CONFERENCE REPORT

April 14 &15 TATA THEATRE NCPA MUMBAI

MAKE IN INDIA – UNLEASHING NEW OPPORTUNITIES

Conference Report

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Index

A SUMMARY REPORT OF INDIA SUPPLY CHAIN 2015 CONFERENCE HELD ON 14TH AND 15TH APRIL, 2015.

PREFACE PAGE 3

FOREWORD PAGE 4

PROGRAM SCHEDULE PAGE 5

DAY I REPORT ACADEMIC CONCLAVE PAGE 8

DAY II REPORT MAIN BUSINESS CONFERENCE PAGE 13

FEEDBACK PAGE 28

EDITED BY

TAS VIJAYARAGHAVAN ANSHUMAN NEIL BASU JOHN SALDANHA

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Conference Report

M A K E I N I N D I A – U N L E A S H I N G N E W O P P O R T U N I T I E S

SCM Programs held its first Annual Supply Chain Conference, with the theme ‘Make in India – Unleashing New

Opportunities’, on April 14-15, 2015 at the iconic Tata Theatre in NCPA in Mumbai.

The India Supply Chain 2015 Conference provided national and international delegates with opportunities to

network on how to manage change in their supply chains from the experiences of executives from leading

global corporations, as well as from leading supply chain academics.

The Indian Government's ambitious and comprehensive Make in India program touches all areas of business in

India. The program's re-visioning of all sectors including transportation and manufacturing will unlock India's

economic potential, accelerate growth and increase investment opportunities directly affecting the supply chain

of every business in India. Moreover, policies simplifying the regulatory environment including the impending

implementation of the Goods and Services Tax (GST) will result in numerous supply chain challenges which will

need attention and at the same time create opportunities for doing business in India in the coming years.

The conference brought together thought leaders and solution providers from major global companies who

shared insights and real world examples about managing a wide range of supply chain challenges. Conference

topics included ‘Infrastructure Requirements that Enable the Make in India Supply Chain’, ‘Policy Reboot,

Challenges of a New Policy Environment’ and ‘Market Entry-The View from outside India.’ Each panel featured

international supply chain leaders who discussed the challenges of doing business in India.

In addition, the program featured renowned academicians from top management institutes in India such as XLRI

Jamshedpur, IIM-Ahmedabad, IIT-Bombay, IIM-Bangalore. They were joined by internationally renowned

academics such as from Ryerson University, Canada; Aston University, U.K.; West Virginia University, USA who

deliberated on Supplying Talent for the Make in India Supply Chain, in a first ever Academic Conclave in India

on Supply Chain & Logistics along with a parallel business conference.

This report summarizes some of the major discussions during the Academic Conclave and the Main Conference.

2015 CONFERENCE COMMITTEE

RAM MENEN KEIICHI HIGUCHI

LUXEMBOURG JAPAN

TAS VIJAYARAGHAVAN JOHN SALDANHA (CHAIR)

INDIA USA

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PREFACE

ANSHUMAN NEIL BASU, Chief Executive, SCM Programs.

Greetings! At the India Supply Chain 2015 Conference we hope that we were able to present you with an

enriching learning experience and you could take back memories and knowledge that you could cherish and

use the expertise in this on-going year. With our total package approach, we presented this forum as an

interactive session to exchange ideas, proposals and experiences.

We are thankful to our sponsors, partners, collaborators and volunteers, who gave their immeasurable presence

and unconditional support to make this Conference an invaluable experience for all of us.

With a positive mood in the Indian economy, ensuring that our supply chains remains robust and continue to

evolve is important for today’s industry and the government’s Make in India initiative. Executives need an in-

depth look at core processes and common supply chain challenges so they can identify and focus on key

enablers. This conference offered insights regarding the kinds of tools and knowledge their supply chains would

need to evolve with this next stage of India’s industrial growth. We achieved this with the introduction of an

improved learning format that included all-star panel sessions, increased audience engagement and a

networking evening unique to a supply chain event. The panel discussions during the academic conclave and the

main business day provided critical insights to complex, meta topics that will influence supply chains in India.

We, at SCM Programs, in our first year also tried to make this Annual Conference meaningful and impactful to

be the standard for supply chain education and networking in India. We were enthused and delighted at the

gathering of people whose excitement and energy made this Conference an unqualified success. The conference

advisory and the organizers were happy to witness the productive and frank discussion that continued

afterwards during the networking sessions. We tried to make the best efforts to keep the subject matter simple,

yet topical and pragmatic, to provide meaningful material that you could use and propagate back in your

organizations.

The India Supply Chain 2015 Conference was a forum for business and academic leaders to discuss global

challenges in this industry and identify novel and innovative solutions and opportunities to these challenges. We

talked about the ‘Make in India’ campaign from the Supply Chain perspective, the new policy environment and

optimum solutions for correct market entry with India as the focal point.

We appreciate the support of all our partners in this endeavor, notably NCPA, McKinsey, Hindustan Unilever,

Nestle, Coca Cola, Philips, Maritime Gateway, and many others for their benevolence and handholding to see

this Conference through. A special thanks to delegates who joined us from outside India - UK, USA, Canada,

Singapore and Japan - and other corporate representatives.

At SCM Programs, our endeavor is to give you the best knowledge from the industry distilled and tailored to

suit your needs. To conclude, we would just like to present this shloka in Sanskrit ‘sa vidya ya vimukteye’ meaning

only true knowledge will free us from our bondage’. This is the guiding light we follow at SCM Programs. We

hope you will find this conference summary useful for your reference for this year, till we meet in 2016.

Carpe Diem!

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FOREWORD

TAS VIJAYARAGHAVAN, Professor, XLRI-Jamshedpur.

Prime Minister Mr.Narendra Modi launched the Make in India program on 25 September 2014 in a function at

the Vigyan Bhawan. On 29 December 2014, a workshop was organized by the Department of Industrial Policy

and Promotion which was attended by Mr. Modi, his Cabinet ministers, chief secretaries of states and various

industry leaders. The initiative focused on 25 sectors of the economy for job creation and skill enhancement.

Some of these sectors ports, aviation, leather, tourism and hospitality, wellness, railways, design

manufacturing, renewable energy, mining, bio-technology, and electronics. The initiative hopes manifold

expectations in increase of GDP growth, tax revenue, high quality standards and minimized impact on the

environment by attracting capital and technological investment in India. The campaign was designed

by Wieden+Kennedy. Before the initiative was launched, several preliminary steps were taken in terms of

relaxing the foreign equity caps in various sectors, online the application processes for licenses with increased

validity of licenses to 3 years. Various other norms and procedures were also relaxed. In August 2014, the

foreign direct investment (FDI) was increased to 49% from 26% in the Defense Sector and nil to 100% in

Railways. With the exception of the Space (74%), Defense (49%) and News Media (26%) sectors, 100% FDI

is allowed in the rest of the 22 industry sectors. The responses have been good to this initiative with companies

like Hitachi, Samsung, Spice Group, Huawei, Xioami, Lenovo, Foxconn etc. expressing willingness to invest in

India.

With this background, this conference assumed greater importance in understanding the implications of the

initiative on Indian Supply Chains to meet the challenges. The question we intended to showcase was “Is India

prepared for this initiative? The problems that faced in India are well known, poor transportation infrastructure,

lack of multimodal movements, policy issues relating to movement of goods, complicated tax systems, procedural

formalities and complexities, lack of supply chain talent and skill gaps among others. Often it is said that

Demand can bring in Supply, in India it is this reactionary behavior that often leads to development of systems

and investment in facilities.

The India Supply Chain 2015 Conference organized by SCM PROGRAMS was the start of a one of its kind

event to provide leadership for supply chain management in India and begin an honest conversation among all

stake holders for the government’s Make in India program. To this end it provided a platform for academia,

industry, government officials and other stakeholders to debate, deliberate, share their thoughts, concerns and

ideas to bring in more clarity to the initiative” Make in India”. In our own Prime Minister’s words, FDI i.e. First

Develop India should be the main motivation for the other FDI to flow in and certainly needs careful assessment

of all the possible implications. In this white paper, the gist of all the deliberations, ideas and thoughts generated

by renowned industry leaders, academia and other stakeholders have been compiled to serve as an eye opener

for policy making and implementation.

I hope the readers will enjoy reading the contents and will benefit immensely from them.

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PROGRAM SCHEDULE AS IT WAS

TATA Theatre, NCPA, Mumbai, Tuesday, 14th

April, 2015.

Academic Conclave, SESSION TIMINGS & SPEAKERS.

Timings Program Schedule 1:30PM - 2:00PM Coffee and Registrations 2:00PM - 2:10PM Welcome Address by Neil Basu, SCM Programs. 2:10PM - 2:30PM Preamble & Theme Address of the Academic Conclave by

TAS Vijayaraghavan, Professor, XLRI- Jamshedpur, India. 2:30PM - 3:30PM Keynote Address by David McLeod, Learn Logistics, U.K. 3:30PM - 4:00PM Network with Nescafe 4:00PM - 5:15PM Panel Discussion on the topic of ‘Synchronizing Talent Supply & Demand’.

Participants: Saral Mukherjee, Professor, IIM-Ahmedabad. Devanath Tirupati, Professor, IIM Bangalore. Donald Tham, Professor, Ryerson University, Canada. Mahesh Calavai, Director, Target Corporation. Chandra Mohan Gupta, Director-Supply Chain, Coca-Cola. Niraj Ambani, President, Reliance Industries Limited.

Moderator: David McLeod, Director, Learn Logistics, U.K. 5:20PM - 6:30PM Panel Discussion on ‘Programmatic Strategies to Develop a Talent Pipeline’.

Participants: Narayan Rangaraj, Dean, IIT-Bombay. Sanjay Sharma, Professor, NITIE, Mumbai. Keiichi Higuchi, President, Rikuso Trans. Japan. Pramod Sant, Vice President-SCM, Siemens.

Moderator: John Saldanha, Professor, West Virginia University, USA. 6:30PM - 6:45PM Closing Summary of the Academic Conclave & way ahead by

TAS Vijayaraghavan, Professor, XLRI-Jamshedpur, India.

6:45PM – 7:30PM Refreshments and disperse

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TATA Theatre, NCPA, Mumbai, Wednesday, 15TH

April, 2015.

MAIN CONFERENCE, SESSION TIMINGS & SPEAKERS.

Timings Program Schedule 8:00 AM – 9:00 AM Registrations, Coffee and Morning Refreshments.

INAUGURAL SESSION 9:00 AM – 9:15 AM Welcome Address & Lighting of Inaugural Lamp 9:15 AM – 9:30 AM Theme Address by John Saldanha, Professor, West Virginia University & Chair of

2015 India Supply Chain Conference Committee. 9:30 AM – 10:15 AM Conference Keynote Address by Sumit Dutta, Partner, McKinsey & Company. 10:15 AM – 10:40 AM Address by Guest of Honour, Shri Suresh Kotak, Chairman, Kotak & Company. 10:40 AM – 10:55 AM Address by the Chief Guest 10:55 AM – 11:00 AM Vote-of-Thanks 11:00 AM – 11:30 AM Break with Nescafe.

MAIN SESSIONS & CONCLAVE 11:30 AM – 11:45 AM Address by Anshuman Singh, MD & CEO, Future Supply Chain. 11:45 AM – 12:00 Address by Vikesh Wallia, Sr. Vice President & Board Director, Times Group. 12:00 – 1:15 PM Indian Supply Chain Business Leaders’ Speak - Conclave I

Guest of Honour: Shri Ravi Parmar, Chairman, Mumbai Port Trust. Panel on “Infrastructure Requirements that Enable the Make in India supply chain”. Speakers: Chandra Mohan Gupta, Director, Supply Chain, Coca Cola.

Ajay Chopra, MD & Advisor to Chairman, Bahwan Group. JVB Sastry, Senior Vice President, ACC & Ambuja Cement. Bharat Thakker, Immediate Past President ACCAI. Subrata Sen, GM, Philips Electronics. Deepak Tiwari, Director-Asia, APL Logistics. Pradeep Saha, Associate Director, Colgate.

Moderator: Ravind Mithe, Partner, KPMG. 1:15 PM – 2:00 PM Networking Lunch

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2:00 PM – 3:00 PM Indian Supply Chain Business Leaders’ Speak – Conclave II Guest of Honour: Shri P.K. Agrawal, Addn. Director General, Commissioner of Customs, Central Excise & Service Tax.

Panel Discussion on “Policy Reboot, Challenges of a New Policy Environment”. Speakers: T. Venketram, Director - Supply Chain, Kellogg’s.

Dhruv Agarwal, Executive Vice President, Gati. Srinivasan Sarangapani, Director - Operations, Timken. Rajesh K Kaushik, Director - Supply Chain, Baxter. Nikhil Kush, Head Supply Chain, South Asia, DuPont. Shardul Thacker, Mulla & Mulla & Craigie Blunt & Caroe.

Moderator: Kumar Kandaswami, Senior Director, Deloitte Touché Tohmatsu. 3:00 PM – 3:30 PM ‘Getting food from farm-to-table efficiently--making lean logistics in India’ A Special Presentation by Keiichi Higuchi, President, Rikuso Trans. Japan. 3:30 PM – 4:30 PM Global Supply Chain Business Leaders’ Speak – Conclave III

Panel Discussion on “Market Entry-The View from Outside India”. Speakers: Keiichi Higuchi, President, Rikuso Trans. Japan.

Rajesh Achanta, Director - Asia, SupplyChain, P&G. Mark Khambatta, MD, SC Fulfil Consulting Pte., Singapore. Rajeev Chadha, Country Manager, JDA. Ani Agnihotri, Program Chair, US India Business Summit.

Moderator: Shantanu Bhadkamkar, MD, ATC Group. 4:30 PM – 5:00 PM Supply-Chain Espresso – (High Tea Networking) CONCLUDING SESSIONS 5:00 PM – 5:30 PM ‘Six-Sigma se Swatch Bharat’ – A special presentation by Mumbai Dabbawallahs. 5:30 PM – 5:50 PM Closing Session by Kuldip Kaura, Advisor to Vedanta Resources Plc & Former MD

& CEO, ACC Ltd. 5:50 PM – 6:05 PM Conference Summary by John Saldanha, Chair of 2015 India Supply Chain

Conference Committee. 6:05 PM – 6:15 PM Speaker felicitations. 6:15 PM – 6:30 PM Vote-of-thanks and Way Ahead 2016. 6:30 PM – 7:00 PM Break-out & Rest Time – Networking to continue with Nescafe. 7:00 PM onwards Cocktails & Dinner in a splendid ambience with live Indian music. Amadeus, NCPA.

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DAY I

Academic Conclave

THE FOLLOWING WAS THE MESSAGE SENT TO ACADEMIC INSTITUTIONS & INDUSTRY EXPERTS ABOUT

THE ACADEMIC CONCLAVE BEFORE THE CONFERENCE.

We invite you to an exciting exchange of ideas and concerns regarding the supply chain management talent and

skill gap in India during the first ever Academic Conclave as part of the India Supply Chain conference April 14-

15, 2015 in Mumbai.

There are numerous reports that Indian industry is facing a tremendous talent and skill gap among supply chain

professionals. Academic and other trade institutions are not able to match this shortfall both in terms of number of

supply chain management graduates as well as their supply chain knowledge. Even leading B-Schools, lack curricula

concentrating in supply chain management, supplying MBAs with the traditional functional specializations. Are our

Academic Institutions paying attention to this reality in the field and do industry practitioners feel that their voices

and concerns are being heard by our academic institutions?

In this Conclave both leading academics and industrial practitioners will debate these concerns. We would like to

have you as leaders of the premiere academic institutions be part of this conclave to lend your voices to this

important debate on the future of supply chain management skills and talent in India.

Dr. TAS Vijayaraghavan, XLRI- Jamshedpur, India. Dr. John Saldanha, West Virginia University, U.S.A.

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Supplying Talent for the Make in India

Supply Chain

Preamble

A major concern of supply chain managers in India is acquiring skilled supply chain talent to fill their needs to

meet their firms supply chain needs today. The Government's 'Make in India' program is likely to accelerate

that need and firms will be faced with the challenge of filing their supply chain talent needs in order to compete

in the new environment or be left behind. In this first of its kind academic conclave in India we will provide a

forum for frank discussion on how supply chain academics and industry can fulfill these burgeoning talent needs.

Panel 1: Synchronizing Talent Supply & Demand: Nationally and internationally renowned academics and

prominent industry practitioners are encouraged to engage in this session that will be a first public forum to

discuss the needs of industry and strategies for supply chain academics to meet those needs.

Panel 2: Programmatic Strategies to Develop a Talent Pipeline: Building on the discussion in the previous panel,

nationally and internationally renowned academics with the guidance of

prominent industry practitioners will discuss programmatic, curricular and

recruitment strategies to develop a high quality, reliable pipeline of supply

chain talent.

Prof. TAS Vijayaraghavan started the conclave asserting that as a discipline,

academia and industry needs to address the very real gap in our own

understanding of what comprises supply chain management. He said that

before we start to discuss how to meet the needs of the industry academics

and practitioners’ needs to come together and agree on what exactly is

supply chain management.

The Keynote Address for

the Academic Conclave was addressed by Mr. David

McLeod from Scotland who echoed several of the main

topics pointing out the complexity of supply chain

management due to the extreme consumer diversity in

India and at the same time the severe shortage of supply

chain talent. A few notable points which he made was

pointing out the tension - on the one hand to develop

training & academic programs that can be measured as

successful usually through testing, and on the other the

need to balance the value of the programs to generate

interest and curiosity that simultaneously develops the

correct skills.

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Composition of the Two Panels in the Academic Conclave

Synchronizing Talent Supply & Demand Participants: Saral Mukherjee, Professor, IIM-Ahmedabad.

Donald Tham, Professor, Ryerson University, Canada.

Mahesh Calavai, Director, Target Corporation.

Chandra Mohan Gupta, Director-Supply Chain, Coca-Cola.

Moderator: Devanath Tirupati, IIM Bangalore

Programmatic Strategies to Develop a Talent Pipeline Participants: Narayan Rangaraj, Dean, IIT-Bombay.

Sanjay Sharma, Professor, NITIE, Mumbai.

Keiichi Higuchi, President, Rikuso Trans. Japan.

Pramod Sant, Vice President-SCM, Siemens.

Moderator: John Saldanha, Professor, West Virginia University, USA.

The Academic Conclave panels witnessed intense discussions which has never happened in India before with a

very active participation from delegates from all over. This created a precursor for a new format of the

Academic Conclave in 2016 which in now underway. The panel discussions saw representation from both industry

and academia, and notably from an engaging audience of professionals from all walks including students which

made the day truly interesting with value added supplements which were the highlights of this unique conclave.

The participants included Professor TAS Vijayaraghavan, XLRI- Jamshedpur, India, Mr. David McLeod, Learn

Logistics, U.K., Professor Saral Mukherjee, IIM-Ahmedabad, Professor Devanath Tirupati, IIM Bangalore,

Professor Donald Tham, Ryerson University, Canada, Mr. Mahesh Calavai, Director from Target Corporation,

Mr. Chandra Mohan Gupta from Coca-Cola., Professor Narayan Rangaraj, Dean, IIT-Bombay., Professor

Sanjay Sharma, NITIE, Mumbai, Mr. Keiichi Higuchi, President, Rikuso Trans. Japan, Mr. Pramod Sant, Vice

President-SCM, Siemens and John Saldanha, Professor, West Virginia University, USA.

Professor Devanath Tirupati from IIM Bangalore highlighted how institutes such as

as theirs have Supply Chain Centers and Data Analytics Lab to nurture the talent

and skill gap of a particular level. He moderated the discussion emphasizing that

there is a need to assess the gaps as there is a huge gap of talent in supply chains

in India.

Professor Donald Tham reiterated strongly with

examples from his experience that the need is to have

a tripartite collaboration among the government,

academia and the industry. All the three should be

equally responsible stakeholders for bridging the talent

gap and giving quality education and thereby proper

jobs for the students once they successfully complete

their programs.

Mr. Chandramohan Gupta from Coca Cola India was optimistic and put forth his

thoughts and shared them with great analogies and commented that he is excited

about the quick innovation from Academia world in India.

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Professor Sanjay Sharma from NITIE gave excellent thoughts with analogies and

lots of statistics compiled from various reports and said that there should be

planning in supply chain structure as well as demand & supply analysis should be

done which is required to bridge the gap between supply and demand on the skill

shortage. He also commented that we should also see how the demand for skilled

manpower can be reduced, i.e. how the synchronization of demand and supply in

skill shortage gap can be balanced. One of the suggestions he provided is for

companies to increase retention among its existing workforce, which would also

help curb the demand.

Mr. Keiichi Higuchi, Rikuso Transportation, Japan gave several examples of Programmatic Strategies to develop

a Talent Pipeline during the Academic Conclave. He mentioned that even though the number of students

educated in western countries or getting MBAs increases, Supply Chain cannot be implemented without lower

level workers. He stressed that, “since the number of schools (or colleges) will not increase dramatically, we will

not be able to rely on them for the supply of young talent. Firms should pay their own money to educate front

line employees to learn Kaizen or activities of QC circle, hence, they

will be able to improve the quality of their business. This will eventually

enable employees to submit Kaizen ideas to run the organization

better. We will not be able to wait for a dramatic increase of supply

of skilled talents from academic institutes. Make in India has already

started and it cannot wait for the supply of talent. We should

persuade the Indian government to give any tax credit or subsidy to

private companies to initiate internal employee educational programs

or employee skill development programs to meet their needs for

skilled labor.”

Mr. Higuchi further cited an example. “One example is a seven years

old program between Japan and Thailand titled ‘Certified Logistics

Professional’ certification program sponsored by the Thai Exporters

Development Foundation and supported by the Japanese Overseas

Development Aid program (through Japan External Trade

Organization). Japanese Institute of Logistics Systems (JILS) is an actual

education provider by dispatching instructors and curriculum. This 23

days course was originally designed to educate middle managements

who are in charge of logistics in Thailand, and all the class programs were taught in Japanese with Thai

interpreters. After three years of experience, all the courses were transferred to Thai instructors and they have

been taught solely in the local language. This will help local industries to educate their employees and its low

tuition subsidized by the association will make taking this course easier. Also, Indian companies should pay

money to educate their employees to make a quick start with Make in India.” He also substantiated that

companies like his and others in Japan support their employees with higher training and education from the

company’s expenses and that is something which needs to be started in India too.

PROF. SANJAY SHARMA

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Professor John Saldanha, West Virginia University, USA summarized that there is

indeed a shortage at all levels especially at the frontline operations personnel i.e.

warehouse workers, shipping dock un/loaders, pickers-packers, forklift drivers,

truck drivers, etc. A big problem is the perception of these professions and a key

strategy is to raise the professional profile of these positions to attract talent. Some

programmatic suggestions would be to create a unified certification program that

could be implemented by different private training institutes such as the JILS

certification programs elaborated by Keiichi. “This outsourcing would reduce the

burden on individual firms while also creating a unified certification authority that

would also help to raise the professional profile of these operational level positions.

From an undergraduate and graduate education perspective more needs to be

done to provide students with practical experience and with practicum based SCM

curriculum”, he added.

“There are numerous reports that Indian industry is facing a tremendous talent and skill gap in supply chain

professionals. Academic and other trade institutions are not able to match this shortfall both in terms of number

of supply chain management graduates as well as their supply chain knowledge. In this Conclave both leading

academics and industrial practitioners will debate these concerns. We would have leaders of the premiere

academic institutions be part of this conclave to lend their voices to this important debate on the future of supply

chain management skills and talent in India.”

The Academic Conclave was full of valuable insights and for the benefit of those interested to have the full version,

the entire recording of the academic conclave has been uploaded in our website www.scmprograms.com

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DAY II

Make in India - Unleashing New

Opportunities

Preamble

The government's ambitious and comprehensive Make in India program touches all areas of business in India.

The program's re-visioning of all sectors including transportation and manufacturing will unlock India's economic

potential, accelerate growth and increase investment opportunities directly affecting the supply chain of every

business in India. Moreover, policies simplifying the regulatory environment including the impending

implementation of the GST will result in numerous supply chain challenges and opportunities for doing business

in India. The India Supply Chain 2015 Conference provided a forum for business and academic leaders to

discuss these challenges and identify novel and innovative solutions and opportunities to these challenges. The

following three topics were discussed during the main conference day.

Topic 1: Infrastructure Requirements that Enable the Make in India Supply Chain -- Physical and virtual flows

are the life blood of supply chains. Leading edge telecommunications and transportation infrastructure are

essential elements to ensure that firms in India are able to re-engineer leading edge supply chain practices to

be competitive in the global economy. This panel discussion started off a frank national discussion that will

address this critical need for infrastructure.

Topic 2: Policy Reboot, Challenges of a New Policy Environment -- With the new GST regulations on the

horizon the supply chain leaders on the panel addressed the challenges and opportunities they faced with

improving the effectiveness and efficiencies of their supply chains to compete globally. Other burning issues

including those not addressed by government policy were also addressed such as the skills gap that is often

cited in surveys as a critical gap in firms' supply chains in India.

Topic 3: Market Entry-The View from outside India -- The World Bank's 2014 Logistics Performance Index

ranks India as 54th in logistics capability. The group of international supply chain leaders in this panel

discussed the challenges of doing business in India, which is an impediment to the critical access to FDI that is

an essential element to ensure continuing access to state of the art supply chain technology and knowledge

transfer.

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Professor John Saldanha while addressing the theme of the conference noted that the

supply chain challenges faced by firms in India today are widely acknowledged.

Logistics accounts for 13% of India’s total GDP, which is significantly higher than

countries like US and Germany where logistics costs are about 8% of GDP (TOI report

of Indian Foundation of Transport Research in 2012— Ref: Mr. Vikesh Wallia).

McKinsey estimates that waste due to poor infrastructure alone can add up to 5% of

India’s GDP by 2020. The WSJ reported that about 1/3rd of India’s fresh produce are

lost to spoilage each year, about a USD10 billion loss. This problem is in part caused

by (1) onerous regulations that have led to a multi-echelon supply chain with multiple

touches (2) Inadequate cold chain infrastructure, and (3) a logistics infrastructure that is

in urgent need of an update.

Citing his recent published research he went on to point out some of the complexity underlying solutions to the

problems, “Prof. Vijayaraghavan and I found in our research that it is our (India’s) legacy of a social-welfare

motivated, controlled-economy that gave rise to what is commonly referred to as the traditional channel or

supply chain. In today’s open economy firms governed by free market principles must juxtapose modern supply

chain processes and management practices on this traditional supply chain structure. The two are incompatible

giving rise to the problems we are so familiar with. Other often overlooked reasons is that we are the world’s

largest most diverse, most vibrant and peaceful democracy electing and changing administrations with

incredible efficiency and without shedding of blood. Plato said that ‘Democracy is a charming form of

government, full of variety and disorder; and dispensing a sort of equality to equals and unequal’s alike.’ The

74th Secretary of the U.S. Treasury and past CEO of Goldman Sachs Hank Paulson said this of India, ‘India is

a vibrant nation whose strength lies in its commitment to equal rights and to speech, religious and economic

freedoms that enrich the lives of all citizens. India is not only the world's largest democracy; it is also a secular,

pluralistic society committed to inclusive growth.’ Considering Plato’s and Hank Paulson’s observations,

Democracy, especially with over three-quarters of a million registered voters with over a two-thirds turnout in

2014, is a slow process. But it is thanks to this democracy that we now have an administration that is taking up

the baton on improving the competitiveness of Indian business. Which brings us back to why we are gathered

for today’s session on exploring ways to overcome the challenges and explore strategies that leverage the

Make in India program to enable Indian business to build world class supply chains so that they can compete

effectively in the global economy”.

Mr. Sumit Dutta from McKinsey & Company gave the Keynote address with his

special presentation on the theme and said that supply chain is a strategic-lever

function and becoming more in the future as firms continue to build their SCM

expertise. Some of the points which he emphasized are that of Infrastructure,

mentioning that Roads and Coastal Infrastructure is a lynchpin in building India’s

SCM competitive advantage. He said that Talent development is an important and

key area of SCM competitive advantage for India. On a futuristic note he said

that Leapfrogging is an important strategic option, such as through digitization of

manufacturing e.g. 3D-printing.

“In the last 10 years supply chain has become and perceived by boards of

companies as a strategic lever for business”, said Sumit. “It is seen as a strategic

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differentiator”. Giving his outlook on the Make in India initiative he presented that the key issues faced by

Indian Manufacturing Sector are a) Inadequate physical infrastructure, b) Inadequate availability of skilled

manpower, c) decreasing ease of doing business, d) availability of land, among a few more.

“Physical infrastructure is holding us back, which the government is trying to address”. During the presentation

Sumit referred to the 10 targeted programs from a McKinsey study that can be the bedrock of improved

logistics infrastructure in India. He went on to elaborate upon these during the course of his presentation: Rail

Dedicated Freight Corridors, Coastal Freight Corridor Projects, National Expressways, Last Mile Road Links, Last

Mile Coal Corridors, Multi Modal Logistics Parks, Road Maintenance, Standardized technology adoption,

Training Infrastructure for Logistics Skill Development, Design Standardization.

One of the enabler of overcoming all this in the next 5-7 years will be Digitalization of Supply Chain. He

mentioned that in order to reinvent ourselves for the future, some of the technologies that will change the

manufacturing sector (for the Make In India initiative) between today and 2025 will be Big Data, Cloud

Technology, Advanced Analytics, Augmented Reality (like Google Glass), 3D Printing, Human Robot

Collaboration and Energy storage and harvesting.

Mr. Suresh Kotak, the Guest of Honor to the Conference said that SC of supply-

chain is actually the “supreme court” of economic systems. He said that industry

needs to think of a ‘web of supply chains’. He said that while we live in a

dynamic world we need to keep an eye on the fundamentals. The

fundamentals do not change. He gave his address mentioning that he finds the

conference “unique” in many ways, particularly as the conference was

preceded by a very relevant academic conclave which makes it an unique

‘topical’ and a ‘typical’ kind of conference and he found it of great value with

its utility (concepts and offering of tool kits) for supply chain of management.

In addition he commended the discussion as ‘well-structured’, ‘well-conceived’

making it directional. He further said that a typical conference enables diverse

thinking and identifies actions. He emphasized the topics typically on talent

shortage and skill development which is required by the country.

Coming from an industrial background, he mentioned that India is the No. 1 cotton producer in the world and

also mentioned the various food (perishable) items in which India is a leader in production and cultivation. Giving

an example from the cotton industry in which he has done considerable research which was published in a World

Bank report, he presented his vision for wealth creation for India through cotton cultivation and its export. His

report shows that supply chain transforms into a value (chain) and that can create lot of wealth for the country,

besides, jobs, income and wealth which can all come from an efficient supply chain. His report also states how

supply chain and value chain provide increment and progressive development all along.

Mr. P.K. Agrawal, Commissioner, Excise, Service Tax and Customs started his speech declaring “Supply Chain is

the supreme mover of the value chain”. He said in his speech that integrating an effective value chain through

easing the tax code is possible. He said for the government easing the conduct of business is a top priority and

that a radical shift to a new way of thinking for the IRS is emerging. As a taxman he takes great pride in saying

that the government now wants to ease how business is conducted through simplification of the tax code. He

also said that GST is a big challenge but the goal is to implement as per schedule.

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He said that his thrust as a tax person is an effective value chain, and efficiency

of the “value-chain” depends on efficiency of the supply chain. India today as

he emphasized is a force to reckon with, a vibrant democracy as well as a

vibrant economy which is full of opportunities. He spoke about the

achievements and initiatives by his department and the success of technology

driven self-assessment, risk management systems in excise, service tax and also

recently in customs. He also spoke about the ease of documentation, simplifying

of processes, voluntary payment of service tax, onsite post clearance audit

and also about the customs duty cut on 22 items by the government.

He reiterated that the government and the bureaucracy along with trade and

industry has to move together to make the ‘Make in India’ successful. Make in

India is an evolution and will revolutionize the country he stressed.

Mr. Anshuman Singh in his speech said we must put the Make in India in context. He asked in his speech if we

(India) can really compete with China. The answer is no, as China’s GDP and future plans are as robust as ever!

So what we should and can do is to improve the SCM capabilities in India to increase our competitive advantage.

He said that we should not be too fixated on the idea that logistics costs must fall as the percentage of the

GDP. Logistics costs increase as a percentage of the GDP. He gave examples from his experience with doing

business with China and India, and mentioned this is the right time for India for growth. He explained how China

is shifting from a B2B (billion people in China supplying to a billion people across the world) world to a B2C

(Billion population in China will manufacture and feed billion Consumers in China) world.

Professor TAS Vijaraghavan with Mr. Anshuman Singh (below picture)

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Infrastructure Requirements that Enable the Make in India supply chain

Speakers: Chandra Mohan Gupta, Director, Supply Chain, Coca Cola.

Ajay Chopra, MD & Advisor to Chairman, Bahwan Group.

Bharat Thakker, Immediate Past President ACCAI.

Subrata Sen, GM, Philips Electronics.

Deepak Tiwari, Director-Asia, APL Logistics.

Pradeep Saha, Associate Director, Colgate.

Moderator: Ravind Mithe, Partner, KPMG.

Mr. Ravind Mithe, Partner, Management Consulting, KPMG Advisory Services

Private Ltd. was the moderator of the panel and initiated the discussions with

questions and the following points, against which the panel saw a lively discussion.

a) How supply chain infrastructure will make a difference in the life of the man behind the wheel and man on the ladder? b) How to make the last person share the vision of supply chain efficiency and responsiveness? c) Availability of skilled workforce for supply chain. d) Removal of silo mindset among different constituents of supply chain. e) Large unorganized transport and logistics sector – very few 3PL operators in India are with their own fleets. f) More usage of waterways to decongest the roads.

Mr. Chandramohan Gupta, Supply Chain Director, INSWA Business Unit, Coca

Cola indicated several points as key to enable the ‘Make in India’ movement,

such as : a) Ease in getting approvals and clearances for starting a new business

b) Acquisition process to be made simple and effective for land and water to

support manufacturing, c) Credit Availability from the government, d)

Improvement of supportive infrastructure such as road, rail and ports, e) Skilled

workforce for manufacturing, warehousing, transportation etc., and f) Clear

processes for filing and servicing of disputes on

contract enforcement.

Mr. Ajay Chopra, of Bhawan Group

emphasized the motivation for more manufacturing. Manufacturing industries

have helped drive economic growth & raise living standards for nearly three

centuries and continue to do so in developing economies. Manufacturing makes

outsized contributions to Trade, R&D and Productivity. In developed economies

manufacturing sector contributes almost 70% to exports. He highlighted some

of the deterrents and challenges faced in India. He said that according to a

2014 World Bank survey, India is ranked 46th in global trade logistics

performance, even behind Mexico & Turkey. Perishable & cold supply chains

face a 20% spoilage rate on average due to inefficiencies in domestic freight

infrastructure. Frequent power outages are another grave issue and they have

an impact on manufacturing schedules and

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costs. The Import process has remained complicated & non standardized causing higher

than normal inventory requirements. The processes of the Indian bureaucracy are

complex and confusing. Hence it is not surprising that India has been ranked 139th out

of 189 countries on the World Bank’s ease of doing business index. There is another

grim projection for India and the BRIC countries. The population of workers aged 15-

24 in India and the other BRIC counties is projected to fall by 61mil by 2030 & the

over 65 years old will rise by almost 50% by 2020.

Mr. Ajay Chopra suggested several remedies to counter these potential problems.

According to him, there is a need to lessen the bureaucracy so that more quick action

is taken. Focus should shift from policy formulation to execution. There is a lot of politics

in India in every sector. This reduces co-operation among people, business units, etc.

There is a need to reduce this politicking and harness cooperation in every field. In

effect the focus should be more on the wired network and less on cutting of red tape. There is a need to reduce

congestion, which would result in more speed. If power thefts are minimized, the problem of power outages can

be solved to a great extent. Lessening of roadblocks would lead to ease of movement. If paper work is lessened,

compliance issues can be addressed easily. In effect we should focus on achieving more by technology than by

chance.

Mr. Deepak Tiwari, of APL Logistics mentioned that Multi modal transportation would be a

great boost to the economy along with the dedicated corridor across the golden

quadrilateral. The Port loading facilities for On the Go (OTG) cargo should be improved,

as there are very few ports which can handle out of gauge cargo. Hence, a lot of more

ports will be required on the eastern ports of India as the imports are west and south centric.

He also said that with GST coming in, we will have to come up with consolidation of

warehouses and factories. There will be a need to rationalize the import and export along

with domestic in addition to multimodal synchronization (value chain for e.g. Edible oil and

other FMCG.) We will also need to use the water ways and inland to transport material

especially in the Eastern part of the country. There is a need for a phased plan to draw alternative highways

to decongest the lanes today being operational in primary transportation. He also said that logistics companies

must get more engaged in supply chains as companies need to focus on the manufacturing activity or focus on

sales, and thus the warehouse and transportation functions will need to be spun-off to qualified 3PLs. Companies

need to get involved in a detailed study on seeing their entire demand and supply chain together with a

strategic partner for years to come with macro and micro economic scenarios to support the “Make in India”

theme.

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Policy Reboot, Challenges of a New Policy Environment

Speakers: T. Venketram, Director - Supply Chain, Kellogg’s.

Dhruv Agarwal, Executive Vice President, Gati.

Srinivasan Sarangapani, Director - Operations, Timken.

Rajesh K Kaushik, Director - Supply Chain, Baxter.

Nikhil Kush, Head Supply Chain, South Asia, DuPont.

Shardul Thacker, Mulla & Mulla & Craigie Blunt & Caroe.

Moderator: Kumar Kandaswami, Senior Director, Deloitte Touché Tohmatsu.

Perhaps the most engaging and thought provoking comprehensive summarization was made by Mr. Kumar

Kandaswami, Senior Director, Deloitte Touche Tohmatsu India Private Limited. The following are the points

mentioned by Kumar from Deloitte:

The revival of the Indian economy and enhancement of its competitiveness is likely to be determined by the

policy framework the government is able to define for the business entities to operate in. The areas where clear,

contemporary and well-implemented policies would make an impact are in the areas of Demand generation,

Ease of doing business and Facilitating policies.

Demand generation: Here he talked about promoting consumer demand and promoting investment in

infrastructure. The government can aid in promoting consumer demand by managing inflation and providing

access to credit at a reasonable cost. Investment in infrastructure can be promoted by removing policy risks and

creating viable public-private-partnerships (PPP) models.

Ease of doing business: The government can lower cost of compliance and improve

interfacing with the government. The government should work on lowering all the

factor costs.

Facilitating policies: The government can provide trade agreements that provide

market access. Free trade zones should be provided so that there is a level

playing field to exporters. There is a need to focus on skill development and

promoting academic and applied research. Innovative enterprises and start-ups

should be promoted and they should be provided with access to capital.

Clearly, this list is indicative and generic, he said. Each sector or a business within a sector would like one or

more or other policies made suitable to them depending on their location, nature of business, etc. “It would be

appropriate to mention that in addition to the above, the business community in general would welcome removal

of rules, regulations and policies that are based on the realities of a distant past and are quite irrelevant to the

conditions of today and timely and effective implementation of those policies that have already been

articulated”, said Mr Kandaswamy.

The panel discussion on the Policy reboot focused on the nature of policies that required re-definition,

implementation or creation. Some of these were illustrated through case studies, and following were summarized:

Coastal Shipping – A case of the policy framework making the sector unviable: Coastal shipping is touted as the

solution for the stressed transport network. There have been several studies and initiatives to get coastal shipping

off the ground but with little success. Fundamentally, the government policies relating to this sector seem to be

the reason for the sector not emerging as a viable alternative to other modes of transport. While FDI up to

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100% is permitted in coastal shipping under the automatic approval route, the challenges are many. There

appears to be a plethora of taxes that make the operations unviable and this unfavorable tax on Indian flag

vessels is a huge deterrent. Cumbersome procedures at the ports results in inordinate delays and long waiting

time for trucks carrying cargo, many times resulting in high costs of inland transport. A number of ministries and

authorities involved are causing the situation to get more inefficient and expensive. If the idea of coastal

shipping has to become a reality, the attendant problems are to be tackled with a great deal of urgency.

Setting up operations – The birth pangs: Several sectors, like the FMCG sector, grow by adding capacity to

serve regional markets. Their success in determined by the efficiency with which they are able to expand their

footprint across the length and breadth of the country. However, the reality is different. Companies have to

encounter a lot of problems. Availability of suitable land with the government is the first problem. If they are

fit for use, they are so far away from people or social infrastructure; it becomes difficult to attract talent. While

in theory there is a system of ‘single window clearance’, in reality is something different in practical terms. It is

single window for a particular type of approval with one authority and has no

bearing on another who seeks a separate application and a

process to be gone through. Therefore, the inefficiencies

start impacting the investment even at the

point of establishing the infrastructure and

continue well after the operations have

commenced. The interference from various

authorities is expensive and time consuming. Many

of these requirements are legacies of the colonial

times. The governments at the center and states have to

recognize the irrelevance of some of the rules and the need for an

investor friendly environment for businesses to be competitive.

Mr. Rajesh Kumar Kaushik from Baxter mentioned that Pharma/ Healthcare is one

of the most regulated supply chains in India. GST will push the organizations to

consolidate warehousing i.e. from many smalls to few large which will help

organization to better manage their 3PL’s with focused approach. Capability in

India must be created for end-to-end (E2E) cold supply chain management till last

leg of delivery, today this is lacking in India as we move from upstream to

downstream. Localization will be key in Pharma/ Healthcare Industry with the

Make in India agenda, organizations are looking for global quality from India

as a key source of supplies. With GST implementation the challenge will be to

optimize distribution network so as to reach distributors, hospital & patients in

market acceptable lead times. The gist of his deliberations can be summarized as

follows:

Healthcare – the product validation challenge: A large section of the population

does not have access to quality healthcare. And, health incidents are said to be amongst the most common

reasons for indebtedness amongst the poor. One would like, therefore, the processes of bringing new medicines

to the market be quick and efficient. It does not appear to be the case.

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The new product testing and validation leading to commercial launch seems to take twice or three times the

amount of time in India as it takes in more advanced markets. This is an outcome of several decision-makers

being involved and rules not in line with the needs of today’s realities. Consequently, the companies that want

to launch new products incur higher costs. Presumably, the poor consumer will have to pay for the inefficiencies

that are forced upon manufacturers.

Mr. Dhruv Agarwal, Executive Vice President, Gati Kintetsu Express Pvt. Ltd. said that India's appeal to business

lay in its market size i.e. it’s 1 billion plus potential consumers. However it is not one unified market, but twenty

nine different markets, each with its own tax raising powers, which they are not afraid to use leading to a

complex web of taxes, ‘and taxes on taxes’. He mentioned “Today essentially - the center can't tax goods

beyond their source and states can't tax services. GST will be one unified tax and will allow both to tax goods

and services at each link in the value chain.”

He elaborated on the Impact of GST from an LSP's perspective. “As an LSP we provide measurable services

that are a factor of transport, warehousing and inventory holding costs. He elaborated that post GST they

would look forward to exploiting efficiencies from the following factors:

Consolidation of Warehouses: If the warehouses are larger there is a scope of doing more with less manpower

and there is more scope for automation. There is a chance of taking advantage of the economies of scale. It is

always advantageous to have warehouses closer to consumption and consolidation can facilitate realizing this

benefit.

Move from local to regional/zonal distribution: This would increase the levels of LTL movements to regional

markets with more frequent deliveries.

Shift to a larger FTL movement: Our Road transportation is dominated by the less efficient transportation– 9-

12 tonner. A shift to a larger FTL movement would improve the efficiency.

Fewer check posts, fewer stoppages, faster movement: It is said that the truck drivers spend approximately 60%

of their time off the roads. This can be reduced by fewer check posts, fewer stoppages, and faster movement.

Reduce the buffer stock, percentage of products expiring will reduce: With more

efficient inventory holding and greater reliability on demand forecasting, the

percentage of products expiring would reduce and hence there would be less

wastage and would incur savings. He also raised the issue if implementation of

GST is a silver bullet?

ISC 2015: The implementation of GST is touted as a big reform that can add 200

basis points to GDP growth. It is expected to make the state borders disappear

and taxes go down. The reality seems different. High revenue-neutral rates –

though not announced - can potentially push up product prices in the short term.

There is also the threat of tax for intra-state movement. Clearly, the borders are

unlikely to go away. There are still areas that are being debated. While the

need for GST is well-understood, the political debate is still not over. Given all

of this, will the promised roll-out in April 2016 happen?

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Whereas, on the flip side there is going to be higher tax estimated to

17-20% and there is a chance that the entry posts, will become exit

posts (1% additional tax). Service Providers will have to deal with

multiple tax authorities - central, state and inter-state tax - maintenance

of several state wise, central, ledgers for different taxes which are

complex, costly and cumbersome. Today we deal with one central service

tax authority. GST is a destination based tax as long as the consumer is

registered. However this will create some issues with respect to ECOM

customers - where the burden of tax will be at the origin. Though the

GST bill in its current form requires some deliberation and modification, yet it is a long term strategy that is

going to be benefit producers, consumers and service providers.”

Mr. Srinivasan Sarangapani from TIMKEN had the following points to make on the

topic of skill gap:

Vocational: With the make in India initiative and the investments targeted towards

manufacturing we are looming over a major crisis on skilled manpower for a 1.2 BN

country with over 600/700 MN people who are in the employable range we are

just having ~ 100 MN who can pick up employment with the right education. Even

out of them we are not having them geared up with the right skill set. We will need

a good policy to have this employable population take up vocational courses which

can aid industry much. A policy to drive industry related education with relevance

on making them employable with the new industries coming in is very important.

One such policy could be revamping the vocational / apprenticeship schemes to make them more skilled and

employable.

Executives, Staff Managing Supply Chain: A clear gap on understanding of supply chain is prevalent across

industry at large. We have executives/ staff that are still focused on procurement or distribution / logistics

functions only and believe their areas are what supply chain is all about. A clear domain specific thrust to

develop supply chain professionals are required which needs lots of industry institute partnerships. Policy to

develop and upgrade our age old courses to something which is more relevant to the current business scenario

which means one will need to upgrade the institutions, syllabi, faculty , teaching methods etc. through the HRD

ministry.

The other topic which he asserted was the labor reforms in manufacturing aiding Make in India. He said that

our various laws including the factory act, industrial dispute act date back 40-50 year. “We have not done

much of policy changes since then. The interpretation and enforcement of them is more geared towards

harassment of companies. Overall there are 40+ central laws and over 150+ state labor laws making the

effort of doing business time-consuming, costly and archaic. We need more user friendly technology based

enforcement or a green channel where companies take ownership of implementation. The Factories Act and the

Industrial Dispute Act have to be overhauled and their interpretation has to be simplified to aid the ease of

doing business in India where India is ranked now at 142 out of 160 countries. Some states like Gujarat and

Rajasthan are looking in to streamlining their labor laws it but this has to be approached across India. Usage

of contract labor vis-à-vis regular labor, their pay scales and facilities have to be regulated to ensure the law

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favors employers as well as employees fairly”, said Srinivasan. He emphasized skill development, vocational

training and labour reforms as necessary enablers. “It is a catch-22 situation as far as skills goes. While the

industry constantly complains about the lack of skilled workers, it is also true that the economy has been able to

absorb only about 5 million of the 10 million people who become employable in a year. This situation arises on

account of high concentration of manufacturing in a handful of states, large sections of the population not being

able to afford any sort of training or education and the quality of training or education imparted not meeting

the requirement of the employers. Consequently, the industry is faced with the task of having to re-train most of

those who they employ from the school, vocational or higher educational institutions”, he said.

ISC 2015: With the make in India initiative and the investments targeting the manufacturing sector, there is a

huge skill crisis looming. Providing quality vocational training to the youth is of utmost importance. This includes

initiatives such as revamping the vocational & apprenticeship schemes to make young people more skilled and

employable.

Mr. Nikhil Kush, South Asia Leader, DuPont summarized his presentation on Global

Sourcing Challenges. He said that while India has the requisite

knowledge/skills/process technology capability, yet our export numbers are woefully

short of the potential. The key constraints are the additional lead time burden imposed

on Indian suppliers due to long export clearance processes and low frequency of

vessel sailings. The additional lead time for servicing customers in the West from India

is almost 30 days vs China. To get out of the vicious cycle of low demand/higher per

unit cost, initiatives are required to improve execution capability with respect to

India’s infrastructure and simplifications in policies around customs and related

regulations which come under the purview of various ministries such as Textiles, Health

and Agriculture.

On the Supply Chain Skills Gap he added, “I observe a huge gap in the understanding of the supply-chain

function across business & industry at large in India. Discussions on supply-chain are basically restricted around

the warehousing/transportation and customs/shipping lines. Supply chain is of course much wider than that and

organizations that understands this (end to end operations covering plan/buy/make/deliver/return) has made

it a strategic element of their business plans. The point is that a lot more needs to be done in India in terms of

improving education and spreading awareness around the correct meaning/import of Supply Chain.

As the manufacturing supply chains get more complex and global, there is already a severe lack of supply

chain professionals of adequate quality in the country. The antiquated courses are quite inadequate to prepare

professionals for today’s requirements. This results in situations like the gap in understanding of supply chain

across industry. There are professionals who are still under the impression that procurement or distribution /

logistics is what supply chain is all about. A clear domain specific thrust to develop supply chain professionals is

required which needs lots of industry – academic partnerships.

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Mr. Shardul Thacker, Partner, Mulla & Mulla & Craigie Blunt & Caroe, indicated during his presentation titled

“Booting out regulatory bottlenecks – fundamental to efficient SCM and Logistics” He says that regulatory

bottlenecks either slow movement adding transactional cost (usually regulatory or bureaucratic procedures), or

discourage growth that hinders freight movement in the supply chain (usually fiscal laws and regulations). He

broadly touched on the issues of how the Indian shipping companies have been burdened with taxes which has

stunted the growth of Indian Tonnage. He touched on the regulatory problems

created by Tariff Authority at Major Ports (“TAMP”) which burdens the growth of

private terminal operators at Major Ports as also the 13 Major Ports which has

adversely affected their growth and modernization plans. In contrast the private

ports where no tariff regulations apply and rates are market driven there is

tremendous efficiency due to growth and technology inputs. TAMP has not

benefited and should be scrapped, he said. Direct and indirect taxes make Indian

flag tonnage expensive in the context of the global shipping industry. Some

proposed solutions are: Market forces should determine tariffs based on demand

and supply conditions at the port and not TAMP. Minor Ports in Gujarat grew

because of operational freedom given by GMB, hence the same should be

granted to all the ports. JNPT is of the view that TAMP’s role should be limited to

standard setting and not tariff setting. Global practice regulatory authorities

should be established to avoid exploitation of customers by monopolistic forces

and not for regulation of business. As in Ennore Port, corporatization of ports should be implemented for better

management. Some of the salient points of the new tax programs for Indian flagged vessels are:

Corporate Tax on interest earned on Tonnage Tax reserved fund.

Minimum Alternate Tax (MAT) on profit of sale of vessels.

Dividend Distribution Tax

Withholding Tax on interest paid to foreign lenders

Withholding Tax on charter hire charges paid to foreign ship-owners

Seafarer’s Taxation-cost to employer.

Sales Tax/ VAT on ship supplies/ spares

Lease Tax on charter hire charges

Customs Duty on import of certain categories of ships, stores, spares & bunkers

Service Tax

He then brought out some of the benefits of lower tax burden on Indian shipping industry. According to Shardul,

it would help to lower the foreign exchange outflow of freight bill payments (this bill was USD 57 billion in

2013-14) to foreign shipping companies and this would result in an increase in GDP. It would reduce India’s

dependency on foreign ships, securing the procurement of India’s energy and food supply chain and acting as

a second line of defense to the Indian navy. Since half of the present Indian tonnage of 9.08 million tones is 20

years old, with an average of 17.5 years, 4 million tons need to be replaced. Additional 16 million new gross

tons would be required in the next 5 years to meet the growing EXIM trade. This opportunity is valued at USD

20 billion. Foreign funding would be simpler since Indian shipping companies can now own 50% of its tonnage

under foreign flag as foreign controlled tonnage.

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No easy solutions

While some of these are examples of what ails the Indian economy, this is not an exhaustive list. There are

several other equally compelling issues - many of them commonly known in the business community or academia

and easily understood - to be solved. However, this discussion would highlight the following: Urgent need for

reform, efficient and effective implementation of such policies, the need for self-certification and compliance,

removing from practice those policies that are dated and no longer relevant to a modern and growing economy.

India is at a point of achieving success it has denied itself all along. The policy makers have to realize it is no

longer an option to shy away from difficult but important decisions. The price of not doing this well would be

severe.

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Market Entry-The View from Outside India Speakers: Keiichi Higuchi, President, Rikuso Trans. Japan.

Rajesh Achanta, Director - Asia, Supply Chain, P&G.

Mark Khambatta, MD, SC Fulfil Consulting Pte., Singapore.

Rajeev Chadha, Country Manager, JDA.

Ani Agnihotri, Program Chair, US India Business Summit.

Moderator: Shantanu Bhadkamkar, MD, ATC Group.

Mr. Shantanu Bhadkamkar, the Managing Director of the ATC Group, and now the

current President of the Maharashtra Chamber of Commerce, Industry and Agriculture,

among other industry portfolios which he serves, in his own impeccable style moderated

this very exciting session which to all attendees. He gave an overview of the topic, its

relevance in today’ economy and governments priorities while giving a brief outline of

each of the panelist’s profile.

Mr. Keiichi Higuchi, President, KRT, Japan, spoke on the readiness

and the ease of doing business, for example if land is required for setting up business

here or to Make in India, where should a business person from outside go to? Which

authorities should he be meeting with? As there are so many entities, there needs to be

more clarity. While giving an overview of his solar powered temperature controlled

warehouses in Japan which is also the first and largest such facility with technical know-

how for specialized commodities like chocolates, he emphasized on the need of such

facilities in India. He mentioned such a facility is also subsidized by the government there

and his company like many in Japan believes in continuous improvement of facilities and

processes and ideas do come from employees working in the facility which they

implement.

Mr. Rajesh Achanta, Associate Director – Asia, P&G who is based in Singapore and

worked in almost 3 continents while with P&G, started his comments by giving a brief

overview of P&G operations, particularly in the Asian region. He focused on the

successful business and supply chain operations in India. P&G’s supply chain footprint

in India has expanded largely in the region he mentioned, and it has transformed

over the years from an ‘import supply chain’ to a manufacture and sell in India supply

chain. He said the Make in India initiative is good for the economy in general and

good for business from foreign companies. He particularly commented on two aspects

i.e. “Mindset” and “Leapfrogging” while referring to supply chain growth and

development in India. He said the mindset about supply chain has changed today. It

has progressed from just the “kicking boxes & licking labels” perception, taking the

supply chain profession to the next level. He mentioned that today the role we see is that which really impacts

the financial results of a company! Describing his experience in the three continents he has worked so far and

particularly referring to Asia, he said India has a complicated network with more warehouses than China but

less business volume than China, which means more cost for the Indian market. He also emphasized the need for

new supply chain skill sets, the need to use new technologies and data analytics and mentoring entrepreneurs

in these are to fuel innovation for the future.

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Mr. Mark Khambatta, MD, SC Fulfil Consulting Pte., Singapore started his dialogue

mentioning that India is now a land of opportunities with the new dimension of the

Make in India possibilities. He emphasized that particularly the young professionals

bring lot of value to the new supply chain development. He also said that with his

experience of more than 33 years in several countries he feels that there is a vibrant

feeling in India now.

Mr. Rajeev Chadha, Country Manager, JDA, with his vast experience in both service

and user side said that the initiative of Make In India is

tremendous and in fact should extended to Make In India and Make for the World. He

said that today we have to be competitive globally. He also emphasized that there is

now a need for us to “leapfrog”. Leapfrog in manufacturing as well as in supply chain

capabilities. On being asked about his experience with global companies as their

customers and the view from outside, he mentioned that the sense that he gets from his

global customers is that we will have to desist from trying to re-invent the wheel

altogether. Many countries have already identified the best practices and there is huge

merit in picking up some of these, and some of them could be implemented, particularly

through software solutions.

Mr. Ani Agnihotri, Program Chair, US India Business Summit mentioned that India should

not oversell itself with this initiative and narrated his experiences with various delegates

from USA and vice versa having difficulties in setting up business units in India. We

emphasized that we should focus on infrastructure and power issues, and said we are

definitely in the right direction.

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Feedback

“Like to congratulate SCM Programs for a great show and even more so considering it was the first one under a new

brand. The design of the program and the quality of speakers and their inputs was awe inspiring. Am convinced and

happily lend my support for whatever it is worth to the future initiatives of SCM Programs. Am confident that future

programs would see lot more delegates.” Nikhil Kush, DuPont.

"The Supply Chain 2015 event at Tata Theatre was witnessed and participated in by veterans across industry sectors,

academicians from India and top universities globally along with the future of Corporate India - the management

students. It will be incorrect if I do not make a mention of intellectual supply chain experience that was present in the

talented audience. ……all in all the cross- section of the dais and audience itself made it a unique combo. Further

the uniqueness got enhanced by setting the pace right on the zero day itself at the Talent Enclave for the next day’s

theme "Make in India". Some very positive and provoking discussions took place during the talent enclave on how do

we build the future talent to bridge the gaps between bookish theories and case studies v/s need of the Supply

Chain. The curriculum presented by overseas universities was well accepted in terms of the interface and the discipline

needed. The interaction with the bureaucrats was a good attempt which would see more interfaces in coming events.

The panels were apt in putting the Logistics past, present and the future. Some intelligent question also made the

panellist sit back and think before responding. Overall a great job has been done by India Supply Chain 2015 to

make a humble but smart beginning to set the ball rolling. Kudos to SCM Programs for thoughtful unique and most

participative and interactive event.” Hemant Kale, Yashodhan Consulting.

“As a first time visitor to India I was particularly impressed not just by the attendee’s grasp of what supply chain

management is really about but by the willingness to learn more and apply the knowledge gained. The overall

atmosphere was business-like but relaxed thereby minimising the learning barriers which perceived status and natural

reserve can construct at such events. I have three criteria for judging conferences:

1. In an academic sense it should allow me to acquire more knowledge through study and thought

2. In a business context it should enable me to acquire new skills or knowledge for the purpose of enhancing

performance

3. It should be enjoyable!

This event put a tick in all the boxes – my thanks and congratulations to Neil and his colleagues.” David MacLeod,

Learn Logistics, UK.

Conference Report

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2015 CONFERENCE PROMOTION

Conference Report

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