ILAM (Indian logistics/ Chain and Aviation Management) NEWS BLOG

2016-08-09T01:37:00.002-07:00

Article on role of IT in clinical research

https://drive.google.com/file/d/0B_Q9jy0psFsfcExnXzZWYW9oTFRmLUNEc2xNTUhjQ185R2pB/view?usp=drivesdk

Introductory presentation on 4th of August, 2016 to MBA Students of Aviation, LSC and Healthcare management

2016-08-07T23:25:00.001-07:00

Dear MBA Student of ILAM, Galgotia University, from Aviation, healthcare and Logistics and supply chain management domain. It was indeed a pleasure to address you all to introductory session of 2016-18 batch. I am giving a link to my presentation of 4th of August,2016 for your reference.

https://drive.google.com/file/d/0B_Q9jy0psFsfZ3lxd1Z6NUtFYi1sQXN4cjJTMHdMNTZqSngw/view?usp=drivesdk

Prof. Akhil Chandra

Academic Head (Management)

ILAM, Galgotia university

Syllabuses for MBA Aviation, MBA logistics and supply chain and MBA Healthcare Management.

2016-08-07T22:51:00.000-07:00

Welcome ILAM, Galgotia new batch, 2016 to 2018 MBA Batches. I am giving links to syllabus for MBA Aviation, MBA, logistics and Supply Chain Management , and MBA Healthcare as under.

•

MBA AVIATION

https://drive.google.com/file/d/0B_Q9jy0psFsfOTc3TEZ3Qld1ZjRrY0l6WWhNT25jR3dNYTRV/view?usp=drivesdk

MBA LOGISTICS AND SUPPLY CHAIN

https://drive.google.com/file/d/0B_Q9jy0psFsfc0hvQ1U3RXhveWRZZk5ZbmtfTmZUNk1pQUJv/view?usp=drivesdk

MBA HEALTHCARE

https://drive.google.com/file/d/0B_Q9jy0psFsfMEw4WXlhTk9kSFAzZkZoZjkyRk9IZ3FWOF9j/view?usp=drivesdk

Happy Blogging

Prof. Akhil Chandra

Supply Chain challenges to Pharma industry and hospitals

2015-06-03T01:05:00.000-07:00

An Article on Supply Chain challenges to Pharma industry and hospitals

Healthcare sector is one of the largest and fastest growing sectors in the world. For this phenomenal growth, the prominent key drivers and the rising challenges are-

- Globalization and the advancement of information and communication technologies

- Patient safety and security

- Complexities in the supply chain due to rising demands from hospitals for pharmaceutical industries.

Supply chain management techniques which have successfully been employed almost throughout the segments of Industry are employed in health care sector also to face the above challenges. Like other segments, here also these techniques have successfully been employed to match supply and demand so as to supply the material in the right quantity, at the right place t right price, right product and most important at the right time.

Why Supply Chain approach to Pharma industry and Hospitals?

A popular notion is that supply chain concepts can be applied largely to manufacturing operations and are not applicable to service operations. But this is not true.Like every Enterprise, hospitals and health systems are equally under pressure to control their rising costs of supplies primarily locked up in inventories consisting of pharmacy, surgery, medicines and drugs and yet maintain their ultimate obligation in providing timely, efficient and effective treatments to their customers (patients). The supply chain costs represent today the second largest expenditure category of hospital’s operating expenses next to costly manpower. These costs are increasing exponentially due to –

· Growth in usage of medication and very expensive and very clinically sensitive devices and implants

· Service lines such as interventional cardiology and total joint replacement surgery using high value supplies such as supplants and drug coated stunts.

· The rise in IT budgets at healthcare institutions

· Increased cost of drug development, production and distribution

· Cost of packaging and labeling requirements of Drugs

It is as such important to have a close look on supply chain management system of hospitals with an Endeavor to make it efficient, integrated and synchronized. The subject popularly known as HSCM (Hospital supply chain management system) due to its potential in saving heavy costs and in satisfying patients has gained its prime importance in healthcare industry. Senior financial executives as such these days need to recalculate the strategic significance of the supply chain and plan accordingly

Inefficiencies in supply chain unlike in other domains of industry may result in extreme cases even into death of patients. As such apart from cost reductions, an effective supply chain is very vital to human life and its longevity. Ultimate objective of this subject is to manage materials/equipments and manpower like doctors, nurses and other supporting staff and treat patients and transform them into a healthy person at a reasonable and optimum cost in minimum time so as to satisfy their expectations through quality treatment. Innumerable flows between suppliers and customers, both upstream and downstream, have to be considered to strike a balance.

Supply Chain of Hospitals

Supply Chain ( also can be characterized as value Chain) of hospitals integrates suppliers, transport and warehouses and hospital services (including outpatient, emergency, in-patient, laboratory, radiology, stores and purchase, food, laundry and medicines /equipments) so as to serve the patients by optimum utilization of resources. The resources in terms of materials/medicines used in the hospital can be classified majorly based on their applications such as diagnostic, Surgical, Therapeutic, Bedside, Service, Engineering, Housekeeping and ICT.To substantially reduce supply-related costs, a hospital must develop a fully integrated enterprise wide supply chain in which all processes as mentioned above are coordinated and supported by state-of-the-art technology. A pertinent question which should be asked to hospitals is whether your organization delivers the right product to the right place at the right time and for the right price? If not then situation demands for a thorough check up of your processes and give your hospitals a treatment of ‘Supply Chain Management’.

How Improvements in supply chain in healthcare sector can be affected?

Basically the process improvement opportunities exist in five key areas: (1) contingency plans (2) supply chain integrity; (3) Demand pull model (4) Cutting down on too many intermediate partners (5) value visibility.
Contingency plans
As the supply chain involves factories producing medicines and diagnostic equipments, temperature controlled warehouses and distribution facilities to keep the material flow in order, what happens if a factory producing life saving medicine gets destroyed or the distribution facilities disruptions hamper the product flow endangering human life? The most effective action is to develop systematic contingency plans, including factors like alternative production sites, manufacturing flexibility, factory-direct shipping capabilities, offsite backup distribution center capacity, and critical safety stocks.
Supply chain integrity

Quality assurance, such as lot integrity and tracking, is a crucial healthcare supply chain function. It ensures that patients receive safe therapies, and that problems are contained and minimized. New technologies, such as radio frequency identification (RFID), offer the prospect of ensuring supply chain integrity. Through automatic identification, traceability and visibility tools, healthcare companies are given the opportunity to make the Healthcare supply chain more efficient and accurate, and thus safer by:

· Reducing medication errors

· Making counterfeiting more difficult

· Enabling efficient and effective traceability

· Decreasing the production and supply chain cost

It is important here to mention here that revolutionary technology of RFID can greatly contribute to the healthcare and pharmaceutical industry with Wi-Fi and voice over IP (VoIP), creating a single information system providing visibility throughout the supply chain. It track patients and hospital assets, improve patient safety, play a role in running clinical trials of drugs, manage critical care assets and hospital equipment, reduce counterfeiting of pharmaceutical products, reduce medical errors, and cut costs, thereby improving efficiency.

As a futuristic technology I would like to mention that in future unmanned flying vehicles as drones through aerial route would provide speedy delivery of crtical items like blood, medicines appliances to the hospitals enabled by the pharmaceutical firms. This would improve to fulfill the critical demands posed by hospitals on pharma industry towards patient life safety enabling doctors in performing critical operations in the operation theater.

Demand Pull Model
Healthcare supply chains need to move toward an integrated "demand-pull" model, so that manufacturers have much earlier visibility into actual consumption. In many other industries, this integrated supply chain system has enabled the participants to align production and distribution much more closely with actual demand. All the channel participants can see and understand what they need to do individually and together in order to successfully lower costs and increase service levels. Healthcare supply chains would free up tremendous amounts of valuable resources by adopting this channel model; important elements, such as ICT and process control systems to provide real-time information at point of patient infusion/injection, are now being put in place.
Cut down too many intermediate partners
The prospect of disintermediation, moving product directly from manufacturers to providers, is growing stronger in healthcare supply chains. This process offers important economic benefits. But it is only appropriate in certain situations, and it requires that manufacturers and providers develop new expertise and trust. To give a successful example from other segment of industry, Wal-Mart and Proctor and Gamble built a strong and sustainable relationship between them and the rewards were in terms of win-win situation for both of them to become world leaders in their respective areas.
Value Creation by individual partners
At present health care supply chains are fragmented and the current pricing structures and channel policies reinforce the inefficiency of this fragmented sector. Distributors negotiate volume discounts from manufacturers, and offer discounts to providers. What is important is to have trust in each partner and work towards common goal of value creation, which is the precondition for major improvements in supply chain efficiency. In well-functioning supply chains, each participant has an important role in creating unique, visible value as product flows from source to consumption. Instead of competing within the value chain, one supply chain of the hospital should compete with another value chain of the hospitals for sustainability, survival and competitive advantage..
Conclusion
Supply Chain Management in other industries has got its due recognition and this subject now is considered to be a board level topic to solve intricate and new challenges rising in this critical segment. Now conditions are right for another round of major healthcare supply chain improvements due to pressure on management to reduce costs and increase efficiency and have a customer responsive approach. This has happened especially after hospital chains of multinationals have arrived in India. Healthcare budgets are very tight, supply chains have critical vulnerabilities, and providers have significant opportunities for much-needed process improvements. The supply chain as such should be part of the enterprise strategic plan, incorporated across all components and service lines of hospitals. A hospital's or health system's strategic plan should include supply chain management as a key strategy for maintaining fiscal goals, improving quality and satisfaction levels, and addressing industry trends and developments. There is a tremendous scope of applying IT, telecommunication techniques and Automation in hospitals. The mantra is to concentrate on improving efficiency, quality, and responsiveness to patients and apply innovative methods of supply chain coupled with technology to achieve the end goals.

Written by Professor Akhil Chandra

Emerging trends in supply chain management

2015-06-03T00:52:00.000-07:00

Emerging trends in supply chain management and its impact on the Industry

The fierce and cut throat competition after globalization among the industry players and availability of IT and process automation technology applications to the industry has made topic of supply chain management most relevant to the industry as never before. Supply chain management is now a board level topic for the corporates as it directly impacts their bottom-line and a better managed supply chain for a company is a competitive advantage to them. Needless to say that it is a key to their long term sustenance. It is as such important to have a look on the rising trends in this vital area and its crucial impact on the modern business so that industries realign their process and maximize their revenues and ultimately their profits. I am as such summarizing few bullet points so as to give a summary to these rising trends in this most vital area.

· Customer centric approach in the entire value chain right from suppliers to manufacturing to warehouses to Retailers. Impact on the industry is to match supply and demand resulting in lesser inventory costs resulting in increased profits and more sales due to better customer satisfaction. Example in industry are Dabur, HLL , Procter & Gamble, Maruti, Mahendra & Mahendra, Future group and Tata group etc.

· Trend of outsourcing functions like warehousing and transportation giving rise to 3PL and 5PL service providers in the industry with focus on cost reductions and better service to customers.

· Suppliers are treated as partners resulting in suppliers taking keen interest in supplying quality components to production units well in time taking keen interest in order processing. Impact on the industry is improvement in efficiency of production units manufacturing better quality products with shorter delivery time.

· Logistics in manufacturing industry is getting recognized most important function after product development as there is significant volume of goods movement both inbound ( components and material sourcing) and outbound ( product distribution ).

· Trend is to emphasize on quality, Efficiency, speed, Innovation and responsiveness to customers by all partners impacting the availability of better products with increase in Sales volume of the industry and more market share. The new Mantra is to provide right product at the right price , at the right time and at right place.

· New trend in supply chain management is to insist on VISIBILITY from end to end in entire value chain. This is made possible through introduction of information and communication technology with help of ERP, RFID, GPS, EDI, VMI (vendor managed inventory) technologies through internet. Industries are embracing ICT technology with ERP software modules like WMS,TMS,CRM,SRM and CRM

· With impact on visibility, 3PL service providers are embracing ICT (Information and communication technology) offering tracing and tracking capabilities monitoring carrier’s performance in terms of carrier’s pick ups and deliveries.

· 3PL service providers are becoming flexible in accommodating emergency and contingency requirements of manufacturing companies.

· Rise of Cold chain management for agricultural and horticulture products which are perishable and temperature sensitive impacting emergence of new industries in FMCG sector.

· Supply chain management concepts are equally applied to service industry just like manufacturing in areas of healthcare, hospitality, tourism and food chains impacting the industry with better customer care giving rise to focus on customer relationship management.

· Rising trend of green supply chain management to create environmental friendly products by industries right from inception of product up to its consumption.

· Rise of ‘Big Data’ collected through information technology in terms of large text and picture files, video clips and transactional data of customer giving rise to predictive techniques about customer behavior helping companies to cover up their lost sales and maximizing capacity utilization of their process.

· Innovation is being emphasized giving rise to Industry-Academia interfacing to create better product developments and trained manpower.

· Manufacturing companies are changing the culture of ‘push sales’ to ‘pull based production and supply systems with emerging trends of SCM.

· Introduction of Just in Time and KANBAN technique for pull based procurement

· E-Tracking of transportation vehicles on Google maps.

· Introduction of lean manufacturing environment with a total quality management approach throughout the production unit.

· Industries are changing their culture in different departments of manufacturing from ‘my department’ to ‘our customer’ approach.

· With focus on supply chain management industries are integrating all relevant departments under one banner.

· Industries are embracing ‘change management’ involving changes in measure of performance, planning process, execution process, ERP, MIS and communication systems.

· Industries are focusing on reduction of costs and product manufacturing time with increase in Sales and higher profits due to cost reductions through new trends in supply chain management.

Written By

Professor Akhil Chandra

Consultant Logistics and supply chain management,

Institute of Logistics and Aviation Management

ICRI, Okhla Phase II,New Delhi

Effect of GST(Goods and service tax) on warehousing

2015-06-03T00:49:00.003-07:00

When one looks back the past years , there are good times and bad times both. We still cannot forget that India had reached GDP growth rate of nine per cent few years back which gives certainly a confidence to Indians that nine per cent growth rate and beyond is an achievable target. Unfortunately this story of growth was spoilt by systemic corruption and too much subsidy distribution during UPA II regime. Success story of allowing FDI in Automobile sector and Telecommunication and partially in other areas coupled with liberalization during the last decade brought foreign competition in India and consumers in the country had a taste of quality products. This rightly raised the demand for quality products. During this churning period many domestic companies perished because they could not face the foreign challenge and unfortunately Government at that time too did not do much to encourage manufacturers from supply side. Manufacturing remained mere fifteen per cent of GDP. The last year was really tough for the country and Indian industry. GDP growth started dwindling below five per cent and current account deficit started moving up with dollar exchange rate to Indian rupee touching even to seventy making things really difficult.

For looking ahead with a positive outlook and hope, last six months of stable government of Modi have certainly given reason for the optimism and with rising Sensex , it is evident that investors both foreign and Indian have welcomed the steps taken by new regime and market sentiments are now high .

Still much more needs to be done. The country is lucky too as Year 2015 is a year where fortunately inflation is at its lowest thanks to the sharp decrease of oil prices globally and the GDP growth once again is on the upward trend reaching now beyond 5.2 per cent. People expectations are now high in the year ahead and growth model of Modi government have many takers in the new environment of hope and optimism prevalent in the corporate sector and among all the participants.

For the Logistics sector now there is lot to cheer about too. New regime has focused its all-out efforts on manufacturing sector with launch of ‘Make in India’ program coupled with efforts to improve logistics infrastructure of ports, roads and rail. This has opened new opportunities to third party logistic players in the area of inbound logistics. Needless to say that unless inbound logistics succeeds, the challenge of rendering cost effective manufacturing shall remain a distant dream and we shall not be able to meet the competition brought out by foreign products especially from our neighboring country China bringing out products with value for money approach. The new reforms of land acquisition and labor reforms by the government of India though brought through ordinance are efforts in right direction for improving manufacturing in India.

Further Government is quite serious about implementing goods and service tax which would be a boon for incorporating large and state of art warehouses and logistics industry as a whole.

E-Commerce is really booming with players like Flipkart, Amazon.com, Myntra , Snapdeal and many more new kids on the horizon. This is really good news for third party logistics players. State of art warehouses and transportation facilities with speed are a key for success of E-Commerce. The 3PL players have really now lot to celebrate for expansion in growth opportunities with this new development and the good news is that they are rising to the challenge.

Year 2015 is a year of optimism, faith and growth as country in this year is poised to become 2 trillion dollar economy.

Written by Prof. Akhil Chandra

Consultant ; Logistics and supply chain management

Article on Supply Chain Management and Business Logistics

2014-09-19T21:37:00.000-07:00

Article on Supply Chain Management and Business Logistics

INTRODUCTION

With ever increasing globalization and rising customer’s expectations, logistics and supply chain management is emerging as a definite competitive advantage for the corporate world. This is a new weapon in hands of business organizations for reduction of logistics and manufacturing costs resulting ultimately in higher ROI, increased customer’s satisfaction and delivery of highest value to shareholders. In today’s globalized world companies have to align their business strategy with their supply chain strategy so as to survive the new cut throat competition.

Supply chain management concepts are relevant to both manufacturing and service organizations and are applicable to even entire nations. Nations are striving hard to bring down their infrastructural and logistics costs so that industries can manage their supply chains most effectively.

In Indian context the logistics costs alone are around 13 per cent of our GDP and must be brought down to the order of ten to eleven per cent comparable to Europe and Japan. In developed countries like U.S. , the logistics costs are as low as 9 per cent. India’s GDP has grown now to one trillion dollar and there is thus huge scope to save supply chain costs if we improve our infrastructure comprising of better Ports, roads and railways.

Historically companies tried to reduce their business operation costs under different names like Material management, physical distribution, transportation management, and logistics but each segment worked in silos and missed an integrated supply chain approach leaving a huge scope of cost reductions. Modern supply chain management concepts take a unified approach combining customers and end users, suppliers, manufacturers and intermediaries like distributers, dealers and retailers resulting in not only reducing costs but in increased sales due to a unified customer centric approach.

Scope of cost reduction is enormous and ranges from 60 to 80 per cent of a firm’s Sales income and is essential for a firm’s competitive strategy and revenue generation and involves activities like transportation, inventory maintenance, order processing, purchasing, warehousing, materials handling, packaging, customer service standards and production.

New leadership in our country led by our Prime Minister Mr. Narendra Modi as evident in the current budget is taking vital steps to focus on manufacturing and improvement of country’s infrastructure comprising of dedicated freight corridors of both rail and roads and new sea ports. As such supply chain concepts must be applied vigorously both in manufacturing and service sector so as to put back India’s growth story back to 9 percent from current 4.5 per cent of GDP growth.

Basic understanding of Logistics and supply Chain Management.

Logistics is the process / chain management of transport flow and the storage of goods and services from its origin to it consumptions. It includes both inbound & outbound movements and does not include activities such as forecasting and procurement.

Supply Chain Management (SCM) is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. SCM involves coordinating and integrating these flows both within and among companies with the objective of making products available when needed.

Supply chain management can be divided into 3 main flows:

· Product flow

· Information flow

· Finances flow

The above schematic shows the basic supply chain process divided in various stages involving inbound logistics, manufacturing logistics, supply logistics, distribution logistics and after sales logistics. The Reverse logistics flow as shown in the diagram is for the return goods which can be recycled by production units to be sent back again to the market place.

Scenario of new supply chains is changing fast due to the following factors.

• Global competition

• Well informed more powerful Customers

• Customer Expectations

Emerging trends in supply chain management and its impact on the Industry

Some Bullet Points

· Trend of outsourcing functions like warehousing and transportation giving rise to 3PL service providers in the industry with focus on cost reductions and better service to customers.

· New trend in supply chain management is to insist on VISIBILITY from end to end in entire value chain. This is made possible through introduction of information and communication technology with help of ERP, RFID, GPS, EDI, VMI (vendor managed inventory) through internet. Industries are embracing ICT technology with software modules like WMS,TMS,CRM,SRM and CRM

· With impact on visibility, 3PL service providers are embracing ICT offering tracing and tracking capabilities monitoring carrier’s performance in carrier’s pick ups and deliveries.

· 3PL service providers are becoming flexible in accommodating emergency and contingency requirements of manufacturing companies.

· Cold chain management for agricultural and horticulture products which are perishable and temperature sensitive impacting emergence of new industries in FMCG sector.

· Rising trend of green supply chain management to create environmental friendly products by industries right from inception of product to its consumption.

· Innovation is being emphasized giving rise to Industry-Academia interfacing to create better product developments and trained manpower.

· Manufacturing companies are changing the culture of ‘push sales’ to ‘pull based production and supply systems with emerging trends of SCM.

· Introduction of KANBAN for pull based procurement

· E-Tracking of transportation vehicles.

• Shorter product life cycle

• New, low-cost distribution channels

• Internet and E-Business strategies

In supply chain management concepts, suppliers are treated as partners and all the customer’s information is shared with dealers, distributers, manufacturers, transporters and suppliers so as to provide VISIBILITY to all the stakeholders of supply chain. It must be borne in mind that it is the lack of visibility which increases risk, cost and order execution time for the company. The visibility about customer’s orders, stock inventory at all points and transportation during its various modes and

routes is made possible through heavy use of Information and communication technology involving internet, telecommunication, ERP, and process automation embedded with technologies like EDI, BAR CODE/RFID and GPS technology. This helps companies in matching the supplies affected from manufacturing units to the demand made from customer thus reducing the huge inventory costs locked up in warehouses and transportations.

Supply Chain Objectives

Enhancing Customer Service
Expanding Sales Revenue
Reducing Inventory Cost
Improving On-Time Delivery
Reducing Order to Delivery Cycle Time
Reducing Lead Time
Reducing Transportation Cost
Reducing Warehouse Cost
Reducing/Rationalize Supplier Base
Expanding Width/Depth of Distribution
Having Products in Stock

Companies achieve a paradigm shift in meeting their objectives while collaborating with their supply chain partners and synchronizing their operations. Technology becomes the key enabler for innovative supply chain strategy. Supply chains are restructured and reskilled to achieve the goals. Collaborating with partners in a single supply chain also means that partners must not dispute for individual profits but participate in overall success of their supply chain.

How Wal-Mart managed it.

Company like Wal-Mart applied the rules of Global supply chain Management successfully and rose to become number one company in the world after beating big Conglomerates like K-Mart and Sears in their own game. Wal-Mart chose their suppliers globally from countries like China and Far East and cut down its procurement and manufacturing costs and could sell every item cheaper than their nearest competitor. Wal-Mart carried out computerization with heavy use of ERP (Enterprise Resource planning) software throughout their value chain and shared the customer’s information liberally with their suppliers, distributors and dealers through IT networks resulting into complete transparency throughout their value chain. The information concerning the buying behaviour of customer, purchase orders, prices and inventory flowed both way along the value chain resulting into reduction of inventory carrying costs both for finished goods and raw material. Wal-Mart could thus supply what customer exactly wanted at the right place, at the right time and at the right price.

With customer centric approach, Wal-Mart set up huge distribution centres in every city where merchandise in cartons were received from various suppliers chosen globally shipped by sea, Air or Rail Road and trucks and then unloaded on the network of conveyer belts installed at the distribution centres. The merchandise was redistributed despatching and transporting it once again to the various Malls located throughout the city. The history of content of the cartons was identified by RFID tags with information like country of origin, technical details of the content, source and destination, expiry dates of the goods inside and temperature to be maintained. This enabled the concerned handling staff to properly prioritize the cartons carrying perishable items or items like medicines and deliver it to Malls before the expiry date. This way they could make most of the items including FMCG goods always available on the shelves for the customers who came to Wal-Mart in huge numbers because of lower prices being offered. Wal-Mart was also ahead of their competitors in reducing the lost sales arising due to non availability of goods on the shelves.

Global supply chain management is now imitated by most of the companies in the world after the success story of Wal-Mart who starting from a small place called Bentonville, Arkansas in

United States

is now world’s largest company in the world with innovative approach of Sam Walton , the man behind the success of Wal-Mart.

Case of Boeing, the Aviation Conglomerate

Today the supply chain is no longer contained within countries borders, but encompasses all nations, whether they are vendors, manufacturers or customers. Boeing which is a premier Aviation multinational manufacturing aircrafts is able to assemble the Aircrafts in 3 days flat while outsourcing most of the parts and components from suppliers located far and wide throughput the world. It takes advantage of best of what is available in different countries in terms of best of research and development facilities, cheap labour, skill set and technology and coordinates its value chain amazingly well to maximize its production delivering aircrafts of topmost quality in an unparalleled innovative approach.

VARIOUS SUPPLY CHAIN STRATEGIES FOR COMPETITIVE ADVANTAGE

1. Inventory Strategy

This involves the following.

· Forecasting

· Inventory decisions supported by IT

· Purchasing and supply scheduling decisions

· Storage fundamentals like ABC analysis etc.

· Storage decisions and cold chain management

2. Location strategy

This involves location decisions involving warehouses and manufacturing units vis. a vis. Suppliers and marketplace

3. Transport strategy

Here decisions like route selections and modes of transport (air,sea,rail or road) are taken with cost, time and type of product in mind.

4.Service improvement strategy

The strategy usually recognizes that revenues depend on the level of logistics service provided like through ERP systems with modules like CRM ( customer relationship management). Examples are Call centers and hospitals in service industry.

5. Postponement Strategy

Benetton used to follow the traditional way of making hosiery: dye the yarn (fixing the colour) and then knit the fabric (fixing the style) but research on customer data showed that-

1. Understanding customer behaviour showed that it was easier to predict style choices than colour choices.

2. Consequently, they evolved a technology to change the production sequence for their single colour fabrics to first knit and then dye.

3. This enabled the supply chain to be aligned with the market behaviour choice.

6. Delayed Differentiation strategy

• By acquiring a technology that enabled mixing of colors and base paints to get the appropriate shade in a few minutes, Asian Paints obtained a competitive edge by delaying their differentiation resulting in Retail inventory costs coming down while at the same time, product availability going up.

Supply chain management helps environment (Green supply chain)

Further all over the world there is a growing realization of making world green by avoiding the harmful effects on the environment due to pollution caused on air, water and soil during process of extraction, manufacturing operation, physical distribution and logistics by sea, air, road and rail and consumption of the end product by consumers. Multinationals all over the world are focussing on Green supply chain management involving negotiating policies with suppliers and customers resulting in better alignment of business processes and principles so as to improve the environment and ecology. Wal-Mart, world’s largest Retailer enforces his suppliers to follow green supply chain policies making it mandatory on his suppliers to revaluate the material content and adopt environmental practices so much so that it refuses to do business with defaulters who do not follow green practices and environmental management systems. Green supply chain management mitigates risks and speeds up innovations. Recently Chinese toys were banned by America including other countries as they were found hazardous to children due to harmful ingredients used in making of the toys. Such risks could have been avoided had the Chinese toy manufacturers studied closely the product life cycle management up to the stage of consumption. In global supply chain management, companies as such can ill afford to ignore green supply chain.

Importance of Infrastructure

Infrastructure in terms of good port facilities both for sea and air route, mobility on roads and good telecommunication infrastructure plays a vital role in handling global supply chain. Wal-Mart used Satellite communication very effectively in terms of VSATs installed in every store in reaching their Chinese and Taiwanese suppliers sharing the information such as inventory, customer’s buying behaviour and Sales data. Apart from that they used ERP software with modules like warehouse management system, transport management system, supplier relationship management and customer relationship management system to name a few. They forced their suppliers to adopt EDI

(Electronic data Interchange) saving on time and improving responsiveness to the customer’s needs.

Indian Scenario

Indian business conglomerates are now expanding their operations beyond the frontier of the nation and many like Tatas, Reliance and Bharti Group have taken over foreign companies. In this background of Indian expansion of trade in foreign countries, supply Chain Management shall play a very vital role towards long term sustenance and growth of Indian business.

Some of the successful companies who have applied supply chain management successfully are as under.

Automotive - Telco, Mahindra & Mahindra, Maruti

Chemicals - Asian Paints, Apollo tyres , Reliance

Apparel - Madura Coats, Reliance

Food - Cadbury, Parle, Amul Products, HLL

Consumer durables - HLL, P & G

Construction - L & T

Pharmaceutical - Ranbaxy, Glaxo

Electromechanical – Kirloskar, L & T

Tooling - HMT, Widia, Mico

PC/ Computer - IBM, WIPRO, HCL, Intel

As the global supply chain becomes more complex with every passing year, companies must adapt to this change and incorporate them into their supply chain strategies. This change could mean using vendors from developing nations or exporting goods to new markets. Companies that have traditionally operated within national or regional trading groups may feel ill-equipped to extend their supply chain. Such closed door operations without knowing what is happening elsewhere in the world can be fatal and even shall be detrimental to their survival if they are unable to select and manage a foreign vendor or not knowing how to sell items in a new country. On the infrastructure front in India so much is happening with improvement of airports at Delhi, Mumbai and Bangalore and Aviation cargo hub at Nagpur and privatisation of sea ports like Mundra and Tuticorin ports and dedicated Rail networks for freight. Telecommunication infrastructure with Wi-Max and 3 G facilities in the country shall improve the connectivity and solve last mile problems for Logistics 3 PL Companies giving impetus to international connectivity as well. Indian Companies are now more receptive to ERP implementation with companies like SAP, Oracle and the home grown software companies. Time ahead is interesting to watch in India as Indian companies are bound to join international supply chain Conglomerates.

Written By.

Prof. Akhil Chandra

Government Certification in Logistics –Vskills Certified Logistics Professional

2013-10-04T00:32:00.002-07:00

Government Certification in Logistics –Vskills Certified Logistics Professional

ICSIL, a Govt. of India PSU has launched a certification in Logistics and Supply Chain
Management. Vskills Certified Logistics and Supply Chain Management Certification are
targeted at students and professionals, who want to build a rewarding career in this domain and
want to certify their prior learning. ICSIL stepped into the certification area primarily seeing -
the need in the market for benchmarks - for employment generation, and also as a responsibility
of the government to be present in areas where confidence in a certification is paramount.
Speaking on the launch of Logistics and SCM certification, GK Nanda, CEO ICSIL said, “There
is a need for a coordinated effort to reduce the employability gap and address the structural
issues of job demand in the new age sectors. It is a welcome initiative to enable job seekers to
accelerate their career by providing them certification and a rich cross-learning experience”.
“With skill development and employability increasing grabbing attention a collaborative
approach by government, industry and corporate is required to bridge the skill gap and increase
productivity and output.” says Jasneet Singh, Managing Consultant, Vskills
Anyone who aspires to earn the certification can register online by paying a nominal fee and then
appear for the exam at any of the listed centers across India. Even international candidates can
appear for this exam through an online testing platform.
The certification open avenues in various sectors and gives a chance to get certified in areas
where one is not formally educated. The Certifications do not require any time commitment
since it is only a test and not classroom teaching. In addition, CVs of certified candidates are
flagged on Monsters website as "Vskills Certified candidates" and are shared with relevant
employers increasing chances of employment. Each year, thousands of practitioners pursue
Vskills certification with a motive to enhance their chances and boost employability. The
programs are continuously reviewed to ensure that they meet current industry needs and provide
desirable credential for professionals pursuing the certification “for career advancement.

Strategy for Logistics companies when Rupee is falling

2013-09-24T08:28:00.003-07:00

Strategy for Indian Logistics companies when Rupee is falling (comments published in Logistics Times, September,2013 issue)

The continuous slide of Indian Rupee against Dollar is a cause of concern and shall have some definite effects on Indian logistics business. One has to move from disadvantageous situation created due to free slide of the Rupee and focus the efforts to the areas where new opportunities shall get created during this state of crisis. It can be a blessing in disguise for some.

Policy makers are striving hard to contain current account deficit (CAD) and all out efforts are on to contain the import and increase exports and check the volatility in the foreign exchange market..

In order to curtail imports, Government of India shall have to revitalize manufacturing sector which unfortunately during last few months is showing even negative growth. Existing manufacturing companies also shall have to resort to cut down the imported content and find indigenous ways. This shall require innovative ways and new R&D efforts for survival.

Here lies the opportunity for logistics companies to strengthen inbound logistics which can prove backbone to the manufacturing companies by transporting raw material and components required by the shop floor of manufacturing company at the right time, at right quality and at right price.

While outbound logistics is at a fairly matured stage in our country, inbound logistics is still at a nascent stage and it is the right climate now that logistics companies tie themselves up with manufacturing companies closely for a long lasting relationship with them.

Other opportunity for logistics companies lies in earning foreign exchange for the country and cross the national frontiers and provide consultancies in neighboring countries like Bangladesh, Nepal or African countries and nearby middle east countries to start with.

On the export front, as a matter of fact our performance since last 12 years has been quite impressive and is much higher at 20 per cent than the world average of 12 per cent but our imports have grown still higher touching the rate at 28 per cent. So logistics companies which are tied up with exporters shall still have to work harder to help existing exporters to expand their business and become competitive in terms of efficiency, time and service.

Few foreign companies may have to run away from the country as probably their royalty payments etc. in dollar term may go down and that space must be filled up by big and tough indigenous players both in manufacturing and logistics sector. When things start becoming tougher it is the tough who get going.

Prof. Akhil Chandra

Consultant Logistics and supply chain management

ZERO INVENTORIES AND JUNGLE MANAGEMENT

2013-09-23T23:34:00.001-07:00

A STORY ABOUT ZERO INVENTORIES AND JUNGLE MANAGEMENT

Once upon a time, there lived a sorceress and her son. They lived in a very fertile jungle by accident and ruled over its inhabitants consisting of peaceful birds and animals like wild bears, elephants, rabbits, squirrels, tortoises and peacocks, beavers, flamingos, parrots and nightingales etc. Sorceress had a sheepish tiger, few wolves and jackals and some cunning foxes as a coterie of her cronies to help her to rule over the animals and birds that were very hard working and spent most of their time to collect the produce of jungle and deposit it in the treasury and warehouses of the sorceress and ate what was allowed by the sorceress to consume. All the produce of the jungle first used to be carried to sorceress and then she used to distribute it from the treasury according to her whims and fancies without bothering for future to stock. She ruled over them with a policy of divide and rule. She created discrimination between brown animals and black animals or white birds and colored birds and succeeded in keeping them divided based on their color.

Sheepish tiger that was made king by the sorceress was very obliged to her and loved to remain loyal and faithful and transferred all his powers to the sorceress. Sorceress was cunning and she too usurped all the powers of king and chose personally all the courtiers of the king. Sheepish King tiger was stupid and did not mind it. He had a reputation of being honest but he was very timid and spineless. As Sorceress was not directly involved and ruled from behind, she used the sheepish lion as her shield. The knave king that he was , took all the blame on himself arising because of nepotism and corruption practiced by sorceress. All the king’s couriers colluded with the sorceress indirectly and looted the treasury. Sheepish tiger had become almost as a punching bag in his kingdom and slowly animals and birds started hating him. In-spite of all the blame put on him for the misdeeds of his courtiers and sorceress, He worshiped the invisible sorceress as he was very scared from her spells and treated her like a goddess and often prostrated before her. In true sense he was merely a puppet in the hands of family of the sorceress.

He was only for name sake a king but still enjoyed the un-elected post given to him. Jackals and foxes knew the weakness of their king and took full advantage of it and kept a direct contact with sorceress and her son. This helped them to curry extra favors from the sorceress and sorceress too enjoyed their sycophancy and allowed them to keep part of the produce for themselves adding to the huge corruption in the system. None of the creatures of jungles had seen the sorceress and she used to keep an extremely low profile and rarely came out of her fortress and very few were allowed to meet her in person.

In the jungle lived also a huge python who was lazy but he acted as an arbiter of justice as agreed by all the inhabitants and sorceress too because he had divine powers given by God Almighty. But for most of the time he slept for months or even for years. But once awake it used to settle disputes and tried to maintain some semblance of justice but again used to get lost in deep slumber sometimes for years together that too without announcement.

Inhabitants of the jungle had no option but they waited and prayed to God so that python could wake up again accidently to solve their problems. They cursed their fate and many of them died with justice denied. Sorceress took full advantage of the interim period and her coterie looted the treasury and sometimes threw part of the leftover to the hungry animals and birds to pacify them and remain in power without inviting any revolution from the ill-fated miserable inhabitants of the jungle.

Python had appointed a falcon to investigate the corruption carried out by the coterie of sorceress and as the python had huge faith in the investigatory power of the falcon, he often slept soundly.

Sorceress had lot of tricks up her sleeves. She clipped the talons of the falcon and tied its feathers and bounded it in a cage. Then she turned the falcon into a parrot because she knew parrot would speak what it was trained to speak by her cronies and parrot did really what it was told whenever it was called by the python to report on investigation on corruption . Python had lot of faith on the falcon nay the parrot and whatever parrot spoke, python believed even without opening its eyes. This went on for long because this time python really slept undisturbed believing that falcon would keep a check on the nefarious designs of the coterie of sorceress.

Over the years as fate would have wanted, talons of the falcon and feathers started growing again as a natural process. But falcon believed that he was still a parrot as he was after all under the influence of the spell cast by sorceress.

In the meantime corruption had reached its nadir and jackals and foxes were openly filling their coffers for their kith and kin and there was huge hue and cry all around in the jungle and everybody protested and heaved with pain due to hunger arising because of the onslaughts of corruption. This disturbed the python’s sleep and he woke up from his deep slumber. He called the falcon but was quite dismayed to see the miserable condition of falcon and was quite amused. He got a further shock of his life when python questioned about its investigation on corruption only spoke like a parrot as trained by the coterie of sorceress.

Python rebuked the falcon telling him that he was nothing but a parrot and had too many masters. As python had divine powers, he converted the falcon back to his original shape giving him his new talons and a sharp beak and asked him to reinvestigate the corruption. Falcon realized his mistake and it too acknowledged that he really behaved during all this time like a caged parrot as dictated by its numerous masters. Then python again slept as it was summer holidays to fall and it loved sleeping.

Falcon went back soaring up in the sky and it wheeled and dived in the free air under the azure sky and bright sunshine. His eyes were sharp as ever and he looked in every nook and corner of the jungle. He soon found out his prey and really caught few jackals red handed deeply immersed in corruption with their pants down. Falcon was amazed at its speed and alacrity and thoroughly enjoyed catching the culprits. This alerted the sorceress and her son and they decided to do something and somehow put the blame once again on the timid king.

The jackals who were caught complained to sheepish lion that why should they be punished when they were only trying to protect their holy king. Sheepish lion too thought that it was none of his fault and neither of jackals because the real beneficiaries were sorceress and her son.

Sorceress and her son ordered the sheepish lion king to remove the so called corrupt jackals immediately as their reputation was dwindling rapidly. Sheepish lion that was timid could not protect his comrades and had to issue the order to remove the few jackals that were found culprit by the investigating falcon.

Sorceress was convinced that sheepish lion was proving to be a liability and decided that it was high time that she replaced the sheepish lion with her son as king .But the son was reluctant and was not as sharp as his mother and continued to evade the responsibility. He in fact had a dull mind. This enraged the sorceress however she reminded her son not to worry and she will take care of all the perils and shall depute wolves around him.

Wolves were shrewd and they advised sorcerer that there could be a revolution as there was lot of discontent among poor and weak animals and birds of the jungle because of exposure of corruption and they would one day attack her fortress.

She was ready with the solution and declared that all the poor and weak animals shall be given free food and they need not work. This emptied the treasury once again and there were zero inventories of the eatables in the warehouses and nothing was left for future to survive especially during floods and famines which were frequent in the jungle.

READERS, PLEASE COMMENT ABOUT LOGISTICS OF THIS JUNGLE MANAGEMENT

talent crunch in Indian Logistics industry

2013-01-12T04:09:00.001-08:00

Talent Crunch in the Logistics Industry

With smooth passage and approval of FDI policy for multi-branding retail from both Houses of Lok Sabha and Rajya Sabha ,thanks to the support of SP and BSP parties, Indian logistics and supply chain industry is to witness huge spurt in investments to be initiated by multinationals towards improvement of back end infrastructure, made mandatory by government of India in terms of state of art warehouses , cold chain and technology managed supply chain initiatives both inbound and outbound. This shall however require huge trained and skilled manpower in the field of logistics and supply chain management. Sadly lack of trained manpower in the country and matching this burgeoning demand may prove to be as challenging as cleansing of Augean stables .

In most of the Logistics seminars conducted in the country by CII and others, captains of industry and logistics honchos have repeatedly pointed out this lacuna but little has been done in this area by the various stake holders including Government, private industry and academic institutions.

Industry suffers from acute talent shortage and there is a huge gap between supply and burgeoning demand of trained manpower both in terms of quality and quantity. The Indian logistics industry has been growing at a faster pace and is likely to cross the $200 billion figure by 2020. However talent crunch remains a wide gaping hole and shall prove to be the biggest impediment towards path of progress of Logistics industry.

I would enumerate few reasons for this sorry state of affair, which are lack of funds with private academic institutions, lack of quality teachers with industry experience and lack of general awareness about logistics industry among students seeking admissions resulting only in in-take of mediocre students opting for logistics as area of specialization for their undergraduate and post graduate courses.

First, I shall talk about academic institutions. Some are born great and some achieve greatness and on some mediocrity is thrust upon them. Indian academics circle in this area encompassing both teachers and taught barring a few suffers from mediocrity and one can only lament the sorry state of affair because mediocrity has been thrust upon them. There is a dearth of institutions providing degrees in area of Logistics as a core subject. Even IIMs do not offer regular post graduate courses in area of Logistics and supply chain management with a few exceptions of only advanced and short term courses or as a mere subject in core disciplines..

Due to lack of availability of talent, industry continues to employ people with general background rather than with much desired specialization. Some big players in this industry have started imparting in-house trainings to new entrants through customized courses but there is almost a time lag of one to two years before the trainees start contributing to the organization in a matured manner and industry now can ill afford this delay. What industry needs now is a ready made recipe of trained manpower so as to deliver the ROI faster as would be demanded by the shareholders of new investments in this industry.

As such a lot has to be done to towards imparting right education by government with efforts like fresh and quick approval of new academic institutions imparting skilled education at all levels including diploma, undergraduate and post graduate courses with compulsory and regular industry academia interfacing in both directions of academics to industry and vice versa for which salaries of teachers are to made attractive to attract people with industry exposure.

Existing educational institutes which are facing severe cash crunch must be given subsidy by government to modernize their educational system. Incentives by government should be provided to open new institutes providing vocational and skilled trainings and degrees. .

The awareness of importance of Logistics and supply chain management in the minds of public and students and the potential it has for bright careers has to be created by the combined efforts of government, industry and academic institutions. Efforts of CII through its institution of Logistics have to be further strengthened and expanded throughout the country. Present image of Logistics industry must be wiped out which is Moreover, because of the false and poor image of logistics industry as if industry belongs to truck drivers, the industry is not able to attract students seeking sophisticated jobs and female workforce into it.

Logistics and supply chain management has to be recognized as a board level subject as it encompasses the whole gamut of business environment starting from conceptualization of the product and encompassing all areas up to its consumption involving suppliers, manufacturers, logistics providers, dealers, stockists, retailers and consumers. This discipline as such offers tremendous career growth opportunities to new students seeking admissions and new employees can even rise to the level of CEO coupled with the exposure of entire business environment experienced at a macro-level.

It is hoped that retail revolution in the country unleashed by policy approval of multi-branding by government of India and arrival of multinationals in the country like Wal-Mart, Carrefour, Tesco, Metro etc. will force and shake the complacency adopted by all the stake holders of this industry so far .

challenges to Logistics to enhance indian manufacturing

2012-05-06T23:21:00.000-07:00

With the recent successful launch of Agni-5 missile with its range more than 5000 Km, India has joined the select club of nations like U.S. , China, France and Russia ,however to be entitled to be called a super power, India has to catch up with these developed nations on many fronts . One such desired area is definitely manufacturing because China in order to become a real super power improved itself drastically in area of manufacturing so much so that with its sustained efforts, it became a global manufacturing hub.

Manufacturing in India is still a mere 15 percent of the country’s GDP while it is 34 per cent for China and 40 per cent for

Thailand

. Eleventh five year plan targeted growth in manufacturing at 10 to 11 percent but actual performance remained only about 7.7 percent. Government of India (GOI) has as such rightly put lot of emphasis on manufacturing in its 12^th five year plan ( year 2012-2017) by targeting a growth of 12 to 14 per cent. As per the 12^th national manufacturing plan, the 2.0 to 4.0 per cent differential over the medium term growth rate of the overall economy will enable manufacturing to contribute at least 25.0 per cent of GDP by year 2025.

This shall help to provide a large portion of additional employment opportunities to

India

’s increasing number of youth. While the services sector has been growing fast, it alone cannot absorb the 250 million additional income-seekers that are expected to join the workforce in the next 15 years. Unless manufacturing becomes an engine of growth, providing at least 100 million additional decent jobs, urban, rural gap will further widen and it will be difficult for

India

’s growth to be inclusive. Further India’s balance of trade can not be balanced any longer just by increasing raw material exports and importing finished goods and the export basket must include much larger volume of manufactured goods.

However to reach this ambitious target, a lot needs to be done in the direction of improving country’s infrastructure to produce quality products and be competitive globally. What is required as such by manufacturing companies is working on optimum cost and improvement in quality, efficiency and speed to response to customer’s needs in the global market place. In all these directions both inbound logistics and outbound logistics as shown in figure 1 below face unprecedented challenges and can make major contributions if tackled in a planned manner.

Figure 1

National manufacturing plan has identified following sectors as priority sectors for the 12^th five year plan.

1. Sectors that will create large employment

• Textiles and Garments

• Leather and Footwear

• Gems and Jewellery

• Food Processing Industries

• Handlooms and Handicrafts

2. Sectors that will deepen technology capabilities in Manufacturing

• Machine tools

• IT Hardware and Electronics

3. Sectors that will provide Strategic Security

• Telecommunication equipment

• Aerospace

• Shipping

• Defence Equipment

4. Manufacturing-Technology sectors for Energy Security

• Solar Energy

• Clean Coal Technologies

• Nuclear power generation

5. Capital equipment for India’s Infrastructure Growth

• Heavy electrical equipment

• Heavy transport, earth moving and mining equipment

6. Sectors where India has competitive advantage

• Automotive Sector

• Pharmaceuticals and Medical Equipment

7. MSME sector

—the base for the Manufacturing Sector—employment and

enterprise generation

Among the above sectors, Automotive sector, heavy electrical equipment, pharmaceutical and medical equipment, machine tools, telecommunication, Aerospace, shipping and defence equipment etc have quite a complex manufacturing and as such objectives like cost minimization to remain competitive, attainment of speed, efficiency, quality and responsiveness to customers are more challenging and equally is the contribution of inbound and outbound logistics extremely critical. While government of India is taking suitable steps in various directions like creating trained manpower, encouraging Industry Academia interfacing and improving logistics infrastructure in the direction of Road, , shipping and Aviation with emphasis on public and private partnership, we shall look more closely into the challenges which are offered to manufacturing and Logistics industry and to new and existing Logistics players. I must point out here that the challenges are also new opportunities to the new and existing players and if they are able to embrace the challenges successfully , they have a big opportunity to reap the benefits as early birds giving them sustenance to become long term players. What one needs to remember is that in such an environment, manufacturing companies, logistics players, suppliers, dealers and Retailers have to strive through teamwork to a perfect supply chain order that is getting the right product to the right customer at the right time, in the right condition and at the right cost.

For manufacturing companies to succeed, handling inbound logistics by manufacturing companies is of paramount importance and quite critical. While there are enough outbound logistics players in the country handling transportation and warehousing of finished goods, there are only few inbound logistics players helping manufacturing companies and can be counted on fingers. It is a common knowledge that lack of one critical component during manufacturing can bring entire manufacturing activities to a screeching halt. As such ensuring faster availability of material and components at the right time for manufacturing companies becomes an essential factor and as such manufacturing companies must choose their Logistics partner very carefully. I would like to call inbound logistics players as better half of manufacturing companies as such marriage must take place between the two for a long term relationship which would be mutually beneficial.

Globally such strong relationships have helped Companies like Toyota, Ford, Chrysler and many more with their 3 PL partners like DHL, Ryder , Schneider Logistics , GEFCO and VASCOR ltd etc evolve cost optimizations in their inbound and outbound logistics increasing their profits and customers/dealers’ delight .

Further consider the following facts.

· Logistics in manufacturing industry is the most important function after product development as there is a significant volume of goods movement, both inbound (components and material sourcing) and outbound (product distribution).

· On the inbound side, 3PL service providers ensure timely delivery of materials in the required quantities to meet daily production schedules and can play a major role in the order processing of manufacturing companies.

· On the outbound side, they play a significant role in satisfying dealers as last mile activity by ensuring timely consignment delivery to dealers increasing responsiveness to Dealers providing them a safe and reliable service. They also play value added logistics functions such as packing, labelling , quality checking and pre-inspection activities.

Now that the Manufacturing in India has to grow rapidly , the time is just ripe for third party logistics providers to integrate their logistics operations both inbound and outbound into the supply chain of the manufacturing companies to create a win-win situation for both the parties to maximise their ROI through cost optimizations and improvement in service levels to their customers and dealers.

Here one should keep in mind that technology can play a very crucial role in ensuring success and as such inbound and Outbound Logistics players who understand the importance of technology such as implementation of ERP, Information technology, RFID , automation etc and are ready to make investments in these areas stand a greater chance of success.

CHALLENGES TO LOGISTICS COMPANIES ( 3PL SERVICE PROVIDERS)

We shall now discuss more closely to see what are the challenges for the logistics companies ( 3PL service providers) to provide impetus to manufacturing.

1. Technology resources

In the new environment, there is a challenge to 3PL service providers to sharpen their information system capability, Automation and ICT capabilities and their accessibility to technical knowhow through Tie-ups, foreign collaborations. They must widely embrace technology covering mobile solutions that enable surface and airfreight operators to communicate while shipments are in transit; route optimization and navigation software; and customer-facing solutions offering tracking and tracing capabilities. Technology should not be used by them merely for technology sake. They must create enterprise-wide visibility, control conformance to shipping instructions, and monitor carriers' performances in pickups and deliveries.

2. Customization and Flexibility

3PL providers should rise to the occasion to be flexible in accommodating emergency and contingency requirements of manufacturing companies. They should have their back-up plans in active mode including manpower, routes and network resources. They must continuously get involved in for continued process improvements that control costs and ensure ongoing efficiency.

The Mantra for manufacturing companies while outsourcing their inbound and outbound logistics to 3PL service provider should be: focus on your core competence and reap the benefits of third party infrastructure by outsourcing to parties who have specialized expertise and experience in these areas.

3. Challenge of increasing Resource strength in terms of manpower and network resources.

3PL companies shall have to hone up their manpower resources in terms of their motivation level, skill set with professional development program. Remember that in a service segment in which Logistics providers operate, 4 Ps unlike in marketing mean people, people, people and people.

4. Industry knowledge and expertise

3PL service providers shall have to accept challenge of providing relevant experience with different type of products, technology integration, geographic area and their routes, and other specific needs. If the need be, they have to be receptive to enter into foreign collaborations.

5. Challenge of enhancing operational strengths

3PL service providers must serve multiple product markets where compliance, safety, and cargo security are required. If one logistics provider can meet the needs of a diverse base of customers, each with its own challenges and industry requirements, then the chances of a successful partnership with manufacturing companies greatly increases. In a present globalized scenario he has to have capability to handle inbound and outbound multi-modal logistics involving domestic and foreign vendors. His access and proximity to sea port and airports and material handling capabilities, his fleet strength are important considerations. He must be able to tackle expedited deliveries. Whether he can run Milk runs to help optimize transportation and production? Manufacturers and Logistics provider both can operate efficiently by increasing the frequency of runs to multiple suppliers, which reduces the lot size of each move, allowing the transporter to fill trucks.

6. Commitment to tight delivery schedules and safety of products

Stock-out is a dreaded word for manufacturers and dealers and it can only be avoided by commitment of 3PL partner to time schedules for end to end delivery, safety and reliability. "To be more efficient 3PL providers must enhance the velocity to inbound parts and smaller shipments picked up and delivered more frequently to keep inventory low. Logistics is a key foundation of the complex manufacturing systems as such if 3PL Partner does not move material efficiently and in small lots then manufacturers might lose many of the benefits in their lean production systems requirement.

CHALLENGES FOR MANUFACTURING COMPANIES

There are challenges equally for manufacturing companies in terms of coordination with their third party logistics providers both for inbound and outbound logistics, material management, purchase and dispatch departments. Manufacturing companies shall have to create a dedicated SCM (Supply Chain Management). Many manufacturing companies still handle different parts of supply chain in silos through different departments like outbound logistics being handled by marketing, production planning under manufacturing and material and inbound logistics by sourcing department losing the larger picture of being customer centric and ultimately customer requirements are not met. And when the customer suffers causing loss of business, blame game starts where marketing department would blame production and production blaming in turn sourcing department. This must end and manufacturing companies should start a fresh by bringing all departments like planning, logistics, material under single department of SCM which shall be fully accountable for meeting the customer’s requirements.

Further I am enumerating some more challenges for the manufacturing companies which are as under

· Change the culture of ‘push sales’ to ‘pull based production and supply system’ where suppliers would have to supply only what is required, whenever required , based on actual consumption meaning thereby frequent supplies of small quantities each time

· Change the culture in different departments in manufacturing from ‘my department’ to ‘our customer’ approach

· Change management involving changes in MOPs (measures of performance), Performance management system, Planning process, Execution process, ERP,MIS and communication system, etc.

· Focus on supply chain management system and integration of all relevant departments under one banner as explained above and IT enabled end to end supply chain planning

· On line visibility of the stocks through IT connectivity to reduce inventory costs

· Implementation of KANBAN for pull based procurement

· E-Tracking of transportation vehicles

· Introduction of lean manufacturing environment with a total quality management approach throughout the Production

With increased globalization and increased competition and demand uncertainty , challenge of making their supply chains more nimble, responsive,

reliable and cost-efficient for taking advantage of windows of opportunities.

SCM department to ensure that there were no stock outs irrespective of the changes in demand Vs forecast.
Introduce supply chain visibility with permissible access to your suppliers and customers building a long term relationship of trusts and partnership. Complex manufacturers face a variety of challenges made difficult by the complexity of their products and manufacturing processes. Best in class complex manufacturers have to create a collaborative environment to integrate functionality to produce quality, speed and agility. The end result provides visibility from initial engineering design through manufacturing , to quality control and customer service leading to more profitable business and grater customer satisfaction.

Last but not the least, it is the Innovation by manufacturing companies through their research and development teams which shall matter most creating new cost effective and quality products. A major difference between manufacturing in India and China is the Chinese love for continuous Innovation in almost every low and high end product which has made them manufacturing darling of developed countries. Indians too have to create an environment where innovations are suitably rewarded by Government and private companies and research in universities should not limited merely to awarding PHDs and writing research papers in journals. Any research which has no monetary value for benefit of the society and which industry can not make use of it or purchase is basically garbage for all practical purposes. In this direction, Industry-Academia interfacing must be encouraged with flow of knowledge both ways to be really effective and fruitful to bring out new and innovative products to give much sought after impetus to manufacturing in India.

Written By

Prof. Akhil Chandra

Consultant, Logistics and Supply Chain Management

09810223277

Akhilchandra06@gmail.com

Create Pie chart of your life

2012-03-24T07:11:00.000-07:00

Pie Chart of your Life

I have heard lot of people in late fifties often complaining that they worked so hard for their career to reach the top rungs but still they were not happy with their overall achievements in life. Why because they missed on many other things in life like family, health, relationships and a good family life. I know many workaholics who regretted later as their wife deserted them because they attached more importance to chasing their professional career and pursuit of money while not giving sufficient time to their family. Well, life is a sum total of such needs like money, mental and physical health, knowledge, family life, friendship, morality, self actualization and spirituality. Due to law of equilibrium prevalent in nature, sum total of these needs for a human being still remains same which one can call as ‘Whole Life’.

One can visualize it by drawing a circular pie chart divided into sectors illustrating these needs in proportion to what you have allocated actually or you want to allocate. Wonderful thing about this ‘Whole Life’ is that these requirements are dependent on each other and if you try to increase proportion of one requirement by your actions, it shall have immediate repercussion on other needs. For example if somebody tries to chase too much money in life, he may lose on other fronts like family life, friendship or health proportionately so that sum total in the pie chart still remains the same. That means that everything what one does in life has a cost attached to it and if you try to gain in one, you may have to pay in terms of losses on other fronts. It is like saying that in life there is no free lunch. Wise thing is to create a balance in life and keep proportions of these requirements within limits. It is like eating balanced diet which comprises of various ingredients and varieties of foods in form of cereals, vegetables, fruits and other intakes rich with protein and vitamins so as to keep you health intact.

At different age and stages of life, proportions of such needs what one seeks from life may vary. Like in early stage of life say when you are in your twenties, you could allocate more proportion to money and professional career which are important to satisfy one’s basic needs like food, shelter etc as per the hierarchy of needs defined by famous sociologist Maslow. In thirties and forties, you have to devote more time to your family life giving it the requisite proportion in the pie chart of your life. Like vise when you are in your fifties, sixties and onwards, you might like to allocate higher proportion to spirituality, self actualization and to your health. In Hindu mythology, to keep these proportions in-tact, life was divided in four stages called ‘ Brahma charya Ashram , Grahastha Ashram, Vaan Prastah Ashram and Sanyas ashram’ In Brahmacharya Ashram, one could allocate more proportion of one’s time and activities to knowledge ,morality and health, in Grahastha ashram allocating a higher proportion to seeking money, family life , friendship while in Vaan prastha ashram and Sanyas Ashram, priority was given to health, self actualization and spirituality.

By drawing a pie chart of your life in above manner, one can keep a control of your life so as to not regret later. This shall also help to keep oneself happy and satisfied because some of the material benefits which may look gains in a short term approach may actually be a loss to you in terms of your mental health, relationships and family life. This happens in property disputes among brothers. For apparent material gains actually they have lost on relationships, family life and may be on health too because this may not give them mental peace causing illness or diseases affecting their physical health.

So the Mantra of achieving a good and meaningful life is to keep a proper proportion of your needs in your Pie Chart choosing your activities through right conduct without compromising your moral values which shall surely result in your mission of life well accomplished.

Writer

Akhil Chandra

Management of Finished vehicle yards by 3PL Providers. by Prof. Akhil Chandra

2012-01-11T20:38:00.000-08:00

Management of Finished vehicle yards by 3PL Providers.

Finished vehicle yards in India are growing rapidly in their capacity ranging from 10000 cars to 30000 cars and beyond as car maker Companies like Maruti Suzuki, Hundai and Tata Motors and many others are planning to set up huge Finished vehicle yards country-vide covering the states like Tamilnadu, Maharashtra , Gujarat and Haryana. This advance planning is in line with the Sales Forecast for the financial year ending 31^st March,2012 expanding to 3 million light vehicles being manufactured in India and further by 2015 to have almost doubled to just shy of 6million units , with an increase to 8million units by 2019 and 10million units by 2024.Growing appetite of Indian consumer for light vehicles was also evident with the successful Auto Expo 2012 currently staged in New Delhi with almost every Auto manufacturer wooing the Indian customer with the new launches of cars each eager to have their market share in the growing Indian pie of finished vehicles.

The huge expansions in vehicle yards are however associated with new challenges for the third party Logistics providers and shippers due to associated complex sets of problems which can be solved only by introduction of suitable technology ranging from information and communication technology and process control and Automation.

In this article, we shall look into how 3PL providers/shippers in Automotive segment could solve the complex problems of managing huge vehicle yards with mammoth size comparable to several football fields.

In order to keep their bottom line intact and growing, 3PL Service Providers have to keep three things in mind to manage their finished vehicle yard efficiently viz visibility in their inventory of finished vehicles , optimization of space utilization in the vehicle yard and integration with their customers ( dealers and vehicle manufacturers). Easier said than done, this requires to take first a holistic view of major pain areas in a large vehicle yard managed manually and then solve them through technology available.

a) Time waiting inside the yard is unknown.

b) Vehicle Location in the yard is unknown to the yard manager who is responsible to quickly unload the vehicles and the time waiting of the Trailer causes delays.

c) No visibility in loading and unloading and the departure time at the distribution centre.

d) Checkout delays, errors and wrong trailers.

This leads to a very lengthy process to solve other associated real time and pressing requirements in the yard which are as under.

• What labour do I need?

• Which cars are blocked?

• How much capacity do I have?

• Where in the yard is damage occurring?

• Which cars are to be loaded to train and which to truck?

• How did we do last month, and can we do better?

• And more.....

Visualization armed with yard monitor through information and communication technology can give better insight…. better understanding.

Efficient equipment yard inventory management requires the ability to automatically track how much inventory is on hand, where and to whom it is being delivered, how long it has been outstanding, and how often it is used. Existing manual equipment inventory management methods can sometimes work, but as the volume of equipment or activity increases, the need for automation is paramount to running an efficient and profitable operation.

How is it really done?

1. Vehicles are tagged with RFID tags. With the help of these tags, vehicles will be tracked automatically as they move in and out of the yard.

RFID readers are installed at key entry and exit points and at locations within the yard. These readers provide instant visibility to what is leaving and entering the yard. As well as its location.

RFID badge tags are provided on the drivers. This allows to track driver’s movement and to ensure the correct association of driver with the associated vehicle. Further whether for security reasons or to ensure proper delivery and accountability, tracking authorized repair crews to the correct vehicle and equipment contents on the vehicle is essential for effective utility yard management aided by such Badge tags.

4. Such RFID sensors and readers are connected to a Wi-Fi local area network connecting them to a warehouse management system (WMS) server.

Yard monitor placed in the central control room provides for vehicle yard management provides real time inventory visibility, vehicle locations within the yard and control of outgoing and incoming vehicles at the gate.

By integrating with WMS systems following benefits are derived.

Reduced yard operations costs and increased productivity due to a high level of automation.
Easy traceability of vehicles within the yard by way of real-time tracking through a visual interface. Vehicles such tagged with RFID tags will be tracked automatically as they move in and out of the yard. RFID readers located at key entry and exit points and at locations within the yard provide instant visibility to inventory leaving and entering the yard, as well as its location. In addition, RFID tags have on-board memory so you can store a complete history of the asset (e.g. life, usage rate, etc.) directly on the tag.
Real time visibility of the yard and vehicles. RFID tags automate the receipt of vehicles in the yard and reduce the manual intervention. Whether due to peak periods or as part of a bulk delivery, equipment often get missed at check-out. Manual equipment check-in/check-out procedures are prone to errors and delays. Equipment is sometimes “lost” in the field due to not knowing where or who it was delivered to. An automated gate check solution can significantly increase accuracy and prevent loss of equipment.
Customized MIS report generation for better analysis and planning.
Ranking of vehicles in order to reduce rework costs.
Recommendation of a suitable parking location for each vehicle on the basis of the available slots and the parking settings defined.
Visual damage tracking mechanism in order to enable yard jockeys to effectively communicate the location of damage to workshop Mechanics.
WMS has an activity management module that identifies the activities that need to be performed on each vehicle, and schedules a time for the performance of the activity. This streamlines the workshop process and ensures timely dispatch of the vehicle from the yard.
Yard view management software integrated with WMS graphically can display for example say rectangles to represent trailers and their locations, color-coding them to indicate their status - empty or loaded, waiting to be loaded or unloaded, or in the process of being loaded or unloaded

By integrating the above local area network with the customers through internet, complete visibility is provided to the customers and manufacturers with warning alarms and alerts sent through E-Mail.

Summary

RFID managed yard management systems are already in vogue in developed countries. Such web based yard managed systems provide real time location system capabilities to manage the trailers and vehicles in the ever growing complex and large yard environment and complete visibility of the inventory to shippers and third party logistics service providers. It is imperative and a must that Indian shippers and 3PL providers also embrace such technological solutions without delay to remain competitive in the present cut throat competition in Automotive domain due to fresh arrivals of Automotive multinationals in the country.

Written by

Prof. Akhil Chandra

Consultant – Logistics and Supply Chain management

choosing your automotive logistics provider, An Article by Professor Akhil Chandra

2011-12-19T06:25:00.000-08:00

Automotive manufacturers and choice of their better half, 3PL service Providers

Manufacturing in Automotive sector in India is growing rapidly and the time is just ripe for third party logistics providers to integrate their logistics operations both inbound and outbound into the supply chain of the automotive manufacturing companies to create a win-win situation for both the parties to maximise their ROI through cost optimizations and improvement in service levels to their customers and dealers. Consolidations of strengths in the Logistics arena in India are now already taking place which is evident with the recently announced joint venture of 3 PL Logistics service provider Mercurio Pallia with foreign French Logistics multinational logistics firm GEFCO.

Manufacturers in India are faced now with the new opportunity to outsource their Transporation and warehousing operations end to end to the new emerging strong third party logistics providers .My advice to Indian Automotive Manufacturers is that Third Party LSPs ( Logistics Service Providers ) can play a very vital role in running your Inbound and Outbound Logistics Operations and can prove to be your life line. Call them your partner or your Better Half , choose them judiciously to make it a long lasting and fruitful partnership. Globally such strong relationships have helped Companies like Toyota, Ford, Chrysler and many more with their 3 PL partners like DHL, Ryder , Schneider Logistics , GEFCO and VASCOR ltd etc evolve cost optimizations in their inbound and outbound logistics increasing their profits and customers/dealers’ delight .

The stage for tying the knot for Automotive manufacturers with 3PL service providers is already set in India as Currently, around 30 multinational automobile majors have a presence in India, including international luxury automobile manufacturers such as Bentley, Porsche, Ferrari, Aston Martin, and Harley Davidson. Time is now ripe for Automotive manufacturers to outsource both of the functions of transportation and warehousing to their 3PL service providers including setting up cross-dock, stockyards or Logistics optimization centres coupled with value added services and a seamless integrated logistics network with end to end logistics solutions. Due to global cut throat competition, Automotive manufacturers in

India

must look to larger scenario of Supply Chain by introducing third party Logistics service providers in their value chain instead of merely outsourcing transport function.

Further consider the following facts.

· Logistics in Automotive industry is the most important function after product development as there is a significant volume of goods movement, both inbound (components and material sourcing) and outbound (vehicles distribution).

· On the inbound side, 3PL service providers ensure timely delivery of materials in the required quantities to meet daily production schedules and can play a major role in your order processing.

· On the outbound side, they play a significant role in satisfying Automobile dealers as last mile activity by ensuring timely consignment delivery to automobile dealers increasing responsiveness to Dealers providing them a safe and reliable service. They also play value added logistics functions such as packing, labelling , quality checking and pre-inspection activities.

Having established now the need to outsource your transportation and warehousing functions let us see what could be the criteria to choose 3PL partners who are reliable, secured and affordable.

1. Scalability

Choose a partner for your scalable operations. You should study their capabilities for technology up-gradations and their expansions plans for both inbound and outbound Logistics. A thumb rule is to at least consider a 5 year ahead scenario.

2. Customization and Flexibility

3PL providers should be flexible in accommodating your emergency and contingency requirements. Study their back-up plans including manpower, routes and network resources. Look at their customer reference list where they have customized their operations for large Automotive Corporate. Find out whether he can continuously get involved in for continued process improvements that control costs and ensure ongoing efficiency. See how much you can leverage resources of a 3PL saving your investments and improve your service level. The Mantra in outsourcing is : focus on your core competence and reap the benefits of third party infrastructure by outsourcing to parties who have specialized expertise and experience in these areas.

3. Resource strength in terms of his manpower and network resources.

Study the strength and weakness of your 3PL partner ranging from his network strength, his manpower resources in terms of their motivation level. Look into 3PL’S personnel and their professional development programs. Remember that in a service segment in which Logistics providers operate, 4 Ps unlike in marketing mean people, people, people and people.

As such 3PL’s manpower’ skill set is important consideration .Find out how much spent is on training of their by 3PL provider and compare them with the industry standard.

4. Industry knowledge and expertise

Find a company that has relevant experience with your type of product, technology integration, geographic area and their routes, and other specific needs.

5. Commitment to tight delivery schedules and safety of your products

Stock-out is a dreaded word for manufacturers and dealers and it can only be avoided by commitment of 3PL partner to time schedules for end to end delivery, safety and reliability. "To be more efficient find out how much velocity your 3PL partner can provide to inbound parts and smaller shipments picked up and delivered more frequently to keep inventory low. Logistics is a key foundation of the automotive our production system as such if your 3PL Partner does not move material efficiently and in small lots then automotive manufacturers might lose many of the benefits their lean production systems requirement.

6. Technology resources

This should cover his information system capability, Automation and ICT capabilities and his accessibility to technical knowhow through Tie-ups, foreign collaborations. Find out whether he has widely embraced technology covering mobile solutions that enable surface and airfreight operators to communicate while shipments are in transit; route optimization and navigation software; and customer-facing solutions offering tracking and tracing capabilities, have become commonplace. Technology should not be used merely for technology sake. Find out how much he has been able to create enterprise-wide visibility, control conformance to shipping instructions, and monitor carriers' performances in pickups and deliveries.

7. His operational strengths

Choose a partner that can serve multiple product markets where compliance, safety, and cargo security are required. If one logistics provider can meet the needs of a diverse base of customers, each with its own challenges and industry requirements, then the chances of a successful partnership greatly increase. Ask about certifications that are aligned with your supply chain and industry-mandated protocols. In a present globalized scenario see his capability to handle inbound and outbound multi-modal logistics involving domestic and foreign vendors. His access and proximity to sea port and airports and material handling capabilities, his fleet strength are important considerations. Find out whether he can tackle expedited deliveries. Whether he can run Milk runs to help optimize transportation and production? Manufacturers and Logistics provider both can operate efficiently by increasing the frequency of runs to multiple suppliers, which reduces the lot size of each move, allowing the transporter to fill trucks.

8. Your chemistry with him

See whether he is able to work together to resolve the mutually defined goals and objectives. Would he remain true to your company’s identity, expectations, and needs? Chemistry is important to build up a long term and sustained relationship

Summary

Ensuring a smooth flow in the supply chain is the primary challenge faced by Automobile manufacturing companies.. In addition, Indian automobile companies need to ensure safety of their goods in transit and at the warehouse, as well as deal with the inability of majority of the LSPs to provide end-to-end solutions (either in transportation, warehousing, or integrated activity).With the emergence of strong and qualified third party logistics providers in India supported by foreign and tested knowhow, it is imperative for Automotive Logistics provider to derive maximum benefits by outsourcing their inbound and outbound logistics operations to serve their end customers and dealers better with improvement in efficiency, quality and responsiveness through innovative technology and knowledge source of logistics service providers.

Written By

Professor Akhil Chandra, Institute of Logistics and Aviation and

Consultant Logistics and Supply Chain Management

9810223277 ( M) , 011-29210562, akhilchandra06@gmail.com

Article on E-Commerce Logistics by Prof. Akhil Chandra

2011-11-28T20:07:00.000-08:00

E-Commerce, a new business opportunity to Indian Logistics Service providers

World over, blue chip logistics companies like DHL, DB Schenker , United Parcel service and many others have embraced E-Commerce in a big way changing themselves from a ‘brick and Mortar company’ to ‘Click and Mortar company’ providing new efficiencies to their management of their complex supply chains.
Could India be left far behind? Answer is big No ! India has now an internet user base of over 10 million users over 865 million mobile phone users and though the penetration of E-Commerce is low compared to markets like US, UK, Japan and China but is growing at a much faster rate with large number of new entrants and a burgeoning and upwardly mobile middle class with large disposable income. Timing is now just right to cash in this new E-business opportunity for third party Indian logistics providers and jump into the bandwagon and with increasing broadband internet ( growth at 20 per cent) and 3 G penetration aided with WI-MAX connectivity offered to business entreprises , floodgates are wide open now for becoming last mile carrier to both type of Businesse viz B to B and B to C. They have to integrate their business with E-Retailers with seamless information flow between Retailers, themselves and manufacturers after developing their ICT capability. Let us look now look to other key drivers to this new E-Business opportunity which are:

· Availability of much wider product range to what is available at brick and mortar retailers

· Busy lifestyles, urban traffic congestion and lack of time for offline shopping

· Lower prices compared to brick and mortar retail driven by disintermediation and reduced inventory and real estate costs

· Unlimited reach of the customers both nationally and internationally through internet portals

India

has world’s fouth largest internet users

India

has close to 10 million online shoppers and is growing at an estimated 30% CAGR vis-à-vis a global growth rate of 8-10%. Electronics and Apparel are the biggest categories in terms of sales.

· Direct Imports constitute a large component of online sales. Demand for international consumer products is growing much faster than in-country supply from authorized distributors.

What shall be the new challenges to LSPs for this new E-Business opportunity?

Electronic Commerce demands an agile, high velocity and granular approach to Logistics .

A manufacturer or online merchant must be able to customize an individual order; ship it directly to the buyer anywhere in the world; track the whereabouts of the item at any given time along the supply chain, handle customer inquiries, handle product returns (reverse logistics) all at very high speed and at a fraction of the cost of traditional shipping and fulfillment.

Larger number of small parcels or packages due to a larger number of buyers making direct orders and a larger number of sellers than in traditional trade;

Origins and destinations of shipments are more widely dispersed, given that more buyers place direct orders with producers and distributors and more sellers access buyers globally

Accountability for shipments extends through the entire supply chain, compared with traditional logistics in which accountability is limited to single links of the supply chain

Customers have high expectations about quality of services and demand fast delivery of shipments;

Higher incidence of cargoes returned to the supplier than in traditional trade;

Greater demand for and availability of information covering transactions over entire supply chain, thus allowing on-line shipment tracking and other supply chain management functions;

Substantial increase in the volume of small shipments, leading to growth of demand for warehousing transport and other logistics infrastructure that can handle larger volumes of small shipments;

Qualified e-logistics providers must depend on integrated IT systems and complex

software to manage the dynamic flow of products. The quality of information must be much better than that of traditional outsourcers, so that companies can have visibility into their supply chains. Better information also reduces inventory throughout the supply chain, enabling companies to react quickly to market changes.

When delivering to private persons instead of companies, the demand for fast and accurate deliveries will increase. This is because one or more of the physical nodes will disappear when the goods can be transported directly from the producing company to the end customer. Direct home deliveries will request shorter lead times, and more complex distribution systems will be necessary to make this possible.

Conclusion:

E-Commerce opportunities can no longer be ignored by Indian 3 PL players. Country has now offered robust internet connectivity with high reach in the country and with new technologies like Wi-MAX and 3G future of E-Commerce is bright and early birds in logistics industry can reap the benefits offered. E-Commerce has been embraced by practically most of big international players and with multi-branding which is soon to be allowed to foreign Retailers like Wal-Mart, Tesco and Carrefour etc by Government of India , application of E-Commerce shall rise offering a clear cut opportunity base to Indian logistics service providers. Onus is on them to accept the change and thrive with the E-Buiness opportunities. logistics industry has to face the challenges and opportunities created by e-commerce, both from within the industry and from external players. The industry has always been pressed to cut costs and squeeze margins, and the future will be even more formidable as competition forces most companies to continue the streamlining of their business.

warehousing for DUMMIES, Unit 1 by Prof. Akhil Chandra

2011-10-07T22:40:00.000-07:00

                                                       WAREHOSUSING FOR DUMMIES
1.1 Preview/warm up
Warehousing is an integral part of Logistics so as to increase responsiveness to customers in the marketplace for business organizations. The subject is gaining importance as multinationals like Wal-Mart, Carrefour and Metro etc shall be allowed mutibranding retailing in a big way. In fact cabinet of Government of India has already cleared 49 per cent of FDI( foreign direct investment) for foreign multinationals in area of multibranding Retailing. Such multinationals shall open cold chain and state of art warehouses for perishable goods and shall require huge skilled manpower in areas of Warehousing .
Warehousing not only reduces transportation costs but also are used to avoid stock-outs in the retail stores and are vital in manufacturing industry to keep assembly line of production up and running. This chapter introduces you to exciting world of warehousing which in future shall help to improve logistics infrastructure in the country. Read this chapter carefully which talks about purpose and activities involved in warehousing, benefits of warehousing, warehouse organization structure and gives as insight into warehousing day to day operations.
1.2 Learning objectives
·         To understand the basic functioning of warehousing to support manufacturing and retail sector
·         To understand what are the various activities which are involved in small and large warehouses
·         To understand the various economic and service benefits of Warehousing
·         To understand the organization chart of a warehouse with functions and duties of all the important staff

1.3 Warehousing Introduction
Purpose of warehousing is to store material safely and in order. You would have noticed how in kitchen, housewives need some storage space for cooking material like flour (Atta) ,Daal, vegetables , Ghee , spices etc. etc. Some Space is also needed to store utensils, cooking gas cylinder and so on. For perishable items like vegetables, meat, milk etc they require refrigerator to keep them cold so that such eatables could be used for longer time. As per the usage and requirement, housewives have their own methods to access them and to keep them in order. They keep most accessible items at arms length and items which are not often used like only during festivals are kept in shelves which are are at a larger distance and require more time to access.
Industries also require likewise space to store various material involving chemicals, raw material, stationery , electrical items, tools and tackles, lubricants and oils etc etc. In fact variety of items vary depending on type of industry and kinds of items which warehouses have to store are very large and as such require a careful planning so as to keep them safely and in order. Industrial items
Let us see now how a warehouse looks like . This is given below in figure 1

                                                                       Figure 1
You would see in the picture above that materials in packed form are kept in shelves and enough space has been provided for easy movements for persons who have to pick the material from the shelves either manually or moving fork-lifts. A careful layout of warehouse is planned so that stored items are identified and issued with minimum efforts and minimum time. The items stored are known as ‘Inventory’. Note down this word carefully as this shall be used often in further teaching topics like inventory control.
A warehouse is as such a commercial building storage of goods. Warehouses are used by manufacturers, wholesalers, exporters and importers and transporters. They are usually large plain buildings in industrial areas of cities and towns. Sometimes warehouses are designed for the loading and unloading of goods directly from airports, seaports and Railways. They often have cranes, forklifts for moving goods, which are usually placed on pallets loaded into pallet racks. Let us see now how cranes, forklifts and pallets look like as these are new terminologies which you must know as student of warehousing.


Fork Lift and the Driver                                                        Pallet

Crane

Check your progress Exercise A
1.      What is the purpose of a warehouse?

2.      Tick, who are the users of a warehouse?
a)      Manufacturers b) Importers and exporters c) Transporters d) Wholesalers

3.      What is the purpose of a forklift

4.      What is inventory in a Warehouse?

------------------------------------------------------------------------------------------------------------------------------------------
5.      What are the varieties of material which are stored in a warehouse

------------------------------------------------------------------------------------------------------------------------------
1.4 Activities in a warehouse/store
Let us see first see how a warehouse layout looks like to understand the activities in a warehouse which happen day in day out.
.
The above is a layout of a warehouse used in manufacturing industry. In a manufacturing industry, you require raw materials which are ordered and procured and stored in the warehouse. They are issued once again to the shop floor for manufacturing on the assembly line where finally finished good after quality checks etc are packed and the shipped to wholesalers, dealers etc based on the orders received from them.
In the above layout, observe the arrows carefully and you shall find out that there is an in-coming section of the warehousing where the material is received. Subsequently material is sorted and either stored or sent to manufacturing unit used as work in progress section.. There is an outgoing section where the packed material is shipped on the truck based on the orders received from the wholesalers and dealer’s .There is business office section which keeps all the records of material incoming, outgoing and material stored in addition to housekeeping functions to control manpower requiring attendance records etc. additionally. Warehousing is a manpower intensive area and lot of manpower is required involving order pickers, staff for store management, material management, finance management, IT management etc.

                                                                Warehouse in action
In the above picture what you see is that order pickers after lifting the material from the shelves are moving within the warehouse with the material on their forklift. This is a day in day out job in warehouses to keep dispatching the packed material after sorting them from the shelves built in the storage area.
Now based on the above inputs given to you, we can now summarize the activities in a warehouse in following category heads.
1. Requisitioning of materials.
2. Material inspection
3. Warehousing operations.
1.4.1 Requisitioning of materials
We shall now describe each of these activities in detail. You will appreciate now that in warehousing materials are continuously picked by order pickers but the items picked must be replaced otherwise a ‘stock out ‘situation shall arise. ‘Stock out’ basically means that material to be fetched is not available on the shelves which is considered a bad situation in the warehouse. As such it is vital that activity of replacement of material picked from the shelves must happen regularly. This requires requisitioning of the material. In domestic house also housewife keeps regularly procuring the raw material like Atta, Daal and vegetables otherwise the family members will starve because of lack of cooked food. Because if housewife does not requisition these items, her cooking activity in the kitchen shall come to a standstill.. One can say that cooking activity is similar to manufacturing activity in the industry. Only thing is her customers are her family members who order and consume her cooked food.
So now we can elaborate this activity of requisitioning of materials into following further activities.
·         Replenishment ( replacement of material in the shelves after order picker has picked the material from there) of stock items
·         Requisitioning of new/out of stock items.
·         Processing and approval of purchase requisition( purchase requisition is a form which is filled by the user as a request to procure and purchase the material)
·         Amendment/cancellation of purchase requisition
·         Updating status, follow up and control of purchase requisitions

1.4.2Material Inspection
Do you know why material inspection is required? You would have noticed that even housewives carry out the inspection of procured grocery of weekly/monthly purchases and if it is of low quality, they return it or shall never purchase from such vendors and can even blacklist them. This is what happens in the industry also. If incoming material procured is not as per specifications and in line with the desired one while ordering, the end product after manufacturing shall also be of bad quality. In case of most of factory products, quality depends a lot on quality of raw materials which are used in manufacturing the end product.
Let us now take an example of a sweet seller. If the sweet seller is not careful about the quality of his basic raw material of sweets like Maida, Khoa, sugar or ghee etc , the end products like Jalebi or Burfi shall be of bad quality. So unless and until his supplier is either a trusted one, he must carry out incoming inspection of the ordered material carrying out a sample check otherwise his customers shall reject his sweets resulting in losses or he may have to even close his shop. There is also a constant fear with the sweet seller that if the quality is low, his customers may switch over to his competitor in his close neighborhood.
So now material inspection is clear, we can enumerate the activities involved in material inspection as under.
·         Handling of control samples
·         Recording of additional/new specifications
·         Receipt and inspection of material
·         Reporting and handling of discrepancies (defective or broken during the transportation)

1.4.3 Warehousing operations
After requisitioning of material and material inspection of incoming material, warehouse is ready to carry out its daily operations. In daily operations, the activities involved are issue of material to the shop floor in the manufacturing warehouse. After issue of the material, order pickers fetch the material from the shelves of the storage space either manually or through movable fork lifts. If it is a retail warehouse say for garments located let us say in the vicinity of Dehradun , then it involves picking the garments from the shelves, moving them to an area where they could be repacked to service the orders received from various Malls located in Dehradun city. Sometimes price tags are also put in the warehouses and then they are dispatched from the outgoing section of the warehouse after loading them in trucks/ containers.
Lately there is lot of use of information technology in providing flexibility in operations of warehouses. IT Software like warehouse management system , Robotics and automation in terms of automated forklifts, hand held I-Pods , RFID (Radio Frequency identification ) technology etc have lot of applications in warehouse operations and we shall discuss these topics later on in detail.
Check your progress Exercise B
1.      What are the three important activities which take place in a Warehouse?

2.      What is the role of an order picker?

3.     What is the purpose of inspection?

4.What is a “stock-out” situation.?

1.5 Benefits of warehousing
Warehouses are built basically to give storage support to manufacturing and Retailing. The built up inventory of l items in a manufacturing unit supports the requirement of material required on the shop-floor to assemble or build finished product. In Retail sector, build up inventory in warehouse helps to avoid stock out on the retail shelves. Stock out is not a desirable feature because if customer faces stock out situation after visiting the mall/store, he will switch over to another competitor. Thus build up inventory to a certain extent helps in serving the customers in Retail sector quickly and to avoid lost sale. Likevise in a manufacturing sector, stock out condition can bring the assembly line to a screeching halt resulting in loss of manpower, time and other resources which were used to build up the assembly line. To give you an example if a sweet seller while preparing sweets faces a stock out situation say for sugar, he will loose lot of money and time and he can not provide the end product to his customers. As such he must build up some inventory for his raw materials like Maida, Ghee , sugar, milk etc.
In industry, let us see first what are the steps involved in manufacturing a product and then taking it to the customer. Suppose you are an entrepreneur and you have to manufacture personal computer. After arranging funds, land and manpower etc what you need as a first step is procurement of raw material like monitor, keyboard, mouse and other electronic components and assemble them on the shop floor in your manufacturing unit. After assembly of these PCs , they are tested and after passing through quality checks are packed and are made ready to be dispatched for selling them to end customers. PCs are transported in trucks, rail, and ship or by air depending on local or global market. However for selling on a large scale one requires the services of stockists, wholesalers and dealers who have a better knowledge of market in their territories and have developed good relationship with their customers as they remain always directly in touch with the customers. And that is their advantage. The stockists and ,wholesalers require Godowns or warehouses to stock the goods to be sold so that they can service their customers better. Apart from servicing the customers in an efficient manner, warehouses are also used to save transportation costs. The benefits can be divided in following two categories
1.5.1 Economic benefits
1.5.2 Service benefits.
We shall now discuss each of these benefits as below.
1.5.1 Economic Benefits.
There are actually four methods to save transportation costs resulting into economic benefits.
1. Consolidation
2. Break-bulk and cross Dock
3. Processing /postponement
4. Stockpiling

1.      Consolidation

This is nothing but shipment consolidation. Here the idea is to first collect all the material transported by manufacturing plant A, manufacturing plant B and manufacturing plant C in an intermediate warehouse which are destined to same customer. The place is chosen somewhere in between so that the overall transportation costs get reduced. One has to see also what is overall cost of introducing a warehouse including fixed and variable cost and make a judgment whether it makes sense to introduce a warehouse in between rather than transporting materials from individual plant A,B,C directly to the same customer. Refer the consolidation warehouse below in the figure1 where material from plant A, B and c has been consolidated and sent overall to the same customer.
                                 Figure 1

In order to provide effective consolidation, each manufacturing plant must use the warehouse as a forward stock location or as a sorting and assembly facility. The primary benefit of consolidation is that it combines the logistical flow of several small shipments to a specific market area. Consolidation warehousing may be used by a single firm or number of firms may join together and use a for-hire consolidation service. Through the use of such program, each individual manufacturer or shipper can enjoy lower distribution cost that could be realized on a direct shipment basis individually.
Break bulk and cross dock
Here material for several nearby customers say A,B and C received from a manufacturing unit is separated for each customer and repacked and transported once again .Please refer the figure 2
                                   Figure 2

Here the breakbulk warehouse or terminal sorts or splits individual orders and arranges for local delivery
Because the long distance transportation movement is a large shipment, transport costs are lower and there is less difficulty in tracking.
A cross dock facility is similar except that it involves multiple manufacturers. Retail chains make extensive use of cross dock operation to replenish fast moving store inventory. Retailers bring the material in bulk nearby to a city and then as per the requirements they repack and transport in smaller packets and send them to various malls/stores located in the city at different locations.

Processing /Postponement
Warehouses can also be used to postpone or delay production by performing processing and light manufacturing activity. A warehouse with packaging or labeling capability allows postponement of final production until actual demand is known.

Stockpiling
Some of the products like agricultural products are harvested in a particular season and there can be a stockpiling due to bumper crop. In such a case it requires huge space in warehouses. Seasonal storage is here essential in such businesses. Stockpiling thus provides an inventory buffer which allows production efficiencies within the constraints imposed by material sources and the customer.

Having discussed economic benefits as above now let me explain service benefits. What I mean from service benefits is benefits arising to customer in order to render him better services. Let me tell you that service to customers is very essential as business servives because of the business and they actually are very purpose of the business.
1.5.2 Service benefits.
Five basic benefits are achieved through warehousing viz spot stock,assortment,mixing,product support and market presence .I shall discuss each of them now as below
Spot stock
Here the inventory in warehouses is created adjacent to key customers just prior to a maximum period of seasonal sales like during Diwali or christmas. Suppliers of agricultural products to farmers often use spot stocking to position their products closer to a service sensitive market during the growing season .
Assortment
An assortment warehouse – which may be utilized by a manufacturer,wholesaler or retailer stocks products combinations for example catering to athletes one can have wide variety of sport shoes,sport wears and apparels in their warehouses. As a second example the wholesaler would create a specific team uniform including shirts, pants and shoes. Assortment warehouses improve service by reducing the number of suppliers that a customer must deal with. The combined assortments also allow larger shipment quantities which in turn reduce transportation costs. The distribution assortment warehouse usually has a broad product line, is limited to few strategic locations and is functional year round.

Mixing
In a mixing situation, truck loads of products are shipped from manufacturing plants to warehouses . Each large shipment enjoys the lowest transportation rate.Upon arrival at the mixing warehouse , factory shipments are unloaded and the desired combination of each product for each customer or market is selected. This would be more clear from the figure 3.



                                                                          Figure 3

In the figure above, a product D is mixed at the intermediate warehouse for select customers like W and X .

Production support
Production support warehousing provides a steady support of components and materials to assembly plants.the most economical total cost solution may be the operation of a production support warehouse to supply or feed processed materials, components and sub-assemblies into the assembly plant in an economic and timely manner. Please refer the figure 4 where subassembly and raw materials from supplier A, B and c is stocked n a manufacturing warehouse so that there is a regular and un-interrupted supply to the assebbly plant.

                                                                    Figure 4

Market presence
Local warehouses located near the markets can be more responsive to the customer needs thereby helping marketing to customers. Marketing managers find such warehouses as a major advantage of local warehouses. Such warehouses are able to deliver the finished products with quicker delivery period as compared to warehouses which are located at larger distances. A local warehouse can enhance can enhance market share and increase profitability.

Check your progress Exercise C
1. What are the four methods of transportation resulting into four economic benefits.?

2.      Name the five service benefits resulting to customers.

1.6 Warehouse Organization
Dear students, by this time you would have realized that there are numerous activities happening in a warehouse and in order to ensure that these activities happen smoothly day in day out, one requires an organization structure which is suitable to carry on various activities productively and efficiently.
Traditionally in a manufacturing organization, there is a position of Store manager or warehouse manager .Warehouse manager is now a more popular designation lately than classical Store Manager.In medium and small sized organizations, the Store Division is normally under the control of the Works Manager.Store Head works at par with production headr , IT/ MIS head or finance head as shown below



                                                                               WORKS MANAGER

Admin Head         Finanace head           Production Head             Purchase head      Store Head         IT Head

                                Organization structure of a small manufacturing organization

In larger organizations, store head reports to Material Head together with Purchase Head as shown below
                                                                                General Manager

Production     finance             Material Manager          Marketing    Human Resource and Admin     Planning



                                Purchase                          Store/warehouse Manager
                               Manager

                                                        Organization Chart of a large organization
Organization structure of a Store Division
The important functions which are carried out in Store are as under.
Stores Manager
IT Manager
Maintenance engineer
Warehouse officer
Inspection Officer
Inventory controller
Store keepers (can be more than one)
Warehouse Operations manager
Supervisor, stock Records section
Depending on the complexity, manpower may vary however below is a general organization structure of a warehouse organization

                                              Store/Warehouse Manager

inventory controller                            Warehouse operation                     store officer                 IT Manager
                                                                              Manager                               -Inspection officer
                                                                                                                             -Store keepers
-Material clerk                                                                                                  -Labour
-Data entry operator                   -maintenance Engineer
                                                        - Order Pickers and other operational staff
                                                        - Transport and dispatch section
                                                        - Labour
                                                        -Fork lift operators

You would have seen that based on the activities discussed above, the organization structure has evolved. This structure is true for one warehouse. In the above structure, delegation of authorities have been clearly defined and Store/warehouse manager is overall in-charge of operational, financial ,IT and administrative section.

1.7 Functions and duties of Store/warehouse staff
We shall now discuss the functions and duties of each category of following staff.
·         Stores Manager
·         IT Manager
·         Maintenance engineer
·         Warehouse officer
·         Inspection Officer
·         Inventory controller
·         Store keepers (can be more than one)
·         Warehouse Operations manager

Functions and duties of Store Manager
Basic Functions
Store Manager is overall boss of the warehouse who ensures safe and efficient receipt, storage and issue of all materials and equipment stored in the warehouse and other related areas. He ensures keeping up to date stock levels of materials, equipment and consumables. He is responsible for smooth operation of warehousing activity. As he is in close touch with the market through the purchase orders received, his inputs are considered to be valuable for Sales Forecasting .
Duties
·         His responsibility is to manage and supervise the activities of personnel assigned to store/warehouse division.
·         Planning and coordination for ensuring safe and correct receipt, storage and issue of all materials and equipment from the warehouse
·         Preparing detailed procedures for issuing and receiving stock, loading , unloading and storing of material
·         Overseeing processing of physical inventories documentation without any discrepancies
·         Coordinates the material documentation and stock data, ensuring that materials and their movements are accurately entered into file, replenishment and stock data is maintained and updated and all stock data reports are regularly issued and processed.
·         Maintains strict material control, including reviewing of purchase orders and determining validity of requests according to job requirements prior to releasing material and ensuring that all surplus material are returned to the warehouse.
·         Recommends quantities and types of surplus materials and equipments to be sold and and processes the relevant documentation.
·         Coordinates the reports and recommendations to the management regarding material control system and procedures, stock levels and forecasts of a need as a result of historical data comparisons and coordination with other divisional heads.
·         Training subordinates and ensuring good housekeeping and observance of safety rules.
·         Assisting in commissioning technology up gradation projects
Function and duties of IT manager
Function
Function of an IT manager is to continue upgrade IT ,telecommunication and automation technology upgraded and keep the local area and wide area network up ,all the software and hardware upgraded and well maintained, ensuring security against virus or hacking,and solving day to day problems of warehousing personnel especially in inventory control area and operational area.
Duties

·         Ensuring upkeep of local area networks comprising of computers, printers, scanners, handheld I-pods
·         Ensuring good maintenance of hardware and software
·         Coordinating and introducing IT related projects for flexible and faster operations of warehousing activities.

Function and Duties of maintenance Engineer
Functions
Maintenance engineer has to keep electrical and mechanical systems running including DG Gen set, air-conditioning for cold chain warehouses, upkeep of Uninterrupted power supply, electrical light system, maintenance of forklifts etc.
Duties
·         To coordinate with IT manager to keep electrical and automation systems up and running in coordination with IT manager
·         To do preventive and routine maintenance of electrical and mechanical systems

Functions and duties of Warehouse Officer
Functions
Supervise the activities of personnel assigned to warehouse and inspection section
Duties
Receiving , storing and issuing
Coordinate the safe and efficient movement, storage and issue of all materials and equipments
Ensuring suitable storage conditions/environment like air-conditioning and humidity control for each class of material as per guidelines from manufacturer
Ensuring safety and security and housekeeping of all storage locations and materials
Examining items received through return notes and repair requisitions for further actions
Arranging identification of all non moving/obsolete/expired/damaged items
Inspection
·         Planning, supervising and coordinating the off loading and storage of major deliveries
·         To coordinate closely with inspection personnel for inspection of the consignment
·         Coordinating with inventory control and engineers for inspection of complex incoming material
·         Supervising routine inventory activity as an administrative function

Reviewing guidelines, systems and procedures
·         Reviews and recommends procedures for loading, unloading,storing,issuing and control of materials, minimizing losses from deterioration,obsolescence and maintain high standard of safety and security

Function and Duties of Inspection officer
Duties
·         To supervise the activities of inspection controllers
·         To receive, inspect and ensure proper packing and dispatch of items/equipment for outside repair
·         To inspect high value and critical materials in coordination with requisitioning user

Function and Duties of Inventory Controller
·         To ensure timely replenishment of items
·         To monitor movement of vital items
·         To ensure complete and correct specifications in all requisition
·         To minimize inventory so as to reduce inventory carrying costs

Duties
Replenishment of items
Accurate and timely replenishment of stored items
Analysis of requisitions based on commodities or groups/subgroups
Analysis of forecasted requirements based on feedback from users
Reviewing non moving and nil stock items for taking corrective action
Arranging updating descriptions, specifications, working quantities based on the feedback from inspectors or users
Specifications
Describes and forms specifications
Catalog and Manuals
Maintains and updates list of equipment, catalogs and manuals for assigned area of work
Coordination
Coordinates with personnel in warehousing , purchasing, customs and traffic and plant operations for providing clarifications
Function and Duties of Store Keeper
Function
Supervises and participates in the receiving, checking , tagging, binning, storage, physical movement and good housekeeping of assigned storage locations
Ensures proper operation and maintenance of all assigned material handling equipment
Reviews, plans and recommends efficient allocation of storage space
Ensures timely movement of materials from inspection area to bins and bins to delivery points as per procedures
Duties
Receiving, checking and storing
Supervises and participates in receiving,checking,tagging,binning,physical movementand housekeeping of assigned storage location, implementation of procedures and control
Ensures proper operation and maintenance od all assigned material handling equipment
Reviews,plans and recommends efficient allocation of storage space
Ensures timely movement of materials from inspection area to bins and bins to delivery points as per procedure
Safety, security and housekeeping
Responsible for safety and security of assigned stores and all material
Responsible for good housekeeping and protecting materials and facilities from dust, moisture, heat and other factors which may cause deterioration
Segregating expired items and recommending their disposal
Inventory audit
Supervises the stores Assistants/assistant storekeepers assigned for his area
Coordinates and assists in inventory audit

Function and Duties of warehouse operation Manager
Function and duties
Large warehouses have this vital function of warehouse operation manager so as to ensure smooth operation of the warehouse. He is responsible to remove any bottleneck in the work flow of a warehouse. His area of operation starts right from incoming material section, store replenishment and sorting by order pickers and forklift operators and dispatch section to ensure that there are no queues and material movement is smooth throughout the warehouse area. He has to take immediate decisions to clear the various areas and avoid breakdowns and blockages in material inflow and outflow.

Check your progress Exercise D
1.      Name the important functions which are carried out in store division.

        -------------------------------------------------------------------------------------------------------------------------------------
2.      To whom does Store/warehouse manager report in a manufacturing organization?

1.8 Summary

A warehouse is a commercial building for storage of goods. Warehouses are used by manufacturers, wholesalers, exporters and importers and transporters. It is an integral part of Logistics so as to increase responsiveness to customers in the marketplace for business organizations. The activities in Warehousing include
·                    Receiving
·                    Inspection/ Acceptance
·                    Proper Storage
·                    Order preparation and order picking
·                    Dispatching/ Delivery/Loading on the trucks
·                    Inventory management
There are two kind of benefits of warehousing viz economic and service benefits.
The economic benefits result due to savings in transportation costs viz
1. Consolidation
2. Break-bulk and cross Dock
3.Processing /postponement
4. Stockpiling
The service benefits are benefits arising to end customer in the marketplace and comprise of majorly five benefits viz spot stock, assortment, mixing, product support and market presence.
To run a warehouse , one requires a proper organization structure in a warehouse The important functionaries in a warehouse are store manager, IT Manager, Maintenance engineer, Warehouse officer, Inspection Officer, Inventory controller, Store keepers (can be more than one),Warehouse Operations manager.
1.9           Bibloigraphy
Reference book—Warehousing Management & Inventory control-Saxena
Logistics Management – By Donald . J. Bowersox,David. J.Closs
   1.100 Exercise A. Answer 1: Purpose of a warehouse is to store material safely and in order
   Answer 2: Tick all four options and all are correct.
   Answer 3 : Purpose of a forklift is to fetch the material from the shelves of the warehouse and    to transport it to Dispatch section. They are also used to bring the material from incoming department to store department and put it in shelves by order pickers.
Answer 4. Inventory in a warehouse is all the material kept in the storage warehouse.
Answer 5.The material stored in a warehouse consist of chemicals, raw material, stationery , electrical items, tools and tackles, lubricants and oils etc etc.
1.101 Exercise B. Answer 1 .The three important activities are 1. Requisitioning of materials 2. Material inspection 3. Warehousing operations
Answer 2: The role of an order picker is to sort the material from the shelves of warehouse and transport it to dispatch section. They also bring incoming material in the warehouse to put it in shelves of the storage area of warehouse.
Answer 3: Purpose of material inspection in the warehouse is to ensure quality of the incoming material and avoid defective and broken items during transit
Answer 4 :“stock out” situation means non-availability of the material when order picker reaches to fetch the material from the shelves.
1.102 Exercise C
Answer 1: 4 methods of saving costs of transportation are1. Consolidation 2. Break-bulk and cross Dock 3.Processing/postponement 4. Stockpiling
Answer 2: 5 ways of service through warehousing are spot stock, assortment, mixing, product support and market presence.

1.103 Exercise D Answer1. The important functionaries in a store department are Stores Manager
IT Manager, Maintenance engineer, Warehouse officer, Inspection Officer, Inventory controller, Store keepers (can be more than one), Warehouse Operations manager, Supervisor, stock Records section
Answer 2 : Store manager in a manufacturing organization reports to To material manager
1.10 Terminal Questions
1.      There are five basic service benefits achieved through warehousing: Viz: Spot stock, Assortment, mixing , production support , market presence. Explain each of them.
2.                  Explain the economic benefits of Warehousing with diagrams in terms of A) Consolidation B) Break Bulk AND Cross Dock C) Processing /Postponement D) Stockpiling
3.      Explain the function and duties of the following officials in warehousing.
A)    Store manager b) Inventory controller c) Inspection officer d) Supervisor stock record section
4.      What are the three different activities in a warehouse? Explain each of them in detail.
5.      Explain the importance of warehousing to a transporter, manufacturer and a wholesaler?

An Article on Importance of Rail Road Logistics written by Professor Akhil Chandra

2011-06-16T00:12:00.000-07:00

Rail Road Logistics is a Strategic Opportunity for INDIA

When warren Buffet invested 26 billion dollars year before last to acquire control of Burlington Northern Railroad in the United States, there was a buzz around the world in Logistics industry about the importance of railroad logistics. This only emphasizes the importance of Rail Road Logistics in the hinterland of every country. After all a good Logistics infrastructure in the hinterland boosts imports and exports of the country in a big way. There is a lesson also for India in it that Rail Road Logistics can not be neglected any more and has a very crucial role in improving freight traffic. Today every leading country in the world including China and European countries are busy in expanding their Rail Road network and linking it to their main ocean ports. China already has the most advanced and extensive high speed rail line in the world and soon that network will be connected all the way to Europe and the UK! China is now making plans to connect its high speed rail line through 17 other countries in Asia and Europe in order to connect to the existing infrastructure in the EU. Additional rail lines will also be built into South East Asia as well as Russia, in what will likely become the largest infrastructure project in history.

There is world wide recognition now to the fact that Rail networks have a long term optimal logistics play for the future and are vital for inevitable expansion of global trade.

It is now a well known fact that Logistics cost in India are among highest in the world and are of the order of 13 per cent of GDP while in developed countries, it is only 8 to 9 percent of the GDP. In China, it is 10 per cent of GDP. A higher Logistics cost in India as compared to other developed nations is a major worry and is a symptom of poor logistics infrastructure of the hinterland. This is largely due to heavy congestion at the inland, Road and ocean ports, higher turn around time of the cargo ships and most of all a lack of good and dedicated Rail road network for the movement of goods apart from modern ocean ports.

And among various options as remedy to above problems lies in improving Rail Logistics in the country so as to shift most of the goods traffic from Road to Rail.

As fuel prices rise, trucking will be further impacted. In contrast, rail can move product more cost effectively in most cases and will also contribute to lower carbon emissions contributing towards a green world. In India as organized Retail is to increase as and when Government of India allows multi branding Retail for multinationals, the efficient movement of both raw material and consumer products will be essential to the country's continued expansion as a rising economic super power of the 21st Century. When viewing the current scenario, the national highway system of India is estimated to encompass approximately 4% of the total road system of the nation, yet 40% of the cargo volume moves by truck along this network.

There are inherent advantages of the Rail container transport over transportation by road and can be briefly summarized as under.

i) Lower transportation cost

ii) Reliability is higher in comparison to Road

iii) Safer and secure movement of goods

iv) Reduced Accidents

v) Very environment friendly

Inspite of the above advantage , the present rail share in container transport is around 27% and is not increasing because of following reasons.

· comparative benefits offered by road transport: faster, door to door service, aggregation of smaller volumes

· Lesser waiting time at ports and terminals

· avoidance of additional handling of cargo at rail terminals

All these help reduce costs in comparison to rail. We have in our country world’s second largest Rail network to boast about spread over more than 81000 Km and the freight segment accounts for roughly two third of Railway’s revenue but our Tonne per Kilometer costs for Rail freight is three times that of China which is really alarming.

Some of the efforts taken by Indian Railway to improve the situation are as under but more needs to be done.

i) Enhance Rail Logistics in form of Double stacked containers

ii) Dedicated Freight Corridors connecting the hinterland

iii) Private participation scheme.

Let us see the benefits of each efforts one by one.

Why Double stacked Containers

Double stacked Containers technology is a cheaper way of movement of Goods as shown in the above picture requiring lesser number of goods trains. Due to lower haulage cost, the rail share shall increase. This also shall match the throughput for larger ships thus leading to lower turnaround time for the vessels resulting in huge savings of handling costs at the port. This shall increase better utilization of track capacity and rolling stock. As delivery time of goods shall improve , this is bound to reduce inventory at various pockets throughout the industry.

Dedicated Freight Corridors

Dedicated freight corridors for Rail Road enable the railway infrastructure to carry very high level of freight leading in reduction of transportation costs and inventory costs at Inland Container Depot. Such corridors ( DFC) are being created from Jawaharlal Nehru Port in Mumbai to Dadri and Delhi's main container terminal at Tughlakabad while eastern DFC will run from Ludhiana to Sonnagar via Kanpur and Allahabad.

Private participation scheme

Indian railways have enjoyed a near monopoly but recently private players like Adani Logistics have been allowed to enter Rail Road Logistics in a big way.

Conclusion

There is a a huge expected growth in area of Textiles, handicrafts , readymade garments and many industrial products and as such greater demand for containerization is being forecasted. Industrial development is bound to increase coupled with developments of larger SEZs and industrial parks. This will help container trade to go up.with private container trains assisting sufficient hinterland connectivity for ports, Railroad Logistics is bound to play a crucial role in contributing towards higher GDP growth in the country.

Written by Professor Akhil Chandra

Institute of Logistics and Aviation

New Delhi

Akhilchandra06@gmail.com

love Thy animals

2011-05-19T21:46:00.000-07:00

News of missing tigers, enslaved elephants, dying dolphins and disappearing Olive-Ridley turtles have become much too common for comfort. Why are we — most of us, anyway — cruel to animals? Urgent collective and individual reflection is called for to examine the way we relate to other life forms, particularly since as we are going against the time-honoured tradition of res-pecting all of God's Creation.
Don't animals, birds and other life forms have the right to coexist on Planet Earth with human beings? According to Hindu texts, there are 84 lakh species — yoni — and humans are only one of them. All species exist in the eternal, unchanging, spiritual essence that is called Brahmn , and this truth is the very basis of the concept of the Oneness Principle. All have an equal right to survive experience and enjoy the produce of Mother Nature together. Human beings have not been arrogated any special right as such to dominate or cause hurt to other creatures. In fact, the scriptures advise us to relate to all species and fellow human beings with love and compassion. Animals were loved, nurtured and even worshipped, so much so that they were exalted as divine creatures, as is evident from the way they are depicted on frescoes and sculptures in ancient temples and texts. Interestingly, animals are given due importance as avatars of Lord Vishnu.
In the Dashavatara , the Lord appears as Matsya or fish, followed by Kurma the turtle, Varaha the boar, and Narasimha the half-lion, half-man. Stories from the Panchatantra revolve around animals and birds through whom profound truths are expressed, and so the work appeals to children. It helps inculcate in them a sense of caring and bonding for their fellow creatures. Similarly, Aesop's Fables and the Buddhist Jataka tales have animals as their main characters.
In the war against Ravana, Lord Rama took the help of monkeys and bears, reiterating the need to respect and cooperate with animals. Lord Krishna's favourite animal was the cow. The idea of peaceful coexistence is represented by showing animals as vahans or carriers of Hindu gods and goddesses. Airavata, the white elephant with multiple tusks is the vehicle of the powerful king of the devas , Indra. The water buffalo is the vehicle of Yama, God of death. Shani rides on the crow while Ganesha prefers the humble mouse. Nandi the Bull is Shiva and Parvati's conveyance. Similarly, the garuda or eagle is associated with Vishnu and the peacock with Kartikeya, the brother of Ganesha. Today's beleaguered tiger helped Goddess Durga overcome demons.
The churning of the ocean in Hindu mythology, the manthan carried out by the Suras and Asuras , was not without the valuable assistance of animals. Vasuki the snake was used as the rope and a mountain was the churner. The fulcrum of support was provided by Vishnu in the form of a giant turtle that supported the mountain. Kamadhenu the Divine Cow emerged from this operation, besides the pot of nectar, amrit , and the pot of poison, vish . It was a cross-species effort. In Greek mythology, Aphrodite, the Goddess of love, desire and beauty had the sparrow, dove and swan as her favourites. Artemis, Goddess of animals and twin sister of Apollo had dogs, deer and goose as her sacred animals while Apollo, the son of Zeus, was associated with the dolphin and crow. Zeus's favourite was the eagle.

By reviving national and international traditions that uphold the human-animal symbiotic relationship, we can recast the way we perceive life forms other than our own. Mythology can help revive and rejuvenate a relationship gone awry.
Written by Prof Akhil Chandra
Institute of Logistics and Aviation management

Application of IT for clinical trials for accuracy and cost optimization

2011-05-08T06:16:00.000-07:00

Role of IT in reducing cost and increasing Data Accuracy for CROs (Contract Research Organizations) for planning and conducting Clinical Trials

Pharmaceutical companies spend enormous amount of money in developing a drug with expenditures touching at times more than Rs 4000 Crore and the time taken in the entire process right from the stage of the drug’s inception in the laboratory to the stage of introducing the product in the market for the consumers can be as high as 12 to 15 years.. The drugs have to pass through various stages including clinical research and development, planning and conducting clinical trials of the drugs and final acceptance of the drug by regulatory authorities before it reaches the market to the patients for benefit of the mankind.

Well the stakes are high and as such there is a fierce competition among pharmaceutical companies and their research and development department to be the first to launch the new drugs in the market for consumers as the rewards to pharmaceutical companies are huge if the drug has been successfully introduced in the market. Speedy development of the drugs is therefore a much sought after arena for pharmaceutical companies. CROs remain under increasing pressure to reduce the entire cycle time of drug development and Information Technology is being used increasingly during the process of clinical research and trials for the purpose of ensuring accuracy of data and reduction of process cycle time.

Among various stages of drug development and introduction, Clinical trial is the most crucial and important stage which are normally outsourced to CROs (Contract research organization) by the pharmaceutical companies. The CROs further hire investigators from medical community to conduct the clinical trials on volunteers or patients. The process to conduct clinical trial goes through a long process involving various activities like Protocol Design and Study Start Up, Patient and Investigator Recruitment, Clinical Trial Management, Clinical Data management, Data Analysis, Clinical Supplies and Regulatory and Safety.

At present there is still a lot of scope of improvement in the entire process of clinical trial due to inefficiencies in manual methods often adopted for data capture and data analysis in India and lot of unnecessary paper work in form of case report forms used for data collection can be avoided by introduction of suitable and relevant IT applications at various stages.

The application of Information technology in various forms can be summarized broadly as under.

1.Clinical Trial Management System (CTMS)

2.Clinical Data Management system ( CDMS)

3.Electronic Data capture system(EDC)

4. Interactive voice Response System (IVRS) as part of EDC mentioned above

5.RFID ( Radio Frequency identification technology) as Data tracking system.

6. Web based Clinical Trial Portals

In our further study of above system , we shall now focus on each of the above applications very briefly as each application described above is a subject in itself.

1.Clinical Trial Management System (CTMS)

CTMS is a software developed and customized to application of clinical trials and is used by pharmaceutical industry to manage the large amount of data captured during the operations of clinical trials. It maintains and manages the planning, preparation, performance, and reporting of clinical trials, with emphasis on keeping up-to-date contact information for participants and tracking deadlines and milestones such as those for regulatory approval or the issue of progress reports. Data captured by CTMS is further used for creating business intelligence (BI) which acts as dash board data at a glance for trial managers.

2.Clinical Data Management system ( CDMS)

While CTMS is a centralized system for reporting and supervision, CDMS is a tool used in clinical research to manage the data of a clinical trial at the investigator site.. The clinical trial data gathered at the investigator site in the CDMS as storage system. To reduce the possibility of errors due to human entry, the systems employ data verification techniques to maintain the integrity of the data.
In CDMS the investigators directly uploads the data on CDMS and the data can then be viewed by the data validation staff. Once the data is uploaded by site, data validation team can send the electronic alerts to sites if there is any issue.

3.Electronic Data capture system(EDC)

EDC system is mainly used in late phases where the clinical trial data is huge due to more number of volunteers/patients. Typically, EDC systems provide:

A PC connected to a central server for data entry
Data validation component in form of software to check user data
Reporting system analysis of the collected data

EDC systems are also used for Pharmacovigilance and post market safety surveillance.

4. Interactive voice Response System (IVRS) as part of EDC

IVRS system lets the patient/volunteer dial a telephone number and access the IVRS system in form of a computer system which has the capability to convert the voice in digital data and allows the dialer to interact with the digital voice offered by the computer. The volunteer is asked pre-recorded questions and instructions after the dialing and getting connected with the IVRS system. The volunteer replies its response to the digital voice generated from computer and he is thus able to record his response in voice form on the storage system of IVRS system.

The benefits of IVRS system IVR / IVRS is a simple tool that has many benefits, such as

· Facilitation of collection of data from a Remote Patient

· Simplification of clinical trial data input, clinical trial management and output

· There is no manual intervention and as such is less prone to errors.

· Larger amount of clinical trial data can be collected/dispensed and the target audience of patients can be increased during subsequent phases of the clinical trial run.

· It makes the whole process less time consuming.

5.RFID ( Radio Frequency identification technology) as Data tracking system.

RFID solution for the clinical trials process involves tagging clinical samples or specimens of patients/volunteers collected in test tubes with RFID tags helping to track its movement wirelessly and read its tracking through RF readers.

.Another area of applicability is for patient/volunteer management where a constant track of the patient can be done by issuing an RFID wrist - tag to the patient. This would help keep track of patients within the premises.

Benefit of RFID tracking

· Increase the efficiency of operations at all locations and in effect reduce operational expenditure.

· Ability to track temperature sensitive samples and be able to take corrective action to immediately preventing degradation of samples in transit.

· Ability to measure performance based on time taken for samples moving between locations

· Removing manual intervention in tracking and hence, cost reduction in item tracking

· Automated tracking of patients within site premises.

· Increased ability to share information between partners in the clinical trials

· For CROs, removal of delays leads to better service and higher customer satisfaction levels.

6. Web based Clinical Trial Portals

Clinical trial portals allow volunteers/patients and investigators to connect with each other through the internet and they share their knowledge and experience in a collaborative manner. Clinical Study-Portal is a generic solution and is ideal to handle and share information on multiple Clinical Trials carried out at different locations. The access to the Portal for all Parties involved in a Clinical Trial is role based .The emphasis of the portal solution remains on keeping access and sharing of information in a user friendly manner.

Conclusion
The role of IT in clinical trial is crucial and unavoidable and shall only increase in future due to cost optimized solutions offered by information and communication technology and the foremost attraction is that it enhances the accuracy of data handled during clinical trials reducing the risk of missing useful information which may be detrimental to the health of patients post marketing of the drugs and its consumption. The cost benefits are also attractive as it reduces manual work and offers a more systematic and organized approach for clinical trial runs. The clinical trial process is often plagued with inefficiencies and IT solutions are proving a boon to CRO industry.

Written by
Professor Akhil Chandra
B.E. Electronics and Communications, IIT Roorkee, MBA
Indian Clinical research Institute,A 201 Okhla Phase I
New Delhi

Vehicle tracking system facilitating Real Time Logistics Management

2011-04-14T20:59:00.000-07:00

Vehicle tracking system facilitating Real Time Logistics Management

Third party logistics Companies are under increasing pressure to maintain on time deliveries, reduce inventory levels, reduce ‘in transit shrinkage’ and deliver the right product at the right place and at the right time. And this pressure comes from who else than Retailers who are competing fiercely in the market place to make the product on their shelves always available to avoid the much dreaded ‘stock out’ condition. Further in the cold chain management scenario, maintaining timings are still more crucial as every product has an expiry date like medicines and edible items and once the expiry dates are over due to delays in transportation, there is a huge loss to all participating partners in the value chain in terms of capital investments, credibility and survival in the cut throat environment in which Retailers and all the the value chain partners are operating.

. After the advent of E-Commerce, there has been a dramatic increase in the use of internet for retail business transactions and so has the pressure on third party logistics gone up to supply the products in rapid time to customers. The customer places an order over the internet and wants the products delivered at his doorstep. Any variability or inconsistency in being able to deliver on time can not only irreparably damage the retailer brand equity, but also often can result in cancellations.

Well, the technology has a solution to all these problems. A real time Logistics information system based on four technologies viz , GPS, GPRS, RFID and internet makes the life simpler to logistics companies providing an end to end tracking of all the assets being moved from manufacturers to warehouses/distribution centers to retailers.

How it is achieved?

1. Assets are tagged with the help of RFID (Radio frequency identification) tags. An on line inventory for the assets within the truck can be taken with help of a sensor and RFID transceiver mounted inside the truck. The trigger to RFID transceiver and the sensor to scan the RFID tags is provided by opening and closure of the gate of the container/vehicle. An inventory created upon door closure at each delivery location of the vehicle is compared to the last prior inventory, and differences identified by the comparison are matched against a list of cargo units scheduled for removal at that delivery location. Any mismatch identifies cargo units incorrectly handled at that delivery location in time for corrections to be made. This information can be sent to central control center over a GSM or GPRS wireless network. After acquiring the valuable data by the control center, commands can be transmitted through the same route through which data was acquired. The commands could be to raise or lower the temperature inside the reefer containers, trigger alarms, stop engines, change directions or send personal messages.

2. The asset tracking is done through GPS (Global positioning system) devices mounted in the mobile van. The GPS enabled Track transceiver collects critical data such as location, speed and vehicle and driver information. in terms of longitude and latitude with help of the signals received from the GPS satellites and such information collected is sent to central computer system through the GPRS (general packet Radio Service ) with the help of medium provided by mobile communication towers in a wireless manner.

3. By combining GPS information with advanced software applications , managers and dispatchers can see current locations and routes of mobile resources on an online map, find out when a vehicle travels across a defined perimeter ,view reports on activities such as number of stops, time at each stop, speed, idling time, routes traveled, miles traveled and trailer door open or close.

4. The movements of these vehicles can be tracked on a Google Map on a laptop/PDA or a mobile phone with help of the web interface based on the location information thus collected in terms of Latitudes and Longitudes measured and transmitted through GPRS as explained above. 2.Advantage of the web interface is that such tracking can be supervised from any location wherever internet service is available. The customer can, at any time, login through internet, using her order number and view the status of vehicle during transit on the Google map with its expected time of delivery.

5. A combination of onboard alarms, sensors, wireless monitoring and tracking offers the best available means to respond to cargo theft and security threats while also providing asset management capabilities.

6. If you’re in the business of transporting high value or high risk cargo, knowing the location of every bag, package, box or pallet is an important business driver, reducing the number of lost or misplaced packages. This improves better inventory control supporting just-in-time deliveries and ultimately, better customer service.

7. Access to mission critical data quickly and wirelessly may mean the difference between profit and loss for your company. Such solutions open a new world of fleet management that gives the transporter companies the tools to monitor the status and whereabouts of trucks, delivery vans, heavy equipment, leased vehicles and marine vessels. You get a solution that offers a robust communications and position-tracking platform that supports a more productive fleet – whether it’s to improve billable miles or tractor to trailer ratios.

Types of vehicle tracking Devices

Several types of Vehicle Tracking devices exist. Typically they are classified as "Passive" and "Active".

"Passive" devices store GPS location, speed, heading and sometimes a trigger event such as key on/off, door open/closed. Once the vehicle returns to a predetermined point, the device is removed and the data downloaded to a computer for evaluation. Passive systems include auto download type that transfer data via wireless download.

"Active" devices also collect the same information but usually transmit the data in real-time via cellular or satellite networks to a computer or data center for evaluation sa explained above and in the diagrams.

Business benefits of Vehicle tracking system

	· Increased fleet productivity due to enhanced visibility in the supply process
	· Details like speed of the vehicle, no. of stops, route taken etc. aid in better employee management and more focused shrinkage management
	· Hands-on information on position and status of deliveries assist in better fleet management
	· Waste elimination
	· Reduced return trips as customer can schedule with the help of exact time of delivery made available to him
	· The additional facility made available to the customer increases his confidence with the retailer and therefore opens doors to further business thus improving customer metrics by providing your customer with accurate status and location updates. · Reward drivers who keep idling and out of route miles to a minimum · Minimize losses due to theft or spoilage with onboard sensors that notify you immediately when your assets may become compromised. · Optimize asset use through visibility and control supported by real-time position mapping of mobile assets. · Remotely manage temperature Conclusion Such real time logistics management system provide logistics manager with complete transparency into their assets and operations, improving fleet performance and reducing costs, On demand access to time- and location-sensitive data, minimizes delays, protects assets and enhances customer service. Further they provide critical security and location information with monitoring, control and reporting capability. Solutions have the capability offering the powerful combination of onboard deterrence and immobilization in addition to instant notification and location monitoring. It effectively reduces risk while also allowing fleet managers to more efficiently operate their fleets..In order to succeed in today's global marketplace, companies must be aware of these trends and develop a logistics management strategy that capitalizes on the best-of-breed technology solutions. Only then, can they meet customer’s demands and be well prepared for the future. Written By Professor Akhil Chandra Institute Of Logistics and Aviation Management

warehouse Robotics

2011-03-13T10:33:00.000-07:00

Warehouse Robotics

Those who have worked in Warehouses would agree that order picking is a monotonous and tiring job day in day out picking merchandize from the storage shelves either manually or through Forklifts. . Basically it involves taking different products in different quantities from different parts of the warehouse and combining them for an order involving endless walking or travelling on forklifts and lot of human efforts.
Imagine if storage shelves would have been mobile and operators were stationery to save endless walking and movements by humans. In such a scenario storage racks would reach the operator themselves with the ordered items readily available to be picked.
This wishful thinking is now a reality and is no longer a figment of imagination or from a fiction book. Automation in many warehouses in U.S. and Europe has reached such a stage where Robots navigate the warehouse to find the storage unit containing the requested items, lifts the unit up by sliding under it, and bring it to a human worker at a work station. Amazing but true, these dedicated, well designed, and efficient workers in form of Robots provide unparalleled improvements in almost every major industry paving a revolution in form of Robotized warehouses.
Simply put, the racks are brought to the human workers and not the other way around. This system eliminates the need for endless walking. Instead of having many workers work on the same order, the such system allows for a single touch approach. With fewer hands used on each order, productivity increases, errors decrease and the work process is streamlined saving also rising manpower costs.

KIVA Systems is a company in

U.S.

which manufactures and have supplied thousand of such Robots to third party distribution centers and warehouses. These warehouse workhorses provide a new way of sorting, storing, and shipping products.

The whole process operates basically with the help of following constituents.
Robotics
Robots powered by rechargeable lead-acid batteries, are typically 2 feet by 2.5 feet and stand a foot high, with blue running lights on their orange facades. They weigh 250 pounds apiece and can carry four times their weight. The Robots lift loads, called "pods," which look like stacks of shelves, by raising and lowering a platform like a corkscrew, which they accomplish by spinning in place. On the bottoms of the robots are scanners that read stickers affixed to a concrete warehouse floor. The robots navigate around the warehouse using an onboard camera to read barcode stickers on the warehouse floor. The maximum velocity of a robot is 1.3 meters per second. The Control unit of a Robot consists of Programmable Logic Controllers which are capable of issuing instructions to DC Motors mounted on the Robotic platform to provide the mobility to the Robot while the receiving unit receives digitally coded instructions issued by the Central Computer cluster described below.
Central Computer cluster
This is the main command center and issues directions to Robots to navigate on the floor. Robots continuously communicate their positions to the central computer and are guided by the central computer system.
Wi-Fi communication system

This is used by Robots to communicate wirelessly with the computer servers that run order-processing software and deliver directions. Conventional Wi-Fi routers, mounted in the warehouse rafters, broker these communications.

Sticker guidence system attached to the floor
Robots are guided by a very simple grid of stickers attached to the floor. . The stickers form a grid that covers the entire robot operating area

Process Functioning

When an order for an item arrives, it is transmitted wirelessly to above stated Robot, which navigates the warehouse to find the storage unit called Pods containing the requested items, lifts the unit up by sliding under it, and brings it to a human worker at a work station. The worker picks the items needed to fill orders, while the robot returns the storage unit to the warehouse.
Robots hum around the factory floor at the speed of a walking person--3mph--delivering to human packers precisely those items needed to fulfill an order When a Robot sidles up to a human picker, an overhead laser paints a dot on the item on the pod that the human should pick up. An adjacent computer screen flashes the quantity the packer needs to put in a box to fulfill an order.

Automated order picking symphony

The robots navigate the warehouse by pointing cameras at the floor that read two-dimensional bar-coded stickers laid out by hand one meter from each other in a grid. The robots relay the encoded information wirelessly to the central computer cluster that functions both as a dispatcher and traffic controller, To fulfil an order, a human operator stands at a pick and pack station on the perimeter of the warehouse. Robots crisscross the floor. When the robot positions itself in front of a worker, a laser pointer on a metal pole shines a red dot on the product. Once the worker has retrieved the item, the robot departs and another takes its place. Workers watch for the laser dot, pick a product, scan its bar code, throw it in a box and start over again.”

Summary

Robotics warehousing has unleashed a revolution in order fulfilment and Automation technology is enabling it. In response to competitive market pressures for shorter cycle times and greater accuracy, warehouses are increasingly using process control and Automation Technology. Due to clear advantages in terms of cost reduction and improving productivity and safety, Robots shall create a permanent place for themselves in future automated warehouses servicing human beings.

Written by
Professor Akhil Chandra

Goverment seriously viewing to allow multibranding to open up Retail sector to foreign multinationals

2011-03-09T20:36:00.000-08:00

Dear Students,

Government of India is seriously viewing to open up multibranding to foreign multinationals like Wal-Mart, carrefour and Metro etc. as per the following news item. The opening up of Retail sector shall improve the indian infrastructure in the area of Cold Chain Management inviting FDI for establishing state of art warehouses and providing containers like Reefers and most important foreign multinationals shall bring lot of technological knowhow to improve the Food Supply chain in the agricultural sector. This is a welcome news as you all are aware that there is so much of wastage of agricultural produce due to lack of proper transportation and storage facilities. Exciting times are ahead and new employment opportunities shall arise in area of Logistics and Supply Chain forefronted by Retail Sector.

Professor Akhil chandra

NEW DELHI: The government is looking at allowing foreign direct investment (FDI) in multi-brand retailing as part of a slew of measures to make India more attractive to overseas investors.

Senior government officials told TOI that the thinking was that a gradual opening up would be a better strategy with global chains first allowed to open stores in metros, while wholesale cash-and-carry being limited to smaller towns and cities, at least for the moment.

The move being piloted by the Department of Industrial Policy and Promotion is at the stage of discussion with political clearance yet to be accorded to the proposal. Once there is consensus on the issue within UPA, which is unlikely until elections in five states are over, states will need to be taken on board, a senior government official said.

The Economic Survey, which was tabled in Parliament last month, had also suggested gradual opening up of the retail sector with the initial go-ahead limited to a few cities.

At present, the government allows 51% FDI in wholesale cash-and-carry where global players such as Wal-Mart and Carrefour are only allowed to sell to bulk customers such as hotels, canteens and even local retailers.

Officials said the move to open multi-brand retailing is part of the plan to "send the right signals to foreign investors", some of whom have chosen to stay on the sidelines since a string of scandals hit the headlines last year

IT Exemption in the budget for cold chain and food warehouses

2011-03-02T20:21:00.000-08:00

Dear ILAM Students,

In the recent budget announced by Finanace minister last week, Government of India ( GOI) has given fresh incentives for setting up cold chain and food warehouse facilities in the country so as to strengthen cold chain distribution system and much needed supply chain infrastructure of food items in India . The 35 AD Income tax provisions below are for your reference in this direction.
I am confident that this will open up new opportunities for employment of MBA/BBA students of Logistics and Supply Chain for fullfilling the lack of trained manpower in the Logistics Domain.

(A) Regarding the business of setting up and operating a cold chain facility:

The business of setting up and operating a cold chain facility is considered as a “specified business” for the purposes of section 35AD by virtue of provisions contained in sub-clause (i) of clause (c) of sub-section (8) of the section and so, the expenditure of capital nature incurred, wholly and exclusively, for the purpose of such business is allowable as a deduction. Specified percentage of profits of an undertaking engaged in the case of a business of setting up and operating a cold chain facility for agricultural produce is exempt under sub-section (11) of section 80-IB of the Act if the undertaking begins to operate on or after 1^st day of April 1999 but before the 1^st day of April, 2004. The period of exemption varies according to the status of the assessee. Thus, in respect of the aforesaid business, investment-linked deduction is available to an assessee under section 35AD and profit-linked deduction is available under section 80-IB.

As stated above, an assessee cannot claim dual benefits under the aforesaid two sections as per the proposed amendment to sub-section (3) of section 35AD. It is also clear that profit-linked deduction under section 80-IB is available to those undertakings who began to operate before 1^st day of April, 2004 and so, new entrants to this business are not entitled to claim deduction under section 80-IB. But as the deduction under this section is available for ten consecutive years (or twelve consecutive years in case of a co-operative society), those assessees who commenced such business on or after 1^st April, 2001 (or 1^st April, 1999 in case of co-operative societies) may have remaining few years for which they are entitled to such deduction. But they also cannot switch over to claim benefits under section 35AD as the proposed amendments to Section 80A contain necessary restrictive provisions.

To conclude, an assessee carrying on the “business of setting up and operating a cold chain facility” does not have any choice either to claim deductions under section 35AD or under section 80-IB.

(B) Regarding the business of setting up and operating a warehousing facility for storage of agricultural produce:

The business of setting up and operating a warehousing facility for storage of agricultural produce is considered as a “specified business” for the purposes of section 35AD by virtue of provisions contained in sub-clause (ii) of clause (c) of sub-section (8) of the section and so, the expenditure of capital nature incurred, wholly and exclusively, for the purpose of such business is allowable as a deduction. Specified percentage of profits of an undertaking engaged in the case of a business of setting up and operating a cold storage plant is exempt under sub-section under clause (iii) of sub-section (2) of section 80-IB of the Act if the undertaking begins to operate such a plant at any time during the period beginning from 1^st day of April 1991 and ending on the 31^st day of March, 2005. Although the two activities of “warehousing” and that of a “cold storage plant” are not identical and overlap each other in some respects, in respect of the aforesaid business, investment-linked deduction may be claimed by an assessee under section 35AD and profit-linked deduction under section 80-IB.

As stated hereinabove, an assessee cannot claim dual benefits under the aforesaid two sections as per the proposed amendment to sub-section (3) of section 35AD. It is also clear that profit-linked deduction under section 80-IB is available to those undertakings who began to operate before 31^st day of March, 2005 and so, new entrants to this business are not entitled to claim deduction under section 80-IB. But as the deduction under this section is available for ten consecutive years (or twelve consecutive years in case of a co-operative society), those assessees who commenced such business on or after 1^st April, 2002 (or 1^st April, 2000 in case of co-operative societies) may have remaining few years for which they are entitled to such deduction. But they also cannot switch over to claim benefits under section 35AD as the proposed amendments to Section 80A contain necessary restrictive provisions.

To conclude, an assessee carrying on the “business of setting up and operating a warehousing facility for storage of agricultural produce” does not have any choice either to claim deductions under section 35AD or under section 80-IB.

Regards
Prof. Akhil Chandra

Mobile Supply Chain management

2011-02-14T02:41:00.000-08:00

MOBILE SUPPLY CHAIN MANAGEMENT (MSCM)

It is Mobility required most in Supply Chain Management stupid!

Yes, it is a dream for supply chain and logistics people that flow of information and availability of materials and funds could be provided everywhere regardless of time and location. The focus is on increase in efficiency of supply chain and improvement of responsiveness to customers. And the dream is now becoming a reality through mobile communication wireless technology. What it basically offers is accessing and delivering information by Anyone, Anywhere and Anytime. (3 As) . Cellular sets( Mobile phones), Personal Digital Assistants( PDAs), Palmtops and now with the release of the iPad by Apple a hardware revolution with tablet computers has begun and all these gadgets open a new horizon for supply chain management (SCM) systems for businesses providing the ultra portability to all the participants of Supply Chain viz raw material suppliers, manufacturers , distributors , retailers with their manpower and customers widely spread in the factories, stores, warehouses, distribution centers, transportation and marketplace.

So, What is mobile SCM ?

Simply put, mobile supply chain management is to manage the system of suppliers, producers, distributors, retailers and customers where material, financial and information flows connect participants in the direction at anywhere, anytime based on ubiquitous network made possible through wireless mobile communication devices which have been stated above viz cell phones, PDAs, i PADs etc. . Mobile supply chain applications allow users to request information and conduct whatever they want, whenever they want and how they want.

The mobile capabilities of these gadgets provide a convenient, time-saving, and highly accurate means of capturing data on movements of goods and other events. These capabilities simplify checking and monitoring tasks and provide up-to-date information on process status, enabling enterprises to react swiftly to unforeseen events creating a sophisticated adaptive supply network.

Which technologies have made mobile SCM possible

The prominent technologies are wireless communication technologies like WiFi, internet access through mobile like 2G,3G and 4G , wireless LANs, RFID , GPS ( Global positioning system) and mobile gadgets as stated above . Apart from the above it is the cloud computing which has given a ubiquitous access and integration to ERP software, databases and Supply chain software modules like SCM, CRM,WMS, TMS, EDI to name a few.

Applications where Mobile SCM is a boon.

There are numerous applications like vehicle tracking, dispatch, route analysis, warehouse operations, facility management, depot management, routing, scheduling and many other SCM related solutions. The vehicle tracking apps with GPS technology integration allows businesses to track and manage vehicles through their mobile device from anywhere and at any time.

The dispatch, warehouse operations, depot management applications let mobile employees in the manufacturing businesses to get on-demand access to corporate data while on the road through GPS with wireless technology for better and simple management. . Integration with voice recognition enables hands-free processing for higher efficiency of warehouse operations. The mobile capabilities of MSCM enable companies to make more effective use of men, machine , material and money (4Ms) for receiving, storage, and shipping tasks. Accurate, paperless data

entry saves you time and trouble. Real-time inventory control with synchronous online monitoring of all stock movements maximizes transparency while minimizing administration overhead.

Instant availability of information on inventory levels, storage bins, and other resources enables better coordination and reduces flow times. RFID and barcode technologies integrated with MSCM ensure accurate, up to date inventory information by using bar code/ RFID scanning through employee’s handheld mobile gadgets integrated with central information depository for automatic data entry increasing the accuracy in the company’s inventory management system. MSCM for dispatch also communicates instant shipment confirmation information in to the cell phone integrated with EDI ( Electronic Dta Interchange. )

The major applications where Mobile SCM is most effective are as under.

1. MOBILE LOGISTICS MANAGEMENT,

MSCM enables more efficient circulation of the cargos or assets in supply chain. By installing wireless equipments and monitoring microcomputer on transportation vehicles, the enterprises who send the cargos can know the amount of load, capability and location of every vehicle at anytime.

2. MOBILE SUPPLY AND MARKETING MANAGEMENT

MSCM enables mobile order management, real-time tracking procedures of product order, price query, and rverse supply chain management.

Through Mobile Supply and Marketing Management, second tier suppliers and distributors can make real-time information interaction with core enterprises, strengthening the channel and controlling capability of core enterprises.

3. MOBILE MANUFACTURING MANAGEMENT

MSCM realizes the real-time interaction between managers and workers working on the shop floor of the factory improving quality, efficiency and response time to its next internal customers. This is proving to be a big tool in asset management of semi finished and finished goods and provide an electronic approach to conventional KANBAN systems used in factory for visual demand and replenishment for a just in Time (JIT) aand lean management approach. MSCM is also a useful tool in total quality management and six sigma approach which manufacturing organizations are continuously striving for.

4. MOBILE INVENTORY MANAGEMENT

Through Mobile equipments or wireless devices, the inventory and management capability for raw materials of enterprises is greatly increased. In the main management channel, receiving and sending MIS, automatic stocking up management, channel inventory allocation management can be greatly enhanced.

Based on orders, for the inventory of products, sales products, spare parts and recycling wrappages, MSCM helps in productivity-boosting transactions for tasks such as the following:

o Picking and put-away

o Packing, unpacking, and repacking

o Freight loading and unloading checks

o Inventory queries

o Mobile printing

CONCLUSION

Role of IT and telecommunications in Logistics and supply chain industry is ubiquitous and is a cut throat technology to beat the competitors. As businesses strive to be flexible in addressing market needs and aligning their adaptive supply chain accordingly, having the right tools to leverage that flexibility is just as important, if not crucial. The mobile gadgets like tablets, iPAD and PDAs are only enhancing its applications seamlessly throughout the value chain among all its participants be it manufacturers, distributor, vendors, retailers or customers. Multinationals are already utilizing the mobile SCM to sustain their competitive advantages and India can now ill afford to neglect the fruits of MSCM.

In India what is required is a new mind set to embrace IT and telecommunication technology, accept IT based customized solutions to make a beginning and reap the long term but sustainable benefits.

Writer

Prof. Akhil Chandra

Institute of Logistics and Aviation management

Writer can be approached on his E-Mail address akhilchandra06@gmail.com