13 minute read
shipper speaks
As with other industries, technology and digitalisation are expected to play a big role in transforming the operations of FM CG companies. Realising this potential, organisations are not only leveraging digital technologies to change their front-end (customer interfaces) but also their back-end (supply chain and distribution networks). Deependra Khandelwal, Sr Manager- Supply Chain and Logistics at Ruchi Soya explains
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Upamanyu Borah, on how they are
making use of technology to build on emerging opportunities in an evolving marketplace and ensure that products are fresh, there is enough market reach and that working capital ratios are constantly improve.
Company overview
Formed in the year 1986, Ruchi Soya Industries Ltd (RSIL), now a subsid iary of Patanjali Ayurved, is the largest edible oilseed extraction and refining company in India with combined capacity of 3.3 million metric tonnes per annum in its 13 facilities spread across the country. RSIL is also the largest player in the cooking oil and soya foods category in the country. Its brand portfolio includes Nutrela, Mahakosh, Sunrich, Ruchi Gold and Ruchi Star.
Besides being a leading manufac turer of high quality edible oils, soya foods, vanaspati and bakery fats, RSIL is also the highest exporter of soya meal, lecithin and other food ingredi ents from India. It features among the top players based on market share in the overall Refined Oil in Consumer Packs (ROCP) in India.
An integrated player from farm to fork; RSIL is also the pioneer of oil palm plantations in the country.
Supply chain strategies
At RSIL, supply chain is a critical business process, and not just a business function.
Our focus is on shorter lead times and increased customer satisfaction. We have integrated
SAP ERP software system for end-to-end supply chain opera tions and ensuring the seamless flow of materials right from forecast and demand planning to supplies. RSIL works on the following principles: Identifying areas where
technology can help improve and streamline processes:
SAP monitors real-time availability of stock at several locations. Demand planning is anticipated based on the sales trend and seasonality factor which help to derive the production planning. Aging report is monitored on a daily basis for all stock keeping units (SKUs) to keep a check on the expiry of products and imple menting a First in First out (FIFO) approach. GPRS tracking system are used to monitor the stock in transit and arranging their delivery on time.
Optimising inventory for reduced
cost: We focus on how to reduce costs and improve the bottom line. This is especially needed consider ing the global economic downturn and after effect of COVID-19. In these efforts, we consistently look at optimising inventory quantities. For the same, we use proper tools and technologies for forecasting and demand planning.
Cycle time/turnaround time
(TAT) compression: We closely monitor the time from placement of trucks and rake, from its loading to the completion of the delivery in two stages, i.e.
Completion Time (CT): This is the time when the process completes its execution, i.e., material loading to invoicing.
We have integrated SAP ERP software system for end-toend supply chain operations and ensuring the seamless flow of materials right from forecast and demand planning to supplies.
Arrival Time (AT): This is the time when the material has arrived/reached its destination.
Regular reviews to ensure
efficiency and mitigate risk: We constantly review procedures and policies to ensure compli ance, efficiency and cost. This helps avoid process bottlenecks and help streamline operations while mitigating the risk of theft, fraud, etc.
Establishing green initiatives:
We focus more on rail freight logistics service solutions and try to move more than 30 to 35 per cent cargo through the country’s railway network.
Overcoming hurdles
Currently, we are dependent on imported edible oil since there is a huge gap in domestic production v/s consumption. Sometimes our import activities get affected due to a sudden change in import policies, import duty or congestion at port. To overcome this situation, we have to keep a buffer stock which involves lot of funds blocking. Moreover, at times we have to purchase from other importers and because of this our procurement cost increases.
On the other side, we also face problems in delivery of finished goods due to poor availability of trucks and delay in rake placement by the railways. We have to keep switching from one mode of transportation to another to continue the supply.
Production management
RSIL has a strong production, supply chain and logistic network along with a comprehensive pan-India presence to cater to our customers.
We have set up regional offices for monitoring the market demand and analysing the data for future demand and supply.
RSIL sales team takes orders from the market and commu nicates it to the nearest regional office who in turn informs the concerning plant from where this demand will be met out by adjusting production.
Warehousing tactics
Additionally, demand for our products varies as per the climate and season. Thus we have to be very flexible in producing different goods. A very fast setup and installation of a production line is necessary to achieve this and therefore, we align the activities accordingly.
When supply exceeds demand, our warehouses store products in anticipation of customer’s require ments. When demand exceeds supply, the warehouse can speed up the product movement to the customer by performing additional services like marking prices, packaging products. Here, batch code wise stacking plays an important role.
Digitally-enabled procurement
We have adopted several forms of core procurement technologies which combine functionality such as spend analytics, e-Sourcing, contract management, e-Procurement, e-auctions, and e-Invoicing, etc.
Many of these are driven by the SAP/ERP in search for lower comput ing costs, data storage and mining, enhanced forecast accuracy, delivery of reliable data, and analysis of supplier performance, etc.
Significance of logistics
To achieve a leaner cost-effective distribution model, we have outsourced entire logistical functions to specialised third-party logistics (3PLs) providers who carry out warehousing activities such as receipts, shipments, inspections, packaging, reverse logistics, etc.
They assists us in maintaining the smooth flow of materials across the supply chain by enabling timely delivery of finished goods to our end customers, or storing and supplying
the raw materials to our manufacturing locations for just-in-time manufacturing.
Our LSPs are Indian Railways, Container Corporation of India (CONCOR), Transport Corporation of India (TCI), Gati, Darcl Logistics, Patanjali Parivahan, and Alps Logistics, to name a few.
Back-end SCM
At RSIL, back-end essentially involves production, assembly, and physical movement. Major decisions include: Procurement (supplier selection, optimal procurement policies) Manufacturing (plant location, product line selection, capacity planning, production scheduling) Distribution (warehouse location, customer allocation, demand forecasting, inventory management) Logistics (selection of logistics mode, selection of ports, direct delivery, vehicle scheduling) Market decisions (product and process selection, planning under uncertainty, real-time monitoring and control, integrated scheduling).
Identifying megatrends
At RSIL, we have started feeling the disruption in the supply chains as the coronavirus continues to spread, affecting the availability of raw materials and logistics arrangements. Production disruptions largely affect the consistent supply which plays a core role in the supply chain and production planning. This is the phase of a new transition. Demand patterns are changing due to this. Key supplier locations are shifting. Technology is evolving more rapidly than ever before for hands free operations. We are working on this and trying to make a best blend of our knowledge and technological experi ence so as to meet the demand with speed and efficiency.
Centre sets up exclusive wing to remodel agri logistics and supply chains
The agriculture ministry has created a cell to modernise farm logis tics and supply value chains. The move includes making amendments to the six-de proved declaration of Kushinagar airport in Uttar Pradesh as an international airport.
The aviation ministry said in a statement that Kushi nagar airport is located in the vicinity of several Buddhist cultural sites like Sravasti, Kapilvastu, Lumbini (Kushi nagar itself is a Buddhist cul
Industry body CII has identified measures in key areas for improving India's Ease of Doing Business sce nario that can help the country achieve self-reliance. Micro, small and medium enterprises need a special helping hand, and should be exempt ed from approvals and inspeccade-old Essential Commodities Act and pushing two ordinances — freeing up farm trade from all restrictions and guaranteeing a legal frame work for pre-agreed prices to tural site) and declaration as an ‘international airport’ will offer improved connectivity, wider choice of competitive tions for three years under state laws while following all rules, the Confederation of In dian Industry said in a report. Self-certification route can be used for approvals for MSMEs with good track re cord, it has suggested. It also sought effective implementa tion of online single window farmers — an official said, requesting anonymity.
The reforms cell will help coordinate efforts to stream line supply and transportation of farm produce, and also aid projects to add value to primary farm goods for better prices to the farmers.
Additionally, the reforms cell will look after a national mission of ‘One District One Crop’ to boost crop diversity. In the aftermath of changes such as amendments to The Essential Commodities Act (ECA) of 1955, the reforms cell
Kushinagar Airport in UP becomes India’s 29th international gateway
The Union cabinet chaired by Prime Minister Nar endra Modi has ap
will play a key role. costs to the air-travellers.
“It will result in boosting of domestic/international tourism and economic devel opment of the regions. It will be an important strategic loca tion with the international border close by. Kushinagar is located in the north-eastern part of Uttar Pradesh about 50 km east of Gorakhpur and is one of the important Buddhist
CII suggests steps to improve Ease of Doing Business
pilgrimage sites,” it added. system, simplifying property registration and acquisition of land, expediting compliances for labour regulations and syn chronised joint inspections.
India's high logistics costs impact its competitiveness, CII said, noting this will require medium-term action such as increasing the share of rail ways and waterways in transport, improving first-mile and last-mile connectivity and re ducing port dwell time.
Amazon Flex delivery programme expands to over 35 Indian cities
Amazon India announced the expansion of the Amazon Flex delivery programmeme to more than 35 cities in the country. The global delivery programmeme launched in June 2019 in India aims at creating part time work opportu nities where individuals can create their own work schedule and earn `120 to `140 per hour by delivering packages to Amazon customers. Amazon said in a statement that the expansion of the programmeme will help scale Amazon India’s delivery capability at a time when customers across the country continue to depend on Amazon India’s services to have their products delivered safely at their doorstep.
New feeder service to boost connectivity between India and UAE
Abu Dhabi Ports has established a new feeder services company, SAFEEN FEEDERS that aims to facilitate increased connectivity between Abu Dhabi and ports serving the UAE, the broader Gulf region and Indian subcontinent. Executed in partnership with one of the world’s most renowned feeder service operator, Bengal Tiger Line (BTL), SAFEEN FEEDERS will introduce a new feeder service called the UAE-Indian subcontinent Gulf Service (UIG), allowing for a timely and efficient exchange of container cargo between mainliner vessels and the vessels within the rotation calling at nine regional ports located across the UAE, Saudi Arabia, Bahrain, Pakistan, and Western India.
The growth of pharma shipments by air in the past 2-3 years, and the development of premium products by airlines for tem
Investments in airport pharma facilities prove healthy business for WFS
perature controlled healthcare and life science shipments, prompted WFS to make a multi-million euro investment in pharma centres at its air port stations in Amsterdam, Barcelona, Brussels, Cape Town, Copenhagen, Frank furt, Johannesburg, London, Madrid, Miami, New York and Paris CDG.
In Johannesburg, import shipments rose by more than
Globa l ly, du r i ng May 2020, charge able weight carried by air, decreased 29% compared to May 2019. But, since the final yearover-year (YoY) figure for the month of April report ed a decrease of 34%, the conclusion may be that May showed a slight improvement. The improvement was also visible month-over-month contract to build a new freight building at Munich Airport; the only Skytrax Institute cer tified "5-Star-Airport" in Europe. The new building will be built on a gross floor area of more than 8,000 sqm. DHL 72% year-on-year in the first five months of 2020 to 627 tonnes, driven by the handling of particularly high volumes for Kuehne + Nagel. Amster dam has also seen strong growth as new airline custom ers, including Saudi Arabian Airlines, boosted WFS’ phar ma business by 285% and 134% in April and May respectively, while volumes at the airport for January-May of 1,444 (MoM), as May showed an in crease of 11% over April.
In terms of yields/rates, a completely uncommon 63% MoM increase in April was witnessed, when a good part Express will plan, construct and operate the new building on land leased from the air port. Currently, the company has access to the freight center as a tenant of warehouse space. The start of operations at its own location, which will be six times bigger, is sched uled for 2022. tonnes were up 92% over the same period in 2018.
The opening of WFS’ new €10 million Pharma Centre at Paris Charles de Gaulle Air port, and its subsequent IATA CEIV Pharma certification in February, has also encouraged rising pharma volumes from customers such as Qatar Air ways, AirBridgeCargo Airlines, Air Algérie, Allied Air,
Air cargo market still far from normal; just an 11% increase over April: WorldACD
Emirates and Kuehne + Nagel. of cargo capacity suddenly
‘disappeared’ as passenger aircraft remianed ground ed. The MoM-increase in
May was 5%. In other words, worldwide yields/ rates still went up, from
US$ 3.74 to US$ 3.95, in spite of additional capacity coming to the market by an increasing number of passen ger aircraft being (partly) con
DHL Express to build new cargo gateway at Munich Airport
DHL Express Germany and the Munich Air port have concluded a verted into freighters.
The new building will have a direct airside access and two pick-up and delivery (PUD) fingers. This gives a time advantage, particularly to clients in the south of Ger many. The new station will meet all safety requirements of the Transported Asset Pro tection Association (TAPA), and will obtain the globally recognised TAPA Class A cer tification, the highest security level in air transportation.
Freighter operations at Hong Kong Intl Airport surge 29% in May
Airport Authority Hong Kong (AA) has announced the traffic figures for Hong Kong International Airport (HKIA) for May 2020. During the month, freighter movements continued to surge, seeing a 29.3% year-on-year increase. Cargo throughput dropped 6.8% to 377,000 tonnes compared to the same month last year. Cargo exports experienced an 11% year-on-year increase in May, with North America showing the strongest growth. The overall decline in cargo throughput was mainly attributed to the decrease in transshipments and imports due to the reduced belly capacity of passenger flights. Traffic to and from key trading regions in Southeast Asia and India experienced the most significant drops.
ONE and PSA forge partnership to expand global terminal operations
One Network Enterprises (ONE), leader in solutions for autonomous supply chain management, and PSA Cargo Solutions, a unit of leading global port group PSA International (PSA), has announced a strategic partnership to expand services for global terminal operations and logistics. Through this partnership, the One Network platform would further expand the capabilities of PSA’s lead logistics provider (LLP) service for global 3PL customers, including ocean and land end-to-end (e2e) services for global logistics and portbased warehousing. The joint solution will provide full capability for track-and-trace visibility, alerts and notifications, and a comprehen sive supply chain control tower, including mobile apps, handling thousands of bookings per month over nearly 100 global transporta tion lanes across Asia and Europe.
LEADERS LEADING LOGISTICS series Part II & III chapter will appear in CargoConnect August and September editions. Watch out for the leaders charting the course to purposeful success.
