TransporTaTion & LogisTics

Adding wings
An industry in transition. Powered by innovation.

Foreword

as the indian transportation and logistics industry transitions towards scale and sophistication, innovation will be a key enabler, alongside capital and talent. The difference will be that while the flow of capital and talent is generally known to be determined by expected returns, innovation is a mindset, the returns from which may not stand the test of impatient evaluation. and that is the challenge the leaders of the industry shall have to manage. To keep at it. When we set out to develop this paper, we were, admittedly, not confident about the number and quality of operational innovation examples that the industry will be able to come up with. However, the response from the industry overwhelmed us. not only were there scores of innovation examples from across industry segments, the enthusiasm with which their managers presented them to us told us a thing or two about their zeal and belief in this concept and process. We, at KpMg in india, have had the opportunity of working closely with several transportation and logistics companies across the sector, placing us in the midst of events shaping up this industry. We are glad that we could use this experience and mobilize that of the top representatives of the industry towards the development of this paper. The intention of this paper is to discover, share and spread innovation which will, we are confident, eventually represent the wings the industry will take for its flight to success.

Manish Saigal Executive Director and Head of Transportation and Logistics

Transportation and logistics is an exciting industry. in fact, it is a constellation of several large industries, each with a different construct and significantly varying complexities, making it a fertile ground for innovation with great depth and width. Unsurprisingly therefore, there are multiple innovations around creating viable transportation modes as alternatives to road but also several others focused on integrating multiple transportation modes for seamless connectivity even if that involves inter-company co-operation. Then there are technological innovations essential for driving visibility, communication and integration in supply chains or creating productivity improvements at our ports, airports and warehouses. and the fact that all this has been achieved within the limitations of our physical and legislative infrastructure is remarkable, to say the least. This suggests that the industry is not waiting for a favourable tide but pushing against it. We are grateful to KpMg for mobilizing the case studies contained in this paper from across the industry truly making this paper for the industry, of the industry and by the industry. We also have admiration for the several organizations who actively participated in the development of this paper and shared ideas and information without fear or prejudice for the good of the industry and its customers. This paper well represents the very purpose and the Dna of the supply chain Leadership council. scLc is dedicated to be the playground as well as the platform of the indian transportation and logistics community. in its role as the playground, scLc will create quality and frequent interaction opportunities between the members of this community cargo owners, service providers, investors, infrastructure creators and policymakers. in its role as the platform, scLc will crystallize the opinions, discussions and wishes of the indian transportation and logistics industry to the attention of the industry itself but also policymakers. accordingly, we are glad to have provided the platform of india container Logistics & infrastructure summit 2011 for the release of this paper.

Gautami Seksaria Founder & partner supply chain Leadership council gautami@sclc.in www.sclc.in

4 | section or Brochure name

Contents
preface case studies
ABC India Agility Logistics AllCargo Global Logistics APM Terminals Pipavav Arshiya International Future Supply Chain Solutions Innovative B2B Logistics Solutions Kale Logistics Solutions Safexpress Sun Logistics 3 5 7 9 11 15 17 21 25 27 1

1 | an industry in transition. powered by innovation.

Preface
Envisioning beyond the confinements of convention is innovation. as globalization roots deeper, customers become more demanding, geographical barriers to market entry fade away and talent becomes scarce, companies that encourage innovation shall have a greater chance at staying relevant, being different and, in turn, growing profitably. Then whether this innovation is a product or process, customer centric or internal, technical or simple, driven by research or is simply a jugaad, it stands an equally good chance at creating value - only differing in quantum. Even as india may not yet be known as an economy that produces significant inventions or ground breaking innovations, its Tata nano; standardization of surgeries promoting medical tourism; godrejs chotuKool, the UsD 69 refrigerator for indias rural or even the indian premier League seem to be indicative of what lies just beneath the horizon. as companies in india move up the maturity curve, innovation is increasingly likely to be discussed in board meetings and staff appraisals, ultimately becoming an integral part of strategy. companies in the indian Transportation & Logistics industry shall be no exception. The indian Transportation & Logistics sector is at an interesting point on its evolution curve. in the last decade itself, the sector has imbibed more sophistication, both on infrastructure and service focus, than it has in previous several decades. Yet, inefficiencies continue to be the dominant factor in a sector that is both fundamental and critical to the faster growth of the indian economy. These inefficiencies represent gaps that separate this sector in india from the developed markets such as Us, Western Europe and Japan on multiple parameters of operational and cost efficiencies. The following analysis illustrates this.

Transportation and logistics industry in India vis-a-vis key global economies

Indias positioning with key global economies
Efficiency of customs procedures 5 4 Timeliness of shipments 3 2 1 0 Domestic transportation costs International transportation costs

Quality of transportation and IT infrastructure

Trackability of shipments Developed markets BRIC

Logistics competence India

note:

source:

(a) scores depict Lpi (Logistics performance index) of select markets (b) Developed markets refer to the Us, the UK, singapore and Japan (c) Bric refers to Brazil, russia, india and china World Bank Lpi report 2010, KpMg analysis

an industry in transition. powered by innovation. | 2

These inefficiencies, thought to deprive india of 1-2 percent of gDp each year, are largely a result of indias diverse and complex geographic conditions, poor core infrastructure, complex tax policies and supply side constraints all of which result in high transportation, storage and service costs. at the same time, indias transportation and logistics story continues to be an attractive one, based on its rapidly growing economy, rising trade, greater acceptance towards outsourcing of logistics, significant government thrust on investment in infrastructure and landmark changes in tax and regulatory policies. it is this attractiveness, along with the potential to tide over inefficiencies that has driven scores of investors and operators to participate in the indian transportation & logistics sector and help it attain scale. investment in roads, rail, ports and aviation often in the form of public-private partnerships has provided india inc a firm ground from which the industry will operate. in the last decade, cargo handling capacity at indian ports has trebled and the overall length of roads has risen substantially. on the services side, logistics service providers are now able to offer door-to-door, integrated distribution solutions cutting across multiple modes of transportation. Besides, significant private equity investment in the sector over the last decade has helped several companies

in most segments gain scale, a basic need for innovation to take place and thrive. This scale development is also aided by the ongoing Merger & acquisition (M&a) activity in the sector, in turn, fuelling innovation, as a fragmented industry is unlikely to support anything else but a struggle for survival or profit and certainly not innovation. Besides, a large number of Multi-national companies (Mncs) now operate in the indian market inadvertently rubbing off their innovation focus on their domestic peers. all these developments are preparing this industry to emerge as a hot bed for innovation. in the following section, we present a case by case analysis of ten examples of innovation from across industry segments and companies. also, the area or type of innovation for each of these varies significantly. so, while one case is about conversion of cargo from road to more optimal modes, another is about a technology driven solution to a complex challenge and still another is about client-specific service customization to a fascinating extent. Besides, it is interesting to note that different innovations are based on significantly varying constructs and tools. in the case of the ten examples of innovation covered in this paper, the following table captures these variances.

Key focus segments of LSPs

Process reengineering ABC India Agility Logistics AllCargo Global Logistics APM Terminals Pipavav Arshiya International Future Supply Chain Solutions Innovative B2B Logistics Solutions Kale Logistics Solutions Safexpress Sun Logistics note: Vas Value-added services source: industry discussions with companies, KpMg analysis Modal shift Technology upgradation Customization Visibilty and communication Safety and security Regulatory and compliance

a a a a a a a a a a a a a a

a a a a a a a a a a a a

a a a a a

The inclusion of only ten case studies in this paper should, in no way, lead to the presumption that innovation in the industry is limited to these cases or even these types of cases. on the contrary, during the making of this paper, it became evident that the extent of innovation in the industry runs wide and deep and the number of examples runs into hundreds, much beyond the space this paper can offer. For instance, the roll-on roll-off' service operated by Konkan railways is an excellent innovation where trucks are carried on flat railway wagons as this allows for the integration of two transportation modes for faster last mile connectivity, reduced handling and environmental benefits. The case of LcL Logistix being successful at containerizing iron ore fines, traditionally carried by bulk vessels, represents a significant

achievement alongside the wider industry push for greater containerization of bulk commodities. other excellent innovations we came across included DHL smartTruck, a technology that s determines the best delivery route dynamically based on traffic conditions and radha Krishna Foodlands gps based technology meant to automate the recording of on-time deliveries by generating alerts when the vehicle is within 100 meters of the clients premise. overall, this paper is an attempt at capturing diverse examples of innovation surfacing across its several segments with the intention to broad base these successes and corresponding lessons to the industry as a whole.

3 | an industry in transition. powered by innovation.

Project logistics

Water is the way

ABC India

Context
ongc Tripura power company (oTpc) is setting up a 726 MW gas based thermal power project located at palatana in Tripura, approximately 60 km from agartala in north East india. The Engineering, procurement and construction (Epc) contract for this project has been given to Bharat Heavy Electricals Limited (BHEL), which has, in turn, contracted with aBc india to transport heavy machinery to the project site from BHEL manufacturing units in Trichy, Haridwar, Hyderabad and Bhopal in india and from general Electric in Texas.

Resolution
aBc india developed a multi-modal, multi-national logistics solution that was planned and executed over the course of seven years (2004-11). The integrated effort involved the following key developments spearheaded by the concerned agencies with support from the governments of india and Bangladesh: an amendment was made to the inland Water Transit and Trade (iWTT) protocol between india and Bangladesh to allow the use of ashuganj port in Bangladesh as a port of call from which indian cargo sent by barge to ashuganj can transit by road to agartala in india. close follow up and coordination was ensured with various government agencies in Bangladesh such as immigration, customs, roads and Highways, communications, Border security Forces and local District administration authorities to secure permissions for use of aBcs indian trailers and crew within Bangladesh for the road transportation from ashuganj to india. construction of 25 bypasses to weak bridges, 3 riverine jetties, and reconstruction/widening of 16 Kms of roads between ashuganj and palatana. For the heaviest consignment from Hyderabad weighing 300 tons, end-to-end distance was about 2,500 Kms (against about 4,000 Kms for normal road freight), which was covered in the following 3 stages: From Hyderabad to Machilipatnam port by road, (requiring the development of six bypasses to weak bridges and a jetty at the port) From Machilipatnam to ashuganj in Bangladesh by a coastal-cum-riverine barge From ashuganj to palatana in Tripura by road.

Complication
given the significant size of these project cargoes and the hilly terrain of indias north eastern region, the assignment involved multiple challenges: safe handling and transportation of huge machines weighing up to 300 tons through the conventional land route via assam was challenging, given the poor road infrastructure in assam and Tripura especially the several bridges en route, incapable of handling this weight. The other route quite innovative in itself, involving the use flat top barges plying on inland waterways via Bangladesh to suitable discharge points in indian territory for further trucking to the site, was not considered feasible since the heaviest cargo taken via this route to Tripura in the past weighed 100 tons only. The road portion of this route passed via hilly terrain, not suitable for a 300 ton package. air transport was ruled out as the heaviest package of the cargoes weighing 300 tons was more than double the capacity of the largest commercial heavy lift aircraft globally.

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The other complex consignments totaling 77 were transported from Trichy. End-to-end distance from Trichi to palatana was about 3,000 Kms (against about 4,500 Kms for normal road freight), split as follows: Trichi to Karaikal port by road ~ 170 Kms Karaikal port to Kolkata port by coastal shipping ~ 1,700 Kms Kolkata port to ashuganj port by river barges inland Waterways Transportation (iWT) through rivers such as Hoogli, raimangal and Meghna ~ 1,000 Kms ashuganj port to palantana by road ~ 130 Kms Total transit time was about 45 days without counting halts at transshipment points.

End-to-end transit time was 50-60 percent of the time taken with road-based movement Transportation cost is estimated to be 40-50 percent of that by roadways, primarily due to shorter distances and lower fuel consumption in-transit safety of shipments, given their extra-ordinary dimensions and weight, was significantly high on waterways than that on roads. complete road-based transportation would have involved many more inter-state border crossings than those in waterways, thus increasing the in-transit delays, apart from coordination with multiple agencies including railway authorities while transiting through rail infrastructure such as crossings or bridges.

Outcome and Impact

against the background of several challenges inherent to the transportation of project cargoes amplified by the north Eastern terrain, the innovative idea around the use of multiple modes of transportation pivoted around waterways brought the following positive impact: The project was made possible as a pure road transport approach was neither feasible nor safe. The discovery of the multi-modal route between Kolkata and agartala involving roads and waterways is expected to reduce the transit time and cost for general cargo transport between West Bengal and Tripura by 65 percent, thereby directly benefiting the entire state of Tripura and other parts of north Eastern india. share of road-based transportation was reduced to a low percentage (for instance, 5 percent for cargo transported from Trichi to palatana) in the multimodal approach compared to pure road-based trucking. This resulted in following crucial advantages:

The multi-modal, multinational approach involving coastal shipping and inland waterways to move the heaviest ever cargo to Tripura has significantly widened the North Eastern regions logistical bandwidth, thus, setting a precedent for years to come.
Ashish Agarwal MD, aBc india

5 | an industry in transition. powered by innovation.

Warehousing and distribution

Technology 1, Inefficiency 0

Agility Logistics
Context
Beiersdorf ag is a group of globally active companies focused on the development, manufacture and worldwide distribution of high-quality skin care and beauty products, some of the brands being Eucerin, La prairie, Labello, 8x4 and Hansaplast, Beiersdorf is germanys largest cosmetics company and one of its brands, niVEa, is among the worlds best known brands amongst skin care and beauty products. Beiersdorf entered india in 2005 to conduct its manufacturing and distribution for the indian market locally. in the last 5 years, Beiersdorfs business in india has demonstrated strong growth adding to volume and distribution complexity. agility Logistics has been their logistics service provider since the beginning and have been a partner in this growth one of the indicators of which is the growth in the number of invoices processed annually from 11,000 in 2009 to 23,000 currently.

Resolution
To provide an optimum solution to the client, agility Logistics proposed to merge two systems viz. the clients sap and agilitys Warehouse Management system (WMs) via an Electronic Data interchange (a paperless transaction process in which two systems transact data electronically using various protocols), which took around three months of rigorous user acceptance procedures). also, significant customization of WMs was undertaken to achieve the desired results. The entire development was done in-house. For each sKU, a best fit was arrived at based on complex volumetric calculations. This also helped in designing a mathematical tool to arrive at a pallet-wise calculation at each location thus completely doing away with the need for physical counting of pallets for billing. To ensure efficient usage, users from both ends were trained on the new system. There was initial skepticism which quickly gave way to acceptance once the results were found to be in line with expectations.

Complication
nivea wanted pan india warehousing operations & secondary distribution with minimum human intervention. The idea was to have online, system-driven operations on real time basis where the criteria for selection would be batch wise, manufacturing date wise picking on FiFo basis. given the large sKU base and transactions close to 23,000 per annum where the product is a cosmetic direct applied on human skin, the challenge was enormous. also, the requirement of batch/lot traceability, which is essential in case of recalling a particular batch/lot already distributed across india to various distributors added to the complexity. This was further compounded by month-end skews, where the last 4 days of any month accounted for 30 percent of monthly volume, as well as the seasonality of the product.

Outcome and Impact

The success of the project lay in its simplicity and reduction in repeated manual entries which brought down the error rate to near nil. The speed of the transaction increased tremendously. The rate of processing put away & pick went up by almost 70 percent as errors were almost zero and two systems were working in tandem in a seamless environment. With advance shipment notice and pre-alert mails, the storage/space was efficiently managed since the warehouse had a clear plan of the number of incoming pallets which also meant that the cases of storage area spill over seldom occurred. since the warehouse locations are mapped in the system, this has resulted in efficient put away and pick. These measures reduced the turnaround time of put and pick and hence contributed to faster operational output. clear visibility of inventory has led to less out-of-stock

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problems and better use of warehouse space. inventory accuracy between physical & system stock now stood at almost 100 percent. in addition, the robust Management information system (Mis) automatically generated emails to all stakeholders at predetermined intervals and offered a complete visibility of inventory across india, thus enabling an efficient product and distribution planning supporting strong sales growth.

Sensible automation and customised adaptation of new technology is the pivot of a long term partnership between a logistics service provider and its clients.
Tom Joseph cEo, agility Logistics

7 | an industry in transition. powered by innovation.

Warehousing

Whirring value for an Auto OEM

AllCargo Global Logistics

Context
company XYZ, an auto original Equipment Manufacturer (oEM) engaged in the manufacture of commercial vehicles, operated and managed an after-market spares warehouse located within its production premises. The company functions through approximately 100 dealers and distributors spread across india. The after-market warehousing facility comprises 40,000 sq. ft. and houses approximately 20,000 stock-keeping Units (sKUs), which are distributed within india and select markets internationally. acquire a clear understanding of the companys business model market commitments Understand critical success factors relative to warehousing as a major influencing factor in the companys supply chain identify gaps in the current state relative to warehousing create and evolve a fit-gap analysis of warehousing operations relative to market commitments executed via a detailed study of operations and value-stream mapping. The approach constituted re-engineering the operating model and introduction of processes and disciplines that fit the companys business needs well: performance linked service level agreements Measuring operational cost versus service value Lean methodology to increase efficiency Knowledge management with emphasis on best practice.

Complication
The company operated the warehouse through a 3pL service provider and repeatedly encountered difficulties with meeting its business targets and spare-parts delivery schedule to the market. Below were the key challenges: Dispatch orders took 5-7 business days from date of issue to shipments loaded for delivery. The bottleneck created high levels of dissatisfaction amongst dealers and end-customers. The failing was significantly divergent to the market positioning and brand values of the company. as volumes rose, so did the companys expectations from the 3pL with respect to more timely and frequent alerts.

Outcome and Impact

Within 3 months of commencing operations (Jan to Mar 2011), agL delivered key business enhancing initiatives: robust and valuable reporting mechanism facilitating timely information generation enabling much improved response to incoming or potential orders from dealers and distributors 70 percent reduction in lead time for turning-around spares parts delivery resulting in higher availability of products in the market 40 percent increase in inventory turns increased satisfaction levels among end customers.

Resolution
allcargo global Logistics (agL) assumed responsibility for operations within this warehouse during December 2010 with the objective of introducing sustainable and high-performance initiatives.agL initiated the following programme:

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Evaluate every opportunity and challenge the existing business process to rationalize and improve them further. Amongst others, modern warehousing techniques offer tremendous potential to improve efficiency, reduce overall logistics cost and optimize inventory turn-around time.

Ken Eccles cEo, allcargo global Logistics

9 | an industry in transition. powered by innovation.

Ports and coastal shipping

Full speed ahead

APM Terminals Pipavav

Context
Hazira is a key industrial area, 59 Kms across the gulf of Khambhat from pipavav in the state of gujarat. However, due to the gulf, the road distance from Hazira to pipavav is 494 Kms. as a result, the Essar group, a leading industrial house, with a captive port in Hazira, trucks about 1,300 TEUs (Twenty-foot equivalent units) of its containerized cargo on a monthly basis from Hazira to nhava sheva, 350 Kms by road.

Complication
in the existing logistics landscape, critically determined by geographical factors such as the gulf of Khambhat and distances thereof, the Essar group had no option but to move the cargo by road to nhava sheva, a significant distance away, since rail facilities are not available in this region. This setup costs approximately inr 20,000 per TEU to/from nhava sheva. This has meant a significant loss of business opportunity from a catchment volume of about 250,000 TEUs annually that get fragmented over multiple ports in the region and moved by road.

Logistics landscape in Southern Gujarat: Select transportation options

Gujarat 494 Kms

Pipavav

GoK Hazira Maharashtra 350 Kms

59 Kms

Nhava Sheva

Key

Land based route Coastal shipping route GoK Gulf of Khambhat

given this advantage of shorter road distance as compared to pipavav, nhava sheva has been the natural gateway port for cargo originating in the Hazira/surat region in southern gujarat.

Within this broader set up, apM Terminals pipavav is a private gateway port located strategically in gujarat well positioned to create shifts in traditional cargo movement patterns towards the clients benefit.

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Resolution
To provide an alternative supply chain for this cargo that offers reduced transit time and cost, apM Terminals pipavav introduced a sea route to pipavav for south gujarat cargo. as the first step, pipavav initiated collaboration with Essars Hazira port. Essars Hazira port was designed for its captive cargo although it has plans for expansions in the future. Besides, the port was equipped to handle bulk cargo only. pipavav explored the possibility of transporting containers though Hazira port with some minor alterations, for instance, sling operations for lifting containers, with existing machinery and yards. Essar agreed to accommodate the handling of container cargo at its port in Hazira and also use its barges for transporting containers to pipavav where large vessels belonging to international shipping lines berth. Besides, berth windows had to be modified at pipavav to accommodate the bi-weekly calls of the barges, needing the co-operation of other regular customers of pipavav port. apart from multiple challenges related to customs procedures, bills of lading details, billing etc. that had to be resolved, one outstanding issue was to get the shipping lines serving south gujarat customers at nhava sheva to agree to come to pipavav henceforth. This challenge was amplified during the transition phase when the volume had not reached critical levels to warrant a port call at pipavav. apart from opening up a new and efficient alternative for cargo movement stimulating growth in the region, this innovation compliments the governments plan to hasten the adoption of environment friendly and cost efficient method of cargo movement. The change in the regions supply chain has resulted in a winwin situation for both Essar and apM Terminals pipavav. While the new mode/route made the customers supply chain more efficient, it also created a new business opportunity for Essar in providing coastal shipping services in the future. Encouraged by this success, pipavav has been discussing similar opportunities with players such as reliance and steelco gujarat Ltd.

Outcome and Impact

pipavavs innovative proposition, achieved with due co-operation from the Essar group, resulted in direct savings of more than inr 5,000 per TEU for Essar apart from saving about a week (including stuffing, transporting, custom clearing and loading the container on to the ship). not without reason then, the initial monthly volume of 72 TEUs that were moved via the barge service from Hazira to pipavav is now about to reach the 1,200 TEUs mark.

This case is an excellent example of synergy between two separate infrastructure companies to offer a strong and tangible benefit to its users. On the basis of a 25 percent saving per TEU and an increase in container traffic, this idea won the prestigious Play to win award amongst APM Terminals worldwide network of 50+ ports/ terminals for creating new business opportunities through innovation . Prakash Tulsiani MD, apM Terminals pipavav

11 | an industry in transition. powered by innovation.

Free Trade Warehousing Zone

Structure through infrastructure

Arshiya International

Context
This case study relates to benefits of importing products into india through FTWZ (free trade warehousing zone which is a deemed foreign territory) company aBc has a manufacturing facility in pune. aBc imports raw materials from multiple suppliers globally. Two suppliers, based in china and the Usa, have been considered for this case study. While supplier 1, based out of china, routes the shipments by sea to aBcs factory at pune via Jawaharlal nehru port Trust (JnpT) resulting in 45 day-long inventory in pipeline, supplier 2, based out of Usa, moves the cargo by air via Mumbai, leading to 33 day-long inventory period.

Supply chain without FTWZ

Supplier 1 - China

JNPT (CIF) (3.47 percent of imports) Total inventory in pipeline (China): 24+6+1+12+2 = 45 days 6 days 8 Kms Mumbai airport 12 days 7 days Warehouse Kathawade 12 days

Pune factory 2 days

Supplier 2 USA (EXW)

6 days (4.84 percent of imports) Total inventory in pipeline (USA): 7+6+1+12+7 = 33 days

* at 38 percent plant capacity utilization

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Complication
The above explained supply chain model had some inherent challenges: The quality check occurring post duty payment contributed to augmented reverse logistic and salvages costs. For supplier 1, aBc imported under advance license. Hence, there was no locking of working capital due to duty payment. However, working capital was locked on inventory for 14 days during transit from the warehouse to the plant, cost, insurance and Freight (ciF). For supplier 2, working capital remained locked since inventory was maintained post duty payment, and on inventory during transit from the Usa to aBcs plant that took 33 days on an ex-works basis.

Economies like Dubai & Singapore have prospered by offering unique benefits to companies, due to the presence of Free Trade Zones. Similarly, FTWZs in India will offer a unique operational, regulatory & tax environment, enabling companies across industries involved in imports, exports & re-exports to eliminate inefficiencies & added costs from their current supply chain in India, thus boosting their profitability. Ajay S. Mittal chairman and MD, arshiya international

13 | an industry in transition. powered by innovation.

Resolution
arshiya international, a leading player in the FTWZ domain, designed customised solution for aBc by effectively integrating its FTWZ within the overall supply chain. as depicted in the representation below, inclusion of FTWZ eliminated the need for a warehouse at Kathawade, near the factory.

Supply chain with FTWZ

Supplier 1 - China

Inventory (China) supplier at FTWZ: 24+2+3 = 29 days, liability on supplier 1

2 days JNPT
Arshiyas FTWZ

Consolidate supplies Dispatch twice a week 140 Kms

Pune factory Inventory: 3 days

Reduction from 6 to 2 days Mumbai airport Supplier 2 USA (EXW) 2 days

VMI

Inventory (USA) supplier at FTWZ: 7+2+3 = 12 days, liability on supplier 2

Using this solution, aBc implemented Vendor Managed inventory (VMi) model in the FTWZ. Here, the suppliers maintained their inventory in the FTWZ, wherein the ownership of the cargo lay with them. ownership was transferred to aBc from the supplier only post clearance from the FTWZ.

Outcome and Impact

The use of an alternative supply chain by the two suppliers, supported by arshiyas innovative solution, had the following benefits on aBcs business model. inventory holding days for aBc with respect to shipments from supplier 1 (sea, ciF) were reduced from 14 days to 3 days, resulting in a saving of 11 days. inventory holding days for aBc with respect to shipments from supplier 2 (air, EXW) were reduced from 33 days to 3 days, resulting in a saving of 30 days. Quality assurance at FTWZ before dispatch eliminated any possibility of rejection post duty payment, thus eliminating the avoidable reverse logistics cost. The turnaround time for the cargo to reach the FTWZ from the JnpT port reduced from 7 days to 2 days, since FTWZ is a declared Dry port with its own custom clearance set up. all documents and the cargo from JnpT port moved directly to FTWZ without customs clearance needed at the port (for instance, Bill of Entry was filed at the FTWZ). Liability and ownership of stock at FTWZ changed hands from aBc to the suppliers. provision to pay duty at the time of dispatch, with flexibility of 24 x 7 custom clearance, helped release working capital for aBc. The supplier was at increased convenience to handle rejections because of a hassle free re-export facility at the FTWZ. apart from the fact that the warehouse near the factory became redundant, other benefits included end-to-end visibility to aBc through customized information Technology (iT) solutions, reduction in air shipments and related high costs, quality control prior to duty payment, availability of buffer stock, etc.

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indicative cost benefit for aBc out of the two suppliers was as follows:
Benefits accrued to ABC at aBcs plant capacity utilization With respect to Supplier 1 38% 75% 100% With respect to Supplier 2 38% 75% 100%

all figures below in inr mn Working capital unlocked from inventory reduction (from 14 days to 3 days) Working capital unlocked from duty deferment Total working capital unlocked interest saving (at 10 percent) due to unlocked working capital Benefit due to quality check inside FTWZ (no rejection at plant) Total benefits due to interest saving and quality check inside FTWZ 2.13 0 2.13 0.21 0.33 0.54 4.21 0 4.21 0.42 0.65 1.07 5.60 0 5.60 0.55 0.87 1.42 8.11 1.04 9.15 0.91 0 0.91 16 2.05 18.05 1.81 0 1.81 21.34 2.73 24.07 2.41 0 2.41

note: The above calculations are done on an annual basis. The savings have been calculated based on (a) Total Value of imports from supplier 1: inr 70.74 mn; (b) Total Value of imports from supplier 2: inr 98.65 mn; (c) Weighted average cost of capital: 10 percent; (d) average duty paid by aBc on the raw material: 24 percent

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Warehousing and Distribution

Future lies in automation

Future Supply Chain Solutions

Context
Future retail is a leading retailer in india in the organized segment, operating various brands such as Big Bazaar, pantaloon, Food Bazaar, central and eZone across india. The company has a massive footprint in the indian retail market, with a turnover of about inr 95 bn (2009-10)1, about 16 mn sq.ft. of retail space and over 1,000 stores spread across 80 cities and 60 rural centres in various formats. Fashion and apparel has been one of the main growth drivers for the business and a sense of the scale of this segment can be gauged from the fact that the apparel volume that moves through the retail network is much more than that of all other branded fashion apparels in india put together. Large and growing volume across a large and a widely spread retail network has added significant complexity to their distribution operation.

multiple categories of products to be handled with each category having its own supply chain needs. The other critical challenge was to deal with peak volumes during the august 15 and January 26 sales promotion events announced by the company. For instance, the average picking of 30,000 apparel pieces per day under normal sales days was to treble at one of the warehouses. This translated into increasing the number of pickings to 3-4 times the normal capacity (with additional labour) without compromising on outbound accuracy.

Resolution
To resolve the complex challenges faced by the company, Fscs analyzed the detailed data on the various parameters such as current order volumes, number of stock-keeping Unit (sKUs), inventory in process, number of end locations to be serviced through a Distribution centre (Dc), etc. accompanied with this analysis and the domain understanding of how each product category behaved through the supply chain, Fscs decided that it was the apparels category where new technology was needed to handle the challenges, particularly picking and sorting. For picking, Fscs already had WMs. However, in a scenario with huge volumes and a higher number of outlets per warehouse, batch picking was imperative, and with batch picking, physical sorting capacities needed to go up manifold. Fscs then started to look at the available technologies that could help increase the sorting speed drastically and at the same time improve the accuracy of the goods processed. another set of factors determining the technology to be used were cost, reliability and scalability - all at the same time. To arrive at the best suited technology, Fscs evaluated multiple sortation systems such as ring sorters, Bomb Bay sorters,

Complication
one of the key questions facing the company was how to achieve higher throughput from the warehouses managed by the 3pL service provider, Future supply chain solutions (Fscs). Business projections for the company were significant, both in terms of absolute quantities that had to be handled by the warehouses and the number of stores to be serviced per warehouse. With the bigger warehouses already servicing over 40 stores and alongside increasing projections, the challenge was enormous. Fscs already had a Warehouse Management System (WMs) which was helping it with running the operations at such large volume levels. it was now all pivoted around increasing efficiencies handling huge volumes, achieving fill rates of 99 percent and ensuring dispatch accuracies to 100 percent all of these to be achieved at an optimum cost. Further, there were

currency conversion at 1 UsD = inr 45

an industry in transition. powered by innovation. | 21 section or Brochure name 16

cross Belt sorters, pick-to-Light systems and put-to-Light systems among others. Finally, put-to-Light (pTL) system was selected because of its effectiveness in the given scenario on all the critical requirements discussed above. also, this was a simple system that required minimal training to the user at the lowest level, an important factor in the indian context. Further, to doubly ensure accuracy especially during the peak days, Fscs integrated the pTL with a print & apply system which ensured that the packed boxes were subjected to a weight check and were rejected if the check failed. While addressing these process-based improvements, Fscs had to overcome several challenges such as those in seamless technology integration with the WMs, coordination with multiple vendors and the expected short turnaround time for implementation. owing to timely resolution of all these issues, Fscs was able to implement pTL within a short span of 5 months (May 2010 september 2010) across 5 large warehouses.

next, visibility in terms of inventory at every stage increased. More detailed and frequent Management information systems (Mis) reports could now be generated as more measurement systems could now be placed at the critical steps. This enabled the warehouse management to take immediate corrective actions where necessary. Moreover, the ease of training resulted in fast roll-out of the technology, while the scalability ensured that the increasing number of stores mapped to any Dc was not a challenge anymore in terms of picking and sorting capacities. The other advantage was that the adopted measures relieved some labour bandwidth. Fscs could now deploy more staff in inventory management to ensure stock accuracy through continuous cycle counts. also, exception management now got its due focus.

Outcome and Impact

as expected, there were visible improvements in productivity and efficiency: while processing capabilities in terms of sorting and packing the pieces increased three-0fold, batch picking efficiencies also increased as sorting was no longer a bottleneck. This meant that with the same resources, Fscs could now pick, sort and pack at thrice the earlier pace. Further, while the outbound box capacity utilization increased dramatically to almost 100 percent, up from an average of 80 percent, the outbound stock accuracy increased minimally at first and then kept on improving as the staff became increasingly conversant with the new technology. although this improvement was initially triggered by the WMs, the accuracy improved further despite the increasing volumes.

Increasing reliance on technology solutions is the key to increasing efficiency of logistics operations, particularly while handling huge volumes on a daily basis. As India gears up for opening up of the organized retail sector, a well managed and tech-assisted supply chain will emerge as a key enabler and differentiator.
Anshuman Singh MD and cEo, Future supply chain solutions

17 | an industry in transition. powered by innovation.

Rail

Changing track, changing tack

Innovative B2B Logistics Solutions

Context
Marble and marble products originating in rajasthan was moving to West Bengal primarily by road, which, as is the case across most transportation corridors in india, was dominated by unorganized trucking companies. This transportation route also involved movement of products from other segments such as white cement manufacturers and clay mines, though marble formed the largest part of the product mix.

rail-based transportation. inlogistics, a container train operator with the license to operate trains across most of the regions was keen to catalyze this potential shift. But besides rakes and their operational capability, the following formed the cornerstones of inlogistics strategy to enter this segment. 1. Development of perceptual acceptability in market for containerized movement 2. attainment of an optimal aggregation rate to facilitate competitive delivery time 3. Development of a centralized information system set-up 4. generation of demand sufficient to achieve optimal utilization in turn affecting frequency favorably. For this, the area of aggregation for inlogistics was expanded from 150 Kms around Kishangarh region to a catchment area extending as far as 700 Kms. Further, inlogistics helped with redesigning the markets supply chain by employing a four pronged strategy. High rake frequency: TTo ensure that the promised delivery time is achieved, it was necessary to not just increase the number of rakes existing in the system but also ensuring that they turn around fast which depends a lot on the aggregation of rake load. inlogistics made continuous business development effort to keep pace with the committed frequency of one rake per three days. a large part of the load was picked from the Kishangarh market; however, the catchment area was widened to all over rajasthan to add to the speed of aggregation.

Complication
The movement of marble from rajasthan to West Bengal was plagued by unavailability of trucks on a regular basis, frequent fluctuation in freight rates, unreliable delivery time and lack of information about the cargo in transit. Besides, breakages and loss of material during transit added to the inefficiency of the overall logistics system. The incidence of breakage was so frequent that the marble industry had virtually accepted up to 5 percent of marble breakage during transit as a norm and it was factored in the costing. The costs were also affected by rising fuel prices and axel load deduction. The delivery and cost uncertainties made product pricing in Kolkata market difficult stabilization of which could only be achieved by taking a hit on margins either at consignor or at consignee end.

Resolution
Heavy cargo type, quick and safe delivery requirements, the desire to protect against material loss during transit and margin pressures driven by high and varying logistics costs came together as good reasons for the market to consider a shift to

an industry in transition. powered by innovation. | 18

To further ensure faster aggregation, inlogistics also introduced aggregation of various other commodities namely Kotastone from Kota, white cement from large white cement producers and clay from Merta and Bikaner. additionally, aggressive efforts in business development were made to get return loads in the east-west direction. congregation of these efforts led to following improvements: gradual ramp-up of circuit frequency from the initial 1 rake per ten days to 1 rake per 3 days Very competitive delivery times that improved from the initial 18-22 days to 11-14 days one way transit time. b) Transparent and standardized freight: Ever increasing haulage charges, increase in first & last mile charges due to diesel price hikes, demand fluctuations and regulatory changes had resulted in dynamic variations in cost when the market depended on road transport. inlogistics introduced flat, standardized pricing, offsetting the margin erosions on the clients end due to premium pricing during constrained supply conditions. To maintain transparency in logistics costs for customers, inlogistics issued price circulars and to insulate the customers from pricing uncertainty, inlogistics limited the number of revisions in price circulars in any given month.

c) Credit facility for customers: customers with high volumes and quality payment history had no existing advantage vis--vis the customers with low volumes and/ or poor payment history. inlogistics offered credit to customers offering consistently high volumes coupled with good payment record. Thus, inlogistics was able to ensure the stickiness of large volume key customers towards containerized movement of their products in turn, enabling the longer term sustenance of this service.

Sometimes the simplest innovation can unlock significant value. Like this case brings out, the marble industry had virtually accepted breakage during transit as the norm and the same was factored in costing. However, containerized rail carriage of the product turned the norm on its head.

Hardeep Singh cEo, inlogistics

19 | an industry in transition. powered by innovation.

d) Use of technological innovations: relying on technological innovation towards service improvement, inlogistics pioneered the concept of a call centre for smooth working of container order booking and allocation. Further, gps devices planted on its fleet (vehicle and rake) provided real time cargo update, which was shared with customers through sMs and the web.

Rail driven marble supply chain

Outcome and Impact

inlogistics consistently delivered containers in average 11-14 days time and provided one rake every third day. Though this is more than the average road-based one-way transit time of 6-8 days, customers considered rail-based transportation to be a good alternative due to various other advantages such as consistency, safety, visibility and reliability. in terms of cost benefit, rail freight is priced either equal to or at 1-2 percent higher than road freight. However, considering lower breakage and credit offering, rail freight works out to be 3-5 percent cheaper than road freight. The preference for rail over road is evident from that currently 90 percent (tonnage basis) of the total marble is moved in containerized form. The first mover advantage, punctuated by corresponding risk, has meant that inlogistics has 70 percent market share of the total movement by rail. This success has a much wider and deeper implication as compared to its immediate appearance. First, because this is an attempt to dent indias sub-optimal modal mix in that more than two-thirds of all cargo is carried by road when such should be the share of rail given the latters operational, cost and environmental efficiency. second, because it sets a precedent for this young industry to scratch deeper than the surface and create new business instead of fighting over the existing.

an industry in transition. powered by innovation. | 20

21 | an industry in transition. powered by innovation.

Air freight

Coupling businesses, decoupling inefficiencies

Kale Logistics Solutions

Context
The movement of air cargo in the indian scenario gets affected on account of multiple factors that contribute to higher lead time in the movement of cargo, increased paper work, delays and other inefficiencies. The stakeholders of the cargo community in india - freight forwarders, custom House agents (cHas), consignors, consignee airports, seaports, airlines, transporters, and customs amongst others - have to grapple with many challenges to perform their core job of transporting the cargo, timely, safely and within budget.

in at least 6-7 different systems during the transit of goods which ultimately results in delays, increased costs and errors. Airlines: given that most of the forwarders did not have the capability to electronically create and transmit the shipment data, multiple clients including a leading indian private airline and a leading middle-eastern airline, used to receive enquiry & booking requests manually which added to its costs, reduced profitability, impaired planning and delayed transportation. also, there was no audit trail for future reference. in case of loss of papers, airlines failure to reproduce critical documents resulted in penalties. inappropriate charges on waybills cause erroneous air Way Bill (aWB) information which in turn leads to revenue leakage and redundant data entry. above all, the company had to forego market opportunities due to inability to reach the highly fragmented freight forwarding industry in india. Customs House Agents: companies in this segment, for instance, Transline air cargo services, had to manually handle a lot of documentation related to operations, finances and forwarding in addition to communicating through phone/ e-mails that also included communication related to job status. also, several cHas systems were not able to maintain customer contracts/ quotations.

Complication
almost all the key stakeholders were facing their own set of operational hurdles that practically converged into the single big challenge of smooth and timely exchange of information across the players and their diverse technology platforms with different capabilities: Consignors: Lack of shipment visibility across the supply chain prompted the consignor to stock larger inventory to minimize stoppages in assembly line production. For lack of end-to-end automation, even world class Enterprise resource planning (Erp) systems on part of consignors could not be of rescue due to lack of similarly capable interactive systems on the part of other stakeholders (Forwarders, cHa, Transporter, Banks and consignee) in the supply chain. Freight forwarders: Forwarders role on coordinating shipments entire movement involved interaction with several stakeholders, but via manual/semi-automated media, entering the same data

Resolution
To address these challenges, Kale Logistics in association with air cargo agents association of india (acaai) and other stakeholders from the air cargo industry developed Universal platform for Logistics and integrated Freight Transport (UpLiFT), a first-ofits-kind community wide automation platform for the air cargo

an industry in transition. powered by innovation. | 22

industry. The product addressed most of the challenges faced by the industry stakeholders by mutually integrating a variety of company types: freight forwarders, cHas, consignors, consignee airports, seaports, airlines, transporters, and customs. Consignors: UpLiFT provided companies here with complete shipment visibility and also ensured seamless interface to directly exchange data between consignors systems and UpLiFT, thus, ensuring end-to-end automation across the supply chain. Freight forwarders: challenges that originated due to a forwarders complex coordination with multiple stakeholders were resolved by providing a single window for interactions with all involved entities like in case of how the interaction takes place now between Links Forwarders and United shipping services. Forwarders no longer needed to re-enter the data that had been entered by shipper at his end as this data now got automatically updated into the UpLiFT system and was made available to all the constituents in the cargo supply chain. Airlines: UpLiFT enabled electronic receipt of waybill data like Master aWB/House aWB for airlines. post UpLiFT implementation, airlines received alerts from custodian / agent regarding Freight status Update (FsU) messages and gaLaXY (enterprise wide cargo handling system for cargo ground handlers) messages. such electronic communication prevented revenue leakage and redundant data entry. Further, UpLiFT, staying updated always, helped airlines remain compliant with global initiatives such as e-freight, without which airlines would have to bear the costs in storage / maintenance of physical documents.

Customs House Agents: UpLiFT resolved the complications of cHas too as in the case of sanco Trans Limited & Links Forwarders. These players could now electronically execute multimodal air-ocean transactions, resulting into significant cost saving with UpLiFTs multi-branch feature that can be accessed from anywhere and anytime.

Outcome and Impact

Kale Logisticss innovation in the form of UpLiFT has practically overhauled the entire supply chain of its clients across industry segments.

Adopting a single window platform such as UPLIFT to communicate with all the stakeholders involved in cargo transportation and logistics will eliminate redundant communication and increase efficiency, thus reducing the overall operating cost. Sumeet Nadkar cEo & MD, Kale Logistics solutions

23 | an industry in transition. powered by innovation.

Industry scenario without UPLIFT

note: The arrows and texts in the image above represent some of the information exchanged between the industry stakeholders.

an industry in transition. powered by innovation. | 24

Industry scenario UPLIFT

specifically, UpLiFT has benefited clients in the following ways: UpLiFT successfully eliminated manual operations, paperwork, and redundant data entry and brought end-to-end shipment visibility across the supply chain. it also addressed key concerns of indian custodians like Mumbai international airport Limited (MiaL) by directly interacting with its present system (gaLaXY), reducing data entry effort and time, thus improving user productivity by about 70 percent. it benefited smooth transportation of around 28 percent of indias air cargo shipments, since currently 40 freight forwarders and 38 cHas get benefited from the UpLiFT air

cargo process. The system is connected to one of indias largest airport terminal operators, MiaL, for custodian operations and exchanges EDi messages with several airlines and with indian customs. indian forwarders moving from manual operations to online filing through UpLiFT can look forward to at least two-third savings from its current costs per shipment which can be around 8-10 Euros for filing a single shipment as per EU regulations. Even the airlines experience significant time & efforts saving due to electronic filing of aWBs coming from UpLiFT directly to their system, which they otherwise have to capture manually. This also avoids errors in data entry.

25 | an industry in transition. powered by innovation.

Reverse logistics

Going reverse to go forward

Safexpress
Context
apparel & lifestyle is one of the largest segments from the perspective of reverse logistics. one of the largest players in this industry, Madura garments has significant annual volumes being sold under different brands across retail stores in india. some of these include allen solly, Esprit and Louis philippe. as volumes rose, so did the complexities around reverse logistics for Maduras products which needed to be managed efficiently. with well-trained tailors who could professionally handle Maduras premium products, upgrading them to their original market value. Eventually, safexpress was also responsible for moving the goods to high-demand retail locations.

Outcome and Impact

The reverse logistics service by safexpress helped Madura garments deal with dead inventories optimally. owing to this model, the distances that rejected goods would have to travel were curtailed significantly resulting in a major reduction in turnaround timelines and cost. With safexpress customized reverse logistics including value-added services, Madura garments could focus on its core businesses while the retailers were benefited as the duration of their locked-up capital in inventories was optimal.

Complication
While moving through the reverse supply chain of Madura garments across the country, some of the goods either got into ageing because of sudden change in fashion/customer preferences at that location or got damaged in transit, thus, becoming non-saleable. in case a new product was found to be defective, the retailer would return it to the distributor who, in turn, would return it to the manufacturer. significant time and commercial resources of Madura garments got locked up in these processes. Madura garments wanted to reduce the time and costs involved in the backward supply chain but also prevent customer dissatisfaction, cash lockdown for the retailer and a rise in the distributors inventory.

Resolution
To address the issues faced by Madura, safexpress introduced a well considered reverse logistics process model. Under this model, safexpress, a 3pL service provider, directly took the defective goods under its possession and moved them to reverse logistics centres, where thousands of stock-keeping Units (sKUs) such as buttons, threads, clothing, labels, etc., were maintained as inventory by safexpress. apart from managing the daunting task of matching the right sKU with the right product, safexpress also ensured that the reverse logistics centres were equipped

Reverse logistics has always been a grey area for logistics service providers as well as manufacturers. However, when customised to a clients needs and accompanied with valueadded offerings, reverse logistics, as a service, has the potential to become a key tool for overall cost optimization.

Safexpress

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27 | an industry in transition. powered by innovation.

Liquid logistics

Ballooning growth

Sun Logistics

Context
Traditionally, liquid cargo has been carried in tank containers. The introduction of tank containers in the mid-1980s had helped the market move from transportation of liquids in bulk or in drums packed in dry containers. This helped in achieving unitization of liquid cargo and offered efficiency through an elimination of the need for drums as well as ease of multi-modal distribution. More recently, sun Logistics, a specialist liquid logistics service provider, pioneered, together with a handful of firms, the introduction of flexitanks in the market which represented a significant innovation over existing methods. Flexitank is a cost effective, single use, biodegradable packaging which is placed inside a normal container converting it to a tank for carriage of liquid cargo such as non hazardous chemicals, wine or juices.

3. Whether flexitanks can survive the vagaries of a sea voyage or transportation by road or rail, especially in the context of the state of the infrastructure in india.

Resolution
surprised by the reaction but convinced by the value and applicability of the innovation in the context of its customers in india, sun Logistics took it upon itself to nudge the customers mindset into acceptance for the flexitanks using the following measures. 1. sun Logistics initiated an educational program to educate the potential customers in the usage of flexitanks. samples of bags were specially developed and handed over to the customers to check compatibility of their products with the construction materials. Meetings were held with customers explaining to them the savings they can expect by transportation in flexitanks. Trials were held in the plants of indian exporters to demonstrate the capacity and strength of the product to them. The customers were educated on the pumps to be used, the correct filling temperatures and proper installation of the flexibags. 2. insurance was made available to all customers for loss of cargo including on third party claims against any leakages due to manufacturing defects.

Complication
The complication was that in spite of the significant benefits offered by flexitanks, the industry was reluctant to accept it since it represented a step change from traditional carriage methods potentially depriving this innovative product of the time it takes to gain a foothold in a new market and worst still, possibly depriving the market of the innovation itself. The concerns of customers could be summed up under the following three heads. 1. general reluctance towards change 2. Flexible packaging, hence the fear of losing the cargo

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Flexitank loaded in a container; ready for shipment

3. The continuous r & D carried out helped us develop a product that was compatible to the indian climatic and infrastructural conditions. i) all leakages were investigated for cause and tests carried to double check ii) compatibility of products with construction materials. iii) an understanding the international requirements in manufacturing of flexitanks and adding the indian requirements to attain the most optimum product iv) impact tests were conducted at TUV germany twice to study the impact and force on flexitanks during their voyage at sea v) impact test performed at Transportation Technology centre, inc., association of american railroads (TTci aar) Usa for testing withstanding force of 2g.

and disposal costs of a flexitank are 30-40 percent lower than those of drums for the same volume of freight. also, flexitanks obviate the need for cleaning which is required in case of tank containers. in addition, balanced return loads, often crucial to the commercial viability of tank container movements, is not a factor for flexitanks. one of the softer outcomes of this case is the learning that it may often not be enough to introduce an innovation in the market place with the assumption that its advantages will automatically lead to its acceptance.

Outcome and Impact

The impact of the measures undertaken by sun Logistics resulted in customer trials which, in turn, resulted in customer confidence. This, in turn, meant significant cost and operational advantages to these customers. For instance, in a standard 20 feet container, flexitanks increases the carriage capacity by over 50 percent as compared to the use of drums. Besides, the purchase price

An innovation, eventually, represents a change and like every change, it is resisted and may therefore warrant a well considered handholding process. Haresh S. Lalwani Joint MD, sun Logistics

29 | an industry in transition. powered by innovation.

List of Abbreviations

acaai aWB agL BHEL cEo cFs ciF cHa Dc EDi Epc Erp EU EXW FiFo FTWZ Fscs FsU gps icD inr

air cargo agents association of india air Way Bill allcargo global Logistics Bharat Heavy Electricals Limited chief Executive officer container Freight stations cost, insurance and Freight custom House agent Distribution centre Electronic Data interchange Engineering, procurement and construction Enterprise resource planning European Union Ex works First in, First out Free Trade Warehousing Zone Future supply chain solutions Freight status Update

iT iWT iWTT JnpT Kms MD MiaL Mis MW oEM ongc oTpc pTL sKU sMs TEU UpLiFT

information Technology inland Waterways Transportation inland Water Transit and Trade Jawaharlal nehru port Trust Kilometres Managing Director Mumbai international airport Limited Management information system Megawatt original Equipment Manufacturer oil and natural gas corporation ongc Tripura power company put-to-Light stock-keeping Unit short Message service Twenty-foot Equivalent Unit Universal platform for Logistics and integrated Freight Transport Vendor Managed inventory Warehouse Management system Third-party Logistics

VMi global positioning system inland container Depot indian rupee WMs 3pL

an industry in transition. powered by innovation. | 30

Acknowledgement

This research paper has been jointly developed by KpMg in india and the supply chain Leadership council. This paper has been authored by chandan choubey and gagan seksaria of KpMg in india on the basis of information provided by multiple representatives of the participating companies. in addition, this paper has relied on KpMgs understanding of and experience with the sector as well as on extensive discussions with leading stakeholders in the transportation and logistics sector in india. in addition, the supply chain Leadership council provided extensive support to the development of this paper and helped with reaching out to scores of companies in this sector. Besides, the supply chain Leadership council provided the ideal platform for the release of this paper in the form of 'india container Logistics and infrastructure summit 2011'.

KPMG Contacts Rajesh Jain Head of Markets T: +91 22 3090 2370 E: rcjain@kpmg.com Manish Saigal Executive Director and Head of Transportation and Logistics T: +91 22 3090 2410 E: msaigal@kpmg.com Gagan Seksaria Associate Director Transportation and Logistics T: +91 22 3090 2602 E: gagan@kpmg.com Chandan Choubey Senior Analyst Transportation and Logistics T: +91 124 612 9382 E: chandan1@kpmg.com www.kpmg.com/in

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. no one should act on such information without appropriate professional advice after a thorough examination of the particular situation. The views and opinions expressed herein as a part of the survey are those of the survey respondents and do not necessarily represent the views and opinions of KpMg in india. The information contained herein has been either provided by the respective companies to KpMg or has otherwise been collated from multiple industry sources and therefore KpMg is not responsible for the accuracy, relevance of any information container in this document. 2011 KpMg, an indian partnership and a member firm of the KpMg network of independent member firms affiliated with KpMg international cooperative (KpMg international), a swiss entity. all rights reserved. The KpMg name, logo and cutting through complexityare registered trademarks of KpMg international cooperative (KpMg international), a swiss entity. printed in india.