LogisticsWeek Inaugural Issue August 2011

The government plans to create a Special Purpose Vehicle (SPV) to undertake studies of foodgrain storage handling and transportation.

Announcing this at the opening of the event, ‘Building Warehousing Competitiveness’ orga-nized by the Confederation of Indian Industry (CII) on July 28 at Chennai, Prof. K.V Thomas, Union Minister of State for consumer affairs, food and public distribution said, “The SPV will serve two purposes - one is the construction of godowns with modern temperature control and the other is for the movement of vehicles from the producing states to consuming states.”

Meanwhile, the draft National Food Secu-rity bill has met with initial approval and will be introduced in Parliament by December, the minister told the audience. Simultaneously, the government is strategizing to raise production of foodgrains from 55 million tonnes (mt) to 60 mt. This, Thomas said, will translate into allocation of `2,000 crore from the Rural Infrastructure De-velopment Fund to create facilities for enhanced warehouse maintenance.

According to R. Dinesh, Event Chairman and

Dear Readers,

Six years ago, we started the LOG.India magazine to serve the logistics,

transportation and supply-chain industry. Our aims were simple - to be the voice of the industry, be accepted and read by all but influenced by none.

I have to admit that at times it has been tough. The trade-publishing industry gets a bad rap for being a conduit for “paid news”. We have held our ground despite pressures and today LOG.India is the definitive voice for the industry.

With LogisticsWeek, we have entered a new chapter of trade journalism. For a year that our website www.logisticsweek.com has been online, we have got over 12,000 online subscribers and over 65,000 regular readers. Today, the site is easily the most read online resource for our industry globally.

The launch of this print edition was the next logical step in order to keep pace with our industry. LOG.India will remain the premier monthly magazine. LogisticsWeek, with increased frequency, will cover the latest in industry-specific news and commentary.

We owe our growth and success to your unyielding support. We look forward to your feedback and more importantly, your critique, of our new venture.

Sincerely,

Jacob Joseph PuthenparambilPublisherLOG.India, [email protected]

The SPV will aid in the construction of warehouses, while monitoring the movement of vehicles to states.

News DeskMumbai

National Register To Check Graft At RTOs

Point of ViewSupply-Chain For Food Security Prof. Viswanadham of IIS, Banga-lore, highlights issues plaguing the food supply-chain and suggests remedies.

PAGE 2All 975 RTOs To Be Linked

`25logisticsweek.com

August 16–31, 2011

Govt Mulls SPV For Food Storage, Transport

PAGE 6

JMD of TVS & Sons Ltd, the domestic logis-tics services comprise 20 percent of ware-housing and will continue to grow at 35-40 percent annually.

At the event, Mark Drabenstott, Sec-retary General, Global Coalition for Effi-

cient Logistics, said GCEL is conducting a rigorous shipment efficiency assessment in many nations across the globe. It is de-signed to yield an understanding of the strengths and bottlenecks in a particular country’s logistics pipelines.

Publisher’s Note

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Upward, Onward

(L-R) Dilraj Singh Gandhi, Principal Consultant, Pricewaterhouse Coopers; Dr Mark Drabenstott, Secretary-General, GCEL; Prof K.V. Thomas, Union Minister of State for Consumer Affairs, Food and Public Distribution; R. Dinesh, Jt. MD, TVS & Sons; and Mike Nithavrianakis, British Deputy High Commissioner, at the CII organised event, ‘Building Warehousing Competitiveness’,in Chennai on July 28.

Hook Point

Inaugural Issue

2 August 16—31, 2011 www.logisticsweek.com

Prof N Viswanadham of IIS, Bangalore, highlights major issues plaguing the food supply-chain in India and suggests remedies to ensure food security.

Thought For Food

According to the World Food Summit of 1996, food security exists when all people at all times have access to sufficient, safe, nutritious food to main-tain a healthy and active life. Commonly, the concept of food security is defined as including both physical and economic ac-cess to food that meets people’s dietary needs as well as their food preferences.

Food security is built on three things: availability of suf-ficient quantities of food on a consistent basis; ensuring suf-ficient resources to obtain ap-propriate foods for a nutritious diet; and finally, appropriate use based on knowledge of basic

nutrition and care, as well as ad-equate water and sanitation.

The Government of India has launched several initiatives

towards ensuring food secu-rity to its citizens. They include the public distribution scheme (PDS), the mid-day meal program for school children, the National Rural Employment Scheme, and several others to help people be-low the poverty line.

At the other end of the spectrum, there are millions of hawkers in all major cities termed illegal traders by the municipalities but serving the food needs of millions of urban poor and lower middle class.

A Recipe For RiotsRecently we read about food grains rotting in the godowns. There were protests and riots.

Nothing more. The PDS operates under the

joint responsibility of the Cen-tral and State governments. The Central government, through the Food Corporation of India, has assumed the responsibility for procurement, storage and bulk allocation of grains to the state governments. The opera-tional responsibility including identification of families below the poverty line, and issue of ration cards rests with the state governments.

The Mid-Day Meal Scheme was launched by the Ministry of Human Resource Development (Department of Education) for the benefit of students in prima-

ry schools. It involves provision of lunch free of cost to school-children on all working days.

The key objectives of the program are: protecting chil-dren from class room hunger, increasing school enrolment and attendance, improved so-cialization among children be-longing to all castes, addressing malnutrition, and social em-powerment through provision of employment to women. The scheme presently covers stu-dents of Class I-VIII in the gov-ernment primary schools/upper primary schools/schools aided by the government and those

N. ViswanadhamINAE Distinguished Pro-fessor, IIS, Bangalore

Ascending The Curve

A fine drizzle falls gently on the 140-acre campus of Dr Reddy’s Laboratories Ltd. in Qutubul-lapur on the edge of Hyderabad. The corporate is one of the fore-most pharmaceutical companies in the country with revenues likely to cross $1 billion. Accord-ing to the latest figures, its con-solidated revenues are at `74.7 billion in FY’11, surpassing its revenues of `70.3 billion in FY 2010. In a wide-ranging inter-view, Dr Ravi Prakash Mathur, Director, Supply Chain Man-agement-Logistics, expatiates at length on the supply chain strat-egies that have put his company on the fast track.

How has the Theory of Con-straints enabled you to make huge improvements in your supply chain?We were earlier on a Forecast driven system like most com-panies and if you just go into the history of supply chain, the concept of MRP and MPS that developed simultaneously with the enhancement of computing technology, enabled a lot of com-panies to base their supply chain on the forecasting system. What

Pamela CheemaMumbai

Dr Reddy’s Laboratories Ltd has fashioned an intricate and complex supply chain which has ramped up its growth. Excerpts from an interview with the SCM chief.

it enabled was to have a forecast which worked backwards into a production driven plan and a raw material and packing mate-rial procurement plan. So it was a linear method of working back-wards when we used the forecast based supply chain system.

Now the Forecast method has its own limitations, as op-posed to the Replenishment system of supply chain. Markets are very dynamic, a forecast will ultimately be only a forecast, you can’t have 100% accuracy. You have to keep on measuring accuracies and KPIs of forecasts. Also, its difficult in an opera-tions environment to keep track of the vagaries of demand. Now the system that we had earlier was supported by our ERP, so all these transactions were tak-ing place on the ERP platform. These transactions still take place on the ERP platform, but instead of working on fore-casts, we look at what has been consumed at our supply chain nodes. And the previous supply chain node in turn replenishes the consumption at the front end. So in this manner we are able to have inventories which are much more agile and a sup-ply chain which is much more responsive.

When did you switch to this system? This was an initiative that we began around three years ago. The new system involves the front end distribution system and operations and procure-ment as well. So this is an end-to-end solution aligned to meet the needs of the market.

What are the major results achieved through the Re-plenishment mode? We have addressed the twin challenges of excess inventory in the system as well as short-ages in the system. The avail-ability of our products has also increased dramatically.

How have you integrated your supply chain end-to-end to get your decisive com-petitive advantage?Our suppliers are connected to our material warehouses. We also have production facilities which are both internal and external. The production facili-ties in turn push the material to our plant warehouses. The plant warehouses are connected to the regional warehouses and from there we push our goods to the distributors. The distribu-tors in turn sell them to retail

2,000 distributors. These distrib-utors are serviced by around 32 CFAs. The CFAs are serviced by our two main warehouses one of which is in Hyderabad and the other one is in Ghaziabad. These warehouses are also known as Global Distribution Centres (GDC) as they service Indian and global customers. We are serviced from 8 plants and 54 lo-cations, so the information flow comes backwards from these distributors to our suppliers and based on this flow of informa-tion, the material flows forward to our vendors, material ware-houses, plants, GDCs and CFAs.

Please give an overview of your company’s sea and air freight logistics.We do both sea and air freight lo-gistics. When we supply our mar-kets by air freight we use global airlines like Lufthansa and Emir-ates. We have eight international LSPs and we use the airports at Hyderabad and Bangalore to transport our shipments. For sea freight we have an inland con-tainer depot in Hyderabad from where we load our containers and transport them to Nhava Shava near Mumbai. From there they set sail on mother ships for the US and Europe.

INDIA

ADVERSE REACTION: An inefficient cold-chain is killing children in India...10GREEN LIGHT: How Ericsson India is reducing its supply-chain carbon footprint...18

Dr Ravi Prakash Mathur, Director, SCM - Logistics, Dr. Reddy’s Laboratories Ltd., describes how the pharma giant manages its supply-chain like no other Indian pharma company.

Page 36

Dr Ravi Prakash Mathur, Director, SCM - Dr Ravi Prakash Mathur, Director, SCM -

The Right Prescription

July 2011 Vol. 4 — No.11 `100INDIA

TElEcom logisTics 20Movement of telecom network equipment opens a window of opportunity

NEglEcTEd waTErways 44India is ignoring inland waterways at its own peril

low adopTioN 24Why WMS still does not have enough takers in India

amit mukherjee, Vice-president (iT and supply chain) and group cio at rpg, has deployed exemplary supply-chain strategies at spencer‘s retail >> page 34

Method In Motion

October 2010 | Vol. 4 – No.2

IndIa’s LeadIng LOgIstIcs MagazIne

` 100

www.logisticsweek.com

VALUE OVER COST: An edited transcript of ASC Summit offers key learnings...26

THE FOOD CRISIS 54An ISB Prof. shows how to ensure food security.

Dr. Ravi Prakash MathurDirector, SCM - Logistics,Dr Reddy’s Laboratories Ltd.

and retail to the customer. So this is our value chain. The role of production is to constantly change the lead time, follow the priorities which have been set by the system and then also follow the process of on-going improve-ment. The supply chain role is that there should be perfect availability so that there is no shortage while maintaining low inventory. We have adequate in-ventory at a central location, we get consumption data daily and at the same time, we have more frequent replenishment.

To give you a better idea of how our replenishment system works, in India, we have around

CONTINUED ON PAGE 7

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3August 16—31, 2011 www.logisticsweek.com

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India and China have agreed to work towards signing of a Memorandum of Understanding (MoU) in the areas of Road Transport and High-ways, said an Indian government press release is-sued on September 16. Under the proposed MoU, both sides would seek to enhance cooperation in highway construction, exchange of technology and investments in the sector. According to the release, this was agreed to during the meeting between Kamal Nath, Minister for Road Trans-port and Highways and Li Shenglin, Minister of Transport, China at Beijing on September 15.

Nath was quoted in the note as saying that India has embarked on a massive national high-way development program under which it is proposed to construct 7,000 km of national high-ways every year over the next few years. The ambitious targets set in the program provided huge opportunities to the Chinese construction companies as also the Chinese financial institu-tions to enhance their engagement with India, said the note. Nath also said that the preferred mode of highway development in India is Public Private Partnership. 60 perceent of the national highways would be developed under the BOT (Built-Operate-Transfer) Toll mode, while anoth-er 25 percent would be taken up on BOT (Annu-ity) basis. Already, several Chinese companies are participating in the National Highway Develop-ment Project of India.

China has over the past decade made rapid progress in the infrastructure sector, particularly highway development. Li Shenglin said that pres-ently, around 35,000 km of national highways is under construction in China of which 10,000 km is likely to be completed this year.

Earlier in the course of the interactions with China’s government representatives, Nath met Lou Jiwei, Chairman, China Investment Corpora-tion (CIC) and Dai Xianglong, Chairman of Nation-al Social Security Fund (NSSF) and apprised them

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Jacob Joseph [email protected]

The two emerging super-economies have agreed to explore ar-eas of cooporation in the road transport and highways sector

News DeskMumbai

UPS Connects Air and Ocean New Ocean Freight

InterviewEnvisaging India as Asia Auto Hub R Dinesh, JMD, TVS & Sons says India stands at the threshold of an aftermarket revolution

PAGE 4

In APAC, ME, USA and Europe

August 16–31, 2011

`25logisticsweek.com

India And China Looking to Be On The Same Road

PAGE 2

of the opportunities of investing in the highways sector of India and of the high re-turns that the sector promises to offer.

Xianglong mooted the idea of the set-ting up of an India-China Highways Invest-

ment Forum for investors, developers and construction companies which will provide a platform for the policy makers, financial experts and the business leaders to work closely towards enhancing project.

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True Truckload Optimization - Oppor-tunity For Supply Chain ProductsInfosys SCM Blog (Posted by Umesh Sonawane)

Just imagine that you want to relocate with your fam-ily to another country for two years for company’s work. It is but obvious that you would want to car-ry the maximum luggage with you without paying hefty fi ne for the excessive baggage at the airport. As a part of logical thought process, you would fi rst consider the various constraints imposed by the air-lines (weight, volume, number of luggage, etc.) and then start to pack the stuff. Won’t you agree with me that the most important step is placing different items inside the bags - like which items should be at the bottom, which items should be alongside of the bag, which items should be in the hand baggage, et al. How nice it would be, if any software program can provide an end-to-end solution to you?

In today’s era of fi erce market competition and high fuel cost, companies are also looking for such a solution to facilitate the load building process to a great extent. Every supply chain planning product possesses the basic capability of producing distri-bution requirement planning (DRP) or deployment planning output by considering the constraints. How-ever at the execution level, there are real challenges

for the vehicle loaders in the dock in the process of placing the product inside the truck. When products are fragile, the complexity increases further. This is one of the major needs of every organization which has not been fully met by today’s best-of-breed supply chain products or even by SAP APO/Oracle APS.

Some of the niche players like TWO (Transporta-tion and Warehouse Optimization) helped many For-tune 100 companies to reduce the transportation cost by 4-8 percent. The load building product (AutoVLB) developed by TWO, rightly termed as “SuperTruck”, has been made so smart that it also considers the weight restrictions on the axles of the truck and dis-tributes the load accordingly inside the truck. With the help of AutoPalletP3 and AutoLoaderT3, AutoVLB can create a loading diagram and a case pick sequence for every shipment - a striking benefi t of the solution.http://bit.ly/mZofnI

Benefi ts Of Optimizing The Supply Chain Network And BeyondMartin Buckley

Buckley wrote this blog after he read, ‘10 Guidelines for Supply Chain Network Infrastructure Planning’, which discusses a methodology to reduce supply chain costs through optimization of network infra-

structure. The authors discuss 10 things to keep in mind when tackling infrastructure optimization, which account for 75-80 percent of supply chain costs. Buckley focuses on optimizing the supply chain through the use of collaboration, simulation, and scenario comparison utilizing modeling tools.

The supply chain network is composed of many components acting in concert to deliver the required goods and services. So how best to optimize such a complex set of data points? One must obtain accurate data about each node in the network, and then utilize software to model it. This requirement would suggest that any simulation model must be able to incorporate multiple disparate data sources in a relatively easy and timely manner. Important data to obtain would be: lead times, inventory levels, transit times, associated costs, quality levels, and service levels.

Because these networks can be extremely com-plex with many factors infl uencing outcomes, we must have the ability to compare many different scenarios. All these outcomes must be weighed to de-termine most optimal design. The next step would then be to determine if the best parts of each can be combined into one ‘super’ scenario. This can only be determined by developing a complex model with multi-sourcing. http://bit.ly/riFpwQ

Solutions For Optimizing The Supply Chain BLOGS, JOURNALS, BOOK RELEASES


Indiamart India International Build Expo ChennaiPrompt Tradefairs (India) Pvt Ltd is organizing Indiamart India International Build Expo for the building and construction in-dustry in India. It will be held from August 19 to 21, 2011 at the

Chennai Trade and Convention Center. Exhibitors to the event will come from industries such as acoustic & thermal insulation, construction chemicals, construc-tion equipments, and others concerned with the con-struction industry.

E3 EXPO 2011E3 EXPO 2011 is dedicated to the cause of event man-agement and specially deals with trade fairs and other mega exhibitions. The event has been organized by Ex-hicon Events Media Solutions Private Limited and will be held from August 19-21, 2011 at Bombay Exhibition Center.

The Manufacturing IT SummitThe Manufacturing IT Summit will serve as the meet-ing ground from information technology departments of aerospace & defense, automotive, chemicals, in-dustrial equipment, mobility, high-tech & consumer electronics, pharmaceutical & life science, and process

manufacturing. Exito Group is organizing this event which will take place at World Trade Centre in Mumbai. The event will be organized from August 25 and 26, respectively. EMMA Expo IndiaEMMA Expo India organized by Taiwan External Trade Develop-ment Council (TAITRA) and is dedicated to electronics, machinery, molds and auto parts. It is a three day exposition that will take place at Chennai Trade & Convention Centre in Chennai, from 25-27 August, 2011.

TECHNOTEX INDIATECHNOTEX INDIA is jointly organized by Ministry of Textiles, Govt. of India, Department of Chemicals and Petrochemicals and Federation of Indian Chambers of Commerce & Industry (FICCI). The technical textile is predominantly Synthetic Fiber/Yarn based and has enormous scope of development. The event will take place at Bombay Exhibition Centre (BEC) in Mumbai from August 25 to 27.

The event is being backed by Indian Technical Textile Associa-tion (ITTA), BTRA, MANTRA, SASMIRA, NITRA and The Southern Gujarat Chambers of Commerce (SGCCI).

Pack Tech AsiaThe Packtech Asia 2011 International Exhibition will showcase a spectrum of products, equipment and services in food processing, pharmaceuticals, Ayurveda & herbal products, agro products and many more. It will be held at Milan Mela Ground & being orga-nized by Kesari Media & Events Pvt. Ltd from August 27 to 29, 2011.

Pune Machine Tools ShowKMG Business Technology is organizing Pune Machine Tools Show 2011 - an exclusive showcase of engineering, machine tools, auto-mation & automotive technology. It will be held at Auto Cluster Exhibition Center (Pune) from August 25 to 28, 2011.

International Industrial Expo-FaridabadParamount Exhibitors is holding an annual exhibition Interna-tional Industrial Expo-Faridabad. The exhibition will focus on in-dustrial products, technology and related services. The scope of the event covers: machine tools, material handling, transmission, chemicals, hydraulics and pneumatics, electrical & electronics, automobiles, plastic and packaging, textile, pumps & valves. The event will be held from August 19-21, 2011, at Silver Jubilee Hall Magpie at Faridabad.

To Pune, Chennai, Mumbai And Back

August 2011

cOMING SOON!

FRC Internet Products, a pioneer in advanced wire-less technology products and solutions, has launched 5GHz suite of WiMAX products. This product suite caters to both the licensed and unlicensed frequen-cy spectrums allowing wireless Internet service pro-viders (WISPs) to deploy wireless high-speed broad-band access networks.

The 5GHz suite (4.9-5.8GHz) of WiMAX prod-ucts includes base stations, subscriber stations,

Authentication Authorization and Accounting (AAA) server and Network Management System (NMS).

FRC’s base stations are among the smallest units in the world enabling easy handling and installa-tion. FRC’s unique all-outdoor base station units allow an operator to install them directly on tow-ers, rooftops, traffi c poles, walls, etc. without the requirement of AC housing.

The WiMAX network solution is managed with a scalable, robust and easy-to-confi gure AAA server and NMS. The implementation is based on the SNMP v2 protocol. They come as ideal solutions to deploy and manage the WiMAX network elements, whether an operator is deploying a new network, or develop-ing an existing network.

The product line is based on WiMAX standards IEEE 802.16-2005 for mobile networks.

APC by Schneider Electric has announced the newest Next Generation Switched Rack PDU with Metering-by-Outlet technology. These units have the ability to provide device level power monitor-ing and energy use logging, enabling IT managers to pinpoint their power usage for each component connected.

The Next Generation Switched Rack PDU with Metering-by-Outlet technology offers IT managers the ability to: Meter the power distributed to equipment by

individual outlet.

Effi ciently adjust the attached load as needed and plan for the future.

- Remotely manage individual outlets.IT managers will continue to benefi t

from the features they have come to rely upon from the AP8000 series Rack PDU platform, including:

Active Power Metering Interactive LCD Display Environmental Monitoring Locking IEC Connectors

FRC Launches 5.8GHz WiMAX Suite Of Products

APC’s Next-Gen Rack PDU Lineup

TECHNOLOGY

eVents Calendar


Have you ever wondered how McDonalds in India never runs out of chicken? If you look at the logistics of how the firm ensures all its suppliers have to meet its quality standards in storage and transportation – you will be impressed.

FDI In Retail Vital To Stop Wastage

For years, the debate on For-eign Direct Investment (FDI) in the retail sector has raged on, involving everything from economics, national pride and nostalgia about your friendly neighborhood kirana store. According to estimates quoted

in the media, up to 11 percent of employment in the country is employed by domestic re-tail. That’s the second largest sector after agriculture in our country.

Speaking in Parliament, minister for commerce and industry Anand Sharma said almost 35 million people were employed in the retail sector in the agricultural and non-agricultural sector. Only four percent of retail in the country was organized, the rest was un-organized.

Those resisting the entry of foreign companies such as Walmart, Tesco and Carrefour

Jacob Joseph PuthenparambilSingapore

The proposed FDI in retail is viewed as an MNC sledgehammer that could destroy the local re-tailers. Far from it, the move is going to improve logistics, empower the consumer and boost employment in the country, the author argues.

PublisHer’s desk

through majority owned joint ventures argue that this will lead to mass unemployment and ruin the fragile ecology of the Indian rural retail dynam-ics. The organized sector has a share of only 4 percent in the country’s $590 billion retail industry.

To put this in political con-text, it is the standard ant-

globalization, pro-nationalism argument. Evil Multinational Corporation is going to kick our poor local traders out of busi-ness. It’s a powerful argument, politically at least. People will forget about the lack of fresh-ness of the vegetables they buy, the presence of coloured min-eral ore in their rice, wheat and pulses, the lack of stable avail-ability of milk, some assurance that the meat or fish they just bought is good for human con-sumption and pledge their gold savings to buy onions. After all national pride and aam admi comes first.

Most of us, particularly

those of us raised in a village, has and might live with this scenario. Politically, what kind of politicians would want to be siding with Walmart?

The big elephant in the room is wastage. Sadly hardly anyone talks about it. Pamela Cheema quotes Pradeep Chechani, Vice President – Supply Chain, Wad-awan Retail, in her article in

the August issue of LOG.India magazine about how the logis-tics sector in India is welcom-ing the entry of foreign players. He states he favors foreign in-vestment in retail, “because of the huge wastage in food and groceries”. India is the world’s largest producer of fruits and vegetables and we waste about 25 percent of it worth `50,000 crores.”

That’s 25 percent of every-thing we produce. So if a farm-er produces 100 bananas, 25 percent is wasted on the way. Add five layers of middle men and tally up the costs. For that single fruit, you are paying for

inefficient transportation and warehousing and padding up for costs at each level of trade to make up for wastage. The only losers in this system are you and the farmer. He has to sell because he can’t store and you have to buy because there is no other choice.

Foreign investment in re-tail will provide much needed investments in our cool chain and storage infrastructure. Have you ever wondered how McDonalds in India never runs out of chicken? If you have a look at the logistics of how the firm ensures all its suppliers, from the farmer up, have to meet its quality standards in storage and transportation – you will be impressed.

What about employment? Will FDI in retail lead to loss of jobs? Speaking to the Busi-ness Standard (August 7, 2011), retail consultancy firm Tech-nopak Advisors’ managing di-rector, Arvind Singhal, states there would be a require-ment of an estimated 25 to 30 million additional people by 2020. Elixir Consulting, a recruitment process outsourc-ing firm, put the additional manpower requirement in the next 10 years at a mod-est 12-15 million. Nitin Sethi, practice leader (consultancy), Aon-Hewitt, said, “In 12-24 months, the manpower re-quirement would be up by 27 percent to 50 percent.”

There needs to support on the policy front as well. Es-pecially in the much awaited Goods and Services Tax (GST) –

this will encourage the growth and development of large temperature controlled ware-houses, particularly in central India, where there is a lack of infrastructure. The govern-ment is trying to formulate policy in such a way a middle ground of sorts is established. One plan will limit multina-tionals to towns with more than a million residents. There are about 50 such cities and towns in India now.

The second option is to adopt the Chinese model. Start with six metros and then expand in a phased manner. I have a feel-ing this is how the government is going to let it play out. An-nounce an opening up and try to limit the foreign players to the main metros.

As a first step, on July 22, a panel of secretaries led by cabi-net secretary AK Seth, cleared the proposal FDI in multi-brand retail stores. Now it goes to the union cabinet and then rules will be notified. Only then will we know how the government is going to play this out. Some riders have been set, including minimum investment of USD 100 million with 51 per cent investment in backend supply chain. The other criterion is the 30 percent sourcing plan from domestic small and me-dium units.

Whatever the rules set, I hope the focus is on cutting wastage. There is no point in boosting agricultural produc-tion if we can’t ensure the in-frastructure to transport it in good condition to market.

The entry of foreign investment in retail will have at least one main benefit: It will avoid the huge wastages caused in the supply-chain.


In this section, LW provides a recap of policy decisions of the last fortnight thatimpact various areas of the supply-chain industry.

EPC Is Back. Retail FDI, Ports Act On

ROADSThe way road construc-tion contracts are handed

out may soon undergo a change. The roads ministry is reviving the Engineering Procurement Construction (EPC) mode of road bidding, where projects will be awarded outright and offi cial role will be reduced to deciding specifi cations and quality. An an-nouncement to this effect is ex-pected in the next few months.

The EPC method will also be cheaper than annuity backed projects. In the earlier method, the government paid the con-tractor on the basis of measure-ment of work, but the system was prone to cost escalation, and bereft of economy incentives. Moreover, it also lacked quality.

The government will only provide a feasibility report. Pri-vate companies will provide design based on the feasibility report and the government will select bidders on the basis of the design and costs quoted.

To check corruption at Regional Transport Of-

investment and jobs should go to rural areas. Besides, the entities with FDI should source at least 30 percent of their re-quirements from the MSME sector. Foreign player must commit an investment of at least $100 million. Allow mega stores to sell non-branded items and such enti-ties should be allowed only in towns with population of over 10 lakh.

The original draft for FDI policy on retail had proposed that the foreign front-end retail-ers will have to source a mini-mum mandatory of 30 percent of the total merchandize from the local region.

MANUFACTURINGThe Ministry of Commerce and Industry’s draft National Manufacturing Policy (NMP) has been well-received by top Indian government ministers, thus taking it a step further to fi nal approval.

The NMP recommenda-tions are designed to simplify

1

2

fi ces (RTOs), the Union Road Transport and Highways Min-istry has launched the Nation-al Register– a centralized on-line database of all registered vehicles and driving licences in the country along with the National Transport Portal.

The scheme comprises two citizen centric services - “Sarathi”- a one-stop solution to Licensing and “Vahan”- an ICT based solution for vehicle registration.

The portal, linked to all 975 RTOs across the country, aims at digitizing the entire records of vehicle count and driving li-cences by the end of the year.

RETAILThe Committee of Secretaries (CoS) has forwarded a recom-mendation to the Commerce and Industry Ministry on the issue of opening multi-brand retail to foreign investment.

Some of the recommenda-tions in the report are: Allow 51 percent FDI in the sector. At least 50 percent of the

the regulatory environment for foreign and domestic manufac-turing companies and create new market incentives to at-tract foreign investment to In-dia’s manufacturing sector.

The draft aims to reduce restrictive regulatory bur-dens on foreign and domestic manufacturers thus making it an attractive business environ-ment for investors. The new policy recommends establish-ing new National Manufactur-ing Industrial Zones (NMIZs) where manufacturing compa-nies would have scaled down regulatory requirements, pref-erential market access, priority land allotments, and better in-dustrial infrastructure.

Companies producing heavy machine tools, heavy electrical gear, transportation equipment and infrastructure, and earth-moving and mining equipment are expected to be some of the priority targets for regulatory concessions and special market incentives un-der the NMP.

PORTSThe draft of the proposed Ports Act prepared by the Ministry of Shipping (MoS) might soon be on its way to seek the nod of the Cabinet. The Ministry has drawn up the draft of the Act by fusing two pre-existing governing acts – the Indian Ports Act, 1908 and the Major Ports Act, 1963, to convert it into one single con-sortium of governing authority.

A Cabinet approval would mean that the pre-existing Indian Ports Act 1908 and Major Ports Act of 1963 would stand nullifi ed.

The MoS feels that the need for a comprehensive act is the need of the hour, as minor ports are mostly eclipsed by major ports, like when it comes to fi x-ing the tariff of ports.

The MoS also wants to revise the Tariff Authority for Major Ports (TAMP), as it would pro-vide an independent authority which would be able to regulate all vessels and cargo related tar-iffs, rates of leased properties (for major port trusts) and pri-vate operators functioning from major ports.

PoliCy uPdates

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CONTINUED fROm PAGE 2

run by local bodies. The Department of Food &

Public Distribution makes allo-cation of annual requirement of food grains to the Department of School Education & Literacy, Ministry of Human Resource Development. About 120 mil-lion children are so far covered under the Mid-day Meal Scheme — the largest school lunch pro-gram in the world.

The State of Karnataka intro-duced the provision of cooked meals in 2002. It has success-fully involved private sector participation. One venture is Akshaya Patra, which started with leadership from ISKCON in Bangalore. The Foundation gets a corpus from the state govern-ment but meets major share of its costs with donations from private corporations. The pro-gram is managed with an ultra-modern centralized kitchen that is run through a public/private partnership.

Food is delivered to schools in sealed and heat retaining containers just before the lunch break. The program contains one of the best menus in school meal programs in India with sambar, rice, vegetables and

some curd on most days.Opportunities to manipulate

the system exist with wide-spread collusion across the sup-ply chain. The Planning Com-mission had the following to say on the PDS system in its 2005 re-port, “For every `4 spent on the PDS, only 1̀ reaches the poor.”

Cartel Of Bureaucrats The Supreme Court-appoint-ed Vigilance Committee has slammed the PDS for “corrup-tion, black market and diversion involving a cartel of bureau-crats, fair-price shop owners and middlemen”.

The lower-income groups spend a high proportion of their income in purchasing from hawkers because their goods are affordable. Had there been no hawkers the plight of the ur-ban poor would be worse than what it is. But hawking is not a licensed activity in most cities. Over the past few decades there has been a substantial increase in the number of hawkers in the major Indian cities. Rec-ognition of hawking as a pro-fession would also benefit the municipalities. They would be able to officially enforce levies on hawkers.

The Supply Chain What is missing is an integrat-ed, co-evolutionary innovation strategy that would lead to high service quality food solutions to millions of people by com-bining innovations in several of the ecosystem elements and also their convergences.

The business processes can be identified, streamlined, standardized and automated or semi-automated using IT and sensor networks. Moderniza-tion of PDS, midday meal pro-gram, training programs under NREGAS, hawkers, and small food outlets using communica-tion technologies would lead to a blockbuster industry serving the poor and creating millions of jobs.

NREGAS can be used for training chefs, PDS employ-ees, school employees, etc. Standardized and automated kitchens and IT enabled and GPS equipped push carts can be developed. The push carts can be built following stand-ardized design and equipped with solar or gas run refrig-erators and ovens. The entire process can be monitored, ex-ecuted and controlled using a call center.

The missing link here is so-phisticated kitchens with chefs and cooks equipped with auto-mated cookers, and ovens dis-tributed all over the city. The location and capacity of the kitchens can be determined using optimization techniques from the demand estimates.

Now the supply chain con-sisting of the PDS and kitchens and the schools participating in the midday meal program needs trained manpower. The vocational training centers can be funded through the NRE-GAS to train cooks, servers and millions of other jobs required for the supply chain operate well, given the perishable na-ture of the supply chain.

Good GovernanceDepending on the demand one can find the optimum number and locations of the kitchens to serve the community. The proc-esses can be streamlined using sensor networks, smart cards, cloud computing, and mobile vans equipped with heaters and refrigerators.

One can use modern kitchens such as the Akshaya Patra with the help of NGOs and corporate. This will get

rid of corrupt practices.The governance model for

this supply-chain can be worked out with NGOs, corporate, and government. Making this work is a challenge but the reward would be tremendous.

The new system can be de-signed using technologies such as smart cards, wireless, push carts equipped with refrigera-tors and ovens, and hygiene in-dicators.

Logistics & ITGiven the perishable and hygi-enic nature of the supply-chain, the products are made in the day and end by night. This re-quires careful demand forecast-ing, routing and rerouting of the supplies and monitoring the anti-social activities.

Several product and proc-ess innovations are needed and there are opportunities for sev-eral small and big private entre-preneurs. This is a unique oppor-tunity for people from all walks of life to come together to make this program successful.

The author can be reached [email protected] is an abridged version of the actual article. You can read the full article in the August 2011 issue of LOG.India.

EPC Is Back. Retail FDI, Ports Act On


Lowdown On Major Ports

Port of CochinCochin is the fastest growing logistics center emerging into a major international transship-ment terminal. Cochin is promoting a major liquid terminal, bulk terminal and maritime industries in its port-based SEZs .

The entrance to the harbor is by a 10,000m long and 200m wide and 13.5m deep outer approach channel marked with fi ve sets of buoys.Cochin Port has a fully fl edged Container Freight Station with mechanized stuffi ng and destuffi ng service. It has 10,000sq.m of covered space and 20,000 sq.m of open space.

Port of ChennaiChennai Port, the third oldest port among the 12 major ports, is an emerging hub port. It has completed 128 years of glorious service to the nation’s maritime trade.

The terminal handling charges at Chen-nai Port’s Container Terminal are quite com-petitive even when compared to the terminal handling charges collected at the Regional Ports viz. Colombo and Singapore. The Chennai Port offers Priority berthing facilities for Export Orient-ed vessels. In addition, a scheme called “Priority Berth Reserva-tion Scheme” approved by Government for berthing vessels on ar-rival on payment of berth reservation fee is being made popular among the trade.

Port of MumbaiThe Port of Mumbai is administered by a statu-tory autonomous corporation known as the Mumbai Port Trust. There are 63 anchorage points. Besides the wet docks, there are, along the harbor front, a number of ‘Bunders’ which are open wharves and basins where the traffi c carried by the sailing vessels is handled. These bunders have ex-tensive facilities for loading, unloading and storing the cargo and have an aggregate quayage of 12,500 meters.

Port of JNPTThe port provides round the clock pilotage to all ocean going vessels calling at the port. Since February 1998, JNPT has launched night sail-ing of long Panamax Container Vessels up to 270 M LOA and 12 M draft on a regular basis which are largest vessels to transact the Mum-bai Harbor at night.

Port of TuticorinPort of Tuticorin is located close to the East-West International sea-route. Open space for stacking bulk cargo and containers is available inside the security wall to the extent of 5,53,000 sq. m. The areas can accommodate around 30,000 tonnes of bulk cargo either for import or export and 2500 containers. In addition to containers, the open area in-side the wharf is used for temporary stacking of bulk cargo such as coal and sulphur. Tuticorin Port has vast open land of about 2,158 acres outside the main gate. Cargo godowns with a capacity of stacking 36,000 tonnes have been put up in this area by the Tamil Nadu Warehousing Corporation.

Port of Paradip Paradip Port is one of the major ports of India serving the Eastern and Central parts of the country. The port mainly deals with bulk cargo apart from other clean cargoes. The port opera-tions are carried out round the clock 365 days and have a limit 13mt of draft at all the berths maintained round the year.

There are 14 berths in the inner harbour waiting for vessels up to 70,000 DWT. Other features include a turning circle of 520m diameter and entrance channel of 500m long and 160m wide, and approach channel of 2020m long and 190mtrs wide.

Port of KolkataKolkata Dock System is situated on the left bank of the river Hooghly in position. It has two ap-proaches from the sea, one through Eastern Channel and the other through the Western Channel.

Currently Eastern Channel is being used for navigation. The pilotage distance to Kolkata is 221 km, the pilotage distance to Haldia is 121 km. Present dimension of vessels accepted at Haldia Dock are restricted to LOA 240 m Beam - 32.26 m. For oil jetties the largest vessels that are accepted at present are LOA 250 m, Beam - 44 m.

Port of EnnoreEnnore is the 12the major port in India and the fi rst Corporatised Major Port in India.The port has different terminals: iron ore, coal, marine liquid and general cargo berth. It has a total estimated capacity of 23.5 mtpa and an on-going construction of container terminal phase I would augment its capacity by 18 mtpa or 1.5 million TEU.

PORT OF MUMBAI

Total Per day

T TEU T TEU

Cargo Discharged 176305 680 17630 68

Cargo Loaded 63974 6 6397 0.6

PORT OF JNP

Total TEU Avg per day (TEU)

Import 60524 6052

Export 46800 4680

PORT OF COCHIN

Total container/cargo handled (T) 468582

Avg per day (T) 46858

PORT OF CHENNAI

Total container/cargo handled (TEU) 44483

Avg per day (TEU) 4448

PORT OF TUTICORIN



PORT OF PARADIP

Total cargo handled (T) 1208873


PORT OF KOLKATA



PORT OF ENNORE (Data from 01-08-2011 to 05-08-2011)

Total cargo handled (T) 612285


(All data gathered between 01-08-2011 and 12-08-2011, excluding Aug. 6&7)

Ports uPdates

In this section, LW will offer updates on container movements at major Indian ports.


xxxxxxxxxxx

The cold chain industry is seeing some action after the Budget announcement in February. ColdStar Logistics is buoyant and is making plans.

ColdStar Logistics Is Here To Stay

Tuscan Ventures promoted ColdStar Logistics Pvt. Ltd. is finally coming into its own. Over the next 3-4 years, the company is investing in build-ing a state-of-the-art integrated cold chain infrastructure. Be-sides setting up cold storages, the company is also building an entire fleet to cater to the industry.

SA Farooqi, COO, ColdStar Logistics, said, “We are work-ing at setting up cold storages across strategic locations to cater to changing consump-tion patterns. Our network of offices, systems and processes will support our transporta-

tion business.”The company has opted to

build its own fleet to ensure that it offers quality solu-tions to its customers. “If we rely on existing players, we would not be able to control and deliver the change that we intend to become,” adds Farooqi.

Currently, ColdStar Logis-tics manages a fleet of 45+ ve-hicles on the road and plans to have 85-plus trucks by the end of the financial year. The company has also earmarked nine locations to set up cold storages across the country.

Shagun Kapur Gogia, Di-rector, ColdStar Logistics says, “We have been vying to become players in the cold chain market last two years. The impetus to cold chain in-frastructure in Budget 2011-12 has set us on the right path. There is an opportunity for the private sector to revo-lutionize the retail industry and the supply chain efficien-cy in India.”

According to industry reports, by 2014 the out-

sourced cold storage market in India is expected to grow to `900 crore, while reefer transportation is expected to grow to `1,600 crore. Cold-Star Logistics aims to corner 5 percent to 10 percent of the market share in both these segments.

Part of Coldstar Logistics’ fa-cilities will be designed specifi-cally for the pharmaceutical sector. India’s pharmaceutical industry is the third largest in the world in terms of volume. Many products require right temperature control from point of manufacture right un-

Shaukat Ali FarooqiCOO, ColdStar Logistics

India has seen an influx of a large number of interna-tional and domestic restaurant chains over the last few years. Mr. Farooqi said, “The infra-structure we are building in ColdStar will provide the back-bone for growth to some of these industry segments.”

til point of consumption, mak-ing cold chain imperative.

Besides this, ColdStar aims to target all major sectors that require cold chain infrastruc-ture such as fruits and vegeta-bles, dairy, retail, quick serv-ice restaurants, seafood, and meat products.

lsP eye

In this section, LW will offer updates on container movements at major Indian ports.


A lowdown on developments in sur-face transport last fortnight.

TRANSPORT STRIKE The South Zone Motor Transport Welfare Associa-tion announced that its mem-bers would strike work from August 18 midnight seeking fulfi llment of their demands. Around 16 lakh lorries from Southern states and another eight lakh from Maharashtra and Mumbai Port Trust would participate. They called for a CBI inquiry against former un-ion minister for shipping and surface transport T R Baalu in connection with highways tollgate allocation.

NO TOLL TAXToll tax on the Indore-De-was bypass will not be charged from commuters from August 1 as was announced earlier. How-ever, the respite is short. The National Highways Author-ity of India, the implementing authority, has decided to talk to the Union Surface Transport Ministry before introducing the toll tax.

MORTH ON FACEBOOK Ministry of Road Transport and Highways is on Facebook. The Facebook page of MORTH was launched by the Union Minister for Road Transport & Highways, Dr. C.P. Joshi on Au-gust 5, 2011.

On The Road

ELECTRONIC DEVICE The Ministry of Railways is providing Electronic Devices for Ticket Checking Staff in trains. Electronic devices in the form of handheld terminals have been provided to the Ticket Check-ing staff in 11 trains as a pilot project.

NEW RAILWAY LINES Surveys for Tanakpur-Bageshwar and Rishikesh-Karanprayag new lines have been completed. Rishikesh-Karanprayag new line project has been included in Railway Budget 2010-11 at an anticipat-ed cost of `4,295 crore. Tana-kpur-Bageshwar new line sur-vey report is presently under examination of the Ministry.

RAILWAY EARNINGS The total approximate earnings of Indian Railways on originating basis during 1st April – 31st July 2011 were `33,134.31 crore compared to `29,618.70 crore during the same period last year, registering an increase of 11.87 percent.

RAILWAY FREIGHT REVENUE Indian Railways has carried 313.32 million tonnes of reve-nue earning freight traffi c dur-

ing April-July 2011. The freight carried shows an increase of 20.81 million tonnes over the freight traffi c of 292.51 million tonnes actually carried during the corresponding period last year, registering an increase of 7.11 percent.

DELHI-MEERUT EXPRESSWAY Delhi–Meerut expressway is targeted to be completed by December 2015. The proposed alignment of Delhi-Meerut Expressway starts from Niza-muddin Bridge and will con-tinue along NH-24 upto Dasna and will end at Meerut. This project also includes 6-lan-ing of Dasna–Hapur section of NH-24 and 6-laning of Delhi to Meerut section.

RAILWAY SAFETY MEASURES Anti Collision Device (ACD), developed by Konkan Railway Corporation Limited (KRCL), has been provided as pilot project on North East Frontier Railway (1736 Route km). Sanction was also given for implementation in South-ern region in the Southern, South Central and South Western Railways on select-ed 1600 route km. `28 crore have been allocated for ACD works during the current fi -nancial year.

THE LW CROSSWORD

Across2. Being answerable for4. Process of vehicle returning from the destination point to

the point of origin7. Advantage gained sharing a location with other

companies8. Detailed list of items in stock9. Term to describe the monetary requirements of initial

investment in equipment11. Resources or money available for investing in assets that

produce output14. Ability to manufacture and market products merging the

competencies of cost, quality, dependability and fl exibility15. An enterprise authorized to transact business16. Goods transported, generally for commercial gain17. Degree of conformity to a standard21. An enclosed area for storing valuable items22. National railroad passenger cooperation of the USA23. Flow of goods from origin to destination24. A mathematical process for computation 25. Communication by supplier to recognize acceptance of order26. A feature added to the goods off ered to the customer for

customizing the end product27. Apportioning according to a plan28. Discontinue service over a route

Down1. The property of being genuine or valid2. Inspection of a process to ensure compliance to requirement3. Group of parts put together that constitute the major subdivision for the fi nal product5. Ability to provide service between an origin and a

destination6. Method of inventory book keeping10. Label used to provide additional classifi cation12. Certifi cation by a recognized body13. A federal law that requires coastal traffi c to be carried in U.S. built and registered ships17. An accessory that has to be attached to the product18. Product shipped in an aircraft, railroad, ship, or truck19. Cancellation or expiration of an outsourcing contract20. Retaining a quantity to ship against an order, usually

caused due to shortage

1 2 3

65

9 10 11 12

4

13 14

15

16

17 18 19 20

21

22

23

24

25

26

27

28

TRUCK FREIGHT RATES*Following are the truck freight rates (in `per tonne) from metros to metros

ORIGIN DESTINATIONS

New Delhi Kolkata Mumbai Chennai Bangalore

New Delhi -- 3,065 3,000 4,600 4,500

Kolkata 2,350 -- 2,200 3,600 3,600

Mumbai 3,050 3,000 -- 3,000 2,400

Chennai 3,850 3,300 2,400 -- 800

Bangalore 3,680 3,300 2,360 800 --

*Rates are indicative **Data collected during Aug 1-10, 2011. Source: Logisticsweek Research

International Offi ce: Red Dot Building28 Maxwell Road, #03-05Singapore 069120Publisher: Jacob Joseph [email protected] Director: Jayaram [email protected] Projects: Pamela [email protected]: Aanand Pandey

[email protected] Editor: Jayashree [email protected] Executives: Anuja Abraham, Pritha DeyChief Designer: Shivasankaran PillaiAD-SALES: Ashok Chand [email protected] [email protected]

Events Manager: Upendra [email protected] Support: Sangeeta D, Suhasini S

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be pleased to receive amendments for possible inclusion in future editions. Opinions refl ected in the publication are those of the writers. The publisher assumes no responsibilities for return of unsolicited material or material lost or damaged in transit. All correspondence should be addressed to Hamburg Media Private Limited. All disputes are subject to the exclusive jurisdiction of competent courts and forums in Mumbai only.

Answers in the next issue. Win an annual subscription by mailing a clear picture of the completed crossword to [email protected]. Only correct entries will win.

surFaCe transPort uPdates


Satvik LogiSticS Pvt. Ltd.WAREHOUSE SPECIFICATIONSl International Standard PEB – KIRBY TYPE Structurel Floor Specs: High Load bearing capacity Of 4 MT /

SQM with RCC reinforcement l Floor Height: 1.2 Meters from Finished Floor Level l Column to Column Spacing: 11.2 Meterl Height: Clear Height 12 M, Ridge Level 16.82 M, Eaves

Level – 12.89 Ml Recess Dock Area: 15 M Staging Area With Hydraulic

Dock Leveler l Ventilation: Sufficient Roof Top Gravity Turbinel Natural Light: 10% Of Floor Area Is Polycarbonate Sheet.

UTILITIESl G + 7 High – Ideal for Heavy Duty Palletized Rackingl Reach Truck To Handle 12-Meter High Pallet Stackingl MHE – Forklifts, Hand Pallet Truck, Battery Operated Pal-

let Truck l 24 Hour Power Back Up with 250 KVA DG Setl Fire Protection - Complete Building Is Secured With Fire

Fighting Systemsl Lighting Systems: 3-Way Distribution To Save Power

Consumption l Weigh Bridge: 100 Metric Ton Load Capacityl Overhead Tank With RO Plant For Drinking Water

SATVIK LOGISTICS PVT LTD.Site Address: Khasra Number 2763, Aamka Road, Dhoom Manikpur Village, Gautam Budh Nagar, Dadri, Uttar Pradesh 203208

For more details contact: Mr. Vaibhav Rathi, HP: +91 9818384703, E-mail: [email protected] Location details please refer to www.satviklogistics.com

PROJECT FEATURESl 20 Acres of Land Bankl Area Ready For Possession – 59,000 Sq Ft (

September 2011)l Scalable up to 5 Lac square feet.lBitumin Roads – 10 Meter Wide Internal

Roads For Bi-Flow Vehicular Movement l 7 meter wide CONCRETE External Ap-

proach roadl Ample Streetlights l Landscaping & Green Plantation

l 5 Layer Security l Company owned personnell Outsourced security personnell High boundary wall topped with barbed wire

fencingl 24 house CCTV security surveillancel Access controls for restricting in and out

movements from the warehouse.l Ample Support Infrastructure like Drivers

Restrooms, Canteen, Truck Parking Bay, Etc

From the stables of LOG.INDIA, the country’s most respected logistics and supply-chain magazine, comes the LogisticsWeek Director 2012, a much-awaited reckoner that will list India’s 3PLs, 4PLs, transporters, solutions and service providers in the material handling and warehousing space, freight forwarders, shippers, cold chain service providers and all the stakeholders of the industry. Do not miss the chance to reach out to the decision-makers of the industry.Avail of huge early-bird discounts, NOW

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LogisticsWeek Inaugural Issue August 2011