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Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
Logistics Xpress Vol. 4
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Logistics Xpress Vol. 4

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Logistics-Supply Chain

Logistics-Supply Chain

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  • 1. Page 1 LOGISTICS XPRESS
  • 2. LOGISTICS XPRESS Advisory Body: Dr. S.J. Chopra (Chancellor) Logistics Xpress is published quarterly. All Editorial correspondence and papers for publication should be addressed to the Chief Dr. Parag Diwan (Vice Chancellor) Dr.G.C.Tewari (Pro-Vice Chancellor) Editor, Logistikas Society, UPES, Energy Acres, Bidholi, Dehradun. The submitted papers will be reviewed by members of the editorial Utpal Ghosh, (Campus Director) Dr. Anirban Sengupta(Director , CMES) board and external references. Views expressed in the articles are those of respective authors. Retd. General (PVSM) Neither e-Logistics Xpress nor Logistikas S.P.S. Narang (Asso. Dean, CMES) Society, UPES, Dehradun will accept any responsibility for views expressed by the author(s). All copyrights are reserved by Dr. Atul Razdan (Asst. Dean, CMES) Rakesh Mehrotra respective authors. Unless authorized, no part of the material published in e-Logistics Xpress may be reproduced or stored in retrieval system or used for commercial and other purposes. All rights reserved. (Former MD, CONCOR) Arun Sharma (Group Manager-Supply Chain Copyright ©2012 by Logistikas Society. Editorial/Subscription Address: Chief Editor, Logistikas Society, Operations, Apollo Tyres) J.V.B Sastry (Sr. VP Logistics, ACC) University Petroleum & Energy Studies, Energy Acres, Bidholi Pradeep Dubey Dehradun-248 007 (GM,SNOWMAN) Page 2 Email: nanand@ddn.upes.ac.in
  • 3. LOGISTICS XPRESS Vivek Tripathi Mr. Loveraj Takru, (Manager-HR,Jindal Steel) (Industry Fellow-LSCM) Prof. Janat Shah Dr. Venkatasaiga Rao (IIM-B) (Industry Fellow-LSCM) Kanakendu Chatterjee Capt. Y. Bhattacharya (Sr. Supply Chain Consultant) (Industry Fellow-PSM) Yuvraj Sharma Managing Editor: (Regional Director Dr. K.K. Pandey, Asst. Professor, CMES North, UT Worldwide) Chief Editor: Ravinder Singh Dr. Neeraj Anand, HOD- LSCM, CMES (Dy. Manager-Mahindra Group) Publisher: Prof. K.V. Mohana Rao UPES, Dehradun (HOD- PSM & AVM) Administrative Support: Prof. T.S. Marwah, Brig. S.S. Dhillon Page 3 (Industry Fellow-IB)
  • 4. LOGISTICS XPRESS EDITORIAL COMMITTEE: Mr. Saurabh Tiwari (Lecturer) Mr. Vimal Prasad Mathur ( Asstt professor, selection Grade) Ms. Neha Grover, Doctoral Research Fellow Cover Design Pratham Walia Design and Layout Creative team Core Committee Gursharan Singh Gurleen Singh Kartikeya Sharma Don Sebastian Page 4 Pratham Walia
  • 5. LOGISTICS XPRESS FROM THE EDITOR’S DESK I feel elated in launching the current issue VOLUME IV of our in house magazine LOGISTICS XPRESS. We have incorporated the current news and the best practices that are followed in the logistics world . As expected, the Budget was a damp squib, and the deficit that had shot up was brought down a little. The stance of the government is quite clear: all the talk about intent to rein in fuel subsidies was negated by just one sentence in the Fiscal Policy Strategy Statement, "With respect to rationalisation of petroleum subsidy, government has already decontrolled the pricing of petrol." Dr. Neeraj Anand (HOD - MBA LSCM) nanand.ddn@upes.ac.in 5 This issue includes a report on the “Future of 4PL” which has been presented by our students Sagar Relan , Gurleen Singh, Gursharan Singh, Niharika Singh and Nishi Jaiswal in logistics talent hunt 2012 conducted by T2P Consultants on March 25, 2012 in which our students has secured first position , I congratulate them from the bottom of my heart. ____________________________________ Page The fact that the petrol prices have not changed in Delhi since November, even as the crude basket price rises, speaks for itself. To take another example, for all the talk about encouraging foreign investment, the turnaround in tax laws has stunned the markets.
  • 6. LOGISTICS XPRESS FUTURE OF 4PL IN INDIA FUTURE OF 4PL IN INDIA by Gursharan Singh INDIAN ECONOMY FROM THE WORLD‟S PROSPECTIVE Many investors living today have never really had to see tough financial times. It is difficult to meet someone who was old enough during the Great Depression to recall how tough that was,especially on investors. Although there have been recessions since but none of the was so disturbing magnitude as the current one. During the recession India‟s industrial production rose by 2.6 percent 2008-09 down from 8.5 percent in 2007-08 when the rest of the world was going through a bad phase.Manufacturing output also dropped by 1.4 percent year on year to Rs.1.5 trillion in January-March 2009 after rising by just 0.9 percent in 2008.On the other hand the rise in industrial production by 1.6 percent was witnessed. India‟s combined fiscal deficit of the centre and the states at close to 10 percent of GDP in 2008-09 is amongst the highest in the world. INDIAN ECONOMY – THE WAY AHEAD India‟s relatively less dependence on merchandise exports, its smooth functioning financial system and comfortable finanacial Niharika Singh Nishi Jaiswal reserves help In recovery from the slowdown. The domestic demand has held up relatively well ,there are signs that worst might not be over yet. Forecasts by organization for Economic Co-operation and development (OECD) and Asian Development Bank are pessimistic about the growth. OECD projects a further slowdown of 5.9 percent in 2009 as a whole. The ADB also forecasts that growth will again slow this year to 5 percent. Looking ahead ,Ce ntre for Monitoring Indian Economy will bounce back to 9 percent growth by 2011,when impact of poor export demand would overcome. 6 Gurleen Singh Page Sagar Relan
  • 7. LOGISTICS XPRESS INDIA AS A GLOBAL MANUFACTURING HUB Demand for FMCG and Electronic products in India is growing at a very high rate. Multinational companies are showing interest to set up their world class manufacturing in India to cater to the needs of domestic and export market as well. The Indian automotive industry is one of the major automobile manufacturing hub. Since the deregulation and opening up of the automotive industry, the industry has witnessed tremendous changes and experienced a great boost. Jewellery, gems and IT industry are also seeing an upward swing. Undoubtly India is well poised to emerge as a global manufacturing hub. 13% of the GDP out of Rs. 31297 billion and is expected to be more than 5400 billion by 2015, which is comparatively higher than other developed countries. India is among one of the world‟s leading producer of horticulture products. To save fruits and vegetable products from rotting up before reaching in the market CONCOR came forward with moving cold chain logistics and is developing a cold supply chain business in the global food market. It has increased the share of processed food from 6% to 20% in the country. The air and marine transport sector has contribution around 0.2 per cent of the country‟s GDP, due to cost reduction and improvement in organizational efficiency the transport sector‟s contribution to the GDP has been growing over the last couple of years. Many Indian companies are realizing the importance of supply chain network due to which there is an uptrend in the requirement of 3PL service provider. As a result there is a prediction of growth in 3PL solution at a CAGR of 20 per cent in Page LOGISTICS INDUSTRY OVERVIEW AND ITS CONTRIBUTION IN COUNTRY’S GDP Globalization, consolidation, technology advancement and outsourcing have led a remarkable growth of the Indian economy especially in automotive, pharmacy, manufacturing, retail and FMCG sector. Logistics spend in India is approximately 7 RELATIONSHIP BETWEEN ECONOMIC GROWTH AND LOGISTICS Export led growth has been a crucial component of sustainable economic growth. There are many enablers of export oriented economic growth who also facilitate economic environment,establishing export oriented zones like SEZs. The most important enabler is the improvement in transportation infrastructure, telecommunication and power which in turn accelerates domestic demand.
  • 8. Key growth drivers in logistics sectors are:  Streamlining of indirect tax structure  Increased demand of 3PL services  Recognition of logistics management as a strategic tool  Globalization of manufacturing systems  Infusion of qualified work force  Investments in transportation infrastructure The Indian railways has realized the necessity to improve the infrastructure provide better service. This includes laying of optic fiber along railway tracks, utilizing land and airspace for other commercial purposes. The plan to develop Logistics Parks or hubs has the potential to streamline and optimize the supply chain and reduce the costs. Currently around 80% of the goods in India move by road. It represent thousands of small customs brokers and clearing & forwarding agents, who cater to local cargo requirements, the railways have to essentially devise plans to divert this traffic to the rail. Transport sector‟s contribution to India‟s GDP is estimated to be around 6.6% in 2005-06, and road transport has a dominant role in this contribution with a share of 4.7% in India‟s GDP. India has the second largest road network in the world. The aggregate length of roads in India increased from 0.4m km in 1950-51 to 3.34m km by the end of 2006.India‟s logistics sector attracted huge investments excepting some of the major sectors including aviation, metals, and consumer durables. The growths in the retail and manufacturing industry, commodity markets and development of SEZs for the food park have been key factors in the growth of Indian logistics industry. The Indian logistics industry is further expected to grow at the rate of 15 to 20% annually. The setting up special economic zones (SEZs) has led to increased logistics activities around them. Because of the excellent port, rail, road connectivity logistics parks have come up at locations like Mumbai, Kolkata, Chennai and Hyderabad and are witnessing significant investment in infrastructure. Many of the large logistics players are in the process of setting up warehouses, container freight stations (CFS), inland container depots(ICD), logistics parks, distribution centers and other facilities to take benefit of the opportunities. Increase in foreign trade is expected to further growth in the demand for logistics services. Future outlook of the logistics industry is bright as it depends on the economy which is expected to grow continuously. Logistics industry need keep pace with the growth of the external as well as domestic trade. Increased participation of both public and private sector, technology deployment, investments in infrastructure and integration of logistic services is required for development of logistics and supply chain management. Page the next few years. The Civil Aviation Ministry‟s proposal to frame a policy for the development of airports exclusively for cargo operations is encouraging. Under this policy, for the movement of perishable cargo at the airports a centre for perishable cargo (CPC) would be established. 8 LOGISTICS XPRESS
  • 9. LOGISTICS XPRESS Now todays‟ customer is demanding a “single point of contact” for all its services and looking for “one stop logistics shopping” because they are unable to have co-ordination across their supply chain. The models of logistics industry have evolved over the changing needs the market and vary based on scope of service offerings, degree of collaboration, levels of asset intensity and IT capabilities across the supply chain. The logistics model has been evolving from a specialized function to fourth party In the "PL" terminology, it is important to differentiate the 3PL from the: 1PL, which are the shipper or the consignee, 2PL, which are actual carriers such as YRC Worldwide, UPS, FedEx, DHL, Ceva Logistics 4PL, which are consulting firms such as CPCS, SCMO, BMT, Deloitte, and Accenture 3PL: AT A GLANCE A third party logistics provider is a firm that provides service to its customers of outsourced logistics services for part, or all of their supply chain management functions. Third party logistics providers typically specialize in integrated operation, warehousing and transportation services that can be scaled and customized to customers‟ need based on market conditions and the demands and delivery service requirements for their products and materials. Often, these services go beyond logistics and included value added services related to the production or procurement of goods, i.e., services that integrate parts of the supply chain. Then the provider is called THIRD PARTY SUPPLY CHAIN MANAGEMENT PROVIDER . CURRENT 3PL MODEL The old model of customer interaction was for companies to contact a 3pl and 9 For providing these services now the logistics providers has used many new techniques like consolidation, outsourcing and also included technology in their operations. logistics and fifth party logistics companies. Page EVOLUTION OF LOGISTICS INDUSTRY As the needs of the clients are increasing day by day as the organizations are now more globalized so they are having big operations for which they require enhanced services.
  • 10. LOGISTICS XPRESS In INDIAN context the 3pl services are not that much beneficiary as now firms are demanding enhanced services for their supply chain so they want a complete solution for which.it can reduce their cost, eliminate their wastage and enhanced their productivity. So, what can be the better solution for them, answer is a 4pl service provider. In to the service vacuum created by 3PLs, the 4PLs has emerged. Using a 4PL, fourth party logistics service provider, is different than the traditional 3PL. much on 4PLs discusses technology. Technology is not only the point, but it is a part of the solution. It is one element of success of process, people and technology. 4PLs see the process and what is required to make it succeed. 4Pl‟s combine process, technology and process to manage. The 4PL is a business process outsourcing, BPO, provider. This AN IDEAL 4PL MODEL 4PLs should not recreate the wheel, but should create platform that internal client logistics departments can use to gain visibility into their system. The 4PL then focuses on data integration and web development and allows multiple companies to log into the same system. In this way the platform begins to improve and the 4PL keeps its cost down. Following this approach, when a 4PL adds a new client, its cost do not increase at the same rate, because many of the feeds are already built to major warehousing and transportation and 3PL companies. 4PL SERVICE PROVIDERS 4PLs represent the next stage of development in logistics service providers. Consequently, while the traditional activities of warehousing, inventory management and transportation may be given out to one 3PL, other processes like HRD, security and 10 PROBLEMS OF 3PL  Loss of control over the logistics function  Distance from clients  Discontinuation of services lead logistics provider will bring value and a reengineered approach to the customer‟s need. A 4PL is neutral and will manage the logistics process, regardless of what carriers, forwarders or warehouses are used. The 4PL can and will even manage 3PLs that a customer uses. Page then they have to wait for a long and a long process to follow, with lots of promises made, and efforts to “understand the client‟s business” and then for a contract to be signed and for the logistics management to move from the client to the 3pl . this was simply moving the location of where the work in freight coordination was being done. The client‟s logistics function then became simply managing the 3pl for those parts of the business that the 3pl had obtained. This is not at all that helpful.
  • 11. LOGISTICS XPRESS The primary role of the 4PL is the management of complexity and time. Two key distinctions make the concept of 4PL unique and set it apart from other supply chain outsourcing options available in the market today are:  A 4Pl provide a comprehensive supply chain Solution. A 4PL adds value to the entire supply chain by managing all the activities of the supply chain. From above to concepts we can found that the 4PL outsourcing have evolved because of the problems faced by the 3PL service providers. In other words, 4PL is the evolution of supply chain outsourcing. The convergence of technology and the rapid acceleration of e-capabilities have heightened the need for an over-arching integrator for supply of chain spanning activities. 4PL IS A NON-ASSET BASED LOGISTICS OPERATOR which has chosen to become an outsourcing specialist assessing the entire supply chain and contracting those best able to provide the required services, all in order to reduce the customer's investment in inventory. 4PL operators handle the client's entire logistics function. It is not just about reducing costs of warehousing and transport, but rather about managing the logistics functions and achieving optimization. 4PL consultants are being used to analyze certain areas and recommend solutions where processes can be optimized.4PL service providers now days become a long-term partners, as they are directly involved in the business processes and strategies. The 4PL service provider manages and coordinates the relationship between all the different activities of the consumer. It must be able to strategize and manage all the different assets that are dedicated to a 11 Today more and more business processes are being outsourced. In the West, processes like bill payment, credit tracking, invoice generation, HRD, transport and warehousing are all being outsourced. Outsourcing of these activities may indeed add considerable value to the product, but on the flip side, even in a developed economy like the US, there are no 3PLs that offer every process with equal competence or reach. The 4PL is an integrator that assembles the capital, technology and resources of its own organization and other organizations to design, build and run supply chains. The typical 4PL would eliminate complexity, share benefits of scale and capital and can drive innovation due to its overall view. In other words, a 4PL manages other 3PLs.  Page product development are done by other 3PLs. In effect, the activities done by a set of internal departments are now being carried out by a set of 3PLs. As a result the companies now have to deal with a whole set of 3PLs and each needs to be coordinated with and linked via personnel and IT. The number of transactions and the costs reduced are thus offset to a great extent by the cost and time of transacting with all these 3PLs.
  • 12. LOGISTICS XPRESS customer and, where possible, coordinate break-bulk distribution by co-loading different customers' products on the same vehicle. This can be done when a 3PL service provider has a great number of customers, thus providing the critical mass to allow break-bulk distribution. OPERATIONAL ADVANTAGES OF 4PL The 4PL planning in such a scenario plays a great role in reducing costs. In essence, the 4PL logistics provider is a supply chain integrator and assembles and manages the resources, capabilities and technology of its own organization with those of complimentary service providers to deliver a comprehensive supply chain solution. The 4PL will integrate the client's supply chain activities and supporting technologies across these "best of breed" service providers with the capabilities of its own organization. source:- www.hiplus.de SERVICES OFFERED BY 4PL SERVICE PROVIDERS Zm1 BENEFITS OFFERED BY 4PL SERVICE PROVIDERS:-    12  Only one vendor to manage = ease of use & time savings. Consolidated customized management reports for all suppliers used. It can proactively monitor all the shipments of companies - no matter size, service or supplier. Cost reduction. Easy accounting with consolidated billing. Page 
  • 13. LOGISTICS XPRESS Losing sight of original core-concept of SCM due to loss of control.  Customer relationships should not be is missed on basis of efficiency.  Strict functional organization structure hinders integrated Supply Chains.  Resistance to change – the biggest obstacle to implementation of new approaches OPPORTUNITY The 4PL will serve as a single point of contact for customer, managing a comprehensive set of supply chain and logistics service that are executed by other providers. Where 4PL scores better than the current approaches to supply chain outsourcing is a unique ability to deliver value to client organizations across the entire supply chain. With 4PL focusing on the entire supply Chain dramatic customer services improvements can be attained. This will allow the client to invest in their core competencies. As its an non asset owned service provider it only works with intellectual capital and computer. Therefore this model provides the greatest benefits, however it is complex and a great challenge. Also about 75% of the fortune100 companies & about 45% fortune 500 companies have now gone in for 4PLs Snapshot of Indian Logistics Infrastructure: Rail: The freight traffic carried by Indian railways during 2010-11 was 833MT & it was lower by 2% than the set target of that period. Ports: Major ports handled 530 MT of cargo in 2010-11 which was 7.9% lower than the target set the period. Aviation: the five major Airports in the country (Delhi, Mumbai, Kolkatta, Chennai & Bangalore) handled 53382MT of cargo during 2010-11, which was 3.4% lower than the target set the period. The above data helps us understand that Indian infrastructure has a long way to go & in order to achieve reduction in National Logistics cost, the Govt. needs to bring ion reforms that would help the infrastructure improve. With an improved infrastructure, services like 4Pl can be highly effective as it‟s the case in developed economies. CONCLUSION: The logistics industry in India will continue to grow & be a focal point in strategy formulation, operational excellence & information technology to make maximum value addition to its customer. SUGGESTION India needs to work upon its Logistics Infrastructure, in the 11th five year plan calls Firms can increase their market competitiveness by reducing their overall 13  Page PROBLEMS FACED BY 4PL INDUSTRY for increase n the investment made by Govt. from 4.6% of the GDP it needs to be somewhere between 7-8% considering the opportunities available. Also Govt. needs to rethink upon contribution via FDI in infrastructure
  • 14. LOGISTICS XPRESS logistics cost, which would further lower the cost incurred to them. Here 4PL can make a world of difference, USA whose firms have adopted 4PL style of working has successfully reduced its logistics cost by 9.5% by incorporating latest techniques available. India has therefore got a huge opportunity in reducing its Logistics cost by studying & benefitting from the world economy like adaptation of 4PL. But the infrastructure condition needs to be revolutionized, as Indian economy has shown the potential to be the next big logistics hub worldwide. ______________________________________________________________________________ REFERENCE : -as-a-business-opportunity/1/16824.html www.ship.gr/4pl/pr.htm http://www.linkedin.com/answers/business-operations/supply-chain management/OPS_SCH/313821-19822044 http://logistics.bafree.net/the-disadvantages-of-third-party-logistics-services-versus-logisticssoftware/ http://www.lgcns.com/pr-center/news/view/94/lg-eds-systems-commences-4-party-logisticsbusiness-through-bpo-in-canada -india.html -logistics.in/3pland4pl.html ARTICLES : Page 14 Science)
  • 15. LOGISTICS XPRESS USING LOGISTICS AND SUPPLY CHAIN TO BOOST INDIAN MARITIME INDUSTRY Mohit Sharma MBA(ET) IInd Sem The Logistics & Maritime sector were (and still are) not perfectly integrated because of following reasons: - India is a diverse country in terms of topography, crops grown, products, communities, religions, languages, climatic conditions. This caused a heterogeneous mix of various aspects which are important in the flow of goods and services from the production point to the destination point. As the nature of each of the factor involved is uneven this makes the flow of goods and services difficult affecting both the quantity and at times quality of goods in transit. The money, effort and time involved also increases as logistic network has to adapt to dynamic nature of Indian market and system. Some product which require absolute uniformity in the transportation, distribution processes became virtually extinct from the Indian system. 2) Indian Economy Before 1991 Prior to 1991 reforms in Indian economy mainly followed a socialistic approach. This approach requires a government to get almost total control and restrict the role of private players (domestic as well as foreign) in the economy. Under this, government decided what commodity or service is needed by the people of the country and in what quantity. The distribution, warehousing & transportation were under control of government. As India follows a federal system of government the state governments 15 As there are limited number of ports & allied services due to which India lag behind in trade even with the countries which are geographically close to it. In the past, focus of India was on the commodities in which it has absolute advantage over others or relatively greater comparative advantage over other countries. Over the years the commodities (and services) exported by India were limited like Mica, Tea, Handicrafts, Cash Crops etc. These factors almost always caused Indian economy to suffer negative Balance of Payments. 1) Diversity Page With a total coastline of over 7600 kilometers, India has a great potential in international trade through coastal areas. As per the report of Director General of Shipping, Government of India (2011), there are 13 major and over 187 non-major ports only 7 per cent of the domestic cargo gets transported through coastal shipping compared to 15% in the US and 43% in EU countries. 80% of this cargo comprises of petroleum, oil and lubricants, thermal coal and crude and the remaining being food grains, cement, containerized cargo and finished products. The number of ships involved in coastal trade is around 700 vessels totally comprising of around 1 million gross registered tonnages (GRT).
  • 16. LOGISTICS XPRESS 3) Transport and Warehousing India lacks the sustained investment in planned infrastructure like warehouses and transport centers. A lot of surplus of various products which can be exported is wasted because of this. Inland waterways which have great potential of linking many „land locked‟ areas to the coastal areas but are not fully exploited. In the same way there is urgent need for domestic air cargo processing space, in light of cargo capacity enhancement at airports and arrival of wide bodied jets capable of carrying substantial cargo at economical costs. Modern agro warehouses are also need of the hour. Logistics centers can replace the existing unorganized transport hubs at industrial locations. Increasing efficiency of Maritime Sector with the help of Logistics a. The process of corporatization of ports has been undertaken both nationally (Ennore Port) as well as internationally (PSA Corporation). The idea is to benefit from accountability, to enforce best b. Government can also provide separate railway lines, customized inland waterways (according to the requirements), and domestic air cargo facilities and reduce its intervention in the overall transport network. c. Organized retail must be promoted to move the chain of goods effectively and maintain a healthy level of demand and supply. d. Central Government and State Government should also develop an infrastructure with efficient supporting, allied activities, networks. e. Apart from the usage of Special Economic Zones & Towns of Export Excellence in the integration of logistics and maritime, nearby small villages and regions can be developed according to their 16 It was a cumbersome task to set up a private firm. One has to take permissions and licenses from the government on different levels. Even after setting up the firm constant governmental intervention was there. This monopolistic practice was also termed as “License Raj”. It also delayed the growth and infrastructural advantage India was getting over other countries. operational practices, better organizational efficiency, wellresearched business decisions and financial prudence. More private players should be encouraged by the government. Development of minor ports has been a painstakingly slow process. Corporatisationof major ports can enforce business decisions of controlling some of these high potential ports with better management control and focus on profitability Page were responsible for procuring important material to their people.
  • 17. LOGISTICS XPRESS g. As explained above, Integrated Logistics Convergence is necessary. Telecom sector has been the first sector to witness convergence of emerging technologies (to facilitate customer utility) – between landline, mobile and broadband technologies. Similarly, convergence or business integration is taking 17 f. Integration of companies which are part of logistics process of transfer of goods and are active in different independent fields with government as common link. This will create economy of scale and reduce the duplication of efforts. place from shipping & ports to maritime, logistics and supply chain management (in that sequence) – again driven by focus on facilitating utility to the customer. Indian regulators in telecom sector were aware of the convergence issues and were able to nimbly change the regulations to attract large players, generate competition and lower tariffs. In maritime sector too, the regulator should encourage integrated players. It would also be advisable to encourage local shipping companies to get into terminal business. SCI has already expressed intent for bidding of the fourth terminal at JNPT.Worldwide many shipping companies are becoming integrated logistics operators. Page expertise which can use the already existing infrastructure of adjutant SEZ and TEE.
  • 18. LOGISTICS XPRESS OIL SECURITY FOR INDIA & RELATED GEOPOLITICS Loveraaj Thakru Industry fellow Department of LSCM CMES, UPES India imports about 75% of its requirement of crude.Since crude oil prices are governed by demand and supply in the International market let us examine the likely trend.The worldwide consumption of oil is about 92 million barrels per day and growing at about 2-3% per annum(1 barrel is about 158.9 litres,1ton of crude is equivalent to 7.33 barrels).China and India are responsible for a good part of that growth.Indian consumption has increased by almost 50% in the last decade and with a projected GDP 18 Micro- economics dictates that when the price of an item increases the demand is likely to decrease.Agreed that demand for petrol is relatively inelastic but is there an option to allowing free pricing of petrol?There are currently 3 petro products of mass consumption under the APM:Diesel,Kerosene and LPG.The combined subsidy on these is running at about Rs.350 crore per day which is Rs.1,30,000 crore per annum.Taken alongwith the subsidy the Government gives to the agricultural sector on inputs such as seeds and fertilizer and the subsidy on foodgrains for the PDS, is it practically possible for the Government to manage the financial jugglery to meet the budget deficit?No wonder we already hear statements that the deficit is likely to be in excess of 5.5% and some estimates have it as high as 6.5%.Blaming the Government for high inflation and simultaneously expecting higher subsidies and support prices are clearly contradictory. Page The recent hike in Petrol prices by the OMCs had once again provoked expected reactions from across the political spectrum.While the UPA allies were by and large supportive,the opposition as is their norm, was highly critical.The exception was the UPA ally the TMC, which used the opportunity to extract its pound of flesh.It was heartening to see that at least some of the political parties understood the economic logic of the price increase.Once petrol prices have been taken out of the APM umbrella the OMCs have no option but to raise prices to compensate for higher crude landed price.Landed prices are impacted by either International prices or depreciation of the Rupee against the US Dollar.Given the existing duty/tax structure on petrol,the OMCs cannot be expected to make losses on a decontrolled item.Lambasting the Government shows complete ignorance of Finance/Economics or rank political opportunism or both.Now that prices have been brought down, once again the political furore will subside but the underlying problem will stay intact.Which brings us to the bad news – that petrol prices are not only not going to come down but are actually expected to keep rising in 2012.Gone are the days of petrol under Rs.60 per ltr. in India.
  • 19. LOGISTICS XPRESS Country Saudi Arabia Venezula Iran Iraq Kuwait UAE Russia Libya Kazakhstan Proved Reserves(billion Barrels) 264 211 137 115 101 97 77 46 40 To put this in perspective the proved reserves of USA,China and India are 30,15 and 9 Billion barrels respectively.This of course does not mean that all of this is extractable so the actual usable quantity is likely to be lower. In addition to the above the proved reserves of Natural Gas are as below: Country Russia Iran Qatar Turkmenistan Usa UAE Venezuela Nigeria Algeria Proved Reserves(Trillion Cubic M) 45 29 25 8 7.5 6 5.5 5.2 4.5 (1 Billion Cubic M = 0.9 Million Tons oil equivalent) 19 As per the Hubbert Peak Oil theory global oil production will hit a peak rate and then keep declining as oil starts to run out.While new technology,discoveries and development of alternatives has so far postponed the inevitable,it is a matter of speculation that the peak will occur in the next 40-50 years.As a nation we should be concerned about our energy security in the long term because we would like to keep up the pace of development and therefore, what should be our long term strategy?One of the obvious answers is that we need to change over to other forms of hydrocarbon fuels such as Natural Gas.Other options are to accelerate the development of non conventional energy sources such as Solar or Wind.Still another is the increased use of Nuclear energy particularly for Power generation (and there is enough controversy on this).Unfortunately,there are transportation applications where there is no easy substitute for oil. To be able to design an effective strategic response,let us examine who is sitting on all the oil resources.The table below gives the proved reserves of oil for some of the major players: Page growth rate of 8-10% the trend is likely to be maintained.Chinese consumption has almost doubled during the same period.Given that our production has been fairly constant the increased requirement will have to be met by imports.China has already surpassed the USA as the largest importer of oil.While China has steadily worked on tying up its crude oil import requirements(since it imports about 250 million TPA of oil or 60% of its consumption) and has aggressively locked up supply sources in Africa,Central Asia and the Middle East, we unfortunately lag far behind.
  • 20. LOGISTICS XPRESS In this scenario,what should be India‟s strategy?Besides the obvious steps like increased exploration in Rajasthan and offshore( KG basin),let me stick my neck out and suggest additional areas we need to cover: 1. If the Iranian natural gas pipeline via Pakistan is not feasible (and we don‟t trust Pakistan enough to put our eggs in that basket) why not consider building a pipeline via the Arabian Sea? This solution will be expensive but once oil prices start to go up( which I think they will in years to come) the picture will change. In any case we will save the gas transit charges of approximately US $ 300 million per annum which we would have paid Pakistan year after year. Isn‟t it time India spent some of the huge forex reserves it has ? The US will not be happy with this step by 20 If we look at the history of the world for the last 50 years we begin to see a distinct pattern.Nothing sums it up better than the remark of the then US Energy secretary,Bill Richardson,who said in 1998 “ This is about America‟s energy security.It‟s also about preventing strategic inroads by those who don‟t share our values.We‟re trying to move these newly independent countries towards the West”.While this remark was made in the context of Caspian Oil,this is what the entire US policy has been about for the last 50 years.They have always had a substantial presence in Saudi Arabia,put the Shah in power in Iran(unfortunately he,in turn,was thrown out) and have only pursued it more aggressively since.Iraq was widely touted as having weapons of mass destruction(which were never found,but then public memory is short and who is going to scold the policeman) and Libya‟s Gaddafi was a terrorist and ran an oppressive regime.The NATO partners were accordingly thrown this problem to handle and now that Libya is out of the way we see increased rhetoric on how dangerous the Iran nuclear program is and how it is a major threat to the peace and security of the world ( this time Israel is the front man).Presidential elections in the US are due in 2012 and the timing is just right.Venezuela‟s Hugo Chavez has traditionally been a thorn in the US flesh( the Western press is a willing partner in this build up) but he is reportedly unwell and that problem may solve itself.In case we haven‟t yet figured it out – it‟s about the oil stupid.Is it any surprise that all the problem states/dictators figure in the list of the oil rich?A further area of interest to the US is the oil in the Caspian Sea region but unfortunately the way out logistically for this oil was planned via a pipeline through Afghanistan and Pakistan and these countries have not yet been tamed inspite of years of effort.Iran is once again the obvious alternative way out for a pipeline to ship Caspian oil. Page Again ,to put it in perspective China and India have proved reserves of 2.8 and 1.5 TCM respectively.Based on these China,with a consumption of 450 Million TPA of oil and a domestic production of 200 Million TPA, is going to run out of oil much faster than India and has hence aggressively pursued strategic tie ups to ensure supply of oil.
  • 21. LOGISTICS XPRESS 3. Adopt a realistic Natural Gas pricing policy for domestic gas. As long as 4. Strengthen our tie ups in Africa, the Middle East and the Caspian region. This involves a massive diplomatic and financial effort but we must ensure some degree of security for oil and gas supplies. Since Iran also forms an important link in the route to bring out oil and gas from Caspian region, we must work diplomatically to ensure that the same whitewash as was done in the case of Libya ( a UN 21 2. Accelerate development of shale oil extraction and processing technology. We know that Arunachal Pradesh has huge reserves of Shale Oil and it was claimed by Mr. C. Ratnam, former Chief of Oil India Ld that the reserves were sufficient to meet Indian total needs of Crude Oil for a further 100 years. If we combine this knowledge with the fact of the rapidly depleting Chinese reserves, we know exactly why China is interested that in claiming ownership of Arunachal Pradesh ? Our answer must be two pronged, first – undertake massive development of that part of the country, which is anyway necessary given the abysmal lack of infrastructure and second – put enough security in place to ensure against any misadventure by the Chinese, given the poor state of our border information systems as shown during Kargil. we keep expecting RIL to supply gas at $ 4.2 per mmBTU(million British Thermal Units, 1 barrel of oil =5.41 mmBTU) the current deadlock will continue and RIL will be reluctant to invest in expanding the production and distribution of gas. While the price of Iranian gas was increased to $ 8.3 per mmBTU ( based on a crude oil price $ 60 per bbl) we continue to rigidly stick to the $ 4.2 per mmBTU price for domestic gas. Our agreements with the E & P private companies must be flexible. In this connection the recent recommendation of the Soumitra Chaudhuri committee on gas pricing to have a price $ 7.5 to $ 8.0 per mmBTU is welcome. Flexible pricing will also send the right message to other companies wanting to bid and take up E & P efforts. We must recognize that as oil/gas become scarce they will have to be explored at greater depths under the sea and that is expensive and risky business. Anyway, RIL will probably be happy with a price of even $6.00 per mmBTU . Page India (considering sanctions imposed on Iran) but then we are caught between a rock and a hard place. However in a situation where oil will start to become more scarce and expensive, energy security for 20 % of the world‟s population has to take precedence.The requisite technology for such a pipeline will have to be sourced.This will also enable us to link up supplies of gas from Qatar in the future.
  • 22. LOGISTICS XPRESS 5. Currently about 7 % to 8 % of the world oil production is offshore. As we move ahead this figure is likely to increase because fresh land based finds of any magnitude will be unlikely( 80% of the earth‟s surface is covered by water). Also offshore finds and further E & P will be at greater depths and is likely to be in International waters. We need to access the technology to work in International waters at greater depths to increase our chances of finding fresh oil. In this context our recent face off with the Chinese in the South China Sea is relevant. We must be prepared to stand up for our rights while respecting the territorial integrity of others. As home to 20 % of the world population having only 0.7 % of the world oil reserves, we will continue to be heavily dependent on oil imports and therefore subject to international price fluctuations. International crude oil prices are not only never likely to come to below $ 70 per barrel but 2012 will only see increases across the world and average Indian import prices will range above $ 120 per barrel particularly if there any further adventurism by the US. It is unfair to expect the Government of India to both reduce the duties & taxes and to maintain petroleum sector subsidies. The Government has to generate revenue for development from somewhere. Soon the issue is likely to move away from pricing of oil & gas to availability of oil & gas. Since this sector has very high lead times and risk factors, it is time we identify the potential areas of growth and start work on them. However recognizing the critical nature of powerful geopolitics involved in terms of the interest of China ( more immediate than ours) and the US attempt to control all the known resources we will have to play our cards right. The time for action is now ! 6. Consider dismantling of APM for diesel, kerosene and LPG. While this would be political suicide for any party, isn‟t it at least possible to completely decontrol diesel prices ? Worldwide diesel retail prices are about 10 to 20 % cheaper than petrol. If we make the diesel price about Rs. 60 per ltr (or Rs. 10 per ltr less than petrol) it would certainly increase transport costs dramatically but that is exactly what is needed to disturb our comfort zone and force us to look for more cost effective and 22 efficient transport solutions and thereby bring about a reduction in fuel consumption. Page resolution which though limited in scope was used a cover for a NATO invasion) is not repeated in Iran.
  • 23. LOGISTICS XPRESS The Rise in Cost and Scarcity of Raw Materials: A Global Perspective Bh.Phanindra Kumar MBA LSCM IInd Sem Changes will effect all the Raw Materials: To respond to the rising costs of raw materials, the industry will need to make certain changes affecting ingredients, packaging, energy, labour and water. Each category of raw material will offer different opportunities and challenges for the industry. With high ingredient prices, companies will need to first protect their contracts and seek vertical integration to help guarantee supply. At the same time, they will seek alternative ingredients or develop product innovations that are less dependent on that ingredient. Alternatively, they may also try to influence consumption behaviour or suggest substitute products. Packaging: With oil and timber price impacting the cost of packaging, companies will need to reduce the amount of packaging, or focus on reusable packaging (for instance, the use of refillable packaging). At the same time, incentive schemes will encourage more responsible packaging. Energy: Energy is a big part of the cost structure for products, impacting the full cycle from harvesting and production to distribution, retailing and recycling. The opportunities for energy reduction (through 23 The cost of raw material, including fuel, is rising and expected to continue in rise. Anticipated population growth in China and India will put pressure on water and food supplies. The climate is expected to become even more volatile, and the weather will likely have an increasing impact on the performance of the supply chain, causing crop failures and food shortages. Meanwhile, political instability may cripple supply lines and severely reduce the number of source countries for raw materials. Ingredients: Page Seeing the change in the living economy day-to-day we have been experiencing very fast and vast changes in the lives of each individual. This article will further discuss and brief you about the rising costs in the next decade‟s time and the scarcity of raw materials that arises due to this. All of this leads to a dangerous existence ahead in the global perspective.
  • 24. LOGISTICS XPRESS more efficient assets or asset sharing) as well as alternative forms of energy will be plentiful. Many developments are already going on in this area and more are expected in the next 10 years.      Labour: Labour scarcity is a very real challenge even today and that is expected to continue to be the case in the coming years. Switching production locations may not be as easy in the future due to higher transport costs, and this may give new impetus to automation. At the same time, companies will need a complementary strategy focused on making the jobs more attractive through training and new incentives, as well as through flexible work schedules. Water: Fresh water scarcity is expected to become a reality in many areas, and technologies that improve reuse of water or filtering and desalination will need to be further developed.  Collaborative lobbying of government in areas such as agricultural and water policy and energy strategies for mere availability to all. Educating the farmers and other rural areas such that they know the role of certain crops for bio-fuel and the influence that it will have on food production Consumer education focused on food substitution and energy conservation. Working together on shared warehousing and shared logistics solutions, as well as alternative energy sources to reduce the dependency on fossil fuel. Research and development in controversial areas such as cloud seeding and nanotechnology. Working together with co-operatives to find better farming solutions. Conclusion: Every industry and company must follow these initiatives and help create consistent solutions that will enable to face the challenges ahead. The above factors are the main sources for the scarcity and increase in cost of raw materials. Hence, care must be taken in maintenance and controlling the flow of these into and out of an industry. help them to coordinate with the suppliers to have a fast, efficient and healthy supply chain 24 For resolving the issue of raw material costs and scarcity, the industry can take actions in various places such as: Page Industry Actions and Initiatives: Food processing being the major aspect of every nation, the farmers must be educated with the current technology and
  • 25. LOGISTICS XPRESS IT APPLICATION IN LOGISTICS There are many ways in which information technology will be helpful which includes replacement of inventory with information, making customers awareness, help in planning and reduce variability in supply chain, co-ordination of manufacturing, marketing, and distribution through enterprise research planning they help in order processing and reduce lead time. Communication systems eg-voice based order picking. Transaction processing systems with point of sale system can be logistics applications. Management and executive information system which involve logistics information systems as a logistics application. Another can be decision support system with warehouse management systems being a logistics-related application.So IT has its own importance in logistics also. 25 Integrating information technology has enhanced supply chain as a ongoing challenge. Earlier the records were not updated as a real time but IT has helped this out in order management , warehouse management, transportation management and accounting .There are various supply chain application which include ERPenterprise research planning ,WMS- warehouse management system which focus on consistency, economies of scale and efficiency. with IT in communication has helped effective and faster exchange of info from firm locations and between suppliers .IT has also helped logistics through RFID in there counting and security checks .also helped in collaborative planning and replenishment which made exchange of supply chain event accurate with accuracy. Today all activities associated with international trade have come under the ambit of information technology. Yet, many service providers are still not fully aware of the potential and actual benefits that can accrue from it. Page The advancement of IT sector with technologies is at its faster rate.IT is playing an important role in Logistics and supply chain management also establishing a link between logistics and Information technology. Earlier logistics sector faced many problems due to unorganized and they neglected IT which became one of the biggest obstacle in their progress. Logistics companies have lately woken up to the importance of technology in delivering quality services to their customers. The advancement in technologies have made possible for faster end to end solutions with the help of software. Earlier were the days where geographical conditions was one of the factor in logistics and supply chain management but with latest technology service providers are no longer facing problem by geographical limitations and can very well expand there business of supply chain with no boundaries limitations. Technology has helped them to operated from anywhere with high visibility and control. The integration of information technology has resulted in benefits from internet and integration of logistics functions through intranets/extranets.
  • 26. LOGISTICS XPRESS REPORT ON INTDUSTRIAL TOUR Seshadri Kannan MBA LSCM IInd Sem ABSTRACT As we reached New Delhi on the 16th Jan 2012, the class was split in 2 batches and the first batch proceeded to UFLEX Ltd, Noida. We were received by the staff on arrival and After Pioneering the growth of the flexible packaging industry in India, UFLEX has gained an unchallenged identity. Since its inception in the year 1983 it has turned into a multi-billion company that values quality and customer satisfaction amongst other priorities. With consumers spread across the world, UFLEX enjoys a global reach. Headquartered in Noida (National Capital Region, New Delhi) it has state of the art manufacturing facilities in India & Dubai. It has also established offices in UAE, Europe and North America and enjoys a formidable market presence in more than 85 countries. UFLEX facility enjoys ISO 9001 and ISO 14001 certifications and has FDA and BGA approvals for their products. It is also a part of the D&B Global Database and winner of various prestigious national and international awards like the top exporter of BOPET and BOPP films, and the Worldstar award for packaging excellence. FPA, AIMCAL and the DUPONT Awards in 2004-2005 are the latest in this series. 26 UFLEX LIMITED UFLEX AT A GLANCE Page This Report is framed in order to share my learning and experiences during my Industrial Tour as part of MBA LSCM Batch 2013. As part of the tour we visited 2 Industries in New Delhi – CONCOR India Ltd. (Dadri) and UFLEX Ltd. (Noida) and 3 Industries in Surat – L&T Heavy Engineering, BPCL and GNB Port, all located in Hazira. The visit organized as part of our learning curriculum, was undertaken from the 15th Jan 2012 to 20th Jan 2012. We were accompanied by three faculty members – Mr.Saurabh Tiwari, Mr. Jayanta Mohapatra and Dr.Ratna Banerjee. The purpose of the tour which was to get an understanding of the operations involved in these Industries along with the Business processes relating to the Logistics and Supply chain aspects, was accomplished. I take this opportunity to thank our HOD Dr. Neeraj Anand, the IR committee, our coordinating faculties and the staff of the industry for making this visit an excellent learning experience for us. we were taken to the Packaging and Films division
  • 27. LOGISTICS XPRESS Being a multi faceted organization it has integrated its operations from manufacture of Polyester chips, Films (BOPET, BOPP and CPP - both in plain and metalized form), Coated Film, Laminates, Pouches, Holographic films Gravure cylinders, Inks and adhesives to all types of packaging & printing machines, offering total flexible packaging solution. exporter of a variety of Plastic Films in the world. UFLEX has always been committed to the industry by providing technical know-how and being the trend-setter in the flexible packaging industry. Being on the edge of innovation, UFLEX endeavors to be the first to come up with advanced products that cater to the changing demands of the packaging industry. UFLEX uses WPP- Weaving Polyproylene and BOPP-Bio-organic poly propylene for Packaging. The Films manufactured are plastic film products one of them being Modified Extension coated film. Various packaging technologies like Laminate tubes, cosmetics tubes, plastic/metal caps and closures are used. Every line that is printed on the package is based on customer requirements. Based on Customer requirements, UFLEX also uses 2 or 3 Level packaging, the stages of packaging being 1. Manufacturing the films 2. Engraving information on the cylinder 3. Printing 4. Lamination 5. Slitting 6. Pouching 7. Packaging UFLEX manufactures in-house Polyester chips, BOPET / BOPP / COATED / METALLISED / CPP Films, Packaging machines, converting equipment, inks, adhesives, Flexible Laminates and Pouches and have emerged as a “one stop shop” committed to providing customers with competitive advantage, placing top priority to “customer success”. The Film Division of UFLEX Limited, is one of the largest manufacturer, supplier and A Supply Chain manager at UFLEX is responsible for the demand forecasting of orders, matching supply & demand to name a few. To name the technology used, UFLEX uses ERP and ORACLE for its supply chain operations. UFLEX participates actively in being environmental friendly by recycling the wasted film and turning it into seeds, which 27 FILMS DIVISION Page As part of the UFLEX Group, it has over twenty years of experience in polymer technology. Setting milestones of success and innovation, UFLEX is widely known for manufacturing and supplying products, delivering apt services around the world. Most of the products we use every day are packaged at UFLEX. Some of them include OLAY, FRITO LAY (Lays), PERFETTI VAN MELLE (ALPENLIEBE), CADBURY, TIDE and many more.
  • 28. LOGISTICS XPRESS are then flattened such that they can be reused as films again. manufacturing company. It is one of the largest and most respected companies in India's private sector. L&T HEAVY ENGINEERING More than seven decades of a strong, customer-focused approach and the continuous quest for world-class quality have enabled it to attain and sustain leadership in all its major lines of business. We proceeded to Surat and our first stop was L&T HEAVY ENGINEERING, Hazira. The Management at L&T gave us a warm welcome and was enthusiastic in giving us a presentation. We were lucky enough that the presentation was presided by the Top Management of L&T including the Vice President, Mr.Venkataramanan, who was kind enough to join a few of us over at Tea later and shared his insights into managing an organization as big as L&T. The Presentation, helped us understand the Logistical challenges they have faced in transporting the heavy products to the customers be it Boilers to other Industries or heavy equipments to the Indian army or drillers to the Oil and gas industry. To quote how the tedious process is carried out, L&T first involves in Route planning. Then a Route Survey is carried out to study the feasibility of transporting the product. Then the vehicle is selected, after being tested for load and other parameters. They have faced challenges where in they have come across weak bridges or narrow roads en-route for which they have even gone to the extent of building ancillary structures to successfully transport the product to its customers. L&T has an international presence, with a global spread of offices. A thrust on international business has seen overseas earnings grow significantly. It continues to grow its overseas manufacturing footprint, with facilities in China and the Gulf region. The company's businesses are supported by a wide marketing and distribution network, and have established a reputation for strong customer support. L&T believes that progress must be achieved in harmony with the environment. A commitment to community welfare and environmental protection are an integral part of the corporate vision. INDEPENDENT COMPANIES: o Hydrocarbon o Heavy Engineering o L&T Construction Larsen & Toubro Limited (L&T) is a technology, engineering, construction and Page o Power 28 ABOUT L&T
  • 29. LOGISTICS XPRESS o Electrical & Automation Industrial o Information Technology o Financial Services o Shipbuilding o Railway Projects HEAVY ENGINEERING DIVISION In engineering and construction, L&T's technology capabilities include a strategic mix of in-house strengths and the expertise of its joint venture partners. Engineering Centres at Mumbai, Vadodara and Delhi carry out process design and simulation, analysis of computational fluid dynamics, mechanical design, failure analysis and trouble shooting. L&T has set up an engineering and project management centre in Abu Dhabi, to undertake oil and gas related projects as well as engineering and consultancy services. An engineering centre in Sharjah is an extended arm in the Gulf. This is supplemented through collaborations with key partners: L&T-Valdel for engineering services in the upstream hydrocarbon sector, L&T-Chiyoda for the mid and down stream sectors, and L&T Sargent & Lundy for the power sector. Pulveriser - A Pulveriser crushes coal and breaks it into fine dust. This coal is then used in boilers Being such a large company, L&T faces numerous challenges logistically while transporting their products. For instance when L&T transported the world‟s biggest FCC regenerator – a 132o tonne behemoth for a mega refinery in China and the massive 2400 tonne gas injection platform for the oil fields of Abu Dhabi they had to face challenges involving ODC constraints, selecting the appropriate mode of transportation, road constraints, vehicle selection and clearance from government authorities. L&T implemented JQI|| (Juran on Quality Improvement) for improving energy consumption. The implications of implementing the same have resulted in substantial savings and improvements in many areas of its operation. L&T also supplies aerospace equipment for ISRO, nuclear equipments for the Government of India and warships to Indian Navy to name a few. 29 & Page o Machinery Products Some terms: Outfitting – The vessel manufactured by L&T is launched into the sea, unfinished. Then the outfitting operation, which is fitting electrical equipments and other equipments for the completion of the construction of the ship, is performed.
  • 30. LOGISTICS XPRESS Performance Analysis of Logistic and Supply Chain Sector during Recession Dr T.Joji.Rao Ms Chandni Chaurasia Without a sound and efficient logistics system in the world it cannot have a healthy economy. The Logistics sector of India should not only be hassle free but it should be able to meet new challenges posed by the technology and any other external and internal factors. In business, logistics may have either internal focus (inbound logistics), or external focus (outbound logistics) covering the flow and storage of materials from point of origin to point of consumption. The main functions of a qualified logistics professional include inventory management , purchasing, transportation, warehousing , consultation and the organizing and planning of these activities. A Logistics Professional combines an expert knowledge of each of these functions to coordinate resources in an organization. There are two fundamentally different forms of logistics: one optimizes a 30 Logistics is a business concept which was evolved in the 1950s because with the increasing complexity of supplying businesses with materials and shipping out products in an increasingly globalized supply chain, which lead to a call for specialists called supply chain logisticians. Business logistics can be defined as "having the right item in the right quantity at the right time at the right place for the right price in the right condition to the right customer", and is the discipline of process and incorporates all business sectors. The objective of logistics work is to manage the fulfillment of project life cycles, supply chains and consequential efficiencies. Page Logistics and Supply chain sector or Third party logistics (3PL) companies are becoming an important part of today‟s supply chain. These companies offer services that can allow businesses to outsource part of all of their supply chain management function. Many 3PL companies offer a wide range of services including; inbound freight, freight consolidation, warehousing, distribution, order fulfillment and outbound freight. The growth of 3PL companies has been driven by the need for businesses to become leaner, reducing assets and allowing focus on core business processes.
  • 31. LOGISTICS XPRESS steady flow of material through a network of transport links and storage nodes; the other coordinates a sequence of resources to carry out some project. Top 25 Global Logistic Companies for year 2009 SNo. Logistics and Supply Chain Company Revenue (in Million $) 1 2 3 4 Exel PLC Ltd Kuehne & Nagel Ltd Schenker Ltd DHL Global Forwarding Ltd UPS Supply Chain Solutions Ltd Panalpina Ltd CH Robinson Ltd TNT Ltd Expeditors Ltd Schneider Logistics Ltd TNT Ltd Penske Ltd Eagle Global Logistics Ltd Nippon Express Ltd Agility Logistics Ltd Bax Global Ltd UTi Worldwide Ltd Ryder Ltd Caterpillar Logistics Ltd Kintetsu Ltd Menlo APL Logistics Ltd Maersk Logistics Ltd SembCorp Logistics Ltd Fedex Trade Networks Ltd 13335 10700 10700 9500 31 7700 6320 5689 4270 3902 3852 3560 3171 3096 3000 3000 2899 2785 2181 2100 2025 1340 1290 800 713 672 Page 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
  • 32. LOGISTICS XPRESS It is a recognized fact that logistics sector is growing in the world as a whole, especially in India. This is due to the increasing pace of business with just in time (JIT) philosophy, customer service, timely delivery of products at right time in the right quantity in the right place in the right condition to the right customer. Therefore, as the logistics and supply chain sector is growing day by day and according to the supply chain market reports this sector will boom in the near future. The sector is leading with the top companies, as according to the Global Logistics and Supply Chain Strategies magazine the ranking of world‟s largest Logistics companies in terms of total revenue for 2009 is provided in the below table. Chart 1: Overall Growth of Logistics Sector (2005-2009) Logistics sector is playing a big role in shaping the modern civilization. Third-party logistics or 3PL or Logistics companies is growing around the world as more and more corporations prefer to outsource their logistics operations to the 3PL or logistics service providers. For the period 2005 to 2009, the overall growth of logistics sector may be represented in terms of revenue as in Chart 1. This represents that the Logistics and supply chain sector is continuously growing from 2005 to 2008 and in the year 2008 it shows the highest growth of 26% but falls in 2009 with the drop of 4 % due to the global recession. The study of broad decision making variables namely revenue, cash and cash equivalent, current assets, current liabilities, investing income, change in investments, operating expenses, operating profit, net profit, dividend paid and retained earnings for the period 2005-2009 may be represented as in the figure as below. This graph also shows the highest growth of the sector in the year 2008. Growth of Logistics sector in terms of Revenue from 2005 to 2009 30% 25% 20% 15% 10% 5% 0% 23% 19% 26% 22% 10% 2007 2008 2009 32 2006 Page 2005
  • 33. LOGISTICS XPRESS Logistics sector growth from 2005 to 2009 60000000 50000000 40000000 30000000 20000000 10000000 0 -10000000 2005 2006 2007 2008 2009 33 same time they have been successful in ensuring a consistent dividend payout. Though the companies of logistics sector have shown a consistent growth year by year but it is of utmost importance for the companies to identify the concern areas over the segments and devise methodology to optimize the operational output by proper utilization of management techniques, expertise and manpower. Page The analysis of the above shows that though the logistic sector has been impacted by the global recession in terms of output, revenue and profitability whether it is in terms of operating or net profit but it has been able to successfully maintain the desired levels of liquidity. Though the recession has compelled the logistic companies to increase the reserves for contingencies but at the
  • 34. LOGISTICS XPRESS CAMPUS BUZZ were a lot of events organized on the day NAVRITI 2012 which included both technical and fun filled Department of Civil Engineering and games. Students from various branches and Environmental Sciences organized Navriti streams in the college, as well as students th 2012 on the 24 of February this year. There from other colleges took active participation in the event. Inter Urban Transport Crisis” were posters that Collegiate Poster Presentation competition. Some of the add ons of the day included games like X-factor, Balance, Volley Balloon and Blind Alley. caught the attention of many. 34 “The Shrinking Ganga Glaciers” and “The Page The most notable event of the day was the
  • 35. LOGISTICS XPRESS MANAGEMENT Logistics & Supply Chain Management DEVELOPMENT PROGRAM Department, College of Management and Economic Studies (CMES), UPES. The Demystifying Supply Chain Vice Chancellor, UPES. Management Centre for MDP was inaugurated by Dr Parag Diwan, Management Development Professionals from industry and academia (CMD) organized a two day residential shared Management Development Program (MDP) contemporary issues in Logistics and Supply on Chain “Demystifying Supply Chain their expertise Management. on various Participants from Management”. University of Petroleum and various industries like automobile, pharma, Energy Studies is the academic partner of oil and gas, steel and Directorate of CMD for its support activities. The program Industries, was coordinated by Dr Neeraj Anand, Head- program. The sessions started by an overview of Benetton India Pvt. Ltd. This was followed Supply Chain Management by Mr Abhik by two interactive sessions by Dr Etinder Saha who is the Director of Supply Chain at Pal Singh a Professor at Apeejay School of the 35 attended Page Uttarakhand
  • 36. LOGISTICS XPRESS Management on “Outcome Driven Supply and way ahead for formulating upstream Chain Management” and “Supply Chain supply chain strategy for Indian Oil & Gas Strategy: companies. efficiency vis-à-vis Responsiveness”. The speaker focused on the multiple perspectives of supply chain management, outcomes that determine the supply chain performance, risks involved and achieving a trade-off between different variables in the chain. Chain Management and Dr Rameshwar Dubey, Secretary, Asian Council of retention and maintaining customer lifetime value. The next session by Mr Dabashish Sanyalo,GM-Supply Chain, Ranbaxy Ind insight about SCM Challenges and innovations of the future. This session was followed by a session taken by Prof Loveraj Thakru, Industry Fellow, Department of Logistics & Supply Chain Management, CMES, UPES focusing on “Upstream Supply Chain strategy for Indian Oil & Gas Industry”. Prof Thakru discussed the supply chain of Oil & Gas industry and gave an insight to participants on world scenario of oil and gas industry chain management cost reduction strategies. With a powerful blend of academia and corporate partners working together to achieve excellence in business education, the Management Development Program proved to be a grand success and was very much appreciated by the participants. Mr. K. B. Lal, Director – Finance was the chief guest for program valedictory was ceremony. supported by The Prof. G.C.Tewari, Emirates PVC, Dr. Neeraj Rawat, Assistant Director – CMD, members of Industry Relations and regional office, Mumbai. KRK Associates, publisher of Supply Chain India & Auto Logistics India was associated as Media Partner for the MDP. 36 discussed the use of CRM in customer an of Vendor Managed Inventory in Supplier Page from Dabur India Limited, Chandigarh provided Industries Limited discussed about the role Logistics Management discussed supply The third industry expert Mr Harish Sharma, Ltd Mr Ravi Inder Singh from Mahindra
  • 37. LOGISTICS XPRESS LOGISTICS AFFAIRS Livingston International Inc. completes acquisition of part of Global Trade business of J.P. Morgan By Jeff Berman, Group News Editor April 03, 2012 Livingston provides customs brokerage and customs compliance services for many of the major importers and exporters in the pharmaceutical and medical devices industry, as well as manufacturers of telecommunications equipment; semiconductors and other electronics; motor vehicles and automotive parts; and agricultural, construction and mining equipment, according to its corporate Web site. It also offers customs and international trade consulting services and international freight forwarding across North America and around throughout the world. In a letter to customers in January, Peter Luit, president and CEO of Livingston., said this Livingston‟s and service States and crucial and business to Based in Dulles, Va., Global Trade provides shippers with various global trade management services, focusing on the information flows related to cross-border components of importing and exporting goods. Its various services and software offerings are comprised of restricted party screening and boycott/embargo screening, landed cost calculation, shipment documentation, event management, export compliance, import compliance, and trade agreement optimization, among others. The company was founded in 1991. “What made this [deal] attractive was that we developed a strategic plan for our overall business and have been expanding our business in the U.S. significantly,” Luit told LM in an interview. “We were looking for ways to expand it and grow faster.” 37 Toronto-based Livingston said in January that it entered into an agreement to acquire this part of JP Morgan‟s Global Trade business. Financial terms of the deal were not disclosed. deal greatly expands international trade expertise offerings within the United Canada, and extends this growing part of Livingston‟s Mexico, Europe and Asia. Page North American customs broker Livingston International said this week it has completed its acquisition of the customs and trade compliance services of Global Trade business (also known as the former Vastera business) of JP Morgan Chase Bank, N.A.
  • 38. LOGISTICS XPRESS “Global Trade has offices in Mexico which we did not, as well as offices in several countries in Europe, which we did not, as well as small offices in the Far East,” said Luit. “We are expanding our footprint in these regions. In terms of customer benefits as a result of this deal, Luit said that they will see much Luit said a combination of 500 full time employees and contractors from Global Trade‟s customs and compliance services will be joining Livingston now that the deal is complete. When asked what the competitive advantages of bringing Global Trade‟s customs and compliance services into the fold are for Livingston, Luit explained how Livingston has a very unique market positioning. “If you compare us to [the competition], I would say we have the broadest and the deepest service offering of anybody, certainly in the North American market and Europe as well,” he said. 38 Livingston has offices in border crossings and large cities and prior to this deal had about 100 offices in Canada and the U.S. and that Global Trade has about 20 offices. quicker and more responsive to regulatory changes, changes in trading patterns, as well more quickly adapting to changes in business patterns and supply chain changes more quickly than either Livingston or Global Trade‟s customs and compliance services would be able to on its own. Page Luit also pointed out that Livingston has made a number of M&A acquisitions in the last year, which Livingston is excited about, adding that this one is different from the others. The reason for this is that Global Trade‟s customs and compliance services is very focused on large, multinational, U.S.headquartered companies. And he added that Global Trade and Livingston had some clients in common.
  • 39. LOGISTICS XPRESS Logistics Managers may be in short supply before long Experts said the brand perception of the industry needs re-invigorating and it is also seen as one of the most poorly paid and least diverse to work in Patrick Burnson, Executive Editor March 31, 2012 Panelists also predicted pay would continue to be low in the majority of jobs in comparison to other industries. In the UK for example, the average salary of someone in finance could be £51,620 but in T&L it‟s £28,022 – 46 percent less. In the U.S., a worker in the electricity/energy sector could earn $65,150 on average, but in T&L this would drop to $43,400. Klaus-Dieter Ruske came to some of the same conclusions drawn by scholars and executive recruiters participating in our annual Salary Survey: “T&L companies need to take a critical view of their remuneration systems,” he said. “They should benchmark their salaries against their peers and other industries and recognize salary alone isn‟t the only way to compensate employees.” REFERENCE http://www.logisticsmgmt.com/article/logistics_managers_may_be_in_short_supply_before_long/ 39 PwC created 15 theses which were presented to a panel of 94 senior executives from 24 countries working in business, government and the scientific arena. Over the course of eight weeks they studied the hypothesis and were asked to assess the probability of each one on a scale of 0-100 percent. “These findings are hugely significant for the T&L sector showing us what must be done before the industry falls into a critical state,” said PwC‟s global T&L leader, Klaus-Dieter Ruske. Poor image, poor pay and poor prospects are all perceptions that currently choke the industry. The reality is that there are rewarding, multinational opportunities out there that need tapping into.” Page A new report has warned the global transportation and logistics industry (T&L) is in urgent need of a radical transformation by 2030 if it is to stay competitive. In Winning the Talent Race, Volume 5 of PwC‟s Transportation & Logistics 2030 series, experts said the brand perception of the industry needs re-invigorating and it is also seen as one of the most poorly paid and least diverse to work in.
  • 40. LOGISTICS XPRESS TNT Express-UPS deal to come: sources TNT Express has since reported weaker than expected fourth-quarter results and given a bleak economic outlook.TNT Express declined to comment. UPS representatives could not be reached for comment. ($1=0.7677 euros) 40 "I don't think it will take several more weeks", one of the sources said.UPS had four weeks after it approached Dutch-based TNT Express to clarify its intentions under Dutch takeover law."Lots of concessions were made on the social front", said a second source, who is close to UPS."TNT performance is a big issue", the same source added.Dutch unions sent a letter to TNT Express's board after consulting employees on their concerns regarding an acquisition by UPS. Job protection, employment contracts and the location of the future company were among the main concerns, said Marc van Kerkhoff, who represents TNT Express employees. Price discussions were put on hold after the Dutch parceldelivery firm rejected a 4.9 billion-euro ($6.38 billion) proposal from UPS last month, and have yet to resume, the first and the second source said.UPS is confident that its bid for TNT Express will not meet significant anti-trust hurdles and would be approved by the European watchdog in phase 1, the second source said. Some shareholders are still hoping for an improved offer, but UPS is seen as unlikely to improve by much its last offer of 9 euros a share, given TNT's poor results and the absence of a counter bidder. Both parties have ruled out a potential counter bid from FedEx Corp (FDX.N) at this point, the sources said. Page (Reuters) - United Parcel Service (UPS.N) and TNT Express (TNTE.AS) are unlikely to announce a deal on Friday when they need to update the market about the status of their merger talks, but a deal could come soon after that, sources close to the talks said. The companies need more time to hammer out final details, but they are getting closer to an agreement and will say on Friday that they remain in discussions, the sources said.
  • 41. LOGISTICS XPRESS ANKIT LOGISUPPLY CROSS-WORD - II Phanindra Kumar. Bh, MBA LSCM Sem-II Page 41 This cross-word is of profound importance to us students of MBA Logistics and Supply chain Management as we present it in memorium of our beloved friend, Late Ankit Bisht who passed away recently in an unfortunate road accident.
  • 42. LOGISTICS XPRESS Across: 5. A wedge,made of hard rubber or steel,firmly 10. Pallets used in air transportation. placed under the wheel of a trailer, truck, to 11. A railcar with a flat platform and sides stop it from rolling. 7. A method of selecting and sequencing picking lists to minimize the waiting time of the delivered material. 9. merges the four distinctive competencies of cost, quality, dependability, and flexibility. three to five feet high, used for top loading long, heavy items. Down: 1. A term Toyota adopted to capture the idea of horizontal transfer of information and knowledge across an organization. 8. light assembly of components of parts into units. 6. A business process diagram which provides a way of indicating which department or individual is responsible for a given process or activity. 42 3. Labor management companies that provide equipment and hire workers to transfer containers and cargo between ships and docks. 4. A technique in which a ERP system traces demand for a product by date, quantity, and warehouse location. Page 2. A Japanese term for straighten,focuses on the need for an orderly workplace.
  • 43. LOGISTICS XPRESS ANKIT LOGISUPPLY HUNT-I: Phanindra Kumar. Bh, MBA LSCM Sem-II. K L X K U V P J B E V Q C I F U O B D M P B C J J H J T D I S S D G J E Y A W F I W H A R F A G E C N D N E P K N V D Y N Q M O N C U E L E C A B O T A G E K J E B I L R D N L B J I B K W A O K I I X C T U I Q P L U E T M T U C J Q Q A R E X E Z R I A P T R B J U H B K E G I E P R N I S A I I K N O H A G P E Q E L H H C G C Q Y K L O N E T N T W P A U A U U A O A E D B Q K C A I K B O S H H O T V P C S U C I L U A T U K A G P P P E Z S N N D B R J U L H B N K R Y D C U H Y B G Q Q P N M N V W H I I L I T Y Agility Backhaul Cabotage Haulage Heijunka Hopper Jidoka Keiretsu        KepnerTregoe Nixie Obeya PokaYoke Taguchi Ubiquity Wharfage Page         43 WORD LIST:
  • 44. LOGISTICS XPRESS Page 44 LOGISTOONS
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