Scania showcases sustainable transport offerings at the Auto Expo 2016.

scaniaScania Commercial Vehicles India unveiled its Bio-fuel powered flagship Citywide bus and the Premium Scania G310 truck at the Auto Expo 2016. Mikael Benje, Managing Director, Business Unit, Scania India said, “ Continuing our focus on sustainable transport solutions, we will increase the manufacturing of vehicles that can run on alternate fuel (biofuel) engines at our Narasupara plant in India” “We will continue to highlight the benefits of local waste, for local fuel, for local transport across India starting with the introduction of ethanol based green buses in India,” he concluded. Capabe of running on fossil fuels (diesel) as well as renewable fuels like bio-ethanol, bio-diesel and bio-methane, the Citywide bus is claimed to be India’s first bio-fuel powered commercial bus, and is compatible with all commercially available bio-fuels complying with BS1V, Euro 5, and Euro 6. Alongwith it, Scania also launched a high performance G310 haulage tractor for the India market. The G310 haulage truck, a new category for Scania is aimed at realising optimal Total Operating Economy (TOE). G310 offers key features like OptiCruise, a fully automated gear shifting system, and an active traction control that claims to provide all wheels with enough traction to keep the vehicle stable in case of a wheel slip. Apart from the two, Scania also showcased Scania R580 truck and the Metrolink 14.5 meter bus.

BharatBenz trucks are BS IV compliant

BharatBenz1Daimler India Commercial Vehicles Pvt. Ltd. (DICV) has announced that its entire range of above 9 to 49-tonne trucks (sold as BharatBenz) will be available in Bharat Stage IV variant across the country. With its new range of buses set for market launch in September 2015, DICV is also offering the Bharat Stage IV variant for school and staff applications in the front engine 9T bus product range. In alignment with the governmental emission regulations, DICV will meet the norms using system derived from Bluetec technology proven in Daimler Vehicles in many markets over a decade. DICV has tested this technology in Indian operating conditions for over a million kilometers before offering it to the customers. Apart from meeting the stringent emission regulations by reducing toxic gas levels within the proposed Bharat Stage IV norms, the trucks and buses will also provide better fuel economy to customers.

GST: Impact on road transportation

aa23d254-6ff2-43f9-a3d7-f64d864ab627_TempSmall In this column, V.G. Ramakrishnan, Managing Director – South Asia, Frost & Sullivan opines that the impact of the implementation of the GST regime will be moderated by dynamics specific to India.
A market of 1.2 billion consumers and one of the faster growing economies in the world, India requires an efficient transportation and logistics industry. With over 60 percent of goods transported by roads in 2011 and there being no significant threat from other modes like rail, coastal shipping and inland waterways, the road transportation sector is expected to remain the mainstay for goods haulage.
However, the evolution of the transportation sector has been plagued by inefficiency due to poor road infrastructure and sub-optimal supply chain networks. Supply chain design and implementation in India has been dictated more by tax considerations rather than efficiency. Goods are subjected to a multitude of taxes like excise duty, central sales tax (CST), value added tax (VAT), entry tax and octroi, among others resulting in cascading taxes and higher administrative work. This in turn entails longer lead times and higher costs. These taxes administered at various levels by the central government, state governments and local municipalities lead to a multiplicity of authorities, multitudinous documentation, bureaucratic impediments and escalating taxes.
SVLL_2Manufacturers had to engage in complex supply chain solutions to transact in ‘one country but multiple state markets’ separated by their own tax laws and rates. In order to sell goods produced in one state into another state, companies were required to stock transfer goods to a warehouse before making the first sale to a distributor or dealer in the local market. Manufacturers established warehouses in every state to deal with the tax regime. Companies appointed C&F agents whose primary task was to be the custodian of the good manufactured for a cost while adding no value to the process.
Continued investment in roads is addressing infrastructure challenges, which in turn leads to the development of efficient road transportation. An efficient taxation system is the need of the hour for a fledgling market like India. Unification of India into one single market is expected to lead to significant improvement in supply chains and reduction in costs. The changes to the tax system first came about when the government mooted the idea of a Goods and Services Tax (GST) in 2007. GST was expected to change the tax landscape in India and start the process of consolidation of warehouses paving the way for large stocking points and efficient transportation methods.
The Federal polity and structure of the country required taking into account the opinions of various stakeholders including state governments from various political parties — national and regional. This led to two GST rates: one central, the other state, instead of an ideal single GST rate subsuming centre, state and local taxes, thereby establishing a truly unified and simple tax structure.
Discussion, debates and write-ups about GST and its benefits are endless. In conclusion, the general consensus is that GST is good for the economy and country. GST was to be implemented in 2010 but differences between the Central and State Governments over multiple issues including political differences stalled the implementation of this crucial tax reform. Predictions of implementation are hard to come by, but the hope and expectation is, the sooner the better.
Why is GST a crucial element of change for the road transportation sector? How much is GST a game changer and what is its impact on the commercial vehicle space? To answer these questions one needs to look closely at how these legislative changes impact the storing and sales of goods from the manufacturer to consumption centres. Comparisons have been drawn with many countries to predict warehousing post a GST scenario. India has some unique due to many factors. And these factors will play an important role in shaping the future landscape.
1. India: a country of 1.2 billion people – approximately 4-times the population of the US, leading to a high level of population density (34/km2 in the US compared to 382/km2 in India, 2011)
2. Large number of Small and Medium Enterprises producing goods catering to a wide range of customers
3. Consumption patterns, habits, and preferences vary widely across the country.
4. Increasing urbanisation across the country
5. Land acquisition and its costs
The post-GST implementation landscape in Indiais likely to showcase some interesting scenarios.
SVLL_1Larger Sized Warehouses in Lesser Numbers Post GST Implementation
The logistics industry is gearing up for the implementation of GST. Modelling has indicated that India can be efficiently served by stocking goods across 5-6 key locations or hubs: National Capital Region (NCR Delhi) to service the northern market; Mumbai/Pune to serve the western market; Chennai/Bangalore for southern markets; Kolkata, the eastern region, and one location each to service central and north eastern regions in the country. This change is expected to create a true hub and spoke system of transportation. In effect, we would have large warehousing spaces in each of the hubs to cater to the markets in the vicinity. In the initial phase of GST implementation, it is expected that large number of warehouses across multiple states (that were around only for tax purposes) will be closed leading to consolidation of goods, which in turn will require large-sized warehouses in select 5-6 hubs that will dispatch goods directly to consumption centers.
Future: Back to the past?
However, the uniqueness of the country is expected to change some of the scenarios. It is expected that India will create its unique hub and spoke model with an initial system of 5-6 hubs and move into the system of multiple hubs and spokes over 10-15 years. Two factors offer evidence for this unfolding scenario
1. Increase in consumption due to higher incomes
2. Higher levels of urbanisation creating large cities with more than 5-million people
Currently, three Indian cities, namely, Delhi, Mumbai and Kolkata have populations in excess of 10 million. Currently, there are five cities in India that have populations between 5-10 million. As per the 2011 population census there were 53 urban agglomerates spread across 10 states that have a population of over 1 million. What is interesting is that in 2001, there were only 35 cities with populations of over a million people. Urbanisations levels are predicted to increase further. Over the next decade, the number of urban centres with a population of more than a million is expected to nearly double. Meanwhile, the metropolitan cities of Delhi, Mumbai and Kolkata will become megapolises with populations of over 20 million over the next two decades.
A case in point is the southern triad of Bangalore, Chennai and Hyderabad. These cities currently serve a population of approximately 8 million people. These cities added over 2-million people in the last decade, the same number Delhi added to its population of 16.4-million in 2001, an indication of rapid growth in population and economic activity. These cities are also state capitals and important centres of commerce.
Supply chain optimisation will indicate servicing these markets through an integrated single warehouse strategy as each city can be reached from any other in less than 16 hours. However, continued growth and creation of satellite cities or greater regions will require each market to be served individually. In concept, there is a good possibility that India could return to where it all started: 20 warehouses or more to ensure proper distribution coverage.
Some other factors could also move the market in the direction including fragmentation of producers and local tastes.
Road Transportation – Multiple Opportunities for varied stakeholders
Consolidation due to GST changes can impact the road transportation sector in many aspects. A few are listed:
1. Quicker turnaround time for trucks due to reduced paper work and lower waiting times at check posts: Higher asset productivity, leading to better profits for transporters.
2. Higher containerisation of cargo that could lead to higher efficiency of loading and unloading. Reduction in pilferage and damage during transit would be an added benefit.
3. In the short- to medium-term, post-GST implementation, the demand for large tractor-trailers and higher powered commercial vehicles could increase with a corresponding increase in demand for vehicles for last mile connectivity.
4. In real terms, polarisation of the truck market into extreme ends of the power spectrum, both upper and bottom end, can be expected. Growth of medium duty trucks could falter during this period of change.
5. If development of new micro markets fructifies and future warehouse location strategy reflects upon the current scenario, medium duty trucks and lower end (power) of the heavy duty range trucks could grow significantly
6. A direct fall out of GST would be increased competitiveness: efficient sourcing. This can lead to higher exports of goods from India translating to higher demand for trucks
7. Higher load carrying vehicles means that a fewer number of vehicles are required. With driver shortages hitting the industry hard, an unlikely benefit could less pressure to increase the talent pool of truck drivers.
There are undeniable benefits of GST, whichever way it pans out and a positive impact on the transportation and warehousing. But, for now GST continues to be a mirage.

Luxury coach segment looks up

New coaches and investments in the luxury bus segment are hinting at its revival.

The chief minister of West Bengal, Mamata Banerjee, flagged off the Kolkata-Agartala bus service recently. The service will run through Bangladesh rather than through the Indian states of Assam and Meghalaya. Compared to the earlier 1,650 km, the service will now require to cover 500 km only. Cutting down the travel time by one-third of what it takes via Guwahati, the first bus flagged by Banerjee was a Volvo luxury coach. West Bengal Surface Transport Corporation (WBSTC), which undertook this endeavour, is one of the many State Transport Undertakings (STUs) that have, or are in the process of procuring luxury inter-city coaches. The procurement, claim industry sources, is leading to the revival of the luxury coach segment. Sources cite the example of Maharashtra State Transport Corporation (MSRTC), which is also planning to expand its luxury, inter-city coach fleet size to 200 in the next two years. Called Shivneri, the MSRTC fleet comprising of Volvo 9400, currently runs on Mumbai-Pune, Thane-Pune and Pune-Aurangabad routes prominently. Of the current fleet size of 110 coaches, sources claim that 46 will retire at the end of July 2015. Of the 70 new coaches (35 from Volvo, and the rest from Scania) the undertaking is currently procuring, 12 Volvo coaches have already reached. The inclusion of 70 coaches will increase the Shivneri fleet size to 134 by the end of this year. Addition of another 66 coaches during the next year will swell the number to 200.

Green shoots

Though affirming that green shoots in the luxury inter-city coach segment are visible, not all are convinced if the luxury inter-city coach market is reviving. They point at the performance of the luxury inter-city coach segment in 2011-12. Segment leader Volvo sold 1,500 units during that fiscal. During the next fiscal, the numbers dropped. The company is said to be have sold 500 units during the last fiscal. This fiscal, the number is expected to rise to 600 units. With the luxury inter-city coach market expected to grow by 200 to 300 units during this fiscal, some industry sources claim that it stops short of a strong revival. There are those who disagree. They suggest instead, that such a rise speaks about sustainable growth.

Much water has flown under the bridge after the first luxury inter-city coach, a Volvo B7R, was delivered to an operator in 2001. It took a decade for the luxury inter-city coach segment to reach the highest ever level of sales achieved in 2011-12, claimed sources. Close to 2,000 inter-city luxury coaches were sold in that fiscal, they added. The only other player in that fiscal was Mercedes-Benz. Technologically speaking that is.

Technology is the driver

Technology has been the driver of luxury inter-city coaches. In terms of traveller appeal, it translates into safety, comfort, reliability and image. Image is perhaps the reason why, the homegrown iT09 Ashok Leyland luxury inter-city coach launched in 2010, and built by TVS-Irizar, could not set the sales chart on fire. Volvo began building its own bodies in 2008. The same year, Mercedes-Benz introduced its inter-city luxury coach in India. In FY13, the inter-city luxury coach market dropped. The same year, Tata Motors introduced the Divo luxury inter-city coach. The same year, Asia Motor Works postponed its plan to enter the luxury inter-city coach segment despite developing one.

Not exactly a watershed year, FY13 proved to be a year of correction. It also proved be a year when a new European player stepped in. Scania launched its Metrolink HD luxury inter-city coach in February 2013. It was made by Scania’s captive coach builder in Malaysia. A 12 m, and a 13.7 m and 14.5 m multi-axle luxury inter-city coach was introduced under the Metrolink nomenclature. Volvo and Mercedes-Benz were already offering coaches in these
size brackets.

Infrastructure dependent

Luxury inter-city coach segment growth, right from the time Volvo entered the Indian market in 2001, has been linked to infrastructural growth. It continues to be linked with infrastructural growth even today. The business premise of a multi-axle luxury inter-city coach is based on the fact that it will ferry people over longer distances in high levels of comfort, and efficiency. And, there can be no better example than the VRL Bangalore-Jodhpur Volvo luxury coach service. It takes 36 hours to accomplish the journey spread over 2,000 km.

Interestingly, the luxury inter-city coaches being inducted by many STUs, claimed industry sources, will be deployed along long distance routes. Apart from Kolkata-Agartala route, the Volvos the West Bengal Surface Transport Corporation is procuring, sources claimed further, will be deployed on routes like Kolkata-Dhaka and Kolkata-Guwahati. While a flawless service over such routes is only possible with the help of a good infrastructure, the tender for West Bengal is claimed to be for procuring 130 luxury coaches.

Taking competition to the next level

Lacking in numbers perhaps, and even after over two decades of existence, the luxury coach segment continues to be fiercely competitive. Volume remains constrained and the going is not as smooth. Neither despite the green shoots and an impending sign of revival. Not to be left out, Daimler has re-launched its luxury coach based on the O500 platform. The chassis is 50 per cent localised, and the Wrightbus patented aluminium body is 70 per cent localised. Similarly, Scania has begun building its Metrolink buses locally. The local content on them is to the tune of 70 per cent. Attempts to localise are certain to provide the two European luxury coach manufacturers an advantage in terms of price. However, will that be enough to wipe out the benefits earned by Volvo as a frontrunner? Claimed an industry source that competition is heating up. It has got to the next level where no stone is left unturned. Every opportunity is tapped and explored to the fullest. Then, it does not matter how painful it is when a buyer begins to negotiate a deal from as low as 65 per cent of the price tag. Though signalling a revival, industry sources are of the opinion that it may still take time for the market to reach the 2011-12 level. But, then there are those who are confident that the market will see a revival in the second half of this fiscal on the basis of the attention paid by the central government on fundamentals.

Replacement market

A large chunk of orders originating currently are due to the need to replace an ageing bus or a number of buses. No bus operator, claim sources, is willing to expand the fleet. This is attributed to the higher running costs and falling traveller count. If high interest rates are a limiting factor, it should not come as a surprise that luxury coach manufacturers are helping operators to sustain in a challenging environment by offering products like multi-axle coaches that can ferry more people. Also, ferry them over longer distances. Achieve faster turnaround times, and thus earn more.

Double-decker for long distance luxury travel

To facilitate luxurious long distance travel, Tata Motors is said to be studying the market for double-decker luxury coaches. It is also said to be testing the 15 m multi-axle Marcopolo Paradiso G7 based multi-axle luxury coach. This coach was displayed at the 2012 Auto Expo. When it arrives, the Divo may be withdrawn. In the case of double-decker coaches, Tata Motors is expected to bank upon Marcopolo to leverage its South American experience. The Marcopolo Paradiso 1800 double-decker luxury coach, for example, flaunts high standards of sophistication and comfort. Based on the Scania K 410 platform, it coud be had with bed type seats, which recline 150-degrees. They are made of viscoelastic foam that moulds itself to the body of the passenger. Each floor has a toilet; a sound and video system, air-conditioning and heating. The third steering axle technology provides benefits in the form of reduced operating costs, ease of manoeuvring and a smaller
turning radius.

Considering their expanse, and the need to invent, double-decker luxury coaches may take time to enter. New arrivals in the form of Mercedes-Benz luxury coach and Alma Mammoth based on a MAN chassis will mark the near future. They may address the replacement-oriented market as of current, indicating in no uncertain terms, that the market for luxury coaches is reviving. Albeit slowly, and in a sustainable manner.

Special application CVs

Special Commercial vehicles find favour with special applications that make the fire brigades, airports, armed forces function smoothly and efficiently.

Mumbai Fire Brigade has added a 90 m fire ladder to its fleet of special application trucks, which include fire tenders and crane trucks among others. The new fire ladder, procured from Finland-based Bronto Skylift Oy Ab, has six-axles out of which two are powered and four are steered. Based on a Mercedes-Benz (6260) truck chassis, the fire ladder (watch out for an exclusive story in October 2015 anniversary issue of CV) weighs well over the 49.2-tonne limit prescribed in the Motor Vehicle Act. Special permission was therefore sought from the Union Ministry of Road Transport and Highways to operate it. The 90 m platform ladder includes electric and diesel operated pumps. A battery operated pump acts as a back-up. Capable of reaching up to 30 floors of a high rise, the 90 m fire ladder was procured at a price of Rs 15 crore. Ironically, this fire ladder is not the first to make it to India. Two similar fire ladders were procured by DLF at Delhi, and have been pressed into service at the DLF properties in the NCR region.

Fire tenders

Playing an important role as special application CVs are fire tenders too. According to Dinesh Waghmare of Pune-based Hi-Tech Services, which specialises in the manufacture of special application trucks, fire tenders have to adhere to high standards of protection and reliable performance. Only if the vehicle subscribes to the guidelines laid down by the government organisation will they be approved by the regional transport authorities. While an important part of Waghmare’s work involves understanding the client’s requirements, fire-tenders, he adds, are based upon operational risk profiling, interoperability and specific user needs across fire and rescue authorities. “Each product has to conform to the National Fire Protection Association safety standards. Water and foam tenders, water bowsers, dry chemical powder tenders and emergency rescue tenders are some of the fire tender types,” he states.
Airport CVsOver the fire tenders found at various fire stations in the country, the ones at the airport look far different. These include the Rosenbauer Panther 6×6 airport fire tender. Manufactured by Rosenbauer International AG of Austria, it is a common site at the Delhi and Bangalore airports. Powered by a 705hp engine, it can quickly access any part of the airfield while responding to emergencies. The one at Delhi, to combat the winter conditions, is fitted with a ‘Low Visibility Enhanced Vision’ system, guided by a Forward Looking Infra-red (FLIR) camera mounted on the cabin roof. The camera provides vision even in a smoky, foggy, or a dark environment up to a distance of 450 m. Built using advanced composite materials, the vehicle has a water capacity of 12,500 litres apart from 1,500 litres of fire retardant foam and 500kg of dry chemicals to fight fire. The vehicle is equipped with a remote controlled roof mounted nozzle which can discharge 6,000 litres per minute in just over two minutes. Industry sources claim that in August 2015, two Panther 6×6 airfield crash fire tenders, built fully on RBI chassis and fitted with Volvo TAD-1662VE six-cylinder engine, were procured. They also claim that in March 2015, an Iveco Magirus turntable ladder for township frame was also procured. Both make typical special application commercial vehicles for use under specific conditions.Special_DOther application areas

Apart from the various special application areas mentioned above, commercial vehicles also find use as refuse trucks with various governing bodies and municipalities. Special application vehicles on bus or van platforms also include ambulances as special application vehicles. Built for the purpose by companies like Force Motors among others in India, ambulances are often fitted with an array of specialised equipment to transport the critically ill or injured to the hospital safely and securely. When it comes to money, special application vehicles on LCV platforms like the Tata 407, Tata 207 and Tata Xenon are specially built to facilitate the carriage of cash to banks and ATMs apart from accommodating armed personnel. Some of these are also partially armoured or fitted with bullet-proof glass apart from highly secure safes. Also built on LCV chassis are police vehicles that include those that transport prisoners and police officials. Riot control vehicles used by the Police are built on truck chassis (16-tonne to 25-tonne) with an amount of armour. They are also fitted with water cannons. Delhi-based Shri Ganesh Fire Equipments (P) Limited, Vijay Fire Vehicles & Pumps Limited and Brijbasi Hi-Tech Udyog Ltd. are known to build water cannons based on truck chassis of various commercial vehicle manufacturers. Ludhiana-based Pyara Singh & Sons specialises in the building of sweeper machines. It has built sweepers on a truck chassis. Such vehicles find application with municipal bodies as well.

Special_ELast but not the least, special application vehicles also include refrigerated containerised trucks catering to the cold chain industry – Pharma, Dairy, Meat, QSRs (Quick service restaurants), etc. Many companies like Randhawa and HLM India specialise in the manufacture of such vehicles. These companies build refrigerated bodies on truck chassis as diverse as a Tata Ace platform to a 49-tonne tractor trailer. Each area involving special application vehicles is estimated to be worth Rs 6 to Rs 8 crore according to an industry expert. Application areas are numerous, and it is therefore tough to estimate the total special application industry worth. Industry sources are of the opinion that special application vehicle industry is worth a few thousand crores but highly fragmented. It is a mix of locally sourced and imported solutions, which makes it hard to estimate in terms of the overall value. Especially when some applications are repetitive in nature, and some are highly customised. Like the 90 m fire ladder the Mumbai Fire Brigade has just procured.

Shell Lubricants aims at developing next generation lubricants in India.

h1du3qu3Shell Lubricants aims at developing next generation lubricants in India.
In line with its commitment to continue investing in India, Shell Lubricants will soon comission its technology center at Bangalore in India. Built with an investment of USD 500 million, the technology center will employ 1500 people. An extension of the R&D center Shell has in Bangalore for over 15 years now, and employs 1000 people, including scientists involved in the development of various solutions, the technology center will help develop lubes. Announced Nitin Prasad, Managing Director, Shell Lubricants India, “By 2016, Shell will have a new technology center at Bangalore. We will soon be able to test and design newer fuels and lubricants locally. The center will play a major role of working in close cooperation with Shell facilities to develop next generation lubricants.”Expanding market reach
In an effort to expand its footprint, Shell Lubricants extended its product portfolio recently. It launched Shell Rimula APDEO CF 20 W40 diesel engine oil for medium and heavy duty engines with the aim of providing a one stop solution for diversified vehicle range as well as a range of equipment. The company has been working closely with a good number of equipment manufacturers for some time now. It is, in fact, extending gradually its services to include oil condition monitoring techniques for equipments. “Even though it was traditionally done offline, we are now working with online sensing technology that would help us to collect data that is necessary to gauge the condition of the lube. The process would also enable us to predict the condition of the equipment going forward. We are already sharing this data on highway sector. f52428a6-71a7-43f3-a4e6-da7253ea8240_TempSmallWe are also expanding our services to the mining sector,” expressed Dr. Felix Guerzoni, Global Product Application Specialist, Shell Lubricants. The Shell Rimula T5 E 10 W30 oil, the company developed in close cooperation with Tata Motors offers fuel savings in the range of 3 per cent. This amounts to Rs 40,000 per truck savings for the operator. “Working with the OEMs allows us to understand the product better and develop the lubricants accordingly” mentioned Prasad.Meeting the stringent emission norms Prasad is also of the opinion that it is important to understand what will come the way of the following generation in terms of environment. “It is necessary to reduce pressure on OEMs, and thus co-engineer products with an understanding of what we are leaving out for the generations next in terms of environment,” said Prasad. “There are talks of jumping one complete emission standard which will impact the availability of fuel quality, lubricants along with the enormous pressure on OEMs to comply with better emission norms,” he added. Drawing attention to the federal system in India, and the need for it to improve and ensure cohesiveness all around, Prasad stated that GST is a good example where a policy can be created at the central level. States will however need to agree, he added, and should be able to implement. “All of us have to come forward and function together,” he explained. About the enormous investments involved in quick upgradation to BS VI and the subsequent passing on of the heavy costs associated to the consumer, Prasad said that it is the end consumer who will need to make a choice. “He will have to do it quickly and firmly. He could be better off by asking the price of clean air. What it will be like? If some kind of support from the government will be there? The outcome will point at the availability of cleaner, low sulphur fuel,” stated Prasad.dbc4f832-75c2-4b5c-8ae1-306d0ed013d1_TempSmallExplaining that the move from crude oil to those that are of good quality will remain a challenge, Prasad drew attention to the menace of piracy. “Being a market leader in the lubricants space, counterfeiting has been a major problem that Shell lubricants in India have not escaped from either”, he added. Mansi Tripathy, Chief Marketing Officer, Shell Lubricants India quickly pointed out that Shell has been actively working to ensure the right product reaches the end consumer, and is keeping a sharp eye on spurious products. “In the last three months we have initiated two legal proceedings. Though the menace of spurious products is limited to parts of Rajasthan, Gujarat and some south Indian states, we would like to send a strong message to the market that as far as quality is concerned, Shell does not make a compromise,” she said further. 1220dbe5-1f89-4e22-8341-289486d4d1e5_TempSmallAlternate fuel prospects and lubesVarious governments across the world have been very excited about the use of alternate fuels in an effort to offset environmental concerns; to deal with the risk of degrading air quality. Many have agreed to 5 to 10 per cent mandates in the ecosystem. Shell Lubricants is closely observing the rising preference of the Indian government for alternate propulsion medias even though they are less energy efficient. Prasad mentioned that alternate propulsion medias need to be better structured. Pointing at Brazil, he said, “It is important to source bio-fuel in a sustainable manner. We are looking forward to partnering with sources who we believe are doing sustainable agriculture without causing harm to the ecological balance.”

Gas-to-Liquid oils

Even though it is at a nascent stage, Shell Lubricants is banking heavily on Gas-To-Liquid (GTL) fuels. “If the lubricant market is growing at one to two per cent, GTL market is growing at 15 to 20 per cent. People are gradually starting to realise that it is economically better for them while progressing towards lower emissions,” Prasad mentioned. With OEMs looking towards longer oil drain intervals, Shell has already got 3,500 patents registered in the area of GTL technology. Sources close to the company claimed that solutions can only be found by collaborating; through a collaboration between various industry elements, think tanks, academia, NGOs and the government. India does not need to start from scratch, they added. Stressing upon the need to implement BS VI emission standards, Prasad mentioned that India can learn from other countries. He questioned if India as a society is ready to foot the bill? “There will be an increase in prices for certain. However, the question is, will there be a reduction in excise duties, state taxes to balance out the high costs? The answer to this is not clear yet,” Prasad concluded.

Spearheading in contract logistics


Spear Logistics is staying ahead by offering multi-layered services.

The turnover of Pune-based Spear Logistics Pvt. Ltd.(SLPL) has grown four fold in the last five years. For the last five years, the company has been clocking a compound annual growth rate (CAGR) of 29 per cent. Owing its rapid growth to rising acceptance of contract logistics, SLPL has seen growth come from engineering, automotive, pharmaceutical and e-commerce sectors. Stressing upon his company’s growth from a mere Rs. 250 million in FY2009-10 to Rs. 1,003 million in FY2014-15, Captain Uday Palsule, Managing Director, SLPL, says, “We have added many new clients from e-commerce and pharmaceutical industry in 2014-15 even as we continue to focus on clients from the engineering and the automotive industry.” “We expect to clock a revenue of Rs. 1,400 million in FY2015-16,” he adds. Gautam Dembla, CEO of SLPL is quick to state that the focus on engineering and auto is resulting in a contribution of 55 per cent of the overall revenues. He draws attention to the rising emphasis on logistics. Logistics, it is clear, is an important component of a company’s smooth functioning. It also adds to its success and profitability. Some companies manage their own logistics. Others find it difficult, and would rather have it handled by a contract logistics company or companies that understand their needs. Often, the work involves complex activities like designing and planning supply chains, designing facilities, warehousing, transporting and distributing goods, processing orders and collecting payments, managing inventory and even providing certain aspects of customer service. Specialising in contract logistics, SLPL handles large number of Stock Keeping Units (SKUs ) and product lines from diverse industry sectors. “At a given point, we have a minimum of Rs.30 billion worth of inventory in our warehouses. We process around 12 million product lines per annum,” beams Palsule.

Stock management

SLPL boasts of 75 warehouses across 25 cities in India. Driven by Key Performance Indicators (KPIs) and standard operating procedures (SOPs), SLPL’s inventory accuracy at each of its warehouse is fully computerised. Stressing upon the controlled way in which his company manages stocks, Dembla avers, “We have a dedicated team to look after perpetual inventory count (real-time reporting of the amount of inventory in stock). A central team manages and audits the perpetual cycle count, updating and assigning locations as well as reporting the daily stocks.” Apart from SKUs, SLPL offers custom designed warehousing, pre-packing, labelling, pricing, kitting, de-kitting, bundling, palletisation and just-in-time delivery. “We also host a multi-user warehousing facility at Bhiwandi and Pune, and are in the process of setting up more multi-user facilities in Mumbai, Delhi, Chennai and Bangalore,” informs Dembla. Apart from multi-user warehousing facility, which translates into sharing the same physical platform and the same processes, SLPL has also invested in technology. It has increased its reliance on IT. These comprise modern systems like Warehouse Management System (WMS); Transportation Management System(TMS), which is a subset of supply chain management, and a dashboard to streamline operational processes. “Structured Query Language (SQL) forms the backbone of the database for our WMS. Customer relationship management (CRM) helps our sales backbone and POMs (Production and Operations Management). Company Roll and Oracle Financials help our corporate backdrop,” avers Dembla. The use of TMS also helps in offering PODs (Proof of Delivery) to the clients. “Such small initiatives and services help measure performance,” he adds.

To each its own

Understanding that customers have unique requirements, and expect an amount of customisation, SLPL conducts in-house training at regular intervals. It has been doing so from 2009 for its employees. Over 700 supervisors, workers and managers have undergone training in areas like warehouse operations, inventory management, racking systems and standards, material handling equipment, safety standards and the latest developments in the 3PL industry. Dembla describes the effort as a trendsetting exercise in the Indian logistics industry. He adds, “The training programme acts as a motivator for all employees and helps to minimise the attrition rate by defining a clear career path to the workers.”

Setting examples

Explaining how SLPL goes an extra mile to offer services to clients, Palsule cites a case study. “To succeed in the face of a rapidly expanding business, both organic and inorganic in nature,” he states, “the client, a global manufacturer of compressors, generators, construction and mining equipment, approached SLPL with the view of a drastic overhaul of the supply chain processes.” SLPL invested and developed facilities with superior storage systems, material handling equipment, shelving and epoxy coated flooring for them. A state of the art training centre and a workshop for repairs was made available. SLPL’s transport management capabilities not only enabled the client to have better visibility in the area of customer deliveries, it also presented it with an ability to effectively manage its resources. SLPL was able to meet the client’s goal to cut transport cycle times to reduce cash cycles and lower the inventory. “Our industrial engineering team reduced the average cycle time on orders to less than 16 hours from 30 plus hours. This directly led to reduction in inventory and a shorter cash-to-cash cycle, translating into direct monetary benefits for the client. The client’s business grew exponentially,” explains Palsule. “By providing higher accuracy of up to 99 per cent on inventory and shipments, SLPL enabled higher availability and superior customer service. Shipment errors went down – to less than 0.1 per cent, thereby reducing the cost of corrective action,” Dembla concludes.