December 2023
We create avenues for the industry to gain more insights into emerging trends, industry-specific problems of national importance, and global best practices in logistics & supply chain management. We enable the industry to cut down transaction costs, increase efficiency, and enhance profitability. We are committed to sensitizing the industry about macro-level issues and helping find solutions to them.
News highlights from the world of supply chain and logistics that appeared in media over the last one month
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| International News Agency Reuters reported that India's logistics costs have come down to below 9 percent of GDP, helped by rising state spending on roads, ports, and digitization, and could boost manufacturing as per a report "Logistics Cost in India" authored by Delhi-based think-tank National Council of Applied Economic Research. "In terms of competitiveness, logistics costs for our producers - both domestic and exporters - have come down," Rajesh Kumar Singh, secretary, Department for Promotion of Industry and Internal Trade (DPIIT) said after the launch of the report. Mr. Singh added that logistics costs were now comparable to many Western economies, and the government aimed to improve infrastructure through higher state and private investments. The report noted that logistics costs, including transportation, warehousing, insurance, and administrative charges, had come down thanks to improvements in road networks, tax reforms, and digitization of supply chains. The logistics costs were down in the range of 7.8 percent to 8.9 percent of GDP in 2021-22, compared to 8.8 percent to 10 percent of GDP in 2012-13, said Poonam Munjal, the report's lead author."Our next aim is to improve our global logistics ranking among the top 25 countries," Mr. Singh said. |
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| The TOI reported that the Indian Institute of Technology Bombay is partnering with FedEx Express, a subsidiary of FedEx Corporation, to develop innovative technologies that address key industry challenges. According to the news report, FedEx has committed almost USD 5 million in corporate social responsibility grants to IIT Bombay. This partnership will use advanced quantitative models and solution technologies to reduce costs and enhance operational efficiency in supply chain network design and planning. This collaboration is expected to redefine logistics industry standards by combining technology and India's talent pool. It will address the complexities of cross-border logistics through innovation and the seamless integration of digital intelligence. This partnership will leverage IIT Bombay's research expertise and robust entrepreneurial ecosystem to support the development of technologies, incubating promising start-ups and creating a highly skilled talent pool. The news stated that this partnership will benefit from FedEx's ability to drive industry-wide transformation. |
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| India should enhance financing options for MSMEs, reduce trade barriers by decreasing tariffs, and increase trade agreements to bolster its position in the global supply chain., said Kalyan Basu, the managing director CEO of supply chain trade finance platform Vayana TradeXchange in an interview with BW Businessworld. He highlighted that Indian Micro, Small, and Medium Enterprises (MSMEs) significantly impact supply chains, contributing approximately 30% to the GDP and about 45% to exports. MSMEs are spread across various sectors and regions in India, and they have a critical role in ensuring the smooth production and delivery of goods and services, especially in manufacturing. In India, these enterprises employ over 11 crore individuals, with more than 50% located in rural areas, supporting regional economic development and inclusive growth. |
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| Press Information Bureau published the news that the Union Minister of Commerce & Industry, Consumer Affairs, Food & Public Distribution, and Textiles, Sh. Piyush Goyal released the “Logistics Ease Across Different State (LEADS) 2023” report in New Delhi on 16th December 2023, in the presence of Smt. Sumita Dawra, Special Secretary (Logistics), DPIIT, Mr. Sajiv Puri, President-Designate of Confederation of Indian Industry (CII) & MD ITC, and Mr. Mihir Shah, Partner, Ernst & Young. Speaking on the occasion, Sh. Goyal said that LEADS gives insights to states and union territories for further revolutionary reform in the logistics sector, taking the country towards Viksit Bharat's stated vision. He added that the report serves as a guide for stakeholders in the Logistics Sector by providing strategic insights. He hoped it would be pivotal in instilling healthy competition among States/UTs to enhance logistics performance. The report also underscores notable initiatives like planning infrastructure on PM GatiShakti, ‘industry’ status for logistics, multimodal connectivity, digital initiatives in logistics, City Logistics Plans, Multimodal Logistics Parks, etc, he said, adding that States and Union Territories need to emphasize skill development, capacity building, and the formalization of logistics policies, implementation of monitoring frameworks, and the promotion of green logistics. Sh. Rajesh Kumar Singh, Secretary. DPIIT stated that leveraging digitization will lead to a significant reduction in logistics costs. In the last nine years, effective interventions in critical areas like logistics have received much-needed focus, leading to growth in the logistics sector. Secretary highlighted reforms in Ease of Doing Business, reduction in compliance burden, and ongoing work on reducing the cost of regulation, he added. Senior officials from the Central and State/UT governments and representatives from the industry were present at the launch to share their insights and engage in constructive dialogues during various sessions in the day. |
INTERNATIONAL
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| Supply Chain Dive looked at the major global trends that will likely impact the procurement industry in 2024. It noted that procurement professionals face challenges that demand a thorough understanding of global dynamics. In 2023, procurement’s leadership in balancing inflation-related cost increases while maintaining adequate inventory during supply chain constraints and subsequent rebalancing cemented their position in critical sales and operations planning efforts. The online magazine grouped key trends shaping procurement in 2024 and beyond under four heads. Firstly, economic uncertainties arising from the aftermath of the global pandemic, inflationary pressures, and material shortages have created rampant price increases. Secondly, geopolitical shifts and trade dynamics must be closely monitored, and contingency plans must be developed to ensure business continuity. Thirdly, supply chain risks can expose vulnerabilities, prompting organizations to re-evaluate and strengthen their sourcing strategies. Lastly, the article noted that companies need to adopt Environmental, Social, and Governance (ESG) measures to align with global initiatives for a greener and more ethical supply chain. |
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| Hon Hai Precision Industry Co., also known as Foxconn, a major Apple supply-chain partner, has ventured into space technology by developing communications satellites primarily for corporate and government organizations. Bloomberg reported that in early November, Foxconn's two prototype low-Earth orbit satellites took off aboard a SpaceX rocket from southern California's Vandenberg Space Force Base. Launching the low-Earth orbit satellites signifies a pivotal moment for the Taiwanese electronics manufacturer as it diversifies into new sectors, a shift taking greater urgency as some of its established businesses, such as smartphones and laptops, are seeing a slower growth momentum due to geopolitical challenges. Foxconn aims to demonstrate that it has satellite technology to tap the growing demand for space communications. |
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| The e-commerce giant Amazon is testing new solutions to increase the number of goods shipped in their original packaging rather than cardboard boxes. These solutions will protect the products from damage caused by vibration, compression, and drops, like cardboard boxes. According to Supply Chain Quarterly, only 11% of Amazon's shipments globally are delivered in their original packaging. However, Amazon aims to increase this number by reducing or eliminating excess packaging. To achieve this goal, Amazon's Packaging Innovation Lab researchers outside Seattle are working with brands and partners to create custom packaging. “Selling partners can send products to our lab, approved third-party labs, or in some cases conduct the tests themselves to qualify to ship their products without Amazon packaging. If the product qualifies, it will automatically begin to ship in its own packaging as the default, helping us avoid excess packaging when possible,” Amazon was reported to have stated according to the magazine. |
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| Vishal Gauri, the chief strategy officer of Seclore, a data security company, wrote in Supply Chain Dive about security risks that the U.S. faces. At the same time, it continues to bring back semiconductor manufacturing to the country. Mr. Gauri wrote that accelerating domestic chip production with the help of the CHIPS and Science Act is good since the country currently only produces around 10 percent of the world’s supply of semiconductors, with roughly 75 percent of semiconductor manufacturing occurring in China and East Asia. He pointed out that risks such as threats to national security due to data breaches involving information regarding chip designs, product roadmaps, and IP are the most significant issues to watch out for. The other considerable risk comes from working with a host of supply chain partners located across the globe. He emphasized that manufacturers must extend their security and risk management infrastructure to their vendors, advisors, sub-contractors, and partners to ensure that data is protected. |
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| S&P Global Market Intelligence recently released a report on the supply chain outlook for the global apparel industry, which predicts a temporary slowdown in sales and an increase in inventories for the apparel and footwear sector. The report mentioned that international trade in apparel (clothing and footwear) is expected to decline year-over-year in the fourth quarter of 2023. Still, it will increase from the second quarter of 2024. The report also highlighted that the US apparel retailers were experiencing a rise in inventory levels as a proportion of sales due to the decline in sales. Although some of the 19 apparel firms reviewed in the report were working towards returning their inventories to their desired long-term level, many were yet to achieve that goal. On the positive side, the report noted that the apparel supply chain operations are now mostly back to normal regarding logistics. However, the sector still faces some supply chain risks, including disruptions to shipping lanes via the Panama and Suez Canals, the need to remove "forever chemicals" from artificial fiber sources, and strikes in Bangladesh. Regarding Bangladesh, the country's political and worker strife could further increase risks to economic stability, which would likely dampen apparel industry exports that have been growing at a rate of 5.3 percent annually in the past five years. The report also expects the growth rate to improve to 6.8 percent annually in the next five years, assuming no significant changes occur in the operational environment. |
SCALE Awards 2023
CII Institute of Logistics organized the 10th edition of the Supply Chain and Logistics Excellence (SCALE) Awards on 1st December 2023.
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SCALE Awards, instituted in 2014 with the vision of improving India’s Logistics and Supply Chain sector through promoting supply chain excellence, is recognized today as the National Award for the industry. The objective behind the institution and presentation of the SCALE Awards is to encourage and acknowledge organizations that have successfully implemented best-in-class supply chain solutions. CII IL and the award jury determine organizational excellence as being one about robust processes that drive consistent results, process rigor that maintains business imperatives, organizational resilienceand ability to reimagine its strategy, performance, and ability to stay ahead, and as importantly, about the companies' sharing of best practices and innovations with the peers.
The SCALE Awards, now more than a decade young, is bolstered by the engagement and support of over two thousand members representing all industrial verticals and categories. It has the most comprehensive coverage of participants, making it the most sought-after event in the country's logistics and supply chain industry.
Every year, companies across the country's supply chain industry showcase logistics excellence practices and solutions to the award jury. This year, SCALE Awards recognized and felicitated the outstanding achievement of 76 award winners across 38 categories that spanned user industries like oil & gas, consumer durables, healthcare, automotive, and garments; and industry service verticals like 3PL, warehousing, material handling, transportation, and cold chain.
Sharing his views on the awards' significance, Mr. K V Mahidhar, Executive Director and Head, CII IL, said, "These awards are presented with two objectives in view. One is to recognize the good work done by organizations in supply chain and logistics. The second, and the equally important, objective is that the awards offer an opportunity for organizations to learn from each other."
Dr. K Ganesh, Member - CII National Committee on Logistics and Partner, McKinsey & Company in his theme address, said that companies globally and in India, such as PepsiCo and Asian Paints have embarked on the journey of offering supply chain as a service, thereby changing and improving how [products] brands are approaching the market and the consumer.
A big highlight of the event was the presentation of case studies by the shortlisted companies before the judges and their industry peers. This step of the awards is conducted yearly for companies demonstrating their supply chain excellence to the judges and –equally importantly – for industry peers and stakeholders to learn from the winning companies' KPI benchmarks and best practices. With the inclusion of this year's case studies, the awards have showcased about 500 case studies of excellent practices thus far.
The SCALE Awards Jury comprises some of the field's most experienced and knowledgeable professionals. With several decades of expertise under their belt, they bring a wealth of knowledge of global best practices and standards to the jury board, which helps the jury board recognize the innovations and achievements of companies and individuals contributing to the growth and success of India's supply chain industry. The SCALE Awards jury members include Dr V Sanjeevi, Mr S Seshasayee, Prof Janat Shah, Mr Amulya Charan, Mr Asokan Sattanathan, Mr Rajeev Krishna, Mr Vipul Sabharwal, Mr Anand V. Please visit scale.ciilogistics.com/jury.html page for details regarding their work experience and areas of expertise.
Speaking about his experience of the awards selection process, Senior Jury member Dr V Sanjeevi noted that the quality of responses has increased over the years. "In the last 3-4 years, I have been noticing that companies are sharing important logistics indicators such as stock turnaround rates and order processing cost,"" he said, adding that the awards ceremony presents the industry with a great learning opportunity of learning from high-performing organizations.
MOVE Felicitations and Valedictory Session
As a part of the SCALE Awards, members of MOVE (Membership of Value Engagement) were presented with membership certificates and plaques recognizing their contribution to the forum. During this interaction, responses from new and past MOVE members were impressively positive and enthusiastic. MOVE is an important CII IL initiative aimed at integrating and interfacing supply chain functions. Its prime objective is to formulate a robust collaborative mechanism for the industry value chain through networking and dissemination of knowledge. Please visit www.ciilogistics.com/move for more details regarding MOVE, including the membership requirements and deliverables.
The discussion tracks concluded with a valedictory session where industry and policy leaders shared their thoughts on the SCALE Awards and the overall environment of the supply chain and logistics industry with the attendees. Speakers included Mr. Anil Arora, Chairman - Logistics Image Building Group and Founder & MD, Aetos DigiLog; Mr. Satyaki Raghunath, COO, Bengaluru International Airport, and Mr. N E Kranti, Managing Director, Karnataka State Warehousing Corporation, Government of Karnataka. In his valedictory address, Mr Kranti said, “By recognizing well-performing companies, you are nurturing innovation, fostering entrepreneurship, and promoting excellence in the field of supply chain and logistics,” and thanked CII for organizing a meaningful conference and awards function.
This year's SCALE of SCALE Award was given to Safexpress Pvt. Ltd, and the Overall Excellence Award was presented to DHL Express India, DP World, Flyjac Logistics, Mahindra Logistics, Phoenix Logistics India, Safexpress, TCI SCS, and TVS SCS. The AI-Readiness Excellence Award was won by four companies: Hindustan Urvarak& Rasayan Ltd., Jindal Stainless, and Luminous Power Technologies Pvt. Ltd, and My Talking Tree. For the complete list of awardees, please visit https://scale.ciilogistics.com
Stepping into its eleventh year, the SCALE Awards continues to strengthen the industry's belief that enhanced logistics and supply chain excellence will help India become a preferred global industry destination.
From Team CII IL, we wish you and your organization a successful 2024.
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Will connect again next month, with a comprehensive dossier of news, trends and events from the industry.
| Courtesy: Newsletter content developed by Mr. Aanand Pandey | ||