October 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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| The Union Cabinet approved a Memorandum of Cooperation (MoC) aiming to augment and create a semiconductor supply chain partnership between India and Japan. The approval was made during a cabinet meeting chaired by Prime Minister Shri Narendra Modi. The MoC was signed this July between India's Ministry of Electronics and Information Technology and Japan's Ministry of Economy, Trade and Industry, as per an official statement by the Ministry of Electronics & IT. The memorandum's objective is to strengthen cooperation between India and Japan towards the enhancement of the semiconductor supply chain leading to employment opportunities in the IT industry. "The MoC shall come into effect from the date of signature of the parties and shall remain in force for a period of five years. Both G2G and B2B bilateral cooperation is providing opportunities to advance resilient semiconductor supply chain and leverage complementary strengths", the statement said. |
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| The Economic Times has reported that India has invited Brazilian companies to join its supply chain in order to strengthen economic ties between the two countries. The financial paper stated that Commerce Secretary Shri Sunil Barthwal discussed ways to promote trade and invited Brazilian industries to be part of India's growing supply chain during his visit to Brazil in early October. Shri Barthwal was there to attend the sixth meeting of the India-Brazil Trade Monitoring Mechanism (TMM). |
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| In an interview with Mint, Hitachi Energy chief executive officer Claudio Facchin said that his company aims to build an India-focused supply chain. Mr. Facchin said that the company aims to focus on the modernization of power grids, energy transition technologies and newer areas such as EVs; expand the portfolio of its offerings in India, increase its India-based manufacturing capacity and boost its country-wide supply chain network to meet global energy transition requirements. |
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| The UK-based Automotive Logistics magazine reported that Škoda Auto has opened a complete knock down (CKD) logistics hub in India. The Czech car maker's newly built 16,000-sq.m Pune facility will help the company pack CKD kits of its Kushaq and Slavia models for export to Vietnam. The CKD kits will be further welded, painted and assembled at a production line being built in Vietnam's Quãng Ninh province. These CKD kits will be shipped via the port of Mumbai, reported the magazine, quoting the car maker's head of production and logistics who said that the opening of the CKD logistics hub has paved the way "for exporting CKD units from India to Vietnam." |
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| The India Shipping News reported that Kale Logistics Solutions released a survey covering 200 ports, revealing that 30 per cent aren't ready for the International Maritime Organization's mandatory Maritime Single Window (MSW) that commences January 1, 2024. The firm stressed the industry's need to accelerate digital transformation, with the report citing high costs, lengthy timelines, and diverse digital readiness as major challenges hindering regulatory compliance. |
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| Bloomberg Originals published an informative documentary about India's growing luxury sector which showed how, for decades, globally renowned fashion houses have outsourced the making of luxury products to India where they can find hard-to-find handicraft skills. |
INTERNATIONAL
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| The Lombard, Illinois-based global network of supply-chain professionals, CSCMP (Council of Supply Chain Management Professionals) recently published a report titled "State of the Global Semiconductor Supply Chain Report." The report highlighted "the fragile nature of the global electronics supply chain" and recommended measures that can help companies and investors protect themselves from seemingly inevitable electronics supply-chain disruptions. It noted that the pandemic showed that an informed understanding of the participants of the global semiconductor ecosystem is crucial to assessing areas that present disruption risks and designing effective national policies that can address these risks. |
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| A recent Accenture research covering 1,230 operations across 11 industries in 14 countries showed that frequent disruptions in engineering, supply, production and operations functions have significantly impacted revenue, margin and lead times of companies. At the same time, most resilient companies captured greater growth percentages and showed a distinct performance advantage compared to rivals. The survey further found that 72 per cent of respondents plan multi-sourcing strategies in the next three years, up from the present 42 per cent, nearshoring is picking up with a considerable 65 per cent of respondents shifting to regional sourcing,and the average investment in resilience including relocating, automating, and digitizing being scaled up, with nearly half of that to be spent on reshoring. |
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| A New York Times article documented how the popularity of squid, better known in the United States as calamari, helped establish China's dominance of seafood's global supply chain. The paper noted that the popularity of calamari as a restaurant staple is fairly recent, going back over three decades, which has been helped by "the magic of marketing, the unintended consequences of a federal conservation campaign and the rise of China as the world's unrivalled seafood superpower." NYT added that much of it consumed in the U.S. is caught in the high seas off South America by industrial Chinese fleets. |
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| Akzo Nobel, the diversified Dutch manufacturer of paints, coatings, and chemicals, has kicked off a supply-chain efficiency drive reported Bloomberg. The company told the press that that it aims to save €250 million over the next three years, globally. Bloomberg noted that global demand is softening in several markets as the global economy slows. The efficiency program will rely on the company's investment in automation, de-bottlenecking and more efficient equipment in some factories, particularly in the US and Europe, and declining raw material costs indicated the company during a call with journalists. |
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| The Business Standard interacted with Saad El Jai, Project Manager and Economist at LixCap, an American global advisory firm, to learn about Bangladesh's state of cold-chain infrastructure. Mr. Jai said that the country Bangladesh needs a sound policy to help attract foreign investors and engage the private sector. He added that the country is required to accelerate the speed of its cold-chain infrastructure development. Mr. Jai also highlighted the challenges operators face due to the lack of cross-docking facilities at major trading hubs like Chittagong Port and Dhaka Airport. |
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| Saudi Global Ports (SGP) has signed an agreement with the Saudi Ports Authority (MAWANI) for a new integrated logistics zone in the Saudi city of Dammam. SGP is a JV formed between the Public Investment Fund (PIF) of the Kingdom of Saudi Arabia, PSA (Port of Singapore Authority) International and Al Balagaa Group. SGP also signed a Memorandum of Understanding (MoU) with the Saudi Ministry of Investment aiming to improve the quality of the country's logistics sector, as per recent media reports. SGP and MAWANI have joined hands to establish a new one million-square-meter integrated logistics zone at King Abdulaziz Port Dammam (KAPD). |
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| DP World, the Dubai-based Emirati multinational logistics company, signed a 30-year concession agreement with the Tanzania Ports Authority (TPA), The agreement pertains to the operation and modernization plans of the multipurpose Dar es Salaam port. The Tanzanian port of Dar es Salaam handles close to 90 per cent of the country's cargo traffic and is one of its three major ocean ports. As per the news report, DP World is slated to invest more than USD 250 million for the upgradation of the port, which will form an important nodal link to the hinterland of sub-Saharan Africa through a network of roads, railways and dedicated freight corridors. |
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Interview of the Month
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Mr . K Sukumar, CEO, TVS SCS-India
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| TVS SCS, an Indian multinational, is credited with leading the evolution of the outsourced logistics industry in India. Over the past decade or so, a significant part of this evolution has unfolded. During this period, TVS SCS has expanded its capabilities to effectively manage larger, more complex, and diverse supply chains globally. Please share with us the biggest core strengths of TVS SCS that have helped establish it as a multinational sector leader in the face of intense global competition? |
TVS SCS has multiple strengths which has helped the company navigate the many supply chain challenges over the last few years and establish itself as a leader.
Notable amongst these are:
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| India’s automotive industry is the country’s most influential manufacturing vertical, supporting a large and thriving ecosystem of parts and machine tools manufacturers and suppliers. This industry has been in a state of deep churn during the last few years, brought about by a series of regulatory and technological factors such as the rise of the EVs. How has this churn impacted the automotive logistics industry in India, how has TVS Supply Chain negotiated this change, and how do you see this churn influencing the future of India’s automotive sector? |
| It is important for organizations like TVS Supply Chain Solutions to be future ready and adapt quickly and effectively to changing requirements from its customers. The rise of the EV sector impacts the supply chain industry in multiple ways – new services for the EV sector, as well as changes to the way transportation services are provided to customers. These technology evolutions are here to stay and it is critical that supply chain organizations like us adapt quickly to this change. These changes have thrown up new service opportunities including warehousing and transportation for fuel cells and batteries, different kind of line -feed logistics requirements as well as being able to handle different types of components that go to make up road worthy two, three and four-wheeler electric vehicles. We can proudly say that we have extended our customer ambit to include many EV manufacturers thereby keeping us relevant and updated. TVS Supply Chain Solutions also has a strong technology logistics vertical under its Integrated Final Mile capability which has morphed itself to support charging point installation, maintenance and managed services across the many geographies it operates. This is part of its closed loop logistics strategy which ensures that all aspects of the requirement are covered. TVS Supply Chain Solutions also takes it ESG responsibilities extremely seriously and is taking appropriate steps to introduce environmentally friendly technologies into its road fleet and operating networks. Service delivery networks include the deployment and usage of these new technologies in a balanced fashion along with existing technologies. |
| Skill-building and upgradation is a priority focus area for TVS SCS as well as that of the CII. Please share your perspective on the importance of skill development in logistics, and the main initiatives that the CII and TVS SCS are taking in this direction. |
| The rapid and varied demand in logistics requirements in the last few years has led to a huge skill deficit in the logistics delivery functions. This skill gap is felt across warehouse operations, last mile delivery operations as well as flexible manufacturing operations. There is a constant need to keep skilling and re-skilling the work force to be able to meet these constantly evolving needs of flexibility, adaptability and the ability to understand and deploy tech. New opportunities across different sectors have also led to double digit attrition levels which means additional demands for skill development services. To address this, organizations like TVS Supply Chain Solutions in conjunction with CII are co-creating tailor made and generic skill development programs to educate on basic warehouse processes, scanning technologies, automation technologies and material handling equipment. The stress on employee health and safety is an added dimension that is critically i mportant. Successful examples of this are the partnerships in the Chennai area where TVS Supply Chain Solutions is operating its flagship Material Handling training school where residential programs are provided to rural youth including women, as well as providing subsequent job opportunities. TVS SCS and CII are also collaborating on curating and rolling out content across high demand geographies like South and West India, while also planning for under-served geographies including the Northeastern part of India. This will continue to be a big focus area for both these organizations for the foreseeable future. |
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 | ||