply chain.” cil of Supply Chain Management According to a press release is- said Anshuman Neil Basu, Regional Professionals was its unveiling of sued by its Lombard office, Judy Executive Director, CSCMP India its new certification program, SC- Schieve, manager of certification Pvt. Ltd. “This will be a premier ProTM, at its annual conference in programs, CSCMP, notes that “The event and a must for all supply chain Philadelphia, Pennsylvania. SCProTM certification will enable leaders and those who are interested The SCProTM program is a rig- professionals to demonstrate to in being a part of the supply chain orous, three-level certification that their employers that they are the journey in this country. We are honoffers global supply chain manage- kind of leaders who will positively ored to be hosting this first ever conment professionals a way to dem- impact their organizations’ bottom ference for the region in India, startonstrate a broad range of industry lines. When a candidate completes ing 2012. The quality and format skills and mastery of end-to-end all three levels of the program, he or will largely be the same as what we supply chain functions.“We are ex- she will also have a portfolio of work witness at CSCMP’s Global Annual tremely excited to unveil CSCMP’s to augment his professional experi- Conference. In the coming months, we will see several announcements groundbreaking certification pro- ence.” gram at our annual conference,” The supply chain management in this regard, and we have already said Rick Blasgen, CSCMP President profession has evolved dramatically started our global promotion and and Chief Executive Officer. “Our over the past few decades, points out very soon the supply chain member members overwhelmingly asked us Mr Blasgen. “Today’s supply chain community and leading business to develop a comprehensive certifi- requires multidisciplinary capabili- schools will have the details of the cation, that diligently measured and ties, demonstrable and quantifiable program. The event will be highly accurately reflected an individual’s success, and continuous study of promoted in various forums in Asia skills and knowledge across the en- the field. CSCMP’s SCProTM certi- and Europe too.”

INDIA |

January 2012 | www.logisticsweek.com

< EVENT REPORT

Light Of Day

ogistics Next: Exploring New Frontiers of Technology in Logistics was organized by Hannover Milano Fairs India Pvt. Ltd. and managed by LOG.India. The CeMAT event held at the Bangalore Exhibition Centre on December 7, 2011, was inaugurated by Tessa Marheineke, Director, Global Fairs, Deutsche Messe, Germany. The half-day CeMAT seminar began with a welcome speech by Ms. Marheineke. Sudhir Patil, MD, Hannover Milano Fairs India gave the subsequent opening remarks. The first track of the seminar was Automation: A Status Report, And Discussing Cost And Performance Deliverables. Vikas Choudaha, Asst. VP and Business Head, Godrej & Boyce Mfg Co. Ltd., gave a presentation on the subject. A successive presentation was made by Asim Behera, GM, SWISSLOG India. His presentation was MHE: Driving Efficiency With Technology. The concluding section of the seminar comprised a panel discussion on Factors Influencing The Demand Of Warehousing In The Region. The panelists included Puneet Prakash, Director, Jayem Logistics; Padmini Pagadala, MD, TPG Consulting; Mr. Choudaha and Mr. Behera. The panel was moderated by Aanand Pandey, Editor, LOG.India.

Date: December 7, 2011 Event: Logistics Next: Exploring New Frontiers of Technology in Logistics Organizer: Hannover Milano Fairs India Pvt Ltd/LOG.India Venue: Bangalore Exhibition Center

INDIA |

January 2012 | www.logisticsweek.com

Consumers must adopt best practices and develop warehouse strategic masterplan. They must also imbibe a pro-automation attitude. â&#x20AC;&#x201D; Asim Behera, General Manager, SWISSLOG India

Automation in warehouses will result in data integrity with barcoding ensuring costeffectiveness, RFID ensuring real-time data transfer and ease in trackability. â&#x20AC;&#x201D; Vikas Choudaha, Asst. VP and Business Head, Godrej & Boyce Mfg Co. Ltd.

(From L-R) Puneet Prakash, Director, Jayem Logistics; Padmini Pagadala, Managing Director, TPG Consulting Pvt Ltd; Aanand Pandey, Editor, LOG.India; Vikas Choudaha, Asst. VP and Business Head, Godrej & Boyce Mfg Co. Ltd.; and Asim Behera, General Manager, SWISSLOG India.

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January 2012 | www.logisticsweek.com 59

< Special Supplement

AutomAtion

Today and Tomorrow

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January 2012 | www.logisticsweek.com

Automation is the future of warehousing all over the world and Indian warehouses should realize this soon, says Nitin Rajagopal.

raditionally, technology has always given a pass to warehouses in India which have remained drab and unsophisticated, while developed countries have taken a quantum leap in automated warehousing. But the winds of change are sweeping the Indian logistics industry and automated warehouses will be the norm in future in India. In a stateof-the-art warehouse, pretty much everything takes care of itself without any manual intervention â&#x20AC;&#x201C; no people running around carrying boxes, no one sitting with a table-chair setup, recording each movement into or out of the warehouse or checking where incoming boxes need to go to or where outgoing boxes are picked up from. Instead, everything is RFID tagged or scanned by a bar code scanner and taken care of by programmed machines. Boxes on a network of conveyors or rollers which are as smooth as the best road networks, are picked up by robotic arms and dropped off near cranes. The cranes then hoist them on to racks so high one canâ&#x20AC;&#x2122;t even see them from where one is standing. The height of the storage racks runs into tens of storeys. The SKUs are scattered over the warehouses. Sifting through this enormous complexity comes easily to programmed machines, though it may be difficult for humans. In these automated warehouses (which I often refer to as the Disneyland of automation!), machines seem alive and work scrupulously without failing, tiring or complaining and as long as you keep greasing them well, they never think of even going on a strike!

Warehouse automation technology has introduced innumerable words and acronyms into the automation technical glossary like WMS, AS/ RS, AGV, RFDT, RTWCS, S/RM, batch picking, case picking, EPC, GPC, sortation, forward picking etc. and some unusual terms like each, unit and wave. We will get to these in a while. Thus a fully automated warehouse is a place where you can put things out of mind and out of sight. Such a warehouse can keep track of a million things so that you can ponder over more important things like making and selling stuff, not storing it.

Why indian Warehouses Should automize The goal of an automated warehouse is to reduce cost and product processing time. In a country like ours, labour comes cheap and companies are not too keen to invest in technology. But this shortsightedness is slowly, but steadily giving way to foresight. Automation equipment can last as long as 20 years, and companies need to take into account discounted cash flows to determine the returns on their investment. With Indian markets expanding, the current warehouses will not be capable of handling the work cycles they will be burdened with. And with the employment generation schemes of the government (NREGA) raising the minimum wages and labor rates to more respectable and less exploitative levels, cost saving labor intensive warehouses have to transform into more automated and machine-intensive warehouses, employing skilled human resources. Warehouse automation is still a

Automation equipment can last as long as 20 years, and companies need to take into account discounted cash flows to determine the returns on their investment. â&#x20AC;&#x201D; nitin Rajagopal, Manager, Strategy Practice of Chainalytics

far cry in India, with the technological and upgrading efforts of companies completely ignoring or missing this important aspect of logistics. The criticality of this link between manufacturing and distribution cannot be overstated. An improvement or a glitch at this stage can significantly affect the performance of the entire manufacturing and logistics system. But with the current interest in automation in the logistics industry, the future looks promising for warehouse automation in India. FMCG companies in India will spend around 10-15 percent of net profit on technology implementation and upgrade. When the goods and services INDIA |

January 2012 | www.logisticsweek.com

< Special Supplement tax (GST) is implemented and CST is phased out from four percent to nil, companies will have to rework their supply chain and logistics cost. Post GST will be the coming of age in technological advancement of these companies, as they realize the need for improvement in overall supply chain efficiency levels. Real benefits will come with technological integration throughout the supply chain, and warehouse automation can only benefit from such an outcome. Warehouse costs are usually around 20 percent of total logistics costs and there is huge scope for savings. “Do I go in for automation?” is a question of the bygone era. The pertinent one now is “What level of automation do I need?”

INDIA |

regarding its capacity as well as automation. It might appear at this stage that we are merely scratching the surface when it comes to warehouse design and automation and yes, we are. Theoretical pursuits in warehouse design and automation cannot ignore the practical aspects of life at a warehouse, where enormous sizes and quantities are handled on a daily basis.

automizing processes

Step-By-Step efficiency

Where is automation coming from and where is it headed to? The subsequent pages should clear any ambiguity on the subject. One of the first things that warehouse automation makes people think of is the use of high rise racks with machines (Storage and Retrieval Machines – S/RM) moving within an

In a warehouse, material flows through specific stages and it is these stages that automation will target. The activities in the gray boxes (on the opposite page) are listed in increasing levels of automation. It is important to understand that human presence cannot be done away with completely nor is it recommended, since critical areas like safety, maintenance and accident management are best left to humans. However, automation is not a panacea for all the inefficiencies in warehouse management. Instead, it is the administration of automation in well-measured doses to each of these areas that delivers the best results. Methods chosen for warehouse processes are heavily influenced by the kind of product and packaging. For instance, the storage method selection and the layout of a warehouse would typically depend on the inventory profile. One has to decide whether one storage method will fit all items or a mix of storage methods have to be used for different items. Similarly, activity profiles are typically used to plan the layout of the warehouse and to answer questions

Mini-load AS/RS in action.

January 2012 | www.logisticsweek.com

aisle, serving both sides. The loads, typically boxes, crates or pallets of standard sizes, are stored in and retrieved from these racks automatically. This is an Automated Storage and Retrieval System (AS/RS). The height of the highest systems may be a vertigo-triggering 100 ft. These are used not just for the sake of automation, but for the advantages they offer - high density storage in narrow aisles (allowing utilization of cubic space) and accurate inventory control since each put away and storage is accounted for by the computerized system. Other advantages are better integration of this kind of storage system with the production and distribution systems and of course, reduction in manpower with increased safety and security of the material, since access is limited and privileged.

The goods arrive in a truck, are bar-coded or RFID tagged and unloaded onto conveyor belts on which they get a ride till the P&D (Pick and Deposit) stations. Conveyors can be used as load sorters too, with scanners and tag readers perched just where the conveyor belts part ways. P&D stations are transfer stations where loads are supported in a manner suitable for handling by the S/R machine. The goods come in and are stacked by the AS/RS. If you have a childhood aversion to huge towering stacks of material, you can go for limited height storage and use an unmanned lift truck with a limited adjustable lift/lower mechanism. This is also called an Automatic Guided Vehicle (AGV). It uses a wire path to locate a rack for storage or retrieval. The goods on the way out will fol-

low a similar process and before getting loaded onto the outgoing truck, can enter the system by scanner or tag readers. Full-scale lights-out automation is rarely seen and most of the Warehouse Management Systems (WMS) are semi-automatic, with varying degrees of manual tasks. The explosive growth of the internet has had other advantages apart from the booming growth in social networking sites and multimedia piracy! One of these is that it has enabled warehouses to be managed by computers stationed at the warehouse rather than at a centralized location. This decentralized warehouse can be controlled in real time with the help of minimum staff who can carry, for example, hand held laser scanners linked to the computer via radio frequency data terminals (RFDT). This method allows records to be automatically and immediately updated to indicate that material has been received, put-away, picked, and shipped. The activities that go in the system as requests are queued, prioritized and then allocated a resource. Collectively, such systems are known as Real Time Warehouse Control Systems (RTWCS). This is actually better than it sounds, because if there arenâ&#x20AC;&#x2122;t any pending requests, the RTWCS can assign a person to do other tasks, like counting inventory, much to the irritation of the happily idle fellow! It is easy to see that the above system is semi-automatic, with the RTWCS being the director of the whole show at the warehouse. The better the information with the RTWCS in terms of time and accuracy, the better the warehouse management and inventory accuracies. Belt conveyors or rollers are increasingly being used to move material from one place to another within the warehouse, particularly from the unloading to the picking area or to the loading dock after retrieval. If you could sit on one of these and avoid getting dumped in the defect

bin by the robots, they will take you through most of the warehouse finally delivering you as a ready-to-ship package or ready-to-store, depending on your choice. They are very popular for their cost effectiveness too, since just a two horsepower motor can be used for lengths up to 100 feet. Automation of material movement is most common, followed by sortation, order picking, loading and unloading systems. One should try and think of this automation activity hierarchy when one wishes to grow. The business need in terms of capacity is best addressed by automation in most cases. Prolonging the life of the warehouse or the distribution centre, improving cost and service and increase in productivity by reducing staffing levels are other business needs that follow.

advantages Of automation Perhaps the greatest advantage of automation comes from increasing storage capacity, in some cases even up to three to four times. Warehouse automation also enables maximum possible usage of floor space and height, while building costs can be kept to a minimum, since automated systems weigh much less than narrow aisle trucks. Productivity increases can be drastic, since automated systems are faster, work 24/7 and take the same time no matter how high or how deep the material (or the pallet) is stored. They can be efficiently integrated with production for justin-time operations. With an inventory tool in place, faster throughput enables accurate inventory tracking at all stages and maximizes stock availability (better order fills). If one compares AS/RS with forklifts or aisle trucks over the life of the machine, significant savings can accrue and ROI can be highly attractive. The operational costs for an automated warehouse are also low, regular electrical and mechanical maintenance and recharging of INDIA |

January 2012 | www.logisticsweek.com 63

< Special Supplement batteries being the common cost heads. To sum it up, automated warehousing can provide space savings, lower building costs and improved productivity. It also results in more efficient material flow, fewer people, safer operations, reductions in inventory, increased reliability, reduced running costs, better ROI and low lifecycle cost.

the indian context At present, India has very few large modern warehouses with facilities like cross-docking incorporated in the design. And we aren’t even talking automation yet. Large organizations have kept away from automation for a variety

of reasons. Not having the pressing need for technology is one of the fundamental reasons. Justifying the high cost of equipment involved is another. But things are changing. Warehouse automation services are gaining prominence and as results start getting their due weight due to word of mouth, more demand for such services will be in the offing. One method to calculate the ROI on warehouse automation is to determine the savings from reduction of invoicing and counting errors. Add to this the working capital reduction obtained by reducing the safety stock inventory and extrapolate this total saving to the life of the machine (15-20 years). In this manner compa-

nies can save hundreds of thousands of dollars or Indian rupees. As innovations make the equipment cost effective, as labour rates increase and bridge the inequality gap, as volumes go up driving warehouse operations to the brink of their handling capacities, every rupee invested in automation will have been well spent. When the industry realizes that every second saved in the product’s supply chain saves money as well, that working capital realizations of just-what-you-need-nothing-less-and-nothing-more come to organisations and that technology adoption saves more than it costs, warehouse automation will see its best time in India.

Imprint Feature

Gandhi Automations Offers F3 RE30 Retractable Tail-lift for heavy duty loads Applications: The retractable tail lift F3 RE30 is the ideal tail lift for loading and unloading heavy or specialist loads where there is also a need for dock loading of the vehicle. This is made possible by the retractable lift stowing under the vehicle floor when not in use. The F3 RE30 is available for trucks and semi-trailers. Standard Equipment Platform q Platform in aluminium alloy. q Teflon wheels to prevent platform wear Mechanical functions Steel guides with high yield limit, treated and chrome plated with adjustments ability. q Tail lift deployment and stowage under chassis by means of double extension cylinder. q Automatic hydraulic tilting of platform to ground. q

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q q

Mechanical stop of tail-lift arms against equipment(adjustable in 3 positions) Pre-assembled control box support for quick installation. Type approved tail lift platform forms the rear bumper.

Controls External control box. q Illuminated control panel. q Control with no electronic components. q Cut off switch with key. q Two-hand use for operator’s safety. q Motor with thermal safety device. q Motor relay with 350 A silver pin(peak current) q Proximity switches for automatic positioning of tail-lift. q

Choice of mounting Bolted assembly brackets. Product finishing q All steel parts of the hydraulic kit have been previously sandblasted, then treated with hexacrylic electrocataphoresis(expect for cylinders,painted with biocomponent polyurethane enamel) q Material conform to EC standards. q Steel cataphoresis-treated pins. q Anti-friction self-lubricating bushings with lubricator. q Delivered in assembled kit and tested, mounted to the chassis by bolting, eliminating the need to re-painting the vehicle. q

Gandhi Automations Pvt Ltd 2nd floor, Chawda Commercial Centre, Link Road, Malad (w), Mumbai -400064 Ph:-022-66720200/300(200 lines) Email: sales@geapl.co.in Website: www.geapl.co.in

tail Lifts

January 2012 | www.logisticsweek.com

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Bad logistics is often the cause for unhappiness and displeasure. It could be due to numerous reasons from trafﬁc snarls, to delays in paper work or some little-known regulation that could cause delays in delivery. But to the receiver, it is bad logistics. Often, when you have asked for something to be delivered at a pre-decided destination and especially if you are eagerly awaiting the delivery, nine out of ten times it will never arrive on the scheduled date. This happens so often each time I order some books/CDs/appliances. The service provider will tell you that he has made more than one trip and there was no one home. And then you get into an argument. Is ensuring prompt delivery so tough? Don’t responsible people sitting in ofﬁces take stock of goods that have arrived and those that need to be delivered? Is the infrastructure in such doldrums? Surely, they are not short-staffed. Nor do people live in such remote areas (In the movie Il Postino, a make-shift postman delivers a letter with prompt regularity to his only customer who lives on the top of a hill) where they need to search out more deliveries within the area to justify their trip. And God help you if your parcel happens to be a passport.

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Your’s truly, Jayashree Mendes

Editor, LogisticsWeek

Firms Rethink Supply Chain Risks

Disasters in Japan, Thailand highlight need for continuity plan Bangkok As flooding in Thailand disrupts supply chains in many industries, the event—along with Japan’s March earthquake and tsunami—is prompting many to consider aspects of supply chain risk that might have been previously overlooked, says a recent report in Business Insurance. While many expect global sourcing to become an even larger factor for businesses going forward, recent events are prompting companies to consider the geographic concentrations of suppliers, the need for backup suppliers and reengineering processes to accommodate backup components should supply chains be disrupted. With an estimated 45 percent of the world’s hard-drive production located in Thailand and flooded plants affecting production by major manufacturers such as Seagate Technology Inc. and Western Digital Inc., some analysts say the disruption could affect PC production through the first half of 2012. The flooding also has had a major impact on the auto industry, where disruptions at Thai auto manufacturing plants and parts producers reportedly is expected to result in lost production of 250,000 vehicles worldwide. Many Japanese companies relocated production to facilities in Thailand after the March earthquake and tsunami. London-based law firm Reynolds Porter Chamberlain L.L.P. said the move to Thai facilities helped many Japanese companies mitigate their losses after the Japan disaster. But many now face further losses as a result of the floods in Thailand. “The problem for insurers who provide business interruption cover to Japanese manufacturers is that they have to cover the losses stemming from the Thai flooding because so many businesses moved some or all of their supply chain there,” Daniel Saville, legal director in the reinsurance and corporate insurance department of Reynolds Porter, said in a statement. “Moving production from Japan to Thailand was “Plan B.’ The question now is whether those businesses have a “Plan C,’” he said.

Source: cleveland.com

Lead IndIa’s

Car manufacturers across the world suffer delays as factories lie submerged. Gerry Alonso, senior VP of claims at Factory Mutual Insurance Co., noted that the “slow developing” nature of the Thai catastrophe makes it difficult to get a handle on the extent of losses. And, the duration of the flooding could exacerbate the losses. “We’ve had some clients that have been able to procure divers and go in there, but that gives you an idea of what you have.” Mr. Alonso said. “The frustrating part from a claims perspective, you can’t assess losses until the water’s gone.” William J. Montanez, director of risk management at Ace Hardware Corp. and a member of the board of the Risk & Insurance Management Society Inc., said his company hasn’t been affected by either catastrophe, though it relies on overseas suppliers. Mr. Montanez said, “At the back end, we have to look at safeguarding and how we can make it less risky to do it.” With the Thai floods raising awareness of the risk of geographical concentrations of suppliers, Linda Conrad, director of strategic business risk management at Zurich Financial Services Ltd. in New York, said her company has been working with clients to

identify where suppliers and industries are concentrated. “I think this illustrates the need for better continuity plans, including backup supplier arrangements, diversifying the locations of suppliers and using different backup suppliers than competitors.” Ms. Conrad also said companies are starting to ask existing suppliers about their own continuity plans. “People are also starting to do a lot more scenario analysis, including calculating the potential impact of having to re-engineer processes if alternative components or parts don’t match the specifications.” In general, the recent supply chain disruptions are leading many companies to embrace “that resiliency mindset of: Let’s try to think through some hypotheticals and plan for this when it costs us less than when we are in a crisis,” Ms. Conrad said. “At the end of the day I think the onus that’s going to be on risk management and management in general is how can we get a preview of what the future might look like and how will we respond to it,” Mr. Montanez said. “That’s what ERM is all about.”

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< panorama Off the shelf

India's Store Wars: Retail Revolution

odern retail is becoming the next hot sector of the Indian economy. Established players are being joined by the big names of Indian business who plan to spend billions rolling out supermarkets. Property developers too are getting on with the "malling" of India. On the sidelines of this are players such as Wal-Mart, which already has a tie-up with Bharti. But what Wal-Mart wants is the right to set up its own stores in India. The problems are astronomical. There is no reliable cold chain and transport logistics are appall-

ing. The lack of managerial talent is huge. The "kirana" stores have to be catered for, as do the farmers who grow the produce. How well will these disparate players cope with the pressures of a dynamic and fast-moving industry? India's Store Wars: retail revolution and the Battle for the next 500 million Shoppers By Geoff Hiscock Publisher: Wiley Price: `1,220

The Retailer's Book of Selling Games and Contests

n most retail stores, salespeople arrive at work with little enthusiasm to sell. The truth is that retail selling can be a little boring. It's up to owners and managers to provide the motivation that inspires people to excel, even when store traffic is slow. One of the best ways to accomplish that is with selling games and contests. This book contains more than one hundred selling games and contests that any retailer can use to motivate their staff, improve their sales skills, and generate extra sales during slow traffic periods. Geared toward retailers of all industries and all sizes, this book will appeal to those with an interest in improving the performance of their salespeople and driving sales higher. The book gives deatils of how to use games to sell specific merchandise, increase add-on sales, sell higher priced merchandise, out-

lines how to structure games and contests, and when to run them and for how long. The book will help managers build their sales staffs' confidence and abilities through fostering a competitive spirit and rewarding high sellers. The author Harry J. Friedman is an international retail authority, consultant, and the most heavily attended speaker on retail selling and operational management in the world. The retailer's Complete Book of Selling Games and Contests: over 100 Selling Games for Increasing on-the-floor performance By Harry J. Friedman Publisher: Wiley Price: `1327

When Health Care Employees Strike

his thoroughly revised and updated second edition of When Health Care Employees Strike is a survival guide for health care administrators who must plan for and cope with the inevitable labor dispute. Written by two experts in the field of health care labor relations-- this much-needed resource includes critical information and useful strategies health care executives must be prepared for. The authors provide information on labor law, analyse the types of disputes, advice on how to use mediation effectively, suggest assessment of manpower needs

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before a strike occurs, and gives ideas for contingency plans. In addition to presenting information on ways to prevent strikes, the book also contains a step-by-step manual to ensure that health care organizations can continue operation during a labor dispute. When Health Care Employees Strike: a Guide for planning and action, 2nd Edition By Kenneth F. Kruger, Norman Metzger Publisher: Wiley Price: `5,050

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BloGoSpHErE Supply Chain matters Blog 2012 predictions For Global Supply Chains Bob Ferrari Once a year, just before the new year, the Ferrari Consulting and Research Group and the Supply Chain Matters blog provide a series of predictions for the coming year. Our process includes a re-look at all that occurred in 2011, a reflection of future implications and the soliciting of input from clients, thought leaders and other supply chain and blogosphere observers. We will kick-off this series with the full listing of our ten predictions for the upcoming year. This year’s effort was a bit challenging since the global business climate is in a period of high uncertainty and corresponding supply chains are in a fragile state. Here are the Supply Chain Matters Predictions for Global Supply Chains in 2012: 1. A continued spillover of uncertainty of events related to the global economy will make business growth highly challenging, and thus provide a challenging year in global SCM. 2. Commodity and component price increase levels experienced in 2011, with some exceptions, will moderate in 2012, but procurement teams need to maintain a keen eye on both pricing and supplier performance and supply network agility. 3. As a result of supply chain disruption events in 2011, senior management among manufacturing firms will call for a re-visit of supply chain component and finished goods outsourcing strategies, weighing overall risk as well as low cost parameters.

rESourCE CEnTEr Building the Profit-Focused Supply Chain Acorn Systems Profit-Focused Supply Chain Management (PFSCM) leverages the new Time-Driven Activity Based Costing (TDABC). With this approach, companies can understand resource consumption within their company and with supply chain partners. PFSCM gives high visibility into supply chain performance, and enables a company to take a granular approach. Supply chain partners who have implemented TDABC can share not only their cost metrics along process links, but also their process models. Identifying these core process triggers in the supply chain can help align partners toward capturing enormous profit improvement. We believe that the profit improvement opportunity through this sort of collaboration is larger than the traditional, sometimes adversarial supply chain initiatives previously attempted.

4. Three specific industry sectors, B2C, Pharmaceutical and High Tech, will be especially affected by significant supply chain challenges or turmoil in 2012. 5. The concept for “supply chain control tower’ coupled with more leveraged use of predictive analytics will come to the forefront, but in 2012 there will be a need for vendors to focus on market education and early adoption support. 6. Cloud computing and managed services options directed at enabling supply chain business processes will gain more traction. 7. Expect additional M&A among supply chain technology and ERP providers as vendors shore up application areas with the best prospects for sustained future growth. 8. The challenges related to higher incidents of counterfeit products, cargo theft and other scurrilous activities within and across global supply chains will finally motivate government and industry to step-up process standards and corrective mitigation efforts. 9. Wider scale leveraging and adoption of in-memory computing technologies among enterprise and specialty supply chain vendors, coupled with broader leveraging of data mining, have the potential to be game changing influences on supply chain business planning and response management. 10. The leveraged use of systems of engagement, namely mobility and social media applications within select supply chain, PLM and manufacturing process areas will gain additional momentum. http://bit.ly/vGTzbE

Journals, Case studies, Research Reports The popular Integrated Supply Model of the 1990’s naively assumed that supply chain partners all had reliable, open systems through which they could easily integrate their transaction data. Procurement Programs ignored the fact that the lowest price does not always mean lowest cost, and completely disregarded the importance of relationships within the supply chain. Today, the hot Revenue Management and Pricing models are likely to face a similar fate. By focusing on revenue and external demand, companies often disregard cost to serve. This might ultimately bankrupt a company. Furthermore, these bad policies can have a negative effect throughout the supply chain. PFSCM recognizes that understanding detailed, accurate transaction time, resource consumption, and cost data along the individual process links is critical to effective and profitable supply chain policies.

pFSCm Has many Strengths: n Enables more accurate / detailed analysis of the supply chain, by focusing on the individual steps of the process links. n Enables identification of the true drivers (e.g. defective items) of complexity and time for both partners (e.g. vendor and customer). n Identifies more quickly the sub-optimal, high cost supply chain link pairing. n By leveraging TDABC, it measures the true cost and profitability of these processes, and enables what-if games to be individually and mutually played by participants. n Facilitates systematic roll-out across supply chain by repeating previous steps. n Enables win-win scenarios to be identified and tested before action is taken. n Enables continuous measurement of the performance improvement to share with all stakeholders.

— Compiled by Jayashree Mendes

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January 2012 | www.logisticsweek.com

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< EVENTS

A PUBLICATION OF HAmBUrg mEDIA grOUP

Januar y 2012 January 7 – 11, 2012 auto Expo pragati Maidan, new Delhi Auto Expo ranks as one of the leading automobile industry trade shows that are held in India. The Auto Expo show is hosted at the Pragati Maidan in New Delhi, and is attended by several leading professionals from this sector. A number of topical seminars and interactive conference sessions are organized during the event, with the SIAM-SMMT and the Recycling of Vehicles being two of the most noteworthy of such sessions. At the Auto Expo-New Delhi, the Garage Pavilion, the Diesel Pavilion and the Engine Pavilion are worth a special mention, and participants can also take part in the automobile designing contests that are held during the show. The show draws in a large number of exhibiting participants, showcasing lubricants, vehicles, CNG Units, auto-electrical items, CAD/CAM tools and a host of other related automotive instruments and design solutions. The chief highlights of the Auto Expo 2012 are: 1. The SIAM Auto Trade Dialogue session. 2. Recycling of Vehicles seminar. 3. Styling and Design Conclave, and 4. Theme Pavilions. organizer: Confederation of Indian Industry Tel: +91 124 4014060/4014061 January 9 anD 10, 2012 EnErgizE talEnt Shangri-la-Eros, new Delhi Energize Talent is a highly anticipated conclave on talent management and it will help in providing new direction to HR and other talent searching departments. The event will provide new solutions to discover and sort out talented professionals in the best possible way. Wide range of companies and individuals proficient in different fields will be present at this two day event which will take place at Shangri-La-Eros in New Delhi. CEO’s, HR Heads, Academicians and HR Consultants will be the main participants in this international event. organizer: iTEN Media Pvt Ltd Tel: +91 11 46577364/467110364 January 18 – 22, 2012 ElECraMa Bombay Exhibition Centre (BEC), Mumbai IELECRAMA is the world’s largest electrical T&D exhibition held biennially in Mumbai, India since 1990. It has grown to be the world’s largest onestop-shop for electrical and industrial electronics. As the largest confluence of the power transmission and distribution sector ranging from 110V to 1200kV and HVDC transmission, ELECRAMA offers an international framework, for display, discussions and deliberations amongst global T&D fraternity comprising of business people, thought leaders, 74

INDIA |

technologists and professionals from the Utilities Industry and Academia. Exhibitor profile: Equipment for generation, transmission, distribution, protection and utilization of electrical power, instrument transformers, transmission line towers, cables, winding wires, equipment for process control, monitoring and recording, testing, measuring equipment and systems, equipment for telecommunication lighting equipment, fixtures, decorative, energy conservation equipment, solar energy system, water heaters, computer hardware and software. organizer: Indian Electrical and Electronics Manufacturers Association (IEEMA) Tel: +91 22 24930532/24936528 January 20 – 22, 2012 print paCK Digital Expo Sanskar Kendra, ahmedabad Print Pack Digital Expo - 2012 showcases all kinds of packaging and digital printing machines, materials, systems and products under one roof. Print Pack Digital Expo is the best cost effective marketing opportunity to meet senior buyer’s and decision makers from all facets of the user industry. Profile for exhibit includes - Industrial Digital printing machinery, printing services, printing materials, printing and packaging design, package and label printing, print processing, converting technology, paper, printing machines and equipments, screen printing faculty suppliers, leading printing manufactures. organizer: N. Parmar Expositions Tel: +91 79 30177166 January 20 – 22, 2012 CoMpoSitES inDia Expo Chennai trade and Convention Centre, Chennai Composites India Expo is positioned as premiere show which will provide an unparalleled opportunity for the manufacturers and distributors to showcase their existing range and launch new products. Exhibitor’s Profile: Resins, fiber reinforcements and additives, primary manufacturing equipment, mould tools, tooling materials and mould preparation products, processing/repair equipment and supplies, fiber converting and manufacturing equipment, testing, gauging, monitoring, analytical equipment, product design, CAM, simulation, analysis software, designing, testing and consulting, technologies and equipment for fabrication of composite products, environmental protecting, energy saving and recycling technologies, Ceramic-matrix composite materials & products, Metal-matrix composite materials & products, Raw Materials and semi-finished products. organizer: Conventions & Fairs (India) Private Limited Tel: +91 22 28398000

January 2012 | www.logisticsweek.com

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