Вы находитесь на странице: 1из 31

2012

Logistics Industry In IN D IA
Air, sea, Road transportation and Warehousing.
The study include the opinions of leaders in logistics industry and focus on moderns driver of transportation and warehousing. Articles and view point taken from Cargotalk-2012. Additional information gather through reading cases and personal interview with leading entrepreneur and manager associated with logistic industry.

Manoj Tiwari, BSc(IT),MBA(Marketing). Email: Manojt214@gmail.com

FFFAI Convention

recognition and friendly policy

A long way to logistics parks


According to a recent study released by Amarthi Consulting and CII Institute of Logistics, by 2012 around 110 logistics parks, spread over approximately 3,500 acres, are expected to come up across India at an estimated cost of US$ 1 billion. The logistics sector has been growing at a rate of 8 to 10 per cent per annum since 2002 and was over $100 billion in 2009-10. Warehousing activities account for about 20 per cent of the total Indian logistics industry. This market segment is estimated to grow from US$ 20 billion in 2007-08 to about US$ 55 billion by 2010-11. Optimism runs high thanks to the growing economy of India and some recent initiative of the Government of India. The government has been giving impetus to the logistics sector by allowing 100 per cent FDI, eliminating CST, introducing VAT, improving multi- modal transportation through projects such as dedicated freight corridor, etc. Challenges, however, remain. Modern warehousing and logistics parks are still in their nascent stage in India. On the other hand, the perception about a logistics park in India has reduced to an extended version of warehousing. The logistics companies have a long way to go to fulfill the basic requirements for a world standard logistics park. They will have to present quality products so that the customers are encouraged to outsource logistics services to 3PLs. Add to this, the government has to take firm steps to facilitate the industry. Fast implementation of GST, rationalisation of tax regime, adoption of a liberal land acquisition policy, enhancement of multimodal connectivity, and above all, providing n logistics sector industry would be the prerequisite behind the success of logistics parks projects.

Opinion

COVER STORY
Warehousing and Logistics Parks: Indus- 22 try seeks recognition and friendly policy With the advent of foreign manufacturing, retail and 3PL companies a world standard warehousing with all modern amenities are on the rise. Add to this the ensuing GST regime has also necessitates organised and consolidated warehousing system under scientific logistics parks. An industry perspective on the requirements to utilise the opportunities

Airlines News
News in Brief

Emirates SkyCargo presents BEST PERFORMANCE AWARD to its India team

Duncan Watson (Extreme left), regional manager-commercial cargo, Middle East Asia & Africa, Emirates Airline; Ravishanker Mirle (4th from left), regional manager commercialcargo-W. Asia & Pacific Rim; Ram Menen (7th from left), divisional senior vice president, Emirates SkyCargo; Keki Patel (7th from right), cargo managerIndia & Nepal and RobertSiegel (second from right), regional manager commercial cargo-Europe & Americas along with the entire Emirates SkyCargo India Team after receiving the award.

Emirates SkyCargo recently awarded their India team, Emirates SkyCargo India, with the Best Performers Worldwide Award for the financial year 2010-11 amongst all their teams worldwide. The team was felicitated in a brief ceremony held in Al Bustan Rotana Hotel, Dubai. According to the company sources, the India team of Emirates SkyCargo was awarded for their outstanding work in aggressively promoting and educating the trade about e-freight in the country.

In 2010, they carried out successful e-freight shipments from all the major cities in India. They also started offering interline ca- pacity of 3 tonne from Lucknow. The team had also been putting continuous efforts to consolidate their agents network throughout the country. The sources also emphasised that they became best performers worldwide commercially and operationally overtaking stations like Hong Kong, Shanghai and Germany which have far more cargo opportunities as compared to India.

National News
Industry Events

INDIAN LOGISTICS 2011 EMPHASISES ON USES OF IT


--an annual loss of $ 45 billion to the logistics industry in India. During the conference a report was released by mjunction Edge the knowledge division of mjunction services on the logistics industry in India. According to the study, the total logistics market size in India represents around 6.2 per cent of the countrys total GDP But there are losses in. billions due to poor infrastructure and inept supply chain management solutions as reflected in more than 1,300,000 tonne of food grains rotting in storage, in the last decade, due to lack of modern warehouses. Adding to the wastage is 4-5 intermediaries in the supply chain and high distribution costs, to the extent of 40 per cent of price of some items. Amitabh Panda, group director, shipping and logistics operations, Tata Steel Group and MD Tata Steel Logistics and Shipping said, Today information technology plays a huge role across sectors and logistics management lies in the same purview. But Indian logistics industry is lagging behind in this aspect due to numerous issues and hence we have tried to address these concerns today through this platform with an objective to boost the growth of the logistics industry in India.

Amitabh Panda

The recently held Indian Logistics 2011 conference in New Delhi stressed upon the need of better infrastructure and use of information technology for a productive supply chain management. The one-day conference was organized by mjunction, which offers a wide range of eSelling, eSourcing, eFinance and knowledge services across diverse industry verticals. The conference highlighted the fact that logistics industry in India is recording a staggering revenue of about $82.10 billion with a growth of about 9.2 per cents in the last fiscal year (2010- 11). However, detrimental factors like inefficient infrastructure, high distribution costs, and various supply chain intermediaries are affecting--

Trade Associations
Convention

Aim is to go beyond CHA business


The Federation of Freight Forwarders Associations in India (FFFAI) is organising its 20th Biennial Annual Convention at a crucial time when the freight forwarding business in India is struggling for its survival.With a dwindling commission system, and the advent of MNCs to offer all logistics services under one roof, the traditional CHAs are in quandary. The Convention will be held from August 25-27, at Shiv Niwas Palace and Fateh Prakash Palace hotels in Udaipur.Raman Raj Sud, chairman, FFFAI speaks on importance of the Convention this year. By Ratan Kr Paul
to glocalisation, i.e. global corporations are forced to accept local thinking, culture and practices. Those who have been able to adapt and adopt are seeing success and would continue to flourish. FFFAI also emphasises on cooperation and collaboration among the Indian freight forwarders. They should learn different strategies; adopt different models

FFFAI Biennial Convention 2011

reight forwarders in India are passing through critical juncture, especially the Customs House Agents, who are mainly medium and small sized. The theme of the 20th ConventionCHA-Beyond Customs, Emergent Global Logistician, has rightly been chosen, so that our Customs House

An interesting thing to note, that all members associations have collectively come together to make this convention a grand success. FFFAI, in more ways than one, stands for and represents the unity in diversity ideology, which is India.

Raman Raj Sud

Agent members can be enlightened and get prepared for the future challenges. Now is the time for each one to consolidate, innovate and expand his or her horizon for individual as well as collective benefit, said Sud. According to Sud, FFFAI perceives that globalisation is fast changing of execution;

update and upgrade their skill setsabove all reinvent themselves to survive the turbulent uncontrolled dynamism. It is evident from the facts that there is a growing trend of outsourcing of complete logistics solutions among the customers.

They are now not satisfied with fragmented logistics solutions. The need for outsourcing or working with specialized service providers is ever increasing. The need for good, competent, resourceful, easily accessible, local service providers are increasing and

Trade Associations
Convention

becoming absolutely necessary. Ability to understand legal issues, interpret the same, realign work in tune with local as well as international operations are the qualities industry looks out for in these service providers, Sud pointed out.

The business sessions of the Convention will discuss the changing scenario and future role of CHAs and freight forwarders. Eminent speakers include Sumit Dutt Majumder, chairman, CBEC; Satish Kumar Goel, member-customs, CBEC; Alok Sinha, joint secretary, civil aviation; Anil Gupta, MD, Concor; Prof Raghu Ram from IIM-Ahmedabad (Keynote Speaker) and Raj Khalid, Port of Antwerp representative and several other dignitaries.

with the Italian trade association and was invited by it in September 2010 to explore business opportunity. Some 41 FFFAI members from across the country went to Italy for mutual benefits. The visit was sponsored by the Italian Trade Commission, included a half day conference and B2B meetings with freight forwarders in Genoa and Milan. The trip to Italy was followed by another business trip to Brussels and Port of Antwerp to know about the ports function and explore business opportunities. The trip was hosted by Antwerp Port Authority. The FFFAI chairman shared that during last two years the federation has tried to expand its network not only in the major port areas but also minor and small port and dry ports. It aims to bring more CHAs from these areas under its umbrella. Accordingly, FFFAI organized its executive committee meetings in places like Kakinada, Amritsar, Kandla, Mundra, Cochin, Nagpur, etc. FFFAIs executive committee meetings were followed by interactive meetings with local CHAs. This kind of meetings are required to understand the local issues and to make them aware of the activities and importance of FFFAI. This is an important way to strengthen our federation, said Ram Sud.

FFFAI is the largest non-governmental organisation in international transport with representations in international bodies such as FIATA, IFCBA and SAFFFA. It is the apex body of 24 Custom House Agents Associations in India who represents approximately 6500 members. The Federation has a 65 members executive committee. In addition, organizations that are directly or indirectly connected with freight forwarding, shipping and commerce are associated with FFFAI as allied members. Currently, FFFAI has approximately 400 allied members. FFFAI is recognised by the ministry of finance, ministry of commerce, ministry of shipping and ministry of civil aviation, and many more trade bodies like CII, FICCI, ASSOCHAM, FIEO, etc. Today FFFAI has its own institute called Indian Institute of Freight Forwarders, which imparts training on freight forwarding and logistics to promote professionalism and efficiency in the Indian logistics industry. The candidates are conferred with diploma in freight forwarding after successful completion of the course. FFFAI is accredited by FIATA. The main objective of FFFAI is to organise united action to project and promote the interests of the profession in all its aspects at the national level, and for that purpose to coordinate the activities of Customs House Agents Associations and their members. It collects and disseminates information to members on subjects of common interest. It takes part in conferences, to help members and acquaint the authorities with their common problems, to protect and improve the common benefits, to get redresses of legitimate grievances by all peaceful and constructional means and procedure to exercise beneficial supervision over the clearing trade with a view to maintain a high standard of integrity and public confidence. FFFAI emphasises on a code of ethics for the Customs House Agents and members of the federation.

The Convention is also expected to be addressed by Piero Lazzeri, president, Italian Federazione Nazionale Imprese di Spedizioni Internazionali (FEDESPEDI) to share global experience. It may be recalled that FFFAI has a fraternal relationship

Product Display
Gandhi Automations

Bolzoni Auramo Lift Tables

andhi Automations has introduced the wide range of Bolzoni Auramo lift tables, with their usual safety and reliability features to provide an effective solution to most lifting problems.

trapping during operation; safety check valve to stop the lift table lowering in the unlikely event of the hose break; protection against overloading; low voltage control box with up-down buttons and emergency stop; maintenance props(for safe maintenance operation) and removable lifting eyes to facilitate handling and lift table installation.

According to the company sources, the tables comply with the European safety of machinery standards EN 292, Machinery Directive 98/37/EC and safety requirements for lift tables EN 1570. All models include: Aluminium safety bar, stopping descent of the platform on contact with obstructions; safety clearance between scissors to prevent

The company sources also asserted that they have a wide range of tables and options available to meet different requirements. And, Due to their wide experience the company is able to provide customized solutions. The company has also launched Type 1-E Ergo-lift single scissor for evenly

distributed load. It is designed as a work station to provide improved ergonomic conditions to ensure the health, safety and comfort of the operator together with improved productivity.

Cover Story
View Point

Warehousing and Logistics Parks

Industry seeks recognition and friendly policy


With the advent of foreign manufacturing, retail and 3PL companies a world standard warehousing with all modern amenities are on the rise. Add to this the ensuing GST regime has also necessitates organized and consolidated warehousing system under scientific logistics parks. An industry perspective on the requirements to utilize the opportunities.

A
Asutosh Gajjar

Ratan Kr Paul

ccording to the survey report, India has a total warehousing space of approx 1,800 million sq ft, of which only 8 percent

(144 million sqft) is in the organized sector. The current paucity of modern warehouses is resulting in the colossal waste of farm produce, reckoned between 20- 40 per cent of the harvest, as well as

In his opinion, among other logistics components, warehousing is very vital for the country from a real estate investment perspective as well. Sanjay Khanna, CEO, Celebi, India, added that the warehousing business contributes a major portion of the logistics industry in India. This is a fast growing industry and plays a critical role in a developing economy like India. Indian warehousing sector is expected to grow at a rate of 35-40 per cent every year. And, the growth potential of this sector is huge.

Sanjay Khanna

The Indian economy in recent years has seen a huge surge in the services sector; however it still largely remains a manufacturing driven economy. Warehousing plays a crucial role as storing and handling of commodities are critical aspects of the supply chain business, Khanna said. He perceives that the market today is highly competitive and the time gap between production and consumption of products is of paramount importance. Warehousing plays a crucial role in maintaining the demand supply gaps and keeps check on the time required for a product to reach the consumer. Also, demand for particular products is low during a certain season therefore proper storage of products/good becomes very critical.

constraint on the growth of futures trading in farm commodities. This shortage shows that there is huge potential for a large amount of quality warehousing space. With the rapid growth of organized retail and manufacturing sectors, the need for warehousing is increasing. Said Asutosh Gajjar, project head, Shree Rajlaxmi Logistics Park, The back- end operation in the form of an efficient logistics support is imperative for the growth of retail and manufacturing sectors. Unfortunately, logistics operations in the country are largely fragmented and unorganized
Rav i Reddy

Ajay Mittal

Nihar Parida

The growth in international trade coupled with the rise in containerization levels has led to high demand for warehouses. In order to minimise the losses due to storage operations it is essential to have a warehousing system in place for effective preservation, Khanna emphasised. According to Ravi Reddy, MD, Sri City, today, the need for large scale warehousing and logistics is fast catching up as this fragmented and largely unorganised industry dominated by small players with small capacities. It sees over 110 logistics parks being set up across the country. He also maintained that the warehousing industry is expected to grow at the rate of 35-40 per cent every year with close to 45 million sq ft warehousing space expected to be developed in the next five years. The W arehousing activities account for about 20 per cent of the total Indian logistics industry and offer tremendous growth potential. At present, the total share of organised warehousing space is less than 8 per cent of the total warehousing space in India, he said.

Ajay Mittal, chairman & managing director, Arshiya International maintained that companies look for optimized warehouse locations that are close to the suppliers as well as distributors. Warehouses play a key role in inventory management, product safety, last mile value addition etc, and are a major cost component for the entire supply chain. Technologically enabled state-of-the- art ware houses with proper support infrastructure and trained manpower can go a long way in maintaining product sanctity, reducing cost and improving overall efficiency. Real-time product visibility enabled with technology helps to control inventory thus reducing working capital. Proper handling and security help reduce pilferage. Efficient material handling helps to increase turnaround time. The ways warehouses are managed have impact from production to distribution, he explained.

. Mittal also underlined the huge impact of the proposed Goods and Services Tax (GST) on warehousing industry. GST will soon be implemented and will take away all the inefficiencies arising out of incumbent complex tax structure as well as inter- state taxes. This will enable companies to have large mother warehouses feeding the distributors in the region, rather than having to maintain warehousing facilities in different states, he underlined. He perceived that companies will then be able to invest in better warehousing infrastructure and technology Nihar Parida, COO, logistics & marketing, Uniworld Logistics emphasized that logistics is an integral part of any economy. Within logistics warehousing becomes a basic necessity. The way Indian economy is growing, the logistics industry in the country is not able to keep up with the growth. There is a huge gap between supply and demand when it comes to infrastructure. Look at Delhi which is supposed to be a huge market as regards to any commodity. But unfortunately

Cover Story
View Point

we do not have any legal warehouses within the state. The infrastructure available today is not conducive for warehousing. I would rather call them godowns than warehouses, he said. The demand for proper warehouses with the influx of multinational companies or manufacturers is huge. These companies (especially Europeans and Japanese) want to see warehouses that they have back home. Good to see lot of PE firms more interested in putting their money in warehouse infrastructure, he pointed out.
Ram Tiwari

Most of the Indian and multinational logistics and warehousing companies are understanding the demand of modern warehouses and will be able to invest in warehouse, if proper support and clear guide lines are in place. This decade belongs to SCMs (supply chain management) contribution to the overall growth of the economy. Significantly, Indian government is promoting FDI investment by signing agreements with like minded economies like Japan, Malaysia, Indonesia etc. This promotion definitely will bring lots of opportunities for traders and manufactures to utilise 3PL/ 4PL services to the fullest extent in order to achieve economies of scale, added Mukesh Rehal, general manager India operations, Yusen Air & Sea Service (India), 3 PL warehousing, FTWZ, and bonded warehousing are going to be used more in future with the support of the government. Not only MNCs but local payers have already concentrated their efforts for diversifying their focus on vast market like India. Add to this, logistics Park,

Ram Tiwari, director marketing, Shine Logistics was of the opinion that warehousing and distribution is very important part of any country economy growth. In developed countries warehousing and distribution is known and recognised as industry. Unfortunately, in India it has not been recognised as an industry or respectable business line. The Government of India never put clear guidelines for setting up the warehouses. He however added, Since there are no proper warehouse facilities available in India, it is a good opportunity to explore warehousing business in this country.

Mukesh Rehal

though it is at its nascent stage, would definitely be the dividing line for future of logistics industry. Jugal Kishore Pandey, head (north)supply chain, Kaveri Cargo, pointed out that the growth in large domestic consumption coupled with the rise in containerised transportation has led to an increase in demand for high quality and professionally managed warehouses.

parks that have come up, are basically constructed and promoted as real-estate ventures. Also many logistics parks promoters do not provide comprehensive suit of services such as IT connectivity, electricity, water, tightly managed security processes, he highlighted. According to Pandey, the concept of logistics parks will largely be limited to big market cities like Delhi, Mumbai etc. In these cities too, large companies having their own critical mass are going for built-to-suit facilities.

Prevailing Trends
According to Parida, the current trend in warehousing is consolidation and multi user facilities with modern amenities. With the advent of GST in the near future everyone is looking at consolidating their warehouses may be up to 5 locations in India. With the pressure of reducing cost in warehousing, people have realised that sharing common equipment and workers is one area that will reduce the cost. Moreover in a phase of Progressive Supply Chain, where the demand fluctuation is so high everyone is looking at flexi pricing where they want to pay what they have consumed. People are moving away from fixed space idea. With the private equity firms wanting to spend on logistics infrastructure it makes sense for them to acquire larger piece of land and build huge parks where they can give it to more than one player to manage their warehouses. Reddy added some more trends that are visible in the warehousing and logistics parks industry. Today, warehouses are increasingly addressing specific requirements for its customers such as offering bare storage, storage with crane facilities, food storage, storage with multi-level stacking and open storage, he highlighted. He argued that the entry of global third party logistics players into the country is changing the face of the logistics industry as it is fast emerging as a strategic function that involves end-to-end solutions that improves efficiencies out of a combination of transportation and storage services and logistics. It is expected that the creation of the 100 odd Logistics parks (250 500 acres) with all modern facilities especially in port cities like Mumbai and Chennai will lead to cost reductions, he said. One of the crucial elements determining the fate of logistics industry in the country is technology. Said Mittal, warehousing technology and infrastructure has moved to very advanced stage in developed economies across the world with widespread use of RFIDs, WMS, ASRS, high end technologies and IT infrastructure. He observed that India is still lagging behind in this regard and looks at warehousing as a cost center, ignoring the value it can create in the supply chain

This growth/demand for good better managed warehousing services comes along with a high demand for best practices and value added services that are fast developing across warehousing service providers in the country. Logistics and warehouse industry of India is soon expected to grow at a CAGR of 12-13 per cent for next 3 to 5 years. At present, the estimated value of the entire domestic logistics sector is at around $30 billion and it is expected to grow to $54 billion in 3 years time, he said. However we are yet to see large logistics parks initiatives in India. Whatever logistics

In other cities, depending upon the business need various companies are opting for tying up with partners who creates custom-built warehouses that are tailor made for specific requirement. A lot depends on how the GST implementation progresses to determine the future growth of Logistics Parks, he viewed. Taking cue from Pandey, N i m i s h D e s a i , director sales, Infor India, elucidated that the growth in international trade coupled with the rise in containerisation levels has led to high demand for warehouses thereby creating a great opportunity for the private sector. The market, which is valued at INR 20 bn, is expected to grow due to the demand generated especially by importers and exporters for specialised services.

According to Desai, the Warehousing Management System (W MS) applies right across manufacturing, distribution, logistics and retail the specifics of implementation will change from industry to industry but they can all benefit.
Jugal Kishore Pandey

The leading research and advisory firm for industry and infrastructure, ARC Advisory Group ranks the logistics vertical as the biggest area of W MS growth (by CAGR) between 2009 and 2014, followed by food and beverage manufacture.

Desai also maintained that government initiatives such as aiming to move towards GST tax regime, private investments in logistics parks, road infrastructure and freight corridors are some of the opportunities that have contributed to the growth of the logistics and warehousing sector.
Nimish Desai

Cover Story
View Point

Companies are maintaining small warehouses in different states due to interstate taxes and non-uniform tax structure, thus increasing the warehousing cost as well as maintaining sub-standard warehousing facilities. Moreover due to the unorganised and fragmented nature of the logistics and supply chain sector, companies are dealing with multiple service providers thus there is little integration of warehousing function with the rest of the supply chain. Desai pointed out that there is anincreased demand for labor management features from many companies. Labor cost is single most controllable operational in a warehouse and it forms approximately 50 per cent of the overall cost of operations. In addition, integration of W MS with Transportation Management System is also becoming very popular. It ensures seamless, continuous and efficient business processes in warehouse distribution. The rapid growth in 3PL providers is forcing W MS vendors to consider developing multi-tenant architectures. Service Oriented Architecture (SOA) has also become an important trend even though the concept behind it have been around for a decade. SOA is an architectural style that enables a collection of independent services to communicate with each other. Gajjar, on the other hand, put emphasis on the role of private player in establishing proper logistics parks. W hile developing logistics parks developer should consider proper complex / building layout plan and road designing considering inflow and outflow of vehicle movement. He maintained that building design should be in cubic feet not in sq ft; it should consider whether condition and proper building drainage plan; water harvesting; green plantations; solar lights provision, Fire hydrant / sprinkler system for safety; heavy duty floor; parking; security; IT networking; doctor room; conference hall; dormitory; shopping; entertainment, etc. If the developer consider all above points while developing logistics park, the growth of the sector would be phenomenal, he felt. Reddys suggestions for this industry to grow after the introduction of GST, are also prompted by larger perspective. Move out of large cities typically into areas, which is 90 minute drive with good road connectivity; reduce the loading and unloading time of goods to less than one hour and create adequate parking infrastructure for trucks enabling them to do inbound and outbound goods transport, he said.

Suggestions
Mr. Tiwari appealed to the Government of India to recognise warehousing as an industry. He expects all kinds of support including tax benefits from the authorities concerned to establish warehouses and logistics parks. The first and foremost is government recognition for logistics as an industry. Government should announce some tax benefit for these developers in terms of tax or capex tax waiver so that it can be transferred to end users. More and more states should come out with schemes to open logistic parks, endorsed Parida.

According to him, if the industry players give their demand projections for various types of warehouses, it would enable developers to choose and create required capacity resulting in better planning and reduction in costs of 10 to 15 per cent. As India encourages liberalized economic policies, the logistics industry needs to have a simple tax structure for having inter-state and intrastate transaction, said Rehal. He urged for early implementation of GST to reduce hassles that deterring the growth of logistics industry in India.

Cover Story
Exclusive Interview

India to witness surge in Logistics Parks


WDRA plays the advocacy role
The manufacturing and agriculture sectors are growing fast in the country.There is a huge growth opportunity for warehousing business in the country. A large number of SEZs being developed in the country have necessitated the development of logistic parks, said Dinesh Rai, chairman,WDRA

ai highlighted some landmark initiatives. He pointed out that Indian Railway is constructing dedicated eastern and western freight corridors in the country and is in the process of discussion with the state governments for finalising the locations of logistic parks along the dedicated corridors. Besides, it has also plan to set up logistic parks in big metro cities where Railway is having its unused land through private sector participation. The railway is planning to offer land to private sector for setting up facilities like warehouses, cold storage, banks, repair facilities for trucks, godowns, custom facilities and multi-modal transport system. The basic criteria for such parks is that they should be near NationalHighways and in metros. These parks has an objective of catering to the growing demand of commercial activities in the cities. The Central Warehousing Corporation (CWC), a Government of India PSU is already operating rail side warehouses in the country.

and provide integrated services at one location. They have also good future with the growth of industrial and agriculture production, he added.

Dinesh Rai

farmers and traders to seek loans from banks against NWRs to avoid distress sale of agricultural produce. According to Rai, 352 warehouses, both from public sector and private sector have applied for registration with the WDRA. Till date, 120 warehouses have been registered with the W DRA. These warehouses are issuing negotiable warehouse receipts (NW Rs) to farmers against the deposit of their produce in registered warehouses and are availing the benefits of NWRs. Rai observed that the warehousing industry has bright future in India and now it is growing fast since number of incentives and business guarantee is being given by government organisations like FCI. The logistic parks provide integrated facilities for handling, warehousing, transportation, packing etc. They have their own importance

He, however, maintained that the logistic parks should have state-of-the-art facilities for handling, storage packaging and transportation facilities. They should have mechanised modern equipment and machinery for handling, warehousing and packaging of various goods. Rai shared that the industry-friendly policies are conceptualised and formulated by various Ministries of the Government of India dealing with warehousing Industry and financing thereof, while WDRA plays a vital advocacy role. WDRA has taken up issues such as classification of warehousing as a full-fledged infrastructure status, extension of tax incentives for the entire sector which now are available only for the warehouses at the ports. Extension of RIDF funds for the private sector and loan facility at concessional rate of interest to warehousing sector are some of the other issues undertaken by the WDRA. The WDRA is keen that warehousing should be accorded the status of full fledged infrastructure and all tax benefits and financial incentives available to infrastructure sector should be made available to warehousing sector. Government should also provide cheaper land for warehousing, he concluded.

According to Rai, with the enactment of the Warehousing (Development and Regulation) Act, 2007 and since the establishment of the Warehousing Development and Regulatory Authority (W DRA), the negotiable warehouse receipt system has been introduced first time in the country. The Negotiable W arehouse Receipts (NWRs) issued by the warehouses registered under this Act would help

Express Cargo
New launch

DHL and Blue Dart


Introduce Smart Truck technology
DHL and Blue Dart, part of the DHL Group, have launched Smart Truck technology in Bengaluru on pilot project basis, with an objective to improve service quality, cut costs, reduce time and CO2 emission.
CT Bureau

mart Truck technology of DHL Is the first deployment outside Germany. Created by DHL Solutions and Innovations (DSI), the DHL Smart Truck is an intelligent pick-up and delivery vehicle that combines a number of innovative technologies, including a route planner. Launched in Germany in 2010, DHL Smart Truck reduced number of miles traveled by 15 per cent and length of average route by 8 per cent, during its pilot stage, reducing both fuel consumption and CO2 emission.

for shipments, and use real-time GPS to avoid jams and optimise routings, thereby enabling flexibility and last minute pickups. This allows the DHL Smart Truck to spend more time on the road to perform their pick-up and delivery services. The Smart Truck technology also enables a more efficient sorting process by synchronising the data and physical flow, while real-time communications and visibility of services avoid missed pickups and delayed deliveries. Together, this provides better customer service and a more cost-effective operation, as a result of optimum use of vehicles with less wasted miles. Adapting Smart Truck technology to work in a city like Bengaluru, will have far reaching positive benefits for our clients, the citys economy, the environment, and in the long-term for all emerging markets, said Anil Khanna, managing director, Blue Dart Express. The Blue Dart Smart Truck

pilot, as it is known in Bengaluru, will cover all Asia-Pacific inbound shipments on five routes in the city, with the system sorting deliveries to reduce errors and increase visibility. This gives customers an accurate delivery time. To successfully launch the pilot here, we are planning to introduce the technology across the nation, where there are problems related to pollution and traffic congestion, added Mr. Khanna.

For the Indian market, Smart Truck technology is designed to provide solutions to urban logistic challenges, such as traffic restrictions, density and clogging, while ensuring environmental protection and fulfilling customer need for timely delivery. According to the DHL and Blue Dart sources, these intelligent pick-up and delivery vehicles compute delivery deadlines to calculate the ideal sequence

Present on the occasion, Jerry Hsu, CEO, DHL Express Asia Pacific, underlined DHLs GoGreen initiatives, which prompted the launch of innovative solutions to reduce carbon footprint and provide better services to customers. In fast-growing, emerging markets, such as India, those needs are critical and will grow. More so as the world continues to urbanise and megacities proliferate. To ease congestion, improve services and cut pollution, we need solutions that will make a positive impact on the environment, he maintained.

Guest Column

Warehouse Management

A quest for the effective way

As markets globalise, change, accelerate and customer expectations rise to new levels, the walls of the warehouse are coming down. Now, companies must manage extended supply chains with increased precision. They must gain clear visibility into their warehouse inventories.

Souma Das

nfortunately, few companies are fully meeting these objectives. Research on warehouse and distribution center productivity suggests that managers are under severe pressure to reduce inventory and logistics costs, to remain competitive, more effectively manage labour costs and challenges,

management; paperless receiving; realtime put-away; order picking with mobile devices; and cycle counting. As a result, top performers have enhanced customer satisfaction and contained costs by increasing accuracy rates, shipping order rates, and perfect order rates to more than 99 per cent. They have decreased labour costs year-over-year.

required and labour available, inefficient direction of workers, and a lack of finer-level visibility into shipments. Supply chain inefficiency is also characterized by the lack of visibility into the extended supply chain, beyond the four walls of the warehouse.

Order Inaccuracy:
As mass retailers and other large customers increase their business leverage, they push manufacturers and distributors to meet increasingly demanding specifications, requirements, and mandates. Indeed, the perfect order is now seen as one of the best barometers of customer service. Unfortunately, warehouses and distribution centers often prove to be the weak link in the global supply chain. W hen they lack visibility into inventories and automated capabilities, they are often unable to keep up with these increasing demands.

Barriers:
Customer demands are increasing. They expect perfect order performance. They expect the right product at the right time and the right price. The pressure is relentless. In order to achieve high performance in warehouse management, the industry must attain top levels in todays key metrics. On-time shipments; order picking accuracy; annual workforce turnover; fill rates line-item level; fill rates order level, inventory capacity, dock-to-stock cycle time and distribution costs as a percentage of sales.
Souma Das

support business growth, respond better to demand/supply fluctuations, meet customer demands for faster and more time definite way. To address these challenges, bestin-class companies have invested In advanced warehouse management systems (W MSs) that automate and extend their capabilities. Their new strengths include warehousing/bin-level location

Warehouse and supply chain managers, challenged to improve performance on these measurements, confront three key challenges:

Technology Infrastructure Obsolescence:


In many companies, technology platforms are aging and difficult to maintain. These enterprises continue writing custom codes to meet new demands, driving up total cost of ownership in the process. As companies begin to upgrade their technology platforms or create strategies for better integration of disparate platforms, the odds are that their

Supply Chain Inefficiency:


Vi Supply chain perform ance is sub- optim al when there is too much inventory being carried, too many manual operations, frequent imbalances between work

Guest Column
Expert Views

warehouse management applications will need to be upgraded as well. To address such challenges, best-inclass companies have invested in advanced W MSs. These organisations have realized that such investments are critical if they are to gain visibility into their warehouse inventories and systematically automate key functions.

yard management capabilities help firms avoid the time and expense of put-away. Meanwhile, automation reduces the costs of clerical activities and administration labour.

forecasting, slotting, and radio-frequency identification (RFID) functionality? In some cases, the existing software may be adequate. The issue may simply be that certain features or modules are underused. If the existing capabilities are adequate, then exploit them. If not, then the next question iscan the software provider deliver the features and capabilities the company seeks.

Greater responsiveness
As customer expectations rise, advanced W MS enables firms to ensure that they are delivering perfect order performance while responding to growing demands and specifications. Meanwhile, firms gain better visibility, tracking, and traceability capabilities to support the requirements of various regulatory bodies. Such capabilities are increasingly important in terms of overall risk management and brand protection.

Advanced WMS:
While warehouse management applications of the past generally improved the efficiency of operations within the four walls of a warehouse, advanced WMSs take organisational capabilities to a new level. This new generation of warehouse management applications offers added functionality that positions companies and their supply chain partners to be more operationally efficient and responsive to customer demand. It helps companies maximise product placement strategies, prioritise tasks, implement fair productivity standards, and increase logistics efficiency. Among the core characteristics of this new breed of W MS applications are as follows: Inventory management, work and task management, labour management, forecasting, cross-docking, slotting, yard management, etc.

Key questions: upgrade versus rip and replace


If a company is now contemplating an investment in advanced W MS, it may be facing a critical decision. It may have to choose whether to upgrade its existing WMS system or rip and replace it to obtain desired capabilities. Here are the top questions to consider before making a decision:

While there is an argument for ripping out the existing solution if a particular technology is obsolete and will not be supported going forward, the reality is that most of the time rip and replace is a more complex and risky endeavour than it may seem at first. First, it turns existing systems into stranded assets. Prior investments in them must be written off as one takes a new direction. Second, there is the challenge of implementing a new system with new requirements and new interfaces. High learning curves often can lead to project failure or underutilisation. Finally, when companies must revamp their infrastructure and invest in a whole new approach, they run the risk of reduced (or negative) ROI and long payback periods.

Leveraging such capabilities, companies can become best-in-class performers in distribution, warehouse, and supply chain operations. The potential benefits delivered by advanced W MS are compelling.

What industry best practices are critical to profitable growth? To determine whether to make an investment in W MS, it is first Advanced solutions enable companies necessary to recognise what performance to increase pick accuracy rates, shipping and capability gaps exist that might order rates, and perfect order rates to more undermine the companys ability to than 99 per cent, eclipsing average and effectively compete. Does it need, for laggard companies that lack relevant W MS instance, full visibility into warehouse capabilities and perform at far lower rates. inventories? Does it need upstream and downstream visibility going beyond the four walls of the warehouse? Does it need new (An Article taken from-labour management capabilities? Souma Das is VP sales and managing director, Infor India. The company makes business software For additional information, visit www.infor.com) published in Cargotalk 2012 If the company identifies these gaps, it is necessary to then askDoes the existing W MS system have the features In this case goods are held for less time necessary to address the companys and move faster through warehouses and performance gaps? Does it, for instance, distribution centers. As a result, carrying costs provide such capabilities as labor are reduced. Cross docking and

Given th e gro wi ng complexity of todays markets, the last thing managers want to introduce to their companies is more complexity and confusion. Most of the time, it is easier to look for incremental upgrades that can deliver new processes and capabilities. This approach produces clear business value and provides a superior path to performance if the companys existing solution provider can deliver the required capabilities for best-in-class results. Unmistakably, companies must now begin to contemplate these key questions if they hope to remain competitive in todays markets. They should investigate their options. If incremental upgrades can put them on the path to better warehousing and distribution performance, then stronger supply chains may be closer than they think.

Reduced inventory and logistics costs

54 CARGOTALK SEPTEMBER 2011

Study & Survey


Market Trends

from Europe to offset losses

Indian companies increases import


A recent survey by FICCI on Current Economic Scenario in Europe and its Impact on Indian Industry apprehends an adverse effect on Indias business prospect. As the industry has seen a downturn, they have ventured out for exploring new markets.

CT Bureau

t is pertinent to mention that the bilateral trade figures that stand at over USD 67 billion, makes Europe Indias largest and most important trading partner globally. The current economic situation, though resulting in number of

EU clearly represents a large consumer base (close to 500 million potential consumers) if the entire bloc of 27 countries is considered to be a single market. Its economic, trade and investment policies generally welcome foreign investment traditionally viewing it as a means to

the current economic turmoil on Indian companies with reference to their business interests and investments made there.

Survey Findings
On the current economic crisis in Greece, Spain, Ireland, Portugal and now in Italy, there has been absolute unanimity in the surveyed companies that the ongoing crisis is the manifestation of larger issues and economic ills plaguing the European economies today. 53 per cent of the companies have said that the ongoing crisis has already resulted in their business prospect in the region adversely impacted.

The concern point is that over 75 per cent of the surveyed companies have quoted a loss of 10-15 per cent in terms of business generation from the European region. Over 30 per cent of the Indian companies surveyed have already begun to look beyond Europe. They have begun to gradually look for greener pastures in African countries, Middle East, South Asia and even in North America.

procedural and regulatory obstacles for Indian companies to expand and or do business in the continent, still provides for needed returns on the investments made and business relationships forged in the years to come.

promote employment and capital formation. Against the back drop of the current economic slowdown, FICCI conducted a survey among Indian companies that are doing business and or have invested in Europe in the past to assess the impact of

To maximize their benefits and to alleviate their business losses in terms of reduced demands in European markets, Indian manufacturers are aggressively pursuing new business plans. This includes increased imports of high-end machinery and technology from Europe due to highly competitive prices being offered by European exporters.

Types of Warehousing (Distribution Center): 1. 2. 3. 4. 5. 6. 7. 8. Dry DC Wet DC (Cold storage) Staple DC Fresh food DC Consumer durable DC (FMCG products) High Value DC Staple DC Lifestyle DC

Distribution center planning and parameter 1. 2. 3. 4. 5. 6. 7. Infrastructure Layout Staffing Equipment IT M IS Miscellaneous

Location and Infrastructure of Distribution Center 1. 2. 3. 4. 5. 6. Nearness to City Octroi Weighing bridge/ Petrol Pump Power/ Electricity Generator Set up Communication Landline/ Mobile/ VSAT Water (Wet DC).

Layout Planning for Warehouse (DC) 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Pallets V/s Bins Grid Layout Flooring/Height/Lights/Ventilation/Docks Other Planning- Office/security/ Staff Welfare. Food V/s Non-food Out bound/ Inbound Staging areas Area for Flow through/ Cross docking Others areas Scrap/Damage/Expiry/Batch management. Security DEO/Checker/ Helper cabin

Equipment and IT in Warehousing (DC) 1. 2. 3. 4. 5. 6. Pickup Trolly Fork Lifts Reach Trucks Battery Charging section RFID- Chips/RF- Guns/ Wi-Fi for RFID Bar coding

DNA Report.

--------------------- Article Publish in DNA news Paper.

BusinessToday Report.

Information Source:
Cargotalk-2012 MMS Academic presentation for Distribution and Supply Chain. --by Prof. Sugam Chaubal (Consultant and Manager Reliance Fresh) Leading News paper: DNA Money and Business Today.

Manoj S. Tiwari. Email: Manojt214@gmail.com -----------------------------------------------------------------------------------------------------------------------