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amit mukherjee, Vicepresident (iT and supply chain) and group cio at rpg, has deployed exemplary supplychain strategies at spencers retail >> page 34
Method In Motion
Moving Lifes Goods
network equipment opens How to avoid heartburns a window of opportunity when signing SLAs.
low Page 34 adopTioN 24 waTErways 44 COLD CALL: Why WMS still does Theres business and support. But ignoring inland cold-chain cos?...08 India is where are the not haveIS HERE: Industrys first enterprise-only awards were given away in May...12 waterways at its own IILF enough takers in India peril THE ANSWER IS: Our expert offers solutions for your warehouse woes...44
KK Kaul, VP (Head - SCM), LG Electronics India Ltd, has set up the Korean giants India supply-chain fromNEglEcTEd scratch. Heres how.
eDITORIAL
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t is a common refrain here and abroad that Indians are not good at innovation. Bullshit. I think that while saying so, people confuse invention with innovation. Let me get that straight for the purpose of this piece: Invention is creating something new; innovation is improving upon something a process or a device that already exists. When I look hard, I see examples of innovation, or at least the spirit of innovation, all around me. I see it when I drive to work. When I pass the busy spots where there is a jamming of cars and bikes from all sides because the road is narrow, where some construction activity is perpetually on, and there is no traffic constable in sight, the traffic still moves even if exasperatingly slowly. Motorists, bikers and pedestrians will use every inch of available space to move ahead. There is a silent understanding between the motorists, bikers and pedestrians that anyone who finds any maneuvering room will move ahead. Road rage and accidents rarely happen at these spots people in Mumbai know that every second gone waste and every dent caused is money lost. So the traffic moves, even if at snails pace, but it moves (I am not counting the days when we have the religious processions on our roads). I am willing to bet my last shirt who can show me that traffic can move amid such conditions in any part of the world. Yes, accidents and road rages happen in the city Mumbai tops the country in the number of fatalities and injuries from road accidents but almost all of that happens when the roads are wide enough and the vehicles are speeding. Bizarre example of innovation, I know. It will sure look bizarre when it annoys you and it is bound to annoy those like us who believe in systems and processes. But look at this phenomenon with a calm mind, look harder and you will notice its an example of collective innovation at work. If its necessity that breeds invention, its constraint that fathers innovation. At these spots, the infrastructure is in shambles, roads are narrow or perpetually dug up, and poorly planned flyovers/metro-rail/monorails, since they are such great conduits for easy bribe-money, keep coming up with regularity, people using these roads are left to fend for themselves. So strangers silently cooperate with each other and break rules. The traffic moves. And nobody gets hurt. Brilliant. Expand the principles hidden in this example and apply it to our economy and you will know why India is growing fast, despite the poor physical, administrative, and academic infrastructure. We are a nation of innovators. We will find ways to move ahead even when there are none. That brings me to an awards function we organized in May. You guessed it it was themed on innovation. Log.India and Drive India Enterprise Solutions Limited (a Tata Group company) jointly organized the IILF (India International Logistics Forum) Innovation Awards that were given away at a function held at the Taj President on May 20. What happened during that day is as important as what
happened before it. I was a part of the jury and I can tell you now that we did not get the number of entries that we expected. We got big names Larsen & Toubro, Ericsson, Dr. Reddys, etc. to apply for the awards. But the numbers of entries were not good. Thankfully, at the final stage we had enough entries to choose from and I can confidently say, that for the first enterprise-only and innovation award, the response exceeded expectations. That said, it was difficult to find true Aanand Pandey examples of innovation in Editor a number of entries. Some applicants had confused innovation in logistics and supply-chain with implementing a new project even if the project was used to solve the same problem elsewhere. Instead, we were looking for individual examples (not projects) where one would have worked outside or against the norm, used unconventional ideas and improved efficiency. The winners had done exactly that an FMCG company had tweaked its factory-to-depot replenishment model and focused extensively on distributor-service levels to achieve huge improvements in savings and efficiency at the retail-shelf level. Another winner had simply used big placards to tag pallets at the warehouses so the pallet-numbers can be seen from a distance the workers now did not need to go close to every single pallet to jot their numbers a similar method is used by car resellers to tag cars. Cumulatively, the pallet-tagging method saved a lot of time, and hence money, at the warehouse level. Simple, efficient, and unconventional. Thats what we were looking for. Sadly, such cases were few and far between among the entries that we received. The reasons could be many the awards are new for the industry, it needs to be marketed better the next time, and so on. But if someone may have a view and there are many who think so that examples of innovation are hard to come by in our industry, I will totally not buy that. I think we just need to look hard enough.
Aanand Pandey
aanand@logisticsweek.com
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Contents
8 AnAlysis
Fresh Look At Cold Chain Sector
The cold chain sector is finally getting its due both from the government and the industry.
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12 Upshot
20 24 FeAtUre
Cross Connection
12 16 ColUmn
The Question Of People
A skill-gap definitely exists. However, just mindlessly accumulating labor need not necessarily be the solution to the problem.
Lack of proper communication and understanding between clients and service providers leads to friction when it comes to formulating service-level agreements.
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6
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June 2011 | www.logisticsweek.com
ADVeRtIseRs InDeX
ARMSTRONG Limited. ............................................. 41 BLR Logistiks .......................................................... 32 Capricorn Logistics ................................................. 43 Cemat ..................................................................... 51 CII Institue Of Logistics ........................................... 42 Container Logistics & Infrastructure summit ........... 26 DIESL ......................................................................BC EXIDE Industrial ...................................................... 55 Gandhi Automation .................................................... 9 Hormann India pvt Ltd ..............................................11 Mahindra Navistar ..............................................30-31 Manforce Trucks .................................................... IFC Oilfield Warehouse & Services................................. 49 Pharma & helathcare supply chain.. .......................... 3 Phenix ................................................................... IBC RK Foodland Pvt Ltd ................................................ 47 Safexpress .............................................................. 45 Saudi Transtec ........................................................ 28 Schaefer Systems International Pvt Ltd ....................17 Shree Rajlaxmi Logistics Limited............................. 21 Shree Rajlaxmi Logistics Limited............................. 23 State Bank Of India ..................................................19
34 44 BenChmArKinG
Whether you are a warehouse manager, or a warehouse owner or just a supply-chain enthusiast wanting to know more about warehouse management, we have an expert you can turn to every month for all your queries.
mAy 2011
IndIas LeadI ng LOgIs tIcs www.l
DIA INDIA
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46 BACK to BAsiCs
We explore three terminologies: RFID, Management Information Systems, and Key Performance Indicators.
48 pAnorAmA
Books, Journals, Blogs, Technology, C-Profile, and Solutions - a look at what's new in and for the supply chain industry.
fastchain keep TElEcom ing things lean. logisTics 20 low Page 18 FAST FORW Movement of ARD teleco46 adopTioN netwoand 24 Trials rk equipm m triump ent ON TOP:
How Abhijit Upadhye, Seni National Supp or Director, ly Chain, McD India, runs onalds the logistics of a huge, growing
Served Smart
amit mukherje e, Vicepresident (iT and sup ply chain) and group cio deployed exem at rpg, has plary supp chain strat lyegies at spen cers retail >> page 34
Method In Motion
Why WMS still Things that top does waTErwa not have enough ys 44 retail SCM perfor LOSE CON mers ignorin India isdo to takers in India TROL: How Japan g inland HIGH WATE s tragedy waterways stay ahead of the game. has affecteat its own ..10 RS: An in-dep d global logisti th report on peril cs...16 the maritime cargo trade in India...32
NEglEcTE d
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< AnAlysis
Train of ThoughT
An empowered group of ministers on food will meet to take a definite view on the total requirement of food grains under the Food Security Act and then we will take a view on export. sharad Pawar, Agriculture Minister on the governments decision to lift the export ban on wheat and non-basmati rice, in an interview with livemint.
Globalization of todays business operations calls for a special emphasis on the performance of supply networks. Green logistics in combination with intelligent systems can reduce burden on the environment. Dr Khaled Al Mazrouei, Founding President of Green Aviation logistics Group, Middle East on the trend of entrepreneurship in Indian logistics, in an interview with livemint.
Seeking cooperation of states in containing price rise, efforts are needed to improve farm productivity in agriculture, develop rural infrastructure and revamp public distribution system to address supply issues and contain inflation. D. subbarao, RBi governor while speaking at 24th Conference of the State Financial Secretaries.
With local retail chains and global retailers eyeing the Indian market, there is a greater demand for advanced warehousing services. The private warehousing sector which is highly fragmented should reorganize itself. Anil Khanna, MD, Blue Dart Express in an interview with India Infoline.
s an emerging market with an economy which is developing at an exuberant and attractive growth rate, India needs an efficient and effective cold supply chain system which will continue to propel its growth upwards. While in the past cold chains or what in effect is the cold supply chain, were scarcely understood or worse, misinterpreted, leading to parlous conditions in the economy, today there appears to be widespread awareness that cold chains will vastly strengthen the economy. The government and industry too are reexamining the sector and have understood its potential for buoying the economy.
natural Advantages
According to the Federation
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of Indian Chambers of Commerce and Industry, food wastage reached the incredible figure of `30,000 crore in 2010 (it has declined from the stratospheric level of `58,000 crore in 2004!). This despite the fact that India is the second largest producer of fruits and vegetables in the world, but with cold storage facilities available for only 10 percent of the produce. Industry sources disclose that the country is the fifth largest producer of eggs and the sixth largest producer of fish, but with an abysmal supply chain system, 35 percent of production is consigned with depressing regularity to the trash can. India has certain vital attributes and natural resources it has 52 percent of the total land that can be cultivated as against 11
percent in the rest of the world and 20 diverse agro-climatic regions in the country. These advantages, if properly harnessed, could equip the country to feed not just its own people, but the rest of the world. A well-defined logistics and cold supply chain system working in tandem could power the country to this enviable position and also immeasurably energize its growth. Apart from rejuvenating its own economy, India could be the food basket of the world if we had an efficient cold chain supply system, says Pawanexh Kohli, Founder of CrossTree techno-visors and Senior VicePresident, Arshiya International Ltd. To be the food basket you have to export food to Europe, Dubai, Singapore, the US and maybe, one day, Africa and only
Apart from rejuvenating its own economy, India could be the food basket of the world if we had an efficient cold chain supply system."
Pawanexh Kohli, Founder of CrossTree techno-visors and Senior Vice President, Arshiya International Ltd.
< AnAlysis
balloon to $9 billion by 2015 according to Mr. Kohli, who apart from being a cold chain specialist, offers innovative advice with a few professional peers on the website www. crosstree.info. Their entrepreneurial vim has cleared many of the misconceptions about the industry which now stands on the threshold of growth. The industry, however, will have to clear the obstacles in its path before it can dream of unfettered growth. sourcing and moving of goods from one place to another, it has happened at a real scale for not more than four or five years. So this has not permitted any development of skill sets. The complicated nature of the industry has also hampered growth. In any other supply chain when a factory manufactures a product, the supply chain delivers it to the market, with an attractive price realization accruing to the product. The cold supply chain is the only supply chain which not only transports the value of the product, but actually affects the value realization of the product. This is due to the fact that the cold supply chain transports fresh products which have to be delivered in a particular time matrix, else the price declines. Defective supply-chain Service Level Agreements (SLAs) and an inability to maintain required parameters force the price to slide further. Any ordinary person who gets into the business, notes Mr. Kohli, discussing the subject with great fervor, is suddenly affected by debit notes, and penalties because he did not realize the operational excellence that needs to be maintained. While the rest of the supply chain says, Im carrying boxes, in the cold chain you need to understand the product. the last 20 years the government has indulgently loosened its purse strings for the construction of cold stores. This has led to a proliferation of cold stores, especially in Uttar Pradesh and West Bengal. Uttar Pradesh and West Bengal have above 50 percent of the cold storage capacity in India, reveals Pradeep Dubey, General Manager, Snowman Frozen Foods Limited, but most of them are just single commodity stores. In UP, where 41 percent of the stores are located, most of them are used for storing only potatoes. The construction of cold stores cannot be arbitrarily equated with the development of the cold supply chain industry. Look, anyone who sells anything knows that you need to move to the market, remarks Mr. Kohli candidly. In the cold store, if you are going to store things long enough, its going
Theres not enough demand for quality cold chains because high costs prevent usage of such facilities."
Abhijit Upadhye, Senior Director-National Supply Chain, McDonalds India
Hard Realities
The cold chain industrys dreams of proliferation have been turfed out by hard realities on ground. Says Abhijit Upadhye, Senior Director-National Supply Chain, McDonalds India: Theres not enough demand for quality cold chains because high costs prevent usage of such facilities. A lot of companies are ready to compromise on such facilities. We are one of the few users of cold chains. But Mr. Kohli cites deeper reasons for the malaise. He believes that the industry has been established in a very fragmented and unstructured way by small and medium enterprises (SMEs) and single entrepreneurs in a manner which has not permitted development of skill sets. The ground work has to be laid out carefully for any new industry which starts off, argues Mr. Kohli. After all, even with the software industry it took 12-15 years before it reached the stage where an Infosys could happen. So similarly, the cold chain industry which at one level has been around for 25 years, but at another level, where we are talking about a structured cold chain industry with organized
the cold chain will allow India to expand its portfolio of food exports.Mr. Kohli received the Cold Chain Personality of The Year (Individual) award at the KPMG-Supply Chain Leadership Council Summit Awards on December 3, 2010.
Huge Market
Increasingly, the consumption pattern of Indian consumers is changing swiftly with more customers consuming frozen food and vegetables. Malls and food courts across the country, even in Tier-II and Tier-III cities, stock abundant quantities of perishable food to cater to this ever-increasing market. But acute deficiencies in the cold chain supply system have prevented this nascent industry from fulfilling its true potential and growth. The market for cold chain supply systems is estimated to
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Uttar Pradesh and West Bengal have above 50 percent of the cold storage capacity in India."
Pradeep Dubey, General Manager, Snowman Frozen Foods Limited
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to perish. And this is how the situation is in the cold chain sector, we have 12 percent of transport and 88 percent of storage when it should be the right opposite! You produce something, please move to the market, reach the consumer and sell it. Dont store it, for Gods sake!
Financial incentives
The government appears to have read the script New investments are well and in the Budget coming in whether 2011-12 has attempted its in cold chains or to make generous provimovement of goods sions for the cold chain and products. There sector. Some of the salient will be a good return on features of the Budget are investment for the right that full infrastructure business model, with status with Viability Gap the right clients and the Funding has been anright approach." nounced for the industry. Purvin Patel, Customs duty to set up Chief Operating Officer, cold storages has been Radhakrishna Foodland further reduced to 2.5 Pvt. Ltd percent, while excise duty has been exempted on all cold chain equipment. Fifteen more mega food parks will be set up in the country (15 such parks were sanctioned in the last fiscal). With the financial buffer of the budget, the mood in the industry appears to be reasonably upbeat. Purvin Patel, Chief Operating Officer, Radhakrishna Foodland Pvt. Ltd, emphasizes that new investments are coming in whether its in cold chains or movement of goods and products. There will be a good return on investment for the right business model, with the right clients and the right approach. The government is hoovering up its investment in the cold chain sector and according to Mr Kohli (he is a member of the task force set up by the Centre and the Confederation of Indian Industry (CII) in 2006-07 which is still active) is planning an investment up to `8,000 crore in the agri-business which includes the cold chain sector. The governments largesse, combined with its newfound sense of purpose and understanding of the sector, could mean that cream salad days are here for the cold chain industry in India.
Sources: *newsroom-meattradenewsdaily.co.uk, *www.ibef.org *N.Viswanadham, Indian School of Business, Working Paper
www.hormann.in |
More Information:
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Kishore Chaukar, Managing Director, Tata Industries, inaugurates the Third Annual Supply Chain Summit. Ajay Chopra, CEO, Drive India Enterprise Solutions Limited (in the background) gave the welcome note.
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(L-R) Prem Verm, CEO, TML Distribution Limited; Juzar Mustan, Country Head (India), TKM Global Logistics; Brahmanandam Gadipudi, Additional Vice-President and Head - SCM, Tata Teleservices; Ashu Gupta, Associate Vice-President, Distribution and Logistics, Wockhardt; Mayank Kaushik, Manager (MT-9), Supply Chain Division, Maruti Suzuki, deliberate on the topic 'Choosing The Right LSP'.
(L-R) Nitin Agarwal, Competence Center Head - Strategy, Miebach Consulting; MR Sundaresan, Director - Operations, Dell India; Amit Dev Banerjee, Head - Supply Chain (Parts), Tata Motors; Abhijit Chaudhuri, Director - Supply Chain, Ispat Industries, participate in a panel discussion titled 'Building A Change-Ready Supply Chain'.
Nikhil Chalakkal, Project Consultant, Supply Chain Structure, Material Flow and Process, Miebach Consulting, and Sarang KV, Project Manager, Miebach Consulting present the theme paper on 'Embracing Change in SCM'.
Speakers Sarang KV of Miebach Consulting, Prem Verma of TMDL, and Sandeep Maini, Chairman, Maini Group consult notes.
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< pRimER
Ajay Chopra presents the 'IILF-ISC Best Innovation in Technology' award to the HyperCity team.
Pooja Pant, the danseuse enacts a Kathak performance at the Awards function, and pays tribute to the Divine Creator.
Lt Col Vijay Nair (Veteran), GM, Supply-Chain Management, HyperCity Retail (India), presents the IILF-ISC 'Best Innovation in Logistics Transportation' Award to the Larsen & Toubro (L&T) team.
Dr Rakesh Singh, Director, Durgadevi Saraf Institute of Management presents the IILF-ISC 'Best Innovation In Supply-Chain Strategy' Award to the Marico team.
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Vikram M Kulkarni, Head - Parts & Aggregate Business, Tata Motors, presents the IILF-ISC 'Green Supply-Chain Innovation' Award to the Ericsson India team.
Delegates make notes during one of the many well-received presentations at the summit.
Kathak dancers create a vivid imagery of the season of spring that marks new beginnings.
Jacob Joseph, Publisher, Log.India presents 'Best Innovation in Supply Chain - Technology' Award to the HyperCity team.
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A skill-gap in the logistics industry denitely exists. However, just mindlessly accumulating labor need not necessarily be the solution to the problem.
RECENTLY, I WAS invited to a conference to be part of a panel discussion to discuss the skill-gap issue in the Indian supply chain. Dr. Rakesh Singh, Director, DSIM (Durgadevi Saraf Institute of Management Institute) and co-panelist had mentioned to me earlier, There is no discussion. We have a skill gap. Period. Dr. Singh couldnt be more correct. There is a dearth of efficient and competent people in the industry from the boardrooms all the way to the f loor. As any proficient manager will tell you, people are the key to a profitable business and that requires talented people, which is sadly lacking. We have debated enough that there arent enough institutions that teach Industrial Engineering the way we want our future employees to be taught. Even in cases where firms have pulled up their socks and conducted training in-house, people do not stay. This is a familiar situation. Instead of trying to squeeze blood from a stone, I would like to touch upon three disparate issues related to people.
People As Panacea?
Recently, a client approached us to seek out advice on setting up labor standards at his facility. During our conversation, I was astounded to learn the real reason for wanting to set up such standards in his facility. He was facing a lot of problems at his facility. As a service provider, when there was a problem even if it may have been caused owing to a fault from the users side, the fi rst thing his customers accused him of was not having enough people. That seemed the easiest indictment. My client figured that if he had a mathematical formula that calculated the number of people needed based on the throughput he handled, he could prove to the client that deploying enough labor wasnt the problem. This would save him a good bit of anxiety. This attitude of adding labor as panacea seems a prevalent attitude in the service providers businesses. In another case, when I had gauged the throughput at the facility, I commented to the 3PL on the large number of people working on
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Non-compliant to new OHS regulations Inefficient warehouse planning Non-compliant to new OHS regulations Outdated storage systems Inefficient warehouse planning Labour intensive operation Outdated storage systems Unable intensiveKPI Labour to meet operation Lack of to meet KPI Unable local support Poor use of available headroom Lack of local support Too manyof available headroom operations Poor use error in piece picking Non-compliant to FEM safety standards Too many error in piece picking operations Non-compliant to FEM safety standards
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Schaefer_Formula 5_LOG_216x270mm.indd 1 12/8/2010 12:35:09 PM
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the operations. In response, the 3PL said they werent allowed to reduce the number of people as it was perceived by the user as not deploying enough resources even when the number of people seemed to me double the size required. Labor is perceived as cheap in India. Readers may get tired of me saying this often that labor in India is cheap as compared to the West, but it is by no means cheaper compared to other Asian resources. Also, taking in more labor means a lost opportunity cost in having to manage them, and also buying more equipment for them to man so as to make up for slower productivity. While it is agreed that labor is a rare commodity, the attitude about using labor superfluously and, more importantly, as a solution to all problems needs to be checked. It would help to recall Brooks Law about how adding manpower to a late project delays it even further. just about everything. In the last six years, elevator conversations have upgraded to: Which aspect of Supply Chain? Warehouse consulting? But thats too niche! We have all become experts in no time at all. We obviously understand the terminologies and the vernaculars but at the same time, I often run into students who want to know whats in it for them. Business school grads still have to be coaxed into signing on the dotted line. The question of people has been the greatest challenge to us as a firm in finding them and, worst yet, in retaining them. This sentiment is echoed not just in the corporate world but also on the floor with respect to the pickers and the loaders. At the panel discussion, the event I mentioned at the beginning of this column, Tej Nirmal Singh of Ericsson India pointed out that people working in supply chain often complain of the lack of rewards or recognition. In my opinion, people do not hang around long enough to get their rewards. As a friend pointed out at the same conference, the question on the top of a lot of young
Any proficient manager will tell you, people are the key to a profitable business and that requires talented people, which is sadly lacking.
minds seems to be, If I am going to be in Supply Chain, can I hope to become a CEO? Without much ado, I can tell you Absolutely. But like everything else, you have to earn it. More importantly, you have to hang around long enough to earn it. Without getting your hands dirty, without burning the Friday night oil, without sweating it out, its probably not going to happen. The CEO intuition doesnt just come out of nowhere. It comes after having worked for several years. Today, in India, I know Vice-Presidents and Supply-Chain heads of companies who have about 10-12 years of work experience. This is unheard of in the West where the average work experience of a VP is about 20 years. Supply-chain in India is a young field. If you are a young professional in the supplychain thinking about leaving the field, think again. As altruistic as this may sound, my interests lie in bringing in talent into the supply-chain fraternity. The author can be reached at padminimp@theprogressgroup.com.
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In a fast emerging economy, with robust industrial growth, considering all other factors it is the logistics industry that will acquire an important place. Efficient and effective logistics management has become an essential determinant of business success. Especially in India, the high level of inefficiency in logistics activities is a matter of grave concern. this inefficiency triggers down to all modes of logistics. India lies in the zone of countries with poor level of infrastructure, low It penetration, limited number of players, and to top it, is fragmented. It does not compare well even with countries like Phillipines, Indonesia and other south asian countries, not to speak of south Korea, Hong Kong, singapore and Japan. What adds to our woes is that the unorganized sector accounts for a major share of the logistics market, while the integrated logistics service provider carry only a very small share. this is likely to change in the near future as India comes out as an important emerging mar-
ket. We might soon see the organized players increasing in size by building themselves up or by acquiring smaller players.
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< OpiniOn
important and an integral part of skill deficit in the industry, the skill gap can be broadly classified in three categories: at the operational level, there is a dearth of truck drivers, load supervisors, warehouse managers and sea farers. a study conducted by KPMG and the CII Institute of Logistics clearly says that the demand for truck drivers will increase to 5 million by 2015, as against 3 million truck drivers that exist today. Of the 3 million, most of them are illiterate without any formal training. the demand for loading supervisors is expected to be around 0.5 million in 2015, compared to the 0.3 million working in the industry today. the loading supervisors position carries a lot of responsibility, but they do not have any formal training and most of them are semi-literate. Even if we go by what the KPMG report indicates that 50 percent of the manpower will be generated internally, there is a huge need for training and attracting young talent as loading supervisors. the same goes for warehouse managers too. By 2015, we will need 35,000 warehouse managers, but there is no training institute which can seriously train for such skills. the operational needs of the industry as far as skilled labor is concerned will undergo a tremendous change because of Indias central position in the world economy. It will also raise the needs for training because of technological changes as well as customer expectations. management, which is highly academic and quantitative. Most supply-chain papers are operational heavy and lack a cross-functional approach to understanding supply-chain issues. they fail to provide a modern day supply-chain perspective as they are taught by professors who have left behind the trends that dictate the growth of the industry.
The solution
I often wonder why in a country like India where a large number of people with matriculation and intermediate qualifications are looking for jobs as watchmen, drivers,
On-the-job training is of poor quality primarily because of an industry which is highly fragmented and seems to be less innovative.
2 the mid-level managers, both in LsP or user industry, are of poor quality. there is no good training institute which can cater to the needs of these managers and transform them from executives to managers and then to leaders. the large number of business schools offer executive development programs, but they are caught in a trap of their own understanding and hence end up replicating what is present in books, ignoring the practice that exists, as well as the practice that will be followed in future. On-the-job training is of poor quality primarily because of an industry which is highly fragmented and seems to be less innovative.
3 the third level of skill deficiency is at the leadership level where the supply-chain heads and senior managers come from different backgrounds and tend to follow practices they have followed earlier and make incremental changes, which are more operational rather than strategic in nature. this skill gap arises primarily because even the teaching at business schools, both at Post Graduate and advanced Management programs, is caught in the trap of operations
soldiers, sailors, factory works, there continues to be a dearth of people in logistics operations. It would be wise and the right time for logistics players to set up training institutes. they could do this by availing the skill Development fund from the Union Government and starting a knowledge awareness program so that the unemployed youth of this country can be employed in this sun rise industry. I sincerely hope that logistics players looking at newer opportunities of business in the same domain will take an initiative. as far as the middle and top management education level is concerned, the industry should partner with business skills having a capability and intent to cater to the logistics industry. this way they can create a talent management program that caters to the operational as well as strategic needs of the industry and create a faculty who could help the industry build its talent. Business schools can be partners with an advance Management Program catering to the leaders of this industry and be more practical and contemporary so that it benefits the future leaders of this industry. the future leaders are those who can visualize the future of the industry and be prepared for its growth.
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ach time we sign a contract with a service provider, it is a learning experience, says Tej Nirmal Singh, Head Supply Chain, Ericsson India Pvt. Ltd., from his infinite experience with service level agreements or SLAs. Every contract teaches us something new and is an improvement over the last one we signed. An SLA, as the name suggests, is a contractual agreement signed between the customer and the service provider that states the terms and conditions of their relationship. Although it seems simple, in reality establishing this relationship is quite complicated and is the reason for much chaos and dysfunction in supply-chain management. Depending on the nature and breadth of the contract signed there are multiple kinds of SLAs. However, essentially most of them consist of clauses mutually agreed upon by the parties involved, in relation to timely deliveries, quality of products and relevant transportation. Hitesh Gossain, Senior Vice-President, Credence Logistics, says, Matters related to turnaround time reduction, uptime on equipment, total cost savings, reduction of losses like those caused in in-transit, moisture content losses and pilferage are some of the terms stated in an SLA.
Connection
Defining exactly what goes into an SLA is a tedious task. It could vary depending on the service that needs to be rendered as well as on the parties involved. Scope of work, desired LSP profile, pre-requisites needed, contractual period, standard operation procedure, user obligations, rate schedule with tax applicable, MIS customized reporting, penalty and bonus schedule, share of business, arbitration, and termination, all fall under the purview of an SLA, says Mayank Kaushik, Manager (MT-9), Supply Chain Division, Maruti Suzuki, emphasizing on the broad nature and scope of an SLA. Ramanand Bhatt, Chief Technical Officer, VRL Logistics, classifies SLAs into two types time-sensitive agreements and non-time sensitive agreements. The non-time sensitive agreements do not specify when the goods would reach but the delivery happens within eight days. Such a delivery naturally costs lesser. Timesensitive delivery agreements, on the contrary, define the transit time based on a matrix we have prepared. Penalties are issued on the LSPs if they fail to deliver as per the stated conditions and incentives are obtained in cases when the LSP concludes a service before time. Penalties could be equivalent to direct and indirect losses owing to SLA deviation.
INDIA |
Lack of proper communication and understanding between clients and service providers leads to friction when it comes to formulating servicelevel agreements. Remya Philip gets behind the details.
Mr. Gossain says, Failure to live up to stated agreements could result in revoking of the associated bank deposits/earnest money deposits, or even a pre-closure of contracts. Confirming this, Mr. Kaushik says, Assigned penalties are levied for nonperformance or non-compliance with the set standards which will affect the LSPs periodic performance rating. This will be followed with reduction in the share of business. After having left no stone unturned, if there is still no improvement over a period of time, which is actually in the rarest of rare cases, the concerned LSP may have to exit with due notice.
I N D I A S N O .1 L O G I S T I C S M A G A Z I N E
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fingers at the client companies for inappropriate information given by us, for their poor performance. There is also constant resistance by the LSPs to accept their faults and failures by looking for escape routes, excuses and trying to take advantage of any lacunae that may be present in the existing system. Initial reluctance to comply with the desired key performance parameters citing uncontrollable environmental factors is a common trend among LSPs, says Mr. Kaushik. The deplorable infrastructure issues in India only add to the complexities. Mr. Bhatt explained this stating, When going by road, the documentation that needs to be carried out is highly unorganized and complicated. The goods and service tax is supposed to solve this problem but the question is when.
EYES FRONT
They are one-sided and are typically accepted by vendors who are desperate to get in for business expansion and are unaware of the possible on-ground realities. By the time this is realized, the same process initiates for a new vendor again, explains Mr. Gossain, as being one of the reasons for concern. Mr. Bhatt says clients have high expectations leading them to make unreasonable demands with respect to turnaround time or transshipment specifications. Sometimes the demands may not make practical sense Clarity must be achieved to the way we function. For example, on each and every thing a client asking for nine tons of matementioned in the SLA and rial to be moved over a long distance we must take in writing but insisting that the service must inthat there will be no hidden volve no transshipment. charges. Stating extreme customer de Col. Vijay Nair, pendency as one of the main reasons General Manager - Supply of concern by The HyperCity supply-chain team ledfor clients, Mr. Singh says Chain, HyperCity (India) Retail. that LSPs an Lt Col. Vijay Nair (Retd) is putting upare often quick at pointing inspired show >>
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Exploring oil-andgas upstream and midstream supplychain biz
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BACKING UP 32
How reverse supply chain can make or break a companys position in the market
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2011
ORGANISERS
Problems with the roads and funds, and creating permits for trucks are plenty, and are seriously affecting the seamless movement of trucks and thereby the observance of several SLA parameters. The way the supply chain functions is not always constant, points out Col. Nair. Factors related to transportation, infrastructure, warehousing or labor standards are constantly changing. Such vagaries in the supply chain often make functioning as per the SLAs difficult. Theres a set process of going about the service that an LSP is expected to follow but it is not infrequently that
understanding of the traffic regulations and relevant laws of the land are factors that client companies tend to underestimate. Reading and understanding the entire agreement in absolute detail is essential before signing it. The agreement must be clear on each and every thing mentioned in the SLA and we must take in writing that there will be no hidden charges, asserted Col. Nair. For example, loading may be mentioned in the agreement but the labor involved for the same may not. LSPs often cite such loopholes as hidden charges. A perfect SLA is almost utopian
there must also always be in place a review system to keep checking that the stated parameters are being adhered to and this check must happen periodically.
LSPs take short cuts and try to get things done in the cheapest possible manner. According to Mr. Bhatt, owing to the high transportation costs packaging is compromised on to keep the costs low, eventually encouraging overloading. but the key to attaining one lies in learning from experience. Mr. Singh stressed on the need to refine SLAs based on experiences in order to make them foolproof. Setting the right parameters that should be inculcated in the SLA is the most crucial decision that needs to be made. And it is these parameters that determine whether the SLA is measurable and achievable, he adds. All legalities related to the insurance of products should be taken care of and clients should always be equipped with contingency plans in times of failure. Any arbitration needed must be under the clients jurisdiction, insists Col. Nair. Mr. Gossain says, If the SLAs are mutually agreed upon and the screening criteria is more than just commercials, and includes competency mapping and technical evaluINDIA |
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Setting the right parameters that should be inculcated in the SLA is the most crucial decision that needs to be made. And it is these parameters that determine whether the SLA is measurable and achievable.
tej Nirmal Singh, Head - Supply Chain, Ericsson India Pvt. Ltd
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ation, then delivery of SLAs would definitely be better. There must also always be in place a review system to keep checking that the stated parameters are being adhered to and this check must happen periodically. The root cause of the problem lies in the lack of courage by LSPs to state certain things precisely, hence leaving much of it to a benefit of doubt situation. Such situations always give the LSPs an advantage of twisting and turning things according to their convenience, says Mr. Singh. However, all said and done, there are unforeseen factors like the catastrophic failure of infrastructure, drastic changes in government regulations, strikes, or sudden spikes in equipment costs, etc. that can crop up anytime and cannot be accounted for.
IN
Excellence A wards 2011
Frewin Francis
Director and Publisher Logistics Week India
frewin@logisticsweek
9819928
INDIA |
KK Kaul,
Vice-President (Head - SCM), lG Electronics India Pvt. ltd.
ooking ood
LG electronics India believes in reaching products to people on-demand. Somebody impressed the market with a sense of enterprise, depth of vision, efficiency of service and the durability of products. Jayashree Mendes meets the vice-President (Head SCM) of LG electronics India, KK Kaul, the man behind this movement.
e has been working with the company since LG India set up operations in India in 1997. Growing with an establishment does have its advantages. You become familiar with the system. You are part of the growth. You know the history. You learn from your mistakes and take forward the positives. You have seen the innovations that worked and those that didnt. You have watched people join and leave or stay on. And all this has added to the experience. So its no surprise when after 15 minutes into the meeting with KK Kaul, Vice-President (Head - SCM), LG Electronics India Pvt Ltd (LGEIL), the man not only begins to reel off figures and statistics related to various departments and products, but also speaks on the dynamics of business in general and the portfolio he handles in particular. He can tackle a topic that most people wouldnt touch with a bargepole. Thats experience and authority. Fourteen years with a company does that to you. Comfortably settled in his office
after having concluded a meeting with his team, Mr. Kaul requires no prodding and is ready to speak on issues about inadequate transportation and corrugated infrastructure (more about that later). But for now, Mr. Kaul must explain the inside story of how, according to a survey conducted by market research GfK Group last year, LG continues to be ranked No. 1 in most product categories, except LCDs where it comes up No. 2, Audio: No. 3, and cell phones as No. 4, and unknown to the common man how the supply-chain department keeps the machinery well-oiled. A little knowledge of that can be gleaned by looking around his office. Occupying an entire wall sits a whiteboard displaying rows and columns of figures under various headers. Ask him about the figures, and smiling, Mr. Kaul says the figures represent up-to-the-minute data on raw materials inventory, manufacturing sales, targets, end-products inventory, etc. The chart is crucial to us as it gives us a holistic picture of our position across the board of our targets to be met, he says.
Manufacturing Momentum
LGEIL manufactures a range of products spanning washing machines, color televisions, monitors, refrigerators, air-conditioners, microwave ovens, DVD, cell phones, and Optical Disk Drives (See Box: LG India: Production Numbers) at its two plants in Greater Noida operational since 1998 and at Ranjangaon in Pune since 2004, besides employing
n n n n n n n n n n
Annual turnover: `19,350 crore in 2011 Manufacturing plants: Noida, Pune Electronic Manufacturing Companies (EMS): 8 (Dehradun, Rourkee, Rudrapur, Baddi, Noida, Kolhapur, Pune, and Rajpura) Logistics Service Providers: Noida (35), Pune (21), C&FAs (29) Dealers: 1,400 Sub-dealers: 32,000 SKUs: 1,000 Components sourcing locations: China, Korea, Thailand, Malaysia, Indonesia, and Japan Technology providers: Oracle, JDA Warehouses: 53 Inventory turn: DIO: 27 days, Warehouse shelf inventory turn: 4 days Distributors and Stockists: 700 Supply-chain employees: 140
Photos: Vikram Barwal
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the services of third-party manufacturers. While LGEIL has several firsts to its credit, in manufacturing it was the first company to produce DVD Writers in the country. The move to rope in electronic manufacturing services (EMS) or third-party manufacturers arose in 2002 after LGEIL realized that supply was not keeping up with demand. The Noida plant was running to full capacity. Over the next six years, LGEIL has meticulously added 15 EMS companies to exclusively manufacture goods for them. To ensure quality, LGEIL provides the EMS companies with components such as picture tubes, panels, chips, compressors, LCDs, etc., that it sources globally for its own two plants. Today, the EMS companies manufacture 25 percent of the total number of goods produced by LGEIL. For logistics purposes and to ensure that the components reach the EMS companies on time, the locations of the EMS companies are based at Dehradun, Rourkee, Rudrapur, Baddi, Noida, Kolhapur, Pune and Rajpura. The locations are significant in that they are either close to LGs Greater Noida plant or the Pune one, thus making transportation and access easier. It is common for MNCs like LG, Panasonic, Samsung, or Ericsson (LOG.India January 2011 issue), who have global manufacturing units to source components and raw materials from global suppliers. Mr. Kaul says, We source major and locally
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unavailable components like picture tubes, LCDs, chips, panels, compressors, etc. from established Asian companies, most of who are our subsidiaries. The components come in from China, Korea, Thailand, Malaysia, Indonesia, and Japan.Except for deciding on price and the order, the logistics of raw materials and components is overseen by the supply-chain department under Mr. Kaul. In keeping with its long-term plans, LGEIL is planning to set up a third manufacturing plant, most likely to come up in West or South India.
Twelve years ago when LGEIL set up manufacturing facilities, it was still testing the demand waters and the focus was small investment in large capacities. Today, more surefooted, the investment on the expected plant can go up to `2,000 crore. According to Mr. Kaul, Our research tells us there still remains about 50-60 percent of the market which is untapped. We have a strong product range and should be able to permeate the market deeper seeing the demand potential. The supply-chain is also working out ways to meet the new challenges as growing customer bases will create logistical challenges. Simultaneously, LGEIL is investing `800 crore in ramping up production at its Noida plant. LGEIL expects the increase in production to commensurate with a three-fold increase in revenue by 2015. Currently, the company exports 20 percent of produced goods to Africa, the Gulf countries, Europe, the US and the CIS countries.
LGEIL's goods come out of two manufacturing units based out in Greater Noida and Pune, besides its 15 electronic manufacturing services companies.
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experience Counts
Mr. Kauls association with LGEIL started when the company first came to India as Goldstar, by tying up with a local manufacturer. At that time, regulations in India did not allow for a foreign company to set up a fully-owned subsidiary. Mr. Kaul and a small team of people set up the India arm for LG Electronics. In his words, The Korean headquarters were apprehensive about the acceptance of the brand. They had a handson approach on all functions and processes in India. Today LGEIL has come a long way to functioning on its own, with the Korean headquarters mainly providing the design of the products and the technology to run processes. Mr. Kauls years of experience at managing imports, exports, planning, procurement, and his perception of excise and sales tax laws helped him build up the infrastructure for LGEIL from scratch. A grad-
uation from Delhi University and a degree in Materials Management from Bhartiya Vidyapeeth Delhi completed his education. The first three years with Eicher Good Earth honed him in procurement, sales and imports, and only improved with the next three years at Samtel. It was, however, the six years that he spent with Rajasthan Petro Synthetics where he learnt project management and the subtleties of setting up new projects. Mr. Kaul says, I drew on my experience and accomplished a lot more at LGEIL, right from forecasting to manufacturing to building the supply-chain. I have been part of the team that established the line of production, quality, set requirements and price, juggled transportation, managed import of raw materials and finished goods in keeping with Customs clearance.
als, logistics and distribution. It was onerous to compute collective data that would allow the company to see its progress at a quick glance, and in real-time. The Indian arm had to regularly send across long detailed excel sheets of data. The Korean headquarters required a system to synchronize forecasts, production and sales that would eliminate the issues of inaccurate shipping, planning and inventory. The Global Supply Chain Planning was established.
GSCP integrates control of the entire business process from receiving orders, production to sales, and inventory, with an online link of LG companies around the world.
The GSCP integrates control of the entire business process from receiving orders, production to sales, and inventory, with an online link of LG companies around the world. Integrated with the Oracle ERP systems of LG worldwide, the end result of the deployment of GSCP enables the company to close the gap between demand and supply. It also provides the previous weeks performance results and capability matrix. The difference in GSCP from the earlier IT tools that LG Electronics has been using is that it combines design, parts supply, procurement, production, supply-chain, and cost management into an integrated process thus allowing the company to know how much to produce. For that to happen, Mr. Kaul clarifies, it is crucial that all the branch personnel from every department collaborate on the weekly Sales & OperaINDIA |
37
Forecasting accuracy is pertinent considering that LGeIL imports about 3540 percent of components which total about 60 percent in terms of value.
tions Planning (S&OP) to decide on production and sales plans. Prior to deploying GSCP, LGE also faced problems in managing inventory. At a time when it needed to be at 42 days of inventory, it had 10 to 15 days more of inventory. LGE rolled out 12 Inventory Optimization solutions thus releasing it from millions of cash flow thats no longer tied to inventory. Considering that LGEIL outsources its transportation, the company often faced simple theft, misrepresentation of inventory, counterfeiting and piracy. This was restricted by installing deployed Global Digital Logistics System (GDLS) which aids in better route optimization, as well as improved loading and tendering capabilities. Playing on its existing Oracle ERP and EXEWMS, the transportation solution provides execution capabilities to its shippers and 3PL partners.
Washing machines: 16 lakh Color televisions: 40 lakh Monitors: 10 lakh Refrigerators: 40 lakh Air-conditioners: 12 lakh Microwave ovens: 8 lakh DVDs: 8 lakh Mobile phones: 60 lakh Optical Disk Drives: 120 lakh
Forecasting for LGEIL is at three levels: Inventory, production, and sales. The company adopts a shortterm forecasting of up to six weeks, and a mid-term one for four months. For LGEIL, it is important that the company procures right. Some of the components that it imports have long lead times. For instance, following the earthquake and the tsunami in Japan, companies round the world had to look elsewhere to fulfill their supply of raw materials, which otherwise came from that country. This impacted production and supply. Mr. Kaul says with some satisfaction, Our short-term forecasting is 95 percent accurate, though of course we are working at improving it. Since we need to place orders for some components at least three months in advance, we have maintained a forecasting model of 16 weeks. The stress on accuracy becomes even more pertinent considering that it imports about 35-40 percent of components which total about 60 percent in value terms. LGEIL executes demand forecasting by using GDMI (Global Demand Management Innovation) . The solution used for demand forecasting is integrated with the demand fulfillment system. Based on the previous years seasonality demands, trends in the previous quarter across each product, the company arrives at expected demand in the coming season. It works on three layers: market feedback, Global Aspiration and supply-chain capabilities all of which lead to a single sales plan. For instance, For instance, from Target Aspiration, LGEIL has deducted a higher turnover can only be accrued by focusing on high-value products. The results of the inventory and demand forecasting are passed on to the EMS companies and to its own production department. To maintain the rhythm, all the various departments straighten out forecast-
Inventory Control
LGEILs strategy is to strike a balance between inventory levels and
LGEIL believes that outsourcing non-value added activities, like transportation and warehouses, to third-party can help create focus from operational activity to strategic value add operations.
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optimum utilization of capacity. It also has to deal with high rates of product obsolescence and evolving customer needs. The GSCP maintains a record of all inventories, but according to Mr. Kaul, one always tries to decrease inventory turn at warehouses. He adds, Days of inventory outstanding or DIO for finished goods is 27 days (including in transit), while monthly warehouse shelf inventory turn is 4 days. We try to ensure that goods move out of the Distribution Center in less than 30 days. Our focus this year is on reducing DIO, because of shortened product life cycles. Thats why our forecasting has to be incisive. LGEIL takes care of the life-cycle of products, especially end-of-life (EOL) products, through a carefully controlled production plan. It sells EOL products through schemes, and some find its way into smaller and rural towns. In urban areas, this appears difficult as few or no dealers want to be saddled with old and outdated models. The GSCP tool, while
keeping track of EOL products, also throws up data of where these products could be deployed and sold. LGEIL follows the hub-andspoke model. So the final goods are moved from its various factories to the central DC at Noida and Ranjangaon, from where it moves to its 53 warehouses. A staunch subscriber to the outsourcing theory, Mr. Kaul believes that outsourcing non-value added activities to third-party can help create focus from operational activity to strategic value add operations. This is the reason why LGEIL has outsourced most activities such as transportation and warehouses.
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IN
Excellence A wards 2011
Frewin Francis
Director and Publisher Logistics Week India
frewin@logisticsweek.co
981992879
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outbound Logistics
To meet the fourfold increase in demand, it has to speed up the manufacturing and transportation to these respective cities. A drawback of having several manufacturing industries based out of North India, mainly Baddi and Dehradun, invariably sees a huge demand for vehicle requirements. Trucks move from northern India to the rest of the country. Inflow of trucks to the north is few and this means less backload from the
An LGEIL warehouse at Greater Noida.
Every day LGEIL sends out 7,500 trucks from its various manufacturing units to its 53 warehouses across the country.
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south or the east to the north. The lack of backload sometimes creates problems in terms of long hauls and shortage of trucks. Currently, LGEIL channelizes approximately 7,500 vehicles every month from its various manufacturing locations to branch DCs. But it was the constraint of availability of quality vehicles that led the company to explore multi-modal transportation. Besides this, approximately 24,000 vehicles are sent out from branch DCs every month, for secondary transportation, to various dealers and distributors all over India. Arvind Kumar Lohia, Managing Director, East India Transport Agency (A unit of EITA India Ltd), and an LGEIL transportation partner, says, Since the products are in high volume and fragile in nature, we cater with customized vehicles. A challenge is to cater to seasonal fluctuation which is
endemic with such a products range. It requires constant planning and shifting our fleet strength to those locations where they need to send their products as well as arranging for the return goods from those locations. Siddharth Adya, Managing Director, South Asia Region, at APL Logistics, a 3PL partner managing the regional distribution center at Chennai, says, Retaining labor is a challenge. Hiring quality people with the right skill sets is a constant challenge, particularly in a high-volume facility like this one. APL Logistics handles all the warehouse function for LGEIL at Chennai like Inbound Inventory Management, Outbound such as handling shipments to dealers and modern trade and institution sales; Storage, and Transportation Management and Coordination including update of proof of delivery in LGEs Oracle system.
It was the constraint of availability of quality vehicles that led the company to explore multimodal transportation.
Anoop Chauhan, Regional Head (SCM - Business Development) at DHL Lemuir, a 3PL partner to LGEIL, says, Consumer durables are sensitive to damage. We have customized trucks and tracking that ascertain that goods move as per the clients requirements. The purpose of bringing us in was to ensure that goods are available on the shelf when the dealer needs it.
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the expertise of the regional distributors helps LGeIL to near correctly send out the right product batches and manage the reverse logistics too.
regional Distribution
Ten years ago, the consumer durables and electronics trade was in disarray in terms of distribution. Most companies preferred to go with national distributors, who in turn sent out the goods to dealers. Dealers did not deal with the company directly. Also, companies manufacturing several products had created separate divisions within their com-
42
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Pooja Dayal
Head-Business Excellence Function, DIESL
An error in picking occurs when stock is mixed up. For efficient operations, the warehouse inventory system must be able to identify what product is stored in each location, as well as the quantity of each product in every location.
n Knowing the correct way of stacking the boxes. n Understanding the Material Stacking Height.
to be taken while loading and unloading, and during the movement of material. Manual movement of material also accounts for the damages, hence some material handling equipment can also be used in order to reduce the damages. Getting the orders right and the right SKUs is critical for a retail-store warehouse. How can I ensure that the right SKU are picked up against the order placed hence ensuring stock accuracy? What IT tool can I use? One of the critical success factors of efficient warehouse
INDIA | June
n Precautions
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2011| www.logisticsweek.com
< primer
Back to Basics
In this section, we revisit some basic concepts everyday logistics and supply-chain terms that need a brush up (or update) every now and then.
It has various applications in the industry. From the retail point of view, RFID can improve the retailers inventory management, replenishment to achieve timely and efficient transportation and inventory tracking, increase efficiency, and reduce errors. In the area of warehousing, RFID can be used to automate operations related to inventory and pick up. In the distribution domain, using RFID can greatly accelerate the speed of delivery and distribution process, and improve selection efficiency and accuracy, and reduce labor and distribution costs. Some of the advantages of RFID are: n The ability to be read over longer
Source: texascountypatriots
distances. n The elimination of requirement for line of sight reads. n Added capacity to contain information. n The RFID tag data can be updated or changed.
reports decision-makers can identify patterns and trends that would have remained unseen if the raw data were consulted manually. MIS can collate into coherent reports unmanageable volumes of data that would otherwise be useless to decision makers. In the past, data had to be manually processed for filing and analysis but with MIS it can now be entered quickly and easily onto a computer by a data processor, allowing for faster decision making and quicker reflexes for the enterprise as a whole. Such an improved reporting of business processes provided by MIS leads to a sleek production process which naturally enables more efficiency in managing the supply chain.
PIs are used by organizations to evaluate their success or the success of a particular activity that they have undertaken. In this way, KPIs enable an organization to define and measure its progress. Choosing the right KPIs is a crucial decision that supply chain managers need to make. The decision can be taken only after understanding what exactly the important goals of the organization are. To identify the areas that require improvements so that KPIs can be developed accordingly, various techniques are used to assess the present state of a business and its key activities. A common method for choosing KPIs is to apply a management framework such as the Balanced Scorecard. Some of the parameters that can be used as indicators include cost variances, budget ratio, order processing cycle, production cycle times, downtime, outsourcing percentage, load utilization, out of stock percentage, obsolescent stock percentage, recycling percentage, back order percentage, just-in-time percentage, energy efficiency ratio, peak capacity percentage, supplier ratio, vendor rating, internal satisfaction levels, etc.
Can you help us with more such terms used everyday but seldom revisited? Please mail your suggestions to aanand@logisticsweek.com. If chosen, we will be happy to publish your suggestion with due credit.
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2011| www.logisticsweek.com
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problems and their solutions are presented demonstrating how systemic and logistics approaches may be combined. The book is directed at academics, researchers, and students seeking the necessary background in terms of the interplay between the food supply chain and ICT. Intelligent Agrifood chains and networks By Michael Bourlakis, Ilias P. Vlachos, Vasileios Zeimpekis Publisher: Wiley Price: `8,469
Sustainability Guide
hrough this book, the authors offer strong business advice for gaining competitive advantage through sustainability action in buildings and operations, information technology, product design, sourcing, manufacturing, logistics and transportation and other key business functions. With rising energy and natural resource costs, intensified regulations, investor pressures, and a growing demand for environmentally-friendly products, sustainability is no longer an optionits a business imperative. In this light, unlike many green business books, this book skips the environmental ideology and deals exclusively with tools
and strategies that have been shown to cut costs, reduce risks, drive revenues, and build brand identity. The book explains in detail how each business function or department can achieve an eco-advantage over the competition and also offers frameworks, checklists, and action plans applicable to any businessbig or small, in manufacturing or services. the Green to Gold Business Playbook By Daniel C. Esty, P.J. Simmons Publisher: Wiley Price: `1,253
he book examines the historical transformation taking place in China today as it evolves from global manufacturer to global consumer marketplace and its impact on future retail supply chain management. The book is divided into four key sections. It offers a background on Chinas economy and infrastructure followed by an insight into the effects of internet design technology. It also dwells on ways of building more dynamic, sustainable and resilient transportation networks to enable supply chain innovation. In the last section, Levesque offers a tactical perspective on the fundaINDIA |
mentals of logistics network design and successful supply chain execution in China. The book puts together practical expertise and insight in examining the opportunities that exist in both consumer retail and supply chain management over the next decade in China. the shipping Point: the Rise of china and the Future of Retail supply chain Management By Peter J. Levesque Publisher: Wiley Price: `2,240
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Material Management
Logistics
Warehousing
OWS adjudged THE BEST SEZ unit ed Services for 2008 09 by EPCES. by Hon. Hon , . tya M. Scindia Award presen on 18th May at New Delhi to Mr. Vinay R Sharma, MD & Mr. Vineet Sharma Director OWS
Navi Mumbai
Mumbai
BloGosPheRe
shippers Are changing their transportation Paradigms to Address capacity shortages And Rising Freight Rates
Blogger: Dan Goodwill With rising demand, shippers are facing a broad array of challenges in 2011. Goodwill reasons how a tightening transportation equipment supply is being triggered by driver shortages, new U.S. government regulations and by a reluctance of carrier executives to add capacity. This coupled with rising freight rates and fuel surcharges, are causing shippers to revisit their freight transportation paradigms. Informed shippers realize that there are limitations as to what they can do to offset these market driven forces. To retain their business volumes, he suggests that shippers must meet the demands of their clients in terms of order sizes and transit times. As discussed in his previous blogs, large retailers are seeking greater control over their inbound freight transportation. Within these parameters, he states that shippers are exploring opportunities to blunt the impact of some of these changes. Through this post, Goodwill reflects on his recent conversations with shippers and his review of various published reports, and offers some of the strategies and tactics they are employing or investigating. search tags: dan goodwill, transportation, freight offers some ways of reducing it. He mentions how the Blackberry owners, in a webinar hosted by SCMWorld on April 28, 2011, stated that product portfolio complexity is required to compete in a consumer market with ever changing requirements. This is in stark contrast to many pundits who advocate reducing supply chain complexity, the primary cause of opacity, by reducing the product portfolio. Although he agrees that a sound product portfolio analysis is something everyone should do, he stresses that outsourcing and mass customizations arent going anywhere. He suggests that we need to embrace complexity by providing visibility. In todays highly outsourced environment, visibility must span several tiers of the supply chain from customer through OEM to contract manufacturer and on to the component suppliers. If you have distributors, then at least get a sell through measure of demand, not just a sell in. Miles however asserts that just access to data across the supply chain is not visibility. Without a manner in which to respond rapidly and profitably to actual demand, access to data adds nothing. Being able to detect changes from the plan, understand the consequences of the changes on customer commits, capacity requirements, or component requirements, and evaluate alternative courses of action in both financial and operational terms quickly and effectively, is the clue to gaining visibility. Only this will reduce the opacity in todays supply chains. search tags: supply chain opacity, trevor miles, visibility
ResouRce centeR
Maximize The Utilization Of Your Vessels
By Muller+Blanck Muller+Blanck are well-known developers of professional software solutions for shipowners and liner operators. For more than 20 years, shipping companies all over the world have placed their trust in Capstan, their firstclass stowage preplanning system. The paper explains how Capstan allows you to manage all the information of a whole voyage. Planning ahead for all ports of a voyage is an easy task - Capstan3 considers a voyage as a whole and provides fast switching among the different situations. The paper addresses how two of the most important issues in the shipping industry i.e. maximum utilization and safety as well as easy control and flexibility can be achieved using Capstan. For maximum utilization and safety it states the following three solutions: Transparent IDE & Import
ing systems with new generation analysis software that analyzes key turnout rail information. This analysis comprises both safety and maintenance related switch rail information including shape and configuration of switch rail and frog, vertical and side wear on stock and closure rails, relative height of switch and stock rail, gap between switch and stock rail, etc. The paper also presents results of detailed tests with over 300 sets of turnout measurements across sampling intervals, wear and safety analysis of switch and stock rail profiles, and matching of measured rail profiles with field observations and measurements. The overall results presented in the paper show that this inspection system has the ability to measure turnout rail safety and maintenance parameters and identify problems to include potential derailment locations and damage sites on turnouts.
Search Tags: Harsco rail, ASIV, automated turnout Compiled by Remya Philip
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Y-cam
xcel Systems Y-cam is a wireless IP camera that produces video at a maximum frame rate of 30fps displayed at up to 640x480 resolution, therefore allowing clear and smooth images to be viewed. The frame rate automatically adjusts to the available bandwidth. It comes with alarm tools that will keep you notified if any motion is detected and has built-in functions that can generate alarm triggers via email, and by uploading images straight to a website. Unlike conventional activity detection, the Y-cam uses vector information to detect motion, therefore achieving better reliability against false alarms. The device can connect directly to a network or the Internet, either over wireless (802.11b/g) networking, or over 10/100 with the supplied network cable. The Ycam utilizes encryption methods such as WEP, and even the more powerful WPA and WPA2, so you can be sure your camera will only be accessed by authorized users. It supports up to 16 simultaneous remote users thereby allowing multi-client access. This allows easy and efficient video conferencing with minimum setup. Password protection also ensures no one is able to access the cameras without authorization. Key Features: Affordable and simple to use monitoring solution
Monitoring different sites, in different locations, all from one screen Monitoring offices or retail premises whilst away or from home Manufacturer: Excel Systems Selling Point: MPEG-4 compression for reduced bandwidth and storage and color low-light view.
Product
IcR849-2 Flexlens
The c-mount lens and illumination with adjustable reading distances allow reliable decoding of low contrast codes making it ideal for a wide range of solutions. The dynamic parameter switching makes decoding of different code qualities possible with just one setting. It comes with a high-resolution, 4 megapixel imager for large field of view. The industrial IP65 housing (with optional hood and cap) makes it usable in tough environmental conditions. The code reader serves as a fast and cost-effective identification device for automotive manufacturers and the logistics automation and packaging industries. Key Features: Omni-directional reading of codes C-mount lens 4 megapixel imager Manufacturer: SICK Selling Point: Live image and auto setup
CR849-2 FlexLens from SICK is a code reader configured with live image and auto setup that allows rapid image and data transfer via Ethernet. It enables fast, omni-directional reading of printed and direct part marked 1D and 2D codes. Such omni-directional identification helps identify objects that are not aligned as well.
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Imprint Feature
Material Management
Logistics
Warehousing
Oil Gas OWS Bags Best SEZ&UnitServices - Services Beyond your Imagination Award
are ex-students of The Scindia School, il Field Warehouse & Services Pvt. Ltd. Gwalior. Mr. Vineet Sharma Alumni was adjudged The BEST SEZ UNIT of IIM Bangalore gleaming with hap- services 2008-09 by Export Promotion piness said it is a motivation to achieve Council for EOUs and SEZs (EPCES) under more, surpass expectations and create the Ministry of Commerce. value for all stake holders of comThe EPCES motivates entrepreneurs in pany. OWS has offices, branches at the SEZs and EOUs who perform best in Sohar in Oman, Dubai & very recently their respective segments. The categories entered USA by setting new company under which annual awards are given are in Houston TX. Vineet looks after all divided into many which include IT, Hardinternational operations of OWS & its ware, Software, Handicrafts, Engineering, group companies from Dubai. Jewelry, Food and Agro, ready-made garRecently OWS has entered into ments, leather products, Chemical and allied joint venture with ASCO the biggest products etc. service provider to Oil & Gas sector Oil Field Warehouse & Services establike shore base management, Marine lished in 2006 to provide services from Viservices, International Freight movezag SEZ to the Oil & Gas Sector has been a ment and environmental services great success from 1st year itself because of tor BEST SEZ unit - & Services Pvt. OWS adjudged 09 various locations from North its innovative services and positive approach THE of Oil Field Warehouse Services for 2008 - from by EPCES. Award presented by Hon. Minister of State, Commerce & Industry Mr. Jyotiraditya M. Scindia Ltd from Honble Minister of State Com- America to Australia. New entity is named as to the services and progressive thinking. on 18th May at New Delhi to Mr. Vinay R Sharma, MD & Mr. Vineet Sharma Director OWS OWS has extended its service to the West merce and Industry Mr. Jyotiraditya M Scin- OWSASCO OFFSHORE PVT. LTD. This is first ever award received by LoCoast also and offer similar services from dia on 18th May 2011 at Delhi. Sharing the proud moment Mr. Sharma gistics and Material Management Company Mundra Port & SEZ for clients on this side said It is a matter of great honor for entire in Oil and Gas Sector. OWS has created anof the country. OWS provides services in material man- OWS team, its clients, and vendors and I am other bench mark for the industry to follow. agement and related logistics from Special thankful to all for their support and confi- Future plans of OWS has many new and indence reposed in OWS. Mr. Vineet had an novative services to the Economic Zone Visakhapatnam Special Economic Zone, Duvvada, Visakhapatnam-530049Oil & Gas companies The award was received by Mr. Vinay R opportunity to share few moments with an that will add value, reduce costs and bring www.ows.net.in | Tel: +91-22-67698932 | Fax: +91-22-27612008 | info@ows.net.in Sharma, MD and Mr. Vineet Sharma, Direc- Ex-Scindian as both the Minister and Vineet efficiency with safety.
Navi Mumbai
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sVI 2620
VI 2620, a bag form, f ill and seal machine from Bosch can be used to pack a wide range of products for the foodstuff, confectionery and pesticide segments. It is ideal to use for different bag shapes such as pillow bags, gusseted bags, block-bottom bags, etc. The device can produce 120 bags per minute, with a maximum bag width of 260 mm and f ill volume of 2 liters. It possesses memory for 96 programs and servo-technology for all functions, enabling the selection of cycle independent programs at the touch of a button. With an easy to use operational panel it ensures minimum f ilm wastage as well as fast and easy changeover with quick change sets. The color touch screen HMI helps keep a check on process monitoring and data input plausibility. The vacuum assisted belt draw-off and synchronously moving sealing jaws allow for high-speed reproducible seams with minimum packaging material overlap. It comes with an inbuilt packaging material reel spindle and splicing and cutting aids.
Constant high sealing force up to 8000 N during the entire cross seam sealing process guarantees consistent quality of the longitudinal seam. Key Features: Servo controlled intermittent motion machine High speeds with fast product flow resulting in higher productivity Monitoring of Product in cross seam Manufacturer: Bosch Selling Point: State-of-the art, microprocessor controlled servo-technology and electronics
Solution
icropanels are best manufactured on a special flat panel line engineered for maximum flexibility production. Due to large variations in shape and size of the subassembly panels, special attention has been paid to control and panel transportation arrangements during welding procedures. Micropanel production capacity is multiplied by fully automatic, robotized micropanel welding stations. The station operator loads a sheet into a cas-
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Interface
What would be the time-frame required to set up a voice managed solution at a warehouse? How long would it take to train an employee to use the system? VoCollect solutions are integrated with WMS. It takes a maximum setup time of 90 days and a minimum set up time of less than 30 days. Training staff is subject to their ability to learn, but under normal circumstances it does not require more than
Opening Doors
Gandhi automations has launched two products: Smart reset, a rapid roll-up door with self-repairing full curtain; and automatic industrial Overhead doors.
Smart Reset can be supplied in different levels of design, to better satisfy various operating requirements while complying with local standards. Available in hot-galvanized steel with over-baked epoxy coating and smooth finish or fine satin-finish AISI 304 stainless steel, it is complete with galvanized curtain winding pipe with vertical uprights fitted with special selflubricating sliding guide installed on a shockabsorbing spring system. The DSC electronic safety device ensures reverse motion when door is closing if an obstacle is hit. A heavy duty motor (3 phase 400 V), comes with an electrically operated hand brake with a provision for manual opening device. The full size flexible curtain entirely made of class 2 self-extinguishing polyester, with no horizontal strengthening parts, which slides inside the side hinges and features
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self-repairing properties and high resistance to air and wind pressure to 120 km/h. Simultaneously, the company has launched industrial overhead doors that make the best use of transit openings, is weather resistant, and offers maximum safety. These overhead doors ensure a better use of inside space as the side runners vertically move the door along the wall and parallel to the ceiling. The heat insulation and soundproofing ensured by heat-insulated panels improve working conditions on the premises and ensure energy savings. The panels can also be manufactured with the addition of practical portholes or full aluminum sections featuring polycarbonate or unbreakable glass panels, wire meshing or air grilles. The doors are available in three models: Lisbon model, Bay model, and Gold Alu model.
Top: Smart Reset - Rapid roll-up door. Right: Retractable Tail Lift.
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P P viSa bai orTkar radion Indian Ports. a MuMHi P P Handbook SUBSCRIBEorT P LOG.INDIA FOR TO koC dia Hal COST-EFFECTIVE SOLUTIONS FORmajor Indian The handbook looks into all the issues related to the YOUR
ports with experts views of a roadmap to possible solutions for ports infrastructure and performance excellence. The main topics to be covered will be:
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