DMICDC s Logistics Data Bank Project. DMICDC Logistics Data Services Limited

Transcription

1 DMICDC s Logistics Data Bank Project DMICDC Logistics Data Services Limited

2 Table of contents 1. Introduction 2. Outline of the project 3. Operations-Existing Scenario 4. Project Benefits

3 1. Introduction

4 DMICDC -Introduction India's ambitious USD 90 billion DMIC project -creating a mega industrial infrastructure along the Delhi-Mumbai Rail Freight Corridor(DFC). Conceptualized in partnership and collaboration with Government of Japan. Japan is giving financial and technical aid for the project, which will cover seven states, totaling 1,483 km. DMICDC Logistics Data Bank -Introduction One of the key projects featured in Indo Japan Global partnership Summit- DMICDC Logistics Data Bank Project is a high visibility project monitored thru PMO. Project featured in the joint statement issued by the Hon ble PM s of India & Japan during Japanese PM visit to India in December 2015.

5 DMICDC Logistics Data Bank -Introduction The program has been conceptualized in partnership and collaboration with Government of Japan. METI Initiated a Smart Community Pre- Feasibility Study in the Brown Field Areas of DMIC region to introduce Cutting-Edge Advance Technology. DMIC Development Corporation Limited has entered a MOU with Toshiba Consortium (of which NEC Corporation was a part of.) FY 2012 Approval & Clearances Project Implementation FY 2013-FY2014 FY 2015 FY Detailed Planning and Study NEC conducted extensive study in the Indian market and through the support of DMICDC met various stakeholders in India. (Min of Shipping, Railways, DGFT, Customs, JNPT, TAMP etc). NEC based on its extensive experience in Feasibility Study Logistics solutions, conceptualized the Logistics Data Bank project to streamline the logistics scenario in India. DMIC Trust Approved the Project in March 2013 to be implemented through a 50:50 SPV between DMIC Trust and NEC Corporation.

6 2. Outline of the project

7 Logistics conditions and container cargo trends in India Container cargo in India is growing rapidly. However, the transportation is mainly concentrated on road transport which is higher in cost. This leads to significant impact on transportation cost being high. Projected Volume of EXIM Traffic at Western Ports Million TEUs Container cargo will increase explosively Source: Final Plan Report - Perspective Plan for DMIC Region Air 5% Water 4% Rail 17% Transportation mode (FY2009) Others 6% Transportation cost is low Delays happen often Many shippers are reluctant to use it % higher in cost / Lead time is easy to predict Many shippers are impelled to use it Road 68% Source:JETRO 2011 It is important to promote rail transport, which has advantage of Mass transportation. Well balanced truck and rail ratio can substantially reduce transportation cost.

8 Logistics challenges Report from Task Force on Transaction Cost in Exports - Export to GDP ratio, is presently about 16%. Developing countries like Thailand (66%), China (35%), South Africa (27%) and Mexico (26%) are far ahead of us on this account. Average Time to export On an average 17 days to export a container from India and costs US$ 945 per container. Compared to global standard India s average lead time is much higher and leads to higher transaction cost. Source: Doing Business 2010 Report: World Bank

9 Logistics challenges Report from Task Force on Transaction Cost in Exports - Higher transaction cost in logistics is one of the major issues for India. MoC is concerned about international competitiveness. Average cost to export Indian cost to export is double as compared to Malaysia, Singapore, China etc. Source:2011 Ministry of Commerce and Industry TaskForce on Transaction Cost in Exports A Report There is urgent need for reduction in logistics costs in order to increase the international competitiveness and to promote the expansion of export.

10 Challenges in Transportation Existing Transportation Challenges Longer lead time Transportation delays Unknown whereabouts Causes of the problems More connection points for end-to-end transportation service Not sharing the container information by stakeholders to streamline operation Rail transport flow chart Shipping line Port Terminal operator Truck transport flow chart Rail / DFC ICD Truck Consignee Shipping line Port Terminal operator Truck Consignee A strong IT solution is indispensable for increasing efficiency in the overall supply chain.

11 Solution It is important to develop an effective IT solution, along with physical infrastructure. Physical infrastructure ~DMICDC / DFC / National Highways / State Highways~ Strengthen the rail transport capacity Eliminate many glitches/bottlenecks of road transport Soft infrastructure The visualization of container movement can redesign, streamline and optimize the process of the overall supply chain Maximize advantage of rail and road transport DMICDC s Logistics Data Bank

12 DMICDC Logistics Data Bank Logistics Data Bank is a solution that shares the container tracking information among all the companies in the supply chain. It is aimed at reducing transportation lead time and cost. Integrate the existing IT systems of the stake holders and provide end-to-end tracking information with single window Logistics Data Bank Shipping line Port terminal operator Owner of Rail infrastructure Container Train Operator Customs agent ICD Truck operator Shipper/ Consignee CNT sys PCS/ Port sys FOIS/ Tracking sys Tracking sys ICE GATE Logistics sys Trucking sys Production management sys Biz apps sys Biz apps sys Biz apps sys Port CNTR Rail CNTR CNTR ICD Biz apps sys

13 LDB Value Chain LDB changes simple vertical data into horizontal valuable information of supply chain. Key success factor is participation of major parties at the initial stage. Collecting Data Generating information Analyzing information Customize Information for each company LDB LDB Preparation Basic Services Value Added Services Participation of major stakeholders Container Tracking information Customer oriented business applications Data Information Knowledge/Business Intelligence Creation of extensive database at an early stage will generate rapid changes in supply chain.

14 Service menu Search is the basic service for traceability and thus has high application for public. Other three services (Value Added Services) would apply business intelligence to traceability information & help customers to improve their business and its efficiency Basic Search Service Value Added Service Analysis My Portal service Linkage Service with Search container transportation status on the website. Customers can utilize this information for operational & inventory management. Search with container number and/or by specific conditions Alert with some condition Various analysis services based on performance Customers can use this information as benchmark etc and improve the level of management Lead time analysis by route basis, operator basis Throughput analysis by season, month, week, day basis Liquidity analysis, Cargo volume analysis, Bottleneck Customer oriented biz applications for practical use Customers can improve operation and its efficiency. Search for expected arrival time of container Cargo order management linked with container data Yard management based on container IN/OUT information Advertising service, SNS service etc. External System Specific biz application service for certain customers Customers can improve operational efficiency and level of management Empty container location mgmt. Container repair / usage history management Container loading planning mngmnt. EDI linkage with analysis external system etc.

15 LDB System Workflow

16 Transparency & Market Competence LDB will generate visibility for containers during their transition. The visibility would bring in more transparency and open up competition among each logistics operators to provide better services to end-customers i.e. export/import related companies. Competitive environment would help reducing lead-time and transaction cost for export/import process Spiral (Visibility - Competition - Inculcating Best Practices Benchmark - More Competition - New Benchmark ) would work in a continued manner. New Benchmark? LDB Entry Point Benchmark Visibility Spiral toward developments Competition LDB promote competition! No competition No progress!

17 Existing Scenario

18 Existing Scenario for Container Tracking Port Terminal Operator Port Community System/ Navis) Concor IT System/ Hind Terminal system etc. CRIS/ FOIS System Customs Icegate System CFS No System single window for viewing the end-end container movement information ICD IT System Shipping Line IT System Trucker Information System Every stakeholder (ports, customs, trains, ICD etc.) have their own IT systems to manage their operations, which work independently and do not exchange information over real time. Leading to poor workforce planning and operations not being streamlined eventually causing delays in the container movement.

19 Post LDB Scenario

20 LDB Tracker Container Movement to Yard Container Arrival at the Port Port in Information Interface with Navis Container transported by Container transported by Advance trucks. info from Shipping Line trains LDB Operations Team Container Categorization Containers movement to yard of different terminal operator.

21 Truck Container Movement LDB Tracker Manpower deployed at the Entry & Exit Points of the Ports for the RFID Toll Once plazas tagging/de-tagging Container western reach corridor CFS, activity record would CFS be in fitted information with RFID using readers. RFID readers installed at the gates All LDB Record container /Port CFS operations out movement time when team passing attach container through the leaves RFID toll tags the plazas to premises. container would be without recorded causing and shared any delay with to LDB. the At existing For any any time Port delays importer/ Operations necessary exporter alerts can are enter sent to the the container end user/ number assigned and CHA s. get the latest update on the position RFID Tag of mapping the container. with the container number for purpose of tracking. Any Port delays out information the movement captured can through be identified RFID Handheld notification readerscan be sent to the user.

22 Train Container Movement LDB Tracker Operations/ Port team would tag the containers and sync it with the container Post LDB custom system captures clearance, the information of Port out. number The train without related information leading 24/ when 7 Helpdesk container to would any delay be support moves out updated in existing to of using ensure the ICD, port the CRIS requisite the ICD-out operations on a regular support. information is recorded in the LDB via RFID readers at Railway basis(at all Yards. major stations). The Once empty the train container reaches information the ICD, the can RFID be readers maintained at ICD by would the LDB capture for providing the ICD-in enhanced information. services to the end users.

23 3. Project Benefits

24 Benefits to Ports Visualization will lead to KAIZEN & enable ports in achieving shorter lead time and reduced cost. New Revenue stream through service charge (handling charge per EXIM Container) for LDB services. Eliminates bottlenecks thereby avoiding congestion during peak times. Streamline the work Force planning & Predictive analysis. Speedy transshipment in cooperation with shipping lines and CTO. Increased productivity through faster turnaround of containers. High level of accuracy and consistency of the information throughout the logistics supply chain.

25 Expected Benefits to Stakeholders Better Workforce Planning Faster Turnaround time and better utilization of resources / equipment Transparency in delays at Ports not accruable to Port Operations Aid in better handshaking with other stakeholders Improvement in Quality of Service for end-to-end supply chain Promoting Railways as a faster and cheaper mode of Transportation Ports CTO ICD / CFS NHAI Empty Container Management Demand Forecasting Increase in Containerized cargo Reconciliation of toll collections Analysis of chokepoints Better route planning

26 Expected Benefits to Indian Government Economy : Tangible Reduced lead time for overall import-export cycle Economy : Intangible Reduced lead time and cost which in turn shall contribute to bottom line of corporates Robust infrastructure for businesses to increase the international competitiveness Starting from DMIC zone, entire India will become an ideal destination for manufacturing facilities and attract foreign investment Boosting the manufacturing sector in India leading to more employment opportunities Enhancement of organized business leading to ease of doing business and greater trade opportunity

27 Environmental Benefits Promoting train transportation leads to reduced emissions and conservation of natural resources and decongestion of roads/ highways. Train transportation would drastically bring down the fuel cost for the government.

28 Example of Environmental benefits Rail transport is better than truck transport from the perspective of environmental preservation. Transportation wise CO2 emissions and energy consumption NOX emissions classified by means of transportation Rail Ship Truck Air CO2 emission per tonkilometer 1/6 Rail Ship Truck NOx emission per tonnage 1/17 Rail Ship Truck Air Energy consumption per ton-kilometer 1/4 Source: Nippon Express Website () is an indicator when the rail transport is assumed to be 100 Expansion of rail transport will also contribute in improving environmental condition of India. In case of Maruti Suzuki,CO2 emission per one truck is about 0.6T CO2. There is a potential reduction of about 2.58 M tco2 possible for all India container movement if the current modal share shifts to the targeted modal share in this business plan. (the modal shift from 22% rail in 2013 to 36% rail in 2022)

29 One of the Financial benefits to Indian Government Below is the economic benefit to India based on the model of inventory carrying cost. Shorter and stable lead time by LDB contributes to lower inventory carrying cost for manufacturing company Shorter and stable lead time Shorter inventory carrying period Lower inventory carrying cost Apply the logic of manufacturing company to Indian economy Manufacturing company Indian economy Inventory cost Others Finished goods cost Material Purchase cost *20% is the average number of manufacturing companies in the U.S. EXIM amount Export amount Import amount LDB contributes to reduce carrying cost Inventory carrying cost 20%* Carrying cost 20% *Source: Donald J. Bowersox, David J. Cross, M. Bixby Cooper, "Supply chain logistics management" 2002

30 One of the Financial benefits to Indian Government Assuming that DMICDC s LDB shall contribute in reducing the lead time by 5 days, it would help in savings of approx US$ 3.2 Billion by the end of ) Predicted EXIM amount: US$ 1,156 Billion (Billion US$) 2011 FC2017 Import Export Total 792 1,156 Multiply GDP growth rate in 2011 (6.5%) 2) Carrying cost: 20% 3) LDB handling container percentage of total EXIM container: if 100% 4) Reduced lead time by LDB: 5days 1,156B 20% 100% 5/365days = US$ 3.2 Bn

31 Thank You