LOG.India September 2010

September 2010 Vol. 4 - No.1 `100 Germany Bulgaria Middle Eastw

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INDIA

LOOKING GOOD 50How is the Indian apparel industry is moving merchandise

AFTERMARKET GLOW 44Capturing the growing importance of the aftermarket industry

TIME TO STEM THE ROT 28Why the grains are left to rot when millions starve

Vinay Sharma, MD, Oil Field Warehouse & Services reveals the idea that is saving E&P companies precious time and money >>

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I N D I A’ S N O.1 LO G I S T I C S M AG A Z I N E

Saving Yen

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ANNIVERSARY ISSUE

FRID

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TURDAY

SUNDAY MONDAY TUESD

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BEFORE 9AM

BEFORE 12PM

BEFORE END OF DAY

BEFORE 9AMBEFORE 12PM

BEFORE END OF DAY

SATATAURDA AYAYA

BEFORE 9AM

BEFORE 12PM

BEFORE END OF DAY

BEFORE 9AMBEFORE 12PM

EVERY HEM, BEAD AND STITCH

IN THE RIGHT PLACE AT THE RIGHT TIME.

• • • • • • •

Fashion is all about being up-to-the-minute. That’s why Fashion Week choose DHL as their logistics partner, and a supporter of designers

everywhere. With a market-leading international network, DHL Express delivers to and from hundreds of destinations all over the world, offering our customers speed, precision and local expertise

whenever and wherever it is needed. After all, an event like Fashion Week can’t afford to be even a second out-of-date.

www.dhl.com/globalnetwork

DHL_L1B_EX_GN_SP_LogIndia_206x270_en_hi_IN.indd 1 17.08.10 09:50

Strong Bavaria – Strong Locations

27 countries and about 450 million people: Europe is the biggest internal market in the world – and right at the heart of Europe lies Bavaria. Its central location makes Bavaria a truly excellent transport hub for logistics and other worldwide operating companies. Bavaria with its perfect-maintained, state-wide road grid, its utilization of rail freight as a high-capacity alternative to truck-borne transport, its international airports Munich and Nuremberg, offering links to enable airfreight to be transported to nearly all destinations within 24 hours, enabling industry-best freight turnaround times. Indian giants like WIPRO, TCS, Reliance, Tata, Dr. Reddy’s and a great number of Indian midsized companies have already discovered these advantages.

If you want to know more about how Bavaria can contribute to the success of your company’s international business then get in touch with us. We provide free and confidential information, advisory and support services to investors on setting up or expanding business operations in Bavaria: www.invest-in-bavaria.in

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Prime Features of our Warehousesand Industrial Buildings :

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Warehouses & Industrial Buidings available as per your requirements.

Domestic Containerized Transportation now 20% cheaperWe provide safe, reliable & cost effective containerized transportationservices with wide range of containers starting from 17 FT. to 52 FT.in length, to meet your needs.

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We provide containerized transportation services all over India & offerrates 20% less than that of the market; from Delhi, Indore, Ahmedabad,Kolkata, Nagpur, Bangalore, Goa & Hyderabad to Pune.

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Warehouses & 2,00,000 sqft Under Construction.(Outside Octroi Limit)

Visit us at: www.vijaylogistics.com

Registered Office: Vijay Logistics Pvt. Ltd., Tara, Plot no-66,Vastu Udyog, Pimpri, Pune – 411018 (India).

Phone: +91 2135 675000-099 Mobile: +91 99608 67766, +91 93710 46363, +91 98239 79721.

Prasun

E-mail: [email protected], [email protected]

Logistics we define

eDITORIAL >

5INDIA| September 2010 | www.logisticsweek.com

Sounds preposterous? It sure does. When transport buses, passenger cars, bicycles and even pedestrians are clamoring for space on our busy roads and highways, how on earth can we think of dedicated lanes for trucks? In my defense, the idea is not mine. And it’s already in use in some

parts of the world. In July this year, Mexico opened a toll highway linking Monterrey in Mexico to Laredo in Texas, USA,

for large commercial trucks only, reported Bloomberg. The reason: Congestion at smaller ports caused some businesses to reduce operations, or use air cargo instead to move goods.

The Interstate-81 highway in Virginia, USA, has lanes dedicated to trucks where the latter are required to pay toll, and the cars running in the remaining lanes do not have to pay the same. Additionally, the state of California has two highways that have truck-only lanes.

However, around the world, such lanes or roads are very few in number. The reason for it is not hard to guess: increased administrative costs, public furore (as the general commuters have to forfeit crucial road-space to trucks).

However, the talk of truck-only roads or lanes cropped up in the world press recently. But not in the Indian context. It came up briefly in the discussions ensuing the massive traffic jams that China has witnessed recently.

A quick (and painful) recap: Starting August 14, the highway connecting Inner Mongolia to Beijing witnessed an unprecedented 100-kilometer-long, 10,000-vehicle traffic jam that lasted an incredible ten days.

Within a fortnight, media reported another big traffic jam in China – a 30-kilometer long jam choking the Beijing-Tibet Expressway that is used to transport coal from China’s hinterlands to its eastern ports.

Never one to let go of any bit of bad news emerging from China, the western press took it upon itself to discuss the jams threadbare. The blame was pinned on three major factors. The first was China’s hectic construction activity which, figuratively speaking, is the thing other than the Great Wall of China that can be seen from the moon nowadays.

The second was the increasing vehicular traffic. And the third was the rapid escalation in the number of trucks carrying coal to feed China’s ever-hungry power plants—that

need copious amounts of coal owing to the country’s rising energy needs.Sounds familiar? No? Welcome to the party. The three aforesaid factors are going to be in play in India in the not-too-distant

future. Sample these facts: India has plans to invest $1 trillion for infrastructure development of the country from 2012 to 2017. Talking of vehicular growth, the Indian automobile industry posted its best ever monthly sales of 12,37,461 units in July. The heavy commercial vehicle segment increased a whopping 43 percent from last year.

Now comes the demand for coal. As we know, coal accounts for 63 (some say 67) percent of power generation in India, the demand for which is going to hit the roof in the next two years, say experts. India is already Asia’s third-largest energy consumer, and the demand for coal may double from 2008 to 2015 to exceed 1 billion tons, says energy consultant Wood Mackenzie.

As much as I am, like everyone else, ecstatic that India is growing as fast and inclusively as a democracy can and must, I am, like everyone else, not looking forward to sitting in car stuck on a highway, living off biscuits and water for ten days.

There is a big chance that in the next few years, traffic jams could grow in number and intensity on our roads and highways. And like it or not, our truck operators are going to face a lot of heat, trying to meet a rocketing demand for coal and construction material, and fending off negative public sentiment. Transportation by railways is an issue even with the huge railroad infrastructure that China has and one can’t expect a lax Indian Railways to share the increasing load with the highways anytime soon (witness the fate of the freight corridor projects).

This is where truck-only lanes could help. Think about it. Such lanes – obviously built in the busiest traffic regions in the country – could help all stakeholders: the government, the car owners, and the truckers.

To the government, such lanes or roads could bring in additional revenue (by toll/additional toll in lieu of better average speed), savings on road construction costs (since roads built for vehicles other than trucks are less expensive compared to the ones meant for trucks).

For cars and buses, it would mean less damage to roads, fewer accidents and better speeds. And for the truck operators, massive improvements in delivery times and savings on operational costs.

Agreed, the idea is not media-friendly and is going to be met with stiff resistance and disbelief from transportation planners and the general public, but as the studies conducted on truck-only lanes/roads have shown, the idea does pay in the long run.

What say?

Truck-Only Lanes, Anyone?

Aanand [email protected]

Aanand PandeyEditor

Contents

FeatureMoving PartsThe aftermarket auto parts industry is f lourishing, however, OEMs and suppliers need to chalk out well thought out strategies in terms of sourcing, inventory planning and managing the supply chain.

uPSHOtKnow Your ConstraintTwo events last month, namely, Retail Supply Chain Forum and Theory of Constraints, saw significant exchanges to find a mention.

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cOlumntoo tardy For this shirtThere is a dire need to develop more sophisticated means to manage supply chain risk, f irm up our infrastructure, and grow in our ability to manage global processes tightly and more efficiently.

INDIA| September 2010 | www.logisticsweek.com6

36 cOver StOryeureka MomentUnder the leadership of Vinay Sharma, OWS has made its mark in the Indian oil and gas sector. His story lets us in on how servicemen can take an unexplored idea that no one believes in and turn it into a profitable business.

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Featurestop the RotThe PDS is begrimed with appalling infrastructure, poor management, and much corruptness. The reason why tons of grains are rotting due to negligence. But there are solutions to stop further grain rot.

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INDIA| September 2010 | www.logisticsweek.com 7

SePtemBer 2010

BOOK eXtractGreen LogisticsEfficient f leet management contributes significantly to reduce environmental impacts and the cost of transporting freight.

PanOramaWide ViewBooks, Journals, Blogs, Technology - a look at what's new in and for the supply chain industry

FeatureLooking GoodThe apparel industry has dynamic potential which needs to be tapped by the logistics industry.

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reGularSevents 74

SEPTEMBER 2010

cOlumnCold shoulderDespite the hundred percent FDI in cold storage infrastructure, the cold chain story is yet to take off.

ADVeRtIseR InDeX5th Southern Asia Ports, Logistics and ................... 71Shipping 2010Arham Logiparc ......................................................... 9Bar Code India ......................................................... 21Bavarian Ministry of Economic Affairs ....................... 3Capricorn Logistics ................................................. 25Crystal Logistics Cool chain .................................... 59DHL Express ........................................................... IFCEmirates Skycargo ..................................................BCGreen Earth Translogistics ..................................... IBCIndelox Services .......................................................15Indo Arya Logistics .................................................. 23Infolog ......................................................................17Ingersoll Rand ......................................................... 63Jay Equipment ......................................................... 27Kairali Resort ........................................................... 45Man Force Trucks .....................................................13Radhakrishna Foodland ........................................... 61Round The Clock Logistics ...................................... 41Safexpress .............................................................. 31Saudi Transtec ........................................................ 47Schaefer ...................................................................11SCM Logistics World 2010 ...................................... 55Stakall ......................................................................18Supply Chain & Procurement Fraud Management ... 43Uniworld Logistics ................................................... 53Vijay Logistics ........................................................... 4VRL Logistics .......................................................... 33V-Trans (India) ..........................................................19

August 2010 Vol. 3 - No.11 Rs 100Germany Bulgaria Middle East

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INDIA

WHO NEEDS LSPS 62The thriving pharma sector has little use for LSPs. Why so?

ATLAS CHUGGED 52Why project logistics in India is a domain of select players

SERVING FRESH 30Designing supply chains to ensure product freshness

Dell India’s supply-chain team led by General Manager MR Sundaresan is empowering the giant PC maker’s intensifi ed market drive >>

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Dell India’s supply-chain team led by

Dell India’s supply-chain team led by General Manager MR Sundaresan is

General Manager MR Sundaresan is empowering the giant PC maker

empowering the giant PC makerintensifi ed market drive >>intensifi ed market drive >>

Pull 'N Drive

auGuSt 2010

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INDIA| September 2010 | www.logisticsweek.com

Toll Holdings Edges Up In A Tough Year

Australian logistics com-pany Toll Holdings, which has a strong Asian

presence, reported improved second-half performance for the year ending 30 June 2010 which resulted in a 7 percent increase in full year revenue to $6.9 billion and a 2 percent decrease in Net Profi t After Tax (before one-off items) to $293 million.

Toll Group Managing Director, Paul Little, said, “A highlight of fi scal year 2010 was an excellent result from Global Logistics which

achieved improved margins under diffi cult circumstances.

Toll’s Australian busi-nesses were challenged by reduced volumes due to tough economic conditions which, according to the company, “are expected to show modest uplift in volumes during the current year (FY2011).

“However cost savings and effi ciency measures undertak-en through the year have Toll well positioned to benefi t from anticipated improvement in economic activity, particularly in the retail sector,” Toll said in

its fi nancial report. The company is optimis-

tic on its Global Forwarding division which continued to roll out its acquisition growth strategy and improved margins in the second half, providing the much-needed momentum for the year ahead.

Some of the other key acqui-

sitions done by the group during the year include: Con-cord Park (Aus-tralia), WT Sea & Air (UK), Genesis (UK), DPEX (Asia Pacifi c) and Aus-tralian Armored Express (Australia).

Add it iona l ly, some signifi cant contract wins during the year

include: Sears (US), Target (US), Defense Relocations (Australia), Cadbury (Austral-ia), Proctor & Gamble (Asia) and Weatherford (Asia). “New contracts are expected to gen-erate in excess of an additional $400 million in annualized revenue for the Group,” said the managing director.

Gati, Blue Dart, IOCL ............10

Maersk Line, Arshiya International ......................... 12

Gujarat Maritime Board, Sterlite, Leighton, Eredene Capital ...................................14

Concor, Nandi Infrastructure Corridor Enterprises (NICE), Electro Motive Diesel, Diesel Electromotive Works ..............16

Mahindra & Mahindra, Navistar,Toyota ......................18

opeRaTIVe InDeX*

*Key entities mentioned in the news section

Company attributes it to results from Global Logistics; acquisitions and contracts during the year also added to revenue

The government is committed to make the Vizhinjam International

Multi-purpose Sea Port a reality. — V surendran pillai,

Minister for ports and youth affairs

TRAIN OF THOUGHT

It is (the order on food grain) our order, not a suggestion.— supreme Court Justices

Dalveer bhandari and Deepak Verma,

after food and agriculture minister Sharad Pawar’s “It’s a suggestion”

statement

Mumbai does require a second airport at the earliest, but I am very clear in my mind that the present site selected by City and Industrial Development Corporation (CIDCO) has major environmental concerns.

— Jairam ramesh, union Minister for

environment and forests

2009 2010 Variance (in %)

revenue $6,492m $6,944m 7

ebiDTa $625m $641m 3

Toll holdings: financial snapshot (year-ended 30 June)

Cadbury (Australia) has been a signifi cant contract win for Toll recently

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Khushroo Dubash, ClyDe Cooper, anD Tushar Jani founDeD blue DarT in 1983 wiTh `30,000

Company news

Gati Ups Tempo, Announces New Strategy Mumbai

Declaring a sharp uptick in growth, Gati reported reve-

nues to the tune of `751.2 crore for the fiscal 2010, up 19.2 percent from FY09. In what is a strong indicator of perform-ance, Gati’s EBITDA (Earnings Before Interest, Taxes, Depre-ciation and Amortization) rose 39.9 percent over last year.

According to a company press note, the ‘Express Distri-bution and Supply Chain Divi-sion’ delivered a sterling per-formance with deliveries of 4.35 crore parcels this year compared to 3.31 crore parcels delivered last year – showing a growth of 31.5 percent. Gati now reaches 622 out of the 626 districts in In-dia, covering 1,32,106 locations across the country.

The directors of the com-pany, while acknowledging the encouraging performance,

announced a ‘go to market’ strategy that paves way for the company to achieve its near-term vision of becoming a half-a-billion dollar (`2,500 crore) company by the year 2014. Ma-hendra Agarwal, Managing Di-rector and CEO, Gati, elaborat-ed on the move: “Our strategy is to focus on the two major areas we see as the future of Gati - Express Distribution and Sup-ply Chain (Ambient and Cold Chain) Solutions. As such, these are the two verticals in which Gati is now being restructured.”

In order to give concerted and a much-needed push to its shipping function, Gati has de-cided to demerge the division into a wholly-owned subsidiary called “GatiShips”.

Agarwal said that, as part of the go-to-market approach, the company will form two main

Blue Dart Bags AIMA-IOC Services Award New Delhi

B lue Dart, the express air and integrated transpor-

tation, distribution and logis-tics company, was given the award for “Best Motivational Practice in Services” by All In-dia Management Association (AIMA) and Indian Oil Corpo-ration Ltd (IOCL) at National HRM Summit – an AIMA event – on August 20 at Hotel Lalit, New Delhi.

The award has been insti-tuted to encourage employee motivational programs and practices in organizations in the manufacturing and serv-

ices industries. The HR Summit was at-

tended by over 300 delegates from the industry across the country. As the winning or-ganization, Blue Dart made a case study presentation of its ‘Best Motivational Practice’ on the second day of the Summit.

Mercer, a renowned HR consulting firm was the knowl-edge partner for the award. Based on the evaluation crite-ria, Mercer conducted a survey taking into account the level of satisfaction of employees, HR processes, practices, and other

relevant manpower statistics gathered from the participat-ing companies.

The shortlisted compa-nies were further evaluated by a jury comprising eminent personalities from human resources and academia. The jury evaluated 57 participating organizations on critical pa-rameters before reaching a fi-nal decision. Blue Dart Express won the award given under the ‘Services’ category and Marico bagged the ‘Manufacturing’ category award.

A joyous Barttanu Das, Sr.

Gati will form two divisions - Express Distribution and Cold Chain supply chain. File photo: An express distribution facility

divisions: Gati Express Distri-bution (surface and air), and Gati RedSun Supply Chain and Cold Chain Solutions.

“Our focus is on India, and we are ramping up our pres-ence in the APAC (Asia-Pacific) region.” Gati, through its in-ternational division, is present

in Thailand, Singapore, China, Dubai and Hong-Kong and in the process of opening an of-fice in Malaysia.

“I am quite open to acqui-sitions or a partnership in the APAC region as this allows us to foster an accelerated growth strategy.” said Agarwal.

VP (Human Resources), Blue Dart Express said, “While holding onto good talent, we develop it for greater future re-sponsibilities. This is what has led to our ‘People First’ policy, which emphasizes on indi-vidual development, growth, care and nurturing of our em-ployees. Regular feedbacks, internal communication sys-tems, employee support mech-anisms, rewards and recogni-tion are some of the basic tools that ensure employee’s loyalty towards the organization for a longer period of time.”

Schaefer, Leading the way in Logistics Innovations.In a user unfriendly warehouse storing and retrieving goods is like walking through a huge maze, filled with obstacles from, slow and inefficient picking to poor volumetric space utilisation. At Schaefer we know how frustrating this is and we know how to lead you out of your logistics nightmare. Our customised Integrated Storage Solutions helps take cost out of the warehouse operation providing high-performance order picking, consolidating storage and picking areas, increasing picking accuracy, and faster movement of picked orders.

Schaefer Systems International Pvt LtdA 1-4, Gurudutt Co-operative Hsng Sty Ltd Om Nagar, Ajit Nagar, Off J.B. NagarAndheri (East), Mumbai - 400 059Phone +91 / 22 / 6111 4700/710Fax +91 / 22 / 6111 4777eMail [email protected]

INAC

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HIGH INVESTMENT COST

LACK OF LOCAL SUPPORT

HIGH MANPOWER

“The reason for our Asian success and growth is the provision of Innovative Cost-efficient solutions to the logistics market.”

USER UNFRIENDLY WAREHOUSE DESIGN

LAYOUT CONCEPT DOES NOT MEET CURRENT MARKET DEMAND

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SLOW AND INEFFICIENT PICKING ACTIVITY

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Learn how Schaefer can help you at www.ssi-schaefer.in

LOG India_Schaefer_Maze_216x270mm.indd 1 7/8/2010 2:42:50 PM

Schaefer, Leading the way in Logistics Innovations.In a user unfriendly warehouse storing and retrieving goods is like walking through a huge maze, filled with obstacles from, slow and inefficient picking to poor volumetric space utilisation. At Schaefer we know how frustrating this is and we know how to lead you out of your logistics nightmare. Our customised Integrated Storage Solutions helps take cost out of the warehouse operation providing high-performance order picking, consolidating storage and picking areas, increasing picking accuracy, and faster movement of picked orders.

Schaefer Systems International Pvt LtdA 1-4, Gurudutt Co-operative Hsng Sty Ltd Om Nagar, Ajit Nagar, Off J.B. NagarAndheri (East), Mumbai - 400 059Phone +91 / 22 / 6111 4700/710Fax +91 / 22 / 6111 4777eMail [email protected]

INAC

CU

RAC

Y O

F PI

CK

HIGH INVESTMENT COST

LACK OF LOCAL SUPPORT

HIGH MANPOWER

“The reason for our Asian success and growth is the provision of Innovative Cost-efficient solutions to the logistics market.”

USER UNFRIENDLY WAREHOUSE DESIGN

LAYOUT CONCEPT DOES NOT MEET CURRENT MARKET DEMANDPO

OR

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AFFI

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SLOW AND INEFFICIENT PICKING ACTIVITY

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FAILURE TO MEET CURRENT OCCUPATIONAL

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Learn how Schaefer can help you at www.ssi-schaefer.in

LOG India_Schaefer_Maze_216x270mm.indd 1 7/8/2010 2:42:50 PM

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Maersk Line Gets ‘Best Mainline Operator’ Honor Chennai

Maersk Line won the award for ‘Best Main-line Operator 2010’ category chosen from

companies across South and East India, at the South East CEO Conclave and Awards held on July 31 in Chennai at Taj Coromandel.

Santosh Kumar Singh, Regional Sales, South & East, Maersk Line India, received the award on behalf of Maersk Line.

The conclave was organized by Exim India – a reputed Exim (Export-Import) and cargo publishing house – along with Fairplay Exposi-tion Group. The event was attended by leading trade dignitaries including Union Ministry of Shipping Secretary K. Mohandas, Tamil Nadu Maritime Board CEO Mohan V Chunkath, and the Former Shipping Secretary D T Joseph, among others.

India’s First FTWZ Launched Mumbai

Arshiya International, an Indian supply chain and

logistics infrastructure solu-tions company, announced the operational launch of India’s first Free Trade and

Warehousing Zone (FTWZ) in Panvel, Mumbai. The 165-acre facility will be operational over two phases, employing over 25,000 people at full ca-pacity and is expected to cost

approximately `1,500 crore. Falling under the premise

of the SEZ (Special Econom-ic Zone) Act, FTWZs offer benef its to companies with import, export, and trading activities out of India such as f lexibility towards end-distribution through duty deferment, reduced buffer stocks, and overall lower product costs. They also en-able f lexible and hassle-free re-export in addition to other advantages.

Commenting on the an-nouncement Ajay S Mittal, the group chairman and manag-ing director of Arshiya Inter-national said, “The FTWZ will not only increase profitability and induce cost savings for our customers, but also serve as a game changer in the Indian lo-gistics landscape.”

GooDs aren’T alloweD To be sToreD in fTwZ beyonD Two years

Santosh Singh (left) accepts the award for Maersk Line

We have a state-of-the-art, TAPA ‘A’ security and LEED certified green facility of over 250,000 sq ft of built up area, where we operate VMI with a process we term as Intribution”

— Balaji V CEO, YCH India

CorrigendumIn the August issue cover story on Dell India, we used an incorrect quote for a blurb which was about the YCH Group services it renders to Dell. We regret the error. The blurb should have been as follows:

L-R: Nijay Nair, Head, Strategic Initiatives; Maj. Suhas Thakar,

Chief Infrastructure and Regulatory Officer; Archana Mittal, Joint

MD; Ajay Mittal, Group Chairman & MD; Capt Kapil Anand, Chief

Operating and Marketing Officer; and Michael Proffitt, Member,

Global Advisory Board

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Gujarat To Carry Total Ports Capacity Past One BTGujarat

In September, the Indian port sector is set to cross one

billion ton in capacity. Even though the fi gure is far behind China which is being reported to have touched the 8-billion mark this year, the ministry sees it, and rightfully so, as

a landmark and plans to cel-ebrate it with fanfare.

According to current port data, the current country-wide capacity (996 million ton) will cross the one-billion fi gure with the addition of Gujarat Maritime Board (GMB) control-

inDia’s firsT loCally builT ship ‘Jal usha’ was launCheD in 1948 in ViZaG, ap

led ports’ 19 million ton (MT) in September.

Ironically, a major part of the rise in capacity has been contributed by non-major ports, in particular, ports of the state Gujarat. The state’s ports saw a surge in traff ic in the April-June 2010 quarter, up 25 percent from the previ-ous year.

The total capacity of the 12

major ports as on June 30 was 620 MT, and that of non-major ports was 355 MT, of which 244 MT came from Gujarat Mari-time Board ports.

A GMB note released in August said the Gujarat ports traffi c touched 45.5 million ton (MT) in June.

The note further stated that the Gujarat state government has approved `10,000 crore worth of port-related projects, including six shipbuilding yards at Bhavnagar, Mahuva and Dahej for `6,000 crore, a bulk cargo terminal at Hazira for `2,250 crore, a private jetty at Navlakhi for `330 crore and port facility for importing coal at Sayala for `210 crore.

`20K-Cr Port Expansion AfootNew Delhi

Slow Major, Fast Minor Ports Cause Policy RelookMumbai

The Ministry of Shipping in India has announced a

`20,000-cr ($4.3bn) plan for 25 port projects which will be awarded under a PPP scheme this year. The proposal in-cludes the construction of mega-container terminals at Chennai Port and the conver-sion of a berth for a container terminal at Tuticorin Port.

The ministry said it ex-pects Singapore, Dubai and other Gulf countries to in-vest in the projects. Projects at Paradip and Ennore have already been awarded to Sterlite-Leighton and Eredene Capital consortium.

The poor performance of major ports and the fact

that minor ports have done well despite the recession has led the government to relook at the administrative policies of the major ports. Consequently, the ministry of shipping (MoS) has prepared a new draft land use policy which is available on the MoS website (www.shipping.nic.in) and is open to feedback from the stakeholders.

As per the draft, the land in-side the custom-bound areas may be granted on the license basis only by the chairman of a major port for up to a maximum period

of 11 months. And the rentals will be in accordance with the Schedule of Rates (SoR) or the rates approved by a competent authority, taking the prevailing market rates into account.

If the land is to be allotted to port users for structures like con-veyors, silos, pipelines, weigh-bridges, the lease could be given

for a term of up to 7 years.However, the land outside

the custom-bound area could be leased out for up to 30 years – in rare cases extendible to 99 years with the recommendation of the Port Trust Board sent to the ministry for the prior approval of the empowered Committee com-prising of Secretary (shipping), fi nancial advisor (shipping), a representative of department of expenditure and a representative of the Planning Commission.

According to sector experts, this clause will affect lessees who have occupied port land at rates fi xed decades ago.

Traffi c at the ports surged in the April-June quarter by 25 percent

The state government has also approved projects worth `10,000 crore

Company news

The MoS has prepared a new draft lease and made available on its website

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God’s Own Country To Manage Railway Freight Online Thiruvananthapuram

It is reported that fi fteen Freight Operation Informa-

tion System (FOIS) terminals have been sanctioned for vari-ous goods handling points at the Thiruvananthapuram Rail-way Division. FOIS is a system for management and control of freight movement that also as-sists managers to optimize as-set utilization.

It enables customers to have instant access to information on the current status of con-

signments in transit for just-in-time inventory.

According to the division-al railway manager, Thiru-vananthapuram, FOIS will enable traders to monitor ar-rival of the freight train, plan out the receipt and dispatch of

consignments to the intended locations, besides providing adequate time to arrange for labor.

The e-payment of freight charges has been enabled at fi ve goods-handling points as part of commissioning FOIS local-ly. This will help the Railways in realizing payments within seconds and ensure hassle-free transaction for the customer.

FOIS will be extended to 10 more locations in the division.

Concor For JV With Global Shipping Majors For Trade RequirementsNew Delhi

In an effort to include a ship-ping company as part of its

value-chain, state-owned in-land transport services pro-vider, Container Corporation

of India (Concor) is likely to ink a joint venture (JV) with global shipping majors for ca-tering to exim trade require-ments of shippers, according

to a company source.Currently, Concor is nego-

tiating with various shipping majors and with non-vessel operating common carrier (NVOCC) companies.

Concor uses its container train rail network to provide logistical support and involve-ment of shipping companies would widen its base in the country, he said.

Presently, Concor is the market leader having the larg-est network of 59 ICDs/CFSs in India.

Railways

CurrenTly, China railways is The seConD larGesT freiGhT Carrier in The worlD

FOIS will help management and control of freight movement

Concor is negotiating with shipping majors and NVOCCs

Two-way, High-speed monorail system plannedBengaluru

Bengaluru will soon get a two-way high-speed mono-rail system on the NICE pe-ripheral road, to be built by Nandi Infrastructure Corri-dor Enterprises (NICE). The Metro will act as a feeder for its monorail services.

Work is expected to start as soon as the Bangalore Metro Rail is up and run-ning. The Metro intersects NICE’s Bangalore-Mysore In-frastructure Corridor (BMIC) at the starting point of the link road on the existing Mysore Road and Kengeri on Mysore Road.

NICE would require about two years to set up the mono-rail service.

Us Diesel Loco Builder Bets Big on Indian marketDelhiChicago-based Electro Motive Diesel is bullish about prospects in the Indian market. Electro Motive Diesel is the world’s largest builder of diesel electric locomotive. The company not only views it as market to sell its products, but also to buy equipment.

The company already has a tie-up with Diesel Electro-motive Works (DLW) Vara-nasi. Its fi rst priority is to be able to supply to India. It also plans to establish capabil-ity in India beyond assembly and maintenance.

Concor has the largest network of 59 ICDs/CFSs in India

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Mahindra Navistar 25 To Cost `15.4 LakhIn BengaluruBengaluru

Toyota’s Second India Unit By Year-End Bengaluru

Mahindra Navistar Automo-tives inaugurated its new,

state-of-the-art dealership in Bengaluru, Trident Automo-biles, in August. The new 25 ton truck, MN25 would cost `15.4 lakhs in Bengaluru.

With the inauguration of the Bengaluru dealership, Mahin-dra Navistar has rolled out the process of creating the exclu-sive network of dealerships on a massive scale. Over the next two years, Mahindra Navistar plans to commission over 100 dealerships across the coun-

try, thus rapidly expanding the former’s pan-India presence.

The company also fl agged off the mobile service work-shop in the country, yet another fi rst in the Indian trucking in-dustry, with the objective of providing ‘anywhere, anytime’, on-road assistance to custom-ers. Coupled with the multi-lin-gual, 24×7 call centre branded as ‘NOW’, which is manned by trained service experts, Mahin-dra Navistar is all set to unleash a new paradigm in customer service in Indian trucking.

Toyota, the world’s largest car maker, is set to dou-

ble its production capacity in India as its new plant in Ben-galuru, with an investment of nearly $680 million, will be operational by the end of this year.

The company plans to launch Etios in India in both sedan and hatchback versions by the end of this year. The Japanese car maker operates in India through a joint ven-ture with the Kirloskar Group.

Toyota currently sells util-ity vehicle ‘Innova’, premium sedan ‘Corolla Altis’ and sports utility vehicle ‘Fortuner’. All these models are produced at its plant in Bengaluru.

The company also sell premium sports utility vehi-cle ‘Prado’ and luxury sedan ‘Camry’ in Indian market. These models are imported from Japan.

In 2011, the company’s total production capacity will increase to 140,000 cars. Toyota Kirloskar Motor’s ex-isting facility, which is also located in Bengaluru, has the capacity to produce 70,000 units annually.

aUTomoTIVe

M&M has launched more variants of its new brand since the offi cial

launch in November 2009

Toyota imports its premium sports utility vehicles from Japan

Toll was founDeD in 1888 by alberT Toll in newCasTle haulinG Coal wiTh horse anD CarT

< upshot

Industry EventsIncreasing scope for container logistics

Know Your Constraint

The Supply Chain Leadership Council organized an event,

‘India container logistics summit’, on August 27, at Mumbai. As the world emerges from a deep reces-sion, the Indian container logistics industry has the opportunity to learn from the past and grow expo-nentially in the future. The summit had over a hundred participants, some of whom shared their per-spectives on the issue, along with examples of innovation that are currently being experimented with across the country.

Noted industry veterans like S Hajara, CMD, Shipping Corpora-tion of India, S K Saha, Director, Planning Commission, and Captain Sandeep Mehta, CEO, Mundra port and SEZ addressed the conference. Hajara emphasized that though

there has been an improvement in the container trade, India has to up-grade its ports to receive the 6,000 TEU+ containers which are now plying on the shipping routes of the world.

S K Saha disclosed that India will be spending one trillion dol-lars in the twelfth five year plan (2012-17). Of this amount, two per-cent would be spent on ports which is estimated to be `90,000 crore, twice the amount that was spent in the eleventh five year plan. In particular, innovation in container logistics was discussed at elaborate length by Vishal Sharma of Tuscan Ventures with several other repre-sentatives of the private container rail industry sharing successful examples of experimentation in the private container rail space.

“First, know the goal of your busi-ness”, said Prof. Rajiv Misra at

the CSCMP lecture series on Theory of Constraints on the 27th of August. As part of the monthly lecture series, the Mumbai round table of CSCMP (www.cscmpindia.org) had hosted Prof. Rajiv Misra fron XLRI, Jamshedpur. Prof. Misra is an expert in Dr. Goldratt’s Theory of Constraints (TOC) that was first put forward through Goldratt's bestseller 'The Goal'.

In India, ToC has given significant returns in supply chain and project management scenarios. Organiza-tions like Larson & Toubro, Tata Steel and Godrej Soaps have created major breakthroughs using ToC. Ac-cording to Prof. Misra, companies in India have benefitted in executing re-peatable tasks. He was clear that the benefits in completely new projects

has been limited. He began the ses-

sions with a simple game to highlight that knowing the 'Goal' is essential and work-ing for the wrong goal could lead to drasti-cally wrong results. He explained how one can identify the bottleneck and elevate the same, a process that is key to optimizing the output. He kept the audience busy by showing videos, playing games and good application oriented examples. He gave examples from different areas to account for the varied background of the audience.

The Mumbai roundtable of CSC-MP organizes education events for supply chain professionals and busi-

Date : August 27, 2010Event: India container logistics summit Organizer: Supply Chain Leadership CouncilVenue: Novotel Hotel, Juhu, Mumbai

Date : August 27, 2010Event: Seminar on Theory of Constraints Organizer: CSCMP Mumbai RTVenue: Fortune 2000, Bandra Kurla Complex, Mumbai

S Hajara, Chairman and Managing Director, speaking at the event

The ToC seminar in session

20 INDIA| September 2010 | www.logisticsweek.com

ness leaders on various topics every month. There have been sessions on the Mumbai Dabbawallas, RFID, Pal-letization, etc.


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H

StitcheS in time

Padmini Pagadala General Manager, TPG Consulting, Mumbai

There is a looming risk of American and European apparel business going to Asian countries other than India, if our vendors don’t get their act right. Here’s what to do

Fans posing at a Sex and the City 2 (the movie) prem

ier at a San Francisco theater. Source: Dm

itry Valberg, Flickr

Heard tHe fable about the race between a lion and a rabbit in which the rabbit won? When the lion was asked how it could be outrun by a puny rabbit, the lion replied with a self-indulgent smirk, “Of course the rabbit won; it was running for its life!”

I’ve recently been working with a client in the United States who runs retail apparel stores. When I asked him about his experiences in sourcing apparel from South asian vendors, he complained that his Indian vendors are doing worse than their bangladeshi counterparts.

the client and I went over vendor lead-time reports and indeed he was right. Indian manufacturers were at the bottom rung consistently.

Understandably, one client’s complaint is not enough to paint an entire industry with

the same brush. However, the particular complaint had me wondering if this could be a part of a larger malaise, or even a sign of things to come as more and more global retailers will seek to outsource apparel manufacturing to South asia.

In the field of apparel making, I reckon that we behave like the fabled self-indulgent lion racing with the rabbit, when compared to our South asian neighbors. We see our future tied so much to Information technology and other big ticket industries that the traditional sectors like those of cotton, textiles, and readymade garments seem almost yesteryear for us. but that is not the case in bangladesh—where apparel is big and a thing of the future.

that begs the question: Why should we worry so much about the quality of apparel

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manufacturing and logistics in India? because there is a lot that can be gained today.

When I look at the apparel industry, it promises a huge scope of outsourced manufacturing that can benefit the Indian apparel industry in light of the changing focus from other parts of the world to our part, only if we can develop more logistics savvy.

but this won’t be easy. as my investigation into the woes of Indian apparel firms reveals, there is a dire need to develop more sophisticated means to manage supply chain risk, firm up our infrastructure, and grow in our ability to manage global processes tightly and more efficiently.

Why lead Time the fashion industry in the West is all about seasons. Unlike us, the men and women in london and New

York wear radically different things at different times of the year.

during my upcoming trip to atlanta, I can’t be caught dead with the last season’s fuchsia bags or worse, the ed Hardy’s look from before that.

this very basic nature of fashion in these parts of the world means that there is a very short selling cycle for a lot of merchandise sold in the apparel stores. Many stores don’t expect a style to last more than six to 12 weeks before it needs to be marked down and replaced by something that is ‘in’. this also means, of course, that if you get the product to the stores a couple of weeks later than expected it’s a disaster. the bottom line for the success of the Inditex-owned Zara is that the producers can bring a style from the ramp to the store much ahead of anyone else in the industry and at an affordable price too. timing is thus everything in the fashion industry.

Why is on Time So Hard?the designers in New York City and Hong Kong put their heads together and come up with the ‘look of the Season’. by the time they do this, these apparel “concepts” will need to be in the US or european stores in a mere four months.

Obtaining the order from the customer is sometimes referred to as the ‘Information lead time’. Once the order information is supplied, the manufacturing process can begin. four months sounds like a lot of time, but it’s not! Making the garments typically takes about 50 days if you are lucky. Once the goods are ready it takes 30 days just to get it from an Indian port to long beach if you are lucky. after that it needs to travel by train or truck to a distribution Centre in the States, get picked and packed, and then shipped to the stores. this can take 15 to 22 days if you are lucky.

the problem is this year we are NOt lucky. there are multiple delays occurring throughout the supply chain that are chewing up the four months leaving the goods made by Indian manufacturers little, if any time, to get it to the stores. furthermore, these problems are likely not going away anytime soon, so the manufacturers better learn to manage them if they are to make the date that the Western consumer expects. after all, no one in Vail, Colorado is going to need ski boots in June.

Slow Steamingthis year, the logistics industry is facing a host of new issues. One of them is that worldwide, ships have slowed down.

Ships are now running at two-thirds the normal average speed in order to save fuel. this only means that this time is going to be stolen off the manufacturers in the future. Slow steaming has affected the transit times the world over. this is a huge risk but could be an opportunity in disguise to us – if we can find ways to shorten our manufacturing times compared to our asian competitors, we can gain back some of the lost time on the sea and look even more attractive to foreign customers.

low inventoriesOwing to recession, most of the factories slammed the brakes on their inventories. average lead times (worldwide) earlier were on an average close to 90 days but they are back to 130 days owing to the manufacturers having to place order on the fabric and wait on it. but India is a big source of cotton and fabric. this should be an opportunity for us because we don’t have the lead times to obtain this raw material that the Southeast asian countries might have. Fabric Sourcing Most of the fabric is purchased after the customer places its orders. What was a surprising find (at least to me) was that a noticeable amount of fabric is being imported to make the readymade garments. this seems to be a major cause of worry for the manufacturers in India at present. there are port congestions in Sri

during my upcoming trip to atlanta, i can’t be caught dead with the last season’s Fuchsia bags or worse, the Ed Hardy’s look from before that.


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.cirrelt.ca/mhm

ultimediabank/

lanka and frequent delays in the promised shipping dates of this critical raw material. (It is interesting to note that once the shipment reaches the port, then the manufacturers claim they can get it out in 24 hours.) the vendors need to account for this issue while making the delivery commitments.

Sampling TimeMost manufacturers complain that valuable time is wasted in shipping samples of their product to the US/europe for approval prior to the manufacturing really getting underway. Sometime these delays can be substantial and occasionally, for ridiculous reasons. a former colleague of mine mentioned an interesting story where she had to deliver a ‘washable’ leather-front to a client in the States. She tells me about the tough time that she had in convincing the client that no leather could be washed, not in India, not in China, not anywhere. and of course, that meant losing 15

precious days on the order. the process of having to courier to the West samples

of both the fabric and the garment itself after every tweak in the design delays manufacturing at least by seven days if not more. While the biggest of retailers have labs in asia to lessen this problem, the smaller ones do not. I am not sure why. Perhaps something could be done to make it synergize the process here in India to create another strategic advantage for the subcontinent.

Planning issuesbad planning still haunts some of our factories. Not paying attention to the deadlines of the various stages of the process is cited as an issue as well. there are some manufacturers who admit to having difficulty with ‘tough styles’. for example, I learnt of one instance where the fabric was estimated to have covered 10,000 garments but eventually only catered to 5,000 garments – which meant a mad scramble and rush to get everything out of the door. I bet my burberry scarf that the last part of the order was sent out by air – wiping out any profit associated with the run. learning For allIts easy to let your eyes glaze over and flip ahead to something that might be more relevant if you are not in apparel, but don’t. there are a couple of takeaways here for us all.

first, it is obvious that India must learn how to integrate into the global supply chain. We must build processes and technology within our companies that allow us to remain resilient even when we are not lucky. We need better infrastructure to make transfer of our goods from plant to port easier, faster, and more reliable. these objectives apply to apparel as well as any goods we might want to export.

this leads to the second point. the world has a lot of demand – which we can manufacture, so this is probably even more important than you would think. at my company we do a lot of work with Western consumer goods companies and retailers who manufacture products in China. at almost every one of these projects, the sourcing teams are actively looking for reliable alternate sources to Chinese production. this is a gigantic opportunity for India.

an article in the economist’s august issue points out why:

‘as recently as the early 1990s, India was as rich, in terms of national income per head. China then hurtled so far ahead that it seemed India could never catch up. but India’s long-term prospects now look stronger. While China is about to see its

Wages in China are going up. Is it time to race with the dragon?

Source: Marc Charnal, Flickr


working-age population shrink, India is enjoying the sort of bulge in manpower which brought sustained booms elsewhere in asia. It is no longer inconceivable that its growth could outpace China’s for a considerable time.’

No, the western firms are not running away from China, but they are starting to experiment, knowing that cheap labor in China is not always going to be available. as american Shipper magazine points out this month:

‘Indeed, China’s wage level is much higher [along the coast] than many Southeast asian countries — at least double that of thailand, Vietnam, Indonesia or the Philippines. However, Chinese workers are more disciplined and productive.’

although manufacturing will be a core industry for China for several more years to come, it is hard not to notice the increasing wage rates in China – especially if India can close the productivity gap. In Guangdong,

the labor rates have increased by about 150 percent in the last ten years. Wages in several sectors along the Chinese coast are reportedly going up as much as 30 percent this year alone! this sort of trend is important to Western firms making long term sourcing decisions. Vietnam, Cambodia, bangladesh, and India are some of the places that are being tested.

even at the current labor rates, it is important to note that the difference between labor costs in India and China (or for that matter even between India and Vietnam) is in itself not a deal clincher. the guys in New York would rather pay the extra cents per hour and get the stuff shipped in on time rather than pay less and wait on a longer time for goods to get there.

If India can solve the logistics of this process and build supply chain resiliency, we then have a role to play as a manufacturing hot bed that could far outshine the f ields of our programmer cubes and call center seats our country seems to be known so much for today. think about it. Isn’t it time to take the dragon on?

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INDIA| September 2010 | www.logisticsweek.comPhoto: Prabhjot Singh Gill

Grains kept on Cover & Plinth rot at an FCI warehouse in Amritsar


Sprucing up infrastructure — both warehousing and supply chain — bringing in the private sector, and improving quality of grains are some of the crucial steps that can be taken to stop rotting of grains, says Jayashree Mendes

Back in 1957, Mother India, the movie, showed the poignant struggle of a mother who feeds her two children

roots plucked from a barren fi eld after the village is stricken by a fl ood. Elsewhere in the village, the local landlord’s henchmen are guarding a warehouse stocked with grains.

Circa 2010: National newspapers and television channels publish pictures of children in the hinterland sustaining their frail bodies with rice and a curry devised from water and chili powder. Not much has changed in these four decades.

The press is agog with reports about thousands of ton of food grains rotting at warehouses across the country. Meanwhile, statistics indicate that almost half of the children under the age of fi ve in India are chronically malnourished. Forty-three percent of the children under the age of three are underweight, which is double the Sub-Sahara Africa average. Against this backdrop, thousands of sacks of rotting grains kept out in the open with a tarpaulin sheet thrown over them casually make for a sordid picture.

According to reports, in Sirsa (Haryana) alone, about two lakh quintals of wheat were discovered submerged in water. Though the Food Corporation of India (FCI), the body responsible for storage and distribution of

grains for the Public Distribution System (PDS), could have salvaged the grains, the authorities reportedly did not act on time. Similarly, in Gondia in Maharashtra, four thousand metric ton of wheat has been lost. Many other states too have similar stories to tell.

How can a food-starved country be so cavalier about food grain storage? Veena Goel, Economist, Punjab Agricultural University, says, “It’s evident that the government lacks serious, effi cient administrators who can be entrusted with the task of food safety. Otherwise we wouldn’t have food grains rotting.”

So much was the rot that last month, as a short term measure, the Supreme Court of India directed the Center to distribute the grains to the poor at very low cost or no cost instead of leaving it to rot in warehouses.

However, economists Log.India spoke to fear that rotting grains could be a blind used by offi cials with vested interests to continue with a certain level of infl ation. Consider India’s production of wheat and rice. From July 2009-June 2010, the country’s estimated production of wheat, rice and pulses was around 218.2 million ton (mt), a little more than it consumes in the same period, according to Rajender Parsad, Head (Design of Experiments) at Delhi-based Indian Agricultural Statistics Research Institute (IASRI) – a body under the Ministry of

Time To Stem Time To Stem Time To Stem The RotThe RotThe Rot

Photo: Prabhjot Singh Gill


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Professor, (Marketing), SolBridge International School of Business in South Korea, whose main research interest is logistics and supply, rotting of food grains is a serious supply chain problem. “It arises due to a lack of co-ordination and information sharing in the supply chain communication systems. Effective and effi cient supply chain are rooted in a combination of information and product fl ow,” he adds.

There are several reasons to the case of the rotting food grains. Besides poor infrastructure, quality of grains, warehouse mismanagement and poor storing conditions, offi cials, on their part, are not prompt in quick distribution of the grain.

Infrastructure GlitchesRotting of food grains is not new

to India. The supply chain that starts from the time of harvesting and ends at local fair price shops or retail outlets are bogged with several constraints. State agencies buy the harvested grains from farmers at minimum support prices, which are then purchased by FCI. These are exclusively meant to be channeled to the PDS and distributed to the poor through fair-price shops (see diagram: From Farm To Mouth: The PDS Chain). But insiders say most of the time the offi cials move new stocks, thus leaving older stocks alone. Goel says, “State Grains Procurement Corporation and the Civil Supplies Corporation do not adopt scientifi c methods to store the stocks. Regular disinfection and fumigation of the warehouse is a must after a stockpile of grains have been cleared out. This helps retain the quality of the next incoming stock, along with the hygiene of the warehouse. This (process) is not followed at most warehouses.”

Obviously, grains as a seasonal and perishable commodity require safe warehousing. According to fi gures available on the FCI website (as of June 2010), FCI-owned covered depots have a capacity to store 129.7 lakh ton. Hired depots at state and central level of the SWC (state warehousing corporation), CWC (central warehousing corporation) and those set up with the help of private participation comprise another 143 lakh ton. Besides this, the agency maintains another economical method to store bagged grains - Cover and Plinth (CAP), a damp- and rat-proof elevated plinth in the open space at depots, and covers them with 250 micron low-density polyethylene sheets made for the purpose.

An expert says that tarpaulins and open storage systems assure minimum safety and the food grains stored using these methods cannot withstand adverse environment

Agriculture that undertakes research, education and training in agricultural statistics for research. Of the 218.2 million ton, wheat production is estimated to be 98 million ton; rice around 100 million ton, and the rest is pulses. If the distribution of grains were to happen promptitude, then chances are with the next harvest round the corner, there wouldn’t have been several million ton of grains lying at warehouses.

R Rukmani, Program Director (Food Security) at MS Swaminathan Research Foundation (MSSRF) – a globally renowned, a Chennai-headquartered no profi t research organization – says, “Governance is only part of the problem. There has been certain apathy on the part of the government in allocating resources to quicken the pace of supply chain in PDS.”

For Rajesh Rajaguru, Assistant

Grains rot when warehouse offi cials tend to store the fresh stock in Cover and Plinth (CAP)

sometimes for more than the life-span of the wheat

Photo: Prabhjot Singh Gill

from farm to Mouth: the PDS Chain

State Agencies

FCI Warehouses (Centralized)

Warehouses (State level)

Fair priceShops


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and climatic conditions. Grains, in this method, can be stored for up to a year. He adds that since the quality of grains do not match global standards, its storage longevity cannot be guaranteed.

For the distribution of food grains to various warehouses across the country, FCI uses the services of Indian Railways. Although most

FCI warehouses are situated close to railway lines, a majority of them are not equipped with rail sidings for quick and easy loading. Offi cials, on their part, too are not prompt in securing timely and regular availability of rail wagons to push forward the grains into the supply chain. So grains tend to remain at warehouses for long durations under unhygienic circumstances thus hastening its rot.

The right storage of grains also requires the offi cials in charge of warehouses to take precautions. Rakesh Singh, Founder and Chairman of Mumbai-based Institute of Supply Chain Management (ISCM), opines, “The agency in charge of procuring the grains for FCI also needs to plan the quantity and time of procurement. Upon procurement, grains need to be sorted out for long-term and short-term storage. For instance, grains with ideal moisture content and maturity have a long vase life and should be stored in warehouses for long-term purpose with care. Certain food grains don’t

have the feature of long-term storage and hence it needs to be processed and distributed, instantly. Ideally, the grains should be stored in third-party warehouses in each territory and distributed to the point-of-sale (POS), upon request.”

Procurement of grains also calls for skills in forecasting. Offi cials responsible for moving the grains are well aware of demands across various states. Singh says, “Indian companies are unsure of what the harvest will bring next season. There is a tendency to hoard. Grains cannot and should not be stored for more than a year. It becomes seed for the next year.”

A Chandigarh-based FCI offi cial, on condition of anonymity, refutes this statement saying, “There is no question of hoarding. Last season, an increase in production resulted in higher procurement. This caused a shortage of space at warehouses. So while older grains from inside the depot have been channeled into the PDS, newer grains have been stored in CAP.”

Goel refutes this, saying that most of the stock lying under CAP at Chandigarh warehouses is more than two years old.

Ideal WarehousesWarehousing is part of the large supply chain and are scientifi c storage structures constructed to protect goods from elements, theft, rodents, etc. An ideal warehouse should be computer-administered and must have ready infrastructure to monitor incidence of pests and diseases, internal and external temperature, humidity, aeration, moisture content of the food products, among other things.

There have been several feeble attempts to spruce up warehousing facilities since the Agricultural Produce (Development and Warehousing) Corporation Act, 1956, came into being. It has

Thousands of ton of grains are found rotting across FCI warehouses

Rotting of grains is mainly due to a lapse in supply chain

Supply chain of grains from the time of harvesting to fair price shops weighed down with constraints

Offi cials fall back on regular disinfecting of the warehouses

Poor quality of grains prevent them from lasting long

Poor IT infrastructure at warehouses makes grains vulnerable to pests, rodents, etc

Rampant corruption among transporters, warehouse managers and fair price shop owners

a Deeper rot

The durum wheat is harder, of better quality and export material. However, durum is mostly

used in making processed foods such as pasta, noodles, etc


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come to evolve over the years as the Warehousing (Development & Regulation) Act, 2007. While the Act has yet to see the light of day, its essence was to introduce the concept of negotiable warehouse receipt, wherein farmers could store their produce at accredited warehouses and avoid distress sale. The other benefi t would have been

the involvement of the private sector to maintain warehouses specially marked for grains meant for PDS.

Warehousing (for PDS) was solely the government’s responsibility. There has also been this idea of roping in the private sector, but it was not until 2002 when the fi rst tenders were fl oated for private sector participation.

Agro-economists have, for some time, been suggesting roping in the

private sector for warehousing. The public-private-partnership (PPP) in warehouses would ease many time-lag issues, especially if the public sector will build the warehouses and the private sector will maintain it. According to Singh, “At a time when the public sector has failed to avoid grains rotting, an effective cure would be involving the private sector. By eliminating the problem of PDS supply chain malfunction, it will facilitate effective and effi cient fl ow of products to the benefi ciaries. There are several private and co-operative warehouses operating profi tably in India. However, farming communities and food storing agencies have a lack of awareness and interest in warehouses. Steps should be taken to encourage them so that it can act as an incentive to private investors to invest in warehousing businesses. Required technological and fi nancial support needs to be provided.”

Technology also plays a crucial role in warehousing systems. The introduction of advanced information and communication technologies (ICT) assisted systems provide assurance for safe, long duration storage of food grains. The PDS should take appropriate measures to shorten the length of the supply chain and effi ciently manage procurement, warehousing, processing, transportation and distribution using advanced ICT.

Quality Of GrainsQuality of grains has a direct bearing on the longevity of storage. According to Parsad, “There were three species of wheat used last crop season: T. aestivum, T. durum and T. dicoccum. Of the three, durum has higher potential for long term storage, is export-quality, and is resistant to Karnal bunt, a fungal disease that reduces the lifespan of the wheat. However, this variety of grains is mostly available in central

India and in Punjab. Good quality wheat can be produced in dry areas of Rajasthan, Madhya Pradesh and Maharashtra.”

But durum is quickly picked up by the food processing companies as the main ingredient in the manufacture of pasta, noodles, white bread, etc. The reason attributed to this is that since its hard quality wheat, it’s ideal for storing for longer than the designated one year.

However, the lack of education to farmers and a sheer ignorance on their part to ignore modern production methods also has an effect on the quality of grains. There is a tendency among farmers to procure seeds from FCI and other government agencies at minimum support price. With wheat and paddy being the staple of diet of people in the country, farmers across various states are required to produce a certain quantity of the grains. The assured protection offered through the use of procurement prices presses farmers to diversify from pulses to wheat and paddy. Rajaguru clarifi es, “This tendency to move from pulses to other grains makes them liable to compromise on the quality of the seeds. So it makes room for contamination. Sometimes, grains are mixed after harvesting. This is one of the prime reasons for quick rotting.”

Packing of grains in poor quality jute can hasten the rotting of grains. Grains travel across several states and loading and unloading at regular intervals subject the bags to wear and tear. Rajaguru adds, “Research indicates the highest incidence of grains’ rotting is when it is stored in bulk quantity. Food grains stored in airtight silo bags in small quantities well protect the grains from pests, diseases and adverse climatic conditions.”

Seeds Of Corruption Benefi ciaries of grains under the PDS are mainly two categories –

Sometimes, grains are mixed after harvesting. this is one of the prime reasons for quick rotting

No of FCI warehouses: 32Capacity across FCI warehouses (owned and hired): 305.17 lakh ton*Warehouses where grains rotting: - Punjab (49,000 ton)- West Bengal- Gujarat- Maharashtra - Haryana (2 lakh quintals) - Gondia in Maharashtra (4,000 metric ton); - Ghaziabad, Uttar Pradesh (4.5 lakh sacks)Stock with FCI (as on July 1, 2010): 57.8 million ton

extent of the problem

*The above-mentioned locations are those that appeared in media reports


Below Poverty Line (BPL) and the poorest of the poor who fall under the Antyyodaya Anna Yojna (AAY). A third category of people under the Above Poverty Line (APL) has also been included, though they are liable to receive grains for a slightly higher price. Colored cards are allotted to beneficiaries seeking to accrue the benefits of the PDS.

Identification of right beneficiaries for the PDS can offer huge benefits with little intervention of channel members. But most of the times the grains do not reach the fair price shops. The lack of supply chain security systems provides enough room for an unholy nexus between warehouse managers, transporters and fair price shop owners, thus restraining the rights of real PDS beneficiaries. Theoretically, a good supply chain also promises efficient money flow from the end consumers to producers.

Unfortunately, the PDS supply chain supports the flow of corrupted money along the channel members. An agro-economist remarks on a recent article that highlights the PDS officials’ demand to fair price shop owners to forfeit `15,000 per month for regular supply. The fair price shop owners are forced to forward the burden to consumers by denying product supply to consumers and/ or reduced quantity. Transporters and other PDS supply chain members are not infrequently involved in selling the products in the black market.

While most people falling under APL may not exact any of the facilities, there is little change in the buying patterns of tier II cities and the villages. Singh says, “Food grains may be rotting, but officials will not put more grains on the market. Officials are worried that prices may fall. So there’s a tendency to hoard, which are then put on the market when the prices are high.”

for Want Of equitable DistributionThe entire system of PDS hinges on the theory of equitable distribution of grains to the poor. The government and the Supreme Court of India have chalked out schemes, such as food coupons, Food Security Bill, Unique Identification Authority of India, etc.

The food coupons scheme will offer direct subsidy to the poor, who can avail of this to buy the quota of grains allotted for a family. However, there were glitches such as an assurance that all BPL and AAY would receive the coupons. To overcome any chance of this, the UPA government has awarded HCL and its consortia the contract to implement the food coupons scheme by linking it with the UIDAI. This is expected to take 16-18 months over four phases. There are suggestions that HCL should also consider the inclusion of census information and data. The food coupon system will be a tool that will facilitate food security. The caveat here is that if correct identification of the poor does not happen at the village level, it renders the scheme worthless.

Meanwhile, the Food Security Bill is still in the draft stage, and is being looked at by the National Advisory Council (NAC) comprising a special panel of educationists, NGOs, among others. The bill, if passed in

the Parliament, would entitle poor families to receive 35 kgs of grains every month.

In all the solutions suggested and being followed, a most constructive one that would work in the long-term is linking the PDS with the UIDAI. Data of the poor can be collected from the village Panchayat for those who will live in villages. The tier II cities might face problems, as it comprises mainly migrants. But they could be given one identity. Rajaguru says, “The UIDAI will bring in transparency, because the government will have captured data of 90 percent of the population through the Census. That will help them design all kinds of policies around the 90 percent. The entire FCI concept will go for a toss, because the poor can buy based on the UIDAI.”

As the UIDAI commissioned system expects to capture data on each and every citizen’s biometric, tax, demographic and personal information details, the proposed time limit for the accomplishment of project seems rational. Many countries introduced such a kind of systems decades ago. Considering the vast Indian population, their living patterns and social circumstances, the proposed project is a challenging one.

Meanwhile, the grains continue to rot.

Farmers need to use modern technology methods to accrue quality produce

< Cover Story



EUREKA MOMENTVinay Sharma, Managing Director, Oil Field Warehouse & Services (OWS), came up with a unique concept of an oil-and-gas related warehousing and logistics business. How did he make it big? Frewin Francis reveals the strategy

I realized the advantages of having an oil and gas logistics

company in a Special economic Zone (SeZ). e&P

firms would'nt need to export or import the equipment

At an age when most people are preparing to retire from active service, 56-year old Vi-

nay Sharma made an intrepid move. He decided to start his own business. It was not going to be any ordinary business. It was a venture that re-quired huge investments, beginning with drawing out all his savings ac-cumulated over 32 years of service. At the time the idea germinated, Sharma was Vice-President (Logis-tics) at Reliance Industries Ltd (RIL) in charge of approving contracts for the supply chain of equipment to the oil and gas fi elds operated by RIL.

Handling the logistics for RIL had brought Sharma in contact with several national and international service providers responsible for importing and exporting equip-ment for RIL blocks. This got him well-acquainted with the intricacies of documentation, large number of people movement and equipment

costs associated with projects. The logistics of offshore oil and

gas exploration and production requires import of several pieces of equipment and thereon trans-ported to the oil and gas f ield. Permissions need to be acquired either from the Director General of Hydrocarbons (DGH) or the Minis-try of Home Affairs, or sometimes even the Ministry of Defense. The sensitive hired equipment needs to be brought into the country (usu-ally by sea) from Houston or Sin-gapore or Colombo or Dubai. It is then sent back after the agreed time period and then again im-ported for another project, but not before it has again gone through the entire documentation process.

Ahead of timeSharma had done this for almost 11 years at Reliance and before that as general manager at Ispat indus-

VINAY R SHARMA Managing Director Oil Field Warehouse & Services


< Cover Story

tries Ltd. He realized the cumbrous task of having to import, export and again re-import equipment and the waiting on end in between, not to mention the huge expenses incurred on freight. Some really large equipment could cost up to $100,000 per shipment.

In 2005, Sharma had a light-bulb moment. If implemented, this idea would help E&P companies save mil-lions of dollars in terms of freight. He says, “My love for reading helped me realize the enormous advantages of having an oil and gas logistics company in a Special Economic Zone (SEZ). There would be no need to export or import the equipment. Instead just ship it to the warehouse at the SEZ and ‘import’ it back when an operator requires it.”

Sharma did not consider him-self up to it. Coming from a regular service background, and nearing retirement, Sharma, handsomely, began circulating the idea among friends at RIL hoping that it would hit pay dirt. He recalls, “I knew the idea was good. But all the people were unconvinced. Instead, people were nonplussed and some even thought it was preposterous. One

argument kept coming back to me – Has anyone tried this before? If not, then it is absurd.” This question was one that he was likely to hear often in the future.

For Sharma, the mindset of peo-ple to be followers and not leaders was irksome. Here was an oppor-tunity, and there was no one will-ing to see it through. Long-time friend and former colleague at RIL, Pankaj Surani, discerning its ster-ling caliber encouraged Sharma to set it up himself. What’s more, Su-rani even offered to quit his cushy job and set up the business under Sharma’s guidance.

Although Sharma was well-versed with dealing with contracts and understood the workings of the oil and gas industry, setting up a

Financial Snapshot of oWS (In ` Crore)

year 2006-07 2007-08 2008-09 2009-10

Sales 5.13 17.08 23.72 28.9

Profit 1.49 7.25 4.71 12.9

new business was beyond the com-prehension of this service man. A Chartered Accountant helped them form the company. But there were the necessary approvals to be got, a special process unique to setting up a business in an SEZ.

The bureaucratic hurdles that met the duo were unsurpassed in their career. Vineet Sharma, son of Vinay Sharma and managing director, Ul-timate Freight Systems LLC, (OWS' Dubai arm) says, “The Development Commissioner, unable to fathom the nature of the business, suggested ap-proval from the under-secretary of the Board of Approvals in Delhi. The under-secretary was not clear about the business, so he put him on to the Secretary of the Board of Approvals. The secretary, MG Pillai, who is now

A batch Mixing Tank for making slurry of different chemicals to be used while drilling

OWS plans to build platforms, topside and downside

equipment in the near future


the Home Secretary of India, offered the senior Sharma only 10 minutes of his time. The idea was put across in six minutes.”

Pillai later met the members of the Board of Approvals and convinced them, and that is how the license to set up OWS at an SEZ at Visakhapat-nam (Vizag) was acquired.

Green Signal Getting the okay for the SEZ was

I knew the idea was good. But people were

unconvinced. one argument kept coming

back to me – Has anyone tried this before?”

E&P companies engaged in continuous projects can save up to $45 million on freight

Since shuttling between foreign countries and India is eliminated tool utilization of tools increases by 16 percent

Emergencies of operators are met at short notice and in a cost-effective manner

With repair and maintenance and up keep started within the country itself, there is employment generation in the sector

Availability of a range of tools in India within 36 to 72 hours ensures that operators can save time on mobilization

Operating out of an SEZ guarantees custom clearance to E&P companies 24 x 7 vis-à-vis day time working hours at various ports

Service providers can save not only on freight cost but also on insurance cover, packing cost, fear of loss and damage in transit as well as pilferage

the X Factor - How e&P companies can save on costs, time, and improve effi ciency

A batch Mixing Tank for making slurry of different chemicals to be used while drilling

a great relief. But after that what? There were ignorant people inside the government as well as outside. Prospective customers they ap-proached either went blank or gave a shrug of uncertainty. But a positive feasibility report by auditing compa-nies Ernst & Young and Pricewater-houseCoopers did the needful.

But that was regarding only the mindsets. The second big worry was the money. Sharma says, “We were employees and our savings were meager compared to the investments we required. Bank loans were beyond reach. There was no working capital.”

The two approached relatives and close friends to invest in their busi-ness model. They were convinced that it was sure-fi re idea. SEZ rules require that projects must have an investment of `100 crore and more if the company seeks to be eligible for incentives made available for small and large industries.

Having worked for more than a decade in the oil and gas industry, the two were not unfamiliar with the intricacies of the sector. They took to the people and government offi cials their background which was that of having been operators as well as serv-ice providers. And with over 32 years in the fi eld generally, OWS won the respect, backing and confi dence of the people.

OWS picked Vizag for its SEZ as

source: OW

S


< Cover Story

40

the company planned to target oper-ating companies who had won blocks in the East Coast and in the KG Basin. Some of the companies were Reliance and ONGC. This was the hot spot, as it were. The rent was relatively cheaper as it was a government SEZ. Moreover, the government provided ready-made warehouses, whereas private SEZs leased out only the land. The infrastructural headaches had to

be borne by the party concerned. Moreover, oil and gas being a very

cash intense sector, customers spend over six months at times, validating and cross checking service provider authenticity, background and track record. This makes it difficult for new-comers in the industry to gain a level of confidence.

Showing the WayHaving come from the service in-dustry, OWS provides inspiration to customers who may not have a busi-ness background. At OWS, custom-

ers are advised and assisted on all aspects of business right from docu-mentation to the delivery of equip-ment and consumables.

In India, all ports work between 10 am and 6 pm. But an SEZ, as per government regulations, must work 24 hours a day. With OWS, once the duty-free document is processed in Delhi, it is scanned and sent over and filed the next morning. This en-sures that movement of materials can start an hour after the document has been processed in Delhi. This breaks down the time boundaries and saves precious time.

Initially it was decided that OWS would only provide warehousing of equipment, but over time, as per the demands from customers, the com-pany today does everything from ac-quiring materials, importing, freight forwarding, custom documentation, trucking, etc. The trucking service be-ing initially outsourced was not up to the expected standards. So OWS, over time, acquired a fleet of 18 trailers, equipped with global positioning sys-tem (GPS), cellular phones and well-trained drivers.

In case of each customer, OWS studies what would be their liability in undertaking a job because it di-rectly affects the company as well. The customers are studied for over a month and their credentials are eval-uated before entering into business with them. Making money out of a

source: OWS

customer comes only secondary. The primary concern is in forging long-lasting relationships. Customers are briefed on all the implications of VAT, tax, legalities, SEZ Acts and oth-er regulations and discuss if its feasi-ble to do business or not. Customers, working with OWS, stand to gain in terms of money, time, overheads, stress, etc and subsequently they are charged a portion of their savings. As a result, every single customer since 2006 has been retained till date.

Safeguarding InterestsSharma may have faced several hurdles in setting up the business. But once the idea caught on, there were several who tried to jump onto the bandwagon.

In the early days, being new to the business market, Sharma and his team were unsuspecting of people look-ing to emulate their business model, which they consider unique in a way. Surani says, “We were approached by employees of a big multi-national company who posed as customers re-quiring our services. They later tried to copy our model, word for word. They created a business report by bribing officials at the SEZ facility in Vizag, imitating our projection figures and other data calculations we had done. To cause more trouble, they formed a company with a transporter being their front man and began moonlight-ing, apart from the job they had with their existing firm. When this came

The OWS facility at VSEZ (Visakhapatnam Special Eco-nomic Zone), Andhra Pradesh

the vizag SeZ, being a government unit leased out land as well as ready-made warehouses, which is not the case with privately run SeZs


< Cover Story

We were approached by employees of a big multi-national company who posed as customers requiring our services. They later tried to copy our model, word for word.

— Pankaj Surani, Director (Operations)

Oilfield Warehouses & Servies

to the notice of the officials at OWS, legal action was taken against them, and the process and figures formu-lated by OWS was copy-righted.

Plans to Make More Waves All equipment pertaining to the oil and gas sector comes via the Black Marlin, which inevitably means that all shipments are at the mercy of the Black Marlin. Big structures for the sector are always made at the waterfront. OWS plans to build plat-forms, topside and downside equip-ment in the near future.

The company plans to set up oper-ations in Mundra, in the west coast of India. It has also tied up with ASCO, an oil and gas logistics company based out of Aberdeen, UK, to bring quality services to the Indian E&P. The resulting business venture will be called OWS ASCO Offshore Ltd. and is based out of Mumbai.

A unit has also been set up in the United Arab Emiratres, in Sharjah at the Hamariya Free Zone. In Oman,

(Left to Right) Pankaj Surani, Director(Operations) ; Vineeth Sharma, Director; Kiran Sharma, Director (HR & Administration);

Vinay Sharma, Managing Director; Rashil Sanghani, Director (OFS Freight System)

source:Ramlath K

avil

Electrical centrifugal pump skid

Morris pump

Viscometer

Faslok landing joint

Turbine flow meter

Wilden pump

Hydraulic setting tool

Air receiver 300 ltr capacity

Nitrogen pump/ convertor with

nitrogen hose & trap cover

2000 gal nitrogen tank (empty)

Acid HCI transfer pumps

Stimulation tank, 5000 gal

Swivel joint

Variable pressure washer

Handling Capacity Following is a list of some of the

equipment handled by OWS

at the Sohar SEZ, OWS intends to ob-tain 200 hectares of land that will be leased phase-wise in 50 hectares each.

Sharma smiles when we ask him whether he also plans to be an op-erator in the future.

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< FEATURE

PAR SThe authors, G Maheswaran, Market Segment Leader (Aftermarket Parts Industry), and C Rakesh Gopal, Senior Consultant (Strategy) at Miebach Consulting India Pvt. Ltd., reason that while the aftermarket parts industry has fl ourished, OEMs and suppliers would do well to have well-thought out strategies in terms of sourcing, inventory planning and managing the supply chain

44

Indian automobile industry has grown from license raj to a completely free market. Till the eighties, the market was purely supply-driven and marked

by very few players. The buying decision was inf luenced more by vehicle availability (or rather a shorter waiting time) than the cost of maintenance and parts availability.

The industry was opened up for global players in the early 1990s. As a result, the automobile market has been fl ooded with over fi fty Original Equipment Manufacturers (OEMs) offering products ranging from two-wheelers to passenger cars to utility vehicles to commercial vehicles to farm equipment. Such a competitive environment has resulted in changes in the market dynamics.

Just like in the developed markets, Indian

auto customers have started evaluating products based on serviceability and maintenance cost in addition to product attributes and buying price. OEMs are expected to offer extensive service network, quick availability, and affordability of aftermarket parts.

The change in market dynamics has transformed the outlook of OEMs towards the aftermarket parts business. Indian OEMs have started to focus on aftermarket parts and service network in addition to various product features. The aftermarket parts business is considered a cash cow as it can offer high margins ranging from 30 percent to 50 percent depending on the part.

An OEM’s aftermarket parts business is primarily a trading activity with low value

IMPORTANCE OF AFTERMARKET

INCREASING


addition like kitting and repackaging. So the core function of the aftermarket business is SCM, with sales and marketing being support functions.

This is evident from the fact that the organizational KPI (Key Performance Index) is First Fill Rate (FFR) which is nothing but the percentage of order lines available in full at stocking points at any given time. In matured automobile markets, the FFR is closely monitored by the top management.

Global benchmark of FFR is over 90 percent with over 1,00,000 parts, whereas in Indian auto companies it averages around 70 percent and lower number of parts. Realizing the importance of FFR, some Indian auto majors have created separate business units for aftermarkets with direct representation at the board of directors.

According to a Miebach research carried out this year, the Indian aftermarket industry is estimated around $10 billion or `47,000 crore. Of this, auto component manufacturers and aftermarket business of OEMs account for 45 percent and 35 percent respectively; fake suppliers account for the rest.

It’s DifferentThe SKUs (stock keeping units) in an aftermarket business is nothing but the various components of an automobile. Every new model that comes into the market sees

an addition of 2,500-3,000 parts to the existing master list, while the addition of every variant adds another 500-1,500 parts.

In the last forty years, the number of Indian automobile players has grown from a mere six to more than f ifty, of which around forty emerged only in the last twenty years. This phenomenal growth has been primarily fuelled by the liberalization of the Indian economy and has resulted in more than 300 car models (with double the number of variants) compared to less than 25 models in the 1980s.

Frequent launch of new models also indicate a reducing product life cycle and has negative implication on the aftermarket SCM. The implication of shorter life cycle of automobiles on the aftermarket business is faster transition of parts from runners to repeaters and soon fading into obsolescence.

Although revenue from parts of a new model will be low in the f irst two years after launch an increase will be seen from the third year, only to stabilize in the fourth year if the model continues in the market. Unlike other businesses where a product is discontinued if it does not yield revenue, in an aftermarket parts business the part needs to be supplied even if the model has failed.

A simple example here is of a new auto

the AftermArket pArts business is A cAsh cowAs it cAn offer hiGh mArGins rAnGinG from 30 percent to 50 percent


Factors Introduction Growth Maturity/Saturation

Decline Obsolescence

Inventory Model

Allocated by Marketing

Forecast based

Forecast/Replenishment

Replenishment Made to order

Days of cover Very High High Low High Nil

Prime Objective

Product Availability

Business Business Service Obligation

Service Obligation

Service Level Promise

Very High High High Medium Low

Prod

uct S

ales

A robust product life cycle management can help track the movement of parts from the runner

stage to the obsolete

Negotiating The Product Curve

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72

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OEM introducing a new model and two variants of that model every year. Starting with 3,000 parts, in six years time the aftermarket business of this OEM shall have at least 30,000 parts. This explains the relevance of having a robust product life cycle management for the aftermarket business in order to track the movement of parts till it reaches obsolescence.

On the OEM’s part, it needs to def ine a specif ic service level based on the age of the model so that aftermarket business can plan procurement, stocking, and servicing strategies. In developed countries, OEMs try and standardize as many components as possible so as to avoid parts complexities. This standardization is possible more in commercial vehicles and farm equipment.

Forecasting And SourcingAftermarket business deals with SKUs in tens of thousands. Naturally, not all the parts can be forecasted. In fact, only fi ve percent of the master list can be forecasted with an accuracy of 75 percent on a monthly basis.

The suppliers of the aftermarket business are usually the same as that of OEMs. An OEM could have 100 or more suppliers. For a supplier, the volume of business from OEM is higher than the OEM’s aftermarket business.

Also, the aftermarket business needs

variety of parts whereas OEMs need only few parts but large in number. It would be diff icult for suppliers to supply large number of parts in smaller sizes as well as sporadic demands. Exceptions to this norm are parts regularly changed in an automobile.

With component manufacturers also supplying, OEMs would seem to be competing with their own suppliers. So, suppliers mainly prefer to focus on OEM supplies followed by their own aftermarket channels to the service market and f inally the aftermarket business units of OEMs.

Indian OEMs have realized the importance and complexities of spares business and have initiated measures like part rationalization (common parts across models). Additional measures are development of specialized vendors for manufacturing slow movers in smaller lot size, building “slow movers’ warehouse” etc to manage low-end repeaters, strangers and obsolete parts.

Moving ItThe service levels def ined at the end customer level and the costs involved in maintaining stocks at multiple locations def ines the distribution center (DC) strategy – whether to have a single distribution point or multiple distribution points in

with GrowinG volumes And hiGh service level eXpectAtions from customers, oems Are evAluAtinG the ideA of hAvinG multiple distribution centers

Service requirements go up for popular parts

F(ast)

Service Requirements

Order Lines

Sales & Lifecycle

A

B

C1

C2

D(ead)

M(edium) S(low)

H(igh)

I(ntermediate)

L(ow)

Value

Cost

Inventory Risk

Availability Goal

When Service Is King

Company Im

portance


AftermArket business deAls with skus in tens of thousAnds. only five percent cAn be forecAsted with An AccurAcy of 75 percent

proximity to the customers. From having one warehouse per state which was driven by central sales tax (CST), the aftermarket business has moved to single warehouse for the country to avoid building up of stocks.

But with growing volume and increasing service level expectations from customers, OEMs are evaluating the idea of having multiple distribution centers. Mature automobile markets have already moved to the concept of having multiple DCs for better service, while mitigating the risk of dependency on one location. The number of stocking points is mainly driven by having a network of suppliers, dealers/stockists across the country.

For inventory planning, the SKUs in aftermarket industry need further classification. At Miebach Consulting, we have been successfully using a unique four-dimensional matrix categorization principle: business contribution (measured by sales), frequency of orders (measured by number of orders in a year), expensiveness of the SKU (measured by price), and regularity of demand (throughout the year or seasonal or sporadic). Service requirements are higher for parts that sell more often as well as are regular in demand. If the part is very expensive, the inventory to be maintained has to be relatively low and vice versa (see box: Service Is King on page 48).

The decision of housing the inventory at a central distribution point (in case of single distribution point strategy) or at individual nodes (in case of multiple distribution point strategy) needs to be calculated based on the service levels targeted. The initial investments in the multiple distribution point strategy are higher vis-à-vis the single distribution point strategy. But this additional investment is expected to give good returns due to increased service level.

Inventory gets duplicated in a multiple distribution point strategy. For example, runners and repeaters will be maintained at all distribution nodes, while strangers only at one distribution node. Indian firms operate with an average of 55-60 days (in case of 2-wheelers, it is < 30 days due to factors such as economies of scale and greater control over suppliers) of aftermarket parts inventory – a majority of which is contributed by slow and non-moving parts.

The Future The standard of manufacturing and the quality of automobiles in India has improved drastically over last two decades. An increase in parts quality means a reduction in the consumption of aftermarket parts per vehicle.

But this is far from the truth. The penetration level of automobiles in India is still at a low level – e.g., in India it is only 0.75 percent – but this base is expected to increase. Moreover, the aftermarket business of OEMs account for only 35 percent of the total market, while the remaining is with component suppliers and spurious suppliers.

Large business houses have sensed the huge hidden potential in this segment and are investing to capture a pie of this market. Some potential competitors include AC Deleo (GM subsidiary), Reliance (RCare), Bosch India Service, My TVS / TVS Express, Castrol Car Zone, Carnation, Mahindra First Choice, shops promoted by insurance companies, etc. These organized multi-brand service networks will compete with OEMs’ service network comprising automobile dealers and authorized service centers.

The central procurement of these multi-brand networks will help them gain economies of scale and a higher bargaining power. What is more, these service networks can procure directly from the auto component supplier at lower price than from OEMs’ aftermarket parts business. This will result in some price correction by the OEMs.

Another increasing trend is the increase of stockists or the trade channel. Despite the vast geography of our country, the penetration of dealers and authorized service centers is still poor. Hence, automobile manufacturers are depending more on the trading channel to reach retailers and mechanics in remote corners of the country.

With increasing competition, OEMs are realizing the importance of aftermarket parts business as a source of cash prof it which comes handy during downturns. This has resulted in a total revamp of the supply chain strategy. The days are not far when the service levels of aftermarket businesses in India will be comparable to that of global standards.

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INDIA| September 2010 | www.logisticsweek.com50

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As the average consumer sloughs off his anything-will-do attitude and embraces trendy fashion, enormous opportunities await enterprising logistics players in the apparel industry. Pamela Cheema reports

AppArel

logistics

GoodLooking



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Rising affluence, increasing disposable incomes and unparalleled exposure to

the outside world have sharpened the average Indian’s fashion sense so that fashion in its intricate dimensions, including prêt and couture, is deeply appreciated.

In this developing matrix, logistics in the world of apparel presents an invaluable business opportunity. Canny retailers and 3PLs are already tapping into an industry which is readying for solid growth in the near future.

Franchise India Holdings Ltd, an integrated franchise solutions company, released the Fashion and Lifestyle Franchise Report 2009-10 in November last year which specified that the Indian retail market will be worth $535 billion by 2013. According to the report, the apparel retail industry is worth $25 billion and with business likely to escalate in the near term, the industry presents an opportunity for rich pickings by astute retailers and enterprising LSPs.

retailer’s StrengthIn the Indian fashion industry, logistics is often the forte and the strength of the retailer. A distinctive example of this business model is Shoppers Stop which utilizes the services of a 3PL for just manpower, while retaining authority over and managing its own warehouses, standard operating procedures and Warehouse Management System (WMS). Devdas Nair, Head, Supply Chain and Mission Control, Shoppers Stop, believes that “very few 3PL companies provide end-to-end solutions. If I were to use a 3PL, I would expect one company to give me integrated and complete solutions. There are companies which say that

Anoushka Shankar models an

outfit from Shoppers Stop

#225, ST Bed Extn., 5th Main, Koramangala, 4th Block,

Bangalore 560034, India.Tel : +91 80 40833366 www.uniworld-losgistics.com


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every day,” explains Nair. “It tells us which racks to go to and pick up various stocks. We dispatch stocks on a daily basis across the country – our large stores receive supplies every day from our DCs, while smaller stores receive fresh dispatches two or three times a week.”

When the apparel arrives at the retail outlets of Shoppers Stop, they are first transported to the receiving bay of each store where the store official in charge of each bay receives the stocks and then shifts them to their respective display counters.

Elaborates Nair: “We prefer to receive our stocks early in the morning around 8.30 am as we want them on display before the first customer walks in.” If there is spoilage of certain goods, the products are returned to their respective warehouses and then transported to the individual vendors.

at ParAs a pioneer in retail, over the years Shoppers Stop has attempted successfully to improve its supply chain methods. In its furtherance of this objective, the company has instructed its vendors to pre-tag their goods with the Shoppers Stop barcode, thus saving valuable time at the Distribution Centers. In its latest initiative at absorbing and implementing superior standards, Shoppers Stop has decided to adopt

they are doing so, but I find them much too expensive.”

Nair has been a part of Shoppers Stop for the last 15 years and has been deeply associated with retail logistics for 23 years. Seated in a small conference room in his office at Malad, Mumbai, one can’t help observing his infectious enthusiasm for logistics. The enthusiasm extends to group motivational office activities, evident by the Shoppers Stop anthem which plays on the office speakers at 10.45 am sharp every day. The anthem, hadh se aage bhi ek hadh hai sung soulfully by Sonu Nigam, is three minutes long and has lyrics penned by Gulzar, informs Nair.

In the conference room, Nair discusses with us the supply chain strategies that have been so effective for this retailer. Shoppers Stop has shrewdly devised exceptional and time tested supply chain strategies which have helped the ascent of the corporate in the retail market. The company’s wares comprise of 60 percent apparel and 40 percent non-apparel products. It has 800 vendors across the country who deliver goods to four regional Distribution Centres at Delhi, Mumbai, Bangalore and Kolkata. “The manpower employed in these warehouses is fully outsourced,” says Nair. “However, transportation of goods to these DCs is done by different companies.” From the DCs goods are

conveyed to 32 stores of Shopper’s Stop across the country.

The company uses the services of the 3PL, Toll (India) Logistics, to distribute goods in the western and eastern regions of the country. Toll also handles warehouse operations inside the DCs in these regions – its work encompasses management of the DCs, stacking, racking, etc. Shoppers Stop has also hired another significant third party logistics company, AFL, to transport its goods across the country, including conveying goods from certain vendors to its DCs as well as assisting the company with reverse logistics. The southern and northern markets of the country have been parceled off to local players who have expertise in apparel handling.

Intelligent use Of ItShoppers Stop has refined its supply chain strategies by intelligent use of IT tools. Each Distribution Centre is equipped with a Delivery Authorization System which specifies the volume of inventory that should be retained in a particular DC. The Merchandise Management System (MMS) is employed for purchase orders, while the Warehouse Management System (WMS) electronically improves the efficiency of multifarious activities in the warehouse. “In addition, we run the Auto-replenishment System

Devadas Nair, Head, Supply Chain & Mission Control at his store Shoppers Stop has improved its SCM methods

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James KeeganVice President of Supply Chain & Logistics Asia Pacifi cSchneider-Electric

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the GS1, a global standard barcode, which is used worldwide and can be read across the globe. The corporate will instruct 60 percent of its vendors to employ this barcode so that its goods may even be sold internationally.

In the fiercely competitive slugfest that is the retail market, efficient supply chain strategies are often a pointer to success. Mulling over the issue, Nair notes that “the success of a fashion retailer can be depicted with the triangular model of supply

chain. Of course, the pentagon model of supply chain is also used by companies successfully.”

The triangular model is a lean design, with the supply chain network spread out evenly between the vendors who supply goods to various logistics players, who in turn using various IT tools, fulfill customer demand. The pentagon model is dependent on the location of the Distribution Centre, the product, its price and quality, the service skills of staff in the stores, the ambience of the store and the

deft positioning of the product and promotion campaigns.

However, Nair emphasizes that “if you are strong in the triangular model, you will succeed in the pentagon model.” In addition, the corporate has formulated innovative solutions which aid its supply chain architecture like the PFP (Partnership for Progress), a platform where Shoppers Stop meets at least 60 percent of its suppliers once a year to develop a cordial working relationship with its vendors.

Much of the corporate’s success can be traced to its reliance on technology. Its IT tools like the Perpetual Inventory Count System (PICS), WMS, ARS, etc. are sourced from the JDA-AS 400 ERP package. Nair swears by IT and insists that “it can do miracles. If you have 10,000 walk-ins in your store, you must know what your customers want. This can only come with robust and state-of-the-art technology.”

Spread Of apparel LogisticsOpportunities in apparel logistics have benefited 3PLs who have specialized in the field to spread their wings. Future Supply Chains, for instance, accepts orders from not just the Future Group, but other business entities as well. P V Sheshadri, Head, Warehouse Operations, Future Supply Chains, reveals that the company “spent one and a half years upgrading its supply chain methods.” The company has five fashion Distribution Centres which run on ARS and support the Big Bazaar fashion label at Bangalore, Hyderabad, Bhiwandi, Kolkata and Hasangarh (Haryana). Two Distribution Centres supply fashion products to Pantaloons from Bhiwandi and Kolkata.

Like Shoppers Stop, Future Supply Chains maintains systematic and clean SCM strategies. Says Sheshadri: “We believe in the merchandise hub concept. For instance, all the vendors in the north will supply goods to just one DC in the north from where they

The Pentagon

The Pentagon is customer centric and customer facing The retailer can impact the customers’ perceptions, by

leveraging the above elements

Positional

Promotional

ServiceKnowledgeClimate

SizeLocation

Layout & Design

PriceQuality

Communication

Place

Product

Style & Fashionintnesity

assortment

People Value

The pentagon model of supply chain, also applicable to apparel

Systems

Logistics Partners

The Pentagon & The Triangle Model (SRM is copyright model of Dr.Douglas J.Tigert)

Strategic retail Management (SrM)

Communication

Place

Product

People Value

Sou

rce:

Pro

f. T

iger

t, B

abso

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The triangular model is successful in apparel supply chain


are distributed to other areas. This has several advantages, for one, all the documentation is completed at just one place. Besides, there is a consolidation of load and we are also able to give our customers good and standardized packaging.”

All the Distribution Centres of Big Bazaar and Pantaloons run on INFOR, an American WMS software, which through its track and trace capabilities is able to check the movement of goods in transit. At the DCs, pickers have been supplied with hand held terminals which double up as small computers, aiding the pickers in choosing the right assortment of goods. “Once a picker completes his work, the stocks go into an outbound area where they are loaded and documents are then generated,” reveals Sheshadri.

New tech Future Supply Chains has further strengthened its technology in DCs by investing in Put-To-Light (PTL) systems, new technology which provides a further impetus to batch

picking and sortation of products. This technology is being used for the first time in India and results in an appreciable spike in the volume of goods which are being picked and conveyed to its stores across the country. PTL is a light-directed sorting system which increases speed and distribution of products to retail outlets, with less manpower and markedly less scope for error. Says Sheshadri: “It is highly scalable on both fronts – the number of SKUs as well as the number of stores.”

Efficient technology like PTL has enabled Future Supply Chains to serve its Big Bazaar and Pantaloons fashion labels with unfettered ease. This is an undeniable advantage as Big Bazaar has 134 stand-alone stores and Pantaloons 49 stand-alone stores across the country. “Our fill rate has also increased,”reveals Sheshadri. “About two years ago it was 67 percent and now its 95 percent.” He is also resolutely convinced about the efficacy of IT tools in sprucing up supply chain strategies – “without them you can

Our company spent one and a half years upgrading its supply chain

— PV SheshadriHead, Warehouse Operations,

Future Supply Chains

never fulfill customer demand,” he emphasizes.

Good times aheadAnother 3PL company, DHL Express, is endeavouring to strike pay dirt in the fashion industry. It has signed on business groups like the Rose Group, the Murjani Group (which has the franchise for labels like Calvin Klein and Tommy Hilfiger) and Priority One Marketing, offering them logistics and supply chain support. It is also partnering with Lakme Fashion Week for the sixth consecutive year for its event from Sept. 17-Sept. 21 where DHL Express and its domestic arm, Blue Dart, will offer logistics support to any designer.

Apparel logistics appears to have a bright future in India. As the average Indian consumer sloughs off his anything-will-do attitude and assimilates trendy fashion concepts, enormous opportunities will unfold before the enterprising logistics player. The logistics industry must thus reinforce and sharpen its skills if it wishes to reap benefits from the apparel industry which is galloping towards growth.PTL installation at Kalyan DC of Future Supply Chains


< Guest feature

Despite the hundred percent FDI in cold storage infrastructure, the cold chain story is yet to take off

Piyush shahAssistant ProfessorOperations,SP Jain Institute of Management and Research

Cold Chain

58

India consumes more than 14,000 truckloads of vegetables, 9,000 truckloads of fruits, and milk enough to fill 89 Olympic-size swimming pools,

every single day. While fruits and vegetables are subject to seasonal production and have a year-long consumption, milk and meat have a small shelf life.

In terms of transportation, there are only about 5,000 reefer trucks that move non-milk commodities across the country. Then there is the fabled 30 percent wastage. Around 25-35 percent of the total produce of fruits and vegetables (F&V) worth `35,000 crore are wasted. One vegetable – the potato – accounts for almost 90 percent of the total volume of cold infrastructure.

Guided by such statistics, an integrated cold chain seems to be the obvious answer. A topic that has been subject to numerous trade conclaves, academic papers, debates, etc. However, after so many years of hard deliberations we seemed to have reached nowhere. India’s global food export stands at a mere one percent of its production in spite of being the world’s second largest producer of fruits and vegetables. A significant majority of the exports is for the less quality-conscious Gulf region.

We have only two companies, Radhakrishna Foodlands and Snowman, dictating a small segment of the cold chain in poultry. There is no comprehensive national policy that promotes farm to fork cold chain. Technically speaking, we continue to use archaic technologies and poorly designed cold storages.

the scene todayThe cold supply chain business has obviously not lived up to its promise. The grassroots level revolution that has been on eve for so long just did not happen.

Our cold storage story dates back as far back as 1938. It was set up in Meerut for storing potatoes. There has been no significant change in the last 70 years. Overall, our cold storages can store around 22 million metric ton. Of this, Uttar Pradesh and West Bengal have 65 percent of the installed capacity. While we have one case of McDonalds in India which uses smart temperature-controlled supply and distribution, we also have many companies whose food stock is met with rejection in Europe.

So except for a few examples, India has a totally un-integrated cold supply chain. In some pockets, individual entrepreneurs have ventured into the cold storage business. Most of these are of poor technical design and do not adhere to the international standards of storing and stacking. Pharmaceutical companies in Asia and the USA are constrained by laws to use the cold chain for their supply chain; in India the companies hardly use the cold chain.

With regards to the dairy industry, there are few large organized players – despite the year long demand. In ice creams, small players have as much as 35 percent of the market share. Overall, the scene in the cold chain supply chain seems like the next big thing that never happened, a sort of broken promise.

Regulations in cold storage infrastructure allow 100 percent Foreign Direct Investment (FDI). This consists of coolers, warehouses,

Frozen in Time

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reefer trucks, retail locations, chillers, etc. The Union Budget of 2010-11 provided for accelerated depreciation among other benefi ts. Yet very little FDI or local investments have come in. The technology used continues to be archaic. Many cold warehouses are nothing but a large shack cooled by some equipment. Temperature zoning, air curtains, air locks, etc. are not being used effectively or at all.

the economics Of Cold storageThe supply chain for fruits consists of four major players -- the farmer, the buying agent/wholesaler and the retailer. One of these four players would have to take up the responsibility of storage. Storage, by any player, happens when the storage cost is lower than off-season price trend. The storage cost comes at a price, since with storage the cash infl ow is pushed forward into the future. It also includes the cost of loss during storage, which includes a cold storage direct cost and an element of risk margin. The risk margin is an indirect cost.

Marginal farmers have few resources to invest in to build up their own warehouses. Crops like potatoes are stored by farmers in shacks at an ambient temperature, and do not invest in any new cold storage equipment. Over days, this causes a reduction in the produce of around 20 percent. The farmer bears this loss.

Brokers, on the other hand, are players who operate at low volumes and signifi cantly high margins. Their skill lies in acquiring produce at low cost and selling it off to wholesalers as fast as possible. They do have access to capital required to set up cold storages. But since they earn high margins, they have little incremental revenue to gain by way of additional investments. Same is the case with wholesalers. The retailers are too small to invest.

Most cold storages are designed for a single product. This is because every product needs a

specifi c storage temperature and humidity. Such specialization creates high utilization during the harvest period and a lull in between. The national average for utilization is lower than 50 percent. Thus cold storage owners are compelled to charge higher prices for the products stored in the off seasons to recover the cost of capital. This dissuades others from using the service and creates a vicious circle. High price of storage leads to less users, and less users cause prices to go high.

Another issue is the absence of well developed futures market for agriculture and lack of information availability. There is drastic fl uctuation in prices and players are not sure of their realization. There are numerous players between the producers and the consumer. The long chain adds to the information distortion. Users of cold storage thus keep a high element of risk margin. The unsure a user is about future price, the less he is likely to invest additionally in cold storage.

Most existing warehouses in India are nothing but corrugated metal sheets covering a piece of land. They are extremely low cost to erect and maintain. Goods are typically dumped at a location and then somehow recovered and forwarded. A medium sized storage of 5000 MT would cost around `2 crore to set up. The warehouses need technical people to maintain it. The existing breed of warehouse owners is in no position to handle this business.

Modern organized retailing has not been much organized across various business processes. Most chains are struggling for existence and their immediate attention is defi nitely not something that entails a huge capital investment. They still need to learn the art of selling as a chain, develop better merchandising policies and improve in-store management before they can be expected to focus on cold chain logistics. Also F&V constitutes a very small part of their sale. They can’t be expected to invest in cold chain infrastructure.

The last problem is the regular availability of electricity at reasonable rates. This is a major problem in most Indian cities. Keeping a diesel generator back-up set seems sensible, but this is bound to increase capacity cost.

there is nO cOmprehensive natiOnal pOlicy that prOmOtes farm tO fOrk cOld chain. We cOntinue tO use archaic technOlOgies and pOOrly designed cOld stOrages.

INDIA| July 2010 | www.logisticsweek.com 60

Vapor absorption system (VAS) has high capital cost but lower operation cost. Again, VAS is unsuitable when cooling temperatures are less than 10oC. In Vapor Compression Systems, there are again three types and the usage depends on the cooling temperatures and the arrangement inside the cold storage.

technology issues

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the unhealthy equilibriumThe various problems have created a sort of an equilibrium situation. Players have accepted that some part of their produce is going to waste and so price their wares accordingly. This is a major reason for the exorbitant price escalation from the farm to the consumer. This has also curtailed the availability of certain fruits and vegetables in parts of the country.

In the export market, Indian fruits and vegetables are exported as commodity products majorly to the Gulf and East European region. The two regions alone make up around 90 percent of India’s agriculture exports. Here again, instead of selling produce to the highly profitable European and American markets, exporters have compromised and sell in markets that are less quality conscious.

In the case of local consumers, while it becomes necessary for them to buy, they limit the purchases to an absolute minimum. This limits the scale of operations in the market. Lack of proper storage facility has ensured that Indian fresh foods have a limited international market and in turn low export revenue.

the OpportunityThe seemingly discouraging situation is in fact a big opportunity. One good thing is the government intent to support the establishment of cold chain infrastructure. There are no restrictions for FDI here.

A CII task force has recommended the creation of a Green Grid. The grid will ensure availability of fresh foods, dairy products, etc. in a seamless manner across the country. Virtual Private Network (VPN) and satellite communication technologies are being explored to ensure last mile connectivity and fast information availability. Significant investments have been planned in the 11th Plan for provision of refrigerated containers and vehicles.

The need of the hour is for an organised player to enter this domain with a sound business proposal. The Green Grid has to be implemented along with cold warehouses at specific farm, district and central locations. Entrepreneurs and business houses need to create a network of service providers who can build and provide warehouses and reefer trucks so that seamless service is available to an entire area. The sound model created by

Pepsi and McDonalds in India can benefit every business entity.

It will be difficult for the cold storage and transportation service provider to be merely an infrastructure operator providing services. But involving more people could increase the number of players in the already long supply chain. That India’s farms are fragmented and largely rain fed is a reality that cannot be changed easily. The largest proportion of wastage happens close to these farms and possibly locating the cooling infrastructure there would be the greatest opportunity.

Entrepreneurs would need to create trust among these farmers and have a process of being able to deal with the large number of small farmers and each possibly having different variety. That would require working with the farmers, creating a uniform variety, increase yield and help the farmer earn a higher income from the same farm. A farmer whose basic needs are met with is more likely to welcome the opportunity of using advance services than a marginal cultivator who is trying to make ends meet.

The technical issues of a cold chain need to be kept in focus. Potato stored for seeds can be stored at higher temperatures as compared to potato stored for consumption. However, in absence of temperature control the entire lot is stored together. A multipurpose warehouse with the right technology (see box) have to be set up so that they can be used throughout the year. The focus would be to ensure good utilization, low energy usage and maintaining the right conditions necessary to store the produce.

Last WordSomewhere the talks and newspaper reports on events in the cold chain logistics has to transfer into action. We need another ground based approach, something like an e-Choupal, which interacts with users closely. The false equilibrium that forces low quality has to be broken. Cold chain infrastructure provides us with a business case that has national appeal. It is about benefitting the farmer with higher prices and the consumer with lower prices simultaneously.

Overall, the scene in the cOld chain supply chain seems like the next big thing that never happened, a sOrt Of brOken prOmise.

The author can be reached at [email protected]

Adv. size 206x270 mm

Saving Food....Feeding IndiaOur Integrated Cold Chain Solutions

Imprint Feature

Food for Thought

Crystal group, an Indian 3PL service provider, offers customers services in the cold chain logistics sector with specializing in refriger-

ated trucks. The group also has diversified activities in the earthmoving equipment, automobile dealer-ships and reefer trucks.

The company offers cold storages, refrigerated warehouses and pre-cooling containers for the han-dling of temperature sensitive products. Along with a fleet of 125 refrigerated trucks of various capaci-ties and 40ft reefer storages, Crystal group operates pan-India through a network of offices.

Crystal plans its business model in compliance with global accepted best industry standards, to ensure safety and freshness of consignments during transit. Also goods are handled with utmost care right from the point of loading till the delivery stage. Customer con-signments are monitored at all times during transit to ensure optimized temperature control at all times.

With the plan of integrating their cold chain net-work across cities in India, Crystal group intends to open cold storages across different locations in the country adopting a hub and spoke methodology to cater to the food industry. Plans have also been made to invest 55 crore rupees towards the acquisi-

Akash AgarwalManaging Director, Crystal Group

1. What is your opinion about the poten-tial of cold chain industry in India?

There is great potential for the Cold Chain Industry in India. In fact we are still at the early stages of cold chain. The potential really lies in the Retail Sector to grow in a big way. Once the green revolution of Food processing Industry starts there will be huge requirement for cold chain logistics.

2. What are the present initiatives and services available at your company related to the cold chain products and services?

We FOCUS in a big way into cold chain services: - 1. Refrigerated trucking 2. Cold storage spaces3. Portable Cold Storages.4. Genset Trailers5. LCL and FTL of Temperature sensitive cargo.6. We provide services on an ALL India Level for Refrigerated Cargo for All Tem-perature

We are planning to offer the customer one stop solution for all cold chain services. We have taken various initiatives: - 1. We have recently concluded our ISO Cer-tification 9001:20002. We have initiated GPS in all vehicles. 3. We have Temperature Data loggers.

3. What are your future plans and pro-grammes about cold chain?

Our company plans to implement a cold chain Hub and Spoke across major cities for movement of pharma products. We have a fleet of 150 Reefer trucks and Trailers and plan to add another 100 by 2011.

We plan to open a Cold hub for Storage of Temperature Sensitive cargo in Panvel

which would be for the Storage of Pharma-ceutical products.

We have also procured land in Kolkata for development of similar facilities for stor-age of Food products.

We plan to have 4 Distribution centers in the 4 major cities.

We plan to use IT based services in our operation systems and want it to play a ma-jor role for our growth plans. 4. Is there any bottleneck against devel-oping cold chain industry in India? What support do you expect from the govern-ment to develop the cold chain industry in the country?

There are quite a few bottlenecks in the developments of CC. 1. High Capital cost of setting and running a Cold chain logistics.2. A lot of training is needed for the running of CC storage and movements.3. High amount of blockages for availability of cargo. 4. Very High risk of product damages en-route due to Aircon machine failure. 5. Lack of availability of Spare parts and Technicians. 6. There is complete absence of Support for Enroute breakdown of Aircon Machine.7. No Trained Manpower.

The government is doing there bit by promoting the Food processing industry in India which will help develop the cold chain in India.

Few points about Crystal .We at Crystal would like to add this that we take a lot of care for training of our man-power and see that we carry the product under :- l Right Tempreture l Right Time Delivery

tion of 100 refrigerated trucks. All trucks by Crystal Roadways; a division of Crystal Group are equipped with GPS and data loggers enabling constant moni-toring of consignments at all stages of transit.

Operations are expected to commence at cold stor-age facilities in Mumbai and Kolkata in 2011 followed by Hyderabad, Chennai and Bangalore by 2012.

Established by Murarilal Agarwal in 1983, Crys-tal Group has made its mark in the cold chain logis-tics sector. Today ML Agarwal, Chairman of Crystal Group is assisted by his sons, Rajesh, Naresh and Akash as directors in his business.

Crystal Group has taken all the right measures to ensure a strong presence when the cold chain industry opens up in India

Imprint Feature

Vigilante on the MoveCan you take us through RFPL’s histo-ry, major milestones and track record in the Supply Chain Management industry?Radhakrishna Foodland Private Lim-ited (RFPL) was established in 1988, as a captive outfit for its other group companies’ requirements. In 1994, McDonalds India chose RFPL as its in-tegrated supply chain partner. Since then, RFPL has built on its strengths to successfully establish a leading posi-tion in one of the most demanding markets in the world. RFPL’s serviced sectors include: Food Service, Retail, FMCG and Agri Products. We are proud to have as our clients, some of the world’s most prestigious brands: Subway, Pepsico, Bharti Walmart, McDonalds, Sodexho and Cadbury.

What are RFPL’s core service offerings and serviced sectors? Our 4 core service offerings include: l Warehouse ManagementlTransport ManagementlValue Added Services lProject Management & Consultancy

RFPL has emerged as the trusted part-ner in India (one of the most demand-ing markets in the world), for some of the world’s most prestigious brands. What is your differentiating factor? Our differentiating factor is clearly our people, our passion and our deep commitment to effectively serve our clients, everyday. Our indepth under-standing of the points of sale/con-sumption also empower us to tailor our “functionally excellent” supply chain solutions for every client, there-by ensuring higher levels of on-shelf availability and customer service.

Our service orientation and the ability to anticipate, adapt, evolve and innovate with each client or situ-ation has enabled us to emerge as their trusted partners.

What are the Value Added Services offered by RFPL? Elaborate on their use, advantages and impact on cli-ents’ businesses?Our Value Added Services include a bouquet of customized service offer-ings such as Inventory Management, Co-Packing, Re-Packing, Retail Solutions, Procurement and Reverse Logistics.

Our detailed-oriented approach to

each project’s unique needs, coupled with our ability to challenge and re-engineer existing solutions seamlessly, enables us to differentiate our service offerings and bring significant value to our clients in the form of cost optimiza-tion, better operational efficiency and superior customer service levels.

Can you elaborate on RFPL’s latest offerings: Project Management & Consultancy? What need does it ful-fill for a client; what are the services offered and which customers would benefit with this initiative? RFPL’s Project Management service offering to the Supply Chain Indus-try is a structured and innovative approach to Supply Chain solutions. Our experience garnered over three decades across various industry verti-cals, enables us to present independ-ent and non-conflicting services to each of our clients.

Our team comprises of special-ists in conceptualization, design, engineering and commissioning of National Supply Chain Networks, leading to supply chain optimisation through seamless and effective offer-ings that include:

lSupply Chain Improvement Programs

lNetworklWarehouse DesignlSupply Chain PlanninglTransport Management lSystems OptimizationOur deep understanding of critical areas of the supply chain allows us

to effectively identify key areas for improvement that impact cost effec-tiveness, efficiency and reliability of the entire supply chain network.

What are the other main/distinguish-ing service offerings at RFPL? Our understanding of capacity utili-zation, productivity, inventory, cost, Waste, Error & Theft (WET) manage-ment along with our ability to con-stantly track, trace and tally these metrics enables us to help our clients grow their business more efficiently, improve working capital cycles, re-duce total system costs and more importantly assure profitable sales growth for the clients’ brands.

What is your Brand Protection offer-ing and how does it impact a client’s business in real terms?RFPL is committed to protecting the clients’ brand by ensuring business continuity and total system integrity. Our indepth understanding of India, and the divergent supply chain chal-lenges faced here, has enabled us to develop systems and processes that mitigate risk and fuel sustainable business growth.

In our endeavour to consistently serve our customers better, we have successfully adopted a “Zero-Toler-ance” approach to Quality, Health, Hygiene, Safety, Environment, Main-tenance and Compliance. Our com-mitment to the communities we work in, is reflected in our policy of inclu-siveness that allows for local partici-pation and mutual growth.

Effective Supply Chain Management forms the backbone to many compa-nies’ ambitious growth plans – what is your approach to this crucial function?Focused Customer Service is at the core of our business philosophy. We believe that serving our customers better, allows us to grow. Our holis-tic approach to understanding the locations you want to reach, the for-mats of customers you want to serve, your product range and year round promotional cycles, enables us to ensure that your products are always available, at a competitive price and that all service level parameters are measured, reported and reviewed periodically, allowing for timely and effective corrective action.

Purvin PatelChief Operating Officer, RFPL


< BOOK EXTRACT

Green On The GoEffi cient fl eet management contributes signifi cantly to reduce environmental impacts and the cost of transporting freight

Movement towards Green Logistics starts with green transportation. For many people Green Logistics and green transportation are inter-

changeable concepts. However, his is not necessarily true since green warehousing is equally important, and there is frequently a tradeoff between green transpor-tation and green warehousing. For this reason, during the green supply chain planning stage, a holistic view of the entire supply chain is essential when planning a move towards green. Assuming that the green supply chain planning is carried out effectively, we can look at the greening of logistics through a sequence of activities that are designed to build on each other.

Firstly, effective use of the most appropriate trans-portation mode will not only reduce cost, but also re-duces the adverse impact on the environment. Organiza-tions should use the most effective and effi cient mode of transportation and, wherever appropriate, sea transport should be the primary mode of transportation to give ef-fective green transport. The next choice on a green basis should be by rail and then road and air transport. In gen-eral, the cheapest mode is also the most energy-effi cient with the consignment size and distance being two key determinants in the transport mode selection, along with the service/reliability aspect discussed earlier.

Having selected the most appropriate mode, it is cru-cial to make sure that the carrying capacity is utilized to its maximum on a weight or cubic basis both on the jour-ney out and on the return journey. Frequently road trans-portation companies quote prices on the basis that they will be backhauling empty, however effi cient transport organizations will try to ensure round trip vehicle fi ll.

Aligned with the above objective of maximizing uti-lization is the drive to reduce the number of movements through better planning of overall supply chains. Better load planning should result in maximizing the through-

GREEN SUPPLY CHAINSBy Stuart Emmett & Vivek Sood

Copyright © : 2010 by John Wiley & Sons, Inc. All rights reserved294 pagesPrice: NAMade available for extract by John Wiley & Sons


out of the transportation assets. Optimum route plan-ning will reduce the distance travelled while still achiev-ing the same throughput. A reduction in the number of trips to deliver goods whilst using the shortest route will usually contribute to greening the transportation activi-ties. This, at times, might mean pooling the deliveries to one destination to optimize the number of trips and thus delaying deliveries. The resultant delays can be commu-nicated and negotiated with the customers alongside the benefits this provides to the environment. Ultimately, of course, this will be a customer decision, which in turn may well be sponsored by consumer pressures for green transport, and of course those supplying transport or-ganizations which operate in a competitive supply mar-ket may also find they have to respond to such pressures.

Efficient fleet management contributes significantly to reduce environmental impacts and the cost of trans-porting freight. Some simple measures such as turning off the engines during pick-up and deliveries, proper tyre pressure, and appropriate vehicle speed will all reduce fuel consumption and subsequent emissions. When sourcing vehicles fuel efficiencies and design improve-ments should be taken into account. Appropriate driver training programmes can help reduce fuel consump-tion. Some organizations implement driver incentive programmes to recognize and reward fuel efficiency gains or fuel-efficient driving techniques. Timely in-spection and maintenance of vehicles can reduce break-downs and lower fuel consumption and emissions.

As a way of amplifying these points, in recent years, UK major fleet operators have reported the following savings:lmileage reduced by 15%;lCO2 emissions reduced by 23%;ldriver training brought a massive improvement in

fuel economy;lreduction of 1200 TEU (twenty foot equivalent)

freight container loads, per year by better container fill;

lPlans to reduce CO2 by collaboration to improve ve-hicle utilization, two-way full loading, improving routing, increasing vehicle fill rates, and schedul-ing in real time.

Many of the above initiatives are means of reducing the usage of fossil fuel as organizations should always be looking at ways of reducing the usage of fossil fuels and hence eventually contributing to the reduction in emission of greenhouse gases.

This could be as simple as switching to biofuels or other green energy sources for transportation. Newer technologies are being trialled all the time and organi-

zations should remain on the cutting edge in their quest to reduce the fossil fuel dependence. Indeed in some countries, like the UK, the reduction of fossil fuels and improving fuel consumption remains the critical aspect of their road transport operations. This is given full cov-erage in Emmett Excellence in Freight Transport (2009).

Finally, the integration of reverse logistics to a holis-tic view of green logistics is essential, in order to ensure that it does not remain an afterthought that causes seri-ous greenhouse gas impacts from inadequate planning and inefficient execution. In most companies reverse logistics is still an activity that is not planned. Many activities are still being arranged on ad hoc basis and negate the valuable work done elsewhere towards green logistics. In fact once the focus is put on proper integra-

tion of reverse logistics in green logistics, it is a relatively simple exercise to execute reverse logistics.

Green warehousing: starts with a green building. New warehouses are built keeping the green building principles at the forefront during the design and con-struction stage. Existing warehouses can be converted into green warehouses by incorporating the same prin-ciples as much as possible.

Green building is not a new concept. It has been steadily gaining momentum, especially as a result of analysis that revealed that more than half of greenhouse gases are released as a result of poor building tempera-ture optimization.

A significant body of work is available on this topic, especially targeting those people who are charged with design and construction of buildings. Suffice here to note that these principles are equally applicable to ware-house buildings.

Road transportation companies quote prices on the basis that they will be backhauling empty, however efficient transport organizations will try to ensure round trip vehicle fill


< PAnoRAMA

Strategic Retail Management

Sustainable Development In The Process Industries

The authors in their book, “Strategic Retail Management” discuss the dynamic devel-

opment retailing has undergone. It explains the various strategy concepts adopted by re-tailing companies and their implementation in practice forms the crux of the book.

Case studies in the book demonstrate the complex and manifold questions of retail management in the form of 15 lessons that provide an overview of key issues. Internation-ally placed retail companies have been used as examples to create a platform for understand-ing what is involved in strategic retail manage-

With their experiences in process devel-opment and chemical engineering at

Shell, the editors puts together a collection of works from international authors that not only explores but also demonstrates practical solutions for using sustainable technologies, focusing on three major points: people, pros-perity, and the planet.

Sustainable Development in the Proc-ess Industries details how worldwide im-plementation of sustainable processes in present-day industries can positively inf lu-ence the Triple P going forward, by lowering poverty, reducing pollution, and conserving

The authors with their experience with their academic experience in the fi eld of

energy explain how algae oil can be an impor-tant source of biomass. Moreover algae’s abil-ity to grow almost anywhere has encouraged scientists to also investigate its potential as a source of biodiesel. The book touches upon topics like algae culture and the application of algae biomass conversion products. It also re-views modern biomass-based transportation fuels, including biodiesel, bio-oil, biometh-ane and biohydrogen.

With each chapter the books opens topics in a way that would cater to an audience rang-

Algae energy: Algae as a new source of Biodiesel By Ayhan Demirbas, Muhammet Fatih DemirbasPublisher: SpringerPrice: Rs 7,800

strategic Retail Management: text and International cases By Joachim Zentes, Dirk Morschett, Hanna Schramm-Klein Publisher: GWV-ViewegPrice: Rs 1,870

sustainable Development in the Proc-ess Industries: cases and ImpactBy J. Harmsen, Joseph B. Powell Publisher: Wiley-AIChEPrice: Rs 3,980

OFF THE SHELF

ment and to present some best practices."Strategic Retail Management" is targeted

at practitioners and students in the consumer goods industry and in retailing companies, who are looking at obtaining compact and practice-oriented information on current retail concepts.

ing from a casual reader with a general inter-est in algae energy to an expert reader search-ing for in-depth scientifi c insight on the topic.

“Algae Energy” discusses topics such as: green energy facilities, algae technology, en-ergy from algae and biodiesel from algae.

resources. Instead of providing theories, the books aims at providing examples and case studies ranging from the petroleum industry to the water processing industry. The publi-cation also focuses on issues from a micro (molecules, unit operations, processes) to a macro level (industrial sites, value chains, regions, the world).

Algae Energy

• Need for Mechanization at Indian ports

• Draft Constraints (which hinder entry of

large vessels to most major ports)

• The Policy Conundrum

• Regulatory Issues (The TAMP Factor)

• Labor Management at Ports

• PPP: Challenges and Opportunities

• Major and Non-Major ports: Lessons to

be Learned

• Epilogue

warehousing

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• Need for Mechanization at Indian ports

• Draft Constraints (which hinder entry of

• The Policy Conundrum

• Regulatory Issues (The TAMP Factor)

• Labor Management at Ports

• PPP: Challenges and Opportunities

• Major and Non-Major ports: Lessons to

• Epilogue

warehousing

HANDBOOK

Coming Soon!

Ports of India HANDBOOK

JNPT MaTerial HaNdliNg? gaTeway TerMiNal iNTerNaTioNal

PrivaTe liMiTed iNdia gaTeway TerMiNal PrivaTe liMiTed PSa

SiCal TerMiNalS liMiTed CHeNNai CoNTaiNer PrivaTe lMiTed

viSakHaPaTNaM MuNdra PorT kriSHNaPaTNaM PorT kolkaTa PorT

MuMbai PorT abg kaNdla PorT MarMugao PorT New MaNgalore

koCHi PorTkaraikal PorT digHi PorT dHaMra PorT PiPavav PorT

Haldia PorT ParadiP goa TuTiCoriN JNPT MaTerial HaNdliNg?

gaTeway TerMiNal iNTerNaTioNal PrivaTe liMiTed iNdia gaTeway

TerMiNal PrivaTe liMiTed PSa SiCal TerMiNalS liMiTed CHeNNai

CoNTaiNer PrivaTe lMiTed viSakHaPaTNaM MuNdra PorT

kriSHNaPaTNaM PorT kolkaTa PorT MuMbai PorT abg kaNdla PorT

MarMugao PorT New MaNgalore koCHi PorTkaraikal PorT digHi

PorT dHaMra PorT PiPavav PorT Haldia PorT ParadiP goa TuTiCoriN

JNPT MaTerial HaNdliNg? gaTeway TerMiNal iNTerNaTioNal

PrivaTe liMiTed iNdia gaTeway TerMiNal PrivaTe liMiTed PSa

SiCal TerMiNalS liMiTed CHeNNai CoNTaiNer PrivaTe lMiTed

viSakHaPaTNaM MuNdra PorT kriSHNaPaTNaM PorT kolkaTa PorT

MuMbai PorT abg kaNdla PorT MarMugao PorT New MaNgalore

koCHi PorTkaraikal PorT digHi PorT dHaMra PorT PiPavav PorT

Haldia PorT ParadiP goa TuTiCoriN

The handbook looks into all the issues related to the major Indian ports with experts’ views of a roadmap to possible solutions for ports

infrastructure and performance excellence. The main topics to be covered will be:

LOG.India and Logisticsweek present you ‘Roadmap to Performance Excellence’, a

Handbook on Indian Ports.


ResouRce centeR Journals, Case Studies, Research Reports

All-Weather Pneumatic SolutionsBy Martin Sanders

Sanders explains how optimizing the per-formance and reliability of rail applications can be particularly challenging when the operating conditions are stacked against you. Extreme weather, aggressive contami-nation and demanding schedules require engineering knowledge and products of the highest standard.

Pneumatics has been used throughout the rail industry for many years, and is today used to control everything from braking sys-tems to doors and toilets. One reason for this widespread use of compressed air systems is its ability to provide a simple and affordable yet also precise method of motion control both onboard and at the trackside.

The latest pneumatic components de-signed for extreme conditions have helped operators maintain the reliability of their fleet. New generation pneumatics technol-ogy has also proved considerably useful for controlling train tilting, pantograph and sanding systems, helping to make rail vehi-

cles energy efficient and cost effective.Search Tags: Martin, Parker, Hannifin, Pneumatics, Division,

Railway

Document ManagementBy Infonic

TNT Express, using Infonic’s Document Manager, has streamlined its proof of de-livery document processes. The system has been implemented at over 50 sites through-out the UK that handle over 80,000 deliver-ies a day.

To deliver around 18 million documents and parcels per annum, TNT Express em-ployed paper heavy business processes, of which "Proof of Delivery" is a key element. With the deployment of Document Man-ager, customers now have access to this information thanks to a corporate-wide proof of delivery capture and management system based on Infonic’s software.

PoDs are scanned at the relevant depot, automatically indexed and then uploaded at regular intervals to TNT’s head office in Atherstone and stored on TNT’s Storage Area Network (SAN).

Document management improved cus-tomer service, streamlined business proc-esses and storage of documents, easily integrates with business applications, and reduced paperwork.Search Tags: infonic, TNT, document management

Aviation Security By GAO (Government Accountability Office) USA

GAO describes how Transport Security Administration (TSA) has attempted to in-crease aviation security subsequent to the attempted bombing of Northwest flight 253 in 2009. To detect explosive devices on passengers, TSA has procured and deployed advanced imaging technology (AIT).

TSA’s checkpoint screening system com-prises three elements - personnel responsi-ble for screening passengers and baggage, the policies and procedures that govern the different aviation security programs, and the technology used to screen passengers and baggage.Search Tags: GAO, aviation security, TSA

Delivering Aircraft ValueBlogger: Airbus Airbus, to keep aircraft operational and cost-effective, makes sure spares and related services are available worldwide with the main spares center in Hamburg and several other spares centers. Airbus provides full spare parts data and provisioning support to operators, as well as offering 24-hour a day order desk services for all their maintenance and repair needs.

Through its customized Spares Logistics Service, Airbus provides lease/exchange/repair services including a guaranteed repair time. They also offer same-day spares delivery or just-in-time delivery to reduce the time it takes airlines to get spares by taking full responsibility for the supply chain, removing the need for time-consuming and costly middlemen.search tags: spares, Airbus, logistics, material, MRO

oil changeBlogger: PeR-oLA KnutAsPer-Ola Knutas writes about how Scania, a truck retailer, emphasises on how the right oil makes a difference, both for the truck’s well-being and for the environment. The right choice of oil means longer intervals between workshop visits.

“Oil is a spare part, and it should be given the same attention as other spare parts,” says Mattias Berger, responsible for engine oil testing at Scania. “A day not spent in the workshop is a day the truck can be out on the road making money.”search tags: oil change, Scania, Knutas

Innovation notes From IndiaBlogger: scott Anthony, Managing Director, Innosight VenturesDuring his visit to India, Scott gave two talks, in New Delhi and Mumbai — as part of a "Thought Leadership Series" sponsored by Transearch and Harvard Business Publishing. He visited Village Laundry Service, a business his company help launch in 2008 to provide affordable, high quality services for India's booming middle class.

He talks on how some call India a "nation of entrepreneurs". Spending time in India lets you know why. Changing the mailing address of his business took months. As his colleague Hari Nair said, "India is all about backups to backups." The Indian concept of "jugaad," which translates roughly to "get it done," is consistent with the habits of leading innovators.search tags: innovation, notes, Scott, Anthony

< PAnoRAMA

— Compiled by Frewin Francis

BLogosPheRe


< PAnoRAMA

ttI Algeciras Deploys solution For enhanced container operations

India Launches gAgAn For Air traffic navigation

The ministry for food processing indus-tries has inaugurated an e-portal that

aims to bring together farmers, suppliers and customers. The portal, www.e-freshin-dia.com, aims at empowering Indian agri-culture. Based on a food chain concept, it creates connectivity between the suppliers

and the buyers through a trading platform.The portal expects to increase farmers’

income through increased agricultural productivity and will specially focus on North-Eastern states.

Portal operators are expected to take this facility to the panchayats as most

farmer functions only through panchayats. The e-portal would also contain information regard-ing the connectivity of the farmer to the market and the cold chain available to him.

The portal has been developed by IL&FS Education and Technol-ogy Services (IL&FSETS). Initially available in English and Hindi, soon Marathi, Telugu, Gujarati, Kannada, Tamil and Bengali ver-sions would also be available.

Airports Authority of India and Indian Space Research

Organisation have developed a new GPS Aided Geo Augmented Navigation (GAGAN) satellite and will be launched soon to aid air traffic navigation in India and its neighbouring regions.

The system is expected to im-prove efficiency in the civil aviation sector, as well as increase fuel sav-ings, facilitate precision approach

at all runways, enhance air-to-air surveillance and reduce the work-load of air traffic controllers.

The project will involve the establishment of 15 reference sta-tions, three navigation land uplink stations, three mission control centers and three geo-stationary navigation payloads in C and L bands with all associated software and communication links.

GAGAN will be interoperable with the wide-area augmenta-tion system of the US, the ge-ostationary navigation overlay service of the EU and the multi-functional satellite augmenta-tion system of Japan.

Total Terminal International Algeciras (TTI Algeciras), the f irst semi-automat-

ic terminal in the Mediterranean area, oper-ated by the Hanjin Group, has gone live with the Real Time Locating System from IDEN-TEC Solutions, for the tracking and control of containers.

IDENTEC Solutions, in partnership with Hi-Tech Solutions Europe (HTSE), deployed active RFID and GPS-based technologies for a quay crane Real Time Locating System (RTLS) and automated transfer point management (TPM) system in the automated storage areas.

TTI Algeciras is designed to accommodate 1.6 million TEU's and IDENTEC’s RTLS is crucial to the terminal’s successful operations. The RTLS solution blends with active RFID to locate the ex-

act position of the shuttle vehicles no fewer than 8 STS cranes and then matches them to the container ID provided by HI-Tech’s OCR system, preset on the cranes. Tracking com-mences as soon as the shuttle departs the crane enabling and easy monitoring of the containers. The tracking data is then for-warded to the RMG (Rail Mounted Gantries) control system, to ensure precise container traceability.

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In a business environment which is slowing edging towards positivity, The Warehouse Handbook will be a wel-come reference tool for the logistics and the supply-chain industry. Also, with the passage of the much-awaited GST in April 2010, warehouses will move several steps up to highly automated Distribution Centres which will impact industry’s bottom-line. The Handbook will thus give a new perspective on the subject and enable industry to stream-line its operations and processes.

The various chapters of the book have been written by noted special-ists in the industry with the sole pur-pose of removing nebulousness from major aspects of the logistics business. The handbook covers the entire gamut from the present state of the industry, site selection, design and processes of a

The Warehousehandbook

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warehouse, to storage and mate-rial handling, information tech-nology and automation of a ware-house and the grossly neglected area of security.

Whether you are in the board-room or on the warehouse floor, this handbook aims to set you thinking about new concepts in warehousing and the urgent need to incorporate them in your business.

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< EVENTS

September 2010September 8-10, 20102010 emmA expo IndIAChennai trade & Convention Centre2010 EMMA Expo India, scheduled to be held in Chennai, will showcase the best in electronics, machinery, molds and auto parts industry. Analyzing the popularity of Taiwanese products in India, the organizer is set to reinforce the international competitiveness of Taiwanese industry and explore areas of expansion and performance in the Indian market. The highlights of the events also include participation of as many as 180 exhibitors from Taiwan, and a platform showcasing 250 exhibitors and 350 booths.

Machinery to be exhibited will include from the metalworking machinery, plastic machinery, food processing machinery, packaging machinery, and leather & shoe making machinery.Organized by: Taiwan External Trade Development Council (TAITRA)Tel: : +886 2 2725-5200

September 9 And 10, 2010IndIA oIl And GAS revIew SummIt And InternAtIonAl exhIbItIontaj lands end, mumbaiThe India Oil and Gas Review Summit and International Exhibition is a two-day event which has entered into its 17th edition. It is targeted at the domestic and international oil and gas industry. It covers the entire petroleum industry and proves to be vital in exploring various related industries also.

Indian and global expert speakers will focus on finance and technology – from various angles to bring out the best and profitable solutions in the overall petroleum sector ranging from exploration, production, refining, LNG, CBM and alternate energy options, hydro-electric and geothermal. Organized by: Oil Asia Publications Pvt. LtdTel: +91 22 40504900

September 10, 2010the rotterdAm ruleSxavier Institute of management, mumbaiCSCMP is organizing a Panel Discussion on September 10, 2010, to analyze the world’s frame-work for the maritime carriage of goods, known as the Rotterdam Rules (RR). A total of 21 countries have signed the convention since it was officially presented in Rotterdam in September 2009, and it is all set to be an international law.

The Panel Discussion will mainly touch ‘Should India ratify the Rotterdam rules?’

Participants at the discussion include: Samuel Darse, Deputy Director General, Shipping; Russi Cooper, Member, Panel of Arbitrators of the Indian Council of Arbitration; CR Nambiar, Chairperson,

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Committee, Bombay Chamber of Commerce & Industry; and Capt Dinesh Gautama, Vice-Chairman, Container Shipping Lines Association. Organized by: Council of Supply Chain Management Professionals (CSCMP)Rajendar JadhavTel: +91 22 32068811 / 3208822Website: www.cscmpindia.org

September 16 And 17, 2010Supply ChAIn And proCurement FrAud mAnAGementhotel Sahara Star, mumbaiOrganizations can be victims of fraudulent activities at every step in its supply chain both internally and exter-nally and through internal-external collusions. The failure to detect and reduce fraud at the source can lead to large financial losses as the fraud manifests itself through the supply chain and results in consumer injury and death.

Supply Chain and Procurement Fraud Management will address issues like this and more. Some of the topics at the events are Elements where supply chain fraud happens; Supply chain fraud identification checklist and minimization program; Preventing and detecting procurement and contract fraud; Corporate governance for supply chain operations; Vendor fraud prevention and value creation strategies, etc.

Each of the topics will raise pertinent issues related to fraud and mismanagement in supply chain. Reviewing supply chain fraud calls for looking at purchasing, accounting, manufacturing, distribution, shipping, sales order processing, inventory control, quality assurance, and fixed asset management. Organized by: Ron Evancia (CHECK WITH ASHOK)Tel: +91 22 2855 2007

oCtober 25-27, 2010SAudI trAnSteCInternational exhibition Center, dammam, Saudi ArabiaSaudi TransTec provides Saudi Arabia and the Eastern Province with a comprehensive exhibition in the region, covering all areas of transportation, mate-rials handling, warehousing and logistics.

Saudi Transtec will showcase Industries such as freight, shipping, aviation, ports, cargo, express, railways, material handling equipment & system pro-viders as well as supply chain and logistics, providing the Eastern Province with an essential networking and business forum for the Transport and Logistics sector.IES Srl - International Exhibition ServicesZ.I. SetteveneVia Cassia km 36,40001036 Nepi (VT), ItalyTel: +39 0761 527976

PAN India Warehousing (3PL/4PL)

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Primary & Secondary Transportation

In-transit Damage Reduction Solutions

Partnership in Road Safety Programs

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Audits & Benchmarking

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RNI No. MAHENG/2007/23777 l Registration No.MH/MR/South-279/2008-10Allowed to post at Patrika Channel Sorting Offi ce G.P.O. Mumbai - 400001 Date of mailing: 5th of every month issue

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LOG.India September 2010