Lt august for net 2012 by Raj Misra

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August 2012

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Logistics Times

TABLE FOR TWO Slowdown & logistical adjustments

INFRA WATCH Powerless in 21st century India

NEW INITIATIVE Cold chain draws Govt attention

Cover Feature

PAWAN JAINâ&#x20AC;&#x2122;s PAN-INDIA VISION Driven by the desire to put storage storage infrastructure much in advance all all across across is creating creating the country, Safexpress supremo is logistics parks in as many as 32 32 locations. locations. This probably is the most ambitious ambitious move move of his career as a logistics entrepreneur...

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CONTENTS

All about Transportation, Distribution & Infrastructure

Volume 3: Issue No.4 * August 2012 Editor in Chief

Raj Misra rajmisra@logisticstimes.net

Editor

Ritwik Sinha ritwik@logisticstimes.net

Sub Editor Photographer Designer Circulation & Distribution Legal Advisor

Neha Richariya Mohit Mallick Kausar Syed Kamruddin SaiďŹ Rakesh Garg

Our Bureau Mumbai

Rahul Kumar rahul@logisticstimes.net B Shekhar

Bangalore shekhar@logisticstimes.net N Raju Chennai

raju@logisticstimes.net Sudhir Kumar

Hyderabad

sudhir@logisticstimes.net

Editorial Advisory Board Paul Lim Founder & President, Supply Chain Asia Prof. Samir Srivastava Associate Professor, IIM-Lucknow Prof. Akhil Chandra Institute of Logistics & Aviation Management Ramesh Kumar Senior Journalist

Marketing & Sales Kalika Singh Ph: 011-22478538-39, 9891007542 Email: advt@logisticstimes.net Printer & Publisher Deepa Misra for

E-77, West Vinod Nagar, Delhi -110092 Tel: +91 11 22478538-39, Fax: +91 11 22471764, Mumbai: +91 9322811550 Printed at Personal Graphics & Advertiser Pvt. Ltd. Y -22, Okhla Industrial Area-II, New Delhi-110020

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COVER FEATURE

PAWAN JAINâ&#x20AC;&#x2122;s PAN-INDIA VISION Edit Note News Briefs

08 10

Curtain Raiser Product Supply Chain

34 37 38

TABLE 4 TWO

SLOWDOWN AND LOGISTICAL ADJUSTMENTS

15 NEW INITIATIVE

Cold chain draws Govt attention

16 INFRA WATCH Powerless in 21st century India

53 EVENTS

EDIT NOTE

Taking Long Shot If you have read Raghav Bahl’s book – ‘Superpower? The amazing race between China’s Hare and India’s Tortoise,’ you could have hardly missed this critical point. The point deals with the prevailing attitude in both the countries pertaining to infrastructure development or what in government parlance is called capacity addition. Emphasising specifically on attitudinal differential, the book clearly underlines that while China clearly believes in creating infra capacity much ahead of demand, in India new capacity addition is the last minute affair; mostly somekind of quick fix response to an emerging crisis situation. And it has often been observed that if the boom spell lasts for quite a while, recently created capacity could absymally fall short of the rising demand. Probably we have the perpetual habit of missing out on long-term picture. Not only nations, the above-mentioned assumption deals with two sets of mindset and is clearly applicable for entrepreneurs in every sector as well. In every business, we do come across a select few players who display the audacity of chasing the opportunity rather than other way round and correspondingly make moves even as in the beginning it may appear out to be too risky a proposition to be pursued. Our cover feature this month deals with one such entrepreneur who has opted to take a long shot in logistics space – Safexpress supremo Pawan Jain. Economic vagaries nothwithstanding, Pawan Jain since 2008 has been pursuing the dream of 32 logistics parks all across the country which would mean Safexpress accumulating a warehousing space of over 10 million square feet by 2015. And the company has already reached half way mark as the exercise has meant challenges on several fronts including taking a complete u-turn on the asset light model for which Jain is much known. During the one hour long interview with us recently at company headquarters, Jain made no attempt to hide the fact that the first lot of units which have already become operational are far from being sold out but he was emphatic that in post-GST scenario, the attractiveness of such units would grow manifold. Leaf through the cover feature to understand Pawan Jain’s pan-India infra vision… In this edition, we are back with out ‘table for two’ discussion and the topic chosen this time is – ‘Slowdown and logistical adjustments.’ The two panelists appearing in this discussion represent two top of the pyramid positioned entities from the end user industry and logistics business. It indeed turned out to be a free and frank discussion wherein the point that a slowdown spell is the most stressful spell of the equation between both the sides of the operational value chain was highlighted in bold. At the same time, a major takeaway of the discussion was: if the LSPs serve end user industry satisfactorily during their crisis hour, the chances of long-term associations are really bright. “A friend in need is a friend indeed,” the age-old theory simply comes into the play. Hope you will enjoy reading this edition.

Waiting for your feedback. Ritwik Sinha ritwik@logisticstimes.net

LOGISTICS TIMES August 2011

NEWS BRIEFS

24x7 custom clearance

In a signiﬁcant development, the government recently decided to allow round the clock customs clearances at identiﬁed seaports and airports in order to facilitate trade services. The four airports where this 24x7 facility would be available are: Delhi, Bangalore, Chennai, and Mumbai. The four ports where this facility would be implemented are: Chennai, Kolkata, Kandla and JNPT, Mumbai. The 24x7 operations would begin on a pilot basis with customs operations along with all other complementary services. Along with customs clearances, other government agencies such as the concerned port/airport authority, drug controller, FSSAI (Food Safety and Standards Authority of India), quarantine, etc., and private players such as custodians, CHAs (Customs House Agents), banks, transporters, etc., shall also have to work 24x7 to synchronize with the extended work hours. This would be initially for four months after which efforts would be made to expand similar operations at other locations. The 24x7 operations would be available for certain categories of imports and exports. For imports, the category “No Assess-

ment No Examination” will be covered. This would account for 70% of imports. For exports, the 24x7 facility could be extended to those exports not claiming beneﬁts. For smooth operationalisation of 24x7, the Commissioner of Customs concerned at these locations shall hold meetings with all stakeholders. Such additional staff that is required to start these operations shall be redeployed from existing resources. Secretary, Commerce and the Director General, Foreign Trade shall also hold meetings with other support agencies to facilitate and ensure 24x7 operations. 24x7 operations is scheduled to commence on 25.8.2012. Much on the expected lines, the move has been appreciated by stakeholders in the international trade business. “ Introduction of 24x7 Customs Clearance Operation will reduce transaction time and cost and would help exporters to meet the stringent delivery schedule,” M. Rafeeque Ahmed, President, Federation of Indian Export Organisations (FIEO) said. According to FIEO, the initiative is slated to reduce congestion at the ports & airports.

TCI Q1 Topline grew by 10.26% Transport Corporation of India, India’s leading integrated supply chain and logistics solutions provider, recently declared its ﬁnancial results for the quarter ended June 30, 2012. During the quarter, the company achieved revenues to the tune of Rs. 458.69 crore at a growth rate of 10.26% as compared to Rs. 416.01 crore for the quarter ended June 30, 2011. The EBIDTA increased from Rs. 34.45 crore to Rs. 38.31 crore and in percentage terms was 8.35% as against 8.28% during corresponding quarter last year. PAT for the quarter stood at Rs. 13.58 crore slightly up from Rs. 13.44 crore over the corresponding quarter of the previous year. Commenting on the result, D. P. Agarwal, Vice Chairman & Managing Director, TCI said “Besides reasonable top line growth under the prevailing subdued economic scenario, the company has been able to achieve improved EBIDTA margin. We expect the next few months to be challenging.”

LOGISTICS TIMES August 2012

NEWS BRIEFS

Exports may fall below $300 billion

India’s exports in the fiscal 2012-13 may at best manage to reach the level of the previous year at USD 304 billion, given a severe global slowdown, especially in the merchandise trade, a recently released ASSOCHAM study maintained. But based on the assumption that the present scenario in the global economy continues, exports for the current year, as a whole may even decelerate well below USD 300 billion, the study cautioned. The country’s target of achieving exports of USD 500 billion by the end of 2013-14 is certainly not achievable, it said and suggested that the exports sector be given maximum incentives if we want to sustain jobs in several labour-oriented sectors like gems and jewellery and handicrafts.According to the official data, while exports registered a small growth of 3.2 per cent in April this fiscal, the situation has been worsening month on month in May and June. The shipments in value terms decelerated by 4.16 per cent in May to USD 25.68 billion and by 5.45 per cent in June to USD 25 billion. For the first quarter of April-June, the exports were down by 1.7 per cent to USD 75.2 billion dollar, from 76.5 billion dollar in the same period last fiscal. As against earlier projections, the situation in Europe the main market for the Indian goods and the US has worsened rather than improved. “This is a matter of worry and we must work out some urgent measures to arrest the decline,” ASSOCHAM President Rajkumar N Dhoot said. If the present global market scenario continues, the ASSOCHAM forecast suggests the country’s total export billing may be in the range of USD 297-USD 300 billion.

LOGISTICS TIMES August 2012

NEWS BRIEFS

Slowdown in sea cargo growth

Following a signiﬁcant slump in volumes of iron-ore due to mining restrictions and policy issues, cargo growth at Indian ports was subdued in 2011-12 with total throughput registering just ﬁve percent year-on-year increase to 930 million tonnes. This has been stated by ICRA, the leading credit rating agency, in a recently released report. Major ports experienced a 2% degrowth in cargo handling to 560

million tonnes in FY 12 mainly due to their higher exposure to iron ore; while the non major ports by virtue of a more diversiﬁed cargo mix and higher efﬁciency standards gained 18% in terms of cargo volumes year on year. As a result, in market share terms, major ports accounted for 60% of total throughput in FY 12 compared to 64% in FY 11 while the share of non major ports was up at 40% in FY 12 from 36% a year back. The long-term growth outlook for the Indian port sector continues to be strong over the medium to long term driven by the domestic requirements of coal for power and other sectors; crude oil for meeting domestic petroleum requirements and; containers given the cost and logistical advantages associated with containerization. Some near term uncertainty may, however, be associated with particular cargo categories like imported coal due to international pricing related issues and domestic tariff revision related uncertainties for the power sector; iron ore due to unresolved policy issues and containers due to the weak global environment.

500 Safe Days in APM Terminal Employees at APM Terminals Mumbai recently achieved 500 Safe Days, without any Lost Time Injury (LTI), setting a record at the Jawaharlal Nehru Port (JNPT) at Nhava Sheva. According to a company release, APM Terminals globally lays a lot of emphasis on safety at terminals and the senior management team at The Hague is actively involved in motivating employees to practice Safety at work. APM Terminals Mumbai accounts for nearly 44% of the throughput emerging from Nhava Sheva, recording 1.89 million TEUs in Fiscal Year 2011-12, which is almost 20% of India’s containerized throughput. Safety of staff and visitors is of highest priority at the terminal, and each one follows the example of “If You See It, You Own It”. “We operate with the objective that each employee, stakeholder and contractor returns home safely EACH DAY, EVERY DAY. It is indeed heartwarming to witness that the teams’ efforts have paid off. Kudos to the team at APM Terminals Mumbai!” said Major P. Swathimohan (General Manager, HSSE). . LOGISTICS TIMES August 2012

Innovative Safety campaigns initiated by HSSE have gone a long way in generating awareness among employees and stakeholders at the terminal. The HSSE team ensures that employees and terminal users are provided the necessary safety training and tools required to perform safe and smooth operations. Safety Workshops are rolled out to clients and contracted staff emphasizing the need to follow safety rules inside the terminal, thus minimizing workplace accidents.

NEWS BRIEFS

Rs 1700 crore revenue target Mahindra Logistics Limited (MLL), a wholly owned subsidiary of Mahindra & Mahindra Ltd., is targetting a revenue of Rs 1700 crore in the current fiscal which would mark a growth of nearly 30 percent in its topline in comparison to the last year sales. This was stated by company’s CEO Pirojshaw Sarkari at a select press briefing last month in Mumbai. “The company closed last year at Rs. 1300 crore, and we expect to close this year with revenues in excess of Rs. 1700 crore. We also have a robust plan to double our revenue in four years. It is MLL’s aspiration to be a billion dollar company with a firm focus on integrated 3PL solutions. This aspiration is entirely achievable given the size and growth of the industry in India,” he said. According to Sarkari, the company serves over 200 large corporate customers across its operating verticals and has made significant investment in enhancing its IT support system. Mahindra Logistics has invested in excess of 1 million US dollars in project MILES – the Mahindra Integrated Logistics Execution System. MILES is based on the Oracle Transport Management system and seeks to create value for customers and partners who have a considerable transportation spend. Besides MLL has also recently invested in over 500,000 square feet of modern warehousing space in western India - a mix of both multi-user and built to suite facilities in a single complex, and adds to the 4 million square feet already operational. MLL’s plan is to now develop another million square feet of modern

warehousing in south and north India. These complexes will include both multi-user and built to suite units with the very best / latest design, engineering, layout, material handling systems, automation and warehouse management systems. On the international front - an area of considerable focus and a signiﬁcant growth driver - the company is currently evaluating several international players to partner with and grow this part of the business. MLL wants to partner with such players who will support it on key lanes being developed, most importantly USA, Europe, South East Asia, China and Africa. MLL will soon be establishing a presence in several Asian counties, including China, Indonesia and Thailand.

Blue Dart in the top 25 list

Blue Dart has been ranked amongst the Top 25 ‘India’s Best Companies to Work For 2012’ by the Great Place to Work Institute, India. Blue Dart was ranked 13th amongst ‘India’s Best Companies to Work For 2012’ and 1st in the Transportation Industry at a glittering ceremony held at Hotel Lalit, Mumbai on July 13, 2012. Blue Dart has received this coveted ranking for the third consecutive year

Commenting on being ranked 13th amongst the Top 50 ‘India’s Best Companies to Work For 2012’, Anil Khanna, Managing Director, Blue Dart said, “At Blue Dart, our focus has been on creating an enabling environment that provides for the allround development of the individual. Our ‘People First Philosophy’ has helped us move beyond just being a great place to work to driving employee satisfaction by providing them the best work to do.” ‘India’s Best Companies To Work For 2012’ is India’s largest annual study on workplace culture aimed at identifying, recognizing, learning from, and spreading best practices of organizations that achieve business objectives by being great workplaces. This study in its 9th year was conducted by the Great Place to Work Institute in India in partnership with The Economic Times. Out of 533 companies in India that participated, only 50 made it to the Best Companies List, making this list the gold standard of best workplaces.

LOGISTICS TIMES August 2012

NEWS BRIEFS

Essar Ports Q1 Profit increases by 73%

Essar Ports Limited, part of the Essar Group, recently announced its audited results for the quarter ended 30th June 2012. For the quarter, Essar Ports’ revenue increased by 18% to Rs 330.3 crore from Rs 278.5 crore in Q1FY12; EBITDA increased by 23% to Rs 271.3 crore from Rs 220.3 crore in Q1FY12; and net proﬁt increased by 73% to Rs. 68.5 crore from Rs 39.6 crore in Q1FY12.

Revenue from 3rd party customers contributed around 4% to the total revenue of the company during the quarter. The company’s debt has been reduced by Rs 165 crore during the quarter. Speaking on the results, Rajiv Agarwal, CEO & Managing Director, Essar Ports said, “87% of our committed capital expenditure has been completed and we expect the projects to be completed in phases by 2014. In line with the commissioning of the expansion projects, our earning and profitability will continue to grow”. Meanwhile in terms of operational highlights, for the quarter ended June 30, 2012,Essar Ports handled 12.65 million ton of cargo compared to 11.20 million ton in Q1FY12 registering an increase of 13%. Hazira handled 3.58 million ton of cargo during Q1FY13 compared to 2.79 million ton in Q1FY12 registering an increase of 28%. Vadinar handled 9.07 million ton of cargo during Q1FY13 compared to 8.41 million ton in Q1FY12 registering an increase of 8%.

Small and Light Vehicles Segment to grow

Economic changes in India have fuelled growth of the commercial vehicle (CV) market and other factors have helped skew the market in the favour of the small commercial vehicle (SCV) and light commercial vehicle (LCV) segments. Just entering its rapid growth phase, the SCV and LCV market in India is the fastest growing in the world and is expected to continue growing for the next 5-10 years. New analysis from Frost & Sullivan, Strategic Assessment of Small and Light Commercial Vehicles Market in India, ﬁnds that sales of small and light CVs in India stood at 353,620 units during 2010-11 and according to a recently released projection, this is expected to grow at a CAGR of 18.5 per cent for the next ﬁve years with sales volumes reaching a mark of 827,920 units by 2015-16. SCV goods carrier is expected to account for around 70 per cent of this volume. The projection further emphasies that the Indian CV market LOGISTICS TIMES August 2012

is polarizing towards the small and light CV segments with the market share of medium CVs (MCVs) declining. This trend is intensified by many factors. For instance, the restriction on medium and heavy CVs’ entrance into metro cities has made it necessary for logistics companies to procure SCVs and LCVs for within-city delivery of goods. Availability of low cost LCVs with high power and gross vehicle weight (GVW) capacities has also eaten the market share of MCVs. However, the entrance of global CV majors into the Indian market through joint ventures with local majors is expected to make it very competitive, with many new and better products hitting the market. Nonetheless, local majors like Tata Motors Ltd (TML), Ashok Leyland (AL) and Mahindra & Mahindra (M&M) will continue to dominate the market due to their widespread network in India and increasing acquisitions abroad. “As competition increases, it is important to strategically position products as early in their lifecycle as possible to capitalize on the market trends,” said Frost & Sullivan Automotive Research Analyst. “Inflation caused by polarization and de-regulation of fuel prices, among other factors, has a direct impact on earnings of the organization.” Manufacturing in India is a key strength, especially for low cost trucks, which can generate a good business opportunity in growing global markets such as Mexico, Brazil, Africa and China. Domestic companies can attract high volumes as these products provide similar configurations at lower costs.

Cold chain draws Govt attention The government of India, on the basis of various industry recommendations, launched the newly formulated autonomous body: National Centre for Cold Chain Development (NCCD) with a high proﬁle think tank conclave on 17th of July. NCCD is intended to serve as the nodal agency for India’s cold chain development, the centre piece for all future support interventions to this sector. As a welcome change from the past, the NCCD has recognised the prime role of logistics and supply chain in the cold chain, evidenced by the establishing of a separate committee on Supply Chain & Logistics. This committee is unique in its formation,

to domestic and international destinations. This would require considering infrastructure capacity, cross-modal connectivity, investment, regulatory, and intra-governmental coordination factors that affect supply chain competitiveness, goods movement, and sustainability. The declared vision statement for this committee is to facilitate implementation of the policy of the Govt. of India / Ministry of Agriculture with focus to promote holistic integration in the supply chain which incorporates components of cold chain technologies, non-cold chain options, hybrid options, packaging and solutions to aid the foremost aim of

Such a committee could also aid in altering the opportunity outlook in the FDI in multi-brand debate, where efﬁciencies to India’s supply chain are the primary off-takes. India’s Logistics and Supply Chain organisations have frequently sought recognition as an industry from the government. The logistics sector has sought to be seen in representation and interpretation of existing policies from the supply chain business managers’ perspective, in spirit of the true intent of government initiatives. This committee will help forward to this end by providing interface for proactive dialogue in matters with food supply chain & logistics thereby

enhanced market reach & realisation of agri-produce. The committee is also entrusted with developing participatory thought leadership that encompasses economic, social, technical, environmental and legal aspects necessary to bring about integrations across stake holders in the total supply chain. This would include coordinating Supply Chain initiatives and industry initiatives undertaken by other agencies to build synergy between the operators and the managers. This supply chain & logistics committee would seek and recommend strategic inputs with a supply chain domain outlook, to assist in policy assessments and future formulations including on the National Green Grid for perishables.

providing an avenue for recommendations in supply chain processes and interventions focused on improving services, value creation and solutions that best suit the Indian backdrop. It will be with interest that the nation’s logistics sector will look on, to observe and take opportunity to participate in future developments in India’s cold chain. The country was so far largely promoting the development of storage infrastructure within the cold chain. With the birth of a specialised supply chain committee, one can hope to see fresh strategy being developed on using such infrastructure in action thereby serving as effective links in an integrated supply chain practice. LT Bureau

Pawanexh Kohli

a ﬁrst for India and clear indication that integration as part of a supply chain and related logistics intervention is gathering primary attention in the country’s cold chain development. While the committee is mandated to focus on the agricultural sector, this covers majority of the user segments in the cold chain. In communication with the newly appointed Chairman of the committee, Capt. Pawanexh Kohli, we were informed that the objectives of the committee include relating relevant technologies with supply chain processes which integrate the various links in the agri-produce supply system, to assess factors (national & local) that inhibit efﬁcient and competitive movement of goods from point of origin

LOGISTICS TIMES August 2012

NEW INITIATIVE

INFRA WATCH

Powerless in 21st century India

Himanshu Shekhar

LOGISTICS TIMES August 2012

It was a day we won’t forget easily. Millions of India could not sleep on that fateful night of 29th July as without notice power disappeared from their homes. The dawn descended with more bad news. The Northern Grid had collapsed, and eight states had suffered complete power blackout. Hundreds of trains got stranded as power supply to Railways was disrupted, Delhi Metro came to a standstill and thousands of hapless commuters got stuck in traffic jams in the capital as even the traffic signals went off because of no power supply. Government of India had to mobilise all its resources to restore normalcy which could return only by the evening of 30th July. As India heaved a sigh of relief, more bad news was on its way. What happened on 31st July was more shocking. First the Northern Grid collapsed for the second time within 24 hours. And then, within minutes the entire Eastern Grid and the Northeastern Grid became powerless. This was the biggest power blackout in any part of the world as one-third of India went powerless. It made life of more than 360 million Indians miserable. Within 48 hours, the failure of the establishment to control the collapse of three important Grids exposed the fragility of the power infrastructure in the country. It also shifted focus on the larger institutional problems faced by the power sector: the shortage of coal and gas; the procedural delay in getting clearances to big power projects; the poor fiscal health of state electricity boards and the long-pending power sector reforms. The then Union Power Minister, Sushil Kumar Shinde admitted within hours that states had overdrawn electricity from these Grids, much more than their quota, which led to the blackout.

Power Grid officials investigating this incident say that June-Sept is the period when the Northern Grid is generally power deficient and the Western Grid has surplus power. Normally, this surplus power available in Western Grid is transferred to the Northern Grid. But the power deficiency became acute this year because of the weak monsoon. Monsoon deficiency meant less water in dams and reservoirs in comparison to last year, which in turn meant that farmers would get less water for irrigation. This increased the dependence of farmers on electricity to run their pumps to pull out ground water for irrigation. So, there was a scramble among the Northwestern states for drawing more and more electricity leading to the collapse of the Grids. This essentially means that shortage of power was a criticial factor behind this blackout. In many ways, this incident raises serious questions on the larger crises that afflicts the power sector, especially the bottlenecks which continues to affect India’s ability to produce power to fuel its economic growth. The delay in environmental and other clearances at the state level continues to stall work on hundreds of coal blocks proposals. And the shortage of coal is making the crises more difficult to handle. Just take a look at the coal stock available with prominent thermal power stations. In terms of the availability of coal, the Central Electricity Authority (CEA) says on 30th July, 32 important power plants in the country were facing a ‘critical’ shortage of coal i.e, they had less than seven days of coal stock left. What is more alarming is that 17 power plants were facing “super critical’ shortage of coal, that is, they did not have even four days of coal stock left to run the operations.

LOGISTICS TIMES August 2012

INFRA WATCH

And in the midst of the crises in the power sector, Prime Minister announced signiﬁcant changes in the portfolio of senior ministers. Shinde, who had failed to stem the rot in the power sector, was ‘promoted’ as the new Home Minister while P Chidambaram moved back to the Finance Ministry and Corporate Affairs Minister Veerappa Moily was assigned the additional charge of Power Ministry. The power crises has only aggravated the problems for Prime Minister who is grappling with multifarious challenges to overcome the growing ‘policy paralysis’ in UPA-2. He knows the political pressure from within the Congress party to perform is rising and that he must act fast. And he is trying hard to do that ever since the Congress Working Committee pressed the alarm bell in June this year. Starting in June, he ﬁrst set-up an LOGISTICS TIMES August 2012

Investment Tracking System to fasttrack the implementation of major investment projects. He followed this up with a high-level meeting with all senior ministers in-charge of key infrastructure sectors to ﬁx targets for 2012-13 in port, roads, civil aviation, railways, power and coal sectors. Within a few days, the Union Cabinet decided to set up a new mechanism to monitor and implement PPP projects. As PM moved ahead with his strategy to put in place new structures to fasttrack the decision-making processes, he realized more was required to seriously address the growing list of pending projects in different key infrastructure ministries. Setting up an Investment Tracking System was not going to be enough. So came the latest and perhaps one of the most important initiative in

recent times: the proposal to set up a Project Clearance Board (PCB). The PCB has been structured on the lines of Foreign Investment Promotion Board (FIPB) which is the nodal agency to approve foreign investment proposals. The new board has been assigned the responsibility to expedite the process of giving clearances to important projects in a stipulated time-frame. Headed by Cabinet Secretary, the PCB would include ofﬁcials from Ministries of Home, Defence, Environment and Forests, Commerce, Coal, Dept of Space and other infra-related ministries. PMO says the mandate of PCB would be: “...(To) meet regularly on a monthly basis to review the status of clearances for energy and infrastructure projects and expedite issuing of security and other clearances. Ministries would report to this

PMO ROADMAP FOR INFRA PROJECTS Railways: A) Elevated Rail Corridor in Mumbai: A Project Steering Group would be set-up to monitor the implementation of the project and finalize the documentation, bidding process and awarding the contract. It would be headed by the Chairman Railway Board. Secretary (DEA), Secretary (Planning), Chief Secretary of Maharashtra (or his representative), Member (Engineering) and GM, Western Railways would function as its members. The project will be implemented in PPP mode. The concessionaire shall be finalized by 15th March, 2013. B) High Speed Rail Corridor Project between Mumbai and Ahmedabad: A separate Project Steering Group would be set-up by Ministry of Railways. Chairman Railway Board would function as Chairman of this Group. This Group would examine options available for implementing this Project, suggest how railways can design and execute high speed train projects and put in place a mechanism to move forward on chosen options. C) Station Redevelopment:

Board the status of issuing of clearances after following their internal due diligence processes.” Considering the serious nature of institutional problems faced by policy makers, it would be important to see how successful PCB would be in removing the bottlenecks between and among ministries. It is significant to note that unlike the FIPB, the PCB would have to deal with sensitive issues related with the displacement and rehabilitation of millions of tribals and poor living in India’s hinterland as it begins to expedite the process of giving clearances to pending energy and infrastructure projects. In the coming days, the challenge would also be to initiate new efforts to evolve political consensus within UPA-2 on issues like FDI in Multi-brand Retail. On this issue, the pressure is mounting not

Railways would set-up an Indian Railway Station Development Corporation (IRSDC) to implement the redevelopment of stations. Five stations have already been selected for redevelopment.

Shipping: Work has begun on two new major ports in Andhra Pradesh and West Bengal. Shipping Ministry would finalize the site in Andhra Pradesh for the major port by 31st August, 2012. An SPV would be formed to implement both the projects in West Bengal and Andhra Pradesh with 26% equity from the respective State Governments and 74% from Government of India. A Project Steering Group to be constituted with Secretary, Shipping as its Chairman to oversee the progress on establishment of both the ports.

Civil Aviation The Navi Mumbai airport: The Govt of India wants to complete the formalities on the PPP award process by 15 August 2012. The airport project will be awarded by March 2013. For the new airport at Mopa, Goa, the work is scheduled to be awarded by March, 2013.

only from India Inc but also from the international community. As American President, Barack Obama told PTI in an interview in July: “They tell us it is still too hard to invest in India. In too many sectors, such as retail, India limits or prohibits the foreign investment that is necessary to create jobs in both our countries, and which is necessary for India to continue to grow,” Obama’s statement led to a sharp rebuttal from the Indian government and opposition parties. But it did underscore the growing unease about the future of the reform process. As Ratan Tata said a few days after Obama’s statement in a note ‘Lets do The Right Thing’ posted on Twitter: “Now is the moment in time when our prime minister must break convention, restore government credibility, place the country on a growth path once again by implementing promised reforms,

removing road blocks to growth and controlling crony capitalism.” To revive the falling sentiment, it would be important to ensure that key infrastructure targets are met within a stipulated time. To ensure that key infrastructure ministries do not miss the deadline, the PMO recently came out with a detailed roadmap outlining the timeline for key infrastructure projects(Refer to the box). The forthcoming Monsoon session of parliament would be a test-case of UPA2’s ability to push through the longpending reform legislation and give a new impetus to the reform agenda. It won’t be easy to overcome the resistance from a restive Mamta Banerjee and an assetive Sharad Pawar. The challenge would also be to ensure that new initiatives yield results within a year. There is not much time left.

(The author is a senior journalist working with NDTV) LOGISTICS TIMES August 2012

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PAWAN JAIN’s PAN-INDIA VISION His child like enthusiasm is at once palpabale when in the midst of this interview, he starts fiddling with his IPad showing us the live images from the floors of his Indore logistics parks. For once, Pawan Jain, supremo of Safexpress who is known much for his serious and media shy mien, had belied the popular impression about him. But then it probably also reflected the degree of passion involved in creating a pan-India network of advanced logistics parks. Economic vagaries notwithstanding, since 2008 Pawan Jain’s Safexpress has been subtly adding to its warehousing strength by way of creating fairly large sized logistics parks with all modern amenities all across the country. There is a specific timebound target (culminating in 2015) and the company has already reached the half way mark. For Jain who proudly claims that “logistics business is in his DNA,” this probably is the most ambitious project he has undertaken in his life which is meant to position Safexpress at the forefront of future ready logistics firms. For this, in fact, he had to give up his most potent weapon for which he is much known – the asset light model. In a candid conversation with Ritwik Sinha, Safexpress chairman explains the big idea behind these logistics parks, the kind of effort which has gone into them and their future implications – clearly the components of his pan-India vision:

LOGISTICS TIMES August 2012

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Mumbai Logistics Park Unit

Let me begin with a simple point. When did you decide to set up a network of logistics parks units all over the country? More specifically, when was the first time you heard about them as the units which could make a world of difference to the services offered by a typical 3PL company? The decision was taken in 2008 even as I had been hearing about them for quite long. The biggest beneﬁt of these facilities is that your service standards improve dramatically. When it comes to storage, the basic premise for Safexpress was outsourcing since our guiding principal has been to operate as a zero-asset and zero-liability company. And therefore, prior to 2008, we never thought of creating anything on our own. Whatever facility we had in our fold till then was owned by somebody else – he could be a landlord who could create as per my design or had already created a facility which Safexpress could suitably use. Around that time our company was growing at a rapid pace and new customers were joining us. And that compelled us to think of having more big boxes. We started talking to a landlord in Chennai. He had a land parcel and he said I can create logistics parks if you can agree for a 30 year lease provision. We entered into an agreement but eventually it did not LOGISTICS TIMES August 2012

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I had this ultimate long-term goal in my mind that Safexpress eventually should have over 1 crore square feet warehousing area in 32 different locations in the country. This was part of my 2015 vision for the company work out. And ﬁnally we had to take it over and invest everything on our own to construct that warehouse. Because of this bitter experience, we thought this model of somebody building for us and we serving as tenants may not work. As you know we have been advocating the asset light model but this Chennai experience forced us to change our thought that if we want a warehousing network on a massive scale in terms of geographical spread, we need to pump in money on our own rather than scouting for a local partner. And this entailed adopting a host of new of processes – creation of

internal construction team, negotiation for land, etc. Here I would like to tell you that even before all this started, I had this ultimate long-term goal in my mind that Safexpress eventually should have over 1 crore square feet warehousing area in 32 different locations in the country. This was part of my 2015 vision for the company, i.e., all these units would be up and running by the middle of this decade. And after that bitter experience down south, we strated looking at all across India with a fresh approach. Land was obviously the ﬁrst thing. Then we took a decision that since Safexpress is a zero-asset company,

A view of Nagpur Unit

we should not burden it with assets and therefore we created a separate company. This again was a family promoted entity and this company began acquiring land. The land masses spotted were broadly in the range of 15 to 45 acres on the roadsides close to highways at strategic pre-deﬁned locations. And that is how the process picked up momentum. I am happy to inform you that we have already bought land at 29 locations. Ahmedabad, Mumbai, Gurgaon, Nagpur, Indore, etc. are some of the most prominent locations where we have set up logistics parks units. And right from the beginning, we were very clear in our mind that these units would be used for the captive use of Safexpress. We will not let out space to any other third party logistics service provider. We will be either using them for our existing clients or for new clients in the future. The design, idea, utility – everything has to be for Safexpress. The land which we have bought – 90 percent of them are agricultural land. We bought, got them registered, started building them for commercial usage after obtaining different kinds of permissions, etc. So after that bitter Chennai experience, you completely changed the formula? It was absolutely imperative as we realised that it won’t be possible to create a panIndia network with similar philosophy and similar design and facilities, usage,

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As far as Safexpress balance sheet is concerned, these logistics parks are owned by a separate company and Safexpress, therefore, continues to be an asset light entity.

etc., if we stick to the asset light model. Taking things in our own hands was the only choice to make this countrywide vision successful. You are broadly known as one of the best practioners of asset light model in the Indian logistics space. But here was an instance when you had to take a complete u-turn. If you look from the promoters’ perspective, then yes we switched over to an entirely opposite formula. But as far as Safexpress balance sheet is concerned, these logistics parks are owned by a separate company and Safexpress, therefore, continues to be an asset light

entity. I am damn sure you must have visted such logistics parks abroad before you took the call to have your own pan-Indian structure. Tell me something about the big takeaways you noticed at those units. Yes, I started visiting the matured markets where these units have been playing a vital role in logistics management since a long time. I distinctly remember spending nearly a fortnight in the US visiting and studying every aspect of logistics parks’ operations and management. I had also visited two countries in Europe as part of LOGISTICS TIMES August 2012

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Logistics Parks Expanding network Location

Capacity (in square feet)

Ahmedabad

2,74,000

Bengaluru

6,05,000

Chennai

3,86,000

Gurgaon

1,95,000

Indore

11,50,000

Jamshedpur

1,20,000

Kolkata

1,84,000

Mumbai

7,00,000

Nagpur

11,90,000

Puducherry

1,04,000

Pune

3,10,000

Salem

2,70,000

my exercise to understand how efficiently these units can contribute and what would be the trends in future. We also discussed with stakeholders within the country who were especially involved in warehouse construction. After we had taken a call, we hired a very experienced engineering firm to construct large scale warehouses for us. In fact, that firm created a special team of engineers and architects to work on our project. They visted all the sites and along with them, we had to grapple with a host of issues – whether to go with pre-engineered buildings, creating columnless span of 130-150 feet within the warehouse, etc. These issues were closely examined and finally we settled for pre-enginered buildings and tied up with two-three companies for their construction. What was your basic briefing to all your associates involved in creating logistics parks units? The briefing was simple. What we are going to do has to inherently take into the consideration the size of the market and possible demand in 2020 and beyond. LOGISTICS TIMES August 2012

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Identifying a piece of land and then creating a logistics park – it takes a minimum of 30 months even if the work flow is smooth. We are taking position with these units much ahead of the demand.

These units have simply been created for future and that explains the size of the land parcels which we have bought. To tell you frankly, the size which we have today are not required for Safexpress’ present day needs. Today they are too big vis-à-vis the present demand. But I am extremely conﬁdent that given our growth pace and trajectory, we will need them in future. And here we have made the right moves. Space, after all, can’t be created or bought overnight. So basically you have been driven by the idea of putting up infrastructure before demand actually emerges. Yes, of course. It has always been very clear to me. The demand may not be there presently but infrastructure has already been built. Building, identifying the land, creating the units – all of this is a big call and time consuming process. Identifying a piece of land and then creating a logistics park – it takes a minimum of 30 months even if the work ﬂow is smooth. So we are taking position with these units much ahead of the demand actually pouring in and therefore as I said these units have

been created considering the future needs of Safexpress. Just to cite an example, today our logistics park in Indore might be sending 30 trucks in the 24 hour cycle but we have provisioned for simultaneous loading and unloading of 155 trucks at any given point in time. Just look at the scale. In comparison to present demand, I believe we have created units which have five to eight times capacity. There are many who ask me why create this kind of capacity? But once again I would emphasise – this kind of facility can’t be created overnight and we can be credited for having been too pro-active in our approach. You have bought land parcels in the range of 15 -45 acres for these units. Considering the real estate scenario, you might be sitting on a goldmine. But that has never been part of our thought process. We never thought that the valuation of the company would grow significantly if we have land banks. The only objective before us was how to create a network which can benefit

“Logistics Parks have become the most vital cog” Vineet Kanaujia, Vice President, Safexpress emphasises on the strategic importance of logistics parks in company’s expansion drive... Today, we have 17 logistics parks all across India. And the way they set us apart vis-à-vis any other logistics firm in India is in terms of vastly improved infrastructure and their locations which are absolutely strategic. They have been a great catalyst for us in bringing down the transit time to the lowest level in the industry and have helped us to create a very unique model for our business. We are a value added supply chain & logistics firm and after the addition of these logistics parks units, I don’t think any other company comes close to us in terms of advanced offerings as 3PL service provider. As I said, these logistics parks are very stratgically located. They are strategically positioned at key industrial hubs across India. For instance, our logistics parks at Nagpur, Ahmedabad, Salem, Indore, Gurgaon, etc., most of these parks are in locations identified as industrial clusters. And these are the locations which have already bloomed as industrial hubs or are poised to emerge as next set of vital trade centers in the country. For identification of locations for these logistics parks, a lot of research had been done which entailed minutely studying the Indian geography and economy. Safexpress, in fact, has been on a massive expansion spree in the recent years and here logistics parks have played a major role. Alongside logistics parks, we have also been opening up new offices across India. We have expanded our total number of offices in the country to 578 now. By the end of the year, this figure would further mount to 600. One of the core objectives we are seriously pursuing is to have the best pan-India presence from the logistics industry. The country has 627 districts but most of the top corporates mostly focus on leading 20-30 cities and towns. As demand grows in tier 2 and 3 cities, companies will need to start focusing on setting shop in these cities as well. This is where we come in. Through

our massive distribution network we are already covering every square inch of India, including all 627 districts of the country. With every passing day, we are getting stronger in terms of our distribution network, and will continue to build upon this competitive advantage that we have. Apart from this, we have also set up 226 gateways so far and by the end of the year we are eyeing to scale up this number to 250 gateways. Alongside logistics parks and new offices, we are also investing very heavily in IT infrastructure which is going to change the dynamics of our business in a big way. IT plays a very vital role in revolutionsing the operations in our industry and in that respect we are determined to change the paradigm in our industry. For us, IT is a strategic weapon and we will make

LOGISTICS TIMES August 2012

COVER FEATURE

the most of it to the extent that we emerge as a role model for other companies in our space. The high-end IT usage is a point which most of the visitors to our logistics parks are speaking about today. We have opened new offices in the locations where not many from our industry have shown interest in having direct presence. There are locations like Gaya (Bihar), Hassan (Karnataka), Dhule (Maharashtra) that we had been indirectly covering through our service called Safextension earlier. But now we have reached there directly to enhance the level of our penetration. All our moves are customer driven and customer demand from these locations is going up. In the recent years, we have noticed a clear shift in customer demand from rural markets. There are research papers which have underlined that on an overall basis 45 percent of demand would be coming from rural India in next few years. That set us thinking that our penetration level as LSP should go beyond tier 2 and tier 3 cities and that’s where we started setting up offices in these locations. And this drive is consistently being strengthened by setting up of logistics parks. For instance, when we set up a logistics park in a place like Salem or Puducherry, we are basically putting in place a hub center meant to serve smaller spoke locations where we want to reach. These

Safexpress considering our assessment of the future demand. Today, we are in a position to take our customers to so many sites and tell them about the kind of services we can offer. And they are deﬁnitely looking at facilities they had not seen or heard about before. By and large, I ﬁnd them excited and these units are subtly conveying the message that Safexpress indeed is a forward looking company. All this is resulting into more business for us. As you emphatically maintained that these units have been created considering your future requirements and demand and capacity are not in alignment presently, my question to you is: have you left any small window for some other commercial utilisation of these units? We had thought this. But again who will be coming for the commercial utilisation – either our competitors which will not be a good idea or else we will give space to some companies from the end user LOGISTICS TIMES August 2012

logistics parks are enhancing our ability to expand our network even in remote places. However, our expansion strategy is not linear in terms of reaching out to new locations in alignment with the presence of a logistics park. There are centers like Barabanki which does not have any of our logistics parks in its vicinity but we have gone there because we sensed customer demand is on the rise. We have a multidimensional strategy wherein logistics parks and new offices could play complimentary roles but yet they are quite capable of functioning independently. Coming back to logistics parks, if I have to apply a singular term to underline their importance in our scheme of things and our positioning in the market today, I would say they have already become a vital cog. And why only us? If India as an economy has to succeed, these logistics parks have to be the most vital cogs. If you look at our economic landscape, the most critical gap clearly is infrastructure. We all know that logistics and supply chain infrastructure has to dramatically improve and logistics parks symbolise what we mean by advanced infrastructure. So whether us or any other LSP, logistics parks are bound to become the nucleus of future growth. (As told to RS)

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When GST provisions are in place, units like logistics parks would become more attractive and actually their usage would increase. Practices like cross docking would actually begin then.

side on a rental basis. We were very clear from the beginning – these units are not meant to be doled out on a rental basis. Our sales team has been alerted to approach more customers for these units and on a very selective basis, we have offered long-term space facility to our top notch customers at a discounted rate.

You are being looked upon as an enterprenuer who has been preparing much in advance for post GST scenario. I believe this logistics parks network also is a critical step to attain the projected windfall if GST comes into the play. Sure. You must have seen our recent advertisement saying – We are GST

COVER FEATURE

ready. Are You? I know that GST is a politically sensitive issue and today we are not in a position to say when it will finally see the light of the day. But it has to ulitmately happen. And believe me when it happens, it would be the biggest reform implemented in this country. When GST provisions are in place, units like logistics parks would become more attractive and actually their usage would increase. Practices like cross docking would actually begin then. We are using India’s first cross dock designed warehouse in Nagpur. I would like to specifically point out here that things are dramatically changing in our business. Earlier what was the ideal size of a warehouse? 10,000 square feet. Now even a 1,00,000 square feet unit is not looked at as a big unit. So the scale has completely changed. In your line of business especially when it comes to warehousing, there is an unprecedented buzz about hub and spoke model in post GST scenario. Now you are creating logistics parks of fairly large sizes in as many as 32 locations. Am I right in my assessment that all these units would be operating as hubs? Yes, all of them are hubs. Every unit is a single cross dock hub for daily high-speed movements. In fact, every unit basically offers two kinds of facilities: consignments will come, get segregated in 120 minutes and then get pushed further to the next destination. And secondly, we are keeping the key peak inventory of the customers – height (G+2 to G+5) and the cut off time movement are quite efficient. Today you are claiming to have the best transit time in the industry. Is it also because you have new logistics parks? I would say it is because of adoption of F-16 (Force 16) thought. We have divided India in 16 different zones. And from every single zone, goods are being sent to the other 15 points. It’s clearly a crisscross operation. For instance, Ambala has to depart one or multiple vehicles to Salem, Hyderabad, Bangalore, Mumbai, Pune, Delhi, NCR, Kolakata, Nagpur, LOGISTICS TIMES August 2012

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Indore Unit - The latest addition in Safexpress’ growing Logistics Parks network

There has been a single point agenda behind the creation of these units – to support the growing business of Safexpress. Logistics is our core business and I don’t think it will change even in the future. Jaipur and Kanpur. These are non-stop fastest operational routes where we deploy trained drivers. You can call this as the Rajdhani service of Safexpress. They are high-speed, non-stop vehicles departing whether the load is there or not. For instance, every evening at 6 from Ambala a high-speed truck leaves for Kanpur and it reaches there by 4 in the morning. Within an hour, trucks meant for spoke destinations are loaded with goods and they are dispatched. So these kind of operational modules have been created and we are the ﬁrst company in India to facilitate regular vehicle movement on 24x7 basis irrespective of the load factor. It’s a completely scheduled operation. Let me know the level and degree of automation you have put in these units? There are two parts of our logistics

parks’ designing. First is the hard part of it. We have provisioned for huge spare columnless space (as much as 130 feet) which ensures no obstacle in the movement of trolleys. Now the second part is IT enablement. The IT support clearly is in alignment with the future scenario and I would say these units are scientiﬁcally designed. All the units are monitored on a 24x7 basis, we get the live footage on our central server and every single loading and unloading action is captured. The consignments are also laced with bar coding and the technology is paperless. The scanners are there with the employees and they can easily trace the goods. This bar coding facility is available on a selective basis now but by 31st March next year, each and every baggage would be bar coded. In your opinion, which is your best

unit and why? I always ﬁnd the latest unit as the best. We are a learning organisation and based on our learning processes, we are improvising and making the new units better than the previous ones in terms of operational ease. I must admit that we made a lot of mistakes in the ﬁrst few units but now we have reached to a stage where we are probably pretty much close to what we could consider as ideal. From that standpoint, Indore unit is not only the latest but the best one as well. In 2008 you took a call to have a pan-India logistics parks network. Where have you reached in four years? How many units have become functional? 17 units have already been created. So we have crossed the half way mark of our target which was 32 units in total. And there are a host of new launches in the pipeline. Our Ambala unit would be launched in next one month. In Manesar, we are creating 1 million square feet area after Gurgaon. So we will have two logistics park units on the main NH-8 – 30 acres on one side and 18 acres on the other side. The construction has started and this facility may become operational before August 2013. Guwahati and Hyderabad units too would be unveiled this year. So there would be an addition of 5-6 units in the near future. So after the addition of these 17 units since 2008, what is the cumulative warehousing space you can claim to have today? And when all 32 units get commissioned, what would be the total space under Safexpress command? We already have seven million square feet of warehousing space. And we will be adding three million square feet more by 2014 end. Can I get a sense of the kind of investments you have made in these logistics parks? We have invested about Rs 600 crore. It’s difficult to believe this figure

Barcoding facility would be available in all units by the end of this fiscal.

because as you said you have bought land in the range of 15 to 45 acres at different locations? That’s true. But these land parcels are not in the main city anywhere. For instance, when I say Indore logistics parks, it does not mean it is within the city. It’s built at NH-3 on Mumbai-Agra highway. So we have not bought urban land. It’s rather rural land which has been converted for industrial or warehousing usage. I am not saying that these parcels have been bought at throw-away prices. But they are not as expensive as land in urban areas or metros. So by the time you get all your 32 units commissioned, how much of investment you would have made in them? I guess, it would be slightly less than Rs 1000 crore. And so far, it has been totally through internal accruals. Have you ever toyed with the idea of getting beyond logistics parks and try your hands with SEZ or FTWZ? There has been a single point agenda behind the creation of these units – to support the growing business of Safexpress. Logistics is our core business and I don’t think it will change even in the future. Therefore, creating and maintaining a SEZ kind of unit has never crossed my mind. I have never taken the

trouble of calculating the value of land parcels which we bought at different stages in the past for creating logistics parks. I have not even thought of any other commercial usage of these land parcels. I will just give you an example. We had bought a piece of land in 2007 in Manesar. But the deal got stuck in some legal entanglement and we got all the clearances this year. Now during this gap, the value of land has shot up signiﬁcantly – almost 20 times. Many friends of mine advised me to use it for some real estate project. But I have declined. I am a logistics enterprenuer, this business is in our DNA and it will continue to remain that way. Pre logistics parks phase and post logistics parks phase, how has the attitude of your customer changed towards you? I would say the change has been to the tune of 180 degrees. Let’s see, what we are doing today? We are not quoting any rates to any customer. When we are dealing with a new customer, we invite their team to visit our units and judge themselves the kind of quality services we are in a position to offer. We tell them to see and evaluate how we work, how quickly we load and unload and what all is done to ensure quickest transit time. In most of the deals, we win our clients the moment they get to see the functioning of our logistics parks. So it’s that kind of difference that these units have delivered to us. LOGISTICS TIMES August 2012

CURTAIN RAISER

‘Supply Chain Transformations 2012’ The Logistics Sector has an exciting event to look forward to this month, as Frost & Sullivan gears up to host its 3rd Annual Exclusive Logistics Strategy Workshop titled ‘Supply Chain Transformations 2012’ from August 22-24, 2012, at the Best Western Resort Country Club in Gurgaon. The workshop aims to develop practical strategies to resolve the three critical challenges that cripple the Logistics Sector, namely, collaboration to gain efficiencies, shortage of qualified resources, and lack of multimodal logistics. The focus would be on developing and delivering industryevaluated and vetted Draft Policies to the Government through a combined effort from the Logistics Service Providers (LSPs), end users, and academicians. The first two editions of the Strategy Workshop titled ‘Future Supply Chain Strategies’, held in 2010 and 2011 by Frost & Sullivan’s Transportation & Logistics Practice, established a unique platform for LSPs and end users to explore the state of supply chains in key industries, identified the challenges, ways to address them, and envisioned the potential strategies for future supply chains of these industries. The 2011 Workshop focused on evaluating megatrends and critical

challenges impacting the Indian logistics sector and delivered a draft on ‘Must Do’ initiatives by LSPs and end users in each key industry to deal with these trends and challenges. The workshop also successfully established that both LSPs and end users need to develop mutual trust and collaborate in order to address the identified challenges and enhance the performance of both parties. At the Supply Chain Transformations 2012 workshop, Frost & Sullivan will open sessions on each critical challenge with a perspective on the current scenario facing the logistics fraternity. Further, the workshop will dwell and ideate upon practical strategies by industry expert groups on the guidelines provided. The collaborative efforts of this workshop will then be transformed into Draft Policies that would be presented to the Government with an appeal for a formal implementation. This year’s workshop intends to assemble a network of today’s best thinkers, visionaries, and thought leaders in India across key industry sectors such as Logistics and Shipping, Automotive, Electronics and Communications Equipment, Engineering, Pharmaceuticals, Retail, and FMCG, apart from academicians and Government representatives.

Speakers at the workshop Prem Kumar Verma, CEO, Tata Motors Limited Distribution Company Ltd. Sudhir Goel, Head of Logistics, Acer India Gururaja Rao, Head-SCM, Novartis India Kalpesh Pathak, AVP-SCM, Fiat Automobiles India K G Raghuraman, Director-Logistics, Samsung Electronics India Ltd. Ramesh Doraiswami, Vice President-Regional Supply

LOGISTICS TIMES August 2012

Chain, Johnson & Johnson India Jagadeesh Kunchey, Head-Logistics, ITC India Bhagwan Das, Director-Customer Delivery Operations, Alcatel Lucent India Ltd. Winnie P John, Head of Value Chain,GlaxoSmithKline Gouri Gupta, Lead-Strategy and Program Development, National Skills Development Corporation

“Pick by Voice” in freezer applications

Easy to use, less bureaucracy, lower training costs and productivity gains of up to 25 percent: the arguments for using the “Pick by Voice” technology for voice directed picking are powerful. Not without reason, most logistics companies and businesses have turned their backs to the pure paper-based procedure. Due to the “Pick by Voice” system, employees exchange very simple data using voice commands via the headset with the electronic inventory- and order management. For the voicecontrolled picking system to work in the frozen food logistics and storage, where they have freezing temperatures down to minus 30 degrees celsius, Imtradex have upgraded the LogiTalk headset series accordingly. The specialists for hear and talk-systems now offer two new headset models specifically designed for use at high subzero temperature. “Pick by Voice also plays a major role in the frozen food logistics. With our two new headsets - the LogiTalk XSpro and the LogiTalk XSN-pro - we now give companies

from this area the right communication solution for voice-guided, paperless picking” explains Mathias Iser, Technical Director at Imtradex. The two new models fit neatly into the LogiTalk series with their functions and capabilities. For the frozen application, they have a shorter gooseneck microphone made of a special plastic. This combination gives together with the still existing NC-pattern of the microphone, the best sound quality with no icing - even in very loud cold storage facilities. The speaker protects the user, thanks to Acoustic Shock Protection, against high noise levels, and at the same time the supplied ear cushions, available in various sizes, protect against the cold. Imtradex has given great importance in the comfort of the new Pick by Voice-

appropriate monaural headsets. “Especially ergonomically designed, light in weight yet extremely stable - they do not interfere with the user in performing

his duties, but support him optimal to do his work. He always has his hands free and is permanent in contact with the proper electronic storage system” Mathias Iser emphasize the other advantages of the two LogiTalk models for low temperature applications. In addition the LogiTalk XSN-pro, wear very well with cloth caps or helmets, due to the neckband wearing style. About Imtradex In 1996 Ralf Kudernak and Mathias Iser, founded Imtradex Hör -/Sprechsysteme GmbH, now one of Europe’s leading manufacturers of headsets. The company develops, produces and distributes hear-/ talk solutions for standard as well as specialized fields of communication. Innovative production technology, a high product quality, reliability and flexibility characterize the performance of Imtradex, who still produces in Dreieich, close to Frankfurt. With a European network of dealers, 400 affiliated dealerships and offices in Austria, Switzerland, Scandinavia, the Benelux countries,

England, Poland, France, Russia and the Czech Republic, the company provide its customers and partners a reliable service and short reaction times. LOGISTICS TIMES August 2012

PRODUCT

SUPPLY CHAIN

Marriage of Marketing & SCM

Professor Akhil Chndra Institute of Logistics & Aviation Management

LOGISTICS TIMES August 2012

In my view what ties the knot between marketing and supply chain management is the customer. Both concepts emphasize that customer is supreme and customer focus must remain on the forefront to derive maximum benefits in terms of ROI and stakeholder’s delight. All activities of members of marketing team and value chain members ranging from raw material suppliers, manufacturers, inbound/ outbound logistics providers and retailers/ marketers must revolve around the customer. In fact, king customer is the main link in the relationship of marketing and supply chain management and plays a pivotal role. If the activities like delivering right product at the right place and at the right time to the customer takes place, this nuptial bond can be eternal. Let us first talk about customer focus in marketing. There used to be a fallacy prevalent in olden days in many business organizations that focussing customer is only a monopoly of the sales department and as if they are the only ones responsible for customer satisfaction. Now thanks to evolution of new management concepts, responsiveness to customer is considered a central thought which must remain embedded in all the domains of the business organization viz sales, production, human resource and finance. Especially in production, voice of customer must not be forgotten right from the inception of product development and must be carried forward throughout all the stages of manufacturing. Honouring customer’s expectations in fact is the main driving force resulting into quality product from the production department. Marketing is more than advertising, sales and promotion. No doubt, the

sales department directly interacts with customers in the market-place; still they are only front- ending the organization. Basically, what ever an organization does, with its end goals of customer delight, enhancement in share value and ROI, is marketing. An end-to-end, customercentric approach requires all segments of the organization – viz production, finance, HRD and administration – to align them and evolve a customer-driven approach and understand the meaning of marketing. They must become an integral part of the marketing team and assist in the company’s marketing efforts. Employees of successful organizations, while carrying out their day-to-day roles, cannot isolate themselves from the gamut of marketing. The entire organization must orchestrate itself in a cohesive manner, keeping the marketing at the forefront. Marketing is more an attitude than a department. A telephone operator who is not polite is not doing her job and is undermining the marketing efforts of the company. Even badly maintained toilets can add to a customer’s dissonance and spoil the reputation of the business house. A liftman, receptionist and peon can all contribute towards marketing by presenting the customer with a smiling face. A customer will judge a company on the basis of his/her contacts with one individual of the organization. That impression, if adverse, could prove to be the last impression. Anyone in the organization can either enhance or undermine the marketing efforts. Marketing has thus evolved in its wider role that pervades the entire organization. Customer focus remains the mantra in the supply chain concepts too. In the supply

chain gamut, not only the organization per say but other members of the supply chain must think every thing around customer aligning themselves as partners. Entire supply chain of suppliers, producers, wholesalers, dealers and retailers for the particular product must work in tandem keeping responsiveness to customers as primary focus and rather than competing within themselves must compete with another supply chain of their competitor. Every member of the supply chain is supposed to be a member of marketing team working for the ROI and profitability of its supply chain. WalMart world’s largest retailer exhibited this concept brilliantly working very closely with its key supplier Procter and Gamble and others to become world’s largest company. In a successful logistics company, when its employees including drivers of their fleet of trucks are striving hard to deliver the truck loads well in time to the satisfaction of the customers then they are deeply involved in the exercise of marketing. Here driver’s primary concern is commitment to his end customer for the product’s timely delivery. Warehouse managers and its order pickers who work 24/7 to keep the flow of material continuous without disruption to avoid any stock out condition are keeping the marketing function in focus and striving for customer delight. In a manufacturing company if a supply chain manager plans the procurement of raw material for timely execution of the purchase orders received from the customers ensuring timely delivery of finished products to the warehouses of wholesale dealers and retailers, then marketing is his main theme. If the quality control manager on the production floor does not comprise with the quality of finished product, then his main worry is performance of the product as per expectation of the end customer and as such does not forget his function of marketing. Everybody in a successful organization must participate in marketing. This is the secret of many successful companies. Technology is helping to emphasise the involvement of everybody in marketing and new emerging applications like

Every member of the supply chain is supposed to be a member of marketing team working for the ROI and profitability. Wal-Mart world’s largest retailer exhibited this concept brilliantly working very closely with its key supplier Procter and Gamble and others to become world’s largest company. EDI, ERP applications, data mining and data ware housing about customer’s profile, ICT etc network everybody to evolve a marketing-driven organization. Technology has given the customer a wide choice shaking the marketplace continuously and the marriage of technology and marketing must take place to make organizations more responsive to a customer’s changing needs. A closed loop control system must evolve to where the entire organization participates. It should first collect feedback. This

new feedback loop has replaced the advertiser’s one-way communication. This interactive experience is necessary for a successful organization. In today’s globally competitive environment, involvement in marketing cohesiveness is necessary for every segment of the organization and team members of the value chain and the best practices can evolve only by understanding the true relationship of marketing and supply chain management while customer remaining the bridge between them. LOGISTICS TIMES August 2012

TABLE FOR TWO

SLOWDOWN AND LOGISTICAL ADJUSTMENTS

LOGISTICS TIMES August 2012

For the LSPs, their worst nightmare could well be when the sales of their customers flatten or go down due to slowdown pressures. This is probably the spell when the expectations of the end user industry rise manifold almost forcing LSPs to indulge in tight rope walking to retain their cleint base. Logistics Times recently conducted a ‘Table for Two’ discussion focusing on the issue of ‘slowndown and logistical adjustments.’ The panelists were: Devender Sharma – GM (Supply Chain), DAIKIN and Aditya Gupta- Head (Distribution), DIESL and the discussion was moderated by Editor Ritwik Sinha. Excerpts from the discussion:

LOGISTICS TIMES August 2012

TABLE FOR TWO

Ritwik Sinha(RS): On behalf of Logistics Times, it gives me immense plasure to welcome both of you in this edition of table for two. The purpose of this discussion is simple: to invite practioners from the industry and get their views on a pertinent micro issue. As we know, our economy is in the grips of probably a strong bout of slowdown and such a spell entails adjustments galore in logistics and supply chain management whether its manufacturers or LSPs. Before we come to the core issue of adjustments, let me get a sense from both of you on the extent of impact of the present spell of slowdown on your line of businesses. Devender Sharma (DS): There have certainly been some inﬂuential factors which have put down the business a bit. Rupee depreciation has turned out to be a major contributor to the slowdown resulting in our costs going up and there is an extreme pressure to increase the product prices. However, increasing the prices in a ﬂat market is not considered to be a good option. As far as some industries

like ours is concerned, we have not revised our prices based on the factors which keep on changing the market dynamics. We change the prices only towards the beginning of the year. So if the overall cost is increasing because of exchange rate and other factors, we are forced to absorb. However, as I said this has put our industry under tremendous pressure. Everybody is looking at out of box ideas to combat the present spell. As per our Fusion-15 strategy, we are looking at tier-II and tier III cities to expand our sales network to drive our business growth. Aditya Gupta (AG): The impact of the present spell of slowdown can be seen at several levels. Firstly, it has to be seen in terms of dynamics of warehousing capacity in the market. For a company like DIESL – we operate warehouses which offer customers ‘built to suit’ facilities and can be taken on lease for several years. The basic challenge which we are facing for last one year is that customers are not increasing their warehousing space, the demand has stagnated. Sometomes we

get requests for the reduction in the space which clients had booked earlier. In such situations, for us to ﬁll that area by some other customer is becoming increasingly difﬁcult. In normal business spells, we carry certain percentage of vacant space which is some kind of inventory carriage which we always do. Today this percentage of vacant space which we are carrying is much higher as compared to last year. The second important challenge which we are facing relates to cost dynamics. The cost pressure faced by the end user industry negatively impacts the annual increase in the logistics service cost, which is the norm during the normal spells. Logistics industry in general is facing high manpower cost – minimum wages are going up, employees ask for annual increment, etc. Our industry, as you know, is a labour-intensive industry and one can’t avoid these issues. RS: Recently, we had one of the months wherein we almost reached to a degrowth kind of scenario in manufacturing. My question to both of you is: did you anticipate

The basic challenge which we are facing for last one year is that customers are not increasing their warehousing space, the demand has stagnated. - Aditya Gupta LOGISTICS TIMES August 2012

Every established manufacturer knows the cost components of different range of services provided by LSPs. And they do ask for reduction in cost especially during the downturns but not to the extent that LSPs have nothing to earn at the end of the deal. - Devendra Sharma this kind of situation just six months back. AG: 2011 was a difﬁcult year. And there were sufﬁcient signals that 2012 is not going to be a great year. And that is how things have unfolded – economic parameters are not in the right shape. Obviously, when we did our annual budgeting and planning, we did factor in that 2012 would not be a positive spell for the entire industry. So that is something which we had built in. At the

same time, with more companies looking to outsource their logistics as a method of cost optimization, Indian logistics industry is managing okay. DS: As far as our business is concerned, especially when we look at AC segment, it has been the case of very late pick up. We saw ﬂat sales around the beginning of the summer which normally is not the trend. But then there was a prolonged spell of high temperature climate especially in north

India and business did correspondingly pick up. So the lower sells during the initial months has been compensated to a considerable level. Secondly, as fas our business goes, we have been experiencing triple digit growth for the last couple of years. We have registered growth in all our three product segments – Residential, Commercial and Industrial. As far as consumer durables industry is concerned even if we bring in other products, it hasn’t precisely been the case of degrowth for

LOGISTICS TIMES August 2012

TABLE FOR TWO

the industry in general. The growth rather has been small. But as I said, exchange rate spiral has escalated our cost but due to small growth scenario, price rise is an option nobody would like to exercise. So how do we handle this pressure? One of our responses has been by outsourcing many activities which are non-core to us. This obviously also includes hardcore supply chain activities. Must say, our expectations from 3PL service providers in the present spell have gone up. We expect them to add efficiency to our operational value chain by reducing inefficiencies at their end. RS: Aditya, this is a specific question for you. Devender earlier made this statement that one of the strategies which companies in his line of business could adopt is to look to tier-II and tierIII markets when the business is down. I would like to understand from you, does this kind of sideways avenue also exist for 3PLs? Can you look for newer markets in a sluggish market codition? AG: As far as client base is concerned, not much investment is happening in the country for the expansion of businesses. Customers who are using logistics services remain the same. DIESL’s focus is on enhancing our portfolio for our current clients and preparing to serve them even more efficiently. The point is to add value to the offerings made to them. So if they are looking at new or tier-II or tierIII markets, the challenge for us is how do we support them in entering in new markets. So, if they are keen to enter into new markets, we have to follow them. That is the mantra. RS: Tell me Aditya, apart from cost pressures, what are the other adjustments you have to make in a spell like this to ensure that the existing clients who have become more demanding because of his own set of pain factors, stay in your fold? AG: For clients from different sectors, you need to put in place adjustments of different nature. ‘One size does not fit all’ – the rule finds manifestation in the LOGISTICS TIMES August 2012

sluggish market place. Take the case of telecom sector where we have good bit of expertise. In telecom sector , reverse logistics has become a big business. We are getting a huge inﬂow of telecom tower equipments. And these equipments are mostly coming back from sites to warehouses. But these are low value items. So the clients want the space but they don’t want to spend big money on them. But we have to ensure that we offer the solutions which they want. I spoke about shrinkage in warehouse space earlier. Obviously, there are far more pressures in terms of service level, inventory management, etc. RS: It is generally believed that since the equation between the end-user industry and LSPs has really not reached to a matured stage in the Indian market, its only cost differential which can keep a client glued. If you are not serving him with lowest possible cost, he might switch over to some other service provider. It is no secret to anybody that in this industry, costs are always used as a weapon to grab the clients. Is it a serious handicap for LSPs? AG: Cost is obviously an important factor in end user-LSP relationship and it probably becomes the strongest factor in a slowdown spell. If your customers are facing cost pressure, they would obviously want to get services at lower price level. And unfortunately, supply chain is one function in every organisation which is looked upon as a cost saving department. So the burden is bound to be shifted to LSPs. But improving service level is also an important element in sustaining clientLSP relationship. What I am saying is that at the end of the day, customer is either looking at improvement in service level or cost reduction. If we can provide either of the two, then customers are likely to stay with us. Here, service improvement should not be seen as a lesser inﬂuential factor. No big customer would ever want to jeopardise his supply chain by bringing in a vendor which can’t guarantee service standards just for the sake of reducing logistical cost. Cost of non-performance is equally too high in our business.

RS: Devender, what I could make out of Aditya’s response is that reliable partners are more in demand during the slowdown phase. What’s your take on this? DS: What I think, as far as 3PL service providers are concerned, established companies treat them as business associates. We do not look at the cost only because they are delivering our products and customers have got aspirations and imagination attached to them. If something goes wrong in the operation, suppose the product is damaged, then the entire costing goes for a toss. So we have to be very careful in managing our supply chain. We broadly look for business associates and business partners who can match both the things – cost as well as delivering our products in a safe and secured environment. Cost obviously has the direct impact on our budget and we have to especially consider it in the case of reverse logistics. If something gets damaged, reverse logistics is a cost for us which we would not be comfortable with. So we avoid to deal with vendors who just make promises on the cost front. We usually consider the entire set up of our service providers – the warehousing, automation, manpower, transport network and its capacity and ﬁnancial situation of that company. So many factors are judged in the vendor selection process. Look every established manufacturer knows the cost components of different range of services provided by LSPs. And they do ask for reduction in cost especially during the downturns but not to the extent that LSPs have nothing to earn at the end of the deal. RS: Devender, can I get a sense of your company’s supply chain management in India? For instance, how many vendors you are using? DS: We import certain products from our different manufacturing units across Asia. We have a state of art manufacturing facility in Neemrana, Rajasthan to produce commercial and industrial

MEDIA PARTNER

LOGISTICS TIMES August 2012

TABLE FOR TWO

segment products. In brief we import finished goods as well as manufacture locally. Our distribution network is based on Hub and Spoke model covering pan India. We have four Hub warehouse and 18 spoke warehouses and to support the supply chain network there are threefour vendors to take care of our imports. Then we have 8-10 transporters who are shifting our imports to warehouses. Then there are another seven-eight companies taking care of warehousing and local movement. Put together, we have around 20 service providers. RS: Have you ever thought that instead of having so many vendors, you should have a select few who are more reliable? DS: We are quite interested in consolidating because it makes your operations seamless. We would certainly like to have less number of vendors who can assist in our pan-India operations. This is our aspiration. In current scenario, it looks difficult because of the fragmented and dispersed nature of the business. But in future, we expect that some companies which have expertise in all three areas – import, warehousing and transportation – would become our long term associates. In an ideal situation, we would just like to have three-four vendors. RS: Aditya, one critical statement you made is that due to slowdown pressure, its becoming difficult to fill the warehouses. Am I correct in my assessment that it would also have adversely affected the capacity addition exercise in the warehousing sector? Not too long ago, there were many players who were showing extreme signs of bullishness in expanding their warehousing base. AG: At this point of time, yes. Industry in general is witnessing a serious demand-supply mismatch. If anybody takes a decision to add capacity even to a most vibrant market like Delhi/ NCR, sustaining it would be a challenge. Nobody would like to add capacity if there is a serious gap between demand and supply. 3PL industry has gone slow LOGISTICS TIMES August 2012

on investments and capacity addition at this point in time. RS: Let me come to my final point. Does a spell like this also offer you an opportunity to turn your customers into long-term prospects? If in the crisis hour of the end user industry, you meet their aspirations on the supply chain front, the chances are you might win them for a long time. AG: Defintiely, it’s the intent of all 3PL service providers to engage their customers on the long-term basis. And there could be several ways of doing that. One is obviously if the client is going through cost pressures, there could be different modules for costing. One is the open book costing formula where we charge on the basis of our resources deployed. But in a slowdown spell, we can go for a close book costing which means LSPs would charge the customer on the basis of per unit handled by us. In a slowdown scenario, this could be a very effective tool. This will also make the supply chain more efficient. There are few customers who have started showing preference for this formula. Also, maintaining hassle free, top notch service levels and trained staff go a long way in cementing long term tie ups – something we have benefitted from in the past. DS: On the costing issue – whether its open book or close book formula – at the end of the day it is cost. These new formulas, no doubt, are emerging. But players like us at this stage would like to have transparency in the entire mechanism, visibility of everything, and participate in each expense. In fact, transparency in all aspect needs to be maintained – be it costing, operations, delivery, customer satisfaction, etc. We do not prefer this per unit model in our current business scenario. I think, going ahead if we are looking at robust relationship between manufacturers and LSPs, then LSPs need to improve their infrastructure and pay attention to enhance their manpower skill base and overall operational efficiency.

Solving

SCM Puzzle

Watch Out for September Issue

Supply Chain Special

New player in the express ring

A Gurgaon headquartered group, much known as a Freight Domain specialist with more than 25 years expertise in Forwarding, Airline Representation and in IT Solutions for Freight & Aviation Industry, has now firmed up plans to venture out in a new direction. In terms of vertical addition, the organization has decided to launch its Innovative Express Parcel Service in a market which is pegged at over a billion dollars in the country and growing consistently every year. The new venture has been christened as ‘Red Express’ with term ‘RED’ subtly underlying what the company intends to achieve – Real Time Express Distribution. Going by the version of a top company official, “RED EXPRESS will be launched by the end of the year as India’s first dynamic Door to Door Express parcel service. Soft Launch of the services will be from North India, Mumbai, Pune and Chennai. It will offer extended pickup and delivery services that are dependable and time guaranteed, providing immense value to business

entities, big or small, domestic or global. Services will include express same day service and also collection of the value of the consignment, which can be a key added value to the growing E- Retailing business in India.” The company claims that its Red Express service would have a set of differentials which would become apparent from day one. “This venture has been conceived after over an year of planning and experimentation, wherein we have attempted to put in place an unique model for our customers through the subtle combination of manpower, technology and processes. For instance, we are deploying ﬁrst of its kind online booking engine in this segment which would set apart our services in terms of customer satisfaction,” says Shivi Suri, who is heading the project. Under Red Express Services, the company would be broadly offering four categories of services – Red Flash (same day delivery), Red Plus, Red Value and Red Deal. According to Ashish Sethi, business

head of the venture, the customers would be inundated with choices at several levels. “The customers - be it corporate or non-corporate - would have plenty of choices in terms of pick up of their goods – they can come to our centers or just communicate to us and goods will be picked up from their place. Our IT platform is so robust that the customers would have absolute real time information on the movement of their goods. We will have a dynamic pricing structure and there would be multiple payment options, including acceptance of online payment by Credit Card and introduction of Debit Accounts from day one. Furthermore, we will be setting up a customer care service which would be working on a 24x7 basis and not close at 9 PM which is the norm in our industry.” The company has set its eyes on ultimately introducing this service on a pan-India basis. But initially, as Suri informs, Red Express would be rolled out in phases. For pan-India presence, the company has drawn a massive plan of network and LOGISTICS TIMES August 2012

COMPANY NEWS

centers rooted in the time-tested hub and spoke model. “As per our plans, to roll out this service on a country wide basis, we will need 10 Master Distribution Centers (MDCs) and 48 Sub Distribution Centers (SDCs) spread across 23 cities. We have planned to set up these units in association with business partners at different locations in the country who can set up and operate these distribution centers under Red Express brand. We are currently talking to as many as 110 companies who have shown interest in our model,” Suri adds. Red Express would also be inviting players from outside to become franchise partners. Meanwhile, in terms of attaining operational precision especially at the back end, the company is promising to spare no effort. “We are promising express parcel service of very high standards. That is why we have opted for Unit Load Device (ULD) which would have unique Color Coding and security features that would ensure reduction in instances of lost packages and irregularities, while also improving the safety and security of the

consignments during transit,” Operation head Saurabh Pathak underlines. To kickstart the operations of Red Express by the end of the year, the company is eyeing to create a specially designed fleet comprising 130 Red Liners. In terms of clientage profile, the company is confident to make major breakthrough in the segments like SMEs and retailers in

its initial phase. Even as company officials are not divulging the investment which has been pumped in the new venture, there are subtle hints to suggest that it would be taking off on a sound financial base, with a Singapore based freight firm putting in major funds. - LT Bureau

Season 2 of Talent Hunt

Pictures of season one finale LOGISTICS TIMES August 2012

Million Minds Management Services (earlier known as T2P Consultants) would be kictstarting season two of Logistics achievers awards and Logistics Talent Hunt 2013 from early next month. In a press note, the agency has reported that Logistics Talent hunt 2013 would be launched on 1st September with curtain raiser ceremony and final grand finale event is scheduled on 9 Feb2013. Logistics achievers awards and Logistics Talent hunt is an industry event which recognize achievement of Logistics industry professionals starting from drivers to inventory manager/transport manager/ware house manager/IT manager to a host of young achievers awards for coming professionals. Furthermore, there are distinctive categories to recognise innovator of the year for creativity, logistics academicians, logistics ambassador and Doyen of logistics for ultimate achievement. These awards are conferred on industry professionals through nominations process and selection by high level committee of Jury comprising of leading Logistics company MDs, academicians of IIT/IIM, top officers of Railway Board, and top consultants from the field of logistics-supply chain. Another vibrant component of the event is ‘Logistics Talent Hunt’ exercise which is organized on pan india basis to select potential logisticians from business schools. Under Logistics Talent Hunt student will participate by forming team of five students and prepare a project report on topics given by jury. All business schools in the country and students can participate in this event for which screening process will be conducted in Bangalore, Mumbai and Delhi for season two. Final winners will get cash award with trophy and certificate on the day of Grand Finale with Logistics achievers award. Million Minds has made arrangement with some leading logistics companies to absorb the awarded students of Logistics Talent Hunt 2013.

LT-SPECIAL FEATURE

Making a difference

ImpelPro- The core team (in the front row) - Shriram Hariharan; standing(L to R)- Sudhir Dabke, Sanjay Ghone and Sunil Nair

ith rising operational scale & complexities in the Indian logistics space in recent past, it has increasingly become clear to one and all that supply chain management is no longer an activity which can be undertaken on a cursory basis. As the saying goes, supply chain today can simply make or break the prospects of a business. Hence, the loud and clear message which nobody can afford to ignore is - supply chain management should be guided and executed by specialists to ensure that not only work flow is smooth but also there are cost related benefits for all stakeholders in the value chain. Clearly, the

rule seems to be if you find right specialists, you stand the chance to be benefitted with double bonanza. Mumbai-based ImpelPro today certainly stands as the testimony to the fact that specialists can bring a world of difference to your supply chain performance. Formed barely a year ago, the company comprises of a strong knowledge pool in supply chain and logistics as reflected by its four core partners namely Shriram Hariharan, Sanjay Ghone, Sudhir Dabke and Sunil Nair who cumulatively bring on the table supply chain experience of over 11 decades in such diverse industries as 3PL, Quick Service Restaurants, Pharma, Retail, LOGISTICS TIMES August 2012

SPECIAL FEATURE

FMCG, Food processing, Food Service, Agri. etc. Says Sanjay Ghone,‰After having worked in the industry for more than 2 decades, we realised that there are apparent opportunities to improve supply chain in the country. Each one of us having involved in complex world class operations, felt confident and passionate about exploring those. With varied experience and expertise, four of us very well complimented the purpose. Moreover, all of us were known to each other for more than 10 years, which I feel is very essential for any successful partnership.‰ Sunil Nair adds, „The strength of ImpelPro is the hands on experience of each of the directors. Whether it be a startup of new business or building a successful brand in the country, we have played leading role. I

Unique Offering Warehouse Health Check-up Program (WHCP), a fully developed service from ImpelPro offers operations health check-up under eight important heads covering facility, people, EHS, operations, product safety, security, compliance and performance measures. WHCP is not a software but an audit tool to ensure continuous vigilance on all important aspects of operations and ensuring brand protection. WHCP with active dash board and suggested corrective actions enables management to take right decisions and move on the ladder of continuous improvement. The tool helps in comparing multiple facilities (DCs/CFAs) for ranking and rewarding.

Prestigious Projects In June 2011, ImpelPro assisted Keystone Foods, a multinational food distribution company, with India strategy. ImpelPro is associated with ColdEX in reengineering their secondary transport operations in the country, wherein the focus is on better controls, efficiency and improved services. The project is in progress and IT integration is being implemented now. ImpelPro assisted Jyoti International (National distribution partner for Subway and Yum (Small Ware), in restructuring their operations. ImpelPro is also involved in helping Brattle Foods in many of their start-up operations. ImpelPro is assisting one of the divisions of Johnson & Johnson, in designing, training and implementing QMS (Quality Management System) incorporating ISO and J&J global standards. Recently ImpelPro is partnered with a large 3PL organization for designing purpose built Distribution Centres for them across India. The DCs will be equipped with the best in class equipments, layout to support high velocity product movement, multi temperature zones, cross docking, separate section for Pharma and fully compliant to applicable Indian law, and various global

LOGISTICS TIMES August 2012

standards. ImpelPro helped North West Carrying Company (NWCC) in successful startup of their first retail client Metro Cash & Carry. The support included SOP development, training, DC operations manual, devising KPI system, reporting & monitoring system, implementation, handholding and streamlining. ImpelPro offered project management planning & monitoring support to Vista Processed Foods Pvt. Ltd. for their new production centres in South & North India. South project is fully operational while the North one is under implementation. Recently ImpelPro bagged a very prestigious project of optimization and re-engineering for a large Food Service Business in United Kingdom (UK). Wherein, ImpelPro will be studying the existing operations of 10 Distribution Centres and will assist the organization in improving efficiency/productivity, cost optimization and service improvements. ImpelPro supported many new comers into Food and Pharma 3PL space with specific research work leading to market estimation, business structuring, investment and returns, etc.

SANJAY GHONE

After having worked in the industry for more than 2 decades, we realised that there are apparent opportunities to improve supply chain in the country.

SUNIL NAIR

Our offering doesnÊt just include consulting, but we proudly assist implementation and handholding

believe that while acquiring knowledge is must, having them applied in your day today business is all the more important. And we are good at it. Hence, our offering doesnÊt just include consulting, but we proudly assist implementation and handholding, and we live our punch line Âenabling sustainable supply chainÊ. The USP of the core team is high-end expertise in diverse functionalities of logistics business be it strategy formulation, actual operations, engineering, project management, IT, people & training, business commercials, business excellence, etc. But the key USP of the company clearly lies in providing end-to-end integrated supply chain solutions including Cold Chain. „After careful study of supply chain for the target industries, we realized that one of our solutions should strongly & convincingly transform traditional cold chain approach to a modern one, by eliminating conceived ideas and bring in possible latest technologies in master planning, designing, equipment selection & management of project execution. This approach will surely benefit clients in cost optimization, building in efficiencies and on-time project delivery all essentials for business sustainability in todayÊs cost sensitive & demanding market. Nirman for cold chain is aimed at providing exactly these values and we have plans to further sharpen these offerings in coming years,‰ Sudhir Dabke explains. The impressive knowledge base which lies at the core of ImpelPro team derives from the fact that the main partners have learnt the basic rules of the game by spending years with the supply chain of such renowned firms as Johnson & Johnson, McDonaldÊs, Subway, Bharti Wal-Mart, PepsiCo (Snacks & Beverages), etc. The basic strength of the company which

SUDHIR DABKE

SHRIRAM HARIHARAN

After careful study of supply chain for the target industries, we realized that one of our solutions should strongly & convincingly transform traditional cold chain approach to a modern one

Our objective is to support our clientsÊ operations to match global standards so that they are well prepared to compete and win more accounts.

has endeared it to a host of reputed clients in such a short span lies in the fact that it does not only provide the advisory support but also design and implement the solutions. On an overall basis, ImpelPro offerings can be divided into four distinctive sections, each underlying the availability of cutting edge solutions at each stage of operational chain. The services can be classified as: Nirman Creation, Construction, Building Prakriya Process, Procedure, System, Form Kshamata Capability, Power, Fitness Pragati Progress, Development, Growth ImpelPro has just entered into its second year of operations but it already has many brownie points on its report card (Refer to box: Prestigious Projects). And going ahead, company has drawn a well-conceived plan to enhance its Âmaking a differenceÊ capability in the Indian supply chain space. „Having successfully come so far, we are looking at further upgrading quality and span of our offerings. Our objective is to support our clientsÊ operations to match global standards so that they are well prepared to compete and win more accounts. We have identified the areas of infrastructure, people training and technology driven operations as our focus areas for the future. We are increasing our skill band width by adding more specialists to our team in the area of engineering, quality and training,‰ Shriram Hariharan underlines the near to medium run objectives of the company in these words. Clearly, ImpelProÊs story is poised to get more interesting. (Website: www.impelpro.in Send your querries at: info@impelpro.in)

LOGISTICS TIMES August 2012

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Full size flexible curtain entirely made of class 2 selfextinguishing polyester, with no horizontal strengthening parts, which slides inside the side hinges and features selfrepairing properties and high resistance to air and wind pressure to 120 km/h

For further details, Contact: Gandhi Automations Pvt Ltd, 2nd Floor, Chawda Commercial Centre, Link Road, Malad(W) Mumbai 400064, Off : 022- 66720200/66720300(200 lines), Fax : 022-66720201, Email :- sales@geapl.co.in, Website : www.geapl.co.in LOGISTICS TIMES August 2012

Business Partners Awards 2012 Mahindra Logistics held its 2nd Business Partners Award Ceremony followed by cocktails and dinner on 19th July 2012 at ‘The Lalit’ hotel in Mumbai. The guest list included over 100 Business Partners as well as several customers. The purpose behind holding an event such as this was to recognise and reward the performance and support of Mahindra Logistics’ business partners and to foster an environment of mutual, inclusive growth. It was also an ideal platform to recognize and reward those outstanding drivers who contribute signiﬁcantly to sustainable growth. The event started with felicitating the Gold category members from Mahindra Logistics’ Business Partners Loyalty Program for their outstanding performance. At the event, the 2nd edition of “10,000 kms on Indian Highways” by Ramesh Kumar was also launched, the foreword to which has been written by Pirojshaw Sarkari – CEO, Mahindra Logistics. For the Business Partner Awards, there were 17 categories for the various logistics activities that MLL (Mahindra Logistics) operates in. This year MLL also saw introduction of a new category of awards – Best Performing Driver awards. Under this category, MLL awarded ﬁve drivers for their crucial contribution towards achieving success.

LOGISTICS TIMES Augustt 2012 2

EVENTS

Ceat Transportation Awards 2012

The third edition of the Ceat India Road Transportation Awards 2012 concluded successfully at Trident, Nariman Point recently. The event was graced by Jitin Prasada, Minister of State for Road Transport as the Chief Guest and Dr. Pawan Goenka, President, Mahindra & Mahindra Automotive as the Guest of Honor. These awards have been instituted to serve as a credible platform for thought leaders and businesses in the road transport domain to showcase their innovative excellence year after year. Continuing the precedence set over the last two years, this year V-Trans (India) Ltd. has won the National award in two categories ‘Personnel Management’ and ‘Operational Excellence – HCV- Customer Experience’. In fact it has achieved a hat-trick by winning the National award in the ‘Personnel Management’ category for the third consecutive year. The event also saw Mercurio Pallia bagging the award as the North Region Winner in the *Operational Excellence-Fleet Maintenance and Management* category.

LOGISTICS LOG OGISTICS TIMES August 2012

RNI No. DELENG/2011/39329

Regd No.: DL(E)-20/5380/2011-13