materials management revie · materials management review june 2011 5 iimm is a charter member of...

Materials Management Review 1June 2011

Materials Management Review2 June 2011


From the Desk of The National President

Dear All,

Greetings from your National President.

I am back from Eastern Regional Conference held by Ranchi Branch and it was really a great event. Myspecial and sincere Compliments to Mr. R N Singh, Vice President (East), Mr. G K Singh, National Secretary& Treasurer and Mr. B K Singh, Chairman - Ranchi Branch and his team for the Grand Success of this Event.The Theme "Supply Chain Management in Mining and Mineral Industry - Challenges and Opportunity"was quite apt in the minerals and metals city.

In fact Ranchi Branch has set a good bench mark and potential in this region is very good. I wouldrequest all Eastern Branch to be more vibrant and active.

As I am working in a Public Sector Company - Bharat Electronic Ltd over decades I am pleased to sharesome good award winners. Standing Conference of Public Enterprises (Scope) Meritorious Award for R& D, Technology Development and Innovation was presented to BHEL by the President of India. TheScope Gold Trophy was presented to SAIL for Environmental Excellence and Sustainable Development.Bharat Electronic Ltd won the Corporate Governance Award. HPCL for Corporate Social Responsibilityand Responsiveness.

Today Public Sector Enterprises play a pivotal role in the Economic Development; We should look atthese PSUs as a great opportunity to expand IIMM Activities and net working.

Scale 2011 is being hosted by Bangalore Branch during August 2011. I request all our Members andReaders to gear up for excellent support for this event. This is one of our Signature Events and I requestparticipation from one and all.

Once again, I request for enhancing our Corporate Membership strength to a good, great level andtowards this I am prepared to render all support and assistance.

I look forward to Team work and result oriented efforts from across regions so that IIMM can grow togreater heights.

My Best wishes to one and all.

SURESH KUMAR SHARMANational PresidentEmail Id : [email protected]

IIMM - In Pursuit of Excellence in Supply Management


From the Desk of Editor-in-Chief

The Indian economy is one the fastest growing economies in the world. For the last fiveyears, the economy has registered strong growth in the range of 8-9%. The biggest challengeIndia is facing today is to ensure inclusive growth. It is important to ensure that while theIndian Economy grows rapidly; all segments of society are part of this growth process. Forthe first time India will be the global host of World Environment Day 2011 (WED) on 5June. This year's theme "Forests: Nature at Your Service" highlights the link betweenquality of life and the health of forests and forest ecosystems. World Environment Daytheme also support this year's UN International Year of Forests.

World Environment Day is celebrated to bring awareness among common people about the importance ofenvironment. Initiatives to promote low carbon economies and lifestyles through improved energy efficiency,alternative energy sources, forest conservation and eco-friendly consumption-is expected to find a much morereceptive audience. Environmental aspects are becoming more important in the recent business scenario. Whilethere is a strict requirement imposed by the Govt.'s for compliance of environmental regulations, there is alsogreater demand for environmental friendly products by the overseas buyer.

At times the environmental issues are becoming non tariff trade barriers for exports. It is one of the major reasonsfor industries in Europe and Japan for manufacturing of environment friendly products and they are changing theirbusiness strategy for future sustainability and competitiveness. Although at present, there is a limited market foreco products but there is definitely increasing trend for demand of the such products in future. In many countriesgovernment is joining hands with private industries to boost manufacture of green products and creating overallenvironment to enhance the demand of such products so as to increase the consumption pattern to achieve theultimate goal of promoting environmental sustainability.

All over the world the concept of environmentally preferable purchasing (EPP) is becoming important which istermed as green purchasing which relates to acquisition of products and services which minimize negative impacton environment over these life cycle right from acquisition, manufacturing, transportation, usage and recyclingfor disposal. Environment preferable aspects includes products and services which conserve energy, water andminimize the generation of waste and release of pollutants, products made of recycle materials and can be used orrecycle, energy from renewable resources such as bio-based fuels, solar and wind power, alternate fuel vehicleand products using alternatives hazardous or toxic chemicals, radioactive materials and bio-hazardous agents.In other words green purchasing adds environmental aspects to price and performance criteria while making thedecision of procurement of materials or services. The ultimate aim of green purchasing is to reduce theenvironmental impacts and increase the efficiency of resources. It means that application of environment criteriain the selection process before placement of supply order is the key aspect of decision making. InternationallyGermany undertook structured green public procurement activity in 1980s followed by the other European countrieslike Denmark (1994), France (1995), UK, Austria (1997) and Sweden (1998). Japan enacted the green purchasinglaw in the year 2000 to promote green purchasing as national policy. The law covers all government bodiesincluding local government to practice green purchasing.

Green buying is an important human activity, especially, business buying activity which consumes natural resourcesand finally leads to dumping as waste into environment thus contributing to environmental degradation. Naturehas the capacity to renew and regenerate its resources very slowly. The World Wildlife Fund International estimatesmention that we are using our resources 20% faster than those are replenished. The environment has a withstandingcapacity and if it is loaded with pollutants beyond its limits the system will fail. It is, therefore, an urgent need tocorrect the imbalance and Green Buying is an important corporate solution to this problem. Green buying is thepractice of buying products and services that are less harmful to this environment (land, air, water) and all thespecies including humans that depend upon the environment for survival.

Green products are those products that during its life cycle from design to production to final disposal causesminimum damage to environment in terms of waste generated, resources consumed and pollution created.

The supply chain managers can contribute to environmental protection by reducing the consumption of naturalresources, buying products with high-recycled content, reducing solid waste, having less packaging and recyclingand reusing the packages, utilizing local products to reduce transportation, using energy efficient lights, usingpaper made of recycled materials, reducing the use of disposable items and eliminating the use of plastic carrybags. I am confident that Materials Managers will raise to the occasion to achieve sustainable developmentthrough green purchasing.

(M. K. BHARDWAJ)


IIMM is a charter member ofInternational Federation ofPurchasing & Supply Management

Editor in Chief :M. K. BhardwajPast President, IIMM &Former Director Ministry of Defence

Publisher :Suresh Kumar SharmaNational President, IIMM

Core Committee :Ashok Sharma, President 5M IndiaV. K. Jain, Former ED, Air IndiaTej K Magazine, Management Advisor

Editors :Mr. C.Subbakrishna, Sr. VP - IIMMMr.V.Pathak, VP (Central) - IIMMMr. O.P. Longia, VP (North) - IIMMProf. R.N.Singh, VP (East) - IIMMMr.L.P.Patel, VP (West) - IIMMMr.P.M.Bidappa, VP (South) - IIMMMr. G.K.Singh NS&T - IIMMMr. B.V.Iyer, Imme. PP - IIMMProf.(Dr.) V. K. Gupta - IMT, Ghaziabad

Correspondence :MATERIALS MANAGEMENT REVIEW

Indian Institute of MaterialsManagementVeer Sadan, 4239-A/2,1, Ansari Road, Darya Ganj,New Delhi - 110002.Tel : (011) 23266089, 23242124Fax : (011) 23277207E-mail : [email protected]

Printed at :Power Printers,4249/82, 2 Ansari Road, Daryaganj,New Delhi - 110002

Edited, Printed & Published by :INDIAN INSTITUTE OF MATERIALS MANAGEMENTVeer Sadan, 4239-A/2, 1, Ansari Road, Darya Ganj, New Delhi - 110 002.Phones : (011) 23266089, 23242124 Fax : 011-23277207E-mail : [email protected], Website : iimm.orgPrinted at : Power Printers, 4249/82, 2 Ansari Road, Darya Ganj, New Delhi - 110002.(Published material has been compiled from several sources, IIMM disowns any responsibilityfor the use of any information from the Magazine if published anywhere by anyone.)

IFPSM

MATERIALS MANAGEMENTREVIEW

Volume 7 - Issue 8 (JUNE 2011)

C O N T E N T S

APPAREL SUPPLY CHAIN AND ITS VARIANTS 4

EROSION OF ETHICAL VALUES 8

CURRENCY EXCHANGE RATES 9

BONDED WAREHOUSES MUST BE AUDITEDONCE IN SIX MONTHS 10

COMMODITY INDEX 10

CONCERNS OF SUPPLY CHAIN MANAGERS 11

COASTAL SHIPPINGG POLICY TO BE FIRMED UP SOON 12

INTEGRATING INDIAN SME’S WITH THEGLOBAL SUPPLY CHAIN 13

WTO UPDATE: IS THE DOHA ROUND DEAD?SHOULD ANYONE CARE? 14

FAVOURABLE PROCUREMENT POLICYWILL HELP SMES: CII 15

GETTING IT RIGHT ON INFLATION CONTROL 16

CRISIS MANAGEMENT FOR LOGISTICS SECTOR 18

MATERIALS MANAGEMENT IN THE POST RECESSIONERA - BUILDING SUSTAINABLE COMPETITIVE EDGE 20

CARTELISATION BY LARGE TRADERS IS A MAJORCAUSE OF WORRY 23

GST IN INDIA : RECENT DEVELOPMENTS IN THE EU 25

OPTIMISED SUPPLY CHAIN MAY WARD OFF INFLATION 27

WORLD ENVIRONMENT DAY 2011 29

LEAN MANUFACTURING SYSTEM- A GENERIC PROCESS MANAGEMENT PHILOSOPHY 32

RISK MANAGEMENT IN CONSTRUCTION SUPPLY PROCESS 34

INTERNATIONAL NEWS 37

BRANCH NEWS 38

SOURCING NEWS 55

EXECUTIVE HEALTH 56

PAGE NO.


Apparel Supply Chain and its VariantsDebasis Daspal

Vice President, KDS Group,(Supply Chain & Operations)

Abstract: The way apparel organization embracessuperior serviceability in shaping its appropriatesupply chain configuration, will determine value

of future business. Apparel supply chain exists primarilyin three configurations to suit overall businessenvironment. Effective management of supply chain byresponding quickly to market-demand while keepingoptimum inventory, is more preferable to only efficientmanagement of supply chain by minimizing inventorywithout fast response to consumers demand.

Key Words: Supply Chain, Basic Product, Fashion-basicproduct, Fashion product, Push and Pull supply Chain.

Introduction: Many apparel organizations worldwidehave restructured themselves from vertically integratedcomposite set-up to horizontally aligned configuration.Among the various reasons gravitated the transitionfrom vertical to horizontal structure, there are theemphasis on greater organizational and processflexibility to cater volatile market demand. Also,remarkable improvement in productivity and cost ofmachinery make it increasingly risky to underutilize theentire range of production equipments-from spinning toprocessing machines kept under one roof. Cost cutting,arising out of heavy debt associated with increasingacquisition, also influences management to keeporganization lean and horizontally aligned.

However, this splitting-up of once vertically alignedorganizations into many independently working apparelcompanies, each having a separate operation, makesefficient coordination among them a must to sustainincreased competition. Also large, vertically orientedorganizations, which still exist, need to coordinate theirentire supply in light of growing inter-unit competitionfor productivity, often disregarding market priority. Thisstimulates apparel organizations to manage theirvarious activities under a new paradigm, supply chainmanagement (1).

Increasing market competition forces apparel companiesbecome efficient in managing their supply chain byreducing inventory, yet maintain the super-responsiveness to volatile market demand. Effectivesupply chain management, cutting across functionalsilos and organizations boundaries has providedintegrated solution to this challenge (2).

The article describes different types of demand patternsand inventory found in apparel sector, and a typicalapparel supply chain. Different types of supply chainsare discussed with reference to historical perspectiveand their current practice among leading apparelorganizations in India. The key findings from thesepractices are analyzed. Prime feature of any supply chainis the balancing the flow of demand by strategicallypositioning inventory at various nodes of supply chain.Therefore, two major components of supply chain-demand and inventory are discussed with respect todemand variability and inventory characteristics, beforeexplaining various types of supply chain.

Types of Demand and Inventory:Demand Pyramid:

The consumer has all kinds of demands for apparel-apparel, as manifested in fig-1. The consumer demandcan be broadly trifurcated into three segments-basic,basic-fashion and fashion apparel. Basic apparelconsists of highest volume with moderate demanduncertainty and is priced relatively low. On the otherhand, fashionable attire comprises lowest volume withvolatile demand, but is highly priced. Mass-product isthe feature of basic-product segment and customizedmerchandise becomes the hallmark of fashion-productcategory. Therefore, depending to which demand-segmentthey cater to, apparel organization needs to formulatesuitable supply strategy.

Types of inventory:


Cycle Stock: Apparel operation usually is carriedout in batches, which results into accumulated stockbefore and after a work-center unless the entire batchis completed. This kind of cycle inventory is directmanifestation of any batch process. Its leveldepends on batch-size and production rate.

Work in Process Stock: This is common to all kind ofoperation- batch and continuous. To keep running,every machine needs certain inventory, which isfallen under the present category. Type andproductivity of machinery determine the level of thistype of inventory.

Decoupling Stock: In apparel operation, seldom it ispossible to balance productivity of everyworkstation. Differential productivity between work-centers creates bottle-neck area across apparelmanufacturing chain. Decoupling stock is createdto nullify this bottleneck effect and to maintainsmooth material flow. Its level is in proportion tothe rate of differences in productivity between twowork-centers.

Safety Stock: This is a result of supply or/anddemand variability. To efficiently carrying outoperation and satisfying consumer demand,organization needs to maintain stock at certainlevel, which depends on firms policy and onfluctuation in supply/demand.

Therefore, there exist a wide gamut of demand and broadspectrum of inventory in the Indian apparel industry,which influence the types of supply chain managementgenerally practiced in the industry.

Brief description of apparel supply chain:

Definition of supply chain management as developedand used by The Global Supply Chain Forum (3): SupplyChain Management is the integration of key business

processes from end user to original suppliers thatprovides products, services, and information that addvalue for customers and other stakeholders.

The above definition is reflected in the configuration ofa typical apparel supply, shown in fig-2. As evident, theentire apparel supply chain consists of everyorganization starting from initial fibre supplier toconsumer purchasing apparel products for finalconsumption. Each organization comprises variousfunctional domains, as manufacturing, planning,marketing etc. as shown in the fig-2. Effective supplychain manages flow of demand and supply, which aremoving in the opposite direction to each other, in anefficient way at every node of supply chain.

Depending on types of demand and supply, the apparelsupply chain can be categorized principally into threekinds: Push, Pull and Synchronous.

Description of variants of Apparel Supply Chain:Push Supply Chains:

Push oriented supply chain caters to stable demand ofhomogenized products. In this type of supply chain,production and distribution decisions are based on long-term forecasts, as demand is stable. Push supply chainwas characteristic of apparel organizations during theperiod from 1950 to 1970, when they had verticalorganization structures and optimized activities focusedon functions as companies were manufacturing orientedin a demand surplus environment of mass-products (4).

However, many present apparel organizations still havepush oriented supply chain. Arvind Mills Ltd., one of thelargest denim manufacturers in the world, has configuredits supply chain based on push system. Typically, Arvindmanufactures denim sorts based on monthly forecast tostock at various warehouses. As Arvind Mills pushes itsproducts (sorts) to ware-houses, actual selling takesplace on an ongoing basis with the sold sorts beingreplaced subsequently. Push system operates undermake-to-stock environment.

While the system works efficiently at Arvind for years, itbecomes difficult for a company to follow the same wherehigh fluctuation in market demand exists. A Push-basedsupply chain accumulates excessive inventory (cyclestock and work-in-process) by the time it responds tothe changing demand. In addition, since long-termforecast plays an important role, it is difficult to matchsupply with variable demand. Push supply chain alsoentails larger production batches, incompatible forcatering demand of short quantity.

Moreover, the push supply chain generates more buffer/safety stock at every node of supply chain due to bullwhip effect (5). This is due to inability of individualmanufacturer of fibre, yarn, fabric and garment to access


the actual demand. The bull whip effect shows increasingdemand variability in the upstream direction of supplychain. Due to poor visibility of actual demand byrespective manufacturers in the apparel supply chain,each tries to build buffer against unforeseen demand-variability. As each member superimposes its own guesson the demand forwarded by its immediate nextorganization, this amplifies the demand variability in aprogressive manner in the upstream direction of supplychain.

Pull Supply Chains:

In the timeframe from 1970 to 1990, corporations wereof both vertically and horizontally aligned, but apparelcompanies increasingly oriented towards market tosustain increasing competition. (6). With the emergenceof more volatile market-demand and powerful retailers,like Wal-Mart, K-Mart, apparel organizations unable tosupply competitively small orders that seldom repeat.Long forecast-based production results into huge stockspiling up at every stage of supply chain. Thisaccumulation of inventory is further aggravated due tobullwhip effect.

To survive in this competitive scenario, organizationsfine-tune their production and distribution as per actualdemand given by customer in a pull oriented supplychain. This enables reduction of unnecessary bufferstock, improvement in service level to supply whatconsumer wants, not what company makes.

Raymond Ltd., the prominent apparel organization inIndia, has configured its supply chain based on pullsystem (7). The customers pull what they want from themanufacturing-base of Raymond through dealer-baseddistribution network. Entire supply chain of Raymond,which has vertically integrated composite network ofdifferent operations, produces only as per demand ofcustomers.

However, as the entire supply chain is driven by actualdemand, the time to market becomes long, depending ontype of supply chain and number of players involved init. Typical cycle time from order to market is 60 to 90days in a pull or make-to-order system. This long lead-time fails to address the other challenge of the market,i.e. quick response to customer demand. Also in a pullstrategy, it is not possible to get advantage of economiesof scale, since batch production or truckloads are hardto achieve. Another disadvantage is proliferation ofproduct mix. Moreover, as consumers demand drivesmanufacturing, it is normal for management to introduceas many variants as possible to capture market share.However, increasing product diversity spawns significantoperational problems and reduces the responsivenessof the supply chain (8).

Push-Pull Supply Chains:

Starting from 90s, apparel corporations all over theworld have experienced increasing national andinternational competition and have initiated horizontalalignment with leaner structure to better addressdynamic demand situation in a capacity surplusenvironment. (9). The shift has taken place in themarketplace from mass products to customized products.In distribution channel, giant retailers like Wall Mart,K-Mart exercise even more power to the supply chain(10).

As mentioned in previous sections, the disadvantagesof Push and Pull supply chains along with changes inglobal business landscape have forced companies tolook for a new supply chain strategy that takes advantageof the best of both world. This results into a hybrid of thetwo systems Push-Pull supply chain system.

Push-Pull is also termed as synchronous supply chain.In this strategy, the initial stages of the supply chain areoperated based on Push system, and the final stages areoperated on Pull strategy. The interface between the Push-based stages and the Pull-based stages is referred asthe Push-Pull boundary.

Consider the case of Morarjee Brembana Ltd., the leaderin 100 percent cotton high-value shirting fabricmanufacturer, which out-sources greige yarn based onforecast, and weaves and processes to produce qualitiesas per actual demand of customers. This implies thatsupply chain of Morarjee Brembana is divided into twoparts. The Push part is the part of the Morarjee supplychain prior to weaving, while the Pull part is the part ofthe supply chain that starts with weaving and is basedon actual customer demand. Indeed, demand for yarn isan aggregation of demand of all finished products thatuse this component. Since aggregate forecasts are moreaccurate, uncertainty in component demand is muchsmaller than uncertainty in finished goods demand. This,of course, leads to safety stock reduction.

Postponement, or delayed differentiation, in productdesign is also an excellent example of a Push-Pullstrategy. In postponement, the firm designs the productand the manufacturing process so that actual productdifferentiation can be deferred as much as possible downthe pipeline when actual demand is known. Thus, theportion of the supply chain prior to productdifferentiation is typically based on push strategy, andthe portion of the supply chain starting from the time ofdifferentiation is based on Pull system. Postponementcan be done based on time, place and form.

Conclusion:

Following insights are arrived at from the abovediscussions:


Design of supply chain configuration depends onclock-speed of organization. Clock-speed oforganization is the speed with which the product-portfolio and process change in response to marketdemand. So, organization having low clock-speed,i.e. with relatively stable demand may have pushoriented supply chain. On the other hand, a highclock-speed organization with variable marketdemand may have pull oriented supply chain.

In the Push portion of a Push-Pull supply chainstrategy the focus is on cost while in the Pull portionof the strategy, the focus is on service levels.

In a Push-Pull strategy, the Push part is applied tothe portion of the supply chain where long-termforecasts have small uncertainty and variability.On the other hand, the Pull part is applied to theportion of the supply chain where uncertainty andvariability are high and therefore decisions are madeonly in response to real demand.

In a Push-Pull supply chain, inventory is minimizedas it is designed to eliminate the safety stock bymake-to-order and long cycle-time is reduced bypre-arranging/ pre-manufacturing part of the supply.

It is found that management of apparel supply chainmoves from push to pull and finally to synchronoussystem. However, all three kinds of supply chainmanagement co-exist in apparel industry asappropriate supply chain strategy depends on theindustry, the company, and individual products. Thehigher the uncertainty in customer demand, thebetter to manage that part through Pull strategy

Internet and related technology bring apparelmanufacturer closure to actual consumer, with aneed to cater individual choice in short time. Thiscoupled with the variable demand of consumermakes it mandatory for organization to handlesingle item in short quantity in place of multipleitems each in large quantity. This shift alsoincreased the importance and the complexity ofreverse logistics to efficiently handle customer-return.

Supply chain efficiency is about minimizing inventory,while responsiveness is about increased customerservice. In a volatile market driven by flickeringconsumers moods, these two dimensions of supply chainmanagement are often irreconcilable. Conflict betweenefficient supply chain and responsive supply chain hasdriven the evolution of supply chain configuration tobetter addresses both inventory and serviceability issue.By choosing right kind of supply chain with respect tomarket demand, infrastructure etc., apparelorganization can address both issues effectively andmaximize the value offering.

The way apparel organization embraces superiorserviceability in shaping its appropriate supply chainconfiguration, will determine value of future business.Supply chain management deals with not only supplyfrom manufacturers, but also demand from consumersfiltered through various agencies. More than efficientlymanage the supply chain, apparel organizations needto effectively manage the entire supply chain keepingboth optimization of inventory level and fastresponsiveness to market demand in mind.

Reference:

1) Daspal, Debasis. Supply Chain Management- AnIntegrated Solution to Apparel Industry, Journal ofApparel Association, July-August, 2003.

2) Daspal, Debasis. Integrated Supply ChainManagement, Asian Apparel Journal, July 2003.

3) Lambert, Douglas M., Martha C. Cooper and JanusD. Pagh, Supply Chain Management: ImplementationIssues and Research Opportunities, TheInternational Journal of Logistics Management, Vol.9, No. 2 (1998), pp.1-14.

4) David Rigby, David Rigby Associates; APPAREL SUPPLYCHAIN MANAGEMENT: NEW PROBLEMS, NEWSOLUTIONS, A paper presented to the InternationalConference of the Society of Dyers and Colourists atBuxton, Derbyshire, UK on 1 October 1992.

5) Daspal, Debasis. , Supply chain management- tocater growing needs of market, The Indian ApparelJournal, July 2003.

6) Supply Chain Management in Theory and Practice:A Passing Fad or a Fundamental Change, CharuChandra & Sameer Kumar; http://h o m e . s a n d i e g o . e d u / ~ c d s / S C S /S u p p l y % 2 0 c h a i n % 2 0 m a n a g e m e n t % 2 0 i n %20theory%20and%20practice.pdf

7) Daspal, Debasis. Importance of production planningin supply chain, The Indian Apparel Journal,October, pp.74-87, 1998.

8) Daspal, Debasis. Judicious product mix vital formills, The Indian Apparel Journal, October, pp.66-69, 1997.

9) Aberdeen, Aberdeen Group. Advanced PlanningEngine Technologies: Can Capital GeneratingTechnology Change the Face of Manufacturing?,February 1996. (White Paper).

10) Wood, Freddie. Succeeding in apparels in thenineties, Apparel World, September, pp.102-112,1993.


Much more often, we believe, employees bend orbreak ethics rules because those in charge are blindto unethical behavior and may even unknowinglyencourage.

A compact car once produced, had tendency in rear-end collisions to leak fuel and explode into flames.More than two dozen people were killed or injured

Engineers had discovered the potential danger ofruptured fuel tanks in preproduction crash tests, but theassembly line was ready to go, and the company's leadersdecided to proceed also because of the competition,.Many saw the decision as evidence of the callousnessand greed. However the executives involved thought ofit as purely a business decision rather than an ethicalone. The company probably conducted a formal cost-benefit analysis-putting amounts on a redesign cost,delay in launch, potential lawsuits, and even lives-anddetermined that it would be cheaper to pay off lawsuitsthan to make the decision of redesign. The executives incharge of the car were consciously unethical or thatthey intentionally sanctioned unethical behavior bypeople further down the chain of command. But theexecutives today also are swayed by similar forces.However, few grasp how their own cognitive biases andthe incentive systems they create can conspire tonegatively skew behavior and obscure it from view. Onlyby understanding these influences can leaders createthe ethical organizations they aspire to run. The Barriersto an Ethical Organization can be following;

Ill Conceived Goals

The most common problem is that sales forces maximizesales rather than profits because rewarding is based onsales rather than profits. When a management gavetechnicians a goal of higher amount an hour-presumablyto increase the speed of repairs. Rather than work faster,however, employees met the goal by overcharging fortheir services and "repairing" things that weren'tdefective. The pressure at accounting, consulting, andlaw firms to maximize billable hours creates similarlyperverse incentives. When employees behave inundesirable ways, it's a good idea to look at what you'reencouraging them to do

USA with very good intention to increase the nationalhomeownership promoted paper-thin down paymentsand pushed for ways to get lenders to give mortgage

Erosion of Ethical ValuesShri V.K. Jain

Former Director Air [email protected]

loans to first-time buyers with shaky financing andincomes. It' pushed prices up by increasing demand,and later led to waves of defaults by people who nevershould have bought a home in the first place.

Rewarding employees for achieving narrow goals suchas exact production quantities may encourage them toneglect other areas, take undesirable "ends justify themeans" risks, or-most important from our perspective-engage in more unethical behavior than they wouldotherwise. Leaders setting goals should take theperspective of those whose behavior they are trying toinfluence and think through their potential responses.This will help head off unintended consequences andprevent employees from overlooking alternative goals,such as honest reporting, that are just as important toreward if not more so. When leaders fail to meet thisresponsibility, they can be viewed as not only promotingunethical behavior but blindly engaging in it themselves.

Motivated Blindness

People see what they want to see and easily misscontradictory information when it's in their interest toremain ignorant-a psychological phenomenon knownas motivated blindness. This bias applies dramaticallywith respect to unethical behavior.

Part of the answer lies in powerful conflicts of interestthat helped blinds them to their own unethical behavior.The rating agencies purpose is to provide stakeholderswith an objective determination of the creditworthinessof financial institutions and the debt instruments theysell and are paid by the companies they rate. Theseagencies made their profits by staying in the good gracesof rated companies, and in doing so they may not beable to provide the most accurate assessments of them.Furthermore, the agencies may provide consultingservices to the same firms whose securities they rate.

Consider the world of sports, the managers blind foldthemselves o the use of steroids under the garb ofmedicine so as to enhance the performance of the team

It does little good to simply note that conflicts of interestexist in an organization. Executives should be mindfulthat conflicts of interest are often not readily visibleand should work to remove them from the organizationentirely, looking particularly at existing incentivesystems.


Indirect Blindness

A reputed pharmaceutical firm "XXX" sold off twoimportant and upcoming drugs, to allow it to increasethe prices by more than 1000% but continued tomanufacture the drugs for them .It is assumed that thecompany did not prefer a headline like "XXX " IncreaseDrug Prices by 1,000%..Such an action is to avoid holdingmanagers and organizations accountable for unethicalbehavior carried out through third parties, even whenthe intent is clear.

Managers routinely delegate unethical behaviors toothers, and not always consciously. They may tellsubordinates, or agents such as lawyers andaccountants, to "do whatever it takes" to achieve somegoal, all but inviting questionable tactics. For example,many organizations outsource production to others atlower costs, may be at the cost of environment, safetystandards and even with unethical practices. Executivesshould ask, "When other people or organizations dowork for me, am I creating an environment that increasesthe likelihood of unethical actions?"

The Slippery Slope

You've probably heard that if you place a frog in a pot ofboiling water, the frog will jump out. But if you put it in apot of warm water and raise the temperature gradually,the frog will not react to the slow change and will cookto death. Neither scenario is correct, but they make afine analogy for our failure to notice the gradual erosionof others' ethical standards. If we find minor infractionsacceptable, research suggests, we are likely to acceptincreasingly major infractions as long as each violationis only incrementally more serious than the precedingone.

Now imagine an auditor of a large company. For manyyears the client's financial statements are clean .Theauditor then notices that the company stretched but didnot appear to break the law in a few areas. Such a noncompliance is not reported. The next year the company'saccounting is worse and includes a minor violation ofaccounting standards. By the third year the violationhas become more severe.

Overvaluing Outcomes

Most managers are guilty of rewarding results ratherthan high-quality decisions. An employee may make apoor decision that turns out well and be rewarded for itor a good decision that turns out poorly and be punished.Rewarding unethical decisions because they have goodoutcomes is a recipe for disaster over the long term.

Managers can make judgment mistake, overlookingunethical behaviors when outcomes are good andunconsciously helping to undermine the ethicality oftheir organizations. They should beware this bias;examine the behaviors that drive good outcomes, andreward quality decisions, not just results.

The Managerial Challenge

Companies are putting a great deal of energy into effortsto improve their ethicality-installing codes of ethics,ethics training, compliance programs, and in-housewatchdogs. Initiatives like these don't come cheap. Ifthe money on compliance initiatives is well spent, thenhow is that non compliance of the laws and regulationsthat have been enacted is on the increase and unethicalbehavior is on the rise.

This is disappointing but unsurprising. Even the best-intentioned ethics programs will fail if they don't takeinto account the biases that can blind us to unethicalbehavior, whether ours or that of others. What can youdo to head off rather than exacerbate unethical behaviorin your organization? Avoid "forcing" ethics throughsurveillance and sanctioning systems. Instead ensurethat managers and employees are aware of the biasesthat can lead to unethical behavior. And encourage yourstaff to ask this important question when consideringvarious options: "What ethical implications might arisefrom this decision?"

Above all, be aware as a leader of your own blind spots,which may permit, or even encourage, the unethicalbehaviors you are trying to extinguish

Bibliography; HBR - April 2011

CURRENCY EXCHANGE RATEINR

Australian Dollar (AUD) 47.99Bahraini Dinar (BHD) 119.47British Pound (GBP) 73.10Canadian Dollar (CAD) 46.22Chinese Yuan (CNY) 6.93Danish Krone (DKK) 8.55Euro (EUR) 63.75Hong Kong Dollar (HKD) 5.79Iraqi Dinar (IQD) 0.04Japanese Yen (JPY) 0.55Kuwaiti Dinar (KWD) 162.86Omani Rial (OMR) 116.98Pakistani Rupee (PKR) 0.52Qatar Rial (QAR) 12.37Saudi Arabian Riyal (SAR) 12.01Singapore Dollar (SGD) 36.37South African Rand (ZAR) 6.51Swedish Krona (SEK) 7.14Swiss Franc (CHF) 51.34UAE Dirham (AED) 12.26US Dollar (USD) 45.03

Source : Rediffmail.com dated 20th May, 2011


We have a private bonded warehouse licensedunder Section 58 of the Customs Act, 1962. Wekeep facing audits every now and then. We also

face all types of questions that we think are unnecessary.Is there any instruction regarding the periodicity of theaudit and what should be audited?

As per CBEC Circular no. 52/98-cus dated 27.07.1998,bonded warehouses shall be audited by the audit partiesonce in six months, supported by surprise checks bysenior officers. The audit parties, in addition to normalaudit of the documents of a warehouse, shall pay specialattention to the following aspects:

(i) The description of goods, nature, number andother relevant particulars mentioned in into-bondBills of Entry shall be matched with correspondingex-bond Bill of Entry;

(ii) Status report regarding consignments pending forone year and above should be cross- checked inthe Customs House where the warehousing Billsof Entry had originated;

(iii) All the consignments, which continue to lie in awarehouse after expiry of the warehousingperiod, should be taken up for scrutiny in orderto guard against deterioration, substitution orother unlawful removal. The latest CBEC Manualof Supplementary Instructions, 2011 reiteratesthese instructions.

Under the Right to Information Act (RTI), we want to callfor names of corrupt staff members from the customsand excise departments in Bangalore and also know thestatus of various cases against them. Can we get the

information from the departments concerned?

In the case of Superintendent of Police, Chennai Vs. RKarthikeyan [2011 (266) ELT 456 (MAD.)] the MadrasHigh Court had held that information must be furnishedto the applicant under the RTI Act regarding the namesand addresses of the officials caught during a raid bythe Directorate of Vigilance and Anti-Corruption,Chennai, along with the amount recovered from eachofficial, as well as the details of the departmental actiontaken against each official, the details of prosecutionlaunched against the officials under the Prevention ofCorruption Act, the status of such prosecution againsteach official and whether the persons whose names werefurnished were re-instated in service and, if so, the dateon which they rejoined the service as well as the detailsof list of action taken by the department to preventcorruption at Police Station/Branches/Wings in Chennaicity. The High Court also held that information must befurnished to the applicant under the RTI Act regardingthe number of investigations completed, convictionsarrived at in the last five years, list of persons convictedin the last five years with reference to their names, thepost in which they have committed corrupt practices,description of charges and the recommendation givento the Vigilance Commissioner after investigation. Basedon this case law, I am of the opinion that you can call forsimilar information from your Customs and Excisedepartments under the RTI Act. You may not getinformation about corrupt staff members who are yet tobe caught.Source : Business Standard

COMMODITY INDEXCommodities Days’s Index Prev. Index Week Ago Month Ago

Index 2188.9 2193.3 2196.9 2274.3Bullion 5080.2 5140.2 5223.5 5862.8Cement 1734.9 1734.9 1794.7 1765.1Chemicals 1437.9 1437.9 1425.4 1635.8Edible Oil 1442.1 1435.5 1407.2 1372.6Foodgrains 1755.3 1755.7 1754.1 1790.3Fuel 1828.0 1828.0 1728.9 1728.9Indl Metals 1629.8 1617.1 1625.6 1583.1Other Agricom 1741.1 1734.7 1744.8 1666.3Plastics 1789.1 1789.1 1807.8 1870.8

Source: ET Intelligence Group Database dated 20th May 2011

'Bonded warehouses must be auditedonce in six months'

TNC Rajagopalan


As international firms increase their presence inIndia, either directly or through joint ventures withdomestic firms, companies here are raising the

bar for logistics service providers. On the other hand,while logistics service providers (LSPs) gear up for thechallenge; they also have concerns about customerunwillingness to pay more for such services.

Organised retailers want on-time delivery, to the extentof providing a window of specific hours. But malls don'tallow parcels to be brought in anytime. There are timezones. For instance, when customers are crowding themalls, firms do not want them to have a bad shoppingexperience with cartons being shifted around.

TIME FACTOR

“We had to work out with our LSPs' certain specific timeschedules when they deliver. We pay a premium for thisservice,” Ms Shivi Yadav, head of Supply Chain, Marksand Spencer Reliance Pvt Ltd, said.

With the organised retailers facing a competitive markethere, their target is to make the right product availableat the right time. Therefore, expectations from the LSPare widening.

“We expect LSPs to propose the best (transportation)network and sites, help us in tagging, labelling and ordermanagement. We also expect the logistics serviceprovider to provide inputs on the scope for anyimprovement in the present network,” Ms Yadav said.She was speaking in a logistics seminar recently.

However, Mr Shantanu Bhadkamkar, Managing Director,ATC (Clearing and Shipping) Pvt Ltd, pointed out a specificexample of how contracts between customers and LSPsare skewed in favour of customers and not the LSPs.

“One contract had these terms: If a truck arrived at thecustomer premises late by one hour, the LSP had to pay apenalty of Rs 5,000; but if the LSP's truck was detainedfor a day at the customers' end, the customer wasrequired to pay a penalty of Rs 500,” Mr Bhadkamkarexclaimed.

BUSINESS CONTINUITY

However, on this issue, Mr Nihar Barot, who headslogistics and planning for Sony India, says: “The thoughtprocess is changing. If I know that my LSP understandsmy business and will maintain my business continuity,then I am willing to pay the price.”

“Customers are becoming demanding as more and moreIndian firms become MNCs. They are willing to pay apremium for better services,” said Mr Ajay Chopra, CEO,Drive India Enterprise Solutions Ltd, a Tata groupcompany. For consumer electronics players, handling

Concerns of Supply Chain ManagersMamuni Das

supply chains in a fast-changing technologyenvironment — leading to shorter product life-cycles —is a problem. What is the inventory one is willing tocarry for a product that is going to phase out in sixmonths?

Pilferage and damage during transit is another challengefor Sony India. “We use airfreight. A forklift operatorknows that a Sony parcel is likely to have high-valueitems such as mobile phones, cameras. When ourshipment arrives, there are missing items or damagedcameras and cell phones,” Mr Barot said.

Summing up, Mr Barot said: “You have to have visibilityacross the entire supply chain, while trying to reduceinventory time, and while keeping the product life-cycleshort.”

COLD CHAIN

The problem is slightly different for pharma companies,which want an end-to-end cold chain, and flexibility tomeet sudden spikes in demands.

“I ask domestic LSPs… can you manage my cold chain?Often, I do not get a reply,” says Mr Prashant Sharma,Senior Vice-President, Global-demand-supplyorganisation and Global IT, Zydus Cadila.

The pharmaceutical industry faces sudden demandspikes following black swan events. “Completelyunforeseen events, like the nuclear disaster in Japan,throw up very high demand for certain kinds ofmedicines. And the demands have to be met immediately.We cannot say ‘wait for a month and we will meet thedemand',” Mr Sharma said.

LIFETIME VALUE

Meanwhile, Future Supply Chain Solutions, which handlesthe supply chain of Future Group outlets, has to buildexpertise across all categories of products it stores. “Weneed to understand each supply chain almost as well aspeople in that line of business. We have to understandFMCG business as well as FMCG majors, and that offurniture as well as furniture players,” Mr SupratimGanguly, Head-Contract Logistics, Future Supply ChainSolutions, said.

The company tries to “capture the lifetime value of acustomer”, or get the customers to buy most of hisrequirement from Future Group outlets. “So, we even takecare of details like the experience of customers whenour staff visit their homes to deliver or install someproduct, which could be from electronic items to wood-work (cupboards, furniture) being done for Hometowncustomers,” Mr Ganguly said.Source: Business Line


Coastal Shippingg Policy to be firmed up soonM. K. Mohandas,

Secretary, Ministry of Shipping

With a coastline of 7,517 km, the maritime sectoris important for India, for both commercialand strategic reasons. About 90 per cent of

volume and 70 per cent of the value of the country'sinternational trade moves through maritime transport.In this context, the Shipping Ministry is looking atvarious ways of streamlining operations in this dynamicsector — from creating a common regulatory regime forprivate investors in ports, to tracking the charges leviedby shipping lines, and from improving coastal trade tomanpower supply for the sector. Mr K. Mohandas,Secretary, Ministry of Shipping, spoke to Business Line,on these and other issues.Excerpts from the interview:Has the methodology to issue Rs 5,000 crore of tax-freebonds as announced in the Budget been finalised? Whowill issue, and who can use, them?Not yet. We will be discussing it soon to work out thestrategy. We have two options. One is to set up a neworganisation that will issue the bonds, as we have noapex maritime financing body. The other option is toask one of the existing financial institutions to raise thefunds for ports infrastructure. On setting up a separateagency (that was proposed in the maritime agenda), wehave to decide whether to do it now, or later, or don't doit at all.The Ministry has proposed to bring in a new regulatorfor ports. What will happen to the existing concessions,and terminal operators, for which TAMP (Tariff Authorityof Major Ports) is already the regulator?The draft for new regulator is already out. We haveproposed a dual structure regulatory mechanism —Central and State. Regulators will not fix tariffs. For themajor ports, there will be some guidelines for tarifffixation. Once this is enacted, the detailed rules can befinalised. As for existing concessions, guidelines to settariffs were finalised in 2005. They were valid till March31, 2010. We extended the validity by a year. It lapsedon March 31.They are due for revision or extension. We had set up agroup committee with officials from the Ministry andindustry to suggest a new mechanism. The committee,which was supposed to have given in its report by now,has not yet done so. Temporarily, we will extend theearlier guidelines. Once we get the report, we can decide.Could you share with us some issues which are beingreviewed?I would like to wait for the report of the committee…Oneof the issues to be tackled is a view that efficiency ispenalised in the current system. But, even while we tacklethat, we have to ensure that terminal operators do notmake windfall profits. So, we have to strike a balance.What is the status of the Shipping Trade Practices Bill?

The draft is ready. We are making some last minuteadditions, which relate to voluntary discussions andagreements among the liners. We want to incorporateprovisions governing the liners co-operatives. That hasalso been drafted. Now, we have to get requisiteapprovals. The aim is to ensure competition in thecontainer liner shipping services area so that the usersdo not suffer, but permit cooperation subject toregulatory control.Are they on the lines of the strict EU anti-trust rules….?Different regions have different rules. The EU is quitestrict, the US has a different policy. What we are lookingat is whether they (the voluntary agreements) add toefficiency and reduce costs. We are taking into accountthe fact that the industry is going through difficult time.Has there been any movement on the Ministry's proposalfor the new shipbuilding subsidy scheme?Not at the moment.The Ministry was concerned about the issue of makingmore training berths for seafarers?Getting a training berth is a very important issue. Indianseafarers are seven per cent of the total seafarerpopulation. That means we are not fully utilising ourdemographic dividend. We need more training berths.Of course, there are not many Indian shipping lines. Butstill, the focus has to be increased.Has there been any movement on the getting Governmentto fund the capital and maintenance dredging?As of now, the current practice continues. Several capitaldredging projects have been supported by Government— fully and partially. But this is an ad-hoc policy. Wewill try to redouble our effort in the Twelfth Plan. Shipsizes are increasing, we need deeper draft and a policyis needed on the issue. Maintenance dredging is fundedby all ports themselves, except in Kolkata, whereGovernment funds it.The Ministry had proposed setting up of an investmentagency called Indian Ports Global, on the lines of TemasekHoldings' PSA in Singapore. Has there been any actionon that issue?Not yet. But it is an important proposal. Ultimately, theMinistry, Government will have to take a leadership. Wedo consider it very important commercially, andstrategically as well.In the context of promoting coastal shipping, what is thestatus of the proposal on relaxation of Cabotage Law toallow foreign shipping lines?The proposal is very much live with us. We will be takinga view on it. We have had inter-ministerial discussionsalready. We will bring out the overdue coastal shippingpolicy very soon.Source: The Hindu Business Line


Integrating Indian SME’S with theGlobal Supply Chain

India-US Technology Trade Agreement Proposes toImprove Logistics Infrastructure & Services in India

Shri Anand Sharma, Union Minister for Commerce& Industry, in a bilateral meeting with Senators ofdifferent US province to name Mr. Mitch McConnell,

Senator, United States (R-Kentucky), Mr. Thomas Carpet,Mr. Mike Johanns, Mr. Zerry Moran, Mr. Robert Portman,and Mr. John Hoeven, here today.

The Minister expressed optimism over the growing tradeand investment relations between the two countries. ShriSharma during the bilateral meeting stated that, “Thetwo countries have launched an initiative of integratingU.S. and Indian SMEs in the Global Supply Chain, whichwould create new opportunities for U.S. and Indian SMEs.This in turn will help the large firms in the dynamic U.S.-India commercial relationship through greater publicawareness, enhanced public-private collaboration, anda sharper focus on the benefits of large company andSME collaboration”.

Shri Sharma appreciated the development of the India-US Trade policy Forum (TPF), the arrangement betweenthe two Governments to discuss trade and investmentissues. The TPF is co-chaired by Minister of Commerce &Industry, Government of India and United States TradeRepresentative. The issues and concerns are discussedunder five Focus Groups – Agriculture, Tariff and NonTariff Barriers, Services, Innovation and Creativity,Investment. He told the senators that, India and USA havesigned a Framework for Cooperation in Trade andInvestment.

The Framework aims at facilitating trade and investmentflows between the two countries, developing andimplementing trade policies through transparentprocedures that comply with international obligations,foster an environment conducive to technologicalcollaboration and innovation and promote inclusiveeconomic growth and job creation in the United Statesand India. Under the framework, the chairs of India USTPF will convene the ministerial level Trade Policy Forum

each year for a review of the work undertaken by theFocus Groups. The Deputy Chairs will meet at least twiceeach year to review the work of the Focus Groups, identifypossible new initiatives, address problems that mayarise, and prepare for the annual Trade Policy Forummeeting. Each Focus Group will consult as often asnecessary but no less than twice per year, to advancetheir work.

Both the countries have agreed to work upon the India-US Technology Trade Agreement Proposal on ImprovingLogistics Infrastructure and Services in India -Stimulatingcontribution by the US private sector Proposal onDelivering Urban Infrastructure in India: Avenues forIndo-US participation. The India US Commercial Dialoguewas signed on March 23, 2000 and is an institutionalarrangement between US and Department of Commerceaimed at facilitating trade and maximizing investmentopportunities across a broad range of economic sectors,including IT, infrastructure, biotechnology and services.Shri Sharma observed that, “ While renewing the dialoguein 2010, India has placed greater emphasis oninvestment opportunities in both countries especiallyin manufacturing and in areas of high technology,emerging technologies and collaborative research”.

India’s export to US in 2010-11 (up to December 2010)US $17,629.72 million and export growth was to thetune of 27.9%. Imports for the same period is to the tuneof US $ 13,106.98 million. Import registers the growth of-1.80 %, during the same period. Major items of exportfrom India includes: Gems & Jeweller, Cotton, Drugs,Pharmaceuticals & F ine Chemicals, Machinery &Instruments. Major commodities imported from the USincludes: Transport Equipments (Including Aircraft,Spacecraft and parts thereof), Machinery, ElectronicGoods, Fertiliser, Pearls Precious Semi-precious Stones,Professional Instruments, Chemical Material & Productsand Plastic Materials.

Source: Newspaper


WTO UPDATE

Is the Doha Round Dead?Should Anyone Care?

Ujal Singh Bhatia, India’s Ambassador, WTO

The failure of the Round will raise questions aboutthe G20’s legitimacy, and conversely, the group’sefforts to ensure a successful conclusion will

symbolise a global resolve to address such challenges.

As the Director General of the World Trade Organisation,Pascal Lamy is its chief cheerleader, pushing, cajoling,coaxing members to show just that extra flexibility tomelt the frozen impasse around the Doha Roundnegotiations. He is also the public face of theorganisation, tirelessly preaching the virtues of freertrade flows. He has performed that job admirablythrough the tortuous grind of the negotiations.

His address to the Trade Negotiations Committee of theWTO on 29 March therefore makes curious reading:“Now is the time for all of you, and in particular thoseamong you who bear the largest responsibility in thesystem, to reflect on the consequences of failure. To reflecton the costs of the non-Round to the world economy aswell as to the development prospects of members, inparticular the smaller and least-developed which aremore dependent on an improved set of global trade rules.And above all, it is time to think about the consequencesof the non-Round to the multilateral trading systemwhich we have so patiently built over the last 70 years.It is the time to think hard about multilateralism, whichyour leaders, yourselves and myself preach at everyoccasion. In politics, as in life, there is always a momentwhen intentions and reality face the test of truth. We arenearly there today."

So why is Lamy challenging WTO member-countries toface “the test of truth"? Why does the Doha Round,launched with fanfare in 2001 as “the DevelopmentRound," with the declared intention of completion withinthree years, continue to hover uncertainly in the etherzone in 2011? Is the Round effectively dead?

The immediate provocation for the present bout ofheightened activity in Geneva was the reaffirmation byG20 leaders, in Seoul in November 2010, of theircommitment to a prompt conclusion of the Round. Soplans were drawn up for intensive consultations in early2011 leading to new texts on key issues by the springand an informal meeting of Ministers by summer tofinalise the broad agreements, based on which the Roundcould be concluded by the end of the year.

Someone obviously forgot to inform the negotiators. Inthe consultations so far, they have largely stuck to theirpositions and there has been no narrowing of gaps onthe key outstanding issues over the last three months.The lack of progress calls into question the rationale fornew texts and therefore, the rationale for a Ministerialmeeting. A bruising, underprepared and inevitably highprofile meeting of Ministers with little prospects foragreement, can only serve to highlight to the world thatthe WTO remains gridlocked.

Behind the dichotomy between the platitudes of theleaders and their negotiating positions lies the realityof a changed global economy. Earlier negotiations inGATT were propelled by business interests in developedcountries, in search of new market access. With theirmarket positions in their home turfs secure, they soughtnew horizons, especially in emerging markets. The rapideconomic liberalisation across the world over the lasttwo decades has changed many things. Market access isno longer the constraint it was in the past.

But apart from the unprecedented opening of markets,the period has also witnessed the emergence of highlycompetitive manufacturing centres in several emergingeconomies. As a result, businesses in developedcountries are increasingly feeling the heat of competitionin their home markets. Therefore, their support for furtherliberalisation through the WTO process is moreequivocal than in the past.

On the other hand, while businesses in emerging marketsneed open global markets, many of them are still in theprocess of consolidating their positions in their homemarkets. In short, unlike in the past, there are fewdemandeurs among business interests, pushing for theearly completion of the Doha Round. As a result, theonus of support for completing the Round has shifted togovernments and they must do so not only for systemicreasons but also with the recognition that the Roundwill make a positive contribution in addressing globalchallenges.

For instance, the political turbulence in the Middle Easthas much to do with the limited employmentopportunities for the millions of youths entering thelabour market every year. Similar situations prevail inmuch of the world. The answer lies in creating greatertrade opportunities, greater openness, including in


labour markets. The Doha Round can help.

Despite the hype to the contrary, there is much more onthe table in this Round than in any previous Round.Industrial tariffs in developing countries will go downsharply for most products; tariff peaks on such productsin developed countries will disappear; agriculturaltariffs will also be reduced substantially, though not assharply as for industrial goods; export subsidies foragricultural products will be eliminated; permissiblelimits on trade distorting domestic subsidies onagriculture will also come down sharply; a large numberof new sectors and subsectors in services will comeunder binding commitments for market access,especially in developing countries; disciplines will beintroduced, for the first time, on fisheries subsidies toaddress the global problem of overfishing; disciplineson anti-dumping and subsidies will be tightened toprevent their abuse; a new agreement on TradeFacilitation will make it easier for trade to flow.

The special dispensations being provided for smallerdeveloping countries and LDCs (least developedcountries)will facilitate their greater participation inthe global trading system. These outcomes add up to avery substantial result for the global trading system.

Closer links between large and small units willbenefit the entire supply chain. Many of theproblems faced by micro, small and medium

enterprises (MSMEs) - lack of structured markets,delayed payments from large customers, low availabilityand high cost of capital, obsolete technology and lackof skilled manpower - can be addressed throughpreferential procurement of goods and services producedby MSMEs, according to a paper by the Confederation ofIndian Industry (CII).

Such a procurement policy would be a powerful tool forexercising a positive influence on the fortunes of MSMEs,considering that the government and public sector units(PSUs) are the biggest buyers in the country, accordingto CII.

The paper notes that Australia, Brazil, China, theEuropean Union, the UK and the US all have preferentialprocurement policies favouring small businesses.

The MSME Development Act, 2006 does in fact stipulatethat the central and state governments "may, by order,notify from time to time" such preferential procurementpolicies. Accordingly, the Union government's MSMEministry is drawing up a public procurement policywhich provides that 20 per cent of Central/State

They will enhance global trade flows and make themmore predictable and robust.

Despite this impressive list of outcomes, the Roundremains hostage to bickering by a few to garneradditional gains to appease their constituencies. Sadly,there is little in the present situation to suggest that thewisdom and leadership of statesmen will trump thenarrow mercantilism which has led to the impasse.

The failure of the Doha Round is no longer the theme ofhabitual doomsayers, but a real possibility. Thecontinuing differences require the balm of a politicalsettlement, not the slow poison of negotiating attrition.The Doha Round is therefore a major litmus test for theleadership credentials of the G20. The failure of theRound will raise troubling questions about the G20’slegitimacy. Conversely, the G20’s intervention to ensurea successful conclusion will symbolise a strong globalresolve to address global challenges in a cooperativemanner.

The writer was India’s Ambassador to the WTO, Genevabetween 2004 and 2010

government and PSE procurements will be made fromMSMEs over a period of three years. The policy is at thedraft consultative stage.

CII quotes Union Ministry of MSME Secretary UdayKumar Varma as saying, "Notification of the proposedPublic Procurement Policy...will offer a much neededand less optimally used avenue for increasedconsumption of MSME products by Governmentdepartments and PSUs."

The paper also suggests that the government andgovernment agencies need to fashion a policy providingfor buying, on a much larger scale, productsmanufactured by women, in order to help in the uplift ofwomen entrepreneurs. CII has suggested that thegovernment should provide tax benefits to companiesthat source from MSMEs and notify a preference policygoverning procurement (by the Central and Stategovernments, their ministries, aided institutions andPSUs) of goods and services produced by MSMEs.

CII noted that such supplier-customer relationshipsbetween MSMEs and large companies would benefit theentire supply chain, and motivate large companies tohelp in the development and modernisation of MSMEs.

Favourable Procurement Policywill help SMEs: CII


RBI’s efforts in managing and controlling inflationare sometimes described as Sisyphean. This issimply uncharitable. Given the structural

constraints under which India’s monetary policyoperates, the richness of data to which RBI has access,which unfortunately, the outside analyst cannot access,and the respect which the author has, over the years,developed for RBI’s understanding of India’s economicenvironment, it would take an extraordinary “brave” (asYes Minister would have it) opinion to second guess, letalone question, RBI’s stance.

The reason for this prelude is the arguments in this articleurging continuing moderation in the pace of tighteningin the forthcoming Monetary Policy Statement for 2011-

Getting it right on Inflation ControlSaugata Bhattacharya

Sr. Vice President, Business & Economic Research, Axis Bank

12. That the policy tightening in 2010 seems to havebeen somewhat ineffective in tempering inflation mighttempt a reassessment of the wisdom in continuing withbaby steps, prompting a sharper and more sustainedincrease.

For proponents of the argument that RBI is “behind thecurve” in policy tightening, the clinching argument isthat “real rates of interest” are negative. They obviouslymean the repo rate. The reason this is not a meaningfulrate is as follows.

The main transmission channel for monetary policysignals is banks. The 200 bps increase in policy rateslast year, in conjunction with tight liquidity, resulted in


a 400 bps increase in the cost of banks’ short term funds,which is being increasingly passed on to borrowers.

Given the probable scenario of liquidity graduallytightening over the course of the year, the cost of banks’borrowed funds is unlikely to fall in a hurry.

Even without unduly adverse money market conditions,these costs will continue to increase as older, lowercost deposits keep getting re-priced. An inordinateincrease in lending rates will choke off credit toproductive sectors of the economy, at a time wheninfrastructure related capacities need to be augmented.In any case, our current understanding of liquidityconditions makes FY12 credit growth much beyond 20%unlikely.

Next, is the issue of “overheating”. Unquestionably,demand signals are mixed. Inflation hawks point tostrong tax collections, high credit offtake, boomingexports, increasing wages and continuing consumerdurables sales and non-durables (FMCG) sales pickingup to support the stance that demand remains strong.

Sure it is, but on the other hand, companies are findingit difficult to pass on even a fraction of the high inputcosts of the previous quarter, reflecting in the lowermargins. Although there is no formal recent dataavailable, it is my hunch that a lot of the resilient demandis from the rural areas, where a record harvest and highgovernment subventions have increased purchasingpower. On the other hand, capex activity, both throughdata and anecdotally, has been weakening.

The argument against this slowdown is that it is areflection of base effects, and momentum is still resilient.The second chart above shows sequential (quarter-on-quarter) increases in GDP and investment.

Then there is the nature of the current inflation. Risingprices are indubitably now spilling over into “core”inflation. Yet the dominant source of the current surge ininflation is, unsurprisingly, petroleum, manifesting inincreasing prices of downstream derivatives. One thingis clear, though: while inflation is, in the long term, amonetary phenomenon, there is little evidence thatexcess liquidity is contributing to the current phase. Formuch of the previous year, M3 growth had been belowthe RBI target of 17%.

Next is the issue of strong credit offtake. The last chartabove shows that one of the reasons bank credit hasrisen in FY11 is a sharp drop off of funds from other

sources, both domestic and foreign. Credit offtake hadbeen very depressed in the two previous years, followingthe onset of the crisis, and some part of the increase iscatchup. The other hypothesis (there is no data) is thatshort-term credit, funding inventories and workingcapital, might be an increasing component of the offtake.We also hypothesise that oil marketing companies mightbe drawing on bank funds to partially finance their under-recoveries.

How best then to battle inflation? The most importantthing is a coordinated approach among monetary, fiscal,industrial and natural resources policy authorities.Demand reduction must begin from energy usage, andfor that petroleum prices must be the key signal; interestrates are a second order, indirect and blunter instrument,imposing higher economic costs.

This will happen in India, as they have in most othercountries. China has increased fuel prices repeatedly in2011, once crude crossed $100/bbl. An increase in petrol,diesel and other controlled petroleum product prices,even if moderated by cuts in duties, will lead to short-term pain, but will produce two beneficial outcomes.

First, as a technicality, due to base effects, inflation inthe following year will be lower. Second, there will bedemand compression due to an erosion of purchasingpower. As testimony to this approach, most growthforecasts for FY12 for India have already been reviseddown.

The global environment, too, is likely to come to India’said in the price battle. Inflation, in varying degrees, hasbecome a global problem and central bank interventionsare likely to result in some cooling off of prices,reinforcing the demand compression that high fuel priceswill probably cause. Various structural weaknesses indeveloped market economies are also likely to lead to aslowdown later in the year. Many industrial commoditiesfutures are already signalling this.

The arguments above are not meant to introducesophistry, but to reiterate the very mixed signals fromthe current economic environment, which does not seemto indicate overheating.

To re-emphasise the obvious, all of this is most certainlynot a call for monetary policy inaction. There has to befurther tightening, but on balance, the moderate pacethat RBI has hitherto adopted is probably the best wayto maintain a growth inflation balance.


Introduction : In 2010, 75% of the world economyaffected by the Global financial recession hasrecovered. In this context, the economic growth has

generated new development opportunities for thetransportation in the logistics sector. However, thetechnological innovations have brought new elements,leading to the improvement of services that influenceglobal market competitiveness. The investmentsallocated for the implementation of new generationpertaining technological systems that contribute to thedevelopment of the entire logistics sector. Thisdevelopment has also has been supported by thecompanies that activate in this field. InformationTechnology (IT) investments are once again on the agendaof logistics service providers, 55% of which stating thatthey have long-term IT investments for Logistics field.This improvement is due to the fact that the economicenvironment has recorded positive results. This canalso be seen in the logistics sector. Hence, 75% of thecompanies have recovered are currently going througha post crisis recovery process and only 12% are stillaffected by the economic recession. This is a descriptivestudy deals with crisis management for logistics sectorwith different leadership styles.

Crisis Management : Crisis Management is an emergingfield of management which consist of activities includeforecasting potential crises and planning how to dealwith them. For example, how to recover if the total systemof an organization completely fails. Organizations havetime and resources to lead a crisis management planbefore they experience a crisis. Crisis management oftenincludes strong focus on public relations to recover allkind of damages to public image and assure stakeholdersthat recovery is underway.

Elements of crisis management in a Logistics firm : Crisismanagement is the process by which logistics firm dealswith a major event that threatens to harm theorganization, or the general public. Three elements arecommon to most definitions of crisis:

(a) A threat to the organization,(b) The element of surprise(c) A short decision time.

Crisis Management For Logistics SectorM. RAVICHANDRAN

Assistant Professor, Department of Management StudiesAnna University of Technology

[email protected]

I) Major types of crisis in Logistics sector:

During the crisis management process, it is importantto identify types of crises necessitate the use of differentcrisis management strategies. Potential crises areenormous, but crises can be clustered. Lerbingercategorized seven types of crisesa) Natural disasterb) Technological crisesc) Confrontationd) Malevolencee) Crisis of skewed management valuef) Crisis of deceptiong) Crisis of management misconduct

Natural crises : Natural crises are often considered asnatural disasters caused by 'acts of God', are suchenvironmental phenomena include earthquakes,volcanic eruptions, tornadoes and hurricanes, floods,landslides, tsunamis, storms, droughts that threaten lifeor property, and the environment itself.

Technological crises: This kind of crises is oftenconsidered as caused by human application of scienceand technology. Technological accidents inevitablyoccur when the technology becomes more complex andsomething goes wrong in the system as a whole. Forexample; Technological breakdowns. Sometechnological crises may occur when human error causesdisruptions like Human breakdowns. People tend toassign blame for a technological disaster becausetechnology is subject to human application ormanipulation and therefore, they do not hold anyoneresponsible for natural disaster. When an accidentcreates significant environmental damage is categorizedas mega damage. For example; software failures,industrial accidents and oil spill.

Confrontation crises: These type of crises may occurwhen discontented individuals or groups fight with thebusiness organization or government, and variousinterest groups to win acceptance of their demands orexpectations. For example; boycotts and other types arepicketing, sit-ins, ultimatums to those in authority,blockade occupation of buildings.

Crises of malevolence: A Logistics Firm faces a crisis of


malevolence when opponents or miscreant individualsuse criminal means or other extreme tactics for thepurpose of expressing hostility or anger toward, orseeking gain from a company, country, or an economicsystem, perhaps with the aim of destabilizing ordestroying it. For example; product tampering,kidnapping, malicious rumours, terrorism, andespionage.

Crises of organizational misdeeds: This kind crisis occurwhen management of an organization takes actions thatharms or place stakeholders at risk for harm withoutadequate precautions. For example; crises of skewedmanagement values, crises of deception, and crises ofmanagement misconduct.

Crises of skewed management values: These are causedwhen the managers are favoured short-term economicgain and neglect broader social values and stakeholdersother than investors. These states of lopsided valuesare rooted in the classical business creed that focuseson the interests of stockholders and tends to view theinterests of its other stakeholders such as customers,employees and the community.

Crises of deception: Crises of deception may occur whenthe management conceal the fact or misrepresentsinformation about itself while dealing with consumersand outsiders.

Crises of management misconduct: Some crises arecaused not only by skewed values and deception butalso by deliberate amorality or illegality or by both.

ii) Other types of crises:

Workplace violence: These kinds of crises may occurwhen an employee commits violence against other inthe workplace.

Rumours: False information or statement about anorganization may create crises and which affects theorganization's reputations in the public. For example;linking the organization to radical groups or stories thattheir products are contaminated.

Crisis Leadership Models for a Logistics organization: (i)Erika Hayes James, an organizational psychologist atthe University of Virginia's Darden Graduate School ofBusiness, identifies two primary types of organizationalcrisis.

a). Sudden crisisb). Smouldering crisis

Sudden crises: Sudden crises are circumstances thatoccur without warning and this is beyond anorganization's control. Consequently, sudden crises aremost often situations for which the organization and itsleadership are not blamed.

Smouldering crises: Smouldering crises differ fromsudden crises. This type of crises may begin as minor

internal issues due to the manager's negligence.

(ii) James defines organizational crisis as "anyemotionally charged situation that, once it becomespublic, invites negative stakeholder reaction and thesemay lead for potential to threaten the financial well-being, reputation, or survival of the firm or some portionthereof.

James categories five stages of crisis that requirespecific crisis leadership competencies. Each stagecontains an obstacle that a leader must overcome toimprove the structure and operations of an organization.

a). Signal detectionb). Preparation and preventionc). Containment and damage controld). Business recoverye). Learning

Signal detection: Signal detection is the stage, where aleader should, but do not always, sense early warningsignals that suggest the possibility of a crisis. Thedetection stages of a crisis include Sense-makingrepresents an attempt to create order and make sense,retrospectively, of what occurs.

Preparation and prevention: At this stage, crisis handlersbegin preparing for or averting the crisis that had beenforeshadowed in the signal detection stage.

Containment and damage control: This is most vividstage that the goal of crisis containment and damagecontrol is to limit the reputational, financial, safety, andother threats for a firm's survival. Crisis handlers workdiligently at this stage to bring the crisis to an end assoon as possible to limit the negative publicity to theorganization and move into the business recovery phase.

Business recovery: At this stage, when crisis hits,organizations must be able to carry on with theirbusiness in the midst of the crisis while simultaneouslyplanning for how they will recover from the damage thecrisis caused. Crisis handlers not only must engage incontinuity planning, but also actively continueorganizational resilience.

Learning: In the wake of a crisis, organizational decisionmakers adopt a learning orientation and use priorexperience to develop new routines and behaviours thatultimately change the way of functioning the organization.The best leaders recognize this and are purposeful orskilful in finding the learning opportunities inherent ineach stage of crisis.

Conclusion: Logistics firms have time and resources tocomplete a crisis management plan before theyexperience a crisis. Crisis management often includesstrong focus on public relations to recover all kind ofdamages to public image and assure stakeholders thatrecovery is underway.


Global Scenario Post Recession : Global Recessionof 2008 has left many organizations, even hugeglobal corporations with impeachable track

record of many decades, out of business. Due to severalpositive geopolitical and socio economic factors Indiawas less affected as compared to the rest of the worldespecially Europe and USA. However, one need not becomplacent from this fact that the business has beenmore of less as usual for their organization. Each one ofus, in the Materials Management profession, needs tolearn a few valuable lessons from these events. No onecan rest on its laurels of past success anymore and needdevelop a proactive strategy to cope with even the worsteconomic and socio political situations. The fastchanges in global economic and geopolitical landscapehave open up many opportunities and also many newchallenges due to volatility in the material availabilityand prices. Fluctuations in foreign exchange market makethe task of materials manager more challenging. Theeffort of many counties including India to enter into longterm trade agreements with other counties on the linesof European Union is an added dimension in to reducethe complexity to some extent. A few of the factors thatneed to be kept in mind while developing long termsmaterials management strategies have been discussedin a series of articles. This article provides an overviewof the events leading to the present situation and way tomove forward.

Pre and Post Liberalization in India : Some of us areaware of the pre-liberalization era in India (period priorto 1991), where everything was controlled by thegovernment and required a license. This was a period ofshortages and the materials managers had few choicesto source the materials required by them. Importsrequired import licenses which too were difficult to getand often took considerable time. Foreign exchange waslimited by the value given in the import license overwhich it was rather impossible to source materials andparts globally. It was a seller's market in India and evenafter very meticulous planning; shortages were quitecommon leading to higher cost and inefficiencies in theentire supply chain. Quality of inputs was dependenton what was supplied by the suppliers and not by whatbuyer wanted to source. As a result, the end productswere quite expensive and mostly of average quality.Delays in delivery were again a matter of delay receivingthe raw materials and parts needed for production of

Materials Management in the Post RecessionEra - Building Sustainable Competitive Edge

Dr. V.K. Gupta(Formerly CEO India, JMA Management Center Inc., Japan)

Professor, IMT Ghaziabad, UP, [email protected]; [email protected]

products and services.

Post liberalization era (after 1991) witnessed Indiaopening up and liberalizing its policies affectingmanufacturing and service sector. With growing interestof the world in Indian economy, many globalcorporations set up their base in India. Imports toowere liberalized and materials manager was now ableto source from the most completive sources anywherein the world, unlike in the past. Most of the importlicensing requirement was replaced with more friendlyand easy Open General License (OGL). With a significantamount of foreign remittances from NRIs and Indiansworking abroad, and FDI, the foreign exchange situationin India eased a lot and so did the availability of foreignexchange for import of materials and parts. Import dutyalso was rationalized over the years making thedifferential between Indian and imported materials andparts marginal. This increased completion and higherquality materials and components became available athighly competitive prices. Indian suppliers of materialsand components to had to compete to remain in businessby cutting down inefficiencies and waste.

Adaption of Total Quality Management and TPM by IndianCompanies : Until late 1980s, most of Indianmanufacturing and service companies were followingthe American management practices based oneconomies of scale. Due to European Union's firmdecision to implement ISO 9000 standard for allcompanies exporting to EU, Indian companies were quickto understand and started taking steps to get ISO 9001and 9002 certified. TVS was the first to get ISO 9002certification, followed by host of India OEMs andsupplier Cos. going in for ISO 9001 certification. Thislet to setting a base for quality management systems inIndian companies. All Indian OEMs and MNCs operatingin India helped their tier I and tier II vendors also to getISO 9001 certification. Auto Cos adapted QS 9000 andlater TS 16949, which many Indian companies havealready got certified. Some companies went further toget Environment Management System ISO 14001 andOSHA18000 certification also.

Few Japanese Joint Venture Auto Cos, JV, Large Indiangroup Cos and Indian tier I suppliers took the lead inimplementing TQM with the help of Japanese consultantsand Indian Industry associations, using a clustered


approach. Sundran Clayton became the first Indian Coto get Deming Award. About 20 Indian cos have beenawarded Deming Award and Japan Quality Medal tillnow. Simultaneously a few MNCs like HUL and IndianCos implemented TPM with help of JIPM experts. Theseinitiatives helped Indian cos to build a reputation forquality and cost competitiveness. However, the numberof companies which adapted TQM and TPMmethodologies is quite small compared to the numberof companies in India. In addition, the abovedevelopment was limited to a few sectors such asautomotive, FMCG, Consumer durable and a fewchemical and cement companies, hence to overall impactwas rather limited.

Impact of opening up of Indian economy on companieshaving manufacturing bases in India

There are a number of factors which makes an averagemanufacturing and service company in India, with a fewexceptions stated above, less competitive than rest ofthe world, especially China. China has rather overtakenthe world including India by exporting low cost products.Many Indian auto cos are now souring finished productsand sub assemblies from China. The same is true forother industries also. There are other counties alsowhich provide products and services at a much cheapercost then those manufactured in India. However thisalso provides an opportunity to Indian Cos and thematerials managers to rethink their sourcing strategies.We need to reconsider if low cost is the only factor orthere are some other considerations a materialsmanager needs to keep in mind while developingsourcing strategy.

From Seller Driven market to Customer Driven market

Post liberalization era has witnessed entry of a largenumber of manufacturers and suppliers, both Indianand foreign and proliferation of a variety of productand services with an eye for a share of the fast emergingIndian market (200 million Indian middle class withsurplus income). The makers are now driven byconsumer demand and not by shortages as wasprevalent earlier. The customer demand high Quality(Q) , Low cost ( C ) and ready availability (D - delivery) ofthe products and services. It is no longer possible to bethe cheapest to survive as low cost goods and servicesdisappear fast from the market. There are numerousexamples of companies not willing to change with timego out of business and fade into the dark. Nor it ispossible to keep customer waiting due to our inabilityto produce and deliver as per the requirements of thecustomer. Given the same level of quality and readyavailability of a product or service, the cost need to below and competitive. The revised mantra for success is- Q C D. Each company and professional needs tounderstand this change in the marketplace, even thosecompanies with long history of success and years oforder book. If they do not, and some actually did not,would not survive. Companies which embraced thechange are at the forefront of the Industry. We have moved

from state owned telephone to leading Telecom Cos, from'Indian Airlines' to Private Low cost airlines, from'Doordarshan' to 'Tatasky' and many others, from'Ambassador' to 'Maruti Suzuki' and from 'Rajdoot' to'Hero Honda' to name a few.

Strategic Role of Materials Management

With increasing need for small quantity of a large variety,increasing uncertainty and costs, trend for outsourcing,bought out component, materials and parts constituteabout 70% of the cost of producing goods and servicesfor most of the organizations. Materials Management(also known as supply chain management) has assumedstrategic significance for organizations to maintaincompetiveness. Some of the issues that need to beaddressed by SCM of an organization are :1. Importance of strategic sourcing2. From many suppliers to single source3. From lowest cost to Quality First criteria4. Vendor selection, vendor development, vendor

upgradation5. Supplier relationship management6. From Inspection to building quality in processes -

introduce SQC as means for quality control7. Cost of Poor Quality (COPQ)8. Quality at Source - Poka Yoke9. Buying price vs total cost of ownership10. Role of government taxes and other regulations

on sourcing decisions11. Technology in planning, scheduling and monitoring

the supplies12. Inventory Management - Safety stock, Where, in

what form and how much13. Coordinated product development - involving

suppliers in the product and service designprocess

14. Transportation and warehousing design and cost15. Third party logistics - 3 PL16. How to handle small lot large variety sourcing

The above factors have been summarized in a FlexibleStrategic Framework for managing forces of continuityand change for Supply Chain Management. On one handcompanies need to maintain business continuity bymaintaining customer base, existing infrastructure andtechnology, core competence, performance etc, it alsoneeds to respond to changes in customer needs,globalization, new opportunities, changing technology,government policies etc. Companies need to developlong term strategies for designing and managingmaterials management function (SCM), as a part of theoverall corporate business strategy.

The forthcoming issue would contain the methodologyfor helping a company to develop a long term flexiblestrategy for developing and maintaining sustainablecompetiveness.


Biographical Notes: V.K. Gupta is a Professor at theInstitute of Management Technology, Ghaziabad, India.He has been a Visiting Faculty at Indian Institute ofManagement (IIM) Lucknow, Noida Centre and ASBUniversity, Denmark. He is member of board of studiesof Indian Institute of Materials Management and editoreJournal of Business Excellence. He is an Alumnus of IIT,Delhi. He has held top management positions in leadingIndian companies and MNCs and was the CEO India ofJMA Management Centre Inc., Tokyo, Japan. He hashandled a number of consultancy projects on Knowledgemanagement and Best Practices. He has edited andrewritten a number of textbooks on Japanesemanagement. He has presented and published researchpapers in many international conferences and leadingresearch journals.

References1. Gupta V. K. and R. Sagar, "Total Quality Control

using PCs in an Engineering Company",International Journal of Production Research,1993, Vol. 31, No. 1, 161 - 172.

2. Gupta V. K. and R. Sagar, "A PC based SystemIntegrating CMM and CAD for AutomatedInspection and Reverse Engineering", InternationalJournal of Advanced Manufacturing Technology,1992,Vol. 7.

3. Gupta V. K., T. Mizutani, T. Takeda, V. P. Balaji, "Survey of Japanese Computer Market - An IndianView", Proceedings of International Conference onCAD, CAM, Robotics and Autonomous Factories(INCARF'93), IIT Delhi, Dec. 16 - 19, 1993.

4. Gupta V K , "Strategic framework for managingforces of Continuity and Change in Reverse SupplyChain: Practices in the Battery Industry",Proceedings of Seventh Global Conference onFlexible Systems Management at Noida on Nov 15-17, 2007

5. Gupta V.K., "Strategic Framework for ManagingContinuity and Change in Reverse Supply Chain:Practices in the Battery Industry for Lead AcidBatteries for Automotive and Ni Cd batteries forMobile", Proceeding of Seventh Global Conferenceon Flexible Systems Management at Noida on Nov15-17, 2007.

6. Gupta, V. K. (2007), "Flexible Strategic Frameworkfor Managing Continuity and Change in ReverseSupply Chain in the Battery Industry : Study of LeadAcid Batteries and Ni Cd batteries

7. for Automotive, Computers Mobile Phones",Proceedings of Seventh Global Conference onFlexible Systems Management at Noida, India, pp.471 - 492.

8. Gupta, V.K. (2009) , "Strategic Framework forManaging Forces of Continuity and Change in RiskManagement of Banks in India", Global Journal ofFlexible Systems Management, Vol. 10, No. 2, pp 1-13.

9. Gupta, V.K. (2010), "Flexible Strategic Frameworkfor Managing Forces of Continuity and Change inValue Engineering Processes", Global Journal ofFlexible Systems Management , Vol. 10, No. 4, pp43-54.

10. Gupta, V.K. (2010), "Flexible Strategic Frameworkfor Managing Continuity and Change - OutboundSupply Chain of Automotive Industry in India", Int.J. Value Chain Management, Vol. 4, No. 4, 2010 pp365-379.

11. Gupta, V.K. , (2011), "Flexible strategic frameworkfor managing forces of continuity and change -study of inward supply chain of a leadingautomotive company in India", Int. J. BusinessExcellence, Vol. 4, No. 2, 2011pp 142-159.

12. Gupta, V.K. (2011), Flexible Strategic FrameworkFor Managing Forces of and Change In RetailBanking Business Process", Business ProcessManagement Journal, accepted for publication.

13. Gupta V.K. , ( edited First English Edition ), "Strategic Management Course : Management ofStrategy ", JMA Management Center Inc., Tokyo,Japan, 1996.

14. Gupta V.K., ( edited First English Edition ), " StrategicManagement Course : Management of Man andOrganisation ", JMA Management Center Inc.,Tokyo, Japan, 1996.

15. Gupta V. K., ( revised, edited First English Edition )," RE-ENGINEERING (BUSINESS PROCESS RE-ENGINEERING ) : Understanding the Re-engineering", by Y. Kobayashi, Vice President, A. T.Kearney International Inc., for JMA ManagementCenter Inc., Tokyo, Japan, 1995.

16. Gupta V. K., ( revised, edited First English Edition )," RE-ENGINEERING (BUSINESS PROCESS RE-ENGINEERING ) : Re-engineering the Organisation",by Y. Kobayashi, Vice President, A. T. KearneyInternational Inc., for JMA Management Center Inc.,Tokyo, Japan, 1995.

17. Gupta V. K., ( revised, edited First English Edition )," RE-ENGINEERING YOUR COMPANY AN EASY GUIDE",by Y. Kobayashi, Vice President, A. T. KearneyInternational Inc., for JMA Management CenterInc., Tokyo, Japan, 1995.

18. Gupta V. K, " Correspondence education system inIndia - Status and Prospects", AOTS, Tokyo, Japan,Kenshu Magazine 1994, Vol. 264, pp 18 - 21 (inJapanese)

19. Gupta V.K. , ( revised, edited First English Edition )," Strategic Management Course : HRD Strategy ",JMA Management Center Inc., Tokyo, Japan, 1996.

20. Gupta V.K. , ( revised, edited First English Edition )," Strategic Management Course : Progress ofEnterprise", JMA Management Center Inc., Tokyo,Japan, 1996.


Professor KV Thomas, Minister of State (IndependentCharge) for Consumer Affairs, Food & PublicDistribution, explains to Sebastian PT what the

government is doing to tame rising prices.

Food inflation is still hovering above 8.5%. While theprices of cereals seem to have stabilised, now prices ofvegetables and fruits are skyrocketing. Have governmentmeasures to rein in food prices failed?

The situation has been improving. We have had a bumperfoodgrain production this year. In fact, price levels arebecoming steady or declining in most commodities. Wedid take a number of measures to contain the price rise:banning onion exports, suspending sugar exports andthe like.

True, the wholesale price index based annual rate ofinflation of food articles marginally increased to 8.58%(provisional) for the week ending 23 April 2011compared to the previous week (ended 16 April) figureof 8.76%. However, last year, during the same period, itwas 19.84%. So, there is a steep decrease in foodinflation.

Inflation rates of almost all food articles are now lessthan 10%; with the exception of onion and fruits—mainlydue to the base effect. While the prices of rice and wheathave largely remained steady this year (with inflationrates of 2.08% and 0.48%, respectively), pulses and sugarare lower than last year (with the exception of gram).

Also, edible oil prices that were going up are currentlydeclining or are steady over the past month. Vegetablesare also showing a negative trend in inflation. It was (-)0.21% for the week ended 23 April 2011, reflecting thefall in the prices of major vegetables. We are hopingthis will continue.

Finance Minister Pranab Mukherjee says the world isheaded for a prolonged phase of high food prices. Howmuch is India affected by the global trend?

Since July last year, there has been a significant increasein global food prices—especially of cereals, edible oilsand sugar. The Food Price Index (FPI) of the Food and

“Cartelisation by large traders is a majorcause of worry”

Prof. K.V. ThomasMinister of State for Consumer Affairs

Agriculture Organisation (FAO), after rising for eightconsecutive months, peaked at 237 in February 2011,its highest level since 1990, and has now declined to230 for March 2011. This decline has been largely onaccount of decline in prices of cereals and sugar. TheIndian market, however, has been largely insulated fromthe recent phenomenon of rising global food prices. Still,we have a lot of local factors to address. We are awaitingthe report of the inter-ministerial group under ChiefEconomic Advisor Kaushik Basu, which has been set upto review the inflation situation, especially in relationto primary food articles.

India’s growing population has been outpacing the growthof agricultural output. And the annual per capita cerealavailability, for instance, has been stagnant for almost adecade at a low 165 kg. What is being done to increasefood productivity?

There, undoubtedly, should be a steady increase inproductivity. This year, we have seen a bumper crop. Asper the third advance production estimate released bythe Ministry of Agriculture and Co-operation, riceproduction stood at 94.11 million tonnes against 89.09million last year; wheat, at 84.27 million tonnes against80.8 million tonnes last year; and pulses, at 17.29 milliontonnes against 14.66 million tonnes last year. Totalfoodgrains production is estimated at 235.88 milliontonnes against 218.11 million tonnes last year.

We are focusing on sustained development of marketfacilities and augmentation of infrastructure byimproving storage capacity and modernising godowns.Upgraded go-downs will greatly reduce the loss offoodgrains in storage. On the other hand, cold storageswill greatly help to preserve perishable goods, especiallyfoods and vegetables. The distribution network has tobe improved. We are focusing on having more farmermarkets and mobile bazaars. Food inflation has beenhighest in the cities. We are planning to have mandisabout 100 km around the cities so that nobody canrestrict the supplies or manipulate the prices. If the statesand local bodies could waive mandi tax, octroi and otherlocal levies, there could be some relief for the


consumers.That said, storage facilities per se are notenough. We need to focus on getting value addition toour products. For instance, onions are perishable goods.However, if converted to onion paste, the farmer couldget a better value for his product.

“The Indian market has been largely insulated from therecent phenomenon of rising global food prices. Still, wehave a lot of local factors to addzess”

Hoarding by trading cartels does artificially createshortage and hike prices. What is being done to removetheir hold over prices?

Cartelisation by large traders and their manipulation ofmarket prices is a major cause of worry. We have beentaking strict action against these hoarders and blackmarketeers. We have asked states to take action underthe Essential Commodities Act, 1955. Stock limits havebeen fixed by the Central government for sugar; whilethe states can fix the limits for retailers in the case ofsugar and all traders for rice, paddy, edible oil, edibleoilseeds and pulses. In addition, the CompetitionCommission is looking into the complaints that therewas cartelisation in the case of onions when prices rosesharply last year.

One criticism has been that the government has followederratic export and import policies for wheat, onions, etc.,which has helped the farmers less and traders more...

Decisions on exports and imports are taken based ondomestic production, availability of grains andinternational market prices. Depending on these andother factors, including long-term scenario of stockavailability, the government has been taking a considereddecision. The interests of farmers as well as consumersare weighed properly when arriving at decisions.

What is the status of the Food Security Bill? This couldprovide better prices to both the farmer and theconsumer.

The government is committed to enact the food securitylegislation, signalling a paradigm shift from a patronageapproach to a right-based approach. The broad contoursof the bill are being finalised in consultation withstakeholders with issues like coverage, entitlement,quantum and price being deliberated upon. Thelegislation seeks to provide food security for all. Thegovernment would encourage decentralisedprocurement, augmented storage capacity and give alegal entitlement to subsidised foodgrains to belowpoverty line population. The farmers would thus beassured of remunerative prices and the consumers, acertain quantity of foodgrains.

Indian Institute of Materials Management

MISSIONTo promote professional excellence inmaterials management towards NationalProsperity through sustainabledevelopment.

OBJECTIVETo secure a wider recognition of andpromote the importance of efficientmaterials management in commercial andindustrial undertakings.

To safe guard and elevate the professionalstatus of individuals engeged in materialsmanagement faculty.

To constantly impart advanced professionalknowledge and thus improve the skill ofthe person engaged in the materialsmanagement function.

Propagate and promote among themembers strict adherence to IIMM codeand ethics.

CODE OF ETHICSTo consider first the total interest of one’sorganisation in all transactions withoutimpairing the dignity and responsibility ofone’s office :

To buy without prejudice, seeking to obtainthe maximum ultimate value for each rupeeof expenditure.

To subscribe and work for honesty and truthin buying and selling; to denounce all formsand manifestations of commercial briberyand to eschew anti-social practices.

To accord a prompt and courteousreception so far as conditions will permit,to all who call up on legitimate businessmission.

To respect one’s obligations and those ofone’s organisation consistent with goodbusiness practices.


This article discussed the background to the GreenPaper on the future of VAT and as to how and whythe Green Paper had been prepared. This article is

focused on the two broad areas for discussion that havebeen highlighted in the Green Paper as follows:-

the principles of taxation of intra EU transactionsthe other issues which also need to be addressed,in the estimation of the EU.

The Green Paper indicates that the period ofconsultations will be from 1st December 2010 till endMay 2011. Hence, the consultation period is currentlyopen at the time of writing of this article. The Commissioninforms that the based on the consultations, it wouldpresent its priorities for the future of VAT in the EU, bymeans of a communication at the end of this calendaryear and that legislative initiatives and other actionscan be expected from 2012 onwards. It is indeedintriguing to note these timelines, as they appear to bevery timely from an Indian GST standpoint as well, giventhe similar schedules that we ought to be following herein India, in order that we have a best in class GSTsometime in calendar 2012.

The Green Paper sets out a total of 33 questionsconcerning the two broad areas referred to above, keepingin mind that the review of the VAT system in the EU wasundertaken in order to achieve the following objectives:-

reduce the complexities of the present system;make the EU single market work better;maximize revenue collections;tackle the system susceptibility to fraud;cope with changes in technology and the economicenvironment.

On the first broad area relating to the principles oftaxation of intra EU transactions, which can be termedas the area of technical VAT design, the Green Paperexplores the present system of taxation in the state ofdestination of supplies of goods and services, withcertain exceptions, based on the point that the VATrevenues accrue directly to the member States in whichconsumption happens, according to the rates andexemptions in those States. It points out that the keyissue to be resolved in that regard is to ensure that thetreatment of intra EU supplies and domestic supplies is

GST In India : Recent Developmentsin the EU

S MadhavanExecutive Director, PricewaterhouseCoopers Pvt. Ltd.

[email protected]

uniform and consistent . It states that equal treatmentcan be achieved either by taxing intra EU supplies or byeliminating the effective charging of VAT on domestictransactions via a generalized reverse charge system,whereby the taxable person to whom the supply is madebecomes the person liable for the payment of VAT. Therelated question is, of course, whether such treatmentneeds to be equal and, if it does not, to what extent adifferent treatment is acceptable, without it being anobstacle to the smooth functioning of the single marketor allowing fraud linked to cross border transactions.

Thereafter, the Paper discusses the distinction betweenthe tax treatment for Business to Business (B2B)transactions and supplies to final consumers (Businessto Consumer. On cross border B2B transactions, thePaper comments on the VAT principle that for both goodsand services, the taxation is based on the rate andconditions of the State of destination and since this isnot the case as regards domestic transactions, thedistinction in the treatment becomes a source ofcomplexity and vulnerability to fraud. As oppose to this,the Paper recognizes that B2C supplies are typicallytaxed in the State of origin i.e. where the sale is made orwhere the provider of services is established. This bringsabout its own challenges. The Paper accordinglyconcludes that given these challenges, there is a need toconsider a general use of the reverse charge mechanismin relation to domestic B2B transactions. Alternately,the Paper suggests that consistency can also be achievedby taxing all intra EU transactions based on the rates inthe State of destination. Here again, the place ofdestination can itself be defined in two ways:

as the place of arrival, for goods, and as thecustomer’s place of establishment, for servicesoras the customer’s place of establishment, for bothgoods and services

The paper closes this first area for discussion byway of the first two of the 33 questions, which are posedas follows:-

Are the current VAT arrangements for intra EUtrade suitable enough for the single market or arethey obstacles to maximizing its benefits?

If the later, what are the most suitable VAT


arrangements for intra EU supplies? Particularly,is the principle of taxation in the State of origin,which was the original principle of VAT taxationin the EU, still relevant and achievable in thepresent scheme of things?

To summarize, the objectives of designing an ideal VATwould be to evolve a broadbased VAT, as opposed to arelatively narrow based one, as at present, and to bringabout best practices that would balance the interests ofGovernment, business and the citizens.

The Paper thereafter goes on to the second broad areafor discussion, on the other issues and delineates theminto the following five categories:-

Neutrality of the VAT systemScope of VATExemptions from VATDeductionsTreatment of international servicesHarmonization of VATLegal processesDerogations and speed of responseVAT ratesReducing red tapeProgramme for reducing administrative burdensand streamlining VAT obligationsScheme for small businessesOne stop shop mechanismsAdapting the VAT system to large and pan EuropeanbusinessesSynergies with other legislationsRobust VAT SystemVAT collection mechanismsProtecting bona fide traders against fraudEfficient and modern VAT administration

If one were to analyze these categories and attempt tocategorize them in some other manner, these could beclassified as follows:-

Legal processesEfficiency in collectionsReducing red tape or bureaucracy

As regards legal processes, the objectives could be (i) tobring about revised VAT rules and regulations based onconsultations with all stakeholders and (ii)harmonization and certainty. Regarding efficiencies incollection; the objectives in relation thereto could be :

Improving and simplifying the collection of VATand its administrationReduce the VAT Gap and combat fraudProtect bona fide traders against VAT fraud

Finally, on reducing red tape, the objectives couldbeReduction of administrative burdenSimplificationOne stop shop (B2C) andCross border VAT groupingsSynergies with other legislations

These other issues, which together constitute the secondbroad area of discussion in the Green Paper, will bediscussed in further detail in the next article. As can beappreciated, many of these issues resonate with us herein India, given their centrality to the design and modelof the dual GST that we wish to bring about.

OBITUARY

DR. R.K. SINGH

Entire IIMM fraternity is shocked tolearn the sudden and untimely death ofDr. R.K. Singh, Former Vice Chancellor ofMadhya Pradesh (Bhoj) Open UniversityBhopal on 16th May 2011 at his residence atGurgaon, Haryana. Dr. Singh had thedistinction quality of Guiding Researchstudents and he has written several ResearchPapers which stands appreciated at severalforums.Dr. Singh had represented India inseveral foreign Educational Forums. Dr. Singhhas been very professional and alwayswanted to see the growth and developmentof the students. He was instrumental inintroducing the MBA (MM) programmethrough correspondence which is uniqueprogramme and MPBOU is the onlyUniversity in India imparting suchcorrespondence Course.

We pray Almighty to allow his soul torest in peace and give strength to his familymembers to bear this great loss.


Inflation, a key factor which is detrimental to thegrowth of the Indian economy, can be effectivelycountered if companies design their supply chains in

a more holistic manner. This was the principal thoughtprocess which evolved on the materials managementday celebrated by the Indian Institute of MaterialsManagement (IIMM) on April 21, 2011, which broughtthe Kolkata-based purchase managers together todiscuss issues of mutual interest. In the forum, theassociate director, business advisory services -Ernst &Young, Minal Shanghavi, who was also the key notespeaker, stressed on several methods to counter inflationand these include innovation, improving efficiency,focusing on core competence and setting bigger targetson a long-term horizon and better information sharingto optimise the supply chain.

From his experience, he shared an instance of a foodmanufacturing company outside India which in 20 years’time did not change its end product price, despite theinflationary trend of its input and concluded thatoptimising the supply chain through the industry bestpractices can be a better method to control inflation.

Unfortunately, however, this is always not true and underthe impact of inflation, consumers are often forced topay more and it is currently a grave concern in countriessuch as India and China. This affects the entire valuechain which is a

subset of the supply chain and can be averted if theselling or the buying company involved in the value chainproactively searches for the right solution andimplements the same quickly.

It is obvious that a chain is as weak as its weakest linkand this is true with regard to the supply chainmanagement as well, Shanghavi said. “If one link is notworking properly, the entire chain would suffer and youas an industry would not be competitive in the globalmarket place,” he added.

Key Challenges

Researches indicate that demand shrinkage andmismatched production often lead to inflationary trendsin pricing. This is triggered when producers start toproduce more variety of products to ward off competitionand meet their target. But, in doing so, it raises price onall fronts. As price pressures increase on these

Optimised Supply Chain mayward off InflationRajkumar Mitra, Executive Editor, Sourcing Insights

[email protected]

producers, they are often forced to shift to differentmarkets when the company fails to meet its target in aparticular one.

A complimentary factor contributing to inflationary trendis demand shrinkage. “A person buying two penspreviously now buys a pen and a refill. As a result,demand starts shrinking unless the economy is growingthat fast,” Shanghavi said. In such cases, even if GDPnumbers are good and the company turnover continuesto grow, profitability tends to go down and a recessionaryscenario comes out.

According to Shanghavi, another major challenge is thedisconnect existing in the supply chain. This happensbecause on one end of the supply chain, we are not ableto provide food to a section of the population. On theother, food is getting wasted in Food Corporationgodowns due to poor storage conditions. “Grains arerotting due to mismanaged supply chain,” he said.

Disconnect in professionally run private organisationsis also not uncommon. Absence of reverse logistics leadsto piling up of recyclable wastes and an apt example ofthis is the piling up of redundant electronic items. “Funnything, on the other hand, if you are a recycler in thiscountry, you do not have material to recycle,” he said.

Enablers,

Dynamic organisations use the right information andanalyse it to take advantage of the availableopportunities through innovation, said Shanghavi, citingan example of Dell Computers.

Customisation practiced at Dell avoided redundancy asthe company gave customised product and deliveredaccording to customer needs. The computer wasassembled on the way and the last person who deliveredthe computer to client actually assembled the computer.“This was supply chain innovation which changed theindustry completely,” said Shanghavi.

However, these are ideal cases and sometimes it sohappens that companies meet customer priceexpectations but are not able to supply. “Withoutdelivery within stipulated time, it is a lost opportunityfor the seller,” Shanghavi added.

According to Shanghavi, organisations need to take


positive steps to improve on quality and efficiency,sometimes even by changing the vendor or the locationof manufacturing. “Such efforts are not expensivecompared to the benefits obtained,” he said.

Companies also need to focus only on the corecompetence area as with the advent of effectiveinformation sharing, more jobs can be given to vendorsand managed through IT solutions. “You need to do whatyou do best and let others do what they do best,”Shanghavi said. According to him, now managers haveto do more with less. Previously they had with optimalavailability. Currently, resources are far below theoptimal level, he said.

OBITUARY

SHRI MADHAV K. MANTRI

IIMM is grieved to record the passing away of Shri MADHAV K.MANTRI, on 21st April, 2011 in Mumbai, at the ripeage of 96. Shri. Madhav Mantri was a founding member and later became the National President of NationalAssociation of Purchasing Executives from 1966 to 1968. He was the Chairman of Mumbai Branch of IIMM in1970-71. He was honoured with the prestigious Lifetime Achievement Award of IIMM in the year 2005. Mr Mantristudied Engineering from the famous school of City and Guilds, which was the cradle of technical education in thecolonial days. He entered services in 1942 in the Motor Vehicles Department of the erstwhile Bombay Presidencywhich included the present Maharashtra, Gujarat, and North Canara of Karnataka..

In 1945 to 1946 he was deputed for training in similar departments of Motor Vehicles Control of U.K. and later wasasked to study passenger and goods transport operation and control there, in view of the Government's proposedscheme of nationalization of road transport. He went through training in their nationalized and private passengerand goods transport operation including London Transport. During this tenure he was the only one to be selectedto learn Motor Driving at Scotland Yard with a view to implement those technicalities in Motor Transport inBombay.

Upon his return he was entrusted with the planning and introduction of State Transport Services in variousregions of the Bombay State . In 1951 he was asked to take over the entire Stores and Purchase Department withan annual turnover of Rs.250 crores then, which he held for 26 years till he retired in 1976. During this period hewas sent on a delegation as a member of Stores and Inventory team sponsored by the Technical CorporationMission of the USA and visited Japan, Germany, and U.K.

In 1968 he was deputed for 6 months under the top management training scheme of the Colombo Plan to studyStores and Purchase Management with emphasis on Public accountability in Purchasing in public Sector andGovernment purchases. He was instrumental in installing the first Computer System exclusively for Stores andInventory Control. After retirement he was a Consultant to other State Transport Undertakings in the country andalso some private organizations for re-organising their Stores and Purchase Departments which he did till he was80 years old and then finally retired.

His passion for driving and respect for road rules and safe - driving, combined with his love for Automobiles, assuch, inspired him to write the then and may be, as on date, only book in Marathi ' Motor Driving Shastra Va KalaMr.Mantri was of philanthropic bent of mind and was associated with two Trusts.

IIMM joins the materials management fraternity in mourning the passing away of Mr.Mantri and offers itsheartfelt condolences to the bereaved family.

So, current optimising initiative in supply chains aremore challenging and involve in-depth knowledge of theorganisation network, location of warehouse,manufacturing zones, what kind of logistics areavailable, looking at procurement structure,participating in joint buying programme and aligningthoughts on a 10-20 year horizon. “Such thinking requirescourage and vision,” he said.

Lastly, one should also look at related environmentalregulations prior to setting up an optimised supply chain.


2011 has been declared by the United Nations as theInternational Year of Forests. And World EnvironmentDay this year will reinforce this global concern with theofficial tagline - Forests: Nature at Your Service.

The United Nations Environment Programme (UNEP)on Feb 22, 2011 announced that India, with one ofthe fastest growing economies in the world that is

embracing the process of a transition to a Green Economy,will be for the first time ever the global host of WorldEnvironment Day 2011 ( WED ) on 5 June.

This year's theme 'Forests: Nature at Your Service'underscores the intrinsic link between quality of lifeand the health of forests and forest ecosystems. The WEDtheme also supports this year's UN International Year ofForests.

India is a country of 1.2 billion people who continue toput pressure on forests especially in densely populatedareas where people are cultivating on marginal landsand where overgrazing is contributing to desertification.

But the Indian Government has also found solutions.While the socio-economic pressures on the country'sforests are tremendous, India has instituted a tree-planting system to combat land-degradation anddesertification, including windbreaks and shelterbeltsto protect agricultural land.

In conserving its critical ecosystem, India hassuccessfully introduced projects that track the health ofthe nation's plants, animals, water and other naturalresources, including the Sunderbans - the largest deltaicmangrove forest in the world, and home to one of India'smost iconic wildlife species: the tiger.

India has also launched a compensation afforestationprogramme under which any diversion of public forestsfor non-forestry purposes is compensated throughafforestation in degraded or non-forested land. The fundsreceived as compensation are used to improve forestmanagement, protection of forests and of watershedareas. Moreover, a government authority has beencreated specifically to administer this programme.

Achim Steiner, UN Under-Secretary General and UNEPExecutive Director, said: "Over close to the 40-year historyof WED, India's cities and communities have been among

World Environment Day 2011

the most active with a myriad of events undertakenacross the country each and every year - so it is onlyfitting that this rapidly developing economy is the hostin 2011."

"India is famous for its culture, arts, movies and world-beating Information Technology industries. Increasinglyit is at the forefront of some of the 'green shoots' of aGreen Economy that are emerging across the globe," hesaid.

"From its manufacturing of solar and wind turbines toits Rural Employment Guarantee Act which underwritespaid work for millions of households via investments inareas ranging from water conservation to sustainableland management, foundations are being laid towardsa fundamental and far reaching new development path,"added Mr. Steiner.

This is underlined by India's introduction of the CleanEnergy Fund into its national budget which providessubsidies for green technology and has been the basisfor a National Action Plan on Climate Change which setsspecific targets on issues such as energy efficiency andsustaining the Himalayan eco-system.

India is currently planning one of the largest green energyprojects in the world that will generate 20,000 megawattsof solar energy and 3,000 megawatts from wind farmson 50,000 acres in Karnataka in southwest India. Thefirst phase of the US$50 billion project will start nextyear.

In its ground-breaking report on the Green Economylaunched yesterday, UNEP cites India and the US$8 billionNational Rural Employment Guarantee Act, whichunderwrites at least 100 days of paid work, benefitingclose to 60 million rural households.

"India's offer to host WED is another expression of India'sstrong commitment to work with the global communityfor sustainable development. This event will serve asthe inauguration of a series of events leading up to thehosting of the 11th Conference of Parties to theConvention on Biological Diversity. It will also flag offthe celebrations of the international decade forbiodiversity. This will in addition signal India'scommitment to the biomass economy so dependent onthe sustainability of our natural resources," said Dr. T.


Chatterjee, Secretary for Environment and Forests of theGovernment of India.

Two of India's most prominent cities - Mumbai and Delhi- will be the venue for this year's global celebration ofthe environment, with a myriad of activities over severaldays to inspire Indians and people around the world totake action for the environment.

The celebrations in India on 5 June are part of thousandsof events taking place around the globe. WED 2011 willemphasize how individual actions can have anexponential impact, with a variety of activities rangingfrom school tree-planting drives to community clean-ups, car-free days, photo competitions on forests, bird-watching trips, city park clean-up initiatives, exhibits,green petitions, nationwide green campaigns and muchmore.

This year UNEP plans to make WED 2011 into a biggercelebration than ever before, building on theunprecedented success of WED 2010 - when people inmore than 112 countries registered activities on the WEDwebsite and WED was thrust into the blogo-sphere withthe first-ever WED- blogging competition.

The WED 2011 website will inspire, inform and involvepeople through unprecedented interactivity, offeringdaily tips, information and statistics on forestconservation, a platform where people around the worldcan register their activities, social networking campaignsand competitions to get people on every continentinvolved. See: www.unep.org\WED. Anyone can organizean event and register it on the WED website, and each ofthese individual actions when taken collectively will goa long way to securing important forests services forgenerations to come.WED A-Z

It takes only a few simple steps to easily green yourdaily routine and make good eco behavior into ahabit! Green is forest friendly!

AAct now.Adopt as many eco-friendly lifestyle choices as youcan and make them habits for WED!Add it up. Our impact is exponential when the globalchorus sings together.

BBuy FSC certified products and decrease the tradeof exotic wood from endangered forests.Bring a cloth bag to do all you're shopping. But notjust for groceries, even on your trips to the mall. Asturdy, reusable bag will last for years, and onlyneeds to be used 5 times to have a lowerenvironmental impact than a plastic bag.Bring a mug with you whenever you go for take-outbeverages, so you avoid using paper cups.

Most paper cups are made in a way that makes itmore difficult for them to degrade, and in some waysmore hazardous to the planet than the plastic cup -so why not just bring your own mug for your favoritebeverage?

CConsume locally. You will help reduce the demandfor cutting down forests in foreign countries to meetexport demands.Choose public transport.Compost your organic food waste.Conserve energy. Turn off the lights to brighten ourenvironment.Create a greenspace wherever you can from the caryou drive to the building you live in.

DDon't run the water when brushing your teeth. Youwill save as much as 3 gallons every time! Only 2,5% of the world's water is drinkable.Discover an alternative to using traditionalwrapping paper for holidays and birthday gifts.

EEngage in an environmental activity like school orneighborhood beautification or tree planting.Eat organic and locally grown foods and help reducethe clearing of forests for agricultural land.Educate your friends on how individual actions canhave an exponential impact and motivate actionfor WED.

FFind an unusual insect in your garden. Fewer than10% of the world's described species have beenassessed to determine their conservation status.Form a group of peers or colleagues to oversee thegreening of your school, neighborhood or workplacewith recycling, car pooling, or energy-efficiency.Form a tree-planting group with family and friendsand commit to planting and maintaining these treestogether.

GGreen your office: print double-sided, turn offmonitors, start an office recycling program.Grow an organic garden and your own deliciousfood.Give memberships to an environmentalorganization or seedlings as birthday gifts.Go electronic for bills and payments: at home, inthe office, at the bank etc.

HHost a World Environment Day celebration. Cleanup your neighborhood, carpool with friends, have avegan (no animal products) dinner party! And don'tforget to register your activity on the WED website!


IIdentify the nature that surrounds you - take note ofthe beautiful plants and animals that you may notalways appreciate. Learn about the amazingecosystem services they provide.Improve the insulation of your home - it will reallyhelp your energy consumption…and your monthlybills!

JJoin a local environmental or conservation group.You can team up with those around you and make areal difference for your community.Jog outside and save the energy you would haveused on the treadmill!

KKick the habit! Don't print unless it's absolutelynecessary. And when you do print - always printdouble-sided!Keep your cup! When traveling on airplanes, ask toreuse your plastic cup.

LLearn more about India, this year's host country.

MMobilize your networks! Message your friends aboutWED - facebook, twitter, orkut, SMS, text, phone,email - it doesn't matter how, just get the word out!

NNominate a WED Hero from your world. Notify usabout the great environmental work they're doingand why they should be a WED Hero.

OOptimize the use of your washing machine - use thecold-wash option and significantly save energy andreduce your daily carbon emissions.Offset your travel whenever possible - most airlinesprovide an option to offset your travel when youbook your tickets.Opt for public transport whenever possible.

PPlant a tree this year!This is the International Year of Forests so why notcelebrate by planting a tree with friends or family.Pile up! Lay the grounds for a compost pile andstart sorting your garbage.

QQuantify how much money you could save each coldwinter if you lowered the temperature inside yourhome by 2 degrees Celsius. It could reduce yourenergy consumption by 14 percent!!!

RReduce. Reuse. Recycle.

Register a WED activity at www.unep.org/wed!S

Sacrifice something small each month - eat locallygrown vegetables instead of imported vegetables;do without steak as cattle ranching is high impact!;carpool with co-workers; take your bike to work etc.Support and motivate companies that use certifiedmaterials and operate in ways that areenvironmentally responsible.Switch your lightbulbs to energy-efficient LED's. Youwill see substantial savings on energy bills!

TThink! How green is your daily routine? Just bymaking a few small changes, like remembering toturn off the lights, turning down the heat, stoprunning the water while you brush your teeth - youcould cut your daily emissions by more than 60 percent.Think again! Before you toss, consider if the itemcan be reused or recycled?Think outside of the bottle! Bottled water costs 1900times more than tap water

UUse your common sense!Understand your options. Learn about the small waysyou, as an individual, can make a positive impacton the environment.Use rainwater for your indoor plants - they love it,and you'll save water at the same time.

VVisit the WED website regularly and see how youcan get involved! Book mark website, subscribe toRSS, Twitter or facebook

WWhenever you feel like buying books, magazines, ornewspapers go to your local library or borrow fromfriends and neighbors.

XX-plore! Get out into the forest and enjoy what ourplanet has to offer.

YYOU!You can make a difference - individual actions, whenmultiplied, can make an exponential difference tothe planet!

ZZip around town on your bike, on public transport,or your own two feet.Avoid your car whenever possible - it's cheaper!

Source : UNEP


Lean Manufacturing System is a technique formaximizing operational efficiency and customervalue by

Using the least amount of human - effort, space,resources and time.

Improving production flow - A line synchronizationmethod to make the product flow through variousstages without any interruption.

Implementing 'Pull' Systems - The flow of resourcesin a production process by replacing only what hasbeen consumed.

Basically Lean is centered around creating more valuewith less work. Lean manufacturing System focuses onidentifying and eliminating all kinds of waste and nonvalue added activities from the manufacturing processesto improve Quality, Cost & Delivery.

KEY PRINCIPLES OF LEAN MANUFACTURING SYSTEM.

Minimize Material Handling preference should begiven to low or no cost solutions. Efforts should bemade to handle the products only once.

Minimize Distances - Avoid walking and carryingmaterial and components by creating cells,combining operations within a work center andbetter space planning.

Minimize Strain - Work centers should beergonomically designed to avoid back and othermuscle strains.

Minimize Clutter - Everything must be in thedesignated place and these should be a place foreverything.

Minimize Storage - If you have the space it will surelyget filled. Continuously minimize the storage spacefor raw material finished goods and spare partsthroughout the supply chain.

Maximize Utilization - Make optimal use of people,space and equipments to improve the return oninvestment.

Maximize Flexibility - The key to lean manufacturingis creating a layout that can adapt quickly tochanges in product equipment, personnel andmaterial

Lean Manufacturing System- A Generic Process Management Philosophy

Malvinder Singh, Sr. Deputy General Manager (Quality)HEEP, BHEL, Haridwar

Maximize Smooth Flow - Continuously determineand eliminate the Bottle necks to ensure smoothproduction flow.

Maximize Visibility - To quickly spot the problems,maintain a clear line of vision to anywhere fromanywhere. Work centers must have good visualcontrols to avoid human errors.

Maximize Communication - Lean manufacturingrequires a regular feedback on the operations formaking continuous improvements.

BUSINESS PERSPECTIVE OF LEAN MANUFACTURINGSYSTEMDefine - The Business Plans for making

improvementMeasure - The Business systems that support

the plans.Analyze - The Gaps in system performance

bench marks.Improve - System elements to achieve

performance goals.Control - System level characteristics that are

critical to value.

OPERATION PERSPECTIVE OF LEAN MANUFACTURINGSYSTEMDefine - Projects to resolve operational

issues.Measure - The current performance of the

operations.Analyze - Project performance in relations to

operational goals.Improve - The operations with focus on speed,

service & quality.Control - Inputs and outputs of the

operations.

PROCESS PERSPECTIVE OF LEAN MANUFACTURINGSYSTEM.Define - The processes that contribute to

functional problemsMeasure - The capability of each processAnalyze - The data to assess prevalent

patterns & trends.


Improve - The key business processes.Control - The process variables that exert

undue influence.

THE FOUR THRUSTS OF LEAN MANUFACTURING SYSTEM

Lean manufacturing organizations focus on four thruststo support their lean manufacturing designs.

1. Solid Leadership thatCommunicates the vision.Facilitates and model the behaviors of LeanManufacturingAssists the workforce in adapting to change.Coaches and develops the workforce.

2. Team - Based Culture that.Promote employee accountability andresponsibility for work.Leverage Knowledge by using highly skilled workers.Advocate the continual development of theworkforce.Believe that employee ownership of the final productis shared throughout the process.

3. Communication Systems that.Encourage on the spot decision - making processesthat use the fewest resources to resolve criticaldesign issues.Advocates and develop processes to identify criticaldesign issues as early in the process as possible.Drive the behaviors of internal operations as wellas focus on the behaviors of suppliers andcustomers.

4. Development and Continuous ImprovementProcesses thatDesign the product right the first time.Drive Commitment to eliminating problems(controlling them is not enough)Advocate just is time measurement systems tomonitor progress.Continually train & develop highly skilled workers.Promote constant improvement throughout thesupply chain.

COMMANDMENTS OF LEAN MANUFACTURING SYSTEMS

1. Abandon Fixed ideas

2. Think of ways to make it possible

3. Go for the simple solution, not the perfect one.

4. Correct mistakes right away.

5. Problems are opportunities.

6. Seek ideas from many people for improvement.

7. Use your units, not your wallet.

Lean Manufacturing Systems have proven not only to beuniversal, but to be universally successful at improvingresults.

When appropriately applied lean manufacturing is awell- tested platform upon which to build agiledisciplined practices.

It is a strategy for achieving significant continuousimprovement in performance through the elimination ofall waste of time and resources in the total businessprocess with absolute sense of passion for BusinessExcellence.


A ship in harbor is safe, but that is not what ships arebuilt for - John A. Shedd, Salt from My Attic, 1928

INTRODUCTION

There is an old adage in Tamil - When a poor saltvendor sets out to sell his salt, rain comes, when hetries to sell cotton, storm is his unexpected guest,

goes the saying. But he still venture out to carry on hisbusiness, unmindful of the risks he encounters day inand day out in his small enterprising struggle.

Risk is omnipresent- in every walk of life. Risk in businessis a management challenge. Every decision making in anenterprise involves risk taking. Supply chain has becomemore complex than what it was a decade ago. Newconcepts such as lean supply chain, outsourcing, make-to-order or assemble-to-order and vendor managedinventory (VMI), have increased the complexity of thesupply process enlarging the risk profile proportionately.Risks in supply process are enormous. With modern daysupply networks connecting various stake holders eachtrying to maximize their own supply profits, risks ascommon to all need to be addressed, particularly in shortgestation project environments.

There are many uncertain moments in a supply process.A fire accident few years ago in Hanil Lear, the only vendorthen to supply car seats, near Chennai put Hyundaimotors operations on hold for three good days. So wasthe recent case of Tata Motors short in production targetswith Mico, the fuel injection pump vendor, caught underthe clouds of recent Jaipur Oil inferno. Labour unrestsin auto components hub of India- Gurgaon pushed manyautomobile manufacturers in hardship. Indiangovernment early in the year imposing unexpected importrestrictions in tubular products in the form of advancelicense has made many a companies in the offshore oiland gas business incur additional opportunity costs andloose precious weather window available to them.

These incidents are not isolated. Many uncertain actionssubject the supply process into tremendous stressleading to losses. Can one control uncertain actions -the answer is a big NO. So what next, can a businessenterprise sham away the uncertain future, certainly not.Then what happens is what is interesting study and isthe focus manipulated by the authors. Risks are 'Danger'on the one side and 'Opportunity' on the other, describesAswath Damodaran. He also recommends that risks areto be challenged and risks are to be seen as opportunitieswaiting to happen and explored.

Risk Management in Construction Supply ProcessS.Krishnan, Materials Manager, Leighton India

and N.Panchanatham, PhDProf and Head, Deptt. of Business Administration,

Annamalai University

RISK - AN UNDERSTANDING THROUGH LITERATURE

Australian and New Zealand standards define riskmanagement as the culture, processes, and structuresthat are directed towards effective management ofpotential opportunities and adverse effects (AS/NZS4360:1999).

Aswath Damodaran describes Risk as "combination ofDanger and Opportunity - representing both downsideand upside of Risk". He opines that minimizing riskexposure would also reduce the potential for opportunity.Interestingly, he links rewards to risk exposure, in hisbook Strategic Risk Taking.

A McKinsey Global survey in 2006 brings out that 'Risksin supply chain are growing'.

Aberdeen group in 2008 finds out in a study that growingglobal operations and volatile global economy are twoprimary reasons for enterprises to focus on Supply chainrisk management practices. The primary risks asidentified by Aberdeen survey are supplier risk profileand logistics congestion.

Risks lurk along the entire length of supply chains, andare as diverse as political instability, exchange rates,carriage capacity, shelf life, and customer demand,describes David Stauffer (HBS WKS, 2003). He emphasizethat while larger risks were carefully looked into, smallerand mundane risks receives less attention. It isappropriate to note that demand fluctuations itself isseen as a risk, supply abundance is also seen as a risk,explains Prof Ananthraman of HBS.

It is argued by Marsh consulting that financialperformance is closely linked to supply risks which say"In today's increasingly complex environment, risk-adjusted supply chain management can translate toimproved financial performance and competitiveadvantage". Authors would like to draw inferences fromthe concept of supply chain profit advocated by Chopraand Meindll(2007) relative to financial performance inmanaging supply chain risks.

Supply chain disruptions can damage credibility withinvestors and other stakeholders thereby driving up costof capital' argues Russ Bosman of FMGlobal. In oneindustry after another, supply chains have stretchedfarther than they've ever stretched in the past andresultant fear is consequences of a more severedisruption - read risk, rues Russ. Globalization and lean


inventory to free up resources have seen more intensedebates over risks they posed and opportunities ofpotential bottom line improvements experienced bycompanies' world over.

Prof. Yanni Papadakis of Drexel university clearly linksstrategic importance of risk management in his 'eventstudy of Operational risk and supply chain Design'. Heargues that a risk management policy alleviate adverseimpacts of disaster induced supply disruptions.

TYPES OF SUPPLY CHAIN RISKS

While many scholars have identified as many as 110risks in construction supply chain, they all can normallybe clubbed under three categories. They are Demandside risks, supply side risks and process side risks. Bothinternal and external risks cover these three categories.However, project level risks have been highlighted in thefollowing paragraphs for quick review.

a) Capacity risksb) Supplier risksc) Financial risksd) Product risks / Quality riskse) Market risksf) Natural disastersg) Political/policy change risksh) Environmental and non environmental risksi) Govt., intervention risks / duties & policiesj) In house risks - Design changesk) Absence of enterprise wide risk management

framework

RISK MANAGEMENT AS A STRATEGY

Risks in supply process of highly fragmentedconstruction industry is no exception. Absence of longterm supplier relationships, very long lead times, uniquedesign challenges and change in priorities are some ofthe risk triggers in construction supply chain. Risk alsobrings in innovation akin to necessity. Successfulenterprises view risk management in supply process withstrategic importance and aligns them with overallbusiness strategy. Success of risk management in supplyprocess would clearly encapsulate best communicationskills, clear forecast standards, seeing them throughand hedging where necessary.

The author recalls his strategy lessons from IIM Calcutta,where Prof Biswatosh Saha, explains what a strategy isand how it should be developed. 'Expecting theunexpected' was what he has started his strategy classesto students. This essentially means that risk managementis forward looking.

Prof. Yanni Papadakis of Drexel University too aligns acompany's financial performance to that of supply chainstrategy with a particular reference to risk management.He further argues that the impact of supply disruptionsmay test if supply chain management affects company'srisk structure.

Risk is a strategic management. Failure to forecast riskis strategic failure and cannot qualify for successfuloperational forecasts. The operational inefficienciesforced on the manufacturers due to risks create

significant management challenges in the short term. Itcalls for prudent management strategies in supplymanagement context.

Hence, it is worth investing in developing supply chainstrategies with appropriate risk profiling done onpossible disruptions and uncertain variables presentnot just with the supply network but across the businessspectrum. This will help enterprises face all the threedimensions of risks such as risk pass through, risks toavoid and risks to seek out.

RISK AND INNOVATION

Risk taking plays creating innovation, argues AswathDamodaran. Contrary to traditional grouting system forsub sea pipe lines by grout bags filled with a particulartype of cement, a new design was developed by Leightonin one of its projects in western coast of India. The newsystem was for creating sub sea concrete mattressespre cast in on shore location and transported on bargesto actual installation locations in high seas. The designwas not approved by the client initially; however,Leighton confidently went ahead with the new designand laid the sub sea rigid pipes with these mattresses.While the variation was challenged by the client, passover of season one has proved that this system was farmore convenient, superior and cost saving. The trade offthough was split in use of grout bags and mattressesamong different pipeline sizes, ultimately, it resulted insignificant cost and time savings for both.

TRIGGERS FOR NEGATIVE / DOWNSIDE EFFECTS OF RISKDESIGN CHANGES

A design change during the course of project executionis a significant risk altering the total material forecast.Since material management / inventory planning ischarged to project in total, normally replenishmentstrategies do not exist in construction environment.Therefore any change in design triggers a fresh sourcingprocess. Also, specialized materials in offshore oil andgas projects commands a significant lead time. Thiscontext of operation is derailed resulting in time andcost overruns. Significantly, this is one of the core issuesaffecting the credibility of whole industry which mayresult in bad brand value.

Design changes are of two pronged. They could be due tosite conditions either due to faulty survey/estimation orsite conditions not suitable for choice of process. Forinstance, soil conditions would have changed after arainfall or an earthquake in the region, or increasedhydrostatic upward pressure which would needadditional reinforcement to prevent seepage fromground.

Design changes also occur due to change in clientpreferences or technical compliances. In one of theelectronic factory projects in India, Leighton has tochange the flooring system immediately afterconstruction due to increased static discharges beingobserved during factory operations.

CHANGE IN PRIORITYClient initiated and Site conditions


A change in design either at the drawing board or due tosite conditions change the operation priority. Anotherbig reason for change in execution priority isaccessibility & feasibility issues at sites. Electricalsystems need to be installed after civil works arecompleted. Similarly, false roofing systems would comeafter electrical systems and HVAC are installed. The orderdoes not change for things to fall in place. But manychanges happen at site level. They invariably stretch theproject completion timeline. In an offshore situation,the priorities change for various reasons such as clientinitiated, weather vagaries, conflict among various subcontractors, surprises in location-due to faulty surveysetc. However, such changes place exceptional pressureon supply process. As discussed previously, materialsin this segment are of make-to-order quantity andquality. A supply manager cannot be expected to ensuresupplies on sudden change of events and developments.However, things are different in construction and hence,sourcing efforts would continue albeit at premium andadded priority freight costs.

Changes are variations. They are significant triggers ofrisk. They fire additional resources in order to meet thechanges. Contractual obligations are strained,confidence level alters and brand image is weakened.However, changes cannot be avoided, but need to beforecasted in order to minimize the risk exposure.

TOO MUCH DEPENDENCE ON COST FACTOR - A RISK

Modern day supply management techniques focus toomuch on cost factor. Lean supply chains, limited vendorbase, dependency on just in time and make-to-order aregood as long as they work. Absence of Plan 'B' in failureof these concepts proves very catastrophic to enterprises.Examples are aplenty - Hanil Lear and Hyundai for seats,Mico and Tata for fuel injection pumps are a few toname.

Cost is a primary factor in any business enterprise.Making money is the process of business. However, thisconcept has to be prudently applied in risk management.Adequate contingencies to meet any risk and uncertainsituations shall have to be committed in project plans.Compromise in quality of products for costconsiderations would result in greater risk to loss oflife and materials. Projects in high risk industry such asoffshore oil and gas and construction would needadequate protection from risk arising out of cost cutting.

Customer - A risk in himself? Some times manydisruptions affect due to change in market conditions,choices by clients or client representatives. This is verymuch relative to construction industry. Also, priority ofrequirement affects the schedules there by disruptingthe supply flow. Projects are put into a limbo for aparticular choice of material. Customer suggestions andimprovements during mid project reviews create asituation where in the schedules changed toaccommodate the variations.

Outsourcing risks Engineering and procurementcontracts generally outsource major packages to keepthe project moving on fast track. Careful selection ofsub contractors becomes very important criteria for

successful completion of projects. Sub contractorfinancial capacity, operational efficiencies, design &engineering strengths and quality standards shall haveto be very carefully evaluated prior to award of subcontracts to them. Similarly, the primary contractor shallhave to ensure that sufficient provisions have been madeto meet any uncertain events or under performance bythe sub contractors. Plan 'B' - in corporate terms, couldwell augment risk mitigation strategy in the event ofsuch uncertain moments.

Dependency as a risk : Companies build relationshipover a period of time. Managers tend to trust in pastperformance while awarding new contracts. This systemhas known to be effective in most occasions. Adependency based on past performance has set to creepin the ordering system. However, it would be prudent onthe part of supply / contract managers to evaluate thecapacities of the vendor every time requirements comeup. This would basically help supply managers to getbest deals based on prevailing market prices and alsowill assure them of uninterrupted supplies.

LOOKING FORWARD

Aswath Damodaran clearly sets out classification risksin to the following:- Risks to pass through- Risks to seek out- Risks to avoid or hedge

A careful analysis of risks in hand would help supplymanagers to decide whether to seek that risk or to hedgeor to pass through to other stakeholders in the chain.When a risk is clearly expected during the supplyprocess, if the returns are expected to be high, hedgingwould be the best mitigation strategy. Similarly, supplymanagers would also have to consider when to avoid arisk if the resultant returns are expected to be in thenegative.

Some of the characteristics of risk mitigation strategycould be a clear visibility of supply process amongst allstakeholders of the chain, control procedures in place,continuous monitoring of the process and confidence inthe process itself. Ensuring continuity and adequateprotection mechanism in the form of hedging also helpsin facing the disruptions. Logical payoffs and tradeoffswould go a long way in ensuring converting the dangersinto opportunities and liquidating the risks.

Another important factor in risk liquidity would beadequate frame work and organizational support spreadacross enterprise. Enterprise level risk managementstrategy would add strength and convey the confidenceto executives in handling and liquidating disruptionsduring a supply process. The key to success is not toavoid risks but to analyze the risks, weigh the pros andcons, calculate the loss and gains and hedge if necessaryand drop out if loss outweighs gains.

The results of research work by the author onConstruction Supply Chain delay attributes and relatedrisks would be shared with wider SCM communitythrough this forum on completion with liberal feedbackfrom practicing community.


INTERNATIONAL NEWSV. K. JAIN

Sr. Delegate of IIMM to [email protected]

Japanese Finance Minister Yoshihiko Noda proposedan "Asia Cargo Highway" as Asia's long-term goal tocreate seamless flows of goods in the region to be

realized by 2020. Measures include the development ofan Authorized Economic Operator (AEO) program in eachcountry and conclusion of mutual recognitionarrangements (MRAs) of the AEO programs. Among theother measures will be the establishment of a nationalsingle window (NSW) system in each country andexpansion of international interoperability between thesystems, as well as other basic trade facilitation reformsthat are necessary for modern customs administrations.

DHL will provide free logistics support to aid the deliveryof relief supplies to affected areas of Japan followingthe March earthquake and tsunami.

Transport infrastructure in the Philippines will get amajor boost next year when Laguindingan Airport inMindanao opens for business.

Consultant Drewry and electronic derivatives platformClear trade Exchange have teamed up to launch a weeklyindex covering 11 routes on the major east-west trades.

The freight is growing containership fleet has returnedto pre-crisis levels, with just over 70 ships recorded asunemployed. The latest figures from analyst Alphalinershow that the idle fleet has reached a 30-month, lowwith 71 ships, or 134,000teu, laid up.

The Semiconductor Industry Association (SIA),representing US leadership in semiconductormanufacturing and design, has announced thatworldwide sales of semiconductors were $25.3bn forthe month of March 2011, a 2.5% increase from the priormonth when sales were $24.7bn, and an increase of8.6% from March 2010.

Exporters and importers around the world remainoptimistic about trade prospects in the next six monthsdespite increasing concerns about rising costs, reducedprofitability and volatile demand.

Toll Group has announced the successful establishmentof a new US$400 million three year multi currencysyndicated debt facility as part of the Group's debtrefinancing program, to replace existing facilities. Thenew facility ensures Toll's future financial flexibility andsupports their ongoing investment in growth via both

capital expenditure and acquisition.

International air freight traffic grew 3.7 percent in Marchover the same month a year ago despite a decline inshipping in Asia following the Japanese earthquake andtsunami, the International Air Transport Associationsaid.

Amazon.com plans to build its eighth logistics center inChina this year, Chinese officials said Tuesday. Thecompany's newest warehouse is slated for constructionin Kunshan, a city in China's Jiangsu Province. Oncefinished, it will be the online retailer's largest logisticscenter in the country at 100,000 square meters.

Coca-Cola is planning to implement a greener method ofmoving product around its warehouses. Coca-ColaConsolidated will be using hydrogen fueling system formaterials handling equipment produce by Linde, one ofthe world's largest hydrogen energy producers andalternative fuel technologies. Starting in June, Coca-ColaConsolidated's Charlotte, NC, distribution center willbegin using forklift trucks that will run on green hydrogenproduced and supplied by Linde. There will be threeindoor dispenser stations that will provide hydrogen tothan forty pieces of materials handling equipmentoperating inside the distribution center.

The battle over 100 percent scanning of U.S.-bound oceancontainers is taking another sharp turn in a partisanskirmish over maritime security. A bill to reauthorizethe 2006 SAFE Port Act includes a provision that wouldsuspend the July 2012 deadline for scanning allcontainers before they board a U.S.-bound vessel.

In a recent report from Thomson Reuters, the analysisshows that consumers are evenly split when favoringconvenient packaging over environmentally-friendlypackaging. In their report, "Convenience v Conscience",the authors have found the consumers are lacking theinformation to choose environmentally-friendly becausethey are unclear on what it is. Consumers lack the skillsto identify environmentally-friendly as there appears tobe no clear definition of what green packaging is.Consumers need to be better educated as to whatenvironmentally-friendly packaging is and how its usecan improve the environment. Along with this there needsto be an improvement on the identification of packaging.


BRANCH NEWSBANGALORE BRANCHCHENNAI BRANCHCHANDIGARH BRANCHHUBLI BRANCHKOLKATA BRANCH

LUCKNOW BRANCHMUMBAI BRANCHNASIK BRANCHPUNE BRANCH

BANGALORE BRANCH19.04.2011 : As part of MM week Celebration, IIMM,Bangalore Branch was organised a Plant Visit to ICD.About 24 students and Members participated in thevisit. Participants felt that this visit has providedpractical knowledge on various aspect related toCustoms clearance & Import & Export Procedures. Mr.Vijaya Vittala, E.C. Member co-ordinated the program.

A view of Participants -Plant visit on 19.04.2011 at ICD

20.04.2011 : As part of MM Week Celebration, Branchwas organised a Lecture Program on “Executive HealthAwareness for the benefit of Students and Members.Speaker was Dr. B.S. Srinath, MS, FRCS (Edin) FRCS (Glas)Consultant Surgical Oncologist & Managing Trustee SriShankara Cancer Foundation. The program ended witha lively interaction by the members with speaker.

Dr. B.S. Srinath, MS, FRCS (Edin) FRCS (Glas) ConsultantSurgical Oncologist & Managing Trustee, Sri Shankara

Cance Foundation on his presentation.

23.04.2011 : The final event – Materials Management

Day – was celebrated in the evening on 23rd April 2011at Rotary Club, Lavelle Road, Bangalore. Theme was“Contain Inflation-Optimize Supply Chain” . S.B. Lovekar,Director, Bosch Management Services India (BMSI) wasthe Chief Guest and Mr. Chakravorthy Debaprasad,Practice Head-Sourcing & Procurement, Infosys BPO,Bangalore was the Key Note Speaker. Mr. V. Harish,Branch Chairman welcomed the gathering. Mr. P.M.Biddappa, Vice President (South) gave presentationabout IIMM Activities and briefed on the MM Day. ChiefGuest Mr. S.B. Lovekar, Director, Bosch ManagementServices India (BMSI) addressed gathering gave awaythe prizes to the winners of Essay Contest, QuizCompetition, Debate Competition and Best Supply ChainManager Competition. Mr. C. Subbakrishna, Sr. VicePresident & Mr. K.C. Harsha, National CouncilorHonoured Senior Members who have completed 25 yearsand above as member. Mr. Channabasappa, BranchVice Chairman, proposed formal vote of Thanks. Mr. D.Subramani, Branch Secretary was the Master ofCeremony.

Mr. Chakravorthy Debaprasad,Practice Head-Sourcing&

Procurement, Infosys BPO, Bangalore delivering KeyNote Mr. C. Subbakrishna, SRVP, administered Oath of

IIMM,Code of Ethics.

28-29.04.2011 : Two days workshop on “DevelopingSupply Strategies” based on Modular Learning Systems,ITC UNCTAD/WTO was organised at Hotel Royal OrchidCentral. Workshop was handled by the Sr. Faculty andTrained, and certified by MLS,ITC.The interaction andfeedback was extremely encouraging which wasattended by delegates.

Mr. T.K. Ramasubbu, Sr. Faculty Handling the Session&

A view of Participants with Faculty members


11.05.2011 : A Study Circle Meeting was organised on11th May 2011 on “Commodity Pricing” by Mr. Ajit Kumar,Asst. General Manager (Materials) L & T KomatsuLimited, Bangalore. Mr. C. Subbakrishna, Sr. VicePresident , IIMM welcomed speakers and addressedthe students / members. Mr. Vijay Vittala, E.C. memberintroduced the Speaker. The program ended with a livelyinteraction by the students / Members with speaker.

Mr. Ajit Kumar, AGM (Matls) L&T Komatsu Addressingthe Gathering & Mr. C. Subbakrishna, Sr. Vice

President, addressing the gathering-------------------------------------------------------------------------

CHENNAI BRANCHReport on Monthly Meeting on "Union BudgetImplications on Indirect Taxes" on 6th April 2011 : IIMMChennai Branch organized a meeting on "Union BudgetImplications on Indirect Taxes" on 30th March 2011 atHotel Deccan Plaza. The meeting was presided by Mr.NSwayambhu, IIMM Chennai Branch Chairman.

Mr. K.K. Sekar, DGM - Taxation (Indirect Taxes), AshokLeyland Limited gave a presentation on "Union BudgetImplications on Indirect Taxes" The presentation wasexcellent and was well appreciated by the members. Theprogramme was well attended and there was goodinteraction after the presentations.

Mr. V Seetharaman, our IIMM Chennai Branch ViceChairman gave vote of thanks. The meeting wascoordinated by Mr. C Chandrasekaran, Chairmanmonthly meeting.

Chennai Branch level and Regional level - SCM Quiz 2011

As like every year for the MM week, we organized SCMQuiz 2011 both state level & Regional level [SouthernIndia]. This time, It made a big difference in terms onoverwhelming response from many organizations andfrom different verticals. We had to say no to manyorganizations. We had to put stop with 15 teams and therepresentations were from Foster Wheeler, Delphi TVS,Accenture, Rane Madras, Wheels India and Vestas Wind.

On 3rd of April we conducted the state level SCM quizand the team from Delphi TVS and Vestas Wind baggedthe Winners award with tie in place. The Delphi TVSteam comprised N. Sriram Chari and C. Jayabharathiwhile K.N. Gopinath & Vijay Mani from Vestas Wind.

On 17th of April we conducted the regional level SCMquiz. The top three teams from Tamil Nadu withrepresentations from Delphi TVS, Vestas wind & Fosterwheeler and Two Teams from Bangalore withrepresentations from L & T Komatsu participated in it.


The team from L & T Komatsu bagged the Winners awardand Delphi TVS bagged the Runners.

The teams were felicitated during MM Day celebrationson 23rd of April 2011. The quiz was well organized withMr. V.Seetharaman as the convenor, Mr. T.K.Padmanabhan as Quiz Master and Mr. ArshadMohammed Thanveer as the content compiler.

Materials Management Day

The 28th Materials Management Day was celebrated byChennai Branch on 23rd April 2011 at Hotel DeccanPlaza. Chief Guest was Mr. N.S. Sivaraman, VP, L&TProjects (Retd).

To mark this event a Panel discussion is organized duringthe day on a theme "DEMAND MANAGEMENT OF OIL ANDENERGY NEEDS 2011" the panelist were Mr.Eswaramoorthy of General Manager (Logistics/PowerTrading) OPG Power Generation Pvt. Ltd and Mr. S KRamanathan of Indian oil corporation - Heading the

Logistics Department of IOCL Southern Regional Office,Chennai

IIMM Chennai along with Tecpro Systems ltd hasinstituted IIMM - Tecpro outstanding SCM ManagerAward this year. After perusing the nominations receivedfrom various companies and individual Supply ChainManagers. Mr. P Sukumaran, Head SCM at TitanIndustries limited, Housur was selected by awardcommittee and awarded "Outstanding Supply ChainManager -2010" award. The award containing a citationand memento were awarded to Mr. P. Sukumaran, TitanIndustries Ltd by Mr. N.S. Sivaraman, VP, L&T Projects(Retd) our Chief Guest.

More than 65 MM/SCM professionals including pastNational President Mr.S.Krishnaswamy, past Chairmen,distinguished members and EC members attended theMM Day celebrations.

Mr. M. Sundaram outlined the details about IIMM -Tecpro award for which more and more companies willcompete in the coming years. Mr. N S Sivaraman in hisaddress lauded the efforts of Chennai Branch of IIMM inall their activities

Mr.N.Swayambhu, Branch Chairman welcomed thegathering and Mr.T.A.B.Barathi, Hon. Secretary whothanked the companies and professionals whoparticipated and also thanked Mr. A.K.Bishnoi, CMD ofTecpro Systems for his excellent support in helping usto institute IIMM - Tecpro award. All the invitees weretreated to an excellent dinner. Mr. Karthi Dore , IIMMChennai EC Member who was compiled entire MM daycelebrations


Report on IHT Programme on "Inventory Management& Lead time reduction" for Health Care Professionals atHotel Park Plaza, Coimbatore on 17th April 2011

Coimbatore IHT for Hospital personnel

IIMM Chennai branch organized a custom-designed Skilldevelopment programme on " Inventory Management &Lead time reduction" for personnel from varioushospitals at Hotel park Plaza, Coimbatore on 17th April.The contents and methodology of the programme weredeveloped based on interactions with hospital storesand materials personnel. 32 persons participated. Inthis interactive session anchored by Mr. Kartik Dore corefaculty for the programme from IIMM Chennai aspectsspecific to inventory management covering differenttypes of materials used in hospitals were highlightedfor developing the best practices for each hospital.Illustrations and examples drawn from real lifesituations were taken up in group actvities to enhancethe competence level of participating personnel.Supported by Mr.V.Ramachandran co-coordinating IHTs,participants could share their own practices which canbe developed based on current trends in hospitalmaterials management.

Mr. Shankar Subramanian Regional Sales Executive ofEthicon division of Johnson & Johnson Chennai presidedthe valedictory function

Joint Video Programme with MMA

A Joint Video programme was organized with MMA on20th April 2011 at "V.Hariharan Hall" at IIMM Office.This video from the archives of MMA was on "LeadershipEmpowerment". More than 15 participants from MMA &

IIMM enjoyed the video show. Mr. TAB Barathi, HonSecretary, IIMM Chennai Branch was the moderator andthe interaction was lively.---------------------------------------------------------------------------

CHANDIGARH BRANCHMaterials Management (MM) Day was celebrated by thebranch on April 23rd 2011 at Sip-N- Dine, Chandigarh.Around 40 members attended the celebrations. ActingSecretary Sh. V. S. Maniam welcomes the members andinvited dignitaries to the Dias. Dr. A.K. Saihjpal branchchairman delivered his inaugural address andhighlighted the importance of the MM Day. Heemphasized the need of practicing ethical norms in allsphere of life for peaceful & graceful living. Hecomplemented Anne Hazzare’s movement for weedingout corruption, which is eating away the very vitals ofour country. Dr. Saihjpal felt the need to ‘resolve’ to burythe corrupt practices forever in order to make our countryand the whole world a better place to live in. If we allachieve even if a bit of it we would have satisfaction ofhaving achieved our goal.

Quizmasters - Sh. T.K.Magazine, Dr. A.K.Saihjpal, Sh.S.K.Sharma, Sh. O.P. Longia & Sh. V.S. Maniam

Dr. A.K. Saihjoal Branch Chairman delivered hisinaugural address

Sh.O.P. Longia administered the oath of “Code of Ethics”adopted by NHQ which embodies principle of ethicalbehavior. All the members stood up with right hand raisedwhile taking oath. He further informed that this yearNHQ has circulated a theme “Contain Inflation- optimize


Supply Chain” for discussion on MM Day. He gave a briefoverview Inflation, reason for inflation & how it affectsthe Supply Chain. He also gave tips to counter inflationto optimize Supply Chain to achieve over all objectivesto contain it.

Sh. S.K. Sharma, Past National President of the IIMM,congratulated the branch for its developmental activities& commendable efforts in organizing all the events duringyear 2010-2011 in a great fashion. He expressed hisoverall happiness about the action taken by the branchin communicating members for its monthly lecture onthe basis of feedback received from one of the membersin the last meeting.

Sh. S.K. Sharma & Sh. T.K. Magazine- DistinguishedMember conducted a MM Quiz, was participated by fourteams. Sh. S.K. Sharma, acted as Quizmaster, whichcovered latest as well tough question and were of higheststandard by all means. Following teams participated inQuiz & their positions in the Quiz were as follows:

Position Team

1st Sh. Jaspreet Singh & Sh. Pradeep Dandiya

2nd Sh. Rohit Pant & Sh. Sanjiv Saharma

3rd Sh. Sandeep Goel & Sh. M.K. Khanna

4th Sh. M. S Arora & Mr. Praveen Singla

The awards were given to 1st Position Team -Sh. Jaspreet Singh & Sh. Pradeep Dandiya

The awards were given to 2nd Position Team -Sh. Rohit Pant & Sh. Sanjiv Sharma

The awards were given to 3rd Position Team -Sh. Sandeep Goel & Sh. M.K. Khanna

The awards were given to 4th Position Team -Sh. M.S. Arora & Mr. Praveen Singla

The awards were given to all of them as a token ofappreciation.

Taking oath ceremony branch members

Mr. Dilip Manchanda Life Member recites the poemhighlighting importance of National Language Hindi inour day-to-day life. Acting Secretary Mr. V.S.Maniamconcluded programme with Vote of Thanks.---------------------------------------------------------------------------

HUBLI BRANCHA seminar on Taxation was conducted on Taxation-particularly the e-sugam, recently introduced in the State


of Karnataka, to have the audit trail of Goods enteringthe State availing VAT, The Guest Speaker was MrG.B.Goudappagol, Deputy Commissioner of CommercialTaxes, Govt. of Karnataka, Hubli. This was a free seminar.All prominent indistries of this area had participated inthis. This was attended by more than 50 participants.Among the important ones was the President ofKarnataka Chambers of Commerce & Industry, Hubli MrM.C.Hiremath, Head Supply Chain, Telcon Mr AjitabKumar, Controller of Stores and Procurement, NWKRTC,Mr Suresh Babu, besides participants from SouthWestern Railway. The function was presided by theBranch Chairman Mr R.K.Aherwar.

Left Mr R.K.Aherwar, Branch Chairman, Centre- Mr G.B.Goudappagol, Dy Commissioner of Commercial Taxes,

Right-Mr B.S.Rangnath, Hony Secy IIMM Hubli

---------------------------------------------------------------------------

KOLKATA BRANCHCELEBRATION OF MM DAY’ ON THE THEME -’CONTAININFLATION -OPTIMIZE SUPPLY CHAIN MANAGEMENTSYNCHRONIZING 27 ANNUAL CONVOCATION

Kolkata Branch celebrated ‘Materials Management Day’synchronizing 27th Annual Convocation on 21st April,2011 at Kalakunj Hall in a befitting way. The theme ofthe MM Day, as selected by the NHQ, was ‘ContainInflation - Optimize Supply Chain Management1. Sincethe 23rd April, 2011 being Saturday and AssemblyElection to West Bengal Legislative Assembly is ongoing,

the celebration of MM Day was clubbed with 27th AnnualConvocation of the Branch. It was a dazzling showprimarily organized by the budding professionals whohave successfully come out with &DMM. More than 150members with spouse, guests and passed-out studentsturned up and enjoyed the evening.

Mr. Minal Shanghavi, Associate Director, Ernst & Young,graced the occasion and deliver the Key Note Address onthe MM Day Theme - ‘Contain Inflation - Optimize SupplyChain Management’. In his lucid presentation, hevisualized the topic before the practicing MMProfessionals, guests and passed-out students.

Prof. Balram Avittathur of Indian Institute ofManagement Calcutta, also grace the occasion as theChief Guest and delivered Convocation Address.Primarily he focused on the topics of Supply ChainManagement and his discourse about the topic wasattractive and inspiring to the budding as well aspracticing professionals.

Finally Mr. Minal Shanghavi and Prof. Balram Avittathurhanded over the GDMM Diplomas to the passed-out6DMM students wearing Graduation’s regalia. SoldMedals were also awarded to the respective students ofeach Batch for securing 1st Class First Position. “

At the beginning, Mr. Sudhin Mitter, Hony. Secretary, IIMMKolkata Branch, offered introductory remarks andwelcomed the Chief Suest, Key Note Speakers, pastChairmen and members of the Branch and particularlythe passed-out students and their family members. Mr. T


K Mukherjee, Officiating Chairman, also welcomed allto the MM Day Celebration and Annual Convocation.Mr. Minal Shanghavi and Prof. Balram Avittathur werefelicitated with Bouquet and Memento.

On conclusion of the Official Programme, the Stage wasduly handed over to Team Nachiketa and Nachiketa keptthe audience spellbound for an hour with enchantingmusical soiree. The whole programme was concludedoffering mouth-watering sweets packet to all.---------------------------------------------------------------------------

LUCKNOW BRANCH23.04.2011 Evening : All the present were welcomed,Congratulated and greeted on the IIMM Day. IIMM daycelebrations commenced with a presentation from StateBank of India, Main Branch Lucknow. The presentationparty was led by Mr. S.K.Tandon AGM and included Ms.Vineeta Goel, Mr.Anup Srivastava, Mr. Uttam Verma andMr. Vivek Oberoi.

Mr. S.K.Jha, MD, HAL presenting Best Faculty Award toMr. K.G. Mishra

The topic of presentation was Loans, Corporate Salaries,SBI Mutual Fund and other related issues. The party onarrival was greeted with pleasantries.

Shri P K Bajpai, Treasurer handing over Mementoe toShri S.K.Tandon AGM, SBI.

Ms. Vineeta Goel started her presentation with Loanswith power point presentation showing variouscomparisons. Mr. Anup Srivastava, Mr Uttam Verma and

Mr Vivek Oberoi highlighted about SBI Mutual Fund. Theyeven said that 40% return is available over a period ofOne year. Duration of the presentation was one hour.

A view of the gathering listening to Ms Vineeta Goel’s(SBI) presentation.

The presentation was appreciated by all present. SBITeam distributed the literature on the subject. A Mementowas presented to Mr. S.K.Tandon AGM by Mr. P.K.Bajpai.Mr. S.KJha, Managing Director, Hindustan AeronauticsLimited and Past Chairman of the Branch was alsopresent.

SBI Presentation TEam with other SBI Officialsand AGM SBI

Last Year during Natcom at Bangalore Mr. K.G.Mishrawas declared Best faculty and the award was handedover to him by Mr. S.KJha MD(HAL). Mr. Mishra is also apast Chairman of the Branch and without his addressnone of our Program is complete. Mr. Mishra Thankedeverybody at national level and branch level forappreciation of his services and also wished many happyIIMM days to come and let the Institution flourish. Atthis juncture the program ended. Ms. Vandana whoanchored the program thanked all present.

24.4.2011 : This was the Second Function of thecelebration. The program was family get together anddinner. This is the program for which family memberswait for whole of the year and enquire about it. Whileladies continued with their gossip, Children were playingwith each other the elders and other members were seentalking about the current issues. A new place in the citycalled Aryans Essence Banquet Hall was found and thisprogram was arranged there.


As the evening grew Members with their families startedflowing in. While Snacks were being served to all, TheDinner was announced at 9.30 P.M. when the gatheringwas at its peak. M/s Aryans served the sumptuous dinnerwhich everybody appreciated. The attendance was 280including Family Members. This was one program wheremembers come with their families and enjoy. The Dinnerconcluded at 1045pm.---------------------------------------------------------------------------

MUMBAI BRANCHMATERIALS MANAGEMENT WEEK CELEBRATIONS

Mumbai Branch celebrated MM Week 2011 in a befittingmanner with a series of programs tailored to meet theneeds of different sectors - Members and their families,Students, Industries etc. Brief details of the programsare given below:

Evening Seminar on "Risk Mitigation in SupplyManagement" : This was the first program of MM Weekand was held at Hotel Satkar Residency, Thane on April15, 2011. There were two speakers who covered thetopics excellently:Mr. N Sukumar, Sr. Vice President - Supply ChainManagement, Reliance Industries Ltd spoke on "RiskMitigation in Supply Management" and Mr. Ajit Tamhane,Director, Lisaline Life science Technologies LLC, spokeon "Risk Management in Cold Chain Logistics". Theprogram was very well attended with more than 70delegates from various industries as well as ourstudents. The participants evinced keen interest in theproceedings and there was lively inter-action with thespeakers. Mr. B V Iyer, IPP, graced the occasion with hispresence and also addressed the audience. Mr. VeerSidhwani, Invitee Member of Branch EC coordinated theprogram.

Mr. N Sukumar addressing the audienceMr. Ajit Tamhane addressing the audience

Morning Seminar at Taloja on "Achieving Success in SupplyChain Management --- An Inter-active Session"Mumbai Branch organised a morning seminar at Talojaon "Achieving Success in Supply Chain Management" onApril 20, 2011. The seminar was delivered by Mr. A CSukhtankar, President, Innova Life Science Ltd., andsenior member of IIMM, delivered the seminar anddeliberated on the key principles and skill sets neededfor achieving success in supply chain management. Itwas highly appreciated by the audience consisting ofmore than 50 participants from various industries in

and around Taloja. Mr. P Subramanian, M.D. of E-starCommerce Exchange LLP (who supported this program)gave a presentation on the facilities available with hisorganisation, for the benefit of members. Dr. R S Shete,Director-Membership Development, coordinated thewhole program.

Mr. A C Sukhtankar addressing the audienceMr. P Subramanian addressing the audience

Evening Seminar on "INCOTERMS 2010"

Mumbai Branch organised an Evening Seminar on"INCOTERMS 2010" at Goregaon Campus on April 21,2011. The seminar was delivered by Mr. R P Gautam,GM-MM - (Retd) and Consultant, ONGC. He dealt at lengthexhaustively on the salient features of INCO Terms 2010and the changes from the earlier Terms which have nowcome into effect. More than 50 participants from variousindustries, as well as our students, attended the seminarand found the same extremely useful in enhancing theirknowledge. The entire program was planned andcoordinated by Mr. P H Gupta, EC Member of the Branch.

Mr. Ashok Mhatre, Hon. Treasurer, welcomingMr. Gautam


Mr. Gautam addressing the participants

A section of the audience

Two-Day Certificate Course on "Enhancing Supply ValueChain through Effective Strategic Procurement"

A two-day Certificate Course on "Enhancing Supply ValueChain through Effective Strategic Procurement" was heldon April 29 & 30 at Goregaon Campus. The topics coveredduring the course were "Determining Factors inProcurement", "Analysis of Supply Markets","Developing Supply Strategies", "Negotiations","Supplier Relationship Management", "Developing SoftSkills" etc.

Mr. N Krishnamoorthy conducting the session

The individual topics were conducted by expert faculties- Mr. S K Murthy, Mr. M H Varma, Mr. S M Haldankar, Mr.G R Apte, Mr. A R Sarkar, and Mr. N Krishnamoorthy - allexpert faculties with long years of professional andindustry experience. About 15 participants from a cross-section of Industries attended the course and were

awarded Certificates at the end of the course. Mr. NKrishnamoorthy, senior invitee member of MumbaiBranch conceptualized the course format and topiccontents and coordinated the entire course.

Mr. M H Varma conducting addressing the audience

Mr. A R Sarkar addressing the audience

Mr. G R Apte addressing the audience

Mr. S M Haldankar addressing the audience


CONVOCATION -2011 : Mumbai Branch conducted theConvocation -2011 for the presentation of GDMMDiplomas to the Passing out Students of 2007- 2008Batch.

The event was held on the evening of Saturday, 7th May,2011 at Mayfair Banquets, at Worli, Mumbai.Mr.Sridharan Jayaram, President, Aditya Birla Group,was the Chief Guest, and delivered the ConvocationAddress and distributed the GDMM Diplomas to theStudents. Mr.Surendra Deodhar, Chairman of MumbaiBranch welcomed the Chief Guest and the students,faculties and other dignitaries. He spoke about theinitiatives of Indian Institute of Materials Managementfor over 40 years, for the cause of dissemination ofmaterials management knowledge and skills amongstpractising professionals.

Mr.Ashok Mhatre, Hon. Secretary, addressed theaudience and dilated upon the various courses beingoffered by IIMM along with GDMM to cater to differentlevels and focus areas of Supply Management. The ChiefGuest Mr. Sridharan Jayaram, addressed the studentson the value of professional education in enhancingone's skill-set and crucial role of Supply ChainProfessionals in setting World Class ManufacturingStandards. He complimented the Students for havingcome out successful in their GDMM Program. He praisedIIMM for doing such yeoman service for the cause ofprofessional education. Couple of Graduating Students,Mr. Ajay Desai and Mr. Pradeep Pevekar shared the joysof their educational journey with IIMM, and alsonarrated as to what extent the GDMM learning had helpedthem in their Career. The students and other inviteeswere entertained with a sumptuous dinner.

Mr. Surendra Deodhar welcoming the gathering

Mr. Ashok Mhatre speaking abouteducational activities

Mr. Sridharan Jayaram, Chief Guest, deliveringconvocation address.

View of Passing out students

Soft-skill Training Program for our Students

Mumbai Branch, as part of their initiatives to upgradethe skill-sets of students organized a Free Workshop onPublic Speaking Skills, on Sunday, 24th, April, 2011, atJayaleela Banquets, Goregaon East, as a Full Day event

Mr.AC Sukhtankar, one of our popular Faculties,conducted the Workshop. The program was designed insuch a way by the faculty, that after a session on theessentials of planning the contents of the address, bodylanguage, voice modulation, opening / ending,recapitulation, clarity and precision in the thought-process, interaction with listeners etc, some hand-pickedstudents were asked to address the participants onselected theme.

Their addresses were video graphed and played back.The Faculty and the participants themselves criticallyexamined the shortcomings on each address in terms ofthe aforesaid key elements.

In the Second Session, the same participants were givena different theme and were asked to deliver a secondaddress, taking care to avoid the pitfalls committedearlier by them.

More than 40 students turned out for the Workshop. Thefeedback was a clear enhancement of their confidencelevel in addressing a gathering on any theme.

In the afternoon Session, the students were treated toprivate viewing of the famous Oscar Winning Film, "TheKings Speech", which highlights the need for repeatedpractice and will-power to overcome our shortcomingin any activity, let alone Public Speaking.


Mr.Ashok Mhatre, Course Coordinator and Hon.Treasurer of the Branch, thanked Mr.Sukhtankar forhaving developed such wonderful Workshop to help thestudent community to acquire skills of addressing agathering with confidence and appeal.

Mr.V.Balasubramanian, Director-Education, planned andcoordinated the event very endearingly.

Mr. A C Sukhtankar inter-acting with the students

Mr. Ashok Mhatre addressing the students

Matquiz 2011 - Preliminary

Mumbai Branch conducted its highly popular program -"Matquiz 2011 - Preliminary" - a uniquely designedcompetition to challenge the domain knowledge of SupplyChain Professionals, on Sunday, May 1, 2011, at ourGoregaon Campus. 25 teams from reputed organisationssuch as ONGC, Siemens, ACC, Hindustan Unilever, GhardaChemicals, Paper Products, Godrej Appliances, KonkanRailway, BPCL, HCC, Mahindra & Mahindra, RelianceIndustries, GDMM Student teams etc. participated in thecompetition. Some companies sent several teams for thecompetition.

Mr. Surendra Deodhar, Chairman, Mumbai Branch,inaugurated the program. Mr. B V Iyer, IPP, graced theoccasion with his presence and addressed the gathering.

Ms. Hemaprabha Vasa, ex-GDMM student and inviteemember of EC, along with the team of volunteers,designed the format of the contest and compiled thequestions under the guidance of Chairman and othersenior members. Mr.Amit Arora and Mr. Diju Kumarmanned the Scoring Panel.

Mr. G R Apte, Mr. Ashok Mhatre, Mr. Ajoy Sarkar acted asQuiz Masters. Mr. Pradip Saha, Mr. D. Pushparaj, Mr.Surendra Deodhar and Mr. B V Iyer, were the ModeratingJudges for the Event.

Lighting of inaugural lamp by Mr. B V Iyer

Family Get-Together

As part of MM Week Celebrations, Mumbai Branchorganised a Get-Together of members and their familiesas well as students, on April 23, 2011, at "Landmark"(Party Hall), Goregaon. The program included orchestra,singing, dancing, mimicry, Games, etc. and provided aplatform to the participants to exhibit their histrionictalents. Approximately 100 persons included studentsparticipated in the program. The event provided aplatform to students to inter-act with senior members ofthe Institute.

The whole program was conducted under the guidanceof Mr. N D Sadri, Vice Chairman.

Orchestra in progress

In-House Training Programs

Apart from the various programs connected with MMWeek Celebrations as detailed above, Mumbai Branchalso conducted In-house Training programs as under:

In-house program at Hindustan Construction CompanyLtd (HCC) on April 16, 2011

A One-day in-house training program was conducted atHCC Ltd. at their Vikhroli Works on April 16, 2011, on"Strategic Negotiating" based on MLS Module 7. This


was in continuation of earlier programs coveringdifferent batches of their employees. Approximately 10participants attended the program. The topic was coveredby Mr. B V Iyer, IPP, a popular and expert faculty on thissubject, with long years of professional and industryexperience. Mr. S K Murthy, Director-Programscoordinated the event.

Mr. S K Murthy welcoming the participants

Mr. B V Iyer addressing the participants

In-House program at Mahindra & Mahindra Ltd. (M & M)Nagpur on April 18 & 19, 2011

A two-day in-house training program was conducted atM & M Ltd. at their Nagpur Works on April 18 & 19, 2011,on "Strategic Negotiating" based on MLS Module 7. Thiswas also in continuation of earlier programs coveringdifferent batches of their employees. Approximately 12participants attended the program. The topics werecovered by Mr. G R Apte and Mr. S K Murthy, both expertfaculties on this subject, with long years of professionaland industry experience. Mr. S K Murthy, Director-Programs, coordinated the event.---------------------------------------------------------------------------

NASIK BRANCHMM Day Celebration : Nasik branch celebrated Materials\Management ( MM ) Day on 23rd April 2011 at HotelEmerald Park, Nasik. The MM day celebration startedwith the welcome address by Mr Kiran Rakhe , BranchChairman. He highlighted the importance of the day andlisted out the various achievements and activitiesorganised by Nasik Branch during the financial year .Mr. Laxmikant Dashpute, Hon . Secretary introduced theprominent speaker Mr. Shriniwas Mantri , General

Manager - Fianan ce, Mahindra & — Mahindra Ltd . Mr.Shriniwas Mantri given a detailed and informative _presentation on the MM Day theme ‘ Contain Inflation -Optimize Supply Chain.

Mr. Kiran Rakhe, Chairman, Nasik Branch givingwelcome address

Mr. Kiran Rakhe welcome the faculty, Mr. ShriniwaasMantri by presenting boquet

He also shown a brief video clip on the working capitalwhich was very much informative and appreciated bythe audience . The NC Member, Mr. H.W.Aher, introducedthe second speaker Mr. Narendra Goliya, M.D, RishabhInstruments P Ltd. Mr. Goilya gave a thought provokinglecture on the subject which covered Global recession,inflation, Complexity and unpredictability and variousfactors linked to Supply Chain professionals.

Mr. Shriniwas Mantri, G.M.-Finance, Mahindra &Mahindra Ltd. giving presentation


Mr. Laxmikant Daspute, Hon. Secretary introduce thefaculties to the audience.

Mr. Narendra Goliya, M.D. Rishabh Instruments P. Ltd.,delivering lecture.

Further, he gave different tips from his practicalexperience how one can respond in even difficultsituations by adopting a flexibility approach. The lecturewas well appreciated by all members. Mr. A.A. HasabnisNational Council Member administered the ‘Oathceremony‘ to all members by raising their hand forobserving IIMM Code of Ethics which embodies principleof ethical behaviour. He gave away vote of thanks andthe programme was well attended and followed by dinner.---------------------------------------------------------------------------

PUNE BRANCHEvening programme on 5th, February 2011 at HotelKalasagar : As part of our lecture series to enhance theknowledge the members a evening programme wasarranged on the topic " PURCHASE TO PAYMENTS " - ASEAMLESS EXPERIENCE. This was done in associationwith Sparkplugs Educational & Learning Services.

We are all aware that in the present business scenarioInformation Technology & IT enabled services have cometo play a significant role in our day to day work. Keepingthis in mind this programme was arranged.


The programme began with our Chairman Mr. VijayLaghate welcoming the guest and presented bouquets.Mr. Mohan Nair our past Vice chairman and Life membergave the welcome address. He spoke of his associationwith IIMM and on the activities of SparkplugsEducational & Learning Services. He emphasized on theimportance of the IT & IT enabled services to improvethe performance of an individual & company.

Mr. Dinesh Poduval ( Process Developer ) made aneffective presentation on Process Automation. He spokeof the need for the same and the benefits to theorganization. Experiences with customers were alsoshared and the gains they have made from the processautomation. A few examples were also demonstratedfor the benefit of the members.

Mr. Punit Jain ( Global Sales Head ) Datamatics GlobalServices spoke on how products and services can helpto achieve zero defect performance. He shared hisexperiences on the same with help of a presentation.

The topic generated a lot of interest among the membersand this followed by a question and answer session. Mr.Prashant Bendre our Past Vice President who graced theoccasion was felicitated by Chairman Mr. Vijay Laghate.The programme was attended by over 125 members &guests. This was followed by dinner wherein membershad an opportunity of interacting with other membersand networking.

FAMILLY GET TOGETHER OF IIMM PUNE CENTRE

Chairman Mr.Vijay Laghate felicitating Mr.Vikas Bhurefor Completing IPSCM course successfully.


IIMM Pune Branch organized a Family Get Together ofmembers at Shivsamarth Hall at Paud Road Pune. Total150 No. of people attended the programme. Theentertainment programme of orchestra by Mr.AnayGadgil and his team was arranged during this gettogether.

Chairman Mr.Vijay Laghate welcoming Past NationalPresident IIMM

Felicitation of Awardees for YMM Competition held atBangalore

Felicitation of Awardees for YMM Competition held atBangalore.

Chairman Mr.Vijay Laghate distributed the mementos tothe two teams who won 1st & 3rd prize during YoungMaterials Manager's Competition conducted in NATCOM2003 held at Banglore. The mementos were awarded to

Mr. Swaroop KulkarniMr. Mukunda PrasadMr. Rajesh DhakeMr. Ramesh Patil

All above participants were from M/s Godrej & Boycemfg co ltd. Mr.V.W.Joshi Past Chairman conducted theprogramme.

Mr.Pinak Kulkanri - Life member was also felicitatedwho completed one week" Train the Trainers" programmearranged by ITC Geneva at Mumbai during 21st to 25thFeb 2011. Mr.S.J.Lale Past Chairman felicitatedMr.S.N.Barate securing first class in GDMM Course. Theget together was concluded with Dinner.---------------------------------------------------------------------------


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E X E C U T I V E H E A L T H

Green tea improves quality of life

Previous studies have shown that people whoconsume the highest levels of green tea tend tohave lower risks of several chronic degenerative

diseases such as cardiovascular disease andosteoporosis.

Now, a new study has suggested that drinking green teaand practicing tai chi may promote bone health as wellas reduce the risk of inflammation in postmenopausalwomen.

Researcher Chwan-Li Shen, an associate professor anda researcher at the Laura W. Bush Institute for Women'sHealth at the Texas Tech University Health SciencesCenter, focused on postmenopausal women andinvestigated the potential for green tea to worksynergistically with tai chi in enhancing bone strength.

She carried out a double-blind, placebo-controlled,intervention trial that involved 171 postmenopausalwomen who had weak bones but not full-fledgedosteoporosis, for six months.

She placed the women into four groups. One group wasgiven a placebo drug and no tai chi, the second wasgiving green tea pills but no tai chi, the third was givenplacebo pills but they did tai chi three times a week,while the fourth group had both the green tea pills anddid tai chi.

She collected blood and urine samples, and assessedthe women's muscle strength.

The results showed consuming the equivalent of four tosix cups of steeped green tea daily and doing tai chienhanced bone health within three months.

A similar effect was found for muscle strength at the 6-month time point.

Perhaps most remarkable, however, was the substantialeffect that both GTP and tai chi had on biological markersof oxidative stress, the main precursor to inflammation.

Participants taking tai chi classes also reportedsignificant beneficial effects in quality of life in termsof improving their emotional and mental health.

Shen concluded that there is a 'favourable effect ofmodest green tea consumption on bone remodeling inthis pre-osteoporotic population."

Source: ANI

Set a summer diet plan

It's a natural trend to eat light during summer, and youcan easily do so without feeling deprived.

It's also natural for one to opt for a glass of cold fruitjuice or an ice cream instead of a hot soup. Interestsshift from high calorie foods of winter to low caloriefoods. But, dietician Gunasekharan believes that summeris the season when it's easiest to eat healthy.

Drink water

Youngsters usually consume more aerated drinks duringthe summer. But experts say that water is a smarterchoice. Water keeps the body cool and preventsdehydration.

Have a lot of fruits and vegetables

Summer is the best season for a variety of fresh fruitsand vegetables; make the most of them. Include at leasttwo servings of fruits and vegetables to your daily diet.Fruit smoothies and milkshakes are easy to make andhealthy options. Pan-roasted fresh vegetables orinnovative salads are also a tasty option without beingheavy on the tummy.

Curd and yoghurt are cool options

Include some form of curd or yoghurt in your meals.Buttermilk is another great cooler. Having a glass ofbuttermilk or chaas just before stepping out into thesun, helps prevent dehydration.

Get in your protein

Many people tend to reduce their protein intake duringthe warmer months of the year. However, you should notleave out proteins altogether. It is an important part ofyour diet.

Salads are for smarties

Eating a lot of fresh salads during the summer months isa great idea. However, when having a lot of salads, youneed to make sure that your nutritional requirementsare taken care of. A fresh dressing made from lemonsand olive oil is going to be a lot healthier than a creamy,mayo dressing.

Make sure that your food is fresh

All the health benefits that you get from eating lightsummer food may be wasted if you fall sick becauseyou've eaten food that is not fresh.

(Contributed by Banhi Sikha Roy)

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