As fl ooding in Thailand disrupts supply chains in many industries, the event—along with Japan’s March earthquake and tsunami—is prompting many to consider aspects of supply chain risk that might have been previously overlooked, says a recent report in Business Insurance.

While many expect global sourcing to become an even larger factor for businesses going for-ward, recent events are prompting companies to consider the geographic concentrations of suppliers, the need for backup suppliers and re-engineering processes to accommodate backup components should supply chains be disrupted.

With an estimated 45 percent of the world’s hard-drive production located in Thailand and fl ooded plants affecting production by major manufacturers such as Seagate Technology Inc. and Western Digital Inc., some analysts say the disruption could affect PC production through the fi rst half of 2012.

The fl ooding also has had a major impact on the auto industry, where disruptions at Thai auto manufacturing plants and parts producers re-portedly is expected to result in lost production of 250,000 vehicles worldwide.

Many Japanese companies relocated produc-tion to facilities in Thailand after the March earthquake and tsunami. London-based law fi rm Reynolds Porter Chamberlain L.L.P. said the move to Thai facilities helped many Japanese compa-nies mitigate their losses after the Japan disaster. But many now face further losses as a result of the fl oods in Thailand.

“The problem for insurers who provide busi-ness interruption cover to Japanese manufactur-ers is that they have to cover the losses stemming from the Thai fl ooding because so many business-es moved some or all of their supply chain there,” Daniel Saville, legal director in the reinsurance and corporate insurance department of Reynolds Porter, said in a statement. “Moving production from Japan to Thailand was “Plan B.’ The ques-tion now is whether those businesses have a “Plan C,’” he said.

Bad logistics is often the cause for unhappiness and displeasure. It could be due to numerous

reasons from traffi c snarls, to delays in paper work or some little-known regulation that could cause delays in delivery. But to the receiver, it is bad logistics.

Often, when you have asked for something to be delivered at a pre-decided destination and especially if you are eagerly awaiting the delivery, nine out of ten times it will never arrive on the scheduled date. This happens so often each time I order some books/CDs/appliances. The service provider will tell you that he has made more than one trip and there was no one home. And then you get into an argument.

Is ensuring prompt delivery so tough? Don’t responsible people sitting in offi ces take stock of goods that have arrived and those that need to be delivered? Is the infrastructure in such doldrums? Surely, they are not short-staffed. Nor do people live in such remote areas (In the movie Il Postino, a make-shift postman delivers a letter with prompt regularity to his only customer who lives on the top of a hill) where they need to search out more deliveries within the area to justify their trip.

And God help you if your parcel happens to be a passport.

Your’s truly,Jayashree Mendes

Editor, LogisticsWeek

Disasters in Japan, Thailand highlight need for continuity plan

Bangkok

Interview In For TheLong HaulMs. Shagun Kapur Gogia, Director/Founder of Tuscan Ventures, has grand plans for the cold chain industry in India. PAGE 11

Varun Dhawan, VP-Taxation, Blue Dart Express Ltd., simplifi es the issues with GST that have boggled many in the logistics industry.

Firms Rethink Supply Chain Risks

PAGE 4

Gerry Alonso, senior VP of claims at Fac-tory Mutual Insurance Co., noted that the “slow developing” nature of the Thai catas-trophe makes it diffi cult to get a handle on the extent of losses. And, the duration of the fl ooding could exacerbate the losses.

“We’ve had some clients that have been able to procure divers and go in there, but that gives you an idea of what you have.” Mr. Alonso said. “The frustrating part from a claims perspective, you can’t assess loss-es until the water’s gone.”

William J. Montanez, director of risk management at Ace Hardware Corp. and a member of the board of the Risk & In-surance Management Society Inc., said his company hasn’t been affected by either ca-tastrophe, though it relies on overseas sup-pliers. Mr. Montanez said, “At the back end, we have to look at safeguarding and how we can make it less risky to do it.”

With the Thai fl oods raising awareness of the risk of geographical concentrations of suppliers, Linda Conrad, director of stra-tegic business risk management at Zurich Financial Services Ltd. in New York, said her company has been working with clients to

identify where suppliers and industries are concentrated. “I think this illustrates the need for better continuity plans, including backup supplier arrangements, diversify-ing the locations of suppliers and using dif-ferent backup suppliers than competitors.”

Ms. Conrad also said companies are starting to ask existing suppliers about their own continuity plans. “People are also starting to do a lot more scenario anal-ysis, including calculating the potential impact of having to re-engineer processes if alternative components or parts don’t match the specifi cations.”

In general, the recent supply chain dis-ruptions are leading many companies to embrace “that resiliency mindset of: Let’s try to think through some hypotheticals and plan for this when it costs us less than when we are in a crisis,” Ms. Conrad said.

“At the end of the day I think the onus that’s going to be on risk management and management in general is how can we get a preview of what the future might look like and how will we respond to it,” Mr. Montanez said. “That’s what ERM is all about.”

Editor’s NoteEnfant Terrible

Jayashree Mendes

`25logisticsweek.com

November 16–30, 2011

Car manufacturers across the world suff er delays as factories lie submerged.

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2 November 16—30, 2011 www.logisticsweek.com

nThe Union of Small and Me-dium Enterprises (UNISAME) realizing the need for modern logistics and to facilitate SMEs with efficient supply chain systems signed MoU with IAL Logistics to offer warehouse to warehouse services for import and export to SMEs and connect them with global destinations for speedy and smooth ship-ments of their cargo at competi-tive rates.

President of UNISAME Zul-fikar Thaver said logistics is as important as banking, insur-ance and leasing and in the ab-sence of supply chain logistics an entrepreneur cannot operate smoothly. He said logistics in-cludes warehousing and collat-eral management and looking after complete movements of cargo satisfactorily from begin-ning till the end with the best affordable rates of the destina-tions involved. He expressed the need for smooth movement and efficient management of cargo as a good logistic compa-ny moves and manages cargo by arranging to receive and deliver cargo as well and acts as an in-termediary between buyers and sellers under the modern sys-tem of advanced logistics.

UNISAME will benefit from IAL as it has five offices in India and efficient systems.

nNestlé Australia won three awards in this year’s Austra-lian Supply Chain and Logis-tics Awards held in Perth last month. The longest running national awards program in the industry, the Australian Supply Chain and Logistics Awards is run by the Supply Chain and Lo-gistics Association of Australia.The iconic food and drinks com-pany won of the top award of the night, the 2011 Australian Supply Chain Management Award, for the recent introduc-tion of its integrated Robotic Layer Picker with FreePick Max-imiser Software into the Arndell Park Distribution Centre (DC). Arndell Park is a high volume national DC storing and distrib-uting several hundred SKUs.

nFollowing the severe flood-ing affecting Bangkok, Kerry Lo-gistics has relocated its Express command center from the capi-tal city to the east of Thailand.

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

This command center is also connected to Suvarnabhumi air-port.

The company has also estab-lished distribution centers in Si Racha, Chon Buri, Chacheon-gsao and Rayong on the eastern seaboard and in Korat Province in the northeast of Thailand, unaffected by widespread flood-ing, to assist in the speedy dis-tribution of cargo.

Other business units includ-ing freight forwarding, Kerry Siam Seaport, and the Kerry Asia Road Transport are provid-ing support in managing the flow of urgent shipments into and out of the affected areas of Thailand.

nLawson Inc, Japan’s second-largest convenience store chain, has appointed audit and consul-tancy firm PwC to carry out due diligence on a number of un-listed companies of the Future Group that supply fruit, vegeta-bles and staples for India’s larg-est retailer.

If the deal fructifies, the $25-billion Japanese retailer will invest in a holding com-pany that will control six other companies of the Indian retailer that supplies to formats Big Ba-zaar, Food Bazaar, KB FairPrice and Aadhaar.

The combined businesses of all these entities - both back and front end - are estimated at over 3,000 crore, investment bank-ing officials said.

nThe Future Group has ap-pointed investment banker No-mura Capital to conduct due dil-igence on its behalf. The Indian government does not allow for-eign companies to set up stores selling directly to consumers. But foreign investment is wel-comed in the so-called supply chain as the government is keen on improving sourcing and lo-gistics so that farmers and small manufacturers benefit.

nMovement of food grains from storage-starved Punjab to other states may continue to witness further disruption, with employees of Food Corporation of India extending their work-to-rule agitation till December 20 in protest against non-accep-tance of their demands. Though

central procurement agency FCI is trying hard to get food grain transportation activities on track, about 3 lakh tons of food grain has not been lifted for the past two weeks on account of the employees’ agitation.

Under the work-to-rule agi-tation, employees do not work beyond office hours, as a result of which loading and unload-ing of wheat and rice is affected adversely after working hours. The latest move of the FCI em-ployees assumes significance as Punjab, the food bowl of the country, has been complaining of an acute shortage of space for storing food grains, which could lead to wastage of wheat and rice in the 2011-12 kharif marketing season. Punjab con-tributes 30 percent of the total rice and over 50 percent of total wheat procurement for the cen-tral pool. The Punjab govern-ment has the blamed the Cen-tre for tardy movement of food grain stocks.

Employees met senior offi-cial of FCI on November 15, but their demands were not accept-ed by the management. FCI em-ployees across the country have been demanding fringe ben-efits for third and fourth class employees, new recruitment, overtime and pension schemes. With food grains movement getting hit because of the em-ployees’ agitation, FCI had to fork out a whopping Rs 18-20 lakh as demurrage charges for delayed movement of rail rakes.

nCII Institute of Logistics convened the Logistics Sum-mit 2011. Dr. SB Agnihotri, IAS Director General of shipping, Ministry of Shipping delivered the inaugural address and re-leased the research Publication by KPMG. Prof. Anwarul Hoda, Chair Professor Trade Policy & WTO Research Programme IC-RIER, Mr. Cyrus Guzder, Chair-man & M.D AFL Group, Mr. Radhakrishnan, Chairman, Jawaharlal Nehru Port Trust were the luminaries, who took part in the summit.

Dr. S.B. Agnihotri quoted “to create seamlessness let differ-ent modes and the public sector should take initiative, by setting up of the Logistics Corporation of India, CWC, and Concur SCI “

“Inflation in food prices on urban centers was due to trans-

Bangalore based Vikram Lo-gistics provides a broad range of logistics services including trucking, coastal shipping, cus-toms clearing and handling, and bonded warehousing to custom-ers from a range of companies such as CONCOR, Coca Cola, Reserve Bank of India, Credence Logistics, Pearl Harbour, Ameri-can Power Corporation and Qa-tar Cargo.

nSoftlink, a global technology company focused on logistics and supply chain, was rated by Nasscom as one of India’s top emerging companies. This hon-or recognizes emerging technol-ogy companies with advanced, ground-breaking technologies and solutions for their innova-tion. Softlink was the only lo-gistics technology company to make it to this list.

As a pioneer in technology for the logistics segment, Soft-link successfully leverages its own best-in-class resources, as well as the domain knowledge, innovation and best business practices to render unique busi-ness value to its customers. The portfolio of Softlink includes sophisticated and powerful so-lutions, designed for the global market, that enable companies in logistics and supply chain to meet their complex operational requirements.

Softlink’s has been inno-vating in the field of logistics technology since its inception. Its recent launch Logi-Sys is the only enterprise application es-pecially designed for the sector. Logi-Sys integrates the entire logistics and freight forwarding operations in a single system.

nMarks & Spencer (M&S) is overhauling its supply chain, from distribution centres to stores. The retailer is imple-menting a range of systems from JDA Software, in a bid to improve efficiency and stock level management for its non-food business.

M&S is implementing the Al-location, Demand, Fulfilment and Size Scaling systems from JDA. The company, which op-erates over 1,000 stores in 40 countries, will use the systems to manage the supply of stan-dard goods up to high fashion items.

portation, distribution and storage costs. Logistics costs are thus a major determinant of food prices. The lack of in-frastructure and logistics leads to high demand and poor sup-ply ratio.” Prof. Anwarul Hoda quoted on his inaugural session address.

nLogistics major Aspinwall & Co is foraying into the fast growing market for pharma-ceutical logistics which has an addressable market of $1.5 bil-lion globally. The company has entered into a joint venture with Singapore-based pharma logistics firm Pharma Logistics Singapore Pvt Ltd to address the niche market for clinical trial pharmaceutical shipments.

The JV firm, Aspinwall Phar-ma Logistics India Ltd, will handle shipments for clinical trials in the Indian and select in-ternational markets for a start, before diversifying as and when the requirement arises, the source said. The primary goal of the JV will be to tap new op-portunities to improve supply chain efficiency and enhance the competitiveness of global pharma majors.

nInfrastructure India Plc owned Vikram Logistics Pvt Ltd is acquiring ETA Engineering Pvt Ltd for $14.42 million. The acquisition will also include an ETA subsidiary, Freightstar Pri-vate Limited.

As part of the transaction, Vikram Logistics will acquire all assets and liabilities of Freight-star’s logistics business, includ-ing assuming funded project indebtedness of $14 million. Vikram Logistics will also invest additional equity of up to $24 mn and fully draw or refinance Freightstar’s committed debt fa-cilities. The funds will be used to complete the construction of the two Freightstar container terminals in India.

ETA Engineering operates in India under the brand name ‘Freightstar’. Freightstar was founded by Dubai-based ETA Group and is a logistics service provider with a Category I li-cense from the Indian Railways allowing it to operate container trains. Together with its 11 oper-ating container trains, Freight-star has a pan-India presence.

In BrIef

3November 16—30, 2011 www.logisticsweek.com

4 November 16—30, 2011 www.logisticsweek.com

“GST is set to be the single most important tax reform initiative in India”

What are the main deficien-cies in the current taxation system which the GST will do away with?

The current tax system in India on goods and services is multi-layered leading to a tax cascading under both the Cen-ter as well as State. Though the introduction of CENVAT and State VAT respectively have par-tially removed the cascading burden of “tax on tax” to a cer-tain extent, however, both still have their shortcomings.

The shortcomings of CENVAT lies in the non-inclusion of sev-eral Central taxes in the over-all framework of CENVAT such as additional customs duties, surcharges, etc and therefore to this extent out of the set-off mechanism.

Similarly at the State lev-els VAT there are several taxes which are though in the nature of indirect tax such as luxury tax, entertainment tax, etc. however these are yet not sub-sumed in the VAT.

Further, both the Central and State tax system is not inte-grated and thereby leads to the CENVAT load to continue in the value of the goods to be taxed under State VAT thus leading to a tax on tax or tax cascading.

The introduction of GST will not only subsume all the central and state taxes into a single CGST and SGST but will also integrate the taxes on goods and services and allow a smooth pass through resulting in continuous chain of set-off from the producer’s point until the final consumption.

Will GST necessitate a change in the constitutional division of taxation powers between the Centre and the States?

Presently, under the taxation powers enshrined by the Con-stitution of India, the Center is authorized to levy a tax on ser-vices and goods up to the stage of manufacture; and the States are empowered to charge tax on the sale or purchase of goods. The proposed GST model will be dual in nature where both, the States as well as the Centre will concurrently levy and col-

IntervIew

lect a tax on the supply of goods and services. Therefore there is a need to amend the Constitution to empower the Centre as well as the States to concurrently levy the tax on the same transaction for supply of goods and services.

The 115th Constitutional Amendment Bill 20011 has al-ready been tabled before the Parliament by the Finance Min-ister on March 22, 2011 which will be referred to the Parlia-mentary Standing Committee.

What taxes will come under the gamut of GST? What will be the tax structure?

Ideally all indirect taxes lev-ied by various authorities at the Centre, States and municipal levels should get subsumed un-der the GST.

A single unified rate across all goods and services is the ul-timate aim of GST. However, the Government recognizes that a single rate may not be feasible on the date of introduction and agrees to a phased approach so that the transition to GST is smooth for the tax payer as well as the administration. We be-lieve that the policymakers are therefore likely to adopt a two rate tax structure for goods and services. A lower rate for neces-sary items and goods of basic importance and a standard rate for all other goods. All services will have a single uniform rate.

Will the taxes imposed by the Centre and the States be harmonized, and, if so, how?

Which of the existing Center and State taxes would be sub-sumed into the new tax?

GST will be a dual levy im-posed concurrently by the Centre and the States and will operate on a common base. Pro-posed GST model being dual in nature, the taxes that we expect to get subsumed under GST will be as follows.

Under Central GST (CGST) we expect Central excise duty, ser-vice tax, and additional customs duty (commonly known as CVD) to get subsumed as CGST;

Under State GST (SGST) we expect VAT, Sales tax, entertain-ment tax, entry taxes not in lieu of octroi and other taxes such as luxury tax, to get subsumed as SGST.

Octroi levied at municipal levels is not likely to get sub-sumed under the GST regime.

What will be the administra-tive infrastructure for the col-lection and enforcement of the tax?

GST requires a huge admin-istrative infrastructure so that it can be effectively rolled out across India at the same time. We have no doubt that IT will play a pivotal role in deciding the success of the GST system. Recognizing this fact the Gov-ernment has already set up an Empowered Group on IT for GST for devising the IT strat-egy for GST and monitoring its implementation. This group has recommended setting up of a GST Network (GSTN) for man-aging the IT systems for GST implementation, including the common GST Portal.

The transactional data sub-mitted by the taxpayer will be stored in a common database to which both the Centre and States will have access. The ju-risdiction between the Centre and State administration would be divided amongst the two in a way that the interface for the taxpayer is confined to one tax administration only. The pay-ment of taxes and the report-ing of transactions is also likely to be common with common CGST and SGST forms.

What will be the effect on Oc-troi? What will be the impact of GST on collection of Indi-rect taxes?

Octroi duty is an indirect tax levied by the local municipal bod-ies on goods entering the munici-pal limits and is a major source of income for them. While many States have abolished it, Maha-rashtra is one of the few states yet to completely abolish it. The reason being that Maharashtra itself earns more than Rs 18,000 crore a year from octroi, with Mumbai alone accounting for more than Rs 7,000 crores.

Though the dual GST will subsume various taxes at the Central level as well as the State level however, it does not take into its ambit, the taxes im-posed by local bodies such as Octroi. So octroi will continue.

As regards the impact of GST on collection on indirect taxes, it will increase the tax collections. Given the present design of the GST, the producers and distribu-tors in the supply chain will only be a pass through for GST until the ultimate consumption of the goods or services. There will be little incentive for the produc-ers and distributors to break this chain, which will otherwise result in the tax sticking at that break point. This will significant-ly reduce the informal economy and improve compliance and hence collections.

Further, a single, low and a broad base of tax will further re-sult in an upsurge in revenue col-lections. A study shows that the implementation of GST is expect-ed to provide gains to India’s GDP in the range of 0.9 to 1.7 per cent.

What will be the impact of GST on individuals, compa-nies and the government?

Introduction of GST is set to be the single most important tax reform initiative in India. GST will have a significant im-pact on almost all aspects of businesses operating in the country, including the supply chain, sourcing and distribu-tion decisions, pricing policy, accounting and IT systems and tax compliances.

As far as the individuals are concerned, GST is expected to be a pro poor tax regime where the prices of primary food articles is expected to fall as a result a lesser burden on the pockets of the poor. With the introduction of GST, cascading effects of all indirect taxes will be removed with a continuous chain of set-off from the producer’s point to the retailer’s point until the final consumption. The burden of tax on consumers would therefore fall under GST and that would benefit the consumers.

GST would lead to a rev-enue gain for the government through widening of the dealer base by capturing the value ad-dition in the distributive trade and increased compliance. GST is a more structured and trans-parent form of indirect taxa-tion. It has proven itself in other countries as an efficient and ef-fective method of providing rev-enues that governments need, while encouraging economic growth and efficiency.

What will be the treatment of inter-state services such as lo-gistics and transportation?

Treatment of interstate ser-vices which are mobile in na-ture like the logistics and trans-portation is one of the most crucial elements in the design of the dual GST.

In principle, the tax is to be paid in the jurisdiction where the service is consumed or used, irrespective of the contract, beneficial payment, beneficial interest or the location of the supplier and customer at the time of supply. Where the ser-vice is actually consumed is a matter of fact and not always easy to determine the same.

GST being a destination based tax system; there could be a challenge to determine the place of supply of services espe-cially in the cross border inter-state transactions.

A set of rules is needed to define the jurisdiction in which they would be taxable under the destination principle. We expect the Place of Supply Rules to be issued soon.

Varun Dhawan, VP- Taxation, Blue Dart Express Ltd., makes simple to Pritha Dey the issues with goods and services tax (GST) that have boggled many in the logistics industry.

Varun DhawanVP- Taxation, Blue Dart Express Ltd

5November 16—30, 2011 www.logisticsweek.com

By Bob Ferrari As we transition into the final month of 2011, it is time to re-visit the Supply Chain Matters 2011 Top Ten An-nual Predictions for Global Supply Chains which we out-lined a year ago. This initial posting examines our first two projections for 2011.Prediction One: Business recovery will remain slug-gish, but the second-half of 2011 should provide uptick in product demand and supply chain fulfillment needs.

From a rather optimistic perspective in April 2011, the IMF’s later September World Economic Outlook stat-ed: “The global economy is in a dangerous new phase. Global activity has weakened and become more uneven, confidence has fallen sharply recently, and downside risks are growing.”

Rather than the projection of 4.2 percent growth in global output made earlier in the year, the IMF ad-justed its forecast to 4 percent, which we believe may turn out to be even lower when the actuals are finally determined. Rather than the 2.3 percent growth pro-jected for the United States, the IMF forecast was revised downward by a full percentage point. The IMF goes on to indicate the barrage of shocks that have continued to impact global economies this year, including the devas-tating earthquake and tsunami that occurred in Japan, demand in the U.S. stalling within an environment of political impasse, and the continued financial turbu-lence of the Eurozone economies.

Added shocks come from the ongoing monsoon floods impacting supply chains that originate in Thai-

land and the worsening sovereign debt crisis occurring in Greece, Italy and other Eurozone countries.

Our prediction of some uptick in the second half of 2011 will not come to pass, primarily because of the shocks that continue to impact global economies and supply chains.

Top line revenue growth has come from the emerg-ing economies in Asia, with many manufacturers find-ing that the majority of their revenues originate from these regions. At the same time, the forces of rapid growth of inflation, and stronger policies on the part of governmental regulators to stem inflation growth are ratcheting down earlier growth rates. The good news was that many industries experienced some forms of manufacturing resurgence during the year. The not so good news is that, as predicted, value-chains are being stretched to their widest dimensions.

Finally, we predicted some form of an inventory wave in the second half of 2011. According to the ISM inven-tory index, manufacturing inventory levels grew in April, June, August and September, but October levels were dramatically down. Overall, our prediction of slug-gish and sporadic growth held true. Unforeseen was the amount of shocks that occurred in 2011 and have muted any uptick in the second-half.Prediction Two: The year 2011 will provide more supply chain cost reduction pressures and the challenges may be tough to overcome. This may be a year where supply chains will not be able to deliver aggressive cost reduc-tion objectives.

Many manufacturers and retailers indeed struggled to overcome sharp increases in commodity and com-ponent costs, but price increases seem to have moder-ated within the second-half. Supply chain teams were indeed hard-pressed to deliver significant incremental cost decreases that could impact margins.

The financial headlines throughout the year head-lined higher costs impacting gross margin and profita-bility levels. Many manufacturers and retailers reported cost increases in the range of 5-10 percent, and realized that offsetting input cost increases with compensating reductions in other area of supply chain costs would not achieve profitability goals. Transportation costs also remained high in spite of some moderation in the cost of energy. Many were forced to compensate by raising prices throughout the year, and customers began to reel from these higher prices.

Fortunately, our prediction of cost squeezing im-pacting a broad group of suppliers did not come to pass primarily because of the manufacturing boom experi-enced during the year. The one caveat however is China, Europe and Japan. The other impact was, of course, the unprecedented occurrences of natural disasters, specifi-cally the Japan tsunami and Thailand monsoons, which may yet take a toll on suppliers.

Input commodity increases, consequent offsets and unplanned events did indeed buffer aggressive supply chain cost cutting but the end results as we enter 2012 are fragile supply chain networks.http://bit.ly/fSDTAz

Supply Chain Matters 2011: Annual Predictions Scorecard - Part I Blogs, Journals, Book releases

6 November 16—30, 2011 www.logisticsweek.com

Coupling Businesses, Decoupling Ineffi ciencies

The movement of air cargo in the Indian scenario gets affected on account of multiple factors that contribute to higher lead time in the movement of cargo, increased paper work, delays and other ineffi ciencies. The stake-holders of the cargo community in India - freight forwarders, CHAs, consignors, seaports, air-lines, transporters, amongst oth-ers - have to grapple with many challenges to perform their core job of transporting the cargo, timely, safely and within budget.

Operational HurdlesAlmost all the key stakehold-ers were facing their own set of operational hurdles that converged into the single big challenge of smooth and timely exchange of information across the players and their diverse technology platforms with dif-ferent capabilities:

Consignors: Lack of shipment visibility across the supply chain prompted the consignor to stock larger inventory to minimize stoppages in assembly line pro-

Sumeet NadkarCEO & MD,Kale Logistics Solutions

Kale Logistics Solutions has been at the forefront of developing innovative solutions to offset the issues that crop up for any supply-chain. A case study.

CASe StUDY

duction. For lack of end-to-end automation, even world class ERP systems on part of consign-ors could not be of rescue due to lack of similarly capable interac-tive systems on the part of other stakeholders in the supply chain.

Freight forwarders: Forward-ers’ role on coordinating ship-ment’s entire movement in-volved interaction with several stakeholders, but via manual/semi-automated media, enter-ing the same data in at least 6-7 different systems during the transit of goods which ultimate-ly results in delays, increased costs and errors.

Airlines: Given that most of the forwarders did not have the capability to electronically cre-ate and transmit the shipment data, clients including an Indian private airline and middle-east-ern airline, used to receive en-quiry & booking requests manu-ally which added to its costs, reduced profi tability, impaired planning and delayed transpor-tation. Also, there was no audit trail for future reference. In case of loss of papers, airlines’ failure to reproduce critical documents resulted in penalties. Inappro-priate charges on waybills cause

erroneous Air Way Bill (AWB) in-formation which in turn leads to revenue leakage and redundant data entry. Above all, the compa-ny had to forego market oppor-tunities due to inability to reach the highly fragmented freight forwarding industry in India.

Customs House Agents: Com-panies in this segment, for in-stance, Transline Air Cargo Ser-vices, had to manually handle a lot of documentation related to operations, fi nances and for-warding in addition to commu-nicating through phone/ e-mails that also included communica-tion related to job status. Also, several CHAs’ systems were not able to maintain customer con-tracts/ quotations.

A Universal PlatformTo address these challenges, Kale Logistics in association with Air Cargo Agents Association of India (ACAAI ) and other stake-holders from the air cargo in-dustry developed ‘Universal Plat-form for Logistics and Integrated Freight Transport’ (UPLIFT), a fi rst-ofi ts-kind community wide automation platform for the air cargo industry. The product ad-dressed most of the challenges

faced by the industry stakehold-ers by mutually integrating a va-riety of company types: freight forwarders, CHAs, consignors, consignee airports, seaports, air-lines, transporters, and customs.

Consignors: UPLIFT provided companies here with complete shipment visibility and also ensured seamless interface to directly exchange data between consignors’ systems and UPLIFT, thus, ensuring end-to-end auto-mation across the supply chain.

Freight forwarders: Chal-lenges that originated due to a forwarder’s complex coordina-tion with multiple stakeholders were resolved by providing a single window for interactions with all involved entities like in case of how the interaction takes place now between Links Forwarders and United Ship-ping Services. Forwarders no longer needed to re-enter the data that had been entered by shipper at his end as this data now got automatically updated into the UPLIFT system and was made available to all the constit-uents in the cargo supply chain.

Airlines: UPLIFT enabled elec-tronic receipt of waybill data like Master AWB/House AWB for

airlines. Post UPLIFT implemen-tation, airlines received alerts from custodian / agent regarding Freight Status Update (FSU) mes-sages and GA LAXY (enterprise wide cargo handling system for cargo ground handlers) messag-es. Such electronic communica-tion prevented revenue leakage and redundant data entry. Fur-ther, UPLIFT, staying updated always, helped airlines remain compliant with global initiatives such as e-freight, without which airlines would have to bear the costs in storage / maintenance of physical documents.

Customs House Agents: UP-LIFT resolved the complications of CHAs too as in the case of Sanco Trans Limited & Links Forwarders. These players could now electronically execute mul-timodal air-ocean transactions, resulting into signifi cant cost sav-ing with UPLIFT’s multi-branch feature that can be accessed from anywhere and anytime.

The Benefi tsKale Logistics’s innovation in the form of UPLIFT has practi-cally overhauled the entire sup-ply chain of its clients across industry segments.

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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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tincidunt in felis. Nulla sit amet orci mi. Nam bibendum augue et dolor fringilla sit amet viverra est pharetra. Curabitur eu nulla ri-sus, et consequat diam. Sed varius turpis tempor est consectetur pulvinar. Integer rutrum cursus magna sit amet luctus. Fusce ele-mentum feugiat nibh quis facilisis. Vivamus nulla velit, imperdiet sed vulputate et, consequat non libero. Praesent ut justo metus. Curabitur accumsan, neque viverra dictum pharetra, lorem risus aliquet risus, ac interdum libero enim eget dolor. Donec tristique gravida libero ac bibendum. Nunc arcu dui, rhoncus eu pretium egestas, posuere a lectus. Aliquam erat volutpat. Donec consequat, arcu a pharetra bibendum, diam orci pulvinar elit, at ullamcorpsapien risus, vitae lobortis massa. Proin vel fringilla urna. Fusce aliquet porttitor ultrices. Integer rutrum cursus magna sit amet luctus. Fusce eleaesent ut justo metus. Curabitur accumsan, neque viver-ra dictum pharetra, lorem risus aliquet risus, ac interdum libero enim eget dolor. Donec tristique gravida libero ac bibendum. Inte-ger rutrum cursus magna sit amet luctus. Fusce elementum feugiat nibh quis facilisis. Vivamus nulla velit, imperdiet sed vulputate ac interdum libero enim eget dolor. Donec tristique gravida libero ac bibendum.

Jacob Joseph Puthenparambiljacob@logisticsweek.com

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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7November 16—30, 2011 www.logisticsweek.com

In the GST era, most companies will adopt newer business models and supply chain models, since

warehousing will no longer be taxation driven. Firms will resort to outsourcing their supply chain & logis-tics needs to a 3PL service provider, while keeping their own warehousing infrastructure to minimal lev-els. We are driving a 3PL revolution in India by creat-ing these ultra-modern logistics parks.

Vineet Kanaujia, GM – Marketing, Safexpressat the launch of the largest warehousing facility of central India at Indore.

Achieving greater visibility, velocity, and value re-covery for returned assets are three of the greatest

drivers for a robust reverse logistics network. In certain industries such as high-tech and consumer electronics, where product lifecycles are short and returned prod-ucts must be sent back to market quickly, a co-located solution represents a signifi cant opportunity for value recovery and cost-savings.

Steve Sensing, Vice President and General Manager of

Hi-Tech/Electronics for Ryder Supply Chain Solutions on expanding its reverse logistics capability to include a

co-location solution.

Cashfl ow disruptions and the potential balance sheet risks will be the last thing a corporate trea-

surer wants in the current econ-omic environment. Tra-ditional short-term funding methods can be expensive. Thus, an early adoption of an integrated supply chain fi nancing system is something a corporate should con-sider to optimise their liquidity management.

Sherie Morais, Head of Global Transaction Services Middle East, Royal Bank of Scotland,in an interview with Gulf News on why there is no better way to keep trade fl ows uninterrupted in the current diffi cult economic environ-ment than making the supply chains sustainable through seamless fl ow of liquidity.

We look very carefully at our supply chain and we do a fair amount of sourcing from China and

that part of the world. At the back end, we have to look at safeguarding and how we can make it less risky to do it. At the end of the day I think the onus that’s going to be on risk management and management in general is how can we get a preview of what the future might look like and how will we respond to it.

William J. Montanez, director of risk management at Oak Brook, Ill.-based Ace Hardware Corp. and a member of the board of the Risk & Insurance Manage-

ment Society Inc., on why his company hasn’t been aff ected by the fl oods in Thailand,

though it relies on overseas suppliers.

It would be extremely diffi cult for someone who hasn’t spent signifi cant time managing the sup-

ply chain to have a deep understanding of the sup-ply chain processes and the internal motivations and politics of various customers and suppliers alike. The risk would be a supply chain strategy that lacked co-hesion, recognized critical challenges, and lacked the commitment of suffi cient resources. Often this re-sults in a supply chain strategy that is nothing more than a disparate list of key initiatives.

Ron Stappert, in his blog on the trend in creating C-Level supply chain executives from other parts of the business.

Retailers are waking up to the fact that shopping is changing very rapidly. Some wish that weren’t

true -- they would like to ban smart phones in their stores. But others are embracing it. They have got to get to where consumers are making their decisions.

John Donahoe, Chief Executive of eBay,

on why retailers need to look for new ways to connect to cus-tomers buying smart phones.

India is changing and the beauty of India is that the dichotomy and paradox of opportunities (it pres-

ents)...Now there is opportunity at the top end...premi-umisation is important

Harish Manwani, Chief Operating Offi cer, Unilever

Worldwide IT spending will reach nearly $3.7 trillion in 2011. From this amount, emerging econo-

mies will account for $1.013 tril-lion: Gartner Study

FMCG market in rural India is ex-pected to grow more than tenfold to

$100 billion in the next 15 years.

Straights And Bends

8 November 16—30, 2011 www.logisticsweek.com

Sailing Off The CoastPOrtS 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.

Kochi Port Requests Funding For Viability Gapn The Kochi port trade union signed a memorandum to the Shipping Minister requesting him to sanction `450 crore as a viability gap funding to Ko-chi port. The union pointed out that unaffordable dredging expenditure has led the port to fi nancial crisis and the Gov-ernment must ensure the sur-vival of the port by enabling procurement of necessary equipments like cranes, fork-lifts, reach-stackers and dredg-ers. The unions also demanded the license agreement made by the port with DP World to con-struct ICTT be reviewed and the government must strictly enforce the Cabotage Law for attracting transshipment traf-fi c to ICTT.

JNPT Signs MoU With Venice Port n Jawaharlal Nehru Port Trust (JNPT) entered into a Memo-randum of Understanding with Venice Port Authority (VPA). As per the MoU the parties agreed to enhance co-operation and maritime trade; encourage in-terchange of information in the areas of operations, management and hinterland connections, de-velop special subjects of co-oper-ation in the fi eld of education and training of port operators, ITC systems, traffi c and trade, and enhance bilateral trade relations.

Kandla Port To Handle 100 MMT Capacityn The Shipping Ministry has initiated the upgradation of Kandla port under the public private partnership (PPP). The

work involves construction of additional three berths at an estimated cost of `544 crore. To be completed in next two years, the Kandla Port will be able to handle 100 MMT capacity per annum. The port has plans for road, rail connectivity and stor-age besides augmenting infra-structural facilities like berths and cranes.

Govt To Relax Cabotage Law nThe Union Shipping Secre-tary, K. Mohandas has men-tioned at the Kochi Marine seminar that the Indian Gov-ernment is looking at relaxa-tion of Cabotage Law for all ports in India. In reaction to this, there have been strong protests from the Indian Ship Owners Association against the relaxation of the Cabotage

Law fearing that their business would be badly affected with the entry of foreign ships in In-dian waters. He also mentioned that the ministry is consider-ing fi nancial aid for Cochin Port. But the Port would not get any grant for maintenance of dredging work as maintenance work is expected to be under-taken by ports themselves. SCI Sells Ships For Breakingn Shipping Corporation of India Ltd (SCI) plans to sell 15-17 ships for breaking this fi scal year, all of which are almost 25 years old. SCI runs a fl eet of 82 ships, in-cluding bulk carriers, oil tankers and product and chemical carri-ers. There has been an increase for more effi cient, modern ves-sels in the market and adding to it, charterers do not show inter-

est in ships more than 20 years old. SCI reported a loss of 146.46 crore for the fi rst half of this fi s-cal year

Possible Merger Of Chennai And Ennore Portsn After the Madras High Court directive to move coal and iron ore handling to Ennore from Chennai, the Shipping Minis-try is considering the merger of Ennore port with Chennai port to secure the future of Chennai port’s revenues. Ennore Port Ltd is the only corporatised ma-jor port, and is owned by Chen-nai Port Trust and the Union Government of India. Chennai Port has staff strength of about 8,000, while Ennore Port has 90, this being one of the key pa-rameters affecting profi tability of the ports.

Port Traffi c This FortnightPort of ChennaiThis fortnight’s data for the Chennai port has recorded a drop in the percentage of cargo and container handled by 4.1 percent and 7.4 percent respectively.

Port of CochinIn this fortnight there has been a drastic drop in the percentage of cargo and container handled by the port by 29.6 percent and 6.8 percent respectively.

Port of EnnoreThere has been a steady drop in the percent-age of cargo handled by 16.9 percent

Port of JNPTCompared to last fortnight, there has been a sub-stantial drop in the percentage of container han-dled by 28.3 percent.

Port of MumbaiThere is a signifi cant drop recorded in the per-centage of cargo and container handled this fortnight by 8.3 percent and 15.5 percent re-spectively.

Port of ParadipThere has been a substantial drop in the percent-age of cargo handled by the port by 22.3 percent.

Port of TuticorinCompared to last fortnight, there has been a steady drop in the percentage of cargo handled by 14.7 percent.

Port of MundraThere was a minor drop in the percentage of car-go handled since last fortnight by three percent.

PORT OF CHENNAI

Total cargo handled 1,327,000 T

Total container handled 28,551 TEU

PORT OF ENNORE

Total cargo handled 9,58,614 T

PORT OF JNPT

Total container handled 48,823 TEU

PORT OF TUTICORIN

Total cargo handled 5,78,563 T

PORT OF MUNDRA

Total cargo handled 3,446,239 T

PORT OF MUMBAI

Total cargo handled 3,58,064 T

Total container handled 1,193 TEU

(Data available for thirteen days)

(Data available for ten days)

(Data available for eight days)

(Data available for ten days)

PORT OF COCHIN

Total cargo handled 2,97,126 T

Total container handled 9,207 TEU

*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 eight days)

(Data available for fi ve days)

(Data available for six days)

PORT OF PARADIP

Total cargo handled 1,729,962 T

(Data available for all fi fteen days)

9November 16—30, 2011 www.logisticsweek.com

10 November 16—30, 2011 www.logisticsweek.com

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

INDIA TOPS GLOBAL ROAD FATALTIES LISTn With more than one death and four injuries every minute, India reported the highest number of road fatalities in the world. The government says the prime rea-son is drivers’ fault. During the year 2009, there were around 4.9 lakh road accidents, which resulted in 1,25,660 deaths and injured more than fi ve lakh peo-ple in India.

The offi cial number of deaths increased to 1.3 lakh in 2010.

Road traffi c injuries ranked ninth on a list of leading cause of deaths in 2004, and, at the current rates, it would be the fi fth leading cause of death overtaking diabetes and HIV/AIDS by 2030.

MOTOR VEHICLE (AMEND-MENT) BILL nThe Road Transport and High-ways Ministry is fi nally ready with the draft Motor Vehicle (Amendment) Bill after delaying it for four years.

The new features of the draft bill include graded fi nes for of-fences such as drunk driving. This means that the penalty will be directly proportional to the alcohol content found above the stipulated limit of 30 mg per 100 ml of blood in the driver’s body.

The fi nes for various traffi c of-fences have been enhanced from `500 for a minor offence to a maximum of 20,000 for driving an unregistered vehicle.

One-Track Bind

At present, the fi nes vary be-tween `100 and `5,000.

Besides, in case of death in a road accident, the compensation has been enhanced to `1 lakh from the current `25,000.

CABINET CLEARS 15 HIGH-WAY PROJECTS n Over the next month, the Ministry of Road Transport and Highways will award contracts for 15 national highway projects worth `15,680 crore on a public private partnership (PPP) basis, measuring 1,814 kms.

The Cabinet Committee on Infrastructure (CCI) has ap-proved these projects. Each of these projects are at various stages of bidding and the con-tracts would be awarded over the next month.

Of the 15 projects, 10 will be done by the National High-ways Authority of India (NHAI), two through Rajasthan Public Works Department, and three through Madhya Pradesh Road Development Corporation.

FREE BIDDING FOR EPC PROJECTS n Road Transport and High-way Ministry is considering re-moving the restriction on the number of qualifi ed bidders for engineering, procurement and construction (EPC) projects.

The proposal is being dis-cussed with Planning Commis-sion who are preparing new norms on EPC projects.

The move has been taken af-ter two highway projects in Uttar Pradesh received poor response from private players last month. At the insistence of Planning Commission, National High-ways Authority of India (NHAI) restricted the number of quali-fi ed bidders for two EPC projects, together costing `1,217 crore, to seven in Uttar Pradesh.

However when the applica-tion for pre-qualifi cation were invited, fi rms kept a distance from the projects. While one project received seven applica-tions, the second project got ten applications.

INDIA SIGNS MOU WITH SRI LANKA n India signed a Memorandum of Understanding(MoU) with Sri Lanka to restore the damaged railway lines in Northern Sri Lanka at an estimated cost of 150 million USD.

The MoU was signed by IR-CON, a Government of India Un-dertaking, and, Sri Lanka Rail-ways in Colombo. The stretch to be rebuilt and repaired is 55 km long and is expected to be com-plete by the end of year 2013.

Once the IRCON projects of laying the railway tracks is com-pleted, full connectivity will be restored till Talaimannar in north Sri Lanka.

This would give a big boost to connectivity with India since Nagapattinam is just over 60 miles away.

THE LW CROSSWORD

Across:1. Economic elements applied or used in the performance of activities5. Joint work and communication among people and systems7. Combination of cooperation and competition9. The number of times an ad banner is downloaded and presumably

seen by users12. Function encompassing physical receipt of material, inspection of

incoming shipment, identifi cation and delivery to destination, and, preparation of receiving reports

16. Function that performs tasks for outgoing shipment of parts, components, and products

18. Total of all fully burdened labor costs19. Party that tenders goods for transportation20. Revisions or elimination of economic regulations controlling

transportation21. Performance measurement tool for summary of key performance

indicators

Down:2. A group of companies that work together to jointly produce a

product3. Planned control that limits throughput4. Order management, picking, packaging, and shipping6. A shipment that is handled by a common carrier8. Measure of effi ciency of resource utilization10. An approach to level production throughout the supply chain11. A shelving unit with physical dividers separating the storage

locations13. Practice of moving domestic operations such as manufacturing to

another country14. Allocation of product among customers during periods of short

supply15. A freight term, which indicates that charges are to be paid by the

shipper17. A high-speed, high-capacity transmission channel

*Rates are indicative Source: Trimurti Cargo Movers Pvt. Ltd.

Chief Editor and Publisher: Jacob Joseph Puthenparambiljacob@logisticsweek.comPublishing Director: Jayaram Nairjayaram@logisticsweek.comGroup Editor: Anand Pandeyaanand@logisticsweek.comEditor: Jayashree Mendesjayashree@logisticsweek.comEditorial Executives: Anuja A, Pritha DeyChief Designer: Shivasankaran Pillai

Singapore Bureau: Victor Ngvictor@logisticsweek.comMobile: +65 96553730AD-SALES SINGAPORE: Jimmy Yujimmy@logisticsweek.comAD-SALES: Ashok Chand Thakurashok@logisticsweek.comDinesh Mishradinesh@logisticsweek.comSnehal 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

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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 Limayeadlimaye@gmail.comUK Offi ce: Hamburg Media Limited78 York Street London W1H 1DP, United Kingdom

AnswersResources 5. Collaboration 7. Coopetition 9. Impressions 12. Receiving 16. Shipping 18. Payroll 19. Shipper 20. Deregulation 21. ScorecardDown: 2. Consortium 3. Constraint 4. Fulfi llment 6. Consignment8. Productivity 10. Heijunka 11. Bin 13. Off shoring14. Rationing 15. Prepaid 17. Broadband

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

orIgIn DesTInaTIonsNew Delhi Kolkata Mumbai Chennai Bengaluru

New Delhi — 3,000 2,000 3,900 3,650

Kolkata 1,950 — 2,550 1,900 2,300

Mumbai 2,500 3,800 — 2,500 1,950

Chennai 3,625 3,050 2,125 — 850

Bengaluru 3,050 3,450 1,600 850 —

EclipseCrossword.com

11November 16—30, 2011 www.logisticsweek.com

In For The Long Haul

ColdStar is one of the most recent ventures by Tuscan Ventures. What actuated the need for Tuscan Ventures to partake in the logistics of temperature-sensitive perish-able goods?

Tuscan Ventures formed in 2007 is a logistics focused invest-ment firm. Tuscan is focused on making private equity place-ments in suitable investment opportunities as well as devel-oping and operating greenfield projects. Our philosophy is to invest across the logistics value chain. The Cold Chain Industry has been in Tuscan’s focus area from the time the firm started.

The economics of the space were always compelling with the cold chain industry and is estimated to grow at a healthy two digit CAGR over the next five years. The total cold chain market in India is estimated at $475 million.

In mid-2009, when Tuscan Ventures was looking to invest in the cold-chain space that it could scale up, there was one glitch: there weren’t companies with the scale and the manage-ment depth to deliver the vision that Tuscan had for the space. So Tuscan did the next best thing; around 11 months ago it launched its own Cold Chain Company – ColdStar Logistics.

In less than 11 months, Cold-Star has grown to cater to 25+ cities with offices in seven ma-jor locations. ColdStar operates its own refrigerated vehicles and offers logistics services to temperature-controlled goods.

Describe the prevailing cold supply chain and logistics solutions provided in India? Where does ColdStar position itself in the market?

Cold Chain in various forms has been prevalent in the country for over a decade now. From the nascent technology and services where temperature abuses was the norm for products carried. We have now reached a situation where the client is demanding quality services. There are over a 100+ cold chain focused trans-porters, over 100+ cold chain storages across the length and breadth of the country.

IntervIew

This is a clear reflection of the growth of demand. India’s consumption of processed foods is only growing. ColdStar’s fo-cus is to provide a truly end-to-end seamless service for this growing demand.

To achieve this vision, Cold-Star is investing heavily in quali-ty assets, technology, personnel which are essential in offering its clients the highest quality of service which is what sets Cold-Star aside from the rest of the industry. ColdStar is being po-sitioned as a temperature con-trolled logistics partner with a national reach.

What are the services Cold-Star provides?

ColdStar provides the fol-lowing services: Point to Point Transport of Chiller & Frozen goods (Primary/ Secondary & City Distribution undertaken); Storage/ Distribution solutions across major consumption points in the country; Supply Chain optimization of clients existing supply chain; and Ser-vices can be extended overseas for specific client requirements.

Tell us briefly about the tech-nology (latest if any) used by ColdStar to preserve perishables over long distance haul?

ColdStar Logistics differenti-ates itself from existing players by investing and deploying as-sets. Our containers are special-ized food grade units, which we have imported from Kuwait & Germany. We pride ourselves in these boxes, because they are lighter and have world-class quality insulation; we are able

to carry more cargo on lower configuration trucks. Better in-sulation leads to lower use of the reefer unit, which in turn reduces fuel consumption. The aim being to reduce the unit cost for the client.

GPS Tracking/ online temper-ature is standard issue in all our vehicles. Transparent reporting of vehicle position/ temperature to our clients affords them to plan their supply chain better.

ColdStar also prides itself on an efficient delivery model, using asset optimization strate-gies, therefore allowing for on-time delivery and better service to our clients.

Is there any difference in handling pharmaceutical prod-ucts from consumables like fruits and vegetables? Briefly tell us on how you prioritize and handle individual products?

Unlike dry cargo, every prod-uct, which is handled in the temperature sensitive segment, has its unique handling require-ment. Through the course of our operations ColdStar has transported/ handled cargo as diverse as imaging plates, chem-icals, processed food, fresh veg-etables, pharmaceuticals, dairy products, to confectionary.

The ColdStar approach to handling these varied products is to ensure that our fleet does not carry products which clash i.e. prior carrying pharmaceu-tical cargo the containers are chemical washed and dried. After every 4th load the con-tainers are inspected a pre trip inspection is carried out. This ensures that the containers/ve-hicles are cargo worthy.

One of the major aspects that ColdStar ensures is the pre-qual-ification and re-qualification of our vehicle containers. This is done at our end every six months and can be requested to be re-validated on a customer’s request. These quality checks ensure that ColdStar can service any type of cargo.

How does ColdStar allow cus-tomers to explore new markets?

One of the biggest sources of information to customers is their logistics provider. ColdStar is always in the best position to

gauge demand and supply of products to various geographies in the country.

One of the services that we provide very select customers is ground level information on the demand of their products vis-à-vis. Competition and existing market conditions of new mar-kets that they intend to enter. We have tested this out repeat-edly and offer this service as an add-on to our existing services to the client.

ColdStar also has the assets to provide complete solutions to its clients; this allows the client to reconsider their expansion strategies into new cities using the ColdStar network.

ColdStar fleet is expanding. What is the capacity ColdStar fleet handles?

ColdStar started operations in December 2010 with three owned vehicles and has by De-cember reached a fleet size of 70+ vehicles. The roadmap for expansion will lead ColdStar to reach a fleet size of 130+ refrig-erated vehicles by end of this financial year.

ColdStar offers both primary (long haul distribution) & sec-ondary distribution whereby our asset mix varies from small vehi-cles of 0.5Tons to our larger vehi-cles, which can carry 14.0T. From a tonnage perspective ColdStar’s monthly capacity would be in ex-cess of 3,000 MT and growing.

Apart from addressing trans-portation and warehousing needs for temperature sensi-tive goods, what are the other areas ColdStar is looking at in this sector?

ColdStar in addition to build-ing out its own trucking fleet is also building its own storage network across India. Its first storages come online by middle of 2012 in Bangalore, Mumbai and New Delhi.

In addition to transactional services being offered to clients, we offer clients knowledge-based logistics solutions to best optimize their supply chain. In this model ColdStar acts as a logistics partner/consultant and leverages its teams experience and knowledge of the product/

local conditions and not only proposes solutions but uses its network/assets to deliver on the way forward.

Indian supply chain is at pres-ent managed by largely frag-mented and unorganized sec-tor. So where does ColdStar see itself in the near future?

The Indian supply chain en-vironment has always seen frag-mented players offering very specific services/coverage to clients. ColdStar is positioning itself as a truly national player on the back of its own network and assets thereby reducing the number of agencies in the sup-ply chain reducing transaction/ operational costs.

Through these means Cold-Star aims to be the one stop solu-tion for Cold Chain in India. The client should be able to bring their cargo to ColdStar and not have to worry about any inter-mediate operations till it reaches the retail stage/ end consumer.

The vision for ColdStar is to offer its clients a second to none national network/services for car-go which requires temperature controlled logistics solutions. ColdStar over the course of the coming year will add additional assets and services, which will de-liver to these promises and be the largest provider in India.

Any final words?ColdStar has the belief and

the drive to deliver to its clients a truly unique solution. Our ap-proach has been to build the necessary network and cover-age, which is second to none.

With the growing Indian economy and the increasingly disposable income amongst the Indian population, there is a demand for more hygienic processed food and unstapled perishables. Along with the growth of organized retail in India, ColdStar will help create a process in the supply chain to allow for better handling of pro-cessed food, reduce the wastage of fresh produce, and increase export revenue in the country.

ColdStar through its service-oriented approach lives its values of Integrity, Professionalism, Reli-ability and Responsiveness.

Ms. Shagun Kapur Gogia, Director/ Founder of Tuscan Ventures, has chalked out grand plans for the cold chain industry in India. In an interview with Anuja Abraham, Ms. Gogia enumer-ates a few ideas that will change the way cold chain business is done.

Shagun Kapur GogiaDirector/ Founder of Tuscan Ventures

12 November 16—30, 2011 www.logisticsweek.com

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Venue: Bangalore International Exhibition Centre, Bangalore Date of Exhibition: 6—9 December 2011

Hannover Milano Fairs India has a new show in its repertoire this year, reports Pamela Cheema

Hannover Messe Returns To Bangalore

Concurrent trade fairs based on the concept of HANNO-VER MESSE, the world’s

leading industrial trade fair, re-turns to Bangalore from December 6-9 , 2011. This is the fifth edition of the event comprising CeMAT IN-DIA—Materials Handling and In-tralogistics; MDA INDIA—Motion Drive and Automation, Industrial Automation INDIA; Surface India and the new entrant, Laser India. Sticking to its trend of introducing a new show every year for the ben-efit of industry, it has announced a new show LASER INDIA for Laser Systems and Laser Technology for Manufacturing, along with its four established shows.

With more than 300 exhibitors from 20 countries—and big players like Voltas, TVH, Gear India, Exide, ACE, PARI, Hercules Hoist, Rotomag, Bosch Rexroth, Festo, Sparage, Elecon, SKF, Schaeffler, ContiTec, Freudenberg Sim-rit, Beckhoff, Omron, Kuebler, Roots , Laserline, Miyachi, LASAG, among others showcasing the latest innovations—it will offer industry professionals a unique opportunity to ex-perience new technology in diverse industrial sectors.

Mr Wolfgang Pech, Senior Vice President, Deutsche Messe AG, Germany states that “I am delighted to note we have an ideal B2B platform in Bangalore, one of the fastest growing global cities today. The five shows complementing each oth-er and showcasing a wide range of products and services will be a unique opportunity for user industries to gain insight into new technologies as well as meet suppliers.”

Sudhir Patil, Managing Director, Hannover Milano Fairs India (HMFI), believes that “The joint presentation of these five fairs has a major advantage for exhibitors and visitors. Exhibitors can find their potential customers among the participants of other shows taking place under the same roof. On the other hand, the visitors have an opportunity to see integrated technologies in a single visit. This synergy effect is a well-proven concept at the world-renowned Han-nover Messe”.

Information-packed technology seminars which will co-incide with the shows include a seminar on ‘Logistics Next: Exploring New Frontiers of Technology in Logistics’ by Log. India magazine, a seminar on how ‘Automation Technology Empowers Manufacturing Excellence’ by the ARC Advisory Group, an ‘International Seminar on Advancements in Mo-bile Hydraulics’ by Fluid Power Society of India, a seminar on the ‘Role of Lasers in Manufacturing’ by the Indian Laser Association and Laser Technologies Pvt. Ltd, an ‘Internation-al Symposium on Surface Protective Coatings’ and the ‘Indo-German Conference on Surface Engineering’ by the Society for Surface Protection Coating (SSPC).

When queried on why the shows are again moving to Ban-galore, Wolfgang Pech said, “We always had plans of alter-nating the shows between Mumbai and Bangalore. Bangalore certainly has one of the country’s best venues to hold large events. In the meanwhile, the connectivity of the fairground has improved considerably, making it easily accessible.”

CEMAT IndiaThe requirement for material handling, transportation and warehousing is growing at a robust pace and is driving the demand for integrated logistics solutions. With booming

CeMAT 2011

The fifth edition of CeMAT INDIA, the international trade fair for Materials Handling, Storage Systems and Logistic Services, is once again taking place in Bangalore from December 6-9, 2011. CeMAT INDIA is now a well-known event for the MHE industry and is being held in Bangalore after an interval of two years. The event will be welcomed by a host of user industries, especially from southern and western India. We are, therefore, expecting a sizable visitor turnout this year. A seminar on “Logistics Next: Exploring New Frontiers of Technology in Logistics” organized by Log.india magazine and Hannover Milano Fairs, India, highlighting modern technology concepts emerging in the field of logistics, will be a great value addition for exhibitors as well as visitors.

The concept of holding industry specific multiple trade shows, based on the world-renowned Hannover Messe, is now well established in India. This year CeMAT INDIA will be accompanied by MDA INDIA for Motion Drive and Automation, INDUSTRIAL AUTOMATION INDIA for Process and Production Automation and Industrial Building Automation, SURFACE INDIA for Surface Protection Technology and the newly launched topic, LASER INDIA for Laser Systems and Laser Technology for Manufacturing. The shows have attracted 300 exhibitors from over 20 countries.

It gives me pleasure to extend a very warm welcome to all exhibitors, visitors, supporting associations from around the world and the media to the event.

Sudhir PatilManaging Director, Hannover Milano Fairs India Private Ltd

Welcome Note

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Why does Hannover Milano Fairs nor-mally have four or five shows running concurrently? Is this a model followed elsewhere in the world?Holding concurrent trade fair on the interrelated topics is a concept based on the world-renowned ‘Hannover Messe’, the 65 years old flagship event of Deutsche Messe, Germany. Hannover Messe comprises 14 different specialized concurrent shows. The concurrent shows result into a great deal of synergy for visitors as well as exhibitors. Visitors can see diverse technologies in a single visit and can find and integrated solutions for their needs. Exhibitors also get exposure to much larger number of visitor groups who represent different industries. Our shows are purely B2B shows. Therefore exhibitors have the possibilities of finding their new customers amongst the exhibitors in other shows at the same venue. This is unique synergy that emerges out of concurrent shows to the advantage of exhibitors as well as visitors . When Deutsche Messe decided to launch its shows internationally, to begin with in China over a decade ago, the same model was followed. Now Deutsche Messe has successfully implemented shows on this principle in China, Turkey, India and Russia.

What has been the response of Indian industry to these shows in the last five years?The concurrent shows in India have been well received by exhibitors and visitors. The shows attract over 300 companies from 20 countries and over 10,000 visitors from diverse user industries. The visitors represent diverse industries such as automotive, machine tools, capital goods, manufacturing, food processing, packaging, logistics, warehousing, PSUs and services.

Why has the show moved to Bangalore and do you plan to return to Mumbai next year?India is geographically very large market. Rotating the shows to different cities allows the exhibitors to reach out to the customers from different markets every year.Depending on the preference

Integrated Solutions

of the exhibitors to be revealed in survey the show can be held in Mumbai next year.

The logistics sector is now a sunrise industry in India. How has CeMAT India aided the growth of this industry?Trade fair plays a pivotal role in development of the concerned industry and CeMAT INDIA is no exception. CeMAT INDIA is a platform for the logistics sector that brings together leading players in the industry, domestic as well as international facilitating close and healthy interaction on competition, new technology, global trends, policy issues, challenges and many other aspects. Such intense interaction promotes the growth of the industry further. The exhibitors also get an opportunity to meet customers face-to-face and understands their needs better so that the product development can take place along those lines. The seminars and conferences during the show bring the industry leaders and experts together that creates synergy for the growth of the industry. Thus CeMAT INDIA has been naturally playing its inherent role in development of logistics sector in India.

To what extent will the LASER INDIA show help Indian industry?Are laser systems and technolo-gies vastly used in India?Laser technology is being adopted in diverse manufacturing industries in India in a big way. In metal cutting, diamond cutting, solar industry, surface treatment, welding, printing and marking, and in several other high precision applications. LASER INDIA will provide a platform for projecting these technologies to the user industries. The seminars featuring international speakers will discuss the new trends and technologies which would be of immense importance for the industries in India.

What was the response to CeMAT Russia?CeMAT RUSSIA has already completed two editions in 2010 and 2011 and has been received very well in Russian industry. The show was held in Moscow concurrently with specialised shows for key sectors such as intralogistics, power transmission and control technology, industrial automation and surface treatment technology featuring more than 270 exhibitors from 20 countries.

Sudhir PatilManaging Director, Hannover Milano Fairs India Private Ltd

November 1—15, 2011 www.logisticsweek.com14

retail and widespread supply chain networks, suppliers of material handling equipments, logistics and warehousing serv-

ices and technology developers will find CeMAT INDIA an ideal platform for presenting their products and services.

Laser IndiaLaser technology is being used increasingly by many key sec-tors like automobile, aerospace,

defence, solar, diamond cutting and industrial manufacturing. It will will show-case the latest trends and tech-nologies in laser and optronics, solid - state lasers, gas lasers,fibre lasers, laser sys-tems and compo-nents as well as services.

MDA IndiaMotion, drive and automation

technology is significant as it is all about running plant and machinery efficiently. Organ-ised jointly with Fluid Power Society of India (FPSI) the show will also feature a CEO conclave of the f luid power industry.

Industrial Automation India Automation is the key to suc-cess in every industry. Industri-al Automation India, featuring production automation as well as process automation, will be a B2B show for automation tech-nology providers to showcase their latest products and serv-ices to decision makers from diverse sectors attending the show.

Surface IndiaSurface India is a platform for all the segments of the indus-trial surface treatment market. The Society for Surface Protec-tive Coatings, India (SSPC), is the supporting organisation for Surface India.

The shows enjoy the official support of several internation-al organizations like the VDMA (German Machinery Manu-facturers Association), China Federation of Logistics and Pur-chasing, ARC Advisory Group, the Indo-German Chamber of Commerce, ASSOFLUID Italy and many more.

HANNOVER MESSE with its unique concept of industrial fairs is expected to provide visitors with a holistic view of industry.

In an candid interview, Sudhir Patil, Managing Director, Hannover Milano Fairs India Private Ltd, believes that CeMAT India has aided the rising Indian logistics industry. Pamela Cheema reports.

15November 16—30, 2011 www.logisticsweek.com

The development of JadeWeserPort Wilhelmshaven will give Germany unfettered access to the world market, reports Ruediger Beckmann

Germany’s Access To World Market

The development of the container deep water port, JadeWeserPort

Wilhelmshaven, is one of the most significant German infra-structure projects in the last 50 years. With the initial op-eration of the JadeWeserPort in August 2012, almost one billion euros will be invested to secure this access to the world market for Germany s export driven economy. This national deep water port will be able to han-dle mega carriers of all future generations, like 18k TEU and more, at any time.

JadeWeserPort is an eastern deep water port in the Euro-pean North Range, between Antwerp and Hamburg, and will play a beneficial role along with other German ports. Ac-cording to its strategic location, its nautical advantages and its logistics efficiency due to its excellent connections with the

JAdeWeseRPoRT WilHelMsHAven:

hinterland, JadeWeserPort will not only become a definite des-tination for giant container ves-sels on the Asia-Europe routes, but also for short sea and feeder traffic to Scandinavia and the Baltic Sea.

Nautical AdvantagesThe nautical advantages of the container deep water port are striking: A tide independent water depth of 18 meters and the shortest channel naviga-tion of all German ports. Four mega carriers plus feeders will be able to call simultaneously at the 1.7 km long quay and 16 of the world’s largest container gantries will be able to serve vessels of 25 container rows. The Common User Terminal at JadeWeserPort will be able to handle an annual throughput of up to 2.7 million TEU. The port operator of the container terminal is Eurogate, Europe’s

leading container terminal and logistics group, which has nine other terminal locations along the North Sea and the Mediterranean Sea, with an annual turnover of 12.6 mil-lion standard containers (TEU) in 2010.

A Logistics ZoneA distinct characteristic of the quality of JadeWeserPort is its Logistics Zone, developed and operated as a Freight Village on 160 hectares, directly adjacent to the container terminal. The tri-modal connection of the Freight Village comes— apart from the port itself—with a powerful train connection with a six-track intermodal termi-nal and a 16-track marshalling yard, allowing high capacity access to the German railway network.

With regard to truck opera-tions, the demand for a reliable

and fast connection to German highways has been achieved by a direct access to Autobahn A29, which ends directly at the gates of the terminal. The inner structure of the Freight Village will provide plots of up to 20 hectares for all kinds of logistics companies. This will be accomplished by an office center for service providers and a truck-service-center. Short distances for customs and the veterinarian are also manda-tory for efficiency.

This maritime logistics-clus-ter of international impact and dimension provides a unique infrastructure to all custom-ers and users, with an efficient network of connections to road, rail and short sea traffic. Setting up a company at the Freight Village means a proc-ess-oriented approach, accord-ing to the master plan. Thus, individual desires for locations

next to the container terminal or the truck-service-center can be considered. As a result, a typical branch mix of port re-lated services, shippers, steve-doring companies, forwarding agencies and other logisticians has been achieved. Due to the actual status of planning, re-quests for distinct plots of land, location and size may still be taken into account. Even a rail connection is possible and can be considered.

If demand increases, the Freight Village could be ex-tended in the medium term by another 400 hectares and even the port itself can easily extend its quay wall and double its ca-pacity, thus securing the future of Germany’s one and only con-tainer deep water port.

More information about the project can be found on www.jadeweser-port.de

16 November 16—30, 2011 www.logisticsweek.com

Organizations need to improve to survive in these frenetic times and Pooja Dayal recommends observing benchmarking practices for growth

seeking The Best!

In business, as in life, im-provement knows no lim-its. Something that was the

very best today, may cease to remain so the very next day. Every individual, team or or-ganization has to redefine its practices and approach to con-tinue to survive, sustain and eventually, grow. To be the best-in-class, we need to first identify the best-in-class, ob-serve their methodologies, if possible, imbibe them and rep-licate their success. To be pre-cise, we need to ‘benchmark’ ourselves.

Benchmarking as a tool is fast gaining wide significance to create a competitive edge by excelling in the chosen field of endeavour. Identifying and scientifically adopting the best practices have known to reap rich dividends.

Supply chain and its associ-ated activities are a few of the recent spheres in which these practices have been adopted. Recent times have seen a lot of research and thought proc-esses being put forth by sup-ply chain planners in adopt-ing ideal methodologies for warehousing practices. In the absence of proper man-agement, the vast expanse of storage space which plays a critical role in the distri-bution channel may at times spin off uncontrollably on the cost front, thus squeezing the bottom line. Traditional per-formance measurement tech-niques may help warehouses to achieve their best, but may also significantly fall short of delivering best-in-class per-formance.

Best-in-class MetricsDIESL (Drive India Enterprise Solutions Limited) has been in the forefront in ensuring excellence in the field of stor-age and material handling through CALIPER© which de-livers a benchmark quality of service to its customers. To be profitable, warehouses must be run at optimum capac-ity in every possible aspect. This can be achieved firstly, by internal benchmarking by conveying the metrics of the best performing warehouse to other warehouses and sec-ondly, by including industry metrics in the guiding proce-dures itself. This exercise not only conveys the expected best-in-class metrics, but also puts proper processes in place and in turn, derives the best possible performance from warehouses.

As far as warehousing is concerned, the minutest stor-age and material handling processes must be examined in great detail. Every process has an associated set of guide-lines, which are devised in such a manner that a rigorous follow-up of these procedures automatically ensures high performance. As far as the op-erational process is concerned, any warehousing procedure broadly consists of the follow-ing activities:

Receipt/Inward: Goods are re-ceived at the warehouse.Put-away and storage: Areas are allocated to stock goods in the warehouse.Inventory control: Accuracy is ensured in terms of the number

of goods in the warehouse.Issue/Dispatch: Goods are sent from the warehouse to the intended locations.

Traditional performance measurement systems have focused purely on operational or transactional parameters in gauging a warehouse’s per-formance. But measurement

systems must also include those parameters which may not directly impact opera-tions, but which indirectly impact overall warehouse

Benchmarking as a tool is fast gaining wide significance to create a competitive edge by excelling in the chosen field of endeavour.

performance. These include statutory parameters, legal obligations, workforce param-eters, number of process im-provement projects, resource

Table 1: Example Of Benchmarking Parameters And Their SpecificationsParameters SpecificationsWarehouse set up Warehouse layout is present near entrance area and depicts emergency exits, fire

extinguisher locations, and other important areas.

Proper signage and demarcation is visible in the warehouse.

Warehouse ensures electrical fittings and sockets are in proper condition.

Sufficient UPS back up is available in warehouse for all systems.

Warehouse maintenance and security

Pest control is done at predetermined frequency for the warehouse as well as wooden pallets.

All the assets in the warehouse are codified as per SAP/SOP.

The secutiry frisks all persons going in and coming out of a warehouse using a metal detector.

Warehouse practices All the material received at the warehouse is kept on wooden pallets as per the stacking norms.

Proper Bin cards are maintained for all SKUs including non-inventory items.Sour

ce: A

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Table 2: Example Of Benchmarking Parameters And Their SpecificationsParameters Specifications

Receipt Goods receipt checklist is filled for all incoming consignments.

Shortage/damage during receipt is informed to the concerned on the same day.

Storage Goods invoiced are not kept in the warehouse for more than the cut-off time.

Stacking of individual SKUs is done separately for proper identification.

There is space allotted for storing empty cartons used for repacking.

Dispatch The transporter logbook in SAP is maintained and updated with respect to all the dispatched goods.

Partial billing with the transporter is done only with the ap-proval of HOD finance and HOD distribution.

Record man-agement

The warehouse space utilization sheet is sent to the customer at predetermined frequency.

The month-end reconciliation report is sent before the first week of every month to the customer and corporate office.

Sour

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17November 16—30, 2011 www.logisticsweek.com

usage parameters, supplier ob-ligations, risk mitigation and safety parameters, to name just a few.

Source: Author

Table 3: Example Of Benchmarking Parameters And Their SpecificationsParameters Specifications

Cycle count/reconciliation There is a cycle count process conducted on all working days as per a cycle count plan approved by state supply chain head.

Warehouse verifies the cycle count sheets and SAP plus book v/s physical verification report which is signed by supply chain and finance representatives.

Record maintenance All files containing records are serially numbered and stored properly for easy retrieval.

Data backup is taken on file server with important files uploaded on the server at the end of every day.

Statutory compliance Warehouse registration to be done within certain days of commencement of work and renewal on expiry to be done before cut-off.

All necessary certificates to be displayed in warehouse (LST, CST & Service Tax Certifi-cate, additional place of business etc.).

Service provider and staff The payment to service provider is made within certain days of receipt of invoice or as per payment terms.

Internal and external trainings on procedures and systems are conducted at least once in a quarter or as required from time to time.

Customer Management Customer satisfaction score as set forth by the organization.

Customer queries to be attended to within certain hours of receipt.

State SCM head to conduct customer meets at pre-determined frequencies.

Service Provider Manage-ment

Review meeting takes place between corporate and service provider at pre-determined frequency.

Supplier satisfaction rating as set forth by the organization.

Basic Performance ParametersThe three broad sections which comprise of different perform-ance parameters are Founda-tions which ensure a strong base, Operations which stream-line core activities and Essentials which focus on bare necessities.

Foundations: This section deals with areas concerning the working environment, safety compliances, asset man-agement and risk management. The table below lists bench-marking parameters and the various specifications which meet them.

Operations: This section deals with the core warehous-ing activities of receipt, stor-age, stock count, dispatch and record maintenance.

Essentials: This section deals with the fulfillment of statutory obligations, employee

Benchmarking practices are a continuous process and will help organizations to maintain their competitive edge.

Photo: Ramlath Kavil

Table 4: Example Of Benchmarking Parameters And Their SpecificationsParameters Specifications

Process Inventory accuracy is maintained.

Percentage space utilization is ensured at maximum.

Average dock-to-stock time to be less than certain cut-off.

Vehicle clearance for outward to be within stipulated time.

Documents and Compli-ance

Average time to retrieve any data to be less than stipulated time.

Average working time of warehouse to not exceed cut-offs.

Workforce Attrition rate to not go beyond set targets.

Accident rate in warehouse to be nil.

Growth Warehouse profitability to be maximized.

Warehouse to cover at least certain portion of all pin codes that can be catered.

Pollution Control

Vehicles used for transportation not older than four years.

PUC certificate is maintained for all vehicles used.

Carbon footprint is mapped and targets for reduction on periodic basis are set.

Energy Conser-vation

LEDs are used in place of conventional lighting systems.

Adoption of Bio diesel for use in warehouse generators.

Natural ventilation is incorporated in warehouse design.

Environmental Growth

A select number of trees are planted on a periodic basis.

Water conservation initiatives are implemented in all the warehouses.

welfare, expense controls, serv-ice level agreements (SLA) ad-herence for customer and sup-plier satisfaction etc.

As depicted in the specifica-tions above, benchmarks have been created by defining either a process methodology or a val-ue associated with a quantifi-able performance metric.

Sharpening Perform-ance EdgesThe field of supply chain is highly volatile as far as process improvements are concerned with new methodologies being virtually adopted on a daily basis, changing the way the industry operates. This has re-sulted in the need for continu-ously bringing various other performance parameters with-in the gamut of measurement and control. Apart from this, the bar of benchmark metrics for the existing parameters is raised as better means of fa-cilitating the processes that are adopted by the industry.

The table below shows a se-lect set of focus areas and the associated checks put across for best-in-class outcomes.

These benchmarking practic-es are a continuous process and will help organizations to main-tain their competitive edge and deliver best-in-class services to their customers. New approach-es are expected to be devised while old ones get modified or shelved altogether to best suit the business needs of the com-pany. Benchmarking practices help companies to constantly evolve and attain the goals they have set in the hugely competi-tive world of business.

About the Author: Pooja Dayal is Head, Business Excellence Function of DIESL

Source: Author

18 November 16—30, 2011 www.logisticsweek.com

An organization is built by its people and the warehousing industry must factor it into its growth plans, emphasizes Bhairavi Jani

Hiring And Managing People

People are the ‘start-up capital’ and the ‘return-on-investment’ of any

business, especially those busi-nesses that are in the service sector. Warehousing is about making infrastructure, tech-nology, processes and people work in complete synchroniza-tion to deliver output.

What is different about hir-ing, managing and retaining a talent pool in a warehousing business as compared to other service sectors, or even manu-facturing sector companies?

First and foremost, ware-housing has unique people needs. There is the need to have a well-trained execution team at the floor level that is engaged in physical work. There is also the requirement of a manage-ment team with analytical capabilities that can drive the

business and processes through MBOs and MIS, and last, but not the least, there is also the need of a large contracted per-sonnel pool for value added or infrequent activities. Unlike an IT company where most people have some kind of engineering background, or a manufactur-ing plant where most people will be on-the-floor staff, ware-housing needs all its diverse pools of people to work closely with each other, on a day- to-day basis and also deliver seam-less output. People, therefore, are the most essential prerequi-site in the delivery of warehous-ing services.

Need For People Strat-egiesMany companies in the ware-housing sphere have strategies which comprise of expanding

networks, introducing new technology, upgrading infra-structure, but very few have a people-strategy in place. What is a people strategy? It is a plan devised carefully by a company to build its human resource ca-pacity, in terms of quantity and quality, to ascend the growth curve that it so desires. Most warehousing players are not mindful of the fact that people planning is not an overnight process, and it takes weeks and sometimes, even months, to get human resources in order.

Mapping of human capital needs with available supply too is critical. There is a lack of un-derstanding today on what is the source of supply, how can it be accessed and also, how it can be enriched. The lack of stand-ard qualifications for skills such as packing, picking, loading,

etc. intensifies the problem of matching the potential of candi-dates to the job deliverables.

Setting StandardsEvery organization is unique and has its own specific needs, but there are some standards everyone could follow when it comes to people management. If one is not sure of what one is searching for, then the chances are that the search will be fu-tile. Therefore, it is important to have detailed job descrip-tions, with capability, educa-tion, experience, reporting re-lationships, physical well-being, ethical conduct, exact nature of activity and most importantly, a career path outlined. And this must be done across the gamut for the most junior as well as the highest position in the compa-ny. Even at the warehouse floor

level, a Picking Executive must have this level of clarity about his job profile before he applies and gets selected for the job.

We live in a country where most people take up jobs to make two ends meet and not necessarily, to advance a career. This is especially true of people who work in the warehousing sector. Hence, the challenge is to convert the basic need for a job and survival into an as-pirational need for a career. This must be done for all the different categories of people working in a warehouse. The exciting journey of a Loader, who could not operate a compu-ter, advancing to the position of a Floor Supervisor who files activity MIS daily through the warehouse management sys-tem is a glorious one. Imparting skills is the single most impor-

19November 16—30, 2011 www.logisticsweek.com

tant thing a warehousing com-pany can do. The people must be trained to deliver the expec-tations of the organization and that of the customer.

The quality of skills deployed is also critical. Organizations must introspect on the motiva-tion behind training programs they conduct internally. There needs to be a seamless connec-tion between the training goals of a company and long-term plans. The strategic importance of having skilled staff who are completely integrated into the company’s future plans is im-perative.

Training BenchmarksEven more critical is the con-tent. Who is being trained? And for what? What are the global benchmarks for these skills? These are all questions the functional and human re-source teams must answer. There should be a collaborative and constantly engaging model of skills deployment. In a sec-tor like warehousing, where the educational qualifications of people in a company can vary from 10th standard fail to Masters degrees, it is impor-tant that training programs do not skew towards one section of employees. A fine balance should be achieved between ground training and concep-tual enhancement.

Ordinary people can deliver extraordinary results, if given direction and a broad frame-work. Companies tend to over-look the need of process- based role allocation. In warehousing, the need for such a framework is mission critical. The activi-ties and their outputs are in-terlinked and therefore, people have to be given the clarity of not just what they are to deliver, but also how that relates to the entire process and its outcomes. The process framework for most companies is only a simple proc-ess flow, with huge ambiguity at each task level in terms of ownership and accountability of individuals. There are many methodologies available for companies to adopt and may be one model may not fit all, but the fact that it is needed cannot be overlooked.

When a company expects the best output from its people, it must also create a physical and emotional environment that is best in the business. Most warehouses in India do not have proper sanitation, ventilation and even a good working environment. If the at-

mosphere at work is dismal in terms of facilities or even dig-nity of labour, then how can we expect people to deliver their best? If the warehouse has no canteen where its staff can have their meals, then people will fall ill. If the warehouse has no proper ventilation, then people will be constantly tired and less efficient. Many people in the industry mistakenly dismiss these as ‘fringe’ benefits, but in fact, they are essentials of any job environment. Companies must commit themselves to creating an environment that is conducive to quality output.

Safety of people is also a key factor in hiring and retain-ing talent. Warehousing jobs involve operating machines, packing loads and thus there is room for injury and accident. Companies that do not pay at-tention to the safety needs of their people, tend to have more accidents than others. Training lessons on personal safety, dis-aster management and accident prevention can go a long way in building employee morale and increasing productivity.

A ‘People Plan’The most crucial factor to consider is time. People are fragile in nature— they have emotions and wants. It is fool-ish to expect human beings to respond like machines just because a company is paying their salaries. People strategies fail when companies loose pa-tience with their own people. It is important to be prepared for short-term difficulties, drop in service levels, loss of revenue, increased costs, loss of custom-

ers and even loss of staff. Peo-ple will have to be trained, will need to learn and it will all be at the cost of the company. But if there is an effective ‘people plan’, then all these failures can become the foundation of a great organization that can de-liver best practices with speed and build an insurmountable competitive edge.

In addition to their own em-ployees, warehousing compa-nies also engage contract com-panies to provide services. The quality pool is, of course, differ-ent for different locations and companies. But companies must aim at bringing in some stand-ardization. There can be differ-ent engagement and job allo-cation models, but it would be encouraging to see companies

The lack of standard qualifications for skills such as packing, picking, loading, etc. intensifies the problem of matching the potential of candidates to the job deliverables.

giving the same safety and proc-ess training to contract staff as they give their own employees.

‘People plans’ ought to be about people first. Their inputs and suggestions are critical. A company may think it is serv-ing the needs of its people, but in essence, that is not how em-ployees may feel. Therefore, communication is the corner-stone of building people-driven organizations. Organizations that have consultative HR proc-esses tend to win in the long run. The challenge is even more when not all employ-ees are formally educated and companies may need to have multilingual communication. Communication is a two-way street, and there should be as much listening as talking. The

When a company expects the best output from its people, it must also create a physical and emotional environment that is best in the business.

management must constantly innovate platforms for two-way engagement with all levels of employees.

The primary objective of any business is to create wealth, and create it in a manner that is sustainable, innovative, ethi-cal and inclusive.But how that business chooses to share this wealth with its employees is what makes it a great corpora-tion to reckon with. The journey of a company from a business to a great corporation cannot be made without the humanistic metaphysics of making it demo-cratic— an organization which is truly for the people, of the people and by the people.

About the Author: Bhairavi Jani, Director, SCA Group.

20 November 16—30, 2011 www.logisticsweek.com

Yoke2AL 101

Gunnebo2BL 201/2CL 327

Accu Sort2AL 103

Gear INDIA2AL 102

Voltas 2BL 202

DST KEMI2DL 404

Borer2EL 503

Part2CleanPavilion

Lounge/Besprechung2DL 408

Fair- Xperts2DL 410

NGL2DL 412

Exide Batteries2CL 302

Ministry of Transport of theRussian Federation.

2CL 304

Godrej2AL 104

Jyoti2AL 105

Log.INDIA2AL 109

Alkon2AL 111

Rotomag2AL 113

NTB2AL 115

Prime2AL119

Stromag2AL 121

AVC2AL 136

2EL 522

Fischer2EL 520

VCM2EL 518AIMIL

2EL 514

V R 2EL 510

StopAQ2EL 508

Statfield2EL 502

Malati Machines2AL 118

JREW2BL 209

Hercules2AL 120 Aigen Batteries

2BL 210

Ferroo Tiger2BL 208 TVH

2CL 311PARI

2DL 423

DFO2D L426

Techno2DL 424

Orbit2E L515

Jenmone2DL 422

Progalvano2EL 513

Mannstaedt2EL 525

VDMA2EL527

BMWI2EL 531

Hoesch2DL 432

KAUP2DL 430

Reinherdt2CL 320

HSO2DL 425

Walther2D L 427

Sulzer2CL 322Forjas Irizar

2CL 319

AKAPP 2BL 214

ORIENTALS2AL 123

Automha 2BL 215

Giovenzana2BL 213

T.H.G.2AL126

Lounge2AL 128

Zhejiang Yideli2BL217

Nukovo Cargo2AL 130 Kone Crane

2CL 321Hoffman2CL 324

LNC2DL 429

Rajdulari2DL 431

Seva2CL 329

OM Engg.2BL 222

A.T.I.B.2BL 219

Speciality2BL 218

Speciality2BL 216

Armsel2CL 318 Lounge

2CL 311

TDS2EL 524

Blastline2EL 526

Infomedia 182EL 528

GMT2DL 327 2EL 531

Elite2AL 138

Sun Tyre2AL 139

EVS2BL 221

Datar2BL 223

Inspeedi2BL 225

SSPC2EL 526

2CL 332Vanjax

Layout Plan of CeMAT INDIA & SURFACE INDIA – Hall 2

Industrial Trade Fairs of Hannover in BangaloreIndustrial Trade Fairs of Hannover in Bangalore 6-9 DECEMBER 2011

Miebach2DL 325

2EL 513 AKiosk for Anti Corrosive

Kiosk for Cargo Connect

21November 16—30, 2011 www.logisticsweek.com

What are your expectations from CeMAT this year?Vivek Soni (VS): This is the first time we will be participating in CeMAT. To give some background, BC Equipment Trading Pvt. Ltd. was recently incorporated in 2010 and now operates under the brand ‘Equipwell’. As the sole Indian distributor for TCM, STILL, Combi Lift and Aisle-Master, Equipwell will be showcasing a wide range of equipment from these four leading international Material Handling Equipments-Original Equipment Manufacturers (MHE-OEMs) at CeMAT Bangalore 2011.

This year’s CeMAT is our launch pad, and we plan to use this event to showcase the depth and range of products our OEM partners have entrusted us to bring to the Indian market.

We expect our participation to be a resounding success. No other independent dealer (non-manufacturer) has ever taken the kind of display space we have or brought to the Indian market the kind of brands and range of products we will be exhibiting. We are very excited to participate at CeMAT and expect that this event will completely change and overhaul customer expectations from stand-alone dealers.

To put things in perspective, Equipwell is MNC owned, professionally managed and promises to bring unprecedented levels of product knowledge, expertise

and after-sales support to its Indian customers. With its rental arm GEAR, Equipwell will provide for the first time in India, a complete 360° solution supported by application advice, product quality, spare parts, after-sales support, trained manpower for operations and maintenance and financing solutions, all under one roof.

Why have you chosen CeMAT as a forum to ex-hibit your products? VS: Both internationally and in India, CeMAT has always had a strong association with the Material Handling Equipment and Services Industry. This association brings to the event the right kind of audience that is interested in the Material Handling Space. Equipment /product/service providers as well as consumers, end users, financing/funding agencies, the trade media, in fact, everyone connected to the Material Handling sector makes it a point to attend CeMAT. The event provides a perfect opportunity to interact and engage with potential and existing customers, MHE sector specialists, and other vendors for products and services that help or compete with our bouquet of products and services.

In a nutshell, CeMAT participation addresses all the important reasons why one participates in trade fairs: customer engagement,

competitive intelligence, knowledge transfer, publicity, PR, recruitment, networking etc. Keeping in view our MHE

portfolio, we believe that CeMAT provides us with the right forum and we are happy to be here.

How do you position yourself in an event like CeMAT that largely show-

cases MHE?VS: Well, CeMAT does have a strong

association with Material Handling equipment. That said, CeMAT also brings to the fore, stakeholders in the Material Handling and Logistics space that are not in the business of manufacturing, selling or end users of MHE. These stakeholders include:l Service Providersl Rental Agenciesl Strategy and Process Consultantsl Logistics Solution Providers

“CeMAT Is Our Launch Pad”

Vivek SoniJoint Managing Director, BC Equipment Trading Company Pvt Ltd.

Vivek Soni, Joint Managing Director, BC Equipment Trading Company Pvt. Ltd., discloses that Equipwell is hoping to grab the attention of the right stakeholders at CeMAT this year. Anuja Abraham reports.

l Port Operatorsl Transportersl Software Solution ProviderslTax ConsultantslIntermediate product and services providersl Thought leadersl Funding agenciesl RegulatorsIn this myriad landscape of various stakeholders, we see Equipwell occupying a very unique position in the Indian MHE space. We position ourselves as a large, independent products and services provider with an MNC pedigree, strong adherence to professionalism, corporate governance, global best practices as well as deep-rooted expertise and domain knowledge.

What do you have in store for CeMAT this year? VS: Our product range is going to be the widest ever showcased. From the TCM portfolio, we are exhibiting five machines which will be a mix of internal combustion (IC) as well as battery across various tonnage levels. Four of these are counterbalance trucks and one will be a stand-on reach truck.

From the Combi Lift / Aisle-Master portfolio, we are exhibiting, for the first time ever in India, an Aisle-Master machine, which is a Very Narrow Aisle (VNA) category unit with articulating masts.

Our tie-up with STILL got formalized very recently, and because of time constraints, we are unable to exhibit units from STILL’s world-class product range in this year’s CeMAT.

Where does BC Equipment take off from here?VS: Post CeMAT, I expect Equipwell to capture significant mind space with all stakeholders in this sector. Our short-term plan is to meet our sales targets, provide fantastic after-sales support to existing and future customers of TCM, STILL and Combi Lift and provide a very different MHE end-user experience to our customers. Whether our customers want to buy or rent, Equipwell, along with its associate company GEAR, will offer the widest possible bouquet of options and services to our customers.

What makes BC Equipment better at handling customer’s demands?VS: The Indian customer needs advice on the right equipment for the job, a wide product range to choose good quality equipment from, timely delivery of after-sales service, quick turnaround on spare parts, skilled and knowledgeable technicians, flexible ownership /payment options, adherence to processes and standards and a professional approach.

Equipwell’s MNC ownership pedigree, size and scale give it an edge over other dealers and distributors in handling customer demands. With the complete product range of TCM, STILL, Combi Lift and Aisle-Master, and offices (sales and service) in Ahmedabad, Bangalore, Bhopal, Bhubaneshwar, Chennai, Delhi, Hyderabad and Mumbai, we are India’s largest independent dealer/distributor of MHE equipment and services. We have a ‘consulting approach’ and our first endeavor is to help the client identify what is the right equipment for the job.

We are also the only independent dealer/ distributor which offers customers various ownership options such as pure rental, rent now and buy later at discount, buy now and sell back at a pre-agreed price, buy but outsource operations and maintenance etc. The strength of our associate Company GEAR, which is India’s largest independent equipment rental company, gives us the ability to offer these packages to customers.

Our knowledge sharing tie-ups with material movement specialists such as, CHEP and association with established OEM’s such as STILL, TCM and Combi Lift, gives us access to global best practices which we bundle with our sales approach to provide the best equipment for the job, coupled with world-class after-sales service and attention to detail.

22 November 16—30, 2011 www.logisticsweek.com

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24 November 16—30, 2011 www.logisticsweek.com