GLOBAL LOGISTICS MANAGEMENT: THE CASE OF ABC CEMENT

Transcription

1 1 GLOBAL LOGISTICS MANAGEMENT: THE CASE OF ABC CEMENT ABC CEMENT is a French multinational and global leader in Cement in building material with a strong presence in the eastern part of India As a part of our brown field expansion at Jamshedpur, we had ordered the Vertical Cement grinding mill with Loesche, Germany. Rotary components such as drive gearbox, grinding rollers & table were manufactured at Hamburg, Germany. (Volume 625 cum & Net weight 417 tons) Static components such as Mill stand, base plate were made at Shanghai, China (Volume 433 cum & Net weight 150 tons) Some components such as separator fixed plate etc., were outsourced by Loesche in Chennai, India. The task at hand was to transport the material safely from Loesche s works at Shanghai and Hamburg to Jamshedpur, India. The miscellaneous consignment from Chennai was much simpler and therefore handled by us through a local transporter. When we analyzed the modality of shipping the consignment to India, we realized that we did not have much expertise / know how on the following Import formalities and documentation In depth knowledge of the countries involved. Knowledge of the carriers and routes Risks involved Consignment tracking and monitoring Q. < WHAT COULD ABC CEMENT INDIA DO? >

2 2 Therefore, we decided to engage a Third party logistic service provider who meets the following requirements Presence in Germany, China & India Knowledge / Expertise on import formalities, routes, carriers, territories, infrastructure limitation, appropriate material handling techniques and machinery Credible past record & experience in handling similar consignment Resources and infrastructure to handle a job of this nature. Has the IT capability to track the consignment on a continuous basis using GPS technology. After evaluating various options, we finalized on M/s. Kuehne + Nagel, who are based out of Germany and having global presence in Americas, Europe, Asia pacific, Middle east and Africa. Q. HOW WOULD ABC CEMENT INDIA PVT LTD. EVALUATE THE PERFORMANCE OF M/s. Kuehne + Nagel?

3 3 Following were the key challenges faced in the task. Performance of the Third party logistic provider was evaluated based on the same. Safety of consignment (Accidents / damages etc.,) Security of consignment (pilferages, loss of document etc.,) Timely shipment to Jamshedpur site. Cross border legal issues Re packing / correction if reqd Continuous monitoring / tracking Coordination and net working with multiple agencies Equipment manufacturer and their transporter, third party quality inspectors, Customs, Carriers, In land transporters. In land transportation Easiest and safest route, infrastructure limitations (Bridges / rail line crossing / narrow roads, Congested and thickly populated areas en route Manage environmental issues & liaison with customs, railways, villagers, highway authorities, local administration en route, police etc., Allocation of responsibility at various stages Execution of the activity at minimum cost Q. WHAT IS ROUTING PLAN OF ABC CEMENT INDIA PVT LTD.?

4 4 Q. WHAT SEA ROUTE THE CARGO WOULD FOLLOW?

5 5 GLOBAL SEA ROUTES (ROUTE DESCRIPTION AT ANNEXURE)

6 6 SEA ROUTE FROM HAMBURG TO MUMBAI PORT SEA ROUTE FROM SHANGHAI TO MUMBAI PORT

7 7 Q. IS THIS THE BEST ROUTING? WHAT ARE FACTORS FOR CHOOSING A PORT? INLAND TRANSPORTATION ROUTE FROM MUMBAI TO JAMSHEDPUR Figure: In land transportation route (Mumbai Port Thane Nasik Dhule Bandara RajnandGaon Bhilai Raipur Raigardh Gumla Ranchi Jamshedpur Jojobera Cement Plant) Q. CAN THERE BE ALTERNATE MODE OF TRANSPORT

8 8 Break Bulk Import cargo operation and documentation flow (India) KUEHNE + NAGEL Projects 2010 Process Steps Customs Process Logistics Service Provider Sea Freight project & Import Department Importer Prealert Prealert received from Origin office.notice of shipment sent to Consignee. M Filing and B/E processing Based on the documents submitted by the carrier's the customs approves the IGM Copies of Master B/L,House B/L.Invoice and Packing List sent to carrier for filing of IGM.Carrier files the IGM with customs prior arrival of shipment at port The consignee forwards the invoice and pac to K+ N for filing of Bill of Entry with custom shipment is under some special licence it i handed over to K+N. Customs checks the Bill of Entry advises discrpancy,if any. K+N files prior Bill Of entry and arranges to send check list to cnee for confirmation about duty amount.after confirmation from cnee KN arrnange for assessment of Bill Of Entry with customs. Arrival of shipment at destination. Shipment arrives at destination and consignee is sent arrival notice.delivery Order is picked up from carrier after paying all charges and surrendering of the Carrier B/L Consignee surrenders the duly endorsed House B/l.

9 9 Physical examination of cargo by Customs.Duty figure is confirmed after completion of K+N takes permission from customs to open pkgs for physical examination of the cargo in port. Delivery of cargo Once duty is paid the Bill of Entry is endorsed by customs and cargo is released.. K+N picks the Demand Draft for the duty from the consignee and pays same to customs. Consignee arranges for customs duty payable by Demand Draft once K+N confirms the duty figure. K+N pays the port dues if any and gets the gate pass from port Authorities.K+N arranges trucking for delivery cargo to consignee premises. Cargo received by consignee's at their premises K+N raises invoice on the consignee for the services as per agreement and sends same to consginee for payment. Consignee's arrange for payment of charges as per K+N invoice. Upon receipt of all charges from the consignee's K+N arranges to send the Original Bill Of Entry to the consignee's as this is required by them for disbursement of foreign exchange Upon receipt of Original Bill of En from K+N the consignee's procee complete their disbursement of foreign exchange.

10 10 CHOICE OF CARRIER Figure: In land transport carrier and unloading plan

11 11 CONSIGNMENT TRACKING Figure: Web based dashboard for vessel tracking Web based dashboard for cargo tracking Inland

12 12 Sample -ABC- CEMENT India Pvt.Ltd - Cargo Tracker Sheet 2nd Lot - Antwerp port to Mumbai port - Total 45 Packages Sr.No. Actual date of arrival (At Port) Package No. LR NO. Vehicle numbers Type of Vehicle State Vehicle Position Place Total Distance from Mumbai port to Site (Kms) Distance covered from Port (Kms) RJ01GA Wheelers - Low bed volvo Maharashtra BHUSAWAL 2050 kms (Appx) 600 Kms ,3, CG04JA Semi Low bed Maharashtra Raipur 2050 kms (Appx) 1150 Kms , MH-06 AQ-2397 Low bed Maharashtra MP- MH Border 2050 kms (Appx) 1050Kms MH 43U-566 Hydrolic Exel Maharashtra Aurangabad 2050 kms (Appx) 450 Kms ,35, NL-01D-2629 Semi Low bed Maharashtra Pathalgaon 2050 kms (Appx) 1400Kms ,11,40, NL-01D-1039 Semi Low bed Maharashtra Pathalgaon 2050 kms (Appx) 1400 Kms ,28,12, NL-01D-2669 Semi Low bed Maharashtra Pathalgaon 2050 kms (Appx) 1400 Kms , RJ-06G-5247 Low bed Maharashtra AKOLA 2050 kms (Appx) 700Kms ,6,20, MH-06AQ-320 Semi Low bed Maharashtra Raigarh 2050 kms (Appx) 1300 Kms ,23,22,19, PB-06G-6664 Semi Low bed - 3 Exel Maharashtra Raipur 2050 kms (Appx) 1150 Kms ,24,21,18, CG-04JB Semi Low bed - 3 Exel Maharashtra Raipur 2050 kms (Appx) 1150 Kms ,32,14,16, MH-06K-3520 Semi Low bed Maharashtra Bhandara 2050 kms (Appx) 950 Kms ,35,38,41,43,45SP CG/04/JA/4621 Semi Low bed Maharashtra Amravati 2050 kms (Appx) 700 Kms Q. What else could be the MIS STRUCTURE for ABC CEMENT PVT. LTD.

13 13 ANNEXURE Circum Equatorial Route. With the expansion of the Panama Canal expected to come online in 2014, a relative parity will exist for the first time between the Panama and Suez canals. In such a setting, maritime shipping companies may elect to establish circum equatorial routes in both directions with the usage of high capacity (8,000 to 12,000 TEU) containerships. This high frequency "conveyor belt" could support a significant share of global east-west freight movements in a cost effective way. This does not imply a homogeneous service as several different configurations of ports of call are possible along this route, particularly if a 300 nautical miles deviation is considered. This enables different circum equatorial network configurations. North-South Pendulum Connectors. These connectors reflect existing commercial relations, namely for raw materials (oil, minerals, agricultural goods), such as South America / North America, Africa / Europe or Australia / Asia. For container shipping, they are mostly based on the rationale that there is not enough volume to support transoceanic services, so cargo is collected / delivered along a latitudinal sequence of ports. This conventional network will be expanded with transshipment Opportunities with the circum equatorial route. Transoceanic Pendulum Connectors. Connect through pendulum services selected ports of the facades of large oceanic masses. The three main transoceanic connectors are transpacific, Asia-Europe (through the Indian Ocean) and transatlantic. The industrialization of Asia (China in particular) has made the Asia - Europe and the transpacific connectors particularly important. Growth within the BRIC countries (Brazil, India and China) favors the emergence of a new connector in the Southern Hemisphere between the east coast of South America, the Cape of Good Hope and to Southeast Asia. Transshipment Markets. They connect regional port systems to transoceanic and circum equatorial routes, mainly through hub-and-spoke services. The relay function between long distance shipping services performed by those markets is also significant. The most important are Southeast Asia, the Mediterranean and the Caribbean. They are referred as markets because the transshipment function can be substituted to another port. Therefore, a group of ports in a transshipment market are "bidding" for port calls as this type of traffic is difficult to anchor. The development of circum equatorial routes is thus likely to expand the opportunities of transshipment, including interlining between these routes.