Cover November 2013 Pesting - Indian Institute of Port ... · PDF fileMaterials Management...

Materials Management Review 1November 2013

From the Desk of The National PresidentFrom the Desk of The National PresidentFrom the Desk of The National PresidentFrom the Desk of The National PresidentFrom the Desk of The National President

My Dear Readers,

Once again my best wishes for the ensuing Deepavali , a festivals of lights. The

significance of enlightenment over ignorance. This is celebrated all over the

country with great enthusiasm. New year too for few states.

Top retailers and brands register a 30% jump in festive season sales, attribute

surge to pent-up demand and hike in DA for Central Govt. Employees. Consumer

demand a relief for retailers after Lukewarm sales last month. Another happy news is that the trade

deficit has narrowed down significantly due to export growth and reduced oil and gold imports.

However, no cheer for carmakers as the slide continues.

On line retailing has created a wave of opportunity for young ventures offering services ranging from

warehousing and inventory management to logistics and data analytics for e- commerce portals.

Flipkart is the one retailer who has built it's own supply chain and logistics infrastructure, following

global retailing behemoth Amazon's strategy. Current Re. 10k crore on line industry is expected to

touch Re.1.2 Lakhs crore by 2020. Walmart and Bharathi have divorced, both of them are expected to

scale up both retail and whole sale cash and carry business. Govt. Is now looking towards TESCO for

multi brand retail stores.

Planning Commission Dy. Chairman, Mr. Montek Singh Ahluwalia, has said the worst is over for the

rupee and the fair value for the currency could be between 60 and 65 against US Dollar.

Indian Govt. Has rejected IMFs revised growth forecast for the year that sees world economic dropping

to its lowest since the global financial crisis. IMF has said that India will grow only 3.8% in the 2013-14

financial year against 5.6% projected earlier. IMF expects global growth at 2.9% in 2013. Planning

commission has termed the projection as pessimistic and said that there are every sign of improvement

and that Indian economy will grow at a rate higher than 5% in this financial year. The US shut down may

have impact on India and global economy.

I am browsing all these issues since Supply Chain Management is deeply affected by these

developments. Retail and whole sale business is predominantly Supply Chain. The changes are highly

dynamic and IIMM fraternity need to quickly respond and get the skill required to manage in such

adverse environment. More importantly our Education as well as Training should orient to the

changes and the Branches to be pro active in organizing training programs to Industries in their areas.

Otherwise we lose to our professional competitors. This reminds me a famous saying which says. "I

AM CONVINCED THAT IF THE RATE OF CHANGE INSIDE THE INSTITUTION IS LESS THAN THE RATE OUTSIDE,

THE END IS IN SIGHT " JACK WELCH.

Election of NEC for the new term is round the corner and my best Wishes for all the aspirants who want

to take different positions of leadership.

With warm Regards

C. Subbakrishna

National President

[email protected]

Materials Management Review2 November 2013

From the Desk of Editor-in-ChiefFrom the Desk of Editor-in-ChiefFrom the Desk of Editor-in-ChiefFrom the Desk of Editor-in-ChiefFrom the Desk of Editor-in-Chief

Retail Sector is one of the pillars of India’s Economy and accounts for 15% of GDP andemploys almost 40 million Indians. The current estimated value of the Indian retail sector isabout 500 billion USD and is pegged to reach 1.3 trillion USD by 2020, making it the favoritedestination for investments with 1.2 billion people base.

Whenever we think of Retail, Local corner shops, owner manned general stores, convenience stores etc. automaticallycome to our mind but retail is much more than that. It includes forecasting, procurement, supply chain management,inventory management, personnel management, marketing & distribution channels etc.

Indian market being highly complex and wide spread with poor infrastructure, needs retailing in organized mannerto minimize losses and enhancing competition. So far, Indian retailing has been dominated by the intermediariesand middlemen who tend to flout norms and violate pricing policy. Indian farmers only get 1/3 of the price paid byconsumer as against 2/3 by farmers in nations with higher organized retailing. The 50-60% margin for middlemenand traditional retail shops have limited the competition & innovation in Indian Retail industry and may blamedfor high food inflation rate.

India in dire need of FDIs, recognizes the potential in retail sector and thus has liberalized its retail policies. InNovember 2011, Central Government of India announced retail reforms for both multi-brand stores and single-brand stores. To attract more investments, increasing competition & innovation in single brand retail, India furtherliberalized its retail policy to 100% ownership in Single Brand Retail but with a condition to procure 30% of itsgoods from India over a initial period of five years and then on annual basis. A 51% hold of foreign groups in MultiBrand retail is also an important move subject to prior approval from concerned states.

FDI in retail sector will not only provide stability to gloomy Indian economy but will also provide employmentopportunity to millions of Indians. The retail reform will reduce waste by improving logistics, creating cold storageto prevent food spoilage and create dependable supply chains for secure supply of goods from producer toconsumer. They will increase choice and reduce India’s rampant inflation by reducing waste, spoilage and cuttingout middlemen. Organized retail will offer more options to small Indian farmer, more competition and qualitywhile reducing prices to help fight inflation.

Inspite of having been one of the favorite destinations for investments in retail, India so far have not received asingle application in Multi Brand segment. Onerous conditions and lack of clarity in retail policy seems to be adampener. Key issues like minimum investment of US$100 million, of which 50% needs to be in back-endinfrastructure; 30% of products must be sourced from small enterprises; and retail outlets can be set up only incities with a population of over one million etc. are drawing sharp criticism from international retailers and needsto be clarified.

Under pressure from international retailers, the government might soon amend the foreign direct investment (FDI)policy on multi-brand retail trading (MBRT) by easing some conditions like opening of retail outlets in cities withpopulation of less than 1 million. Govt. has also eased rules in many sectors like defense & telecommunications.In most sectors, the simplification will allow companies to inform the government after investment instead ofgetting the proposal approved by the Foreign Investment Promotion Board. The department of Industrial Policy &Promotion (DIPP) also clarified that retailers can now source goods from medium, small and micro enterprises,where the investment cap will be $2 million instead of the earlier ceiling of $1 million to comply with the requirementof sourcing at least 30% goods from small vendors.

Indian Government may further introduce some lucrative offers like barring the state restriction, simple & easyprocedures, avoiding cumbersome taxation structure etc. to foreign retailers to lock the untapped potential inretail sector. We wish, debate over FDI in retail sector get over soon and India should welcome new era of retailingwith lot of opportunities.

(M. K. BHARDWAJ)


MATERIALS MANAGEMENT

REVIEW

Volume 10 - Issue 1 (November 2013)

C O N T E N T S

� WHERE HAVE WE REACHED? WHERE ARE WE HEADED? 4

� COMMODITY INDEX 5

� COORDINATED SUPPLY CHAIN: A KEY FOR THESUCCESS OF SMEs 6

� YOU DON’T GET WHAT YOU DESERVE, YOU GET WHAT YOUNEGOTIATE 12

� DEPRECIATION IN RUPEE-CAUSES, IMPACTAND THE WAY AHEAD 16

� ROLE OF MATERIALS MANAGER TO COMBAT CURRENTACCOUNT DEFICIT, INFLATION AND RUPEE DEPRECIATION 19

� FUTURE OF SUPPLY CHAINS – LEAN AND AGILE 23

� SUSTAINABLE MATERIAL MANAGEMENT IS NEED FORTODAY 30

� REPORT ON WORLD CONGRESS 32

� ENHANCE IIMM BRAND IMAGE THROUGH SOCIAL MEDIA 33

� VIBRANT ROLE OF SUPPLY CHAIN MANAGERS, TOCOMBAT WITH DOWNGRADE GLOBAL ECONOMICCIRCUMSTANCES; AN INNOVATIVE APPROACH-TOWARDS INDUSTRIAL AND SERVICE EXCELLENCE 34

� TRADE MANTHAN NEW OPPORTUNITIES IN LOGISTICS 38

� OMNI CHANNEL FULFILLMENT – CHALLENGES ANDOPPORTUNITIES 39

� CURRENCY EXCHANGE RATES 43

� BRANCH NEWS 44

� EXECUTIVE HEALTH 56

PAGE NO.

IIMM is a charter member ofInternational Federation ofPurchasing & Supply Management

Editor in Chief & Publisher:Mr. M. K. BhardwajPast President, IIMM &Former Director Ministry of Defence

Core Committee :Mr. Ashok Sharma, President 5M IndiaMr. V. K. Jain, Former ED, Air IndiaMr. Tej K Magazine, Management Advisor

Editors :Mr. L.P.Patel, Sr. Vice PresidentMr. T.G.Nandakumar, VP (North)Mr. N.K.Kabra, VP (East)Mr. Anant Kembhavi, VP (West)Mr. N. Udaya Bhanu, VP (South)Mr. Madhu Sudan Pathak, VP (Central)Mr. O.P.Longia, NS&TMr. Suresh Kumar Sharma, IPPProf.(Dr.) V. K. Gupta - IMT, Ghaziabad

Correspondence :MATERIALS MANAGEMENT REVIEW

Indian Institute of MaterialsManagement4598/12 B, Ist Floor, Ansari Road,Darya Ganj, New Delhi - 110 002.Phones : 011-43615373Fax: 91-11-43575373E-mail: [email protected] &[email protected] : iimm.org

Printed at :Power Printers,4249/82, 2 Ansari Road, Daryaganj,New Delhi - 110002

Edited, Printed & Published by :INDIAN INSTITUTE OF MATERIALS MANAGEMENT4598/12 B, Ist Floor, Ansari Road, Darya Ganj, New Delhi - 110 002.Phones : 011-43615373 Fax: 91-11-43575373E-mail: [email protected] & [email protected] : iimm.org

(Published material has been compiled from several sources, IIMM disowns any responsibilityfor the use of any information from the Magazine if published anywhere by anyone.)


As India completes another year of

Independence, we must reflect on our

roadmap for development and set ourselves

towards a new vision. What can our nation become,

75 years after gaining freedom? What will India@75

look like?

India@75 was a term coined by late Prof CK Prahalad,

world renowned thinker and professor of strategy at

Ross School of Business, the Michigan University, in

2007 as India was celebrating 60 years of freedom.

Instead of lauding the achievements of the country in

the previous six decades, Prof Prahalad asked the

audience of overseas Indians in New York what we could

achieve by the 75th year of independence i.e. in 2022.

It was a speech that changed the way we perceived

our future.

First, he said, our aspirations should not be constrained

by available resources but need stretch targets. Two,

to bridge the gap, we need to innovate and identify

‘next practices’ as just emulating ‘best practices’ would

hardly suffice given the short deadline. But how should

we develop these next practices? A ‘sand box filter’

sets the limits to any action. Each one of our initiatives

would need to meet six parameters – it should be

globally scalable to impact a variety of income and

social groups; it must be environmentally sustainable;

it must be financially affordable to serve people at the

bottom of the pyramid; it would promote transparent,

fair and market based actions; it would focus on social

equity focus i.e. be non-discriminatory; and it must

support the individual’s right as enshrined in the

Constitution of India.

This vision of India@75 was distilled into a single mission

statement: “To have an India that will actively shape

the new world order through economic strength,

technological vitality and moral leadership”.

WHERE HAVE WE REACHED?

WHERE ARE WE HEADED?

The India@75 initiative is working with the Planning Commission

for developing the India Backbone Implementation Network

ADI GODREJ, IMME. PAST PRESIDENT CII

& CHAIRMAN INDIA@75 FOUNDATION

In order to validate the vision, Confederation of Indian

Industry undertook a massive visioning exercise in 2008,

using collaborative public reasoning processes that

engaged 6000 people in 21 states, including

bureaucrats, politicians, farmers, academicians,

students, NGOs, self-employed people, housewives etc,

across the social, economic and geographical spectrum.

The vision document thus collated was titled ‘India @

75 – the People’s Agenda’.

Youth comprises 65 per cent of our population, a

demographic profile that is bestowed by nature to a

country once in its experience. So at the heart of the

India@75 vision is creating an ecosystem for channeling

the power of youth in national development through

volunteerism or building a volunteer youth force that

will work on achieving the vision.

Seven key pillars stand at the center of our aspirations

and these are being activated through a structured

and targeted program that enfolds all stakeholders.

Skills and education: We will have 500 million certified

and skilled technicians, the world’s largest pool of

trained manpower, and 200 million college graduates

by 2022. This target has since been adopted by

Government of India. The National Skill Development

Corporation is an innovative public private partnership

and will encourage corporate participation in training

for marketable skills.

Urbanization and environmental sustainability: Our

aim is to have 500 world-class developed cities through

planned urbanization; at the same time,we wish to see

India becoming a global benchmark for sustainable

development and environmental conservation.

Friendly, open cities that encourage people-to-people

interaction can be developed through better mass

transportation, pedestrian and cycle tracks, parks etc.

Our cities will care for people across gender, age,


religion, social and economic backgrounds.The citizenry

will have a sense of ownership and will be ready to

collaborate and participate in the planning process.A

consensus will be evolved for creating a middle path

between development and environmental

sustainability.

Good governance and public administration:We aspire

for an India that becomes the new moral voice for

people around the world, a country where universality

and inclusiveness is widely practiced. Our capacity to

accept and benefit from diversity will be globally

respected and emulated.Transparent, accountable and

efficient public administration will be available to all

Indians. Our youth, which is our core strength, will be

fully alive to challenges and more informed than ever,

driving the rise of a new India.

Business and economic strength: In 2022, we aim to

see that India becomes home to at least 30 of the

Fortune 100 firms, accounts for 10 per cent of global

trade, and unleashes the entrepreneurial spirit of its

young population. Indian companies will become global

benchmarks for ethical governance and Corporate Social

Responsibility (CSR). All these can be achieved by

supporting and incentivizing sectors where India has

competitive advantage including manufacturing,

services, and others. Indian companies will be

encouraged to adopt a‘3P’ balance sheet for Profit,

People and Planet.

Technology and innovation: At 75, India will become

a source of global innovations for new businesses, new

technologies and new forms of businesses; it will focus

on the bottom of the pyramid and create leaders in

health, education, energy, transportation and

sustainable development for all.

Agriculture, food security and health: India by 2022

should have a renewal of agriculture to achieve world-

class productivity levels with every Indian having access

to balanced nutrition and affordable, well-equipped and

serviceable healthcare.There is tremendous scope for

boosting our agricultural output and bringing prosperity

to the rural economy by focused and sustained efforts

towards improving our rural infrastructure.

Arts, sports and literature: By 2022, India should have

a flowering of arts, science, sports and literature,

creating several Nobel Prize winners. For this, we would

need world-class infrastructure besides identifying

talent from the grassroots levels through inclusion of

arts, sports and literature in education.

How will we do all this? Apart from building a volunteer

force, the India@75 initiative is working with the

Planning Commission for developing the India Backbone

Implementation Network (IBIN). The idea is to improve

coordination by creating consensus, converting

“confusion to coordination, contention to collaboration

and intentions to implementation”. 2022 is not far off.

Our renewed tryst with destiny requires a strong vision

for the future of our nation towards which we can work

as one.

��

COMMODITY INDEX

Commodities Days’s Index Prev. Index Week Ago Month Ago

Index 2540.4 2533.5 2521.9 2553.0

Bullion 5395.1 5332.1 5273.5 5466.8

Cement 1748.2 1748.2 1774.8 1508.7

Chemicals 2007.7 2007.7 2007.7 1965.6

Edible Oil 1450.1 1461.8 1435.1 1414.5

Foodgrains 2136.3 2136.1 2128.2 2131.4

Fuel 2331.6 2331.6 2331.6 2361.8

Indl Metals 1744.8 1744.8 1740.5 1808.6

Other Agricom 1970.8 1961.2 1957.2 2043.9

Plastics 2115.7 2131.0 2124.2 2239.8

Source: ETIG Database dated 21st October, 2013


COORDINATED SUPPLY CHAIN:A KEY FOR THE

SUCCESS OF SMEs

Y. RAMAKRISHNA, ASSOCIATE PROFESSOR,

VJIM, HYDERABAD

[email protected]

DR. M. S. BHAT, DIRECTOR (RETD.), JNTU, HYDERABAD

DR. SINDHU, ASSOCIATE PROFESSOR, JNTU, HYDERABAD

ABSTRACT : Overall objective of any supply chain

practice in SMEs is to improve the Total Supply Chain

Profit. Along with managing the supply chain drivers

efficiently, it is very essential for SMEs to improve the

coordination among different entities and stages involved

in supply chain. Supply Chain coordination improves if all

stages of the chain take actions that together increase

total supply chain profits. It requires a coordinated effort

and study of impact of actions that take place at one

stage on every other stage of the supply chain. Large

scale organizations handle the issues related to supply

chain coordination through the implementation of IT

systems and software for information sharing across the

chain. But for most of the SMEs, IT implementation is a

challenging task in terms of cost and utilization, given the

size of the organization. This conceptual research paper

aims to study different strategies and frameworks

available for SMEs to improve their supply chain

coordination through a thorough literature review and

published cases. This would help SMEs in India to update

their existing strategies in supply chain coordination.

INTRODUCTION : SCM is management of upstream anddownstream relationships with suppliers andcustomers to deliver superior customer value at lessercost to the chain as a whole (Martin Christopher, 1992).SCM constitutes a set of approaches utilized to efficientlyintegrate suppliers, manufacturers, warehouses, andretailers, so that merchandize is produced anddistributed in the right quantities, to the right locations,and at the right times, in order to minimize system-widecosts while satisfying service level requirements(Simchi-Levi et al., 2000). SCM is equally important forSMEs as it is important for large scale enterprises.Micro, Small and Medium Enterprises (MSMEs) play avital role in the growth of the Indian economy. Theycontribute 45% of industrial output, 40% of exports,employ 60 million people, create 1.3 million jobs everyyear and produce more than 8000 quality products forthe Indian and international markets. MSMEs’contribution towards GDP is expected to increase to22% by 2012. Indian MSMEs like their counterparts indifferent parts of the world have shown tremendous

agility, responsiveness and flexibility in dealing withfluctuating business cycles. (CII Report on MSMEs,2011).

Objective and Research Methodology : The objective ofthe study is to identify the need and importance,attributes, strategies and frameworks of supply chaincoordination in SMEs. The study is purely based on athorough literature survey covering research articlespublished in leading national and international articlesrelated to the above objective. The paper is organizedinto three different sections. The first section focuseson the definition, need and importance of coordinatedsupply chains in SMEs. The second section focuses ondifferent attributes and areas / scope for coordinationin SMEs. The third section focuses on strategies andframeworks developed by different authors for effectiveand successful coordination in supply chain for SMEs.The analysis is presented in the form of tables byproviding summary for each section.

Supply Chain Coordination in SMEs : Supply ChainManagement in SMEs includes the linkage amongupstream activities like supply and manufacturing anddownstream activities like logistics and distribution.Coordination among the upstream and downstreamactivities adds value to the product or service in SMEs.SCM requires cooperation and coordination betweencompanies’ business operations in supply chains ((Xuet al., 2001). It is observed that SMEs in general are notable to implement supply chain coordination to its fullextent, mainly because they are managed at arm’s lengthby larger customers and have to follow the normsstipulated by the buyer (Arend and Wisner, 2005). Supplychain is completely coordinated when all systems,activities and decisions are integrated and aligned toachieve the overall organizational objectives andsupply chain objectives on whole (Sahin and Robinson,2002). Supply Chain Coordination improves if all thestages of the chain take actions that together increasetotal supply chain profits. Supply chain coordinationrequires each stage of the supply chain to take intoaccount the impact its actions have on other stages(Sunil Chopra, 2008). There exists a lack of coordination


in supply chain due to conflicting objectives of thedifferent entities (for example, the supplier,manufacturer, wholesaler and retailer) of the chain andtime delay in the movement and sharing of informationacross the chain (Chopra and Meindl, 2009). Due tothis, the stocking level variability in supply chains tendto be distorted as it is moved upstream in the supplychain (Towill, 1996). The variance of orders may be largerthan that of sales and the distortion tends to increaseas one moves upstream in the supply chain.

This phenomenon is referred to in literature as the“bullwhip effect” (Chen et al., 2000). Fluctuations inorders increase as they move up the supply chain fromretailers to wholesalers to manufacturers to suppliers(Chopra, 2011). In fact, practitioners and consultantshave striven to deal with the bullwhip effect, e.g. in theautomotive, textile, and retail industries. Severalauthors have tried to explore the reasons and factorscontributing to the bullwhip effect. Majority of theauthors found it to be due to fluctuations in the inter-organizational stocking levels. Recently, it has also beenexplored within intra-organizational stocking levels. Adescriptive framework was developed, which positionsthe bullwhip effect construct in intra- and inter-organizational, as well as intra- and inter-channel,stocking levels in and between value chains and valuesystems (Goran Svensson, 2005). Terms like integration,collaboration, cooperation and coordination arecomplementary to each other in a supply chain as theyconsist of similar elements (Arshinder and Deshmukh,2008). According to Arshinder et al. (2007),collaborative decision making in SCM helps to reduceinformation asymmetry, reduces inventory cost,improves the customer service and improves theefficiency of replenishment process.

Attributes of Supply Chain Coordination: Severalauthors have tried to identify the major areas in SupplyChain where the coordination can happen in SMEs.Coordination of widely spread decision making oforganizations or participants or entities of supply chainon product flow, material flow, information flow, humanflow and cash flow in supply chain from systemsperspective was studied (Xue et al., 2005). Rajesh K.Singh (2011) identified and categorized 32 attributes ofcoordination and responsiveness based on literaturesurvey for SMEs. They are classified into six majorgroups. They are, Top management commitment,Organizational Factors, Mutual understanding, Flow ofInformation, Relationship and Decision-making Factorsand Responsiveness Factors. Umit S. Bititci (2004)developed a model for value creation in collaborativenetworks of supply chain by identifying two types ofvalues, internal value (shareholder value) and externalvalue (value proposition). Sander de Leeuw, 2009identified that close supply chain collaboration isinfluenced by multitude of factors. The study identifiedthree major drivers of close supply chain collaborationwhich are also appropriate for SMEs. These drivers are

i) Market Characteristics, ii) Product Characteristicsand iii) Partner Characteristics. This study concludedthat collaborative initiatives are predominantlyinitiated with suppliers and not with customers, andthat close supply chain collaboration may lead to inertiain business relations. Buyers and suppliers emphasizenot only quality and delivery but also the adjustment oftheir competitive strategies and organizational cultures(Pressey et al., 2007).

The modern purchasing function also emphasizesstrategic purchasing and the fit between the two partiesin terms of aptitude, approach and shared values/business philosophy. These criteria are the referencefor managers to identify which firms they can work with(Axelson and Wynstra, 2002). SMEs should establishefficient systems of communication (e.g. simplifyingdecisions of buying, making the reception of goodseasier, and minimizing operational costs for both thefirm and suppliers). Communication allows the supplierto know the buyer’s needs, permits the buyer to identifythe supplier’s capabilities, and enables both agents tomatch their business philosophies (Victoria Bordonaba-Juste, 2009). At the operational level, informationinterchange systems will be more efficient when thetransmission of information is relevant and timely(Taylor and Fearne, 2006). For the understanding ofsupply-chain management practices, there are threeareas to be focuseds: They are internal operations (IO),suppliers (RS) and relationships, with customers (RC)within a supply chain, collective efficacy (CE) with IOand schedule nervousness (SN) with IO, RS, and RC(Kongkiti Phusavat, 2010).

Blili and Raymonds (1993) identified the need andusefulness of information systems strategies (ISS) insmall and medium sized enterprises (SMEs). Theyproposed an ISS methods for SMEs based on experiencesfrom large enterprises and focus on introduction of ITinto SMEs to create strategic advantage. Milind KumarSharma, Rajat Bhagwat, (2006) identified 15 issues inSMEs in which coordination can be achieved by theeffective implementation of Information Systems. Theyare, connectivity, integration, information sharing, realtime data transfer, quick response technology, flexibility,responsiveness, product customization, crossfunctionality, manufacturing strength, Informationtechnology, bull whip effect of information, electronicdata interchange, order tracking and ERP/ SCM Software.Vertical Integration, Trust, Sensitivity to supply, Expectedcommunication, Organizational Culture, Time Frameand Relationships, Problems when entering into long-term relationships, Use of IT, Supplier Selection, Attitudetowards strategic planning, Formulative strategy,Development of logistics, Nature of workflow have beenidentified as major Supply Chain Issues in Indian SMEs(Jitesh Thakkar, 2012).

Supply chain coordination happens only when physicalflow, information flow, and financial flow are


synchronized (Chandrasekharan, 2012). Physical flowmanagement includes receiving of order to supply ofgoods and services to a customer. This integrates ordermanagement with distribution manufacturing andprocurement functions. Integration of financial flowwith information and physical flow is critical. Unlessthe information system captures product movement andconfirms that same to the funder, fund releases cannotbe done on time. Financial flow includes, receipt oforder, funding from own and bank, procuring materials,manufacture-own and outsourced, delivery to buyer,banker receiving buyer confirmation, receipt of balancepayments, balance payments to creditors. Technologyplays an important role in managing financial flows asthe implementation of ERP provides visibility acrossdepartments and allows the partnering organization tomonitor critical financial chocking points and escalateacross decision hierarchy to streamline the flow.

Chopra and Meindl, (2012) have identified that lack ofsupply chain coordination can lead to Increasedmanufacturing cost, inventory cost, Replenishment leadtime, Transportation cost, Labor cost for shipping andreceiving, decrease in level of product availability,relationships across the supply chain, decrease inoverall profitability. They (Chopra and Meindl, 2012)also identified major obstacles to coordination in asupply chain. Some of them are, sales force incentiveobstacles, Information processing obstacles, lack ofinformation sharing, Operational obstacles, pricingobstacles and behavioral obstacles.

Strategies to improve Supply Chain Coordination: Chopraand Meindl, 2012 have emphasized that buildingstrategic partnerships and trust within a supply chainis essential for SMEs to achieve sustainability andsuccess. A trust based relationship between two stagesof a supply chain includes “dependability” of two stages,and the ability of each stage to make a “leap of faith”(Kumar, 1996). Steps in designing a relationship withcooperation and trust include, assessing the value ofthe relationship, identifying operational roles anddecision rights for each party, creating effectivecontracts, designing effective conflict resolutionmechanisms. Chopra (2012) has identified strategieslike quantifying the bullwhip effect, getting topmanagement commitment for coordination, devotingresources to coordination, focusing on communicationwith other stages, trying to achieve coordination in theentire supply chain network, using technology toimprove connectivity in the supply chain, sharing thebenefits of coordination equitably for smooth andeffective supply chain coordination in SMEs.

Chopra, (2012) also added that aligning of goals andincentives, improving information accuracy, improvingoperational performance, designing pricing strategiesto stabilize orders, building partnerships and trust arethe management levers to achieve supply chaincoordination in SMEs. A coherent supply chain strategy

consisting of information exchange and structuralcollaboration with suppliers and customers is avaluable approach for reaching world-class operationalperformance (Vereecke and Muylle, 2006). A compositeframework of supply chain management and enterpriseplanning for small and medium sized manufacturingenterprises is developed by Neil Towers (2010). N. Kumar(1996) developed a framework on the effect of inter-dependence on supply chain relationships.

Bretherton and Chaston (2005) reviewed a number offactors that are seen as essential in the creation,management and maintenance of a collaborativearrangement and concluded that commitment betweenmembers of the supply chain is seen as one of theessential ingredients of trust. A conceptual roleinteraction model for supply chain management in SMEsis developed by Jitesh Thakkar (2008). Various roles insupply chain are identified and a role interaction modelwas developed with its 13 combinations to gain insightsinto the supply chain management issues of SMEs inthis study. Petersen et al. (2005) found that capabilitiesof suppliers are required in coordinating the productdesign process with supplier. The coordination atdesign stage may result in better design and improvedfinancial performance, if the supplier has sufficientknowledge for design of the product. The factors ofcoordination in supply chain of SMEs likecommunication with manufacturer and a goodorganizational culture of supplier also play importantrole while coordinating with manufacturer (Arshinderet al., 2008). In SCM, organizations said to be effectivein their coordination put a lot of emphasis ondeveloping their human resources through training oftheir employees (Gowen and Tallon, 2002).

Integration of supply chain activities result in bettercoordination. Lee (2000) offers concept of supply chainintegration, comprising various levels such asinformation sharing, coordination and organizationallinkages. Hong (2006) developed four growth paths forSMEs. They are efficiency to collaboration path,efficiency to coordination path, coordination toinnovation path, collaboration to innovation path.Soroor et al. (2009) and Sawik (2009) have observedthat coordination plays a critical role in integratingdifferent departments in an organization along thesupply chain to enhance performance. Coordinationcan be achieved by the integrated scheduling ofmanufacturing and suppliers of raw materials andassembly of finished products. According to Cao et al.(2008), supply chain coordination encompasses everyeffort of information exchange and integration duringthe courses of developing, producing and delivering aproduct or service to end marketplaces. Ryu and Yucesan(2010) have observed that coordination is possible onlyby allowing returns to all supply chain members.

Konijnendijk (1994) examined the coordination processat tactical and operational levels about product


specification, volume, mix and lead times between salesand manufacturing in engineer-to-order Company. Stanket al. (1999) have observed that inter firm coordinationprocess is characterized by effective communicationsystem, information exchange, partnering andperformance monitoring. Technology is found to be oneof the effective strategies in achieving coordination insupply chain by SMEs. Three levels of complexity andorganizational change were identified by Tanmoy Nath(2010). The first level (low) involves a less complex useof IT that is driven through a desire to reduce costs. Thedrivers are cost reduction, reduced lead and cycle times,increased operational capability and informationquality improvement.

The second level (medium) involves a medium level ofcomplexity that is characterized by networking andcollaboration. The drivers are better relationships andinformation accessibility. Level two requires the driversfor level one. The most complex level is aimed atorganizational transformation. The drivers are market

sharing expansion, risk sharing and reduction, highquality service and better decision making. Level threealso requires the drivers for levels one and two (TanmoyNath, 2010). Cambra and Polo (2008a) proposed ideasabout communication, which emphasizes on facilitatinga flow of bidirectional communication, transmittinguseful and suitable information and promoting feedbackto adapt the relationship to the needs and expectationsof the agents and to any changes that occur during therelationship.

Analysis and Conclusions : The thorough literature reviewenabled the author to categorize and summarize theattributes of supply chain coordination in SMEs in Table-I. The areas in which supply chain coordination can beachieved ranged from top management commitment tomutual trust and information sharing. Many authorsconcluded that relevant and timely information sharing(Taylor, 2006) is an essential pre-requisite and attributefor supply chain coordination.

Areas of Coordination Author

Top Management Commitment, Organizational Factors, MutualUnderstanding, Flow of Information, Relationship and Decision-making,Responsiveness Rajesh K. Singh, 2011

Internal Values and External Values Umit S. Bittici, 2004

Market, Product and Partner Characteristics Sander de Leeuw, 2009

Aptitude, Approach, Shared values / Business philosophy Axelson and Wynstra, 2002

Simplification of Communication Victoria Bordonaba, 2009

Relevant and timely information sharing Taylor, 2006

Internal Operations (IO), Relationship with Suppliers (RS), withCustomers (RC), Collective Efficacy (CE) Kongkiti Phusavat, et. Al 2010

Connectivity, Integration, Information Sharing, Real time data transfer,Quick response technology Milind Kumar Sharma, 2006

Vertical Integration, Trust, Sensitivity to supply, Expected communication,Organizational Culture, Time Frame and Relationships, Problems whenentering into long-term relationships, Use of IT, Supplier Selection,Attitude towards strategic planning, Development of logistics,Nature of workflow Jitesh Thakkar

Physical flow, Information flow and Financial Flow Chandrasekharan, 2012

Table-I Summary of Supply Chain Coordination Attributes for SMEs

In Table-II below, a summary of different strategies and frameworks developed by various authors is presented ina chronological order. The strategies in supply chain coordination in SMEs broadly vary from internal factors toexternal factors and information sharing across supply chain to managing organizational to improve the levels ofcoordination.

Strategies of Supply Chain Coordination Author

Coordination at tactical and operational levels about productspecification, volume, mix and lead times between sales andmanufacturing. Konijnendijk, 1994

Assessing the value of the relationship, identifying operational rolesand decision rights for each party, creating effective contracts,designing effective conflict resolution mechanisms. Kumar, 1996


Effect of Interdependence on Supply Chain relationships Kumar N. 1996

Effective communication system, information exchange, partneringand performance monitoring. Stank et al., 1999

Supply chain integration through information sharing, coordinationand organizational linkages. Lee, 2000

Training of Human Resources (Employees) for supply coordination Gowen and Tallon, 2002

Product Design Coordination with suppliers Petersen et al. (2005)

Commitment between members of the supply chain is essentialingredient of trust for creation, management and maintenance of acollaborative arrangement Bretherton and Chaston (2005)

Efficiency to collaboration path, efficiency to coordination path,coordination to innovation path, collaboration to innovation path. Hong, 2006

Information exchange and structural collaboration with suppliersand customers Vereecke and Muylle, 2006

Development of Role Interaction Model for Supply chain in SMEs JItesh Thakkar, 2008

Communication with manufacturer and a good organizational cultureof supplier Arshinder et al., 2008

Information exchange and integration during the courses ofdeveloping, producing and delivering a product or service to endmarketplaces. Cao et al, 2008

Flow of bi-directional communication Cambra and Polo, 2008a

Integrated scheduling of manufacturing and suppliers of raw materialsand assembly of finished products. Soroor et al. (2009) and Sawik,2009

Allowing returns to all supply chain members. Ryu and Yucesan, 2010

Composite Framework of SCM for SMEs Neil Towers, 2010

Three levels of complexity and organizational change Tanmoy Nath, 2010

Quantifying the bullwhip effect, top management commitment forcoordination, devoting resources to coordination, focusing oncommunication with other stages, achieving coordination in theentire SC network, using technology to improve connectivity in thesupply chain, sharing the benefits of supply coordination in SMEs Chopra and Meindl, 2012

Aligning of goals and incentives, improving information accuracy,improving operational performance, designing pricing strategies tostabilize orders, building partnerships and trust are the managementlevers to achieve supply chain coordination in SMEs Chopra and Meindl, 2012

Building strategic partnerships and trust Chopra and Meindl, 2012

Table-II: Strategies of Supply Chain Coordination for SMEs

Thus, it can be concluded that coordinated supplychains in SMEs improve the overall efficiency,sustainability and profit of SMEs if the areas ofcoordination as mentioned in Table-I are identifiedappropriately and suitable strategies as mentioned inTable – II are adapted.

REFERENCES:

Arend, R.J. and Wisner, J.D. (2005), “Small business andsupply chain management: is there a fit?” Journal ofBusiness Venturing, Vol. 20 No. 3, pp. 403-36.

Arshinder, K.A. and Deshmukh, S.G. (2007), “Supply chaincoordination issues: an SAP-LAP frame work”, Asia

Pacific Journal of Marketing and Logistics, Vol. 19 No.3, pp. 240-64.

Arshinder, K.A. and Deshmukh, S.G. (2008), “Supply chaincoordination: perspectives, empirical studies andresearch directions”, International Journal ofProduction Economics, Vol. 115, pp. 316-35.

Axelson, B. and Wynstra, F. (2002), Buying BusinessServices, John Wiley, Chichester.

Blili, S and Raymonds, L. (1993), “Informationtechnology: opportunities and threats for small andmedium sized enterprises”, International Journal ofInformation Management, Vol. 13, pp. 439-48.

Bretherton, P. and Chaston, I. (2005), “Resourcedependency and SME strategy: an empirical study”,Journal of Small Business and Enterprise Development,


Vol. 12 No. 2, pp. 274-89

Cao, N., Zhang, Z., To, K.M. and Ng, K.P. (2008), “How issupply chains coordinated? An empirical observationin textile-apparel business”, Journal of FashionMarketing & Mgmt, Vol. 12 No. 3, pp. 384-97.

Cambra, J. and Polo, Y. (2008a), “Creating satisfactionin the demand-supply chain: the buyers’ perspective”,Supply Chain Management: An International Journal,Vol. 13 No. 3, pp. 211-24.

CII Report on MSMEs, 2011

Chandrasekharan, 2010, “Supply Chain Management –Process, System and Practice”, Oxford University Press

Göran Svensson, (2005),”The multiple facets of thebullwhip effect: refined and re-defined”, InternationalJournal of Physical Distribution & LogisticsManagement, Vol. 35 Iss: 10 pp. 762 – 777

Gowen, C.R. and Tallon, W.J. (2002), “Enhancing supplychain practices through human resource management”,Journal of Management Development, Vol. 22 No. 1, pp.32-44.

Hong, P. and Jeong, J. (2006), “Supply chain managementpractices of SMEs: from a business growth perspective”,Journal of Enterprise Information Management, Vol. 19No. 3, pp. 292-302

Jitesh Thakkar, Arun Kanda, S.G. Deshmukh,(2012),”Supply chain issues in Indian manufacturingSMEs: insights from six case studies”, Journal ofManufacturing Technology Management, Vol. 23 Iss: 5pp. 634 - 664

Kongkiti Phusavat, Pekka Kess, Kris M.Y. Law, RapeeKanchana, (2010) “Sustaining effective business valuechain: future challenges”, Industrial Management & DataSystems, Vol. 110 Iss: 8, pp.1176 - 1191

Konijnendijk, P.A. (1994), “Coordinating marketing andmanufacturing in ETO companies”, International Journalof Production Economics, Vol. 37 No. 1, pp. 19-26.

Kumar (1996), “The power of trust in manufacturer –retailer relationships”, Harvard Business Reivew, 92-10

Lee, H.L. (2000), “Creating value through supply chainintegration”, SCM Review, Vol. 4 No. 4, pp. 30-6.

Martin Christopher and Matthias Holweg (2011),“Supply Chain 2.0: managing supply chains in the eraof turbulence”, International Journal of PhysicalDistribution and Logistics Management, Vol. 41 No. 1pp. 63-82

Milind Kumar Sharma, Rajat Bhagwat, (2006),”Practiceof information systems: Evidence from select IndianSMEs”, Journal of Manufacturing TechnologyManagement, Vol. 17 Iss: 2 pp. 199 – 223

Neil Towers, Bernard Burnes, (2008),”A compositeframework of supply chain management and enterpriseplanning for small and medium-sized manufacturingenterprises”, Supply Chain Management: AnInternational Journal, Vol. 13 Iss: 5 pp. 349 – 35s5

Petersen, K.J., Handfield, R.B. and Ragatz, G.L. (2005),“Supplier integration into new product development:coordinating product, process and supply chaindesign”, Journal of Operations Management, Vol. 23 Nos3/4, pp. 371-88.

Pressey, A., Tzokas, N. and Winklhofer, H. (2007),“Strategic purchasing and the evaluation of problemkey supply relationships: what do key suppliers need toknow?” Journal of Business & Industrial Marketing, Vol.

22 No. 5, pp. 282-94.

Sander de Leeuw, Jan Fransoo, (2009),”Drivers of closesupply chain collaboration: one size fits all?”,International Journal of Operations & ProductionManagement, Vol. 29 Iss: 7 pp. 720 - 739

Sahin, F. and Robinson, E.P. (2002), “Flow coordinationand information sharing in supply chains: review,implications, and directions for future research”,Decision Sciences, Vol. 33 No. 4, pp. 505-36.

Sunil Chopra, Peter Meindl and Kalra D.V. (2009),“Supply Chain Management: Strategy, Planning andOperation”, Pearson Prentice Hall, Second Impression,pp 593-626

Simchi-Levi, D., Kaminsky, P. and Simchi-Levi, E. (2000),“Designing and Managing the Supply Chain: Concepts,Strategies, and Case Studies”, Irwin McGraw-Hill,Boston, M.A.

Soroor, J., Tarokh, M.J. and Shemshadi, A. (2009),“Theoretical and practical study of supply chaincoordination”, Journal of Business & IndustrialMarketing, Vol. 24 No. 2, pp. 131-42.

Taylor, D. and Fearne, A. (2006), “Towards a frameworkfor improvement in the management of demand in agri-food supply chains”, Supply Chain Management: AnInternational Journal, Vol. 11 No. 5, pp. 379-84.

Rajesh K. Singh, (2011),”Developing the framework forcoordination in supply chain of SMEs”, Business ProcessManagement Journal, Vol. 17 Iss: 4 pp. 619 – 638

Ryu, K. and Yucesan, E. (2010), “A fuzzy newsvendorapproach to supply chain coordination”, EuropeanJournal of Operational Research, Vol. 200 No. 2, pp.421-36.

Tanmoy Nath, Craig Standing, (2010),”Drivers ofinformation technology use in the supply chain”, Journalof Systems and Information Technology, Vol. 12 Iss: 1pp. 70 - 84

Towill, D. (1996), “Time compression and the supplychain – a guided tour”, Supply Chain Management: AnInternational Journal, Vol. 1 No. 1, pp. 15-27.

Umit S. Bititci, Veronica Martinez, Pavel Albores, JoniartoParung, (2004),”Creating and managing value incollaborative networks”, International Journal ofPhysical Distribution & Logistics Management, Vol. 34Iss: 3 pp. 251 – 268

Vereecke, A. and Muylle, S. (2006), “Performanceimprovement through supply chain collaboration inEurope”, International Journal of Operations &Production Management, Vol. 26 No. 11, pp. 1176-98

Victoria Bordonaba-Juste, Jesús J. Cambra-Fierro,(2009),”Managing supply chain in the context of SMEs:a collaborative and customized partnership with thesuppliers as the key for success”, Supply ChainManagement: An International Journal, Vol. 14 Iss: 5pp. 393 - 402

Xu, K., Dong, Y. and Evers, P.T. (2001), “Towards bettercoordination of the supply chain”, TransportationResearch, Vol. Part E37, pp. 35-54

Xue, X., Li, X., Shen, Q. and Wang, Y. (2005), “An agent-based framework for supply chain coordination inconstruction”, Automation in Construction, Vol. 14, pp.413-30.

��


YOU DON’T GET WHAT YOU DESERVE,

YOU GET WHAT YOU NEGOTIATE

S.N.PANIGRAHI

[email protected]

Contracts are complex aspects of any business.Success in contracts and as a result in businesstypically requires successful negotiations.

Negotiating a favourable contract is becoming moreand more essential and critical aspect especially intoday’s competitive economic environment.“Negotiation is about getting the best possible deal inthe best possible way.”

True negotiation is the art and science of give and takeuntil the best deal can be struck that optimally benefitsboth the parties to a contract. Each contract has itsown unique technical and commercial considerations.Though there are some general practices standardisingcontractual terms and conditions, each contract mustbe carefully negotiated with all detailing and managedboth in order to have a successful outcome and protectthe company’s interests. Digging for information andknowing how to leverage it for the benefit is essential tosuccessful negotiation. The benefits of well negotiatedcontracts include both a reduction of cost / an increasein revenue and reduction of risk.

Negotiation is something that we all engage into and doin our everyday life – not only in business – in everysphere of life - engaging in dialogues, discussions,interactions, persuasions, bargaining ’s, disputeresolution, entering into an agreement - in business, innon-profit organizations, in government dealings, legalproceedings, among nations and in personal situations– engaging as a negotiator, may be as a parent / child; alife partner / a family member; a relative / friend; abusiness partner / competitor; a buyer / seller; a supplier/ customer; a boss / employee; a managementrepresentative / union leader; a statesman etc.Negotiation is a process of give and take to reach at anagreement.

Webster’s Seventh New Collegiate Dictionary hasdefined negotiation as : ...to confer with another so asto arrive at the settlement of some matter.

Mr. Robert D. Rutherford, Ph.D., author of The TwentyFive Most Common Mistakes Made in Negotiating...andWhat You Can Do About Them, defined negotiation as:...an effort to resolve a difference between two or moreparties by the give-and-take process.

Negotiation is an important skill. Negotiation invariablyinvolves finding a solution to a ‘problem / issue’.Understanding overall contractual aspects andobjectives are essentially required for better negotiatingcontracts. Therefore identifying, understanding, andevaluating contract objectives, requirements, risk areas,terms and conditions need to be incorporated incontract, are important and accordingly then

preparations for negotiations may be started. Somenegotiation tips are also need to be understood andpracticed to be a better negotiator. Let us discus herenegotiation basics, concepts, some negotiation tips frombusiness perspective from procurement point of view.

While negotiating a contract, here are eight steps tofollow for better outcome considering various aspectslike substance, objective, strategy, tactics, process andbehavior. Let us discuss in detail :

Preparation

Adequate and thorough prior preparation and properhome work and internal review by all the concernedbefore commencing contract negotiations proves to bebeneficial for fruitful outcome and reaching expectedconclusions.

Basics of preparation : know what and why you want;have high expectations; keep up a “can do” attitude;take a look at larger picture and accordingly take action.

Involve all individuals who may have knowledge /information about products, services, their quality oroperations that could be of significance in the finalcontract apart from people from commercial & legalbackground.

Define what you want to accomplish and how you intendto achieve that end. Make a planning chart or mentallyprepare before you go into the negotiation.

Before you start to negotiate, draw up a list of the factorsthat are most important to you like price, value formoney, delivery, payment terms, after-sales service andmaintenance arrangements, quality, lifetime costs of aproduct or service, whether or not the product or serviceis essential to your business. A list of negotiation pointsand issues may be prepared with time scheduled agenda.Prepare a “need list” (these are essentially requiredand bare minimum expectations - cannot be


compromised – may be primary interests - must havelist) and “wish list” (terms that are most beneficial toyou - asking for more than you expect to receive – maybe secondary interests - nice to have list). Backgroundinformation and data may be collected from variousreliable internal and external sources for preparing thelist.

Careful identification and anticipation of the key issuesfor discussions will play a vital role in the ultimatesuccess or failure in reaching an agreement with theother party.

Circulate agenda to all the concerned parties for theirpreparedness before scheduled meet saves time andeffort of either side for reaching desired results easily.

Define Levels of Authority and Responsibilities fornegotiation clearly (Certain times technical persons mayclear the deal on technical merits without commercialnegotiations which may weaken negotiation positionon commercial issues – the vendor may become adamanton the backing of technical department)

The expectations should be realistic and practical so thatagreement by both the sides may be reached and resultsmay be achieved. Unrealistic expectations often resultin missing goals and unsatisfactory relationships.Unsatisfactory relationships often result indisappointment and legal disputes.

Leverage Buying Potential

Maximizing your return in the negotiations is dependenton the strength of your bargaining position. Thepotential for large benefits may be made possible dueto the inherent leverage in a contract. Remember there’sstrength in numbers - leverage buying power – byclubbing volumes and or increase time periods (likesigning a multi-year contract in certain cases).Companies can gain significant leverage through inter-company aggregation, vendor rationalization,rationalizing product specifications, sourcing moreeffectively, by engaging a large number of qualifiedsuppliers during supplier selection and creating a morecompetitive negotiating environment.

Leverage buying power - Consider this potential instrategy formulation.

Establish Objective Strategy

Have a well-thought-out plan before you go into thenegotiation. Establish your objectives. Framenegotiation as a joint search for a solution.

Know your strengths and weaknesses : Knowing yourstrengths is very beneficial - understand it and use it toyour advantage. Recognize weaknesses and try and workout alternatives before negotiation meeting.

Anticipate all options - Identify your best options :Understanding your opponent is one of the mostpowerful tools in a negotiation, and it will help youbetter prepare yourself. You always need to know yourbest options: Know what your maximum limit is, themaximum you’re willing to compromise.

Make a strategy : Internal strategy may be made forbest leveraging buying power; negotiation style andapproach; cost / benefit analysis; optimising value formoney. Gather market information (product, vendor,

competition, market behaviour, pricing trends and otherrelevant information), identify risks, assumptions, andlegal issues and accordingly develop a strategy for keyissues. Strategy should be in accordance with companypolicy / procedures and ethics.

Keep the targets high, but achievable. Expect more fromthe deal. This strategy makes you appear tough, whichis very important in negotiating.

Meeting

Respective negotiating teams from both the partiesshould be present as per pre-set schedule, at prescribedvenue with pre-circulated agenda.

Set the tone of the business negotiations with positivemindset. Meeting is not a battle field; it is not a placefor confrontation; it is not a game / sports; it is not forwinning and losing; it is meeting of minds to reach amutual agreement. All contracts are negotiable. Spellout everything that is required. Keep a list of points /issues to be addressed in the contract

Negotiate on every point. Everything is negotiable; notjust the rates and dates only, various other terms &conditions, even the process, style and approach offinalising contract; all these can be negotiated. In acontract apart from price various terms shall benegotiated like Scope of Work and Schedule, Terms ofPayment, Insurance, Bonding, Indemnity, Performanceparameters, Performance guarantee, Warranties,Damages, Termination and Suspension, Changes to theContract, Disputes and Their Resolution, Arbitration,Jurisdiction, Force Majeure etc .... etc ....

Be creative and persistent in efforts to best negotiatethe contracts with all terms in detail. Look for valuepropositions and add positive value in eachnegotiation.

Set your mind to given situation. Know and understandoverall picture – objectives, strategy, marketenvironment and competition. Try to gather as muchinformation as possible from the other party.

Negotiating a favourable contract means finding abalance of the best terms for the specific situation. It isadvisable to create a spreadsheet to list each majorterm and each supplier’s offer for that term, and thenidentify the best deal for each term.

Allow the other party to express their concern freelyand recognize their view points for further discussions.Listening is one of the most essential aspects ofsuccessful negotiating. Carefully note down / listenpoints of disagreements. Understanding the issues isthe basis for convincingly reaching agreement.

Don’t incorporate any ambiguous clauses / terms. Definethe terms to interpret them and understand the sameway and mean by all the parties. Simple understandablelanguage is recommended.

The objective of negotiations is to reach a win-winsituation for both the parties. In a win-win situation,you really want both parties to feel good aboutthemselves, the deal, and the entire process of thenegotiation. So the mind set in the negotiation meetingshould be flexible enough to achieve desired goalswithout compromising objective interests of both the


parties.

Know your boundaries. Keep in mind the “need list” andthe “wish list”. Start negotiations with your “wish list”.Keep your aspirations high. Let the other party tell youwhat it is not willing. Avoid Rigid and inflexible positions- Decide what you want and can sacrifice if you must.Stretch to meet everything in the “need list” andsomething can be sacrificed from “wish list”.

Focus on primary interests – prioritize your interests.

Don’t fall into a false sense of urgency / time boundlimited validity of offer / special discount offers. Don’tgive in too hastily. Sometimes sales persons use thesetricks to clinch deals early to their advantage bypsychological mesmerising.

Don’t express or reveal your weak points. If you areunder time pressure, your negotiating position isweakened. Never reveal that you are under a deadline,unless it is to your advantage

Never accept the first offer – negotiate further for favourto your side – evaluate the scope to stretch more – starttrade off to leave something in turn to gain more – incase of deadlock on an issue, set it aside and comeback to it after you’ve reached agreement on the easierissues

Silence in some cases proves advantageous – it reallyconfuses all others - It’s also a way to disagree withoutbeing disagreeable and agreeing without reallyagreeing. This may mount up some pressure on the otherparty to compromise for something more to clinch thedeal.

Know when to leave. Walk away from the deal toexpressly indicate your disinterest, in case agreementis not reached - try to mend the situation to your favour

Leverage your business potential and expect to gainmore. Buying power / leverage (the ability to get theother side to do things in the way you see favorable /influence), Knowledge (Knowledge is power – it is acombination of expertise and information; structure thebest possible deal through skilful negotiation -experience in negotiating contracts results in to bestoutcomes), Time (market favorability / conditions;negotiation time / urgency of requirement-unless oneside imposes a deadline, negotiations may drag for moretime), Company policy / Style of negotiations (policiesvaries from company to company / style changes frompersons to person or depends on the situation) are someof the variable factors influencing negotiations. Makebest use of these to built your competence and proceedwith conviction and confidence.

Communication is very important aspect in all types ofnegotiations. Remember 4 C’s of communication:Collecting (gathering data, information); Compiling(data / information suitably mending to therequirement); Conveying (sharing, discussing);Convincing (persuading your view points)

Negotiations should be on logical base. Present your casewith justifiable reasoning with relevant data base.Collect the information from various sources andpresent to your favour.

A contract negotiation may be held at various levels ofauthority. Negotiation in a layered fashion has its own

advantages and dis-advantages as per strategy andsituation. Don’t disclose to the other party if there aresome more authority levels above you. This may weakenyour negotiation power.

Be aware of what is fair – real value for money fromevery aspect – justify the outcome

Values, ethics, company policies, individual’s thinkingand decision-making processes, experience, negotiationstyles, behavioral and situational aspects influencenegotiations.

Adopt or role play a negotiation style that is moreappropriate to a given situation (Mr. Richard Shellidentified five styles / responses to negotiation :Accommodating, Avoiding, Collaborating, Competing,Compromising)

Some soft and informal aspects too weight a lot ingaining advantage in negotiations such as :

Arranging proper hospitality as required to the teammembers visiting for discussions, ensuring that the sitefor negotiations should be appropriate to accommodateall the team members. An informal meet over lunch /dinner may allow the respective team members to formbonds and personalised relationships, which will helpsmooth out the negotiation process.

Be soft with people – stick with objectives. Emotionalstates, body language / posture, facial expressions,various other non-verbal signals and verbalcommunications – language and tone etc. are alsoinfluence negotiations.

Be sure to perform adequate due diligence. A poorlynegotiated agreement is often the root cause oflitigations. Most of the time, litigation could be avoidedwith better negotiation and construction of the contract.

Comparisons of all the eligible bids shall be made withtechno-commercial merits / demerits and cost – benefitanalysis. Make the comparisons considering all the costelements on cost to company basis.

In case in one sitting negotiations are not concluded,call next rounds of negotiations (may be personal meets,over phone conversation, exchange of written documents– fax, e-mail, courier etc).

Identify areas of agreement. Trouble shootdisagreements: bargain & seek alternative solutions.Screen out the issues / points in each negotiation thatare in agreement to focus the subsequent discussionsonly on key issues un-resolved.

Negotiation is also a learning process. Learn from eachnegotiation, analyze what happened and identify waysto improve. Any one may make mistakes in negotiations– realize and acknowledge mistakes - learn from themistakes, work to correct it – you may become moreeffective negotiator if you learn from mistakes.

Protect Financial Exposure and Risk

If a contract is not negotiated fairly, it may cost heavilyin financial as well as in risk terms. Protect yourfinancial exposure and budget.

Ensure the successes of your event with thoroughnegotiations that specify each party’s responsibilityshould the unforeseen occur. The majority of unpleasant


budget surprises are found in the fine print of contractclauses. Once you have negotiated the major aspects ofyour agreement, dedicate as much care to the liabilityclauses of the contract. Terms of Payment, Insurance,Bonding, Indemnity, Performance, Warranties, Damages,Termination and Suspension, Changes to the Contract,Disputes and Their Resolution, Force Majeure and otherliability clauses, all can increase your financialexposure.

The objective is to lower or eliminate the risk, improveterms of payment, and reduce exposure to claims anddisputes. Negotiations shall be made considering allcost elements and net cost to the company basis.

Do a Cost - Benefit analysis - find savings

Negotiate Ethically

Vendors and Suppliers are important stakeholders ofany enterprise, associating with the company to supportthe business. As business associates, each beinginterested in success of other, the relationship shall bebased on mutual trust and the dealings shall becharacterized by openness and transparency, completeas needed for working jointly to add more value in eachtransaction and must be perceived as being fair to both,culminating in a win-win situation.

Negotiate ethically - but confidently - just be careful notto cross the ethical line.

Provide equal opportunity to every eligible vendor forparticipation and decide on merits. Good EthicalNegotiation Practices, adopted by the negotiator as afront face of organization’s representative, strengthencorporate culture, promote vision and values, reinforcea commitment to quality settlement, and demonstratehow values are the drivers of behaviours essential toachieving business results.

Establish Relationships

Spend time on the most important issue : developingand expanding the relationships – establish goodrapport - a harmonious and understanding relationship.

Relationships refer to behavior, the communicationbetween the parties and the styles they adopt. Contractis an agreement that can live with, and an agreementthat will continue the relationship.

Negotiation is the starting point of establishingrelationships. Whatever may be the business outcome,personal relationships should be maintained. So avoidpersonalised sabotaging and sarcastic comments. Avoidconfrontation. If there is any issue try to resolve withoutdamaging the relationship.

Respect each other – respect others views – it doesn’tmean acceptance; listen and learn – there is amble scopeif mind is open; emotions may not be eliminated, butegos may be minimized; generally egos are root causeof conflicts-avoid personalized conflicts; every one mustbe working for some organization-negotiating fororganizational interests-keep organizational objectiveson focus-establish personalized good relationships,irrespective of whatever outcome of negotiations. Goodethical practices and fairness of negotiations fostersrelationships.

Good relationships strengthen company image and

business future.

Closure & Conclusion :

Don’t leave any key issues un-discussed. Complete pointwise point negotiations. Try to reach agreeableconclusions.

Assess all the terms and conditions to ensure that theseare consistent with the particular type of procurementand conform to applicable internal policies andprocedures.

Know when to close the negotiations (this is verydifficult to ascertain – assess, make reasonability test– sensing the right time when expectations reached –justify the agreements).

A negotiation is complete only when an agreement isreached with firm commitments.

Deal may be settled anywhere between the settlementranges - may be more / less favour to buyer / seller asper agreement settled.

When you complete any negotiation, summarize thediscussions and communicate the key contractualrequirements and their agreement / disagreement in alanguage that can be readily understood by all.

Make sure you get everything in writing, don’t leaveinto air. Don’t fall into “told- heard” loop; it is verydangerous. Make sure to take all details written down,signed by all concerned as their wilful consent. Thesepoints may need to be incorporated in the writtencontract or an addendum to your current contract.Conduct a formal contract review and concurrenceprocess and arrange contract signing, in accordancewith negotiated agreements and company procedures.

COMMON NEGOTIATION MISTAKES TO AVOID :Following are very common mistakes while negotiatingcontracts which may be avoided :

Not having a clear business plan; Missing Objectivity;Lack of preparation & well developed strategy; Wrong /incomplete specifications; Price & commercialnegotiations before freezing technical details; Finalisingon technical merits without considering commercialaspects; Poor financial / cost understanding; Notencouraging Competition and Equality; Falling intowrong influence / not deciding on merit; Focus on singleissue – ignoring overall objective; Focus on price –ignoring various other clauses (which may have costimplication); Committing without having authority tocommit - Finalising without written commitments etc.

��


DEPRECIATION IN RUPEE-CAUSES, IMPACT

AND THE WAY AHEAD

HARKIRAT SINGH

PROFESSOR & CONSULTANT - IIFT, NEW DELHI

[email protected]

Depreciation of Rupee is the result of number ofinternal and external factors, adversely affectingthe economy. Export sector has to be encouraged,

to correct current account deficit and initiate steps tocurb non-essential imports. Market sentiments have tobe improved, to stop under valuation of Rupee againstmajor foreign currencies

Rupee valuation against USD has touched historic lowrate of Rs. 68.80 recently. More such historic levels withcorrections are expected in the near future. Technically.Rupee is presently under volatile trend, caused bysudden change in demand and supply forces in forexmarkets. Valuation of Rupee against US S hasdepreciated more than the 14 per cent in the span offew weeks and daily change (if Rupee 1 to Rupee 3 hasbecome common.

Brief volatile history of Rupee movement along withmain influencing factors is as follows:

� 1947-No foreign borrowings on India’s balancesheet USD INR - Rupee 1

� 1951- Introduction of the Five-Year Plan. Thegovernment started external borrowings tofinance welfare and development activities.USDINR- Rupee 4.8

� 1975-85 INR uas devalued due to oil price hike inearly 70’s, lower domestic production, licenseraj and worsening BOP situation. USDINR=Rupee12.36

� 1991 Serious BOP crisis. The country was in thegrip of high inflation, low growth and the foreignreserves were not even worth to meet three weeksof imports. USDINR - Rupee 17.90

� 2003 INR was let free to flow with the marketsentiments. The exchange rates were freed lo bedetermined by the market, with proxisions ofintervention by the central bank under thesituation of extreme volatility. USDIXR Rupee31.37

� 2008 INR has gradually depreciated since theglobal 2008 economic crisis. Upward correctionmade Rupee lo appreciate also to 39. USDINRRupee 49

� Current INR has depreciated further due to outflow of foreign exchange, stuck up economicpolicies, poor infrastructure, record high CAD.trade deficit, low growth. USDINR = Rupee 68.80

Causes of Rupee Depreciation : It is essential tounderstand why Rupee is depreciating against USD.Rupee is under volatile pressures due lo combinationof number of India specific economic factors andsudden emergence of new international scenario. Someof the main Indian based economic factors are namely,increase in current account deficit touching to 4.8 percent of GDP, slowdown of exports due to economicrecession in Europe/USA, increase in imports of oil andnon productive items like gold, sudden and fastdisinvestment by FII from Indian equity and debtmarkets, slow movements in liberalization process andweak political sentiments causing overall negativepicture of India. These issues are taking the Rupeetowards sudden and deep decline, especially againstUS $, Pound Sterling. Euro and Yen. Structural economicproblems like high inflation, adverse fiscal deficit dueto various subsidy schemes, weak sentiments in capitalmarkets, High Consumer Price Index, decline ineconomic growth, flat industrial growth with decline inimport of capital goods and high liquidity available inlocal market, etc. accelerated the speed of depreciationof Rupee against US$.

Some of the main Indian based economic factors arenamely, increase in current account deficit touching to4.8 percent of GDP, slow down of exports due toeconomic recession in Europe/USA, increase in importsof oil and non productive items like gold, sudden andfast disinvestment by FII from Indian equity and debtmarkets, slow movements in liberalization process andweak political sentiments causing overall negativepicture of India.

Market sentiments are very negative resulting in Rupeedrop from Rupee 60 to Rupee 68.80 in couple of weeks.Now, one adverse factor is attracting negativesentiments for Rupee , causing an adverse feeling in theeconomic scenario and fast depreciation of Rupeeagainst main invoice currency USD. Under valuation ofRupee is mainly due to adverse market sentiments.

A major international event which triggered steep fallof Rupee against USD was the statement of Chairman ofUS Federal Reserve, Mr. Ben Bernanke expressingtightening of Quantitative Easing and restricting supplyof USD 85 billion per month to boost USA economy. USDollar is also getting strength from revision of USAcredit rating, improvement in long term interest rates,expectation of higher crude oil prices due to Syriaproblem, recession in Euro zone and recent monetary


policies of European and Japanese Central banks. Dollarindex has also touched a three years high level of 84.30,making it the stronger currency in international forexmarkets. These are some of the international factorsgiving strength to US S against major currenciesincluding Rupee . Mainly, these local and internationalfactors caused high volatility in Rupee valuation againstUSD which is creating serious problems for economyand external sector.

Impact on Indian Economy & Corporates : Combinationof these local and international factors created highvolatile situation for Rupee, leading to historic lowlevels of US S = Rupee 68.80, £ =104.30 and • = Rupee86, with high probability of not going back to 2012levels. Volatility of Rupee has had adverse effect onprofitability, revenues, expenses, costs, imports,increasing burden on foreign currency loans and makingour companies uncompetilive in international business.Greater the volatility, higher is the chance of frequent,unexpected and directionless movement in externalvalue of Rupee destabilizing the Indian economy.Volatility, has to be controlled soon to stop furtherdamages and uncertainty in business.

Weakening of Rupee is going to affect adversely, allmain sectors of the economy. The rapid decline in Rupeevalue will increase inflation due to increase in price ofoil which in turn will adversely affect all the relatedsectors of the economy. Inflation will not allow declinein interest rates which is essential for industrial growth.Weakening Rupee will also make capital items importexpensive, making our companies to delay investmentsin industry, hampering the development of much neededmanufacturing competitiveness and capacity.Ultimately, it will lead to adverse economic scenario,unemployment and recession. Now, currency ratechanges can suddenly convert profit makingtransactions into loss making ones and vice versa.

Impact and Challenges for Exporters : Rupee depreciationagainst USS is good news for our exporters specially inIT sector and those not using imported inputs. Exportersusing high contents of imported raw material componentlike diamond, jewellery, engineering goods etc. will bebadly affected by steep appreciation of USS. Rupeedepreciation provides right platform to our exporters,to compete with other suppliers in international marketsby reducing prices without affecting profitability.Exporters must avail this opportunity to penetrate deepinto existing markets by understanding business modelof their foreign buyers. Exporters must make their exportsupply chain effective and efficient to meet futurechallenges. Such approach will enhance competitivecapacity and cost efficiency which will help them todevelop long term strategy in international business.

Exporters must avail this opportunity to penetrate deepin existing markets by understanding business model oftheir foreign buyers. Exporters must make their exportsupply chain effective and efficient to meet futurechallenges. Such approach will enhance competitivecapacity and cost efficiency which will help them todevelop long term strategy in international business.

Rupee depreciation has posed new challenges forexporters. This is the best time for exporters to developbrand image in their existing and new markets. Exportsector must focus on improving technology, reducingcosts, improve quality, develop competitivemanufacturing capacity and improve efficiency of cheaplabour. We may not get, in the near future, such anencouragement for export promotion. Policy makingagencies should initiate comprehensive packages fordevelopment of export sector. This is probably the besttime for our exporters to compete with China andreplacing them from certain foreign markets.

We may not get, in the near future, such anencouragement for export promotion. Policy makingagencies should initiate comprehensive packages fordevelopment of export sector. The is probably best timefor our exporters to compete with China and replacingthem from certain foreign markets.

Effect on Imports and Loans Portfolio : Depreciation ofRupee is escalating the overall cost of import business.Depreciating trend of Rupee is against the interest ofimporters, borrowers of foreign currency on cheapinterest rates, students planning for higher studiesabroad, tourists bound for foreign destinations and formedical treatment abroad, etc. As per RBI survey,majority of companies have not hedged their repaymentof foreign currency loans raised in USS. Such casualapproach towards hedging of currency exposure hasmade cheap foreign currency loans more expensive thanRupee loans due to fast appreciation of loan currencyUSD. Similarly, foreign acquisition plans by Indiancompanies have become more expensive and at thesame time value of their old purchases have becomehigh value assets.

Importers have to either pass on high cost to localconsumers, pushing up inflation in Indian economy ordevelop local sourcing like Indian Auto sector. Thissector is dominated by experienced Japanese, Korean,European and American multinational Auto companies.To meet the challenges of? depreciation, auto industryhas developed a long term strategy to arrange auto partsfrom Indian ancillary units. Rupee depreciation willencourage locals in sourcing and will change businessmodels by encouraging exports to strong currency areasand imports from weak currency countries.

The Way Ahead : History of USS/Rupee rate reveals thatonce Rupee value goes down, it never returns back. Now,corporates must make future business strategies bytaking USD = 60 Rupee plus exchange rate intoconsideration. This is the right occasion to enhanceour exports and restrict non essential imports to correctCurrent Account Deficit and pressure on Rupee. Bigexporters may establish warehouses abroad or buildmanufacturing capacities in their main internationalmarkets. Long term export promotion strategies have tobe developed. Guru mantra to do international businesswould be to reduce the cost of each and every businesstransaction.


A focused policy approach is required to increaseinward remittances and Non-Resident deposits. Sincereefforts are required to encourage foreign inwardremittances like issuing Dollar based long period bondsand encouraging investments in India. Preserve theforeign exchange reserve to protect the value of Rupeein unexpected market situations.

We have to reduce our dependence on USD ininternational business. USD/Rupee, market turnover issmall as compared to international forex market andstill controlled by RBI. Change in demand and supply ofUSD causes volatility, destabilizing the external sectorof the economy. Surplus dollar reserves should be usedfor high value crude oil and military imports, etc. so asto reduce the demand of USD in local onshore forexmarkets. Government must encourage bi or multilateralagreements, to encourage local currency payment inorder to lesson the dependence on third currency USD.Such policy initiatives will lessen downward pressureon Rupee. Emphasis should also be to use localcurrencies in developing currency swap arrangements.Payment in Rupee, negotiating for long credit periodsfor high value imports and encouraging localinvestments in production areas are some of the issueswhich will reduce dependence and demand of USD inlocal forex markets. Policy actions should be firm andgrowth oriented to give positive sentiments to Rupee.

Payment in Rupee, negotiating for long credit periodsfor high value imports and encouraging local investmentsin production areas are some of the issues which willreduce dependence and demand of USD in local forexmarkets.

Hedging Currency Risk : Rupee volatility has emphasized

the need for hedging of currency risk. Indian corporateshave to develop innovative hedging strategies by usingfinancial derivatives like forwards, exchange tradedfutures and options, to protect against adversemovement in exchange rates. Now, corporates shoulduse currency option which will provide flexi hedging,portfolio of derivatives and partial hedging strategiesto protect against volatility of USD/Rupee exchangerates. Time is right for corporates to develop operationalhedging strategies for long period exposures, to meetfuture changes in Rupee valuation. Foreign currencyloan must be hedged by using currency swap, optionand rollover forwards with the help of the commercialbanks. Corporates have to formulate hedging strategydepending on their risk policy duly approved by themanagement.

Moreover, hedging strategy has to be dynamic to meetthe future challenges of depreciation or appreciationtrends cycles of Rupee against major foreign currencies.Rupee has to go up or down against USD and hedgingpolicy should allow flexibility to cater to the dynamicexchange rate scenarios.

Depreciation of Rupee is the result of number of internaland external factors, adversely affecting the economy.Export sector has to be encouraged, to correct CurrentAccount Deficit and initiate steps to curb non-essentialimports. Market sentiments have to be improved, to stopunder valuation of Rupee against the major foreigncurrencies. Foreign trade and borrowings transactionsneed innovative hedging to protect against currency riskas per approved policy of management, to protect profitmargin and remain competitive in internationalbusiness.

��


ROLE OF MATERIALS MANAGER TO COMBAT CURRENT

ACCOUNT DEFICIT, INFLATION AND RUPEE DEPRECIATIONDR V K GUPTA

FORMER CEO INDIA, JMAM, JMA GROUP, TOKYO, JAPAN

PROFESSOR, IMT GHAZIABAD

[email protected]

Introduction : Emerging economies have seen a suddendownturn recently after the announcement ofintention of US Federal Authorities to roll back the

economic stimulus in the US. India has not been anexception as has been few times in the past and Rupeehad almost a free fall during thelast week of Aug 2013to a record low of Rs. 68.86 to a US dollar from nearlyRs53.65 to a US dollar on May 1, 2013.

According to CARE (2013), the rate of inflation in July,based on provisional monthly WPI data, inched upsignificantly to 5.8% compared with 4.9% for theprevious month. It was 7.5% during the correspondingmonth of the previous year. Build up inflation rate inthe financial year so far was 3.1% (July’13) comparedwith a build-up rate of 3.0% in July’12.India’s CAD (Current Account Deficit ) has been a matter of concernfor all as high CAD indicates less flow of US $ ascompared to outflow for payments for imports of goodsand services.

Gold imports have contributed significantly to higherCAD than planned. Recent steps by the Government andRBI have put some damper on gold imports for the timebeing. According to Trading Economics (2013), ‘Indiarecorded a Current Account deficit of 21.80 USD Billionin the second quarter of 2013 as reported by ReserveBank of India. In India Current Account averaged -1.58USD Billion from 1949 until 2013, reaching an all-timehigh of 7.36 USD Billion in March of 2004 and a recordlow of -32.63 USD Billion in December of 2012. CurrentAccount is the sum of the balance of trade (exports minusimports of goods and services), net factor income (suchas interest and dividends) and net transfer payments(such as foreign aid).’‘Current account surplus is usuallyassociated with trade surplus.

However, for the few countries with substantial overseasassets or liabilities, net factor payments may besignificant. Positive net sales to abroad generallycontribute to a current account surplus as the valueinterest or dividends generated abroad is bigger thanthe value of interest or dividends generated from foreigncapital in the country. Net transfer payments are veryimportant part of the current account in poor anddeveloping countries as workers’ remittances,donations, aids and grants and official assistance maybalance high trade deficits’ according to them. Bank ofAmerica Merrill Lynch (BofA-ML) has lowered its current

account deficit (CAD) target for India for the currentfinancial year to 3.2 per cent of the GDP from 4 per centearlier.

High CAD has put pressure on Indian currency, whichtouched a low of 68.86 to a dollar on August 28, 2013. Itis currently hovering over the Rs 62/US dollarlevel.Nikhil (2013) states that the rupee’s decline affectseveryone in the economy because it feeds directly andindirectly into general inflation, which is a continuingproblem even as output growth decelerates, andtherefore hits common people hard. There are severalways in which the falling rupee immediately has aninflationary impact, one of the most important of whichis the price of energy.

According to Deloitte (2012), ‘with increasing financialas well as trade integration of the Indian economywiththe global economy, the potential for achievingsustained growth is high. However there remains a needfor efficient ground level implementation of policydecisions and the need of a long term outlook to resolveeconomic challenges.According to D&B (2013),government has taken certain steps to stabilize rupeeby increasing the limits on foreign investment in localdebt. The RBI has banned banks from proprietary tradingin domestic currency futures and options. The RBI hasalso been selling dollars in the foreign exchange market,but its intervention has remained limitedas it can leadto tight liquidity conditions in the banking system’.

Global, Macro and Micro factors led to fall of IndianRupee vs US $, which is partially responsible forinflation and higher prices. Current Account Deficitincreases as rupee falls as we have to pay more rupeesto buy US $ for same level of imports. MaterialsManagers, responsible for imports of goods andservices can play a key role in combating these in asignificant ways.

Role of Materials Manager : Since all the above factorsare linked to imports in hard currencies and higherprices of products and services, materials managers,who normally control 60 to 70 per cent of the cost ofgoods and services produced or distributed, materialsmanager has an important role to play in keeping thesecosts low and also reducing the cost of procurementthrough innovative methods such as Value Engineeringand Value Analysis. Some of the effective well proven


methods which can be adopted by the material managersare:

A. Demand Forecasting : Accuracy of demand forecastcan help in procuring the right item, in right quantity attheright time. Simply following the projections given bySales or production may not be enough. MaterialsManagers need to be fully conversant with Bull Whipeffect and the fact that demand forecast gets distortedas one moves up the value chain in an organization.Perhaps a frank discussion at the top and senior levelis needed to arrive at exact quantities needed for aplanning period. Sophisticated forecasting tools arenow available for improving the accuracy of forecasts.However, judgemental factor always override the resultsof any forecasting tool. Methods such as Fuzzy Logichelp to arrive at more accurate figures than either usinga tool or simply going by ones feel.

B. Strategic Sourcing : Materials Manager needs to riseabove the functional silo and be a part of the strategictop management team to take a long term view of thesourcing of products and services. Right from suppliersection right up to maintaining long term relations withthe supplier selected can pay rich dividends in today’shighly uncertain and highly volatile world. In case ofimports, geological factors sometime override theeconomic considerations. Materials Manager mustacquaint himself or herselfwith the internationalgeopolitical environment and risks involved in sourcingfrom a particular country or region. Naturally, in theregions or countries where trade agreements are inplace, may be a preferred choice at bilateral trade withthat region or country would help India to keep CADlow. In addition, due to nil or lower duties the landedcost would come out to be cheaper. In addition suchtrade agreements also come with added facilities suchas low cost finance.

C. ForexHedging and Commodity Derivatives :Understanding Forex hedging concepts would help amaterials manager to freeze the landed cost and insulateit from the currency fluctuations which have become anorm of the day now. Since it is nearly impossible topredict currency movements, it is safer to use some ofthe simple hedging instruments to protect a companyfrom the currency fluctuations. In addition, it is alsopossible to protect against price fluctuations in case ofcommodities. Some of the commodity derivatives suchas option helps to plug the upside in prices while keepingright to buy at a lower price intact, of prices fall ininternational markets. However, company need toconsult independent experts to take benefit from thesepossibilities. (Going by advice of banks alone may leada company in trouble as many aggressive bankers havepushed financial products sometime without fullyexplaining the risks involved.)

D. Import Strategy for High Value Products and Services: Petroleum and Gold contribute to major part of ourimports bill. Government has taken steps to curb gold

imports. Materials Managers of companies dealing ingold can contribute by coming out with innovativeschemes to recycle the gold in Indian Household withhelp of some of the government’s initiatives. All overthe world, 10 - 18 carat jewellery is used. By bringing inattractive designs, it may be possible to reduce demandfor gold from 22 carat to 10-14 carat solid and alsogold plated jewellery as in the west. Alternatively,artificial jewellery can also fill some of the gap.

Petroleum imports generally governed by theInternational treaties and long term agreements.Materials / imports managers of Indian Oil and GasCompanies can explore possibilities of importing fromnon Dollar countries like Iran for example. Naturally,government has to play a significant part as geopoliticalfactors influence such imports. However to ensure weare able to import oil and gas at rather fixed prices, onevery effective way is to hedge. A number of hedgingstrategies can be used to keep the cost of imports fixed,insulating a company from the exchange ratefluctuations to some extent. On a longer horizon,investment by Indian oil cos in E&P contracts canreduce dependence on imports.

For items which are high value, a company needs tohave a well thought out sourcing strategy in place. Oneshould fully explore all possibilities before enteringinto a long term contract for these items or services.

E. Managing Cost and Quality

i. Focus on Quality : Quality of goods and servicesprocured must meet the exact requirements where it isto be used. Low quality inputs, sometimes cheaper, oftenlead to low quality products and services, higherwastage, lower customer satisfaction and higher coststhrough warranties and reworks. Identifying supplierswho can consistently deliver quality products andservices and have ability to scale up as the demandincreases,is the first step in this direction. Use ofStatistical Process Control (SPC) at supplier’s premisesis vital for ensuring quality goods and services. This infacts leads to lower cost of production as well. As permay studies, COPQ ( Cost of Poor Quality ) inmanufacturing can be as high as 20% and in services40% of the cost of goods / services produced. Processcapability studies and selective use of control chartscan help to reduce this cost substantially. Since someof the suppliers may be located overseas, it is better toselect suppliers with international quality certificationsuch as ISO 9001 and also industry certifications witha third party audit.

ii. Sourcing from low cost destinations : Low costdestinations do provide opportunities for reducing thecost of imports.Continuously looking for sources andevaluating from all perspectives, does provide ampleopportunity to reduce cost. Many MNCs have been takingadvantage of low cost sourcing destinations to remaincompetitive. Here again quality and reliability are thekey factors.


iii. Total landed cost criteria : Cost comparison need tobe done on total landed cost at your premises and noton rate offered by the supplier at their locations. Costdue to supply disruptions and other factors also needto be taken into account. Inventory cost can play adecisive role in these evaluations we the cycle inventorytend to increase substantially if the total lead time forimport from a low cost destination is high coupled withneed for higher lot sizes as is the case for imports fromChina.

iv. Transportation Mode and Cost : Transportation modeis very important in decisions on imports. For oil andgas,pipelines transportation is the cheapest mode afterthe pipeline has been laid as has been the case ofNorwegian Gas to Europe. However geopolitical factorsaffect such decisions as TAPI is still under discussionand may take several years to become a reality.Searoute is the next cheapest of all transportationmodes. However, one has to also consider the total leadtime and the risks such as Somalia Pirates. In case ofpetroleum and Natural Gas / LNG sea route is the onlyviable option today. India has invested heavily inbuilding LNG terminals. The role of materials managersis to ensure long term availability of LNG at low ratespossible through negotiations.

For other commodities, use of standardized containers,route and port selection where congestion is low, rail /road connectivity, local labour issues and speed ofcompleting government procedure for clearing goodsimported, are some options the materials manager needto consider.

iv. Aggregation : Aggregation helps to get benefit ofeconomies of scale. However, in the era of high varietyand low volumes, conventional high lot size methodcannot be used to achieve the benefit without riskinghigh level of obsolescence and inventory costs. It ishowever possible to club small quantities of a numberof products in the same shipment, and more frequentcoordinated deliveries to achieve the same effect aseconomies of scale. Toyota is well known for one pieceflow; still achieve lower cost through aggregation of alarge variety and volume as low as one piece per variety.

F. Building Agility in Supply and Delivery : Agility andflexibility in supply and delivery is needed in today’sworld where the customerdemand changesvery quickly.One way to achieve this is by having dual sourcing. Onesource close to the market being served for innovativeproducts which have high demand variability and otherfor functional products which have relatively lower costand lower demand variability. Motorolais an excellentexample of this strategy. In addition to reducing theneed for keeping high inventory, this strategy helps inkeeping overall costs low and also meets customerrequirements, Ibnlive (2013).

G. Supply risk and disruption – Matching Demand andSupply : In today’s uncertain times, it is rather difficultto predict demand accurately and also chances of supply

shortages and disruption cannot be rules out. Some ofthe well proven supply chain management techniquessuch as safety stock, quick sense and respond, reducinglead time, strategic inventory placement, delayeddifferentiation,risk pooling, upward substitution, masscustomization, duel sourcing, customer involvement indelivery process etc. can be appropriated used to matchdemand and supply, thereby preventing sudden spike inprices and reducing inflationary trends.

Conclusions : Materials Managers can contribute inkeeping CAD low, inflation low and the depreciation ofrupee by reducing the import bill and importing fromnon-dollar countries. Sourcing from countries, whereIndia has a bilateral or multilateral trade agreement,can also help in reducing trade deficit which would inturn keep CAD lower. Low cost souring would help tokeep prices of end products and services lower, therebyreducing inflation.

References

Deloitte (2012), “Current state of the Indian economy Abalancing act” March 2012, www.deloitte.com/in ,©2012 Deloitte Touche Tohmatsu India Private Limited.

D&B (2013), “Rupee depreciation – rising risk to growth”,Special Article, D&B

Economy Observe, Copyright Dun & BradstreetInformation Services India Pvt. Ltd.

Gupta, V.K. “Strategic framework for managing forcesof continuity and change in Risk Management of Banksin India”,Global Journal of Flexible Systems

Management, 2009, Vol. 10, No. 2, pp 1-13.ISSN: 0972-2696, A Springer Publication.

Gupta, V.K., “Flexible strategic framework for managingforces of continuity and change in Value EngineeringProcesses: Study in Indian Context”, Global Journal of

Flexible Systems Management, 2009, Vol. 10, No. 4, pp43-54. ISSN: 0972-2696, A Springer Publication.

Gupta, V.K., “Flexible strategic framework for managingcontinuity and change”, Knowledge Management and

Intellectual Capital – Emerging Perspectives, 2009, pp 477-488, publisher Allied Publishers Pvt. Ltd. India

Gupta V K, “Flexible strategic framework for managingforces of continuity and change – study of outboundautomotive supply chain management in India”,International Journal of Value Chain Management, Vol4. No 4, 2010, pp. 365-379, Inderscience Publication

Gupta, V.K., “ Flexible strategic framework for managingforces of continuity and change:

Study of Supply Chain Management of Lighting Industryin India”, Global Journal of Flexible SystemsManagement 2010, Vol. 11, No. 3, pp 39-50. ISSN: 0972-2696, A Springer Publication

Gupta V K, “Flexible strategic framework for managingforces of continuity and change – study of inwardsupply chain of a leading automotive company in India”,


Internationals Journal of Business Excellence, Vol. 4,No. 2, 2011, pp. 142-159, Inderscience Publication

Gupta, V.K., “Flexible strategicframework for ManagingForces of continuity and change in Retail BankingBusiness Processes in India”, Business ProcessManagement Journal, 2012, Vol. 18, Iss 4, pp. 553-575.Emerald Publication.

Gupta, V.K., “Flexible strategic framework for KnowledgeManagement in Supply Chain with the perspective ofcontinuity and change: Study of KM in Supply Chain

Management”, Proceedings Sixth International Forum of

Knowledge Asset Dynamics, Tampere Finland 15-17 June,2011, pp. 470-491 (Selected for Publication in Journal

of Knowledge Management, Emerald Publication).

Gupta, V.K., “Flexible strategic framework for KnowledgeManagement in Supply Chain with the perspective ofcontinuity and change”, Global Journal of e-Business &

Knowledge Management, 2011, Vol. 7, No. 1, pp. 34-44.A Springer Publication

Gupta, V.K., “Flexible strategic framework for managingforces of continuity and change in supply chainmanagement of fast food ( quick service restaurant)industry”, International Journal of Business Continuity

and Risk Management, Vol. 3, No. 2, 2012, pp. 148-166,Inderscience Publication

Gupta, V.K., “Flexible strategic framework for KM factors

with the perspective of continuity and change: study ofsupply chain of MNCs in electrical and lightingindustry”, International Journal of Value Chain

Management, 2012, Vol. 6, No. 4, pp. 283-302.Inderscience Publication

Gupta, V.K. and Bindu Gupta, “Flexible strategicframework for managing innovation and technologyfrom perspective of continuity and change: a study ofauto ancillary SMEs in India”, Proceedings of PICMET’13: Technology Management for Emerging Technologiesheld at San Jose, USA from July 28-Aug 1, 2013, pp. 817-825.

SabnavisMadanJyotiWadhwani (2013), “Inflation: July2013”, CARE Ratings, Economics Division of Credit

Analysis &Research Limited [CARE].

Saket Nikhil (2013), “Rupee Depreciation and Impact onthe Economy”, Socio – economic voices, Sept-Oct,www.indiastat.com

Trading Economics (2013) ,http://www.tradingeconomics.com/india/current-accountIbnlive/ Router(2013), “US-made Moto X phone as cheapto produce as China-made

Apple iPhone 5",http://ibnlive.in.com/news/usmade-moto-x-phone-as-cheap-to-produce-as-chinamade-apple-iphone-5/418110-11.html,August 29, 2013

��

THE FIRST INDIAN BOOK ON“LEAN & AGILE SUPPLY CHAINS”.

Today, companies operate in an increasingly demanding environment that includesglobal competition, increasing pressures for cost reductions, quality driven complianceand improvements in on-time and in-full orders. In order to face the challenges,organizations are initiating corporate-wide Lean Program so as to compete in the 21st

Century. At this stage, many questions come to our mind. What are the types ofwastes, how do we identify them, what are the tools available, how do we implementand sustain Lean culture and what are the success stories? The book on “Lean &Agile Supply Chains” explains the concepts, while three special features are: casestudy covered at the end of each of the chapters, a special case study article on Leanand a compilation of five case studies of Indian Manufacturing Industries. This bookwill be the right resource for Professors, Business Managers, Supply ChainProfessionals and Management students.

The author Mr. R V Ramakrishnan, a Management & Training Consultant in the areasof Logistics & Supply Chain Management, is a Graduate in Engineering and Post-Graduate in Operations Management. He has over 38 years of experience havingworked in leading Engineering Groups. He retired as Deputy General Manager(Manufacturing) at Audco India Ltd. (L&T Group). He is a Distinguished Member ofthe Indian Institute of Materials Management and has received the “National Best FacultyAward” and “Life Time Achieved Award”


FUTURE OF SUPPLY CHAINS – LEAN AND AGILE

R V Ramakrishnan

Distinguished Member – IIMM Chennai

[email protected]

Agile organization : Prof. Martin Christopher hasdefined Agility “as the ability of an organizationto respond rapidly to changes in demand both in

terms of volume and variety. Agility is a business-widecapability that embraces organizational structures,information systems, logistics processes and, inparticular, mindsets”. Flexibi lity is an importantcharacteristic of an agile organization. In fact theconcept of Agility in business originated with the FlexibleManufacturing Systems (FMS). It was believed thatmanufacturing flexibility could be achieved byautomation that would enable rapid change by reducingset-up times so as to be more responsive to changes inproduct-mix or volumes. The idea of manufacturingflexibility was later extended to a wider business contextand the concept of Agile organization was conceived.As such, an Agile Supply Chain is very sensitive tochanges in the market and is capable of reacting to thereal demand. However, it is regretted that most of theorganizations are forecast-driven rather than demand-driven. As they not have data on actual customerdemands, they end up making forecasts based on pastsales resulting in building up of inventory.

A breakthrough was achieved in the last decade in theform of Information Technology, where demand data iscaptured directly from the Point of Sale (POS). Thishelped the organization to respond directly to theinformation received from the market. In addition, byusing Information Technology data is shared betweencustomers and suppliers, thereby creating a VirtualSupply Chain. Currently, both Electronic DataInterchange (EDI) and the Internet have enabled thepartners in the Supply Chain to act upon the same datawhich represents the real demand. Information that isshared between Supply Chain partners can be leveragedthrough process integration, joint development ofproducts and common systems. Many companies findit advantageous to focus on their core competenciesand outsource all other activities, which result ingreater reliance on suppliers and alliance partners. Thisis also called the ‘extended enterprise’ where there areno boundaries with a clear understanding of trust andcommitment. This concept of the Supply Chain as aconfederation of partners linked together as a networkis another form of Agility. It is being increasinglyrecognized that there are no longer stand-alonebusinesses that compete as individual entities but theyare all part of the Supply Chains. Success depends on

how well the organization can form closer relationshipswith its network partners and establish more Agilerelationships with their customers. It is important forthe organization to be able to leverage the respectivestrengths and competencies of its network partners inorder to achieve greater responsiveness to the needs ofthe market.

Lead-time gap : Since Agility is all about the speed atwhich a system can react, the total end to end time inthe Supply Chain has a direct bearing on theresponsiveness. One useful measure of the end to endlength is the cash to cash cycle time. The cash cyclebegins when commitments are made for the sourcingand procurement of materials and components requiredfor manufacture, it goes on through the entiremanufacturing and assembling process to the finaldistribution and finishes when payment is received fromthe customer. This total pipe line time is represented bythe number of days of inventory either in the form ofraw materials, goods that may be in transit, the timetaken to process orders and issue replenishment orders.The time taken to complete the process from goodspurchased to the delivered product is called the‘logistics-lead-time’. The following figure illustrates theway in which cumulative lead-time builds up fromprocurement to the final payment.

Most organizations face a basic problem in the timetaken to procure, manufacture and deliver the finishedproduct to the customer which is longer than the timethat the customer is willing to wait for the product. Thisdifference in time is called the Lead-Time-Gap. The periodthat the customer is prepared to wait for the delivery of


the product is the “customer’s order cycle’’. Mostorganizations find that the only way to reduce the gapbetween the above two times is by carrying an inventory.Many companies address this problem by trying toforecast the requirements of the market and on thatbasis build an inventory ahead of the demand. On theother hand, it is much better to reduce the lead-time-gap. A company that succeeds in matching the logisticslead-time and the customer’s order cycle has no needfor forecasts and no need for inventory. The total pipeline time can be considered in three parts: InboundLogistics, Internal Operations and Outbound Logistics.In the pipe line each one of these will give sufficientscope for time reduction - firstly the interface withsuppliers, secondly the company’s internal processesand lastly the interface with the customers.

� Interface with suppliers: One of the main factors

affecting the agility in a manufacturing unit is thelong replenishment lead-times often caused bysuppliers. Where complex products requiring alarge number of components or raw materials areinvolved, the pipe length will be determined by theslowest moving item. A company cannot maintainan integrated Supply Chain arrangement with alarge number of suppliers. Therefore the emphasisshould be in establishing closer ties with a smallernumber of strategic supply partners through linkedsystems and processes.

The aim should be to set up a network of keysuppliers who can synchronize their productionand deliveries with the requirements of thecompany. When the buyer and supplier are able toappreciate that they are vital links in a morecompetitive Supply Chain, there exist opportunitiesto establish information based concepts of VendorManaged Inventory (VMI). There should be clearvisibility of downstream demand. Data must becollected on real needs as far down the chain aspossible and it should be shared with upstreamsuppliers. A high level of connectivity between thefirm and its strategic suppliers is imperative inexchange of information on demand and inventorylevels.

� Internal processes: A major bottleneck of Agility lies

within the internal processes of the organization.In any established firm several business practiceswould have been in place for long period. Whensearching for re-engineering opportunities a crucialconcept is the idea of value-adding time. Value-adding time is the time spent doing something thatcreates a benefit for which the customer is preparedto pay. We could therefore classify manufacturingas a value-added activity.

There will always be some non value-addingactivities that are part of the processes but they docontribute to the final cost and hence must bereduced. If the Supply Chain process is flow-charted, it will provide opportunities to improve

the productivity through a process of re-engineering. By doing so, one would be able toidentify those processes that may truly be describedas value-adding.

Idle time in the logistics pipe line accounts formuch of the non value-added time. Quite oftenfinished inventory is created very early in theprocess. If one could find a way to put off the finalfinishing of the product, then the total amount ofpipe line inventory would be reduced and theflexibility would be increased.

� Interface with customers: In order to attain true

agility, one must be able to obtain informationregarding demand as close to the final point ofconsumption as possible. Companies that havebetter access to the customers’ usage data wouldbe able to plan better and also schedule theircapacity better and can even make products toorder.

By sharing of information, a closer connection canbe established with the market and this enablesthe creation of a Supply Chain that is moreresponsive. All the parties involved in the SupplyChain should be willing to act as partners whorecognize the need for open communication. Quiteoften a change in the attitude of the parties in aSupply Chain has resulted in significantimprovement in Agility.

Conclusions : Marketing has not recognized theimportance of Logistics and Supply Chain Managementas a key parameter in gaining a competitive edge overcompetitors. Today the business environment is morechallenging because of global shrinking and the fastchanges made by technology. Volati lity and anunpredictable demand are the norm in the marketplaceand hence organizations must recognize the need forAgility. Business leaders in today’s world are alreadyadopting strategies that are characterized by a SupplyChain that has Agility as its important feature. Naturallythese corporations will be the best equipped to survivethe uncertain markets of the 21st century. The followingsteps promote Agility.

� to replace Inventory by Information

� to reduce non value-adding activities

� to work jointly with suppliers to reduce in-

bound lead-times

� the final assembly of the product to be

postponed

� to manage processes and not just functions

� to utilize appropriate performance parameters

CHARACTERISTICS OF AGILE SUPPLY CHAIN : Prof. MartinChristopher identified four key distinguishingcharacteristics of Agile Supply Chains as - MarketSensitivity, Virtual Integration, Process Integration, andNetwork Based, as indicated in the figure below:


Martin Christopher

� Market Sensitivity: An Agile Supply Chain should

be able to react to the real demand and notforecasted demand. In actual practice organizationscontinue to make forecasts based on past salesfigures and plan their strategy. With thedevelopment of Efficient Customer Response (ECR)in the last decade, it has been possible to transformthe Supply Chain from a ‘Push’ system to a ‘Pull’system, where the partners involved in the chainform interdependent relationships. Product isreplenished using Point of Sale (POS) data.

� Virtual integration: One reason why response time

of Supply Chain is not reducing is that the membersare usually in different geographical locations. Theuse of Information Technology to enable buyers andsuppliers to share data is creating a virtual supplychain. All the partners of the Supply Chain are nowconnected through EDI or Internet so as to sharereal time information. Virtual integration isessential in streamlining all the aspects of an AgileSupply Chain.

� Process Integration: Supply Chain Management can

involve functions like joint product development,inventory management, shipment of goods etc. Inall such activities the buyers and suppliers cancollaborate through process integration. This wouldhelp the partners to produce and deliver the productwith minimum lead time and cost. If processintegration is to succeed, there must be trust andcommitment among the partners. They must have ajoint strategy and the determination to make it work.

� Network based: In today’s market every business

considers itself as part of a Supply Chain ratherthan as individual competing entities. Now it is aperiod of network competition in which the onewith a better structure and co-ordination and whichmanages the relationships between its partners,can face competition better. Many companies havehowever managed to build Supply Chains consisting

of extended groups where each member benefitsfully from the core competence of the other. Thesegroups ensure a seamless flow of materials andinformation through their Supply Chains in orderto maximize their output. This makes theorganization Agile with an increased ability torespond to customer demand faster and with greateraccuracy.

Demand Chain : In the traditional approach theconcentration is on optimizing production through acalculation of economic batch quantities. It is a ‘push’type of system where a product is produced ahead of itsdemand usually based on a forecast and then held inthe market place awaiting customer demand. The modelsuggests that the Supply Chain should become a ‘DemandChain’ wherein everything that is moved, handled orproduced should ideally be in response to a knowncustomer requirement. An organization tries tostreamline the Supply Chain so that there is an efficientflow of materials from source to user. The ‘demand chain’focuses on its effectiveness and is essentially market-driven and it responds faster to the demands of themarket. Agility holds the key to this transformation froma Supply Chain to a Demand Chain.

LEAN AND AGILE SUPPLY CHAIN

Introduction : In today’s marketplace it is the SupplyChains of different corporations that compete and theirsuccess is determined by the end user. If an organizationis to thrive or even survive, it is necessary for it toprovide the right product at the right price and at theright time in the hands of the consumer. In order toestablish an efficient Supply Chain the company has tofocus on customer satisfaction and an understandingof the market. In today’s context, progressiveorganizations have to maintain a delicate balancebetween being efficient (Lean) and responding rapidlyto changes in consumer demands (Agile) at the sametime producing quality products using the latesttechnology (Six-Sigma). Lean-Agile concepts should beextended beyond just the manufacturing of a product toinclude all critical processes involved in every phaseof the Supply Chain, which include the network, exporterand importer, ports, freight handlers, vendor,manufacturer, distributor, retailer and customer. Tounlock the true value of the methodology throughoutthe global Supply Chain the basic principles of Leanand Agile must be applied along with integratedsolutions in advanced planning, supply chain planning,warehousing, logistics, collaboration and businessintelligence.

Appropriate Methodology : In the Supply Chain systems,two popular prototypes are ‘Lean Thinking’ and ‘AgileManufacturing’. Agility makes use of market data andthe concept of a virtual corporation to exploitopportunities for profit making in a market that isvolatile. ‘Lean’ focuses on developing a value chain thateliminates all waste including time and enables a levelschedule. The choice of a particular approach dependson the circumstances under which it is required to


operate. For example when the demand is predictable,the volumes are high and the requirement for variety islow, a Lean approach is appropriate. But in a situationwhere the requirement for variety is high andconsequently the demand is less predictable, we canutilize Agile approach. The figure below illustrates howthe three critical dimensions variety, variability andvolume determine the choice of methodology - whethera Lean or Agile approach makes greater sense.

Whichever approach one may adopt, the product qualityhas to be high. The other requirement is that the totallead-time defined as the time taken from the moment acustomer has raised a request for a service or productto the moment it is delivered has to be minimal. Toenable Agility the total lead-time has to be reducedbecause the demand is highly volatile and difficult toforecast. An effective reduction of cycle time also leadsto substantial bottom-line improvements in cost ofmanufacturing and productivity. In Lean Manufacturingthe lead-time is to be minimized because any extra timespent on the process is a waste. While Agility providesvalue in terms of making a product readily available tothe customer, the cost of production and hence salesprice is determined by Leanness.

AGILE AND LEAN SUPPLY CHAIN STRATEGYThe approach

To successfully implement a Supply Chain strategy, onehas to consider the following aspects, irrespective ofthe methodology adopted, Lean or Agile:

� Market knowledge: In both methodologies the

components of a Supply Chain must have thecustomer in focus. Which particular approach isbest suited for a given set of circumstances will bedecided by the market.

� Integrated Supply Chain: The aim of an integrated

Supply Chain is to enable a seamless movement ofmaterials, cash, resources and information fromend to end of the process, This will lead to a betterflow of materials and information thereby reducinglead times and waste.

� Lead time compression: The Lean methodology calls

for the elimination of all waste or ‘muda’. For LeanManufacturing time compression is very essential.

The Agile philosophy requires a Supply Chain thatis responsive. This also necessitates a lead timecompression in terms of information flow as wellas flow of material because there is need to respondfast to a changing demand environment.

� Waste elimination: Lean manufacturing focuses on

the use the minimum resources for producing aproduct. This is achieved by eliminating allprocesses that do not add to the end value. It isrecognized that eliminating muda throughout theSupply Chain is a critical element that will improvethe efficiency of the entire system.

� Market responsiveness: Agile Supply Chain is able

to react quickly to inputs from the market. To beresponsive one should be able compress lead-timesboth in terms of information and material. It shouldbe able to switch to a wide variety of products atshort notice.

� Robustness: An Agile Supply Chain must be robust

in the sense that it should be able to withstand allsorts of variations and fluctuations and in fact bein a position to capitalize on these to maximizeprofits.

� Level scheduling: Lean Supply Chains are

characterized by their capability to reduce demandvariation by optimizing the processes andstreamlining the flow of materials. However, whendemand changes suddenly there could be wasteeither because production has fallen below therequired capacity or because it necessitatesmaintaining larger buffer stocks.

Supply Chain Strategies

Here are the most commonly used Supply ChainStrategies.

� Buy to Order (BTO)

� Make to Order (MTO)

� Assemble to Order (ATO)

� Make to Stock (MTS)/Ship to Stock (STS)

The figure shown above depicts a set of simplified supplychain strategies with the ‘decoupling point’ marked asa stock holding point. The decoupling point divides theSupply Chain into two parts, one which responds directlyto the customer and the other that uses forwardplanning and a strategic stock to buffer against the


variable demand. The positioning of the decouplingpoint depends on the maximum lead-time that thecustomer is prepared to wait for the product and thepoint at which the variability in product demanddominates. At the lower end from the decoupling pointall products are pulled by the customer, which meansthat they are market driven. On the upper side of thedecoupling point the chain is initially driven byforecast. The following are the Supply Chain structureshighlighting the key characteristics defining asuccessful implementation of Lean and Agile paradigm.

� Buy to order (BTO): Buy to order is an appropriate

Supply Chain strategy if the products beingproduced are unique and have the same rawmaterials and where the customer is prepared towait for long period. In this case the demand ishighly variable. If business holds a stock there isthe danger of it become obsolete. Further if theproduct does not succeed in the market the SupplyChain would not have any exposure to the costs ofover stocking.

� Make to Order (MTO): With a make-to-order

structure a Supply Chain will be able to change todifferent products provided they are made from thesame raw materials. It is also capable of dealingwith problems such as varied locations, volumesand product mixes. Although the lead time isreduced the customers may still have to wait forlong periods to get the product they want. Thedemand for the product can be variable and therecan be a high level of customization both in termsof the combinations and the amount of the basicmodel that has to be customized. The MTO structuresuffers from a risk that the chain may have to holdraw materials and components in stock.

� Assemble to Order (ATO): In an assemble-to-order

Supply Chain structure, the customization part maybe postponed until as late as possible. The chainwill be able to respond to a varied product mixfrom within a range of products, whether they arecustomized or not. The lead-time which will dependon where the final assembly takes place will bereduced. There is however the risk of over stock orunder stock but since the products (components)do not have the same value as the assemble product,the business is protected against the risk ofobsolescence.

� Make to Stock (MTS) / Ship to Stock (STS): Both the

above strategies represent cases where the productinvolved is a standard one from within a definedrange.

The MTS strategy means that the chain can copewith demand in varied locations but needs a steadyoverall demand of the standard product. On theother hand the STS strategy provides the standardproduct in fixed locations. The members of theSupply Chain should be able to forecast demand

accurately if either strategy is to be adopted. Theaccuracy of their forecasts is critical so that theycan hold the correct amount of stock and not runthe risk of over-stocking or stock-outs.

Lean and Agile Paradigms : Although the Lean and AgileStrategies may appear to be incompatible at first sightthey do have many common elements. We can find thatthe two strategies can co-exist in a single business ifthey are properly managed. There are three establishedways in which the two paradigms have been put together:

� The Pareto curve approach: The Pareto Law will

apply in the case companies that are manufacturingor distributing a range of products, and this can bemade use of to determine supply strategy. From just20% of the total product line 80% of the total volumewould be generated.

Naturally the way in which the 20% is managedwould be different from the way the remaining 80%is managed. For example it is possible that the top20% of products by volume might be morepredictable and hence lend themselves to Leanprinciples of manufacture and distribution. Theremaining 80%, which is slow moving and lesspredictable would require an Agile strategy for itsmanagement.

� De-coupling point approach: Another combination

of the Lean and Agile prototypes may be effectedthrough the creation of a ‘decoupling point’ usingthe concept of strategic inventory. In this case theinventory is held in some generic or modular formand the complete final assembly or configurationis completed when the requirement of the customeris known. This approach also known as‘postponement’ is being increasingly employed byorganizations in a wide range of industries. Theconcept of postponement allows the company touse the Lean method up to the decoupling point andswitch to the Agile strategy after that point.


Lean Agile

• Forecast at generic level

• Economic batch quantities

• Maximise efficiencies

• Demand driven

• Localised Configuration

• Maximise effectivenessStrategic

Inventory

Lean Agile

• Forecast at generic level

• Economic batch quantities

• Maximise efficiencies

• Demand driven

• Localised Configuration

• Maximise effectivenessStrategic

Inventory

� Hybrid strategies: In as much as there are two

strategies, namely Lean and Agile, there will bemany companies that have to choose one or theother strategy. However, there will be manyopportunities to combine these two strategies andadopt a ‘hybrid’ strategy. Such strategies recognizethat in a mixed portfolio of products there will besome products whose demand is stable andpredictable while for some others the converseholds. It therefore follows that strategies need notnecessarily conform to a particular prototype butcould be Lean part of the time and Agile for theremaining part. Although the origin of the twostrategies, Lean and Agile, is from the domain ofmanufacturing and they are distinct concepts theycan be applied together to provide value in anextended enterprise.

LEAGILE SUPPLY CHAIN

Introduction :With the globalization of the economy and the growingdemand for products companies are forced to finddifferent strategies to meet the changing challenges.They have been forced to develop distinct competencesto cope with the demands of customers. Survival in acompetitive market requires a constant search for newstrategies so that one could stay ahead of thecompetition.

With the globalization of the market the competitionhas become fierce and businesses are required tostreamline their strategies to stay alive. They have tomeet the demands of the customers as regards to time,variety, quality and price. Companies are required tobe ready with their strategies to meet not only worldclass competition but also demand fluctuations. Thedifferent prototypes that are adopted are:

� Lean and Agile Manufacturing: In the case of a

company adopting mass production techniquesthere is usually not much variety in the productline and they are generally produced sequentially.The basic principle of Lean Manufacturing is massproduction to which JIT or just-in-time principlesare applied. This application aims to reduceproduction losses and minimize production costs.Only a minimum inventory is maintained at theplant thus reducing defects and enabling themanufacture of a larger variety of products.

Agility refers to the ability of an organization tostand out in a competitive environment of bothcontinuous and unexpected changes. The companyresponds quickly to the fluctuations in customerdemands with respect to both variety and valuation.Agile Manufacturing responds with flexibility,productivity, cost effectiveness and maintenanceof quality. Lean strategies aim at totally eliminatinglosses in manufacturing processes including timealthough they lack the ability to respond quickly tofluctuations in demand. This response is enhancedby an Agile Manufacturing strategy.

� Lean and Agile Logistics: Logistics is a set of

functional activities that are repeated several timesthrough the Supply Chain converting raw materialsinto finished products and adding value in the eyesof the customer. Its function is to produce the rightproduct at the right time and at the right price andplace it in the hands of the customer.

The main objective of logistics management is tomeet the demands of the customer while keepingthe cost affordable. Lean strategies are meant toreduce or even eliminate losses in themanufacturing process. But they lack the ability torespond to fluctuations in customer demand. TheAgile strategy on the other hand allows the businessto respond quickly to fluctuations. While the Leanlogistics aims at eliminating losses the Agilelogistics focuses on maximizing the company’sresponse to changes in customer demand.

� Lean & Agile Supply Chains: The Supply Chain

represents a network of functions that includesourcing for the material, its conversion intofinished products and their distribution to thecustomers. Those Chains that use a Lean strategyaim to use the global supply and identify thebenefits of cost reduction and balancing them withthose of quick response. To meet the challenges ofthe changes in variety and volume of products indemand in the market the chain has to be Agile.The differences between Lean and Agile, are givenbelow:

Attributes Lean Agile

Products Functional Innovative

Demand Predictable Volatile

Product life cycle Long Short

Product variety Low High

Customer drivers Cost Assortment

Profit margin 5% - 15% 20% - 60%

Average forecast error 5%-10% 30%-40%

Forecast approach Calculative Consultative

� Leagile Supply Chains: The Lean concept is used

where the demand for a product is fairly stable.The focus is to reduce waste of material as also


time and energy thereby maximizing profits andbringing down production costs. A concept of Agileis used when a company is operating in a volatilemarket.

Lean and Agile are different strategies with differentgoals but they can at times be combined in a singlemodel to enable the success of a Supply Chain. Forthe success of either strategy market knowledge isessential and which strategy will be more suitedwill depend on the position of the decoupling point.A combination of the two paradigms is called‘Leagile’. It is defined as a combination of Lean andAgile paradigms which, when applied to a SupplyChain, will enable a rapid response to volatilemarkets.

POSTPONEMENT STRATEGY AT ASIAN PAINTS– A CASE STUDYContributed by: Dr. Sarika Kulkarni,Management Consultant, Mumbai.

Asian Paints, the market leader in Paints, has acomplex Supply Chain. The Decorative Business Unit(DBU) manages 750 types of Raw Materials andpacking materials, from 500 Vendors, 5Manufacturing plants, 13 Processing Centres, 7Regional Distribution Centres (RDC), 76 Depots,serving 19,000 Dealers across the country, to Supply1,500 SKUs of finished products.

Asian Paints have successfully employed the“postponement” Strategy in its emulsion productscategory. The Company offers four emulsion brandsand in turn, each brand offers 150 – 250 shades. The

Company realized that offering a wide variety ofcolour shades is essential in the emulsion market.An emulsion comprises of a “base” and a combinationof “strainers”; the base provides the functionalaspects while the strainers provide the requiredshades. At Asian Paints, the mixing of the base andthe strainers, also known as “tinting”, is carried outat selected Dealers’ shop in major cities across thecountry.

This concept is called “COLORWORLD” is operatedwherein a Computer is installed for choosing theshades and preparing the paints. A prospectivecustomer can walk in to the Dealer’s shop; choosethe colour shades for the different rooms of the house.On knowing the sizes of the rooms to be painted, theComputer Software could calculate the quantity ofpaints required.

When once the customer finalizes his order, theComputer takes over the mixing of the paints to matchthe colour shades selected and delivers to thecontainers for sale, on the spot. As far as the Dealeris concerned, he needs to maintain stock of the basesand strainers, which can be replenished from thenearest Regional Distribution Centre.

It can be seen from the above that the finalprocessing of the product is “postponed” to the laststage of the Supply Chain, which is certainly a win-win situation both for the company and theircustomers.

(Extract from the Author’s Book on Lean & Agile Supply

Chains)

��


SUSTAINABLE MATERIAL MANAGEMENTIS NEED FOR TODAY

M.Z.QUADRI, MEMBER IIMMGOVT INDUSTRIAL TRAINING INSTITUTE,WASHIM

[email protected]

Abstract : We live in a material world. How oursociety uses materials is fundamental to manyaspects of our economic and environmental

future. Our use of materials is very large and increasingwith population and economic growth. Our use ofmaterials now challenges the capacity of the Earth air,water and land to withstand the many resultingenvironmental problems. This situation fundamentallyaffects many other aspects of our future, such as theeconomy, energy and climate. We need to fulfill ourhuman needs and prosper while using less material,reducing toxics and recovering more. If we want theIndia to be competitive in the word of economy, thesustainable use of materials must be our vision andmission

Key Words Sustainable Material Management, Reduce,Reuses Recycle, Waste.

Introduction : What is a sustainable MaterialsManagement (SMM) Sustainable MaterialsManagement (SMM) is an approach to serving humanneeds by using/reusing resources most productively andsustainably throughout their life cycles, from the pointof resource extraction through material disposal. Thisapproach seeks to minimize the amount of materialsinvolved and all the associated environmental impacts,as well as account for economic efficiency and socialconsiderations. and the Sustainable Consumptiondefined “sustainable consumption” as: “The use ofservices and related products which respond to basicneeds and bring a better quality of life while minimizingthe use of natural resources and toxic materials as wellas the emissions of waste and pollutants over the lifecycle of the service or product so as not to jeopardizethe needs of future generations.( By Oslo University1994 Symposium) An effective sustainable materialsmanagement strategy, therefore, needs to begin at thematerials extraction stage and address a material’s fulllife cycle, including impacts that are only indirectlyassociated with the material. Narrow focus on how a“waste” is managed at the end of life misses the bulk of“waste” associated with a “material; we need to lookupstream, including at different ways of designingproducts or processes in the first place. Applying SMMcan generate benefits by encouraging policymakers totake a systems view of materials that flow among theeconomic, social and environmental systems and tooptimize all three aspects of sustainability as they relateto materials Sustainable materials managementconserves resources, reduces waste, slows climatechange, and minimizes the environmental impacts of

the materials we use The following is the way ofsustainable material management

1. Cradle to Cradle and philosophy of “Waste EqualsFood”

2. Zero Waste

3. The Natural Step

4. The Ecological Footprint

5. Least-Cost Planning

1. Cradle to Cradle and philosophy of “Waste EqualsFood” : Sustainable materials management means morethan waste prevention and waste processing Wastematerials are, first and foremost, symptoms ofmaladjusted manufacturing and consumptionprocesses that we must change to ensure that there isas little residual waste as possible. And what is releasedfrom waste flows must be used as raw materials forother production processes This cradle-to-cradleprinciple forms one of the pillars for sustainablematerials management.” Architect William McDonoughtheory of “Cradle to Cradle,” explained in their bookCradle to Cradle: Remaking the Way We Make Things. Intheir book, McDonough and Braungart criticize mostenvironmental initiatives (including “reduce, reuse,recycle”) as examples of “eco-efficiency” Recycling andcomposting are criticized for distributing toxicmaterials and wasting resources as a consequence ofdown cycling, a consequence of failure to designproducts for optimal recycling. For example, metals incars are a variety of higher- and lower-value alloys, butcurrent recycling practices mix all steel together,compromising the higher quality steel and copper anddrastically reducing its future use. “The agenda torecycle has superseded other design considerations

2. Zero Waste : “Zero waste” is a difficult framework tocharacterize because it means different things todifferent people Zero Waste is a goal that is ethical,economical, efficient and visionary, to guide people inchanging their lifestyles and practices to emulatesustainable natural cycles, where all discardedmaterials are designed to become resources for othersto use Zero Waste means designing and managingproducts and processes to systematically avoid andeliminate the volume and toxicity of waste andmaterials, conserve and recover all resources, and notburn or bury them Implementing Zero Waste willeliminate all discharges to land, water or air that are athreat to planetary, human, animal or plant health.”According to the Zero Waste International Alliance,


“Zero Waste involves moving from the back end of wastedisposal to the front end of resource management. If aproduct can’t be reused, repaired, rebuilt, refurbished,refinished, resold, recycled or composted, then it shouldbe restricted, redesigned, or removed from production.”

3. The Natural Step : The Natural Step is derived fromthe work of Dr. Karl-Henrik Robèrt, a Swedish cancerdoctor who became interested in issues of sustainability,and attempted to derive the basic conditions of societythat would lead to the continued well-being of humanlife and the environment. He derived what he called thefour system conditions of sustainability, which has beenrewritten by the Natural Step non-profit organization tobe more understandable to non-scientists as the FourConditions of sustainability

1. Concentrations of substances extracted from theearth’s crust - eliminate our contribution to theprogressive buildup of substances extracted fromthe Earth’s crust

2. Concentrations of substances produced by society-eliminate our contribution to the progressivebuildup of chemicals and compounds produced bysociety (for example, dioxins, PCBs and DDT )

3. Degradation by physical means - eliminate ourcontribution to the progressive physicaldegradation and destruction of nature and naturalprocesses

4. And, in that society, people are not subject toconditions that systemically undermine theircapacity to meet their needs - eliminate ourcontribution to conditions that undermine people’scapacity to meet their basic human needs (forexample, unsafe working conditions and notenough pay to live on). The Natural Step is alsoadvantageous in that it clearly addresses materialsand their impacts in all phases of their lifestyle,from manufacture through use through end-of-lifemanagement

4. The Ecological Footprint : The concept of “EcologicalFootprints” is to convert consumption-basedenvironmental impacts into a single variable: theamount of land required to live sustainably at that levelof consumption. A person’s ecological footprint is equalto the land (and water) needed to produce the food andgoods that the person consumes, plus the land neededto absorb the carbon dioxide that the person produces,including carbon dioxide generated from producing thefood and goods consumed and from all other uses ofenergy, such as transportation and home heating

5. Least-Cost Planning : Least-cost planning extends thisconcept to decision-making, including policymaking:policy (or other) options are evaluated for their costs,and the options with the lowest costs are implementedfirst. Policy makers could make decisions using least-cost planning principles, acting as if the prices actuallyreflected true costs and minimize waste in cost planning

Benefits of Sustainable Material ManagementA-Environmental Benefits

1. Conserves natural resources2. Reduces energy consumption3. Conserves landfill space4. Reduces environmental impacts across the life

cycle by decreasing the demand for virgin products

B-Economic Benefits

1. Reduces disposal costs and may reduce materialhauling costs, thereby reducing overall projectcosts

2. Can reduce purchasing costs since non-virginmaterials are often less expensive than virginresources

3. Can enable manufacturers to be more competitivewith their works given the reduced costs

4. Creates employment opportunities and economicactivities in the reuse and recycling industries

C-Performance Benefits

1. Materials reclaimed, salvaged, or otherwise reusedcan perform as well as or better than virgin productsin many applications

In Short…..Sustainable Materials Management (SMM) addressesthe need to protect and sustain our water, air,agricultural land, and human communities. Sustainablematerials stewards are people that devote their timeand effort toward reducing and recovering valuablematerials where they originate. According to the NYSDepartment of Environmental Conservation, SMMrequires that all the necessary players in the productionand supply chain be better materials stewards—productmanufacturers, distributors, retailers, consumers, andgovernment (NYSDEC Beyond Waste Plan, 2009).

Reduce = Use less or use products with a low life cyclecost Example: Choose products with less packaging orsustainable packaging

Reuse = Use again, create a new use, or donate Examples:Reusable water bottle; old clothes as rags; donate olditems

Recycle = Know what your community accepts

Compost = Do it at home, the office, or at school

Reference

1. A Guide to Reduce Greenhouse Gas Emissionsthrough Materials and Land Management Practices

2. Recover Your Resources: Reduce, Reuse, and RecycleConstruction and Demolition Materials at LandRevitalization Projects 2003

3. Oregon Department of Environmental Quality 2002

4. Employment Effects of Waste Management Policies2002

5. Sustainable Material Management “ By OsloUniversity 1994 Symposium”.

��


REPORT ON WORLD CONGRESSC.SUBBAKRISHNA

NATIONAL PRESIDENT - IIMM

[email protected]

The world congress of IFPSM which is an apex bodywith 40 member countries was held at Bangkok on20th and 21st Sept 2013. IIMM is a charter member

of IFPSM. The event had several other programs such aspre CONGRESS seminar, IFPSM Board meeting, Councilmeeting and Asia Pacific meeting on17th, 18th and 19thSept respectively.

The pre congress workshop an International Conferenceon the theme "Towards Purchasing Excellence on 17thSept. I was one of the speaker with the topic on "Statusof SCM in India and challenges and opportunities " Idwelled upon few Case examples, best practices and onEducation Courses being offered and how IIMM isupdating the courses on the market demand. The presentIndian economy and it's growth prospects vis a vis it'simpact on SCm was discussed. The challenges beingfaced particularly inadequate progress in logistics andinfrastructure was also browsed. The opportunity, withparticular reference to FDI opened up in retail sector inIndia, was of interest to the delegates. india is seen as aIT capital the world as assessed by me in a quick surveyin the conference where more than 400 delegates werepresent.

The president of IFPSM Mr. Soren Vammen spoke onpurchasing excellence in globalized world, Prof. Stephen,VP, Asia pacific on Green supply chain, what it takes toWIN with professionalism as also The future Challengeof Supply Chain of 2030 and Prof. Karandee, fromThailand University, on ASEAN consumer challenges.

18th was the Board meeting of IFPSM and I am includedin the Board of IFPSM representing IIMM, INDIA. 19thwas Council meeting of IFPSM where 26 council membersrepresenting 21 countries attended. Council delegatesthe possible value proposition that they would like tosee IFPSM highly developed based on differentperspective. There was another meeting based on aregional focus which discussed how meetings coulddevelop, from which the following emerged from AsiaPacific group where I was one of the participant.

1. Business plan to develop2. Collaborations3. Use of IT4. Expertise Directory.5. Stronger Regional Activity

The groups also addressed ways in which IFPSM coulddevelop it's income in a sustainable way beyond merelydepending upon subscription income. Few importantoutcomes among others are :1. Relation with world organization2. Wider membership base3. Courses, Royalties, Franchises.4. Sourcing network.

5. Use IFPSM brand.

I have offered for Asia Pacific Meeting in India in thefirst half of the year 2015. On 20th, morning at 7:30 amthe registration of the world congress started andpromptly 8 30 am the program started. Inaugurationwas devoid of any ceremonial function and is a simpletalk by the President Mr. Soren. No special Dias or MCand no bouquet or mementoes. The conference kit is anordinary shoulder bag of cotton which is Eco friendly.There were about 120 delegates coming from about 26countries with majority from Thailand. The PSCM,Bangkok, is the host for the event.

There were plenary sessions and the delegates have theoption to chose the sessions depending upon theirprofessional interest. The sessions attended by me areas follows.

How to keep your Educational Programs competitive. ByCheryl Paradowski, SCM Association of Canada. Theyhave membership of 7500 with 10 territorial Institutes.They have earned IFPSM s Global Standard. They haveseveral courses on SCM to offer and invariably allcourses include soft skills. Content changes on regularbasis and On Line delivery mode with focussedconstantly on feedback mechanism are the techniqueswhich has helped SCM Canada to stay competitive.

Charles Holden, the DG of IFPSM took a session andintroduced AERCE model of Spain which undertaketraining auditors, provide auditors to certificationbodies, provide software tools for certification bodieswhich will be internationally relevant. This is in linewith Bureau Veritas, a world leader as well, in testing,inspection and certificate services. They are ready tocollaborate with any associations interested in applyingthis business model.

Harsha, NC from Bangalore, was a speaker on the subjectof Social Media. He brought out the opportunities ofusing social media effectively as a major "Value add" tothe membership expectation. He highlighted how socialmedia can be harnessed to maximize engagement withthe membership and wider market without makingexcessive demands on managing the resource. Heexplained the benefits and challenges of suchopportunities as Webinars, Video conferencing,Facebook, Twitters etc., The world congress curtain wasdown by 4 30 pm on 21st with a rap up by the President.The next world congress in 2015 is planned at Barcelona.

Overall, although not much of high tech subjects wereslatted, a good opportunity for networking and also tocollaborate for programs exchange and to improve theprofessionalism.

��


ENHANCE IIMM BRAND IMAGE

THROUGH SOCIAL MEDIATEJ K. MAGAZINE, Management Consultant & Corporate Trainer;

Director – Traam Services Private Limited &

Director Corporate – MM Auto Industries Ltd.- [email protected]

Modern era is that of information technologycombined with telecom & electronics. ICE hasconverted the world to a global village and

boundary-less humanity. Most important people, be that– PM Manmohan Singh; Gujarat CM NarendraModi; CMof J&K Omar Abdulla; industrialists like KiranMazumdar, Film Stars and all – to name a few, use SocialMedia to interact with people. They convey their pointof view on various issues through Twitter, LinkedIn,Facebook& You Tube etc.

Indian Institute of Materials Management @ NationalHQ Navi Mumbai, through its 45 Branches, severalchapters – all over India (www.iimm.org) and inassociation with International Federation of Purchasing& Supply Management, have over the years developedexcellent infrastructure& expertise in academics,consultancy, training & research, covering variousspecialised areas of Materials & Supply ChainManagement like Stores, Purchase, Negotiating Skills,Distribution & Logistics Networking, InventoryManagement, Benchmarking in Inventory Management,Cost Management of Inventories , Outsourcing, BuyerSeller Partnerships, Vendor Based Inventories, GreenPurchase Culture, Waste Management¸ application oflatest I.T. tools applied in movement & traceability ofinventory (warehouse to warehouse globally) i.e. RFID(Radio Frequency Identification) etc. etc.

But, IIMM& its expertise is lesser known in higherechelons of SCM hierarchy in Industry & Commerce,Industrial & trade associations, Central & StateGovernments, a large section of senior MM & SCMprofessionals. IIMM is an NGO having a huge nationalnetwork managed without any government aid, run byprofessionals with their own time – talent & money. It isneither always possible for working professionals todo aggressive marketing for IIMM; nor IIMM has thefinancial capacity enough for aggressive advertisingcampaign in print & electronic media. IIMM and itsmembers need to take best advantage of very highglobally visible SOCIAL MEDIA having Twitter, LinkedIn,Facebook, YouTube etc. as the popular & activenetworks.

Social Media has proved to be very fast and full ofimpact on people, compared to traditional print &electronic media, due to the “technology of speed”,accuracy and hardly any cost involved, besides,flashing one’s point of view to whole world withinfraction of a second. But, it appears to be order of theday to use social media for posting flimsy messagesnot concerning or benefitting any one, including thewriter, like the young office going girl posted onFacebook: “today is a holiday, I am enjoying” or anotherperson posted: “Sunset is visible, night will fall soon,”etc. etc.

I am a member of social media sites like Twitter, LinkedIn& Facebook. But, I am not a “social media buff.” Idooccasionally indulge in expressing my thoughts onvarious professional, social and national issues onthese sites. Quite a few times the response (and sometimes appreciations too ) is amazing; that too fromunknown people. This provides a sense of satisfactionand food for thought to make meaningful use of thesocial media for constructive purposes.

Recently the “Food Security Bill” was a hot topic in themedia and political domains. Media getting the rightfodder for debates and politicians / political partiestaking credit, discrediting opponents and vice versa.No one talked on how to manage the Supply Chains,keeping in view the envisaged coverage of more than800 million of 1250 million + population living inremotest corners of the country. Government does notpossess a network of SCM professionals – who canmanage efficiently, with speed, timely deliveries, withoutmalpractice & wastage and with cost effectiveness. TheSCM professional in me urged me to think on theseissues. I concluded that IIMM expertise can provide theright answers. How to convey the message to the rightquarters in the government and those who matter ? Thesocial media!

I used my Twitter account: @traambiz on August-08,2013 and posted the Message about IIMM capabilityto assist the Government of India and State governmentsfor managing Supply Chains as per the theme of “FoodSecurity Bill”, in 4 bullets, as under:

“**Food Bill a paper reality, but lack of storage bad &corrupt distribution system will make it failure for 80crore eligible to reap benefit”.

“**It needs Supply Chain Management expertise andnot bureaucracy to ensure distribution success a perFood Security Bill in far and wide India.

“**GOI must hire Supply Chain Management Expertsfrom Indian Institute of Materials Management iimm.orgto assist in FoodSec supply”.

“**Indian Institute of Materials Management have SCMexperts to guide on managing distribution of FoodSBillin all states through 45 branches.”

All the 4 bullets were mentioned @pmoindia on August-14, 2013 , to give message in the right quarters. It isnow for Government of India and the State Governmentsto act fast and requisition the services of SCMprofessionals from IIMM for ground level success of“Food Security Bill.”

The thought process expressed in this article shouldalso give impetus and create enthusiasm within IIMMand its members to make regular extensive use of socialmedia for popularising BRAND IIMM .

��


VIBRANT ROLE OF SUPPLY CHAIN MANAGERS, TO COMBAT WITH

DOWNGRADE GLOBAL ECONOMIC CIRCUMSTANCES; AN INNOVATIVE

APPROACH -TOWARDS INDUSTRIAL AND SERVICE EXCELLENCE

RABI NARAYAN PADHI

Life Member IIMM VIZAG Branch

[email protected]

Abstract : Supply chain managers have atremendous impact on the success of anorganization. These managers are engaged in

every facet of the business process – planning,purchasing, production, transportation, storage &distribution, customer service, and more! In short, thesemanagers are the “glue” that connects the different partsof the organization. Their Vibrant performance helpsorganizations control expenses, boost sales, andmaximize profits.

Impact of the Financial Crisis On Globalized Supply ChainsIn Emerging Markets: The current financial crisis has ledto sudden changes in emerging markets. For a littlewhile, optimists hoped that, first, emerging markets were“de-coupled” from the economic slowdown of the Westand,

Secondly, that they could even recover faster than therest of the world and provide the engines that couldpull the world out of the economic recession. However,evidence shows that the first statement may not be quitetrue. In fact, the negative impact of the global recessionon emerging markets may have been so strong that itmay take quite a while before they fully recover.

Key Words: (Supply Chain, Global, Economic, Crisis,Vibrant, Recession , Slowdown, Emerging Markets )

Emerging India ; Current Situation

1. In the past decade, India has achieved considerableGDP growth. In 2007, the GDP amounted US$ 1.1trillion, with continued spurt in economic growthto a five-year annual average of 8.8 percent.

2. It is the second fastest growing economy after Chinaand one of the most promising destinations forforeign investments in the world. When measuredat purchasing power parity (PPP) exchange rates,India ranks fourth next only to the U.S., China andJapan.

3. The gloomy economic outlook caused by the currentfinancial crisis did not leave India unscathed either.

4. Indias IT industry lobby, reveals that the IToutsourcing sector is facing decreasing clientsbudget, pricing pressures, the threat of risingprotectionism developed economies, andcompetition from other low cost countries such asChina, the Philippines and Costa Rica.

5. The industry, which is at the basis of Indiaseconomic growth, might therefore miss its US$ 60billion target for next few year

6. The global crisis has spread across the world andresulted in an abrupt fall in exports all over theworld. A sharp slowdown in India’s foreign tradeadded to the woes of Asia’s third-largest economyand piled more pressure on government to takesteps to boost economic growth.

7. India, Asia’s third largest economy grew with a rateof 4.8% slightly upward from the expected 4.7% inthe previous three months. The government expectsthe economic growth to recover to 6% in the currentfiscal, from the decade low level of 5% recorded in2012-13.

8. Putting back India to a growth trajectory of 8% andabove needs a herculean task of narrowing downCurrent Account Deficit, Strengthening Rupee,Lowering Inflation, Increasing foreign Investments,upgrading infrastructure & logistics sector, boostingExports and Manufacturing etc.

9. The Current Account Deficit has reached to 6.7% inlast quarter and is blamed for Weakening Rupee.Gold import is one of the key factors resulting inhigh Current Account Deficit (CAD). WeakeningRupee and high rate of gold import poise a fatalcombination for Indian GDP Growth. So is the casewith Oil imports. With more imports and lesserexports disrupting the balance money and thusdriving down the value of rupee against dollar.Government with the aim of narrowing down theCurrent Account Deficit has increased the import


duty on Gold from existing 8% to 10% which helpIndia save about $ 4 Billion and a compression inOil demand will also save about $ 1.5billion,according to Finance Minister of India.

10. Inflation has become the serious concern for IndianEconomist. Consumer Price index has moved todouble digit while Wholesale Price Index rose to5.79% out of the comfort zone of Central Bank.

11. Depreciating rupee and high inflation rate hasconstrained the options for Central Bank to do muchfor revival of Indian Economy. The sharp fall inrupee has increased the oil import bill and pushedup fuel and power inflation to 11.31 per cent inJuly.

12. The decline in investment in the past few years hasmade the Indian think tank to explore new horizonsof opportunities, simplification of procedure, GST& Withholding Tax Structure, Infrastructuralprojects etc.

13. Government has initiated a move in this directionwith raising the limit on foreign holdings in telecomfrom 74 per cent to 100 per cent while restrictionsin a dozen other sectors from insurance to teaplantations were eased or abolished. Apart fromthis, Hon’ble Finance Minister has urged PublicSector Companies to raise funds via ExternalCommercial Borrowings (ECBs) and Quasi SovereignBonds. The Indian Government recently loosenedrestriction on FDI in retail and civil aviations toattract overseas Capital.

14. Inadequate Infrastructure also adds up woes forIndian Government to draw foreign investments.Decrepit roads and ports and an overstretchedenergy grid are major drags on India’s economicgrowth. Government intends to mobilizeinfrastructure investments to the tune of $ 1 Trillionin new highways, power plants, rail lines,ports,industrial corridors to match up the pace offreight movement. In December, the government setup a high-level committee to speed up approvalsfor large infrastructure projects, and already thecommittee has given the green light to severalmultibillion-dollar jobs project.

15. The estimated GDP growth for this fiscal year is6.1% and has been supported by World Bank andother agencies.

16. The Estimate may well be supported by increase inconsumption and investments. Removal of subsidyin parts may also augur well to narrow down thefiscal deficit. Infrastructure up-gradation andsimplified procedure would certainly boost theconfidence of Foreign Investors. Restriction onimports and boost in export will help in narrowingdown the CAD and hence appreciating Indian Rupee.

17. Hon’ble PM, Manmohan Singh said - “I believe thatthis phase of slow growth in India will not lastlong... The average rate of economic growth that wehave attained in the last nine years (7.9 per cent)shows what we are capable of”

For the past decade, the Indian economy has been grow-ing at a rapid pace. Spurred by a booming middle-classand the export of IT-enabled services, India has be-come one of the most appealing sourcing and demandmarkets among the emerging economies. Indias busi-ness process outsourcing industry in renowned overthe globe. However, the country has also been makingforays into the manufacturing sector and it is workinghard to change its reputation as a low-quality manu-facturing center. With a very large number of skilled,English-speaking engineers graduating each year, Indiais looking to differentiate itself from China by focusingon skill-intensive design and manufacturingoutsourcing. Furthermore, it has abundant natural re-sources. Several multinational corporations are there-fore currently looking at India as a high-potential sourc-ing opportunity.

India is also a highly attractive demand market. With a300 million strong middle-class, a young population andincreasing urbanization, it ranks among the ten largestretail markets in the world.

Recession, Depression, Deflation, etc. were the terms usedto describe downgrade in economies so far. andturbulent times, costs become central focus for control.

Global Challenges Of SCM In Downgrade Economy !

• Globalization and Liberalization

• Removal of barriers in International Trade And Busi-ness

• Rapid Developments In It

• Rising Customers’ Demand Towards New ProductsAnd Changes In Existing Products

• Significant Changes In Buying Behavior Across TheGlobe

• Worldwide Knowledge Dissemination Through Elec-tronic Technologies

The challenges faced by the supply chain managers inthe Downgrade Economy while operating on the globalscales are no way different from similar challenges facedby professionals in other fields. Airline operators,educational entrepreneurs and manufacturers whowent global in terms of operations and spread, facedenormous tasks of establishing themselves andsubsequently becoming profitable. Supply chainprofessionals are already feeling the heat due to


expansions, and cross border acquisitions. Hence it isnecessary that SCM professional understand thechallenges and develop suitable strategies to meet theobjectives successfully. Typically supply-chainmanagement includes determining

(1) Transportation Service Providers,(2) Credit And Cash Transfers,(3) Suppliers,(4) Distributors,(5) Accounts Payable And Receivable,(6) Warehousing And Inventory,(7) Order Fulfillment, and(8) Sharing Customer, Forecasting, and Production

Information.

In addition in the recent times the other responsibilitiesinclude strategic outsourcing and partnering,collaboration, and supporting the vendors in terms oftechnology, finance, and other functional requirements.The objective is to build a chain of suppliers that focuseson maximizing value to the ultimate customer.

Identifying Cost Saving opportunities, developingstrategies and implementing and acting costconsciously to leverage cost saving measures to meetthe corporate objectives especially in the turbulenttimes and volatile market conditions needs essentialskill sets. Let us focus in this article some of cost savingopportunities.

Focus Segment In Down Grade Economy

1) Cost Reduction,

2) Cost Avoidance,

3) Cost Elimination,

4) Cost Control,

5) Cost Consciousness,

6) Cost Savings,

7) Cost Optimisation etc.

Recovery from Economy Melt Down – A Combat Strategy

“Vibrant Role of Supply Chain Managers, To Combatwith Downgrade Global Economic Circumstances; AnInnovative Approach -Towards Industrial And ServiceExcellence” The well-known SCOR model to identify thestrategies required to counter the melt down. The SCORmodel encompasses five major areas viz. PLAN, SOURCE,MAKE, DELIVER & RETURN in SCM. Let us look at each ofthese :

1. Invest in better forecasting

2. Improve System Sensitivity within the Company.

3. Accelerate Business Processes & Cycles

4. Compress Lead Times

5. Know Your Suppliers: Train, Develop, Rate andImprove them.

6. Invest in E-Procurement & ModernizingProcurement processes

7. Eliminate Waste: Focus on Important Issugs likeNon-moving and SLOBs’ elimination.

8. Examine & Reduce Logistics & Warehousing Costs

9. Employ Value Analysis/ Value Engineering

10. Introduce Green Purchasing practices.

Plan : Planning is important always - but no one has sofar perfected the art of forecasting- which is crucial forplanning. Poor forecasting results in poor goal setting,strategies and operations. In normal times, one maymanage without accurate forecasting but Companieswill need to install superior forecast-ing systems,methodologies and tools to plan their market demandpatterns. This is the starting point of good SupplyManagement.

Planning and forecasting is particularly difficult if thetime horizon involved is long for example- it is difficult,if not impossible to project demand for over 12 months-though the estimates become more accurate if you focuson shorter time horizons like days and weeks. Theenterprise-wide strategies should therefore includeshortening the planning horizon. However, if you planon a shorter horizon, you have less time to execute yourplans. Consequently enterprises need to work on thegoal ‘Accelerate the Business Cycle’. This is the new ABCthat may be required to turn the plans into reality andavoid uncertainties of a melt down.

Source : What can you do to source your supplies fasterand cheaper ? An efficient vendor base - trained toeliminate unnecessary fat in terms of the lead time,costs and wastes which they are used to in normal timesis necessary. Vendor selection, development, evaluationand improvement have to be given ut-most focus. Vendortraining to streamline sourcing, identifying theirpotential strengths will pay divi-dends. Know yourCustomer (KYC) has long been a business practice - KnowYour Supplier (KYS) is the new mantra. The basics ofRight Procurement viz Right Sourcing, at Right Price, ofRight Quality, at Right Time & Right Quality are thecorner-stone of identifying the right suppliers.

Besides strengthening the vendor base and making itmore resilient, companies need to streamline theirprocurement practices. E-Procurement using newer web-based technologies need to be used to carry out globalsourcing, purchasing through reverse auctions,carrying out vendor - vendee - user communicationfaster or concurrently.These will again help in cuttingdown internal processing time of sourcing andprocurement.

Make : Lean Manufacturing, eliminating waste (MUDA),better Inventory Management are the strategies to befollowed always - meltdown or no meltdown. Butunfortunately, reverse is true. In good times, the fo-cusis so much is on markets and profits that stream-lining“Making” gets relegated to background. An expert oncesaid, “Inventory Management is like health. In goodtimes, no one cares about health- we get worried aboutit only when we get sick.” Similarly in good business


times, the focus is hardly on managing inventories,eliminating non-moving inventory and SLOBs (Slow andObsolete Materi-als)- there is no time to spend on theseactivities. In a melt down, these deserve attention totake cor-rective steps. It is a well known fact thatinventory carving costs are 20%-30% of the cost ofmaterials. In a recession or melt-down situation whenevery rupee matters, managing inventories more tightlywill help alleviate the financial pressures associatedwith the melt-down.

In busy times, every one is focusing on “Urgent” issues-there is so much to do. This is the time to focus on“Important” issues. Important issues include tighteninginventory norms, establishing systems to get rid of non-moving inventories, get better returns out of scrap andsurplus items. Spares constitute the bulk of non-movingassets-now is the time to look into the capital locked upin unnecessary spares.

Deliver & Return : These includes Material Handling,Transportation and Logistics. The popular adage“Material handling adds to the cost of materials but itdoes not add to their value” - becomes very importanttoday. Lo-gistics costs are much higher in India ascompared to several other developed countries. Everyrupee saved on freight, packaging, damages, insuranceand warehousing costs will add to the much neededprof-itability in melt-down. Strategies like Cross-Docking, Hub and Scope delivery models andwarehousing automation to reduce costs of handlingneed to be examined.

References:

1. Alii, Ali M., Winter, Gregory S. and May, David L.(2007), “Globalization: Its Effects”, InternationalBusiness & Economics Research Journal - January,Volume 6, Number 1, 89- 96.

2. Bhagwati, Jagdish (2004), “In Defense of Globaliza-tion”. Oxford, New York: Oxford University Press.

3. Deveshwar, Aarti and Rthee, Rupa. (2010), “Chal-lenges For Supply Chain Management In Today’sGlobal Competitive Environment”, InternationalReview of Business Research Papers, Volume 6.Number 2. July 2010 Pp. 194 - 203

4. Humphrey, John. et. al. (1998), “Globalization, For-eign Direct Investment and the Restructuring of Sup-plier Networks: the Motor Industry in Brazil andIndia”, Kagami, M., Humphrey, J., and Plore, M (Eds),Learning, Liberalization and Economic Adjustment,Tokyo, Institute of Developing Economies.

5. Schwarz, Michael. (2008). “Trends in the Automo-tive Industry Implications on Supply Chain Man-agement”, White Paper, Cisco Internet Business So-lutions Group (IBSG)

6. Sheila L. Croucher. (2004), “Globalization and Be-longing: The Politics of Identity in a ChangingWorld”. Rowman & Littlefield.

7. What are the global challenges and how to improve

the SCM Competency?, Dr. R. Jagadeesh, AdjunctFaculty: Fox Business School, Temple University,Philadelphia, USA.

8. Effective Supply Management Strategies — To CounterBusiness Slow Down, -Ashok Sharma, Former Presi-dent-IFPSM, Former National President, IIMM. AndPresident, 5M India” a training & consultingashoLsiloni@gmailcom,

9. Role of supply chain managers, Who Need Them?Rabi Narayan Padhi, iimm vizag br, MMR

��

CONDOLENCE

J.N.Gupta – Our Past National President

– IIMM, 1979 – 1980 and past Chairman

of Pune Branch 1971 -72.

We are deeply saddened to hear the demise

of our Shri. J. N. Gupta on 29th July 2013 at

Pune. He was a very well known figure in

Pune Industry & Business circle.

Shri.J.N. Gupta a Post Graduate from BITS,

Pilani of 1950, held very senior positions in

Industry and retired as the Vice President

of Century Enka, Pune. He was one of the

founder members of Pune Branch,

established in 1966 and grew the Pune

branch to its greater heights, now envied

as the model branch in our country.

During his tenure as National President of

IIMM he brought very innovative

approaches, to the way this apex body has

to function. He was always very helpful and

kind to anyone who approached him, a

friend philosopher and guide to the entire

IIMM fraternity and Business circle.

We express our deep felt condolences to

his family. May his Soul rest in Peace!

��


Shri S.K. Mittal is a prominent member and advisorto All India Transporters Welfare Association(AITWA), since inception of this apex body of

transporters. During Trade Manthan-2, organised byAITWA in New Delhi, which saw delegates attending fromall parts of India.

Shri Mittal gave a power point presentation (PPP) onthe subject of “New Opportunities in Logistics” whichearned him praise from all those who were present atthe Trade Manthan summit. Parivahan Pragati isreproducing certain important observation made byShri Mittal during his presentation for the benefit ofour readers.

In the beginning of his presentation Shri Mittal narratedan interesting episode during his meeting with theChairman of Transport Research Wing of Ministry ofRoad Transport and Highways (MoRTH) whereby thelearned chairman complained that the Road Transportfraternity has not provided him any data or statisticson transportation of goods, which to him seemed to bea reasonable expectation on the part of Ministry.According to Mr. Mittal, how can we ask anything fromthe Ministry on the basis of representations, which arenot supported by authentic data on our operations astransporters. Drawing a comparison between roadtransport and the Railways, Shri Mittal further statedthat whereas the Road Transport sector contributed 4.8%to country’s GDP growth, the Railways’ share was a mere1.2% and yet there was no budgetary support for roadtransport industry.

Mr. Mittal also raised the obvious question as to whathas the government done for this ailing industry in past60 years. On the other hand, said Mr. Mittal, no lessthan the heavy industries minister, at one time, urgedthe Prime Minister to provide subsidy to the auto sectorin order to overcome the pangs of recession in economywhereas in contrast nothing was proposed from anyquarter for the Road transport sector, which is facing aworst crisis of survival. Why the MoRTH not advocatinga relief package for road transport industry like someother sectors posed Mr. Mittal?

Talking on the topic of New Opportunities in Logistics,Mr. Mittal said the Government has allowed 100% FDIin Transport and Logistics, which could easily comethrough equity route in this sector. However, thoseinvesting in Indian logistics may not get good returns,simply because the logistics are dependent on roadtransport industry, which is facing a bad phase. Mr.Mittal also disagreed with those who considered FDI inretail as disadvantageous for Road Transport industryand said that it is a boon for this industry instead ofcurse as thought by some doom-sayers. According tohim, FDI in retail is going to open many windows ofopportunities for the transporters. Mr. Mittalemphasized that in an era of specialization, roadtransport should act like a healthy adjunct to the

logistics and supply chain industry which involves alot of specialization and expertise. Therefore, it will bein the interest of transporters that sooner they catch upwith this trend of specialised services, better it will befor them. They need to learn this ‘Mantra’ and practiceit.

Again Mr. Mittal sounded a note of disagreement withthose who considered the Carriage by Road Act 2007,as a road block in their progress and prosperity. He saidthat in the long run Carried by Road Act will prove quitebeneficial to the industry, when implemented in its letterand spirit.

He also highlighted the benefits to be reaped fromupcoming Goods and Service Tax (GST), which will usherinto a new era of seamless movement of road transportoperations. He further added the cold chain is anotherbig opportunity for this sector in a country where 40%of agricultural produce, mainly fruits and vegetables,go waste in the absence of a viable cold chain services.

Coming to logistics, Shri Mittal predicted that 3PLsegment would grow rapidly in India which will begodsent for transporters as their services will beoutsourced by big 3PL players. He noted that many inthis industry were rooting for so called “Railway FreightCorridors”, which cannot be avoided but at the sametime they should look for opportunities at the start andend of the corridor.

Another big opportunities by highlighted by Shri Mittalduring his presentation related to the development ofIndian ports which need huge investments. Accordingto him more and better equipped ports would meanquantum improvement in movement of containers,which would translate to more requirements ofcontainerised trucks from road transport industry.Remotely though, the construction of new airports willalso provide more opportunity to road transport serviceproviders in view of ongoing progress in the expresscargo sector.

Mr. Mittal commented favourably about the roadinfrastructure in the context of logistics and transportservice opportunities. He stated that new roads are beingconstructed everyday, including state and rural roads,which will connect the far-flung areas of this vastcountry. Obvisouly, this is going to result in hugeopportunities for road transport and logistics. Hehighlighted fact that the privatization of SEZs, ICDs andCFS would also create opportunities for road transportindustry. Shri M itta I ended his presentation on a noteof optimism and bright future for Transport andLogistics industry.

Source : Parivahan Pragati, Sept. 2013, Vol-9, Issue-7

��

TRADE MANTHAN

NEW OPPORTUNITIES IN LOGISTICS

SHRI S. K. MITTAL, ADVISOR-AITWA


OMNI CHANNEL FULFILLMENT

– CHALLENGES AND OPPORTUNITIES

SAMEER CHAKRABORTHY, SIBM PUNE

[email protected]

Abstract: In this paper we discuss about omnichannel fulfillment. The paper explains the needof omni channel fulfillment and the different

supply chain configurations which implement omnichannel solutions. The advantages of omni channelretail are explained. The paper also throws some lighton the challenges faced and costs incurred whileimplementing an omni channel solution. We concludewith the current status of omni channel retail in India.

India is a nation of 1.2 billion people. But until veryrecently it did not have a structure for organized retail.In the pre liberalization era, organized retail was limitedby the government policies. However this changed afterthe economy was opened up for foreign investment.From overseas companies like Levi’s, Pepe, Marks andSpencer etc. had entered targeting upper middle andrich classes of Indians. However as more than 50 %population was formed by lower and lower middle classpeople, the market was not completely captured. Thiswas later realized by brands like Big Bazaar andPantaloons who made their products and servicesaccessible to all classes of people and today the successof these brands proves the potential of Indian retailmarket.

A great shift that ushered in the Indian Retail Revolutionwas the eruption of Malls across all regional markets.Now at its peak, the mall cultureactually brought in theorganized format for Retailing in India which wasabsent earlier. This led to a proliferation of offlinesupply chains.

The organization of the retail sector was followed withthe advent of e-commerce. Firms like flipkart, jabong inindia and Amazon, BestBuyEurope abroad ushered inthe age of the click and mortar companies.Propellingadoption of click and mortar companies is india’s fastgrowing internet users. At a compound annual growthrate of 44 per cent, India will lead the world in InternetProtocol (IP) traffic growth in the next five years, predictsthe annual Cisco Visual Networking Index Forecast. Itis estimated that by 2017 India will have two billionnetworked device at 1.4 networked device/capita.

India has now become the world’s third largest onlinepopulation, overtaking Japan once again, according toa report by ComScore study. The country has recorded ahuge 31 percent growth year-on-year in terms of unique

visitors, with the current number of standing at 73.9million people who access the Internet from a home orwork-PC.

There is a considerable increase in Non-PC traffic growthas well. Mobile and tablet shares in India have nowgrown by 14.2 percent since the last year. Notsurprisingly, the report states that handheld devicesare now the preferred choice for many, especially on-the-go.

All the above trends point to increase use of onlinechannelschannels for delivery and fulfillment.The nextstage of maturity of the retail sector is the adoption ofomni channel retail strategies which combine the bestof online and offline channels. The below graphic showsthe growth of different retail channels.

Fig I: Growth of retail in different channels.

Source: RSR Research

Omni-Channel Retail: Distribution is in the midst of asignificant phase in the evolution from single to multi-channel, and most recently, to true omni-channelcommerce–where Retail, Wholesale and eCommercechannels blend together to provide a seamlessexperience for the customer across the entire brand.You’re expected to ship from anywhere (DC, store,vendor),enable in-store pick-up of online orders, acceptreturns anywhere (DC, stores) and have completevisibility to manage inventory (shared or separate)across all channels. Even companies with a great dealof experience in retail and wholesale channels oftenunderestimate how different and difficult it is toefficiently fulfill customer demand from any locationand any channel. Many new processes need to bedeveloped that are not typical in retail and wholesaleoperations. And it’s likely that systems designed forthose distribution channels will need a transformation


as well. Moving to omni-channel fulfillment requiresmore robust, integrated systems to support new levelsof precision, speed and complexity. There are a numberof companies that have spent a year or more laying thefoundation before they were ready to move to omnichannel fulfillment.

Fig II: Consumer options for an omni channel experience

The plain reality is that current supply chain modelsare not suited to an omni-channel world –a world whereconsumers increasingly have little care which channelthey use to research, select, transact, or collect products.The current supply chain model assumes that the storeis the endpoint of the transaction, and further is builtto deliver as efficiently as possible to that endpoint,with the assumption that the inventory deliveredto thestore will live out its life there until some consumerpicks it up and brings it home

Customers are looking for a “seamless” omni-channelshopping experience. They want to:

� Buy online, and pick it up in the store

� Try it on in the store and get it delivered at home ifthe colour they want is out of stock in the localstore.

� Place an order on a mobile device and be assuredthat the item is not only available, but also beable to choose how much to pay for shipping andknow exactly when it will be delivered.

� Order online, have it delivered at home and returnto the store if it doesn’t fit.

Challenges in implementing an Omni Channel Strategy :As the number of options of purchasing goods haveincreased, so has the demands from the customer.Nowadays, the parameter to judge sales is on-timedelivery at maximum convenience to the customer. Thisis just an extension to the brick and mortar concept ofhome deliveries except that using channels like onlinepurchases, consumers won’t even have to move out oftheir homes.

Demand management has become more complicated,

because of receiving orders from multiple channels,planning capacity and agglomerating orders forfulfillment becomes very difficult.

Order quantities have to be decided beforehand, to caterto online orders which very frequently have no leadtime for fulfillment

Showrooming has been an inevitable concern for manyomni-channel retailers. The trend involves shoppersexamining a product in-store and end up purchasing itonline for a cheaper price. Many consumers use theirmobile smartphone in-store to search the product for alower price, customer reviews, etc.

This trend is taking a toll on brick-and-mortar store asit results in a loss of sales, and causes damage to thestore’s floor samples through constant examination fromconsumers.

Many retailers are combatting showrooming by bumpingdown their in-store prices to match their onlinepromotions, and offering buy online and pick-up in-storepromotions. Some are offering product exclusivity forwhich some of the products are only available in-store.

Speedof fulfillment remains a perceived differentiatorand one that is still being pursued aggressively but manyquestioned whether this is actually driven more by theretailers,with customers valuing convenience andconsistency.

Many retailers are dropping single channel approachessuch as brick-and-mortar stores or catalog onlyoperations and are switching to multi-channelstrategies bylinking their store operations with e-commerce and/or catalogs; Internet retailers also areventuring offline.

While retailers recognize that a multi-channel strategyis essential tolong-term viability, the reality is that manylack the knowledge of howto successfully combineonline, catalog, and physical retailing to formasuccessful retailing concept .

Multi Channel retailing has also led to a leveling of theplaying field with regards to selling in the open market.It has helped decouple the retailing capacity with thefloor space/investment.

A major issue with multi channel retail could be thedesire to build the business model around the channel.The customer doesn’t understand channels and henceit is essential that the customer is kept in mind whilepreparing the strategy. The genesis of omni channelretail is its focus on customers. It is vital that thecustomer is provided a seamless experience.

Consistent omni channel performance is also a pre-requisite for omni channel retail. The product, price,place and promotion should be similar across all the


channels.

Omni Channel fulfillment also requires a high degreeof collaboration with the retailers due to the uncertaintyof demand, it won’t be feasible to hold all the inventoryat retailer end. Here technologies like VendorManagement Inventory(VMI) assumes greatersignificance.

Implications on Strategy:

Margins: Depending on how companies view theirprimary channel, pricing strategies for differentchannels are decided. For.Eg: In case a companyconsiders the retail – brick and mortar channel as theirprimary channel, it might charge a preminum for onlinedeliveries. In this case the online channel is a profitcenter for the company. However if it views the onlinechannel as a strategic differentiator it might offer theproducts on the online channel at cost.

A major challenge for multi channel retailing is the factthat home deliveries require a different set of corecompetencies. Traditional shops rely on customers tocarry their orders home. There is generally a provisionof supplying goods for home delivery in nearbylocations. But to handle goods for long distances is acompletely different proposition and will require adifferent set of skills. The current trend is to tie up with3PL providers who take care of the last mile deliveryissues.

Turnaround time: For Multi Channel retail it is not onlyimportant for direct delivery turnaround time to be veryfast, but also where orders are made online and pickupis done at the store – the orders should be available forpickup immediately. A variation of store pickup is tohave designated pickup points which are in effectstorage warehouses from where the customers can picktheir items up. The problem with this method is thatthis will significantly add to the costs without changingthe perception of the customer service.

Inventory Optimization: One of the major issues of omnichannel retail is how to deal with varying orderquantities both for fulfillment and delivery. For orderplanning purposes it is advised that product iscategorized into product families and the inventorydecision for each product family is made keeping theconsumption patterns in mind. i.e. Apparel whichchange with fashion should have an inventory to meetone season orders. Goods such as electronics shouldbe held in quantities that cover the orders until the nextmodel is introduced.

Another way would be to organize the inventory intomultiple echelons. Multi-echelon inventory optimizationdetermines how much inventory should be kept at eachlevel and location in the supply chain to deliver thedesired service level at the lowest cost—either by SKUor by category. This would help us vary strategy

according to the

Distribution consolidation : In the same way it is difficultto arrive at a distribution plan. By building a modelthat compares direct shipment costs in smallerquantities with economic transportation (full-load) toa consolidation center and beyond, you can identifythe optimal transportation plan based on the end-to-end costs, your defined service constraints and anyincreased handling and storage costs encountered inthe cross-dock or re-distribution center

Supply Chain Segmentation: A supply chainsegmentation, or categorization study, is an excellentmethod to determine where your supply chain shouldbe differentiated to better suit individual productstocking and delivery needs. By examining key productcharacteristics, such as margin, velocity and variability,you can spot trends and “clusters” of like-products, e.g.,slow versus fast movers or low margin/high demandproducts. Each cluster may require different buying andsupply chain strategies, e.g., setting unique service andinventory targets or delivery methods. You can model,test and implement unique strategies for each supplychain product segment to achieve the optimal stockingand delivery performance at the lowest total operatingcost.

Supply Chain Configurations: Order online collect fromstore: This is the most common formulation. This optionis also the most preferred among the customers becauseit allows them to shop from the safety of their homes,and also eliminates the necessity of arranging receiptof goods. The customer is free to collect the goods fromthe store at their own convenience. However the successof this method is predicated on the presence of storesat various places in and around the city.

Order at store, fulfill from warehouse : This option isgenerally used by retailers when the order can’t befulfilled from stock. The retailer can also use this as adominant channel strategy, if he determines that theproduct is very fast moving and it will be cost effectiveif the order fulfillment is done through the warehouses,instead of bringing the goods to an intermediarylocation.

Order at store, fulfill from another store : This option isadopted by retailers who have a very large network ofstores. Depending on shelf movement, different storescarry a large inventory of a single product. This enablesthem to maintain a cumulatively exhaustive inventory,though it will add to the delivery time.

Rebalancing inventory, ship excess inventory from onestore to another: Similar to the above option inventoryis rebalanced when the consumption pattern is differentin different stores due to a short term promotion on aparticular product. As this demand will not last, anyexcess inventory remaining after the promotion periodis re-distributed among different stores.


Return to store, even when goods are ordered online:This option is provided by retailers like Best Buy, CarPhone Warehouse who have significant presence bothonline and offline. This option is utilized because incase of goods return due to damaged goods being neededto be checked or warranty claims needed to be verifiedphysically. A reverse logistics network is needed andphysical retail stores are an effective entry point.

Parcel return, even when goods were bought in a store:Sometimes, goods can be returned even after beingphysical verification at time of buying. This can bedealt with a conventional reverse logistics network.

Advantages of Omni Channel Retail Over Single ChannelRetail: Most of the online channel companies havewarehouses and follow a logistic model such as huband spoke model. There are some which use last milesolution providers like chhotu.in, quantium solutionsetc. However omni channel retailers have one greatadvantage over them in the fact that they can use theirstores are small warehouses and distribution canhappen from there itself.

A major challenge for online retailers is the onlineretailers is how to handle the unaccepted goods. This ismainly because in India cash on delivery forms a largepercentage of the business of any online retailers. Thereason for return can be size not fitting, or a number ofother things as well. In omni channel retail, the reverselogistics network becomes very short by offering click-and-pick options. Here if the customer isn’t satisfiedwith the product they can return it there and then thusreducing the reverse logistic spend.

A study done by Google found that 7 out of 10 customersresearched the products online before making theirpurchase. This shows that it is advantageous for offlinestores to have online presence even if the offline channelis their main source of revenue.

One of the challenges of offline retail is the inventorystorage space, which can be solved by keeping a fewSKU’s online and a few in the store. The customer wouldbe free to select any SKU of his choice from the store,with the help of a screen with the online SKU’s aredisplayed, which can be delivered to them. OnlineSelling has a challenge in India, where most of the siteslike Flipkart, Jabong, Myntra.com compete on price. Thisis a deterrent for OEM’s to place their niche productson the online space.

Each stage of an omni-channel supply chain has costsassociated with it:

1. The costs of each picking by SKU or product classin an e-commerce warehouse

2. Value added services associated with e-commerceorders at a warehouse

3. The costs of each picking by SKU or product class

in the back room of a store

4. The costs of each picking by SKU or product classin the front of the store

5. Value added services associated with store pick-ups or home deliveries when fulfilled from the store

6. Transportation mode costs allocated to productcosts for deliveries from an e-commerce warehouse

7. Transportation mode costs allocated to the productcosts for home deliveries from the store

8. The costs associated with rebalancing inventoryfrom one store to another

9. The costs of returns, by product, for omni-channelorders

Current Status

Omni Channel retail is growing exponentially aroundthe world:

Given the growth of e-commerce, many retail real estateinvestors are fearful that typical sticks and bricksretailers are not necessary or viable options anymoreand therefore neither is the real estate they occupy.However, there have been many retailers, old and new,that have been tackling this issue and optimizing themodern day tech savvy shopper for profit.

There is no question about it, e-commerce is affectinghow people shop and it is impacting overall retail salesin an exponential way. If they have not dealt with thisissue, traditional retailers should be shaking in theiroverstocked boots because e-commerce sales aregrowing 5 times faster than core retail sales year overyear, as seen in Figure 1. The modern day shopper ismulti-dimensional, they buy in store, they buy online,and they buy on their phones or tablets. Consumerswill shop in the most convenient and cost efficient waypossible, and that is happening more increasinglyonline. This confluence has contributed to the shrinkingof store sizes and also the unfortunate demise of certainretailers.

Figure III: Historical Growth in E-commerce and CoreRetail Sales

Source:American Census Bureau


CURRENCY EXCHANGE RATES

INR

Australian Dollar (AUD) 59.58

Bahraini Dinar (BHD) 163.71

British Pound (GBP) 99.56

Canadian Dollar (CAD) 59.93

Chinese Yuan (CNY) 10.13

Danish Krone (DKK) 11.31

Euro (EUR) 84.40

Hong Kong Dollar (HKD) 7.96

Iraqi Dinar (IQD) 0.05

Japanese Yen (JPY) 0.63

Kuwaiti Dinar (KWD) 218.65

Omani Rial (OMR) 160.37

Pakistani Rupee (PKR) 0.58

Qatar Rial (QAR) 16.96

Saudi Arabian Riyal (SAR) 16.46

Singapore Dollar (SGD) 49.72

South African Rand (ZAR) 6.27

Swedish Krona (SEK) 9.65

Swiss Franc (CHF) 68.37

UAE Dirham (AED) 16.81

US Dollar (USD) 61.74

Source : Rediffmail.com dated 22nd Oct., 2013

Most of this growth is occurring in America, which firmssuch as Macy’s, Walmart leading the way. However OmniChannel Retail is making its impact felt in India as well.

Recent studies demonstrate how pervasive multi-channel shopping has become: According to researchsponsored by Shop.org, an industry trade association,78 percent of online shoppers also buy through amerchant’s physical stores, and 45 percent of them alsobuy using the catalog channel (that is, using phone,mail or fax).

Similarly, 23 percent of catalog shoppers also makepurchases on the company’s Web site. And while only 6percent of store shoppers also buy online today, thatfigure is undoubtedly growing.

Fig IV: Incidence of Cross Channel Purchasing

However, ecommerce in India is still at a very nascentstage. But it has a tremendous scope to grow with theadoption of internet users.RecentlyPlayers likeSamsonite India, Indian Terrain are also venturing intoomni channel retailing.

Conclusion:

In this paper we have explored the scope of omnichannel retailing in India. We have seen the advantagesof implementing an omni channel retailing solution.We have also checked the challenges and opportunitiesin exploring an omni channel solution and the supplychain configurations that an omni channel solutionoffers. Even though the scope of muti channel retail

References:

1. ”Effects of Multi-Channel Consumers’ PerceivedRetail Attributes on Purchase Intentions of ClothingProducts” Youn-Kyung Kim Soo-Hee ParkSanjuktaPookulangara

2. ”Integrating Multiple Channels”Lawson,

Richard,April 2001,Chain Store Age;Apr2001, Vol.77 Issue 4, p58

3. ”The Multichannel Consumer: The Need to IntegrateOnline and Offline Channels inEurope”(2001,July).The Boston Consulting Group

4. “Schoenbachler, D. D., & Gordon, G. L. (2002). Multi-channel shopping: Understanding what driveschannel choice”.Journal of ConsumerMarketing,19(1), 42-53.

5. ”Retailing Strategies for Today’s Omni-ChannelWorld” www.cbre.com

6. ”Integrated multi-channel retailing (IMCR):Aroadmap to the future” IBMReport

7. “Have you met the omni-channel shoppers?”Leggatt, Helen. BizReport, 23 October 2009"

��


BRANCH NEWS� AHMEDABAD BRANCH

� BANGALORE BRANCH

� CHENNAI BRANCH

� MUMBAI BRANCH

� PUNE BRANCH

� RAE BARELI BRANCH

� VADODARA BRANCH

AHMEDABAD BRANCH

Report on 4th October Evening Event : AhmedabadBranch organized a grand evening for MM professionalson 4th October at Ahmedabad Management Associationin August Presence of Respected Senior National VicePresident Shri L P Patel who agreed to encourageorganizing team by coming virtually on two hours notice.

Special Evening consisted of following events.

Talk on Latest Global Trends in Telecommunications forCost saving by use of Breakthrough Technology Productsby Mr. Jwalant Mehta, Head Voice & Data Sales and Mr.Manan Goswamy of Airtel.

Felicitation of Life Member Mr. Bijoyen Das for hisspectacular achievements.

Grand Pre Navratri Dinner.

Shri. L P Patel, Mr. K C Joshi, Mr. Seth and Mr. Mehta werewelcomed by bouquet at the hands of Mr. Nitin Kedia, DrG L Grover, Mr. Pavitra Patro and Mr. Mayan Shahrespectively.

More than 60 senior professionals from industries inand around Ahmedabad participated in the programme.

Branch Chairman Mr. H K Gupta welcoming enlightenedaudience.

Mr H.K.Gupta Branch Chairman mentioned in hisinaugural talk that IIMM is a very unique institutionwhich helps professionals updating and augmentingtheir professional knowledge through various activities.

Educational activities are an important component ofthis mission. IIMM has quite a few structured coursesrecognized across the industry which not only helps usin enriching our knowledge but also improving ourprofessional qualifications which helps us in individual

carrier advancement. Mr. Anil Patil our educationcoordinator will appraise us with current status ofeducational activities. Some of you who want to avail ofthese courses can talk to our EC members connectedwith educational activities informally during dinner.

Mr. D K Goswamy Programme Coordinator introducingthe speaker

Mr. Jwalant Mehta the speaker stressing a point.

We are a very popular institution in city of Ahmedabadand conduct evening lecture programs every month forour members and select guests who subsequentlybecome our members.

IIMM has 46 branches spread across the country with10000 active members.

Ahmedabad branch has reached 315 members as ondate. Some of you who are still not members shouldacquire membership immediately. I promise you thatyou will get value for your money. Material ManagementReview an important journal with ocean of knowledgecomes to our door steps every month. Mr. G KMaheshwari our membership coordinator will informus of his plans to augment membership.


Mr. H K Gupta then read mission of IIMM. To promoteprofessional excellence in materials managementtowards national prosperity through sustainabledevelopment.

Mr. Gupta informed audience that we now have a nobletask of felicitating our Life Member Mr. Bijoyen Das whohas been recently re awarded for his exemplarycontribution to Indian Industry.

Branch Chairman Mr. H K Gupta then read Felicitation.We members of Indian Institute of MaterialsManagement Ahmedabad are here to felicitate our LifeMember Mr. Bijoyen Das who is popularly known as“Das” in industrial circle for receiving the followingcoveted awards.

1. "Vijay Rattan Gold Medal" Award & A Certificate ofExcellence from International Business Council &International Institute of Education & Management.

2. Rajiv Gandhi Excellence Award & A Certificate ofExcellence from Indian Solidarity Council

Mr. Bijoyen Das is a self made professional. He alwaysgives credit for success to his late father who was a MillWorker and encouraged Das all along to acquireprofessional qualification and create space for himselfin competitive industrial world.

Mr. Das is a Mechanical Engineer from L D College ofengineering from its 1987 batch. He has been primarilyassociated with steel industry of India from 1987, namelyElectrotherm (India) Ltd, GADanieli (India), PowerconEngineers and Powercon Superheat Pvt. Ltd.

Mr. Das had urge to acquire specialized managementknowledge and recently completed his MBA with honorsfrom B K School of Management Ahmedabad. During hisMBA programme, he successfully accomplishedResearch Project on Business Research, Market Researchand Branding.

Subsequent to his MBA programme he has launched hisown firm captioned as Eon Das Strategies - A project andmanagement consulting firm. We in IIMM wish himsuccess in all his endeavors and pray to Almighty Godto bestow many more laurels on him in future. Mr. L PPatel Senior National Vice President then honored Mr.Das by presenting Citation and memento. Audiencepresent gave deafening applause during presentationceremony.

Mr. Patel then spoke on accomplishment of Mr. Das. Hespoke warmly of contribution of entire AhmedabadBranch EC team under motivating leadership of BranchChairman Mr Gupta. He lauded contribution ofAhmedabad Branch in augmenting membership. He saidAhmedabad Branch is number one branch of IIMM andis an example for other branches.? He motivated branchteam by committing that Ahmedabad Branch will get allthe support of NEC including awards for theirperformance.

Mr. Bijoyen Das in his thanks giving talk thanked IIMMfor motivating him by awarding him before a highlyprofessional audience. Mr. G K Maheshwari

Membership Coordinator appraised members of hisgrand strategy to take membership to 1000 by March2015.Members present volunteered to contribute theirmight from day one for this mission. Mr L P Patelcommitted 15 Life Members from his business contactsin Ahmedabad.

Mr. D.K. Goswamy Programme Coordinator thenintroduced the speaker Mr. Jwalant Mehta in his lucidand charming style. Mr. Mehta and Co Speaker Mr.Goswamy of Airtel took the audience to 21st centurywith new concepts being introduced and likely to beintroduced in coming years. Concepts introduced by themwill bring down overhead cost of industry considerably.Talk was followed by lively question and answer session.

Mr. Sudhir Shah NC Member and Past Chairmanpresented memento on behalf of members to Mr. Mehtaand Mr. Pankaj Panchbhai to Mr. Manan Goswamy as amark of gratitude and remembrance. Mr. L P Patel, Mr. KC Joshi and Mr. Sheth were presented memento by Mr.Vikram Gajjar, Mr. Suhag Thakkar and Mr. Mukesh Patelrespectively.

Mr. Pankaj Panchbhai summarized the evening andthanked members and the speaker in his wrapping upremarks and invited members for sumptuous ?NavratriNet Working Dinner. Ahmedabad Branch expressed itsgratitude to Mr. L P Patel for accepting their invitation atshort notice and his grace in mixing with members andappraising members and guests of strengths of IIMM.Members requested him to visit again and guide themwith his rich experience of profession of MaterialsManagement.---------------------------------------------------------------------------

BANGALORE BRANCH

24.08.2013 –Annual General Body Meeting : AnnualGeneral Body Meeting of Bangalore Branch wasconducted in the evening at Hotel Woodlands. Themeeting commenced with a formal invocation renderedby Mr. Satish Babu, Group of Dance. Mr. M.S.Shankarnaraynan, Branch Secretary confirmed theCoram.

Mr. Channabasappa, Branch Chairman, welcomed themembers and their family and he gave details ofachievement /activities during the year and programsplanned for the future. Mr. M.S. Shankarnarayanan HonSecretary read out the report for the period 2012-2013


and Mr. M. Vijaya Vittala, Hon. Treasurer presented theAnnual Accounts ending for the period 31.03.2013.

Mr. P. Srinivas Rao, The returning officer nominated bythe General Body announced the following New OfficeBearers, E.C. Members and National Councillors for theyears 2013 -2015 who were all elected unopposed.

IIMM-BANGALORE BRANCH EXECUTIVE COMMITTEE2013-2015

Sl.No. Position / Name / Organization

1 Branch Chairman - Mr. D. SubramaniManager - Materials Management KarnatakaAntibiotics & Pharmaceuticals Ltd

2 Branch Chair Vice Person Ms. Kathyayani DeviS. Directorate of Social Security and Pension

3 Hon. Secretary Mr. K.A. Vijay KumarRegional Manager – India & Middle East Leggett& Platt - Global Services,

4 Hon. Treasurer Mr. V. Ravi ChanderSr. Manager – Sourcing & ProcurementAdcock Ingram Healthcare Pvt Ltd,

5 National Council MemberMr. S.B. Lovekar, Director,Bosch Management Services India, Bosch Ltd

6 National Council Member,Mr. C. Subbakrishna, Director, MITS SoftwareIndia Pvt Ltd

7 National Council Member,MR. P. M. Biddappa -Commercial ManagerFesto Controls Pvt Ltd

8 National Council Member- MR. Paul GeorgeHead Vertical Markets - Industrial &Chemical, Schenker India Pvt. Ltd.

9 National Council Member-Mr.Channabasappa Chief Manager -Marketing, Karnataka State Road TransportCorporation

10 E.C. Member Mr. Niranjan V.R. GeneralManager (Purchase), Bosch Ltd.

11 E.C. Member- Mr. K.V. Sudheendra JointDirector, Aeronautical Development Agency

12 E.C. Member- Mr. G.S. Raju-Deputy General ManagerCommercial & Legal

13 E.C. Member- Mr. Arun S. SuryavamshiProgram Manager - Global SourcingIngersoll Rand Industrial Technologies

14 E.C. Member- Mr. D.N. Hemanath KumarPurchase Officer, HAL, Engine Division

15 E.C. Member- Mr. Ravikumar A. Dy.Manager – Parts [ Customer support] MakinoIndia Pvt. Ltd.

As part of the Cultural program for the AGM an excellentDance performance by Mr. Satish Babu and his Groupwere organized. The program were very muchappreciated by one and all. The AGM concluded withdinner.

05.09.2013 Teachers Day : To commemorate TeachersDay, a Faculty Meeting was organised on 5th September2013 at IIMM Conference Hall Faculty Members andStudents were invited for this program. Mr. D.Subramani, Branch Chairman welcomed them with aBouquet and invited Faculty and Students to share theirexperiences. Mr. H.R.T. Chari, Sr. Faculty, Mr. Rajashekar,Sr. Faculty, and other faculties shared their views andsuggestions.


Two Days Workshop : Two Days Workshop on “PublicProcurement” was conducted on 6th & 7th September2013 at Hotel Royal Orchid Central, Bangalore.

Around 29 participants of Professionals from PublicSectors participated in the workshop. Senior Faculty of

IIMM handled the sessions. Program ended with verygood interaction sessions. Mr. Channabasappa, PastChairman Handling the session.--------------------------------------------------------------------------

CHENNAI BRANCH

Monthly Meeting on 21st Sept. 2013 at Hotel Savera :MR. PY Venkateswaran - Vice Chairman, Chennai Branchwelcomed the gathering. Mr. J. Ravishankar, Chairman-Monthly meetings, introduced the Chief Guest of theevening to the audience.

Mr. M. Vijay Anand, AGM & Head, RTMU, SBI, Chennai ,the Chief Guest of the evening, delivered an interestinglecture on “ India’s Current Economic and FinancialScenario & The way forward.” attended by more than 50members of the Chennai Branch.

Dignitaries on dais

Mr. S K Mohanty presenting mometo to Guest speaker -On Right Mr. J Ravishankar, Chairman

Mr. Vijay Anand addressing


V Hariharan - Frist national president addressing

Vice Chairman PY Venkateswaran welcome address

The Speaker made the subject interesting and explainedvarious challenges and concerns faced by India andhighlighted the Global Economic scenario. He citedweaker export demand and increased volatility ofcapital flows are the major reasons for the currentsituation and indicated the positive signs and ways forfixing Indian economy. Mr Vijay Anand’s clarificationon the questions raised by the members during thequestion and answer session was interesting and lively.

Later Mr. V. Hariharan, founder National President, ofIIMM presented the ‘Life fellow Membership Certificate’received from NHQ to Dr. Prof. V.N. Parthiban, who wasconferred with “ Life Fellow Member” by our branchduring Annual General Get-together function held on20th July 2013, held at Le Royal Meredien, Chennai.

The meeting came to an end after Mr. Subir KumarMohanty, Branch Hony. Secretary, presented the speakerwith a memento and proposed the vote of thanks.

Report by Mr. J. Ravishankar, Chairman- Monthlymeetings

SANKARA RATNA AWARD CONFERRED ONDr T.V. Subramanian, Honorary Fellow Member ofIIMM, Member of IIMM Chennai Branch EducationalAdvisory Council

Sankara Nethralaya stands proud and tall as it entersinto the 35th year of glorious service to humanity onthis momentous Founder’s day.

As part of the celebration of this year, Sankara Ratnaaward, instituted in 2002 with an objective ofrecognizing and honoring distinguished individuals orinstitutions for their unflinching support to SankaraNethralaya’s cause, was presented by His Excellencythe Honorable Governor of Tamil Nadu Shri K. Rosaiah,to Quality Gurus Shri. M.S. Jayaraman, a specialist in ITstrategies and Business Process Re-engineering and Dr.T.V. Subramanian a specialist in Operations, SupplyChain Management and IT strategies. These two eminentTotal Quality Management (TQM) Gurus were the qualityand process consultants and trainers to SankaraNethralaya staff and their guidance, inputs and trainingwere instrumental in Sankara Nethralaya’s main centrebeing accredited by the National Accreditation Boardfor Hospitals and Healthcare providers (NABH) whichis the highest recognition for healthcare providers.

Sankara Nethralaya instituted one more category ofaward – M S Subbulakshmi Award, in memory of thelegendary singer who rendered her service by raisingfunds for Sankara Nethralaya through her concerts. Theaward is presented to those who espoused the cause ofSankara Nethralaya in serving people and have beensupportive in its initiatives.

The recipients of this award this year were Mrs.Kausalya Appukutty, a prime supporter of SankaraNethralaya, who donated four acres of land to run theElite School of Optometry, to the hospital, and Mr.Manohar Devadoss, an artist who has made plaincanvases colourful, in spite of his partial visualimpairment. He has been raising money for SankaraNethralaya’s community service through ‘MahimaEndowment,’ which he started in the memory of his wifeMahima, with an aim to provide treatment to visually-impaired children

The awards were presented by chief guest, HonorableGovernor K Rosaiah, who lauded the unconditionalservice by Sankara Nethralaya all these years, andcongratulated the winners. “Sankara Nethralayadeserves to be appreciated for its undeterredhumanitarian service to the people by giving them sight.Service should be provided from the heart with a joylike S S Badrinath does,” said Honorable Governor KRosaiah, referring to the founder of Sankara Nethralaya

The illustrious awardees of the Sankara Ratna awardduring the past years include Sri. V. Shankar, Trustee,South India Education Society, Mumbai, Sri. Ratan Tata,Chairman, Tata Sons, Sri. A.M. Naik, Chairman, Larsen& Toubro Ltd, Sri. S.V. Acharya, Treasurer, SN OM TrustInc, USA, Dr. Madhavan Nair, Chairman, ISRO, Sri.Hanuman Prasad Agarwal, Industrialist andPhilanthropist, Sri. S.P. Muthuraman, Veteran FilmDirector and Literary figure.

Invitation from National Institute for empowerment ofPersons with Multiple Disabilities (NIEPMD) a PSU, toIIMM Chennai Branch, to assist in Selection of Candidates,for their units.

IIMM Chennai Branch is very happy to announce thatwe received an invitation from The Director NIEPMD,Chennai, to assist them in the selection of candidates,


for the position of Program Assistant (Stores &Purchase) for their Kovalam Unit. As per the directionof IIMM Chennai Branch, Mr. Karthik Dore , TechnicalExpert & EC Member represented IIMM Chennai Branch,to handle this requirement by NIEPMD. 30 candidateshad applied for the position and out of which only 2candidates were invited to take a Written Test andpersonal Interview.

A written test questionnaire with 60 questions wasprepared by IIMM Chennai Branch, for the candidatesappearing for the written test. Mr. Karthik Dore,administered the written test, and evaluated the answerpapers, jointly with Mr. S Sankaranarayanan, Dy.Registrar of NIEPMD, and selected the candidates forthe personal Interview.

A panel led by the Director of NIEPMD, Dr. Mrs. NeeradhaChandra Mohan, and comprising of Dr. Balasundaram,& Mr. S . Ravichandran, both from Indian MaritimeUniversity (based at Uthandi), Mr. S Sankaranarayanan,Dy. Registrar, NIEPMD and Mr. Karthik Dore from IIMM,interviewed the candidates and unanimously selectedMr. Prabha Kant Tripathi for the Position of ProgramAssistant (Stores & Purchase)--------------------------------------------------------------------------

MUMBAI BRANCH

In-house Training Program for Rashtriya Chemicals &fertilizers Ltd (RCF)

Mumbai Branch conducted a two-day In-house TrainingProgram for RCF, on 20th & 21st August, 2013, at theirLearning Center, Admin Bldg. Chembur, Mumbai. Thiswas a repeat program conducted earlier on “Local Taxes& Imports” to cover other batches of their employees.

Mr. Abir Banerjee at the center flanked by Mr. Pawarand Mr. Shirish Joshi at his right and Mr. Bharat Shah

and Mr. A R Sarkar at his left

Mr. Abir Banerjee, the Executive Director (Trombay)inaugurated the program. The different topics werehandled by four faculties – Mr. Bharat Shah for sessionon ‘ VAT’, Mr. Ajit Shah for ‘ IMPORTS’ Mr. P C Parikh for‘CENVAT and EXCISE’, and Mr. Nijai Gupta for ‘INCOTERMS‘ the same faculties had handled the same topicsfor the earlier batch also. All the sessions were veryinteractive and very well received by the participantsand the feedback was very good. Totally 34 participantsconsisting of a mix of Management Trainees, SeniorManagers, and AGMs from Procurement and FinanceDepartments attended the program. Mr. Abir Banerjeechaired the valedictory session along with other

dignitaries and distributed the participationcertificates. He also thanked IIMM for the trainingsupport. Mr. Kashikar, GM was also present at theoccasion.

Mr. Shirish Joshi, Dy. Director-Education & Training ofIIMM Mumbai Branch coordinated the program.

Mr. Bharat Shah addressing the participants

Mr. Ajit Shah addressing the participants

Mr. P C Parikh addressing the participants

Mr. Nijai Gupta addressing the participants


A view of the audience

Mr. Abir Banerjee handing over participation Certificate

In-house Training Program for Nuclear PowerCorporation of India Ltd (NPCIL)

Mumbai Branch conducted a three-day In-houseTraining Program for NPCIL on 2nd, 3rd and 4th September,2013, at their Conference Hall. The subjects coveredwere “Statutory Levies and Effective InventoryManagement”. This program was organized for theirDealing Assistants.

Mr. S M Kulkarni, expert on taxation matters covered thetopics on VAT/Works Contract, Central Sales Tax (CST)Local Body Tax (LBT), and the proposed Goods & ServiceTax (GST).Mr. P C Parikh, another expert faculty ontaxation matters covered the topics on “Central excise,and CENVAT Credit Scheme, Mr. Jogendra Yadvendu Headof Railway Workshop at Matunga, Mumbai, covered thetopic on “Planning and Layout of Stores” and Mr. UmeshMalik on “Effective Inventory Management”.Approximately 37 participants attended the program.All the sessions were very interactive and well receivedand appreciated by the participants and the feedbackwas very good. Participation Certificates were issuedto all the participants on the concluding day of theprogram. Further repeat programs are planned duringSeptember-October 2013 to cover other batches

Dr. R H Shete, Director-Membership of IIMM MumbaiBranch coordinated the program

Friendship Day Celebration

GDMM students of Mumbai Branch took initiative andcelebrated “Friendship Day” on Sunday 4th August 2013

at lunch time at Goregaon premises.

Other Branch Members – Mr. Surendra Deodhar, NCMember, Mr. Ajoy Sarkar, Course Coordinator, and Mr.Venkatesh from Metacog who were present for a meetingon E-learning were also by Mr. G R Apte, GDMM facultyand NC Member of Mumbai Branch, Shirish Joshi, Dy.Director to join the Friendship Day Celebrations. Cakecutting was done at the hands of Mr. Ajoy Sarkar andMr. Surendra Deodhar to mark the occasion. Thecelebration went on for a while in a joyous mood andthereafter, the regular GDMM classes were resumed.

Students greeting each other on Friendship Day

Mr. Venkatesh doing cake cutting on the occasion

Students celebrating the occasion

Teachers Day Celebration : Teachers Day was celebratedon 5th September at Thane Study Center. GDMMFaculties – Mr. Bhupendra Singh, Mr. Manish Velanlkarand Mr. Hemant Kale – were present on the occasion. In


addition, Ms. Sudha Shah, owner of Thane study centerand herself a faculty for Finance in several B-Schoolswas also invited to join the celebrations. The studentsfelicitated the teachers on the occasion. The facultiesshared their views on the importance of this occasion.Mr. Hemant Kale opined that the faculties shouldfunction more as Facilitators rather than as Teachers.Thereafter the celebrations went on for a while withsongs and chorus by all.

Mr. Shirish Joshi, Dy. Director-Education coordinated theevent..

Students at Thane Center

Welcome to Mr. Bhupendra Singh

Welcome to Mr. Hemant Kale

Faculties on the dais – Mr. Bhupendra Singh, Ms. SudhaShah, Mr. Shirish Joshi (Dy. Director), Mr. Hemant Kale

and Mr. Manish Velankar

Welcome to Mr. Manish VelankarForthcoming Events1. Further three Repeat Programs for NPCIL during

September-October, 20132. Seminar on Public Procurement: scheduled during

November 20133. MLS Based Training Program at Thane during

October 20134. In-house Training Program on Advanced Supply

Chain for M/s Mahindra & Mahindra Ltd scheduledduring October 2013

5. Signature Program Disha 2013 scheduled duringJanuary 2014

--------------------------------------------------------------------------

PUNE BRANCH

Annual General Meeting of IIMM Pune branch : The AGMof IIMM Pune branch was held on 24.08.2013 at HotelShreyas and was well attended by 203 members of theBranch. Hon. Secretary Mr.Terrence Fernandesannounced start of the AGM after verifying the minimumquorum of members required. He informed to themembers at the outset, that our Shri. J.N.Gupta – PastNational President of IIMM (1979 – 1980) expired on29th July 2013. A two minutes silence was observed as amark of respect in his memory.

Chairman Mr.Mohan Nair Welcoming the members

Hon. Secretary Mr.Terrence Fernandes reading theActivities Report of 2012-2013


Hon. Treasurer Mr.Mihir Paramane highlighting theAudited Accounts as on 31st March 2013

Chairman Mr.Mohan Nair welcomed the members andaddressed the gathering and said, “It was a greatpleasure to have so many past chairmen during thisAGM - M/s G.S.Joshi, Pravin Sampat , P.N.Sapre, B. D.Sharma, Anant Khembhavi, Benny Boodle ,PrashantBendre, V.W.Joshi and Vijay Laghate and so on. We, theexecutive committee will always be indebted for yourcontributions made, in the earlier years to make ourbranch as one of the best branches in India.”

Members attending the AGM

New Executive Committee Members 2013-2015 alongwith Election Officer Mr.Benny Boodle and Scrutinizer

Mr.P.Y.Bendre

Hon. Secretary Mr.Terrence Fernandes read out adetailed report of the Branch activities for the year 2012-2013.

Hon. Treasurer Mr.Mihir Paramane placed before themeeting the audited accounts for the period ended on31st March 2013 and explained the heighlights. Afterdiscussions the accounts were passed. Mr.K.R.NairProposed and Mr.A.N.Hanchate Seconded the passingof the accounts.

Hon. Secretary Mr.T.Fernandes invited Mr.Benny Boodle- the Election Officer and Mr.Prashant Bendre – theScrutinizer, both of whom are our proud DistinguishedMembers, to conduct the Branch election for the year2013-2015.

The Election Officer confirmed after going through thenominations received, that following were electedunanimously for the posts mentioned against theirnames:-

Mr.Mohan Nair - ChairmanDirector, Ensigns Healthcare Pvt. Ltd.

Mr.Terrence Fernandes - Vice-ChairmanSr.Manager, ThyssenKrupp Industries India P. Ltd.

Mr.Sujit Edlabadkar - Hon. SecretaryFacilities Manager, Amdocs Development Center IndiaPvt. Ltd.

Mr.K.R.Nair - Hon. TreasurerSr.Manager – Purchase - KSB Pumps Ltd.

For the following posts Branch received morenominations than the required number for each post,hence election was conducted.

Committee Members - 7 Nominations against 6 posts

National Councilors - 7 Nominations against 5 posts

After conduct of the election process, The ElectionOfficer declared the following members were electedfor the year 2013-15 for the above posts.

Elected for the post of National Councilors:-

1. Mr.S.V.Gadgil , CEO & Director, Behr-HellaThermocontrol (I) P. Ltd.

2. Mr.Mangesh Agnihotri, Dy.Manager, IBM IndiaPvt. Ltd.

3. Mr.Mihir Paramane, Manager-Shipping,Hindustan Coca Cola Beverages.

4. Mr.P Chiranjeevi, Sr. Controller of Stores &Purchase & Sr.Dy.Seceretary-CSIR.

5. Mr.Dinesh Poduval, Mg.Director, IndecommGlobal Services.

Elected for the post of Executive Committeemembers

1. Arjunsingh. K. Rajput, DGM (procurement),Kirloskar Chillers Pvt. Ltd.

2. Narahari .P. Wagh, Director, Vector EngineeringSolutions .

3. Amit . C. Borkar, Plant Purchasing Leader, PGBunit, Cummins India Ltd.

4. Hitendra. M. Admuthe, Dy.GM- Purchase, RacoldThermoLtd.


5. Umesh .P. Kulkarni , Sr.Manager – Procurement,Emerson Export Engg. Centre.

6. Suhas. S. Gawas, Dy.Manager – Materials, EagleBurgmann (I) Pvt.Ltd.

The newly elected Office bearers took charge andMr.K.R.Nair, the newly elected Hon. Treasurer read outthe Resolution for appointment of auditors M/s.Chandabhoy & Jassoobhoy, Chartered Accountants asthe auditors for the year 2013-2014 as per NHQguidelines. Mr.B.D.Sharma Proposed and Mr.P.N.SapreSeconded this Resolution. Mr.Sujit Edlabadkar, the newlyelected Hon. Secretary, gave the vote of thanks to allassembled.

Credit goes to Mr.Benny Boodle and Mr.P.Y.Bendre forconduct of a defect free AGM and the election process.Mr.Benny Boodle expressed to the gathering, “You haveelected the New Committee in a very amicable way andthe complete election process took place in a verycordial manner. I admire the decency observed by oneand all throughout this AGM”. The AGM ended with anice Dinner at the Hotel.

“MATQUIZ 2013” – Pune Branch1ST RUNNERS UP at Finals held at Vadodara!

The Pune Round of MAT QUIZ was held at our WakdewadiNew premises on the 10th August 2013 afternoon 2 to 6p.m. This contest evoked very good response fromleading companies of Pune. In all 14 Teams contested -IBM, Amdocs, Thyssenkrupp Industries, Eaton, KirloskarPnuematics, Symbiosis (SIMS) , Cummins, John Deere,Exide and Arya Omnitalk Wireless Solutions.

Team of M/s. ThyssenKrupp Industries India Pvt. Ltd.,Mr. Venkataramanan Iyer & Mr. Hemantkumar Jadhavstood 1st at this round followed by, Mr.Krishna KumarAgrawal and Mr.Nakul Nishant of Cummins India Ltd.,who stood 2nd and Team “ACES” - Mr.Tarun Shukla &Mr.Sarath Kolli of Symbiosis Institute of ManagementStudies (SIMS) stood 3rd . These three teams were selectedand sent to represent Pune Branch at Vadodara for theNational Finals held on 15th August 2013.

Mr.S.K.Murthy,our Life Fellow Member coordinated theentire programme right from start teaming up withMr.Terrance Fernandes, Hon. Secy and Mr.MihirParamane, Hon.Treasurer. The trio designed the Quizand conducted the Pune Round very meticulously.

Mr. Mihir Paramane ably ran the contest as the QuizMaster. Mr.R.D.Singh and Mr. Shriram Upadhye werethe Juries with other senior members – Mr.SujitEdlabadkar – EC Member, Mr. N.P.Wagh and Cmdr.( Retd.)Kaushik Chakrabarty and with the able support of Mr.Ayyer and Mr.Nitin Waghmode of our Office.

Then on Mr. Terrence Fernandes took charge fully,escorted the Pune teams to Vadodara. He was also oneof the QUIZ MASTER at the Finals, on request ofChairman, Vadodara branch.

The results at the National Finals: - To our delightSymbiosis Institute of Management Studies, Punebrought us pride bagging the JOINT 1ST RUNNERS UPCUP along with Linde Engg., Vadodara. Our heartyCongratulations to Mr.Tarun Shukla & Mr.Sarath Kolliof SIMS.

Pune Branch were the Proud winners in the Years 2005(West Zone) and 2008 (National Finals – Pune won bothWinner and Runner up prizes). We are happy to haveregained our position once again. A Hat Trick no doubt,that Pune Branch richly deserve!

SIMS, Pune, Joint 1st Runners up, MATQUIZ 2013

--------------------------------------------------------------------------

RAE BARELI BRANCHThe Annual General Meeting of Indian Institute ofMaterials Management Raebareli Branch was held atRahi tourist Bangalow Raebareli at 7-OOPM on Saturday31 August 2013.On the written request of Raebareli Branch, Mr. S.C.Chaturvedi, distinguished members of Delhi Branch andChief Advisor of Raebareli Branch came all the way fromDelhi to conduct the AGM-2013 as the Returning Officer.

The AGM begun with the Corum of about 45 members.Mr. Sapan Kumar Bandopadhay, the Chairman of IIMMRaebareli Branch had presented the Auditor’s reportfor the period 2012-13 which was approved by VoiceVote. Members also approved the appointment ofNational Auditor for the period 2013-14 and 2014-15.

The Chairman also highlighted the activities of theBranch during last two years which included the highlysuccessful Northern Region Conference on 15th July 2012which was attended by National President, NationalSenior Vice - President, Vice -President North, Vice-President West, Co-chairman Board of Studies and fourformer National Presidents.

The NRC had very wide representation from delegates ofChandigarh, Kanpur and Delhi Branches which includedtheir Chairman. It was a highly successful event. TheChairman thanked Mr. S.C. Chaturvedi for conductingthe AGM-wonderfully well.


After the Chairman’s speech, Mr. S.C. Chaturvediannounced the final list of Executive CommitteeMembers of the Branch for the period 2013-2015. Itwas to the credit of outgoing Chairman that all officebearers were elected unanimously making a very healthystart for the branch. The Returning Officer also approvethe constitution of New Branch Executive Committee.The New Chairman Mr. V.K. Pandey I.T.I. Raebarelithanked all the Members for attending the AGM in largenumbers despite very poor weather. Some Member hadcome from Lucknow despite traffic problems.

Mr. V.K. Pandey greatly appreciated the effort of S.C.Chaturvedi for conducting the AGM. and taking troubleof coming all the way form Delhi despite his old age. Herequested Mr. S.C. Chaturvedi to keep on supporting theBranch in future also. Mr. V.V. Chaturvedi electedNational Council Member, Mr. Rajesh Pathania Vice-Chainnan, Mr. B.K. Pandey, Hony. Treasurer also spokeon the occasion.

Mr. V.K. Pandey also informed the member about Branchproposal to hold Northern Region Conference atRaebareli on 10th Nov. 2013. He requested all the

members to support the branch with maximum delegatesin the conference. Mr. V.K. Pandey extended his thankedto all Members who attended the AGM. All the memberswere provided the dinner which had very tasteful dishes.Name of Newly elected Members :-

S.No. Post Name of Candidate

1 Chairman Mr. Vinod Kumar Pandey

2 Vice-Chairman Mr. Rajesh Pathania

3 Hony. Secretary Mr. Harendra Kumar

4 Hony Treasurer Mr. Brijesh Kumar Pandey

5 Executive 1. Dr. A.K. SinghCommittee 2. Mr. Abhay MehrotraMembers 3. Mr. H.K. Sharma

4. Mr. P.K. Murarka

6 National Councillors1 - Mr. V.V. Chaturvedi2. Mr. S.K. Bandopadhyay3. Dr. B.D. Singh

---------------------------------------------------------------------------

VADODARA BRANCH

MATQUIZ 2013 National F inals at Vadodara :For the first time, MATQUIZ 2013 National Finals Eventwas held on 15th Aug’13 at Hotel Surya Palace inVadodara wherein 15 Teams participated from variousorganizations of different locations. Vadodara branchachieved grand success in the Event with able supportfrom Mumbai Team who being well experienced inconducting such programmes contributed for thisaccomplishment.

Mr.Surendra Deodhar & Mr.Ganesh Apte from MumbaiBr. as Quiz Masters during Final Round of MATQUIZ

2013.

Our National President, Mr. C. Subbakrishna alongwithMr. L.P.Patel-Sr.V.P.(National), Mr. Anant Kembhavi-V.P.(West) & Mr. N.K.Kabra-V.P.(East) graced theOccasion. Also, the Core Committee of Vadodara branchcomprising of Mr.Ajay Padhye-Chairman, Mr.MalayMazumdar-Vice Chairman, Mr.Anand Purohit-Hon.Secretary & Mr.K.P.Vala-Hon.Treasurer wellorganized the Event with the co-operation & support ofentire EC Team & office staff. The Judges comprised ofDignitaries from Corporates, PSUs, etc. like Mr. Kotwal(L&T), Mr. Pushparaj (OPaL), Mr.Milind Phulse (RRKabel),etc. while Quiz Masters represented Vadodara &Mumbai branches.


The WINNERS Trophy was bagged by MAHINDRA &MAHINDRA Team from Mumbai comprising of Mr.PraneyMalhotra & Mr. Anirban Goswami claiming 1st Position.

Mr.Ajay Padhye as Quiz Master during Semi FinalRound of MATQUIZ 2013.

The SYMBIOSIS INST.OF MGMT.STUDIES-Pune Team,Mr.Sarath Kolli & Mr.Tarun Shukla receiving the First

Runners-Up Trophy from Mr.C.Subbakrishna.

The LINDE ENGG.-Vadodara Team, Mr.Dinesh Sharma &Mr.Jagesh Popat (being Joint Winners) receiving the

First Runners-Up Trophy from Mr.C.Subbakrishna.

There was a Tie for 1st RUNNERS UP Trophy between TwoTeams wherein One Team from LINDE ENGG., Vadodaracomprising of Mr.Dinesh Sharma & Mr.Jagesh Popat andother Team from SYMBIOSIS INSTITUTE OF MGMT.STUDIES, Pune represented by Mr.Sarath Kolli & Mr.TarunShukla jointly bagged 2nd Position.

The ONGC-Mumbai Team, Mr.Swapnil Jaikar &Mr.Prafulla Chopkar receiving the Second Runners-Up

Trophy from Mr.L.P.Patel & also seen at left,Mr.C.Subbakrishna.

The 2nd RUNNERS UP Trophy was bagged by Team fromONGC, Mumbai comprising of Mr.Swapnil Jaikar & Mr.Prafulla Chopkar taking 3rd Position.

Thus, the programme was successfully completed withmany memorable moments to cherish life long.

The entire Team of Mumbai Br.& Mr.C.Subbakrishna,Mr.L.P.Patel, Mr.Anant Kembhavi, Mr.Ajay Padhye,

Mr.Anand Purohit with the Winning Teams atMATQUIZ 2013 Finals.

The entire Team of Vadodara Branch EC Members &Office Staff at completion of MATQUIZ 2013 Finals

event.-------------------------------------------------------------------------


EXECUTIVE HEALTH

World Heart Day. How could you not know? Indians are amongthose most vulnerable to heart disease (the average age for anattack is 47 here, unlike 64 in the west). Cardiovascular disease

are the top killers for those aged 25 to 60. Urban, rural, male, female -we’re just as prone. Some studies estimate that one in four of us will dieof a heart disease. Let this Sunday be one where you, the big-heartedIndian, also becomes the smart-hearted one. Top docs offer their best tips,straight from the heart to keep your beating longer.EVERYDAY HEALTHY1. Keep Teeth Clean : “Chronic gum disease may lead to heart troubleas bacteria from infected gums often enter the bloodstream and attach tothe fatty deposits in heart, leading to formation of clots,” warns Dr. VivekSoni of DY Patil Dental College and Hospital, Mumbai, So brush twicea day.2. GET A PET : Research by Dr Warwick Anderson and his team atAustralia’s Baker Medical Research Institute suggests that pets help cutstress, regulate blood pressure and control triglyceride and cholesterollevels. Playing with your dog or simply watching your goldfish swim inhis little bowl can slow your heart beat and lower shooting blood pressure.3. SYAT HAPPY : A study published in the American Journal ofCardiology this June states that happy, cheerful people are less likely tobe affected with heart issues. So if you don’t have a natural positivedisposition, work consciously at developing one.4. EXERCISE IS NON-NEGOTIABLE : It boosts immunity, makes thearteries supple (bringing down BP), burns calories and helps developalternate circulation routes to keep attacks at bay. “Aim for 30 minutes ofaerobic exercise every day (like running jogging, skipping, cross trainingetc.).” advises Dr. Ramakanta Panda, Vice Chairman and ChiefCardiovascular thoracic surgeon, Asian Heart Institute, Mumbai.5. GET MUSICAL : A study presented at this year’s European Societyof Cardiology Congress in Amsterdam states that when you listen tomusic you enjoy, endorphins released from the brain improve yourvascular health. Choose your music carefully though. Tunes that makesyou anxious have the opposite effect.6. SCORE ENOUGH D : People with the lowest Vitamin D levels areat more than twice the risk of dying from a heart disease compared tothose who have the highest Vitamin D levels. Get out in the morning andlet your body make some D.7. SLEEP ENOUGH : A team of Netherlands-based researchers havefound that adding daily shut eye of seven hours or more to an alreadyhealthy lifestyle (regular exercise, good diet, no smoking and moderatealcohol drinking) results in a massive 65 percent lowering of cardiovasculardisease risk.8. TAKE MORE NAPS : A 30 minute nap in the middle of the day mayactually save your heart, according to a 2007 Greek study. Researchersfound that a siesta helps lower stress levels and fends off heart disease.Find a couch and sign out for half an hour or put your head down on theoffice desk after every office meeting.9. NIX ALCOHOL : “Not only does it damage the liver (by increasingtriglyceride levels, it also damages the heart muscles, weakening theheart’s pumping capacity,” says Dr. Panda. :If you must drink, draw theline at a single 30ml serving for women and two drinks for men per day.Or switch to red wine (max 60 ml per day) to soak up its antioxidants.”FOODWISE :10. GRAPES AREN’T SOUR : If you don’t like wine, chug grape juiceor munch on a bunch of grapes. A study by the University of Connecticut(published in the Annals of the New York Academy of Sciences) foundthat grapes contain the same powerful disease-fighting antioxidants thatgive wine its heart-friendly benefits. Just skip the added sugar.11. HALT THE SALT : A little salt is wonderful, but even a little morethan your daily requirement of five grams (or one teaspoon) is bad foryour heart. It triggers high blood pressure, excess salt calcifies, scarsand destroys the muscles, valves and arteries of the entire coronary

TAKE IT TO HEART : 35 Tips to keep your ticker tickIng, even if you alreadythink you’re doing everthing right

Kavita [email protected]

route. Avoid processed foods - the biggest culprit - even if you have lowBP.12. CUT SATURATED FATS : Butter, mayonnaise, pork, red meat,hydrogenated oils (vansapati), cheese, full-fat milk are all high in saturatedfats that elevate bad cholesterol, leading to plaque build-up in arteries.13. CHOOSE OIL WISELY : “Most oils have something going for them,either they’re high mono or poly unsaturated fatty acids (MUFA or PUFA)have a good Omega 3:Omega 6 ratio or contain antioxidants. The trick isto read the labels carefully and then choose a few and use by rotation, oropt for a good mix of two different types of oil” say Dr. Brian Pinto, Chiefcardiologist at Holy Family Hospital.14. TRANS FAT ARE BAD NEWS : They raise your bad cholesteroland lower the good one. Rufuse foods that contain hydrogenated oil orpartially hydrogenated oil (packaged snacks, chips, bakery goods, creambiscuits and some margarines). Also cut down drastically on fried foodsas frying ups the trans fat.15. ENOUGH WITH THE COFFEE : Keep a tab on how much caffeineyou ingest (tea, coffee) as it is a vasodilator and may contribute toinflammation and even increase the heart rate,” says Dr. Panda. “Draw‘ the line at three cups per day,”16. CHANGE YOUR CUPPA : Make it green. A report in the EuropeanJournal of Cardiovascular Prevention and Rehabilitation states that drinkinggreen tea leads to improved blood flow around the body So a couple ofcups a day could go a long way to help your heart’s health.17. FIGHT FIZZ : The caffeine content alone is bad for your heart.Research has also found that drinking two or more sugar-sweetenedbeverages a day-can raise the risk of heart disease and diabetes,regardless of your weight.18. APPLE IS A+ : Everything you have heard about apples is right; ittruly is a wonder fruit. Pectin, a form of soluble fibre in apples helps lowercholes-terol, and its natural antioxidants prevent bad cholesterol fromoxidising. This re-duces plaque for-mation in your arteries.19. MINI MEDICINE : Begin the day with a pod or two of raw garlic(crush them a bit for maximum benefit). They’re loaded with sulphidecompounds, which cut cholesterol and clear out clogged arteries.20. REACH FOR SPINACH : Among veggies, it is second only togarlic if in antioxidant capacity It is rich in folic acid, which fights heartdisease.21. GO BANANAS : Need an antidote to all that heart damaging sodiumyou con-sume every day? Have a banana. It is loaded with potassi-um,which helps the body get rid of extra sodium, regulating blood pressure.22. TARGET OMEGA 3 : Eskimos, despite their high-fat diet, have alower incidence of coronary heart disease than most other ethnic groups.How do they do it? The difference lies in the kind of fats they consume -large-ly Omega-3 fatty acids from fish oils. Get your dose from fatty fishlike salmon, mackerel, surmai, and rohu. Vegetarian? Up your intake ofwalnuts, flaxseeds, methi and sarson.23. HAVE TOMATOES : Choose cooked toma-toes, as heat makesmore antioxidants available. Plus as lycopene in them is fat-soluble,eating toma-toes with a little bit of oil helps improve its absorption.24. GO WHOLE : Fibre in whole grains helps cut the risk of heartdisease as it binds bile acids (needed to make choles-terol) in the bodyand whisks bad cholesterol out of the body So think brown rice instead ofwhite, multi grain instead of white bread and have oats for breakfast.25. GO NUTS : Almonds can help lower your cho-lesterol and, accordingto study published by the re-searchers of Toron-to University, also helpreduce inflamma-tion, both big risk factors for heart disease.THE DIFFERENCE MAKERS26. TEST REGULARLY, 27. STOP SMOKING, 28. GETANTIOXIDANTS, 29. MEASURE YOUR GIRTH, 30. OPT FOR AHOLISTIC APPROACH, 31. AVOID STRESS PILE UP,32. BREATHE RIGHT, 33. COOL OFF, 34. LAUGH OUT LOUD,35. MEDITATE EVERY DAY.

��

Cover November 2013 Pesting - Indian Institute of Port ... · PDF fileMaterials Management...

Documents

Transcript of Cover November 2013 Pesting - Indian Institute of Port ... · PDF fileMaterials Management...