Lt sept 2010 pdf by Raj Misra

PERSPECTIVE Prem K Verma

INTERVIEW Rene Peerboom

CASE STUDY Indian Oil Corpn.

PROFILE R K Saboo

LogisticsTimes www.logisticstimes.net

September 2010

` 50

Vision 2015 “United We Win”

With the core objective of emerging as the most preferred ‘one stop shop’ for all logistics requirements in the country, DHL business units are holding hands more tightly now. LOGISTICS TIMES July 2010

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LOGISTICS TIMES August 2010

Logistics Times

CONTENTS

All about Transportation, Distribution & Infrastructure Volume 1: Issue No.5 * September 2010 Editor in Chief Raj Misra rajmisra@logisticstimes.net Editor Ritwik Sinha ritwik@logisticstimes.net Consulting Editor Ramesh Kumar ramesh@logisticstimes.net Mumbai Bureau Rahul Kumar rahul@logisticstimes.net Sub Editor Neha Richariya Photographer Anil Baral Design Consultant S. Athar Hussain Designer Kausar Syed Circulation & Distribution Kamruddin SaiďŹ Legal Advisor Rakesh Garg

20 DHL Vision 2015:

United We Win

Editorial Advisory Board Paul Lim Founder & President Supply Chain Asia Vinod Singhal Brady Family Professor of Operations Management, Georgia Institute of Technology, College of Management Kate Vitasek Faculty, Centre for Executive Education The University of Tennessee Professor K S Pawar Nottingham University Business School Prof. Samir Srivastava Associate Professor, IIM-Lucknow Prof. Akhil Chandra Institute of Logistics & Aviation Mgt Sanjay Upendram Founder & Chairman, Amarthi Management Consulting Marketing & Sales Outthink Strategies Ph: 65177214, 26412476, 9818097385 Email: sales@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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PROFILE Express man from Bhadralok Edit Note News Brief Events

6 8 49

PERSPECTIVE

Prem K Verma CEO, TML Distribution

40 CASE STUDY

What we did at IOC

34 INTERVIEW

Rene Peerboom

EDIT NOTE

DHL Unplugged Phew… two days, interaction with nearly 18 executives (including five CEOs), and inbetween some photo shoot sessions. It was what you call a whirlwind trip as we (me and our young photographer Anil Baral) landed in Mumbai last month for two days to put together the cover story on DHL for this edition. But it was certainly worth every penny as we managed to get the clear glimpse of that big picture which four divisions are contemplating for their respective future growth as well as taking the brand DHL to the next level in the cumulative sense. So what is the cornerstone of that big picture? All the business unit heads unequivocally assert that the big idea is to assume the character of being the most preferred ‘one stop shop’ in the country for all logistics requirements of their customers. And for this, the modalities for better co-ordination and operational alignment are being worked out. This would entail the mutual sharing of physical assets (read infrastructure), cross promotion in sales and marketing and judicious use of HR resources within the group units. The path chosen by DHL certainly seems to be very interesting. With over three decades of experience on the Indian turf and market leadership positioning in most of the business verticals they operate, the focus is now shifting to emerge as the integrated end-to-end solution provider in the true sense of the term on a pan-Indian basis. The group units would be strengthening their services profile and through a well-planned operational synergy, the deliverable platform of brand DHL would be broadened. Leaf through the cover story to get a sense of the planned churnings at DHL quarters in the next four-five years. By the way, DHL top brass in the country did not divulge the financial numbers citing company policy (Blue Dart is an exception here as it is an enlisted firm and its annual revenue is well close to Rs. 1000 crore mark). But yes, it does make the task of assessing the real strength of the player under the spotlight a bit difficult. So LT spoke to two veterans in the industry who have observed the growth of the company in India over last three decades. And going by their assessments, the company could well have a topline in the range of Rs 2600-Rs 3000 crore. “ It is well poised to be the first logistics company in India to touch $1 billion mark in the coming years.” Probably, with this figure in mind, DHL units have resorted to ‘united we win’ strategy. Among other attractions, you have Rene Peerboom of AirFrance-KLM cargo in the interview section explaining the plans of global air cargo major in the Indian market. In our profile section, we feature R K Saboo of First Flight who has also been the chairman of Express Industry Council of India for past five years. In the interesting interaction with us, he revealed how First Flight, a major entity in the domestic express business, has been built from the scratch in over two decades. The section also brings to the fore some interesting aspects of RK’s (as he is fondly called by his friends) life. Hope you would enjoy reading this edition.

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Ritwik Sinha ritwik@logisticstimes.net LOGISTICS TIMES May 2010

LOGISTICS TIMES May 2010

NEWS BRIEFS

NATIONAL

Port capacity to touch 1 billion tonne mark

September is all set to be a milestone month for Indian Port sector as the cumulative capacity of all major and non-major ports is likely to cross one-billion tonne mark. Last month, the nation-wide capacity had stood at 996 million tonnes. And in September, Gujarat Maritime Board (GMB) is scheduled to add another 19 million tonnes which would take the cumulative capacity strength of Indian ports well past one billion tone mark. As per ofﬁcial record, the total capacity available with the 12 major ports at the end of June this year had stood at 619.88 million tones while non-major ports’ contribution was 355.06 million tonnes. Of the 355.06 million tonnes capacity of non-major ports, GMB had a dominating share of 243.64 million tonnes.

VCT to buy six cranes from Kone The Visakha Container Terminal Private Ltd (VCTL) which operates the container facility at Vizag port has signed an agreement with Kone Cranesfor four rubber tyred gantry cranes (RTGCs) and two rail mounted quay cranes (RMQCs) (LT had reported this intention of the company in its May edition). Kone Cranes is a leading European ﬁrm with its headquarters in Finland. The cranes would cost the company Rs 120 crore and they would be supplied over a period of next 16 months. The terminal is seeking to expand its capacity from the present 3,00,000 TEUs to 5,00,000 TEUs.

LOGISTICS TIMES September 2010

Country’s first FTWZ unveiled

Free Trade Warehousing Zone (FTWZ), touted to take logistical services level to a new scale in the country, has finally become a reality in the country. Last month, Arshiya International unveiled India’s first Free Trade and Warehousing Zone (FTWZ) in Panvel, Mumbai just 24 kms away from the Jawaharlal Nehru Port Trust (JNPT). This 165-acre state-of-the-art facility will be operational over two phases employing over 25,000 people at full capacity and is expected to cost approximately ` 1,500 crores. Falling under the premise of the SEZ Act, FTWZ allow flexibility towards end-distribution through duty deferment, higher inventory visibility, reduced buffer stocks, and overall lower product costs. They also enable flexible and hassle-free re-export in addition to other advantages Commenting on this first of its kind facility in the country, Ajay S Mittal - Group Chairman & Managing Director of Arshiya International said “With the launch of India’s First FTWZ, Arshiya will not only increase profitability and induce cost savings for our customers, but will also serve as a game changer in the Indian logistics landscape. The FTWZ develops a whole new dimension in our ability to provide integration, flexibility and savings for our Global & Indian customers and we are especially excited about the opportunities to make India a regional storage and value-addition hub.” The company has drawn an ambitious plan to have five FTWZ units in the country in the coming years which comprise its larger Rs 7,000 crore integrated infrastructure plan which also include the creation of five strategically located Domestic Distriparks and a 75-train Pan-India Rail Infrastructure charter - all on an existing ten-year Freight Forwarding, Supply Chain & IT Solution legacy.

FedEx announces expansion plans Global express major, FedEx last month announced plans to strengthen the company’s international and domestic services across India. And as part of this expansion drive, the company has launched a new flight from Bengaluru establishing direct connections to Europe and the Middle East and the U.S. With this, Bengaluru becomes the third Indian gateway for FedEx joining Delhi and Mumbai. “India has witnessed exceptional levels of economic expansion, and despite the global economic downturn, the economy reflects strong performance in manufacturing and export-oriented industries,” said Kenneth F. Koval, vice president, Operations, FedEx Express India. “The launch of the new flight from Bengaluru, coupled with the domestic service expansion, broadens market opportunities for customers doing business locally as well as internationally by leveraging the reach of the FedEx worldwide network.” Meanwhile, FedEx premium domestic express delivery service is also expanding its next business day service from 14 to 58 origin cities in the coming months. The 58 cities selected for the domestic express service expansion contribute to 40 per cent of India’s GDP and allow FedEx to offer a more defined and diversified product portfolio to and from major cities across India.

AILPL launches two logistics parks in east Apeejay Infralogistics Private Limited (AILPL), a 50:50 JV of Apeejay Surrendra Group and UK based Eredene Capital PLC, recently announced the opening of two new integrated Logistics Parks in Haldia, West Bengal and Kalinganagar, Jajpur, Orissa. The uniquely designed, ultra modern and strategically located facilities providing around 1.0 million sq ft of warehousing space represent combined investments of over Rs. 250 crores. The ﬁrst phase to go live at Haldia is spread over a working area of 45 acres with 24 acres earmarked for Container Freight station to handle over 4000 containers and includes 60,000 sq ft for Exim Bonded warehouse. The facilities at Kalinganagar under phase-1 will include 120,000 sq ft for domestic and contract warehousing and 175,000 sq ft for open storage and project cargo. On completion the Kalinganagar complex will have capacity to handle over 2500 containers for EXIM and have covered warehouse of over 250,000 sq ft in addition to hospitality, commercial and retail space.

Concor looking for JVs According to an agency report, public sector transportation services major Container Corporation of India (Concor) is likely to ink a joint venture (JV) with global shipping majors for catering to exim trade requirements of shippers. The company is believed to be negotiating with various shipping majors and with non-vessel operating common carrier (NVOCC) companies. Quoting an ofﬁcial source, the report says that the proposed JV will take place within a year. “Concor uses its container train rail network to provide logistical support and involvement of shipping companies would widen its base in the country,” the ofﬁcial was quoted as saying.

Incentive for exporters In a signiﬁcant development, the government last month doled out an incentive package of Rs 1,050 crore for exporters representing labour intensive sectors. The move is aimed at providing relief to the small and medium scale exporters when the demand for their products is witnessing a slump in country’s two leading trade blocks – Europe and the US. “To give immediate relief, a bonus incentive is being provided to sectors whose exports are still not doing well,” commerce and industry minister Anand Sharma said while announcing the annual supplement to the foreign trade policy. The incentive would be availed by the exporters of handicrafts, handlooms, silk carpets, leather and leather manufactures, sports goods, toys and some bicycle parts.

LOGISTICS TIMES September 2010

Coffee with

Sunil Kohli

President, Air Cargo Club of Delhi

New chief, new goals hen the newly elected President of Air Cargo Club of Delhi (ACCD) Sunil Kohli sounded “how about a cup of coffee?” through SMS recently, I jumped at the idea. No, not because I am a die hard coffee lover, but because I believe in meeting people and then writing. I normally don’t put pen to paper or key in about any issue unless I had a face to face interaction with stakeholders. Not for me the customary route of rephrasing or printing “Press

LOGISTICS TIMES September 2010

Releases” sent by PR agencies verbatim. At LOGISTICS TIMES, we shun Press Releases. Though a “snippet” about Sunil’s elevation has landed up in my inbox, I waited for an early opportunity to touch base with him. The wait was not too long. It came pretty quickly and I grabbed the opportunity with both hands. Mahipalpur, nestled on the National Highway 8 linking Delhi with Jaipur, is the logistics hub of Indian capital. The freshly minted ACCD

President, also managing director of Rahat Logistics, operates form this hub – just behind Radisson. Navigating through the narrow lanes was no challenge owing to the excitement over meeting a new personality. Indeed, Sunil was the most gracious host. Even before the hot cuppa would land up on our table in his spacious cabin, we were deep into conversation. He was bubbly, enthusiastic and goal-oriented. The 1958 March born Rahat Logistics bossman from

Ajmer, Rajasthan is keen to enlarge the membership. A decade ago, ACCD boasted of around 250 members and today it got shaved off by 50. “During my Presidentship, I am confident of bringing in more members,” he informs between sips of steaming coffee – and tea for him. “We are a social club,” Sunil clarifies. Not an industry body that lobbies hard with stakeholders to get its business going. That onerous task is left to the Association of Cargo Agents of India (ACAI). “ACCD arranges three lunches, one family picnic and one annual ball every year,” says he matter of factly. The idea is to build up a camaraderie. So, why big names such as British Airways, Emirates, Lufthansa, Cathay Pacific, Royal Jordanian Airlines etc. are not members? Is it because of the “social club” tag in the sense that ACCD membership is unlikely to fetch them any “business rewards”? Maybe. Many airlines have cited financial worries in the light of the recent global financial crisis as the reason for them staying away. Rs.7,000 per annum membership fee is “peanuts” for all of them.

What Air France KLM Cargo

is upto in India, Rene Peerboom Some of them were past members and did not renew at the height of recent financial tsunami. But that is beside the point. Sunil, a first generation entrepreneur (his father was a govt official in Rajasthan), is on a mission: to get cracking and enrol new members and bring back to the fold those who have gone out into wilderness. Sunil, fresh out of college with a degree in Commerce, set up Rahat Logistics and has not looked back since 1980s. He has been a member of ACCD since 1995. He is unabashedly happy that he reached the top position at the “social club” unopposed. If his memory serves right, the club was witness to a hard fought election in 2006. Otherwise, the Presidentship is conferred on a “consensus” basis, on the basis of past performance of the individual in promoting the club activities. Any path-breaking steps he has initiated after occupying the hot seat? He has set up a disciplinary committee to handle some critical issues, but he does not offer details. I don’t prod much. After all, ACCD is like a family

and every family has its own quota of differences. He plans to have his own website for ACCD soon. Good luck. But why not so far? “We are not rich,” pat comes the reply. The time is moving fast and the second round coffee with cookies have already been ordered to keep the conversation going. Even without the additional “fuel”, our dialogue would have continued because Sunil is an interesting personality. Self made. Perhaps a great practitioner of Dale Carnegie’s “How to win friends” and retain them as well. Anybody who occupies a hot seat like that of the Presidentship of ACCD has to carry along the entire group. It is not his ﬁefdom where his diktat runs at large. I quietly veer the conversation towards his own business. Rahat Logistics runs a successful cargo business – mainly exporting snow peas and baby corns to Europe, US and Japan. Rahat Logistics’ performance is astonishing. Consider: it is number one cargo agent with Air India northern region for the past four years; among the top 10 with Japan Airlines for eight years consecutively; so is the case with Singapore

Airlines for nine years back to back. Well, the list is endless. ny backward or forward integration plans for Rahat Logistics? Nope. Sunil is quiet comfortable with what freight forwarding business. Of course, he helps clients with customs clearance, inspection etc. How is the business now? Well, the world is recovering fast. Markets are looking up. Cargo tonnage is moving northwards. “We hope to do better this year,” he affirms. Before biting the last piece of cookie, I ask him does ACCD have plans to have its own premises? Well, it is a cherished dream. Delhi, you know, the land prices … explains Sunil. Their annual ball fetches them some profit – Rs.6 lakhs last year. That is nothing to write a cheque to have your own premises in the Indian capital. With a prayer in my heart, I wish the Ajmer-born first generation businessman “all the best” before stepping out of Rahat Logistics, the temporary abode of ACCD during his presidentship. –Ramesh Kumar

holds forth

Go to Page 34

Logistics Times LOGISTICS TIMES August 2010

All about Transportation, Distribution & Infrastructure

PERSPECTIVE

Collaborative logistics, the future

Prem K Verma CEO TML Distribution

LOGISTICS TIMES September 2010

The demand pressures of future and companies’ commitment to improve quality of services would probably usher in a new avenue of supply chain and logistics operations in the future. Its something we call collaborative logistics wherein even rivals in the same line of business join hands and create a common supply chain platform. This is a process which is increasingly getting into a robust shape in developed markets. And sooner rather than later, it will be adopted in India as well. Recently, six auto manufacturers in the country took to this route on a pilot basis. We collaborated with ten transporters and six OEMCs co-ordinated with each other and the result was encouraging for everyone. Tell me tomorrow if you do a pilot and you realize that you are able to save 20 percent on cost and better deliveries to customers, then will it not result in such an alliance taking a formidable shape in the future? Drawing a parallel to this automobile pilot project, think for a moment that all FMCGs have a common warehouse, goods come from various companies to that common warehouse and from there they get transported together. So instead of waiting for the full truck load being sent to the next stage by one company, you have a full truck load going after every half an hour. It is not a rocket science and it is beneﬁcial for all participants. Coming back to the supply chain complexities in the automobile sector, one of the big concerns today is: a dealer has to order full truck load or he can’t dispatch. If a carrier has the capacity of ten vehicles and the dealer has ordered for ﬁve, what should he do? Hold on to those vehicles for some days. It is simply impractical and unfair with the customers. Now imagine a scenario (which is very common abroad), there is a common warehouse which is being shared by four companies and there is

a trailer which is leaving location A for location B. If it picks two-three cars each of the participating companies, it means a trailer every day can be sent from that unit every day. Such a mechanism would become imperative in not so distant future as now companies are looking to get into the rural and tier-II and tier-III markets by appointing dealers. But the demand generated by them would not be nto the multiple of tens or truckloads. The collaborative route would be very effective to cater to the requirements of such markets. Our pilot results have been an eye opener in many respects and the modalities were very simple. Nobody is going to hold the trailer beyond the prescribed time limit. It means when it comes to my warehouse or plant for loading, instructions were there that this trailer must leave in four hours. Usually in India, the trailers are off the road for nearly 35 percent of the time during the course of a month. It means either it is waiting for unloading of the vehicles or it is waiting for load to be given to it. Now, under-utilisation of the asset by 35 percent is a huge cost. Its not only the cost to the transporter but rather it adds to the cost burden for the entire system. Imagine if we are able to eliminate this cost, even half. It would be a huge gain for everyone which is quite possible if we collaborate. This collaborative mode, as I mentioned, is very popular in matured economies. In developed markets, the stockyards are not exclusive entities. There is an LSP which takes care of three-four brands and it manages everything. I ﬁrmly believe that in India too collaborative logistics is the future. You simply don’t have much choice as volume game intensiﬁes. Cost and customers would drive you and you can ignore these two Cs. Quite naturally, this model can be adopted in other sectors as well. (As told to Ritwik Sinha)

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LOGISTICS TIMES July 2010

REVERSE LOGISTICS

Prof. Samir K Srivastava takes a close look at the new trend: collection of product recalls as well as collection and recycling of post-consumer goods is gaining interest in business and societies worldwide. Many organizations are discovering that improving their reverse logistics processes can be a value-adding proposition.

`800 bn

booty Growing green concerns and advancement of green supply chain management concepts and practices make effective and efficient reverse logistics all the more relevant. Today, it is viewed as an area that offers great potential to reduce costs, increase revenues, and generate additional profitability for firms and their supply chains. They can save money if they manage their returns better. Reverse logistics is the process of moving a product from the consumer - the typical final destination - to the manufacturer, the point of origin, for re-use or disposal. So, the concept involves taking a longterm view of products from “cradle to grave” including possible “resurrection”. Possible cost reductions, more rigid environmental legislations and increasing environmental concerns of consumers have led to increasing attention to reverse logistics in present times. LOGISTICS TIMES September 2010

Research shows that reverse logistics may be a worthwhile proposition even in the contexts where regulatory and consumer pressures are insigniﬁcant. It shall become vital as service management activities and take-back for products such as automobiles, refrigerators and other white goods, cellular handsets, lead-acid batteries, televisions, computer peripherals, personal computers, laptops, etc. increase in future. These, in turn, depend on advancements in Information and Communication Technologies (ICT) and their utility in supporting data collection, transmission and processing. A well-managed reverse logistics system can not only provide important cost savings in procurement, recovery, disposal, inventory holding and transportation, but also help in customer retention which is very important for organizational competitiveness. Since reverse logistics

operations and the supply chains they support are signiﬁcantly more complex than traditional manufacturing supply chains, an organization that succeeds in meeting the challenges will possess a formidable advantage that cannot be easily duplicated by its competitors.

Growing interest The growing interest in reverse logistics has many reasons. One of the most prominent one is the growing concern for the environment. Consumer demand for clean manufacturing and recycling is increasing, many times leading to legislation as well. Consumers expect to trade in an old product when they buy a new one. Consequently, retailers expect Original Equipment Manufacturers (OEMs) to set up a proper reverse logistics system. Cost is another reason. Recovery of

products for remanufacturing, repair, reconfiguration, and recycling can create profitable business opportunities. Reverse logistics is increasingly becoming an area of organizational competitive advantage, making its pursuit a strategic decision. It also influences customer service/ satisfaction. For example, the ability to quickly and efficiently handle the return of product for necessary repair can be critical. Similarly, the value of returned products may decrease more rapidly than their new counterparts, so the decisions and their implementations need to be quick and effective. Firms in sectors like consumer durables, automobiles, print, pharmaceuticals, electronics and telecom, firms offering leasing and logistics services and the firms venturing into green products market specially need to focus on reverse logistics. By determining the factors that most influence a firm’s reverse logistics undertakings, it can concentrate its limited resources in those areas; rest may be outsourced. However, third party logistics collection costs act as direct costs to supply chain and may not always be the best choice.

exchange offers to tap customers who already own such products mainly from marketing perspective. This has led to increased focus on various R’s (reduce, reuse, resell, repair, recycle, refurbish, remanufacture and reverse logistics). Presently, these returned products are either resold directly in the seconds’ market or after repair and refurbishment by ﬁrm franchisee/ local remanufacturers. They are not remanufactured or upgraded by OEM’s. The leading car manufacturer and market leader in India, Maruti Suzuki India Limited was the ﬁrst mover with its True Value initiative. It has so far established 340 outlets in 197 cities and is continuously growing. Vishal Retail adopted reverse logistics for movement

include RT Outsourcing, Aforeserve. com Ltd. and Yantra Solutions Pvt. Ltd. These companies reduce the time and cost involved in the backward chain. Meanwhile, companies such as Wipro and Future Group have their own in house reverse logistics operations. Allcargo Global Logistics Ltd (AGLL), the second largest non- vessel operating common carrier (NVOCC) in the world, is planning to offer customised logistics solutions to the automobile sector, including transportation and distribution of vehicles, spare parts management, inventory management and reverse logistics. Recently, two large venture capital (VC) ﬁrms from Silicon Valley and one Indian fund have invested in Reverse Logistics

of goods resulting in savings of INR 6 millions per month. In the United States, the market for such products is estimated to have a value of over $60 billion. In India, the industry is at a nascent stage but the business potential is considered to be huge. The reverse logistics market in India is valued around INR 800 billion currently and is expected to grow rapidly in the future. Aftermarket returns that form part of the reverse logistics industry are estimated at $10-15 billion. Average spending on reverse logistics is about 1015% for garment ﬁrms and about 20% for furniture companies. The Indian market has relatively few specialists in reverse logistics and these

Co (RLC), a supply-chain solutions provider start-up that is trying to create a business potential out of repairing `seconds’ or rejects and reselling them. The `GreenDust’ brand of RLC will be India’s ﬁrst ever-organised retail brand for seconds. RLC has raised venture capital from Kleiner Perkins, Cauﬁeld & Byers, Sherpalo Ventures and Reliance Venture Asset Management, an Anil Dhirubhai Ambani Group (ADAG) company. RLC is entering into agreements with retail and consumer companies to take the rejects or seconds, repair, refurbish and resell them at discounted rates. Future Logistics, the logistics and supply chain subsidiary of the Future Group proposes

India scenario Reverse logistics did not receive the desired attention in India earlier and was generally carried out by the unorganised sector for recyclable materials such as paper and aluminium. The reverse logistics industry was almost nonexistent. Since the beginning of the present decade, reverse logistics is gradually getting recognised as an integral part of the business supply chain in the Indian market and senior management has started to realise the need as well as complexity involved in setting up an efﬁcient supply and return network in both products and services. For example, in the equipment leasing business, the process involves management and sale of surplus and the returned devices and equipment whose quality, quantity and timing is quite difﬁcult to predict and control. Many companies in consumer durables’ and automobile sectors have introduced

LOGISTICS TIMES September 2010

REVERSE LOGISTICS

to expand its warehousing, transportation, international logistics, cold chain management, brand distribution, and reverse logistics activities. It was facing difficulties in managing seconds and has already become a customer for RLC. Reverse logistics is capable of becoming a major route to cost optimisation with the growth of the Indian economy. Developing reverse logistics means that it will be more beneficial for manufacturing companies to implement refurbishing and remanufacturing operations for economic reasons alone besides meeting the consumer pressures and regulatory norms. Once such reverse logistics networks are set up, the producers will have wider choices to offer and the buyers will have wider choices to choose from. The Government of India is also likely to boost the reverse logistics industry particularly in areas like e-waste. As already mentioned, ICT has a significant role to play in all this. Firms like Infosys Technologies have identified business drivers of returns management in Hi-Tech industry in order to provide client solutions for turning returns management into a competitive advantage. India’s top few pharmaceutical companies have opted to install the radio frequency identification (RFID) tags during drug manufacturing. RFID prevents production of spurious and counterfeit drugs as it enables manufacturers to trace and track the drugs in the supply chain. This will ensure better management of reverse logistics, specially in product recalls.

Challenges The greatest challenge faced by all stakeholders in the Indian supply chain (forward or reverse) is geographical constraints. There are signiﬁcant infrastructural issues with anything past a C or D tier city; communication, transportation reach, power supply and connectivity are intermittent at best. Electrical consumer goods tend to face particularly high return rates due to the ﬂuctuating power supply across India, which surges as much as it intermittently cuts out. This requires considerable LOGISTICS TIMES September 2010

attention on material re-utilisation and repair strategies. Further, there has been no reported instance of using Operations Research (OR) techniques for designing an effective and efficient reverse logistics although same have begun to be applied in developed nations now. Indian firms need to wake up to this as it offers innumerable challenges and opportunities. The dimensions used to characterize the reverse logistics environments are returns volume, returns timing, returns quality (grade), product complexity, testing and evaluation complexity, and remanufacturing complexity. So, the pattern of quantity, quality and time of arrival of returns is of paramount importance. An important consideration in extracting value from returns is to actively manage their quantity and timing. It is in estimation and control of quantity and timing of returns that firms and other stakeholders face the greatest challenge. Another challenge is related to integrating product design and product take-back. Industry should work to increase product recyclability, develop life-cycle-analysis capabilities and improve communication among its segments. Efforts should be

undertaken to strengthen and expand industry coalitions and link with logistics service providers. The existing infrastructure needs expansion, policy makers and citizens need education and there is a need to extend producer responsibility. We need to replace manufacturing focussed on use of virgin materials by a new holistic approach that unleashes synergy between economic development and the environment. Finally, the newly emergent field of reverse logistics opens a number of avenues for experimentations and analysis for firms. They may consider under which circumstances should returns be handled, stored, transported, processed jointly with forward flows (integrated logistics) and when should they be treated separately. They may compare cost of remanufacturing with cost of production from virgin materials to decide on proper input mix. Similarly, there is much scope to explore the potential attractiveness of various control and postponement strategies in designing their reverse flows. Another interesting area is to design changes in a firm’s reverse logistics strategy for a particular product over the course of the product’s entire life-cycle.

The rural challenge Infrastructural inadequacy is clearly one of the key reasons for the lack of vibrant supply chain management systems in the businesses in the country. When I say infrastructural inadequacy, I am more concerned about the road infrastructure when it comes to the secondary deliveries that we do from warehouses to the sites. Take the case of telecom. Growth in telecom is now going to happen mostly in the rural areas and this would prove to be a big challenge. We have more than 90 percent telecom penetration in country’s metro and their satellite towns and also leading centers. As against this, rural penetration is as low as 14 percent today. On an overall basis, the teledensity in India is more than 50 percent. So there is a big gap. We have covered 600 million subscribers (mobile) out of the population of 1.2 billion. Now the scenario is: we have to cover 300 odd millions in the years ahead. And 50 percent of these prospective customers live in the rural area. So there comes the challenge. There are no or bad roads connecting to the rural pockets. So the delivery of the equipment to the site is an issue. Other issue which we foresee is ﬁnding competent people willing to go down to the rural area and operate from there. How would it be possible to send competent people to say a place like Bastar in Chattisgarh? On infrastructure front, we are noticing some improvement in seaport, airport, etc. Government has the focus and they will improve. They have also embarked on a major project – Mumbai-Delhi freight corridor. Once it comes into operations, it will smoothen the hiccups we have today. Right now, it takes 15 days for my container to come from Mumbai to Delhi. In real terms, it takes 30 days to sail from Sweden to Mumbai and another 15 days here which shows the high level of inefﬁciency in our system. And road infrastructure in the rural area has now

become the most critical issue in terms of growth in the telecom business. Telecom players are engaging with companies like Nokia, Ericsson and Siemens to develop new ways of rolling out a low cost network in the rural areas. To give you an example, there is a site in Bangalore which hypothetically speaking has been set up at a cost of Rs 12 lakh. This site can be used for 100,000 subscribers because they have a fertile captive area. But you can’t set up a site at the similar cost because you won’t find that many subscribers. In a village, there would be hardly 50 percent of the people who can afford a mobile. So now there is a strong need from operators to find ways and means to reduce their cost per subscriber of the infrastructure. They are finding ways of doing this through technological applications. From the supply chain standpoint, same challenge would be thrown to supply chain solution companies or LSPs. You have to find ways and means to reduce this cost. To ensure the telecom roll out in rural areas with cost effective models, I think operators would join hands. For instance, they are going to have shared sites. They can’t afford to have standalone site and then cater only to 10,000 subscribers. That will be a disaster for them. One site would be created and three-four operators would jointly operate from there. All of them will have sign up – one will have Ericsson, another one could have Motorola and the third operator may have some other company. Now these companies in turn would set their own warehouses and cater to this particular site. In telecom infrastructure, managing the site is a bigger activity than setting up. And this would be a continuous process. Similarly, there could be a centralized distribution center – not in one village but probably covering a cluster of villages which can be delivered overnight. This process has already started happening selectively.

Tej Nirmal Singh Director & Head (Supply) Ericsson India

LOGISTICS TIMES September 2010

TELECOM

VEHICLE DESIGN

Wanted: Regulation The government has been responsible for the state of apathy for the car transport industry because of a lack of regulation and standards for these vehicles, expresses Shivam Arren, CEO, Kailash Rolfo India

ncreasingly India is being recognized as a car manufacturing hub. During the past decade or so, large multi-national OEMs have setup their manufacturing base in various parts of India. The decision to come to India was not only because of cost efďŹ ciencies and availability of skilled man-power to manufacture and export cars but also because as India opened up and started embracing globalization, it opened up its vast and fastest growing market for these and other companies around the world. In addition, with focus on infrastructure spending, India is fast coming up with a Road network which could be the envy of the world. These superior roads and booming economy encourage the burgeoning middle-class to buy cars. And these very factors are also changing the face of vehicle transport industry in India.

Current Trend Traditionally and to a large extent even now, we have been transporting brand new cars in ugly looking, non standard and highly inefďŹ cient trailers driven by prime-movers crying for help. Not only is there a potential safety hazard for the brand new cars inside the trailer, but also for other vehicles travelling on the same roads. Partly, the government has been responsible for this state of apathy for the car transport industry because of a lack of regulation and standards for these vehicles. But mostly, no car carrier manufacturer in the industry has been LOGISTICS TIMES September 2010

successful in standardizing features and design of the product. From variations in body dimensions, body weight to safety features inside the trailer, the situation has

become worse over the years. The result is that most car carrier trailers have to be scrapped after 4-5 years of continuous usage.

Regulation From the government’s end, now it is very clear that a regulation for car carrier trailers will be soon in place. This will freeze the basic dimensions of the trailer. In the absence of any regulation, road side manufacturers were supplying carcarrier semi-trailers with lengths of 22 meters or more. Such vehicles are dangerous on roads because of limited driver visibility and difﬁculty in manoeuvring them. In Europe and elsewhere, car-carrier semitrailers have lengths of about 18 meters. The Indian regulation, when it will come as a rule, will restrict the length to 18.75 meters. Then it will be up to the manufacturer’s capabilities to make a

light vehicle and a design which can load more cars within the stipulated length constraint. In addition safety features and overall look of the trailer will also be largely in the hands of the professional and experienced designers.

Features From an OEMs view, the most important point while designing a car carrier trailer is consideration of various car combinations which a trailer will carry. Unlike Europe where OEMs have a hub and spoke model of car distribution, in India, generally a full load of car trailer goes to a particular dealer or to a couple of dealers located close-by. The demand of the dealer is a combination of various models which a company produces. Thus a single car load is a rarity as of now. A car transporter would like to transport as many cars as possible in a single trip because the money he makes is dependent on cost per car per km. Most transporters are unable to do more than two trips in a month. Thus it becomes imperative to have a ﬂexible yet affordable design which will increase the return on investment (ROI) for them. Hydraulic ramps can be used to pack in more cars but they increase the cost of the product as well. So it’s the job of a good designer to balance both. In addition features like sliding roof and side loading/unloading can be considered to increase utilization of space inside the trailer. Truck and bus transport in India, traditionally has been by driving the chassis on its own power to the dealer. But now OEM’s realize that transporting 3-4 chassis on trailers is a more economical way of distribution. The customer is also much happier with an absolutely new chassis in his hands and not a 1000 kilometre driven one. The commercial launch of high end trucks will surely spur this market into action. With the regulation sure to come in and industry moving towards organized players, it is only a matter of time that the face of vehicle logistics will change in India.

Watch out! Lars Sorensen Damco India

Kate Vitasek SCM Specialist

Pradeep Tewari Credence Logistics

Domain experts dissect what

Service Level Agreement

(SLA) is all about in the October issue of

Logistics Times All about Transportation, Distribution & Infrastructure

LOGISTICS TIMES September 2010

COVER STORY

DHL Vision 2015:

“United We LOGISTICS TIMES September 2010

With economy firing on all cylinders, the four divisions of DHL operating in India have decided to join hands more tightly. The objective is to consolidate position in their respective spheres and at the same time take brand DHL to the next level. Mutual leveraging of physical assets, cross promotion in sales and marketing, better co-ordination in managing manpower, etc. would define this collective desire to send message more strongly to their customers that DHL is the best integrated ‘one stop shop’ for all their logistics requirements in the country. Ritwik Sinha examines the unfolding scenario...

Win”

t’s like that typical Indian bedtime story which we have heard so often. A dying father calls his four sons who are at loggerheads with each other and asks them to break a bunch of wooden sticks. They fail to do so. But when the bunch is unbundled and they are asked to break all sticks one by one, they manage to do it without any discomfort. The moral clearly stands out - “United we stand.” The Indian arm of Euro 47 billion global logistics behemoth DHL seems to have learnt the lesson too well. Don’t get foxed by this analogy. This is not to say that the four distinctive units which represent DHL’s universe in India today – Global Forwarding, Express, Supply Chain and Blue Dart – have been squabbling factions in the past and that the enlightment to stand together has recently descended upon them, passed on somewhere from the top. The parallel lies in emulating the essence of the story wherein rather than four units being forced to see the pragmatism of staying as a close knitted family, the realization has come from within. Simply put, it’s a case of self-discovery and collective reinvention. And now there are conscious initiatives to ensure that the terms ‘alignment’ and ‘leveraging’ ﬁnd full-blown manifestation in their operations. In the process, the four units aim to attain their grand vision for 2015 which for some entail growing in multiples rather than percentage and for the well-established ones, it can be underlined as the strong desire to stay ahead of the industry growth curve. The bigger picture, of course, is to move up the ladder in the LOGISTICS TIMES September 2010

COVER STORY

segment leadership term. For once, the bunch comprising four DHL units would tend to give a slight tweak to the moral of that bedtime story - from ‘united we stand’ to ‘united we win.’ In fact, key company officials in India have already begun talking about implementing “One DHL” concept, the buzzword which is defining DHL’s marketing and promotional campaigns in many countries in the world in the post-recession era. To put it more specifically in the Indian context, the four units are showing the determination to not only deliver excellence to their customers in terms of services but also being their “first choice” by assisting each other out whichever way it is possible. The manifestation of alignment strategy is rooted in a mechanism which we can compare with the fulcrum units run by coalition governments where all constituents find presence. It’s called India Steering Committee (ISC) which has heads of four units and presided over by Malcolm Monteiro, CEO (South Asia), DHL Express. And then there are similar bodies at the regional level which keep on feeding to the ISC on a regular basis. Clearly the ISC is the central point which is managing the grand drive of four units and trying to create the right kind of operational equilibrium to lift DHL’s flag a bit more high on the Indian logistics turf. And the body seems to have produced desired result. “Our ISC is now being cited as an example of excellence by the top brass of the group among other group units in different countries,” Monterio remarks. “ Our close collaborative effort is now perceived as a light house model for the group,” Oscar de Bok, Senior Vice-President (South Asia & Indo-China), DHL Supply Chain endorses the significance of ISC with that unmistaken feeling of satisfaction. The institutionalized collaborative framework seems to have its genesis in that big picture which business units are pursuing both for themselves as well as brand DHL in India. The main trigger, of course, is the realization that Indian economy would consistently strengthen its position in the future of being the toast of the world thanks to its rapid fire growth LOGISTICS TIMES September 2010

trajectory. And hence, the chances to dig gold are going to be brightest ever. But with great opportunity would also come great challenges. Talk to any business unit head of DHL and he would vouchsafe that the key challenge is not just that of adding scale. Rather the major point of attention is: in logistical sense, businesses would not be undertaken the way they have been executed all these years in the country. This also includes geographical expansion wherein new business centers would emerge. So the challenge would be to align with the paradigm shift in operations of the end user companies. And then there would be issues pertaining to infrastructural facilities enhancement (at different units’ own end) and consistently upgrading the skill set levels of its multiplying workforce. In a market place, where the environment is getting increasingly competitive, there would always be the pressure to churn out better products and improved services standards. And herein lies the pragmatism of collectively utilizing company resources to the optimal level and staying united to consolidate. But ﬁrst let’s get a sense of what each of the business units would be pursuing over next ﬁve years as part of their 2015 vision plan.

Global Forwarding: Covering all elements of pyramid Established in 1996, this business units’ report card reads: over 122,000 tonnes of air shipments and nearly 70,000 TEU ocean freight handled in 2009. The unit claims to have more than 15,000 customers and presence in 32 locations (ofﬁces/warehouses) with more than 1,050 employees on its roll. According to Christoph Remund, CEO, DHL Global Forwarding , the company is already a leader in Airfreight with a signiﬁcant market share of 13 percent in this segment and ranks as the number two ocean freight forwarder in the country with leadership position being just a ear shot away. May be it would happen by 2011 end. But leadership position is not what Remund and his team are particularly concerned about. The concern or rather focus is more on the front of better

targeted penetration of all segments of Indian business. With DHL having presence in 220 countries and India’s trade link becoming robust with relatively newer markets, the concentration is on to be number one facilitator in providing seamless logistical two-way trade to/from anywhere and everywhere in the world. Going by DHL’s brand positioning, the popular perception is: it is much stronger among MNC and top rung domestic manufacturers and traders. A point which Remund is quick to negate. If its customers proﬁle is looked as a pyramid structure, then the unit is laying equal emphasis on all the elements and scale of the pyramid. “ We serve MNCs and top rung Indian manufacturers, SMEs and we are targeting another set of companies called “Upcoming Heroes” – Indian ﬁrms which would be fanning out globally in the future,” he says. For many, it would be quite surprising to know that nearly half of DHL Global forwarding’s top line comes from SMEs. And the case is no different in India. “ I would say, in India also 40 to 50 percent of our revenue comes from SMEs,” Remund emphasizes. And the business unit is envisaging huge opportunity from SMEs and the Upcoming Heroes segments. To serve them with cut-above-the-rest services standard, the unit has formed teams of specialists who understand the nature of their business and is even putting in place India specialists teams at locations which are tipped to become major trading partners of India in the years ahead. “ We have experts on Indian markets positioned in key countries in the world with which India might be having a formidable trade base. We have people in France, Spain, UK, Germany, USA , South Africa and we are going to place Indian specialists in African countries like Tanzania and Kenya in the near future,” Remund points out. In operational parlance, it is called their tradelane initiative. According to Remund, the unit has developed major strengths in businesses like automotive, technology and retail and going ahead, two areas where it intends to make major penetration are – oil & gas and pharma. The big picture as Remund

“Customers are looking for FTWZ units” Christoph Remund, CEO, DHL Supply Chain and Global Forwarding explains why the company is betting big on FTWZ and group’s view of the Indian market.

I would like to get a sense from you, in strategic terms how important is India to the group as a whole? Within Asia, DP DHL’s focus is not only on China but also on India in a major way. The group had in fact recognized very early that India is an important market and, therefore, we have made substantial investments amounting to over $315 million in last six-seven years which include the acquisition of Blue Dart. But even in forwarding and supply chain, we entered into a partnership with Lemuir which culminated in our first joint venture in 2003 and which was further consolidated in 2007. These associations have basically given us the size which is required to provide the full spectrum of logistics services in the Indian market. We are today number one in air freight with a market share of about 13 percent which is even a bit higher on the outbound. We are also very, strongly positioned in the ocean freight where

we are number two in the list of top service providers in terms of volumes brought into the country and taken out of India. Additionally, we are the country’s leading Customs House Agent based on the number of entries filed and import duty collected. So it’s a good starting point. Going forward, the focus would be even more on India. We have seen a strong recovery from the 2008-09 global crisis which had less of an impact on India. You seem to be betting big on Free Trade Warehousing Zone (FTWZ). What makes you confident that these units would work? In my view, this has tremendous potential. We have already announced an investment in Chennai which is presently under construction. We are also looking at opportunities in the west coast near Mumbai and also in Delhi or Jaipur in north India. FTWZ is something which our customers have been looking for and which will add a lot of value to their business whether they are selling their goods in India or sourcing them in the country and then sending them out. Or even for the matter that if they are sourcing from other countries for the secondary or final processing. In Chennai, we are developing the facility over an area of 150,000 square feet - close as well as open warehousing, addressing a number of

industries like life sciences , technology, oil & gas ( that is why we have an open yard). This should be ready by the end of the year. The next one will be in Mumbai where we are examining the possibility of developing it in 2011 and the third one, around the Delhi area, which would probably get ready in 2012. These units would be absolutely scalable depending upon the future demand scenario. Can you truly call yourself a logistics company with pan-Indian footprint now? If you include Blue Dart, then we definitely have the largest footprint in the country with over 25,000 locations and more than 4Mn sq ft of warehouse space. Consequently we are truly capable of serving the customers’ need to distribute products across India or collect products across India and export them. In that sense, you can say DHL is a pan-Indian company today. How would you explain your vision for 2015 in terms of positioning in India? Our plan for DHL as a whole and our DHL Global Forwarding unit is to have a substantial growth over and above the present base in the next five years. India within the network would become one of the top countries in terms of services we provide and volume of cargo we move around. It is already in the top ten markets list and it will go further up on the ladder as the growth opportunities unfold. LOGISTICS TIMES September 2010

COVER STORY

indicates obviously entails expanding infrastructural facilities and here the unit is betting big on the new concept of Free Trade Warehousing Zones (FTWZ). It has already announced an investment of $10 million in an FTWZ unit coming up near Chennai and two more are in the pipeline in the next two years. “ Our Chennai unit would have a space of 150,000 square feet and it is likely to get ready by the year end. Next in line is a similar unit near Mumbai Port which would be spread across 200,000 square feet. Another one we are looking at is close to Delhi, it would probably be near Jhajhar,” Amit Dawar, Director (Customs Brokerage & Compliance), DHL Global Forwarding elaborates adding that the investments in the Mumbai unit would be much higher. These units would not just be meant for storage but would offer a host of valueadded services like packaging, labeling, and knitting and would be laced with solutions for sector specific demands. For instance, in the upcoming FTWZ unit coming up in Chennai, there is a dedicated 7,000 square feet of temperature controlled zone for life science business. Similarly, an open yard space has been created to serve customers from the oil & gas sector. “FTWZs are new to India but the concept has been prevalent globally. I don’t see why it would not work in India,” Dawar emphasizes. “ FTWZs would definitely play a pivotal role in our operations in the future since they would help us in raising the bar on the services front,” Remund adds. However, on the ocean freight segment, even as the company is determined to become the largest operator by the next year end, the unit has identified gaps which it would be targeting to plug. “Presently, volume is lopsided in favour of Nhava Sheva which is our largest gateway as 60 percent of the country’s ocean freight volume passes through this port. This is followed by Chennai. However, we do have our presence at all ports and ICDs and are aiming to further strengthen this” says Sanjay Tejwani, Director Oceanfreight – India, DHL Global Forwarding. “We have been consistently launching new direct LCL LOGISTICS TIMES September 2010

services to various destinations based on customer needs”, he adds.

DHL Express: Desire to carry on dominant numero uno positioning “The times are fast changing and we are contantly moving towards innovative and customized solutions that will change the way we do business in India” says R S Subramanian, Country Manager- India, DHL Express. And this subtly indicates the line of strategy the unit is adopting to meet the challenges in the near to medium run. For the records, express unit was the ﬁrst entrant in the country among DHL group companies (in 1979) and today it is perceived to be the market leader in international express division. The unit covers over 22,000 locations spanned across nearly 550 cities and in 2009, it had handled over seven million tonnes of shipment. In Subramanian’s words, the key desire of the unit is not only to continue holding its numero uno positioning in the international express division in the coming years but rather stay there with a sense of dominance. The pursuit of the objective obviously entails being

a consistent provider of cutting-edge express solutions. The customers are becoming more demanding due to their increasing global exposure, but Subramanian clearly is not worried on this front. “Most of the basic and advanced processes for express operations have been introduced by us in this country in past three decades. We are well poised to capitalize on our experience to meet future challenges,” he says. So what is that key challenge the unit is envisaging in next four-five years? “Today if you have a sizeable presence in top 50 cities, then you are considered strong. But tomorrow if you do not have a sizeable presence in 500 cities, then you won’t be strong,” pat comes the reply. So the need of rapid fire expansion both in the geographical sense as well as in terms of product profile would certainly be the key strategy of the unit. Much on the expected lines, the unit presently has BFSI, engineering and manufacturing, IT, fashion and aviation businesses as the stronghold sectors. Temperature Controlled Services are on its radar as the emerging star. SMEs again are a major contributor to DHL Express kitty. “We are ready to meet with any challenge because

“Efficient network in 500 cities would be vital” Am I correct in my assessment that your DHL Express unit enjoys a pivotal position of the group’s operations in the country? Let me put it this way. There are four business units in India of differing sizes. But if you look at DHL Express, Blue Dart Express, DSC & DGF, in terms of size, we are more or less similar. In terms of stature, if you look at volumes that each handles or the market presence in each segment, all

track and trace, improved products, etc. We have specifically made large investments in facilities - building a network, having your own fleet, process improvements etc. There has been no compromise on systems and processes and quality standards. What we offer in India can

R S Subramanian, Country Manager (India) – DHL Express emphasizes that with possible emergence of new business centers in the country, the dynamics of express business would change drastically. of us can claim to be market leaders. It so happen that the Express industry is a bit less heterogeneous today. So in that sense, Blue Dart and DHL Express have a larger play and market share to show. Yes, we do have a commanding presence. The Express brand has an easier recall and is more marketing led – more B2C. In that sense, we get to be the most visible face within the logistics arena. What are those critical milestones you would be targeting in next four-five years now that you have a big base? When you have big base, you can have grander designs (laughs). Let me share a few basic principals …We came over 30 years back. Almost every single feature which an express or logistics player would take for granted today, possibly was brought by DHL in the country. Customer service, call center 24x7,

be compared with any other country. Those are things which have paid rich dividends. Otherwise, we won’t be the market leader. Our market share is as big as that of the next three-four big players put together. When you occupy such a formidable position, what next? The single point which drives us and all our plans is to simply - stay ahead of the market. So if the market is growing x, our focus is to grow x plus. The last five-six years, we have consistently added our market share on an annual basis. The intent remains to pursue the market aggressively, enhance our market share and continue to hold on to our dominant number one position. At a more micro-level, what are the key challenges you anticipate? Going ahead in the next three to ten years, there would be a few critical changes. Probably five years back being strong in the metros alone would

suffice to be labeled as a strong player. Today, what defines a strong player is a good reach into the Tier II & III cities of India which are growing at a phenomenal pace. Going forward, this same scale will change to a necessary presence in over 500 cities for network efficiency. Reach will be a decisive factor in the years to come. We have to be prepared for such changes that are inevitable. Our network needs to continuously expand. With the shrinking of geographical proximities, customer requirements are manifold and seeing a fast change. With globalization most of the customers now have operations overseas as against being simple exporters or importers. Expectations have significantly gone up. So while new product inventions are few, you have to continuously raise the quality standards in terms of sharpness and consistency in delivery. LOGISTICS TIMES September 2010

COVER STORY

our sales team pool comprises of people who have come from different business verticals. They know and understand the business and help us in devising solutions which are absolutely customer centric,” says Sandeep Juneja, Director-Sales, DHL Express. Juneja points at offerings like Aircraft on Ground/Next Flight Out which are customized for the aviation industry and prove a huge boost to the aviation industry. This is a one good example of the DHL Express’ customer centric focus. If words of Sarbani Sengupta, DirectorCustomer Service, DHL Express are to be believed then the unit is drawing a lot from its interface technological modalities meant to deal with customers. The unit operates two contact centers or call centers as we may like to call them in Mumbai and Chennai manned by trained staff pool of nearly 250 each. They operate on 24x7 basis which Sengupta points as a major differentiating factor vis-à-vis competition. “To ensure superior service quality, we follow some stringent service standards like attending to calls within two rings. Furthermore, there is LOGISTICS TIMES September 2010

no automated voice recording facility and all calls are answered by a warm and friendly human voice,” she underlines. These contact centers in India follow a ‘Perfect Day, Every Day’ programme meant to ensure consistent and superior customer experience. In the years ahead, however, it would be vital for the unit to create similar kind of buzz in new locations. “Sustaining the DHL brand would be an exercise as the future growth would be coming from smaller towns and new industrial clusters. But I guess, our ﬁrst mover advantage would help us in achieving it,” Chandrashekhar Pitre, Head (Marketing)South Asia points out.

Blue Dart: Eyeing for half a century mark “ Sometimes, I do get disappointed with the pace of change here. But then I guess, I am probably more demanding than what it is required,” said Anil Khanna, Managing Director, Blue Dart with a straight face. Is it an off the cuff remark? I was forced to think so. You walk down to Blue Dart headquarters’, and what

strikes you in the reception area is a wall full of national and international awards and accolades. But then you realize that it is probably this egging drive to excel at all cost which has put Blue Dart in a commanding position in the air express segment. With 7 dedicated freighters (with 62 domestic hubs/warehouses), over 5000 vehicles, 7000+ employees strength and coverage of over 25,000 locations, Blue Dart is perfectly placed in the pole position. In fact, with 40.1 percent market share in the air express segment, it would not be an exaggeration to say that Blue Dart is facing no competition in the domestic freight sky. The acquisition of Blue Dart by DHL (it holds 81.03 percent) in 2005, in fact, has been the masterstroke which has further bolstered brand DHL’s positioning in the domestic logistics space. And the tangible benefits have been immense given the large reach of this homegrown major accumulated during two decades of its journey prior to its acquisition. Alongwith the strength in air express sphere, the unit has also re-launched surface express logistics operations (in 2007 following the demands from customers as Khanna emphasizes) and the target is to build a significant scale in the segment by 2015 while further capturing market share in the sky. “We want our market share in the surface segment to double – from 8.5 to 18 percent – by 2015. And in air freight business, we are eyeing to touch half a century mark. Of course, it would entail expanding our air fleet and we certainly would have double digit number by then. It may even happen before 2015,” Khanna shares his medium term vision in these words. For Blue Dart, chasing the big picture for 2015 would obviously entail new investments in physical infrastructure. For instance, the business unit presently has a network of 52 warehouses in the country but a significant addition has been planned for the next four-five years. And the warehouses to be built in the future are likely to be of bigger sizes. The new storage units would be opened in Bangalore, Panvel, Chennai, Bhopal,

“Our fleet size would soon touch double-digit mark” Enhancing its marketshare in air express business and pushing its surface express division’s share to a modest double-digit trajectory are the key targets for Blue Dart, says Anil Khanna, MD of the company.

How will you sum up your journey so far? It has been a very challenging journey for Blue Dart. But it has been very rewarding, as well. We started off in 1983 with a very small office. The promoters had started it with an investment of Rs 30,000. But they had a vision of creating a world class company in India. So Blue Dart kept on adding new things, a lot of innovations was introduced. And today we command the highest marketshare in air express with 40.1 percent and an 8.5 percent marketshare in ground express. The association with DHL has also immensely helped. DHL is the strongest international brand and has the highest marketshare in India. Blue Dart is the strongest domestic brand with highest market share in air express business. So it’s a marriage of two very powerful brands and a very formidable combination. What have been those critical

milestones in your journey which have taken you to new stratosphere? We primarily pioneered the concept of on board couriers (OBCs). And we were the first to adopt technology which helped the customers in terms of track and trace. We were the first to be ISO certified. Again, we were the first company to bring in freighters - two 737s in 1996. And then, another first up our sleeves was the bringing in of the 757s to the country. Two 757s were introduced in 2006, the third came in 2007 and the fourth was introduced in 2008. We have successfully expanded our fleet. Today, we have 4 B757s and 3 B737s and over 5000+ ground vehicles/transport, unparalleled reach and the best transit times, wide range of products and services, superior technology backed by passionate and dedicated Blue Darters. What are those new milestones you would like to achieve by 2015? Firstly, we have to align with the group’s strategy and thinking. And our pursuit is to consistently increase our market share. Currently our marketshare in air express segment is 40.1 percent which we want to take up to 50 percent by

2015. And we are going to take a lot of measures to attain this level. Apart from business as usual, there would be a lot of focus on SMEs, on new products and certain verticals like life sciences which we see as a potential goldmine for the future. So we have the complete plan charted out as what we need to do to reach to the 50 percent marketshare on air express. And during the stated period, our target is to take our marketshare in ground express from 8.5 to 18 percent by 2015. In the recent past, a lot of players have shown inclination to join the air express bandwagon. But somehow or the other, things have not worked for them. What in your opinion could be the reason? Aircraft are enablers. That’s not the service. Customers primarily look at an end-to-end service. So right from pick up to delivery and information being available to customers on a real time basis, it has to do a lot with how you handle the shipment. As I said, we were into the business, we were growing very fast and we saw the need to bring the aircraft and then we introduced it. It’s not an easy business. Rather it’s a costly and complicated business. So, saying that I will get the aircraft and then explore the avenue is like putting the cart before the horse. When can we expect your fleet size to touch the double-digit mark? Given the buoyancy in economy, it will definitely happen by 2015. Or even before that. LOGISTICS TIMES September 2010

COVER STORY

â&#x20AC;&#x153;Supply Chain business would grow very fast nowâ&#x20AC;? There are many experts and even industry representatives in India who believe that supply chain is in a nascent stage here. What is your take on it? Supply chain in my view in India is in a phase of fast development now. It is going to help the consolidation drive of a lot of companies which obviously would not happen overnight, but take sometime. In my opinion, the requirements in supply chain are going to change drastically. It would not only be in infrastructure â&#x20AC;&#x201C; the types of warehouses, or smaller godowns which you can easily manage with relatively limited number of people, distribution is always local and complexity is not that high - but where as a company you would have five-six big-scale warehouses to cover whole of India. So that means you need to establish more of semi-automated warehouses and specific software to manage transport planning. We are moving towards a scenario here wherein we would have centralized warehouses with local distribution centers where you merge local stocks. So your whole supply chain process becomes lot more complex. Apart from sound IT infrastructure, it would require trained experienced personnel. That is why we are focusing on the training of the staff in a major way. We have centers in India purely to train our staff and we also send top and middle management to visit standard warehouses abroad to bring those experiences back.

What is the kind of profile you have built in these ten plus years? We have 113 warehouses spread across the country in 34 cities. But if I talk about the size of the warehouses and people employed and compare it with a matured market like Japan, obviously their turnout would be much higher than what it is today in India. But year on year, the growth is happening. There are LOGISTICS TIMES September 2010

three important elements: maturity of the market which is growing fast like in infrastructure; IT requirement and education and training of the people; and then the growth of the market itself wherein our customers are growing by 20-30 percent every year. Earlier customers used to ask for a warehouse in a certain area. Now they ask for end to end integrated solutions pan-India. All this signals supply chain market is maturing fast. And I believe, it will grow very fast from here onwards.

Given your prominent global positioning, you must be having a kitty full of advanced According to Oscar de Bok, Senior solutions. And their VP, South Asia & Indo-China, DHL upgradation must be a consistent exercise. Supply Chain, the supply chain Has Indian market business would get a major boost reached to that situation where you as end-user industry in the country can think of bringing would now seek operational some of those most consolidation. advanced supply chain solutions which may have worked as in the not so distant future. for you in other markets? Where would you like to see your division reaching by the end of It is happening in stages now. This situation is also an advantage. We can 2015? utilize knowledge we have used in other countries and bring that to India in steps as the market evolves. Today, having a fully automated warehouse in India does not pay off for the simple reason that the cost would be too high and payback period would be too long compared to the labour cost in India. But I think, fully automated warehouses would be developed to support businesses like retail here as well

We would like to be four times the size that what we are today. That clearly is the vision. We will have a strong position in the domestic transport segment based on integrated solutions between warehouse and transport. We will have large multiuser warehouses in tier-I and in some tierii cities, where we would offer technical services and a lot of other services like assembling, packaging, kitting activities.

LOGISTICS TIMES September 2010

COVER STORY

Indore, Jamshedpur and Ambala. And while the size of these units in metros would be in the range of 150,000 to 200,000 square feet, in non-metro locations they would have the capacity between 35,000-50,000 square feet. Plus, there would be consistent investment in technology to provide better solution to the customers, an area where the unit has unarguably developed considerable edge over its competitors. (According to Yogesh Dhingra, Finance Director & COO, Blue Dart, nearly 40 percent of the unit expenses are accounted by IT related investments). And then there would be increasing need to go ahead with the automation drive of its facilities. But according to Dhingra, the investment requirements are not an issue. “We have been consistently making investments to improve our facilities and services and we would continue to do so. Our financial base is strong and we had a surplus of Rs 80 crore at the end of December 2009,” Dhingra explains. The only public enlisted unit of DHL in India, Blue Dart had reported revenue of Rs 905 crore in 2009. Within DHL India fold, Blue Dart has probably seen the fastest headcount multiplication – from around 3000 in 2005 to over 7000+ now – and keeping the flock intact and motivated is an issue which is dealt deftly as Barttanu Kumar Das, Senior VP (HR) explains. Afterall, being the segment leader in the air express segment for such a long period, company officials admit there have been poaching attempts in the past by new entrants in the business. “Our PEOPLE FIRST philosophy is not merely the buzzword. We ensure the right kind of training environment to newcomers as well as their regular growth under a well-defined institutionalized framework. Unlike many other companies, we did not resort to any lay off during the slowdown period last year. Furthermore, we maintain a very robust middle leadership level,” Das states. In terms of operational strategy keeping in view future growth and expansion possibilities, Blue Dart has divided the country into six distinctive zones – West LOGISTICS TIMES September 2010

I ( Maharastra and Goa), North (Delhi, Haryana, UP, Punjab etc), South I (Tamil Nadu and Andhra Pradesh), South II (Kerala and Karnataka), East ( Bihar, Jharkhand, Orissa, West Bengal and North Eastern states) and the recently included West – II (Gujarat & parts of Rajasthan and Madhya Pradesh). “This kind of geographical demarcation helps in understanding patterns of demand and supply and then devise our strategy to serve them – both in terms of integrated offerings of air and surface express as well from the standpoint of extending DHL’s reach,” Ketan Kulkarni, VP (Marketing, Communications & Sustainability) explains. He is quick to sum up “that the promotions of surface express offerings have not been quite a hard sell because of the strong brand value of Blue Dart”.

Supply Chain: Gunning for 4X “ We want to grow four times over and above our current size in next ﬁve years,” says Oscar de Bok, Senior Vice President, South-Asia & Indo-China, DHL Supply Chain without pulling any punches. Certainly the most ambitious target set up by any business unit of DHL. But the logic is also not beyond

comprehension. This newest block of DHL empire in India (set up in 1997) has the smallest base in comparison to its group partners and now envisaging goldmine of opportunities given the fact that advancement of logistical support system has become inevitable as Indian economy moves in the new growth orbit. With an infrastructural base comprising over 110 warehouses on a pan-Indian basis covering over three million square feet and employees strength of over 2500, Oscar assures his intent of aggression are not unfounded. “ Supply chain in my view in India is in a stage of fast development. It is going to help the consolidation drive of a lot of companies which obviously is not going to happen overnight. In my opinion, the requirements in supply chain are going to change drastically,” he presents his rationale. “ It’s the environment which is inspiring us to think in terms of making the most of the opportunities. With economic fundamentals being in a robust mode again, we are noticing our customers growing by 25 percent. And now is the right time to introduce the cutting edge value added products to our existing as well as new customers. You can expect

â&#x20AC;&#x153;ISC is spearheading operational integrationâ&#x20AC;? Malcolm Monteiro, SVP & Area Director South Asia, DHL Express explains how ISC is facilitating the closer operational integration of different units. What is the precise objective of this steering committee? We have four very strong business divisions in India. Most customers want either some or a combination of services that DHL divisions have to offer. Keeping the customer in mind, way back in 2006, we got together and took a renewed focus on our individual strengths to see how best we could pool our capabilities. Based on our joint resolution, the India Steering Committee was set up to use our collaborative front to its maximum potential. The Committee that comprises of the four BU heads of DHL India meets once a month to discuss topical issues pertaining to business, internal process and HR. These meetings in more ways than one, have lead the way for a collaborative front that can greatly propel DHL to the next level in logistics in the coming years ideally suited to match the growing requirements of the Indian customer. Is it compulsory for any business unit to seek the approval of ISC for any investments it may have planned in physical infrastructure? A formal approval is certainly not

required. But it is important to get a general consensus on matters discussed. Often it is important to commonly estimate proposed plans for the benefit of the group so that there is no BU duplication of investments, infrastructure and processes. Leveraging each other assets is a critical aspect but each facet must be reviewed so that we can offer the most efficient, seamless process to our customers. Does DHL have similar kind of governance style in other countries? I can say it with a lot of pride that we took the initiative and ownership here in India. Our headquarters in Germany has certainly encouraged us to do it. Such kind of governance structure is unique in India and within the DHL group globally. In some sense, we in India have laid the framework that most countries across regions can easily follow. LOGISTICS TIMES September 2010

COVER STORY

launch of many value added products for businesses like healthcare, IT and retail,” Prakash Rochlani, Director –Business Development, DHL Supply Chain elaborates. IT incidentally is the major revenue earner for the supply chain division. Vikas Anand, Director- Operations, DHL Supply Chain sums up the strategy for next ﬁve years in these words. “There would be three critical cornerstones of our business plan- growth of customers, retention of customers and having best training facilities so that we do not fall short of right kind of manpower support.” Having world class training centers, in fact, is the major emphasis of this division and the recent unveiling of ‘Gurukul’ near Mumbai is a case in the point. An operations simulation centre, this unit is aiming to develop the skills of blue collar workers by imparting a consistent and standardized training on several aspects of warehouse operations, which would include the critical subjects of safety, health and environment at their warehouses across the country. Another Gurukul unit is slated to be unveiled at Pataudi near Delhi very soon. In terms of transportation capabilities, the unit is relying on the light asset model but according to Les Kawoh, Director – Transport, advanced offerings are very much on the cards. “ The challenges in India on transportation are immense. Look at vehicles which are used in carrying pharma products. They hardly qualify to be serving them. We will gradually bring in our fold sophisticated vehicles chimed to the demand of that particular industry. Plus, we have decided to build a sizeable ﬂeet of long vehicles, probably 13.6 m trailers to get optimal carriage capacity.” But the most critical difference which is likely to unfold is on warehousing front. And here the major trigger is the expected rolling of GST regime from April next year. “ We have decided to build large multi-user warehouses in tier-I locations and for them we will be investing directly, in buying lands and other required amenities. At the same time, we would be retaining our existing units in 34 locations for storage purposes. LOGISTICS TIMES September 2010

These large multi-user warehouses would also offer packaging, repair, technical and promotional packaging services,” Oscar says.

The combined power That was the separate aspiration of each of the business units. Now let’s look at what it means in the cumulative sense, something which the ISC is trying to promote and which is already being perceived as ‘light house’ model by DHL top brass. In practical terms, it means depending on operational synergy, the business units promoting each other before their set of clients to truly present end-to-end integrated logistics solutions capability of the group as a whole and gradually sending across the message very strongly to their customers that on a cumulative basis, all the units of DHL in the country offer best ‘one stop shop’ solutions for all logistical requirements. It would also mean ultimately switching over to one billing process. According to Monteiro, the process has already begun. “ I think, 15 percent of our topline is now coming from this cross selling methodology.” For instance, with greater synergy between Blue Dart and DHL Express, both the units have begun selling each other products from their stand alone counters. Additionally,

DHL Express is clearly leveraging on Blue Dart’s expansive reach in terms of services and sales. “ Blue Dart and DHL are the two sides of the same coin in a way. Blue Dart sells DHL Express products to the international customers. There is cross sell available to them. At the back end, there are several areas where we work together – we sell directly into the large cities. Outside of that, almost at 300 plus locations, Blue Dart does pick up and deliver for us,” Subramanian informs. And going ahead, there would be much closer interaction between the four units in terms of usage of facilities which they are going to add either for land, air or sea services. “We have tremendous cross cooperation between different business units. One of the things all of us believe in is that we can differentiate in India in offering endto-end solution - forwarding, domestic and international express solution and warehousing, domestic distribution, custom clearance and brokerage. We are trying to stimulate the cooperation between DHL units and also motivating the customers to use solutions offered by either of the four business units,” Oscar sums up. And if that really happens the way it has been planned over a period of next fourﬁve years, the lighthouse model may well turn into a ﬂoodlight example.

RETAIL

The capability race If I have to speak about the present status of organized retail in the country, then I would say it is at that critical point of inflexion. The current share of the total organized component is barely 4.2 percent of the total retail market but now it is growing at a rapid pace of over 30 percent on an annualized basis and by 2014, it is estimated to mount to 12 percent. In revenue terms, it would mean a staggering jump from $15 billion to $65 billion. And even after scaling up the share to 12 percent, there would be a long road of growth. Imagine in the country like US, the share of organized retail is an astounding 82 percent. Where does Indian retail market stand in terms of advanced SCM adaptability in comparison to retailers in the developed markets? But before responding to this question, let’s look at some basic premises. Efficient supply chain management is certainly the backbone of an organized retail chain. The reach and depth of the chain is the key differentiating factor. Ability to integrate backwards and reduce sourcing/logistics costs is so important as it results in higher profitability. Driving retail supply chain costs down while improving service is critical to retailer’s success. The two key factors that retailers are focused on in today’s market are: reducing retail supply chain costs and improving product availability. The basic rule is: the effectiveness of retail supply chains can make or break a company and dictate if the retailer will flounder or flourish. If I have to comment on SCM capabilities of Indian retailers compared to developed markets, we are definitely not matching them right now. But given its centrality, some Indian retailers have certainly managed to put in vibrant processes in the shortest possible time. With scale growing, complexities going down and advent of GST slated to provide a shot in the arm to retailers, I am sure we would be able to match up the western retailers in next three-five years. At a much micro level, in the operational sense all organized retail companies in

the country are trying to put in integrated systems and processes. If you are really speaking about the retailer-vendor integrated processes, that has just started. So there is some distance to be covered before we come to the level of western retailers. The major gaps as I see today in the retail business: first is availability - the amount of inventory which we are holding in our systems and scale. Availability is not only the function of retailers being able to project correctly as what their requirements are but also depends on vendors’ capability to fulfill whatever is given to them. Secondly, since there is an inefficiency on the fill grade part, either from the vendors side or projection side of the supply chain mechanism, you tend to operate with a higher inventory level to take care of the stock outs. And thirdly, our scales are different from what western retailers operate at. So till the scale happens, which everybody is trying to execute, having supply chain processes optimized is slightly difficult. The retail business typically depends on two things – physical element and system part. System has three components – one, how well you manage the master data, second how well you manage the automatic replenishment system and third how quickly and easily you can provide information to the vendors on the basis of need to know. So the question is: do you have integrated seamless system from where you can provide the data and do you have the common data pool thus reducing transaction cost and slip ups? The physical side of it is pure movement. It pertains to delivering material on time and fill. These are the two parts which have to be managed while managing efficient supply chain in retail. The system side only helps in managing the physical side. In next five years, the major changes I anticipate are: the scale would grow, and with scale associated complexities. Secondly, our processes would improve. For retail business, it would always be never ending race. You have to keep planning and improvise.

Amit Mukherjee, VP - Supply Chain & IT, Spencer Retail

LOGISTICS TIMES September 2010

INTERVIEW

“We can think of adding capacity” Like its other global peers, Air France-KLM had to witness very rough weather last year in its cargo operations. But the cargo unit of the global aviation major has just reported being back in black in June quarter. Rene Peerboom, Director, Air France KLM Cargo tells Ritwik Sinha about how the environment is changing in the global air cargo business and the airlines’ outlook for the Indian market with unmistakable assertion that group’s freighter operation is very much up and running in the country. How would you explain the operational profile of your cargo unit in the Indian market? The cargo proﬁle of Air France- KLM and Martinair, which is also part of the group is offering an integrated service to the Indian market. We have a co-ordinated approach and further integration going forward is being considered. When it comes to cargo, Air FranceKLM is a belly operator with a signiﬁcant number of freighters on the top of that. In fact, we have a good combination of belly, Combis and freighters throughout the world. That gives us the advantageous position of being the largest air cargo operator in the world. We offer a complete solution to our customers.

What is the kind of capacity you are offering in Indian market as of now? At the moment, we are ﬂying passenger planes to Delhi (twice a day), Mumbai (twice a day), Bengaluru (once a day) which provide belly space for cargo. And in Chennai, we are operating Martinair freighters. The market is now growing signiﬁcantly and is more balanced than what it was a year ago. Now, we are gradually reaching the stage where we can think of adding more capacity. In terms of LOGISTICS TIMES September 2010

tonnage capacity per week, we are at the range of 600 tonnes.

In recent months, what kind of average you have clocked in terms of actual load? Load factor wise, the scenario has been good for us. We have the relative beneﬁt of a large network and full product range which enables us to offer a broad package to the customers.

How big is your network in India in terms of freight forwarders and cargo agents working for you? We are dealing with all the MNCs and the main local players. Our network of associates is quite large.

What is the product profile – the major goods and commodities you carry from and bring to India? We are relatively strong on the density part. We do a lot of automotives, pharma, and carry a significant amount of fashion items. Since we are a relatively well established airline, we have been developing our product range for a long time. We are probably one of the first airlines which began developing new segments in the airline industry in terms of broadening of the cargo profile. So in that sense, we are blessed in having a matured portfolio in India as well. We can cater all the products in the pharmaceutical market and have dedicated solutions for the fashion market. Plus, we also have solutions to enhance the security and safety of the cargo. So while most of the existing players offer generic cargo facility, our focus is more on value added transport. The reason is historically we have been working on those products for a much longer time. And that makes us strong in those segments. If you look at pharmaceuticals in the temperature range, we have special facilities. If you look at fashion goods, we have special kits. The goods I talked about are main commodities which are exported from the country. At the same time, we are also a similar player for

importing goods in the country.

Your airline has faced a tough time in recent years. It was reported to have incurred Euro 1.2 billion of loss last year. I would like to get a sense from you, how has your cargo unit fared in these troubled times? Most of the airlines have been hit hard in the Cargo division. In that sense, the airlines which have three businesses – passenger, cargo and MRO – are more balanced. You have seen last year, pure cargo carrier had a very tough time. Although passenger airlines did not have an easy time either. For us being the biggest international airline, the loss tends to be bigger which comes from the sheer size and scale of operations. Yes, we were also seriously impacted. And in response to that situation, we did take some drastic steps. For instance, we reduced our freighter capacity. At that time, everybody in the cargo business was reducing capacity – be it airlines or shipping companies. Some companies even had to park a big part of their planes and vessels. But situation has changed since then. Business parameters are stabilizing once again. Hopefully, in this year we would see recovery at a fast pace, much to the relief of everyone in the industry.

If we really look at the trends of past six months, we have seen some kind of recovery happening in the global aviation business. And in the recovery, Asia-Pacific has taken the lead whereas recovery in Europe has been the slowest. Plus, all IATA projections point out to the scenario that Asia-Pacific would be driving the aviation business in the future which includes cargo. Tell me if there is any thinking at the top management level to attain a bigger scale in your operations in these markets? I would say if you look at our network, the passenger belly network and freighter network, we already have a strong

positioning in Asia. Our operations – cargo network wise – to the Americas has been reorganized differently, and our presence in Africa is still very consistent. In Asia, we have already developed a huge capacity in China where we are one of the biggest international players. I think, the weekly frequency of our freighters to destinations in China amounts to 14. We have built good base in Hong Kong, Bangkok and Singapore as well. We used to ﬂy Air France – KLM freighters to India till two years ago. In the hindsight, it was a good choice to suspend the operations because the market conditions were not very favorable. But with some stability coming back, we will be looking at the option of bringing back capacity again. The volume has been quite good. And many international companies are looking at India as the new production hub. Pharma and automotive businesses are developing very well. Coming back to the main point, I think we are well positioned to serve the Asian markets.

Is there any plan to bring back your freighter in the Indian market? As said, the freighter is still very much in the Indian market via Martinair. After acquiring Martinair, KLM transferred its freighters to Martinair. Via Martinair we supply freighter capacity to the Chennai market. Further capacity development is being considered.

There has been this perception that your freighter operation has gone out of the Indian market … Martinair is now very much part of Air France- KLM Cargo group. So together Air France-KLM and Martinair take decision where it makes most sense to put freighters. Some time ago, we realigned our operations to optimize our resources and offerings to customers. You can use an Air France or KLM Air Waybill for goods which will be carried by Martinair and vice-versa. So I would say our freighters are not out of India. In fact, early in July, Martinair celebrated one year of its freighter operation in India. LOGISTICS TIMES September 2010

INTERVIEW

LOGISTICS TIMES September 2010

Waiting to be harnessed The RFID (Radio Frequency Identification) technology is still in a nascent stage in India and costs of RFID tag is a biggest deterrent though bar code technology with infrared readers has reached a stage of maturity. They are omnipresent in malls and stores throughout the country. Few foreign logistics service providers like Schenker are using the technology in coordination with their foreign principals. It is expected that in the retail sector, the use of RFID technology would be geared up by companies like Wal-Mart and Carrefour who are waiting in their wings to start their fulltime operations with companies like Bharti and Reliance Retail. But RFID technology helps enterprises in reduction of cost and improvement in efficiency, says Professor Akhil Chandra of Indian Institute of Logistics & Aviation Management.

FID technology helps in tracking movement of goods and items through the supply chain of enterprises helping in reduction of costs and improvement in efﬁciency. The movement of goods starts right from supply of raw material from initial suppliers to manufacturing unit of enterprises and then movement of ﬁnished goods to customers through distribution channels consisting of dealers, wholesalers and retailers. The transportation of material in cartons and pallets to warehouses takes place via ships, rail road, air and trucks. Companies like Wal-Mart have successfully used the RFID technology and rose to become number one company in the world after beating big conglomerates like K-Mart and Sears in their own game of retailing. RFID technology has been used by major companies other than Wal-Mart like Target, Tesco, Metro, and Albertsons and by government departments like U.S. Defence - all of which require suppliers to provide goods with RFID tags. However this requires some investments to make in RFID Tags, readers and hardware and software infrastructure. Traditionally Bar Codes have been utilised

for identification of the products and thereby efficient flow of goods in the various phases of the supply chain. The bar code system generally used in Europe has been EAN (European Article Number) and in the United States a corresponding code has been UPC (Universal Product Code). A more comprehensive code GSI128 CODE is also used for ordering and identifying transport units and pallets. RFID is expected to be next technology that will revolutionize logistics and probably the bar code.

What is RFID technology RFID is a wireless technology working on UHF range of frequencies. RFID system consists of transceiver equipped with an antenna, a tag and a reader acting as an intermediary between the identiﬁcation and the background system consisting of computer system and associated software displaying the information about goods such as the country of origin, description, expiry date, destination, handling details etc. Electronic product code is the key standard for RFID in Retailing driven by EPC global which works in close collaboration with GSI. RFID tags were earlier used for marking

cattles and pets and as such are not a new invention. However during the last few years plans encompassing entire value chain using RFID Tags right from procurement of material up to the ﬁnished goods available on the shelves at the point of purchase for the customers have emerged. Tags make it possible to identify each Logistics unit or even each individual product and track their way through the supply chain.

Active & Passive Tags RFID Tags are used in different shapes and sizes and their costs have been brought down to few cents. The Tags are divided in two parts viz Active and Passive: Active Tags can usually be complemented with new information as they proceed in the supply chain whereas Passive Tags are for one time use and only send data which is stored in them initially. A passive tag draws energy from the reader whereas an active tag has its own battery and draws power from there. Read – write tags can be erased and can be used many times along with the ability to rewrite the data. Wal–Mart made it mandatory the use of RFID Technology by its top 100 suppliers at the case level. LOGISTICS TIMES September 2010

TECHNOLOGY

Advantages over traditional identification methods • RFID Technology makes it possible to read large number of items simultaneously • The process is automatic without involving manual intervention. • The devices are always on and ready to read. • Code reading does not require a visual line of sight so it can take place even through the side of truck without unloading. • Tags can contain large amount of information.

Benefits for Enterprises With the openness and transparency in the value chain, RFID enables significant benefits in the form of smaller shrinkage, especially during shipping and inventory handling. Missing units can be identified easily and much faster. Any corrective action can be taken much faster. This also prevents products stolen by employees or suppliers. RFID tags shall be widely used for tracking valuables and courier assignments. The shipping tools such as cartons and pallets are widely tagged. The technology can be used in manufacturing to check the availability of entire bill of materials relating to a specific purchase order or the combined inventory of finished goods. Manufacturers who experience bottlenecks in traceability of goods or who want to reduce labour costs with material management and replenishment are excellent candidates for implementing RFID technology. Numerous industrial applications requiring work in progress tracking, parts identification, asset and fleet management have huge scope to derive cost benefits and increase their efficiency by going whole hog for this technology. The technology can make the receiving of a truck much faster and cheaper. ODPL, a trucking and logistics provider in North America whose drivers operate from 117 service centres banks on RFID technology to operate its fleet of 2600 trucks and derives immense cost benefits by getting the loading and unloading of trucks with less labour cost deriving LOGISTICS TIMES September 2010

Retail Experience World’s biggest retailers like Wal-Mart, Tesco and Metro are actively promoting adoption of RFID Technology. Wal-Mart chose their suppliers globally from countries like China and cut down their procurement and manufacturing costs and could sell every item cheaper than their nearest competitor. They carried out computerization coupled with ERP (Enterprise Resource planning) software throughout their value chain and shared the customer’s information liberally with their suppliers, distributors and dealers through networks based on information technology resulting into cutting down inventory carrying costs in the warehouses and supply what customer exactly wanted at the right place, at right time and at right price. With customer centric approach, Wal-Mart set up huge distribution centres where merchandise goods in cartons were identified and redistributed with help of Radio Frequency Identification Technology tags and they could dispatch the replenished good in huge Malls just in time delivering the goods before expiry date through prioritization of cartons. This way they could make most of the merchandise including FMCG goods always available on the shelves and were ahead of their competitors in reducing the lost sales arising due to non availability of goods on the shelves. value in terms of faster delivery of the material and goods to its end customers. The system thus streamlines loading and unloading operations where the wasting of time is directly proportion to lessening of proﬁts for Logistics companies who require their assets more on the road.

RFID for Asset Management RFID technology is highly adaptable that many other types of business can use it for improving the tracking, availability and utilization of their assets whether they are tools and tackles on the assembly line or semi ﬁnished or ﬁnished goods or work in process machinery. Asset tracking by RFID thus can minimize thefts and losses increasing thereby return on investments. Due to RFID Tags being read in automated operation without requiring manual intervention, unattended and constant tracking is provided by the well designed RFID systems.

Product tracking & genealogy

in Aviation industry RFID technology is a boon to aviation industries which requires tracing genealogy of the components used in aeroplanes for proper maintenance and upkeep or provide life time identification. Aviation industry in fact is a leader in developing RFID product tracking standards and applications. Misidentification and record keeping errors could potentially cost airlines millions of dollars in unnecessary replacement costs. Actually in aviation industry aeroplanes can’t fly if positive identifications and life time records are not available for a specific part.

RFID in Automotive industry In the automotive industry where just in time, just in sequence delivery requirements are a routine requirement, automakers and their suppliers use RFID to identify subassemblies to insure they are installed in the correct chassis. A fully operational and well implemented RFID technology can eliminate the need for

manual counting and bar code scanning at the receiving dock. It can also be used to get an exact count of incoming items and items in storage.

New Standards A new and rising standard towards RFID is reading near ﬁeld communication standard (NFC). It enables reading RFID tags through mobile phones. The mobile phones are equipped with NFC while mobile phones read RFID tags embedded in shelf labels and wirelessly exchange the shopping list information with a dedicated point of sale to facilitate an Express check out. During the shopping trip, customers can monitor what they spend and save time bypassing the queue at the check out. In near future mobile phones may include a personal trainer or weight watching application that calculates calories in the shopping basket and shall offer useful tips to customers for choosing healthier products such as containing less salts. LOGISTICS TIMES September 2010

CASE STUDY

What we did at Indian Oil

LOGISTICS TIMES September 2010

Swaran Singh Soni, former Executive Director (IS) and (Optimization) at the state-owned Indian Oil Corporation, who spearheaded supply chain optimization in the Gpsuvof! 611 Indian company, shares his experience.

LOGISTICS TIMES September 2010

”

CASE STUDY

he on-going stringent products speciﬁcations to protect environment from fossil fuels, rising Crude and Oil prices, Competition, Price under realizations and liberalization process in hydrocarbon sector has forced the oil industry to induct newer but cost intensive technology to sustain and improve its competitive edge and proﬁtability in global market. To meet these challenges, efforts are being made to optimize the entire supply chain rather than individual resources to improve the company’s bottom line with the help of Information technology and computer aided optimization tools. ERP is widely used in Oil Companies for all transactions, however, the SCM modules are generally on a different platform and highly customized. Therefore skilful integration of SCM and ERP is also a major challenge for successful operations.

Peculiarities and Challenges Oil sector has a very complex network of production and distribution. Moreover, in case of Public sector Oil companies, there is added responsibility to ensure smooth distribution of products all over the country and at no cost any disruption in supplies in any part of the country can be allowed. Oil sector has to deal with the dynamics of exchange economics, opportunities to maximize throughputs and daily decisions of whether to make or buy a product to serve customer demand. These decisions

are complex in nature due to involvement of innumerable variables. Normally in a complex business process and in particular to down stream oil industry, the entire business is divided into two broad categories: Production planning – at most optimized cost Products distribution and marketing planning Since Oil companies have to cater to wide varying demand centers and patterns over the length and breadth of the country, therefore, demand estimates have to be very accurate and realistic. It is noteworthy that besides region wise demand patterns, there are many other factors affecting the demand trends and accurate projections. If supply chain planning done in isolation by each Refinery and individual Marketing set-ups, this may lead to many problems and reduces scope of optimization of supply chain. For example, refineries will produce best product pattern based on their economics and offer the products to marketing division for sale. However, marketing may come out with different product grades and quantity requirement based on demand analysis and forecast. The sheer mismatch in products availability and demand upsets entire supply chain leading with either change in Refineries product pattern which will reduce refineries profit margins as crude is already procured or the logistics under-recoveries causing huge dent to corporate profitability. Integrated

Supply chain solution With the availability of LP based technology to configure and solve large and complex mathematical problems, it has become possible to plan and optimize entire supply chain through Integrated Supply Chain Modules. In our case also we implemented the integrated supply chain solution after initially developing, validating and stabilizing the smaller modules and then integrating the same to derive the benefits of an integrated solution. The existing sequential and decomposed business process was reviewed, analyzed and subsequently redefined from a demandpush model to a demand-pull model. Main components of Integrated Supply Chain Modules

Demand Planning With the implementation of ERP system across the organizations and proper statistical tools, it became possible to take care of any number of inﬂuencing factors while doing demand forecast. The model provides statistical demand forecast based on actual historical sales data available from ERP system, weightage of causal factors and has the provision for judgmental collaborative correction particularly for short term forecasting. The output is sent to supply chain data base. The improved demand forecast facilitates planning of the optimal resource allocation in different parts of supply chain.

Factors for Success • First and foremost is the active and visible support of top management and senior management from all divisions or SBUs. • Organizational change management at various levels – Production, Procurement, Marketing, and Logistics functions of the company. • Initial customization of the solution at the time of implementation is very crucial for effective and successful operation • Practical authority to Central Planning department, which has to be at corporate level and should have the final say in planning of production and distribution. • Supply Chain Database has to be up-to-date at all times. • Monitoring of planned and actual, and mid course correction wherever needed • Close and real time integration with ERP system of the company

LOGISTICS TIMES September 2010

Crude Selection and Refinery Planning Models Linear Programming Software tool for refinery production planning have been implemented and being regularly used successfully at Refineries. Each refinery model represents actual Refinery configuration and constraints. The models are effectively used for detailed production planning in multi faceted scenarios.

Supply Chain Data Base and Supply & Distribution Model The RDBMS based system is the heart of Supply chain management as it is the data source for static as well as dynamic data required by all the modules. Apart from the storing the data in structured fashion using masters, it also processes the data to perform various activities for logistics optimization.

Integrated Model

Planning

(IP)

This is the most crucial component in Integrated Supply Chain Optimization process. The Integrated Planning Model (IP) is generally a combination of detailed refinery models of individual refineries and all India logistic networks for all the products. These are gigantic LP models for Integrated Refineries production Planning, crude evaluation and optimized logistics. The Integrated Planning model operates with the combination of static inputs and dynamic inputs like – Dynamic planned Demand at various demand centers, Raw material availability, desired inventory, Imports/ exports etc. The model takes into account various constraints and variables and provides final results, which forms the basis of Production Planning, Crude selection, supply, distribution and logistics planning. Multi-refinery production planning has its own challenges apart from constraints. Dynamic demand with varying patterns, products purchase / imports finalization need to be done well in advance to avoid undue strain in supply chain and products scarcity in market. Constraints related with transport infrastructure keeps on

changing time to time depending on third party infrastructure availability such as rail wagons availability, port congestion, depot handling limitations etc.

•

Transport Scheduling Model

Involvement of Top Management and End Users

Based on the output of IP Model and ﬁnal Planning of Distribution to various Demand centers and storage points, this model gets inputs for day to day distribution planning. This model is closely integrated to ERP system and triggers actual movement based on various static and dynamic data

Benefits from Integrated SC Optimization The Integrated Supply chain management has given tremendous benefits to the Oil Industry, comprising of tangible as well as intangible benefits. The major benefits due to implementation of Integrated Supply Chain management in the organization have been realized as under: Improvement in corporate Gross Margins Reduction in logistic cost Effective management of Product Inventory

The other benefits can be summarized as under: •

•

• •

•

• •

Change in thought process of top, middle and bottom level management from silos based profitability to corporate profitability. Business process change from demand push scenario to demand pull scenario Optimization of entire corporate supply chain rather than individual business process Faster and efficient crude evaluation Optimal and matching Refinery production planning in line with demand Optimal distribution planning matching with Refinery production plan Imports and Exports planning Ensures that there is neither any scarcity of product or over supply of products in any market all over the country

The Integrated Planning model can also be an effective guide for long term planning of investments in infrastructure.

In our case, it was clear from the start of the project that there is a potential benefit in the overall supply chain management at Indian Oil. However, at the same time, the risk of failure was also high due to the Company’s size, its vastness of operations & complexity of business. None of the solution providers had ever developed a solution with such complexity in the past. The need for having a top-down approach for driving the change was clearly felt. Top executives in each of the Divisions and the various areas of business- enablers as well as ultimate end-users, were first convinced and they acted as champions for the change process. The whole process was accordingly a team effortside-by-side with the consultants. One of the major challenges faced while implementing the supply chain solution was acceptability of the Plan by the Divisions. Accordingly, a Business Process Optimisation (BPO) Group, chaired by Director(Finance) and comprising members of Corporate Optimisation Dept. as well as senior representatives from the executors of the Plan, viz. Refinery, Marketing and Pipeline Divisions, was constituted. Meetings of the BPO Group are held on a monthly basis to discuss the deviations from plan during the previous month, progress of implementation of the plan during the current month, discuss and firm up the plan for the next month and also to discuss the plans and supplydemand balance for three months thereafter. In our case the active involvement of senior level management from all divisions really contributed to the success of this concept, which has now firmly established and fully operational for last more than 4 years. LOGISTICS TIMES September 2010

LEARNING CURVE

Pooling is the shared use of packaging equipment by multiple customers such as Plastic Crates, Pallets and other related storage mediums. Pooling Partners take care of the capital expenditure and logistics of providing, maintaining, tracking and relocating equipment for your business. This means you only pay for the equipment you use, when you use it. Consider the advantages of using equipment pooling service: • Pooling Partners invest in the capital in pooling equipment • Pooling Partners bear the cost of

providing training and education.

Smart Business Outsourcng logistics is a vital and increasingly common way for businesses to focus on what they do best. • You gain from Pooling Partner’s experience of operating numerous other supply chain systems for diverse businesses around the world • You beneﬁt from access to equipment control expertise – helping you to minimize losses and reduce the cost of controlling materials handling equipment

• You only pay hire for the equipment you use without the fixed costs of procuring, and maintaining equipment • You can benefit from reusable packaging rather than one-way alternatives such as cardboard • You can avoid having obsolete equipment on your balance sheet • You can outsource the expense, labour and skills required to run an equipment pool to the Pooling Partner • You can benefit from regular innovations in pooled equipment platforms and systems, without

Pool game Many companies run their own pools of pallets and crates, but this can be expensive and inefficient. Outsourcing the management of your pool means professional Pooling Partners can ensure that you have the right equipment, for the right job, in the right quantity and at the right time for all your supply chain requirements…taking away many administrative headaches in the process, writes Pranil Vadgama, President of Chep India in the first part of a new series.

•

running the pooling equipment network Pooling Partners can advise you on which equipment solution will best solve your materials handling needs Pooling Partners ensure you have quality equipment when and where you need it Pooling Partners can help you manage and control the equipment when it is in use and take responsibility when returned Pooling Partners can help you manage your equipment efﬁciently by

LOGISTICS TIMES September 2010

• You can focus on doing what you do best – running your own business – and satisfying your customers. The benefits for you… • You gain the benefits of load unitization provided by pallets and crates • You can benefit from a continuous supply of industry-standard platforms offering greater transferability with less handling and less cost • It’s easy to transfer equipment between your business and others, as and when you need it

outlaying capital

Premier partner CHEP pioneered the concept of equipment pooling in India. The many beneﬁts of outsourced equipment pooling with a reliable partner like CHEP leave you free to concentrate on your business and over 100 customers across India are enjoying the beneﬁts. Our value proposition is as follows... • CHEP invests the capital in pooling equipment • CHEP bears the cost of running the

pooling equipment network • CHEP can advise you on which pallet or crate solution will best solve your materials handling needs • CHEP ensures you are presented with quality equipment when and where you need it in a condition that’s ﬁt for use • CHEP can help you manage and control the equipment when it’s in use and take responsibility when it’s not • CHEP can advise you on the best ways to get the most from our shared menu of services – to help maximize the efﬁciency of your supply chain logistics • CHEP can help you minimise hire LOGISTICS TIMES September 2010

LEARNING CURVE

costs by providing training and education on how equipment can get lost and how to reduce the risks of equipment loss • CHEP can share our market insights to help optimise your returns from outsourcing equipment pooling to us.

Indian scenario Today, many of the Top 10 FMCG companies in India uses a CHEP pooled pallet. The concept of equipment pooling is also aggressively adopted by the AUTOMOTIVE Industries with movements taking place between suppliers and OEMs across the country on foldable crates of auto components.

LOGISTICS TIMES September 2010

The FMCG Indian Industry has started benefiting from outsourcing their pallet management to CHEP. Currently the equipment is used at the point of manufacture for inhouse goods movement, within the manufacturing area and temporary storage. However, with the vast thrust on infrastructure development across the nation the day is not too far away wherein consolidated palletized loads will move across the supply chain. In the next edition, I will discuss some actual case-studies and benefits associated with Equipment Pooling in India. It’s all about supply chain collaboration so everyone can benefit!

Express man from Bhadralok Warm smile and an extremely friendly mien – this is how the image of R K Saboo, Deputy Managing Director of domestic express major First Flight was appearing in my mind as I was driving down to the designated place of meeting with him near Alaknanda in south Delhi recently. I was going to catch up with him after a gap of almost three years and this time, the idea was to capture the essence of the person who is not only the public face of his company but also a leading representative of the express industry as a whole. As we ( Consulting Editor Ramesh Kumar and our young lensman Anil Baral) entered into the spacious ﬂat which is probably used as the guest house of the company, the ﬁrst thing we noticed in the lobby was a large size

treadmill. Is it the precursor of being coming face to face with new side of RK Saboo or RK as his friends call him? , the thought occurred in my mind. And as Saboo later joined us and the conversation rolled, it was confirmed that he is a fitness freak. “ I am a fitness freak. I am the member of Gold’s Gym. In fact, it has fascinated me so much that in my personal capacity, I have invested in one of its franchisees,” he says adding that badminton is his favourite sport which he used to play regularly earlier but these days he tries out his hands only when he gets some time from his busy schedule. “It mostly happens on Sundays followed by 45 minutes to an hour in the swimming pool,” he quips. A strong sense of symbolism can well be traced here. Agility and pace are considered to be the essence of the express business and in that sense RK’s inclination for gyming and sports seem to be a perfect fit. With pots of tea and cookies served, the conversation obviously is channelized to the core issue of understanding the brick by brick building of First Flight in last two and a half decade. The company today claims to have a pan-Indian reach with a topline of over Rs 400 crore and as RK emphasizes, the key future focus areas are to promote its international business as well as surface division - First Wheels, which is now headed by M. L. Saboo. “ But it’s a far cry from where we had

started 25 years back, almost on a dot,” he reminisces with that unmistaken sense of satisfaction. And this is hardly surprising given the fact that he has been associated with the company right from day one. He happens to be a cousin of O P Saboo, the main promoter and CMD. “ O P Saboo used to own a company at that time called Express Air Service that was typically dealing in Angadia style of business. It was his idea to float First Flight and among all other founder directors, only he had some concrete exposure of the early form of express business in the country. I joined in as one of the promoter-director. It was a very humble beginning,” he recollects. Hailing from a business family from Kolkatta, Saboo RK was pursuing his law degree when the opportunity came to get on the board of newly formed entity. “My family was in textile business. But frankly speaking, I did not have much interest in that. At the same time, I did not have much idea about an alternative. So when the opportunity came for First Flight, I just took the plunge,” he says. “ The real excitement was to shift to Mumbai - a dream destination to work in that era,” here comes the revelation. Shifting his base to Mumbai in 1986, Saboo recalls the early days as extremely challenging in setting up and establishing the business. “Even that time most of international majors were there and they had tie-ups with domestic companies. Like DHL was with AFL, FedEx was with Blue Dart, UPS was with ELBE and TNT was with SkyPack. Amidst that scenario, we had started with just three stations - Mumbai, Delhi and Kolkata. Our offices were pretty small. It was even difficult to spread your hands out there,” he explains the conditions in the early days. First Flight, in fact, is still retaining two of the oldest offices as the management is fond of them. So from a very low-key basis, what really LOGISTICS TIMES September 2010

PROFILE

propelled First Flight into the position of prominence? It takes a while for Saboo to recollect the sequence of those critical milestones and differentiators which have helped First Flight to make its own mark. But then response flowed flawlessly. On the structural side, he credits the success to the entire team involving other Directors headed deftly by O. P. Saboo and its key managers who have grown along with the company to the position of VPs and Directors. According to him, the average service age of key managers in First Flight is between 15 to 20 years. High service standard and consistent expansion of network with the added dose of perseverance – this is the mantra, RK asserts, has worked for the company on the operational side. “At a very early stage, we had realized that until you give value added services to clients, why will they accept you? In late 80s, we introduced POD, a pioneering effort then even as we were hardly a brand entity. Secondly, it became clear to us that we need to reach out to the customers. That made us grow continuously in terms of network size,” he explains. RK is quick to point out the painstaking efforts taken by First Flight to ensure that quality of its services is superior and, therefore, a key strategy has been to keep its network under control rather than loosely fanning out through franchise route. “ The major strength of First Flight is that about 95 percent of the network is our own. Rest of five percent belongs to franchise. Now we have taken a decision that we will be going upto district headquarters with the philosophy of owning our network completely. In terms of reach with an excellent service and support, our ambition is to be next only to India Post,” he states the big picture of the top management. But along the journey has come serious disappointment as well. First Flight had begun its own air cargo services in 2006 by acquiring freighters and the company was gung go on the prospects. I clearly remember meeting Saboo in the early LOGISTICS TIMES September 2010

part of 2007 and kind of excitement he had exhibited then. However, in less than two years, the aircrafts were grounded. So, what went wrong?, one is bound to ask. “ It didn’t work out. One takes so many decisions in business, some work, others fail. Probably more than anything else, the selection of aircraft was not right. The aircraft was not giving us the right kind of weight carriage capacity which was envisaged,” he explains without making any bone. RK clearly has another facet as well. To gauge him within the limits of bring one of the founder members of a company which has grown considerably in last two decades would certainly amount to half-baked measurement. He wears one more hat, there clearly is another set of distinction which defines his commitment to the express industry as a whole. For past five years, he has been at the helm of Express Industry Council of India (EICI) – the apex body of most of the major express players in the country including MNCs. As the chairman of this council, he has been spearheading the process of taking up express industry related issues with the government and also within the industry. He is currently serving his fifth year and out of this, only once at the beginning he had to contest the formal election. On rest of the occasions, he has been

elected unopposed. “ Initially I used to represent First Flight in the council. I was the treasurer of EICI for almost seven years and during that period, I always felt that heading EICI will be quite challenging as on one side you have to iron out so many regulatory issues and on other side dealing with heads of various leading courier firms in India would be a hard learning exercise like pursuing double MBA. That brought me to the point where one day I thought of taking a step forward. I had a personal interest in going through these kinds of challenges. Our company had also reached a size wherein we couldn’t afford to have any regulatory challenge coming as a challenge,” he explains his fling with the council in these words. As chairman of EICI, one of his major success has been to get an integrated facility established in Mumbai for import and export which was recently inaugurated and is now fully operational with state-of-the-art equipments. He does admit that wearing two hats, at times, appear out to be taxing. But then over the years, he has developed his own mechanism to deal with the pressure. “No doubt, these two responsibilities sometimes take a little toll on me. But I have learnt to manage it. I have become a better planner than what I was earlier.” With Misti Dohi as his favourite dish, the express man from Kolkata is still carrying the quintessential taste of Bhadralok in his life despite residing in Mumbai for over two and half decades now. “I am also a movie buff,” Saboo enthusiastically responds when asked to list his hobbies. “Comedy and suspense thrillers are my favourite genres.” Nothing surprising, First Flight brand name had appeared prominently in the recently produced comic caper De Dana Dan starring Akshay Kumar, Suniel Shetty and Katrina Kaif. Shot in Singapore, the film had shown Suniel Shetty as the delivery boy of First Flight. “You can expect us to use more of this promotional tool in the future since the recall value is high,” he assures. –Ritwik Sinha

India Container Logistics Summit in Mumbai

Supply Chain Industry Council organized day long India Container Logistics Summit in Mumbai on 27th August. The summit saw the presence of leading personalities from the trade including S Hajara, CMD, Shipping Corporation of India; Vishal Sharma, MD & CEO of Tuscan Ventures; Manish Saigal, Executive Direction and National Industry Head – Transportation & Logistics, KPMG; S. K. Saha, Director (Ports & Railways), Planning Commission; Vinod Giri, Director, IDFC Private Equity; and Captain Sandeep Mehta,

CEO, Mundra Port & SEZ. The speakers at the summit focused on various strands of challenges which the country faces in terms of giving the desired boost to the container trade. Gautami Seksaria, Founder & Partner, Supply Chain Leadership Council presented a very interesting take in summarizing the rationale behind the summit.“We’re glad to have created a platform for out-of-the-box discussions about the box as the future lies in the box.”

AIMA awards Blue Dart for motivational practice Blue Dart, has been honored with the “Award for Best Motivational Practice in Services” by All India Management Association (AIMA) and Indian Oil Corporation Ltd (IOCL). The award has been instituted to encourage employee motivational programs and practices in organizations in the manufacturing and services industries, leading to more effective management and leadership. The award was presented at the inaugural Session of AIMA’s ﬂagship HR event called National HRM Summit on 20th August 2010 at Hotel Lalit, New Delhi. LOGISTICS TIMES September 2010

EVENTS

49 49

SINGAPORE DIARY

Thanks, Paul! I flew into town for the Supply Chain Asia Forum. This year, Paul Lim, the Founder and President of this Forum had predicted the highest number of attendees. Almost 530! I remember the humble beginning of the launch five years ago and it was just a handful of people around a table. For five long years, this man worked tirelessly in putting together one of the best run “open” forums of professionals, where it never seemed as if one was gathering to attend a lecture, but a “waterhole” in fact, where people from the same likings and professional background of supply chain could gather to share and connect. The 5th SCA Forum started off at the Grand Copthorne Hotel with the meeting of the Executive Committee which I am a part of. The discussions ranged from how to take the forum to greater heights and wider audiences to how to give back to the society and create a Centre of Innovation, whereby, the best of the practices and case studies could be offered for further research and innovation. India and China were the hot topics of interest as usual and it was also very heartening to see a very large influx of our Indian representatives over there. Familiar faces such as Anshuman Singh of Forture, Nijay from Arshaya and our own Prof. Bhattacharjee and a host of students from SP Jain were there to add their own thoughts on how India was fast shaping up to be the centre for Supply Chain case studies. That evening, we also had the privilege to meet some of the business leaders (CEO/Directors) of many companies who joined us for an informal chat and discussion followed by a good dinner! By then, I was almost exhausted, given the jet lag and the time difference! The one thing about SCA is the way we take things so informally. This was aptly demonstrated by Paul who welcomed the Chief Guest, Hon Minister for Trade & Tourism S. Ishwaran with a casual

LOGISTICS TIMES September 2010

“hello” and a brief and jesty introduction. Even the Minister’s entrance to the venue was so much of a low key affair! I kept thinking of how different it would have been back home in India! I am sure, we would have been blocked off hours ago and the venue “gheroed” by a tight ring of sten gun totting security guards. Once the formalities were ﬁnished and the Minister had given his thoughts on how Singapore should provide the future

make the dialogues even more interactive with the audience. The next two days simply ﬂew by! We had the shorter sessions on some very focused subjects, where the audience was smaller and the discussions were more personal. For those who had an inkling to take their business discussions a bit outside the closed doors, the golf day was one such occasion to network more and enjoy a breathtaking round of golf around the

of Centre of Excellence for the Supply Chain world of Asia. Quick to make a point, Mahendra Agarwal offered Gati’s help to participate as a contributor to the Center of Excellence which was duly accepted by the Minister. The formalities over, the rest of us got down to the more hard core subject of starting the Forum activities. Unlike many such gatherings, the SCA Forum is always held in a “discussion” format, so no one makes a single presentation through out. Topics ranged from how manufacturing would shape the Asian region and the global markets to how Talent development was being taken up in the region. Each topic was discussed as a view point with the moderators shaping the questions to

seashore. I am sure a lot of the Indian professionals had the time to also take in a few sights as well as spend time with their regional meetings etc. Singapore, well, it continued to keep its doors open, such is the way that it throws itself open to the visitors. No wonder then, that this small city country has actually recorded its millionth visitor for the month! What an awesome feat indeed! The closing session was a bit emotional. It was truly a place where people had bonded so well. The hall was packed, as if it was still the opening session and the people had all the energy left as it gave its loudest hurrah’s to the man who made this day happen, Paul Lim. Harry Lagad * The author is Executive Director, Gati Ltd

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