KaleidoSCOPE

CONTENTS

Articles

Alumni Speak

Industry Interaction

Internship Experiences

News Snippets

Mind-Bender

From the Chairperson’s desk

Dear reader,

Warm greetings from the Indian Institute of Foreign Trade!

I am happy to present before you the third edition of KaleidoSCOPE, the Operations magazine

brought to you by SCOPE, the Supply Chain, Operations and Energy Club of IIFT. SCOPE has played

an important role in complementing the efforts of our distinguished faculty members towards

establishing a strong Operations culture in IIFT, and taking it from its current nascent state to being

IIFT’s forte. We are all very excited about the work this club is doing in inviting speakers from the

industry for guest lectures, floating live projects for the students, and cultivating an overall

enthusiasm for Operations among our students.

KaleidoSCOPE is one such initiative by SCOPE to further drive the passion for Operations by

encouraging participation from students; a celebration of IIFT’s commitment to Operations and

Supply Chain. The second edition, launched last year, met with widespread appreciation for the

topics covered, and the edition this year promises to be even better. The articles in this edition have

a common theme of looking ahead towards the future of Operations and Supply Chain. We have

articles on augmented reality, data analytics, logistics and automation; topics that are clearly shining

beacons in the Operations landscape. It is most heartening to note that our students have a keen

interest in such emerging sectors that would go on to define and support the world we live in.

This edition wishes to instill in our readers an appreciation of and interest in this backbone of

businesses across the world. We’ll all be richer in knowledge and intellect if more students come

out with their own ideas and perspectives on different topics. This would set a strong, productive

platform for discussing and debating these ideas.

I sincerely believe that reading this magazine would be worthwhile, and leave you with a more

nuanced understanding of various advancements in the field of Operations and supply chain. I

wholeheartedly commend the SCOPE team for their effort and wish them all success in their

endeavors.

Best wishes and regards,

Dr (Mrs.) Sunitha Raju,

CP(GSD), Indian Institute of Foreign Trade

Editor’s note

Operations as a domain has a very interesting predicament. It plays a pivotal role in keeping

organizations running smoothly, and yet often fails to evoke the same level of passion and

aspiration as its more illustrious counterparts in Finance, Marketing, and Strategy.

SCOPE was an endeavor to bring together IIFTians with a common interest in Operations and

provide a platform to engage in spirited discussion on the various aspects of Operations. Over the

years, SCOPE has generated sufficient traction for the domain of Operations in IIFT. KaleidoSCOPE

is a testament to that.

This edition of KaleidoSCOPE celebrates Automation of Supply Chain, Logistics, Warehousing and

everything Operations with a clutch of interesting elements. Our colleagues have pitched in with

some really interesting articles, all focused on emerging trends in these fields. This appetite for

peeping into the future is most heartening, and indicates that we are progressing in the right

direction. We have students who undertook projects related to Operations during the summer

internships sharing their experiences with us. We also talked with two practitioners in the industry

about various facets of Operations. Their interviews are a part of this edition. A fun segment on

guessing simple Operations terminology from crossword, and a few recent happenings in the

domain complete this edition of KaleidoSCOPE.

So that’s that! We had great fun in putting this edition together for you, and we are sure that you

will find the magazine to be worth your while.

Happy reading!

SCOPE Junior Coordinators SCOPE Senior Coordinators

Mohit Jain 8130217248 Ankit Shetty 9773627287

Bhavani Singh Jodha 8980776863 Ritesh Kumar 9716772126

Himani Singh 8861214996 Prerna Bhatiya 9958695815

KaleidoSCOPE Junior Editors

Anushree Mundhra 9953053926

Manisha Dang 9711686890

KaleidoSCOPE

Articles

Frontiers of Data Analytics in Supply Chain and Operations Automation in the Factory Shop floor Augmented Reality: Revolutionizing Supply Chain Management Reviving the network: Logistics in India Automation of Supply Chain through driverless vehicles and drones Operational approaches in managing disruption and risks in Supply Chain Vendor Managed Inventory in Supply Chain Supply chain and operations -The labour and human rights perspective Sales Force Management

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Since the last 20 years, the waste and the variation in the quality of products was reduced using various lean and Six Sigma programs. But there are various sectors like health care, mining, chemical etc. where the processes are so complex that even after the application of these lean programs, there is a high swing in the variability of the product. Thus, for such sectors we need a very specific approach which can monitor the processes at granular levels. Analytics provide such an approach.

Analytics is the application of tools which can be either mathematical or statistical to the big business data to refine and streamline the processes. It consists of recording the isolated sets of data, aggregating it and then analyzing it to draw the unexpected actionable insights. Thus we record the data and identify the patterns by analyzing it. There are different types of analytics depending upon the level up to which we analyze the data and extract the actionable intelligence from it, which are Descriptive Analytics, Predictive Analytics and Perspective Analytics. Descriptive Analytics Descriptive analytics is all about understanding the past. The past is subjective as it can be something that happened a few minutes ago or a few years ago. It is like understanding the trends or patterns

that occurred in the past and using it in formulating the approach that has to be adopted in the future. For example, manufacturing firms use descriptive analytics to understand things like inventory levels change throughout the year, average spend on the material movements inside or outside the firm, demand variations over the year, wastage or spillage cost, average spend on packaging, etc. This all data analytics forma the basis for predictive analytics. Predictive Analytics Predictive Analytics is all about predicting the future. It would require the use of data mining, computational techniques and mathematical and algorithmic sciences to predict from the data sets recorded historically. Predictive analytics has a very important application in manufacturing sector. Smooth supply chain without any bottlenecks holds the utmost importance for the company’s profits to stabilize. Machine downtime is the most disruptive hurdle in achieving flawless supply chain. In predictive analytics, we would be able to predict to a great extent when a particular machine will fail. Sensors and tracking techniques would be used to keep a track of the working of various mechanism of the machine. This information would then be used for advanced analytics wherein the historical process data is analyzed, patterns are identified and relationships among discrete process steps and inputs are established to predict when the machine would fail and thus prevent the downtime. Similarly, all the factors having the maximum effect on yield is optimized to get streamlined supply chain. For example, predicting the mechanical failures in advance holds an at most importance for Airline Industry. A machine learning solution based on past data sets and applied on real time basis, predicts the mechanical failure that will occur in

Frontiers of Data Analytics in Supply Chain and Operations

Nakulesh Kagathra

Mohit Rakesh Sharma

Indian Institute of Foreign Trade

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the future, prompting airline to carry out maintenance on time to reduce delay or fatal accidents in future. Prescriptive Analytics signify what should happen. It makes use of data to suggest the best course of action that should be undertaken to augment the chances of realizing the best possible outcome. It is a forward looking future state which provides insights about the future of the business. It helps in predicting what is likely to happen and why is it likely to happen. It is many a times referred as the “final frontier of analytical capabilities”. Usage of prescriptive analytics can help an organization in not only predicting a future opportunity to maximize growth and profit, but also in predicting risks so as to mitigate the negative effects. Prescriptive analytics is the next step on the way to insight-based actions. It cultivates value through synergy with predictive analytics, which helps in analyzing data to predict a future outcome. Prescriptive analytics then takes that insight to the next level by suggesting the optimal way to handle that future situation. Organizations which are able to act fast in dynamic conditions and make superior decisions in uncertain environments gain a strong competitive advantage.

• Some of the advantages of using prescriptive analytics are as follows:

• Organizations can automate complex decision making processes and trade-offs to better manage the limited resources at their disposal.

• Organizations can take advantage of a future opportunity or mitigate a future risk.

• Organizations can proactively update recommendations based on changing events.

• Organizations can meet operational goals, increase customer loyalty, prevent threats

and fraud, and optimize business processes.

For example, in the energy industry prescriptive analytics software can help in locating, pinpointing and producing hydrocarbons by taking in seismic data, well log data, production data, and other related data sets to prescribe specific recipes for how to drill, where to drill, how to complete and produce wells, etc. in order to optimize recovery, minimize cost, and reduce environmental footprint. While science in the 20th century was revolutionized by the adoption of principles like statistical perspective, it seems likely that science in the 21st century will revolutionize due to advances in statistics, innovation in big data technology and growth in computational power of machines. A vast amount of self-learning in science will dawn upon us with advances in these areas as data collection and machine learning algorithms push the scale upwards on artificial intelligence. This evolution of analytics is destined to scale the speed at which we discover ourselves and our surrounding, leading to a future that has tremendous potential for humanity. Prescriptive analytics is touted as the future of Big Data, but it still has a long path to cover before it will be common language. Though the potential is enormous, but it also imperative to provide it with large volumes of data so that it is able to make correct decisions. Only a handful of organizations and industries have the capability to generate that amount of data, statistics and data sets to make something useful out of it with prescriptive analytics. However, in 5-10 years it would be safe to assume that it will be as normal as Business

Intelligence today. References: http://www.charterglobal.com/big-data-analytics-descriptive-predictive-and-prescriptive/ http://www.mckinsey.com/business-functions/operations/our-insights/how-big-data-can-improve-manufacturing http://www.forbes.com/sites/louiscolumbus/2015/12/08/10-advanced-technologies-shaping-the-future-of-manufacturing-predictive-analytics-leads-the-way/#28858ebf2857

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Vendor Managed Inventory in Supply Chain

Krishna Kumar

Indian Institute of Foreign Trade

A supply chain is a system consisting of suppliers, manufacturing facilities, distribution centres, stores and consumers who are linked through downstream flow of materials and the upstream flow of information. In a traditional supply chain, each entity is responsible for its own inventory control. A traditional supply chain must be in a position to order the exact stock quantity to satisfy its customers’ demands. Traditionally, many of the retail industries determine the level of demand on the basis of forecast. The forecast could be based on sales data corresponding to the past 52 weeks. More time is spent to find the demand estimates through Demand Chain Management (DCM). And most likely the estimates as a result of such forecasts are always not correct. A Vendor Managed Inventory could be the answer for an effective inventory management.

Vendor Managed Inventory (VMI), as the name implies is an inventory which is replenished by the vendor or supplier. It is a replenishment model where the buyer is relieved from the responsibility of managing the inventory space. The supplier could be the manufacturer or distributor of a product or a range of products.

The VMI model was used in the 1980s by Walmart and Procter & Gamble and it was further prevalent in the “Mom & Pop” grocery stores and departmental stores across U.S before being popularized by the European retail industry. The model had a partial adoption in the American and European pharma stores. In the VMI model, the vendor monitors the inventory levels of the buyer (here buyer corresponds to a store from where the consumer buys the product). This could be done either by physical counting or by Electronic Data Interchange (EDI). With the information about the in hand quantity of the product and the product sales velocity (sku velocity), the vendor replenishes the inventory on a requirement basis. The supplier/vendor is entitled to take the decision on replenishment. Here the vendor and the buyer (store) get into an agreement which enables them to oblige mutually on a minimum on hand stock of the particular product along with periodic resupply frequencies. The supplier initiates the product transfer along with the Advanced Shipment Notice (ASN). The buyer (store) even relinquishes transfer financial responsibility for the inventory to the supplier the supply logistics could be handled by a third party. Though, VMI model is an expensive venture requiring investments in technology, software and staff training, the corresponding payoff would be the consumer being benefited from the in-store associates who assist them in choosing competitive products that they require. Why VMI? VMI could counter the demand volatility which deteriorates the customer service. In the present forecast models, the ordering patterns added with

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the demand uncertainty could lead to product shortages which could in turn lead to losing customers in stores. Also, using VMI, it is a win-win strategy for both the buyer and the supplier without any conflicting processes. The frequency of the replenishment could be decided by the vendor and the demand for the products would be at a smoother rate for the supplier. This could in turn lead to better cost effective utilization of inventory space, logistics and operating efficiency. In retail supply chain, there is no coordination of purchase orders from various buyers. Orders are often made on a daily forecast basis which makes the fulfilment difficult at times if the lead time is high. At present this scenario is being handled by aggregating the Purchase Orders (POs) through a Distribution Centre (DC) and re-routing the product to the stores where the product has a demand. With VMI, greater coordination could be ensured to replenish products based on the need. To add to this, VMI also helps in reducing the transportation costs by utilizing appropriate levels of trucks. What does a VMI require? VMI relies heavily on technology, product identification and tracking systems, communication systems. These systems are already available with both the retailer and the supplier. Many third party systems are available to facilitate the systems and to make strategic decisions.

Electronic data interchange (EDI) between the vendor and the buyer (store) could be used to transfer information about the on hand quantities of various products and ASNs. EDI could also be used to exchange information regarding retailer warehouse withdrawals, supplier replenishment plans. ASN serves as a signal of the supplier's decision to replenish the retailer with a specific quantity at a specific time. While decision support systems, product identification technology, and EDI are often associated with VMI, they are not absolutely necessary, especially when the number of stock-keeping units (SKUs) is low. A retailer could send the supplier a batch of valid purchase order numbers, so the VMI associate at the supplier's office can make replenishment decisions for the retailer. These purchase orders would be entered in the supplier's order management system, and the system would respond as if the order has been sent. There would not be any decision support system that is needed. Each week the VMI manager can use the difference between the on-hand inventories in the DCs, along with the target stock level, to make replenishment quantity decisions. With all the benefits being pointed out, the implementation of a VMI model however, solely depends on the relationship between the supplier and the buyer. Effective participation from both the parties involved is a necessity for promulgating a VMI. References 1. Vendor-managed inventory in the retail supply chain Waller, Matt; Johnson, M Eric ; Davis, Tom. Journal of Business Logistics 20.1 (1999): 183-203. 2. A supply chain model of vendor managed inventory Yan Dong a, Kefeng Xu b, Transportation Research Part E 38 (2002) 75–95 3. The effect of vendor managed inventory (VMI) dynamics on the Bullwhip Effect in supply chains S.M. Disney, D.R. Towill, Int. J. Production Economics 85 (2003) 199–21

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Automation in the Factory Shop floor

Siva Soundar

Indian Institute of Foreign Trade

“Will Machines work for us or replace us?” This is the proverbial question that is being asked everywhere. It is ironical to think that an entity that needs humans to think and act for it will eventually replace humans themselves. Early Automation

Automation has existed since the Industrial Revolution. The organizations started experimenting with automation as it reduced costs. The earliest automation tried in the factory shop floor was ground level automation system. Basic shop floor automation was popular since it minimized delay due to stock outs and eliminated gaps in the workflow. The automation tools also identified operation issues and errors. On many occasions, the tools identified the reasons for ordinary performance and rectified the errors. The early automation did come with its flaws and involved huge costs, yet it was preferred since better tracking of components was possible due to automation. These automation techniques led owners and share-holders to evaluate the cost of labor. This

led to Jobless recovery, a phenomenon in which organizations willingly accept attrition rates and replace the personnel with machines. The Graph below shows the ratio of civilian employment to the population in the United States of America. Over the past 2 decades – in the USA – more than 2.2 million jobs have been lost in the manufacturing sector alone. New jobs are being created in the economy, yet existing ones are being taken over by automation and digitization. The average amount of annual work-time has declined in the USA from 2000 hours in 1960 to 1690 hours in 2015.This is due to automation. Some organizations have thus used man-days and not efficiency to compensate for their blue-collar employees. With fewer hours at work, these employees are bound to be paid less. There is a growing belief that one need not replace humans with technology but instead make workers more productive with technology. This is in contrast to the aim of the stake-holders as profit maximization is their motive. Hence this belief doesn’t hold water among many entrepreneurs and businessmen. They prefer to have more machines at their disposal than personnel. The ratio of civilian employment to the population

(Source: The U.S Bureau of Statistics)

(A factory in China which has completely automated its shop floor) (Source: Deloitte’s review on impact of automation in China)

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Current Automation A factory in China that manufactures parts for cell-phones has set-up a factory that is operated completely by Robots. The efficiency in the factory has increased three times, productivity has doubled and defects have reduced by three times. This is a consequence of the advances in the technology of current automation. The next step in Robotics is to create a technology in which the Robot is able to think and decide without human intervention. However, Robotics is not the only phenomenon in current automation. The other phenomenon that can change the operating procedures in the factory shop floor is the ‘Internet of Things.’ The core of the internet of things lies in the fact that humans are not required in the shop-floor, in-fact, humans are not required to monitor the systems and computers on the shop-floor. The premise is that if computers knew everything that there was to know about things, then they would be able to reduce cost and increase efficiency. Under Internet of Things, an office equipment would be able to re-order itself when it knew that it was running short on supplies. Contrary to popular belief, Internet of Things doesn’t affect the blue-collar workers alone. What if the automation of the factory shop floor is taken to the next step in the hierarchy – what if an excel sheet is able to edit data on its own without the help of an accountant? Where would that lead us? The possible scenarios are unimaginable. At the same time, these technologies may bring in new jobs like ‘AI developer’ but it won’t create new jobs or new roles for the workers in the blue-collar sector. In such a scenario, the workers have to come up with innovations to show that they are still indispensable to the organization. Time to evolve and acknowledge the change is still there in many countries; for instance, in India very few organizations are able to implement Artificial intelligence or able to digitize the shop-floor according to their requirements. The

primary reason for this is that there is a lack of resource, inhibition to try something new, insufficient knowledge of the technical know-how.

As the clock ticks, it is imperative that the workers prove that they are still a force to reckon with. The question is -Do the workers in developing and third-world countries know that as they complete their work every day, the present innovations are rapidly catching up on their livelihood? Future Innovation The future innovations include Artificial Intelligence. The biggest challenges are the unemployment scenario and the changes in organizational behavior that the executives have to identify and put in place. The idea is to embrace digitization and at the same time plan in advance about the disruptive nature that it can bring towards an organization. An analysis of potential automation activities within factories can help to guide, identify, and prioritize the potential processes and activities that could be transformed. All this must be done by keeping each and every stake-holder informed about the process. The possible future innovations in the factory shop floor are printers producing prototypes, simulation using virtual reality and advanced artificial intelligence. These innovations lead to a type of manufacturing which is customer focused.

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Factories which incorporate automated technologies envisage a situation where humans and robots can work side by side. The ‘Factory of the future’ initiative embarks on a factory that imbibes all the above mentioned technologies. Organizations like Airbus in France and Mahindra &Mahindra in India have already stepped out to embrace the ‘Factory of the future’ initiative. The biggest concern in a setup like the Factory of the Future or for that matter any of the other future innovations mentioned is culpability - Who will take the responsibility if a major mishap occurs? The blame cannot be apportioned to machines or technologies. This is the single biggest challenge in a system that proposes to be completely devoid of humans. Conclusion Machines are doing monotonous jobs and yet have replaced humans in millions. Going forward, machines will be able to perform tasks and jobs that require creativity and specialized thinking.

In such a context, there is a possibility that almost every single job in the factory could be replaced by machines. As mentioned above, factories, like the ones in China, have gone for a completely automated type factory without the presence of humans. This may improve many of the metrics in the manufacturing sector but the intangible implications are yet to be ascertained. Automation is a necessity and will soon become an inevitable need. However great technical, logistical and operational care must be taken when the transition gets completed otherwise the repercussions will be irreversible. References 1) William N spencer ‘The declining need for Human resource professionals in our jobless recovery’ 2) U.S Bureau of Statistics’ 3) Tech Republic 4) Indian QSR Industry – Opportunities and Strategies to Harness Them. 5) Deloitte report on Industries in Great Britain. 6)http://www.cisco.com/c/dam/en/us/solutions/collateral/industry-solutions/idc-manufacturing.pdf 7)http://www.effra.eu/attachments/article/129/Factories%20of%20the%20Future%202020%20Roadmap.pdf

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Augmented Reality: Revolutionizing Supply Chain Management

Akash S. Vispute

IIM Trichy

First thing that pops up in our mind the moment we hear Augmented Reality (AR) is the Iron man suit or AR games like Pokémon Go. While we, the end users are thrilled by the application of AR in gaming and sci-fi movies, techies and manufacturers around the world are trying to integrate AR capabilities into existing computing machines. Unfortunately till now, most of us have seen AR in end user applications only. We all have heard the arguments regarding the robotic revolution and its shortcomings. Robots can compute but can’t think, can store information but can’t take decisions. AR feels like the first step towards integrating the best of humans and robots. What AR is providing is the computing power and the quantum of information integrated into our reality. We don’t need to look at any screen or type what we are looking for. It’s right there in the real world, we just need to fix our eyeballs at the right thing and AR will show us everything there is to know about it and also what to do next. As per Goldman Sachs equity research report of January 2016, virtual reality (VR) and augmented reality (AR) have the potential to become next big computing platform. According to the forecast, the VR/AR revenue in 2025 can be anywhere between $23bn to $182bn, latter being the optimistic value. In last 2 years alone, 225 VR/AR industries received total capital investment of $3.5bn.

According to the report published by marketsandmarkets.com in November 2015, The global AR market alone was valued at $1.72 billion in 2014 and is expected to reach $56.8bn by 2020, at a CAGR of 79.61% between 2015 and 2020. These forecasts show immense potential and promising growth rate in the AR industry. Defence, healthcare, entertainment and manufacturing are some of the prominent sectors where AR will spread its wings first. What we can hope for What possible use can AR have in Supply chain management? Let’s consider an example of laundry. Whenever I go to collect my clean ironed shirt from the laundry, I always fear that the laundry guy won’t be able to find my shirt in the pile of other shirts. He has to check my receipt, dates, check his database if the shirt is done and if done, where it is kept now. After this information gathering, he starts looking for the shirt in the location suggested by the database. Still, there is no guarantee that he will get the right one in the first attempt. Let’s consider a scenario where the laundry guy uses AR for his supply chain management. The moment I show him my receipt, his AR glasses read the barcode, process the information in milliseconds, and in an instant, navigates the laundry guy to the correct location. While he is walking and approaching the desired area, AR would have already highlighted the product that he is looking for. So all the analysis, computation and processing was done by AR while the laundry guy had to just look at the correct location suggested by AR. It sounds unrealistic now but looking at the way AR is penetrating through industries, I think laundry would soon be one of those sci-fi places. VR/AR unit forecasts showing base case, accelerated and delayed

uptake. Source: Goldman Sachs Global Investment Research, IDC.

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Mom picking up grocery items for household is also a part of the supply chain of our house. While deciding which juice carton to pick up, she would consider various attributes like the ingredients, cost, brand etc. Now to do this research in a supermarket, she would probably end up picking up all the available brands of about the juice just by looking at the box. The sorted, visually pleasing information would help her make a quick decision and she would be back home in time to watch the next episode of her favourite TV show. Current scenario Currently, wide ranges of mobile apps that already use AR to identify the products and provide more information about the products (e.g. Alive Onescan). The apps also provide reviews and an option to buy the product online. The only hassle for now is that you will need a mobile camera to scan the product. AR glasses would be much more practical and convenient. The major brands in the market with a ready product are Facebook Oculus-rift, Google GLASS and Microsoft HOLOLENS. There are more than 200 manufacturers who are providing various AR products like games, applications, glasses etc. Challenges Now the problem is that these products are standard build. What the industry needs is a specialized product, modified to suit the industrial applications that are sustainable in such environments. Playing games in house and performing industry specific tasks are two very

different things, demanding different levels of sophistication and design considerations. Also, the software currently available on these products are very standard ones like Skype. Any industry that is willing to use AR in its operations needs to spend a lot of money to develop a reliable software and durable hardware to support it. Though companies like DHL already had a breakthrough, it will certainly take some time for most of the industries to integrate AR into the critical operations. There are some other barriers which we need to cross before AR can become the soul of supply chain. The device needs battery power and continuous internet connection. If we try to increase the battery size, the wearable glasses would get too heavy for prolonged usage. Also, like any juice and compare them before making up her mind. What if she gets these new cool AR glasses which would tell her all the information she would need other automation technology, AR would need database support to function efficiently. Since the whole system would be dependent on AR, we need to upgrade the infrastructure. People take time to accept the technology change in any organisation. We need to train ourselves, forget old and hard learned habits and what not. Supply chain handles everything that is supplied to everyone. But AR is the way forward for the supply chain and to move forward, manufacturers will have to design suitable hardware, software developers will have to develop industry specific applications, organisations will have to find ways to integrate AR in their supply chain and employees will have to adapt to the technology shift that AR will bring. In this supply chain revolution, everyone is a stakeholder and everyone will have to contribute. Reference and citation http://www.marketsandmarkets.com/Market-Reports/augmented-reality-market-82758548.html

Microsoft HOLOLENS (Top) and Google GLASS

(bottom) Source: Google Images

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Reviving the network: Logistics in India

Mohit Dolas

eIndian Institute of Foreign Trade

In any country, logistics is akin to the human nervous system. Like the blood flowing through the veins carries all the essential elements to different part of the body, logistics help in delivering the same output for the economy. This is especially true for a manufacturing economy like India. And with growing consumerism in India, logistics just might decide the growth pattern of our country. Overview of Logistics scenario in India: The market size of the logistics sector in INDIA is estimated to be between USD 90-125 billion. Logistics industry is projected to grow at a compounded annual growth rate of 15-20 per cent between 2015-16 and 2019-20. Road accounts for most of the freight corridor and railway comes after that. Figure 1: Total Freight Transport Modal Mix in India. Source: IMaCS Analysis In the recent World Bank report on trade logistics ‘Connecting to Compete’, India jumped up 24 places to 31st in the list. This jump has come mostly because of improvement in customs and tracking & tracing facilities. Although this is a significant improvement, there is still plenty of room for improvement Logistics Issues in India To better understand the issues troubling this sector, we can segregate it into 3 parts: Modal Transportation: Indian logistics is heavily dependent on roadways, with a 60% share. National Highways, which contribute to around 40% of this mode, are only 2% of the

total roadways. Poor quality of roads, multiple check points and a fragmented trucking industry have all augmented the troubles. Railways, usually the cheapest mode, is high on freight in India. This high amount to subsidize passenger fair. Railways is also plagued by uncertain transit times, poor infrastructure. Dedicated freight corridors are few in India. Recently, JNPT had claimed significant improvements in its working. Still the port sector faces the issues of high turnaround times, inadequate depths at the ports. Inland shipping and costal shipping not taking off in India due to various uncertainties has also hampered this mode.

Figure 2: US freight modal mix. Source : US Department of Transportation Storage Infrastructure: Poor land availability for developing ICD/CFs has made EXIM more painful. Poor warehousing and cold storage facilities have resulted in tons of grains being destroyed every year due to natural phenomenon. This not only results in wastage of goods but also logistics cost that was spent bringing the goods to the warehouse location.

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Taxes and Technology: A complicated state and center tax system results in considerable time loss in transit and fragmentation of warehousing space. GST still looks a pipe dream. Although technology is increasingly being used in logistics, mainly due to the advent of e-commerce, documentation and process are still paper based.

Figure 3: Elements of Logistics Costs in India Source: The Institute for Studies in Industrial Development (ISID) The way forward Logistics represent a direct price to the consumer, money and time. Hence improving the state of logistics will help in driving down the prices significantly and helping both the companies and the customers. Few suggestions for improvement are as below: Productivity improvements: Most of the forms and applications required for movement of goods domestically or internationally, can now be submitted online, but still many carriers are not aware of this, especially the MSME sector. This results in loss of efficiency and time wastage. Hence, increasing the awareness level of technological advances is of utmost importance. The Digital India campaign is an initiative which complements this and awareness campaigns may be subsumed Coordinated infrastructure planning: Logistics in India, still isn’t viewed holistically. Different policies are made for different modes, which do

not fit each other. Hence, there is a call for overall logistics development plan, encompassing all the aspects of logistics. This will also create a value chain, and help in improving the inland water ways which require much work to undertaken 100 per cent FDI in warehouses will also help in improving the logistics industry. Improvement of tax structure: GST would come as a relief to for not only freight companies but also for warehousing. It will reduce the number of warehouses required and companies will be able to create warehouses irrespective of state regulations. Also, GST will be implemented mostly through online processes, hence it will also improve the productivity. All this can spur the demand by lowering the prices. If GST is rolled out this year this can bring down the logistic costs by up to 20 per cent from the present levels. Improvement in freight railways: The indirect subsidy provided to passenger railways needs to be scrapped immediately. India has one of the highest freight train cost in the world, while it is the cheapest mode in developed nations. This has resulted in lopsided movement of goods. The current speed at which freight trains run is also very slow. This leads to increase in transit times. Dedicated freight corridors need to come up faster, specially connecting manufacturing hubs to the ports.

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Automation of Supply Chain through driverless vehicles and drone

Kallol Maity

Tanushree

NMIMS, Bangalore

Supply Chain Management involves the movement of raw materials, inventory and finished products from the origin to the consumer. A lot of human interventions were routine affairs till some time back. Now technology has changed the face of the old routines. It has helped the business to improve the existing operations in multiple areas. A lot of time and energy is spent in recognizing and resolving the bottlenecks and inefficiencies within the supply chain. Organizations are now looking forward to data analysis and interpretation to resolve these issues. Automated systems can help in improving the operations of fulfilment of orders and purchasing decisions. They also make it easier to track all the operations and to highlight all the areas of inefficiencies. Any firm’s transportation strategy should be in sync with its competitive strategy. This is certain because firms are always looking forward to reduce the costs involved in all the processes. Till some time back, human intervention was the core factor in transportation costs that was to be dealt by the firms. Human interventions also involved consideration of different ergonomic factors that would reduce the overall response time. The different kinds of costs involved in transportation can be sub- divided into the following costs – Fixed operating cost, Trip related cost, Quantity related cost and Overhead cost. If human interventions could be reduced to a bare minimum, the trip related costs can be drastically reduced as the price of labour and handling cots can be minimized. Application of automation in this area like introducing driverless vehicles can be a revolutionary move. This would have the following advantages over the existing processes:

• Waste due to ergonomics can be reduced.

• Factors like off-track delays, variability of delivery times can be reduced.

• Better tracking devices can be used like introducing RFID devices that are far more efficient than manual reporting.

• The vehicles could be better controlled through remote connections and would be less prone to fatigue and breakdown.

• The idle time could be drastically dropped as machines need less break time if compared with humans.

• The overall system would become more reliable, responsive and consistent.

• The demand uncertainty and supply chain uncertainty could be reduced.

• Human intervention can be reduced to control and monitoring of operations only.

There are a few disadvantages as well:

• The initial cost of set up is high.

• There is a risk of breaking and leaking.

• There are additional costs for maintenance and damages to the system.

• If the server fails, the automated vehicles would halt.

Apart from driverless vehicles, another invention that is considered to be the wave of the future is a drone. The most inefficient part of the supply chain is its last leg, for product oriented companies. Drone delivery could help the supply chain efficiency to hit its peak. Organizations like Amazon have already started using drones for deliveries. Drones have already made their presence felt in Urban Warehousing Development and Small Parcel Industry.

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Drones can add some additional benefits to the ones already mentioned above for driverless vehicles:

• Shifting materials on the shop floor and moving parts from one warehouse to another.

• Reconfiguring the points of transportation on the go.

• Aerial routes help to ignore the land contour issues such as constructions and road conditions.

• Delivery to the remote parts of the world is made possible where humans may face issues.

• They are better equipped to get connected to customers using different technological platforms like cloud computing etc.

• Drones can be made technologically advanced through programs using RFID, OCR and barcode readers to monitor the distributor’s inventory levels and customer’s warehouses’ inventory levels in real time, thus improving the efficiency in the supply chain.

• Forecasting could also be improved by capturing actual demand figures.

• The combination of data analysis software, wireless communication and cheap drones is making the things much easier and less expensive.

• 3D mapping is possible through GPS and cameras that help to update the routes in real time and create a visual map of the timelines of supply chain.

The difficulties that the evolution of drones may face are as follows:

• Development and testing costs are high.

• Use of aerial delivery systems may require significant amount of approvals.

• Proper scheduling and safety checks need to be implemented at all the times.

• Insurance costs are significantly high as drones can cause potential damage.

• With an increase in the high rise buildings, delivery in the urban areas needs a lot of precision and accurate algorithmic implementation.

• Weather conditions like high winds and rains can further cause delays.

With the level of automations introduced in the supply chain, do we mean that; Human interventions are no longer necessary now? How far should we continue to automate? Humans are responsible for planning, designing, building hardware and software and managing processes. Humans are terrific in fast decision making and pattern recognition. They are the ones who teach a system how to understand data, build complex algorithms to make decisions. Still you would want a human brain to monitor and supervise the proceedings. So, the contribution of humans to automation cannot be denied. What we are trying to target are the repetitions in work, the wrongs that can occur due to human memory limitations and the different ergonomic factors that may cause delay and mistakes. This would enable people to get more time to build better automation tools for more strategic projects. The trick is to create a right balance between the automation technologies and the right combination of people, process and machines. References

• http://spendmatters.com/2014/01/28/amazon-air-drone-technology-stands-alter-supply-chain-norms/

• https://www.dsiglobal.com/labs/drones-coud-take-supply-chain-performance-to-new-heights/

• http://www.nahb.ca/blog/drones-change-manage-supply-chains

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Operational Approaches in Managing Disruption and risks in

Supply Chain

Soham Biswas

SIBM, Pune

While businesses are expanding at a rapid pace in the global marketplace, the risks of supply shortage, inefficient inventory management, Social and political barrier or unavoidable environmental impacts are taking a toll on the sustainability of global business networks. A well strategized supply chain is the key to any sustainable business model. Starting from raw material procurement to the distribution of finished goods, a well-managed agile supply chain, which will act efficiently or responsively to the unforeseen business challenges and constraint, is the key to success. Before going into the operational approaches for managing disruptions and risks in businesses, it is important to identify the universe of risks and their drivers on the first place. While businesses are expanding at a rapid pace in the global marketplace, the risks of supply shortage, inefficient inventory management, and social and political barrier or unavoidable environmental impacts are taking a toll on the sustainability of global business networks. A well strategized supply chain is the key to any sustainable business model. Starting from raw material procurement to the distribution of finished goods, a well-managed agile supply chain, which will act efficiently or responsively to the unforeseen business challenges and constraint, is the key to success. Before going into the operational approaches for managing disruptions and risks in businesses, it is important to identify the universe of risks and their drivers on the first place. Experts from all over the world have come up with different definitions of resilience of a firm’s supply chain. Professor Yossi Sheffi of MIT, an

expert in system optimization, risk analysis and supply chain management, has defined resilience as “The ability of a company to bounce back from a large disruption- this includes the speed with which it returns to the normal performance”.

Stress Strain Curve [Reference 4]

The dictionary based definition of “resilience” suggests an intrinsic characteristic of material science. It is defined as “the ability of a system to return to its original state or move to a new, more desirable state after being disturbed”. Fig shows the stress and strain curve that depicts maximum energy that can be absorbed by a material without creating a permanent distortion. Also, more the yield strength more will be the energy absorbing capacity. If this physical phenomenon is equated with the supply chain resilience, it can be inferred that the aim of a company is to maximize the yield strength of a supply chain network i.e. increased ability to handle the catastrophic risks and retain the supply chain functionality. Operational approach While creating a resilient supply chain, managers face various business challenges, mitigation of which requires well thought out plans and crucial strategy building capability. Trade-offs between aspects of cost and operational efficiency becomes an inevitable phenomenon. Redundancy created by extra inventory or by maintaining low capacity utilization gives

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breathing space to a company during disruptions in supply chain. But it cannot be a sustainable solution as it will lead to slow operations, reduced quality and increased holding cost. Redundancy actually reduces the efficiency of a company. Thus a cost effective and operationally efficient strategy is the key to a successful resilience implementation in a supply chain process. Process standardization Scenario: Production process for a manufacturing company may vary from plants located in different geographical areas. If a plant is forced to stop operations due to some natural calamity it will be difficult for any other plan to take over the production activity as the process layouts are different. A standardized process will help a plant in a different geographical location to take over the production process of another plant facing a supply chain disruption. Also use of concurrent instead of sequential process flow will help in faster disaster recovery. A standardization of process will increase resilience but there may be a risk of losing out on innovation. Product Standardization Postponement strategy: The products and processes should be designed for maximum postponement of majority of the operations and design in a supply chain. When the products are kept in semi-finished conditions, the flexibility and responsiveness of a company increases as they can react faster to the changing requirements of the customers. Assembling components in postponement mode will improve the fill rate and increase customer satisfaction. Postponement strategy is useful when company has the risk of error in demand forecasting. In textile industry this type of resilience strategy is very common. Italian clothing manufacturer and retailer, Benetton make generic undyed items which are finished later when they are equipped with more accurate forecast data. Supplier Relationship It has been observed that mainly two approaches are followed by the companies in context to supplier relationship.

Companies keep small group of key suppliers. In this case it is essential to keep a very deep relationship with the suppliers. Company should align the suppliers with the demand information and production strategy so that the suppliers can also build their resilience in supply chain. Company should take a step further to get involved with its supplier’s supplier business information so that everyone in the supply chain can be on the same page and the company can make feasible production plan on the basis of the supplier’s data.

Companies sometimes keep huge number of suppliers with moderate relationship Here companies maintain redundant supplier for a single procurement. So if a particular supplier fails to deliver, it can be taken up by backup suppliers with immediate effect. Here the company should look for consistency in quality of the product delivered. In this process the company distributes the risk of supplier failure over the supply chain reducing the risk on a single entity. The December 2015 flood in Chennai has been a major supply chain disruption for many organizations. Automobile manufacturers like Renault-Nissan, Hyundai, Ford, Daimler India, Ashok Leyland and Royal Enfield have been greatly affected due to the complete failure of communication infrastructure. Inbound logistics could not be operated which has greatly impacted the revenue of the company. Off them Hyundai’s risks are partly mitigated as majority of their

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suppliers were in close proximity which has given them a strategic advantage over competitors. To manage operational and global risks in a supply chain, there is no standard strategy available. Instead managers need to choose from the best possible trade-offs that supply chain can offer. Mitigation of risks is achieved by a variety of processes which is listed with its degree of effectiveness on the risk factors. From the above discussion it is evident that risk handling in a supply chain is critical to global business. In today’s world of global competitiveness, it is “fire-fighting” approach of risk management is insufficient. Organizations reacting to supply chain disruptions and handling them will not help in sustainability. It is very important for a firm to be proactive in identifying the future risks that can hamper the business process and apply a curative measure for it. It is also important to reinvent the organizational culture of perceiving risk management as a strategic move. Continuous communication among informed employees, empowerment of the bottom line, passion for work and conditioning to disruptions are some of the effective cultural initiatives that organizations should consider for risk

management efforts and smooth supply chain maintenance. References

1. Christopher, M. and Jim, D. (2013, December 10). Managing the risk of disruption in your supply chain from http://www.sdcexec.com/article/11271678/supply-chain-risk-management-is-a-strategic-imperative-due-to-new-and-complex-challenges-in-todays-global-marketplace

2. Christopher, M and Peck, H. (2004). Building the resilient supply chain. International Journal of Logistics Management. Volume 15, Number 2. Ppl - 13.

3. Industry Research. (2010). Case Study: Cisco addresses supply chain risk management. Gartner. ID Number G00206060.

4. Jalal. (2015, August 5). Water aerobics. Retrieved from http://www.engineeringintro.com/mechanics-of-structures/stress-strain-curve-explanation/

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ALUMNI SPEAK

Mr. Hemanth DP(IAP)

Chief Operating Officer at

GMR Airport Sector

1. Sir you have been responsible for startup projects in India for different MNCs. What

were the challenges that you faced in these endeavours, especially from a supply

chain management perspective?

I have been involved with various startups in India as well as Middle East with FedEx being a major one among them. When FedEx started in India, it was one of the largest integrator in the world at that time with over 500 aircrafts. Today it operates in over 220 countries with a fleet of nearly 650 aircrafts. In cargo transportation there are myriad complexities such as: Just in time transportation, documentation, certifications, regulatory approvals, etc. In fact they say that getting a supply chain model right is not a rocket science but close to it. Since it involves a synchronized ballet of resources, regulatory processes, complex machinery across multiple time zones with people of different cultures, languages, etc. getting it right consistently which is difficult to execute. The company had experience of setting up business across the world however India has its own peculiarities and challenges when comes to building such a complex business unit from scratch. For e.g. worldwide cargo dwell time is a few hours in most countries whereas in India it is 5-7 working days, translating to high inventory carrying costs and loss in opportunity cost. The logistics cost to GDP ratio in India is approx. 12 which makes it twice as expensive as Europe. It forces an Indian consumer to pay twice as much as his European counterpart and renders Indian businesses to be less competitive than their foreign counterparts. An example being: For every 10 tomatoes picked up from a farmer 6 get destroyed in the country due to poor handling and absence of warehousing facilities. As a world class brand entering the country, FedEx wanted to set up best service standards and ensure timely delivery so 48 hours-72 hours door to door delivery commitment was made. We put all our resources together and worked with various agencies: government and private to deliver this service despite the constraints; followed laid down processes and regulations in letter and spirit whilst ensuring commitments were met. Even some consumers and trade representatives had to be educated about the importance of following a systematic process and eventually we succeeded in getting the right message across and established the company. It was a great learning curve for all of us involved in the project.

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2. Sir, can you give some advice to students who are interested in joining the aviation sector?

Aviation has gone through challenging times over the last two decades in India and the world. It

has untapped potential with only a fraction of the population of the country travelling by air

regularly due to under penetration. An example in this regard is the strength of the commercial

fleet in India which has about 500 airplanes and 7-8 major airlines operating in the country. Now

compare that number with China which has about 2000 airplanes and US which has over 6000

airplanes as a part of their commercial fleet. India being the 7th largest country in the world and

with a well spread economic distribution should have been able to capture a bigger market. With

road and rail transport services being inefficient, smaller businesses are not able to expand outside

their regional borders and utilize their full potential.

There are some operational challenges in aviation. The Aviation Turbine Fuel tax is high, which

makes flying costly as compared to other countries. The sector is highly regulated which poses

challenges in operational ease and expansion. However, the new NCAP is a major step towards

industry deregulation and poised towards tapping the full potential of the country.

Management of cash flow and business acumen are required for success in the industry. Case in

point is Kingfisher- which despite being an aspirational brand and a price and market leader till a

few years back closed down. The company was suffering poor cash flow and management

problems leading to a premier brand closing operations rendering thousands jobless and bringing

a bad name to Indian aviation. On the other hand, airlines such as Indigo, Jet airways and Spice

Jet have shown great efficiency in business practices and prudent cash flow management making

them successful.

Fresh talent bank will help the industry which can be a win-win for career seekers and the

employers. Aviation is beyond the glamorous lifestyle it is often associated with requiring

technical know-how and business acumen. Unfortunately, there are not many Aviation

management and Supply chain training schools in India that could help train the young talent.

This is an area of improvement as well an opportunity to tap.

3. Sir, can you tell us where the supply chain industry is heading and which technologies

are going to be the torch bearers of this industry?

Supply chain has only one way to go that is up. It is pertinent to note that Air Cargo carries about

a percent of World Trade by Volume but close to 30% by value. It accentuates the importance of

aviation supply chain in the development of an economy. As you might have read, passenger

airports in India have attained world class status however cargo still has a long way to go. There

are a lot of inefficiencies in the system. Inventory management software is nearly nonexistent

which helps in making supply chain more effective using FIFO, LIFO principles ensuring

products are utilized efficiently. Warehouses practices are archaic where modern practices such

as-moisture and pest control, security, inventory management, etc. need to be introduced. Food

supply chain is a major focus area that is highly inefficient resulting in loss of large quantity of

grains which is a high cost to pay in a country where millions still die of starvation.

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However, there are encouraging signs as government has taken significant steps such as setting up

an Air Cargo Logistics Promotion board which is chaired by The Secretary of Civil Aviation

Ministry and of which I am a member. Our aim is to smoothen out the regulatory process thus

improving efficiency, benchmarking, etc. with the sole aim of making India’s Aviation supply

chain world recognized. Advent of world class integrators such as: FedEx, UPS, DHL, etc. has

also helped a lot in improving overall standard. Even traditional Indian companies such as:

Safexpress, GATI, VRL Logistics, Blue Dart etc. have made huge strides towards automation and

time committed delivery services. However, looking at the size of the market, still a lot more

needs to be done

Make in India is a commendable initiative of the government but for it to succeed a robust and

efficient supply chain is critical. There is a huge business opportunity and potential. Doing it is

not only important for efficient businesses but also helps all strata of the society, making goods

cheaper including medicines, food and other commodities which will help in overall nation

building. Application of intelligent minds, technologies and focus by entrepreneurs can do the

country a big favor by reducing wastage and ensuring product availability on time.

4. From being International Airport Professional (IAP) to becoming the Chief Operating

Officer at GMR you have achieved a lot in life. Can you tell us about the career choices

that made this possible?

I grew up in a small village called Vittal near Mangalore, Karnataka where I studied in a Kannada

medium school till class 8th.My initial career was based on whatever job I could get to garner

experience. I did a multitude of jobs during college, ranging from security personnel to working in

the Front Office department in a 5 Star hotel. I finally joined Blue Dart as an Operations staff and

worked my way up to Assistant Manager-Operations.

Then I moved on to TNT, an Australian Transportation giant. I was fortunate to be promoted to

the position of Country Operations Head in Middle East handling Dubai, Abu Dhabi and

Bahrain hubs. Then I moved back to India and worked with FedEx and helped establish it in

Northern and Eastern India. There my role transitioned from Operations to Sales. Having

extensive Operations knowledge, I found it easier to handle Sales as I knew the product inside out

coupled with that I had good communication skills as well as a knack for relationship building

which are assured formula for success in sales.

FedEx has an excellent philosophy of PSP: People Service Profit. It succinctly states that if you

focus on people, motivate then and develop them they will provide great service leading to

excellent profits for the company. It has helped FedEx being rated as one of the best places to

work for worldwide for the past few decades consistently. My philosophy is that,” One’s legacy

shouldn’t be about the material things achieved but about the number of leaders one builds out of

people.” These leaders advance forward and build more leaders and that’s how the world moves

forward. I firmly believe that, 70% importance of my work is towards hiring the right people

because though the product and the brand could be good but ultimately it’s the people who make

it work.

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The balance time shall be spent by a leader in developing people, expanding the company’s

horizons and focusing on strategic development. I take great care in hiring the right people for my

team and then training them which gives me confidence to let them act on their own and this has

never let me down. Case in point-from the initial team of 12 people that we started with in India

in FedEx, majority of them now are leading businesses in the country as well abroad. I and my

team members’ hard work in the company paid off when we were selected for the company’s

highest accolade The President’s Club for Outstanding Sales performance and General

Management. I personally was fortunate to receive the pinnacle award of Hall of Fame that is the

highest individual performance reward bestowed by the company and won it for three years

consecutively.

After a decade in FedEx, I got an opportunity to work with Aviation Pioneer Captain Gopinath

as a part of the team that started Deccan airlines. I got the chance to build a business case, attract

investors, create a brand, plan the infrastructure and build a Logistics ERP from scratch. It was an

invaluable experience that helped me garner an entrepreneurial viewpoint.

Then GMR came calling which was a totally different experience in itself. I now handle a

multitude of diverse businesses which hitherto were alien to me such as: Aeronautical

Commercial business, Airline Marketing & Development, Free Trade Zone and Special Economic

Zone, Catering, Ground Handling and running a State of the art Flying Training School.

Though these are diverse businesses where I didn’t have experience I learnt that though domain

experience is important, entrepreneurial outlook, sound management philosophy and getting the

right team in place and training them is an imperative formula for success.

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Mr. Pushpanjali

Chief Operations Officer

H&S supply

Mr. Pushpanjali is the Chief Operations officer at H&S supply chain services wherein he handles

client acquisition and P & L responsibilities. He has designed the optimum supply chain model

for FMCG companies like Butterfly and Cholayil. He is an IIFT Alumnus from the class of

2007. After his international stint in OLAM international, he founded a company called Sanguine

Foods in which he designed the effective procurement and end to end supply chain model from

farm gate to Retail Chains. He specializes in Strategic Sourcing, Logistics and Operational Risk

management. He is known for being a creative thinker and strong co-ordinator.

1. You have handled supply chain in the FMCG sector and agro commodities and then e-

commerce sector. What differences and/or similarities have come to your notice while

handling such varied sectors

I have worked in E-commerce and FMCG in domestic scenarios while agri-commodity was

international operation. Each sector has its own set of challenges: In ecommerce ours was a

market place model with focus on low inventory while ensuring customer service. In FMCG

focus is on building an optimum supply chain model that ensures timely delivery while reducing

costs using Theory of Constraints (TOC). In international agri-trade focus is on risk mitigation

to preserve value e.g. currency risk, market risk, operations risk and system risk. The margins in

commodities are low but volumes are very high thus managing these risks become very

imperative. In FMCG distribution: demand forecasting is extremely important along with SKU

rationalization and optimum inventory. Thus FMCG has quite few similarities with e-commerce

but international agri-trade is another animal altogether.

2. You founded your own company back in 2010. How do you think entrepreneurship has

shaped your career post working as Founder, Sanguine Foods Private Limited?

Entrepreneurship experience is about risk taking, execution with limited resources, team building

and growing at breakneck speed. The experience is mighty useful in challenging roles ahead

especially in start-up environment. I have not shied away from taking any senior roles post my

entrepreneurship stint. My ability to get things done has been recognized as a major strength

besides my contribution in formulating strategy.

3. You had an international stint right after college in OLAM international. Could you

tell us about your experience and how did it shape you as a leader?

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Olam is an awesome company to learn international trade. They have a great culture and pay

special emphasis on risk mitigation. I had attended their core –process workshop taught by

Sunny Varghese (CEO, Olam) and it still remains my Bible for business understanding and

growth. Olam encourages entrepreneurship and gives big responsibilities. Olam stint has

imbibed in me risk managing abilities, cross cultural handling ability besides focus on strategy

and execution.

4. The e-commerce sector is currently experiencing a slowdown. What can be done to

arrest the slump from a supply chain perspective?

The focus in e-commerce has moved from increasing market share to showing profitability.

Thus supply chain model too has to be nimble enough to deliver goods while reducing costs.

This means improving last mile deliveries through partnerships, reducing inventory through

consolidation (specially in GST environment), renewed focus on marketplace model and using

technology to handle returns efficiently.

5. How do you see Analytics shaping the future of Supply Chain in India? What are the

few industries that you think would see this change first?

Analytics is already playing a big role for e-commerce sector and in last mile deliveries. E

commerce is using analytics to customize experience for shoppers; IOT (Internet of things) is

being used to track orders more effectively and to automate customer orders where orders are

recurring in nature; Demand Forecasting is another area where Big-Data analytics is being used

to predict future demand. Warehousing too is seeing lot of automation and Amazon is already

using Kiva robots to automate warehouse. Already major companies are only using GPS enabled

vehicles. High value items are shipped with chips to be able to track them effectively.

6. There are a lot of hyper-local logistics startups coming up in different cities in various

sectors. How do you see the industry landscape shaping up in the near future?

This is an exciting sector as more people have busy lifestyles and ordering food, groceries and

other items has become easy through apps. However, the margins are thin and consolidation is

imperative. Only those players will remain who focus on delivery, cost optimization and use geo-

analytics mapping for network efficiency and resource optimization.

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INDUSTRY INTERACTIONS

BASF India Ltd.

Dr. Raman Ramachandran, Chairman & Managing Director BASF India Ltd. & Head, BASF

South Asia visited IIFT campus on 4th March. BASF SE is the largest chemical producer in the

world and is headquartered in Ludwigshafen, Germany. The BASF Group

comprises subsidiaries and joint ventures in more than 80 countries and operates six integrated

production sites and 390 other production sites in Europe, Asia, Australia, Americas and Africa.

BASF has customers in over 200 countries and supplies products to a wide variety of industries

An Agriculture Engineer by profession, Mr. Raman described the different businesses

that BASF is into and shared some statistics about BASF and BASF India. He explained how

Chemicals have such a huge involvement in our lives and how BASF has been pioneering this

industry through cutting edge R & D and innovations.

“Sustainability” was a key part of his discussion and he emphasized how important it is for

organizations to work in harmony with environment while citing examples of how is developing

products for the same.

An impactful quote from his discussion was:- “Business is not only about products, it is also

about people.”

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AMPLUS INFRASTRUCTURE

Ms. Ritu Lal Director - Business Development at Amplus Infrastructure visited the Delhi

campus on 28th February and enlightened the batch about the solar sector. She focussed on the

nuances that the industry faces and what all factors affect its implementation. She also

highlighted on how Amplus is differentiated from other roof-top solar infrastructure companies

and explained in depth the OPEX model. The session gave a complete overview of this growing

sector and made us aware about the key fundamentals that every manager should know if one

wants to pursue a career in this field. Amplus Solar is one of India’s largest dedicated distributed

solar power companies, run by veterans of the power industry with significant experience of

developing, constructing and operating power plants. The company was incorporated in 2008

and is based in Gurgaon, India. Amplus is setting up a state of-the-art centralized monitoring

facility in the outskirts of Delhi and rapidly growing its marketing, project and field teams across

India.

Ms. Ritu talked about “The Case for Rooftop Solar” whereby she described the current Solar

energy scenario in India and the projected targets for coming years. She went onto differentiate

the Grid Scale and Rooftop modes of solar panel implementation explaining the merits and

demerits of each.

Ma'am also discussed the existing challenges in harnessing of solar energy and How

Amplus Solar is playing a critical role in bridging gaps between corporates and renewable energy

implementation by the corporates.

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MIEBACH CONSULTING

Indian Institute of Foreign Trade welcomed Mr. Nataraja Subramanian, Director at Miebach

Consulting on 18th February.

He talked about various factors currently affecting supply chain logistics and factors that might

come into the picture in the future, citing various examples like Zara, Amazon and other chains.

Miebach Group is a Logistics and Supply Chain Consulting. Miebach Consulting Group was

founded in 1973 in Frankfurt, Germany by Dr. Ing. Joachim Miebach to provide logistics and

supply chain consulting as well as material flow engineering services for large and medium-sized

companies on a global scale. Miebach - The Supply Chain Engineers deliver their services

worldwide across 20 offices from Indianapolis to Bangalore. With approx. 280 employees and a

yearly turnover of approx. 30 million Euros (2013) Miebach is one of the leading consultants for

logistics and supply chain design. Their network of offices worldwide in key regions of Europe,

North and South America and Asia provides effective international service to their clients.

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INTERNSHIP EXPERIENCE

Ishan Jain, Texas Instruments

My experience at Texas Instruments was amazing. I was an Operations intern

and my project was about Purchase order automation where I was supposed

to analyse data for TI India and come up with suggestions to increase

automation process. This was in particular a tough project as TI already had a

very level of PO automation and main challenge was to further push this

number. Working in TI was a myth buster for me as the work-life balance

was amazing. I used to feel energetic in the morning. Every Friday had a

theme and was known as Fun Friday. I was also assigned a buddy from

Worldwide Procurement and Logistics team who acted as a mentor and

supported and guided me in all my endeavours at TI.

S. Sivaramakrishnan, Tata Steel

I did my summer internship in Tata Steel Limited, Jamshedpur. Setting my

foot in Jamshedpur was one of the most cherished moments in my life, as

all the gigantic images of the historically significant TISCO that I’ve only

seen in textbooks until now, appeared right in front of me. The project

that I was allotted was a live project in supply chain department. It was a

well-structured project with clear deliverables. The objective of the project

was to bring down the costs of procurement. I visited Tata Steel Kolkata

office where I met the shipping and logistics team and got sound

understanding about shipping of bulk materials and collected necessary data. I was also the part

of the negotiation meetings and witnessed the tactics during the contracts finalisation. Finally I

developed a working model to optimize the supply chain model. This project helped me in

understanding the complex shipping and logistics supply chain with multiple key points and

enabled me to reduce the overall costs with the help of my guide and mentor.

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Vinoth R ,Golden Agri Resources

The whole experience of working at GAR was great. The organization

has a superb work culture, great minds and a very high quality of work. I

was allotted two projects: First, one was to find the reason behind the low

sales of their refined palm oil in the southern states of Kerala and Tamil

Nadu. So, I travelled across these states, met with several Oil traders and

refiners to find the level of palm oil used in coconut oil and how prices of

coconut oil affect the sale of palm oil in the south. My second project was

to find Vessel-wise actual cost incurred in JNPT & Kandla and

Turnaround time of importing vessel. The findings of this project will

help them plan their imports accordingly.

Manpreet, Amazon India

I did my Summer Internship at Amazon-India in the Operations domain. I was based out of Bengaluru and my project entailed formulation of a quality framework for the Compliance Operations team. During the course of the project, I got familiarized with different sub-teams and their respective work which included Trade Compliance (Required for Export), Dangerous Goods (Required for choosing mode of transport and storage), Product Compliance (Required for assessing Product safety) and Restricted Product Compliance. I recommended the changes in the method of sampling and also the parameters which

should be checked so as to ensure proper quality. I also formulated a checklist which would guide an auditor while auditing the work of employees and finally recommended the proposal for a centralized quality team for compliance operations. Overall it was truly an enriching experience with me being able to contribute tangibly towards the organization.

Parth Ravindra Agrawal ,Citibank

I had an amazing learning experience at Citi Bank Chennai. I worked under

Australian Operations, Citi Corp Services India Private limited. My project

involved both people and project management. Identifying redundant process

and to initiate re engineering and automation under Australian operations so

as to reduce the time taken for each process and thus improve the cost

savings for every process was my main agenda. The whole project was

classified under two divisions mainly Strategic and Operational initiatives.

While my focus was to drive the operational initiatives given they will have an

immediate effect I made sure that the strategic suggestions are also not left

back. It was a great learning experience for me.

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Nikhil Padmalayam, Jubilant FoodWorks

Jubilant FoodWorks is an organization which considers the efficiency of its

operations as one of its core competencies. Interning in their Supply Chain

department was a great experience. During my internship, I had the chance to

work with highly experienced industry veterans and talented colleagues. I

visited the production facility and got to know the procurement process. The

scale of their operations was huge and I witnessed & understood how they got

supplies to the right store at the right time. In terms of raw materials, they had

a rigorous supplier selection process in place, which made sure that each of

their products tasted the same across different locations. Even overseas, they

conducted their business with the same efficiency as they did in India.

Rahul Raghav, Tata Steel

I have worked in Oil & Gas domain for 13 months before joining IIFT.

However, it was a totally new challenge to work with the procurement team at

Praxair, which is an industrial gases company. The most important skill one

needs to succeed in this department is negotiation. I worked with several

teams such as specialty gases, distribution, expediting and customer service

etc. I worked in tandem with these teams to look for the improvement

opportunities in their current processes. I also developed a Sourcing Tool

which auto-generate the report for the forecasted and actual savings. It was

challenging but exciting at the same time, as there was so much to learn. On

top of that, my mentor was very encouraging and he supported me at every step.

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Praveen Kumar co-founder, Lemon Leaf

NEWS SNIPPETS

Agriculture supply chain startup Lemon Leaf raises

angel funding

Delhi-based RP2 Ventures Pvt. Ltd, which runs fresh fruit and

vegetable supply chain venture Lemon Leaf, has raised its first

round of external funding from two angel investors. Praveen

Kumar, the head of operations at the firm, said the funding has

been raised mainly to set up the company’s sole processing facility

at Dwarka in southwest Delhi. The facility has a capacity of

processing 50,000 kg of products a day. The startup was launched in

July last year by Kumar, Puneet Gulati, Rishubh Khurana and

Sankalp Chandhok.

Lemon Leaf identifies Bangalore-based Lawrencedale Agro-

processing India Pvt. Ltd, which is backed by venture capital firm

Aspada Investment, as its main competitor. These companies are

trying to solve the problem of poor agricultural supply chain in India, where a fragmented

market for farm produce and a lack of sufficient cold storage infrastructure leads to huge

wastage of fruits and vegetables as they rot much before reaching the consumer. Apart from

Lemon Leaf and Lawrencedale, a number of other companies in the segment have raised funds

in recent years. Mumbai-based startup White Shadow Technology Pvt. Ltd raised about Rs 2.5

crore in angel funding while Pune-based Siddhivinayak Agri Processing Pvt. Ltd closed its Series

B around led by impact venture capital firm Lok Capital in January.

Surface Transport: Make in India hinges on ‘move

in India’ For the government’s flagship ‘Make in India’ scheme to have a realistic chance of succeeding, a

concomitant plan for improving the surface transport efficiency norms and benchmarking it with

global standards could prove to be crucial.

For a ship entering an Indian port, for instance, the average turnaround time — defined as the

average time a vessel needs to stay in the port — was a little over two days for the fiscal ended

March 2016. In Hong Kong, the average turnaround time, which illustrates the capability of the

port to efficiently handle cargo flows at the terminals and measures the difference between time

of entrance and time of departure, was less than 10 hours.

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Truckers, who are the lifeline of transport sector in India, struggle to keep moving on the

country’s roads, especially when faced with the numerous checkpoints and roadblocks that dot

the state borders and national highways. The average waiting time of Indian trucks at check-

posts is 70 minutes, compared with 5 minutes globally. As a result, in comparison with a global

standard of 700-800 km per day, Indian truckers are only able to cover a distance of just 300 km

per day, according to latest estimates prepared by the Niti Aayog, with eastern states such as

Assam, West Bengal and Odisha having the worst record in terms of stop time at check points.

In the World Bank’s Logistics Performance Index which measures international supply chain efficiency, India is placed 35th in 2016. Average truck speeds in the US can exceed 90 km per hour on highways while in India, a long-distance average of about 13 km per hour is considered reasonably good. In the latest biennial Logistics Performance Index India’s ranking has jumped to 35 in 2016. The Index analyses countries across six components: efficiency of customs and border management clearance, quality of trade and transport infrastructure, ease of arranging competitively priced shipments, competence and quality of logistics services, ability to track and trace consignments, and the frequency with which shipments reach consignees within scheduled or expected delivery times.

IIT Delhi Professor Awarded by Loughborough University

in London

Prof Ravi Shankar from Indian Institute of Technology, Delhi was awarded on the occasion of

3rd International Conference on Green Supply Chain Management, which was organized at the

London campus of Loughborough University. Green Supply Chain Management, 2016 is a

premier conference, which brings together scientists, practitioners, policy-makers, NGOs and

researchers to exchange ideas, provide insights, concepts, methods, tools, policies and case

studies. The Award was given by Prof. Sir Mike Gregory, who was the Co-Founder and Head of

the Institute of Manufacturing and Management Division at Cambridge University, UK.

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An elated Prof Shankar said, “Being recognized by yet another institution of repute further

strengthens our belief in our work. I am thankful to the Loughborough University for

considering my work in the field to be the best in India.”

A panel consisting of senior academicians from UK, USA, Australia, Germany, France, and

Brazil, recommended this award based on Prof. Shankar’s contribution to leading international

journals regarding Operations and Supply Chain Management. The panel recommended Prof.

Shankar for this esteemed award after finding him the best researcher in this field in India.

Maruti Suzuki planning to transport vehicles via

inland waterways

Maruti Suzuki India is planning to transport vehicles through inland waterways and has inked a pact with the government for this, a move that will help the country's' largest carmaker reduce its logistic costs. "A Memorandum of Understanding (MoU) has been signed between Inland Waterways Authority of India (IWAI) and Maruti Suzuki India for transportation of cars through inland vessels," Minister of State for Shipping P Radhakrishnan said in a written reply to the Rajya Sabha. IWAI has deployed one vessel at Varanasi for this purpose and has planned the transportation of cars from Varanasi to Kolkata on National Waterway-1 on the river Ganga, he added. Water transportation cost is barely 50 paisa per km in comparison to Rs 1 by railways and Rs 1.5 per km through roads. More than 40 per cent transportation is done through the inland waterways in China, Korea and European nations, while in India a meagre 3.5 per cent was done through this channel, which has now gone up to 6 per cent. Parliament in the last session gave its nod to a bill to convert 111 rivers across the country into National Waterways, a move that would boost movement of goods and passengers via rivers and expectedly reduce transportation costs. The National Waterways Bill provides for enacting a central legislation to declare 106 additional inland waterways as national waterways in addition to five existing national waterways.

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MIND-BENDER

Across

3. Logistics is most closely related to which element of marketing mix

5. A few factors account for a high percentage of occurrence of some events

8. Which is known as Nobel prize in manufacturing

9. A downside of batch order pricing is ________ travel time

Down

1. Method to issue material for manufacturing

2. What product was developed in Germany during World War II due to shortage of supplies

necessary to produce Coca Cola

4. Something that limits capacity

6. Which was the first Company to use bar code for faster order processing

7. Sequencing rule used for scheduling jobs on two machines

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Mind-Bender Solutions

Across

3. Place

5. Pareto

8. Shingo prize

9. increased

Down

1. Bachflush

2. Fanta

4. bottleneck

6. Wrigley

7. Johnson

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