Sustaining European Competitiveness in the Emerging Markets : Key Directions in

Supply Chains

By Makarand Inamdar

Reliance Industries Limited India

Strengths of the European Oil & Gas and Petrochemical Sectors

Time Industry / Economy Life Cycle

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BRIC Countries

Europe/Far East /USA

Institutions

Health & Primary Education Higher Education & Training

Macroeconomic Environment

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Labo

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Infra

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Mar

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Innate Ability Pillars

Business Enabler Pillars

Business Level Pillars

Economy Level Pillars

• Where does Europe stands today? Europe is at a high point of market maturity where:

Processes are Reliable – Same standards of quality delivered over a period

Automation is High – Very little manual intervention Standardization is Optimum –Right from truck on to

storage warehouse (at manufacturing and customer’ end) there is one way of doing things

Infrastructure is Superior (Average truck speeds, toll collection is much better

Urban Planning is Complete (The overall master-plan is evolved and implemented)

Strengths of the European Oil & Gas and Petrochemical Sectors

A paint brush insight into the emerging markets

The situation in the emerging markets is just the mirror image compared to that of European countries:

Urban Planning Un-evolved

Infrastructure Not the best

Automation Labor Intensive

Standardization Limited

A paint brush insight into the emerging markets

A paint brush insight into the emerging markets

Challenges in China (AmCham Shanghai 2011-2012 China Business Report). 315 US-based companies with operations in China participated in it. The findings are % that answered that these challenges ‘seriously hinder’ their business.

A paint brush insight into the emerging markets

A recent 2012 study of World Bank shows how India ranks amongst 183 countries as far as

doing business is concerned

A paint brush insight into the emerging markets

Topic Ranking 2012

Ranking 2011

Starting a business 166 No change

Dealing with Construction Permits 181 No change

Getting Electricity 98 109

Getting Credit 40 37

Protecting Investors 46 44

Paying Taxes 147 165

Enforcing Contracts 182 No change

Resolving Insolvency 128 140

Status of business and supply chain operations in the Oil & Gas and Petrochemical sectors in the

emerging markets

Fragmented Supply Chain

Organized Retail is

fragmented

Distribution by Indian

Companies is fragmented

Inventories/ Wastes

increase

Time Response to

Market Needs increases

Disturbance in Supply Chain

All round fractured

Supply Chain

Matrix of opportunities and gaps that can be filled

Right size solution by European companies to typical needs of Indian markets

Mix and match of best practices in European companies to be implemented

There is no readymade cut & paste solution applicable (eg Rubber trade, Varying truck bodies unlike European countries)

What can be done – the forward path

Transmit Transplant Transform

What can be done – the forward path

Look At your Industry Vertical e.g. French Co. TOTAL Option 1 : Replicate French Model ‘as-is’ in

India Option 2 : Understand the actual needs of

‘end-of-the-line’ customer and fine tune your practices to suit their requirements

Option 3 : Drive a change through local industry associations viz. CII, FICCI etc. and then bring transformation