Cover October 2015 pesting

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Cover October 2015 pesting
From the Desk of The National President
Dear Colleagues,
Please accept by greetings and good wishes for Dashera & Navaratri festivals. The
festival is a celebration of the victory of Good over Evil. Let us all pray for the good
of our country and its people.
The year 2015 has been a year of change for IIMM and we been able to deliver more value to our members
in terms of education like Skill Development, Contract Management particularly in Public Sector as well as
PDPP with World Bank/Government of India and tie up with MSME Sector.
It was my privilege to attend the World Summit of IFPSM at Barcelona on 18th & 19th, Sept. 2015. I am
delighted to inform you that our prestigious institute, IIMM, India have created a world record in attaining
the IFPSM Global Standard. I had the honour and privilege to receive these two most prestigious Global
Standard Awards for “IIMM Graduate Diploma in Materials Management (GDMM)” and “IIMM Diploma
in Supply Chain Management (DSCM)”. IFPSM Board members appreciated the efforts of our institute at
every forum like Board Meeting, Council Meeting as well as two days World Summit 2015 held at Barcelona.
This would not have been possible without the active support, hard work of the members and specially
the dedication of Mr. M.K Bhardwaj, Chairman - Board of Studies, Mr. V.K Jain, Former President, Mr.
T.A.B Barathi - Chairman, Chennai Branch and NHQ staff members and all other members who are involved
directly or indirectly.
My heartiest congratulations to all of you for this great achievement and the success. I would request all
members to give vide publicity of these accreditation to our courses so that maximum students take
advantage for enhancement of their knowledge.
Lastly my appeal to all of you is to increase our membership strength to make IIMM strongest amongst the
member associations and I am confident that we will succeed in this mission.
NATCOM 2015 is approaching fast and we are left with only two months. IIMM Vadodara team is working
very hard and expecting lot of support from all of you to make this event a grand success.
Wishing you all success and good wishes.
LALBHAI PATEL
National President - IIMM
Director - IFPSM
Mobile : +919662019638
Email: [email protected]
Materials Management Review
October 2015
3
From the Desk of Editor-in-Chief
Dear Members,
The Indian Economy finally saw a bounce back from decadal low seen over the last
two years. India’s economy expanded 7% in April – June Quarter, in-spite of weak
economic environment in developed countries and elsewhere in emerging Asia, making
it one of the world’s fastest-growing economy. It is not only fueled by Investments or
exports but also by Consumer Spending which rose to 7.4% on yearly basis.
Contrary to the growth prospects of the Indian economy, growth outlook for the global economy
experienced downward revision by the International Monetary Fund (IMF). The downward revision has
taken place on account of several factors such as contraction of growth prospects in China, Russia, Japan
and the Euro area as well as the recent drop in oil prices affecting the oil exporting economies.
According to the World Bank Report – “Global Economic Prospects”, India will take the top spot by toppling
china in 2017 with a GDP growth rate of 7.1% over China’s 7%. Country’s Current-Account Deficit, Fiscal
Deficit and inflation is well under control. In India, Investor confidence has been bolstered by the series of
economic reforms and initiatives taken by Modi Government. Aiming to reap benefits from continuing
reforms, Government has cleared 16 proposals of Foreign Direct Investment (FDI) of around Rs 6751
Crore.
Blessed with a huge domestic market and a large cheap workforce, India has an opportunity to get more
investment. Easier norms for FDI in Railway (100% FDI into railway infrastructure), Construction Sectors
(100 % overseas investment) and further opening up of defense sector with foreign investment cap of
49% has attracted Foreign Direct Investments (FDI) to the tune of USD 9.5 Billion in April – June Quarter,
31.4% increase from a year earlier.
Make in India – An initiative launched by Hon’ble PM of India, intends to make manufacturing sector as
engine of growth and employment. Under this initiative there would be increased focus on new processes,
new infrastructure, new sectors and creating a new mindset in order to increase the share of manufacturing
in GDP to 25% from the current 16%. The government has identified 25 key sectors such as automobiles,
aviation, IT, construction and textiles among other to achieve its stated goals. Further, to meet the growing
demand of skilled labour by industries, Government has launched Skill India Program under the tagline of
“Kaushal Bharat – Kushal Bharat”.
In order to promote ease of doing business, Government is working on areas like Dispute Resolution in
Major Contracts, Expeditious Arbitration Proceedings, Public Procurement Law, Goods & Services Tax and
Speedy Clearances to Investment Projects. Substandard infrastructure and outdated labour laws are all
concerns for big companies who want to invest in India - but it is getting better.
Overall there is a real sense that a new set of reforms and the enthusiasm in the markets can lead India
towards another prosperous era of high growth. The government’s job is not yet over. Given the high
expectations of success, it has now become imperative for policy makers to make the most of the current
situation and address the major structural issues affecting the economy and growth momentum to be
sustained.
(M.K.BHARDWAJ)
4
October 2015
Materials Management Review
MATERIALS MANAGEMENT
REVIEW
Volume 11 - Issue 12
IIMM is a charter member of
International Federation of
Purchasing & Supply Management
Editor in Chief & Publisher:
Mr. M. K. Bhardwaj
Past President, IIMM &
Former Director Ministry of Defence
Core Committee :
Mr. Ashok Sharma, President 5M India
Mr. V. K. Jain, Former ED, Air India
Mr. Tej K Magazine, Management Advisor
National President :
Mr. Lalbhai Patel
Editors :
Mr. O.P. Longia (Sr. Vice President)
Mr. H.K. Sharma, VP (North)
Mr. Samiran Basu, VP (East)
Mr. G.B.Palankar, VP (West)
Mr. R. K.Rastogi, VP (South)
Mr. A.K.Mehra, VP (Central)
Mr. P.M.Biddappa, NS&T
Mr. C. Subbkrishna, IPP
Prof.(Dr.) V. K. Gupta - IMT, Ghaziabad
Correspondence :
MATERIALS MANAGEMENT REVIEW
Indian Institute of Materials
Management
4598/12 B, Ist Floor, Ansari Road,
Darya Ganj, New Delhi - 110 002.
Phones : 011-43615373
Fax: 91-11-43575373
E-mail: [email protected] &
[email protected]
Website : iimm.org
(October 2015)
CONTENTS
PAGE NO.
TAX EXEMPTIONS INGST - PRINCIPLES AND
PRACTICES
STATUS OF SUPPLY CHAIN MANAGEMENT IN INDIA 11
INDUSTRY IMPERATIVE: TRANSITIONING FROM
SUPPLY CHAIN MANAGEMENT TO A VALUE
CHAIN STRATEGY BY 2025
6
15
ACHIEVING COMPETITIVE SUPPLY CHAIN THROUGH
BUSINESS PROCESS RE-ENGINEERING: A CASE FROM
DEVELOPING COUNTRY
18
EASE OF DOING BUSINESS IN INDIA - THE GROUND
REALITIES ARE NOT TOO ROSY
25
RE-BIDDING FOR PRIVATE CARGO TERMINALS
26
DIGITAL INDIA : AN OVERVIEW
27
WTO UPDATE : THE REVISED WTO AGREEMENT
29
CUSTOM EXCHANGE RATES
30
BIS NEWS : THE BUREAU OF INDIAN STANDARDS
BILL 2015
31
PERSONALIZED RETAIL EXPERIENCE: THE
ANSWER BY THE BRICK-AND-MORTAR STORES
32
INTERNATIONAL NEWS
34
COMMODITY INDEX
35
BRANCH NEWS
36
EXECUTIVE HEALTH
57
LIST OF IIMM BRANCHES
58
Edited, Printed & Published by :
Printed at :
Power Printers,
4249/82, 2 Ansari Road, Daryaganj,
New Delhi - 110002
INDIAN INSTITUTE OF MATERIALS MANAGEMENT
4598/12 B, Ist Floor, Ansari Road, Darya Ganj, New Delhi - 110 002.
Phones : 011-43615373 Fax: 91-11-43575373
E-mail: [email protected] & [email protected]
Website : iimm.org
(Published material has been compiled from several sources, IIMM disowns any responsibility
for the use of any information from the Magazine if published anywhere by anyone.)
Materials Management Review
October 2015
5
TAX EXEMPTIONS IN GST
— PRINCIPLES AND PRACTICES
R. SEKAR
COMMISSIONER OF CUSTOMS, PUNE
U
to collect the tax from the consumer and deposits
the amount with the Government. VAT being a tax
on consumption of goods and services, VAT paid at
intermediate stages are only pass through
transactions. However, differentiating taxes as direct
and indirect based on the person who bears the
burden of the tax is debatable since burden of a
direct tax like Income Tax may also be shifted to
consumers.
niverse and life in Universe often do not confirm
to a linear mathematical model. In spite of best
intention and efforts, it is difficult to design a
perfect Tax system which is universally applicable for all
times to come. Ability to adapt to changing realities is
critical for a Tax system to sustain and be relevant. Tax
Policy and Tax Administration are no exception and do
require to move with time and place reflecting the social,
economic, cultural and political realities.
Tax on consumption of goods and services on value
added basis, known as Value Added Tax (VAT) or
Goods and Service Tax (GST), has been emerging as
tax of the future. In an increasingly globalised and
competitive environment, direct taxes are being
reduced and the current global trend is to derive
higher proportion of revenue from indirect taxes.
VAT is an indirect tax on consumption of goods and
services, covering every single commercial
transaction and recovered at each stage of value
addition until one reaches the final consumer. It is
distinct from turnover tax. VAT catches all manner
of transactions and the word supply indicates any
output. The scope of supply is more than sales. In
VAT, it is of no consequence as to whether the
supplier is a manufacturer, wholesaler or a retailer,
supply goods and services or acting as principal or
as agent. VAT is charged down the chain of
distribution until reaching a consumer who is not
registered for VAT.
6
Under VAT, tax is imposed and collected at each
stage of value addition in the course of production
and distribution of goods and services. Tax imposed
and paid on input goods and input services is
reclaimed as input credit and the total tax liability
at each stage is calculated after granting input tax
credit. Generally a registered person can claim credit
for input VAT on goods and services purchased and
used in connection with the taxable outputs. Input
tax credit claimed reduces tax liability. Tax base is
effectively limited to each stage of value addition.
VAT secures revenue by being collected throughout
the process of production – distribution without
distorting production decision.
VAT is generally required to be paid by the supplier
of goods and services. However, it is the consumer
who ultimately bears the burden of VAT as part of
the consumer price. Supplier merely acts as an agent
October 2015
Fiscal and Monetary Policies are tools available to
Government to achieve socio-economic and political
objectives. Challenge before any Government is to
balance growth with development and equity. Policy
on economic growth should appropriately factor the
distributional-objective of reducing disparity, known
as inclusive growth. Growth with equity is the
foundation of democratic system.
VAT is the best form of general consumption tax.
However, equity and distributional effects of VAT
and its potentially distorting economic effects are
matters of debate. There is also a view that VAT is a
regressive tax. There is, therefore, a strong reason
to introduce measures which will protect the poor
when implementing GST. Though VAT is accepted
as an efficient and simple method to tax goods and
services and raise revenue, the issue of equity and
consequent impact on maintaining political
equilibrium while designing VAT cannot be ignored.
Re-distributional effect of tax policies, especially in
the context of globalization and liberalization,
acquires more importance when designing a
politically acceptable tax system. Tax policy cannot
ignore historical realities.
Taxation and Spending reflected in the Revenue and
Expenditure Budgets of the Government are two
dimensions of the Fiscal Policy. Re-distributing
income through expenditure is directly used to
reduce disparity. Primary objective of tax policy is
to mobilize resources without affecting efficiency
and competitiveness. However, policy makers do
need to appropriately factor the distributional
aspects so that the burden of taxation is distributed
in a fair and just way. Empirical evidences support
the view that the most efficient way to reduce
income in-equality over the long term is to increase
public investment on the human capital of the poor
and making available the public goods and services
to the needy.
Materials Management Review
Unlike Income tax, consumption taxes encourage
savings which is critical for developing and
transitional economies.
Forms of VAT differ in different countries depending
upon the varieties of objectives to be achieved and
their priority. Needs and concerns of developing and
transitional economies may not be similar with that
of developed economies. Though features like single
rate with no exemptions, zero-rating instead of
exemptions and immediate refund of unutilized
credit are considered as desirable characteristics of
an ideal VAT design, these may not be possible or
desirable in the context of a particular country or
particular time, for political and practical reasons.
Some of the bad features may be inevitable for
successful adoption in the first place. It depends lot
on the ability to make difficult choices. Political
considerations influence most tax policy decisions.
VAT design needs to be consistent with the objective
to sustain the political equilibrium and to balance
equity, efficiency and sustainability in the fiscal
sphere.
Though single rate is considered as ideal and widely
recommended, it is only Denmark in European
Union that follows single rate. Deviation between
standard and weighted average VAT rate in the
European Union varies in percentage terms between
0% in Denmark and 32% in Spain. Exemptions vary
even more widely from country to country. Even in
Denmark where there is one rate, exemptions are
provided including passenger’s transport.
VAT is widely followed in developed and developing
countries and it is a major and buoyant source of
Government’s revenue. VAT with broad base and
uniform rate is neutral to transactions and does not
interfere with patterns of production and
consumption. Non-uniform rates and extensive
exemptions affect the neutrality of tax incidence,
distort patterns of consumptions as well as
production and distribution and complicate the tax
structure.
Exemptions are derogations to main principles and
reduce the tax base. Special treatment is granted
by exempting particular categories of goods and
services. Primary causality of tax exemptions is
simplicity. Exemptions inevitably make tax laws and
tax administration complex and provides scope for
avoidance and litigation. Direct consequences of tax
exemptions are, —
net revenue loss to Government.
increase in compliance cost to business
increase in administrative cost to tax
administration.
Invisible consequences of tax exemptions, often
adverse, are many. Appearances could be deceptive.
What seems obvious may be different from what is
real. Form may not necessarily reflect the substance.
Materials Management Review
Tax exemptions, especially mid-stream tax
exemptions, apart from making the tax system
complex also result into unintended and adverse tax
consequences.
There are two types of tax exemptions.
Exemptions without the right to deduction of tax
paid on inputs.
Exemptions with the right of deduction of tax
paid on inputs, known as zero-rating.
It is necessary to standardize exemptions in order
to achieve a common basis of assessment. Certain
exemptions are required in the public interest e.g.
Medical and Educational services. Certain
exemptions are provided on the reasoning that the
supplies are made almost exclusively by Public
Authorities.
Government have been increasingly moving away
from business activities. Consequently, supplies
which are traditionally provided only by public
authorities are increasingly being provided by nonpublic operators within a competitive environment.
Taxing a supply provided by private operators but
exempting the same supply if provided by public
authorities creates distortions of competition.
Principle of fiscal neutrality requires treating
supplies which are in competition with each other
in the same way irrespective of the status of the
supplier. Status of the supplier should not be the
criteria to determine the tax consequences of a
transaction.
In certain cases, exemption may give rise to
distortion of competition not immediately but in the
future. This effectively prevents private operators
from providing such supplies in future and such
cases can not be merely treated as hypothetical
possibility. Exemptions based on the status of the
service provider by itself give rise to distortion of
competition, either immediately or in the future. If
governmental units make sales of goods and
services, there is no general justification in exclusion
from tax simply because the vendor is a
governmental unit. Specific justifications for the
exemption need to be provided.
Exempted goods and services suffer taxes paid on
domestic inputs (VAT) and imported inputs (CVD).
Exemption results into denial of credit of VAT and
countervailing duty (CVD) paid on inputs used in the
exempt outputs. Suppliers of outputs can not
recover input taxes which relate to exempt outputs
and hence cannot pass the input tax to customers.
Exemptions for products used at intermediate stages
of production or distribution result into break in the
tax credit chain and results into cascading effect and
multiple taxation. Midstream exemptions have the
effect of increasing the consumer prices and the VAT
revenue.
October 2015
7
To avoid tax on inputs, there will be tendency to
provide inputs in-house instead of purchasing from
other suppliers. Exemptions to intermediate goods
used in the production of final consumption goods,
thus, provide incentive towards vertical integration.
This will affect especially small and medium level
suppliers of intermediate goods and services.
A midstream exemption under a credit-invoice
system of VAT is harmful to business. Grant of
exemption for domestic supply complicates the tax
system. Apart from increasing the consumer prices
and administrative and compliance costs, exemption
leads to adverse consequences on trade and
industries. Exemption to final consumption products
may have impact on retail prices.
Problem becomes more acute, wherein a business
provides both taxable and exempt supplies. In order
to deny credit of input taxes on purchases
attributable to exempt activity, a business needs to
either maintain separate accounts or to allocate the
common credit between taxable and exempts
supplies.
Output is not taxable on exempt supplies. A person
who is making exempt supplies cannot charge any
output tax from his customers and not being a
taxable person cannot be registered. At the same
time he cannot also recover the input tax he incurred
which is related to those exempt supplies. Input tax
which cannot be claimed, because it relates to an
exempt supply, is known as “exempt input tax”.
A registered business which makes both taxable and
exempt supplies cannot charge VAT on the exempt
supplies and also cannot claim VAT incurred on
inputs used for exempt supplies. If a business is not
fully taxable, it cannot recover all its input tax. It is,
therefore, necessary to determine how much of the
input tax incurred cannot be reclaimed. Input credit
is not available for goods and services used
exclusively in making exempt supplies. This is known
as direct attribution. In respect of input taxes used
both for taxable and exempt supplies, residual input
tax needs to be apportioned to determine how much
is attributable to exempt supply. The percentage of
residual input tax attributable to exempt supplies is
calculated as follows:
situations. There are two methods to calculate
exempt input tax
Stage one is to determine input taxes which are
directly attributable to exempt supplies. Stage two
is to apportion residual tax using either the Standard
method or the Special method. The Standard
method apportions the residual tax to exempt
outputs in the ratio of value of exempt outputs to
total outputs. This method presumes that there is a
direct and proportionate relationship between the
VAT paid on inputs and the value of the output.
Though this method has the virtue of relative
simplicity, it may distort the recovery of input tax in
favour of or against the supplier in large number of
cases. If the transaction is not understood
appropriately, the ratio could be potentially
dangerous. There may not necessarily be a direct
relationship between output value and the input tax
incurred for the output. Supplier need not
necessarily use Standard method but can apply for
Special method for apportioning the residual tax. If
the Department is of the opinion that the Standard
method is distortive and they cannot agree with the
Special method suggested by the supplier,
Department has got the right to suggest a Special
method. Depending upon the business, different
criteria are adopted to arrive at Special method.
Certain exemptions do not depend upon the kind
of goods and services provided by the supplier but
depend upon the nature of the entity. Such
exemptions are known as “Entity exemptions”.
Entity exemptions under VAT are of two types. The
first type is exemption provided to small businesses
based on the annual sales that are below the
exemption threshold limit prescribed. Businesses
availing small business exemption generally are not
registered and also do not claim input credit of tax
on their taxable purchases. Customers purchasing
goods and services from the suppliers who avail
small business exemption are also denied any VAT
benefit.
The second type is exemption provided for all sales
or particular sales made by an entity because of the
nature of the entity e.g. Insurance premium supplied
by specific Insurance companies. Exemption based
on the nature of the seller is generally provided to
Government and other specific non-profit
organizations. These entities being the supplier of
exempt outputs, are outside the VAT system, but
these entities still required to pay tax on inputs and
imports.
Exempt entity that is denied credit of VAT on inputs
used in its exempt business activities may attempt
to avoid tax on some purchases by providing them
in-house rather than purchasing them from outside
Value of exempt Supplies (excluding VAT) x 100
Value of all supplies (excluding VAT)
For the purpose of this calculation, value related to
capital goods shall be excluded.
8
Partial exemption occurs when a business has both
exempt and taxable outputs. VAT which relates to
exempt outputs known as “exempt input tax” is
required to be disallowed. The main principles to
compute “exempt input tax” are relatively straight
forward but applying them in practice is much more
complicated because of the infinite variety of
October 2015
Standard method.
Special method.
Materials Management Review
taxable suppliers. To prevent such incentive towards
vertical integration, some countries treat certain
self-supplies by exempt entities or organizations as
taxable supplies to themselves, notwithstanding the
general exemption from VAT on their outputs.
Zero-rating is a mechanism in VAT system to
completely neutralize taxes from a particular
transaction. A supplier of Zero-rated transaction
does not charge VAT on the supply. Still such supplies
are classified as taxable supply but subject to zero
rate. Unlike exempt supplies, the supplier of zerorated supplies is entitled to recover input credit on
the taxable purchases attributable to the supply.
Export of goods is generally zero-rated. Under the
destination principle, services consumed outside the
taxing country are zero-rated and gets taxed in the
country of consumption. It is felt desirable to zerorate only exports though some countries do zero-
rate certain otherwise taxable domestic
transactions.
Cascading effect is one of the major adverse
consequences of mid-stream tax exemption. Exempt
seller cannot issue a tax invoice. Purchaser can not
claim any input credit on such purchases. Embedded
taxes become part of the price and will be subject
to VAT again. The purchaser shifts the embedded
tax as cost and passed on to the customers in the
form of higher prices.
Exemption granted under the credit-invoice VAT at
intermediate stage of production or distribution
may increase the price paid by the final consumer
as compared to a situation where these exemptions
are not provided. Following examples illustrate the
effect of mid-stream exemptions.
Table I. VAT rate is assumed at 10% ad valorem
Amount in Rupees
Supplier
Inputs
Value
addition
Purchase VAT
Value
paid
Total
A
1000
100
1100
B
1500
150
C
2500
D
4000
Sale Price
VAT liability on output
Value
VAT
payable
Total
Through
Input
Credit
On
Total
value
addition
500
1500
150
1650
100
50
150
1650
1000
2500
250
2750
150
100
250
250
2750
1500
4000
400
4400
250
150
400
400
4400
500
4500
450
4950
400
50
450
Total
3500
350
Final price to consumer Rs. 4950/VAT paid on value addition Rs. 350/Table II. Assessee B is the exempt supplier. Amount in Rupees.
Supplier
Inputs
Value
addition
Purchase VAT
Value
paid
Total
A
1000
100
1100
B
1500
150
C
2750
D
4250
Sale Price
Tax Paid
Value
VAT
Payable
Total
Through
Input
Credit
On
Total
value
addition
500
1500
150
1650
100
50
150
1650
1000
2750
-
2750
-
-
-
-
2750
1500
4250
425
4675
-
425
425
425
4675
500
4750
475
5225
425
50
475
TOTAL
3500
625
Final price to consumer Rs. 5225/VAT paid on value addition Rs. 625/-
Materials Management Review
October 2015
9
Table III. Assessee C is the exempt supplier. Amount in Rupees.
Supplier
Inputs
Value
addition
Purchase VAT
Value
Paid
Total
A
1000
100
1100
B
1500
150
C
2500
D
4400
Sale Price
Tax Paid
Value
VAT
payable
Total
Through
Input
Credit
On
Total
value
addition
500
1500
150
1650
100
50
150
1650
1000
2500
250
2750
150
100
250
250
2750
1500
4400
-
4400
-
-
-
-
4400
500
4900
490
5390
-
490
490
Total
3500
640
Final price to consumer Rs. 5390/VAT paid on value addition Rs. 640/formal sector and increase the operating cost in the
informal sector. Exemptions may discourage
formalization of the economy. Despite continuing
popularity and demand for exemptions, tax
incentives are proved to be ineffective. They reduce
revenue and complicate the fiscal system without
achieving the stated objectives. Simple tax system
encourages people to come to formal sector from
informal sector. A complex tax system has got inbuilt
tendency to discourage entrepreneurs to move
towards formal tax system. Experiences show that
loading more and more objectives on a tax system
through incentives, however well meaning they are,
do not achieve the desired objectives.
It may be seen that VAT paid on value addition when
there is no exemption is Rs. 350/-and whereas VAT paid
on the same value addition is Rs. 625/-when B’s supply
is exempt and Rs. 640/-when C’s supply is exempt.
Consequently consumer prices for the same product in
these three situations are Rs. 4950/-, Rs. 5225/-and Rs.
5390/-respectively. Variation is on account of break in
credit chain which results into cascading effect.
Retail stage exemption reduces revenue but there
is a possibility for reduction in the retail prices in
such cases. Although exemptions on retail sales may
be expected to reduce prices to the consumers and
VAT revenue to the Government, exemptions
granted in the middle of the production and
distribution chain actually increase the consumer
prices and also VAT revenue over the amounts that
would occur if those mid-stream sales are taxable.
When goods are exempt from VAT, countervailing
duty (CVD) is not imposed on similar goods
imported. Tax on imported goods being totally
neutralized in the exporting country, imported
goods without CVD have clear competitive
advantage over similar domestically produced
goods. Exemption thus becomes injurious to
domestic producers.
In principle, a more inclusive tax base combined with
targeted subsidy to the consumption basket of the
poor would be a desirable option. If that is not
possible, it may be better to supply such items at a
reduced rate rather than to exempt them
completely. However, for administrative and other
practical considerations in certain cases it may be
justifiable to exclude these items which constitute
major consumption expenditures of the poor.
10
Tax system should reduce the operating cost in the
October 2015
Extensive use of tax incentives, apart from reducing
the availability of resources required in funding
essential public sector activities, complicates tax
administration, facilitates evasion, encourages
corruption, increases litigation and makes the tax
system inefficient. Experiences clearly prove that tax
exemptions encourage rent-seeking and provide
scope for lobbying and special interest groups.
Though the world is full of opportunities, seizing and
encashing the opportunities is in one’s own hand.
Growing may not be a painless process. Difficult
decisions are to be taken to secure our future. World
belongs to the strong and not the meek. India has
to continue the journey with pride and confidence.
We have to be an active player in creating the future
instead of being a spectator in watching it happen.
“Destiny is not matter of chance.
It is a matter of choice.It is a not thing to be waited for,It
is a thing to be achieved”
William Jennings Bryan
Source : www.gstindia.com
Materials Management Review
STATUS OF SUPPLY CHAIN MANAGEMENT IN INDIA
M. VENKATA RAMANA REDDY
ASSOCIATE PROFESSOR, DEPARTMENT OF MECHANICAL ENGINEERING
G.NARAYANAMMA INSTITUTE OF TECH. AND SCIENCE, SHAIKPET, HYDERABAD
A
bstract: Supply Chain Management and Logistics
involves optimizing the delivery of goods, services
and information from supplier to customer. An
effective supply chain makes companies competitive
and profitable. Information is essential to making
optimal supply chain decisions because it provides the
global scope needed to make optimal decisions.
Information technology (IT) provides the tools together
this information and analyses it to make the best supply
chain decisions. Latest and the state of art technologies
and management tools ERP, CRM, and SRM along with
auto ID technique RFID have to be used for improving
the performance of Supply Chain Management and
Logistics in India. Key words: SCM and Logistics, IT,
CPFR, ERP, CRM, SRM and RFID.
I. INTRODUCTION :
Supply Chain Management has
gained significant importance in the 21st century. It is
so because small companies like Wal–Mart, Dell, and
Amazon owe their entire success to their agile and
adaptive supply chain. These were small companies
virtually unknown not so long ago and suddenly they
became the most competitive and admired companies
on the stock bourse. However some Indian companies
are moving towards making their supply chain and
logistics efficient, most of them have done very little or
nothing. If companies choose to compete in the global
environment, they will have to look for ways to reduce
expenditures of their suppliers and channel partners,
logistics or distribution partners. This reduction in cost
will leads the revamping of supply chains and significant
investment in information technology, because
information technology tools and techniques plays very
important role in improving the status of the SCM.
1.1 SCM and Logistics defined : The Council of Logistic
Management (CLM) (2000) defines SCM as “the
systematic, strategic coordination of the traditional
business functions and tactics across these business
functions within a particular organization and across
business within a supply chain for the purpose of
improving the long term performance of the individual
organizations and the supply chain as a whole”.
II. LITERATURE SURVEY : The traditional protective
economic, industrial and organizational boundaries have
been demolished. To compete successfully today„s
Materials Management Review
marketplace, organizations need concurrently to manage
effectively and efficiently the activities of design,
manufacturing, distribution, service and recycling of
their products and services to customers. The size of the
Indian logistics market is estimated as US$ 14.31 billion
in 2004 and is expected to grow to US$19.54 billion in
2009. The logistic cost as percentage of the gross
domestic product (GDP) stood 13% in India in 2004. Close
to 22% of the aggregate sales, amounting to US$ 25
billion is tied up in inventories in the supply chain
network countrywide. Indian organizations are looking
for collaboration with supply chain partners to cope up
with the increasing uncertainty of supply networks,
globalization of business proliferation of product variety
and shortening of product life cycles. According to Lee„
top performing supply chain possesses three very
different qualities. They are –
1. Agility
2. Adoptability and
3. Alignment
The above qualities cannot be attained without
collaboration, optimization and connectivity. The recent
technological advances in IT have made it possible to
make supply chain lean and thin. Holistically speaking,
without IT systems in place, no supply chain could be
agile nor could adapt and align fast to the changing
business needs.
III. IT TOOLS AND TECHNOLOGIES : Information is
essential to making supply chain and logistic decisions
because IT provides the global scope needed to make
optimal decisions. Best in class companies world wide
have successfully used sophisticated IT systems to
streamline process and enable effective decision making.
The information necessary to achieve global scope,
corresponding to the different stages of the supply chain
as 1) supplier information 2) manufacturing information
3) distribution and retailing information and 4) demand
information.
According to the Zillur Rehman s paper, in a survey of
India that most popular use of IT is in transportation,
followed by order processing, managing vendor
relations, purchasing/ procurement and customer
services. Information technology in accessing real time
information regarding product availability, inventory
October 2015
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level, shipment status and product requirements,
thereby improving supply chain efficiency . Also for
designing the appropriate network structures, best
practice companies are moving from traditional rule of
thumb to using advanced IT tools and technologies.
instance through web site each member in the chain can
access the shared database. E-Supply chains can be
designed and studied through a systematic approach,
which considers the various levels at which information
technology can be applied in a traditional supply chains.
3.1 Collaborative Planning Forecasting and
Replenishment (CPFR) : CPFR model was developed by
SCOR (Supply Chain organization) and “at its essence,
CPFR is a set of business processes that helps eliminate
demand and supply uncertainty through improved
communication between supply chain trading partners”.
Nine CPFR is a model to develop collaboration and this
to happen there should be a complete integration
between manufacturer, their suppliers, shipper, and
logistics partner. The primary benefit of integration is
that all business units and supply chain partners share
the same data, synchronize action and minimize
distortions and bullwhip effect in demand management”.
This integration would require technology platforms such
as ERP, SRM or CRM platforms or legacy systems
connected through web service.
3.6 Integrated supply chain network : An integrated
supply chain network is a group of independent
companies, often located in different countries, forming
a strategic alliance with the common goal of designing,
manufacturing, and delivering right-quality products to
customer groups faster than other alliance groups and
vertically integrated firms. The structure of an integrated
supply chain network held together by a logistics and
information network is shown in Figure. Such an
integrated supply chain provides the basis for application
of various information technologies that transformed it
into e-supply chains.
3.2 Enterprise Resource Planning (ERP) : ERP provides
the transactional tracking and global visibility of
information from any part of a company and its supply
chain that allows intelligent decisions to be made. This
real time information helps a supply chain to improve
the quality of its operational decisions. This ERP software
has been successful in improving data integrity within
the supply chain.
3.3 Customers Relations Management (CRM) : In the
changing Global environment, increasing customer
satisfaction is one of key success factors in all industries
so also in supply chain management. So it is very much
essential to make all policies keeping in view customer
and availability of technology. In traditional method of
CRM, phone, paper, personal interaction etc are used
for communication and relationship. But with IT enabled
SCM with CRM software can store customer details,
while making transactions with the customer monitors
buying and behavior of decision of different customers
minimize internal fault, help in the automation process,
automatic tracking and response, bill finalization and
analysis of communication pattern.
3.4 Supplier Relation Management (SRM) : Supplier
Relation Management is to streamline and make more
effective the process between an enterprise and supplier.
SRM includes both business practices and software and
is a part of the information flow component of SCM.
According to the proponents, the use of SRM software
leads to lower production costs, higher quality but lower
priced end product.
3.5 Electronic Supply Chain (E-Supply Chain) : With the
quick development of Electronic commerce, SCM can be
made more effective through electronic means. For
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October 2015
Figure: Integrated Supply Chain Network
3.7 Radio Frequency Identification (RFID): Radio
Frequency Identification is a type of automatic
identification system. The purpose of RFID system is to
enable data to be transmitted by a portable device called
tag, which is read by RFID reader and processed
according to the needs of a particular application.
The data transmitted by the tag provides identification
or location information or specifies about the product
tagged, such as price, colour date of purchase etc.
A basic RFID system consists of three components namely
an antenna or coil, a transceiver, and a transponder (RF
tag) electronically programmed with unique information.
The antenna emits radio signals to activate the tag and
read and write data to it. Antennas are the conduits
Materials Management Review
between the tag and transceiver, which controls the
system data acquisition and communication. When an
RFID tag passes through the electronic magnetic zone, it
detects the readers activating signal. The reader decodes
the data encoded in the tag s integrated circuit and it is
passed to the host computer for processing.
4.4 Lack of proper logistic infrastructure: Country wide
infocomm B2B network, and poor conditions of roads
results in capital being tied up in huge stock piles of
obsolete goods both in terms of moving inventory as
well as at the factory site, and lack of professionally
competent logisticians.
Wal-Mart has successfully tested the technology with
the top 100 suppliers, it is now taking steps to expand
roll out of the new technology across other suppliers
and stores.
V. WAYS AHEAD OF IMPROVING THE SCM
In India very few companies are implementing this
technology. Because of the high cost of implementation
of the system, most of the Indian companies are not in
favour of RFID technology. This high cost is associated
with retooling, extensive partner relationship across
channel members particularly, manufacturers and
retailers. In future, with a prospect of cost effectiveness,
RFID may be put to use extensively.
3.8 Web Services : Not all companies can afford to deploy
the recent ERP, SRM, CRM and other software modules
as these are expensive and because replacing the legacy
ones entail huge cost and effort. However, it is necessary
to integrate the old traditional system with the company
and supplier and other channel partners. The web
services do exactly that to integrate the old legacy system
with one another thus saves cost on the deployment of
the costly new IT systems.
IV. PROBLEMS TO OVERCOME IN IMPROVING
PERFORMANCE OF THE SUPPLY CHAIN MANAGEMENT
4.1 High cost of Supply Chain: The Indian industry
spends an exceptionally high amount of 13% of its GDP
on logistics and 22% of the aggregate sales are tied up
in inventories.
4.2 Inadequate infrastructure scenario required for
efficient Supply Chain: The fifth largest country in terms
of gross national product (GNP) and purchasing power
parity, consumer base of over a billion people (Centre
for Monitoring Indian Economy, 2000), India is the fastest
growing market in the world.
4.3 Inadequate investments in IT: Though India is a
leading exporter of IT products, Indian companies are
unfortunately least inclined to use them. Hence, the IT
penetration in India is low. This is not surprising that
Indian companies are 1.3% of the gross sales. For
companies that use IT systems, there seem to be a clear
bias towards using stand-alone IT systems. Using these
systems would mean that collaboration would be low
as these stand-alone systems are not friendly when it
comes to implementing recent supply chain models like
CPFR, VMI etc. in the present scenario the supply chain
around the world is On-Demand, using technology such
as internet, mobile, wireless, RFID etc, whereas Indian
supply chain is still to come out of this slumber.
Materials Management Review
5.1 Investment in IT : If the Indian companies are to
adopt global supply chain standards and benchmarks
against the global companies there is a long way ahead.
In addition, this way starts with investment in
information technology. This investment will go towards
making companies connect with suppliers and partners.
This connectivity will improve the visibility in the chain
and thus collaboration can take place with partners. This
collaboration will make the supply chain agile and align
itself to the changing market demand.
5.2 Leverage IT Capabilities: The IT talent is not hard to
find in India and Indian companies can use it to their
advantage. They can employ trained IT engineers at lower
cost as compared to the counterparts in other countries
and thus become competitive.
5.3 Align Supply Chain Strategy with Business Strategy
So far, Indian companies have marketing, personnel,
accounts and other departments but no supply chain
department to speak of little. Purchase or procurement
section has more or less carried out the supply chain
and logistic functions. These departments however are
not aligned to follow supply chain as a strategic area and
are often not in harmony with other departments or with
partners. Now the time is ripe to align competitive
advantage, increase profitability, and market share in
these challenging times.
5.4 Collaborative Product Development (CPD) : Is a
business strategy, work process and collection of
software application that facilitate different
organizations (may be partners or competitors) to work
together on development of a product and thus saves
costs. Coming up with new products is time consuming.
This can be done by CPD.
The major benefits of CPD:
1.
Acceleration of time to market provides improved
customer satisfaction, greater profit potential and
gain in market share.
2.
Reduces costly design flaws and improves quality
and reduces time to market the products.
3.
Effective data sharing ‘any time any place’ keeps
everyone on the same page, eliminating costly errors
and delays.
4.
Effective communicative capabilities help ensure
that right information reaches the right person in
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13
right a way.
5.5 As mentioned obstacles in 4.4, if those systematic
obstacles are overcome, significant benefits can be
reaped through the multiplier effect of logistics in all
economic sectors.
5.6 Potential savings for India - is possible if logistic costs
decreases by 1%, approximately $ 4.8 billion per year as
Indian GDP is 480 billions( Indian logistic cost per GDP is
13%).
VI. CONCLUSIONS : Effective Supply Chain Management
and Logistics contributes to competitive advantage to
organizations. This paper conveys the conceptual idea
of SCM and Logistics as well as importance of information
technology tools and technologies for improving the
performance of SCM and Logistics in India. To achieve
this improved performance, organizations should focus
on applying techniques which offer a strategic
opportunity for companies to gain an increase in
revenue. This is possible by refocusing on integrating IT
with supply chain management and Logistics The desired
technology platform can capture enterprise-level data
and deliver information to support the specific needs of
their global manufacturing or distribution. Organizations
must realize that they must harness the power of IT to
collaborate with their business alliances.
Business organizations must offer more value for less
money by utilizing the latest innovative technologies to
achieve continuous quality improvement by being highly
cost effective. In their search for excellence, the leading
business organizations of the world are using SCM, which
employs the latest and state-of-the-art IT technologies
and tools.
This leads to the much sought after cost effectiveness
by exploring leading-edge use of information technology
in supply chain integration. Hence, to succeed in today s
global marketplace, Indian organizations must look at
streamlining their supply chain through the successful
deployment of information technology.
Many management gurus believe that India has the
potential to emerge as the economic super power of the
world in the near future. In order to achieve this status,
the Indian business organizations must strengthen their
practices learning a lesson from the global counterparts.
The day is not far when Indian professionals will combine
their expertise in IT with applications in SCM and
Logistics to emerge as winners.
REFERENCES
[1]
14
Arshinder, Kanda, A., Deshmukh, S.G., 2008. “The
supply chain Coordination: perspectives, empirical
studies and research directions” international
journal of production economics 115, 316-335.
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Arshinder, Kanda, A., Deshmukh, S.G., “Supply
chain Coordination issues: an SAP-LAP framework”,
Asia pacific journal of marketing and logistics, vol
10 no3 2007 pp 240-264
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“Basics of Supply Chain Management” by Lawrence
D.Fredenedll, Ed Hill, The St Lucia press/ APISC
series on Resource Management
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Bentit M.Beamon, “Measuring Supply Chain
Performance and Production Management,
1999,vol-19, no:3 pp.4-16.
[5]
B.S. Sahay and Ramaneesh Mohan, “The Supply
Chain Management Practices in Indian Industry”,
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Logistic Management 2000, vol: 33, no 7 , pp582606.
[6]
David Simchi-Levi, Philip Kaminsky, Edith SimchiLevi (2000).” Designing and Managing the Supply
Chain.” Burr Ridge, IL: The McGraw-Hill Companies,
Inc
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Lee I Hau “The triple a supply chain”, Harvard
Business Review, October 2004.
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Min.S, and Mentzer.J.T, “Developing and Measuring
Supply Chain Concepts”. Journal of Business
Logistics 2004, Vol 24 No1.
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R.P Mohanty, S.G. Deshmukh, “Essentials of Supply
Chain Management”, 2004, Jaico publishing house.
[10] Sanjay Upendram, kaushika Madhavan, Arun
Krishnan “Competitive Automotive Supply Chains
in India” white paper, 2004, November, in souvenir,
Indian Institute of Materials Management, Supply
Chain expo 2005.
[11] Sunil Chopra and Peter Meindl “Supply Chain
Management: Strategy, Planning and Operations”.
Pearson Education Pvt.Ltd., India.
[12] “Understanding the E Supply Chain Design and
Future trends”, N.Viswanadham and Roshan
Gaonkar, The Logistic Institute- Asia Pacific,
National University of Singapore.
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Critical Research and Theoretical framework”
L.J.Cheny and A.paulraj, International Journal of
Production Research, 2004, vol 42 No.1
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Study of Indian Companies” Zillur Rehman,
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Source : www.ijetae.com
Materials Management Review
INDUSTRY IMPERATIVE: TRANSITIONING FROM SUPPLY CHAIN
MANAGEMENT TO A VALUE CHAIN STRATEGY BY 2025
DOUGLAS K. FRYETT - FOUNDER OF FRYETT CONSULTING CORP. &
KEITH WARREN - CHAIR OF TECHNICAL COMMITTEE OF EFCEM &
DIRECTOR OF CESA
S
upply chain management, as the name implies, is
all about managing something that is rather “static”
in nature. By simple definition, it is about
“managing” an existing model designed to provide a
certain degree of “value” to all channel participants that
are part of a particular supply chain. Food service
equipment and supply manufacturers have their
upstream vendors who are supplying the various raw
materials and components necessary to manufacture
and assemble their particular family of products. These
manufacturers, in turn, have their down-stream channel
partners as well – equipment and supply dealers, food
distributors, design consultants, and service agencies –
who are “responsible” for providing an “efficient” goto-market strategy for the aforementioned various
manufacturers.
But how can a company create sustainable “value” for
its constituents? How can it make value creation one of
its corporate values and institutionalize it? Todd Zinger,
in a recent Harvard Business review article, proposes that
value can be created through the convergence of three
“sights” – foresight, insight, and cross-sight. Let’s take a
closer look at these “sights” that he has identified and
relate them to our industry.
Value chain strategy takes on an entirely different
complexion than that of supply chain management. By
nature, “value” is a very dynamic word —it is constantly
changing – as value is always in the eyes of the beholder.
In other words, it means different things to different
people, or constituent groups, and at different times. As
such it requires a significantly greater degree of
nimbleness, cooperation between all of the various value
channel constituents, and attention being paid to it by
all members of the value chain.
Supply chain strategy or value chain strategy? It will be
important that organizations seriously consider the need
to start making the shift to a value chain strategy
business model from the more traditional supply chain
management model if it is their desire to optimise their
economic and brand position within the marketplace.
To put it another way, to achieve sustained growth,
companies should be concentrating their strategic and
tactical efforts on developing and executing strategies
that create value for all of the various channel
constituents rather than focusing on trying to develop
that rather elusive sustainable competitive advantage.
Because in today’s marketplace there is no such thing as
a truly sustainable competitive advantage.
Putting it in the context of the food service industry, the
biggest challenge facing today’s food service leaders is
finding new and innovative ways to create and sustain
value for the end-user / operator base and not pursuing
a strategy of trying to achieve a sustainable competitive
advantage.
Materials Management Review
Foresight should clearly articulate a company’s
expectation and beliefs regarding the short and longterm future of the industry in which it finds itself. In the
context of the food service industry, it should clearly
predict future consumer tastes and/or consumer
demand; operator issues and drivers; take into
consideration the use of current technologies and the
emergence of new technologies. It should also anticipate
the reaction of its competitive rivals. Foresight also
suggests those asset acquisitions, investments, and
strategic actions and alliances that will prove essential
in a company’s predicted future state of the industry in
which it is participating.
Today, there is a massive convergence of industry and
non-industry dynamics – new technologies; the
increased proliferation of existing technologies;
sustainability and all of the “peripherals” associated with
sustainability; the increased use of analytics based
management; changing consumer “demands,” changing
end-user / operator dynamics, to name but a few that
are, and will continue to shape the global food service
industry.
October 2015
15
So, where is the “natural” beginning of this “revolution”
of sorts? The “internet of things” and “big data” are
widely acknowledged to be the drivers. They will be the
hub of the technical developments for the foodservice
industry, as it will be for most industries. Ultimately, the
ability to share and interrogate data amongst all
constituent groups will lead to catering equipment that
is intuitive to use and hence become even more
important to operators. In fact, the data revolution that
society is “embarking” on is the contemporary equivalent
to the industrial revolution. Those who adopt will
significantly increase their chances of success. Those who
don’t, well …
Key to this development will be the needs of the food
service industry operators / end-users. This important
segment will be driven by the essential requirements of
the need to manage their businesses more closely. This
will include their cost base, carbon footprint, and
equipment related issues such as service scheduling.
Carbon may very well become the currency of the future
and a key business differentiator. The Kyoto agreement
was signed up to by the world’s leading nations. Europe’s
2030 and 2050 energy roadmaps show how this will
evolve with the development of European supply
networks. And localized smart metering at the unit level
will place significant focus on energy management and
carbon related issues. This will inevitably push the use
of technologies seen in other industries. In the context
of our industry, this will drive innovation and invention
with commercial equipment needing to match the
efficiency and operational demands of the operator
customer.
Today we are seeing legislation delivered through the
“Energy related Products” Directive (ErP) in the form of
Implementing Measures for commercial refrigeration,
dishwashers, ovens and hobs. Its purpose is to reduce
the energy use of equipment within these categories by
setting minimum energy performance standards which
must be achieved.
With the need to reduce the world’s use of resources,
carbon has become the lowest common denominator
for all the products that consumers and business use. In
business terms, there will be further reliance placed on
businesses to measure their carbon “bottom line” with
as much vigour and aggressiveness as their financial one.
The carbon foot-printing of all products will enable this.
The limited and more costly energy resources available
will mean further development of dynamic efficiency
products that can be remotely managed on-line by the
manufacture and/or by the operator. This will inevitably
dominate this sector’s development. Energy companies
may wish to be the supply partner for food service
equipment and as such proactively manage the energy
use of such equipment that it is, itself selling into the
marketplace. This creates yet another supply channel
(value channel) which would be based on equipment
efficiency and performance. Waste companies too will
be key influencers and actors in the further development
16
October 2015
of waste resource management from commercial kitchen
operations.
Given the aforementioned predicted scenarios, the
supply chain gaps that exist today will need to be
considered and eradicated, or at least reduced, in light
of the further consolidation and control that equipment
operators will need from their value chain. Studies* are
available that give an insight into the manufacturer,
consultant, dealer issues that exist.
Now, let’s get back to those “sights.” Insight is what
makes your company truly unique. If your competitors
have assets and capabilities that are very similar in nature
to yours, then they can certainly replicate and execute
your strategy, or more disturbing, even improve on it.
True insight is very company specific – it identifies those
assets that are rare, distinctive, and valuable to your
company. They are assets that companies can, and
should, highly leverage in the marketplace.
Cross-Sight is a company’s ability to identify those assets
that are uniquely valuable to a company and/or assets
with unique value that other companies are simply
unable to perceive, that could be aggressively deployed
by your organization. Think of Apple Computer and the
numerous technology acquisitions and product
developments that it has made over the years that have
made Apple products leaders within the consumer
electronics field.
All three of these “sights”: foresight, insight and cross
sight, when combined and used together, will allow
companies to create a continuous succession of valuecreating strategies. Foresight, specifically as it applies to
future demand, the use of new and existing technologies,
and industry and consumer trends will highlight those
areas in which companies should be searching for crosssight. Conversely, insight, regarding a company’s unique
assets, will help focus a company’s search for foresight
and cross-sight. And finally, cross-sight will help reveal
those valuable complimentary products and services,
which in turn will highlight the domain of foresight.
Value creation for food service industry customers
should focus squarely on their experiences and solutions
to their problems. Study after study in this industry has
shown that what operators are looking for from their
up-stream channel constituents – and very few, if any
companies are actually providing this – are well designed
experiences and solutions to their problems. If you do
this through the use of the “Sights” Model you will create
true and sustainable value for your customers.
Companies who do an excellent job of this put
themselves inside their customers’ businesses (in some
cases, literally) and then embrace the outcomes that they
(their customers) are trying to achieve. The great
Austrian born management guru, Peter Drucker, noted
that knowledge-driven innovations are “almost never
based on one factor but rather on the convergence of
several different kinds of knowledge.” The initial
Materials Management Review
knowledge that is “born” often results in a tremendous
amount of activity and excitement, but it is not until all
pieces of the knowledge puzzle have been “discovered”
and put into their appropriate places that true progress
can actually be achieved.
External forces and drivers —Data management teams
will be as essential to a business in 2015 as marketing,
sales, accounts, and operations teams are today. We are
seeing this start through Building Information Modeling
(BIM) which allows cloud based design using 3
dimensional rendered models to which data is tagged.
This will start to be a requirement in public sector
projects from 2016. By more efficient collaboration
between the designer and contractors, BIM will reduce
procurement costs by 20%.
Having a full inventory of the equipment in the building,
the day to day operation and performance will be
managed including the kitchen. The direct product
profitability of the equipment will be continually
evaluated and managed to ensure that its contributing
to the operator’s profits. This will also assist with the
management of food costs and the management of food
waste in an effort to contain overall costs.
The equipment companies that are closest to the
foodservice operator will have the opportunity to gather
and interpret data on the activity in sites and with the
consumer. Thus, the benefits of “big data” and the
“internet of things” will inevitably grow. Manufacturers
in the “new” value chain will have specialists within their
own business who can interpret, use the data, and turn
it into valuable, actionable information.
future the use of data in this way can provide a carbon
footprint for the equipment, the kitchen and the menu.
The availability and use of data in the proposed new
value chain will mean that equipment companies will
have the opportunity to develop new products which
will subsequently provide access to even more data
which they will need to help turn into actionable
information. This, when linked to the identification and
transfer of innovative ideas and technologies from other
industries, will complement a company’s own research
and development initiatives.
There is a profitable and rewarding outlook for those
companies who can sustain their strategies with ever
closer engagement with specifiers and foodservice
operators. There will be the inevitable and unforeseen
disruptive influences to business (as there always has
been) but an enhanced value proposition that is data
focused will be key to effective business development.
In summary, the transition from a supply chain to the
value chain will, and can only be achieved by those
companies that show the ability to engage and evolve
their management thinking and practices. Companies
that are able to demonstrate the ability to flex their
resources and actively engage all of their channel
constituents in a meaningful and transparent way will
become part of the value chain that is already beginning
to evolve.
This will provide competitive advantage at all levels in
the chain but especially with the foodservice operator’s
management team. This interdependence will provide a
greater understanding of operator and consumer habits,
and link this to the equipment’s operational needs. The
use of data in this way will increase the need for
transparency and trust between the equipment
manufacturers and the food service operators.
The equipment companies that have access to this data,
combined with the commitment to interrogate it
effectively, will have the edge over their competitors.
They will also have the opportunity to develop new
equipment and services based on detailed knowledge
from the marketplace; this equipment “black box” of
information will include utilities use, patterns of use,
optimum labour requirements and so on.
With all of this management information available it will
get to the point where the direct product profitability of
a menu item will be driven by the information on the
equipment used to prepare it; the utilities used in its
preparation and service; the consumables used, and the
labour required. If carbon is to be the currency of the
Materials Management Review
Source : www.fryettcg.com
October 2015
17
ACHIEVING COMPETITIVE SUPPLY CHAIN THROUGH BUSINESS
PROCESS RE-ENGINEERING: A CASE FROM DEVELOPING COUNTRY
ALES GROZNIK - FACULTY OF ECONOMICS
UNIVERSITY OF LJUBLJANA, SLOVENIA &
MARINKO MASLARIC - FACULTY OF TECHNICAL SCIENCES
UNIVERSITY OF NOVI SAD SERBIA
R
ecent business development in the light of
increased competition has caused many companies
to explore new drivers in order to remain
competitive. In this context, business process reengineering is the key to the successful implementation
of effective supply chain management which has become
a potentially valuable way of securing competitive
advantage. This paper presents the characteristics of
business re-engineering effort and how business process
modeling can be used for these purposes. Effective
supply chain management requires a high degree of
coordination and information sharing between partners
in the supply chain. The main idea was to show through
business process modeling how the business process reengineering of existing process needs to follow the
introduction of new information technologies into
organizations to improve information sharing. This paper
will show that only harmonized implementation of
information technology and business process reengineering will bring to the effective supply chain
management and full improvement of companies
competitiveness.
Key words: Supply chain management, business process
re-engineering, business process modeling,
competitiveness, case study.
INTRODUCTION : In the 1980s companies discovered
new manufacturing technologies and strategies that
allowed them to reduce costs and better compete in
different markets. In the last few years, however, it has
become clear that many companies have reduced
manufacturing costs as much as is practically possible.
Many of these companies are discovering that effective
supply chain management is the next step they need in
order to increase profit and market share (Simchi-Levi,
2003). In order to compete the effective management
of the supply chain is critical.
In today’s dynamic market, companies can no longer
exploit the traditional drivers in order to remain
competitive. The nature of competition has forever
changed, and more significant change will occur going
forward. Companies can no longer compete by designing,
manufacturing and selling a single product, and
manufacturing that product in advance to handle
anticipated demand. Customer expectations now include
both traditional activities associated with warehousing
18
October 2015
and distribution and new activities like technical support,
electronic order processing, and customized financial
services. Today’s sophisticated customers demand
products specifically tailored to their needs, when they
need them. Responsiveness to customer needs requires
a high degree of coordination and information sharing
between partners in a supply chain. Such a revolutionary
change in the supply chain requires new information
technology (IT) which will be employed to facilitate and
accelerate a new set of business processes. A new
business processes are gained by renovation of current
business practice in order to fully realise the benefits of
improved information quality and share. The simply use
of IT applications to improve information transfers
between supply chain members is not in itself enough
to realise the benefits of information sharing. The
business models of existing processes have to be changed
so as to facilitate the better use of the transferred
information (Trkman et al., 2007).
A supply chain is the set of business processes and
resources that transforms a product from raw materials
into finished goods and delivers those goods into the
hands of the customer. Supply chain management (SCM)
has been defined as “the management of upstream and
downstream relationship with suppliers, distributors and
customers to achieve greater customer value-added at
less total cost” (Wilding, 2003). The understanding and
practicing of SCM has become an essential prerequisite
for staying competitive in the global race and for
enhancing profitability. SCM need to be defined to
explicitly recognize the strategic nature of coordination
and information sharing between trading partners and
to explain the dual purpose of SCM: to improve the
performance of an individual organisation, and to
improve the performance of the whole supply chain. The
goal of SCM is to integrate both information and material
flows seamlessly across the supply chain as an effective
competitive weapon (Childhouse and Towill, 2003). In
this paper we present the business process reengineering (BPR) as a tool for effective supply chain
management, which is the principal determinant of the
ability to compete, and illustrate through a case study
how business process modelling (BPM) can help in
achieving successful improvements in sharing
information and the integration of supply chain
processes.
Materials Management Review
SUPPLY CHAIN MANAGEMENT : The objective of supply
chain management is to provide a high velocity flow of
high quality, relevant information that enables suppliers
to provide for the uninterrupted and precisely timed flow
o materials to customers. Supply chain excellence
requires standardized business pro-cesses supported by
a comprehensive data foundation, advanced information
technology support and highly capable personnel. It
needs to ensure that all supply chain practitioners
actions are directed at extracting maximum value.
Council of Logistics Management (CLM) defines SCM as
the systematic, strategic coordination of the traditional
business functions and tactics across these business
functions within a particular organisation and across
businesses within the supply chain for the purposes of
improving the long-term performance of the individual
organisations and the supply chain as a whole (CLM,
2000).
The concept of SCM has received increasing attention
from academicians, consultants, and business managers
alike (Tan et al., 2002; Feldmann and Miler, 2003; Groom
at al., 2000). Many organisations have begun to recognize
that SCM is the key to building sustainable competitive
edge for their products and/or services in an increasingly
crowded marketplace (Jones, 1998). SCM has been
considered as a critical strategy for effectively competing
in the 21 century. Successful companies recognizes that
with effective SCM they are not only be able to reduce
production cost by eliminating non-value added
activities, but also to create a new set of market
capabilities that are difficult to replicate. However,
imple-mentation of a successful supply chain may
encounter resisting forces that include lack of SCM
actor ’s support, inadequate measurement and
information systems, and organisational culture. Thus
successful supply chains can create value contingent on
their ability to overcome resisting forces through various
mechanisms (Migiro and Ambe, 2008), and BPR may be
one of them.
Information sharing : Companies historically have
considered information an asset to be hoarded and
protected, rather than shared. Sharing information with
suppliers, for examples, weakens negotiating positions.
Such mentality (silo mentality) also led to large vertically
integrated corpo-rations that allowed a company to work
closely with a few internal suppliers without having to
leave the boundaries of the company. A fundamental
shift in the ways in which companies compete is driving
a new way of thinking. Today, rather than companies
competing against companies, supply chains compete
against supply chains. Effective information sharing
means that you no longer have to own all the pieces of
the supply chain to effectively operate as a single entity.
And the ability to form the appropriate partnerships in
a timely manner and effectively operate as a single entity
allows some supply chains to thrive while others fail
(Sturim, 1999).
Information sharing is a key ingredient for any SCM
system (Moberg at al., 2002). Many researches have
Materials Management Review
suggested that the key to the seamless supply chain is
making available undistorted and up-to-date marketing
data at every node within the supply chain (Childhouse
and Towill, 2003, 1997). By taking the data available and
sharing it with other parties within the supply chain, an
organisation can speed up the in-formation flow in the
supply chain, improve the efficiency and effectiveness
of the supply chain, and respond to customer changing
needs quicker. Therefore, information sharing will bring
the organization competitive advantage in the long run.
The value of information sharing within a supply chain
has been extensively analysed by researches. Various
studies have used a simulation to evaluate the value of
information sharing in supply chains (Towill et al. 1992;
Bourland et al., 1996; Chen, 1998; Dejonckheere et al.,
2004; Ferguson and Ketzenberg, 2006). The existing
literature has in-vestigated the value of information
sharing as a consequence of implementing modern IT.
However, the formation of a business model and
utilization of information is also crucial. Information
should be readily available to all companies in supply
chains and the business processes should be structured
so as to allow the full use of this information (Trkman et
al., 2007). One of the objectives of this paper is to offer
insights into how the value of information sharing within
case study supply chain is affected when two different
models of business process re-engineering are applied.
Time and value adding activity along supply chain : The
majority of organisations have a traditional supply chain
strategy. In this strategy, each department has its own
workspace, and interactions usually occur intradepartmentally. It has been found that within a company
whose strategy is of such a traditional form much of the
work being executed is non-value-adding. By this, a
significant number of the tasks which are carried out
are performed more out of procedure than necessity
and, had they have been removed, effective output and
the general running of the company would not suffer.
On the contrary, in fact, the remove such tasks may be
beneficial to the company. Over a decade ago, a few
companies had been seen to be aware of this and
consequently restructured their supply chain to address
this matter.
In set up effective SCM, the key factors that need to be
focused on are building relationship and creating value.
When this is achieved companies become more agile,
responsive, and competitive. One of the most significant
things in understanding how to build effective SCM is
understands of the time dimension of the supply chain.
Within supply chains the need for improvement with
respect to time-based resource management is receiving
increasing recognition. Research indicates that it is not
uncommon for the time spent actually “adding value”
i.e. doing things that a customer is willing to pay for, to
be as little as one tenth of 1% (Wilding, 2003). Valueadding time is characterized using three criteria:
-
Whether the process is physically changing the
nature of the consumable item (that is the
customer’s product/service);
October 2015
19
-
Whether the change to the consumable item
produces something that the customer values or
cares about and may be willing to pay for;
-
Whether the process is right first time, and will not
have to be repeated in order to produce the desired
result that is valued by the customer.
Non-value adding activity can be split into three
categories: queuing time, rework time and time wasted
due to management decisions. A time-based process
map can be used to gain transparency of the value adding
and non-value adding activities. This map also enables
the user to gain transparency of the supply chain process.
Example of this time-based process map will be
presented in the case study section.
BUSINESS PROCESS RE-ENGINEERING : In re-engineering
theories, organisational hierarchies and representation
of organisations in terms of different functions are
replaced with a process oriented perspective.
Organisational structures are redesign by focusing on
business processes and their outcome. Business process
re-engineering (BPR) may be seen as an initiative of the
1990s, which was of interest to many companies. The
initial drive for re-engineering came from the desire to
maximize the benefits of the introduction of IT and its
potential for creating improved cross-functional
integration in companies (Davenport and Short, 1990).
Business redesign was also identified as an opportunity
for better IT integration both within a company and
across collaborating business units in a study in the late
1980s conducted at Massachusetts Institute of
Technology. The initiative was rapidly adopted and
extended by a number of consultancy companies and
“gurus” (Hammer, 1990).
In BPR, a business process is seen as a horizontal flow of
activities while most organizations are formed into
vertical functional groupings sometimes referred to in
the literature as “functional silos”. BPR by definition
radically departs from other popular business practices
like total quality management, lean production,
downsizing, or continuous improvement. BPR is based
on efficient use of IT, hence companies need to invest
large amount of money to achieve IT-enabled supply
chain. BPR is concerned with fundamentally rethinking
and redesigning business processes to obtain dramatic
and sustaining improvements in quality, cost, service,
lead times, outcomes, flexibility and innovation. In
support of this, technological change through the
implementation of simulation modeling is being used to
improve the efficiency and consequently is playing a
major role in BPR initiatives (Cheung and Bal, 1998).
BUSINESS PROCESS MODELLING : The business process
is a set of related activities which make some value by
transforming some inputs into valuable outputs. A
business process model is an abstraction of a business
that shows how business components are related to each
other and how they operate. Its ultimate purpose is to
provide a clear picture of the enterprise’s current state
20
October 2015
and to determine its vision for the future. Modelling a
complex business requires the application of multiple
views. Each view is a simplified description of a business
from a particular perspective or vantage point, covering
particular concerns and omitting entities not relevant
to this perspective. To describe a specific business view
process mapping is used. It consists of tools that enable
us to document, analyse, improve, streamline, and
redesign the way the company performs its work. Process
mapping provides a critical assessment of what really
happens inside a given company.
The aims of using BPM are: (1) to help the BPR team
obtain a holistic view of the process under study: (2) to
identify areas for improvement; (3) to visualize the
impacts and implications of new processes; and (4) to
describe the rules that underlie the business process
(Kovacic, 2007). The usual goal is to define two process
states: AS-IS and TO-BE. The AS-IS state defines how a
company’s work is currently being performed. The TOBE state defines the optimal performance level of “ASIS”. In other words, to streamline the existing process
and remove all rework, delays, and bottlenecks, there is
a need to achieve the TO-BE state. BPM and the
evaluation of different alternative scenarios (TO-BE
models) for improvement by simulation are usually the
driving factors of the business renovation process (BosiljVuskic et al., 2002). In the next section a detailed case
study is presented.
A CASE EXPERIENCE OF BUSINESS PROCESS REENGINEERING
The case study is a Serbian oil downstream company.
Serbia is an upper-middle income economy by the World
Bank, with a GDP at $10,792 per capita for 2008 (World
Bank, 2008). The point of the case study is to present
methodological approach applied in the company of the
one developing country which can be helpful for the
companies in other developing countries. Observed
company’s sales and distribution cover the full range of
petroleum products for the domestic market: petrol
stations, retail and industries. The company supply chain
comprises fuel depot-terminals (distribution centre),
petrol stations and final customers. The products are
distributed using tank tracks. The majority of deliveries
is accomplished with own trucks, and a small percentage
of these trucks is hired. The region for distribution is
northern Serbia. It is covered by two distribution centres
and many petrol stations at different locations. In line
with the aim of the paper only a fragment, namely the
procurement process, will be shown in the nest section.
A broader description of the case study can be found in
(Maslaric, 2008). In order to simulate this business
process and identify non-value adding activities, a
business process models was developed using the iGrafx
Process software. Information about the system was
collected from workers and interviews with managers
and engineers. An increasing number of details were
then added to the model and tested repeatedly, which
gradually contributed to the development of the
simulation model.
Materials Management Review
AS-IS model development : The next section covers the
modeling of the existing situation (AS-IS) in the
procurement process of the observed downstream
supply chain case study. The objective was to map out
in a structured way the distribution processes of the oil
company. The AS-IS model was initially designed so that
the personnel involved in the distribution processes
could review them, and after that the final model shown
in Figure 1 was developed.
The core objective of supply chains is to deliver the right
product at the right time, at the right price and safely. In
a highly competitive market, each aims to carry this out
more effectively, more efficiently and more profitably
than the competitors. Because both the prices and
quality of petrol in Europe are regulated, the main quality
indicator in oil supply chains is the number of stocksouts. The main cost drivers are therefore: number of
stock-outs, stock level at the petrol station and process
execution costs. Lead time is defined as the time between
the start (measurement of the stock level) and the end
(either the arrival at a petrol station or the decision not
to place an order) of the process (Trkman et al., 2007).
The main problems identified when analysing the AS-IS
model relate to the company’s performance according
to local optimisation instead of global optimisation. The
silo mentality is identified as a prime constraint in the
observed case study. Other problems are in inefficient
and costly information transfer mainly due to the
application of poor information technology. There is no
Materials Management Review
optimisation of the performance of the supply chain as
a whole. Purchasing, transport and shipping are all run
by people managing local, individual operations. They
have targets, incentives and local operational pressures.
Everything was being done at the level of the functional
silo despite the definition that local optimisation leads
to global deterioration. The full list of problems identified
on tactical and strategic level are identical to those in
(Trkman et al. 2007), so for greater detail see that paper.
Based on the mentioned problems, some improvements
are proposed. The main changes lie in improved
integration of whole parts of the supply chain and
centralized distribution process management.
TO-BE models development : The emphasis in BPR is
put on changing how information transfers are achieved.
A necessary, but no means sufficient condition for this
is to implement new IT which enable efficient and cheap
information transfer. Hence, IT support is not enough as
deep structural and organiza-tional changes are needed
to fully realise the potential benefits of applying new IT.
In this case study we develop two different propositions
for BPR (two TO-BE models) to show how the
implementation of new IT without BPR and the related
organizational changes does not mean the full
optimisation of supply chain performance. The first
renewed business model (TO-BE 1) is shown in Figure 2
and represent the case of implementing IT without
structural changes to business processes. In the TO-BE 1
model, there is no integrated and coordinated activity
through the supply chain.
October 2015
21
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October 2015
Materials Management Review
Inventory management at the petrol stations and
distribution centre is still not coordinated.
time (Figure 4). Decreasing non-value adding activities
imply increasing competitiveness of the supply chain.
The TO-BE 2 model assumes that the processes in the
whole downstream oil supply chain are full integrated
and the distribution centre takes responsibility for the
whole procurement process. The TO-BE 2 business model
is shown in Figure 3.
From this it is clear that this renovation project is
justifiable from the cost and time perspective. The results
in Table 1 and Figure 4 show that a full improvement
and effective supply chain management are only possible
in the case of implementing both IT which enables
efficient information sharing and the re-engineering of
business processes. The mere implementing of IT without
struc-tural and organizational changes in business
processes would not contribute to realising the full
benefit.
The main idea is that a new organizational unit within
the distribution centre takes on a strategic role in
co-ordinating inventory management and in providing
a sufficient inventory level at the petrol stations and
dis-tribution centre to fulfill the demand of the end
customer. It takes all the important decisions regarding
orders in order to realise this goal. Other changes
proposed in the TO-BE 2 model are the automatic
measurement of petrol levels at petrol stations and the
automatic transfer of such data to the central unit
responsible for petrol replenishment; the predicting of
future demand by using progressive tools; and using
operations research methods to optimize the
transportation paths and times. The role of IT in all of
these suggestions is crucial.
Measuring the effect of re-engineering : The effect of
the changes can be estimated through simulations. We
simulated business processes to investi-gate the impact
of BPR on the information sharing value, and valueadding activity, measured by lead times and process
execution costs. A three-month simulation of the AS-IS
and of both the TO-BE models was run. In the AS-IS
model a new transaction is generated daily (the checked
automatically every hour). The convincing results are
summarized in Table 1. The label “Yes” refers to those
transactions that lead to the order and delivery of petrol,
while the label “No” means a transaction where an order
was not made since the petrol level was sufficient.
Conclusion : This paper has investigated the potential
of using BPR for improving supply chain performances
and competive-ness. A definition of SCM, BPR and
relevant issues was presented, together with an overview
of the role of IT in supporting BPR. There followed a brief
overview of business process modeling methods, with a
case study providing an example of its use in oil
downstream supply chain in one developing country. The
results of the case study served to illustrate the potential
benefits of BPR for improving supply chain performances
and establishing competitive supply chain. Effective SCM
is critical advance for supply chain competitiveness. Not
surprisingly, IT sits at the heart of this advance. Specific
technologies may vary from company to company, but
the underlying principles remain the same: to create
seamless pipeline where product is handled minimally
but moves at maximum velocity. The results is a supply
chain that can be managed according to approach where
the customer order is a starting point, and works down
the rest of the chain are such to eliminating waste and
trimming processes that do not add value along on the
way.
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while the average lead time is cut by 62% in the case of
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shows that BPR will be contributed to the reduction of
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Materials Management Review
Council of Logistics Management (2000). What it’s all
about. Oak Brook: CUM.
Croom S, Romano P, Giannakis M (2000). Supply chain
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Moberg CR, Cutler BD, Gross A, Speh TW (2002).
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October 2015
Indian Institute of Materials Management
MISSION
To promote professional excellence in materials
management towards National Prosperity
through sustainable development.
OBJECTIVE
To secure a wider recognition of and promote
the importance of efficient materials management
in commercial and industrial undertakings.
To safe guard and elevate the professional status
of individuals engaged in materials management
faculty.
To constantly impart advanced professional
knowledge and thus improve the skill of the
person engaged in the materials management
function.
Propagate and promote among the members
strict adherence to IIMM code and ethics.
CODE OF ETHICS
To consider first the total interest of one’s
organisation in all transactions without impairing
the dignity and responsibility of one’s office :
To buy without prejudice, seeking to obtain the
maximum ultimate value for each rupee of
expenditure.
To subscribe and work for honesty and truth in
buying and selling; to denounce all forms and
manifestations of commercial bribery and to
eschew anti-social practices.
To accord a prompt and courteous reception so
far as conditions will permit, to all who call up on
legitimate business mission.
To respect one’s obligations and those of one’s
organisation consistent with good business
practices.
Materials Management Review
EASE OF DOING BUSINESS IN INDIA
— THE GROUND REALITIES ARE NOT TOO ROSY
SIDDHARTH SHARMA
I
ndia was once home to the most flourishing trading
business in the world. Thanks to the establishment of
the East India Company which was managed for all
practical purposes by the Indian traders. However, India
became a second fiddle with the dawn of independence
and the eventual exit of the British regime. And in the
post World War II era, the global focus shifted to
rehabilitation and restoration rather than regeneration
and production. This unfavorable climate forced India
to make do with a rather ‘closed’ economy and for years
nurturing its nascent industries and small businesses,
allowing them to survive and focus solely on domestic
consumption. But, the government of India followed this
economic policy a tad longer than it should have been.
Repressive Policies : A closed economic model has to be
a temporary phenomenon for any progressive nation
wishing to embark on the development path and make
its economic prowess a sustainable one. Over six decades
down the line, the repressive policies of the government
continue to haunt Indian businesses especially the
smaller and the medium ones which in effect drive the
economy. The World Bank group is an organization which
analyzes various aspects of doing business in 189
countries across the world. India has been a consistent
backbencher in its rankings and has shown little or
sometimes even negative signs of improvement over the
years.
As of 2015, India has fallen two places to the 142nd
position in the ease of doing business rankings. This rank
represents the ease of running an existing business in
the country. Starting a new business in India is a
gargantuan task altogether. Complex policies,
supererogatory regulations, executive corruption are
part of the barrage of problems that businesses have to
face.
The economic policies in this country have always been
decided on the political mandate, rather than on the
requirements of the economy. Positive and forward
looking economic decisions are often followed by
subsequent years of repressive taxation policies. As soon
as a business thinks of poking its head into the mess of
the Indian policy system, it’s forced back into the dark,
gloomy halls of indecision and laggardness.
The Indian governance framework is an endless rain of
regulations after regulations. When a company might
finally think that it has all the required documents in
place and can finally focus on running the business (the
thing that really matters above all else), some new hurdle
will surely pop up, leaving the owners frustrated and in
bad taste.
Got your shiny new approval certificate from the State
Authority? Thinking of holding client meetings and
pitching your idea to the board? Think again.
This was just the start. You need to go big now. The
central mess awaits you for its approval. Such restrictive
environment is highly overbearing on innovation. Set
aside innovation, one cannot even hope to achieve
optimal functionality.
Materials Management Review
But, business experts forecast fair days ahead. The NBA
government is on a positive footnote to change the
business sentiment across India. The government is
targeting a place in the Top 50 in the ease of doing
business ranking in the coming 5 years. High priority is
being given to reducing paperwork across the board in
all departments and all states. Currently, according to
estimates, businesses need 27 days in Delhi and 30 days
in Mumbai to set up. The government hopes to
significantly reduce these minimum figures and achieve
a more reliable and streamlined process of registration
for businesses. Several steps have been taken which have
gone largely unnoticed, but will greatly help the cause.
Several amendments have been made to the Companies
Act to accommodate the reform measures needed to
make it easy to start a business from scratch. ESIC
registration, filing for PAN and TAN and other allied
processes can be done through online portals. Earlier,
around seven documents were required for trading in
exports and ten for imports. However, according to the
Directorate General of Foreign Trade, only three
documents will be required henceforth. Several other
flagship programs are underway by the government to
invite investors and MNCs to a supposedly reformed
India.
As of August 2015, the Prime Minister has been on
Twenty Six foreign trips and has been constantly
advertising the ‘Make in India’ initiative. The strong
points that enable him to put this view forward are the
changes being carried out right here at home. Make in
India cannot hope to succeed without improving the
investment sentiment and the ease of governance.
While there is tremendous upheaval happening in
government offices as we speak, yet one problem still
remains unchecked and undeterred-Rampant
Corruption. None of Mr. Modi’s policies include measures
to control and curb official corruption once and for all.
And that may be the reason that Make in India has not
taken off yet as it should have.
But, the road to progress has some speed bumps, which
can be overcome easily if one continues to keep moving
forward. Abolishing repressive taxation policies, red tape
and most importantly corruption, is the way of moving
forward. After a long time, a government shows promise
if not in much, but its intent to do well. But what will
really matter down the line is the mettle of the
government to flex its muscles in face of parliamentary
logjams and economic inaction in response to volatile
petty politics. The path is set, the map has been laid, all
that this government needs to do is put the pedal to the
metal. All this will enable and empower the immense
entrepreneurial talent that our country holds and give
way to innovation, which will in return lead India on its
path to Global success. The future is quite bright, if the
government and the people choose to believe in it. All
said and done, it’s time India sees its growing poverty
club of strong 600 teeming millions deflating a bit.
Source : SME World
October 2015
25
RE-BIDDING ALLOWED FOR PRIVATE CARGO TERMINALS
STRUGGLING WITH RATE AND OTHER ISSUES THAT HAVE HURT PERFORMANCE,
THESE PORTS WILL BE ALLOWED TO RESTRUCTURE
P. MANOJ
[email protected]
P
rivate cargo-handling facilities at Union
government-owned ports, struggling with rate and
other operational issues that have hurt their
performance, will be allowed to restructure and better
their project terms by offering their terminals for rebidding to discover revenue share price afresh.
At least three such private facilities have or are being put
to re-tendering. Private cargo terminals at Union
government-owned ports are selected on the basis of
revenue share—the entity willing to share the most from
its annual revenue will win the project.
Chettinad International Coal Terminal Pvt. Ltd and JSW
Infrastructure Ltd have applied on a tender issued by
Kamarajar Port Ltd, the entity that runs the port at Ennore
near Chennai in Tamil Nadu, to examine whether its plan
to convert an idle, privately funded iron ore terminal into
a coal-handling facility can fetch better revenue share
for the port than the one agreed to by the original
developer.
The re-tendering was approved by the shipping ministry
based on a proposal cleared by the board of Kamarajar
Port on a request from the iron ore terminal operator.
The joint venture had built the new terminal, which can
load 12 million tonnes (mt) of iron ore a year, at an
investment of over Rs.500 crore.
Once Sical is allowed to handle coal instead of iron ore,
the contract terms would be on par with an 8 mt capacity
coal terminal run by Chettinad International Coal Terminal
at Kamarajar Port since January 2011, according to the
proposal cleared by Kamarajar Port to alter the cargo
profile of the terminal. Sical has agreed to match the
revenue share of 52.524% quoted by Chettinad
International Coal Terminal.
Sical had offered a revenue share of 51.6% to win the
iron ore deal. “This (52.524%) was the highest revenue
share received by the port through a competitive bidding
process for that type of cargo (coal),” a spokesman for
Kamarajar Port said.
“The revenue share price of 52.524% was discovered ten
years ago. Since then, many things have changed. We
want to discover the current revenue share price for a 12
mt capacity coal-loading terminal. The best and most
transparent way to discover the revenue share price is
through a tender or auction,” the spokesman said.
Kandla Port Trust, India’s biggest state-owned cargo
handler by volumes, will re-tender two multi-purpose
cargo berths set up with private funds in 2013. The board
of trustees of Kandla Port Trust had agreed to re-tender
the private berths after the firms running these facilities
asked for a restructuring of their projects to overcome
some rate hurdles hampering operations.
Kamarajar Port has decided to set 52.524% as the reserve
revenue share price for the re-tender.
RAS Infraport Pvt. Ltd and JRE Infra Pvt. Ltd separately
run the two dry-bulk cargo berths at Kandla Port on a
30-year contract.
If the highest revenue share quoted in the tender is more
than 52.524%, Sical will have a so-called right of first
refusal to match the highest bid and take the contract on
fresh terms. If it declines to exercise this right, the contract
will be awarded to the highest bidder. In such an event,
the highest bidder will have to pay an upfront amount to
be given to Sical as compensation or closure payment
for the money it invested in setting up the iron ore
terminal.
“Any improvement/betterment in project terms will be
subject to re-tendering to discover the new revenue share
price in a changed scenario,” a spokesman for the ministry
said. The financial and commercial benefit accruing to
an existing operator through a change in project terms
should be shared with the government-owned port, the
ministry said.
The iron ore terminal at Kamarajar Port built by Sical Iron
Ore Terminals Ltd, a joint venture of Sical Logistics Ltd,
MMTC Ltd and L&T Infrastructure Development Projects
Ltd, has been idle ever since it came up in 2011, due to a
bar on iron ore exports.
26
October 2015
This is being done to protect the current revenue share
earned by the government-owned port. Price bids below
the reserve price set by the government will not be
accepted.
The closure payment will have to be paid by the new
entity to the existing operator as he would be getting
the benefit of assets developed by somebody else. These
modalities will apply to all private cargo terminals put to
re-tender as part of a restructuring exercise, the ministry
spokesman added.
Source : www.livemint.com, 29th August 2015
Materials Management Review
DIGITAL INDIA : AN OVERVIEW
NARENDRA MODI
HON’BLE PRIME MINISTER OF INDIA
W
ith the launch of Digital India programme, the
Government has taken a big step forward to
transform the country into a digitally
empowered knowledge economy. Digital India
programme is an umbrella programme for transforming
India into a digitally empowered society.The Prime
Minister MrModi has unveiled various schemes worth
over Rs 1 lakh Crore like Digital Locker, e-eduction, ehealth, e-sign and national scholarship portal. BharatNet
in 11 states and Next Generation Network (NGN), are
also a part of Digital India campaign. The programme
includes projects that aim to ensure that government
services are available to citizens electronically and people
get benefit of the latest information and communication
technology. The Ministry of Communications and
Information Technology is the nodal agency to
implement the programme.
Vision of Digital India
The vision of Digital India has basically 3 key areas:
• Digital Infrastructure as a Utility to Every Citizen
• Governance & Services on Demand
• Digital Empowerment of Citizens
A) Vision Area 1: Infrastructure as a Utility to Every
Citizen
• High speed internet as a core utility
• Cradle to grave digital identity-unique, lifelong,
online, and authenticate
• Mobile phone & Bank account enabling
participation in digital & financial space
• Easy access to a Common Service Centre
• Shareable private space on a public cloud
• Safe and secure Cyber-space
B) Vision Area 2: Governance & Services on Demand
Seamlessly integrated across departments or
jurisdictions
• Services available in real time from online &mobile
platform
• All citizen entitlements to be available on the cloud
• Services digitally transformed for improving Ease of
Doing Business
• Making financial transactions electronic & cashless
• Leveraging GIS for decision support systems &
development
C. Vision Area 3: Digital Empowerment of Citizens
Universal Digital Literacy
• Universally accessible digital resources
• All documents/ certificates to be available on cloud
• Availability of digital resources / services in Indian
languages
• Collaborative digital platforms for participative
governance
• Portability of all entitlements through cloud
Materials Management Review
Pillars of Digital India:
The major pillars of Digital India are as follows:
• Broadband Highways
• Universal Access to Phones
• Public Internet Access Programme
• e-Governance - Reforming government through
Technology
• e-Kranti - Electronic delivery of services
• Information for All
• Electronics Manufacturing -Target NET ZERO Imports
• IT for Jobs
• Early Harvest Programmes
Pillar 1. Broadband Highways : There is proposal to cover
250,000 Gram Panchayats in rural areas by the end of
2016 with capital investment of Rs. 32,000 Crores in a
phase wise manner. Similarly, there is provision of Virtual
Network Operators for service delivery and mandate
communication infrastructure in new urban
development and buildings in urban areas by end of
March 2017 with capital investment of Rs 15,686 Crores.
All databases and information to be electronic, not
manual. Public Grievance Redressal - using IT to
automate, respond, analyse data to identify and resolve
persistent problems - largely process improvements.
This would be implemented across government - critical
for transformation.
Pillar 2: Universal Access to Phones : India is extensively
covered under mobiles and telephones.The remaining
42,300 villages are likely to be covered by 2018 with
capital cost of Rs. 16,000 Crores.
Pillar 3: Public Internet Access Programme : It is
proposed to strengthen the functioning of Common
Services Centresand Post Offices. The CSCs will be made
viable, multifunctional end-points for service delivery.
Similarly, the Post Offices will become Multi-Service
Centres. There is proposal to cover 2,50,000 villages (now
130,000) by March 2017 with Cost of Rs 4750 Crores and
1,50,000 Post Offices in next 2 Years.
Pillar 4: e-Governance - Reforming government through
Technology : Government Business Process Reengineering using IT to improve transactions ( Form
Simplification, reduction, Online applications and
tracking, Interface between departments, Use of online
repositories e.g. school certificates, voter ID cards, etc.,
Integration of services and platforms - UIDAI, Payment
Gateway, Mobile Platform, EDI ). All databases and
information to be electronic, not manual. Public
Grievance Redressal - using IT to automate, respond,
analyse data to identify and resolve persistent problems
- largely process improvements. This would be
implemented across government - critical for
transformation.
Pillar 5: e-Kranti : E-Kranti is an integral part of digital
October 2015
27
India programme with a vision of ‘transforming egovernance for transforming governance’. The mission
of e-kranti is ‘to ensure a government wide
transformation by delivering all government services
electronically to the citizens through integrated and
interoperable system via multiple modes while ensuring
efficiency, transparency and reliability of such services
at affordable costs’.
The main objectives of e-kranti are:
•
•
•
•
•
•
To redefine NeGP with transformational and
outcome oriented e-governance initiatives.
To enhance the portfolio of citizen centric services.
To ensure optimum uses of core information and
communication technology.
To promote rapid replication and integration of egovernance integration.
To leverage emerging technologies
To make use of more agile implementation models.
Pillar 6: Information for All : This will include online
Hosting of Information & documents, open data, 2-way
communication between citizens and government,
Online messaging to citizens on special occasions/
programs, etc.
Pillar 7: Electronics Manufacturing -Target NET ZERO
Imports : The most focused areas will be Big Ticket Items,
FABS, Fab-less design, Set top boxes, VSATs, Mobiles,
Consumers Medical Electronics, Smart Energy meters,
Smart cards, micro-ATMs, Incubators, clusters, Skill
development and Government procurement. There are
many ongoing programs which will be fine-tuned.
Pillar8:ITforJobs : Train people in smaller towns & villages
for IT sector jobs, IT/ITES in NE, Train Service Delivery
Agents to run viable businesses delivering IT services
Telecom service providers to train rural workforce to
cater to their own needs.
India is spread in vast areas. Many people remain
un-employed, hence providing adequate job
opportunities is major concern. Digital India has the
potential of becoming an important instrument of job
creation. “Digital India has opportunities for applications
in local languages as well. But, the important
requirement is contractual clauses that are insisted by
the government. The Government should be in line with
contractual clauses insisted by the foreign corporation.
So, it is imperative that the government of India comes
out with reasonably attractive and competitive set of
clauses for large IT companies to be keen to work with
them. The large IT companies in India can make
government’s Digital India initiative a success if things
like price, making payments on time, accepting software
on time, not changing requirements midstream and of
course in some cases not insisting on corruption are
properly tackled.
Pillar 9: Early Harvest Programmes : Early harvest
programmes would include Government e-Greetings,
platform for messages, Biometric attendance, Wi-fi in
all Universities, Secure email within government,
Standardize government , Public wifi hotspots, School
eBooks, SMS based weather information, disaster alerts,
National Portal for Lost & Found children, etc.
Digital India by 2019 : The Overall Costs of Digital India
- Rs 100,000 Crores in ongoing schemes (only DeitY, DOT
& not incl. those in other line Ministries) and Rs 13,000
28
October 2015
Cr for new schemes & activities.
impact of Digital India by 2019
• Broadband in 2.5 lakh villages, universal phone
connectivity
• Net Zero Imports by 2020
• 400,000 Public Internet Access Points
• Wi-fi in 2.5 lakh schools, all universities; Public wi-fi
hotspots for citizens
• Digital Inclusion: 1.7 Crtrained for IT, Telecom and
Electronics
• Jobs Job creation: Direct 1.7 Cr. and Indirect at least
8.5 Cr.
• e-Governance & e-Services: Across government
• India to be leader in IT use in services - health,
education, banking
• Digitally empowered citizens - public cloud, internet
access.
Action Points of Digital India
• The government has proposed that all ministries /
departments / states would fully leverage the
common and support ICT infrastructure (e.g. Gl
Cloud, National / State Data Centres, Mobile Sewa,
Statewide Area Networks, Common Services Centres
and electronic services gateways).
• Deity would also evolve standards and policy
guidelines provide technical and holding supports
and undertake capacity building, R&D, etc.
• The existing / ongoing MMPs would also be suitably
revamp to align them with the principles of e-kranti.
• States would be given flexibility to identify for
inclusion / additional state specific projects which
are relevant for their socio-economic needs.
• e-governance would be promoted through a
centralized initiative to the extent necessary, to
ensure citizen service orientation, interoperability
of various e-governance, applications and optimal
utilization of ICT infrastructure while adopting a
decentralized implementation model.
• Public private partnership would be preferred
wherever feasible to implement government
projects with additional management and strategic
control.
• Adoption of aadhar based ID would be promoted
to facilitate identification and delivery of benefits.
Challenges & Possibilities : Each Pillar/program has own
its own limitations. The first challenge is qualified human
resource. The National Informatics Centre, one of India’s
major S&T; organizations promoting informatics led
development has very limited technically qualified
people. The financial Resource Issues are the other
constrains for taking up such mission. There is need to
have an Organisation at apex level to coordinate various
departments concerned for easy and smooth
functioning. Some kind of Leadership and supportsare
needed for its success.
e-governance would be promoted through a
centralized initiative to the extent necessary, to
ensure citizen service orientation, interoperability
of various e-governance, applications and optimal
utilization of lCT infrastructure while adopting a
decentralized implementation model.
Source : Parivahan Pragati
Materials Management Review
WTO UPDATE
THE REVISED WTO AGREEMENT ON
GOVERNMENT PROCUREMENT
DIRECTOR-GENERAL ROBERTO AZEVÊDO
overnment procurement is hugely significant, not
only in economic terms, but also because of the
impact it has on both trade and development. It
is central in providing the infrastructure that enables
trade to happen in the first place, including roads, railway
systems, ports and airports. And it has a very direct effect
on people’s lives, through the provision of important
public services, such as health, education, defence and
public security.
also elevate the Agreement’s significance as a tool for
shaping good procurement practices internationally.
With all of these elements in mind, it is abundantly clear
that the GPA is a very important agreement in the context
of everything we do here in Geneva. It helps to open
markets and facilitate trade in the government
procurement sector. And the GPA also extends the reach
of some of the key principles of the WTO rulebook.
This summer, Montenegro and New Zealand deposited
their instruments of accession.
G
Through its provisions, the Agreement itself promotes
transparency and good governance. It supports good
practices in government procurement. And it serves as
an important benchmark for national policy reforms.
These achievements clearly represent significant and
sustained effort from the architects of the GPA.
Renegotiating the text and coverage of the revised GPA
took more than a decade before it was finalised in 2012,
ready to come into force last year. This was a major
achievement for the participants of the Agreement, for
the WTO, and for the Committee on Government
Procurement.
In fact, the Agreement has been used as a template for
elements of other regional and bilateral agreements that
we have seen negotiated recently, extending the scope
of the Agreement’s principles well beyond its formal
membership.
There is a sense of momentum behind the GPA.
And just yesterday, the terms of accession of Moldova
were approved by the Government Procurement
Committee. So I’d like to take this opportunity to extend
my warmest congratulations to Moldova for this
achievement.
And it doesn’t stop there:
Australia launched its bid for accession earlier this
year.
The accession of Ukraine is expected to be concluded
before the end of the year.
Tajikistan’s accession is in the pipeline.
And I think there is more to come in the future, as
work continues on the accessions of China and of
other WTO members.
The revisions that were adopted increased the
Agreement’s flexibility. They successfully adapted it to
accommodate the widespread use of e-procurement
tools. In addition, the renegotiation increased the value
of the market access commitments under the Agreement
by 80-100 billion dollars annually.
This is no simple task. It will require a lot more time and
effort. But it certainly holds the potential to spread the
benefits of the Agreement even more widely. Now,
reaching new agreements is a very important part of our
work at the WTO.
Today, the GPA parties have opened procurement
activities worth an estimated 1.7 trillion dollars annually
to international competition. Clearly this is a very
significant figure, representing the opening up of huge
economic opportunities.
Bali showed that we could do that — and we have
another opportunity to deliver more at our ministerial
conference in Nairobi this December. But at the same
time, we must also recognise that there is great value in
implementing the agreements we have already reached
— and expanding their scope and membership.
But perhaps the clearest sign of the relevance of the GPA
— and its importance to the global economy — is its
growing membership. In 1996 the Agreement covered
a total of 22 WTO members. Today it covers 45. A
significant part of this expansion is a result of the growth
in the membership of the EU, but it also reflects the
accession to the GPA of many other WTO members
including Armenia, Iceland, Korea and Singapore — to
name just a few. Every accession has added to the
overall value of procurement covered by the GPA. They
Materials Management Review
This is why we are putting so much focus on
implementing the agreements made in Bali — including
the Trade Facilitation Agreement. And it is also why the
evolution of agreements like the GPA and the
Information Technology Agreement are also critical.
Taking these agreements forward strengthens the trading
system and bolsters opportunities for economic growth
and development.
October 2015
29
With this in mind, I encourage more WTO members —
especially developing and emerging economies — to look
at the benefits of GPA accession. The revised Agreement
brings about some important factors that may address
some of their own specific concerns.
It now includes improved transitional measures for
developing countries. It brings further transparency to
procurement practices, which is an important sign of
commitment to good governance.
In turn, this can have positive effects for efficiency and
also as a means to attract foreign direct investment. And
I think we can do even more to demonstrate the GPA’s
importance.
For example, I think it would be useful to accumulate
and disseminate more evidence of the value that the
GPA could hold for interested WTO members. And I think
we need to generate better statistical information to
back such evidence. I am glad to see that this is on the
agenda of this symposium and of the WTO Committee
on Government Procurement itself.
Events like this can make a welcome contribution in
shedding light on these — and other — matters, and in
pointing towards possible ways forward.
lively and constructive debates in the coming days.
So let me conclude now with one final thought.
When people think of the WTO, they think of big trade
rounds — and of course, major trade rounds are very
important. But the trading system has never been limited
to that.
Sectoral approaches have provided an important avenue
for groups of members to tackle specific issues of
importance to them.
In this context the successful revision of the GPA, and its
timely application, were major accomplishments for the
parties and their economies. But they were also
important steps in the history of global trade
cooperation, and therefore in the history of the WTO.
Source: WTO Website
CUSTOM EXCHANGE RATES
CUSTOM EXCHANGE RATES (All rates per unit)
w.e.f. 23rd September 2015
So this is what these two days are all about, and I am
glad to see such interest and commitment coming from
the participants in this room.
CURRENCY
As we look to the discussions ahead, let me just share
some further important questions, which stand out to
me:
Bahraini Dinar
1.
How can we better integrate small and mediumsized enterprises in procurement activities, while
respecting the GPA’s core principles?
IMPORT
EXPORT
48.10
46.85
181.70
171.20
Canadian Dollar
Danish Kroner
50.80
10.20
49.70
9.95
EURO
76.10
74.25
8.65
8.50
226.80
214.25
Australian Dollar
How can we better apply the concept of
sustainability in government procurement?
Hong Kong Dollar
3.
How can we deal with Public-Private Partnerships
and other emerging procurement arrangements?
Newzealand Dollar
42.90
41.60
4.
How can we boost the role of the GPA as a tool of
good governance?
Norwegian Kroner
Pound Sterling
8.25
103.25
8.05
101.00
5.
How can we improve coherence across the work of
the different international organizations that deal
with government procurement?
47.95
47.00
South African Rand
5.10
4.80
So there are many, many other topics where interesting
and useful insights can arise — these are just some
examples.
South Arabian Riyal
18.25
17.25
8.10
7.90
But I am pleased to see that the points that I have
mentioned will be discussed in the course of the
symposium.
Swiss Franc
UAE Dirham
69.30
18.65
67.50
17.60
US Dollar
67.05
66.00
Japanese Yen (100 Units)
55.95
54.75
Kenya Shilling (100 Units) 64.75
61.20
2.
I am also glad that there will be some positive
developments to report in terms of inter-organizational
relationships and cooperation.
With such a diverse audience — including academics and
experts, non-governmental organizations, GPA parties
and other WTO members — I am sure there will be some
30
October 2015
Kuwaiti Dinar
Singapore Dollar
Swedish Kroner
Source : www.dailyshippingtimes.com/customexchange-rates.php
Materials Management Review
BIS NEWS
THE BUREAU OF INDIAN STANDARDS
BILL, 2015
TANVI DESHPANDE
[email protected]
•
The Bureau of Indian Standards Bill, 2015 was
introduced in Lok Sabha by Mr. Ram Vilas Paswan,
Minister of Consumer Affairs, Food and Public
Distribution on August 7, 2015. The Bill replaces
the Bureau of Indian Standards Act, 1986. The Act
establishes a Bureau for the purpose of
standardization, marking and certification of
articles and processes. The Bill seeks to broaden its
ambit, and allow the central government to make
it mandatory for certain notified goods, articles,
processes, etc, to carry the standard mark.
•
Ambit of the Bureau of Indian Standards: Under
the 1986 Act, standardization, marking and
certification processes applied to certain articles
and processes. The Bill includes goods, services and
systems. A good, service, article, process and system
have been defined in the Bill.
•
Establishment of the Bureau of Indian Standards:
The Bureau of Indian Standards will be a national
body which will formulate, implement and certify
certain standards of quality for goods, services,
articles, processes and systems. The Bureau will
constitute technical committees of experts for the
purpose of formulating such standards. The Bill
constitutes a Governing Council which would be
responsible to look at the general superintendence,
direction and management of the Bureau.
•
Certification of goods, services, articles, etc: The
Bureau would be a licensing authority for quality
standards. A person may apply to the Bureau for a
license to use a standard mark, or a certificate of
conformity, depending on the good, article, process,
etc. A license or certificate of conformity indicates
that the item conforms to the Indian standard as
set by the Bureau. The Bureau will establish and
maintain testing laboratories for quality assurance
and conformity assessment of goods, articles,
services, etc.
•
Certification of precious metals: A hallmark will be
used to certify precious metal articles including
silver, gold, platinum, and palladium or their alloys.
A hallmark indicates a proportionate content of the
precious metal in the article, as per the Indian
Materials Management Review
standard. Such articles will be sold in certified sales
outlets.
•
Mandatory certification of certain goods: The Bill
allows the central government to notify certain
goods, articles, etc, which will need to compulsorily
carry a standard mark. Such goods or articles will
be notified by the government if it thinks them to
be necessary for: (i) public interest or for the
protection of human, animal or plant health, (ii)
safety of the environment, (iii) prevention of unfair
trade practices, or (iv) national security.
•
Recall of goods, services, articles etc: The Bureau
may recall a good or article which is already out for
sale or supply. This will be done if the Bureau is
convinced that the good or article does not conform
to the requirement of a particular standard.
•
Penalties: The penalty for improper use of the
Indian standard mark will be a fine of up to five
lakh rupees. The Bill also prescribes penalties for:
(i) the improper use of the standard mark by testing
and marking centres, and (ii) manufacturing or
selling goods and articles which do not carry a
standard mark and have been mandated to do so,
among others. The Bill provides for compounding
of offences punishable with fine except when a
person has committed such an offence for the
second time or if such an offence committed by him
has been compounded earlier.
•
Offences by companies: When a company commits
an offence under the Bill, the persons responsible
for or in charge of the company will be presumed
to be guilty irrespective of whether the offence was
committed without their knowledge, consent or
connivance.
•
Appeals: An appeal against an order regarding the
granting of a license or certificate of conformity, or
compounding of offences, may be made to the
Director General of the Bureau. A further appeal
against the order of the Director General may then
be made to the central government.
Source : www.prsindia.org
October 2015
31
PERSONALIZED RETAIL EXPERIENCE: THE ANSWER BY THE
BRICK-AND-MORTAR STORES
PREYAS JAIN, MILAN MODI
[email protected], [email protected]
KJ SOMAIYA INSTITUTE OF MANAGEMENT STUDIES & RESEARCH (SIMSR), MUMBAI
T
he marketing by the ecommerce giants in India like
“Aurdikhao” and “nahinkharida, achakiya”,
(Amazon and Flipkart respectively) was a huge
success in India. This was one of the ways to pull the
customers to buy products from their site and lure them
by discounted deals. The deep discount model adopted
by them may not be a long term solution to increase
profits, but it surely increased volume of products sold.
Figure 1: www.accenture.com
With online shopping through e-commerce sites gaining
traction among the consumers in today’s digital world,
the Brick and Mortar stores are finding it extremely
difficult to hold their consumer base. Consumers nowa-days have a plethora of options for the prices as well
as selections. The reason they turn up to the Brick and
Mortar stores is the personalized experience that they
leverage.
e-commerce: Uncovering Innovation’ study reveals that
the digital commerce market in India has grown steadily
from $4.4 billion in 2010 to $13.6 billion in 2014 and
likely to touch $16 billion by the end of 2015 on the
back of growing internet population and increased online
shoppers. It said online travel accounts for nearly 61%
of e-commerce business while e-tailing contributes
about 29%(1). This may be a matter of concern for the etailers. The study also states that the e-commerce
companies are concentrating their efforts on increasing
the penetration of their mobile apps for higher growth,
adding that big players in this space claim to have more
than 50% of their revenue coming from mobile apps.
Future scope of market: E-Commerce is becoming a part
and parcel of today’s lifestyle. In India e-commerce has
grown by a whopping 34% (CAGR) since 2009 to touch
16.4 billion USD in 2014(2) and is expected to be in the
range of 22 billion USD in 2015. With the increasing use
of smartphones, tablets and internet broadband and 3G,
a strong consumer base is being formed which is likely
to increase further. This, combined with a larger number
of homegrown eTail companies with their innovative
business models has led to a robust eTail market in India
rearing to expand at high speed.
There is a twist: The post liberalization (Liberalization,
Privatization and Globalization) generation of India which
is tech savvy is using e-commerce as a ‘need’. As per the
analysis of PwC around 75% of the e-commerce users in
India are in the age group of 15-34(2). However, a major
Penetration of e-commerce in India: E-commerce has
chunk of people still prefer to visit a shop, touch and
emerged as India’s new sun-rise industry and is set to
feel the product, bargain with the shopkeeper before
cross business worth $16 billion by the end of 2015, a
finally purchasing it and thus get the feeling of “Customer
joint study by ASSOCHAM-Deloitte said(1).The ‘Future of
is King”.
Table 1: Pros and Cons of the Brick & Mortar stores:
Attribute
Pros
Brick and Mortar
· Quick delivery
· Advice from Sales staff
· Tangible experience with product
before purchase.
Cons
·
·
Lower selection
Higher overhead costs.
Successful examples
·
·
·
·
Groceries/Apples
Jewelry stores
Apparel
Cars
32
October 2015
Online retail
· Lower overhead cost
· Greater selection
·
·
·
·
·
·
·
·
·
User reviews
Customization possibilities
Less regional market inefficiencies.
Shipping cost
Shipping time
Less benefit from Sales staff
Amazon
Flipkart
Snapdeal
Materials Management Review
Personalized retail experience: Shopkeepers have to be
innovative so that they donot lose their customers to
the e- commerce websites. For this they first need to
understand the diverse outlook of the customers visiting
their stores, an illustration of which is shown below.
The 8 step approaches to build as well as retain the
relationship with a customer.
Figure 2 www.medallionretail.com
The above image shows the choices made by different
people while shopping. It is important that the retailer
is able to meet the needs of few, if not all, types of
customers. The success of the retailing business largely
depends on this. In order to nudge the consumers to
buy in-store, offline retailers are using tactics like
knowledgeable sales staff, in-store pick-up of online
orders, in-store Wi-Fi, same employee for same customer
etc.
Personalized retail experience is more than just knowing
the name of your regular customer, though it is the first
step. Although ecommerce websites have the data of
every shopper that visits them, retailers are not behind.
Lets take the example of Tesco Clubcard.
They have a unique way of analyzing the data. They look
at the lifestyle behind shopping habits and respond to
changes. For instance, when a shopper first buys nappies,
they send coupons for toys – but surprisingly, also for
beer.
Their research has shown that new fathers tend to buy
more beer at the supermarket as they’re going to the
pub less. And it works. Tesco achieved coupon
redemption rates ranging from 8- 14% – far higher that
the grocery industry average.(7)
46% of shoppers will buy more from a retailer that
personalizes the shopping experience. (3)
75%of retailers believe that developing a more
engaging in-store customer experience will be critical
to their business. (4)
7.5XCustomers who shop exclusively in-store visit an
average of 7.5 times a year vs. those who shop online
and browse a retailer an average of 3 times a year. (5)
80% of customers prefer to be acknowledged in-store
rather than via digital channels. (6)
Materials Management Review
Figure 3 www.medallionretail.com
Consumers today want something that’s unique and
reflects their personality. Retailers understand this and
we are seeing more companies offer personalized
products.
There is plenty of data available but the trick lies in
efficiently using it. Used intelligently, this insight will not
only shape what products retailers stock but also how
they market and sell them. There are some more
examples which show that personalized retail experience
has been successful.
Raymond Linen suits, airtel’s one family, one plan,
pantaloons loyalty points, big bazaars festive discounts
and many more convey the message that in spite of
having an online player, they have been fairly successful.
The iron is hot and competition between e-tailing and
retailing is at its peak, it’s up to the players to make the
most of it.
References:
1.
www.timesofindia.com
2.
www.pwc.in
3.
eMarketer Study
4.
Motorola Solutions Survey
5.
Kurt Salmon
6.
RIS News and Cognizant Survey
7.
www.k3retail.com
October 2015
33
INTERNATIONAL NEWS
M.K.BHARDWAJ
CHIEF EDITOR, MMR
[email protected]
Increasing Logistics Complexity Requires
Greater Optimization
Today’s supply chains are so complex and change so rapidly
that optimization efforts often are overtaken by events,
says Mike Comstock of Grand Canal Solutions. Planning
needs to become much more dynamic, with analytics
adapted to make optimization a continuous process.
The difficulty with supply-chain optimization until now has
been that access to manufacturing and carrier data has not
translated into a good overall view of the interrelationship
of all different data sources, Comstock says. “These data
sources are so disparate it has been very difficult to see
the big picture. By using analytics, we are able to look at
the total cost to serve, end to end. Then as we model
different approaches and different service levels, we can
see how that cost to serve goes up or down. I think more
and more companies have to be looking at this because
the markets are changing so rapidly,” he says.
Maintaining stable operations while continually optimizing
is a balancing act that companies will need to master,
Comstock says. “At any point along the way, no company
will ever be fully optimized; there always will be areas of
sub-optimization. But the idea is to look at the net effect of
current operations compared with a reliable model of what
could be, then to actually change and invest in an alternative
approach with better payback– not only in money, but in
service level and quality,” he says.
Tool Strategically Plots Quickest Route to
Market
When the Great Recession hit, an Irish dairy and
nutritionals provider realized its manual method for
managing transportation and delivery was woefully
inadequate. The problem was solved when it automated
routing and scheduling.
There’s no getting around it: there’s great value in a
software program that gets your delivery truck to its
destination in the quickest and most cost-efficient manner.
But route optimization means much more than just
enabling fast deliveries. It can really help a company pare
unnecessary services, routes and vehicles. After partnering
with a routing and scheduling software provider, Glanbia,
the global dairy business and nutritionals group, eliminated
106,000 kilometers a year from its operations in the
Republic of Ireland. That’s more than 99,000 miles, which
adds up to a lot of fuel and wear and tear on vehicles.
Paragon had long experience providing route planning and
scheduling solutions for grocery stores, food and beverage,
retail and field service companies. It set to work right away
on Glanbia’s operations.
The drastic reduction in mileage racked up by Glanbia
delivery vehicles didn’t occur right away, Conway says.
Paragon had to master the intricacies of Glanbia’s business
34
October 2015
and its routing needs – not only the stores and end
customers it needed to serve but taking into consideration
such mundane things as time lost at rail crossings, school
opening times, traffic congestion, and most importantly,
the interaction between SAP and Paragon. Once the
complete routing picture was formed, paring of routes could
begin. Conway estimates that the system has reduced the
annual number of routes by 10 percent. In addition, vehicle
utilization was improved by 15 percent.
“The system is not just a simple routing tool or transport
management tool,” he says. “We use it for strategic planning
as well. We can create scenarios of how our network could
and should look if we were to make changes to the business
model. There’s a lot of strategic value to it.”
Getting to Win/Win in 3PL Customer
Relationships
The goal for 3PLs always is to negotiate a win/win contract
with existing and new customers, says Mike Bautch of
Universal. He offers insights and examples on how to
create win/win relationships that keep improving over the
years.
If both companies negotiating a logistics outsourcing
agreement are committed to improving the supply chain,
the result will almost certainly be win/win, says Bautch,
who is president of Universal Value Added Services, a
division of Universal Truckload Services. “That means there
will be, on both sides, empowerment, open
communications, transparency, financial benefit and
continuous improvement.”
One pathway to win/win is what Bautch calls an “eight-wall
approach.” This is when a logistic provider spends time
within the customer’s four walls to learn their business and
processes, and brings that knowledge back to its own four
walls for execution, making it an eight-wall solution.
“Because so much that we do in our work impacts the
customer’s production and inventory, a solution can’t be
contained only within our four walls,” he says. Bautch notes
that one customer improved its inventory accuracy from a
percentile in the low 60s to the high 90s using the eightwall approach.
Technology Trends in the Warehouse
Warehouse operations can be the throttle or the
chokehold of a supply chain, a truth that has become more
evident with the growth of e-commerce, says Robert
Carver Jr., IBS director of sales. Carver discusses how
technology is helping companies address challenges and
opportunities in today’s warehouse.
The growth in e-commerce presents big challenges to
warehouse operators, says Carver. “The significant growth
in the number of SKUs forces expansion of warehouse
footprints, of the number of pick faces, and of the number,
frequency and diversity of shipments - all of which create
major challenges.”
Materials Management Review
Meeting these challenges cannot be done with conventional
warehouses of the past, he says. “Companies today have
to treat all inventory as a single entity that is pickable for
any type of customer or situation. That is a true omni
approach.” This may mean more goods-to-man warehouse
designs, where devices bring product to the picker, Carver
says. This is not a new technology, but it typically has been
used in situations like spare-parts warehouses rather than
for active picking of customer orders, Carver notes. “But as
volumes increase, we can’t continue to just throw labor
and space at the problem without increasing overhead costs
substantially, so a lot of companies are looking at highdensity storage facilities that can bring goods to the picker.
With these systems, a single operator can pick multiple
thousands of SKUs instead of having hundreds of
operators.”
At conventional, smaller or older facilities, conventional RFbased terminals may be replaced with cellular coverage to
streamline operations, with operators using smartphones
or tablets to bring information out to the floor, he says.
“More and more facilities that had not been candidates for
material handling equipment are putting in things like case
conveyors and some type of sortation process,” Carver says.
“Material handling has come down into lower tier
companies at a much greater speed than many of us
expected, which will really help streamline processes.” “The
warehouse can be a throttle or a chokehold on your supply
chain,” Carver says. “If the warehouse is not running
efficiently and not tracking inventory correctly, customer
service can’t promise that orders will be filled, which means
unhappy customers. How the warehouse is operating has
a huge impact both up and down stream.”
Recovery in Dry Bulk Shipping Market Thought
to Be Unlikely Before 2017
The dry bulk shipping market will remain in recession due
to contracting demand for iron ore and coal, and any
recovery is not expected until 2017, according to the Dry
Bulk Forecaster report published by global shipping
consultancy Drewry.
Falling demand and oversupply has severely impacted
commodity values, with iron ore and coal prices in virtual
free fall. The dry bulk shipping sector has been a casualty
of these developments with resultant impacts on vessel
earnings. However, there is some optimism for small vessel
employment, as the onset of El Nino weather conditions
will increase demand in the long-haul grain trade. The
depressed state of the dry bulk sector has led to doubts
about the future of many shipowners and their ability to
withstand prevailing market conditions. Drewry believes
that the future of a number of yards and owners are at risk
and further details of this analysis are available in the
report. Given the uncertain economic outlook, Drewry’s
forecast takes account of two possible scenarios. The most
likely is the base case scenario, which assumes that demand
grows at a faster pace than supply in 2015 and beyond,
helping dry bulk shipping recover by 2017. However, the
less likely low-case scenario takes a more pessimistic view
of future Chinese iron ore and Indian coking coal import
demand.
“In the low-case scenario, the dry bulk trade would contract
in 2015 with only modest growth in subsequent years,
creating a depressed market and making it difficult for many
shipowners to survive the unfavourable market conditions,”
said Rahul Sharan, Drewry’s lead analyst for dry bulk.
Weak demand has enforced some control in vessel supply,
through high levels of demolitions as well as delayed or
canceled deliveries. Drewry expects slippage rates to remain
high through the remainder of this year and next which
will keep a lid on any fleet growth in 2015.
“We expect a marginal improvement in earnings from the
third quarter but this will be too small to have any
noticeable effect on industry income. We anticipate a
recovery from 2017 driven by rising demand from
developing Asian economies,” said Sharan.
UPCOMING EVENTS
IFPSM Asia Pacific Meeting 27 November 2015 Taipei,
Taiwan
IFPSM World Summit 2017 Taiwan
IFPSM Board Meeeting 9 March 2016 Vancouver,
Canada
COMMODITY INDEX
Commodities
Days’s Index
Prev. Index
Week Ago
Month Ago
Index
2190.9
2191.5
2173.2
2198.7
Bullion
4163.4
4156.0
4054.4
4254.8
Cement
1944.8
1944.8
1944.8
1728.3
Chemicals
Edible Oil
1930.2
1319.8
1993.3
1313.6
1993.3
1289.8
1930.2
1285.1
Foodgrains
2103.0
2109.9
2095.6
2139.3
Fuel
1956.2
1956.2
1956.2
2039.6
Indl Metals
1515.0
1515.0
1489.5
1438.5
Other Agricom
1789.8
1786.5
1769.0
1733.2
Plastics
1707.5
1707.5
1700.7
1807.8
Source: ETIG Database dated 23rd September, 2015
Materials Management Review
October 2015
35
Materials Management Review
October 2015
55
Indian Institute of Materials Management,
Vadodara Branch
NATCOM 2015
NATCOM 2015 will be hoisted by IIMM, Vadodara branch on 27th & 28th November, 2015 at HOTEL SURYA PALACE,
Sayajigunj, Vadodara with Theme ‘REVOLUTIONARY SUPPLY CHAIN STRATEGIES FOR SUSTAINABLE, COMPETITIVE
ADVANTAGE’. The Honourable Minister, Shri SAURABHBHAI PATEL has consented to grace the Event as Chief
Guest. It is generally accepted that sustainable development calls for the convergence between three pillars of
Economic Development, Social Equity & Environmental Protection. Sustainable Development is a visionary
development paradigm & currently Governments, Businesses & Civil Society have accepted sustainable
development as a guiding principle & made progress on sustainable development matrix. The Effective Supply
Chain can help in achieving these objectives. The Theme of NATCOM 2015 - ‘Revolutionary Supply Chain Strategies
For Sustainable, Competitive Advantage’ is a step for initiating strategies to benefit all stake holders. This would
provide new vision for competitive advantage to industries including MSME Sector which has seen an exponential
growth over last decade. NATCOM 2015 would provide information on innovative strategies & skills deployed in
volatile market conditions & networking opportunities for all forward looking CEOs, CFOs, COOs, CPOs & SCM
Professionals including Business Developers & Management Executives from Manufacturing & Service Industry.
The session & Topics are planned in a manner that help participants derive maximum benefits from outcome of
deliberations. Aligning with NATCOM 2015 Theme, the proposed Technical Session Topics are listed below –
Cost Reduction Techniques in SCM
Role of Information System & Technology in SCM
Optimisation of Supplier Base & Inventories
Value Chain Concept in SCM
Way Forward for Logistics Sector-Opportunities & Challenges
Drivers of SCM
Make in India (India as Emerging Global Supply Hub & Challenges associated with it
Memorable Souvenir: To commemorate the National Event, it has been planned to publish the Souvenir containing
articles related to topics by eminent professionals from Corporates, PSUs, Academics & Industries. Also, the
messages of our honourable PM, Shri Narendrabhai Modi; CM, Smt. Anandiben Patel; Industries Minister, Shri
Saurabhbhai Patel alongwith the messages of our National President, Shri Lalbhai Patel; Vadoodara Branch
Chairman, Shri Malay Mazumdar & other dignitaries would be incorporated.
Sponsorship Opportunities: The wide range of sponsorship opportunities available to highlight the Organisation’s
Products/Services would spread the message about their Quality, CSR activites, etc. and provide them with
maximum exposure to earn better return on investments.
DELEGATE REGISTRATION:
Delegate Fees for Non IIMM Members Rs. 8,000/- plus applicable Service Tax
Delegate Fees for IIMM Members Rs. 7,000/- plus applicable Service Tax
Delegate Fees for IIMM Students Rs. 3,000/- plus applicable Service Tax
Delegate Fees for accompanying Spouse Rs. 3,000/- plus applicable Service Tax
Foreign Delegate $ 300 + applicable Charges & Accompanying Spouse $ 100 + applicable Charges
Spot Registration Fees Rs. 8,000/- plus applicable Service Tax
Special Discount : Early Bird Concession of 10% till 30th Sept.’15 and
Group Discount of 5% for 5 or more Delegates & 10% for 10 or more Delegates.
Note :
1.
All Payments to be made by Demand Draft / At Par Cheque in favour of ‘INDIAN INSTITUTE OF MATERIALS
MANAGEMENT NATCOM 2015 A/C’ payable at Vadodara. For Outstation Cheques, pl. add Rs.50/- as Bank
Charges. All Correspondence to be done with IIMM Vadodara branch.
2.
Our Service Tax No. is AAAAI0056PST001 & PAN No. is AAAAI0056P.
CONTACT US: Though, we have initiated E-Mail Id ([email protected])
exclusively for the Event, you are requested to communicate with –
INDIAN INSTITUTE OF MATERIALS MANAGEMENT : 2nd Floor, Vishal Chambers, 34, Vishwas Colony,
B/h Alkapuri Shopping Center, Alkapuri, Vadodara-390007 Ph.:0265- 2359060 / 2353410
Email: [email protected] / [email protected] Website: www.iimm.org / www.iimmvadodara.org
56
October 2015
Materials Management Review
EXECUTIVE HEAL
TH
HEALTH
WHY WE ARE SO MUCH KNEED DOWN BY OUR KNEES!
DR. DEEPAK GOYAL
ARTHROSCOPY, CARTILAGE & SPORTS KNEE SURGEON
SAUMYA HEALTHCARE, AHMEDABAD, [email protected]
T
here have been an ever increasing incidence of knee joint
pains, osteoarthritis and knee joint replacement surgeries
in the last two decades. Historically Indians are a hard
working population and our forefathers never had such big
issue with their knees as present generation has. Ever wonder,
what has brought this change? Why are we put down to the
knees by our knees, itself!
Human knee joints are indeed a complex joint that is made up
of four bones, two discs, four major ligaments, cartilage
covering the bone ends & over 15 muscles and tendons
crossing the knee joint. Humans are the only species that are
blessed to stand and walk upright; thanks to our knee joints
and other changes in our body during evolution. We can run,
dance, play, work and do lots of other activities that are unique
to humans. But all these unique activities are possible due to
complex but excellent structure of the knee joint that is gifted
to humans by nature. Unfortunately, present generation has
abused this marvelous gift instead of making a good use of it;
the very much reason for increased knee joint pains in the
present generation.
There are various reasons that can damage our knee joints;
on some reasons we don’t have any control, some requires
preventive steps from us and other reasons require timely
treatment to stop its progression. These reasons are listed
below.
1. With increasing age, the wear and tear increases. As we
grow old, our body also does. Some changes develop in
the knee joints also; and practicality speaking we don’t
have any control on age. However with increasing age,
we should take more care of our knee joints. One should
realize that an ageing joint is not only ageing but is also
amenable to even minor injuries. Hence, knee joint
requires special care and some sort of maintenance
therapy that can be in the form of mild physiotherapy or
rehabilitation. A regular yearly visit to the doctor and
checking health of the knee joints is not a bad idea. This
will allow us to know if something is brewing up inside
and we will be able to take care of the knees in time.
2. Modern lifestyle is the biggest killer of the knee joints.
India has fast adopted western lifestyle but selectively.
We adopted all the luxuries but left the physical work out
that westerners do regularly. Long back, we also stopped
the hard work that our ancestors used to do. In total, we
selected the better of the two worlds and that has
resulted in ever increasing obesity and resultant knee joint
damage at an early age.
3. The high level of competition in India and extra-long hours
of working put undue stresses on our body. We just forget
to take care of our body in the zeal of achieving better
than others, but end up losing ourselves in that zeal. The
knees take the biggest burnt since we sit for long hours
in an odd posture in front of computer or in meeting and
then run around to meet the targets with an overweight
body; both puts extra load on the knee joints.
4. Unguided hard-work or training is again a culprit. Many
players and professionals practice their discipline without
a proper coach or a guide. Sometimes the coach or the
guide himself is not properly trained or qualified. Playing
or working under half trained guide or without a guide
puts our knees at a great risk. A well trained coach is
always aware what type of body movements can lead to
what type of injury and what to do in case of any injury
to the knee, on field and after the field. Same is the
scenario for well trained guides in different professions
who have good knowledge of protective gears and ways
to avoid injuries.
5. Working under stress is not good either. It does not allow
Materials Management Review
your body to relax or breathe in between the hard work
loads. Cooling down with a relaxed mind is necessary for
self healing of small injuries.
6. Even though we take all the precautions, still injuries can
happen. Sometimes the injuries are minor and sometimes
major. But we must understand that all the injuries are
different from each other. We should not compare Mr
X’s injury with Mr Y’s injury and start treating ourselves.
We shouldn’t also compare treatment and recovery of
Mr X with Mr Y. Best thing is to go to the doctor who can
only identify the injury and the best treatment for it.
Nothing can replace a good detailed history that is
revealed by patient to doctor and a good clinical
examination done by patient. As there are four bones,
four major ligaments, two discs and a whole cartilage
covering in the knee joint; it is important to identify the
exact tissue that is injured. X-rays are good to diagnose
only bony injuries and not soft tissue injuries. Ligaments,
discs and cartilage require a good quality MRI for proper
diagnosis. Family physicians and fracture surgeons are
generally not trained to diagnose soft tissue injuries like
ligament injuries, cartilage injuries or disc (meniscus)
injuries. An orthopedic surgeon with special interest in
knee injuries, an arthroscopy surgeon or a sports surgeon
are the doctors who are trained for diagnosis of such
injuries.
7. The relationship between thigh bone and leg bone keep
on changing from birth till old age. Generally, a child has
some amount of bow legs when he is born and gradually
these bowing decreased and legs become straight.
Throughout the adolescence till end of the middle age,
legs remain straight and then again some bowing starts.
This is a usual physiological pattern. However some has
different bony configuration like knock knees, excessive
bow legs or deformities in the knees not consistent with
their age. Such abnormal bone relation puts unequal
distribution of forces inside the knee joint and resultant
early wear and tear. Such deformities must be brought
into notice of an orthopedic surgeon. It may not require
anything but just the observation or sometimes it may
require some sort of correction. The relation between
knee cap (patella) and the thigh bone (femur) is equally
important.
8. There are some diseases on which humans have no
control, but these diseases can damage the knee joint
e.g. rheumatoid arthritis, gout, pigmented villonodular
synovitis etc. One must identify such diseases and start
and early treatment to prevent the knee joints. Enough
precautions and exercises should also be done to keep
knees strong and fit. The problem starts when we decide
not to follow the medical advice, since modern medicine
doesn’t have guaranteed cure for some of these diseases.
We start following other methods that too have no
guarantee. While modern medicine is aware of its
limitations there alternative means is not; and that can
cause uncontrolled flare up of the existing disease.
While reason no. 1 is not under control, reasons no 2-5 are
very much under control. However all these reasons from 1-5
require some sort of preventive steps from our side. Reasons
no 6- 8 can occur to anyone and are difficult to predict or
prevent. However these reasons require definitive treatment
under proper guidance.
A combination of awareness, prevention and extra care in
timely treatment can help knee joints getting worn out before
time. The knees are for standing up and not for kneeing down.
We must do our best to save the knee joints, a greatest gift to
mankind by nature.
October 2015
57
IIMM HEADQUARTERS AND BRANCHES
IIMM NHQ : Plot No. 102 & 104, Sector-15, Instl. Area, CBD Belapur, Navi Mumbai-400614. Tel.: 27561754 / 2756 5831, Fax : 022-27571022
E-mail NHQ : [email protected]
AHMEDABAD
MR. H K GUPTA, Chairman
Indian Institute of Materials Management
C/o. SPR International, B-34, Circle B,
S G Highway, B/H. Pakwan dinning Hall,
Bodakdev, Ahmedabad-380015
Tel:(079)26872567
Email: [email protected]
AURANGABAD
MR. JITESH GUPTA, Chairman
Indian Institute of Materials Management
IMTR, Plot # 4, MIDC Railway Stn.,
Nr. Bajaj Bhavan & Near Tiwari Lowns,
Aurangabad – 431005
Tel: (0240) 2331039
Email - [email protected]
BANGALORE
MR. D. SUBRAMANI, Chairman
Indian Institute of Materials Management
# 304, A-Wing, III Floor, Mittal Tower # 6,
M G Road, Bangalore – 560001
Tel: (080) 25327251/52
Email : [email protected]
BILASPUR
Mr. MANOJ PANDEY, Chairman
Indian Institute of Materials Management
C/o. Gen. Mgr (MM), South Eastern Coalfields
Ltd, Seepat Road, Bilaspur-495006 (CG) Tel:
(07752) 241087/75014
Email : [email protected]
[email protected]
BHILAI
Mr. D A LOTHE, Chairman
Indian Institute of Materials Management
Room # 314, 3rd Floor, Ispat Bhawan,
Bhilai Steel Plant, Bhilai-490001
Tel: 2892948, 2222170 Fax: 0788-2223491
Email : [email protected]
[email protected]
BURNPUR
MR. PRAFULLA KUMAR JHA, Chairman
Indian Institute of Materials Management
Matls. Dept. New Matls Bldg., IISCO,
Bunpur Works, Burnpur – 713325 (West
Bengal) Email : [email protected]
BOKARO
Mr. M P SAHU, Chairman
Indian Institute of Materials Management
C/o. Pur. Dept. Ispat Bhavan, Bokaro Steel
City -827001, Bokaro (Jharkhand)
Tel: (06542) 240263/247042
Email : [email protected]/
[email protected]
BHARUCH
MR. DILIP GOSAI, Chairman
Indian Institute of Materials Management 303,
Vinay Complex, Near Dudhdhara Dairy, Old
NH Highway # 8, Collage Road, Bharuch Tel:
02641-283223
Email: [email protected]
BHOPAL
Dr.SAMEER SHARMA, Chairman
Indian Institute of Materials Management 4/9B, Saket Nagar, Bhopal. M.P. 462024 Ph.07552452802, 8085856437
Email: [email protected]
CHANDIGARH
MR. DHARMBIR SINGH LONGIA, Chairman
Indian Institute of Materials Management SCO
19-B, Swastik Vihar, Mansa Devi Complex,
Sector-5, Panchkula – 134109
Tel: (0172) 2556646 / 4654205
Email: [email protected]
CHENNAI
MR. T A B BARATHI, Chairman
Indian Institute of Materials Management
4th Floor, Chateau D’Ampa, 110 (New # 37)
Nelson Manickam Road, Aminjikarai,
Chennai – 600029
Tel: (044) 23742195/23742750 Email:
[email protected]
COCHIN
Mr. G MURALIGOPAL, Chairman
Indian Institute of Materials Management
GCDA Shopping Complex, Gandhi Nagar,
Cochin -682020 - Kerala
Tel: (0484) 2203487/2317687
Email : [email protected]
58
October 2015
E-mail Edu. Wing : [email protected],
DHANBAD
Mr. A K CHAUDHARY, Chairman
Indian Institute of Materials Management
O/o GM(MM), B.C.C.L, Koyla Bhawan, Koyla
Nagar, Dhanbad - 826005, (Jharkhand)
Tel: 0326-2230181
Email: [email protected]
DURGAPUR
MR. SHANTANU CHAKRAVARTY, Chairman
Indian Institute of Materials Management
C/o. Executive Director (MM), Steel Authority
of India Ltd, Durgapur Steel Plant, Durgapur713203 Tel: (0343) 2574374
Email: [email protected]
DEHRADUN
MR. RAJENDER RAJ, Chairman
Indian Institute of Materials Management,
C/o. Central Stores, ONGC,
Kaula Garg Road, Dehradun – 248195
Tel: 0135-2793111 / 9410397734
Email: [email protected]
GOA
MR. SUNIL AJGOANKAR, Chairman
Indian Institute of Materials Management,
S-6 & S-7, 2nd Floor, Vasco Citicentre,
Opp: Canara Bank, Swantantra Path,
Vasco-da-Gama, Goa – 403802
GANDHIDHAM
MR. S. N. AGRAWAL, Chairman
Indian Institute of Materials Management,
Shop # 14, Gokul Park, Plot # 356, Ward-12B,
Tagore Road, Gandhidham -370201 Kutch
(Guj) Tel: (02836) 231295/231711
Email: [email protected]
GREATER NOIDA
Mr. AGEET KUMAR, Chairman
Indian Institute of Materials Management,
B-193, Swarn Nagari, Opp. J P golf Course,
Greater Noida Mob: 09818943894
Email: [email protected]
HYDERABAD
MR. P SOMASEKHARA RAO, Chairman
Indian Institute of Materials Management, Flat
# 105, Sun City Apts, Block A, 8-3-483,
Yellareddyguda, Hyderabad – 500 073
Tel: 040-23744252, 23754252
Email: [email protected]
HUBLI
MR. O P KHARE, Chairman
Indian Institute of Materials Management,
Karnataka Chamber of Commerce & Industry
Building, 1st Floor, Jayachamaraj Nagar,
Nr. Nehru Ground, Hubli- 580020
Tel: 0836-2264699/ 09972703336/
9591372196 Email: [email protected],
HOSUR
Chairman
Indian Institute of Materials Management,
Mr. J H Shastri, GM-C/M, Wendt India Ltd,
# 69/70, SIPCOT Industrial Complex,
Hosur – 635126 (TN)
Email : [email protected]_murugappa.com
INDORE
Mr. Sandeep Tare - Chairman
Indian Institute of Materials Management,
Govindram Seksaria Institute of Mgt. &
Research, MR-10, Scheme No.54, Vijay
Nagar, Indore - 10(MP) - 452010
Email: [email protected]
JAMSHEDPUR
Mr. K M BHARDWAJ, Chairman
Indian Institute of Materials Management,
Room # 6, Russi Modi Centre for, Excellence,
Jubilee Road, Jamshedpur – 831001
Tel: (0657) 2224670/2223530
Email: [email protected]
JAIPUR
MR. PUSHOTTAM KHANDELWAL, Chairman
Indian Institute of Materials Management,
C/o. Mr. Prushattam Khandelwal, 48,
Mohan Nagar, Gopalpura Bypass,
Jaipur- 302018 Tel: 09799299157
Email: [email protected]
JABALPUR BRANCH
IIMM, C/o. Head of FOHOM
CMM Jabalpur, Sita Pahari, Ridge Road
Jabalpur – 482001 (M.P)
Email: [email protected]
KANPUR
MR. RAVI KANT GUPTA, Chairman
Indian Institute of Materials Management,
C/o. IGM Computer Academy, Mallick
Complex, Nr. Rama Devi Churaha, G T Road,
Kanpur-208007 Tel: (0512) 2401291
Email: [email protected]
Website : www.iimm.org
KGF
Mr. B SUNEEL KUMAR, Chairman
Indian Institute of Materials Management,
Dy. Gen. Mgr (MM), EM Division,
BEML Ltd, KGF.- 563115
Tel: 08153-279314, 09880994684
Email: [email protected],
[email protected]
PUNE
MR. MOHAN V NAIR, Chairman
Indian Institute of Materials Management,
Pratibha Towers, Plot # 22, Old Pune Mumbai
Rd. CTS # 15/2, Above TVS Showroom,
Wakdewadi, Shivajinagar, Pune - 411003
Tel: 020-65000854
Email: [email protected]
KOLKATA
MR. SUKALYAN SARKAR, Chairman
Indian Institute of Materials Management,
8/B, Short Street, Kolkata – 700017
Tel: (033) 22876971/22834963 Email:
[email protected]
[email protected]
RAE BARELI
MR. VINOD KUMAR PANDEY, Chairman
Indian Institute of Materials Management,
497, Near CMO Office, Jail Road,
Rae Bareli -229001 Tel: 9451077744
Email: [email protected]
LUCKNOW
MR. PRASANT SAXENA, Chairman
Indian Institute of Materials Management, 75,
8th Floor, Lekh Raj Homes, Faizabad Road,
Lucknow (UP) – 226016
Cell: 9335211389/ 9044741159
Email: [email protected]
RANCHI
MR. R D MAHTO, Chairman
Indian Institute of Materials Management,
Gen Manager (MM) Office,
Central Coalfiields Ltd.,
Darbhanga House, Ranchi-834001
Tel: (0651) 2360716/2360198
Email: [email protected]
[email protected]
LUDHIANA
Mr. JITENDRA PAL SINGH, Chairman
Indian Institute of Materials Management,
C/o Weltech Equipments & Infrastucture,
Plot No. 3, Giaspura Road,
Near P.S.E.B. Sub Station,
Dhandari Kalan, Ludhiana-141003
Email: [email protected]
MUMBAI
MR.ARUN BANAVALI, Chairman
Indian Institute of Materials Management
2-A Arihant Bldg., Above Bhandari Co-op Bank
Ltd, Goregaon (East),
Mumbai – 400063
Tel: (022) 26863376/26864528/26855645-46
Email: [email protected]
[email protected]
MUNDRA
Mr. NITIN G PATIL
C/o. M/s Kundan Industrial Products &
Services Shop # 6, Golden Arcade Zero
Point,Adani Mundra Road, Mundra- 370421.
Mob: 09687660068
Email: [email protected]
[email protected]
MYSORE
Mr. MUKUND, Chairman
Indian Institute of Materials Management,
Anubhav Udyog, K-64, Hootagalli Ind. Area,
Mysore – 570018 (Karnataka)
Tel: 0821- 4282124
Email: [email protected]
MANGALORE
Mr. T. RAMAKRISHNA, Chairman
Indian Institute of Materials Management,
C/o. Mr. T Ramakrishna, GM (Matls.),
Kuthethar (PO), Katipalla (Via),
Mangalore-575030, DK Dist, (Karnataka State)
Tel: 0824-2882202 Fax: 0824-2271239
Email: [email protected]
NASHIK
MR. LAXMIKANT DASHPUTE, Chairman
Indian Institute of Materials Management, 1,
Parag Bldg, Patel Lane # 4, College Road,
Nashik – 422005 Tel: (0253) 2314206
Email: [email protected] [email protected]
NAGPUR
MR. B S NAGASHETTI, Chairman
Indian Institute of Materials Management, 404,
Suryakiran Comml. Complex-1,
Bajaj Nagar, Nr VNIT Gate, Nagpur - 440010
Tel: (0712) 2229446
Email: [email protected]
NALCONAGAR
Mr. DIBAKAR SWAIN, Chairman
Indian Institute of Materials Management, Qtr.
# C-352, Nalco Township,
Nalco Nagar -759145, Dist: Angul, Orissa
Mobile: 09437081126
Email: [email protected]
NEW DELHI
MR. M K MITTAL, Chairman
Indian Institute of Materials Management,
U-135, VIKAS MARG, SHAKARPUR,
(Near Laxmi Nagar Metro Station,
Gate No.-3)Delhi – 110092,
Tel-011-22464969
Email: [email protected]
ROURKELA
MR. JITEN KUMAR MOHANTY, Chairman
Indian Institute of Materials Management,
C/o. Rourkela Steel Plant, 6th Floor,
Admin. Bldg. Rourkela -769011
Tel: (0661) 2445528
Email: [email protected]
[email protected]
SURAT
MR. S. U. CHAUDHARI, Chairman
Indian Institute of Materials Management,
C/o. Addl. Gen. Mgr (Matls.),
Krishak Bharati Co Ltd,
PO: Kribhaco Nagar, Surat -15
Tel: (0261) 2802682
Email: [email protected]
TRIVANDRUM
MR. K G NAIR, Chairman
Indian Institute of Materials Management,
TC-9/1447, 2nd Floor, Future House,
Temple Road, Sasthamangalam,
Thiruvanathapuram – 695010
Tel: (0471) 2724952
Email: [email protected]
UDAIPUR
MR. P S TALEARA, Chairman
Indian Institute of Materials Management,
2nd Floor, Above Manohar Furniture, Ashwini
Marg, Udaipur – 313001
Tel: (0294) 2411969/2421530
Email: [email protected]
VAPI
MR. JAYANT MARDIKAR, Chairman
Indian Institute of Materials Management,
223, 2nd Floor, C B Desai Chambers,
Koparali Road, GIDC, Vapi-396195
Tel: 9099047350
Email: [email protected]
V V NAGAR
MR. BHARATBHAI PATEL, Chairman
Indian Institute of Materials Management,
C/o. Unique Forgings (I) Pvt Ltd ., 601, GIDC
Estate, Phase – IV, Vithal Udyognagar, Dist:
Anand, State: Guj – 388121
Tel: 02692-233517/236343 Email:
[email protected]
VADODARA
MR. MALAY C MAZUMDAR, Chairman
Indian Institute of Materials Management,
Vishal Chambers, 2nd Floor, 34, Vishwas
Colony, Alkapuri, Vadodara- 390007
Tel: 0265-2359060
Email: [email protected]
[email protected]
VISAKHAPATNAM
MR. A. RAMA KRISHNA, Chairman
Indian Institute of Materials Management,
#45-35-63, Flat # 401, Om Vigneshwar Apts.,
Jagannadhapuram, Akkayyapalem,
Visakhapatnam- 530016 Mob- 9849482991
Email: [email protected]
[email protected]
VARANASI
Mr. P N TIWARI, Chairman
C-30/38 A, Maldihya, Varanasi (UP)- 220001
Mob: 09794861723
Email: [email protected]
Materials Management Review

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