Supply Chain Management Professional - June 2016 Issue

DEMAND PLANNING Demand Planning & Forecasting: The three essential pillars - Dr. Rakesh Singh

08

GURU SPEAK Campaign Supply Chain – How to deliv-er-in- full-on- time - Dr. John Gattorna

21

HUMAN RESOURCESThe business sense behind health and safetyDarryl Judd

40

June 2016 | Volume 2- No.2 | Rs.200

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Time to Define Our Business around Technology

T h e w o r l d i s p o i s e d o n t h e t h r e s h o l d o f a n e w o r d e r – o n e d r i v e n b y t e c h n o l o g y . A c r o s s t h e W e s t e r n w o r l d , t e c h n o l o g y i s c h an g i n g t h e w a y i n d u s t r y o p e r a t e s . M an an d m ac h i n e ar e t o d a y ab l e t o o p e r a t e side by side, without impacting the safety of humans. apid strides in t e c h n o l o g y d e v e l o p m e n t h as r e d u c e d t h e p r i c e p o i n t s i n t e c h n o l o g y – FID devices now can be discarded a er one use. Mobile devices are ge ng smarter and better. Firms can use oogle maps to track their shipments – like we track the Uber or Ola cab as it comes to the pickup point. And that too free There are two distinct drivers f o r t e c h n o l o g y – o n e i s t h e h ar d w ar e – t h e p i e c e s o f e q u i p m e n t t h a t when embedded in all our shipments gives us instant visibility. Once devices start talking to each other, we can move on to the current wonder – driverless vehicles

The second driver is so ware – when billions of devices start streaming live data, we need the ability to analyze and make sense of this data deluge. Technology advances like Big Data and analytics fit the bill nicely. In between these two paradigms, we have the social media phenomenon, which has the potential to change the way we s e n s e d e m an d o f a p r o d u c t . A l l p u t , t e c h n o l o g y i s a g am e c h an g e r .

The logistics Industry, which has been a laggard in technology adoption, now, has a number of options – from shared pla orms to third party applications on a pay per use model. The bottom line – firms have to relook at their technology strategy. In my opinion, it time we start defining our business around technology. ot technology around the business. The time to digitize is now.

We bring you a collection of views on technology in supply chains in this issue. We hope you find it interesting.

And in the next issue, catch all the action at the second Demand Planning and Forecasting Forum and awards – the only pla orm for demand planning and forecasting professionals in India.

Happy eading

GIRISH V SE d i t o rg i r i s h . v s @ s c m p . i n

editorial

The structural imbalances that face us cannot be resolved with short term measures. Hope the government stays true to the course.

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June 2016 | Volume 2|No. 2

SCM News06 Comments on Global Supply Chain News

Demand Planning 08 The three essential pillars

Lead story10 Technology Convergence to Rede�ne Supply Chains

Guru Speak21 Campaign Supply Chains How to deliver-in-full-on-time to project sites

Spotlight:25 Supplier Relationship Management- making suppliers e�cient

Feature28 Warehouse Optimization – A Competitive Edge in Supply Chain

Interface30 Becoming the World’s Shipping Partner

Academic Advocacy: 32 Trends in SCM & Logistics: A Focus on Risk

Humanitarian Logistics: 34 Feeding the next Gen – A labor of love

Human Resources: 40 The Business Sense Behind Health and Safety

LSP Focus – 42 Re-usable Assest pooling

Event: 44 India Logistics Expo – 2016

SCPC46 Customer Service in Modern Supply Chain

21

10

32

24

42

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SCM News

6 Supply Chain Management Professional June 2016

Rocket Scientists to Make Money from LogisticsThe wolves of Wall Street are sharpening their claws for a new way to make money – using the global shipping data on global commodity trade. A bunch of billionaires will use technology to track ships as they ply the seas, monitoring where they dock and what they carry. Using this data, they will trade commodity prices among other asset classes. A new company – US based CargoMetrics is planning to integrate this data with satellite data on cropping patterns to estimate crop yield. This will help them track prices and make money! Apparently, everything is fair when it comes to making money.

A Long Term Threat to Make in IndiaFor years, corporate strategy moved manufacturing to low cost countries like China. But Industry 4.0 is changing that trend. Adidas – the German Shoe manufacturer is planning to shift manufacturing back to Germany – into a highly robotized production facility. Two factors are pushing this trend – rising wages in China and advances in robotics. The factory is expected to make a pair of shoes in five hours, as compared to the weeks it takes in China. Moving production closer to markets will reduce the response time of the supply chain to changes in customer tastes and reduce time to market. BCG estimates that by 2025, robotics will boost productivity by 30 percent and reduce wages by 18 percent. If this trend persists, our dream of make in India will revert to make for India!

MIT CTL Research – Simple but EffectiveEvery year, researchers from MIT-CTL engage with industry on a series of research initiatives to improve supply chain function. One set of researchers have come up with a simple but efficient solution to improve picker’s efficiency in a warehouse, thereby reducing costs. The researchers studied a retailer with relatively slow moving products. The study concluded that in a scenario where the factory considers both DC and store inventory, by rounding off the picks to the next higher even number, retailers would be able to reduce picks by 11 to 13 percent and the in-store inventory would rise by 2.8 percent. The research concludes “It is highly applicable to retailers who have been accustomed to picking exact pieces, offering them the opportunity to implement a “picking quantity multiple” that generates great savings with little negative repercussions.”

The Not so sexy Application of DronesThe idea of a drone delivering the product you ordered from Amazon is a compelling one. But it ignores the challenges of flying drones in a crowded urban landscape – security risk and cost of insurance (cover from plausible accidents) are major hindrances. However, Walmart – the second largest retailer is using drones for a very different and not so sexy purpose – inventory management. Walmart is testing out drones in its warehouses to take inventory. Drones flying up and down the aisles take up to 30 images per second. These images help develop an accurate inventory count. It is speculated that a drone can do what takes a month by humans crawling up and down the aisles in a day. Mr. Shekar Natarajan, Vice President of last mile and emerging science, Walmart believes that drones could improve supply chain efficiency. Walmart is looking to drones in reducing their supply chain costs. Not so sexy application after all- just inventory taking!

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Demand Planning


Demand planning and forecasting is about people, processes, and technology. The three broader aspect of demand planning today are finding the right model, understanding the performance of the forecast and managing the demand planning and forecasting processes. Many developments on technology front like emergence of data sciences and predictive analytics are playing an important role in shaping the practice of forecasting today. In this article, I intend to briefly discuss the art and science of demand planning.

The first pressing question is how does one choose a forecasting method? Most often firms choose a single

forecasting technique as one size fit all solution for all products. They are on lookout for “the forecasting technique that will predict the future without much error.” The most commonly used method is time series method. When time series method is not able to predict a landscape which is dynamic today, we move to judgmental method. The most dynamically used judgmental model is “sales force composite”. This is closer to the concept of predictive analytics based on last mile demand assessment. The use of causal method is very limited to a few organizations.

In a world where demand is dynamic, using a single method of forecasting

Organizations are driven by numbers – with each division or function generating its own set of numbers. The numbers start with the demand forecasting function. The result is confusion and chaos. Top management spends considerable time and effort to reconcile these numbers. The need of the hour is to develop a demand planning process which aligns consumer demand and organizational capabilities. Dr. Rakesh Singh writes about the three basic pillars for an aligned demand planning function.

Dr. Rakesh Singh, Chairman, Institute of Supply Chain Management & Managing Editor SCMPro

Demand Planning & Forecasting: The three essential pillars

Demand Planning

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Demand Planning

9Supply Chain Management Professional June 2016

can be dangerous. The uncertainty emerging due to industry competition and its impact on organizations to become more agile and improve service levels has made task of forecasting even more difficult. There is a need to understand segmentation based forecasting as multiple supply chain resides in the same business. Practitioner needs to realize that single forecasting method may not work in such a fast changing landscape. I have been oft repeating this in my speaking assignments at various forums. Sunil’s chopra strategic fit analysis and framework is needed to solve much of the problems that confronts demand-planning analyst today. Here data science can provide a good clue to demand planner about multiple supply chains and their characteristics. Using data science demand planners can understand the segment, which shows static demand and hence can comfortably use peak to average time series techniques like Holt and Winter Model. Use of big data and causal methods may help identify many macro and micro factors important in explaining the causal effect. Using the coefficient of determination and variable coefficient one can easily predict a lot of implied uncertainty and decide on supply chain strategy. Yes where predictability is not possible firms need to build their

information channel and their responsive capabilities to react in the shortest possible time. Most firms have failed to incorporate this into their supply chain.

The second issue that is important is to measure the forecast performance. The performance of the forecast is important mainly because the buy in of the forecasting process in an organization becomes easier and so does supply chain integration. The goal of any forecasting system should be to be as accurate as possible. One measure of accuracy is to minimize error, which includes two components - bias and magnitude. Demand planner should use at least one measure for bias and another for magnitude on an ongoing basis to assess accuracy. Bias is defined as a systematic difference between forecast and actual result over a period of time. The bias could be measured with the help of mean error, cumulative forecast error or mean percent error. A large and consistent negative or positive error signifies a forecast that is consistently high or low. Once the bias has been identified, management can take active steps to correct the forecast by adding and subtracting the amount of bias from the predicted forecast.

The magnitude indicates the variance between the actual result and the forecast. This can be measured through Mean absolute deviation and mean absolute percentage error. When a magnitude reflects high forecast inaccuracies, it cannot be corrected as easily as the problem arising from bias inaccuracies. The problem may be with the forecasting systems and processes. In this case forecasting system needs to revised and streamlined.

This takes us to the third pillar of a good forecasting organization. Firms in order to make forecasting as a

lifeline of their organization need to build in dynamic alignment. There is a need to align the organization to their operating environment. Forecasting requires a larger buying from the organization and hence the chief executive should lead it. The sales and planning exercise has a meaning if it starts by mobilizing change and this is possible only through executive leadership. The supply chain strategy should be translated into operational terms. All the functional area should be aligned to this strategy. As we know these areas have their own forecast. The big question is how do we arrive at a single forecast. The process is to iron out various issues facing marketing, supply chain and finance function and arrive at a single forecast which aligns sourcing, production distribution, marketing and sales. The organization should motivate to make forecasting strategy everyone job. There is a need to make sales and operations strategy a continual process.

These are the broader pillars of a good forecasting organization. These pillars will make forecasting the biggest aligning tool, and supply chain of such organizations will help create competitive advantage for the firms.

Most o en rms choose a single forecasting technique as one si e t all solution for all products

emand planner should use at least one measure for bias and another for magnitude on an ongoing basis to assess accuracy

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Lead Story


Supply chain is a recent discipline. Supply chain was a function responsible for delivering a product to the customer. Nothing beyond that. For a very long time, Logistics and warehousing defined supply chain. And the operative word was cost reduction. However, changes in the business ecosystem is forcing a change. Today, the business is the supply chain. And the single biggest factor driving this change is technology.

The manufacturing world is on the cusp of its biggest change so far – Industry 4.0. Industry 4.0 is a paradigm shift in manufacturing, driven by technology. A convergence of technology will redefine manufacturing, seeking greater efficiency and productivity. How will this affect supply chains? Supply chains cannot escape changes. For one, 3D printing will render aftermarket supply chain – one of the most lucrative segments – irrelevant. At the other end of the spectrum,

Rolls Royce has unveiled their vision of global shipping – where a flotilla of unmanned vessels ply the seas, monitored from a central console. Again a redefining moment for shipping.

On the ground, Walmart is using drones in its warehouses for inventory taking. AGV’s are an established idea in a number of factories. Robotics has spread into warehouses, where robots do the running around, and humans the pick. Even here, technology is at play. Researchers are creating a robotic arm which can pick up objects – just like human hands. We will soon see fully robotized warehouses, with no humans on the floor.

One significant area of technology in supply chain is in information sharing. A host of IoT enabled devices will continuously stream data to a central console. The data can be used to monitor the health of the systems, their position, helping track and trace.

Three dimensions will define the supply chain of the future – supply chains need to connect all links in the chain – suppliers, manufacturers, customers, and intermediaries – in real time to exchange data seamlessly. The second dimension is the speed of response – the ability to analyze vast amounts of data and convert it into actionable information to the managers. Along with speed, the network should enable the supply chain manager to make decisions on the fly. Cloud enables firms to collect information in real time, using IoT, and using predictive analytics spot disruptions and take corrective action. Taleris, a Texas based firm offers a service - Intelligent Operations - on cloud platform, which uses tools such as performance data, prognostics recovery, and planning optimization solutions to improve operational efficiency of Airlines operators.

We bring you a few perspectives on technology in SCM.

Technology Convergence to Redefine Supply Chains

Lead Story

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Lead Story


Opportunities open up in markets all the time. The problem is, firms rarely get to know about them until it is too late. The culprit is the information chain firms have built over the years – it takes up to a week for information to travel from the market to the head office – by which time competition is already aware and acting on the opportunity. In a recent conversation with the head of supply chain of a large consumer goods frim, the topic of how to capture transient demand surges came up. He was frustrated – by the time he was aware of the

opportunity, others were at the job. The question was – is there a way to identify demand shifts in markets, without breaking the bank. This is where social media comes in. Many businesses don’t think to look to social media monitoring to help. It can be an invaluable resource. Demand stems directly from consumers.

Social Media and Pharma

For example – imagine there is an outbreak of Dengue. Tapping into social media channels to monitor and track for spikes in conversation

Think social media and you think of marketing. For many firms that is true. But social media has a far greater application in supply chain – for example, to gauge the demand for a product. And how firms should gear up to meet that demand. An astute demand planner can listen to the social media talk about a product and understand how demand can change in an area. Another use of social media is to estimate the demand for a product across geographies. In this article, Editor of SCMPro, Girish VS looks at the impact of Social Media in Demand Forecasting.

Girish V S, Editor,

Using Social Media in Demand Forecasting

Lead Story

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Lead Story


about colds and people feeling sick, can help pharmaceutical firms to anticipate where remedy products will be needed most – then informing supply chain planning to ensure adequate stocks at those locations.

The process is simple and straightforward – the firm first needs to set up a set of key words or tags that will describe the demand for the product. The trick is to create a wider set of keywords – not just the usual fever, high temperature, body ache etc. But also include “missing work” “missed an outing” – these too indicate an outbreak. Once set up, firms are in a position to pick up early

warning signals of impending demand spikes or shifts. The same data can help firms identify the geographic location where the demand is likely to pick up.

Social Media in Retail

One sector that is ripe for social media intervention is the Retail industry. Across the world, social media is changing the way retailers and consumers communicate. Retailers can use social media to monitor the customer interaction and

forecast demand shifts. Traditional analytics used by retailers cannot catch fleeting demand spikes. Social media data can be used to identify events that have an impact on demand. For example, when a celebrity wears a particular brand of merchandise, piece of clothing or accessory, those brands can see an almost immediate impact on demand, thanks to Twitter, Instagram and the like. In the same way, social media commentary (e.g. product posting on Pinterest, positive or negative tweets) can be decomposed to determine potential impacts to demand. By capturing this information, retailers can predict and respond to these

fluctuations in demand much more quickly by increasing order quantities for a particular style or canceling a promotion.

One brilliant example of integration of social media in retail is the like-meter – an on-line display of the number of likes an article as received from Facebook, and other Social Media. This gives the manufacturer an idea of the popularity of a product and help them meet demand surges. For example, Tyrers Department Stores in UK has integrated a digital

clothes rail which will tell shoppers how popular a garment is, depending on the likes, shares and comments on Facebook and Instagram. Above each item is a bubble with rising or falling level of blue water which shows the popularity of the item.

In an example closer home, Lenskart introduced the Virtual Mirror concept in eyewear to assist decision making online. It provides a “virtual mirror” on the website where users were asked to upload their photographs and the glasses could be virtually worn to see how they would look.

Firms can capture and utilize social media data to move beyond the

traditional approaches and create the type of personalization today’s consumers expect. By utilizing social data, firms can also empower their value chain to predict and respond to their consumers’ needs, providing them with an enhanced buying experience. The ultimate outcome, if done correctly, is satisfied customers, happier value chain, and improved financial results for the firm — one of those rare cases where everyone wins.

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The rd Edition of Warehouse Compendium will be relesed in December . A collection of thought leadership articles by some of the best in the Warehousing sector in India, the Warehouse Compendium by SCMPro is a resourceful informative handbook with well researched articles on various aspects of warehousing and inventory management. Experts from the Industry will be contributing to the compendium.With high referral value and long shelf life the Warehouse Compendium is a must have reference handbook for the stake holders of the logistic & supply chain industry.The Compendium will be reaching , decision makers and potential warehouse users and investors. We would like to have your esteemed participation in this compendium in the form of an advertisement.

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Lead Story


A complex world, with follow-the-sun supply chains, hyper-connected partners, and expectation of exceptionally responsive service has pushed organizations to redefine how they run and measure their Supply Chains. With top line growth plateauing, there is more scope for organizations to increase profitability by optimizing their Supply Chains. Analytics is fast emerging as a key enabler to do so. The use of business analytics in Supply Chain processes has become more prevalent over the years. Organizations want to get insights into their Supply Chains and make data-driven decisions, instead of working on best-guess operations.

Digital Supply chains help enable clients to enhance their operational performance and add revenue streams. This includes enhancing performance of supply chain in areas such as warehouses, logistics, inventory management, shop floor management, and new product development.

Digital Supply Chain

Digital Supply Chain services help an organization on the path to create a truly Digital Supply Chain. Digital supply chain senses information and provides a real time view of the extended enterprise, provides collaborative platforms and integrated best practices, improves operational excellence, productivity, and customer experience, and provides real time visibility into the supply chain.

Digital supply chains help firms move from products to Services using advanced inventory optimization and spare parts planning capabilities to support this change and drive

better CSAT through a combination of business process change and technology solutions. Helps Grow in emerging markets and tackle demand stagnation in mature markets by Enabling Supply Chain network design capabilities to optimally rebalance the Supply Chains and drive cost efficiencies and Supply Chain agility. And harmonize process and technology in the era of joint ventures and M&A by bringing consulting experience and proven assets to drive process harmonization and best in class technology enablement and ensure that firms are able to deliver the business case.

Traversing the Digital Journey: A Guide for Supply Chain Owners

In recent decades, supply chains have relentlessly approached Digital maturity. But transformation to Digital is not just another level of improvement – it’s a quantum jump. It’s imperative that organizations understand the full implications and journey required. This article provides insight to customer-front technologies and trends shaping supply chains, explicates the digital journey by defining a digital scorecard, and outlines the progressive stages of digital maturity.

A set of new technologies is shaping today’s supply chain. Beginning with the Internet-of-Things (IoT), real time sensor data on geographical position and electromechanical data of entities can radically improve tactical decision-making. Wearables further empower supply chain operators.

As consumers share buying experiences on social media, supply chain managers can access Big Data analytics to gain meaningful

An organization’s supply chain is integrally linked to its successful growth. With mounting pressure to deliver multiple, often conflicting objectives of cost optimization, flexibility, and excellent customer service, enterprises often struggle to manage all the inherent trade-offs and complexities. An integrated supply chain operations strategy is imperative for enterprises to manage these trade-offs. Damodar Sahu writes on digital supply chains.

Damodar Sahu Partner – IoT, Smart Manufacturing & Services | Manufacturing & Technology BU, Wipro Limited

Ushering in the next wave of Innovation in Supply Chain - Industry 4.0

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Lead Story


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Lead Story


consumer insights. 3D printing will change dynamics of production and supply. NASA’s “Made in Space” wrench is an example. Mobility complemented with cloud computing makes more nodes accessible, increasing data visibility across all echelons. Robots can fully automate warehouses while drones are being tested for deliveries. There’s no doubt that the each technology has its own advantages but for most supply chain operators, the question remains as to which to implement. Consumers are increasingly demanding more value and highly individualized products. Expected turnaround times are shrinking. As customer demands become less predictable, supply chains must be more responsive, agile and resilient.

The method of approach to converting a digitalization vision into operational strategy is crucial. The first step is determining the correct parameters for assessing supply chain digitalization. Typically, supply chain managers gauge success on getting the right product at the right place, right time, and right cost. These are often complemented by drill down indicators – fill rates, adaptability, productivity and efficiency. While these conventional parameters do gauge supply chain performance, they can’t evaluate the level of digitalization. “Digital parameters” are required, to not only measure the internal aspects of supply chain, but assess it from the perspective of stakeholders:

● Visibility: The ability to fetch a single truth of data from all relevant nodes

● Collaboration: A determining factor which indicates the propensity and potential to partner with multiple stakeholders in a complementary way, achieving a common objective.

● Agility: The ability to make a strategic and tactical shift based on market needs.

● Experience: The quality of experience delivered to all stakeholders – from vendors to customers.

● Simplicity: From defining strategy to operating physical and IT processes – all must be executed with simplicity.

Once a supply chain assesses its digital readiness, it can then safely commence its journey. While Digital is the pinnacle of the supply chain maturity matrix, its maturity can be further understood, based on the level of integration of digital enablement:

Augmented - The digitalization journey starts with making incremental changes to the existing system. The core system remains but additional digital components enhance the performance. At this stage, the focus is on internal nodes of the supply chain under the organization’s control. Digital parameters, in their most modest form, are defined and measured quantitatively.

Adjacent - At this stage, a select set of digital levers are imbibed into the supply chain processes, becoming integral to operations. Digital initiatives are introduced into the supply chain organization culture. The umbrella of digital levers also starts to incorporate external entities including key vendors, partners, and other stakeholders.

Integral - This is the ultimate stage in the transformation curve. Digital is core to the business model, processes and culture. By the time a supply chain reaches this stage, digital is imbibed in the majority of the processes. The supply chain has delivered significant benefits to consumers and improved internal measures. Digital parameters are tightly monitored and reported as part of the executive dashboard.

Supply chain managers often ask what the view from mountain may look like. Here is a sneak peek via key supply chain processes:

● Digital planning is more collaborative with significantly reduced planning cycle time. Multi-source and sub-transactional data analyzed by various tools makes planning process agile.

● Digital sourcing has, at its core, comprehensive demand aggregation. Multiple commercial models on shared logistics are available.

● Digital Manufacturing is largely on-demand with modularization, robotics and automation at the core. Delayed differentiation of product deliveries supports mass customization.

● Digital Delivery is more experiential throughout all the touch points in the supply chain. There is an accurate view of true cost to serve integrated into planning, thereby decentralizing the tactical decision making process.

● Digital Returns/ Service are completely prognostic due to high visibility. Collaborative models with stakeholders increase the service network reach, creating higher aftermarket revenues.

The journey of becoming a Digital supply chain is systematic. Beginning with defining a digital scorecard, the three stages of maturity must be accurately assessed and traversed. At the pinnacle of transformation, Digital planning to service processes completely transform – becoming truly collaborative, visible, agile, experiential and definitely simple in their operation.

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Lead Story


Even though 3G and now 4G technologies have come up, its application in vehicle tracking has not really been prominent. A lot of research and implementation is being seen on data transfer over the internet. Advancements in Cloud Based Technologies to store data and availability of common platforms from Amazon (Amazon Web Services), Microsoft (Azure), IBM (Soft Layer) and others have made the cost and maintenance of tracking software very low. Moreover, with smart-phones pervading all parts of the society, accessing data has also become very simple.

Data exchange from server on to the cloud and then to the end user is also witnessing some improvements. There has been a clear shift to REST (Representational State Transfer) based web services as it is easier and simpler than SOAP (Simple Object Access Protocol) and WSDL (Web Services Description Language) based interfaces. The advantage of REST is that it is stateless making it suitable for Cloud implementation. The format of the data exchanged between the GPS device and the server is normally in the request/

response payload or in the HTTP framework.

Information is collected by a Telemat-ics device which is connected to a ve-hicle by vehicle interface. They can be of three types – Autonomous, Wired or Bus.

● An autonomous system is a battery operated device, which has no dedicated wired connection to the vehicle but is collocated. These devices are normally used only to collect vehicle information such as location and parameters of motion. OLA and UBER CABS have built in location services to enable tracking using a driver centric device along with a wired system to monitor fuel, A/C, Door Open/Close.

● A Wired system is one in which the device is dedicatedly connected to the vehicle battery and to various sensors such as Fuel, A/C, temperature etc.

● A Bus based device connects to the OBD-II port or the CAN bus in the vehicle. The CAN bus can provide a lot of information about the vehicle including fuel consumed

The world that we live in today would not have been possible without the various modes in the transportation sector. All of us are bound to be touched by transportation in our lives. From Fleet owners to Logistics Providers, from Taxi Services to School Buses, vehicle tracking technology is being increasingly deployed in all aspects of the business world. According to a report, “India Telematics Market (2013-2018)” from 6Wresearch, the Indian Telematics market is expected to reach $113.7 million by 2018, growing at a CAGR of 22.8% from 2013-2018. In this article Karan looks at vehicle tracking from a technology perspective and look at the interplay between information, propagation and standardization.

Karan Handa Product Manager, Axes Track Software Solutions

Technology in Vehicle Telematics

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Lead Story


and gear shift, giving insights in to the driver behaviour regarding sharp turns and harsh braking. Of late the OBD-II based tracking has gained momentum especially due to Usage Based Insurance (UBI) wherein vehicle insurance is decided based on driving behaviour. However, the OBD-II port is essentially a diagnostic port and hence connecting unapproved devices to this port continuously can seriously harm the vehicle.

There are three fundamental categories of data that is monitored with the help of vehicle tracking solutions– vehicle location (latitude and longitude), parameters of motion like speed and acceleration, and vehicle parameters like fuel level, battery condition, ignition state, temperature etc. with the help of various sensors.

Advanced Solutions- Futuristic Trends

The Way Forward in GPS Based Vehicle Tracking System can be achieved by value addition to two present solutions:

● Hardware Driven Innovation

- Focus on Hardware upgradation or integration of GPS hardware with various other sensors.

● Fuel Monitoring Sensors● Temperature Sensors● RFID/NFC Integration● Biometric Integration

● Software Side Innovation

- Providing high end analytics and user-friendly dashboards for senior and mid-level management to generate more value out of the data.

● Assessing fleet utilisation trends.

● Comparing loading times for turnaround times.

● Listing low performing routes/drivers.

Components of Software (Data) Side Advanced Solutions

The three components of software based solutions are:

● Different UI for different viewers Different/Custom-made dashboards for senior and mid-level management to get a bird’s eye view.

● Proactive Analysis - Control waywardness and Defaults.

● Alignment with Operations - Custom tailor-made solutions to optimise routes and delivery times as well as reduce operating costs and identify bottlenecks and make long term strategy decisions.

It can be said that vehicle tracking telematics technology is maturing. Vehicle interfaces as well as data interfaces are getting standardised. A customer requiring vehicle tracking telematics in his supply chain should not only look for a compliant device, but also a software that is compliant to standards.

To conclude, we may say that Vehicle Tracking is going to expand from its current state and offer services as vehicles become an integral part of the growing “Internet of Things (IoT)” landscape. These services may include proactive roadside assistance, vehicle health status, security and connected navigation. These services are all considered added benefits for the consumer, engaging the driver and ultimately improving customer satisfaction.

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Lead Story


In 2014, while researching the application of technology in businesses, we noticed companies were creating a huge asset base, but asset utilization was poor. Technology enables firms to utilize their assets better, driving better profitability. That is what Parsel set out to do – improve the capacity utilization in Intra-City logistics. Another realization was we could not use business models developed for other sectors. For example, we cannot copy the Uber model in intra-city logistics. One reason is the ticket size – intra-city may realize a ticket size of INR 25 to INR 30, while it will be INR 200 to INR 300 in Uber. Second, in Uber, the person you are contracting with is the owner of the cab. In our case, delivery boys are not entrepreneurs. Third, interacting with human beings – like in Uber is different from interacting with goods.

We need to make decisions about goods. Fourth, the productivity range seen in logistics industry is in the range of 45 to 50 percent – leading to huge underutilization of resources. This is where technology fits best.

At Parsel, we decided to address the underutilization challenge. Our strategy is to source deliveries from the biggest possible pool of service takers – not restricting ourselves to food deliver or e-commerce delivery. We see e-commerce as a separate delivery channel, not a separate business. For example, we do deliveries for Aditya Birla’s More – a modern trade retail outlet. The last mile delivery there is similar to Flipkart’s last mile delivery. One can derive synergies between these two models. This model of trying to attract a larger demand pool and trying to cross utilize the assets is what is unique to Parsel. This has led

Technology aided logistics firms is an increasing crowded space – every major metropolis has at least half a dozen firms trying to create a technology backed play. Some succeed some do not. Parsel offers an IT enabled delivery infrastructure service to the last mile delivery that increases capacity utilization and improves efficiency. They do this by moving across the multiple last mile delivery models existing today – food, modern trade, e-commerce etc. Editor SCMPro Girish V S spoke to Himanshu Meena, founder and CEO Parsel. We bring you excerpts from the interview.

Himanshu Meena, Founder, and CEO Parsel

Unifying Deliveries by Riding the Technology Wave

Lead Story

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Lead Story


to better capacity utilization for our resources. This has helped us scale up in a less capital intensive manner. A second aspect is Uber can expect to subsidize its customer and gain market share. But to expect to do that in a B2B model is suicidal. These realizations shaped our focus.

Parsel focuses on three business verticals – one the e-commerce segment, by far the largest contributor, second, the retail, and start up segment. The third is the corporate segment. If we look at operational cycle in the e-commerce segment, the warehousing part starts early – around five AM., where hub to hub transfers happen. The last mile delivery starts at nine in the morning and first mile pickups at around three in the afternoon. This is a set patter. An intelligent business can utilize its resources, try, and fit in those cycles. A major part of the time in logistics operation is in organizing or travelling. Hence achieving geographical density is crucial. For example, the food delivery industry will see activity between 11.00 AM to 2.00 PM and 7.00PM to 9.00 PM. The delivery boys are hired to work in a 12 hour shift. There is a slack of seven hours. The idea is to use this capacity in other segments. I can now use this capacity for first mile pick-up, last mile delivery, and courier delivery – wherever there is a demand.

Parsel is more than movement of goods – at this time we see three types of flows which will happen on this platform. One is the flow of goods. We have a plug and play platform where we can integrate other functions like warehouse facility or a sorting facility etc. The second is the flow of information which is crucial going forward. In terms of information, we are collecting the ordering pattern of customers, locational information about customers and vendors, etc. Over a period, this will become a major source of revenue for Parsel. The third flow is payments – we are planning to integrate virtual payment platforms with our solutions. A new frontier we are exploring is in retail distribution. E-Commerce majors

cannot plan capacities based on their peak demand. They are now moving to a model where they are renting out space in retail stores. Once an order comes in, they depend on a service provider like us to pick up the products from the retail store for delivery. This will be a new business channel for us.

The one thing that will set us apart is automation of our processes. Logistics is predominantly a manual process. We depend on automation to keep us lean. There are three aspects to our business – logistics, technology and distribution patterns. We demarcate deliveries into two – scheduled or on-demand. Our plan is to build a base of scheduled deliveries and on that base build an infrastructure for on-demand delivery. Parsel is positioning itself in that cusp, where it can tap into all kinds of distribution – e-commerce, B2B, retail, and modern trade. We are trying to emulate the way information packets moves across the internet – the TCPIP protocol. A similar efficient system should exist for the physical world. We do not distinguish between packets moving across our network – we currently cater to up to five tons per shipment. Eventually we will have a main line running across the city, shuttling goods from one end to the other, and feeder lines that will collect it and deliver it to the customer’s doorstep. We call this the relay system. In the relay system, we will use a truck as a moving warehouse. For example, we are piloting this for a pharma firm. Four tempos arrive at their warehouse in the morning and pick up the packages. They then reach certain pre-fixed staging locations, where bikers come and pick up the packages for final delivery. This has led to an 18 percent growth in the retail outlets serviced.

The unifying trend is the use of technology that will help us seamlessly choreograph our activities, without any one entity having to wait for picking up their share of deliveries. We believe we are in a unique technology sweet spot that will give us the leverage to play across categories.

Our strategy is to source deliveries from the biggest possible pool of service takers – not restricting ourselves to food deliver or e-commerce delivery

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Guru Speak


Let’s meet the Project Accumulation customers

The unique nature of large-scale industrial projects might lead us to expect that the customers are all as different as their projects. Far from it. Our behavioral segmentation

regime, introduced in Chapter 2, shows just what type of behaviors we can expect from our customers i n these construction sites. Let’s consider who the buyer on this demand side of the Campaign supply chain actually is. The customer could be the main contractors on site, who

India is poised for a growth surge – with large investments planned in almost all sectors – including infrastructure. We plan to invest USD one trillion over the next five years on infrastructure – half our current GDP. This means ability to execute large projects in tight timelines – something our construction industry cannot do. We need to learn the skills to deliver such projects. We bring you excerpts from a chapter of a book Dynamic Supply Chains – How to design, build, and manage people centric value networks by Dr. John Gattorna. This is the second part of the series

Dr. John Gattorna, Executive Chairman, Gattorna Alignment Pvt. Ltd.

Campaign Supply Chains How to deliver-in-full-on-time to project sites

Guru Speak

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Guru Speak


are responsible for the build actually happening. They want to get it done, on time, and as specified. Or the customer could be regarded as the owner of the development. Then again, the customer could be the parties who will be the ultimate users or customers of the facility itself. Costs can grow astronomically and the consequences can be of a similar scale if any mistakes are made. Typically, the customers are longer”-term in their thinking. You can’t just say - let’s change that, we’ll do it different now. Too late! We want costs and scheduling to be of the precision of a space flight.

So the customers in the Campaign configuration demand the opposite of unpredictability. We need precision in the staged delivery over time of our products; essentially, it is tight accumulation rather than rapid response. Hence, I’ve called the dominant buying behavior for this supply chain Project Accumulation. Meeting the demands of this segment is critical to the Campaign supply chain’s configuration.

Fortunately, experience can help here: key demand-side characteristics have been identified on several industrial sites, which are listed below:

● Products, components, sub-assemblies, and Engineered-to-Order capital equipment designed

for a specific project have to be gradually accumulated over time, in a specified location.

● This complete package of equipment must be fully visible to individual suppliers involved in the project, and the project manager in-charge of the project itself, and controlled along the supply chain with all the usual disciplines inherent in good inventory management.

● It may be necessary to phase the delivery of the equipment according to a predetermined schedule, in which case accuracy in inventory management on the supply-side becomes even more paramount.

● Typically, apart from clever support systems, this type of supply chain requires a ‘hands-on’ management style along the full length of the chain.

● In logic terms, we would code this segment (and corresponding supply chain), as ‘AP’ in terms of our P-A-D-1 code.

There may also be a secondary behavior associated with the Campaign supply chain, and that is ‘Ia’, which implies a certain degree of collaboration between buyer and supplier during the project. If this does not exist, then completion of the project on time and on budget becomes even more difficult, if not impossible. If collaboration does exist there is a good chance that VMl practices will work as well, with suppliers proactively delivering goods to site as needed, but this could also lead to confusion.

In the case of many projects where designs are changed during construction, no matter how good

the front-end engineering design, equipment often needs to be redesigned. This involves a ‘reverse loop’ of information to help re-assess the corresponding logistics needs to move re-designed equipment, units, or modules.

There are two possible buying behavior logic variants. We are focusing mainly on the inbound or buy-side as seen from the customers’ perspective (or demand-side seen from the suppliers’ perspective), because that is the critical one for successful on-time delivery of projects. Accurate lead times are essential, and hitting project-specific schedules on time with the required materials is mandatory. If not, the customer’s production post-project on the demand-side can be negatively impacted, with serious financial repercussions. Due to this, suppliers often have to sign up to liquidated damages clauses to win contracts

and take on some of the risk. For example, Bechtel was hit with US$27 million liquidated damages bill when it ran eight months over on the construction of a power station for the Athens Generating Company in 2004-13. It can even happen to the best construction contractors.

So t he c ust om ers in t he Campaign con guration d em and t he opposit e of

unpred ic t ab ilit y

D ue t o t his, suppliers o en have to sign up to liq uid at ed d am ages c lauses t o w in c ont rac t s and t ak e on som e of t he risk

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Guru Speak


At this point, it is worthwhile making what is perhaps a fine distinction between the logistics serving new construction such as large Greenfield capital projects, and that serving overhaul or maintenance of an existing Brownfield installation. Very often, big plants undergo annual ‘turnaround’ projects, shutting down part of a plant to upgrade or re-engineer a re-build, and then turned back on. An example of the former is the way Toshiba Logistics works with Toshiba Corporation and Westinghouse Electric Company when constructing new nuclear power stations. Four such facilities are currently under construction in the United States. Ray Ledford of Toshiba Logistics says that as a logistics service provider of the Engineer-Procure-Construct contractor, Toshiba Logistics likes to reach back upstream to the various suppliers and sub-suppliers and take over the logistics responsibility at the earliest possible opportunity. They do this by requesting materials are ordered ex-works in the case of domestic suppliers. While in the case of global suppliers, components, materials and assemblies are delivered to the nearest port of export on an FOB or FAS basis at which point responsibility is transferred to them. This is a case of the ‘owner’, Toshiba, taking over part of the inbound process on behalf of the contractor.

Woodside Petroleum, an Australian based oil and gas producer that operates Australia’s North-West Shelf project provides an example of the latter situation. When it undertakes maintenance of one of its liquefied natural gas (LNG) trains, Woodside does not want to see materials delivered to site early, as this leads to poor cash management, and unnecessary storage and handling risks. On the other hand, if materials are delivered late and the train comes back on stream late due to delayed delivery of maintenance materials,

production is lost, the value of which far outweighs the actual cost of the materials involved. For example, a two-day delay in a 40-day shutdown program adds up to a 5 per cent loss - enough to throw the whole program into negative cash flow.

There are some very good examples of project delays due to scheduling problems in the Gorgon Project, one of the world’s largest natural gas developments, which is currently being constructed within the same region off the coast of Western Australia, in the North-West shelf. Costs have blown out by more than 50 per cent to US$70 billion, and poor planning, including logistics, are partially to blame. According to Peter Williams, of the West Australian newspaper, “Gorgon has suffered from cost overruns and delays as contractors struggle to move materials and equipment from the Australian Marine Complex in Henderson to Barrow Island in the Pilbara, in a timely manner.

Industrial companies such as Schneider Electric find themselves caught between two worlds, i.e., between the supply of products and components for day-to-day sales and

Consequently they have not honed t heir proj ec t sk ills t o t he d egree nec essary t o supply t he m aj or c apit al proj ec t m ark et

usage via distributors and end users, and Engineered-to-Order equipment for capital projects. Consequently, they have not honed their project skills to the degree necessary to supply the major capital project market. This is now changing as the Project Accumulation customer segment grows faster than the conventional product business, and consequently more focus is being placed on handling this type of business.

Indeed Schneider Electric in Australia is in the process of designing and building a Distribution Center that is dedicated solely to servicing its project customers. They have started mapping, for the first time, the end-to-end processes involved in projects, and identified the issues that must be addressed to execute the new projects facility; this will become the centerpiece of their Campaign supply chain. It is likely Schneider Electric will follow a similar path for their business in China and elsewhere in the world as well.

In the process, they are developing completely new customer logistics offerings, because none previously existed for this type of business. In addition, they are cleaning up the internal procurement of products from business units across their entire business, because until now this has posed many problems. They are also introducing new forecasting processes that will ensure material is ordered from internal and external sources well ahead of potential usage. A priority for the IT systems currently being installed is that they have high visibility of project components at all times. The proposed new Distribution Center will have cross-dock and merge-in-transit capabilities to ensure deliveries are consolidated for delivery according to a previously agreed schedule. This will most likely be operated by a 3PL under contract.

To be continued...

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Spotlight


One of the toughest negotiations in corporate life is the vendor – supplier negotiation. Months of effort bears fruit in the one signed contract. And this is where the story stops for most corporates. The duty to deliver the contract is the goal. However, new management thought believes the work starts after signing the contract. Modern supplier relationship management is a two way street, where the vendor and the buyer collaborate to develop skills and products in the supplier. In this scenario, the buyer extends every kind of support, including design and development skills to the vendor. In this issue of the spotlight, we look at the changing nature of supplier relationship management.

Spotlight


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Spotlight


Supplier Relationship Management - making suppliers efficientOne commonly accepted definition of Supplier relationship management is – SRM is a comprehensive approach to managing an enterprise’s interactions with the organizations that supply the goods and services it uses. The goal of supplier relationship management (SRM) is to streamline and make more effective the processes between an enterprise and its suppliers just as customer relationship management (CRM) is intended to streamline and make more effective the processes between an enterprise and its customers.

In the first phase, firms looked at vendors as source of raw materials and services, delivered as per the corporate plan. The role of the vendor was restricted. Very rarely did a vendor cross the barrier to be a part of the strategy team of the corporate. But things have changed drastically. The vendor today is a quality manufacturer, capable of innovation and R&D. The focus is shifting from efficient delivery at low cost to strengthening relationship with the supplier. Across the world, corporates share with their suppliers their strategy and concerns, moving the relationship to a partnership.

One area where SRM will immediately bear fruit is in supply chain risk management. As the relationship is elevated to a partnership, the supplier becomes a willing link in risk mitigation. Studies have found the top procurement teams that have successfully aligned with their key suppliers have improved supplier

capabilities of innovation, quality, reliability and costs/price reductions, and agility to reduce risk factors. Greater value can be achieved for both businesses, something that would be difficult to achieve if operating independently.

Why SRM?

The first step in developing a supplier is the spend analysis and market analysis. Inherent in the market analysis is supplier risk assessment. This leads to a rationalization of supply base and consolidation of suppliers. This provides the firm a point in time reduction of cost. The next step – moving the relationship to a partnership is the core of supplier relationship management – the supplier now is an inherent part of the organization and will work with the firm to deliver consistent reduction in prices and enhancement in quality. Done well, this yields savings year after year.

A report by PWC- “Supplier Relationship Management How key suppliers drive your company’s competitive advantage” reveals that SRM is focused on joint vale creation, based on trust, but with a limited number of suppliers. According to the report, the main reason why firms embark in SRM is to leverage on the capabilities of the supplier and to reduce costs. A beneficial fall out of a SRM is the reduction in risk and improvement in supplier profile. Developing a Supplier Partnership

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Spotlight


Developing a Supplier Partnership

The next best practice in supplier relationship management is systematic creation of post contract value from the supplier relationships. The firm should realize that supplier relationship is not an end in itself, but an avenue for both the supplier and the buyer to enhance each other’s utility. In as much as the firm needs the vendor, the vendor too requires a buyer willing to manage value, not just focus on cost.

Setting up a SRM program is a complex task. Firms do recognize the benefits of SRM, but still face challenges in developing a fair and equitable partnership with their suppliers. The single biggest hurdle in SRM is the focus on costs. Traditional sourcing has ingrained cost reduction as the strategic imperative for firms. But as firms focus on cost reduction, they lose sight of the long term benefits of a true partnership. Value drivers like innovation and risk reduction require a long term focus. A report by Rand Corporation reveals, “Companies such as Honda, John Deere, and Praxair are increasingly making full supplier cost disclosure a condition for consideration as a potential supplier whi le also corroborating d a t a from multiple sources, particularly unbiased external data, and their own knowledge o f internal costs.”

The second challenge for S R M is the lack of specific SRM skill sets. Firms which have u s e d sourcing like a sword to c u t prices are not the best teams to build partnerships. For a l o n g time, we at SCMPro have been talking of aligning the supply chain to the organizations goals. In a similar vein, firms should s e e k alignment between t h e i r procurement team a n d business strategy. F o r example, Cessna reported a

113 percent increase in production inventory turns over six years, with dramatically higher material availability. Cessna achieved this improvement by creating a strategic plan and cross-functional commodity teams that rationalized the company’s supplier base.

IoT in SRM

Technology is the backbone of a SRM roll out. Like in all other fronts, IoT is set to change the paradigms of SRM. Another fallout of IoT is the increasing complexity in product development. As microprocessors and sensors become mainstream, product development will become complex. Firms will now need to increase collaboration between the product teams and the suppliers. Most of the IoT developments are now front ended by the supplier – not the firm. A significant part of a sourcing team’s time is spent chasing deliveries. IoT has the potential to ease this. Connected devices can inform the sourcing team about potential blockages on a route and, in conjunction with Google Maps

suggest alternate routes that are not blocked.

IoT will help the sourcing team generate huge amounts of data. Quite a number of tasks undertaken today – like inventory count will become redundant. Smart shelves will be able to estimate the amount in stock in real time, and extrapolate it with the velocity of consumption to auto schedule deliveries. Similarly, the machines will self-diagnose and order parts for maintenance. IoT will automate a number of procurement processes, and gather huge amounts of data. The future procurement teams should be able to analyze this data and develop synergies with their critical suppliers.

The ultimate aim for a sourcing team is to convert itself from an ad-hoc buying team to a world-class procurement team. Across the world, SRM has become a focus area for firms. We believe that the time is not far off when Indian firms will explore SRM in a structured manner.

whi le d a t a

o f

S R M

u s e d c u t teams l o n g

a s e e k t h e i r a n d F o r

Leverage on supplier capabilities

Figure 1. Objectives to initiate SRM

Deliver on cost reduction targets

Improve security of supply

Become a ‘customer of choice’

Manage the supply risk profile

Enhance supplier relationships

Guarantee sustainable sourcing

Increase the responsiveness of the supply chain

Anticipate on volatile commodity prices

Other

0% 10% 15% 20% 25%5%

SCMPro_Pg_25_27.indd 26 29/06/2016 11:54:00 AM

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EPGPLSCM.indd 1 28/06/2016 5:08:34 PM

Feature


Warehousing and Logistics are two key levers and enablers within Supply Chain. To describe each one of them in a single word, I would use the verb ‘Store’ to describe Warehousing and ‘Move’ to describe Logistics. Supply chain will cease to perform without these key verbs (Store and Move) since products have to move through multiple nodes of the supply chain to undergo the transformation from raw material to final product and then

move through different distribution channels to multiple channel partners before it reaches the customer. Logistics Management is all about this journey to ensure that the journey happens on time and happens efficiently; Storage (Warehousing) gives the opportunity for consolidation and gives you much needed control to have enhanced service levels.

Space is money. We understand this from our investment in land and property. Because of the large investments in land, firms need to maximize use of the space available to them. An obvious place to look for space usage is the warehouse. Industry is at a juncture where it must save every rupee. Warehouse forms 2 percent of product cost. Alvis Lazarus, Founder, and Executive Director at Hesol Consulting writes on warehouse optimization.

Alvis Lazarus Founder, and Executive Director at Hesol Consulting

Warehouse Optimization - A Competitive Edge in Supply Chain!

Feature

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Feature


KANO MODEL IS GETTING SKEWED DAY BY DAY

Customer Expectations keep pushing us to our limits. KANO model best explains the impact of this change. Most of the past Wow moments experienced by customers – which were classified as either ‘Excitement’ factors or ‘Performance’ factors in KANO model have moved to the ‘Basic Needs’ factor in the KANO Model. I have been doing a lot of KANO models through the years. These changes result in a skew to the KANO model. In this article, I have focused on warehousing specifically, and how it can be an organization’s competitive edge.

Warehousing has just become part of top company strategy:

Decades before, Warehousing was never even part of the company strategy and it always took a back seat. The focus was on Manufacturing and the game is all about running the factory efficiently. As years passed by, competitive edge created by lean manufacturing and other TPS concepts slowly died down and it has become an even game. With that, Warehousing and Logistics started coming to Limelight.

In a supply chain, Warehousing cost is about 1-2% of the total sales. Efficient supply chains operate at < 1% of warehousing cost to total sales. But there is a huge variation between different organizations. For example, current E-Commerce companies operate at 4-8% of the total sales… Yes, E-Commerce industry was not much worried about this leakage in 2010 but today leadership team from E-Commerce industry is under

tremendous pressure to monetize and certainly, they cannot leave warehousing costs out. I am sure warehousing and logistics costs are in the top 3 of the priorities.

The lamest argument I have heard is ‘Anyways I can bury this cost in my costing and why do I have to invest on any technology or skills here at warehousing? Investment here won’t break even?’ Answer is simple:

(1) Current market is so competitive and customers can see all competitive info right on their hand-phones. If you are not price competitive, you cease to exist.

(2) We are talking about leakage of 3-4% on total top-line and that’s a huge stake.

When it comes to competitive pricing, healthy bottom line and enhanced service levels, warehousing and logistics have to be part of the core strategy.

WAREHOUSE OPTIMIZATIONThere are two main optimization verticals under warehouse optimization.

Warehouse Resource Optimization

● Warehouse Space Optimization

● Warehouse Resource Optimization

Warehouse Resource Optimization is all about the efficiency of the people. There are about 10+ measurements on evaluating the efficiency. A single metric called the ‘LPMH’ – Lines per man hour consolidates all these metrics. Warehouses achieve efficiency through eliminating non value added activities. There are multiple methods available – Theory of Constraints (TOC), Waste Analysis, Therblig Study, VSM (Value Stream Mapping), GEMBA Study, Spaghetti Map etc... A combination of the type

of problem/requirement and used as stand-alone or as a combination determines the techniques selected.

Out of the total value that can be brought-in through warehouse optimization, Resource optimization contributes around 15-30% of the total value addition as bottom-line savings.

Warehouse Space Optimization

In a business language, it is all about efficiently using each square feet you are paying for. When your business teams are sweating it out on field building the top line, these space inefficiencies silently eat out huge percentage in bottom-line. Unfortunately, most warehouses operate at around 60% or less in cubic space utilization.

On a positive note, once warehouse optimization is on radar and once the organization starts to drive that, there is a lot of potential to make warehouses a key strength and edge. The organization can initiate Space Optimization on a green field project, brown field project, or an existing warehouse. Warehouse Optimization is not a one-time exercise; it is an activity to be done every Quarter. One methodology for Warehouse space optimization is concepting or slotting. Concepting or Slotting is a technique using which we can evaluate storage designs and storage structures needed and allocate products in the right storage zones and bins. To explain it with a simple example, just walk into your kitchen, and ask your Mother or Dad, whoever is cooking, where are all the spices stored? Where are the pans? Where are the vegetables? Where is the red wine? You would see a specific place for each of them and a specific storage container for each of them. It is possible to employ the same technique at a very large scale in the warehouse where there are Millions of products and lakhs of square feet.

As years passed by, competitive edge created by lean manufacturing and other TPS concepts slowly died down

Warehouse Optimization is not a one-time exercise; it is an activity to be done every Quarter

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Interface


The promoters of Vamaship have a successful brick and mortar 3PL service offering. However, there still is a huge gap in the logistics service business – organized players are not able to reach out to the SMEs. On-boarding these SMEs is a costly proposition, requiring a large dedicated sales team going into these clusters where SMEs operate, and tap each of them, one at a time. Apart from effort and cost, it is a huge drain on corporate time. There are quite a number of excellent freight forwarders with exemplary service and reasonable costs. But are not able to reach these mass shippers. This gap has always existed.

This gap can easily be bridged using technology. Vamaship was conceived as a multi-modal platform to serve these mass shippers. The idea is – any shipper should be able to sign in from anywhere in the world and ship any product to another part of the world at neutral prices. Today we have multiple touch points through

Vamaship is a technology–driven logistics platform launched in October 2015, which integrates unorganized logistics processes through air, ocean, and surface transportation, aggregates customer demand for cargo movement from SMEs, e-commerce websites and even individual shippers with fewer requirements. With the aggregation of volumes and automated shipping processes from inquiry till payment, the company helps shippers minimize cost, passes customers bulk shipping rates and cuts short the time taken for logistics brands to collect their dues from customers. Girish V S Editor, SCMPro interviewed Bhavik Chinai, CEO Vamaship. We bring you excerpts from the interview.

Becoming the World’s Shipping Partner

which a customer has to access his data. There is no one platform that can be used by everyone across the value chain. The factory can use it for their movement, FTL or LTL, the admin can use for courier, and the core business can use for sea and air freight. You may still have the same partner, but there is no automation. And hence the genesis of creating a single platform for shipping anything, anywhere, anyhow.

We should realize that each service offering follows its own TATs, price levels, and processes. Of these prices will continue to be different. The way to bridge this is to bring all partners to one neutral platform, which is the service offering of Vamaship. The freight rates offered by freight forwarders between two locations could vary by as much as 50 percent. This is purely due to information asymmetry. The need of the hour is a neutral platform where shippers can see who is offering what rates. This is a great value add for shippers

Interface

Bhavik Chinai, CEO Vamaship

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Interface


and partners. This brings in price transparency.

Moving on to service levels – there are minor variations, but more or less, the shipping process is the same across the world- in terms of the number of documents required from the shipper, customs clearance practices for different HS Codes, in terms of the shipping documents required for the last mile. It is always the same. The only difference is the number of agencies connected. As the agency count increases, the documents will change hands more number of times. We have identified, across the spectrum from dangerous goods to perishables to general cargo, all the sets of documents required. We are now trying to connect with different agencies and ICEGate to figure out if we can automate the flow of information into ICEGate to give them a shipping bill number instantly. Automation of document flow is done. The next step is automation of the other stakeholders.

There are a number of players who have tried to do this in bits and

pieces. The sticking point is absolute neutrality in price – there should not be even one instance where a shipper can get a better price using the traditional model, as opposed to the platform price. Shippers need that assurance. Promoters get absolute visibility with shipping. Today, with the way logistics works and the way logistics managers control the supply chain and partners to work with, visibility is compromised. With our mobile apps, promoters can track their shipment without having to depend on any third party. The biggest sticking point for us is our single point of contact – across the different shipping categories and needs. From having to deal with multiple agencies, and multiple follow up, today they have the luxury of a single point of contact for all their logistics and courier needs.

Managing such a service does require better quality of people. We have been able to attract people who are passionate about logistics and technology. To keep our costs down, we have automated every process within Vamaship. One of the

advantages technology offers is track and trace capability. Barring a few dark spots like a container moving from the ship to the dock, we have managed to offer complete visibility to our customers. And we are working towards eliminating some of the dark spots. We use some of the best technology to ensure our customers can transact seamlessly over our platform.

Which brings us to our value proposition – we can provide a one stop solution for all movement needs. When an SME comes on board, they have complete visibility of current prices and delivery times. They can then take an informed decision about the shipping mode and agency. They have this option at the click of a button. Another big value add is our assurance of the genuineness of the agencies transacting on our platform. Several countries have stringent conditions on supply chain partners. Every partner who signs up with us goes through a rigorous checklist, including the technology they have. They come on board only if they pass the inspection.

Books Published

Pocket Book of Shipping Definition

Clearance Through Customs Clearance

Port Management

Handbook for Custom Clearance - English/ Hindi/ Gujarati

A Pocket Book of Shipping and Logistics

All you Needed to know about EXPORT-IMPORT

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Academic Advocacy


Supply chains connect the manufacturer, his supplier, and consumers in a complex web. An efficient supply chain can lower costs and have a major impact on economies and societies. Because of its impact on economic growth, both firms and governments focus their attention on supply chain costs. According to the author, “Logistics costs accounted for 8.2% of gross domestic product (GDP) in the United States in 2013, or about $1.39 trillion (Wilson, 2014). In Europe, they accounted for 7.2% of GDP across the EU 27 countries or about €850 billion in 2008 (A.T. Kearney and the European Logistics Association, 2009). Asian logistics costs, excluding China, Japan and India, accounted for about 17% of GDP (Wilson, 2014), while in Thailand they represented a little over 15% or US $55.4 million of GDP in 2010 (Paijitprapapon, 2013). Thus, costs may be considered a hygiene factor as a trend and ongoing issue that underlies management thought and decision-making.”

The author discusses the following rends in this paper:

● Globalization of supply and markets

● Time compression, product complexity and shrinking product life cycles

● Quality of performance and service

A number of pressures affect the supply chain function – globalization of supplies and markets, shorter time to market, product complexity, faster obsolescence, talent shortage and supply chain disruption. In a paper published by David B. Grant, Hull University Business School, Hull, United Kingdom, discusses and synthesizes these important trends and focuses on risk as an issue that, besides costs, underlies and/ or affects almost every other trend. You can read the entire article at https://helda.helsinki.fi/bitstream/handle/10138/159808/194_1048_1_SM.pdf?sequence=1

David B. Grant, Hull University Business School, Hull, United Kingdom

Trends in Logistics and Supply Chain Management: A Focus on Risk

● Shortage of logistics and SCM talent

● Impact on the natural environment

● Risk and disruption and supply chain security

The aim of supply chain risk management is to ensure products reach consumers in time, at the least cost. It tries to anticipate any event that can delay or disrupt the delivery of goods and services. Next to cost, risk should be the focus of any supply chain.

The domain of logistics research and SCM face several trends and issues going forward for the rest of this decade and the next. Further, Thailand and other Asian countries need to address some of them in a unified fashion in the run-up to AEC 2015. Globalized markets, operational pressures to produce better and cheaper products at a faster rate without compromising quality and service, a shortage of qualified and interested talent, and external pressures regarding the natural environment all provide a challenging and risky business environment for firms in developed and developing countries. However, recognition of these trends and issues, and the inherent risk surrounding them, also present an opportunity to manage them and become leaders and indeed long-term survivors.

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Demand Planning & Forecasting

MAster Class

22nd & 23rd September 2016

Continuous improvement in demand planning and forecasting is a must for companies using supply chain as a source of competitive advantage. This master class will look at why some firms do better than others in terms of demand planning and forecasting. What are the basic tenets that are missing? What is required to make demand planning exercise successful?

[email protected]

D-204, Ridhi Sidhi Complex, Prem Nagar, Goregaon (W), Mumbai.-400 062.

+91 22 28742227 / 7808 / 6757

www.iscmindia.com

How to develop an effective and realistic baseline forecast that drives better planning What is the right forecasting model for your supply chain How do we deal with different kinds of uncertainty while demand planning and forecasting. How to minimize politically motivated biases and reduce bullwhips in supply chain. How to align all functions to a single S&OP Forecast

Learning Objectives

Matching demand with supply: The Basic framework for demand planning

Supply chain complexities, uncertainty and forecasting

The Forecasting methods: Selection, estimation and assessment

Forecasting Methods and Approaches Understanding Variability in the supply chain. Measuring the Forecast performance:

Understanding Bias and Error Technology in Forecasting

Managing forecast by building an effective Operations and sales planning processes

Dealing with real time demand planning challenges: Simulation exercise

The agenda

Master Class LeadersD r. R ak esh Singh

Chairman of ISCM Pvt. Ltd. Mumbai.

D r. N eeraj H at ek arDirector & Professor

University of Mumbai

D r. R ahul A lt ek arAdvisor to AurionPro –

an IT solutions provider.

Who Should Attend?CMO/CSCO/Demand Planning Professionals/CFO/COO/Head of Sales etc.

Master Class fee INR 20000 taxes

DPF Ad.indd 1 30/06/2016 3:00:34 PM

Humanitarian Logistics


Feeding the Next Gen – A Labor of Love

What are the challenges you face in running a humanitarian supply chain?

1. Demand Estimation: Being a school meal program, Akshaya Patra enjoys the benefit of largely predictable demand as

the number of routes, location of schools, number beneficiaries per school and the menu – all are pre-decided. At the same time, there are instances where sudden demands arise; internal factors like production issues, manpower issues, nutritional

India is a young nation. India is a hungry nation. India seeks knowledge and education. Ensuring our children stay in schools, gaining that edge through education is a tough goal. Akshaya Patra – born out of a vision that no child should go hungry – is today the largest Mid-Day meal scheme in the world – feeding 1.5 million school children and growing. In this issue, we bring you an interview with Vinay N Kumar, Director Operations, The Akshaya Patra Foundation on their supply chain. We hope to see more of their kind.

Vinay N Kumar, Director Operations, The Akshaya Patra Foundation



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norms compliance etc., and external factors like new request by teachers, sudden changes in prescribed menu of MDM department etc.,

● In case of disaster relief kitchens – appropriate demand estimation is a critical success factor to reach out to as many beneficiaries as quickly as possible.

● If demand estimation goes wrong, then there could be situation of stock outs while the meal is needed the most of over stocking leading to storage and quality issues.

2. Road conditions could impact On-time Deliveries: The cooked meal needs to reach the schools on-time by lunch time of schools. And Akshaya Patra operates in areas where the road conditions range from good to worse. So, adequate time needs to be factored in for deliveries keeping a close watch on risks that exist.

Akshay Patra supplies food in largely rural India - how is your supply chain structured?

● Akshaya Patra’s present reach is majorly to primary schools in underprivileged areas in and around urbans like Bangalore, Ahmedabad, Hyderabad, Jaipur, Hubli, Bhubaneshwar and Lucknow. Akshaya Patra also operates centralized kitchens in rural areas like Bellary, Nathdwara, Puri etc.,

● The procurement part of supply chain is kept simple and similar – Rice & Wheat are a grant from the Government, hence Akshaya Patra’s work is limited to picking up the allotted grains from the nearest FCI warehouses / state warehouses. For primary ingredients like Dals & Pulses, Edible Oils, Sugar; depending on the quantity required the procurement is done from millers / producers directly. For rest ingredients like blended

spices, vegetables and dairy, the procurement is done from nearest markets to ensure local taste, to ensure fresh and good quality ingredients.

● Transportation of cooked meal is running against time as shelf life is just 5-6 hours. Hence, to reduce the cook-to-consumption time, Akshaya Patra has standard vehicle designs, stainless steel racks that hold the vessels in place in spite of many jerks. Few vehicles that go on longer routes have insulated containers so that food is still fresh after hours.

What factors do you constantly evaluate to ensure food quality does not suffer during transit?

● Good Warehousing and Manufacturing Practices (GMP) – To ensure safe food ingredients and safe production. During transit too, the vehicles and vessel lids are sealed, food handlers and teachers are adequately trained to unload and serve food.

● ISO 22000:2005 – 13 out of 24 Akshaya Patra kitchens are ISO certified that has an evolved food safety management system.

● Monitoring cooked food temperature before transit and after delivery – Akshaya Patra adopts a mechanism of frequently checking the temperature of cooked food at various stages. In cauldrons, the Rice records 88-92 degree Celsius, while packing at least 82 degree Celsius is ensured so that while consumption it not less than 60 degree Celsius. Hot food, apart from ensuring taste and higher food consumption, also retains quality and nutrition.

India does not have the infrastructure for the farm to fork supply chain – how have you taken care of this?

1. For dry ingredients, though the infrastructure is not up to the standards, the impact can be alleviated through

● selection of right supply partners;

● employing progressive procurement strategy (buying from appropriate locations and at proper timing w.r.to harvests) and

● maintaining adequate inventory levels to counter the supply chain challenges

2. For Fresh ingredients with less shelf life (Vegetables / Dairy)

● Tie up vegetables supply partners in locations/districts where Vegetables are grown and with good road conditions

● Tie up with Dairy plants directly and placing orders ahead of time, to ensure planned production (flavored milk / curd etc.,)

You are a part of the humanitarian supply chain - What benchmarks have you evolved?

There are not many organizations that supply fresh food in the scale and network that we do. Hence, many of our operations are unique; however, we do benchmark a few areas like procurement with large buyers of similar agro products, production with some of the large south Indian temples, mass caterers like Sodexo, Compass etc.; distribution is an area where we are unable to benchmark with comparable players; yet we compare our supply chain with the urban goods supply logistics companies, diaries etc.

How do you use technology in your supply chain? How does it change your supply chain strategy?

All the inward supply chain is recorded on the ERP system and hence is available digitally for all reports, analysis, comparisons and decision support. The outbound supply chain is tracked through GPS for most of our vehicles, coupled with fleet cards for fuel tracking. We are on the verge of digitizing all the outbound supply chain data by way of smart phones/ hand held devices that would be given to field force.

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What key supply chain metrics do you track?

● Spot Market Price Vs Purchase Price for commodities.

● % of CSS Team cost w.r.to the total purchase value.

● % share of orders of premier supply partners, supplier ratings thereof.

● On Time Delivery

● Route distances, average mileage

Improving food freshness at the school is a complex challenge – especially with major climate changes in a region. What innovations have you brought in to ensure this?

We have recently adopted the use of Insulated Vessels in which we send food to schools that are far flung and also to more schools in winters.

How would you define the relationship with your suppliers? What guides this relationship?

● Akshaya Patra views all its suppliers as ‘supply partners’, not just vendors. The stock plans are shared periodically and adequate time and scope is given to all partners to add value to the supply chain.

● Preferred Supply Partners – who are innovative in their business model, who provide steady price advantage and services, who upgrade their scale and technology to suit the increasing demands of Akshaya Patra.

“Zero Waste” is a concept that is gaining currency in supply chain management – what are your efforts on zero waste?

Many of our kitchens work on ‘zero waste’; we have recently adopted biogas plants in many of our kitchens which helps consume all the food waste and produces gas that is used in cooking; the water from our plant is treated using ETP/STP and reused in the kitchens for non-cooking

purposes; in kitchens where we don’t have biogas, we give out the solid food waste towards animal feeding. We do not contribute to the waste of the municipalities.

What is your expansion plans for over the next couple of years? How do you plan for the supply chain in these areas?

We have plans to add 10 kitchens in the next 2 years; the growth is likely to happen in states that we are already present; the supply chain in the new areas will also be serviced from the central team which has been servicing the existing kitchens.

What are the steps towards sustainability you have taken in your supply chains?

We are moving every year closer to the model of buying the raw materials from growers/ processors. We are penetrating the supply chain and moving closer to the growing markets. We are striking long term deals with our suppliers; we are entering into long term partnerships with some of our trusted vendors to ensure sustainable, quality supplies. We are also planning to have a few large regional warehouses of our own to support the supply chain team in procuring large quantities when the markets are favorable.

Your program needs uninterrupted service. How resilient is your supply chain? What parameters do you track to ensure there is no disruption – both raw materials and cooked food?

● For Raw Materials – all the risks are assessed through a thorough risk management exercise. Akshaya Patra secures 14 days of inventory to counter any food shortage that may occur due to disasters. For additional requirements to counter steep price rise and shortages, Akshaya Patra has corpus to block / buy / contract for higher quantities of ingredients from reputed national brands at

designed specifications.

● Akshaya Patra’s supply partners are from across 19 major markets that cater to major part of nation. Hence, though few markets are impacted by shortage, the supplies can still be bought from stand by markets / stand by suppliers.

Looking ahead – what are the major forces that will shape your supply chain?

The major factors that will affect our supply chain are the quality of the goods from the Government Warehouses, strengthening of rupee where the commodities are dependent on imports, strict government policies to curb hoarding, concessions on storage facilities of fresh food, improved agricultural produce in the country. We will also have to watch the fuel prices as the same affects our inbound and outbound supply chain.

There would be a number of inspiring moments – can you share a few?

In 2012 Akshaya Patra celebrated serving of 1st billionth meal, and in 2016 we are celebrating the 2 billion meal mark and 15 glorious years of Akshaya Patra. Recently our Chairman Shri Madhu Pandit Dasa was conferred upon Padma Shri in recognition of the distinguished service rendered by Akshaya Patra for the children of India. In another occasion, The Akshaya Patra Foundation (TAPF) was bestowed upon the Nikkei Asia Prizes, in recognition of its contribution in the field of Economic and Business Innovation. It is the one of the most prestigious awards in Asia.

The Akshaya Patra Foundation has been awarded with the Gold Shield by the Institute of Chartered Accountants of India (ICAI) for Excellence in Financial Reporting for five years in a row from 2008-9 to 2012-13, making it the only NGO to be inducted into the Hall of Fame.

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Feature


Aisle-Master Articulated Electric Forklift Truck for Cold Stores

Problem Statement: Hatsun has to maintain their products in a cold store at -40 C. One of the main operating cost is electricity to run the refrigeration units to cool the cold store. The Hatsun team wanted to minimize the refrigerating cost per pallet, while maintaining the ability to select any 2 pallets in different aisles at the same time. The peak throughput required was 45 pallets per hour. In order to increase labor productivity & equipment uptime, Hatsun wanted to maximize the time the driver could spend in this -40 C cold environment between breaks.

Solution & Advantages: The Nilkamal MMSS (Material Movement & Storage Solution) team carefully studied the application, and teamed up with the Combilift team to offer an Aisle Master (AM20WHE) electric articulated forklift truck with a heated cabin in a narrow aisle pallet storage system.

● Lift height 9050mm, capacity 2000 Kg, and de-rated capacity at height 1235 Kg.

● Aisle-space 2200mm (P/P). Pallet dimension 1200 x 1200mm. With the use of a Normal Reach Truck the Aisle Space required would have been 3200mm. Using our truck allowed the customer to store & cool 22% more pallets with the same operating cost.

● The Heated Cabin allows the driver to comfortably operate the truck in the -40 C environment for 4 continuous hours without breaks. This would have been 30min without the heated cabins. This has increased labor productivity & equipment uptime.

Customer: Hatsun Agro Products Ltd, Tamil Nadu,

Industry: Private Dairy

Products: Milk, Ghee, Butter, Curd, Paneer, Buttermilk, Dairy Whitener, Skimmed Milk Powder, Ice Cream.

This Case study is provided by Nilkamal on Aisle-Master for Cold Storage

Advertorial


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Feature


For more Information: [email protected] | Toll Free-1800 1219 115

*All application images are for representation purpose only

● Heated Bar Code scanning window. The glass of the cabin at -40 deg C gets covered with ice which obstructs the laser from reading the bar-code. The heated window provided in the Aisle Master truck prevents ice-buildup, and allows the laser to read the designated barcode without the driver having to step out in the cold.

● Battery capacity: (i) The discharge rate of a battery is steep at cold temperatures. The Nilkamal team carefully studied this application, and teamed up with Combilift to offer a 930 Ah high-capacity battery. The higher thermal mass of this larger battery through the 4 hours of continuous operation prevents quick discharge. (ii) To further extend battery life, we offered low-power consuming LED lights for visibility & safety. Both these options increase the time between battery changes & re-charges, extend the life of the battery, & improve equipment & worker productivity.

● The battery is quickly & easily changed at the rear of the Aisle Master with a hand-pallet truck. This increases equipment uptime & productivity.

AdvertorialAdvertorial


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Human Resources


The business sense behind health and safety

No one bats an eyelid when terms like “logistics” and “safety” are lobbed in the same sentence. For decades, there have been certain members of our supply chain and logistics workforce that have been identified as more prone to risk than others. Examples include long-haul, truck drivers, shift workers who have to adapt to physiological disruptions and now FIFO workers whose alienation from home and family, and changing routine increase their susceptibility.

Due to the increasing prevalence of a variety of illnesses from Depression to Diabetes Mellitus in the larger workplace, there is a need to own, grow, and develop the awareness of health and wellbeing across the entire industry.

Furthermore, there is a need to recognise that any workforce can be susceptible to illness and that there is a responsibility to own this through awareness and implementation of health interventions by employers across industries, geographic boundaries, and occupational segmentations.

Though conditions at work have immeasurably improved over the last century, factors such as the increased pace of change, the growth in an aging working population and the extension of geographic boundaries and technology in our daily lives have challenged us all.

Through simple measures and reasonable adjustments, most employers can circumvent the pitfalls

A healthy employee makes for better performance. Everyone understands this. There are two aspects to health and safety in work place – the role of the employee and that of the employer. Health and safety are no more nice to haves – they are vital for business. As competition heats up and customers demand instant gratification, organizations where health and safety standards are implemented will walk away with the business. Darryl Judd, COO Logistics Executive writes on the importance of health and safety in the workplace, and how they make business sense.

Darryl Judd, COO, Logistics Executive

How Occupational Health and Safety is starting to occupy our thinking

Human Resources

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Human Resources


and capitalize instead on the benefits that these change factors can bring to their workplaces.

It all starts with awareness.

If we take the example of an aging population, it is clear that an older workforce will probably have a greater need for health interventions. The benefits of diversity and experience that an aged population offers is highly sort after and hugely enriching for the workforce. Simple measures in the workplace, such as health surveillance initiatives present

little cost and have enormous benefit in ensuring these members of the workforce remain healthy and active. Measures could include heart and diabetes tests that are aimed more towards keeping people healthy and decreasing the likelihood of illness occurring in the first place.

Health is not just an individual but a common responsibility and something we all need to share and illness needs to be shared. Some afflictions like Depression are very common, yet highly stigmatised. In fact, depression has a higher incident rate amongst males who are supposed to be the highest achievers in our workplace. Yet it is stigmatised as “not a real illness” and “a sign of weakness.”

The Anxiety Disorders Association of America (ADAA) 2006 Stress & Anxiety Disorders Survey found that employees said that these issues interfered with their relationships

with people at work. Employees stated that stress and anxiety most often impacted their workplace performance (56 percent) relationship with coworkers and peers (51 percent), quality of work (50 percent) and relationships with superiors (43 percent). Yet due to the fear of stigma, mental

health problems are not addressed and therefore exist as a negative undercurrent in most workplaces that lead to high workplace absenteeism and attrition rates.

It is interesting to note that even though health issues resulting from aging and mental health seem very different, they can both be effectively managed in the workforce, using similar strategies.

Bottom line is good health management is good for business performance, helps avoid the costs

involved, lessens the impact on service delivery, and the consequences on individuals and teams. This approach is holistic and usually not costly. It includes:

● Sustained leadership from management

● A proactive occupational health management and promotion

● Training, awareness and support for staff

● A close understanding of workforce vulnerabilities through data and systems that enable managers to target potential problems.

Employers can also seek the help of governments in tackling these issues as most governments around the world now offer resources with an emphasis on promoting health improvement and wellbeing strategies in the workplace that build on the Bangkok Declaration (World Health Organisation, 2005). This advocated promotion of health through empowering individuals to manage their own health through the workplace.

In conclusion, it cannot be overstated that improvement starts through awareness and acceptance. Simple measures can be put in place that significantly improve productivity and workplace morale. If leaders’ value mental health and appropriate resources are available in the workplace, there are proven, real benefits to business. Policies, Practices, training and programs that help employers identify risks and encourage employees to speak up and ask for help, will greatly lower the incidence of mental health conditions and increase productivity.

Creating a healthy workplace is the best way to position ourselves, our staff, managers, and our colleagues to better meet change and deliver in all situations and succeed, now and into the future.

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LSP Focus

42 Supply Chain Management Professional June 201642 Supply Chain Management ProfessionalJune 2016

LSP Focus

Re-Usable Asset Pooling Leading the Change

India is notorious for being unique – we believe that we are different. This is evident in every aspect of our business. LEAP is a home grown firm focusing on an area of business that is below the line for most users – pallets and FLCs. Pooling solutions are required by any company interested in keeping their costs low, to concentrate on their core business model, to move from Capex to Opex model, to reduce manpower at ground level and for being fast and accurate. SCMPro caught up with Sunu Matthew, MD, Leap India Pvt. Ltd for a chat on the future of asset pooling.

Sunu Mathew, Managing Director, LEAP India Pvt. Ltd.

LSP Focus


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LSP Focus


LSP Focus


What are the trends in re-usable packing?

Across the world, re-usable packing is the norm. Some university researches show the impact of re-usable assets on sustainability – including carbon footprint, the acres of forest it will save, and the benefits of pooling. Across the developed world asset pooling is an accepted fact. Fortunately, people who travel to Europe have seen this concept working. In India SIAM is actively promoting asset pooling. In India, even small firms are aware of the benefits of pooling. The OEM has to prevail on their suppliers to embrace asset pooling. More so when every large firm is advocating sustainable profits. Pooling is catching up in India, and I think we will skip two or three steps as we adopt pooling.

The western world embraced asset pooling 50 to 60 years back. By that yardstick, we are late entrants. A large part of the blame goes to the regulatory frameworks in India. It took a decade for Europe to realize the advantages of pooling. I believe that post implementation of GST, in three to four years’ time people will understand the benefits of pooling. And if we are talking of five legs of pooling in one cycle time, at least two or three players – 60 percent of the people will convert into pooling. For example, Metro Cash and Carry may be ready for palletized operations, but the rest of industry still wants to deal in eaches. If there is a combination of GST and FDI in modern multi brand retail, the scene will change dramatically. There will be no more supply of each – it will be pallet in and pallet out.

If there are business benefits, why are not Indian firms pushing for Palletization?

Most Indian FMCG firms like P&G, Nestle are today using palletization. But there are sections of their operations which are not. In India, we are fighting ignorance. Firms are not aware of the benefits of palletization.

For palletization to succeed firms will have to employ skilled manpower. You need good floor, racking systems and the lot. There has to be a mindset change for firms to use palletization, instead of hoisting a box on a person’s shoulder and manually loading on to a truck.

Who could be an evangelist for palletization?

MNCs will be the best evangelists for palletization. Palletization has a number of advantages – improved turnaround time, lesser manpower, no pilferage, and no damages. It is a long battle. We converted some of the biggest names one plant at a time, and today they are 100 percent palletized. The retailer in India is not ready. The factory to DC operations of most firms are palletized. Palletization also means standardization.

Worldwide, first packing is developed, and then the product. In India and South East Asia, it is the other way around – we develop the product and then the packaging. Understanding this fact, we realize that one pallet will not work for India - we will need two or three types. We will need one for whitegoods, one for drums and buckets, and one pallet – a rectangular one for FMCG. We cannot have just one pallet for use across the country.

How do you manage to track and trace your assets?

Pallets are essentially wooden frames. Without ant embedded intelligence. We have a simple process to track or pallets – we have

an in-house developed solution MY Leap which tracks the pallets on a docket open, and docket close metric. From each location the pallet moves, we capture in our system. At the end of the quarter, we do a physical inventory. This will give us a clear view of any missing pallets. Any discrepancy will be to the account of the transporter. Both the sending and receiving locations have to enter the movement in My Leap. It is mandatory that they use the pallet only on routes registered in our system. If they send it to another location, it will be treated as lost pallet. It is the customers’ responsibility to bring the lost asset back into the system.

The customer does not have to send the pallets back to us. He has to store it properly. Once around 120 pallets have accumulated, the customer sends us a trigger and we get it picked up.

Leap has transitioned to a solutions firm – pallet, crates, FLC is a byproduct of our solution. Our aim is to build an ecosystem of service around our offerings, which will help our customers. We believe that if our supply chains grow, palletization will automatically grow. We are willing to help our customers in any of their pain areas. If the customer finds a solution, he is bound to remember our role and come to us when he is ready for palletization. We believe in leveraging our knowledge for the betterment of the industry. For example, some of the biggest plants in Sanand were finding it difficult to find a cleaning partner. We introduced them to Cleaning Roots – and problem solved! We are trying to create an ecosystem – from cleaning, to forklifts to dock leveler to flooring – we will have a list of quality firms whom the customer can employ.

Most Indian FMCG �rms like P&G, Nestle are today using palletization. But there are sections of their operations which are not.

MNCs will be the best evangelists for palletization.

LSP Focus


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Event


The premier edition of India Logistics Expo 2016 wrapped up on 21st May with a successful story to write. The 3-day exhibition was held on 19-20-21 May at Bombay Exhibition Centre, Goregaon (E), Mumbai.

With over 75 exhibitors from across the logistics sector supplier spectrum, the exposition attendees included 2,865 visitors from various end user industries including the ever-growing e-commerce channels which is on a constant lookout for state of the art logistics solutions.

Two world class conferences, India Supply Chain Summit and India Multimodal Logistics Summit were co-located with the exhibition were attended by 200 participants and addressed by eminent speakers from India, Malaysia, China, UAE, USA, Jordan. The conferences saw in depth discussions on topics like Algorithmic Supply Chains, Bimodal Logistics, Adaptive Responsive Networks etc – topics which were of great interest to the Indian industry but not spoken about at prominent events in the country. An interactive mix of panel discussions, case studies added to the interest of delegates.

Sukhjinder Singh, Founder & CEO of Infinity Expo said the decision of launching a comprehensive logistics event in Mumbai was a strategy that had delivered well and all stakeholders were happy with the outcome. He further added “A highly qualified advisory board and strategic partners like CILT India, ISCEA (USA), SCLG (UAE), Frost & Sullivan put in a lot of effort and support in making this

event a success that it is. I would personally like to thank Shri Shanti Narain, Chairman, CILT, for spearheading the Multimodal Logistics and bringing together the participants and enthusiasts and creating a complete educational environment.”

Shri Shanti Narain in his comment on the show performance mentioned, “I am really happy that we chose to be a part of India Logistics Show 2016. It was not only a knowledge driven gathering but also a connected platform for all logistics family. We wish the team all the best and would urge them to keep organizing such events in the future.”

Group Chairman and Founder at SCLG, Shashi Shekhar, also appreciated the exposition and said, “This has been a pleasure re-connecting in logistics and supply chain space in India during the 3-day conference-cum-exhibition in Mumbai. Congratulations to Sukhjinder and the team in delivery of a good show. I shall continue supporting this conference and exhibition year-on-year on behalf of SCLG.” This indeed is a great motivator for the entire India Logistics Expo team.

Encouraged by the response to the 2016 edition, Infinity Expo has announced the dates for the next edition to be held on 11-12-13 April, 2017 at Bombay Exhibition Center. The next edition is expected to be bigger and better taking forward the success stories and learnings from the current edition.

Event

India Logistics Expo 2016: A Successful Event


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Service Provider Service Provider Service Provider Logistics

Summit & Awards 2016Summit & Awards 2016Summit & Awards 2016Summit & Awards 2016Summit & Awards 2016Summit & Awards 201625 November 2016, Mumbai

An elite gathering of LSP community to celebrate their achievements

SCMPro is back with its 2nd Logistics Service Providers Awards 2016!This 2nd SCMPro Logistics Service Provider Awards 2016 aims to celebrate the success of Indian Logistic Sector players and in the process reward their strategy, performance and goals. It also aims to inspire comprehensive

exchange of ideas and best practices in India and to identify models for service excellence. The SCMPro LSP Awards will be a de�ning moment in the LSP sector-recognizing the real achievements of the year.

Award Categories

[email protected], Ridhi Sidhi Complex, Prem Nagar, Goregaon (W), Mumbai.-400 062.

+91 9619709054 +91 22 28742227 +91 22 28747808 +91 22 28746757

www.lsp-awards.com

Presents

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INVITING

NOMINATIONS

www.lsp-awards.com

1. Women in Logistics2. Young Supply Chain Professional3. Lifetime Contribution4. Innovative eCom Service Provider5. Best Express Company6. Best Retail LSP company 7. Best Transportation8. Best Freight Forwarders9. Best Contract Logistics 10. Best Multi-modal logistics11. Best Project Cargo Of the Year12. Promise of the Future (emerging Service Providers)13. Best Reverse Logistics Service Provider14. Innovative SCM IT Provider of the year

15. Best Use of Technology16. Best Warehouse in Multi Product17. Best Cold Chain Warehouse18. Best Warehouse for Agri Commodity19. Best Material Handling Equipment Manufacturer20. Best Consulting Services in Supply Chain21. Best LSP to work with22. Supply Chain Performance Improvement 23. Innovative supply chain management24. CSR in Supply Chain25. Best Material Handling Service Provider26. Best Supply Chain Practices-User27. Best Automated Warehouse Systems28. Best Humanitarian Logistics

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SCPC


Customer Service in Modern Supply chain

The second edition of Supply Chain Practioners Council (SCPC) forum was held on the 6th of May 2016 under the joint aegis of Johnson & Johnson and Godrej Consumer Products Ltd. SCPC aims to bring together leading Supply Chain practitioners from across industries to share best practices and create an environment to propel India towards global supply chain leadership and Supply Chain excellence. We bring you the excerpts from a panel discussion on the importance of customer service in supply chains.

Umesh Madhyan (Head, Infra & Logistics, Coca Cola)Somnath Das (Head, SC Planning & Logistics, Marico)Dr. Ranjan Banerjee (Dean, SP Jain)Devadas Nair (Head SC– Shoppers Stop)Vikram Mansukhani (Head BD & Corp. Services, DIESL)Panel Moderator - Samir Kolte (Associate Director, KPMG)

SCPC

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SCPC


The function of a supply chain is to fulfill the demand created by marketing. The new age customer expects demand fulfillment at a time convenient to her. Thanks to the digital revolution and rising customer expectations, supply chains will need to reboot. Supply chains will see a range of technology aided transformation - from 3-D printing to drones. A panel discussion at the second Supply Chain Leadership Council meeting addressed many of the challenges and explored the potential of these changes on future supply chains.

Samir Kolte, (Associate Director, KPMG), the moderator of the panel, outlined his vision of the future of supply chain – where demand will be fulfilled at the consumers convenience through developments like drones and 3D printing. For example, just as rain clouds gather overhead, the consumer will order an umbrella through an m-commerce site, and have it delivered within minutes by a drone, just before the first drops of rain fall. A compelling case. Another issue is using the full potential of 3PL service providers. Samir suggested that users should go for 3PL service for a better customer service rather than mere cost reduction.

Umesh Madhyan started with his experience in heading Infrastructure and Logistics at Coca Cola Company. He discussed on truck Turnaround Time (TAT) and shared his work in designing and implementing man-less truck loading solution in India which can load a 16 Ton truck in 3 Minutes. He remarked that stock visibility at Dealer level helps in immediate reaction for replenishments.

Devadas Nair, Head, Supply Chain, Shopper’s Stop who talked about keeping Customer objective in place, having the right assortment, right brand mix, visible price tags and timely delivery of stocks to stores. He highlighted that customers have become taller than the retailer,

because of the information present at their disposal. He also shared about his latest developments like Magic Mirror and Mobile cash posts in Shopper’s Stop

Mr Vikram Mansukhani (Head BD & Corporate Service, DIESL) who handles the backbone of front end service as a 3PL Partner brought a different perspective to the supply chain. He talked about the importance of identifying the right customer and potential market segments. As a 3PL Service, he talked about differentiating if the client company is outsourcing their operation or their pain points.

Mr. Ranjan Banerjee (Dean, SP Jain) touched on some thought provoking points with great examples. A Supply chain practitioner has to think on the lines of how to move one level down in the supply chain towards a customer. He remarked that the matrices that we use to evaluate customers are purely internal and might be a part of the problem. He hilariously stated that there are no supply chain problems or marketing problems, they are just business problems. The demarcation is for purely academic purpose. He also talked about IOT and how important it is to assess the business need before investing in it.

Samir reflected upon another example in the automobile industry

with regards to IOT and maintenance alerts for the driver.

Mr Somnath Das (Head, Supply Planning & Logistics, Marico) addressed the significance of having direct interfaces with the final customer and proactive involvement to improve the supply chain. For the same, Marico has invested a lot on IT and systems. He said it’s important to maintain focus on the consumer while building the brand franchisee. With evolving supply chain, urban parameters are being used to evaluate rural markets. He spoke that it is important to micro track the supply chain rather than micromanage.

One of the questions from the audience directed to Mr. Umesh on the impact of service levels in the supply chain. He replied that coke has a service level of 94%, primarily through process engineering and scientifically defining inventory levels. Their target is 98%, but considering the seasonality of the product, such improvements come under significant cost.

During the discussion, Ranjan also criticized that there has not been effective collaboration with the academia in terms of research activities. Being a CEO himself, he highlighted the importance of the next generation CEOs to have direct un-orchestrated reach to the customer.

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SCM Updates


DB Schenker opens logistics center in Bhiwandi, Mumbai, IndiaSchenker India Pvt. Ltd. a part of DB Schenker, the transport, and logistics division of the Euro 40.4 billion Deutsche Bahn Group, has announced the opening of its third Schenker Logistics Centre (SLC) in Bhiwandi. The SLC is one of the largest logistic centers in the area, Spread over 200,000 (approx.) sq. ft., and would be providing integrated logistics solution to businesses involved in baby care, mother care, fire protection, camera &accessories and bathroom fittings.

Strategically located at a distance of 3 KM from NH-3. Mumbai – Nasik Highway, 60 KM from JNPT, and 60 KM from NH-8, Mumbai –Ahmedabad Highway, the logistics center comes with material handling equipments like - Reach trucks, Stacker and Forklifts and features warehouse height (side) -30ft, (center)-38 ft., Turbo Ventilators and louvers, and three phase electricity connectivity. Proposed dedicated freight corridor is just 0.5 km away from the new warehouse which will start from JNPT port and end at the northern state of Uttar Pradesh covering through the states of through Gujarat, Rajasthan, and Haryana.

Commenting on the development, Mr. Oliver Bohm, CEO, Schenker India Pvt. Ltd. said, “The western industrial corridor is one of the busiest in India with a high concentration of existing and upcoming manufacturing units. This creates an immediate demand for effective logistics and warehousing solutions. Our new Schenker Logistics Centre (SLC) in Bhiwandi, with its strategic location, is well placed to cater to the logistics requirements of customers in the region.”

Toshiba Showcases Industry-Leading Postal and Parcel Automation System SolutionsToshiba Corporation (TOKYO: 6502) today announced that it will bring its postal and parcel automation system solutions to Post Expo 2016 HONG KONG + THE PARCEL SHOW from May 24-26, the world’s largest exhibition for the postal and parcel services industry business. Toshiba’s participation will support its strategy to expand its postal and logistics automation systems business in Asia and Oceania.

Toshiba developed the world’s first automated mail processing system in 1967, and since then has provided more than 1,500 postal solutions around the world, in 20 countries including Canada, Serbia, Brazil, Singapore and Russia. The company’s latest system processes 42,000 letters an hour, and combines a high read accuracy rate with low noise levels, low power consumption, and low life-cycle costs. In 2015, these performance advantages helped Toshiba to win contracts from Australia Post and Taiwan’s Chunghwa Post with a combined value of over US$60 million.

“Our global experience and technological advantages support us in reaching out to customers across Asia and Oceania,” said Mr. Sadao Sekine, Vice President of Toshiba’s Infrastructure Systems & Solution Company. Throughout Asia-Pacific, parcel delivery has seen enormous growth with the emergence of a growing middle class and the boom in e-commerce. Toshiba is keenly aware of the dramatic changes and demand increases that are reshaping postal and parcel delivery services and logistics, and is expanding the solutions it offers in this area in markets around the world. Mr. Sekine emphasizes Toshiba’s commitment to this flexible approach: “Our postal solutions are not limited to letters. We can meet our clients’ needs with logistics systems, and with systems upgrades and total solutions from equipment supply through to operation.”

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FEATURE Keeping the Guns Booming

Defense Supply Chains Paul Kettle

34HUMAN RESOURCES

Performance Management – Keeping it flexible - Niharika Davar 40

OPINION Building an Organization with a Soul Sandeep Padoshi

44

April 2016 | Volume 1- No.12 | Rs.200


MANAGEMENT

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LEAD STORY

Impact of Macro-

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Trends on Supply Chains

12

LEAD STORY

Women in supply

chain – Breaking the

fortress

18

LEAD STORY

Smart Warehousing -

Design Elements of

a Warehouse in

a Networked World

20

March 2016 | Volume 1- No.11 | Rs.200


MANAGEMENT

SUPPLY CHAIN

Summit 2016

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SCMPro, India’s only Enterprise monthly magazine for Supply Chain Professionals from Service Users and Enterprise Service Providers. The magazine contains specialist articles, news and information designed to update the readers on the developments in supply chain industry. Specialized articles are contributed by the Industry leaders and Academicians. Besides, there are other updates published to keep the readers keep pace with the Industry. Published every month, the magazine is distributed to the readers through courier. Currently the print copy of the issue is available only for readers based in India. Cover Price Rs.200/-

DEMAND PLANNING Demand Planning & Forecasting: The three essential pillars - Dr. Rakesh Singh

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SCM Updates


Adani Logistics chooses Kales Terminal Operations System for automating its CFS- ICD and Container Rail operationsIn their continual efforts to drive efficiency, visibility, and cost saving for the customer, Adani Logistics Limited (ALL) has embarked on a mission to automate its operations. Hence, ALL has selected Kale Logistics as its preferred partner to develop a terminal operating system (TOS). This would encompass ALL’s entire range of operations including, CFS & ICD, Container Train Operations, Coil & Auto Logistics, and other allied processes.

Adani Logistics is successfully running container trains operations pan India with ICD and CFS facilities at Patli, Kishangadh, Mundra & Hazira. ALL has plans to grow with facilities at pan India level keeping in line with the parent Adani Ports and Special Economic Zone. Their growing business demand had resulted in extensive manual intervention which hampered their goal of meeting customer expectations. ALL believes investing in tightly integrated assets to reduce bottlenecks in the overall logistics value chain thereby benefiting its customers on multiple dimensions, especially time, visibility, and cost. To enable these goals, a robust IT operating system providing scalability, control, key reports & management dashboards as well as the ability to seamlessly interface with other systems and devices is crucial.

This system requirement arose from the business process transformation that is happening across the Adani Group. The BRD document developed by ALL captured in detail the existing as well as to be processes, incorporating best practices of the industry. Using BRD as the core requirement document ALL embarked on an 18 months’ evaluation exercise to choose a functionally rich and scalable TOS, which could advance the business needs and facilitate business growth.

Speaking on the occasion, Mr. Anil Radhakrishnan – CEO, Adani Logistics said, “We selected Kale’s TOS for its extensive functionalities suite for a global organization.

We were looking for a partner who had long term vision, had done similar sized projects, and knew application of IT to realize transformational effect on Business. Kale displayed the best understanding of our requirements and has one of the widest portfolios of proven Logistics IT solutions. We believe that their automation solution will bring in a lot of efficiency, cost reductions, and control.”

Mr. Ashwani Kumar Sharma- Head Information and Technology, Adani Logistics said, “At Adani we believe in staying ahead of the market demands, and to meet these goals, technology would continue to play a critical role in our business. Since this is a long term investment for our business, we had done a detailed ‘Business Requirement Document’ from our side. The new system meets all these requirements and provides data reservoir at both management & operational levels for faster decision making.”

Vamaship to spread smiles through ‘The BVC Do’ initiativeWhen E-Commerce oriented startups are struggling to serve their newly acquired clientele right, Vamaship, world’s first integrated logistics platform is fulfilling the brand’s social responsibility through a heartwarming initiative, ‘The BVC DO Initiative’. In an attempt to reach out to the underprivileged children of the country and aid them with clothing and essential stationery, Vamaship is lending their full support as the logistics partner.

As a part of Vamaship’s CSR strategy, they will ship smiles and love through this kind initiative to over 15000 kids in orphanages across the country. The ‘BVC DO initiative’ invited corporates and officials to contribute clothes, books and stationery at BVC offices across 29 cities including Mumbai from 2nd May onwards for a week, which will be shipped to orphanages in 25 states with the shipping expertise of Vamaship. They expect to distribute thousands of books, clothes weighing over 4 tons.

To empower the mission and vision of BVC Foundation, they are initiating this nationwide drive which would gather make a difference to thousands of less fortunate children.

“Team Vamaship is delighted to partner with BVC Foundation for the DO Initiative and in making a difference to over 15,000 kids. We will continue to partner with NGOs in different initiatives, not only because of our corporate responsibility but because of our strong belief in helping each stakeholder”, Mr. Bhavik Chinai, CEO of Vamaship said.”, Mr. Bhavik Chinai, CEO of Vamaship said.

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Supply Chain Management Professional - June 2016 Issue

Leadership & Management

Transcript of Supply Chain Management Professional - June 2016 Issue