LogisticsWeek November 1-15, 2011

The World Bank says that Indonesia’s logistic ex-port expenses are higher than neighboring coun-tries as Indonesian ports are below international standards.

As a result, World Bank Indonesia offi cial Henry Sandee said that Indonesia could not directly ex-port its products to Europe. As a result, exports must go through Malaysian and Singaporean ports.

Mr. Sandee said the capacity ports, such as Tan-jung Priok, could only accommodate ships carry-ing 4,000 containers. Meanwhile, ports in Europe and Malaysia can accommodate ships carrying 14,000 containers.

The logistical cost from factories to Indonesian ports is also ineffi cient. The logistical costs from a Cikarang-Bekasi factory to Tanjung Priok Port, for example, can reach US$775, more than a third higher than Malaysia.

The World Bank has suggested that the govern-ment reduce logistical costs and coordinate with businessmen to discuss regulations.

Based on the Logistic Performance Index (LPI) released by the World Bank in 2010, Indonesia was ranked 75th out of 183 countries, far behind Malaysia (29), Thailand (35), the Philippines (44) and Vietnam (53). A logistics survey conducted by the Bandung Institute of Technology (ITB) showed that Indonesia’s logistical cost reached 24 percent of GDP or higher than Thailand’s 16 percent.

“Indonesia has made much improvement, but other countries do it faster,” added Henry.

In response, the Indonesian government is ex-ploring ways to trim logistics costs to boost the country’s competitiveness. Vice President Boedio-no promised to carry out several action plans to reduce costs. The fi rst plan is to create a proper transportation system by building the necessary infrastructure. Construction of the north Java rail-way is expected to be complete by 2013.

The second plan is to mobilize state-owned en-terprises to increase national logistical capacity.

Deputy Trade Minister Bayu Krisnamurthi said that Indonesia is an archipelagic country and cannot be treated the same as other countries in terms of logistical costs. Nevertheless, the govern-

The fl oods in Thailand are having a cascading effect on global supply-chains. Several Indian

manufacturers, mainly auto components, car and hard drive manufacturers, among others, have been hit. Now most of them are either scrambling to source components from elsewhere or have revised profi t fi gures for the next quarter.

In the last couple of years, one phrase I have often heard is, “What’s your Plan B?” A few decades ago this was simply put as “Don’t put all your eggs in one basket”. So why do companies rely solely on one source for compo-nents, and fi nd that they have to scamper around if that road is closed?

When the double tragedy of the earthquake and tsunami hit Japan early this year, companies banking on Japan were stupefi ed. The problem was further exacer-bated as similar industries were clustered in one area thus creat-ing production synergies, reduce transport costs and also develop skilled workforce. But therein lay the problem.

That is one advantage compa-nies in India have. Most of them have set up plants across various states in the country. God forbid, if we should face a situation like Thailand or Japan, although there might be a shortage but there will continue to be availability.

Your’s truly,Jayashree Mendes

Editor, LogisticsWeek

The Indonesian government is working at trimming logistics cost after a World Bank report cited the high logistics cost in the country.

NewsDesk

Insight “Our Objective IsZero Modi cations”Souma Das, MD & VP Sales, Infor India, reveals how its range of products can help the supply-chain. PAGE 11

Sally Buchholz, VP (Customer Service & Marketing) at Saia, Inc. offers per-ception into how companies must monitor its carrier’s metrics.

Sea Changes For Logistics

PAGE 4

ment is still targeting a logistic cost ratio of 21-22 percent by 2015.

National Development Planning Min-ister Armida Alisjahbana said the govern-ment was accelerating the implementation of a regulation to reduce high logistical costs and coordinate with businessmen through the Indonesian Chamber of Com-merce and Industry.

Mr. Boediono said an improved logistics system was necessary not only to ensure that goods were competitive but also to in-tegrate national economic activities.

“We sometimes forget the importance of logistics. It’s important to act to real-ize our logistics systems plan,” Boediono said during the opening of the Indonesia Logistics Summit at the Indonesian Cham-ber of Commerce and Industry (Kadin) last fortnight. He said the government would revise necessary regulations that created longer logistical in addition to providing improved land, sea and air infrastructure. “The government will maximize the use of the state budget for streamlining logistics.”

According to the Indonesian Logistics Association (ALI), Indonesia’s logistical

costs are between 25 and 30 percent of the GDP, among the highest in Southeast Asia. That fi gure is higher than in Thailand and Singapore, which stand at 16 percent and 10 percent, respectively.

According to the Transportation Minis-try, operational costs for freight delivery by truck in Indonesia stand at US$34 per kilo-meter, compared to an average of $22 per kilometer throughout Asia.

National Development Planning Agency (Bappenas) infrastructure deputy Dedy S. Priatna said that among the short-term so-lutions was keeping ports operational 24 hours a day. “This will increase productiv-ity without new investment,” he said.

Mr. Priatna said a 24-hour port would ef-fectively cut national logistics costs from 17 percent of total production costs to 10 per-cent by 2015. “While waiting for the con-struction of new infrastructure, a non-stop operation only needs renewed regulations but is very effective.”

State port operator PT Pelabuhan Indo-nesia (Pelindo) II president director RJ Lino said nonstop operation would reduce the cost of ships’ time in port.

Editor’s NoteForever There

Jayashree Mendes

`25logisticsweek.com

November 1–15, 2011

2 November 1—15, 2011 www.logisticsweek.com

nWorking in conjunction with the Deutsche Transport Compagnie (DTC) in Nurem-berg, Hellmann Worldwide Logistics UK has launched an-other direct feed service into the Eastern region of Germany. Operating from Basildon and Lichfield in the UK to Nurem-berg and vice versa, the new shuttle system will strengthen distribution quality in the East. It will also complement existing services that Hellmann runs to Osnabrück, Stuttgart, Hanover, Whittlich, Frankfurt and Ham-burg. The Nuremberg service will run with Groupage and Part Loads direct into the Eastern region. The service can be used from the UK to Germany and Germany to the UK, for either single or round trips.

nOAG Cargo’s coverage of the South American air cargo mar-ket is being extended with the addition of all of TAM Airlines’ cargo schedules for flights serv-ing Argentina, Bolivia, Brazil, Chile, Colombia, Paraguay, Peru, Uruguay and Venezuela. The airline is also using access to OAG Cargo’s international freight forwarder customer base to promote the launch of its lat-est route from Brazil to Mexico. TAM commenced a daily non-stop Airbus A330 service on the route on October 30th 2011.In addition, TAM will publish all of its flight schedules to and from Europe, where its network includes Belgium, France, Ger-many, Ireland, Italy, the Nether-lands, Portugal, Spain, Switzer-land and the UK.

nCEVA Logistics has been crowned the Best 3PL Supply Chain Provider in the 2011 CHINA Awards organized by the Global Supply Chain Council.

Winners were selected by an independent panel of judges comprising China’s leading sup-ply chain industry experts and also by public online voting. CEVA is the only 3PL supplier that has been presented with an award in this year’s ceremony.

This is the second time that CEVA been named as the Best 3PL Supply Chain Provider at the CHINA awards.

CEVA started operations in China in 1988. Currently, CEVA has 88 sites all over mainland

News and other happenings in India and other parts of the world in the last fortnight.

China, Hong Kong and Taiwan and manages more than 1.4 million sq m combined storage space.

nArshiya Rail Infrastructure Ltd has recently won a tender for movement of 24,000 MT of copper concentrate for Sterlite Industries (India) Ltd, a Vedanta Group company.

The movement of copper concentrate will be from Khetri (Rajasthan) to the copper smelt-er unit of SIIL, located at Tutico-rin (Tamil Nadu) over a period of six months.

Arshiya Rail was the winner amongst five other bidders for the deal including service pro-viders from coastal shipping. As part of the services, Arshiya Rail will be providing an end-to-end solution to Sterlite for this movement which also includes first and last mile transporta-tion and handling.

nThe global logistics service provider Logwin is expanding in India. The company opened an office in the metropolis of Hyderabad in October. This means that Logwin now oper-ates a total of nine locations in India - Bengaluru, Chennai, Hy-derabad, Karur, Mumbai, New Delhi, Pune, Tirupur and Tuti-corin.

Hyderabad is the capital of the Indian state of Andhra Pradesh and is regarded as an IT center and an important lo-cation for the pharmaceuticals industry. The city has an inter-national airport, a container depot and a direct highway connection to the sea port of Vishakhapatnam. Today the logistics service provider em-ploys 74 people throughout the country.

nCaterpillar Logistics Inc. an-nounced plans to further en-hance the industry’s best global service parts distribution net-work with the addition of a new parts distribution center in Cali-fornia. The site is located in the Tejon Ranch Commerce Center at the junction of Interstate five and Highway 99 in Cen-tral California. With excellent accessibility to major airports and highways, this location will ensure rapid delivery of service

parts to dealers and customers. The new 400,000-square-foot facility will employ 100 to 150 people and is scheduled to be operational in late 2012. The California facility will utilize Service Parts Management.

nCon-way Freight has been recognized by Transfreight with its 2011 LTL Carrier of the Year award.

The company presented Con-way Freight with the honor at its inaugural carrier recognition event held recently at the Oasis Conference Center in Loveland, Ohio.

To determine the winner in the LTL category, Transfreight evaluated its motor carriers on a range of objective per-formance criteria, including on-time pickup and delivery, accurate and timely invoicing, safety and compliance, and cargo claims quotient. Con-way Freight has served the national LTL needs of Transfreight since 2007, handling several of their key accounts.

nSoutheastern Freight Lines has received an Outstanding Service Award from DuPont that is based on a number of service quality measurements. The award was presented at the DuPont Truck Carrier Safety and Security Conference.

DuPont’s Outstanding Ser-vice Awards recognize car-rier performance and safety excellence for package and bulk truck services rendered in 2010. Southeastern was recognized in the LTL Services category.

To determine award winners, DuPont measured service qual-ity including safety consider-ations such as distribution inci-dents, customer quality service incidents, shipment tendering refusals, freight claims, strate-gic partnerships and shipment volumes.

nAs a part of the company’s industry-leading new vessel building program, Crowley Mar-itime Corp. christened its larg-est and fastest articulated tug-barge (ATB), the Legacy/750-1, on November 3 in New Orleans.

The high-capacity tank barge is able to carry up to 330,000-barrels of petroleum

to ship cargo to Italy will be greatly benefited by OWSFS as they will deal with single ser-vice provider locally in India. This will eliminate the hassle of dealing with multiple agents in a remote location with the added language problems of a foreign country.

By having presence in Italy, OWS will give push to its new product “assistance in procure-ment”. OWS help its customers in procurement of their goods, consumables, spares and urgent material through its own of-fices.

nD. J. Powers Company, Inc., announced the opening of their newest branch office in Shang-hai, China.

D. J. Powers Company opened their European head-quarters in Rotterdam in April of 2010. In October of 2010 they celebrated 80 years in business as one of the oldest Georgia based freight forwarders and Customs Brokerage firms. D. J. Powers looks forward to con-tinuing to expand their global presence and international service capabilities in Europe, China and worldwide.

nCatering to the growing de-mand for integrated logistics solutions, Allcargo Logistics Limited in a joint venture with the Container Corporation of India, has opened Allcargo Lo-gistics Park, a new advanced Inland Container Depot strate-gically located in the heart of Dadri, Uttar Pradesh.

The new ICD offers supreme ICD facilities and infrastruc-ture with a 41264 square meter built up area, 21000 square me-ter paved yard and 5160 square meter covered warehouse. In addition, the facility has a 75000 TEU handling capacity per annum apart from provid-ing superior quality, ultra-mod-ern amenities like three reach stackers each with 45 tonne loading capacity, six forklifts with 10 tonne to 3 tonne han-dling capacities, 100 tonne electronic weighbridge and two high-mast lighting columns.

To start with, Allcargo along with Container Corporation of India has made a joint invest-ment of Rs.190 million in this initiative.

products and the 16,000-horse-power tug can generate speeds of 15 knots or more, making the ATB an industry leader. When coupled together, the vessels measure 674 feet in length, only 23 feet shorter than One Shell Square, the tallest building in New Orleans and the state of Louisiana.

nAgility Pakistan was re-cently awarded the “Global HR Excellence” award for in-tegrity and excellence in cus-tomer service. This is the sec-ond year in-a-row that Agility has received this award. Kiran Abbasi, General Manager of Human Resources for Agility Pakistan, received the award, from Makhdoom Amin Fahim, Senior Federal Commerce Min-ister and Hameedullah Jan Af-ridi, Chairman IPO. The Global HR Excellence Awards is an an-nual event that showcases the best HR talent in Pakistan. It honors human resource profes-sionals for their contributions to helping the development of high-performing and produc-tive workforce within their re-spective companies.

nSouthern Air Holdings, Inc. announced that it has signed a multiple year B747 ACMI agreement with Centurion Air Cargo, a Miami-based all-cargo carrier that provides premier scheduled service to destina-tions throughout the U.S., South America, Europe and Asia. The aircraft began operating for Centurion Air Cargo last month.

Centurion Cargo, together with its related party SkyLease Cargo, is the leading cargo car-rier out of Miami International Airport and operates a fleet of four MD-11F aircraft, leases an additional six (6) MD-11F’s from SkyLease Cargo and operates scheduled all cargo service to multiple destinations in South America, Central America, Mex-ico, the Caribbean, Europe and World Wide charters.

nOWS Freight Systems (OWS-FS) announced its expansion in Europe with the establishment of “OWS Freight System Italia Srl” at GENOA, Italy.According to OWS, manufactur-ers and traders in India looking

In BrIef

3November 1—15, 2011 www.logisticsweek.com


CONTINUED ON PAGE 9

LogisticsWeek is also available on iPad

OPEN FOR FREE TRIAL.

Download Now!

While carriers are charged with making sure their service and products support the busi-ness needs of their customers’ through effective management and streamlined operations, business executives must moni-tor their carrier’s performance metrics to make sure they are getting the best value for their shipping dollar.

Transportation costs have long been shaped by a num-ber of factors, but now more than ever, outside forces on the transportation industry can affect delivery. Carriers, adher-ing to or planning for various regulation changes such as those expected to modify driver hours-of-service, will affect the

Delivering goods is an ongoing, intricate process in which business executives must learn to balance service quality and their transportation costs.

Tracking Carrier Metrics And The Bottom Line

rising cost of transportation. Aside from regulatory changes, the costs of new equipment, advanced technology, employee health care benefi ts and fuel has pushed pricing higher.

Many business executives are also worried that tight ca-pacity over the next several years will make it more dif-fi cult to keep their shipping costs low. As such, many are working with their carriers more closely than ever.

How does a business begin to

measure carrier service? First, determine what service, prod-ucts or results are most impor-tant to your business. According to the 2011 National Trends in Small to Medium-sized Busi-nesses Survey, executives said they valued on-time delivery (65 percent) most followed by pick-up performance (11 per-cent) and claims-free service (9 percent).

Businesses should monitor their carriers’ metrics to deter-mine which ones directly im-

pact their day-to-day operations. And, because needs evolve, businesses should cultivate long-term relationships with carriers.

A carrier should be able to provide their customers the metrics that are most impor-tant to them to ensure an ac-

Sally Buchholz

curate scenario that fi ts their particular business. Most carri-ers have their own internal per-formance indicators but each business should inform the carrier that they are monitor-ing the carrier’s performance

Businesses should monitor their carriers’ metrics. and, because needs evolve, businesses should cultivate long-term relationships with carriers.

Spending Expected (2011)


By Martha Lessman KatzA strong enterprise-wide information security program includes managing third-party risk. But assuring that you have diligently investigated your service and sup-ply chain providers lends additional assurance that they will meet your security requirements.

Do their Security Policies comply with yours? Have they implemented them and performed the requisite employee training? If so, Contract Protections and On-going Supplier Monitoring is the next step. Key contrac-tual provisions include:Confidentiality: Ensuring suppliers understand what your confidential information is, that they are obligated to secure it and not disclose it without your consent. IP Ownership: If the supplier has access to data about your customers, your products, and operations, not only should the confidentiality of this information be main-tained but the contract should clearly provide that your company is the sole and exclusive owner. If the supplier is developing other materials or technology, the con-tract should default to company ownership. Service Levels: Suppliers should be obligated to meet your requisite level of service on a consistent basis with, per-haps, the right to terminate for inconsistent service.

Require compliance with policies and procedures.Ongoing Monitoring: Ensure you have the right to access the supplier’s facilities to inspect, audit, review ongoing risk assessments, and monitor data access and use.Data Breach: In the event of a breach, you should control the investigation. You should determine if data breach

notification is required. If you believe it is, you should then control whatever notification may be required.

Appropriate representations and warranties:Indemnification: Ensure liability limits and disclaimers are appropriate. Insurance should be required assuring that a pool of money is available to provide the requisite indemnification and defense if you are sued.Termination: Ensure that your rights to terminate ad-dress your needs clearly. This applies not only to breach. You may need the ability to adjust the contract for business reasons. If your industry experiences a business downturn, the primary user is a business unit that is being sold or you are acquiring a company, the contract should be flexible enough to enable you to make the necessary adjustments.

Be on guard if the supplier licensed software to pro-vide your services. The contract terms should ensure you have the right to continue to license key software if desired.http://bit.ly/rteVEe

Demand Planning in CPG industry - Practising The Best PracticesBy Umesh SonawaneNo matter which industry you are in, you would have constantly encountered the term - “Best Practices”. In order to maximize the shareholder value, organizations are constantly striving to adopt these best practices in almost every domain or process relevant for them. De-

mand planning is the most critical process in the con-sumer packaged goods (CPG) industry, since it drives all downstream processes (raw material/finished goods inventory planning, procurement planning, capacity planning, manpower planning, transportation plan-ning, etc.) for running the organization in the most ef-fective and efficient manner.

First best practice is to set up the formal demand planning process. This also needs setting up of a “de-mand planning organization”, and demand planning systems which would offer best-in-class performance. Demand planning process has many sub-processes which includes - setting up demand planning objectives and metrics for different business units/customers/key items/locations, setting up the frequency of the forecast-ing process with the time horizons, formulating a plan to cleanse the history data which is the main input to the statistical models, deciding upon the level at which the forecast has to be generated at, setting up the proc-ess for - accounting for a short term market event or promotional forecast, establishing a consensus forecast, and finally reconciling the top level collaborate forecast at the bottom level before transferring the operational forecast for replenishment purpose. Demand Planning is the last step in the cycle is a formal review of the fore-cast with the ongoing Sales. In this step, the actuals are compared with the planned metrics (MAPE, forecast ac-curacy, etc.) and the appropriate steps are taken to in-crease the forecast performance in the next cycle.http://bit.ly/uM4wgL

Managing Supplier Risk Blogs, Journals, Book releases


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

Changing Track, Changing Tack

Marble and marble products originating in Rajasthan was moving to West Bengal pri-marily by road, which, as is the case across most transpor-tation corridors in India, was dominated by unorganized trucking companies. This transportation route also in-volved movement of products from other segments such as white cement manufacturers and clay mines, though marble formed the largest part of the product mix.

Rail WoesThe movement of marble from Rajasthan to West Bengal was plagued by unavailability of trucks on a regular basis, fre-quent fluctuation in freight rates, unreliable delivery time and lack of information about the cargo in transit. Besides, breakages and loss of material during transit added to the in-efficiency of the overall logis-tics system. The incidence of breakage was so frequent that the marble industry had virtu-ally accepted up to 5 percent of

Hardeep SinghCEO, Inlogistics

Movement of marble from Rajasthan to West Bengal required Inlogistics to create a competitive delivery system, mainly using container trains. Here’s how they did it.

case study

marble breakage during transit as a norm and it was factored in the costing. The costs were also affected by rising fuel prices and axel load deduction. The delivery and cost uncer-tainties made product pricing in Kolkata market difficult sta-bilization of which could only be achieved by taking a hit on margins either at consignor or at consignee end.

Moving AheadHeavy cargo type, quick and safe delivery requirements, the desire to protect against mate-rial loss during transit and mar-gin pressures driven by high and varying logistics costs came together as good reasons for the market to consider a shift to rail-based transportation. Inlo-gistics, a container train opera-tor with the license to operate trains across most of the regions was keen to catalyze this poten-tial shift. But besides rakes and their operational capability, the following formed the corner-stones of Inlogistics’ strategy to enter this segment.1. Development of perceptual

acceptability in market for containerized movement

2. Attainment of an optimal aggregation rate to facilitate competitive delivery time

3. Development of a central-ized information system set-up

4. Generation of demand suf-ficient to achieve optimal utilization in turn affecting frequency favorably. For this, the area of aggregation for In-logistics was expanded from 150 Kms around Kishangarh region to a catchment area extending as far as 700 Kms.

Further, Inlogistics helped with redesigning the market’s supply chain by employing a four pronged strategy.

High rake frequencyTo ensure that the promised de-livery time is achieved, it was necessary to not just increase the number of rakes existing in the system but also ensur-ing that they turn around fast which depends a lot on the ag-gregation of rake load. Inlogis-tics made continuous business development effort to keep pace with the committed frequency of one rake per three days. A large part of the load was picked

from the Kishangarh market; however, the catchment area was widened to all over Rajast-han to add to the speed of ag-gregation.

To further ensure faster ag-gregation, Inlogistics also in-troduced aggregation of vari-ous other commodities namely Kotastone from Kota, white ce-ment from large white cement producers and clay from Merta and Bikaner.

Additionally, aggressive ef-forts in business development were made to get return loads in the east-west direction. Con-gregation of these efforts led to following improvements:

• Gradual ramp-up of circuit frequency from the initial 1 rake per ten days to 1 rake per 3 days

• Very competitive delivery times that improved from the initial 18-22 days to 11-14 days one way transit time.

Transparent and standardized freight:

Ever increasing haulage charges, increase in first & last mile charges due to diesel price hikes, demand fluctuations and regulatory changes had resulted

in dynamic variations in cost when the market depended on road transport. Inlogistics intro-duced flat, standardized pricing, offsetting the margin erosions on the clients’ end due to premi-um pricing during constrained supply conditions.

To maintain transparency in logistics costs for customers, Inlogistics issued price circulars and to insulate the customers from pricing uncertainty, Inlo-gistics limited the number of re-visions in price circulars in any given month.

Credit facility for customers:Customers with high vol-

umes and quality payment his-tory had no existing advantage vis-à-vis the customers with low volumes and/or poor pay-ment history. Inlogistics of-fered credit to customers offer-ing consistently high volumes coupled with good payment re-cord. Thus, Inlogistics was able to ensure the stickiness of large volume key customers towards containerized movement of their products in turn, enabling the longer term sustenance of this service.


The nation’s aging transportation network costs US businesses and families about $130 billion a year, a

sum he was a tax and a drag on the economy. Failing to upgrade the network could cost the US hundreds of billions dollars and hundreds of thousands of jobs by the end of the decade. Barack Obama, urging Congress to pass the Transportation Bill

Running your procurement purely on a short-term, point-in-time, cost-minimisation model is like shop-

ping for rock-bottom price home insurance: it looks real smart until your house burns down!

Bob Lutz, former vice-chairman of General Motors

Bangalore needed a global mall with a lot of retail depth and a design that gave the consumer a shop-

ping experience like no other. The city has been waiting for a mall like Phoenix Marketcity and we expected be-tween 30,000-35,000 footfalls and are extremely happy to say that we have gone beyond our expectations.

Atul Ruia, Managing Director, Phoenix Mills Ltd.

We have seen that sales get a boost in the festival season, but this year sentiment has been tepid.

We don’t expect a major upswing in the near future; the challenging economic environment is affecting in-dustry.

Arvind Saxena, Director (Marketing & Sales), Hyundai

We sometimes forget the importance of logistics. It’s important to act to realize our logistics sys-

tems plan.

Boediono, Vice-President, Indonesia

It reinforces the positioning of the supply chain as a key competitive weapon in enabling companies to

reduce costs and increase sales. It highlights the need for excellence in planning (to balance demand and sup-ply) and to provide the visibility of different demand patterns to enable the implementation of segmented supply chain strategy.

Dr Janet Godsell, from the Supply Chain Research Centre at Cranfi eld School of Man-

agement on how the Crimson & Co report reveals 2011’s biggest concerns within the supply chain.

Indian consumers love premium and imported prod-ucts. Hence, had we started from the bottom end of

the market, consumers would have never accepted us when we entered the premium segment.

Kurush N Grant, ITC’s Executive Director

During our extensive consultations, industry has raised a number of valid issues around transition

(to the open market). As we all know, nothing good ever comes easy. Changes brings challenge, but it also brings opportunity.

Gerry Ritz, Canada’s Federal Agriculture Minister,

promising to set up a “crop logistics work-ing group” to deal with supply chain issues

arising from the government’s plan to remove the Canadian Wheat Board’s monopoly over western wheat and barley sales.

For years, supply chain sustainability was driven by regulations that measured carbon emissions, hazard-

ous materials and recycling. In 2011, we’ve seen a shift and organizations are broadening the defi nition of sus-tainability to focus on total energy effi ciency.

Lorcan Sheehan, Senior Vice-President, Marketing, ModusLink

Supply chain is a mystical world that only came into existence recently, which is why businesses need to

adopt a completely new mentality.

Dirk Schmidt, Director, Logistics, Bosch Rexroth Corporation

While 57 percent of goods in India are transported by road — the most ineffi cient, expensive

and emissions-intensive mode of transport — the fi gure in China is

22 percent.

In 2010-11, India manufactured 2.50 million cars, 12.671 mn motor-cycles, 0.548 mn tractors, 0.408 mn LCVs, 0.344 million buses & trucks.

Straights And Bends


Containing The CompetitionPOrts uPdates

In this section, LW will provide the latest in ports and shipping news and a status on how the major ports have fared this fortnight.

Ship In Kakinada Port Catches Firen A ship belonging to SCI and given on lease to the ONGC was caught in fl ames in the wee hours of October 20, 2011. No loss of life was reported. Ac-commodation suites and ship kitchen were completely gutted when fl ames engulfed them on Kakinada Seaports Ltd. There was no damage to the drilling equipment belonging to ONGC that was loaded on the ship.

Kerala Plans For Coastal Shippingn Kerala government has worked out a development program for ports and coastal shipping by linking ports and in-land waterways. As part of

the program, 17 small and me-dium ports would be integrated along with Vizhnijam and Val-larupadam Container Terminal in Kochi to improve the cargo movement through state coast. According to an estimate, about 20,000 trucks carrying cargo run through Kerala’s small roads daily.

Indian Receives Honors For Shippingn India was recognized at a re-cent award function for ports and shipping held at Dubai un-der various categories. Shipping Corporation of India won three awards at the annual Seatrade Middle East and Indian Subcon-tinent Awards held on October 17, 2011. Other recipients of

the awards included the Nhava Sheva International Container Terminal for environment pro-tection, General Insurance Cor-poration (GIC RE) for marine insurance and Bernhard Schulte Ship management (India) got the ship manager award.

Ports, Orissa Share Info On Ore ExportnOrissa held a meeting where all the port authorities were requested to share mineral ore export information regularly with the state government, in an effort to curb illegal mining. Paradip Port had conceded to impart with the information, also Haldia and Vishakhapatan-am ports have agreed to share export details every fortnight.

Chennai Port Surcharge Af-fect Eximn Trade at Chennai port has been affected due to the levy of hefty charge under the guise of ‘Chennai Trade Recovery’ (CTR), a surcharge to deal with forced delays and heavy conges-tion at Chennai Port. No regu-latory methods were imposed by the Port Trust management and the Commerce Ministry and the port continues to earn Rs 10,000 per container even af-ter the port has been relieved of excess congestion.

Ashuganj Port Off-Limits For Indian A full-fl edged river transit facility through the Ashuganj port, Bangladesh is unlikely to

be made available to India for freight activities in the ‘near future’ due to the absence of necessary infrastructure at the port. In a recent meeting among Bangladeshi offi cials, various problems concerning the ports were discussed. A number of issues came forth like lack of required infrastructure, non-fi nalization of transit fee, ab-sence of an offi ce for customs department, unavailability of shed for transit goods and lack of necessary arrangement for their security. A core commit-tee has recently submitted a report recommending transit fees ranging from US$ 252 to $ 54,368 for each consignment of cargo using Bangladesh road, river and train routes.

Port Traffi c This FortnightPort of ChennaiThere was a miniscule drop in the quantity of cargo handled this fortnight by 0.5 percent, and compared to last fortnight, a steady decline in the quantity of container handled by 27.9 percent.

Port of CochinComparing to the last fortnight, the quantity of cargo handled this time around rose sharply by 55 percent and the container handled, too, rose by 20.2 percent.

Port of EnnoreThere was a decline in cargo handling at the port this fortnight by 19.3 percent

Port of JNPTThis fortnight, there was a slight drop in the per-centage of container handled at the port by four percent.

Port of MumbaiThere was a tremendous rise in the quantity of cargo and container handled at the Mum-bai Port this fortnight. Comparing to previous fortnight, there was steep rise in the quantity of cargo handled this time by 42 percent and a remarkable growth in the percentage of con-tainer handled by 72.4.

Port of ParadipWhere compared to last fortnight, there is a drop in the quantity of cargo handled by 15.4 percent this time.

Port of TuticorinThe quantity of goods handled at the port this fortnight showed a rise by 21.7 percent, com-pared to last time.

PORT OF CHENNAI

Total Cargo Handled 1,246,000 T

Total Container Handled 27,776 TEU

PORT OF ENNORE


PORT OF JNPT


PORT OF PARADIP


PORT OF TUTICORIN


PORT OF MUMBAI



(Data available for 12 days)

(Data available for eight days)

(Data available for all 16 days)

(Data available for nine days)

(Data available for nine days)

PORT OF COCHIN



*Disclaimer: Due to public holidays, server breakdown, failure in updating website regularly and such related issues, traffi c data for the above men-tioned were extrapolated from select few days.

(Data available for ten days)

(Data available for six days)

(Data available for seven days)


against its competitors. The carrier should always provide complete transparency by mea-suring every process and par-ticipant in the chain.

Speaking of forging last-ing partnerships, the business should begin with clear commu-nication of its philosophy and key performance indicators. An example of a company philoso-phy might be “customer-centric performance.” If the business is customer-centric and utilizes customer feedback to drive quality, the carrier should do so as well.

Businesses should have a conversation with the carrier about how it incorporates cus-tomer feedback into its day-to-day operations. The business and carrier should then create a “shared” mission and service philosophy.

Because performance indica-tors vary from one business to the next - sometimes even with-in departments - carriers must have a clear picture of what these are and how their perfor-mance plays a part in their cus-tomers’ success.

One way a business and car-rier can create a shared system for managing performance is to create a monthly scorecard. This scorecard should provide information to ensure the business’ expectations are be-ing met and the level of trust and confi dence is not being compromised. Both should ap-proach the use of a scorecard as an opportunity to welcome open dialogue - recognizing that each wants the best for each other.

Businesses should also consid-er these additional factors when considering a long-lasting part-nership with a shipping carrier:

Due diligence Businesses should do their homework so that they under-stand shipping terminology and can accurately discuss price and service.

Consistent perform-ance follow-up Businesses should create a work-able schedule to meet with their carrier to discuss performance and to manage any issues before they become a problem. A good rule of thumb would be to meet

on a quarterly basis to review each other’s needs and to dis-cuss performance and opportu-nities. Open communication is key so ideas can be shared and expectations met.

Price versus service It has been said, “You get what you pay for.” This philosophy holds true when it comes to businesses and shipping car-riers as well. Business should weigh the costs charged by a carrier against the level of ser-

CONTINUED FROM PAGE 4

Claims-free Service 9%

Pick-up Performance 11%

ON-TIME DELIVERY 65 %

vice the carrier is providing. The 2011 National Trends

in Small to Medium-sized Busi-nesses Survey also showed that more than one-third (39 per-cent) of those surveyed said capital expenditures are the same this year as in last year. Thirty-three percent say capital expenditures are higher this year than last and more the one-quarter (28 percent) say capital expenses are less this year than last. This means that in spite of a weakened economy a third of the business executive surveyed are operating with increased budgets and maintaining their supply chain to get products from point A to point B without compromising availability, qual-ity or cost.

The author is Vice-President of Customer Service and Marketing at Saia, Inc. Ms. Buchholz can be reached at [email protected].

What Matters In Transportation


A low-down on developments in surface transport last fortnight.

NEW EXPRESSWAY PROJECTSn The construction of 1000 kms of expressways under National Highways Development Project (NHDP) Phase-VI through Public Private Partnership (PPP) (basis in November, 2006) at a total cost of Rs 16,680 crore has been approved by the Union Govern-ment. In addition, there is a proposal to develop National Expressway No. NE II, i.e. East-ern Peripheral Expressway con-necting NH-1 at km 36.083 near Kundli and terminating on NH-2 at km 64.033 near Palwal.The expressway projects are-1. Vadodara-Mumbai (400 km)2. Delhi –Meerut (66 km)3. Bangalore –Chennai (334 km)4. Kolkata -Dhanbad (277 km) REAL TIME TRAININFORMATION SYSTEM nTo overcome limitations of the existing Train Running Informa-tion System, it was decided to develop GPS based train track-ing system jointly by RDSO & IIT-Kanpur. The system has been developed and working success-fully in number of trains.

It has now been decided to open the Real-time Train Infor-mation System (RTIS) to pub-lic in few trains to begin with, with effect from October 19, 2011. Minister of Railways Shri DineshTrivedi inaugurated this facility during the Economic Editors Conference.

One-Track Bind

RTIS system will provide the following information: (i) Train locations.(ii) Train running position (i.e.

whether train is running on time or if running late and by how much.

(iii) Train location with respect to next stopping station in terms of kms.

ROAD ACCIDENTS SURVEYn The Government has un-dertaken Road Safety Audit of selected stretches of National Highways/Expressways with a view to strengthen road safety on highways. The specifi c aim of Road Safety Audit is that safety should be a prime post-construction operative feature. The analysis of road accident data received from States/UTs reveals that drivers’ fault is the single most important factor responsible for accidents, fatali-ties and injuries. It constitutes 78.5 percent of the whole. The Union Ministry of Road Transport & Highways collects data on road accidents from all States/UTs in a format developed as per the Asia Pacifi c Road Ac-cident Database (APRAD) project of United Nations Economic and Social Commission for Asia Pa-cifi c (UNESCAP).

HRIDYESH TRIPATHI CALLS ON DR. C. P. JOSHIn The Physical Planing and

Works Minister of Nepal Shri Hridyesh Tripathi met the Un-ion Minister for Road Transport & Highways Dr. C.P. Joshi to dis-cuss issues regarding roads and infrastructure in Nepal. They discussed the development of infrastructure at Integrated Check Posts (ICPs) on Indo-Nepal border.

Establishments of ICPs at 13 locations on international borders have been approved by the Government of India under a Plan scheme under 11th Five Year Plan. Out of 13 ICPs, 4 are located on India-Nepal border.

FOUR LANING OF SECTION OF NH 9 n The Cabinet Committee on Infrastructure approved the project of four laning of Vijaya-wada-Machlipatnam section of NH 9 in Andhra Pradesh under NHDP Phase IV-A on DBFOT basis in BOT (Toll) mode of delivery.

The total estimated cost of the project is Rs.736 crore out of which Rs.130 crore will be for land acquisition, resettlement and rehabilitation and pre-construction. The total length of the project is 64.611 km. The concession period is 20 years in-cluding construction period of 24 months.

The project will reduce the time and cost of travel. The project will be in Krishna dis-trict in Andhra Pradesh.

THE LW CROSSWORD

across:1. A manufacturer that turns the product of a raw materials supplier into a

larger variety of products6. number used to quantify a metric9. Predictions of how much of a product will be purchased by customers10. transfer of money for provision of goods or services13. Communication standards that determine message content and format14. A carrier selection criterion that considers the variation in carrier transit

time16. A state in which all the members of a group support an action or decision18. business that takes title to products and resells them to fi nal consumers19. The concept of adding an element of human judgment to automated

equipment20. an organization’s central computer system21. defi nition that is applied to the hardware which is used to build racks22. practice of using a large box or carton to contain multiple smaller

packages23. rolling stock carriers use to facilitate the transportation services

down:2. Process of making necessary adjustments to change or switchover the

type of products produced on a manufacturing line3. A term used for refrigerated vehicles4. To utilize a third-party provider to perform services previously performed

in-house5. a truck trailer being transported on a railroad fl atcar7. Outbound logistics, from the end of the production line to the end user8. multiple items that are produced simultaneously during a production run11. understanding issues before they become apparent12. An alphabetical listing of commodities15. technique in which a ERP system traces demand for a product17. A data point that diff ers signifi cantly from other data for a similar

phenomenon

AnswersAcross: 1. FABRICATOR, 6. MEASURE, 9. FORECASTING, 10. PAYMENT, 13. PROTOCOL, 14. RELIABILITY, 16. CONSENSUS, 18. RETAILER, 19. JIDOKA, 20. MAINFRAME, 21. RACKING, 22. OVERPACK, 23. EQUIPMENTDown: 2. CHANGEOVER, 3. REEFER, 4. OUTSOURCE, 5. PIGGYBACK, 7. DISTRIBUTION, 8. COPRODUCT, 11. PROACTIVE, 12. CLASSIFICATION, 15. PEGGING, 17. OUTLIER

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 —— 2,850 2,150 3,850 3,450

Kolkata 1,850 —— 2,400 1,900 2,200

Mumbai 2,450 4,100 —— 2,400 1,900

Chennai 3,900 3,125 2,250 —— 850

Bangalore 3,300 3,450 1,650 850 ——*Rates are indicative Source: Trimurti Cargo Movers Pvt. Ltd.

Chief Editor and Publisher: Jacob Joseph [email protected] Director: Jayaram [email protected] Editor: Anand [email protected]: Jayashree [email protected] Executives: Anuja A, Pritha DeyChief Designer: Shivasankaran Pillai

Singapore Bureau: Victor [email protected]: +65 96553730AD-SALES SINGAPORE: Jimmy [email protected]: Ashok Chand [email protected] [email protected] Phatnaik

Printed at Print House India P.Ltd., Rabale

MIDC, Navi Mumbai - 400 705, India and published at Bldg.4/6, Sona Udyog, Parshi Panchayat Rd., Andheri (E), Mumbai - 400069.No part of this publication may be reproduced or transmitted in any form or by any means including photocopying or scanning without the prior permission of the publishers. Such written permission must also be obtained from the publisher before any part of the publication is stored in a retrieval system of any nature. No liabilities can be accepted for inaccuracies

of any description, although the publishers would 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 Industrial Sourcing Media Private Limited.. All disputes are subject to the exclusive jurisdiction of competent courts and forums in Mumbai only.

surface transPOrt uPdates

6

10 11

12

13

14 15

16 17

18 19

20 21

22 23

EclipseCrossword.com

1

8 9

7

4 52 3

4

5

1 2 3

9 10

6

7

8

11

12 13

14

15

16

17

18

19

20 21

22

23

24

EclipseCrossword.com

Singapore: Hamburg Media Private LimitedRed dot Building, 28 Maxwell road, #03-05, Singapore - 069120Permit No: MICA (P) 179/08/2011Dubai Offi ce: Ashish [email protected] Offi ce: Hamburg Media Limited78 York Street London W1H 1DP, United Kingdom


“Our objective is zero modifications”

How does Infor help consoli-date different aspects of the supply chain process?

Souma Das (SD): As the third largest enterprise software com-pany in the world, Infor offers a range of solutions from Enter-prise Resource Planning (ERP), Supply Chain Management (SCM) to financial management and strategy execution.

Infor10 - our latest innovation - delivers solutions tailored by micro vertical -industry (i.e. think bakeries or breweries rather than food and beverage). In the cur-rent global business climate, it is not just about survival of the fittest, but also about survival of the fastest; this is especially true for those tasked with managing and optimizing the supply chain. Infor10 has been built to require little or no customization and can be implemented in a shorter span of time.

Infor10 Supply Chain Plan-ning is a comprehensive suite of integrated applications that of-fer the best tools for achieving top performance by consolidat-ing different aspects of supply chain planning. It’s built on a unique, advanced statistical fore-casting engine that intelligently predicts demand rather than re-peating shipping history. Infor10 Supply Chain Planning enables comprehensive “what if” simu-lations that allow businesses to make decisions based on the most complete information. Be-cause the solution is specialized by industry, it can account for industry-specific constraints such as chemical tanks, baking ovens, and butchery freezers to maxi-mize throughput at least cost.

How does Infor help manage the transportation and ware-housing needs of customers ef-fectively?

SD: Infor’s WMS represents a new generation of warehouse management applications that enable companies and supply chain partners to be integrated, increasing operational efficien-cy. It helps businesses to reduce warehousing costs by optimiz-ing productivity of warehous-ing assets such as space, people, and equipment. The latest open standards make it easier to take advantage of high productivity

IntervIew

tools such as RFID, bar-coding, and voice-directed technologies.

Infor owns a majority market share in Asia Pacific for ware-house management. In fact, our clients in India include largest retail operators like the Future Group, Tata Trent, Aditya Birla Retail and Madura Garments and LSPs like Future Supply Chains, DIESL, Allcargo Logistics to name a few.

When it comes to transpor-tation, Infor has more than 25 years of experience in enter-prise asset management (EAM), and Infor10 EAM Fleet Manage-ment has a proven track record for delivering innovation and value. The best-in-class, feature-rich asset and maintenance functionality makes it easier to process warranty claims, and better manage fleets of all sizes. Vehicle performance also im-proves through a more compre-hensive maintenance strategy to minimize down time.

Infor EAM Fleet Management tracks physical assets, schedules preventive and predictive main-tenance, manages spare parts, and creates paperless business processes with handheld technol-ogy. Infor10 Transportation and Logistics solution also helps route planning and optimization solu-tions for milk run requirement for food and beverages compa-nies, for example- PepsiCo, or sec-ondary requirements for FMCG or retailers.

3. Explain how Infor can help improve after-market service?

SD: These days, it’s not enough just to be more proactive

in tracking and managing perfor-mance of your service and main-tenance organization. Businesses need to create a fully-connected service organization that drives value across the entire enterprise.

Infor’s Service Management helps balance customer satisfac-tion, resource utilization, and profitability. It delivers fully inte-grated, robust, and scalable auto-mated field service management. It improves visibility of assets in the field, boosts service perfor-mance and increases revenue, while enabling a business to pro-vide aftermarket services more proactively and profitably.

How does Infor improve the planning and decision-making skills of employees in regards to supplies, manufacturing and packaging?SD: With today’s global supply chain, maintaining optimal bal-ance between available stock to meet service levels and invest-ment in inventory is a complex trade-off. Most companies err on the side of caution by keep-ing stock levels high as a buffer against demand uncertainty. However this holds up cash and can result in drainage of re-sources.

Infor SCM Advanced Sched-uler is a constraint-based sched-uling solution that addresses the unique challenges of managing the capacity of vessels, tanks and lines, and the flow of product between them. It gives organiza-tions the ability to adjust sched-ules on a minute’s notice with au-tomated optimization techniques and drag-and-drop capabilities, and create personalized views of schedules targeted toward spe-cific production operations.

It also means packaging lines and materials are synchronized to be available exactly when pro-duction is finished, to maximize available shelf life and reduce temporary storage. The solutions enable businesses to manage co-products and by-products, the complex interdependencies of products for processes – as well as managing the materials used in these production processes.

Do you customize Infor soft-ware to suit consumer needs?

SD: One size most definitely

does not fit all in the enterprise software market. Yet, some en-terprise software companies still attempt to force fit generic solu-tions into business. The result often is a heavily modified solu-tion with various customisations and integrations for third party solutions that no one can fully support.

With Infor10, our objective is zero modifications. Infor believes integrations, configurations, and Business Intelligence (BI)/analyt-ics shouldn’t be part of the imple-mentation. They should be part of the application. We are attempt-ing to dismantle the billion dollar business of extensive customiza-tion of business software. This is because - put simply — it is not in the customer’s best interest. Infor10 includes capabilities that deliver value right out-of-the-box, including automatic integrations and analytics with built-in alerts and workflow. These should be standard parts of a product, not add-ons.

At present, who are your com-petitors in the market?

SD: At present while we com-pete at one end with the niche best-of-breed suppliers in the ar-eas of BI, WMS, ERP etc. and at the other end with the large scale providers, no one in the market has what we do: deep industry functionality with end-to-end capabilities combined with a simple and effective middleware solution to make it all work to-gether.

What is the demand for tech-nology in Indian logistics and operations? How has India re-ceived Infor products?

SD: The demand for tech-nology in Indian logistics and operations is huge. Specifically WMS and Radio Frequency Iden-tification (RFID) have grown im-mensely over the past three to five years.

While RFID has, in many cases, been slow to live up to the expectations of the industry, it is really starting to emerge as a serious technology and many re-tailers who invested in it are now realizing benefits.

It is time now for other tech-nologies which have yet to fully find their feet in India (bar-cod-

ing, transport management sys-tems (TMS) and global position-ing systems (GPS)) to follow suit.

In future, what aspect of supply chain do you aim to improve upon with Infor solutions?

SD: One of the hottest areas in supply chain right now is the development of Sales and Op-erations Planning (S&OP). Quite frankly, the growth in this area has exceeded our expectations.

This has been driven largely by a remarkable evolution in customer demand. In the early stages S&OP focused on getting better BI into operational plans and balancing supply to demand. However with the addition of work flow processes to automate and then optimize much of this balancing, business have been in-credibly proactive and fused the S&OP ‘architecture’ with promo-tion campaigns, new product development and even R&D (es-pecially in the consumer goods / FMCG industry). The ‘traditional’ S&OP processes have quickly be-come a comfort zone – and cus-tomers are now questioning the boundaries.

Technology has had to evolve to offer a range of specific solu-tions. In addition to the initial planning and BI systems, the injection of workflow technol-ogy has been critical, and the ‘what-if’ engines of optimization /simulation have been part of the appeal to FMCG business look-ing to integrate product portfolio planning and new product devel-opment into the S&OP.

This has, of course, devel-oped a huge requirement for integration – something that we are already addressing with Infor10. Here ION is the founda-tion for what Infor10 offers, in-tegrating Infor and (importantly) non-Infor applications, enabling information sharing among ap-plications and providing rich an-alytics. This is now delivered in a personalized and easily present-able fashion on not only desk-tops and laptops but on mobiles and tablets, and in a digestible form similar to the way we’re us-ing social media.

This all combines with the ultimate aim in mind; to enable customers’ supply chain opera-tions to beat the competition.

Infor India is a provider of enterprise applications and services helping companies to improve operations and drive growth. An insight into the company’s supply chain products.

Souma DasMD & VP Sales, Infor India


Documents

LogisticsWeek November 1-15, 2011