smart logistics - january 2013

AUGUST 2012 • SMART LOGISTICS • 3

VIEWPOINT VIEWPOINT

VIVA LA CONSUMERISM!

Archana [email protected]

RETAIL therapy has got a whole new meaning for the supply chain and logistics players with the much-awaited nod from the government to increase FDI in retail—51% in multi-brand retail and 100% in single-brand retail. While for the SCM value chain, it is time to get into real action, for the common man, it means that there will be more malls and for the more informed, it means that India could soon have the likes of Tesco, IKEA, Wal-Mart, Best Buy, Starbucks, Carrefour, etc., setting shop in India. Viva la consumerism!

While consumers are busy preparing themselves to get pampered by the multiple international brands vying for their attention, we, the movers and shakers, in our entirety, from the strongest to the weakest link of the supply chain value chain, have to transform ourselves from being Feeble to being Able!

It is true that the column space, web space and mind space have been optimally over utilised (and saturated) on how FDI in retail will impact the logistics and supply chain sector and how we must get ready to stack, store, move and deliver differently, as per the internationally acceptable norms. We, at Smart Logistics, have taken upon ourselves to equip and enable the Indian logisticians to ride over this tide of opportunities.

Amid a lot of cheer over this opening up of our market, an analysis of how the early movers such as Brazil, Indonesia, Malaysia and China, which relaxed FDI norms in the 1990s, have been able to improve the share of organised retail reveals that the Indian story stands delayed, especially given that the size of the retail market here is one of the largest. Having said that, FDI in multi-brand retail will have a significant impact on the economy as well as the Indian logistics sector. It will be an important step in increasing access to consumers and will set pace for the second wave of economic reforms, which will attract foreign capital, thereby strengthening the growth of Indian economy.

Logistics and supply chain companies are also expected to grow as they will be the link between small manufacturers, producers & farmers and the organised retail chains, and thereby help them get higher returns for their supplies. This close integration with the organised retail chains will also help small-time producers in gaining access to the latest technologies, systems and processes, thus enabling them to maximise their profits.

The deepest impact of more supermarkets shall be on retail procurement systems. This de-fragmentises, integrates and centralises the procurement system over the country. Increased levels of centralisation may also occur in the procurement decision-making process, and in the physical produce distribution. Centralisation increases the efficiency of procurement by reducing coordination and other transaction costs, although it may increase transport costs by extra movement of products.

The next, and economically logical, step is Internationalisation to set up regional distribution centres to allow coordinated procurement over few countries. A logical further extension is insertion into global procurement networks. More supermarkets shall mean a shift from reliance on traditional wholesale to use of non-traditional—specialised/dedicated—wholesalers and logistics firms.

If consumer is the king, logisticians are the kingmakers!

VOL. 03, NO. 10 JANUARY 2013CONTENTS

Looking For A Specific Product?Searching and sourcing products were never so easy.

Just type SL (space) Product Name

and send it to 51818eg. SL Forklift and send it to 51818

S

VIEWPOINT 3NEWS, VIEWS & ANALYSISLatest Happenings In The World Of Logistics 8NEWS ANALYSISInland Waterways: Empowering India’s Coal Imports 14TECHNOLOGY & INNOVATIONSCutting-edge Solutions 15PRICE TRENDS 17EVENT CALENDAR 49TENDERS 58PRODUCT UPDATE 59PRODUCT & ADVERTISERS’ INDEX 64PRODUCT & ADVERTISERS’ INQUIRY FORM 65

ALSO IN THIS ISSUE

EVENT REPORTSEngineering Expo LudhianaExploring A Horizon Of Opportunities 50Panel Discussion: LudhianaIs Punjab Ready To Reclaim Its Manufacturing Might? 52Engineering Expo Indore 2013Tapping India’s Central Vantage Point 53Engineering Expo Aurangabad 2013Leveraging Market Trends, Expanding Opportunities 55Retail Supply Chain Summit 2012Retail Gets In Sync With Supply Chain 57

IN CONVERSATION WITH‘DFC Has Created Enough Opportunities For Various Foreign Investors In India’ RK Gupta, MD, Dedicated Freight Corridor Corporation Of India Limited (DFCCIL)

18

SPECIAL FOCUS: FDI IN RETAIL

Cold Chain For Fast Food RetailGenerating Better Business Economics 22

20FDI In Retail Is The Indian Logistics Sector Up For The Challenge?

Retail WoesNeeded: Timely Attention 24Retailing Challenges & FDIOpportunities In Disguise? 26FDI In Retail StrategiesIt’s Time To Take The Dip Stick Test 28LSPs In RetailCashing In On The FDI Opportunity 30

SCM TRENDSChange Management In Procurement OutsourcingCreating Value Through Improvement In Effi ciency 36

FMCG

32Supply Chain FlexibilityUnravelling Packaging And Distribution Effi ciency Opportunities

STRATEGY

44Operational Excellence In Facilities’ ManagementCreating A Culture Of Discipline

TIPS & TRICKS

48Supply Chain Drivers5 Supply Chain Resolutions For The New Year

AUTOMATION TRENDS

40Voice TechnologyThe 10 Keys To Voice Technology Deployment Success In Distribution Centres Cover Illustration: Sanjay Dalvi

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8 • SMART LOGISTICS SMART LOGISTICS • JANUARY 2013JANUARY 2013

L A T E S T H A P P E N I N G S I N T H E W O R L D O F L O G I S T I C SNEWS, VIEWS & ANALYSISNEWS, VIEWS & ANALYSIS

ABU Dhabi and India are entering a

new era of trade with the completion

of Kizad—the industrial zone of

tomorrow. Spread over 418 sqkm of

land with world-class infrastructure,

easy access to global markets, low-cost

utilities, 100% ownership opportunities

and a tax-free environment, Abu Dhabi

is enticing foreign direct investment

from India and the rest of the world

with the establishment of Kizad, the

Khalifa Industrial Zone Abu Dhabi.

From the outset, Kizad has been

a cornerstone of Abu Dhabi Vision

2030—the Abu Dhabi Government’s

plan to diversify the economy and to

reduce dependence on revenues from

the prolific oil and gas sector. Kizad

alone will contribute up to 15% of Abu

Dhabi’s non-oil GDP and provide

over 100,000 jobs by 2030. This

commitment to diversification makes

Kizad, a centrally located gateway to

over two billion people within four

time zones, the destination of choice

for Indian investors with an eye on

expanding into the lucrative Middle

Eastern markets. Indian investors

are being lured by a world-class

transportation infrastructure that is

constantly establishing better links

with the region. The multi-modal

network includes multi-lane highways,

airports and the recently inaugurated

Khalifa Port. By 2016, Etihad rail will

connect the industrial zone to the Gulf

and beyond via high speed rail.

In addition to easy access to

regional markets, Kizad’s investors will

benefit from clustering; the zone’s plan

to encourage productivity by grouping

companies in similar industries.

By clustering aluminium; steel;

engineering metal; food; paper, print

& packaging; trade and logistics; mixed

use and other industries of importance

to India’s industrial leaders, Kizad will

facilitate supply chains and enable

investors to maximise their profits.

Given the long commercial history

between the two countries, Kizad views

South Asia’s economic powerhouse as

its main target market. “Due to India’s

many industrial leaders, India is one of

Kizad’s primary markets, said Khaled

Salmeen, CEO & MD, Kizad. “Our

first visit to India in 2011 and our

subsequent trips have allowed us to

meet India’s business leaders and offer

them tax and other advantages not seen

before.” Salmeen added, “With the

advantages offered by a project that is

central to the Abu Dhabi Government’s

plan to diversify the local economy away

from oil & gas, Indian investments

are perfectly positioned to flourish in

a new and exciting market. Kizad is

rolling out the red carpet for direct

investment from India, and, in doing

so, it is ensuring a long and fruitful

relationship with the Subcontinent in

years to come.”

INDIA’S TIES WITH THE UAE GROW DEEPER

INDOSPACE Chakan, the first in

a series of modern industrial and

logistics parks, being developed

across India, has commenced

operations at Chakan, near

Pune. The total project cost is

approximately `400 crore. Spread

across 100 acre, the integrated

industrial park houses modern

warehouses and light manufacturing

facilities designed to meet the

logistics and supply chain needs of

global companies. The park is being

launched in multiple phases and

phase 1 consists of over 400,000

sqft of built-up space which is

operational. On completion of all

phases, IndoSpace Chakan will have

a total built-up area of 1.7 million

sqft spread across 8 buildings.

The park will be managed by

Realterm Everstone Development

Management, a pioneer in modern

logistics spaces across India.

Brian Oravec, Managing Partner,

Realterm Everstone Development

Management, said, “All IndoSpace

parks are designed for efficient, cost-

effective supply-chain operations,

which enables IndoSpace tenants to

optimise their operations. With a

total of 15 million sqft of modern

industrial real estate facilities

currently under development across

five cities, IndoSpace is the largest

industrial real estate developer

in India and offers clients the

opportunity to work with a single

developer pan-India.”

Chakan is among India’s fastest

growing industrial locations and is

home to major manufacturing units,

including Volkswagen, Hyundai,

L’Oreal, Daimler, Mahindra &

Mahindra and Bajaj Auto. IndoSpace

tenants include global companies

with large scale distribution and light

manufacturing requirements.

INDOSPACE INAUGURATES WORLD-CLASS INDUSTRIAL AND

LOGISTICS PARK AT CHAKAN

ABG Shipyard Ltd, the country’s

largest private shipbuilding company,

has bagged a repeat order from the

Ministry of Defence for building an

additional cadet training vessel for the

Indian Navy. This prestigious contract

is worth about `485 crore.

The vessel will be approximately

110 metre in length with the capacity

to carry a light helicopter. Designed to

achieve a maximum speed of 20 knots,

the vessel will be used to provide basic

training to the Naval Cadets and

trainees in activities such as disaster

relief, search and rescue operations.

Till date, ABG Shipyard has delivered

more than 160 vessels worldwide.

Commenting on the order, Dhanajay

Datar, Whole-Time Director & CFO,

ABG Group, said, “This repeat order

reinforces the Ministry of Defence’s

confidence in us. We are honoured

that the government has recognised

our shipbuilding skills and given us

the chance to serve the country once

again.”

ABG SHIPYARD BAGS `485 CRORE ORDER FROM THE MINISTRY OF DEFENCE

JANUARY 2013JANUARY 2013 • SMART LOGISTICS SMART LOGISTICS • 9

NEWS, VIEWS & ANALYSISL A T E S T H A P P E N I N G S I N T H E W O R L D O F L O G I S T I C S

IN recognition of the need for supply

chain managers to cut costs and secure

a constant high degree of delivery

performance, Damco now offers

improved capabilities to optimise the

entire end-to-end supply chain from a

cost, delivery time, capacity and carbon

perspective. Damco’s global team of 50

supply chain developers has done more

than 200 projects, so far, during 2012.

Based on new technology, Damco

will provide customers with a stronger

foundation for making decisions about

‘How much inventory is needed to

meet the desired service levels? Where

should inventory be kept (at origin,

in transit, at destination)? How many

warehouses/DCs are needed and

where to locate same? When to phase

in/phase out warehouse capacity say

during the next five years? Which

transportation mode, container and

truck type is optimal from a cost,

service and carbon perspective for

the inbound as well as the outbound

supply chain?

“A more quick, thorough and

holistic approach to supply chain design

and optimisation is key to operate in a

world of constant change,” commented

Erling Johns Nielsen, Global Head –

Supply Chain Development, Damco.

“You can have the best supply

chain concept in the world. However,

without being able to adapt to change

while having access to experienced

supply chain professionals located close

to your supplier and customer base,

who can implement and execute the

change on a daily basis, you will not

reap the full benefits,” said Nielsen.

Earlier in the year, Damco launched

the revolutionary Damco Dynamic

Flow ControlTM, which tackles

the hassle of dealing with constant

changes on the demand and supply

side without adding cost, time and

complexity. The new optimisation tool

is the strategy part of Damco Dynamic

Flow ControlTM.

A prerequisite for supply chain

excellence is that you can evaluate

supply chain performance, simulate

your different options very quickly

while understanding implications

to cost, service levels, lead time

and capacity and translate your

findings into specific actions on a

day-to-day level.

“New tools combined with

Damco Dynamic Flow ControlTM

ensure that it takes much less

time to simulate the impact of the

change, design new business rules

and subsequently roll out the solution

across all stakeholders involved in

the supply chain. This is really a

missing link in many supply chains,”

he concluded.

DAMCO UNVEILS MISSING LINK TO SUPPLY CHAINS

SHIPPING Corporation of India

(SCI) Ltd has recently accepted

the delivery of a Kamsarmax Bulk

carrier, mv ‘Vishva Jyoti’. The

vessel is the first of a series of four

Kamsarmax bulk carriers ordered

by SCI with Jiangsu Eastern Heavy

Industries Co Ltd, China.

Orders for these vessels were

placed in September 2010. The

remaining three vessels would be

delivered to SCI during 2013 in

a phased manner. Informatively,

during the second half of 2012,

SCI had accepted the delivery of

4 Panamax bulk carriers from STX

Shipyard in China. SCI had been

predominantly operating smaller-

sized Handymax and Handysize

bulk carriers in the past. With the

delivery of these larger Panamax/

Kamsarmax bulk carriers having

higher cargo carrying capacity, SCI

would be increasing its exposure in

India’s import and export of dry

bulk cargoes. The vessels are suited

for worldwide trading and can be

alternatively deployed in cross trades

depending on the opportunities

available. mv ‘Vishva Jyoti’ has a

gross tonnage of 44,864 tonne and

deadweight of 81,894 tonne. The

vessel is dually classed with BV and

IRS and has been built to comply

with the latest and most stringent

international regulations.

India is one of the growth drivers

for the world economy recording

impressive GDP growth compared

to the developed economies.

Industrial and infrastructural

development plays a major role to

sustain this growth. As a national

carrier, SCI has been aiming to

increase its presence in India’s

ever increasing dry bulk trade

and strengthening the bulk carrier

fleet would help SCI contribute to

this growth.

SCI TAKES DELIVERY OF KAMSARMAX BULK CARRIER

With a new network optimisation tool, Damco now further enhances its end-to-end supply chain management platform to provide the utmost in cost savings to customers, while decreasing carbon emissions and enhancing overall supply chain design.

USP

RAILWAYS carried 647.11 million

tonne (MT) of freight traffic during

April–November 2012, according to

Railway Ministry data. The freight

carried shows an increase of 29.06

MT over the freight traffic of 618.05

MT carried during the corresponding

period last year, registering an increase

of 4.70%.

Railways carried 81.75 MT of

goods in November this year. There

is an increase of 0.62 MT over the

freight traffic of 81.13 MT carried by

the Railways during the same period

last year, thereby indicating an increase

of 0.76%.

RAILWAYS CARRIED 647 MT FREIGHT IN APRIL–NOVEMBER 2012 PERIOD


NEWS, VIEWS & ANALYSISL A T E S T H A P P E N I N G S I N T H E W O R L D O F L O G I S T I C SNEWS, VIEWS & ANALYSIS

CARGO volumes at India’s dozen

state-owned major ports fell by

more than 2.8% between April and

November as global trade slowed and

increasing number of private minor

terminals ate into the market.

The 12 ports handled a combined

359.9 million tonne of cargo as against

370.6 MT handled in the year-ago

period, data released by the Indian

Port Association (IPA) showed. These

ports are located at Kolkata, Paradip,

Visakhapatnam, Ennore, Chennai,

Tuticorin, Cochin, New Mangalore,

Mormugao, Kandla, Mumbai and

Jawaharlal Nehru Port Trust (JNPT).

Experts say that the volume of

India’s external trade handled by these

ports has fallen to less than 60% from

more than 75% until a few years ago.

“The minor ports have been

attracting major portion of the

cargo at a time when the global

economy has slowed down,” said

Shailesh Garg, Director, London-

based consultants Drewry Shipping.

“The minor ports, which are more

efficient, have become a threat to the

major ports,” Garg added. Container

cargo at JNPT—the country’s largest

container port by volumes—declined

1.76% from a year ago to 42 mt,

according to IPA data.

However, the country’s only

corporate port at Ennore posted a

growth of 20% during the period largely

due to an increase in the shipment of

coal, both thermal and coking. Ennore

is the only port that was built as a

corporate entity as compared to the

other ports that are still run as trusts.

The sharpest fall in cargo was at

Mormugao in Goa where traffic fell

by more than 40% because of the ban

initiated on iron ore handling by Goa

State Pollution Control Board.

CARGO VOLUMES OF MAJOR PORTS DIP 2.8% ON SLOWING TRADE

HD Gujrati has assumed charge as Director – Operations & Business

Development, Dedicated Freight Corridor Corporation of India (DFCCIL).

Before taking over the charge in DFCCIL, he was working as Executive

Director – Traffic, Railway Board, Ministry of Railways. A Post Graduate

in Physics and an MBA in Finance & Marketing, he joined Indian Railway

Traffic Service in the 1985 batch.

He has also worked as Executive Director – Freight Marketing and Director

– Traffic, Director – Safety in Railway Board, Group General Manager –

Strategic Planning, International Marketing and Operations in Container

Corporation of India Ltd. He has vast experience in rail transportation including

freight operation, multimodal logistics, traffic planning, strategic planning and

use of information technology in rail transportation.

HD GUJRATI APPOINTED AS DIRECTOR (OPERATIONS & BD) IN DFCCIL

INDIA aims to have 5%

global market share in shipbuilding

by 2020, Shipping Minister

GK Vasan recently told the

Lok Sabha. Replying to

supplementaries, Vasan said that

the government has mooted

plans to develop ancillary units

for the shipbuilding sector, which

has the potential to create 2.5

million jobs.

He said that the government

has taken various initiatives for

upgrading its infrastructure in

ports, which include expeditious

implementation of various capacity

addition and mechanisation project.

The initiatives include private

sector participation in capacity

augmentation/upgradation for

which bid documents have been

standardised, and 100% FDI being

allowed under the automatic route,

he said. Vasan said that income

tax incentives were also available

for investments made in port

infrastructure.

“Similarly, in order to augment

the Indian tonnage in the

shipping sector, the government has

taken initiatives such as introduction

of tonnage tax scheme and policy

of cargo support to Indian flag

ships in respect of government-

owned/controlled cargoes,” the

minister stated.

Vasan said that the shipping

countries, which are in service

sector, were allowed to avail foreign

currency loans in the form of

External Commercial Borrowings

and Foreign Currency Convertible

Bonds under the automatic

route from their equity holders up

to 200 million dollars. He informed

that the proposals beyond $200

million were considered under the

approval route.

‘INDIA AIMS TO HAVE 5% GLOBAL MARKET SHARE IN

SHIPBUILDING’

HYDERABAD’S Rajiv Gandhi

International Airport (RGIA) has

won the Best Cargo Airport and the

Best Cargo Terminal of the Year

awards from the Air Cargo Agents’

Association of India (ACAAI),

according to reports.

Vikram Jaisinghani, CEO, GMR

Hyderabad International Airport,

the airport operator, said it was an

honour to be recognised by customers

and stakeholders. “The award further

motivates us to achieve many more

milestones towards our vision of

transforming RGIA into a logistics

hub of India,” he stressed.

A new upgraded cargo apron

was recently opened and can now

accommodate greater numbers of

Code-F and heavier cargo aircraft

and also reduce ground time spent on

freighters, it is learnt.

HYDERABAD AIRPORT RECOGNISED AS BEST CARGO AIRPORT

NEWS, VIEWS & ANALYSIS


NEWS, VIEWS & ANALYSIS NEWS, VIEWS & ANALYSISL A T E S T H A P P E N I N G S I N T H E W O R L D O F L O G I S T I C S

SWISS WorldCargo has underlined

its commitment to paperless cargo

by joining the Proof of Concept for

IATA’s ‘Multilateral e-Air Waybill

Agreement’ initiative. The cargo

division of Swiss is the first carrier

worldwide to sign up for this Proof

of Concept, which marks a significant

milestone within the e-commerce

framework promoted by the Global Air

Cargo Advisory Group (GACAG).

The model agreement for Electronic

Data Interchange (EDI) as a substitute

for the traditional paper air waybill

is proposed to become ‘multilateral’:

The objective is to have the bilateral

EDI agreements between the

forwarders and the carriers replaced by

a single multi-lateral agreement. The

concept is that forwarders entering

into the agreement with IATA

effectively enter into agreements with

all participating carriers who have

appointed IATA as their agent to

enter into the agreements with the

forwarders on their behalf.

The Multilateral e-Air Waybill

Agreement is a crucial development

within the e-Air Waybill framework,

introduced by IATA with the

acknowledgement of FIATA, the

International Federation of Freight

Forwarders Associations and GACAG,

to enable airlines, shippers and freight

forwarders to experience the benefits

of a paperless environment.

“The new agreement will allow

forwarders and airlines to get away

from the painstaking process of

company-to-company and location-to-

location agreements which have slowed

the adoption of e-commerce until

now,” commented Christine Barden,

Head–Transportation Processes and

responsible for the e-Air Waybill

project at Swiss WorldCargo.

SWISS WORLDCARGO FIRST CARRIER TO JOIN PROOF OF CONCEPT FOR IATA’S MULTILATERAL E-AIR WAYBILL AGREEMENT

DREDGING Corporation of India

(DCI) would take steps to add four

more dredgers to its fleet and post-

acquisition, the PSU would be able to

take up at least 80% of the maintenance

dredging works of ports across the

country, Shipping Minister GK

Vasan informed during a conference.

Dedicating to the nation DCI Dredge

XIX, a trailer suction hopper dredger,

at Ennore Port, he said that two

more such dredgers would be joining

the Mini Ratna PSU in the next

financial year.

DCI was also taking action for

placing orders for two 9000 cum

Trailer Suction Hopper Dredgers

during the 12th Plan period, Vasan

said. At present, DCI dredgers were

engaged at Kolkata Port, Paradip Port

and Cochin Port and recently, Kandla

Port has also awarded its maintenance

dredging works to DCI, he said.

DREDGING CORPORATION TO INDUCT FOUR MORE DREDGERS

Invites You ToIndia’s Largest

SME Gathering


NEWS, VIEWS & ANALYSISL A T E S T H A P P E N I N G S I N T H E W O R L D O F L O G I S T I C SNEWS, VIEWS & ANALYSIS

APL Logistics and VASCOR have

recently announced the formation

of a joint venture to better serve the

growing and increasingly sophisticated

supply chain needs of the automotive

sector in India. The Delhi-based

joint venture—named APL Logistics

VASCOR Automotive—draws on the

supply chain expertise and auto sector

experience of two of the industry’s

most respected brands. APL Logistics

is a leader in international supply chain

services with extensive experience

serving the automotive sector in both

developed and emerging markets. In

India, APL Logistics’ international

expertise is complemented by its strong

intermodal rail capability through

IndiaLinxSM, which operates reliable,

dedicated container train services to

Northern India’s hinterland.

VASCOR is a leading automotive

third-party logistics (3PL) with

deep experience in inbound-to-

manufacturing, outbound finished

vehicle, and value-added services

throughout the US, Canada and

Mexico. It has market-leading

expertise in finished vehicle logistics.

“This collaboration between APL

Logistics and VASCOR marks the

first international 3PL to be dedicated

exclusively to India’s auto sector, and

underscores India’s growing importance

as a major global automotive

manufacturer,” said Bill Villalon, VP

– Automotive, and Chairman, APL

Logistics of the joint venture.

“APL Logistics VASCOR

Automotive will seek to raise the bar

for automotive logistics in India by

developing and offering innovative

solutions that meet the increasingly

sophisticated requirements of Original

Equipment Manufacturers (OEMs)

and tyre suppliers,” said Bill Garrett,

President & CEO, VASCOR Ltd,

and CEO of the joint venture.

The joint venture has appointed

Umesh Bhanot as Chief Operating

Officer. In close consultation with

OEMs, APL Logistics VASCOR

Automotive has developed a rail

wagon with a unique design that

can accommodate a wide range of

automobiles, including the fast-growing

SUVs. The complete door-to-door

service will include collection of

finished cars from OEM plants, vehicle

loading and unloading at terminals,

and long-distance rail haulage, and

last mile delivery. Using these newly

designed wagons, the joint venture

plans to introduce AutoLinxSM, an

innovative rail-based solution for more

reliable, damage-free and cost-efficient

distribution of finished vehicles and

motorcycles across the country. Trial

runs of AutoLinxSM rail-based wagons

will begin in early 2013 with full-scale

operations slated to begin mid-2013

following regulatory approvals.

APL LOGISTICS & VASCOR FORM AUTOMOTIVE LOGISTICS JOINT VENTURE IN INDIA

Exhibitor ProfileAuto & Auto Components | Chemicals & Allied Products | Testing & Measuring Instruments Electrical & Electronics | Hydraulics & Pneumatics | IT Products & Services | Automation | Instrumentation | Material Handling Equipment | Packaging Machinery | Wires & Cables Machine Tools & Accessories | Pipes & Fitting | Plastics & Polymers | Safety & Security | Process Machinery & Equipment | Light & Medium Engineering

11 - 14 January 2013Labhganga Convention Centre

10 am - 7 pm

INDORE

225+ participants | 12,000+ business visitors expected7,000+ products on display | Business transactions worth ` 55 crore expected | Spread over 5500 sq mtr | Showcasing more than 28

diverse industry categories.

NEWS, VIEWS & ANALYSIS


NEWS, VIEWS & ANALYSIS NEWS, VIEWS & ANALYSISL A T E S T H A P P E N I N G S I N T H E W O R L D O F L O G I S T I C S

MOL (Asia) Ltd has recently

announced a senior appointment

and promotion in its West Asia

Region, effective January 1, 2013.

Vivek Kale, currently Deputy MD

and Country Director, MOL India,

will be promoted to the position of

Regional Director, MOL West Asia

Region and the position of MD,

MOL India. He will succeed Kazuya

Gakuto, GM – Administration

and Accounting Group – Liner

Division, MOL. Kale will be based

in Mumbai and will report directly

to Michael Goh, Chairman & MD,

MOL Asia.

As Regional Director for MOL

West Asia Region, he will oversee

MOL’s business and operations in the

Indian Subcontinent, the Middle East,

East Africa and Indian Ocean Islands.

He will concurrently be the Country

Director for MOL India. All other

Country Directors in the West Asia

Region will report to him.

Kale is a veteran with more than

three decades of experience in shipping.

He started his shipping career in 1976

with a leading shipping agency house

in India and thereafter, held various

management positions in some of the

leading shipping companies in India.

Having joined MOL India in 2002

as GM – Sales, he was concurrently

the Head, Western India District,

MOL. He contributed significantly

in expanding MOL into other Indian

cities and organising sales, customer

service and documentation processes.

In 2005, he was promoted to Deputy

MD and in 2009 as Country Director.

Commenting on this announcement,

Goh said, “To be a true global player

and operator, MOL believes its

workforce should have people with

international orientation, outlook and

background to maintain and expand

our business. We are happy to see the

recent appointments and promotions

of a new generation of local national

staffs to key positions in our Asian

regions/countries.”

Goh added, “Vivek brings to us

his broad and diverse experience

and business knowledge and will

significantly contribute to our

operations and business growth in

West Asia.”

MOL (ASIA) ANNOUNCES SENIOR APPOINTMENT & PROMOTION IN ITS WEST ASIA REGION

A new rule could hurt India’s $1

billion worth of Active Pharmaceutical

Ingredients (APIs) exports to the

European Union (EU)—the second

largest market after the US. APIs are

used in manufacturing drugs. The

rule was brought in as a stringent step

to avert ‘counterfeit’ imports, sources

said. As per the rule, from July next

year, each and every consignment of

Indian-made APIs shipped to the

EU would be checked thoroughly

by a local competent authority and

certified that the product complies

with the European current good

manufacturing practices standards.

Some of India’s leading API

exporters have objected to the rule,

terming it as ‘negative publicity’, and

said more regulations would lead to

delays in approvals.

India exports $13.8 billion worth

of drug formulations, APIs and Ayush

(ayurvedic and herbal) products every

year, of which APIs alone comprise

40%. Most API exports are to the

US (27%), followed by the EU (19%),

Africa (17%), West Asia (7%), Asean

and Latin America (6% each) and the

CIS countries (5%).

According to industry estimates,

the country’s exports to the US were

growing at a rate of 33% every year,

despite intense competition from

China, which exports four times as

much as India to the EU.

NEW EU RULE MAY IMPAIR US PHARMA INGREDIENT EXPORTS

DANFOSS Industries Pvt Ltd, a

global leader in the refrigeration and

air-conditioning recently recognised

contributions of individuals from all

aspects of the cold chain industry

and awarded their outstanding

contribution at the Indian Cold

Chain Expo (ICE Expo) Awards

at New Delhi. DANFOSS ICE

award is constituted in partnership

with Global Cold Chain Alliance

(GCCA) India who is actively

involved in promoting the cold

chain industry in India.

The panel encompassed leading

consultants and officials from

government bodies and industry

associations, among others. The

award categories included every

aspect of the cold chain industry.

The function was attended by

over 200 cold chain industry

professionals.

“The ICE awards are an

integral part of recognising true

prowess in the cold chain industry.

Danfoss is pleased to be associated

with this prestigious platform. We

congratulate all the winners. We

look forward tofuture endeavours

with Global Cold Chain Alliance

(GCCA) India,” said Noel Ryan,

President, Danfoss Industries

Pvt Ltd. Danfoss ICE awards

were presented to Pawanexh

Kohli, Principal Advisor,

CrossTree Techno-visors; Ramesh

Parashuram Paranjpey – Fellow Life

Member, ASHRAE; Rajesh

Agarwal, CEO, Crystal Group;

Jang Bahadur Singh Sangha, MD,

Sangha Seeds, Mahendra Swarup,

President, Federation of Cold

Storage Associations of India;

Sucha Singh, MD, International

Coil Ltd; Amit Srivastava, DGM

– Northern Region, Kirloskar

Pneumatic Co Ltd.

DANFOSS INDIA AWARDS EMINENT PEOPLE FROM THE

COLD CHAIN INDUSTRY

14 • SMART LOGISTICS • JANUARY 2013

NEWS ANALYSIS INLAND WATERWAYS

TODAY, India is among the world’s

fastest growing economies. To support

this growth momentum, it is imperative

that the country has adequate supply

of energy. As on March 31, 2012,

the country’s installed capacity was

1,99,877 MW with coal being the

dominant source of fuel. While coal has

an installed capacity of 54.7%, it has a

share of 70% in generation. Gauging

from the current trends, coal will

continue to remain the dominant source

for the next 30–35 years unless there is

some huge technological breakthrough

in alternative sources of fuels.

India’s thermal coal import figures

had reached 62 MT in 2010 and the

country is expected to become the

second largest coal consumer after

China by 2025. This scenario has

opened up huge opportunities for

an inland waterways transportation

mechanism. Importing coal through

inland waterways can help ensure

better movement of coal across various

parts of the country. Elaborating

further, Tarun Agarwal, Associate,

i-maritime Consultancy Pvt Ltd,

says, “It will relieve the road and rail

transport systems. More importantly, it

will trigger the development of inland

water transport systems. And if the

power equipment segment does well in

inland waterways, it will trigger overall

development of inland waterways.”

FIRMS USING INLAND WATERWAYSPublic sector power companies have

played a dominant role in exploiting

the opportunities for coal movement

through inland waterways. In 2011,

NTPC had signed an agreement

with IWAI and Jindal ITF—the

infrastructure arm of Jindal SAW—for

the transportation of coal to its 2,100-

MW power plant located at Farakka,

West Bengal, through inland waterways.

“The climate for private investment

is being developed by getting public

sector business commitments from

NTPC, ONGC, etc.,” says Agarwal.

Another significant activity was the

transportation of project cargo by

inland waterways (through Bangladesh)

for ONGC’s Palatana power plant

in Tripura, which materialised after

Ashuganj was declared a new Port

of Call under the Indo-Bangladesh

Protocol on inland water transit trade.

OPPORTUNITIES GALOREThe government has been taking

various steps to develop Inland Water

Transport (IWT), which includes aids

for day & night navigation, fixed/

floating terminals at specified locations

for berthing and loading/unloading

of vessels & intermodal connectivity

at select locations. Besides these, the

Central Government also provides

100% grants-in-aid to the states in

the North-Eastern Region for the

development of IWT.

Further, on the policy front, to

improve investments, a committee has

been constituted to scale up private

investment in the inland waterways

sector under the Secretary, Planning

Commission. The Secretary, Ministry

of Shipping, DG of IWAI and a

representative of Department of

Economic Affairs will be its members.

This committee would undertake

a systematic effort to identify new

areas for private investment, both in

infrastructure and in transportation. It

will also assess the investment potential

of the sector and come up with

approaches and proposals for scaling up

private investment in inland waterways.

Besides, it will identify multiple

business models, which could then be

bid out through concessions. In spite

of so many initiatives taken to develop

the sector, “it will develop gradually

because the business and economic

environment in the next few years is

expected to be moderately positive. It is

an area where a player can demonstrate

leadership skills and take the industry

by surprise,” concludes Agarwal.

[email protected]

ARINDAM GHOSH

The importance of coal in the Indian power sector can be easily gauged by the statement that coal-based generation accounts for nearly 60% of the country’s installed capacity—a trend which is expected to continue over the next few years. It is projected that during 2016–17, the requirement for coal to meet the targeted generation would be 842 MT. Under such a scenario, boosting inland water transportation would come as a boon for sustaining higher imports of coal. This would facilitate the movement of coal to various power stations across the country and thus ensure better scope for power generation.

Empowering India’s Coal Imports

According to Inland Waterways Authority of India (IWAI), some of the major advantages of inland waterways include: Energy effi ciency: 1 HP can move

approximately 150 kg on road, 500 kg by rail & 4,000 kg by IWT

Fuel effi ciency: 1 litre of fuel can move 24 tonne km by road, 85 tonne km by rail and 105 tonne km by IWT

High single unit carrying capacity: 1 Barge=15 rail wagons=60 trucks

Environment friendly: Low air & noise pollution

Preferred mode for movement of ODC cargo: Most effi cient, reliable and least capital intensive

ENGINEERING APPLICATIONS

JANUARY 2013 • SMART LOGISTICS • 15

CUTTING-EDGE SOLUTIONS CUTTING-EDGE SOLUTIONS TECHNOLOGY & INNOVATIONS TECHNOLOGY & INNOVATIONS

APL Logistics has recently announced

the launch of SeeChange Lite, a

streamlined mobile version of its

web-based shipment tracking tool,

SeeChange®. “SeeChange Lite is a

step towards enhancing our suite of

value-added services to meet complex,

international logistics challenges.

This new technology tool addresses

the increasingly mobile needs of our

customers who require instant and

reliable access to shipment information

to manage their supply chains,” said

May Chew, VP – Technology, APL

Logistics.

In addition to using SeeChange

Lite to monitor their shipment and

any activity on their purchase orders,

customers can access route information

as well as retrieve shipment, equipment

and booking summaries. SeeChange

Lite offers an additional unique feature

that enhances shipment visibility

for customers—the ability to update

shipment status and location from a

mobile device. The mobile application

is currently optimised for iOS5,

with a version for iOS6 to be made

available soon.

GE Transportation Optimization

Solutions has recently introduced,

ShipperConnect Rail Fleet

Optimization, a new software solution

designed to help rail shippers reduce

transportation costs. According to

the company, the software will allow

bulk shippers to create optimal rail

shipment plans, reduce the time

needed to evaluate shipment variables

and tradeoffs, and manage the balance

between private as well as railroad-

owned equipment.

Kirk Knauff, SVP – Marketing

& Services, GE Transportation

Optimization Solutions, said, “The

ability to create an optimal rail

shipment plan helps shippers manage

a wide range of shipment variables

and drive bottom-line savings through

better fleet decisions.”

SeeChange Lite Mobile Shipment Tracking Offers Reliable Access To Shipment Information

New Software To Help Shippers Reduce

Transportation Costs

• SeeChange Lite provides customers secure and convenient shipment tracking capability. The mobile application can be used on Apple, Android and Blackberry mobile and handheld devices.

• SeeChange Lite is a free, downloadable application available from the Apple Store, Google play and App World.

USPs

Invites You ToIndia’s Largest

SME Gathering

ManufacturingEngineering &On


CARGOSMART Limited, a leading

Software as a Service (SaaS) global

shipping & logistics solutions provider,

recently announced VisibilitySmart,

a new visibility solution that alerts

shippers and logistics service providers

earlier about cargo delays. It helps

shippers improve their operations

with daily, early notifications of

potential delays and measure their

carriers’ on-time performance and

delay reasons with monthly scorecards.

VisibilitySmart fosters collaboration

by equipping shippers with timely

information about cargo delays that

they can act on with their carriers to

improve service and meet delivery

schedules. CargoSmart has found that

on an average, 95% shipment arrive on

time, while 5% gets delayed, which can

have costly consequences. Terminal

congestion, labour strikes, weather

problems or lack of space on a vessel

can all cause cargo delays, which can

disrupt supply chain plans. Late cargo

can mean chargebacks if merchandise

does not arrive by a sale date, factory

shutdowns if parts are not available

or even spoiled goods if the cargo is

delayed too long.

Graham Collins, Director –

Sales & Services, CargoSmart, said,

“CargoSmart’s early notifications of

delays help shippers identify shipment

that need urgent attention during

transit. VisibilitySmart allows shippers

begin working with their carriers as

soon as potential delays are detected,

giving them with more time to adjust

their downstream operations.”

New Visibility Solution Alerts Shippers To Delays Earlier

• VisibilitySmart enables shippers to improve collaboration with ocean carriers to meet delivery schedules.

• It monitors and analyses live vessel data through the Automated Identifi cation System (AIS), sailing schedules, historical route patterns, and shipment plans to anticipate delays. It offers extensive coverage of 21 carriers, 3,500 vessels, and 800 ports.

• The new solution monitors three types of delays: skipped ports of call, missed transshipments, and late arrivals.

• The system provides a daily e-mail with shipment delay summaries to support operations. It also provides a monthly scorecard to measure carriers’ on-time performance and delay reasons to support contract negotiations.

USPs

Cutting-edge solutions, continued

Exhibitor ProfileAuto & Auto Components | Chemicals & Allied Products | Testing & Measuring Instruments Electrical & Electronics | Hydraulics & Pneumatics | IT Products & Services | Automation | Instrumentation | Material Handling Equipment | Packaging Machinery | Wires & Cables Machine Tools & Accessories | Pipes & Fitting | Plastics & Polymers | Safety & Security | Process Machinery & Equipment | Light & Medium Engineering

1 - 4 February 2013Ayodhya Nagari Ground

10 am - 7 pm

AURANGABAD

250+ participants | 20,000+ business visitors expected7,250+ products on display | Business transactions worth ` 80 crore expected | Spread over 15000 sq mtr | Showcasing more than 30

diverse industry categories.


The RFI stood at 177 points in the month of December 2012, which is 2 points higher in comparison to the

corresponding period last year.

ZONAL FREIGHT TRENDS The overall freight rates have decreased by 0.10% as compared to last month. The freight rates from Chennai registered

the highest increase of 1.21% in comparison to last month due to improved cargo availability, whereas the freight rates

from Kolkata registered the highest decrease of 2.43% in comparison to the last month due to less availability of cargo.

INDEX TREND FOR 5 YEARS:

COMMERCIAL VEHICLES DOMESTIC SALES: The overall Commercial Vehicles (CVs) segment registered a growth of 2.73% in April–November 2012 as compared

to the corresponding period last year. While Medium & Heavy Commercial Vehicles (M&HCVs) registered a

negative growth at -16.34%, Light Commercial Vehicles (LCVs, below 7.5 tonne) grew at 16.98%.

FORECAST FOR JANUARY 2013: The RFI in January 2012 was the same in comparison to January 2011. The freight rates in January 2013 are expected

to remain firm because of improved industrial output and the approaching financial year end of many companies.

PRICE TRENDS

Knowledge Partner: Transport Corporation of India (TCI); website: www.tcil.com; e-mail: irf [email protected]

Indian Road Freight Index (IRFI), a service introduced by Transport Corporation of India (TCI), is an index of weighted average lorry freight rates across various routes, calculated based on the route density and the dynamic freight rates of routes across the country.

IRFI Trend for December 2012

SMART LOGISTICS APRIL 2010

TRENDS FOR DECEMBER (Y-o-Y)

180

178

176

174

172

170

168

1662008-09

171172

175 175

177

2009-2010 2010-2011 2011-2012 2012-2013

IN CONVERSATION WITH IN CONVERSATION WITH RK GUPTA RK GUPTA

IMPORTANCE OF DFC FOR FREIGHT MOVEMENTTo ensure sustained growth of the

economy, growth in the transportation

sector ought to be about 1.25 times

the growth of the economy. Indian

Railways has been consistently

adding to its transport capacity, but

the requirement for transportation

and logistics has increased at a much

higher pace. While there has been

rapid growth in terms of volume of

freight traffic carried especially in the

last 10 years, the rail share in freight

transportation has reduced from 90%

to the present 30%. A report published

in the New York Times in June 2010

titled ‘Clogged Rail Line Slow India’s

Development’ elaborates on the same

issue. On the Indian Railways route

meant for running mixed traffic, the

freight traffic always gets lower priority

as compared to the freight. This fairly

sums up the criticality of infrastructure

projects like Dedicated Freight

Corridor (DFC) for the growth of the

Indian logistics sector and the economy.

Additionally, projects like DFC shall

provide separate dedicated freight lines

to move freight at a higher speed,

which, in turn, will create additional

capacity for freight movement apart

from improving the asset utilisation.

CURRENT SCM & LOGISTICS SCENARIO The growth of container traffic in

the transportation sector has been the

highest in the last 10 years—a fact well

reflected in the continuous increase of

Indian Railways’ container traffic. The

Western DFC will not only connect

all the major ports in Western India

to the hinterland but will also enhance

the movement of container traffic with

a potential of trains running at 100

kmph. This corridor has been planned

to satiate the needs of the running of

double stack containers and is expected

to meet the growing demands of

container traffic upon completion.

Currently serving as MD, Dedicated Freight Corridor Corporation of India Limited (DFCCIL), RK Gupta has taken up a number of challenging projects throughout his career. Prior to joining this position in May 2011, he was heading the prestigious New Line Rail Project in Jammu & Kashmir as Chief Administrative Offi cer, one of the most diffi cult projects in terms of logistics and terrain in the world, as a majority of the alignment passes through tunnels and very high and long bridges. He has also been associated with various Expert Groups including UN-sponsored Expert Group on improvement in ‘Project Management’ on Indian Railways and the UK-sponsored project on ‘Strategies for Bridge Rehabilitation’ on Indian Railways.

CREDENTIALS

18 • SMART LOGISTICS • DECEMBER 2012

DFC has created enough enough opportunitiesopportunities for various for various foreign investors in India“The implementation of this project shall be a game changer that will provide faster movement of freight traffi c on dedicated lines,” explains RK Gupta, MD, Dedicated Freight Corridor Corporation of India Limited (DFCCIL). During an interaction with Arindam Ghosh, this distinguished engineer shares his thoughts on a range of issues related to the Dedicated Freight Corridor ranging from the importance of the project for the logistics sector of the country, challenges, benefi ts and the opportunities the project is going to create. Excerpts…



CHANGES ENVISAGED We are aware of the major

technological developments taking

place in Railways all over the world and

will ensure that we are flexible enough

to incorporate new technologies in

the project. All the contracts of DFC

shall be design and build contracts.

Additionally, the adoption of new

and alternative technology shall be

possible to reduce the overall life

cycle cost of the project and bring in

more efficiency in the maintenance

and operation of the infrastructure.

Also, during construction, mechanised

constructions shall be used to ensure

timely completion and quality of the

project. Mechanised maintenance

along with predictive and preventive

maintenance tools shall be used for

efficient and effective maintenance and

operations of the infrastructure.

MAJOR BENEFITSThe DFC project aims to boost the

Indian economy’s present growth trends

as well as to improve the environment

in terms of logistics and transportation.

This project would accelerate

nationwide economic development,

which, in turn, would widen the scope

for employment opportunities in the

region as well as bring about expansion

and improvement of the market for

farmers in the region. The DFC

Project will also ensure that less energy

will be used for the transportation of

goods. It is expected that greenhouse

gas emissions will reduce by 477

million tonne carbon dioxide over a

period of 30 years according to a study

conducted by Ernst & Young.

CHALLENGES FACEDAll infrastructure projects in the country

involving large land acquisitions are

facing hurdles from land owners. In

spite of the prevailing scenario, DFC

has been able to acquire more than 80%

of the total land requirement, i.e., more

than 10,000 acre, with sustained support

from PMO and active cooperation

of all the state governments. While

there are a few pockets of resistance in

certain localities, we are confident of

achieving our objectives in a planned

and time-bound manner. We are in

the process of seeking environment and

forest clearances in those areas wherein

the DFC alignment is passing through.

CURRENT PROGRESS OF DFCThe loan agreements for funding of

the Bhaupur-Khurja section of Eastern

Corridor with the World Bank and

Rewari and Vadodara section of

Western Corridor with JICA have

already been signed. Procurement for

civil structures and track works has been

initiated and contracts will be in place

during the current financial year. The

timeline for the completion of both

the corridors is March 2017. Under

phased commissioning, the 66-km

double line Mughalsarai-Sonnagar

section on the Eastern Corridor shall

be commissioned by December 2013.

ROLE OF JAPANJapan has played a vital role in terms

of offering financial assistance to the

project. The entire Western Corridor

from Dadri to JNPT via Rewari-

Ahmedabad has been funded by Japan

with a total funding of 679 billion yen.

A loan agreement has already been

signed for 405 billion yen for funding

the Rewari-Vadodara section (Phase-

1 of the Western Corridor), while the

loan agreement for Vadodara-JNPT &

Rewari-Dadri section (Phase-II of the

Western Corridor) for funding of 274

billion yen is expected by this year.

LOT OF OPPORTUNITIES DFC has created enough opportunities

for various foreign investors in India

in areas like management consultancy,

supply of railway equipment and other

goods, steel, etc. Encouragement to

investors can also be given through

a model similar to Delhi Mumbai

Industrial Corridor Development

Corporation wherein the opportunities

created through development of

freight corridor can be used for

the development of infrastructure

conducive for the development of

various industries in the region.

However, there is a need for initiatives

to be taken for funding of these projects

as these are infrastructure projects

which are not only cost intentive but

also have a long gestation period.

[email protected]

Project closest to heartI think DFC is definitely a project which is closest to my heart. No project earlier in Indian Railways or even in the world under infrastructure sector has been taken up on such a scale and size. The implementation of this project shall be a ‘game changer’ that will provide faster movement of freight traffic on dedicated lines. Further, it will create space for the movement of additional passenger traffic and will also provide opportunities for focussed attention on improving the passenger services on Indian Railways.

Leadership mantraI believe, as part of the leadership qualities, one should not consider anybody less important than the other. Everybody has got some capability and it is up to the leader to identify his/her potential and exploit it to the organisation’s advantage. It is also critical for the leader to understand that it is because of the some merit, that the individual is part of the organisation. Further, if a candidate is not meeting the expectation level of the organisation, it is the duty of the leader to guide & advise him and also afford an opportunity to him to come to the opportunity level and excel.

UP CLOSE & PERSONALUP CLOSE & PERSONAL


SPECIAL FOCUS FDI IN RETAILFDI IN RETAIL

FOREIGN and reputed retailers are

closely monitoring the Indian market

and consumers to launch their business

in India through the multi-brand

outlet model. The process—triggered

by the Central Government in 2006 —

allows single brand retail. According to

this process, a retail store is permitted

to sell only one foreign brand. For

instance, Nike can sell its products

through Nike stores and not in any

other brand outlet.

According to a study by AT

Kearney, the Indian retail business

enjoys the second position in the Global

Retail Development Index (GRDI)

exercise for 30 developing economies.

Additionally, other research studies

reveal that the Indian retail industry is

expected to grow at a rate of 14% by

2013. Moreover, AT Kearney’s Retail

Confidence Index places India at par

with other growing economies such as

China and Brazil.

THE FDI MOVE The government moved the FDI in

multi-brand proposal in late 2012.

According to the proposal, stringent

conditions such as 50% of FDI fund

should go into the back end supply

chain infrastructure development

including warehousing, cold storage,

logistics network, manufacturing,

etc., were imposed. The proposal also

extended the norm of sourcing 30%

of their needs from Indian domestic

SMEs. These SMEs should fulfill

the norm of having the business less

than US$1 million at any given point

of time. This move would help win

the confidence of local retail players

as well as Indian supplier SMEs who

believe that the entry of FDI would

disturb the SMEs’ business ecosystem.

However, it has been reported that

many foreign retailers are pressurising

the Indian Government to eliminate

this condition as they do not see India

as a potential sourcing hub in terms of

supply chain effectiveness.

OBSTACLES ALONG THE WAYTill date, the regulatory framework

with respect to retail business remains

unclear and leaves many questions

unanswered. For instance, the eligibility

clause of enterprise under the SME

sector (for sourcing exercise) should

be clearly articulated by the related

framework from the government.

It does not include land cost in the

proposed 50% investments (which is

the highest component in the back end

infrastructure establishment costs) to

be clarified by the government.

Also, it does not give clear

guidelines for foreign investors on the

investment roadmaps, i.e., whether

to allow one time or phased timings

in multi-brand retail financing. The

above points could be some of the

‘noted obstacles’ for bigger players to

see India as a favourable investment

destination.

SIGNALLING POSITIVITIESThe new retail investment at the back

end chains will have some tangible

effects on the supply chain operations.

These include:

Contain the inflation rate

With FDI investments flowing in,

it can only be hoped that it would

Since the last few months, the buzzword in the Indian business environment has certainly been ‘Foreign Direct

Investment in Multi-brand Retail’. It is always a demanding task to justify with the pros and cons of the said strategic move

by the Government of India. On one side, it is the need of the hour to demonstrate India’s capability to the world by attracting

foreign business, while on the other, it is essential to protect the local sentiments of the politics and existing players. Nevertheless, India Inc is

looking forward to FDI in retail, hoping that it would contribute to the business’ growth. In the post-liberalisation economy, FDI fl ow in any growth-oriented industry/sector is becoming imperative and careful operating dimensions are being established across all industries. Here’s offering a 360-degree view of FDI in retail combining all the views expressed by multiple stakeholders.

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Is The Indian Logistics Sector Up For The Challenge?


help contain the inflation rate and

increase the availability of goods at the

requested place.

Supply chain would become customer

focussed

Further, the supply chain will become

more customer focussed. This, in turn,

will prove to be a great learning curve

for Indian players considering that they

have been exhibiting only a cost/profit-

centric approach. Besides, Indian

players would get exposure to global

best practices to achieve enhanced

supply chain efficiency. In a nutshell,

it would lead to professionalism

as the industry is on the growth

track to accept world-class tools and

techniques to be used/customised in

the Indian system.

Growth opportunities for tier I and tier II

service providers

Several tier I and tier II service

providers would avail of growth

opportunities when FDI is in full

swing. This, in turn, would increase

the service quality owing to open

competition in the market.

Velocity of supply chain would improve

dramatically

The velocity of the supply chain

would also improve dramatically due

to visibility across the supply chain—

this is one aspect we need to learn and

imbibe from foreign players. This, in

turn, would pave the way for cold chain

infrastructure and other IT systems to

be in the right place for improving the

performance of the chain.

Opportunities to tap rural business

Also, retail companies hope to earn an

opportunity to tap the rural business

in an extensive way supported by

employment generation. According

to a Technopak report, retail FDI

will create additional nine million

jobs in its journey of GDP growth of

US$3310 bn in 2021. It also endorses

growth in organised retailing to 20%

by 2021 from the existing 7% in 2012.

NONETHELESS, THE DILEMMA CONTINUES…Even after signalling so many positive

signs, there will be confused and mixed

reactions and viewpoints from farmers

on allowing foreign players to go in

for direct sourcing, thereby eliminating

middleman from the supply chain.

There are several assurances from

global players to our farmers. But it is

too early to talk about the cost benefit

ratio of that move.

Further, there are studies indicating

that the country would get the greater

benefit from the tax paying capability of

organised/foreign retail players, which

currently is not at the appreciable level

by the local kirana stores. Ironically,

we are looking at it as a cannibalising

activity rather than as an improvement

task to raise our standards. With

FDI in place, the standards set in the

supply chain delivery process would

always be high.

FDI, IN OUR FAVOUR? Prima facie, FDI in retail seems to

be only in favour of investment in

metro cities. But are our Indian supply

chain professionals ready to face

the challenge and compete with the

benchmarked standards expected by

foreign players? Would FDI always

ensure a positive result? It is a fact that

we are yet to see the whole picture, but

we need to be optimistic.

The sector itself does not enjoy

industry stature and so, the problems

need to be researched in a multi-faceted

manner. The main threat raised by

the players is unbalanced competition

between foreign players and Indian

domestic players, which eventually

would affect the local ones. However,

analysts have a different take on this.

Indians are more comfortable doing

business with next-door kirana stores,

rather than driving to the outskirts

of the city during weekends—a

prominent trend in the West.

Therefore, kiranas will coexist—only

the standard of product delivery and

price will always raise questions. The

end consumers would get the benefit of

fine-tuned price and best delivery, but

these need to be validated as foreign

players may start dictating the terms

to Indian consumers, without even

understanding the market dynamics.

This, in turn, would make the

investment climate collapse. Hence,

strict policies on fund repatriation

steps for foreign players ought to

be established by the government to

protect Indian conditions.

WHAT THE FUTURE BEHOLDS?With India poised to support

e-retailing in a bigger way, the entry

of foreign players in that segment is

also foreseeable. It is high time that

a proper retail policy is established,

which would deter and act on the

obstacles in the supply chain systems.

India is passing through a transition

phase. Hence, it is mandatory to launch

a retail policy through the Ministry of

Commerce to make the supply chain

and distribution system more effective.

Additionally, the government

should also take proactive measures

to stop any activity in the name of

foreign retail, which supports dumping

of goods from the cheaper source.

There is need to ensure that there

is discipline in terms of appreciating

local sources. This can be an

imperative element in the retail policy

framework. By ensuring the same,

the Indian supply chain industry will

undergo a transformation in FDI retail

environment without compromising

on the local touch.

VG Venkatesh is a faculty at Symbiosis

Institute of Operations Management, Nashik

under Symbiosis International University,

Pune. He specialises in SCM and Logistics.

He is a chartered member with Chartered

Institute of Logistics and Transport (CILT)

and APICS (USA).


AT Kearney’s Retail Confi dence Index places India at par with

other growing economies such as China and Brazil.


SPECIAL FOCUS SPECIAL FOCUS COLD CHAIN FOR FAST FOOD RETAILCOLD CHAIN FOR FAST FOOD RETAIL

INDIA’S rising purchasing power,

hectic schedules and the changing

lifestyle aspirations of the youth have

developed a new culture in terms of

appetite—the Indian fast food culture.

And gauging from the current trends,

this fast food culture is here to stay.

This scenario has come as a huge boon

for companies like McDonald’s, Papa

John’s and KFC, who have established

Quick Service Restaurants (QSRs) and

exploited the opportunities to grow

and expand in the country. The final

food products prepared at these QSRs

have a short life span—a fact which

brings to the fore the important role of

cold chains, which are critical to ensure

the longevity of these food products.

Commenting on the importance

of cold chains, Vishal Sharma, VP –

Operations, Radhakrishna Foodland Pvt

Ltd, explains that cold chain assumes

importance as it is critical for extending

the shelf life of products, which are

primarily perishable in nature, thereby

generating higher value. To this, Vipin

Jain, Deputy GM, Indo Arya Central

Transport Ltd, adds, “Cold chain is a

logistics system that provides a series of

facilities for maintaining ideal storage

conditions for temperature-sensitive

materials from the point of origin to

the point of consumption in the food

supply chain. The chain needs to start

from the farm level and cover up to

the consumer level. Given adequate

attention for consumer services, a

well-organised chain reduces spoilage,

retains the quality of harvested products

and guarantees cost-efficient delivery to

the consumer.”

PRACTICES FOLLOWED BY COMPANIESAccording to industry analysts,

integrated cold chains and Supply

Chain Management (SCM) can save

`80,000 crore annually. Further, it will

not only lower the wastage of perishable

horticulture produce, but will also

ensure additional export revenue of

over `25,000 crore. Highlighting

infrastructure as a major challenge for

the expansion of the cold chain segment

in India, Sharma says that in the

country, majority of the cold storages

are designed in an archaic manner and

have been primarily developed for the

storage of potatoes. Complementing

his views, Jain elaborates, “In India,

cold storage still follows conventional

and traditional practices. As a result,

80–85% of storage used only for potato

can occupy only 40% of the storage

capacity.”

Role of cold chain in McDonald’s SCM

From July 1993, much before

McDonald’s started its operations in

India; sincere efforts were made by

Radhakrishna Foodland to carefully

understand McDonald’s operations and

requirements for the Indian market.

Better facilities and infrastructure were

created and new systems were adopted

to satisfy McDonald’s demands.

Finally, all those efforts put in helped it

become the Distribution Centre (DC)

for QSRs of McDonald’s India. The

DC is responsible for procurement,

quality inspection programme, storage,

inventory management, deliveries

to the restaurants, data collection,

recording and reporting. Additionally,

value-added services like repacking of

promotional items are carried out at

the DC. The DC plays a vital role

in maintaining the integrity of the

products throughout the cold chain—

the distribution system that ensures the

products, which arrive at McDonald’s

restaurants from suppliers all over

India, are absolutely fresh and as per

McDonald’s quality standards.

Secondly, Vista Processed Foods

Today, the market for quick service restaurants in India is worth US$13 billion and cold chain has played an important role in furthering its growth in India. It is the cold chain, which extends the freshness of perishable products served at these food joints. According to industry analysts, integrated cold chains and supply chain management can save `80,000 crore annually and even lower the wastage of perishable horticulture produce while ensuring additional export revenue of over `25,000 crore.

ARINDAM GHOSH

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Pvt Ltd, McDonald’s supplier for

its chicken and vegetable range of

products, is another important player

in this cold chain. The technical and

financial support extended by OSI

Industries Inc, USA and McDonald’s

India Pvt Ltd have enabled Vista to

set up world-class infrastructure and

support services. This infrastructure

includes hi-tech refrigeration plants

for manufacturing frozen food at

temperatures as low as -350C. This is

vital to ensure that the frozen food

retains it freshness for a long time.

Giving an in-depth perspective

on the cold chain, Sharma explicates

that in the case of cold chain, each

food material or product is kept under

two temperature zones, viz., chilled

category (wherein the products are

stored at temperatures ranging between

00C and 40C) and frozen category

(wherein the products are stored at

temperatures ranging between -180C

and -40C). According to Sharma, right

from the source, where the product is

picked up to the DC and from the

DC to the retail stores, it is ensured

that the temperatures are constantly

monitored using various electronic

devices and solutions. The vehicles are

pre-cooled to that temperature before

the product is picked up and loaded

onto the truck. Further, the packaging

of items is done in such a manner

that the temperature remains intact.

“We regularly conduct programmes to

train our staff in these operations,” he

says, adding, “We have also designed

strict maintenance schedules for our

equipment and vehicles. Route plans

have been developed for various

stores along with a time schedule

based on the locations.” So, vehicles

carrying products have to follow the

prescribed norms, which ensure that a

fresh product is delivered at the right

location, at the right time.

Highlighting the initiatives taken

at Indo Arya Central Transport Ltd,

Jain avers, “We have developed an

automated multi-product storage

system with the required temperature,

humidity and atmospheric conditions

for specific products. We have

also developed proper checking

and maintenance of data for the

procurement, storage, handling and

safe transportation of the fresh harvest

products. By using modern surveillance

systems and sensors, customers can

have a real-time view of the condition

of their products—right from storage

to supply—on any computer. Hence,

in case of any negligence, technical

failure or variation in temperature, the

retail chain owner and logistics service

provider can immediately be warned,

and thus avert any crisis.”

Elaborating further, Jain states,

“With the growing need to ensure that

the temperature-sensitive products

to be distributed are kept in potent

condition, organisations are in the

pursuit of better solutions to maintain

and monitor cold chains. The success of

implementing cold chain management

involves continual monitoring of

product temperature throughout

distribution and having appropriate

corrective action plans in place. A

streamlined and well maintained cold

chain helps reduce costs, improve

product integrity, increase customer

satisfaction and eliminate wastage.”

THUMBS UP FOR FAST FOOD CHAINS Growing urbanisation has played a

critical role in shifting the consumption

practices and giving the growth of

QSRs a thrust. Also, the market for

fast foods, ‘ready to eat’ meals, frozen

products and pharma products—that

are highly dependent on cold storage

facilities for their higher shelf life—

has given a boost to the development

of cold chain facilities. It therefore

comes as no surprise that Gati, with

an aim to leverage on this opportunity,

is setting up 10 cold storage plants

across the country at an investment of

approximately `200 crore in the next

four years. Also, the government has

taken a lot of initiatives to foster the

development of the cold chain segment

in India. For instance, it has formed

National Centre for Cold Chain

Development (NCCD) to prescribe

technical standards for cold chain

infrastructure for perishable food items,

including fresh fruits & vegetables,

and undertake their periodic revision.

Besides, the government has also:

• Granted infrastructure status to the

cold chain segment

• Reduced customs duty to set up

cold storages to 2.5%

• Exempted all cold chain-related

equipment, like air-conditioning

equipment and refrigeration panels,

along with conveyor belts for

equipment used in cold storages,

etc., from excise duties

• Extended the Viability Gap

Funding Scheme (VGFS) for

Public Private Partnership (PPP)

projects in the setting up of modern

storage capacity. VGFS provides for

financial aid in the form of grants

to infrastructure projects undertaken

through PPP, with a view to make

them commercially viable.

Additionally, with the relaxation of

FDI norms in retail, huge investments

are expected to pour in, which will

further the growth of the fast food

retail and cold chain segment.

[email protected]

The cold chain segment in India is estimated to be at `10,000–15,000 crore. This fi gure is expected to touch `40,000 crore by 2015 with a growth rate of about 20–25%. Presently, the total number of cold storages in India is close to 5,400 with a total installed capacity of 24.45 million MT. Uttar Pradesh and West Bengal account for more than 60% of the cold storage capacity followed by Punjab, Bihar, Gujarat, Andhra Pradesh and Madhya Pradesh. According to CII, India’s cold chain infrastructure will require at least `18,000–20,000 crore worth investments over the next fi ve years to meet this demand.

CURRENT COLD CHAIN SCENARIO


SPECIAL FOCUS SPECIAL FOCUS RETAIL WOESRETAIL WOES

ISSUES pertaining to poor

infrastructure, lack of mature 3PLs and

warehousing have created roadblocks for

the organised retail segment in India.

The organised retail segment in India

faces some major challenges; the most

significant ones include underdeveloped

supply chain, inadequate infrastructure,

complex taxation laws, high levels of

intermediaries and lack of supply chain

visibility. Overcoming these will help

it attain higher economies of scale and

growth.

ISSUES AFFECTING RETAIL SUPPLY CHAIN MANAGEMENT (SCM)Lack of skilled professionalsWhile organised retail is expected to

witness a boom, the supply chain will

take time to develop at the same rate

because of lack of SCM professionals

in the country with even fewer

having any experience in the retail

segment. However, with the growth

of organised retail and with the

increasing number of professional

courses offered in SCM and retail,

the number of SCM professionals is

gradually focussing more towards a

scientific methodology in dealing with

the back end supply chain.

Infrastructure woesInvestments in road infrastructure have

not kept pace with the growth in road

traffic. Most parts of India still do

not have roads—the most used form

of transportation—a major problem

for the sector. According to a supply

chain expert, “The infrastructure in

India needs a facelift; otherwise, it is

almost impossible to have a seamless

supply chain. The retail segment

majorly depends on timeliness,

which makes the need for good

infrastructure all the more apparent.

Major investments are needed when

we speak about this challenge. Now

that FDI is coming in, we hope to see

some major changes and development

in back-end infrastructure; we have to

wait and watch.”

Lagging 3PL servicesThe gap between the expectations and

the actual level of services provided,

and prices charged by the 3PLs are the

primary reasons why more companies

are not looking at outsourcing their

logistics to 3PLs.

Competition from unorganised sectorOrganised retailers face tough

competition from the unorganised

retailers or mom-and-pop stores that

cater to the customers within their

neighbourhood. The unorganised retail

sector constitutes more than 90% of

India’s total retail segment and thus,

poses a serious hurdle for organised

retailers.

High real estate costsThe ever-increasing real estate prices

The industry believes that the success mantra for retail is nothing but being there ‘at the right place, at the right time’. So, for any retail venture to fl ourish, one of the must haves is undoubtedly an effi cient and well established supply chain. However, Indian retail is still at a very nascent stage. Experts are, however, of the view that a consolidation of the necessary government policies, understanding the fast-changing consumer preferences and major investments will lead to a distinguished supply chain revolution in the near future.

NISHI RATH

• Inadequacies in infrastructure like lack of proper road connectivity, power shortages and insuffi cient storage spaces

• Rise in property prices and rentals are also a hindrance for some retail business

• Multiple taxes and lack of clear policies

• Shortage of skilled professionals in areas like supply chain and store management

MAJOR CHALLENGES INDIAN RETAIL INDUSTRY FACES

Needed: Timely Attention

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have affected many new entrants in

the sector, which leads to delays in

opening stores. This has now led

retailers to look for other options

like tier II and tier III cities. The

profitability of retail companies were

affected severely because real estate

costs constituted a major part of their

operating expenses. Now, companies

are moving out from prominent malls

of metros and tier I cities and are

focussing on setting up shops in other

developing cities.

Supply chain inefficienciesThe supply chain needs to be managed

efficiently because it has a direct

impact on a company’s bottom line.

Inventory management is the first

challenge that retailers face at the

local store as well as at the warehouse

levels. Excess inventory often leads

to an increase in inventory costs, and

then, to lower profits. Commenting on

the same, Naveen Chopra, Director,

Vodafone Business Services, says,

“The Indian logistics sector trails

other major markets on several

efficiency indicators. Physical transport

infrastructure, customs clearance

processes, inventory management

processes and adoption of IT &

advanced communication technologies

are some of the many parameters

where it significantly lags behind.”

Logistics is another challenge

related to the supply chain. It is

imperative for any organised food and

grocery retailer to establish a robust

cold chain, which is not the case when

it comes to India.

Until and unless organised

retailers fully develop integrated cold

chains, they would continue to incur

considerable losses through wastage of

perishable items while moving huge

quantities from one place to another.

Procurement also poses another

challenge for the sector. The main

challenge here is to procure adequate

amount of stock according to customer

requirements, failing which the

resultant rise in inventory can affect

bottom lines.

POOL POINT NETWORK CAN SOLVE VARIOUS CHALLENGESRetail SCM is a tough labyrinth to

pass. This involves getting the product

from the right vendors to the right

customers while minimising inventory

levels, warehousing and transportation

costs. Here, retailers have to cross the

thin line of having enough inventories

to avoid stock outs, while also keeping

inventories low enough to minimise

the carrying costs. This also includes

responding to the evolving consumer

demands without losing out to

competition.

According to experts, there is

a way to keep these problems at

bay—the utilisation of pool points

for distribution, which is sometimes

referred to as cross-docking. Retailers

with high and quick flow through can

also opt for this kind of distribution as

mixing centres. The pool point process

starts by figuring out where to source

the products required. Many products

are often being sourced offshore,

which needs longer lead times and

larger amount of inventory. The goal

can be having the offshore product

containerised so that it could arrive at a

deconsolidation centre to be delivered

directly to store through the network

of pool points. On the domestic side,

the goal can be to have the vendor

pull product and palletise the orders

by store so that those products could

be optimised for store direct delivery

through pool points. This, in turn,

could eliminate the need to carry

inventory in the distribution centres.

HOW ‘IT’ CAN ALSO HELP The major problem the retail segment

faces is that of forecasting the

requirements of inventory. Due to lack

of proper IT implementation, the data

is not available at the appropriate time.

Even if the data is available, there is

no sufficient technical competency to

analyse this data to derive meaningful

insights. This results in an increase in

the number of stock outs, increased

mark downs, low inventory turns

and high pilferage rate. Elaborating

further, Asif Merchant, MD, Catwalk

Worldwide, avers, “Technology is one

of the most important inputs to have

in order to attain a robust supply chain.

We have invested a lot in technology

and that is one of our keys to success.”

IT in SCM has helped retailers plan

their stock outs, replenish their stock

on time, move stock from warehouse

to stores and maintain adequate stock

to cater to consumer preferences,

among others.

THE WAY FORWARD The organised retail segment in India is

still at a very nascent stage. Nonetheless,

it has the potential to present retailers

a plethora of opportunities. In the near

future, there are several steps that any

retailer would have to take in order to

ensure an effective supply chain for their

business to grow. First and foremost,

there should be IT implementation

to ensure that only the required amount

of inventory is ordered. Besides,

there should be a mechanism to link

all the different segments of the chain

with each other. In addition, there is a

need to be responsive to the demands

of the segments.

Parts of the value chain may be

outsourced to a 3PL, while a retailer

can also look into backward integration

for critical areas. On a long-term

basis, there would be a need to build

a flexible supply chain, which would

be capable of responding to changes

in demand, supply and technology.

[email protected]

Investment in a retail supply chain lies in the areas of sourcing, distribution centres (warehouse, cold storage), transportation networks, inventory (both store level and warehouse), supply chain information systems such as warehouse management systems, planning, forecasting and inventory management, among others.

KEY AREAS OF INVESTMENT


THERE are various potential growth

estimates for retailing in India.

Substantiating the same are the several

reports from consulting companies

such as McKinsey, PwC, Deloitte and

indices such as AT Kearney’s Annual

Global Retail Development Index

(GRDI), which have all predicted

robust growth figures for India during

the next decade.

IN THE PRESENT SCENARIO IN INDIA…India is already home to several

organised retailers such as Food Bazaar,

Reliance, Pantaloon and Shoppers

Stop, which have been successfully

operating in the country. And there are

estimates that organised retailing will

pick up steam due to various factors

and will grow beyond 10% soon. The

unorganised retail sector dominates

with over 94% of India’s total retail

sector. It consists of over 13 million

kirana stores and presently employs

about 40 million people. With this as

the backdrop, the new entrants will

definitely face tough competition from

local organised as well as unorganised

retailers, i.e., the kirana shops.

GLOBAL RETAIL LOGISTICS SCENARIOThe main objective of any retailer is

to provide the right products of the

right quality in the right quantity to

the right customers at the right time,

at the right place and finally, at the

right cost. Thus, the retail logistics is

asset intensive, involves software and

intelligent devices such as pallets,

cases, trailers with RF tags, personnel

with mobile devices, RF tags/sensors

on assets such as trailers, rail cars and

ships, mobile devices and B2B hubs

for EDI transactions. Apart from the

credit card, loyalty cards and POS data,

social networking and personalised

websites combined with Internet

search and social network data analysis

offer a whole new way of reaching out

to customers. These impact logistics as

customer demands spur orders.

Efficient consumer response,

Collaborative Planning, Forecasting

and Replenishment (CPFR), cross

docking, Distribution Centres (DCs)

with Warehouse Management

Software (WMS), vehicles with Global

Positioning System (GPS) & managed

by Transport Management Software

(TMS) and finally, shelf management

by the vendors are all practices followed

by retailers. Thus, the retail logistics

sector involves an array of participants—

manufacturers, retailers, distributors;

third-party logistics providers (3PLs),

4PLs, and freight forwarders, logistics

hubs at airports, sea ports and rail

terminals and regulatory authorities

including customs.

With the emergence of Internet

as a medium of choice for consumer

shopping, the fulfillment, i.e., the

delivery of goods to the customer

requires attention. The retailer has to

now take responsibility for what was

With the recent decision of the government to allow FDI in multi-brand retail, the focus of the Indian industry will gradually veer towards retail. While India has been consistently ranked as the most attractive investment destination for retail among the emerging markets way before the onset of the fi nancial crisis, hopefully, foreign retailers such as Wal-Mart, Target and Tesco, among others, will soon open their stores in urban India.

OpportunitiesOpportunitiesin Disguise?in Disguise?

SPECIAL FOCUS SPECIAL FOCUS RETAILING CHALLENGES & FDIRETAILING CHALLENGES & FDI

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previously done by the consumer.

There are several order fulfillment

practices that Internet retailers follow.

The smallest online retailers stock

and fill orders from their companies.

Some retailers that fill hundreds or

thousands of orders per day often rely

on distributors or manufacturers to

ship for them. Very large retailers are

opting to run their own DCs, which

require multimillion-dollar investments

in warehouses and logistics technology.

The fastest-growing option, however,

is to hire an independent fulfillment

house to store goods and provide ‘pick,

pack and ship’ services.

NEED TO IMPROVE RETAIL LOGISTICS IN INDIAGiven the sophisticated logistics

systems available globally and the

awareness of the benefits they

provide for the consumers, the main

question is can retailers operating

in India, irrespective of their origin

and experience with these systems

elsewhere, import these techniques

and technologies for the benefit of

the Indian consumer? Given that food

accounting for over 50% of total retail

and the demand of clothes, jewellery

and other fashion items being seasonal

(depends on festivals and auspicious

months for marriages), retailers may not

be able to innovate or solve problems

in India using the same methodologies

that they used in other countries. They

need to think differently. They need

the cooperation of all the stakeholders,

in particular, the state and central

governments, industrial and social

organisations, NGOs, regulators,

R&D and educational institutes &

logistics service providers.

Indian organised retail has an

efficient supply chain as compared

to the unorganised sector. At the

international level, the organised

Indian retailers fall short of

international retailers. The reasons

are many and have to quickly resolved

with the intervention of the central

and state governments. The retail

sector is yet to gain the recognition

of an industry; access to credit is an

issue. Lack of basic infrastructure

such as roads, warehouses, cold chain

infrastructure, and skilled labour

hamper the development of state-

of-the-art retailing in India. Thus,

the existing players have to invest

substantial amounts of money and

time in building facilities such as

warehouses cold chain network and

training manpower.

CHALLENGES & STRATEGIC SOLUTIONSResearch in Indian retailing is not

done in educational institutions,

which, in turn, creates a vacuum

in terms of innovations. Hence,

companies try to either imitate the

manufacturing industry practices or

depend on consultants who generally

suggest their experiences elsewhere in

the world. However, there are many

topics that need attention. Some of

these include:

• In India, nearly 61% of the cargo is

transported by road, 30% by rail and

the rest by air, pipelines and inland

waterways. It is a known fact that

movement of long haul bulk traffic

by road is less efficient than by rail.

However, road is still preferred over

rail because rail freight tariffs are

high. Moreover, Indian Railways

follows a policy of subsidising

passenger tariff by freight tariff;

rail terminals have no cross docking

facilities and the quality is poor;

and finally, railways permits only

full train loads from origin to

destination. On the other hand, the

trucking industry is fragmented with

70% of truck owners having only

1–5 trucks, interstate check points

and corruption. Time has come for

the government to intervene and

change the scenario. The state of

DCs should be located along the

path of goods flow for storage of all

goods that are needed in the region/

town/part of the city, thereby

creating economies of scale. Goods

can be distributed to retail stores

using battery-powered vehicles.

Also, it is time to create logistics

hubs in Central India in regions

such as Nagpur, Hyderabad, etc.,

so that cross docking can be done

to create efficiencies in logistics.

• Procurement and inventory

management of food and other items

both from within and outside the

country is a big challenge. Retailers

may face problems both at the local

store as well as warehouse levels

and may incur considerable wastage

of perishable items while moving

huge quantities from one place to

another. Also, economies of scale

can be a factor in procurement. A

way in which some companies can

create efficiencies is by outsourcing

transportation, warehousing and

inventory management.

• Finally, there is a need to improve

kirana stores, small transporters as

well as Small & Medium Businesses

(SMBs) through mentoring and

orchestration. This has to be done

through careful social networking

and transparency so that companies

do not misunderstand this to be a

move to take over or cripple them

in the bargain. The small players

need to be trained to produce goods

& services needed and help them

connect to the large retailers. The

orchestrator can bring orders for

apparel or pharma or grocery items

from big retailers and can distribute

the production among SMBs

while taking responsibility for the

final delivery. Several successful

examples such as Li & Fung, Olam

International exist today and these

can be followed in the agri & apparel

sectors in India for Indian retailers.

All said and done, retail logistics

also called as the last mile delivery is

an important topic that needs national

attention by the governments, industry

and academics.

Professor N Viswanadham, Computer Science

and Automation, Indian Institute of Science,

Bangalore


SPECIAL FOCUS SPECIAL FOCUS FDI IN RETAIL STRATEGIESFDI IN RETAIL STRATEGIES

INDUSTRY leaders in India have

invested heavily over the past 4–5

years, but the growth does not justify

these investments. Profitability is still

in the red for most and the pressure

of expansion is stronger than before.

Several devised strategies turned out

to be value killers for Indian retail, as

a lot of complexity was built in when

setting up the first generation supply

chain. Companies tried to replicate

international infrastructure and

technology operating models without

adequate due diligence while trying to

design a ‘one-size-fits-all’ supply chain

footprint. The immediate focus for

managers was transactional gains with

sourcing partners, rather than a judicious

future plan with branded players and

a well laid out private label strategy.

Another roadblock disturbing industry

leaders is blocking working capital

and ending up building inventory to

counter stock outs. In short, they must

now look for judicious investments and

rethink their whole approach to bring

innovation that matches the recent

changes in the retail landscape.

AMID PROBLEMS, OPTIMISM PREVAILS In India, slow and non-profitable

growth in existing retail chains

can be attributed to poor back end

infrastructure and weak supply chain

management. Also, lack of investment

in the logistics part is creating

inefficiencies in the food supply chain.

The government, with its FDI

directives, has placed substantial focus

on streamlining capital inflow and

investments in supply chains. FDI

will open the gates to foreign retail

majors who will need to leverage and

customise their decades of experience,

technology and management practices

in ensuring an efficient supply chain.

FDI in the retail industry will increase

the competition at the domestic level

and as the competition increases,

competitors will be compelled to

improve their quality of service at a

reasonable price. This will invariably

call for reinventing front end as well as

back end operations of the retail chain.

UNIQUE STRATEGIES Smart managers should focus on the

following key strategies to ensure that

they invest right in future and generate

higher returns on existing ones:

Delayed differentiation in supply chain:

A category-specific product mix is

built-to-stock and the point of commit

is closer to the consumption base. This

will not only maximise the service levels

but will also improve responsiveness.

Revisit autonomy of operations: As

retailers grow across the country

spurred by the growth in sourcing

hubs and suppliers, it is important to

provide autonomy to regions so that

they can partially decide on their

sourcing needs based on pre-defined

quality parameters.

Collaborative planning: Collaborate

with suppliers over an extended

planning horizon. This can provide

competitive advantages in product

development, alignment of marketing

programmes and managing life cycle

of assortments effectively.

Balance variable and fixed costs:

Developing a variable cost structure

in place of fixed cost will be a viable

solution for modern retail. This will

require judicious selection of ‘hard

assets’ and right costing of investment.

Consortium buying: Consortium within

the supply chain presents a win-win

situation with a proper benefit sharing

model. The partners should be selected

based on alignment of strategic goals

and value proposition. Internationally,

players join hands with their suppliers

and competition for joint sourcing of

raw material and packaging material.

Leverage technology infrastructure:

Retail is about customer experience,

managing material and information

flow. Technology is more than just

an enabler in retail and with strong

analytics usage to design customised

consumer offerings, run smart

promotions, manage social media, plan

effectively with supply chain partners,

predict stock-ins etc., retailers will get

substantial results.

Players who find the right solutions

to some of the above issues will

be able to strike the right balance

between investment and growth

with profitability.

Rajeev Singh, Executive Director, Operations

Consulting Practice, PwC India with inputs

from Rajat Mahajan, Managing Consultant,

Operations Consulting Practice, PwC India

Existing players in multi-brand retail in India are struggling to achieve growth, profi tability and cost competitiveness. To survive, some are trying to reinvent themselves by challenging established retail practices. With the change in FDI policy, it is the right time for new entrants to understand the importance of strong back end operations for sustainable growth in the emerging Indian retail landscape.

It’s Time To Take TheDip S ick Test


SPECIAL FOCUS SPECIAL FOCUS LSPLSPss IN RETAIL IN RETAIL

“OPPORTUNITIES are often things

you haven’t noticed the first time

around,” Catherine Deneuve, a well

known French actress, has rightly said.

The opportunities that FDI in retail

can bring in were overlooked by many,

but the government recently argued

that FDI in multi-brand retail will

create a win-win situation for all the

stakeholders. While addressing the

annual general meeting of Federation

of Indian Chambers of Commerce

and Industry (FICCI), Hon’ble Prime

Minister Shri Manmohan Singh

recently said that the steps taken by the

government were only the beginning

of a process to revive the economy and

take it back to its growth rate of 8–9%.

“Our decision on FDI in multi-brand

retail, civil aviation, power trading

exchanges and broadcasting must

also be viewed in this larger context,”

said the Hon’ble Prime Minister while

speaking about the challenges on

the fiscal deficit front and the global

economic environment.

This came against the backdrop of

the government’s

recent victory in

Parliament, when the Opposition’s

resolution moved against FDI

in retail was voted out. Now,

Logistics Service Providers (LSPs)

believe that a basket of opportunities

will accompany the inflow of FDI

in retail, scale and distribution

network. A lot of preparation on

the part of LSPs will have to be

made. This, in turn, would call

for a flood of investments. Therefore,

for the next 5–10 years, the

logistics sector will remain a gold mine

for investors.

STAY TUNED FOR ORGANISED BACK-END LSPs believe

that the policy

change will

create a demand

for effective

logistics and

services to meet supply chain demands.

Also, with global players looking at

entering India, there will be a demand

for efficient and global standard

supply chain solutions. Elaborating

Logistics Service Providers (LSPs) are predicting an opportunity in the growth projected for the organised retail market to 20% of the total retail market by 2020 from the present 7%. Reason: Foreign Direct Investment (FDI) in

retail has fi nally got the green signal. Though many are of the view that this might open the Pandora’s box, LSPs believe that this might be a great opportunity to grow and develop the back-end.

NISHI RATH

Cashing in on the FDI Opportunity

According to experts, the presence of organised retail

would result in a shift from the legacy supply chain to mom-

and-pop outlets to a scenario where multi-store formats will take control of warehousing

and distribution activities, thus resulting in consolidation of

services.


further, Kapil Premchandani, MD,

KD Supply Chain Solutions Pvt Ltd,

explains, “FDI in organised retail

will give a thrust front-end change,

which, in turn, will result in the

need for organised back-end. From

transportation to warehousing to

packaging, almost every segment is

expected to experience the impact.” He

adds that the move will help the back-

end get better and improve the entire

supply chain. The impact of FDI

would be witnessed across the logistics

infrastructure and services segments.

According to experts, the presence

of organised retail would result in a

shift from the legacy supply chain to

mom-and-pop outlets to a scenario

where multi-store formats will

take control of warehousing and

distribution activities, thus resulting

in consolidation of services. The

augmented organised retail sector

will also attract global LSPs to tap

the opportunities. According to a

logistics professional, “This, in turn,

will create a demand for bigger and

modern warehouse formats with

retail warehousing commanding a

larger share than what it is at present.

Though it is early to talk about various

strategies to be taken, the LSPs would

look at expanding their range of

services as companies are now looking

for more than just transportation of

their products and raw materials.”

As is the practice with organised

retail chains, most of their logistics

activities will be outsourced. Thus,

LSPs and 3PL players are looking

forward to grab their share of the FDI

in retail pie. Commenting on the same,

Devdip Purkayastha, President, CHEP

India, elaborates, “Logistics providers

and real estate will immensely benefit

from the whole move as the retailers

will not keep everything to themselves.

Additionally, most of the physical part

will be outsourced, which will come

across as more opportunities.” The

country’s retail environment has, so far,

been dominated by the unorganised

segment, which has several challenges

on the logistics front. However now,

LSPs believe that this will be a positive

step to cut down on losses, wastage

and inefficiency.

TACKLING WAREHOUSING ISSUESInadequate warehousing is one of the

major bottlenecks faced by the entire

supply chain structure. According

to statistics, the present agriculture

warehousing capacity at 108 million

tonne is short of the requirement by

about 25 MT. The Confederation of

Indian Industry (CII) estimates that

the shortfall in warehousing capacity

for the next five years is expected

to be about 40 million tonne at the

current rate of production. However,

the government is targeting to create

about 35 million tonne of new capacity

in the next five years, involving an

investment of `14,390 crore. The

shortfall is even more acute for cold

storage facilities.

CHALLENGES AHEAD Though FDI in retail is expected to

open up various opportunities for the

logistics industry, there are several

challenges that need to be addressed

in order to capitalise on the retail

escalation. The cost of logistics for a

retail chain, as a percentage of the cost

of goods sold, is estimated to be about

5% according to global estimates.

However, in India, logistics costs as a

share of Cost Of Goods Sold (COGS)

are 3–5 times higher.

“Though the whole concept

is lucrative and has various

opportunities, it will be a challenge for

logistics infrastructure to grow rapidly

to meet the demands of the global

brands,” opines S Kannan, CFO,

Arvind Lifestyle Brands Ltd & Arvind

Retail Ltd.

India is the world’s largest producer

of fruits and vegetables; has the largest

area under wheat, rice & cotton and is

the second largest producer of rice and

wheat. That is the good news. But, at

the other end of the spectrum, India

loses about `50,000 crore annually

merely on account of frail post-harvest

infrastructure. To truly cash in on the

opportunity, the challenge would be

to manage the complex retail supply

chain cost efficiently without wastage

and time delays. As global players will

look at outsourcing various services

to enter India, the demand for end-

to-end and integrated supply chain

models will be required. This, in turn,

will lead to further improvement.

TRANSFORMATION PREDICTEDFDI in retail and the anticipated

plan to roll out the Goods & Services

Tax (GST) is said to give a makeover

to the transport and logistics landscape

in India. The industry is of the view

that with FDI and GST in place,

the way the country presently stores,

transports and delivers its goods will

change for good.

[email protected]

The Indian retail market—which was approximately worth $220 billion in 2005—is now expected to hit $700 billion by 2015, with a CAGR of about 12%. Modern or organised retail is growing at a fast clip, with a CAGR of about 21%. The sophisticated front-end that international players are likely to bring will boost investment in infrastructure by retail players, third-party supply chain companies and the government. This will improve effi ciencies in the supply chain, cut wastage, increase effi ciency and bring down consumer prices.

RETAIL SECTOR TO GROW AT A CAGR OF 12%

Logistics Service Providers (LSPs) believe that a basket of opportunities will accompany

the infl ow of FDI in retail, scale and distribution network. A lot of preparation on the part of LSPs

will have to be made.


FMCG FMCG SUPPLY CHAIN FLEXIBILITY SUPPLY CHAIN FLEXIBILITY

OVER the past few decades, Fast

Moving Consumer Goods (FMCG)

companies have been forced to react

to a multitude of changing market

dynamics. The mergers and acquisitions

era created strong competitors and

rapid growth for many companies but

resulted in complex and costly logistics

infrastructures. And, the growth in big

box retailing and e-commerce placed

increased attention on the consumer

shopping experience, creating a shift

in the balance of power from the

manufacturer to the retailer.

At the same time, the technology

and manufacturing boom was giving

rise to developing economies in Asia

and Latin America, creating new

consumers and growth opportunities

for FMCG manufacturers and retailers

alike. While top-line growth was

enticing in these emerging markets, lack

of infrastructure, dispersed populations

and cultural nuances created challenges

for even the best manufacturing and

logistics planners seeking to establish

operations and capture market share

quickly and profitably.

While each of these dynamics

influenced how FMCG manufacturers

and retailers went to market, the

economic fluctuations experienced

around the world in recent years have

most dramatically impacted growth

and operating strategies.

SUPPLY CHAIN IMPACTS OF EVOLVING CONSUMER & RETAILER NEEDSWhile fast moving consumer goods

fared better than most industries

during the economic downturn,

manufacturers are still faced with

unpredictable consumer demand and

strong competitors, increasing retailer

requirements, rising commodity costs,

volatile fuel costs and pressures to

reduce carbon emissions. In addition,

unique infrastructure challenges create

efficiency obstacles for operations in

both mature and emerging markets.

In mature markets, consumer

goods manufacturing and supply chain

operations are well established, but

that brings as many issues as benefits.

Existing manufacturing operations

were designed to utilise standard high-

volume, highly automated equipment

to maximise productivity and capital

investments and reduce labour costs.

Corresponding supply chain goals

The consumer dynamics created in both developed and emerging markets by the global economic crisis are likely to stay. As retail channels proliferate and retailers mount new strategies to capture market share and extend geographic reach, FMCG manufacturers need more fl exible supply chain solutions that better position them to capitalise on new revenue and market share growth opportunities. The supply chain strategies outlined here not only deliver the fl exibility and cost effi ciency that the dynamic retail channels demand, but also create the foundation for improvements in quality and service that lead to a more sustainable competitive position.

Unravelling PackagingUnravelling Packaging and and Distribution Distribution Efficiency OpportunitiesEfficiency Opportunities


were to use standard package sizes

shipped in truckload quantities to

minimise transportation costs, support

mechanised distribution centres

and reduce labour costs. ‘Smaller’,

‘customised’ and ‘highly differentiated’

do not work well with these legacy

operations. Figure 1 illustrates a

traditional distribution supply chain in

a mature market.

The growth of modern retail channels

in emerging markets will eventually

benefit FMCG companies operating

in these regions, offering distribution

synergies and sales channels more

aligned to their production capabilities.

Today, however, it adds complexity

to an already tenuous situation. In

addition to using local distributors to

get product to markets and local retail

outlets, FMCG manufacturers are now

challenged to meet the needs of an

even more diverse retail channel mix.

And, of course, manufacturing quality

and product safety remain a concern

and challenge, particularly in remote or

unstable regions. Manufacturers in all

parts of the world are looking for better

ways to meet retailer and consumer

needs, including:

• Cost-ef fect ive ly adapt ing

manufacturing and packaging

processes for point-of-sale

customisation and differentiation

• Optimising the supply chain

network and organising deliveries

to support smaller, more frequent

orders

• Introducing flexibility into complex,

high-cost supply chains

These objectives can be

accomplished through improved

manufacturing and distribution supply

chain strategies. While FMCG supply

chains have continued to evolve,

opportunities remain to profitably

meet new challenges. As retailers and

consumers in emerging markets follow

the lead of modern trade in mature

markets, manufacturers can look to

some of these same efficiency and

productivity opportunities to capitalise

on new sales growth.

STRATEGIES FOR CREATING MORE RESPONSIVE, EFFICIENT AND COST-EFFECTIVE FMCG SUPPLY CHAINSHere are four supply chain strategies

that can help manufacturers meet new

market demands, while also satisfying

their own requirements to operate

efficiently and support growth:

• Outsourcing Primary Packaging

(Contract Manufacturing)

• Optimising Secondary Packaging

(Co-packing) Locations

• Regionalisation of Distribution

Networks

• Horizontal Collaboration

These strategies can be used

individually or together as part of

an integrated solution that simplifies

and drives costs from FMCG supply

chains. While these practices are

not new, to benefit all parties in the

FMCG supply chain, they need to be

better integrated and streamlined from

design through execution. Here’s how:

STRATEGY 1Outsourcing Primary PackagingAlthough the outsourcing of primary

packaging, also referred to as contract

manufacturing, has been around for

decades, it is experiencing renewed

interest from companies entering

emerging markets and those trying

to streamline existing operations in

mature markets. In many emerging

markets, FMCG companies have

already utilised contract manufacturers

as a means to enter the market since,

initially, there is insufficient demand

to require a dedicated manufacturing

facility. In mature markets, the shift

to smaller, more frequent, customised

orders requires shorter production

runs or specialty equipment that is not

available on all manufacturing lines.

In either scenario, manufacturing

and packaging processes for some

consumer goods can be outsourced

to an appropriately equipped and

qualified distribution centre to

bring the product closer to the end

customer. Outsourcing manufacturing

can increase asset utilisation, reduce

new capital investments, help

facilitate product packaging based

on regionalised demand and provide

greater flexibility in responding to

the changing marketplace. With

this strategy, the manufacturer ships

bulk product or ingredients to the

production facility or distribution

centre, where it is mixed, if needed,

and packaged into smaller containers.

This is a very flexible strategy that

provides retailers with the different

package sizes they require, including

the smaller packaging sizes for

convenience and dollar stores.

For the FMCG manufacturer,

outsourcing saves costs and provides

flexibility for both operations and

marketing. Outsourcing reduces

the time and complexity required

to change manufacturing lines that

support product launches or shorter

promotional runs. And flexibility can

increase by shifting primary packaging

into the distribution centre network,

since final packaging decisions can

be postponed until closer to the end

consumer. This allows marketers

Figure 1: Traditional FMCG supply chain network


to delay decisions on product

customisation based on distinct

demographic or cultural differences.

In the end, the product moves less

frequently, the transportation costs are

reduced and the product is packaged

closer to the local distribution points.

STRATEGY 2Optimising Secondary Packaging LocationsWarehouse club stores have long used

customised displays and promotional

packaging as merchandising tactics

to attract customers. However, this

strategy has proliferated as major

retailers are increasing their use of

customised packaging, product sizes and

promotional bundles to differentiate

themselves in the marketplace.

With the rate of customisation

on the rise, secondary packaging has

become an important competitive

advantage in the FMCG supply

chain, because it supports product

promotions and provides the ability to

vary pack sizes by repackaging finished

goods into multipacks, assortments

and bundles, as well as to set up

special store displays. Demographic-

based customisation also provides

FMCG manufacturers an opportunity

to compete against private labels by

assembling products in more appealing

value or combination packs to create

increased shelf differentiation.

The secondary packaging process

can be inefficient and costly, since

many manufacturers ship product

out to co-packers for customisation,

who then ship it back to the plant

or a distribution centre. For these

companies, consolidating secondary

packaging operations into an existing

facility allows them to postpone

customisation closer to consumption

and avoid adding steps and time to

the production process. This helps

reduce order lead times, avoid carrying

unnecessary inventory, enables just-

in-time shipment of floor-ready

displays and products for advertised

promotions and can result in less SKU

and material obsolescence.

Co-locating secondary packaging in

an existing distribution or manufacturing

location also eliminates transportation

to and from the co-packer, thus

reducing carbon emissions, minimising

transportation costs and eliminating

potential product damage. Additional

overhead cost savings can be achieved

through improved facility use and

eliminating resource redundancy,

particularly in campus operations where

trained labour is readily available to

support special projects.

By using resources from within

the campus, the manufacturer can

avoid maintaining extra staff to

support co-pack projects or hiring less

productive temporary labour. Also,

product security and visibility can be

better controlled when the product

moves less frequently, particularly in

emerging markets where counterfeiting

and theft are growing concerns.

STRATEGY 3Regionalisation of Distribution NetworksIn mature and emerging markets,

many top FMCG manufacturers

have moved away from a centralised

distribution model in favour of a

Regional Distribution Centre (RDC)

network or cross-dock network that

positions product closer to customers.

This strategy enables shorter order

lead times, which allows retail

customers to respond quicker to

fluctuating consumer demand. It also

reduces retail store inventory, product

obsolescence and security burdens that

come with managing large volumes of

products in some regions.

Manufacturers can reduce both

inbound and outbound transportation

costs by locating RDCs or cross-

docks near the plant or in campus

operations that provide access to

intermodal facilities. Campus-based

sites also offer additional space,

flexible labour availability and the

opportunity for multi-manufacturer

collaboration for shared warehousing

and transportation, as shown in Figure

2. While some FMCG companies

already have RDC networks in place,

the existing locations may be the result

of acquisitions or facilities built for

distinct product lines. These companies

may consolidate into fewer, larger

RDCs in more strategic locations for

greater efficiency & savings.

STRATEGY 4Horizontal CollaborationHorizontal supply chain collaboration

among FMCG manufacturers

involves sharing warehouse space

and consolidating smaller shipment

of multiple manufacturers into more

economical truckload shipment going

to the same retail customer. In many

emerging markets, collaboration is a

cost-efficient way to establish and serve

Supply chain flexibility, continued

Figure 2: Regional campus operation


remote areas that have low population

density or infrastructure challenges.

And in mature markets, it can help

meet the demands of the retailer as

order and shipment sizes shrink.

This type of strategic collaboration

between FMCG manufacturers to

reduce costs and improve efficiencies is

an idea that has been around for some

time. However, competitive concerns

as well as cost- and savings-sharing

complexities have stalled progress.

Manufacturers across the world are now

looking seriously at collaboration as a

way to drive supply chain efficiencies,

share costs and reduce carbon emissions

in support of sustainability strategies.

The first area of focus is typically

collaborative freight consolidation.

Manufacturers can save significant

costs on the smaller, more frequent

deliveries that retailers are increasingly

demanding—or in emerging markets

where stores have less shelf space and

consumer demand is still building.

Shared warehousing provides each

manufacturer the flexibility, because

space can be configured to meet

fluctuations in demand, which results

in greater optimisation of assets.

Value-added services such as

packaging, consolidation and merge-

in-transit can also be provided. The

cross-docking capability is particularly

beneficial for manufacturers who

fulfill retail orders from multiple

plants in smaller quantities. By

merging shipment at cross-docks,

manufacturers reduce transportation

costs and decrease stock transfers while

retailers achieve receiving synergies.

With enough volume and

coordination, ‘store-ready’ pallets

can be built. This decreases retail

receiving costs by allowing shipment to

bypass the retail DC and be delivered

in truckload quantities directly to

the store. Collaboration can also

be a particularly effective strategy

for mid-sized manufacturers that

struggle to meet retailer requirements

without incurring additional costs.

Collaboration offers the economies of

scale needed to procure flexible storage,

packaging and transportation solutions.

INTEGRATING STRATEGIES FOR A MORE STREAMLINED SUPPLY CHAINWith the new reality of smaller, more

frequent shipment, shorter lead times

and fluctuating economic conditions,

price-driven logistics decisions that

do not anticipate and support quick

response to consumer and retailer

expectations can do more harm

than good. Traditional approaches

of bidding out individual locations

or services can take costs out of the

business in the short term and offer

immediate business impact. However,

in the long term, managing multiple

suppliers with limited integration and

connectivity can result in additional

administrative costs and inefficiencies.

In emerging markets, where

securing accurate cost, service and

product data is already challenging,

buying transportation, warehousing,

packaging and other services separately

creates even greater inventory and

visibility challenges. And with multiple

suppliers, trying to apply standard

operating procedures or trace product

damages becomes increasingly difficult.

Figure 3 demonstrates a streamlined

supply chain network provided by a

single service provider.

In the end, if products are moving

more frequently or service levels cannot

be met due to the longer lead time

required to make these extra moves

between manufacturing, packaging and

distribution partners, the impact may

be higher total landed costs and lost

sales for both FMCG manufacturers

and retailers.

STRATEGIC ROLE OF THIRD-PARTY SUPPLY CHAIN PARTNERSAchieving optimal efficiency takes

knowledge and control over all the

moving parts of a supply chain. Having

a partner with the knowledge and the

resources available to support these

challenges is critical to achieve sales and

profit goals, particularly in emerging

markets where experience with local

customs and business practices can

make a difference.

A 3PL that can offer network design

and optimisation, primary and secondary

packaging support, campus-based

warehouse and transportation solutions,

labour management, real estate services,

regional expertise and collaboration

opportunities will be equipped to deliver

the service, flexibility and value needed

to remain competitive in any market.

These providers can also offer the

visibility and control needed to better

understand and manage the increasing

costs to serve both retailers and

consumers, supporting long-term sales

and profitability goals that reach far

beyond the supply chain.

Courtesy: DHL Supply Chain

Figure 3: Streamlined FMCG supply chain network


SCM TRENDS SCM TRENDS CHANGE MANAGEMENT IN PROCUREMENT OUTSOURCING CHANGE MANAGEMENT IN PROCUREMENT OUTSOURCING

Creating Value throughimprovement in efficiency

There exists a clear disparity between individual and organisational goals while implementing procurement outsourcing solutions. Benefi ts can be accrued only from a holistic change management solution, which strikes a balance between the two goals. Business cases rely on changes and, more often than not, they tend to underestimate the true potential of change management. This is signifi cant for the organisation as well as the individual, and if not addressed proactively, it may lead to disruptions, resistance and possibly, to project failure.

PROCUREMENT function creates

value through improvement in

effectiveness and efficiency. The

key levers influencing value

creation are spend under

management, percentage

of savings over the spend

addressed, procurement

function’s alignment with

the business functions,

robustness of risk

management initiatives,

procurement function’s

operating costs as well as

the time to value seen.

P r o c u r e m e n t

outsourcing positively

impacts each of these value

levers and brings realisable

benefits to the organisation.

The changes involved in adding

a procurement outsourcing partner

can be multifarious and need to

be handled with a meticulous laid

out change management initiative.

The most frequent change agents

include partnering seamlessly with

the outsourcing team, processing

realignment, adopting technology,

signing up for stretched targets, and

transforming existing processes.

To tackle these change agents

here’s proposing a six-step framework

that is integral for an effective change

management programme:

STEP 1: WHY CHANGE MANAGEMENT?Procurement, as a function, is playing

a more influential and strategic role

within enterprises while creating a

strong impact on the business function’s

strategies. This transformation has

been brought upon by an adverse

business environment, operational

and supply chain maturity, increased

focus on return on investment and

developing sustainable business

practices. Procurement leaders today

have a much wider influence and reach.

Procurement outsourcing has

helped in the metamorphosis of the

procurement function by creating

greater value compared to the

traditional practice. Outsourcing brings

flexibility and uses a shared resource

pool to meet procurement needs of

business functions across multiple

locations and divisions. Setting up

onsite teams of category experts in

procurement functions and offshoring

the tactical procurement activities

to low-cost countries have been

a sought after way to gain

greater effectiveness and

efficiencies. Procurement

leaders have realised the

necessity to innovate

and the corresponding

benefits, which

p r o c u r e m e n t

outsourcing can bring

forth.

However, the

process of outsourcing

is associated with several

changes to the existing

procurement practice and

companies expect greater

results from each member of

procurement. Typically, buyers

can deliver anywhere from 1–4%

additional savings as a result of spend

analysis, market intelligence, supplier

performance management, contract

management and other sourcing

support-related services.

During this change process, when

organisational and individual goals do

not match, the outsourcing model fails.

In several cases, we have experienced

that the change management

programmes are heavily process driven

and fail to address the emotional side

of change. Change management in

procurement outsourcing needs to

address the ‘people side’—managing

expectations, obtaining participation

and involvement from them, and

guiding them in making changes to

their habits. Hence, there is a growing


need for a robust model to manage the

change and help realise the benefits

from the procurement outsourcing

initiative.

STEP 2: CHANGE MANAGEMENT PROCESSA clear understanding of key value

levers is essential to fully appreciate

the need for change management

process in procurement outsourcing.

The change management levers

connect varying degrees to realise the

benefit potential. At a high level, a

successful procurement outsourcing

model improves the effectiveness and

efficiency of the procurement function.

STEP 3: VALUE LEVERS FROM PROCUREMENT OUTSOURCINGProcurement teams constantly strive

for higher savings. With procurement

outsourcing, special functional teams

help achieve this goal by bringing

the necessary skill sets, best in class

sourcing tools and industry best

practices and benchmarking.

Procurement needs to be closely

aligned with the business functions for

planning and execution. Outsourcing

frees strategic resources, enabling them

to focus on strategic issues, explore

potential opportunities and secure buy-

ins and participation in new initiatives.

Risk management in procurement

is a key focus area where procurement

proactively identifies and works towards

various risks (supply, market and forex),

compliance and environmental risks.

With access to market intelligence and

support, procurement can have better

insights into various risk parameters.

Due to the availability of additional

time from outsourcing activity,

procurement can improve its selling

skills to get greater spend coverage.

The team now has access to category-

specific intelligence as well as skilled

resources to identify the best fit

strategies for a variety of spend groups.

These resources also help in tail-spend

management by identifying categories

with potential saving opportunities.

Implementation of rigorous processes,

such as contract management and

addressing spend through catalogs,

reduces maverick spend and helps to

facilitate monitoring of spend.

Procurement outsourcing brings

flexibility and a shared resource

pool that can service multiple

divisions across several geographic

locations. Outsourcing leverages

technology to automate processes,

improve productivity and increase

responsiveness. A blended onshore

and offshore team further reduces

operating cost and improves Return

on Investment (RoI). Procurement

has come to the forefront primarily

because it has increased the time

to value. Procurement outsourcing

specifically helps in this process

increased by using readymade

templates, category and market

intelligence, technology and having

a better understanding of the various

risks in the process. Outsourcing also

helps in standardising Service Level

Agreements (SLAs), thus, adding

a defined time perspective to the

whole procurement process. Finally,

distributed project management and

workflow management help teams

acquire the necessary skills and reduce

the overall time to value cycle.

Having understood the various levers

for value creation from a procurement

outsourcing perspective, it is necessary

to understand the changes required to

make the change happen and unlock

potential value.

STEP 4: CHANGE LEVERSLet us understand the significance of

each value lever:

• Adopting TechnologyTechnology is at the forefront in

a procurement outsourcing model.

At one extreme, is the increased

utilisation of ERP, and, on the other

extreme, are custom solutions such as

Catalogs, e-Sourcing modules (eRFx,

eSpend, eContracts, eAuctions, etc.)

Technology solutions automate

processes, thus, reducing procurement

lead times and generating vast amount

of data necessary for running analytics

and supporting advance decision

support systems.

Custom solutions like catalogs

ensure contract compliance, supplier

scorecard measurement and tracking

supplier risks, while RFx and contract

templates deliver great efficiencies.

• Leveraging intelligenceExperts within the outsourcing team

bring with them a repertoire of

knowledge-based expertise such as

market intelligence reports, industry

best practices, category-specific

expertise, sourcing strategies and

savings benchmarks. These reports

are integral for developing category-

specific procurement strategies and

managing risks and self-assessment of

a procurement programme. They also

help procurement in aligning itself with

the business functions and proactively

identifying other opportunities.

• Leveraging extra supportThe procurement outsourcing team

takes the tactical activities out of

equation leaving the in-house team to

focus on high impact areas. The extra

support also comes in the form of a

shared resource pool, which helps in

streamlining procurement processes,

thus significantly reducing operating

cost.

• Signing up for stretched targetsThe procurement team can institute

and actively monitor corporate social

responsibility initiatives like minority,

green and small business programmes.

Again, the procurement team can

definitely achieve an additional 1–4%

savings from the outsourcing process.

• Transforming existing processesWith the help of the outsourcing

team, the time required to turn around

a request shortens. The team becomes

more proactive to the requests from

business, substantially shortening the

overall cycle to create value. All the

risks associated with the procurement

process get addressed by the new

processes, as procurement can make

much more informed decisions. This,


in turn, helps in aligning procurement

goals with those of the business.

STEP 5: CHANGE PROCESSTo ensure the success of a change

initiative, all the five change levers

listed in Change Levers should

be adequately addressed. Here’s

proposing a unique six-step Change

Management Model, which provides a

holistic solution to manage the change.

Let us look into the various stages of

this model.

1. UnderstandStage 1: Assess

Figure 1 shows the steps in change

management process for procurement

outsourcing. The change management

initiative begins by understanding the

current procurement practices within

the organisation. This is done with the

help of cost and value benefits.

This stage requires a bottom-up

approach where a mutually exclusive

set of all as-is processes need to be

prepared. This shows the gaps within

the system that need to be assessed

and defined. Then, a sense of buy-

in and urgency needs to be inculcated

in the organisation, especially the top

management team, to fulfill the gaps.

Stage 2: Envision

To get the buy-in from all the team

members, procurement leaders should

set a strong vision, which can motivate

the entire team towards achieving that

goal. People should be able to feel that

they are a part of something which is

bigger than them as individuals and

thus inculcate a sense of urgency.

This vision should be holistic,

encompassing cost savings and other

value benefits, softer aspects such as

supplier and customer relationship

management and implementing

sustainable procurement practices. This

vision must be simple in delivering its

message and should also identify the

goals from its implementation.

After the programme level goals are

established, based on the assessment

made, an implementation plan needs

to be developed. This should include

all possible sub-functions with realistic

timelines assigned to each. Then the

roadmap between the as-is processes

in Stage 1 and to-be goals should

be developed. Based on the risks,

timelines and the subsequent benefits,

the priorities can be set and the

milestones can be fine-tuned.

2. ChangeStage 3: Communicate

The next step is implementation.

Implementation of the change is a

top-down approach where the senior

leadership in procurement gets the

necessary buy-in from all the team

members. The three most important

elements in any change management

p r o g r a m m e — c o m m u n i c a t e ,

communicate and communicate—are

vital here.

For implementation, a strong change

management team should be created

which can steer this change initiative

safely through. The team members

should not only have the formal power

to remove any hindrances in the

project, but should also have strong

leadership, effective communication

and project management skills. The

team should be backed by a senior

C-level executive. These people must

be competent and credible with strong

formal and informal powers.

Once the team is in place, the

process of change communication

should begin which will be initially

done by the leadership and then by

the change management team. The

communication must be plentiful

because if the communication space is

not filled with deliberate, optimistic

and honest communication, then it

will be filled by rumours, gossip and

speculation from one set of employees.

The communication must also be

meaningful and the situation relevant.

During the initial phase, the employees

are only interested in communication

that relates to their specific personal

situation. In the case of sourcing

support, the key benefit for the buyers

is that they can now focus on more

strategic activities, drive greater value

and play a bigger role within the

function. The change management

team should train the managers in the

department before sending out their

communications to the team members

so the alignment with organisational

goals is maintained.

Conducting training sessions,

demos, getting feedback from buyers

on the sourcing initiatives and

incorporating their feedback and

focussing on creating a sustainable

procurement outsourcing practice

should be used in communication.

Frequent communication between the

procurement team and the outsourcing

team should be ensured so that each

team benefits from the other. This

can be done using video conferences

or getting the outsourcing team to

travel to the client location. This

in-turn should be used to set stretched

targets as both the teams will be in

Figure 1: Six-step Change Management in Procurement Outsourcing

Change management in procurement outsourcing, continued


constant touch.

Stage 4: Enable

The communication process sets

the stage for implementation. The

employees need to be enabled to

make the changes. This can be done

by removing the obstacles, changing

structures and processes so they

are aligned with the new vision and

supporting the employees as much as

possible. The change management

team plays a large role here.

On the softer side of enabling,

employees should be more involved

with the process to minimise the impact

of natural resistance. This can be done

in areas such as design of work and

work routines, processes, changes in

performance measurement, transition

management and communication.

When involved, people feel a greater

ownership towards the change and

hence, are more willing to embrace

it. Employees should be continuously

recognised and rewarded for making

changes happen.

Depending upon the type and size

of procurement outsourcing, it may

take more than a year to implement

change. During this period, it is

common for employees and managers

to lose sight of the purpose of the

project and direction. This can be

countered by setting short-term goals

and celebrating multiple short-term

wins. Early savings generation and

key success stories related to specific

categories or regions should be

recognised and communicated to the

larger procurement teams to generate

momentum.

On the business side, the

procurement team should use the

additional intelligence such as

industry reports, supplier scorecards,

top players within the industry, and

best practices to set realistic targets.

Pilot transformation programmes

should be used to begin. The success

of the pilot programmes will help

get more buy-in from the teams and

also help in correcting the process by

reviewing the results.

3. SustainStage 5: Measure

Various performance metrics can be

laid down by the change management

team. A few of them can be savings

per FTE, percentage of maverick

spend—purchases not from contracted

suppliers or cataloged suppliers, usage

of procurement tools, time per FTE,

spend managed, number of strategic

initiatives taken up, addressing

concerns of business groups, or

milestones reached. These will help in

assessing the programme’s effectiveness

and refining future goals.

Joint performance metrics should

be defined for both the procurement

as well as outsourcing teams. A few of

these metrics can be:

• Percentage of activity outsourced

vs. additional spend addressed by

the procurement team

• Market intelligence leveraged vs.

additional savings attained

• Reduction in time to value vs. usage

of technology

All these metrics can be defined

from where we have the impact of

changes required on the value creation

levers. In addition to the value

figures, there should also be metrics

considering the motivation levels and

employees’ willingness to take up

higher targets which helps employees

attain greater levels and in turn help

the organisation grow.

Stage 6: Improve

Making improvement as a part of an

organisation’s philosophy can be done

in several ways:

• Spread pilot success stories within

the organisation. Irrespective

of the size and impact of the

accomplishment, it should be well

publicised. The stories should be

shared on the internal portals, team

meetings, conferences, etc. They

should also be incorporated in the

corporate training material as best

practices by the company.

• Feedback process should be

encouraged across business,

outsourcing team and the

procurement teams. The feedback

should be constantly evaluated and

the necessary changes should be a

part of the continuous improvement

programme.

• The change management team

should constantly focus on keeping

the targets stretched by involving

procurement managers in the

process and making them more

responsible for the results. In

this way, they will be constantly

working towards improving the

current process and achieving

greater results.

STEP 6: ENSURE A SMOOTH CHANGE MANAGEMENT PROGRAMME In outsourcing, some key processes of

sourcing and procurement functions

require changes. Employees will have

to do their jobs in a slightly different

way and may have to interact with

foreign employees from a partner

company. This change needs to be

taken seriously by the management;

communication around this change

throughout the transition process

is critical. The aim of the change

management process is ultimately to

ensure that procurement outsourcing

is implemented as expected with no

disruptions to the service; to maintain

or to increase employee engagement

and productivity and to maintain a

good working relationship between the

outsourced department and the rest of

the organisation to maximise savings

and value for the client organisation.

Courtesy: GEP

Value

Chan

Adop

techn

Lever

intell

Lever

suppo

Sign

stretc

Trans

proce

Table 2

Procurement outsourcing brings fl exibility and a shared resource pool that can service

multiple divisions across several geographic locations.

Outsourcing leverages technology to automate

processes, improve productivity and increase responsiveness.


AUTOMATION TRENDSAUTOMATION TRENDS VOICE TECHNOLOGYVOICE TECHNOLOGY

VOICE technology has emerged in

the last decade from a little-known

approach in order picking—primarily

deployed in the grocery and beverage

sectors—to a technology option that

has truly become mainstream across

virtually every industry sector.

Today, hundreds of thousands of

workers around the world use voice

technology to help ship products to

customers and perform other DC tasks.

Voice technology vendor Vocollect

alone says it has 500,000 users—

incredible growth for a technology

that started to take off 10 years or

so ago. Voice technology is not only

an increasingly preferred approach to

order-picking and more; it has become

one of the most popular distribution

technologies, solving business issues

that impact DC operations, with a

proven ability to reduce operating costs

with relatively little ‘pain’ associated

with the deployment of technology

and a rapid time-to-value opportunity.

To ensure your company avoids

pitfalls experienced by others that

delay the results achievement they

expect, below are 10 important keys

to voice system deployment success,

roughly in the order in which they

should be addressed during the course

of a project.

KEY 1: GET EDUCATED ABOUT VOICE

Over and over again in any area of

supply chain and logistics technology, a

project is almost always more successful

when a company and its project

team do a thorough job of educating

themselves on a technology and its

benefits. However, companies often

fail to adequately educate themselves

before jumping into a project. If you

think voice might have a good fit in

your operation, there are a wealth of

resources on the web, at various trade

events, from voice providers, and more.

Companies ought to spend sufficient

time to get several people well educated

on voice technology and applications

before embarking on a potential voice

project—and that executives confirm

the level of knowledge the team has

before allowing the actual solution/

provider selection effort to go forward.

Presentations on voice by the team

chartered with getting educated should

be made to a wider company/logistics

audience to display the knowledge that

has been acquired and address initial

questions/concerns. Where possible,

the purchase decision and deployment

should have strong involvement

with supervisors/team leaders and

star employees to ensure widespread

acceptance.

The Bottom Line: Getting a solid understanding of voice technology (how it compares to other technologies, how it works, its benefits, applications, etc.), plus involving some of the people who will do the actual work in the decision and planning process, will provide a solid foundation that will significantly enhance the overall smoothness and success of the deployment.

KEY 2: EVALUATE HOW VOICE FITS IN

WITH YOUR OVERALL LOGISTICS/DISTRIBUTION STRATEGYAny distribution technology should be

viewed as a component of a broader

logistics strategy. Those strategies, in

turn, should be well aligned with the

company’s overall goals and objectives.

While ‘cost reduction’ in one form

or another is usually near the top of

most of these logistics strategies or

goals, the value and opportunity for

Voice technology has made tremendous inroads into Distribution Centre (DC) operations, and with good reason. It addresses key business problems with a fast payback and high Return on Investment (RoI). Here’s presenting 10 proven tips to get the best results out of your voice project and to ensure that your company maximises its success.

The 10 KeysDeployment Success in Distribution Centres

to Voice Technology


other improvements (such as accuracy/

customer service) should also be

recognised. More importantly, almost

every company has a number of

potential options for investment and

operational improvements in their

logistics network.

So the question will be: Why

should voice be at or near the top

of that opportunity list? While every

potential project has to have the

right numbers in terms of Returns on

Investment (RoI), those that can be

tied to broader strategies and objectives

will almost always have a better chance

of making it through to approval and

funding. For example, a voice project

might be directly connected with

efforts to increase productivity to

react to growing challenges recruiting

or keeping DC workers. Executives

should be able to draw a line from a

potential voice project back to broader

logistics strategies & goals, and from

there back to corporate strategies and

objectives.

The Bottom Line: Do not look at your voice project as an island, or think only in terms of RoI. Experience has shown time and time again that connecting such projects to broader strategies and objectives will help differentiate them from others vying for attention and funds.

KEY 3: UNDERSTAND YOUR TECHNOLOGY/

INTEGRATION OPTIONS AND LIMITATIONSA new voice system will not live in

a technology vacuum. Depending on

the scope of your deployment, it is

possible that the voice system will, at

a minimum, integrate with a WMS.

Across a network, that could possibly

mean more than one WMS, and/

or even more than one enterprise

system, even within a single facility.

Before you get too far into the

project, it is important to gain a solid

understanding from your internal IT

staff and/or vendors on the options

for adding voice support in different

specific areas. While the good news

is that many WMS vendors now have

standard voice support, it is possible

that they do not have native support

for some voice vendors, or they do not

support a specific DC process to which

you would like to add voice.

Legacy systems will almost never

have existing voice support. So, the

answer there is either to modify that

system to add voice capabilities, or

move some of the processing and logic

to a separate voice-specific application.

That’s where a really good technology

partner comes into play. Knowing the

options and trade-offs early on will

clarify what the end solution will look

like, and often keep the project team

from going down some dead-ends in

designing the solution.

The Bottom Line: Understanding your options for voice integration and application support from the get-go will often help you avoid headaches and confusion later on.

KEY 4: COMPLETE ‘AS IS/TO BE’ PROCESS

MAPPINGThis is another basic element of

the deployment process that applies

to the adoption of any change in

technology—the problem is that too

often companies delay this step until

it is too late in the process. With

the voice education achieved in Step

1, most companies should be able to

do fairly detailed ‘As Is’ and ‘To Be’

process maps (built using a simple

tool like Visio or even PowerPoint

or a spreadsheet) before looking at

different voice providers. This will

serve to get all stakeholders and the

project team members on the same

page at the outset.

The reality is that the specifics

of the ‘As Is’ model are not as well-

known as many expect. This is

especially true while dealing with

exceptions. For example, what is the

picker supposed to do if the product

expected in the slot is not there? Very

few companies have employees who

can fully describe the existing processes

with all the exception routines strictly

from memory. Further, the way

work actually gets done might not

be the way the process is currently

documented. Even expert employees

will often disagree about process steps.

If the current system is using RF

scanning, a key question becomes

how closely you want to mimic the

current process using voice, instead

of scanning and looking at a screen.

Or, do you want to use the potential

change in technology to reinvent the

process; for example, by implementing

a ‘cluster-picking’ approach to

‘eaches’ picking? That information,

coupled with a solid understanding of

voice from the education phase, will

help you to construct the ‘To Be’

process, including exception-handling

always the most difficult areas to

manage.

While the ‘To Be’ process may

change over time as new understandings

are realised, completing a first pass at

this step before detailed voice provider

evaluations are started will separate

the two steps and allow companies

to compare vendors and solutions in

reference to the ‘To Be’ model.

The Bottom Line: The execution of any documented process tends to not match up with the real-world practice. Companies often want to jump right into vendor evaluation before doing the difficult next stage of process modeling for voice deployment, but doing that work upfront usually pays nice dividends as the process unfolds. Companies with the discipline to follow the documented procedures tend to get bigger returns.

KEY 5: BUILD A SMART BUSINESS CASE

Interestingly, for savvy companies,

price is not the greatest driver. The

real story is what value they will receive

for a given price, and how quickly their

investment will be paid back through

reduced operational costs. Even if

the RoI from a voice deployment is


a slam-dunk, the RoI will need to

be documented and accepted by the

finance organisation in your company.

Even if the RoI meets corporate

thresholds for payback periods or

hurdle rates, the investment in voice

is also competing for allocation of

available capital. A strong RoI that is

attractive as a percentage may not be

compelling in terms of absolute dollars

versus alternative uses of capital and

human resources. To build the business

case for a distribution technology

investment like voice, it is important

to spell out projected RoI, RoI versus

payback, time to value, and Total Cost

of Ownership (TCO).

Do not be afraid to engage voice

providers in this process. They will

be able to open the door for you to

talk to others that have had success

with voice implementations, and they

can also provide insight into savings

areas and ranges based on significant

experience with voice applications

that can enhance your business case

development. We are never quite

sure why companies often want to

hide business case construction from

voice providers; they can provide

excellent resources and ideas. At this

earlier stage, before the formal vendor

selection process, you should open

up your facility to a walkthrough

and evaluation by one or several

potential voice providers. A few hours

on the DC floor, including general

discussion of your pain points, goals,

and operating environment should be

enough to enable them to offer you

additional support for business case

development.

The Bottom Line: Lack of rigour in business case development can delay or even, in some cases, kill potential voice projects. Usually, the problems are related to either time constraints or a lack of experience. Investing the time required to do the job right is critical, and getting some help from voice companies and/or technology consultants with real voice experience will almost always improve your analysis.

KEY 6: CAREFULLY SELECT THE

VOICE PROVIDER AND MAKE SURE OPERATIONS IS IN A LEAD POSITIONAs voice has become more

‘mainstream’, there can be some

tendency to view the technology

as having been commoditised, and

therefore, cost becomes the dominant

selection criteria. This is wrong. First,

there are still important differences

among providers not only generally,

but certainly for the specifics of any

given application/deployment. It takes

effort to understand these differences—a

factor which helps select the vendor

that is right for each company.

Sales channels can also be an issue.

Are vendors competing for your

business selling on a direct basis, or

through systems integrator/reseller

channels? There is nothing wrong

about buying through resellers—an

increasingly common way for voice

systems to get to market—but this

means that you need to evaluate both

the reseller and the ‘OEM’ and how

they work together.

Second, while IT will naturally be

involved in any technology-related

project, too often an IT team member

winds up leading the project, often

because logistics managers committed

full or part-time to the effort cannot

make their commitments. IT is a

critical support resource, but, like

most areas, success will most strongly

be delivered when operations leads

the evaluation and overall project

management. That structure should be

set in concrete very early on as the

project unfolds.

It is generally also a good practice

to let a few associates on the floor

get involved in parts of the evaluation

process, to ensure the actual users

have some ‘voice’ in the selection.

This will not only help build support

from operators for the change in

technologies (some of them were

part of the process), but may identify

some potential issues, say with a given

vendor’s equipment, that may not have

been recognised by management.

The Bottom Line: While voice is a ‘technology’, its evaluation should not be considered simply as a technology purchase. Voice is an excellent enabler for the operations team and should be treated as such. Often, significant project problems can be traced to vendors requiring extensive IT support, but not producing enough solid results from the effort to warrant the resource allocation.

KEY 7: ASSIGN THE RIGHT INTERNAL

RESOURCES It is critical that both executives and

the committed employees are realistic

about the effort that can be delivered.

We recommend that the voice project

manager report on the expected/actual

levels of effort weekly, with escalation

of the issue and schedule changes as that

analysis suggests. The worst scenario is

when management and others believe

someone is working the committed

50% of time, whereas in reality he or

she is falling far short of that plan.

It is also critical that companies take

the numbers developed in the approved

business case directly into the actual

project. The project kick-off meeting

after the system is approved and the

contract with a voice vendor is signed

should start with the metrics that

will define project success, and those

numbers should be kept front and

centre for the duration of the project.

The Bottom Line: The time to actually implement a voice solution tends to be very quick and not to be an extended ‘WMS’-type installation process. As a result, those dedicated resources are usually ‘away’ from their normal responsibilities only for a short period of time, but their strong upfront planning presence is important. Ensuring adequate committed project resource management and clearly defining what results will signify project success are two frequently overlooked actions in voice and other distribution technology projects that have a big impact on the project results.

Voice technology, continued


KEY 8: DETERMINE WHICH DEPLOYMENT

MODEL (STANDARD OR ACCELERATED) WORKS BEST FOR YOUThe good news about voice technology

is that—when it makes sense—it can

be implemented quickly, sometimes in

a matter of just a few weeks. This is a

function of several factors, including

the professional expertise of technology

partners; the flexibility of options

to meet unique customer needs; the

intuitive nature of, and flexibility for,

expansion of the voice system; how

fast the system can be ‘trained’ for

individual operators; and more.

Is your organisation and operation

ready for this type of rapid deployment?

Do not think of this as a technology

install…it is a process reengineering

effort. If you have done the types

of upfront work recommended

(education, process mapping, etc.),

you may indeed be ready, enabling

your company to rapidly achieve

time to value. This approach is not

for everyone. A company should only

go only as fast as what makes sense

for the business. You do not want to

just add ‘technology’ here. Ensuring

that effective process, internal

communication, coaching & training,

and other components are in place is

critically important.

The Bottom Line: Rapid deployments of voice can start delivering savings in just a matter of a few weeks and transform some areas of the DC almost overnight, but companies need to carefully assess whether their systems, culture, management resources and more are ready for this approach, or whether a more measured approach makes better sense. Spending more time upfront to fully assess the operating climate so that there can be some reengineering of processes may be a concern, but experience shows that stronger results and a faster RoI are the typical end result.

KEY 9: ROADMAP FOR IMPLEMENTATION

In some cases, the initial deployment

is the one and only potential use

of voice technology within a given

facility or across your network (for

instance, you have only one DC).

More often, either officially as part of

the initial buy and cost justification,

or informally, as a likely path for

future voice rollouts, there can be a

reasonably clear expectation relative

to adding additional workers into the

targeted process (say picking) in your

original facility, voice-enabling other

areas of that DC, and voice-enabling

the core application in additional DCs.

The mistake companies often make,

especially when the path forward

has not yet been formally approved/

funded, is not laying out this roadmap

in a detailed, time-phased way. Failure

to detail actual or potential rollouts

within or across facilities can delay

those next-stage deployments of

voice. Why? Because voice proponents

will often have to ‘resell’ additional

investments. Conversely, if there

is a strong sense that the first voice

deployment will be a success, then

building a vision from the start about

how that voice success can be extended

over time in a ‘Master Plan’ style can

gain consensus on that vision from the

start of the first project.

As a result, the project often also

gains greater visibility and support as

it moves the initial voice deployment

from appearing like an isolated project

to one that has broader strategic

and possibly even network-wide

ramifications both across the US and

even to other countries around the

world. Also, without immediately

committing to additional voice

terminals/systems, a company may be

able to gain favourable ‘option’ pricing

for additional systems down the road,

if this option is anticipated at the

initial contracting stage. Do not give

short-shrift to planning for the human

side of the voice implementation—

make sure there will be adequate

and ongoing training and coaching.

And remember, you never can over-

communicate—before, during and

after the deployment. These two issues

surface time and again as being critical

factors that often get overlooked.

The Bottom Line: Creating a time-phased Master Plan for voice deployment across applications and facilities at the time of initial deployment will help you consistently roll out voice technology more rapidly.

KEY 10: MANAGE THE PROJECT

Being ‘on-time’ and ‘on-budget’ is

important—but just as important is

being ‘on-results’. Too often, in the heat

of the actual voice system deployment,

the focus becomes almost solely being

on-time and on budget, and the

on-results aspect is semi-forgotten.

This can sometimes occur because the

technical staff deployed to implement

the system was not very involved in

the original operational vision and the

business case development, so frankly,

the implementation team members

have that narrow orientation.

A business manager needs to stay

in charge of the project, rather than

deferring it to IT staff responsible

for the technical aspects of the

implementation. This manager needs

to say focussed on the operational

metrics used to justify the project,

which define success just as much as

the meeting schedule and staying on

budget. Most seasoned voice customers

would tell you that they would support

a slight schedule delay a hundred times

over if it helped ensure they could meet

and exceed the ‘on-results’ number.

But here too often the on-results

aspect is not the key focus, and, in

reality, that usually matters far more in

the end than schedule or budget.

The Bottom Line: Do not sacrifice operational results in the name of schedule attainment or project costs —and this directive needs to be communicated at the start of the project, not at the point at which the schedule or budget is in jeopardy.

Courtesy: Supply Chain Digest


STRATEGY STRATEGY OPERATIONAL EXCELLENCE IN FACILITIES’ MANAGEMENTOPERATIONAL EXCELLENCE IN FACILITIES’ MANAGEMENT

Operational excellence is a multi-year journey, which needs a long-term vision. It requires a solid, well-planned foundation and an unfl inching resolve to create a culture of excellence and discipline. In more complex operations or in multi-site networks, building such a culture requires a longer implementation phase. It is also important to understand that operations excellence is not a static phase, it relates to an environment where there is ongoing focus through structured processes and tools for driving continuous improvement. Another related point is that if a project is implemented with a ‘deliver and move out’ approach, it is bound to fail. Success is earmarked by collaboration, ownership, and culture change. This type of change requires executive level sponsorship. Organisations which keep these basic tenets in mind are likely to fi nd success in this journey.

Creating a culture of discipline

WHAT sets a world-class logistics

facility apart from an average one is

the excellence in operations in the

areas of processes, people, technology

and information. Organisations are

striving to attain matured capabilities

in their operations for accurately

identifying stakeholder and business

needs, defining critical processes

that complement these requirements,

developing plans that address the

overall needs and implementing

these plans on ground to achieve

successful & sustainable results.

Quantifiable benefits such as

maximum space utilisation,

throughput per man hour,

lead time reduction and cost

per piece handled are some of

the factors that companies are

targeting for easy wins.

The key components of

an Operational Excellence

Programme are shown in Figure

1. There is a diagnostic phase

to identify challenges that the

organisation faces, identify the stage of

process maturity that the organisation

is at, benchmark operations against

the best in class and then identify the

opportunity for improvement.

IMPLEMENTATION PHASES OF AN OPERATIONAL EXCELLENCE PROGRAMMEAn Operational Excellence Programme

comprises the following phases:

• As-Is Assessment: This phase includes

site visit & data collection and

assessment of current operations

• Gathering Best Practices and

Benchmarks: This includes the

formulation of maturity models and

gathering metrics and benchmarks

• Conducting Gap Analysis: The

gaps are identified on the basis of

the maturity level and benchmark

analysis

• Building a Roadmap: Identifying

the improvement opportunity and

building a business case

MATURITY MODELS The maturity models provide

descriptions of typical supply chain

practices at varying levels of maturity,

viz., basic, developing and world

class. The maturity models are typically

used for:

• Describing best in class or industry

leading supply chain practices

• Comparing the current state of

client practices with the average Figure 1: Key components of operational excellence programme


performance of their peer group

and industry-leading practices

CONSTITUENTS OF AN OPERATIONAL EXCELLENCE PROGRAMMEAn Operational Excellence Programme

aims at putting the right processes

in place; increasing the productivity

of people, equipment & space and

ensuring that the KPI related to the

process & productivity are tracked.

The start point of any Operational

Excellence Programme is having

the right processes in place. The

right processes are essential to have

consistency in operations, meet all

documentary requirements and have

improved efficiency. This can lead to

an error-free state and can also ensure

increased traceability of the products

within the DC.

The journey towards right

processes begins with mapping all

the present processes, identifying

improvement opportunities leading to

increased efficiencies, and, once the

processes are finalised, developing the

Standard Operating Procedures

(SOPs) for all processes.

SOPs help reduce system variation,

which is the enemy of production

efficiency and quality control. SOPs

also act as reference documents for

all trainings to be carried out for

employees on their job roles. Having

SOPs can encourage regular evaluation

of work activity and continuous

improvements in how things are done.

The next step in the journey towards

excellence is to improve productivity of

people, equipment and space.

Once the processes and productivity

improvement initiatives are in place,

the next step is to set the standards

of performance (Key Performance

Indicators, KPIs) and track the

performance on each KPI to check if

the standards set are being met. Some

of the key operational performance

indicators are illustrated in Table 1.

It is equally important to meet the

legal requirements, ensure safety of

staff and deliver the right quality of

product. An Operational Excellence

Programme also needs to address all

these requirements.

KEY STEPS IN THE JOURNEY Audit programme and management by KPI Operations audit and management by

KPI go hand in hand. The objectives of

these are to evaluate the methods and

facilities of an operation and manage

the operations based on findings. The

operational benchmarks are defined

before the fact-finding exercise begins.

The benchmarks relate to order

Turnaround Time (TAT), safety &

security of employees, customer service,

costs, etc. The equipment, facility and

processes are then evaluated against

the target benchmarks.

Based on the findings, steps

are taken to increase compliance

on safety-related issues, increase

productivity, reduce costs and improve

customer service. The audit also

helps in checking the compliance to

the SOPs. The need for equipment

changes, facility-related changes or

new information systems are also

highlighted by an audit programme.

Productivity improvementFollowing are the productivity

improvement initiatives that need to

be undertaken to reduce costs and

improve customer service levels:

Storage

In a warehouse, the maximum space

utilised is for storage of finished

goods, which necessitates the effective

utilisation of storage space. There is

a need to have an organised layout

for effective utilisation of volume

of building and to avoid accidents.

The transition from simple block

stacking of goods to other forms of

storage like drive in/drive through

racking, satellite storage, and adjustable

pallet racking or powered mobile

racking can be considered to have

Table 1: Key operational performance indicators KPI Definition

Workforce

Productivity

The number of units processed per man hour

Warehouse Cycle

Time

The time it takes for an order to be ready to ship after the order has been

received

Inventory Accuracy A storage location having the correct part number and having the correct

quantity for that part number with no exceptions

Dock-to-Stock The time differential between the time the receipt is captured in the system to

the time the put-away is captured in the system

Shipping Accuracy A percentage of incorrect shipment divided by the total amount of shipment

Accuracy is defined as shipping:

1) The correct item

2) The correct quantity

3) To the correct destination

4) The correct paperwork, labels, etc.

Space Utilisation The total capacity utilised divided by the total facility capacity. Capacity can

be measured in units of pallets, cases, locations, etc.

Safety The total number of monthly OSHA recordable events per 100 employees

Overtime A percentage of the total number of hours worked minus the standard

number of hours in that work period divided by the standard number of hours

in that work period

Employee Turnover The total number of employee terminations (voluntary or not voluntary)

divided by the average employee headcount for that period

Training staff is essential to develop a culture of excellence. Training helps in both increasing

compliance to SOPs as well as enhancing productivity. It is

essential to structure the right training programmes and deliver these periodically to all

the staff concerned.


more utilisation of the height of the

building, improved material handling

and reduced TAT.

Order picking

In order picking, there is a need to

move from random located storage to

modified popularity storage. The Stock

Keeping Units (SKUs) must be sorted

as fast moving SKUs and slow moving

SKUs. It must also be ensured that

the majority of SKUs to be picked in

one operation should be located in the

‘golden zone,’ i.e., the area between

the workers’ knees and shoulders for

ease and efficiency of operations.

Batch picking in place of order

picking must be implemented to

improve the efficiency of workers. Batch

picking reduces the number of times

the worker visits the SKU location,

thus increasing productivity. Zone

picking is an alternative to batch

picking, wherein the warehouse is

divided into multiple zones and

workers are assigned to pick from

one zone only.

Using zone picking, orders are

either picked and passed from zone

to zone for fulfilment or consolidated

at a point before shipping. Thus,

using an appropriate method that

suits the needs, one can improve the

efficiency of order picking

and the warehouse itself

in meeting customer

demands.

Labour and equipment

utilisation

The key measures of

labour utilisation include

efficiency (picking rates,

etc.), absenteeism/time

keeping, overtime levels,

etc. Rough activity sampling on

those present (approximately 10–15

people in each study) needs to be

carried out. Every half-minute for 10

minutes, there is a need to observe

if the staff is actively working or

is sitting idle; the results need to

be recorded.

This needs to be done a few

times over the day to determine the

percentage of idle time and broad

potential for labour saving. Also,

the general efficiency levels (i.e., the

rate of work when working) need

to be observed. The key measures

for equipment utilisation include

speed of movement and operation

versus potential speed; actual lift

heights versus equipment potential

(under safe operating procedures);

load carrying capability versus actual

loads carried, etc. Handling equipment

carrying much smaller loads than

they are capable of carrying need to

be identified and changes should

be made to the carrying patterns

accordingly.

Excessive long distances travelled

(e.g., forklift trucks are designed to

handle goods in the vertical plane and

not for excessive travel in the horizontal

plane) need to be reduced on the basis

of correct picking strategies.

Inventory management effectiveness and

stock control systems

The aim is to carry an appropriate

amount of inventory—in the various

categories (ABC)—to meet the given

service levels at the lowest cost and

to have appropriate control systems

in place that would provide this

management control. It needs to be

ensured that inventory levels are kept

at target levels and are not ‘ballooning’

in aggregate.

The maximum/minimum and

safety stock levels need to be re-examined

on an on-going basis to determine if

they can be adjusted downwards

and if the service levels can be

maintained or improved with the

same or less inventory. The key measures

include stock levels actual maximum

quantities versus standard, stock

outs, stockholding total value of

stock held versus target levels for the

various categories of stock (ABC),

stock turns versus target stock turns,

obsolescent stockholding levels and

values—systems for identifying

and reducing obsolescent stock,

among others.

Training Training staff is essential to

develop a culture of excellence.

Training helps in both increasing

compliance to SOPs as well as

enhancing productivity. It is

essential to structure the right

training programmes and deliver

these periodically to

all the staff concerned.

There can be internal

and outsourced training

programmes.

Abhik Chopra, Sr Consultant,

ThinkLink Supply Chain

Services

Email: abhik.chopra@

thinklink-scs.com

Operational excellence in facilities’ management, continued

There is a need to have an organised layout for effective utilisation of volume of building and to avoid accidents.

In order picking, there is a need to move from Random Located storage to Modifi ed Popularity Storage. The Stock Keeping Uints (SKUs) must be sorted as fast moving SKUs and slow moving SKUs.

An Operational Excellence Programme aims at putting

the right processes in place; increasing the productivity of people, equipment & space;

and ensuring that the KPI related to the process & productivity are tracked.


TIPS & TRICKS TIPS & TRICKS SUPPLY CHAIN DRIVERS SUPPLY CHAIN DRIVERS

New Year’s resolutions are easier to make when you know they will save you time and money. To that end, here are fi ve areas of your supply chain you should take a fresh look at in 2013…

WAREHOUSE MANAGEMENT SYSTEM Is it time for an upgrade or replacement? Consider whether your current system is strengthening or hindering

your ability to execute business strategies. Your Warehouse Management System (WMS) should free up your IT

department to focus on customer-facing applications, allow for maximum configuration to your unique business

practices and adapt to changing market demands & regulatory requirements. You may also want to examine how well

your WMS integrates with other software—it should serve as the hub of your warehouse and seamlessly exchange

data with other systems, like your ERP.

PERFORMANCE MANAGEMENTYou are collecting data left and right, but do you know what to do with it? A performance management system will

turn those numbers into graphical, actionable information to help you drill down for root cause analysis and ultimately

make better operational decisions. The right system should produce real-time, comparative dashboards based on best

practice metrics like inbound, outbound and capacity, while also allowing you to customise it for your own company-

specific performance indicators.

MOVING TO THE CLOUDCloud technology allows you to access the most up-to-date system through a secure web portal, while the vendor

hosts the actual software and hardware infrastructure offsite. This arrangement can save you time, expense and labour

by offloading the software and hardware maintenance associated with maintaining on-premise software. Specifically,

your IT department can spend less time maintaining a system or learning every new technology stack and application

needed to run the company, and more time with the customer-facing services that differentiate your business and add

to the bottom line. And as we saw most recently with Hurricane Sandy, companies that have offsite, cloud-based

systems may avoid catastrophic data loss if they are hit by flooding or a hurricane.

VOICE TECHNOLOGYThis can be a key component for increasing efficiency and productivity in the warehouse by improving picking speed

and accuracy. Voice solutions can include distribution voice-enabled workflow for areas such as picking, receiving and

replenishment, as well as for manufacturing processes such as kitting, assembly and inspection. If your company is

searching for ways to increase efficiency even more, voice technology may be the next step.

HARDWAREEnsure that you are taking full advantage of the latest hardware technology. It is easy to get comfortable with

older models and devices, but examining the ruggedness, scanning tolerance, speed and ability to integrate with

other tools (like voice) may lead to changes that improve accuracy and productivity. Many WMS providers can

recommend the best solutions for your business and current system compatibility, and even locate, price and order

the hardware for you.

Dan Radunz, VP – Product Strategy & Development, HighJump Software

Supply Chain Resolutions For The Supply Chain Resolutions For The New YearNew Year


TRADE SHOW TRACKER TRADE SHOW TRACKER EVENT LIST EVENT LIST

Tel: 022-30034651 • E-mail: [email protected] • Web: www.engg-expo.com

INDORE January 11-14, 2013

AURANGABAD February 1-4, 2013

RUDRAPUR February 23-26, 2013

HYDERABAD May 31-June 3, 2013

ABROAD

18–21 MARCH 2013ANNUAL NATIONAL LOGISTICS CONFERENCE & EXHIBITIONFocus: Showcasing logistics for medium and small companies, motor vehicles for goods transportWhere: Hyatt Regency Miami, US Tel: (305) 358-1234Fax: (703)247-2570E-mail: [email protected]

19–22 MARCH 2013CeMat SOUTH AMERICAFocus: International Intralogistics and Supply Chain ForumWhere: Hannover Fairs International GmbH, Hannover, GermanyTel: +49 511 89-32113Fax: +49 511 89-39681E-mail: [email protected]

19–22 MARCH 2013INTERNATIONAL MATERIALS HANDLING EXHIBITION 2013 (IMHX) (TRADE)Focus: Latest materials handling and logistics innovationsWhere: National Exhibition Centre, Birmingham, UKTel: +44 (0) 121 780 4141Fax: +44 (0) 121 767 3700E-mail: [email protected]

ABROAD

23-28 FEBRUARY 2013PRINTPACK INDIA 2013Focus: Warehousing & Material Handling EquipmentWhere: India Expo Center & Mart, Greater Noida, IndiaTel: 0120 4292274Fax: 0120 2400109E-mail: [email protected]

8-11 JANUARY 20132013 INTERNATIONAL CESFocus: Logistics SoftwareWhere: Las Vegas, Nevada, USATel: +1 301 694 5243E-mail: [email protected]

30-31 JANUARY 20137th PHILIPPINE PORTS & SHIPPING 2013Focus: Ports & ShippingWhere: The Peninsula Manila, Manila, PhilippinesTel: +60 87 426 022Fax: +60 87 426 223E-mail: [email protected]

NATIONAL

ABROAD

4-5 APRIL 2013APICS ASIA SUPPLY CHAIN & OPERATIONS 2013Focus: Move Beyond Better, Faster, CheaperWhere: Hyatt Regency, MumbaiTel: +1-773-867-1777Email: [email protected]

16-18 APRIL 2013COOL LOGISTICS AFRICAFocus: Perishable LogisticsWhere: Vineyard Hotel & Spa, Cape TownTel: +44 20 8279 9403Fax: +44 20 8279 9405Website: http://www.coollogisticsafrica.com/

21-24 APRIL 2013NASSTRAC LOGISTICS CONFERENCE & EXPOFocus: Transport and logisticsWhere: Rosen Shingle Creek, Orlando, USATel: +1-615-6961870 Email: [email protected]

NATIONAL


EVENT REPORTEVENT REPORT ENGINEERING EXPO LUDHIANA 2012ENGINEERING EXPO LUDHIANA 2012

ANWESH KOLEY

AROUND Independence in 1947,

Ludhiana had a handful of machine

tools units and some units that

manufactured hosiery machines. Over

time, units producing bicycle and auto

parts entered the scene. Eventually,

there came about the need for machine

tools to meet the growing demands

for mother machines in the country.

That is when entrepreneurs established

machine tools producing units in

Ludhiana. Today, Ludhiana has

evolved to become one of the major

producers of mother machinery in

India. Led by manufacturing biggies,

Ludhiana is fast emerging as a leading

investment destination in the northern

belt of our country.

Capitalising on this vast growth

potential, the Ludhiana edition of

Engineering Expo organised by

Network 18 Publishing, emerged

as an eye opener. Inaugurated amid

incredible industry response, the

maiden edition of Engineering Expo

Ludhiana and Punjab Machine

Tools Show (PUMTOS) stood tall

with potential on the very first day.

The Expo not only highlighted the

potential of regions like Punjab

in northern India but also made

it evident to manufacturers how

they could have easy access to this

manufacturers-friendly zone. Held

at GLADA Ground, Ludhiana,

during 21–24 December, 2012,

the event generated commendable

enthusiasm among exhibitors. Visitors

too were excited about the prospects

of a show of such a magnitude being

held in the developing industrial

region of Ludhiana.

A GRAND OPENINGPositioned to add positivities to the

manufacturing and machine tools

industry in and around Ludhiana,

the Expo saw business deals worth

`10 crore in the first few hours of

the trade exposition and an order

book outlook looking potent with big

business deals for the exhibitors, thus

benchmarking itself with the best in

class trade shows. Gracing the occasion

and boosting the confidence of the

industry, Hon’ble Minister of State for

Industries and Commerce Shri Anil

Joshi insisted, “We need a foolproof

plan to promote the machine tools

industry in Ludhiana. The Ministry is

willing to extend all possible support

to the machine tools manufacturers

to set up business. We have the right

pool of manpower available, but we

need exposure so that our machinery is

accepted not only in India, but across

the globe.”

The inaugural function was

also attended by Ludhiana Mayor

Shri Harcharan Singh Golwaria.

Addressing the audience, he said, “A

cursory look at the halls in the Expo

clearly showed that the machinery

available in Ludhiana can benchmark

global quality. However, we are still

heavily dependent on importing

machinery. We need to reduce this

dependence by spreading awareness

Generating tremendous response from the industry, Engineering Expo Ludhiana has proved to be a game changer for the machine tools industry in the region. Leveraging the vast potential and possibilities of the state, the Expo provided the perfect platform for accelerating business. Held during December 21–24, 2012, the Expo witnessed a wide range of business possibilities being unfolded. The four-day event received a robust response from the industry at large. A report…

Exploring a horizon of opportunities

LUDHIANADecember 21-24, 2012GLADA Ground

L-R: Pravin Bansal, BJP – District Chief, Punjab; Hakam Singh Giaspura, Ex-Mayor of Ludhiana; Deepak Ballani, National Programme Offi cer, UNIDO-ICAMT; Mahendra Singh Dhakad, Programme Director, UNIDO-ICAMT; Shri Harcharan Singh Golwaria, Mayor of Ludhiana; Sandeep Khosla, CEO, Network 18 Publishing; Shri Anil Joshi, Hon’ble Industry Minister, Govt of Punjab; Sukhdial Singh, President, CLMTM


about our machinery to the world.”

The other dignitaries present at

the inauguration included prominent

industry stalwarts like SSS Dhillon,

Director, MSME Development

Institute; Mahesh Khanna, GM,

District Industries Center; Mahendra

Singh Dhakad, Programme Director,

United Nations Industrial Development

Organization-International Center

for the Advancement of Manufacturing

Technology (UNIDO-ICAMT);

Paramjit Singh, GM, Institute of

Machine Tool Technology; Simarjeet

Singh Bains, MLA; Deepak Ballani,

National Programme Officer,

UNIDO-ICAMT; Rajesh Jain,

Sr Manager, National Small Industries

Corporation (NSIC); Sukhdial

Singh, President, Consortium

of Ludhiana Machine Tools

Manufacturers (CLMTM); Manjit

Singh Matharoo, CEO, Matharoo &

Matharoo Inc & General Secretary,

CLMTM and Sandeep Khosla, CEO,

Network 18 Publishing.

BOOSTING INDUSTRY SENTIMENTSWhile Ludhiana has seen a flurry

of enthusiastic entrepreneurs and

investments, there are areas that still

need attention. Elaborating further,

Matharoo added, “Of late, the

machine tools industry in Ludhiana is

suffering due to lack of exposure and a

platform to demonstrate its credentials.

However, with an event like the

Engineering Expo, I am confident

that we will successfully regain our lost

ground.” The machine tools fraternity

unanimously accepted that there was

need for a platform, which can help the

region showcase its industrial might.

To this, Dhillon averred, “We need

to organise similar events frequently

in Ludhiana in order to bring our

facilities and service providers together

and discuss the requisite improvements

for this sector in the region.”

AN INNOVATIVE PLATFORM FOR BUSINESS POSSIBILITIESVisitors at the show were amazed by

the variety of machinery on display

and found the event to be a first-in-

class arena to interact with industry

players. Amit Takkar, Director, Takkar

Industries, exclaimed, “I visited this

Expo for the first time and I am pleased

with the arrangements. The variety of

machinery on display was commendable.

An event of this magnitude has taken

place in Ludhiana for the first time; the

local industry should take full advantage

of this opportunity.”

Another visitor, Abhishek Handa,

Business Development Manager,

Radeecal Communications, observed,

“The Expo is appealing at first sight.

Moreover, the companies exhibiting

here are big names from the industry.

I am quite satisfied with the overall

arrangements at the Expo.”

Pankaj Jain, Manager, Rexam

Bright Solutions, another visitor, also

shared similar sentiments. He stated,

“An event of this stature and scale

is taking place for the first time in

Ludhiana and I am pleased to see the

quality of machinery on display. The

choice of venue is an important factor

for such events and GLADA Grounds

is a perfect location to attract a large

number of visitors. Such events should

take place more often in Ludhiana.”

AN EVENT TO RECKON WITHThe exhibition halls saw a large number

of visitors of which many expressed

their keenness to exhibit in the Expo

next year. Also, the exhibitors received

considerable enquiries for their

machines and were highly optimistic

about generating substantial business.

Substantiating the same, CS Sidhu,

Director – Technical, GR Cranes &

Elevators, said, “We have received

large number of enquiries at this event

and expect most of these to convert

into business. We have already sold

machines to many customers.”

Another exhibitor, Robin Basant,

Managing Partner, Basant Mechanicals,

expressed, “The Expo plays a crucial

role not only in business development

but also in increasing profitability.

Engineering Expo is considered to

be an ideal platform for companies

to foster growth through reach and

awareness to their right target audience.

Presented by Network 18 Publishing,

Engineering Expo proves to be a

perfect combination of a vast range of

exhibitors, spacious venue, state-of-the-

art amenities and humungous visitor

turnout, which is crucial for exhibitors.”

Didarjit Singh, Proprietor,

Karam Chucks, who also exhibited

at the Expo, said, “Personally, my

expectations from Engineering Expo

at Ludhiana were very high and this

Expo has lived up to my expectations.

It has not only given us vast exposure,

but also given us the confidence to

launch some of our new products so

that people who are not able to attend

international shows, can find internal

quality products in India.” Matharoo

aptly concluded, “Engineering Expo

is a great platform to showcase the

industrial talent residing in smaller

towns and cities of India. A place

like Ludhiana has the skills to attract

international manufacturers to India,

and such Expos do a commendable job

in assisting this.”

The next edition of the Engineering

Expo will be held in Indore during

January 11–14, 2013.

[email protected]

250 exhibitors pan IndiaSpread over more than

12,000 sqm26,135 business visitors

visited across IndiaBusiness transacted worth

`195 crore*16,188 business leads

generated*20,000+ products displayed

from different industriesMore than 3,50,000 kg

machinery moved in for display* Feedback received from exhibitors

Highlights of this edition


EVENT REPORTEVENT REPORT PANEL DISCUSSION: LUDHIANA PANEL DISCUSSION: LUDHIANA

Is Punjab Ready To Reclaim Its Manufacturing Might?

This is the question that got the panelists and audiences thinking. The electrifying panel discussion, which was attended by over 200 prominent industry players, highlighted not only the progress and prospects of Ludhiana but also focussed on the problems plaguing the region’s industrial development. Held on December 14, 2012, the panel discussion was aimed at fi nding ways to make Ludhiana a brand beyond hosiery and woolens.

PEOPLE define the place and

the prospects. Going by this logic,

Ludhiana is brimming with prospects

and a great future. A panel discussion

on the topic ‘Is Punjab Ready To

Reclaim Its Manufacturing Might?’ was

organised by Network 18 Publishing

along with its partners United Nations

Industrial Development Organisation-

International Centre for Advancement

of Manufacturing Technology

(UNIDO-ICAMT); Consortium

of Ludhiana Machine Tools

Manufacturers (CLMTM); National

Small Industries Corporation (NSIC)

and Association of Ludhiana Machine

Tool Industries (ALMTI). Held at

Park Plaza on December 14, 2012, this

engaging panel discussion was attended

by over 200 top industry personalities

from in and around Ludhiana.

ISSUED DEBATED The panel discussion brought forth the

burning issues that are creating hurdles

in the industrial progress of Ludhiana.

During the discussion, Matharoo

made a very valid point when he said,

“The machine tools industry is the

backbone of the manufacturing sector

and Ludhiana must make its presence

felt in this sector globally. Till date,

Ludhiana has provided an excellent

environ for doing business, but the

region has not received the attention it

deserves. We require low-cost solutions

for the machinery sector or else, we

shall lose out to the world.

Being the manufacturing guru and

a mentor to many, Shailesh Sheth

impressed that amid lacuna there is

sufficient reason to be optimistic.

He insisted, “Ludhiana has machine

tools manufacturers and the market

which uses these machines. We need

to provide a platform for the two to

interact and create awareness about

various quality requirements. The

entrepreneurial skill available in the

region is well acknowledged by all;

this has enabled Ludhiana to never

run out of innovative minds. However,

entrepreneurs must give up their micro-

centric approach and think big; beyond

the region first and then, globally.”

Fortunately, Ludhiana and Rajkot

are key industrial clusters, which

have developed machines that are not

manufactured anywhere in the country.

To this, Swarup added, “We have the

technical expertise and the minds to

go a long way forward.” Talking about

branding—a key requirement to have

market presence—Matharoo averred,

“We have to create brand awareness

about the high-quality products we

offer. We cannot expect the world to

come to us; we have to tell them that

we have arrived. ‘Made in Ludhiana’

should now be a brand beyond hosiery

and woolens.” In his address, Dhakad

stated, “Efforts should be made by the

industries as well as the government to

develop Punjab as the hub for global

supply chain. Also, the industries need

to focus on sustainable and inclusive

growth avenues as it can define new

horizons for their further development.”

Moderated by Archana Tiwari-

Nayudu, Executive Editor, Network

18 Publishing, the panel discussion

was followed by a question & answer

session.

ANWESH KOLEY

The eminent list of panelists comprised (L-R) Gaurav Swarup, Director, Marshall Machines Pvt Ltd; Manjit Singh Matharoo, CEO, Matharoo & Matharoo Inc., General Secretary, Consortium of Ludhiana Machine Tools Manufacturers; Shailesh Sheth, Corporate Secretary Advisor & Senior National Consultant, UNIDO; SC Ralhan, Federation of Indian Export Organisations (FIEO) Convenor of Punjab; Mahendra Singh Dhakad, Programme Director, UNIDO-ICAMT; and VR Dahake, Scientist in-charge, CSIR-CMERI


ENGINEERING EXPO INDORE 2013ENGINEERING EXPO INDORE 2013 EVENT EVENT PREVIEWPREVIEW

SWETA M NAIR

ONE of Madhya Pradesh’s largest

cities known for its palatial splendour,

Indore, in the recent decade, has

come of its industrial age. The city

of Indore, amid its royal structures,

today voices its determination in

shaping its future towards industrial

excellence. According to a recent

study published by Cushman &

Wakefield, Indore is one of the top

10 emerging cities of India—ideal

for long-term business investments

across industries. The city’s geographic

positioning, population demographics,

development in infrastructure, current

economic growth and governmental

support contribute towards its resolute

positive outlook.

INDUSTRIAL TRANQUILITYIndore has undergone rapid transition

and vast development in almost

every sector of business. As per

published reports, in recent times,

the per capita income of the state has

doubled. According to Manoj Pugalia,

Proprietor, Oswal Rubber Industries,

“Owing to the city’s systematic and

organised planning, many companies

find it fairly convenient to set up

base here. Additionally, industries

here are not vexed by the otherwise

rampant problems of labour and

power.” Ranging from automobile

to pharmaceutical and from software

to retail, the burgeoning city, on an

average, receives a bulk of its trade

from small, medium and large scale

manufacturing & service industries.

Indore’s major surrounding industrial

belts are present at Pithampur, Sanwer

and Dewas.

The city’s automobile hub is

situated in Pithampur, which is a well-

developed industrial area. Companies

such as Eicher Motors Ltd, Cummins

India Ltd, Mahle Engine Components

(I) Pvt Ltd, Mahindra Two Wheelers

Ltd and Bridgestone Tyre Ltd, among

others, have set up plants in this area.

Additionally, Cipla Ltd, Indorama

Synthetics (I) Ltd, Piramal Healthcare

and Glenmark, among others, are also

present in Pithampur.

Home to industries such as textiles,

chemical processing, food processing

and distilleries, the industrial belt

includes an industrial Special

Economic Zone (SEZ) as well. Other

upcoming sprawling industrial belts

include Govindpura, Manideep and

Pologround. Elaborating further,

Kishore Bundela, Director, Protec

Aqua Solution Pvt Ltd, informs,

“Formerly, the region was famous

for its auto cluster. But now,

pharmaceutical and IT companies are

also commencing operations in Indore.

One major advantage of being situated

here is that all major Indian cities are

equidistant from Indore.”

ATTRACTING INVESTOR INTERESTOwing to its sheer industrial potential,

Indore, in October, played host to

the Global Investors Summit 2012.

In the state’s bid to augment overall

development, a series of meets were

facilitated so as to attract investor

interest. With the underlined

support of better infrastructure and

strong government backing, many

international investors are gradually

Staying true to its core competence as one of India’s leading auto clusters, Indore spruces up its industrial portfolio as a spree of investments from the IT and pharmaceutical industries come trickling in. Mirroring the growth of this centrally positioned city will be the fi fth edition of Engineering Expo Indore, organised by Network18 Publishing. Setting the tone for acquiring business prospects, the Expo will bring together exhibitors who will showcase their latest products and services. Scheduled to be held during January 11–14, 2013, Engineering Expo Indore aspires to play the role of a catalyst in the city’s fl edgling growth.

Tapping India’s central vantage point

INDOREJanuary 11-14, 2013Labhganga Convention Center

225+ participants expected12,000+ business visitors

expectedBusiness transactions worth

`55 crore expected7,000+ products on display Spread over an area of more

than 5,500 sq m Showcasing more than 28 diverse industry categories


203+ exhibitors9,829+ visitors

5,000+ products displayed `45 crore business generated4,800 sq m exhibition area

1,10,000 kg machinery moved

45+ delegations from different companies attended the Expo

Glimpses of previous edition


entering the city.

In relation to this event, Omprakash

Gupta, President, Madhya Pradesh

Electric Merchants and Contractors

Association (MPEMCA), says,

“Indore is the business capital of

Madhya Pradesh. It can be noted

that nearly 80% of Madhya Pradesh’s

electrical business is concentrated in

Indore. After the summit, the central

state of India is looking for major

investments.”

“By providing a platform for

investments from major players in

India and abroad, I believe that

Engineering Expo will be the next

step for this revolution. MPEMCA

would like all major companies in

electrical and electronics to showcase

their products and technology in the

Expo. With Network 18 Publishing’s

experienced organisational skills, we

are looking forward to the integration

of new styles and services in this

show,” Gupta adds.

Coined as the ‘State of

Opportunities’, Madhya Pradesh’s

investor-friendly ambience and

presence of big industries catering to

different needs is shaping a positive

future. Commenting on the same,

Rajesh Godse, Proprietor, Reliable

Terrestrials, avers, “Availability of land

& labour and a stable government are

some of the factors that are contributing

towards Indore’s success as an ideal

investment destination. Moreover,

NTPC-run Vindhyachal project in

Madhya Pradesh is expected to increase

its capacity by 2013, which will further

foster industrial development.”

IN STORE FOR 2013Nearly 60 members along with their

parent companies will participate

in the Expo. In the MPEMCA

pavilion, products related to

industrial & domestic electricals,

electronics, industrial automation,

specialised automation products, auto

industries products, panel accessories,

submersible and mono block pumps,

wires & cables, HT line material &

switchgears will be put on display,

reveals Gupta.

The Expo’s rich legacy in helping

businesses connect has, so far, conveyed

the exhibition to many Indian cities.

Sharing his views on the continued

success of Engineering Expo, Sandeep

Khosla, CEO, Network 18 Publishing,

says, “After 10 successful years of

service to the industry, Engineering

Expo today has established itself as

India’s largest multi-location trade

show on manufacturing. The Expo

is a preferred destination for small

and medium enterprises as well

as manufacturing & engineering

organisations to further their growth

and that of the industry at large. For

the 2012–13 season, we have eight

editions spread across an equal number

of locations of a rising India. Keeping

our esteemed exhibitors and valued

customers in mind, we have made

elaborate provisions to offer a never

before experience. These, we reckon,

will add substantial traction to the

industrial growth of the nation.”

The exhibitor’s category at the Expo

will consist of companies representing

machine tools & accessories, hydraulics

and pneumatics, light & medium

industries, electrical and electronics,

material handling equipment, etc.

Expounding further, Yogesh Mantri,

Proprietor, Automation & General

Electric Co, states, “This is the

second time that our company will

be participating in Engineering Expo.

Exhibiting here allows us to gauge

market demands and customer needs.

Moreover, it is a good internal exercise

for the industry as well. The platform,

in a way, facilitates business for

customers, as exhibitors belonging to

different segments showcase products

under one roof. For the Indore edition,

our exhibits would mainly consist of

LED lighting systems, special cables

for solar generation, CNC machine

retro fittings, adjusting cable range,

switchgear, Schneider universal

enclosure, etc.”

For many exhibitors, Engineering

Expo is an energising outlet for

gaining new customers as it is an ideal

platform that helps them grasp market

trends and innovations. Sharing similar

sentiments, Bundela states, “The

Expo’s byproducts revolve around

creating awareness, brand building

and generating a good response.”

Having participated in the previous

editions of Engineering Expo, Godse

exclaims, “We have been associated

with Engineering Expo since its first

edition in Indore. Since Network 18

Publishing announces the dates well in

advance, we have ample time to decide

our exhibiting range. Moreover, for

business, the January 2013 time frame

will be good as it does not clash with

any festivals.”

The upcoming Engineering

Expo Indore 2013 promises to

leverage its geo-strategic positioning

to the fullest by inviting an array of

stakeholders to witness industrial

excellence of all sorts.

[email protected]

• Panel discussion aims at providing a roadmap to infuse growth in the region

• Institutional Buyer Involvement Plan to attract delegations from large corporate and major institutions

• Improvised visitor profi ling —profi le, scan, fi lter and bring in visitors as per exhibitors’ requirements

• Providing business networking support to exhibitors by leveraging Network 18 Publishing’s industry connect

• Credit rating facilities for the benefi t of exhibitors

• Providing complete travel solutions for exhibitors

• Offering logistics services to ensure smooth cargo handling, custom clearing, transport compliance, etc.

NEW ATTRACTIONS IN THIS EDITION

Engineering Expo Indore 2013, continued


ENGINEERING EXPO AURANGABAD 2013 ENGINEERING EXPO AURANGABAD 2013 EVENT PREVIEW EVENT PREVIEW

NISHI RATH

EXPLORING new markets and

providing the right platform for

emerging opportunities has been the

backbone of Engineering Expo ever

since its inception. Having captured the

manufacturing essence of regions like

Ahmedabad, Pune and Chennai while

providing them a manufacturing thrust,

the second edition of Engineering

Expo Aurangabad is all set to help one

and all leverage on the opportunities

and brighter prospects of this fast

developing manufacturing hub.

It all started when, Bajaj Auto Ltd

entered Aurangabad in the 80s and

was followed by Videocon. This move

threw open a land of opportunities for

Small and Medium Enterprises (SMEs)

and the region’s growth prospects took

an upward swing with major players

like Skoda Auto, Varroc Engineering

Pvt Ltd, Endurance Technologies Pvt

Ltd, Man Diesel India, Can-Pack

India and Siemens venturing into the

region. Since then, SMEs have been

contributing their fair share to the

manufacturing sector here and thereby

to the region’s growth. According to

experts, Aurangabad is now one of

the classic examples of efforts towards

balanced industrialisation.

GROWTH OF SMEs One of the favourite investment

destinations, Aurangabad is known to

be one of the fastest growing cities in

Maharashtra. This has led to an array

of business opportunities for SMEs

in the region. Aurangabad has over

3,405 medium and small scale units

generating about 36,871 jobs with

an investment of `404.86 crore. It is

estimated that by the year 2020, these

units will grow to 9,000, generating

about 95,000 jobs with an investment

of `1,050 crore.

In this era of cost competitiveness,

when everyone is looking at controlling

the overheads and reducing cost;

existence of SMEs is a must. After all,

SMEs help make the business models

of Original Equipment Manufacturers

(OEMs) more flexible. And with

Aurangabad emerging as an attractive

destination for auto giants, SMEs

definitely have a great future here!

SEZs AND IT: THE GROWTH CATALYSTThe growth of Aurangabad can be

traced to the time when Maharashtra

Industrial Development Corporation

(MIDC) started acquiring land to set up

industrial estates. Today, Aurangabad

boasts of Shendra, Chikalthana and

Waluj MIDC industrial areas that

are significant zones on the outskirts

of Aurangabad. These areas, over the

years, have witnessed a steady flow

of investment and are home to both

national and multinational players.

The sectors that have attracted

major investment in the region

are automotive, engineering and

pharmaceutical. In the last few years,

the engineering and automotive sectors

have significantly picked up, giving a

boost to the entire industrial fraternity

here. Aurangabad is the third city in

From being a mere tourist attraction centre to a manufacturing hub, Aurangabad’s journey has been glorious. The city has been growing at a healthy pace over the past few years and is expected to witness a rise in the years to come. Capturing this majestic proposition is the second edition of Engineering Expo Aurangabad. Slated to be held between February 1 & 4, 2013, this trade show promises to be the right connect between organisations and the growth forecasts…

Leveraging market trends, expanding opportunities

D

AURANGABADFebruary 1- 4, 2013Ayodhya Nagari Ground

250 exhibitors

18,013+ business visitors from across India

17,000 business leads generated

Business transacted worth

`70 crore6,250+ products displayed from different industries

1, 00,000 sq ft area occupied

More than 1,10,000 kg machinery moved in for display

83% exhibitors got the expected visitors at the show

180+ delegations

Glimpses of previous edition

250+ exhibitors expected20,000+ visitors expectedBusiness transaction worth

`80 crore expected7, 250+ products on displaySpread over an area of more

than 1,50,000 sq ftShowcasing more than 30 diverse industry categories



Maharashtra after Pune and Nashik

to offer an automotive cluster. Skoda

Auto manufactures its models Superb,

Laura and Yeti and also Passat and

Jetta for Volkswagen and the A4, A6

and Q5 for Audi from its Aurangabad

facility. Recently, Bajaj too launched

its first four-wheeler manufactured in

its facility in Aurangabad.

E l a b o r a t i n g f u r t h e r ,

Chandrashekhar Patil, Partner, Veera

Compressor, explains, “The presence

of some major auto giants has helped

SMEs bloom in Aurangabad. Although

the market has been down for some

time, we are looking forward to a

better times ahead. SMEs definitely

have a bright future in this region and

are poised for growth.”

While the auto industry has made it

big in Aurangabad, pharma giants like

Wockhardt, Lupin and Glenmark have

also made their presence felt. Going

ahead, the IT industry has started

taking baby steps in Aurangabad and

the coming up of Software Technology

Parks of India (STPI) has given it a

further push.

With Aurangabad sprinting towards

additional growth opportunities and

with the region successfully bagging

major investments, it is only a matter of

time when it will attract the attention

of IT giants. Besides, with IT hubs

like Bengaluru, Pune and Hyderabad

already reaching saturation, software

professionals are looking for new

avenues—a factor that could draw

their attention towards Aurangabad.

Aurangabad has a lot of

opportunities and is relatively cost-

effective as compared to other

developing cities. As a result, not

only professionals, but also medium-

sized companies and first-generation

entrepreneurs who want to try their

hands in this industry are considering

investing in Aurangabad.

ENGINEERING EXPO: HARBINGER OF GROWTH By marking its presence in promising

regions, Engineering Expo has

always believed in showcasing

a region’s potential to the right

audience. Highlighting the scope

that Engineering Expo has provided

for SMEs and MSMEs, Jeevan

Deshpande, Proprietor, Samarth

Machinery, exclaims, “Engineering

Expo has provided us a good platform.

It has become a motivation for

traders here. The variety of machines

displayed at the event depicts the

might of this place.”

Deshpande adds, “We were part

of the first edition and were happy

to find the right audience to connect

with. Thanks to the Expo, we were

able to convert these inquiries into

to good business. This year, too, we

expect to make some good business.”

Today, Aurangabad has become

an emblem of an altogether different

Maharashtra—the booming,

increasingly urbanised, economic

powerhouse. With huge industrial

presence of significant corporate

players, the city is buzzing with activity.

Commenting on the value

proposition of the Expo, Sandeep

Khosla, CEO, Network 18 Publishing,

says, “After 10 successful years of

service to the industry, Engineering

Expo today has established itself as

India’s largest multi-location trade

show on manufacturing. The Expo

is a preferred destination for small

and medium enterprises as well

as manufacturing & engineering

organisations to further their growth

and that of the industry at large.

For the 2012–13 season, we have

eight editions spread across an equal

number of locations of a rising India.

Keeping our esteemed exhibitors

and valued customers in mind, we

have made elaborate provisions to

offer a never before experience.

These, we reckon, will add

substantial traction to the industrial

growth of the nation.”

First time exhibitors are also

hopeful to attract target customers.

Sharing the excitement of a first-

time participant, Kusum Soni,

Proprietor, Akshay Heaters, states,

“We are participating in Engineering

Expo for the first time and expect

to interact with representatives from

various engineering-based companies

from different regions/states. We are

hopeful that the event will be a great

success with audiences from various

engineering fields participating in

the event.”

PROMISING FUTURE Aurangabad boasts of a very strong

brigade of young and enthusiastic

first-generation entrepreneurs,

who not only bring new ideas into

implementation but also steer the

region’s growth. With the enthusiasm

and optimism about Engineering

Expo Aurangabad riding high among

this new brigade of entrepreneurs,

the mega manufacturing show is set

to provide a much deserved platform

for developing business opportunities

while leveraging the market trends.

[email protected]

Panel discussion aims at providing a roadmap to infuse growth in the region

Institutional Buyer Involvement Plan to attract delegations from large corporate and major institutions

Improvised visitor profi ling —profi le, scan, fi lter and bring in visitors as per exhibitors’ requirements

Providing business networking support to exhibitors by leveraging Network 18 Publishing’s industry connect

Credit rating facilities for the benefi t of exhibitors

Providing complete travel solutions for exhibitors

Offering logistics services to ensure smooth cargo handling, custom clearing, transport compliance, etc.

NEW ATTRACTIONS IN THIS EDITION

Engineering Expo Aurangabad 2013, continued


RETAIL SUPPLY CHAIN SUMMIT 2012 RETAIL SUPPLY CHAIN SUMMIT 2012 EVENT EVENT REPORTREPORT

NISHI RATH

THE design and management of a

supply chain plays a pivotal role in

the flow of products, information

and funds—factors which are in line

with a supply chain’s success. Keeping

this in mind, Retail Supply Chain

Summit 2012 was designed. With

more channels for trading—including

online, brick and mortar, catalogue, and

many others—coming into existence,

the role of making a supply chain

much more efficient gets even more

complex. Suggesting the way forward,

Kumar Rajagopalan, Chief Operating

Officer, Retailers Association of India

(RAI), said, “To get smarter supply

chain processes in order, there are

a few initiatives that companies can

internally implement, while much

more needs to be done at the industry

level—data management, collaborative

transportation and easier tax processes

being some of the initiatives.”

PANEL DISCUSSIONS AND SESSIONSThe summit took off with the first panel

discussion—‘Leadership Through

Supply Chain Collaboration’. During

the discussion, K Radhakrishnan,

President, Future Fresh Foods Ltd,

urged the audience present to undo

the ropes of the past and prepare

for the future. He advocated the

implementation of GST for free

movement of goods. The panelists

also agreed on the importance of IT in

streamlining the entire Supply Chain

Management (SCM) process. Asif

Merchant, MD, Catwalk Wordlwide

Pvt Ltd, averred, “Systems, software

and processes hold the key for

successful business operation.”

The informative session was

followed by a presentation on ‘Freight

Corridor Services’ by Sharad Ingale,

Chief Commercial Manager, Central

Railway. In his presentation, Ingale

spoke at length about how Indian

Railways offered various cost-effective

options and how an organisation’s

SCM team could put these to use to

save on cost and ensure prompt service.

The panel discussion on ‘Turning

Reverse Logistics Into A Winning

Advantage’ had the panelists agree

upon the fact that in India, the topic

of reverse logistics was not given

due importance. Elaborating further,

Devadas Nair, Head – Supply Chain

and Mission Control, Shoppers’

Stop Ltd, expressed, “The attitude

towards reverse logistics is – There is

always a tomorrow.” Additionally, the

experts discussed about how the lack

of knowledge and commitment have

become major hindrances retailers face

with regard to reverse logistics.

SUPPLY CHAIN AND NATURE GO HAND IN HANDThe panel discussion on ‘Sustainable

Supply Chains - Ensuring A Triple

Bottom Line Approach’ saw Bhavna

Prasad, Director – Sustainable Business,

WWF, sharing an interesting take on

conserving natural resources to ensure

SCM remained seamless in the future.

Apart from this, R Mathrubootham,

Director – Legal Metrology (Retd)

Department of Consumer Affairs,

Government of India, spoke at length

about Legal Metrology. He updated

the audience on the legalities related

to ensuring seamless supply chain &

business operations.

ALL’S WELL THAT ENDS WELLThe concluding session of the day-

long summit, ‘Improving Supply Chain

Efficiency with Data Standards’ saw the

panelists advocating standardisation on

barcodes to tackle uncertainties at each

level of a retail transaction. The summit

saw participation from more than

200 delegates from the industry and

focussed on increasing customer service

levels by maximising responsiveness in

the supply chain. The event ended

on a positive note with participants

looking forward to implement various

successful practices and improve the

supply chain, as a whole.

[email protected]

With globalisation spreading its reach and competition getting fi ercer by the day, supply chain has become a critical issue for any company. Supply chain is all about getting the right product to the right place at the right time. But how does one ensure its smooth execution? Shedding more light on the same, the Retailers Association of India (RAI) with Smart Logistics as its media partner, recently organised the second edition of the Retail Supply Chain Summit 2012 in Mumbai. A report…

Retail gets in sync with supply chain

(L-R): Lt Col Vijay Nair, AVP, Reliance Digital Retail Ltd; Devadas Nair, Head – Supply Chain & Mission Control, Shoppers’ Stop Ltd; Kapil Premchandani, MD, KD Supply Chain Solutions Pvt Ltd; Jayesh Patel, CFO & Head – Logistics, Globus Stores Pvt Ltd; Sanjay Nadkarni, Co-Founder, Babyoye.com; Sethumadhavan M, Business Head – Supply Chain Services, ITW India and Kashyap Mehta, Business Head – E-Commerce, Infi niti Retail Ltd


TENDERS TENDERS

Latest Popular Tenders brought to you by www.tendersinfo.com

Org: Organisation’s Name, TRN: Tendersinfo Ref No, Desc: Description, DSLD: Doc Sale Last Date, BOD: Bid Opening Date, Loc: Location, BT: Bidding Type.

INFORMATION COURTESY: TENDERSINFO.COM

1, Arch Gold, Next to MTNL Exchange, Poisar, SV Road, Kandivali (W), Mumbai - 400067, Maharashtra, India

Tel: +91-22-28666134 • Fax: +91-22-28013817 • Email: [email protected]

FLAT BED TRUCK

Org : Indian Army

TRN : 13648225

Desc : Supply of flat bed truck

BOD : December 30, 2012

Loc : India

BT : Domestic competitive bidding

CARGO SERVICE

Org : Indian Oil Corporation Limited (IOCL)

TRN : 13922265

Desc : Handling of filled/empty lubricating oil/grease barrels and cartons/buckets

BOD : January 1, 2013

Loc : India


CRANE

Org : North Eastern Railway

TRN : 13628482

Desc : Providing of break down crane


Loc : India


FORK LIFT

Org : National Hydroelectric Power Corporation Limited (NHPC)

TRN : 13854242

Desc : Supply of 5-tonne capacity diesel operated forklift truck


Loc : India


TIPPER TRUCKS

Org : Northeast Frontier Railway

TRN : 13823010

Desc : Supply of tipper truck


Loc : India


TELESCOPIC BOOM CRANE

Org : Hindustan Copper Limited

TRN : 13918771

Desc : Procurement of telescopic boom crane


Loc : India


DUMPER TRUCK

Org : Bharat Coking Coal Limited (BCCL)

TRN : 13544133

Desc : Supply of 60T rear dumper


Loc : India


TRUCKS

Org : Karnataka Co-Operative Milk Producers Federation Ltd

TRN : 13947000

Desc : Providing milk transportation vehicle


Loc : India


PROJECT

HALDIA LOGISTICS PARK PROJECT

Org : Apeejay Infralogistics Pvt Ltd

Project Type : Construction

Project News : Setting up Haldia integrated logistics park

Loc : India

Project Cost : `200 crore

Implementation Stage : Ongoing

Contact : Apeejay Infralogistics Pvt Ltd

Aditi Basu, Corp Comm, Apeejay House, 15, Park Street, Kolkata – 700016.

Tel : +91 33 4403 5455-58

Fax : +91 33 2217 2075

Email : [email protected]


PRODUCT UPDATE PRODUCT UPDATE

This section gives information about products, equipment and services available in the market. If you know what you want. . .refer to Product Index on Page 64 to find it quickly

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Th e standard pins are off ered with two locking balls, but can also

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available in alloy or stainless steel.

Steel – Smith

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Tel: 0250 – 6457800 / 36 / 37 / 38

Fax : 0250 - 2456970

Email: [email protected] , [email protected]

Website: www.steelsmith.com

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Kabel Schlepp India Pvt Ltd

Bengaluru - Karnataka

Tel: 080 - 41158997

Fax: 080 - 4115-8998


Website: www.kabelschlepp.de

� REUSABLE PLASTIC CONTAINERS AND CRATES

Reusable plastic containers are fundamental for

transporting, distributing and storing fruit and

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Benefi ts include reduce stocking time by 69% with a display

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the container when not in use, reduced fruit and vegetable

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Chep India Pvt Ltd

Mumbai – Maharashtra

Tel: 022 - 67839400


Website: www.chep.com

� STACK-A-DRUM PALLET RACK

Stack-a-drum pallet rack is designed ergonomically to store

two drums per pallet. It is easy to move and can be moved

individually or with the help of stack and a forklift truck.

It has a high load-bearing strength and the cradles of the product

are made from mild steel pressed channels that can be shipped in

� WING PALLETS

Wing pallets are designed with precision to off er apt

strength for bearing high load. Th ese pallets can be

used for stacking only on one side and are provided

with two-way entry for forklift and stackers. Th e product is

compatible with all

kinds of material

handling equipment.

Customisation of size

as per the requirement

of the clients is also

provided. Th e key

features of the product

are as follows: High load carrying capacity ranging from 500 Kg

to 3000 Kg, specifi cally designed for use in drive-in-racks, highly

durable, low maintenance.

Stakall

Thane - Maharashtra

Tel: 250 -2456970, 2452433, 08600047373

Fax: 250 – 2452530

Website: www.stakall.in


Product update, continued

It is mainly used for storage and order picking of non-palletised

goods, bins and cartons. It is also designed with adjustable

shelves to carry maximum load with suitable ladders, handrails

and catwalks for easy operation of the racking system.

Lifelong Metal Products

Chennai – Tamil Nadu

Tel: 09840055065, 09385255065, 09884013701


Website: www.lifelonginfo.in

� WOODEN PALLETS

Wooden pallets

are

compatible

with existing supply

chain infrastructure. It

helps achieve greater

effi ciencies during

transport and storage

with 2-way or 4-way

entry design. It also helps reduce occupational health and safety

risks to the workforce through the ability to safely rack and carry

heavy loads. Pooled wood pallets are durable, cost eff ective and

environmentally sustainable.

Chep India Pvt Ltd

Mumbai – Maharashtra

Tel: 022 - 67839400


Website: www.chep.com

� BELT CONVEYOR

PNL-MS series belt conveyor with metal detector is a

device which can detect the metal contained in the

material during

conveying and simultaneously

activate the alarm. It is

mounted on patented

“FUTURE” fl oor stand. It

has an adopted PVC belt for

smooth and effi cient

conveying. Th e fl oor stand is

height adjustable. It has an

angle adjustable function

with a range of 0°~25°. Sidewalls for PNL series is 75 mm

respectively. It has a speed adjustor with 0~6 m/min adjusting

range. Power supply requirement is 1Φ, 230V, 50/60Hz.

Shini Plastics Technologies India Pvt Ltd

Thane - Maharashtra

Tel: 250-3021166(88)

Fax: 250-3021100


Website: www.shini.com

knockdown condition. Th e

product can be availed in only

standard size with a capacity

of 200 litres. Th e salient

features are: stacking up to 4

units high, quickest, easiest,

and safest method of handling

steel drums and is accessible

from all four sides.

Stakall

Thane - Maharashtra

Tel: 250 -2456970, 2452433, 08600047373

Fax: 250 – 2452530

Website: www.stakall.in

� TWO TIER RACKING SYSTEM

Two tier racking system is designed for areas of limited

storage capacity. It is recommended for warehouses where

goods are stored

and removed manually from

the shelves. Th e cost-

eff ective system increases

storage effi ciency,

capitalising on the vertical

space available thereby

providing maximum

optimisation of fl oor space.

� SOCKET PIN WITH SPRING LOADED BALL

The balls are spring

loaded in these pins and

not locked. You can

either insert or remove the pin

by simply pushing / pulling it

with minimal hand pressure.

Th e balls in the pin ensure

positive locking and the spring

ensures that it does not open in case of vibrations. Th e ball lock

pins are available in 6 diff erent outer diameters and the length is

to be decided by the customer as per the application. Th e pins are

off ered with two locking balls

Steel – Smith

Thane - Maharashtra

Tel: 0250 – 6457800 / 36 / 37 / 38

Fax : 0250 - 2456970

Email: [email protected], [email protected]

Website: www.steelsmith.com


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For exclusive offers log on tohttp://eshop.infomedia18.in

Magazine Subscription Made Simple

Vol. 02 | Issue 06 | SEPTEMBER 2011 ` 100/-

� HYDRAULIC HANDLIFT PALLET TRUCK

The hydraulic handlift pallet truck

meets the growing demands for

low priced hydraulic truck that

off ers high quality, reliability and ease of

handling. Th e advantages of the pallet

� BARCODE PRINTER

Barcode printer off ers features

found in industrial printers but at

a desktop printer size and price.

It is the best solution for grade label and

receipt printing. It off ers a locking media

cabinet and suffi cient internal media

capacity to hold a 7.2-inch roll of media

or stack of fan-folded media. It is also

equipped with fast print speed, real-time clock, audible alerts and

large display.

Datamax-O’Neil

California - USA

Tel: 949-458-0500

Fax: 949-458-0708

Web: www.datamax-oneil.com

� EOT AND HOT CRANES

These EOT and HOT cranes are available in both single-

girder and double-girder ranging from 500 kg to 50,000

kg capacity. Th e cranes are designed and manufactured

in accordance with IS:3177

considering proper factor of safety

with respect to appropriate duty

classifi cations. Diff erent types are

available, like double-girder

overhead travelling cranes, single

girder overhead travelling cranes,

truck become apparent as soon as it is put into service, time saved

in handling, greater use of fl oor space, reduced handling costs.

Speed and effi ciency with which the truck enables the operator to

lift and transport loads, facilitates production, storage and

delivery operations. Th e hydraulic pallet truck is available in

standard capacity of 1 ton to 3.2 ton and in other tailor-made

capacities and sizes.

Agromec

Meerut - Uttar Pradesh

Tel: 0121-2440660,


Website: www.agromecindia.net


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Disclimer: “The Company is proposing, subject to market conditions and other considerations, an offer of its equity shares on rights basis and has filed a Draft Letter of Offer with the Securities and Exchange Board of India (“SEBI”). The Draft Letter of Offer is available on the website of SEBI at www.sebi.gov.in and the website of the Lead Manager at www.icicisecurities.com.Investors should note that investment in equity shares involves a high degree of risk and are requested to refer to the section titled “Risk Factors” of the Draft Letter of Offer for details of the same.”

http://eshop.infomedia18.in

Super India Packers & Movers

New Delhi

Tel: 011-26783319


Website: www.superindiapackers.com

heavy-duty overhead travelling cranes with main and auxilliary

hoists, under slung cranes, EOT/HOT crabs, etc. Th e cranes

are used in steel mills, foundries, paper plants, cement plants,

power plants, dairy plants, chemical plants, fertiliser plants,

petrochemical plants, engineering plants, textile industries,

general industries, etc.

Techno Indus

Ahmedabad - Gujarat

Tel: 079-2583 0742, 09313159058


Website: www.technoind.com

� WAREHOUSING STORAGE FACILITIES

Spacious warehousing

storage facilities are

off ered for products

that are in transit phase.

Customers’ goods are kept safe

in the warehouse until they

are delivered to the desired

destination. Th e warehouse

facility is well-planned as per international standards so that

safety of the goods from natural calamities or any other accident

is ensured.

� EOT CRANES

The rational

structure of the

crane is of box

construction adequately

designed and reinforced

by stiff ening ribs. It is

connected with bridge trolley, which is moved by motors,

coupled up with speed reducers. Th e crab carriage is in the steel

section. It comprises of special crane duty motor, connected to

speed reducers and is coupled to a grooved steel drum.

Electromagnetic brakes are used to control the smooth lifting of

weight. AC drive is also provided (on demand) for smooth

operation of long travel. Th e hook is equipped with a forged

steel forked revolving hook. Wire rope is of 6 x 37 construction.

Friends Engineering Works

Udaipur - Rajasthan

Tel: 294-2492200, 294-2494379, 09829042424

Product update, continued


The information published in this section is as per the details furnished by the respective manufacturer/distributor. In any case, it does not represent the views of


Just type SL (space) Product Name and send it to 51818eg. SL Forklift and send it to 51818

� CAGE PALLET

Cage pallet is completely

designed with extreme

quality raw material and

are procured from renowned

industries. Th is cage pallet comes

in diff erent specifi cations with

respect to its application. Base is

made of MS tubular structure with sides of wire mesh provided

at the bottom for forklift or pallet truck entry. It is a self-

cleaning see-through pallet and can be stacked one upon the

other. Wire mesh container is stackable and totally collapsible.

Th e wire mesh pallet is used in automobile industries as well as

warehouses of large factories. It has up to 1000 kg weight

bearing capacity with even load distribution.

Ahlada Industries Pvt Ltd

Hyderabad - Andhra Pradesh

Tel: 040-23094301,


Website: www.ahlada.com

� HYDRAULIC CRANES

The truck-mounted

hydraulic cranes

superstructure frames is

fabricated from high-tensile steel

plates and sections with

mechanical superstructure lock

operated from cab. Th e 3-section

fully synchronised fully telescoping box section boom is fabricated

from high-strength low-alloy steel plates with internal and

external welding. Boom derricking has a single- double-acting

hydraulic ram mounted on a large diameter bushes.

Til Ltd

Kolkata - West Bengal

Tel: 033-25531352


Website: www.tilindia.in

� ALUMINIUM CRANE SYSTEM

Aluminium light crane system

applies the strength and low

weight of aluminium to every

light material which needs to be lifted.

Th ey can handled low loads up to 2

metric tonne across a wide variety of rail

types. It is a robust, cost-effi cient

solution. An anodised aluminium surface

ensures the long-term durability of the

system purchase. Th e modular design, requiring no welding or

painting, greatly reduces downtime during installation,

expansion, or upgrade.

Konecranes India Pvt Ltd

Pune - Maharashtra

Tel: 020-40047470


Website: www.konecranes.com


Web: www.friendseng.com

� WEIGHING TERMINAL

Weighing terminal houses

dual indicators, dual

junction boxes, controller

card, SMS unit which will prevent

unauthorized access to the junction

box / indicator for weight adjustment/

tampering. It is a stainless-steel-

rugged-enclosure. Also present is a hot

redundant system which automatically switches in case of failure

within 12 seconds. Th ere is a status-indicating LED for running,

standby. Auto change back to master channel after repair/reset of

master section is possible. Th ere is a self diagnostic run of each

channel on “power on” every time.

Essae Digitronics Pvt Ltd

Bengaluru - Karnataka

Tel: 09342332374

Website: www.essae.in

PRODUCT & ADVERTISERS’ INDEX


COC = Cover-on-Cover, FIC = Front Inside Cover, BIC = Back Inside Cover, BC = Back Cover

Our consistent advertisers


Just type SL (space) Product Name

and send it to 51818eg. SL Forklift and send it to 51818

DENDE

Aluminium crane system .............................................................................. 63

Auto FLC ...................................................................................................FIC

Ball lock pin ................................................................................................. 59

Barcode printer ............................................................................................. 61

Belt conveyor ................................................................................................ 60

Bulk transportation......................................................................................... 4

Cage pallet .................................................................................................... 63

Contract logistics ............................................................................................ 4

EOT and HOT cranes ................................................................................. 61

EOT crane ................................................................................................... 62

Fleet management service ......................................................................... BIC

Foldable plastic crates .................................................................................FIC

Folding large container (FLC) ...................................................................FIC

Hydraulic crane ............................................................................................ 63

Hydraulic handlift pallet truck ..................................................................... 61

Infomedia yellow pages ................................................................................ 37

Logistics service ....................................................................................... 5, BC

Pallets .........................................................................................................FIC

Plastic cable carrier ....................................................................................... 59

Relocation ...................................................................................................... 4

Reusable plastic containers and crate ............................................................ 59

Socket pin with spring loaded ball ................................................................ 60

Stack-a-drum pallet rack .............................................................................. 59

The Fresh Connection : Global Challenge 2013 Schedule .......................... 29

Two tier racking system ................................................................................ 60

Vehicle tracking service ............................................................................. BIC

Warehousing ................................................................................................... 4

Warehousing storage facilities ...................................................................... 62

Weighing terminal ........................................................................................ 63

Wing pallet ................................................................................................... 59

Wooden pallet .............................................................................................. 60

Products Pg No

To know more about the products & advertisements featured in this magazine, write to us at [email protected] or call us on 022-3003 4640, and we will send your inquiries to the

companies directly to help you source better.

Alpha Analytics Services Pvt Ltd BIC

T: +91-20-25897063

E: [email protected]

W: www.alpha-analytics.com

Chep India Pvt Ltd FIC

T: +91 022 67839400


W: www.chep.com

DRS Dilip Roadlines Pvt Ltd 4

T: +91-040-39818800


W: www.drsindia.in

Engineering Expo 6

T: +91-9819552270


W: www.engg-expo.com

Network18 47

T: 91+022-303242518


W: [email protected]

Safexpress Private Limited 5,BC

T: +91-1800-113-113


W: www.safexpress.com

The Fresh Connection : Global Challenge 2013 Schedule 29

T: +91.124.430.4673

W: www.ThinkLink-SCS.com

Advertisers’ Name & Contact Details Pg No

Second Fold Here

First Fold Here

Second Fold Here

First Fold HereFirst Fold Here

Third Fold HereGLUE

Use this form for free additional Information on advertisements published in this issue. We will send your inquiries to the advertisers and ask them to send you the details or contact you directly.

HOW TO USE THIS FORM: • Please tick against the box of advertiser(s) you are interested in: • Mention specific product/service you

need, against the advertiser’s name • Complete all the details on this form. • Tear the form & mail it to us. (It is a prepaid mail)Tel.: +91-22-3003 4640 • Fax: +91-22-3003 4499

E-mail: [email protected]

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�PRODUCT INQUIRY FORM

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�

ADVERTISERS’ INQUIRY FORM

Aluminium crane system

Auto FLC

Ball lock pin

Barcode printer

Belt conveyor

Bulk transportation

Cage pallet

Contract logistics

EOT and HOT cranes

EOT crane

Fleet management service

Foldable plastic crates

Folding large container (FLC)

Hydraulic crane

Hydraulic handlift pallet truck

Infomedia yellow pages

Logistics service

Pallets

Plastic cable carrier

Relocation

Reusable plastic containers and crate

Socket pin with spring loaded ball

Stack-a-drum pallet rack

The Fresh Connection : Global Challenge 2013 Schedule

Two tier racking system

Vehicle tracking service

Warehousing

Warehousing storage facilities

Weighing terminal

Wing pallet

Wooden pallet

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Alpha Analytics Services Pvt Ltd

Chep India Pvt Ltd

DRS Dilip Roadlines Pvt Ltd

Engineering Expo

Network18

Safexpress Private Limited

The Fresh Connection :

Global Challenge 2013 Schedule

Please complete the following & get a quick effective response from suppliers: 1. Your company’s business function is (�one only)

� Wholesalers � Manufacturer � Distributor � Agent � Other, please specify ______________

2. Your role in your company’s buying process can best be described as:

� I buy � I identify potential suppliers � I approve purchases� I negotiate contracts � I select suppliers.

3. Your line of business

4. Specific product requirement

Name:

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Tel: Fax:

Email:

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smart logistics - january 2013

Documents

retail market

retail procurement systems

organised retail chains

multibrand retail

supply chain value chain

share of organised retail

singlebrand retail

supply chain sector