MATEMANEWS. Indian Institute of Materials Management, Bangalore Branch

Transcription

1 MATEMANEWS Indian Institte of Materials Management, Bangalore Branch VOLUME 46 APRIL 2017 ISSUE 142 Special Edition on the occasion of Materials Management Day Theme : SCM Role in GST Implementation & India Digitization

2 INDIAN INSTITUTE OF MATERIALS MANAGEMENT, BANGALORE BRANCH ADMISSION OPEN FOR FOLLOWING COURSES Sl.No Corse Gradate Diploma in Materials Management (GDMM) Gradate Diploma in Materials Management (GDMM) 2 Years - Reglar (Evening classes) Engg. Diploma / Degree 2 Years - Distance Engg. Diploma / Degree PG Diploma in Materials Management (PGDMM) 3 Years - Distance 4 Post Gradate Diploma in Logistics Management 1 Year Distance 5 Diploma in Stores Management (DSM) 1 Year - Distance 6 Diploma in International Trade (DIT) 1 Year - Distance 7 International Diploma in Prchasing and Spply Chain Management (in association with ITC/WTO) 8 Certified Professional Spply Manager (CPSM) in association with Institte of Spply Mgt, USA Gradate Diploma in Pblic Procrement (GDPP) Certificate Corse International Trade (International Trade) CIT (Certificate Corse on International Trade) Eligibility` Mode Intl. Certificate 6 Months (6 Modles_ Advance Certificate+6 Months(+6Modles) Intl.Diploma +6 months (+ 3 Modles + Project) Degree/GDMM with minimm 55% marks + 2 Years Experience in MM/Spply Chain Degree with 3 years experience Engg Diploma/Degree or Higher Secondary with 2 years Experience Engg Diploma/Degree or Higher Secondary with 2 years Experience Degree + 2 Years Exp erience in Prchase/Spply. Total Fees Rs.55,500/4 instalments Rs.42,000/4 instalments Rs.45,000/6 instalments Rs. 18,000/2 instalments Rs.9,900/Rs. 9,900/Cose Fee: Rs.2,500/- per Modle Proj. Rs.3500/Exam Fee: Rs.1500/- per Modle Rs.20,000/Exam Fee:4,500 Min six months Distance Degree + 5 Years Experi ence 1 year Distance Engg. Diploma / Degree 6 Months Reglar (Evening Classes) 12 Std and above Contact or NHQ Edn. Wing Rs.12,000/- Any Degree /12th Standard Rs. 14,000 10th 12th Standards, with Working People As per Govt. Notification Gradates /Post Gradates or Engg. Diploma with three years experience Rs. 20,000/- 6 Months (Reglar Classes will be condcted weekly three days in the evening 6.30pm to 8.30pm 12 SKILL Development Program Prchasing Management Stores Management 4 Months to 6 Months 13 PDPP (Professional Diploma in 6 Months Pblic Procrement (In association with World Bank th For more details and prospects, please contact IIMM Secretariat - Jly December 2017 Batch Prospects and Applications are being issed. - For frther details and prospects please contact IIMM Bangalore Branch Secretariat at the following address: Indian Institte of Materials Management 304,306 & 307 A wing, Mittal Towers M.G. Road, Bangalore , Tel : , , Fax : iimmbg@airtelmail.in; Website : ; National Headqarters: Plot No: 102 & 104, Sector-15, Instittional Area, CBD Belapr, Navi Mmbai , Phone : iimmed@iimm.co.in ; iimmnhq55@gmail.com

3 Chairman Message Dear fellow professionals It is more than 3 decades since IIMM came into existence. IIMM has grown from hmble beginnings and is now spread across the length and breadth of the contry with professionals. IIMM enjoys a great reptation among the leading indstries across India, thanks to the innovative and hard work pt in by the stalwarts who have gided this organization dring the past 33 years. The edcational programs of IIMM has been accepted as the best by the indstry and has helped all of s to keep abreast of the latest activities and trends in the area of Spply Chain. We have seen many changes that has revoltionized the way we condct or bsiness. The demand for efficiency and cost redction has been a dominant factor driving many of these innovations. Indian government, on its part has been spporting the indstry with spporting infrastrctre, rles, reglations, etc. in or objective of efficiency improvement and this is reflected in the latest changes. Digitization and GST will bring in a sea change in the way we condct or bsiness in the near ftre. Information highway has always been and will contine to be the single most important component in determining the efficiency of the Spply Chain. Let s exploit the opportnities presented to sher in the effective spply chain. Happy Materials Management Day!! M.S. SHANKAR NARAYANAN BRANCH CHAIRMAN 1

4 National President Mr. O.P. Longia (Omni Global Trst, Chandigarh) Senior Vice President Mr.G. K. Singh (Central Coalfields Limited, Ranchi) Vice President (Soth) Mr. D. Sbramani (KAPL, Bangalore, Karnataka) National Secretary & Treasrer Mr. A. K. Mehra (Bilaspr, Chattisgarh) Distingished Member and Branch Advisors : Mr. C.L. Kapoor (Teknic Echner Electronics) Mr. C. Sbbakrishna (Past National President, IIMM) Mr. A. Mathias (Past National President, IIMM) Mr. J.N. Mallya (Past National President, IIMM) Branch Chairman: Mr. M.S. Shankar Narayanan (BHEL) Branch Vice Chairman : Mr. Srinivas V. Rao (Sakra Hospital) Hon. Secretary Mr. Sdheendra K. V. (ADA) Hon. Treasrer Mr. D. Lakshmaiah (Indian Institte of Astrophysics) National Concil Members : Mr. P.M. Biddapaa (MPP Technologies) Mr. Pal George (DB Schenker India) Mr. V. Harish (Airbs) Mr. Channabasappa (KSRTC) Mr. D. Sbramani (KAPL) Exective Committee Members : Dr. A. K. Bandopadyaya (M.S.Ramaiah College) Mr. Akash Gpta (ISRO) Mr.Viswanathan P. (Management Consltant) Mr. Sengottaiyan (DISA India Limited) Mr. Achytha Rao M.R. (Health Care Global) Mr. Mahesh Klkarni (HAL) Co-opted Member and Adviser Mr. S.B. Lovekar (BOSCH Management Service) Co-opted Member : Mr. G.S. Raj (Sambhram Institte of Technology) 2

5 MATEMANEWS is a part of Indian Institte of Material Management, Bangalore Branch has focs to promote edcational activity on the spply chain management. Branch Chairman M.S. Shankar Narayanan Contents Branch Vice Chairman Srinivas V. Rao Digital Age of Spply Chain Management C. Sbbakrishna 5-6 Hon. Secretary K.V. Sdheendra Pblished in English See the online version at iimmbangalore.org Address Indian Institte of Materials Management, 303, A Wing, Mittal Tower, MG Road, Bangalore, India Pin Code Role of SCM Professionals in Improving Hon. Treasrer D. Lakshmaiah Local & Global Spply Chain Management D. Sbramani 7-8 Hon. Editor Akash Kmar Gpta Manager (Administration) S.M. Nagaraj Adit of Spply Chain Srinivas V. Rao 9-10 Vice-President (Soth) D.Sbramani Logistics Indstry Set for a Smooth Ride National President O.P. Longia Contract Logistics Telephone : /52 Fax : P. Viswanathan Printer Ranganatha Printers Spply Chain 2025 : Planning Today for Reprints Articles from this magazine may be reprinted, with attribtion to the athor and to IIMM Bangalore. A copy of the reprodced article wold be appreciated. Copyrighted photos may not be reprodced. Disclaimer Views expressed in MATEMANEWS are the contribtors and do not necessarily coincide with IIMM, Bangalore. Pblisher Indian Institte of Materials Management, Bangalore Branch Print sbscription Rs.100/- Tomorrow Akash Kmar Gpta Indstry 4.0 P. Sengotaiyan S & 3T : The secret of sccess Rahl Brahma RECAP OF EVENTS BRANCH ACTIVITIES Cover photo cortesy : Amazon Sort Center Indian Institte of Materials Management, Bangalore Branch

6 Editorial Speech Dear Spply Chain Professionals, Greetings for MM Day!!!! I am happy to present MATEMANEWS on the occasion of Material Managers Day. This magazine is being presented by IIMM Bangalore Branch exclsively for the academic and resorce development for its stdents, members, faclties, spply chain managers, indstry partners and well-wishers of the Institte. The theme selected is Spply Chain Management Role in GST implementation and India Digitization. Government of India is committed to spport Make-In-India and therefore implementation of GST is very important as well as complete digitization of the system. For this prpose, Government has introdced and focsing on Pblic Finance Management System (PFMS), Direct Benefit Transfer (DBT), new procrement e-sites of Central Pblic Procrement Portal, Government e-marketplace (GeM) portal, Non-tax Revene portal, etc. These decisions are being taken to make the Indian market and economy stronger, and improve the contry s reptation in the International market in different verticals. MATEMANEWS will soon cover these dimensions in its forthcoming editions. As a Spply Chain professional we have to ensre maximm contribtion for making smooth process flow of the bsiness, for development of this nation and to the organisation. I wold like to express my appreciation to all athors of the articles in this isse. These contribtions have reqired a generos contribtion of time and effort. It is this willingness to make the effort to share knowledge, concerns and special insights with the IIMM commnity at large that has made this special isse possible. Thank yo all!! AKASH KUMAR GUPTA Hon.Editor, MATEMANEWS 4

7 DIGITAL AGE OF SUPPLY CHAIN MANAGEMENT C. SUBBAKRISHNA Former National President, IIMM ID : cskfnp.iimm@gmail.com The Government of India has been promoting digital technology to be adopted to all walks of hman life inclding in the rral India. This has a great impact on Spply Chain Management in all sectors of Indstries. Spply Chain Professionals are the one who are to adopt the digital mode of bsiness. This will make their professional life mch simpler and more efficient and time saving too. All the data are stored in Clod which can be retrieved any time. The only reqirement is net connections throghot the working hors in an organization. The Govt. is encoraging even to common man inclding the rral areas to adopt simple technology of sing mobile phones as an instrment to transact bying and selling of goods and services. The SCM professionals who are sed to hard copy transactions, particlarly Govt sectors for their need to docment all their activities, are now reqired to make it a habit to se the gadgets (and not phones) to professional procrement activities. It is not jst phone calls or sending mails. The very sorcing is throgh web and all correspondences are throgh mails, skype and E-mode. I am referring to those companies and professionals who are not involved in E-procrement and reverse action. They may be spported with Tally, ERP, SAP or Oracle software. In India we have 68 crores of MSMEs. Biggest employer in the contry, next only to agricltre. Imagine even if there is one SCM person in each MSME the SCM poplation is 68 crores. In many companies the owner himself or Finance person may be working as SCM person. Whoever may be doing SCM work, the skill is reqired to be adopted. However, mostly they will not be having formal edcation in the domain of spply chain management. We have seen that in many professional companies inclding many MNCs there are no professionals qalified with formal edcation in SCM. They have to eqip with the knowledge and skill of practicing Digital SCM. The Government, as all of s are aware, is encoraging or even driving for E procrement and reverse action with paperless prchase. The main aim is for preventing or redcing corrption and nethical practices. This will also improve efficiency. The demonetization of higher crrencies has sprted the common man s activities of bying and selling with cash less leading to be digital. There is hardly any negative impact of demonetization at least in the GDP nmbers as we have seen, even if there is an impact, it is not drastic. The object of the Govt. is to increase tax base and give an impets to digital mode of bsiness which will lead to transparency whether it is Govt. or Private. There is no other way to handle corrption withot being transparent and being digital. To be digital withot demonetization wold have been a task of minimm of 5 years. If the payment and receipts become digital, then the Govt. mission is near to sccess in preventing or at least redcing corrption. Coming to or domain of spply chain, the methods being sed in digitization of or activities are many. Right from digital sorcing throgh web based till payment is made to the spplier throgh EFT or RTGS or varios other overseas payment terms or even throgh prchase cards. All the prchase activity from P to P is digital. In many RTGS or varios other overseas payment terms or even throgh Prchase Cards. All the prchase activity from P to P is digital. In many MNCs the prchase professionals are given the Prchase Cards like credit cards which enable them to prchase the reqirements of 5

8 the organization as per Bill of Materials. This system starts and close the prchase activity instantly with transparency and efficiency. In conventional manfactring indstries, whether Govt. or private, the process of prchase is by and large common. Govt. Dept./PSU s may indlge in varios kinds of tendering as per CVC gidelines and the organizational manal. Now, Govt. may allow the prchase professionals to sorce as per the delegation of powers and place the prchase order electronically. The sppliers are fixed based on their offers received throgh electronic media. However, there is no negotiation in the Govt. sectors. Govt. believe that when the selected firms are soght for offers, the order shold be placed on L1. Otherwise there will be no level playing field. The spplier ship the goods as per delivery schedle and inform the cstomer again throgh E mail and mail the invoice. The invoice will be processed depending on the terms of prchase order and if fond ok, arrange the payment throgh RTGS or EFT or Letter of Credit or Prchase Credit Cards linked to the bank Master card or Visa card with One Time Pass Word for secrity reasons. The next Pblic Procrement Bill which is said to be in the offing has to take care all these isses in the regime of digital age and technology encompassing the professional Spply Chain domain. All the pnitive provisions may become redndant since the process has no or less hman interference. As a reslt, the scope for corrption either totally avoided or redced to the minimm. There are cstomized software programs to spport the entire activities of SCM. If a company has few thosands of Raw material, components, assays, consmables, Capital Goods and R & D items, it was an herclean tasks to locate in the stores or warehose. Today with the warehose software, it can be easily located in the system to know where exactly in which bin or what level of shelf the material is stored and the eqipment reqired, if any, to retrieve. This is the digitization of warehosing activities. The indent to draw the material from the stores/warehose will be received throgh the and the indent is processed by viewing the stock position and check the athority and then send the confirmation by and then the staff can come to Stores/warehose by which time the goods are physically retrieved and kept ready to collect by the prodction or service staff. There is hardly any time reqired to these transactions which earlier sed to take few hors. All the records are in soft form and beyond hman errors or tamper free. In big steel indstries, where the location of stores and prodction points are miles away, these digital modes are most welcome. IIMM shold immediately take the lead and develop a corse for those who need to familiarize with digital handling. It may be combined with E-procrement and Reverse Action so that there is seamless learning in contination with E procrement/reverse Action. The E learning corses are to be inclded with these topics with sond academic material. In fact, the trainers are to be trained first by IIMM with the association with MSTC or other E-procrement companies. They can give live demo with other theoretical inpts. There is great deal of potential and market for IIMM for the Digital Spply Chain Corses. If a software company is also involved, the corse will be a great sccess and will be greatly sefl for the entire SCM fraternity. Bt IIMM shold be the pioneer to captre the market. Since IIMM is already sing e-procrement platform and is having trained trainers of ITC in all the modles of IPSCM inclding e-procrement, this shold be the strength of IIMM. 6

9 Role of SCM Professionals in Improving Local & Global Spply Chain Management D. SUBRAMANI VICE President (Soth)-IIMM. ID - smani_doraiswamy@yahoo.co.in Its or tre endeavor to promote professional excellence in Materials Management towards National Prosperity throgh sstainable development. Objectives:- to secre wider recognition, to safegard & elevate the professional stats of Individal in Materials Management to constantly impart advanced professional knowledge & to improve the skill of the persons in Materials Management fnctions. To propagate & promote among the members strict adherence of IIMM code of ethics as necessity for the development of members organisations. Considering In line with the IIMM Vision, Mission & the objectives this write p looks at the Role of SCM professionals in improving their Local & Global Spply Chain Management, qalitatively. Where are we today:professionals are needed to be qality conscios to learn and n-learn. Spply Chain Management (SCM) is moving at a greater pace, rapid changes are happening continally, in logistics front & Technology, most of them are disrptive Tech. digitization(payment system), Internet of things, Drones RFID and sage of Hyperloop, wearable tech. for fastest delivery, flly Atomated Warehose Cstomised services, 3D printing, clod compting & painstaking efforts have mades almost self-reliant in space & Space material field today, Physically yo cannot evolve carbon based compters then silicon compters etc.,. The Indian market and economy is becoming stronger day by day, its repte in the International market has improved drastically nder different verticals. The adoption of tools of spply Chain Management is considered as a KRA in emerging fast developing Indian economy,as an opportnity to invent new sorce. Now the leading spply Chain Management Materials professional will have to share their rich experience qalitatively among themselves and to the organisations. If we try to define Spply Chain Management (SCM) it is abot managing the flow of information (IT), materials services and money across any activity besides its cross fnctional aspects, in a way which maximizes the effectiveness of the entire process. A spply chain is a network inclsive of Logistic facilities and distribtion options that performs the fnctions of procrement of materials, transformation of these materials into intermediate goods as well as finished goods & distribtion of these finished prodct to cstomers in the fastest economic activity, thogh Digital Driven Spply Chains exist in both service and manfactring organisations, althogh the complexity of the chain may vary greatly from indstry to indstry and firm to firm. 7

10 International Challenges:In the global scenario, organisations are managed by the qalified professionals particlarly in Material Management fields. The challenges faced by the Spply chain managers, Edcational entrepreners and Manfactrers who went global in terms of operations and spread, faced enormos task of establishing themselves and sbseqently becoming profitable in accordance with their targeted goal. Spply Chain professionals are already feeling the heat de to expansions and cross border accsations along with high integration in digital driven technology. Hence it is necessary that SCM professionals nderstand the challenges and develop sitable strategies to meet the objects sccessflly withot compromising on qality. Typically Spply Chain Management incldes determining the (a) Cash and Credit Transfers. (b) Sppliers and distribtors Order flfilment (c) Acconts payables and Receivable, (d) warehosing and inventory (e) considering Cstomer s cstomised needs (f) forecasting Demand and Spply inclding strategic otsorcing, partnering, financing & other fnctional reqirements of partnering organisations & their goods & services (g) Srvey & identifying self & competitor s SWOT analysis to excel in the bsiness. etc. DOMESTIC PROBLEMS: We Indians have or own inherited attribtions to play far away from the competitive corresponding international markets& market mechanism. Generally the world markets are controlled by developed contries with reference to prodct qality, entering to that scenarios is very easy now, becase of greater integration in Information Technology. It is a fact that global spply chain management has significant bilt in time becase of the time involved. This sally trns into cost and as a reslts leads to time extension. Hence distance proves to be critical factor. Secondly response logistics being the order of the day, distance can affect the efficiency of the entire chain, now Dynamic mlti-modal fastest transportation as mentioned problems. in the para 1 above will srely take care of domestic If we look toward developing competencies, there are some sggestions to be examined. Inclsive Technological collaboration and cooperation as cltre of organisation inclding the qality within. Extending & edcating the organisational cltre between and among trading partner to redce the cycle time & increase inventory velocity. Adopting lean principles, & Kanbon practices in every sphere of operations. Viz (Removing waste & cost redction across entire spply chain) specially in high volme & margin prodcts. Vale stream mapping for nderstanding the present& global spply chain and designing a new one. SCM professionals are expected to meet the global challenges by mix of strategies viz., Merger, acqisition, amalgamation & absorption in all dynamic aspects, to sccessflly carry ot the operations across the globe. Finally, the Indian manfactrers and all those related to SCM bsiness can pick p from the recommendations given by the experts in the Liberalization, Privatization & Globalisation scenario. 8

11 Adit of Spply Chain SRINIVAS V. RAO General Manager Prchase & Spply Chain Management Sakra World Hospital, Bangalore Introdction : Every department / process has to ndergo an adit process, not as a falt finding activity bt as an process improvement over the previos actions and initiatives. Frther, the aditors are like watch dog who by their constant monitoring will make the organization stronger and effective and close all the relevant loop holes which will give way for committing any mistakes or nethical practices. Ths, it has been rightly stated that it is a process improvement activity. Spply Chain Adit : In the layman langage, the spply chain adit comprises of adit of following for major areas of fnctions :(a) Set the reqirements; (b) Sorcing of vendors; (c) Raising of the orders; and; (d) Observer the performance; Let s have a panoramic view of each of the above fnctions. (a) Set the reqirements : One of the basics and fndamentals of aditing is to measre and evalate against any set reqirements. Hence, we always compare the actals as against the set bdgets for as many areas as possible. The reqirements may vary or is obtained from mltiple sorces both within as otside the organizations, bt for spplier adits these reqirements come from the contracts, which in trn comes in different forms sch as prchase orders, letter of agreements, etc., However, focs shold be laid in three important aspects which cover the setting of reqirements. (i) Specificational Reqirements : These are nothing bt the technical reqirements which are sally in classic form and specifies the fnction related to it. In many cases, the specifications are fond in the form or drawings, standards, etc., In an adit check list, the aditor mst read and nderstand these technical data. He / she shold get them clarified from the process owners / engineers abot these technical aspects. This knowledge will help the aditors while cross examining the docments vis-à-vis the physical item data. (ii) Accept-Reject Option : There are certain tolerance levels in a process indstry which the spplier will claim to have complied with bt as an aditor it becomes his mandatory dty to verify these data on the site and confirm the stats as correct or incorrect. (iii) Management Objectives / Standards : For certain category of items and vendors, there are certain set management standards, below which it is jst not acceptable. These standards come throgh government reglations from the FDA, GMP, ISO, ISI, NABH, NABL, etc., For smaller vendors they can select / set their own site specific manals, procedres, etc., and follow the same in letter and spirit and also imbibe the same as part of the reglar work cltre with their team members. However, the above set three criteria mst be spelt ot clearly in the prchase orders / contracts, bt in many of these docments, they are given as a separate attachment. A keen aditor will perse the contract orders and all these docments and prepare a detailed checklist against a 9

12 particlar vendor. Additionally, the aditor can also lay his hands on the external codes, specifications and standards along with the site-specific qality, safety and environmental manals from the internet and retain them for scrtiny at later stages. This will help s to generate qestions as and when the adit is taken p, which becomes the basis of spplier adit. (b) Vendor Sorcing : In all private organizations, adit happens only after the contract is placed. However, in government / pblic sector nit contracts, there is a provision for an internal aditor / rep of Competent Financial Athority to be part of the prchase committee, whose note approval is taken before awarding the order / contract. Potential critical sppliers need lots of backgrond research. Some sppliers might need an engineering review and history of good service to others. Certain vendors may be registered to one of the ISO 9001 based management system standards, where they got a few bons points on selection rankings. For most category of potential sppliers (critical, important and general) aditors can probably get involved in the selection process whereas it is not a mandatory reqirement. (c) Raise the order : Vendor s qality engineers and others will be advised to review draft contracts to ensre that qality, environment, safety and secrity measres are ensred to be inclded in the order contract. The main reason behind this being that they will form part of sbseqent adits. Frther, if any adit of the sppliers is to be carried ot then it is to be spplemented with an athority to do so. Athority may range / be as simple as a rights to access clase being inclded in the general terms and conditions of spply dly printed on the obverse side of the prchase order. For critical vendors, this athority shold appear as one of the nmbered clases in the front side. These form part of Contract Law and most of the aditors are not familiar with the contract law, hence it is eqally important to have all adit commnications notifications, reslts and corrective action reqests to be roted throgh the prchase department. (d) Observe the performance : In majority of cases, the codes and standards does not reqire vendor adit. Aditing is bt one of the many methods sed to monitor the vendor performance. Going by the concept of easiest and cheapest to the hardest and expensive adits, one can have the following docmentations as spportive evidence for compliance to the adit reqirements :(i) Certificates and other paper works; (ii) Inspections; (iii) Registrations; (iv) Technical site visits; and; (v) Adits; Usally certificates of conformance / compliance are generally not worth, bt it is sggested that to have an on-site performance adit and carry ot check on few instances and assess whether there are no hidden information and that they are representing a tre and fair pictre. Aditors are also advised to carry ot / examine the spplier s inspection program abot their incoming, in process and final prodct adit so as to ensre that it is sond and dependable. Usally, adit is combined with a technical visit so that the vendor s overall positives and negatives are examined along with specific isses / problems. Smmary : Unlike internal adit, vendor adit is an option. In some cases, vendor adits may not be mandatory, however a strong and profitable organization will always ensre that vendor adit forms one of their laid down processes, as strong organizations need strong vendors and aditing bilds a stronger and robst spply chain process. 10

13 LOGISTICS INDUSTRY SET FOR A SMOOTH RIDE Goods & Services Tax (GST), for sre, remains one of the two bold-play initiatives taken by the reigning government so far. After years of being entangled in political knots debating a transparent and efficient nified tax system, India is soon on its way to become a cltter-free tax highway. GST is on track. Parliament has approved it. It looks that date of implementation of GST is Jly 1, The three enabling GST bills Central GST, Integrated GST and State GST. India s logistics performance at its key international gateways has scaled p significantly in the last two years and that was evident in the World Bank s biennial measre of international spply chain efficiency report namely the Logistics Performance Index where India s ranking cataplted from 54 in 2014 to 35 in The introdction of GST will frther give impets to the transport and logistics indstry in India. While the entire dynamics of transportation and logistics will ndergo a sea change once GST is implemented, it will lead to a leaner and fitter logistics indstry, which in trn will lead to greater efficiencies. Both transport as well as manfactring companies will be able to take better advantage of the economies of scale. Lading the government s move, Pirojshaw Sarkari, CEO, Mahindra Logistics said, The annoncement of GST Concil finalising its recommendations on almost all isses and timely preparation of IT system needs to be welcomed. In an endeavor to create awareness abot the new GST led taxation system, we spport the government s move to reach-ot to trade and indstry. While the entire dynamics of transportation and logistics will ndergo a sea change once GST is introdced, it will lead to a leaner and fitter logistics indstry, which in trn will lead to greater efficiencies. 11

14 Bdget pshes for infrastrctre Readying the stage for GST, Jaitley s Bdget proposal for laid special focs on road and infrastrctre sector. The Bdget allocation for highways was increased from Rs 57,976 crore in FY to Rs 64,900 crore in FY while 2,000 km of coastal connectivity roads have been identified for constrction and development. This will ensre better connectivity with ports and remote villages. The total length of roads, inclding those nder the Pradhan Mantri Gram Sadak Yojana (PMGSY), bilt from till the crrent year is abot 140,000 km, which is significantly higher than previos three years. With an eye on improved logistics across the contry in the ftre, the finance minister said, An effective mlti-modal logistics and transport sector will make or economy more competitive. A specific programme for development of mltimodal logistics parks, together with mlti-modal transport facilities, will be drawn p and implemented. Advantage for 3PL providers Implementation of GST will ensre that the nascent 3PL frther embeds itself in the logistics space. Market research agency Novonos in its recent report estimates that 3PL logistics market in India is expected to be worth $ billion by By 2020, Indian logistics market is expected to grow at a CAGR of percent primarily driven by the growth in the manfactring, retail, FMCG and e-commerce sectors. This growth rate is also based on the expectation of GST being implemented and the logistics companies can optimise their operations to redce cost and increase their margins. Frther, it is the implementation of the GST that wold increase prodctivity and raise efficiency levels in the logistics sector and the economy as a whole. According to varios indstry estimates, freight times will come down by percent and logistics costs are expected to redce by percent. Once GST is implemented, instead of maintaining smaller warehoses in each and every state, the companies will be setting p lesser and bigger warehoses, and can follow hb and scope model for freight movement from warehoses to manfactring plants, distribtors and retailers. With GST in place, there will be consolidation of warehoses, ths redcing the time lost between transporting from one warehose to another. Shorter spply chain cycles will entail lesser time spent on nnecessary activities like paperwork, material scrtiny at checkpoints, compliance with mltiple reglations, etc. This will make it smoother for transport companies as they will be able to transport goods with lesser stoppages and breaks in jorney. Conseqently, it will redce the need for extensive docmentation in inter-state sales, making it a lot easier to transport goods than it is crrently, Allcargo Logistics posted on its blog. Therefore, there lies a bigger opportnity for the 3PL service providers who can manage these bigger rotes and deliver accrately and efficiently. The Indian logistics indstry constittes arond 14 percent of the GDP which is greater than the other developing nations. The 3PL logistics firms are evolving from traditional service delivery systems to highly integrated and technically eqipped service providers striving to meet the service demands. GST provides them with ample opportnity to invest and expand the 3PL base in India. According to a report by CARE Ratings, post GST implementation the 3PLs wold have to restrctre its assets and realign its operations in line with changes in the operations of its cstomers in the new scenario. Crrently, 3PLs have warehoses located near major distribtion centers of its key clients (different indstries) irrespective of its geographic disadvantage mainly to avoid interstate taxes. However, post GST implementation, 3PLs are expected to bild integrated warehoses at logistic sitable locations. So accordingly, their assets wold need to be restrctred to accommodate the long distance consignments which will occr with this scenario of free movement of goods across the contry. The consmer drables 12

15 sector is expected to witness maximm drop in the logistics costs as percentage of total sales, as their warehoses are bilt at different states to avoid interstate tax. The central taxes which will be sbsmed into the GST are: Central Excise dty, Additional Excise dty, Service tax, Contervailing dty, and Special Additional dty of Cstoms. Also, the state taxes which will be sbsmed by GST are: Sales tax, Entertainment tax, Central Salex tax, Octroi and Entry tax, Prchase tax, Lxry tax, and Taxes on lottery, betting and gambling. GST will be collected at every stage of sale or prchase of goods or services, based on inpt tax credit method. This simplification of the taxation system wold make the inter-state transportation of goods more efficient. Impact on Spply Chain Management The strctre of the spply chain is inflenced by differential taxes based on geographical location. By eliminating mltiple state taxes, the logistics companies are encoraged to consolidate their warehoses instead of maintaining one in each state to avoid central tax. The following table illstrates the expected benefits that logistics indstry wold derive post implementation of GST Interstate tax brden Pre GST Post GST Crrently, each of India s 29 states taxes goods that move across their borders at different rates apart from that Corporate state tax of 2% is levied for inter-state goods transfer. Not applicable. Uniform taxation and no varying tax strctres wold be allowed across states Crrent interstate taxation has reslted in a With the introdction of GST, there is likely to be major consolidation in the indstry. It cold see the emergence of major large players who can span the entire logistics chain. Natre of the indstry large nmber of norganized players in this indstry. Reslting in fragmented indstry. Logistics time Cost De to trade barriers sch as entry taxes, local body taxes, OCTROI and other hrdles trcks lie idle for 30 to 40% as per indstry estimates dring their delivery schedle. The existing interstate taxation system has forced the companies to create and maintain warehoses in each state. Crrently, there are arond warehoses per company, one in every state, in addition to this Carry & Forwarding agents per state making the spply chain longer and inefficient. GST will srely speed-p the delivery schedle. GST tax will be levied on transportation of goods and fll credit will be available on interstate transactions. Logistics costs are expected to be decreased by % of sales on accont of optimization of warehoses leading to lower inventory costs, which are set p across states to avoid paying 2% corporate sales tax and phasing ot of interstate sales tax. There is immense scope for optimization of costs. Critical bsiness implications post GST implementation Spply Chain Re-Engineering Many service providers have to revamp their spply chains, realign their warehoses and logistics networks. This gives tremendos opportnity to 3PL and 4PL logistics providers. Transportation Re-organised manfactring plants and warehoses wold redce the primary freight charges as they are located close to each other irrespective of which state they are in. However, secondary freight may increase becase of the fewer warehoses. 13

16 Consolidation and Otsorcing With the increase in the availability of organized and efficient players, there is a possibility of consolidation. Also, this leads to the otsorcing of their logistics operations to logistics service providers. Skill set p-gradation and service levels The need for optimally skilled and technically qalified workforce is likely to become a challenge. Hence, to cater to this need, spply of skillfl workforce shold improve which in trn improves the service level of the company in its operations and meet the cstomer demands Atomation Becase of the fewer warehoses, the warehoses can be ramped p and eqipped with state of the art technology to facilitate long term benefits. Latest warehose management systems (WMS) and modern robotics can be sed for the effective and efficient warehose management. This in effect brings the overall cost of the prodct down as the inventory cost and inventory carrying cost is down. This directly affects the final cost of the prodct bring the selling price down. The cost saved by the companies as a reslt of GST can be sed to invest frther to improve serviceability. One important highlight that GST s implementation will do is to redce the time taken at varios check posts while transporting goods. This, in trn, will redce costs for cstomers and logistics companies, making the latter more efficient and profitable. Presently, trcks are idle for abot 40 per cent of the total travel time de to Central Sales Tax/Octroi payment. GST has the potential to accelerate growth in the logistics indstry. While indstry pndits still feel that many contentios isses remain, sch as the clear definition of spply, spply chain management throgh warehose engineering, credit allowance dring the transition phase etc, there is general consenss to welcome this new tax regime. With GST s imminent implementation, the logistics indstry shold start exploring different spply chain models with their clients and at the same time develop a completely synchronised ERP acconting system to spport inventory spply management as reqired nder the GST regime. Nevertheless, GST is still the change the logistics indstry is eagerly awaiting as overall, the positive impact of GST far otweighs the disadvantages for this indstry. Sorce : Indian Institte of Materials Management Bangalore Branch Annonces A Two-day Workshop on Vendor Management & Negotiation Skills at Date: 18th and 19th May 2017 (Thrsday & Friday) Royal Orchid Central Manipal Centre, Dickenson Road, Bangalore For more details please contact IIMM Secretariat Indian Institte of Materials Management #304, 306 & 307 A Wing, 3rd Floor, Mittal Tower, No.6, M.G.Road, Bangalore Secretariat : Ph: / Mobile:

17 Contract Logistics P. VISWANATHAN Management Consltant Exective Committee Member, IIMM BANGALORE BRANCH A Contract logistics is the otsorcing of resorce management tasks to a third party company. Contract logistics companies handle activities sch as designing facilities warehosing, transporting, and distribting goods, processing orders, and collecting payments, managing inventory and providing certain aspects of cstomer service. Examples of major contracts logistic companies inclde United Parcel Service, DHL, GenCorp Logistic management is an important component of many companies profitability and overall sccess. While some companies manage their own logistics, others find it more efficient to hire specialized contract logistics, companies to manage their logistics for them. Contract logistic companies often need to develop a deep nderstanding of how different indstries work in order to manage the logistic of a variety of companies in the best possible manner. Otsorcing of core logistic fnction of warehosing is rapidly becoming poplar not only for MNC s with global operations bt all organization in medim and small sector too. Otsorcing may fall into two categories. One category wold be the flow throgh warehose, merging and distribtion centers that are consolidation points in the spply chain network. These can be managing finished goods or raw material spplies or even spare parts etc., The project size is relatively smaller, and the warehose is not expected to hold inventories beyond a few days. The second category of warehose cold be the larger distribtion centers managing finished goods inventory, and related operations in large scale, catering to exports or spplies to a region continent or contry level or inbond raw materials warehoses managing JIT or VMI operations in plant management, plant FG operations etc., These warehose operations are critical in natre and are primarily categorized by the volme and vale of inventory held, size of operations and its relative position and importance in the spply chain network. THE INDIAN SECENARIO India s growth is directly linked to the state of infrastrctre in the contry. The work done to improve this has not been very important over the past many decades. This has ensred a lethargic and infreqent growth for the Indian economy. It wold be safe to say that owing to this road network is incomplete rail network has been pgraded significantly in a long time, and sea and inland waterways are still nderdeveloped. The present government has given enogh indications that it is finally addressing these isses in a significant way. However this has been marred by the complex natre of the logistic indstry in India, inclding the contract logistics sector. Improving the infrastrctral, deficiencies and improving the logistic indstry involves a coordinated effort by different ministries, which are different decisions making bodies. The still imperfect coordination between the ministries has led o inefficiencies when it comes to implementation. There is also the isse of constantly changing complex federal tax strctres. Contract logistics sector in India is still nderdeveloped and nder penetrated. Abot one third of all Indian companies tilize the services of logistics companies, which is lower than the international standards. Within the logistic vale chain transportation is the most otsorced activity by indstries or companies followed by freight forwarding. Cost redction is the primary driver for otsorcing logistics in India, transportation acconts for almost half of their total logistics expenditre. Reptation and the ability to provide end-to-end, soltions are the key factors favoring the selection of Logistic Service Provider for otsorcing in India. Nevertheless, experts are positive abot the growth of 3PL services in India in the pcoming years. In the recent years 3PLs have grown with a CAGR of more than 20%, bt the scope to grow is phenomenal. In India ato companies have been 15 5

18 major sers of 3PL services so far and significant growth potential exist in information technology hardware and electronics, FMCG, pharmaceticals, and retail sectors. Initially, MNCs were sing services of 3PL companies bt now domestic companies has started otsorcing of logistics and warehosing fnction even few SMEs are sing otsorced model in bits and pieces. EMERGING OPPORTUNITIES AT THE ONSET OF GST: Contract logistics has been growing over the past few years and GST is going to change strategies for a large nmber of enterprises, changing the compact logistics landscapes. The qantm of investment from the private sector, government reglation, the investment in infrastrctre by the government year on year are all factors that determine whether the logistic sector in India has been performing well in the last few years growing at a rate of 15% p.a. However it is the implementation of GST which will give the sector a mch needed in India. The Goods and Services tax wll be comprehensive nationwide single tax, which will sbsme the plethora of taxes n the contry. GST will be a single tax on manfactre, sale, and consmption of goods and services throghot India. The prpose behind this move is to have one indirect tax, for India which will make the contry a nified common market. The central taxes which will be sbsmed into GST are: Central Excise dty, Additional Excise Dty, Service tax, Contervailing dty, and special additional dty of cstoms. Also the state taxes which will be sbsmed by the GST are: Sales tax, Entertainment Tax, Central Sales tax, Octroi, and Entry tax. Prchase tax, Lxry Tax, and Taxes on lottery, betting and gambling, GST will be collected at every stage of sale or prchase of goods or services, based on inpt tax credit methods. The simplification of taxation system wold make the inter-state transportation of goods more efficient. The logistic sector in India, inclding 3PL is a highly fragmented sector with highly inefficient spply chains of the firms. After GST implementation companies will have an added incentive to either develop its own logistics arm or tie p with the domain exerts which are the 3PL companies. This will benefit the companies as system of seamless tax credits throghot the vale chain and across state bondaries will bring down the cascading effect of taxes and ths redce the hidden costs of doing bsiness especially the benefit of entering 3PL will increase. For logistics players streamlined logistics processes and better bottom line will lead to consolidation of the sector. Frther newer players will enter the arena and investors will find it lcrative to invest in the sector knowing that retrns are garanteed in a mch more predictable bsiness dynamics. Pls existing players are flly expected to scale p the bsiness environment that will follow GST implementation in the logistics sector in India. In general the proposed roll ot of GST wold impact the crrent network strctre of the LSPs (Logistic Service Providers) are likely to be more agile responsive and wold need restrctring of their assets and operations to create an flfilling the demand from changed operations of the cstomers. Crrently LSPs have their warehoses located closer to the major distribtion centers or manfactring plants of key clients, even if these locations were logistically nviable. Post GST scenario there wold be need to recalibrate, the net work model and bild large integrated warehoses in specific well connected and at logistically optimal locations, with a focs on redcing the overall cost of distribtion. As companies face increasing competition their spply chain wold need to be more agile, and responsive, to face the changing demand. Clients wold look to move into asset light model, which wold provide opportnity, for LSPs to acqire greater share for otsorcing and provide end-to-end logistic soltion to their clients. GST aims to enable free flowing of goods across the contry. Crrently the transportation volmes are not niformly distribted across the contry de to the reglatory control on goods, transfer and sage of different LSPs for each region. Free flowing movement of goods wold reslt in LSPs gaining larger volmes and nationwide contracts from clients. With the growth and penetration of e-commerce demand and distribtion is becoming Omni-channel in natre. In order to service Omni-channel distribtion LSPs wold need to invest in technology, so that they have visibility and control over the entire range of distribtion channels and can optimally tweak them in real time. Comparing the srge in otsorcing and consolidation by LSP (Logistic Service Providers) in India and globally. The logistic 16

19 sector in India is highly fragmented in natre with several small and mid-size players dispersed across mltiple regions, asset types and services. This limits the ability to offer tre end to end and integrated service to cstomers. In many key logistics intensive sectors the sorce and destination, locations of cargo and distant and often located I regions with poor access by any mode of transportation. Frther this physical distribtion is impacted by an nfavorable modal mix, skewed towards sage of srface transportation modes roads in particlar. The share of road transport in the total freight volme has increased in the recent years, contribting p to 65% of the total share of freight volme. The choice of transportation mode significantly impacts cost efficiencies with road transportation having the lowest cost efficiency in comparison to rail and inland water ways. Most of the Indian ports are operating beyond 100% tilization. This reslts in congestion within the port reslting in bottlenecks throghot the logistic vale chain. As bsiness seek to focs on their spply chains, they are realizing that otsorcing and partnering with a LSP is the optimal to achieve these objectives. In the developed global markets, the focs, of manfactring and sales organizations shifted towards investments in core activities, with the non-core activities getting otsorced. With the service reqirement and expectations from the logistics service providers, in the otsorced model becoming more complex (both from a service and cost standpoint) economies of scale have become critical in meeting the demands. The changing dynamics, copled with larger investment needs in long gestation spply chain bsiness activities led to consolidation by logistics providers who leveraged their network strengths bild across geographies. Challenges faced by 3PL service providers: The contract logistics space contines to evolve with changing consmption pattern and expectations. The traditional Indian bsiness model bilt arond long standing relationship is increasingly coming nder strain. The core challenge for 3PL are: 1.Weak and slow infrastrctre development. 2. Volatility de to freqent change in reglations. 3. Shortage of talent and inability to attract the yonger generation to invest their resorces and ftre which cold being fresh and ot of the box ideas. Infrastrctre development is one of the biggest bottlenecks in the development of 3PL market in India. Infrastrctral problems sch as poor road conditions, poor connectivity, inadeqate air and sea port capacities and lack of development of mltimodal transport infrastrctre have been constant irritants. Convention road transportation is relatively costlier than inland waterways or rail transportation. Bt indstries and LSPs are compelled to se the road transportation de to insfficient capacities of rail and port infrastrctre as well isses in mltimodal at connectivity, ths escalating their overall logistic costs. Delay de to tolls, interstate check points and other inspection stoppage, frther add to the logistic costs. What the ftre holds? The growth of the 3PL market in India is linked to the consistent growth of the atomotive, consmer retail, healthcare and other major indstries, which depend on the services of third party logistics to sorce and distribte their prodcts and raw materials. Also improvement in the logistics infrastrctre in the recent past is enabling the 3PL providers to offer integrated transportation and warehosing services and have better control and deliver better services. Another important factor which is expected to lead to the growth of 3PL market in India is the introdction of Goods and Service Tax. This single tax will simplify the crrent complex, manfactrers to pay a nmber of taxes. Frther rapid globalization, 100 percent FDI in cold chain segment private eqity investment and FDI in the retail sector in India are adding the growth trajectory of the 3PL service providers in India. As spply chains are becoming more complex and global in natre, logistics otsorcing is expected to move towards a more asset light end to end integrated demand driven model, providing mltiple growth opportnities. Investment in infrastrctre development capacity enhancement of ports, development of mltimodal freight connectivity corridors, thrst on manfactring are expected to drive the transportation segment. With companies facing increasing competition, they are expected to increasingly otsorce their logistics fnction and focs on their core competencies. This will open p opportnities for integrated 3PL services providers. Warehosing reqirement is expected to increase significantly de to growth in manfactring, trade and consmption driven sector. Growth in e-commerce and new channels in the retail trade is expected to increase to demand for warehose and cold storages. Implementation of GST wold affect the crrent configration of spply chain network and wold generate demand for new integrated warehose. 17

20 Spply Chain 2025 : Planning Today for Tomorrow AKASH KUMAR GUPTA Exective Committee Member, IIMM Bangalore Branch It is nearly impossible to predict the ftre, bt by examining crrent trends, we can prepare for the nknown. It is right time for spply chain strategists to examine how the global landscape, algorithmic bsiness, the economics of connections and hman resorces may shape the ftre spply chain. When 2025 rolls arond, traditional spply chain models will be extinct. There are 10 different disrptors prompting this transformational change. Some are well nderway and evolving toward matrity. Others are in early stages of development. All will have a decisive impact on the indstry's ftre. They inclde: E-commerce and omni-channel distribtion: Online prchases will be a fll 10% of all retail sales by This is de both to increasing se of mobile devices and retailers willingness to invest in omni-channel distribtion centers consolidating mltiple facilities sed to address three different sales channels (retail stores, resellers, and individal cstomers) into one location. Urbanization: Today approximately 28% of the India's poplation lives in cities, challenging crrent last-mile distribtion operations to develop new methods for goods delivery. Mobile and wearable technology: Nearly 60% of Indians will be owning and sing a smart phone to shop and track prchases (as compared to present 17% owners of smart phone). The embedded global positioning system (GPS) capability in the devices cold be leveraged to enhance deliveries. The Government of India is promoting Digital India and recent move of demonetization is the indication for ftre transaction method. Robotics and atomation: Atonomos control, driverless vehicles, and wearable compting integrating these into coordinated systems will prodce for revoltionary change in the indstry by removing the potential for hman error or performing tedios or dangeros tasks hmans don't want to do. Sensors and the Internet of Things: The proliferation of embedded sensors that commnicate in real-time via the Internet withot hman intervention spports the Internet of Things. Among the opportnities: sensors in manfactring cold warn of problems and offer instrctions for corrective action; packages and transport containers cold be continosly tracked via GPS for optimized roting and delivery. Big Data: Managing and leveraging the massive amonts of information companies collect and store abot operations, sales, and cstomers reqires advanced compting power to analyze and visalize the data. Organizations no longer have to look back to reconstrct what happened; they can apply sophisticated algorithms that perform predictive analytics to anticipate and prepare for ftre scenarios, thereby mitigating risk. Workforce: The spply chain has an image problem. Althogh warehoses of the past no longer resemble those of today, as baby boomers retire the indstry is challenged to attract, train, and keep an adeqate workforce. Projections anticipate more than 270,000 new jobs will be created annally in the field over the next five years, meaning the indstry mst find 18

21 new ways to appeal to a very different workforce: women, veterans, people nder the age of 35, and differently-abled persons. Sstainability: Societal pressre for corporate responsibility dictates that the indstry mst address the environmental impact of spply chain operations in order to mitigate its effect on local wildlife, solid waste generation, and pollting emissions. Total spply chain visibility: Thanks to GPS, the Internet of Things, and Big Data, precise location services will make all shipments trackable in real-time by sppliers, manfactrers, shippers, and receivers from the instant of order to the instant of delivery. Collaboration: Existing technologies can significantly redce the inherent cost associated with spply chains by leveraging the data held by each party. To trly reap the benefits, however, trading partners will have to establish trst in order to collaborate. For example, competitors might share trailers to eliminate empty trck miles, thereby redcing transportation costs. Companies mst formlate a strategic plan that incldes core competencies and ftre bsiness objectives, and is in step with the cstomer and the changing marketplace. It is right time for every spply chain professional to get eqipped with indstry resorces and best-in-class eqipment and systems to help deliver on the promise of spply chain efficiency, costs savings and speed to market that cstomers are demanding and going to demand soon. In a transforming world of Spply Chain Management, it is essential to take a peek into the ftre, and ensre that present bsiness practices are designed to cope with sbseqent ncertainties. Today s best practices will be tightly integrated in the ftre leveraging advanced modeling tools The next generation spply chain will bild on today s best practices by : More tightly integrating them. Utilizing advanced modeling tools and techniqes. Moving to clod based platforms Creating centers of excellence (CoE) to champion change management and best practices and lead tiger teams. The next generation of spply chain risk management will evolve to : Deploy advanced qantitative analysis now widely sed in global banking Address intellectal property and patent isses arising from otsorcing to emerging markets and the collective natre of innovation. Today s best practices The leading spply chain operations of today typically employ a majority of the following best practices : Centers of Excellence (CoE) Hybrid Spply Chain organizations Segmentation Big Data Analytics Hybrid Otsorcing Spply Chain Risk Management Cost to Serve (CtoS) Spply Chain Network Design Big Data Analysis and Analytics Demand Driven Spply Chain Mobile Spply Chain Labor Arbitrage Otsorcing 19

22 By 2025: Spply Chains will learn as we sleep Driverless vehicles will redefine trcking 15% of companies will make the digital pivot B2B Atomation will happen throgh a network of networks Otside-in processes will become the norm Spply Chain 2025 Trends & Implications for India India is likely to be a global economic power hose by As the economy grows and the operating environment evolves, several macro trends will shape the ftre spply chain design. It is critical to nderstand these trends By 2025, the Indian economy will have grown mlti-fold and consmers will have become mch more heterogeneos, presenting organizations with a niqe set of opportnities and challenges. The spply chain will be impacted by varios evolving macro-factors. The following six trends will have the most impact on the ftre of the spply chain in India : More mega cities : A growing poplation and rbanization will lead to several cities becoming mega demand centers. Increased congestion and space constraints will reqire organizations to create a different spply chain model to serve these cities. Going vertical, common carrier deliveries, se of electric vehicles, and flexible nloading are some levers to consider in designing spply chains for these cities. Proliferation of segments : Increasing consmer segments, the emergence of new channels, and a greater nmber of prodcts will lead to mltiple new segments being created. Organizations will need to cstomize activities across their spply chain to be able to deal with different segments (moving away from the one size fits all approach that is prevalent today). Improved spply chain infrastrctre : With planned investments in road, rail, and ports, the spply chain is expected to become faster and more connected across all modes. This will drive a larger scale and a more consolidated spply chain. Better reglatory climate : Reglatory changes are expected bt the timing will contine to remain ncertain.gst, fiscal incentives, and sstainability and activism are some of the factors that are likely to change. Scenario-based planning will help in preparedness. Increased globalization : India will become more connected globally with higher imports and exports and an increase in share of global trade. More organizations will have a regional manfactring footprint. Managing risk, traceability, compliance, and responsiveness will be critical to sccess. Affordable technologies and Big Data : Decreasing technology costs will make available a larger amont of data on spply chains. Organizations will need to bild capability to leverage this data and create analytical capabilities to benefit from this. While there will be changes by 2025, some aspects will remain as they are today; volatility in spply and demand will contine making risk management critical. Bsiness pressre to deliver more with less will contine driving the spply chains to frther increase efficiency and balance cstomization with consolidation. Skill gaps in talent will contine to drive organizations towards selective atomation, a focs on skill development, and improved work environment. Preparing for the ftre will reqire organizations to embed scenario-based planning and bdgeting for small investments to pilot and learn new capabilities. 20

23 Indstry 4.0 Strategy + bsiness PACHAMUTHU SENGOTTAIYAN General Manager (Materials), DISA India, Exective Committee Member, IIMM Bangalore Branch Indstrial revoltions are momentos events. By most reckonings, there have been only three. The first was triggered in the 1700s by the commercial steam engine and the mechanical loom. The harnessing of electricity and mass prodction sparked the second, arond the start of the 20th centry. The compter set the third in motion after World War II It might seem too soon to proclaim that the forth indstrial revoltion, sprred by interconnected digital technology, has begn. When robotics, 3D printing, data analytics, the Internet of Things, and digital fabrication are joined together, they integrate the physical and virtal worlds. When yo look closely at the rapid pace of digitization in indstry today, the name doesn t seem hyperbolic at all. It is a signal of sweeping change that is rapidly transforming many companies and may catch others by srprise. The term Indstry 4.0 refers to the combination of several major innovations in digital technology, all coming to matrity right now, all poised to transform the energy and manfactring sectors. These technologies inclde advanced robotics and artificial intelligence; sophisticated sensors; clod compting; the Internet of Things; data captre and analytics; digital fabrication (inclding 3D printing); software-as-a-service and other new marketing models; smartphones and other mobile devices; platforms that se algorithms to direct motor vehicles (inclding navigation tools, ride-sharing apps, delivery and ride services, and atonomos vehicles); and the embedding of all these elements in an interoperable global vale chain, shared by many companies from many contries. This technological infrastrctre is still in its early stages of development. Bt it is already transforming manfactring. Companies that embrace Indstry 4.0 are beginning to track everything they prodce from cradle to grave, sending ot pgrades for complex prodcts after they are sold (in the same way that software has come to be pdated). These companies are learning mass cstomization: the ability to make prodcts in batches of one as inexpensively as they cold make a mass-prodced prodct in the 20th centry, while flly tailoring the prodct to the specifications of the prchaser. As the movement develops, these trends will accelerate. So will the invention of new prodcts and services, inclding new ways of tackling today s most difficlt problems: climate change and polltion, energy demand, the pressres of rbanization, and the problems that accompany aging poplations. A srvey in More than 2,000 companies from 26 contries in the indstrial prodction sectors, inclding aerospace and defense; atomotive; chemicals; electronics; engineering and constrction; forest prodcts, paper, and packaging; indstrial manfactring; metals; and transportation and logistics. In this global Indstry 4.0 srvey, one-third of the respondents said their company had already achieved advanced levels of integration and digitization, and 72 percent expected to reach that point by 2020 This momentm reflects expectations of rapid payoffs in bsiness reslts. An overwhelming majority (86 percent) of the srvey respondents said that on the basis of their experience to date, they expected to see both cost redctions and revene gains from their advanced digitization efforts. Nearly a qarter expected those improvements, in both cost savings and revenes, to exceed 20 percent over the next five years. 21

24 In the srvey the below qestion was asked and the srvey reslt was recorded as below in Exhibit 1. Indstry 4.0 As the forth indstrial revoltion binds companies and contries ever more tightly together throgh worldwide spply chains and sensor networks, it will increasingly promote globalization. At the same time, it will link closely to local companies. That helps explain why the srvey reslts differed considerably by region. Asian companies, especially those based in Japan and China, expected the greatest gains from the digitization of Indstry 4.0, followed by companies in the Americas, and then Erope and the Middle East. Japanese companies are already the most advanced in this field, followed by those based in the U.S. and then Erope. Companies in all regions expect to catch p within five years (see Exhibit 2). Indstry

25 5S & 3T the secret of sccess of Japanese companies RAHUL BRAHMA, Indian Air Force, Life Member, IIMM Bangalore Branch It s a mindset & commitment to achieve a totally waste-free operation that s focsed on yor cstomer s sccess achieved by simplifying and continosly improving all processes. METHODOLOGY OF 5S 1. SEIRI (organisation/sort ot) Decide what yo need. Remove nnecessary cltter. All tools, materials, classified and then stored. Remove items which are broken, nsable or only occasionally sed. 2. SEITON (Orderliness / Systemize) Once yo have eliminated all the nneeded items. Now trn to the left over items. Organise layot of tools and eqipment. Designated locations. Use tapes and labels. Ensre everything is available as it is needed and at the point of se. Workplace Checkpoints: Positions of aisles and storage places clearly marked? Tools classified and stored by freqency of se? Pallets stacked correctly? Is safety eqipment easily accessible? Is floor in good condition? 3. SEISO (Cleaning/Shining) Create a spotless workplace Identify and eliminate cases of dirt and grime remove the need to clean Sweep, dst, polish and paint. Divide areas into zones Define responsibilities for cleaning Tools and eqipment mst be owned by an individal Focs on removing the need to clean 23

26 4. 5. SEIKETSU (Standardize) Generate a maintenance system for the first three. Develop procedres, schedles, practices. Contine to assess the se and disposal of items. Reglarly adit sing checklists and measres of hosekeeping. Real challenge is to keep it clean. Make everyone nderstood that it is driving force behind all 5S. Make it a way of life a part of health and safety program. Involve the whole workforce. SHITSUKE ("Sstain") Monitor the refine the methods consistently. Maintain the defined methods for continos improvement. Establish norms and follow them. Keep repeating the 1 to 4 S. METHODOLOGY OF 3T 1. TIE (Where to pt) : Decide the location where to pt something at or workplace. 2. TIE HIN (What to pt) : Decide what item needs to pt. 3. TIE RIYO (How mch to pt) : Decide how many qantities of items we need to pt there. WHAT U HAVE COME ACROSS AT THE END OF DAY Neat & Clean Workplace Smooth Working No Obstrction Safety Increases Prodctivity Improves Qality Improves Wastage Decrease Machine Maintenance Visal Control System Employees Motivated Workstations Become Spacios ONE MUST LOCATE THE ITEM WITH IN 30 SECOND IF 5S & 3T IS PROPERLY IMPLEMENTED 24

27 RECAP-EVENTS 8th Janary SCALE 2016 Get-together Meeting As a memorable occasion of the grand sccess of SCALE 2016 a Get-Together meeting was organized on 8th Janary 2017 (Snday) at Best Clb by IIMM Bangalore Branch. Mr. M.S. Shankar Narayanan, Branch Chairman, IIMM Bangalore, invited all EC and SCALE 2016 Committee members and their sposes for the Get together meeting.he expressed his thanks to the all members for spporting dring SCALE Mr.Sbbakrishna has felicitated all members who have attended get together meeting thJanary 2017 Two Days Workshop Two Days workshop on Vendor Management and Negotiation Skills held on 19th and 20th Janary 2017 at Royal Orchid Central, Bangalore. The main focsed areas on Spply Strategy and Spplier Relationship, Vendor Development, Importance of Spplier qality in vendor selections / Management handled by Mr. C. Sbbakrishna, Former National President,Mr. D. Sbramani, VP (Soth) and Sr Faclty of IIMMMr. H.R.T. Chari,Mr. P.L. Mohan. The workshop was very interesting with lively interactions by participants with the Speakers. 27th Janary, 2017 Lectre Program IIMM, Bangalore Branch organised Monthly Lectre Program on Impact of GST on varios Sectors" for the benefit of IIMM Members & Stdents. Presentation given by Mr. Venkat Ramesh, Hawe Hydralics Pvt. Ltd. Bangalore and Mr. Akash Kmar Gpta, ISRO Bangalore. They have given their presentation on isses of present taxation, cascading effect, Cstoms dty on Import, GST on import, talked on GST ECO System, Scope of GST and detailed presentation given how get set ready for Registration etc.the lectre program was very interesting with lively interaction by members, participated in good nmbers. After the lectre presentation award certification program was organised for Stdents who have sccessflly completed in Six Months Certificate Corse on Spply Chain, Logistics and Materials Management Corses. Mr. C.L. Kapoor, Past National President and Branch Advisor and Mr. M.S. Shankar Narayanan, Branch Chairman awarded certificates to the sccessfl candidates. The entire program was very well co-ordinated by Mr. S. Sbhash, as a MC th Febrary, 2017 Two Days Workshop Two Days workshop on Emerging Technologies in SCM and Materials Management held on 16th and 17th Febrary 2017 atroyal Orchid Central, Bangalore. The main focsed areas on Technology Overview in SCM, Lean Spply Chain Management, Cstomer Centric Spply Chains of Onewith profitability, 3D Printing /Additive Manfactring, Digitization of everything and Internet of everything data science andmath hoses, Software/Strategy driven vale chains, adaptive learning software / machine learning, ERP soltion for ware hose and logistics management. Mr.Prthvi Kashik, Director E-Fleet Management Services and Mr. Jagadish G. Vasishta, Director, Data wood Conslting Pvt. Ltd.Session on Innovative in Spply Chain Management handled by Mr. P. Srinivas Rao, Sr. Faclty of IIMM. The workshop was very interesting with lively interactions by participants with the Speakers. 17th Febrary, 2017 Evening Lectre program IIMM Bangalore Branch was organized evening Lectre Program on SCM/LOGISTICS -STRATEGIES IN SHIPPING" for the benefitof IIMM Members & Stdents.By V Krishnan (IIT-B,MMS, JBIMS), IIT MBA retired Managing Director of a pblic limited consltancy organization,havingrich experience spanning over 30 years in repted companies like Great Eastern Shipping, L&T,DEMPOs and Chrch gatenigeria. Mr. D. Lakshmaiah, Honorary Treasrer, welcomed the speaker and gathering. Program was wellappreciated by the members attended in good crowd. 9th March One Day in hose Training Program: Indian Institte of Materials Management, Bangalore Branch condcted one day in hose training on Best Practices in E25

28 Procrement for exectives of Ariba Technologies Ltd.at their vene. This program proved to be very informative and sefl tothe participants of Ariba Technologies in their day today procrement activities as it dealt with risks involved in varios stage inprocrement process they wanted to bring it fort for the finding soltions on it.the ITP was very interesting with lively interactions by participants with the Faclty. Received very good feed-back from theparticipants 10th March 2017 Evening Lectre program: Indian Institte of Materials Management, Bangalore was organized Monthly Lectre Program on GST Implementation the way to forward " by Mr. H.R. Gowri Shankar, Advocate and Tax Consltant, for the benefit of IIMM Members & Stdents on10th March 2017 at Woodlands Hotel, Bangalore. He highlighted isses pertaining to the present taxation system and its cascading effects. Other concepts like Entry tax oncertain notified goods into local areas, as per the applicable tax in the respective States were also shared.program was well appreciated by the members and the speakerresponded to the qestions proposed from the gathered adience. 6th April One Day in-hose Training Program IIMM, Bangalore Branch condcted one day in hose training session on ContractManagement & Spplier Relationship for exectives of Thomson Reters, Bangalore. This program was very informativeand sefl to the participants of Thomson Reters in their day-to-day procrement activities of varios stages in relation to thetheme. Dr. C Sbbakrishna (MLS Trainer) / Former National President handled the sessions. He covered the contents on PreparingContracts, Spot Contracts / Fixed Contracts, Transfer of Risk Inco terms, Introdction to forming contract management plan,relationship Management Disptes and termination, Contract administration Measring and controlling performance, issesrelated to contract administration in global trade etc., He also presented some case stdies on the above topic. The ITP was veryinteresting with live interactions by participants with the faclty. Feedback received has been very good. 8th April, 2017 Stdy Circle Meeting and Debate Competition As part of MM Day activities, IIMM Bangalore Branch organized a Stdy Circle program on Plastic Packaging, a vital Component of SCM Is it a boon or bane in the crrent marketing scenario and Life Style. Dr. H.B.N. Mrthy, distingished Member and Sr. Faclty, Mr. P. Srinivas Rao, Consltant and Sr. Faclty were the speakers for the stdy circle meeting. Dr. H.B.N. Mrthy, Packaging Consltant and speaker in his address with participants, mentioned that Packaging Materials, especially Plastic Materials, have become an integral part of or lifestyle. At the same time, disposal of these items once their tility is over has become a major isse. We are aware that improper or senseless disposal is threat to the environment. It is indeed a tightrope walk! He gave lot of examples and discssed some case stdies. He also exhibited lot of packaging materials which was sing and recycling in crrent scenario. Mr. P. Srinivas Rao, Sr. Faclty IIMM discssed that how packaging has evolved over the year and the major role played by Plastic Materials in the crrent Marketing Scenario and Life Style. He presented and explained types of plastic articles, their characteristics and qality, sed etc. 12th April One Day in-hose Training Program Indian Institte of Materials Management, Bangalore Branch condcted a one-day in-hose training on Best Practices ineprocrement for exectives of Ariba Technologies Ltd. Training were held on nderstanding eprocrement and become familiar with the tools, assess its needs of an organization,developing e-procrement strategy, select right soltions, implement an initiative and its relevant definition, how e-procrementis evolved to the present day, main phases in the evoltion of eprocrement strategy, Role and importance of e-procrement as astrategy in spply chain management. How e-procrement differs from manal procrement, key performance benefits that accre from e-procrement, main tools sed for e-procrement and relative merits of different tools, set objectives fore-procrement strategy, determining whether to otsorce or develop in-hose, develop performance measres and identifyinglikely impact of eprocrement of prchase department. He also discssed some case stdies in this regards. 19th April 2017 Evening Lectre program : Indian Institte of Materials Management, Bangalore was organized Monthly Lectre Program on Ftre air Cargo Spply Chain in India" by Mr. Vinay Varma Bangalore International Airport, for the benefit of IIMM Members & Stdents on 19th April 2017 at Woodlands Hotel, Bangalore. He highlighted isses pertaining to the present development in the field of air-cargo and ftre opportnities. Program was well appreciated by the members and the speaker responded to the qestions proposed from the gathered adience. 26

29 Prize Winners : Debate Competition: Sl.No Organisation Name of the Participant Prize 1 Mr. Anant Ram IIMM Member I Prize 2 Gerald Pal D'soza KAPL II Prize Mr Srinivas V. Rao, Branch Vice Chairman proposed vote of thanks. Feed back from this program has been received and program was very mch appreciated by the members peresent Essay Competition: As a part of MM Day celebrations, an Essay competition was held on Essay articles were reviewed by Mr. Srinivas V. Rao Branch Vice Chairman. the theme for Essay Competition was "SCM role in GST Implementation& India digitization". Prize winners for Essay Competition: Sl.No Organisation Name of the Participant Prize 1 John A. Gonsalvez KIOCL Ltd. I Prize 2 Mr. Sresh B.N. ADA II Prize MM Day Celebration 2017 Best Materials / Spply Chain Manager Contest: As a part of MM Day Best Materials / Spply Chain Manager contest was organized by IIMM Bangalore Branch, on the topic "SCM role in GST Implementation& India digitization" on at IIMM Office Premises. Mr. Shankar Narayanan, Branch Chairman, Mr. Srinivas V. Rao, Branch Vice Chairman, Mr. G.S. Raj, Faclty and E.C. Member and Mr. P. Viswanathan, EC Members were the Jdges. Sl.No Organisation Name of the Participant Mr. Sresh B.N. ADA Mr. Kmar Velan MB. ADA Mr. Vikas Kmar Siemens India Ltd. Mr. Rajesh C.S. Siemens India Ltd. Mr. Akash Kmar Gpta ISRO Mrs. Kalpana N C-DOT Prize I Prize II Prize III Prize MM Day Celebration 2017 Matqiz Competition : As part of MM Day celebration, a Qiz Competition was also organized on for Stdents and Members of or Branch. Mr. Srinivas V. Rao, Vice Chairman, compiled Q & A and was the Qiz Master. Mr. M.S. Shankar Narayanan, Branch Chairman and Mr. G.S. Raj Faclty and EC were the Jdges /Jry for Contest. E. C. Members M/s. Achytha Rao, Mahesh Klkarni, Mr. Akash Kmar Gpta, Mr. P. Viswanathan and Mr. S. Sbhash, coordinated the programs. Prize Winners : Qiz Competition: Sl.No 1 2 Organisation Name of the Participant Mr. Pinaki Sarkar Hemogenomics Pvt.Ltd. Mrs. Uma Maheshwari S. GSD Rail Wheel Factory Ms. Srashmita P. Mercedes Benz R& D Mr. Chinmaya Hota Philips Prize I Prize II Prize : One day Workshop on Managing Inventory As a part of MM Day activity, a one day workshop on "Managing Inventory" was also condcted on 18th Apr 2017 at Hotel Akshay Ara, Bangalore. Sr. faclty Dr. C. Sbbakrishana, handled the session covering varios topics on place of Inventory in SCM, Ware Hose and Inventory Operations, Inventory Planning, Managing Spply Chain for Effective Inventory Management. Mr. K.S Mohan Kmar, Sr. Faclty handled sessions on Demand Forecasting, Techniqes, Inventory Models CPFR, VMI and Role of IT in Inventory Management etc. Case stdies were also discssed in the workshop. Participants who have participated from varios organization appreciated the program and gave good feed back. 27

30 BRANCH ACTIVITIES A Grop photo - of Participants for Two Days workshop on Emerging Technlogies on A view of members presented on Lectre Program Mr. D.Lakshmaiah, Hon. Treasrer welcoming gathering on Lectre Program Mr. K.V. Sdhindra, Hon. Secretary proposing vote of Mr. M.S Shankar Narayanan, Awarding certificates to the thanks on Lectre Program Candidate Mr. Srinivas Mrhty Mr. M.S. Shankar Narayanan, Branch Chairman welcoming Speaker Mr. V. Krishnan with Boqet Mr. P.M. Biddappa, N.C. Member hand overing Mr. P.L. Mohan, Sr. Faclty handling session on Mr. S. Sbhash, MC welcoming gathering presentation memento to Mr. V. Krishnan, Speaker for Lectre Program workshop on Emerging Technologies GST on on Appeal 1) Writers are reqested to send their article to iimmbg@airtelmail.in / akashforce@gmail.com Mr. Srinivas V. Rao, Vice Chairman, introdcing speaker - lectre on On the dias Mr. M.S. Shankar Narayanan, Branch Chairman with YMM participated Team on MATEMANEWS Advertisement Tariff Cover Page Inside / Backside Rs. 20,000/- Fll Page Rs. 10,000/- Half Page Rs. 5,000/- Filler Page Rs. 2,500/28 2) Members are reqested to send s their latest id, official and commnication address to pdate or membership data base rgently. 3). All Commnication are being sent by mail id only, Please send information to iimmbg@airtelmail.in

31 MM DAY CELEBRATION 2017

32 What I wold like to do is to leave behind a sstainable entity of a set of companies that operate in an exemplary manner in terms of ethics, vales and contine what or ancestors left behind. - Ratan Tata Indian Institte of Materials Management 303, 'A' Wing, Mittal Tower, MG Road, Bangalore, India Telephone : /52 Fax : Website: /