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From the Editor We tell their tale...........
L
ogistics as a whole is the sunrise industry in India and warehousing is the segment that is an indispensable growth driver. The size of the Indian warehousing industry is pegged at about INR 560 billion and is growing at a CAGR of over 10 per cent annually.
The growth in warehousing in India in the near future will be primarily driven by the following factors: • Growing manufacturing activity with ‘Make in India’ • Rise in domestic consumption • Emergence of organised retail and e-tail in the country • Increasing private and foreign investments in warehouse infrastructure • Policy reforms and easing of government regulations At present, 30 per cent of the total warehousing capacity is primarily held by small godown players; a few large national-level players have emerged in this field over the last decade owing to the capital subsidy available. As we publish India’s leading logistics industry magazine, we felt the necessity of coming up with this India Warehousing Handbook 2016. Designed aesthetically, for a comfortable and leisure reading format, this handbook contains enormous information and case studies relevant for the industry stakeholders. We have worked hard to gather views from the horse’s mouth, facilitating exchange of ideas, in an endeavor to make it India’s biggest single window platform of information for warehousing professionals across the country, for analysing the mood of the industry, figuring out the real fight areas that as the industry works cohesively, addressing the areas that require attention and taking opportunities as available today in the recent future. We hope that our sincere efforts will bring the fruit of ‘effectivity’ for the warehousing sector in India, which is largely unorganised at present, and needs a lot of attention as well as a makeover.
Smiti Suri (Editor)
SPG ENTERPRISES
Warehousing Hub in Eastern India SPG Enterprises is one of the largest Transporter & Operational Agent of petroleum products especially in Bulk & Packed Bitumen, Emulsion in Eastern India HPC & IOC Ltd., operating as Rahul Roadways Pvt. Ltd.
services availaBle
• Our property at Jamshedpur with an area of 10 lac sq.ft is available on lease and can be given partly also. • C & F (Agent Work) for steel & FMCG products. • C&F or Logistics related support. • Security, Power and Water Facility etc are available 24x7. • The Warehouse space is available for all types of Industries like Cold Storage, Food Corporation of India Limited etc. • The Warehouses can be improvised according to the requirements of our clients from any sector like FMCG, Steel, Pharma, etc. • Access to the best Transport Services are also available through our company Rahul Roadways Pvt. Ltd. • The Warehouses of Ranchi and Jamshedpur are within a range of 200 Kms from Haldia Port.
• 10 Lac sq.ft. available in Jamshedpur along side of NH-33, Jamshedpur 4 lane highway, centrally located feeding four states Jharkhand, Bihar, West Bengal & Orissa. • 5 Lac sq. ft. available in Ranchi on NH-33, parallel to 4 lane highway. • 1 Lac sq. ft. commercial building at Jaipur, Rajasthan
registered office: 18, Azad Market, Telco, Jamshedpur-831004, Jharkhand, India Phone: 91-657-2286104/2286401/2286906, Fax: 91-657-2286906, Email: sanjaypalsania8299@yahoo.co.in, Website: www.spgenterprises.co.in Branches: Varanasi, Ranchi, Raipur, Patna & Kolkata. Based in Jamshedpur, Jharkhand since last 40 years.
Editor Smiti Suri
Contents
Principal Correspondent Ritika Arora Bhola Roselin Kiro Special Correspondent Joydeep Banik
Overview Mega Trends Warehouse Rentals Warehousing Clusters Warehousing Design Vertical Demands Temperature-Sensitive Warehouses
08 22 44 56 70 86 96
Director Marketing Ajeet Kumar Manager Marketing Niti Chauhan Marketing Executive Chetan Pathak Rajesh Basu Asad Mohammad Marketing Support Sheetal Singh
Guest Column Safexpress CBRE CRISIL Research Realistic Realtors
Reporter Sana Husain
24 108 112 116
Interview
Indospace 20
Case Studies Bharti Retail Ltd 120 Central Warehousing Corporation (cwc) 124
Administration Vipin Marwah Lavish Thakur Designer & Visualiser Shaique Ahmad Mayank Bhatnagar All material printed in this publication is the sole property of India Warehousing Handbook. All printed matter contained in the magazine is based on the information of those featured in it. The views, ideas ,comments and opinions expressed are solely of those featured and the Editor and Publisher do not necessarily subscribe to the same. India Warehousing Handbook is printed, published and owned by Smiti Suri, and is printed at Compudata Services, 42, Dsidc Shed, Scheme–1, Okhla Industrial Area Complex, Phase–II, New Delhi-110020, and published at 6/31B, Jangpura–B, New Delhi-110014.
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OVERVIEW 8
india warehousing handbook - 2016
Building a
Smarter Warehouse The term ‘Smart Warehouse’ has literally created a buzz in the Indian Logistics Industry. After all, who doesn‘t want a huge, fully-automated warehouse, with robots assembling the products at appropriate locations, thereby, eliminating any kind of pandemonium and disorder? To have an ideal warehouse, well-equipped with the world-class technologies like forklift trucks, reach trucks, robots, Automated Guided Vehicles (AGVs) and Electrified Monorail Systems (EMS) etc., that enable productivity and reduce cost, has become the dream of the big players in the industry. By embracing technology, an increasing number of well-resourced companies have already started operating fully automated warehouses.
10 india warehousing handbook - 2016
1
3
Progressive organisations are investing in standard
A company’s smart warehouse system is a key part of
racking systems, docking stations, material handling
their supply chain, controlling the movement and stor-
equipment, pallets for unitising loads and integrated IT
age of materials within a warehouse and processing
systems at their warehouses. Basic standards, auto-
the associated transactions. The software continually
mation and technology and hi-tech robotics will be the
monitors products progress as they move in, through
trend in India.
and out of the warehouse system, ensuring the storage and movement of goods are firmly under control, even in a multi-echelon storage scenario.
2
4
In a warehouse where optimised storage with quick
Investments should be made in technology for cap-
transport of material and short access time is required,
turing the real-time product information, integrating
we offer innovative storage and retrieval machines that
the real-time product movement information in the
generate electrical energy and stores, which is again
warehouse with the supplier and the customer order
used to accelerate the cranes during horizontal move-
tracking systems. Further investments in automated
ment, thus representing the economic and environ-
storage and retrieval systems for product storage and
ment friendly side of warehouse automation. Through
retrieval are the key. The system should have spare ca-
minimal energy consumption the environment is pro-
pacity, which is built to absorb the fluctuations in cus-
tected and the cost of maintenance is reduced.
tomer demands. 2016 - india warehousing handbook 11
5 6 7 12 india warehousing handbook - 2016
As technology improves, new automated products are being introduced, giving warehouse managers more options than ever before. Conducting the necessary research and selecting the appropriate automation for a company’s needs will ultimately result in improved accuracy, speed and productivity. With the advent of Smart Warehouses, the future of warehouse operations looks very promising.
In addition to helping company achieve desired results, smart warehouses add reliability, dependability and more importantly predictability to the process. The smart warehouses create a possibility of having lights out 24/7 operations. Companies which depend on manpower can reassign key personnel to other areas where needed.
Smart warehouses are the next generation warehouses that are integrated with automated technology to carry out day-to-day operations. The automated technology comprises of smart lighting, Automatic Guided Vehicles (AGVs), Automatic Guided Cars (AGCs), Automatic Storage and Retrieval Systems (AS/ RS), Automatic Trailer Loading Vehicles (ATLs), Warehouse Management Systems (WMS) etc. They adhere to the basic principles of lean warehousing while creating a safer work environment by cutting down on the probability of human error.
AS/RS eliminates the excessive and repetitive handling of material, improves the efficiency of transporting, buffering and sequencing of standard and non-standard loads, increases productivity capacity of existing floor space, reduces product loss and thus boosts savings.
It reduces escalating storage costs by reducing space requirements by as much as 50 per cent, energy consumption up to 80 per cent and labour costs up to 70 per cent.
The components of a smart warehouse may include the utilisation of conveyor systems, AGVs, ATL vehicles, AGCs, AS and RS and WMS. When used in a concerted effort, these ingredients make for a highly productive warehouse.
2016 - india warehousing handbook 15
Fixing Warehousing
Challenges
16 india warehousing handbook - 2016
Warehousing and the entire supply chain are currently in its best stage. Till recently, supply chain was nothing more than transportation and godown keeping and was merely part of the commercial function. The only role of commercial guys was to do vendor negotiation, decide on warehouse location and transaction process based on how tax can be saved. With homogeneous products, often from a common source of procurement and hence near the same pricing, the differentiator is mainly marketing, branding and supply chain solutions, which play a pivotal role in the products success. It is important now to ensure that not only is stock made available to the user in the fastest possible time, but also at the cheapest possibly cheapest cost.
2016 - india warehousing handbook 17
Supply side l Severe shortage of good quality infrastructure: We are still transiting from godowns to professional warehouses. We are awaiting
Key Challenges
big investments in warehousing. Lack of trained manpower: Warehouse managers are being pulled l from operations function of business and the work is still carried out by semi-skilled workmen. l Shallow reach of IT tools in the warehouse: While advanced tools (WMS, RFIS, barcoding, etc.,) are available in the industry, the implementation of the same have only touched the surface. Only one-third of the total warehouses use some form of software, while the rest are still relying on pen and paper.
Demand Side l Multimodal demand from all customers: Customers expect a high degree of service level using different modes of transportation. l Lack of alignment of capacity with cargo flow: Logistics not being the key focus area of many businesses, there is a lack of alignment between demand and the capacity of a warehouse. Factors such as the introduction of Goods and Services Tax, the adoption of the PPP (Public-Private-Partnership) model and the National Policy on Storage and Handling will contribute to the growth of organised warehousing in India and help in overcoming these barriers.
18 india warehousing handbook - 2016
Other Challenges
Basic mistrust between seeker and provider because of which a realistic plan is never implemented due to lack of transparency. Expecting high performance but going for the lowest cost in service. There is always a cost to quality service. Unreasonable growth plan resulting in the service provider making a huge investment, but due to low growth in the actual business, the return does not match the investment. Lack of proper projection, hence unmanageable skews and spikes. Inability to adapt to the changing situation and upgrades. Inability to innovate
INTERVIEW
“We were early birds to spot growing demand for manufacturing and warehousing” Over the years, IndoSpace, the largest developer of modern industrial real estate in India, have added many golden feathers to their cap by introducing one-of-its-kind initiatives to meet the rising demands of clients. Abhijit Malkani, Managing Director, IndoSpace Development Management Pvt Ltd in an exclusive interview with CARGOCONNECT shares their success story so far and how with strategic planning they keep themselves aloft with the changing trends in the industrial real estate sector
Abhijit Malkani
Managing Director, IndoSpace Development Management Pvt Ltd
IndoSpace is the pioneer and largest developer of modern industrial real estate development in India. How did you achieve this position? Over the past decade, we have observed India’s great potential and appetite for modern industrial real estate which has to scale quickly to support the country’s rapid economic growth. We were quick to spot the growing demand for facilities for manufacturing and warehousing and started building our assets to meet that demand. We were early birds and one area we focussed on was smooth land acquisition which is a key to success in this sector. Over the years, we have specialised in building both build-to-suit (BTS) and ready-to-move in buildings. Our integrated parks include world-class facilities. These parks are strategically located and well connected to major urban
hubs, railway hubs, airports and sea ports. These initial efforts enabled us to meet the rising demand from e-commerce clients, 3PL players, automotive firms, FMCG companies, and electronic manufacturers. How do you see this sector evolving with the government’s ‘Make in India’ program and a robust growth of economy? As India’s economy grows steadily, and changes on the ground take place with the support of the Government coupled with the streamlining of the land acquisition and approval processes, we see huge potential for India to become a global hub for manufacturing for auto, electronics and engineering goods. The demand for manufacturing and warehousing facilities certainly exists in India, the fastest growing major economy in the world. This demand is being further fuelled by the ‘Make in
India’ initiative as well as the boom in e-commerce. We see more manufacturing companies, both domestic and foreign, wanting to set up facilities in India but they may not want to get involved in the time consuming process of land acquisition, statutory compliances and clearances. IndoSpace, with its 17 existing projects, has already taken care of these processes and enables companies to quickly set up operations at our facilities. What expansion plans do you have to meet the growing demand and to keep your position as the clear-cut leader in this space? The company has ambitious but carefully calibrated plans to expand its network of industrial real estate projects across the country to support the growing demand from companies. In the next five years, IndoSpace plans to invest over $1 billion in India that will take its total investment to over $1.75 billion, and will increase its portfolio to around 50 million square feet. Given our core competency in developing and building worldclass industrial and warehousing parks, plus our robust expansion plans and ever expanding client profile, we are very confident of retaining and strengthening our current leadership position in the coming years. IndoSpace continuously introduces new building designs to fit India’s evolving market conditions. Elaborate more on the design specifications used in your warehousing projects and how these help in meeting demand from clients? We engage closely with our customers and ensure their requirements are aligned with the statutory laws and policies. We are ahead of the curve as we implement the best practices in the industry and have proactively brought in technologies from other parts of the world to deliver best-in-class facilities in our parks. IndoSpace parks are typically 50 to
• 24-hour security and an experienced onsite team to support our tenants and for the maintenance and upkeep of the park to ensure it functions to its full potential at all times
100 acres in size and can easily accommodate both small and large enterprises looking to set up or expand operations. Our ready-to-move in buildings are built for companies that want to hit the ground running with minimal modifications to the existing facilities and our customised build-to-suit facilities are built as per the clients’ specifications. Our internal experienced design team works in conjunction with world renowned consultancy firms to develop cost-effective and efficient facilities for optimum use. Some key characteristics of our parks include: • Large scale, master-planned developments with state-of-the art infrastructure • Industrial grade power infrastructure to minimise operational costs • Well maintained circulation plan within the park for easy manoeuvring of large vehicles • Grade-A office spaces • Leading life and safety features, like Early Suppression Fast Response (ESFR) sprinkler systems to protect our tenants, people and products
India has an extremely limited supply of high quality industrial and logistics-related real estate. Whereas, IndoSpace has managed to smoothly ensure land assets for its warehousing and industrial parks. What is your formula for success? We work closely with all the stakeholders including original landowners, and create an ecosystem that allows tenants to start operations quickly and run their facilities efficiently. The formula for success is to understand clients’ key concerns, ensure transparency among all stakeholders, and deliver in a timely manner on our commitments. This is our credo. The land acquisition process can be quite challenging, at times, in India. However, within IndoSpace, we have an experienced team dedicated to the entire process.
FACT SHEET Date of incorporation: September 14, 2010 Size: 30 MM SF leasable area Portfolio: 24 parks across nine cities Expansion plan: 50 MM SF in the next five years with planned investment of upto US$ 1 billion in India over the same period Clients: DHL, Amazon, L’Oreal, Nissan Motors, Ericsson, Adidas, Bosch and many more Awards: Supply Chain & Logistics Excellence (SCALE) award for Warehousing Company of the Year 2015 Managing Partner & CEO: Rajesh Jaggi 2016 - india warehousing handbook 21
MEGA TRENDS
22 india warehousing handbook - 2016
Guest Column
Warehousing has a bright future in India The Indian warehousing industry is a vital link in the supply chain & logistics industry. But going forward what lies in store for warehousing?
A
simplistic
definition
of
warehousing is: the action or process of storing goods in a warehouse, which is defined as a com-
mercial building for storage of goods. To the untrained eye, this is, more or less, is something only one actively involved what warehousing means. For those such in the sector would fully understand and as me and others who are in the business appreciate. In India, warehouses are not of supply chain, however, there’s so much only about conventional storing, but also more to it than this one-dimensional ex- play a role in providing several value-addplanation of warehousing. It’s not just the ed services such as cargo consolidation
Managing Director
crucial role warehousing plays in the sup- and consequential breaking, packaging ply chain and logistics industry. The many and labeling of goods, providing bar code
Safexpress Pvt Ltd
different functions that warehousing plays facilities, and so on. Warehouses also play
Rubal Jain
24 india warehousing handbook - 2016
Guest Column a vital role in reverse logistics, which are an ignored part of the supply chain.
and operational challenges and stay relevant in the global logistics space.
Industry studies peg the demand for warehousing to increase from 919 mil-
Additionally, there is an urgent need to work on the quality of warehous-
lion sq ft in 2014, to 1,439 million sq ft in 2019. This will mean investments
ing infrastructure and services, as well as an increase in the capacity and
of about `15,000-`16,000 crore every year, with the capital going towards
ability to handle multimodal interfaces. As a leader who has been working
land acquisition and cost of construction.
relentlessly towards the cause of logistics in India, I also worry about pow-
We at Safexpress hope that this demand will make the sector less frag-
er outages that severely impact cold chains and result in massive wastage
mented and bring about a better, more organised structure to the industry.
of agri products in India. Not just that, the increasing power cost should
At present, we have 29 logistics parks, with a warehousing space of over 12 million sq ft. Safexpress plans to come up with six more logistics parks, and two million sq ft worth of warehousing space in the coming two years. Some of the logistics parks that are already operational include those in Agra, Ahmedabad, Ambala, Bengaluru, Chennai, Dhule, Gurgaon, Indore, Jamshedpur, Kolkata, Mumbai, Nagpur, National Capital Region (NCR), Puducherry, Pune, and Salem. As the largest warehousing firm in India, our company is driving growth in the sector and is providing best-in-class warehousing facilities to our valued customers. Thanks to the present emphasis on manufacturing, the logistics and warehousing sector in particular – industry will grow at a fast pace. Increased domestic consumption and cost-efficiencies of outsourcing manufacturing activities mean even better news for the sec-
be addressed. The industry also struggles with the paucity of trained man-
tor. Other positive factors include increasing international trade, emergence
power which my colleagues in the industry will agree to. There is the lack of
of organised retail in the country, easing of government regulations, as well
standardisation in the industry, which leaves a lot of questions unanswered
as more private and foreign investments in infrastructure. Industries such
when it comes to warehousing facilities. Technology compliance and ware-
as auto, pharmaceuticals, retail and agriculture have grown significantly
housing standardisation will not only make it easier for customers to choose
and will push the demand for more warehousing space. That’s not to say
from different third-party logistics (3PL) companies, but also improve qual-
there aren’t any challenges; however, stakeholders in the industry are keep-
ity benchmark in the industry. The warehousing industry has come a long
ing their fingers crossed for the roll-out of the much-awaited Goods and
way from being an in-house service to a complex and vital link in the logis-
Services Tax (GST), which will play a crucial role in the growth of the logistics
tics industry, and comprises of 20 per cent of the total logistics market. To
in general and warehousing in particular. Also, the existing tax system can
ensure that the industry grows at the stipulated pace and even surpasses
be made less complex. Industry stakeholders should work towards the mod-
it, industry stakeholders and those at the policymaking level need to work
ernisation and automation of the warehousing space to address strategic
in tandem and address the challenges. 2016 - india warehousing handbook 25
Logistics Parks
foresee a bright future
Creation of Logistics Parks on a Pan-India basis is the need of the country. There is an immediate need of consolidation in the logistics sector which until now has largely remained fragmented and unorganised. Setting up multimodal logistics parks will allow end-to-end logistics solutions and will bring with it high efficiencies. The government’s proposal to set up existing goods’ sheds and develop multimodal logistics parks where it has surplus land will surely boost the logistics sector.
26 india warehousing handbook - 2016
In a country like India, having a vast coast line makes a great opportunity for Logistics Parks which are linked to ports. Naturally when Logistics Parks are linked to ports, they have a large opportunity, and logistic development can take place, but ultimately to reach to the ports there has to be rail connectivity.
The concept of Logistics Park has not met with success as it should because firstly, there are not many logistics parks that are good at value-added services, and only if these parks shift from being looked at as a mere warehousing approach to value-added services initiative, then definitely Logistics Parks would be a great success in India. In essence, Logistics Parks is one of the critical needs of Indian Logistics scenario. These coupled with better road, rail infrastructure and GST regime roll out would be the most appropriate recipe for revolutionising the logistics trade in India. 2016 - india warehousing handbook 27
Ideally, a Logistics Park should provide a seamless multi-modal transportation solution. Aggregation/disaggregation to handle domestic and EXIM freight should be the basic criteria.
Aviral Jain CEO & Director, Kanpur Logistics
A single Logistics Park with a rail siding facility can cater to a catchment area of about 350-400 kms. The passage of GST bill will further help movement along the border areas and lead to bigger hub and spoke models.
28 india warehousing handbook - 2016
While a lot of advancements have happened in the IT space, unfortunately till now the logistics sector has failed to exploit it, because of its fragmented nature. Logistics Parks brings economy of scale. Today, technology is being used to provide clients the exact movement details of their cargo.
Indospace Full ADVT 30 sq ft
24 Parks
across 9 cities in India
Sanjay Palsania Chairman, SPG Enterprises
Government should consider as to how all the logistics and infrastructure projects can be fast-tracked and how the government can provide large parcels of legal land at subsidised prices at a strategic location across the country. Government should also provide a single window clearance process to reduce the transit and processing time.
The concept of Logistics Parks has unfortunately not been clearly understood by the stakeholders. In isolation, the Logistics Parks, some of them that are operating, have not been very successful. A few reasons for this being: Poor / minimal hinter-
Bad road
land connectivity
conditions
De-coupled operations of Logis-
Non-development of alternate
tics Parks from gateway ports,
modes of transportation
air and ocean
Monopoly of Indian Railways in
A not-so amenable trade dispo-
rail transportation
sition of Indian Customs
30 india warehousing handbook - 2016
If all these factors are appropriately addressed by the State as well as operators, then for sure the Logistics Parks will be of great success.
Logistics Park is one of the critical needs
The proposed
In a country like
Logistics Park can
of Indian Logistics scenario. These coupled
implementation of Goods
India, having a vast
definitely be a
with better road, rail infrastructure and
and Services Tax (GST)
coast line makes a
success if the land
GST regime roll out would be the most
is expected to create the
great opportunity for
prices are made
appropriate recipe for revolutionising the
need for large warehouses
Logistics Parks, which
reasonable.
logistics trade in India.
and Logistics Parks.
are linked to ports.
Rajendra R Chaturvedi Chairman and Managing Director, Shreepati Group
Today, even the agriculture ministry do not have any logistics parks to store their food grains as a result, it gets spoiled during monsoon. The godowns and logistics parks are insufficient in our country Therefore, government should come out with a comprehensive policy for the Logistics Parks which they have not yet come out with.
2016 - india warehousing handbook 31
32 india warehousing handbook - 2016
Robomation in WaREHOUSES The fusion between engineering and computer sciences is experiencing a slow but steady progress in our country. Robotics and automation is a hybrid fruit from these two branches. The logistics industry is the biggest beneficiaries of the partnership between humans and machines 2016 - india warehousing handbook 33
• Robotics deals with the design, construction, operation and application of robots coupled with computer systems for their control, sensory feedback and information processing • Deployment of robots has dramatically changed the concept of traditional warehouses, leading to mechanisation of labour and smart logistics practices. • As the logistics industry experiences more demand for rapid order fulfilment and accuracy, supply chain management providers and end-users must come up with a way to meet consumer demands. • The global market for industrial robotics projects is close to 1,43,000 units by 2015, resulting from expanding application possibilities, technology developments, rising value propositions, demographic shifts and ensuing labour shortages.
34 india warehousing handbook - 2016
"Implementation of robotics and automation is easily possible in organised sectors, where factory managers are ready to embrace automation and look at automation as an aid to improve process. When we approach unorganised sectors, there's resistance to change." Samir Gandhi, MD & CEO, Gandhi Automations
• Robotics and automation eliminates manufacturer concerns as the technology is more widely used, affordable and available.
• The global robotics industry is estimated to be worth $17.6 billion, while the Indian robotics industry is worth approximately $750 million. The latter is expected to double over the next 3-4 years.
2016 - india warehousing handbook 35
"Robotics and automation have very long payback or ROI periods due to the high cost of the system and the implementation."
Bruce Stubbs, Director, Industry-Marketing, Honeywell Sensing &Productivity Solutions
Automated cranes
Advancements in robotics are extending their functionality and improving their performance.
Conveyors
Sortation systems
Industrial robots
• The challenges in the way of robotics adoption in India are its high cost, non-availability of skilled talent and procurement of hardware components. The cost of adopting robotic technology is very high due to the cost of procuring imported hardware components as well as training personnel.
36 india warehousing handbook - 2016
"One outcome of increased automation is reduction in use of manpower and possibly lesser errors, fewer accidents - no doubt. However, in the long run, we would still need people to operate the machines and control robotics. What will change is that we would need more personnel with planning, technology and IT skills to sustain the automation."� Milind Shahane, Managing Director, DIESL
Vertical carousels
A complete warehouse automation system can drastically reduce the workforce required.
Motion check weighers
Radio data terminals
Integration software and Business control software
• Rising demand for automation in order to strengthen product supply, domestic manufacturing and value-added warehouse services has resulted in the use of more automated technologies. 2016 - india warehousing handbook 37
38 india warehousing handbook - 2016
E-commerce Boom Surges Warehouse Space Demand Demand for warehousing and office space picked up in 2014 with the growth in e-commerce segment that further led to increased leasing by e-retailers. With various consultancies and researchers predicting a high growth and demand for warehousing in India as a result of growth in the e-commerce market, industry experts predict its bright future 2016 - india warehousing handbook 39
I
ndia’s warehousing and logistics real estate segment has benefited immensely from the expansion in e-commerce over the last two years. The emerging retail segment took up about 1.7 million square feet of warehousing space across Mumbai, Chennai, Bangalore and the Delhi National Capital Region
in 2014, according to a report by CBRE, a leading commercial real estate services and investment firm. “Almost 25 per cent of the total warehousing/logistics space uptake across the country in 2014 was by e-retail players, while the uptake of logistics space rose by more than seven times over that of 2013,” reads the CBRE report. In India, e-commerce related warehouses currently serve tier 1 cities and to some extent tier 2 cities. The increase in e-commerce business has put additional pressure on warehouses, as they are expected to fulfill customer orders directly in addition to replenishing stores. These developments have added complexity to the warehouses and call for more advanced Warehouse Management System (WMS) to sustain the new omni-channel paradigm.
40 india warehousing handbook - 2016
India’s warehousing and logistics real estate segment has benefited immensely from the expansion in e-commerce over the last two years.
The increase in e-commerce business has put additional pressure on warehouses, as they are expected to fulfill customer orders directly in addition to replenishing stores.
The boom in the e-commerce segment has undoubtedly resulted in an increase in demand for warehouse space.
The most important factor to sustain as a warehouse for an e-commerce segment is to be quick, efficient and cost effective because the customer expects the delivery between 24-48 hours.
Brijesh Lohia, MANAGING Director, Global Ocean Group
“With the boom of e-commerce segment, there is indeed an increase in the demand for warehouse space. It has now opened gates to increase the number of warehouses especially in close proximity. The increased demand in this segment will now result in much hyper-efficient and data driven warehouses, also increasing the need for an ideal location to be able to deliver the products faster.�
Knight Frank, a real estate consultancy, estimates that demand for warehousing in India will rise to 132.8 million sq. meters by 2019, a compound annual growth rate of 9 per cent from 2014. The last few years saw the segment becoming a new addition to the mix of major office space demand drivers in India as online retailers increased their footprints for front-end as well as back-end requirements. 2016 - india warehousing handbook 41
“While this growing e-commerce market poses challenges to logistics companies, it also provides opportunities for developing smarter supply chain solutions to keep pace with the consumer demand. E-commerce fulfilment demands flexibility and efficiency, and we at Gati-KWE strive to go beyond conventional boundaries in terms of space utilisation, technology tools and material handling methods, to address these opportunities.”
Dhruv Agarwal,
GST will simplify India’s tax structure, by broadening the tax base, and
ChIef Strategy Officer,
making India a common market. This will lead to an increase in India’s
GATI – KWE
Tax-to-GDP ratio. Also, as per the National Council of Applied Economic Research report, it is expected to increase economic growth by 0.9 to 1.7 per cent. Also, there will be rise in exports by 3.2 to 6.3 per cent. The average tax burden will fall on India Inc with the implementation of GST. Highlighting some of the factors, Singh says that many foreign retailers
Benefits of GST
that already had presence in retail (cash and carry business) in India before this announcement (100 per cent FDI in e-commerce) have started investing in various activities by working with the Indian government, in areas such as: Training and development so that skilled labour is available when needed
Building the back-end infrastructure by setting up warehouses, by making land available at reasonable rates, and
Engaging in private-public partnerships
42 india warehousing handbook - 2016
Role of Technology
“ In India, e-commerce related warehouses currently serve tier1 cities and to some extent tier 2 cities. The increase in e-commerce business has put additional pressure on warehouses, as they are expected to fulfill customer orders directly in addition to replenishing stores. These developments have added complexity to the warehouses and call for more advanced warehouse management systems (WMS) to sustain the new omni-channel paradigm.”
Neelam Singh, Senior Analyst, ARC Advisory Group
Increasing adoption of technology in operations is essential to keep up customer’s satisfaction. Technology solutions can range from robotic stock picking to software which enables workers to maximise space availability, through narrower aisle widths as well as more effective staff deployment. Although costly warehouse automation will continue to improve increase in popularity in order to achieve maximum efficiency. 2016 - india warehousing handbook 43
e s u o
h e r a W ntals 44 india warehousing handbook - 2016
e R
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2016 - india warehousing handbook 45
Warehousing Rent Rates (indicative) in different parts of India Region
South
Central
City Name
City Center
Direction from City center
Distance from City Center )km(
Warehousing Area
Indicative Rate (Rs./Square Feet/ Month) Covered Space
Open Yard
Bangalore
MG Road MG Road MG Road MG Road
East South West North
30 45 25 45
White Field Jigini Industrial Area Rajaji Nagar Bangalore North
30 45 25 45
30 45 25 45
Cochin
City Centre
City and Outskirts
30-10
City and Outskirts
12-7
4-2
Chennai
Nungambakkam
North
50
Redhills to Gummudipoondi )Thiruvallur Dist(
25
9
Nungambakkam
South
35
Tambaram outer, Sitalabakkam
25
NA
Nungambakkam
West
40
Sriperumpudur, Poonamallee, Numbal
25
NA
Bhopal
MP Nagar MP Nagar MP Nagar
East West North
10 17 18
Govindpura Bypass Road Mandideep Road
14 13 11
5 4 5
Indore
City Centre
City and Outskirts
10-30
City and Outskirts
7-12
2-4
46 india warehousing handbook - 2016
Region
North
City Name
Direction from City center
Distance from City Center )km(
Warehousing Area
Indicative Rate (Rs./Square Feet/ Month) Covered Space
Open Yard
Raipur
City Centre
City and Outskirts
10-30
City and Outskirts
7-12
2-4
New Delhi
Connaught Place
South
20
Okhla
30
7
Connaught Place
North
32
Alipur/Narela
25
5
Connaught Place
North
35
Munda
25
5
Connaught Place
North
33
Bakoli Village
15
2
City Centre
East
25
Ramgarh Road
15
4
City Centre
North
15
V.K.I. Area
17
6
Lucknow
City Centre
City and Outskirts
15
City and Outskirts
18
4
Meerut
City Centre
City and Outskirts
10-30
City and Outskirts
7-12
2-4
Kolkata
Khidirpore )Port(
West
18
24
7
Jaipur
East
City Center
Kolkata Port
2016 - india warehousing handbook 47
Region
East
West
City Name
City Center
Direction from City center
Distance from City Center )km(
Warehousing Area
Indicative Rate (Rs./Square Feet/ Month) Covered Space
Open Yard
Haldia
South
120
Haldia dock
19
6
Falta
East
49
Falta Industrial Area
18
5
Dankuni
North
27
Dankuni Industrial Zone
16
6
Bhubaneswar
City Centre
City and Outskirts
0-30
City and Outskirts
7-15
2-4
Mumbai
Nariman Point
City
0-30
Mumbai
45-75
18
Mumbai
Nariman Point
East
45-75
Bhiwandi/Panvel/ Taloja
21-24
5
Mumbai
Nariman Point
North
75
Vasai
14
5
Ahmedabad
City Centre
City and Outskirts
10-30
City and Outskirts
20
4
Pune
City Centre
City and Outskirts
10-30
City and Outskirts
12-15
4
Nagpur
City Centre
City and Outskirts
10-30
City and Outskirts
12-15
4
Kolkata
* The above rates are only indicative based on our survey. There may be deals done at a better price * 48 india warehousing handbook - 2016
Courtesy: Passion for Logistics
Ongoing Rentals Across Major Cities in India Submarkets
Industrial Rents INR/ sft/month
Warehousing Rents INR/ sft/month
DELHI NCR Mundka
20-30
Alipur
15-25 13-20
Near Airport/Dwarka
20- 30
20-35
Okhla/Mohan Cooperative
30-100
30-100
30-100
25-60
Central Delhi
NCR-UP Noida Phase-1
25-30
35-40
Noida Phase-2
15-20
15-18
Noida Phase-3
15-25
20-30
Greater Noida
15-22
Ghaziabad
13-20 2016 - india warehousing handbook 49
Submarkets
Industrial Rents INR/ sft/month
Warehousing Rents INR/ sft/month
NCR-Haryana Faridabad
18-22
17-25 11-14
Hasangarh Kundali
18-22
11-16
Palwal
14-15
13-15
Ballabhgarh
16-18
16-18
Bawal
15-18
12-14
Gurgaon Udyog Vihar
20-55
20-45
IMT Manesar
14-25
14-18
Hero Honda Chowk
15-22
Sohna Road
17-25
Gopalpur
14-16
50 india warehousing handbook - 2016
Submarkets
Industrial Rents INR/ sft/month
Warehousing Rents INR/ sft/month
GURGAON Faridabad
18-22
Hasangarh
17- 25 11-14
Kundali
18-22
11-16
Palwal
14-15
13-15
Ballabhgarh
16-18
16-18
Bawal
15-18
12-14
NCR RAJASTHAN Bhiwadi
15-17
15-17
Khushkhera
14-15
14-15
Neemrana
14-16
14-16
mumbai Bhiwandi
17-20
13-15 2016 - india warehousing handbook 51
Submarkets
Industrial Rents INR/ sft/month
Warehousing Rents INR/ sft/month
MUMBAI Thane Belapur Road
30-35
25-32
Taloja Industrial Estate
20-30
20-27
Panvel
20-25
JNPT & Urana Road
17-23
Rasayani Patalganag Pen-khopoli Road
20-25
17-20
20-24
15-20
KOLKATA Bombay Road NH-6
13-20
Old Delhi Road - NH -2
13-18
AHMEDABAD Sanand
20-24
13-18
Changodar
25-27
15-20
52 india warehousing handbook - 2016
Submarkets
Industrial Rents INR/ sft/month
Warehousing Rents INR/ sft/month
AHMEDABAD Aslali
13-16
Kheda
13-15
BENGALURU Bommasandra
20-25
15-20
Bidadi IDA
16-20
15-20
Peenya IDA
25-30
Hosur Rd.
18-22
14-16
Whitefield
15-25
16-25
Nelamangala
15-18
15-18
CHENNAI NH4-Sriperumbudur -Oragadam SIPCOT
20-25
20-22 2016 - india warehousing handbook 53
Submarkets
Industrial Rents INR/ sft/month
Warehousing Rents INR/ sft/month
CHENNAI 18-20
20-22
Gummidipoondi-NH5
15-18
18-20
Red Hills-NH5
16-20
15-17
Ambattur
24-26
23-25
Poonamallee
25-30
Maraimalai
23-25
Sriperumbudur-Tiruvallur
20-23
HYDERABAD Medchal
12
Kothur
11
Moulali, Nacharam
17
Patancheru
13
Balanagar
15
Kompally Sanathnagar
13 16
Submarkets
Industrial Rents INR/sft/month Warehousing Rents INR/sft/month
HYDERABAD Gundlapochampally Shamshabad
11
11
PUNE Telegaon
25-27
18-20
Chakan
25-27
20-23
Pimpri Chinchwad Pirangut Hinjewadi Lonikand
28-32 23-25 34-36 25-28
28-32 13-15 34-36
Sanaswadi Ranjangaon Wagholi Transport Nagar Bijnor Road Nadarganj
22-25 20-23
12-14
Sitapur Road Compiled By
15-20 13-16 13-15 16-20 12-17 13-15 14-16
Supported By 2016 - india warehousing handbook 55
Warehousing
56 india warehousing handbook - 2016
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Bhiwandi and Panvel
M
umbai has been the country’s commercial capital for a long time. However, the structure of its economy has witnessed a rapid transformation during the last two three decades. With rising population
and increasing dominance of the service sector, industrial activity has shrunk drastically. While industrial activity in the region is receding, warehousing has flourished mainly on account of two drivers namely, consumption potential and port driven EXIM cargo movement. As a result, two warehousing clusters have developed viz. Bhiwandi and Panvel. Bhiwandi has long been a prominent textile hub on account of the largest number of power looms in the country. Being strategically located within the MMR, Bhiwandi is in close proximity to the large consumption markets of Mumbai, Thane city and Navi Mumbai. In addition, a thriving textile industry, availability of affordable land and labour were factors that contributed to the development of a warehousing eco-system in Bhiwandi. The other prominent warehouse cluster is the EXIM driven Panvel warehouse cluster. This cluster is dominated by industrial warehouses and Container Freight Stations (CFS) on account of its proximity to the country’s largest sea port, the Jawaharlal Nehru Port Trust (JNPT). The Panvel warehouse cluster on account of its proximity to the JNPT emerged as a suit-
58 india warehousing handbook - 2016
able warehouse hub for EXIM cargo that is mainly inbound.
BHIWANDI WAREHOUSING HUB
T
he Bhiwandi warehousing cluster is strategically located within the Mumbai Metropolitan Region (MMR). The warehouses are main-
ly concentrated on the Old Agra Road and the NH-3 (Mumbai-Nasik Highway). Kalher, Kasheli, Purna and Anjur on the Old Agra Road and the Mankoli to Padgha stretch of the NH-3 are the locations where warehouses are concentrated. On account of Bhiwandi’s strategic location with good connectivity to a large part of the MMR, occupiers intending to serve the MMR con-
sumption market prefer occupying a warehouse here. Bhiwandi is connected with Thane and Mumbai through the Old Agra Road and NH-3. It is connected with Navi Mumbai through NH-4 and the Thane-Belapur Road.
2016 - india warehousing handbook 59
Rent and Quality of Warehouses Most warehouses on Old Agra Road (Kalher, Kasheli, Purna) and Dapode Road are old developments with G+1 RCC structures that provide just 12-14 feet of vertical space for storage. These are primarliy dominated by occupiers from textiles, pharmaceutical and consumer durables. Occupiers from industries like consumer durables and electronics that carry high value fragile cargo and do not require large floor ceiling height prefer these RCC warehouses. Similarly, occupiers with a need for climate control through air coolers, for instance pharmaceuticals prefer these structures. 60 india warehousing handbook - 2016
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Panvel WAREHOUSING HUB The Panvel hub is dominated by industrial warehouses and Container Freight Stations (CFS) due to its proximity to the Jawaharlal Nehru Port Trust (JNPT). Logistics and warehousing activity in the Panvel cluster gained prominence with the growth of container traffic passing through the JNPT that was commissioned in 1989. The early nineties saw container freight stations and warehouses mushroom in the vicinity of JNPT as over half of India’s container traffic was being handled by this port. JNPT handled 57.91 million tonnes or 55.25 per cent of India’s total container traffic during 2012-13. Its dominance as the most viable port and Navi Mumbai’s accessibility to major manufacturing destinations across India via the golden quadrilateral makes it one of the most preferred logistics and warehousing destinations. Besides freight driven activity that demands logistics and warehousing facilities of a higher quality, the Panvel hub also contains warehouses that are plain vanilla storage structures. Such warehouses are concentrated around the Kalamboli Steel Market, Taloja MIDC and to a lesser extent along the Mumbai Goa Highway (NH-17) and the Mumbai Pune Highway (NH-4). 62 india warehousing handbook - 2016
The Panvel warehouse cluster is located close to JNPT and a bulk of its logistics and warehousing facilities are geared to service container traffic and break bulk cargo. The container freight stations are concentrated primarily on JNPT Road, NH-4 and NH-17 that branch out from Palaspe Phata. CFS facilities have also seen growth along Chirner Road that is a part of the Virar-Alibaug corridor and in locations such as Kalambusare, Koproli and Kacherpada just south of the JNPT. The JNPT Road is a 25 km stretch that begins at Palaspe Phata and ends at JNPT. It has the maximum number of CFS facilities among the three specified roads. The port handles cargo traffic mostly originating from or destined for Maharashtra, Madhya Pradesh, Gujarat, Karnataka, as well as most of North India. This warehousing cluster lies at the confluence of NH-17 and NH-4 that directly connect it with major cities in Maharashtra, Goa, Karnataka, Kerala, Andhra Pradesh and Tamil Nadu. While these highways directly connect JNPT and the Panvel cluster with the southern states, the NH-8, NH-3 and the NH222 connect them with Gujarat, Rajasthan, Uttar Pradesh, Madhya Pradesh and the National Capital Region through the northern ends of Mumbai. 2016 - india warehousing handbook 63
WAREHOUSING CLUSTERS IN PUNE Historically, Pimpri-Chinchwad, Pune was developed as an industrial town with large production facilities of companies like Bajaj Auto, Forbes Marshall and Alfa Laval among others. However, with the city expanding and residential development gaining priority over manufacturing activity, the viability of existing industrial clusters in the city reduced. This led to the gradual exodus of industries to newer industrial areas where Maharashtra Industrial Development Corporation (MIDC) was allotting plots for carrying out manufacturing activities. Chakan in North Pune and Ranjangaon in North East Pune were developed by the MIDC as alternate hubs, since a large number of auto and auto ancillary and consumer durables companies established their manufacturing base in these locations. While companies like Volkswagen, Bajaj Auto, Mahindra & Mahindra and Bridgestone among others are located in Chakan, Ranjangaon is host to manufacturing facilities of FIAT, Whirpool, LG Electronics and Haier Appliances among others. With vacant land slowly getting exhausted here, the MIDC developed an alternate industrial area in Talegaon situated in North West Pune that has companies such as General Motors, JCB and INA Bearings.
T
he development of three large MIDCs in the northern region
ually developed in Pune is the Sanaswadi- Shikrapur belt. This is also
of Pune has led this belt to being commonly referred to as
situated in the north-eastern part of the city where manufacturing
the manufacturing hub of Pune. It is also referred to as the
units of companies like John Deere, Tranter and Yamazaki Mazak are
Auto Hub due to the presence of a large number of auto &
located. Since this industrial cluster is not developed by the MIDC, it is
auto ancillary units. Another major industrial cluster that has grad-
64 india warehousing handbook - 2016
relatively small compared to the other clusters in Pune.
Rising land prices and non-availability of contiguous land within the above mentioned clusters have led to the emergence of Shirwal in South Pune as an alternate manufacturing hub and many companies have already shifted their base here. Although this cluster is not developed by the MIDC, leading manufacturing companies such as Godrej & Boyce, Alfa Laval and Finolex among others have shifted here. Going forward, more companies are expected to consider this location due to the relatively lower cost of land. The development of these manufacturing hubs seeded the growth of the warehousing industry in Pune. Chakan emerged as the preferred location among warehouse occupiers due to its proximity to multiple MIDCs and easy connectivity with Mumbai and Nashik. Alternatively, Wagholi in North East Pune gained prominence as a warehouse destination due to its proximity to Pune city centre and the manufacturing hub of Sanaswadi. However, with the rapid urbanisation of East Pune and residential development gaining priority over warehousing activity, Wagholi has been witnessing a gradual exodus of warehouses towards the Lonikand Sanaswadi belt. This belt is located 8 - 16 km further east of Wagholi on the Pune-Ahmednagar Highway. Hence, currently Pune has two established warehousing hubs with Chakan in the north and the Wagholi- Lonikand-Sanaswadi belt in the north east. 2016 - india warehousing handbook 65
CHAKAN WAREHOUSING HUB
W
arehousing activity in the Chakan cluster is primarily dominated by industrial warehouses. The presence of a large
number of automobile manufacturers requires vendors to either set up their manufacturing unit here or have a warehouse in proximity in order to ensure uninterrupted supply. Additionally, most of these auto companies follow the Just-in-Time (JIT) concept of production that necessitates their vendors and suppliers to be able to deliver at a very short notice. A short notice could be as little as 3-4 hours of window for delivery. This ensures constant demand for warehousing from companies that either do not have a production unit nearby or the amount of space in their plant is insufficient for storage. Another type of warehousing
66 india warehousing handbook - 2016
that is prominent in the Chakan belt is service parts distribution centre of
Location
capital goods companies. These are the companies that supply heavy ma-
The concentration of manufacturing activities around Cha-
chinery to other manufacturing companies that use them for further pro-
kan has led to the development of this region as a warehousing
duction. As any breakdown in such heavy machinery due to the normal wear
hub. The Talegaon-Chakan Road, that is connected with the old
and tear can disrupt the production schedule, it becomes essential for these
Mumbai-Pune Highway (NH-4) on the west and the Pune-Na-
capital goods manufacturers to supply the spare parts within a minimal time
shik Highway (NH-50) on the east, has witnessed development
frame. This warrants a service parts distribution centre in the vicinity of such
of numerous warehouses. Additionally, the stretch from Moshi to
clusters, in order to maintain the steady flow of supply of such replacement
Chakan on the Pune-Nashik Highway (NH-50) has also attract-
parts.
ed several warehousing companies. 2016 - india warehousing handbook 67
WAGHOLI-LONIKAND
AND SANASWADI WAREHOUSING CLUSTER Historically, warehousing activities in Pune have been concentrated in Wagholi with a large number of warehouses mushrooming here post 1995. These warehouses were primarily serving the Pune consumption market acting as the regional retail distribution centres. Since most of the development around Wagholi happened before 2005, the area is dominated by RCC type structures with poor supporting infrastructure and amenities. Most of these warehouses are owned/operated by local players and are much smaller in size compared to those in Chakan or Bhiwandi. Post 2005, Wagholi witnessed large scale residential development due to its proximity to the city centre and employment hubs of Kharadi and Hadapsar. Capital value of residential projects in Wagholi has appreciated substantially during last five years with the ongoing quoted rate hovering around 3,500 - 4,200/ sq ft making it much more remunerative for land owners to opt for residential development instead of warehousing. Such a trend has resulted in a gradual exodus of ware-
68 india warehousing handbook - 2016
houses further east on the Pune-Ahmednagar Highway towards Lonikand and Sanaswadi. Lonikand and Sanaswadi are home to a large number of engineering and auto ancillary companies and these markets are slowly emerging as alternate warehousing clusters to Wagholi. Lower land prices, absence of residential development and presence of manufacturing majors like John Deere, Tranter, Kalyani Forge and Comau India among others have attracted the interest of warehouse developers/ occupiers. The warehouses located here are a mix of industrial warehouses and retail distribution centres.
Location The Wagholi-Lonikand-Sananswadi, Maharashtra warehousing cluster is located in the north eastern part of Pune along the Pune-Ahmednagar Highway more commonly referred to as the Nagar Road. Warehouses are scattered across the entire 16-20 km stretch starting from Wagholi till Sanaswadi. However, Wagholi, Lonikand and Sanaswadi have the highest concentration of warehouses along this belt.
2016 - india warehousing handbook 69
g n
i s u o ESIGN h e D
r a W 70 india warehousing handbook - 2016
in 2016 - india warehousing handbook 71
PEB
Smarter Option in Warehousing One revolutionary concept in the construction sector was the advent of PreEngineered Buildings. In case of a PEB, fabrication is completed in a controlled environment with the help of latest technology, and subsequently, erection is carried out. PEBs offer arguably best solution for all those who look forward to provide an attractive, functional, flexible and sustainable warehousing facility.
Source: Cold Steel Corp
72 india warehousing handbook - 2016
PEBs are pre-designed into standard sizes, spans and heights, and use standard details for fixing cladding, roofing, gutters, doors, windows, etc.
Vikas Kaushal Sr. Vice President-Sales & Marketing, Interarch Building Products Pvt Ltd
Off-site fabrication possibility of manufacturing buildings/structural components using steel and its recyclable characteristics makes steel more sustainable, clean and green, as against cement, concrete, brick, wood or any other material of construction available to the mankind till date.
PEB construction is 30 to 40 per cent faster than masonry construction. Pre-Engineered Building systems can provide real value to warehouse constructors without sacrificing durability, resistance or aesthetic appearance and also offer cost savings.
The concept of Pre-Engineered steel buildings, well-established in North American and European countries, is presently making inroads into the commercial, industrial and residential segments in India.
Applications of Pre Engineered Buildings (PEB) WAREHOUSES
FACTORIES
WORKSHOPS
OFFICES
GAS STATIONS
VEHICLE PARKING SHEDS
SHOWROOMS
AIRCRAFT HANGARS
METRO STATIONS
SCHOOLS
RECREATIONAL
INDOOR STADIUM ROOFS
OUTDOOR STADIUM CANOPIES
BRIDGES
RAILWAY PLATFORM SHELTERS
2016 - india warehousing handbook 73
Pre-Engineered steel building manufacturers have no dependency on the availability of standard sections from steel mills and can build and fabricate exact design sections. themselves, eliminating any scope for over-design or wastage. PEBs are in great demand in the warehousing sector at present. Logistics companies have realised the potential and continue to use PEBs to its fullest. The PEB market is generally associated with investment and growth in the industrial and commercial sector, and it would not be an exaggeration to say that the PEB industry has acted as a catalyst in the infrastructural development of the country. PEB designs are based on the synergy existing between various elements, and every element is assumed to brace the other element, thereby providing an overall stiffness.
74 india warehousing handbook - 2016
D RAJU MD, Kirby Building Systems India Pvt Ltd
Warehousing companies look for PEB as an ideal solution for their building requirement as design, cost, quality, delivery, etc., are some of the major factors which play a very important role in their overall project execution. All the Kirby buildings are customised as per the client’s requirement and are optimised to provide the customer with the most optimal cost.
The steel used in PEB warehouses is highly tensile and strong enough to ensure safe storage of goods. The clean finishes of rooftop and smooth walls can provide better clarity for CCTV coverage, thus ensuring high-tech security. Manish Garg President & Chief Executive-Steel Building Business, Everest Industries Limited
PEBs were adopted very early in warehousing segment and continue to rule the roost. Logistics companies have realised the potential and continue to use PEBs to its fullest.
PEBs, due to abbreviated mass, downplay the impact of earthquakes and have the potential to resist lateral loads stimulated by wind or earthquake. Therefore, it can be said that PEBs are most resistant to natural calamities as compared to any other form of construction.
2016 - india warehousing handbook 75
Material Handling Holds Promise for Warehousing Sector 76 india warehousing handbook - 2016
Source: Gandhi Automobiles
"I would like to emphasise on the fact that Material Handling Equipment industry is still in a nascent stage in India. If you look at China, the business volumes are 25-30 times greater than the current levels in our country."� Ajay MandahR, Director-Operations, Toyota Material Handling India
Material handling deals with equipment related to the movement, storage, control and protection of materials, goods and products throughout the processes of manufacturing and distribution. The size of the Indian MHE industry is estimated to be approximately `5,000 crore, and is likely to grow 20 per cent year-on-year in the next five years. 2016 - india warehousing handbook 77
"Many a times, flexibility in the storage layout is also overlooked causing extra spend in the material handling equipment. Bringing down the initial cost of acquisition and creating a more flexible material handling process remains a challenge for most organisations."� Rahul Sagar, AGM-Marketing, Maini Materials Movement
Up-to-date material handling system helps to empower distribution and manufacturing facilities. Material handling has become a new, complex, and rapidly evolving science. In the MHE space, people are going for the latest generation equipment which are high on safety and productivity, more reliable, durable, and fuel efficient and have minimal environmental impact. Efficient and right material handling aligns the warehouse to the business requirement. Some key catalysts predicted to drive the growth of material handling in industry in the next few years are: >> Upskilling of manpower >> Increasing the level of efficiency and productivity >> Safety and environmental considerations. The general trend in the MHE industry in our country is towards increased automation, that in turn, leads to safety. 78 india warehousing handbook - 2016
The primary objectives of material handling are to: l Increase efficiency of material flow l Improve facility utilisation l Improve safety and working conditions l Facilitate the manufacturing process
The three fundamental types of material handling equipment are: Loading equipment: This type of equipment aims to provide the facility to load and unload vehicles. Lifting and Transport Equipment: This type of equipment is used to move the product around the production facility, from loading bay to storage, from storage to production, around production, from production to storage and finally from storage to loading bay. Storage Equipment: As the name suggests, it is used to store materials, components and assemblies. l Automotive and other companies are now outsourcing their material movement (both in-house & distribution) to specialist players.
Source: Maini Material Movement Pvt Ltd
2016 - india warehousing handbook 79
Dock levelers Modern Warehouse Integrated System
80 india warehousing handbook - 2016
Dock levelers are an important part of your dock equipment and material handling system. They are an essential element in the modern warehouses. It is an actual bridge between the loading area and the vehicle, so as to balance out all the difference in height and distance. Here we will find out how dock levelers enhance safety and productivity by avoiding multiple handling of the loads in warehouses. In simple terms, a dock leveler acts as a bridge between the warehouse and truck (container). Dock levelers, used in loading dock or loading bay, is an area of a building where goods vehicles (usually road or rail) are loaded and unloaded. They are commonly found in commercial and industrial buildings and warehouses in particular. According to Rajesh Sikka, Managing Director, Metaflex Doors India Pvt Ltd, “In warehouses, dock levelers are used to facilitate safe and efficient loading and unloading of materials. A dock leveler makes sure that the vehicle height should reach the height of platform and then its lip rests on the platform. This enables smooth and quick unloading/loading of material.�
2016 - india warehousing handbook 81
Rajesh Sikka, Managing Director, Metaflex Doors India Pvt Ltd
In warehouses, dock levelers are used to facilitate the safe and efficient loading and unloading of materials. Dock leveler makes sure that vehicle height should reach the height of platform and then its lip rests on the platform. This enables smooth and quick unloading/loading of material.
Helps in Smooth Functioning of Warehouses Different kind of dock levelers are available for different purposes for the smooth functioning of the warehouses. Kartik Gandhi, Director, Gandhi Automations Pvt Ltd says, “There are many types of dock levelers like Radius Lip Dock Levelers, Telescopic Lip Dock Levelers, Edge of dock leveler, Hydraulic dock leveler etc. Hydraulic dock leveler is very useful in maximising efficiency of warehouse. The manual loading and unloading of goods becomes limited with the help of dock leveler.” An organisation can reduce waiting time for container, increase efficiency and safety can also be achieved, resulting in the smooth functioning of warehouses. Adding information on the usage of dock levelers, Sikka avows, “ Metaflex offers majorly two types of dock levelers- swing lip and telescopic lip. Both are hydraulic levelers. The swing lip dock leveler is operated with only one push button, by keeping the push button pressed, the platform will go up from its rest position, when the highest position is reached, the lip will move out. When the push button is released, the platform and lip will descend automatically to the level of the vehicle bed. During loading and unloading, the suspension of the vehicle is automatically followed by the leveler. Another type of leveler is telescopic lip, which is less prevalent in India in comparison to European markets. The telescopic lip is powered by a separate, double acting cylinder. The hydraulic system is completely closed and cannot be affected by dust or dirt, even in the most extreme conditions.”
82 india warehousing handbook - 2016
Kartik Gandhi, Director, Gandhi Automations Pvt Ltd
“Many MNC’s have started setting up plants and warehouses in India, they understand the necessity of automation in manufacturing unit and warehouses. Loading and unloading of material from can be done quickly. Lot of pharma companies and manufacturing units have understood the usefulness of dock leveler.
Key Factors of Dock Levelers The Dock Leveler is placed at the exterior of the building in a loading bay.
It is a bridge between the loading area and the vehicle, so as to balance out all the difference in height and distance. Dock levelers correct height differences between loading docks, loading platforms and truck or trailer beds.
Dock levelers are available in a comprehensive range of dimensions, loading capacities, as well as a range of construction interface possibilities. They enhance safety and productivity by avoiding multiple handling of the loads.
Various load carrying capacities. 2016 - india warehousing handbook 83
How Prevalent in Indian Warehouses? Many multinational companies have started setting up plants and warehouses in India. They understand the necessity of automation in manufacturing unit and warehouses. Gandhi pinpoints the relevance of dock levelers and its prevalence in the logistics sector today. He says, “Loading and unloading of material from dock leveler can be done quick-
The manual loading and unloading of goods becomes limited with the help of dock leveler.
ly. Lot of pharma companies and manufacturing units have understood the usefulness of dock leveler. Indian manufacturing companies also have understood the importance of dock leveler and the efficiency it can provide for warehouse operations.” Adding more information on the Indian market scenario of dock levelers, Sikka avows, “The large chunk of demand comes from the organised market, there are lots
Safety is a major concern for warehouses in India and dock leveler ensures safety of the employees in the warehouse. Dock levelers correct height differences between loading docks, loading platforms and truck or trailer beds.
of logistics centers and infrastructural facilities coming up which are further adding up to the market for complete dock solutions. Another fuelling of demand is coming from mega food parks and SEZs. This trend is still to be seen in unorganised market but we are hopeful that the demand will rise for dock levelers, keeping in mind the rate at which market is growing and evolving.”
84 india warehousing handbook - 2016
The large chunk of demand comes from the organised market, there are lots of logistics centers and infrastructural facilities coming up which are further adding up to the market for complete dock solutions.
Ensuring Safety Safety is a major concern for warehouses in India and dock leveler ensures safety of the employees in the warehouse. Sharing the kind of safety maintained by them, Sikka says, “Metaflex Dock Levelers are designed in such a way that we keep safety as the No.1 design feature. The platforms and lip of our dock levelers are made of high quality tear plate. Depending on the width, the platform is reinforced with 8-10 profiles. These profiles allow the platform top to twist and compensate for vehicle tilt caused by off-set loads within the vehicle. The lip will always remain in contact with the vehicle bed. The compact hydraulic power pack is positioned under the platform to prevent it from any possible damages. All these characteristics ensure a safe hydraulic system with a long life span and a minimum of maintenance. In our nine years of operations in the market, no accident has been reported so far.” Gandhi also shares his tale, he says, “Dock leveler acts as bridge between the loading bay area and container, if you are loading and unloading in a traditional way or without rigid support (which our dock levelers provide), there is always a danger of mishap. Gandhi Automations Dock leveler is easy to operate and we follow international standards while manufacturing and installation of the same. Since it has a firm base, goods can be loaded and unloaded easily and operation is so simple that even unskilled labour can perform it easily.” Therefore dock levelers add value in the warehousing system. It helps in the better, faster and smoother operations with effective results without compromising on the safety, stability and efficiency. 2016 - india warehousing handbook 85
VERTICAL DEMANDS 86 india warehousing handbook - 2016
Nowadays, experts are working with smart automated warehouses equipped with world-class technology and infrastructure. At some places, robots have taken over manpower to ensure speed and zero damage possibility. On the same lines, special warehouses for pharmaceutical products have sprung up as these products require adequate storage and handling
Pharma Warehousing: One Mistake Can be Fatal
88 india warehousing handbook - 2016
Pharmaceutical warehouses need high security and are equipped with CCTVs, fire hydrants and sprinkler systems with automated smoke detectors. Substantial efforts are made to imbibe a culture of ‘Safety First,‘ along with a focus on health and the environment. Starting from location mapping and management, automated goods receipt and inward process, FIFO facilitation for storage and order picking through automated handheld / RFID devices, etc., are some of the best practices. The transportation charges offered by some of the players in this sector leave little scope for offering an appropriate transportation solution for pharmaceutical products in India. The trade, too, does not wish to incur commensurate costs to avail an efficient transportation system for their produce. This
In all aspects of warehouse management, technology is the key
myopic outlook of the pharmaceutical industry, including the
enabler. Heading towards smart warehouses with use of tech
majors in this sector, when it comes to compromise in quality
devices for management, as well as reporting in real time, can be the
of transportation needs to be changed first.
best-suited model of efficient warehouse management. However, technology costs money and in the near to mid-term, this would be a cost or capital-intensive proposition. Key devices, from a pharma warehousing perspective, would be contamination protection devices, humidity indicators, temperature monitors and alarms, RFID (Radio Frequency Identification) devices for quick warehouse processing; product quality check equipment would go a long way in establishing an ideal smart warehouse. Apart from conventional storing services, warehouses now offer valueadded services like consolidation and breaking up of cargo, packaging, labeling, bar coding, reverse logistics, etc.
2016 - india warehousing handbook 89
SERVICES: Packaging (secondary packaging/co-packing/ promo-bundling/ kitting) facilitating postponement logistics
Database/visibility of inventory driven by stateof-the-art WMS/ TMS/ O2C systems
Database/visibility of inventory driven by stateof-the-art WMS/ TMS/ O2C systems
Quality assurance driven by GxP
90 india warehousing handbook - 2016
Chemical Warehousing
foresees boost in India
92 india warehousing handbook - 2016
To cater to the chemical sector and to boost the growth, initiatives are being taken by the industry to establish various chemical warehouses across the country. Chemical products involve high risk in handling and storing therefore, it requires highest level of safety. Chemical manufacturers, distributors, and LSPs operate chemical warehouses and make sure products are safe and managed well
Managing the warehouse and implementing the appropriate warehouse technology is a key ingredient in a business’ success and an essential requirement for Supply Chain Excellence.
Different classes of chemicals should be segregated which means, flammables need to be stored in a different zone than oxidizers, corrosives and so forth. Chemical warehouses need to be specially designed for safety and also to ensure waste streams are contained in case of an accident.
2016 - india warehousing handbook 93
Paramjit Singh Saini Director, Contract Logistics, Rhenus Logistics India
The most important aspects to be taken into consideration for chemical warehouse storage are the infrastructure, licenses to operate and trained manpower.
Of the utmost importance is EHS and quality systems and to check whether the chemical warehouses meet all required safety standards and are compliant with all norms of Pollution Control Board (PCB).
Chemical logistics demands specific elements like knowledge, experience and specialised equipments. When the product is corrosive, combustible, poisonous, and temperature-sensitive the challenge grows even tougher. So it is very important that chemical companies rely on strong logistics and transportations services.
94 india warehousing handbook - 2016
Zain Jawadwala Director, Alpha Cargo Express Pvt. Ltd
State-of-the-art facilities and latest technologies to handle chemical products with efficiency and safety in the chemical warehouses is in the interest of all concerned - right from the manufacturer to the buyer.
An accreditation for safety of storage, handling expertise, environmental norms would be a big plus for ensuring best practices at all times. This will enhance the facility stature from all the stakeholders’ perspective. Therefore, it is important for the logistics companies to get their chemical warehouses certified with quality, environment and safety accreditation. A modern chemical warehouse may have diverse range of tools, modern vehicles, special storage units, heavy-duty racking system, modern material handling equipment, temperaturecontrolled units, fire protection systems, spill control systems and other appliances. Such facilities ensure increase in the productivity and efficiency of the operation and reduce total landed cost. 2016 - india warehousing handbook 95
Temperature
Sensitive warehouses
96 india warehousing handbook - 2016
st
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98 india warehousing handbook - 2016
The Indian cold chain industry is regarded as the ‘Sunrise Sector’ since it supports many industries by providing storage and transportation for their raw, semi-processed and processed products to retailers and end-users. However, the current scenario reveals that there still remains a tremendous scope for the development of facilities which form the heart of the cold chain
COLD SHOULDERED ‘GOLD’ CHAIN I
ndia ranks first in milk production and is number two in fruit and vegetables production in the world, with a substantial amount of marine, meat and poultry products. Despite that, per capita availability of fruits and vegetables is quite low since the quality of a sizeable quantity of produce deteriorates by the time it reaches
the consumer
2016 - india warehousing handbook 99
Vishal Sharma Senior VP - Cold Chain Division, BOXCO Logistics India Pvt Ltd
"India's greatest need is for an effective and economically viable cold chain solution that will totally integrate the supply chains for all commodities from the production centres to the consumption centres."
1 a
Potatoes Vs Other Food Products Production is gradually rising due to diverse agro-climatic conditions and better availability of package of practices. Although there is a vast scope for increasing production, the lack of cold storage and cold chain facilities are major bottlenecks in tapping the potential. The cold storage facilities now available are mostly for a single commodity like potato, orange, apple, grapes, pomegranates, flowers, etc., which results in poor capacity utilisation. A report of PHDCCI states that a majority of India’s cold storages are fit only to store potatoes and not other food products.
100 india warehousing handbook - 2016
Rakesh Pachauri VP Marketing and Sales, Coldex Logistics Pvt Ltd
"In India, a majority of people still prefer fresh over stored or preserved products. Last but not the least, there is no revenue guarantee even after investing heavily."
The first cold store in India was
b
Multi-commodity cold storage facilities require different temperature conditions for different products and to fill up these multipurpose cold storages, it requires highly focused marketing efforts to get the desired efficiency. As a result, smaller companies prefer to set up single commodity storage facilities. The cold chain industry consists of several players, both organised and unorganised. However, some of these players are unable to invest much in the technology required to build high-quality cold storage facilities.
c
High cost of labour, power, building and maintenance is responsible for the lack of interest in investing in a warehouse. To a large extent, this can be resolved only by
reported to have been established in Calcutta in 1892.
government intervention.
d
It is a matter worth taking into consideration that a scientifically developed cold chain, that preserves the substantial quantity and high quality of food products of the country, has the potential to become a Gold Chain for the country.
2016 - india warehousing handbook 101
Mihir Mohanta General Manager, Supply Chain, Mother Dairy Fruit and Vegetables Pvt Ltd
"While potato cold stores at Agra typically remain idle from November till February, during the same period there is scarcity of stores for apple in Himachal and J&K. Similarly, cold stores of HP remain idle from March to August."
2 a
Uneven Distribution Surveys show that cold storages storing food items are located in merely a handful of Indian states. In February 2013, Assocham had indicated that the cold storage industry would grow by 25 per cent as compounded annual growth and reach `64,000 crore by 2017. However, with newer materials available in the market, every part of cold chain becomes amenable for improvement.
b
An overview of the cold chain system in India over the past 50 to 60 years shows that the cold storage construction technology of thermal insulation, refrigeration plant technology, automation and material handling have undergone significant transformation and offers much wider scope than in the past. Progressive entrepreneurs are seriously considering energy saving and observing the green cold chain concept.
102 india warehousing handbook - 2016
Dipankar De Partner, Dun & Bradstreet Tangram Advisory Services Pvt Ltd
The idea
"Potato processing is well-developed and a number of
of multi
corporates such as PepsiCo India and McCain Foods
product,
India Ltd have invested in the processing of potatoes."
multi chamber
b
It is heartening to note that the government has taken initiatives through bodies like NHB, to establish standards for all the arms of the cold chain. Efforts are also being made to evolve a new concept – ‘Green Cold Chain’.
c
Government agencies like National Horticultural Board, National Horticultural Mission and Ministry of Food Processing have also offered higher financial incentives for new projects as well as for expansion of existing units. However, these projects have to be essentially based on modern and efficient technology.
c
It is a matter worth taking into consideration that a scientifically developed cold chain that preserves the substantial quantity and high quality of food products of the country, has the potential to become a ‘Gold Chain’ for the country.
cold stores was introduced in the sixties, with Maharashtra taking the lead.
2016 - india warehousing handbook 103
Importance of Insulation in Warehousing Today, insulation is of utmost importance for warehouses. Apart from maintaining and regulating temperature, it also helps to increase the shelf life of the products and maintains a conducive and comfortable work environment for the workers in a warehouse.
104 india warehousing handbook - 2016 104 CArgoconnect Warehousing HandBook - 2016
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Uses
Traditional Materials
Insulation is used for concrete buildings and residential buildings which
The traditional materials that were used in insulation were rock wool and
will help in power saving. It can also be used in factory buildings, phar-
glass wool. Prior to that, wood shavings and straw was used for insulation.
maceutical industry, poultry, stadiums, swimming pools, manufactur-
MODern Materials
ing units, hospitals, schools, etc. Any insulation product should match
The modern materials for insulation are rubberised foams, bubble
the requirement of the building. In a warehouse, the requirement is
wrap sheets and reflective materials which are top of the line. One of
that it should be flame proof, waterproof and easy to handle. It should
the best known insulators in the world is the reflective insulator.
be thin and easy to store, transport and easy to repair in case of dam-
Thermal Insulation Materials
ages.
It consists of Thermal Insulation, PEB Insulation Material, Exhaust
1. Asbestos Roof Sheet
Pipe Insulation Wrap, Heat Insulation Materials, etc. These products
2. Ceiling
are used for increasing the thermal resistance and stops unwanted
3. Cold Room
temperature transmission of heat gain or loss.
4. Concrete Roof Sheets
Features:
5. Ducting
1. Robust design with complete perfection
6. Live Stock
2. Dimensional stability leads to easy installation
7. Metal Roof Sheet
3. Provided in application specific design
8. Pipes
4. Can be installed without any hassle
9. Refrigerated Containers
Future of Insulation
10. Under Deck
The future of the industry is very bright. There is a lot of awareness
11. Under Floor
among people regarding the benefits of insulation. Insulation has be-
12. Vertical Wall
come a necessity as it helps to increase the productivity and comfort level of workers in a warehouse.
106 india warehousing handbook - 2016
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Guest Column
Warehousing Mega Trends and Opportunities
O
ver the next decade, nearly 20 markets
ize the differences between such logistics hubs. The
worldwide are set to emerge as global
core of this international trade is the flow of goods
logistics hubs, according to CBRE’s re-
through supply chains that connect raw materials,
search in the global industrial and logis-
production and delivery to consumers worldwide.
tics space. While the current global hubs
Infrastructure, accessibility, market size and busi-
will remain dominant in 2030, however,
ness environment are all integral factors to ensur-
several emerging hubs are set to rise in significance,
ing efficient supply chain flow. Logistics hubs are
regionally as well as locally, says a recent report
the main driving force behind industrial and logistics
from CBRE, Asia Pacific Logistics Hubs 2030. These
real estate markets,standing at the center of large
emerging Asian hubs include China’s Chengdu, Fu-
clusters of distribution facilities.
zhou, and Hangzhou; India’s Delhi NCR and Mum-
Spot light on Indian logistics centers as Minh City, among others. These Asian centers have emerging global hubs bai; South Korea’s Busan; and Vietnam’s Ho Chi
JASMINE SINGH, Executive Director National Head – Industrial & Logistics Services CBRE South Asia Pvt. Ltd.
108 india warehousing handbook - 2016
been increasingly growing in importance due to the
Consumption is a key driver of logistics demand;
shift in low-end manufacturing, rising consumption
and while the eastward shift of the middle class will
power, infrastructure and policy developments.
maintain the dominance of global gateway hubs, it
These emerging locations share similar char-
will also result in sprouting of new regional hubs to
acteristics, while improvements in infrastructure,
cater to the rising consumer class in Asia. Gateway
stronger population growth and additional trade
hubs in India namely Mumbai, Chennai, Ahmedabad
agreements between nations are helping to normal-
and Tuticorin — will have to increase their handling
Guest Column capacity as more goods flow into the region.
tions as well. The sector, moreover, has been at-
levels of foreign investments would be wel-
Moreover, fresh investments in new ports at
tracting considerable private equity investments
come for the Government’s recently launched
strategic locations, both to decongest the cur-
in recent times. Once the Goods and Services Tax
“Make in India” initiative as well. To this end,
rently overloaded ports of Mumbai as well as to
(GST) Bill is finally passed and key infrastructure
the passage of the pending GST Bill is of crit-
increase efficiency is needed, going forward.
projects delivered, it will spell an even better in-
ical importance.The Bill aims to create a single
nings for the sector.
tax regime by doing away with multiple central
Moving up to regional status, Delhi and Mumbai are expected to become regional hubs
and state level taxes such as the Central Excise Duty, Value Added Tax (VAT), Octroi, and
ulation growth, growing consumption power,
Policy and Regulations in the Logistics and Warehousing Space
rising income levels, and favorable Government
For achieving 10 per cent growth, India’s domestic
with a single taxation structure, GST will have
policies. India’s infrastructure spending is ex-
economy needs to attract added investor inter-
positive effects on individual as well as industry
pected to grow to accommodate its rapidly ex-
est, including that of overseas funds. Increased
taxation levels.
by 2030, due to a combination of strong pop-
luxury tax, among others. Once implemented
panding economy and population. The US$90 billion-worth Delhi–Mumbai Industrial Corridor (DMIC) is a keystone infrastructure project that aims to boost the manufacturing capabilities and logistics efficiency in India, connecting the large consumption base in the northern part of the country to the manufacturing centers of southern and western India. The industrial and logistics sector in India faces significant growth potential, especially with the entry of several major global firms alongside domestic players in this arena, in the wake of e-Commerce and start-up firms flourishing in the country. Sector players in this space have not only established themselves in the top tier cities, but have spread to tier II loca2016 - india warehousing handbook 109
Guest Column On the individual front, it will make products and
wards consolidating their facilities according
services cheaper, because the cascading effect
to their specific business needs, instead of
of multiple taxes from the levels of manufactur-
being driven by regulatory concerns. Along
ers and wholesalers that is ultimately borne by
with the recently relaxed guidelines on For-
end-consumers will be avoided. This move may
eign Direct Investments (FDI), the likely pas-
incentivize more consumption in the market from
sage of the GST Bill may prompt large scale
consumers, injecting overall economic growth in-
foreign investments and sustainable growth
cluding in the retail and logistics sectors.
of the country’s built environment, includ-
From the point of view of the industrial and logistics
estate
Government’s “Make in India” initiative
segment, a unified GST
also would receive a significant boost
would
real
ing warehousing and industrial space. The
allow
industry
players to surmount regu-
from this move. The recent Union Budget 2016, however, remained tight lipped
latory restrictions and focus
on the implementation of the GST
on consolidation of industri-
Bill, which is a key legislation impact-
al and warehousing space for
ing the logistics sector; although it
maximum operational efficiencies.
had many positive provisions for the
Under the current regime, wherein
real estate sector in India.
indirect taxes are levied by the Central as well as State Governments for the storage and transportation of goods, logistics and warehousing firms are forced
All-time high demand trends for industrial and warehousing space in 2015
to locate their facilities in regions to best ac-
An improving domestic economy and leg-
commodate multiple tax structures. Players
islative reforms have been encouraging an
often end up paying higher rentals because in-
increasing number of foreign firms to es-
dustrial/warehousing locations with lower rental
tablish their manufacturing bases in India.
rates also pose various regulatory hindrances.
Warehousing and food storage service pro-
Once the Bill is implemented on ground,
viders have expressed particular interest in
such industry players are likely to move to-
serving the growing industry needs of the
110 india warehousing handbook - 2016
Guest Column country. The entry of multiple global brands may
The largest demand drivers seeking warehous-
help raise the existing technological know-how
ing space were 3PLs during 2015. With close to 2.9
in the field here to global standards, and create
million sq. ft. of space being leased by 3PL compa-
more employment opportunities in the sector.
nies, the sector led demand for industrial and logis-
Approximately 10 million sq. ft. of industrial and
tics space throughout the year. The Delhi NCR and
warehousing space was taken up across India
Mumbai led demand for industrial and warehousing
during 2015. Healthy demand was noted from
space in 2015, followed by Bangalore and Chennai.
traditional as well as emerging sectors, translat-
Delhi NCR and Mumbai witnessed the bulk of logis-
ing into a year-on-year (y-o-y) growth of nearly
tics space transactions, constituting close to 50
40 per cent. The Government’s announcement
per cent of the total space take-up across leading
during recent quarters on infrastructure devel-
cities in 2015. Bangalore and Chennai were among
opment being top priority, as well as its focus on
the other leading cities on the radar of industrial
the execution of stalled projects also helped to
and warehousing space occupiers during the year.
drive growth. Going forward, healthy leasing ac-
Select micro-markets of leading cities saw a rent-
tivity is expected from traditional demand driv-
al rise in industrial and logistics real estate space
ers, along with large sized space take-ups from
during H2 2015. Healthy demand levels amid limit-
emerging industrial/warehousing space occupi-
ed availability of quality assets led to rental value
ers such as e-Commerce players.
appreciation in select micro-markets. Large urban
Currently demand in this space is primari-
centers such as Delhi NCR, Mumbai and Bangalore
ly driven by third party logistics (3PL) firms and
are likely to continue to remain the major hubs for
the e-Commerce segment, even as demand
retail distribution centers; while Pune and Chen-
for logistics and warehousing space was main-
nai are likely to see healthy demand for industrial
ly concentrated in the Delhi National Capital
warehousing. Furthermore, with the implementa-
Region (NCR), Mumbai and Bangalore. Inter-
tion of GST, certain locations may witness a spill
estingly, select 3PL and express transportation
over in demand due to the sheer cost advantage.
companies took up spaces exclusively to cater
GST and a thriving e-Commerce segment are ex-
to online retailers, indicating the prominence of
pected to play a pivotal role in shaping the fu-
e-Commerce as a dominant driver of warehous-
ture growth trends of the warehousing sector over
ing / logistics demand across the country.
forthcoming months. 2016 - india warehousing handbook 111
Guest Column
E-tail warehousing demand set to treble
112 india warehousing handbook - 2016
CRISIL Research says mushrooming fulfillment centres are adding to the intensity.
A handbook on Warehousing- packed with information, data, trends, projections, views/articles by senior industry professionals, columns by leading research companies in an easy read format. Hardbound, aesthetically designed with superior publishing quality.
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Guest Column
W
arehouses are turning even
requirement was estimated at seven million
hotter as e-tailing
square feet.
(online market-
To cater to the rising demand and to main-
place) explode and compe-
tain customer service quality, players will have
tition
to invest in supply chains.
retail
and
online
drives
e-commerce
companies to offer highly
The warehousing requirement of an e-re-
customer-centric services. On its part, e-tail
tailer hinges on its business model. The e-re-
is benefiting from increasing internet pen-
tail market includes products sold through
etration, smartphone usage (with mobile
online marketplace (which dominates with an
apps), rising disposable income, demand and
estimated 65 per cent share in value terms as
consumer awareness.
of 2014-15) and online retail. The online retail
The upshot is that CRISIL Research foresees
model has higher warehousing intensity com-
e-retail warehousing requirement surging at
pared to the online marketplace, as online re-
a compound annual growth rate of 45-50 per
tailers bear inventory risk. An online retail store
cent over the next three years. In 2014-15, the
typically purchases inventory (goods) and be-
By Binaifer Jehani, Director,
Warehousing intensity varies as per e-tail business model
Industry and Customised Research CRISIL Research
The online retail model has higher warehousing intensity compared to the online marketplace, as online retailers bear inventory risk. An online retail store purchases inventory and becomes reseller. 114 india warehousing handbook - 2016
Guest Column
comes a reseller. The reseller is usually required
ed near key consumption areas such as Mumbai,
smaller warehouses are set up near demand
to stock goods and assume inventory risk, re-
Chennai, Bengaluru, Delhi NCR and Kolkata, and
centres, which are termed as distribution cen-
sulting in high warehouse intensity.
span between 0.1 million square feet and 0.2 mil-
tres. These could span between 10,000 square
lion square feet.
feet and 50,000 square feet where the pri-
This provides online retailers flexibility in managing inventory and demand. Typical-
Online marketplace players source products to
mary work is to sort and forward orders. These
ly, they adopt a hybrid model by stocking
fulfillment centres either through their in-house
warehouses are generally confined within state
fast-moving products and sourcing other prod-
logistics arms or third-party players, and perform
boundaries, as opposed to fulfillment centres
ucts based on demand. For example, an online
quality and quantity checks. Upon receipt of orders,
that cover more than one state. With demand
fashion retailer typically maintains an inventory
products are packed and sent to customers direct-
growing rapidly and delivery times shortening,
of trendy fashion wear, but sources other ap-
ly or to distribution centres. As demand grows and
the thin line between a fulfillment centre and a
parel from distributors when an order is placed.
online marketplace players sign up more vendors,
distribution/sorting centre is fading quickly.
The hybrid model ensures a balance between service quality and investments. On the contrary, an online marketplace does not assume inventory risk – hence, does not have any warehousing requirement - and merely provides a platform for buyers (typically individuals)and sellers (typically companies) to transact and earns a commission. Players such as eBay, Askme and Bazaar follow this model. However, large online marketplaces players such as Amazon, Flipkart and Snapdeal have set up fulfillment centres to ensure quality and timely delivery of products. Fulfillment centres are large central warehouses that stock products across a large number of categories. They are primarily locat2016 - india warehousing handbook 115
Guest Column
MODERN WAREHOUSES: NEED OF THE HOUR
116 india warehousing handbook - 2016
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Guest Column businesses struggling to deal with higher volumes of product and inventory. A conventional warehouse can be little more than a liability, especially for businesses seeking a more flexible and efficient materials handling solution. Changing
business
dynamics
and
the entry of global 3PLs have led to the re-modeling of the supply chain, including logistics and warehousing services, in India. This has intensified competition for domestic players as well. In addition, the growing
A recent study shows that 70 per cent of all warehouses plan to expand their level of automation by 2018.
demand for better services at lower costs has led to the need of organised warehousing in the country. As a result, warehousing
the current warehousing needs.
players are now stressing on efficient in-
Despite its strategic importance
ventory management systems, with great-
in the Indian economy, scale of op-
er emphasis on value-added services such
portunities offered and its immense
as consolidation, labeling, packaging and
potential for growth, the Indian
re-packaging, bar-coding, distribution ser-
warehousing sector is faced with
vices, custom clearance service, customer
several challenges including the lack
arehousing forms a crucial link in the overall
service and reverse logistics. Automated
of sufficient physical infrastructure.
logistics value chain. Warehousing in India
warehouses offer a greater degree of flex-
The time lag between devising and
has been evolving rapidly from being tradi-
ibility, one which may allow businesses to
implementing strategies due to the
tional “godowns� - a mere four-wall-and-
handle fluctuations in material and inven-
lack of international warehousing
tory volume without issues that may pro-
standards, is another concern. High
A recent study shows that 70 per cent of all warehouses
duce a drop in output or efficiency. The or-
fragmentation and the dominance
plan to expand their level of automation by 2018. A con-
ganised sector has a minor market share,
of unorganised players due to var-
ventional material handling process can be difficult to adapt
but claims a major portion of the revenue
ious applicable taxes at the state
to new demands and changing situations, which may leave
and has been considerably increasing with
and central level are other issues
John Thomas Associate Director, Realistic Realtors
W
shed to modern setups with storage and handling points.
118 india warehousing handbook - 2016
Guest Column ity to different order profiles and lead to higher customer satisfaction, due to timely delivery of products. Quick response and access to information are other valuable advantages of a modern warehouse. Apart from these proper storage of SKUs, track and trace becomes easy due to organized stacking of the products and standardised procedures. The pull has come and will continue to come in the form of increasing consumer demand, the demand for better services, increasing product variety and higher responsiveness and all of this at lower costs. While the companies must modernise their supply chains, they will be increasingly constrained by the availability of modern warehouses which can support any modernisation effort. The situation does provide a great opportunity for enterprising developers to get the early mover advantage. However, the approach must lead towards a partnership model where the developer and the customer company enter in a trust-building exer-
plaguing the warehousing space. Indian play-
grading a conventional working process can
ers face challenges and bottlenecks at vari-
allow businesses to streamline efforts, utilise
ous stages of their operation life cycle. Some
digital inventory and supply management
of these challenges are strategic, while oth-
solutions and ensure supply-side solutions
active role. It needs to implement the policy reforms
ers are operational and need to be managed
to keep up with demand. It has been proven
with an increasing zeal and it needs to complete the
on an ongoing basis. In such a scenario, the
that modern warehouses can reduce the la-
large infrastructure development plans on time. The
sustainable growth of the warehousing sector
bour costs, can improve space efficiency and
onus is on the industry experts to understand and
depends on how effectively industry players
make quick and easy movements of SKUs
visualise the need of good quality warehouses, tan-
and the government can work together to ad-
with less pilferages and damages. A modern
gible and intangible benefits of the logistics parks,
dress challenges in the long term.
warehouse with latest technologies can im-
and take the necessary initiatives to ensure the
prove ergonomics and safety, provide flexibil-
required changes.
Creating a modern warehouse and up-
cise, sharing each other’s long-term objectives and expectations. The government, both at the national and the state levels, has to play an even more pro-
2016 - india warehousing handbook 119
Case Study
"
Warehousing & logistics central to the overall growth of business
"
Being in the grocery retail business Vipul Aggarwal, Vice President – Supply Chain, Bharti Retail Limited, strongly believes that supply chain plays a pivotal role in delivering top line and bottom line in this business, resulting in generating value addition for customers How important is the role of logistics and warehousing
ter revenues and at the same time, an optimised supply
for your overall growth?
chain helps in managing margins in an industry where
Easyday has a store base of 200 plus stores across eight
margins are wafer thin.
states with a plan to grow exponentially over the next
Vipul Aggarwal Vice President – Supply Chain, Bharti Retail Limited
three years. Warehousing and logistics is central to the
Is there any unique/specific strategy that you have
overall growth of the business. At Easyday, we co -create
adopted for a better supply of the products at the right
our warehousing and new store strategy to develop the
place at the right time?
most cost-optimised network model to serve our cus-
Strong planning processes, IT support and good ware-
tomers. Warehouse and logistics strongly impact both
housing and logistic practices are at the core to provide
the revenue stream and margin stream. We strongly be-
the right product at the right time in the right quantity
lieve that supply chain plays a pivotal role in delivering
at the right place. Along with a clear strategy, disciplined
top line and bottom line for the grocery retail business
execution is .at the strategy level. We believe in creating
and generating value for the customer. A good service
a dense footprint of stores within a geography which
level at the store helps in better sales and hence bet-
is supported by the Distribution Centre (DC) which can
120 india warehousing handbook - 2016
Case Study
serve this demand. Densification helps in reducing the challenges of a minimum order quantity from the supplier end as well as serving our customers at lower cost from the DC. At the tactical level, we have identified products by sale, pack size, forecast accuracy and vendor fill rate and have accordingly defined our inventory strategy at DC i.e. keep them flowing through or keep the inventory at the DC. How do you manage your warehouse and inventory management systems in terms of creating value for customers? Warehousing and inventory management systems play the most important role in creating value for customers. We work on Auto Replenishment System (ARS) which runs accurately if we have the right visibility of inventory at warehouses and stores. ARS helps us to keep the optimised inventory between DC and stores. At warehouse, we have Warehouse Management Systems (WMS) which helps in right allocation of stocks as per the defined priority, FEFO movement of stocks to store to keep freshness and handheld operations at every task of DC. ARS, along with WMS, are the two most important tools which keep the business running and deliver value to the customer. ARS and WMS help in optimised inventory, service levels at stores and freshness of the products, and hence an optimised supply chain with better inventory leads to creating value for customers. We follow the best in class IT infrastructure.
Warehouse and logistics strongly impact both the revenue stream and margin stream. We strongly believe that supply chain plays a pivotal role in delivering top line and bottom line for the grocery retail business and generating value for the customer. 2016 - india warehousing handbook 121
Case Study There are issues and challenges that every company faces during the warehousing process. How do you overcome them? Inventory accuracy, right allocation, picking efficiency and FEFO management are some of the key challenges for running smooth warehousing processes. Regular inventory audits with immediate corrections, strong algorithm in line with business requirement for allocation, right warehouse design and time study of picking and inbuilt IT tool to follow FEFO followed by daily FEFO audits, help in overcoming some of these challenges.
Retail industry, and in general, the need of the hour is continuous improvement and productivity without compromise on quality and service level. This can only be achieved through automated warehousing practices to manage your backend supply chain. Automated warehousing helps in making the supply chain processes more consistent, reliable and predictable. Tell us aout the significance of automated warehousing which is in trend in the overall supply chain process. Retail industry, and in general, the need of the hour is continuous improvement and productivity without compromise on quality and service level. This can only be achieved through automated warehousing practices to manage your backend supply chain. Automated warehousing helps in making the supply chain processes more consistent, reliable and predictable. Reliability, predictability and consistency are the key to deliver productivity and service.
122 india warehousing handbook - 2016 122 CArgoconnect Warehousing HandBook - 2016
Case Study
Apart from traditional storing services, warehouses now provide additional services such as merging and breaking up of cargo, packaging, classifying, bar coding, reverse logistics, etc. What are the value-added services that you look forward to during the warehousing of your products? Being in grocery retail industry, one of the biggest challenges we face is the right optimised inventory at stores. Suppliers provide big vendor packs whereas stores need smaller frequent supplies in EACHES which should mirror sales. There is a huge requirement of break pack and kitting units as per the store requirement Additionally, you need reverse logistics to redistribute the mismatched inventories or synergise your logistics network with supplier network. With the roll out of GST, there will be a uniform tax regime, and therefore, there is no longer the necessity of having a warehouse in every state where your firm operates. How will this simplify the building of warehouses for the companies? With GST, warehouses would be built in alignment with customer demand VS regulatory environment. GST will help in bringing up optimised mega warehouses with the right technology and innovation. With innovation and technology, it will drive productivity to the business and cut down on overheads. Kelley claims that their High Volume Low Speed (HVLS) fans are of world-class standard and are designed to address many critical aspects in the warehouses. Tell us your experience of using the HVLS fans. We have installed Kelley fans at two of our biggest DCs and found a satisfactory response from our operators at the warehouse. We are further planning to work with the Kelley team on how to build on some of the suggestions shared by our operators.
2016 - india warehousing handbook 123
Case Study
“GST will be a game changer for Logistics Industry� Established in 1957, Central Warehousing Corporation (CWC) is one of the biggest public warehouse operators in the country offering logistics services to a diverse group of clients. CWC operates over 448 warehouses across the country with a storage capacity of 11.17 million tons. Harpreet Singh, Managing Director, CWC in an exclusive interview with CARGOCONNECT discusses the current scenario of warehousing and logistics sector, increasing usage of smart automated warehouses, initiatives taken by the CWC for the development of industry, role of GST and effective ways to ensure minimum wastage of perishable products. What is the current scenario of warehousing rise which will require more preservation, storand logistics sector? Do you foresee any prog- age, warehousing and cold storage requirements. ress happening in the coming months for the Therefore, on a long term and medium term basis, industry as a whole? On a long term basis, the scenario of warehousing and logistics sector in the country is bright. How-
fected due to drought like conditions prevailing in many parts of the country currently. However, a
As far as warehousing capacity is concerned large ca-
good monsoon is predicted and this shall be good
pacities have been developed for storage of food
for warehousing and logistics industry as produc-
grains under PEG Scheme of the Government of
tion in the coming months appears to be on the
India. There is no shortage of warehousing space
and warehousing industry connected with international trade may be passing through a difficult phase due to international business scenario. Further, the storage requirement may also get af-
Managing Director, CWC
124 india warehousing handbook - 2016
try as a whole appear bright and promising.
According to the reports, lakhs of tons of perishable products get spoiled every year because of inadequate cold storage facilities and reefer vehicles. Since CWC supports logistics activities in agriculture sector, how do you ensure minimum wastage of perishable products?
ever, on a short term basis, especially the logistics
Harpreet Singh
the prospects of warehousing and logistics indus-
Case Study Efforts are on to collaborate with e-commerce companies with all India presence to provide them with warehousing space as per their requirement. This is a growing industry and association with e-commerce companies will stand CWC in a good position in the future. for storage of food grains on the whole. As far
and adoption of preservation techniques.
as perishables are concerned, a study has been
Today, warehouse experts are operating undertaken by National Centre for Cold Chain smart automated warehouses. What would Development under the Ministry of Agriculture. you like to comment on the warehousing CWC is also examining the report and seeing the design and working models used to operate feasibility of setting-up of cold storages as sug- warehouses at CWC?
to have some sort of automation. The same may not be applicable for warehousing of different commodities of different sizes for different customers and especially for agri-products. However, CWC has also undertaken a study on automation of food grain warehouses and is currently examining a report submitted by IIT, Delhi.
gested in the report at a few locations to begin
CWC is also going in for modern design ware-
with in addition to five centres being operated
housing with galvalume sheets, concrete roads
currently. As far as food grains preservation is
and truss less roof with ventilators to preserve
CWC are scientific and it is ensured that the
house is need based. For example, it may be fea-
Government of India is in the process of setting
losses are well within the permissible norms. This
sible for a warehouse attached to a particular
up of food grain Silos, which will help in storage
has been achieved through regular inspections
industry where sizes of packages are standard
of food grains with minimum losses in bulk and
Please elaborate on the recent initiatives taken by the CWC for the development of concerned, the storage techniques adopted by on energy. Automation of any particular ware- warehousing/logistics industry.
2016 - india warehousing handbook 125
Case Study also transportation of food grains in bulk. CWC is also setting up of Silos in some of its rail connected warehouses. The first Silo will be constructed on rail siding at Nabha. Further, possibility of setting-up of Silos at 2-3 other places is also being examined in consultation with the railways. CWC is also examining the possibility of owning/ leasing railway rakes to provide complete service from its terminals. This will enhance the revenue of the corporation considerably. CWC has been interacting with the farmers near its warehouses and educating them about modern warehousing and preservation techniques. Further, a Collection Centre for corn is being set-up as a pilot project in predominantly corn producing area with modern drying techniques which will increase the shelf life of corn and also result in reduced wastage to the benefit of the farmers. Efforts are on to collaborate with e-commerce companies with an all India presence to provide them with warehousing space as per their requirement.
How do you manage your warehouse and inventory management systems in terms of creating value for customers? For management of food grains in warehouses, Management and Information System is being set-up by FCI, of which CWC is also a partner. This shall be commissioned in the near future, which will cover online storage of food grains for FCI by CWC. We are also going in for Integrated Business Management Solutions for all its operations, which will also take care of inventory management in its warehouses. However, CWC has a robust system in place for inventory management, which gives value to customers through robust ISO Certified procedures. Complete operations are expected to be computerised within a year.
126 india warehousing handbook - 2016
Case Study
CWC’s first Silo will be constructed rail siding at Nabha. A Collection Centre for corn is also being set-up as a pilot project with modern drying techniques. How do you think GST will benefit Indian warehousing industry?
Apart from traditional storing services, warehouses now provide valGST will be a game changer as far as CWC is concerned. GST will result in ue-added services like merging and breaking up of cargo, packaging requirement for large warehousing space at centralised locations, where- etc. What are the value-added services offered by CWC? as small areas required in all states for the purpose of tax planning as is
The new business areas CWC has entered into is providing warehousing
currently the case. CWC has large warehousing space spread throughout
to e-commerce companies. As far as CFS business, CWC is also into Less
the country, which is its USP, to meet the requirement of companies that
Than Container Load (LCL), which employs merging and breaking up of car-
will require large centralised warehouses in the country after the GST is
go packaging and classifying, etc. However, in warehousing business, we
implemented. Therefore, CWC is well-placed in availing the opportunities
are providing storage and logistics services to the users, who undertake
that will be offered with the rollout of GST.
these operations. 2016 - india warehousing handbook 127
EXPERT 01
02
03
04
07
08
09
10
13
14
128 india warehousing handbook - 2016
15
16
05
11
17
06
12
18
09
Satyendra Lal, Head – India Supply Chain Management, FCA India Automobiles Private Limited
Kartik Gandhi, Director, Gandhi Automations Pvt Ltd 11 Zain Jawadwala, Director, Alpha Cargo Express Pvt. Ltd 12 Bruce Stubbs, Director-Industry-Marketing, Honeywell Sensing &Productivity Solutions 13 Sanjay Palsania, Chairman, SPG Enterprises
SPEAK
10
14 15
Aviral Jain, CEO & Director, Kanpur Logistics M Gurunathan, Senior Counselor, Advisory & Warex Certification, CII Institute of
Logistics states 16 17
Vipul Aggarwal, Vice President – Supply Chain, Bharti Retail Limited Vikas Kaushal, Sr. Vice President-Sales & Marketing, Interarch Building Products
Pvt Ltd 18
Samir Gandhi, MD & CEO, Gandhi Automations 02 Jasmine Singh Executive Director, National Head – Industrial & Logistics Services, CBRE South Asia Pvt. Ltd. 03 Dhruv Agarwal, Chief Strategy Officer, GATI – KWE 04 Binaifer Jehani, Director, Industry and Customised Research, CRISIL Research 05 Rahul Sagar, AGM-Marketing, Maini Materials Movement 06 Naotaka Ishizawa,MD, NYK Auto Logistics India Private Limited 07 Brijesh Lohia, Managing Director, Global Ocean Group 08 Ajay Mandahr, Director-Operations, Toyota Material Handling India 01
19
Rajendra R Chaturvedi, Chairman and Managing Director, Shreepati Group Manish Garg, President & Chief Executive-Steel Building Business, Everest
Industries Limited 20
Vishal Sharma, Senior VP - Cold Chain Division, BOXCO Logistics India Pvt Ltd
21
Rakesh Pachauri, VP Marketing and Sales, Coldex Logistics Pvt Ltd
22
Dipankar De, Partner, Dun & Bradstreet Tangram Advisory Services Pvt Ltd
23
Rubal Jain, Managing Director, Safexpress Pvt Ltd John Thomas, Associate Director, Realistic Realtors D Raju, MD, Kirby Building Systems India Pvt Ltd
24 25
26
Milind Shahane, Managing Director, DIESL
27
Harpreet Singh, Managing Director, CWC
28
Rajesh Sikka, Managing Director,Metaflex Doors
29
Abhijit Malkani, Managing Director, IndoSpace
India Pvt 19 Ltd
Development Management Pvt Ltd
19
20
21
22
23
24
25
26
27
28
29
2016 - india warehousing handbook 129
Experts Opine
We want to turn our inventory faster than our people. James Sinegal
If you have coordination but in the warehouse or factory, you haven’t achieved very much. Dick Ward
“ “ “ “
““ “ “
Trade isn’t about goods. Trade is about information. Goods sit in the warehouse until information moves them. C. J. Cherryh
Rather than demolish an abandoned warehouse, why not just cover it with graffiti and call it art? Jarod Kintz
My mind is a warehouse of carefully organized human emotions. I lock away the things that do not serve me. Tahereh Mafi
130 india warehousing handbook - 2016
2016 - india warehousing handbook
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